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Shell Appoints New Managing Director After Bodo Community $86 Million Settlement

 

Only days after agreeing an $86 million settlement with the Bodo Community, Shell has announced the retirement of Mutiu Sunmonu after 36 years of service with Shell. A new Managing Director of the Shell Petroleum Development Company of Nigeria Ltd (SPDC) and Country Chair of Shell Companies in Nigeria has been appointed to succeed him. Osagie Okunbor will combine the two positions as his predecessor Sunmonu did. He will become the third Nigerian to hold both posts after Basil Omiyi who was the first to hold both posts and then Mutiu Sunmonu.

 

Okunbor, who is from Edo State graduated with a Business Administration degree from the University of Benin. He is said to have over 28 years of industry experience and has worked in Nigeria, the UK and Brunei. He returned from his role at Shell's headquarters in the Hague, Netherlands where he was Senior Advisor in Shell's Upstream International Operated business, to take up his new role. It is thought that some of his time in the Hague had, in recent months, been spent grooming him for the role. Previously he held positions as Vice President, Human Resources for Shell's Upstream Business in Sub-Saharan Africa and Vice President, Infrastructure and Logistics Shell Nigeria.

 

Commenting on the appointment, Vice President Nigeria & Gabon, Shell Upstream, Markus Droll said: "We are delighted to see another Nigerian at the helm of affairs in Shell Nigeria. Mutiu has worked very hard over these years - managing production and setting a new agenda in dealing with communities, government and other key stakeholders. We're confident that Osagie will consolidate and build on the progress we have made in the past years."

 

News of the appointment is not surprising coming days after Shell reached a settlement with the Bodo community in the Niger Delta over two oil spills that devastated the community in 2008. In spite of the glowing reference for Sunmonu, internally, there is said to be some consternation over his handling of the dispute. The situation became a public relations disaster after Amnesty International revealed that during the legal process Shell was forced to reveal that it had been aware, at least since 2002, that most of its oil pipelines were old, and some sections contained "major risk and hazard." In a 2002 document Shell stated that outright replacement of pipelines was necessary because of extensive corrosion. 

 

The question was why had it taken 6 years to get to a settlement over the spills which Shell had long since accepted responsibility for although it later admitted that it had underestimated the amount of oil spilt in both cases. Mutiu Sunmonu was appointed as Managing Director of SPDC in January 2008 and in January 2010, he became Chairman of ShellCompanies in Nigeria. The spill and the subsequent settlement negotiations have all happened under his watch. Following the revelations in court, Sunmonu's head has, it seems, been offered for the chop, given the disastrous turn of events for Shell.

 

Meanwhile, Shell has come in for criticism from some quarters over the appointment of Okunbor to this important role. Shell is Nigeria's longest producing company and its largest producer. They say he lacks the technical expertise of his predecessors, which is required for this kind of role. Okunbor will have to navigate the difficult relationships with host communities, regulatory authorities and joint venture partners. He first task however will be to rebuild Shell's tattered image following the revelations from the Bodo community legal action.

 

Port Harcourt Refinery Soon to Get Uninterrupted Power Supply

 

Operations at the Port Harcourt Refining Company will soon get a boost following the announcement that an independent power plant to supply electricity to the facility is to be installed. The power plant will have three 25 megawatt gas turbines enabling it to supply uninterrupted power to the refinery. The plant will generate up to 72 megawatts of power, which exceeds the 23 megawatts requirement of the refinery. Following the installation, the refinery is expected to be able to operate continuously.

 

The revelation was made by the Group Executive Director, GED, Refining and Petrochemical of the Nigerian National Petroleum Corporation, Engr. Gregory Udoh. He also revealed that arrangements for the much delayed Turn Around Maintenance (TAM) for all the refineries were progressing and that about 60 per cent of the materials had already been delivered to the refineries located in Port Harcourt, Warri and Kaduna.

 

Commenting on the development, the Managing Director of the Port Harcourt Refining Company Limited, Engr. Bafred Enjugu, confirmed that the turn-around maintenance of the refinery was in progress and the facility was operating at optimal levels, with premium motor spirit, dual-purpose kerosene, automotive gas oil and other petroleum products currently being produced.

 

Taleveras to Build Largest African Oil Terminal In Equatorial Guinea

 

Oil trading firm, Taleveras, has signed an agreement with The Ministry of Mines, Industry and Energy of Equatorial Guinea, in Malabo to construct Africa's largest oil storage terminal. The firm said in a statement that the Bioko Oil Terminal is expected to have a total storage capacity of 1.2 million cubic meters for refined products and crude in the first 2 phases.

