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Board to Disqualify NCDF Payment Defaulters from Oil Contracts



By Modupe Gbadeyanka

Oil and Gas Companies that default in the deduction and remittance of one percent of the value of contracts they executed in the upstream sector of the oil and gas industry will henceforth be disqualified from participating in tenders for new contracts.

This warning was given by the Nigerian Content Development and Monitoring Board (NCDMB) and also indicated plans to conduct a forensic audit of the industry to track and recover due payments on the Nigerian Content Development Fund (NCDF) held by some companies.

The NCDF was established by Section 104 of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act of 2010 and provides that one percent of every contract in the upstream sector of the Nigeria Oil and Gas industry shall be deducted at source and paid into the Fund.

The Board manages the Fund and employs it for projects, programmes and activities directed at increasing Nigerian Content in the Oil & Gas industry.

Speaking in Lagos at the Stakeholders Forum on the NCDF Remittances, the Executive Secretary of the Board, Engr. Simbi Wabote stated that some companies were defaulting in their deduction and remittance on contracts they executed.

He noted that the Forum provided a window for all covered entities to understand the channels for paying the one percent NCDF to the Board before the audit, adding that there were no exemptions for players in the upstream sector.

He charged companies to make the remittance to the NCDF TSA Account with the Central Bank of Nigeria (CBN) stressing that NCDMB does not operate an account in any commercial bank.

Giving a background to the Fund, Mr Wabote explained that the NCDMB focused the early years in collections, putting in place the Operating Model for utilization of the Fund, establishing the NCDF Advisory Committee for efficient governance of the Fund and creating confidence and trust of industry stakeholders.

According to him, “The Board opened up the Fund for utilization from 2013, based on the approved operating model that segmented 70% of the Fund to financing Commercial interventions and 30% for Developmental initiatives and activities carried out by the Board on behalf of the industry.

“Under Commercial interventions, the Fund was leveraged to provide 30% Partial Guarantee to commercial banks for loans granted to oil and gas service companies towards financing project execution, asset acquisition or facility upgrade. It also provided 50 percent interest rebate on performing loans. Beneficiaries of the Fund include Ladol, Starz and Vandrezzer.”

Speaking further, the Executive Secretary stated that Developmental Interventions covered Capacity Development Initiatives (CDIs) including training programmes, NCCF administration, establishment of NOGICJQS, establishment of oil and gas parks, direct equity participation by the Board in high impact projects as well as compliance monitoring activities carried out by the Board on behalf of the industry

The introduction of the Treasury Single Account (TSA) policy by the Federal Government and the need to deepen accessibility of the Fund for critical activities, he said, created the need to re-engineer the Operating Model of NCDF

He noted that “to enhance accessibility to the Fund, the Board in July 2016 signed a Memorandum of Understanding (MOU) with the Bank of Industry (BOI) to establish the Nigerian Content Intervention Fund (NCI Fund).

He confirmed that the Board was at the verge of finalizing the processes for release of the initial $100 Million (N31 Billion) to BOI for the pilot phase. Once this was concluded, he said, the Board will conduct a roadshow and publicise the requirements for accessing it.

He stated that only contributors to the Fund with manufacturing proposals in the oil and gas industry can approach BOI for the NCI Fund facility. The Fund has a single obligor limit of $10 million and tenor of up to 5-10 years on the basis of 8 percent interest rate.

In his presentation, the General Manager, Finance and Accounts, NCDMB, Mr Obinna Ofili explained that remittances of the NCDF has to be made in the currency of the contract, notably, Naira, USD, GBP and EUR.

He confirmed that though the Act provided that deduction should be based on awarded contract sums, the Board adopted the invoice model to make it convenient for stakeholders.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Acorn Petroleum Halts Bearish Run at Unlisted Securities Market



Acorn Petroleum

By Adedapo Adesanya

The negative run at the NASD Over the Counter (OTC) Securities Exchange could not run into the fourth straight day on Thursday, March 4.

At the trading session, the NASD Security Index (NSI) and the market capitalisation recorded almost traded flat as there were marginal gains.

The market capitalization had closed Wednesday’s trading session at N498.99 billion, but yesterday, it slightly moved higher by 0.004 per cent or N20 million on Thursday to close at N499.01 billion.

