- Failed Gas Deal: British Firm Seeks Seizure of $9bn Nigerian Assets
A firm incorporated in the British Virgin Islands, Process and Industrial Developments Limited, will ask a British court on Friday (today) for the right to seize up to $9bn of Nigerian government assets over an aborted gas project.
The request is part of a long-running saga over a 2010 deal in which the Nigerian government agreed to supply gas to a processing plant in Calabar that P&ID – a little-known firm founded by two Irish businessmen specifically for the project – would build and run, Reuters reported on Thursday.
When the deal failed, P&ID won a $6.6bn award at arbitration, based on what it could have earned during the 20-year agreement.
The company said the total owed had ballooned to $9bn because of interest accrued since 2013.
Nigeria has tried to nullify the award, saying it was not subject to international arbitration but British courts rejected the argument.
P&ID is now asking the Commercial Court in London to convert the arbitration into a judgement, which would allow them to try to seize international assets, according to Reuters.
A source close to President Muhammadu Buhari was quoted by Reuters as saying that the government was fully aware of the matter and the government “is not sleeping”, adding they were optimistic the matter could be resolved in the courts.
There are also proceedings pending at a US District Court in Washington, D.C.
“This is a problem that the Nigerians are not facing up to in any serious way,” said Andrew Stafford, Q.C. of Kobre & Kim LLP, which is representing P&ID.
Experts said it would be difficult for Nigeria to fully extricate itself.
“Under UK legislation, state immunity does not operate to protect a sovereign state where it has entered into an arbitration agreement,” said Simon Sloane, a partner with UK law firm Fieldfisher.
He added that going after state assets following arbitration had become a well-trodden path over the past 15 years and it would be difficult for Nigeria to avoid paying compensation.
While assets that are used for diplomatic purposes – such as the Nigerian High Commission building in central London – were off the table, commercial assets were up for grabs.
In 2008, a UK court ruled that proceeds of oil sales from Chad held in an international account intended to repay World Bank loans were fair game for seizure.
Experts also said that the involvement of a hedge fund, VR Group, which has a stake in P&ID, signalled that it was unlikely to let the issue drop.
Nigeria’s Main Refineries Record N406.62bn Loss in Two Years
Port Harcourt, Kaduna, Warri Refinery posts N406.62bn Deficit in Two Years
Nigeria’s three main refineries recorded N406.62 billion loss in two years, according to the audited financial statements from the Nigerian National Petroleum Corporation (NNPC).
The three refineries located in Port Harcourt, Kaduna and Warri have a combined installed capacity of 445,000 barrels per day, however, the refineries have continued to function below the installed capacity.
The audited report showed the Kaduna refinery posted N64.34 billion loss in 2018, better than the N111.89 billion loss reported in 2017.
While Warri refinery filed N44.44 billion loss for 2018, also better than the N81.60 billion loss posted in 2017.
Port Harcourt refinery reported N45.59 billion loss in 2018, down from N55.76 billion loss posted in 2017.
The Nigerian government has spent billions of US dollars in maintaining and trying to improve the dilapidated refineries over the years. However, because of the inability of the three refineries to meet daily petrol demands of the Nigerian people, the Federal Government resulted to importation that has eroded the nation’s foreign reserves.
A recent report from the NNPC showed that Nigeria spent N2.37 trillion on petrol importation between May 2019 and May 2020 despite the nation struggling with falling foreign reserves due to low oil prices.
The weak foreign reserves has disrupted the nation’s economic outlook and weighed on the Nigerian Naira. The Naira has been devalued by 15 percent this year and was recently adjusted from N360 per US dollar exchange rate to N380/US$ for importers and investors to ease pressure on the nation’s foreign reserves.
Last week, at a summit organised by Seplat, Mallam Mele Kyari, the Group Managing Director, NNPC, said the three refineries were all idle despite the money being spent on them.
“In Nigeria today, we are importing practically every petroleum product that we consume in this country.
“We are working to make sure that we are able to fix our refineries,” Kyari stated.
All hopes are now on Dangote’s refinery.
