France’s Total SA, Europe’s second largest oil company, has put one of its offshore Nigerian oil fields up for sale again, the company said, after a 2012 deal with Sinopec Corp failed.
Total has hired BNP Paribas to find buyers for its Usan deepwater oil field located in the Nigeria Oil Prospecting Lease (OML) 138, which could be worth about $2.5 billion, according to sources familiar with the matter.
“We have selected an advisor to pursue the sale process of Usan,” a spokeswoman for Total said.
BNP Paribas declined to comment.
Usan is not expected to be an easy sale for Total because deepwater exploration requires significant investment and the new owner’s returns could be limited if Nigeria rises taxes on foreign investor profits as part of a long expected sector reform called the Petroleum Industry Bill (PIB).
Before deciding to sell the asset, which is about 100 km off the coast, Total was planning to drill several horizontal deepwater wells and build a deep offshore drilling rig.
“Anything in Nigeria is a tough sell,” said a London-based sector banker. “And anything with capex is even tougher these days. Very few players would be willing to acquire assets that have big investment commitments attached.”
Total said in November 2012 it had sold its 20 percent interest in the field to China’s Sinopec for about $2.5 billion in cash. It is not known why the sale failed.
The Nigerian National Petroleum Corporation (NNPC) is the OML 138 concession holder. Other partners include Chevron, ExxonMobil and Nexen, which is owned by Chinese state company CNOOC Ltd.
Total is working on several asset disposals to meet a $10 billion 2015 cash flow generation target. The French group is seeking to raise about $2.5 billion through the sale of its Super Glu maker Bostik, Reuters reported.
A deal for the Usan field may have to involve a local company because Nigeria, Africa’s top oil producer, is renewing efforts to recoup the benefits from its oil and gas sector.
But few Nigerian players would have the money and ability to complete the necessary drilling and building works, several sector bankers said.
This means Total’s hopes may lie again in the hands of Asian buyers like China’s CNOOC, which already has an interest in the USAN field, or India’s ONGC and Indian Oil.
International oil & gas majors are not expected to show interest because most of them are under pressure from shareholders to cut capital expenditure and improve dividends. Most are seeking to leave Nigeria instead.
Earlier this year, ConocoPhillips sold its Nigerian operations to Nigerian oil company Oando for $1.5 billion.
Chevron is also in the process of selling assets in Nigeria and Shell recently sold off four oil fields in the West African country.
Taleveras and Transcorp are among the best placed Nigerian potential buyers because they have the strongest financial firepower, said one of the sources.
A sector banker said state-backed NNPC could also be interested though it already has a number of commitments with foreign investors, Oando is digesting the ConocoPhillips deal and Seplat is focused on Chevron’s assets.
“(Total) needs a couple of local players with deep pockets. The international banks aren’t showing as much interest as they were, and the local banks no longer have capacity to raise that kind of debt,” said a local industry source.
Commodity traders and miners such as Glencore or Mercuria could also be interested, in theory, as they have been actively hunting for oil & gas assets to diversify from volatile mining operations, said several sector bankers.
But trading houses may not have the required expertise to operate deepwater assets, said one of the bankers.
Glencore and Mercuria were among the short-listed bidders for Shell’s Nigerian energy assets worth about $3 billion, sources previously told Reuters.
RBC Capital Markets said in a report this week that Total was likely to miss production and cash flow targets for next year as it grapples with project disruptions. Total will update the market at a mid-year outlook investor’s day on September 22.
NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution
Nigerian Communication Commission (NCC) has warned telecom consumers to desist from using illegal GSM boosters.
The commission also said that anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.
GSM boosters are devices that transmit and receive telecommunications signals and can therefore interfere with other radio frequency equipment.
Ikechukwu Adinde, director, public affairs, NCC, said in a notice published on NCC website, that only licensed network operators are allowed to use GSM boosters.
The booster, also known as amplifier or repeater is made up of three main elements – exterior antenna, amplifier, and interior antenna.
They form a wireless system to boost cellular reception
“Members of the public should note that, willful interference with any wireless telegraphy is an offence under Section 16 of the Telegraphy Act, 2004,”it said
The agency said it will not condone any flagrant breach of this law.
It has also enforced measures to prosecute offenders.
Accordingly, monitoring mechanisms have been put in place and anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.
“Any member of the public with useful information regarding the illegal use of GSM Boosters should contact the Commission on 09-4617000/7351 or send an email to [email protected],” the notice said.
