Major International Business Headlines Brief::: 05 October 2022
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Major International Business Headlines Brief::: 05 October 2022
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ü Elon Musk Twitter deal back on in surprise U-turn
ü Tesco: People watching every penny to make ends meet
ü Elizabeth Holmes: Theranos founder gets hearing on new trial
ü Five reasons why China's economy is in trouble
ü EU Parliament approves common charging cable from 2024
ü Port of Felixstowe: What do strikes at UK's biggest container port mean?
ü Elizabeth Holmes: Theranos founder gets hearing on new trial
ü Shell boss says taxing energy firms to help the poor is 'inevitable'
ü Pound at two-week high after spending plan reports
ü Clacton Seaquarium closing down amid soaring energy costs
ü Nigeria: Lagos Okada Ban Reduces Crime but Ease of Commute Remains
Challenging
ü Nigeria: Uzodinma Approves Free Medical Care for Imo Workers
ü Nigeria: How We're Fighting Oil Theft, Vandalism - Kyari
ü Nigeria: House Investigates Reoccurring National Grid Collapse
ü Nigeria: For Second Time in 45 Years, NNPCL Declares Profit, Rakes in
N674bn After Tax Revenues
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Elon Musk Twitter deal back on in surprise U-turn
Billionaire Elon Musk has apparently changed his mind about buying Twitter,
again, and is now willing to proceed with his takeover of the social media
platform.
In a letter to the firm, Mr Musk agreed to pay the price he offered months
ago before trying to quit the deal.
The surprise reversal comes just weeks before the two sides were due in
court.
Twitter, which had sued Mr Musk to force the takeover to move forward, was
seen as having the stronger case.
In the letter, attorneys for Mr Musk said he intended to move ahead to
complete the transaction, pending receipt of the financing and an end of the
legal fight.
A spokesperson for Twitter acknowledged the firm had received the proposal,
adding "the intention of the company is to close the transaction at $54.20
per share" - the price that Mr Musk promised in April.
The apparent win for Twitter sent its shares soaring more than 20% to more
than $52 apiece. But the value remained lower than the takeover price, in a
sign of lingering investor doubts the deal will go through.
Later on Tuesday, Mr Musk wrote in a tweet: "Buying Twitter is an accelerant
to creating X, the everything app".
When Mr Musk first revealed plans to buy Twitter in a $44bn deal, he said he
wanted to clean up spam accounts on the platform and preserve it as a venue
for free speech.
But the billionaire, a prolific Twitter user known for his impulsive style,
balked at the purchase just a few weeks later, citing concerns that the
number of fake accounts on the platform was higher than Twitter claimed.
Twitter executives denied the accusations, arguing that Mr Musk - the
world's richest person with a net worth of more than $220bn - wanted out
because he was worried about the price.
The back-and-forth followed a sharp downturn in the value of technology
stocks, including Tesla, the electric car company that Mr Musk leads and is
the base of much of his fortune.
The fight, which was scheduled to go to trial 17 October, saw the two sides
face off in lengthy court filings, private messages and bitter public spats
on Twitter, where Mr Musk has more than 100 million followers.
In one such exchange, Mr Musk responded to Twitter boss Parag Agrawal with
an emoji for faecal matter.
Preparation for the trial had ensnarled many of the biggest names in tech,
as lawyers for the two companies demanded communications about the deal.
Mr Musk, who could have paid a $1bn break-up fee to walk away, was set to be
interviewed ahead of the trial this week.
Some industry watchers, who were taken by surprise by the development,
questioned whether the latest twist was a concrete offer or a delay tactic.
It's hard to keep track with this deal. On, off, now - it appears - on
again.
However there's a lot to read into Twitter's brief statement.
The "intention" to go through with the deal suggests a nervousness that this
is a delaying tactic from Musk's team.
The statement effectively can be read as - 'We are going to pursue this
sale, whatever Elon Musk says or does'.
The way Twitter also, so pointedly, says it will sell the company at $54.20
suggests they are still worried about Musk lowballing.
So far Musk has been a highly erratic negotiating partner - hot and cold.
Keen one minute, looking for the exit the other.
You can see why Twitter is playing it cautiously.
At Twitter, which has been thrown into turmoil since Mr Musk first turned
his attention to the firm, staff told the BBC that their bosses were
initially silent on the matter, even as the report spread widely.
Investors have long been sceptical that the takeover would go forward,
especially since Mr Musk was seen as offering a heady price for a firm
struggling to attract users and grow.
Twitter shares had been trading below $43 apiece at the start of the day.
News that Mr Musk had proposed to honour the original agreement sent shares
in the company soaring almost 13% before trading was halted.
Listen to Elon Musk: The Evening Rocket
Zelensky and Musk in row over 'peace plan poll'
Who is Elon Musk?
Wedbush Securities analyst Dan Ives said Mr Musk's chance of winning in
court was "highly unlikely".
"Being forced to do the deal after a long and ugly court battle in Delaware
was not an ideal scenario and instead accepting this path and moving forward
with the deal will save a massive legal headache," he wrote in a report
after the news.
But he added, that Mr Musk's ownership of the platform, a top venue for
politicians and journalists to spread news and opinion, would still likely
cause a "firestorm of worries and questions" in Washington and beyond.-BBC
Tesco: People watching every penny to make ends meet
Tesco has said people are "watching every penny" as they try to make ends
meet, amid rising costs.
The UK's largest supermarket chain said customers are looking for ways to
make their money go further, including switching from branded products and
cutting back on eating out.
It came as Tesco reported a fall in profits and warned full-year earnings
would be at the lower end of guidance.
It also announced a further boost to pay for UK workers.
The cost of living is increasing at its fastest rate in nearly 40 years,
driven by the rising cost of food and energy.
It is eating into household budgets, with prices rising faster than wages.
Tesco said consumers were already spending less as shopping habits
normalised after the pandemic, but they are cutting back even more now
because of inflation.
The supermarket giant said operating profits in its retail division fell by
10% in the six months to the end of August. However, sales across the whole
group excluding its fuel business increased by more than 3% .
The retailer now expects annual underlying retail earnings of between £2.4bn
and £2.5bn, which is at the lower end of previous guidance.
Tesco boss Ken Murphy said customers were trying to "make their money go
further, whether they are switching from branded products, between
categories or cutting back on eating out".
"As we look to the second half [of the year], cost inflation remains
significant, and it is too early to predict how customers will adapt to
ongoing changes in the market," he added.
"We know our customers are facing a tough time and watching every penny to
make ends meet."
Shoppers are being squeezed and supermarkets are feeling the pressure, too.
It's more competitive than ever in the grocery aisles. And there's a massive
shift in shopping habits underway.
Tesco says customers are switching from branded to cheaper own label
products, making more frequent shopping trips and putting fewer items in
their baskets as well buying more frozen food.
Like other supermarkets, Tesco is also having to absorb some cost price
increases to protect customers and stop them from shopping elsewhere. And
that's hitting retail profits, as well as the return to more normal shopping
habits after the pandemic.
