Nigerian oil and gas sector news and developments...

Govt raises peace panel for Niger Delta .

To begin to calm the crisis of the Niger Delta, Nigeria’s federal government has set up the Niger Delta Peace and Conflict Resolution Committee. Vice President Goodluck Jonathan inaugurated the committee at Government House, Port Harcourt, Rivers State in early July 2007. The committee is to recommend to the Federal Government how the issues of the Niger Delta would be addressed adequately.

The Vice President said the crisis in the region needed to be addressed because of its negative impact on the economic activities in the region. He noted that the problem had gone beyond hostage-taking and pipeline vandalisation to the distortion in the economy of even the region.

The ceremony was attended by all the six governors in the South-South geo-political zone. The Vice President described the agitation of the region as a genuine one, though, he said that the people of the Niger Delta needed development and the country has reached a point where the government has taken notice of it.

Jonathan disclosed that the various stakeholders in the region would soon have an opportunity of sitting together with President Umaru Musa Yar'Adua at a summit to come up with a holistic programme for the development of the Niger Delta. But to get to this point, he stressed, there must be peace in the area.

To work out the peace process, every state in the region has been mandated to set up its own peace committee. The central committee, which was inaugurated will be co-ordinating cross board conflicts and interstate crisis in the region.

It has as Chairman Senator David Brigidi and secretary, Kingsley Kuku. The committee is made up of 18 members. Two persons representing each state, four from the oil firms, and one each from the Niger Delta Development Commission (NDDC) and the Nigerian National Petroleum Corporation (NNPC).

The committee is to liaise with the groups in the region, security agencies and report to the Federal Government. The Vice President said that the terms of reference of the committee would be reviewed every 12 months based on the progress made.

The Rivers State Governor, Celestine Omehia, said that the respective states had already set up their peace committees based on the directives of the Vice President and pledged that the committees would reach out to the militants in the creeks.

 

DPR’s Perceived Transparency and the 2007 Oil Bid Rounds
The Nigerian oil licensing bid round for 2007 may have come and gone but the final disposal of OPLs 290 and 2007 stood as a benchmark to judge how the Directorate of Petroleum Resources (DPR) was sticking to guiding rules it released for the exercise. Many oil and gas industry chieftains spoke out at the seeming delay in conveying OPL 2007 to Conoil Producing which had been recognized as the reserve bidder.

DPR was expected to secure its touted credibility via an immediate pronouncement that since Dangote Oil and Gas Company Ltd ( a member of the Dangote Group of Companies) had failed to exercise its right of first refusal over the two oil blocks, the blocks should immediately revert to Conoil as the first runner up in the bid.

Conoil had emerged the bona fide winner of continental shelf block 290 and onshore block 2007 at the bidding round held in Abuja on May 11, offering a total signature bonus of $215 million for the two blocks. However, Dangote Oil and Gas had preferential rights on the two blocks and was given the stipulated 48-hour lead time by the DPR to match the winning bonus offered by Conoil. By the close of time on May 16, Dangote was yet to make payment. The following day, it officially announced its withdrawal from the two blocks claiming that their investment in them would be unviable due to the tie-down of such huge sums in a project of comparatively lengthy gestation when their Group had other promising sectors with better prospects. Thereafter, DPR invited Conoil to finalise acquisition of OPL 290 but was silent on the bidder’s right to take up OPL 2007, located at the simmering Niger Delta.

Industry chieftains consequently hinted of possible moves by the petroleum authorities to give the block to another company other than Conoil. However this did not eventually happen as Conoil was given the block at the end.

Other transactions included four blocks which had their bids opened for record purposes but their winners were not announced because of pending litigations. They were OPLs 2001, 2002, 2003 and 2004, all located in the Niger Delta onshore region. DPR Director, Mr. Tony Chukwueke said the winners would be make public after the court judgment and provided the rulings were in favour of the organisation.

The government targeted $1 billion revenue from this year’s exercise but realized a little over $700 million. Successful companies at the bid round which paid 50 per cent signature bonuses were Oranto Petroleum on OPL 293 ($55 million), Yorkshire Energy OPL 295 ($105 million) and Moni Pulo Limited on OPLs 239, 231 and 234 ($11.5 million; $26.5 million and $6.5 million respectively).

