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Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

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Gas Exports Drop as Shell Declares Force Majeure
  • Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

Nigeria would need at least $3.5 billion investments to activate the new market-based initiative it had set up to end the practice of gas flaring at oil fields in the Niger Delta by 2020, the Programme Manager of the Nigerian Gas Flare Commercialisation Programme (NGFCP), Mr. Justice Derefaka, has disclosed.

Speaking at the 36th edition of the annual conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) held in Lagos recently, Derefaka, explained that the $3.5 billion to be sought by Nigeria would be brought in by investors willing to participate in the NGFCP, which according to him, has immense benefits.

Derefaka, stated the $3.5 billion investment would give annual returns of $1 billion.

“The NGFCP economic analysis also shows that with the US3.5 billion inward investments pumped in to implement the NGFCP, huge social and economic benefits would accrue to host communities in the Niger Delta, investors and the national economy as a whole.

“Benefits would include curbing pollution, climate change, global warming impacts in local communities and providing households with clean energy, particularly in unlocking LPG (cooking gas i.e. produce 600,000 MT of LPG per year),” said Derefaka.

He further explained: “In summary, this paper pinpoints the programme could trigger up to 85 projects and generate approximately 300,000 direct and indirect jobs in total.
“The potential annual revenue generation, GDP impact to the federation account is estimated at U$1 billion per annum.”

According to him, the flared gas to be monetised in the NGFCP would be harnessed from top 50 flaring points across the Niger Delta, thus reducing the volume of flared gas by 80 per cent.

He also explained that the NGFCP would reduce Nigeria’s carbon emissions by approximately 13 million tons per year, which could also be monetised under an emission credits or carbon sale programme.

Additionally, Derefaka stated that the international development partners to the NGFCP have scrutinised the initiative and subsequently proclaimed its design as detailed.
This, according to him, was an affirmation that it is an innovative, robust and scalable approach to gas flare reduction which could be replicated in many other gas flaring countries around the World.

“Overall, the NGFCP has been designed as the contribution of the petroleum sector to Nigeria’s Intended Nationally Determined Contributions (INDC) under the Paris Agreement and it is the first market driven program undertaken on this scale globally, making it a high-impact program,” he added.

Speaking on the transactional and commercial contractual structures of the NGFCP, Derefaka, stated that there would be a Milestone Development Agreement (MDA) between Flare Gas Buyer (FGB) and the federal government with the FGB undertaking to implement its project according to a set of milestones.

This, he added would also include Gas Supply Agreement (GSA) between the FGB and government which confers the government’s title of flare gas to FGBs, containing the quantities of gas contracted for, the price and the ‘take or pay terms.’

Derefaka, stated that there would also be the Connection Agreement (ConnAg) between FGBs and gas producers containing the flare gas delivery terms and conditions, rules for the physical connection of facilities, and nomination procedures; Deliver or Pay Agreement (DoPA) which is an undertaking of producers with respect to guaranteed flare gas; and Permit to Access Flare Gas (PAFG) which is a permit granted to FGB upon becoming a permit holder.

“On completion of all commercial and contractual agreement, the flare gas buyer becomes a permit holder. The FGB will pay an award fee for grant of permit to access flare gas.
“And, simultaneously with the execution of the final commercial agreements, Flare Gas Buyer will be awarded a Permit to Access Flare Gas (PAFG). This is a permit prescribed under the regulations, and is granted by DPR on behalf of FGN.

“It permits permit holder to access the flare sites for the purpose of constructing the flare gas connection assets to the producer’s facilities at all flare sites specified in the permit.

“It permits permit holder to take flare gas in the amounts contracted for under the GSA. It permits other access to those flare sites for operational reasons during the currency of the GSA. Permit holder must install metering, maintain logs and submit reports on gas utilisation, flaring and venting,” he added.

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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Shoprite: New Investor Assures Nigerian Consumers of Improved Services

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Shoprite - Investors King

Following the acquisition deal between Retail Supermarkets Nigeria Limited (RSNL), owner and operator of the Shoprite stores in Nigeria, and Ketron Investment Limited, the new investor has assured consumers of robust services in the years ahead.

Ketron, a Nigerian company owned by a group of institutional investors led by Persianas Investment Limited, recently acquired the supermarket brand.

The divestment by Shoprite International was in line with its strategy to change from an ownership model to a franchise model. This change in ownership has also received the approval of the Nigerian regulator the Federal Competition and Consumer Protection Commission (FCCPC).

Speaking on the acquisition, Chairman, Ketron Investment Limited, Tayo Amusan said, “We are thrilled to complete the acquisition of Shoprite, ensuring the continued operations of one of the biggest retail success stories in Nigeria. We look forward to building an even stronger company following our acquisition and are excited about the greater impact we will achieve to the benefit of our customers and other stakeholders now and well into the future.”

Since its launch in Lagos in December 2005, Shoprite has expanded to 25 outlets across eleven states and Abuja, FCT.

