1. Visit our archive to read back issues if you have just joined so that you can catch up on all the news you've missed. 
2. Send us your press releases. Click here to contact us and also add our email address: newsdesk@nogintelligence.com to your mailing list.
3. Email newsdesk@NOGintelligence.com to let us know about your events and we'll list them free of charge!
4. Visit our website www.NOGgintelligence.com for more up to the minute news updates and special features. 
5. Advertise your company's services and reach thousands of oil and gas industry executives and professionals. Email advertise@NOGintelligence.com NOW to secure the best position in our newsletter.
6. Add our email address remi.aiyela@NOGIntelligence.com to your address book so every issue of your NOGintelligence lands in your in box and not your spam folder.
7. FORWARD this email to at least one colleague using the forward button at the top. They'll be glad you did! 

Chevron's Chosen Eleven Revealed 

We announced last week that American oil giant, Chevron has chosen its preferred bidders in the race for the acquisition of its interests in Oil Mining Leases (OMLs) 52, 53 and 55. We are still trying to confirm the names of those that have been shortlisted as preferred bidders. Initial indications are that the following qualified: Amini International, Britannia U, Eland, First E&P, Seplat, First Hydrocarbon, Network E&P, Sapetro, Seven Energy, Shoreline and Sogenal. We expect to confirm the shortlist by our next issue. 

The price of the Organization for Petroleum Exporting Countries (OPEC) basket of twelve crudes rose to $107.58 a barrel on Thursday after sliding to $106.95 the previous day, according to OPEC Secretariat calculations.

Non-OPEC oil supply on the other hand is expected to increase this year by 1 million bpd, a forecast that is supported by anticipated growth from OECD Americas and China and by 1.1 million bpd in 2014. The supply increase is expected to come from the US, Canada, Brazil, the Sudans, Kazakhstan and Australia.

Introduced on 16 June 2005, the new OPEC Reference Basket is currently 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). 

Conoil's Profits Increase as Oando's Profits Decline

The difficult challenges in the downstream operating environment seem to have left Conoil Plc  which has the reclusive billionaire, Mike Adenuga, GCON, at its helm, unscathed as the company announced that its profits have risen to N1.6 billion from N450.9 million in 2012, representing an increase of 255 per cent. The company said its turnover had risen from N76.2 billion to N79.6 billion in the corresponding half-year period. Conoil has repositioned its core business, investing substantially in its retail network including mega stations around the country.

In the statement accompanying its results, the company said it now had clarity of direction and focus and that the downstream remains fundamentally attractive to it in the short, medium and long term. "We will sustain our improved performance and realize our aspiration to become the leading petroleum products marketer and one of the most profitable quoted companies," the company said.

Oando on the other hand has not done so well as it announced a decrease in its Q2 profit. The company's profits after tax slid to N4.3 billion from N6.6 billion last year. Turnover also declined from N350.6 billion in 2012 to N280.32 billion.

The company, which is heavily leveraged was able to reduce its total debt from N236 billion in 2012 to N289 billion. The company says that as a result of its new financing structures, it has reduced its total indebtedness by 18 per cent.  

Investors do still have an appetite for the downstream powerhouse that, with the ConocoPhillips acquisitions, is about to morph into an equally strong upstream player. Its rights issue to raise funds earlier in the year was said to have been oversubscribed by 14 per cent.  

Group Chief Executive Officer, Wale Tinubu holds the Government to blame for the company's poor performance saying: "We have had to reduce our imports by over 30 per cent as a result of delays in the payment of our FGN guaranteed subsidy payments due, thus directly affecting our revenue and profit."

$450 Million Eurobond Earmarked For Gas Infrastructure

The power outlook for Nigeria appears much brighter as the Federal Government unveils huge investment plans to radically improve gas infrastructure and electricity transmission.

Following a meeting with the Ministers of Finance, Petroleum Resources and Power on how to improve the meagre level of power supply around the country, the Federal Government has announced the allocation of $450 million (N70.2 billion) for the improvement of gas infrastructure. The Minister of Power, Professor Chinedu Nebo, made this known when he was visited at the Ministry by a team from the Independent Power Producers Association of Nigeria.

