Business
FG Moves To Revive Brass, Olokola LNG Projects
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, last weekend, disclosed that the Federal Government would be engaging with management of the Nigerian Liquefied Natural Gas Company, NLNG, on the feasibility of the company acquiring stakes and driving the revival of Brass LNG and Olokola LNG.
This was even as the NLNG disclosed that as part of its 30-year initiative, it is targeting an investment of N3 billion annually in Bonny Kingdom to drive development in the community and transform it into a notable tourist and relaxation destination.
Speaking during a visit to the NLNG plant complex in Bonny Island, Kachikwu allayed concerns that the forthcoming elections would derail the Train 7 project of the NLNG, explaining that the Federal Government would provide the much-needed support to ensure the company, which had always remained insulated from politics, achieve its goal.
He advised the NLNG to avoid complacency, get out of its comfort zone and make investments, or mobilize resources and investors for the successful take-off of the Brass LNG and OKLNG projects.
Brass LNG was initiated in 2003, but had remained in planning stages several years, while the foreign investors in the proposed investment had all pulled out. OKLNG on the other hand, was initiated in 2005, but is on the verge of death, as all the investors had pulled out and the government is considering scrapping the project.
He noted that revival of the two LNG projects would help create about 5,000 jobs in peak periods and almost 3,000 jobs in normal periods.
He said: “The NLNG have been fantastic in terms of its comfort zone. You probably can give them a 100 per cent in terms of their own performance. But I am saying that the world is bigger than this island. We have opportunities that are stranded everywhere, Brass LNG, in terms of shareholding, financing; OKLNG, in terms of getting off the ground.
“I would like to see NLNG get out of its comfort zone over the next 30 years. Different from Train 8 and nimble investments in smaller fields, how about Brass LNG and OK LNG? Why must you not be the parents of those types of investments? Even if it is just to harness the potential investors because of the clout and respect you have in the international financial community.
“I like to see you hand-hold some of those projects, even if it is little investments you have as a collective. You need to go from the whole, to a smaller collective and to drive the process,” he said.
Kachikwu further stated that the Federal Government would be reaching out to the NLNG, not seeking to compel it, but enter into a collaboration with it to see what could be done and how government can learn from what they have done well to drive the process of revival and completion of the two LNG projects.
He said: “I am saying as the grandfather of this business, the NLNG have built six trains, looking at seven; hopefully, potentially more, let us begin to look at where through minimal investments, through structures and designs, reconfigurations and expert advice, you can actually hand-hold some of those trains that are beginning to lag behind, so that the whole founding fathers’ concept of taking this all over the place happens.”
The minister added that the Federal Government is going to set up an inter-ministerial task team to engage with the NLNG on ways to increase consumption and drag down the price of Liquefied Petroleum Gas, LPG, also known as cooking gas, ensuring that locally-produced LPG is cheaper than its imported counterpart.
Also speaking, Managing Director/Chief Executive Officer of the NLNG, Mr. Tony Attah, expressed optimism that with the support and full backing of the Federal Government, the company is poised to ensuring that Train 7 becomes a reality. In his presentation to the Minister’s team, comprising the Permanent Secretary of the Ministry of Petroleum Resources, Mr. Folashade Yemi-Esan; Executive Secretary of the Nigerian Content Development Management Board, NCDMB, Mr. Simbi Wabote, among others, General Manager, Production of the NLNG, Mr. Tayo Ogini said the planned Train 7 holds immense potentials for Nigeria. According to him, Train 7 would bring about a 35 per cent growth in Nigeria’s LNG output, create 8,000 jobs, build capacity for small scale LNGs and increase domestic LPG supply to about 0.5 million tonnes per annum.
Business
Electricity: Bands BCDE Suffer No Power
As DisCos struggle to meet the required 20 hours power supply to “Band A” customers following shortage of gas which has hindered power generation since January, customers on Bands B, C, D, and E are left with no light, according to The Tide’s source.
The source learnt that the distribution companies were concentrating more on the Band A customers to keep their Band A feeders from being downgraded.
Band A customers enjoy a minimum of 20 hours of electricity daily.
On April 3, the Nigerian Electricity Regulatory Commission announced that subsidies would no longer be paid for the electricity consumed by Band A customers.
The electricity tariff for Band A customers was revised upward from N68 per kilowatt-hour to N255/KWh.
1 kWh is the amount of energy that could be used if a 1,000-watt appliance is kept running for an hour. For example, a 100-watt light bulb operating for 10 hours would use 1 kWh.
After the power subsidy was removed, the NERC directed the 11 DisCos to release their lists of Band A customers, who must get at least a 20-hour supply daily.
The regulator and the Minister of Power, Adebayo Adelabu, emphasised that there would be sanctions should the distribution companies fail to supply Band A customers with 20 hours of electricity.
The DisCos were also mandated to inform customers whenever they failed to meet the required minimum service level.
