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Greetings!
Welcome to our 52nd issue. The PDF version of our April magazine is now available to read, download and share by clicking here. You may also access it via our home page at www.NOGintelligence.com.
We are excited to announce that we will soon have an ex BBC broadcast journalist on board. He will be working on the print version of NOGintelligence. We will reveal more when all the details have been finalised. We are also employing a top design team that will ensure the magazine is attractive and very readable. As we expand our team you can be sure of a world class magazine with top quality content, design and print.
We are now taking ads for our May magazine edition with a focus on Technology. It will be distributed at NOG Tech in Lagos which starts on the 4th of June and also at the Oil Council's Africa Assembly in Paris starting on the 11th of June. Do make sure you book your ad on time as the deadline is fast approaching and we can only take a limited number of adverts. You can find out rates by clicking here or visiting our website.
To book an ad, simply email me, editor@NOGintellligence.com.
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Westbridge Energy Corporation Looking For Nigerian Assets
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TSX Venture Exchange listed Westbridge Energy Corporation, which describes itself as having a "robust portfolio of oil and gas licences" in Walvis Basin, offshore Namibia has announced a new strategic alliance that will provide it with an entry into Nigeria. The company, which is already present in the vastly under-explored basin in Namibia, has entered into an agreement with United Oil and Gas Nigeria Limited (UOG), which will enable them to jointly acquire Nigerian assets. They are looking to acquire asses that are near term production as well as exploration assets.
Westbrige is a big player in Namibia where it has five licenses over five blocks (1811B, 1911A rel, 1912B, 1910A rel and 2011A rel) in Namibia, which cover over 21,448 square kilometers and contain over 10,000 line kilometers of high quality 2D seismic data. Westbridge is Operator of the licenses and has an 80% working interest in 1811b and a 75% working interest in the remaining four licenses.
UOG was founded by Dr. Ebi Omatsola who has been active in the international oil and gas sector for over 40 years. The former Chief Geologist for Shell, has extensive experience in Nigeria, Oman, Ghana, Gabon, Namibia and Kenya. He was also New Ventures & Area Geologist for Sub-Saharan Africa for Shell International. He currently serves as an adviser to Westbridge and is also Vice-Chairman of Mike Adenuga's Conoil Group of Companies. Conoil Producing, the exploration and production offspin is one of the largest indigenous net oil producers in the country.
Commenting on the deal, Mark Frewin, Westbridge's Chairman said: "Westbridge is delighted to be working alongside United Oil and Gas Nigeria Ltd.," he said.
"Our strategic alliance with UOG will provide Westbridge with world class opportunities and access to outstanding technical, governmental and business experience in Nigeria's oil and gas sector. By developing additional assets alongside UOG, Westbridge will have the potential to create significant value on an accelerated basis for our stakeholders."
Westbridge and UOG will work together to develop the assets in Nigeria with UOG providing local technical support, access to financing, development opportunities and infrastructure. Tosin Omatsola is President and CEO of Westbridge.
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Dangote In $4.5 Billion Record Time Fund Raise For 400,000 Bpd Refinery
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Barely a month after announcing his intention to build a 400,000 barrels per day refinery that will effectively double Nigeria's refining capacity, Africa's richest man, Aliko Dangote, has secured $4.25 billion bank loans to finance the refinery project.
Dangote made the revelation while speaking at the World Economic Forum in South Africa, where he said the loans came from a consortium of offshore and Nigerian banks. The neck-breaking speed with which he secured the loans is a display of Dangote's financial clout as banks line up to do business with his group of companies. He is also now able to silence sceptics who were wondering if the announcement on his 57th birthday was just a publicity stunt. The man who does nothing in half measures can now show he means business when he says he will turn around Nigeria's ailing refining industry.
When, on his 57th birthday, he announced his intention to build the refinery, Dangote said he was concerned about Nigeria's dependence on imports to meet some 70% of its local needs for petroleum products. With Nigeria's four refineries still underperforming, the nation desperately needs to increase its refining capacity. At the time of the announcement, Dangote said he was planning to invest up to $8 billion on the refinery, which he was hoping would be completed in 2016.
Speaking with NOGintelligence on the issue of Nigeria's ailing refineries, the President, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Babatunde Ogun said that the refineries which are working at reduced and less optimal capacity are currently undergoing Turn Around Maintenance (TAM).
