Author: The Nation

By Uchenna Amadi

What may have caused a huge international embarrassment and litigation was averted last Friday, as President Muhammadu Buhari ordered the restoration of Oil Mining Leases (OMLs) 123, 124, 126 And 137 to the Nigerian National Petroleum Corporation (the concessionaire), which is in a Production Sharing Contract (PSC) with its contractor, Addax Petroleum Exploration Nigeria Limited (a Chinese company), on the blocks.

Trouble started on March 30, 2021, when the Director/Chief Executive Officer, Department of Petroleum Resources (DPR),  Mr. Sarki Auwalu announced the revocation of the four OMLs belonging to Addax Petroleum due to the poor development of the assets by the petroleum company for many years.

He specifically noted that over 50 per cent of the assets had remained underdeveloped, a development he said robbed the Nigerian government the needed revenue to run a country in dire straits.

He said: “Addax refused to develop the assets and Addax were therefore not operating the assets.”

Auwalu, however, explained that the revocation was not an arbitrary action but drew its strength from Nigeria’s Petroleum Act.

“The first reason for a revocation is when you discover that the asset is not being developed according to the business guidelines, because it is economic sabotage.”

While that simmered, the DPR boss announced the inauguration of a team of experts (a committee) to evaluate the four oil mining licenses revoked and recovered from Addax Petroleum Exploration Nigeria Limited. He awarded them to a new operator– Kaztech/Slavic Consortium.

The oil sector regulator noted that the move was in fulfilment of the Federal Government’s commitment to reviving all moribund oil and gas support assets across the country.

Auwalu stated that the prevailing development was meant to stimulate the economy and create job opportunities for Nigerians, especially as the oil and gas industry remains the major economic pillar of the country.

He thus charged the committee to evaluate the current status (As-is) of the revoked assets, including liabilities post revocation, in order to facilitate takeover of the assets by the newly appointed operators of the assets.

He further urged that committee to discharge the responsibility entrusted on them by the nation with all sense of patriotism and dedication to national interest.

According to him, the committee has one week to conclude the assignment.

However, while the committee got down to business, President Muhammadu Buhari, who doubles as the Minister of Petroleum Resources nullified DPR’s actions, which automatically sacked the new operator anointed by the regulator–Kaztech/Slavic Consortium.

Nonetheless, experts who weighed in on the matter described Buhari’s actions as victory against Prebendalism, though they wondered whose script DPR played by announcing an unripe revocation in the first instance.

Going by the dictates of the Petroleum Act, the revocation of an oil mining lease is the exclusive preserve of the Minister of Petroleum Resources as enshrined  in Paragraph 25 (1) of the First schedule of the Act.

Based on the Act’s provisions,  the Minister of Petroleum Resources through the regulator (DPR)  is to inform the Licensee of the infractions and give the Licensee time to respond or rectify the situation prior to such revocation.

Industry watchers note that with respect of the revocation, these  stipulated provisions were not  adhered as NNPC (the licensee) only got to know about the revocation from a rumour that started in social media then subsequently confirmed by a letter from the DPR addressed to Addax.

The above provisions state that revocation of a lease is against the Lessee and not on the Contractor. Clearly, DPR clearly by processing the revocation against Addax (PSC Contractor).

Furthermore, experts insist that DPR ought to inform NNPC of any infractions in relation to the operation of lease and afforded adequate time to provide appropriate explanations on the said infractions as well as reasonable time to remedy the alleged infractions.

It means that the proper procedure for revocation would have been to direct the revocation to NNPC.  NNPC will then be obligated to properly communicate the situation to the PSC Contractor and terminate the PSC on the basis that the underlying leases have been revoked.

Analysts note that if the procedural error was allowed to stand, it could have led to a serious legal dispute if Addax had  commenced legal action against NNPC and the Federal Government.

They added that President Buhari’s intervention saved the nation from another embarrassment after the 2017 KNOCs case where the Supreme Court ruled that the decision of the Federal Government under President Yar’adua to void the allocation of Oil Prospecting Licenses (OPLs) 321 and 323 to the Korea National Oil Corporation (KNOC) and re-award the oil blocks to ONGC/Owel Petroleum Consortium as illegal, procedurally unfair, unreasonable, and against the legitimate expectation of KNOC.

Commenting on the development, an oil and gas industry consultant and immediate past Chairman, Society of Petroleum Engineers, Nigeria Council, Joseph Nwakwue said President Buhari’s intervention was laudable, though he picked holes in the action of DPR to have revoked the OMLs ab initio.

