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No Lifting From Lagos Oil Field in Q2 – Report

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  • No Lifting From Lagos Oil Field in Q2 – Report

One of the joint venture partners in Aje field, offshore Lagos, said there was no oil lifting from the field in the second quarter of this year.

Panoro Energy said in its half year and second quarter reports 2017 that its oil and gas revenue in the period was zero, compared to the $1.3m it generated in the first quarter from the sale of its net entitlement of 26,210 barrels.

It said costs attributed to operations were $0.2m at Aje for the second quarter compared to the company’s estimated costs of $2.5m in the previous quarter.

Panoro, which has been in disagreement with its joint venture partners since late last year, said it “is in discussion with potential buyers for the sale of all or a portion of its interest in the OML 113.”

It, however, said there could be no assurances that any transaction contemplated under the discussion would be consummated.

“Panoro will bring the case to arbitration should no commercial solution be forthcoming. The arbitration is scheduled for the first quarter of 2018.”

The company noted that it had been excluded from some Aje JV information due to the ongoing legal dispute.

It said, “Following the re-entry of the Aje-5 well during Q1 2017 during which two side-tracks were drilled, we understand that the Aje-5 well was put back on stream. Production from the Aje field has continued from the Aje-4 and Aje-5 wells. A lifting of Aje crude was completed in early July, 2017.

“We also understand that material opex reductions are being implemented. Meanwhile, the JV continues to work on and refine detailed plans for the Turonian gas project, which aims to commercialise the approximately 163 Mmboe Turonian gas resources.”

Panoro noted that its subsidiary, Pan Petroleum, had been granted an order by the Federal High Court of Nigeria, restraining the non-defaulting joint venture partners from exercising any purported rights under the default provisions of the Joint Operating Agreement.

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 partners, who are not themselves in default and who 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.

It said, “Pan Petroleum’s current view is that any withdrawal notice would constitute a penalty under the laws of Nigeria and be unenforceable as a matter of public policy.

“Should Pan Petroleum in the 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 that the notice is withdrawn or the withdrawal is held to be unenforceable.”

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.

Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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Economy

CBN Predicts 2 Percent Growth for Nigeria in 2021

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Despite the economic recession and numerous uncertainties encompassing Nigeria in recent months, the Central Bank of Nigeria (CBN) has said the nation will grow by 2 percent in 2021.

Speaking at the 2020 bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN), Godwin Emefiele, the Governor, CBN, said implemented government intervention programmes will aid the nation’s recovery by next year.

Emefiele further stated that the intervention efforts represent around 3.5 percent of Nigeria’s current Gross Domestic Product (GDP).

He said, “Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.”

On fast declining foreign reserves, the Governor said the institution has adopted a demand management framework designed to boost the production of items that can be produced locally and aid conservation of external reserves.

Due to the unprecedented nature of the shock, we continued to favour a gradual liberalisation of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which rapid changes in the exchange rate could have on key macro-economic variables,” Emefiele stated.

The CBN projection came few weeks after the National Bureau of Statistics (NBS)’s report showed Africa’s largest economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria officially slid into the worse economic recession in almost 30 years and the second economic recession under the current administration.

While, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has projected that Nigeria would rebound from the recession in this final quarter or the very first quarter of 2021, falling revenue generation, rising capital flight amid weak demand due to the negative impact of coronavirus on earnings, household incomes and lack of jobs remain a concern.

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Economy

COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday

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Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.

Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.

The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.

OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.

This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.

Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.

The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.

President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.

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