Last year, the chairman of the Association of Private Refinery 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. Dangote is quoted as saying that only a mad man would choose to build a refinery in Nigeria under the present circumstances but that he had done the maths and it was all adding up.
The Minister of Petroleum Resources, Diezani Allison-Madueke, speaking through the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), said at the recently concluded Oil Technology Conference (OTC) in Houston, that the Federal Government has signed deals worth between $51.8 billion and N8.1 trillion with various local and international investors between 2011 and 2012 for the construction of 10 new refineries across the country. However, she said, the Government has not been able to achieve much progress, as some investors have not been able to meet deadlines and progress to the next level of negotiation. She admits that the business model is not quite right. No investors will want to invest in a regulated environment. Today, the petroleum product market is regulated and there are quite a number of things that are needed to be done to ensure that the business environment is conducive enough for investors to invest. "The business model must be right," Mrs Alison -Madueke said. "We are working hard to establish investors' confidence in the Greenfield refineries."
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OPEC Daily Basket Price Stood At $99.66 A Barrel Wednesday 15 May
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The price of OPEC basket of twelve crudes has once again fallen below the $100 as it finished at $99.66 on on Wednesday, compared with $100.29 the previous day, according to OPEC Secretariat calculations
The new OPEC Reference Basket of Crudes (ORB) is 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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Oxford University Hosts Diezani Alison-Madueke
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The Minister of Petroleum Resources, Diezani Alison-Madueke is to speak at Oxford University on Friday 17th May at 9am at a special lecture hosted by St Anthony's College in conjunction with the Oxford Institute for Energy Studies and the African Studies Centre at Oxford University. She will discuss the Future of African Energy in a Changing Global Market. She will also address how the development of Nigeria's gas sector will transform the global economic landscape in a rapidly changing world.
In the wake of the discovery of shale gas in the USA and China, oil producing African nations such as Nigeria are predicted to be at risk of losing 25 to 40 % of oil revenue by reduced demand and the consequential effect of lower oil prices.
The potential impact of this on the global economy and the associated risk on world security requires robust debate within the international community given the strategic position Nigeria occupies in the Gulf of Guinea. A collaborative and complementary approach in addressing Africa's oil and gas industry rather than a conflictive and competitive dialogue is imperative in enhancing global markets.
Alison-Madueke will speak on these issues leading what is expected to be a robust and lively debate.
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South Africa And Nigeria Sign MOU On Oil and Gas
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Nigeria and South Africa have signed a Memorandum of Understanding (MOU) that will see the two largest African economies co-operating over a number of sectors including oil and gas. The pact was signed during President Goodluck Jonathan's state visit to South Africa, the first by a Nigerian leader since 2009.
Speaking during the visit, Jonathan said: "If the continent of Africa must move forward, then the world will expect maximum cooperation between South Africa and Nigeria and we're just doing that."
South African President, Zuma responded, saying: "We are very pleased with the outcomes of our discussions, they do mark a higher level of cooperation between the two countries."
The Minister of Petroleum, Diezani Alison-Madueke was with President Jonathan on the trip, which saw her miss out on the opportunity to speak at the recently concluded Oil Technology Conference. She was represented at the conference by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu.
Although Alison-Madueke had initially been expected to attend OTC, her presence in South Africa was later found to be required in view of the discussions leading to the co-operation agreements.
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Requalification Programme For LPG Cylinders Not Yet Feasible
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As the Standard Organisation of Nigeria (SON) prepares to begin the enforcement of the new requalification and maintenance programme for Liquefied Petroleum Gas (LPG) cylinders, there are increasing doubts about the feasibility of the policy, which is supposedly meant to bring about standardisation and restore confidence in LPG usage.
The agency recently restated its resolve to enforce the directive, threatening to sanction LPG marketers and plant owners who fail to comply with the policy.
The new directive requires operators to ensure that imported LPG cylinders and those produced in Nigeria meet the requirements of SON's NIS 69: 2006. Cylinders that are substandard will be removed from circulation and this applies especially to cylinders over 15 years old.
However, Fatai Ogungbenle, Head, Sales and Administration, Nidogas Plc, one of the earliest LPG operators in Nigeria, believes the regulatory agency is not in a position to begin enforcing the directive as there are no concrete structures on the ground to support a successful implementation.
