Oando Energy Resources (OER) has acquired the entire issued share capital of Medal Oil Company Limited, which owns a 5 per cent interest in oil mining lease (OML) 131, for a purchase price of US$5,000,000. The purchase price will be satisfied by the issuance of an additional 3,491,082 units in its latest private placement on the TSX.

Oando chose to acquire Medal Oil's 5% equity interest in OML 131 so that won closure of the $1.79 billion acquisition of ConocoPhillips assets, it will become the 100 per cent owner of OML 131.  

The closing of the mammoth acquisition, which will take the company from being a 4,500 barrels per day (bpd) producer to 50,000 bpd, was delayed from the end of November to the end of January. A new longstop date was given by ConocoPhillips after Oando announced, just in the nick of time on the 31st of January, that it had signed off on the loans that will enable it to close the deal. Oando bought an extension to the end of February with an additional payment of $50 million.

The indigenous downstream, and soon to become upstream, giant, says that it has now completed all the financials for the closure of the ConcoPhillips acquisition and are now awaiting the Ministerial consent to seal the deal.

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Eland Oil Begins Production from Opuama Field

The prolific Niger Delta continues to deliver value to foreign investors with the announcement that Aim listed Eland Oil & Gas PLC has commenced production from the Opuama oil field on oil mining licence (OML) 40, located onshore.

Following successful testing and commissioning of the field facilities, oil production from the Opuama field began on 4 February 2014. The company was able to bring the field to production after successfully re-commissioning existing infrastructure and re-opening two existing wells.

Gross output from the two wells is expected to stabilise in aggregate at around 2,500 barrels of oil per day (bopd), a significant increase on the aggregate 1,500 bopd reported on shut-in in 2006 by previous operator Shell.

The crude oil produced will be delivered to the Shell Forcados export terminal via Eland's recently re-commissioned flowstation and export pipeline, with a capacity to export up to 30,000 barrels a day.  

The operator of the field is Nigerian Petroleum Development Corporation (NPDC), which holds a 55 per cent interest. The remaining 45 per cent interest is owned by Eland's joint venture company, Elcrest Exploration and Production Nigeria Ltd.

Eland CEO, Les Blair, is beside himself with excitement after experiencing numerous delays and setbacks on the way to production. He said: "The commencement of production on OML 40 has been much anticipated by management and investors alike, and indeed by all stakeholders.  It is a testament to the dedication and hard work of all stakeholders in OML 40 and is a hugely significant milestone for Eland.  We look forward enthusiastically to the prospect of building on this pivotal turning point by materially increasing the daily production."

The company plans to ramp up production through development drilling in 2014 in the Opuama field, which contains 54.2mln barrels of recoverable oil reserves, and had been in operation for just over 30 years before it was shut-in by Shell in 2006 in a controlled shut down of the facilities.  

Funding is assured as production will trigger the drawdown of the company's $22 million debt facility and cash flow reinvestment to fund development drilling.

Eland's shares were up 4.9% at 108p in early trading on the morning of the announcement on the 5th of February. City brokers Northland Capital rate Eland as a "buy" with a 161p price target, nearly 60% above the current price of 103p per share.

ExxonMobil to Begin 4D Seismic Acquisition at Usan Field

ExxonMobil is to begin 4D seismic acquisition operations in the Usan Field in OML 138 from mid February. ExxonMobil will use the MV Tastman in the operation which is expected to last till mid April 2014.

4D seismic has been slow to get off the ground since its inception some 35 years ago, remaining a much smaller sector than the 3D from which it sprang.  

The technique has now come of age and is being used increasingly on the world stage and now, also in Nigeria, as a valid and valuable reservoir management tool.  Its advantages have been most clearly seen in applications to monitor fluid movement and differentiating between the drained and undrained portions of a reservoir, typically within clastic rocks offshore.

