The Federal Government has expressed its readiness to restore the production of the Oil Prospecting Licence (OPL) 245, also known as Malabu Oil Well, in order to boost Nigeria’s crude oil output.
This follows Italy’s Eni’s (ENI.MI), suspension of arbitration, Monday, regarding an oilfield dispute with the Nigerian government, buying time to hold a conversion on the licence from prospecting to mining, Reuters reports.
The suspension is coming barely three days after Nigeria withdrew civil claims totalling $1.1 billion against Eni related to allegations of corruption in the OPL 245 deal.
Recall that The Tide’s source reported that the Federal Government is now ready to benefit from what is considered one of the juiciest oil blocks in Africa, the controversial OPL 245, for the first time in 25 years in a bid to ramp up Nigeria’s oil production output.
The oil block is estimated to hold over nine billion barrels of crude oil, nearly a quarter of the nation’s total proven oil reserves.
Confirming this report, the Nigerian Upstream Petroleum Regulation Commission (NUPRC) told the source that the Federal Government is open to the restoration of the Malabu Oil well.
The commission, however, said it was not in a position to provide further information on plans to activate the oil well but will do that after court proceedings have been completed and the issue is no longer subjudice.
In an emailed response to the source’s enquiry, the Head, Public Affairs and Communications, NUPRC, Mrs Olaide Shonola said, “The FGN is open to the restoration of the Malabu Oil well.
“However, more information will be provided after court proceedings have been completed and no longer subjudice”.
Meanwhile, Eni confirmed the suspension of the arbitration regarding OPL 245 oilfield at the World Bank’s dispute settlement body.
“Eni … has agreed with the Federal Government of Nigeria to mutually and temporarily suspend the arbitration proceedings in order to discuss with the government the necessary steps for achieving the conversion of the licence from prospecting into mining (extraction)”, an Eni spokesperson told the source.
Recall that Bloomberg had reported that Nigeria will waive the claims before Italy’s highest court “unconditionally” and “with immediate effect” no later than November 17.
The country also “irrevocably” waived the right to any further legal action in Italy against Eni, its affiliates, and current and past officers regarding rights for the field, known as Oil Prospecting License 245, or OPL 245.
Eni confirmed receipt of the letter and said in a statement that it was ready to consider, together with the government of Nigeria, the necessary steps for conversion of the prospective licence to one that will allow the development of the oil block.
According to Bloomberg, the Ministry of Justice was not immediately able to respond to a request for comment.
Operations at the country’s oil block have been halted for more than a decade by a series of trials and competing legal claims.
The area is considered to be potentially one of the richest concessions in the country, with recoverable reserves of 560 million barrels, according to Eni’s estimates.
Eni’s suspension of the World Bank arbitration means the company and its partner Shell Plc can finally begin to develop OPL 245.
Eni, Shell, and some of their former and current managers had already been definitively acquitted last year in a criminal case in Milan, in which they were accused of knowing that much of the $1.1bn they paid to acquire OPL 245 would be distributed as bribes.
Even after that verdict, a civil suit continued, with Nigeria seeking combined compensation of $3.5bn from Eni and Shell, claiming the amount reflected the real value of the licence purchased in 2011 by the two companies.
Authoritative sources say the Bola Tinubu administration is open to releasing the oil block to prospective developers, including local and foreign investors.
Specifically, it was learnt that Shell with headquarters in the Netherlands, and ENI, an Italian energy firm, which had both been involved in previous attempts to develop the oil field, are favoured to get President Tinubu’s nod.
In fact, an Oil Mining Licence, OML, may be issued to the two international oil companies, both of whom have been collaborating on the controversial oil block and the scandal-ridden OPL.
Already, the April 29, 1998 controversial licence to Malabu Oil & Gas Limited has now expired over two years ago and both Shell and ENI – the Dutch and Italian IOCs which had been involved in the oil block deals – have indicated willingness to partake in further development of the block if the Tinubu Presidency grants approval.
A statement from ENI says to further develop the oil block, investments running into billions would still have to be made by whoever gets the mining licence.
An Aso Villa source confirmed that the president is keen to explore the oil block, especially considering its huge reserves at a time that Nigeria’s oil output is struggling to meet its OPEC quota.
At the last count, in June this year OPEC had to reduce Nigeria’s future quota by over 20 percent from 1.74 mb/d to 1.38mb/d. This new quota will become effective next January if Nigeria’s output remains low.
Already the Federal Government has decided to end the legal cases abroad on the contention around the ownership of the oil block.
However, the former Attorney-General of the federation, Mohammed Adoke, SAN, who was the country’s chief law officer when an agreement was signed for Nigeria to be paid $1.1billion for OPL 245, is still facing prosecution in Nigeria on various allegations, including fraud and money laundering.
