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$300bn in Oil Investments Lost Globally in Three Years – Kachikwu

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Crude oil gains
  • $300bn in Oil Investments Lost Globally in Three Years

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Monday, lamented the loss of $300bn in oil investments globally in three years, due to the decline in oil price.

Kachikwu, who stated this at the 2017 Society of Petroleum Engineers’ Nigeria Annual International Conference & Exhibition in Lagos, said the losses were in oil exploration and production.

The theme of the conference is: “Building the Waves of Boom and Burst: Common Objectives Diverse Perspective’’.

The minister said on the Nigerian side, the loss of these investments was due to inefficiency in the country’s security policy and inconsistency in policies.

According to Kachikwu, investors prefer to invest the limited resources elsewhere in African countries; so what we are losing, other countries in Africa are gaining.

“The situation is very challenging when it comes to losing opportunities arising from investment.

“For the first time in the oil sector, the decline in the oil price resulted into loss of jobs.

“Infrastructural gap is another factor which the decline in the price created.

“We have an infrastructural gap deficit of $5bn because government was responsible for infrastructure and we did not engage the private sector.

“The whole idea of the new petroleum policy is to move the private sector into financing part of the projects because Government cannot do it alone,’’ he said.

The minister said the boom and bust had become the way of life in the oil and gas sector.

“I think we have had about five circles of boom and bust over the last 35 years and each time, we begin as if we did not expect it.

“The boom and bust has become the nature of oil and we should not be surprised anymore.

“Over 80 per cent decline in world oil price was recorded between 2014 and 2016 with oil price falling between 25 dollars per barrel.

“All the same, we have managed through the principles of OPEC, to keep the price going between 45 and 50 dollars per barrel.

“For now, our expectations between the year 2017 and 2018, is to keep the price at 60 dollars per barrel,’’ he said.

Kachikwu, however, said some countries and people were moving away from oil.

He said that electric motors were taking over globally.

“In the next 20 to 25 years, oil lifespan will expire, so we just need only five years to make a change of policy in the sector.

“We must make a traumatic decision for the oil sector to survive the innovation.

“The country needs a consistent policy and to deal with inefficiencies in our system to survive the trend,’’ he said.

Welcoming the participants, Mr Saka Matemilola, the Chairman, SPE Nigeria Council, said the mission of the conference was to disseminate information as regards the oil and gas sector.

Matemilola said petroleum sector remained the main focus of the national economy.

He said the current challenges in the oil sector provided the necessary catalysts to provide opportunities for 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 long experience in the global financial market.

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Investment

COVID-19: Zenith Bank to Access First IFC Financing Support Package in Africa

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Zenith Bank

Zenith Bank to Access $100 Million COVID-19 Support fund from IFC

Africa’s sixth-largest bank, Zenith Bank Plc, is the first African Bank to access a $100 Million loan from International Financial Corporation (IFC) to battle the negative effect of the global health pandemic.

The world Bank Group reported that the investment is to enable Zenith Bank gain access to foreign currency, additional working capital and more fund for trading.

Accordingly, the loan will enable the bank to support Nigerian businesses in various sectors, strengthen operations, preserve employment and help gain access to required raw materials in this challenging economic period.

The Group Managing Director/CEO of Zenith Bank, Ebenezer Onyeagwu said that IFC support will help the nation tackles the negative impacts of COVID-19 pandemic on the economy.

IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements,” he stated

The loan to Zenith Bank is part of the $8 billion COVID-19 global support finance package announced by the World Bank in the first quarter of the year to support businesses affected by the pandemic. Over 250 global clients have requested for financial support from the multilateral institution.

Eme Essien Lore, IFC Country Manager in Nigeria, said, “IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage.

With the World Bank predicting Africa’s first recession in 25 years, the adverse effects of COVID-19 have seen the shutdown of businesses in Nigeria’s economy and other countries in Africa

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A New Haven, Dual Citizenship Firm Plans to Set Up in Nigeria

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Nigerians Can Now Apply for Dual Citizenship in Nigeria

A Zurich-based firm, Henley & Partners Group, a citizenship and residency advisory firm plan to set up an office in Lagos, the most populous city in Nigeria.

According to the firm, the wealthy Africans expression of interest in passport and residency rights surged from 750 in 2019 to over 1000 in the first quarter of this year. The office in Lagos would be the second outpost in Africa, the first outpost was in Johannesburg and Cape Town, South Africa.

The two biggest economies in Africa, Nigeria and South Africa provides over 85 percent of the Africans that purchased the firm service in 2019.

Nigeria, the largest economy and biggest crude oil producer in Africa, has more than 700 people with a net worth greater than $30 million and that figure is forecast to grow by 13% in the next five years, according to Knight Frank’s 2020 Wealth Report estimates.

The country which has a population of about 200 million, also has the most people living in extreme poverty.

Henley & Partners are setting up in Lagos to support the wealthy citizens to secure citizenship of various Caribbean countries including St. Kitts and Nevis, that allow more widespread visa-free travel, as well as a select few European Union members such as Cyprus and Malta.

Costs range from less than $200,000 for Caribbean passports — once vetted by both Henley and the government — to a contribution of more than $1 million for European nations.

According to the head of sales, Dominic Volex, the firm has been rendering service to Nigerian clients for more than three years.

“We have been engaging with Nigerian and West African clients for over three years now and have seen constant growth. ”

He added that “The significant increase in wealth creation in the region has created a consequent surge in demand for our services.”

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Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies

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Barclays Bank

Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

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