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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Midwestern/Mart Resume Umusadege Field Operations     

Barely a month after Mart Resources, secured a $100,000 loan facility, production from Umusadege field has resumed. Resumption of operations on the field follows notice by the Nigerian Agip Oil Company, the pipeline operator, that maintenance and repairs to the export pipeline have been completed. Production and deliveries into the export pipeline, which was shut down in February have now resumed and are expected to reach normal levels over the next few days.  

The Umusadege field is in an area of 3,771 gross acres, located within Oil Prospecting License (OPL) 283 onshore, in Delta State. The field was formally awarded to Midwestern Oil and Gas Plc. as Operator (70 per cent) and Suntrust Oil Limited (30 per cent) on February 25, 2003. Mart Resources entered into an agreement with Midwestern on April 27, 2006 and with Suntrust on May 22, 2006 to participate in the block and provide technical and financial services to the joint venture.

The Umusadege field is a multiple-horizon hydrocarbon reservoir situated in the North Central area of the Niger Delta basin and it contains 13 known reservoirs. Commercial production commenced from 2008 and as at May 2011 the field had reached an average production of 10,525 barrels of oil per day (bpd).

Mart and its partners installed 10,000 bpd early production facilities (EPF) in 2008. A permanent central production facility (CPF) has been installed to replace the EPF, with further expansion on-going to reach a capacity for the full field development (30,000 - 35,000 bopd) from the Umusadege field.

Crude from the Umusadege field is being purchased by Ente Nazionale Idrocaburi (ENI) under a Crude Sale and Purchase Agreement and exported through the Brass Terminal.

The Canadian TSX listed Mart announced dividends of $0.05 to its shareholders in March shortly before securing a $100 million loan facility through its Nigerian subsidiary from Guarantee Trust Bank. The 5-year facility bears interest at 90 days LIBOR plus 4% with a floor of 8.25%.  

Mart said in a statement that the funds would be used to finance capital expenditure required for further field development activities. With operations resuming on the field barely a month later, concerns about the company being able to service the huge debt are now reduced.

Mr. Wade Cherwayko, the Chairman and Chief Executive Officer of Mart Resources, said of the loan: "Mart is very pleased to have made this arrangement with Guaranty Trust Bank PLC and anticipates that the additional flexibility the facility can provide will enable Mart to move ahead quickly with development and potential growth plans."

Conoil Carries Out Appraisal Of Ango Deep Discoveries  

Indigenous producer, Conoil is appraising its two discoveries at Ango, an area with the thickest sedimentary sequences and one of the deepest pay zones in the Niger Delta.

The flow test in one of the two reservoirs, Ango-1 Stk 3 in Oil Mining Lease (OML) 5

The company has moved the Depthwize-owned swamp barge Majestic to Ango-2, to appraise the deep oil zones it tested in Ango-1 Sidetrack 3. The plan is to drill Ango-2 to a depth of 18,500 feet and also probe the reservoirs it was unable to reach first time round in the discovery well.

The aggressive work programme is paying off as the company is now looking to do even more drilling on its Oil Prospecting Licence 290 where it is drilling the Mbuotidem Deep1x in shallow water off the south eastern part of the Niger Delta using Seawolf's Oritsemehin Jack Up. The current depth of the well is about 12,100ft. Wells drilled in the area have not gone deeper than 9,000 feet on average and the Mbuotidem well has experienced some pressure challenges and some incidents.

The company is not stopping there and has mobilised another one of Depthwize's rigs, Imperial, to Ekokor Deep1X in OPL 2007.

This frenzied activity by Conoil should enable it to get the most it can out of its assets. With a current production of 25,000 barrels per day mostly from its Otuo South field - 30 kilometres from the wells - the indigenous producer hopes to add reserves variously estimated at between 30 million and 75 million barrels to its portfolio.

