Economy
NCDMB, NEXIM Sign $30m Capacity Building Fund
By Adedapo Adesanya
The Nigeria Content Development and Monitoring Bank (NCDMB) and the Nigeria Export-Import Bank (NEXIM) have signed an agreement on a $30 million capital and capacity building fund for the oil and gas sector servicing.
This was disclosed by the Executive Secretary of NCDMB, Mr Simbi Wabote, at the signing ceremony in Abuja on Wednesday, explaining that the fund would go a long way to stabilise the sector.
“I want to commend Oil Producers Trade Section (OPTS) because 98 per cent of the fund that we utilise in NCDMB are contributed by the OPTS members who generate this money for us.
“I know that OPTS and Independent Petroleum producers Group (IPPG) at some point raised before NCDMB that ability of most of the indigenous contractors to provide service to them due to funding challenges, especially when we got struck by COVID-19.
“I recalled receiving several letters, particularly from IPPG, trying to see how we support this and also I recall receiving a similar letter from Petroleum Technology Association of Nigeria (PETAN) when the COVID-19 pandemic struck.
“And most people have nothing to do anymore because companies were shut down and most were threatening on how to downsize and kick off their payroll.
“Based on this, we then set up a committee to see how we can support, so this funding scheme is working capital intervention which is happening with NEXIM bank, our other intervention fund is still with Bank of Industry (BOI) and it has been very successful with almost 98 per cent compliance in terms of pay back of the loan.
“So, the roll-out date for this new scheme is expected to be July 1, 2021, and the fund size is $30 million and it will be boosted by matching fund of the same amount to be provided by NEXIM bank in naira, to be converted at the prevailing official exchange rate.
“So, whatever NCDMB is putting on the table will be matched in naira terms with the NEXIM bank to support working capital provision for those providing services in the oil and gas sector,” he said.
He said that the scheme would cover loan for working capital support and also capacity building, invoice discounting and capacity building including the acquisition of low-end equipment to service contracts and service obligation.
He said that fund would also under project categories cover, invoice discounting, oil service contracts, capacity building including financial advisory and literacy and low-end equipment and asset acquisition that the fund could accommodate.
Mr Wabote noted that the target market includes Nigeria oil service providers that belong to a professional association in the Nigerian oil and gas industry and commercially viable in a business relationship with either the IOCs or the indigenous oil and gas producers.
“The maximum amount that can be borrowed by a single obligor is one million dollars or its naira equivalent at the official exchange rate prevailing at the time of the borrowing.
“The tenure shall be up to 12 months for working capital loans and up to three years for capacity building loan for a moratorium of up 12 months.
“The applicable interest rate shall be five per cent per annum for all foreign currency denomination and eight per cent per annum for Naira denominated loans and the rate shall be fixed throughout the tenure of the loan.
“The maximum processing time as agreed with NEXIM will be 21 working days from the date the applicant has provided all required documents broken down as follows 12 working days for loan application processing by NEXIM, five working days for NCDMB concurrence for loan approved by NEXIM and the remaining for disbursing by NEXIM,” he said.
He said that these timelines had been agreed upon, adding that all application would be through a web and NEXIM would develop and avail a dedicated portal to facilitate the process.
He noted that for transparency, no application should come to NCDMB, adding that all application should go to NEXIM bank, similar to what NCDMB do with the BOI.
He said that access would be given to NCDMB members to be monitoring and for other necessary functions to make sure that all protocols are observed.
Mr Wabote said that eligibility transaction for the fund comprised transaction connected with oil and gas services contracts, contracts that boost the operations and viability of qualifying members.
Others are transactions for the supply of low earned assets and other equipment for the execution of oil and gas contracts for IOCs, indigenous and National oil companies.
“The suite of collaterals requirement will cover loans under the scheme listed as follows, certified invoices by NEXIM, association guarantee, when we get all the necessary documentation that such an association is viable, assignment of contracts, cooperate guarantee are also considered by NEXIM.
“Irrevocable domiciliation of proceeds are also part of the requirement, irrevocable standing payment order from the receiving banks will also be looked at as part of the requirement and insurance cover with NCDMB and NEXIM noted as payees.
“Each party to the scheme, NCDMB and NEXIM shall bear 50 per cent credit risk for loan repayment and will be entitled to an equal share of interest income, each month,” he said.
Mr Wabote said that after provision of the 50 per cent of capacity building of operators of the NEXIM shall in addition remit to NCDMB interest on the undisbursed portion of the fund.
He said that NEXIM would also provide the brain work and facilities for joint monitoring of loan utilisation and project execution by both NCDMB and NEXIM and maintain separate books of account for the scheme.
According to him, the relevant NCDMB office will have access from time to time.
“NCDMB shall be responsible for the appointment of external auditors that would carry out annual statutory audits for the scheme each year as required by law.
“This whole process was subjected to NCDMB governing council and approved as what must be done to support the oil and gas industry,” he added.
He said that the fund could be regarded as President Muhammadu Buhari’s intervention to keep the oil and gas sector afloat after COVID-19’s impact as had been done to other sectors of the economy.
He commended the Minister of State for Petroleum Resources, Mr Timipre Sylva for the support in getting the scheme available.
In his remarks, the Managing Director of NEXIM, Mr Abba Bello said the bank was pleased to be part of the fund to ensure that services were afloat in the oil and gas sector.
He said that it would surprise many that NEXIM was involved in oil and gas issues but this was because service was also exportable.
“As oil and gas sectors of other African countries, especially open up the capacities that we have built over time in the Nigerian sector becomes exportable to African countries and oil economies.
“We are very happy to be part of this and we are going to support the development and build enough capacity of indigenous service providers to be able to take them to other oil economies.
“We believe that services provide over 15 per cent of Nigeria GDP, we should be able to take out into other climes, this partnership with NCDMB is a step towards our aspiration to take services into the continent and eventually to the global market,” he said.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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