Business
FG Dangles Oil Blocs Carrot Before Spanish Investors
The Nigerian government has moved to entice some Spanish investors with the opportunities in the2022 deep offshore mini-bid round.
Minister of State for Petroleum Resources, Timipre Sylva, dangled the carrot in Abuja on Thursday, at a meeting with the Minister of Foreign Affairs of Spain, Jose Albares.
Albares led a large delegation of key investors from Spain to the meeting, where Sylva also expressed the desire for Spain to support Nigeria with security in the oil and gas sector.
The meeting also had senior officials of the Federal Ministry of Petroleum Resources, as well as chief executives of the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, and Nigerian Midstream and Downstream Petroleum Regulatory Authority, in attendance.
The NUPRC had on Wednesday announced the commencement of the 2022 deep offshore mini-bid round, as it promised that the bid process would be competitive and transparent.
Sylva said, “As a country, we need all the investments we require. The oil and gas sector is at the core of our economy, and coming to the country with all these array of investors, it is a major investment opportunity for Nigeria.
“For the (Spanish) minister to come with these array of potential investors, then I’m sure that we have (the) potential of having a lot of investments coming into Nigeria from now.
“The NUPRC has already pitched, they are already in the process of having a bid round.
“And with these number of potential investors on the table, who are people that they (NUPRC) ordinarily would have to meet in their country. Usually, before any bid round, you will have a road show.”
Sylva noted that there was a clamour from some sources to move so quickly to renewables, but stated that as a country, Nigeria felt that it was going to move on the transition train with the instrumentality of gas.
“The rest of the world have also come to see that there is a need for us to tarry a while with gas. So it is mutual on the part of both countries for us to develop the gas resources that we have,” he stated.
On Security, he expressed a strong desire that Spain would be supporting Nigeria with technology to protect to oil and gas sector.
Sylva said, “We have also had discussions on strong support that we would require from them in the area of security. The biggest problem today in the oil and gas sector is security and, of course, Spain is in position to also support us in this area.
“So, in the areas of investment and technology we are going to be looking up to Spain. And Spain looks up to us for further supply of gas. We are also developing a pipeline to Morocco and I believe that it is going to settle this issue of gas supply from Nigeria to Europe.”
On his part, Albares pointed out that Nigeria was Spain’s first supplier in petroleum and gas combined, adding that his country was the second trade partner of Nigeria.
Albares said, “I want to commend the reliability and stability of Nigeria as our supplier. You are a trustful partner. I want to thank the minister who has informed me of the evolution and opportunities of this sector here in Nigeria.
“Nigeria has proven once again that it is a friend and trustworthy partner in this very complex setting – the energy market in the world. Now we have worked out some aspects to develop this bilateral relationship on energy and also in all the aspects that I have been dealing with today here in Abuja.”
Savannah Energy has shared a trading update on its Nigerian operations and other markets in Africa, including up-to-date cash collections in its Nigerian business.
According to the update, made available on Thursday in Lagos, its gross production in Nigeria averaged 23.1 Kboepd for FY 2024, broadly in line with the prior year’s 23.6 Kboepd, of which 88% was gas (FY 2023: 91%).
On the update, CEO of Savannah Energy, Andrew Knott, said, “I am pleased to provide a FY trading update which demonstrates the continued progress we have made in 2024, a year which saw the highest level of cash collections ever recorded by our Nigerian business. 2025 is expected to be an exciting year for our Company: we have a large planned operational programme in Nigeria which is anticipated to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we continue to seek to build our power business.
“Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND power sectors.”
The update It also shows that it generated a Total Income of US$393.6 million in 2024, compared to FY 2023’s US$289.8 million. This consists of Total Revenues of US$258.7 million and Other operating income of US$134.9 million.
The report also shows that Savannah’s FY 2024 Total Revenues were ahead of the previously issued financial guidance of greater than US$245 million, while FY 2024 financial guidance is reiterated for Operating expenses plus administrative expenses at ‘up to US$75 million’. The company expects its FY 2024 capital expenditure to come in lower than planned (previously guided at ‘up to US$50 million’) due to the phasing of spend.
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According to the update, Savannah’s cash collections in 2024 amounted to US$248.5 million, a slight increase from the US$206 million it received in 2023. The report further shows that its cash balances as at 31 December 2024 stood at US$32.6 million, compared to the 31 December 2023 figure of US$107.0 million.
The report shows that the company’s midstream subsidiary, Accugas Limited, had as at 31 December 2024 drawn down on its NGN332 billion of the NGN Transitional Facility, with the resulting funds being converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately US$212.3 million.
The report also provided new updates on Accugas’ US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria, noting that its commissioning which will enable the expansion of gas production in the medium term is well underway.
The report highlighted the progress being made in the procurement process of long lead equipment in Nigeria for a potential two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of supplemental production capacity and a potential exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf (25.7 MMboe) of incremental gas resources.
The update shows that progress is also being made in the planned Savannah acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field (“Stubb Creek”), with regulatory approval and completion being targeted in Q1 2025. Following the completion of the acquisition, Savannah intends to commence an expansion programme which is anticipated to increase Stubb Creek gross production from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd.
In Niger, Savannah continues to seek to progress its 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, while it continues to push for a potential alternative transaction structure to acquire a material stake in producing oil and gas assets in South Sudan as previously announced on 20 December 2024.
On the renewable energy front, the update shows that Savannah has up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon. A firm believer in Africa’s transition to renewable energy, Savannah continues to target a portfolio of up to 2 GW+ of power projects in motion by the end of 2026.
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
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“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
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“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
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