NNPC GED Anthony Ogbuigwe Elected President, African Refiners Association

The African Refiners Association, ARA has elected Nigerian National Petroleum Corporation (NNPC) Group Executive Director (GED) for Refining and Petrochemicals as its new President, Anthony Ogbuigwe, replacing Anabella Fonseca of Sonangol. He is a fellow of the Nigerian Society of Chemical Engineers, a Chartered Engineer and a Member of the Nigerian Society of Engineers.  

Before being appointed GED, Ogbuigwe was the Managing Director of the Port Harcourt Refining Company Limited. He was chosen to replace the outgoing head when the organisation met at its annual gathering, the African Refiners Association Week in Cape Town.

Mr Ogbuigwe is keen to leave a strong legacy and says that he will focus on a number of objectives. He wants to improve the efficiency and reliability of operations in African refineries. He also wants to foster the production and distribution of high quality petroleum products to drive high growth in African economies. He is keen to ensure that best practices in health and safety are maintained. It is also his desire to work with regional groups to ensure that the common fuel specifications on the octane, sulphur and benzene levels for Gasoline and the sulphur cetane, and density levels for Diesel are adopted across the regions. He wants this to be done within economic zones and common fiscal structures along regional supply chains.

"This will encourage free trade between neighbouring countries, avoid smuggling and adulteration, and help create the regional cross-border optimisation that is necessary for an efficient low cost product supply," he said.

Ogbuigwe was appointed GED on 26th June 2012, where he oversees the operation of the four refineries in Nigeria. He is already making his position felt in that role, with a report that the dismal efficiency rates of the refineries have already improved since he took his post. This has resulted in a greater supply of petroleum products in the country and a reduction in imports.

Mobil To Begin Sale of Power From Qua Iboe 500MW Plant  

Mobil Producing Nigeria Unlimited (MPN) will soon begin to undertake the sale of power to Nigerian Bulk Electricity Trading Plc for itself and on behalf of its joint venture partner, the Nigerian National Petroleum Corporation. MPN confirmed that it had signed a Seller's Representative Agreement (SRA) for the Qua Iboe Power Project, located at MPN's Qua Iboe terminal in the state of Akwa Ibom State.  

The 500MW Qua Iboe Power Project includes a gas-fired power plant using simple cycle gas turbine generators and a high voltage transmission line from MPNU's Qua Iboe Terminal (QIT) to PHCN substation Ikot Abasi.

The execution of the SRA is a critical part of the commercial framework for the project, which, according to the Managing Director of Mobil Producing Nigeria, Mark Ward, is a clear demonstration of the company's commitment to the President's stated priority of providing electricity to the whole country.

The company said in a statement that Front End Engineering Design (FEED) and Environmental Impact Assessments for the project have been concluded, adding that commercial tenders for Engineering, Procurement and Construction are near completion. Austrian and German headquartered engineering firm, ILF were the consulting engineers on the FEED contract, which was in two parts. First, the gas turbine power plant and also the 330kv high voltage transmission line which connects the plant with the national grid. ILF was also involved in topographical and geotechnical surveys, the EIA for the transmission line, the issue of construction documentation for the fuel gas piping across QIT, the preparation of the Invitation To Tender (ITT) documents and the criteria to evaluate the bids in the subsequent phase of EPC Tendering.

The power station will provide an additional 500MW to the national grid in a nation that is massively underpowered. The country generates 2,000MW as against its current potential capacity requirement of 6,000 MW. The government has stated that it intends to ramp that up to 10,000MW.

At the ground-breaking ceremony when the project began in 2009, the Group Managing Director of NNPC, Dr. Mohammed Sanusi Barkindo expressed optimism at the time that with the Federal Government's 6000MW power target, the Nigerian economy was set to join the next eleven most developed economies in the world.

"The aspiration of the Federal Government to achieve a higher and higher power target remains at the front burner of the nation which has the potential of transforming the Nigerian economy to a tiger economy," Dr. Barkindo said at the time. Four years later, and it appears that not much has changed.

OPEC Daily Basket Price Stood At $98.96 A Barrel Wednesday, 24 April 2013

The price of OPEC basket of twelve crudes stood at $98.96 a barrel on Wednesday, edging up from $97.52 the previous day, as prices continued to stay below the $100 mark.

