The Federal Government has received a boost to its gas-to-power plans following the announcement that Nigeria Petroleum Development Company Limited (NPDC), the exploration and production arm of the Nigerian National Petroleum Corporation, has commenced delivery of 65 million standard cubic feet per day of gas from the Oredo field in Oil Mining Lease, OML 111. The project, which is about 65 per cent complete, will be fully commissioned in 2013. NPDC currently produces about 130,000 Barrels of Oil per day and 400 MMSCFD of gas from its assets.

Network Oil & Gas Company Limited is the contractor responsible for the execution of the project, known as the Oredo Integrated Gas Handling Facility (IGHF) and located about 35 kilometres sout of Benin in Edo State.  

When fully commissioned, the plant will produce 100mmscf/d lean gas, which meets the specification for the West African Gas Pipeline. It will also produce 330 tonnes per day of LPG boosting the domestic availability of the cleaner domestic fuel, which the federal government is keen to use to phase out the use of firewood and kerosene.

In another development, NPDC will be delivering 100mmscf/d of raw gas to Pan Ocean Oil Corporation. This will enable it to scoop up excess capacity at its Ovade Ogharefe gas plant.

Chinese firm, Sino Arab Energy (SAE) has signed an agreement to partner with Nigerian company, Osabo Refining and Petrochemical Industry Ltd, for the construction of a US$7.5bn refinery with a capacity to produce 107,000bpd. The refinery, which is expected to generate 10,000 jobs, will be located in the Akpabuyo Local Government Area of Cross River State.  

Following the announcement, Mr Etim Effiong Okon of Osabo Refining said: "The process for the procurement of requisite licenses to establish and operate the refinery has fully commenced. The Akwa Esuk Eyamba community where the refinery will be located has donated 500 hectares of land for the refinery."

"The refinery will be built with specifications that meet international standards. Its product base will include kerosene, jet fuel, diesel, gasoline, automotive gas oil, low pour fuel oil, high pour fuel oil, boat fuel, motor oil, lubricants, liquefied petroleum gas, LPG," he added.

Mr Okon said production at the refinery is expected to be fully operational within 5 years with a product base that will include Premium Motor Spirit, PMS, or petrol, kerosine, jet fuel, diesel, automotive gas oil, low pour fuel oil, high pour fuel oil, motor oil, lubricants and liquefied petroleum gas.  

The joint venture also expects to acquire upstream assets and enter into upstream operations as well as power generation.

Crude oil and gas exports in Nigeria have received a boost as Italian oil giant, Eni, finally lifted its force majeure declaration on Brass River oil loadings. The declaration came into effect in November 2012, following the severe flooding from the devastating floods that ravaged the oil-producing region.  

The data released by the Department of Petroleum Resources (DPR) had revealed that the flooding slashed Nigeria's crude oil production by 500,000 barrels per day (bpd). It is expected that the lifting of the force majeure will help ease the supply deficit caused by the flooding in the prolific Niger Delta.  

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had initially denied that the floods had any adverse effect on the country's crude oil production insisting that key oil and gas installations in the Niger Delta were still intact and had not recorded any damaging effect from the floods.

The Director of DPR, Mr. Osten Olorunsola, however, later disclosed that the floods in oil-producing areas had led to a sharp drop in the country's production.

He said both big and small oil producers were affected by the floods, but noted that smaller producers, particularly the marginal fields' operators were the worst hit.

Eni's lifting of its last force majeure on oil exports will boost exports. The declaration of force majeure frees a company from its contractual obligations to customers due to circumstances beyond its control. According to sources delays of more than a month for Brass River crude, which typically accounts for around 5 per cent of total Nigerian exports, had been reported by traders.

 "The force majeure has been lifted effective 0800 Nigerian time (0700 GMT) on Tuesday January 15," the company said in an official statement.

