 LATEST MAGAZINE ISSUE
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Welcome to our 100th issue. I would like to extend my thanks to everyone that has made it possible for us to reach our 100th edition, most of all our readers, in particular those that stuck with us from the maiden edition. I thank you all from the bottom of my heart. I hope you will stick with us through the next phase of our journey.
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.
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NOGINTELLIGENCE CELEBRATES
CENTENARY ISSUE
We Are 100 Issues Old Today!
NOGintelligence is proud to announce the publication of the 100th edition of its electronic newsletter. The very first issue was published on the 18th of May 2012 and since then NOGintelligence has been publishing weekly news updates. Just over 2 years later, we have published nearly 1,500 news stories on the Nigerian oil and gas industry, the newsletter going out every week to our mailing list of thousands of top echelon oil and gas executives, and other professionals drawn from the oil services, exploration and production, trading, banking, financial advisory, insurance, legal, regulatory and non-governmental communities.
Our media partnership with the Guardian (Oil and Gas Weekly column on Mondays) enables us to reach many more thousands in print, making NOGintelligence the most widely read source of news and information on the Nigerian oil and gas industry.
Following the runaway success of the newsletter, we published the maiden edition of our print magazine, also called NOGintelligence, in May 2013. The magazine is designed to focus on extended articles and feature-length stories and interviews about the industry. Each issue has a special focus on a specific area of the industry. Among the areas of focus, which are planned for in the near future are: Technology, Women in Oil and Gas, Maritime, Financial, Upstream, Legal, Downstream, CSR, Environment and Oil Services. NOGintelligence magazine is also published online and is available to view in page turning PDF format or to download from our www.NOGintelligence.com.
Be sure to visit our website, www.NOGintelligence.com, which holds over 1,500 stories on oil and gas issues making it a valuable research tool on the Nigerian oil and gas industry. Our website enables visitors to enter a search term and get all the news stories on the particular term which can be a company, an oil block or an issue that has been in the news.
We would like to thank all those who have contributed immensely to the growing success of NOGintelligence, from our dedicated team of writers and researchers, advisers, mentors, friends, readers and most especially our magazine advertisers who make it possible for us to continue providing you with quality dedicated news and information on the Nigerian oil and gas industry. We also thank the publishers of The Guardian for their support and partnership.
Be sure to visit our website www.NOGintelligence.com and scroll down to "Join our mailing list" if you want to be on the mailing list and to see back editions of NOGintelligence newsletter scroll down to "Newsletter Archive." PDF versions of our print magazine are also available via our website.
Thank you all for your continued support of our effort to disseminate valuable information on the Nigerian oil and gas industry to the industry and the nation.
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Nigeria Tops World Oil Theft League Table
A report confirms that Nigeria tops the oil theft league table for the world. With an estimated 400,000 barrels of oil lost to oil theft every day, Nigeria is ahead of Mexico, Iraq, Russia and Indonesia, which came second to fifth respectively according to Oilprice.com. The oil price website points out that the staggering level of theft in Nigeria (which equates to about $1.7 billion monthly losses) represents about 7.7 per cent of its GDP.
Shell has been very outspoken against oil theft, which, together with the Nigerian Liquefied Natural Gas (NLNG) blockade last year, cost its parent company, Royal Dutch Shell, $1 billion in profits for last year.
In spite of the worldwide condemnation of the staggering level of oil theft in Nigeria, the government appears not to have either the will or the power to stop the illegal operations. It is a hard battle to fight given the kinds of returns the oil thieves are getting from their illicit activities. With one group admitting that it was netting profits of $7,000 per day, it is no wonder that the ill equipped Joint Task Force, Nigeria's frontline agency tasked with curbing oil theft, is nearly powerless to make any impactful gains in the battle with oil thieves. Some members of the JTF have even been accused of being in cahoots with the "princes and principalities" - as Shell Country Chair, Mutiu Sumonu has described them - who control the oil theft activities.
All the foreign assistance that has been promised, including from the G8, the European Union, United Kingdom and United States of America, is yet to happen as Nigeria grapples helplessly with the seemingly insurmountable problem.
Oil theft in Mexico is said to have reached between 5,000 and 10,000 barrels per day after growing 30 per cent annually for a few years. OilPrice.com admits that in Iraq, there is difficulty substantiating the reports of thousands of barrels taken across the border from the refineries for sale illegally in Iran and Syria. Russia meanwhile is said to be vulnerable in the Transneft 50,000 kilometres pipeline network. Some $63 million dollars worth of stolen oil was reported to have been stolen from one pipeline system and 27,000 tons of oil in 2009 from another. For Indonesia, the problem is around 2,000 to 3,000 barrels per day.
