The American giant is selling its stake in a number of assets in a move to divest its onshore and shallow offshore assets. Up for sale in this first tranche are oil mining leases (OMLs) 52, 53 and 55.

Sources close to the deal had confirmed to NOGintelligence that Britannia-U was the highest bidder after reportedly putting in a bid of $1.6 billion for all three assets. Although the company issued a statement at the height of the feverish speculation, they failed to confirm or deny the report.

NOGintelligence had previously gathered that Chevron wished to sell the assets as one lot and that would be important in selecting the winner. NOGintelligence sources also revealed that among the most crucial criteria would be the ability to close the deal. What is clear is that lessons will have been learnt from the ConocoPhillips divestment, given the time it has taken Oando's to raise the $1.8 billion it bid to win the sale, although Oando continues to maintain that it is able to close the deal. Chevron will be cautious about accepting such a high offer unless it receives cogent evidence of the highest bidder's ability to raise the finance in a timely manner.   

Information revealed to NOGintelligence by sources connected to the deal indicates that whilst Britannia-U is the highest bidder for all three assets in one lot, Seplat was the highest bidder for OML 53, Amni for OML 52 and Belema Oil for OML 55 and the three seem prepared to co-operate with one another in this acquisition. When the three bids are added up they provide Chevron with the next highest bid to Britannia-U's.  

The three companies will be waiting with bated breath to see if Britannia-U is able to pull it off as it now appears that if Britannia-U fails in its quest to take all three assets, Seplat, Amni and Belema will be next in line for the prize gas-rich assets.

Back to top 

A wholly owned subsidiary of London Stock Exchange FTSE 250-listed Heritage Oil Plc, an independent upstream exploration and production company has entered into a joint venture agreement with Bayelsa Oil Company Limited, owned by the Bayelsa State government. Together they will establish an indigenous Nigerian oil company called Petrobay Energy Limited in which Heritage will have a 45% equity stake. A number of upstream assets in the State of Bayelsa and the larger Niger Delta region have already been identified and Petrobay will engage in both bilateral and competitive auction processes to acquire these licences.

Heritage has been in Nigeria since November 2012 when it acquired an interest in OML 30 through Shoreline Natural Resources Limited, whose ownership interests are held by Heritage Oil SNR, a wholly owned subsidiary of Heritage and a local Nigerian partner, Shoreline Power Company. Shoreline Natural Resources acquired a 45 per cent stake in onshore OML 30 for a cash consideration of $850 million while the National Petroleum Development Company holds the remaining 55% interest.  

Gross proved and probable reserves of over 1.1 billion barrels makes OML 30 one of the blocks with largest onshore oil reserves in the country. Gross production from its eight fields is back to over 35,000 barrels per day after dipping to 20,350 bpd earlier in the year following a cut back in production due to repairs to a faulty manifold exacerbated by labour issues.  

Commenting on the strategic alliance, Tony Buckingham, Chief Executive Officer of Heritage said: "Petrobay will be uniquely positioned to acquire and develop hydrocarbon assets in the Niger Delta, where we can bring exploration and production expertise that, harnessed with the energy and aspirations of the people and State of Bayelsa, will generate value and benefits for all stakeholders. This alliance reinforces Heritage's commitment to a country with huge potential and the Company is well placed to play a significant role in the future oil and gas industry in Nigeria."

Governor of Bayelsa State, Henry Seriake Dickson also commented, saying: "Today, that era of standing by and non-participation has ended. What we have signed is going to blossom and move from strength to strength and be strong enough to compete favourably with other competitors in the upstream and downstream sectors of the industry."

The new strategic partnership should enable Heritage, which also has producing assets in Russia and exploration assets in Tanzania, Malta, Papua New Guinea, Pakistan and Libya, to substantially increase its footprint in Nigeria.

Back to top 

The acquisition will enable Oando to substantially increase its production footprint. Following the deal, the OER expects to go from its current daily production of 4,500 bpd to 45,000 bpd. This will make it one of the largest indigenous producers.  

OER says it expects the acquisition to pave the way for other indigenous companies to position themselves as global players, thus providing unprecedented opportunities for local and international investors to invest in Nigeria.

Mart Resources and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator) and SunTrust Oil Company Limited have provided an operations and production update which indicates an average field production at the formerly Elf-owned Umusadege field of between 10,735 barrels of oil per day (bpd) 12,638 bpd during October 2013.

Umusadege field downtime during that period was approximately 4.5 days due mainly to maintenance and repairs on the export pipeline performed by the pipeline operator, Nigerian Agip Oil Company Limited.

The company said the Umusadege field net deliveries into the export pipeline were approximately 325,700 barrels of oil in October 2013 before pipeline losses. Pipeline and export facility losses reported by NAOC and allocated to Mart and its co-venturers for September 2013 were 74,103 bbls, or 28.4% of total crude oil deliveries into the export pipeline. October 2013 pipeline and export facility losses have not yet been reported by NAOC. Pipeline and export facility losses have averaged 24.1% for the first nine months of 2013.

