The FT Nigeria Oil and Gas Report 2013 is scheduled to come out on Monday 6th of May and will be distributed at OTC and to the Nigerian exhibitors there.

To find out about advertising opportunities  contact Mr Toke Ibru:

tokeibru@hotmail.com  

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Advertising Opportunity in OTC Special Print Edition    

We are creating a full print magazine version of NOGintelligence to commemorate the Oil Technology Conference (OTC), which will take place in Houston from the 6th to the 9th of May.  OTC is the world's premiere oil and gas conference and is regularly attended by top-level oil and gas executives from around the world. With all eyes on emerging market opportunities, it is anticipated that the Nigerian pavilion at this year's OTC will attract more people than ever before.

NOGintelligence will be there to capture the attention of visitors to the Nigerian pavilion where we will be distributing the magazine to attendees. We are also in negotiations with the organisers to have it in the drop box section at the conference, to ensure that every visitor to OTC gets a copy.Advertising in the OTC print edition of NOGintelligence will give you the best opportunity of reaching decision makers in the industry.

In addition to the print edition, a pdf version will be available to download from our website ensuring an even wider reach for your adverts. Your ad will be automatically included in the online version.As a bonus, we will also add your logo to the weekly newsletter for a period of one month from the date of the conference.

Especially for lawyers: full or double page write up on your firm and your special oil and gas expertise. This opportunity is also available for other professionals or companies. 

The deadline for submission of copy is Thursday 25th April. The ad size is A4. 

Shell Declares New Force Majeure On Bonny Light   

Barely one month after the Shell Petroleum Development Company of Nigeria Ltd (SPDC) shut down the Nembe Creek Trunkline (NCTL), the company has once again shut the troubled trunk line down to carry out essential maintenance. They shut the 97-kilometre line on Monday to remove crude oil theft connections and investigate suspected oil theft leaks. As a result, production of some 150,000 barrels of oil per day has been deferred and SPDC has declared force majeure on Bonny Light export.

Reiterating the concern of the company,

"The current exercise aims to remove a significant number of oil theft connections and repair any leaks on the pipeline. We recognise efforts by the security forces to contain the crime, and SPDC will work with them during the shutdown to clear illegal connections on the NCTL," he added.

The vital NCTL has been closed several times as a result of crude oil theft leaks and fires between December 2011 and May 2012. The last declaration of force majeure on the NCTL was only last month when it was shut down on the 5th of March after a leak was detected. A specialist mobilisation team was moved in to repair the line. Also, between the 22nd and 25th of February,12

Mr Sunmonu has called for the nation to join hands in tackling the escalating menace of crude theft. "Crude theft continues to affect people, the environment and the economy, and urgent action is needed by all stakeholders to tackle the problem," he said.

It is estimated that the country loses 150,000 barrels of oil per day to oil theft.

Addax Considering OPL 291 Exit? 

There are unconfirmed reports that Addax Petroleum Development Company, which operates Oil Prospecting Licence (OPL) 291 in which it has a 72.5% stake, is considering exiting the block. Addax acquired the its stake in the block from politically connected Emeka Offor's Starcrest Nigeria Energy Limited, amid a great deal of controversy in the aftermath of the 2006 licensing round.   

The block, which is in deep-water offshore Nigeria, was created after OPL 216 was converted into Oil Mining Lease (OML) 127 and the area of OPL 291 relinquished under the government's mandatory relinquishment programme. The prolific Agbami field operated by Chevron is located in OML 127.  It appears that following the acquisition of 3D seismic over the block, the interpretation of the data indicates that the block does not have oil in quantities that would be commercial for it to exploit especially given its deep-water location.

Starcrest won OPL 294 in the bid round while an Indian consortium won OPL 291. The Indians were unable to exercise their right of first refusal in time and lost out to Transnational Corporation (Transcorp). After Transcorp failed to secure a technical partner and pay the signature bonus, Starcrest went after the block. The company was allowed to swop OPL 294, which it won for OPL 291, which was considered likely to contain large reserves given its proximity to Agbami.