For all retailers, there's a lot of uncertainty ahead. But Tesco, helped by
its huge scale, looks well placed to navigate the cost of living crisis.
Tesco faces mounting competition from discounters such as Aldi, which became
the fourth-largest UK supermarket for the first time in September as
shoppers looked to make savings.
In its update, Tesco said it would lock in the prices of more than 1,000
everyday products until next year to help consumers cope with rising costs.
It also announced that its shop staff in the UK are set to receive another
pay rise, their second this year.
Rival chains Morrisons, Sainsbury's and Asda have also hiked pay for their
store workers this year, as UK supermarkets battle for staff amidst
increasing competition in the sector.
Matt Britzman, equity analyst at Hargreaves Lansdown, said Tesco was under
pressure from competitors as shoppers felt the pinch.
"Supermarkets are no strangers to dealing with cost-of-living pressures,
there's been an all-out price war in the industry for some years now," he
said.
"Amongst the larger players, Tesco's arguably been one of the standout
businesses in the battle against low-cost outfits [such as Aldi and Lidl]
but pressures on consumer spending can only build for so long before
something must give."-BBC
Elizabeth Holmes: Theranos founder gets hearing on new trial
Sentencing of former Theranos boss Elizabeth Holmes has been delayed as a
judge considers whether the testimony of a key witness in her high-profile
trial was truthful.
Holmes requested a new trial after claiming that federal prosecutors
presented misleading evidence.
She was convicted in January on four of 11 counts of defrauding investors in
the blood-testing firm.
The decision marks the latest twist in a case that has gripped Silicon
Valley.
Holmes entered the "motion for a new trial based on newly discovered
evidence" regarding former Theranos laboratory director Adam Rosendorff,
court papers showed.
Theranos founder Elizabeth Holmes guilty of fraud
Theranos exec Sunny Balwani convicted of fraud
Holmes' lawyers said that Mr Rosendorff appeared at her home in August to
express regret over his testimony in the trial.
This latest development comes after her lawyers last month failed in an
attempt to get the conviction overturned.
Holmes, who is currently free on bail, had been due to be sentenced on 17
October.
In January, a jury found Holmes guilty of defrauding investors after a
months-long landmark trial in California.
Jurors found her guilty of conspiracy to commit fraud against investors and
three charges of wire fraud. She denied the charges.
Prosecutors said Holmes knowingly lied about technology that she said could
detect diseases such as cancer and diabetes with a few drops of blood. The
firm promised that it would revolutionise the healthcare industry with the
test.
But these claims began to unravel in 2015 after a Wall Street Journal
investigation reported that its core blood-testing technology did not work.
Her ex-boyfriend and former Theranos President Ramesh "Sunny" Balwani was
found guilty in July on similar counts, as well as defrauding patients. He
is scheduled to be sentenced next month.
Theranos was once the darling of biotech and Silicon Valley, valued at $9bn
(£7.9bn) at its peak.
Holmes was able to raise more than $900m from billionaires, including media
magnate Rupert Murdoch and technology mogul Larry Ellison.-BBC
Five reasons why China's economy is in trouble
China's economy is slowing down as it adapts to a punishing zero-Covid
strategy and weakening global demand.
Official growth figures for the July to September quarter are expected soon
- if the world's second-largest economy contracts, that increases chances of
a global recession. Beijing's goal - an annual growth rate of 5.5% - is now
out of reach although officials have downplayed the need to meet the target.
China narrowly avoided contraction in the April to June quarter. This year,
some economists do not expect any growth.
The country might not be battling steep inflation like the US and the UK,
but it has other problems - the factory of the world has suddenly found
fewer customers for its products both domestically and internationally.
Trade tensions between China and major economies such as the US are also
hampering growth.
And the yuan is on course for its worst year in decades as it plummets
against the US dollar. A weak currency spooks investors, fuelling
uncertainty in financial markets. It also makes it difficult for the central
bank to pump money into the economy.
All of this is happening at a time when the stakes are especially high for
President Xi Jinping - he is expected to secure an unprecedented third term
at the Communist Party Congress (CPC) which begins on 16 October.
So what exactly has gone wrong?
1. Zero Covid is wreaking havoc
Covid outbreaks in several cities, including manufacturing hubs like
Shenzhen and Tianjin, have been hurting economic activity across industries.
People are also not spending money on things like food and beverages, retail
or tourism, putting major services under pressure.
On the manufacturing side, factory activity appears to have climbed back up
in September, according to the National Bureau of Statistics.
The rebound could be because the government is spending more on
infrastructure.
But it came after two months in which manufacturing did not expand. And it
has raised questions, especially since a private survey showed that factory
activity actually fell in September, with demand hitting output, new orders
and employment.
Demand in countries like the US has declined too because of higher interest
rates, inflation and the war in Ukraine.
Zero Covid holds danger for China's Xi
Experts agree that Beijing could do more to stimulate the economy, but there
is little reason in doing so until zero Covid ends.
"There is not a lot of point in pumping money into our economy if businesses
cannot expand or people cannot spend the money," said Louis Kuijs, chief
Asia economist at S&P Global Ratings.
2. Beijing isn't doing enough
Beijing has stepped in - in August it announced a 1 trillion yuan ($203bn;
£180bn) plan to boost small businesses, infrastructure and real estate.
But officials can do a lot more to trigger spending to meet growth targets
and create jobs.
Chinese President Xi Jinping waves after speaking during a ceremony to
honour contributions to the Beijing 2022 Winter Olympics and Paralympics at
the Great Hall of the People on April 8, 2022 in Beijing, China.
This includes investing more in infrastructure, easing borrowing conditions
for home buyers, property developers and local government, and tax breaks
for households.
"The response of the government to the weakness in the economy has been
quite modest compared to what we have seen during previous economic bouts of
weakness," Mr Kuijs said.
3. China's property market is in crisis
Weak real estate activity and negative sentiment in the housing sector has
undoubtedly slowed growth.
This has hit the economy hard because property and other industries that
contribute to it account for up to a third of China's Gross Domestic Product
(GDP).
"When confidence is weak in the housing market, it makes people feel unsure
about the overall economic situation," Mr Kuijs said.
Home buyers have been refusing to make mortgage payments on unfinished
buildings and some doubt their houses will ever be completed. Demand is down
for new homes and that has reduced the need for imports of commodities used
in construction.
Despite Beijing's efforts to prop up the real estate market, home prices in
dozens of cities have declined by more than 20% this year.
With property developers under pressure, analysts say authorities might have
to do far more to restore confidence in the real estate market.
4. Climate change is making matters worse
Extreme weather is starting to have a lasting impact on China's industries.
A severe heatwave, followed by a drought, hit the south-western province of
Sichuan and the city of Chongqing in the central belt in August.
As the demand for air conditioning spiked, it overwhelmed the electricity
grid in a region that almost entirely relies on hydropower.
Factories, including major manufacturers like iPhone maker Foxconn and
Tesla, were forced to cut hours or shut altogether.