According to the terms of the acquisition, Ketron acquired 100 per cent ownership of Shoprite in Nigeria and will continue operations across all existing outlets. It also plans to open additional stores and introduce more Nigerian-made products in the stores. This he noted, will also result in more opportunities for Nigerians.

“It is our vision to create fundamental change for the better within Nigeria,” said Amusan. “With benefits from our knowledge of the ever-evolving Nigerian retail marketplace, well-grounded social and economic research, and hands-on experience from our team, we are confident that this acquisition will foster a robust and sustainable business model for the ultimate benefit of all stakeholders,” he concluded.

Professional services firms, KPMG Advisory Services, MBO Capital Management Limited and Banwo & Ighodalo advised Ketron on the deal. CEO, MBO Capital, Jide Ogundare, stated that the deal signalled an opportunity for Ketron to uphold a thriving business.

“It will be hard work,” he said, “but with the plans we have in place, and with the support of the larger Shoprite family in Nigeria including our staff and every Nigerian shopper that walks through our doors, we are confident of success.”

Shoprite Holdings is Africa’s largest food retailer, operating 2,843 supermarkets in 15 countries and serving 35 million customers in Africa and the Indian Ocean Islands. At the moment, Shoprite Nigeria’s supply chain includes more than 300 leading Nigerian suppliers, and boasts small businesses and farmers among its partners and suppliers.

Ketron said Shoprite International will continue as technical advisers and Ketron will sustain the relationships established by Shoprite over the last decade and a half while ensuring a smooth “transfer of values.”

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CBN Offers Assistant In Printing Gambia’s Currency

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Godwin Emefiele CBN - Investors King

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said that the bank is willing to assist the Central Bank of the Gambia to print its legal tender.

Emefiele said this in Abuja on Tuesday during a two-day visit by a delegation from the Central Bank Of Gambia, led by its governor, Mr. Buah Saidy.

This was in response to a request by the CBG for a possible partnership to tackle acute currency shortages among other currency management challenges in the country.

Saidy informed the CBN governor that relying on its current printer, De La Rue of London, for its currency needs was expensive and unsustainable.

He explained that it costs the bank about £70,000 to lift printed currencies from Sri Lanka to the Gambia.

In response, the CBN Governor assured his visitors that the bank had an extremely competitive advantage to undertake the currency printing for  Gambia, adding that the Nigerian Security Printing and Minting had a lot of idle capacity to satisfy the demand of the CBG.

He said, “I note your point on currency management. The Nigerian mint was set up in the early 1960s and we’ve been producing our currency since the early 60s and we have a lot of idle capacity to ensure that instead of you going to Europe or other countries, you will be able to benefit from our ideas.

“Our colleagues will take you to the security printing facility. Our colleagues that came in from Liberia two months ago were fascinated by the kind of facilities we have at our security printing and minting facility and I am sure that you will also enjoy them.

“And I am sure they will follow you back to the Gambia to see how they can help you to structure your economic order quantities so we can also be of assistance in printing your currency.

“And I can assure you that we can be extremely competitive if only from the standpoint of logistics and freight from Europe but it’s just going to be a few hours from here to the Gambia and the rest of them.”

The CBG Governor also noted that one of the purposes of the visit was to benefit from the CBN’s vast experiences on how it had successfully regulated the financial system and sought assistance in the areas of information technology, modernisation, cybersecurity, forex shipping and management, among others.

Emefiele in response attributed the successes to the support which the apex bank had enjoyed from the National Assembly.

He said, “On the issue of the CBN independence, I thank you for the kind words. But I think the point is that we thank our own parliament. Our parliament has been extremely supportive of the CBN.”

He, therefore, advised the CBG to work with its parliament to create laws that would provide the independence needed.

Emefele further stated that the apex bank was not sparing any effort to address issues of supply management to ensure economic growth.

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Ardova to Acquire 100 Percent Stake in Enyo Retail and Supply Limited

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Olumide Adeosun Ardova - Investors King

Ardova, an indigenous energy company headquartered in Lagos, Nigeria, with extended operations in Ghana, has reached an agreement with Enyo Retail and Supply Holding Limited to acquire a 100 percent equity stake in Enyo Retail and Supply Limited.

This announcement follows the execution of a share purchase agreement by the two companies.

The company disclosed in a statement signed by Oladeinde Nelson-Cole, Company Secretary/General Counsel, Ardova Plc.

The statement highlighted the parties’ commitment to closing the transaction in line with the share purchase agreement, as soon as agreed closing conditions are satisfied, and regulatory approval is received.

Stanbic IBTC Capital Limited and Banwo & Ighodalo are acting as Financial and Legal Advisers respectively to AP, while Rand Merchant Bank and Herbert Smith Freehills Paris LLP are acting as Financial and Legal Advisers to ERSHL and certain of its shareholders.

Olumide Adeosun, Chief Executive Officer of AP, stated that “On completion, this acquisition will lead to a stronger downstream energy group that benefits from the increased customer reach and service delivery excellence of both companies, with the combination expected to produce stronger financial results.”

Ardova Plc and Enyo Retail & Supply Limited will communicate details of future progress made on this acquisition.

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