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NNPC, Partners To Rake In Over $760 Million Revenue From OML 130 Gas Supply Agreements

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From Left: Managing Director of SAPETRO, Mr Toyin Adenuga, MD TEPNG, Mr Mike Sangstar, GMD NNPC, Mallam Mele Kyari, Rep of CNOOC Mr. Yuguang Pan and MD Prime 130 Limited, Mr. Emeka Phil Ebasie, at the execution of OML 130 Gas Supply Agreements ..

The Nigerian National Petroleum Corporation (NNPC) and its partners in the Oil Mining Lease (OML 130) Production Sharing Agreements (PSA) and Production Sharing Contract (PSC) are set to earn over $760m from fresh Gas Supply Purchase Agreements (GSPAs) and Gas Entitlement Agreement (GEA) executed Thursday at the NNPC Towers.

The agreements which are part of the Corporation’s gas commercialization programme involve Total Exploration and Production Nigeria (TEPNG), China National Offshore Oil Corporation (CNOOC), South Atlantic Petroleum Nigeria Limited (SAPETRO) and Prime 130 Limited.

The sale structure under which the agreements were executed is designed to provide a clear delineation for the allocation of the gas sale proceeds to all the participating parties, including midstream handling and transportation.

“This a very proud moment for all of us. I understand all the delays, they are completely unavoidable. It is desirable for us to have full alignment of all parties before we proceed. The end result is that there would be clarity around our relationship and we would be unlocking resources that have been on the table for many years. We now have a clear line of sight around gas revenue of up to $250million dollars, and also another $510 million dollars that is applicable to the rest of us,” Mallam Kyari enthused.

He noted that apart from the revenue boost, the agreements have also opened up an opportunity to have the dispute settlement agreement for the OML 130 PSC and ultimately to have a renewed production sharing contract which would now guide the relationship going forward.

On the recently passed Petroleum Industry Bill, the GMD assured the parties that the fiscal terms proposed in the oil reform legislation remain some of the most attractive in the global oil and gas industry, noting that investors have no cause to worry.

In his response, Mr. Mike Sangster, Managing Director of TEPNG, expressed delight at the signing of the agreements, adding that the parties were committed to the terms of the agreements.

He commended the GMD and the NNPC for their vigorous pursuit of the aspiration of the decade of gas programme of the Federal Government.

OML 130 is a deepwater block located 130kilometres offshore Niger Delta at water depths of well over 1000metres. The block contains the producing Akpo and Egina fields and Preowei discovery.

The asset originally known as Oil Prospecting License (OPL) 246 was awarded in 1998 to SAPETRO and was later converted to OML 130 in February 2005 after commercial discovery of oil in Akpo and Egina in 2000 and 2003 respectively.

At conversion, the Federal Government, represented by NNPC, exercised its rights as concessionaire of the block in April 2005 whereby it entered into a PSC with SAPETRO as contractor and TUPNI as operator for 50% of the interest in OML 130 PSC and a Production Sharing Agreement (PSA) between TUPNI, SAPETRO and PRIME 130 for the other 50% interest in the OML 130 block.

In April 2006, SAPETRO farmed-out 90% of its Contractor interest in the OML 130 PSC to CNOOC.

The remaining reserves on the block are estimated at One billion barrels of liquids and over 1.2trillion cubic feet of natural gas.

Gas from the block was transported and sold to the Nigeria Liquefied Natural Gas (NLNG) via the Akpo-Amenam Gas Pipeline and was funded in kind by the PSC under the Gas Utilization Agreements (GUAs) for a consideration of 1TCF of gas which was achieved in July 2018, thus terminating the GUA.

It was projected that the parties would agree on the post- 1TCF regime for the monetization of the gas upon the expiration of the GUA. However due to underlying disputes on the PSC and other reasons, the post-1TCF regime was never agreed upon.

The new agreements offer the gas sales framework for the 100% volume under the PSC and the PSA, according to a statement by Dr. Kennie Obateru, Group General Manager, Group Public Affairs Division of the NNPC.

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CBN Approves Merger of Unity and Providus Banks

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The Central Bank of Nigeria (CBN) on Tuesday announced the approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and the Providus Bank Limited.

The Apex Bank, in a statement by its acting Director of Corporate Communications, Hakama Sidi-Ali, said the move is designed to bolster the stability of the nation’s financial system and avert potential systemic risks.

“The merger is contingent upon the financial support from the CBN. The fund will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders,” the statement read.

“It is unequivocal to state that the CBN’s action is under the provisions of Section 42 (2) of the CBN Act, 2007. This arrangement is crucial for the financial health and operational stability of the post-merger organisation.

