Connect with us
nairametrics

Business News

ExxonMobil, Shell, Chevron delay $58.4 billion oil and gas investments in Nigeria 

ExxonMobil, Shell, Chevron and other IOCs are delaying investment in oil and gas projects worth $58.4 billion in Nigeria.

Published

on

FG battles 6 oil firms for failure to remit N20 trillion , ExxonMobil, Shell, Chevron delay $58.4 billion oil and gas investment in Nigeria, Crude Oil: Nigeria’s oil production slips for the third consecutive month , Tax reform, policy uncertainty to cause oil drop as foreign firms look outside Nigeria, Nigeria plans to support oil price with lower production cost per barrel, Oil price slumps further to $30 pb, as Nigeria grapples with high production cost, Reduction in PMS: A nod to the deregulation of the downstream sector?

ExxonMobil, Shell, Chevron and other International Oil Companies (IOCs) are delaying investment worth $58.4 billion in oil and gas projects across Nigeria.

The delay, which happened due to circumstances beyond the control of the IOCs, is denying Nigeria’s oil and gas industry the much-needed liquidity to finalise projects.

ExxonMobil, Shell, Chevron delay $58.4 billion oil and gas investment in Nigeria 

The international oil companies have held on to their final investment decision on projects like Shell’s Bonga South-West/Aparo project.

ExxonMobil, Shell, Chevron and Nigerian Agip Exploration are involved in 46 oil projects under development across sub-Saharan Africa but majority of the projects are situated in Nigeria, according to the Africa Energy Outlook published by Africa Energy Chamber last month.

GTBank 728 x 90

“Nine of these (projects) are planned, the rest (37) have been announced, with varying prospects for reaching the FID in the near term. Nigeria accounts for half of all these projects, with Angola being the second most active market, followed by Chad.”

Why the delay in investment? A report disclosed that in Nigeria, regulatory and security challenges were major obstacle preventing these companies from approving the final investment decision. It was also added that the slump in global oil prices further compounded their fears.

[READ MORE: NNPC, Shell, others delay final investment on NLNG Train 7)

Deal book 300 x 250
GTBank 728 x 90

Also, the statistical arm of the US Energy Department, US Energy Information Administration, said uncertainty surrounding the passage of the Petroleum Industry Bill contributed to the jitteriness of the foreign oil and gas companies in Nigeria.

“Regulatory uncertainty has resulted in fewer investments in new oil and natural gas projects, and no licensing round has occurred since 2007. The amount of money that Nigeria loses every year from not passing the PIB is estimated to be as high as $15bn,” the EIA said.

About the delayed projects: It was learnt that Shell’s $9.7 billion Bonga South-West/Aparo hadn’t received the final investment decision despite having the potential to boost Nigeria’s daily production by nearly 10, adding 143,274 barrels per day in extra crude production capacity at its peak flow.

To further buttress the value of the Shell project, it would be the largest major deepwater project since Total’s Egina which came on stream in 2019.

“The $10 billion project has encountered difficulties. The tendering process has been delayed twice already. While Shell and its partners are still in negotiations with the government over production sharing contracts, the FID is, therefore, unlikely before the second half of 2020,” it said.

Jaiz bank ads

Other projects without the FID are ExxonMobil’s $6.2 billion Bosi (126,784 bpd); Chevron’s $8.2 billion Nsiko (95,685 bpd); ExxonMobil’s $8.2 billion Owowo West (138,301 bpd); ExxonMobil’s $6.1 billion Uge-Orso (99,532bpd) and Nigerian Agip Exploration Ltd’s $9.2 billion Zabazaba (146,739 bpd).

Fidelity ads

Shell wants oil spillage case tried in Nigeria, but victims say no 

Meanwhile, Shell’s $1.5 billion Gbaran Phase 3, Eni’s $1.1 billion Samabri-Biseni and Shell’s $1.2 billion Uzu are part of the announced gas projects that have not been sanctioned.

[READ ALSO: Shell to witness weaker margins in Q4)

Delay is not denial: Despite the delay in the investment by the international oil companies, Africa Energy Chamber projected a positive outlook for sub-Saharan Africa’s gas market, citing the ongoing development of 24 projects. Punch reported that $44 billion had been committed by the foreign oil companies in capital expenditure to Africa but Mozambique accounting for nearly 80% of the investment.

