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David Frost issues veiled threat to ditch Northern Ireland protocol

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David Frost

David Frost issues veiled threat to ditch Northern Ireland protocol

The UK government has issued a veiled threat to ditch the Northern Ireland protocol sooner rather than later, warning it “cannot wait for ever” for the EU to respond to its demands to rewrite the Brexit arrangement.

The Brexit minister, David Frost, said he had been waiting since July for a formal request for substantial changes to the protocol, which the UK has largely suspended over objections to checks on a range of goods including sausages.

In a speech to the Conservative party conference declaring the “long bad dream of EU membership” over, Lord Frost warned the EU that it must come back with “ambitious” proposals to renegotiate the protocol, which was drawn up to avoid a hard border on the island of Ireland.

But setting the scene for an imminent triggering of article 16, allowing the UK to unilaterally suspend some of the current arrangements, if the EU does not respond, he told a half-full hall in Manchester, he was not confident the EU would meet his demands.

“From what I hear I worry that we will not get one [a response] which enables the significant change we need,” he said.

“We cannot wait for ever. Without an agreed solution soon, we will need to act, using the article 16 safeguard mechanism, to address the impact the protocol is having on Northern Ireland.

“That may in the end be the only way to protect our country – our people, our trade, our territorial integrity, the peace process, and the benefits of this great UK, of which we are all part,” he said.

He attacked what he described as the EU’s “heavy-handed actions”, which he said had led to the protocol unravelling sooner than he had anticipated.

“Cross-community political support for the protocol has collapsed,” he said.

His claims came days after business representatives in Northern Ireland warned that triggering article 16 would have a chilling effect on trade between Great Britain and Northern Ireland and between Northern Ireland and the EU.

The EU’s ambassador to the UK, João Vale de Almeida, who was in the audience, said there was “nothing strange” or unexpected in Frost’s speech, promising a response to the UK’s demands within the coming weeks.

“We are looking forward to the solutions in Northern Ireland. We are ready to be flexible,” said.

He told delegates Boris Johnson knew he was “taking a risk” when he agreed the protocol in the “difficult autumn” of 2019 but the risk was “a worthy one, in the cause of peace and protecting the Belfast/Good Friday agreement”.

But he added: “We worried right from the start that the protocol would not take the strain if not handled sensitively. As it has turned out, we were right.”

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says the 2020 marginal field bid round exercise generated about N200 billion as well as $7 million in revenue for the federal government (FG).

Gbenga Komolafe, chief executive officer (CEO), NUPRC, made this known on Tuesday while issuing petroleum prospecting licences (PPL) to successful bidders in Abuja.

Marginal fields are smaller oil blocks developed by indigenous companies not exploited in the last ten years.

In May 2021, the Department of Petroleum Resources (DPR) — now NUPRC — completed the first successful bid programme after 18 years of bureaucratic bottlenecks.

Successful companies include Ardova Plc, Matrix Energy Ltd, Sun Trust Oil Company Limited, Deep Offshore Integrated Service Ltd, Island Energy Ltd, Sigmund Oil Field Ltd, among others.

Out of the 665 entities that expressed interest in the exercise, Komolafe said 161 PPLs were awarded to successful 2020 marginal fields companies while out of the 57 fields presented in the bid round, 41 were fully paid for.

He said 37 fields were also issued with the PPL, having satisfied all conditions for the award.

Komolafe said the marginal fields award initiative began in 1999 and was borne “out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.”

He added that the scheme was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.

“Since its inception, a total of 30 fields have been awarded, with seventeen 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010. 10 years later, in 2020, 57 fields were put up for bidding,” he said.

“It is significant to note that the passage of the Petroleum Industry Act has brought an end to the era of marginal field awards. Section 94(9) of the Act states that ‘no new marginal field shall be declared under this Act’.

“Accordingly, the minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with sections 73 and 74 of the Act.”

Meanwhile, Komolafe said revenue earnings in the country is not reflective of the upsurge in international prices of crude oil owing to sabotage, theft, as well as other operational challenges.

Consequently, he urged potential licensees to take advantage of the current market realities and promptly bring their fields to production.

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Naira depreciates further to N614/$ at parallel market

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Naira depreciates further to N614/$ at parallel market

The Nigerian naira has dropped to N614 against the dollar at the parallel section of the foreign exchange market.

The figure signifies a depreciation of N7 or 1.2 percent compared to the N607 it traded last two weeks.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos on Tuesday, said they purchase the greenback at N608/$, make a gain of N6, and then sell at N614.

At the official market, the naira also depreciated by 0.21 percent to close at N421/$ on Monday, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Nigeria operates multiple exchange rate windows ranging from the importers and exporters window (I&E) window, where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and others.

International organisations such as the World Bank and the International Monetary Fund (IMF) have constantly advised the Central Bank of Nigeria (CBN) to unify the official and parallel market exchange rates.

But Godwin Emefiele, the CBN governor, had said that despite advice offered by IMF and the World Bank, developing economies such as Nigeria had the liberty of adopting “homegrown solutions to their economic problems.

According to him, the managed floating exchange rate, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand.

“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said.

“When you allow that to happen, you will have an uncontrollable spiral on the naira.

“But what managed float means is that we have some measures in place to help control the spiral.”

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

These are challenging times for the federal and state governments as one major source of income to the federation account seems to be totally cut off.

On Monday, The National Petroleum Company Limited (NNPC) revealed it failed to remit monies to the federation account in May 2022 despite making N470.61 billion.

This is the fifth straight month NNPC has failed to credit the federal account while exporting crude at an average price of $100 per barrel.

Details of the June FAAC report obtained by The Harmattan News showed NNPC since the start of the year made N1.897 trillion, over N234.1 billion more than the expected revenue.

Sadly, however, NNPC said all the revenue had gone into various expenditure which includes petrol subsidy, oil search, Pipeline Security & Maintenance cost, National Domestic Gas Development and Nigeria Morocco Pipeline cost among others.

As expected, the bulk of the expenditure, N1.27 trillion, went toward recovery (also known as petrol subsidy).

In fact, NNPC said it has budgeted another N617 billion for petrol subsidy in June.

The report reads: “The Value Shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06 while the outstanding balance carried forward is N617bn .”

“The estimated Value Shortfall of N845,152,863,012.97bn (consisting of arrears of N617bn plus estimated May 2022

Value Short Fall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC Meeting,” it added.

The development means states have a tough road ahead and will have to look inwards to cover for the drop in federal allocations.

Already, some states have announced plans to slash workers’ salaries over dwindling income.

Kano Sate has already announced plans to slash workers’ salaries, following in the foot steps of the Ekiti State government that announced civil servants’ and political appointees’ salaries will be slashed in response to the present economic reality in the country.

Ekiti went further to suspend minimum wage implementation with no date of resumptions.

The Harmattan News had recently reported that pension contribution from governments dropped to a 16-year low in the first quarter of 2022.

From recent developments, it is more likely the figure will tank further.

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