The Nation Newspaper

Tag: refinery

  • Refinery owners seek end to fuel imports

    Refinery owners seek end to fuel imports

    Refinery owners in Nigeria have called for the country to stop depending on fuel importers, advocating for a shift towards becoming a fuel-exporting nation.

    Operating under the Crude Oil Refineries Owners Association of Nigeria (CORAN), they argue that Nigeria should prioritize exporting fuel rather than supporting the businesses of fuel importers.

    This appeal comes amid concerns from depot owners who fear that the Dangote Petroleum Refinery may seek to dominate the fuel supply in the country.

    The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, recently disclosed that the Dangote refinery had requested a halt on issuing licenses for diesel importation, potentially compelling all fuel traders to purchase from the refinery instead of importing.

    Appearing before the Senate ad-hoc committee investigating alleged economic sabotage in the Nigerian petroleum industry, Abdulkabir Aliyu, the National Chairman of the Depots and Petroleum Marketers Association of Nigeria, subtly criticised the Dangote Group.

    He highlighted the group’s recent N133 billion profit from sugar sales within six months, attributing this success to their control over the sugar market.

    Aliyu warned against allowing any single entity to dominate the petroleum sector, emphasizing that monopolies are detrimental to business.

    In a recent interview, Eche Idoko, Publicity Secretary of CORAN, argued that Nigeria should stop issuing import licenses for products that the country can produce domestically, such as diesel and petrol.

    While acknowledging that depot owners are investors, Idoko questioned the value they add to the supply chain, pointing out that they contribute to currency pressure and inflate prices by up to N150 per litre due to their operational costs and middleman roles.

    Read Also: Dangote Refinery’s diesel, Jet A1 to disrupt Europe’s market, says OPEC

    Idoko disclosed that independent marketers are currently purchasing petrol from depot owners at nearly N800 per litre, a situation that would likely change if depot owners were removed from the equation.

    He asserted that relying on depots as a long-term strategy is not viable for a country seeking economic stability.

     Instead, he suggested that depot owners could partner with refineries to increase domestic refining capacity.

    Despite the potential for collaboration, Idoko criticized depot owners for refusing to build or partner with refineries.

    He urged them to consider strategic partnerships that would transform their operations from import hubs to export hubs, citing opportunities for throughput agreements with refineries like Dangote’s.

    Idoko also dismissed the argument that fuel importers have been a necessary stopgap in the absence of functional refineries, stating that they are part of the reason for Nigeria’s current challenges.

    He warned that continuing to accommodate depot owners would perpetuate the country’s reliance on imports and further strain the naira.

    He called for a public debate with depot owners to discuss these issues openly, expressing confidence that the economic benefits of supporting refineries would outweigh those of maintaining depot businesses.

     Idoko emphasized that refineries employ significantly more people and contribute more to the economy than depots, suggesting that the focus should be on expanding refinery operations to rescue the country from its current predicament.

    Former President Olusegun Obasanjo recently expressed concerns that those benefiting from the lucrative fuel import business might try to obstruct the success of the Dangote refinery.

    He noted that if Dangote’s refinery succeeds, it could encourage more investment in Nigeria, both from local and foreign investors.

    Meanwhile, President Bola Tinubu has revealed that Nigeria is currently spending N2 trillion monthly on fuel imports.

    However, some experts argue that Nigeria is not yet ready to cease fuel imports until it has at least four fully operational refineries.

  • ‘Abia modular refinery ready next year’

    ‘Abia modular refinery ready next year’

    Abia State Commissioner for Information and Culture, Mr. Okey Kanu, says the modular refinery at the Abia Industrial Innovation Park (AIIP) will come on stream by 2025.

    He made this known during a news conference on the outcome of the State Executive Council at the Government House, Umuahia.

    He said the refinery would be the first major project to be executed at the park and it would begin to operate fully in 2025.

    The commissioner said the refinery would provide 2,000 direct jobs and thousands of indirect jobs for teeming youths of Abia.

    Read Also: FEC expresses concerns over rising cost of goods, services

    He said: “The project will help to provide refined products for the people of Abia as well as increase our revenue base as a state.

    “So, it is a project that is very important to this government and every effort is being put in place to ensure that the date is met.

    “The state government is also ready to reap from the petroleum and mineral endowments in the state.”