The question now on everyone's lips is "Will OPEC cut output?" Venezuela and Iran are already calling for an emergency meeting ahead of the OPEC meeting scheduled for May 31 although there has been no official reaction from OPEC. Traders and analysts are bracing themselves for a reaction after the recent price plunge, given the strong reliance by many of the organisation's member nations on oil for revenue. Many will be struggling to balance their budgets if prices continue to slide.

There is a strong expectation that if prices remain under $100 for much longer, OPEC may cut production. OPEC supplies more than a third of the world's oil demands, meeting twice a year to decide on production levels. It kept oil output limits unchanged at a meeting its last meeting in December.

In any case, OPEC is already experiencing a drop in exports as seaborne oil exports from OPEC are estimated to fall by 220,000 bpd in the four weeks to May according to Oil Movements, which calculates the volumes by tallying tanker bookings. The force majeure declaration by Shell on Bonny Light crude exports is also adding pressure after the vital 150,000 barrels per day Nembe Creek pipeline shut for repairs.

Some analysts are saying that an emergency meeting is unlikely as prices have started to shore up with increasing speculation about an OPEC production cut. But that does not mean a production cut is off the table at the scheduled meeting on the 31st.

PEFMB Commences 100% E-Tracking Of Products Distribution  

In a bid to combat the high incidence of fraud in the movement of petroleum products around the country, the Petroleum Equalization Fund (Management) Board (PEFMB) has commenced electronic monitoring of product distribution from its depots to other areas in the country. The PEFMB's role is to ensure that each marketing company complies with the laws regarding the management of the transportation equalisation process, and to equalise the transportation differentials in product marketing in the country.

The fund has provided a way to equalise the price differential in transportation costs incurred by marketers moving products from the coastal parts to other areas of the country. Without the Fund, products would be more expensive the further away from the depot the area is. This would mean that the north would end up paying much more for petrol than the south.  

The Fund is intended to plug the gap ensuring that uniform petroleum products prices are maintained throughout the country. Unfortunately, the system has been prone to abuse and the electronic monitoring system was brought in to make it easier to monitor the distribution of products.

The Board's Head of Government and Public Relations, Goddy Nnadi, said the project, code-named named Aquila, started in January 2013 but that the board had decided to insist on complete compliance. He said that the board would no longer process any payment to petroleum product distributors who refused to comply with the new directives.

He said: "We have started full automation of our payment and monitory of petroleum product marketers.  We are covering 68 depot and we have gone 100 per cent, which means that we will no longer process anything manually. We have stopped all manual processing since March and we want to ensure that we clear the remaining ones by June."  

Speaking on the benefits of the new system, Nnadi stated: "This automation of your services will ensure availability of products in every parts of the country.  Nobody will be able to divert products and it will save the country a huge sum of money, which would have been wasted to irregularities in the old system.  The system is very transparent as everybody can confirm the movement of trucks and when payments were made."

Every year over N17 billion is paid to petroleum products transporters from the Fund, for distributing products nationwide, and this amount is built into every litre of products purchased by consumers.

Nigerian Navy Launches Information Website In War On Crude Oil Theft

The Nigerian Navy has launched a new website on crude oil theft and pipeline vandalism as part of a new phase in its war on crude oil theft. The website www.cot.navy.mil.ng is intended to be a means of providing information to citizens and stakeholders on the growing menance of crude oil theft.  

The website has facts and figures on crude theft and its impact on the nation. For example, it explains what is considered to be crude oil theft and the economic, environmental, social and health impacts. Some commentators have long suggested that sensitising Nigerians to the issue was going to be an important part of the war on crude theft so that every Nigerian feels affected by the problem. Only when the ordinary person on the street feels the pain of the impact of crude oil theft, some say, will the country stand a chance of getting rid of the problem.

The Director of Information of the Nigerian Navy, Commodore Kabiru Aliyu explained:

"The website serves as a platform to share information, exchange ideas with the international community and reports of suspicious activities. The website also generates the desired global awareness on the scourge of oil theft and pipeline vandalism."

