Economy
Nigeria May Lose $10b from Oil & Gas Lease Renewal—Senate
By Modupe Gbadeyanka
The Senate on Wednesday raised an alarm of the possibility of losing about $10 billion from the ongoing lease renewals in the oil and gas sector.
In order not to make the nation loss such a huge amount from the exercise, especially at this time the country was borrowing to fund its budgets, the Senate has summoned the Minister of State for Petroleum Resources, Mr Ibe Kachiwku.
At the plenary yesterday, the upper legislative arm of government directed its Committee on Petroleum Resources (Upstream) to investigate issues lease renewals.
In a motion titled ‘Irregularities in Ongoing Oil and Gas Lease Renewal and Massive Loss of Government Revenue’ by Mr Omotayo Alasoadura and three other senators, it was alleged that, “The Minister and the Department of Petroleum Resources were proceeding to renew leases of companies that had brazenly and illegally refused to pay royalties from oil and gas lifted by the companies in contravention of extant laws.”
According to Mr Alasoadura, the Committee on Petroleum Resources had since December, 2017 been inundated with petitions and complaints over alleged multiplicity of irregularities surrounding the renewal of oil and gas leases.
“The action of the Minister of State is capable of short-changing the country and denying the Federation the appropriate revenue accruable from the renewal of the leases,” he warned.
The lawmaker said, “Under the provision of extant laws, failure to pay royalties is a ground for revocation of leases and a legal barrier to renewal of applicable leases.”
“There is a subsisting legal framework and due process mandated by extant law for the renewal of leases that are due,” he added.
According to him, the alleged irregularities are capable of denying government revenue in excess of $10 billion as a result of illegal discounts and rebates in the process of lease renewal.
The lawmaker said that efforts by the senate committee to engage DPR on the matter failed.
According to him, the Department of Petroleum Resources wilfully and deliberately refused to provide the committee with relevant information and data related to the lease renewal.
“There is need to thoroughly investigate the lease renewal in view of the potentially alarming impact this will have on government in terms of loss of revenue accruable to the federation.”
In his contribution, Mr Shehu Sani said that the motion was an indication of the rot in the oil and gas industry, adding that $10 billion was huge revenue that the country could not afford to lose.
“From the substance of this motion, it is very clear that the Minister of State has in every possible way been engaged in acts that contravene the law.
“Over a year ago, he wrote an open letter raising issues about transparency and impunity in the oil sector.
“The issue of lease is something that has been on the front burner of national discourse in the last few weeks.
“What this parliament can do is to once and for all bring the minister to make clarification on the actions he has taken as 10 billion dollars is no small amount of money.
“I am of the belief that if we can get to the root of this matter, it will also open other cans of worm,” he said.
On his part, Mr Rafiu Ibrahim stressed the need to expand the investigation.
“The President is the Minister of Petroleum Resources, maybe that is why this motion is not mentioning the Minister of Petroleum Resources.
“We are aware that the Minister of State ordinarily does not have the final approval for this type of case.
“There is a Board of NNPC and the Ministry and it is out there, though yet to be substantiated that the Chief of Staff to the President is a member of the board and is literally in charge of the board and the ministry.
“I will just want the prayer to expand those to be called in the investigation.”
In his remarks, Deputy President of the Senate, Mr Ike Ekweremadu, who presided at plenary, charged the committee to carry out thorough investigation on the issue.
He stressed the need for proper oversight by the committee, adding that “what matters most in cases like this is transparency in our oversight functions”.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active 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 worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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