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FG Saves $1.7bn on Cash Call Payment to IOCs



Nigeria’s Minister of State for Petroleum Emmanuel Kachikwu
  • FG Saves $1.7bn on Cash Call Payment to IOCs

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Thursday said a solution put in place by his ministry and the Nigerian National Petroleum Corporation to find a sustainable solution to the funding of Joint Venture cash call obligations of the Federal Government had led to savings of $1.7bn.

Kachikwu said this in a chat with State House correspondents after making a presentation to the National Economic Council in which he sought endorsement for a proposal approved by the Federal Executive Council to change the funding configuration of Joint Ventures for upstream companies.

With the solution, he said government had been able to save over $1.7bn on the $6.8bn that was previously owed.

While adding that the government owed only $5.1bn as opposed to $6.8bn, the minister said $5.1bn would be paid within five years interest-free.

According to him, the cash call arrangement in the oil sector will end completely by next year.

He recalled that the cash call arrears in the oil sector over five years up until December 2015 was about $6.8bn, while the arrears for this year was put at $2.5bn.

While stating that there was no justification for the previous arrears at a time when global oil prices were at the peak, the minister attributed the arrears of 2016 to the effect of militancy and the drop in oil prices from $110 to $40 per barrel.

He said the barrels of oil to pay for this would come from the incremental generation by the oil companies and not on the current 2.2 million barrels daily production figure for the country.

The minister said, “Beginning next year, if this goes into place, the issue of cash call era would have disappeared. The effect of this is that investments in excess of $15bn are likely to be announced by the oil companies, bringing back most of the projects within couple of weeks. Once this is signed, we are using this as a parameter to save at least $1bn from 2017.

“We will be looking at reducing the cost of barrel per production from the current $27 per barrel, which is one of the highest in the world, to a figure within the threshold of $18 per barrel over the next two years, ultimately to about $15 over the next four years.”

Kachikwu added, “The barrel reserve production should increase to about 2.5 million by 2019 and potentially to about three million by 2021. So, there will dramatic effects. For the first time, the oil industry will take responsibility for arranging their own funding and being able to produce oil and save the Federal Government the whole nightmare of cash calls every year.”

“So, this is a very dramatic move in the oil industry. We are still going to make presentation to the National Assembly for them to understand this.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Insider Dealing: Paul Miyonmide Gbededo Adds Another 612,326 Shares of Flour Mills to His Stake



Paul Miyonmide Gbededo, the Group Managing Director, Flour Mills of Nigeria Plc bought an additional 612,326 shares of the company.

The management stated this in a disclosure statement sent to the Nigerian Stock Exchange on Monday.

The managing director purchased the shares at N27.75 per share on November 20, 2020 at the Nigerian Stock Exchange in Lagos, Nigeria. Meaning, Gbededo has invested another N16,992,046.5 into the company.

This was in addition to the 3,284,867 shares valued at N91,642,269 and 4,200,852 shares worth N117.62 million purchased by Gbededo earlier in the month of November. Bringing his recent purchases to 8,098,045 million shares worth N226,254,315.5. See the details of the latest transaction below.


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FCMB Reports 16.4 Percent Increase in Profit After Tax in Q3 2020




FCMB Group Plc, one of the leading financial institutions in Nigeria, reported a 16.4 percent increase in profit after tax for the third quarter of the year.

In the unaudited financial statements released through the Nigerian Stock Exchange (NSE), the lender’s profit before tax grew by 10.2 percent year-on-year to N4.8 billion while profit after tax increased by 16.4 percent to N4.2 billion.

FCBMB Group Plc expanded gross earnings by 4.8 percent to N48.3 billion during the period under review. Similarly, the bank’s net interest income rose by 30.03 percent year-on-year to N22.7 billion.

The strong performance continued across the board as net fee and commission income increased by 0.29 percent to N5.2 billion. Net trading income rose by 39.4 percent year-on-year to N1.82 billion.

Personnel expenses dropped by 7.9 percent to N6.9 billion during the quarter while general and administrative expenses declined by 7.52 percent year-on-year to N7.6 billion. Largely due to the COVID-19 lockdown.

Loans and advances to customers rose by 10.8 percent to N793.14 billion between December 2019 and September 2020. Total desposits from customers during the same period grew by 26.7 percent to N1.2 trillion.

The bank’s total assets increased by 22.12 percent to N2.04 trillion.

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Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary



stanbic IBTC Insurance

Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).

In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.

“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”


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