Shell has finally lifted its force majeure declaration on Forcados crude oil grade, the last of three it had in place previously. The company lifted its force majeure declaration on Bonny Light earlier this month and last week it lifted the declaration on its liquefied natural gas supplies to Nigeria Liquefied Natural Gas (NLNG). Supplies on all its grades will now return to normal.  

Shell has blamed the force majeure declarations on crude oil theft and also disruptions due to some of the worst flooding that Nigerian has seen for many years. The Delta area was hardest hit by the flooding. The company claims that Nigeria is losing 100,000 barrels per day to crude oil theft while the Minister of Petroleum has said that some $7 billion dollars in revenue is lost annually due to oil theft. The figure given by the Minister has been confirmed by the International Energy Agency. A government source says that pipelines worth N1.4 trillion are damaged every year by illegal activities.

The result of all the delays is that exports of Nigerian crude oil are falling with Reuters reporting that loading figures for January show that exports are due to fall by 60,000 barrels to 2 million barrels following the delays as a result of the force majeure declarations by Shell on Bonny Light and Forcados and only last week, by Exxon Mobil on its Qua Iboe supplies.

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The price of OPEC basket of twelve crudes stood at 106.99 dollars a barrel on Wednesday, compared with $108.07 the previous day, according to OPEC Secretariat calculations. Prices have been falling since Monday when it stood at $108.08, falling slightly to $108.07 on Tuesday before dropping steeply to $106.99 on Wednesday.

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 Asset Management Company of Nigeria (AMCON), which obtained a freezing order against the assets of Capital Oil resulting in the sealing of their depot, has dashed hopes that an immediate re-opening of the depot is in sight. This development has exacerbated the worsening fuel crisis gripping the nation. The company supplies about 30% of the nation's PMS (petrol).

Capital Oil's Chief Executive Officer, Nick Hayes, said of the current situation: "The depot was shut in the early hours of Friday, November 16, 2012, in obedience to a court order granted to Assets Management Company of Nigeria (AMCON) by Justice A. Abdul-Kafarati of the Federal High Court, Abuja, to temporarily take over the assets of the company."

Referring to the fuel crisis, he said: "It was therefore, not surprising that the situation worsened when Capital Oil depot was shut as over 224 trucks with about 8,151,270 litters of PMS belonging to the NNPC, were trapped in the premises of Capital Oil and Gas Ltd."  

AMCON has been pursuing Capital Oil for debts owed by Capital Oil to four banks which have been purchased by AMCON as part of its remit when it was set up. After obtaining an injunction freezing the assets of the company, AMCON has been trying to bring in administrators to run the business and re-open the depot, a move that the company is resisting.

Commenting on this development, the company confirmed that the talks had become stalled and that they would be heading back to the courts. Nick Hayes said: "AMCON is understood to favour the appointment of an administrator who shall have sweeping powers. Expectedly, top management of Capital Oil and Gas kicked against the move which they say will give such an administrator the authority to throw out thousands of Nigerian youths in the employ of the company presently, in favour of those the administrator may want to bring in."

AMCON has issued a statement saying that it had tried to re-open the facilities but that Capital Oil was not co-operating, making it impossible to do so. The company said: "AMCON will continue with its statutory functions and strive to re-open the facilities as soon as practicable."

Meanwhile, a Federal High Court order allowing Capital Oil to make limited use of its funds to pay salaries, has been granted to the company. NUPENG Lagos chairman, Mr Okorodo said they had been watching the developments with interest given that Capital Oil employs over 1,000 workers and over 3,000 auxilliary workers and so a sudden shut-down had the potential to affect 4,000 workers. He expressed great relief at this development.

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The shareholders of the Brass Liquefied Natural Gas (LNG) project in Bayelsa State will sign the Final Investment Decision (FID) for the project by April 2013.

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Mr. Andrew Yakubu stated this while addressing the Senate and House of Representatives' Joint Committees on Petroleum Resources in Abuja.

Yakubu stated that despite the divestment of ConocoPhillips from the project, discussions were already on with other critical stakeholders to key into the project. He said by April next year the Final Investment Decision on the project would be concluded.  

