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9Mobile: NCC Conducts Fresh due Diligence on Preferred Bidder

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  • 9Mobile: NCC Conducts Fresh due Diligence on Preferred Bidder

The Nigerian Communications Commission says it is conducting another round of due diligence on the preferred bidder for 9Mobile, Teleology Holdings Limited.

The due diligence will determine whether the bid winner has the technical capacity as well as the financial resources to successfully run the beleaguered telecommunications company.

Answering a question from journalists on the lingering takeover of the telecommunications company in Abuja on Wednesday, the Executive Vice Chairman, NCC, Prof Umar Danbatta, said the commission would soon report to its board on the result of the due diligence.

He added that the preferred bidder must fulfil all necessary conditions before it would be allowed to take over the company formally known as Etisalat.

Danbatta said, “There are issues but let me say we are almost done with sorting out those issues. We are presently conducting another round of due diligence on Teleology: to examine and consequently determine whether they really have the technical wherewithal to run the company effectively; and whether they really have financial capability to run well and so on.”

The NCC helmsman in April told journalists that Teleology had made the initial payment of $50m for 9Mobile, adding that the preferred bidder had less than 90 days to pay the remaining 90 per cent or $450m.

According to Danbatta, failure by Teleology to pay the remaining $450m on schedule would make it to lose the spot to the reserved bidder, Smile Communications.

The NCC boss said that as soon the technical team of the NCC was done with the latest round of due diligence, the recommendations would be sent to the board, which is in a position to give its consent for possible takeover of 9Mobile.

Speaking on MTN Nigeria Communications Limited, the NCC boss said the company was under obligation to list on the Nigerian Stock Exchange by May 2019, in accordance with the settlement it sealed with the operator in 2015.

He also expressed confidence on the capacity of the Nigerian telecommunications industry to keep deepening the nation’s broadband penetration.

Danbatta said, “There is more to achieving the maximum target of 30 per cent broadband penetration by 2018 ending. But let me say without fear of contradiction that we have so far surpassed the minimum target of penetration.

“We are presently at 22 per cent, according to the International Telecommunications Union, and we are doing everything within our power to make the penetration more ubiquitous.”

The NCC boss said the N23bn subsidy already approved in the NCC 2018 budget would make it possible for the infrastructure companies to roll out and increase the nation’s broadband penetration.

He added, “Until there is complete fibre connection across the country, we can’t have 30 per cent penetration.”

Danbatta also disclosed that the regulatory agency was working with the office of the Vice President, Prof Yemi Osinbajo, to oversee the laying of 18,000 km fibre infrastructure across the country.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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