Nigerian oil exploration and production firm, Lekoil Ltd has revealed that it needs to raise about $100 million before it can commence drilling activities in its Ogo oilfield.
The disclosure was made by Lekoil’s Chief Executive Officer (CEO), Lekan Akinyanmi, during a chat with Reuters.
Lekoil which is listed on the London Stock Exchange agreed to a deferred payment deal earlier in the year to keep its stake in OML 310, where Ogo sits, after it found out that a $184 million loan it wanted to use for the acquisition was a fraudulent one.
Lekan Akinyami disclosed that most of the preparatory work for the Ogo Oilfield was financed from funds from its Otakikpo producing field and will start drilling immediately once it raises the funds.
The oil firm’s CEO said that they are currently holding discussions for a combination of direct investment into the asset and vendor financing, an option he considers the most cost-effective way to raise funds for drilling. He also expects an expenditure of $1 billion to develop Ogo Oilfield throughout its life cycle.
Akinyami said, ‘’We want Ogo to raise its own capital so that we can actually start to build cash…and maybe in a few years start to pay dividends.’’ He added that Otakikpo, which produced an average of 5,305 barrels per day (BPD) last year, yielded $15-$16 million in free cash.
It can be recalled that the shares of Lekoil Ltd plunged more than 70% in January following the suspension of trading after a fraud was discovered. It found out that the $184 million loan it had announced from the Qatar Investment Authority was a complex deception by some individuals pretending to represent the Authority.
In the result that was just released last week, Lekoil recorded a loss of $12 million in 2019 as against the $7.8 million loss that it recorded in 2018. It had a reduced cash balance from $10.4 million to $2.7 million.
Lekoil also wants to reduce its annual general and administrative costs by 40% to reflect the new business environment due to the crash of oil prices.
FG to meet with State Governors over electricity, fuel prices
The State Governors and the FG are set to meet in order to discuss the issues of electricity and fuel pricing in the country.
The Federal Government has disclosed that it will meet with State Governors and the Nigerian National Petroleum Corporation (NNPC) on Thursday to find solutions to issues of fuel and electricity pricing in Nigeria.
This was disclosed by the Minister of Labour, Chris Ngige, in a meeting with newsmen in Abuja after the FG met with organised labour.
The Minister added that the ongoing meetings with organised labour had been peaceful so far and stated that the issue about PMS prices was a work in progress that would also involve the Governors at the NEC meeting.
“As for the issue of the price of PMS, it is a work in progress. The governors are to discuss this on Thursday at the National Economic Council and hopefully there will be a way out of the situation,” he said.
Mr Ngige said that organised labour also handled negotiations on the topic of electricity price tariffs and would continue negotiations on the topic.
Meanwhile, the NLC President, Mr Ayuba Wabba, said that Labour was still not in full agreement with the report on PMS pricing.
“This means that we import 100 per cent of all the PMS used in the country, whereas we have refineries” he said.
“The reports were presented and we pointed out areas that we are not comfortable with and also made some suggestions which will form the basis of decisions on the matter,” he added.
What you should know
Nigerian National Petroleum Corporation (NNPC) last week assured organised labour and Nigerians that there was no plan to increase the price of Premium Motor Spirit (PMS), otherwise known as petrol, in the month of February.
FCCPC to begin electricity billing enforcement
The Federal Competition and Consumer Protection Commission says it will commence enforcement of the NERC billing cap order.
The Federal Competition and Consumer Protection Commission (FCCPC) announced that it will launch a billing capping order enforcement of the Nigerian Electricity Regulatory Commission (NERC) to protect Nigerian consumers.
This was disclosed by Mr Babatunde Irukera, the Executive Vice Chairman of the commission in an interview with NAN on Sunday in Abuja. He disclosed that the scheme was necessitated by multiple customer complaints on billing.
“There are certain industries that require special treatment, one of them is electricity,”he said.
He added that the Commission plans to implement stronger enforcement in 2021 and has commenced talks with the NERC for it.
“Secondly, we want to plan a more strategic approach to intervening in the complaints.
“And so through the year, periodically, we take some of our teams to locations where we have seen that there are a lot of complaints and spend some time there ensuring that DisCos address complaints to make sure that issues that people are dissatisfied with are resolved.