Mr Ogungbenle told NOGintelligence in an interview that the timing of the programme was not right for a teething industry like LPG.
"I simply don't understand what informed the decision of SON to come up with this policy. But whatever it is, I believe this is not what the industry needs at the moment. There are lots of issues that operators are still contending with in a bid to deepen the growth of the sector. So bringing this is like trying to worsen an already bad situation for an industry still at its growing stage," he said.
Mr Ogungbenle called on the government to subsidise the production of local cylinders which will bring the price down and encourage the growth of the industry and an uptake in usage.
"Government must look at a way to subsidise the base material (steel) with the intention of crashing the price of these cylinders which is currently high. The price of a 12.5 kg cylinder in Turkey is about N3, 000 while it costs N12, 000 to get the same in the Nigeria. If you consider the initial cost of getting a stove to use kerosene one would definitely understand why a lot of people are still hesitant to switch from kerosene to cooking gas despite its immense benefits," he added.
Buttressing the fact that the industry was not yet prepared for the new policy, Ogungbenle disclosed that pressure testing of cylinders, the least onerous of the integrity tests, cannot even be carried out by SON in Nigeria - it has to go Ghana to get this done.
He noted that stakeholders have been trying to bring the attention of the SON to this reality through a series of meetings with the agency, with the expectation that a compromise will eventually be reached in the overall interest of the industry.
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Total's Innovative Technique Optimises Seismic Interpretation
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Oil and gas fields operators, particularly in the offshore terrain, can now reduce the amount of uncertainty experienced in their exploration and development operations thanks to a new integrated concept which combines several types of seismic attributes.
At the Nigerian Association of Petroleum Explorationists' (NAPE) May technical meeting in Lagos recently, Dr Antoine Massala, Senior Reservoir Geologist, Egina Project, Total Exploration and Production, spoke about the new technique and how it could help companies derive better geological insight into the exploration and development of fields in a bid to maximize production and reserves.
The concept, which Massala said is an in-house innovation of Total, combines the multi-azimuthal attribute, Gradient Coherency Cube (GCC) with the GeoTime technique to considerably improve the resolution of structural and sedimentary features that are difficult to detect with conventional attributes. This he said would help to efficiently optimize seismic interpretation and well-placement processes.
He said: "It has become imperative to come up with this strategy to help reduce uncertainties in the oil and gas industry. This is because when you look at a well there is always a concern about the depth of the reservoir, as one may not know if the reservoir is exactly at the depth it was predicted to be. Besides there is an issue with the quality of the reservoir as one needs to know if the amount of sands being predicted is exactly what is in there. The third point is the thickness of the reservoir. All these constitute what I want to loosely term as 'I don't know's'. So if all these areas of concerns are put into consideration then it becomes necessary to come up with a strategy that combines seismic attributes to help determine how many 'I don't know's' that I have and how can I reduce them," he said.
He noted that the approach, which has been deployed by his company in Angola with a high success rate, is already in use at the USAN project with a prospect of producing greater results there too. He added that that all over the world geological techniques are being developed to address current realities in field developments occasioned by changes in structural features of the sediments.
"We tried the approach in Angola and it worked. In Nigeria too we have had couple of breakthroughs using the approach particularly with the USAN project," he said.
"With time we hope the USAN project will be used as reference after confirming many attempts have produced high pass rate. Perhaps this would make the message sink in better," he said.
Explaining how the Geotime technique works, Massala said seismic data is transformed into pseudo geological time domain to complement 3D data, adding that the only challenge lies in optmising well placement to produce both in the lobes and the channel complexes hence the need for the other attribute like the GCC. He said GCC provides superior imaging in detection of faults over other classical coherence attributes while also helping to identify relay zones and geological features limits.
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May Worldwide Oil and Gas Conferences
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June Worldwide Oil and Gas Conferences
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Once again, please don't don't forget to join our mailing list if you haven't done so already. Remember, you won't have to look anywhere else for your weekly Nigerian oil industry updates, and it's free to join. Do send us your news. And let us know if you want to advertise in NOGintelligence.
Sincerely,
Remi Aiyela
Editor, NOGintelligence
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