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Nigeria explains 30,000 bpd crude to Sao Tome and Principe
From Madu Onuorah, Sao Tome & Principe
MORE light has been shed on why Nigeria allocates 30,000 barrels per day (bpd) of crude oil to Sao Tome and Principe.
According to Nigeria's Ambassador to the oil rich border nation, Mr. Saidu Pindar, it is borne out of a desire to help in the social transformation and improvement of the economy of the tiny island.
Under the deal agreed as part of peace building efforts to ensure the survival of democracy after the unsuccessful coup of 2003, Sao Tome is to trade with the proceeds of the crude oil allocation and use its proceeds to provide basic service to its citizens.
Pindar told a select group of journalists from Nigeria in his office that apart from the interest free loan of $15 million given to the country, a confirmed payment of $37 million being the country's signature bonus from bids for Block One has been paid to the Santomean government.
The $15 million loan is to be refunded on its receipt of the proceeds of signature bonus on the second round of oil licensing which was concluded last June.
Explaining that there was nothing strange in the release of the 30,000 bpd of crude oil, Ambassador Pindar noted that Ghana and South Africa are currently benefiting from the scheme.
He confirmed that Nigeria has already fulfilled all the obligations it made to Sao Tome & Principe shortly after the botched coup of 2003 including provision of ambulance, water tanker, motor cycles, drugs and office equipment.
In addition, three officers of the Santomean military have benefited from training programmes in Nigeria. While two have finished and returned to Sao Tome & Principe, one is still at the tri-service institution - Command and Staff College, Jaji, Kaduna State.
Also, according to Pindar, a total of seven students are currently undergoing training at the Petroleum Training Institute, Effurum near Warri, Delta State in order to help with the provision of trained manpower for the country's oil sector.
Said Mr. Pindar, "in line with the Nigerian government's commitment to improving the country of Sao Tome, we give the government about 30,000 barrels of crude per day to trade and make profit. I understand the government use part of the proceeds to train about 200 students in Portugal and Cuba. In the oil sector, the Joint Development Zone is proceeding well. Sao Tome & Principe received about $37 million, which was transferred to them since July as their share of signature bonus on Bloc One. We are presently concluding Production Sharing Contract on five additional blocks in order to get additional revenue. Just last week, Chevron said it would start oil exploration in January regarding Bloc One."
He noted that there is a remarkable improvement in economic activities between the two countries especially with the involvement of the private sector.
"We have signed Bilateral Air Services Agreement (BASA) though Aero-Contractors is yet to commence operation. The BASA agreement has allowed Afrijet to fly from Lagos direct to Sao Tome twice a week. We now have a small shipping operation between Sao Tome and Calabar where traders go to buy goods and sell here. In fact, informal trade has actually increased and there have been more interactions between Nigerian businessmen and their counterparts in Sao Tome and Principe," he said.
The result of this, he said, is the plans by Nigerian businessmen to build hotels, resorts and a golf course. Already, a Nigerian bank, Island Bank is currently in operation is Sao Tome while NICON Insurance Sao Tome is being incorporated. In the same vein, a second Nigerian bank, Ecobank wants to establish as quickly as possible in Sao Tome.
Pindar also disclosed that Nigeria has rendered quality services to the Saotomean military through the Technical Aid Corps, adding that with the expiration of the current tour of duty of the volunteers, the Santomean government has asked for a fresh deployment of new ones, indicating they would welcome specialists in the medical fields.
Last Updated: 7th December
December 5th, 2005
Challenges and opportunities facing the oil industry
E-MAIL THIS PRINT THIS
I would like to spare a thought on challenges and opportunities facing the industry in the future.
Jim Pearce
In my view, the future of the Nigerian oil industry, indigenous operators, international independents and the majors is bright. I hope to share my thoughts on this with you today and perhaps provoke some dialogue among the attendees of this conference.
What has impressed me is the significant reduction in unit opex to a level below even$ 6 /bbl. This number would be even lower if Addax were to own rather than, lease terminal facilities.
In 1998 OML 123 had an ultimate recovery is less than 100 MMB0. But this figure has dramatically changed from 1998 to 2004. Through an aggressive drilling and development campaign, the number of producing fields and ultimate recovery has increased significantly. Now the ultimate recovery is projected to be over 250 MMBO - an increase of almost threefold. Further increases have occurred in 2005 including a recent discovery at Kita Marine (adding something on the order of 30 MMBO of reserves).
While one can not guarantee the same outcomes for all the recently awarded blocks,, it is clear that significant increases could be expected assuming an aggressive drilling and development campaign similar to what Addax followed for OML 123.
What an incredible outcome for both Addax and Nigeria! It is interesting to note that the cumulative production of OML 123,Adanga South at this moment in time is the same of the estimate of the total STOIlP of the previous operator. Addax inherited the infrastructure from the previous operator .
We have expanded the existing infrastructure adding new production facilities, well jackets and pipelines. Development is continuing with fit -for-purpose, unmanned, satellite wellhead platforms using well conductors as platform legs. These platforms can be installed by either a construction barge or the drilling rig.
If I were to give a similar presentation to you next year you would see an even greater developed OML 123. Remember that we just recently had a new discovery that will require further development, hook-up and commissioning.
I have covered our exploration and development activities for OML 124 (onshore including the Ossu and Izombe fields) and the extensive efforts for the offshore OML 123 block. I would now like to move to our efforts on OPLs 90/225.
For OPL 90 we have the recent development of the Okwori field and the planned development of the Nda field as a tie-back to Okwori.
The development of the Okwori field was not a trivial undertaking. Discovered in 1972 and appraised between 1973 and 1996, Addax has succeeded where previous operators failed bringing this marginal field on stream.
Clearly technology played a key role in the successful appraisal and development of this field. We will need to be aggressive in technology deployment in the future development of new fields on both onshore and near shore blocks if we hope to be economically successful.
Since we are dealing with stacked reservoirs with generally relative small connected reserves,, full flexibility is required to maximise recovery. Further, the poorly consolidated reservoir sands of the Okwori field need sand control. Production casing across individual prospective zones was perforated, and Expandable Sand Screens installed, with packers ensuring proper zonal isolation.
Okwori has been a success! The field was brought on production in March only 18 months after Final Investment Decision, FID.
Okwori has been the fastest subsea development in Nigeria and clearly could be seen as a template for similar development in other offshore blocks in Nigeria.
The production growth has been impressive. There has been a significant increase since March and there should be another significant jump in production this month with the addition of Ok-wori#7 (a recent workover) and Okworl#12 (a recently drilled development well).
I have summarised here some of the key Okwori milestones:
• Development drilling started in July 2004
First oil was achieved only eight months after spudding the first development well. Current production is about 25,000 bopd headed towards over 351,000 by year-end The Nda development is about to start- this will be a full subsea development tied-back to the Okwori FPSO.
What made Okwori a success? I would like to take a few minutes to discuss each of these factors.
A strong subsurface team: We are an asset-based organisation in Addax wherein we have separate asset teams for each of our key assets. The Okwori team has been particularly successful in bringing to bear all the key subsurface disciplines (earth science, drilling, petroleum engineering, and operations) to bear on the development planning effort.
Service company involvement: The close working relationship we have experienced between the Addax subsurface asset team and key service companies has also been a contributor. We need to engage the service companies early in the development planning exercise to ensure success.
•
New Technology: Technology will play an increasingly important role in the exploration and development of onshore and near shore blocks.
•
Intelligent well completions: Clearly the use of intelligent well completions has been a key factor for the Okwori development.
Government Relations: We could not have achieved success at Okwori without the support of both NAPIMS and the Department of Petroleum Resources (DPR). I sincerely believe that building and maintaining an excellent working relationship with these two bodies is essential. I would like to compliment both NAPIMS and the DPR for their help in making Okwori a success.
The second example of what I would call working or perhaps "sweating" the assets is the further exploration and development of OPLs 90/225.
We plan the development of the Nda field with first production in 2006. This will be followed by an exploration well in OPL 90 to evaluate the Okporo prospect.
For OPL 225, we have a planned 3D seismic acquisition programme planned for later this year/early 2006. This will lead to the mapping of prospects and then exploration drilling.
•
What I would like to do now is to summarise the key elements of the Addax story and hopefully relate this to future opportunities for operators on onshore and near shore blocks.
•
What has Addax done in Nigeria since taking over from Ashland in 1998? Let’s consider some of the high level accomplishments:
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Identified potential in existing acreage - clearly both OML 123 and OPLs 90/225 would fit in this category.
