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Shell Declares Force Majeure on Bonny Light Exports

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  • Shell Declares Force Majeure on Bonny Light Exports

Shell Petroleum Development Company of Nigeria Limited has declared force majeure on exports of Bonny Light crude, one of the country’s major sources of oil revenue.

Force majeure is a legal clause that allows companies to cancel or delay deliveries due to unforeseen circumstances.

Reuters quoted traders as saying that a surplus of unsold cargoes was so large that differentials struggled to hold steady.

The SPDC, the Nigerian subsidiary of Royal Dutch Shell, said on Thursday it had declared force majeure on Bonny shipments with immediate effect.

It said the shutdown of the Nembe Creek Trunk Line had prompted the force majeure.

Exports of Bonny Light are expected to run at around 195,000 barrels per day next month.

According to traders, only one tanker is scheduled to load Bonny Light crude over the next two weeks.

Shipments of Erha crude were also said to be delayed, but this had not yet had a knock-on upward effect on prices of other grades, two traders said.

Prior to the declaration of force majeure on Bonny Light exports, the nation’s crude shipments were already witnessing delays following a leak on the 200,000 to 240,000 bpd Trans-Forcados pipeline that shut down earlier this week, effectively cutting deliveries of Forcados, the country’s largest crude grade.

Trans-Forcados pipeline was shut down after a leak was found. Repairs are on-going.

About 25 cargoes of June-loading Nigerian cargoes were still available, although traders said around half of that total were held by Total and Shell.

Indonesian Pertamina’s tender for July 8-10 delivery and July 23-27 delivery closed on Thursday.

Pertamina has another tender for August 1-10 or 16-20 or early September delivery closing on Monday.

Meanwhile, the world’s three largest oil traders are competing to buy the African arm of Brazil’s Petrobras that owns stakes in two major Nigerian offshore oil blocks, industry and banking sources with knowledge of the matter have said, after submitting bids earlier this month, according to Reuters.

Last November, state-controlled Petroleo Brasileiro SA, known as Petrobras, launched the sale of 100 per cent of Petrobras Oil & Gas BV, or Petrobras Africa, as part of the heavily-indebted company’s plan to offload $21bn in assets through 2018 as it also faces a massive corruption scandal.

Petrobras holds half the shares in the company, while 40 per cent are held by a subsidiary of Grupo BTG Pactual SA and 10 per cent by Helios Investment Partners.

Bankers have previously estimated the value of the Petrobras venture to be about $2bn.

The venture has stakes in two offshore blocks that contain two producing fields, the major Agbami field in Oil Mining Lease 127, operated by a local Chevron affiliate, and the Akpo field in OML 130 operated by Total SA.

The sale has attracted the top trading firms, which are always on the hunt for long-term crude supplies. Mercuria and BP had also its potential.

In early May, three consortia including the major trading companies submitted bids to buy Petrobras Africa.

Vitol bid together with the oil upstream subsidiary of United States private equity firm Warburg Pincus called Delonex and Canadian-listed Africa Energy Corp, an oil and gas exploration firm that is part of Sweden’s Lundin Group.

Glencore joined with Nigerian listed firm, Seplat, and French firm, Maurel & Prom, that is majority-owned by the Indonesian government. Indonesia’s state oil firm, Pertamina, also backs Maurel & Prom and owns a 20 per cent stake in Seplat.

The third bidder was privately-held Famfa Oil, together with Royal Dutch Shell.

Famfa Oil is one of the concessionaires in the operator of the Agbami oil field along with Chevron, Statoil and Petrobras. Chevron holds the majority stake.

Vitol, Glencore, Shell, Africa Energy declined to comment. Maurel, Famfa and Seplat did not respond to requests for comment.

Petrobras is expected to make a decision by the end of May. But the sources said that this could slide as there was still a possibility that the bids might be split between the two oil block stakes.

Agbami produces about 240,000 bpd, while the Akpo field in OML 130 produces nearly 130,000 bpd, with a second field, Egina, due to come on stream in the same block later this year.

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 market.

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High Pesticide is Reason Nigerian Beans Not Acceptable in Most Countries

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High Pesticide is the Reason Nigerian Beans Not Acceptable in Most Countries

High pesticide residue is the reason exporters of Nigerian cowpea (beans) can no longer access certain foreign markets, according to the Nigeria Agricultural Quarantine Service (NAQS).

Vincent Isegbe, the Director-General, NAQS, disclosed this on Monday in Abuja during a strategic engagement with the President of Cowpea Association of Nigeria, Shittu Mohammed.

Isegbe advised stakeholders to work together to address the weak cowpea value chain in order to establish a continuous market for Nigerian beans.

In a statement issued by Gozie Nwodo, the Head, Media, Communications and Strategies, NAQS, Isegbe said “The pattern of boom and bust in cowpea export owes to the ingrained issue of high pesticide residue.