“Did DPR seek clearance from the Minister of Petroleum Resources (President Muhammadu Buhari) before the contract was revoked? If yes, what then changed? Who pressured Nigeria to backtrack? Was it the NNPC or Chinese Government? If the DPR man didn’t secure the President’s nod before the revocation? Why does he still have his job? This is an international embarrassment and we should not be behaving this way?

“These are issues we should interrogate. Those responsible should be held accountable. For me, I’m of the opinion that the contract should have been allowed to expire, especially when we’re already close to the expiry date being 2023.

“There are several reasons a contract is revoked. Non-performance is just one of them. There could be other infractions.

But in this case, I am against the revocation because the expiration is near”, he said.

However, a statement from the Presidency said Buhari’s intervention was an affirmation of his administration’s commitment to the rule of law, fairness and enabling a stable business climate for investment and investors.

The Presidency statement read: “It is clear that the procedures governing the revocation of lease(s) in the Petroleum Act were not duly followed in this case and Mr. President had to step in to ensure justice and fairplay is done, which are  cardinal principles of this administration.

“This development will indeed go a long way to reaffirm the confidence of foreign investors in the polity and also re-affirm the position of Nigeria as a desirable investment destination in the continent where sanctity of contract is respected.”

President Buhari directed the Department of Petroleum Resources ( DPR) to retract the letter of revocation of leases.

He also directed the NNPC to utilise contractual provisions to resolve issues relating to the NNPC/Addax PSC in line with the extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.

The final inking of the deal fast tracking the repairs of the Port Harcourt Refinery by the federal government and its foreign partners despite public outcry over what was  considered a white elephant project,  analysts have argued, may not bode well for the economy in the short, medium to long term, reports Ibrahim Apekhade Yusuf

When the federal government announced the approval of $1.5billion for the rehabilitation of the Port Harcourt Refining Company (PHRC) recently, the least they expected was an imprimatur of support from Nigerians, considering in the opinion of the Minister of State for Petroleum Resources, Timipre Sylva that the whole idea was well-thought out.

But the welter of criticisms that greeted the announcement is not something the federal government bargained for.

Speaking with a cross-section of Nigerians, including stakeholders within the nation’s oil and gas ecosystem who should know better, the common thing that resonated with them is outright condemnation of the planned rehabilitation of the refinery.

Welter of criticisms against repairs of PHRC

In the view of Dr. Kolawole Adewoyin, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), it is scandalous that the federal government decided to commit such a humongous sum of money on the repairs of a moribund refinery like the PHRC.

According to him, the rehabilitation of the PHRC is not in order.

The IPMAN boss who practically lampooned the idea said the position of the independent oil marketers is that the only way out for the government can go ahead is to create an enabling environment for investors to build modular refineries in different parts of the country for ease of logistics in production cost as well as transportation of refined products.

“Unless the government makes the bold efforts to get modular refineries working, we will continue to suffer the bitter pills of this faulty attempt at deregulation of the sector,” he said.

Stanbic IBTC founder, Atedo Peterside is also on the same page with Adewoyin.  However, unlike Adewoyin, he would rather the $1.5 billion earmarked for the repairs of the Port Harcourt refinery is disbursed into nation’s troubling health sector.

Peterside said the amount is enough to build 12 world class hospitals within the country, adding, that two of the hospitals would be located in each of the geopolitical zones.

The investment banker and economist said the twelve hospitals are estimated to cost $125 million each. He reiterated that the federal government should allow private investors take possession of the refinery.

Peterside said core investors should be sold the Port Harcourt refinery at its faulty state, with rehabilitation cost placed on the buyer, not the government.

“The $1.5bn earmarked for PH Refinery Rehabilitation by the Mele Kyari-led NNPC could build 12 world class hospitals costing $125m each – 2 in each geopolitical zones.

Echoing similar sentiments, Dr. Austin Nweze, a political economist of the Lagos Business School, said the repairs of the PHRC was bad economical management and planning given the long history of disrepair the refinery has suffered, adding that the cost is huge and is counterproductive.

In defense of refineries’ rehabilitation

However, some schools of thoughts hold the view and very strongly too that building a new refinery may be costlier than anticipated.

While making a case for the rehabilitation of the PHRC, in his informed commentary under the title, ‘In Defence of Refineries’ Rehabilitation,’ Alexander Adejoh noted that the last time a TAM was conducted on the refinery was 21 years ago, precisely in 2000.