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When Ashland started operating the licences production from OML 123 and OML 124 peaked at approximately 46,000 bopd in 1989, before declining.
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Addax Petroleum acquired the Ashland licenses in 1998, when production had dropped to below 10,000 bopd and Ashland believed that the licenses were not able to produce for more than two years. Addax managed not only to stop the decline, but to surpass previous production levels in a matter of four years.
When the Okwori field in OPL90 was brought on stream earlier this year, total production increased to about 75,000 bopd and is still increasing.
Reserves have increased monotonically even with increasing production. Note that since 1998 there has been an almost four-fold increase in reserves.
For capex, there has been a significant increase in capex since 1998 covering drilling operations and new facilities. Capex will be even greater in 2005 and 2006 as we initiate an accelerated drilling campaign accompanied by significant facilities upgrades and gas development. I will speak more about these later.
Implemented an aggressive appraisal/development programme consider the development of OML 123 - what was considered a dying prospect by the previous operator has been developed into a key producing property.
Increased Nigerian Content - the efforts on developing OMI, 123 for example have opened up opportunities for indigenous companies for fabrication, installation, services and engineering.
Government Relations - this is the key Nigerian success factor.
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Performance - can anyone question Addax’s performance with the impressive increases in reserves and production?
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I would like to take a few minutes to briefly cover Addax’s successful strategy for growth.
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Maximise returns ftom existing assets - clearly the OML 123 optimisation effort would fit with this theme
Increase production from existing leases - both OML 123 and OPL 90 (Okwori & Nda) would fit with this theme.
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Upgrade existing facilities - the planned upgrade of OML 123 facilities to provide for increased production and gas export would fit with this theme.
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Invest in new acreage - Addax’s recent acquisition of the Okwok field with tie-back possibilities to the OUL 123 facilities would clearly fit with this theme
•
I would like to take some time to discuss both challenges and Opportunities for the future.
Challenges:
Fiscal Structures -It will be important that fiscal advantages are not degraded significantly such that development or re-development of onshore or near shore leases becomes unattractive.
Contracting Issues - NAPIMS will need to be proactive in the interpretation and implementation of contracting guidelines so as to not adversely affect project cycle time.
Community Issues - We must address the "community issue" question for the Niger Delta to provide for development or redevelopment of onshore properties
•
Human Resource - This will be a key issue for the future. We must be able to secure adequate Nigerian staff for the anticipated growth in the future.
•
Market Forces- I think that we are all keenly aware of the recent significant increase in rig rates and the costs for associated services. These will need to be managed in the future.
While we have significant challenges for the future we should not forget that we also have significant opportunities.
Opportunities
Exploration & Development Opportunities - Look at the Addax track record for OML 123. If similar results can be achieved for recently awarded blocks either onshore or near shore, the benefits to operators and Nigeria alike will be great.
Indigenous Companies - This is a period of great opportunity for indigenous companies - operators, engineering companies, service companies and fabricators.
The Addax-Oryx Group (or AOG for short) was formed in 1987. AOG is a reputable, successful and expanding natural resources venture in Africa and now other parts of the world.
AOG covers Upstream, downstream and trading activities in oil & gas, as well as mining ventures. Let me say a few words about these activities starting with the upstream.
For the upstream - where this presentation will focus - we are the largest independent oil producer in Nigeria. Our Nigerian operation is managed from Lagos with some technical support from Geneva. We have a staff of over 300 with 95 percent Nigerians. We are actively recruiting for our national staff and have added over 40 new staff members in the past three months.
For the downstream, we operate under the Oryx brand in 10 African countries in all aspects of petroleum distribution - storage; 100+ service stations, LPG bottling and retail; and finally lubricant blending and retail.
For trading, AOG focuses primarily on crude and products trading with a significant presence throughout sub-Saharan Africa. We are the largest independent merchant in Africa - we also have a major presence in the middle East and Asia.
Finally, for mining, we are active in gold exploration in six African countries.
Clearly, AOG is a major player on the African continent. In terms of chronology, our initial activity in West Africa was centred on oil trading. We first diversified into marine services and downstream operations, and then later into gold mining through participation ‘in Samax and Axmin. Our upstream history began in 1994 with the formation of Addax Petroleum and our first acquisition in Nigeria was in 1998.
Our entry into the Nigerian upstream began in 1998 with the acquisition of the Ashland holdings. We later expanded into both Cameroon and Gabon, and finally we grew our operations in terms of producing properties with the development of -the Okwori field in OPL 90 earlier this year.
I will focus on Nigeria in this presentation but let me say just a few words about Cameroon and Gabon. For Cameroon we are operator of a block with a 60 percent interest. Our partner is Tullow Oil. For Gabon, Tullow is the operator for a block where we hold a 42.5 percent interest. Both of these are exploration blocks.
Within a decade Addax has taken a strategic growth concept to a reality now being a significant oil producer in Nigeria with growth potential both in Nigeria and other African countries.
Current Addax acreage in Nigeria contains OML 124 onshore in the northern part of the delta, OML 123 in shallow waters in the east, and OPLs 90 and 225 offshore in the south,, where water depths exceed 100 meters.
The producing fields in OML 124 are Ossu and Izombe. Addax also assists Chevron in the treatment and shipment of the Jisike field production. A major Addax initiative is planned for late 2005 and all of 2006 with an onshore drilling campaign in OML 124. Further, we are working with an indigenous company on an LPG project for the rich gas stream from OML 124.
ON4L 123 is situated in the so-called Golden Triangle in the Gulf of Guinea,, an area straddling the maritime boundaries of Nigeria, Cameroon and Equatorial Guinea.
Finally, for OPLs 90/225, we initiated production front the Okwori field earlier this year, plan the development of the near-by Nda’field next year, and will execute a 3D seismic acquisition program for OPL 225 next year.
Jim Pearce delivered this paper at the National Association of Petroleum Explorationist (NAPEE) Conference held in Abuja recently
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$20 gas as equivalent to $120 per barrel oil
December 07, 2005 11:31:30 (ET)
HOUSTON, Dec 7 (Reuters) - Sustained economic health, steady demand growth in China and the lack of new supplies in the short term all point to continued strength in crude oil prices, the U.S. oil and gas practice leader for major accounting house Deloitte said on Wednesday.
"What makes this (high energy price) environment interesting is the overall economy is very healthy," Deloitte's Richard Woodward said at the firm's annual energy conference in Houston. "The (U.S.) economy couldn't be much stronger. That's an extraordinary combination that, frankly, we haven't seen before."
The reason the U.S. economy appears to have withstood record crude and natural gas prices, Woodward said, is the ability of China and its low-wage work force to fuel the consumer market cheaply, overcoming inflationary pressures usually seen when energy gets expensive.
China's seemingly unquenchable thirst for oil has grown to account for an 8.1 percent share of worldwide demand, driving prices higher. Even so, Woodward said its unparalelled export production has countered the commodity prices effects.
"China has taken control of global manufacturing," he said. "They have effectively put a lid on inflation."
The current landscape is bullish for commodity prices, Woodward said, noting that a lack of inflation should forestall a U.S. downturn or recession.
"If you can't get your head around how you'll get a recession, then the demand for oil is going to grow," said Woodward, who predicted that "we won't see $40 a barrel oil again in our lifetimes" and it might not get under $45.
Analysts were especially bullish in the short term. Branko Terzic, Deloitte Services LP's global and U.S. regulatory policy leader, predicted a "tough winter" for consumers and regulators who might be faced with rate cases as utilities try to pass along high costs.
Michael Economides, a University of Houston engineering professor and a featured speaker at the conference, predicted natural gas "will hit $20 (per million British thermal units) by Christmas Eve."
"That's a hell of a Christmas present for the people in the (U.S.) northeast and the north of the country," said Economides, who pegged $20 gas as equivalent to $120 per barrel oil.
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First cargo from Bonga fields loads January
By Hector Igbikiowubo
Posted to the Web: Wednesday, December 07, 2005
LAGOS — FOUR cargoes of crude oil will be loaded between January 6 and 7 from Bonga oil field in Nigeria’s deepwater operated by a Shell Nigeria Exploration and Production Company (SNEPCO), a subsidiary of Shell Companies in Nigeria, a trader with one of the equity holders disclosed recently.
Nigeria has also urged the Organisation of Petroleum Exporting Countries (OPEC) to defend a $50 per barrel price for its oil basket to enable producing countries pay for on-going investment in capacity expansion.
