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Economy & Politics

As other countries lure oil majors, Nigeria demands more from them 

President Muhammadu Buhari appended his signature to a bill that amended the country’s Deep Offshore (and Inland Basin Production Sharing Contract) Act.

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FG blames politicians, oil firms for imminent tax loses, As other countries lure oil majors, Nigeria demands more from them 

Last week, Nigeria’s President Muhammadu Buhari appended his signature to a bill that amended the country’s Deep Offshore (and Inland Basin Production Sharing Contract) Act. As Nairametrics reported, the Nigerian leader hailed the development as a “landmark moment”, even as he expressed his optimism that the country will, henceforth, be entitled to more of the revenues derived from exploration activities.

A different approach by Nigeria’s competitors

While this was happening, other African oil producers (who also double as Nigeria’s competitors by the way) were busy putting in place conditions to lure oil companies to come and invest in their countries. Reuters reported that the likes of Angola, Cameroon, Gabon, and Ghana were adjusting their terms in order to attract more investments.

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Speaking during the just-concluded Africa Oil Week in Cape Town, South Africa, Ghana’s Deputy Energy Minister, Mohammed Amin Adam, acknowledged that his country decided to change strategy because of growing competition in the race to attract investors. In the same vein, Gabon’s Petroleum Minister (Noel Mboumba) was quoted as saying the following:

“We are aware that oil companies have to spend a lot of money. That is why we are careful in the way we design our (terms) to have it as a win-win.” 

Budget 2020: Oil workers to earn N75 billion, Oil: International oil companies scale down on Nigeria operations   

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In specific terms, below are the new approaches that have been adopted (or still being adopted) by other major oil producers across Africa.

  • Gabon reduced how much the government will receive from the oil revenue derived from shallow and deepwater concessions. The country also “increased the cost-recovery limits for companies”.
  • Cameroon “sweetened” tax terms for oil explorers and made a law making it easier for oil companies to easily make up for the expenses incurred from their exploration activities.
  • In Ghana, the government is putting measures in place to ensure that oil companies are given more freedom to explore/drill for oil.
  • Angola is also committed to revising its local content laws, even as it privatises some of its oil assets.

Is Nigeria out of touch?

Following Nigeria’s decision to increase the amount oil companies are expected to pay the government, Total Nigeria’s Managing Director, Mike Sangster, made a statement implying that the Nigerian authorities are out of touch with what is happening in the international oil market. According to him, “the continent has to compete for capital with other areas. It’s important that the regulators understand that.”

The role of declining demand and oil prices

Sangster may not be wrong. As the worldwide demand for oil continues to decline, oil majors are becoming more careful about how and where they invest. Therefore, bearing in mind that Nigeria is not the only oil producer in Africa for instance, the chances of these oil majors shifting focus to other areas abound.

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By the way, the increasing use of alternative energy around the world has been a major contributory factor to this recorded decline in oil demand. It has even been projected that demand for fossil fuel would decline further in the coming years.

Oil workers will be paid N75 billion worth of salaries in 2020 

A case for Nigeria…

A closer look at this development will show that the Nigeria government is not totally wrong for demanding more revenue from the oil companies. After all, oil pumped from offshore exploration activities naturally belongs to Nigeria. Without the country’s consent, no exploration can take place.

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Moreover, the old revenue sharing model between Nigeria and these companies do not exactly reflect the current realities on ground. As such, they needed to be readjusted, especially now that the country urgently needs to earn more money.

Note that Nigeria depends mainly on oil revenue for its fiscal expenditures.

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Patricia

Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

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Economy & Politics

FG inuagurates 2nd National Voluntary Review Report on SDGs

The report enables member countries to exchange experiences and knowledge on Sustainable Development.

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Federal Government has inaugurated the second National Voluntary Review Report on Sustainable Development GoalsThis was disclosed by the Senior Special Assistant to the President on Sustainable Development Goals, Mrs Adejoke Orelope-Adefulire on Tuesday. 