A portion of the increase in the pipeline losses during 2013 is a result of application of a new formula for calculation of the pipeline losses. The new formula was imposed by NAOC in the crude handling agreement entered into in 2013. The formula has an effect on the overall calculation and allocation of pipeline losses, and the members of the cluster are in ongoing discussions with NAOC to contest the formula and are considering all options available.

Meanwhile completion of the UMU-11 well is proceeding after drilling reached its total depth of 8,910 feet on September 27, 2013. The open hole logging and completions operations have been concluded, perforating three oil-bearing sands. The sands selected for completion were the IX, XIIb, and XIIIb sands, with combined gross oil pay of 84 feet. The dual string completion has been installed, which will allow flow of two zones simultaneously through the 3 1/2 inch and 2 7/8 inch tubing strings.  

Individual production testing of all three sands will begin this week, and test results will be disclosed as soon as they are available.

The Chairman and CEO of Mart, Wade Cherwayko, will be speak at the Oil Council World Assembly in London on November 18-20, 2013.  

The inevitability and desirability of stimulating reserves growth formed part of major discussions among participants at a recent conference organized by the Nigerian Association of Petroleum Explorationists' (NAPE) in Lagos.

The participants including oil and gas industry players, bankers and other key stakeholders had gathered to deliberate on how to boost reserves through exploration of the country's maturing basins.

At the pre-conference seminar with the theme: "Marginal Field Experiment and the Growth of Independents," the speakers commended the Government for the initiative that has produced big players called independents among the indigenous oil companies.

They agreed that though the project may be said not to have fulfilled its full potential yet, the fact that a lot of positive lessons have been learnt from this experiment speaks volume for what the future holds.

Chairman of Afren Plc, Egbert Imomoh said a sustainable development programme by operators is all that is required to grow the reserves particularly with respect to production from the maturing basins.

He noted that the Ebok field, of which the company is Operator, is a case in study as to what a sustainable development programme can do to enhance a successful oil operation. He said the company's internship programme made it possible to boost capabilities and capacities of the workforce that got the Ebok field production on stream.

Others who spoke included the Managing Director, Energia Energy, Felix A.V, Managing Director of WalterSmith PetroMan, Abdulrasak Issa, Managing Director of Brittania-U, Mrs Uju Ifejika and Managing Director of Frontier Oil, Thomas Dada.

They all applauded the initiative but admitted that some teething operational challenges are posing a huge threat to the full realisation of the goal of raising reserves through the marginal field project. They identified some of these challenges as the frequent vandalisation of crude oil export lines and the loss of about 25 to 30 per cent of daily injected crude volume as a result.

As the next licensing round is around the corner, they suggested that an effort be made to avoid the mistakes made in the maiden bid round which contributed negatively to the slow pace and progress of the experiment.

According to them, the government should ensure that before the fields are awarded issues bordering on technical know-how, partnership and funding are well sorted out among the prospective marginal field operators.

Mr Alex Otti, Managing Director of Diamond Bank and Ladi Balogun, Managing Director of First City Monument Bank (FCMB) represented by Akeem Adedeji also provided the financial perspectives to the discussions, as funding of oilfield development is believed to be critical to reserves growth.

Otti said that as much as the banks may be willing to support the industry with adequate funding they are constrained by the fact that most of the indigenous companies are not well structured and organised.

"While we are inundated with complaints that most bankers are not amenable to funding oilfield projects by the indigenous companies, I make bold to say that most of these companies do not appear to be deserving of these funds. Imagine the situation where in a company, the father is the Chairman, the son, Managing Director, the daughter, Technical director and the cousin, the Admin Manager, how do you expect there would be corporate governance in such a company? This is simply untenable as far as we as creditors are concerned. The family making up the board of directors makes it a weak corporate structure," he said.

The Independent Petroleum Marketers' Association of Nigeria (IPMAN) has given a stern warning that any fuel station found to be selling kerosene above N50 per litre will be shut. The Association's National President, Mr. Aminu Abdulkadir, warned that any station infringing this directive would be shut for 6 months with the possibility of further sanctions.

He said: "We have put an effective and efficient mechanism to monitor the distribution of kerosene across the filling stations in the country. Looking at the structure of our association, one should understand that non-compliance could easily be dealt with."

He added that IPMAN was collaborating with the Nigerian National Petroleum Corporation (NNPC) in this initiative to ensure that Nigerians do not face unnecessary hardship in obtaining the product.

Forte Oil Plc is outperforming other stocks on the market as its shares continue to rise. The indigenous oil marketer has recorded a growth of 1,395 per cent year-to-date growth on the Nigerian Stock Exchange (NSE) against an All-Share index year to date growth of 37.39 per cent. At the beginning of the year the company's share price was N7.73 naira and by Tuesday 12th November it had risen to N115.64.

The company's soaring fortunes have been aided by a 258 per cent increase in profits before tax for Q1-3, which rose to N3.2 billion from N900 million in the corresponding period of 2012. Profits after tax rose 317 per cent to N2.7 billion from N700 million in the corresponding period last year.

The company's improving fortune according to its Group Chief Executive Officer, Akin Akinfemiwa, is testimony to the company's focus on "business transformation initiatives, which include solid corporate governance and business ethics, enhanced safety health and environmental practices across all business lines and superior customer service delivery."

