Sahara in Extended Well Test to First Oil In 2015

Indigenous energy group, Sahara Energy, is carrying out an extended production test on the Oki field in Oil Prospecting Lease (OPL) 274 in Niger Delta.

The test according to a Africa Oil + Gas Report is preparatory to first oil from the field in the first half of 2015.

The company successfully drilled two appraisal/development wells and an exploration well between September 2013 and August 2014, with the first appraisal/development well logging 64metres net pay in 12 sands and flowing 3,129 barrels of oil per day ( BPD) in several zones.

The second appraisal/development well encountered 91 metres net in 19 reservoirs and tested at 2,397 BPD. Sahara did not disclose the number of sands that were tested.

The exploration well found 30 metres net oil sands in four levels and flowed 1,600 BPD. The company reported that seven new pays showed up in the two appraisals.

Oki field straddles NPDC operated Oziengbe South Field in Oil Mining Lease (OML) 111, and there is unitization agreement between the two companies.

Under the terms of unitization, Sahara will produce into the NPDC operated flowstation on the Oziengbe South Field. The unitized field is named Oki-Oziengbe South. Sahara installed four flowlines to the flowstation.

The company forecasts initial production of 4,000 BPD from Oki-Oziengbe South-4, which is the first of the two appraisal/development wells.

“This will double to 8,000 BPD in 2015, once Oki-Oziengbe South-5 is completed”, according to Curtis Cohen, Chief Operating Officer, Sahara Group, Upstream.

Existing facility at the Oziengbe field constrain production delivery, he told the Lagos Oil Club on September 30, 2014. The company looks forward to new Flowstation and plant capacity expansion to grow production.

Afren installs Platform Jacket for CFBx

Afren plc weekend declared that it is installing the platform jacket for the Ebok Central Fault Block Extension (CFBx).

West African Venture, also called Waventure, a subsidiary of Sea Trucks Group, also announced that Afren awarded it the installation contract for a 60-km pipeline, PLEM, flexible riser and spool pieces, as well as transportation and installation of jackets, piles, bridges, and topsides.

The installation of the decks and bridge will complete in early January 2015 once the wellhead jacket at Okwok has been installed; following which Afren and its partner Oriental Energy Resources will commence the hook up and commissioning of the CFBx platform.

The work program at the CFBx is to include up to nine new wells to be drilled and brought on-stream by the end of 2015 targeting both producing and undeveloped reservoirs. 

Elsewhere at the North Fault Block (NFB), the partners continue to make good progress and are targeting completion of the third new producer by mid-December 2014.  The forward program at the NFB will incorporate up to an additional five wells by year-end 2015.

The partners also began drilling on the Ameena East prospect. The well is being drilled with the Shelf Adriatic I drilling rig. 

The Ameena East prospect will be targeting 65 million barrels of gross unrisked resources in zones of prospectivity in the Biafra intervals that are productive north of the acreage, with secondary objectives in the Qua Iboe reservoirs equivalent to those at the Ebok and Okwok fields.  The drilling campaign at Ameena East is expected to be completed in December.

Drilling at the Ebok Deep exploration tail targeting 50 million barrels of gross unrisked resources in the deeper Qua Iboe and Biafra reservoirs is expected to commence in Q4 2014 following the completion of the third new producer at the NFB.

Interim Chief Executive of Afren, Toby Hayward, commented: “With incremental new production to be brought on stream from both the CFB and NFB platforms, as well as from the Okoro FFD, Okwok, OML 26 and OML 113 developments, Afren is expecting to deliver strong production and cash flow growth in 2015 and beyond.  We are pleased to have commenced our drilling campaign at the Ameena East prospect and are excited about the potential there and at Ebok Deep.”

Waventure announced that Afren awarded it the installation contract for a 60-km pipeline, PLEM, flexible riser and spool pieces, as well as transportation and installation of jackets, piles, bridges, and topsides.

A number of the company’s marine support vessels and barges will be deployed for the project, including two of its DP3 pipelay construction vessels.

Offshore Activities are expected to start in Q1 2015.

“With incremental new production to be brought on stream from both the CFB and NFB platforms, as well as from the Okoro FFD, Okwok, OML 26 and OML 113 developments, Afren is expecting to deliver strong production and cash flow growth in 2015 and beyond,” said Toby Hayward, Afren interim chief executive.

“We are pleased to have commenced our drilling campaign at the Ameena East prospect and are excited about the potential there and at Ebok Deep.”

 

NDPR to spend $135 M On Omerelu Development

Niger Delta Petroleum Resources will spend $135 million, or 54% of the first tranche of equity it is seeking, to develop the Omerelu field, in Oil Mining Lease (OML 53) in the eastern Niger Delta basin.

The bill is for new wells, new flow station and a mini gas plant that will ensure the company flares no gas at first oil, according Africa Oil and Gas Report.

A key challenge for the field is flow assurance; the oil is heavy and will need gas lift solution.

“Unlike Ogbele, we cannot do ‘poor boy’ type or one step at a time Field Development Plan for Omerelu”, says Layiwola Fatona, CEO of NDPR.  Ogbele is the company’s first field, which has been in production since 2005, with current output at 3,500 BPD.

The challenges of getting Ogbele into production presented a tough learning process for NDPR.

