- FG May Stepdown N120bn Bodo-Bonny Road Project Over Compensation Troubles
The federal government thursday said it might be forced to step down the 34-kilometre long Bodo-Bonny road project over lack of cooperation from its communities in the Niger Delta.
Speaking at a meeting with prominent traditional rulers of the region, Julius Berger, Nigeria Liquefied Natural Gas (NLNG), as well as the Council of Elders from Ataba, and Gokana, among others, at the ministry, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, issued such warning to the communities and asked them to get their houses in order within a week or risk having the project suspended.
The road project which has been hampered from going on for a long time on account of funding constraints, is expected to help address the twin challenges of poverty and unemployment, as well as improve the lives of people of the region, especially those from Bonny, Ogoni, Okrika, Eleme, Andoni, and other communities in the Niger Delta when completed.
The NLNG opted to fund its construction by picking up about 50 per cent of its construction cost. However, compensation rows have reportedly cropped up to stop it from going ahead as planned.
But Fashola, stated in the meeting which had leaders of the communities such as HRM Festus Bagia who was represented by the Chairman of Gokana Council of Chief, Mene Michael Tekure, Chairman Jumbo Group of Houses, Prof. Jasper Jumbo and Clan Head of Ataba, Sir. Benson Egwemre, among others that the communities would have to unit to see the project sail through.
He said otherwise, he might be forced to petition President Muhammadu Buhari, over the issue and withdraw the government’s N60 billion share of the contracting sum for other federal projects in another part of the country.
The minister explained that the Bonny-Bodo road project enjoyed a good funding, with the NLNG providing N60 billion, and the government another N60 billion. He noted that the contractor had also received mobilisation fee for the project, yet it is being stalled by the communities’ lack of cooperation.
Fashola who was worried over unwavering position of the elders that the project will not be implemented except they were carried along and an additional route constructed in Ataba, stated: “We might tell NLNG to take its money back.”
He added: “You must work this peace. Today is Thursday, since you said you know the permanent secretary, I will leave you with him. All I want is a peace accord and an invitation to Julius Berger, not later than Wednesday 28 otherwise I will write a report to Mr. President that it doesn’t seem that this project is ready to go but we can move the money to another project.
“Whether it is Ataba, Ogoni or Gokana own this project. The people you call militants are not spirit. They take their cue from how you react. You are leaders there. If you go back home today and say it is over, the militants too will calm down. They don’t do anything without alerting the leaders.
“For us, we can’t keep the money down. The contractor has received his money but now he can’t work. There are projects where contractors are waiting for money, they don’t have it. That is a contradiction that will not last long,” he explained.
The minister continued: “So, I will leave you. You know where we stand. We have an idea of where you stand. For me, it is a compromise that owes the project. NLNG will not be there forever. It took time to even beg them to release this money. So, if you don’t take ownership of the project and put it to use, we might as well tell them, take your money back the project is not ready.
“When there is peace, we will come back but we need to have a position before the end of this week. There must be an MoU of compromise, assuring us that there will be peace in that place, agreed to by you, give it to us and invite the contractor to come back.
“Suggest to the contractor anything you want him to do. You can’t take-over how they organise their business. They are not bringing imported labour into your land. If your people want to supply diesel and sand, make the case for them, let them chose but don’t impose on them. They must be able to screen those they will admit to work with them and those who don’t meet that standard must seat,” he added.
Notwithstanding, the community leaders in their response agreed to meet with the contractor but requested for an extra week away from the one week given by Fashola to re-converge.
Silver Joins Haven Assets That Pullback on Dollar Strength
Silver Pulls Back on Dollar Strength
Silver pulled back on Friday after Donald Trump-led administration announced it was working on a new stimulus package to ease economic burden of the American people.
The United States dollar gained as investors jumped on it to hedge against US-China trade tensions.
Silver that has risen to almost eight years high of $29.84 on Thursday but pulled back after the US government announced its plan on a new stimulus package.
The haven asset, like Gold, pulled back to $27.97 on Friday during the New York trading session.
“While there are no early chart clues to suggest the gold and silver markets are close to major tops, both are now getting short-term overbought, technically, and are due for downside corrections in the uptrends,” Kitco Metals senior analyst Jim Wyckoff said in a note.
“And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come.”
Gold Pullback on Dollar Strength on Friday
Gold Pauses its Bullish Runon Dollar Strength
Gold pulled back from its record rally on Friday after the US dollar received a boost from the new stimulus.
The world’s safe-haven asset pulled back from $2074 per ounce it traded on Thursday to $2030 on Friday during the New York trading session.
“We’ll see some pullback (in gold) from these levels with USD bottoming for a while and maybe even see some strength in the USD in the near term, which will reverse these gains but not entirely,” said Spencer Campbell, director at SE Asia Consulting Pte Ltd. “People will be looking to re-enter the market on any pullbacks in precious metals as the medium to longer term views are significantly higher.”
Gold rose to an all-time high of $2074 on Thursday after rising over 35 percent on the back of the COVID-19 pandemic. However, economic uncertainties due to the second wave of COVID-19 continues to support gold rally and expected to continue until a concrete solution or vaccine is discovered.
“There are mixed signals that the economy is recovering and some of the signs of recovery are relatively superficial as they show aggregate figures and not how medium and small enterprises continue to suffer,” said Jeffrey Christian, managing partner of CPM Group.
“We have a very long way to go before we see a proper economic recovery.”
Finances of International Oil Companies Suffered in the Second Quarter
Finances of IOCs Plunged Amid COVID-19 Pandemic in the Second Quarter
Global leading oil companies suffered substantial losses in the second quarter, according to their various financial statements published in recent weeks.
On Thursday, Royal Dutch Shell posted $18.9 billion loss in the second quarter of 2020, far below the profit of $3.5 billion posted in the same quarter of 2019.
This, the company attributed to the plunge in global oil prices in 2020 due to the COVID-19 pandemic. Shell warned that oil demand remained uncertain, adding that it had cut its exploration plans for this year from about 77 wells to just 22.
This was after the price of Brent crude oil plunged to $15 per barrel during the peak of COVID-19 pandemic while the price of West Texas Intermediate crude oil dipped to -$37 per barrel, the lowest on record.
Also, the company said it has reduced its capital expenditure for the year from the initial $25 billion to $20 billion amid a plunge in revenue and demand for the commodity.
Similarly, ExxonMobil reported a $1.1 billion loss, its biggest decline on record. The oil company also announced it would be lowing spending by 30 percent in 2020 to about $23 billion.
Among the various oil companies posting negative financial statements for the quarter was Chevron Corporation, the company reported $8.3 billion decline in the second quarter of the year. The lowest ever posted by the oil giant in almost three decades.
Chevron, therefore, warned that the havoc caused by COVID-19 pandemic in the energy sector might continue to weigh on earnings.
“While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter of 2020,” Chevron’s Chairman and Chief Executive Officer, Michael Wirth, said.
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