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Savannah Energy Announces Q1 2023 Financial and Operational Update with 29% Increase on Nigerian Operations



Savannah Energy

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa is pleased to provide a financial and operational update for Q1 2023.

The Q1 2023 Unaudited Financial Results showed that the company posted a total revenue of US$147.6m, comprising of US$71.0m from its Nigerian operations (up by 29% compared to Q1 2022 total revenue of US$55.0m), and Chad upstream revenues of US$76.6m. The report shows the Group’s cash balance stood at US$217.3m, with a net debt of US$412.2m.

In terms of operations, its average gross daily production for the quarter stood at 54.9 Kboepd, compared to average gross daily production of 21.6 Kboepd in Q1 2022. Excluding Chad production, Q1 2023 average gross daily production on a like-for-like basis was 25.9 Kboepd, a 20% increase compared to Q1 2022. Out of the total average gross daily production of 54.9 Kboepd, 43% was gas, including a 22% increase in production from the Uquo gas field compared to the same period last year, from 116.4 MMscfpd (19.4 Kboepd) to 142.2 MMscfpd (23.7 Kboepd).

Andrew Knott, CEO of Savannah Energy, said:

This morning’s update clearly demonstrates the strength and potential of our business and the positive impact we are making in our host countries: we are reporting like-for-like1 organic Total Revenues growth of 26% year-on-year (with like-for-like Total Revenues having now doubled since 2017); our oil and renewable energy projects in Niger are now advancing at a rapid pace; and COTCo in Cameroon continues to deliver a strong consistent financial performance. On the new ventures front, we continue to progress our planned acquisition of PETRONAS’ assets in South Sudan and expect to announce a series of new utility-scale renewable power projects over the course of Q2 and Q3 2023.”

Q1 2023 vs Q1 2022 Average Gross Daily Production


Uquo Gas






Stubb Creek




Doba Oil






1 January-31 March 2023 142 0.2 2.0 29.1 54.9
% of total production 43% 0.5% 3.5% 53%
1 January-31 March 2022 116 0.2 2.0 NA 21.6
% of total production 22% (3%) (1%)         – 155%

N.B. – Percentages in this table are calculated from exact numbers, the figures above are rounded.

Country Updates

  • Nigeria: During the quarter, Savannah sold gas to seven customers including Calabar Electricity Generation Company Limited, Lafarge Africa PLC, Ibom Power Company Limited, First Independent Power Limited, the Central Horizon Gas Company Limited, TransAfam Power Limited and Notore Chemical Industries PLC. As part of its plans to advance the Company’s ability to maintain and grow its gas production levels over the course of the coming years, Savannah is progressing the US$45 million compression project at the Uquo Central Processing Facility (“CPF”). Following the front-end engineering and the associated order of long lead items, detailed design work commenced in Q1 2023 and is scheduled to be completed in Q4 2023.
  • Cameroon: Savannah acquired an effective 41.06% indirect equity interest in the Cameroon Oil Transportation Company (“COTCo”) from ExxonMobil on 9 December 2022. During Q1 2023, COTCo transported an average of 128.8 Kbopd of crude oil with a total of 11 liftings conducted on behalf of its customers. Each lifting saw the safe and successful transfer of approximately 1 MMbbls of crude oil from the FSO to ocean going vessels by COTCo on behalf of its customers.
  • Niger: Savannah has continued progressing plans for the Early Production Scheme on the approximately 35 MMstb of Gross 2C Resources R3 East oil development. Bottomhole pumps and completion equipment were ordered in Q1 2023, and a work-over rig solution has been identified for a well test programme, which the Company expects to carry out in Q4 2023. Following the well test result, Savannah expects to issue a comprehensive field development plan with first oil targeted in 2024 and production expected to ramp up to a plateau rate of approximately 5 Kbopd for the initial development. The crude is expected to be evacuated via the new Niger-Benin export pipeline, which is currently under construction, reported to be 75% completed and estimated to be fully operational in Q4 2023.

Savannah’s up to 250 MW Parc Eolien de la Tarka wind farm project in Niger, which has the potential to increase Niger’s on-grid electricity supply by over 40%, has made significant progress. All key studies required to achieve project sanction (including wind measurement, environmental and social impact, grid integration, security, cartography, road and aviation studies) have either been completed or are in progress. The preliminary on-site wind speed data measurements having proven to be highly encouraging and we expect project sanction in 2024.

  • Chad: As previously announced on 24 March 2023, the President of the Republic of Chad issued a Decree on 23 March 2023 nationalising Savannah Chad Inc’s (“SCI”) (formerly Esso Exploration and Production Chad Inc (“EEPCI”)) upstream production assets in Chad; subsequently on 31 March 2023 the Government of Chad passed a law confirming the nationalisation of SCI’s upstream production assets and also providing for the nationalisation of Savannah’s c. 40% interest in Tchad Oil Transportation Company (“TOTCo”), the owner and operator of the Chad section of the ETS.

