The Nation Newspaper

Tag: United States (U.S.)

  • Oil dips on U.S, China tariffs trade war

    NIGERIA’s N8.91 trillion ($29billion) came under severe threat as oil prices dipped on Monday after new tariffs imposed by the United States (U.S) and China came into force. This raised concerns about a further hit to global growth and demand for crude.

    Brent crude slipped 16 cents to $59.09 a barrel while U.S. benchmark WTI crude was down seven cents at $55.03 a barrel.

    The National Assembly said the 2019 budget was aimed at consolidating growth and approved a budget deficit of N1.9 trillion, representing 1.37 per cent of the nation’s gross domestic product (GDP).

    The budget was based on estimated crude production of 2.3 million barrels per day (bpd); $60 pb benchmark; and an exchange rate of N305  to the dollar.

    Nigeria, Africa’s largest oil producer and member, Organisation of Petroleum Exporting Countries (OPEC)  grew by its economy by 1.93 per cent last year, its fastest pace since a recession two years earlier, data showed, while annual inflation rate  increased to 11.37 per cent in April 2019 from 11.25 per cent in the prior month.

    Meanwhile, OPEC’s crude production rose last month, the first increase since the group and its allies started a new round of output cutbacks at the start of the year to shore up a weak global market. Nigeria and Saudi Arabia led the boost by the OPEC, which collectively increased by 200,000bpd to 29.99 million bpd, according to a Bloomberg survey.

    The survey is based on estimates from officials, ship-tracking data and consultants including Rystad Energy and JBC Energy GmbH. OPEC and its partners, a 24-nation coalition known as OPEC+, agreed to reduce output by 1.2 million barrels a day at the beginning of 2019 as a faltering global economy and booming U.S. shale-oil production threatened to leave world markets with a glut. That deal replaced a previous round of curbs that began in January 2017.

    Read Also: Oil firms at $59 as US, China tariff hike wanes

    The strategy has struggled to shore up prices against a deteriorating outlook for global growth and a seemingly intractable trade war between the U.S. and China.

    Bigger-than-planned cutbacks by the Saudis are now only just balancing out cheating by other OPEC members.

    Nigeria hasn’t made any of the cuts it pledged, and increased output again in August, by 60,000 barrels a day to 1.95 million, the highest level since early 2016. The West African producer has ramped up production to maximum levels at its new Egina offshore oil field operated by Total SA, according to the International Energy Agency. Russia, the biggest producer outside OPEC in the coalition, has also shown signs of backsliding on its commitments.

    The U.S. began imposing 15per cent tariffs on a variety of Chinese goods on Sunday – including footwear, smart watches and flat-panel televisions – as China put new duties on U.S. crude, the latest escalation in a bruising trade war.

    U.S. President Donald Trump said the two sides would still meet for talks this month. Trump, writing on Twitter, said his goal was to reduce U.S. reliance on China and again urged American companies to find alternative suppliers outside China.

    “Even as President Trump has indicated that scheduled talks between the U.S. and China are still to proceed, the market is more and more resigned to a protracted stand-off between the two countries and will be looking towards central bank easing to shore up risk appetite,” BNP Paribas’ Harry Tchilinguirian said.

    Beijing’s levy of five per cent on U.S. crude marks the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.

    Elsewhere, oil output from members of OPEC rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top exporter Saudi Arabia and losses caused by U.S. sanctions on Iran.

    In the U.S., energy companies cut drilling rigs for a ninth month in a row to the lowest level since January last year.

     

  • Fed Govt joins forces with U.S. to track FBI 77 suspects

    THERE is no respite for the 63 Nigerians on the United States (U.S.) watch list.

    Seventy seven Nigerians were among 80 suspects named by the U.S. Attorney for Central District of California Mr Nick Hanna on August 22 for conniving with others to dupe unsuspecting victims.

    The Federal Government on Monday pledged to support the Federal Bureau of Investigation (FBI) to bring the suspects to justice.

    A 252-count U.S. federal grand jury unsealed by Mr. Hanna, charged the 77 Nigerians with participating in a massive conspiracy to steal millions of dollars.

    It accused the suspects of taking the funds through a Los Angeles-based money laundering network.