But inside sources say no conclusive evidence has been found to prove the allegations against Adoke, on which grounds the former AGF is seeking an exoneration with the emergence of a new administration.
The case against Adoke was brought by the Economic and Financial Crimes Commission (EFCC), and the case files are still open.
But investigators say certain properties were traced to Adoke suspected to have been bought with proceeds of the bribes drawn from the settlement of the case.
However, Adoke was said to have shown proof that the property was purchased through a bank loan.
Adoke also argued that he got then President Goodluck Jonathan’s approval for the agreement which saw the $1.1bn settlement money moved from Nigeria’s JP Morgan account in New York to two Nigerian banks where the money was allegedly shared to individuals, according to investigation documents seen by Empowered Newswire.
Specifically, it is believed that $800 million was paid to Malabu out of the over $1billion settlement. Nigeria got only about $200 million.
Several local and international court cases were instituted since the OPL 245 was questionably awarded on April 29, 1998 to Malabu Oil and Gas, RC 334442, owned by then petroleum resources minister, Dan Etete, and members of the late General Sani Abacha when he was the Head of State.
Meanwhile, authoritative sources also confirmed that the Federal Government is in fact aware that Malabu Oil and Gas, owned by Dan Etete and members of the late General Sani Abacha never paid up the signature bonus of $20 million it was obliged to pay within 30 days of the licence grant.
Sources said Malabu initially only paid $2.04 million on May 15, 1999. The legal opinion, according to senior lawyers in the Tinubu administration, is that in fact “Malabu never earned a legal title to OPL 245”.
In 2019 President Muhammadu Buhari rejected a request from ENI seeking to convert the OPL into a mining licence. In the circumstances, authoritative sources say President Tinubu is much more favourably disposed to granting the request now.
‘Unemployment Rate Hit 0.8% In 2023 Q3’
The unemployment rate in Nigeria rose by 0.8percent in the third quarter of 2023.
According to the National Bureau of Statistics (NBS), this was a significant rise, adding that the unemployment rate rose from the 4.2percent recorded in Q2 2023 to 5.0 percent in Q3 2023.
The NBS, the custodian of official statistics in the country, disclosed this in a report it published last Monday titled “Nigeria Labour Force Survey Q3 2023”.
“The employment-to-population ratio was 75.6 percent in Q3 2023 with a decrease of 1.5 percent compared to a ratio of Q2 2023.
“The combined rate of unemployment and time-related underemployment as a share of the labour force population (LU2) increased to 17.3percent in Q3 2023 from 15.5percent in Q2 2023.
“About 87.3 percent of workers were self-employed in Q3 2023. The proportion of workers in Wage Employment in Q3 2023 was 12.7 percent.
“The unemployment rate increased significantly in Q3 2023 at 5.0 percent. This is an increase of 0.8 percent from Q2 2023.
“The rate of unemployment among persons with post-secondary education was 7.8 percent in Q3 2023”, the report stated in part.
It added that the unemployment rate for youth between the ages of 15 and 24 years was recorded at 8.6 per cent in Q3 2023 while the informal employment rate in Q3 2023 was 92.3 per cent.
The report added, “The unemployment rate in urban areas was 6.0 percent percentin Q3 2023, a slight increase of 0.1 percent from Q2 2023.
“Time-related underemployment in Q3 2023 was 12.3 percent, showing a slight increase of 0.5 percent from the rate recorded in Q2 2023. This shows an increase of 1.4 percent compared to the rate in Q4 2022.
“4.1percent of the working-age population was in subsistence agriculture in Q3 2023. Informal employment rate in Q3 2023 was 92.3percent, while Q2 2023 was 92.7percent.
“Percentage of youth Not in Employment, Education or Training was 13.7percent in Q3 2023”.
Recall that Nigeria’s inflation rate last Thursday climbed to 29.90 per cent in January 2024 from 28.92 per cent recorded in the previous month.
The 0.98 percent increase shows that the inflation rate in the country is yet to slow down.
The NBS revealed this in its ‘Consumer Price Index’
The development adds more pressure on the Central Bank’s monetary policy committee to sharply raise interest rates at a February 26-27 meeting its first in seven months.
Merchant Navy Lauds NIWA Over Staff Welfare
The Nigerian Merchant Navy Officers and Water Transport Senior Staff Association (NMNO/WTSSA) has expressed optimism that the Managing Director of National Inland Waterways Authority (NIWA), Mr. Bola Oyebamiji, will prioritise workers welfare for optimal performance of the agency.
Jibril Darda’u, General Manager, Corporate Affairs, NIWA, in a statement over the weekend, disclosed that the seafarers’ union’s remarks are one of the highlights of the meeting between the Trade Union Congress (TUC) affiliate group and management of the agency.