The report was launched after a virtual presentation session of the High-Level Political Forum of the United Nations (UN). 

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Meanwhile, the UN had offered to assist the Nigerian Government to realize its developmental aspirations most especially those related to the SDGs. 

The UN Resident Coordinator in Nigeria Edward Kallonhad explained that he visited Nigeria to explore better ways of collaboration between the two agencies in line with the recent reforms going on in the UN, which are being driven by Amina Mohammed, the Deputy UN Secretary-General. 

According to him, UN is looking for innovative ways to come up with a robust collaboration framework that will foster a more solid and workable partnership by way of creating a platform for Nigeria to leverage on and support its developmental aspirations most especially, the implementation of the SDGs. 

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Why it mattersThe report enables member countries to exchange experiences and knowledge on Sustainable Development. It would feature Nigeria’s most important priorities as it is nearly impossible to achieve all SDG’s because of the limited economic challenges. 

According to Orelope-Adefulire, the goals prioritized by the governments were no poverty, health and wellbeing, education, economic growth, security & peace and partnerships. 

She said, “Poverty is more than the lack of income and resources to ensure a sustainable livelihood. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion as well as the lack of participation in decision-making. Economic growth must be inclusive to provide sustainable jobs and promote equality. 

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“Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working-age population.”

She added that the agency would prioritise seven goals and reached out to the private sector, women organisations, CSOs, youth groups, academia and people living with disabilities; finding out from them what needs to be done. 

 

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Economy & Politics

Just-in: FG kickstarts its 774,000 jobs SPW initiative as Buhari backs Keyamo

The initiative plans to employ 1,000 persons from each of the 774 LGA in the country.

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FG urges DStv, MTN, others to offer free subscription, airtime, data to Nigerians

Despite the opposition from members of the National Assembly, the Federal Government have formally kick-started the Special Public Works (SPW) programme, which was designed to create 774,000 jobs across the nation, with the inauguration of the State Selection Committees.

This was disclosed in a tweet post by the Federal Government on its official Twitter handle on Tuesday, July 14, 2020.

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In the tweet post, the Federal Government said, ‘’The Special Public Works Programme of the Federal Government has kicked off nationwide. The State Selection Committees have been inaugurated and have commenced work. Find the names and contact details of members of your State’s Committee here.’’

The National Assembly had earlier called for the suspension of the programme, following disagreement and altercations with the Minister of State for Labour and Employment, Festus Keyamo, over the operations and processes of the programme.

 

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This programme, which is coordinated by the ministry of labour and employment, was part of the federal government’s intervention programmes and fiscal stimulus measures to help cushion the negative impact of the coronavirus pandemic on Nigerians.

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The initiative which is expected to start on October 1, 2020, plans to employ 1,000 persons from each of the 774 local government areas in the country. Each of the beneficiaries of the programme will be paid N20,000 monthly to carry out public works.

The implementation agency for the programme is the National Directorate of Employment (NDE).

The Minister of State for Labour and Productivity, Festus Keyamo, while performing the virtual inauguration in a joint address with the Director-General of NDE, Nasir Ladan Argungu, disclosed that an inter-ministerial committee drawn from 8 ministries and headed by the NDE recommended the setting up of states’ selection committees to identify and recruit those to be engaged under the programme

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It can be recalled that Keyamo, has been at loggerheads with the federal lawmakers over the implementation of the SPW programme. The lawmakers had insisted that the Minister must seek their inputs before going ahead with the constitution of the 20 man states selection committees. They also accused Keyamo of trying to hijack the programme from the NDE, who should be the implementation agency.

But the Minister, while appearing before a joint committee in the National Assembly accused the lawmakers of trying to hijack the process. He insisted that President Buhari gave him the mandate to directly supervise the programme and as such he is the only one that can ask him to stop.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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READ MORE: Network operators accept government’s ‘shared facility arrangement’ that limits financial risk 

All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor, Seyi Makinde also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

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READ ALSO: Diageo to invest $219 million in renewable energy in Nigeria, six others

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

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