It is expected that the second cargo from Shell’s Bonga field would be lifted on January 14 and15, the third would be lifted on January 22 and 23, while the fourth will be lifted on January 31 and February 1. “The first two cargoes will be 500,000 bbl,” the trader said. Exports will be from the Bonga terminal and the Bonga Single Point Mooring, which is located one mile from the Floating Production Storage and Offtake vessel, 50 nautical miles off the Nigerian coast (about 120 nautical miles from Warri) in water depths of around 1,000 meters.
The FPSO vessel is reputedly the largest of its kind in the world, the size of three football fields and six storeys high moored to 12 suction pile anchors in an orientation of 185 degrees.
It has a storage capacity of two million barrels, a maximum loading rate of 47,000 barrels per hour and is designed to produce up to 225,000 b/d and 150 million standard cubic feet of gas per day. Normal cargo size will be one-mil bbl with a minimum cargo size of 300,000 barrels.
Bonga has API gravity 29 and sulfur content of 0.25 per cent, specific gravity 0.882, acidity 0.59 TAN, viscosity 11.51 cst at 20 deg C, Nickel 3 ppm, vanadium 0.3 ppm, nitrogen 1277.1 ppm, ccr wt per cent 1.31.
Bonga had originally been due to come on stream in 2003 but has been delayed several times and also seen its project costs rise. The field will increase OPEC member Nigeria’s crude production by around 10 per cent, and raise Shell’s production in the country by 25 per cent.
Mr. Tony Chukwueke, Director-General, Department of Petroleum Resources (DPR), made the call on OPEC at an oil and gas conference in Washington, USA, last week.
“It looks like the world can take a shock but we have to ask what would happen if the price goes below $50 per barrel We don’t want it to go to $40,” Chukwueke said.
The DPR boss emphasized he was speaking for Nigeria and not for OPEC, while noting the rising costs of steel and other commodities required to build energy infrastructure. Nigeria is one of OPEC’s 11 member countries.
“OPEC is discussing the price band today,” Chukwueke said, referring to a joint ministerial session between the European Union and OPEC convened to discuss ways to stabilise oil markets.
“We hope the oil price stops at $50. We will have to do everything we can so Nigeria plays its role in contributing to expand the reserve base. Nigeria is embarking on an ambitious oil and gas expansion programme aimed at attracting necessary foreign investment to develop the nation’s vast reserves. We will not allow any of our reserves to be idle, especially at today’s prices,” he said.
Saudi Oil Minister, Ali Naimi, has said repeatedly that his country, the world’s largest crude oil exporter, doesn’t have a target price. The market, not oil producers, determine prices, Naimi said.
“We don’t want our partners to leave oil or gas in the ground.” OPEC President Sheikh Ahmad Al-Sabah has said the group won’t move to cut back oil production at its December 12 meeting in Kuwait.
OPEC said last Thursday it pegged the value of its reference basket of 11 crude oils at $49.69/bbl Wednesday, the second day in a row the basket was below $50.
Nigeria Backs High Oil Price
From Onyebuchi Ezigbo in Abuja, 12.06.2005
The Minister of State for Petroleum Resources, Dr. Edmund Daukoru, said yesterday that Nigeria would prefer that crude oil prices stabilise within the range of $40 to $60 per barrel, which would be reasonable enough to enable producers meet up with equally soaring cost of production.
Daukoru who spoke at the handing-over ceremony of the prototype Production Sharing Contract (PSC) agreement for the 2005 oil blocs licensing rounds to Nigerian National Petroleum Corporation (NNPC), said that the country's future development plan as well as its quest for expansion of production capacity would benefit from a sustained reasonable price level.
"We have to take into account very high development cost, prices have got out of the roof. If you want to go and take out a rig today, you have to be prepared to pay hundreds of thousands of dollars per day for a drilling rig, especially off-shore drilling rig is very hard to come by while floating production system is very expensive", he said.
"Below about $40, you cannot expect an investor to be able to sustain or undertake very high cost projects, so in that broad band of between 40 and upper 60s, if the price rovolves round that level, we will consider it acceptable", Daukoru said.
The Minister who earlier accompanied the President to the National Assembly to present the 2006 Appropriation Bill which adopted a crude oil price benchmark of $33 per barrel, noted that theoretically, any price range around $33 and above will be good for the country.
Oil prices closed yesterday $59.80 per barrel in the international market.
Though Nigeria is desirous of reaping the fruits of the remarkable rise in crude oil price, the minister said government does not want it to go beyond reasonable limits, to the extent that consumers may be tempted to opt for alternative energy sources.
Daukoru said government would not want the prices to escalate further to the level of $70 and above, as was the case in the early part of the year, or reach a level where competing sources of energy like biofuel, solar and wind generating systems becomes "a commercial possiblity".
Commenting on the domestic product prices, Daukoru restated the stand of FG not to visit the nation with any further fuel price increase in the coming year.
He said the President has promised not to visit the nation with another price increase.
"I just came from the National Assembly, there is an aspect of the appropriation that is meant to cushion that through a mechanism to be announced soon", he said.
The Group Managing Director of NNPC, Engr. Fusho Kukpolokun while regretting the mistakes of the past which saw the country earning a whooping $40 billion in oil revenue in 30 years with no appreciable level of economic development, said government has taken far-reaching steps during the recently concluded 2005 oil bloc licensing rounds to address issues that would bring more development to the country.
He described government's innovative stand on the issue of tying up downstream projects with the prospecting of the oil blocs as a new strategy that has brought an alignment between the oil industry and the rest of the economy.
Speaking on the structure of the draft new PSC agreement, the Director of the Department of Petroleum Resources, (DPR), Mr. Chukwueke said the sharing procedure remains significantly the same, 70% - 30% between government as represented by NNPC and the winning oil companies.
However, what appears to be a new introduction in the PSC is the fact that royalties are to be charged on deep water blocs based on production volume as well as the commitment of the companies to do downstream projects.
Chukwueke who disclosed that all processes leading to signing of the PSC which involved 44 consortia of firms would hopefully be concluded by December 15, 2005 gave the final earning from signature bonus as $2.6 billion.
NNPC is expected to go through the terms stipulated in the agreement and then come up with the final version that would be used.
ONGC dives into Akpo
By Upstream staff
India's Oil & Natural Gas Corporation (ONGC) is set to buy South Atlantic Petroleum's 45% stake in the Akpo field, off Nigeria, for $2 billion, according to local media reports.
ONGC will make the acquisition through its overseas arm, ONGC Videsh, and partner with French oil company Total, India's Economic Times reported today.
"The government is set to give the clearance for the investment shortly," the paper said.
A spokesman for ONGC declined to comment on the report.
An official at the state-run energy explorer told Reuters on Monday that ONGC expects a decision on the oilfield auction "soon".
Another source said ONGC had won the auction with an offer of between $1 billion and $2 billion.
The stake in the yet-to-be-developed Akpo oil and gas field was put up for sale earlier this year by Nigerian firm South Atlantic Petroleum, which is controlled by former Nigerian Defence Minister Theophilus Danjuma.
The deep-water field, operated by Total, needs billions of dollars of investment.
--------------------------------------------------------------------------------
07 December 2005 06:49 GMT | last updated: 07 December 2005 10:46 GMT
Devon makes China splash
By Upstream staff
US independent Devon Energy has sealed a production sharing contract with the Chinese National Offshore Oil Corporation (CNOOC) covering Block 42/05, in China's Pearl River Mouth basin.
Subject to final government approval, Devon will operate the block with a 100% working interest. CNOOC has the option to participate with a 51% stake in the event of a commercial discovery at the South China Sea block.
--------------------------------------------------------------------------------
06 December 2005 12:24 GMT | last updated: 06 December 2005 12:35 GMT
Sao Tome: UK eyes oil sector cooperation
Sao Tome, Dec. 5 (Lusa) - The United Kingdom hopes to set up joint ventures with companies from Sao Tome and Principe to explore for hydrocarbons in the archipelago's oil-rich offshore waters, an official said Monday.
Ralph Martin, British Ambassador to Sao Tome, was speaking after delivering his diplomatic credentials to President Fradique de Menezes.
"We want to develop oil sector collaboration, as the UK has major experience in this area", said Martin, adding that London could also re-launch its education cooperation to Sao Tome by funding English-language teaching programs.
Sao Tome said earlier this year it was mulling the creation of a four-way consortium involving Angola, Brazil and Portugal to explore for oil in the Joint Development Zone shared with Nigeria, as well as its own territorial waters.
No concrete official announcement on this matter has been made in Sao Tome, although the islands' prime minister said last week that a joint-venture could be set up with Angola to coordinate oil sector cooperation with Luanda.
