05 Jul

Daily Watch – NNPC saves billions, Etisalat gets new board

  • The NNPC says it has saved $2 billion in the past year by renegotiating its upstream servicing contracts, as it tries to reduce high overheads. NNPC is attempting to revive the oil industry on which the country’s economy depends, and which the government relies on for roughly two-thirds of its revenue. “For the upstream, cost reduction and efficiency are key features that we will pay attention to,” said GMD, Maikanti Baru. The company has also cut operating costs for oil production to $22 a barrel from $27 per barrel, Baru said. Average daily production of oil and condensates has been about 1.88 million barrels since the beginning of the year, with the Forcados and Qua Iboe terminals running again after being taken down by attacks last year, he said. That puts Nigeria on target to exceed its 2017 goal of producing an average of 2.2 million barrels of oil and condensate a day, Baru said.
  • The CBN and the NCC have intervened to save Nigeria’s fourth largest telecoms firm from collapse after talks with local banks to renegotiate a $1.2 billion loan failed, a regulatory source told Reuters. Etisalat Nigeria is the biggest foreign-owned victim of dollar shortages plaguing the country due to lower oil prices and economic recession, leaving the company struggling to make repayments to lenders and suppliers. The NCC said Etisalat Nigeria and its creditors have reached a resolution on key issues on the indebtedness and that a transition process was continuing on mutually agreed terms. It said the resolution would ensure that Etisalat Nigeria was maintained as a going concern regardless of changes in the company’s shareholders. As a result, the company has appointed the central bank’s deputy governor Joseph Nnanna as chairman, Boye Olusanya as chief executive and Funke Ighodaro as chief financial officer, Etisalat Nigeria’s vice president for regulatory affairs, Ibrahim Dikko, told the news agency. Reuters quotes the unnamed source as saying that the CBN had provided assurances to lenders but had not invested any funds, adding that the company’s minority owner, Abu Dhabi’s Etisalat, has indicated it may pull out of Nigeria following the debt crisis but has not made a decision on the use of its brand in the country. On Monday Chief Executive Matthew Wilsher resigned after Chairman Hakeem Belo-Osagie departed. An NCC source said the new interim board made up of six members will operate for six months and will include a member representing the shareholders.
  • Nigeria is hiring U.S. technology giants such as Oracle and Microsoft as the government invests more to save costs and fight corruption. An initiative led by Oracle has enabled state authorities to remove 50,000 so-called ghost workers, or fake entries, from the payroll, according to a presidency statement June 29 and following Oracle’s decision to open an office in Abuja in May. “The government’s digitisation drive is imperative in cutting out the middle man,” said Hakeem Adeniji-Adele, director of public sector work at Microsoft Nigeria. The Industry, Trade and Investment ministry is in talks with Microsoft to improve e-services, which ties into the government’s objective to improve its World Bank Ease of Doing Business ranking, Constance Ikokwu, communication adviser to Minister Okey Enelamah told Bloomberg.