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.

Nigeria warns oil block buyers could lose operating rights

Nigeria's state oil company warned investors interested in three shallow water oil blocks offered for sale by Chevron that buyers may lose the right to operate them. U.S.-based Chevron is selling minority stakes in joint ventures that operate five oil blocks. The majority owner is the Nigeria National Petroleum Corporation (NNPC). Nigeria wants more direct ownership of its oil and gas through NNPC or local firms, leading several oil majors including Chevron to dispose of assets in Africa's top oil and gas producer. NNPC published a notice in local newspapers saying that there had been a "recent high level of interest shown by various investors in the ongoing divestment program for OMLs 52, 53 and 55 by Chevron Nigeria". It reminded those considering investing that, although Chevron currently operates the blocks, the state oil firm has the right to take over the operatorship as majority shareholder. Chevron owns 40 percent of the blocks and NNPC 60 percent. "Chevron shall cease to be the operator upon assignment of their participating interest," it said. "Therefore prospective buyers should note that automatic operatorship does not come with the acquisition of any of these blocks." Not having operatorship poses significant risks for would be investors in the fields, not least that the NNPC's development subsidiary, NPDC, lacks the finance and expertise. It has usually had to call in a third-party operator anyway. The notice seemed calculated to avoid messy tussles that ensued when Shell sold some oil blocks two years ago.

FG feigns ignorance of Chevron’s plans to sell oil bloc stakes

The Federal Government, the majority partner in the Oil Mining Lease (OML) 35 and 38, has denied knowledge of plans by Chevron Corporation to sell stakes in two Nigerian oil blocks.

This declaration, may have however, swiftly heightened fears among prospective investors in the blocks.

Chevron is, according to the Nigerian National Petroleum Corporation (NNPC), expected to officially inform the government, which, through the NNPC owns about 55 per cent stake in the blocks purportedly up for sale before announcing such.

The oil major is the latest International Oil Company (IOC), operating In Nigeria’s multi-billion dollars oil and gas industry, seeking to dispose of assets in Africa’s biggest oil producer. Joint blocks’ owners like Royal Dutch Shell, Italy’s Eni and France’s Total have sold several blocks.

The two newest blocks for sale also hold an unknown amount of natural gas but there has been no production yet, Reuters reported quoting two industry sources.

Chevron to Sell 40% Stake in Two Oil Blocks

Chevron Nigeria Limited (CNL) will be selling its 40 per cent stake in two Nigerian shallow water oil blocks in Oil Mining Leases (OMLs) 83 and 85. Chevron has 40 per cent interest in the two blocks.

The two blocks OML 83 and OML 85 hold an estimated 200 million barrels of oil and an unknown amount of natural gas but there has been no production yet. Chevron did not give details of reserves. The planned sale follows several oil majors’ sale of assets onshore or in the shallow waters of the Niger Delta over the past few years.

Oil industry analysts believe that the slow pace of deliberation in the passage of the PIB amongst all these other factors, have added to a growing uncertainty in the country’s oil and gas industry.

Joint owners, Royal Dutch Shell, Italy's Eni and France's Total, have sold several oil blocks in the oil-bearing region, while eventual buyers of these included UK-listed firms Heritage Oil and Eland Oil.

Chinese-owned Addax has also said it was interested in buying more Nigerian oil assets in addition to what it has already.

Chevron's blocks are at the exploratory stage, unlike Shell's already producing fields, which will make valuations less straightforward, one banking source said.

Chevron owns a 40 per cent stake in 13 shallow water blocks with the Nigerian National Petroleum Corporation (NNPC) and also has several deep offshore assets.  Its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas.

It is the third-largest oil producer in Nigeria and one of its largest investors, spending more than $3 billion annually. It operates under a joint-venture arrangement with NNPC and has assets on land, swamp and near-offshore concessions covering approximately 2.2 million acres (8,900 sq. km) in the Niger Delta region.

NNPC Unveils $16bn Gas Infrastructure Programme

The Nigerian National Petroleum Corporation (NNPC) has said preliminary works on the gas infrastructure development project which is expected to attract about $16 billion worth of investment to the proposed Ogidingbe gas-based industrial park will commence next month.

According to the Group Executive Director, Gas and Power of the NNPC, Dr. David Ige, who provided a timeline of activities for the project at the recently concluded Offshore Technology Conference (OTC) in Houston-Texas, United States, work is envisaged to commence on the Ogidingbe Free Trade Zone (FTZ) with the full infrastructure development and Pre-Front End Engineering Design (FEED) of the Central Processing Facilities (CPFs) in June this year.

Ige in a statement from the acting General Manager Public Affairs of NNPC, Tumini Green, explained that the Final Investment Decision (FID) for the CPFs was however expected to be achieved in June 2014.

He noted that by January 2015, construction work on the CPFs would begin while work on the real estate development of the Ogidingbe area which will service the industrial park would begin in March 2015 and erection works at the petrochemical complex was also slated to commence between 2016 and 2017.

Reps to probe Alison-Madueke, NNPC, Shell, others over $750m oil deals

House of Representatives is to probe Minister of Petroleum Resources, Dieziani Alison-Madueke, the Nigerian Petroleum Development Company (NPDC), Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC) Ltd, Atlantic Energy Drilling Concept, Septa Energy Ltd and some other entities over their alleged involvement in illegal allocation of seven oil blocs in the Niger Delta.
The loss to government from the said oil bloc deals amounts to $750 million.
The House decided to probe key players in the deals following a motion brought under Matters of Urgent National Importance by Victor Afam Ogene, who, while introducing the issue, cited Order viii, Rule 46/Rule 49 of the House to support his position. Ogene in the motion drew the attention of the House to last week’s protest staged at the National Assembly complex by representatives of oil-producing ethnic nationalities from Delta State. The protesters had alleged fraudulent allocation of some marginal oil fields, including oil mining leases (OMLs) 4, 26, 30, 34, 38, 41 and 42.
The House at the end of the debate resolved that an ad-hoc committee be raised to handle the probe. The committee is to be given four weeks to conduct its investigations and report back to the House in plenary.

ExxonMobil Signs Agreement on 500MW Power Plant

Mobil Producing Nigeria Unlimited (MPN), operator of the Nigerian National Petroleum Corporation (NNPC) and MPN Joint Venture, has signed a Seller’s Representative Agreement (SRA) for the Qua Iboe Power Project, located at Mobil’s Qua Iboe terminal in Akwa Ibom State.

The proposed power project includes the construction of a 500megawatt-capacity power plant as well as a 56-kilometre transmission line connecting the plant to the national grid at Ikot Abasi, also in the state.

MPN’s General Manager in charge of Public and Government Affairs, Mr. Paul Arinze, said in a statement that the signing of the SRA was “a critical part of the overall commercial framework that enables MPN to undertake power activities and facilitates the sale of power by MPN to Nigerian Bulk Electricity Trading Plc for itself and on behalf of the NNPC.”

Also speaking on the agreement, the Managing Director of Mobil Producing Nigeria, Mr. Mark Ward, said the project “is a tangible demonstration of MPN’s commitment to Nigeria and supports the president’s priority of providing electricity to the country.”