RCN/CJB.
Lusa
CINTEL CORP - Nasdaq OTC BB: CNCN
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November 28th, 2005
AKPO recoverable reserve hits 600m barrels
Akpo field now has recoverable reserve of 600 million barrels of condensate successfully drilling five fields, Miguel Guerro, the managing director of South Atlantic Petroleum has disclosed.
Olusola Bello
He said six other wells have been drilled on the license with all having hydrocarbon. Miguel Guerro who spoke on strengthening indigenous multi national alliance: the Akpo field case study, at the recently held oil industry luncheon talks organized by the Center For Petroleum Information describe these activities as the most successful efficient creation of value in the deep offshore include "this has been and continues to be one of the most successful and efficient, creation of value in the deep offshore industry, as a Nigerian company we are proud of sharing this success".
He said his company still has interest to explore and develop the remaining parts of OPL246. Until it expiry date which is 2008.
The farm-in agreement between total which is the technical and operating partner of OPL 246 and its other partner in the field, PETROBRAS he noted has been the basis of the excellent relationship between them and the indigenous company.
South Atlantic Petroleum according to him has a symbolic relationship with its partners such that at all times it receives their support and solidarity in solving all the problems affecting the joint venture in future. For example, the initial delay in the issuance of the OML also affected all the partners equally, he said.
The partners he said provide expertise and support to SAPETRO in negotiating the terms of government’s participation in the OML derived from OPL-246 and in accordance with the petroleum act. The participation of the government in the OML must be "in the public interest and through negotiations," he said.
After what I will describe as standard professional negotiations between the government of the Federal republic of Nigeria (represented by the NNPC) and the equity partners of OPL-246. The "head of agreements" Production-Sharing Contract (PSC) have now been signed.
Highlights of these agreement state in part.
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NNPC will acquire- without- compensation- the 50% out 60% interest of SAPETRO of the OML-130 be issued in the same date, as an extract of OPL-246.
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The interest in the OML is divided into a production sharing agreement (PSA) 50% (SAPETRO 10%, Total 24% and PETROBRAS 16%) and PSC 50% (NNPC 50%).
•
The agreement established that the contractor of the PSC would be the indigenous company-SAPETRO and the operator Total.
Nigeria and Sao Tome should sign oil deals this year
The production sharing contracts and joint operating agreements in respect of the oil blocks located in the Nigerian-Sao Tome Joint Development Zone will be signed before Christmas, a Nigerian government source yesterday confirmed to reporters.
At the same time the source also said that the Joint Development Authority, which manages resources in the maritime boundary shared between the two countries, has approved in principle that the Swiss energy company Addax Petroleum will be operator of block 4 in the zone.
Addax, which already has operations in Nigeria, replaced Houston-based Noble Energy, after it withdrew this year from a consortium led by ERHC Energy Inc.
"Addax is almost there," the source said. "We have given an approval in principle, but we need certain clearance from the Sao Tomean end." The JDA made the latest block awards last May, with blocks 2 to 6 being offered to a different consortium made up of local and international oil companies.
Since then, negotiations have been made on joint operating agreements among the consortia members. The groups have also been negotiating with the JDA on the terms for the production-sharing contract, under which the blocks will be operated. All the agreements are subject to approval by the Joint Ministerial Council, the highest ruling organ of the JDZ, made up of ministers from the two countries
Tuesday 29th November, 2005 HOME | Previous Page
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Ex-US envoy, Jeter, warns against third term
• ANPP may query governors • CNPP berates Ibrahim
By Felix Ofou (Lagos)
And Chuks Ehirim (Abuja)
Former United States envoy to Nigeria, Howard Jeter and U.S. Congressman, Donald Payne, have urged President Olusegun Obasanjo not to stretch his stay in office, warning that such would end up in disaster.
They made the point at the November session of the All Nigeria American Congress (ANAC) in Washington last week during which new leaders of the ANAC were elected for a five-year tenure.
The Americans warned that it would be disastrous for Obasanjo to even entertain thoughts of a third term since the idea would meet with stiff opposition from within and outside Nigeria.
Jeter, however, noted that no official confirmation has come out of Aso Rock and that speaking further on the alleged plot at this time could be mere speculation.
Said he: “It’s important that Nigeria respects its Constitution. A lot has been gained by this present administration for the past six years. The economic gains, the effective positioning of women in the administration, the fight against corruption, advance in the democratic process, all of these have brought tremendous respect from the international community, especially for Olusegun Obasanjo.
“Nigeria would be wise to stay on course and not draw back to the dark ages of Nigerian politics with efforts that would disrespect its Constitution and democracy.”
Jeter stressed the need for Abuja’s anti-corruption campaign to continue on a long-term basis and canvassed that Nigeria-U.S. economic programmes should pay attention to sectors in America where there are natural affiliations.
Former Assistant Secretary of State on Africa, Herman Cohen, remembered when Nigeria was at par with South Korea, Malaysia and other Far East countries which were developing at the same pace as Nigeria in the sixties, but have today widened the gap.
He remarked though that a window of opportunity for growth has been opened by the present administration.
“As Nigeria grows, so does Africa. There is real opportunity here. With the development we see, for the first time in decades, there is not much apprehension over investments in Nigeria and the political situation is encouraging. It is important that the flame of democracy, anti-corruption and economic development continues without falling back again.”
The highpoint of the event was the election of ANAC President, which was contested by Okey Mbonu, Lateef Kareem and Stanley Onye.
Mbonu, an Attorney and Commissioner for Housing in Prince Georges County, Maryland defeated the other two.
Kareem, a Chicago based physician, came second.
Temitope Ajayi, a delegate from San Fransisco, California, beat the other delegates for Vice President. Sam Agbebi and Bright Aregs both won for the posts of House Whip.
Those elected to the Upper House included Abdul Lateef Kareem, Martin Okafor, Colin Atobajeun, A. Igwebuike and Akeem Bello.
Peter Agho and David Ogunnaike were elected for a three-year term.
Seven others elected for a two-year term were Eric Ula-lisa, Ola Aina, Samuel Isokpunwu, Paul Oranika, Paul Ikhimien, Stanley Onye and Robert Igbinovia.
The occasion was well attended with delegates and participants engaging the representative of Obasanjo, Felix Pwol, who tried his best to answer the loads of questions on issues ranging from anti-corruption to development.
A visiting scholar, Sokoto Mohammed and S. Adesanya, leading a Nigerian based political think tank group, gave updates on Nigeria, with S. Adesanya lamenting the poor state of labour wage.
Mohammed concentrated on updates on the progress made in Nigeria in recent months, but drew applause when he listed anti-corruption cases being prosecuted.
Obasanjo, sent a personal representative and Finance Minister, Ngozi Okonjo Iweala and a host of other officials.
The President was honoured with the first ANAC award for his anti-corruption and economic programmes.
The organisation is slated to continue its lobby in the U.S. on behalf of the estimated six million Nigerians in North America and to send a delegation to Nigeria and open an Abuja office early 2006.
Meanwhile, the All Nigeria Peoples Party (ANPP) may query its governors who are supporting Obasanjo’s third term quest.
Governor Bukar Abba Ibrahim of Yobe State is one of those who may face the wrath of the party’s leadership when it meets on January 28, 2006.
Reacting to Ibrahim’s endorsement of the third term tenure, both ANPP National Chairman, Don Etiebet and Deputy National Chairman (North), Jeremiah Useni, distanced the party from the position.
Etiebet said the ANPP leadership has not discussed the third term agenda and “as far as I am concerned, the whole thing is speculation, which I will not react to.”
Useni was more forthcoming. “The answer I will like to give you here is that the matter has not been discussed by the party. There is a lot of hearsay and rumours going on, some appear to be true, some appear not to be true.
“Yes, I read in the papers this morning that one of our governors supports the third term. It is not everything you read in the papers you fight over. We are an organised party, the chairman hasn’t contacted the governor yet to know whether what he read in the papers is true.
“We will raise the issue at our next National Executive Committee (NEC) meeting. This one we read in the papers, some of the governors involved will tell us what happened. Maybe they have been misquoted.”
Both men spoke at a press briefing on Monday at the ANPP’s national secretariat in Abuja where Etiebet unveiled the party’s programme which begins with the distribution of new membership cards, registration and production of new membership register in January to elective congresses and convention in April 2006.
Meanwhile, the Conference of Nigerian Political Parties (CNPP) has berated Ibrahim, for endorsing the third term.