    Kanu said a lot of investors had shown serious interest in setting up their investments in Abia, especially in the petroleum sector.

    According to him, it will aid in boosting efforts made to provide job opportunities for the youth.

  • Govt: petrol production begins next week at PH refinery

    Govt: petrol production begins next week at PH refinery

    • NNPCL completes mechanical rehabilitation
    • Dangote gets another 1m barrels of crude

    The Federal Government yesterday reassured Nigerians that the production of petrol and Liquified Natural Gas(LNG) will resume at the Port Harcourt Refinery after Christmas break.

    It said the optimism is based on the ‘mechanical completion and flare start-up’ of Phase one of the 210,000 barrels per day (bpd) refinery by the Nigerian National Petroleum Company Limited(NNPCL).

    The test run of the facility is said to be ongoing.

     Minister of State for  Petroleum Resources(Oil)  Heineken Lokpobiri; Minister of State Petroleum Resources(Gas), Ekperikpe Ekpo; NNPCL Group Chief Executive Officer,  Mele Kyari,  NNPCL Board Chairman   Pius Akinyelure;   and Port Harcourt Refinery  Managing Director Ibrahim Onoja, made this known during a  media tour of the refinery in Eleme, Rivers State.

    The tour coincided with the 15th  Rehabilitation SteerCo meeting. 

    Lokpobiri told reporters that with the  Phase One  now ready, efforts would be geared towards the completion of the  Phase Two of the facility in the last quarter of next year.

    He said: “The mechanical part is completed and this is the beginning of the completion of not just this Port Harcourt Refinery phase one and two, but the one for Warri, and then the one in Kaduna, so that we would be able to benefit from this massive investment that the country has made.”

    Also, Ekpo said with the commencement of petrol production after Christmas, there will be more LPG(cooking gas) supply to the Nigerian market.

    He added: “The good news equally to LPG users that as the refinery commences after Christmas, we will have  sufficient supply of LPG which will reduce the import at that level.”

     NNPCL boss Kyari explained that the refinery pumps had been rehabilitated to allow the circulation of crude within the facility.

    He said: “It is just to thank the team for doing great work and for keeping the promise we made to over 200 million Nigerians, and we know that this is a promise we can keep.

    “We have a competent contractor and subcontractors. Our staff members are extremely determined to deliver on this project, and today, it is a promise fulfilled. Phase Two will be completed in the last quarter of 2024..

    “We know all the scepticism that is in the public space but today has shown that we can fulfill commitments. NNPC is here to deliver value and we will get things done going forward.

     “We have done a great deal of work to get the refinery to work. Our team has been working 24 hours a day and we are happy with the results we have today.”

    NNPCL Board Chairman  Akinyelure, who described the completion of Phase 0ne as “historic,” said he promised President Bola Tinubu that the refinery would be ready by the end of this year

    He said: “I am here this morning to witness this historic ceremony on the mechanical completion of the Port Harcourt Refinery. We are proud of the staff and entire management of the refinery. We will be at the highest level of production, and if possible export part of our production. 

    Read Also: Tinubu expanding horizon of entrepreneurship in Nigeria – Alake

     “Doubts had been expressed by several Nigerians about the ability of NNPCL to make this facility available to support the distribution of fuel in the country. But today, I see them happy.”

    Onoja also said the mechanical completion of the refinery was historic in that it would help buoy the nation’s economy.

    He said:  “Today is a very happy day for me. I was part of the story from the beginning. We had a Presidential directive to get the refinery working. The NNPCL Group CEO asked us to give him an unassailable process that will not fail.

    “We set governance in process and got the best team to do the work. We created a transparent project. We have 118 pumps in this first phase, the columns were filled and it will produce 60,000 barrels per day. It will create jobs and earn forex for the country.” 

    * Tinubu   a promise keeper, says FNM

    The Future Nigeria Movement (FNM) welcomed the completion of the Phase One of the facility. It  described President Tinubu as a promise keeper 

    Its Leader Livingstone Wechie, said the turnaround was hitherto used by some agents of the Federal Government to siphon billions of dollars but that Tinubu ended such practice by ensuring its completion.

     The  Port Harcourt refinery comprises two units, with the old plant having a refining capacity of 60,000  bpd and the new plant 150,000 bpd.

