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Respite for Nigeria as Exxon Mobil and Shell lose $1.8 billion arbitration award  

Exxon Mobil Corporation and Royal Dutch Shell Plc have lost bids to revive a $1.8 billion arbitration award against Nigeria. 

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Exxon Mobil Corporation and Royal Dutch Shell Plc have both lost their bids to revive a $1.8 billion arbitration award against Nigeria 

According to Reuters, a U.S District Judge, William Pauley, rejected Exxon Mobil and Shell’s move to revive the dispute, citing public policy and due process considerations in deciding not to enforce the October 2011 award against Nigerian National Petroleum Corp (NNPC), which was subsequently set aside by courts in Nigeria. 

The details: Essentially, the case stemmed from a dispute over a 1993 contract to extract oil near Nigeria’s coastline. Also, Exxon Mobil and Shell claimed that the award had grown to $2.67 billion (interest inclusive) since November 2018.  

[READ MORE: NNPC clears $833.57 million debt owed to Exxon Mobile’s subsidiary]

According to the judgement delivered by Pauley in a 50-page document, though the court has the inherent authority to deliver judgement in appropriate fashion, the case filed by Exxon and Shell lacked merit 

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Pauley wrote, “While this court may have inherent authority to fashion appropriate relief in certain circumstances, exercising that authority to create a $1.8 billion judgment is a bridge too far.

“Exxon and Shell executed a contract in Nigeria with another Nigerian corporation containing an arbitration clause requiring any arbitration to be held in Nigeria under Nigerian law, and it then sought to confirm the award in Nigeria.” 

Details in the court papers show that the 1993 contract anticipated that Exxon and Shell affiliates would invest billions of dollars to extract oil from the Erha field, about 60 miles (97 km) off Nigeria’s coast, and share profits with NNPC. 

Meanwhile, the affiliates, Esso Exploration and Production Nigeria Ltd and Shell Nigeria Exploration and Production Co Ltd, accused NNPC of unilaterally “lifting” more oil than was contractually allowed, at the request of the Nigerian Government, depriving them of billions of dollars of oil. 

Exxon Mobil kicks: Following the judgement, Exxon spokesman Todd Spitler said the Irving, Texas-based company disagreed with the decision and was evaluating its next steps. On the other hand, Shell and its lawyers did not respond immediately to requests for comment. 

Meanwhile, NNPC’s legal representative, Cecilia Moss, stated that NNPC was very pleased with the decision, and was always confident that there was no basis for a U.S. court to confirm the award 

[READ ALSO: ExxonMobil finds a foe in Femi Falana following the firm’s N684 billion debt mess]

In the meantime, this constitutes a relief for Nigeria as the country is still battling the over $9 billion (N3.5 trillion) judgment involving the country and a British Firm – Process and Industrial Developments Ltd (P&ID). 

 

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Tech News

Facebook to open Lagos office in 2021

When the social media giant comes to Nigeria, it will be its second office on the African continent.

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Social Media giant, Facebook announced it would open an office in Lagos in 2021, its second office in the continent and the first in Africa to house software engineers.

This was announced by Facebook Program Manager, Chimdindu Aneke on social media. “We are opening a Facebook office in Lagos, Nigeria later in 2021,” he said.

He added that the office would be the first in Africa by Facebook for the purpose of engineering and “building for the future of Africa and beyond”.

Media aide to the Presidency, Tolu Ogunlesi quoted Facebook saying, “As part of its continued commitment and ongoing investment in Africa, Facebook today announced it will be opening an office in Lagos, Nigeria – its second office on the African continent.”

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In 2019, Facebook’s biggest market in Africa was Nigeria with 33 million monthly active users.

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Business

Nigeria among countries to be worst hit by food crisis globally

Nigeria, others were listed as countries with the worst deteriorations in acute hunger in recent months.

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7 million Nigerians to experience food shortage

Nigeria has emerged as one of the countries to be most hit by food crisis across the globe in the face of the coronavirus pandemic which had worsened the already bad situation.

This disclosure is contained in a report by the United Nation’s Food and Agriculture Organization (FAO).

The report from the FAO also shows that the Democratic Republic of Congo is emerging as the country with the world’s largest food crisis in terms of absolute numbers, with Burkina Faso listed as the country with the worst deteriorations in acute hunger in recent months.

The food crisis is made worse in Nigeria by the longstanding religious and ethnic conflicts and even organized crimes by some bandits, which has greatly affected farmers working on their farmlands.

In addition to these, the farmers were already contending with the issue of flooding or drought, which has negatively been impacting on the agricultural sector in a period the country is desperate and very desirous of economic diversification. The coronavirus pandemic has triggered a surge in food prices as can be seen in the reports released by the National Bureau of Statistics (NBS), in a country that imports over 10% of its food supply.

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With a population of over 200 million people, Nigeria is the most populous country in Africa, which is regarded as the world’s most food-insecure continent. This is made worse as importers of food items struggle to gain access to dollars for their imports due to scarcity of foreign exchange which is triggered by the crash of oil prices and low foreign inflow.

This is expected to be exacerbated by the recent order by President Muhammadu Buhari to the Central Bank of Nigeria, to stop the allocation of foreign exchange to importers of food items.

The Governor of Niger State, Abubakar Sani Bello, warned in April, “We are heading toward famine and starvation.”

The FAO report which states that Congo has about 21.8 million people that are acutely food insecure, also points out that Burkina Faso has witnessed an almost 300% uptick in the overall number of people experiencing acute hunger since the start of 2020.

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Around the World

US government to ban WeChat and TikTok from app stores

Chinese-owned social media apps are facing a ban in the US over national security concerns.

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The United States government says it will ban the services of Chinese tech giants, WeChat and TikTok, from online mobile application stores in the U.S. It also plans to prohibit any funds transfer/payment services through the WeChat mobile application.

This was announced by the U.S Commerce Secretary, Wilbur Ross, in a statement on Friday, following President Donald Trump’s Executive Orders (E.O.) 13942 and E.O. 13943, on the 6th of August.

“In response to President Trump’s Executive Orders signed August 6, 2020, the Department of Commerce (Commerce) today announced prohibitions on transactions relating to mobile applications (apps) WeChat and TikTok to safeguard the national security of the United States,” said Wilbur Ross.

He added that the Chinese Communist Party (CCP), has proven it has the means and the motive to use Chinese tech apps, to threaten America’s national security foreign policy, and the economy of the U.S.

He said the following transactions will be prohibited from September 20th for WeChat and November 12th for TikTok

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  • Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates, through an online mobile application store in the U.S.
  • Any provision of services through the WeChat mobile application, for the purpose of transferring funds or processing payments within the U.S.

Mr. Ross said that with the Executive Order, the US government has taken a ‘significant action’ in fighting China’s malicious personal data breach on American citizens, and also promote democratic rule-based norms, and aggressive enforcement of U.S. laws and regulations.

The U.S government announced that further prohibitive measures, relating to both companies may be announced in the future.

“Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities.”

President Trump has given until November 12, to resolve the TikTok security concerns of the US. He added that the prohibitions may be lifted, if they are addressed.

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