Good morning from the Financial Times.
Today is Monday May 5th, and this is your F .T.
News briefing. The Oracle of Omaha is retiring, and Chinese exporters are looking to avoid U .S. tariffs.
Plus, local companies are pouring into Nigeria's onshore oil industry.
Maybe we could see Nigerians begin to take broader ownership of their economy.
with you. I'm Kasha Broussalian, and here's the news you need to start your day.
Warren Buffett plans to step down from Berkshire Hathaway after six decades.
The world's most famous investor made the announcement over the weekend at Berkshire's annual shareholder meeting.
And while we all knew it was coming, man is 94 years old after all, the news still came as a surprise.
Even for his hand -picked successor Greg Abel.
The FD's Amelia Pollard was in Omaha, Nebraska to see it happen.
Hi, Amelia. Hi, Kasia.
So give me the details on how exactly Buffett's announcement went down on Saturday.
So just to paint the scene a bit, The annual shareholder meeting is a complete festival.
It lasts all weekend, and on Friday, there are thousands of people in downtown Omaha.
The Saturday meeting is a four hour marathon question and answer session where Greg Abel and Buffett were both at the front of the arena.
In the last five minutes, he says, basically, that there's one other announcement he feels like he has to make.
How insouci know of what I'm going to talk about there the rest of them this will come as news to and that the only people who are aware of this announcement are his two children who both sit on The board that even Greg Gable who was sitting beside him didn't know what he was about to unveil the time has arrived where Greg should become the chief executive officer of the company at the year -end and I want to spring that up Well Amelia, what is it about Buffett that made him such a mythical figure in the investment world?
Yeah. So Buffett's often called the Oracle of Omaha and he's not only one of the savviest investors of all time, he's managed to build the Berkshire Hathaway into a $1 .1 trillion company, but he also is one of these figures that investors look to for not just financial advice, but also advice on how to lead one's life.
he often was answering questions about, you know, how people should fill their days, and Jamie Dimon wrote to us saying that he represents the very best of American capitalism.
Buffett is someone who really values long term investments and long term growth, which is all the rarer nowadays in the U .S. And carrying on this major legacy, it looks like it's going to fall on the shoulders of Greg Gable.
Tell me more about him.
So, Greg Gable is the Vice Chair of Non -Insurance Operations.
And a lot of the shareholders I spoke to on Saturday said that they had supreme confidence in him.
And I think that Buffett's blessing of Greg means a huge amount to investors who've been with the company for decades.
But that being said, there will be a lot of public scrutiny on how Greg performs. Buffett is a legendary figure and a larger -than -life figure, and I think there's some question whether Berkshire Hathaway will ever be the same without Buffett.
So now, besides the difficulty of filling Buffett's shoes, what major challenges lie ahead for Abel as Berkshire's CEO?
So Berkshire has amassed a huge amount of cash in recent years.
And Berkshire and Buffett really don't want to pay more than companies are worth.
And so they're very strategic in waiting on the sidelines for when they can strike and buy out companies and make savvy investments when things are cheap.
And so Abel's basically handed hundreds of billions of dollars in cash that shareholders would like him to deploy.
That's been some criticism in recent years of, you know, is Buffett being too cautious in spending this money?
So the real question is whether he'll be able to find, you know, those great deals and great investments in the years to come.
Amelia Pollard is the FT's US Deals and Activism correspondent.
Thanks, Amelia. Thanks so much for having me.
Chinese exporters have found a way to get around President Donald Trump's sky -high tariffs.
They're shipping goods through third countries to hide where they really come from.
That way, they won't face upwards of 145 % tariffs when they arrive at US ports.
It's called place of origin -washing, and Chinese social media is chock full of advertisements offering to help companies through the process.
Lots of the ads are suggesting Southeast Asia as the place to do it.
But countries in the region are trying to crack down on the practice.
Both Thailand and Vietnam recently announced new measures to police these foreign goods.
The Israeli military said on Sunday that it was calling up thousands of reservists.
