NPDC To Expend $3bn On 5 Divested Oil Blocks In 6 Years

— May 9, 2014

The Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), is Nigeria’s midsize flagship upstream exploration company.
The company which made its first entry into the domestic gas market with the commissioning of the 100mscf per day has grown to become the biggest producer and supplier of gas in the domestic market, contributing over 450mscf per day through the Oredo and Utorogu gas plants, with the acquisition of these assets.
Speaking yesterday at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States of America (USA), the group managing director, NNPC, Mr Andrew Yakubu, stated that Wood Mackenzie estimated that between 2014 and 2020, close to $3 billion of Capital Expenditure will be spent across five of the divested licences.
He explained that “the work programmes for the respective blocks will include re-entry into existing wells, flow-line and processing facilities repair as well as drilling of new wells. In addition to this, exploiting undeveloped fields and near exploration is expected to be carried out,” Yakubu stated.
Speaking further, he added that, “given the scale of drilling required, it is estimated that each block will need to have a minimum of two dedicated rigs for their near-to-medium-term drilling plans and this does present opportunities for the industry.”
 Stay up to date, follow us on Twitter; @LeadershipNGA

Fuel Import: FG Approves Early Release Of Q2 Allocation

Home / Business / Energy / Fuel Import: FG Approves Early Release Of Q2 Allocation

Juliet Alohan

— April 21, 2014

As part of measures to ensure steady supply of fuel across the country and avoid scarcity of the product, the federal government has approved the early release of the second quarter (Q2) 2014 fuel import allocation.
The approval which was given by the minister of petroleum resources, Mrs. Diezani Allison-Madueke, also included supplementary Q1 fuel import allocations.
In a statement made available to LEADERSHIP yesterday, the Petroleum Products Pricing Regulatory Agency (PPPRA) while commending the minister for the early approval , urged marketers to continue bringing in their products and assured of prompt processing of documents.
“The management of PPPRA commends the honourable minister and charged marketers to take advantage of both the Q1 supplementary PMS allocation, as well as the early release of the Q2 allocation, to bring in their products, promising to ensure prompt processing of documents for all imported products,” the statement signed by Lanre Oladele said.
The development which caught most stakeholders by surprise, according to a PPPRA source, is intended to further assist in providing additional imports to supplement the current level of importation into the system with the aim of improving the national PMS supply situation and stock build-up.
This is the first time such an approval would be done way-ahead of any anticipated quarterly allocation. It is expected that the gesture would enable all importers ample time to conclude their purchases and also bring same into the Nigerian market.
Given the challenges of products supply witnessed in the country in recent times, the source described the development as a good omen for the industry.
 Stay up to date, follow us on Twitter; @thundergist

Nigeria Electricity Generation To Hit 12,000mw By 2016

Home / Business / Energy / Nigeria Electricity Generation To Hit 12,000mw By 2016

NAN

— April 21, 2014

Dr Sam Amadi, Chairman, Nigeria Electricity Regulatory Commission (NERC), said electricity generation nationwide would hit 12,000 mega watts before the end of 2016,
He disclosed this on Monday in Minna at a town hall meeting.
Amadi said that this would be made possible as the commission had issued licence to private power plant operators for generation of over 20,000 megawatts of power within the next three years.
“Life has thought us that nothing is impossible, we can make 30,000 mega watts within the next one year if we want.
“Already we have issued licence to investors to generate over 20,000 mega watts before 2016.
“I am sure that with all the efforts put in place, our power generation will surely surpass our target by 2016,” he said.
Amadi said that the huge foreign investment on the sector in recent time was a product of the reforms and regulations put in place by the government.
He said the power sector had been without framework without any cost related terms and inconsistency in policy that had been the order of the sector, but it was now being regulated.
“This has built confidence in investors, which in turn will boost the sector and our national generation level,” he said.
Amadi said the sector had suffered decades of neglect and appealed for understanding.
He said that the commission had directed consumers not to pay any service charge to the distribution companies any time power was not supplied for two weeks. (NAN)

