- IOCs Reluctant to Sell Flare Gas to Third Parties – FG
International oil companies that are involved in the flaring of gas in Nigeria are often reluctant to sell the commodity to third parties, the Federal Government has said.
It was gathered that the oil producers preferred to pay the tiny cost incurred in gas flaring, rather than to deal with a third-party investor that might be interested in off-taking the commodity.
Flare gas is essentially associated gas that is produced with oil, as they both come out of the ground. But flare gas pollutes the environment, causing sickness and other environmental hazards, particularly in locations where these IOCs operate, like in the Niger Delta.
“Although the Federal Government owns the flare gas and has the power to take it, oil producers have, up till now, treated flare gas as if it is their own, to sell or to flare as they choose,” the Programme Manager, Nigeria Gas Flare Commercialisation Programme, Justice Derefaka, said.
In a copy of the presentation he made at the 3rd Lawyers in Oil and Gas conference in Lagos, Derefaka explained that IOCs were reluctant to sell flare gas because the cost of gas flaring to a producer had been tiny and tax deductible.
The presentation, which was entitled, ‘The Impact of Government Regulatory Policy and the Road to Sustainable Economic Growth Through The Lens of the NGFCP,’ was made available to our correspondent in Abuja on Wednesday.
The programme manager for the NGFCP said, “Typically producers have been reluctant to sell to third parties, preferring to make the miniscule flare payment than have the operational hassles of dealing with third parties, the poor technical gas evacuation system and the poor gas payment record.
“The result is that the low hanging fruit has been fully picked for producers’ own projects, and the higher hanging fruit, i.e. the 178 flare sites left, have been ignored.”
Derefaka, however, noted that “under the new regulations approved in 2018, the Federal Government has asserted its right to take gas free at the flare and will auction it off to third parties. Those third parties will have surety of title from the Federal Government. Under the regulations, flare payments have been increased substantially.”
Historically, associated gas is regarded as a waste product, as the commodity was separated from the oil and flared in situ.
Meanwhile oil was piped to local refineries or for export and progressively associated gas has been captured or harnessed and used for power generation; in industry for fertiliser, methanol and petrochemical plants; and for production of liquefied petroleum gas (and liquefied natural gas.
However, flare capture is expensive, therefore it is often only done at production sites where there are economies of scale
Derefaka noted that there had been no teeth in the flare payment structure that was set in 1998 at N10/million standard cubic feet, which was approximately $0.50 in 1998
He observed that currently, this flare payment sum had been eroded by inflation, as “the value of that flare payment today is approximately $0.028/mscf.”
He added, “This has equated to a total of about $8m in flare payments for 2017. The moral hazard is that these are tax-deductible which, at 85 per cent tax rate, means that the Federal Government received net $1.2m (gross export revenue of crude oil in 2017 was $33bn).
“This net figure expressed as an average cost per barrel of crude oil produced is less than $0.002 (one fifth of a US cent).”
But Derefaka noted that the 2018 regulations required a higher flare payment, expressed in $/mscf, adding that a legislative change was being developed to make the flare payment non-tax-deductible.
“The Flare Gas (Prevention of Waste and Pollution) Regulations 2018 has been approved by Mr. President and gazetted to underpin the implementation of the NGFCP. It was approved on July 5, 2018, and gazetted on 9th July, 2018,” he stated.
Pharmaceutical Industry M&A Activity Grew by 17% in H1 2020 amid 56% Drop in Deal Value
Pharmaceutical Industry M&A Activity Rose by 17% in the First Half of 2020
According to the research data analyzed and published by ComprarAcciones, merger and acquisition (M&A) deal activity in the pharmaceutical sector rose by 17% in H1 2020, disregarding the economic toll of the global pandemic.
It saw a total of 41 deals during the period, but the Q2 2020 deal value total of $3.3 billion was the lowest quarterly total since Q1 2018.
According to PwC, the pharma subsector posted a drop of 56% in deal value from H2 2019 to H1 2020. For the PLS sector as a whole (pharma, biotech and medical devices), the decline in deal value was a massive 87.2% during the same period.
Pharma and Life Sciences (PLS) M&A Total Deal Value Sank from $272.9B to $35B YoY
The total deal value for the pharmaceutical subsector in H1 2019 was $100.1 billion. In contrast, its total deal value in H1 2020 was valued at $7.7 billion.
The PLS sector had a total of 99 deals valued at $35 billion in H1 2020. In H2 2019, the figures were higher, with 129 deals valued at $86.5 billion. H1 2019 was even bigger, with 119 deals valued at a remarkable $272.9 billion.