There is mixed reaction to the news with some stockbrokers advising investors to exercise caution amid warnings that the share price might not be justified.

The company however remains bullish with its determination to boost investor confidence by creating and sustaining robust returns to shareholders.

The House of Representatives has mandated its Committees on Petroleum (Upstream and Downstream) and Justice to investigate accusations of fraudulent practices by the Nigerian National Petroleum Corporation (NNPC) in the sale of crude oil. The House reacted swiftly to a report by an international financial watchdog, the Berne Declaration (BD), which has accused NNPC of colluding with Swiss oil traders and their Nigerian counterparts to defraud the nation of billions of dollars in oil revenues.

The 19-page report entitled "Swiss Traders' Opaque Deals in Nigeria" levels strong accusations at Swiss oil traders, the dominant buyers of Nigerian crude oil exports, who they say are colluding with NNPC to buy Nigeria's oil at below market value thereby depriving the nation of billions of dollars in revenue. The report asserts that more than half of Nigerian crude oil exports pass through Switzerland.

"When it comes to Nigerian crude oil exports, Swiss traders have it both ways. On the one hand, they deal in ordinary exports, coming from the oil that the produc­ing firms pour out, via the federal State, to the NNPC in the form of payments in kind. In value, Swiss compa­nies bought up 28.92 % of the barrels put up for sale in this way in 2011 ($4.125 billion). This proportion rises to 36.9 % if the Nigerian traders with a subsidiary in Switzerland are included ($5.264 billion)," said the report.

"On the other hand, the traders are allocated by the NNPC a major proportion of the crude oil that the four refineries in the country do not manage to process. In fact, these re­fineries only rarely run at more than half their capacity, and usually only between 30% and 40% of it. Despite this, since 2003, the NNPC has nevertheless continued to allocate them 445,000 barrels of crude oil per day, which corresponds to 100 % capacity. This means that a bal­ance of at least 222,500 barrels a day has to be exported. It is sold to traders, Swiss in 43.28 % of cases ($4.605 bil­lion), or to foreign refineries. Or it is exchanged for refined petroleum products, within the framework of 'SWAP contracts' (exchange of crude oil for petroleum products). If Nigerian firms owning a branch in Geneva are included as well, the 'Swiss' share of the oil dedi­cated to refineries reached 82.12 % in 2011 ($8.739 billion)," the report added.

The damning report accuses the traders of contrib­uting to the perpetuation of a corrupt system characterized by crude oil export allocations to "letterbox" companies, opaque calls for tenders, suspicions of crude sales at knock-down prices, unjustified use of opaque jurisdictions such as Bermuda.

Two trading giants have been particularly singled out by the report which states that Geneva companies Trafigura and Vitol "outclass their competitors thanks to opaque partnerships with the NNPC established in Bermuda." According to the report there are instances of sales between NNPC and its two Swiss partners car­ried out at prices lower than the market rates.

BD also questions NNPC's failure to publish annual financial reports and has called on NNPC to explain why it stopped publishing annual reports in 2005.

NNPC has since issued a statement in which the Acting Group General Manager, Group Public Affairs Division, NNPC, Ms. Tumini Green, dismissed the allegations as "not only bogus but strewn with inaccurate and poorly researched data, which defies common sense and verifiable evidence on the ground."

Vitol and Trafigura have also denied the accusations with Vitol saying, "crude oil is purchased at the official price set by the Nigerian government in line with major market published assessments," whilst Trafigura said that it has "a zero tolerance policy towards corruption and well established due diligence processes."

The Berne Declaration is a Swiss non-governmental organization (NGO), which monitors the role of Swiss corporations, banks and government agencies. The full BD report is available here and the BD response to NNPC's statement is available here.

Austin Avuru, Managing Director and Chief Executive officer of Seplat Petroleum Development Company has won the highly prestigious and coveted Ernst & Young Entrepreneur of the Year award in the Master Category for the Nigeria and West African sub-region.

With this feat, Avuru joins the league of globally recognized entrepreneurs like Aliko Dangote who won in 2012.

Avuru, a thoroughbred industry professional and vocal advocate of indigenous participation in the Exploration and Production sectors of the Nigerian oil industry, will be contesting alongside other winners from the various regions for the global Ernst & Young World Entrepreneur of the Year which will hold in Monaco in June 2014.

Speaking at the award ceremony, the Honourable Minister of Trade, Olusegun Aganga, elaborated on the many benefits of events such as the Ernst and Young World Entrepreneur of the Year Award and the need to celebrate entrepreneurs as they boost the economy by their business initiatives which provide employment amongst many other.

The Ernst & Young Entrepreneur of the Year Awards, sponsored by Ernst & Young, is held annually in more than 50 countries worldwide and recognizes business leaders "driving successful, innovative businesses and celebrates their exemplary performance."

Every year, overall winners from different countries and regions gather in Monte Carlo, Monaco, for the annual Ernst & Young World Entrepreneur of the Year Award. The Nominees are reviewed by an independent judging panel composed of several distinguished business leaders and previous award recipients.