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FG demands $1.1 billion advance settlement from Eni, Shell in Malabu corruption case

The government of Nigeria has requested advance payment for damages in the Malabu oil scandal.

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Malabu Scandal: Shell writes down OPL 245 License, Nigerians move to sue Shell in UK over oil spillage 

The Federal Government, on Wednesday, September 9, 2020, asked a court in Milan to order Royal Dutch Shell and Eni to pay the sum of $1.092 billion as an immediate advance payment for damages in the Malabu oil scandal, one of the oil industry’s biggest-ever corruption scandals.

During the hearing into the corruption allegation linked to the acquisition of the OPL 245 offshore field by Eni and Shell, lawyer to the Federal Government, asked for advance payment ahead of a more comprehensive damages package to be decided by the court at a later date.

READ: Here’s why Total is selling its 12.5% stake in Nigerian oil block 

The case involves the 2011 acquisition of oil block prospecting license by Eni and Shell, following the payment of $1.3 billion to the Nigerian government for the OPL 245 offshore field. However, it was alleged that about $1.1 billion of that amount ended up in the account of Malabu Oil and Gas, which was owned by a former Petroleum Minister, Dan Etete, and was used to pay political bribes.

The prosecutors also alleged that Dan Etete, apart from the politicians, paid some middlemen and then half of it to himself.

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READ: Here’s why Total is selling its 12.5% stake in Nigerian oil block 

Shell says that the 2011 agreement was a settlement of long-standing litigation following the previous allocation of the oil block by the Federal Government to Shell and Malabo.

It can be recalled that in July, prosecutors asked that the Chief Executive Officer of Eni. Claudio Descalzi be jailed and also for Eni and Shell to be fined together with some of their former and present executives.

READ: Court adjourns trial of Shell, Eni officials over bribery allegation in Nigeria

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In addition, the prosecutors also requested for the confiscation of the sum of $1.092 billion from all the defendants in the case, an amount which is the equivalent of the bribes that was alleged to have been paid out.

The lawyer representing Nigeria, Lucio Lucia, on Wednesday, joined in requesting for the seizure of that amount.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

Africa’s electricity generation will double by 2030, fossil fuel to be dominant – Research

Fossil fuel is expected to dominate Africa’s energy mix by the end of the decade.

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climate, Understanding Carbon Credits and Carbon Offset market

A new research from the University of Oxford has predicted that the total electricity generation across the African Continent will double by 2030.

The study also expects that fossil fuel will still be dominant in Africa’s energy mix by the end of the decade, accounting for two-thirds of all generated electricity across Africa, posing a potential risk to global climate change commitments.

READ: AfDB approves a grant of $7m for renewable mini-grid industry in Africa

An estimated 18% of the generation is set to come from hydro-energy projects, which have their own challenges, such as being vulnerable to an increasing number of droughts caused by climate change.

The study, which looked into Africa’s energy generation landscape, uses a state-of-the-art machine-learning technique to analyse the pipeline of more than 2,500 planned power plants and their chances of successful commission.

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READ: World Bank set to invest over $5 billion in drylands across 11 African countries

The study shows the share of non-hydro renewables in African electricity generation is likely to remain below 10% in 2030, although it varies by region.

READ: AfDB supports Africa’s flagship climate initiative with $6.5bn 

What there are saying

Galina Alova, Study Lead Author and Researcher at the Oxford Smith School of Enterprise and the Environment said that:

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  • “Africa’s electricity demand is set to increase significantly as the continent strives to industrialise and improve the wellbeing of its people, which offers an opportunity to power this economic development through renewables.”
  • “There is a prominent narrative in the energy planning community that the continent will be able to take advantage of its vast renewable energy resources and rapidly decreasing clean technology prices to leapfrog to renewables by 2030 – but our analysis shows that overall it is not currently positioned to do so.”

READ: Foreign investors jostling to exploit Nigeria’s $82 billion healthcare gap

Philipp Trotter, Study Author and Researcher at the Smith School said:

  • “The development community and African decision-makers need to act quickly if the continent wants to avoid being locked into a carbon-intense energy future. Immediate re-directions of development finance from fossil fuels to renewables are an important lever to increase experience with solar and wind energy projects across the continent in the short term, creating critical learning curve effects.”

READ: DisCos ask FG to reduce cost of gas in power generation

What you should know

  • The study suggests that a decisive move towards renewable energy in Africa would require a significant shock to the current system. This includes large-scale cancellation of fossil fuel plants currently being planned.
  • In addition, the study identifies ways in which planned renewable energy projects can be designed to improve their success chances – for example, smaller size, fitting ownership structure, and availability of development finance.
  • Fossil fuels include coal, petroleum, natural gas, oil shales, bitumen, tar sands, and heavy oils. All contain carbon and were formed as a result of geologic processes acting on the remains of organic matter produced by photosynthesis, a process that began in the Archean Eon (4.0 billion to 2.5 billion years ago).
  • These non-renewable fuels supply about 80 percent of the world’s energy. They provide electricity, heat, and transportation, while also feeding the processes that make a huge range of products, from steel to plastics.

