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5 Key Highlights Of The Proposed ‘Split PIB’

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The Federal Government announced on Monday that it was going to split the PIB into smaller laws enable it pass through legislation. The Petroleum Industry Bill (PIB) has been in the cooler since 2008 as oil majors, Northern State Governors and legislators reject several provisions in the act. The APC government now believes the easiest way to let it pass will be to not just split the bill but to also strip out several controversial portions of it. We summarized the key highlights of the proposed bills.

Split PIB into multiple passable versions

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The Government now believes the easiest way to get the PIB to pass will be to split it into smaller versions that strips out controversial aspects of the former bill. The newer versions will focus mostly on fiscal and regulatory measures in Nigeria’s energy sector. By splitting the bill into several versions, the non controversial aspects of the bill can pass legislation thus ensuring that investments continue to flow into the country. Nigeria is currently facing an economic crisis that precipitated by the fall in oil prices amidst an oversupplied market.

NNPC Will Be Split Into Two

We further learnt that the NNPC will be split into two. The Nigerian Petroleum Assets Management Co (NPAM) and  the National Oil Company (NOC). The NOC will be an “integrated oil and gas company operating as a fully commercial entity” and will be run like a private company. We also understand that the NOC will be partly owned by the government and at some time in the future may also list on the Nigerian Stock Exchange and most likely the London Stock Exchange. The NOC will also be starting out with about $5 billion in startup capital or funds large enough to fund its cash call obligations with its joint venture partners.

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The NPAM is likely to be the regulatory arm of the new NNPC and is expected to manage assets ”where the government is not obligated to provide any upfront funding”. These include oil licenses run under production-sharing agreements in which independent oil companies cover operating costs and pay tax and royalties on output.

Tax controversies

The current PIB is said to include several tax provisions that have been largely criticized by oil major doing business in Nigeria. According to Oil majors, they believe that the tax provisions of the PIB will render all deepwater projects and all dry gas projects non-viable. According to sources, the current PIB draft includes a provision that will have oil companies pay 50% profit tax for onshore and shallow water areas and a 25% for frontier acreage and deep-water areas.

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It is expected that the watered down version will address these issues and allay the concerns of investors who have so far denied Nigeria of an estimated $15 billion annually in lost investments.

Oil Minister’s Powers

The new version of the bill was not clear on what the powers of the Oil Minster and the President will be. Currently the President can allocate oil blocks at will and the Oil Minister is not answerable to the Senate either. It is however expected that the watered versions of this bill will still need to curb excessive powers of the Minister and the President in overseeing the industry.

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Sweeping regulatory powers

According to Reuters, a new Single Industry Regulator, Nigeria Petroleum Regulatory Commission (NPRC) will be setup and will likely replace the Department of Petroleum Resources (DPR), PPMC, PPRC and other splinter regulatory agencies littering the oil sector. The NPRC is expected to oversee everything from oil license bid rounds to fuel prices. They will also likely have powers to seize items and make arrests without a warrant.

 

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Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

1 Comment

1 Comment

  1. Dan

    December 10, 2015 at 6:20 am

    Hi Ugo, thanks for the update. Please note that there are 3 entities proposed: A regulator, an asset manager and a commercial enterprise; NPAM isn’t the regulator. Find below the link for a draft of the bill http://www.yourbudgit.com/wp-content/uploads/2015/12/Final-PETROLEUM-INDUSTRY-GOVERNANCE-AND-INSTITUTIONAL-FRAMEWORK-BILL-2015-2-12-2015.pdf

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Companies

UBA denies N41 billion NITEL fraud allegations

United Bank for Africa (UBA) has described the alleged N41 billion fraud levied against its Chairman, Mr Tony Elumelu, as untrue, misleading, malicious, and libellous.

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UBA Records 13% Earnings Growth and Delivers N111billion Profit

The Management of the United Bank for Africa (UBA) has described the alleged N41 billion fraud levied against its Chairman, Mr. Tony Elumelu, as untrue, misleading, malicious, and libellous, and said that it should be disregarded in its entirety.

This was disclosed in a statement issued by the bank to the Nigerian Stock Exchange and signed by the company’s secretary, Bili Odum, on Friday. Media reports in some online blogs alleged the former CEO of the bank was indicted” prompting the bank to issue a denial via a press release.

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In the press release stated Statement To The Nigerian Stock Exchange on False Reports in the Media, the bank stated that “it has set in motion all appropriate legal actions to ensure that the misleading reports are retracted and the perpetrators held accountable for their actions”.

READ MORE: Guinea Insurance Plc gives optimistic Q3 earnings forecast in spite of COVID-19

It also stated that it will “continue to conduct its business in line with global best corporate governance practices, extant laws, and regulations,” as it has done in over 70 years of operations.

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Back story: The counsel to NITEL, J.U Ayofu petitioned the Senate Committee Chairman on Ethics, Privileges and Public Petitions about the alleged fraud. The committee chairman, Senator Ayo Akinyelure, claimed the ”the N41billion alleged fraud was committed against the defunct Telecommunications company and National Carrier, NITEL”

They alleged the amount was withdrawn “systematically from NITEL for nine years” under the leadership of the bank.

READ ALSO: N1.5 billion Probe: Contractor could land in EFCC net for abandoning CCB project 

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Senate Committee Chairman on Ethics, Privileges and Public Petitions, Mr. Ayo Akinyelure, reportedly said, “The N41 billion alleged fraud was committed against the defunct telecommunications company and national carrier, NITEL.

According to the reports, in view of this, the senate committee has summoned the Group Managing Director/CEO of UBA, Mr. Kennedy Uzoka, to appear before it on Wednesday, August 5, 2020.

UBA denies wrongdoing

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Despite the allegations, the Management of the Bank denied all the allegations and will use all legal means to clear its name. “We have set in motion all appropriate legal actions to ensure that the misleading reports are retracted and the perpetrators held accountable for their actions.”

READ ALSO: More banks, insurance firms declare closed periods ahead of H1 results release

UBA’s 2020 second-quarter result is expected to be released next week. The market appears to have shrugged off the allegations as thee company’s share price closed at N6.2  gaining 3.3% week on week.

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Airtel Africa’s profit up 12.9%, customer base reaches 111.5 million

Airtel Africa had risen in customers’ base by 11.8% to 111.5 million in spite of the pandemic.

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Airtel Africa’s profit up 12.9%, customer base reaches 111.5 million in Q2

Airtel Africa on Friday posted an impressive Q1 ending June 2020 financial statement with an operating profit of $210 million up by 12.9%which showed a 111.5 rise in customers’ base of 11.8% to 111.5 million in spite of the ravaging COVID-19 pandemic. The Company also reported an operating profit of $210 million up by 12.9%.

Airtel reports its year end March 31st 2020.

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Key highlights of Airtel Africa Q1 2020 include;

  • Customer base grew by 11.8% to 111.5 million.
  • Revenue increased by 6.9% to $851m, with constant currency revenue growth of 13.0%
  • Constant currency revenue growth was recorded across all key business segments, with voice revenue up by 2.2%, data by 35.7%, and mobile money by 26.3%.
  • Underlying EBITDA increased by 7.9% to $375m, with constant currency growth of 14.6%
  • The reported underlying EBITDA margin was 44.1%, up by 40 bps.
  • Operating profit increased by 12.9% to $210m, an increase of 21.5% in constant currency
  • Free cash flow was $96m compared to $62m in the same period last year.
  • Earnings per share (EPS) before exceptional items was $1.0 cents and basic EPS was $1.1 cents.
  • Net debt to underlying EBITDA was 2.2x, compared to 3.0x in June 2019.

(READ MORE: Airtel Africa announces IPO result in Malawi, says its fully subscribed)

Raghunath Mandava, chief executive officer, Airtel Africa explained the company’s business was to survive the COVID-19 pandemic amid all odds. He said;

“During the last quarter, our business was impacted by the Covid-19 pandemic, as restrictions on movements of people and ways of socializing were introduced to contain the spread of infection. In these unprecedented times, we have worked with governments, regulators, partners, and suppliers to keep customers and businesses connected as well as supporting the economies and communities.

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“We focused on expanding and maintaining our network to ensure it could cope with increasing demand, we kept our distribution up and running by increasing the penetration of digital recharges and stock levels, and we expanded our home broadband solutions to ensure customers could work and access entertainment remotely.”

Raghunath Mandava, chief executive officer, Airtel Africa spoke about growing concerns on the resurgence of COVID-19, but he was optimistic based on Airtel Africa’s present result and investment. He continued by saying ;

“The outlook remains uncertain, particularly regarding a so-called potential second wave of infections and the actions governments will decide to take in that event. However, these results are further evidence of the growth opportunities our markets offer and the effectiveness of our strategy to focus on winning customers, investing in our network and expanding our voice, data and mobile money businesses.”

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The stock is presently trading at N348 with a market capitalization of N1.308 trillion, dividend yield at 3.38%, price/earnings ratio at 10.63 at the time this report was drafted.

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Business

MTN expands scope of tower service, targets rural connectivity

The development would also improve cost for future technology evolution and backhaul in the network.

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MTN Nigeria, MTN Nigeria Communications Plc. begins N100 billion commercial paper issuance today

MTN Nigeria Communications Plc has reached an agreement with Global Independent Connect Limited, INT Towers Limited and IHS Towers Limited to expand the scope of their current service agreements, amend the currency conversion provision for tower services.

This was disclosed in a statement issued by the telecommunication firm and published on the website of the Nigerian Stock Exchange.

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Chief Executive Officer, MTN Nigeria, Ferdi Moolman, explained that the company is pleased to agree to the mutually beneficial update to its agreements with IHS, adding that the changes would provide clarity for both parties on foreign exchange denomination with Naira payments, while also extending the telco’s relationship into key new areas.

READ MORE: Africa Prudential suffers revenue drop as Covid-19 bites contracts business

What it means: With the concluded renegotiation of certain terms of its tower agreements, the telco giant can now increase focus on rural connectivity and fibre deployment. The development would also improve cost for future technology evolution and backhaul in the network, which will bear fruit in the longer term while agreeing to move the reference rate for conversions to Naira from the Central Bank of Nigeria’s official rate to the Nigerian Autonomous Foreign Exchange Rate (NAFEX).

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Moolman said, “I am particularly excited about the partnership to expand fibre connectivity and deliver accelerated rural telephony. The COVID-19 pandemic has demonstrated the huge importance of digital infrastructure, and these agreements enable us to enhance fibre networks, while rapidly connecting those Nigerians in rural areas that are currently unable to access telecommunications services.”

READ ALSO: Profiles of the men who determine your internet experience

In 2014, MTN Nigeria took a strategic decision to sell its passive infrastructure (including towers) and focus on its core business. Although the company retains a small number of towers, it currently has agreements in place with a number of tower providers across the country, including IHS.

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