Others were Global Energy Company which won OPL 2009 with $11.5 million because Essar Energy Holding, which posted the highest bid could not back it with the 50 per cent down payment and OPL 2010 also went to Global Energy with $11.5 million as Midland Petroleum, which offered $20 million could not meet the 50 per cent down payment.

Essar Energy Holding won OPL 226 with $37 million, Oilwood Limited won OPL 241 with $20.1 and Sahara Energy won OPL 228 with $6,25 million. Pan Ocean Oil Corporation clinched OPL 275 with $10 million signature bonus.

Coscharis Oil and Gas Limited and its consortium won OPL 274 with $50 million as the highest bidder; Sterling Global E&P Limited won OPL 2006 with $7.5 million; Bayelsa Oil Company/JNHP Consortium won OPL 240 with $10.6 million.

Minister of Energy, Dr. Edmund Daukoru had stated that all the PSC would be signed before May 29, 2009 except for those companies that failed to meet their financial obligations. The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Funso Kupolokun had said at the event that frequent offers of oil blocks by the government was aimed at boosting exploration activities to increase the national oil reserve base.

 

Nigeria Overtakes Saudi Arabia in Crude Supply to US

For the month of March 2007, Nigeria overtook Saudi Arabia in the ranking of crude oil exporters to the United States,  a preliminary data from the US Energy Information Administration (EIA) has shown. According to the EIA data on the US crude import rankings in March 2007, Nigeria, Africa's biggest oil producer and the world's eighth, leaped from fifth place in February to third in March, pushing Saudi Arabia, the world's top exporter into fourth place. Canada and Mexico held on to first and second places, with crude exports to the US of 1.776 million barrels per day (b/d) and 1.621 million b/d.

Saudi Arabia, with an average 1.231 million b/d in March, was behind Nigeria with 1.29 million b/d. US crude imports from the kingdom had dipped by 374,000 b/d in February to average 1.185 million b/d over that month, recovering by just 46,000 b/d in March. Volumes from Nigeria were up 229,000 b/d from February's 1.061 million b/d. other suppliers ranked as follows: Venezuela took fifth place with 1.036 million b/d. In sixth place was Angola with 696,000 b/d; Iraq, seventh place, with 523,000 b/d; Algeria, eighth place, with 501,000 b/d; Kuwait, ninth place with 288,000 b/d and Brazil, tenth place, with 209,000 b/d.

 

Niger Delta: FG Mulls Gas Flare-out By 2008

To further progress in resolving Niger Delta environmental protests, Nigeria’s Federal government may have concluded plans to close down oil fields flaring associated natural gas at the expiration of the deadline for gas flare-out in 2008.


Operating firms have been interested in only gathering gas for export from offshore facilities and have abandoned investments in gas gathering projects needed to boost power generation and domestic utilisation on the excuse of unrests. Also, they have found the current paltry penalties for flaring gas more suitable than the cumbersome task of investing in gas gathering ventures.


Some of the oil majors like Shell Petroleum Development Company (SPDC) have called on the federal government to extend the flaring deadline to 2010 due to the inability of the Nigerian National Petroleum Corporation (NNPC) to fund its equity in the Joint Venture (JV) operations.

Ugborodo indigenes threaten to stop Chevron’s $3bn projects

The Escravos Gas-to-Liquid and Escravos Gas Project III initiated by Chevron Nigerian Limited (CNL) to end gas flaring in Nigeria by 2008 may suffer a hitch if the threats of the host community to stop the projects go ahead.

Indigenes of the oil-rich Ugborodo community in Warri South West Local Government Area of Delta State threatened to stop further work on the $3bn gas projects unless the CNL‘s management meets a four-point demand within two weeks.

The Ugborodo Community Trust Management Committee, headed by Mr. Isaac Botosan, has forwarded a petition containing the four-point demand to the General Manager, Government and Public Affairs of CNL, Mr. Femi Odumabo.

Frequent disruptions of the project by the host communities stalled the initial plan by CNL to complete them in October 2007. Hyundai Heavy Industries and America/Italian Company, Southern Gas Company are handling the projects.

 

 

   

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