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Report Shows High Hydrocarbon Content in Bida Basin

Niger State has announced the preliminary findings of the committee set up by the State Government to fast-track exploration for hydrocarbons in the State. The Secretary of the Committee, Mr Yabagi Sani said that the samples obtained from the Bida Basin show a higher hydrocarbon content than hydrocarbon deposits in the Niger Delta.

Mr Sani said that the analysis of the source rock, after the drilling of two shallow wells in Agaie and Kudu in the State, revealed that there is a 30 per cent presence of oil and 70 per cent presence of gas deposits while in the Niger Delta the ratio is 25 per cent oil and 75 per cent gas. The geo-chemistry analysis of the Toxic Content (TOC) showed that the deposit of hydrocarbon in the basin is above 0.5 per cent, an indication that the deposit is of high quality. The committee now intends to use Full Tensor Gradiometry technology to acquire more data on the area of the deposits.

American companies, Midland Refinery and Petro Chemical Company and Midland Petro-gas Resources Limited will be working on the fast-track project to develop the State's oil and gas resources. The intention is to combine the State's efforts with those of other States in the Sokoto, Borno, Bauchi and Benue Basin to form an inland hydrocarbon basins exploration association in the North.

The price of OPEC basket of twelve crudes continued to fall from $106.40 this time last week to $105.28 a barrel on Thursday. Last week saw the OPEC basket price at its highest in four months, amid concerns about the possible disruption of supply due to political tensions in the Egypt.

The European Union could soon put a stop to the sale of illegally obtained oil in the European market. At a recent meeting of members of the African, Caribbean and Pacific parliaments and their European Union counterparts, known as (ACP-EU) in Abuja, it was decided to adopt a new measure requiring that oil to be sold in the European market be accompanied by a certificate of origin. Provided the appropriate administrative measures are put in place at the local level, this could see a large market for Nigeria's stolen crude effectively stifled. The measure was largely adopted to address the epidemic levels of crude oil theft in Nigeria.

Mitchell Rivasi (Acting Co- President ACP- EU) explained: "We want to ban European refineries from buying un-certificated oil. 400, 000 barrels a day is a huge loss. We need to get traceability of oil to avoid theft. The oil companies are involved in this and everybody is making big money. The bunkering tankers are better equipped than the Nigerian Navy. This is a huge international organised crime. We did it with diamond; we can also do it with oil."

The communiqué issued following the meeting stressed the need for Nigeria to ensure that revenues generated from the extractive industry are distributed transparently and equitably through the national budget in order to contribute to sustainable development and poverty reduction.

Meanwhile, the British Minister for International Security Strategy, Dr. Andrew Murrison, has pledged the assistance of the United Kingdom in Nigeria's fight against crude oil theft. He said this during a visit to the Minister of State for Defence, Mrs. Olusola Obada, in Abuja.

Murrison said, "The UK is concerned and is ready to assist Nigeria to secure its territorial integrity. The things that affect your security also affect our security."

There has been no confirmation of how and when the certification process will be implemented in Nigeria. Commentators have called for a robust and fraud-proof process if the certification is to help in the effort to stem crude theft. According to the Federal Government, about 400,000 barrels of oil, an equivalent of N7.3million, is lost daily to oil thieves.  

Petroleum Minister Reveals Aggressive Infrastructure Expansion

Whilst the vandalism of oil and gas installations continues to be a major obstacle to Nigeria's ability to meet domestic energy needs, the outlook for the industry remains positive in view of recent Federal Government funding particularly in the area of infrastructure expansion.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke stated this as she listed the achievements of the Ministry at the 2013 Ministerial Platform in Abuja on Tuesday.  According to her, previous weeks have seen the energy sector suffering setbacks as critical infrastructure, like oil and gas pipelines, are destroyed by vandals. The trend has been responsible for fatalities, loss of revenue, environmental degradation and production deferment. The Minister said: "Every Nigerian has to be involved in fighting the scourge of crude oil theft."