Meanwhile, for the healthcare industry as a whole, H2 2020 started off with 13 deals valued at $1 billion+ according to S&P Global.
On the other hand, based on a report from Global Data, the global M&A deal value started on a downtrend in Q1 2020. It went from $151.2 billion to $129.9 billion from February to March. Another study from S&P Global shows that the decline carried into Q2 2020, with a 35% drop in deal volume. Similarly, total transaction value dropped by 40%, the highest drop since 2015.
Comparing H1 2020 to H2 2019, the total deal volume sank by 32% year-over-year (YoY) from 10,155 deals to 6,938 according to Merger Market. Deal values sank by 53%, from $1.9 trillion to $901.6 billion during the same period.
Lagos State to Support Businesses Looted by Hoodlums
Lagos State to Support Businesses Vandalised and Looted by Hoodlums
Lagos State has announced plans to support businesses looted and vandalised by hoodlums last week.
The Deputy Governor of the stated, Obafemi Hamzat, made this known in a series of tweets put out on Friday.
He directed businesses vandalised in the state to fill a form attached through the link below.
“If you are a Lagos based business and your store got looted/vandalized this week, please fill this form by @LSETF https://t.co/lwPiXvFzTp. Let’s do what we can to support you,” he tweeted.
This was after Governor Babajide Sanwo-Olu said the state had activated the process of healing the destruction and massacre that happened earlier in the week when security operatives in army uniforms opened fire on armless #EndSARS protesters.
Sanwo-Olu said, “My heart bled after I went out today for a first-hand assessment of the destruction of assets of the Government and private properties. The level of destruction observed indicated that the violence was more than just a peaceful protest and agitations for police reforms. The proportion of devastation is a lot. This is not the Lagos that was handed over to me on May 29, 2019.
“Moving forward from the destruction, we have to continue the process of healing ourselves. We need to stop some of our citizens still using social media to instigate or incite the people. It will not be under my watch that we will lose the city that has the largest economy in the entire black nation. Enough is enough. I have moved around and I saw that our people want peace. On this, we are committed to bringing lasting peace back to the State.”
TVC Resumes Operations in Lagos Office Following Hoodlums Attack
TVC Commences Operations Less Than 72 Hours After Hoodlums Attacked and Destroyed the Company’s Lagos Office
Television Continental (TVC) station has resumed operations less than 72 hours after its Lagos office was attacked by hoodlums that hijacked the #EndSARS protest.
The television station was attacked on Wednesday by criminals would believe that the media platform was owned by one of the top Buhari supporters, Mr. Bola Ahmed Tinubu.
The attack followed the shooting of unarmed #EndSARS protesters, who had gathered to protest against the activities of the Special Anti-Robbery Squad (SARS) unit of the Nigerian Police Force (NPF) at the Lekki Toll Gate on Tuesday.
The peaceful protesters were shot by security operatives in Nigerian Army uniform before the commencement of curfew imposed by Governor Babajide Sanwo-Olu of Lagos State.
The killings now tagged Lekki Massacre attracted global attention as global leaders condemned the Federal Government or whoever ordered the shooting and called for an immediate investigation into the matter.
On Wednesday, criminals allegedly sponsored by interested parties to dislodge peaceful protesters took advantage of the situation to wreak havoc across Nigeria’s commercial hub, Lagos State, as several private establishments businesses were attacked and looted by these unscrupulous characters.
One of the establishments attacked was the National Newspaper also linked to Mr. Tinubu.
The hoodlums stormed TVC on Wednesday morning during a popular morning show, Your View, anchored by Mrs Morayo Afolabi-Brown, the programme did not end before the television station went off air as it was immediately set on fire.
However, Investors King gathered that TVC resumed operations on Saturday morning, although regular programs were yet to resume fully.
As at the time of writing, the station was airing promos of various programmes and from what we gathered, regular programming will return very soon especially from its Abuja office.
Forex3 weeks ago
Naira Improves Against Global Counterparts on Black Market
Business2 weeks ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Government3 weeks ago
#Endsars: Naira Marley Calls Off Protest following Police Invitation
News4 weeks ago
Npower News: Beware of Fake Npower Employment, Ministry Warns Exited Beneficiaries
News4 weeks ago
Laycon Bbnaija Biography, Career and Health Issue
Business4 weeks ago
Npower News Today 2020, Over 5m Applies for Npower Batch C, Selection to be Transparent -Farouq
Cryptocurrency3 weeks ago
Interview with Paul Mak, CEO of Bonded.Finance
Business4 weeks ago
Job Opportunities for Npower Exited Beneficiaries