According to him, “On the contrary, a cursory look at brand new refineries built across the world reveals that building a refinery of similar capacity as the PHRC is estimated at over $6 billion, depending on a number of technical and non-technical factors. For example, $10 billion was spent on building the Aramco Oil Refinery (250,000-300,000 bpd capacity) in Pakistan, $12 billion was spent on building Abrue Lima Project (230,000 bpd) in Brazil; while $27 billion was spent on building Pengerang Refinery and Petrochemical Integrated Development, RAPID (300,000 bpd + 3 mtpa naptha steam cracker) in Indonesia. In Nigeria, $19 billion has been spent so far on the Dangote Refinery (650,000 bpd), prior to commissioning and start-up of the plant.”

It is worthy to note that for African Export-Import Bank (Afreximbank), which is the reliable lender for the project to have raised $1billion towards the initiative, it goes to show that the multilateral institution while the federal government will raise the sum of $550million.

“A credible and capable lender like Afreximbank would never agree to put such huge amount of money where there will be no value. Also, the right governance structures have been instituted around the project implementation to ensure success. Similarly, Tecnimont SpA, the Original Refinery Builder (ORB) which is also the Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) Contractor, is globally reputable and capable, with requisite experience of similar jobs across the globe,” Adejoh stressed.

In the view ofAdejoh, that TAM is different because it will enable the replacement of aging/obsolete equipment as well as ensure that refinery operates at a minimum of 90% capacity utilisation.

According to Omoefe, a cursory look at brand new refineries built across the world reveals that building a refinery of similar capacity like PHRC is estimated at over $6billion depending on a number of technical and non-technical factors.

Specifically, he said over $10 billion was spent on building Aramco Oil Refinery (250,000-300,000 bpd) in Pakistan, $12billion was spent on building Abrue Lima Project (230,000) in Brazil while $27billion was spent on building Pengerang Refinery and Petrochemical Integrated Development, RAPID (300,000 b/d + 3mtpa) naptha steam cracker) in Indonesia.

He further noted that in Nigeria, $19billion has been spent so far on Dangote Refinery (650,000bpd) prior to commissioning and start-up of the plant.

Groundswell of support for TAM at PHRC

Adejoh’s position is not any different from the view of Frederick Omoefe a petroleum economist.

He said the TAM would save the country enormous cost.

Meanwhile, the Minister of State for Petroleum Resources, Timipre Sylva who had stirred the controversy around rehabilitation of the PHRC said things are not as bad as they’re being painted.

While drumming up support for the repairs of the PHRC, Sylva urged Nigerians who are opposed to the project to hold him accountable for every dollar that will be spent on rehabilitating the refinery.

“They (Nigerians) can hold me accountable and hold this government accountable for every dollar, every cent on this refinery and ensure that we deliver a refinery that works,” he said.

Sylva has also explained that the rehabilitation will take 18 months and the first phase will get the refinery to 90 percent operational capacity, stressing that President Muhammadu Buhari was bent on leaving a legacy including making sure that the refineries are working.

“It is not going to be all debts, we are not going to borrow all the monies that are going into the rehabilitation.”

While defending the project, the former governor of Bayelsa state noted that the federal government also plans to rehabilitate other refineries in the country, explaining that the move is not a waste of funds as believed by many Nigerians.

According to him, the refinery will benefit Nigerians and be commercially-viable to return profits for the government and satisfy the domestic needs of the country, especially in addition to the Dangote refinery.

“This rehabilitation will bring a lot of gains for Nigerians. First, we are gaining from savings in the foreign exchange end, savings from importation of premium motor spirit (PMS); and we will gain from the operations of the refineries itself,” he noted. The minister also debunked insinuations that the rehabilitation could have taken less than N500 million, saying that the rehabilitation of the refinery was being handled by professionals.

Echoing similar sentiments, the Ijaw Youths Council (IYC) Worldwide believes the idea of carrying out a TAM at PHRC is a signal that the federal government has woken up from its slumber.

The IYC President, Peter Igbifa, said though reviving and optimising the refinery was long overdue, it was better late than never.

Igbifa, who described the move as a welcome development said it would create employment for the teeming jobless youths in the Niger Delta region and increase the country’s refining capacity.

The IYC boss also expressed optimism that the project when completed would reduce youth restiveness and criminality in the region.

He advised the federal government not to play politics with the project.

Igbifa called on the government to swing into action immediately by releasing money immediately to back up its approval.

“As a council, which fights for the interest of Ijaw youths and other youths in the Niger Delta, we will be constituting an action committee to work closely with the ministry of petroleum and the contractors that will be in charge of the rehabilitation project. We will monitor the execution of this project from the beginning to the end and if we notice any foul play, we will surely raise the alarm.”

George Residence, a leading pioneer in the shortlet market, at the weekend announced its decision to adopt Bitcoin as its primary reserve as well as a form of payment.

The luxury shortlet which came to the forefront of the Nigerian hospitality industry in 2020, has now become the first apartment-hotel and one of a select few companies in the country to accept digital currencies as payment.