    It was shut down in March 2019 for the first phase of repair works after the government secured the services of Italy’s Maire Tecnimont to handle the scoping of the complex, with oil major Eni appointed technical adviser.

    In 2021, NNPC Ltd. said repairs had started after the Federal Executive Council approved $1.5bn for the project.

    The refinery had over the years performed below optimal levels which resulted in the importation of petroleum products for domestic use for many years to cover for the gap in the refinery’s output. 

    *Dangote refinery receives another  one million barrels of crude

    Dangote Refinery has made a further move towards the commencement of production of refined petroleum products with the receipt of an additional one million barrels of bonny light crude from the NNPCL.

    About a week ago, the refinery received one million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited (STASCO).

    Managing Director of Dangote Ports Operations, Mr Akin Omole told reporters at the Dangote Quay, Ibeju-Lekki, Lagos that the facility was expecting more supplies before the end of this year.

    Designed for 100 percent Nigerian crude, the 650,000 bpd refinery can process most African crude grades as well as Middle Eastern Arab Light and even US Light tight oil. 

  • Port Harcourt refinery ready this month, NNPCL insists

    Port Harcourt refinery ready this month, NNPCL insists

    The end of December timeline for mechanical completion of the Port Harcourt Refinery Company (PHRC) remains sacrosanct,  says the Nigerian National Petroleum Company Limited (NNPCL).

    “We have said from time that by the end of December, the mechanical completion of the refinery will be completed. Yes, we are still maintaining that. Nothing has changed,” NNPC Chief Communications Officer  Olufemi Soneye told The Nation yesterday.

    Soneye had on November 6, 2023, assured that the NNPCL was optimistic about the completion of the rehabilitation this month.

    He said that  owing to the assurance the contractors gave the oil giant, nothing had so far altered the completion date.

    He added:   “What they (contractors) said is that all things working well, the refineries will be working in December and January.

    Read Also: Clark to CJN: correct grave anomalies in judiciary 

    “That is what has been there and that is what the contractors have said. And we are working on that timeline.

    “And as NNPC, we are going around on every milestone we are pushing out information. So, we are working on that December/January.

    You know I am not the contractor, my own is to report.

    “The assurance we have is that December/January, the refineries will be working.

    “And nothing has happened as of now to change that or to move it forward so we are on course.

    “If anything changes, I will defer to you that this is going to happen. But in terms of the timeline, the timeline is still on course.”

    Minister of State for Petroleum (Oil)  Heineken Lokpobiri while inspecting the rehabilitation, said that the NNPCL should be accountable if the December end timeline was not met.

    The rehabilitation of the 110,000 barrels per day Kaduna Refinery and Petrochemicals Company Limited (KRPC) is expected to be completed between October and December 2024. The work was awarded last February to a  South Korean firm, Daewoo E&C at $740.6 million.

  • Refinery signs $259m project deal

    Refinery signs $259m project deal

    • Egypt, Zimbabwe, Malawi presidents, Obasanjo witness agreement signing

    Azikel Petroleum Refinery, a subsidiary of Azikel Group, has signed a debt funding with African Export-Import Bank (Afreximbank), for Azikel refinery project. 

    The debt financing deal reached between Afreximbank and Azikel Petroleum Refinery was made at the Intra-African Trade Fair 2023 held between November 9 and 15 in Cairo, Egypt. 

    The agreement was signed by the President of Azikel Group, who is also the Chairman of Azikel Petroleum Refinery, Dr. Azibapu Eruani (CFR) and the Director, Project and Asset Based Finance of Afreximbank, Helen Brume, on behalf of the bank. 

    A statement yesterday by Mr. Austin Ebipade, the media assistant to the president of Azikel Group, said personalities present to witness the agreement signing were the presidents of Egypt, Abdel Fattah El-Sisi, Zimbabwe, Emmerson Mnangagwa, Malawi, Lazarus Chakwera, former president of Nigeria, Chief Olusegun Obasanjo, ex-vice-president Namadi Sambo and President of Afreximbank, Prof. Benedict Oramah.

    Read Also: I’ve never taken alcohol, smoke cigarettes- Akpabio

    The statement quoted Afreximbank as saying that Azikel Refinery project was catalysing the new industrialisation in Nigeria. 