Money for the Omerelu project will be taken from the first tranche of the $450 Million equity capital that NDPR is in the process of raising.

That first tranche is $250Million. At its last Annual General Meeting, in mid-September 2014, the NDPR board received shareholders’ approval “to raise additional capital of up to $450,000,000, whether locally or internationally, thgrough any funding method that the directors may adopt, including a public offer or special placing of shares, subject to the approval of the appropriate regulatory authorities.”

NDPR executed a farm in agreement with American major Chevron earlier this year after a drawn out process which began when Chevron farmed out Ogbele field to NDPR in 2000. At the time, the two companies agreed that NDPR would have the right of first refusal to farm in to Omerelu.

The field, for now, has an estimated thirteen million barrels of oil (13MM Bbls STB (P50)) and ultimate gas recoverable of eight billion cubic feet   (8 Bscf) of gas, “which will significantly augment NDPR’s booked reserves and future (short to medium term) production output, according to NDPR.

 

Conoil’s Production Plunges to 9,000 BPD

Indigenous independent exploration and production company, Consolidated Oil and Gas Company Limited also called Conoil Producing might be facing acute revenue downside as its production falls at a time of low oil prices.

According to Oil + Gas Reports, Conoil has had its dipped to 9,000 barrels of oil per day (bpd), from close to 11,000 BPD in the early to middle of the year.

Conoil is said to be struggling with optimum output in two different production hubs with 1,000 bpd on the western flank of the Niger Delta and 8,000 bpd in its Otuo South field, at the mouth of the continent’s most prolific basin.

These figures are instructive. Conoil was the first real Nigerian operator of a hydrocarbon acreage, winning its first license as one of the several local firms granted discretionary awards in 1991, during “The Indigenous Thrust”.

The company made history when it claimed to have made a discovery in that asset (now Oil Mining Lease (OML) 103) in Christmas of 1993.At the height of its powers, Conoil produced over 35,000 bpd between 2005 and 2006.Production could readily have been more.

“Our overall potential hydrocarbon resources of over 1.0 Billion Barrels of Oil and 7.0 Trillion Cubic Feet of Gas, helps position us in Africa as the flagship of the independent oil and gas companies”, the company claims on its website.

Conoil is the operator of six blocks in the Niger Delta. Its asset include OML 290, which it describes as its latest (PSC agreement was signed in October 2008); OML 59,for which it signed a technical operator agreement with Continental Oil and Gas Limited (CONOG) in 1998, to provide 100% funding and technical service agreement to operate; OML 136; Oil Prospecting Lease (OPL) 2007; OPL 257 as well as Block 4in the Joint Development Zone (JDZ), in which it is 25% equity holder.

This is the lowest equity Conoil holds in any asset. It doesn’t like having minority positions. Conoil has, however, largely left these assets to lie fallow for most of the past 10 years.

Although TOTAL farmed in for a 40% participating interest in OPL 257 andOML 136 on 17th October, 2006 and 17th May, 2007 respectively, Conoil has had challenges implementing a work programme with its more deep pocketed partner, especially in the Egina South prospect in OPL 257, which could be readily tied to the Egina field, currently in development.

In the last two years, however, Conoil has been more aggressive working on the upside potentials of OPL 290, OML 2007 and OML 59. It has made deeper pool discoveries in OML 59 and proved up new oil in OML 2007 and OPL 290, which, experts say, could push production to 60,000 BPD by 2018, if corporate governance issues don’t stand in the way.

 

Umugini Pipeline buoys Production From Oando’s Ebendo Field

 

 

 

 Exploration and production division of Oando Plc, Oando Energy Resources (OER), has announced completion of the 51km Umugini pipeline located in Niger Delta.

The Umugini pipeline is a common access production flow facility that is conceived to relieve a group of indigenous players of accounting disputes with Nigeria Agip Oil Company (NAOC) whose export pipeline is hitherto used for production evacuation from a number of clustered marginal oilfields in the area.

The pipeline which has flow capacity for 45,000 barrels of oil per day (bbls/d) now provides Oando an alternative evacuation route for crude oil produced from the Ebendo Field through the Trans Forcados export pipeline, ensuring maximized production flow from and enhanced revenue. 

Oando stated that oil production capacity within OML 56 has grown to 7,140 barrels of oil equivalent per day (boepd) gross for OER and Energia Limited, following the successful drilling of Ebendo wells 5, 6, and 7 over the last year.

Energia Limited is the operator of the asset.

However, export had been restricted to 3,093  bpd via the Agip operated Kwale-Brass NAOC/JV infrastructure, in which OER currently has a 20% interest through the recent $1.5Bn acquisition of ConocoPhillips Nigerian Oil & Gas Business.

Since the production of first oil in 2009, OER, in conjunction with Energia, has spurred the growth of the Ebendo field by 400% from 1,600  bpd to 8,050  bpd in 2014 with 4 additional wells.

The completion and commencement of operations on the Umugini pipeline ensures the Ebendo field can now produce at an increased capacity of 11,250  bpd via the 12” evacuation route to NPDC/Shell’s Eriemu station to the Focados terminal.

“This complements the existing 2,500  bpd evacuation via the cluster GGF and Agip Kwale station to the Brass terminal,” the company stated.