In the same vein, the NSI rose by 0.003 per cent or 0.02 points to close at 695.47 points as against the 695.45 points it finished on Wednesday.

Business Post reports that the pause to the bearish run at the unlisted securities market yesterday was triggered by the growth in the share price of Acorn Petroleum Plc. The energy firm appreciated by one kobo or 6.63 per cent to close at 17 kobo in contrast to 16 kobo it traded at the previous session.

At the market yesterday, the total volume of shares transacted by investors increased by 8,901 per cent from 20,614 units to 1.9 million units.

However, the value of shares transacted on Thursday dropped 61.9 per cent to N875,347 from N2.3 million recorded at the midweek session.

But the total number of deals executed went up by 100 per cent as 12 deals were executed at the NASD OTC Exchange compared with the six deals carried out at the preceding session.

It was observed that FrieslandCampina WAMCO Nigeria Plc and Central Securities Clearing Systems (CSCS) Plc executed three deals each.

In addition, Air Liquide Plc executed two deals, while Food Concepts Plc, Fumman Agric Product Industries Plc, Industrial and General Insurance (IGI) Plc and Acorn Petroleum Plc all executed one deal each.

UBN Property Plc remained as the most traded stock volume-wise (year-to-date) with the sale of 15.5 million units valued at N16.8 billion. CSCS Plc has transacted 4.7 million units worth N74.5 million, while FrieslandCampina has exchanged 2.7 million units worth N332.2 million.

In terms of the most active stock by value (year-to-date), FrieslandCampina topped the chart with the sale of 2.7 million units valued at N332.2 million. Niger Delta Exploration and Production (NDEP) Plc has transacted 612,249 units valued at N198.1 million, while CSCS Plc has traded 4.7 million units worth N74.5 million.

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Fidson Closes as Worst-Performing Stock as Index Sheds 0.40%



Nikkei stock index

By Dipo Olowookere

It was a bad day for Fidson Healthcare Plc on the floor of the Nigerian Stock Exchange (NSE) on Thursday as its share price depreciated by 10 per cent.

This poor performance occurred on a day information emerged that the company’s N10 billion commercial paper programme was accepted on the trading platform of FMDQ Securities Exchange.

During the trading session, shares of the healthcare firm went down to N4.41 per unit from the previous N4.90 per unit as investors trimmed their stake in the organisation.

Fidson was among the 47 price losers recorded at the market yesterday. It was closely followed by Northern Nigerian Flour Mills, which declined by 9.97 per cent to sell at N6.32 per unit.

Nigerian Enamelware lost 9.95 per cent to trade at N19.90 per share, NEM Insurance depreciated by 9.95 per cent to close at N1.72 per unit, while NCR Nigeria dropped 9.91 per cent to quote at N3.09 per share.

Business Post reports that there were 12 price risers yesterday and University Press led the chart after its value appreciated by 9.91 per cent to trade at N1.22 per unit.

Morison grew by 9.09 per cent to close at 60 kobo per share, CAP gained 5.26 per cent to sell for N20 per unit, Lafarge Africa gained 3.59 per cent to close at N20.20 per unit, while Livestock Feeds grew by 3.17 per cent to N2.28 per share.

Yesterday, only the industrial goods index closed positive as it appreciated by 0.19 per cent, while the insurance, banking, consumer goods and energy sectors depreciated by 4.04 per cent, 1.54 per cent, 1.47 per cent and 0.65 per cent respectively.

For the All-Share Index (ASI), it decreased by 157.39 points to 39,364.67 points from 39,522.06 points, while the market capitalisation depreciated by N82 billion to N20.596 trillion from N20.678 trillion.

On the activity chart, there was an improvement as the trading volume rose by 101.84 per cent to 493.2 million units from 244.3 million units, the trading value increased by 14.40 per cent to N4.7 billion from N4.1 billion, while the number of deals rose by 16.38 per cent to 5,486 deals from 4,714 deals.

Unlike the preceding day, Universal Insurance was the most active stock with the sale of 83.3 million units of its shares valued at N16.7 million.

Zenith Bank dropped to the second position after it sold 38.7 million units worth N983.3 million, FBN Holdings transacted 31.3 million stocks for N216.7 million, UBA traded 26.8 million equities valued at N211.6 million, while Access Bank exchanged 21.6 million shares for N168.1 million.