In the deal in which it acquired a stake in the block, Addax was required to pay the signature bonus of $55 million to the Nigerian government. In addition it was required to commit to a minimum investment of $75 million to cover the acquisition of 3D seismic and the drilling of one well. Addax was also required to pay the company a reputed $25 million farm-in fee as part of the deal. Addax would also pay Starcrest's share of exploration and development costs, which would be fully recoverable out of production. This extraordinary deal saw Starcrest walk away with $25 million dollars in hand with Addax left to carry the total risk on the block after having paid out $80 million in upfront costs.

A strong public outcry followed the news of the deal and Starcrest was investigated over the award but cleared of wrongdoing. At the time Addax said that the farm-in fee "was fully transparent, disclosed publicly at the time, and represented a good commercial opportunity for Addax Petroleum and its shareholders. The payment of a farm-in fee is standard practice in the industry."

Canadian national, Jean Claude Gandur, was the founder of Addax Petroleum, which he sold to Chinese state-owned Sinopec in 2009 for a reported $9.8 billion. He is back in Nigeria with Oryx Petroleum Corporation, which is currently trying to raise funds through an initial public offering to finance its 2011 farm-in into OML 141 owned by Emerald Energy Resources Limited and Amni International Petroleum Development Company Limited. It seems the only losers on the block are the Chinese who paid an inflated price for Addax partially valued on the expected yield of OPL 291.

Afren Prepares to Drill OML 115 Offshore Nigeria  

London Stock Exchange listed Afren's states that it is on schedule to commence drilling two explorations wells in OML 115 Ufon prospect, offshore Nigeria. The Ufon prospect is a three-way dip closed structure that is interpreted to have oil prospectivity in the same D Series reservoirs that have proven to be oil bearing at the nearby Ebok and Okwok fields.  

Afren, the operator of the block, farmed into it early in 2010 entering into a joint venture agreement with Oriental Energy Resources (OER) and Energy Equity Resources (EER). The block adjoins the Ebok and Okwok development area in which Afren and OER have had great success already. The success of the Ebok and Okoro fields have helped the company go from 19,000 barrels per day (bpd) to 43,000 bpd boosting its share price on the LSE along the way.

When Afren farmed in, it acquired 81.25 per cent of EER's 40 per cent of OML 115, giving it a total of 32.5 per cent. It however, had an effective economic interest of between 77 per cent and 100 per cent pre cost recovery. It also had to shell out around US$6 million upfront including signature bonuses for the acquisition. Under the deal, Afren was to carry OER and EER for the drilling of one well (at a cost of around $30 million) after which the OER and EER would be required to meet future cash calls.  

The proximity of the block to Ebok and Okwok was a big influence on the decision to make the acquisition. At the time of the acquisition, the Chief Executive of Afren, Osman Shahensah, said: "OML 115 represents an attractive exploration opportunity at minimal up front cost, adjacent to the Ebok and Okwok fields, where we have enjoyed considerable appraisal success. The close proximity of OML 115 to the Ebok - Okwok complex will provide a pre-existing export solution for any development on the block."

Afren currently has a 100 per cent pre cost-recovery working interest and a 50 per cent post cost-recovery working interest. OER remains a partner in the block. 

The southern portion of the Okwok structure (Okwok South) extends into OML 115. With production processing, storage and export infrastructure in place at the Ebok field, they have a readily available export route for any potential future development in the area. They completed 3D seismic over the whole Ebok/Okwok/OML 115 in 4 November 2011. They hope to spud their first well within months using the GSF Monitor drilling rig.

Africa's richest man, Alhaji Aliko Dangote has announced that he plans to build a refinery at a cost of $8 billion. He made the announcement this week in Lagos, saying that the refinery will start once the company has secured the appropriate approvals from the government. The location and capacity of the proposed refinery are yet to be confirmed.

The history of Nigeria's refining capacity is not very encouraging. Last year, the President set up the National Refineries Special Task Force (NRSTF) to report on the state of the nation's refineries. The report confirmed the diabolical state of the nation's refineries. The Task Force found that although Nigeria had the largest production capacity in Africa, at 445,000 barrels per day between the three traditional refineries, the country had an average utilization of just 18%, making them the worst performing of Africa's 42 refineries. This compares unfavourably with Egypt's 81% and South Africa's 85% for the period from 2006-9.