Commenting, Pade Durotoye, CEO Oando Energy Resources said: “We are extremely delighted with the achievement of this key milestone. The completion of the Umugini pipeline will enable us fully maximise the value of our investments to date on the asset, and provides the latitude for further profitable development of prospects and resources identified in Ebendo.”

Ebendo is located onshore, in the central Niger Delta, approximately 100 km north-west of Port Harcourt and covers an area of 65 km2 (16,062 acres). The License includes two fields, Ebendo and the Obodeti field. Oando Energy Resources holds a 42.75% working interest in the field. 

With Phase 3 development expected to commence in Q1 2015, the completed Umugini pipeline effectively doubles the throughput from Ebendo field by 3,727, and as crude oil prices fall, there is an added incentive for producers to drive production volumes to sustain revenue from sales.

 Previously firms like OER, as well as Mart Resources and its partners on the Umusadege Field had to rely on the Agip operated Kwale-Brass infrastructure to get their production to the export pipeline. Over the past couple of years the Agip pipeline has seen some shut-ins for repairs which constrained production for some of the operators in the Niger Delta.

 

 

 

 

Shell Targets $15 b From 2015 Nigerian divestments

Indications are positive that Shell will progress with divestment of brownfield assets in Nigeria next year, heightening the uncertainty in the company’s asset shed out in the country which investors have criticized as unpredictable.

According to Royal Dutch Shell, 2015 will see the company divesting its 30 percent stake and partners’ additional 15 percent interest in unspecified number of operated joint venture assets.

According to a statement from the company, the planned divestment will translate to $15 billion of liquid cash for the Royal Dutch Shell in 2015 as it tries to boost cash flow.

Shell’s Upstream Director, Andrew Brown, stated that the oil company was adopting the divestment programme as part of its global strategy to raise operations funds in the face of global oil market adversity which has seen crude prices slumping from over $100 per barrel to about $62 per barrel.

The UNION reports that global oil prices have dropped by around 30 percent over the past four months, putting heavy pressure on the balance sheets of oil companies already struggling to cut spending.

“We do have a continuous need to recycle our portfolio. $15 billion is still only a few percent of our total assets and we haven’t got any plans to refresh that target,” Brown told reporters.

Mr. Brown’s statement came as Shell Petroleum Development Company of Nigeria (SPDC), a subsidiary of Royal Dutch Shell, declared completion of the assignment of its 30% interest in Oil Mining Lease 24 (OML24) and related facilities in the Eastern Niger Delta to Newcross Exploration and Production.

Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) have also assigned their interests in the lease, ultimately giving Newcross a 45% interest.

Total cash proceeds for Shell amount to some $600 million.

OML24 covers an area of some 430 sq km and includes the Awoba, Awoba Northwest and Ekulama fields and related facilities.

The divested infrastructure includes three oil flow-stations and three gas processing plants, in addition to various oil and gas pipelines.

The divested fields produced on average around 13,000 boed during the first half of 2014.

NLNG Rallies Investors for Badagry Dockyard

Nigeria LNG (NLNG) Limited has reached out to the investment community—representatives of banks and other financial institutions— promoting the potential for a new dockyard in the country.

The dockyard, for location in Badagry, follows the conclusion of feasibility studies by Royal Haskoning DHV, an independent, international engineering and project management consultancy headquartered in the Netherlands.

Spokesman for the company, Dr. Kudo Eresia-Eke, stated that feasibility studies for citing the dry-dock were carried out on seven places—Badagry, Lekki FTZ, Ladol Island, Ogogoro Island, Olokola FTZ, Onne, Bonny— before consultants identified Badagry as the best-in-class location for the dockyard.

The studies come as one of the benefits of NLNG’s $1.6 billion contract with shipbuilders, Samsung Heavy Industries and Hyundai Heavy Industries, for the building of six new vessels.

NLNG, leveraging on the agreement with the ship manufacturers, secured a number of lucrative opportunities beneficial to the Nigerian economy including the training of about 600 young Nigerians in various aspects of ship-building, procurement of goods from Nigerian companies and the feasibility studies for building a dockyard.

 “This dry-dock, when completed, holds huge potential for the investment community. Our LNG vessels and very large crude carriers (VLCC) of other companies in the oil and gas, and marine industries, which are currently maintained overseas, resulting in millions of dollars being spent overseas, will soon be maintained in-country with tangible value-adds for the Nigerian economy,” said Babs Omotowa, NLNG’s managing director and chief executive officer at the investment forum held at the proposed site for the dockyard in Badagry.

Observers of Nigeria’s maritime sector have long lamented the absence of an operational dockyard to cater for very large crude carriers (VLCCs) and liquefied natural gas (LNG) carriers as existing dockyards can only handle smaller vessels.

Lack of such a facility has meant that owners of large vessels in Nigeria and some add, the West African region, have had to pay large sums of money todocking facilitieslocated mainly in Asia, Europe and the Americas that can accommodate such large vessels.

The dry-dockis also planned to be operated and managed according to international standards, and when operational,willgenerate revenue and add jobs to the economy.

