Look beyond NNPC Crude-for-fuel Swap contracts

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The Executive Director of the EDR Associate Limited, Dr M.M. Ibrahim has urged the federal government of Nigeria to look beyond giving contracts to lift oil in Nigeria. Rather, they should be tactical and strategic in reviving the Nigeria’s dwindling economy. He said this in an exclusive phone interview had with him by our reporter following the NNPC, announcement of Oando, MRS, 34 others winner of crude-for-fuel contracts. “If we should continue with this kind of system, there is likelihood of Nigeria economy been static and never transit beyond the current state it is”.

Also, it would not take us forward to the desire level where the nation will have the capacity to reform crude oil to satisfy the needs of the people.

“According to him, I would not opine to the federal government underground agenda to base the future possession of oil and gas policies on the Dangote’s refinery. Nigeria Government should not forget that Dangote refinery is essentially an export oriented refinery. Ultimately, we need to address the issue of refining the entire oil and gas sector, most importantly, to address the issue of downstream challenges that is currently eroding the entire foreign reserve in the country”.

“In a similar vein, the Chairman Transcon Oil Limited, Charles Fanni said the setback seen in the contract is that the selection of the winners is based on self-indulgent and partly self-interest. In his word, some these companies whose firms were selected are obviously friends and campaigners of the present government, some sound judgement may not have prevailed in the selection, consequently, this has a serious negative consequences particularly on the volume and value of crude oil that maybe lifted. As a matter of fact, it will definitely result to payback contract.

Way forward, volume and value of oil lifted by each of these firms must be made public and be verify by the independent international Oil inspectorate agency of repute. This is what we must all demand for as way to authenticate the productivity of the  agreement”

Meanwhile, Charles Fanni, also posit that it is a major step forward in the right direction in terms of transparency and accountability being the first time such a list is would be published.

is the need bring capacity to bear in the selection which obviously brought about partnership particularly between the local and the foreign firms which again will foster collaboration, local content development and bring dividend to the synergies. The caution in it however is the need to watch out for oligopolistic tendencies overtime based on the restricted number which may not allow for competitiveness and of course we know the implications to Nigeria on our earnings and other related issues. The other expectation is to have embedded in the contract agreements a forward integration model that will lead to processing the crude oil in Nigeria in Nigeria in the no distant future. This will enhance the earnings of Nigeria, reduce pressure on the reserve and exchange rate thereby promote employment

DPR Grants Savannah Petroleum ministerial Consent for Seven Energy transaction

Savanna Petroleum, the British Oil and Gas company with its operations in the Niger and Nigeria gives an update in relation to seven Energy Transaction.

Seven Energy International Limited (SEIL) received notification from the Nigerian Department of Petroleum Resources that President Muhammadu Buhari has given consent to the transfer of the Seven Assets. (SEIL’s entire interests in Seven Uquo Gas, Universal Energy Resources and Accugas) to Savannah or any of its subsidiary companies.

As expected, the consent is subject to the payment of all taxes due to relation to the Transaction within 90 days of the receipt of the approval letter conveying the consent.

The receipt of the consent represents the satisfaction of a significant condition precedent for the Transaction for the Transaction. The principal remaining conditions precedent for the Transaction relate to the execution of long-form documentation in relation to the Accugas debt restructuring  and the  Frontier Swap, following which the Transaction completion process is expected to commence. This completion process will follow pre-agreed steps as set out in the legally binding Implementation Agreement which was signed in February 2019.

According to Andrew Knott, the CEO of Savannah Petroleum, “the receipt of consent in relation to the Seven Energy Transaction is a significant milestone for Savannah. I would like to take the privilege to thank the Federal Government of Nigeria for their support in relation to the transaction. I look forward to working with all stakeholders as we advance the Seven Assets”

The Seven Energy Transaction refers to the planned acquisition by Savannah of the Seven Assets and the restructuring of Savannah Energy’s existing indebtedness, as more fully described in the Company’s Admission Document dated 22 December, 2017 and per the company’s RNS announcements dated 20 September 2018 (specifically relating to the gas for oil swap with Frontier Oil Limited and buy-out of minority shareholders in Universal Energy Resources Limited) and 21 December, 2018 (specifically relating to the acquisition of an additional 55-60%( less one share) interest in SUGL and Accugas to AIIM). Unless otherwise defined, capitalized terms in this announcement are per the above Admission Document and RNS announcements.

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