No plan to sell NNPCL shares -official

There is no decision yet by the Federal Government as regards selling the shares of the Nigerian National Petroleum Company Limited to the public through an Initial Public Offering, The PUNCH gathered on Thursday.

An online medium had reported on Wednesday that the NNPCL missed the deadline for the launch of its Initial Public Offering, stating that this was contained in the national oil company’s latest quarterly report.

In accordance with the Petroleum Industry Act, the oil firm transitioned from a state-run corporation to a commercial venture on July 19, 2022.

NNPCL’s Group Chief Executive Officer, Mele Kyari, had during the transition ceremony in Abuja, stated that the company would be ready to launch an IPO by mid-year in 2023.

During an IPO, the shares of a firm are sold to institutional investors interested in owning stakes in that particular company.

But when contacted by our correspondent on Thursday, and asked to state what caused the delay in the IPO declaration and whether the oil firm had fixed a new date for the public offering, the Chief Corporate Communications Officer, NNPCL, Garba-Deen Muhammad, said it was not the decision of the oil company, but the government.

He was also asked to state how much was NNPCL targeting or expecting from the exercise, and how much was the share expected to sell for.

Other questions include which investment banks were underwriting the offering, and whether ordinary Nigerians could buy the shares, or whether it was meant for only accredited and institutional investors.

But in a very brief response by Muhammad, he said, “Shareholders have not decided. It’s not an NNPC decision. Government will decide when to sell, how much to sell down and at what value.”

A look into the Petroleum Industry Act 2021 showed that the shareholders of the NNPCL include the Federal Government, represented by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated. The shares are held in equal portions by the two ministries.

This means that, in effect, the shareholders of NNPCL are the Nigerian people. The PIA was passed in 2021 with the goal of overhauling the Nigerian oil and gas industry. One of the key provisions of the PIA is the corporatisation of NNPC, which means that it will be transformed into a limited liability company.

This will allow the oil firm to operate more independently and efficiently, and it will also make it easier for the government to attract private investment in the oil and gas sector.

The PIA also stipulates that the government must sell a portion of its shares in NNPCL to the public within five years of the law coming into effect. This will allow more Nigerians to participate in the ownership of the country’s oil and gas resources.


Naira Crashes to N776.90/$1 at Official Market, N788/$1 at Black Market

It was a very bad day for the Nigerian Naira at the official market and the black market on Friday as it further depreciated against the American Dollar.

Though its value also weakened in the Peer-to-Peer (P2P) segment of the foreign exchange (FX) market during the session, it was marginal compared with the heavy beating it suffered in the two other forex windows.

In the Investors and Exporters (I&E) category, the Naira lost N14.27 or 1.87 per cent against the US Dollar on the final trading session of the week to sell at N776.90/$1 compared with the preceding day’s rate of N762.63/$1.

It closed lower despite not coming under heavy forex demand pressure, as data obtained showed that the value of transactions was $73.42 million, 25.5 per cent or $25.18 million lower than the $98.60 million quoted on Thursday.

In the same vein, the domestic currency depreciated against its United States counterpart on Friday by N8 to quote at N788/$1, in contrast to the previous day’s price of N780/$1.

In the P2P arm of the market, the local currency lost 58 Kobo against the greenback yesterday to sell for N788.88/$1 compared with the previous day’s exchange rate of N788.30/$1.

A look at the value of the Naira to the Pound Sterling at the spot market showed that it further crashed by N4.10 to close at N966.34/£1 versus N962.24/£1 and against the Euro, it shed N3.94 to finish at N826.82/€1 versus N822.88/€1.

The cryptocurrency market was bullish during the session amid a flurry of fresh industry turmoil and stress in global financial markets.

The predictions that the US Federal Reserve could raise borrowing costs this month increased after stronger-than-expected private payrolls data, which affected how investors view risk assets.

Bitcoin (BTC) rose 0.1 per cent to $30,232.06, Ethereum (ETH) grew by 0.2 per cent to $1,862.25, Solana (SOL) gained 6.4 per cent to sell at $21.46, Binance Coin (BNB) appreciated by 0.7 per cent to $235.70, Cardano (ADA) improved by 0.6 per cent to $0.2833, and Litecoin (LTC) grew by 0.1 per cent to $97.04.

