07 Oct

Daily Watch – Benue looks to do coal power, AMCON loses to Capital Oil again

  • The NNPC says it will soon commence the first large-scale commercial biofuel venture as an alternative to fossil fuel. According to Babatunde Adeniran, the corporation’s group executive director, Gas and Power, the project was necessary because of the increasingly negative impact of fossil fuels on the environment. The corporation plans to cultivate jatropha plants along the borders of the over 5,000 kilometres of NNPC pipeline across the country. Jatropha is an environmental and economic agro-allied plant called binidazugu in the North, lapalapa in South West, okwa ekpu in the East and it has over 175 species. The plant could be used to produce biofuels which could serve as an alternative to diesel. It could also serve as a wind breaker and its use to create shelterbelts to control flooding, desertification and erosion is being explored.
  • Benue has approached NERC to grant it a licence to build a 10MW gas-fired embedded generation power plant. Governor Samuel Ortom, during a courtesy visit to NERC said the power plant will be built in partnership with a private investor, Contec Global. He stated that the plant will cost an estimated $18 million and would be dedicated to industrial layouts in the state to enable it to grow its economy. The Project Coordinator, Shashi Mozumder said the company was already working towards meeting some of the requirements for the award of the certificate of occupancy for the project site. The power plant will comprise of three General Electric 3.4MW turbines to be fuelled by gas transported with trucks from oil fields some 300 kilometres away from the project site.
  • The House of Representatives on Thursday condemned the charges Nigerians pay when they initiate ATM transactions outside their domiciliary banks, calling them “spurious.” The parliament, in a majority motion, said Nigerians have lost a significant amount of money to bank operators with little or no checks by the CBN. The CBN on September 1, 2014, reintroduced charges for ATM transactions, citing frivolous withdrawals and abuse by users and altering a 2012 arrangement in which the regulator resolved with the Bankers Committee to transfer the ₦100 fee at the time to issuing banks. The CBN said the loss for not collecting the ₦35 issuers’ fee from card users had imposed a substantial cost burden on banks, and consequently set new charges at ₦65 per transaction after the first three transactions of every month which attract no charges. Thursday’s resolution, which called for an investigation of the prevailing ₦65 tax rates, was sponsored by a Kogi representative, Yusuf Tajudeen. It has been forwarded to the House Committee on Banking and Currency.
  • The Federal High Court in Abuja, on Thursday, ordered AMCON to pay Capital Oil and Gas Limited ₦26.5 billion as contained in a 2013 consent judgment. Justice Abdul Kafarati held that the court had powers to enforce its judgment or that of any lower courts in the country. “An order is granted for AMCON to provide Trade Finance Facility in the sum of ₦16 billion for revamping of the plaintiff’s business and to pay the plaintiff’s trade creditors. “I also grant an order compelling the defendant to comply with the consent judgment and to make the additional sum of ₦10.5 billion available to the plaintiff. This money is the payment of sundry creditors who continue to threaten the plaintiff’s business,” Kafarati held. Kafarati also restrained AMCON from exercising any powers over Capital Oil and Gas and its assets, including attempts at processing any assignment or transferring same on behalf of the company. A Federal High Court in Lagos on May 6 struck out an AMCON suit against Capital Oil and Gas on these issues, calling it “premature.”
  • Diageo has scrapped plans to increase its stake in Guinness Nigeria due to tough market conditions, the drinks company said on Wednesday. The decision by Diageo, maker of Johnnie Walker Scotch and Smirnoff vodka, is the latest blow for Nigeria’s economy, which is headed for its first full-year recession in 25 years following a plunge in oil prices. Diageo last year said it planned to buy another 15.7 percent of Guinness Nigeria for up to ₦41.37 billion, raising its stake to 70 percent. At last year’s exchange rates, that would have been worth about $208 million. Diageo said on Wednesday it would not proceed with the offer, choosing instead to focus its resources on continuing to support Guinness Nigeria which it gave a $95 million loan to help it cope with dollar shortages. Guinness Nigeria shares were flat at ₦93 on the NSE on Wednesday. The shares are down 19 percent this year. Diageo confirmed that it “maintains a positive outlook” and “Nigeria remains a key strategic market.”
  • TNT Management (Bahrain) E.C has appointed Red Star Express Plc as its associate in Nigeria effective October 6, 2016. By this appointment, Red Star Express Plc is authorised to handle all TNT inbound and outbound packages in Nigeria including, but not limited to pickups, deliveries and customs clearance of courier materials and bulky freight packages. TNT International was recently acquired by American logistics giant, FedEx and this move is seen as a restructuring of its global operations.