Latest news with #PetroleumIndustryAct
Zawya
11-04-2025
- Business
- Zawya
Reclaiming NNPC: A necessary reset to rescue Nigeria's oil industry
THE recent overhaul of the NNPC Limited board and management by President Bola Ahmed Tinubu is not merely an administrative reshuffle—it is a decisive intervention in the national interest, aimed at rescuing the country's most strategic public enterprise from systemic rot and institutional capture. The necessity of these appointments stems from the deeply troubling legacy of the previous management, under which NNPC allegedly degenerated into a citadel of opacity and operational inefficiency, despite the transformative intent of the Petroleum Industry Act (PIA) 2021. Previously, NNPC Limited failed to meet even the most basic standards of corporate governance and transparency expected of a commercially oriented national oil company. Year after year, billions of dollars in crude oil revenues were either unremitted, underreported, or misapplied under various opaque arrangements. The so-called fuel subsidy regime, for which NNPC served as the primary disbursing agency, became a fiscal sinkhole—characterised by gross overstatements, nonexistent verification mechanisms, and allegations of fictitious volumes and round-tripping. Meanwhile, critical investment decisions stalled, upstream output declined, and the country was left unable to take full advantage of high oil prices due to mismanagement and leakages. The transition of NNPC into a limited liability company was supposed to signal a new era of commercial discipline and accountability. Instead, the nation saw the entrenchment of old habits under a new corporate guise. The company evaded scrutiny by withholding audited statements, failing to engage meaningfully with shareholders—the Nigerian people—and resisting structural reforms under the guise of national security or market sensitivity. Related AfCFTA and Nigeria's port infrastructure An age of modern legends Silverbird Man of the Year Award as affirmation of Oyebanji's exemplary leadership This undermined investor confidence, constrained capital inflow into the sector, and left Nigeria's oil and gas value chain in a state of arrested development. At this critical juncture where Nigeria must stabilize its fiscal base, accelerate gas commercialisation, attract investment, and align with global energy transition trends, NNPC cannot continue to be a drain on the treasury or a bastion of unaccountability. The new board and management, appointed with careful consideration of technical competence, ethical standing, and regional representation, bring with them a renewed mandate: to clean house, rebuild trust, and reposition NNPC as a truly performance-driven national oil company. This moment marks the beginning of a long-overdue shift—from rent-seeking to value creation, from secrecy to transparency, and from institutional stagnation to strategic renewal. It is a necessary turning point for NNPC, and by extension, for Nigeria's economic future. Mohammed is a finance and public affairs analyst
Zawya
01-04-2025
- Business
- Zawya
Africa Energy Bank Gains Momentum with Capital Contributions from Nigeria, Angola and Ghana
In a significant development for Africa's energy sector, Nigeria, Angola and Ghana have fulfilled their capital commitments toward establishing the Africa Energy Bank (AEB). This milestone represents 44% of the minimum required funding from African Petroleum Producers Organization (APPO) members to initiate the bank's operations. Dr. Omar Farouk Ibrahim, Secretary General of APPO, announced this progress during the Congo Energy&Investment Forum last week. The AEB aims to finance oil and gas projects across the continent, addressing funding challenges posed by traditional Western financial institutions' reluctance to support fossil fuel initiatives due to environmental concerns. APPO has requested each of its 18 member states to contribute $83 million, targeting a total initial capitalization of $5 billion. Beyond Nigeria, Angola and Ghana, five additional member states – Algeria, Benin, the Republic of Congo, Equatorial Guinea and Ivory Coast – have pledged to make their payments, aligning with the bank's goal to commence operations in the first half of 2025. Nigeria remains sub-Saharan Africa's largest oil producer, offering significant opportunities in the oil and gas sector, including a 2025 bid round. The implementation of the Petroleum Industry Act has introduced regulatory reforms to enhance transparency and attract investment, driving major projects forward. Recent final investment decisions (FIDs) include TotalEnergies' $550 million Ubeta Gas Field Development and Shell's $5 billion Bonga North Project, yet additional financing is crucial to advancing Nigeria's gas agenda and unlocking its full potential in the energy transition. Angola, meanwhile, is actively diversifying its energy portfolio while advancing major deepwater developments, including TotalEnergies' $6 billion Kaminho Deepwater Project, Eni's Agogo Integrated West Hub and a limited public tender, with a long-term goal of increasing production to 2 million barrels per day. The country plans to make an FID on its first green hydrogen project by 2025 – a 600 MW development led by Sonangol in collaboration with international partners. Additionally, Angola is spearheading its first non-associated gas project, the New Gas Consortium, and undertaking a $12 billion expansion of the Angola LNG plant to enhance its gas monetization efforts. Ghana is strengthening its position as a leading oil and gas player with new commitments from Eni and Tullow Oil. In March, Eni and the Ghana National Petroleum Corporation signed an agreement to enhance offshore exploration, optimize existing assets and advance untapped reserves. This follows recent regulatory reforms aimed at improving fiscal terms, transparency and investment incentives. Tullow Oil also remains integral to Ghana's energy sector, with production from the Jubilee and