Shell moves to Nigerian Offshore fields amid Onshore woes

English: Political map of the 36 States of Nig...

English: Political map of the 36 States of Nigeria (English) Deutsch: politische Karte Nigerias (Englisch) (Photo credit: Wikipedia)

International Oil Companies (IOC) including Shell and Chevron Corp., are shifting their efforts in Nigeria from land-based operations to offshore fields, where the risk of kidnapping, sabotage and crude oil theft is lower.

You would recall that Shell locked its compound in Warri since the oil company closed its operations in March after more than 40 years.

“Due to the increased level of oil theft and disruptions, a number of oil companies have started selling blocks in the troubled areas and moving to deep water offshore blocks”, Rolake Akinkugbe, a London-based head of oil and gas at Ecobank Research, said in an e-mailed response to questions. “The move offshore is being viewed as a longer-term solution to the challenge faced onshore and in shallow waters”.

You would recall that deep-water fields, which began production 10 years ago, now account for more than half of Nigeria’s production. With output suspended at about 40 land-based fields after armed attacks, Nigeria has compensated for the loss by increasing offshore projects, according to data from the petroleum ministry. Bonny light crude, one of the country’s main export grades, rose 0.1% to $109.98 as of 8.45am in London, according to Bloomberg report.

Chevron, Shell, Exxon Mobil Corp, France’s Total SA and Italy’s Eni SpA run joint ventures with the state-owned Nigerian National Petroleum Corporation .

Shell sold 8 oil leases in 3 years; Chevron said it wants to sell 5 fields in shallow waters in the western delta and swamps in the east.

Precious Okolokobo, a spokesman for Shell in Nigeria, said he could not comment on the company’s policy on onshore and offshore oil fields when contacted. Shell is undertaking “a strategic review” of its Nigerian business and may “exit from the interest it holds in some further onshore leases”, the local unit said in a statement on June 21.

Chevron is also reviewing its business plan in Nigeria and adopting new approaches to investment due to the current situation, James Craig, a Houston-based spokesman said on July 24 in an emailed response to questions.

“The emerging situation brings with it some important challenges to our traditional way of doing business and also provides some attractive business opportunities”. He continued “Our commitment to Nigeria remains strong. We have been in Nigeria for over 50 years”.

Total and Eni have also sold interests in some onshore assets they jointly own with Shell.

As the large companies leave Nigeria, their onshore fields are bought mostly by smaller Nigerian companies.

Exxon Mobil, whose operations were limited to the shallow and deep offshore waters of the South-eastern Coast, has recorded the lowest number of output disruptions, with only 3 attacks in the last decade, compared with the 945 recorded by Shell between 2007-2012.

Shell pioneered offshore oil exploration in Nigeria with the discovery of the Bonga field located 120km (75 miles) at sea in 1995. With reserve estimates of about 1 billion barrels, it has capacity for 220,000 barrels daily, producing into a floating production, storage and off-loading vessel moored in the Sea.

Other discoveries followed quickly. These include Chevron’s Agbami field estimated at over a billion barrels. Total’s Amenam and Akpo fields and Exxon Mobil’s Erha and Yoho fields. Other discoveries such as Egina, Bonga North, Bonga Southwest and Aparo, have been added.

Shell and Eni went ahead in 2011, to pay $1.1 billion to acquire a deep water field from Malabu Oil and Gas Limited. The field is estimated to hold reserves of more than 9 billion barrels.

Nigeria to issue 172 naira in Treasury bills

Nigeria plans to sell N172.05 billion ($1.07 billion) worth of treasury bills with maturities of three months to one year at its regular auction on August 7, the central bank said on Wednesday.

The bank said it will issue N22.05 billion in 91-day bills, N60 billion in 182-day paper and N90 billion in the 1-year note, using the Dutch auction system.

Nigeria, Africa’s top energy producer, issues treasury bills regularly as part of its money supply control measures.

Yields on short dated debt have edged higher in the secondary market since last week, when the central bank hiked the cash reserve requirement for public sector deposits to 50% from 12% previously, in a bid to support the local currency.

South Africa Bank Targets Nigeria Market

Absa Group Limited, one of the ‘big four’ consumer banks in South Africa yesterday indicated interest in entering the Nigerian market.

The financial institution said the move would boost its presence across Africa.

“The bank needs a competitive advantage before it can enter Nigeria, Africa’s second-largest economy and biggest oil producer”, Bloomberg quoted Absa’s Chief Financial Officer, David Hodnett.

Absa is not looking at any of the nationalised Nigerian banks, Hodnett pointed out.

The Asset Management Corporation of Nigeria (AMCON), set up by the Federal Government to buy bad debts from banks, is seeking to sell the three banks it acquired in 2011.

The banks are Keystone Bank Limited, Mainstreet Bank Limited and Enterprise Bank. They were acquired through a bridging process after an intervention by the regulators.

Forex Trading Firm set to commence Operation in Nigeria

HTT FX, a Forex Trading firm, has announced plans to commence trading in Nigeria as it promised to simplify trading and make it more appealing to interested Nigerians.