The Nigerian Maritime Administration and Safety Agency (NIMASA) has issued a marine notice to all ship operators, all masters of ships, all boat operators and all ship agents in connection with the Usan Field 4D seismic acquisition exercise.  

The Marine Notice warns that during the operation, the MV Tastman will be towing 10 streamers of 600m long with 50m separation between the streamers. The vessels will also have in tow, 2 seismic sources (air guns) for collection of seismic data. Three other auxiliary vessels (one support and 2 guard vessels) will be involved in the seismic operation.  

The Notice also imposes a total ban on anchoring in the same area.

Following its acquisition of ConocoPhillips' Nigerian business, Oando PLC, says its pre-tax profit is set to double to over N100 billion due to increased production as a result of the acquisition.  

Speaking during a recent visit to the Nigerian Stock Exchange (NSE), Oando PLC Group Chief Executive, Mr. Wale Tinubu, said post-acquisition, Oando's Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) will rise from the current annual average of N45 billion to N100 billion. Shareholders are on course to benefit significantly as the increase in earnings will lead to an improvement in dividend payout to shareholders in the near term said Tinubu. He said that the acquisition will significantly enhance the company's growth initiatives.

Speaking further on the acquisition, he confirmed that although Oando had concluded all financial considerations for acquisition, due process in the form of regulatory approval is required to officially close the deal. "All we require now is the consent of the minister, which is the legal requirement. The transaction will not be fully consummated until the minister's consent is received," Tinubu said.

The outlook has now improved and following the announcement that it had raised the funds to close the deal, its shares rose last Monday N1.86 to N21.11 outperforming the broader index which was up 0.27 per cent.

The acquisition which the company acknowledges is audacious will be a game changer for Oando.  The leading energy company will become the largest indigenous oil producer in Nigeria. Oando through Oando Energy Resources currently produces 4,500 barrels of crude oil per day from two producing fields, but with this acquisition it will start producing around 50,000 barrels per day from six producing fields.

Reiterating, Tinubu said, "We are excited by what the future holds for our organisation as this acquisition will not only provide significant growth in size and scale, but also strengthen our position in the upstream sector. Oando embodies a multifaceted approach, and we aim to maintain our dominant positioning in the Midstream and Downstream sectors, but this acquisition holds unprecedented opportunities for our upstream business."

The company proposes a new rights issue. Explaining the rationale behind the company's proposed N250 billion capital raise he said this was a fresh capital-raising basket that will provide flexibility to aid growth plans in the medium term.

"Proceeds from the raise will be used primarily to de-lever the Group's balance sheet, which is a long-term goal of management; and replenish the Group's working capital that was most recently utilized to part fund OER's COP acquisition. As we mature, we seek to optimize our balance sheet with the view of releasing additional value to shareholders, through debt refinancing, asset sales and equity raises." he explained.

Oando has experienced exponential growth in its asset base since 2003, going from N36billion to N515billion in 2013 due to the diversification efforts from its maiden downstream business that was acquired in the early 2000s to the fully integrated platform with major assets in the midstream and upstream.

Forte Oil Plc continues its winning streak after announcing a 467 per cent increase in its full year profit before tax. The downstream indigenous giant posted N6.524 billion for the period ending 31 December 2013. Profits after tax rose 397 per cent to N5 billion.

The company's revenue in the period was N128 billion, a growth of 41 per cent, while profit before taxes grew 467 per cent to N5 billion and earnings per share rose 365 per cent to N4.32.

The company says its growth was a by-product of a well executed business transformation strategy in the last 24 months covering corporate governance, risk management and controls, business revitalization, development and expansion.

Group Chief Financial Officer, Mr. Julius Omodayo-Owotuga said the company's revenue growth was due to the significant increase recorded in the sales of its fuel products segment, Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Aviation Turbine Kerosene (ATK) as well as its production chemicals, lubricants and greases. Its newly acquired power plant also contributed significantly to the revenue stream.

Omodayo-Owotuga said: "Our 2013 PBT of NGN6.52bn is a clear demonstration that Forte Oil Plc is on a clear path to dominate our primary market; the downstream petroleum marketing sector."