Aliko Dangote, Africa’s richest man and the world’s richest black man, is presently constructing a 650,000 barrels per day refinery.
Osinbajo Says FG Plans to Create 5 Million Jobs
FG to Create 5m Jobs from Strategic Investments in Manufacturing, Agriculture
Vice President, Prof. Yemi Osinbajo, has said the Federal Government plans to create at least 5 million jobs in the next few years.
Osinbajo, who spoke at the Virtual Presidential Policy Dialogue Session organised by the Lagos Chamber of Commerce and Industry (LCCI), said the Buhari-led administration is focused on job creation.
He, therefore, stated that this would be achieved with strategic investments in key sectors like the manufacturing and agriculture sectors.
The Vice President said, “We are to create jobs and boost our national housing programme. We would be intentional in the support of manufacturers in using our local raw materials. We are seriously engaging the use of cement in building our roads, as it will be cheaper for us and more durable.
“We are targeting electrification of five million households with solar power, and we are supporting SMEs, especially in the pharmaceuticals to enhance the production of personal protective equipment.”
Mrs. Toki Mabogunje, the President of LCCI, who also spoke at the event, expressed concerns over the failure of the Nigerian Customs Service to adhere to the Executive Order which forbids Customs checkpoints around the ports and within given geographical delimitations in the country.
She also noted the slow pace of reforms in the oil and gas sector, one of the nation’s main sectors. According to her, the oil and gas sector was another cause for worry, saying up till now the PIB passed has not been signed by President Muhammadu Buhari.
According to her, “Closure of the land borders has enormous implications for cross border economic activities around the country. The indications are now that the closure is indefinite. While we share the concern of government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem.
“We are excited about the signing of the AFCTA. But we need to get ourselves ready for the pressure of competition inherent in the continental economic integration agenda. A number of commitments were made about the creation of an environment that would enable the private sector to be competition ready. But not much has happened in this regard so far.
“We are aware of the efforts of government to fix our infrastructure, including roads and railways, but funding has remained a major challenge. We would like to see a new funding model with much bigger focus on private sector capital within a Public Private Partnership [PPP] framework for infrastructure development in the country.”
Fuel Scarcity: NUPENG to Commence Strike on Monday
Lagosians Should Brace for Fuel Scarcity as NUPENG Embarks on Strike
Nigerians should brace for fuel scarcity as the national leadership of the Nigeria Union of Petroleum and Natural Gas (NUPENG) directed all petroleum tanker drivers to withdraw their services from Lagos State starting from Monday, 10 August 2020.
In a statement released by NUPENG on Friday, the union said the directive followed the failure of various authorities in Lagos State to address three major issues that had impacted the operations of petroleum tanker drivers in the state for several months.
The statement signed by the National President, Williams Akporeha and the General Secretary, Olawale Afolabi, NUPENG and titled title ‘NUPENG leadership directs withdrawal of services by petroleum tanker drivers in Lagos State with effect from Monday, August 10, 2020,’ noted that members of the union are frustrated and pained by the barrage of challenges faced while carrying out their activities in Lagos State.
NUPENG said, “The entire rank and file members of the union are deeply pained, frustrated and agonised by the barrage of these challenges being consistently faced by petroleum tanker drivers in Lagos State and are left with no other option but to direct the withdrawal of their services in Lagos State until the Lagos State Government and other relevant stakeholders address these critical challenges.
“It is sad and disheartening to note here that we had made several appeals and reports to the Lagos State Government and the Presidential Task Force for the decongestion of Apapa on these challenges but all to no avail.”
NUPENG listed the major challenges faced by petroleum tanker drivers in Lagos State as extortion and harassment by various security agents and, area boys’ (miscreants).
“This menace must stop and the leadership of these security operatives in Lagos State must go all out to call their men to order with immediate effect.”
The Union added that it is sad that the security agents who were expected to ensure the free flow of traffic and protection of road users were the same people using their uniforms and arms to intimidate, harass and extort money from petroleum drivers in Lagos State.
Therefore, it said it had embarked on an indefinite strike to force the Lagos State Government to address the situation.
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