Professor Nebo said the Government was doing what it could to address the gas issue, stressing that Nigeria has enough gas but that there were things to put in place, including the right pricing for domestic gas.

"Government is also trying to address gas infrastructure challenges. The first segment is the East-West axis. Government is putting in billions of naira to address that. The next is the South-North, South-South and the North axis. So, there is a gas master plan and soon, the issue of gas will be settled," he added.

The plan is also to improve the electricity infrastructure. To this end, funding has been secured from different sources, including $800 from the World Bank, $170m from the French Development Bank, and another $500m has been secured from the Chinese EXIM Bank. These will all been spent on the improvement of the electricity transmission infrastructure.

"There is a huge investment going on for transmission. We hope with these, we will be able to produce the 10,000MW and at the same time wheel it out for full distribution," Professor Nebo explained. 

The Nigerian Nuclear Regulatory Authority (NNRA) has revealed that over 80 per cent of radioactive material imported into Nigeria is used in the oil and gas sector. The revelation was made by a number of speakers at the technical meeting on regulating nuclear applications in the oil and gas sector, which was organised by the NNRA in Abuja recently, including the Acting Director-General/Chief Executive Officer, Nigerian Nuclear Regulation Authority (NNRA), Mr. Martin Ogharandukun. The figure is down from 90 per cent for the period from 2000 to 2011 in which oil companies were reported to have abandoned 26 radioactive sources in the Niger Delta region.

Dr. Emmanuel Egbogah, a former Presidential Adviser on Petroleum Matters, who also spoke at the event, urged the industry to devise safe means for the utilisation of radioactive material in their operations. He revealed that 633 authorisations were issued by NNRA in 2012, of which 500 were for oil and gas operations, representing 78 per cent of applications.

Dr. Egbogah, who is currently chairman of exploration and the production company, Emerald Energy Resources and also former alternate chairman of the Nigeria Nuclear Regulatory Authority (NNRA), said: "Presently, over 80 per cent of all radioactive sources imported into the country are used in the oil and gas sector for nuclear well-logging, industrial radiography, nuclear gauging and radio-tracing amongst others."

Dr. Egbogah also revealed that in the past there had been incidents involving loss of control, illegal transfer and transportation, hijacking of vehicles carrying radioactive cargo, and mis-declaration of radioactive sources. He stressed the need for the implementation of programmes for physical security, radiation protection and emergency response given the itinerant nature of sources used in these operations.

The keynote speaker at the event was the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who urged operators in the oil and gas sector to uphold regulations set by the NNRA. She said this would ensure an effective monitoring of nuclear applications in the sector in which some companies had close to 200 radioactive materials.

The oversight functions of the NNRA, which was established in 2001, include registration, licensing, inspection, and enforcement of compliance.

The main legislation governing the use of nuclear materials is the Nuclear Safety and Radiation Protection Act in 1995. In addition, oil and gas operators have to comply with regulations, which include the Nigerian Basic Ionising Radiation Regulations of 2003, Nigerian Safety and Security of Radioactive Sources Regulations, Nigerian Transportation of Radioactive Sources Regulations and Nigeria Radiation Safety in Industrial Radiography Regulations, Nigeria Radioactive Waste Management Regulations, Nigerian Radiation Safety in Nuclear Well Logging Regulations and Nigerian Naturally Occurring Radioactive Materials Regulations.

OPTS Clarifies Oil Theft and Illegal Bunkering Stats  

Global Rights, a non-governmental association, recently held a roundtable workshop on the incorporation of Voluntary Principles designed to guide companies in maintaining safety and security of their operations within an operating framework that encourages respect for human rights. 

Ayobami Olubiyi, spoke on behalf of the OPTS the Oil Producers Trade Section (OPTS), an advocacy group, which includes 18 indigenous and foreign operators in the Nigerian petroleum industry

Whilst speaking, Olubiyi also took the opportunity to clarify oil theft statistics. The figure that is usually given for oil theft in Nigeria is somewhere between 400,000 barrels and 450,000 per day (bpd) depending on who you ask. However, that is not quite correct according to the OPTS.