A statement issued by its National Publicity Secretary, Osita Okechukwu, said “the CNPP was thoroughly embarrassed by the volte-face of Bukar Ibrahim, who before now, had supported our gruesome struggle to halt the slide of Nigerian democracy into fascist dictatorship.
“The danger of the anti democratic statement of the third term newly recruited governor is that we envisage in the days ahead where more governors are whipped into line by the old carrot and stick tactics.”
The CNPP argued that Ibrahim might have been influenced by the fear of the EFCC or the possibility of benefiting from an extension of Obasanjo’s tenure.
At Last, Bonga Oil Field Begins Production
Project costs $3.6bn, says Shell
By Mike Oduniyi, 11.28.2005
After several delays and mounting anxiety over its running cost, the Bonga deep offshore oil field has finally begun production, raising Nigeria’s daily oil output by 10 percent to 2.63 million barrels per day (bpd). Nigeria currently produces 2.4 million bpd of oil.
Shell Nigeria Exploration and Production Company (SNEPCO), the operator of the field, however, put the total cost of developing the field at $3.6 billion (N468 billion).
The Senate Committee on Petroleum Resources only last week launched an inquiry into an alleged variation in the overall cost of executing the Bonga project.
Announcing the start-up of the huge field, the Managing Director of SNEPCO, Mr. Chima Ibeneche, said production actually commenced Friday, after suffering two years of delay and that the first cargo of crude will be exported before the end of this year.
Bonga field, according to Ibeneche, will hit its peak production capacity of 225,000 barrels per day (bpd) of crude oil and 150 million standard cubic feet of gas per day, early next year.
Ibeneche added that the additional oil output from Bonga field is expected to come in handy to meet the present growing demand for oil in the international market.
“Bonga will deliver excellent value to the government and people of Nigeria, co-venturers and to the shareholders for many years to come… Production from the field is an important step in support of the Nigerian government's aspiration to raise the country's crude oil production to some four million bpd by 2010.
“Bonga opened up new discoveries during the process of doing the work. We intend to continue to produce at over 225,000 bpd for over 10 years, meaning that we might have the possibility to produce up to one billion barrels through its lifetime. That brings the operating cost to a very competitive level when compared with elsewhere in the world,” he added.
On the controversial issue of the actual cost of the project, Ibeneche said the expenditure had risen from the initial estimates of $2.9 billion to $3.6 billion due to challenges SNEPCO encountered in developing the Bonga field, which he said was the first of its kind in Nigeria.
He maintained that even the actual cost incurred was still very much competitive with what obtained in the West African sub-region as well as in the Gulf of Mexico.
“To understand the issue of cost, we need to appreciate the complexity of the Bonga project. The Bonga FPSO alone is huge. It is not surprising that when we have such a complex pioneering project that you will have some cost overruns from some surprises. What is important to note is that we have dealt with those issues and today we are able to announce that we have started production in Bonga,” he stated.
Chairman of the Senate Committee on Petroleum, Senator Lee Maeba last week queried the failure of Shell to bring the field on stream as scheduled, which he noted could mean that the Nigerian government may get little or nothing from the profits of crude exported from Bonga.
The committee had employed a New York-based tax management consultant, Sloane, Burford & Fulbright to assist in investigating the project costs.
The Bonga field was developed under a Production Sharing Contract (PSC) agreement signed between SNEPCO and the Nigerian National Petroleum Corporation (NNPC), in 1993, meaning Shell will bear 100 percent funding for the project and will first recoup all its investment before subsequent sharing of the profit with the Nigerian government.
However, defending the viability of the project, the SNEPCO boss said the prevailing high oil prices meant that the time Shell would recoup its investment “will be faster than earlier anticipated, which has in a way mitigated against some of the impact of the cost overrun we see so far.”
Oil price closed yesterday at $57 per barrel compared to the average price of $16 per barrel in 1993 when the Bonga field license was awarded.
“We are cooperating very well with the Senate investigation because we know that the PSC that we are doing is transparent and we are working with NNPC/NAPIMS to go through the PSC procedures in justifying cost for production.
“It is also important to note very clearly that when you compare the cost of Bonga with other development of its size in the West African sub region, it is competitive. Today, up to this point, we have spent $3.6 billion to bring it to first oil,” Ibeneche stressed.
Located in Oil Prospecting Licence 212, the field is situated in water depths of more than 1000 metres. Production facilities comprise one of the world's largest Floating Production Storage and Offloading (FPSO) vessels and deepwater subsea infrastructure.
The field's initial 16 subsea oil producing and water injection wells are connected to the two million barrel storage capacity FPSO by production flowlines, risers and control umbilicals.
Other joint venture partners in the field are ExxonMobil, 20 percent, Nigerian Agip, Exploration Limited, 12.5 per cent and Elf Petroleum Nigeria Limited 12.5 per cent.
Nigeria begins oil production in first deepwater field
By Yakubu Lawal, Asst. Energy Editor
NIGERIA has recorded a major breakthrough in deepwater operations with the commencement of commercial production in its first deepwater oil field at the weekend.
Until the take-off of production at the Bonga field, the country's oil exploration and exploitation activities had been concentrated on the shoreline or shallow water belt.
The Bonga field is located 120 kilometres offshore Nigeria.
The project is being executed by Shell Nigeria Exploration and Production Company (SNEPCO), a subsidiary of Shell Petroleum Development Company of Nigeria Limited (SPDC) at a cost of about N482.4 billion ($3 billion).
Going by SNEPCO's operational scheme, the first export of crude oil from the field will begin before the end of this year.
Among others, the field is expected to increase Nigeria's oil output by 225,000 barrels and 150 million standard cubic feet of gas per day.
SNEPCO's Managing Director, Mr. Chima Ibeneche, who announced the production of first oil from the Bonga field yesterday in Lagos, said production would hit 220,000 barrels per day by the first quarter of next year.
"SNEPCO today announced the start of crude oil production from the Bonga deepwater oil and gas field, 120 kilometres offshores Nigeria," Ibenechi said.
He added: "The target is to attain the current nameplate production of 225,000 barrels of oil and 150 million standard cubic feet of gas per day as soon as possible".
Ibeneche put the development cost of first oil at the Bonga field at $3.6 billion, explaining that the field was discovered and developed by Shell using its technology and deepwater experience.
Nigeria, which currently produced 2.4 million barrels per day will with this development, have its output increased by 220,000 barrels daily.
The feat has also enabled the country to join other deepwater production zones and nations like Brazil, North Sea, Mexico, Norway and Angola.
Nigeria and Angola are currently the only African countries producing oil from the deepwater region.
Ibeneche also quoted the Executive Director of Shell Exploration and Production Worldwide, Mr. Malcolm Brinded, as saying: "Bonga begins a new chapter in Nigeria's oil and gas production and an important contribution to new material oil production for Shell."
Brinded said the project targets an increase of about 10 per cent in Nigeria's oil production and about 25 per cent rise in Shell's operations in the country.
The Shell chief added that Nigeria's deepwater is a frontier growth opportunity for the Anglo-Dutch group, which had equally made several discoveries offshore in recent times.
Brinded said: "Bonga is a highly valuable asset for Nigeria and for Shell, and the field is coming onstream to meet demand at a time when energy prices are high."
Ibeneche said that production from the field was an important step in the company's support of the Federal Government's drive to raise the country's crude oil production to four million barrels per day and 40 billion barrels reserve by 2010.
The SNEPCO chief said considerable progress was made in developing local content, capacity building and technology transfer in the execution of the Bonga field.
He stated that Shell invested heavily in local training programmes, with Nigerians making up 75 per cent of Bonga's core offshore officials, adding that the figure could increase to over 80 per cent.
Associated gas from Bonga, Ibeneche said, would be piped via the Shell operated 268 km 32 inch offshore gas gathering system to the Nigeria Liquefied Natural Gas Limited for export to the United States (U.S.) and Europe.
The oil, with an API of about 30, will also be exported from the Floating Production Storage Offloading (FPSO) platform to Europe and the U.S.
The SPDC total daily production amounts to one million barrels on average in the country.
The first oil from the Bonga field was initially scheduled for the third quarter of 2003 while the initial cost was estimated at $2 billion.
But Ibeneche said that such delays and variations in cost were expected in such a complex engineering project, which attracted the best technology in Shell's group.
The Bonga field located in Oil Prospecting License (OPL) 212, was awarded in 1993 during the first round of bidding for Nigeria's deepwater frontier average. It was developed under Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC).
The field, which covers about 60 square kilometres, is situated in more than 1,000 metres water depth and a distance of over 120 kilometres offshore Nigerian waters.
