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FG May Stepdown N120bn Bodo-Bonny Road Project Over Compensation Troubles

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  • FG May Stepdown N120bn Bodo-Bonny Road Project Over Compensation Troubles

The federal government thursday said it might be forced to step down the 34-kilometre long Bodo-Bonny road project over lack of cooperation from its communities in the Niger Delta.

Speaking at a meeting with prominent traditional rulers of the region, Julius Berger, Nigeria Liquefied Natural Gas (NLNG), as well as the Council of Elders from Ataba, and Gokana, among others, at the ministry, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, issued such warning to the communities and asked them to get their houses in order within a week or risk having the project suspended.

The road project which has been hampered from going on for a long time on account of funding constraints, is expected to help address the twin challenges of poverty and unemployment, as well as improve the lives of people of the region, especially those from Bonny, Ogoni, Okrika, Eleme, Andoni, and other communities in the Niger Delta when completed.

The NLNG opted to fund its construction by picking up about 50 per cent of its construction cost. However, compensation rows have reportedly cropped up to stop it from going ahead as planned.

But Fashola, stated in the meeting which had leaders of the communities such as HRM Festus Bagia who was represented by the Chairman of Gokana Council of Chief, Mene Michael Tekure, Chairman Jumbo Group of Houses, Prof. Jasper Jumbo and Clan Head of Ataba, Sir. Benson Egwemre, among others that the communities would have to unit to see the project sail through.

He said otherwise, he might be forced to petition President Muhammadu Buhari, over the issue and withdraw the government’s N60 billion share of the contracting sum for other federal projects in another part of the country.

The minister explained that the Bonny-Bodo road project enjoyed a good funding, with the NLNG providing N60 billion, and the government another N60 billion. He noted that the contractor had also received mobilisation fee for the project, yet it is being stalled by the communities’ lack of cooperation.

Fashola who was worried over unwavering position of the elders that the project will not be implemented except they were carried along and an additional route constructed in Ataba, stated: “We might tell NLNG to take its money back.”

He added: “You must work this peace. Today is Thursday, since you said you know the permanent secretary, I will leave you with him. All I want is a peace accord and an invitation to Julius Berger, not later than Wednesday 28 otherwise I will write a report to Mr. President that it doesn’t seem that this project is ready to go but we can move the money to another project.

“Whether it is Ataba, Ogoni or Gokana own this project. The people you call militants are not spirit. They take their cue from how you react. You are leaders there. If you go back home today and say it is over, the militants too will calm down. They don’t do anything without alerting the leaders.

“For us, we can’t keep the money down. The contractor has received his money but now he can’t work. There are projects where contractors are waiting for money, they don’t have it. That is a contradiction that will not last long,” he explained.

The minister continued: “So, I will leave you. You know where we stand. We have an idea of where you stand. For me, it is a compromise that owes the project. NLNG will not be there forever. It took time to even beg them to release this money. So, if you don’t take ownership of the project and put it to use, we might as well tell them, take your money back the project is not ready.

“When there is peace, we will come back but we need to have a position before the end of this week. There must be an MoU of compromise, assuring us that there will be peace in that place, agreed to by you, give it to us and invite the contractor to come back.

“Suggest to the contractor anything you want him to do. You can’t take-over how they organise their business. They are not bringing imported labour into your land. If your people want to supply diesel and sand, make the case for them, let them chose but don’t impose on them. They must be able to screen those they will admit to work with them and those who don’t meet that standard must seat,” he added.

Notwithstanding, the community leaders in their response agreed to meet with the contractor but requested for an extra week away from the one week given by Fashola to re-converge.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Energy

Federal Government Announces Free CNG Conversion for Commercial Vehicles

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The Federal Government declared on Thursday that the conversion of petrol and diesel-powered commercial vehicles to run on Compressed Natural Gas (CNG) will be free of charge.

The announcement came after the government signed agreements with several companies specializing in the conversion of petrol and diesel vehicles to CNG.

Michael Oluwagbemi, the Programme Director/Chief Executive of the Presidential Compressed Natural Gas Initiative (P-CNGI), disclosed the details of the program to journalists in Abuja.

“Today we’ve just signed with five partners here in the FCT (Federal Capital Territory) participating in the Conversion Incentive Programme,” Oluwagbemi stated.

“The program is tackling the barrier to Nigerian commercial transport operators to convert from PMS (petrol) to gas. Most of them have said that the cost of conversion is expensive, and so what we are doing here today is basically to respond to that concern.”

Benefits for Commercial Transport Operators

The initiative primarily targets commercial transporters under various unions, including the Road Transport Employers Association of Nigeria (RTEAN), National Union of Road Transport Workers (NURTW), and the Nigerian Association of Road Transport Owners (NARTO).

According to Oluwagbemi, these unionized operators will receive conversion kits and installation services completely free of charge.

“This is going to be done through certified conversion workshops that we are beginning to identify. We’ve identified about 123 of them, and five are here with us today in Abuja. As we expand across the country, we will activate more of them,” he said.

Ride Share Operators Included

In addition to unionized commercial transporters, ride share operators such as those working with Uber, Bolt, Lag-Ride, and Move will also benefit from the program. These operators will receive a 50% discount on the conversion equipment and free installation.

Furthermore, the arrangement allows them to pay for the remaining costs in installments, eliminating the need for upfront payments.

“We hope to add more ride share operators soon. Lag-Ride has already signed up, and we are going to send the agreement next week,” Oluwagbemi added.

