The ConocoPhillips divestment has now reached a critical stage after the short-listing of four bidders for the assets from the initial shortlist of 12 that passed the first hurdle. At that stage the companies were admitted to a deeper level of information on the assets, and some, like Niger Delta which is now very heavily committed in OML 34 divested by Shell, dropped out of the running when they discovered the level of financial commitment required to fund the acquisitions.

Although the process has been shrouded in secrecy, NOGintelligence gathers that the four short-listed companies are Oando, Transcorp, Lekoil and Seplat. The four companies must now find the funding and technical capability in preparation for the final selection.  

The assets on offer are OMLs 60, 61, 62 and 63; offshore OMLs 131 and 214 (both in deepwater); and Brass LNG. Although ConocoPhillips, which is running the transaction through BNP Paribas, had hoped to sell in one large tranche, analysts believe that it may have to split the assets up. It could sell the onshore assets and Brass LNG together and the two offshore deepwater assets together. Given the level of funding required to develop deepwater assets, it may also choose to sell them separately.

The companies in the running are big players in the Nigerian market. Oando, whose chairman is Wale Tinubu, recently announced its intent to raise N35 billion through a rights issue for upstream assets. It is now believed that this may be in connection with the ConocoPhillips acquisition.  

All the companies are remaining tight-lipped about the ConocoPhillips race although Wale Shonibare, MD of UBA Capital who is advising Tony Elumelu's Transcorp said of the company's bid: "We are pleased to be associated with such a landmark transaction for local oil and gas". The companies will now be looking to firm up their bids as they prepare for the end of the race.

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A report commissioned by Niger State has confirmed the presence of oil and gas deposits in the Bida Basin in the State. The Governor set up the committee to investigate the presence or otherwise of hydrocarbon deposits in the area and also to determine whether the commercial exploitation of any such deposits would be viable.  

The committee, headed by Lt. General Wushishi has now submitted its report which confirms the presence of commercially viable oil and gas although further tests would be required to determine the quantities of the deposit.

Lt. General Wushishi has urged the state government to get other states within the basin to join in the process and to support the State's drive for the search for oil and gas in the basin.

The committee has also recommended that the government should set up a petrochemical and refinery plant at Baro in the area.

The State Governor, Governor Aliyu, is calling on investors to partner with the government to fully explore and exploit the hydrocarbon deposits in the Bida Basin.

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Oando Energy Resources (OER) announced on Monday that it has brought in a production of 2,000 barrels of oil per day (bopd) in its Ebendo-4 well. The company, which has a 42.75% non-operating interest in the Ebendo field in OML 56, said that the production would yield 855 bopd to OER.  

"Bringing the EB-4 well on stream boosts the combined gross production from the Ebendo field (or "this field") significantly to 4,000 bopd", said Pade Durotoye, CEO of OER.

The company now intends to advance their Ebendo drilling programme with their EB-5 well which is aimed at appraising the untested hydrocarbons contained within the five levels of hydrocarbon bearing sands that were encountered during the EB-4 drilling program. As a result of the increase in production, the Ebendo Field currently produces 4,000 bopd from the 2 producing wells, EB-1 and EB-4.

OER currently has a broad suite of producing, development and exploration assets in the Gulf of Guinea (predominantly in Nigeria) with current production of approximately 5,000 barrels of oil per day (including the additional production from Ebendo Field).  

The company also recently announced some changes to its board. Bill Watson joins the board while Tony Henshaw and Stan Bharti have resigned to focus on other initiatives.  

Chairman of OER's board, Adewale Tinubu, said of the new appointement: "We look forward to welcoming Bill to the OER Board of Directors. His wide international experience and his Technical and Leadership experience will undoubtedly compliment our leadership team and we look forward to working with him in the future."  

Mr Watson joins with 35 years experience in the oil and gas industry, most recently serving with Husky Energy as Chief Operating Officer, S.E. Asia.

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The nation-wide flood that has ravaged parts of Nigeria, especially the oil-producing communities, has slashed the country's daily crude oil production for the third quarter of 2012 by 500,000 barrels.

The Director of the Department of Petroleum Resources (DPR), Mr. Osten Olorunsola, said in a recent quarterly briefing of journalists on the activities of the agency that the production shut-down was caused by the ravaging floods in some parts of the country.

He said the actual crude oil, plus condensate production of the nation was 2.5 million barrels per day for the third quarter.

"Flooding in quarter three led to a total shut down of 0.5 million bpd," he said.

He listed Total Exploration and Production; Nigerian Agip Oil Company and a marginal field operator, Sterling Energy, as some of the oil companies worst hit by the flooding.

Olorunsola, however, gave the assurance that the floods were no threat to oil and gas assets in the country in the long-run, as the affected companies would soon ramp up production.

Oil producing States, Rivers, Delta and Bayelsa, as well as 15 other States were massively impacted by the floods, said to have been caused by the release of excess waters from the Lagdo Dam in Cameroun as well as Shiroro and Kainji Dams in Nigeria.

The flood submerged whole communities, farmlands; major roads and oil and gas installations, disrupting oil production and the social lives of the people and causing them to relocate.   

Only recently, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had said there was no impact of flood on oil and gas facilities in the Niger Delta. She made this disclosure after visiting some of the communities that were worst affected.  

At the time she said optimistically: "At this point in time, we have not received any report that any of our installations have been adversely affected, but we are still receiving the reports as we speak. If the water level continues to rise, we will find out what the impact is, but as at now we have no report to that effect".

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Nigeria's crude oil exports have suffered a major set-back as Royal Dutch Shell has declared force majeure on exports of the Bonny and Forcados grades of crude oil. The disruption of crude export, which was largely caused by theft, has potentially affected more than one fifth of Nigeria's oil exports.

