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NLNG Not For Sale—FG

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Nigeria LNG Limited NLNG

By Modupe Gbadeyanka

Minister of State for Petroleum Resource, Mr Ibe Kachikwu, has disclosed that federal government has no intention to put the Nigerian Liquefied Natural Gas Limited (NLNG) up for sale as being speculated.

Mr Kachikwu made this known on Monday while appearing before an investigative hearing established by the House of Representatives to look into the sale of national assets.

The probe panel is led by Mr Fred Agbedi, a lawmaker from Bayelsa State, who is the Chairman of the House Committee on Gas Resources and Allied Matters.

The Minister, who was represented by the Director in charge of Gas Resources in the Ministry, Mrs Esther Ifejika, disclosed that NLNG would not be sold to investors for whatever reason.

“We are not aware of any plans to sell NLNG by the federal government,” Mr Kachikwu emphatically told the lawmakers.

Also at the hearing, Mrs Ifejika, who said the presentation of the Ministry and that of the Nigerian National Petroleum Corporation (NNPC) were harmonized could not proceed further with the presentation as the committee discovered glaring discrepancies in the documents of the Ministry and that of the NNPC as presented by Bello Rabiu, Chief Operating Officer, (Upstream), who represented the Group Managing Director, Maikanti Baru.

Having rejected both documents for lack of authenticity and signature as observed by members, the panel further queried the NNPC and the Ministry over what it called some staggering increases in the upgrade contract of OML 58 and the execution of the Northern Option Pipeline.

TOTAL E&P who handled the Joint Venture contract said the initial contract sum was $3.451 billion, but was eventually increased to $4.6 billion after consideration of a number of factors.

Given the revelation, members of the panel expressed displeasure over the huge variation in the contracts amounting over $1.15 billion.

Members were however told that the NNPC entered into a JV with Total Exploration and Production Nigeria Limited (TEPNG) and there was a Modified Carry Agreement and award to TEPNG to execute the OML 58 Upgrade 1 in 2008, Obite-Ubeta-Rumuji (OUR) pipeline in 2010, and the Northern Option Pipeline in 2011 respectively.

Explaining the process which he said followed laid down procurement processes, Rabiu of the NNPC, informed the panel that no money had been paid on the variations.

He said following the variations raised by the contractor, the board of the corporation suspended the procurement with a view to subjecting same to the Federal Executive Council (FEC), approval, adding that same is being waited.

According to Patrick Olinma, who represented Total’s managing director at the hearing, contract for the upgrade of OML 58 upgrade 1 and the execution of the Northern Option Pipeline were awarded to Saipim/Ponipcelli/Desicon (SPD) and Sapim/Desicon (SD) Consortiums as the major contractors at an initial contract cost ceiling of $1.665 billion and $472million with a completion date of 2012 and 2013.

“However, during execution, these projects encountered some challenges which led to delays and an increased cost of over $3.8 billion and $921m respectively as at December, 2015 and an additional $79m and about $921m incurred upon full completion resulting in the expenditure of about $175m and $170m respectively,” he said.

Similarly, the contract for the execution of the Obite-Ubeta-Rumuji (OUR) pipeline project in 2010 was awarded to Zahem/Baywood Consortium as the major contractor at the carrying cost of $269million, $293 million and $469million.

Members however, posited that the reason for the variations was because the contractor engaged by Total was incompetent resulting in the extra cost.

But the Total representative said that they had a duty to comply with the local content act and that they were told there were 14 communities which in reality were 74 communities.

The Chairman of the Committee said though the parliament made the law, it did not say that the contractor should be employed as a learning curve, adding that the cost is too staggering to be ignored.

At this point, the panel demanded that both NNPC and Total produce the board’s resolution on the contracts before it was awarded to ensure they comply with procurement laws.

Other requirements include, love of adherence to section 21 of the procurement Act which provides for the constitution of a Procurement Planning Committee, with staff from both sides of the divide deciding the mode of procurement.

Also demanded are the market survey, financial bid evaluation with emphasis on inflation and variation variables, as well as financial and technical bid analysis.

Panel also asked for financial updates on payment, status reports on the projects, saying that the motion’s primary concern dwells on the procurement process.

Additional information from The Nation.

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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Economy

Unlisted Securities Depreciate by 0.41% Friday

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Unlisted Securities Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange returned to the bearish zone on Friday, January 21 after back-to-back stalemates as it depreciated by 0.41 per cent, driven by the negative price movement in Central Securities Clearing Systems (CSCS) Plc.

CSCS Plc closed at N19.38 per unit after moving down by 57 kobo or 2.7 per cent from its previous day’s value of N19.90.

The depreciation in this stock weakened the market capitalisation by N2.6 billion to N630.46 billion from N633.06 billion and slowed the NASD Unlisted Securities Index (NSI) by 3.07 points to wrap the session at 744.54 points compared with 747.61 points of the previous session.

However, there was a surge in the volume of securities traded at the bourse as investors exchanged 4.1 million units, 103,160 per cent higher than the 4,000 units of securities transacted a day earlier.

Likewise, the value of shares traded at the session swelled to N86.9 million, which by evaluation is 11,227.6 per cent higher than N767,100 posted on Thursday.