Earlier this year, the Chairman of the Association of Private Refineries Owners of Nigeria (APRON), Justice Samuel Ilori, accused the Federal Government of frustrating the take-off of private refineries by introducing policies that are not favourable to the projects.  Eight years ago, he said, the government granted licenses to 18 private firms to build and operate refineries after paying $1 million each, altogether amounting to $18 million to the government as stipulated in the guidelines. The licences have now been revoked by the Department of Petroleum Resources (DPR) for their failure to meet the 18-month deadline to build the refineries.

Ilori criticised the fiscal policies saying that the crude oil allocation formula, which stipulates that the "government will guarantee crude oil requirement of refineries up to the maximum turn down ratio, that is, 60 per cent processing capacity of the plant to the extent that crude is available" is not helpful. He argued that it should be 100 per cent to serve as an incentive to private refiners. To ask them to source for 40 per cent of their crude needs may be problematic, he said.

With all the 19 licences issued so far failing to result in a single new refinery, Dangote is urging the Federal Government to allow market forces to determine the price of fuel.  

"We are all aware that the federal government had issued 19 licences to the private sector to establish refineries in the country, but how many of them have come on stream? There is uncertainty in the sector and only a mad businessman will put up a refinery now, but we are set to do that," he said.  

He was however sure, that the refinery would succeed in spite of these problems, saying they had done the numbers and the numbers looked good. Analysts are saying privately that his strong government connections should secure the appropriate policies which will ensure the success of the project that could see Nigeria's refining capacity doubled to 400,000 barrels by the time the refinery comes on stream within the next three years.

Dangote is already invested in the upstream sector. The group's Equity Energy Resources owns 9 per cent of Block I in the Joint Development Zone ( JDZ ) of Nigeria Sao-Tome along with Chevron Texaco and Exxon Mobil. The company also has a 10 per cent share in Block III in JDZ of Nigeria along with Anadakko as Operator as well as a 6 per cent stake in Block 315 in Nigeria along with Statoil and Petrobas as operators.

OPEC Daily Basket Price Slides To $96.71 A Barrel Wednesday, 17 April 2013  

The price of the Organisation of Petroleum Exporting Countries (OPEC) basket of twelve crudes continued its downward slide, ending at $96.71 dollars a barrel on Wednesday, compared with $97.15 the previous day, according to OPEC Secretariat calculations.  

The price of the OPEC basket has been under pressure since the 2nd of April when it stood at $108.16. Since then it has continued to slide, although temporarily recovering between the 9th of April and 10th of April when it stood at to $102.72and $103.26 respectively.

Analysts say that data showing that growth in China was slowing after demand fell to its lowest in seven months in March triggered the steep drop in crude prices around the world to below $100 for the first time this year.  

Prices are expected to recover as traders re-enter the market at the lower prices. Concern over supplies following SPDC's force majeure declaration on Bonny Light is also likely to support prices. Shell Petroleum Developing Company (SPDC) shut down the 150,000-barrel-a-day Nembe Creek pipeline for repairs on Wednesday.  

The Iranian Oil Minister, Rostam Qasemi said on Wednesday that OPEC members would hold an emergency meeting if oil prices stayed below $100 a barrel but there has been no reaction to the statement from other member countries. OPEC's is scheduled to meet on the 31st of May.

AVEON Offshore Wins Major Subsea Systems Components Contract

Aveon Offshore Limited, an engineering and fabrication services company, has won the contract for the fabrication of some major components of the subsea systems for the Esso Exploration and Production Nigeria Limited (EEPNL) Erha North Phase 2 Project. The wholly Nigerian owned company secured the contract from Cameron Offshore Systems Nigeria Limited who won the Engineering Procurement Construction contract for the subsea systems of the project.  

Aveon's fabrication yard in Rumuolumeni, near Port Harcourt, is preparing its 240,000 sq m fabrication yard to take on the project. They expect it to generate 200,000 productive man-hours of work. The company is now intending to add a dedicated 2,000 m2 high-bay workshop that will ensure that it has the capacity to handle the job with delivery scheduled for between August and October 2014.  

