2 BUSINESS DAY NEWS
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Monday 24 December 2018
NEITI: Oil, gas sector generated $17.05bn in 2016 HARRISON EDEH, Abuja
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he latest report of the Nigeria Extractive Industries Transparency Initiative (NEITI) has shown that the total financial flows from Nigeria’s oil and gas sector slumped to $17.05 billion in 2016. The report further revealed a 31 percent decline on the $24.79 billion generated in 2015, and a 75 percent plunge on the sector’s peak earnings of $68.44 billion generated in 2011. In addition, the 2016 figure is the lowest in ten years and the fifth lowest in the 18 years covered by NEITI’s audit reports so far (1999 to 2016). According to the NEITI 2016 Oil and Gas Industry Audit Report, obtained by BusinessDay on Friday, the plunge in revenue in 2016 resulted from the double whammy of low oil prices in the global market and reduced oil production in Nigeria, which in turn was caused by disruption and vandalism of oil assets and spike in crude theft, among others. According to NEITI report, yearly average price of crude oil per barrel was $43.73 in 2016 as against $52.5 in 2015. Also, total oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015, a fall of 15 percent. Losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274 percent. This was aside losses due
to deferment, which in 2016 was put at 144 million barrels which also went up by 65 percent when compared to the 87.5 million barrels in 2015. “The bombing of the under-water 48-inch Forcados Oil Loading/ Export Pipeline was one of many major occurrences that befell the industry in the year under review,” the NEITI report stated. “This incident occurred in February 2016 and the line remained in-operational for seven months. Shell Petroleum Development Company (SPDC) declared force majeure on lifting from Forcados on 21st February 2016. Companies injecting into the Forcados Terminal such as SEPLAT, PANOCEAN, MIDWESTERN, ENERGIA, PLATFORM, PILLAR, WALTERSMITH, and EXCEL shut down production for over 147 days.” In addition, SPDC declared force majeure on the Bonny Terminal due to a leak in Nembe Creek Pipeline between May and July 2016 while NAOC declared force majeure on the Brass Terminal between July and August 2016. Similarly, Mobil Producing Nigeria Unlimited declared Force Majeure twice between May/ June and July/October 2016. This was due to a drilling process disruption and damage to the QIT loading system. The NEITI report stated that: “MPN’s total production within the four-month period was 4,616,825bbls, which is less
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No certainty on FID signing date for NLNG Train 7 OLUSOLA BELLO
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he much publicised Final Investment Decision (FID) for train 7 of the Nigeria Liquefied Natural Gas (NLNG) limited that was anticipated to take place this month will not happen again, sources tell BusinessDay. The reason is that the exercise will not take place until after the completion of the Front End Engineering Design (FEED) which is expected to give investors a fair idea of what would be needed financially to complete the project. The non-signing of the FID however does not mean that other commitments or activities that would facilitate the construction of the plant are not going on behind the scene, a source close to the company told BusinessDay. Expectation that the FID was going to be signed by the end of this year was high shortly after the
contract for the FEED was awarded in July this year. NLNG said then that it would be in the global financial market looking for $7 billion from potential investors to expand its operations from 22 million tonnes per annum (mtpa) to 30mtpa. Tony Attah, managing director of NLNG was quoted to have said that a financial adviser had equally been appointed by the company ahead of the expected FID. The sale and purchase agreements (SPAs) for the new volumes had been locked down with offtakers since 2007, but its terms would need to be concretised before the FID is achieved. “The company has made efforts to do Train-7 since 2007, essentially, almost 10 years, but we believe that this is the moment. As one of my friends will say, the stars are lining up in favour of our company and this project,” Attah said.
Stranded travellers at Ojota Motor Park in Lagos, at the weekend.
Pic by Olawale Amoo
Kuramo Capital backed Green Airways shakes up Nigeria’s aviation with $11.7bn Boeing order IFEOMA OKEKE
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igeria’s Green Africa Airways has committed to order up to 100 Boeing 737 MAX 8 aircraft, from U.S based Boeing Company, a deal which will cost up to $11.7 billion and shake up Nigeria’s struggling airline industry.
The deal is the largest aircraft agreement from Africa, and will be reflected on Boeing’s orders and deliveries website, once finalized Boeing said today. Green Airways announced in June, 2018 that it completed its Series A round of financing with private Equity firm Kuramo Capital, a Pan African investment firm based in
New York. The new airline has received an Air Transport License (ATL) from the Nigerian Government and commenced its Air Operating Certificate (AOC) process, it said then. Babawande Afolabi is the Founder and CEO of Green Airways Africa. Green Airways is headquartered in Lagos, Nigeria.
A guide to having an actually happy Christmas TIM HARFORD, FT
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s Christmas a time of magic, generosity and conviviality? Or of overconsumption, stress, and social anxiety? It is easy to make a case either way: listen to Paul McCartney’s “Wonderful Christmas Time”,followed immediately by Tom McRae’s slow sighing cover of the song and hear the same lyrics convey backslapping cheer and solitary despair. Messrs McCartney and McRae illustrate the dilemma, but they do not resolve it. For that, we need data, so I consulted some academics on the slippery subject of “subjective wellbeing”, or as you or I would call it, “happiness”. Two years ago, wellbeing researchers at the London School of Economics surveyed a panel of experts, asking them: “Do you think that populations on average have higher wellbeing during major festive periods like Christmas?” None of the respondents was particularly confident, but the verdict was that Christmas is a time for good cheer: 54 per cent thought that Christmas increased average wellbeing, with 18 per cent disagreeing and the rest sitting on the fence.
Fence-sitting is perhaps the wise choice here: the topic has been rather sparsely researched, and what studies do exist provide viewpoints as contradictory as Messrs McCartney and McRae. One recent piece of research by Michael Mutz found that “the Christmas period is related to a decrease in life satisfaction and emotional wellbeing”. An older study by Tim Kasser and Kennon Sheldon found instead that “subjects are on the whole reasonably satisfied with their holiday experience” and that while many people found Christmas a bit stressful, the majority did not. One thing we can say with confidence is that, contrary to the popular myth, suicide rates don’t spike at Christmas; they fall. It may be more fruitful to ask about how different people experience Christmas — and whether we can suggest ways to enhance the joy and reduce the anxiety. One plausible hypothesis is that Christmas is an amplifier of existing inequalities. Those who are relaxed, have no money worries and a good relationship with friends and family should find plenty to enjoy in Christmas; those who are anxious, isolated or financially stretched may find Christ-
mas makes everything worse. An alternative view is that how we feel about the festival depends on how we approach it. Mr Mutz found that Christians felt happier at Christmas, while others felt less happy. Similarly Messrs Kasser and Sheldon found that people who spent more time with their families or engaging in religious practices tended to have a better time of things. Consumerism fared less well, according to Messrs Kasser and Sheldon; for all the money and effort buying and wrapping gifts, the activity “apparently contributes little to holiday joy”. I am not sure atheists would feel better if they headed to church, nor that people who dislike their relatives should seek them out anyway. But these findings do suggest that the syrupy advice of a thousand moralising television specials — that the true spirit of Christmas is friends, family and the little baby Jesus — has something going for it. What, then, is an undercover economist to advise for a truly merry Christmas? First, keep the crass spending under control. It is pointless to lament the commercialisation of Christmas, which is not new.