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Sustainable Dividends: Forte Oil Shareholders Task New Management

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Sustainable Dividends: Forte Oil Shareholders Task New Management
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Shareholders of Forte Oil (FO) Plc on Tuesday, 25th June, 2019 tasked the new management of the company on continuous payment of dividend and adherence to good corporate governance.

The shareholders made the demand in an interview with the News Agency of Nigeria (NAN) in Lagos on expectations from the new management team following Mr Femi Otedola’s divestment.

Mr Moses Igbrude, the Publicity Secretary of  Independent Shareholders Association of Nigeria (ISAN), told NAN that the new management needed to map out strategies to ensure higher returns.

Igbrude said that shareholders were expecting continuous returns on their investments and ensure adherence to corporate governance rules and market regulations.

“I appeal to them to manage the company properly, effectively and efficiently as expected in order to ensure yearly payment of dividend,’’ he said.

Igbrude said that the money realised from the sale of the power unit should be properly utilised to add value to the company.

According to him, the company should focus on the lubricant aspect of the business because that is where there is reasonable margin compared to the petrol business.

“They should make sure that their service stations look attractive, ensure high quality products and ensure the integrity of their pumps are superb so that customers will make them the first choice when buying fuel,’’ Igbrude said.

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Mr Boniface Okezie, the National Coordinator of Progressive Shareholders Association of Nigeria (PSAN), said that the company needed to improve on its dividend payment to ensure price rally on the nation’s bourse.

Okezie said that the company should ensure prompt release of both quarterly and audited yearly results to avoid unnecessary sanctions from the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC).

The shareholder-activist said that the investing public and the stockbrokers should be carried along in the company’s operations through regular releases of information.

NAN reports that FO on June 20 appointed new Chief Executive Officer and Chief Financial Officer following the completion of the sale of Mr Femi Otedola’s shares in the firm’s downstream operations.

The firm announced that Mr Olumide Adeosun and Mr Moshood Olajide had been appointed as the Chief Executive Officer and Chief Financial Officer, respectively, after the resignation of Mr Akin Akinfemiwa and Mr Julius Omodayo-Owotuga.

Forte Oil, in a notice filed with the Exchange said Ignite Investments and Commodities Limited, led by Prudent Energy Services Limited, had completed the acquisition of Otedola’s 74.02 per cent shareholding.

According to the firm, the completion is consequent upon Ignite receiving all the necessary approvals from SEC, NSE and fulfilling all relevant terms and conditions attached to the Share Purchase Agreement.

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It said, “As a result of this and further to the announcement on Dec. 28, 2018, Ignite will take over controlling stake in Forte Oil Plc, the downstream company“. 

Traders seek urgent repair of Lagos-Badagry expressway
Some traders plying Lagos-Seme road have urged the Federal Government to repair the Lagos-

Badagry expressway and lift the ban on importation of vehicles through the land borders.

The traders made the appeal in separate interviews with the News Agency of Nigeria (NAN) in Lagos on Tuesday.

A commercial driver plying between Seme and Cotonou,  Mr Joy Sagbohan, said the deteriorating state of the road had affected his business.

“Many of our customers now prefer to go through Idiroko to Cotonou instead of going through Seme border.

“Before the road got worse, I usually realised between N20, 000 to N15, 000 daily, but now I hardly realise between N2, 500 to N1, 500 after fueling the bus.

“It is difficult for me to repair my vehicle due to the low income as a result of bad roads from Lagos to Badagry.

“My colleagues and I are facing a lot of challenges encountering immigration officers,  but we have a good relationship with the Nigeria Customs Service (NCS); they do not inconvenience us in any form,” Sogbohan said.

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Another driver,  Mr Mamudu Paraiso, urged Nigerian government to caution some its agencies to stop extorting travellers at the border areas.

“Since the Economic Community of West African States has told the two countries to encourage free movement from the border areas, some Nigeria regulatory agencies still extort money to allow movement into Nigeria area.

“Since the borders have been closed to importation of vehicles, car dealers are no longer coming to board our vehicles to Cotonou,” Paraiso said.

