Economy

US tackles OPEC over rising Oil prices

Joe Biden, US President

—-rallies allies to saturate global market with excess supply

Eyewitness reporter with agency report

Amidst controlled supplies of oil in the international market by the Organisation of Petroleum Exporting Countries(OPEC) and its allies( OPEC +), which has raised global oil prices, the United States of America (USA) has perfected a plan to crash the soaring oil prices.

To achieve this, the US has beckoned on its allies to join it in releasing their strategic oil reserves that will saturate the global oil market with excess supply and crash the galloping prices of crude.

The Joe Biden administration came to this conclusion as the last resort after its appeal to OPEC and its allies, OPEC+, to raise production quota to boost oil supplies failed.

Consequently, governments from some of the world’s biggest economies may have agreed with the US in principle when they said they were looking into releasing oil from their strategic reserves, after a rare US request for a coordinated move to cool global energy prices ahead of a meeting of major oil-producing nations.

The Biden administration has asked a wide range of countries, including China for the first time, to consider releasing stocks of crude.

Other major consumers India, Japan and South Korea were also involved in discussions.

As the world economy rebounds from the pandemic, Washington and other nations have been frustrated that producers in OPEC+, the Organization of the Petroleum Exporting Countries and allies such as Russia, have rebuffed US requests to speed up additional oil supplies.

OPEC nations, for their part, have said that world economies remain too fragile to warrant increasing supplies quickly.

To that end, the market slumped on Friday after Austria announced that it would reimpose a full nationwide lockdown due to soaring coronavirus cases, and Germany, Europe’s largest economy, may soon follow suit.

International benchmark Brent was down 2.7 percent to US$79.11 (RM330) a barrel, the lowest since early October.

The market has been weakening for several weeks as investors have started to anticipate an increase in supply worldwide.

With gasoline prices and other costs rising, Democratic US President Joe Biden also faces political pressure ahead of midterm congressional elections next year.

A Reuters poll in October showed 67 percent of US adults agreed that inflation is a very big concern.

Members of Biden’s national security team had discussed the need to meet fuel demand, White House spokesperson Jen Psaki said.

“That is an ongoing conversation and one we are having with a number of partners,” she added.

OPEC+ plans to meet on December 2nd, 2021.

The group has been raising output by 400,000 barrels per day (bpd) per month, gradually unwinding record production cuts made in 2020 when the pandemic dissipated fuel demand.

This week, Secretary-General Mohammad Barkindo said OPEC expects an oil supply surplus to begin building next month.

Other countries have been pressing OPEC for some time, including China and India.

“This is not a case of supplies not being available,” Hardeep Singh Puri, India’s Oil Minister, told a conference in Dubai on Wednesday.

“There are five million barrels a day of supplies available which have not been released for whatever reason.”

While OPEC+ has been raising oil output by 400,000 bpd per month since July, the producer group still has about 3.8 million bpd in supply cuts that it has not yet returned to the market.

Several of the group’s members have been unable to meet production targets due to years of under-investment.

“Half of (OPEC+’s) members can’t meet their quotas given their own under-investment,” Goldman Sachs analysts said.

OPEC+ in April 2020 cut output by more than 10 million barrels a day in response to the swift spread of the coronavirus pandemic.

China’s state reserve bureau told Reuters it was working on a release of crude oil reserves, but declined to comment on the US request.

It would also mark the first time that China, the world’s No. 2 oil consumer and largest importer, would be involved in a coordinated release with the United States.

China held its first-ever public auction of oil reserves in September.

Consultancy Energy Aspects said in a note to clients that Beijing is expected to release another 10 million to 15 million barrels of crude from its reserves in eastern Zhoushan in its next auction round.

“Any oil released from the Chinese SPR needs to be refilled within 90 days,” Energy Aspects said.

“The market should focus on where these countries will find crude to refill these tanks given just how low stocks are.”

The United States has the largest strategic reserve at more than 600 million barrels.

The US SPR was set up in the 1970s after the Arab Oil Embargo to ensure the nation had adequate supply to weather an emergency.

In the last several years, the shale boom has pushed US output to rival that of Saudi Arabia and Russia.

That has enabled the United States to become less dependent on energy imports from other nations, particularly members of OPEC.

The United States and its allies have coordinated strategic petroleum reserve releases before, such as in 2011 when supplies were hit by war in OPEC member Libya.

Economy

CBN fines Fidelity bank, Zenith Bank, First bank, UBA, five others N1.35b for hoarding cash at Xmas

Funso OLOJO

The Central Bank of Nigeria(CBN) has wielded the big stick over nine Deposit Money Banks(DMB) who failed to dispense cash from their Automated Teller Machines(ATM) during the Christmas and new year period in 2024.

According to the press statement released on Tuesday and signed by the Acting Director of Corporate Communications at the CBN, Mrs Hakama Sidi Ali, the affected nine Banks were fined N150millon each, totalling N1.35 billion.

The sanctioned banks include Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc.

The apex bank said it sanctioned the banks following spot checks that revealed non-compliance with the apex bank’s cash distribution guidelines and after after repeated warnings.

The fines will be directly debited from the banks’ accounts with the CBN.The CBN, in the statement, emphasised the regulator’s commitment to ensuring seamless cash availability.

The statement read, “In a clear message of zero tolerance for cash flow disruptions, the Central Bank of Nigeria has sanctioned Deposit Money Banks for failing to make Naira notes available through automated teller machines, during the yuletide season.

“Each bank was fined N150m for non-compliance, in line with the CBN’s cash distribution guidelines, following spot checks on their branches.

