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Nigeria Loses $235bn Investments Amid $9bn Debt

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  • Nigeria Loses $235bn Investments Amid $9bn Debt

Nigeria has lost about $235bn worth of investments on the back of the failure to reform the oil and gas industry, even as the Federal Government struggles to pay up over $9bn cash call arrears to oil firms.

Oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria and National Union of Petroleum and Natural Gas Workers on Wednesday said the Petroleum Industry Bill should be passed to address the funding challenges in the industry.

The Chairman, PENGASSAN and NUPENG National PIB Committee, Mr. Chika Onuegbu, stated this at the 2nd Save Nigeria Oil and Gas Industry Roundtable Conference in Port Harcourt while making a presentation, a copy of which was made available to our correspondent.

He spoke on ‘The funding regimes in the Nigerian oil and gas industry: Challenges, failures and panacea’.

Onuegbu noted that the country had planned to increase crude oil production capacity to three million barrel per day in 2003 and four million bpd by 2010; raise crude oil reserves to 40 billion barrels by 2010, and eliminate gas flaring by 2008.

He said, “Suffice it to say that achieving and realising these objectives would inter alia require investments in the petroleum sector, which in turn would require the appropriate funding levels and mix to deliver the investments.

“It is therefore not surprising that Nigeria is yet to achieve any of the three key national aspirations for its oil and gas sector some seven years after the 2010 target year. To make matters worse, funding for the joint venture operations for some years now has been capped $5bn per annum, while arrears of cash calls have increased tremendously, rising to over $9bn as of September 2016.”

He said addressing the funding challenges was one of the key objectives of the Nigerian oil and gas sector reform, which was kick-started in April 2000 by the administration of President Olusegun Obasanjo but had continued to suffer setbacks.

Onuegbu said, “Consequently, Nigeria has lost some $235bn of investments due to its inability to legislate on the proposed reforms in its oil and gas industry: Over $15bn yearly investments withheld or diverted by investors to other countries because of the uncertainty as investors do not know which rules will guide their investments; and another $120bn potential earnings in six years, from 2010 to 2016 had the reforms proposal (PIB) been passed into law in 2009.”

He described the PIB as the long-term solution to the JV funding challenges in the industry, adding, “The use of ad hoc measures such as the recent cash call exit agreement to address fundamental challenges in the industry as funding will not stand the test of time; it is not sustainable and not international best practice.”

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.

Finance

Global Deal Activity Down by 4.5% in October 2020

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A total of 6,304 deals were announced globally during October 2020, which is a decrease of 4.5% over the 6,598 deals announced during September, according to GlobalData, a leading data, and analytics company. An analysis of GlobalData’s Financial Deals Database revealed that the deal volume during October remained below the monthly average of Q3 2020.

Aurojyoti Bose, the Lead Analyst at GlobalData, comments: “After demonstrating growth for four consecutive months, the deal volume shrank in October. The decline in deal activity could be attributed to inconsistencies across different regions. The APAC region remained a weak spot, while deal activity remained mostly flat in North America, and the Middle East and Africa (MEA) region witnessed growth in deal activity.”

North America attracted the highest number of investments, followed by APAC, Europe, the MEA, and South, and Central America.

The uncertain global economic landscape lowered the deal volume in October for major markets such as the US, Germany, Australia, France, India, and China compared to the previous month. On the contrary, the UK, Japan, South Korea, and Canada saw growth of 15.6%,14.9%, 3.8%, and 2.2%, respectively, in October as compared to September’s deal volume.

Bose continued: “Most of the deal types witnessed a decline in volume during October compared to the previous month. Private equity, equity offerings, venture financing, debt offerings, and partnership deals volume decreased by a respective 2.4%, 9.1%, 9.8%, 14.6%, and 24.6% – while the deal volume for mergers and acquisitions (M&A) increased by 7.2%.”

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Japaul to Invest in Chinese Firm H&H to Deepen Mining and Exploration Business

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Japaul Gold & Ventures Plc (Japaul), formerly known as Japaul Oil and Maritime Services Plc, announced it has gotten approval in principle from H&H Mines Limited to invest in or acquire shares in the company once it concluded its fundraising exercise.

According to a statement released through the Nigerian Stock Exchange (NSE), H&H Mines Limited has several licenses, which include two major Mining Leases for 25 years renewable.

The statement noted that extensive exploration has been done on the Mining properties and the last lap of the exploration works is core drilling. This, it said will allow Japaul knows the measured Minerals Reserve contained in the Mine, which it claimed contain Gold, Silver, Lead, Zinc, etc.

Japaul further explained that the need to get the drilling done was what led H&H Mining to engage the services of Xiang Hui International Mining Company Nigeria.

“Since Japaul will eventually be part of H&H Mines Limited, it was necessary that Japaul is carried along on the kind of Contract of Drilling to be entered into, and that was why the signing of the Drilling Contract between the Chinese Company and H&H Mines Limited was concluded at Japaul’s Head Office,” the company stated.

The drilling is expected to be concluded in the next 12 months and within this time, Japaul is expected to have concluded the Fund Raising and formalise her involvement in the Mining.

The company added that Canadian reports revealed that there are huge gold, silver, lead, etc deposits, but it is drilling that will show the actual reserve.

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Africa Investment Forum (AIF) Rescheduled to Hold in 2021 – AfDB

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Investment Forum to Now Hold in 2021 in a Bid to Curb Possible Second Wave of COVID-19  

The Africa Investment Forum scheduled to hold in November 2020 in Johannesburg, South Africa has been rescheduled to hold in2021 as a result of the ongoing global health pandemic.

This announcement was made in a statement by AfDB on Wednesday. The African Development Bank (AfDB) and the Africa Investment Forum founding partners agreed to the postponement of the annual three-day investment market place.

Considering the negative effect of Covid-19 on the global economy, agreement by the two bodies was made after a careful assessment of the impact of COVID-19 on global travels, investments, observing the social distancing rules and curbing the likely possible risk of a second wave.

In the statement, the bank stated that through the forum innovative digital platforms, it would track investments, source for new deals, progress on financial closure of transactions and other existing deals.

“At the 2019 Africa Investment Forum, 57 deals valued at $67.7bn were tabled for discussions. Fifty-two deals worth $40.1bn secured investment interest.

“In July this year, the AIF Founding partners pledged to strengthen strategic partnership engagement and commitments for Africa Investment Forum Market Days 2021, to help ‘reboot investments in Africa.’ They underscored the need to boost local manufacturing while leveraging the continent’s vast resources to unlock investment.”

In the statement, Africa Investment Forum objectives are achieved through the forum’s four pillars; Closing, Connecting, Engaging and Investment Tracking.

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