 LATEST MAGAZINE ISSUE
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Welcome to our 99th issue.
Our next magazine issue will focus on Technology. Do make sure you get in touch if you have any new technology for the Nigerian oil and gas industry as we will be devoting extensive editorial space to coverage of technology that is available in-country.
Should you want more dedicated coverage then email us as soon as possible to secure your space and reach thousands of industry executives who want to know about your product or service. Do get in touch quickly as advertising space is always highly sought after in our magazines. We have a limited number of spaces and once they're gone they're gone.We now have a section on our website for listing of Training. There is no payment for listing in our Training section if you are the organiser of the training. Please email info@NOGintelligence.com to request more information on listing your training programme.
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Final Close of Oando Acquisition of ConocoPhillips Assets Extended Till 31 July
Following the announcement that it now has Ministerial Consent for its ambitious acquisition of ConocoPhillips Nigerian assets, Oando Energy Resources (OER), the upstream arm of Oando, confirmed in a statement that it has now agreed a longstop date of 31st July for the final close of the acquisition. Oando said in the statement that: "The parties extended the outside closing date for completion of the ConocoPhillips Acquisition to enable them to finalise activities required to complete the transaction."
Ministerial Consent to the acquisition has been delaying closure of the transaction for many months, costing Oando about $10 million a month for the extensions. There has been no confirmation of the reason for the delay in obtaining Ministerial Consent as required under the Petroleum Act, but all parties to the transaction are simply ecstatic that they can now move forward and complete the transaction.
Oando won the bid for the $1.65 billion acquisition after ConocoPhillips decided to pull out of Nigeria. What was unusual about the transaction however was the realisation, as the close date came and went, that it was for Oando to obtain Ministerial Consent to the transaction. It is usual in contracts for farm-in arrangements in Nigeria that the agreements are not effective until Ministerial Consent is obtained. That then makes it incumbent on the party disposing of the assets to obtain the consent of the Minister to the assignment of its interests as is required under the Act.
Analysts commenting on the deal share the opinion that Ministerial Consent to the transaction should not have been so difficult to obtain. In the first instance, Oando's position as a big player downstream should have given it the clout to obtain consent easily. In addition, even though some feel the assets were overpriced, they nonetheless feel that this acquisition is testament to the drive for Nigerian content in the oil and gas industry as this is the largest indigenous acquisition of international oil company (IOC) assets so far. There are also spin offs for the industry, not least the financial institutions that were part of the deal. At one stage, it was dubbed the deal that was too big to fail.
As the game changing acquisition nears its close, the relief at Oando and in financial circles is palpable following the receipt of the letter from the Director of the Department of Petroleum Resources conveying the grant of Ministerial Consent to Oando. Everything is now in gear for the final close expected to take place before the end of July.
In anticipation of the long awaited consent, Oando had increased its deposit with ConocoPhillips by $25 million on May 30, 2014, bringing to $550 million the deposit it has paid to ConocoPhillips for this acquisition to date.
In addition, OER extended the availability period of the reserves based lending facility of $450 million it had secured in part finance of the acquisition. The senior secured facility agreement, which was arranged by a group of international banks including Standard Chartered Bank (acting as Facility Agent and Security Agent), BNP Paribas and Standard Bank of South Africa Limited, has now been extended to August 31, 2014, giving OER ample time to complete the deal before the expiry of the facility agreement. The facility has a tenor of 5.5 years, amortising quarterly with an annual interest rate of LIBOR plus 8.5%.
In another development, as Oando prepares to take the upstream world by storm, OER shareholders, in a show of faith, have re-elected its board of directors. Leading OER to its next level will be the board of directors consisting of Wale Tinubu, Christopher Harrop, Bill Watson, Omamofe Boyo, John Orange and Pade Durotoye who is also the CEO of the company.
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OPEC Daily Basket Price Stood at $107.17 a Barrel Thursday, 3 July 2014
The price of OPEC basket of twelve crudes stood at $107.17 a barrel on Thursday, compared with $108.35 the previous day, according to OPEC Secretariat calculations. Oil prices have been dropping steadily over the last week as nerves calmed over the unstable political situation in Iraq and attempts by insurgent group ISIS to take over oil installations. Prices peaked on the 20th of June at $110.48 but started to come down after the OPEC Secretary General, Abdullah Al-Badry moved to quash rumours that Iraq production has declined as a result of the political situation in that country.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
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The Rise and Rise of Forte Oil Stocks
In its quest to attract oil companies to list, the Nigerian Stock Exchange (NSE) has ben extoling the virtues of Forte Oil. In a statement, the Head, Corporate Communications, NSE, Nwando Ajene, announced that Forte Oil has joined the rank of high-priced stocks, following the latest review of prices of stocks.
