Oando was about to run out of time in November when the American giant extended the close date by 60 days to expire on the 31^st of January 2014. Now, just in the nick of time, Oando has managed to secure the loans with which to close the deal. In view of the binding agreement for the loans, signed on the 31^st of January, ConocoPhillips has extended the longstop date to 28^th February 2014. The extension has come at a price after Oando agreed to pay an additional $50 million.

Oando is confident of closing the deal following the binding agreements for the loans. They have secured:

a) a $350 million corporate facility agreement with a syndicate of  Nigerian lenders, as well as FBN Capital Ltd and FCMB Capital Markets Ltd as the mandated lead arrangers. FBN Capital was the facility agent and financial modelling bank, while FCMB was the technical bank. First Trustees Nigeria acted as security trustee in the deal. The facility is for 72 months from the date of first draw down. Interest rate is LIBOR plus 9.5 per cent for the first 57 months, going up to 10.5 per cent thereafter.

b) a $450 million reserves based lending by a group of Nigerian and international banks including Standard Chartered Bank, BNP Paribas and the Standard Bank of South Africa Ltd.  Standard Chartered was the facility agent and security agent in the senior secured facility deal. Interest rate is LIBOR plus 8.5 per cent.

In addition to the funding above, on the 28^th of January, Oando announced a private placement on the Toronto Stock Exchange where it is listed.  The offering is expected to consist of 35,070,063 common shares of the Company and 17,535,051 common share purchase warrants. The company expects gross proceeds to reach $50,000,000.

The rest of the funding is coming from a convertible loan from Oando Plc, the 94.6 per cent owner of OER.

Oando says that it now has all the funds it needs to close the deal before the longstop date of 28^th February.  They will take over ConocoPhillips' interests in all its Nigerian assets, which include interests in onshore OMLs 60, 61, 62 and 63; offshore OMLs 131 and 214 (both in deepwater); and Brass LNG.

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Chief Tunde Afolabi has executed a major boardroom coup to takeover the chairmanship of indigenous major, Amni International Petroleum and Development Company. One of the most successful indigenous upstream players, Amni had retired army colonel, Sanni Bello as its chairman and Professor Edozien as its vice chairman. Now, in an astonishing move, which took the industry by surprise, Chief Afolabi, who remains the Managing Director, now becomes Chairman of the board.  

Afolabi is said to have paid $150 million each to Bello and Edozien for their shares in the company. It is not known whether the split was acrimonious but some are saying it was not entirely without rancor and that while the two retirees were willing to put up their shares for sale, the move from Afolabi came as a surprise. Unsurprisingly, the parties involved are remaining tight-lipped about the sale for the moment.  

Tunde Afolabi is a professional Geologist with over 30 years of oil and gas exploration and production experience from international companies. He is a past President of the Nigerian Association of Petroleum Explorationists (NAPE).

Amni is producing from its interests in two oil mining leases. Oil mining lease (OML) 112, the former OPL 469, located in the Eastern Niger Delta and covering 437 sq km, was granted in 1993 to the company on a sole risk basis just after its formation.   OML 117 (formerly OPL 237) also in the Eastern Niger Delta and covering just 50 sq km was awarded to Amni1n 1994.

The Ima field which is located over the two OMLs and has been producing since 1996.  French international oil company (IOC) Total farmed into the two blocks in 2005 under which it acquired a 40 per cent interest. Under the terms of the agreement, Total relinquished its rights to the crude oil from the known reservoirs of IMA in April 2007. That means that Amni is entitled to 100% of the crude oil from these reservoirs and bears all royalties and taxes due in relation to "Ima oil".  

Under the agreement, Amni is carried through the development of gas reserves (2C: 1.6TCF) until production. Total will then recover costs out of revenues from gas production.  

The Okoro and Setu East Fields are located in OML 112, with the two fields separated by 6.5km in a water depth of 5m to 14m. Total relinquished its right to participate in the Okoro/ Setu fields, allowing Amni and Afren Energy Resources Limited (as Contractor) to enter into a Production Sharing and Technical Services Agreement in March 2006, facilitating field development.  