He asked members of the public to report any information concerning illegal activities relating to petroleum products to the Nigerian Navy, other Services, security agencies, NNPC, Directorate of Petroleum Resources and the Nigeria Police for necessary action.

"All are hereby warned against crude oil theft, pipeline vandalism and illegal bunkering activities in Nigeria as culprits will be prosecuted and sanctioned accordingly," he said in the statement.

Northern States Governors' Forum Reject PIB Host Community Fund

The Northern States Governors Forum (NSGF) has issued a memorandum to the House of Representatives Ad-hoc Committee on the Petroleum Industry Bill (PIB) stating its position on the proposed Host Communities Fund. The NSGF has rejected the provision, which will see host communities retaining ten per cent of oil companies' net profit. They say that the provision is a ploy to give more revenue to oil producing states.

The memo, which was signed by the Chairman of the Northern States Governors Forum (NSGF), Governor Babangida Aliyu, said: "The most controversial provision of PIB 2012 is the introduction of the Host Communities Fund, which is creating a fourth tier of government in the sharing of the revenue of the Federation." He added that the Niger Delta Development Commission (NDDC) is meant to take care of the special needs of the host oil-producing communities.

He was also concerned about how a host community is to be identified. He said: "The PIB does not state exactly what constitutes a host community or how funds will be conveyed to the community."

It is the view of the NSGF that the issue of revenue allocation is already adequately covered using the derivation formula. "The Constitution of the Federal Republic of Nigeria already allocates 13 per cent of petroleum income as derivation precisely to cater for the special needs of petroleum producing communities; the 10 per cent Host Community funds in PIB 2012 is merely an attempt to extend this through an act of the National Assembly without the required constitutional amendment," the statement said.

"In other words, the issue of derivation has already been exhausted in the Constitution. What is rather needed to be done is improvement on the present derivation factors and formulas to correct disparity and open other opportunities for other parts of the country," the statement added.

 House of Representatives Holds Public Hearings on PIB  

The House of Representatives Ad Hoc Committee's Public Hearings on the Petroleum Industry Bill (PIB) have been conducted in the six geo-political zones of the country as the PIB continues to inch its way towards legislation. The public hearings will enable members of the public to have their say in the legislative process.  

The zonal public hearings were scheduled to hold simultaneously on April 22 and 23, 2013 in the various zones. Ilorin hosted the North-Central public hearing, and Kaduna hosted the North-West, while Gombe hosted the North-East. Lagos was the host of the South-West while Port Harcourt hosted the South-South and Enugu played host to the South-East.

The constituted panel will meet in Abuja at the end of the scheduled zonal hearing with their Senate counterpart for a three-day conference to harmonise their reports and collate further views of other interested stakeholders who might have been inadvertently left out of the zonal hearings.       

Members of the Committee are: Hon. Isiaka Mohammed Bawa, Chief Whip of the House, who is the Chairman of the 26 Member Ad-Hoc Committee, while the Minority Whip, Hon. Samson Osagie (SAN), is his deputy.

Other members of the Committee are: Chairman of the Committee on Petroleum Resources (Upstream) Muraina Ajibola (PDP: Ibarapa Central/North, Oyo State), and his Deputy, Moshood Mustapha (PDP: Ilorin West/Asa, Kwara State); Chairman Petroleum Resources (Downstream) Peterside Dakuku (PDP: Opobo/Nkoro/Andoni, Rivers State); and his Deputy Yusuf Galambi (PDP: Gwaram, Jigawa state); Chairman of the Committee on Environment Uche Ekwunife (APGA: Anaocha/Njikoka/dunukofia, Anambra State); and her Deputy, Abubakar Musa (CPC: Soba, Kaduna State); Chairman of the Committee on Gas, Bassey Ewa (PDP:Yakrr/Abi, Cross River); and his Deputy, Gerald Ironna (APGA: Ohaji/Egbema/Oguta/Oru West, Imo State); Chairman of the Committee on Justice, Ali Ahmed (PDP: Ilorin East/ South, Kwara State); and his Deputy, Emeka Nwaogbo (APGA: Awka North/ South, Anambra State); and Chairman of the Committee on Local Content, Hon. Asita (PDP: Ogba/Ebgema/Ndoni?Ahoada West, Rivers State); and his Deputy, Nasir Ali Ahmed (CPC: Nasarawa, Kano State).

