Connect with us

Business

Tony Elumelu Reveals How Buhari, Abba Kyari Blocked His 2017 Oil Field Acquisition

Published

on

Tony Elumelu
Spread the love

 

Tony Elumelu says Buhari and Abba Kyari blocked his 2017 oil field purchase, despite raising $2.5bn for the deal.

The Chairman of Heirs Holdings, Mr. Tony Elumelu, has disclosed how former President Muhammadu Buhari and his chief of staff, the late Abba Kyari, blocked his initial move to acquire an oil field in 2017.

Elumelu, who is also the Chairman of the United Bank for Africa Plc, said this in an interview in The Financial Times. According to him, Heirs Holdings was looking to purchase an oilfield since 2017, and had raised $2.5 billion to purchase one.

But he alleged that in a twist, Buhari and the late Abba Kyari, blocked the deal.

He said he was told that Nigeria couldn’t allow something of such strategic importance to fall into the hands of a private operator. This, according to Elumelu, defied logic since he would have been purchasing it from a foreign company.

However, Elumelu’s decision to buy a 45 per cent stake in an oilfield three years ago surprised many. International oil companies such as Shell, Total and Eni were selling off their shallow water assets in Nigeria, with local companies taking charge. In 2021, his Heirs Holdings acquired OML 17, an onshore oilfield as part of a deal that included $1.1 billion in financing from a consortium of global and regional banks and investors.

Shell, Total and Eni each had sold stakes in the OML 17 field, which has production capacity of 27,000 barrels of oil equivalent per day and estimated reserves of 1.2 billion barrels of oil equivalent, Heirs said.

When asked if he felt like getting in at the end of the party by buying an oil asset in the age of energy transition and environmental, social and governance investing, Elumelu said: “We wanted to become a Fortune 500 company and we estimated what we needed. It’s not naira, it’s huge dollars.”

Energy security is crucial for a country that doesn’t produce enough electricity for its roughly 200 million citizens, he added.

He said he discovered first-hand why international oil companies were partly divesting from onshore assets, after criminal gangs began stealing crude from his pipelines.

In 2022, when things got to a point where his company had to shut down production, Elumelu vented his frustration on social media, tweeting: “How can we be losing over 95 per cent of oil production to thieves?”

Today, though, business is looking up. Elumelu, according to the newspaper, showed the status updates he received on his phone from the field: 42,000 barrels of crude pumped out daily. Theft still takes away about 18 per cent of production, he said.

When asked who was behind oil theft in the country, he said: “This is oil theft, we’re not talking about stealing a bottle of Coke you can put in your pocket. The government should know; they should tell us. Look at America — Donald Trump was shot at and quickly they knew the background of who shot him. Our security agencies should tell us who is stealing our oil. You bring vessels to our territorial waters and we don’t know?”

The proponent of Africapitalism stressed the need for Africa’s private sector to actively contribute to the continent’s growth.

“We need to run government like a business,” is his formulation of how African governments should work, with administrations held accountable by legislatures as shareholders do chief executives.

Speaking about his career trajectory, Elumelu whose father was a builder and mother a caterer said: “I had a very fast career.”

At 26, having earned a masters in economics at the University of Lagos, he became a branch manager of the bank where he began his career. “It was unheard of. I like to take my destiny in my hands.”

Elumelu was at the helm of UBA for another five years until a central bank edict that turfed out long-serving bank bosses put him out of a job.

“2010 was a pivotal year for me,” he said while speaking about his ouster as UBA boss.

“The central bank ruling was a complete surprise . .Was it fair? Look, as someone who believes in governance, it probably makes sense, but it was a shock. But it was also liberating, catalysing,” he added.

By the end of that year, he had formed Heirs Holdings, the investment engine that launched the second act of his career and turned him from a banker to a multi-sector magnate.

“I don’t live for myself or my family alone, I know people look up to me,” he said of his fame outside of the boardroom.

“I try to make sure I don’t disappoint people. Young Africans need role models, they want people they can look up to,” he added.

If Elumelu is thriving, his country decidedly is not. Nigeria is in the grip of its worst economic crisis in a generation, with growth stalling and inflation at levels not seen in almost three decades.

Elumelu’s philosophy of “Africapitalism” is based on the premise that the continent cannot grow solely through the government, and that the private sector should actively invest even when — especially when — socio-economic conditions are tough.

