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Energy

OANDO explains why it has delayed the release of its Q3 unaudited financial statement

OANDO stated that its inability to file its Q3 2020 financials is as a result of the indefinite suspension of the company’s 2018 AGM.

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OANDO Plc has disclosed the reason why the integrated oil giant has delayed the release of its third (Q3) Unaudited Financial Statement for 2020.

The company stated that the inability of the oil company to meet its 2020, Q3 filing of accounts obligation, which was due on November 20, 2020, is as a result of the indefinite suspension of the company’s 2018 Annual General Meeting (AGM).

This was disclosed in a notification by OANDO for shareholders and stakeholders, which was sent to the Nigerian Stock Exchange (NSE) on December 7, 2020.

The suspension of the AGM of the company by the Securities and Exchange Commission (SEC) follows the Ex-parte Oder of the Federal High Court, Ikoyi, Lagos, in a suit involving the Group Chief Executive Officer of OANDO, Wale Tinubu & Anor vs Security and Exchange Commission & Anor.

The statement from OANDO partly reads, ‘’Pursuant to the directive of the Nigerian Stock Exchange (NSE) this is to update OANDO Plc’s shareholders and stakeholders of the delay in the release of the company’s 2020 Q3 unaudited financial statements (2020 Q3 UFS) by the due date of November 20 2020 (as extended) and as prescribed by the NSE rules on filing of accounts and treatment of default filing.’’

‘’The inability of the company to meet its 2020 Q3 UFS NSE Filing of Accounts obligation by the stipulated due date is as a result of the indefinite suspension of the company’s 2018 Annual General Meeting (AGM).’’

What you should know

It can be recalled that on July 20, 2020, through an official press statement, OANDO had informed its shareholders that the Security and Exchange Commission notified the public and OANDO on Monday, June 10, 2019, that further to the Ex-parte order of the Federal High Court, Ikoyi, Lagos in Suit No: FHC/L/Cs/910/19 in Mr Jubril Adewale Tinubu & Anor v Securities & Exchange Commission & Anor, it had suspended the company’s 2018 AGM till further notice.

OANDO noted that due to SEC’s suspension of its AGM, the company has been unable to appoint Auditors to begin an audit exercise into the company’s 2019 accounts. In addition to this, the suspension has also led to the inability of the Directors to lay before the shareholders for approval the following;

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  • 2018 Audited Financial Statements
  • The shareholders’ inability to re-appoint the auditors of the company to hold office for the 2019 financial year
  • The inability of the company to meet its 2019 financial year-end NSE Filing of Accounts obligation by the due date of March 31, 2020
  • The inability of the company to meet its 2020 Q1, Q2 and Q5 UFS NSE Filing of Accounts obligations by their respective stipulated dates

The action by SEC follows the alleged discovery of infractions in the management of the oil firm after the conduct of a forensic audit due to receipts of 2 petitions from Dahiru Mangal and Ansbury Incorporated. Some of these infractions include alleged corporate governance lapses, internal controls failure, suspected market abuse, insider dealings and issues arising from the sale of a subsidiary, payment of interim dividends despite liquidity constraints and so on.

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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    Energy

    BUA Group awards contract for polypropylene plant in its refinery project

    The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

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    BUA Group chairman, Abdulsamad Rabiu, African Continental Free Trade Agreement, AfCFTA, CCNN

    Nigeria’s leading indigenous conglomerate, BUA Group has announced that it has signed a contract agreement with Lummus Technology for the establishment of a polypropylene plant in its refinery and petrochemical project.

    The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

    The Chairman of BUA Group, Abdul Samad Rabiu, while disclosing the contract agreement, expressed confidence in the capacity and technical expertise of Lummus Technology to deliver a best-in-class project.

    READ: BUA says its export-focused sugar project will create jobs and checkmate price hike

    What the Chairman of BUA Group is saying

    Rabiu in his statement said, “We are pleased to sign this polypropylene contract for our BUA refinery and petrochemicals project with Lummus Technology, a world leader in delivering polypropylene solutions, which will solve the increasing demand for high-performance grade polypropylene in Nigeria, the Gulf of Guinea as well as the Sub-Saharan Africa Region.

    “We are confident in the capacity and technical expertise of Lummus Technology to deliver a best-in-class, 285,000 tpy polypropylene unit for our refinery project scheduled to come on stream in 2024.’’

    READ: Dangote, BUA reconcile over sugar plant dispute after meeting with Ganduje, others

    What the President/Chief Executive Officer of Lummus Technology is saying

    On his part, the President/Chief Executive Officer of Lummus Technology, Leon de Bruyn, said that he was looking forward to working with BUA refinery on the project.

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    Leon said, “We look forward to working with BUA Refinery on this critical project and supporting the first Novolen polypropylene unit in Nigeria. Our world-class Novolen technology is well suited to meet Nigeria’s increasing demand for the growing petrochemical products market.

    It offers a flexible range of industry-leading products for all PP applications, and the industry’s lowest overall capital and operational costs while providing customers with high process reliability and flexibility in responding to market needs.”

    READ: BUA Group, French company announce progress in 200,000 bpd refinery project

    What you should know

    Lummus Novolen Technology GmbH licenses polypropylene technology and provides related engineering and technical support/advisory services. Novolen also supplies NHP® catalysts for the production of high-performance polypropylene grades in the Novolen process, and NOVOCENE® metallocene catalyst for the production of special polypropylene grades.

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    Currencies

    How rise in oil prices will impact exchange rate

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

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    Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

    Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

    Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

    Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

    Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

    READ: Nigeria records highest trade deficit since 1981

    Why oil price is rising

    The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

    • Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
    • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

    What it means for the exchange rate

    Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

    This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

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    • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
    • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
    • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

    READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

    The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.

    Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.

    However, the inclusivity of this growth may still be in question.

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