The remaining members are Yusuf Manu (PDP: Balanga/Biliri, Gombe State), Hassan Saleh (PDP: Ado/Ogbadibo/Okpokwo, Benue state), Daniel Reyenieju (PDP: Warri South/West, Delta State), Musa Sarkin Adar (PDP: Goronyo/Gada, Sokoto State), Kadija Bukar Ibrahim (ANPP: Damaturu/Gujba/Gulani/Tarmuwa, Yobe State), Rafeesuat Bamiro, Uzor Azubuike (PDP: Abia North/South, Abia State), Peter Akpatason (ACN:Akoko-Edo, Edo State) and Rotimi Makinde.

 Activists Fail In Bid to Bring US Action Against Shell    

Activists hoping to use the US Alien Tort Statute (ATS) to sue Shell over the death of nine protesters in the 1990s have been stopped by the US Supreme Court from doing so. The plaintiffs had hoped to use the law to sue Shell for the death of the Nigerian activists known as the Ogoni Nine who protested against Shell's operations in the Niger Delta and were tortured and hanged by Abacha's military junta in 1995. They say Shell, operating in the Ogoni region at the time, was complicit in the torture and murder of the protesters.

In the ruling, which is likely to result in a significant reduction in international human rights litigation in U.S. courts, the Supreme Court has held that claims will generally not be allowed under the ATS if they concern conduct occurring in the territory of a foreign sovereign. The Court in Kiobel v. Royal Dutch Petroleum Co. invoked the "presumption against extraterritoriality" pursuant to which U.S. laws are assumed not to apply to conduct abroad

In the case, twelve Nigerian citizens who had obtained political asylum in the United States brought suit against Shell companies, alleging that, through their Nigerian subsidiary, the companies had aided and abetted human rights violations committed by the Nigerian military in the 1990s. The defendants' Nigerian subsidiary was specifically alleged to have provided transportation to Nigerian forces; allowed their property to be utilized as a staging ground for attacks; provided food for soldiers involved in the attacks; and provided compensation to those soldiers. The suit was brought under the name of Esther Kiobel, the wife of the late Dr Barinem Kiobel, one of the Ogoni Nine.

First enacted as part of the Judiciary Act of 1789, the ATS provides that "the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." Few cases were brought under the ATS prior to the Second Circuit's landmark 1980 decision in Filartiga v. Pena-Irala, which held that victims of human rights abuses in other countries could use the statute to sue the perpetrators of the abuse in U.S. courts.

On April 17th, the Supreme Court affirmed the Second Circuit's dismissal of the suit in Kiobel. On the facts, all the relevant conduct took place outside the United States. And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application they ruled.  

Commenting on the Supreme Court decision, Peter Rees, Shell's Legal Director, said:  "In our view, the Court has reached the right decision.  At Shell, we remain firmly committed to supporting fundamental human rights in line with the legitimate role of business, and I want to make clear that we deny, in the strongest possible terms, the allegations made by the plaintiffs in this tragic case."

"But we've always maintained this case has nothing to do with the United States.  The Alien Tort Statute is an 18th Century law designed for an entirely different purpose and certainly not for application where there is no connection with the United States. Today's decision doesn't weaken the human rights of people around the world; it makes it clear that the Alien Tort Statute does not provide a means for claims to be brought in the US, which have nothing to do with the US. We appreciate the opportunity to have been heard in this case, and we are pleased that the Court has now clarified this area of the law," he added.

Shell has since returned to the Ogoni region, but in a statement issued at the time, the company was at pains to stress that it was not there to begin operations in the area but was there to conduct an inventory of its equipment in the area following the report of a United Nations agency report on the devastating consequences of oil operations on the Ogoniland area.

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