Heritage Oil Plc, an independent upstream exploration and production company, has announced that Shoreline Power Company Limited had exercised its option to acquire a 30per cent economic interest in Shoreline Natural Resources Limited, a joint venture between the two companies.

Shoreline Natural Resources Limited is a joint venture between Shoreline Power, a private Nigerian energy and infrastructure company and Heritage Oil Plc, a company listed on both the London and Toronto stock exchanges.

Heritage, together with its Nigerian partner, Shoreline Power, established the joint venture, as special purpose private Nigerian company, to acquire the 45 per cent participating interest in Oil Mining Lease (OML) 30 from Shell, Total and Agip, together with a 45per cent interest in other assets.

On November 9, 2012, Heritage announced the successful completion of the acquisition of the 45per cent interest in OML 30, with effect from November 1, 2012. The joint venture was structured with 55 per cent of its equity interest held by Shoreline Power and the remaining 45 per cent held by Heritage, through a wholly owned subsidiary.

However, Shoreline Power retained an option to acquire 30per cent of Heritage's interest in Shoreline.

Heritage Oil said in a recent statement that this option had been exercised and that it would receive the exercise price from Shoreline Power of over $100 million later this month, in accordance with the bridge facility from Standard Bank.

Following completion of the option exercise and continuation of the existing profit share agreement, Heritage's equity and economic interests in Shoreline will be 31.5 per cent and 68.25 per cent, respectively. Chief Executive Officer of Heritage Oil, Mr. Tony Buckingham, said the acquisition of an interest in OML 30 was proving to be a transformational deal for his company as it has provided significant increases in both production and cash flow.

"We expect to see production grow further over the coming year as work programme activity increases across the licence following completion of the acquisition in November 2012. We continue to look for opportunities, including within Nigeria, to develop our portfolio of exploration and production assets further," he said. The proceeds from the acquisition will however be used in part as security against the existing facility to Shoreline and also for general corporate purposes by Heritage, in accordance with the bridge facility from the Standard Bank, the company said.

According to the statement, average field production for OML 30 in November 2012 was 35,704 barrels of oil equivalent per day (bopd) gross, with 15,665 bopd accruing to Heritage.

The statement also added that revenues that accrued to Heritage from OML 30 for November 2012 production are expected to total approximately $52 million with final pricing to be determined following lifting.

Shoreline received payment of $38.3 million on December 27, 2012 towards proceeds from its first crude lifting in the first quarter of 2013.

Chinese government-owned China Petrochemical Corporation, Sinopec Group, the parent company of Addax Petroleum, has set up a new oilfield service company in its home country to harness the rise in Chinese and overseas exploration and production activities.

Oilfield service providers perform specialised tasks required for exploration and production companies to extract oil and gas.

China, the world's largest energy consumer, is increasingly demanding more such services to extract resources from domestic and overseas projects.

The new company, Sinopec Oilfield Service Corporation will provide oilfield services not only in China, but also in international markets such as North America, Middle East, Africa, Central Asia and South East Asia.

This will help its parent gain a further foothold in the oilfield services market, strengthening its competitive edge in China as well as overseas.

At present, China's oilfield services market is dominated by the three largest oil giants including Sinopec, China National Petroleum Corporation and China National Offshore Oil Corp., which account for over 80per cent of the market share, with the remaining divided between 1,200 domestic oilfield services providers including Anton Oilfield Services Group.

Sinopec Oilfield Service Corp. was set up in Beijing with total fixed assets of 76.6 billion Yuan (US$12.2 billion) through the restructuring of Sinopec Group's oilfield engineering firms, Sinopec Group said in a statement Friday.

The new unit is estimated to receive CNY95 billion of revenue this year. It has already chalked up 480 contracts in 43 countries worth US$14.2 billion.

The Federal Government is planning a new offshore refining scheme in line with the recent recommendation of the 22-man National Refineries Special Task Force headed by a former Minister of Finance, Dr. Kalu Idika Kalu, NOGintelligence has gathered.  They proposed a new offshore refining scheme, it was learnt, which would ensure that the country meets the demand for petroleum products in view of the collapse of the existing refineries.

A top official of the Ministry of Petroleum Resources told NOGintelligence that the new policy being considered by the government would ensure that international organisations with vast experience in oil refining bid for the contract.

Under the prevailing arrangement, the NNPC engages in a swap deal in which it exchanges crude oil with refined petroleum products.

The official however stated that the recommendation by the Kalu committee that the three existing refineries in the country should be privatised within 18 months would not be implemented.

The committee had noted in its report that the nation's refineries had operated at an average capacity utilisation of about 20per cent, placing Nigeria at the bottom of the ladder among African refineries.

The task force also discovered in the course of its assignment that the three Nigerian refineries had not been efficiently and safely operated and maintained for more than 15 years.

The committee therefore recommended that the federal government should relinquish control of the operation and management of the refineries by divesting a majority of its 100per cent equity to competent, resourceful and experienced refining private partner(s) in accordance with the Public (Privatisation and Commercialisation) Enterprises Act 1991.

To facilitate the privatisation of the refineries, the task force called for an urgent review of full rehabilitation of the refinery plants, saying investment in the proposed Turnaround Maintenance (TAM) and rehabilitation projects for the refineries by the federal government should therefore be limited to the minimum required to make the refineries work in a safe and reliable manner. 

However, the official of the ministry of petroleum resources stated that the government would not privatise the refineries in view of the nation-wide opposition against full deregulation.

The price of OPEC basket of twelve crudes stood at 109.30 dollars a barrel on Thursday, compared with $109.01 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).