Equator Begins Drilling Operations Offshore Nigeria
Equator Exploration 11/28/2005
URL: http://www.rigzone.com/news/article.asp?a_id=27273
Peak Petroleum Industries Nigeria Ltd. and Equator Exploration have commenced drilling their first well in the OML 122 license area, offshore Nigeria.
OML 122 is located 25-60 km offshore in water depths of 40-300 meters and covers an area of 1,295 sq. km on the Western Niger Delta, east of Shell's giant Bonga Field (estimated 1.4 billion barrels) on OML 118 and southwest of Shell's EA Field on OML 79.
OML 122 has two suspended oil and gas discoveries that were drilled in the 1970s. The well currently being drilled by Peak/Equator, the B-1 DX well ('B-1 DX'), is an exploratory-appraisal well on the field discovered by the B1 well ('B-1') drilled by Deminex Oil in the 1970's. The B-1 well tested an oil zone and encountered several gas zones, which recently reprocessed 3D seismic suggests are of significant size. The current well will test further up-dip, deeper sands that were water-bearing in the original B-1 well. It is planned to be drilled to a target depth of 3,100 meters over a 35 day period by the Bulford Dolphin semisub. This will be the first of two wells to be drilled by Peak and Equator on OML 122 over the next three months. All target intervals will be logged with complete logging suites and flow tested.
A second exploration well planned for January 2006 will test a promising, large structure south of the B-1 DX well in a water depth of 135 meters. This structure is covered by 3D seismic data acquired in 1999 and recently re- rocessed and interpreted by Peak, Equator and their technical advisors. The Owanare prospect has estimated potential hydrocarbon volumes of over 1.5 TCF.
The aim of the initial two wells being drilled by Peak/Equator is to prove-up significant volumes of gas as potential supply for the numerous gas-utilisation projects currently underway or in planning stages in Nigeria within close proximity to OML 122. The secondary objective is to find commercial volumes of oil on the block.
Commenting on the spudding of the first well on OML 122, Wade Cherwayko, Chief Executive of Equator, said:
'Both Peak and Equator are pleased with the rapid progress made in the evaluation and appraisal of this high potential block considering the joint venture agreement was only signed in April 2005. The B-1 DX exploratory-appraisal well is aimed to prove significant volumes of gas and additionally targets a potentially larger pay zone in an oil reservoir that previously tested high quality crude oil at significant flow rates in the B-1 well. We are optimistic about the prospects for success given the largely appraisal nature of this first well.
'Beautiful' time for crude
By Upstream staff
Oil hovered above $57 a barrel on Monday and Opec ministers said they saw no need to trim their output in a "beautifully" balanced market.
Opec is due to meet in Kuwait on 12 December with oil well below its end-August record of $70.85 and plenty of fuel in stock for the start of the US and European winter.
"The market is beautiful, it is in balance and inventories are at a very comfortable level," Saudi Arabia's Oil Minister Ali Naimi told reporters at a conference in Kuwait.
Naimi said on Saturday there was no thought of cutting Opec's 30 million-barrel-per-day output, Reuters reported.
Instead the cartel wants to moderate prices, he said after a meeting of Arab Gulf producers in Riyadh.
Consuming nations have repeatedly called on Opec to do its utmost to bring down prices that have acted as a brake on economic growth.
US crude fell on Monday when the market reopened after last week's Thanksgiving holiday. It was down $1.21 at $57.50 at 1057 GMT, catching up with losses chalked up by Brent crude in London at the end of last week.
Although well below its end-August peak, oil is still up by a third since the start of the year.
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28 November 2005 11:59 GMT | last updated: 28 November 2005 12:09 GMT
Balance..good to be back! I will continue to post any news item related to the GOG. IMO this area is going to be the "biggest show on Earth" for a number of years. They have only scratched the surface over there..deep-water is where the money is.I ,also appreciate your excellent DD. Mr. R.
Bonga delivers at last
By Upstream staff
Crude production has finally begun at Shell's Bonga deep-water oil and gas field off Nigeria.
Bonga, located 120 kilometres offshore in OPL 212, is more than two years behind its start date schedule and massively above budget, costing about $3.6 billion.
Shell is aiming for peak production of 225,000 barrels of oil and 150 million cubic feet of gas per day as soon as possible, the company said today.
Shell E&P Executive director Malcolm Brinded said: "The project targets an increase of around 10% in Nigeria's oil production and around a 25% increase in Shell operated production in the country."
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28 November 2005 10:54 GMT | last updated: 28 November 2005 10:56 GMT
Legislation set to cause major shake-up in the local oil patch
Nigeria bill gives power to indies
NIGERIA'S National Assembly is debating a new bill covering local participation that will lead to a big shake-up in the country's upstream oil sector if it is passed, as planned, before the end of this year.
The Indigenous Oil Companies (Regulations&Fiscal Terms) bill was due to come before the House of Representatives this week, having passed final reading in the Senate earlier this month.
The bill, which seeks to empower indigenes in the Nigerian oil patch, would be retroactively applied to all indigenous exploration and development licences and impose a 50% local content target on licences held by non-indigenous companies.
If applied, its impact will be felt right across the upstream sector, with local content tightly monitored.
Firstly, the bill exempts from government participation all indigenous petroleum operations pumping less than 50,000 barrels a day of oil equivalent. To qualify as indigenous, an oil company shall be at least 60%-owned by Nigerians with Nigerians constituting 60% of the board.
Moreover, all E&P licences falling vacant in the future as a result of revocation, relinquishment or termination shall be granted only to indigenous companies, according to the chairman of the Senate Upstream Petroleum Resources Committee, Senator Lee Maeba.
The minister shall set "clearly defined targets and programmes for continuously increasing the level of indigenous participation in the Nigerian petroleum industry".
The bill also insists that whatever Opec constraints may apply elsewhere, indie producers pumping less than 35,000 barrels per day shall be permitted to produce the technical maximum allowed by the Department of Petroleum Resources.
A mechanism is foreseen to force a ministerial review of the bill's effectiveness within three years of its enactment and regularly thereafter at two-year intervals.
The bill requires that all blocks, whether the licensee is local or foreign, that remain wholly undeveloped after 10 years should revert to the government for re-allocation.
Additionally, blocks where the lessee has left more than half undeveloped shall see that fallow portion revert to the state, although local indies may be exempt from this provision.
Sweeping exemptions from clauses in the Petroleum Act of 1969 are envisaged for indigenous outfits, including provision for ministerial discretion in determining the duration of an exploration licence "for a minimum period of five years and an aggregate period of 10 years".
While petroleum profit tax for foreign oil companies shall be maintained at 85%, indigenous companies shall pay a flat rate of 60% where output does not top 50,000 bpd.
Indies will also benefit from having their royalty payments "graduated according to production tranches" in fields located in water depths of less than 200 metres.
Other provisions have been mooted before but failed to pass the National Assembly. These include a clause to allow indies twice as long as foreign companies to pay their signature bonuses the Senate originally proposed thrice the time allotted to foreign suitors and to pay in local currency.
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25 November 2005 00:01 GMT | last updated: 25 November 2005 08:22 GMT
Is Nigeria The Next Persian Gulf?
By Andy Rowell, AlterNet
Posted on November 10, 2005, Printed on November 26, 2005
http://www.alternet.org/story/27997/
This week there will be ceremonies in over 30 countries from India to Ireland, Pakistan to Bangladesh, from the UK to the US in memory of the activist Ken Saro-Wiwa and eight of his compatriots who were executed by the Nigerian military 10 years ago.
On November 10, 1995, Saro-Wiwa and the others were hung after a sham trial condemned as "judicial murder" by Britain's then Prime Minister John Major. Their real crime had been to take on the might of the oil giant Shell and one of the world's most brutal military dictatorships.
Saro-Wiwa and the others were from Ogoniland, a small densely populated region of the Niger Delta, where Shell had found oil in the '50s. While the company had grown rich from the profits extracted from the Delta, the communities lived in poverty, lacking basic facilities such as health care and clean water. In the early '90s, Saro-Wiwa and the Ogoni mobilized, holding a rally in January 1993, where some 300,000 Ogoni protested against Shell.
"The march is against the devastation of the environment," said Saro-Wiwa. "It is against the non-payment of royalties. It is anti-Shell. It is anti-federal government, because as far as we are concerned the two are in league to destroy the Ogoni people."
Views like these set him and the Ogoni on a collision course with the authorities that would lead to his repeated detention, torture and murder.