“It is important to emphasise that no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated.”

The CBN said it remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.

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Fuel Importers Will Frustrate Dangote Refinery — Obasanjo 

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Former President Olusegun Obasanjo has stated that those benefiting from fuel importation will do all within their powers to frustrate the progress made by the Dangote Petroleum Refinery in Nigeria.

Obasanjo stated this in an interview with the Financial Times where he described the Dangote refinery as a project that should encourage both Nigerians and non-Nigerians.

“Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria.

“If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated,” he stated.

The former Nigerian leader shared his opinion on the heels of recent allegations by the President of the Dangote Group, Aliko Dangote, that some government and non-government officials were trying to frustrate the $20bn refinery.

It’d be recalled that Officials of the Dangote Group recently cried out that international oil companies were frustrating the refinery by refusing to sell crude or by selling to them at a premium up to $4 above the normal price.

The outcry prompted the Federal Executive Council’s directive to the Nigerian National Petroleum Company (NNPC) Limited to sell crude oil to Dangote Refinery and other local refineries in the Nigerian currency – naira against United States’ dollars.

The refinery also accused the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) of deliberately granting licenses to individuals to import dirty fuel.

In its response, the regulator denied this, alleging that Dangote diesel was inferior when compared to the imported ones.

The NMDPRA’s Chief Executive, Farouk Ahmed then declared that the country would not stop fuel importation to avoid a monopoly by the Dangote Group.

Dangote Refinery commenced operations at the facility located in Lagos last December with 350,000 barrels a day.

The refinery hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.

It has however commenced the supply of diesel and aviation fuel to marketers in the country, while petrol supply is expected to commence in August amid regulatory resistance.

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Port Harcourt Refinery to Resume Operations in December, Tinubu Assures Labour Leaders

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*We”Ll Take Decision On Suspension Of Strike At NEC Meeting Today-Ajaero

President Bola Tinubu, on Wednesday night, assured the leaders of the organised labour that the Port Harcourt refinery will commence operations by December 2023.

The organised labour revealed this in a statement on Wednesday night.

The labour centers also noted that the president made a series of promises following which they agreed to return to the negotiations table.

The national presidents of the Nigeria Labour Congress, Joe Ajaero and Trade Union Congress, Festus Osifo in the statement also hailed Nigerians for supporting the nationwide protest.

Tinubu with labour leaders


“It is pertinent to inform Nigerians that the extent of the success of the protest is underlined by the request of the President of the federal republic of Nigeria; Senator Ahmed Bola Tinubu to meet with the leadership of the NLC and TUC in a closed-door session.

“The engagement was fruitful that immense mileage was obtained with regards to the issues that bogged down the work of the Presidential Committee on Subsidy removal and necessitated the protest viz; He committed to an immediate restructuring of the framework for engagement in line with the input of the Labour leaders.

“He let out a certainty that the Port Harcourt Refinery will commence production by December this year. He pledged to ensure that Agreement is reached on the Wage Award for Nigerian workers immediately.

“He promised to unveil a workable roadmap to the CNG alternative next week. On the strength of the president’s pledge and commitment, we have decided to return to a new and reinvigorated dialogue process to allow for full implementation.

“Once again, we thank Nigerians while we wait for the Government to fulfill its own part of the understanding as agreed with His Excellency; the President.”

Briefing State House correspondents at the end of the brief meeting with the President, the President of the NLC, Comrade Joe Ajaero, said they deepened their discussions with the President on palliatives for workers.

He disclosed that the President explained certain things hitherto not in his nationwide broadcast to them at the meeting.

On whether the President urged them to call off the strike, Ajaero said no one person could do that disclosing however that the National Executive Council (NEC) of the NLC would meet today (Thursday) to decide on the next line.of action.

He said, “We met with him (President Tinubu). The issues we discussed are the same issues that led to the protest today.

“He has expressed his position, made some commitments, which were taken side-by-side with what the Senate said, and we’re taking it back to the office with our colleagues to review it and release a document on our next line of action.”

Asked whether the commitments were different from the one he did during the broadcast, Ajaero, flanked by the TUC President, Comrade Festus Osifo said, “We have gone deeper into them. The broadcast has broader issues, but there are one or two things that need immediate attention.”

Further asked whether the organised labour will call off the peaceful protest, he said, “No one person can call it off. That’s why I said we’ll have to go back to the office. So that they will look at it, the Exco looks at it before they come up. And by tomorrow, the NLC will equally have their NEC meeting, to look at the bigger picture.”

Asked whether the President told them to suspend the protest, he simply said, “The President is a pro-democracy activist. So he understands protests.”

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