“Nigeria will see more modest investment of around $1.7bn but there are multiple projects worth nearly $5bn (led by Eni/Shell) that could achieve the FID in the coming years and expand its production capacity. Of the 14 announced projects, the Mamba Complex LNG project in the Rovuma Basin in Mozambique is the most significant.”

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

1 Comment

1 Comment

  1. Samuel Uba

    January 2, 2020 at 9:15 am

    Comment:how can I get job in the oil sector?

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

HealthPlus crisis: Alta Semper directors reported to Police for trespassing

HealthPlus has made a formal complaint to the Police following its ensuing battle with Alta Semper.

Published

on

HealthPlus crisis: Alta Semper directors reported to Police for trespassing

Nigerian Pharmacy Chain, HealthPlus Ltd which is in a battle for control with private equity firm Alta Semper Capital took a new twist as Health plus reported Alta Semper directors to the police last week, as observed in a document seen by Nairametrics.

In a letter sent to the Assistant Inspector General of Police on the 25th of September, HealthPlus stated, “We had the presence of unknown persons around our head office locations.”

READ: FG apologizes, says Self-Certification directive is not for everyone

The locations stated were 4 HealthPlus branches in Lekki, Lagos.

HealthPlus stated further, “We are aware that there are unauthorized and illegal plans by certain persons to take over our company premises to steal sensitive company property and assets, and ultimately take over operations of the company”

GTBank 728 x 90

The 4 persons mentioned by HealthPlus are; Zachary Fond and Ivan Genadiev (both Alta Semper Directors), Ernest Eguasa, CFO of company and an unidentified middle-aged white man.

Explore the Nairametrics Research Website for Economic and Financial Data 

Niarametrics reported last week that HealthPlus Limited appointed Chidi Okoro as Chief Transformation Officer.

GTBank 728 x 90

However, the announcement set off a chain of allegations and counter-accusations, including online media mudslinging with both sides trying to court public sympathy for who is in control of the company.

Continue Reading

Economy & Politics

P&ID dispute: UK Court orders $200 million guarantee to FG

Nigeria’s Foreign Exchange Reserves was boosted after a London Court ordered the release of $200Million placed as security in the case against P&ID.

Published

on

P&ID dispute: UK Court orders $200 million guarantee to FG, Leaked letter by Poultry Farmers Association triggered CBN emergency approval to import maize, nImplications of CBN's latest devaluation and FX unification, current account deficit, IMF, COVID-19, CBN OMO ban could give stocks a much-needed boost , CBN’s N132.56 billion T-bills auction records oversubscription by 327% , Nigeria pays $1.09 billion to service external debt in 9 months , Implications of the new CBN stance on treasury bill sale to individuals, Digital technology and blockchain altering conventional banking models - Emefiele  , Increasing food prices might erase chances of CBN cutting interest rate   , Customer complaint against excess/unauthorized charges hits 1, 612 - CBN , CBN moves to reduce cassava derivatives import worth $600 million  , Invest in infrastructural development - CBN Governor admonishes investors , Credit to government declines, as Credit to private sector hits N25.8 trillion, CBN sets N10 billion minimum capital for Mortgage firms, CBN sets N10 billion minimum capital for Mortgage firms , Why you should be worried about the latest drop in external reserves, CBN, Alert: CBN issues N847.4 billion treasury bills for Q1 2020 , PMI: Nigeria’s manufacturing sector gains momentum in November, CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty, MPC Member, BVN, Fitch, Foreign excchange (Forex), Overnight rates crash after CBN’s N1.4 trillion deduction, Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira, CBN to support maize farmers, projects 12.5 million metric tons in 18 months, BREAKING: CBN Upscales Greenwich Trust Limited, grants it's operational license for merchant banking

A London Commercial Court has ordered the release of a $200 million guarantee as security to be paid to the Nigerian government in the P&ID $10 billion Arbitral Claim.

This was disclosed in a social media statement by the Central Bank of Nigeria on Tuesday.

Nairametrics reported earlier this month that The Federal Government secured a landmark victory in its bid to overturn a $10 billion arbitration judgment award against it in a case against Process and Industrial Developments (P&ID).