“I can confidently tell you that if we have a dockyard here, Nigeria LNG with its current 13 vessels in our fleet will be one of your patrons. When our company receives its six additional vessels from Samsung Heavy Industries and Hyundai Heavy Industries, those vessels will also be maintained here. I have no doubt the other players in Nigeria’s oil and gas industry will also be looking to service and maintain their vessels at this ship yard once it becomes operational,” said Capt. Temi Okesanjo, Nigeria LNG’s General Manager, Shipping Division speaking to investors at forum to discuss the potential of the proposed dockyard.

 

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%),  Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).

 

Nigerdock leads hope for local FPSO topsides integration

Government’s drive to progress the gains of the Nigerian Content policy from small to medium technical job packages to big ticket jobs mustered momentum with the delivery of the biggest locally built production facility by Nigerdock.

In the landmark capacity demonstration, Nigerdock loaded out the Meren Gas Gathering and Compression Platform and also the entire structures for the Sonam Non-associated Gas Wellhead Project.  

The Nigerian Content Development and Monitoring Board (NCDMB) described the feat as monumental leap towards full in-country fabrication of production facilities, including the ultimate Floating Production, Storage and Offloading (FPSO) vessel traditionally contracted to foreign firms and built in foreign fabrication yards.

Executive Secretary of the NCDMB, Mr. Ernest Nwapa, an engineer, stated that the delivery of the job by Nigerdock on schedule and budget signaled evolution of local industrial capacity for fabrication of the nation’s production facilities, a critical factor, according to him, in the policy strategy to domicile oil industry jobs and retain the huge industry budget for in-country spend.

Specifically, Mr. Nwapa pointed at the scale and complexity of the job as major progress towards the goal of in-country of topsides integration of floating production, storage and offtake vessels in Nigeria to weed out all costs associated with execution of similar projects in foreign fabrication yards.

He said the capacity and sophistication of fabrication facilities in Nigerdock, it has have made it reasonable to start considering full in-country fabrication of oil and gas production facilities.

The UNION reports that Nigerdock which built Nigeria’s firs locally made single point mooring buoy for the first big deepwater field development in the country has been recording leading milestones in local fabrication of sophisticated facilities for the industry.

The company had also loaded out Nigeria’s first locally fabricated wellhead platforms for joint venture fields operated by Mobil Producing Nigeria Unlimited as well as industry biggest SPM buoys deployed in Nigeria’s deepwater fields offshore Niger Delta.

From ship repair and rig repairs, fabrication of pressure vessels, pipes, jackets and many other industry facilities, Nigerdock is fast becoming the face of local content in the African industry play.

In delivering the Meren Gas Gathering and Compression Platform and the entire structures for the Sonam Non-associated Gas Wellhead Project, Nigerdock stated that it fabricated over 7,000 tons of steel over the last 3 years.

Executive Director of the Company, Mr. Mansur Jarmakani, pointed out that the MEREN and SONAM Jackets are the largest of such facilities fabricated in-country, adding that each of them weighs well over 1,000 tons.

With over 700 workers on average throughout the whole project duration, he said,  “SONAM NWP Topside is the largest in-country built at total weight of 3,500 tons fully equipped before load-out.”

He added that the copany has achieved 1.7 million free man-hours cumulated on both project scopes (MEREN and SONAM) without lost time on injury (LTI), insisting that the safety points were still accumulating.

Also stressing the high level of local content in the company’s operations, Mr. Jarkamani stated that over 150,000 man-hours of local content specialized training have been performed under the project scope.

According to him, the striking part part is that the project was being completed within the schedule and budget agreed with clients in order to meet the offshore installation windows.

“Various loadouts are planned for December 2014 / Jan 2015,” he said.

According to him, “the project has been a huge success and demonstrates the enormous benefits the NOGIC act is bringing to this country by driving investment into Infrastructure and people and giving the opportunity for indigenous companies like Nigerdock to demonstrate their capability to deliver on schedule and on budget.”  

The Meren Gas Gathering and Compression Platform and Sonam Non-associated Gas Wellhead Project are conceived by joint venture partners to meet the domestic gas supply obligations in the operations of Chevron Nigeria Limited.

Clients of Digerdock on the project, Chevron Nigeria Limited (CNL), are the operators of the Nigerian National Petroleum Corporation (NNPC/CNL) Joint Venture.

Scope of the job included construction of two new platforms including the Meren field (GGCP) and the Sonam field (NWP).

On completion, the GGCP and NWP are expected to deliver a combined 420 million cubic feet per day (mmcf/d) of natural gas to the Escravos Gas Project (EGP), representing a major leap towards using natural gas mined from CNL’s operations and eliminating gas flaring from its assets.

The work is being undertaken by Hyundai Heavy Industries in South Korea with all in-country scope subcontracted to Nigerdock Nigeria PLC FZE on Snake Island, Lagos.

Checvron states that the choice of Nigerdock for the fabrication of packages in the project underlined it’s commitment to and compliance with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010.

The law requires all operating companies in the country’s petroleum industry to domicile all oil and gas jobs for local execution unless where local capacity is convincingly lacking.

Nigerdocks Scope is the Fabrication of the jacket, piles and bridges for the Meren Gas Gathering and Compression Platform - and also the entire structures for the Sonam  Non-associated Gas Wellhead Projects.  

The delivery of the Meren x and Sonam platform components is significant but it is only part of the string of intricate jibs that Nigerdock has lined up for load out over the next quarter.