“The pesticides are largely introduced during the storage phase. The residue levels in the cowpea tend to rise above the maximum threshold set by certain Customs union and this makes the product unacceptable in crucial destinations.

Isegbe added, “We need to make a clean break from imprudent application of storage pesticides and consolidate a reputation for producing and delivering cowpea that satisfy relevant quality criteria.”

He said Nigeria is losing thousands of jobs and foreign exchange due to the suspension of cowpea or other agricultural commodities on account of intolerable quality defects.

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Wema Bank Announces Collateral Free Loans for SMEs

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Wema Bank to Provide Collateral Free Loans for Small Businesses

In a bid to ease COVID-19 burden on Small and Medium Enterprises (SMEs), Wema Bank has launched collateral-free loans for all qualified SMEs.

In a statement published by the bank last week, the lender said the loans will go a long way in assisting businesses impacted by the COVID-19 pandemic. It explained that the move is in line with the bank’s mission to support the fight against ravaging COVID-19.

Further break down of the bank’s statement revealed that the SMEs loan products will provide N10 million to businesses in need of working capital without collateral or security for such financial support.

The credit facility, according to the bank, is available to business owners who have an establishment in trade/general commerce, Schools, Pharmacies, hospitals, clinics and diagnostic centres.

Wema Bank added that in order to make the loan more accessible to businesses outside its customers, both new and existing customers can access the facility without previous banking history with Wema Bank. This, it said includes those doing business in their personal names.

The bank is also offering up to N5 million without collateral and up to 12 months repayment period to businesses that are doing trading or general commerce while school owners can get up to N10 million without collateral with also 12 months repayment period.

“Health sector businesses like pharmacies, hospitals, clinics and diagnostic centres can also get up to N5million without collateral with up to 12 months repayment period to meet working capital needs. In an earlier communication, the bank had stressed how critical it is to support players in the health sector, especially with the realities of the time.

“For us, we will continue to put the health of Nigerians and the safety of our communities first,” said the Managing Director/CEO Wema Bank, Ademola Adebise.

It is our joy to see players in the health sector grow during this difficult time and we encourage them to take advantage of all our support programmes to keep their businesses afloat.”

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AXA Mansard Sells Entire Stake in AXA Mansard Pensions

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AXA Mansard Divests Interest From AXA Mansard Pensions

AXA Mansard Insurance on Friday announced it has divested from its subsidiary, AXA Mansard Pensions, after receiving Shareholder’s approval at the Company’s Extra Ordinary General Meeting on February 13th 2020.

In the statement signed by Mrs. Omowunmi Mabel Adewusi, the Company Secretary, AXA Mansard Insurance Plc and released through the Nigerian Stock Exchange, the Company said it commenced the divestment process by appointing Messer Rand Merchant Bank as the Financial Advisers while Aluko & Oyebode acted as the Legal Adivsers on the deal.

The company entered into a sale and purchase agreement with Eustacia Limited to sell its entire 2,067,672,000 shares or 60 percent shareholding held by AXA Mansard Insurance Plc and another 1,378,448,000 shares or 40 percent shareholding held by minority Shareholder.

Speaking on the divestment, Mr. Kunle Ahmed, Chief Executive Officer, AXA Mansard Insurance Plc said: “This transaction marks a new step in AXA´s broader strategy to focus on and grow our Life, Property & Casualty (P&C) and Health businesses across all its geographies. The AXA Group sees great potential in the Nigerian insurance market and believes AXA Mansard is ideally placed to capture these opportunities, thanks to its market leadership positions in Health Insurance, Property & Casualty and Life Insurance. We plan to capitalize on our successes to further build our capabilities and continue to deliver the best offers & services to our customers”.

Commenting on the transaction, Dapo Akisanya, CEO of AXA Mansard Pensions Limited said, “We are confident about Verod’s strong commitment to providing the Company with the requisite support to actualize our promise to our clients and stakeholders. As a West African investor with deep local knowledge and presence, we look forward to harnessing Verod’s unique, and world-class, attributes towards setting new standards in the industry.

Verod has the capacity, expertise, and network, to support the business to continue to expand and to provide innovative solutions for the benefit of our current and future clients

We strongly believe that this is the ideal time to enter the market and that AXA Mansard Pensions provides an excellent beachhead from which to establish a consolidated position and gain market share,” said Eric Idiahi, Partner at Verod.

“The National Pension Commission continues to demonstrate a strong commitment to raising standards within the industry and driving pension penetration rates in the short to medium term. We believe that sustaining AXA Mansard Pension’s industry-leading investment returns, excellent customer service, as well as, expanding distribution network and product offerings will facilitate the capture of the considerable growth potential within the Nigerian pensions industry, particularly following the opening of the transfer window.

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