China's Statistics bureau said in August that profits in the iron and steel
industry alone were down by more than 80% in the first seven months of 2022,
compared to the same period last year.
Beijing eventually came to the rescue with tens of billions of dollars to
support energy companies and farmers.
5. China's tech titans are losing investors
A regulatory crackdown on China's tech titans - which has already lasted two
years - is not helping.
Tencent and Alibaba reported their first drop in revenue in the most recent
quarter - Tencent's profits fell by 50%, while Alibaba's net income fell by
half.
A residential housing site under construction in Nanjing, Jiangsu Province,
China, Sept 1, 2022.
Tens of thousands of young workers have lost work - adding to a jobs crisis
where one in five people aged 16 to 24 are unemployed. This could hurt
China's productivity and growth in the long run.
Investors are also sensing a shift in Beijing - some of China's most
successful private companies have come under greater scrutiny as Mr Xi's
grip on power grows.
As state-owned companies appear to be gaining favour, foreign investors are
taking money off the table.
Japan's Softbank pulled out a huge amount of cash from Alibaba, while Warren
Buffet's Berkshire Hathaway is selling its stake in electric vehicle maker
BYD. Tencent has had more than $7bn worth of investments withdrawn in the
second half of this year alone.
And the US is cracking down on Chinese companies listed on the American
stock market.
"Some investment decisions are being postponed, and some foreign companies
are seeking to expand production in other countries," S&P Global Ratings
said in a recent note.
The world is becoming accustomed to the fact that Beijing may not be as open
for business as it used to be - but Mr Xi is risking the economic success
that has powered China in recent decades.-BBC
EU Parliament approves common charging cable from 2024
European MPs have voted for a law requiring all new portable devices to use
the same type of charging cable.
Smartphones and tablets, including the Apple iPhone and iPad, would have to
use a USB-C charger from 2024, while laptop manufacturers would have until
2026 to make the change.
There were 602 votes in favour and 13 against, with eight abstaining.
Member states are expected to grant approval on 24 October, before the rule
is signed into law at the parliament.
Following a provisional agreement by the European Union, in June 2022, the
UK government told BBC News it was not "currently considering" introducing a
common charging cable.
But under the current post-Brexit arrangements, the new regulation could
apply to Northern Ireland.
The "new requirements may also apply to devices sold in Northern Ireland
under the terms of the Northern Ireland protocol in the Brexit agreement,
potentially triggering divergence of product standards with the rest of the
UK", according to a December 2021 parliamentary report.
The treaty works by keeping Northern Ireland inside the EU's single market
for goods, while the rest of the UK is outside it.
A row between the UK and EU about how to reform the Northern Ireland
protocol remains unresolved.
EU Commissioner for Competition Margrethe Vestager celebrated the new rule
on Twitter, citing the "waste and inconvenience" of having multiple
chargers.
But Apple has historically argued against the proposal.
When it was first introduced, in September 2021, an Apple representative
told BBC News: "Strict regulation mandating just one type of connector
stifles innovation rather than encouraging it, which in turn will harm
consumers in Europe and around the world".
The technology giant is the main manufacturer of smartphones using a custom
charging port, as its iPhone series uses an Apple-made Lightning connector.
Apple has been approached for comment.
The new rule will cover a range of "small and medium-sized portable
electronics", according the EU, including:
mobile phones
tablets
e-readers
mice and keyboards
GPS (global positioning system) devices
headphones, headsets and earphones
digital cameras
handheld videogame consoles
portable speakers-BBC
Port of Felixstowe: What do strikes at UK's biggest container port mean?
Workers at Felixstowe, the UK's busiest container port, have returned to
work after an eight-day strike. But what impact did the industrial action
have on shipping in and out of the terminal?
For the past eight days, hundreds of port workers who are members of the
union Unite have been on strike at Felixstowe
The Port of Felixstowe in Suffolk is a vast operation and handles almost
half of the UK's container trade.
For the past eight days, hundreds of workers, who are members of the union
Unite, were on strike.
The BBC asked the Port of Felixstowe what impact this action had on shipping
and UK supply chains, but the port declined to comment on the record.
Instead, the BBC turned to available shipping data to see if it could shed
some light.
MarineTraffic is a global maritime analytics provider.
Alex Charvalias, the company's supply chain in-transit visibility lead,
said: "While the Felixstowe port is still trying to handle the congestion
caused by the [previous] strike in August, it is now feeling the impact of
the latest strike."
One of the key measures used in shipping is the TEU, which is stands for
twenty-foot equivalent units - the size of a standard shipping container.
He pointed to a big increase in the number of containers on ships waiting to
come into port, compared to the pre-strike volume earlier in the summer.
"On 30 September, the total TEU capacity waiting 'off port limits' [just
outside a port] for container ships has been the highest observed in recent
months, reaching more than 65,500 TEUs," said Mr Charvalias.
Between June and July, the capacity of containerships waiting off port
limits was between 20,000 and 30,000 TEUs.
"The disruptions of this strike... and the new one planned from 11 to 17
October in the port of Liverpool, will unquestionably aggravate even more
the congestion."
During the previous strike in August, container ship in-port waits rose from
between one and two days to eight days
How long are container ships having to wait in port?
MarineTraffic said the full data for the current week was not yet available.
However, during the previous eight-day strike in August, container ship
in-port waits rose from between one and two days to eight days.
Do longer waits in port matter?
Possibly not, according to one person the BBC spoke to with knowledge of the
port's operations.
The BBC was told that because of the wider slowdown in the UK economy,
retailers were not currently as dependent on getting new stock in as they
had previously been.
The source said logistics managers, in the wake of the global pandemic,
factored in "expected disruption" to their operations.
Founded as The Felixstowe Railway and Pier Company in 1875, the port has
main two terminals running along the north bank of the Harwich Harbour
estuary - Landguard and Trinity - and a roll on/roll off facility.
Trinity has seven deep-water berths, one of Europe's longest continuous
quays measuring 2.5 km (1.5 miles), 17 ship-to-shore gantry cranes, 48
rubber-tyred gantry cranes, 10 high-stacking container handlers and four top
loading reach-stackers.
Berths eight and nine were built at the Landguard Terminal to accommodate
the world's largest container ship, the Olympic class MSC Oscar, which can
carry 19,224 TEU containers.
Each year, Felixstowe sees in about 2,000 ships, handles four million TEUs
and hosts 17 different shipping lines.
But what do shipping companies do when there is industrial action at a port?
One industry insider told the BBC: "The ships that call at Felixstowe will
call at other ports as well on the way.
"So, if there is industrial action in Felixstowe, they might unload the
Felixstowe cargo at another port and then reload on to the next ship.
"Shipping lines tend to prefer to delay a shipment than divert it."
Pay is at the heart of the dispute between the port's Chinese owners
Hutchison and the union Unite, which represents about 1,900 of the port's
2,500 or so workers.
The port has offered an increase of 7% plus £500 backdated to 1 January
2022.