The review follows the introduction of a pilot programme for the NSE's new market structure. Under the programme, which is intended to deepen the market and improve liquidity, brokers no longer need to have a volume of 50,000 shares to move the price of high priced stocks up or down. They now need just 10,000 shares to do so. The programme is now permanent.
Explaining further, the statement said: "These high priced stocks are securities that have traded an average of N100 or more per share in four out of the last six months period."
The pilot programme commenced with nine stocks: Dangote Cement, Guinness Plc, Nestle Plc, Nigerian Breweries, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund and Total Plc. Lafarge Cement became the 10th stock on the programme. The strong debut showing of Seplat Petroleum Development Company took it straight in, as it was priced above N100.00 at the time of listing on the Exchange.
NSE stated: "With this development, Forte Oil Plc has now become the 12th stock on the programme."
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Finance Ministry Processing $275 Million Subsidy Claims
Amidst continued complains of the slow processing of subsidy claims by marketers, the Federal Ministry of Finance has announced that it is shortly to release another batch of payments to marketers. The Special Adviser to the Minister of Finance on Media, Paul Nwabuikwu, said that the Ministry is currently processing N45 billion ($275 million) worth of subsidy claims. The payment comes after the last batch of payments of N41 billion to 27 marketers in March 2014.
Nwabuikwu stated that payments have already been made to some marketers who had presented their letters of indemnity. The letters of indemnity are part of a new procedure that the Federal Government has instituted to ensure that it is not held liable in any dispute between the marketers and their banks. As a result, marketers submitting their subsidy claims are required to produce a letter of indemnity from their banks in addition to the other verification process that they have to go through before clearance for payment.
Last year, the Ministry of Finance said it had reduced the total subsidy bill by 56 per cent from N2.2 trillion in 2011 to N971 billion after the Ministry worked hard to clean up the process of subsidy payments following on from the Aig-Imoukhuede led committee which uncovered $6 billion worth of oil subsidy fraud.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, explained last year that the government had brought in new auditors and put in place more stringent checks and balances.
The claims are due to be paid to 25 companies, in alphabetical order: A-Z Petroleum Products, Acorn Petroleum, Aiteo Energy Resources, Ascon Oil and Gas Company, Avidor Oil and Gas Company, Conoil, Dee Jones Petroleum Gas, Dozzy Oil and Gas, Folawiyo Energy, Gulf Treasures, Hudson Petroleum, Hyde Energy, Ibafon Oil, Master Energy Oil and Gas, and Matrix Energy, Mobil Oil Nigeria, MRS Oil and Gas Company, Nepal Oil and Gas Service, and Nipco, Northwest Petroleum and Gas, Oando, Obat Oil and Gas Services, Rainoil, Shorelink Oil and Gas Services, Techo Oil, Tempogate Oil and Energy Company and Total Nigeria.
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SEC settles Customs Bribery Trial Against Noble Nigeria Executives
Anti-corruption campaigners are wringing their hands in frustration after learning that two executives of the Nigerian subsidiary of international offshore drilling contractor, Noble, have been able to settle the Securities Exchange Commission's (SEC) bribery suit against them. The SEC filed the enforcement action against Mark Jackson, former Chief Executive officer of Noble Drilling (Nigeria) Ltd and James Ruehlen, a director of the company over the companies activities in Nigeria.
In the action, the SEC alleged that Noble and Noble-Nigeria authorized a customs agent to pay bribes to Nigerian government officials in order to obtain false documentation which Noble-Nigeria needed to obtain Temporary Import Permits. In addition, the SEC alleged that Noble and Noble-Nigeria, through a customs agent, paid bribes to Nigerian government officials for Temporary Import Permit (TIP) extensions.
The background to the case is that between January 2003 and May 2007, Noble-Nigeria had up to seven drilling rigs that operated offshore in Nigeria. To operate drilling rigs offshore in Nigeria, the Nigerian laws require the owner of the rig to either pay permanent import duties or obtain a TIP. TIPs allow drilling rigs to operate in Nigerian waters without payment of permanent import duties.
