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FG Plans Fresh Concession of Lagos-Ibadan Expressway

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The Minister of Power, Works and Housing, Babatunde Fashola
  • FG Plans Fresh Concession of Lagos-Ibadan Expressway

The Federal Government is considering a proposal to involve the former concessionaire of the Lagos-Ibadan Expressway, Bi-Courtney Highway Services Limited, in the funding of the completion and management of the reconstruction of the road.

Our correspondents gathered that the proposed arrangement would see Bi-Courtney and the new concessionaire, Motorways Assets Limited, jointly form a special purpose vehicle to source for funds, complete the project and manage the road afterwards.

It is, however, not clear if the deal, which is reportedly brokered by the National Assembly, involves an out of court settlement with Bi-Courtney, which had challenged the revocation of its concession agreement by the Federal Government.

A closed door meeting held at the office of the President of the Senate on Wednesday evening, where the executive and the legislature finalised talks on the road.

At the meeting were the President of the Senate, Bukola Saraki; Minister of Finance, Kemi Adeosun; Chairman, Bi-Courtney Highway Services Limited, Dr. Wale Babalakin; and representative of Motorways Assets Limited, Mr. Abdulrasaq Oyinloye.

Also in attendance were the Chairman, Senate Committee on Appropriations, Senator Danjuma Goje; Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Rafiu Ibrahim; and Chairman, Senate Committee on Finance, Senator John Enoh.

Both Adeosun and Babalakin declined to talk to journalists after the meeting.

But a reliable source, who was privy to the discussions at the meeting, said the plan was to remove the road from the list of infrastructure on which the Federal Government was spending most of its resources on since the concessionaire would now look for funds to complete the road.

The source, who declined to be named, said, “Following series of meetings facilitated by the Senate, the Federal Government today agreed with two private sector infrastructure companies on funding and timely completion of reconstruction work on the Lagos-Ibadan Expressway.

“They had a formal agreement on means of proceeding with the completion of the road within the most reasonable time and in a manner that is capable of creating a template for the future development of infrastructure in Nigeria.

“As part of the agreement, a new special purpose vehicle will have shareholders, including Bi-Courtney and Motorways, and the two companies are expected to collapse their current concessions into the new company.

“The Federal Government is expected to support the new consortium with financial instruments that will enable it to raise the necessary funding, the new entity must be operated to the highest standards of corporate management.”

The source noted that the objective of the concession was “to ensure that quality work is done on the road, which is said to be central to the nation’s economy, and that the work is completed in the shortest time possible.”

It was learnt that the Finance minister would take the agreement to the Federal Executive Council for approval next week, while the concession terms might be signed by the parties in two weeks’ time.

Both Bi-Courtney and Motorways, however, refused to speak on the development, while the Federal Ministry of Power, Works and Housing did not respond to enquiries by our correspondents.

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.

Crude Oil

South Africa’s iGas, PetroSA and Strategic Fuel Fund Merge to Create South African National Petroleum Company

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markets energies crude oil

The South African Department of Mineral Resources and Energy (DMRE) has announced the merger of Central Energy Fund (CEF) subsidiaries iGas, PetroSA and the Strategic Fuel Fund (SFF).

The merger will be effective from 1 April 2021 and the new company will be called the South African National Petroleum Company.

The merger, driven by the pursuit of implementing a new company that has a streamlined operating model via the development of a shared services system and a common information platform, comes a few months after cabinet approval and the confirmation that PetroSA had incurred losses of R20 billion since 2014.

Additional factors which prompted the move included the determination to strengthen PetroSA which had not had a permanent CEO in five years prior to the appointment of CEO Ishmael Poolo last and, had become majorly ungainful since its failure to secure gas for the gas-to-liquids refinery project in Mossel Bay.

While the merger deadline has been set, the portfolio committee expressed reservations to the department’s likelihood of meeting the deadline, considering the existing legislative regime, pending issues raised in the SFF and PetroSA forensic reports, as well as PetroSA’s current insolvency and liquidity challenges, the official press statement on the briefing revealed.

“South Africa’s energy sector is entering a new dawn,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With gas discoveries off the coast and the announcement of the REIPPP programme bid window 5 and 6 on the horizon, now is the most opportune time for the merger of the CEF subsidiaries. Of course, it is not an easy task and delays may be anticipated but, this move signals a real change towards a meaningful strategy that will not only be beneficial to the DMRE but to potential investors and local development as well.”

The African Energy Chamber welcomes this move and acknowledges that this is yet another step supporting the country’s determination to restarting the engines of sustainable growth and the transformation of energy policy and infrastructure.

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Crude Oil

Crude Oil Hits $71.34 After Saudi Largest Oil Facilities Were Attacked

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oil

Brent Crude Oil Rises to $71.34 Following Missile Attack on Saudi Largest Oil Facilities

Brent crude, against which Nigerian oil is priced, jumped to $71.34 a barrel on Monday during the Asian trading session following a report that Saudi Arabia’s largest oil facilities were attacked by missiles and drones fired on Sunday by Houthi military in Yemen.

On Monday, the Saudi energy ministry said one of the world’s largest offshore oil loading facilities at Ras Tanura was attacked and a ballistic missile targeted Saudi Aramco facilities.

One of the petroleum tank areas at the Ras Tanura Port in the Eastern Region, one of the largest oil ports in the world, was attacked this morning by a drone, coming from the sea,” the ministry said in a statement released by the official Saudi Press Agency.

It also stated that shrapnel from a ballistic missile dropped near Aramco’s residential compound in Eastern Dhahran.

Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” a ministry spokesman said in a statement on state media.

Oil price surged because the market interpreted the occurrence as supply sabotage given Saudi is the largest OPEC producer. A decline in supply is positive for the oil industry.

However, Brent crude oil pulled back to $69.49 per barrel at 12:34 pm Nigerian time because of the $1.9 trillion stimulus packed passed in the U.S.

Market experts are projecting that the stimulus will boost the United States economy and support U.S crude oil producers in the near-term, this they expect to boost crude oil production from share and disrupt OPEC strategy.

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Crude Oil

A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

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Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.

Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.

A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.

One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.

However, Saudi authorities are yet to confirm or respond to the story.

 

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