25 Oct

Daily Watch – NNPC committed to a ‘wet’ Christmas, Fidelity enjoys rollicking 2017

  • The NNPC relies heavily on swapping its crude for products such as gasoline as its refineries struggle to run, but an official said its access to oil is limited. While other importers also supply the country with fuel, Nigeria caps its gasoline prices, preventing private importers from bringing the product in when international prices exceed local ones. The swap programme accounts for as much as 90 percent of gasoline imports, Reuters reports quoting industry sources. “The entire NNPC organisation is focused on ensuring that there are no queues and that the country stays wet,” said Henry Ikem-Obih, group executive director and chief operating officer for downstream operations with NNPC. He added it was “the key objective, all the way from the president to the minister”. Ikem-Obih said the NNPC was working to find private capital to help revamp its refineries and fix its pipelines and depot system to help it produce more fuel. He said only about 75 percent of its 5,120-km pipeline network was operational, but much of it was undergoing repairs.
  • According to a Senate ad hoc committee report, 25 government agencies failed to remit ₦1.695 trillion revenue to the Consolidated Revenue Fund. The committee said the NNPC ran a ₦3.115 trillion deficit between 2012 and 2016. The committee said more than 600 agencies were involved but listed 92 of them. The committee, led by Olamilekan Adeola, was mandated by the senate to investigate all agencies and institutions of government charged with the responsibility of generating, collecting, accounting and remittance of internally generated revenue. According to the committee, the total revenue generated by these agencies between 2012 and 2016 was ₦21.5 trillion.
  • The maximum electricity generated nationally on 21 October reached 4,722 MW, but 2,329 MW was not available to supply about seven million electricity users, Daily Trust reports. The lowest generation that day was 3,523 MW while the total capacity for the 23 operational GenCos stood at 7,590 MW. The GenCos comprise three hydropower plants and 20 gas-based plants. The demand forecast for electricity usage in Nigeria remains at 17,720 MW, about 10,000 MW more than current generating capacity. Using the prevailing peak generation rate, the power sector requires an operational 13,000 MW generation to meet the electricity demand forecast, a daily operational report by the TCN shows.
  • Addax Petroleum says it has extended its contract with Sendje Berge FPSO, a subsidiary of BW Offshore for the use of Okwori oil field. In May, Addax had announced that it would end its contract with the company. The extension will be for a four-year fixed term with two one-year extension options, starting November 6, 2017. The revised and agreed terms include a new day rate which would be partially linked to oil production volumes and price. Addax said it had submitted the new terms to relevant authorities for their review and approval. The initial contract with the unit was supposed to last till 2018 with options to further extend till 2020. Earlier in 2017, BW won an arbitration case against Addax after launching a $52.6 million claim over a payments shortfall for the FPSO. The Sendje Berge FPSO is capable of processing 50,000 barrels per day of oil, along with 55 million cubic feet of gas and has the capacity to store 2 million barrels of oil.
  • Fidelity Bank posted impressive financial numbers for the nine months period ended September 30, 2017. In a note released at the NSE, the lender showed growth in key revenue lines and improved efficiency and regulatory ratios. Gross earnings grew by 17.9 percent to ₦130.1 billion, from ₦110.3 billion reported in the same period in 2016 while profit before tax rose by 65.1 percent, from ₦9.8 billion to ₦16.2 billion. CEO Nnamdi Okonkwo said the firm “showed strong growth in key revenue lines and a corresponding decline in our operating expenses, despite the high inflationary environment.” Total operating expenses declined by 2.6 percent to ₦47.5 billion, leading to the bank’s cost-income ratio dropping to 66.8 percent from 77.3 percent in FY2016. The bank’s nine-month PBT performance is higher than the annual profit numbers in any of the last four financial years. Fidelity serves over 3.8 million customers across 240 business offices and digital banking channels.