Weak Demand for Nigerian Oil Leaves Tankers Idle
Weak demand for Nigerian crude oil has caused the number of ships without cargoes to rise to levels not seen in recent times.
As a result, the cost of sending crude oil cargoes from West Africa to Northwest Europe on Suezmaxes has dropped to the lowest level in over 14 years, according to Platts data.
The continued force majeure on three Nigerian crude oil grades – Forcados, Qua Iboe and Brass River – has substantially curbed demand for Suezmaxes in the region in recent months, and caused the WAF tonnage list to swell to levels rarely seen by veteran market participants.
Suezmaxes are medium to large-sized ships with a deadweight tonnage of between 120,000 and 200,000. They are the largest marine vessels that meet the restrictions of the Suez Canal, and are capable of transiting the canal in a laden condition.
According to one shipbroker’s position list, there were 32 ships available prior to the start of the current fixing window, versus a three-month average of 14.8 ships. There were also 29 ships that were free of cargo, which could make the WAF fixing window.
The number of ships means that each cargo that is shown to multiple owners attracts multiple offers and allows charterers to drive freight rates downwards.
The WAF-UK Continent route basis 130,000 mt was assessed five points lower at Worldscale 35 on Wednesday. This equates to $5.05/mt, which is the lowest since a $3.95/mt assessment on June 21, 2002.
This came after BP was heard to have placed the Ottoman Tenacity on subjects at w35 for an Angola-Rotterdam voyage on August 27.
Meanwhile, ExxonMobil is said to be working on a plan to export Qua Iboe crude oil, Nigeria’s largest export stream, via an alternate pipeline, while it repairs damage to the main export line sustained in July, sources told Reuters.
The crude oil grade has been under force majeure since mid-July, when the company said it detected a “system anomaly” on the subsea pipeline.
Sources were quoted to have said that the company later found substantial damage that would take at least one to two months to repair, spurring the decision to try to export via a second, smaller pipeline that also feeds the platform.
“We’re continuing to make progress, but we would not speculate on a timeline for repairs,” an Exxon spokesman said, without commenting on the plan to use an alternative pipeline.
The nation’s oil production has been affected by militant action since the beginning of the year, with the Nigerian National Petroleum Corporation saying pipeline attacks have taken out some 700,000 barrels per day from production that is typically just above two million bpd.
“Exxon is preparing the alternate export line,” one source said, adding that if it was successful, some exports could emerge within two weeks.
Two sources added that Exxon, and the Qua Iboe terminal itself, were not sharing details on the repair progress or export plans for fear of provoking militant attacks on oil infrastructure.
Naira Scarcity: Manufacturers Decry 25% Sales Decrease, Urge FG’s Urgent Intervention
Manufacturers Association of Nigeria, MAN has lamented the effect of naira scarcity on its members, saying that sales of manufactured goods dropped by 25 percent.
The association called on the federal government to urgently and permanently put an end to the challenging situation caused by the introduction of new naira notes and its scarcity.
This was contained in a statement signed by the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir expressing the plight of manufacturers.
The manufacturers noted that their businesses had been badly hit by the current cash crunch, adding that it affected the turnout of workers which brought about low output and more than 25 percent decrease in income.
Investors King learnt that the Manufacturers Association President, Otunba Francis Meshioye had last month warned against the impending negative effect of the naira scarcity on manufacturers.
He mentioned that the sales of manufactured goods will significantly drop which is presently playing out.
Speaking on digital banking services, the MAN president said online transactions including the use of point of service, POS has not been working effectively thereby making the sales process slow.
Meshioye stated that the nation’s economy has also been negatively impacted which may scare present and potential investors from investing in the country as they are particular about what their resources would yield.
“I want to assume that this is a very short-term problem. It is general. Even if you want to do e-banking, there are some things you cannot do at the moment. We have problems. PoS is not working.
“There is no way the scarcity of something that is essential to the consumer will not affect the producer. We feel it because it hinders the proper flow of our goods to the end user. What effect is that going to have? It means we will pile stock and when we pile stock, it means cash is trapped. We pay high interest rates and they would not yield good returns and investments go to where returns come regularly.
“This is a very big issue in the economy. If you put all these together, you will agree with me that we are really facing a critical time as manufacturers,” he stated.