    The indictment was unsealed after law enforcement authorities, led by the FBI, arrested 14 suspects across the United States. Eleven of the arrests took place in the Los Angeles region. The FBI has declared a manhunt for those at large.

    Since the news broke, Nigerians have condemned the activities of the cybercrime suspects, for dragging the name of Nigeria in the mud.

    The Nigerian Embassy in Washington DC on Monday said the Federal Government “condemns such criminal acts in all ramifications”.

    The statement signed by Senior Counsellor/Head of Chancery, Mr Mohammed Suleiman, on behalf of Ambassador Sylvanus Nsofor, expressed the government’s “willingness to cooperate with the government of the U.S. in accordance with the laid-down universal human rights and due legal processes in the interest of our nation.”

    It however added that “the Embassy wishes to reaffirm that Nigerians are a generally law-abiding and hardworking people wherever they are, including in the U.S.

    It appealed to Nigerian citizens in the U.S.  ”to remain calm and continue to observe the laws of the host country at all times.”

    The Economic and Financial Crimes Commission (EFCC) had promised to fish out the suspects. EFCC chairman Ibrahim Magu said he suspected that the number of Nigerian suspects would be more than 77 going by the joint operation of the EFCC and the FBI in the past few months.

    He said the EFCC would watch developments and cooperate with the U.S agency on cybercrimes.

    Magu added “We’ll cooperate with other stakeholders and other law enforcement agencies in this country and outside the country like the FBI and the NCA and other law enforcement agencies in the neigbouring countries to make sure we deal with this issue.

    “We’ll also deal with all Nigerians who connive with other Nigerians just like the one that just happened where want to do everything to defraud this country.

    Read Also: US massive wire frauds: EFCC’ll fish out suspects, Magu vows

    “I told you that it was a joint operation here in Nigeria. I don’t have the details now and we have not been contacted but they’ve acknowledged our participation in their release but I do not have the details because what we have is even more than 77 maybe we must have screened some out.

    “Maybe the information they’ve given us did not include the operations they’ve carried both here and America. We need to go through the record to give you the exact figures.

    “When you go outside this country, the search exercise they subject you to the moment they realise you are a Nigerian is humiliating. So if we don’t address this and allow the activities of the 419ers to resume, it will be bad.

    “For us at the EFCC, we’ll continue to cooperate with both within and outside Nigeria to stop this menace. I want you to give us information and we’ll raid all their hideouts.”

    He described the indictment of 77 Nigerians as very sad and unfortunate.

    “It is very sad that the era of this 419ers is coming back. I remember we worked with the American FBI particularly in Lagos and its environment in an operation tagged ‘Wire-Wire’. They (FBI) mentioned that we are one of the agencies that actually participated in the operation and it was very successful.

    “But only to come out with the list of this 77 Nigerians is very unfortunate,”he said.

     

  • Banks face U.S. sanctions over North Korea, Iran deals

    HEAVY fines await banks processing transactions for North Korea and Iran, Adjunct Senior Fellow, Energy, Economics and Security, Centre for a New America Security (CNAS), Peter Harrell, said on Wednesday.

    Such banks risk being cut off from their correspondent banks across the world.

    Speaking at a workshop organised by the Compliance Institute Nigeria (CIN) and CNAS in Lagos, Harrell said that banks have also been advised not to process transactions that are going to any entities or countries that have been sanctioned by the United States (U.S.), European Union (EU) and United Nations (UN).

    North Korea, Iran and Sudan are under the U.S., EU and UN sanctions lists. They were sanctioned for working against the interest of global environment. They are being accused of promoting terrorism, proliferating weapons of mass distraction and threatening world security.

    Harrell said that enforcement cases in recent years showed that violations are more in Middle East and Asia. He said that although the U.S. has not seen a lot of North Korea and Iran trade in Nigeria, but as restrictions in Middle East, Asia and elsewhere tighten up, the North Korea and Iran could be looking for new markets.

    Harrell said that many Nigerian banks are coming under more pressure from their U.S./European correspondent banks on compliance issues because the U.S. and European banks are also under regulatory pressure.

    Read Also: Banks drive lending with salary advance

    He said that banks with international operations tend to invest more on compliance than a bank that is locally focused.

    Harrell said: “We have taught the banks general best practices in sanction compliance, how they should test and screen software, and also understand what their sanction risks are.