The company intends to make a dividend payment of N4.31 billion at N4 per share.

There are growing calls for a full audit of the accounts of the Nigerian National Petroleum Corporation (NNPC) after the Governor of the Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi's latest appearance before the Senate. He has levelled fresh accusations against NNPC claiming that $20 billion has not been remitted by NNPC to the revenue account.

In a leaked letter he wrote last September to the President, Sanusi had accused NNPC of failing to remit $49.8 billion to the nation's revenue account. After some hurried reconciliations between NNPC, the Ministry of Finance and the Ministry of Petroleum, Sanusi announced that "only" $12 billion remained unaccounted for, saying that NNPC had explained the whereabouts of the other $37 billion. The Ministry of Finance however, insisted it was $10.8 billion that was unaccounted for and that figure was adopted.

Eventually, NNPC claimed that the remaining $10.8 billion had been properly expended. Mr Bernad Otti, the Group Executive Director, Finance and Accounts Directorate of NNPC, explained that the sum in question was expenditure incurred as part of statutory responsibilities, which the NNPC, as the national oil company, executes on behalf of the Federal Government.

Otti had explained that the expenditure and responsibilities included the sum of $8.49 billion of unpaid subsidies on kerosene and Premium Motor Spirit (PMS) and $1.22 billion for pipeline management and repair. Other expenditure from the missing amount was for $0.37 billion dollars, the cost of holding strategic stock reserve for petroleum products and $0.07 billion dollars, which accounts for products and crude oil loses.

Sanusi was unsatisfied by the explanation and has revealed to the Senate Committee on Finance that the unremitted funds now stand at $20 billion. He said:  "It is established that of the $67 billion crude shipped by the Nigeria National Petroleum Corporation (NNPC) between January 2012 and July 2013, $47 billion was remitted to the Federation Account. It is now up to NNPC, given all the issues raised, to produce the proof that the $20 billion unremitted either did not belong to the Federation or was legally and constitutionally spent."

NNPC however continues to deny the allegations. Group Managing Director of the Corporation, Engr. Andrew Yakubu, said: "Let me make this point clear, CBN is a banking outfit, not a petroleum outfit. It is therefore understandable why they keep making unsubstantiated claims, which a little understanding of the technicalities of the oil industry would have saved them from making. CBN is not an auditing outfit. But what it is doing is now auditing. We have no problem with auditing, but let the professionals, the certified bodies and agencies that are charged with this responsibility of auditing, to do their work.''  

He remains adamant that the issues will be eventually reconciled by the Inter Agency Committee established to settle the $49.8 billion dispute.

Meanwhile Sanussi's call for a full audit of the NNPC account is gaining support. Many industry watchers are saying that a full audit is the only way to properly explain the "missing" funds and achieve transparency.

Lagos-based lawyer, Mr. Femi Falana (SAN), has also joined the call, saying: "As far as I am concerned, the Minister of Finance and Coordinating Minister of the Economy has no powers under the law to reconcile accounts. It is the constitutional duty of the Auditor-General of the Federation to audit the accounts of the Federal Government and its Ministries, Departments and Agencies."

"The auditor-general should, as a matter of urgency, look into these figures and come out with the correct position of the Federation Account," he added.

NEITI Begins 2012 Oil and Gas Industry Audit

The Nigerian Extractive Industries Transparency Initiative (NEITI) has commenced its independent audit of the oil and gas industry to cover the period 2012. The objective of the audit is, among other things, to establish what companies paid to the government and what the government received into the Federation Account.  

The audit is also to find out if companies paid what they ought to pay to government and if government received what is due to the Federation Account especially in taxes, royalties, signature bonuses, levies, rents, concessions etc.  

Agwai is New Chairman of Sure-P

The Federal Government has appointed Martin Agwai, as the new chairman of SURE-P following the resignation last year of Dr Christopher Kolade, the former chairman. Also appointed as deputy chairman is Tanwa Olusi.