The statement quoted the Chairman of the NMNO/WTSSA, Comrade Suleiman Danjuma, as commending the Managing Director of NIWA for the good initiative of the kind of interaction that brings the staff closer to the management.
“This will definitely boost the morale of the staff and pledge their loyalty and confidence in the Managing Director’s leadership style”, Danjuma stated.
Earlier, the Managing Director of NIWA promised to build on the progress already achieved at the Lokoja River Port, Kogi State.
The MD disclosed this when he went on a familiarisation tour of NIWA’s facilities in Lokoja.
According to the MD, the importance of Lokoja River Port being in the confluence State is to boost the economic viability of the State and Nigeria at large.
“We are here for facility tour to see for ourselves what is on ground at Jamata Port, Lokoja. It is important we come here to assess the facilities to see, at least, how we can move the facilities forward”, he stated.
Recall that in continuation of his familiarisation tour, the Managing Director’s visited the NIWA Lokoja Area office to inspect the Dockyard facilities.
Nkpemenyie Mcdominic, Lagos
NCS Consolidates Modernisation Project For Trade Facilitation
Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, has convened a steering committee meeting as part of measures to consolidate on previous gains achieved in the implementation of the Nigeria Customs Service Trade Modernisation Project (TMP), aimed at enhancing trade facilitation.
The CGC, who addressed TMP Steering Committee during a closed-door meeting held at the Customs corporate headquarters in Abuja last Thursday, disclosed that the project is geared towards achieving end-to-end automation of the processes and procedures of the Service.
“The Trade Modernisation Project encompasses the Unified Customs Management System, Trade Portal, and Cargo Release System, alongside Automation Services such as Big Data & AI Integration and Document Management System, as well as Transition & Handbook, covering Technology Upgrades and Enhanced Capacity Building”, he said.
The project, The Tide gathered, has been identified as a milestone, as it highlights the significance of digitisation for transparency, efficiency and effectiveness.
According to him, it sets the stage for adapting to evolving market dynamics in trade, optimising operations and procedures, and creating new pathways to unlock revenue streams.
Addressing the members of the NCS TMP Steering Committee, the CGC reiterated that the project is designed to last for 20 years and has three phases, which are Core Services, Automation Services, Transition, and Handback.
He said, “This project will be able to address the challenges before us, answer tough questions, and make good decisions that will propel the service forward. We will discuss some of the highlights in detail so that we can review the implementation of decisions taken.
“I’m optimistic that we will have robust discussions and make very good decisions. I’ve also seen some highlights of the reports of the last meeting. Hopefully, along the line, we will discuss those in detail”.
He emphasised that the team, as it stands, has a solid foundation that will assist them in reviewing the implementation of progressive decisions.
Chairman of the Trade Modernisation Project Limited, Saleh Ahmadu reiterated his team’s full support for the Service.
He revealed that software has been created to integrate revenue collection to support the NCS revenue target of N6 trillion for 2024. He also expressed optimism that the steering committee would strive to overcome its everyday challenges.
Meanwhile, the Senate, Nigeria’s upper legislative chamber, has approved a total of N5.079 trillion as revenue target and N706.4 billion as budget for the Service for the 2024 fiscal year.
The approval for the sum of N5.079 trillion revenue target and N706.4 billion annual budget followed consideration of a report presentation by the Chairman, Senate Committee on Customs, Excise, and Tariff, Jibrin Isah (APC-Kogi), at the plenary last Thursday.
Addressing the plenary, Isah highlighted personnel costs at N225.99 billion and overhead costs at N111.76 billion, representing 31.99 and 15.82 percent of the budget.
“Also, ongoing capital projects stood at N148.42 billion while new projects, which represents 52.19 percent, earmarked for N220.26 billion”, he said.
Providing a breakdown of the budget, he added that the timely rollout of the 2024 fiscal policy would enable the Service to commence implementation promptly.
In his words, “As part of Customs strategy, the provision of the flexible window will help curb illegally imported vehicles and ensure the proper collection of expected import duties and 25 percent penalty charge from such category of transactions.
“Mechanisms such as systems audit, real-time auditing, post clearance auditing, institution of revenue recovery committee and other intelligence gathering tools will ensure intensive revenue recovery drive”.
The revised penalties and charges in the new Nigeria Customs Service Act, 2023, which he noted, will improve the service’s revenue generation.
On anti-smuggling and cargo tracking, the committee Chairman stated that the service looks forward to collaboration with the Nigerian Shippers Council and other relevant government agencies to decongest and achieve efficient, effective port operations, which would yield more revenue.
Nkpemenyie Mcdominic, Lagos
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