Unite claims with inflation currently running at about 10%, the offer is
effectively a pay cut.
At the start of September, the port said negotiations had broken down and it
would introduce its pay award without union agreement.
The latest eight-day strike, which ended at 06:59 BST on Wednesday, followed
another eight days of industrial action in August.
Unite said although further industrial action had not yet been called for at
Felixstowe, it was "likely" unless the port changed its current position
regarding the pay offer.-BBC
Elizabeth Holmes: Theranos founder gets hearing on new trial
Sentencing of former Theranos boss Elizabeth Holmes has been delayed as a
judge considers whether the testimony of a key witness in her high-profile
trial was truthful.
Holmes requested a new trial after claiming that federal prosecutors
presented misleading evidence.
She was convicted in January on four of 11 counts of defrauding investors in
the blood-testing firm.
The decision marks the latest twist in a case that has gripped Silicon
Valley.
Holmes entered the "motion for a new trial based on newly discovered
evidence" regarding former Theranos laboratory director Adam Rosendorff,
court papers showed.
Holmes' lawyers said that Mr Rosendorff appeared at her home in August to
express regret over his testimony in the trial.
This latest development comes after her lawyers last month failed in an
attempt to get the conviction overturned.
Holmes, who is currently free on bail, had been due to be sentenced on 17
October.
In January, a jury found Holmes guilty of defrauding investors after a
months-long landmark trial in California.
Jurors found her guilty of conspiracy to commit fraud against investors and
three charges of wire fraud. She denied the charges.
Prosecutors said Holmes knowingly lied about technology that she said could
detect diseases such as cancer and diabetes with a few drops of blood. The
firm promised that it would revolutionise the healthcare industry with the
test.
But these claims began to unravel in 2015 after a Wall Street Journal
investigation reported that its core blood-testing technology did not work.
Her ex-boyfriend and former Theranos President Ramesh "Sunny" Balwani was
found guilty in July on similar counts, as well as defrauding patients. He
is scheduled to be sentenced next month.
Theranos was once the darling of biotech and Silicon Valley, valued at $9bn
(£7.9bn) at its peak.
Holmes was able to raise more than $900m from billionaires, including media
magnate Rupert Murdoch and technology mogul Larry Ellison.-BBC
Shell boss says taxing energy firms to help the poor is 'inevitable'
Taxes on firms within the oil and gas industry are "inevitable" to help the
poorest people, the outgoing boss of Shell has said.
Ben van Beurden said that energy markets cannot behave in a way that "damage
a significant part of society".
Households in the UK have been under pressure from rising energy bills as
gas prices have soared.
The UK government under Liz Truss has pushed back against extending a
windfall tax on oil and gas firms.
Last week, the EU agreed emergency measures to charge energy firms on record
profits.
Energy prices jumped when Russia invaded Ukraine earlier this year, although
prices had already been rising as economies began to recover after Covid
lockdowns were lifted.
What is the windfall tax on oil and gas companies and how does it work?
EU agrees windfall tax on energy firms
Speaking to the Energy Intelligence Forum, an oil industry event, Mr van
Beurden said: "You cannot have a market that behaves in such a way -
logically and effectively and everything else - that it's going to damage a
significant part of society."
He said that "one way or another" there would be government intervention
that "results in protecting the poorest".
"That probably means governments need to tax people in this room to pay for
it - I think we just have to accept [that] as a societal reality," he said.
Mr van Beurden added that taxes can be brought in "smartly and not so
smartly".
"There is a discussion to be had about it but I think it's inevitable," he
said.
However, governments should not intervene to cap gas prices, he added.
The UK brought in a windfall tax on bumper oil and gas profits in May, but
Prime Minister Liz Truss has ruled out extending it.
The tax - called the Energy Profits Levy - applies to profits made by
companies from extracting UK oil and gas, and the Treasury expects it to
raise about £5bn in its first year.
A UK Government spokesperson said: "The government has been clear that it
wants to see the oil and gas sector reinvest its profits to support the
economy, jobs, and the UK's energy security."
"We expect our Energy Profits Levy, announced in May, to raise an extra £7
billion in its first year which will help pay for the £400 energy bills
discount for all households to help with energy bills from October.
"This is on top of our new Energy Price Guarantee, announced last month
which will save the average household around £1,000 a year based on current
energy prices from October."
Susannah Streeter, senior investment and market analyst, Hargreaves
Lansdown, said Mr van Beurden's comments had "flung open a door on a
windfall tax which the UK government had been trying to close".
"This will reignite the debate over how profits of energy giants should be
taxed, just as a row rages about whether welfare spending will be hit to pay
for the Truss administration's slash and spend policies," she said.
Production cut?
The price of Brent Crude oil has fallen from $120 per barrel in May to about
$90 per barrel, although these are still the highest prices since 2014.
Nevertheless, the Opec oil cartel is expected to announce a cut in output at
a meeting on Wednesday, a decision which is designed to support prices.
"Such a decision would be difficult to justify fundamentally, as the oil
market suffers anything but a surplus," said Norbert Rucker, head of
economics at private banking firm Julius Baer.
"The petro-nations seem willing to exploit their power to artificially prop
up oil prices, increasing the tensions with the oil consumers."
Pound at two-week high after spending plan reports
The pound has risen to its highest level for two weeks on hopes Kwasi
Kwarteng will bring forward details of how he will cut debt.
It rose to $1.14, recovering after the chancellor's plans to fund tax cuts
by extra borrowing rattled investors.
The pound remained high despite confusion over when he would set out his
debt-cutting plan.
It is scheduled for 23 November but the BBC had understood that it would be
bought forward to later this month.
On Monday, Mr Kwarteng had said his plans for how to boost growth as well as
an independent assessment of the economic impact of his tax-cutting plans by
independent forecaster the Office for Budget Responsibility (OBR) would be
published "shortly".
The new date was expected to be announced once parliament returns on 11
October.
However on Tuesday, both Mr Kwarteng and Prime Minister Liz Truss stold GB
news the so called "fiscal plan" would still happen on 23 November.
Fears his tax-cutting plans are unaffordable sparked turmoil on markets last
week after Mr Kwarteng laid out the measures in a mini-budget.
Conservative MP Mel Stride, chair of the Treasury Select Committee, told the
BBC's Today programme the plan to cut debt would be "critical in calming the
markets".
In the wake of the mini-budget, the pound slumped to a record low,
government borrowing costs surged and the Bank of England was forced to step
in and take emergency action after the dramatic market movements put some
pension funds at risk of collapse.
Pound dollar graphic
Market turmoil was fuelled by the lack of an independent assessment on the
impact of the plans, which had been offered by the Office for Budget
Responsibility (OBR), but was declined by the government.
Investors also bet interest rates would rise faster than previously thought,
leading banks to withdraw more than a thousand mortgage products as the
uncertainty made long-term loans difficult to price.
Andrew Montlake, a mortgage broker at Coreco Partners, told the BBC that the
beginning of last week had been "a whirlwind of activity and confusion".
