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Energy

Seplat’s head office remains shut as court approaches Christmas recess

Seplat head office remains shut as the court is yet to vacate the order obtained by Access Bank.

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ABC Orjiako, Access Bank's Mareva injunction against Seplat and Cardinal Drilling

The head office of Seplat Petroleum Development Company (SPDC) has remained shut, a full week after it was sealed off on the back of a court order instituted by Access Bank Plc.

According to reliable sources, both parties appeared in court during the week, with Seplat seeking the court’s approval to vacate court orders. However, we understand their bid was unsuccessful, meaning that the company’s headquarters might remain closed during the Christmas season.

Sources from Seplat and Access Bank respectively confirmed to Nairametrics that they met in court during the week and that the case was adjourned till Monday 14th of December 2020.

Seplat informed the Nigerian Stock Exchange last week that it would fight to overturn the court injunction obtained by Seplat to seal off its offices, claiming that Access Bank had no proof that it guaranteed the loan on behalf of Cardinal Drilling Services.

Dr. Chioma Nwachuku, GM, Ext Affairs & Communications, told Nairametrics that Seplat never guaranteed the facility.

She said, “There should be a document to back such claim. We await the proof of such guarantee.”

When Nairametrics contacted Abdul Imoyo, the spokesperson Access Bank, on the development, he promised to get back to us after he had consulted the legal team of the bank.

Access Bank, however, claims that Seplat is a related party, insinuating that ABC Orjiakor, Chairman of Seplat, obtained the loan from Diamond Bank, using Cardinal Drilling Services as a smokescreen, as Seplat was to be the ultimate beneficiary of the service.

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What you should know

Access Bank Plc has sealed off the corporate headquarters of Seplat Petroleum Development Company over a loan owed by Cardinal Drilling Services Limited, a drilling services company.

  • The bank obtained an Ex-Parte order dated November 13th, 2020, to seal off the headquarters of Seplat, which prompted Seplat to announce that it would sue Access Bank in response.
  • The move by Access Bank has triggered a corporate battle between the bank and Seplat, with the latter claiming that it is not an obligor of a loan to Access Bank.
  • The Cardinal Drilling Services loan was originally obtained from Diamond Bank in 2012 and collapsed into Access Bank after their merger.
  • Nairametrics detailed how Seplat got roped in here.

Seplat HQ shut till next year?

With their inability to get the court to vacate the order, Seplat risks being unable to access their office premises, at least till the new year, except it gets the court to vacate the order at the next sitting on Monday, 14th of December, 2020.

  • The Federal High Court is expected to proceed on Christmas vacation for the year on December 22, 2020, and resume sitting on Monday, January 11, 2020.

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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Columnists

What FGN Free Meter Program means for the power sector

Without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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Electricity, Buhari moves against Discos and agents that collect money for prepaid meters

According to news reports, the Minister of Power, Mamman Saleh on Wednesday said the distribution of the four million free electricity prepaid meters pledged by the Central Bank of Nigeria would soon begin across the country.

According to him, the government is wrapping up the distribution of its initial one million meters, which he labelled phase zero, and would soon begin the distribution of the four million sponsored by CBN, which he tagged phase two. He also noted that the Federal Executive Council approved N3bn for the execution of six major electricity projects in the country to upgrade Nigeria’s electricity facilities and improve power supply across the country.

Ineffective metering remains a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they have not consumed through estimated billing by DisCos.

DisCos have been largely unsuccessful with metering their customers.

As far as inadequate metering is concerned, DisCos over time, have used this situation to their advantage via estimated billings. It appears that fully metering customers are currently being viewed as a disincentive, given that estimated bills can easily be manipulated.

According to a report by the Nigerian Electricity Regulatory Commission (NERC), only 4,234,759 (40.27%) of the total customer population of 10,516,090 were metered as of 30 June 2020. Clearly, this validates the widely held view that there are a wide number of customers on estimated billing which gives room for illegal connection to the networks and in turn corrupt practices. NERC further revealed that only three out of 11 Electricity Distribution Companies in the country had metered more than 50% of electricity customers under their coverage areas as of June 2020.

Effective metering in our view is one step ahead in solving the myriad of problems embattling the Nigerian power sector. Though supposed to be unpaid for, many customers in a bid to avoid the bureaucracy associated with getting meters have paid to get their own meters. We believe the provision of meters to all end-use customers will go a long way in ameliorating the liquidity squeeze in the power sector whilst also providing cashflow to the DisCos for investment in equipment needed to evacuate unused electricity to consumers nationwide.

We laud the FG’s efforts at distributing meters freely to end-users, but we note that without effective penalties for erring DisCos and consumers, progress may still remain very slow.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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Energy

BUA Group awards contract for polypropylene plant in its refinery project

The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

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BUA Group chairman, Abdulsamad Rabiu, African Continental Free Trade Agreement, AfCFTA, CCNN

Nigeria’s leading indigenous conglomerate, BUA Group has announced that it has signed a contract agreement with Lummus Technology for the establishment of a polypropylene plant in its refinery and petrochemical project.

The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.

The Chairman of BUA Group, Abdul Samad Rabiu, while disclosing the contract agreement, expressed confidence in the capacity and technical expertise of Lummus Technology to deliver a best-in-class project.

READ: BUA says its export-focused sugar project will create jobs and checkmate price hike

What the Chairman of BUA Group is saying

Rabiu in his statement said, “We are pleased to sign this polypropylene contract for our BUA refinery and petrochemicals project with Lummus Technology, a world leader in delivering polypropylene solutions, which will solve the increasing demand for high-performance grade polypropylene in Nigeria, the Gulf of Guinea as well as the Sub-Saharan Africa Region.

“We are confident in the capacity and technical expertise of Lummus Technology to deliver a best-in-class, 285,000 tpy polypropylene unit for our refinery project scheduled to come on stream in 2024.’’

READ: Dangote, BUA reconcile over sugar plant dispute after meeting with Ganduje, others

What the President/Chief Executive Officer of Lummus Technology is saying

On his part, the President/Chief Executive Officer of Lummus Technology, Leon de Bruyn, said that he was looking forward to working with BUA refinery on the project.

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Leon said, “We look forward to working with BUA Refinery on this critical project and supporting the first Novolen polypropylene unit in Nigeria. Our world-class Novolen technology is well suited to meet Nigeria’s increasing demand for the growing petrochemical products market.

It offers a flexible range of industry-leading products for all PP applications, and the industry’s lowest overall capital and operational costs while providing customers with high process reliability and flexibility in responding to market needs.”

READ: BUA Group, French company announce progress in 200,000 bpd refinery project

What you should know

Lummus Novolen Technology GmbH licenses polypropylene technology and provides related engineering and technical support/advisory services. Novolen also supplies NHP® catalysts for the production of high-performance polypropylene grades in the Novolen process, and NOVOCENE® metallocene catalyst for the production of special polypropylene grades.

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