In spite of the constraints, the Minister said, crude oil production had consistently maintained above an average of 2.3 million barrels per day.

The Minister however wished to highlight the Federal Government's spending on infrastructure, which she called "the most aggressive Nigeria has seen in decades." She said that the country was transforming into a gas nation based on its huge gas reserves, which currently surpasses its crude oil store.

She said, "Nigeria, with gas reserves of 182Tcf (trillion cubic feet) as at the end of 2012, compared with total crude oil reserves of 36.8 billion barrels for the same period, is more of a gas country than a crude oil country."

Alison-Madueke highlighted the gains of the gas revolution which includes the boost in gas to power supply for electricity generation, establishment of a commercial framework for gas and the development of gas infrastructure across the country.

She added that the global shift to the use of gas as a cleaner energy source made the emphasis on gas development imperative for sustainable long-term economic development in Nigeria.

In terms of gas infrastructure spending, Alison-Madueke explained that gas infrastructure development across the country was aimed at getting gas to industries.

She said Abuja and the northern part of the country would be linked with gas pipelines for rapid industrialisation by 2015. She listed some of the completed and ongoing gas infrastructure projects to include Escravos-Oben Pipeline, expansion of Oben-Lagos Pipeline, Calabar-Ajaokuta and Ajaokuta-Kano Pipeline Systems, among others.

The briefing revealed that $600 million has been deployed from the Eurobond for the building of gas infrastructure while the contract for the East-West Gas pipeline has been awarded. In addition to this, the Gas Plant City project is making progress as Mrs. Alison-Madueke disclosed that site clearing for the project in Delta state is already underway.

The investment in infrastructure is expected to increase gas supply to an extent that can support 5000 mega watts of electricity generation by the year-end. The Minister said new electricity power plants coming on board are assured of gas supply.

On achievements in the mid-stream and downstream sectors, Alison-Madueke said that the Turn Around Maintenance (TAM) of the Port-Harcourt refinery would be completed in the fourth quarter of 2013. She said work on the Kaduna and Warri refineries was expected to be concluded by the fourth quarter of 2014.

 Legal Task Force to Fast Track 500 Oil Theft Prosecutions  

As a show of its determination to fight crude oil theft and stem the loss of a reported 400,000 barrels of oil per day, the Federal Government has announced a 21-year jail term for anyone duly prosecuted and found guilty of crude oil theft.  

The Governor of Delta State, Emmanuel Uduaghan, revealed that a Legal Task Force (LTF) is to be established to fast-track the prosecution of some outstanding 500 cases of oil theft using the Miscellaneous Offences Act which carries a mandatory 21-year sentence without the option of a fine.  

The National Economic Council approved the establishment of the LTF, which will be headed by the Minister of Justice and Attorney General of the Federation, Mohammed Adoke while representatives of the Nigerian National Petroleum Corporation (NNPC), Nigerian Security and Civil Defence Corps (NSCDC), Nigeria Police, State Security Service (SSS) and other related agencies will also be members of the task force. The other members of the task force are to be announced soon by the Attorney General's office.

British Police Probe Malabu/Shell/ENI Deal   

The investigation into the Malabu deal has taken on a new dimension with news that the British police are now investigating the deal. This comes hot on the heels the decision of the

The British police are looking into allegations of money laundering in connection with the transaction in which offshore block, OPL 245 was sold to Shell Nigeria Exploration and Production Company and Nigeria Agip Exploration and Production Limited by Malabu Oil and Gas via the Federal Government.  

The licence for the oil block, which is said to hold 9.2 billion barrels of crude oil reserves, was awarded to Malabu Oil and Gas for a $2 million fee in 1998 by Dan Etete when he was Petroleum Minister but was later revoked under a subsequent administration.  

While Etete says that he is only a consultant to Malabu and has no interest in the company, the judge in a lawsuit by Emeka Obi against Malabu for unpaid fees after he brought Shell and ENI to Malabu, concluded in her ruling that Etete had a substantial beneficial interest in Malabu from the time of its incorporation and at all material times.

