IOCs still flare 80% gas in Nigeria

The Federal Government has declared that International Oil Companies (IOCs) operating in Nigeria’s multi-billion dollars oil and gas industry, still flare 80 per cent of gas. Minister of Petroleum Resources, Diezani Alison-Madueke, who said this, however, maintained that the series of gas projects including the oncoming petrochemical and fertiliser plants would take up a bulk of the gas currently flared thereby reducing gas flare and the harm it does to the environment.

A statement issued by the Nigerian National Petroleum Corporation quoted the minister to have said this while speaking at a plenary session of the 19th Nigerian Economic Summit titled, “Building a World Class Petrochemical and Fertiliser Industry in Nigeria.”

Gas flare, she said, has been reduced considerably over the past two years to 20 per cent.

Five proposed fertiliser plants, which include the Dangote Petrochemical and Fertiliser Plant to be built at Olokola, Indorama Fertiliser Plant at Eleme, Brass Fertiliser Company at Brass, Nagarjuna Fertiliser Plant at Ogidigben, and another plant by the International Fertiliser Association, are billed to come on stream by 2017.

NNPC Directs Oil Firms to Slash Cost of New Projects

The Nigerian National Petroleum Corporation (NNPC) has directed the International Oil Companies (IOCs) operating in the country to drastically cut over $30 billion they proposed as the cost of new products.

The projects have been stalled for several years due to the inability of the NNPC and the IOCs to reach an agreement on the costs.

Some of the projects, it was learnt, include Bonga South West, Bonga North East and Bonga North (Aparo), which are being proposed by Shell Nigeria Exploration and Production Company (SNEPCo), under a Production Sharing Contract (PSC) arrangement with the NNPC.

Some of the IOCs had accused the NNPC of deliberately stalling the execution of some of these multibillion dollar projects.

NNPC: We Won’t Bend Contracting Procedures for IOCs

The Nigerian National Petroleum Corporation (NNPC) has said that it would not compromise on its established processes of awarding contracts for major pending projects in Nigeria’s oil and gas sector to the benefit of International Oil Companies (IOCs).

Apparently raising eyebrows over media reports credited to some IOCs which had accused it of deliberately stalling the execution of some multibillion dollar projects in the petroleum sector, the acting General Manager Public Affairs of NNPC, Mr. Fidel Pepple, said in a statement in Abuja that the corporation will only adhere to established procedures in its contracting cycle than been made to compromise.

Pepple stated that the corporation will not be intimidated to abandon its firmly established process of contract award because of what it termed calculated media blackmail ostensibly by the IOCs and other interested parties.

He said in the statement that while the industry concern is normally expected in the processes leading to the award of major oil and gas projects, the NNPC has an established procedure of contract and project approval which includes conduct of economic analysis to establish project viability as well as the Federal Government’s interests from investments in the upstream.

The corporation also defended its Group Executive Director, Exploration and Production (GED, E&P), Abiye Membere, who was alleged to be behind a phantom contract splitting attempt of the Egina project as he allegedly did with the previous Bonga South-west project, saying that such allegation was totally misplaced and untrue.

ECOWAS court asks Nigeria to punish oil firms for pollution

The ECOWAS court has ruled that the Federal Government should make the oil companies to account for pollution in the Niger Delta.
In a suit SERAP v. Nigeria, filed by SERAP counsel, Femi Falana SAN, Adetokunbo Mumuni and Sola Egbeyinka, it was alleged that the government and six oil companies were involved in violation of human rights and associated oil pollution in the Niger Delta.
SERAP also alleged “oil spills and waste materials polluting water used for drinking and other domestic purposes; failure to secure the underlying determinants of health, including a healthy environment, and failure to enforce laws and regulations to protect the environment and prevent pollution.”
In the judgment which was delivered by a panel of six judges, Justice Awa Nana Daboya, Justice Benefeito Mosso Ramos, Justice Hansine Donli, Justice Alfred Benin, Justice Clotilde Medegan and Justice Eliam Potey, the court unanimously found the Nigerian government responsible for abuses by oil firms and made it clear that the government must hold the firms and other perpetrators to account.
The court also found that Nigeria violated Articles 21 (on the right to natural wealth and resources) and 24 (on the right to a general satisfactory environment) of the African Charter on Human and Peoples’ Rights by failing to protect the Niger Delta and its people from the operations of oil companies that have for many years devastated the region.

Outstanding multi-billion dollars oil and gas industry projects threatened

The delay by the Nigerian National Petroleum Corporation (NNPC) to approve some outstanding multi-billion dollars oil and gas industry projects is causing concern in the industry.

It was gathered that the NNPC’s inability to decide on the projects stemmed from the repeated failure to hold its periodic Group Executive Committee (GEC) meetings, where projects of this magnitude are usually reviewed and moved to the board, for endorsement and award.

The projects that would be affected if the NNPC fails to act include the Mobil’s Erha North phase two; the Satellite fields development project, phase two; and Total’s Egina project.

Owing to the delays, some international oil companies (IOCs) have rejected further extension on the negotiations beyond the end of this calendar year with NNPC on the affected projects.

Nigeria Loses $7bn Annually to Oil Theft

The International Energy Agency (IEA) has said that the Federal Government as well as local and international oil companies (IOCs) operating in Nigeria lose an estimated $7 billion (N1.05 trillion) to oil theft annually.

In its report, the 28-member agency said Nigeria’s crude oil production had dropped to the lowest level for more than two years in October 2012, due to the recent flooding in some parts of the country and widespread theft of crude oil. The IEA report noted that Nigeria’s crude oil output fell to 1.95 million barrels per day (mnbpd) in October, after production in recent months ranged between 2 mnbpd and 2.5 mnbpd. According to the report, the drop from September 2012 to October 2012 was around 110,000 barrels per day, with the country’s output falling to “the lowest level in around two-and-a-half years”.

The report however stated that by early November, production levels were recovering, with export loading schedules showing increased volumes for December.