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ExxonMobil Boosts A’Ibom Community with N13bn Investments, Economic Benefits

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  • ExxonMobil Boosts A’Ibom Community with N13bn Investments, Economic Benefits

Mobil Producing Nigeria (MPN), operator of the Nigerian National Corporation (NNPC/MPN) joint venture is almost a household name in Akwa Ibom State.

An affiliate of ExxonMobil Corporation, it often sees itself as a good corporate citizen and has affirmed that its presence in Akwa Ibom State is for a long haul; to showcase the company’s commitment to “working closely with the government in helping to improve quality of life.”

Since it began operations more than three decades ago and with its base in Akwa Ibom State, the oil company has contributed to the economy of the state and that of the federal government through its numerous programmes and projects. In many ways, it has made investments in education, health, skill development and in forging a mutually beneficial relationship with the host communities.

Apart from the oil company’s commitment to provide long term health, educational and economic benefits to its host communities, it recently performed the ground-breaking ceremony of three major community assistance projects in Akwa Ibom estimated to be worth N13 billion. The ceremony took place in Ikot Akata, Mkpat Enin local government area of the state.

Before this event, ExxonMobil subsidiaries have ‘powered the economy of their neighbouring communities’ and that of the country with investments supporting economic growth.

For instance, they have contributed more than N130 billion to the Niger Delta Development Commission (NDDC) since 2001 and more than N230 million ground rent to Akwa Ibom State. It is also a major contributor to the state’s economy with over N230 billion annually from the 13 per cent derivation principle for oil producing states.

The oil company has also sustained payment of subvention to health workers in the riverine Ibeno communities of the state for more than two decades and has been providing subvention to the maternal birth injury hospital in Itu, Akwa Ibom State for the same period; a development that helped many to have access to healthcare for the treatment of an ailment that the society stigmatises such patients.

“ExxonMobil is our backbone; the oil company gives us certain amount of money every month to support us,’’ says Ngozi Ndubuau, the matron of the hospital which treats Visco-Vaginal Fistula (VVF) cases.

For the ground-breaking event, another example of the company’s contribution to the state and its people, the projects include a technical skills acquisition facility at the Community Technical College, Mkpat Enin local government area, a trauma centre at the University of Uyo teaching hospital, and an engineering faculty complex at the University of Uyo.

Estimated to be completed over the next 18 months, it is believed that the investment is one of the largest community investment expenditure by any company in the country.

Significantly, while the trauma centre would take care of the health needs of the people, the engineering faculty would when completed provide a conductive learning environment for students, while the skills acquisition centre will serve as the hub for the training of youths in various vocations.

Because of the volume of the investment and coming at a time when it seems difficult for oil companies to commitment to developing their host communities, the ceremony turned out to be a meeting point for top government officials and key players in Nigeria’s oil industry.

For instance, the Chairman/Managing Director of Mobil Producing Nigeria Unlimited, Paul McGrath, and vice chairman of the oil company, Udom Inoyo, led the delegation to the ground-breaking ceremony.

Also, the Akwa Ibom State government was fully represented with Governor Udom Emmanuel, alongside the deputy governor, Moses Ekpo, and the secretary to the state government, Emmanuel Ekuwem, commissioners as well as royal fathers and the academia.

Speaking at the ceremony, McGrath noted with satisfaction the cordial relationship existing between the oil company and the state government restating the joint venture’s commitment to long-term operations and mutually beneficial relationship with the state.

“We know we can continue to count on the support and cooperation of the government, our communities and other stakeholders as well as all collectively work towards making these projects a reality, and eventually enjoying the health, educational and economic benefits they are designed to provide to the good people of Akwa Ibom State,” he said.
According to him, the company has enjoyed relatively peaceful relations with the people of Akwa Ibom state for the past three decades pointing out that the company has made substantial revenue and community investment contributions in the areas of health, education and empowerment projects.

He maintained that the company was committed to ensure even deeper social and economic benefits for the communities near its operations and across the state in the coming years. “We are proud of our contributions and look forward to working together with all stakeholders for greater achievements,” he said.

Giving an insight into the choice of projects, a major stakeholder in the oil industry, the National Petroleum Investment Management Services (NAPIMS) led by the group general manager, Roland Ewubare said it was an outcome of extensive engagement with key stakeholders in Akwa Ibom and it represents their conviction that direct benefits to citizens should be at the heart of every social investment decision by companies who operate the country’s oil assets.

Represented by Hillary Akpan, head of Gas unit at NAPIMS, he said his organisation worked extensively with MPN in reviewing the investment proposals for the projects, adding that it only granted execution approval based on their conviction that they would provide significant socio-economic benefits to communities in Akwa Ibom State.