The CEO, ‘Yanju George announced in an official statement, that the decision to make Bitcoin their primary reserve asset is to hedge against fiat inflation. He said “we have allocated around 50% of our cash reserves to Bitcoin and we hope to increase that as time goes on.”

He also added that they have listed Bitcoin as a means of payment for their apartments, partnering with Coinnest Africa, a leading cryptocurrency brokerage firm, to process their cryptocurrency payments.

“Bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind,” Yanju was quoted as saying in an interview, hours after announcing their capability to accept Bitcoin.

The shortlet, located in the heart of Lekki, Lagos, has in the last year become the preferred destination for top Nigerians, celebrities and business travelers seeking a premium and fully-serviced experience.

Starting this week, guests at the luxury shortlet apartment will be able to make reservations and bookings using the world’s fastest growing currency.

Accepting crypto is certainly attractive to its guests as George Residence continuously sees its VIP guests get involved in the Bitcoin industry.

“Bitcoin permits our guests a faster and more secure way to enjoy the comfort we offer,” said the CEO, ‘Yanju George. “Our residents desire simplicity, and we are excited to be able to offer that to them.”

By Afolabi Idowu

The CEO of Fruitful Juice and Services, Dr. Onyekachi Onubogu has tasked marketing leaders on the need to give priority to corporate social investment.

Onubogu who made this known while presenting a paper entitled: ‘Addressing the Balance Question in the Management of Corporate Social Investment Portfolio during crisis,” argued that, nearly every CEO or marketing leader is being forced to consider three key questions in the last 12 months.

According to him, “the first is what do I cut in this lockdown period and often the answer the CEO will get will be ‘cut the marketing spend and any non-essential spend’. The non-essential spend often includes Corporate Social Investments.”

Raising some posers, he said, “The second question is how will I remain relevant to my customers and ensure they believe we are giving them great value during this crisis, while the third is how do I even know what portion of my marketing investment we get returns from?”

While arguing that those questions typify the challenges marketing and business leaders face during crisis, Onubogu however stressed the importance of CSR/Marketing investments and the delicate balancing act that must be made to ensure organisations and people remain true to who they are and showcase what they stand for in good or tough times.

“The real question should not be around balancing CS investment in a crisis, but on how to increase CS investment. “The challenge isn’t that we should cut CSI or marketing costs to improve profitability in times of crisis but for organisations and business leaders to ensure that the Corporate Social Investment becomes a part of their business continuity and sustainability plans especially during a crisis,” he noted.

He noted that customers and stakeholders would always remember brands that stood by them at tough times. “A man with a vehicle that runs out of fuel in the middle of the night will remember you for stopping to give him 2 liters of fuel at night than giving him the same two liters of fuel the next day at the petrol station,” he added.

Against the backdrop of rising wave of insecurity across the country fueled by banditry, kidnapping and killings, farmers’ groups have impressed on all tiers of government the need to ensure the security of lives and property, particularly of the farming communities in order to guarantee food security.

Making this appeal recently was the National President of the Association of Nigerian (AFAN), Alhaji (Engr.) Farouk Rabiu Mudi.

According to Mudi, who spoke at the three days General Assembly of Farmers (GAF 2021), in Kano, said, going by its mandate, AFAN is instrumental to effective delivery of farmer support by government over the years, whereby its policy advocacy and influencing roles are germane to greater availability, accessibility and affordability of farm inputs to its members.

There is therefore the need for governments at all levels to partner with AFAN more closely for effective delivery of farmer support services in Nigeria, he stressed.

The AFAN boss further noted that “For food security to be achieved in Nigeria is a policy imperative to ensure peace and security in the country. Thus, federal and state governments, in collaboration with various security agencies, should develop various mechanisms and organise dialogues, in order to identify those sponsoring insurgency and banditry for prosecution and appropriate punishments.

“Other policy imperatives emerged specifically for facilitating the delivery of farmer support services in the country. In policymaking for agricultural development by both federal and state governments, whereby the state.”

Speaking earlier, the Minister of Agriculture and Rural Development, Alhaji Muhammad Sabo Nanono, who congratulated the elected National President Mudi, assured him of the support of his ministry.

The minister said that government have a good plans for Nigeria farmers, because of the important role they play in the country and appealed to Mudi to be focus as the farmers national leader.

National President, AFAN, Mudi, commended the minister for his tremendous achievements and his supports to the farmers.

Chairman of Board of Trustees (BOT), AFAN, Admiral Murtala Nyako (Rtd), represented by Senator Bello Jubril Gada, and commended Mudi as an achiever and a hardworking man who will revive the group from redundancy to activeness.

