Economy
Group Rejects Buhari’s Decision on Addax Oil Mining Licenses
By Adedapo Adesanya
A group known as the Oil Industry Indigenous Capacity Action Committee has faulted President Muhammadu Buhari’s order for the restoration of an earlier cancelled Oil Mining Licences (OMLs) 123, 124, 126 and 137 to Addax Petroleum.
The presidency had issued a statement to disclosed that President Buhari approved the restoration of the leases on the OMLs to the Nigeria National Petroleum Corporation (NNPC), which had a production sharing contract deal with the Chinese government-owned establishment.
The decision had drawn criticisms from several quarters and it was argued that the action was not in line with the current administration’s rule of law, fairness and enabling a stable business environment for businesses.
In a statement, the Oil Industry Indigenous Capacity Action Committee said it was in support of the earlier decision of the Department of Petroleum Resources (DPR) to reallocate the four OMLs to another investor.
In the statement signed by Mr John Adakpabiri, the group said the government was correct to revoke the licences of Sinopec, which acquired the fields when it bought over the original owner, Addax Petroleum in 2009.
It noted that the fields, which have been operating at less than 20 per cent of their peak production since 2009, still hold tremendous potential in oil and gas and will benefit from the new consortium’s cognate experience in the industry.
The group noted that the “new consortium has committed to pay $340 million at the commencement of the PSC to the federal government, a much-needed sum in these hard times of tough government finance.”
“It will be recalled that in March, the DPR announced the revocation and reallocation, which it said was with the express approval of President Muhammadu Buhari. The fields were acquired by Addax Petroleum in 1998 under a PSC (Production Sharing Contract) between it and the NNPC for 20 years.
“The PSC was extended for a further four years, until 2022. Up until Addax was acquired by Sinopec in 2009, it fully funded and operated the development of the OMLs, with profit shared between Addax and NNPC and raised the output in these OMLs to about 130,000 bpd (barrels per day).
“In recent years, there have been no new investments in the assets, and by early this year, 2021, production had declined to 25,000 bpd. As a result, the revenue accruing to Government has significantly reduced. In addition, large gas resources in the assets remain undeveloped, and excess gas has been continuously flared to the atmosphere, contrary to the Government’s policy on gas flaring.
“The allocation of the fields is a refreshing vote of confidence in local firms in the Oil and Gas industry, where a lot of local players have proved their mettle and justified the confidence placed on them.
“The DPP deserves kudos for not only taking the timely decision to reallocate the assets but in making the choice of key local players in line with the Nigerian Oil and Gas Industry Content Development (Local Content) Act designed to promote local Content in the industry.
“We want to commend President Muhammadu Buhari for not only agreeing to the new deal but for his statesmanship and gravitas which has made for discussions to enable a seamless transfer of ownership of the assets between Sinopec and the new owners. Mr President’s warm relationship with the Government and people of China is indeed a boon here,” the organisation stated.
By Adedapo Adesanya
Okitipupa Plc was the sole price gainer at the NASD Over-the-Counter (OTC) Securities Exchange on Friday, August 7, lifting the trading platform by 0.44 per cent at the close of transactions.
The share price of the palm oil producer appreciated during the trading session by N25.00 or 9.0 per cent to N277.00 per unit compared with the previous day’s N252.00 per unit.
As a result, the market capitalisation gained N12.29 billion to close at N2,807 trillion, in contrast to the previous session’s N2.795 trillion, while the NASD Security Index (NSI) added 93.63 points to finish at 4,678.08 points compared with Thursday’s 4,657.59 points.
The bourse recorded a price loser yesterday, and this was Mass Telecoms Innovation Plc, which crashed by 3 Kobo or 9.4 per cent to settle at 32 Kobo per share versus the previous day’s 35 Kobo per share.
The volume of securities traded by investors plunged by 81.5 per cent to 535,7560 units from 2.9 million units, the value of securities slumped by 93.9 per cent to N6.0 million from N99.2 million, and the number of deals decreased by 41.9 per cent to 36 deals from 62 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 transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 77.0 million units exchanged for N5.5 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
A 0.15 per cent growth was achieved by the Nigerian Exchange (NGX) Limited, driven by continued buying interest in banking stocks such as First Holdco and others.