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Relief as Naira Appreciates to N406.50/$1 at I&E FX Window



Naira appreciates

By Adedapo Adesanya

The local currency continued to fight back heavily against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange (FX) market.

On Thursday, the Naira appreciated against the greenback at the I&E FX segment by N4.50 or 1.1 per cent to close at N406.5/$1 in contrast to N411/$1 it closed at the previous session.

The strengthening of the Nigerian currency occurred yesterday despite a fresh increase in the demand for forex at the market in preparation for the weekend rush and expenditures.

During the trading session, transactions worth $66.99 million were executed at the market window, $33.84 million or 102.1 per cent higher than the $33.15 million recorded on Wednesday.

However, at the other market levels, the Naira maintained its stability against the United States Dollar.

According to data obtained by Business Post from AbokiFX, a platform used for tracking activities at the unregulated segment of the FX market in Nigeria, the domestic currency closed flat against the greenback at the black market yesterday at N480/$1.

Also, at the same parallel market, the Naira further remained unchanged against the Pound Sterling and the Euro at N672/£1 and N580/€1 respectively.

Equally, at the interbank window of the FX market, the Naira traded flat against the American currency at N379/$1, while at the Bureaux De Change (BDC), the domestic currency traded flat against the greenback at N395/$1.

A quick look at the cryptocurrency market showed that yesterday, four of the seven cryptocurrencies tracked by Business Post on Quidax closed bullish, while three were bearish.

On the gainers’ angle, Ethereum (ETH) appreciated by 0.5 per cent to sell at N1,023,545.00; Ripple (XRP) recorded a 1.4 per cent gain to trade at N294.68; the US Dollar Tether (USDT) grew by 3.3 per cent to trade at 630.24; while Tron (TRX) rose by 1.2 per cent to sell at N32.18.

On the losers’ space, Bitcoin (BTC) dropped 3.8 per cent to trade at N31,349,949.97; Dash (DASH) went down by 3.3 per cent to sell at N141,987.00; while Litecoin (LTC) while depreciated by 2.0 per cent to trade at N119,897.00.

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Oil Surges 4% as OPEC+ Surprisingly Retains Output



OPEC Daily Basket

By Adedapo Adesanya

Oil surged by more than 4 per cent on Thursday to the highest in more than a year after the Organisation of the Petroleum Exporting and its allies (OPEC+) surprised traders with its decision to keep output unchanged.

The Brent crude rose by 4.64 per cent or $2.97 to sell at $67.04 per barrel, while the West Texas Intermediate (WTI) crude increased by 4.59 per cent or $2.81 to sell at $64.09 per barrel.

At its meeting on Thursday, OPEC+ decided to keep a tight limit on oil production in April, sending prices soaring in a market that had been expecting additional supply. This signalled a tighter crude market in the months ahead.

The cartel had been debating whether to restore as much as 1.5 million barrels a day of output but Saudi Arabia was able to convince members to hold steady at current levels.

However, modest increases were granted to Russia and Kazakhstan and will be allowed to increase production by 130,000 and 20,000 barrels per day, respectively.

Now, oil prices are expected to do better as the supply squeeze, coupled with higher energy costs, the risk of inflation, and widespread vaccination, will allow economies to emerge from the COVID-19 downturn.

Before the meeting, Saudi Arabia had publicly encouraged allied partners to remain “extremely cautious” on production policy, warning the group against complacency as it sought to ensure a full oil market recovery. The outcome of yesterday’s meeting has been touted as a victory for the kingdom, which has consistently pushed to tighten the market.

In a briefing after Thursday’s meeting, Saudi Energy Minister Prince Abdulaziz bin Salman, went one step further by making the kingdom’s additional one million barrel-a-day production cut open-ended. He gave no date for phasing out the voluntary reduction and told reporters he was in no hurry to do so.

While the decision will boost economies like Nigeria and other oil-dependent economies, it also carries some risks. Crude prices in the high $60s could help revive US shale drillers.

OPEC+ initially agreed to cut oil production by a record of 9.7 million barrels per day last year, before easing cuts to 7.7 million and eventually 7.2 million from January. The cartel will meet again on April 1 to discuss production levels for May.