    Debt funding is the participation of Afreximbank in the construction, development and operation of the 12,000 bpd Azikel Hydro-skimming Refinery in Bayelsa State. 

    Azikel Refinery Project aims to bring reliefs to the challenges of insufficient refined petroleum products in Nigeria.

    Speaking after the signing ceremony, Eruani reiterated his commitment to the development of Nigeria and Africa by his unquenchable passion in guaranteeing the new industrialisation of Nigeria, creating energy sufficiency and sustainable development.

  • PTI seeks partners to upscale 200litres refinery to commercial

    PTI seeks partners to upscale 200litres refinery to commercial

    The Petroleum Training Institute (PTI) is shopping for partners to upscale its 200 litres per day modular refinery to a commercial plant.

    Its Principal and Chief Executive Officer, Dr. Henry Adebowale made this known yesterday in Abuja during the press conference on the 3rd Biennial International Conference on Hydrocarbon Science & Technology.

    The theme of the conference, which will be held on October 23rd to 24th in Abuja, he said, is “The Future of the Oil and Gas Industry: The Challenges, Opportunities and Developments.”

    On the refinery, he noted that “We at the institute have built up our own (refinery). Now, what is next is to scale it up to find a way to make it commercial.”

    He noted that as a training and development institute, PTI has in the last few years been working on the development of technology in modular refinery space.

    Read Also: Bayelsa poll: Diri’s re-election will be smooth sail, says Dickson

    Adebowale disclosed that the concept is being developed to train artisanal refiners, who have no skills.

    The step, he said, is to prevent the adverse effects of artisanal refining on the environment.

    The CEO added that as an institute, PTI has the refinery drawings, and fabricated parts, but the next step is to scale it up to a commercial plant.

    Once the refinery is upscaled, according to him, the next stage will be teaching the artisanal refiners.

    He added that “What we have today is people who know next to nothing about refining.

    “They go to the bush and to the creeks and begin to break pipes and boil crude oil.

    “No, we are doing it differently by training them and equipping them with the necessary skills that will enable them to contribute meaningfully to the economy.”

    Speaking, Director of Research and Development Dr. Tina Osichei

    noted that the institute has the modular refinery template that is a demonstration wing which is about getting the oil and all the processes. “We are using it for training,” she said.

    The essence of the modular refinery is to train the artisanal refiners on all the processes from crude to products.

    She noted that PTI is shopping for partners to upscale the refinery beyond 200 litres.

    “But I must say we are looking for partners so that we scale up beyond 200 litres,” said

    Osichei.

    According to her, the conference will discuss the issue of Carbon Capture Usage and Storage (CCUS) in one of the panel sections.

    She said since the technology is new to the country, it must be included in its curriculum for people to understand the latest technology in the industry.

    Transportation, said the director, is another aspect towards cleaner energy.

    In Nigeria since the main fuel is the Premium Motor Spirit (PMS) petrol, she revealed that the PTI is partnering with the Nigerian National Petroleum Company Limited to come up with Compressed Natural Gas (CNG) powered tricycles.

    She said this will be in line with the Federal Government Decade of Gas policy and emphasis on gas, which is a cleaner energy source than crude oil.

    Osichei noted that the synergy on CNG powered tricycles will result in the reduction in the volume of fuel consumption and carbon emission into the atmosphere.

    She also revealed that PTI is commencing a research on the absorbent that can increase the duration of the gas and make it last longer in the bikes and tricycles.

    Her words: “We are starting a research so that when those stations are operational, those bikes or tricycles are in the market, we have absorbent that absorbs the gas and releases slowly so that you don’t have to keep refilling often.”

    At the conference, she said there  will be four panel sections.

    The NNPCL Academic Petroleum Technology Development Fund is partnering with PTI in the conference that the two Ministers of State for Petroleum Resources are scheduled to attend in Abuja.

  • CORAN makes case for supply of crude to members

    CORAN makes case for supply of crude to members

    Owners of modular refineries are seeking  government intervention to expand their  capacity to boost supply of petrol.

    The refinery owners, under the aegis of Crude Oil Refinery-owners Association of Nigeria (CORAN) who met with the Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, in Abuja, yesterday, called for the establishment of a Refinery Intervention Fund to assist local refineries expand their capacity from the current 27,000 barrels per day to about 400,000 barrels per day.

