Economy
NNPC Gets $2b Discount on Renegotiated Deals
By Dipo Olowookere
Not less than $2 billion has been realised by the Nigerian National Petroleum Corporation (NNPC) from renegotiated upstream contracts being executed by its various service providers in the last one.
This information was disclosed on Tuesday by the Group Managing Director of the NNPC, Mr Maikanti Baru, in a podcast message to the agency’s staff to mark his first year in office.
Mr Baru explained that this feat was achieved in the quest to continually drive down the high cost of production in the industry.
The state-owned oil firm boss said at the moment, NNPC had lowered operating costs of production from $27/barrels to $22/barrels.
“For the upstream, cost reduction and efficiency are key features that we will pay attention to,” he said in the 25-minute podcast.
On July 4, 2016, Mr Baru took over the mantle of leadership of NNPC from the present Minister of State for Petroleum Resources, Mr Ibe Kachikwu.
Since then, he has carried out various reforms, projecting the agency as a serious government organisation. He has also been able to make petroleum products available across the country.
Speaking during the podcast, Mr Baru directed that focal points for efficiency in each of the corporation’s Autonomous Business Units (ABUs), and Corporate Services Units (CSUs), be identified to ensure the realization of the key performance indicators enshrined in the 2017 budget, adding that the NNPC must attain a six-month contracting cycle.
Speaking further on the achievement of NNPC in the past one year with him at the helms of affairs, the NNPC chief executive said there had been a significant increase in crude oil reserves and production, stressing that during the period, the national average daily production was 1.83 million barrels of oil and condensate while currently, the Year-To-Date 2017 average production hovers around 1.88 million barrels.
He said with the improvement in security and resumption of production operation on the Forcados Oil Terminal (FOT) and Qua Iboe Terminal (QIT) pipelines, the average national production was expected to increase and surpass 2017 target of 2.2 million barrels of oil and condensate per day.
The GMD stated that in October last year, the Owowo Field, located close to the producing ExxonMobil-operated Usan Field was found, adding that the Field’s location could allow for early production through a tie-back to the Usan Floating Production Storage and Offloading (FPSO).
The field, he noted, had added a current estimated reserves of one billion barrels to the national crude oil reserves.
He noted that the corporation had grown the production of the Nigerian Petroleum Development Company (NPDC), NNPC’s flagship upstream company, from 15,000 barrels of oil per day (bopd) to the current peak-operated volume of 210,000bopd in June 2017.
He stated that the ownership of Oil Mining Licence, OML13 had been restored to NPDC following a presidential intervention, with first oil from the well expected before the end of the year.
The GMD said the confidence of the NNPC JV partners to pursue new projects had been rekindled following the repayment agreements for JV cash call arrears that were negotiated and executed for outstanding up to end 2015 by all the IOC Partners of the Corporation’s Joint Venture Companies (JVCs).
In the gas sector, the GMD said gas supply to power plants and industries in the country had been significantly increased.
Mr Baru listed the accomplishments of the corporation in the sector to include: completion of the repairs of the vandalized 20” Escravos Lagos Pipeline System A (ELPS –A) in August 2016 which ramped up Chevron Escravos Gas plant supply from nil to 259MMscfd and the completion of repairs of the vandalized Chevron offshore gas pipeline in February 2017 which equally peaked the company’s gas supply to 430MMscfd.
Other accomplishments under this category are: the completion of repair works on the vandalized 48” Forcados Oil Terminal (FOT) export gas pipeline in June 2017, which had reactivated shut down gas plants, including Oredo Gas Plant, Sapele Gas Plant, Ovade Gas Plant, Oben and NGC Gas Compressors; and the commissioning of NPDC’s Utorogu NAG2 and Oredo EPF 2 gas plants.
The GMD explained that the concomitant effect of the efforts was a significant growth in domestic gas supply in the last few months, adding that during the period, domestic gas supply had increased from an average of 700MMscf in July 2016 to an average of 1,220MMscfd currently, with about 75 per cent of the volume supplied to thermal power plants.
“A lot of Generation Companies (GENCOs) are rejecting gas due to the inability of Transmission Company of Nigeria (TCN), to wheel-out the power generated,” Mr Baru said.
He informed that since his assumption of office a year ago, resources had been deployed to the Benue Trough, with exploration efforts commenced there in earnest.
He explained that seismic data acquisition was ongoing in the frontier region using the services of Integrated Data Services limited, IDSL, and her partners to pursue Government’s aspiration to grow the reserves base of the country.
The GMD stated that drilling activities were expected to commence in Benue Trough in Q4 this year.
