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Economy

South-South Governors Want Host Community Oil Fund at 10%

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Niger Delta

By Adedapo Adesanya

The Governor’s of oil-rich South-South Nigerian states have demanded an upward review of the provision of 2.5 per cent as Host Community Trust Fund in the keenly debated Petroleum Industry Bill (PIB) to 10 per cent, in the best interest of oil communities and the country.

This was made known by the Chairman of the South-South Governors Forum and Governor of Delta State, Mr Ifeanyi Okowa, at the end of the forum’s meeting which held at the Government House, Port Harcourt.

“We took up the issue of the PIB which is already before the House, and having compared notes with ourselves, we are of the view that while we welcome the Host Community Trust Fund, we do believe that the 2.5 per cent that is appropriated in that bill for the purpose of host community fund is inadequate.

“We have discussed with our people and collectively as leaders of the people in our various states and as leaders standing in on behalf of our people, we urge that the National Assembly should increase the provision in the host community fund from 2.5 per cent to 10 per cent in the best interest of our communities and in the best interest of our nation,” Mr Okowa said on behalf of his colleagues.

The South-South governors maintained that the communities have a role to play in the surveillance of the nation’s oil facilities and pipeline network.

They expressed the belief that if the communities feel satisfied with the provision of funds for them in the PIB, they are more likely going to be the watchdog on behalf of the federal government, the states and oil companies.

“And the peaceful environment that would be seen in the various oil communities would enable us to have greater production and a seamless production in which we do not have any form disruption in our oil productions going into the future,” he submitted.

Governor Okowa described as worrisome the running of the NDDC in over a year by an Interim Caretaker Committee, and now, an interim administrator.

According to him, this situation does not augur well for the people of the Niger Delta as an opportunity for all states to be represented as they ought to be represented in the board of the NDDC does not exist.

“So, it means that the NDDC is actually run in such a matter that it is actually not truly beneficial to our people, because there is no stakeholders input in the running of the affairs of the NDDC.

“We do know that there is a forensic audit taking place and if that reason the board has not been constituted, our advise is that monies being sent to the NDDC should be put in an escrow account until a board is constituted and then proper processes are followed in the expenditure of the money in a such a way it will be visibly accountable in the best interest of the peoples of the Niger Delta,” the Governor stated.

The Governors demanded that whenever the board of the NDDC is constituted, the advisory council must be called upon to place its role to ensure there are check and balance in such a matter that the states will truly have value for money expended by the NDDC.

They also advised President Muhammadu Buhari, that in the absence of the board of the NDDC, funds for the commission beyond the payment of salaries should be put in an escrow account until he constitutes the board.

“We feel already shortchanged as a people in the Niger Delta and we believe that we do not wish to see this kind of situation continue going forward into the future, because our people feel the pains, we do not want a situation where there is an abuse of processes, neither should we have a situation where we have abuse of funds,” they noted.

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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Economy

Absa Lauds Regulatory Framework for Trading Digital Assets in Nigeria

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trading digital assets

By Modupe Gbadeyanka

The decision of the Securities and Exchange Commission (SEC) to provide a regulatory framework for investing and trading digital assets, including cryptocurrencies, in Nigeria has been applauded by Absa Nigeria.

The chief executive of the leading pan-African bank, Mr Sadiq Abu, while appearing on CNBC Africa’s Power Lunch Show recently, expressed optimism that this development will boost the confidence of investors in the digital assets landscape.

He particularly commended the apex regulatory agency in the country’s capital market for recognising digital assets as securities and making efforts to regulate investments in the sector.

He said, “SEC decided to be proactive around cryptocurrency and digital assets. The SEC has realised that these are rightly called securities and further created a framework to bring them within the broader securities regulatory framework in Nigeria.

According to him, the SEC has also created a framework for protecting investors by requiring investments to be held by digital assets custodians and acknowledged that exchanges or platforms for trading digital assets needed to be regulated.

“There is also an overarching framework for regulating all participants that play in the digital assets space through a specialised license called Virtual Assets Services provider,” Mr Abu stated.

He pointed out that a new rule stipulating tenure and other qualifications of the Chief Executive Officer and Principal Officers of Digital Assets Offering Platforms was similar to the regulations of the Central Bank of Nigeria (CBN).

According to him, this is a clear indication that the SEC and CBN worked together to develop the new framework for the operation of digital assets.

He stated, “There is clear evidence that the SEC is working hands in glove with the CBN to create a regulatory framework for the operation of digital assets and the regulation of CEOs and Principal Officers fall under the broader approved person regime of the SEC.”

SEC had recently published a new guideline on Issuance, Offering Platforms and Custody of Digital Assets, fulfilling the promise it made last year to examine the digital currency to gain a better understanding and develop regulations to protect investors.

Absa, which has a strong footprint across the African continent, offers investment banking and market products through its various Nigerian registered subsidiaries, namely Absa Representative Office Nigeria Limited, Absa Capital Markets Nigeria Limited, and Absa Securities Nigeria Limited.

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Economy

FG Moves to Improve Midstream, Downstream Operations

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downstream operations

By Adedapo Adesanya

The federal government, through the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has disclosed plans to unveil six regulations on midstream and downstream operations.

The regulations are being put in place to bring clarity to the sector as well as improve business processes and ease of doing business in the sector.