“Individuals desirous of using GSM Boosters should note that they can only do so in conjunction with licensed network operators,” it added.
Tizeti announced that it selected Nokia’s Fastmile Long Term Evolution (LTE) technology to enable usprovide superior internet services to over 1 Million subscribers in Port Harcourt, Edo and Ogun in Nigeria.
Tizeti will deploy Nokia’s AirScale Base Station TDD-LTE and FastmileFixed Wireless Access (FWA) gatewaysto deliver premium internet and Virtual Private Network (VPN) services to Residential, Small and Medium Enterprises (SMEs).
The solution will also enable Tizeti’sto deliver a more robust, high-speedinternet service to subscribers and the flexibility to seamlessly evolve to 5G Fixed Wireless Access when needed.
Nokia’s FWA solution enables Tizeti to fast-track broadband access and provide a best-in-class broadband experience to its subscribers.
Nokia’sAirScale Base Stations ensure high-quality connectivity and coverage and enablesTizeti to evolve the network in line with customer demand.
Nokia’sFastmilegateways connect wirelessly to the existing network to createa fastbroadband connection and enhanced Wi-Fi experience in the home.
The Nokia Network Services Platform will help Tizeti to simplify operations and quickly respond to changing market demands.
Kendall Ananyi, Tizeti, said:“We are committed to providing the best-in-class network experience to our subscribers. We are confident that Nokia’s proven technology and expertise will help us differentiate our services based on quality. This a crucial project for us as it introduces LTE in our networks and allows us to bring new and innovative services to our subscribers.”
Eniola Balogun, Nokia, said:“We are thrilled to work with Tizeti on the initiative to upgrade their network to bring the latest products and services to its subscribers. Nokia Fastmile will help Tizeti to cost-effectively enhance the customer experience.
The project will also enable them to delight their subscribers by providing more reliable data services.
On the other hand, Tizeti will benefit by adding new revenue streams.”
Risk Assets Push Higher on Vaccine Hopes; Eyes on the Fed
By Hussein Sayed, Chief Market Strategist at FXTM,
After two consecutive weeks of back-to-back declines, global stocks kicked off Monday with solid gains amid a surge in M&A activity and positive signs towards vaccine developments. Currency markets were little changed ahead of a busy week of monetary policy announcements, while Oil and Gold ticked slightly higher.
The two big deals announced over the weekend were Softbank’s plan to sell chipmaker ARM to Nvidia for more than $40 billion and Gilead Sciences to acquire Immunomedics for a price tag of $21 billion. Meanwhile, on the vaccine front, AstraZeneca resumed its phase-3 trial on Covid-19 after being suspended last week following a neurological illness developed in one participant, and Pfizer announced that its vaccine could be distributed before year-end if found safe and effective.
Central Banks will take centre stage this week with the Federal Reserve, Bank of England and Bank of Japan all due to announce policy decisions. Out of the three meetings, the Fed is likely to be the most watched following its historic shift towards average inflation targeting. The big question remains how will the FOMC put this policy into action?
From what we know now, the Fed is set up to keep interest rates near zero for a long time, possibly for several years. Given the new framework, any spike in inflation won’t translate into immediate rate hikes as the Fed wants to compensate for the lost years when they have failed to hit the target. The dot plot will be the key guide for investors and traders alike. If inflation projections remain at 2% or below for the foreseeable future, this will solidify market expectations for a low rate environment for many years to come. That said, Jay Powell would still have to explain in more detail how the new framework will be translated into policy action.
In June’s economic projections, the Fed anticipated unemployment would be at 9.3% by year-end, but, in August, unemployment was well below that forecast at 8.4%. Many other economic data surprised to the upside during the June – August period in a clear sign that most economists were overly pessimistic towards the strength of the recovery. However, there is still a considerable amount of uncertainty given the latest surge in Covid-19 cases worldwide and the US, especially as we get closer into the winter season. A second wave will undoubtedly put the recovery at risk in the final quarter of the year and it will be interesting to see the Fed’s view on that issue.
As for the market selloff over the past two weeks, the Fed isn’t likely to show any signs of concern. In fact, policymakers should be satisfied with the pullback as the risk of a bubble in several assets has been growing due to the Fed’s extremely accommodative policies. Unless we see another 10 -15% drop, do not expect the Fed to intervene.
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