Under Nigerian law, the Nigeria Customs Service (NCS) grants TIPs for rigs that will be in the country for only one year. NCS may, in its discretion, grant up to three six-month extensions to a TIP. Upon the expiration of a TIP and any TIP extensions, NCS requires the rig to be exported from Nigeria. If the owner of the rig wishes to continue using the rig after the expiration of a TIP and any applicable extensions, he can either convert the rig to permanent import status and pay the appropriate permanent import duties, or he can export the rig and seek a new rig TIP to re-import the rig. In order to obtain a TIP or an extension, the rig owner must submit an application through a licensed customs agent. NCS does not deal directly with rig owners.
The SEC alleges that Noble's standard procedure in applying for TIPs and TIP extensions would involve obtaining a price proposal from a customs agent detailing the costs associated with obtaining the new TIP or extension. The proposals would indicate those charges that did not have any supporting documentation by labelling them as "special handling" or "procurement." Noble's FCPA policy required such unreceipted payments to foreign government officials to be pre-approved in writing by the CFO. Once the CFO approved the unreceipted payments, the customs agent would be authorized to pay the Nigerian government officials in accordance with the price proposal. The customs agent would then submit an invoice to Noble, reimbursing him for the money paid to the Nigerian government officials.
Bringing the action, the SEC charged Jackson and Ruehlen with multiple violations of the Foreign Corrupt Practices Act (FCPA), and other federal securities laws in connection with actions they allegedly took to obtain TIPs and TIP extensions in order to avoid paying permanent import duties. These include, specifically, the approval of numerous "special handling" and "procurement" payments to government officials to obtain false paperwork necessary to secure TIPs or to obtain discretionary TIP extensions. In addition, he SEC alleges that Jackson and Ruehlen allowed these payments repeatedly to be posted on Noble's books as legitimate operating expenses.
The SEC alleges that a total of 11 illicit permits and 29 extensions were obtained and that bribes of hundreds of thousands of dollars were paid to customs officials and that both men participated in the scheme.
The matter has been rumbling on for a few years. In 2010, Noble agreed to make a payment of $8 million to resolve the FCPA related civil and criminal charges in the case. Then in 2011 Noble agreed to pay $2.5 million as part of a non-prosecution agreement with the Nigerian government.
Now, only a few days before jury selection in the trial, which was due to begin in a federal court in Houston, the case against the two executives has been settled, meaning that they will not face trial in the civil suit brought by the SEC against them and they will not pay a financial penalty either. A judge had ruled earlier in the case that any alleged FCPA violations before 24 February 2007 was time barred and therefore only infringements after that date would be allowed. This would have considerably weakened the SEC's case, paving the way for a deal, since the alleged offences covered the period until May 2007 when the rigs were in the country.
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 77 offshore drilling units (including one ultra-deepwater drillships and three high-specification jackup drilling rigs currently under construction), located worldwide.
In its ethical code, Noble's CEO David W. Williams, says: "Maintaining our high ethical standards is essential in order to preserve Noble's nine decade-long heritage, strong reputation and the trust of our business partners." Continuing, he says:"The Code is a reference for the Noble policies, processes, tools and resources available to support you in acting with honesty and integrity and following all laws, rules and regulations that apply to you and Noble."It seems the company, which celebrated its 93rd year in 2014 has not been able to live up to its own ethical code.
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Shell: Nigeria Lost 63.51 Million Barrels of Oil in 2013
Mutiu Sumonu, Managing Director of Shell Petroleum Development Company (SPDC) and Country Chair of Shell Companies in Nigeria, has revealed details of losses he says Nigeria is continuing to sustain from oil spillage due to oil theft. Sumonu said Nigeria's loss from crude oil theft is in the region of 174,000 barrels per day, amounting in 2013, to a total loss of around 63.51 million barrels of crude. Shut ins and force majeure declarations as a result of damage to pipelines has also cost the country significant revenue amounting to about $5 billion.
Mr Sumonu's revelation comes just days after the London High Court judgement in which it was held that Shell, as a pipeline operator, could be liable under the Nigerian Oil Pipelines Act for oil spills from its pipelines. This liability, could in certain rare circumstances, extend to spills due to pipeline sabotage.
Going into more detail about SPDC spills, Sumonu said that the company's loss from spill incidents has climbed from 137 in 2012 to 157 in 2013, resulting in a daily loss of 32,000 barrels of oil, driving daily production figures down to 693,000 barrels.
Given Shell's position as the largest producer in Nigeria, Sumonu has been very outspoken about the incident of oil theft blaming "princes and principalities" for the seemingly insurmountable problem. He is advising the Federal Government to constitute committees that can work together with the government and the industry to find lasting solutions to oil theft, which analysts say is now at a grand scale that is unprecedented in the whole world.