In the 10 years since their deaths, little has changed in the Niger Delta. Oil remains its curse. The communities are still locked into a cycle of extreme poverty, widespread unemployment, environmental pollution, and social injustice that has increasingly manifested itself in violent conflict.
The spiral of violence has intensified in the last few years with the "bunkering" or siphoning of oil from pipelines, which is then sold onto the black market. This generates vast sums of cash with which rival groups have been able to buy arms. When one of those involved, Alhaji Dobuko Asari, leader of the Niger Delta People's Volunteer Force, threatened all-out war in September 2004, the international oil price rocketed to $50 per barrel for the first time. Although a peace deal was signed, Asari was later arrested and charged with five counts of treason last month. He could face the death penalty if convicted.
The oil-fueled violence continues. Just last week, Amnesty International issued another damning report. "Today, the exploitation of oil in the Niger Delta continues to result in injustice, violence and deprivation" it concluded. Amnesty highlighted how in February this year, soldiers from the Nigerian military fired on protesters at Chevron's Escravos oil terminal. One demonstrator was shot and later died from his injuries, and at least 30 others were injured.
"It is like paradise and hell. They have everything. We have nothing" argues Eghare Ojhogar, the chief of the local community. "If we protest, they send soldiers. They sign agreements with us and then ignore us."
That same month, February, at least 17 people were reported to have been killed and two women raped when the military raided the community of Odioma in Bayelsa State in gunboats. Although the military had been ostensibly sent to arrest members of an armed vigilante group, the roots of the violence lay in a dispute between communities over control of land planned for oil exploration by Shell Nigeria. Oil remains at the heart of the conflict. Oil is the conflict of the Delta.
But another dangerous ingredient is being added to the tinderbox of the Niger Delta. It is the gas-guzzling requirements of the United States and its unstoppable thirst for oil and gas. Within the next few years some 25-30 percent of American oil will come from Africa, primarily West Africa and Nigeria.
While the U.S.'s response to 9/11 has been to wage wars in Afghanistan and Iraq under the banner of protecting national security, the U.S. has also sought new ways of protecting economic security. This means protecting energy diversity, and getting your oil from as many places as possible, especially outside of the troublesome Persian Gulf. America now sees Nigeria and the other countries in the Gulf of Guinea as the "Next Gulf" -- a counterweight to the Middle East. Increasingly Nigeria will play a strategic role in America's energy needs, whether the communities of the Delta want it or not.
There have been repeated calls from a variety of influential right-wing and neo-conservative think-tanks in Washington to declare the Gulf of Guinea an area of "vital interest" to the U.S., which needs to be protected by American military might. Among those calling for greater U.S. intervention are the Heritage Foundation, the American Enterprise Institute and Center for Strategic and International Studies.
In July this year, CSIS recommended that the U.S. should "make security and governance in the Gulf of Guinea an explicit priority in U.S. foreign policy." To this end, it recommended a "special assistant to the President and Secretary of State to coordinate U.S. policy in the region." It also recommended that the Gulf of Guinea should become a regular item on the agenda at G8 meetings.
"EUCOM can play a leading role in regional stabilization," David Goldwyn from CSIS's Energy Program says, "and their British and French equivalents can help too." Britain and the U.S. already have a close working relationship called the UK-US Energy Dialogue where they have agreed to cooperate on "promoting the security and diversity of future international energy supplies." This includes Nigeria.
America is becoming more dependent on Nigeria as every day passes; not just for oil but for imported natural gas. The country's vast gas reserves are just beginning to be developed after decades of being flared; a process that caused huge ecological and social problems. As U.S. imports of imported natural gas rocket, Nigeria will become a key supplier. Chevron calls Nigerian gas "very, very important for the U.S.," offering "powerful reasons to strengthen U.S. relationships with Africa."
These strategic reserves need to be protected. Over the last few years, EUCOM, the U.S. European Command has become increasingly interested in Africa, both from an energy and terrorism perspective. Earlier this year in June, General Wald from EUCOM spoke at a major oil and gas conference in London on "measures to protect oil operations in the Gulf of Guinea." Three months later Wald's boss, General Jones, the head of EUCOM, told a Senate Foreign Relations Committee that because 25 percent of America's oil coming would becoming from Africa within the next few years "security cooperation is more important now than ever."
Slowly but surely America is intensifying its military operations on the continent. Last month, Pentagon officials secured agreements with eight to 10 African nations to allow the U.S. military to utilize air fields and other suitable sites to establish "cooperative security locations," from which it can launch military strikes.
America is also quietly increasing its military presence in Nigeria -- indeed one of the people killed in the recent plane crash near Lagos was a U.S. Army officer assigned to EUCOM and stationed in Nigeria to provide security assistance between the U.S. and Nigerian military. One manifestation of this cooperation is the emergence of American weapons in the Delta. "There is clearly an increase in U.S. weapons in the hands of the Nigerian army and navy," argues Patrick Naagbanton, Director of the Niger Delta Project for Environment, Human Rights and Development.
Many in the Niger Delta worry about increasing American military intervention. What is best for American energy security is not best for the millions of people who live in the Delta. It can only heighten tensions and in all probability lead to more violent conflict.
Ledum Mitee is the current President of MOSOP -- the Movement for the Survival of Ogoni People, the organization that Saro-Wiwa once led. He was imprisoned along with Saro-Wiwa, but later freed. "The American policies that have had a doubtful effect in the Middle East, have therefore focused their attention around the Gulf of Guinea," he says. "It is not people-centered. It is just barrel-centered. It could become so bad that in five year's time it will be very difficult to get a barrel of oil without a life."
Daukoru restates transparency in 2005 oil block allocations
By Yakubu Lawal, Asst. Energy Editor
AHEAD of December date for the signing of Production Sharing Contract (PSC) with prospective investors in the 2005 oil block licensing rounds, the Minister of State for Petroleum Resources, Dr. Edmund Daukoru, said transparency would be the watchword throughout the duration of the exercise aimed at enlisting new players into the upstream sector of the industry.
He said for the Chinese and the Korean firms, there has not been any review as far as their participation in the bidding exercise was concerned.
A statement issued by the Deputy Director, Press and Public Relations of the Ministry, Mr. Emmanuel Agbegi, said the government welcomed the bold initiative by local entrepreneurs in the downstream sector to enter into partnership with the majors to invest in the industry.
"However, the Honourable Minister, is unaware of a review of the understanding entered into with the China National Petroleum Company (CNPCO) and Korea National Oil Company (KNOC) at this point in time", Agbegi stated.
According to him, at early stage in the process, some of the majors had offered consultancy services only, which government found inadequate to address the necessity for a fully committed core investor.
The statement stressed that should there be a review of any strategic understanding with the Chinese and Korean oil companies, all interested parties would be made aware of such an outcome in line with government's commitment to openness and transparency in all its activities in the oil and gas sector.
The Director of Petroleum Resources (DPR), Mr. Tony Chukwueke, had stated that all the PSC agreements for the licensing round would be signed by the Minister of State in the first week of December 2005, noting that any investor, who failed to pay the signature bonus by that day would forfeit the offer, adding that only those who can back their bid with cash that will be given the blocks.
According to him, all those who have submitted performance bond must also back it with cash, stressing that government will not rely on promises as it intends to avoid the mistake of 1993 award.
Following the two companies' response to Federal Government's call to establish Independent Power Plants (IPPs) in Nigeria, South Korean and Chinese companies had participated in the bidding round to be able to get more oil blocks to be in upstream sector of the industry.
Koreans investors, comprising the Korea National Oil Company (KPOC), the Korea Electric Power Company (KEPCO), Daewoo Shipbuilding and Marine Engineering Company and POSCO Engineering and Construction Company Limited, signed on Monday a Memorandum of Understanding (MoU) with the Ministry of Petroleum Resources to among others, build an IPP with generating capacity of 2,250 mega watts of electricity and to construct 1,200 kilometers of pipeline that will transport natural gas from Niger Delta fields up to the Abuja network grid.
For the investment, the Koreans are to get two deep offshore blocks and one shallow water block from the 14 acreage the Nigerian government had earmarked for strategic downstream partners.
The China National Petroleum Company (CNPCO) on the other hand, will get four oil blocks for its willingness to invest in the construction of hydropower plant in Mambila, Plateau State, with over
1,000 mw capacity, as well taking controlling stake in the 110,0000 barrels per day (bpd) Kaduna refinery.
Daukoru had told newsmen before the exercise that the MoU signed with the Korean investors represents a milestone in Nigeria's quest for foreign investment to jump-start her economy.
