Total's Egina, Ofon Oil Fields Projects on Track

The price of OPEC basket of twelve crudes stood at 107.88 dollars a barrel on Wednesday, compared with $108.33 the previous day, according to OPEC Secretariat calculations.

Until Wednesday, the price had risen steadily since last week Wednesday when it stood at $106.21 a barrel. Meanwhile OPEC sources have confirmed that November's monthly basket price was the lowest in four months at $106.35, compared with $108.36 in October, $110.67 in September and $109.52 in August.

The lowest monthly prices this year were recorded in June and July when the monthly basket prices were $93.98 and $99.55 the only two months in which the basket prices dropped below the $100 mark.

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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Nigeria's crude oil export has suffered a major setback as Mobil Producing Nigeria (MPN), a subsidiary of the United States oil giant, ExxonMobil Corporation, has declared force majeure on Qua Iboe crude oil exports.The declaration of force majeure frees a company from contractual and legal obligations to its customers due to circumstances beyond its control, especially natural disasters and accidents.

Mobil said it could no longer meet its contractual and legal obligations to crude oil buyers due to the November 9, 2012 oil spill in Qua Iboe oil field. Mobil is the operator at the Qua Iboe oil terminal where the November 9 oil spill discharged heavy volumes of oil into the Atlantic Ocean which local reports say poses a serious environmental threat. 

The company's General Manager, Public and Government Relation, Mr. Paul Arinze, also apologised for the inconvenience caused by the incident.

"Mobil Producing Nigeria, operator of the Nigerian National Petroleum Corporation, (NNPC)/MPN Joint Venture today confirmed that it has declared a Force Majeure due to difficulty in meeting projected lifting. This is because of repair work on a section of pipeline affected in a November 9 oil release incident," he said. 

"We are working to minimise down-time period and have notified appropriate regulatory agencies and purchasers.  We regret any inconvenience this may cause our customers," he added.   

MPN had, in a statement, confirmed that an oil spill caused by a ruptured pipeline at its oil facility off Akwa Ibom discharged some 200 barrels of crude into the Atlantic Ocean. The company was compelled to shut down and isolate the pipeline, which conveys crude from the oil fields to processing and storage tanks in Ibeno, Akwa Ibom.

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There appears to be no end in sight to the current fuel crisis with all sides trading blame. What is clear is that the fuel scarcity is likely to last into the Christmas period when road and air travel is always at its peak. The Nigerian National Petroleum Corporation (NNPC) continues to blame the fuel shortage on marketers. The Corporation claims that it releases enough fuel from the refineries but that many of the tankers conveying the fuel do not arrive at the depots. This they say is evidence that the marketers are diverting the fuel supply in order to create a shortage that will enable them to hike pump prices.

Meanwhile the marketers blame the problem on the government saying that they are unable to import sufficient products because of outstanding subsidy payments. They say that the outstanding payments mean they are unable to service current loans, which makes it impossible to get new loans for new imports.   The petroleum marketers are particular concerned about the length of time it takes to receive actual payment even after their subsidy claims have been processed.

The marketers have also accused private depots of hiking the loading prices, which in turn creates higher prices at the fuel pump. The Department of Petroleum Resources is threatening to shut down any station selling above the approved pump price.

Beleaguered Capital Oil has waded into the matter, issuing a statement that following the immediate sealing of its premises, lack of supply to its customers was likely to make the crisis even worse. The company's premises, including its tank farms and jetties, following the order of a Federal High Court in Abuja, at the behest of Asset Management Company of Nigeria (AMCON) which is pursuing some debts allegedly owed by Capital Oil to AMCON.

As Christmas approaches, it would seem unlikely that an immediate solution to the crisis will be found.  The fuel shortage is likely to disrupt the travel plans of many over the festive period.

The President meanwhile has re-opened the subsidy-removal debate when he said, during a live television interview with the media that although removing the subsidy would make things hard for the people at first, but that its removal will attract foreign investors.

NOGintelligence gathers that strikes like those seen when the fuel subsidy was removed entirely, before being partially re-instated, are looking likely if the subsidy is removed. That will only exacerbate the difficulty that will be experienced by Nigerians if the fuel shortage persists till the new year. It is largely expected that the subsidy removal will be announced early in the January.

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The Federal Government has restated its commitment to the implementation of the Nigerian Content Act in the oil and gas industry and assured the country's international partners that the Act was not meant to drive away foreign investors.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke told participants at a recent conference on Nigerian Content in Yenegoa, Bayelsa State that other prosperous nations adopted one form of industrialisation or development policy and succeeded because they kept faith with the shared vision and sustained the programme for long periods.

The Minister also stated that the implementation of the Act was transparent and predicable and would not be subject to policy sommersaults.

"Government is committed to this programme and would continue to encourage our partners in the private sector and international community to support the implementation, which is not an effort to drive foreigners out of the industry but a requirement to develop genuine partnerships between local and foreign companies," she said.

The minister disclosed that the Nigerian Content Development Fund (NCDF) would soon be launched. The Nigerian Content Development and Monitoring Board (NCDMB) will use the fund to create much desired enhancement of local capacity and access to single digit interest rates.

Also speaking, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andy Yakubu said the participation of Nigerian companies in the upstream segment of the oil and gas business had increased from 10 per cent before the enactment of the Act to over 30 per cent.