Shell has been at loggerheads with environmentalists for some time over spill incidents. Whilst Shell blames most of the spills and losses on vandals, environmental campaigners say that Shell and other international oil companies (IOCs) are using pipelines and equipment that are out of date, making the pipelines much more vulnerable. Many of the pipelines, they say, should have been de-commissioned by now.
Whoever is right, the fact remains that oil spills cause environmental damage where they occur and that efficient and effective clean up is crucial to prevent lasting damage. The United Nations Environment Programme (UNEP) has estimated that $1 billion will be needed to restore Ogoni land which has suffered catastrophic environmental degradation as a result of spills. Shell says it is committed to the restoration programme recommended by UNEP.
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Ogidibgen Gas City Host Communities Agree to Work Together
After community squabbling threatened to derail the $16 billion Ogidigben Gas City project, the host communities have finally decided to work together to ensure the successful completion of the project. The pledge comes after a town hall meeting in which the Delta State governor, Dr. Emmanuel Uduaghan pleaded with the community to stop the acrimony. Dr Uduaghan has put together a committee headed by his Deputy, Prof. Amos Utuama (SAN), to work with the community to integrate the resolutions reached by the host communities at the meeting.
The Ogidigben Gas City project, an integral part of the Nigeria Gas Master Plan, is a public private initiative driven by the Federal Government. It is a greenfield development built around a major central gas processing facility that will produce pipeline gas for the domestic gas market, especially for power generation, and supply gas to an industrial complex within the Gas Revolution Industrial City that will include world-scale fertilizer and petrochemical plants. The gas processing will have an initial capacity of 500-800 MM scf/d but will ultimately be able to process 2Bscf/d of natural gas.
The project was initially to be located at Koko but was moved because of the unsuitability of the port for big ships needing to access the port for fertilizer distribution from the plant. Dredging of the port at a cost of $1 billion was not feasible especially since there was no way of knowing when the silt would accumulate again. As a result, Ogidigben was chosen for a number of reasons.
The location of the project at Ogidigben on the Escravos River, opposite Chevron's Escravos facilities, gives Ogidigben several advantages. Being close to ocean, gives easy access to shipping for export and international markets. In addition, its riverside location makes inland transportation easy. Also, it is close to the Escravos-Lagos Pipeline System, which makes the delivery of piped gas to the western and central areas of the country much easier.
The Delta State government has given the project a 2,700 hectares site and clearing of the land by Julius Berger, the main contractors has already begun and is expected to be completed by the end of August.
The Gas City will be developed in phases. In the first phase, it will comprise key anchor projects like the CPF, a 150 MW independent power plant, IPP, a 2.6 Mtpa fertilizer plant and infrastructure, including roads, a new port, residential and commercial accommodation and public facilities. Later phases will see the expansion of the CPF, addition of major petrochemical facility and additional gas-based, secondary and service industries.
The Gas Revolution Industrial City is the first industrial complex to be developed under the Gas Revolution Agenda.
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Invitation for Nominees for 2014 NAPE Awards
The Executive Committee of the Nigerian Association of Petroleum Explorationists (NAPE) invites nominations for the following awards to be given by the Association at the 2014 International Annual Conference and Exhibition on November 12, 2014 at Eko Hotel, Lagos. The awards are:
Aret Adams Award - named after the late Chief Aret Adams and his commitment to excellence, this is the highest award bestowed by NAPE
Fellowship Award - this award honours NAPA members who have distinguished themselves by their long term service and devotion to the science and profession of petroleum geology and to NAPE.
Honorary Award - honours non-members who by their profession, position/office, career or business have had a significant and positive impact on the affairs of NAPE and the Nigerian oil and gas industry at large. He or she does not have to be a professional in the oil and gas industry.
NOELA Award - the NAPE outstanding earth science lecturer award honours NAPE members who, through active leadership and scholarly endeavours over a significant period of time have made outstanding contributions to earth sciences and helped to foster students' lifelong learning and success.
Visit www.nape.org.ng for further details.
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LATEST TENDERS
Total - Provision of Routine Works Services
Closing date: 27th June 2014.
Addax - Provision of Offshore Scaffolding Equipment & Personnel Closing date: 30th June 2014.