Checks by The UNION showed that the company will also deliver 11 units of the quarters for the Egina deepwater floating production facilities by January. Six of packages, it was gathered, are already under construction.

The Egina deepwater field is the third to be developed by Total on behalf of other partners and interest holders in the oil block.

The company is also busy with the construction of Total’s Ofon platform deck. Jackets of the project were loaded out from Nigerdock in January.

In assessing the performance of indigenous oil service providers in the country, Mr. Nwapa stated that enactment of Nigerian Content Policy by President Goodluck Jonathan has ended the traditional drain on the Nigerian economy.

He also said the law has provided the opportunity for Nigerian companies to prove their mettle in the industry services.  He added that the law has allowed indigenous companies to demonstrate capacity, confidence and patriotic mindset.

He said the law would continue to be implemented until all fabrication works for Nigerian oil industry operations have been fully recovered from Korea and Europe.

The UNION reports that all the offshore production facilities in the Nigerian petroleum industry are traditionally fabricated outside the country; a practice Mr. Nwapa said has remained a huge financial drain on the country.

He said that all foreign partners in the fabrication of industry facilities must establish yards in Nigeria in conformity with the Nigerian Content Act. He said that the law would continue to drive investments in the domestic petroleum industry.

He made it clear that the local capacity development in the petroleum industry could be replicated in the other sectors of the economy to give Nigerian investors the opportunity to repatriate their businesses.

In assuring that the NCDMB would continue to ensure flow of jobs to local fabrication yards in the country, he emphasized that the achievements of the board were made possible with the political support from the Presidency.

Earlier, Mr. Jarmakani said the Nigerian Content policy has presented not just the opportunity for contracts for the local companies; it has provided value addition to the local economy by creating jobs and developing skills for medium to long term targets for 100 percent in-country industry job execution.

According to him, the Nigerian Content Law provided challenges that have turned to opportunities for success. The policy has created capacity, employment and opportunities for Nigeria and her citizens.

In pledging the company’s commitment to realizing the objectives of the Nigerian Content policy, Mr. Jarmakani said Nigerdock was working to acquire world class capacity for facility fabrication and vessel building.

On his own, the Deputy Managing Director of Chevron Nigeria Limited, Mr. Dipo Shodiya, expressed delight that the fabrications at Nigerdock were delivered with high safety records, adding that offshore installation of the facilities would begin in January in line with Chevron’s programme to harness over 300 million standard cubic feet of gas per day (mmscf/d) from contiguous oilfields for valorization.

He said that the Sonam project would be delivered with significant local content, adding that the jacket would be the biggest ever fabrication work delivered by any yard in Nigeria.

The job, he said, entailed over 4600 metric tons of fabrication work and provided the right opportunity to further progress gains of the Nigerian Content policy. He also pointed out that local capacity demonstrated by Nigerdock presented huge opportunity for Nigerian petroleum industry.

He said that the performance of the company in delivering the jobs enhanced the credentials of the Nigerian oil service providers for domiciliation of big ticket jobs for in-country execution. He pointed out that Nigerian companies now earned more opportunity for bigger jobs.

Diezani Appointed President Of Gas Exporting Countries’ Forum

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, yesterday added another industry leadership cap when the Gas Exporting Countries Forum (GECF) appointed her President, making her the first female leader of the group.

The new appointment which was the main outcome of the ongoing 16th Ministerial Conference of the GECF in Doha, Qatar, comes barely three weeks after her election as the first female President of the Organization of the Petroleum Exporting Countries (OPEC).

Mrs. Alison-Madueke who could not attend the meeting because of her involvement in the ongoing negotiations to end the oil workers’ strike was represented at the meeting by the Nigerian Ambassador to Qatar, His Excellency Shuaibu A. Ahmed.

The GECF, also called Gas OPEC because of their similar objectives of promoting revenue optimization from petroleum resource exports, is an inter-governmental organization established in Tehran, Iran, in 2001, to serve as a platform to promote the exchange of experience, views, information and coordination in global gas exploration and production trends.

The group also works to maintain healthy balance of demand and supply in the global market space to support global economic growth while seeking fair and proportionate returns for investors and resource owners.

GECF also promotes worldwide gas exploration, production and transportation technologies; the structure and development of regional and global gas markets amongst other common issues that pertain to the exploration, production and trade in natural gas.

The Forum is made up of 12 of the world’s leading producers of natural gas. It controls over 70% of global natural gas reserves, 85% of global liquefied natural gas production, and 38% of global pipeline trade of the product.

Members include Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya and Nigeria. Others are: Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela. Other countries that enjoy observer-member status of the forum include Kazakhstan, Iraq, the Netherlands, Norway and Oman.

The GECF session where Mrs Alison-Madueke was appointed as President was attended by ministers from Algeria, Iran, Libya, Qatar, Russia, UAE, as well as heads of delegations from Bolivia, Equatorial Guinea, Egypt, Trinidad and Tobago Venezuela, Netherlands, Norway and Oman.

The UNION reports that Mrs. Alison-Madueke has mustered lofty reputation for breaking new grounds and pushing back frontiers for female petroleum industry professionals as well as expanding Nigeria’s influence in the global petroleum industry arena.