On the flip side, Dogecoin (DOGE) depreciated by 0.6 per cent to $0.0652, and Ripple (XRP) lost 0.4 per cent to close at $0.4669, while the US Dollar Tether (USDT) and Binance USD (BUSD) remained flat $1.00 each.

Dangote refinery petrol hits market July, FG to save N7tn

The Federal Government may save about N35tn in fiscal expenditure within the next five years with the commencement of operations at the Dangote Refinery and Petrochemicals.

The Governor of the Central Bank of Nigeria, Godwin Emefiele, disclosed this on Monday during the ceremony to inaugurate the Dangote Petroleum Refinery and Petrochemical facility in Ibeju-Lekki, Lagos.

The President, Major General Muhammadu Buhari (retd.), who inaugurated the refinery, which is currently the world’s largest single-train petroleum refiner, said his regime had been deliberate about ensuring public-private partnerships.

He described the refinery as a milestone for the Nigerian economy and a game-changer for the downstream petroleum market in the African continent.

Buhari said, “I recall that just about a year ago, I was here to commission your fertiliser (plant) and had the opportunity to briefly inspect this refinery complex which was under construction. The Group Chairman, Aliko Dangote, assured me that the refinery will be ready for commissioning before the end of my tenure.

“I’m aware that this is not the first time that the Dangote Group under Alhaji Aliko Dangote’s leadership is putting Nigeria on the global map through his bold investments in key industries. This has helped to transform our economy from heavy import dependence to a net exporter in some critical industries including cement and fertiliser.”

At the inauguration, which had in attendance senior government officials from Nigeria and other African countries, Buhari described the refinery as a game-changer, just as the Founder/Chairman, Dangote Group, Aliko Dangote, declared that the facility would put an end to the inflow of toxic substandard petroleum products into Nigeria.

The project was inaugurated at the Dangote Industries Free Zone, Ibeju-Lekki, Lagos State. It was attended by governors, lawmakers, government functionaries, royal fathers, captains of industries and prominent Nigerians from all walks of life.

According to the president, Nigeria’s economy, which has been stressed for many years and over a decade of insurgency, has also been severely impacted by several external crises including the global financial crisis, the collapse of oil prices, the Coronavirus pandemic, and the Russia-Ukraine war.

The consequences of these challenges, he said, constituted a severe strain on the economy, limiting government’s ability to provide basic infrastructure without resorting to huge borrowing.

He said, “Our government, therefore, focused its attention on creating an enabling environment for the private sector to thrive and fill the enormous gap in investments, not only in infrastructure, but also in all critical sectors.”

Dangote also stated that the refinery would start delivering refined products to the Nigerian market from July this year, as operators urged the Federal Government to ensure transparency in the supply of crude oil to the 650,000 barrels per day crude oil processing refinery.

Speaking at the event, the founder of the refinery, Dangote, said, “It is our firm commitment that we will replicate in this sector what we have actually achieved in the cement and fertiliser markets, while Nigeria transformed from being the largest importer of these crude products to a net exporter.”

He pointed out that the “first goal is to ramp up projections of various production to ensure that within this year, we are able to fully satisfy our nation’s demand for higher quality products to enable us to eliminate the tragedy of import dependency and stop, once and for all, the dumping in our market of toxic substandard petroleum products.

“Our first products will be in the market before the end of July, beginning of August this year.”

He also said the refinery plans to export to 53 African countries which depend on other countries for petroleum products.

Meanwhile, Emefiele said the Dangote Refinery and Petrochemicals could spare Nigeria about N5tn to N7tn annually in the fiscal expenditures of the federal government over the next five years.

He noted that the project would support the fiscal operations of the government, easing budget constraints of funding fuel subsidy.

The CBN governor added that the cost of fuel subsidy may hit N4.4tn by the end of 2022.

