Set aside risk funds, NNPC tells national oil firms

National oil companies should set aside risk funds to minimise the impacts of unforeseen events, the Nigerian National Petroleum Corporation has said.

NNPC’s Group Executive Director, Umar Ajiya, said this during a dialogue on responses by governments and the oil industry to the COVID-19 pandemic in the extractive sector.

The dialogue, which was hosted by the African Development Bank’s African Natural Resources Centre and the African Legal Support Facility focused on South Africa, Ghana, Nigeria and Kenya.

Ajiya said Nigeria’s heavy reliance on oil revenues, oversupply and the dramatic fall in demand had impacted its economy.

He was quoted in a statement issued on Friday by an official in the AfDB’s Communications and External Relations Department, Kwasi Kpodo, as saying, “The Federal Government has had to cut its expenditure and reschedule debt, where necessary.”

The AfDB said the dialogue brought together policymakers and stakeholders to evaluate the effectiveness and sustainability of the COVID-19 responses and measures in focal countries.

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In his remarks, the Advisor to Ghana’s Lands and Natural Resources Minister, Ben Aryee, predicted a brighter outlook for the Ghanaian gold sector in 2021.

“Gold has become a safe-haven and an investment of choice for many investors, as gold prices continue to increase due to economic uncertainty,” he stated.

Ghana plans to inaugurate a $400m to $500m Initial Public Offer at the London Stock Market in October, in a bid to take advantage of the precious metal’s strong performance this year.

The Acting Secretary of Petroleum at the Ministry of Energy and Petroleum in Kenya, James Ng’ang’a, said the COVID-19 pandemic had led to difficulties in contract negotiations with oil and exploration companies.

The Chief Executive Officer of the Ghana Chamber of Mines, Sulemanu Koney, called on mining companies to establish good relationships with communities, which they could leverage on in the event of a crisis.

Several economies in Africa are sustained by the extractive industry, with most national budgets dependent on mining and petroleum exports.

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In separate presentations, the Director, UNECA, Central Africa, Antonio Pedro, and the Executive Director, South Africa Resource Watch, Claude Kabemba, urged governments and industry players to implement the Africa Mining Vision fully to curb the impact of the pandemic on the sector.

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