    “What can banks do to get ahead of problems and ensure their compliance programmes are best in class? We also looked at specific transactions we are seeing here in Africa from North Korea and general/ best practices on how banks can deal with their due diligence.”

    Continuing, he said the banks need to know the specific due diligence needed on particular transactions to enable them stay safe.

    He said that any bank that fails to comply will face real risk of significant fines that U.S. Government has imposed on banks in Europe, Middle East and Asia.

    “These fines can be in tens of millions of dollars. It is very significant fines for institutions that process prohibited transactions through the U.S.”, he said.

    He went on: “We saw just a month ago, the U.S. sanctioned Russian bank for North Korean transactions. The bank did not have to pay a fine, it was added to the US sanctions list. It was cut off from the United States. That’s a very severe penalty for a financial institution or any company to deal with.

    “Compliance with sanctions costs money. If you are doing a trade finance with Iran, you got to give up that business. The question for the banks is: should it go ahead with the business and get the profit? If you do that, you will be paying fines far higher than the profits you are making from that business. We are talking about negative incentives here than the positive incentives.”

    According to him, the main thing is to get financial institutions in Nigeria understand some tactics that they may be trying to use even if they have not been doing a lot in the last couple of years.

    He said: “It is a pleasure to be here in Lagos, and I will be in Abuja tomorrow (today). The workshop here in Lagos and Abuja, are part of series of workshops we are organizing around the world, to help educate both government officials and the private sector on the sanction issues, particularly around North Korea and Iran.

    “We want to increase knowledge about these issues. We want to make these workshops interesting and informative for banks, telling them how to avoid getting in trouble with regulators. Will help government implement UN polices and Financial Action Task Force recommendations.”

  • Oil prices may dip by $30 on U.S., China trade war

    THERE were fears on Monday that oil prices could take a significant hit and plunge by as much as between $20 and $30 a barrel.

    The dip is in anticipation of China defying the latest United States (U.S.) tariff threat by ramping up imports of Iranian crude oil in open defiance of America’s sanctions on the Asian country.

    Should this happen, oil prices would be in the neighbourhood of $30 per barrel, a development that may hurt Nigeria’s N8.83 trillion budget.

    The budget has been predicated on estimated crude production of 2.3 million barrels a day; oil price of $60 per barrel and an exchange rate of N305 to a dollar.

    The Bank of America (BofA) Merrill Lynch, which was quoted by CNBC, said in a note: “While we retain our $60 a barrel Brent forecast for next year, we admit that a Chinese decision to reinitiate Iran crude purchases could send oil prices into a tailspin.”

    Early on Monday, WTI Crude was down 1.28 per cent at $54.95 and Brent Crude was down 1.24 per cent at $61.12, as the renewed trade war rekindled fears of slowing global oil demand growth.

    Read Also: Dissonances hobbling oil economy

    On July 1, oil prices took a heavy hit after President Donald Trump said that the U.S.-China trade talks would continue in September, while the “U.S. will start, on September 1, putting a small additional tariff of 10 per cent on the remaining $300 billion of goods and products coming from China into our country.”

    China pledged to impose new “necessary countermeasures” to protect its interests after the latest tariff threat, saying Trump’s tariff announcement was “an irrational, irresponsible act,” according to Zhang Jun, the new Chinese ambassador to the United Nations, reported byReuters.

    China’s reaction to the additional U.S. tariffs could include China resuming oil purchases from Iran to undermine the U.S. sanctions and cushion some effects on the Chinese economy from the new tariffs, BofA Merrill Lynch said.

    Beijing has never actually stopped buying Iranian oil after the U.S. removed all sanction waivers for Iran’s customers in early May. China, the single largest buyer of Iranian crude oil before the U.S. sanctions hit the Islamic Republic’s oil exports, continues to import oil from Iran, despite the ‘zero exports’ maximum pressure campaign of the U.S. China has said that it wouldn’t comply with the U.S. sanctions on Iranian exports. Yet, Chinese oil imports from Iran are much lower than they were just a few months ago.

    Last week, Iran called on China and other ‘friendly countries’, as it put it, to buy more crude oil from the Islamic Republic.