In view of the judicial finding of the former Petroleum Minister, Etete's interest in Malabu, the British Police Proceeds of Crime Unit are looking into the deal in which Shell/ENI paid the Nigerian government $1.3 billion for the block, following which the government paid Malabu $1.09 billion, to see if any money laundering laws have been broken in the transaction, supposedly brokered by the Nigerian government. Anti-corruption campaign group Global Witness, said it had asked the UK to look investigate the activities of the companies and individuals involved in the procurement of OPL 245.   

Etete has previously been convicted by a French court of money laundering in relation to payments he received during his time as Petroleum Minister.

More details on the background to the Malabu transaction can be seen in Issue 61 of NOGintelligence newsletter. 

Senate Concludes PIB Public Hearing  

The Senate has concluded its public hearing on the Petroleum Industry Bill (PIB), now paving the way for the findings to be considered in committees and it is hoped, for the Bill to be passed early next year.

The public hearings featured many industry stakeholders including the Nigeria Extractive Industries Transparency Initiative (NEITI), which has called on the National Assembly to use the opportunity of the PIB to ensure uniformity in addressing the problems of all communities located in mineral producing areas including petroleum.

Speaking on the issue of the Petroleum Communities Host Fund, the Chairman of NEITI, Ledum Mitee called for clarity in the mode of administration of the fund. He said the Petroleum Host Communities Fund should function according to the same or similar mode that is provided for under the existing Minerals and Mining Act under which the communities directly receive the fund.  

He said: "NEITI however believes that the preferred option is for the communities to be directly impacted by the funds through a process which pertains in the minerals sector in Nigeria, whereby the communities enter into an agreement with licensee or lease-holder, as the case may be, and agree as to terms and conditions regarding the fund".

NEITI is also advocating an amendment of Section 2 of the PIB, which vests ownership of and property in petroleum in Nigeria in the Government of the Federation. Mr Mitee said the section should be changed "to recognise other tiers of government such as states and local governments as well as Nigerian citizens as co-stakeholders."  

NEITI's position is that section 2 should state that ownership of and property in petroleum "shall vest in the sovereign state of Nigeria in trust for and on behalf of the People of Nigeria". Mitee explained that the additional wording will enable the section conform with the provisions of Nigerian's constitution, arguing that it would give Nigerian citizens a true sense of belonging whilst serving as a reminder to government "that it is accountable to the people for the utilization of the revenues derivable from the petroleum resources."

Mr Mitee also called for the creation of strong independent regulatory institutions and said that a deliberate effort should be made under the legislation to limit the powers of the Minister to policy formulation monitoring and oversight of the industry.    

Chevron Sponsors Deepwater Technology Training for Graduates  

Chevron Nigeria Limited (CNL) has sponsored five Nigerian graduates to be trained in the operation of remote operated vehicle, known as underwater robot. This kind of technology is used for deepwater operations. The five graduates who were nominated by the Nigerian Content Development and Monitoring Board under the Nigerian Content Human Capacity Development Initiative will undergo the training in Scotland.

The training, which will last for between 7 and 13 weeks is part of the company's initiatives to help Nigeria acquire the manpower for deepwater activities in the industry according to Chevron's General Manager, Policy, Government & Public Affairs, Mr. Deji Haastrup.

The company says it has implemented strategies for training, capacity-building and employment of Nigerians and provided contracts and procurement opportunities to help create local jobs and technology transfer through local patronage, work scope reservation, fostering of business partnerships and domiciliation of work.

Activist Group Launches "Publish What You Pump Campaign"

The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) has launched a new campaign titled called "Publish What You Pump."

In his presentation, ERA/FoEN Executive Director, Godwin Ojo said that today marks an important milestone in the launch of a national and global advocacy initiative which will address the lack of transparency and accountability in the oil and gas sector thereby posing grave threat to national security and sustainable development.  

