Daily Watch – Otedola flogs Forte Oil, NNPC to resume oil exploration in Chad Basin

The NNPC will resume the search for crude oil in the Chad Basin as soon as it gets clearance from security agencies. The NNPC’s chief executive, Maikanti Baru, told Bala Mohammed, the governor of Bauchi state, that the prospects of finding oil in the Chad Basin were high because Niger Republic drilled over 600 wells and now they are producing while Nigeria has only drilled 23 wells in the region. Baru pledged the support of NNPC on the proposed Institute of Petroleum Studies to be established in Bauchi State University, and assured the governor of synergy between the institution and the Petroleum Training Institute, Warri, for exchange programmes and manpower development. The search for oil in the Chad Basin was suspended after a team of its Frontier Exploration Services and their consultants from the University of Maiduguri were attacked and some of them abducted on 25 July, 2017.

Aliko Dangote says Nigeria losses at least 300,000 metric tonnes of sugar to smuggling each year. Speaking at his company’s AGM in Lagos, Dangote said that smuggling in the sugar industry has hindered the employment of at least 250,000 Nigerians, which has led to economic sabotage. The negative trend, according to Dangote, made the firm’s 2018 business year very challenging. The Apapa gridlock was also identified by Dangote as a major challenge to the firm, especially as such makes the evacuation of products from the refinery and constrained logistics operations, distribution, and delivery to customers very difficult. He said that the performance of Savannah Sugar Company, a subsidiary of Dangote group, was impacted by communal clashes between the host community and herdsmen which led to the closure of the company for more than three months. The company, however, continued to post resilient performance despite the challenges. The company achieved a group turnover of ₦150.4 billion, a 26 percent decrease over ₦204.4 billion posted in 2017 as it made a profit before tax of ₦34.6 billion, and a profit after tax of ₦22 billion.

The European Union has committed over €156.3 million (₦53.9 billion) in different financing instruments in Nigeria’s power sector, ranging from traditional grants to blended finance. But the sector, according to the EU’s trade delegation, is losing ₦1.3 billion daily despite efforts by stakeholders to address the challenges in the industry. Speaking at the Second Seminar for the Preparation of Performance Improvement Plans by the Nigerian electricity distribution companies, the Head of the Trade and Economic Section of the EU Delegation, Filippo Amato, said the EU has been able to fund different technical assistance and infrastructural projects cutting across several areas both on and off the grid in the country. The 2019 seminar, designed by the French Development Agency and financed by the EU with €2.3 million, was implemented by the Association of DisCos with the technical assistance of AF Mercados. Amid the efforts, the average operational capacity of the grid hovers around 4,500 megawatts and 5,500 MW and cannot meet the needs of a growing population and industrial users. Amato said Nigeria still relied too much on off-grid diesel generators, which unfortunately were not costly but unsustainable from a climate change point of view.

Femi Otedola has completed his divestment from Forte Oil after receiving full payment for the sale of the company to Prudent Energy Services. Otedola shared this on his Instagram profile, confirming a deal that has been in the work for months. The share price of Forte Oil has received a boost in the wake of the sale, closing at ₦34.65 per share at the NSE yesterday, up from ₦25.75. This came barely one week after the Exchange endorsed the transfer of the 75 per cent majority equity stake in the company from Otedola, to Prudent Energy and Services in a share purchase deal. Forte Oil had earlier notified the NSE of its principal shareholder’s intended divestment of his holding in the company, which was then expected to be consummated in first quarter, Q1 2019. Prudent Energy will invest the 75 percent stake through Ignite Investments and Commodities. The deal would see a total of 982.97 million ordinary shares of 50 kobo each change hands. Each unit of the shares would be divested at ₦66.01, for a total value of ₦64.89 billion.