NERC said where a DisCo failed to deliver on the committed level of service on a Band A feeder for two consecutive days, the DisCo should, by 10 am the next day, publish on its website an explanation of the reasons for the failure and update the affected customers on the timeline for restoration of service to the committed level.
It stated that if a customer’s service level improves to at least 20 hours, they should be upgraded from lower service bands to Band A, adding that if the DisCo fails to meet the committed service level to a Band A feeder for seven consecutive days, the feeder will be downgraded to the recorded level of supply by the applicable framework.
In their efforts to meet up with the service level, the source gathered that some of the DisCos were gradually resorting to diverting the little allocation they get to the Band A customers.
This is in spite of the fact that the gas constraints that have hindered power generation since the beginning of the year have yet to be addressed.
Many communities said they could not boast 30 hours of power supply since January, a development the government blamed on the refusal of gas companies to supply gas to power-generating companies due to heavy debt.
Recall that recently, the IBEDC spokesperson, Busolami Tunwase, explained that, “One of the primary factors is the low supply of gas to generating companies, which has led to a gradual decrease in available generation on the grid.
Business
‘Inappropriate Insider Dealing’ Earns Julius Berger NGX Sanction
Authorities at the Nigerian Exchange (NGX) have sanctioned Julius Berger Nigeria (JBN) Plc for engaging in inappropriate insider dealing in shares.
According to a document obtained by The Tide’s source, JBN, Nigeria’s leading construction company, was sanctioned for “insider dealing during closed period”.
Incorporated in 1970, Julius Berger, Nigeria, which was incorporated in 1970, became a publicly quoted company in 1991 and has more than 10,000 shareholders.
NGX Regulatory Company (NGX RegCo), the self regulatory organisation (SRO) that regulates activities at the NGX, stated that JBN breached certain provisions of the listing rules and was thus sanctioned accordingly.
According to NGX RegCo, JBN violated provisions on “closed period”, in breach of the construction company’s commitment to adhere to listing rules and standards.
The NGX had tightened its rules and regulations to checkmate boardroom intrigues and block information arbitrage that tend to confer advantages on companies’ directors.
The amendments expanded the scope and authority of corporate financial reporting while eliminating gaps that allowed companies to sidetrack relevant rules in stage-managing corporate compliance.
The enhanced framework provided clarity and greater disclosures on directors’ trading in shares, corporate liability for accuracy and compliance of financial statement, dissuade bogus dividend payment and other sundry boardroom’s maneuverings that tend to favour insiders.
The amendments came on the heels of noticeable increase in violations of rules on ‘closed period’, a period when directors are banned from trading in the shares of their companies.
Rule 17.17 of the NGX disallows insiders and their connected persons from trading in the shares or bonds of their companies during the ‘closed period’ or any period during which trading is restricted.
This period is mostly at a period of sensitive material information, like prior knowledge of financials, dividends or major corporate changes, which places directors and other insiders at advantage above other general and retail investors.
A review of the disclosure violations at the stock market had shown that all violations in 2021 were related to violation of Rule 17.17 on ‘closed period’.
Under the amendments, in addition to the provisions of relevant accounting standards, laws, rules and requirements regarding preparation of financial statements, companies are now required to include several specific declarations on securities transactions by directors, changes in shareholding structure, self-assessment on compliance with corporate governance standards and internal code for directors on securities transactions among others.
Business
Nigerian Breweries To Suspend Operations In Two Plants
Nigerian Breweries Plc says it is planning for a company-wide reorganisation which include the temporary suspension of operations in two of its nine breweries.
It said this is part of a company-wide reorganisation as part of a strategic recovery plan aimed at securing a resilient and sustainable future for its stakeholders.
The Business Recovery Plan includes a rights issue and a company-wide reorganisation exercise which includes temporary suspension of two of its nine breweries and an optimisation of production capacity in the other seven breweries, some of which have received significant capital investment in recent years.
These measures include relocating and redistributing employees to the remaining seven breweries and offering support and severance packages to those that become unavoidably affected.
The company said this move is essential to improve its operational efficiency, financial stability and enhance a return of the business to profitability, in the face of the persistently challenging business environment.
In letters signed by the company’s Human Resource Director, Grace Omo-Lamai, and addressed to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), the company informed both unions that its proposed plan would include operational efficiency measures and a company-wide reorganisation that includes the temporary suspension of operations in two of its nine breweries.
As a result, and in accordance with labour requirements, the company invited the unions to discussions on the implications of the proposed measures.
Recall that the company recently notified the Nigerian Exchange Group (NGX) of its plan to raise capital of up to N600 billion by way of a rights issue, as a means of restoring the company’s balance sheet to a healthy position following the net finance expenses of N189 billion recorded in 2023 driven mainly by a foreign exchange loss of N153 billion resulting from the devaluation of the naira.
Speaking on these developments, the Managing Director/CEO, Nigerian Breweries, Hans Essaadi, described the business recovery plan as strategic and vital for business continuity.
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