Naira exchanges for N1,600/$ in parallel market

The Naira yesterday appreciated to N1, 600 per dollar in the parallel market from N1,615 per dollar on Wednesday.

However, the Naira depreciated to N1,586.11 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM. Data from FMDQ showed that the indicative exchange rate for NAFEM rose to N1,586.11 per dollar from N1,543.84 per dollar on Wednesday, indicating N42.27 depreciation for the naira.

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The volume of dollars traded (turnover) in NAFEM fell by 30 percent to $120.2 million from $171.79 million traded on Wednesday. Consequently, the margin between the parallel market and NAFEM rate narrowed to N13.89 per dollar from N71.16 per dollar on Wednesday.

Naira exchanges for N1,600/$ in parallel market

Just in: Oando completes acquisition of Agip Oil for $783m

Oando Plc has successfully completed its acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni for a total consideration of $783 million.

The company confirmed via a press release that the deal has been completed representing a significant milestone in Oando’s long-term strategy. The transaction includes reimbursement and consideration for the asset.

The acquisition is expected to solidify Oando’s position in Nigeria’s oil and gas sector, enhancing its operational footprint and expanding its upstream capabilities.

Recall the Italian oil major, Eni, reported it had received the approval of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to sell its unit, Nigerian Agip Oil Company (NAOC), to Oando.

Eni said NAOC focuses on onshore oil and gas exploration and production as well as power generation in Nigeria.

Key Transaction Details

Increased Stake in Key Oil Blocks: The acquisition boosts Oando’s participating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 from 20% to 40%.

This expands Oando’s ownership in all NEPL/NAOC/OOL Joint Venture assets, encompassing 40 discovered oil and gas fields, of which 24 are currently producing.

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Enhanced Infrastructure Ownership:

Oando now has a stake in vital infrastructure, including approximately 1,490km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the KwaleOkpai power plants (960MW capacity).

This acquisition further strengthens the company’s infrastructure footprints in Nigeria.

Significant Increase in Reserves: Oando’s total reserves have jumped from 505.6 million barrels of oil equivalent (MMboe) to over 1 billion barrels, representing a 98% increase based on 2022 reserve estimates.

Immediate Cash Flow Impact: The transaction is expected to be immediately cash generative, significantly enhancing Oando’s financial position and cash flows.

Wale Tinubu, Group Chief Executive of Oando PLC, highlighted the significance of this acquisition as the culmination of a decade-long effort that began with Oando’s acquisition of ConocoPhillips’ Nigerian assets in 2014.

Tinubu stated, “This is a win for Oando and every indigenous energy player as we take our destiny in our hands and play a pivotal role in the next phase of Nigeria’s upstream evolution.”

He further emphasized Oando’s commitment to optimizing the acquired assets’ potential while maintaining a focus on responsible practices, sustainable development, and contributing to Nigeria’s goal of boosting oil production.

Oando has cautioned that while it believes the acquisition will yield significant benefits, the transaction involves inherent risks and uncertainties.

These include potential changes in project parameters, the future price of crude oil, and risks associated with international operations.

The company advised investors to consider these factors when evaluating its future prospects.

Despite the uncertainties, Oando remains optimistic about the acquisition’s potential to drive growth and value creation, particularly as it explores diversification opportunities in clean energy, agri-feedstock, and energy infrastructure.

Just in: Oando completes acquisition of Agip Oil for $783m

FG owes NNPCL N4.56tn for subsidising petrol price – FAAC report

The Nigerian National Petroleum Company Limited (NNPCL) has informed the Federal Account Allocation Committee (FAAC) of an outstanding of N4.56 trillion for selling petrol at a subsidized price between August 2023 and June 2024.

This is according to documents from FAAC meetings in July and August, which were seen by Nairametrics.

According to a report from a FAAC Post-Mortem Sub-Committee (PMSC) meeting, the outstanding amount is said to be unrecovered funds arising from exchange rate differentials on Premium Motor Spirit (PMS) importation.

The report read: “During the last FAAC Plenary meeting, the Sub-Committee reported that NNPCL claimed that the Federation was owing an unrecovered sum of N4,344,519,176,167.32 as of May, 2024 Federation Account arising from Exchange Rate Differentials. This amount has increased to N4,558,597,379,030.6 as of June, 2024.” 

RMAFC asks NNPC for more details 

While reconciliation efforts are ongoing to resolve the outstanding balance, the Chairman of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), who presided over the subcommittee meeting, has formally requested detailed information from NNPCL management.

This information includes the volume of PMS imported, the pricing structure, and sales values, to substantiate the weighted exchange rate applied in the billing.

The report noted: “Accordingly, reconciliation is ongoing; however, the Chairman of the Commission, who chaired the meeting, had written to NNPCL management requesting the volume, price and sales value to justify the weighted exchange rate.” 

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Concerned states seek clarification 

The NNPCL’s claim raised concerns among the commissioners of finance from various states, prompting a call for further clarity and accountability.

During the meeting, the Commissioner of Finance from Akwa Ibom State sought clarification on the massive debt claimed by NNPCL and inquired about potential resolutions to the financial burden.

The Accountant-General of the Federation (AGF) and a representative from NNPCL responded during the meeting.

A copy of minutes of the meeting seen by Nairametrics read: “Responding, the Accountant-General of the Federation (AGF) recalled that the matter was discussed at the FAAC Technical Session, held earlier in the day and the representative of NNPC Ltd explained that the company had approval to apply the ‘weighted average rate’ on PMS transactions in order to maintain its current price. She stated that the representative of NNPC Ltd also explained that, if the ‘floating rate’ was to be applied, the price of PMS would be higher than the current price. 

“In his comment, the representative of NNPC Ltd informed members that there was a Federal Government directive that the ex-depot price of PMS be kept at N524.99 per litre. He explained that for the company to sell at that price, it must have to obtain Forex at N600/$, which was not the case.” 

The Commissioner of Finance from Delta State expressed concerns about NNPCL’s decision to source U.S. dollars for transactions, particularly when the crude oil being sold was already denominated in the same currency. He emphasized the need for NNPCL to be more transparent and accountable in its operations.

Also, the Commissioner of Finance from Bayelsa State suggested that NNPCL should operate more independently as a corporate entity. He argued that this would allow the company to manage its transactions without frequent recourse to the Federation Account.

FG owes NNPCL N4.56tn for subsidising petrol price – FAAC report