His staff worked around the clock to help clients tie down deals before
lenders pulled their products or replaced them with more expensive ones.
The inside story of the UK's economic turmoil
"If we spoke to a client at nine in the morning and quoted them a rate, we
had to phone back two hours later and say: 'It's going in the next hour. You
need to make a quick decision if you want it'," he said.
Homeowners about to come off fixed rates were facing huge jumps in their
monthly payments, he added.
Tory backlash
Mr Stride said if the OBR forecast stacks up then interest rate expectations
could fall "which is going to matter to millions of people up and down the
country when it comes to their mortgages".
After a backlash from Tory MPs over plans to scrap the top income tax rate
for high-earners, Mr Kwarteng made a dramatic U-turn on Monday, declaring he
would abandon the move. He then later agreed to bring forward the date of
his spending plan.
line
What does value of pound mean for my finances?
A fall in the value of the pound will increase the price of goods and
services imported into the UK from overseas.
That's because when the pound is weak against the dollar or euro, for
example, it costs more for companies in the UK to buy things such as food,
raw materials or parts from abroad.
Firms could choose to pass on those higher prices to their customers. And
that could push up inflation, which tracks how the cost of living changes
over time.
Read more
line
This is now due to published later this month, ahead of 3 November when the
Bank of England next meets to make its latest decision on interest rates.
Interest rates have risen seven times since December as the Bank tries to
curb inflation - the rate at which prices rise. This is currently at a near
40-year-high of 9.9%.
After last week's turmoil, investors were estimating interest rates could
reach more than 6% next year - although expectations have since edged back
to around 5.4%.
Raising interest rates makes it more expensive to borrow which should, in
theory, encourage people to spend less and cool inflation, but it also makes
borrowing money for mortgages or other loans more expensive.
Mr Stride said: "If [the OBR forecast] is well received... you might expect
the [Bank of England] to come up with a lower level of interest rate rises,
which of course once again will be very helpful for those with mortgages,
business borrowing and indeed for the cost of the government servicing its
own debt."
However, he said there were doubts over whether the OBR would give the
government its blessing.
Mr Stride said much would ride on the government proving that its policies
can, as promised, boost economic growth to a yearly rate of 2.5% which will
be "difficult to do".
Failing that, Mr Stride said the government would have to "row back" on
other promised tax cuts or "lean into" public spending cuts at time of
soaring inflation, which could meet fierce resistance.
Prime Minister Liz Truss has refused to confirm whether benefits will rise
with inflation, a change that would save about £5bn.
But Penny Mourdant, Leader of the House of Commons, has openly opposed the
idea telling Times Radio: "We're not about trying to help people with one
hand and take it away with another."-BBC
Clacton Seaquarium closing down amid soaring energy costs
An aquarium that is expecting its energy bills to quadruple by 2024 will
close to visitors permanently at the end of this month.
The Seaquarium at Clacton Pier, Essex, has been open for about four decades.
It is home to roughly 900 individual fish and other sea creatures, including
smooth hound sharks, red-bellied piranhas and turtles.
Nigel Brown, communications manager for the pier, said energy costs were
already £1,500 per month.
"It's a big operation for what is a relatively small part of our business,"
said Mr Brown.
"We like to think we've run it well, given a bit of education to children
and helped push the conservation message."
There has been some form of wildlife-based attraction the pier since the
1930s, which in the past has included whales, dolphins, sea lions and
penguins.
The Department for Environment, Food and Rural Affairs recently gave it a
positive veterinary inspection report.
The building structure is about 150 years old and needs maintenance.
It was closed to visitors for much of last year during the pandemic, but
conservation and maintenance work continued.
Denise Carlton, pictured in the Seaquarium's fish welfare unit, was one of
the staff who continued working on site during the pandemic
Seaquarium director Billy Ball said the venue, which charges £3 entry, would
have to meet stricter regulatory standards if it were to renew its licence
with Tendring District Council.
"If it was to remain, we would have also wanted to look to come up with more
conservation activities and that was simply not viable," he said.
"We are now in a very different world with emphasis on protecting the
environment quite rightly gaining greater priority.
"All things considered, including overheads and the rising cost of energy,
we decided it was time to close that chapter in the pier's history and move
forward."
The owners said they were in discussions with other aquariums, including
Sealife Adventure in Southend, to rehome all the sea life.
Mr Brown said they hoped to replace it with another attraction, "probably"
for younger children.-BBC
Nigeria: Lagos Okada Ban Reduces Crime but Ease of Commute Remains
Challenging
"Since the ban, I have been trekking. So have many."
On 1st September, the second phase of the Lagos State government's ban on
the operation of commercial motorcycles (popularly called Okada) took
effect.
The phase saw the ban on Okada operations in parts of the state gaining more
ground, with its extension to more areas.
It was extended to four more Local Government Areas (LGAs) and six Local
Council Development Areas (LCDAs).
The state named the additional areas as Oshodi- Isolo LGA, Kosofe LGA,
Shomolu LGA and Mushin LGA.
Agboyi -Ketu LCDA, Odi-Olowo LCDA, Bariga LCDA, Isolo LCDA, and Ikosi-Isheri
LCDA were also given as the LCDAs affected by the ban.
Earlier in the year, the state government, after a critical review of its
restriction on Okada activities in the first six LGAs from 1st February
2020, strengthened it further in the areas.
It expanded the restriction to a total ban across the highways and bridges
within the six LGAs and their LCDAs, effective from 1st June 2022.
The state listed affected LGAs as Apapa, Surulere, Ikeja, Lagos Mainland,
Lagos Island, and Eti Osa.
Apapa Iganmu LCDA, Coker- Aguda LCDA,, Itire -Ikate LCDA, Onigbongbo LCDA,
Ojodu LCDA, Lagos Island West LCDA, Lagos Island East LCDA, Yaba LCDA, Ikoyi
Obalende LCDA, Iru Victoria Island LCDA, Eti-Osa West LCDA, and Eti Osa East
LCDA were also listed as the LCDAs affected by the ban.
Governor Babajide Sanwo-Olu said the ban was to implement the state traffic
law and check the threats posed by operations of commercial motorcycles in
the state.
One month after the second phase of the ban took effect, motorists, riders,
commuters, security agents and others have different experiences.
For some riders who tried to defy the ban, the security officials have cut
many to size.
The Lagos State Environmental and Special Offences (Enforcement) Unit said
it impounded 150 motorcycles for violating traffic rules in the last week of
September alone.
The unit's spokesperson, Gbadeyan Abdulraheem, said the motorcycles were
impounded after a weeklong operation in parts of the state.
Mr Abdulraheem stated that there had been about 95 per cent compliance with
the ban, but that the 150 motorcycles impounded were used to flout the
order.
Others who were in the business have not been daring, but taken the ban in
their stride, settling for other means of making ends meet.
Dauda Yusuf, who rode Okada in Surulere, said he usually generated between
N5,000 to N6,000 daily.
Mr Yusuf said he was operating between Bode Thomas and Ojuelegba and used to
smile home every day before the ban reached the area.