Olubiyi said the global figure of 400,000 does not make the correct distinction between the amount stolen for the illegal distillation of crude oil, popularly known as bunkering, and the amount lost due to production shut-ins. "It is important that we clarify the actual figures being put out as crude oil stolen in the country," he said.

Olubiyi explained that there was a difference between what is lost to theft and what is lost from production shut-ins due to pipeline sabotage. "The figure as at today is that 49,000bpd is lost to theft while about 350,000bpd is shut-in, that means production from a particular sabotaged line is stopped and the companies declare a force majeure; this figure is specific to the IOCs except for the NPDC," he explained.

Olubiyi also said that the figures are usually quoted on losses at a particular point in time, so for example, the figures obtained for June show pure theft losses of 25,000 bpd.

Country Director of Global Rights, Abiodun Baiyewu, explained that the Voluntary Principles are a useful tool for the extractive industry, which can contribute to the protection of human rights and the prevention of conflict. She said that Shell, Chevron and Total have already signed up to the Principles.  

Task Force Makes Significant Gains in Oil Theft War 

In the first operation the Nigerian Navy recovered the oil barge, MT Crow, which had been hijacked at gunpoint by an armed group of 4 in the Escravos area. The Navy detained them, and rescued the crew. In a twist to the story, the gang later claimed that the guns were not in fact loaded with bullets and two of the guns were even broken. However, they were also armed with machetes. The vessel was carrying 200 metric tonnes of diesel.

In another operation, the Navy was subjected to a vicious gun battle, which saw 17 of a 20-man gang killed. The vessels were hijacked in the Igobokoda area of Ondo State and pursued to Aiyetoro where 126 jerry cans of petrol and the boats were recovered. The report by the Navy did not reveal what had happened to the crew of the vessels that were hijacked but it is not thought that they were harmed.

In yet another successful operation, pipeline vandals who were caught siphoning petroleum products from a pipeline in the Majidun area of Ikorodu were detained after a surveillance operation by Naval operatives. Again, the vandals were armed and engaged the Naval officers in a shootout following which they were overpowered.

The regularity of the successes is encouraging, however commentators say the problem is so huge that the JTF may never be able to bring it under control. Only last week, the General Officer Commanding (GOC) 82 Division of the Nigerian Army, Enugu, Major-General Adebayo Olaniyi said a lack of effective assault craft is hampering the fight against oil theft.

Advocacy Group Supports LADOL for Egina FPSO Project

Amidst widespread allegations that the Lagos Deep Offshore Logistics (LADOL) comopany lacks the requisite capacity to execute the construction of a Floating, Production, Storage and Offloading vessel for Total's $15bn Egina deepwater field off Nigeria, a Non Governmental Organisation (NGO), the Nigerian Content Advocacy Group has thrown its weight behind the company

The Egina project entails 44 wells being connected to a 330-metre long FPSO, which can store 2.3 million barrels of oil.

Samsung Heavy Industries who won the contract to build the FPSO proposes to use LADOL facility for the fabrication of the vessel. This is expected to use  locally worked hours of about 75 per cent.

The group's Executive Director, Mr. Bolaji Akinola, said LADOL had the technical capacity to execute the project. He said, "After due diligence and consultations, we can categorically state that LADOL's qualification to host this epoch-making project is not in doubt. Technically and commercially, LADOL has been assessed by all the oil majors and received business from most of them. "

According to him, there is an ongoing expansion of the facility at LADOL and this includes an FPSO integration facility.

Akinola, who is also the Chief Executive Officer, Ships & Ports, described LADOL "as a $500m company and far from a Greenfield site."

He said, "LADOL is already the largest rig repair facility in Nigeria through which it has created over 1,000 jobs, even as a 100 per cent indigenous entity.

"For the first time, a complete overhaul of shallow water rigs is now being done in Nigeria at LADOL. These savings in foreign exchange are already in hundreds of millions of dollars to the credit of the nation's economy."

Akinola explained that LADOL won the bid for the Egina oilfield project after three years of submissions, technical analyses and detailed appraisals. One of the major factors that favoured LADOL, according to him, is that the facility has the space to berth a vessel of the size of an FPSO.

He said, "Nigeria's current total fabrication capacity is not sufficient to achieve the tonnage required for Egina. We know that LADOL has concluded plans to enlarge its existing facility in Lagos for this purpose. A joint LADOL/Samsung construction team has been at work on expanding the facility since 2012."

