Let me give some perspective on this FID in case you missed Arise Exchange last night.

First of all, Olu Verheijen — SA to President on Energy deserves her flowers for the relentless hardwork behind the scenes.

SNEPCo and its partners have had to rework the shelf life of the FPSO that serves Bonga Main, Bonga North-West and the coming Bonga North (16 wells; 8 producing and 8 for water re-injection) from 2029 in order to enable them develop the tie-back plan that wouldn’t require them to build a new floating, production, storage and offloading subsurface structure.

Bonga Main started producing in 2005, Bonga North-West came into production in 2014, Bonga North, which is what this announcement is for will achieve first Oil in 2029-2030 (with a shelf life of 10-Years)

The estimated ultimate recovery when you divide the enterprise value of the asset by the 2P (proven and probable) reserves is 300m barrels (which is the reason Shell mentioned in their notes that their projected internal rate of return is higher than the hurdle rate)

Let me give you some perspective, Bonga Main and North-West are deep- offshore assets that had their OML 118 block renewed in May 2021 (3months before the PIA was signed into law). Its production sharing contract (PSC terms) that has:

— Shell: 55%
— ESSO (a subsidiary of Exxon Mobil): 20%
— ENI: 12.5%
— Total: 12.5%

The capacity of Bonga Main and North-West is 225k barrels per day but its capacity utilization today is 130k barrels per day.

The reason it’s important to bring up this fact is so you can understand the block within which the new wells will be operating and their current output as compared to their capacity. Under PSC, you’ve:

Royalty Oil: Until the New Tax Bills proposed a change to its parameters for computation, the royalties were done on depth with a sliding scale on an incremental basis, the new proposal will calculate royalties for deep offshore on

— Depth 10% above 200 meters (Bonga North is above 1,000 meters)
— Volume: 18.5% above 15,000 barrels (Bonga North will incrementally reach peak production by 2034)
— Price: 4% between $60-$100 per barrel (WTI is currently around $70)

The cumulative average of royalties NUPRC will compute on Bonga North will come to 32.5%/3 =10.8%

Tax Oil: the Presidential Committee has proposed a flat rate of 50%

Cost Oil: the Presidential Committee has proposed 65.7% cap for deductions of capex until full amortization, and reversion to 85% there-after

The outstanding after Royalty, Tax and Cost Oil is what the IOCs sharing partners will share based on their equity in the producing assets. This is also what’s subject to sections 109 of the PIA for domestic crude oil supply obligations for RfQ that ensures domestic producers are given right of refusal on a WPPP before their export permits are approved for lifting out of Nigerian waters

Something interesting that SNEPCo and its partners have done is introduce a tie-back through what’s called a ‘riser’ that enables you aggregate producing wells (16 in this case, 8 for oil and the other 8 for water re-injection) to enable them connect pipes to an aggregation point for further lift into the FPSO. This is important because that technology enables you do a tie-back for wells within a 100-km radius of the FPSO

I have had time to review the loan the Nigerian Govt took as a forward sales agreement of $3.4bn, & I have the following observations that I think if not considered, will set a dangerous precedent for the economy:

• the daily allocation of crude is 90,000 at $65 per barrel or $5,850,000 per day
• the total repayment period is 581 days for principal with another $591m in interest payment at 11% per annum with a prorata of 6.4% in the second year of the facility
• the SPV (even if it is a standard structure for DCM transactions) that will receive

LONG THREAD: In order for me to give some perspective on the reason intl pharma companies are exiting the Nigerian markets, I had to go back to consult a financial model I built for a proposed pharmaceutical industrial park project:

There are 5 major components of

https://twitter.com/IfyAniebo/status/1725444500573569298

Pharma manufacturing:

1. Diluent or Fillers:
-Baking Soda
-Corn Starch (No NGN Company today produces Corn Starch)
-Talcum Powder
-Flour (Made from mostly Wheat with a little blend of HQCF)

2. Binders:
- Sucrose
- Gelatin
- Starch Based Adhesive (a secondary derivative)

Long Thread: Lets run numbers:

Commercial banks are holding $29bn for customers across banks in Nigeria,

CBN comes & executes a foreign currency swap where,

CBN collects the USD marked to market rate with a haircut (interest that is typically prorated at USD eurobond yield) Tenor is usually within a Year. The CBN swaps $10bn across banks for naira equivalent at the former official rate at 443 or 4.4 trillion naira,

