Oil producing companies in Nigeria have been enjoined by the Federal Government to either reduce their cost of production or leave the crude oil in the ground.
This is coming as the government is determined to increase its daily crude oil output and reserves to four million and forty billion barrels, respectively. Unfortunately, the high cost of extracting crude oil in Nigeria, which is one of the highest in the world, has hampered this effort.
Nigeria’s Minister of State for Petroleum Resources, Ibe Kachikwu, made this known while speaking at a symposium organised by the Nigeria Extractive Industries Transparency Initiative in Abuja. According to him, oil producers in the country should take advantage of the newly signed Petroleum Industry Governance Bill (PIGB), as one of the benefits of said bill is its ability to reduce the cost of extracting crude oil.
The bill will also address the issue of cost. Nigeria operates one of the highest costs of extraction among oil provinces in the world. It is clear and clearer that we either produce the oil at a good cost, or we leave it in the ground
Ibe Kachukwu, who was represented by one of his Senior Technical Advisers John Awoyemi, further stressed that it has become imperative for Nigerian oil companies to drastically reduce their cost of production, especially if Nigeria is to compete favourably in the current global oil price order. He also enjoined them to take maximum advantage of their sector by generating as much revenue from oil and gas as possible.
Kachukwu also praised the PIGB bill for the considerable reassurance it has given stakeholders in the industry since its passage.
About the PIGB bill
The Petroleum Industry Governance Bill is aimed at providing the Governance and Institutional Framework necessary for the Petroleum Industry to operate. In the same vein, it also “seeks to incorporate the reforms proposed under the Petroleum Industry Bill. It addresses the reforms to the institutional framework of the petroleum industry. Some of these key reforms include-
- The establishment of an independent regulatory commission, and
- The unbounding of the NNPC into two limited liability companies.
DEAL: ClubHouse raises new Series B funding
The trending social audio app, Clubhouse has commenced another round of funding at a roughly $1 billion valuation.
The invitation-only audio-chat social networking app that’s still in private beta and lets you create rooms where you can talk for hours on end, has been exciting users since it became very popular in the last few months.
Eight months ago, the app, raised $12 million in a Series A round which valued the company at $100 million. Today, investors are trying to buy shares from the company’s existing shareholders at an implied value of $1 billion.
Launched in 2020, the app has grown from a small handful of beta testers into a diverse and growing network of over two million people ranging from—musicians, scientists, creators, athletes, comedians, parents, entrepreneurs, stock traders, non-profit leaders, authors, artists, real estate agents, sports fans and more. They come to Clubhouse to talk, learn, laugh, be entertained, meet, and connect.
According to the startups’ blog post “It’s always been important to us to have investors who care deeply about diversity, and who will work hard to help us make Clubhouse a welcoming and inclusive community. We now have over 180 investors in Clubhouse—large and small, spanning many different races, genders, and areas of expertise, and including many members of our early community”.
Why the funding matters
- This new funding will be used to release the android version of the app since it is only available to IOS users while also investing in technology and infrastructure to keep the servers up.
- The app will also introduce creator monetization to help creators on the platform who host conversations for others to get paid, in form of subscriptions, tipping, or ticket sales. Adding ways for users to pay other users provides an opportunity for Clubhouse to retain its users. There will also be a Creator Grant Program’ being set up by Clubhouse, which will be used to “support emerging Clubhouse creators”
- The startup also plans to invest in advanced tools to detect and prevent abuse, and also increase the features and training resources available to moderators.
- The platform will also see changes in its discovery feature to help people discover new rooms and clubs tailored to their interests.
Nigeria tops South Africa in FDI in 2020 – UN Report
Nigeria, Africa’s largest economy attracted a total FDI of $2.6 billion in 2020 down from the $3.3 billion it attracted a year earlier.
Africa recorded a total FDI of $38 billion in 2020 representing a drop of 18% from $46 billion recorded in 2019, data from the United Nations Trade Association shows.
Nigeria, Africa’s largest economy attracted a total FDI of $2.6 billion in 2020 down from the $3.3 billion it attracted a year earlier. South Africa, a major competitor for FDI inflows in Sub Saharan Africa attracted less with $2.5 billion the report highlights.