NNPC holds 30 percent equity in Brass LNG, while  Bayelsa State Government has 10 percent; LNG, Japan four percent; Itochu Corporation three percent, and a joint venture between Nigerian indigenous company Sahara, and France-based Sempra Energy holds two percent. American oil group ConocoPhillips French firm, Total and Italian company, Eni holds 17 percent stake apiece in the Brass LNG.

Also addressing the lawmakers, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke noted that oil exploration in the inland basins such as Chad Basin and Bida Basin and others would be aggressively pursued.

She also stated that emphasis would also be placed on the implementation of the local content policy to create jobs for Nigerians in the petroleum industry.  

On gas, she said the ministry would expedite action on the gas master plan, liquefied petroleum gas and the development of critical gas infrastructure in order to convey gas not only to the commercial centre and gas to power but also to supply gas to remote areas of the country within the parameters of the budget given to the ministry.

She assured Nigerians that as the Christmas period approaches, the entire length and breadth of the nation would receive adequate supply of petroleum products to enable motorists enjoy the festive season without any fuel scarcity.

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The Nigerian National Petroleum Corporation (NNPC) has relocated the proposed site for its multi-billion dollar gas project from Koko to Ogidigbe, both in Delta State. The explanation, according to the Group Executive Director (GED), Gas and Power of the NNPC, Dr. David Ige, was that the project was relocated to optimise the inherent potential in the project. However, NOGintelligence gathered that the relocation of the gas project was due to increasing cases of kidnapping and other forms of insecurity in some parts of Delta State.   

Ige, who represented the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke at a recent gas conference in Abuja said that work at the new site would commence within the second quarter of 2013 and completed between 2016 and 2017.  He said the relocation would also help to create a competitive gas-based industrial park that could attract global players in the gas market.

"Basically, what we are trying to do is to ensure that we create a gas-based industrial agenda that is going to be competitive globally. A lot of factors came into play. We have considered various locations, Koko was the desired location, originally it is land-based, accessible and has a port of its own but as the agenda started to grow, it was evident that for the size of fertilizer that we are now beginning to look at and the size of petrochemical that is now beginning to materialise, the kind of vessels that you will require to evacuate those products now becomes a lot bigger than what we even started with," he said.

"We started with a smaller capacity fertiliser and petrochemical plant but now the investors are stepping up the game and when you do that and look at 50,000 tonnes dead-weight vessels then the Koko channel becomes a problem because it requires a significant amount of dredging over a long distance to the coast and that informs an optimisation of location," he added.

Ige further stated that dredging the Koko channel would add significant costs to the project, hence, the decision to relocate to Ogidigbe. According to him, about 2750 hectares of land had also been secured from the Delta State government at the new location.

The planned plant has a capacity for 60 million litres of petroleum products, primarily automotive gas oil (AGO), premium motor spirit (PMS) and dual purpose kerosene (DPK). There will be 6 tanks in total: 4 will have a 12 million litre capacity and 2 will have a 6 million litre capacity. These will be for the storage of AGO, PMS and DPK. The work is to be undertaken by Moss Petroleum.

The government's gas revolution initiative is anchored on a few primary investors which include Nagarjuna of India for the 2.6 metric tonne per annum (mtpa) urea plant, Xenel of Saudi Arabia for the 1.3mtpa polyethylene plant and 400 kilo tonnes per annum (ktpa) polypropylene plant.

Others are the Chevron/Shell/NNPC/Sahara 2.2 billion cubic feet per day (bcf/d) gas processing facility and Agip/Oando/NNPC 800 million cubic feet per day (mmcf/d) gas processing facility.

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The Forbes list of Africa's Richest 40 people just released shows Nigerians among the richest Africans, second behind South Africa. The list also shows that oil and gas accounts for the fortunes of most of the Nigerians on the Rich List. Of the 11 Nigerians, 9 of them are or have been involved in oil and gas.

Tracking the wealth of Africans living on the continent, the publishers calculated the net worths of their targets using stock prices and exchange rates from the close of business on Friday, 9th November.

For the second year running, Aliko Dangote, has topped the Forbes Africa Rich List with a net worth of $12 billion. Self -made Aliko, who at 55, is Africa's richest man for the second year running, started by trading in commodities. He has now expanded his Dangote Group to include cement factories, sugar refining, salt processing and oil and gas.