Explosion rocked the Tin Can Island Port in Lagos on Wednesday, when a petrol barge that belongs to MRS Oil and Gas caught fire and exploded at the company's main depot inside the port.

The barge, with registration number ST 215 was the biggest of all the company's barges before the incident.  No death was officially reported by the company but according to eye-witnesses, about six men, who were involved in the offloading of petrol were injured.

The South-West Zonal Spokesperson for the National Emergency Management Agency (NEMA), Mr. Ibrahim Farinloye, confirmed that no life was lost but stated that four persons were injured.

"The fire started around 11.45am and ... so we quickly mobilised and sped down to Apapa. No death was recorded rather about four persons who were on ground were injured from the shrapnel that scattered when the explosion rocked the building."

He disclosed that the explosion destroyed the generator house and the strength of it blew off all the windows of the company's administration building.  He however said they were able to successfully extinguish the fire because they quickly contained the fire at the top of the oil barge.

He said, "The fire started from the mouth of the equipment (the hose) they were using to transfer the products from the barge to the tank.  "Fortunately, the fire did not enter either the barge or the tank because we were able to suffocate the supply while it was still at the top of the tank."

In its first official reaction after the incident, the company stated that it was yet to ascertain the cause of the fire incident and explosion, as the investigation was still ongoing.

The loan, provided by several Nigerian and international banks and brokered by Standard Chartered Bank Plc, according to a recent Reuters report, will be paid back over five-and-a-half years. 

NNPC was also said to have put up 15,000 barrels per day of its oil production as collateral.

The transaction, if sails through, would mark NNPC's first foreign syndicated loan. The foreign banks providing funds include France's BNP Paribas, Standard Chartered, Natixis, Afrexim Bank, a local unit of Standard Bank and Korea's MMC, while the Nigerian banks were United Bank for Africa, Ecobank, First Bank and Union Bank.

NNPC owes the major foreign oil traders, including Glencore and Mercuria, around $3.5 billion in unpaid fees for products purchased by NNPC.  NNPC hopes that this will alleviate some of the fuel supply problems being experienced as some traders are unable or refusing to import products due to non-payment of bills by NNPC.

But while the deal is said to have received the blessing of President Jonathan, the National Assembly is vehemently opposed to the transaction.The Senate has vowed to probe the NNPC over the $1.5 billion syndicated loan.

Spokesman of the Senate, Senator Enyinnaya Abaribe, has disclosed that the Senate did not approve the borrowing.Abaribe insisted that no government agency was authorised to borrow money without the approval of the National Assembly.

 "We have to know if that was done first. But then, the question to ask under the circumstance is: what happened to the N161billion supplementary appropriation that was approved by the National Assembly for the government to take care of the shortfall in the fuel subsidy budget, particularly to ensure steady supply of petroleum product during the yuletide?" he said.

Also, the chairman of the Senate Committee on Petroleum (Downstream), Senator Magnus Abe, said there was no record to show that approval was given to the NNPC to borrow the money.

The Chairman of the House of Representatives' Committee on Petroleum Resources (Downstream), Hon. Dakuku Peterside has also flayed the NNPC for its decision to obtain $1.5billion loan.  Peterside said in a statement that NNPC's plans to mortgage 150,000 barrels of crude daily for the "said pointless borrowing" did not meet with the degree of transparency as prescribed by the laws of the Federal Republic of Nigeria.

"This also confirms my fears that subsidy in its current form is a bottomless pit that needs to be urgently reviewed before the future of our nation and indeed that our children are mortgaged.  Ordinary Nigerians cannot continue to be traumatised by the manner in which subsidy is being managed. As a committee of National Assembly charged with oversight on this sector, we are determined to get to the root of this matter. This also brings to the fore the urgency needed to pass a Petroleum Industry Bill (PIB) that will unbundle NNPC and make it a profit centre instead of a cost centre that it is currently," he said.

He pointed out that all these troubling actions were coming at a time that the Republicans in the United States were pushing for a ceiling on how much debt the United States government could commit American people.

"Nigeria cannot afford to go back to the pre-Paris and London Club days when our growth was stunted by our high debt profile occasioned by reckless borrowing," he added.

The Benikrukru community in Warri South West Local Government Area of Delta State has made the assurance that the leadership tussle in the area would not disrupt the operations of Chevron Nigeria Limited (CNL), a subsidiary of the United States oil giant.

Chairman of the community, Mr. Jeffrey Ojogun stated this in a statement after receiving a vote of confidence passed on him and his executive by the people of the area.

Ojogun, whose tenure will expire in October this year, stated that there was no security threat to the operations of Chevron Nigeria Limited in the area.

He urged the United States oil giant to disregard the rumour of planned disruption of its operations in the area.

"As for Chevron operations, we will make sure that its facilities are well protected, we are going to ensure that there is no pipeline vandalism, no oil theft. It has not happened before and the people and Chevron know this quite well," he said.

"We are telling members of the public in general and Chevron in particular that there is no security threat in Benikrukru community and that there is no cause for alarm. We are peace loving people of the state and the country and ours is to ensure the promotion of the peace and security agenda of the Delta State Government."

He expressed his appreciation to the people of the community for the confidence passed on him and his executive.

"I am very grateful to the confidence all of you have reposed in my executives at this emergency meeting. We should put the purported dissolution behind us and forge ahead as one people; those who carried out this action are trying to cause disunity in our community and this is unacceptable to us. They are advised to tread the path of peace and promote the peace and security of our dynamic Governor Uduaghan."