“That is a very important one for that sector this year,” Irukera said.
What you should know
- Recall it was reported that the Nigerian Electricity Regulatory Commission (NERC) announced that 62.63% of electric customers in Nigeria were under the estimated billing package as at September 2020.
- The Federal Government also revealed that electricity consumers who paid for meters under the Meter Asset Provider (MAP) scheme, will have a refund of their money.
World Bank to boost Nigeria’s power distribution with $500 million
World Bank has approved $500 million to support DisCos in Nigeria.
The World Bank has approved $500 million to support Nigeria in improving electricity distribution in the country.
This was disclosed by the global financial institution firm via a statement seen by Themoneymetrics on Friday.
In the statement, Shubham Chaudhuri, World Bank’s Country Director, explained that the project will help boost electricity access by improving the performance of the Electricity Distribution Companies (DisCos) through a large-scale metering program desired by Nigerians for a long time.
Also, financial support would be provided to private distribution companies only on achievement of results in terms of access connections, improved financial management and network expansion.
Chaudhuri said, “Improving access and reliability of power is key to reduce poverty and unlocking economic growth in the aftermath of the global COVID-19 pandemic.
“The operation will help improve the financial viability of the DISCOs and increase revenues for the whole Nigerian power sector, which is critical to save scarce fiscal resources and create jobs by increasing the productivity of private and public enterprises.”
He added that the Nigeria Distribution Sector Recovery Program (DISREP) will help improve service quality, as well as the financial and technical performance of distribution companies by providing financing based on performance and reduction of losses.
What it means
The World Bank initiative will ensure that the DisCos make necessary investments to rehabilitate networks, install electric meters for more accurate customer billing and to improve quality of service for those already connected to the grid.
It will also help strengthen the financial and technical management of DISCOs to improve the transparency and accountability of the distribution sector.
The program will reduce the CO2 emissions of the Nigerian power sector by reducing technical losses, increasing energy efficiency, replacing diesel and biomass with grid-electricity, and investing more in on- and off-grid renewable energy.
What they are saying
Nataliya Kulichenko, Task team leader for the project, said,
“The program will only be eligible to those DISCOs that transparently declare their performance reports to public with actual flow of funds based on strict verification of achieved performance targets by an independent third party. The program would also make meters available at affordable prices to all consumers in Nigeria, a long pending demand of Nigerians.”
What you should know
- About 85 million Nigerians don’t have access to grid electricity. This represents 43% of the country’s population and makes Nigeria the country with the largest energy access deficit in the world.
- According to World Bank, the lack of reliable power is a significant constraint for citizens and businesses, resulting on annual economic losses estimated at $26.2 billion (₦10.1 trillion), which is equivalent to about 2% of GDP.
- According to the 2020 World Bank Doing Business report, Nigeria ranks 171 out of 190 countries in getting electricity and electricity access is seen as one of the major constraints for the private sector.
Follow us on Twitter
VP Osinbajo calls for provision of capital to grow businesses for long term
Demand for Bitcoin is growing high amid tightened supply
Sanwo-Olu says construction work on Fourth Mainland Bridge to start end of 2021
Ethereum whales increase their Ether holdings by 84%
How to register for FG’s N75 billion MSME survival funds
Cardi B accidentally leaks her nude photo amid whirlwind birthday festivities (18+)
Subscribe to Blog via Email
BILLIONAIRE WATCH7 days ago
Bill Gates says he doesn’t own Bitcoin, remains neutral about crypto asset
BILLIONAIRE WATCH7 days ago
World’s richest man, Elon Musk says Ethereum and Bitcoin is looking expensive
Cryptocurrency News7 days ago
Unknown whale transfers $256 million worth of Bitcoin
Coronavirus7 days ago
Russia approves its third Covid-19 vaccine
NEWS6 days ago
BREAKING: Six Feared Dead As Nigerian Air Force Plane Crashes In Abuja
Business6 days ago
Update: Abuja crash: Chief of Air Staff orders immediate investigation, reveals 7 lives were lost
CRYPTOCURRENCY6 days ago
Motley Fool reveals plan to buy $5 million worth of Bitcoin
NEWS6 days ago
Billiri crisis: Buhari calls for parties to exercise maximum restraint