The Subsidy Reinvestment and Empowerment Programme (Sure-P) was hastily constituted following the partial removal of fuel subsidies in 2012. The government said the programme would take the money saved as a result of the partial removal of subsidies and reinvest it into infrastructure, health and educational projects.

Dr Kolade resigned last year after the programme came under scrutiny for appearing to be funding projects that the Federal Government was already funding. The programme has already received $2.5 billion for projects and a further payment of $1.6 billion is due to it this year.

JTF Denies Issuing Advertisement for Sale of Petroleum Products

 "The Commander JTF Operation PULO SHIELD, Major General Iliyasu Abbah, hereby reassures Nigerians that the Task Force would continue to uphold its mandate of curbing illegal oil bunkering and crude oil theft," he added.

An NGO, after undercover operations, last year accused officers of the JTF of colluding with the oil thieves. The advertisement is severely embarassing for the JTF which is trying to clean up its image after the damaging allegations. 

Schlumberger Launches New Microseismic Surface Acquisition System

Schlumberger has announced the launch of a new high fidelity microseismic surface acquisition system, the MS Recon. This new microseismic system for surface and shallow grid microseismic surveys provides improved imaging of the hydraulic fracture geometry by optimizing the microseismic signal quality.

The microseismic system features an industry-first proprietary geophone accelerometer and ultra-low noise electronics to produce the widest range of signal detectability in the industry. The system simultaneously addresses the optimal frequency range of signal detection for microseismic events while lowering the electronic noise.

GPS-synchronized data are acquired continuously and transmitted to a real-time operations support center, providing customers with data processing and expert interpretation.

"The new microseismic surface acquisition system addresses the challenges of detecting small microseismic signals emitted during hydraulic fracturing at the surface and near-surface locations," said Joseph Elkhoury, vice president and general manager, Microseismic Services, Schlumberger.

MEND Claims Responsibility for Abduction of Oil Workers

The Movement for the Emancipation of the Niger Delta (MEND) has claimed responsibility for the abduction of two oil workers from a tug boat operated by Agip Nigerian Oil Company in the Nembe waterways in Bayelsa State.   

The boat was attacked and boarded by heavily armed men. Four of the crew members were robbed and released, while the captain and the engineer were taken away by the armed men. It is believe that they are being held for ransom.

Following the incident, a statement signed by spokesperson for MEND, Jomo Gbomo, read: "In this new phase of our struggle for justice, the Movement for the Emancipation of the Niger Delta (MEND) will pay considerable attention to dealing with the occupying Nigerian government forces in the Niger Delta that stand in our way."

In October last year, MEND claimed responsibility for the kidnap of two American sailors from a U.S.-flagged offshore supply vessel. The sailors were later released but the militants claim they were paid a $2 million ransom for their release by the Nigerian authorities.  

The militant group was responsible for attacks on oil workers and oil infrastructure in the Niger Delta area, which slashed daily production to 1.3 million barrels per day at its height.  An amnesty deal in 2009 brought peace to the region.

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. 

ADDAX - Provision of Diving Services

ADDAX Petroleum development Nigeria Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of diving services for their offshore facilities. The proposed contract will commence in the fourth quarter of 2014. The scope of service covers the provision of all equipment/tools and personnel necessary for diving services. Only tenderers who are registered with the NJQS product/Category Diving services (3.05.09& 3.06.03) shall be invited to submit technical bids. The closing date for this opportunity is 21st February 2014.

ADDAX- Provision of Security Services

ADDAX Petroleum development Nigeria Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of security services at the company's facilities. The proposed contract will commence in the second quarter of 2014. The scope of service covers the provision of Security Services in companies Lagos and Abuja facilities. Only tenderers who are registered with the NJQS product/category security services (3.99.05) shall be invited to submit technical bids. The closing date for this opportunity is 21st February 2014.