Such nationalisation does not affect Savannah’s 41.06% indirect equity interest in COTCo. The actions of the Republic of Chad are in direct breach of the upstream conventions to which SCI and the Republic of Chad are, amongst others, party, together with a direct breach of the convention between TOTCo and the Government of Chad. These nationalisations were made notwithstanding the fact that under SCI’s operatorship the historic production decline was immediately reversed, with daily production averaging 29,349 barrels per day since Savannah’s ownership on 9 December 2022, an increase of c.9% as against the equivalent period prior to Savannah taking control of SCI. Savannah had also initiated plans to significantly increase production further through an active investment programme.

Disputes under the upstream conventions are subject to the jurisdiction of an ICC arbitral tribunal, seated in Paris. The Company has commenced ICC arbitral proceedings against the Government of Chad to seek full recompense for the loss that it has and will suffer as a result of the nationalisation of SCI’s assets.

  • South Sudan: Further to the Company’s 12 December 2022 announcement, the Company continues to advance the various workstreams required to complete the reverse takeover of PETRONAS International Corporation Limited’s(“PETRONAS”) entire oil and gas business in South Sudan, and intends to publish an AIM Admission Document in H1 2023. Further updates will be provided as and when appropriate.

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Banking Sector

CBN Rate Hikes Raise Borrowing Costs for Banks Seeking FX



Retail banking

The Central Bank of Nigeria (CBN) has implemented a significant adjustment to its borrowing rates.

The move, which follows the CBN’s recent decision to adjust the asymmetric corridor around the Monetary Policy Rate (MPR), has led to an increase in the cost of borrowing for banks seeking foreign exchange (FX).

This decision comes amid heightened concerns over the Naira’s performance and inflation rates.

According to Bismarck Rewane, Managing Director/CEO of Financial Derivatives Company Limited, the adjustment means that banks now face borrowing costs of nearly 32% from the CBN, a sharp increase from the previous rate of approximately 26%.

This change in borrowing costs is intended to deter banks from relying on the CBN for FX purchases, thereby reducing pressure on the Naira.

Data reveals that in the first five days of July 2024, banks borrowed an unprecedented N5.38 trillion from the CBN, marking a record high.

The increased borrowing costs are expected to reduce this practice, thereby alleviating some of the strain on the Naira.

Despite these efforts, the Naira has continued to struggle. On Tuesday, the Naira depreciated by 3.13% against the US dollar, with the exchange rate falling to N1,548.76.

This decline is attributed to reduced dollar supply and ongoing uncertainty surrounding Nigeria’s foreign reserves.

The black market saw an even sharper drop, with the Naira falling to 1,687 per dollar, reflecting broader concerns about currency stability.

Rewane highlighted that the recent rate hikes are part of a broader strategy by the CBN to manage inflation and stabilize the Naira.

“The increase in borrowing costs is a necessary step to address the carry trade practices where banks use cheap funds from the CBN to buy FX and sell it at higher rates,” he explained.

The CBN’s decision to raise borrowing costs comes amid a backdrop of persistent inflation and rising interest rates.

Over the past three years, the CBN has raised interest rates 12 times, with recent adjustments aimed at managing liquidity and curbing inflation.

As of June 2024, Nigeria’s headline Consumer Price Index (CPI) reached 34.19%, up from 33.95% in May.

The central bank’s policy changes are expected to have mixed effects.

Analysts at FBNQuest anticipate that banks will continue to benefit from the high-interest rate environment, potentially leading to a shift of assets from equities to fixed-income securities as investors seek higher yields.

The CBN remains committed to navigating Nigeria through these challenging economic conditions.

By adjusting borrowing costs and implementing tighter monetary policies, the central bank aims to strike a balance between managing inflation, stabilizing the Naira, and supporting overall economic growth.

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Senate Passes Bill for 70% Windfall Levy on Banks’ Forex Gains



Naira Exchange Rates - Investors King

The Nigerian Senate has approved an amendment to the Finance Act of 2023, increasing the windfall levy on banks’ foreign exchange gains from 50% to 70%.

The bill was passed during a plenary session on Tuesday after a thorough review by the Finance Committee.

The Senate’s decision aims to address the significant profits banks have accrued due to recent foreign exchange policy shifts.

This windfall is viewed as a product of government intervention rather than the banks’ strategic efforts, prompting the call for redistribution.

The additional revenue from this levy is expected to contribute to financing the N6.2 trillion Appropriation Amendment Bill.

This funding will support various government projects and initiatives, ensuring that the windfall benefits are reinvested into the economy.

The Senate also approved amendments to the payment timeline, setting the levy to take effect from the start of the new foreign exchange regime through 2025, avoiding retrospective application from January 2024.

Also, the Upper Chamber removed the proposed jail term for principal officers of defaulting banks.

Instead, banks that fail to remit the levy will incur a penalty of 10% per annum on the withheld amount, alongside interest at the prevailing Central Bank of Nigeria (CBN) Minimum Rediscount Rate.

This legislative move aligns with President Tinubu’s broader fiscal strategy, which aims to optimize national revenue through independent sources.