“We can sit here today and the easiest part of the conversation would be to talk about all the things that have gone wrong, all the things that people have failed to do.

“But therein lies the philosophy of Africapitalism. For far too long, we have blamed foreign powers. We have blamed our own leaders. But what are we as the private sector doing to make things better? It’s a call on the private sector to stand up and show the way. Let us show the way through what is in our own power. We have the power to make investment decisions.”

With investments in 20 African countries and thousands of employees, he believes he is playing his own part. And through grants from his eponymous foundation, he says he is “democratising luck” for young entrepreneurs.

“I have my frustrations across the continent but I also have my wins . . . what I’m saying is we need to do something to have a better society.”

As a member of President Bola Tinubu’s presidential economic advisory committee, he is one of a handful of business leaders close to the administration. The reforms that Tinubu — whose “courage” Elumelu likes — has embarked on are necessary for long-term growth, Elumelu said, but he wonders if the sequencing of removing costly but popular fuel subsidies and a sharp devaluation of the naira currency could have been implemented better to first provide a social safety net for the most vulnerable in society.

“I support it, totally,” he says of skilled young Nigerians emigrating. “I don’t have a problem with people saying ‘I’m going to Canada, UK or US.’

“Joblessness is the betrayal of a generation. You’ve gone to school and come back with your dreams and aspirations and you don’t have the opportunity . . . People who decide to find solutions elsewhere, no one should stop them. But for those who decide to stay, they should try to create an impact and build a legacy.”

Be sure to follow ekwutosblog  for confirmed updates

Business

Prices to fall as NNPC plans 12 more filling stations to sell N230 fuel.

Published

on

Prices to fall as NNPC plans 12 more filling stations to sell N230 fuel.
Spread the love

NNPC (Nigerian National Petroleum Corporation) is planning to open 12 more filling stations to sell fuel at a lower price of N230 per liter. This move is expected to increase competition in the market and potentially lead to a decrease in fuel prices.

Ekwutosblog gathered that with these  more filling stations selling fuel at a lower price, consumers may benefit from:

1. Increased competition: More filling stations selling fuel at a lower price can encourage other marketers to reduce their prices.
2. Lower fuel prices: As more fuel is available at a lower price, the overall market price may decrease.
3. Improved accessibility: More filling stations can make fuel more accessible to consumers, especially in areas with limited options.

However, it’s essential to consider the following factors:

1. Sustainability: Will NNPC be able to maintain the lower price point, or is this a temporary measure?
2. Market dynamics: How will other marketers respond to NNPC’s move, and will they also reduce their prices?
3. Supply and demand: Will the increased supply of fuel at a lower price lead to increased demand, and how will this affect the market?

Keep an eye on the developments and see how the market responds to NNPC’s plans!

Continue Reading

Business

Bitcoin soars past US$81,000 as Trump’s pro-crypto stance fuels buying spree

Published

on

Bitcoin reached a record high on Monday. Photo: Reuters
Spread the love

The token climbed to an unprecedented US$81,497 early in the Asian day on Monday

Bitcoin rallied past US$81,000 for the first time, boosted by President-elect Donald Trump’s embrace of digital assets and the prospect of a Congress featuring pro-crypto lawmakers.

Trump’s decisive victory in the presidential election has prompted celebratory chest-thumping from the digital-asset industry, which spent over US$100 million backing a range of crypto-friendly candidates.

The largest token climbed as much as 6.1 per cent on Sunday, before extending the gain to an unprecedented US$81,497 early in the Asian day on Monday. Bullish sentiment lifted smaller coins too, including a surge in Dogecoin, a meme-crowd favourite promoted by Trump supporter Elon Musk.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

“With the dust from Trump’s victory still settling down, it was only a matter of time before a run-up of some sort occurred given the perception of Trump being pro-crypto, and that’s what we’re seeing now,” said Le Shi, Hong Kong managing director at market-making firm Auros.

Trump vowed on the campaign trail to put the US at the centre of the digital-asset industry, including creating a strategic bitcoin stockpile and appointing regulators enamoured with digital assets. Jubilant traders for the moment are paying little heed to questions such as the speed of likely implementation or whether a strategic stockpile is a realistic possibility.

