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ExxonMobil Considers Sale of Nigerian Oil, Gas Fields for $3bn

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  • ExxonMobil Considers Sale of Nigerian Oil, Gas Fields for $3bn

Nearly two and a half years after exiting Nigeria’s downstream oil sector, ExxonMobil is weighing the sale of some oil and gas fields in the country.

The United States-based oil major recently held talks on the sale of a suite of oil and gas fields in Nigeria as the company focuses on new developments in US shale and Guyana, Reuters quoted industry and banking sources as saying.

The potential disposals are expected to include stakes in onshore and offshore fields and could raise up to $3bn, according to two sources.

“Exxon is actively divesting in Nigeria,” one source, who was briefed on the divestment plans, was quoted as saying.

The company is one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the country reached 225,000 barrels per day in 2017, its website said.

Exxon officials were said to have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields.

One source said Exxon was soon due to open a “data room” – which would provide technical information on the fields, such as seismic and production details – in Nigeria.

The discussions focused on a number of onshore fields Exxon shares in joint ventures with Nigerian National Petroleum Corporation, including Oil Mining Leases 66, 68, 70 and 104, according to one source.

Exxon’s share of oil production in those fields reached 120,000 bpd in 2017, the last year for which data was available.

Exxon is also weighing the possible sale of stakes in offshore fields in Nigeria, according to two sources.

When contacted for comment, the Manager, Media and Communications, Mobil Producing Nigeria Unlimited, Mr Oge Udeagha, declined to comment on the matter.

“ExxonMobil is committed to its long-term business operations in Nigeria. As a matter of practice, we don’t comment on business discussions,” he told our correspondent in an emailed response to an enquiry.

In October 2016, the oil major divested its 60 per cent stake in Mobil Oil Nigeria Plc to Nipco Plc, an indigenous Nigerian downstream oil and gas company.

The Nigerian government has in the last decade supported a drive by domestic firms such as Oando Plc, Seplat Petroleum Development Company Plc and Aiteo Group to expand their operations in the country as international companies including Royal Dutch Shell sought to lower their presence due to oil spills resulting from pipeline sabotage.

Exxon recently launched the sale of its stake in Azerbaijan’s largest oilfield, which would mark its retreat from the former Soviet state after 25 years.

Exxon announced earlier this year plans to boost its capital spending from $26bn in 2018 to $30bn in 2019 and up to $35bn next year as it seeks to develop oilfields in Guyana and the US Permian basin as well as gas projects in Mozambique and the US Gulf Coast.

In an analyst presentation last month, Exxon said it would accelerate its divestments to around $15bn by 2021.

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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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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