“The projects will address gaps in two focus areas which we consider vital to social and economic development, capacity and skills development in Nigeria’s oil industry and accessibility to quality health care for citizens.
“The technical skills centre and the engineering complex when commissioned will considerably extend opportunities for Akwa Ibom indigenes as well as other qualified Nigerians to development much needed technical skills in our oil and gas industry,” he said.

Describing the projects as “truly important” he said solicited the support of all to ensure its success by being delivered on schedule and expressed happiness the joint venture partners have over the years found Akwa Ibom state and its people to be worthwhile partners of progress to the benefit of all stakeholders, adding that it has helped to ensure business sustainability.

Specifically, the technical skills centre consists of a three-block training complex for critical skills required in oil and gas careers such as pipeline fabrication, welding, electrical works, chemical lab works, civil works and engineering. The centre is expected to train more than 100 students annually, mostly from the neighbouring communities.

On the other hand, the trauma centre in a two-floor medical complex will help reduce mortality rates from major medical emergencies. The centre will include a resuscitation and burns room, a theatre suite, helipad, ambulance by and triage area, high dependency and radiology units, mini labs, wards, pharmacy, administrative offices, library and doctors’ call and seminar rooms.

For the engineering complex, it is to be equipped with generators and independent water supply and will feature two floors of workshops, laboratories, a lecture theatre, conference rooms and faculty offices. It is also expected to serve 2,000 students, mostly from Akwa Ibom State.

Overwhelmed with joy, the state governor, Udom Emmanuel thanked NNPC/MPN joint venture for the investment in Akwa Ibom State and promised to ensure that the peaceful atmosphere prevalent in the state is sustained as a means of attracting more investments.

The governor explained that the location of the projects was not based on any political consideration maintaining that those who are likely to be the major beneficiaries are people from Akwa Ibom State.

The paramount ruler of Eket local government area, one of the core oil producing communities in the state also lauded the joint venture operators for the investment though he expressed mixed feelings that one of the projects ought to have been located in the oil bearing communities.

Indeed, the joint venture partners have demonstrated their commitment to contributing to the growth agenda of Akwa Ibom State and their decision to invest N13 billion worth of projects in health, education and skills acquisition is a clear testimony to this and will without doubt create long term economic benefits in Akwa Ibom State.

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 Sink 1% as Israel-Hamas Talks in Cairo Ease Middle East Tensions

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Oil prices declined on Monday, shedding 1% of their value as Israel-Hamas peace negotiations in Cairo alleviated fears of a broader conflict in the Middle East.

The easing tensions coupled with U.S. inflation data contributed to the subdued market sentiment and erased gains made earlier.

Brent crude oil, against which Nigerian oil is priced, dropped by as much as 1.09% to 8.52 a barrel while West Texas Intermediate (WTI) oil fell by 0.99% to $83.02 a barrel.

The initiation of talks to broker a ceasefire between Israel and Hamas played a pivotal role in moderating geopolitical concerns, according to analysts.

A delegation from Hamas was set to engage in peace discussions in Cairo on Monday, as confirmed by a Hamas official to Reuters.

Also, statements from the White House indicated that Israel had agreed to address U.S. concerns regarding the potential humanitarian impacts of the proposed invasion.

Market observers also underscored the significance of the upcoming U.S. Federal Reserve’s policy review on May 1.

Anticipation of a more hawkish stance from the Federal Open Market Committee added to investor nervousness, particularly in light of Friday’s data revealing a 2.7% rise in U.S. inflation over the previous 12 months, surpassing the Fed’s 2% target.

This heightened inflationary pressure reduced the likelihood of imminent interest rate cuts, which are typically seen as stimulative for economic growth and oil demand.

Independent market analysts highlighted the role of the strengthening U.S. dollar in exacerbating the downward pressure on oil prices, as higher interest rates tend to attract capital flows and bolster the dollar’s value, making oil more expensive for holders of other currencies.

Moreover, concerns about weakening demand surfaced with China’s industrial profit growth slowing down in March, as reported by official data. This trend signaled potential challenges for oil consumption in the world’s second-largest economy.

However, amidst the current market dynamics, optimism persists regarding potential upside in oil prices. Analysts noted that improvements in U.S. inventory data and China’s Purchasing Managers’ Index (PMI) could reverse the downward trend.

Also, previous gains in oil prices, fueled by concerns about supply disruptions in the Middle East, indicate the market’s sensitivity to geopolitical developments in the region.