READ: Nigeria seeks bank documents of former President, others over $9.6 billion P&ID case

GTBank 728 x 90

The Court said that Nigeria has established a strong prima case that the contract was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria. He said that there is also a strong prima face case that the P&ID’s main witness in the arbitration, Mr Quinn, gave perjured evidence to the tribunal, and that contrary to that evidence, P&ID was not in the position to perform the contract.

In today’s statement, the CBN said, “Nigeria’s Foreign Exchange Reserves was this morning boosted by over $200Million when the London Commercial Court ordered the release of the $200Million guarantee put in place as security in respect of the execution of the much discredited P&ID $10 Billion Arbitral Claim.”

READ; Why the NNPC is being dragged to US courts by Exxon Mobil, Shell

GTBank 728 x 90

“The court also awarded a £70,000 cost in favour of Nigeria in addition to an earlier award of £1.5m.”

On January 31, 2017, an arbitration tribunal had ruled that Nigeria should pay P&ID, the sum of $6.6 billion as damages and breach of contract after a 2010 deal for a gas project in the Niger Delta part of Nigeria collapsed. The pre and post judgement accrued interest of 7% has seen the amount standing against Nigeria, rise to almost $10 billion, an amount that will be a serious dent on the country’s external reserve.

Continue Reading

Business

FG to revitalize rice farms in rice producing regions

The Minister stated that rice production is expected to increase as the government continues to revitalize rice farmers.

Published

on

The Federal Government has stated that Rice Farms in Anambra State and other regions will be revitalized to boost rice production, create jobs and also improve the living standard of the people in the State and the region.

This was disclosed by the Minister of State, Agriculture and Rural Development, Hon. Mustapha Baba Shehuri, during the assessment of Federal Government Rice Farms/Mills in Omor and Umerum in Anambra State.

Given the importance of rice as a staple in Nigeria, the Minister stated that the Federal Government is taking steps to achieve self-sufficiency in rice production, and this is evident in the policies of the government in achieving food and nutrition security, import substitution and promotion of inclusive economic growth across all sectors of the economy.

READ: CBN says 22 banks to restructure over 35,000 loans due to COVID-19

Government Policy Interventions in Agriculture and Rural Development has helped to develop the rice sector, and these interventions include the provision of farm inputs such as agrochemicals, organic fertilizers, knapsack sprayers, planting & harvesting equipment such as reapers, mini combine harvesters, threshers at a subsidized rate in order to increase productivity.

GTBank 728 x 90

The Minister added that these policies have not only increased the quantity of rice produced annually but interventions through the provision of modern rice milling machines to small/medium scale processors, has also helped to improve the quality of Nigeria milled rice to international standard.

READ: New PIB amends royalties by oil firms as Sylva clarifies position on scrapping of NNPC

However, Nigeria’s rice consumption still holds higher than production, but government interventions through myriads of policies have increased rice production from 4.8 million metric tons of milled rice in 2015 to over 6 million metric tons by 2019 with a huge reduction in the nation’s deficit.  Hon. Mustapha Baba Shehuri explained that production is expected to increase as the government continues to revitalize rice farmers.

GTBank 728 x 90

Shehuri said that ”the Ministry has established 23 Paddy Aggregation Centers nationwide to aggregate and store paddy. The centres were given to members of the Paddy Dealers Association of Nigeria (PRIDAN) under the public-private partnership arrangement”.

READ: How to register for FG’s N75 billion MSME survival funds

In like manners, there will be the dissemination of modern rice production and processing technologies, through capacity building of farmers and processors directly and also in conjunction with the international donor agencies such as Japan International Cooperation Agency (JICA), Food and Agriculture Organization (FAO), German International Cooperation (GIZ), International Fund for Agricultural Development (IFAD), Competitive Africa Rice Initiative (CARI), AfricaRice.

He reiterated that the Ministry is currently responding to the challenges of food availability posed by the COVID-19 pandemic by supporting smallholder farmers nationwide with various inputs including certified seeds of improved varieties of food crops such as rice, maize, sorghum, wheat, orange-flesh sweet potato, groundnut cowpea, soybean, yam, as well as cash crops like cashew, cocoa, sesame, oil palm, gum Arabic. Others include herbicides, pesticides and agricultural machinery such as rice reapers, transplanters, power tillers motorized sprayers and processing equipment.

These interventions are expected to alleviate the effect of the pandemic on farmers and ensure that they keep producing food for the country.

Jaiz bank ads

Fidelity ads
Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
deals book
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement