Economy
News of Another COVID-19 Vaccine Lifts Oil Prices
By Adedapo Adesanya
The new week saw prices of crude oil opening in the upward territory on Monday, November 23 as the eventuality of another coronavirus vaccination improved demand outlook for the commodity.
Rising to their strongest level since early September, the Brent crude gained 85 cents or 1.89 per cent to trade at $45.82 per barrel, while the West Texas Intermediate (WTI) crude futures moved up by 1.01 per cent or 43 cents to trade at $42.85 per barrel.
AstraZeneca Plc became the latest company to report a vaccine that protects most people from coronavirus. It was disclosed that vaccinations will hopefully start as soon as December 11 or 12.
It was reported that the vaccine stopped an average of 70 per cent of participants from falling ill. The effectiveness rose to 90 per cent for one of two regimens, using half a dose followed by a full one later, close to the high bar set by Pfizer Inc. and Moderna Inc.
Astra and Oxford officials said they’re preparing to submit the findings to regulators and don’t expect the different outcomes in the study to affect the process.
Despite the apparently lower efficacy than shots from Pfizer and Moderna, which each prevented by about 95 per cent of cases, the British vaccine has some advantages. Their shot can be kept at refrigerator temperatures, while those from Pfizer and Moderna require freezing for longer-term storage and transport. That would make Astra’s easier to deploy globally, particularly in lower and middle-income countries. It also comes at a lower cost.
Crude has now jumped around 20 per cent this month as pharmaceutical companies make rapid progress on vaccines. Optimism that relief from the pandemic is in sight has seen the market look past surging infections and more lockdown measures.
Equally lifting the market were expectations that the Organisation of the Petroleum Exporting Countries (OPEC) and its allies known as OPEC+ might extend a deal to restrain output.
The recent spike in coronavirus cases has been touted as a likely catalyst that will prompt the OPEC+ alliance to roll over the current 7.7 million barrels per day production cuts into 2021, instead of easing them by 2 million barrels per day from January.
The market is banking on an extension of the current OPEC+ cuts of three months through the end of the first quarter of 2021, and the group is reportedly also leaning toward such an extension. This is subject to a meeting set for next week Monday and Tuesday, (November 30 – December 1).
Another development that helped the market yesterday was the claims by Houthi rebels in Yemen in a statement that they struck a Saudi Arabia’s national oil company, Aramco fuel distribution centre in Jeddah on the kingdom’s west coast with a missile.
Although Aramco’s main oil facilities are in the east, a possible disruption to oil production can trigger price movement.
By Adedapo Adesanya
Two advisers to Dangote Petroleum Refinery’s planned Initial Public Offering (IPO) on Tuesday announced a $1 billion underwriting programme for the offering, giving the plant potentially powerful new route to African and international capital.
Marob Strategies and Consulting DIFC Limited and Lilium Capital Group said in a statement that the programme comprises a completed and funded $600 million private placement and a $400 million underwriting commitment for the planned IPO.
The $600 million placement is already complete.
The remaining $400 million commitment will only come into effect when the IPO is launched and remains subject to market conditions, regulatory and corporate approvals, and definitive documentation and securities-law requirements, according to the advisers.
Dangote Petroleum Refinery, built by Africa’s richest man Aliko Dangote, has become a symbol of Nigeria’s attempt to reduce dependence on imported refined petroleum products while building domestic refining and petrochemical capacity.
Recall that it has applied to Nigeria’s Securities and Exchange Commission (SEC) for a $5 billion IPO. However, the final size of the offering has yet to be determined.
The refinery has emerged as a major beneficiary of supply disruptions linked to the Iran war, increasing sales of jet fuel across Africa and into Western Europe as buyers seek alternative supplies.
The planned listing could rank among the largest IPOs in Africa, depending on the final size of the offering and market conditions at launch.
“This is an important milestone for DPRP and for African capital markets,” Mr Dangote said in the announcement, describing the completed placement and IPO underwriting commitment as a sign of confidence in the refinery’s strategic role.
On his part, Marob Strategies Chairman, Mr Benedict Oramah, a former president of the refinery’s backer Africa Export-Import Bank, said investor interest demonstrated appetite for African-led capital markets transactions involving transformative assets on the continent.
Adding his part, Lilium Capital Chairman, Mr Simon Tiemtoré, similarly framed the deal as an effort to connect major African investment opportunities with institutional capital across the continent and international markets.
By Adedapo Adesanya
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could impose fines of up to five per cent of the annual turnover of petroleum operators found guilty of serious anti-competitive practices in the midstream and downstream sectors.
This was contained in the draft regulations of the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026.
According to the proposal, errant companies of serious offences such as price-fixing, bid-rigging, market allocation, abuse of market dominance and other conduct capable of causing significant harm to competition could be fined between three and five per cent of their annual turnover.
It further proposed that persistent or serious offenders may also have their licences suspended or revoked, while the NMDPRA may impose daily penalties on operators that fail to comply with its orders or continue prohibited conduct after being directed to stop.
The draft regulation stated: “Where the Authority determines, after investigation and due process, that a licensee or any other person has engaged in anti-competitive conduct or breached any provision of this Regulation or the Act, it may impose administrative fines as provided herein.
The maximum administrative fine shall not exceed five per cent of the annual turnover of the offending undertaking for the preceding financial year.
“For purposes of these regulations, ‘annual turnover’ means gross revenues or sales derived from the regulated business activities in Nigeria. Where multiple entities or group structures are involved, the Authority may consider the turnover of the group, subsidiary, or segment most directly involved in the infringement.”
“Where a licensee or person fails to comply with an order or directive of the Authority, a daily penalty may be imposed for each day the violation continues.
“Where a prohibited practice continues after a final order, the daily penalty could rise to between N10m and N50m. Before imposing a fine, the NMDPRA would issue a Notice of Intention to Fine setting out the facts and findings, the nature of the infringement, the basis for calculating the proposed fine and the proposed deadline for payment,” it proposed.
By Adedapo Adesanya
Nigerian billionaire, Mr Femi Otedola, the chairman of First HoldCo, has acquired an additional 147.74 million shares of the financial services group through his investment vehicle, Calvados Global Services Limited.
According to a regulatory filing obtained from the Nigerian Exchange (NGX) Limited on Monday, Mr Otedola purchased the stocks valued at N20.68 billion.
The notice said the investor purchased about 147,737,699 ordinary shares at N140 per share on August 14.
The transaction increases Mr Otedola’s stake in the financial services group from 11.99 billion shares (26.1 per cent) to 12.13 billion shares (26.4 per cent).
The acquisition comes less than two weeks after the billionaire bought 138.04 million ordinary shares for about N18.11 billion.
Prior to that, Mr Otedola had said he had invested more than N600 billion of his personal wealth in the bank, describing the investment as a “long-term generational commitment” rather than a turnaround play.
Responding to speculation about increasing his stake, Mr Otedola said his investment philosophy favours majority control.
“My investment threshold is always over and above 51 per cent,” the billionaire had said.
“One of my key investment principles is that firm shareholder control, with due regard for minority interest, is a key ingredient to executing reforms and restructuring to deliver value to all stakeholders.”
The bank’s share price had recently risen to an all-time high of N140 per share, pushing its market capitalisation to N6.37 trillion.
In recent months, Mr Otedola has also made other high-profile investments outside the banking sector, including the acquisition of a luxury residence in London’s exclusive Mayfair district, further expanding his international real estate portfolio.
He is also believed to have participated in a financing arrangement involving the Dangote Refinery, providing funds to support its working capital needs as the facility scaled up operations.