All of these oil theft losses pale into insignificance when compared with estimates of daily losses of 400,000 in Nigeria.
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Oando Plc Increases Stake in OER to 93.6%
As Oando races towards completion of its acquisition of the ConocoPhillips Nigerian business, it has been doing some internal housekeeping. Oando Plc has announced that it is converting the amount of $218.9 million outstanding to it by its subsidiary, the Toronto Stock Exchange (TSX) listed Oando Energy Resources (OER) into equity. The amount is made up of $168 million, interest in the approximate amount of $2.9 million and fees in the amount of $48 million. This amount was outstanding under the $1.2 billion facility granted by Oando Plc to OER towards the ConocoPhillips acquisition. OER still has approximately $431 million from the principal under the facility available to be drawn.
Prior to the conversion of the loan to equity, Oando Plc owned, and exercised control or direction over, 527,887,867 common shares, representing approximately 92.0% of the issued and outstanding common shares. As a result of the conversion, Oando Plc currently beneficially owns, or exercises control or direction over, 677,963,723 common shares, representing approximately 93.7% of the issued and outstanding common shares.
OER is the new trading name of Exile Resources Incorporated which Oando acquired after a reverse takeover, which was followed by listing on the TSX.
After a nail-bitingly expensive wait for Ministerial consent to the $1.65 billion acquisition which has only just been received, Oando says it now intends to complete the acquisition by the end of July. The wait for consent has cost Oando dearly as it has had to pay ConocoPhillips for extensions to the final close deadline for completion of the acquisition.
Completion of the ConocoPhillips Nigerian business acquisition will make dually (Johannesburg and Nigeria) listed Oando the indigenous company with the second largest production, after recently dually (London and Nigeria) listed Seplat. Although Oando may have been hoping to be number one, with about 50,000 barrels per day (bpd) following completion of the acquisition, it has been pipped to the post by Seplat, with their announcement that they are now pumping 60,000 (bpd) and intend to make new acquisitions following their listing which has given them a $500 million war chest.
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OPEC Daily Basket Price Stood at $105.16 a Barrel Thursday, 10 July 2014
The price of OPEC basket of twelve crudes stood at $105.16 a barrel on Thursday, compared with $105.49 the previous day according to OPEC Secretariat calculations. The drop in price continues a third consecutive week of losses with nearly $4 dollars lost in 3 weeks of trading.
The new Organisation of Petroleum Exporting Countries (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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Senate Adopts Committee Report Finding of $49 Billion "Unremitted" Not Missing
Senate has adopted the report of its Finance Committee on the sums of $49 billion and $20 billion alleged by the former governor of the Central Bank of Nigeria (CBN) Mallam Sanusi Lamido Sanusi, now the Emir of Kano to be missing. Sanusi blew the whistle when he stated in a letter to the President, which later became public, that $49 billion in revenue, which the Nigerian National Petroleum Corporation (NNPC) should have remitted into the Federation Account was missing. He later made further allegations about another $20 billion.
The Finance Committee, led by Senator Ahmed Makarfi, concluded in its Report that the sums, though un-remitted, were not in fact missing. Clarifying the conclusions of the Committee, Senate President, David Marks, said the sums were "funds yet to be remitted or funds yet accounted for."
NNPC was however ordered to pay the sum of $927 million to the Federation Account, made up as follows:
- $447 million: Gross Liftings of NNPC on behalf of NPDC from January 2012 to July 2013 was $6.815 billion. Government share of revenue to the Federation Account was $2,175,635,436. The Accountant General of the Federation (AGF) confirmed the payment to the Federation Account by NPDC as US$1,727,817,552. Therefore, NPDC should remit to the Federation Account the sum of US$447,817,884 being the balance of Royalty and Petroleum Profit Tax, PPT, with interest.
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- $218 million: Gross lifting under the Third Party Financing was US$2,430,750,973 out of which the share for the Federation Account was US$1,588,242,004. The AGF confirmed and gave documentary evidence showing the sum of US$1,370,172,650.36 was remitted to the Federation Account. Therefore, NNPC should remit the balance of US$218,069,354.32 to the Federation Account.