"With the ban on Okada operations in Surulere, I switched to pushing
wheelbarrows and selling water.
"I now sell water in Surulere where I am residing, I also generate over
N1,200 daily through wheelbarrow pushing," Yusuf said.
Tunde Afolabi, who operated in Lagos Island between Marina and Adeniji area,
however, said it had been difficult for him after the ban.
Mr Afolabi pleaded with the government to help and provide them with
accessible alternatives to survive.
Emeka Chibuzor said he operates in Ikorodu where commercial motorcycles
still run, being outside the areas so far covered by the ban.
He, however, said that they faced challenges of extortion from police
officers who restricted their operations unlawfully.
Mr Chibuzor pleaded with the government to intervene and stop the unlawful
restrictions by the police, which were hindering their operations.
Kehinde Omotehinse, Coordinator, Lagos Community Youth Development
Initiative, Kosofe chapter, said while the ban was well-intentioned, it took
away the livelihood of many families.
"Government should provide an alternative. These people are Nigerians, they
deserve a living too", he said.
But the Lagos State government, in placing the ban, had urged the displaced
riders to take advantage of the numerous schemes it had in place to empower
residents.
The Commissioner for Information and Strategy, Gbenga Omotoso, said the
government was not leaving the riders stranded.
Mr Omotoso said the riders could approach the government as a cooperative
body to get the First and Last Mile buses.
The Commissioner for Transport, Frederic Oladeinde, while announcing the
second phase of the ban, said the government was responsive.
"As a responsive government, we are not leaving the affected passengers
stranded without any viable means of transportation, that is why we have
made available alternative and sustainable means of transportation.
"The alternative transportation includes the First and Last Mile Bus
Transport Scheme, the BRT Scheme, the Lagos e-hailing taxi Scheme (LAGRIDE)
and other acceptable modes of transportation, to go about their daily
activities".
The commissioner said the government's existing interventions aimed at
empowering the residents should equally be accessed as alternative means of
livelihood for the affected riders.
"These interventions are coordinated by the Ministry of Women Affairs and
Poverty Alleviation (WAPA) for vocational training; the Ministry of Wealth
Creation and Employment for internship programmes; Office of Civic
Engagement; Office of Sustainable Development Goals (SDGs).
"Also, the Lagos State Employment Trust Fund (LSETF) for Loan for Micro,
Small and Medium Enterprises (MSMEs) and Lagos Economic Acceleration
Programme (LEAP); the Ministry of Agriculture (Agric YES); the Ministry of
Education for CodeLagos Scheme, and many others."
The Special Adviser to the Lagos State Governor on Transportation, Sola
Giwa, said the government had been engaging in skills acquisition for
different kinds of artisans.
Mr Giwa said that after engaging them in the training, the government
usually gives them incentives to start their businesses.
"Government has been doing a lot with regard to incentives and providing
soft loans to artisans.
"Okada riders that are affected by the ban could enrol for training to
incorporate them in the First and Last Mile bus scheme of the state where
they can get trained and retrained.
"Government has provided lots of First and Last mile buses that can ply
routes across Lagos.
"People that are meant to ride the motorcycles should patronise First and
Last Mile buses designated to ply inner routes to make Lagos residents more
comfortable," Mr Giwa said.
The Lagos State Police Command, on its part, dismissed fears of a possible
negative ripple effect of the ban on the crime rate, due to the level of
unemployment.
The command's spokesperson, Benjamin Hundeyin, said rather than swelling
crime, the ban had reduced the incidence of traffic robbery in some parts of
the state.
"Although we still have pockets of traffic robbery in some areas, the ban
has reduced it drastically.
"It has helped us channel our energy to other areas, so it has been a
welcome development," he said.
On its possible effect on other crimes, he said there was nothing on the
ground to indicate an increase.
Meanwhile, some commuters want the government to do more to fill up the gaps
the ban has brought to transportation in some areas.
One of them, Ramota Adeyemi, a civil servant, said the ban had come with
some difficulties for residents.
According to her, the impact of the alternatives promised has yet to be felt
on many routes where Okada had been banned from plying.
"I suffer a lot coming and going to work every day. I live in Mushin and I
used to take Okada to get to my house from Mushin's last bus stop.
"Since the ban, I have been trekking. So have many," she said.
Some others, however, appealed to the state government to extend the ban to
more council areas.
A resident of Shomolu, Oseni Ajimomuiya, said the positive results of the
ban in the local government area should inform extension to other parts of
the state.
Mr Ajimomuiya, who is a media assistant to the Chairman of the local
government, said the ban was for the good of the people.
"The ban on Okada in certain areas is a step in the right direction. It is
pro-people as it is for the security and well-being of residents.
"Look at Shomolu for instance, the compliance here is 100 per cent and we
are already seeing the results.
"I was at the Federal Orthopaedic Hospital here in Fadeyi the other day and
the CMD told me that emergencies and Okada-related accidents have
drastically reduced.
"Traffic has been flowing better here since the ban. All these show that the
ban is for the people.
"The extension of the ban to other local government areas will be for the
good of more people", he had told NAN.
Mr Ajimomuiya, however, said the state government could support banned Okada
riders with more alternatives to take care of themselves and their families.
"Some routes are suffering, we must admit. Some of these Okada riders want
to switch to tricycles but they can't afford it. The government should
support them", he said.
Haruna Akinwale, a civil servant and resident of Maryland, said that the ban
had brought sanity to his area.
Mr Akinwale urged the state government to extend the ban to other local
government areas in view of the success recorded.
Edomi Ovie, a Lagos-based journalist, said the ban on operations of
commercial motorcycles had been justified as it had reduced crime in the
areas where it had been imposed.
He said the use of Okada was not ideal as a means of transportation in the
state, calling for its blanket ban in all local government areas.
Wasiu Adesina, Chairman, Ikorodu Local Government, commended the state
government for the ban in some local government areas.
He said the restriction was yielding the desired results in the affected
council areas.
He said the ban, so far, had not been extended to his local government.
He said the council was doing everything possible to properly monitor the
operations of commercial motorcyclists so that they do not pose threats to
the people of the area.
"People use motorcycles to perpetrate crime, so it is important that we
check such things in our community.
"Riders will be penalised for disobeying rules because we do not want our
local government area to be operating ground for those banned in other
areas", he said.
Mr Adeshina warned Okada riders not to flout the rules guiding their
operations in the community, vowing that erring riders would be made to face
the full wrath of the law.
Similarly, Monsuru Akinloye, Chairman, Eredo Local Council Development Area,
commended the state government for the restriction in some areas.
"The ban is commendable but the reasons for the ban are not present here in
Eredo in the Epe division.
"Eredo is a peaceful place.No real issues with Okada riders. Accidents are
not common, we are good here", he said.
He said the council would continue to do its best to ensure that issues did
not come up with Okada operations in the area.
(NAN)
- Premium Times.
