Shares in London Stock Exchange listed oil firm Afren jumped on Tuesday following its revelation of a highly significant find in Oil Prospecting Licence (OPL 310) offshore Nigeria. Analysts have described the giant discovery, which the Africa-focussed firm said was "above expectations," as one of the most important finds in recent West African history.

The discovery in the Ogo prospect, located in an under-explored offshore basin, was made during drilling of the Ogo-1 well in partnership with Afren's partners in the block, Optimum Petroleum and Lekoil. Drilling is now suspended, after they uncovered a significant light oil accumulation, spanning 216 feet of stacked pay. A side-track was also successful.

Based on the well data, the partners now estimate the P50 to P10 gross recoverable resources range to be 774 to 1,180 mmboe significantly ahead of pre-drill expectations of 202 mmboe.

The announcement on Tuesday sent shares in Afren, which is listed on the main market of the London Stock Exchange (LSE), soaring by 9 per cent, reaching 161p. Shares in Lekoil, which listed on the Alternative Investment Market (AIM) of the LSE in May, also rose 16.16 % to 57.50p.  While some analysts are gushing about the find, others are urging caution with one saying: "The devil is likely to be in the detail and further clarity is required on the volume of liquids and gas and the distribution of resources between the various reservoir intervals."  

Afren has a 22.86 per cent participating interest in the block although it has a 40 per cent economic interest. Optimum has a 60 per cent participating interest while Lekoil, which farmed into the block in May this year in what is looking like a very smart acquisition, has 17.14 per cent.

Osman Shahensah, Chief Executive of Afren said about the find: "The Ogo and Ogo-1ST discovery continues a 100% exploration track record following discoveries at Ebok North Fault Block and the Okoro East Extension in Nigeria".

Meanwhile, Chief executive of Lekoil, Lekan Akinyanmi told investors: "We will continue to work with our partners to progress the Ogo discovery while also focusing on examining other opportunities to build our portfolio of assets.  Ogo has provided us with a flying start to our strategy to build a substantial, Africa-focused oil and gas business."

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Transnational Corporation of Nigeria Plc (Transcorp) has revealed that it expects to begin production next year from its Oil Prospecting Licence (OPL 281). The Chairman of the Board of Transcorp, Tony Elumelu, revealed this in a statement to shareholders highlighting the turnaround of the group with interests in hotels, agriculture and now power. Transcorp partners in the block are Sacoil Holdings Limited (Sacoil) to develop and Energy Equity Resources limited.

Elumelu told shareholders that production should begin before the end of next year, marking significant progress in the company's oil and gas strategy. The company's shares have already risen 36 per cent this year and analysts are predicting that commencement of production will improve the bottom line of the company significantly with Bloomberg commenting: "For Lagos-based Transnational Corp., or Transcorp, the start of crude output may help restore profit after earnings slumped 58 per cent last year."

Transcorp has long been expected to become a big player in the upstream world but it has so far failed to make a big impact, losing out in the bids for the acquisition of assets in some of the recent International Oil Company (IOC) divestments.  Entering into production will put it in a much stronger position to bid for larger assets given that the company seems keen to improve its upstream footprint. 

The company has also taken possession of Ughelli Power Plant and expects to raise power generation output from 160MW to at least 1,500MW over the next 3 to 5 years.  

Elumelu told shareholders: "We have put in place a world class management team and are committed to developing the synergies between our natural resources portfolio and our power interests, creating an integrated energy approach that directly links Nigeria's natural resource wealth to the daily needs of our people."

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Heritage Oil Plc which is listed on the main market of the London Stock Exchange has issued its Interim Management Statement for the period from 1 July 2013 to 18 November 2013. The company states in the report that its revenues have been transformed with production up 60 per cent compared to the first half of the year. The company's investment in Nigeria in Oil Mining Lease (OML 30) through Shoreline Natural Resources is key to the dramatic improvement in the company's fortunes.

The company generated total revenues of $49.1 million in the third quarter 2013 ($2.1 million, Q3 2012), of which $46.4 million was from the interest in Shoreline Natural Resources Limited.   

Heritage operates in Nigeria through Shoreline Natural Resources Limited, a private limited Nigerian company established by Heritage (through a wholly owned subsidiary) and Shoreline Power Company Limited. The special purpose vehicle owns a 45% interest in OML 30 with the National Petroleum Development Company holding the remaining 55% interest.