Egypt recorded the highest influx of FDI among African countries with a total inflow of $5.5 billion representing a whopping 38% drop. Despite the drop, Egypt remains the top investment destination in Africa.
According to the UN report, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.”
Nigeria has failed to push the needle on FDI investments in the last decade attracting more portfolio inflows compared to direct investment which is viewed as more stable and required to boost economic growth.
FDI-related inflows are mostly targeted at the real sector funding investments in infrastructural development, technological innovation, manufacturing, health care, and Agriculture. According to the United Nations, lower oil prices and the pandemic induced locked down significantly affected Nigeria’s ability to attract inflows.
What UNCTAD is saying
- “FDI inflows to Sub-Saharan Africa decreased by 11 % to an estimated $28 billion. Inflows to Nigeria declined to $2.6 billion from $3.3 billion in 2019.”
- “Lower crude oil prices, coupled with the closure of oil development sites at the start of a pandemic due to movement restrictions, weighed heavily on FDI to Nigeria.”
- The report also indicates South Africa attracted about $2.5 billion during the year about 50% less than the $4.6 billion it attracted a year earlier.
- FDI to South Africa almost halved to $2.5 billion from $4.6 billion in 2019.
- Nigeria lost a massive Google investment after the internet giant preferred to set up in South Africa investing $140 million.
- “However, several large projects were announced including an investment by Google (United States) of approximately $140 million in a fibre optics submarine cable and an additional investment of $360 million by Pepsico (United States) to expand the capacity of Pioneer Foods.”
How the data compares with the National Bureau of Statistics
Nairametrics observed a stark difference between the data captured for Nigeria as FDI by the UN compared to what is recorded by the National Bureau of Statistics.
- Third-quarter NBS data released in November 2020 indicated Nigeria had attracted about $777.6 million which if annualized comes to about $1 billion.
- It suggests Nigeria may have attracted about $1.5 billion in the last quarter of the year which is highly unlikely.
- A further check by Nairametrics reveals the NBS tracks FDI inflows from data obtained from Commercial Banks accounting only for cash received other than commitments to invest in the country.
- A recent Nairametrics article also points to about $4.3 billion in Corporate Deals in the country out of which $1 billion is recognized as FDI-related investment according to our categorization methodology.
Africa compared to other Continents.
According to the report, global FDI flows fell by as much as 42% in 2020 from about $1.5 trillion to an estimated $859 billion.
- According to the report the drop was mostly recorded in developed economies where FDI fell by as much as 69% to $229 billion.
- However, developing economies where FDI is badly needed, recorded a 12% decline representing about 72% of a share of the global FDI.
- However, most of the inflows went to China with about $163 billion, the largest recipient in 2020.
- India’s FDI of $57 billion was higher than the entire $38 billion attracted by African countries.
Sahara Group celebrates 25 years of global expansion, operational efficiency
Sahara plans to mark its 25th anniversary with several events and activities all through 2021 with the theme, “Harnessing Safe energy today.”
Executive Director, Sahara Group, Temitope Shonubi has said the energy conglomerate’s impressive growth trajectory since 1996 has been driven by knowledge, business integrity, humility, diverse people and robust global network.
“These past 25 years, knowledge has been the empowering tool for Sahara, business integrity our greatest asset, humility our utmost ethos, diverse people and network our greatest value,” he asserted while unveiling Sahara’s 25th anniversary logo and the Group’s plan for the future.
Shonubi said Sahara had since disrupted previously held notions that put looking to Africa for the implementation of global energy solutions beyond imagination. According to him, since its inception, Sahara has deployed “transformational energy initiatives” to become a conglomerate with a proud African heritage and vast operations in Africa, Asia, Europe and Middle East Asia.
“Today, the narrative is rapidly changing with Sahara at the vanguard of the transformational story from Africa to the world. Founded in 1996 with an initial focus on Oil trading, Sahara Group is widely regarded as a leading energy conglomerate renowned for championing capacity building and promoting the ‘best in Africa for Africa’ to the world narrative globally,” he affirmed.
