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AGPC Raises US$260m to Complete ANOH Project and Drive Energy Transition in Nigeria
Seplat Petroleum Development Company Plc (Seplat or the Company), a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange and the London Stock Exchange, announces that its Incorporated Joint Venture (IJV), the ANOH Gas Processing Company (AGPC), has successfully raised US$260m in debt to fund completion of its ANOH Gas Processing Plant (ANOH).
The 300MMscfd capacity ANOH plant, located on OML 53 in Imo State, is being built by AGPC, which is an IJV owned equally between Seplat and the Nigerian Gas Company (NGC), a wholly owned subsidiary of Nigerian National Petroleum Corporation (NNPC). Seplat and NGC have previously provided a combined US$420m in equity funding and the project is now fully funded.
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The US$260m funding was provided by a consortium of seven banks: Stanbic IBTC Bank Plc (advisor), United Bank for Africa Plc, Zenith Bank Plc, FirstRand Bank Limited (London Branch) / RMB Nigeria Limited, The Mauritius Commercial Bank Limited, Union Bank of Nigeria Plc and FCMB Capital Markets Limited. It allows for an additional US$60m accordion at the time of completion to fund an equity rebalancing payment at that time, if considered appropriate. Funding commitments of more than US$450m were received by the company, which is a significant oversubscription and a strong sign of confidence in the project.
Following a cost optimisation programme, the AGPC construction cost is now expected to be no more than US$650m, inclusive of financing costs and taxes, significantly lower than the original projected cost of US$700m.
ANOH is one of Nigeria’s most strategic gas projects. It will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation. Seplat is a leading provider of natural gas to Nigeria’s power sector, supplying around 30% of gas used for electricity generation.
Commenting on the deal, Okechukwu Mba, Managing Director of ANOH Gas Processing Company said: “Successfully closing the US$260 million debt facility means that the ANOH project is now fully funded. Once operational, AGPC will be a significant supplier of gas to Nigeria’s power sector, supporting local employment and the cleaner generation of power for Nigerian homes and businesses. We conservatively estimate that the gas from AGPC will be enough to generate electricity for more than 5 million people”.
On his part, Roger Brown, Chief Executive Officer of Seplat, said: “Completing the funding of ANOH is an important milestone for AGPC. The ANOH development is one of the government’s Seven Critical Gas Development Projects and our involvement provides a clear path towards strengthening Seplat’s position as Nigeria’s leading indigenous diversified energy producer. It will help us drive, alongside our government partners, Nigeria’s transition to cleaner, less expensive power generation. We are extremely proud to partner with the Nigerian Gas Company in this strategically important project, which will create jobs and prosperity in the Nigerian economy.
Seplat will continue to diversify its business and invest in gas to help Nigeria develop its own natural resources, which in turn will drive more sustainable social and economic growth for a young, rapidly growing population.”
ExxonMobil, Chevron CEOs Discuss, Mull Possible Merger
ExxonMobil and Chevron executives discussed the possibility of a merger last year as the two oil giants were battered by the pandemic, The Wall Street Journal reported recently.
Chevron CEO Mike Wirth and his Exxon counterpart Darren Woods discussed merging as demand for oil and gas plummeted due to restrictions to stem the spread of the coronavirus, the paper said, citing sources close to the issue. The sources added that the “preliminary” discussions are no longer taking place but could resume in the future.
The combined market value of the two companies would exceed $350 billion, according to the Journal, with ExxonMobil worth $190 million. “Together, they would likely form the world’s second-largest oil company by market capitalization and production, producing about 7 million barrels of oil and gas a day, based on pre-pandemic levels, second only in both measures to Saudi Aramco,” the Journal wrote.
But such a merger could come up against anti-competitive regulations. Many industry experts, however, believe that a consolidation of the oil and gas industry is necessary to reduce costs and help companies overcome the pandemic slowdown. Additionally, the sector must prepare for an uncertain future as many countries seek to reduce their dependence on fossil fuels to combat climate change.
While President Joe Biden has already announced the United States’ return to the Paris climate accord, the American oil giants are also likely to face a Democratic administration that is less supportive of the industry. Chevron had announced Friday that it had recorded a net loss of $5.5 billion in 2020, affected by a sharp drop in crude oil prices at the beginning of the pandemic.
