In a move that is likely to have indigenous companies quaking in their boots, Africa's richest man, Aliko Dangote, is eyeing up the International Oil Company (IOC) divestments. Dangote group is mulling over increased investment upstream according to Dangote Group's Group Executive Director, Devakumar Edwin. Speaking to Bloomberg, he said: "We're seriously thinking of investing in oil blocks both for gas and oil."

Dangote Group has primarily been involved in cement and sugar but last year announced that it was going to build a $9 billion oil refinery that will also have a petrochemical complex. The refinery will be located at Olokola Free Trade Zone. The 400,000 barrels per day (bpd) refinery will need large supplies of crude oil to maintain capacity on completion.  

Unsurprisingly, the man who does nothing in half measures now wants to control his own oil supply by investing in oil blocks that will provide much needed access to crude oil. There is an added element. His cement factories also need vast supplies of energy and so investing in gas rich fields will give him gas supply to power his plants.

Edwin says the Dangote Group is already talking to some companies wishing to divest from onshore. Indigenous companies have reason to be worried as Dangote Group has a way of muscling out its competition. They have no credibility issues as financial institutions line up to provide finance to the Group. They were able to raise $4.25 billion just one month after Dangote announced his intention to build the $9 billion refinery that will double Nigeria's refining capacity once completed. Going for an IOC divested block could see indigenous competitors left out in the cold in future IOC divestments.

Edwin also addressed some of the risks inherent in oil production in the prolific Niger Delta. Dangote Group believes they can manage troublesome local communities through corporate social initiatives. However, they plan to mitigate the risks to pipelines by ensuring they do not invest in blocks that are totally inland.

Dangote already has a limited investment in the upstream sector. They have a 9 % Investment in Block I in Joint Development Zone (JDZ) of Nigeria Sao-Tome along with Chevron Texaco and Exxon Mobil, a 10 % Investment in Block III in JDZ of Nigeria along with Anadakko as Operator and a 6 % Investment in OPL 315 with Statoil and Petrobas as operators.

With their interest in getting into the sector in a more meaningful way, their grand plans could soon see Dangote Group become one of Nigeria's largest indigenous producers.

Back to top 

The Central Bank of Nigeria (CBN) Governor, Mr Lamido Sanusi has expressed concern over the depleting Excess Crude Account. Sanusi was speaking at the end of a two-day meeting of the Monetary Policy Committee of the CBN.

Sanusi said that the ECA had fallen from $11.5 billion in December 2012 to less than $2.5 billion on January 17, 2014, a decline of $9 billion in the ECA, in only one year.

He also expressed grave concern over the country's declining external reserves, saying that the gross external reserves as of December 31, 2013 stood at $42.85 billion, representing a decrease of $980 million or 2.23% compared with $43.83 billion at the end of December 2012.

According to the Committee, the decrease in external portfolios was partly due to a slowdown in Foreign Direct Investment flows in the fourth quarter of 2013.

The CBN Governor also has concerns about the depletion of fiscal buffers following the continued decline in oil revenue and the depletion of the ECA.  

Declining oil revenue could not be explained wholly by output loss from theft and vandalism he said. "And this is giving us cause for concern and also to the Finance minister, and I suppose ongoing discussions will begin to reveal some of the reasons for that dramatic decline," he noted. He urged fiscal authorities should find ways to block revenue leakage.

He predicts a difficult year ahead, saying: "It will be tough for us, it will be tough for the fiscal authorities and elections are coming up in 2015."

Nigerian coastal communities have filed a $5billion dollar lawsuit in California against American oil giant, Chevron, over the 2012 K.S. Endeavour offshore rig explosion.  

In the lawsuit, the communities claim the rig explosion, which caused a fire that burned for 46 days, poisoned the air and water in the area. The communities allege negligence on Chevron's part in the explosion, which killed 2 staff.  

The communities say that the company was primarily concerned with profit while disregarding public and environmental health and safety during the drilling of a gas exploration well on the Funiwa field in the Niger Delta.

A high profile prosecution by the Economic and Financial Crimes Commission (EFCC) has begun in earnest at the Ikeja High Court. The EFCC is prosecuting oil marketer yesterday Rowaye Jubril along with his company, Brila Energy, where he is chairman.  He is accused of committing fraud by collecting N963.7 million in subsidy payments for petroleum products, which the EFCC says he never imported.  The case is being tried at Ikeja High Court before Justice Lateefat Okunnu.  

The allegation is that the accused obtained the subsidy for payment under the pretext of importing 13,500 metric tonnes of Premium Motor Spirit (PMS) into Nigeria. The EFCC says, its investigations revealed that Brila sourced the products from within the shores of Nigeria.  As a result, Brila is accused of making a false declaration in its claim that there was a ship-to-ship transfer of the product between the mother vessel, MT Overseas Lima and the first daughter vessel, MT Delphina.