These transactions were carried out in eight deals, 300 per cent higher than the two deals carried out at the preceding trading session.

Business Post reports that the unlisted securities market wrapped the day without a price gainer.

At the close of trading, the most traded stock by volume on a year-to-date basis was CSCS Plc with 653.6 million units worth N13.7 billion, VFD Group Plc followed with 916,161 units valued at N331.5 million, while Friesland Campina WAMCO Nigeria Plc has traded 205,566 units of its stocks valued at N24.3 million.

Also, CSCS ended the trading session as the most traded stock by value on a year-to-date basis with the sale of 653.6 million units of its securities valued at N13.7 billion, followed by VFD Group Plc with a turnover of 916,161 units worth N331.5 million, while  Friesland Campina WAMCO Nigeria Plc has transacted 205,566 units of its stocks valued at N24.3 million.

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Economy

Naira Falls at I&E as Bears Wipe $1trn from Crypto Market

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Future of the Crypto Market

By Adedapo Adesanya

The Naira recorded a 37 kobo or 0.09 per cent loss against the US Dollar at the Investors and Exporters (I&E) segment of the foreign exchange (forex) market as it traded at N415.10/$1 compared with N414.73/$1 it was traded on Thursday.

It was observed that the Naira came under pressure during the trading session with the value of transactions rising by 56.2 per cent or $60.7 million at the market window to $168.62 million from the preceding day’s $107.92 million.

In the same vein, the local currency depreciated against the American currency at the interbank segment of the market yesterday by 5 kobo or 0.1 per cent to N411.95/$1 from the previous day’s N411.90/$1.

However, the local currency lost 60 kobo against the Pound Sterling to trade at N552.75/£1 in contrast to N553.35/£1 it closed on Thursday and against the Euro, it depreciated by N2.64 to N448.79/€1 from N446.15/€1.

In a related development, the crypto market bled yesterday, with the Federal Reserve intending to withdraw stimulus from the market, riskier assets in the world such as the assets have suffered from over $1 trillion lost in market capitalisation so far.

Russia also added to the fear that seems to be gripping cryptocurrencies as the country’s central bank issued a harsh report on cryptocurrencies, including a potential ban on mining and trading.

Bitcoin (BTC), the largest digital asset, lost more than 9 per cent on Friday and dropped below $36,000, its lowest level since July.

Since its peak in November, it has lost over 45 per cent of its value as it traded at the Naira equivalent of N20,376,819.45.

Other digital currencies have suffered just as much, if not more, with Dash (DASH) plunging 19.7 per cent to trade at N57,825.35, Litecoin (LTC) moved down by 15.9 per cent to trade at N61,392.61, while Binance Coin (BNB) recorded a 15.6 per cent to trade at N152,054.69.

Cardano (ADA) went south by 13.1 per cent to trade at N650, Ripple (XRP) fell by 13.0 per cent to trade at N350.32, Dogecoin (DOGE) declined by 11.3 per cent to sell at N84.80, Tron (TRX) depreciated by 5.9 per cent to N35.99, Ethereum (ETH) made a 5.0 per cent loss to sell at N1,699,900.00, while the US Dollar Tether (USDT) made a 0.2 per cent depreciation to sell for N575.01.

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Economy

Oil Again Falls Under Pressure of US Inventories Rise, Profit Taking

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Nigerian Oil Industry

By Adedapo Adesanya

Oil prices closed in the bearish territory on Friday, falling for another session pressured by an unexpected rise in US crude and fuel inventories after investors took profits after the benchmarks touched seven-year highs earlier in the week.

Brent crude dropped 49 cents or 0.55 per cent to trade at $87.89 per barrel while the US West Texas Intermediate (WTI) lost 41 cents or 0.48 per cent to settle at $85.14 per barrel.

However, both crude benchmarks rose for a fifth week in a row, gaining around 2 per cent this week, showing that prices were up more than 10 per cent so far this year on concerns over tightening supplies.

The Energy Information Administration (EIA) reported the first US crude build since November in the week just as fuel inventories hit an 11-month high in the world’s largest oil consumer.

Crude inventories rose by 515,000 barrels in the week to January 14 to 413.8 million barrels, compared with analysts’ expectations of a 938,000-barrel drop.

Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.

But the latest pullback happened due to a combination of pre-weekend profit-taking and the absence of fresh bullish catalysts.

Analysts also said they expect the current pressure on prices to be limited owing to supply concerns and rising demand.

Tensions in Eastern Europe and the Middle East are also heightening fears of supply disruption as top US and Russian diplomats made no major breakthrough at talks on Ukraine on Friday.

There was, however, an agreement to keep talking to try to resolve a crisis that has stoked fears of a military conflict.

Amid these, there are forecasts that prices will perform their best in recent times this year due to low spare OPEC+ capacity, low inventories and geopolitical tensions rising.

Analysts at Bank of America said they expect to see Brent at around $120 a barrel in mid-2022.

UBS expects crude oil demand to reach record highs this year and for Brent to trade in a range of $80-$90 a barrel for now.

Morgan Stanley has raised its Brent price forecast to $100 a barrel in the third quarter, up from its previous projection of $90.

Meanwhile, in the United States, energy firms cut oil rigs this week for the first time in 13 weeks.

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