Economy
Chevron, NNPC Seal $1.7b Deal to Boost Oil, Gas Output
By Dipo Olowookere
A deal worth $1.7 billion that would increase crude oil production in the country by about 39,000 barrels per day has been completed by Chevron Nigeria Limited (CNL) and Nigerian National Petroleum Corporation (NNPC).
It was gathered that the agreement, which is also expected to achieve an incremental peak production of about 283mmscfd of gas, was signed in London at the weekend.
It is the second and final phase of an Alternative Financing Agreement between both parties.
Group Managing Director of the NNPC, Mr Maikanti Baru, who signed on behalf of his corporation, said the increment to be achieved by the agreement would spread “over the remaining life of the asset (until 2045).”
According to him, the project, which is about 92 percent completed, will cost about $1.7 billion, with $780 million expected to be funded by third-party, while it will produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in the Niger Delta.
Mr Baru described the deal as a step in the right direction which would grow the nation’s daily production and support the Federal Government’s strategic domestic gas-to-power aspirations, while aligning with NNPC’s 12 Business Focus Areas (BUFAs).
He said the project would also include the completion of the Sonam non-associated gas (NAG) well platform and Sonam living quarters platform; drilling of seven wells in the Sonam field and the Okan 30E NAG well; as well as the completion of the 20“ x 32Km Sonam pipeline and Okan pig receiver platform and development of the associated facilities.
“As we speak now, the facilities are 100 percent completed while wells are 40 percent executed,” Mr Baru stated.
In carrying out the project, the NNPC/CNL JV adopted a 2-staged financing approach. While Stage 1 which provided $400 million sourced from Nigerian Commercial Banks (NCBs) achieved financial close on 1st August 2017, Stage 2, (signed today), is set to provide $380mn from International Commercial Banks (ICBs).
Out of the $780 million total financing for both stages, Chevron’s Co-lending totals $312 million while NNPC’s portion of the total facility stands at is $468 million.
Speaking further on the Alternative Financing approach, Mr Baru explained that it was aimed at plugging NNPC’s shortfall in funding JV cash call obligations including settlement of pre-2016 cash call arrears.
It will also enable full funding of NNPC’s JV obligations to restore investors’ confidence and stimulate further Foreign Direct Investments (FDIs) as we are beginning to witness, he noted.
Earlier in his remarks, the Managing Director of CNL, Mr Jeff Ewing said his company supported the Federal Government’s aspirations to sustain oil and gas production.
“We know the important role gas supply to the domestic market plays in growing power generation. We also understand government’s need to seek alternative sources to fund profitable and bankable JV Projects,” Mr Ewing added.
He commended Mr Baru and other partners for backing the third party financing arrangement, which he said, would lessen cash call burden on the federation account.
He expressed Chevron’s commitment to execute the programme safely, timely and deliver its expected values for all stakeholders.
It would be recalled that in August this year, two sets of alternative financing agreements on JV projects were executed between the NNPC/CNL JV (project Falcon) and the NNPC/SPDC JV (Project Santolina).
Both are aimed at boosting reserves and production in line with parts of the federal government’s aspirations for the oil and gas industry.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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