He urged government to open the border posts for importation of vehicles to enable traders and commercial motorists to earn some income to feed their families.

Mrs Nofisat Kareem, a former cosmetics dealer who ended up as a pure water seller, said she change her business because she could no longer make profit from cosmetics.

She said she was trading between Lagos International Trade fair areas to Seme.

Kareem said she had no option than to go into pure water business to enable her feed her children.

Another trader, Mrs Mercy Jude,  also lamented the poor state of Lagos-Badagry express road, saying  that she used to  travel once a week on the route to buy Dettol disinfectant in Lagos.

She urged government to look into multiple checkpoints along the routes mounted by Nigerian officials extorting money from the traders.

Oil & Gas

FG Awards Licences for 161 Marginal Fields as 13 Remain Dormant

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has awarded Petroleum Prospecting Licences (PPLs) to 161 successful 2020 marginal fields awardees.

The commission also officially unveiled the Host Communities Development Regulations and model Petroleum Prospecting Licences (PPLs).

Chief Timipre Sylva, the Minister of State Petroleum Resources, at the unveiling and licences presentation on Tuesday in Abuja said the maiden presentation of the PPL was part of the implementation of Petroleum Industry Act (PIA), 2021.

This is as the  Federal Government revealed that 13 out of the 30 marginal fields awarded since 1999 were not producing crude oil, as only 17 of the fields were currently meeting the target of crude oil production, adding that a total of N202.91bn was raked in by the government from the just concluded 2020 marginal field bid round.

The award, the government said  was pursuant to the provisions of the Petroleum Industry Act 2021.

This came as successful awardees, such as Matrix Energy Group, Petrogas Energy, among others, promised to begin oil search from the fields in earnest to boost the country’s crude oil production.

In his address at the event, the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, stated that one of the major tasks inherited by the NUPRC upon its inauguration last year, was the need to conclude the 2020 bid round.

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“Consequently, we pursued the matter frontally and are delighted to inform you that the exercise which commenced in June 2020 is being concluded today,” he stated.

Komolafe explained that historically, the marginal fields award initiative began in 1999 and was borne out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.

He said, “Besides, the initiative was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.

“Since its inception, a total of 30 fields have been awarded, with 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010.

He added, “Ten years after, in 2020, 57 fields were put up for bidding. Again, it is noteworthy that the 2020 marginal field bid round exercise in respect of which PPLs are being issued today has attracted government revenue of about N200bn and $7m (N2.91bn at official exchange rate of N415.64/$) respectively.”

Speaking to journalists on the sidelines of the event, the Group Chief Executive Officer, Matrix Energy Group, Adisa Aliu, said successful investors in the bid round would commence oil search as fast as possible.

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Aliu, who’s company emerged successful in the exercise, said the contributions of marginal field operators would help the country in meeting the monthly oil production quota approved for Nigeria by the Organisation of Petroleum Exporting Countries.

For several months running, Nigeria has been failing to meet its crude oil production quota approved by OPEC, a development that has further depleted the country’s revenue from oil.

“We are delighted at the conclusion of this exercise and we are ready to contribute our quota in assisting to meet the target approved for Nigeria and as well help in shoring up revenue for our county,” he stated.

He, however, noted that security should be improved in the Niger Delta, as this had been a challenge to not just the production of crude oil, but to the meaningful progress of the sector.

Meanwhile, the NUPRC in its presentation at the event, stated that the passage of the Petroleum Industry Act had brought an end to the era of marginal field awards.

Section 94(9) of the Act stated that “No new marginal field shall be declared under this Act”.

The agency stated that the Minister of Petroleum Resources shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act.

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It urged the new investors to hit the ground running in developing their awarded assets in line with industry best practices.

“Also, we shall continue to provide a predictable and enabling regulatory environment to operators in line with our technical and commercial statutory

mandates with a view to optimising the development and exploitation of the nation’s hydrocarbon resources,” it stated.

