By Adedapo Adesanya
Oil prices returned to the bullish territory on Monday after a heavy price crash last Friday amid fears over the threat to demand triggered by the new Omicron COVID-19 variant.
The international benchmark, Brent crude futures, gained $1.02 or 1.39 per cent to trade at $74.46 per barrel, while the United States’ benchmark, West Texas Intermediate (WTI) crude, gained 89 cents or 1.27 per cent to sell at $70.84 per barrel.
Last week, the market panicked over Omicron, the new heavily mutated coronavirus variant detected in South Africa, dropping more than 10 per cent over fears sparked by what the global health authority – the World Health Organisation (WHO) classified as a “variant of concern.”
However, Monday breathed a fresh air of relief as traders, investors, and speculators awaited scientific evidence of whether Omicron should be as feared as the oil market appeared to fear at the preceding session.
WHO declared on Sunday that it was not clear yet if Omicron was more transmissible or if infection with Omicron causes more severe disease compared to infections with other variants, including Delta.
The market also found support when the Organisation of the Petroleum Exporting Countries and allies (OPEC+) said there was no panic about the new variant.
Russia and Saudi Arabia, who lead the coalition, signalled there was no need for OPEC+ to race to adjust oil output policy this week.
Russian Deputy Prime Minister Alexander Novak was quoted as saying that he sees no need for urgent action on the oil market over Omicron, downplaying the possibility of changes to an OPEC+ oil supply deal this week.
“There is no need for hasty decisions,” he was quoted as saying, adding “We will additionally discuss with the OPEC+ countries the market situation and if any measures are warranted,” Mr Novak said.
On his part, the Saudi energy minister Prince Abdulaziz bin Salman al-Saud said he was not worried about the Omicron, but declined to comment on OPEC+ plans.
OPEC+ will hold online meetings this week to decide on oil production policy.
The group has been reducing its curbs on output by 400,000 barrels per day of oil per month as it winds down record cuts from last year when it cut production by as much as 10 million bpd to address lower demand caused by lockdowns.
OPEC+ has some 3.8 million barrels per day of cuts still in place and some analysts have suggested the group could pause its output increases.
President Joe Biden urged Americans not to panic about the new COVID-19 variant and said the United States was working with pharmaceutical companies to make contingency plans if new vaccines were needed.
Meanwhile, the Biden administration’s release of Strategic Petroleum Reserves (SPR) has proven to have little impact on the underlying price of oil, following the initial price reaction in oil last week after the government flooded the market with 50 million barrels.
On the back of this, investment bank, JPMorgan thinks Brent will hit $120 per barrel in 2022, and could even overshoot to $150 per barrel in 2023, representing a potential upside of as much as 100 per cent from current levels.
Nigerian Breweries Lists Additional Shares on Stock Exchange
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited has admitted additional shares of Nigerian Breweries Plc on its trading platform, a notice from the exchange has confirmed.
The new stocks were issued to shareholders of the brewery giant as part of their dividend payment. They are those who opted to exchange their cash payment for shares of the firm.
According to the disclosure from the NGX on Monday, Nigerian Breweries listed a total of 78,929,849 ordinary shares of 50 kobo on the platform, increasing its total issued and fully paid-up equities to 8,075,831,900 ordinary shares from 7,996,902,051 ordinary shares.
“Additional 78,929,849 ordinary shares of 50 kobo each of Nigerian Breweries Plc were today, Monday, January 24, 2022, listed on the daily official list of the Nigerian Exchange Limited.
“The additional shares listed on NGX arose from Nigerian Breweries scrip dividend election scheme.
“With this listing of the additional 78,929,849 ordinary shares, the total issued and fully paid-up shares of Nigerian Breweries Plc has now increased from 7,996,902,051 to 8,075,831,900 ordinary shares of 50 kobo each,” the statement noted.
Shares of Nigerian Breweries depreciated by 1.46 per cent or 70 kobo today at the stock exchange to close at N47.30, according to data obtained by Business Post.
FG Suspends Fuel Subsidy Removal, to Amend 2022 Budget
By Modupe Gbadeyanka
The federal government has suspended fuel subsidy removal, which was earlier meant to be from July 1, 2022, and will now amend the 2022 Appropriation Act to accommodate the new change.
This action followed the pressure mounted by the Nigeria Labour Congress (NLC), which threatened to embark on a nationwide protest from January 27, 2022.
In the 2022 budget signed into law by President Muhammadu Buhari last month, the provision of petrol subsidy was till June 30, but the labour said fuel subsidy removal at this period of high inflation would be resisted.
On Monday, January 24, 2022, the Minister of Finance, Budget and National Planning, Ms Zainab Ahmed, was at the National Assembly for a meeting with lawmakers.