London stock exchange listed Afren has issued its latest operations update which reveals that it expects to deliver record financial results for 2013. The update showed it achieved sales revenue of around US$1.65 billion and operating cash flow in excess of US$1.1 billion.  

The company says this was driven by a year-on-year 14% increase in like-for-like net production, principally from the Ebok on oil mining lease (OML) 67 offshore and Okoro fields on OML 113 shallow offshore. Afren recorded total gross production of 59,926 boepd in 2013, with net production of 47,112 boepd.  

Afren and its partners will commence development of the Okoro Further Field Development, Ebok North Fault Block and Okwok (also on OML 67) in 2014. These are all expected to generate high margin cash flow for the Company.  

Afren is expecting gross production of approximately 62,000 bopd in 2014 (approximately 40,000 bopd net to Afren), a small increase over 2013, but this takes into account the shut down that will occur during the installation of an additional platform, as well as cost recovery on Ebok. The arrival of a rig on onshore OML 26 will also add to the slow-down in production.

Afren's Nigerian experience has been a runaway success, which has continued with the Ogo discovery on OPL 310 last year. The discovery on the offshore OPL was the largest global discovery in 2013 with P50 gross recoverable resources of 774 mmboe. The Company will now acquire 3D seismic ahead of appraisal and further exploration drilling.

Osman Shahenshah, Chief Executive of Afren said:"2013 has been another exceptional year for Afren, with a combination of record financial results, production ahead of guidance and industry leading exploration success."

A Federal High Court sitting in Lagos has extended the temporary injunction it granted to Britannia-U on the 16th of December restraining Chevron Corporation of the United States and its Nigerian subsidiary, Chevron Nigeria Limited (CNL) or any of its agents from negotiating the sale of Oil Mining Leases (OMLs) 52, 53 and 54, with Seplat Petroleum Development Company (SPDC) Limited or any other bidder. The parties are due back in court on the 10th of February.

Brittania-U had approached the court for intervention in December after alleging that CNL and Chevron USA had been working behind the scenes to ignore the result of the competitive bid conducted for the sale of Chevron's 40 per cent interest in the three oil blocks.

The multinational oil company, by the injunction was also ordered not to execute a definitive agreement or any other agreement with Seplat or any other bidder, apart from Brittania-U.

Others joined in the suit were CNL, Chevron USA, BNP Paribas Securities Corporation, Mr. Hermant Patel and Seplat Petroleum Development Company Limited.

Sources close to the transaction said that Brittania-U had emerged as the highest bidder, offering a sum said to be somewhere between $1 billion and $1.6 billion, while Seplat and its partners came second with a combined offer of about $900 million.

LADOL Obtains Injunction Against Samsung over Egina Project

Lagos Deep Offshore Logistics (LADOL) the indigenous oil and gas services provider has obtained a temporary injunction from a Federal High Court in Lagos. The injunction restrains Samsung Heavy Industries from excluding LADOL from the execution of the Egina floating production storage and offloading vessel (FPSO) project.

LADOL is a fully integrated offshore tax free base where oil and gas companies can get logistics support for their vessels, cargo, personnel and projects.

The lawsuit stems from the June 2013 award of a $3.1 billion construction contract for the Floating Production, Storage and Offloading (FPSO) vessel by Total Upstream Nigeria Limited to Samsung for the Egina Field.  Following the award, LADOL revealed that it had won the bid from Samsung for a significant proportion of the steel fabrication and the integration of the FPSO topsides to be carried out at its yard in the LADOL Free Zone.

At the time of the award to Samsung, NNPC/Total management was said to have taken the decision to award the Egina FPSO contract to Samsung after a comprehensive review of the economics, the track records of the bidders and having met all the requirements of Nigerian Content Development, including 12,000-15,000 tonnes in-country fabrication of topsides.

The award to LADOL was greeted with widespread allegations that LADOL lacked the requisite capacity to execute the construction of the FPSO. LADOL had to defend its capability vigorously, explaining that they won the bid from Samsung after three years of submissions, technical analyses and detailed appraisals.