The company, which would be officially launched in Lagos and Abuja, is expected to provide Alternative Investment market worth over $4 trillion a day for Nigerians.

The firm, according to a statement, is a certified partner of Abshire Smith, an Financial Services Authority (FSA)-regulated liquidity in the United Kingdom, registered in England and Wales, which is also authorized and regulated by the FSA.

The Chief Operating Officer (COO) of the company, Paul Obalonye, said that HTT FX Capital established earlier this year, was poised to be the world’s leader in online Forex and Commodity trading, offering a wide array of products and instruments to trade.

NSE introduce new Electronic Trading Platform

The Nigerian Stock Exchange(NSE) has announced plans to introduce a new electronic trading platform called X-Gen, which will allow investors, stockbrokers and other stakeholders to access the market from everywhere at all times.

The Chief Executive Officer (CEO), NSE, Mr. Oscar Onyema, said this in Lagos at the NSE’s X-Gen Expo, organized to enlighten stakeholders on the new platform and the support system that will facilitate the end-to-end automation of the stock market.

He said; “The introduction of X-Gen stems from our quest to enable our emerging market structure with 21st Century technology and give us the foundation to join leading exchanges in building scale, scope and efficiency”

Continuing, he said, “X-Gen symbolizes the NSE’s unitary commitment to delivering a first rate technology platform that will enable our dealing members build and grow their businesses, and the investing community experience a more efficient market when they buy or sell securities”.

The new system, according to the NSE, is expected to improve transparency, market access, audit trail and provide efficient price discovery in the market, thereby enabling investors to realize their investment objectives by using the 3 products currently offered at the NSE in more meaningful ways.

Onyema explained that the migration to the new trading platform, which was targeted for the end of Q3 2013, will support the development of the nation’s capital market and Exchange-Traded Funds (ETFs), while the second phase would support derivatives in futures and options.

The Executive Director, Market Operations and Technology NSE, Mr. Ade Banjomo, in a presentation on ‘Technology Strategy for the Capital Market’, said that failure to adopt a new trading platform would prevent Nigeria from achieving its vision 2020 for the capital market and its current position as the leading capital market in West Africa would be jeopardized.

Wema Bank to Seek Regulatory Approval for upgrade to a National Bank

Wema Bank, a commercial bank with regional authorisation and presently operating in only two geo-political zones and the Federal Capital Territory (FCT), has stated its intention to seek regulatory approval for an upgrade to national authorisation.

The Bank, which made this known at its 2013 investor briefing, said it would seek regulatory approval for an upgrade to a national bank by December 2013.

The Bank was granted a regional banking license after being identified as one of the distressed banks during the recent banking reform. Over time, the Bank has tried to recapitalise and clean up its books.

According to a Document highlighting the Bank’s Strategic Plan for the years 2013-2015, the Bank said it would embark on a brand and image refresh program to be carried out in the coming months.The bank’s vision is to be the most efficient Retail and Commercial Bank by 2015.

The Bank said it is anticipating regulatory approvals for N40 billion capital within the next few days and that the process for Tier-2 Capital raising is to be concluded before the end of the year.

Other on-going plans of the bank include consolidation on areas of strength; raising additional long-term capital; expand its retail banking and push for growth in commercial hubs, continuous streamlining of operations; achieve competitive returns on Equity (ROE) and ensure returns to shareholders.

On commercial banking, the Bank seeks to deepen its commercial business in the Lagos, South-West and South-South markets.

It said; “Branches will continue to serve as outlets to mop up retail deposits while the key distributors of large corporates will also be a target focus. The commercial banking group will remain entrenched within the fast mostly consumer goods sector and partner with key distributors of the large corporates. The Bank will also continue to identify companies that have spin-offs in the Retail and Commercial business space”.

The Bank said that the growth in its balance sheet is largely expected to be driven by deposit growth.

CBN, SEC, Others hail Proposed International Financial Centre

The Central bank of Nigeria (CBN) has described the proposed establishment of the Nigeria International Financial Centre (NIFC) as a good attempt at making the country Africa’s financial hub and a powerhouse in the global financial system.

Other financial institutions, including the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM) and the National Deposit Insurance Commission (NDIC) agreed that the Centre as well as the establishment of the Offices of the Nigeria Financial Ombudsman (ONFO) were a step in the right direction towards the financial growth of the Country.

The financial institutions said that the existence of the NIFC would attract top rated international financial services firm to invest in the Centre and participate in the development of the African Continent.

These positions were contained in the Financial Systems Strategy 2020 (FSS2020) submitted to the Senate during the one-day public hearing held this weekend, on the proposed Bills to establish the NIFCs and the ONFO.

In his presentation, CBN deputy governor (Corporate Services), Mr Suleiman Barau, said that with the proposed Ombudsman will create a financial system that can support Nigeria in line with its aspirations to be one of the world’s 20 largest economies by 2020.

Barau, who noted that the Ombudsman was an alternative financial dispute resolution institution, drew attention to international best practices as applicable in the United Kingdom, where the financial Ombudsman made annual reports to the regulator (CBN in Nigeria) on the discharge of its functions.