Total Nigeria Issues N15bn Commercial Paper
Total Nigeria PLC says it has successfully issued and quoted a N15 billion Series 1 and 2 Commercial Paper issuance (the “Issue”) under its N30 billion CP programme registered with the FMDQ Securities Exchange Limited in December 2020. The Issue was TNPLC’s debut issuance in the Nigerian debt capital markets. It attracted significant demand from a wide range of investors, resulting in a 3.9x subscription level and a demonstration of investor confidence in the Company and its management team.
Commenting on the quotation of the Issue, Mr. Imrane Barry, Managing Director of Total Nigeria PLC, explained that the Programme was set up to enable the Company further broaden its sources of capital by accessing funding from the Nigerian debt capital markets while also reducing its overall funding costs. He thanked investors for supporting the Company’s debut
Issue and commended the Financial Advisers, Stanbic IBTC Capital Limited and FBNQuest Merchant Bank Limited for ensuring the success of the Issue despite the challenging environment.
NNPC Repays $3.081bn Of Joint Venture Cash Debt
Mordi chukwunonso Esther
The Nigerian National Petroleum Corporation (NNPC), has repaid $3.081 billion from the $4.689 billion cash call arrears it negotiated with its Joint Venture (JV) partners, leaving an outstanding indebtedness of $1.609 billion.
In a report published recently, the NNPC stated that the repayments, which stood at 68.69 per cent of the total; and outstanding indebtedness, which stood at 34.31 per cent, were as at October 2020.
While the NNPC confirmed that it had cleared the cash call indebtedness to Mobil Producing Nigeria (MPN), it noted that it was working towards clearing the arrears owed Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited (CNL), Total Exploration and Production Nigeria (TEPNG) and Nigeria Agip Oil Company (NAOC).
Specifically, the report disclosed that as at October 2020, the NNPC owed SPDC $917.205 million; CNL $55.479 million; TEPNG $265.011 million and NAOC $370.925 million.
The NNPC further explained that in the case of SPDC, repayment was from the price balance distribution on Project Santolina; while in the case of CNL, repayment was from price balance distribution on Projects Cheetah and Falcon.
“NNPC has fully repaid its cash call arrears to MPN and all incremental barrels have reverted to base,” the NNPC reiterated.
As at the commencement of 2020, precisely in January 2020, the NNPC stated that of the $4.689 billion JV cash call debts, $2.79 billion was repaid while $1.89 billion was outstanding.
SPDC, CNL, TEPNG and NAOC’s outstanding, as at January 2020, stood at $917.205 million, $158.309 million, $390.59 million and $433.41 million respectively.
The NNPC, in 2016, signed a CashCall Repayment Agreement with its JV partners to defray cash-call arrears within a period of five years. This came after many years of its indebtedness to its JV partners over its failure to meet up with its cash call obligation.
In addition, providing a summary of revenue from crude oil and gas liftings for October 2020, the report stated that the NNPC earned $769.28 million from crude oil
and gas sales, a decline by 7.71 per cent compared to $833.62 million recorded in September 2020.
Giving a breakdown of the figures, the report noted that the NNPC earned $707.547 million from total crude oil sales, compared to $431.589 million in September 2020.
Giving a breakdown of some of the components of crude oil sales, the NNPC stated that it earned $73.09 million from crude oil exports, compared to $12.38 million in September 2020; while earnings from domestic crude oil sales and Modified Carry Agreement (MCA) stood at $416.975 million and $58.925 million respectively.
On the other hand, the report noted that total gas earnings stood at $61.736 million in October 2020, compared to the previous month’s gas earnings of $135.349 million.
Furthermore, the NNPC also disclosed that it spent N3.676 billion on pipeline repairs and management for the month of October 2020.
Giving a breakdown of the spending, the NNPC stated that pipeline and other facilities repairs gulped N2.173 billion; Marine distribution cost the country N951.484 billion; while strategic holding gulped N551.799 million.
Daniel Terungwa
The Shell Petroleum Development Company of Nigeria Limited (SPDC) has announced the competition of the sale of its 30% interest in Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure.
The transaction has been made to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp), for a consideration of $533 million.
A total of $453 million was paid at completion with the balance to be paid over an agreed period, a company statement explained.
Completion follows the receipt of all approvals from the relevant authorities of the federal government of Nigeria.
SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area.
SPDC assured its commitment “to transfer OML 17 in an orderly and responsible manner to the new owner, which will help to provide a sustainable long-term plan to unlock its full potential”.