  • U.S. to drive Africa’s trade with Prosper Africa

    The United States (U.S.) said has introduced a new initiative designed to boost trade and investment between it and Africa.

    The initiative, Prosper Africa, it explained is a reflection of the U.S. government’s belief that open and transparent economies should determine the future of African countries.

    It also said technology, engineering and mathematics (STEM) held the key to the economic transformation of Nigeria and other countries.

    Its Public Affairs Officer, Russell Brooks, who spoke in Lagos during the Nigerian Youth Drone Academy Workshop at Cedar STEM & Entrepreneurship Hub, Jibowu, Yaba, said STEM education is a big priority for the U.S. government. “We believe that every student throughout the world deserves a high-quality education in STEM in order to enhance their individual possibilities as well as their ability to contribute to making our world a better place,” he said.

    In a statement, the government said Prosper Africa will also expand mutually beneficial trade and investment, increase the self-reliance of African economies, grow the middle class in African countries and improve business climates across the continent.

     

  • IMF: U.S, China trade war threatens global growth

    Ongoing trade war between the United  States (U.S.) and China over tariff hike could slash global economic output by 0.5 per cent next year, the International Monetary Fund (IMF) warned yesterday. The warning is coming ahead the meeting of global finance leaders in Japan this weekend.

    IMF Managing Director Christine Lagarde said in a note for G20 finance ministers and central bank governors that taxing all trade between the two countries, as President Donald Trump has threatened, would cause some $455 billion in gross domestic product (GDP) to evaporate – a loss larger than G20 member South Africa’s economy.

    “These are self-inflicted wounds that must be avoided. How? By removing the recently implemented trade barriers and by avoiding further barriers in whatever form,” she said in the note.

    The IMF said U.S. tariffs and Chinese retaliatory measures put in place thus far, including a recent increase in U.S. tariffs to 25 per cent on a $200 billion list of Chinese imports, could cut 2020 growth by 0.3 per cent. More than half of that impact comes from negative effects on business confidence and financial market sentiment.

    “The fact is that protectionist measures are not only hurting growth and jobs, but they are also making tradable consumer goods less affordable – and disproportionately harming low-income households,” Lagarde said.

    The trade tensions had already contributed to the IMF cutting 0.4 percentage point from its 2019 growth forecast in April to 3.3 per cent.

    Read Also: Union decries IMF’s opposition to minimum wage

    Yesterday, the Fund said incoming data suggested that its expectations were on target for a modest pickup in growth in the second half of this year due to more accommodative monetary policy and economic stimulus measures in China.

    The IMF is predicting 3.6 percent global growth for next year, but said this outlook is vulnerable to trade tensions, uncertainty over Britain’s exit from the European Union (EU), uncertain recoveries in some stressed economies such as Argentina and Turkey.

    If growth falters, the IMF said that policymakers should act in a coordinated fashion including “decisive” actions to ease monetary policy and fiscal stimulus in countries that have available resources. These would be more effective if the policy response was “synchronised” across the globe and coupled with structural reforms aimed at improving economic efficiency, the IMF said.

    Lagarde also argued for stepped-up efforts to strengthen World Trade Organisation (WTO) rules, especially on subsidies, intellectual property protections and trade in services. She cited IMF research showing that liberalising trade in services could add about $350 billion to global GDP in the long run.

  • U.S. suspends Dropbox visa application

    The United States (U.S.) Embassy in Nigeria on Tuesday announced the indefinite suspension of the Dropbox visa application process for Nigerians.

    Diplomatic and government officials would not be affected by the new visa regime, a statement from the embassy clarified.

    The dropbox system has been open to frequent travellers, who are excluded from the interview session.

    Announcing the indefinite suspension of the Dropbox yesterday through a statement, the embassy stated the new regime became effective yesterday.

    It reads: “Effective at the close of business today, Tuesday, May 14, 2019, the U.S. Mission to Nigeria is indefinitely suspending interview waivers for renewals, otherwise known as the “Dropbox” process.  Visa applications will no longer be accepted by DHL in Nigeria.  Those who have already submitted their passports via “Dropbox” to DHL for processing either at the U.S. Embassy in Abuja, or the Consulate General in Lagos, will not be impacted by this change.

