08 Jan

Daily Watch – 70% of FG websites hosted abroad, Sovereign Green Bond over-subscribed

  • Civic society group, the Human and Environmental Development Agenda, HEDA, has requested for clarification on the renewal of some oil mining leases in possession of Mobil Producing Nigeria. In a FOI request issued to the Managing Director of Mobil Producing Nigeria Unlimited, dated January 2, 2018 and signed by HEDA chairman, Olanrewaju Suraju, the organisation said it wanted clarity on a forensic audit report regarding the renewal of three Oil Mining Leases (OMLs 67, 68 and 70) for Mobil Producing Nigeria for $600 million. According to HEDA, the renewal of the OMLs was shrouded in controversy as to the circumstances surrounding the payment and the amount paid, the organisation alleging that an MPN and NNPC valuation put Mobil’s 40 percent share of the $6.375 billion lease at $2.55 billion, which Mobil rejected and paid $600 million for the renewal of the three oil blocks which have a combined output of 580,000 barrels of crude oil per day according to news reports and documents examined by HEDA.
  • Fitch says Tier 2 Nigerian banks may struggle to remain profitable in 2018. In a statement released on Thursday, Fitch said reduced treasury bill issuance will affect the profitability of banks. “However, some second-tier banks with a 9M17 operating ROAE of 4%-6% may struggle to remain profitable in 2018.” The agency said Nigerian banks were highly reliant on the interest income from treasury bills in 2017 as it made up 30 percent of their income. “The slowdown in T-bill issuance marks a change of strategy as the government looks to increase its financing from external sources and longer-dated domestic issuances. The agency said it expects the big banks like Guaranty Trust Bank, Access, UBA, Zenith and First Bank to be able to withstand the pressure.
  • The DMO says the Sovereign Green Bond recorded a 0.94 percent oversubscription, making it the fifth FG bond to record an oversubscription in eights months. In June 2017, the federal government issued a $500 million Eurobond which was oversubscribed by almost four times. In the same month, the diaspora bond, listed on the London Stock Exchange, was oversubscribed by 130 percent. In September, a ₦100 million Sukuk was issued to fund construction of 25 roads across the country and this was oversubscribed by six percent. In November, the FG issued a $3 billion Eurobond to fund capital projects in the 2017 budget and refinance domestic debts. In a statement released on Thursday, the DMO said, “the total subscription received was ₦10.791 billion compared to the ₦10.69 billion offered”. The DMO said banks, pension funds, asset managers and retail investors subscribed to the Green Bond. The bond offers a tenor of 5 years at a 13.48 percent interest rate.
  • The NNPC posted a group operating loss of ₦68.84 billion between January and October 2017. According to the latest oil and gas report from the firm, the corporation made group revenue of ₦3.05 trillion and expenses of ₦3.119 trillion during the period under review. Two NNPC subsidiaries, the Pipelines and Product Marketing Company and Nigerian Pipelines Storage Company recorded the highest losses in the group, a development that eroded the profits made by other subsidiaries. Two of the country’s refineries, the Kaduna Refining and Petrochemical Company and the Warri Refining and Petrochemical Company, recorded deficits of ₦24.3 billion and ₦14.95 billion respectively. The Port Harcourt Refining Company, on the other hand, posted a ₦28.65 billion surplus. The report said in October 2017, products pipeline breaks stood at 126 points, of which 116 pipelines were vandalised, with the Port Harcourt-Aba and Aba-Enugu pipeline segments accounting for almost 80 percent of the vandalised points. Crude oil production averaged 1.93 million barrels per day in September 2017, a slight decrease compared to August 2017 production, but up 17.11 percent relative to September 2016.
  • About 70 percent of Nigerian government websites designated as either gov.ng or mil.ng are hosted in other countries, according to data from the Nigeria Internet Registration Association. The data showed that majority of the sites were hosted in the United States, about 59 percent; with 3.4 percent in the United Kingdom; 3.3 percent in the Netherlands; and 1.3 percent in other countries. Only 30 percent of the sites are hosted within the country.