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Malabu Oilfield Licence, Nine Others to Expire in 2020, 2021

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  • Malabu Oilfield Licence, Nine Others to Expire in 2020, 2021

Ten oil block licences, including the controversial Oil Prospecting Licence 245, held by international and local firms will expire in 2020 and 2021.

OPL 245, better known as Malabu oil block, is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion barrels.

Two oil majors, Shell and Eni, are embroiled in a long-running corruption case revolving around the purchase of the oilfield in 2011.

Shell and Italy’s Eni bought the OPL 245 offshore field for about $1.3bn in a deal that spawned one of the industry’s largest corruption scandals. It is alleged that about $1.1bn of the total sum was siphoned to agents and middlemen.

The oil block licences that will be due for renewal next year are Oil Mining Lease 119 and OPLs 305, 306, 215 and 241, according to data obtained from the Department of Petroleum Resources.

OML 119 is being operated by the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation; OPLs 305 and 306 by Crownwell Petroleum Limited; OPL 215 by Noreast Petroleum Nigeria Limited; and OPL 241 by Oilworld Limited.

OMLs 120, 121 and 122, as well as OPLs 245 and 1789, will expire in 2021.

OMLs 120 and 121 are operated by Allied Energy Resources Limited while Peak Petroleum Industries Nigeria Limited is the operator of OML 122.

The Nigerian Agip Exploration Limited and Shell Nigeria Ultra Deepwater serve as the operators of OPL 245, while OPL 1789 is operated by Oranto Petroleum Limited.

In December last year, the Federal Government of Nigeria said it had filed a $1.1bn lawsuit against Royal Dutch Shell and Eni in a commercial court in London in relation to the OPL 245.

The High Court of the Federal Capital Territory in Jabi, Abuja on Wednesday, ordered the arrest of the immediate past Attorney-General of the Federation, Mr Mohammed Adoke, a former Minister of Petroleum Resources, Dan Etete, and four others, who were named in the charges filed by the Economic and Financial Crimes Commission in relation to the sale of OPL 245.

According to the EFCC, the charges bordered on the fraudulent allocation of the OPL 245 and money laundering involving the sum of about $1.2bn, forgery of bank documents, bribery and corruption.

The alleged $1.2bn scam involved the transfer of the oilfield purportedly from Malabu Oil and Gas Limited to Shell Nigeria Exploration Production Co. Limited and Nigeria Agip Exploration Limited.

An OPL gives its holder the exclusive right to explore for and develop oil and gas within a defined area while an OML gives its holder the exclusive right to explore for, develop and produce oil and gas within a defined area.

An OPL is granted for a maximum of five years when granted over land and territorial waters. When granted over the continental shelf or an exclusive economic zone, it is for a maximum period of seven years. An OML is granted for a 20-year term but may be renewed upon written approval by the minister.

To apply for an OML, an OPL licence holder will have found oil in commercial quantities and satisfied all the conditions attached to the OPL, according to the Nigeria Extractive Industries Transparency Initiative.

NEITI noted that either licence could be revoked if “at the expiration of the block, the operator fails to operate the block in line with what is stipulated in the relevant petroleum laws and regulations” or “the operator fails to meet the stipulated minimum work programme for the conversion of the OPL to OML in the case of OPL blocks.”

OML blocks can be renewed for another term of 20 years upon payment of the relevant statutory fees provided the blocks justify the need for the renewal.

The oil firms whose leases are due to expire are expected to apply to the DPR for renewal.

“Holders of OPLs are required to relinquish 50 per cent of the block at conversion to OML. The relinquished portion is returned to the government. Similarly, holders of OMLs are required to relinquish 50 per cent of the lease 10 years after conversion to OML,” NEITI added.

According to the DPR, upon receipt of the application and payment of $2m application fees, the DPR assesses all the exploration and development efforts undertaken in the block to ensure that sufficient investments were made to optimally explore and develop it with due compliance to applicable rules and regulations.

It also assesses the production profile and production growth plan to ensure that sound reservoir management practice is adhered to for optimal maturation of the asset.

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

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

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The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

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