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Bristow Records Over 50% Drop in Operations

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  • Bristow Records Over 50% Drop in Operations

Leading helicopter service provider in the oil and gas sector, Bristow Helicopters Nigeria Limited, has hinted on over 50 per cent drop in operations due to the current economic downturn.

The development, though not unique to Bristow, has, however, warranted some drastic measures including the release of some workers and withdrawal of some aircraft from the Nigerian market.

Meanwhile, Bristow has acquired four brand new Sikorsky76D helicopters as part of its diversification and commitment to the Nigerian market.

Recall that the global oil and gas market has been in decline since the second half of 2014, with enormous effects on activities in the Nigerian oil and gas market. Helicopter operators, like Bristow, have been affected.

With reduced activities in the oil and gas sector, Bristow, like its competitors, has had to reduce its staff strength. In 2015, Bristow released 89 expatriate engineers and pilots, coupled with 26 support staff. As activity levels further dropped in 2016, the company released 29 expatriate engineers and pilots and 16 support staffs, coupled with 21 national pilots and engineers.

Managing Director of Bristow Helicopters in Nigeria, Capt. Akin Oni, told reporters that the lay-off was not unconnected with 50 per cent cut in fleet size, compared to what it operated in 2014/15.

Oni said: “In terms of flight activities, we are now about 45 per cent of what it was in 2014/15. That is the level of impact on us.”

He added that they had in the last one year shipped 13 aircraft out of Nigeria to other countries where their services are more required, given the impact of recession on helicopter services.

“Whilst the release of a staff is never an easy decision, the release of any national pilot or engineer is even more difficult. Most of our national engineers and pilots were recruited as cadets and received funding from the company for training.

“We very much view these national pilots and engineers as long term employees and future leaders of the company. It is, therefore, always a difficult decision to release our national staff,” he said.

On average, Bristow spends about $250,000 (cadet pilots) and $80,000 (cadet engineers) per annum on training its cadets until qualification as pilots or engineers.

The downturn in the sector and reduced activities notwithstanding, Oni said Bristow remains committed to operations in Nigeria, tapping into the bright side of fixed wing operations.

His words: “We have been operating in our present form since 1969 and intend to continue to operate in Nigeria. Our focus remains on providing a safe and efficient service throughout Nigeria.

“We are committed to developing new opportunities to serve the Nigerian market. Last year, we introduced a fixed wing business charter service operating the Lagos – Port Harcourt route for the benefit of our clients and other business corporations. This service is operated by two Embraer 135 aircraft.

“Last week, we expanded the service to include a Lagos–Abuja route, currently operating three days a week, as demanded by our clients. This service is an example of how we are able to diversify and provide a service outside our core oil and gas sector.”

In the oil and gas sector, Bristow has also introduced a search and rescue service, the first of its kind in Nigeria.

The MD explained that the service would be provided by a Leonardo AW139 with capabilities for both day and night rescue operations. The search and rescue service lends from the expertise and experience held by an affiliate UK company, Bristow Helicopters Limited, which provides a similar service to the United Kingdom.

Senior Legal Director at Bristow, Tolu Olubajo, noted that effective from April 1, 2016, parity in remuneration was established between their national and expatriate aircraft type-licensed pilots and aircraft maintenance engineers. This was sequel to an agreement reached with the National Association of Aircraft Pilots and Engineers (NAAPE) on the remuneration of their members.

Olubajo said that Bristow would continue to engage with NAAPE on compensation payable to the released national engineers and pilots, and remain open to an amicable dialogue to reach agreement on the matter.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Gold

Gold Steadies After Initial Gains on Reports of Israel’s Strikes in Iran

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Gold, often viewed as a haven during times of geopolitical uncertainty, exhibited a characteristic surge in response to reports of Israel’s alleged strikes in Iran, only to stabilize later as tensions simmered.

The yellow metal’s initial rally came on the heels of escalating tensions in the Middle East, with concerns mounting over a potential wider conflict.

Spot gold soared as much as 1.6% in early trading as news circulated regarding Israel’s purported strikes on targets in Iran.

This surge, reaching a high of $2,400 a ton, reflected the nervousness pervading global markets amidst the saber-rattling between the two nations.

However, as the day progressed, media reports from both countries appeared to downplay the impact and severity of the alleged strikes, contributing to a moderation in gold’s gains.

Analysts noted that while the initial spike was fueled by fears of heightened conflict, subsequent assessments suggesting a less severe outcome helped calm investor nerves, leading to a stabilization in gold prices.

Traders had been bracing for a potential Israeli response following Iran’s missile and drone attack over the weekend, raising concerns about a retaliatory spiral between the two adversaries.

Reports of an explosion in Iran’s central city of Isfahan further added to the atmosphere of uncertainty, prompting flight suspensions and exacerbating market jitters.

In addition to geopolitical tensions, gold’s rally in recent months has been underpinned by other factors, including expectations of US interest rate cuts, sustained central bank buying, and robust consumer demand, particularly in China.

Despite the initial surge followed by stabilization, gold remains sensitive to developments in the Middle East and broader geopolitical dynamics.

Investors continue to monitor the situation closely for any signs of escalation or de-escalation, recognizing gold’s role as a traditional safe haven in times of uncertainty.

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Commodities

Global Cocoa Prices Surge to Record Levels, Processing Remains Steady

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Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

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Crude Oil

Dangote Refinery Leverages Cheaper US Oil Imports to Boost Production

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The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

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