According to the Authority Chief Executive (ACE) of NMDPRA, Mr Farouk Ahmed, in a statement after a meeting with the Independent Petroleum Producers Group (IPPG), said the regulations are gas pricing, environmental management plan, environmental remediation fund, decommissioning and abandonment, gas infrastructure fund, and natural gas pipeline tariff.

The ACE also informed that a Working Team chaired by Mr Ogbugo K. Ukoha, Executive Director, Distribution Systems, Storage & Retailing Infrastructure (DSSRI) was set up to review the draft regulations, engage and consult stakeholders for smooth implementation when released.

Mr Ahmed further stated that the Authority was working hard on reducing the sector’s import dependency with more active efforts placed on local options.

“One of our key concerns is boosting local refining. Dangote and BUA refineries are coming on board; however, we want to see more companies investing in refineries so we can stop the importation of refined petroleum products, save our foreign earnings, create jobs and add value to the economy,” he explained.

The NMDPRA boss noted and commended the gradual growth of indigenous players in local exploration and production of petroleum products. He assured of the organisation’s commitment to making the business climate in the midstream and downstream conducive for local and foreign investment to thrive.

On his part, the IPPG Chairman, Mr Abdulrazaq Isa had said that the IPPG was an association of 25 indigenous Exploration and Production (E&P) companies with the vision to promote the continued development of the Nigerian Petroleum Industry for the benefit of industry stakeholders and the nation.

Mr Isa noted that timely communication with industry players was important at this time when the agency was going through a transition period, calling on NMDPRA to, as a matter of urgency, enact regulations on tariffs, domestic gas and clear license issuance modalities amongst others.

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Economy

NNPC, Sahara Group Invest $300m to ‘Circulate’ Clean Energy in Africa

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NNPC profit 44 years

By Adedapo Adesanya

The Nigerian National Petroleum Company Limited (NNPC) and leading energy and infrastructure conglomerate, Sahara Group, have taken delivery of two 23,000 CBM Liquefied Petroleum Gas (LPG) vessels.

The delivery happened on Monday at the Hyundai MIPO Shipyard in Ulsan, South Korea, with plans to add 10 vessels in 10 years to enhance Africa’s transition to cleaner fuels.

The new vessels, MT BARUMK and MT SAPET have increased NNPC and Sahara Group’s joint venture investment to over $300 million, approaching the JV’s $1 billion gas infrastructure commitment by 2026.

The fleet previously comprised MT Sahara Gas and MT Africa Gas. All four vessels were built by Hyundai MIPO Dockyard, a foremost global manufacturer of mid-sized carriers.

WAGL Energy Limited, the JV company between NNPC and Oceanbed (a Sahara Group Company) is driving NNPC’s five-year $1 billion investment plan announced in 2021 to accelerate the decade of Gas and Energy transition agenda over the period.

Speaking on this, NNPC’s GMD, Mr Mele Kyari disclosed that the order of three additional new vessels was being finalised, adding that “we have a target of delivering 10 vessels over the next 10 years. The NNPC and our partners stand out with integrity in our energy transition quest and our commitment to environmental sustainability is unwavering.”

MT BARUMK and MT SAPET are WAGL and Sahara Group’s injections into the JV. WAGL is shoring up its gas fleet and terminal infrastructure, while Sahara Group continues to make remarkable progress in the construction of over 120,000 metric tonnes of storage facilities in 11 African countries, including Nigeria, Senegal, Ghana, Cote d’Ivoire, Tanzania, and Zambia, among others.

Mr Kyari also said the vessels were critical to driving the Federal Government’s commitment to the domestication of gas in Nigeria through several initiatives and increasing seamless supply in compliance with the mandate of President Muhammad Buhari.

The initiatives –  the LPG Penetration Framework and LPG Expansion Plan are geared towards encouraging the use of gas in households, power Generation, auto-gas and industrial applications in order to attain 5 Million Metric tonnes of LPG consumption by 2025.

“This is another epoch-making achievement for the NNPC and Sahara Group, and we remain firmly committed to delivering more formidable gas projects for the benefit of Nigeria and the entire sub-region,” Mr Kyari said.

On his part, Mr Temitope Shonubi, Executive Director, Sahara Group, said: “WAGL has successfully operated two mid-sized LPG Carriers MT Africa Gas and MT Sahara Gas in the region in keeping with global standards, delivering over 6 million CBM of LPG across West Africa. With the new vessels, we are set to promote and lead Africa’s march towards energy transition.”

Mr Ali Magashi, Nigeria’s Ambassador to South Korea who represented the Federal Government, noted that President Muhammad Buhari deserved commendation for the Petroleum Industry Act (PIA) which he said would reposition the NNPC to explore more projects with partners like Sahara Group.

BARUMK was derived from the combination of the name and initials of the late NNPC GMD, Dr Maikanti K. Baru, in fond memory of his immense support for the Gas development in Nigeria. “SAPET” is named after the Sahara – Petroci (the Ivorian National Oil Company) JV LPG Company (SAPET Energy SA.), currently constructing phase one of a 12,000MT LPG storage facility in Abidjan, with expansion plans to achieve 30,000MT in phase two. The JV emerged from WAGL’s trading relationship with PETROCI, dating back to 2014.

LPG is the fastest-growing petroleum product in sub-Sahara Africa over the last decade, with forecasts indicating that LPG will grow at a 7 per cent Compound Annual Growth Rate (CAGR) over the next 15 years.

Increased uptake of LPG will reduce net Green House Gas (GHG) emissions and pressure on forest reserves, thereby increasing environmental sustainability.

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