    “All applicants in Nigeria seeking a nonimmigrant visa to the United States must apply online, and will be required to appear in-person at the U.S. Embassy in Abuja or U.S. Consulate-General in Lagos to submit their application for review. Applicants must appear at the location they specified when applying for the visa renewal.

    “Processing of diplomatic and official (A, G, and NATO class) visa applications will continue unchanged.

    “Mission Nigeria’s processing procedures are regularly reviewed in order to assess our ability to quickly, efficiently, and securely process visa applications. The U.S. Mission is taking this step to provide more efficient customer service and promote legitimate travel, and will continue to facilitate applications of established travelers to the best of its ability.”

     

  • U.S: Illicit maritime activities threat to Africa’s food security

    The United States (U.S.) yesterday said illicit maritime activities are threats to the acheivement of food security in Nigeria and other African countries.

    It identified illegal fishing, trafficking of weapons, narcotics and people, as well as ongoing threat of piracy as factors that undermine rule of law, food security, and economic development.

    Speaking in Lagos yesterday at the opening ceremony of the 2019 Obangame Express, Director, Directorate of Intelligence, U.S. Africa Command, Rear Admiral Heidi Berg, lauded the commitment of the 33 nations scheduled to participate in this year’s exercise.

    On the occasion were senior leaders from the U.S. Africa Command and the Nigerian Navy, representatives of maritime forces from the Gulf of Guinea, Europe, North and South America, as well as regional and international organisations.

    According to her, illicit maritime activities such as illegal fishing, trafficking of weapons, narcotics and people, as well as the ongoing threat of piracy, undermine the rule of law, food security, and economic development in the region.

    “This exercise is a clear demonstration of the United States’ dedication to combat these illicit activities and help our partners in the Gulf of Guinea to provide security for their resources, their economy, and their people. Obangame Express 2019 will make the region a safe place for maritime commerce and ultimately help increase prosperity of the region,” Rear Admiral Berg said.

  • U.S. pledges commitment to youth empowerment in Nigeria

    The United States (U. S.) has reassured Nigerian youth of more empowerment programmes through planning innovative and life changing programmes.

    The Counselor for Public Affairs U. S.  Embassy, Aruna Amirthanayagam, said this on Tuesday in Abuja at the opening ceremony of an annual workshop for American Spaces Coordinators.

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    The workshop is aimed at equipping the participants with innovative ideas for effective engagements with Nigerian audiences in the 12 American spaces located across Nigeria.

    Amirthanayagam described American Spaces as platforms for engagement, education and empowerment most especially for the youth.

    “American Spaces provides public programming spaces and supports the five core programmes: English language learning, Educational advising, Alumni activities, Cultural programs, and Information about the US.

    “The partner provides a physical space and staff, and the Public Diplomacy section of the U.S. Embassy provides multi-media materials about the United States, training and technical support.

    “ They provide accurate information about the U.S., including education and cultural programs; access to English language resources and connections to alumni.

    “It also provide collected literature of America’s best writers, information about American society, culture, policies, politics, history and business,” he said.

    He explained that the American Spaces programme which first started in Moscow with just two centers had now grown to include over 650 Spaces in 150 countries worldwide.

    He said that Nigeria had the largest centres with currently 14 American Spaces in Nigeria across the country.

    He commended coordinators of the centres across the country

    “Considering the role of American Spaces as platforms for engagement, education and empowerment, they deserve our greatest appreciation for the lasting impact that they are making on youth in Nigeria,” he said.

  • Oil hits highest at $58.37

    Oil hits highest at $58.37

    • NPDC eyes 500,000bpd oil production

    Oil prices hit a more than two-year high yesterday after major producers said the global market was on its way toward rebalancing, while Turkey threatened to cut oil flows from Iraq’s Kurdistan region toward its ports.

    The November Brent crude futures contract was up $1.51, or 2.5 per cent, at $58.37 a barrel, its highest since July, 2015.

    United States (U.S.) West Texas Intermediate crude for November delivery rose $1.02, or two percent, to $51.68 a barrel, close to highs last seen in May.

    “It’s all driven by the idea  that the production cut is starting to work and the rebalance is underway,” said Gene McGillian, director of market research at Tradition Energy in New York.

    Even as both contracts rallied, concerns about U.S. production growth weighed on WTI, widening the spread between the two, he said.

