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Experts Warn against Sale of Aero, Arik to Foreign Airlines

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Arik Airplane - Investors King
  • Experts Warn against Sale of Aero, Arik to Foreign Airlines

Aviation industry experts have cautioned against alleged plan by the federal government through Asset Management Corporation of Nigeria (AMCON) to sell Aero Contractors and Arik Air to foreign airlines.

Informed sources at the Ministry of Transportation had hinted that the government approached Ethiopia Airlines and Turkish Airlines to buy Arik but they declined. Also last week the Minister of Finance, Mrs. Kemi Adeosun confirmed that investors were making enquiries about acquiring the two airlines.

But industry experts have expressed worries about the news of the plan takeover of these airlines by foreign concerns, querying if how this would benefit Nigeria and make the airlines operate profitable.

They argued that if foreign airlines acquire and absorb these airlines, Nigeria would lose because the workers would be relieved of their jobs and the airlines may even seize to exist as Nigerian operators.

Secretary of Aviation Round Table (ART), Group Captain John Ojikutu has criticised the move, saying that the decision to sell the airlines to European carriers is ill-advised.

“The news going round is that there are some moves by AMCON to liquidate Arik airline and sell it to the Ethiopian airline. Sure AMCON has no good knowledge on how many things work in aviation, but must be getting some blind advice from some Nigerian interested parties. I am not against the selling of Arik or Aero to technical investors, what I, like any other Nigerian, should fight for is selling a reasonable percentage of the airlines assets to the public. Secondly, those who are contemplating the sales or cooperation with Ethiopian airline should go into history of such cooperation in the past between Nigeria Airways and KLM or the Nigeria Airways and South African Airways in the 90s and the one for establishing Virgin Nigeria between the government and Virgin Atlantic.

“In the event that the liquidation and sale of these airlines to Ethiopia Airlines or European carriers is true, what would be the statutes of the airline if Nigerians are not participants? Would Ethiopian Airlines and Asky still retain their multiple destinations to all the five Nigerian airports if the airline is designated as the national carrier or flag carrier? We must find favourable answers to these questions or else AMCON and its advisers would blindfully sell our birth rights to a commercial competitor in the industry,” Ojikutu said.

Travel expert, Ikechi Uko said if selling the airlines would make them viable that would be good for Nigeria, but there is no certainty that after the sale the airlines would be allowed to operate as they are but if that would be the case because “if Turkish Airlines acquire the airline, it cannot bring Turkish people to run it; it will allow Nigerians to run the airline.”

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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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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