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Energy

FG insists on no petrol, electricity subsidies in 2021

The FG has insisted that its policy on the removal of subsidies on fuel and electricity in the 2021 budget remains.

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FG inaugurates steering committee on Covid-19 economic recovery, #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years, taxes, tax, IMF, business, FAAC disbursed N617billions in April, as South-South scoop N72billions, VAT, Finance Minister, Zainab Ahmed says Nigeria VAT collection rate is low, NBC, Rite Foods, others to pay new tax as FG identifies new revenue streams ,,Finance Minister reveals how World Bank, AfDB pushed FG into requesting Chinese loan 

The Federal Government has insisted that it will go ahead with its policy on the removal of subsidy on Premium Motor Spirit (Petrol) and electricity, with no provision made in the 2021 budget for their subsidy.

This disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, during a virtual public presentation of the Breakdown and Highlights of 2021 Appropriation Act on Tuesday in Abuja.

READ: FG posts 27% revenue shortfall in 2020 as budget deficit hit N6.1 trillion

What the Minister for Finance is saying

While answering a question on whether there would be a return to petrol subsidy following the reduction in petrol price about a month ago, the Minister said the answer is a flat no.

Ahmed said,

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  • We are not bringing back fuel subsidy. We didn’t make provision for fuel subsidy in the budget. The impact of what was done was reducing some of the cost components that were within the template. And also related to it, on matters of electricity subsidies, no provisions have been made for subsidy for fuel and no provisions have been made for subsidy for electricity.

READ: Reps raise alarm over N200 billion unclaimed dividends in 2020

Also, while talking about the new Finance Act 2020, which took effect from 1 January 2021, Ahmed said the act adopts counter-cyclical fiscal policies in response to the Covid-19 pandemic by providing fiscal relief to taxpayers.

The Minister stated that the government would hold the unclaimed dividends of investors in the stock market in trust and would make the fund available when needed by an investor.

READ: N200 billion Unclaimed Dividend: Securities dealers reject FG’s plan to manage fund

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She said:

  • On the issue of unclaimed dividends and government’s accounts and projections, there would be as much as N850bn to be realized in the special trust fund of unclaimed dividends. Government is keeping the money in trust for the beneficiaries. At any time, a registrar or a bank confirms that this is the true and bonafide beneficiary of this fund, then the government will release from that trust fund to the investor who has it.”

READ: Nigerian Aviation: Exchange rate, 7.5% VAT suspension and other factors to determine survival – Experts

What you should know

  • It can be recalled that the Federal Government, in early 2020, announced the full deregulation of the downstream sector of the oil industry which culminated in the removal of petrol subsidy.
  • The government said that following a sharp drop in revenue, it was becoming increasingly unsustainable for it to continue to subsidize the product with funds that can be used for the development of critical infrastructures in the country.
  • Similarly, it also pointed out that the removal of subsidy on electricity tariff and ensuring the implementation of the right pricing for power will help attract the needed investment in that sector.

READ: FG borrows N2.8 trillion from CBN via Ways and Means

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Energy

Daystar Power secures $38m funding to grow its West African’ operations

Daystar Power, provider of hybrid solar power solutions to businesses in West Africa, today announced a Series B investment of $38 million.

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Daystar Power has announced a Series B investment of $38million.

The company expects to grow its operations in its key markets of Nigeria and Ghana, while deepening its presence in other regional countries such as Côte d’Ivoire, Senegal and Togo with the funds raised.

The company expects to expand its installed capacity to over 100 megawatts – enabling it to meet demand from its clients in the financial services, manufacturing, agricultural and natural resources sectors.

What you should know about the funding

  • Taking into account the previous round by Verod Capital and Persistent Energy, Daystar Power has received equity investments totalling $48 million.
  • The funding is led by the Investment Fund for Developing Countries (IFU), the Danish development finance institution (DFI).
  • IFU is joined by new investors STOA, a French impact infrastructure fund, Proparco, the French DFI, backed by a guarantee from the European Union under the African Renewable Energy Scale-Up facility (ARE Scale-Up); and Morgan Stanley Investment Management.

What they are saying

The CEO and Co-founder of Daystar Power, Jasper Graf von Hardenberg, stated that:

  • “By offering our commercial and industrial clients cheaper, reliable and cleaner power, we have seen a more than 50-fold increase in power-as-a-service revenue over the last two years. African businesses are realizing that solar power stand-alone or in tandem with a second power source is a superior energy alternative to the often-unreliable grid or too expensive, polluting diesel generators.”

Thomas Hougaard, Vice President sub-Saharan Africa, IFU said:

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  • “We believe that Daystar Power has the right elements – the client base, technology, engineering expertise, and executive leadership to scale off-grid solar across West Africa. Not only is Daystar Power at the forefront of a growing market, it is helping to accelerate the adoption of renewable energy in some of Africa’s fastest growing cities.”

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