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Intels seems to be in fresh trouble

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Intels, seems to be in a season of battles as the Oil and Gas Processing Zone Authority (OGPZA) has commenced a probe into the company’s affairs for the past 10 years at the Onne Free Trade Zone. Intels has recently been embroiled in a battle with the Nigerian Ports Authority (NPA0 over its plans to terminate a pilotage contract. The Federal Inland Revenue Service (FIRS) had also recently issued a demand notice over unpaid taxes.

The allegations against Intels

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In a letter dated, written by the Managing Director of the OGPZA Umana Okon Umana, Intels was alleged to have sold off assets imported into the free trade zone, without paying duties. The company by this action, had breached Section 12.6 (a-b) of the Oil and Gas Export Free Zone Act.

Umana, also accused Intels of operating on an expired free trade zone licence, which the company had failed to renew, since December 31st 2016.

Intels reply

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In a letter addressed to the OGPZA, Intels called the allegations spurious and injurious to its business. The company accused the agency of not releasing its 2017 operating licence, despite paying a renewal fee.  Intels, also accused the OGPZA of illegally levying land charges on the premises it was using, which belong to the Nigerian Ports Authority (NPA). The company, has also threatened to take the agency to court, if  it fails to release the licence.

“If you fail or neglect to release the said License within five days of receipt of this letter, we shall have no option but to take appropriate legal steps to compel the OGFZA to release our 2017 FZ Operating License along with all other services and benefits ancillary thereto and accruing to us as FZ Licensee, including the grant of expatriate quotas and re-designations thereof as validly applied for,”

 

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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Economy & Politics

Nigeria’s Bonga crude oil export terminal shutdown

Nigeria’s crude oil output is going to drop further, following the shutdown of the Bonga crude oil export terminal, which is operated by Shell Nigeria Exploration..

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Bonga crude oil

In what appears like a temporary setback, especially in this era of global oil market crisis, Nigeria’s crude oil output is going to drop further.
This is after the shutdown of the Bonga crude oil export terminal, which is operated by Shell Nigeria Exploration and Production Company (SNEPCO).

According to Reuters, the Bonga crude oil export terminal will be shut for routine maintenance for 2 weeks and is expected to be done in a record time.

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In a statement from Shell, the oil firm said that the maintenance of Bonga floating production storage and offloading unit (FPSO) started in May 21.

The oil production firm said, ‘’The scope includes statutory recertification and critical asset integrity activities and the exercise would run until July during which there will be a few days of total shutdown’’.

The Bonga crude oil export terminal was scheduled to load four cargoes in June or 127,000 barrels per day, an increase from the 123,000 barrel per day that was done in May.

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The repairs of the crude oil terminal appear to be behind schedule as Nairametrics had reported that Shell had schedule to carry out the maintenance on the facility earlier with the expectation that it will be ready for use in March.

This exercise is expected to help ensure sustained production and reduced unscheduled production deferments. The turnaround maintenance should involve inspections, recertification, testing and repair of equipment as well as engineering upgrades with Nigerian companies and subsea professional playing key roles.

A major focus is the Bonga floating, production, storage, offloading (FPSO) vessel, which is at the heart of Bonga operations. It has a production capacity of 225,000 barrels of oil and 150 million standard cubic feet of gas per day.

Bonga is Nigeria’s first deep water development in depths of more than 1,000 metres and is located 120km offshore Nigeria. SNEPCO expanded the project with further drilling of wells in Bonga phases 2 and 3 and through a subsea tie-back that unlocked the nearby Bonga North West field in August 2014. Bonga Phase 3 achieved first oil October 2015.

The Bonga is operated by SNEPCO in partnership with Total, Nigerian Agip Exploration Limited, Esso Exploration and Production Nigeria (Deep Water) Limited under a production sharing contract with NNPC.

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Business News

Global oil market to re-balance in 2 months’ time

In the meantime, OPEC+ wants to keep the existing production output cuts beyond the June expiry date as part of efforts to rebalance the market. Countries like Saudi Arabia, the United Arab Emirates (UAE) and Iraq, have all reaffirmed their commitment to this effect.

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Crude oil prices, bonny light

With the uncertainty that still prevails in the global oil market due to the prevailing coronavirus pandemic, analysts have been coming up with different forecasts on the future of the market. The latest forecast is that the market will most likely recover by July 2020.

Crude oil prices and oil demand plunged over the past few months as a result of the pandemic. However, with the lifting of global lockdowns and gradual reopening of global economies, oil prices are expected to rebound. Russia’s energy minister, Alexander Novak, said the global oil supply and the oil demand will most likely rebalance by July.

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In the meantime, OPEC+ wants to keep the existing production output cuts beyond the June expiry date as part of efforts to rebalance the market. Countries like Saudi Arabia, the United Arab Emirates (UAE) and Iraq, have all reaffirmed their commitment to this effect.

In his analysis earlier today, OPEC’s Secretary-General, Mohammed Barkindo, urged OPEC+ members not to flout the output cut. According to him, OPEC+ members must remain committed to production cuts despite signs that oil demand is beginning to recover.

(READ MORE: Oil price gains likely to halt over demand uncertainty, as US-China tension intensifies)

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Global oil market to rebalance in 2 months’ time

On its part, Russia had agreed to cut down its oil production to 8.5 million barrels of crude per day in May and June, down from 10.5 million barrels.  There is a possibility that the country could extend the current level of output cut beyond June, a situation that is expected to serve as a major boost in the rebalancing of the oil market.

Last week, the International Energy Agency (IEA) said that it had seen signs that the oil market would rebalance quicker than originally expected after the United States and OPEC implemented the agreed output cut. The development came as a big relief to Nigeria because the rebound of oil prices and the rebalancing forecast will help reduce the country’s fiscal pressure and boost its revenue.

Note that the Brent crude and Bonny light crude sold for about $36 per barrel and over $33 per barrel respectively. These are above the revised budget oil benchmark of $25 per barrel for the 2020 budget.

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Business

LIRS further extends deadline for filing annual tax returns by one month

“We constantly debated what other measures could be taken as an organization to support individuals and businesses at this time, hence, the additional one-month extension from June 1, to June 30, 2020.” – Ayodele Subair

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LIRS further extends deadline for filing annual return by one month

The Lagos State Internal Revenue Service (LIRS) has again extended the deadline for filing of Annual Tax Returns from May 31 2020 to June 30, 2020.

This is part of the state government’s effort to provide relief to taxpayers in light of the economic impact of the Covid-19 pandemic. With this development, annual returns for individuals, both employees and self-employed persons, can be filed anytime before June 30, 2020.

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In a press release signed by Monsurat Amasa, the head of LIRS’ Corporate Communications Department, the agency urged taxpayers to take advantage of the magnanimity of the government and file their returns. The LIRS’ Executive Chairman, Mr. Ayodele Subair, explained the extension thus:

“As the Lagos State Government keeps abreast of global best practices in containing the Covid-19 pandemic and eases the effects of an economic downturn on taxpayers and residents of the State, LIRS had initially extended the deadline for filing annual tax returns for two months, from the statutory March 31st of every fiscal year to May 31, 2020.  

“We constantly debated what other measures could be taken as an organization to support individuals and businesses at this time, hence, the additional one-month extension from June 1, to June 30, 2020.”

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(READ MORE: COVID-19: Lagos issues new guidelines, considers full reopening of economy)

He further explained that taxpayers can file the annual returns from the comfort of their homes and offices using the LIRS eTax platforms. They can also generate assessment and payment schedule, and other tax administration matters on the same platform. Updates on business operations and alternative payment platforms are to be found on the verified handles, and the LIRS website.

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