The Group said in its statement that the core issue affecting the oil and gas industry is the failure and or refusal of operators in the industry and regulatory bodies to publicly disclose or engage easily available scientific templates for the precise measurement of the volume of all oil and gas produced in Nigeria, and at the different stages of the production process. The current practice of solely relying on the oil sector for crude oil production figure, they say, is clearly unacceptable.

The group would like the Department of Petroleum Resources (DPR) to set up appropriate guidelines for measuring oil and gas production as well as have the necessary tools to carry out their oversight functions as part of the initiative.

According to the Group, "the initiative marks a significant threshold in aggregating voices and actions of civil society groups, local communities, the media and all Nigerians towards achieving the critical mass required to effect fundamental changes in the way the Nigerian oil industry has been run in the last five decades."

The Shell Petroleum Development Company of Nigeria Limited (SPDC) invites interested and registered Nigerian companies to respond to the opportunity for the provision of Construction All Risks (CAR) Insurance coverage for the Gbaran Ubie Phase II Project. The scope of service covers physical loss and, or damage to the project property, including third party liability risks, ocean marine and inland transit risks during construction. Only tenderers who are registered with 31432 Non-Life Insurance Product/Services Category shall be invited to submit technical bids. The closing date for this opportunity is 16th August 2013.

Total Upstream Nigeria Limited (TUPNI) invites interested and registered Nigerian companies to respond to the opportunity for the provision of Offshore Inspection Maintenance and Repair (OIMR) Vessel Services. The scope of service covers the provision of an OIMR Vessel with two (2) work class remotely operated vehicles (ROV) spread and associated personnel to perform a variety of OIMR activities. Only tenderers who are registered with NJQS Product/Category 3.08.01 - Tugs/ROV Support/Diving Support Vessel shall be invited to submit technical bids. The closing date for this opportunity is 16th August 2013.  

Provision of 2014 Dollar Operational Insurance and Third Party Liability Policies

Provision of 2014 Dollar Operational Insurance/TPL

Agip Energy and Natural Resources (Nigeria) Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of operational insurance cover for its properties and third party liabilities. The scope of service covers the provision of operational insurance and general third party liability insurance policies. Only tenderers registered with NJQS in the non-life insurance service category (3.14.32) product category shall be invited to submit technical bids. The closing date for this opportunity is 7th August 2013.

Provision of 2014 Nigeria Naira Policies

Agip Energy and Natural Resources (Nigeria) Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of 2014 Nigerian naira policies. The scope of services covers the provision of personal accident, group life assurance, motor vehicle, computer transit and marine. Only tenderers registered with NJQS in the life insurance service 3.14.30 and/or 3.14.32 (non-life insurance services) product service category shall be invited to submit technical bids. The closing date for this opportunity is 7th August 2013.

Agip Energy and Natural Resources (Nigeria) Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of 2014 Nigeria naira insurance policies. The scope of service covers the provision of group personal accident, group life assurance, motor vehicle, fidelity guarantee and transit all risk policy. Only tenderers who are registered with NJQS in the life insurance service category (3.14.32) and /or non-life insurance services (3.14.32) product category shall be invited to submit technical bids. The closing date for this opportunity is 8th August 2013.

Provision of 2013/2014 Operational Insurance Policy

Agip Energy and Natural Resources (Nigeria) Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of 2013/2014 operational insurance cover for its properties and third party liabilities. The scope of service covers the provision of operational insurance and general third party liability insurance policies. Only tenderers who are registered with NJQS in the non-life insurance services category 3.1432 product category shall be invited to submit technical bids. The closing date for this opportunity is 8th August 2013.

Addax Petroleum Development (Nigeria) Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of field operation safety case and major hazard assessment & risk register. The contract is proposed to commence in 2013.This scope of services covers the development of safety case and major hazard assessment & risk register for OML 123 field operations. Only tenderers who are registered with NJQS product group3.02.02 Safety, Health and Environment Consultancy shall be invited to submit technical bids. . The closing date for this opportunity is 5th August 2013.