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- $262 million: being expenses it could not satisfactorily defend in respect of Holding Strategic Stock Reserve; Pipeline Maintenance and Management Cost and Capital Expenditure. Therefore NNPC should refund and remit to the Federation Account the sum of US$262 million.
Regarding NNPC's claims for the amount it spent on subsidy for petroleum products, the Report said:
"We have noticed that no proposal is made in 2014 Appropriation Bill for subsidy on Kerosene, DPK, and that for PMS also looks inadequate. Therefore, only what is appropriated should be spent by the executive. The President should prepare and present to the National Assembly supplementary budget to cover the expenditure in the sum of N90.693 billion ($585 million) for PMS subsidy for 2012 and N685.910 billion ($4.430 billion) for kerosene subsidy expended without appropriation by the National Assembly in 2012 and 2013. The Senate should, however, note that the proportionate expenditure (January 2012 to July 2013) was N813.8 billion ($5.254 billion) for PMS, while DPK was N486.57 billion ($3.512 billion)."
The Committee said that it is for the National Assembly to approve or not approve such request or take any other measures it deems necessary. It also added that NNPC should not pay operational expenditures direct from the Federation funds without appropriation by the National Assembly.
NNPC however came in for scathing criticism from the Committee over its "poor record keeping and nonchalant work attitude by not rendering returns on subsidy claims on monthly basis from January 2012 to date," which the Committee said was what contributed largely to the creation of the problem.
Senate said it is awaiting the result of the forensic audit of NNPC ordered by the government currently being undertaken by the Auditor General and PriceWaterhouseCoopers (PWC). While the Minister of Petroleum Resources and NNPC appeared to have been largely exonerated by the Senate Committee's report, it remains to be seen whether the forensic audit will confirm the conclusions of the Report.
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DPR Commences Electronic Issuance of Oil and Gas Industry Service Permit
The Department of Petroleum Resources (DPR) has announced that it is to commence electronic processing and issuance of statutory Oil and Gas Industry Service Permits (OGISP) in its quest to simplify its process for "more enhanced service delivery." As a result, it has advised that applications for new permits and renewal of expiring permits be submitted online.
Companies seeking to render services in the oil and gas industry are required to get the OGISP, which is normally issued in three categories: General, Major and Specialised. The new online system requires applicants to log onto the DPR website http://dprnigeria.org.ng (and not ww.dpr.gov.ng as stated in the DPR press release) to create a company account. They can complete the requisite application forms online and the application fees of N500, N2,500 and N7,500 for the different categories of services can also be paid online using Verve, Mastercard and Visa credit and debit cards, as well as Quickteller and other payment platforms.
DPR, in the statement, stressed that it had taken necessary security precautions to safeguard the information to be submitted online. The Head of Public Affairs, DPR, Ms Dorothy Bassey said that the online issuance of the OGISP is the beginning of "digitalisation of our entire licensing and permitting system geared to remove bottlenecks and ensure delivery of improved quality service."
Offshore Safety Permits are still required for companies wishing to provide offshore services and will be required before application for the OGISP.
Note: at the time of going to press, while there is a link on the home page of the DPR website saying: "Introducing Oil and Gas Industry Service Permits," there was however no link from that page to the appropriate page for completing the application. We hope that by the date of publication, DPR would have rectified this and put the appropriate information and links on the homepage of their website for those who want to begin using the system immediately.
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Kalaba Community Reports New Spill from Agip Pipeline
The Kalaba Community in Bayelsa State reports that there has been a new spill from an Agip pipeline. The spill has not been confirmed by Agip, however, Bayelsa Co-ordinator of environmental action group Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), Alagoa Morris said he had seen the spill, which he said was spewing crude oil and spreading within the environment. He has called on Agip to take prompt action to stop further damage from the spill. He also called on the regulatory agencies to monitor remedial action being taken by the Agip.
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Mobil: Recent Qua Iboe Spill Was 12,000 Barrels
Whilst a community in Akwa Ibom waits for the Department of Petroleum Resources (DPR) to release its finding on a Mobil Producing oil spill in Akwa Ibom State, the international oil company (IOC) Mobil, has released a statement to quash rumours circulating about the incident.
