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T H I S D AY Ëž ÍŻËœ 2019
BUSINESSWORLD R A T E S MONEY MARKET OVERNIGHT OBB
A S
A T
REPO 18.42 % 17.17%
CALL 1-MONTH 3-MONTH
15% 12.75% 12.63%
D E C E M B E R S & P INDEX INDEX LEVEL 1-DAY MONTH-TO-DATE
355.69% 0.39% 1.78%
Group Business Editor Obinna Chima Email obinna.chima@thisdaylive.com 08024557078, 08152447875
2 8 , 2 0 1 8 S & P INDEX 1/4 TO DATE YEAR TO DATE
2.41% 7.96%
EXCHANGE RATE ͹͎;˚ͯ ̊ ̊
Quick Takes Heritage Bank Partners Prinsult
ECONOMIC REVIEW
L-R: National President, Nigerian Association of Chambers of Commerce, lndustry, Mines and Agriculture, (NACCIMA), lyalode Alaba Lawson and Director-General, Ayoola Olukanni at the NACCIMA end of the year media briefing in Lagos...recentlya abiodun Ajala
NNPC: PSCs Now Account for Most of Nigeria’s Oil Production Stories by Chineme Okafor in Abuja
ENERGY
Most crude oil produced in Nigeria’s Niger Delta region now come from Production Sharing Contracts (PSCs), a recent report by the Nigerian National Petroleum Corporation (NNPC), has disclosed. The NNPC in its monthly operations and financial report for September 2018, explained that that between August 2017 and August 2018, the volume of oil produced from PSCs fields were 310,424,845 barrels, while that from Joint Venture Agreements (JVA) were 245,537,573 barrels, indicating a difference of 64,887,272 barrels. On the average, the report
showed that oil output from PSCs operations amounted to 23,878,834.23 barrels per month and 770,284.975 barrels per day; while that of JVA was 18,887,505.61 barrels per month and 609,274.37 barrels per day. PSCs and JVA oil production were closely followed by Alternative Financing (AF), which accounted for 102,162,516 barrels in the production-to-date (PTD) period, as well as the Nigerian Petroleum Development Company (NPDC) which also accounted for 51,018,207 barrels of oil within the review period. In the same vein, marginal
field operators and independents produced 55,739,537 barrels of oil within the period. Recently, an audit report on the operations of Nigeria’s oil industry for the year 2016 by the Nigeria Extractive Industries Transparency Initiative (NEITI), had disclosed that PSCs had become the leading oil production arrangement in Nigeria because they are mostly offshore and less prone to production disruptions. NEITI equally hinted that the development has now made it necessary for Nigeria to renegotiate the terms of the PSCs as stipulated in the Deep Offshore and Inland Basin Production Sharing Contracts Act of 1993 so as to increase
government’s take from oil production therein. The NEITI report had stated that: “A major highlight of 2016 was that for the first time in Nigeria’s history, crude oil produced from Production Sharing Contracts (PSCs) overtook output from the Joint Ventures (JVs). “In 2016, PSCs accounted for 324 million barrels, while the JVs accounted for 289.1 million barrels, (as against the 320 million barrels for PSCs and 375.5 million barrels for JVs in 2015). PSCs, a production arrangement introduced in 1993, thus became the leading production arrangement Continued on page 24
Gencos: Nigeria’s Electricity Market Operating Without Contractual Terms Power generation companies (Gencos) in Nigeria have alleged that the Transitional Electricity Market (TEM) does not exist. The TEM was unveiled in 2015. The commercial interactions between operators were expected to be backed with contracts such as the Power Purchase Agreements (PPA), Ancillary Agreements, Gas Supply Agreements (GSA), and Vesting Contracts amongst others, under the TEM. However, the Gencos noted that at best, the country’s electricity market was been run on conjecture, as against using enforceable commercial terms. Speaking through their association – the Association of Power Generating Companies
ENERGY (APGC), the Gencos explained even though provisions in the TEM assured they would get full payments for power they supply to the national grid, they were yet to get full payments of their invoices to the market. Their views were contained in a note the Executive Secretary of APGC, Dr. Joy Ogaji, shared with THISDAY. In it, the group explained that there was no binding contract in the market at the moment. “Under the Electric Power Sector Reform Act (EPSRA) 2005, the electricity market in Nigeria would be administered by a number of industry contracts
and market rules. The investment on generation is at the instance of the off-taker (in this case NBET). “TEM was declared on 1st February, 2015. The declaration of the Transitional Electricity Market (TEM) would signal the commencement of all contracts but contrary to the TEM promise, the conditions for declaring it are still far away. Without effective contracts – Power Purchase Agreements (PPA), Ancillary Agreements, Gas Supply Agreements (GSA), Vesting Contracts between Discos and NBET and other industry contracts, TEM cannot be said to have taken off,� said the Gencos. They further explained: “The