NNPC - Completion of Multi-purpose Hall The closing date for this opportunity is 30th June 2014. NNPC - Request for Expression of Interest for the Provision of Consultancy Services for the Valuation of NNPC Movable Assets (Office Content) Expressions of Interests must be received no later than 12 noon on 7th July 2014. NNPC - Dredging, Sand Filling and Land Reclamation for the GRIP Project at Ogidigben Completion of Pre Qualification Questionnaire must be received no later than 12 noon on 11 July 2014. Petroleum Equalisation Fund (Management) Board - Procurement of Kitchen Equipment The closing date for submission of bids is 11am Tuesday 15th July 2014. SPDC - Provision of Slick-line (Well Intervention) Services The closing date for this opportunity is 16th July 2014. NAOC - Hire of Hydraulic Workover Unit The closing date for this opportunity is 16th July. NPDC - Facilities Maintenance Services (Flow Station Painting) in OML 30 The closing date for this opportunity is 15.30 hours on 21 July 2014. NNPC - Provision of Lubricant Warehouse for NNPC Retail Ltd The closing date for this opportunity is 21st of July. Total - Provision of Medium Size Helicopter Charter Services - Contract Number DW00000754 The closing date for this opportunity is 22nd of July. Total - Provision of Large Size Helicopter Charter Services - Contract Number DW00000770 The closing date for this opportunity is 22nd of July. SNEPCo - Provision of All Risks Construction Insurance Policy for Bonga Southwest/Aparo Field Development The closing date for this opportunity is 24th July 2014. Mobil - Bottom Hole Pressure and Temperature Survey Services The closing date for this opportunity is 25th July 2014.
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LATEST EVENTS
West Africa Gas Conference and Exhibition
Abuja, Nigeria
28 October 2014
www. http://west-africa-gas.com Nigeria Oil and Gas Trade and Investment Forum Onne, Nigeria 30-31 October 2014 http://www.nigeriaoilandgasinvest.com/ 21st Africa Oil Week Cape Town, South Africa 3-7 November 2014 http://www.petro21.com/events 32nd Annual International Conference of the Nigerian Association of Petroleum Explorationists Lagos, Nigeria 09-13 November 2014 www.nape.org.ng 15th World LNG Summit and Awards Paris, France 18 November 2014 www.world.cwclng.com Practical Nigerian Content Yenagoa, Nigeria 18-20 November 2014 http://www.ncipnc.com/ Mozambique Gas Summit Maputo, Mozambique 2-5 December 2014 http://www.mozambique-gas-summit.com/ Indigenous Oil & Gas SummitLagos, Nigeria 2 - 4 December 2104 http://www.afrikinternationalnetworks.com/Mozambique Gas Summit Maputo, Mozambique 02 December 2014 http://www.mozambique-gas-summit.com Nigeria Oil and Gas Conference and Exhibition Abuja, Nigeria 02 February 2015 www.cwcnog.com Ghana Summit Conference and Exhibition Accra, Ghana 21 April 2015 www.cwcghana.com Oil, Power and Mining Orlando, Florida, USA 12 - 14 August 2015 www.oilpowermining.com/ |
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LATEST JOBS:
West African Ventures (WAV) - Vessel Master
- Masters for passenger vessels.
The closing date for this opportunity is 15th of July.
Hyundai Heavy Industries Limited (HHI)
- 2 Production Managers
- 2 Quality Managers
- 2 HSE Managers
Website open from 4-10July
Chevron Nigeria Limited - Career Opportunities
- Completion Engineer (C063)
- Subsea Equipment Engineer (S125)
STAY SAFE:
NOGintelligence is aware of the circulation of false recruitment information. Do not fall prey to fraudulent job offers. Always check the company website for more details of the jobs. Most especially, do not make payment towards the processing of job applications. It is most likely a fake job offer if you are being asked to part with money. NOGintelligence does not post 3rd party job offers on its website unless through a vetted partner.
More details about these job opportunities are available on our website www.NOGintelligence.com
TRAINING:
Fundamentals of Gas Projects Management
Eko Hotel, Lagos, Nigeria
22nd and 23rd July 2014
Hassan.Shaba@nlng.com
Samsung Heavy Industries Intensive: Technical Training Programme
University of Port Harcourt Offshore Training Institute: M.Sc. Pipeline Engineering and M.Sc. Offshore Engineering
Centre for Petroleum Geosciences, University of Port Harcourt
Applications are invited for admission into the M.Sc Degree Programme in Petroleum Geoscience for the 2014/15 Session.
More details on our website |
Don't forget to join our mailing list if you haven't done so already. Remember, you won't have to look anywhere else for your weekly Nigerian oil industry updates, and it's free to join.
Best wishes 
Remi Aiyela
Editor-in-Chief
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