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French oil giant Total plans to produce 150,000 barrels-per-day of crude oil from its Egina deepwater field located 150 kilometres off the coast of Nigeria by the end of 2017. The company disclosed this over the weekend during the celebration of the completion of the detailed engineering of the living quarters for its Ofon field.

The Egina Project Manager, Mr. Jean Nichel Guy said this is going to be trail blazing in the history of oil production by international oil companies (IOCs) in Nigeria and the West Africa region.

He noted that the Egina project was the first major project in Nigeria since the Nigerian Content Act was signed into law in April 2010. "It means that we have integrated from the beginning, the requirements of the Nigerian Content Act and it was fully embedded in the scope of work of each of the packages," he said.

He said the project was an example for Nigerian and international contractors, adding that Total was proud of what had been achieved.  

Egina, which is currently under development, is the third deep offshore development of Total in Nigeria. Located about 20 kilometres away from Akpo field, Egina field lies within Oil Mining Lease (OML) 130 and covers an area of around 500 square miles in a water depth of up to 1,750metres.

The field was discovered in December 2003 when the Egina-1 well was drilled, with the appraisal well Egina-2 drilled in 2004. The appraisal programme and seismic data processing led to the drilling of the Egina-3 well in 2006 at a water depth of approximately 1,500metres. Subsequently, the Egina-4 was drilled in November 2006 and Egina-5 was drilled in January 2007.

The Egina field is being developed by Total Upstream Nigeria (24per cent) in partnership with NNPC (10per cent), China National Offshore Oil Corporation (CNOOC) 45per cent; Sapetro (five per cent) and Petrobras (16per cent).

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Barely two days after shutting down the flow stations on the Tebidaba-Brass pipeline, which carries about 47,000 barrels per day (bpd), Italian firm Eni has re-opened them. The company confirmed the closure of the flow stations last Sunday.  A spokesman for Eni said in a statement: "Repairs have been completed and the flow stations are being reopened."    

The closure of the flow stations became necessary because of a fire following an act of sabotaged last weekend.  After completing repairs in record time the company was able to avoid a force majeure declaration, which would have resulted in a deferral of 47,000 barrels.

Only two weeks earlier, the company was involved in an oil spill when a tanker discharged a large amount of oil during loading.  

Nigeria continues to lose an estimated 150,000 barrels of oil per day to oil theft most of which happens through illegal tapping of the pipelines, often causing terrible devastation to the environment. However, the international oil companies (IOCs) have also been accused of adding to the problem through the continued use of obsolete equipment and pipelines.

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International energy group, Blacksands Pacific has issued a statement in which it says it has terminated all "discussions, interests and agreement" with Sigmund Oilfields Limited and Grasso Consortium consisting of Grasso Nigeria Limited, Oil and Gas Mission Limited and Eurafric Energy Limited for the development of the oil prospecting licence (OPL 2012).

OPL 2012 is located Offshore Niger Delta, in shallow waters between 50 and 100m, within a highly prospective zone bordered by Shell's HD field to the northwest, NNPC's Agbara field to the west, several oil and gas discoveries of Addax to the south, H1 field of Sunlink to the west and JK Field of Shell to the north.

Explaining the background to the relationship, Blacksands Pacific said it had entered into a participation agreement with Sigmund and Grasso Consortium following which Blacksands Pacific commenced extensive diligence. The US company says it procured $250 Million Dollars finance for the project but was unable to obtain the necessary commitment and assurances from Sigmund and Grasso.

Blacksands Pacific has been scouting for assets in Nigeria for some years but so far it does not seem to have had much luck in concluding any acquisition. The company's website claims that "in the African Region, Blacksands Pacific's core assets and operations focus are in the prolific region of West Africa" although it fails to mention which particular assets those are.

Operations have resumed at Warri Refinery, some six weeks after a fire at the refinery and petrochemical plant which produces petrol, kerosene, diesel and other petroleum by products, caught fire. At the time, the Nigerian National Petroleum Corporation (NNPC) was at pains to dismiss it as a minor incident after the Movement for the Emancipation of the Niger Delta (MEND) claimed responsibility for starting the fire. NNPC says did not cause any injuries.  

Full-scale production is expected to resume very soon to bring the refinery to its pre-shutdown capacity.

Warri Refinery was opened in 1978 and has the capacity to process 100,000 barrels of oil per day. After undergoing an upgrade in 1987, the capacity was taken upwards to 120,000 barrels per day. The Government has failed to undertake turn-around maintenance over the years which has left the refinery functioning at a fraction of its  actual capacity. The refinery is now up for sale along with other government-owned refineries.

Leading indigenous marketer Oando Plc has signed a 5 million Euro agreement with KFW, a German government-owned development bank based in Frankfurt, which will enhance the availability of liquefied petroleum gas (LPG) to Nigerians, particularly low-income groups.

Explaining how the funds would be utilised, Abayomi Awobokun, Oando Marketing's Chief Executive Officer said the funds invested through the agreement would be made available to select micro finance institutions. These institutions will lend the funds out to end users of LPG as well as micro, small and medium-sized enterprises for their LPG investments.

Awobokun pointed out that Oando Marketing had recently signed a Memorandum of Understanding with the National Association of Microfinance Banks (MFBs) with the sole objective of making cleaner and safer cooking fuel more accessible to Nigerians. The deal with the MFBs will enable customers to purchase a complete set of 3kg O-Gas cylinder with just a N200 initial deposit.

Oando is at the forefront of the campaign to get the general populace, particularly the low-income group to switch from environmentally damaging kerosene, coal and wood to LPG, popularly known as cooking gas.

Nigeria has the 9th highest deposit of gas in the world, but most of the gas is flared. The government is trying to get the nation to switch from fossil fuels to the more environmentally friendly cooking gas.

The price of OPEC basket of twelve crudes stood at $106.96 a barrel on Thursday, compared with $106.81 the previous day, according to OPEC Secretariat calculations. Prices are beginning to rally again after a steep drop of just over $2 between 4th of December and 10th of December.

CAMAC Energy has announced that it is to raise up to $300 million through senior notes, which it will use to further develop the Oyo field located offshore in oil mining lease (OML) 120.

The senior notes are being offered and sold only to qualified institutional buyers under Rule 144A under the US Securities Act. It can only be offered to non-U.S. persons outside the United States under Regulation S under the Securities Act.

Only two weeks ago, Houston based CAMAC Energy Incorporated founded by Nigerian, Dr Kase Lawal entered into a definitive agreement for a $270 million equity investment with South African State-owned Public Investment Corporation (PIC). The investment will give PIC approximately 30% equity interest in CAMAC after completion of the transactions. New York Stock Exchange listed CAMAC will also list on the Johannesburg Stock Exchange as part of the deal with PIC.

Prior to the deal with PIC, CAMAC Energy had entered into an agreement to acquire additional interest in its wholly owned subsidiary, Allied Energy, which will enable it to get a 100 per cent economic interest in the production sharing contracts covering Oil Mining Leases (OML) 120 and 121 offshore Nigeria. To acquire the interest, CAMAC Energy will issue 497,454,857 shares of common stock, pay US$170 million in cash and issue a US$50 million convertible subordinated note.

Current production from Oyo Field is approximately 2,000 barrels of oil per day (bpd), but there are already plans to ramp up production. Dr Lawal said that the company intends to pursue a production goal of 14,000 barrels of oil per day once Oyo-7 and Oyo-8 are completed next year.

19-22 January 2014