The declaration of force majeure frees the company from its contractual obligations due to circumstances beyond its control.

A Shell Nigeria spokesman said in a statement that crude oil thieves caused damage on Trans Forcados Pipeline and the Brass Creek trunkline.

"Effective 1400 hours, Friday 19th October 2012, SPDC (Shell Production Development Corporation) JV declared force majeure on Bonny and Forcados loadings," a Shell spokesman said.

Bonny Light and Forcados are two of Nigeria's most important oil grades and in October they represent exports of 427,000 barrels per day, out of the country's total exports of 2.048 million barrels per day.

"Bonny loadings are affected as a result of production deferment caused by the fire incident on a bunkering ship on the Bomu-Bonny trunkline and production deferment from a third party producer because of flooding," he said in a statement.

Efforts were being made to repair the pipelines as soon as possible according to the company.  

Shell's Nigerian unit shut its Bonny oil pipeline and deferred 150,000 barrels per day of production after oil thieves caused a fire, the company said at the end of September.

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The price of OPEC basket of twelve crudes continued to fall and stood at $105.94 a barrel on Tuesday, compared with $107.13 the previous day, according to OPEC Secretariat calculations. 

Introduced on 16 June 2005,  the new OPEC Reference Basket is currently made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela). 

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The Nigerian National Petroleum Corporation (NNPC) has dashed hopes for an early resolution to the current fuel scarcity in Lagos and other major cities in the country after confirmation that it would not be repairing the damaged pipeline at Arepo, Ogun State.  

NOGintelligence reported last week that three NNPC workers were killed whilst trying to repair the vandalised pipeline. Following the killings, NNPC has refused to complete the repair of the pipeline until the safety of its workers can be guaranteed. The Corporation says it will not repair the pipeline until then.

The Acting Group General Manager, Group Public Affairs of NNPC, Mr Fidel Peppel said: "The management of NNPC has resolved not to risk the lives of its personnel by sending them to Arepo until their safety is guaranteed."

Lagos has been hit particularly hard by the fuel scarcity with queues at petrol stations growing longer by the day. The vandalisation of the pipeline which normally transports around 10 million litres of fuel a day has disrupted the supply chain for petroleum products. NNPC had tried to plug the gap through the increased use of lorries for the delivery of petroleum products. Unfortunately, many of the lorries were diverted by fraudsters and failed to arrive at their destination, a development which NOGintelligence covered in last week's issue.   

In a statement released by the acting Group General Manager, Group Public Affairs Division of NNPC, Mr. Fidel Pepple, he urged against panic buying saying: "We are working round the clock to surmount the distribution challenge and I can assure that the measures we have put in place are proving effective."

"We call on motorists not to engage in panic buying which can result in unnecessary queues and create hardship for Nigerians, which is what we are trying to avoid" he added.

Mr Pepple explained that the scarcity of fuel being experienced is down to the Arepo Pipeline vandalisation.  

"That no one noticed any shortfall in supply until three months ago in August when the unfortunate incident of the Arepo Pipeline fire occurred is a testimony to the proactive measures put in place by the Corporation to ensure that Nigerians do not suffer fuel scarcity again. But the Arepo incident compounded an already fragile situation by cutting off the distribution channel to about five depots. With this situation, we have to rely on bridging by trucks. Obviously, lifting products by trucks across a vast country like Nigeria cannot be as efficient as pumping products through pipelines and that is where the problem really lies."

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Dr Patrick Dele Cole, a leading politician from the Niger Delta area has launched a "Stop the Theft" campaign aimed at bringing an end to the shipment of stolen oil out of Nigeria.  

Dr Cole insists that most of the stolen oil, which he estimates at 180,000 barrels a day, is ending up in the Balkans and Singapore.

The campaign aims to have ships carrying stolen oil tracked. "Once you start asking questions and throwing light on this problem, you have solved more than 50% of the problem," said Mr Dele Cole, a veteran diplomat and former presidential adviser.

"I think you should send out a warning to those who being extremely rich, that their day of reckoning is coming."

According to Dr Cole, local gangs are refining about 10 per cent of the stolen oil illegally in the creeks and swamps. The remaining 90 per cent he says is going to complicit refineries in Ukraine, Serbia and Bulgaria or Singapore. He believes that if the shipments are tracked and traced to the refineries it will stop the problem of oil theft in its tracks. 

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The Nigerian National Petroleum Corporation (NNPC) has confirmed that that it was not involved in originating the fake export permit certificate that was allegedly used to export crude oil worth about $1.6 billion.

NNPC's acting Group General Manager, Public Affairs, Mr. Fidel Pepple, said the corporation never took part in any scheme to export crude oil using a forged export clearance permit as alleged in some quarters.

"We neither have knowledge of the allegedly forged export permit nor its origin to warrant being linked with it," he said.

Pepple noted that that all crude oil and gas exports carried out by NNPC usually follow a rigid and established guideline.  According to him, the guideline requires the NNPC to apply to the Department of Petroleum Resources (DPR) for export clearance forms.

He said the forms are then duly completed and returned to the DPR for processing and onward submission to the Federal Ministry of Trade and Investment which, upon satisfactory assessment, issues export permit certificates to exporters.

"We have always and continue to follow existing requirements for exporting crude oil and gas from the country. The process is complex and involves the Ministry of Trade and Investment, the Ministry of Petroleum Resources, the DPR and the Nigerian Customs Service (NCS)," he said

He continued: "NNPC is not the issuing authority for export permit certificates. It is therefore appalling for anyone to link NNPC with originating a fake export permit certificate or using same to export crude oil worth about $1.6bn."

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