Business
Nigeria: NNPC Seeks to ‘Pre-empt Mobil on Asset Sale to Seplat’
By Derrick Bangura
The Nigerian National Petroleum Company (NNPC) Limited may have created a wedge in the highly acclaimed transaction that would have seen Seplat Energy, an indigenous oil firm, buy over oil shares belonging to ExxonMobil, THISDAY has learned.
The deal between ExxonMobil’s Nigerian unit, Mobil Oil Producing Nigeria Unlimited (MPNU), the first since the signing of the Petroleum Industry Act (PIA) in August last year, had attracted plaudits from industry leaders.
The Sale and Purchase Agreement (SPA) to acquire the entire share capital of MPNU, THISDAY had reported, was for a purchase price of $1.283 billion, plus up to $300 million contingent consideration.
However, a report by Platforms Africa, news, business, and leadership medium, stated that the state-owned oil giant had opted to exercise its Right of First Refusal (RFR) on the sale of the assets.
The RFR is reportedly contained in the Joint Operating Agreement (JOA) of the Joint Venture (JV), which represents NNPC’s position on the planned sale of the shares to Seplat Energy Plc.
Efforts to get NNPC to speak on the matter were not immediately fruitful, but a top source in the oil firm told THISDAY, “We will address it at the appropriate time.”
But an industry source who preferred to remain anonymous told THISDAY last night that NNPC’s action could lead to a legal tussle between Seplat and the national oil company. The source stressed that NNPC did not have the power to halt the acquisition of the multinational oil company’s shares by Seplat.
According to the source, “Seplat bought ExxonMobil’s shares, not assets. Whereas NNPC has right of pre-emption over the sale of assets, it does not have right over sale of shares.”
Furthermore, the source explained that with its present structure, NNPC was now a commercial entity and no longer a regulator, as it used to be in the past, “so, it is the regulator that can interfere in the matter.”
The source added, “However, they have to check the Production Sharing Contract (PSC) because if they say they are taking over ExxonMobil, that means they are taking over staff, pensions, and liabilities and not assets.”
It was gathered that NNPC had already notified Mobil Producing Nigeria Unlimited of its intention to exercise the right of pre-emption on ExxonMobil’s planned sale of its entire asset in Nigeria’s onshore and shallow waters.
However, a reliable source told THISDAY that the politics underlying the stoppage of the deal could markedly derail the new verve the Petroleum Industry Act (PIA) was expected to bring to the industry.
It was learned that NNPC was intending to have a special arrangement with a company belonging to a northerner operating in the oil and gas industry, under a “strategic management contract.”
Industry sources said that the state-owned oil firm, which is the major shareholder in the JV with ExxonMobil, might have exercised its right of first refusal on the assets as part of a new era, which will focus solely on building the long-term profitability of the NNPC Limited.
The Mele Kyari-led company had previously conveyed its decision to exercise its rights and match any offer by interested parties for the assets following ExxonMobil’s decision to receive bids for their share of the JV, the platform reported.
Seplat Energy subsequently put forward a winning bid for the assets and reached an agreement with ExxonMobil.
The right of pre-emption is a legal right to parties in a joint venture to be the first to be considered for any planned sale or takeover of assets in the JVs if either party chooses to trade them off.
A letter sighted by Platforms Africa, signed by the Group Managing Director, Kyari, and addressed to ExxonMobil, quoted NNPC as reiterating its resolve to take over the company’s share of the assets.
“We are aware that you reached an agreement to divest from onshore and shallow waters JVs,” the letter read, adding, “Clearly we are interested.”
Announcing the agreement, ExxonMobil had earlier said that the deals were subject to approval and the new position of NNPC, meaning that the whole process of sale and purchase agreement between ExxonMobil and Seplat Energy has to be discontinued.
Seplat Energy, the company that made the winning bid, had staked over $1.2 billion for the deal to acquire the entire share capital of MPNU plus contingent consideration and was waiting for the minister’s consent before the latest development.
This meant that the state-owned oil firm must not, based on its exercise of right of first refusal, pay below the $1.2 billion mark.
According to the letter, NNPC also reiterated that it had already transformed from being a corporation to being a profit driven company and it now had the capacity to buy over the share of ExxonMobil in the Joint venture.
The NNPC had recently announced a funding agreement with Afreximbank for up to $5 billion to grow its investment in new and existing upstream assets.
Recently, the publishers of the Africa Oil and Gas Report raised the alarm over the attempt by the national oil company to crowd out private investors, saying that enough space should be created for some level of diversity in investment. That alarm has now proved to be a wake-up call on increasingly seemingly grab-all posture.
Commenting on the pre-emption rights as expressed by NNPC, Publisher of the magazine, Toyin Akinosho, who had spoken on Arise News Channel, urged NNPC to free the space for entrepreneurs to come in, insisting that the company already has a lot in its basket and was even finding it difficult to cope.
Akinosho maintained, “NNPC is in JV with companies that produce at least 45 percent of our crude. That’s a lot of material for them already. The assets they operate are the least optimized of all the assets in the industry.”
While accusing NNPC of grabbing assets all over the country, he wondered why the national oil company was allegedly stifling investment in the sector. According to him, the kind of partners that NNPC may hand over the assets to are always not the most experienced in the space, adding that the whole idea is to “gift” it to a third party.
“It would not manage the assets, so any excuse about ‘this being taken over in the interest of the state’ is untrue. In the last three years, it has implemented Finance and Technical Service Agreements (FTSAs), with companies that it chooses to work the assets,” he added.
Business
Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa
Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.
The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.
Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.
The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.
Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.
A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.
He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.
This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.
“We must invest in power because it is the biggest determining factor for industries to thrive.
“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.
“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.
Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.
He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.
A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.
Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.
He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.
“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.
Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.
Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.
He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.
“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.
“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.
Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.
He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.
Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.
“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.
While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.
In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.
This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.
“It empowered the state houses of assembly to enact laws on power.
“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.
“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.
According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.
“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.
“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.
Business
Mercedes urges delay of EU tariffs on Chinese electric vehicles
The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.
“We need more free trade instead of new trade barriers.
“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.
“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.
At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.
Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.
The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.
But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.
The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.
Business
ACCI moves to promote business connections, balance work-life
The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.
The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.
Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.
He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.
“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.
“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.
“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.
“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.
According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.
“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.
“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.
“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.
“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.
The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.
Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.
He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.
The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.
The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.
Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.
He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.
“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.
“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.
“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.
“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.
According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.
“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.
“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.
“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.
“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.
The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.
Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.
He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.
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