TEN fields supporting economic growth and plans to launch a drilling program in May 2025 to bring new production online. Beyond hydrocarbons, Ghana is modernizing infrastructure, expanding energy access and diversifying into renewables to strengthen long-term energy security. Amid these developments, the establishment of the AEB is a strategic response to Africa's need for dedicated financial institutions that understand the continent's unique energy landscape. By providing tailored financing solutions, the Bank is poised to accelerate energy project development, enhance energy security and drive economic growth. As more countries contribute their capital shares, the bank is expected to play a pivotal role in unlocking investment, bridging financing gaps and ensuring sustainable energy expansion across Africa. With Nigeria, Angola and Ghana contributing their capital shares, the AEB is gaining momentum as a key financial institution for the continent's energy future. African Energy Week (AEW) 2025: Invest in African Energies – taking place from September 29 to October 3 in Cape Town – will serve as a vital platform to advance discussions on the AEB's role in mobilizing investment and bridging financing gaps. The conference will cover strategic topics including upstream oil and gas, downstream infrastructure, the energy transition and power industry developments. Notably, AEW 2025 will feature an energy finance stage dedicated to the latest updates from the AEB, investment trends and strategies to reduce barriers to capital access, ensuring that Africa's energy sector is well-positioned for sustainable growth. AEW: Invest in African Energies is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit for more information about this exciting event. Distributed by APO Group on behalf of African Energy Chamber.
Zawya
18-03-2025
- Business
- Zawya
Seplat's yield helps convince investors: IFR
Nigerian oil and gas company Seplat Energy squeezed pricing on a US$650m five-year non-call two bond issue on Thursday to nearly 30bp inside the sovereign's curve as investors overlooked the possible pitfalls of a recent acquisition to earn the carry on a trade that was part of a liability management exercise. The bonds were priced at par to yield 9.125%, at the tight end of IPTs of low to mid 9s. That final level was about 30bp inside where Nigeria's US$1.25bn 7.143% February 2030s were trading around the time of pricing. The sovereign's bonds had sold off during the course of the day, following further broader market volatility thanks to more tariff threats from US president Donald Trump, having opened around the 9.2% mark. The coupon on the new bond issue was much more attractive to investors than on the outstanding Seplat notes that were subject to a buyback as part of the transaction. Proceeds from the issuance will go towards an any-and-all tender offer for the company's US$650m of 7.75% senior unsecured notes due April 2026. "The tender was a nice technical," said a lead banker. The bond offering was Seplat's first since completing the US$800m acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil in December. While that deal helps Seplat (B/B–) diversify offshore and will lead to bigger production volumes and reserves, the company's cost structure will increase, with significant capex needs. Moreover, the company's outlook is clouded by which tax regime the MPNU assets will fall under – whether that is Nigeria's Petroleum Profits Tax regime, under which there's an 85% tax on chargeable profit, or whether they will be transferred to the more attractive Petroleum Industry Act tax regime, where the rate is 60%. "There's no clear picture on the potential conversion of licences from PPT to PIA, with management saying discussions for onshore started in 2022 and [are] only now reaching approval stage ... and only now starting discussions on offshore," said an EM credit analyst after the mandate was announced. If the offshore conversion is potentially still a few years away then that would have an impact on the company's free cashflow, he said. The conversion is "quite crucial to improving the free cashflow profile of the acquired assets via building a tax shield", he said. It was an issue brought up by investors during the roadshow, said the lead, and there was a realisation that, as Exxon hadn't recently invested in the assets, "capex will be high". However, he thought that Seplat was in a position to cope, saying: "Their leverage is low and the free cashflow generation of the business is high. The cashflows will be able to absorb the higher capex." The uncertainty over which fiscal regime the assets will ultimately fall under were, though, reflected in the pricing. Ideally, Seplat hoped that investors would use Angola's Azule Energy, which printed in mid-January at 8.125% a US$1.2bn five-year non-call two bond issue, which is still bid around reoffer, as their main reference point. "We tried to comp to Azule," said the banker. "It was a recent trade, decent size, fairly liquid." However, Azule's assets are all offshore, which is why it trades more than 250bp inside the Angola sovereign, while the fiscal regime in the Southern African nation is much more favourable to business interests. Seplat, in contrast, still has sizeable onshore assets, so while the company is "low levered and operated well, [it] is still highly exposed to Nigeria risk", said the EM analyst. He therefore thought the Nigeria sovereign was the best comparison. Another potential reference point was Kosmos Energy, though less so than Nigeria and Azule with its asset base offshore Ghana, Equatorial Guinea, and Gulf of Mexico. "Seplat has a bigger reserve base, higher reserve life, and stronger credit metrics," said Fitch analysts in the run-up to the deal. However, "these strengths are offset by Kosmos's more diversified asset base and more stable operating environment compared with Seplat's high exposure and concentration on areas characterised by geopolitical and security risk."