Marginal Field Bid Round Failure Raises Concern Among Investors

Home / Business / Energy / Marginal Field Bid Round Failure Raises Concern Among Investors

Chika Izuora

— April 24, 2014

There is uneasy calm in Nigeria’s oil industry following inexplicable reasons trailing the federal government’s lack of political will to conduct marginal field bid round since the last quarter of 2013.
The industry regulator, the department of petroleum resources (DPR), has also failed to disclose the identities of 31 onshore and off-shore fields for sale.
The federal government had indicated that it would conduct the exercise in March, 2014.
The minister of petroleum resources, Mrs Diezani Alison-Madueke, had announced on November 28, last year that the bid round would be completed by March, 2014, but the failure to meet the deadline has further fuelled speculation that government has a sinister motive to auction the field to its political allies controlling major indigenous oil firms.
Also, the failure of the DPR to release the lists of oil fields that are available for sale is putting prospective buyers in the dark and eroding transparency in the process.
Industry sources have accused the regulator of deliberately flouting the guidelines ostensibly to use the exercise as a platform to raise money for politicians toward the 2015 general elections.
At an energy forum in Lagos recently, some investors accused the DPR of not implementing the guidelines for the fields, saying the agency is being used by the federal government to woo politicians with oil blocks ahead of the 2015 polls.
For the first time in 12 years, the federal government kick-started the process for the second marginal field licencing round, offering 31 onshore and off-shore fields. Some operators have expressed fears that their technical partners may become apprehensive and withdraw their funds. Already, some insist that some oil mining leases in which politicians in the opposition and the ruling party have larger stakes but which cannot be verified by Leadership are now in circulation among oil companies.
Among the lists obtained by Leadership from some operators include the Uzuaku field on Oil Mining Lease (OML) 11 in Ogoni land, the Egbolom field on OML 23 that was previously operated by Shell in Rivers State, three offshore fields on OML 100 (Usoro, Ikong, Ibiom) and two on OML 67 (Amaniba and Ekpat).
Spokesperson for the DPR, Paul Osu, had earlier confirmed his agency’s failure to make the list available as promised but explained that the delay was caused by some reasons which he declined to mention. According to him, the list will be uploaded on the agency’s website when it is ready but said it was not made available in January as promised by the director, DPR, for some inexplainable reasons. Osu, however, denied knowledge of the list in circulation.
The executive vice chairman, Terra Energy Services Nigeria Limited, Akin Adetunji, however, said that the DPR should explain why the list has not been published.
Another player in the industry, who spoke on condition of anonymity, said, “There is much confusion with the constant shift in date by the minister and I want to tell you that there are companies which won the bid in the last exercise but could not deliver.
“They realised they had no financial ability to manage the assets and are waiting for the fresh bid round to identify those that could engage them in farm-in-farm-out arrangement, but government is playing hide and seek game.”
Meanwhile, a report obtained by LEADERSHIP on the marginal field operations showed that 17 oil blocks are currently redundant 11 years after they were awarded. The 17 marginal fields were awarded in 2003 but were not productive.
The fields were awarded by the DPR but the regulator is now threatening to withdraw them, a decision that led to scheming by the owners of the oil blocks.
The report showed that owners of the redundant oil blocks from 2003 bid round are afraid that the DPR might withdraw their ownership of the blocks for the new bid round, which was expected to take place this year. The operators have besieged the presidency to avert the withdrawal of their licences.
The marginal fields in Nigeria evolved from the Petroleum Amendment Act 1996, which introduced paragraph 16A into the First Schedule to the Petroleum Act. This amendment provided that the holder of an OML can farm out any marginal field which lies within the OML.
Also under the amendment, the president may cause the farmout of a marginal field, which has been left unattended for a period of not less than 10 years from the date of the first discovery of the marginal field.
Stay up to date, follow us on Twitter; @thundergist