Production from the 12 members of the Organisation of Petroleum Exporting Countries (OPEC), which together supply about 40 per cent of the world's oil, fell to 30.64 million barrels a day in December, from 30.9 million the previous month, according to the International Energy Agency. This was the lowest production level of production from the OPEC nations after reduced output from Saudi Arabia and Iraq, its two largest producers.  

Nigeria's monthly output increased to 2.1 million barrels a day from November's 1.88 million after rebounding following the lifting of the force majeure declarations on some of the nation's top grades. The force majeure declarations came after the rains, which caused some of the worst flooding the country has seen since oil production began in Nigeria.

NIPCO Plc, has announced its plans to add 75 service stations to its 150 retail outfits during the course of 2013. The indigenous company said it also plans to increase its Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG or cooking gas) outlets.  

Managing Director, Mr. Venkataraman Venkatapathy, said "We have about 150 outlets running under the banner of NIPCO, we are trying to reach a figure of 200, and 225 by end of this year, and this is how far we want to go with the available support. We initially started with one LPG scheme in Jabi Abuja, after that we put one in Gusau and then one is in Lagos."

"Right now about LPG plans are running, another three more are in the pipeline and would be completed in the next two to three months. Our initial experiment with the LPG scheme in Jabi has been successful, and I think it is the largest filling outlet in Abuja," he added.

ExxonMobil predicts that, although energy sources will continue to evolve and diversify as global energy demand surges, oil will remain as the No. 1 fuel source by 2040.  

In it's "Outlook" publication the oil giant predicts that oil and gas will supply about 60 percent of global energy demand in 2040, up from 55 percent in 2010 according to their predictions. ExxonMobil projects that, due to the growth in "unconventional" supplies as a result of technology advancements, total liquids demands will rise to 113 million barrels per day of oil equivalent (MBDOE) in 2040, a 30 percent increase from 2010. About 70 percent of this increase is tied to the transportation sector.

Conventional crude production from both OPEC and non OPEC sources will see a slight decline over time. However, this decline is more than offset by rising production of crude oil from deepwater, oil sands and tight oil resources.

The successes of deepwater and oil sands developments are examples of how new technologies are key to delivering additional sources of liquid supplies to meet rising demand. Ten years ago, these supplies were barely on the on the radar the report said.

The prediction is that by 2040, only about 55 percent of the world's liquid supply will come from conventional crude oil production. The rest will be provided by deepwater, tight oil and NGLs, as well as oil sands and biofuels, as technology enables increased development of these resources.

ExxonMobil predicts that large deepwater developments, primarily in Angola and Nigeria, will drive growth in supplies in Africa.  

However, Andrew Ejayeriese, the General Manager of Operations, Technical Geoscience at Mobil Producing Nigeria, has poured cold water on the predictions in relation to Nigeria, saying  during the presentation that Nigeria's oil production has remained stagnant for 40 years and that the deepwater production has not moved during the period under review.

Niger Delta militants have threatened to return to the creeks unless the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke and Mr. Godsday Orubebe, Nigeria's Minister Niger Delta Affairs, are sacked by President Goodluck Jonathan.

The Federal Government's Amnesty Programme, which restored peace to the troubled region, in 2009 is also under threat as two former warlords have vowed to resume attacks on oil workers and installations if their demands are not met.

The two ex-commanders of the former militants, Ateke Tom and Ebikabowei Victor Ben, popularly known as Boyloaf, also threatened to withdraw their support for President Goodluck Jonathan's administration for poor performance.

The duo in a three-page statement accused Alison-Madueke and Orubebe of failing to deliver the dividends of democracy to Nigerians and warned that they should not be held responsible for the actions that would follow, if President Jonathan fails to sack the two ministers.  

They also say they are unhappy with Jonathan's performance. "So far, in summary, we believe that the government of President Jonathan has not done its best in reaching the yearnings and aspirations of Nigerians who overwhelmingly voted for him, even we his own people are seriously dissatisfied with the way things are going and may be left with no option than to withdraw our support for his government if things don't change in the best interest of Nigerians."

