Business News
$9 billion case: Nigeria files new lawsuit against P&ID after new evidence emerges
The management of British Virgin Island firm, Process and Industrial Development (P&ID) will again have to defend the company in court in the United Kingdom as Nigeria files a new lawsuit against them based on new evidence. This comes days after a London high court 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.
The new court case is a bid to overturn the tribunal order which directed Nigeria to pay $6.6 billion in damages in 2013. Nigeria’s refusal to pay has led to the fee’s increase to about $9 billion due to interests accrued daily since 2013.
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. But the deal broke down, resulting into a lawsuit against Nigeria.
New development: According to a statement issued by Umar Gwandu, the Special Assistant, Media and Public Relations to the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, new evidence from investigations has proved that the 2010 contract was a sham that was never meant to succeed.
Malami said the lawsuit “is a major step forward in a bid to overturn the injustice of the US$9.6bn award” adding that “The filing challenges both the underlying arbitral award and its enforcement, and lodges a fresh appeal against the subsequent High Court judgment.
“Based on new evidence that has come to light in recent investigations, it is clear that the original contract was a sham commercial deal and designed to fail from the outset. The fraud was only recently discovered as a result of President (Muhamadu) Buhari’s anti-corruption efforts spearheaded by the Economic and Financial Crimes Commission.” Punch quoted the statement in a report.
Nigeria argued that the contract “was procured on the basis of fraud and corruption, while the subsequent arbitral process was riddled with irregularities and deliberately concealed from the rest of the government
What Nigeria stands to lose: The situation is dire for Nigeria if it eventually loses the case altogether. The $9 billion is equivalent to almost 2.5% of the country’s annual gross domestic product. Also, if Nigeria can’t afford to pay the sum, the country will lose its assets in UK and the United States, depending on the assets P&ID choose to seize and sell.
Energy
NNPC says local operators must improve capacity to achieve low cost of oil production
The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.
The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.
This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.
According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.
Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.
Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.
He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,”
The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.
He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.
The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.
The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.
The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.
Local Content: @NNPCgroup Advocates Capacity Upgrade for Indigenous Operators
In order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis, @NNPCgroup says indigenous companies operating in the…
More here 👉https://t.co/XoSyeHKNUS pic.twitter.com/iTtJhtJXzD
— NNPC Group (@NNPCgroup) September 26, 2020
Energy
NNPC signs gas development and commercialization deal with SEEPCO
NNPC and SEEPCO have signed a gas development and commercialization deal.
The state oil giant, Nigerian National Petroleum Corporation (NNPC) has signed a gas development deal with Sterling Exploration and Energy Production Company (SEEPCO).
The agreement between the 2 oil firm is for the development and commercialization of gas from Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.
The disclosure was contained in a press statement that was issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Saturday, September 26, 2020, in Abuja.
According to the statement, the Group Managing Director of NNPC, Malam Mele Kyari, while speaking at the agreement-signing ceremony which held at the NNPC Towers, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.
Kyari disclosed that the deal would not only help reduce gas flaring and its environmental hazards but would also promote gas production and utilization in the domestic market.
The NNPC boss also commended SEEPCO for its unwavering commitment to gas development and commercialization in the country which has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.
On his part, the Chairman of SEEPCO, Mr Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.
He commended NNPC and the Group Managing Director for ensuring the execution of the agreement which he described central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.
This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.
Energy
Buhari reappoints 3 Chief Executives of agencies under Federal Ministry of Petroleum
3 Chief Executive Officers of agencies under the Federal Ministry of Petroleum Resources have been reappointed.
President Muhammadu Buhari has renewed the appointment of 3 Chief Executive Officers of parastatals under the Federal Ministry of Petroleum Resources with immediate effect.
The appointments that were renewed by the president include that of Dr Bello Aliyu Gusau as the Executive Secretary of Petroleum Technology Development Fund (PTDF), Ahmed Bobboi as the Executive Secretary/Chief Executive Officer of Petroleum Equalization Fund (PEF) and Simbi Wabote as Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB).