    Chairman of CORAN, Momoh Jimah Oyarekhua also called for  the minister’s intervention to boost crude oil supply to members of the association and  reduction of  fees paid to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for every litre of product they refine in-country.

    Oyarekhua said the modular refineries  producing are starved of crude and when available,  local producers want them to pay for it in dollars.

    “We have met with the NUPRC, on the issue, because the matter is captured under the domestic crude oil supply obligation which is clearly stipulated in the PIA, we have intimated them with the production capacity of local refiners and also sought their commitment on domestic crude obligation to all modular refiners. We have recently written to them again to ask for another meeting to know where they are on the issue,” he said.

    Oyarekhua, who is also the chairman of OPAC Modular Refinery, asked the minister to help them facilitate access to crude oil under the domestic crude obligation as stipulated by the Petroleum Industry Act to serve as feedstock for their refineries.

    He noted that  lack of crude guarantees have held back investors who are considering financing the operations of modular refineries.

     “Investors see this as a disadvantage and are unwilling to invest.

    Read Also: PINL expresses concern over  deaths  at Rivers illegal refinery fire

    “Having one gigantic refinery is not a solution today.  Creating modular refineries in areas where we have our crude trap today is the solution that Nigeria requires even with the pipeline vandalisation, with crude theft and all of that.

    “In  such clusters, if you have modular refineries that could produce this crude into the local market it would be a good way to help the country to be self-sufficient in the refined products,” he said.

    He said provisions should be made to increase the number of modular refineries  to 40 in the region, with refining capacity of 10,000 barrels per day so that a minimum of about 400, 000 barrels of crude can be refined in the Niger Delta.

    Speaking on high fees, Oyarekhua said,: “As of today, for every litre of AGO or DPK we send into the market, we pay cumulative fees of up to N9.80 which invariably increases the price of that product to the market.

    “As refiners, our first interest is to serve the market; however, it is not to make the price of the products unaffordable to Nigerians.

    “But when you add these fees to the product, it means that the retail price is further increased for the consumers.

    “The PIA did not say that the local crude refinery owners should be the ones to pay those fees, but we have been receiving letters from the NMDPRA, asking that we remit those fees.”

    He therefore urged the minister to intervene to resolve this challenge.

    Responding, Lokpobiri promised to look into the various issues raised and find ways to resolve the challenges.

    According to him,  it is government’s  responsibility to  provide a conducive environment for businesses to thrive.

    The minister, while encouraging the refinery owners to seek financial support from development finance institutions like the Bank of Industry, Afrexim Bank among others, also promised to engage with relevant agencies concerning the issues.

    “We will engage with the relevant stakeholders to ensure more access to crude to the local refineries so that they can refine petroleum products to contribute towards meeting the local demand. We will do whatever we can do as a ministry to resolve these issues,” he added.

  • P/Harcourt Refinery resumes production by December, targets 54,000/60,000 bpd –Lokpobiri

    P/Harcourt Refinery resumes production by December, targets 54,000/60,000 bpd –Lokpobiri

    The refurbished Port Harcourt Refinery is expected to supply the local market with 54,000 to 60,000 barrels of petroleum products per day when it resumes production by December, Minister of State, Petroleum Resources, Heineken Lokpobiri, announced yesterday.

    Lokpobiri who was on a facility inspection of the refinery said that rehabilitation of the first phase of the refinery had been relatively achieved and would commence production by the end of the year.

    He said the Warri and Kaduna refineries would follow suit next year.

    “From what we have seen here, the first phase will come on stream by the end of 2023 with about 54,000 to 60,000 barrels per day production,” he said of the Port Harcourt Refinery.

    The refinery is expected to be fully rehabilitated by the end of 2024, he said.

    “Warri will start by the first quarter of next year with about 70,000 barrels per day and Kaduna will come on stream towards the end of next year.

    “If we add all that to Dangote refinery, we will be able to stop fuel importation, start saving substantial part of our funds and Nigerians will also begin to have the benefits of full deregulation.”

    The Dangote Refinery has a production capacity of 650000 barrels per day.

    Read Also: Unclaimed dividends rise to N190b

    He expressed satisfaction at the extent of work done on the Port Harcourt Refinery.

