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Oilfield Bid Round: FG May Generate N3.17 Billion From Fees

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  • Oilfield Bid Round: FG May Generate N3.17bn From Fees

The Federal Government may generate at least N3.17bn from the payment of fees for the marginal fields put on offer for bidding, data obtained from the Department of Petroleum Resources have shown.

Indigenous oil firms and other investors willing to bid for any of the 57 marginal fields are expected to pay fees amounting to N55.6m per field.

The Director-General, Budget Office of the Federation, Ben Akabueze, had said last month that the government would accelerate marginal fields licensing and renewal of expiring oil mining licences as part of measures to augment revenues.

The DPR announced on Monday the start of the 2020 Marginal Field Bid Round, which “is open to indigenous companies and investors interested in participating in the exploration and production business in Nigeria”.

According to the agency’s guidelines, applicable fees are N500,000 for registration; N2m for application; N3m for bid processing; $15,000 for data prying; $25,000 for data leasing; $50,000 for competent persons’ report, and $25,000 for field-specific report.

Using an average exchange rate of N440/$ in the parallel foreign exchange market, the fees amount to N55.6m per field.

“In addition to the above-listed fees, the signature bonus shall be paid by successful bidders prior to award,” the DPR said.

According to the guidelines, registration, application and processing fees are to be paid into the Treasury Single Account; the fees for data leasing, data prying, CPR and field-specific report are to be paid into the National Data Repository account, and signature bonuses to be paid into the Federation Account.

Several industry stakeholders have described the fees as too high, given the current realities in the oil and gas industry, saying this could discourage many firms from participating in the exercise.

“I fully support the bid round but I think the fees are too exorbitant,” a former board member of the Nigerian National Petroleum Corporation, Alhaji Abdullahi Bukar, told our correspondent on Wednesday.

Stressing the need for the government to support industry players, Bukar said, “If they lower the fees, people who have the capacity to make investments will latch onto the opportunity.

“I don’t think it will be an all-comers’ affairs because everybody knows that the price of oil has crashed. What you will get are people who are serious.”

According to the DPR, the bid round is aimed at growing production capacity by expanding the scope of participation in Nigeria’s petroleum sector, and increasing oil and gas reserves base through aggressive exploration and development effort.

Other objectives include to promote indigenous participation in the sector, thereby fostering technological transfer, and to provide opportunity to gainfully engage the pool of high level technically competent Nigerians in the sector.

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

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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