She is the first female Nigerian to rise to the post of Director in Shell Petroleum Development Company (SPDC) Nigeria Limited, Nigeria’s leading oil and gas exploration and production joint venture operator.

She is also Nigeria’s first female Mister of Petroleum Resources; the first female minister to consecutively serve in three different ministries successfully; the first female President of Organization of Petroleum Exporting Countries (OPEC); and now the first President of GECF also called Gas-OPEC.

 

South East Leaders Angry Over Delay of Enugu Free Trade Zone

Billions of dollars of mustered fund lay dormant and accumulate cots, investment proposals for coal fired power projects and other coal conversion technologies accumulate dust in the shelf, and foreign partners begin to get impatient as promoters of Enugu Power and Energy Free Trade Zone (ENPOWER FTZ) wait endlessly for the Ministry of Trade and Investments to approve the project.

Showing rare anxiety over the unexplained delay of the EMPOWER FTZ, business and political leaders from the South East zone of the country have strongly demanded the federal government to urgently give effect to the presidential approval for establishment of free trade zone in the area.

Speaking separately to newsmen after a closed door meeting in Lagos, some of the leaders from South South and South Eastern parts of the country strongly deplored the reluctance of the Ministry of Trade and Investments to facilitate establishment the investment haven in the zone 19 months after President Goodluck made a solemn promise to the people.

Specifically, President of Aka Ikenga, Chief Goddy Uwazuruike, said the president’s promise was genuine, sincere and in the best interest of the people, wandering why relevant agencies in his administration were reluctant to realize the mandate.

He called on the Minister of Trade and Investments, Mr. Olusegun Aganga, expedite action on establishing the tax haven which, according to him, aligns with the Transformation Agendas of government in creating wealth across all spectrum of the Nigerian society.

According to him, Igbos are noted for audacious commercial ventures and would deliver full targets and objectives of the Free Trade Zone programme by creating multiple values and leading industrial innovation if facilitated by adequate infrastructure and amenities congenial for industrial operations. 

He pointed out that the aspiration of the free trade zone for the south east was to leverage investments that would create jobs, enhance productivity and generate revenues for all stakeholders in the Nigerian economy.

In expressing the anxiety of the pan-Igbo professional and economic group associated with Ohan’eze Ndigbo, Chief Uwazuruike stated that Aka Ikenga is immeasurably worried about the protracted delays in establishing the facility, adding that Minister must speedily realise the project or offer explanations. 

Other businessmen and investors who have already staked efforts in driving the realization of the free zone lamented that the resources they mustered for development of industrial facilities in the highly anticipated free zone have continued to depreciate after laying fallow for too long at a time of rapid changes in the local economy.

They expressed dismay at the slow pace with which authorities under the Ministry of Trade and Investment respond to series of letters seeking approval for the free zone to be created and enable investors who have mobilized resources to go to site for installation of industrial plants.

The UNION reports that after 19 months after President Jonathan granted the request by the leaders of the south east zone and declared that his administration would establish a free trade zone in Enugu to be the first ever of such facility in the South east zone, no further action has been taken by relevant agencies of government after the event.

The President who spoke amid great acclamation from leaders and people of the five south east states that form the zone was in the state for the ground-breaking ceremony of the international wing of the Akanu Ibiam International Airport in Enugu. He had promised to establish a free trade zone in the South East to boost economic activities in the area.

The president, who noted that a free trade zone would be operational alongside the international airport and the planned inland port at nearby River Niger, pointed out that the facility had been over-due for the zone.

“When the governor of Enugu State was making the request of a free trade zone, I was smiling in my mind. The certificate is right for the zone so you do not need to ask.

“Free trade zones can only be functional if it has access to a functional seaport or international airport , so it is something that has been approved before you requested for it. So, you can go and sleep,’’ he had promised.

The president also promised to establish a cargo terminal for perishable food items at the airport for quick processing and evacuation of agricultural produce from local farms to consumers abroad.

According to him, when the cargo airport is constructed, it will give Nigerians the opportunity to export agricultural produce and create wealth at home.

“The opening of this airport is one of the key requests I received from my brothers and sisters from the South East during my campaign for the election as president in 2011.

“I promised them to bring about the transformation of our economy and nation. Today, it is a historical fact as we have fulfilled our promise,’’ the president said.

Earlier in a welcome address, Gov. Sullivan Chime of Enugu State had commended the president for his transformation agenda and called on the aviation ministry not to relent until the Akanu Ibiam International Airport became fully operational.

The governor said a free trade zone, to be situated in Enugu, would assist the entrepreneurial skills of the people.

However, check by journalist monitoring development in the zone showed that delays in the activation of the free zone is beginning to cause serious concern to the leaders of the zone most of who have blamed the Nigerian Export Processing Zone Authority (NEPZA) and the Ministry of Trade and Investments for a crippling delay they fear might kill the project.

FG, PENGASSAN Parley Flops

The highly anticipated meeting between leaders of sister oil workers’ unions and government representatives over the grievances that led to three day warning strike failed to hold on schedule yesterday following the failure of the striking workers’ delegation to turn up.

The meeting was quickly fixed to address disputes that threaten fuel supply in the domestic market after the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and sister National Union of Petroleum and Natural Gas Workers (NUPENG) declared a three day warning strike to demand re-absorption of sacked employee of Total Exploration and Production Nigeria Limited, passage of Petroleum Industry Bill (PIB) and refurbishment of the local refineries among other things.