Chevron- Provision of Fast Supply Vessels

Chevron Nigeria Limited invites interested and registered Nigerian companies to respond to the opportunity for the provision of fast supply vessels in support of their offshore oil and gas production operations. The scope of service covers the provision of fast supply vessels in support of Chevron Nigeria/mid Africa operations. Only tenderers who are registered with the NJQS product/category supply vessels 3.08.17 shall be invited to submit technical bids. The closing date for this opportunity is 21st February 2014.

SPDC - Provision of Quality Assurance /Quality Control and Inspection Services

Shell Petroleum Development Company invites interested and registered Nigerian companies to respond to the opportunity for the provision of quality assurance/quality control and inspection services. The proposed contract will commence in the third quarter of 2014. The scope of service covers the provision of suitably qualified / certified personnel for quality control and inspection services, covering mechanical, electrical, instrumentation, civil and HSE, Onshore and Offshore. Only tenderers who are registered with the NJQS product/category - 3.07: inspection / control and testing services (3.07.01, 3.07.02, 3.07.03, 3.07.04, 3.07.05, 3.07.06, 3.07.07, 3.07.08, 3.07.10, 3.07.12, 3.07.98, 3.07.99) shall be invited to submit technical bids. The closing date for this opportunity is 25th February 2014.

Addax - Provision of Tubular Inspection Services at Onne

Addax Petroleum Development (Nigeria) Limited invites interested and pre-qualified contractors to respond to this tender opportunity for the provision of offshore supply containers and cargo baskets for Addax. The contract is proposed to commence in Q3, 2014 and continue for the duration of 3 years with Addax having the sole option to extend for an additional year. Only tenderers who are registered with NJQS Product/category shall be invited to submit technical bids.

Addax - Provision of Offshore Supply Containers and Cargo Baskets

Addax Petroleum Development (Nigeria) Limited invites interested and pre-qualified contractors to respond to this tender opportunity for the provision of offshore supply containers and cargo baskets. The contract is proposed to commence in Q3, 2014 and continue for the duration of 3 years with Addax having the sole option to extend for an additional year. Only tenderers who are registered with JNQS Product/category 3.08.05 shall be invited to submit technical bids. The closing date is 27th February 2014.

NNPC - Provision of Pollution Control Centers Facilities

Nigerian National Petroleum Corporation (NNPC) invites interested and registered Nigerian companies to respond to the opportunity for the upgrading of pollution control centers facilities at the company's Port Harcourt, Mosimi and Atlas-Cove locations. The scope of service covers the construction of perimeter fence measuring 160m long by 3.10m high from the base. All companies wishing to express their interest to bid shall submit relevant document for prequalification in compliance with the provisions of the Public Procurement Act 2007 and Bureau of Public Procurement guidelines. Only successful companies shall be invited to collect tender documents upon payment of a non-refundable fee of twenty thousand naira (N20, 000.00). The documents should be addressed to the secretary, E&T Tenders Board, NNPC. The closing date for this publication is 4 weeks from the date of publication, Monday, February 3, 2014.

NNPC - Invitation to Pre-Qualify for the Hire of One 1,500 HP / 10K Land Workover Rig

As part of its programme for 2015-16, Nigerian Petroleum Development Company (NPDC) intends to carry out a number of workovers, re-completions and test wells in her assets on land. The estimated duration for the drilling campaign is 2 years with an option to extend for a further 1 year. Anticipated work window is Q1 2015 - Q4 2016. Registration in the NipeX Joint Qualification System (NJQS) is a pre-condition of the pre-qualification process. Pre-qualification criteria are available from the Management Tender Committee (MTC), NPDC. The closing date for this publication is 4 weeks from the date of publication, Thursday, February 6, 2014. 

Oil Spill Conference Nigeria 2014

Accra, Ghana

April 23-25 2014

www.oilspillconferenceng.com 

Oil Technology Conference

Houston, USA

5-8 May

www.otcnet.org