She explained that due to ongoing consultations, it was agreed that the planned removal of fuel subsidy should be shelved for now.
“Provision was made in the 2022 budget for subsidy payment from January till June. That suggested that from July, there would be no subsidy.
”The provision was made sequel to the passage of the Petroleum Industry Act which indicated that all petroleum products would be deregulated.
“Sequel to the passage of the PIA, we went back to amend the fiscal framework to incorporate the subsidy removal.
“However, after the budget was passed, we had consultations with a number of stakeholders and it became clear that the timing was problematic.
“We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry.
“Mr President does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures.
“One of these includes the rollout of the refining capacities of the existing refineries and the new ones which would reduce the amount of products that would be imported into the country.
“We, therefore, need to return to the National Assembly to now amend the budget and make additional provision for the subsidy from July 22 to whatever period that we agreed was suitable for the commencement of the total removal,” the Minister informed the lawmakers.
The Senate President, Mr Ahmad Lawan, who conveyed the meeting, commended the federal government for the bold step, urging the labour unions to suspend their action.
Also present at the gathering were the Minister of State for Petroleum Resources, Mr Timipre Sylva; the Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mr Mele Kyari; among others.
Stanbic IBTC Finances Ardova LPG Storage Terminal
By Aduragbemi Omiyale
The 20,000 metric tonnes Liquefied Petroleum Gas (LPG) storage terminal being constructed in Ijora, Lagos, by AP LPG terminal, a fully owned subsidiary of Ardova Plc, is being financed by the Stanbic IBTC Infrastructure Fund, Business Post has learned.
In August 2021, Stanbic IBTC closed the first tranche of its N100 billion Stanbic IBTC Infrastructure Fund aimed to support the funding of critical projects in the country with competitive return profiles, sustainable environmental practices, and the potential to positively impact the economy.
Ardova, one of the leading players in the energy sector in Nigeria, keyed into the initiative and on Wednesday, January 19, 2022, the firm performed the groundbreaking ceremony for the construction of the LPG storage terminal, which is expected to be completed in December 2022.
Upon completion, the project will be the largest LPG storage facility in the nation and will ease some of the existing bottlenecks in the value chain for the supply of cleaner and more efficient energy for domestic use (cooking gas) in Nigeria, amongst other strategic benefits.
Speaking at the event, the Group Chief Executive Officer of Ardova, Mr Olumide Adeosun, commended Stanbic IBTC for its commitment to the project, noting that the importance of having formidable partners for project development, planning, execution, and investment support cannot be overemphasised.
“We are pleased to have the support of the Stanbic IBTC Infrastructure Fund for its pioneering role in a transformational project within the LPG value chain, which will undoubtedly accelerate the various energy transition initiatives currently underway at Ardova Plc.
“This support has helped us commence construction of this 20,000 metric tonne LPG storage terminal, which is expected to bring efficiency and reliability of LPG supply to Nigerian consumers as well as create long term value for our shareholders; and for this, we are thankful,” he said.
Mr Adeosun further that, “Beyond the cleaner energy premise, approximately 600 direct jobs will be created during the construction of the project and there is a multiplier effect of about additional 1,400 indirect jobs that will be created during the construction period after which it settles to about 250-300 jobs once the project becomes operational.”
On his part, the CEO of Stanbic IBTC Asset Management, Mr Oladele Sotubo, noted that, “Across the globe, cleaner energy investments have continued to be the focus.”
“Given the environmental sustainability benefits of this project, Stanbic IBTC Infrastructure Fund’s investment philosophy is properly aligned, hence the support for the 20,000 metric tonne LPG storage facility terminal,” he added.
Mr Sotubo applauded Ardova for partnering with Stanbic IBTC Infrastructure Fund and used the opportunity to also commend all the Tranche 1 investors, including institutional investors such as Trustfund Pensions, Veritas Glanvills Pensions, NPF Pensions, Fidelity Pensions, Crusader Sterling Pensions, Agip CPFA, Progress Trust CPFA, AIICO Insurance, and other High Networth Individuals (HNIs), for the confidence reposed in the fund.
He pointed out the impact their investment is making in terms of solving some of Nigeria’s infrastructure bottlenecks, creating jobs while earning returns. “As an organisation, we remain committed to bridging Nigeria’s infrastructure deficit through the provision of investment capital needed to develop projects”, he added”.
The Stanbic IBTC Asset Management Chief Executive highlighted that the Stanbic IBTC Infrastructure Fund remains dedicated to meeting the investment needs of its clients, providing them with the right investment vehicles, opportunities and professional investment services needed to achieve their financial objectives.
He urged institutional investors such as pension fund administrators, insurance companies and asset managers to explore the unique opportunities of the Stanbic IBTC Infrastructure Fund in meeting their long-term financial goals.
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