Now LADOL has brought in heavy hitter, Fidelis Oditah QC, SAN to lead its action against Samsung claiming in the lawsuit that it has been excluded from the contract by Samsung. LADOL has joined Total Upstream Nigeria Limited (Total), Nigerian Content Monitoring Board (NCDMB), and the Minister of Petroleum Resources in the lawsuit.

The indigenous company wants the court to declare that the contract was awarded to Samsung on the basis that a significant proportion of the steel fabrication and the integration of the FPSO topsides would be carried out at LADOL's yard in the LADOL Free Zone, Tarkwa Bay, Lagos and that the award is subject to the Nigerian Oil and Gas Industry Content Development Act 2010.

LADOL claims that Samsung bid for the contract and represented to Nigerian regulators that LADOL was its local content partner and that it obtained the contract on that basis. It is therefore not open to Samsung or Total to unilaterally exclude LADOL from the execution of the said contract.

The company is also seeking an order cancelling the Egina FPSO Project contract, on the basis that the purported exclusion of LADOL from the performance/execution of the contract was a violation of the Nigerian National Content law.

Any cancellation of the contract for the project is likely to cause significant delays to the $15 billion Egina deepwater development.

The Egina oil field is located in oil mining lease (OML) 130, 150km off the coast of Nigeria in a water depth of up to 1,750m. The field is being developed by Total Upstream Nigeria (24%) in partnership with CNOOC (45%), Sapetro (15%) and Petrobras (16%). Egina is the third deep offshore development of Total in Nigeria. Production is scheduled to begin by the end of 2017. The oil reserves are estimated at 550 million barrels and the field is expected to produce 200,000 barrels of oil per day

At the end of the hearing, Mr Justice Aneke ordered the parties not to take any steps to replace LADOL as the local partner of Samsung on the Egina FPSO Project, pending the hearing and determination of LADOL's application for interlocutory injunctions, which is scheduled for Friday 7 February 2014.

Appeal Court Throws Out NLNG Objection to NIMASA Appeal

The long running dispute between the Nigeria Liquefied Natural Gas Limited (NLNG) and the Nigerian Maritime Administration and Safety Agency (NIMASA) is continuing in the Court of Appeal. 

The dispute initially arose when NIMASA sought to impose some levies on NLNG, including a Sea Protection Levy, 3% freight levies on cargo exports and a 2% Cabotage levy. NLNG maintained that it was expressly exempted from payment of such levies by the NLNG Act under which it was established. NIMASA then took matters into its own hands by mounting a blockage preventing vessels from leaving or entering the Bonny Channel.

The blockade was lifted after NLNG made a payment to NIMASA of the outstanding claim, but then approached the court for a judicial interpretation of the apparent conflict between the NLNG Act and the legislation on which NIMASA is relying in its claim.

On the 18th of June, NLNG obtained an injunction from a Federal High Court ordering the Federal Government and its agencies, which according to NLNG, includes NIMASA, from imposing any charges or taking any steps to obtain or prevent access to NNLG owned or chartered vessels, whether in-bound or outbound from Bonny Channel.

NIMASA asked the Federal High Court to discharge the interim injunction. The Court refused and so NIMASA filed an appeal at the Court of Appeal against the refusal of the Federal High Court to discharge the injunction. NLNG then filed an objection to NIMASA's appeal.  NLNG's objection was thrown out for procedural reasons after the Appeal Court said NLNG was premature and it could not stand and that furthermore, all necessary materials like the ruling being appealed against and the notice of appeal of NIMASA were not placed before it.  The substantive case will continue in the Court of Appeal.

Aveon Wins Egina Subsea Fabrication Contract

Aveon Offshore Limited, a leading indigenous oil and gas engineering and fabrication company, has been awarded a sub-contract for the fabrication of subsea structures for the Egina field, offshore Nigeria, from FMC Technologies Nigeria Ltd. FMC Technologies was awarded a $1.2bn Engineering Procurement Construction and Commissioning (EPCC) contract to provide subsea production systems for the project for the $15 billion development of Egina Field by Total Upstream Nigeria Limited.