According to them, due to their desire to give peace a chance, they agreed to the terms of the Amnesty Programme, which included the development of the Niger Delta.

They however expressed regret that the creation of Ministry of Niger Delta Affairs and the strengthening of the Niger Delta Development Commission (NDDC), which were part of the agreements have not yielded any positive results in the development of the region.

"With recent happenings, we have come to the conclusion that the ministry that was set up to look into issues of infrastructural development of the region has turned to a total, catastrophic failure and embarrassment to the government and people it was set up to look into their affairs," the statement added.

They accused Orubebe of mishandling the ministry, endangering their future and that of unborn generations by what they described as "singular selfish reasons of amassing wealth for his personal gain."  

They continued: "We risked our lives in the creeks for years to fight and agitate for our region to be recognised and given attention by the Federal Government, only for it to come and we sit and watch a few people destroy it, we are now saying enough is enough. If nothing is urgently done we fear for the future and we cannot be held responsible.

On the oil and gas sector, the ex-militants said: "The Ministry of petroleum, which is in charge of overseeing the affairs of the Nigerian oil and gas sector is now a theatre of monumental fraud where all manner of shady deals are orchestrated. It is no longer news that things have gone so bad also thereby bringing serious embarrassment and shame to the government of President Jonathan."

"We are calling in strong terms that action be taken now to save our people this shame," they added.

Following the announcement last week of the plan by the Nigerian National Petroleum Corporation (NNPC) to obtain $1.5billion loan, the House of Representatives has launched investigations into the circumstances surrounding the loan. The House has also ordered the corporation to stop further action on the contentious syndicated credit, which it described as "illegal".

The resolution of the House was sequel to a motion sponsored by Hon. Ralph Nnanna Igbokwe, representing Imo State on the platform of the Peoples Democratic Party (PDP).

Raising the motion, Igbokwe argued that the NNPC should answer many questions on the circumstances of the loan.

House Speaker, Aminu Waziri Tambuwal, subsequently detailed the standing Committees on Loans and Debt; Justice; Petroleum Resources Downstream and Upstream to investigate the loan deal and report to the House within 14 days.

In view of this development, NNPC's Group Managing Director, Mr. Andrew Yakubu, is expected to appear before the House Committee on Petroleum Resources (Upstream) to explain the loan deal.

The Chairman of the Committee, Hon. Muraina Ajibola, disclosed that the committee had summoned the NNPC boss via a letter dated January 11, 2012.

The plan by the NNPC to borrow the syndicated loan to help it pay debts to international fuel traders had pitted the National Assembly against President Goodluck Jonathan-led executive arm of the Federal Government.

The transaction, if it sails through, will mark NNPC's first foreign syndicated loan, with BNP Paribas, Standard Bank and Standard Chartered among the international financial institutions behind the deal.

However, while the deal received the blessing of President Jonathan, the National Assembly has vehemently opposed to the transaction.  

The Senate had earlier vowed to probe the NNPC over the syndicated loan. Spokesman of the Senate, Senator Enyinnaya Abaribe, had 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.

The Managing Director of the Pipelines and Products Marketing Company Limited, PPMC, has revealed the extent of the losses the nation has suffered at the hands of pipeline vandals.

According to Mr Haruna Momoh, the country lost N165 billion in the last four years to pipeline vandalism. The figure includes the cost of repairs as well as the value of the products stolen from the pipelines. He revealed this at Mosimi Depot, Ogun State during the ceremony at the unveiling of new fire fighting trucks at the depot.

News of oil discovery in Kuje Area Council in the Federal Capital Territory, Abuja, appear to be a little exaggerated. The Chairman of the Council, Danladi Etsu Zhin, announced last week that oil had been discovered seeping through a 25 year old well. It now turns out that what was thought to be seepage of hydrocarbon deposits into the well was in fact leakage from a kerosene vendor's supply pipe. Nigerian National Petroleum Corporation (NNPC) could not confirm reports that the "discovery" had already been reported to the Corporation.