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FMDQ Approves Fidson’s N10bn Commercial Paper Programme



Fidson Healthcare

By Dipo Olowookere

The N10 billion commercial paper programme of Fidson Healthcare Plc has been accepted by the board listings, markets and technology committee of FMDQ Securities Exchange.

According to the Chief Financial Officer of Fidson, Mr Imokha Ayebae, the debt instrument would be used to meet the short-term working capital requirements of the organisation.

He described the registration of the CP programme of the platform as significant because it coincides with the 26th anniversary of the company.

“We are glad about the successful registration of Fidson Healthcare Plc’s N10.00 billion CP programme on the FMDQ platform.

“This is particularly significant as it coincides with the company’s 26th anniversary on March 1, 2021.

“Since its inception in 1995, Fidson Healthcare PLC has remained committed to the growth of the healthcare sector in Nigeria,” he said.

Speaking further, Mr Ayebae said, “This strategic move aligns with our vision to be the preferred healthcare provider as a leading player in the pharmaceutical manufacturing industry in Nigeria and West Africa.

“The CP programme, which is poised to further broaden the company’s sources of capital by accessing funding from the Nigerian debt capital markets, will also reduce our overall funding costs.

“Proceeds from this programme will be used to meet the company’s short-term working capital requirements which are geared towards providing quality services to our valued customers.”

Also commenting, Mr Taiwo Olatunji, the Head of Investment Banking at FSDH Capital Limited, which acted as the lead arranger to the issue on FMDQ Exchange, said the move will give the healthcare firm global visibility.

“FSDH Capital Limited is pleased to act as sponsor and lead arranger on the registration of the Fidson Healthcare Plc N10.00 billion CP programme on the FMDQ platform.

“We believe that the admission of the CP on the FMDQ platform will ensure its global visibility and enhanced liquidity, which will, in turn, raise the corporate profile of the issuer even further ahead of tapping into other opportunities in the Nigerian capital market.”

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Dangote Refinery Will Benefit Nigeria—Oil Marketers



Dangote Refinery

By Adedapo Adesanya

Despite potential effects on its operations, the Major Oil Marketers Association of Nigeria (MOMAN) has expressed its optimism about the 650,000 barrels per day Dangote Refinery in Ibeju Lekki, Lagos, saying it will be beneficial to Nigeria when it begins production.

This was made known by Mr Clement Isong, the Executive Secretary of MOMAN while speaking with newsmen on Thursday in Lagos.

The association used the opportunity to advise the federal government against preventing marketers from importing refined petroleum products when the refinery, saying others should be allowed to come on stream in order to create an open market for the sector.

Mr Isong said there was merit in insisting on a minimum in-country investment in order to encourage investment in the oil and gas industry.

“However, as a core principle, MOMAN believes that free-market competition remains the best protection for the final consumer and this would be our most important consideration.

“MOMAN’s position would therefore be, not to limit the importation of refined products to refiners only, but allow importers with a set minimum level of investment in the oil and gas supply chain in Nigeria.

“Furthermore, there would be a need for us to operate under a uniform exchange rate regime irrespective of who imports or refines,” he said.

According to the Executive Secretary, this also includes the exchange rate used for the purchase of crude in Naira or the purchase of refined products in order to ensure a level playing field.

He noted that the concept of buying crude in Naira from the government and selling its refined products in Naira to Nigerians was an interesting concept that needed to be properly worked out.

“It is an interesting concept not just for Dangote Refinery but for all refineries in Nigeria to be able to access the crude in Naira.

“The Governor of Central Bank of Nigeria on television espoused the benefits it would bring the country in terms of foreign exchange rate management.

“Obviously, details would need to be worked out as several questions remain unanswered.

“For instance, since crude is priced internationally in US dollars, what rate would be used to convert to Naira?

“Secondly, is it correct to say that if you use crude locally for refining, it is not included in the Organisation of Petroleum Exporting Countries (OPEC) quota?

”If this is correct, to fully benefit, therefore, we would need to produce enough to meet our full export quota under the OPEC regime and optimise the foreign exchange inflows as well as produce enough locally to meet local refining requirements,” Mr Isong added.

He said an additional benefit would be that any refined products that were in excess of Nigeria’s needs could be exported for additional foreign exchange earnings.

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