Associated Press
28-02-2025
- Business
- Associated Press
NUPRC Welcomes Court Ruling Upholding OML 46 Award to Halkin E&P, Reaffirming Confidence in Nigeria's Energy Sector
Bayelsa, Nigeria--(Newsfile Corp. - February 28, 2025) - The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has welcomed a landmark ruling by the Federal High Court in Yenagoa, Bayelsa State, which reaffirms Nigeria's commitment to transparent regulatory enforcement and due process in oil asset allocations. The ruling, which dismissed all legal claims against the re-award of OML 46 (Atala Marginal Oil Field) to Halkin Exploration and Production Limited (Halkin E&P), underscores the rule of law as the foundation for investment security in Nigeria's energy sector. To view an enhanced version of this graphic, please visit: This verdict upholds Nigeria's commitment to transparent and merit-based asset allocations, and President Bola Ahmed Tinubu's administration's pledge to depoliticize regulatory decisions. By prioritizing merit-based licensing and regulatory discipline, the administration is reinforcing Nigeria's reputation as a stable, rules-based investment destination, free from undue political influence. The Federal High Court ruling, delivered by Justice Ayo Emmanuel, confirmed that Bayelsa Oil Company Limited lacked the legal standing to challenge the Federal Government's re-award of OML 46 to Halkin E&P. The court dismissed the case in its entirety, ruling that it was statute-barred under Section 2 of the Public Officers Protection Act and Section 307 of the Petroleum Industry Act (PIA) 2021, which clearly define time limits for contesting oil asset allocations. By upholding the integrity of Nigeria's regulatory and legal processes, this ruling sends a strong signal to the international investment community that Nigeria remains committed to protecting legitimate investors and ensuring fair and transparent asset governance. Under the leadership of Chief Executive Engr. Gbenga Komolafe, the NUPRC has played a pivotal role in ensuring compliance and enforcing due process in asset management. The Commission's Seven Pillars of Divestment Strategy, which prioritizes lease enforcement, community engagement, and ESG compliance, has been instrumental in revoking non-performing leases and reallocating assets like OML 46 to technically and financially capable operators. Chikaosolu Ojukwu, S.A.N., legal counsel for the NUPRC, described the ruling as a significant win for Nigeria's oil and gas industry, stating: 'This judgment reinforces Nigeria's legal and regulatory framework for upstream oil and gas operations. It demonstrates that the judiciary upholds due process and protects legitimate investors. Regulatory enforcement ensures that asset allocations remain transparent and fair, strengthening investor confidence in Nigeria's energy sector.' With this ruling, Nigeria has further solidified its reputation as a stable and investable energy jurisdiction, where asset allocations are governed by due process, regulatory compliance, and operational capability. This outcome reassures global investors that Nigeria is fostering an energy market driven by transparency, accountability, and performance. With full legal clarity restored, Halkin E&P is now positioned to advance the development of OML 46, contributing to Nigeria's economic growth and energy security objectives. The company's strategic development plans align with NUPRC's broader industry vision, including: The construction of a 2,000-barrel modular refinery, supporting Nigeria's fuel security and local refining capacity. The launch of a gas processing plant, aimed at reducing gas flaring and advancing Nigeria's decarbonization efforts. Expansion into renewable energy, including solar and hybrid power projects in host communities, supporting Nigeria's clean energy transition goals. These initiatives reflect Nigeria's commitment to energy diversification, sustainable resource development, and maximizing the potential of its upstream sector. As Nigeria advances its upstream energy strategy, the NUPRC remains committed to regulatory excellence, investment protection, and fostering a globally competitive oil and gas sector. Media Contact: 09044067715
