- N8.94bn debt: Contractor Suspends Work on Lagos-Ibadan Expressway
The contractor handling the reconstruction and expansion works on the Lagos-Ibadan dual carriageway, Section II, along Shagamu-Ibadan, with Contract No. 6205, has suspended further execution of the project due to a total outstanding debt of N8.94bn.
Reynolds Construction Company Nigeria Limited, in a letter addressed to the Minister of Power, Works and Housing, Mr. Babatunde Fashola, and dated June 2, 2017, called the attention of the minister to the worsening financial situation of the project and pleaded for his intervention in order to ease the continuation of work on the site.
The letter which was received and acknowledged by the office of the minister on June 5, 2017, and made available to our correspondent in Abuja on Friday, revealed that as of when it was sent, the outstanding debt on approved certificates for certified works on the project was N7.83bn.
Reynolds told the minister that the 28-day window allowed for the payment of the certificates as contained in the conditions of the contract between parties had “long expired.”
The firm said, “In addition, there is another Certificate (No.19) of N1,108 334, 258 under processing. Thus, making a total of N8, 937,611,552. The mounting debt profile on this project is worrisome.”
The letter, which was signed by the firm’s Managing Director, who simply gave his name as M. Nakhla, stated that RCC was committed to the successful completion of the project, but maintained that funding was a challenge.
It said, “In view of the dire situation, we shall be constrained to suspend further execution of work unless there is an appreciable improvement in the project’s cash flow and adequate funding arrangement is put in place for further works. This painful decision is bound to delay the scheduled completion of the project, in addition to the inherent cost implication.
“This letter is, therefore, a notice of our intention to suspend further execution of the project, pursuant to Clause 68(8) of the Conditions of Contract. In that unfortunate event, we shall require payment of the outstanding debt as well as full coverage of our attendant expenses and losses before the resumption of work. A corresponding extension of time shall also become imperative, pursuant to Clause 44 of the CC.”
The letter was also copied to Motorways Asset Limited.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting
Oil Prices Rise to $64.32 Amid Expected Output Extension
Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.
Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.
“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.
Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.
“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.
Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.
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