Oil
We never granted NNPC $1.56 billion loan facility – Consortium of banks
ABUJA – The controversy surrounding the planned procurement of $1.56 billion forward sales agreement package by the Management of the Nigerian National Petroleum Corporation, NNPC, to offset debt obligation has been laid to rest by the representative of the consortium of Nigerian banks said to have facilitated the agreement.
In a presentation at the renewed hearing of the Joint Committee of the House of Representatives on the alleged transaction, Mr. Ade Adeola, Managing Director, Project and Export Finance of Standard Chartered Bank, who spoke on behalf of the Consortium of banks restated the fact that the said $1.56 billion facility is not a loan but forward sale of crude oil with advance deposits to be made to the Corporation on standard NNPC sale terms at prevailing market prices.
Before now, the Minister of Petroleum Resources, Diezani Alison-Madueke and the Group Managing Director of the NNPC, Andrew Yakubu had in separate presentations to the House Committee explained that the $1.56billion instrument was not a loan but a proposed forward sales agreement to enable the NNPC settle outstanding debt obligations.
Lending credence to this position, Mr. Adeola explained that the sales agreement which is being brokered by four Nigerian banks namely First Bank, UBA, Eco Bank and Standard Chartered Bank is designed to enable NNPC reduce the debts accruing from petroleum products imports.
“The key idea is to enable NNPC immediately raise the sum of US$1.5 billion to pay down outstanding debts. This is based on a forward sale arrangement which allows a sale of agreed quantities of 15,000 barrels per day of crude oil for a period of five years in consideration of an advanced amount of US$1.56billion paid to NNPC,” Adeola explained.
He explained that the sale of the crude oil by NNPC will be a true sale for which the sale price is calculated on the basis of the open market Nigerian crude oil selling price.
“The structure is the same as implemented on both international and other recent NNPC Joint Venture transactions and is therefore well understood by the international and local financing market,’’ Adeola told the House Committees .
In his contribution, Group Executive Director, Corporate Services of the NNPC, Dr. Peter Nmadu who stood in for the Group Managing Director in Thursday’s session stated that as a public entity, the NNPC is always willing to cooperate with the National Assembly in the execution of the constitutional prescribed over sight function.
Hon. Muraina Ajibola, Chairman of Petroleum Resources Upstream, announced the indefinite adjournment of the Public Hearing.
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.