Shoreline drew down a further $50 million of finance from a Reserves Based Lending facility, extending the debt to $550 million in order to replace security that Heritage had provided for a letter of credit from Standard Bank Plc. The $50 million short-term bridge facility, entered into in August 2013, was available till 31 December 2013. The Company used this facility to back the Shoreline letter of credit to National Petroleum Development Company until the Reserves Based Lending facility could support the letter of credit, which is now the case and hence the security provided by Heritage is in the process of being released.

The company, which recently entered into a strategic joint venture alliance with Bayelsa State reports that the work programme on its OML 30 acquisition is progressing well. Production continued to improve significantly after engaging a local Non-Governmental Organisation to address community issues. Gross production stabilised at 40,000 bopd after reaching a peak of 46,000 in September. The company says that well optimisation activities will soon be underway following the delivery of three gas compressors. Three development wells are planned for 2014.

The 9-day closure of the Trans Forcados export pipeline for maintenance caused some disruption over the quarter but repairs to the Afiesere gas lift distribution manifold enabled gross field production to increase by 4,000 bopd.  

Production from the Uzere West Field is due to commence shortly and the field is expected to reach gross production of 5,000 bopd within the next few weeks.

Heritage's net production in 2013 is expected to average 11,000 bopd, based on gross production for OML 30 for the full year of 23,000 bopd with a gross exit rate of c.50,000 bopd. Production estimates for 2014 are expected to be significantly higher with Heritage expecting net production to be within a range of 16,000-21,000 bopd, driven by well optimisation in the first half of the year and development drilling which is on track to commence in the second half of the year.

Chief Executive Officer of Heritage, Tony Buckingham is excited by the developments and commented: "It has been a year since we completed the acquisition of the major interest in OML 30 and we are seeing the rewards reflected in increased cash flow, production and revenues. Our revenues have been transformed as year to date we have generated cash of nearly $360 million. Nigeria is a key focus for Heritage and we have recently engaged with Bayelsa State to enable us to increase our footprint further within the region."

Shoreline also reports that it has been in discussions with relevant government departments in Nigeria about its tax status and anticipates that the tax reduction could be substantial.

The Minister of Petroleum Resources, Diezani Alison-Madueke, has revealed that the Federal Government is planning to sell off the state owned oil refineries before the end of the first quarter of 2014. The Minister made the disclosure during an interview on Bloomberg TV Africa. She admitted that the government has not done a good job of running major infrastructure entities, adding "we would like to see major infrastructural entities such as refineries moving out of government hands into the private sector."

Last year, a 22-man National Refineries Special Task Force headed by a former Minister of Finance, Dr. Kalu Idika Kalu, found that the state-owned Nigerian refineries had not been efficiently and safely operated and maintained for more than 15 years.

The committee, which submitted its report to the President in November 2012, recommended that the refineries should be privatised within 18 months. To facilitate the privatisation of the refineries, the task force called for an urgent review of full rehabilitation of the refinery plants, saying investment in the proposed Turnaround Maintenance (TAM) and rehabilitation projects for the refineries by the Federal Government should therefore be limited to the minimum required to make the refineries work in a safe and reliable manner.

Nigeria, Africa's top producer is unable to meet the refined product needs of its populous nation and relies on fuel imports to service about 70 per cent of local requirement. It also engages in swap deals with some large oil traders in which it exchanges crude oil for refined petroleum products.

"We are right now undergoing a major turnaround maintenance programme" of the refineries, Alison-Madueke said. Port Harcourt is the first to undergo the rehabilitation programme and then Kaduna and then Warri will follow. Port Harcourt is the largest of the three refineries with a processing capacity of 210,000 barrels while Warri is next with a capacity of 125,000 and Kaduna can process 110,000 barrels.

The price of OPEC basket of twelve crudes stood at $104.58 dollars a barrel on Wednesday, 20th November compared with $105.02 the previous day, according to OPEC Secretariat calculations.

