Power: FG signs N78billion MoU with Chinese Firm

The Federal Government on Tuesday signed a N78billion ($500million) Memorandum of Understanding(MoU) with Xian Electric Engineering Company Limited of China for the execution of transmission projects in the power sector.

The N78billion, a loan obtained from the China Exim Bank, will be used for the construction of power transmission infrastructure across the country.

According to the Minister of Power, Prof. Chinedu Nebo, the loan was negotiated by the Minister of Finance, Dr. Ngozi Okonjo-Iweala when President Goodluck Jonathan visited China recently.

He said, “The Chinese Exim Bank is going to give us a concessionary loan in this regard and we are going to get the best possible interest”.

Nebo said the contribution of Xian Electric is to liaise and collaborate with the stakeholder agencies of the FG for the conduct of necessary studies required for the successful execution of the project, and to execute the projects according to agreed specifications and timelines.

Others are to provide detailed technical design specification and reference manual for future use in the operation and maintenance of transmission networks and to provide adequate training for the Nigerian workforce and support the local content policy.

The contribution of the Federal Ministry of Power, according to the terms of the agreement, is to facilitate the acquisition of relevant data and reports, and assist in the identification and acquisition of suitable parcels of land and secure the right of way for the execution of the projects.

The ministry is also to provide Xian Electric with the technical details of the Transmission Company of Nigeria’s projects list that will be considered for implementation and to facilitate the execution of needed commercial agreements as may be required for the bankability of the projects.

Nebo said, “Manitoba Hydro International is the management consultant for the TCN. They are the ones that are designing and delineating the project. So, the entire details of what this money will do will be provided for the group by Manitoba”.

The minister said the MoU would last for a two-year period, stressing that many of the TCN projects would have been completed before the end of the process.

In his remarks, the General Manager, Xian Electric, Mr. Ji Junhua, said both parties had earlier exchanged ideas on the transmission upgrading project.

Junhua reiterated the group’s commitment to establishing multiple after sales and training centres in Nigeria.

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76 Oil Blocks dormant eight years after allocation

The Department of Petroleum Resources has said that 76 out of the 77 oil blocks awarded between 2005 and 2007 are largely dormant.

The Director, DPR, Mr. George Osahon, said at a forum on the 2005-2007 licensing round in Lagos that the Federal Government awarded a total of 77 oil blocks through three bid rounds in 2005, 2006 and 2007.

He, however, noted that only one of the blocks was producing, while less than 30% of the remaining 76 were working actively.

Osahon said that majority of the operators were using the delay in the passage of the Petroleum Industry Bill (PIB) as an excuse not to develop their fields.

He said, “In the last three to four years, nothing has been happening in Nigeria’s exploratory sector, while in the marginal fields sector, only eight fields are currently producing out of the 24 fields awarded to 31 successful companies.

“Only one block is currently producing, while less than 30% of the blocks are actively working; several Production Sharing Contracts have yet to be signed, bank guarantees yet to be put in place, work obligations not respected and downstream obligations not performed.”

According to the breakdown of the 2005-2007 licensing rounds, 14 of the 44 oil blocks awarded in 2005 are onshore, eight deep offshore and 11 in the continental shelf, while the remaining 11 are in the Chad Basin, Benue Basin and Anambra Basin.

Indigenous exploration and production companies got 65% of the oil blocks awarded in 2005, leaving the remaining for foreign firms.

Osahon further explained that 16 oil blocks were awarded in 2006 with indigenous operators taking 40%.

Eight of the blocks are deep offshore blocks, three onshore, two in the Chad Basin, while the remaining three are in the continental shelf.

Osahon explained further that another 17 oil blocks were allocated in 2007, nine of which are onshore, one deep offshore and the remaining eight in the continental shelf.

Indigenous operators got 85% of all the oil blocks allocated in 2007, leaving the remaining 15% to foreign operators.

Osahon said that the FG was concerned with  the operators’ inability to meet industry targets for reserves and production capacity; limited activities in the oil and gas industry; and the implications for the industry’s vitality and social challenges.

Heirs Holding acquires Stake in Offshore Drilling firm

Heirs Holdings has acquired significant stake in Seadrill Mobil Units (Nigeria) Limited, a West African affiliate of New York listed global offshore drilling company, Seadrill.

