Economy
NNPC Wins $2.7bn Debt Suit at U.S. court
U.S. Southern District Court of New York has delivered judgment in favour of the Nigerian National Petroleum Corporation (NNPC) against ESSO Exploration and Production Nigeria Limited and Shell Nigerian Exploration and Production Company Limited (collectively ESSO).
The Corporation disclosed this in a statement issued by Mr Ndu Ughamadu, the Spokesman for the corporation, on Sunday in Abuja.
It will be recalled that a court hearing was held on February 1, in the protracted litigation arising from the disputes between NNPC and ESSO regarding the implementation of the Production Sharing Contract dated May 21, 1993 covering OPL 209/OML 133.
ESSO referred its claims to arbitration in Nigeria and obtained an Arbitral Award of 1.
799 billion dollars on Oct. 24, 2011, with annual interest running at LIBOR plus 4 per cent.NNPC challenged the Award at the Federal High Court, Abuja, which in May 2012, ordered that the Arbitral Award be set aside.
Notwithstanding the decision of the Nigerian Court, ESSO applied to the United States District Court, Southern District of New York for recognition and enforcement of the Arbitral Award.
NNPC challenged ESSO’s Application on the ground that there was no Award, which the US Court could enforce as a competent Court in Nigeria had since set aside the Award.
NNPC also contended that there was no legal basis for the US Court to exercise jurisdiction over it as it had no presence in the United States, owned no property and does not conduct its businesses therein.
ESSO contended that NNPC is the alter ego of the Federal Government of Nigeria, owned assets in the USA including bank accounts and also conducts businesses in the USA.
ESSO obtained the leave of Court to conduct Jurisdictional Discovery to ascertain if the US Court could assert personal jurisdiction over NNPC.
At the close of the Discovery Procedure, the Court ordered NNPC and ESSO to appear for oral hearing, which was held before Honourable Judge W. H. Pauley on February 1, for parties to canvass their respective positions.
On September 4, the US Court delivered its Judgment by which it upheld the Corporation’s Application to Dismiss ESSO’s Enforcement Application on the ground that a competent Nigerian Court had set aside the underlying Award.
It also directed the Clerk of the Court to terminate and discontinue all motions and processes filed by ESSO in the matter.
“By this development, NNPC has successfully secured the dismissal of ESSO’s application to secure recognition and enforcement of its Arbitral Award valued in excess of US$2,699,405,616 plus interest.
“The effect is that ESSO, who had sought the Order of the US Court to enforce the said Award, has lost the right.
“While ESSO is at liberty to appeal this decision, NNPC is optimistic that its case on appeal is very strong.
“This is a significant decision in the history of this case as the US Court has not only discharged NNPC from any indebtedness to ESSO but also set the stage for NNPC’s pursuit of the challenge of three other outstanding Enforcement Applications filed in the US Court by other PSC Contractors,’’ Ugahmadu said
He also said that the decision of the US Court would lend weight to the effort of NNPC and the PSC Contractors to explore amicable resolution of underlying PSC disputes.
NNPC was represented by the US law firm of Messrs. Chaffetz Lindsey LLP, and Nigerian law firm of Messrs. Streamsowers & Kohn. (NAN)
ENO/HAS
The International Monetary Fund (IMF),, says global growth is projected to remain unchanged at 3.2 per cent in 2024 and 2025, as Inflation recedes.
This is according to the IMF’s latest World Economic Outlook (WEO) Update Report for October 2024: “Policy Pivot, Rising Threats,” released on Tuesday during the IMF/ World Bank Meetings in Washington D.
C.The report said though the projection was in line with the July and April 2024 WEO, there had been notable revisions beneath the surface since the April WEO.
According to the report, some low-income and developing economies have seen sizable downside growth revisions, often tied to disruptions to production and shipping of commodities, especially oil, conflicts, civil unrest, and extreme weather events.
“These have been compensated for by upgrades to the forecast for emerging Asia, where surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence has bolstered growth.”
It said in advanced economies, growth in the United States was strong, at 2.8 per cent in 2024 but will revert toward its potential in 2025.
The report said for advanced European economies, a modest growth rebound was expected in 2025, with output approaching potential.
For emerging markets and developing economies, it said the growth outlook was very stable around 4.2 per cent in 2024 and 2025, with continued robust performance from emerging Asia.
“Five years from now, global growth should reach 3.1 per cent, a mediocre performance compared with the prepandemic average.”
The report showed that there was global disinflation even though service price inflation persists in some countries.
“After peaking at 9.4 per cent year-on-year in the third quarter of 2022, we now project headline inflation will fall to 3.5 per cent by the end of next year.
“ This is slightly below the average during the two decades before the pandemic.
“In most countries, inflation is now hovering close to central bank targets, paving the way for monetary easing across major central banks.”
The report said the return of inflation near central bank targets paved H the way for a policy triple pivot which would provide the much-needed macroeconomic breathing room, at a time when risks and challenges remain elevated.
“The first pivot on monetary policy is underway already. Since June, major central banks in advanced economies have started to cut policy rates, moving toward a neutral stance.
“This will support activity at a time when many advanced economies’ labor markets are showing signs of cooling, with rising unemployment rates.