The disclosure was made through a series of tweet posts by the presidency on its official Twitter handle on Friday, September 25, 2020.
The statement disclosed that the renewal of the appointments followed recommendations to the President by the Minister of State Petroleum Resources, Timipre Syla.
It stated that Dr Aliyu Gusau was credited to have run the PTDF successfully in the past four years, keeping faith with the Seven Strategic Priorities he had introduced in January 2017.
These are Domestication, Cost cutting, Sustainable funding, Efficient internal processes, Linkages with the industry, Utilization of centres of excellence, and Pursuit of home-grown research.
It also stated that Bobboi got his reappointment for having run PEF in a way that made it a key and strategic player in the administration’s oil and gas reforms, especially in stabilizing the supply and distribution of petroleum products across the country, among others.
Going further, it stated that the NCDMB boss, Wabote, won his pips for managing the NCDMB and completing its headquarters building. Wabote was also credited to have initiated many landmark projects that were widely commended by industry players.
STATE HOUSE PRESS RELEASE
PRESIDENT BUHARI RENEWS APPOINTMENTS OF PTDF, PEF, NCDMB BOSSES
President @MBuhari has renewed the appointments of Chief Executive Officers of agencies under the Ministry of Petroleum Resources.
— Presidency Nigeria (@NGRPresident) September 25, 2020
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Lot Ben
December 8, 2019 at 5:01 pm
This development is laudable and would go a long way to project a just course of financial management system in Nigeria.
anodebenze
December 9, 2019 at 4:11 pm
Those 2 irish men are not billionaire,they are adventurers. NOBODY HAVE ASKED THE RIGHT QUESTION ? ABOUT THEIR BANKERS,WHO WILL FINANCES THIS PROJECT,when you have a project in Africa,which will finance, and they will do their risk analysis.NOW WHAT IS THEIR BANKER RISK ANALYSIS,if this project have gone to the FEDERAL EXECUTIVE COUNCIL,somebody will ask the right question.NOW WHERE IS THE INPUT OF THE PARMNENT SECTARY OF THE MINISTRY OF PETROLUEM RESOURCES.
Some Nigerians wanted to buy NITEL,The govt then asked them to pay 100 millions dollar as deposit,and if successful,they will pay the full amount,they intended to approach some british bank to pay the balance.they approached first bank,who paid this 100 million dollar for then,which they did paid to the govt.as things near the final hurdle,all british bankers refused to finances this NITEL .now the Nigerian govt have refused to returns this mandatory deposit as required in this contract,and as subsequent,the board of first bank fired the managing director of first bank.
if this a private business would have gone,without the federal govt any intervention,the project would have taken place in calabar.ALSO THERE ARE MANY FOREIGN OWNED BUSINESS IN NIGERIA WORTH MILLIONS OF DOLLAR,NOW WHY THOSE 2 IRISH MEN DID NOT SUCCED ?it is possible they did not have good intentionNOW WHERE IS THEIR BANKERS RISK ANALYSIS INPUT ? ,are their bankers willing to finances this project,they thought it will be easy for them,they bribed and corrupted govt official.I THINK THEY ARE MAD, AFTER SPENDING MONEY,THEY DO NOT HAVE,OUT OF DESPERATION,THEY DECIDED TO GO ARBITRATION OVERSEA NOT IN NIGERIA.
Any Nigerian govt that pays any money through this arbitration in any circumstances will faces a horrible death. 9 billion dollar to be paid to those 2 thieves and racketing scum,which is the worst in our planet,money they did not deserve.what not Mr buhari pays 1/9 of this money,to those almahariji in north NigerIa,he will pay them or one of them 1billion dollar another 1 billion to your next of kin and all your clan up your 6 cousin with plan to,go and cut off their head and their immediate family,THERE IS SOMEBODY WHO WILL DO THIS FOR MR BUHARI AS LONG AS THEIR FAMILY IS SECURED