Economy
NLNG Dividend Payment Drops 65.8% in 2016
By Modupe Gbadeyanka
A report by Daily Trust has revealed that dividend payments to the Federal Government for its 49 percent stake in the Nigeria Liquefied Natural Gas (NLNG) have dropped to its lowest since 2007.
A publication of the company’s financials obtained by the paper’s reporter showed that dividend payments to the government fell by $687.6 million or 65.8 percent from $1.04 billion in 2015 to $365.1 million in 2016, the lowest in ten years.
In 2008, the NLNG paid $2.6 billion, $848.6 million in 2009, and $1.4 billion in 2010 as dividends.
However, payments rose to $2.5 billion in 2011 and $2.7 billion in 2012 before sliding to $1.2 billion in 2013 and $1.3 billion in 2014.
The NLNG which is owned by four shareholders: the federal government, represented by the Nigerian National Petroleum Corporation (NNPC; 49 per cent) Shell Gas (25.6 percent), Total (15 percent) and Eni (10.4 percent) produces LNG as well as natural gas liquids for export.
Managing Director of the company, Mr Tony Attah, admitted that 2016 financial year was tough as the market was down.
“People will think it was only oil price that was down. Gas price was down as well,” Mr Attah told journalists in Abuja recently.
Meanwhile, the Group General Manager of NNPC Capital, Mr Godwin Okonkwo, while confirming the latest payment to our reporter said the corporation no longer receives the funds.
“It goes straight to the CBN; we just keep record,” he said.
Remittances of dividends, tax and other payments by the NLNG to the federation through NNPC have in the past caused ripples.
For instance, some of the accusations against the NNPC include a recent NEITI audit which says that while NLNG paid around $1.289 billion as the dividend in 2013 NNPC acknowledged receipt but did not remit it to the federation.
Also previous explanations by the NNPC were that it reinvests the funds in some of its other gas projects were challenged by many Nigerians.
However, Mr Okonkwo said before NNPC spend anything, it gets presidential approval. “Every kobo spent out of that account must have presidential approval.”
Daily Trust also discovered that apart from the $356 million NLNG dividend payout for 2016, the Nigerian federation also enjoyed other payments in form taxes, fees and levies whose value also dropped.
Income Tax/Education Tax payment by the company dropped to $323.2 million from $2.1 billion in 2015; With-holding Tax fell from $222.4 million to $85.2 million; taxes to states and local government also lowered to $1 million from $2.1 million in 2016.
Regulatory fees to government agencies also fell to $23.7 million from 34.4 million in 2015 while payment for local contracts for goods and services also shrank from $610.8 million to $565.6 million in the previous year.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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