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Energy

BOC Gases Nigeria Plc announces proposed divestment by major shareholder, BOC Holdings

BOC Gases Nigeria Plc, has announced the proposed sale of the controlling equity interest in the firm by BOC Holdings UK.

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Industrial gas multinational, BOC Gases Nigeria Plc, has announced the proposed sale of the controlling equity interest in the firm by BOC Holdings UK.

BOC Gases Nigeria said that BOC Holdings, which holds about 249,746,823 ordinary shares, which represents 60% of the issued share capital in the company, has entered into a binding share purchase agreement with TY Holdings Limited on November 16, 2020.

This disclosure was made in a notification sent to the Nigerian Stock Exchange (NSE) by BOC Gases Nigeria Plc and signed by its Company Secretary, Gabinus Oriseh, on November 16, 2020.

BOC Gases in its notification stated, “BOC Gases Nigeria Plc (BOC Nigeria or the Company) hereby notifies the Nigerian Stock Exchange (The NSE) that the company has been informed by BOC Holdings (BOC UK), the holder of 249,746,823 (Two Hundred and Forty-Nine Million, Seven Hundred and Forty-Six Thousand, Eight Hundred and Twenty-Three) ordinary shares of the company, which represents approximately 60% of the issued share capital in the company, that BOC UK has entered into a binding share purchase agreement dated 16 November 2020 with TY Holdings Limited of (i) the entire shareholding BOC UK holds in BOC Nigeria and (ii) certain claims owing by BOC Nigeria to BOC UK and certain other members of the Linde Plc Group (the Proposed Transaction).”

BOC Gases also states that the Proposed Transaction which is currently at the preliminary stage is subject to the requisite regulatory approvals being obtained from the NSE, the Security and Exchange Commission (SEC), and the Federal Competition and Consumer Protection Commission in accordance with the share purchase agreement.

BOC Gases Nigeria Plc which was established in Oshodi Isolo, Lagos, under the name of Industrial Gases Plc (Nigeria) Limited (IGL) in 1959, is the market leader in West Africa for production and distribution of industrial gases, including argon, nitrogen, carbon dioxide, and oxygen, as well as welding products.

In 1997 Industrial Gases Plc changed to BOC Gases Nigeria Plc. In 2006, The Linde Company AG, a global leader in gases, engineering, and technology solutions, acquired 60% of BOC Gases Nigeria Plc with the balance being held by Nigerian shareholders.

As a member of The Linde Group, BOC Nigeria also has access to the continent’s biggest industrial gases and welding products group, African Oxygen Limited (Afrox), which operates in South Africa and 10 other African countries.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Business News

Nigeria’s revenue crisis may further worsen as India cuts oil imports by $39.5 billion

The revenue to be earned by Nigeria has come under further threat due to India’s drop in crude oil importation.

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Now that oil is recovering, when will naira recover?

The revenue to be earned by Nigeria has come under further threat due to India’s drop in crude oil importation.

Data from India’s Petroleum Planning and Analysis Cell showed that the country, which took over from the United States as Nigeria’s largest crude oil importer, reduced crude oil imports by $39.5 billion in April, compared to the same time the previous year.

According to a report from Punch, the Indian High Commission in Nigeria said that India’s crude oil imports from Nigeria in 2020 amounted to $10.03 billion, representing 17% of Nigeria’s total crude exports for the year.

READ: The implications of India’s recent ban of its seafarers off Nigeria’s waters

India has been badly hit by a third wave of the coronavirus pandemic which led to a spike in infections in April and lockdown in major cities with the attendant negative effect on Nigeria’s oil sales.

The NNPC was prompted to drop the official standard price of its main export streams, Bonny Light, Brass River, Erha, and Qua Iboe, by 61-62 cents per barrel, below its April 2021 prices. They traded at $0.9, $0.8, $0.65, $0.97 per barrel respectively, below international benchmarks, as Oilprice.com showed.

India had been a major buyer of the not-too-light and not-too-heavy Nigerian crude that suited its refiners with the Indian Oil Corporation’s refineries reported to be operating at 95% capacity in April, down from 100%.

READ: Nigeria needs urgent economic diversification – AfDB

An official at the IOC was quoted as saying, “If cases continue to rise and curbs are intensified, we may see cuts in refinery runs and lower demand after a month.”

India reportedly bought more American and Canadian oil at the expense of Africa and the Middle East, reducing purchases from members of the Organisation of Petroleum Exporting Countries (OPEC) to around 2.86 million barrels per day.

Bottom line

This is not good news for Nigeria which is facing a serious revenue crisis as a result of a drop in crude oil receipts.

The federal government is also being forced by the prevailing realities to consider cutting the cost of governance and reducing the salaries of government workers. The latter proposal has, however, been criticized by various stakeholders.

A slump in crude oil demand from Nigeria’s major buyer will further worsen the economic crisis the country is facing having just marginally recovered from a recession in the last quarter of 2020.

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Business News

Oil market reacts as Colonial Pipeline cyber attack affects prices

WTI oil futures are currently up by 1.34% (WoW) to $65.35 and the Brent oil futures are currently up by 1.87% (WoW) to $68.82.

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Sequel to the cyber-attack that hit top U.S. fuel pipeline operator, Colonial Pipeline Co., the price of oil has started to improve. During the Asian session on Sunday, WTI oil opened at $65.52, representing a 0.95% gain from Friday’s $64.9, when the incident happened.

WTI oil futures are currently up by 1.34% (WoW) to $65.35 and the Brent oil futures are currently up by 1.87% (WoW) to $68.82.

Colonial Pipeline was forced to shut down its entire operation after the cyberattack. The company so far has given no timeline as to when the pipeline will begin its operation.

“It’s an all-hands-on-deck effort right now… we are working closely with the company, state and local officials, to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions in supply,” U.S. Commerce Secretary, Gina Raimondo said.

The pipeline is responsible for supplying nearly half of all the fuel consumed on the U.S. East Coast and provides refined products to more than 50 million Americans. Because of this, oil prices are likely to increase at several fuel distribution points, including Wilmington in North Carolina, Charleston in South Carolina, and Savannah in Georgia, Tank Tiger CEO, Ernie Barsamian told Bloomberg.

The U.S. government has issued emergency legislation on Sunday, relaxing rules on the fuel being transported by road. The legislation allows for drivers in 18 states to work extra or more flexible hours when transporting refined petroleum products. The temporary waiver issued enables oil products to be shipped to as far as New York but there are worries that this may not be enough to cover demand. This indicates that the pipeline may not be fully operational for some time.

The attack comes as the U.S. COVID-19 vaccination rate is improving. Americans are once again commuting to the office, planning major travel for the first time and booking flights. A prolonged disruption along the pipeline system threatens to send average U.S. gasoline prices above $3.00 a gallon for the first time since October 2014, further encouraging fears of inflation as commodity prices rally worldwide.

In the meantime, fuel producers in the U.S. are weighing options for how to ship their products to the Northeast in case Colonial isn’t restored quickly. Traders and fuel shippers are seeking vessels to deliver gasoline that would have otherwise been shipped on the pipeline while others are securing tankers to temporarily store gasoline in the U.S. Gulf in the event of a prolonged shutdown.

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