Shonubi said Sahara would increase its investment in technology, artificial intelligence, and human capital transformation as critical drivers of its next expansion phase, adding that innovation will define Sahara’s brand positioning and offering In the coming years.
“For us at Sahara, it has been 25 years of instituting a stamp of distinction. Like most start-ups, we were chasers then followers, and today are the dream actualized corporation. It is much more expensive and difficult to be a trailblazer, defying the impossible to emerge as an enterprise that creates value innovatively, responsibly, and sustainably. Still, at Sahara we are focused on remarkable growth and grateful for the opportunity to serve and bring energy to life across global markets.”
Sahara plans to mark its 25th anniversary with several events and activities all through 2021 with the theme, “Harnessing Safe energy today.” Emphasis will be on promoting the “capacity to do and achieve positive and sustainable transformation” in the energy sector.
An analysis of Sahara’s operational model shows that creating a sustainable economic, social, and governance impact has remained central to Sahara’s corporate strategy. The conglomerate has grown its operations to achieve annual revenues in excess of $10 billion, with over 4000 employees and operations in over 40 countries. “Sahara’s focus is on continuous improvement, operational efficiency, and sustainability. We plan to deploy best-in-class Terminal Automation System (TAS) for efficient terminal operations in the oil & gas sector, Plant Data Visualization System (PDVS) for enhanced remote monitoring of plant operations, Customer Energy Management (CEM), and GIS-based Network Monitoring System (GNMS) for customer-centric power distribution & data management services,” said Shonubi.
The Group considers the activities of the Sahara Foundation as one of its most cherished accomplishments. Following its initial partnership with the Carter Centre to eradicate guinea worm disease in Nigeria, Sahara Foundation has over the years, emerged as a global promoter of the Sustainable Development Goals (SDGs), with over 2,000,000 (two million) beneficiaries across its locations through interventions in Health, Education, Capacity Building, and lately, Extrapreneurship – a concept that promotes opportunities for social innovators and entrepreneurs.
In 2015, the UNDP (United Nations Development Programme), through the Sustainable Development Goals Fund (SDG-F) established the Private Sector Advisory Group (PSAG) as a pivotal platform for business leaders opportunity to contribute to extraordinary social impact and cultivate partnerships of tremendous transformative capacity. From an initial list of 100 shortlisted global multinational companies, the United Nations SDG-F selected 13 companies and inaugurated them in Madrid. Within the African continent, Sahara Group was one of the only two companies that made the final selection.
In line with its commitment to supporting growing global demand for safe and clean energy and the shift towards a lower carbon footprint, Sahara and the UNDP in 2019 entered into a partnership to promote access to clean and affordable energy in Africa, with a target of providing access to clean and affordable energy to over 650 million people in Sub-Saharan Africa.
“Sahara Group remains passionate about green energy and environmental conservation. Our Green Life project, aimed at driving energy and ecological conservation initiatives across our business operations and partnerships, saw the Group pioneer the commencement of an electronic billing system (e-billing) at Ikeja Electric Plc, the Group’s power distribution arm to promote environmental conservation in the energy sector,” Shonubi said.
To reinforce its commitment to clean energy initiatives, Sahara Group also initiated the use of electric buggies and bicycles at its Egbin Power, Africa’s largest privately-owned Power Plant, with plans to replicate same at other operational facilities across the Group.
Shonubi said Sahara’s zero-waste approach to promoting operational efficiency and commitment to the fight against the COVID-19 pandemic has seen Egbin Power Plc invest in an oxygen bottling facility on the plant to harness the oxygen generated as a by-product of the plant cooling mechanism. Egbin Power supplies oxygen, a key ingredient in the fight for life in the ICU, freely to medical facilities in Lagos State and the FCT, Abuja Nigeria, through Fortitude Children’s home, the largest orphanage in Nigeria.
Sahara’s Covid-19 interventions also include donation of personal protective equipment (PPE), driving Covid-19 awareness and education in sub-Saharan Africa through educational literature in indigenous languages across various countries and leading the delivery of the 300-bed Thisday Dome Isolation and Treatment Centre and donation of medical equipment, including fully equipped world-class Intensive Care Units, to the centre and other medical facilities across Nigeria.