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FG’s plan for N350 billion revenue from oil field licensing suffers setback

The 2 marginal fields–the Ororo field, known as OML 95, and the Dawes Island marginal oil field, formerly called OML 54–were among 11 oil licenses that were revoked by the Department of Petroleum Resources (DPR) in April.

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FG’s plan for N350 billion revenue from oil field licensing suffers setback

The Federal Government’s plan to boost its revenue in the face of dwindling oil prices seems to have suffered a setback, as two Federal High Court judges have blocked the government’s effort to revoke two oil field licenses.

This will negatively affect the full licensing round for marginal fields, which the Federal Government plans to launch in the month of June.

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The 2 marginal fields–the Ororo field, known as OML 95, and the Dawes Island marginal oil field, formerly called OML 54–were among 11 oil licenses that were revoked by the Department of Petroleum Resources (DPR) in April. These oil fields were part of the initial 56 fields in the marginal field licensing round.

READ MORE: Justice Gone Awry? The Confounding Case of Petro Union Limited

Justice Oluremi Oguntoyinbo of the Federal High Court in Lagos, on May 29, granted the order of interim injunction against the Minister of State for Petroleum Resources and the Ministry, following a May 18 ex parte application filed by Euratic Energy Ltd for the Dawes Island marginal field, which is located in the swamp terrain about 15km southwest of Port Harcourt, Rivers State.

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The Judge had restrained the defendants, i.e., the Ministry of Petroleum Resources, from disposing, offering, selling, alienating, dissipating, attaching or assigning the Plaintiff’s assets of the Dawes Island marginal oil field.

As for the Ororo marginal field, the presiding Judge of a Federal High Court in Lagos, Muslim Sule Hassan, on May 28, granted an order of interim injunction against the defendants, following a motion ex parte filed by Owena Oil and Gas Ltd.

READ ALSO: PenCom dissolves interim management committee for First Guarantee Pension, appoints new board

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Justice Hassan ordered the parties to maintain status quo in relation to the revocation of the oil license, pending the determination of the motion on notice pending before the court.
This means that the petroleum ministry will not be able to include these oil fields in the planned marginal fields licensing later this month.

Both the Ministry of Petroleum and the DPR did not immediately comment on the new development.

Sometime last month, the Federal Government had disclosed that it was going to delay major licensing rounds for the marginal oil fields due to the coronavirus pandemic. This has seen the revenue projection from signature bonuses drop from N939 billion to N350 billion.

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It was reported that the Federal Government, in April, revoked the mining licenses of 11 oil and gas firms operating in the marginal fields over their inability to turn the assets around, despite being given enough time.

The government said that it was in the best interest of the country to revoke those licenses, as there was urgent need to derive maximum value from available resources, especially in the face of dwindling revenue.

Patricia

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Companies

NSITF board to investigate suspended MD and others over financial misconduct

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FG moves to scrap hazard allowances earned by State Governors

The board of directors of the Nigerian Social Insurance Trust Fund (NSITF) has revealed that it will investigate the activities of the suspended Managing Director, 3 Executive Directors, and 8 other senior management staff over financial breaches and gross misconduct.

This was disclosed by the Chairman of the board of NSITF, Mr. Austin Enajemo-Isire, in a statement in Enugu on Sunday July 5, 2020.

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Enajemo-Isire said that the Managing Director and other top management staff of the organization would have the opportunity to clear themselves of any wrongdoing with the probe panel which was being set up.

While reacting to claims that the suspension did not follow due process as President Muhammadu Buhari did not approve it, Enajemo-Isire said that the approval for the suspension of the affected staff had been conveyed to the Labour Minister in a correspondence referenced SGF. 47/511/T/99 of June 30, 2020.

According to the Chairman, “The minister has conveyed this approval and directives to me for necessary action in terms of setting up a board-driven investigative panel.

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“This is to give the affected officers the opportunity to clear themselves of the financial and procurement breaches and acts of gross misconduct and other infractions that gave rise to their prima facie indictment.