"These percentages are even higher and in some cases have attained 100 per cent, for example the Utorogu Gas Plant Expansion Project," he said.

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On November 28, 2012 the Financial Times will be publishing its annual report on NIGERIA worldwide in all editions of the paper and on its award-winning FT.com. This year the FT has decided to focus on one of the most compelling aspects of contemporary Africa, investments, and thus is calling the report INVESTING IN NIGERIA.

FT INVESTING IN NIGERIA responds to the country's national priority to diversify its economy and develop a host of high-opportunity sectors which should serve as a motor for increased economic growth and robust financial strength.

The INVESTING IN NIGERIA will continue to cover the main areas of national news, and continues to have a keen eye fixed on the oil and gas, telecom, and banking sectors, but also intends to cover other emerging sectors - mining, agriculture, energy and power, commodities, services, transportation and shipping, infrastructure, industry, and of course foreign direct investment. Business magnate Aliko Dangote while speaking at an investment forum during the UN General Assembly week in New York called Nigeria "the best kept secret."

The FT INVESTING IN NIGERIA report will reach 2.2 million readers on November 28, and will be launched at the12th Honorary International Investor Council (HIIC) in London with Baroness Lynda Chalker's Africa Matters, in the presence of HE Goodluck Jonathan, President of Nigeria, and a number of Nigeria's most dynamic ministers, including HE the Minister of Industry and Investment, HE the Minister of Finance, and the HE the Minister of Petroleum.

The Nigerian National Petroleum Corporation (NNPC) has stated that gas flare in oil and gas fields in the country had been reduced by 15 per cent, while it had also exceeded its target for gas-to-power aspirations.

Group Managing Director of the NNPC, Mr. Andrew Yakubu told participants at the recent 42nd Annual General Meeting, Conference and Exhibition of the Nigerian Society of Chemical Engineers, that the Corporation was also taking steps to grow the nation's crude oil reserves to 40 billion barrels and daily production to 4 million barrels per day by 2020.

He said the strategic focus of the NNPC was to ensure that between 70 to 80 percent of gas produced in the country was channeled to power generation to achieve the robust ambition of stabilising electricity supply to Nigerians and industries operating in the country.

"One of the strategic focus we had when we came on board was to ensure that gas availability to power was met and I am glad to tell you that as at today, we are in surplus of gas availability to power in line with the Federal Government's power initiative," he said.  

Yakubu stated that in the gas value chain, going forward, NNPC would consolidate on gas to power and industry to boost economic activities in the country.

He disclosed that the gas aggregator and the other key commercial initiatives had gone a long way in stimulating investment in the oil and gas sector of the economy. On gas flaring, Yakubu told the participants that a lot of investments had been put in place to ensure gas flare down, adding that as at today gas flare down has reduced to about 15 percent. He stated that export initiatives on gas have been stepped up and plans were under way to achieve zero flare down in the country.  

Yakubu commended the Nigerian Society of Chemical Engineers, NSCHE, for the capacity growth contributions to the NNPC workforce and the Nigerian society adding that their impact on the petroleum sector of the country is far reaching.

Yakubu described the theme of this year's NSCHE conference: "Harnessing Water Resources for National Development," as apt and necessary, adding that there is a global paradigm shift from the use of fossil fuel to renewable energy.

National President of NSCHE, Dr. John Erinne, said the Chemical Engineering principles are at the center of techniques and technologies for the treatment of water for a wide spectrum of applications and purposes including oil field-produced water and industrial waste.

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The Shell Petroleum Development Company of Nigeria Ltd (SPDC) has continued in its effort to help alleviate the suffering of the people of Rivers, Bayelsa and Delta states where the recently flooding hit hardest. The company presented relief and medical materials worth over N75 million to flood victims. This is in addition to the $ I million jointly donated by SPDC and Shell Nigerian Production Company (SNEPCo) in support of flooddisplaced persons in 24 states across the country.The money and relief materials were donated through the Red Cross and are to be used for purposes outlined in a Memorandum of Understanding signed with the organization.

According to the National Emergency Management Agency (NEMA), the floods, which are some of the worst ever seen in the country claimed 363 lives and displaced 2.1 million people in different parts of the country.

"We are deeply touched by what the flood waters have done to people across the country and in the Niger Delta," said SPDC Managing Director, and Country Chair Shell Nigeria, Mutiu Sunmonu.  

"We recognise that our assistance will not solve all their problems, but it can help them cope with the impact of the tragedy atthis time," he added whilst touring relief camps in Rivers, Delta and Bayelsa states along withSPDC's Health-in-Motion team, whichtreated various ailments, dewormed children, delivered health awareness talks and gave out insecticide treated nets. An SPDC mobile clinic worked with the team and attended to emergencies.

Earlier, the company had provided helicopter flights, geomatics expertise, satellite imagery and maps of affected areas to aid proper relief operations planning and execution Shell's Corporate Media Relations Manager, Tony Okonedo, said.  

Staff of Shell companies in Nigeria are contributing to a voluntary fund which SPDC will match 100%. SPDC's support will aid the Red Cross in reliefmanagement, camp coordination and management, emergency shelter, livelihood support and early recovery, family reunification, psychosocial support and risk reduction.

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