 

The terminal will be built at Punta Europa, on the Bioko Island, and will therefore be ideally located to service the key oil supply and demand centres throughout West Africa.

 

Taleveras says it expects to be able to provide global partners with world-class facilities at the oil terminal, which will be developed in phases. The first phase will have storage capacity for 680,000 cubic meters of refined products including Gasoline, Naphtha, Diesel, Jet A-1, and Fuel Oil. Subsequent phases are to include Crude Oil storage. Taleveras has already selected the EPC contractors, and the FEED contract is expected to be signed in early 2015 paving the way for construction to begin later this year.

 

Set up in 2004 by the current Chairman and CEO, Igho Charles Sanomi II, the Taleveras Group is a leading supplier of petroleum products in West Africa. The Group has since diversified into the upstream business, power and other energy solutions. Taleveras, which was awarded two offshore blocks in 2005, created some controversy when it entered into Strategic Alliance Agreements with the Nigerian Production and Development Company (NPDC) over a number of NPDC oil blocks. The Petroleum Minister has been criticised over the opaque nature of these finance agreements, which are said to contain large tax concessions.  

 

Taleveras says it has strong relationships with first class international banks and financial institutions, and combined lines of credit in excess of $2 billion.  

 

Seplat Secures $1 billion Debt Re-financing from Nigerian and International Banks

 

Dually listed (London Stock Exchange and Nigeria Stock Exchange) indigenous company, Seplat Petroleum Development Company said in a statement that it has successfully refinanced its existing debt facilities with a new $700 million seven-year secured term facility and $300 million three-year secured revolving credit facility.  The seven-year facility also includes an option for the Company to upsize the facility by up to an additional $700 million for qualifying acquisition opportunities, giving it access to up to $1.7 billion finance. 

 

Commenting, Austin Avuru, Seplat's Chief Executive Officer said: "We are pleased to have extended our banking relationships with several existing and new lenders, both Nigerian and international."

 

"This successful re-financing, which commenced several months ago, significantly enhances our already robust capital structure and underscores the quality of our asset base," he added.

 

The $700 million seven-year secured term facility was put up by a consortium comprising of Nigerian banks: First Bank of Nigeria Limited, Stanbic IBTC Bank Plc, United Bank for Africa Plc and Zenith Bank Plc. The facility is repayable quarterly from the end of June 2015 and has a margin of LIBOR +8.75% per annum. 

 

The $300 million three-year revolving credit facility was secured through a consortium of eight international banks comprising Bank of America Merrill Lynch, Citibank, JP Morgan Limited, Natixis, Nedbank Limited, Rand Merchant Bank, Standard Bank and Standard Chartered Bank. The facility has a quarterly reduction schedule from end December 2015 and has a margin of LIBOR +6.00% per annum. 

 

Proceeds from draw down on these new facilities have already been applied towards the repayment of the company's existing debt facilities of $552 million. The rest will be used to fund new business and development opportunities and for general corporate purposes.

 

In its operational update, the company said it had delivered on its 2014 projections. Net working interest production for full year 2014 (subject to final reconciliation) has averaged approximately 24,248 bopd and 39.4 MMscfd (approximately 30,819 boepd), in line with full year 2014 guidance of 29,000 - 33,000 boepd.  The Company achieved a new production record when gross daily liquids production at OMLs 4, 38 and 41 exceeded 76,000 bopd in December.  

 

At its capital projects, work is progressing on installation of the new 150 MMscfd gas processing plant at the Oben field and commissioning work is scheduled to take place during the first quarter of 2015 that will make additional gas volumes available to the domestic market.  The gas lift project at Amukpe, targeting the Ovhor field, is now operational.  The company is currently operating five rigs.  

 

Seplat has a 45 per cent participating interest in, and is operator of a portfolio of three onshore producing assets in the Niger Delta (oil mining leases (OMLs) 4, 38 and 41), which includes the producing Oben, Ovhor, Sapele, Okporhuru, Amukpe and Orogho fields.  Seplat said in a statement that since acquisition, it had more than tripled production from these OMLs.  Seplat also has an interest in the Umuseti/Igbuku marginal field within oil prospecting licence (OPL 283), which it acquired through its wholly owned subsidiary, Newton Energy Limited.