As a result, the Chairman of Heirs Holdings, Mr. Tony Elumelu, has been appointed chairman of the board of Seadrill Mobil Units.

The investment is further evidence of Elumelu’s strategy of increasing African business participation across the oil and gas value chain, and complement existing interests in oil and gas production and exploration.

Seadrill, the world’s leading offshore driller, is listed on both the New York and Oslo stock exchanges, and operates the second largest ultra-deep water fleet and largest premium jack up fleet in the industry with 7,500 employees in 15 countries.

Commenting on the investment, Elumelu was quoted to have said, “Seadrill is a significant player in the oil and gas space, with a strong track record and one of the most respected names in the industry. The partnership makes strong commercial sense, bringing together a major global player and a leading African participant in the oil and gas industry.

“Successful development of Nigeria’s deep water oil and gas fields is of strategic importance to our country. This is an important part of our own approach of creating synergistic added value investment across the energy sector, from extraction to processing, and perhaps most importantly for Nigeria, industrial production and power generation.”

Planning Violation: Ogun to shut Telecoms Masts

The Ogun State Ministry of Urban and Physical Planning has announced plans to shut telecommunication masts, towers and parabolic antennae  erected in all parts of the state without approval.

The Commissioner for Urban and Physical Planning, Mr. Adebayo Fari, said in a statement issued in Abeokuta on Thursday, “A responsible government cannot stand aside and allow the violation of its law to continue without taking appropriate measures to reverse it.

“The government of Ogun State is concerned about the blatant disregard of its planning regulations by cell site developers, who have not obtained the requisite permits from the Ministry of Urban and Physical Planning before installing urban furniture, including telecommunications antennae, masts and towers on lands and buildings in the state.

It is illegal to erect or install masts, towers, base stations and any other structures without a permit in Ogun State.

The Ogun Urban and Regional Planning Law, 2005 empowers the Commissioner for Urban and Physical Planning to implement the state policies on urban and regional planning, and physical development of the state, including spatial location of infrastructural facilities; issue land use clearance for  all applications for physical development plans; and evaluate the Environmental Impact Assessment reports, site specific to any installation, including that of telecommunication masts, towers, antennae etc.

The commissioner further said that in pursuance of its powers to monitor the state’s physical development plans, his ministry would embark on a statewide enforcement drive to find, mark and shut any development, including erection of telecommunication masts, towers, parabolic antennae and any other type of antennae, and similar structures without a written approval from the government.

“The ministry does not regulate telecommunication and associated services, including the granting of licences and frequencies, but it reserves the rights to enforce compliance with the Ogun State Urban and Regional Planning Law, 2005″,  Fari added.

He advised stakeholders in the industry to regularise their installations in the state before September 20 by providing details of the installations, evidence of payment of appropriate fees, approvals obtained, details of installers and contractors as well as an inventory of installations, including generators and power inverters, among others.

Norway to end South Sudan capital’s dark nights with power plant

Reuters reports that Norway will help South Sudan build a hydropower plant with work expected to start early next year raising hopes of ending an era of dark nights in the capital.

Devastated by decades of civil war with Khartoum, South Sudan has no power grid. Electricity is only for the rich who can afford diesel generators at their villas in the capital, Juba, or business travellers in the city’s expensive hotels.

The government has made more than $10 billion in oil revenues since a 2005 peace deal with Khartoum, but corruption and inexperience have hampered development since independence in 2011.

Juba also has no sewage system. Running water in residential buildings and offices comes unfiltered from the Nile, delivered by an army of trucks.

To kick-start development, Norway will partly fund and oversee construction of a 42-megawatt dam on the White Nile, providing enough electricity at least for Juba.

Tenders will be awarded in autumn with work to start in early 2014 and end in two years.

The project will cost around $160 million; South Sudan is to contribute a quarter.

With risk-averse western firms largely shunning South Sudan due to its inefficient legal system, bidders for the plant will likely come from Asia. Chinese, Malaysian and Indian firms dominate the oil industry in South Sudan.

Nigeria’s SEC investigates pan-African Ecobank results

Securities and Exchange Commission (Nigeria)

Securities and Exchange Commission (Nigeria) (Photo credit: Wikipedia)

Reuters reports that Nigeria’s securities regulator, the Securities and Exchange Commission, is investigating Ecobank over an alleged misstatement of its 2012 performance.