He said, “This project will equally provide support to the fiscal operations of the government as it could help ease budget constraints of funding the petroleum subsidy and engender fiscal savings. Available data indicate that, over a five-year period, fuel subsidy in Nigeria rose more than nine-folds from about N154bn in 2017 to over N1.43tn before another three-fold rise to N4.4tn by the end of 2022.

“A simple straight-line projection suggests that this figure could surpass N7tn within the next three years if we do not tackle it effectively. Thankfully, the Dangote Refinery and Petrochemicals could spare Nigeria about N5tn to N7tn annually in fiscal expenditure of the federal government over the next five years.”


Court adjourns hearing in Oando suit to October

The Federal High Court, Lagos, has adjourned again hearing on the date to file the Scheme of Arrangement document of energy company, Oando Plc.

In a corporate notice to the Nigerian Exchange Limited on Monday, Oando said that Justice Chukwujekwu Aneke sitting at the Federal High Court, Ikoyi, Lagos Division had further adjourned the matter to October 10, 2023.

Oando said the adjournment was to enable it to report on its compliance with the court’s order dated June 7, 2022, and update the court on the status of the Scheme of Arrangement.

The suit no: FHC/L/CP/494/2021-Venus Construction Company Limited & 13 others Vs. Ocean and Oil Development Partners & Oando PLC, was filed in the court on March 25, 2021, by 14 shareholders of the company.

The case was filed by Venus Construction Company Limited, acting by itself and on behalf of other minority shareholders of Oando, and was brought pursuant to sections 353, 354 and 355 of the Companies and Allied Matters Act 2020.

Ocean and Oil Development Partners Limited and the company are the first and second respondents.

The energy company had revealed its plans to delist from the NGX in March as the company’s core investor, Ocean and Oil Development Partners Limited, proposed to acquire the shares of its minority shareholders at the rate of N7.07 per unit.

Some shareholders later kicked against the move.

The Chairman Emeritus of the Independent Shareholders Association of Nigeria, Sunny Nwosu, had slammed the company, saying, “In the last 10 years, shareholders of Oando have not received any dividend from them. You are selling the assets that have made NNPCL a super regulator and a super marketer; because they are the ones distributing the fuel that is being imported with taxpayers’ money; and now, they are also a super retailer. This is not part of corporate governance, this is cheating! We have seen a lot of disrespect for shareholders, especially for people who think they are doing good investments by going to the capital market.”

Also commenting, the Coordinator of the Sage Shareholders Association, Ibadan, Kehinde Olowolafe, said while it was within Oando’s right to exit the market, it was important that regulators ensure minority shareholders were not cheated.

External reserves fall by $1.5bn in four months -CBN

The country’s external reserves fell by $1.5bn in four months, figures obtained from the Central Bank of Nigeria has revealed.

Latest figure on movement of the external reserves by the CBN revealed that the figure, which stood at $36.73bn as of the end of February 20 fell to $36.68bn as of the end of February 27.

It fell from $35.5bn to $35.25bn and $35.2bn as of the end of March, April and May 19 respectively.

At the March Monetary Policy Committee meeting in Abuja, the Governor, Central Bank of Nigeria, Godwin Emefiele, while noting the marginal decline in the level of gross external reserves said it was, “reflecting the downtrend in crude oil prices, as global uncertainties persist.”

In his personal statement, a member of the MPC, Folashodun Shonubi, said the impact of the slowdown in the global crude oil market on the dwindling fortunes of the domestic oil sector had been further compounded by inherent inefficiencies in the structure of the sector in Nigeria.

He said, “This has been a major challenge to both the fiscal and external sectors, as government revenue remain at dismally low levels and accretion to reserves is reduced to a near standstill.

“The situation has precipitated twin issues of increasing deficit and rising debt that is occasioned by significant shortfall in revenue, as well as low foreign exchange supply, resulting in persisting pressure on the exchange rate.”

Another MPC member, Obadan Mike, said, foreign exchange market pressures continued to pose challenges as supply-demand imbalances remained unrelenting.

He said, “The external reserves position has remained weak against the backdrop of the limited capacity of the country to earn foreign exchange from both non-oil and oil exports.

“Consequently, the official exchange rate has continued to depreciate.”