The banks hold the naira, the CBN uses the USD. All the sources for FX

• Govt owned enterprises (NLNG, NNPC)
• Net export proceeds

"Fitch estimates, partly based on our survey data, that CBN swaps with domestic banks were USD10 billion-12 billion at end-2022, and are likely to remain close to that level, but there is less visibility on swaps it may have with international counterparties."- Fitch Ratings $10-12bn from Domestic Banks is basically the CBN using USD from Dorm Accounts to settle Balance of Payments and FCY obligations at an interest,

This means around $11bn of $21bn in swaps are from domestic banks and FCY account holders

3weeks ago on Channels TV Business morning, I said it was time to go to the IMF,

Now that the audited financial statements of the CBN shows that they lied about their FX reserves status, the actual numbers are 50% of what was stated, the former Governor had gone to use private sector loans from two US banks, pledging Nigeria's foreign reserves as collateral without informing the Senate or getting their approval, and we have unmet FX forwards that are sizable,

It is time to call in the calvary. I wouldn't advise the government to hurriedly sell off

The 1.9trillion naira the federating units is sharing is actually:

• statutory revenue
• exchange difference

Both from corporate income taxes, withholding taxes of $699.3m and $256m & other taxes from NLNG paid to FIRS,

It is a one time tax at the end of the FY of NLNG What is interesting is that in 23 and half years, NLNG has generated a total of $131bn and paid a total of:

• Dividends to NNPC that holds FGN 49%: $20.1bn
• Taxes: $8.5bn

This means 2 things:

1. FAAC will not see 1.9trillion naira next month, and this record has nothing

THREAD: What will be the impact of a FX unification on petrol subsidy?

The current stock of petrol in Nigeria will not last beyond the end of July. If Dangote doesn't start delivering through distributors by the first week in August, Petrol prices will go up to at least 750 Exchange rate unification means that the Central Bank has collapsed all the windows for your Form A to Q. No more PTA/BTA, form M at government subsidized rates. Here are the benefits:

• Revenues to the FG from Government Owned Enterprises (GoE) will go up by at least 39%

Here is my advise for the Nigeria Labor Congress. A better alternative to strike action like a repeat of 2012, will be to demand for the following:

• Ask for the govt to index wages to inflation
• Ask for the govt to pass an accelerated

https://twitter.com/GuardianNigeria/status/1664669917331726337

Employee casualisation bill that will criminalize 3rd party hiring above 15% & refusal to pay standard wages with benefits after 6months
• Ask for the govt to review the national minimum wage within 12 months of signing an MoU
• Ask for the Govt to implement the

OPEC meeting is coming up on Monday and Tuesday next week, and consensus is that the bloc wants to raise its daily production cuts from 1.1m barrels to raise prices on the ICE above $80.

OPEC production quota and the issues Nigeria has had around crude oil theft is the reason NURPC in line with PIA 2021 has updated its grip on:

• Technical allowable rates
• Maximum efficiency rates

from a well in line with sections 109 of the PIA.

I honestly think that the production curtailment and domestic crude oil supply obligations regulation needs a

6 things NNPC needs to do to prepare itself for the future:

1. It has done the first one already- remove its hands from pms subsidy

2. Sell off the government owned refineries

3. Go to the capital markets to raise either through an IPO (Equity) or Corporate Bond (Debt)

https://twitter.com/nnpclimited/status/1663897300651966466

4. Invest in BUA refineries in Akwa Ibom and work with NPA, NMDPRA, Concessionaires to fast track the development of the Ibaka Deep Sea port needed to build the refinery. The reason this is important is because

Nigeria's black market premium is 61.8% today (461:745)

A good way to think about it is like whenever there's an abundance of pms supply, prices stay uniform.

