- 16 Firms Pull Out of Onne FTZ Over INTELS, OGFZA Saga
No fewer than 16 companies operating in the Onne Free Trade Zone, have indicated plans to pull out of the zone, alleging poor government policies.
Some of companies, The Guardian learnt have officially notified the operator of the zone of their planned exit and begun arrangements on the process of withdrawal.
Among the 16 companies are Prodeco International Limited, West Africa Machinery Services (WAMS), MGM Logistics Solutions Limited and Orlean Invest Limited among others.
This action, according to stakeholders may not be unconnected with the present attack on INTELS Nigeria Limited (INL) by government agencies, including the Oil and Gas Free Zones Authority (OGFZA).
The companies were part of the six companies given up to Thursday, November 30, 2017 to leave Nigeria, or be deported on the orders of the Minister of Interior.
Commenting on this development, an oil and gas industry expert, Austin Obieze accused OGFZA of damaging the concept of free trade zones in the country with what he termed “rogue behaviour” towards free zone operators in the country.
Obieze said the recent attack by OGFZA against a leading free trade zone operator, INTELS has sent the wrong signal and created panic among businesses operating in the zones.
“It was a very bad move by OGFZA, which was set up to promote trade and attract investors into the country through the oil and gas free zones concept. OGFZA, under Umana Okon Umana, doing the direct opposite of what it was established to do,” Obieze said.
He said by OGFZA’s action, free trade zones operation in Nigeria “can not be the same again” as investors will find it difficult to take government for its words.
He said, “Free trade zones all over the world are created to serve as destination for capital; attract investment, create jobs and aid the transfer of technology to the host country. Free trade zones played a key role in the boom enjoyed by the Asian Tigers.
“The Nigeria Export Processing Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA) were specifically set up by the Federal Government to encourage investments in Nigeria in line with the country’s economic growth aspirations.
“Several incentives were instituted including 100 per cent repatriation of capital investment, remittance of profits and dividends with no import or export licenses required.
“Companies operating in the free zones also enjoy immigration non-quota regime and are exempt from taxes such as value added tax, corporate tax, withholding tax, capital gains tax and customs duty on export of goods to other countries.
“It was these incentives that attracted several companies resulting in over five trillion naira investments in the zones, with several thousands of jobs created.
“NEPZA and OGFZA were set up to serve as enablers of trade but unfortunately while NEPZA has remained on course, OGFZA has obviously lend itself to becoming an object of political vendetta and consequently derailed from its set objectives and the intents of its enabling Act,” he said.
The Managing Director of Samsung Heavy Industries in Nigeria, Frank Ejizu, said: “You cannot be wooing investors on one hand and scaring them away on the other hand. It will not work. If there was a violation of the law, then there is a ground for sanction.”
The General Manager, Finance of the Lagos Channel Management Company Limited, Joseph Amoni, said the action of the government would scare foreign investors away from the country.
Similarly, the Chairman, House of Representatives Committee on Maritime Safety, Education and Administration, Mohammed Umar Bago, said the situation was “getting sour”.
A former Senior Special Assistant to former President Goodluck Jonathan on Maritime Matters, Mr. Leke Oyewole, had recently warned against the political witch-hunt to private investments.
Brent Crude Oil Approaches $70 Per Barrel on Friday
Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension
Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.
Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.
Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.
While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.
According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.
“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”
Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.
“The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.
“I do believe we’re headed for a much healthier supply and demand environment” she said.
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.
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