“It is in this light that I have decided to call a virtual meeting of the management board on Tuesday, July 7, 2020, to consider the modalities for our action.”

He, therefore, appealed to staffers of NSITF and their social partners to keep calm and exercise restraint.

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A few days ago, Nairametrics reported the suspension of the Managing Director and some senior management staff over corruption allegations. However, the management in its reaction debunked that claim and said that the President did not approve their suspension but that rather, it was the sole decision of the Labour Minister, Chris Ngige, who they said was overreaching himself.

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Appointments

Fidelity Bank appoints Chike-Obi as Board Chairman

This announcement was contained in a notice signed by the Company Secretary.

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Fidelity Bank has announced the appointment of Mustafa Chike-Obi as Chairman of the Board of Directors. The appointment has been approved by the Central Bank of Nigeria, and will take effect on August 14, 2020, after the expiration of the tenure of the current Chairman, Mr Ernest Ebi.

This announcement was contained in a notice signed by the Company Secretary, Ezinwa Unuigboje, and sent to the Nigerian Stock Exchange.

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Also in the notice, the bank announced the retirement of Mr Seni Adetu, who served as Independent Non-Executive Director on the board. He stepped down from the board after completing his tenure on June 30, 2020.

The board of directors and the management of the bank appreciated Ernest Ebi and Seni Adetu for their contributions to the progress of the bank during their tenures.

“Under the chairmanship of Mr Ernest Ebi, the bank recorded significant growth across key financial metrics, with both Messers Ebi and Adetu playing significant roles, complementing management efforts in the delivery of these milestones; in service of the long-term vision of the bank. The banks market share position has also been materially strengthened over the period,” the notice read.

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The appointment is in line with the bank’s high governance standards and best practices, and in compliance with internal succession policies; Mr Ebi will, over the next six weeks, ensure a successful transition and smooth handover to Chike-Obi.

Mustafa Chike-Obi has over 40 years’ experience in investment banking and the financial services sector, working with reputable global investment banking and asset Management firms. He is currently with the Alpha African Advisory, where he provides leadership and oversees the capital-raising division.

He was the inaugural CEO of the Asset Management Corporation of Nigeria (AMCON), from where he joined Alpha African Advisory.

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He was also founding president at Madison Advisors, a financial services advisory and consulting firm in New Jersey, where he specialised in hedge funds and private equity investment advice.

He holds a bachelor’s degree in Mathematics from the University of Lagos, and an MBA from Stanford University Graduate School of Business.

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Companies

Nigerian Content Intervention Fund increased to US$350 million

The fund expansion was one of the decisions taken at the board’s recent meeting.

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NCDMB, output cut, Petroleum Industry Bill to be passed by mid-2020, says Sylva, FG discovers crude oil in north, says there’s more , OPEC, non-OPEC countries to meet as Saudi, Russia price war affects Nigeria’s budget, FG considers fuel price reduction, OPEC deal: Nigeria to generate additional $2.8 billion revenue as FG reacts

The governing council of the Nigerian Content Development and Monitoring Board (NCMB) announced on Sunday that it has approved a $150 million expansion of the Nigerian Content Intervention Fund, raising it from $200 million to $350 million.

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The fund expansion was one of the decisions taken at the board’s recent meeting on June 16, 2020, chaired by Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, who is also the Chairman of the Council.

The board said that $100 million from the additional fund would be used to boost five existing loan products, which include manufacturing in the oil and gas industry, asset acquisition of rigs, marine vessels, contract financing for Nigerian oil service providers, contract financing for oil and gas community contractors, and loan refinancing with Nigerian banks.

The council also announced that $20 million and $30 million would be used for 2 newly developed loan product types (the Intervention Fund for Women in Oil & Gas and PETAN Products) which include Working Capital loans and Capacity Building loans for PETAN member companies.

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Started in 2017, the Nigerian content Intervention fund was developed as a $200 Million fund managed by the Bank of Industry, to facilitate on-lending to qualified stakeholders in the Nigerian oil and gas industry on five loan product types.

The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry.

According to the NCMB, “About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020.”

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