The amendment underscores the Senate’s commitment to leveraging bank profits for national development, especially amid economic challenges.

While some industry stakeholders express concerns about the impact on banking operations, others see this as a necessary step towards equitable wealth distribution and economic stability.

The bill’s passage is anticipated to have significant implications for both the financial sector and the broader economy.

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Banking Sector

Zenith Bank Retains Position As Nigeria’s Number One Bank By Tier-1 Capital For Fifteen Consecutive Years In The 2024 Top 1000 World Banks’ Ranking



For the fifteenth consecutive year, Zenith Bank Plc has retained its position as the Number One Bank in Nigeria by Tier-1 Capital in the 2024 Top 1000 World Banks’ Rankings, published by The Banker Magazine.

This ranking places Zenith Bank Plc as the 565th Bank globally with a Tier-1 Capital of $2.01 billion. The rankings, published in the July 2024 edition of The Banker Magazine of the Financial Times Group, United Kingdom, recognise Zenith Bank’s continued financial strength and stability.

They are based on the 2023 year-end Tier-1 capital of banks globally and remain the primary source for global bank financials used by most international organisations in their assessments of banks.

Tier-1 Capital describes capital adequacy, the core measure of a bank’s financial strength from a regulator’s perspective.

According to the ranking, Tier-1 Capital, as defined by the latest Bank for International Settlements (BIS) guidelines, includes loss-absorbing capital, i.e., common stock, disclosed reserves, retained earnings, and minority interests in the equity of subsidiaries that are less than wholly owned.

A strong Tier-1 capital ratio boosts investor and depositor confidence, indicating the Bank is well-capitalised and financially stable.

Commenting on this achievement, the Group Managing Director/CEO of Zenith Bank Plc, Dame (Dr.) Adaora Umeoji, OON, said, “We are deeply honoured to be recognised as the Number One Bank in Nigeria by Tier-1 Capital for the fifteenth consecutive year. This recognition is a testament to our strategic focus on sustainable growth, innovation, and customer satisfaction. It also emphasises our resilience and strength in navigating the ever-evolving financial landscape. Our dedicated team of professionals has remained steadfast in ensuring that we maintain our position at the forefront of the banking industry.”

She extended her profound and sincere appreciation to the Founder and Chairman, Dr. Jim Ovia, CFR, whose visionary and transformative leadership has played a pivotal role in cultivating a resilient and thriving establishment.

She also expressed her deep appreciation for the board’s insightful governance, the staff’s relentless dedication, and the unwavering loyalty of the bank’s esteemed customers to the Zenith brand.

Zenith Bank’s financial performance for the year was driven by a remarkable triple-digit growth of 125% in gross earnings, from N945.6 billion reported in 2022 to N2.132 trillion in 2023. This growth led to an improved market share in both the retail and corporate segments despite a persistently challenging macroeconomic environment.

The increase in gross earnings was primarily due to growth in interest and non-interest income. Interest income growth was attributed to the increase in the size of risk assets and their effective repricing, while non-interest income was driven by significant trading gains and gains from the revaluation of foreign currencies.

Zenith Bank recently commenced recapitalisation efforts with the conclusion of its Capital Markets Day held on 11th July 2024. It aims to raise the least amount of capital amongst its peers at N230 billion, considering it already maintains a robust capital base of N270.7 billion.

The Bank remains dedicated to supporting the growth of the Nigerian economy and providing its numerous customers with innovative and efficient banking solutions.

Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, with these latest accolades coming on the heels of several recognitions. These include being recognised as the Number One Bank in Nigeria by Tier-1 Capital for the fourteenth consecutive year in the 2023 Top 1000 World Banks Ranking, published by The Banker Magazine.

The Bank was also awarded the Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards for 2020 and 2022; and Most Sustainable Bank, Nigeria in the International Banker 2024 Banking Awards.
Further recognitions include Best Bank in Nigeria for three consecutive years from 2020 to 2022 in the Global Finance World’s Best Banks Awards and Best Commercial Bank, Nigeria for three consecutive years from 2021 to 2023 in the World Finance Banking Awards.

Additionally, Zenith Bank has been acknowledged as the Best Corporate Governance Bank, Nigeria, in the World Finance Corporate Governance Awards for 2022 and 2023, and ‘Best in Corporate Governance’ Financial Services’ Africa for four consecutive years from 2020 to 2023 by the Ethical Boardroom.

The Bank’s commitment to excellence saw it being named the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands for 2020 and 2021, and Retail Bank of the Year for three consecutive years from 2020 to 2022 at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards.

The Bank also received the accolades of Most Sustainable Bank, Nigeria, in the International Banker 2023 Banking Awards, Best Commercial Bank, Nigeria and Best Innovation in Retail Banking, Nigeria, in the International Banker 2022 Banking Awards. Zenith Bank was named Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Bank of the Year 2021 by Champion Newspaper, Bank of the Year 2022 by New Telegraph Newspaper, and Most Responsible Organisation in Africa 2021 by SERAS Awards.

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