” The enforcement action follows repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand.

“The affected banks include Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc.”

Economy

EFCC under fire over failure to disclose identity of ex- government official owner of forfeited Abuja estate

Funso OLOJO

Enraged Nigerians have taken a swipe at the Economic and Financial Crimes Commission (EFCC) for keeping silent on the identity of a “former government official” who owns 753 units of duplexes on a 150, 500 square metres in Abuja which the commission said was from proceeds of corruption and forfeited to the Federal Government.

However, in a statement on Monday December 2nd, 2024, the anti- graft agency announced with glee the final forfeiture of the estate to the federal government.

According to the EFCC, the forfeiture order was made by Justice Jude Onwuegbuzie, on Monday, December 2, 2024 when he gave a ruling on the EFCC application that the gigantic estate be forfeited to government.

The estate is in Abuja measuring 150,500 square metres and containing 753 Units of duplexes and other apartments.

“This is the single largest asset recovery by the EFCC, since its inception in 2003.

” The Estate rests on Plot 109 Cadastral Zone C09, Lokogoma District, Abuja” the statement declared.

The commission said the forfeiture of the property to the federal government by the owner who was simply described as “a former top brass of the government” was pursuant to EFCC’s mandate and policy directive of ensuring that the corrupt and fraudulent do not enjoy the proceeds of their unlawful activities.

In this instance, the Commission relied on Section 17 of the Advance Fee Fraud And Other Fraud Related Offences Act No 14, 2006 and Section 44 (2) B of the Constitution of the 199 Constitution of the Federal Republic of Nigeria to push its case.

Ruling on the Commission’s application for the final forfeiture of the property, Justice Onwuegbuzie held that the respondent have not shown cause as to why he should not lose the property, “which has been reasonably suspected to have been acquired with proceeds of unlawful activities, the property is hereby finally forfeited to the federal government.”

The road to the final forfeiture of the property was paved by an interim forfeiture order, secured before the same Judge on November 1, 2024.

The government official which fraudulently built the estate is being investigated by the EFCC.

The forfeiture of the asset is an important modality of depriving the suspect of the proceeds of the crime.

The justification for the forfeiture is derived from Part 2, Section 7 of the EFCC Establishment Act, which stipulates that the EFCC “has power to cause investigations to be conducted as to whether any person, corporate body or organization has committed any offence under this Act or other law relating to economic and financial crimes and cause investigations to be conducted into the properties of any person if it appears to the Commission that the person’s lifestyle and extent of the properties are not justified by his source of income.”

However, the action of the anti graft agency has attracted scathing remarks from members of the public who were enraged by the failure of the commission to name and shame the owner of the forfeited property.

Nigerians, who took to their X handle, lambasted the EFCC, describing the non disclosure of the owner of the estate as inimical to the fight against corruption.

They disclosed that naming and shaming the owner would have sent a strong signal to all corrupt individuals, both in government and out of government of the genuine intentions of the EFCC to fight corruption.

The enraged respondents inquired that if the EFCC could quickly name and display the pictures of Internet fraudsters otherwise known as “Yahoo boys” publicly, they saw no justification for covering the identity of this ” ex government official”

Nevertheless,the Commission’s Executive Chairman, Mr. Ola Olukoyede, has repeatedly described asset recovery as pivotal in the fight against corruption, economic and financial crimes and a major disincentive against the corrupt and the fraudulent.

Addressing members of the House of Representatives Committee on Anti-corruption recently, he said, “If you understand the intricacies involved in financial crimes investigation and prosecution you will discover that to recover one billion naira is war.

“So, I told my people that the moment we start investigation we must also start asset tracing because asset recovery is pivotal in the anti-corruption fight; and one of the potent instruments that you can deploy as an anti-corruption agency for an effective fight is asset tracing and recovery.

“If you allow the corrupt or those that you are investigating to have access to the proceeds of their crime, they will fight you with it.

” So one of the ways to weaken them is to deprive them of the proceeds of their crime. So, our modus operandi has changed simultaneously.

“The moment we begin investigation, we begin asset tracing. That was what helped us to make our recoveries.”

Economy

NNPCL signs 10- year deal to supply gas to Dangote Refinery

Funso OLOJO

The NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has successfully executed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.

The agreement, signed by the Managing Director, NGML, Barr. Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote on Tuesday at the Corporate Head Office of Dangote in Falomo, Lagos State, outlines the supply of natural gas for power generation and feedstock at the Dangote Refinery, in Ibeju-Lekki, Lagos State.

This major milestone is in line with President Bola Ahmed Tinubu’s policy of utilizing Nigeria’s abundant gas resources towards revamping the nation’s industrial growth and kickstarting its economic prosperity.

This development, which sees a huge investment of this nature penned with zero capital expenditure (CAPEX) outlay, has been described by many as unprecedented in the history of NGML or any gas Local Distribution Company (LDC) in the country.

Under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), 50MMSCF/D being firm supply and the rest 50MMSCF/D, interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.

This collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization.

NNPC Ltd., through NGML, its gas marketing subsidiary, continues to lead efforts in promoting the use of domestic gas to support industries and businesses nationwide.

The agreement represents a milestone for both NNPC Ltd. and Dangote Refinery, aligning with their shared commitment to boosting local production and providing vital products for the benefit of all Nigerians.

It is also a further proof of NGML’s unwavering commitment to business excellence and fulfilling NNPC Ltd.’s core mandate of ensuring Nigeria’s energy security through the execution of strategic gas projects across the country.