The Nigerian National Petroleum Corporation (NNPC) has signed a memorandum of understanding (MoU) with Russia’s Lukoil, which happens to be one of Russia’s largest energy companies.
A press statement released by Lukoil said Mele Kyari and Lukoil’s Vagit Alekperov both signed the agreement which will see both companies potentially working together in the areas of crude oil exploration, refining, and trading.
The MoU is one of the outcomes of the ongoing 2-day Russia-Africa Summit which Nigeria’s President Muhammadu Buhari is participating in, alongside other top delegates such as Mele Kyari, NNPC’s Group Managing Director.
“According to the Memorandum, the parties intend to consider possible cooperation in the exploration, production, and refining of hydrocarbons in Nigeria as well as upscaling existing trading relationships.
“The document also provides for possible design and technical cooperation between the companies and the provision of LUKOIL’s know-how in the implementation of production and refining projects.”
At the moment, the actual nature and terms of this agreement are not known to the public. Notwithstanding, the NNPC’s GMD confirmed the development when he retweeted a Twitter post stating that he and his team met with some Russian energy companies to seek for ways to rehabilitate Nigeria’s inefficient refineries.
The Team engaged Russian state owned company & private entities to secure development cooperation of mutual benefit. Refinery rehabilitation & gas infrastructure development on the front burner. #RussiaAfricaEconomicSummit #PMBinRussia @NGRPresident @BashirAhmaad @toluogunlesi
— NNPC Group (@NNPCgroup) October 23, 2019
Why this matters: Although Nigeria is one of Africa’s leading crude oil producers, the country’s energy sector remains one of the most underdeveloped on the African continent. Refineries are inefficient and underperforming, thereby leading to over-dependence on importation of refined petroleum products to meet local demand.
This has been a long-standing problem, with lots of failed efforts to remedy it. It is, therefore, expected that the agreement with Lukoil will help to profer solution.
Lukoil was incorporated in 1991 and over the last 25 years, it has been one of the world’s leading energy companies. The company extracts and refines crude into petroleum products and petrochemicals.
Africa’s richest woman agrees to cooperate in corruption probe
Isabel dos Santos was accused of misappropriating billions of dollars in Angolan State-owned assets.
Africa’s richest woman, Isabel dos Santos, has agreed to cooperate with Angolan authorities who are probing her after corruption allegations were leveled against her last year. As Nairametrics had earlier reported, dos Santos was accused of misappropriating billions of dollars in Angolan State-owned assets during the 38-year rule of her father.
Earlier on, dos Santos had denied any wrongdoing and accused the Angolan Government of witch-hunting her. In other words, she categorised the allegations against her as politically motivated. Now, she has changed her stance.
Bloomberg quoted her to have said,“What I want to resolve as quickly as possible are the attacks on my reputation and my good name. I’m available, as I always have been, to cooperate with justice and to provide all the necessary clarifications so that the truth prevails.”
Recall that last week Thursday, the Portuguese Government seized shares she owns in the electrical equipment company – Efacec Power Solutions SGPS SA. Interested bidders are now being sought after to take up the 72% owned by Isabel dos Santos. Portugal also froze her bank accounts in February.
Isabel dos Santos, worth $2.4 Billion, is accused by the Angolan courts of misappropriating over $5 billion during her father’s, Jose Eduardo do Santos rule. In May, she claimed the probe against her was based on a fake passport. She denies any wrongdoing and claims the Angolan government has been aware of her location and should be able to contact her.
FRC orders the Big Four to separate auditing from consulting services
The Big Four firms now reportedly generate the largest portions of their revenues from consultancy services.
The world’s four biggest audit firms —KPMG, PwC, Ernest & Young, and Deloitte — have been directed by the Financial Reporting Council (FRC) to plan towards separating their audit services from their consulting services.
The deadline for compliance with this directive is June 2024.
A statement that was published on the FRC website said this directive is ‘world-leading’. The statement also explained why it became imperative to separate the firms’ operations towards ensuring that they deliver the uttermost quality audit services for the good of public interest.
By the time the operational separation officially takes effect starting from June 2024, FRC said it would be expecting the following outcomes:
- That audit practice governance would prioritise audit quality and protect auditors from influences from the rest of the firm that may try to divert their focus away from audit quality.
- That the total amount of profits distributed to the partners in the audit practice does not persistently exceed the contribution to profits of the audit practice.
- The culture of the audit practice prioritises high-quality audit by encouraging ethical behaviour, openness, teamwork, challenge and professional scepticism/judgement.
- Auditors act in the public interest and work for the benefit of shareholders of audited entities and wider society.
While commenting on this development, FRC’s Chief Executive Officer, Sir Jon Thompson, said the FRC is committed to reforms on how corporate finances are reported. Further aspects of the reform package will be introduced over time, he said.
“Operational separation of audit practices is one element of the FRC’s strategy to improve the quality and effectiveness of corporate reporting and audit in the United Kingdom following the Kingman, CMA and Brydon reviews. Today the FRC has delivered a major step in the reform of the audit sector by setting principles for operational separation of audit practices from the rest of the firm. The FRC remains fully committed to the broad suite of reform measures on corporate reporting and audit reform and will introduce further aspects of the reform package over time,” Thompson stated.
Do note that the FRC reached this decision after engaging in extensive discussions with the Big Four. It was also agreed that the audit firms will submit an implementation plan to the FRC latest by October 23rd, 2020.
Recall that it was just last week when Nairametrics reported how the Big Four earned the sum of N7.53 billion as audit fees from Nigeria’s most capitalized firms in 2019. Interestingly, these firms now reportedly generate the largest portions of their revenues from consultancy services. As a matter of fact, only about 20% of their revenues now come from auditing fees.
Shell considers relocating its headquarters to the UK
Royal Dutch Shell has consistently pushed for the Dutch Government to stop taxes on dividends.
Oil and gas giant, the Royal Dutch Shell, is considering moving its corporate headquarters from The Netherlands to Britain. This could be a move against the implementation of dividend tax in The Netherlands.
The move was disclosed by the oil company’s Chief Executive Officer, Ben Van Beurden, during an interview with a Dutch newspaper on Saturday, July 4, 2020. According to him, the oil giant is not ruling out relocating its headquarters from the Netherlands to Britain. He said:
“You always need to keep thinking. Nothing is permanent and of course we will look at the business climate. But moving your headquarters is not a trivial measure. You cannot think too lightly about that.”
Further confirming the Chief Executive Officer’s comment, a Shell spokesman told Reuters that the oil giant is looking at ways to simplify its dual structure, as it had been doing for many years.
Royal Dutch Shell has consistently pushed for the Dutch Government to stop the tax on dividend paid to shareholders, as this makes financing dividend, share buy-backs and acquisition a lot more difficult.
An earlier attempt by the Dutch Government to stop the dividend tax as an incentive to convince Unilever to unify its dual structure in Rotterdam, was met with an outcry by the public, who see that as a gift to rich foreigners.
It can be recalled that Shell had announced a few days ago that it might likely write down between $15 billion-$22 billion in post impairment charges for the second quarter of 2020. The impairment, which is its largest since the merger with Shell Transport and Trading Company Ltd in 2005, shows the huge adverse impact that the coronavirus pandemic has had on the oil giant’s businesses.
Also, in a move that shocked investors, Shell for the first time since the Second World War, cut down the dividend that it paid to its shareholders by two-thirds due to the negative impact of the pandemic. The decision came as a surprise to many including shareholders of the oil company which is by far the biggest payer of dividend in the FTSE 100.