Economy & Politics
UK court receives $200 million bank guarantee from Nigeria
The Nigerian government has paid a bank guarantee of $200 million to a London high court to secure a stay of execution on asset seizure by P&ID.
A London high court has received a bank guarantee of $200 million from the Federal Government of Nigeria to secure a stay of execution on asset seizures of up to $9 billion related to a failed gas project involving Process and Industrial Developments Limited (P&ID).
Nigeria had settled for the decision in order to avoid the United Kingdom (UK) company taking over some of its assets located in the United States or UK. The $9 billion awarded to P&ID against Nigeria for damages is equivalent to almost 2.5% of the country’s annual gross domestic product.
What happened?
P&ID‘s contract with the Federal Government started in 2010 when former President Umaru Musa Yar’Adua authorised partnerships with private companies to fix the power problem in Nigeria. P&ID signed an agreement with the Ministry of Petroleum Resources in January 2010.
Abubakar Malami, SAN
Breakdown of the deal
Nigeria planned to pipe natural gas from two offshore oil rigs to a refinery that would be built by P&ID. Founded in 2006 by two Irishmen, Michael Quinn and Cahill, P&ID was to remove hydrocarbons from the gas and send the fuel to Nigerian power plants.
It was disclosed that P&ID wouldn’t get paid for the service but it could keep and sell the hydrocarbon byproducts, which themselves had value, with the government getting a cut. But the project fell through.
P&ID then filed a lawsuit against Nigeria in 2012 after all attempts to negotiate a deal with the government failed. A tribunal was organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between the parties. The tribunal ruled that Nigeria was liable for $6.6 billion in damages, but interests accrued daily since 2013, increasing the liability to $9 billion.
Speaking on the recent development, a Reuter report disclosed that a spokesperson for the Attorney General said Nigeria had applied for an alternative to hold off the arbitration ruling.
He said, “This variation in security, which was proposed by Nigeria as an alternative solution during a procedural hearing on 22nd November, has been accepted by the court and P&ID.”
However, in the same report, a spokesperson for the British company said P&ID hoped the Nigerian government would “accept the reality of the arbitration tribunal award and the decisions of the English Court.”
Why Nigeria should worry
A hedge fund managed by VR Capital Group took a large stake (25%) in P&ID. With the backing of the hedge fund and Lismore Capital Ltd, P&ID hired lobbyists, lawyers, and a public relations firm late last year to fight the case while Nigeria has recruited London-based law, firm Mishcon de Reya and QC of Brick Court Chambers to its legal team.
Note: Two representatives of P&ID pleaded guilty before the Federal High Court in Abuja to the charges levelled against them by the Economic and Financial Crimes Commission (EFCC) in relation to the contract leading to the controversial $9.6 billion court judgment given by a British court against the Nigerian Government.
Economy & Politics
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Business
Significant progress made in China-Africa ties within cooperation framework – AUC Chairperson
AUC chairperson has disclosed that significant, sustained progress is being made in China-Africa ties within cooperation framework.
The African Union Commission (AUC) Chairperson, Moussa Faki Mahamat, has said that “significant and sustained” progress has been made in China-Africa ties.
Mahamat asserted this in an analysis of his first-term as the AU Commission chairmanship.
He reiterated the AU Commission’s strong commitment to upholding multilateralism and supporting international partners in halting the trend of unilateralism.
He argued that “International cooperation and solidarity are irreplaceable.”
Mahamat, in his analysis, reiterated that global challenges, national egoism, the decline of multilateralism, the ongoing COVID-19 pandemic, and dwindling resources “have hampered our forward march” during the past four years.
The AU Commissioner for Social Affairs Amira Elfadil recently also hailed China as a strategic partner of Africa.
What they are saying
- Mahamat submitted that: “With China, significant and sustained progress has been made within the framework of the Forum on China-Africa Cooperation (FOCAC).
- “Africa stands with those who fight unilateralism and strongly advocate for a multilateralism of respect, equality and mutual benefit.”
- Amira Elfadil noted that: “We are looking for those who are serious about the future of this continent, and when we say strategic partners and mention strategic partnerships, China comes first and we appreciate this partnership very much.”
What you should know
- The African Union (AU) is a continental body consisting of the 55 member states that make up the countries of the African Continent. It was officially launched in 2002 as a successor to the Organisation of African Unity (OAU, 1963-1999).
- The African Union Commission acts as the executive/administrative branch or secretariat of the AU and consists of a number of Commissioners dealing with different areas of policy.
Economy & Politics
House of Reps Speaker assures that the PIB will be passed in April 2021
Femi Gbajabiamila has revealed that the lower legislative chamber intends to pass the PIB in April 2021.
The Speaker of the House of Representatives, Femi Gbajabiamila, has revealed that the lower legislative chamber intends to pass the Petroleum Industry Bill (PIB) in April 2021.
The assurance by the Speaker follows so many years of delay in the passage of the bill, which is expected to encourage investment into the oil industry, due to political disagreements and objections from International Oil Companies.
This disclosure was made by Gbajabiamila, while speaking at the 2-day public hearing organized by the house Adhoc committee on PIB on Wednesday, January 27, 2021.
The Speaker pointed out that although the timeframe for the passage of the Bill is short, he assured that it will receive the thoroughness it deserves and as well, made a commitment on behalf of the house to pass the legislation in April.
What the Speaker House of Representatives is saying
Gbajabiamila, in his statement, said, ‘’I thank the Chairman and the committee for the dedication and efforts thus far. I have confidence that they will deliver on this critical National Assignment within the time we have set. I look forward to presiding over the consideration of the committee’s report.’’
“We intend to pass this bill by April. That is the commitment we have made. Some may call it a tall order, but we will do it and we will do it with every sense of responsibility without compromising the thoroughness of the work that will be done.’’
‘’A lot of work has gone into the preparation of this bill but it’s not straight-jacketed, the idea of the public hearing is to have interests that may have not been accommodated prior to the introduction to the Bill to lend their voices,’’ he added.
While speaking at the occasion, the Chairman of the Adnoc Committee on PIB, who is also the Chief Whip of the House of Representatives, Mohammed Tahir Monguno, said that as we gather here today, we may differ in opinions and background but the truth is the passage of this Bill is long overdue.
What you should know
- It can be recalled that the Senate President, Ahmad Lawan, had a few days ago while speaking at the 2-day public hearing organized by the senate on the PIB, said the upper legislative chamber is looking at passing the Bill in April or May.
- He noted that the non-passage of the PIB had been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time that when other countries are scrambling to exploit their oil and gas resources.
- The PIB is a Bill that seeks to provide Legal, Governance, Regulatory Fiscal Framework for the Nigerian Petroleum Industry.
- On November 24, 2020, the PIB was debated, it passed the second reading and then referred to the Adhoc, Committee on the Bill.
“I thank the chairman/the committee for the dedication and efforts thus far. I have confidence that they will deliver on this critical National Assignment within the time we have set. I look forward to presiding over the consideration of the committee’s report” ——@femigbaja pic.twitter.com/9ompuZlvbZ
— House of Reps NGR (@HouseNGR) January 27, 2021