 

The company says it is pursuing a Nigeria focused growth strategy and is well positioned to participate in future divestment programmes by the international oil companies (IOCs), farm-in opportunities and future licensing rounds. So far, its well-padded war chest has not won it any of those IOC divested licences. Its attempt to secure Chevron and Shell divested OMLs has so far not proved fruitful. Unfortunately, falling oil prices may cause the IOCs to review their divestment programmes. Internationally, many companies are abandoning exploration projects in favour of ramping up production in producing assets. The IOCs operating in Nigeria may well decide to adopt the same approach, which could see fewer divestments.

 

Federal High Court Orders Maintenance of Status Quo in Total's Egina FPSO Contract

 

Total's contract award for the engineering, procurement, construction and commissioning (EPCC) for the floating production storage and offloading (FPSO) unit for Egina Field in oil mining lease (OML) 30 to Samsung Heavy Industries (SHI) is back in court. A Federal High Court in Lagos has ordered the Attorney General of the Federation (AGF) and four others to maintain the status quo in the implementation of the multi-billion dollar contract for the controversial Egina FPSO pending the determination of the suit.

 

Other defendants in the suit are the National Petroleum Investment Management Services (NAPIMS), Nigerian Content Development Monitoring Board (NCDMB), Samsung Heavy Industry Nigeria Limited and Total Upstream Nigeria Ltd.

 

The trial judge in the matter, Justice Okon Abang, said the defendants must maintain the status quo ante pending the hearing and determination of a motion on notice filed by a Port Harcourt based lawyer, John Iyene Owubokiri, the national coordinator of the Initiative for Non-Violent Change in the Niger Delta. The motion was filed on the 19th November 2014, barely one month after SHI and Lagos Deep Offshore Logistics (LADOL) began the construction of the facility at LADOL for the topside fabrication of the FPSO in Nigeria.  

 

Mr. Owubokiri claims in the suit that the award of the EPCC contract for Egina FPSO to SHI was unlawful and tainted by irregularities in that NAPIMS, NCDMB and Total ignored all extant laws, regulations, directives, and guidelines guiding such awards. He is asking the court to set aside the EPCC contract to SHI and declare it null and void.  

 

Owubokiri is seeking an interim injunction restraining the defendants from giving effect to the Egina FPSO contract. In addition, he wants a perpetual injunction restraining the defendants from executing, carrying out or taking any further step pursuant to the award of the contract. This would effectively bring work on the $3 billion FPSO to a halt if granted. He has also asked the court to issue an order compelling the defendants to reopen the process for the award of the Egina FPSO EPCC contract.

Nearly 2 years ago, SHI beat Hyundai Heavy Industries in the hard fought competitive bidding process conducted by NAPIMS, the investment arm of the Nigerian National Petroleum Corporation (NNPC) to clinch the lucrative deal to build the two million barrels capacity FPSO. The award was approved by NNPC's Group Executive Committee, headed by the Minister of Petroleum Resources, Diezani Alison-Madueke. The FPSO will be one of the largest in the world, with a storage capacity of 2.3 million barrels of crude oil and a targeted production capacity of 200,000 barrels per day.

 

Not long after the award of the contract, SHI fell out with its local content partner, LADOL, at whose yard the fabrication of the FPSO's topside was to take place. LADOL took SHI to court and after protracted negotiations, finally settled the matter out of court and things got back on track.  

 

In October last year, the two parties established a new partnership called SHI-MCI Free Zone Enterprise to build Africa's first Floating Production Storage Offshore (FPSO) integration and fabrication facility in LADOL free zone in Lagos. The yard's first job will be the integration of the Egina FPSO topside.

 

The multi-billion dollar Egina field in OML130 near Akpo Field is the third deep offshore development project of the French oil giant in Nigeria with reserve potential in excess of 550 million barrels and a peak production of 150,000b/d. The field in OML 130 is being developed under a Production Sharing Contract by Total Upstream Nigeria (24 per cent) in partnership with NNPC (10 per cent), CNOOC (45 per cent), Sapetro (five per cent) and Petrobras (16 per cent).

 

Total Achieves Flare-Out on Ofon Field

 

Total has completed the flare out of the Ofon field on Oil Mining Lease (OML) 102 offshore Nigeria. The associated gas of the Ofon field is now being compressed, evacuated to shore and monetised via Nigeria LNG.

 

"The flare-out of the Ofon field illustrates our commitment to developing oil and gas resources around our existing hubs in Nigeria. This important milestone of the Phase 2 of the Ofon project was achieved in a context of high levels of local content," commented Guy Maurice, Senior Vice President Africa at Total Exploration & Production.  

 

"The flare-out on Ofon is also significant for Total's environmental targets, representing a 10% reduction in the Group's E&P flaring. This achievement is a clear demonstration of Total's commitment to the Global Gas Flaring Reduction Partnership promoted by the World Bank," he added.

