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Oil Firms Count Losses as Militants Worsen Woes

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Chevron

Chevron and Eni, two of the global oil majors operating in Nigeria, and their local counterparts such as Seplat and Oando may have been worst hit by the production disruptions occasioned by militant attacks in the Niger Delta, their financial results have shown.

Chevron Corporation, the second largest United States-based oil producer, lost $1.47bn in the second quarter of this year, its largest since 2001, compared with a net profit of $571m in the same period of 2015.

The company said last Friday that its worldwide net oil-equivalent production was 2.53 million barrels per day in the second quarter of 2016, compared with 2.60 million barrels per day a year ago.

It said, “Production increases from project ramp-ups in the United States, Angola, Canada and other areas were more than offset by normal field declines, the effect of asset sales, the Partitioned Zone shut-in, maintenance-related downtime, and the effects of civil unrest in Nigeria.”

Italian oil major, Eni, posted a net loss of €446m in the second quarter of 2016, as against a net profit of €498m in the same period of 2015.

Its oil and gas production fell by 2.2 per cent to 1.715 million barrels of oil equivalent per day, with liquids down by 5.6 per cent at 852,000 bpd.

The Chief Executive Officer, Eni, Claudio Descalzi, said the loss of Nigerian production over the period was 13,000 boepd, adding, “Hydrocarbon production beat expectations, offsetting the suspension of activity in Val d’Agri and the disruptions in Nigeria.”

Two other international oil companies in Nigeria, ExxonMobil Corporation and Royal Dutch Shell Plc, last week reported their lowest quarterly profits since 1999 and 2005, respectively.

Shell, which announced a 72 per cent drop in second-quarter earnings, said its liquids production available for sale in Nigeria plunged by 41 per cent in the second quarter of this year to 37,000 bpd.

Seplat Petroleum Development Company Plc, a major indigenous independent oil and gas company, recorded a net loss of $61m in the first half of the year, for the first time in its six years of operation.

The company said its average working interest production during the first six months was 25,695 boepd, compared to 32,580 boepd in 2015.

It said the reported production figures reflected the longer-than-expected suspension of oil production following the declaration of force majeure at the Forcados terminal by the operator, Shell Nigeria, on February 21 after the disruption in production and exports caused by a spill on the terminal subsea crude export pipeline.

The Chief Executive Officer, Seplat, Mr. Austin Avuru, said the first half results were heavily impacted by events outside of the company’s control.

He said, “The shut-in and suspension of oil exports at the Forcados terminal since mid-February mean we have faced significant challenges in the first half of the year. However, our underlying fundamentals remain strong and we continue to invest to grow our gas business at a rapid rate.”

Oando Plc announced on Tuesday that it made a loss-after-tax of N27bn in the first half of this year, compared to the N35bn lost a year ago.

The company said its daily production volumes dropped to about 45,000 boepd in the first half of this year from about 56,000 boepd in the same period of 2015 as a result of the operating challenges in the Niger Delta.

The Group Chief Executive, Oando, Mr. Wale Tinubu, said, “The first half of the year has attested to the deplorable state of security in the oil and gas environment in Nigeria, having experienced a 25 per cent decline in production volumes arising from the increased disruptions from militant activities.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Tunde Hassan-Odukale is FBN Holdings Largest Shareholder, Not Femi Otedola, FBN Holdings Clarifies

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Tunde Hassan Odukale - Investors King

In response to the questions asked by the Nigerian Exchange Limited (NGX), FBN Holdings has said Mr. Tunde Hassan-Odukale, a Director of First Bank of Nigeria Limited is FBN Holdings Plc’s largest shareholder and not billionaire Femi Otedola.

In a statement signed by Seye Kosoko, Company Secretary, FBN Holdings Plc and released via the Nigerian Exchange Limited on Wednesday, Mr. Tunde Hassan-Odukale directly holds 26,231,887 shares or 0.07 percent.

However, his indirect holdings stood at 1,897,280,212 shares or 5.29 percent of FBN Holdings’ total issued shares.

Breaking down Mr. Tunde Hassan-Odukale indirect holdings, the director holds 755,959,459 or 2.11 percent shares through Leadway Assurance Company Ltd.

Another 486,605,478 shares or 1.36 percent via ZPC/Leadway Assurance Prem & Inv Coll Acct. He acquired 0.04 percent or 13,229,148 shares through Haskal Holdings Ltd. Mr. Hassan-Odukale also purchased 1,004,528 shares through Leadway Capital & Trust Ltd.