Despite these fluctuations, the market appeared to brush aside potential disruptions to supply resulting from Ukrainian drone strikes on Russian oil refineries over the weekend. The attack temporarily halted operations at the Slavyansk refinery in Russia’s Krasnodar region, according to a plant executive.

As oil markets navigate through geopolitical tensions and economic indicators, the outcome of ongoing negotiations and future data releases will likely shape the trajectory of oil prices in the coming days.

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Commodities

Cocoa Fever Sweeps Market: Prices Set to Break $15,000 per Ton Barrier

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Cocoa

The cocoa market is experiencing an unprecedented surge with prices poised to shatter the $15,000 per ton barrier.

The cocoa industry, already reeling from supply shortages and production declines in key regions, is now facing a frenzy of speculative trading and bullish forecasts.

At the recent World Cocoa Conference in Brussels, nine traders and analysts surveyed by Bloomberg expressed unanimous confidence in the continuation of the cocoa rally.

According to their predictions, New York futures could trade above $15,000 a ton before the year’s end, marking yet another milestone in the relentless ascent of cocoa prices.

The surge in cocoa prices has been fueled by a perfect storm of factors, including production declines in Ivory Coast and Ghana, the world’s largest cocoa producers.

Shortages of cocoa beans have left buyers scrambling for supplies and willing to pay exorbitant premiums, exacerbating the market tightness.

To cope with the supply crunch, Ivory Coast and Ghana have resorted to rolling over contracts totaling around 400,000 tons of cocoa, further exacerbating the scarcity.

Traders are increasingly turning to cocoa stocks held in exchanges in London and New York, despite concerns about their quality, as the shortage of high-quality beans intensifies.

Northon Coimbrao, director of sourcing at chocolatier Natra, noted that quality considerations have taken a backseat for most processors amid the supply crunch, leading them to accept cocoa from exchanges despite its perceived inferiority.

This shift in dynamics is expected to further deplete stocks and provide additional support to cocoa prices.

The cocoa rally has already seen prices surge by about 160% this year, nearing the $12,000 per ton mark in New York.

This meteoric rise has put significant pressure on traders and chocolate makers, who are grappling with rising margin calls and higher bean prices in the physical market.

Despite the challenges posed by soaring cocoa prices, stakeholders across the value chain have demonstrated a willingness to absorb the cost increases.

Jutta Urpilainen, European Commissioner for International Partnerships, noted that the market has been able to pass on price increases from chocolate makers to consumers, highlighting the resilience of the cocoa industry.

However, concerns linger about the eventual impact of the price surge on consumers, with some chocolate makers still covered for supplies.

According to Steve Wateridge, head of research at Tropical Research Services, the full effects of the price increase may take six months to a year to materialize, posing a potential future challenge for consumers.

As the cocoa market continues to navigate uncharted territory all eyes remain on the unfolding developments, with traders, analysts, and industry stakeholders bracing for further volatility and potential record-breaking price levels in the days ahead.

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Crude Oil

IOCs Stick to Dollar Dominance in Crude Oil Transactions with Modular Refineries

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Crude Oil - Investors King

International Oil Companies (IOCs) are standing firm on their stance regarding the currency denomination for crude oil transactions with modular refineries.

Despite earlier indications suggesting a potential shift towards naira payments, IOCs have asserted their preference for dollar dominance in these transactions.

The decision, communicated during a meeting involving indigenous modular refineries and crude oil producers, shows the complex dynamics shaping Nigeria’s energy landscape.

While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had previously hinted at the possibility of allowing indigenous refineries to purchase crude oil in either naira or dollars, IOCs have maintained a firm stance favoring the latter.

Under this framework, modular refineries would be required to pay 80% of the crude oil purchase amount in US dollars, with the remaining 20% to be settled in naira.

This arrangement, although subject to ongoing discussions, signals a significant departure from initial expectations of a more balanced currency allocation.

Representatives from the Crude Oil Refinery Owners Association of Nigeria (CORAN) said the decision was not unilaterally imposed but rather reached through deliberations with relevant stakeholders, including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

While there were initial hopes of broader flexibility in currency options, the dominant position of IOCs has steered discussions towards a more dollar-centric model.

Despite reservations expressed by some participants, including modular refinery operators, the consensus appears to lean towards accommodating the preferences of major crude oil suppliers.

The development underscores the intricate negotiations and power dynamics shaping Nigeria’s energy sector, with implications for both domestic and international stakeholders.

As discussions continue, attention remains focused on how this decision will impact the operations and financial viability of modular refineries in Nigeria’s evolving oil landscape.

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