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20 Years After, NEPZA to Hands off Oil and Gas Free Zones

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  • 20 Years After, NEPZA to Hands off Oil and Gas Free Zones

Exactly 20 years after the Oil and Gas Export Free zone Act No. 8 of 1996 established the Oil and Gas free Zones Authority (OGFZA) to manage and regulate the Oil and Gas Export Free Zones in Nigeria, the Nigeria Export Processing Zone Authority (NEPZA) is to relinquish the management of the oil and gas free zones to OGFZA.

It was gathered that though the licensing, monitoring and regulation of Free Zones Scheme in Nigeria is vested on the NEPZA by the Nigeria Export Processing Zone’s Act 63 of 1992, the Oil and Gas Export Free Zone Act of 1992 has ceded the powers of NEPZA in the management of oil and gas free zones to OGFZA.

Section 5 (2) of the Oil and Gas Export Free Zone Act of 1996 states that “the authority shall have power to take over and perform such other functions being hitherto performed by NEPZA as they relate to export of oil and gas from any of the Nigerian Export Processing Zones established by Nigeria Export Processing Zone Act.”

It is in the light of the above, it was learnt, that the new Managing Director of OGFZA, Mr. Umana Okon Umana has written to the Managing Directors of the Snake Island Integrated Free Zone (SIIFZ), LADOL and NEPZA, intimating them of OGFZA’s intention to take over the management of the oil and gas free zones in exercise of its statutory mandate.

The letters, dated November 17, 2016 also stated that the official take-off date for the management of the zones by OGFZ will be 30 days from the date of the letters.

In one of the letters with reference number FZA/SIIFZ/02/VO1/1116/001, the position of OGFZA is that “the authority has by virtue of the statutory provisions stated in Section 5 (2) and other relevant laws as well as the directives of the Government on the take-over of all Oil and Gas related activities within Free Zones in Nigeria, decided to carry out the full implementation of the law and the said directives. LADOL Free Zone, being an oil and gas free zone, will henceforth be licensed and regulated by OGFZA.”

Apart from the OGFZA Act which mandates OGFZA to manage the Oil and Gas free zones, Umana also cited the Free Zones (Monitoring and Regulations) Order 2014, which states that “as from the commencement of this order, the Authority (OGFZA), in addition to its functions under the Act, shall be responsible for (a) Licensing of all oil and gas free zones located with the Customs Territory; and (b) publication of all operating standards to be observed in the free zone from time to time.”

Umana also said his agency derived its powers from the White Paper on the restructuring and rationalization of Federal Government parastatals.

According to him, the Government White Paper on the Report of the Presidential Committee on Restructuring and Rationalisation of the Federal Government Parastatals, Commissions and Agencies of March 2014, states as it affects the Ministry of Industry, Trade and Investment in Section 236-237 (OGFZA and NEPZA) that: “Government rejected the merger of Oil and Gas Free Zone Authority (OGFZA) with Nigeria Export Processing Authority (NEPZA) and directs further that OGFZA be renamed Oil and Gas Free Zones Authority, Nigeria, with responsibility to regulate all oil and gas free zones in Nigeria.”

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

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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