Many of them are now in the process of being deployed.
Israel is looking to expand its offensive in Gaza.
It's the latest escalation since the country broke a fragile ceasefire with Hamas two months ago.
Since then, Israel has cut off supplies of food, fuel, and medicine to the more than 2 million Palestinians living in the enclave. Tensions in the region are high.
Also on Sunday, Iranian -backed Houthi militants fired a missile from Yemen.
It landed near Israel's main airport.
The attack injured at least four people and disrupted flights.
Nigeria's onshore oil industry has been dominated by foreign players for a while now.
Think Exxon Mobil out of the U .S., Italy's Eni, and of course Shell, the Anglo Dutch major.
But more and more, these big firms are getting out, and local companies are taking over their assets.
My colleague Annu Adeyoye has been reporting on the transition, and he's here with me now.
Hey, Onu. So walk me through this shift in Nigeria's oil industry.
Why are these international majors pulling out?
International majors have dominated Nigeria's onshore oil industry for decades now.
But over the last three to four years, we are starting to see a shift in this industry.
This is for a variety of reasons.
One of them is because they have been doing later returns from these oil fields that have been exploited for decades now.
there's also been longstanding concerns about environmental damage and oil theft. And there's always been tensions with communities.
Nigerian communities where these oil assets reside have long had grievances against these foreign majors for not looking out for their own interests.
And so, for these reasons, the foreign majors have decided that they've had enough and are starting to shift their operations elsewhere.
Yeah. And it sounds like local entities are now filling that gap.
Can you give me some examples of that?
Yeah, so ExxonMobil from the US have sold their assets in the past year to a London and Lagos -listed company called Seplat Energy.
Italy's ENI has sold its Nigeria arm to Oando, which is a Nigerian company listed in Lagos and Johannesburg, and perhaps the most important divestment has come from Shell, because Shell drilled Nigeria's first oil well in 1956 and has been synonymous with Nigeria's oil industry for decades and shells disposed of its onshore business for $1 .3 billion in a transaction that was completed just this year.
So we've seen these big players exit and are selling up to domestic Nigerian companies.
Now you mentioned that these foreign majors that have been in the country for decades, they also have had quite a few tensions with local communities, what has that looked like?
Yes, I mean, the number one problem has always been their reaction and their responsibility towards oil spills.
So this is kind of the main problem that they've had with local communities, because a lot of the people living in these areas are rural people who work in farming and fishing.
And when there's oil spillages, it obviously affects their means of livelihoods.
There's also been problems of environmental damage, which is a second other effect from oil spills.
So we've had these tensions, basically, since the beginning of Nigeria's oil industry in the 1950s.
So it sounds like local communities have many times been harmed over the years.
Are Nigerian owners planning to do things differently?
So that's the big question.
And at this point it's too early to judge because they have only started taking ownership of these assets.
But there's a new landmark law in Nigeria called the Petroleum Industry Act that was signed into law in 2021, just as the oil majors were preparing to leave, that says that companies operating in local communities have to pay a certain percentage of their annual operating expenses towards the development of those communities.
And one of the oil executives I spoke to said, they hope that this will better improve the relationship between the host communities and the domestic companies that are coming into the areas now.
All right. So maybe it's a step in the right direction.
But ultimately, how big of a deal is this change in ownership for Nigeria's broader economy?
I think it's massive, you know, because oil is very important to the Nigerian national psyche.
It employs quite a lot of people, but also contributes massively to government revenue and to Nigeria's export earnings.
You know, this is what Nigeria mostly exports to the rest of the world.
And if you have Nigerian companies coming into this and taking local ownership of this, There is a sense that, you know, you could perhaps see this effect spread into other industries.
Maybe we could see Nigerians begin to take broader ownership of their economy while also trying to attract foreign investors in key sectors.
So I think this is quite important for Nigeria, particularly psychologically, that local companies are taking over these assets.
Anu Adeyo -Iye is the FT's West Africa correspondent.
Thanks, Anu. Thanks for having me.
You can read more on all of these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
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