His broader agenda of stoking domestic economic growth, tax cuts and reducing red tape has fuelled a buying spree across stocks, credit and crypto. The S&P 500 stock index last week hit its 50th record this year.

Bitcoin has added about 92 per cent so far in 2024, helped by robust demand for dedicated US exchange-traded funds (ETFs) and interest-rate cuts by the Federal Reserve. The rise in the token, which scaled fresh records after Tuesday’s US vote, exceeds the returns from investments such as stocks and gold.

The ETFs, powered by BlackRock’s $35 billion iShares Bitcoin Trust, posted a record daily net inflow of almost US$1.4 billion on Thursday, according to data compiled by Bloomberg. A day earlier, the iShares ETF’s trading volume jumped to an all-time peak – all signs of how Trump’s victory is reshaping crypto.

Trump’s stance contrasts with a crackdown on digital assets under President Joe Biden. Securities & Exchange Commission Chairman Gary Genslerrepeatedly labelled the sector as rife with fraud and misconduct. The agency turned the screws on crypto following a 2022 market rout and a litany of collapses, notably the bankruptcy of Sam Bankman-Fried’s fraudulent FTX exchange.

Digital-asset companies spent heavily during the election campaign to boost candidates viewed as favourable to their interests. Against that backdrop, Trump did an about-face, becoming a supporter of an industry he once labelled a scam.

“Trump has promised supportive regulation, and the sweep of the House and the Senate makes the passage of crypto bills much more likely,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.

More Articles from SCMP

Hong Kong tycoons should take lead in reinventing city, senior Beijing official says

US women’s sex strike at Trump more farcical than Aristophanes

One of Beijing’s top ‘financial minds’ set to join Hong Kong liaison office: sources

Your perfect week: what to do in Hong Kong from November 10 to 16

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Continue Reading

Business

China poised to approve more help for ailing economy

Published

on

China poised to approve more help for ailing economy
Spread the love

China poised to approve more help for ailing economy

 

China is expected to unveil a huge support package for the struggling economy Friday as officials wrap up a key meeting with an eye on the possibility of intensified trade tensions with US president-elect Donald Trump.

Economists predict Beijing will approve hundreds of billions of dollars of help, with a focus on indebted local governments as well as cash for banks aimed at writing off non-performing loans.

Policymakers were keeping tabs on the US vote as they gathered in the Chinese capital this week for a meeting of the country’s top lawmaking body.

Trump promised during his campaign of punishing tariffs on Chinese goods that threaten further grief for the world’s second-largest economy, which is already grappling with a prolonged housing crisis and sluggish consumption.

Observers say Beijing could seek to cushion that blow with a long-awaited “bazooka stimulus” for the economy — though caution details might still take time.

The meeting, originally scheduled for late October, was likely pushed back to allow “policymakers a chance to address a possible Trump win”, Lynn Song, chief economist for Greater China at ING, said.

“In our view, the odds for a larger policy support package will rise somewhat with a Trump victory,” he added.

Trump’s victory is “not necessarily bad for China as this may ‘pressure’ Beijing for a bigger stimulus”, Qi Wang, CIO of UOB Kay Hian Wealth Management, said on X.

State media this week reported that officials had reviewed a bill to raise local government debt ceilings.

That move, touted last month, would allow authorities to borrow more to fund the acquisition of unused land for development — a move aimed at pulling the property market out of a prolonged slump.

Beijing in September began to unveil a raft of measures aimed at boosting economic activity, including rate cuts and the easing of some home purchasing restrictions, but analysts have bemoaned the lack of detail so far.

Trump’s re-election provides a need for greater urgency, experts say, though caution may still prevail as officials try to avoid piling on more government debt.

“Any potential stimulus size may be bigger, but so is the pressure,” Gary Ng, senior economist at Natixis, said.

“The market may still not get the economic boosters it wants,” he warned.

China’s Premier Li Qiang this week said he was “fully confident” that the country would hit its growth target of around five percent for 2024, even after figures showed the economy saw its slowest expansion in a year and a half during the third quarter.

And in a rare bright spot, data Thursday showed the nation’s exports surged last month at their fastest pace in more than two years.

But Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, warned “we cannot rely on exports to carry China’s economy”. “I expect fiscal policy will become more proactive next year as a pillar for growth,” he said.

Continue Reading

Trending