    The discount of the WTI to Brent futures widened to $6.61, the widest since August 2015.

    The Organisation of the Petroleum Exporting Countries (OPEC), Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the begining of this year, helping to lift oil prices by about 15 per cent in the past three months.

    Meanwhile, the Nigerian Petroleum Development Company (NPDC), yesterday said it was working to grow its equity production from180,000 barrels per day (bpd) to 300,000 bpd by 2018 and 400,000 bpd and 500,000 bpd in 2019 and 2020 respectively.

    NPDC is a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

    Its Managing Director, Mr. Yusuf Matashi, who set this targets in Benin, said the planned increase in  production was due to ongoing transformation in the firm.

    Mr. Matashi said having attained the position of fifth largest exploration and production (E&P) firm in the Nigeria, the NPDC was poised to efficiently manage its portfolios to achieve the new target.

    “The NPDC has 55 per cent equity in nine blocks of Oil Mining Lease (OML) 4, 26, 30, 34, 38, 40, 41, 42 and 55; Non-equity operations in three blocks of selected NNPC Joint Venture fields; 60 per cent participatory interest in four blocks of OMLs 60, 61, 62 and 63 and 100 per cent ownership of seven blocks of OMLs 11, 13, 64, 65, 66, 111 and 119.  In a nutshell, the Company is involved in 29 concessions which comprises 22 OMLs and seven Oil Prospecting Leases,” General Manager, Group Public Affairs Division at NNPC, Mr. Ndu Ughamadu, quoted Matashi as saying in a statement yesterday.

    He said the oil firm had varied interests in seven deepwater concessions and successfully executed a Global Memorandum of Understanding (GMoU) with communities in OMLs 30 and 34, adding that NPDC achieved a major feat by successfully drilling and completing five horizontal wells in nine months in OML 26, leading to production of an additional 7, 000 bpd.

    The MD said NPDC had successfully turnaround OML 40 asset from 0 bpd to 12, 000 bpd which underlined the company’s rising profile as the seventh largest owner and operator of Floating Production Storage and Offloading (FPSO) in Nigeria, with FPSO Mystra having 1.03 million of crude producibility.

    Mr. Matashi added that NPDC also carried out some intervention activities which led to the peak production of approximately 10,000 bpd in OML 65 in June, 2017.

    He said the NPDC was the biggest and largest gas producer in the country and was also the highest supplier of gas to the domestic market.

    “NPDC aggressive gas pursuit since 2009 has also raised the company’s profile as the highest single supplier of gas to the domestic market with an average of 700 million standard cubic feet per day. The Utorogu Non-Associated Gas 11 plant was also completed recently adding 150 mmscfd; the Oredo 2 gas plant also adds 100 mmscfd and the successful re-entry of Odidi which led to an addition of 40 mmscfd of gas indeed represents a major achievement for the company and a step forward to achieving NPDC’s aspiration to become a serious global player in the E & P industry,” Mr. Matashi averred.

    The MD maintained that the NPDC as a responsible and responsive company had awarded scholarship to over 6,000 indigent members of its host communities which traversed host states, renovated and built block of classrooms, provided classroom furniture

    Turkey has said it could cut off a pipeline that carries oil from northern Iraq to the global market, putting more pressure on the Kurdish autonomous region over its independence referendum.

    The Iraqi government does not recognise the referendum and has called on foreign countries to stop importing Kurdish crude oil.

    “If this boycott call proves successful, a good 500,000 fewer barrels of crude oil per day would reach the market,” Commerzbank said in a note.

    Kuwaiti Oil Minister Essam al-Marzouq, who chaired Friday’s meeting in Vienna of the Joint Ministerial Monitoring Committee, said output curbs were helping to cut global crude inventories to their five-year average, OPEC’s stated target.

    Russia’s energy minister said no decision on extending output curbs beyond the end of March was expected before January, although other ministers suggested such a decision could be taken before the end of this year.

    Iran expects to maintain overall crude and condensate exports at around 2.6 million bpd for the rest of this year, a senior official from the country’s state oil company said.

    The energy minister from the United Arab Emirates (UAE) said the country’s compliance with OPEC’s supply cuts was 100 per cent.

    Nigeria is pumping below its agreed output cap, its oil minister, Ibe Kachikwu said.