01 Feb

Daily Watch – Another pipeline bombed, Unilever goes local

  • A crude oil pipeline in Bayelsa State, operated by the local subsidiary of Italy’s Eni was attacked on Thursday night. This is the second major attack on the OPEC member’s installations since an arrest warrant was issued this month for former militant leader Government Ekpemupolo. The hits follow years of relative calm in Nigeria’s oil-producing region after a 2009 amnesty halted a spate of attacks on oil installations and kidnappings of expatriate workers.
  • Nigeria’s external reserves dropped to about $28.2 billion according to data available on the CBN’s website. This is the lowest level it has reported since 2005. The CBN has jealously guarded the exchange reserves by dishing out several policies that are mostly viewed as capital controls, while President Buhari has also vowed not to devalue the naira.
  • Unilever has, in separate meetings with the Senate President, the Minister for Trade and Investment and the Minister for State for Trade and Investment respectively, revealed plans to increase its investment in the country. President of the company,Bruno Witvoet, said at the meetings that Unilever has plans to set up new plants within the country to boost its manufacturing activities in the country. Witvoet also announced that Unilever is working on a backward integration programme, aimed at 100 per cent local production of needed raw materials for manufacturing.
  • The Supreme Court has declared Seplat Petroleum winner in the case brought against it by Brittania-U over OMLs 53 and 55 sold to it by Chevron Nigeria (also a defendant in the case). The Supreme Court had ordered all parties to maintain the status quo with respect to the action brought by Britannia-U in its bid to stop Chevron from selling oil mining assets OML52, 53 and 55 to Seplat. Seplat was to acquire 40% working interest in OML 53 and effective 22.5% working interest in OML 55 from Chevron in February 2015 before Brittania-U took it to court claiming it should have been the preferred bidder. Seplat shares gained 24% at the end of last week.
  • FCMB has released its 2015 9-month results which show that pre-tax profits dropped 84% to N2.5 billion compared to the N16.7 billion reported in the same period in 2014. The bank had weeks ago issued a profit warning that results were going to be bad. Analysts say that the results were expected due to bad loans in the oil and gas sector. FCMB had in preparation made a loss provision of about N15 billion for the first 9 months of the year. The loan provision almost wiped out N17.8 billion in net operating income for the period.