TEM promise of 100 per cent Genco invoice settlement by NBET failed, placing a big financial burden on the Gencos. The promise provoked some additional investments by Gencos with its attendant high cost of capital, increased regulatory risk, increased debt profile. “The Gencos were made to bear the brunt of this lack-lustre performance on the part of NBET and other market participants. The power sector is yet to attain a contractual market status. One of the notable functions of a contract is to facilitate forward planning and to make provision for future contingencies.�
HeritageBankPlcandPrinsultGlobalConsultingLimitedhavejoined forces to train women on how to balance the challenges posed by their health condition and eorts towards wealth creation. Theyweresaidtohaveempowerednofewerthan150womenthrough a seminar held in Ikeja, which had as its theme: ‘Building Your Health and Wealth as a Woman’. Speaking at the occasion, Mrs. Betty Eriyo, Cluster Head, Lagos Mainland 1, Heritage Bank, said her management believed that health is wealth. She said, “at Heritage Bank, we believe in creating, preserving and transferring wealth; adding that this maxim has always been their guide in Heritage Bank in their operations.â€? Eriyo, advised participants to always ensure that what we (adults) went through during our childhood the younger generations do not go through them. In view of this, she explained, “Heritage Bank has usually supported several institutions that could make life more meaningful to the people by making funds available for seamless services.â€? According to her, “based on our belief that health is wealth, we have equipped several hospitals in Nigeria with the requisite funds needed for technologies and other facilities necessary for eective medical services.â€? She therefore advised participants, saying: “Do not neglect your health; exercise more; know your body type; eat well and eat right, because timeless wealth is timeless health.â€? On her part, Mrs. Dorothy Je-Nnamani, Chief Executive OďŹƒcer, Novo Health Africa in her keynote address delivered at the event, acknowledged that the abilityofparticipantstoperformwassolelytiedtotheirphysicalvitality. She explained that women have unique health condition compared to men. She stated that menstruation and menopause are no diseases and are peculiar to only women. “Even those health issues shared with men normally aect women dierently. STD can be more dangerous to women than menâ€?, she stated.
FG Assures on Geoscience Data
Thefederalgovernmentrecentlyreceivedoutputsofthedeskwork studies done by contractors of Ministry of Mines and Steel Development on Integrated Exploration Projects under the Natural Resources Fund before they resume ďŹ eld work.The government while reassuring investors of adequate geoscience data, hinted that, the key objective of the exploration projects was to rapidly generate integrated geoscience information in GreenďŹ eld and BrownďŹ eld settings. he Minister of Mines and Steel Development, Alhaji Abubakar Bawa Bwari, who spoke on behalf of government noted that, “It is in fulďŹ lment of these that the federal government agged o this project in September and subsequently set up a 7-man ministerial committee to implement and monitor it.â€? According to him, “The committee was given the mandate to ensure strict compliance with theTerms of Reference, oversee the implementation and management of technical aspects of the projects and assist in removing any bureaucratic bottle-necks that may arise. “Thecommitteeisalsomandatedtoliaisewiththeministrytoensure timely release of funds, in line with the levels of job completion and contract agreement.â€? He said: “It may interest you to know that this project is the ďŹ rst of its kind in the country and is designed along typical exploration phases with time-bound deliverables.
Egypt Expects IMF Loan
Egypt expects to receive the ďŹ fth instalment of its $12 billion IMF loan programme in January, the president’s oďŹƒce has disclosed. The International Monetary Fund oered the three-year loan programme in 2016 after Egypt agreed to a package of reforms including the devaluation of the pound, cuts to energy subsidies and the introduction of a value-added tax, according to Reuters. TheIMFpostponedareviewofEgypt’seconomicreformprogramme, initially planned for earlier this month, prompting speculation that the ďŹ fth tranche of the loan, worth $2 billion, might be delayed. However, central bank Governor Tarek Amer briefed President Abdel Fattah al-Sisi on Sunday on the “positive resultsâ€? of the IMF’s most recent sta team visit to Egypt, Sisi’s oďŹƒce said in a statement. This included “commendation of the government’s rigorous adherencetotheimplementationoftargetedreformmeasuresaccordingto predetermined timetables, with delivery of the $2 billion ďŹ fth tranche of the IMF loan expected in January 2019,â€? the statement said.
“The top four banks in Africa are South African and that speaks to the strength of South African banks. If our economy is bigger than that of South Africa, naturally you would expect that we should have bigger banks�
MD/CEO of First Bank
Dr. Adesola Adeduntan Continued on page 24