By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) on Tuesday inched up 0.03 percent to close positive, according to Cordros daily market update.

The update says the all-share index (ASI) closed at 23,834.87 basis points while market capitalisation grew by N2.79 billion to N8.20 trillion, consequently reducing the Month and Year-to-Date losses of the index to 0.34 percent and 16.78 percent respectively.

The report affirmed that the Oil & Gas index emerged the top gainer with an increase of 0.95 percent coming on the performance in the shares of first dual listed Nigerian oil and gas upstream firm, Seplat Petroleum Development Company Plc adding 5.00 percent following a recent court ruling allowing it to acquire a working interest in OMLs 53 and 55 (The Chevron Assets).

The Industrial Goods sector also gained by 0.37 percent following price appreciation in shares of cement producer, Dangote Cement Plc by 0.75 percent.

On the contrary, the Insurance sector declined by 0.80 percent to lead the losers chart following a price depreciation in the shares of insurer, Axa Mansard Insurance Plc by 4.91 percent.

Similarly, the Banking and Consumer Goods sectors dropped 0.72 percent and 0.34 percent respectively and dragged lower by losses posted in the shares of Nigeria’s top tier lender, Guaranty Trust Bank Plc by 2.38 percent and brewer, Nigerian Breweries Plc by 0.50 percent.

At the close of the day’s trading on the Nigerian bourse, market breadth posted a positive outlook, with 22 gainers and 17 losers recorded, according to the NSE’s daily market statistics.

SEPLAT emerged the top gainer with a gain of N10.19 per share; while Drugmaker, GlaxoSmithKline Consumer Nigeria Plc topped the decliners chart with a loss of N1.28 per share to close the session.

In terms of turnover, total volume traded on the Nigerian equities market increased by 19.56 percent to close at 313.68 million shares, valued at N2.41 billion in 3,451 total deals.

“We expect a slightly negative to marginal upside tomorrow,” the Cordros update affirmed.

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January 29. 2016/TheCable

The post Chevron finally hands over producing assets to Seplat appeared first on Investadvocate.

* Chevron selling five onshore oil blocks

* NNPC warns buyers may not get right to operate them

Nigeria’s state oil company warned investors interested in three shallow water oil blocks offered for sale by Chevron that buyers may lose the right to operate them.

U.S.-based Chevron is selling minority stakes in joint ventures that operate five oil blocks. The majority owner is the Nigeria National Petroleum Corporation (NNPC).

Nigeria wants more direct ownership of its oil and gas through NNPC or local firms, leading several oil majors including Chevron to dispose of assets in Africa’s top oil and gas producer.

 

NNPC published a notice in local newspapers on Thursday saying that there had been a “recent high level of interest shown by various investors in the ongoing divestment programme for OMLs 52, 53 and 55 by Chevron Nigeria”.

It reminded those considering investing that, although Chevron currently operates the blocks, the state oil firm has the right to take over the operatorship as majority shareholder. Chevron owns 40 percent of the blocks and NNPC 60 percent.

“Chevron shall cease to be the operator upon assignment of their participating interest,” it said. “Therefore prospective buyers should note that automatic operatorship does not come with the acquisition of any of these blocks.”

Not having operatorship poses significant risks for would be investors in the fields, not least that the NNPC’s development subsidiary, NPDC, lacks the finance and expertise. It has usually had to call in a third-party operator anyway.

The notice seemed calculated to avoid messy tussles that ensued when Shell sold some oil blocks two years ago.

In that case, the buyers, including Poland’s Kulczk Oil Ventures, UK-based Heritage Oil and independent energy firm Eland Oil, thought they had also purchased Shell’s operatorship.

But NNPC, as majority owner, handed management of the fields to its subsidiary, saying it wanted to increase the amount of oil it produces and not give away rights to other companies.

Chevron’s share of a total of five blocks it is selling amounts to reserves of 200 million to 250 million barrels of crude and condensate, two oil industry sources have said. At least some of the blocks are already producing.

Analysts say that when NNPC contracts out the operating of blocks, such a move is a potential avenue for corruption.

In May, for example, lawmakers probed contracts in which the NPDC gave two local firms with no previous operating experience lucrative deals to operate blocks that it lacked the capacity to run, with no competitive bidding.

Uncertainty surrounding the investment climate and rampant oil theft have shrunk Nigeria’s production to below 2 million barrels per day. In recent months, oil exports from the OPEC member have been the lowest since 2009, when a militant rebellion was at its peak, according to central bank data.

Source: Reuters (by Tim Cocks)

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