Other Nigerians on Africa's richest 40 list who owe their wealth to oil and gas include:

- Mike Adenuga of Conoil Producing is at number 5. At 59 years of age, his net worth is calculated at $4.6 billion. Conoil is one of Nigeria's most successful indigenous producers with a production capacity of 100,000 barrels of oil per day. He made the Rich List last year, rising oil prices have since increased his fortune.

- Folorunso Alakija weighs in at number 24, with $600 million. The 61 year old owes her fortune to OML 127 awarded by Babangida to her Famfa Oil company. The block has since gone on to become one of Nigeria's most prolific. The award of the block has proved controversial and was revoked without compensation by Obasanjo's government but was reinstated this year after a lengthy court battle. Chevron owns a 40% stake in the block.

- Theophilus Danjuma is joint 24th with Mrs Alakija with his wealth estimated at $600 million. The 73 year-old former Defence Minister owes his wealth to an oil block awarded to him by the Sani Abacha's government. CNOOC bought a 45% stake in the block for $1.75 billion. His company has a 5% stake in OML 130.

- With a net worth of $575 million, and coming in at number 26, 68 year old ex-banker, Oba Otudeko is chairman of the Honeywell Group which also owns has oil and gas exploration and production interests.  

- Next, is Mohammed Indimi, with a net worth of f $550 million. The 64 year old is the chairman of Oriental Energy Resources, which is involved in exploration and production with a current daily production of about 35,000 barrels of oil.

- 82 year old O.B. Lulu Briggs is number 31 on the list with a net worth of $500 million. He got an oil block award during Babangida's rule which has gave his exploration and production company, Moni Pulo, a kick start as an indigenous producer. Their OML in bringing in 10,000 barrels a day although they have interests in other blocks too.

- 70 year old Sani Bello, a former military governor and ambassador is number 37 on the list with a net worth of $425 million. He is one of the founders of AMNI Petroleum, a successful indigenous oil and production company which owns a 50% interest in Okoro and Setu fields. Afren owns the remaining 50% stake.

- Harvard educated jazz fan and petroleum economist, Hakeem Bello-Osagie who is 57 years old, only just managed to scrape onto the list at number 40, with a net worth of $400 million. He has a strong oil and gas background, having worked as presidential adviser on petroleum and energy and also NNPC before setting up his own oil and gas consultancy.

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Oil-producing companies operating in the Niger Delta have spilled about 30 million barrels of crude oil into the environment since oil production started in Nigeria, according to statistics provided by Aveon Offshore.

The statistics also showed that poor production equipment accounts for one per cent of the spill in the Niger Delta, while corrosion of pipelines and tankers, illegal bunkering, as well as sabotage accounted largely for the rest of the spill.

Speaking at a special session of a recent oil conference in Yenegoa, Bayelsa State, the General Manager of Aveon Offshore, Mr. Joseph Oduntoye noted that the spills degraded the environment, with the communities bearing the impact.

"They (communities) witness slow poisoning of their waters; destruction of vegetation and increased health problems. Similarly, when you flare gas, it releases poisonous chemicals," he said.  

Oduntoye stated that oil-producing communities from  from "Eket to Forcados; Forcados to Odidi; Cawthorne Channel to Soku and from Okulama back to Port Harcourt and other communities hosting oil and gas infrastructure lacked portable water and other social amenities".

"The people live in abject poverty and their rights are sometimes infringed upon. Attempts by the people to protest the negative impact of these activities are sometimes greeted with corruption and divide-and-rule tactics," he said.

He attributed the agitation by the oil communities; violence; insecurity; sabotage and other illicit activities in the industry to the lack of commitment by the oil companies and the government to ensure that the communities participate in the industry.

"Of course, the resultant adverse effects on the Nigerian economy cannot be over-emphasised. It ranges from loss of revenue by the government and the oil companies to diversion of investment to neighbouring countries," he added.

The Federal Government and international oil companies (IOCs) operating in the country lose an estimated $7 billion (N1.05 trillion) to oil theft annually, the International Energy Agency (IEA), an energy policy advisor to the industrialised countries, has said in a recent report.

According to the 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.

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