Mobil Producing Nigeria Unlimited, an ExxonMobil subsidiary and operator of the NNPC/MPN Joint Venture is plans to engage contractors for 3D/4D Seismic Data Processing Services over parts of its fields within the NNPC/MPN Joint Venture (JV) acreage for an anticipated term  of two years with a one year optional renewal. The contract is expected to start by the third quarter of 2013.  The scope of work includes but is not limited to the provision of 3D/4D, 1C-4C Seismic Data Processing in Time and/or Depth, using associated seismic processing software tools and highly qualified specialist personnel.  Only tenderers who are registered with the relevant 2D/3D/4D Seismic Data Group 3.10.02 NJQS Product/Category shall be invited to submit technical bids. The closing date for this opportunity is 29th July 2013.

The Centre for Petroleum Information partnered with CBO Capital to hold its 13th annual Petroleum Policy Round-table, with the theme, "Sustaining Nigeria's Competitiveness in Global Oil and Gas."

The Group Executive Director, Refining and Petrochemicals, Nigerian National Petroleum Company (NNPC), Mr. Anthony Ogbuigwe, who spoke about the hurdles facing the turnaround of Nigeria's refineries revealed some dismal statistics about the nation's refineries.

Nigeria's 4 refineries (Port Harcourt, Warri and Kaduna) had an annual capacity utilisation of between 18-21 per cent in the last 7 years with the Port-Harcourt refineries producing 210,000 barrels per day (bpd), Warri 125,000 bpd, and Kaduna 110,000 bpd. Ogbuigwe confirmed that on a per capita basis, the country is under refined especially when compared with other African countries, such as: Algeria: 1.37, Egypt: 0.96, Libya: 6.17, South Africa: 1.1, while Nigeria is bottom at 0.13.

He however said that the Turn Around Maintenance (TAM) for the refineries had begun and the capacity utilisation would rise to 60 per cent this year and 90 per cent after the rehabilitation of the refineries.

Other statistics disclosed by Ogbuigwe revealed the devastating impact of vandalism on the nation's pipelines. He said that 40 per cent of crude oil is lost on the Warri-Kaduna pipeline and 24 per cent on the Bonny-Port Harcourt pipeline adding up to about 11.7 million barrels of crude oil lost in the last 3 years with the biggest losses in 2011 when 6.39 million barrels were lost. Of that figure, the Escravos/Chevron pipeline lost 4.21 million barrels; Bonny/Port Harcourt 1.38 million barrels; Warri/Kaduna, .64; and SPDC, Warri, 153,879 barrels. 40 per cent of the losses in 2012 came from the 60-kilometre Escravos/Warri pipeline.

Ogbuigwe said the problem was continuing to affect the operations of the refineries. He said Port Harcourt and Kaduna refineries shut down in the last week of May 2013 due to non-availability of crude supplies. Kaduna had managed to restart in June but Port Harcourt is yet to receive supplies due to the closure of the Trans-Niger Trunk line by SPDC as a result of persistent vandalism.

Ogbuigwe said: "As a nation, that should not continue. It leads to us being unable to run the refineries.'' However, he said, the picture was looking up as the average annual capacity rose from 21 per cent in 2010 to 29 per cent in 2012 and so far in 2013, 32 per cent.

In an unrelated briefing in Abuja, the Minister of Petroleum, Mrs Diezani Alison-Madueke confirmed that the TAM Port Harcourt is expected to be completed by the end of the year.

JULY EVENTS 

Lagos, Nigeria

30 July - 1 August

www.spenigeria.spe.org  

AUGUST EVENTS 

International Conference on Petroleum Refining and Petrochemicals

Port Harcourt, Nigeria

28th - 29th August 2013

goddy.igwe@ipsng.org;  

goddy.igwe@uniport.edu.ng;  

goddyigwe@aol.com

Offshore Patrol Vessels (OPV) Africa

Lagos, Nigeria

27th - 29th August 2013

www.offshorepatrolvesselsafrica.com

SEPTEMBER EVENTS 

Oil and Gas Conference & Exhibition

Aberdeen, United Kingdom

3 - 6 September

 www.offshore-europe.co.uk