‘Lower interest rates in major economies will ease the pressure on emerging market economies, with their currencies strengthening against the U. U. S dollar and financial conditions improving.
“This will help reduce imported inflation, allowing these countries to pursue their own disinflation path more easily.”
The report said the second pivot was on fiscal policy and would require countries to stabilise debt dynamics and rebuild much-needed fiscal buffers.
“The more credible and disciplined the fiscal adjustment, the more monetary policy can play a supporting role by easing policy rates while keeping inflation in check.
“The pace of adjustment should be tailored to country-specific circumstances.”
It said the third pivot and the hardest was towards growth-enhancing reforms.
The report said structural reforms were necessary to lift medium-term growth prospects, but support for the most vulnerable should be maintained
It said for reforms to be successful and socially accepted, there was a need to build trust between government and citizens.
“ Building trust between government and citizens, a two-way process throughout the policy design and the inclusion of proper compensation to offset potential harms, are essential features.
The report said that multilateral cooperation was needed more than ever to accelerate the green transition and to support debt-restructuring efforts. (NAN)
The Securities and Exchange Commission (SEC) says it is organising a compliance summit for Chief Executive Officers (CEOs) and Compliance Officers to address Financial Action Task Force (FATF) and related issues.
The Director-General of SEC, Dr Emomotimi Agama, said this in a statement made available on Saturday in Lagos.
He said that the summit, with the theme, “Navigating regulatory challenges: Aligning with changes in FATF in the era of VASPS,” would be in Lagos on Oct.
21 and Oct. 22.According to him, SEC aims to equip capital market operators with the necessary tools and knowledge to thrive in a complex regulatory environment.
Agama said that the Nigerian Capital Market Institute (NCMI), a subsidiary of SEC, would hold the summit.
He noted that the summit would ultimately foster a culture of compliance and integrity in the operations of the participants.
“The aim is to equip capital market operators with essential insights and strategies to effectively navigate the evolving regulatory landscape.
“Attendees are to gain knowledge of understanding regulatory changes, clarity on the latest updates to FATF standards and how these impact Virtual Asset Service Providers (VASPs).
“They will also learn best practices for aligning their compliance programmes with new regulations, ensuring they meet international standards that enhance compliance frameworks in their organisations,” he said.
According to him, key objectives of the summit are regulatory compliance, understanding and implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations.
Others, he added, would include risk management, which encompasses identify, assess and mitigate risks associated with virtual assets and operational efficiency which would lead to enhanced internal controls, governance and compliance frameworks.
The director-general mentioned that the benefits of the summit include regulatory clarity, risk reduction, enhanced governance, competitive advantage and networking opportunities.
The welcome address at the summit is expected to be presented by Ms Frana Chukwuogor, Executive Commissioner, Legal and Enforcement, SEC Nigeria.
The opening remarks and overview of the summit will be delivered by Dr Agama while Ms Hafsat Bakari, Director, Nigeria Fraud Intelligence Unit(NFIU) will present a goodwill message.
Among the speakers expected at the event are, Mr Obinna Iwuno, Chairman, Stakeholders in BlockChain Association of Nigeria (SiBAN) and Certified Cryptocurrency Compliance Specialist and Investigator, Mr Ade Bajomo.
Also, Mr Zacch Adedeji, Executive Chairman, Federal Inland Revenue Service (FIRS), President, Fintech Association in Nigeria, Mr Peter Shodipo, and the President, Committee of Chief Compliance Officers of Capital Market Operators in Nigeria (CCCOCIN) among others.(NAN)
To end the week, the stock market rebounded from previous losses, gaining N74 billion.
Investor interest in MTN Nigeria, FBN Holdings, Guaranty Trust Holding Company (GTCO) and other equities lifted the market.
Notably, the market capitalisation opened at N56.014 trillion, adding N74 billion or 0.
13 per cent to close at N56.088 trillion.The All-Share Index also advanced by 0.
13 per cent, or 129.44 points, closing at 97,606.63, compared to 97,477.19 recorded on Thursday.As a result, the Year-To-Date (YTD) return increased by 30.54 per cent.
The market breadth closed positive, with 31 gainers and 19 losers on the floor of the Exchange.
On the gainers’ chart, Consolidated Hallmark Plc and Sterling Nigeria led by 9.
45 per cent each to close at N1.39 and N4.98 per share respectively.Mecure followed by 9.19 per cent to close at N10.10, Regency Alliance Insurance gained 9.09 per cent to close at 72k, while Fidson Healthcare Plc increased by 8.24 per cent to close at N15.10 per share.
Conversely, Deap Capital Management and Trust led the losers’ chart by 9.93 per cent to close at N1.36, NEM Insurance trailed by 9.71 per cent to close at N7.90 per share.
Daar Communications also lost 9.52 per cent to close at 57k, Tantalizers shed 9.09 per cent to close at 60k, while Dangote Sugar declined by 3.31 per cent to close at N31 per share.
Analysis of the market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 20.33 per cent.
A total of 304.43 million shares valued at N5.60 billion were exchanged in 6,950 deals, compared with 277.75 million shares valued at N4.65 billon in 7,091 deals traded in the previous session.
Meanwhile, Access Corporation led the activity chart in volume and value with 68.26 million shares valued at N1.34 billon.(NAN)
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