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Lagos Oilfield Dispute Worsens, Another Investor Heads for Court

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  • Lagos Oilfield Dispute Worsens, Another Investor Heads for Court

The dispute among joint venture partners in Aje oil field, offshore Lagos, appears to have escalated as another partner, EER (Colobus) Nigeria Limited, has gone to court.

One of the partners, Panoro Energy, announced in December that it was in disagreement with its JV partners over cash call and intended to initiate arbitration and legal proceedings to protect its interests.

The company holds 6.502 per cent participation interest in Oil Mining Lease 113, where the Aje field is located, through its subsidiary, Pan Petroleum Aje Limited.

The commercial court division of the High Court in London granted the PPAL an interim injunction, restricting the JV partners from taking any action under the default provisions of the Joint Operating Agreement that would prevent the PPAL’s continued participation in the JOA and OML 113.

Panoro Energy said in a new update that the EER (Colobus) Nigeria applied for and, on July 13, 2017, was granted an order by the Federal High Court of Nigeria, adding that the court set the time to hear the motion on notice as July 24, 2017.

It said, “It is Panoro’s understanding that the EER, like Pan Petroleum, is in default of certain of its cash calls under the JOA and, therefore, the court’s order restrains any of the non-defaulting joint venture partners from issuing a notice under the JOA requiring the EER and, perhaps Pan Petroleum, to withdraw from and transfer all its interests and rights in the OML 113 and the JOA to all the non-defaulting parties.”

According to the company, under the JOA, the potential consequence of a JV partner not making payment of its share of a cash call on or before the expiry of the 45-day grace period is that two or more of the other JV partners, who are not themselves in default and represent a majority of the interests not in default, have the option to require the defaulting party to withdraw from the OML 113 and the JOA by issuing a notice of withdrawal.

“However, any such action may currently be prevented by the Nigerian injunction referred to above,” Panoro said.

It said, “Should Pan Petroleum in future be issued with a withdrawal notice, it will vigorously dispute its forced withdrawal from the OML 113 and the JOA, and will explore all legal and diplomatic avenues to ensure the notice is withdrawn or the withdrawal is held to be unenforceable.

“Although Panoro has sufficient funds available, Pan Petroleum has at this time not paid its share of certain cash calls under the JOA. The 45-day grace period permitted under the JOA has now expired and Pan Petroleum continues to be in payment default. Pan Petroleum’s share of these unpaid cash calls currently stands at approximately $6.8m net of crude entitlements.”

Pan Petroleum said many of the cash calls that had been made were made in a manner inconsistent and prohibited by the JOA procedures, adding that an external audit of the JV’s procedures and accounting had been commissioned.

The company said its arbitration proceeding was ongoing, and the arbitral tribunal had recently pushed the timetable for the hearing out, now likely to be heard during the first quarter of 2018.

Yinka Folawiyo Petroleum Company Limited, a wholly owned indigenous firm, is the operator of the OML 113. Other partners are New Age Exploration Nigeria Limited and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field).

First oil was achieved on the Aje field in May last year, 20 years after it was discovered.

A London-based energy firm, MX Oil, which has an indirect investment in the OML 113, said on May 24 that production from the Aje-4 well field had stabilised after an initial period of decline associated with rising water cut.

It said the production from the Aje-5 well had been limited and required subsurface intervention, adding that the intervention was in the process of being completed and would include re-connection to the subsea tree.

“To date, the company has completed its share of the payments required to get to this stage of the project’s development,” MX Oil said.

The company said it was previously anticipated that a further well, Aje 6, would be drilled in the short term to increase oil production from the field, but the drilling of the well would be deferred until the partners had concluded on the most appropriate next steps.

It said, “As has previously been announced, the Aje field is believed to hold significant resources of gas. The partnership has been progressing the field development plan for the development of the gas and has also held discussions with various potential gas off-takers.

“The partners in the Aje Field are therefore currently considering whether it would be more appropriate for the next stage of the field development to focus on gas production rather than drilling additional oil wells.

The Chief Executive Officer, MX Oil, Stefan Oliver, said given the potential scale of the gas opportunity versus the risk and reward of drilling additional oil wells, it made sense for the partners to consider and reflect on what the next stage of the development should be.

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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Global Markets Near Record Peaks and Will Get Stronger: deVere CEO

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As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.

Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.

“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.

“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.

“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.

“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”

However, the CEO’s bullish comments also come with a warning.

“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.

“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”

Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”

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Refinitiv Expands Economic Data Coverage Across Africa

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Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.

Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.

Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.

Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades.  As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”

Refinitiv Africa economic data coverage:

  • Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
  • Content is sourced from national statistical offices, central banks and other key national institutions
  • The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
  • International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent

Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.

 Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.

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Oil Rises on Drawdown in U.S. Oil Stocks, OPEC Demand Outlook

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Oil prices rose in early trade on Wednesday, adding to overnight gains, after industry data showed U.S. oil inventories declined more than expected and OPEC raised its outlook for oil demand.

Brent crude futures rose 28 cents, or 0.4%, to $63.95 a barrel at 0057 GMT, after climbing 39 cents on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures similarly climbed 28 cents, or 0.5%, to $60.46 a barrel, adding to Tuesday’s rise of 48 cents.

Oil price gains over the past week have been underpinned by signs of a strong economic recovery in China and the United States, but have been capped by concerns over stalled vaccine rollouts worldwide and soaring COVID-19 infections in India and Brazil.

Nevertheless, the Organization of the Petroleum Exporting Countries (OPEC) tweaked up its forecast on Tuesday for world oil demand growth this year, now expecting demand to rise by 5.95 million barrels per day (bpd) in 2021, up by 70,000 bpd from its forecast last month. It is banking on the pandemic to subside and travel curbs to be eased.

“It was a welcome prognosis by the market, which had been fretting about the impact the ongoing pandemic was having on demand,” ANZ Research analysts said in a note.

Further supporting the market on Wednesday, sources said data from the American Petroleum Institute showed crude stocks fell by 3.6 million barrels in the week ended April 9, compared with estimates for a decline of about 2.9 million barrels from analysts polled by Reuters.

Traders are waiting to see if official inventory data from the U.S. Energy Information Administration (EIA) on Wednesday matches that view.

Market gains are being capped on concerns about increased oil production in the United States and rising supply from Iran at a time when OPEC and its allies, together called OPEC+, are set to bring on more supply from May.

“They may have to contend with rising U.S. supply,” ANZ analysts said.

EIA said this week oil output from seven major shale formations is expected to rise by 13,000 bpd in May to 7.61 million bpd.

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