Merger and Acquisition
HSBC Purchases Silicon Valley Bank U.K Subsidiary, Protects Customer’s Deposits
British multinational universal bank and financial services holding company HSBC Holdings plc has acquired Silicon Valley Bank U.K subsidiary for £1 ($1.21).
HSBC disclosed that the acquisition will help strengthen its franchise in the U.K, noting that all depositors’ money with SVBUK is safe and secure and that all operations will continue as normal.
The company said in a statement, “This action has been taken to stabilize Silicon Valley Bank UK, ensuring the continuity of banking services, minimizing disruption to the UK technology sector, and supporting confidence in the financial system.
“The bank and HM treasury can confirm that all depositor’s money with SVB UK is safe and secure as a result of this transaction. SVB UK’s business will continue to be operated normally by SVB UK. All services will continue to operate as normal, and customers should not notice any changes”.
HSBC’s acquisition of Silicon Valley Bank British arm is coming after a host of potential buyers had submitted proposals to purchase the bank since the failure of its U.S. parent company, amid widespread concern over the immediate future of many British technology and life sciences startups.
Bank of London CEO Anthony Watson disclosed that Silicon Valley Bank cannot be allowed to fail, given the vital role it plays in the community. He added, “this is a unique opportunity to ensure the U.K has a more diversified banking sector, whilst allowing continuity of service to SVB’s U.K client base. It would be deeply disappointing for this moment to lead to further consolidation of power among big banks”.
The acquisition of SVB U.K. subsidiary comes after the bank which specialized in lending funds to technology startups, witnessed a financial implosion on Friday last week, making it the largest U.S. bank failure since the global financial crisis more than a decade ago, Investors King understands.
Silicon Valley Bank’s financial implosion began late Wednesday when it informed investors with the unpleasant news that it needed to raise $2.25 billion to shore up its balance sheet. This spurred customers to withdraw a staggering $42 billion of deposits by the end of Thursday, leading to the collapse of the bank.
Analysts predict that the slump of Silicon Valley Bank could be far-reaching which would see Startups faced with several challenges such as paying employees’ salaries, venture investors struggling to raise funds, massive cost cuts, etc.
Merger and Acquisition
Andela Procures Tech Platform Qualified, Set to Accelerate Its Ability to Source For Tech Talent
A startup that trains developers in Africa and hires them out to global tech companies Andela, has recently acquired a tech skills assessment platform Qualified to accelerate its ability to source and assess talent.
The acquisition of qualified will see Andela’s global tech community expand with the addition of more than 3.5 million engineers via Codewars, an online educational community for computer programming powered by Qualified.
Speaking on the recent acquisition of Qualified, Co-founder of Andela Jeremy Johnson said,
“This acquisition will help Andela expand and accelerates its ability to source and expertly assess talent. Labor marketplaces are constrained by inefficiencies between supply, demand, and quality. Qualified allows us to address those inefficiencies by providing the certified right talent at the right time. Companies will continue to trust that talent sourced through Andela has the needed skills regardless of where they live and work.”
Also speaking on its collaboration with Andela, the Co-founder, and CEO of Qualified Jake Hoffner said, “The tech industry has historically relied on hiring practices that have proven to be ineffective. The expanded platform will allow companies to create hiring processes for software engineers that are predictive of their on-the-job performance. In addition, we provide companies and our growing tech community a bigger, broader, and better opportunity to connect globally.”
Founded nearly a decade ago on the premise that brilliance is evenly distributed but opportunity is not, Andela’s recent acquisition of Qualified, has considerably accelerated the road ahead to ensure that the right tech talents are connected to the right opportunities.
With the biggest challenge hiring managers face in determining how can they know a new hire will succeed, Qualified, as the top technical assessment platform, will accelerate Andela’s ability to solve this problem and thereby raise the probability of success for a new hire by certifying their skills before the engagement begins.
It is interesting to note that Qualified is a leader in this space, enterprise companies like Meta, Zoom, and Dominos already trust them to assess their internal talent.
Investors King understands that Andela is keenly aware of the role AI will play with its recent acquisition, and it believes that the capabilities of Qualified would move it towards a more predictive matching process on its platform.
Andela’s procurement of Qualified will now not only provides access to global talent but raise and standardize the bar at which those engineers are certified. It is interesting to note that in 2017, Qualified and Andela first joined forces to build up Africa’s tech ecosystem. Using Qualified’s developer assessments, Andela successfully assessed over 19k developers.
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