Nigeria: Uzodinma Approves Free Medical Care for Imo Workers
"Health is wealth. We remain committed to improving the health and by
extension the productivity of civil servants in our state's workforce.
Governor Hope Uzodinma of Imo State has approved free medical care for
workers in the state's civil service as part of the state's Social Health
Insurance Scheme.
Mr Uzodinma gave the approval at a town hall meeting he held with top
management staff of the Imo Civil Service in Owerri on Tuesday.
The governor said the gesture was part of efforts to ensure that civil
servants in the state remained healthy and well-positioned to carry out
their duties.
He added that over 47,000 verified workers in the state would be part of the
scheme.
Mr Uzodinma, therefore, directed the state's Ministry of Health to get all
verified workers into the free medical scheme.
He also said that workers, at both state and local government levels, would
receive medical care from government-owned hospitals and designated private
hospitals.
"Health is wealth. We, therefore, remain committed to improving the health
and, by extension, the productivity of civil servants in our state's
workforce.
"I have been told it would cost N500 million to sustain this health
insurance but that notwithstanding, I remain committed to it," the governor
said.
The state's Head of Service, Raymond Ucheoma, commended the governor for the
kindness and untiring support to the welfare of workers.
He described the gesture as "a historic landmark" which he said would
reinvigorate workers to continue putting in their best.
Mr Uzodinma reassured workers who were due for promotion would all be
promoted to boost their morale.
He also said the shortfall in the number of teachers required by the Imo
State Education Management Board (SEMB) would soon be a thing of the past,
as the government had completed plans to engage more teachers.
The News Agency of Nigeria (NAN) reported that Heads of Ministries,
Departments and Agencies attended the meeting in the state, including
permanent secretaries, directors of ministries, the chairman of the Imo
Internal Revenue Service and the general manager, Imo Data Centre.
(NAN)
-Premium Times.
Nigeria: How We're Fighting Oil Theft, Vandalism - Kyari
NNPCL says at least 395 illegal refineries have been deactivated.
Although oil theft and vandalism persist across oil fields in the country,
the Nigerian National Petroleum Company Limited (NNPCL) has collaborated
with relevant security agencies to clamp down on saboteurs.
The NNPCL's Chief Executive Officer, Mele Kyari, disclosed this at the
Senate's joint committees on Petroleum (Upstream and Downstream) and Gas on
Tuesday.
While he noted that Nigeria is in a calamitous situation over oil theft, and
pipeline vandalism with attendant low production, he said at least 395
illegal refineries have been deactivated.
Mr Kyari also proposed capital punishment for offenders.
The NNPCL earlier disclosed that it loses 470,000 bpd of crude oil amounting
to $700 million monthly due to oil theft.
PREMIUM TIMES also reported how Nigeria, amid dwindling revenue, lost $10
billion to crude oil theft in seven months.
Mr Kyari's revelations come about two weeks after a group of lawyers
petitioned the Senate Ad-Hoc committee over alleged oil theft from the Ugo
Ocha export terminal at OML 42.
The OML 42, an oil field located in the swamps of the western Niger Delta,
is operated by NECONDE Energy Limited. The terminal has four flow stations
with a combined production capacity of around 30,000 barrels of oil per day
(bpd).
At the hearing which lasted over four hours, Mr Kyari said in the last six
weeks, 395 illegal refineries have been deactivated, 274 reservoirs
destroyed, 1,561 metal tanks destroyed, 49 trucks seized and a 4-kilometres
illegal oil connection line from Forcados Terminal into the sea - which had
been in operation undetected for nine years - detected.
The NNPCL, he explained, carried out aerial surveillance of the affected
areas and discovered "the economic saboteurs carrying out their activities
unchallenged and unperturbed.
"The problem at hand is not only security but social as locals in most areas
where the illegal refiners operate unknowingly serve as their employees by
mistaking them for operatives of licensed companies for oil exploration and
production in the area."
The NNPCL boss further informed the lawmakers that the Cambodia and Mexico
models of involvement of non-state actors are being adopted by the group by
involving three private security companies.
"It is not abnormal to involve non-state actors for protection of oil
pipelines and other critical infrastructure as done in Cambodia and Mexico
which produced desired results," he said.
A member of the committee, Bassey Akpan (PDP, Akwa Ibom North East), also
recommended that capital punishment be put in place for offenders.
The chairman of the panel, Sabo Nakudu (APC, Jigawa South West), informed
the NNPCL boss that oversight functions will be carried out in Port Harcourt
and Warri refineries which are said to have been rehabilitated.
-Premium Times.
Nigeria: House Investigates Reoccurring National Grid Collapse
The House of Representatives has mandated its Committee on power to conduct
investigation into the root causes of incessant national grid collapse in
the country.
The Committee was mandated as well to look into Transmission Company of
Nigeria's (TCN) capacity to address the ugly trend, in order to forestall
future occurrences and protect our already fragile socio-economic
environment.
The resolution of the lawmakers followed the adoption of a motion of urgent
national importance sponsored by Hon. Sani Bala at plenary yesterday.
Moving the motion, Bala said the House was aware that national grid
collapses occur when there are system disturbances along the transmission
lines connecting a number of generating stations.
He expressed concerns that since 2013, when the privatisation exercise took
place in the power sector, the country has witnessed over a hundred national
grid collapses, a challenge which experts and operators said would linger
for a long time if not addressed.
He further expressed concerns that this year alone, the national grid has
collapsed seven times (more than the three times recorded last year),
thereby, causing national power outages with enormous socio-economic
implications.
The lawmaker said, "Equally concerned that the latest in the series of power
failures has been adjudged among the worst the country has witnessed in
recent times, which in turn indicates that there is no framework or spinning
reserve meant to forestall such occurrences.
"Worried that it is incomprehensible that all the key power plants in the
country, including Egbin, Utorogu, Chevron Oredo, Oben gas-fired power
plants, Ughelli, and Chevron Escravos power plants could all shut down at
once.
"Also worried that the issue of system collapse may not be unconnected with
the TCN's lack of wheeling capacity, inadequate transmission lines and
spinning reserves as well as refusal to fast-track construction of digital
control centres instead of the company' current analog system.
"Notes that available statistics from research show that if the power
generated is adequately wheeled and transmitted for distribution to
consumers, there will be a 30 per cent reduction in the cost of generating
power thus leading to a corresponding reduction in the prices of utilities
in the electricity supply industry."
The Deputy Minority Leader, Hon. Toby Okechukwu, in his contribution, said
the essence of the investigation was to find out what the country can do to
cure the issue of power generation.
While lamenting that efforts on the matter had been all motion without
movement, he warned that unemployment problem cannot be solved if power
issue was not resolved.
"Most countries have solved this problem. It's not a good thing a country of
over 200 million can't generate up to 5000 megawatts. This investigation
should be taken seriously," he added.
Thereafter the motion was put to a voice vote by the Speaker, Gbajabiamila
who presided over the plenary session and it was passed.