It said it was worthy of note that the average price of crude oil in recent months had been above $100/barrel, adding that investors in the fields should take advantage of this upward swing in market fundamentals, caused by the Russian/Ukraine conflict.

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NEWS

Breaking: Reps Raise Crack Team to Probe Oil Subsidy Regime Under Buhari

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By Ubong Ukpong, Abuja

The House of Representatives yesterday, raised a crack adhoc committee, to Probe the petroleum Products subsidy Regime in the last five years, from 2017 to 2021

The committee was given eight weeks to carryout this investigation and report back to the House for further legislative action.

The decision was sequel to a motion on the “Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021”, brought before the Honda by Hon.

Sergius Ose Ogun.

The lawmaker had said that his motion was informed by section 88 (1) and (2) of the Constitution of the Federal Republic of Nigeria (As Amended) , which empowered the National Assembly to conduct investigations into the activities of any authority executing 

or administering laws made by the National Assembly;.

He also noted that Section 32 of the Petroleum Industry Act, 2021 saddled the Petroleum Midstream and 

Downstream Regulatory Authority with the task of regulating and monitoring technical and commercial 

midstream and downstream petroleum operations in Nigeria.

Ogun informed the House that as of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day in order to enable it to provide petroleum products for local consumption.

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He was concerned that as at 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per 

day, however, their capacity utilization began to nosedive and eventually fell completely to zero due to the 

ineffectiveness and alleged corruption of critical stakeholders in the value chain.

The lawmaker said he was aware that due to the decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.

He said he was further aware that component costs in the petroleum products subsidy value chain claimed by the NNPC was highly over-bloated while the transfer pump price per litre used by the NNPC in relation to PPMC was 

underquoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per 

litre translates into over 70 billion naira a month or 840 billion naira a year.

The legislator worried that the consumption rate of Premium Motor Spirit (PMS) was 40million to 45million litres per day, however, the NNPC used 65 million to 100 million litres per day to determine subsidy as discoverable 

from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).

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He also worried that the subsidy regime has been unscrupulously used by the NNPC and other critical 

stakeholders to subvert the nation’s crude oil revenue to the tune of over 10 billion US dollars, with records 

showing that as at 2021, over 7 billion US dollars in over 120 million barrels have been so diverted.

The lawmaker was disturbed that “there exists evidence that subsidy amounts are being duplicated, thus subsidy is charged against petroleum products sales in the books of NNPC as well as against crude oil revenue in the books 

of NAPIMS to the tune of over N2 trillion.”

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Oil & Gas

Wabote Tasks Security Agencies on Enforcement of Nigerian Content in Oil and Gas Sector

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From Tayese Mike, Yenagoa

The Nigerian Content Development and Monitoring Board (NCDMB) has tasked security agencies in the country to intensify their efforts in the enforcement of the Nigerian Content in the oil and gas sector in other to boost the local participation in the sector.

Executive Secretary of the board, Engr Simbi Wabote, stated this during a sensitization workshop for law enforcement agencies on the approach to Nigerian Content enforcement in the oil and gas industry yesterday in Yenagoa.

He explained that the workshop becomes imperative to sustain the achievements made by the board in boosting indigenous participation in the oil and gas industry.

He said it was significant to enlighten stakeholders on how to encourage the indigenous participation in the oil and gas sector.

“With the results we have been able to achieved in boosting indigenous participation in the oil and gas industry, it is pertinent to enlighten law enforcement agent on how to enforce the NOGIC act.

“We have custom, EFCC, ICPC, DSS, and these are all law agents that all have a role to play as we implement the NOGIC act, that is why we schedule the workshop,” he said.

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Head, Legal Services of NCDMB, Barrister Naboth Onyesoh, said the essence of the workshop was to bring in relevant stakeholders to support local content in the implementation and enforcement of the Nigerian Content act.

The workshop is part of the national economic agenda gear towards employment, creating industrialization, ensuring capital retention in the country and so many other activities revolving around the oil and gas industry.

Representatives of the security operatives from Nigerian Army, Customs, police, EFCC, ICPC, DSS, and several others attended the workshop.

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