 

The Ofon field is located 65 kilometers from Nigerian shores in water depths of 40 meters. The field initially commenced production in 1997 and is currently producing about 25,000 barrels of oil equivalent per day (boe/d).  This flare-out milestone will allow for the gradual increase of production towards the 90,000 boe/d production target through monetization of around 100 million cubic feet of gas per day, followed later in 2015 by the drilling of additional wells. The execution of the project also involved significant local content, including the first living quarters platform to be fabricated in Nigeria.  

 

Total E&P Nigeria operates OML 102 with a 40% interest, alongside the Nigerian National Petroleum Corporation (60%). In 2012, Total celebrated fifty years of its presence in Nigeria. The Group's production in Nigeria was 261,000 boe/d in 2013.  Total said its deep offshore developments are one of its main growth avenues in Nigeria, where they currently operate the Akpo field in OML 130 and launched the development of the Egina field in the same lease in 2013. 

 

The flare out achievement at Ofon is welcome news given the amount Nigeria is said to lose from gas flaring - $1 billion over the last three quarters of 2014. Whilst Nigeria has laws banning flaring of associated gas, it continues to allow it subject to a financial penalty. Unfortunately, this has not proved to be much of a deterrent as the penalty is not stringently enforced. Some producers argue that it is actually cheaper to continue to flare the gas and pay the penalty than to produce gas because of the controlled price of gas in the domestic market.  

 

Taleveras Partners with Nigeria Football Federation to Build Technical Performance Team

 

The Taleveras Foundation is to partner with the Nigeria Football Federation (NFF) in the building of aTechnical Performance Teamaround the National Teams, starting with the sponsorship of 17 qualified persons for a three-week match-reading technique and backroom analysis exercise in the United Kingdom next month.

 

At a brief ceremony in Abuja, Chief Executive Officer of Taleveras Foundation, Igho Sanomi identified the development of technical persons as key to turning around the fortunes of Nigerian football for the better.

 

As part of the initiative, Taleveras Foundation will provide full sponsorship for 15 male and two females who will be qualify in match-reading and backroom analysis exercise for the good of Nigerian football.

 

Sanomi said he was excited to be involved with a programme designed to enhance capacity for Nigerian legends like Augustine Azuka "Jay-Jay" Okocha, Nwankwo Kanu, Yisa Sofoluwe, Shaibu Amodu, David Ngodigha, Garba Lawal, Dahiru Sadi, Kelechi Emeteole and Florence Omagbemi.

 

NFF President Amaju Pinnick praised the Taleveras Foundation for their contribution to helping take Nigerian football to a new high. Pinnick explained that the new face of football is scientific, and said Taleveras will go down in history as pioneering capacity building in this special area. He said: "Lack of qualified match readers has impacted negatively on Nigerian football over the decades."

 

The three-week exercise will take place in England, while the resource persons will come from Germany and Belgium. 

 

Chevron - Provision of Clearing and Forwarding Services, Import and Export, Air/Sea Freight, Transportation, Packaging and Removal of Cargo

 

Chevron Nigeria Limited (Company) invites interested and registered Nigerian companies to respond to the opportunity for the provision of clearing and forwarding services, import and exports of Company goods, air and sea freighting; and packaging and removal of Cargo. The scope of services involves clearing and forwarding, import and export services, sea and air freighting, haulage/trucking services within Nigeria, packaging and removal of cargo. Only tenderers who are registered in the NJQS product/category 3.08.10 (freight forwarding/logistics management services) Category A or B shall be invited to submit technical bids. The closing date for this opportunity is 22nd January, 2015.

 

NNPC - Provision of Telecommunications Services Via Coastal Submarine Cable  

 

The Nigerian National Petroleum Corporation invites interested and registered Nigerian companies to respond to the opportunity for the provision of telecommunications services via a submarine cable along the Nigerian coast from Lekki in Lagos State to Qua Iboe Oil Terminal in Akwa Ibom. The scope of services covers the provision of leased submarine fiber optic circuits from Lekki in Lagos State to Qua Iboe oil terminal in Akwa Ibom State with high capacity bandwidth (minimum of STM-2) capable of transmitting multi customer (different oil companies) bandwidth-intensive data, voice and video traffic. Only tenderers who are registered in the NipeX NJQS products/services 3.11.20 (telecommunication installation/support services) and 3.01.12 (telecommunications services) shall be invited to submit technical bids. The closing date for this opportunity is 30th January, 2015.

 

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