The Aveon Offshore contract for the provision of more than 5000 tons of subsea structures will be executed by the company at its fabrication yard in Rumuolumeni, near Port Harcourt. The contract will generate more than one million productive man-hours of work.

The Egina field was initially planned to be developed as a subsea tieback to the Akpo floating production storage and offloading vessel (FPSO). Major discoveries in the area, however, led to the decision for a stand alone development of Egina.  First steel for the subsea structure's fabrications was cut down in December 2013, and deliveries of the structures are scheduled to begin by mid-2015.

Aveon's success is proof that the push for local content development in oil and gas is working and leading to the great strides being made by local companies in fabrication.

Tein George, Chairman of Aveon Offshore Limited, said: "The award of this project significantly expands the depth and boundary of our capabilities and provides reassurance to the Nigerian Oil and Gas industry that we are a very dependable local partner. It also proves our willingness and readiness to make the investments required to meet the very exacting expectations of our clients in respect of safety, schedule and quality."

SPDC to Hold Vendors/Suppliers Summit

Shell Petroleum Development Company is to hold a vendors/suppliers' summit on the 20^th of February. The theme of the event which will take place in Port Harcourt is "Stimulating oil and Gas Value Chain Through Partnership and Collaboration." 

Companies involved in engineering, fabrication and construction, manufacturing, assembly and maintenance, well engineering, production operations, health safety and environment (HSE), information and communications, technology (ICT) and other support services to the upstream oil and gas industry.

Interested companies are asked to send their expression of interest applications to SPDC before the closing date of the application on the 5^th of February 2014. Applications are to be sent to: UIG-NCDexhibition-coordinator@shell.com. Additional details will be provided to successful companies.

Chevron Announces 2014-15 Scholarship Awards

Chevron, in collaboration with its joint venture partner, the Nigerian National Petroleum Corporation (NNPC) is offering a number of university scholarship awards to suitably qualified Nigerian students.

Applications are invited from second year students in Nigerian universities studying accountancy, agricultural engineering or architecture, business administration or economics, chemical or civil engineering, computer science, electrical or electronics engineering, environmental studies or surveying, geology or geophysics, law, mass communications or journalism, mechanical, metallurgical or materials engineering, human medicine, dentistry, pharmacy or petroleum engineering.  

The deadline for receipt of applications is 21^st February 2014 and more details are available through the website: http://scholastica.ng/schemes/cnlawards

WAV Legal Services Unit 

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.

Mobil- Provision of Wellbore Cleanup Tools and Services

Mobil Producing Nigeria Unlimited invites interested and registered Nigerian companies to respond to the opportunity for the provision of wellbone cleanup tools and services for its offshore locations. The project is expected to commence in the second quarter of 2014. The scope of service covers the provision of personnel, equipment and materials associated with wellbore cleanup services. Only tenderers who are registered with NJQS product category 3.04.99 (other drilling services) and or 3.04.36 (well wash services) shall be invited to submit technical bids. The closing date for this opportunity is 14th February 2014.  

Total - Provision of Freight Forwarding and Customs Clearance Services

Total E&P Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of freight forwarding and customs clearance services. The scope of service covers the provision of freight forwarding services via air and sea for materials and equipments originating from Africa, America, Europe and Asia to Nigeria; Port Harcourt and to Lagos ports. Only tenderers who are registered with NJQS product category ( 3.08.10 freight forwarding logistics management services and 3.08.11 transport broker and agent services) shall be invited to submit technical bids. The closing date for this opportunity is 21st February 2014.

Total - Provision of 4D Seismic Acquisition Services

Total E&P Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of 4D seismic acquisition services. The project is expected to commence in the first quarter of 2015. The scope of service covers the provision of seismic equipment/vessels and competent personnel. Only tenderers who are registered with NJQS product category (2D/3D/4D seismic data acquisition services) shall be invited to submit technical bids. The closing date for this opportunity is 21st February 2014.

Oil Technology Conference

Houston, USA

5-8 May

www.otcnet.org