He then bought 112,552 shares through LAC Investments Ltd; 112,237 through Leadway Properties & Investment Ltd; 211,290,798 or 0.59 percent via Leadway Holdings (Holdco); 53,771,413 or 0.15 percent through OHO Investment and finally acquired 375,194,599 or 1.05 percent through Leadway Pensure PFA.

Therefore, Mr. Tunde Hassan-Odukale direct and indirect holdings in FBN Holdings Plc stood at 26,231,887 or 0.07 percent and 1,897,280,212 or 5.29 percent, respectively. In totality (Direct and Indirect), he holds 1,923,512,099 or 5.36 percent shares in FBN Holdings.

This is more than the 10,000,000 or 0.03 percent shares directly owned by Mr. Olufemi Peter Otedola and another 1,808,551,625 or 5.04 percent he acquired via Calvados Global Services Limited. Mr. Otedola total stake’s in FBN Holdings now stood at 1,818,551,625 or 5.07 percent. Making him the second-largest shareholder in the company.

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Tesla’s Valuation Crosses $1 Trillion Mark After Hertz Orders 100,000 Vehicles

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Tesla Model 3 - Investors King

Price of Tesla stock rose by $115.18 or 12.66 percent on Monday after Hertz, an American car rental company based in Estero, Florida, ordered 100,000 Tesla electric vehicles in a deal worth $4.2 billion.

Four months after surviving bankruptcy, Hertz Global Holdings Inc. is strategically moving away from fuel cars to electrify its rental-car fleet.

According to Hertz, customers will be able to order Tesla Model 3 at airports and other locations in major U.S. markets and some cities in Europe starting from early November.

The announcement bolstered Tesla’s market value above $1.03 trillion before it moderated to $1.01 trillion at the close of business on Monday.

Tesla’s valuation has risen at an unusual pace since the COVID-19 outbreak. The company’s valuation jumped from $100 billion to $1 trillion in less than two years, according to data available on Dow Jones. It took Amazon, Apple and others more years to attain the same status. To put it in perspective, it took Amazon more than eight years to move from a $100 billion valuation company to $1 trillion.

Despite analysts saying Tesla is extremely overvalued and a series of price adjustments post-COVID-19 are predicted, Tesla Inc and Elon Musk, the company’s CEO and Co-founder, seem not to be slowing down.

Musk’s Tesla holdings, including vested and unvested options, were valued at around $297 billion as of Monday, October 25, 2021, according to corporate-governance data company Equilar Inc. Elon Musk’s holdings in Tesla is more than the valuation of Toyota Motor Corp., the second-largest automaker by market capitalization.

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Merger and Acquisition

Access Bank and African Banking Corporation Zambia Limited Merge to Deepen Presence in Zambia

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Access bank

Access Bank Plc on Monday announced it has signed a binding agreement with Atlas Mara Limited on a proposed merger between Access Bank’s subsidiary in Zambia, Access bank Zambia Limited and African Banking Corporation (Atlas Mara Zambia).

Upon completion of this prospective transaction, the Bank is expected to retain or increase its current shareholding in Access Bank Zambia, which following the merger will have over 70 branches and agencies, approximately US$1 billion in total assets and over 300,000 customers in Zambia.

The transaction will not require significant additional capital investment requirements from the Bank given the capital and other synergies created from the merger between Access Bank Zambia with Cavmont Bank in 2020. The proposed transaction is expected to be concluded in 2022, subject to fulfillment of conditions precedent including regulatory approvals in Nigeria and Zambia.

Commenting on the transaction, Dr. Herbert Wigwe, GMD/CEO of the Bank said, “This transaction represents another milestone that brings us closer to the achievement of our broader strategic objectives. The merger of Atlas Mara Zambia with Access bank Zambia is expected to augment our presence in Zambia and the broader COMESA region, Africa’s largest free trade area.

“We are particularly excited by the prospects of increased earnings contribution to the Bank from the enlarged Access Bank Zambia, which has also announced the appointment of a new Managing Director, Mr. Lishala Situmbeko, who brings over 25 years of cognate experience and deep local relationships into our Zambian operation.

“Today’s announcement is a testament to the strong confidence of the Zambian market in the Bank’s country and regional strategy as well as our strong confidence in the long-term prospects for the Zambian economy.”

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