    He said his team would inspect all refineries in the country to ensure that in the next few years, Nigeria will stop fuel importation.

    Minister of State, Gas Resources, Mr Kperikpe Ekpo, who was with Lokpobiri noted that the Federal Government was very intentional in attracting foreign investors in the gas sub sector.

    “Of course, the ‘Renewed hope’ agenda of the Federal Government will end gas flaring and also boost electricity in the country.

    “We have received the brief today. I can say that there is hope for Nigeria.

    “Gas flaring will stop and gas generation will increase so that we can have uninterrupted power supply in the country.

    “I am comfortable with what we have seen; the improvements are there and the contractors are dedicated; this is in line with the president’s directive of a renewed hope for Nigerians,” Ekpo said.

    President Bola Tinubu had told the leadership of the Nigeria Labour Congress (NLC) during a meeting earlier this month that the Port Harcourt Refinery would resume operations by December.

    He said production would begin after the ongoing rehabilitation contract between Nigerian National Petroleum Company (NNPC) Limited and Maire Tecnimont SpA is completed.

  • My refinery will transform Nigeria’s economy, says Dangote

    President/Chief Executive of Dangote Group, Alhaji Aliko Dangote has said his refinery, when it comes on stream, would eliminate fuel scarcity and tranform the nation’s economy for decades.

    The refinery, located in Lekki, Lagos State, is expected to produce 65.4m litres of petrol (PMS) diesel (AGO) aviation jet fuel and kerosene (DKP) daily.

    The petroleum products are planned to meet the needs of Nigerians and most of the African continent.

    Addressing guests at the Dangote Special Day at the 40th Kaduna International Trade Fair, the foremost industrialist said his other businesses- Dangote cement, salt, sugar refineries as well as food products would ensure food security and improve lives for decades to come.

    Alhaji Dangote, who was represented by the Group Executive Director, Strategy and Government Relations, Mansur Ahmed, noted that , the gains of the huge investments in the different sectors by Dangote have moved the nation’s economy forward and complemented government’s effort in no small measure.

    According to Dangote, the Group continues to be the largest employer of labour in Nigeria, with over 50,000 direct and hundreds of thousands indirect employment opportunities.

    “The Rice Mills established in some states, Kebbi, Jigawa, Sokoto, Enugu, Zamfara, Kano and Niger states would also ensure self-sufficient in rice production. We are doing everything possible to ensure Nigeria moves from an importing country to an exporting country.

    “We have succeeded in making Nigeria exporter of cement, earning hard currencies for the country and contributing in lifting the country from recession.

    REad also: Dangote Group assures Nigerians of good quality products

    “The feat is achievable because of the three Dangote Cement factories at Obajana in Kogi State, Gboko Cement factory in Benue  and Ogun states, because they are not only producing enough cements for local consumption but also for export,” he said

    President of Kaduna Chambers of Commerce, Industry, Mines and Agriculture (KADCCIMA)  Dr. Farida Muheeba Dankaka, lauded Dangote Group for its contribution to economic growth.

    Dr. Farida said the huge investments by the conglomerate is responsible for over 10% of Nigeria’s Gross Domestic Products (GDP). “KADCCIMA is proud to be associated with the conglomerate,” she stated.

  • Iheanacho seeks sovereign guarantee to build refinery

    Eko Refinery and Petrochemical Company has appealed to the Federal Government to support local refiners with sovereign guarantees on loans for the completion of its modular refineries.

    Its Chairman, Mr Emmanuel Iheanacho,  made the appeal in Lagos against the backdrop of local refiners’ inability to secure loans to complete ongoing modular refineries.

    Sovereign guarantee is a promise by the government to discharge the liability of a third person in case of default which is contingent liabilities of the central and state governments that come into play on the occurrence of an event covered by the guarantee.

    Read also: Dangote Refinery gets key component

    Iheanacho said government did not necessarily need to provide its own funding, but give guarantee to any of the local promoter of refining companies that demonstrated that the refinery’s design and programme were viable.

    He said:  “That is the only way to help to secure loan. It simply means government is going to give a sovereign guarantee for any money that is loaned; there is money all over that place, but they are awaiting government to make the move to agree to give sovereign guarantee.