The banking index was up by 1.53 per cent during the session, offsetting the losses recorded by the others. The industrial goods segment fell by 0.37 per cent, the insurance counter shrank by 0.21 per cent, and the energy sector contracted by 0.04 per cent, while the consumer goods space closed flat.
At the close of business, the All-Share Index (ASI) moved up by 364.26 points to 245,573.60 points from 245,209.34 points, and the market capitalisation increased by N235 billion to N158.513 trillion from N158.278 trillion.
Despite the gains printed by Customs Street during the trading day, investor sentiment was weak, as there were 22 price gainers and 24 price losers, indicating a negative market breadth index.
UPDC surged by 9.23 per cent to N3.55, CWG soared by 6.56 per cent to N19.50, AXA Mansard appreciated by 4.80 per cent to N13.10, Neimeth advanced by 4.24 per cent to N8.60, and Cutix improved by 4.00 per cent to N2.60.
Conversely, Red Star Express lost 10.00 per cent to trade at N18.00, CAP declined by 9.98 per cent to N115.45, John Holt shrank by 9.82 per cent to N10.10, ABC Transport depreciated by 9.57 per cent to N5.20, and Legend Internet crashed by 8.70 per cent to N4.20.
A total of 1.5 billion equities worth N26.7 billion exchanged hands in 42,580 deals on Friday versus the 531.8 million equities valued at N20.5 billion traded in 44,826 deals on Thursday, representing a spike in the trading volume, value, and number of deals by 182.06 per cent, 30.24 per cent, and 5.01 per cent, respectively.
The busiest stock during the session was Fortis Global Insurance, with a turnover of 824.5 million units valued at N2.1 billion, FCMB traded 217.9 million units worth N2.8 billion, Access Holdings exchanged 176.2 million units for N4.7 billion, Chams sold 32.5 million units worth N132.1 million, and First Holdco transacted 25.0 million units valued at N3.7 billion.
By Adedapo Adesanya
The Naira further closed south against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 7, by 81 Kobo or 0.06 per cent to N1,365.69/$1 from N1,364.88/$1.
It was a similar situation for the Nigerian Naira in the official market during the session as against the Pound Sterling; it lost N1.08 to quote at N1,839.17 versus the previous day’s N1,838.09/£1, and against the Euro, it slipped by N1.23 to close at N1,575.73/€1, in contrast to the preceding session’s N1,574.80/€1.
Further, at the GTBank forex counter, the Nigerian currency weakened against the Dollar yesterday by N2 to settle at N1,371/$1 compared with Thursday’s N1,369/$1, and at the black market, it traded flat at N1,400/$1.
The country’s legal tender came under FX demand pressure on Friday, with turnover rising by 304.3 per cent to $399.5 million from $98.8 million the previous day, with the number of deals slightly up to 107 from 106.
Next week, traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market could help ease demand pressure.
As for the cryptocurrency market, Bitcoin (BTC) neared the $65,000-mark after it gained 0.8 per cent to trade at $64,968.05, as investors took advantage of recent drops to shore up their holdings.
Previously, the decision by the US Senate to delay a vote on the Crypto Clarity Act until at least September weakened the outlook. The bill, which would set out which US regulator oversees which digital assets, needs 60 votes to pass and it is unclear whether it currently has 50.
Solana (SOL) grew by 2.5 per cent to $74.81, Dogecoin (DOGE) rose by 1.3 per cent to $0.0702, Binance Coin (BNB) jumped by 1.1 per cent to $593.80, Ethereum (ETH) expanded by 0.5 per cent to $1,916.08, Ripple (XRP) also soared by 0.5 per cent to $1.03, and TRON (TRX) appreciated by 0.2 per cent to $0.3275.
However, Cardano (ADA) depreciated by 1.0 per cent to $0.1997, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