Impact on Transportation Costs

Through this program, the government aims to reduce transportation costs for Nigerians. Oluwagbemi highlighted that over 20,000 kits will be available in the next three months, distributed across 25 states with existing CNG capacity.

This initiative is part of a broader palliative program funded by the National Assembly, which has allocated additional resources for the acquisition of more kits later this year.

“The agreement we signed today ensures that the savings from the conversion will be passed on to ordinary Nigerians. We will begin to see some impact in terms of reduced transportation costs,” Oluwagbemi noted.

Monitoring and Enforcement

To ensure the success of the program, the government has implemented a robust monitoring mechanism.

The Nigerian gas vehicle monitoring system will oversee the conversion process and ensure compliance with agreed pricing reductions.

“We have a very strong monitoring mechanism around conversion and the enforcement of reduced pricing for Nigerians. The framework of the agreement includes significant pass-on of savings to ensure the purpose of the palliative is achieved,” Oluwagbemi emphasized.

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Crude Oil

Nigeria’s Oil Production Rises by 25,000 Barrels Daily, Hits 1.276 Million BPD in July

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Nigeria’s daily oil production increased in July by 25,000 barrels per day to 1.276 million barrels per day (mbpd).

This development was disclosed by the Organisation of the Petroleum Exporting Countries (OPEC) in its Monthly Oil Market Report for June, based on direct communication with the Nigerian government.

In April, production was recorded at 1.28mbpd, but it fell to 1.25mbpd in May.

Secondary sources cited by OPEC indicated a slight decrease from 1.37mbpd in May to 1.36mbpd in June.

This disparity shows Nigeria’s challenges in maintaining a steady increase in oil production.

Mele Kyari, Group Chief Executive Officer of the Nigeria National Petroleum Company Limited (NNPC), had previously stated that crude production was approaching 1.7mbpd in May.

Kyari emphasized the potential for higher production levels, recalling that during the COVID-19 pandemic in April 2020, Nigeria’s production reached 2.2mbpd without new drilling activities.

The drop in production since then has been attributed to various factors, including theft and vandalism of oil infrastructure.

Despite these challenges, Nigeria’s oil production saw a marginal increase in April, rising from 1.23mbpd in March to 1.28mbpd, according to OPEC data.

This increase followed a significant drop from 1.32mbpd in February to 1.23mbpd in March.

Stakeholders have expressed concern over the persistent decline in production and its impact on revenue.

In response, the NNPC declared a state of emergency on oil production, aiming to address the factors hindering output.

At the Nigeria Oil and Gas Conference and Exhibition Week in Abuja, Kyari reaffirmed the NNPC’s commitment to tackling production challenges.

“We have declared war on the challenges affecting our crude oil production. We know what to fight, we have the right tools, and we are working with our partners to improve the situation,” Kyari stated.

The recent increase in daily oil production is a positive development for Nigeria’s oil sector, but sustained efforts are required to achieve long-term stability and growth in production levels.

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Crude Oil

Oil Prices Climb as U.S. Inflation Eases, Brent Hits $86

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Crude oil - Investors King

Oil prices rose on Friday after traders noticed signs of easing inflationary pressures in the United States, the world’s largest oil consumer.

Brent crude oil, against which Nigerian oil is priced, had risen by 72 cents, or 0.8% to $86.12 a barrel.

Meanwhile, U.S. West Texas Intermediate (WTI) crude oil climbed by 85 cents, or 1%, to $83.47 a barrel. Both contracts had also gained in the prior two sessions.

Despite these gains, Brent crude oil was poised to fall by about 1% week-on-week after four consecutive weekly increases.

WTI crude oil, on the other hand, remained broadly stable on a weekly basis.

Investor confidence was boosted after data released on Thursday showed that U.S. consumer prices fell in June, fueling hopes that the Federal Reserve might cut interest rates soon.

Lower rates are expected to spur economic growth, thereby increasing fuel consumption.

However, the market is still awaiting more definitive signs of action. While Federal Reserve Chair Jerome Powell acknowledged the recent trend of improving price pressures, he told lawmakers that more data would be needed to strengthen the case for rate cuts.

“Cooling U.S. inflation numbers may support the case for the Fed to kick-start its policy easing process earlier rather than later, but it also adds to the series of downside surprises in U.S. economic data, which points to a clear weakening of the U.S. economy,” said Yeap Jun Rong, a market strategist at IG.

In addition to inflation data, indications of strong summer fuel demand in the U.S. also supported prices. U.S. gasoline demand was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest level since 2019 for the week that includes the Independence Day holiday, according to government data released on Wednesday.

Jet fuel demand on a four-week average basis was at its strongest since January 2020.

“The market will remain range-bound, paralyzed by opposing forces of expected demand recovery fueled by anticipation of a strong summer for fuel consumption … but sentiment remains pegged by ongoing economic weakness and uncertain demand recovery,” said Emril Jamil, a senior oil analyst at LSEG.

The strong fuel demand encouraged U.S. refiners to ramp up activity and draw from crude oil stockpiles. U.S. Gulf Coast refiners’ net input of crude rose last week to more than 9.4 million bpd for the first time since January 2019, government data showed.

However, weaker demand signs from China, the world’s largest oil importer, could counter the positive outlook from the U.S. and weigh on prices.

“The recent downside correction is evidently over, although the speed of further ascent might be hindered by falling Chinese crude oil imports, which plummeted 11% in June from the previous year,” said Tamas Varga of oil broker PVM.

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