Connect with us

Economy

FG Evaluates 250 Firms’ Bids for Gas Flare Points

Published

on

gas flaring
  • FG Evaluates 250 Firms’ Bids for Gas Flare Points

The Federal Government has begun the evaluation of statements of qualification submitted by about 250 firms for the commercialisation of gas being flared by oil companies operating in the country.

In October 2016, President Muhammadu Buhari inaugurated the Nigerian Gas Flare Commercialisation Programme, aimed at reducing gas flaring by harnessing flare gas to stimulate economic growth, drive investments and provide jobs in the Niger Delta through the utilisation of widely available innovative technologies.

The Chairman, Ministerial Steering Committee for the NGFCP, Mr Rabiu Suleiman, at the commencement of the evaluation of SOQ on Monday in Lagos, said the government had set a target of eliminating gas flaring by 2020.

“I must admit that this is a tall order but we are committed and determined to see that we do our best to ensure that we deliver what we have been assigned to do,” he added.

The Deputy Manager, Gas Production and Flare Monitoring, Gas Division, NNPC, Mr Olawole Ogunsola, noted that advertisements were placed late last year for companies willing to commercialise flare gas at flare points to show interest and submit statements of qualification.

According to him, the Petroleum Act, paragraph 35B, First Schedule, gives the government the right to take gas produced in association with crude oil and not taken by the operators or utilised.

He said, “So, the government is doing this via third-party companies in order to promote investment and get people who are qualified technically, who have the financial capability and the experience to work in the Niger Delta and help us harness this flare gas and take it to the market.

“Overall, about 250 companies have expressed interest, going by the data we have, and their statements of qualification will be evaluated. Those who make it will proceed to the next phase, which is the Request for Proposal phase, where the DPR, through the National Data Repository, will open the data room and they can have access to each flare points and then make a firm proposal on which flare points they are interested in.”

Ogunsola said the DPR had catalogued all flare points in the land, swamp, offshore and deep offshore, adding, “There are 178 flare points today and they are available for people to take.”

He said interested companies paid a fee of $1,000 to be able to get to the SOQ phase.

“Initially, when we had expressions of interest, there were about 850 companies. But when we proceeded to the second phase, we asked them for a fee and some fell along the way,” he said.

“The plan is that within the next few weeks, those who qualify at this phase will be announced, and they will proceed to the Request for Proposal stage. There will be a bidders’ conference. After the RFP stage, where the proposals submitted will be evaluated, preferred bidders will emerge and then permits will be issued. The plan is to make this happen before the end of the year,” Ogunsola 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.

Economy

Oil Firms Borrowed N130B From Banks in February – CBN

Published

on

banks

Operators in the downstream, natural gas and crude oil refining sectors of the Nigerian oil and gas industry borrowed N130b from Nigerian banks in February amid the significant rise in global crude oil prices.

The debt owed by the oil and gas companies rose to N4.05tn in February from N3.92bn in January, according to the latest data obtained from the Central Bank of Nigeria on Monday.

Operators in the upstream and services subsectors owed banks N1.26tn in February, down from N1.27tn a month earlier.

The combined debt of N5.31tn owed by oil and gas operators as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.

Oil and gas firms received the biggest share of the credit from the deposit money banks to the private sector.

The slump in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.

A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, reflecting expectations of rising asset risk and weakening government support capacity over the next 12 to 18 months.

“Nigerian banks’ loan quality will weaken in 2021 as coronavirus support measures implemented by the government and central bank last year, including the loan repayment holiday, are unwound,” said Peter Mushangwe, an analyst at Moody’s.

The rating agency estimated that between 40 percent and 45 percent of banking loans were restructured in 2020, easing pressure on borrowers following the outbreak of the pandemic.

Another global credit rating agency, Fitch Ratings, had noted in a December 8 report that Nigerian bank asset quality had historically fallen with oil prices, with the oil sector representing 28 percent of loans at the end of the first half of 2020.

It said the upstream and midstream segments (nearly seven percent of gross loans) had been particularly affected by low oil prices and production cuts.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

The rating agency predicted that Nigerian bank asset quality would weaken over the next 12 to 18 months.

Continue Reading

Economy

Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

Published

on

Dollar thrive in Nigeria

The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

Continue Reading

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

Published

on

Petrol Importation - investorsking.com

The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

Continue Reading

Trending