Shell Nigeria Exploration and Production Company (SNEPCo) as operator of the Bonga Southwest/Aparo (BSW/A) unit area (straddling NNPC OMLs 118/132/140 block boundaries), invites interested and registered Nigerian companies to respond to the opportunity for the procurement of line pipes for the BSW/A field development project.  

The scope of service covers the procurement, delivery, storage and preservation of line pipes. Only tenderers who are registered with NJQS product/category for seamless pipes and tubes and/or welded pipes and tubes, product groups 20101 and 20102 category shall be invited to submit technical bids.  The closing date for this opportunity is 29th August 2013.

Shell Nigeria Exploration and Production Company (SNEPCo) invites interested and registered Nigerian companies to respond to the opportunity for the provision of facilities instrumentation, control & automation intervention works in SPDC East locations (land & swamp).  

The scope of service covers the provision of Design verification, Workshop calibration of instruments, Stroking/function, testing of valves, Yard fabrication, Site mobilization etc. Only tenderers who are registered with NJQS in the 3.05.02 (Electrical/Instrumentation Services) category shall be invited to submit technical bids.  The closing date for this opportunity is 2nd September 2013.

Chevron Nigeria limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of Ago Marine Tanker Vessel Delivery Service to support the supply of its oil field operations at Escravos.  

The scope of service covers the provision of logistic support services for the delivery of AGO to CNL Escravos. Only tenderers who are registered with NJQS in the 3.08.99 supply of other transportation/ supply and disposal services shall be invited to submit technical bids.  The closing date for this opportunity is 4th September 2013.

Shell Nigeria Exploration and Production Company (SNEPCo) invites interested and registered Nigerian companies to respond to the opportunity for the provision of ocean bottom node 4D seismic data acquisition services for SNEPCO Bonga main FPSO area. The proposed contract will commence in the fourth quarter of 2013. The scope of service covers the provision of ocean bottom node 4D seismic data acquisition services over SNEPCO Bonga main FPSO area (undershooting the FPSO area).  

Only tenderers who are registered with NJQS2D/3D/4D Seismic Data Acquisition Services (Product Code 3.10.01) category shall be invited to submit technical bids. The closing date for this opportunity is 9th September 2013.

Chevron Nigeria limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of rope access services for its work within the tank terminal and in the fields offshore Escravos, swamp location. The scope of service covers the provision of access support services for flow-line/riser and pipework repair non-destructive testing (NDT).  

Only tenderers who are registered with NJQS product/category 3.05.16 (rope access services) shall be invited to submit technical bids. The closing date for this opportunity is 13th September 2013.

The forthcoming 2nd International Conference on Petroleum Refining & Petrochemicals organised by the University of Port Harcourt (UNIPORT) in collaboration with Indorama Eleme Petrochemicals Limited (IEPL) is gradually turning into a must to attend as notable industry practitioners have indicated their interest in participating.

The event, already endorsed by Mrs Diezani Alison-Madueke, Minister of Petroleum Resources is holding at Hotel Presidential, Port Harcourt, on 28th and 29th August, 2013. The theme of the conference is "Creating Wealth Through Diversification, Transformation and Development of our Refineries and Petrochemical Industries".

Former Minister of State for Petroleum Resources, Mr. H. Odein Ajumogobia will be a special guest. Former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. T.M. John is a keynote speaker. He will address the theme of the conference. 

A statement issued by Prof. Godwin Igwe, Executive Conference Chairman, and Director of the Centre for Gas, Refining and Petrochemicals of UNIPORT, said that one of the lead paper presenters will be Engr. N. John Erinne, immediate past President of the Nigerian Society of Chemical Engineers. He will tackle the area of "Realizing Nigeria's Petrochemicals Potentials".

 Dr. Oluwole Oluleye, the Executive Secretary of Petroleum Technology Development Fund (PTDF) has also accepted to be a special guest and would also deliver a goodwill message. Minister of Science & Technology, Professor Ita Bassey-Ewa has also accepted to attend the conference. Some other top experts are also attending the conference from US and South Africa.

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