The sale also enables SPDC to focus on supporting the federal government of Nigeria’s national energy agenda in its remaining OMLs through oil and gas production, payment of royalties, taxes and levies as well as advancing local content and providing social investments.
Managing Director of SPDC and country chairman of Shell Companies in Nigeria, Osagie Okunbor, said: “As with previous divestments, we will facilitate a successful transition to new ownership. Shell has been in Nigeria for over 60 years and remains committed to a long-term presence here.”
The other SPDC JV partners, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited, have also assigned their interests of 10% and 5% respectively in the lease, ultimately giving TNOG Oil and Gas Limited a 45% interest in OML 17.
Allegations That SPDC Under-reported 2 Million Barrels of Crude from 2016 to 2018, False Says DPR
The Department of Petroleum Resources (DPR) has dismissed media reports that it uncovered a ‘missing 2 million barrels of crude’ in oil production records by Shell Petroleum Development Company (SPDC) between 2016 and 2018. The DPR described the allegations as false and baseless.
The report had alleged that SPDC which was allegedly found culpable had admitted the infraction and offered to refund the cost of the oil and pay a fine. The report claimed that the shortfall came from the Trans Niger Delta export pipeline which conveys an average of 150,000 barrels of SPDC’s Bonny light crude blend to the export terminal.
The oil industry regulator urged the public to disregard the false media report. Mr Paul Osu, Spokesman of DPR, who reacted in a short text message to a News Agency of Nigeria (NAN) Correspondent recently stated that there was no such thing.
“There is absolutely nothing like that, kindly disregard,” Osu said. Also, Mr Bamidele Odugbesan, Media Relations Manager at SPDC in a telephone chat dismissed the report as false and malicious and irresponsible and urged NAN to cross-check with the DPR. “The claims are baseless and without any iota of truth, it is totally false and malicious and lacks substance. “SPDC was not under any probe by the DPR. SPDC had never admitted to underreporting its crude production to DPR or any authority,” Odugbesan said. (NAN).
Dangote Refinery to Come Onstream Early 2022 –Director
By Ikenna Omeje
The Executive Director of Capital Projects and Portfolio Management at Dangote Group, Devakumar Edwin, has said petroleum products from the company’s 650,000 per day refinery in Lagos will hit the market by early 2022.
The plant, was previously set to come on stream in 2020, but the completion of construction work was later shifted to the end of 2020 with operation expected take off early-2021.
However, speaking in an interview with Arise TV, Edwin said that the earlier completion and products production date could not be met due to the outbreak of Covid-19 pandemic, which resulted in lockdowns and restrictions of movement in various countries that delayed the shipment of equipment from abroad.
In November 2020, the group said its refinery had reached 80 percent completion; engineering and construction were 100 percent, and procurement was 98 percent ready.
He said the group has gone ahead with the construction schedule and that by end of 2021 it would have achieved mechanical completion and proceed with the inauguration in December.
“As you rightly said, it’s a 650,000 barrels per day refinery and it is much larger than the existing capacity within Nigeria. And this is the largest single-train refinery in the world,” Edwin said.
“We had hoped to complete at the end of last year and start the commissioning early this year, but as you know, the impact of the COVID-19 had a major impact on us.
“We are receiving goods manufactured in the US, Europe, China and India and almost all the four countries were affected by COVID.
“So, our equipment deals got delayed and because of the movement restrictions, the shipping got delayed and the construction engineers also got restricted.
“So, now, we have gone far ahead with the construction schedule and by the end of this year, we will have mechanical completion and we start the commissioning by December this year. So, we expect the products to start coming out early next year.”
NLNG Remittance Surpasses FG’s Target by N63.6bn
The share of dividend remitted to the Federal Government by the Nigeria Liquefied Natural Gas company between January and December 2020 exceeded the projected target in the 2020 revised budget of the government by N63.62bn.
The Punch reports that a document it obtained from the Federal Ministry of Finance, Budget and National Planning on the Federal Government’s revenue performance in 2020 showed that the government projected a retained revenue of N80.38bn as its share of dividend from NLNG in the 2020 revised budget.
The government, however, got N144bn from the gas company as actual dividend during the review period, representing an increase of N63.62bn when compared to the target for the year.
This represents 79 per cent higher value than the N80.38bn projected target in the 2020 revised budget.
The revenue performance document also showed that the Federal