He said, “We are working with the security agencies for an early return to the Chad Basin. Drilling activities will be a priority on resumption while continuing with seismic data acquisition with improved parameters.”
In the downstream sector, Mr Baru explained that in the last one year, NNPC had stabilized the market with sufficient products availability across the country through modest local refining efforts as well as the Direct Supply Direct Purchase (DSDP) scheme, which he observed had saved the nation about N40billion in 2017.
“We have also commenced the resuscitation of our products transportation pipelines network, thus enabling us move products to depots at faster rate and cheaper distribution costs to consumers. The Aba, Mosimi, Atlas-Cove and Kano Depots have all been re-commissioned and are currently receiving products, thereby enhancing products availability across the country,” the GMD said.
Mr Baru said in the last one year, NNPC had improved capacity utilization of the refineries with the projection that they would attain supplying 50 per cent of the non-gasoline white products to the nation, including diesel and kerosene that are commonly consumed in the country.
The GMD said after more than seven years of dormancy, the Asphalt Blowing Unit of the Kaduna Refining and Petrochemical Company (KRPC) was resuscitated to meet road construction needs in the country.
He declared that efforts were ongoing to secure 3rd party financing to revamp the refineries to their full operational capacities.
Drawing his address to a close, Mr Baru disclosed that the overwhelming support he received from the agency’s staff and the industry’s in-house unions; Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) contributed to the successes recorded by NNPC management under his leadership in the past year.
“I look forward to your continued cooperation and support as we navigate the corporation out of its current challenges towards profitability with integrity and transparency,” the GMD stated.
By Adedapo Adesanya
Africa-focused fintech company PalmPay has joined the ranks of unicorn startups after attaining a valuation of more than $1 billion, as the digital payment platform prepares for a potential initial public offering (IPO) in Hong Kong.
According to a report by Bloomberg on Tuesday, citing people familiar with the matter, the Hong Kong-headquartered company is in advanced discussions to raise about $200 million in a new funding round that would cement its unicorn status and support its next phase of expansion.
The planned fundraising comes as PalmPay accelerates its growth strategy across Africa and Asia, while positioning itself for a public listing that could become one of the most significant fintech IPOs involving an Africa-focused company in recent years.
PalmPay’s move follows a period of rapid growth in Nigeria, where it has become one of the country’s largest digital financial services providers. Alongside OPay and Moniepoint, the company forms the trio that dominates Nigeria’s retail digital payments and agency banking market, a segment driven by millions of point-of-sale (POS) transactions processed daily.
With PalmPay’s latest valuation milestone, all three leading Nigerian fintechs have now achieved unicorn status. While OPay has previously disclosed plans to pursue a listing in the United States, Moniepoint has remained focused on expanding its banking and business services without publicly indicating IPO ambitions.
Founded in 2019 after securing a Mobile Money Operator (MMO) licence from the Central Bank of Nigeria (CBN), PalmPay has built one of the country’s fastest-growing fintech ecosystems. The company says it now serves more than 35 million registered users and over 600,000 merchants, supported by an extensive network of more than 500,000 mobile money agents nationwide.
The platform offers a broad suite of financial services, including peer-to-peer transfers, bill payments, airtime purchases, savings, credit products, merchant payment solutions and agency banking services. PalmPay says it processes as many as 15 million transactions daily, reflecting the increasing adoption of digital payments across Nigeria.
Beyond its home market, the fintech has expanded into Tanzania, Ghana, and Bangladesh, underscoring its ambition to become a leading emerging-market digital bank. Industry analysts view the expansion as part of a broader strategy to diversify revenue streams while replicating its Nigerian success in other underbanked markets.
PalmPay has attracted backing from prominent global investors, including Taiwanese semiconductor manufacturer MediaTek and smartphone maker Transsion Holdings, whose Tecno, Infinix and itel brands command significant market share across Africa. Their support has helped PalmPay leverage smartphone penetration to drive financial inclusion through mobile-first banking services.
As part of efforts to strengthen its leadership ahead of its next growth phase, PalmPay recently appointed Mr Samuel Oluyemi as Chief Operating Officer (COO) for its Nigerian business. Mr Oluyemi joined the company after more than two decades at the Nigeria Inter-Bank Settlement System (NIBSS), where he played key roles in developing the country’s digital payments infrastructure.
If completed, the fundraising and eventual Hong Kong listing would further underscore growing international investor confidence in African fintech companies despite a more cautious global venture capital environment. The proceeds are expected to support PalmPay’s geographical expansion, deepen its product offerings, invest in technology infrastructure and strengthen its competitive position in Africa’s rapidly evolving digital financial services industry.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