The newly elected AFAN executive members are, Deputy National President I, Prince Olisegun Dasolu (Ogun), Deputy National President II,  Com. Confidence  Mac-Eteli (Bayelsa), National General Secretary , Mr. Yunusa Halidu (FCT), Assistant National Secretary,  John Oluwoye Olatero (Oyo) and National Treasurer, Alhaji Adebayo Hammed Ayodele (Kwara), as well as others.

 

Local fashion designers with an eye on the international market can now heave a sigh of relief thanks to a new tech application, Oyoyo app.

The recently launched game changing app set to revolutionise the Nigerian fashion industry, is the brainchild of Catwalk Creatives Limited, sister company of Lassod Consulting.

Oyoyo designed and built by Nigerian tech engineers, will connect designers, tailors and (Aso Ofi) weavers in Nigeria with a nationwide customer base.

Building on the heritage of the Nigerian fashion and traditional textile industry the app uses technology to harness the history of garments designed and manufactured by individual fashion designers and weavers and cataloguing them in an accessible format. Creating this resource enables simple re-ordering and a point of reference for customers.

One unique benefit of Oyoyo is the intuitive “measurement management” feature which allows fashion designers to take, store and convert measurements of the individual into the desired format. By creating this order history it provides transparency between tailor and client and overall improves productivity and levels of quality.

Clients or the “Oyoyo fashionistas” as the app terms them, can search, like, comment and follow individual artisans and designers as well as connect with them and access their services.

On the launch, Executive Chair, Lanre Sanni said, “This is an exciting time for Catwalk Creatives and Lassod as Oyoyo is the first of our products to launch in Nigeria. I feel very proud that an idea I had a couple of years ago is now coming to fruition. Using visual technology in a very accessible way as a digital marketplace, Oyoyo will showcase local talent on both the national and international stage.”

Oyoyo is supported by a leadership team who are based in Nigeria and the UK, Lindsay Burham-Lowes, Chief Executive Officer and Faith Olaniran, Intern.

Mr Sanni also disclosed, “As most of the development has taken place over the past 12 months, the pandemic has proved that despite the distance of the teams, we all have a common goal to succeed. The impact Oyoyo will have on the fashion industry in Nigeria is substantial and opens up new opportunities which previously were impossible.”

“It is our mission to create sustainable commercial opportunities through recruitment and technical innovation in Nigeria and the wider African continent. I know there is a wealth of talent and we have ambitious plans to utilise those skills,” he further explained.

The Oyoyo app is available on Android and is currently offering a free subscription for designers, tailors and weavers as well as other professionals operating in the fashion industry. It will be free to access for customers.

 

By Evelyn Osagie

Experts have expressed anguish over Nigeria’s rising indebtedness to the People’s Republic of China, saying that it is a recipe for economic slavery.

This cross-section of experts, all members of Transforming Uplifting and Reforming Nigeria (TURN), a non-governmental organisation, hold the view and very strongly too that the loans from China come with a lot of baggage and as such demand that the nation’s economic managers should exercise caution.

Firing the first salvo, TURN President, Dr. AG Ahmed warned that loans taken by the government should not mortgage the future of the citizens or that of the unborn generation, while urging that government should involve experts from the private sector to evaluate the risks and benefits of a loan and take all necessary steps to ensure that it truly benefits the country.

Specifically, TURN boss said, “Nigeria’s external debt loan stands at $31.98 billion (Debt Management Office, DMO, September 30, 2020), most of which are owed to well-known international creditor agencies with which Nigeria has had a long history of dealing, like many other developing countries. In contrast, the bilateral loans which are owed to individual countries are of concern, and none is as worrisome as the unprecedented yet increasing sum of money owed to China which now stands at $3.3 billion or 80.1% of Nigeria’s bilateral debt load of $4.1 billion.”

While observing that the IMF had equally warned Nigeria of her increasing indebtedness to China, Ahmed said, “TURN’s evaluation of Chinese “investments” in Nigeria represents a sordid and unsustainable state of affairs that can in the end only hurt the Nigerian people. All loans from China are claimed to be on concessional terms according to the DMO. However, details of the loans are shrouded in secrecy and the demands of Nigeria’s Fiscal Responsibility Act, (FRA) for concessional loans have not been transparently met. The risks associated with the Chinese loans constitute clear, present and future danger despite the relatively small proportion of the loans to Nigeria’s overall debt.”

Echoing similar sentiments, the duo of Nelson O. Irobi, and Dr. Olusola Womiloju, both part of TURN, called for a rigorous and transparent evaluation of all current and active loans by the federal government conduct.