Spring Bank Plc has given evidence in the high profile prosecution of Brila Energy and its chairman, Rowaye Jubril, by the Economic and Financial Crimes Commission (EFCC). The bank's evidence gave an insight into the process of the importation of petroleum products and subsidy claims.

Jubril and his company are being prosecuted by the EFCC for fuel subsidy fraud. Jubril is accused of fraudulently claiming N963.7 million in subsidy payments for 13,500 metric tonnes of petroleum products, which the EFCC says was sourced locally rather than imported.  

Spring Bank financed the transaction after giving Brila Energy a credit facility of $11.9 million.  Called by the prosecution, Spring Bank testified that Jubril followed due process in the importation of 13,500 metric tonnes of PMS for which he was given the subsidy payment.

Mr Uchenna Adobaka, the Deputy Manager, Energy Group of Spring Bank, who gave evidence on the bank's behalf, said: "As far as the bank is concerned, we have no evidence to show that the product was sourced locally. We (the bank) believe that it was imported."

Adobaka admitted that the bank did not supervise the transaction itself. The bank relied solely on documents presented for the transaction, which it says is the standard practice.He revealed that General Marine and Oil Services Ltd, which was appointed by the bank to supervise the importation and discharge of the product on its behalf had admitted to the bank that it did not in fact supervise the discharge of the PMS at Obat Tank Farm in Lagos.

The bank also revealed that the shipping documents submitted by General Marine showed the mother vessel as MT Gabros, while the Union Bank, the correspondent bank of Spring Bank, had the mother vessel down as MT Overseas Lima. The bank said it confirmed from the supplier of the product, Napa Petroleum, that the vessel used for importing the product was the Overseas Lima and so it submitted the documents to the Petroleum Products Pricing and Regulatory Agency (PPPRA) for processing.

Once the subsidy payment was credited to Brila's account, the loan was repaid with interest. The case has been adjourned till the 28th of April.

SPDC - Provision of Automatic Fire Extinguishing Detection and Alarm System

Shell Petroleum Development Company invites interested and registered Nigerian companies to respond to the opportunity for the provision and maintenance of clean agent automatic fire extinguishing, detection and alarm systems. The scope of service covers routine checks (daily, weekly, monthly, etc) on fire detection, alarm and extinguishing systems including condition monitoring, data gathering/usage to plan preventive maintenance. Only tenderers who are registered with NJQS in the 1.10.05, 1.16.05 and 3.01.15 categories shall be invited to submit technical bids. The closing date for this opportunity is 31^st January 2014.

SNEPCo - Provision of Lower Completion Equipment and Services

Shell Nigeria Exploration and Production Company invites interested and registered Nigerian companies to respond to the opportunity for the provision of lower completion equipment and services. The scope of service covers the purchase of equipment and accessories for installation of oil production and water injector completions in SNEPCo's Bonga (deepwater) fields. Only tenderers who are registered with NJQS Product Category shall be invited to submit technical bids. The closing date for this opportunity is 31^st January 2014.

SNEPCo - Provision of Directional Drilling Services

Shell Nigeria Exploration and Production Company invites interested and registered Nigerian companies to respond to the opportunity for the provision of directional drilling services. The scope of service covers directional drilling with measurement while drilling for deviated and horizontal deepwater wells as well as logging while drilling for deviated and horizontal deepwater wells. Only tenderers who are registered with NJQS Product Category shall be invited to submit technical bids. The closing date for this opportunity is 31^st January 2014.

SNEPCo - Provision of Electric Wireline Services

Shell Nigeria Exploration and Production Company invites interested and registered Nigerian companies to respond to the opportunity for the provision of electric wireline services. The scope of service covers the provision of electric wireline logging and associated services for deviated and horizontal deepwater wells. Only tenderers who are registered with NJQS Product Category shall be invited to submit technical bids. The closing date for this opportunity is 31^st January 2014.

SNEPCo - Provision of Waste Management Services

Shell Nigeria Exploration and Production Company invites interested and registered Nigerian companies to respond to the opportunity for the provision of waste management services.  The proposed contract will commence in the third quarter of 2014. The scope of service covers the treatment/disposal of all waste (domestic and industrial) as well as storage and transportation to expected locations. Only tenderers who are registered in the NJQS product/category 31507 waste management services shall be invited to submit technical bids. The closing date for this opportunity is 6^th February 2014.

Chevron- Provision of Tubing Conveyed Perforation Services

Chevron Nigeria Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of tubing conveyed perforation services offshore. The scope of service covers the provision of tubing conveyed perforation services and related accessories. Only tenderers who are registered with NJQS product/category 3.04.32 (perforation) shall be invited to submit technical bids. The closing date for this opportunity is 3^rd February 2014.