Meanwhile at the plenary, Gbajabiamila set up an adhoc committee to
investigate the alleged gruesome killing of some individuals by officers of
the Nigeria Customs in Egbado South/Ipokia in Ogun state.
Last week, a member Hon. Kolawole Lawal had brought a notice to the House,
notifying the lawmakers that there was a resolution on the floor in February
2022, for the constitution of an ad-hoc committee to investigate the alleged
killings.
Announcing the 12-member Committee Gbajabiamila said it would be chaired by
Hon. Muktar Ahmed.
-This Day.
Nigeria: For Second Time in 45 Years, NNPCL Declares Profit, Rakes in N674bn
After Tax Revenues
For the second time in its 45-year history, the Nigerian National Petroleum
Company Limited (NNPCL) , formerly a corporation, yesterday declared a
Profit After Tax (PAT) financial position, announcing that it raked in N674
billion for the 2021 financial year.
The amount is 134.8 per cent or N387 billion higher than the N287 billion
announced by the company in 2020.
Group Chief Executive Officer, NNPCL, Mallam Mele Kyari, who made the
declaration in Abuja while making public excerpts of the group's audited
financial statement for the year ended December 31, 2021, stated that the
profit was driven by the company's activities in the upstream operations as
well as in gas and power.
He also announced that the shareholders' fund position grew to N2.81
trillion, an increase of 144 per cent, in a speech he titled: "Sustaining
Positive Momentum, Progressing to New Levels."
As the company seeks to become a 'dynamic global energy company' of choice
to its customers, partners, and its over 200 million shareholders comprising
all Nigerians, the GCEO noted that there will be no going back on the new
path that the NNPCL has set for itself.
"In 2019, we rolled out deliberate policies and initiatives aimed at
reducing costs and eliminating losses while adopting technology to entrench
Transparency, Accountability, and Performance Excellence (TAPE) across the
various functions that support our business operations.
"Since then, we began to see the transformational impact of these policies
and initiatives on NNPC's performance. We have recorded significant
improvement in our financial performance over the past three years, turning
up the curve, from losses to profits," Kyari stated.
He recalled that in September 2021, President Muhammadu Buhari approved the
publication of the 2020 NNPC Group Audited Financial Statement (AFS) in
which NNPC declared a profit after tax of 287 billion for the first time in
its 44 years.
Despite the challenging operating environment, Kyari stated that the NNPCL
believes that the company has the potential to sustainably deliver better
value to its shareholders.
"Today I am happy to announce that the board of the NNPC Limited has
approved 2021 audited financial statements, and NNPC has progressed to a new
performance level, from N287 billion profit in 2020 to a N674 billion profit
after tax in 2021, climbing higher by 134.8 per cent year-on-year profit
growth," he declared.
Kyari also announced that the group's financial position recorded an
increase in total assets from N15.86 trillion in 2020 to N16.27 trillion in
2021, while its total liabilities decreased by 8.3 per cent from N14.68
trillion in 2020 to N13.46 trillion in 2021.
"Our shareholders fund position grew to N2.81 trillion, representing 144 per
cent YoY ," he said?
The NNPCL helmsman opined that the performance of the company would have
been greater if the operations in the year under review were free from
incessant vandalism, crude oil and products theft ,among others.
Kyari stressed that the NNPCL looked forward to achieving greater
performance to support its growth aspirations and to create more value for
its shareholders as it drives full commercial operations under NNPC Limited.
"Our core business is upstream and gas and power. So the key drivers of this
performance is coming from the upstream and the gas and power and the
details are available," he said in response to a question on the units that
made the most returns.
On how the profit will be shared, going forward, Kyari noted that the
decision will be made by the shareholders and their representatives after a
meeting.
"You make profit and the dividend is always governed by dividend policies of
every company. The shareholders in this company is the country, the 200
million Nigerians represented by the Ministry of Petroleum incorporated and
the Ministry of Finance incorporated in the case of the NNPC limited, but
for the corporation, it is a different consideration.
"The federation now decides what to do with this. And currently as you might
be aware, you know there's a huge difference between the obligations of the
NNPC and that of the corporation, so we're sorting this out to be the
decision of the shareholders whether to return part of it or all of it. So I
cannot give you any number because that decision has not been made," he
posited.
The chief executive who lamented the incessant attacks on the NNPCL
infrastructure, said that production had been ramped up to around 1.2
million barrels per day.
He noted that the NNPCL has a proven capacity to meet its production targets
, explaining that production without any extraneous intervention had peaked
at 2.4 9 million barrels per day a few years ago.
"That means we have capacity without doing anything extra to produce up to
2.49 million barrels per day," he assured.
But with the coming of covid-19 and the issues around the acts of vandalism,
the GCEO said there had been a gradual decline in production up to the point
of 1.2 million barrels per day currently.
Kyari, who took questions on when the issue of sabotage of NNPCL pipelines
is expected to stop, explained that the 700, 000 barrels per day losses
weren't necessarily stolen , but that most was production foregone due to
vandalism of its assets.
"All our major trunk lines are shut down. That means you are not producing
the oil you could have done . It doesn't mean that all the products are
stolen. When the lines are running, you can lose substantial part of that
volume," he explained.
"We believe that at least when they (assets) are running you can lose up to
200,000 barrels to theft. But in actual losses, today our plan is to produce
at 1.8 million barrels per day. If you are doing 1.2 million barrels per
day, it means technically you are losing the difference between 1.2 million
barrels and 1.8 million barrels, which is around 600,000 barrels per day
opportunity loss, not stolen," he added.
According to him, the NNPCL is not saying that 600,000 barrels are lost
daily but that due to shutdown if facilities, the lines cannot produce oil.
"But I'm happy to also say that the interventions that were seen in terms of
the security measures that we have taken in collaboration with the
government security agencies, with the private contractors, surveillance and
security contractor we have put in place, we believe that in the next couple
of days we'll be able to bring back the Trans Niger Pipeline (TNP) and also
restore production back to the Forcados terminal.
"We are sure that we can see at least 400,000 barrels come in on the space
and as we continue to progress with the security intervention, we will be
able to bring back the other production facilities.
"We are doing alternative evacuation processes until we are able to secure
the lines and restore integrity to the lines because there are certain lines
that we will not bring back into production.
"So ultimately, our aim is to get back the production and then we can deal
with post production which is to expand production, which is our immediate
concern," he stressed.
Kyari stated that the challenge of oil theft was not out of control,
assuring that the security agencies were doing a great job of tackling the
problem.
-This Day.
Invest Wisely!
Bulls n Bears
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INVESTORS DIARY 2022
Company
Event
Venue
Date & Time
National Unity Day
December 22
Christmas Day
December 25
Boxing Day
December 26
Companies under Cautionary
CBZH
Meikles
Fidelity
TSL
FMHL
Turnall
GBH
ZBFH
GetBucks
Zeco
Lafarge
Zimre
<mailto:info at bulls.co.zw>
DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other Indices quoted herein are
for guideline purposes only and sourced from third parties.
(c) 2022 Web: <http://www.bullszimbabwe.com> www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674
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