Power Supply Hits 4,000mw

Home / Business / Energy / Power Supply Hits 4,000mw

Juliet Alohan

— April 24, 2014

Improvements in service delivery and reduction in system collapses have resulted in power supply hitting 4,000mw the federal government has said.
Power generation, which recently dropped to about 3,000mw due to vandalism of critical infrastructure,  increased to 4105.90mw as at Tuesday, a statement by Kande Daniel the special assistant, media, to the minister of power, Prof. Chinedu Nebo, said yesterday.
“Nigeria’s power generation is coming up again with the current generated megawatts (mw) hitting over 4,000 as at Tuesday,” the statement said.‎
“This situation has been attributed to reduction in system collapses, as well as improvement in services delivery, among other things,” it added.
The release further reveals a breakdown of how generated capacity was shared, with the industrial nerve-centre Lagos and environs getting the highest, a maximum load totaling 985.0mw, while the maximum load allocated to Abuja through Katampe and Gwagwalada power line was 410.80mw.
According to Daniel, the latest grid information has dismissed insinuations in some sections of the media that power generation dropped to less than 2,000mw.
She added that since mid-last week,  many households now enjoy enhanced power supply unlike what was obtainable in the recent past when vandals tampered with several power installations in parts of the country.
She further reaffirmed Government’s resolve to consolidate efforts at removing all bottlenecks to sufficiency in power supply, while conveying an appeal from the minster of power to Nigerians for more patience and understanding.
 Stay up to date, follow us on Twitter; @thundergist.

FG Inaugurates Organising Committee For 2014 Nigeria Oil, Gas Forum

Home / Business / Energy / FG Inaugurates Organising Committee For 2014 Nigeria Oil, Gas Forum

NAN

— April 24, 2014

The Federal Government has inaugurated the organising committee for the 2014 Nigeria Oil and Gas Trade and Investment Forum.
The inter-ministerial committee was inaugurated on Wednesday in Abuja by Mr Samuel Ortom, Minister of State for Industry, Trade and Investment.
Ortom reiterated that the Federal Government would continue to promote the Onne Oil and Gas Free Zone Authority in Rivers as the gateway for the oil and gas industry in Africa.
He said that the present administration was committed to consolidating the successes achieved in the past two editions of the forum to further strengthen the economy.
The minister said the 2013 Oil and Gas Trade and Investment Forum recorded over 2,500 participants, 100 exhibitors and over 500 investment enquiries.
“I am particularly happy that last year’s edition of the forum was a huge success.
“I am proud of the achievement of the ministry’s organising committee and our partner, Orlean Investment West Africa Limited,” Ortom said.
He said that the Onne Oil and Gas Free Zone Authority was structured and designed to address specific needs and requirements of the corporate bodies in the industry.
“Onne Oil and Gas Free Zone was established as a tax-free centre for processing of goods that encourage acquisition of skills, job creation and transfer of technology.
“It also encourages local content participation, enhanced foreign exchange earnings and backward integration in the country,” he stated.
Orton urged the organising committee to work hard to ensure that this year’s forum recorded better success in terms of attracting more domestic and foreign investment into the sector.
The committee’s terms of reference include organising a two-day trade and investment forum on oil and gas from Oct. 30 and to showcase the Onne Oil and Gas Free Trade Zone as a successful free trade zone in Nigeria.
Others are to mobilise relevant stakeholders, public and private sector investors (local and foreign) for the forum as well as monitoring and following up on the outcomes of the forum.
Members of the committee are drawn from the federal ministries of Industry, Trade and Investment; Petroleum, Transport and Niger Delta Affairs as well as Orleans Invest West Africa.
Other members are the Nigeria National Petroleum Corporation, Nigeria Ports Authority, Oil and Gas Free Zone Authority, Nigeria Export Processing Zone Authority, Nigeria Investment Promotion Commission, Nigeria Customs Service and Nigeria Immigration Service. (NAN)