The SEC held meetings with Ecobank’s board of directors on August 6 to discuss the issue, but did not elaborate on what the bank is accused of misstating.

Ecobank acknowledged that there is an investigation, gave no details, but said it was fully cooperating with the SEC.

The SEC had sent queries about Ecobank’s 2012 performance to all the directors, in line with the International Finance Corporation corporate governance code.

In March, Ecobank, which has operations in 32 African countries, said its 2012 pretax profit rose to its highest ever level of $348 million, up a quarter on the same period a year ago.

“The core element (of the allegation) … is on material misstatement of facts on (Ecobank) performance,” a SEC source said. This may also affect whether or not bonus awarded to chief executive officer Thierry Tanoh for that year was proper.

“All the executive directors have been issued a specified questionnaire on matters emanating from the petition and responses are awaited,” he said.

The initial complaint to the SEC came from Laurence do Rego, the bank’s suspended head of finance, the source said.

“I can confirm that our Board of Directors met with the SEC in early August and that we are …. in continuing dialogue with them. We are happy to offer them our ongoing cooperation,” Ecobank spokesman Jeremy Reynolds told Reuters by telephone.

He said do Rego, who joined the lender eleven years ago, was suspended because she falsely claimed to be a qualified accountant. Do Rego had not responded to the bank’s invitation to meet the board of directors and substantiate her claims.

Do Rego could not be immediately reached for comment.

Ecobank has been in the spotlight over debts owed by businesses associated with its chairman Kolapo Lawson, but the SEC source said the regulator was satisfied there was nothing untoward about them.

Last month, the bank said that Lawson had repaid the loans and no company rules were broken.

“We’ve looked at the status of the debt owed by the chairman and we don’t think there is any issue there,” the source said.

The source also said that another allegation that arose – that Ecobank has sold assets at below market value without the SEC’s permission – had been dismissed as untrue.

Tighten the Noose on Money Laundering, GIABA Urges Banks

English: Logo of The Intergovernmental Action ...

English: Logo of The Intergovernmental Action Group against Money Laundering in West Africa (GIABA) Русский:  Wikipedia)

The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has called on banks to strictly enforce the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) rules set by the Financial Action Task Force (FATF).

The Director General, GIABA, Dr. Shehu Abdullahi, represented by the Head of Programs and Project, GIABA, Dr. Buno Nduka, made this call at a regional training for financial and regulatory institutions on the revised FATF recommendations held in Lagos, on Wednesday.

Abdullahi argued that the revised FATF standards places most of the responsibilities in the fight against money laundering on financial institutions as the point of call of money launders.

“That makes the financial institutions highly vulnerable to money laundering and terrorist financing risk and for us to be able to address this issue; we need to give capacity to financial institution to know their obligations within the right standard of the 40 recommendations. They have key roles to play in more than 60% of those recommendations and if the financial institutions are not well capitalized there would be a problem in any country implementing any effective.”

The FATF had in February 2012, revised its standards to provide for a stronger framework to act against criminals by clarifying and strengthening the existing obligations.

The revised standards also addresses new threats to the international financial system and provides authorities with an enhanced arsenal of safeguards to counter the evolving threats posed by money laundering and terrorist financing.

Abdullahi noted: “As welcome as this development may be, they threw up new challenges for all stakeholders, including countries, regulatory authorities and financial institutions. These challenges include the conduct of money laundering and terrorist financing (ML/TF) risk assessment and application of risk-based approach in the implementation of AML/CFT programmes.

“The recommendations are the issues of risk assessment, the issue of customer, due diligence, the issue of reporting suspicious transactions, the issue of record keeping the issue of training, the issue of confidentiality, managing their internal processes etc. and also knowing the key predicate  offences within our regions.”

He added: “A key issue financial institutions must address is the issue of politically-exposed persons and how to know politically-exposed persons so when they are doing their customer due diligence, they are fully addressed of the information they require so they can monitor the accounts and business relationship with these people.”

The Director, Nigerian Financial Intelligence Unit (NFIU), Juliet Ibekaku, represented by Mr. Pattison Boleigha, warned that failure to comply with anti-money laundering or anti-terrorism laws could expose financial institutions to severe civil and criminal penalties, including loss of professional licenses and imprisonment of its principal officers.