25 Jan

Daily Watch – Egina arrives amid NASS audit cloud, China bilateral trade hits $12.3 billion

  • The NNPC board will decide on investors for its three major refineries this month. NNPC launched a bidding process in 2016 to find partners to overhaul ailing refineries that produce very little petrol because of decades of mismanagement, leaving OPEC member Nigeria reliant on imported oil products. The three existing refineries – in Port Harcourt, Warri and Kaduna – could add a total capacity of 450,000 barrels per day if refurbished. The project requires an investment of $2 billion. “We are pushing towards the final selection of our financiers and we expect that, when that is done, we’ll get the agreements and present them to our board, meeting this month, to secure their endorsement,” NNPC’s head, Maikanti Baru, said. “Once we have the funding, we would start the rehabilitation of the refineries towards a 90 per cent capacity utilisation … before the end of 2019,” No details of any potential financiers were provided although the government has previously said it was in talks with Chevron, Total and ENI.
  • China says its bilateral trade with Nigeria in 2017 stood at $12.3 billion. Deputy Chinese Ambassador to Nigeria, Lin Jing, said that the trade figure recorded was from January to November 2017 and represented a 30 percent increase compared to the same period of 2016. “The bilateral trade is a very important mechanism to boost our economic relationship. “That represents more than 30 percent of increase compared to the same period of 2016; we believe that by maintaining our normal trade volume, our overall economic relation and cooperation will be boosted and give impetus to our overall relationship,” Lin said. Nigeria and China established formal diplomatic relations in February 1971 and Nigeria is the biggest destination for Chinese investment in Africa, the second largest export market and the third largest trading partner of the Asian nation in Africa.
  • The FAAC distributed the sum of ₦655.17 billion to the three tiers of government as statutory allocations for the month of December 2017, ₦45.7 billion higher than the ₦609.9 billion allocated in November. Finance minister, Kemi Adeosun, who presided over the four-hour meeting, said after deducting the costs of collection to the Nigeria Customs Service and the FIRS, the FG got ₦252.54 billion; the 36 states received ₦128.09 billion; while the 774 local government councils got ₦98.75 billion. In addition, Adeosun said the sum of ₦47.73 billion was given to the oil-producing states as derivation funds. In terms of VAT receipts, she noted that after making statutory deductions to the FIRS, the three tiers of government shared ₦80.60 billion, with the FG receiving ₦13.09 billion; state governments, ₦40.30 billion; and local governments, ₦28.21 billion. Gross revenue generated during the period at ₦540.44 billion, lower than the ₦549.53 billion received in the previous month by ₦9.08 billion. Adeosun said accruals into the Excess Crude Account remained at $2.31 billion.
  • The Senate Ad Hoc Committee on Investigation of the Local Content Elements and Cost Variations of the $16 billion Egina Offshore Oil Project has ordered that the accounts of the project be audited. The committee said the audit was to ensure that the country was not trapped in perpetual debt without any benefits from the project. The project, which commenced in 2013 and is being undertaken by Total Upstream Nigeria, is almost 90 percent completed. The committee chairman, Senator Solomon Adeola, alleged that the project, estimated to produce 200,000 bpd, had not been audited in any form since its commencement. A statement from his office said there was the need for a value-for-money audit of the project, both technical and financial and the investigation would also show the level of compliance with local content and other applicable laws. This comes as the Egina FPSO vessel, built and transported by Samsung Heavy Industries, arrived Nigeria from South Korea for oil production on Tuesday.
  • Risk Management Group, a British company was among five companies that failed a security clearance to manage an automated value added tax collection project in Nigeria’s telecommunications industry. Technology Times reports that the FIRS had requested that security clearance is carried out on the five companies because they sought to be granted access to restricted information during the project. The project is part of the implementation of the Integrated Tax Administration System, a programme to increase tax revenue in the country. The companies investigated are 3R and Teramatrix Technologies PVT, its technical partner; African Advantage Telecom; Active Solutions Integrated Synergy and Active Intelligence, its technical partner; Strataflex and the Risk Management Group UK, its technical partner. The FIRS will refresh bids for the project later this year.