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Shell Invites Bid for New Bonga FPSO

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  • Shell Invites Bid for New Bonga FPSO

Shell Nigeria Exploration and Production Company has announced the release of invitation to tender to contractors for the development of the Bonga South-West Aparo oil field.

SNEPCo said in a statement that the project’s initial phase included a new Floating, Production, Storage and Offloading vessel, more than 20 deep-water wells and related subsea infrastructure.

The field lies across Oil Mining Leases 118, 132 and 140, about 15km South-West of the existing Bonga Main FPSO.

According to the statement, the invitation to tender is for engineering, procurement and construction contracts for the 150,000 barrels per day project in the Gulf of Guinea.

The Managing Director, SNEPCo, Bayo Ojulari, said, “This is a new vista for deep offshore oil and gas exploration in Nigeria based on a revised commercial framework embraced by the government and the project investors.

“SNEPCo has concluded OML 118 negotiations with the NNPC. We now have a clear commercial framework, supported by the government and project investors, toward a potential Bonga South-West Aparo Final Investment Decision.”

He described the conclusion of the commercial framework as a key milestone for the project and the development of Nigeria’s deep-water oil and gas industry.

“The new framework marks the start of the second generation of deep-offshore exploration and development, not just for SNEPCo but for all players in Nigeria’s deep water. This is a model that we see being replicated in the industry to further unleash Nigeria’s potential in deep-water exploration,” Ojulari added.

On the estimated project cost, the General Manager for BSWA, SNEPCo, Adam Bradley, said, “The release of ITT will allow ourselves, the government and investing parties to understand the actual costs for the initial phases which we expect will be very competitive.”

According to the statement, SNEPCo operates OML 118 under a production sharing contract with the NNPC. The co-venture partners in OML 118 are Total E & P Nigerian Limited, Nigerian Agip Exploration Limited and Esso Exploration and Production Nigeria (Deepwater) Limited.

In a related development, the NNPC and its partners for the development of the Bonga Main and Bonga South-West fields in OML 118 on Thursday signed the Heads of Terms Agreement for the development of the over 10 billion barrels of deepwater oil reserves

NNPC’s Group General Manager, Group Public Affairs Division, Ndu Ughamadu, said the HOT deal was executed after a successful settlement of a 10-year dispute among stakeholders based on a comprehensive rapprochement anchored by the corporation.

The Chief Operating Officer, Upstream, NNPC, Bello Rabiu, said the signing of the agreement on the project came as a major landmark in the quest to unlock the nation’s vast deepwater resources and grow the overall crude oil reserves base.

He said with the HOT agreement now safely in the kitty, stakeholders were looking forward to speedy negotiation ahead of the execution of the FID under terms which would be mutually beneficial to all concerned.

The Group General Manager, Corporate Planning and Strategy, NNPC, who also doubled as head of the Bonga South-West Project dispute resolution team, Bala Wunti, said the resolution of the legal dispute had paved the way for partners to cast their investment net into Nigeria’s highly prolific deep waters with the potential for maximum returns.

He said the initiative to exit the legal battle and embrace the commercial option proved a turning point in settling the dispute and turned the next page of the project which was key to the Federal Government’s aspiration in terms of production increase and reserve growth.

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.

Economy

World Bank Lauds Kogi’s 2020 Financial Statement

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The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.

In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.

As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.

SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.

The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.

The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.

Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.

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Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank

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The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.

The bank disclosed in its November report, Nigeria Development Update.

Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.

This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.

The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.

It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.

“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”

The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.

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Economy

Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance

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Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.

Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.

According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.

Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.

The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.

She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.

Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”

“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.

Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.

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