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OML 49: Nigeria to Pay Transnational Energy $20m Damages



Transnational Energy

By Adedapo Adesanya

A Federal High Court in Abuja has ruled in favour of Transnational Energy Limited in the dispute over Oil Mining License (OML) 49 oil field and has ordered Nigeria to pay the firm $20 million damages.

According to the court judgment, Nigeria is expected to restore the Hely Creek and Abigborodo fields in OML 49, farmed-out to Transnational Energy Limited by the Nigeria National Petroleum Corporation (NNPC)/Chevron Joint Venture, back to the company (Transnational Energy).

The lease, which was concluded in 2017 between Transnational Energy and the joint venture operators, Chevron Nigeria Limited, was, among others, for the purpose of providing feedstock to a gas-to-power project developed by Transnational Energy and partners which started in 2012.

In February 2017, the Department of Petroleum Resources (DPR) had conveyed a letter of consent by the Minister of Petroleum Resources, approving the farm-out and its terms and equally directed the company to pay a prescribed premium to the federal government, after which the lease would become effective.

Transnational Energy paid the prescribed fee, but in January 2019, the late Chief of Staff to President Muhammadu Buhari, Mr Abba Kyari, wrote a memo revoking the earlier ministerial consent on the instruction of the President.

The DPR, without any notice to Transnational Energy, put the two fields in the 2020 marginal fields basket, though the fields were not part of the original 57 fields approved for the bid round.

The plaintiff (Transnational Energy Limited) and its sister company in the power business, Bresson A.S. Nigeria Limited, filed a suit FHC/ABJ/CS/1067/2020 in the Federal High Court, Abuja to challenge the actions of the respondents – the minister of petroleum resources, the minister of state for petroleum resources, the Department of Petroleum Resources, the National Petroleum Investment Management Services (NAPIMS), and the Attorney of the Federation and Minister of Justice.

The suit, which was filed by way of general originating summons by Transnational Energy’s lawyer, Mr Sijuwade Kayode, was backed by a 27 paragraphs affidavit and 16 exhibits.

Transnational Energy contended that the fields were legally farmed-out to it and that having paid the prescribed premium to the federal government, the farm-out was completed and that the later actions of Mr Kyari were null and void.

The plaintiff asked for four reliefs amongst which is the award of $20 million as liquidated damages against the defendants.

The company exhibited its audited accounts, business plan, and financial model, which shows both plaintiffs had jointly expended $22.718 million on the development of the gas and power side of the project.

The financial models also showed it has lost an estimated sum of over $164 million due to the actions of the defendants while the federal government itself may have lost over $68 million in royalty and taxes not earned as a result of the actions of the defendants.

In paragraph 7 of the affidavit, the plaintiffs asserted that its gas-to-power project elicited massive international cooperation spanning over 15 countries and involving over 100 international experts. As a matter of fact, the Hungarian Exim Bank went to parliament to amend its legislation in order to raise her scope of participation in the power side of the projects.

The defendants on their own part argued that the court lacks jurisdiction to hear the case and that the actions of the plaintiff were “statute barred”. They also argued that the DPR, which communicated the letter of 2017, has no power to grant marginal fields and that only the President can do so.

In two and a half hours judgment running to 58 pages, the presiding judge in the case, Justice Taiwo Taiwo, held that the court has jurisdiction because the issue is that of contract. He listed a number of authorities to back his judgment.

Justice Taiwo held that the doctrine of presumption of regularity for the action of the DPR in the cases favours the plaintiff.

He held that Mr Kyari had no locus to act in the manner he did. He counselled government officials to always abide by contracts entered into and not to seek to terminate or abort them after the government has financially benefitted from such contracts and that the sanctity of contract is fundamental to the development of the economy.

The judge also held that the defendants did not challenge the claimant’s deposition and exhibits of its financial statements and therefore, he will be granting the main relief sought and not the alternative reliefs. He awarded $20 million as liquidated damages against the defendants.

Business Post understands that one of the defendants might have filed a notice of appeal backed by an application of stay of execution of the judgment.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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FBN Holdings Confirms Otedola as Shareholder with 5.07% Stake



FBN Holdings

By Dipo Olowookere

Mr Femi Otedola now controls a 5.07 per cent stake in FBN Holdings Plc, the company has confirmed.

This is coming barely 24 hours after the financial institution said it was not aware of the businessman being a major investor in the organisation.

There were reports a day earlier that the former Chairman of the defunct Forte Oil Plc was now the single largest shareholder of the firm, which owns First Bank of Nigeria Limited.

“The attention of FBN Holdings Plc has been drawn to media reports today, October 22, 2021, purporting that a certain individual has acquired a significant shareholding interest in FBN Holdings Plc, therefore, making him the majority shareholder in the company.

“As a listed company, the shares of FBN Holdings Plc are publicly traded, and sale and acquisition of shares is expected in the normal course of business. We operate in a regulated environment, which requires notification of significant shareholding by shareholders to the company, where shares are held in different vehicles, further to which the company will notify the regulators and the public as appropriate.

“The company is yet to receive any notification from the individual mentioned in the media report, of such acquisitions.