The call for strike had sparked off market sentiments and panic buying and stocking of fuel by consumers who feared imminent scarcity.

Consequently, the strike which was greeted with public indignation was sharply criticized as politically motivated to build intrigues into the 2015 elections, timed to bring suffering to millions of Nigerians that traditionally travel in the yuletide period and whipped up to influence internal conflicts in private oil firm.

Checks by The UNION showed that the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who had called off her trip to attend the ongoing 16th Ministerial Conference of the Gas Exporting Countries Forum (GECF) in Doha, Qatar, had waited till evening of yesterday without receiving delegates of the striking workers.

Calls to the spokesman of PENGASSAN, Mr. Babatunde Oke, to ascertain the cause of the delay of his team in attending the meeting were not taken.

Officials of the Ministries of Labour and Petroleum Resources who spoke on the issue said the delegation from the two ministries had been waiting for the leaders of the oil workers since early yesterday to no avail, expressing discomfort at the conduct of the labour leaders.

An official of the Petroleum Ministry who spoke on the conditions of anonymity pointed out that the issues raised by the unions were outside the purview of the government, saying that the passage of the PIB was one issue that government has been driving for nearly a decade.

He said that instead on holding Nigerians to ransom, the oil workers should take their case to the National Assembly where the billed has stalled since 2005.

According to him, the oil workers had good opportunity to join the Petroleum Ministry and the Nigerian National Petroleum Corporation (NNPC) in pressurizing the National Assembly to pass the bill but unfortunately had to wait until the legislators have dispersed for political campaigns.

He advised the workers to wait for the National Assembly to reconvene and promised that the Petroleum Ministry would support every positive move to get the PIB passed.

On the issue of refineries, he said government had awarded several contracts for the rehabilitation and upgrade of the refineries, advising the oil workers to help address the problems that issues that work against the reactivation of the plants. He said government was open to cooperate with the oil workers to evolve plans and strategies that would lead to realization of national aspirations in the petroleum industry.

“That is why the PIB was conceived in the first place,” he said.

On the dispute between one of the union’s members and her employers, our source said it would be unfair for the oil workers to subject fellow citizens to suffering because of internal labour dispute in a private company, adding that there was nothing government could do about the issue.

“You must not go on strike for everything. There are issues that you could resolve diplomatically, and there are ones that could be resolved in court of law. That is why these institutions are there,” he said.

In a separate response however, Total E&P Nigeria Limited (TEPNG) deplored statements attributed to PENGASSAN that the three day warning strike is in part designed to press “for the reinstatement of the National Zonal Secretary of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Mrs. Elo who was sacked by Total E&P Nigeria Ltd.”

The company stated that the said employee, Mrs Elo, was sacked for resisting routine transfer after collecting nine million Naira transfer allowance and being absent from work for one month.

Spokesman of Total, Mr. Charles Ogan, said the sacked employee was nonetheless paid her full severance packages

“A Labour Dispute process was launched at the Federal Ministry of Labour by PENGASSAN who then declined to pursue this option. TEPNG supports this process which should be allowed to proceed to allow knowledgeable third parties to review the facts and make an informed decision with the participation of all parties,” he said.

Meanwhile, officials of the oil workers’ unions went round yesterday to enforce compliance and deliberately cause fuel scarcity in the market but oil exports were not affected as at last night.

Survey of upstream operations showed that the strike had no effect in oil exploration and production activities as all contractors and operators in the field were working without disruption.

A strike in September caused little disruption in the country, apart from a brief interruption to natural gas supplies to Ghana, which did not suffer shortages as a result.

An oil executive said this strike was not expected to affect output for the same reason that others have not: shutting down oil production is a drastic move that requires large numbers of workers at production sites who are unwilling to go that far.

"It's very difficult to shut them down, and once they do it would take them a week to get them back up. They never do it," he said. "That's the last thing anyone wants."

However, in many major cities, including the main commercial city of Lagos, the capital Abuja, and the oil producing region of Bayelsa, long queues formed for fuel because of fears the strikes will cause shortages.

Black market fuel hawkers with jerrycans of smuggled fuel along the roadside filled the shortfall.

"There's no fuel to sell and we can't sell the old stock either because we are not sure when this strike will end," a filling station owner told Reuters in Yenagoa, capital of Bayelsa state.

In central Abuja most fuel stations were shut.

 

Nigeria’s oil export gains 30 kbd in November

Nigeria’s oil export gains 30 kbd in November

SOPURUCHI ONWUKA

Nigeria’s crude oil export volumes in the month of November rose to 1.98 million barrels per day just as revenue outlook from the country’s petroleum resources looks gloomier with the free fall of oil prices.

The November export figure indicated increase by 30, 000 barrels per day (30 kbd) on the 1.95 million barrels per day (mbd) pumped by the country in October but some 40 kbd short of the 2.02 mbd pushed to the market in September.

Before September, the country had maintained as export plateau of 1.96 mbd in July and August, according to a table of output figures on members of the Organization of Petroleum Exporting Countries (OPEC).

However, Nigeria’s marginal export surplus failed to yield any significant impact in the overall oil output from OPEC members to the market as the group’s total further plunged by 290 kbd from 30.30 mbd in October to 30.01 in November.