Whenever there's an interruption to that supply a black market is created, and people do not want to stay in queues Endlessly for petrol because they need it now (so they buy in kegs)

A good way to close the gap between the official & black markets is to increase the supply of USD. What are the 4 sources:

• Export proceeds
• Crude Oil sales
• Remittances
• FDIs

What is holding it

Inspite of the security challenges in Cabo del Gado province that prompted the President of Mozambique to ask for the intervention of Rwandan Defense Forces to stabilize the onslaught against workers of Total Energies,

Mozambique is reporting that their LNG production output will rise to 5.8 million metric tonnes in 2023 and 9.1m metric tonnes in 2024,

Before long, the Joint Venture Partners in Mozambique LNG will be exporting LNG to South Africa for Eskom to plug the 4,000 MW of shortage in power generation,

Meanwhile Nigeria LNG is struggling

Rinu,

Thank you for your question. So in 2007, Soludo and OBJ created a provision in the CBN Act, that allows for the Federal Government to borrow from the Central Bank as a lender of last resort, in case they have a budget shortfall (and there's nowhere else to go)

https://twitter.com/SavvyRinu/status/1653818518574342151

And capped the limit at 5% of the total revenues the government gets from the previous year.

Between 2007 and 2015, President Yar'adua and GEJ took only a combined total of #869bn from this window.

Whereas, in the last 8 Years, President Buhari has collected 23.7 trillion naira

TCN as market operator has shut down supply to the DISCOs supplying Kaduna & Kano,

As the state governors begin to navigate the murky waters of the transfer of power (bill 33) from the exclusive to concurrent legislative lists, the Nigeria Governors Forum will need to sit down in meetings with GENCOs & help them work through issues like:

• Cost of servicing their turbines/FX for spare parts
• Cost of LPFO & what will happen when NGMC deregulates the prices of Gas (Dec 2023)
• Increase in transmission pipes to supply more gas needed by GENCOs

The Federal Government is one of three members of the Federating Unit:

• Federal
• State
• Local Governments

An AGF is Attorney General of the Federation (Federating units) not Attorney General of the Federal Government (One unit). There's a difference.

https://twitter.com/NagosBigBoi/status/1651943251652276225

Example was when the Supreme Court ruled against the Federal Government and the FG refused to comply,

It was the work of the AGF to file contempt charges (form 48) against the FG & the CBN (As an agent of the FG)

No one is talking about the constitutional crises from the violation of sections 205(1) of the PIA that was signed on August 16 2021

"Subject to the provisions of this sections, wholesale & retail prices of all petroleum prices will be based on unrestricted free market pricing conditions"

The imperative of compliance with the law is the reason NASS proposed in 5th alteration that the office of the Attorney General of the Federation be separated from Minister of Justice, and that funding for AGF come from National Judicial Council & not MoJ to avoid

I am building the financial model for a client & these numbers from NBET for January 2023 is very revealing:

EGBIN that does 1,320 megawatts (1.32 GW) gave the NBET capacity load worth 14,485,059,213 billion naira in its final settlement statement (FSS) for January 2023 The total remittance collections from end users and excess remittance collections came out at 58%.

The Govt thru:

• Payment Assurance Facility
• World Bank PSRO Loan
• FG grants

= 11.85%

Follow me, I am going somewhere,

This means there's an impairment of 30.25% that has

I still believe Trump made a horrible diplomatic mistake asking the Canadian Government to detain Meng Wanzhou (the CFO of Huawei, and daughter to founder).

That decision led to Huawei exiting the use of android and fast-tracking the development of its own OS- Harmony. It fast-tracked the stand-off for semi-conductor chips, and the enforcement of the Chinese National Security plan for tech that is making it attempt to annex Taiwan,

That decision showed China that the US Government will use the economy as leverage for territorial control

If Hong Kong is the financial capital Shanghai always hoped to be, Taiwan is the semi-conductor capital Shenzen is working hard to become,

Picks for decoupling:

• China wants to annex Taiwan 🇹🇼 like it did to Hong Kong🇭🇰(violating the 50-Year agreement it signed with the UK to keep HK as a special administrative zone until 2047). It wants Taiwan because of how strategic its semi-conductor industry is to its STEM
• China & Russia are developing an alternative to SWIFT (SPFY) by getting more Countries into AIIB framework
• China & Russia are deve

The government is struggling to cover the 11.5trillion in deficits for the 2023 budget,

Yet it's collecting $800m from the World Bank to fund palliative for removal of subsidy through conditional cash transfer to 10m households. The 2 most important items that determines growth in any budget are:

• Education
• Healthcare

In the 2023 appropriation act,

Education:

• allocation- 4.98%
• capex to allocation- 28%
• Personnel to allocation- 66%
• Overhead for ministry- 6%