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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari disclosed that the Corporation would declare dividends for the first time in its 44 year history. Alhaji Kyari mentioned this while speaking at the 2021 edition of the Nigeria Annual International Conference and Exhibition organized by the Society of Petroleum Engineers. Alhaji stated that NNPC 2020 financial statements would be made available in the third quarter of 2021 for the first time in the corporation’s history, and dividends will be declared, as it is poised to make a profit. This is the third year running that NNPC disclosed its financials to the public in line with the Transparency, Accountability and Performance Excellence policy followed throughout Kyari’s successful tenure as the Group Managing Director of the NNPC.
The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, said that the Federal Government of Nigeria had approved the NNPC purchase of a 20% stake in the 650,000-barrel-per-day Dangote oil refinery for the sum of $2.76 billion. Minister Sylva disclosed that the Government approved the National oil companies’ acquisition of the stake during a cabinet meeting. Furthermore, he added that the cabinet meeting approved two state-owned refineries- the Warri and Kaduna refineries to be upgraded and modernized.
The NNPC reported in June that it had signed term sheets with the Dangote Group for the proposed acquisition of a 20% stake but noted that it would require the government’s approval of the plan. Based on this disclosure from the Minister, NNPC is set to have its approval and will move forward with obtaining the financing needed to fund the planned acquisition.
Ghana seeks parliamentary approval to borrow as much as $1.65 billion to accelerate oil and gas exploration by acquiring and developing assets. The investment push comes after ExxonMobil Corp. pulled out of an offshore prospect in May, dealing a blow to Ghana’s burgeoning oil and gas sector. There are also rising concerns that the push for lower-carbon energy may reduce the value of Ghana’s hydrocarbon resources over time.
According to a parliamentary proceeding, the nation requires circa $1.3 billion to buy a 37% stake in the Deep Water Tano/Cape Three Points asset operated by Aker Energy AS and a 70% stake of the South Deep Water Tano field operated by AGM Petroleum Ghana Ltd. The stakes would be acquired through the Ghana National Petroleum Corp. subsidiary, GNPC Explorco if approved. Aker Energy is also in protracted talks with authorities to reduce the development cost of its Pecan oil field, which Ghana is seeking to borrow $350 million to cover capital expenditure, bringing the total funds required to $1.65 billion. The new strategy for the country to “become an operator in its own right” may require a legal amendment to allow the state-owned oil company to enter into reserve-based lending transactions, which could raise financing without putting further pressure on the Government purse.
On August 5, crude oil prices rose about 1% on increasing Middle East tensions, but new movement restrictions imposed by countries to counter a surge in COVID-19 cases threatened the demand recovery. The U.S. West Texas Intermediate crude futures traded 80 cents higher at $68.95 a barrel, while Brent crude futures rose 78 cents to $71.16 a barrel, after earlier dipping below $70 for the first time since July 21. The U.S. Energy Information Administration’s weekly report for August 4, showed a build of 3.636 million barrels in the week ending July 30, against analysts’ forecast of a 3.102- million-barrel draw.
Crude prices have been boosted by the latest tensions in the Middle East. However, investors are focused on the weather, with the risks of potential supply disruptions amid a forecast for more storms in the Atlantic also supporting prices. The National Oceanic and Atmospheric Administration on Wednesday revised upward its outlook for the 2021 Atlantic hurricane season, with an estimated 65% chance of an above-normal season and between three to five major hurricanes. Capping oil’s gains, however, was a rise in daily COVID-19 cases that has prompted restrictive measures in China, the world’s largest fuel importer, and dampened the fuel demand outlook.