Apart from Nigeria, other countries that recorded export jumps include Ecuador whose export increased in the month by 10 kbd from 0.54 kbd in October to 0.55 kbd in November. Iraq also posted a 50 kbd from 3.06 mbd in October to 3.11 mbd in November.

Iran maintained October export level in November, posting 2.83 mbd in both months just the same as United Arab Emirates also posted 2.78 mbd for both months. Venezuela followed the plateau trend with 2.32 mbd for October and November respectively.

The other six members of the group recorded drops in export figures with Libya suffering the biggest loss with 210 kbd from 0.86 kbd in October to 0.65 kbd in Novermber. Angola dipped by 50 kbd from 1.69 mbd in October to 1.64 mbd in November.

Kuwait also lost 50 kbd in November to post 2.75 mbd, lowering export from 2.80 mbd in October, Qatar dipped by 30 kbd from 0.71 kbd in October to 0.68 kbd in November.

Saudi Arabia posted a 30 kbd decline from 9.63 mbd in October to 9.60 mbd in November. And Algeria dipped by 10 kbd 1.13 mbd in October to 1.12 mbd in November.

Analysts attribute Nigeria’s export improvement to reduced production losses that came with the commissioning of the Umugini pipeline by cluster operators in the Western Niger Delta which enhanced production by a group of indigenous players.

Seplat Petroleum has recorded less than 0.6% of oil theft on the 35 kilometre Amukpe to Rapele pipeline after it switched from Shell operated export conduit on which the operator complains of incessant attacks.

 It was the vandalism of the Rapele-Forcados section of the line that forced entire shutdown of Seplat’s production in the first 43 days of 2014. Seplat currently produces 73,000BOPD (gross).

Other Nigerian independents with adjoining pipelines to those operated by major companies have comparable experience with that of Seplat. “We have produced, non-stop from the Ogbele field for nine years since October 2005”, says Layi Fatona, managing director of Niger Delta Petroleum Resources (NDPR).

“We have never had a single day of shut in,” he explained.

Platform Petroleum, Midwestern Oil and Gas, Pillar Oil and Energia have also collectively streamed the common access Umugini pipeline to avert production losses and accounting diputes with Agip whose pipeline the group had used.

ENI is accused of throwing up stories of vandalism on its own pipeline to the extent that it calculates at least 15% losses, almost every month, for all the companies which put crude into the pipeline.

The production and export upsides in Nigeria positively coincided with news that cracking margins for West African crudes have risen on the US Atlantic Coast relative to the Bakken margin this month, widening the WAF-USAC arbitrage.

The USAC cracking margin for Nigerian Bonny Light crude has averaged $10.42/b so far in December, a $5.77/b premium to the margin for Bakken crude railed from North Dakota. In November, the Bonny Light cracking margin averaged $10.26/b, a $1.67/b premium to Bakken.

Margin data compiled by Platts reflects the difference between a crude's netback and its spot price. Netbacks are based on crude yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.

While there has not yet been a rush to send West African cargoes to the US, the wider arbitrage appears to have lured a few more barrels into the USAC.

Platts cFlow ship tracking software shows a slight increase in vessels arriving in the USAC from West Africa in December. Five ships are due to arrive, up from three in November and two in October.

The Value arrived on December 1, from the Brass River terminal in Nigeria, and the Eagle Atlanta arrived on December 4, bringing crude from the Congo.

Three more ships are due to arrive in Philadelphia by December 17. The Toska is due on December 12, from the Escravos terminal in Nigeria, the Value on December 14, again from Brass River, and the Genmar Harriet on December 17 from the Kome Kribi terminal in Cameroon, from which oil from Chad is exported.

US refiners have cut their reliance on imported crudes in recent years, especially light sweet grades from West Africa and the North Sea, as North American production has soared. Still, refiners will sometimes increase imports when the price is right.

Demand for West African crudes remains weak, pushing spot price differentials lower. Bonny Light, for instance, was assessed at a 65 cents/b premium to Dated Brent Thursday, down from a $1.25/b premium November 3.

More than two-thirds of the January Nigerian crude loading program has yet to clear, market sources said, and even though the Angolan program is trading, deals are fetching lower price differentials. Fewer than 10 cargoes of Angolan crude remain available from the January program, although most of those are heavier grades, such as Pazflor and Saturno.

"From the January Angola program, you'll find that China has bought a lot of those cargoes. Roughly 10-12 cargoes went through term, another 30 cargoes are likely to go to Asia and so far the remaining 10 have gone to western buyers. Of that, very, very little is likely to make its way to the US, though some of it is difficult to see a destination on until you see the shipping data," said one trader earlier this week.

West African sellers are also finding steeper competition in Asian markets from Middle Eastern suppliers. Notably, Saudi Arabia has been aggressively lowering prices for its crude into Asia in order to hold onto market share. As a result, current Singapore margins now favor Saudi barrels.

The Singapore Arab Light cracking margin has averaged $3.22/b so far in December, a $1.83/b premium to the Cabinda margin, for instance. That was up from a discount of $1.28/b to the Cabinda margin in September.

As the US has backed out West African imports, prices for those crudes have fallen, bolstering margins in Europe and Asia.