In an effort to forestall agitation by the community, the company has moved to quash rumours circulating in the communities that some 600,000 barrels of oil were spilt as a result. Spokesperson for Mobil, Ozemoya Okordion said in statement:
"The firm Mobil Producing Nigeria unlimited, MPN, operator of the NNPC/MPN joint venture, confirms a liquid release from our Qua Iboe terminal facility on Sunday June 29, 2014 following serious weather conditions and lightening strikes over the area in the weekend. We activated our emergency response systems and contained the release. Subject to a detailed site inspection, our current estimate is that approximately 12 barrels of oil was released during the incident."
Following the spill, which occurred on the 29th of June, the communities around the Qua Iboe terminal facility have continued to await the determination of the DPR in order to decide what action to take against the company.
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Petroleum Club Urged to Become Voice of Oil Industry
The Petroleum Club held the June edition of its quarterly meeting, the first under the incoming newly elected Chairman of the Club, Otunba Funso Lawal. The event got underway promptly in a business-like manner with the gathered crowd eagerly anticipating the presence of the Director of the Department of Petroleum Resources (DPR), George Osahon, who had been billed to speak on marginal fields. Unfortunately, the DPR director was called away at the last minute but was said to have put together the slides himself for the presentation which was delivered by Mr Alfred Ohene, the Deputy Director, Engineering and Standards at DPR.
Mr Osahon's presentation was entitled, "The Indigenous Operatorship Programme - the Good, the Bad and the Ugly" and subtitled "Growth of Independents: Successes, Challenges and the Future." Mr Osahon had chosen to broaden out the presentation from the narrow confines of marginal fields to take in indigenous operators who he referred to in the presentation as independents.
Mr Osahon took the audience on a journey from the early days of indigenous operators to the present, showing how the indigenous ownership landscape had changed over the years with slides illustrating the positions in 1993, 1998, 2002 and 2014. The current position is that independents currently control about 40-50 per cent of the nation's crude oil reserves of about 37 billion barrels while, they control only about 9-10 per cent of daily production. The dismal showing he explained was due to a number of reasons including operational issues with their partners. Top of that list, he said was Crude Handling Agreement (CHA) issues.
Downstream, the picture he painted was quite different. Osahon said that since independent downstream operation commenced in 1982, that sector has continued to grow in leaps and bounds. Today, he said, in spite of the issues and challenges that abound, independent marketers control the downstream sector of the industry. In terms of retail outlet distribution, the majors control only 9 per cent, although they control 59 per cent of storage capacity.
The position of independent marketers, said Osahon, offered a ray of hope for independents in the upstream sector. The future he said is likely to witness a growth path similar to the downstream. He pointed out that the financial services sector of the economy is reacting more positively to upstream investment, something that is expected to encourage more mergers and acquisitions among independents including marginal field operators.
To move forward to the next level, independents, Osahon added, would have no choice but to work together especially in the area of CHAs and terminal operation/establishment to minimize crude allocation and custody transfer challenges.
Reacting to the DPR Director's presentation, several speakers from the Committee and the audience, urged the Club to come together to form a pressure group for the industry that can bring pressure to bear on the majors to ease CHA issues. The Club also vowed to work together with the media and the organized private sector to put pressure on the National Assembly to pass the Petroleum Industry Bill which speaker after speaker acknowledged to be stunting investment in the oil and gas industry. By working together the Petroleum Club, they urged, should be the voice of the industry.
For more information about joining the Petroleum Club, visit the website www.pclagos.com.
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NAPE Invites Nominations for 2014 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
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.
Shell - Operation and Maintenance of Light Vehicles
The closing date for applications is 31 July 2014. Clean Associates Ltd - Purchase of Used Boats The closing date for submission of bids is 10 August 2014.
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LATEST EVENTS
Federal University of Petroleum Resources, Effurun
Launching of Endowment Fund
Abuja International Conference Centre, Nigeria
16 July, 2014 at 6pm
Lagos Oil Club July Edition
Oriental Hotel, Victoria Island, Lagos
28th July 2014
4th Downstream Oil and Gas Expo
Abuja, Nigeria
26-28 August 2014
www.oilandgasexpos.com
Gas Africa 2014
Gauteng, South Africa
26-27 August 2014
http://www.mcnaughtonevents.co.za
3rd International Downstream Conference/Exhibition on Gas, Petroleum Refining, Petrochemicals and Fertilisers
Port Harcourt, Nigeria
27th -28th August 2014
www.cgrpng.org
10th annual Global Local Content Summit
London, UK 22- 25 September 2014 http://www.localcontentsummit.com/
2nd Africa Oil & Gas, Finance and Investment Forum
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.
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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