NOGintelligence featured Cameron Offshore Systems Nigeria Limited in October last year when we reported that the company had completed its first made in Nigeria sub-sea Christmas Tree for Total's Usan project. At the time, the Executive Secretary of the Nigerian content Development Management Board, Mr Ernest Nwapa, commended the company on the completion of the Christmas Tree, saying: "In the next 3-5 years Nigeria will have over 25 globally recognised original Equipment Manufacturers making their equipment or major components here, either directly or using their Nigerian representatives".

It appears Mr Nwapa's prediction is slowly being borne out. Aveon says that the project will help it fulfill a strategic milestone in the development of the company as a sustainable Nigerian owned fabrication yard serving the oil & gas industry.

New Spill Detection Technology Utilises Fluorescence To Detect Oil Spills 

An American company says it has developed a technology that uses fluorescence to detect early signs of oil spills. Many oil companies rely on unsophisticated visual reports.

With the new technology, expert, Bala Zakka said oil companies can now heave a sigh of relief as natural fluorescence of even tiny amounts of oil in or on water can be detected with ease.

Zakka, who spoke to NOGintelligence said that the technology which was developed by an American company, Cambridge Consultants, utilises fluorescence to detect leaks or spills.

"The new fluorescent oil spill technology is one that the oil industry will find very handy in stemming the rising incidence of oil spills in the Niger Delta. The way it works is that if you shine the ultraviolet light onto the various different types of crude oil, you will get a fluorescent signal. However, there are other things that also fluoresce and give off visible light if you eliminate them in that sort of environment. The trick is to know how you can tell the difference between what is oil and what is something you are not concerned with," he said.

The complicated technology entails developing a sensory set up to understand the illuminating ultraviolet source, how much power is being put in and how it is distributed.  The technology looks at the detection optics, the optical arrangement and the sensor itself, which collects the fluorescent light and puts it unto a detector.  It is also important to detect the fluorescent signals that get in the way, what sort of signal they might give off and the different ways you might separate them out from the signal you are trying to measure.

He urged major oil companies to take advantage of the new technology for the purpose of detecting leaks that may arise from vandalism or pipeline rupture early enough so that intervention works can be carried out on time.

To address the issue of pipeline vandalism, Zagga urged the Federal Government and major oil companies to consider the deployment of fibre optic technology for monitoring the safety of the pipelines.

Nairobi, Kenya

18 - 19 April

www.expogr.com/kenyaoil 

21st Annual Middle East Petroleum & Gas Conference

Abu Dhabi, United Arab Emirates,

21 - 23 April

www.cconnection.org

19th Western Africa Oil/Gas & Energy Conference

Windhoek, Namibia

22 April

www.pr-inside.com

Oil & Gas Libya Exhibition & Conference

Tripoli, Libya

22 - 25 April

www.oilandgaslibya.com

2nd Oil & Gas Africa Summit

Nairobi,   Kenya

29April - 1 May

www.Africa.oilgassummit.Com

Offshore Technology Conference

Texas, United State of America

6 - 9 May

www.otcnet.org

13th International Downstream Technology & Strategy Conference

Hrvatska, Croatia

14 - 15 May

www.europetro.com

PETRO.TEX Africa

Johannesburg, South Africa

14 - 16 May

www.thepetropro.com

Kuala Lumpur, Malaysia 

22 - 25 May

www.producedwaterevent.com

Eastern Mediterranean New Frontier Exploration Forum

London, United Kingdom

28 - 29 May

www.bis-grp.com 

Nigeria Oil & Gas Technology Exhibition

Lagos, Nigeria.

4 - 6 June

www.cwcnogtech.com

Oil Spill Conference

 Accra Ghana

12 - 14 June

oilspillconferenceng.com

4th Eastern Africa Oil, Gas & Energy Conference

Nairobi, Kenya

16 - 20 June

www.petro21.com

North Africa Gas Summit

Rome, Italy

24 June

www.north-africa-gas.com