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DMEA PoliCy DMEA
Buhari talks up new law, security measures
AFriCA
MUHAMMADU Buhari, the president of nige- ria, said last week that his administration hoped to ratify a new version of the law governing the oil industry in the near future.
Buhari, who was speaking at an event mark- ing the 59th anniversary of nigeria’s inde- pendence, did not say whether the federal government had set a deadline for the passage of the Petroleum Industry Bill (PIB). He did state, though, that his administration also intended to introduce amendments to the Deep O shore Act and the Inland Basin Production-sharing Con- tracts Act. together, he said, the new laws will help ensure that the government receives its “fair share of oil revenues, whilst [also] encouraging private investment.” He did not de ne a “fair share” or reveal what terms nigeria’s government was willing to o er investors.
e president did say, though, that he wanted to see the federal government become less reliant on oil revenues. He declared that his administra- tion was “committed to responsibly managing our oil wealth endowments” and would “pru- dently save our oil income and invest more in the non-oil job-creating sectors.”
nigerian legislators and government o cials have been talking about enacting new legislation to replace the Petroleum Act of 2004 for more than 10 years. A new version of the law known as
the Petroleum Industry Governance Bill (PIGB) came before Buhari for consideration last year, but he rejected it, saying that he would not endorse legislation that scaled back the powers of the petroleum minister, a cabinet post held by the president. Buhari was speaking shortly a er Ahmad Lawan, the president of nigeria’s sen- ate, said that Parliament hoped to pass the PIB before the end of next year. Lawan did not give a speci c target date, but he did say that nigeria’s security agencies ought to do more to support the oil industry.
the president also addressed this point in his speech, saying that his government intended to continue its efforts to combat smuggling and the . He also stated, though, that nigerian authorities were trying to address the root causes of security problems by improving socioeco- nomic conditions in the niger River Delta and cleaning up oil spills and pollution in Ogoniland.
the administration hopes to accomplish these tasks by transferring the responsibilities of the niger Delta Development Commission (nDDC) to the Ministry of niger Delta A airs, he added. is shi will ensure better oversight of government funds, since the nDDC has been covering its operating expenses with the pro- ceeds of a 3% levy on oil companies’ expendi- tures within nigeria, he noted.™
FinAnCe & inVestment
Engen reportedly headed for IPO in H1-2020
AFriCA
EnGEn, a petroleum re ner and retailer that operates in seven African countries, is report- edly gearing up for an initial public offering (IPO) of stock. sources familiar with the matter said last week that representatives of Engen’s two shareholders – Malaysia’s Petronas, which holds 74% of equity in the company, and Phembani, a company founded by south African business- man Phuthuma nhleko that owns the other 26% – had already begun discussing the terms of the IPO. e issue will probably take place on the Johannesburg stock Exchange in the rst half of 2020, they told Bloomberg.
e sources, who spoke on condition of ano- nymity because the downstream operator has not made its plans public, reported that the par- ties had not yet decided how much stock to o er. ey also noted that Petronas had appointed JPMorgan Chase & Co. to serve as its advisor for the IPO. Engen hopes to use the proceeds of the stock issue to cover the costs of expand- ing its chain of lling stations and upgrading its 135,000 barrel per day (bpd) oil-processing plant
in Durban, the sources said. e company is cur- rently valued at more than ZAR 40bn ($2.6bn), they stated.
As of press time, neither Phembani nor JPMorgan Chase had commented publicly on reports of the Engen IPO. For its part, Petronas has remained mostly silent. When contacted by Bloomberg, the Malaysian company said: “should there be an IPO exercise, the market will be informed.” Engen is the largest fuel retailer in south Africa and also operates lling stations in Botswana, Ghana, Lesotho, Mauritius, namibia and swaziland. It was founded in 1881 and posted a net pro t of ZAR 1.8bn ($117mn) on revenues of ZAR 82.5bn ($5.4bn) in 2018.
Earlier this year, Engen exchanged part of its retail network – that is, more than 225 branded lling stations operating in eight African coun- tries (Zimbabwe, Zambia, tanzania, Rwanda, Reunion, Mozambique, Malawi and Gabon) – for a stake in Vivo Energy. e deal served to expand Vivo Energy’s chain to more than 2,000 lling stations.™
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w w w . N E W S B A S E . c o m Week 40 10•October•2019