“FBN Holdings Plc will always notify the appropriate agencies and authorities whenever it receives any notice of significant shareholding by the shareholders and the company’s registrars,” the statement released by the firm on Friday had stated.

But today, the company issued another statement, informing the investing public that Mr Otedola now owns 5.07 per cent of the company’s equities. This is coming after it was reported that he acquired N30 billion worth of FBN Holdings stocks on the Nigerian Exchange (NGX) Limited.

The financial institution said it received a notification today concerning this development.

“We refer to our communication to the market dated October 22, 2021, on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the shareholder.

“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their client, Mr Otedola Olufemi Peter, and his nominee, Calvados Global Services Limited, have acquired a total of 1,818,551,625 units of shares from the company’s issued share capital of 35,895,292,791.

“Based on the foregoing, the equity stake of Mr Otedola Olufemi Peter and his nominee in the company is now 5.07 per cent,” the disclosure said.

Business Post reports that with this development, Mr Otedola will likely have one of two persons on the board of FBN Holdings to represent his interest. A change in the board of directors of FBN Holdings is likely to happen in the coming days, weeks or months.

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Buhari to Finally Launch eNaira October 25




By Dipo Olowookere

On Monday, October 25, 2021, President Muhammadu Buhari will formally launch eNaira, the much-awaited electronic Naira, the Central Bank of Nigeria has confirmed.

The digital legal tender for the country introduced by the CBN was initially scheduled for launch on October 1, 2021, but was shelved.

According to the apex bank, the botched introduction was a result of activities clashing with the event and in order not to let other events overshadow the eNaira launch, it was postponed indefinitely.

But on Saturday, the CBN announced next Monday as the new date for the introduction of the electronic currency under the Central Bank Digital Currency (CBDC).

A statement issued by the Director of Corporate Communications, Mr Osita Nwanisobi, disclosed that Mr Buhari will perform the formal launch at the State House in Abuja.

It was stated that after the event by the President, the eNaira, which has the theme Same Naira, more possibilities, will become available to Nigerians to use as it would be activated.

The CBN said a structure has been put in place to promptly address any issue that might arise from the pilot implementation of the eNaira, with room for further engagement with “various stakeholders.”

The bank said “the eNaira is a culmination of several years of research work” in advancing the “boundaries of the payments system in order to make financial transactions easier and seamless for every strata of the society.”

According to the central bank, it had robust discussions with “the banking community, fintech operators, merchants and indeed, a cross-section of Nigerians” concerning the eNaira and said it was satisfied with the outcome of the talks, stressing that the eNaira “marks a major step forward in the evolution of money” and would ensure that the digital currency, “like the physical Naira, is accessible by everyone.”

“Given that the eNaira is a journey, the unveiling marks the first step in that journey, which will continue with a series of further modifications, capabilities and enhancements to the platforms.

“The CBN will continue to work with relevant partners to ensure a seamless process that will benefit every user, particularly those in the rural areas and the unbanked population,” it added.

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Friesland Drowns Unlisted Securities Market by 0.33%



Friesland WAMCO

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed in the negative territory at the last trading session of the week on Friday by 0.33 per cent.

It was the first time the market was closing bearish this week and this drowning of the unlisted securities market yesterday was caused by a decline in the equity price of FrieslandCampina WAMCO Nigeria Plc. The price of Friesland went down by 6.7 per cent or N8 to settle at N120.00 per share in contrast to N128.00 per share of the last session.

As a result, the market capitalisation of the exchange dropped N2.04 billion to close the day at N617.59 billion in contrast to N619.63 billion it finished on Thursday.

In the same vein, the NASD Unlisted Security Index (NSI) depreciated by 2.47 points to wrap the session at 747.53 points compared with 750.00 points of the previous session.

Despite the loss recorded yesterday, two securities closed in the positive region led by Central Securities Clearing Systems (CSCS) Plc, which rose by N1.15 or 6.4 per cent to close at N17.95 per unit versus the previous N16.80 per unit.

Also, NASD Plc appreciated during the session by 5 kobo or 0.37 per cent to quote at N13.70 per share as against the N13.65 per share it traded at the preceding session.

At the market on Friday, a total of 292,000 units of securities were transacted by investors in contrast to the 209,300 units of securities transacted at the previous session, indicating a rise of 6.1 per cent.

Equally, the value of shares exchanged by the market participants went up by 14.7 per cent to N4.9 million from N4.3 million recorded at the previous session.

These transactions were carried out in five deals, 16.7 per cent lower than the six deals carried out at the preceding session.

Food Concepts Plc was the most active stock by volume (year-to-date) as it has traded 11.4 billion units of its shares for N14.4 billion. Lighthouse Financial Services Plc occupied the second spot as it has traded 1.1 billion valued at N546.1 million, while Geo Fluids Plc took third place with 1.0 billion units worth N700 million.

In terms of value, Food Concepts Plc also topped the chart with 11.4 million units traded for N14.4 billion, Nigerian Exchange (NGX) Group Plc remained in the second spot with 456.4 million units valued at N9.2 billion, while VFD Group Plc maintained the third spot with 10.4 million units valued at N3.5 billion.

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