Meanwhile, a report by Citigroup Incorporated said the OPEC may have to cut production next year as non-OPEC suppliers continue to increase output particularly the U.S., Canada, Kazakhstan and Brazil. Members of the OPEC supply about 40 per cent of the world's oil.The group is due to meet in December and will review output for next year. No doubt, the production warnings will be echoing as they meet, given that many member nations are reliant on high oil prices to meet their national budgets.  

The Federal Government has given the go-ahead for the construction of additional rail lines to oil depots in Apapa, Lagos in a bid to ease traffic congestion on the roads. The Minister of Transportation, Hon. Idiris Umar disclosed this at the unveiling of 20 new oil tank wagons acquired by the Nigeria Railway Corporation (NRC).

Speaking at the unveiling ceremony, Hon Umar said: "The Federal Executive Council has since approved an addendum for all the loop lines and sidings including links to the oil depots in Apapa. In addition, an addendum has also been approved for the upgrade of Signaling and Telecommunication system from Lagos to Kano."

The Corporation's Managing Director, Adeseyi Sujiwade said that the newly commissioned wagons would enhance the provision of haulage services to oil marketers. He stated that once commissioned, the 20 oil wagons would take some 30 oil tankers off the road, which will ease traffic congestion on the roads and reduce accidents and wear and tear on the roads.

He has appealed to oil companies to make the most of the upgraded rail tracks to move their products around the country. "With these wagons, you can be rest assured of safe and prompt delivery of your products by Nigerian Railway Corporation," he said.

He admitted that following the rehabilitation of the Western line linking Lagos to Kano it would be necessary to acquire various categories of rolling stock.

He also revealed that NRC was already working on signing a memorandum of understanding with Total for the movement of petroleum products by rail. He urged other oil marketers and distributors to take advantage of the operational and economic benefits of the wagons in moving their petroleum products by rail.

The Department of Petroleum Resources has said marketers who construct petrol stations without approval will face the full wrath of the law.

The agency said this through its Zonal Operation Controller Alhaji Mustapha Jahun at the 2013 DPR and petroleum marketers meeting.

Jahun expressed concern at the proliferation of lubricant retail points operating  without DPR's  licence, noting  that  the retailers often resorted to the sale of base oil as engine oil which had dangerous implications for motorists.

"The renewal of the 2014/2015 operating licence is ongoing, therefore, marketers are requested to come forward and renew their retail outlets.

The Movement for the Emancipation of the Niger Delta (MEND) has claimed responsibility for the kidnap of two American sailors from their vessel in the Niger Delta. The two sailors were on board a

The sailors have since been released but the militants claim they were paid a $2 million ransom for the release of the sailors, most of that sum coming allegedly coming from Nigerian authorities. Although kidnappings are still common in the Niger Delta, almost all foreigners kidnapped are released once ransoms are paid.

There has been concern that the Movement might be starting a new wave of attacks on the oil and gas industry.

Recently, the group claimed responsibility for a fire at the Warri Oil Refinery although the fire, which caused no injuries, was dismissed as a "minor incident" by Nigerian National Petroleum Corporation (NNPC) spokeswoman, Tumini Green. A statement purportedly from MEND warned that the fire is part of a new campaign against the government's "unsustainable and fraudulent" amnesty program.

Under a general amnesty deal in 2009, MEND agreed to lay down its weapons and has since benefited from a programme of education and employment by the government but is apparently unhappy with the way the programme is being administered.

Midwestern Oil and Gas Company Limited has won the Africa Oil and Gas Award for Health Safety and Environment (HSE). The company won the award after attaining six million man-hours loss time injury (LTI) free operation in its Umusagede marginal field located in oil mining lease (OML) 56.

Ministries for Energy across Africa and oil and gas operators make up the judging panel for the Africa Oil & Gas Awards, which recognises achievements in Africa's oil and gas sector.   

Receiving the award, the Managing Director and Chief Executive Officer of the Midwestern, Mr. Adams C. Okoene, said "Our approach has been integration of HSE at the initial/conceptual planning stages and through to completion of those activities and projects. The shareholders and management say yet another thank you to our entire dedicated workforce whose notable contributions made this milestone possible."

Maputo, Mozambique

2-5 December

Oil and Gas Environmental Conference

Dallas, Texas

3-4 December

Drilling Waste Forum 2013

Abu Dhabi, United Arab Emirate

8-11 December

Houston, Texas

9-11 December

Houston, Texas

9-11 December