Describing it as one of the achievements of President Olusegun Obasanjo's drive for foreign investments in the last six years, Daukoru said that the investment relationship entered into with the South Korean was one with enormous potential with immediate benefits for Nigeria.
"They are areas where Nigerian needs investment. They (Koreans) come to us and we offer them opportunities for investment on a win-win basis," said Daukoru.
"Korea consumes as much crude oil as we produce in one day. They consume 2.1 million bpd and our production is slightly more than that at 2.4 million bpd. They need access to crude oil, so we are offering them oil blocks in exchange for them building a pipeline of 1,200 km to Abuja.
"They are also prepared to build power plant that will generate 2,250 mw. That is the immediate package," said the minister.
He said further that Daewoo is desirous to setting up a shipyard somewhere in the Niger Delta, as well as partner the Nigerian government to run a crude oil and Liquefied Natural Gas (LNG) cargo fleet, where the Federal Government will retain some equity initially in trust for the Nigerian company and Korean investors having about 49 per cent equity.
"Also with the Chinese, we recently packaged a deal involving operatorship of the Kaduna refinery plus hydro scheme in Mambila to generate thousands of megawatts of electricity. In exchange for that we are offering them four oil blocks. So I hope all these will send a powerful signal to all others who may be just on the fence about making up their minds," Daukoru said.
Nigeria is currently facing energy problem as electricity generation by the Power Holding Company, which stood at around 3,000 mw is just half of the national power demand put at 6,000 MW.
However, at a meeting held in Abuja with applicants in the 2005 Licensing Round, Chukwueke said Korean and Chinese investors would however, be required to also bid for the blocks already dedicated for downstream investors.
The DPR boss said the implication of this while the Koreans and Chinese will have the right of first refusal, other companies can also bid for the 14 oil blocks but would have to bid higher than what these companies are offering to clinch the blocks.
"The Korean and Chinese are participating in the 14 blocks and other blocks in the open bid. It is clear the government will not award blocks outside of this (2005 Bid) process," he said.
Chukwueke said the deadline for payments for the oil blocks have been further extended by two months to
December 15. The deadline had earlier been shifted from October 2 to October 14, 2005. Following the criticism that trailed the high prices offered by the winners of oil blocks awarded at the bidding conference held last August in Abuja, the DPR directed the companies to submit performance bond to indicate their ability to pay the signature bonuses offered.
"The response so far has been largely successful. The companies as at close of business (last Friday), posted bonds worth $1.2 billion out of the $2.6 billion that we expected. If you include the 10 per cent LCV that we did not require to post bond, we will come to 50 per cent of the money that was targeted," said Chukwueke.
He listed indigenous oil producer Conoil, fuel marketing company Oando Plc, India's ONGC and the
Korea National Petroleum Company as some of the firms that had submitted proof of payment, adding that the Federal Government had also dropped the idea of granting the right of first refusal to participants at the bid round.
"Majority of the serious players pledged the bonds," he said.
"However, government recognised that bond cost money and that some of the new players in the oil and gas sector required a bit more time to be able to find these bonds. Mr. President has directed and the Minister has instructed me that we have to find a way to ensure that genuine investors who have difficulty posting these bonds have enough time to find them.
"So we have decided that we will give those who have asked us more time, not to find the bond but to bring the money. The period of bind is over. What the bond has served us is now to invite those who have pledged the bond to government to come forward for the finalisation of the PSC agreement.
"The minister has agreed to sign all the PSC agreement in one day. So we are trying to put together a signing ceremony around December 15, that time all the people who have posted bond and all those who have asked for extension should be in position to offer the money. By this, no one will accuse the government of depriving them of the opportunity to participate in this round. So we will give an extra two months for all those who have asked for extension," said the DPR chief.
The results of the bid conference showed that 44 blocks out of the 77 blocks on offer were allocated.
Investors snapped up eight blocks in the deepwater region, which was to fetch about $1.0 billion (N128 billion). Investors won five blocks in the Anambra
Basin, two in the Benue trough, while four blocks were won in the Chad Basin. All the six blocks put on offer in the onshore Niger Delta were snapped up, as well as the six acreage in the continental shelf
as of 9-30-05..I'm showing Soros holding 1,043,150 shs of PXD X todays close of $53.91= beaucoup!!!!
it's ok Peter... Dan Quayle couldn't spell potato!
George Soros Sells Oil Producers, Buys Oil Distributors
Billionaire investor George Soros has sold most of his holdings of oil producers during the last quarter, instead he has bought oil equipment makers, services companies and distributors.
As oil prices hit multiyear highs during the last quarters, Soros dramatically reduced his holdings in oil producers. The number of oil producers in his holdings was reduced from 17 to 8 during the second quarter, then to only 1 in the third quarter. On Sept. 30, the only oil producer he owns is Pioneer Natural Resources Co. (PXD). The industrial weight of oil producers in his holdings decreased from more than 19% to only 2.8%. Burlington Resources Inc. (BR), Devon Energy Corp (DVN) and ExxonMobil Corp.(XOM) are among the oil producers he has sold during the second quarter. ConocoPhillips (COP), Chevron Corp. (CVX) and 4 other oil producers are among the sold during the third quarter
As he sells oil producers, George Soros buys oil equipment makers, service companies and distributors. The number of companies he owns in this industry has increased from 2 to 6. He bought BJ Services Corp. (BJS), Halliburton Co. (HAL), Schlumberger Ltd. (SLB), Noble Corp. (NE). the weight of this industry in his equity holdings has increased from 0.6% to 3.6% during the third quarter.
As one of the largest hedge fund managers in the world, with approximately $13 billion of assets under management, Soros ranked as the 55th richest man on earth. Known for his excellent investment record and macroscopic insight in economic trends, what prompted Soros's recent oil move? Did he think that oil stocks are due for correction? Did he see something that others have not seen?
India joins west African oil gush India offers credit in west Africa
By Hiral Vora
Mumbai - India is offering credit of up to $1 billion (R6.6 billion) to build power projects, railways, refineries and even stadiums in oil-rich but poor west African nations, as it seeks to quench its growing thirst for foreign oil.
India, which imports 70 percent of its crude oil, has devised a multipronged strategy to ensure future oil supplies from overseas oil and gas properties. While political weight has been key, India is now also offering financial and industrial assistance.
"India has decided to offer lines of credit up to $1 billion on a government-to-government basis ... in exchange for oil exploration rights," said Talmiz Ahmad, a senior Indian oil ministry official.
"West Africa is a long-term investment destination for India."
Ahmad said India would offer commercial partnerships and joint ventures to a group of African countries in oil, roads, railways, information technology, power and ports under the partnership development initiative.
"This model is definitely worth pursuing," he said, noting the Africans now seemed to realise that the spoils of their oil should go into infrastructure instead of the pockets of oil majors.
A $6 billion infrastructure investment deal struck in Nigeria this month by ONGC Mittal Energy, a joint venture between India's state-run Oil and Natural Gas Corporation (ONGC) and the world's largest steel maker, Mittal Steel, is seen as a major breakthrough in this strategy.
The offer to the only west African member of the Opec oil cartel, in return for exploration blocks, could not be refused because Nigeria needs more foreign investment in its decayed industrial base.
India will now look to a group of eight west African countries in a special co-operation model called the Team-9 initiative, under which India offers credit for projects set up by Indian companies through the Export Import Bank of India.
Other Team-9 countries are Burkina Faso, Chad, Ivory Coast, Equatorial Guinea, Ghana, Guinea-Bissau, Mali and Senegal. Ahmad said India would also approach Sao Tome, Niger, the Democratic Republic of Congo and the Republic of Congo.
Financial assistance for infrastructure was an important aspect of any oil deal with developing African countries, said ONGC chairman and managing director Subir Raha.
ONGC's presence in Sudan's Greater Nile project enabled it to build a $259 million pipeline from the port to the oil production facility and then transfer it to the Sudanese government, he said.
Financial assistance is not new in the oil industry, but India's willingness to offer such help to countries that struggled to secure credit privately was a positive step, said Praveen Martis, an analyst with Wood Mackenzie.
"These kinds of assistance are no doubt helpful. The Chinese have been doing it in countries like Sudan and Kazakhstan, where they have a substantial oil equity investment, for quite a while now."
- Reuters
Published on the web by Business Report on November 25, 2005.
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© Business Report 2005. All rights reserved.
PGS sweeps Devon block
PETROLEUM GeoServices' seismic vessel Ramform Viking has started a 1200 square-kilometre 3D seismic survey on Devon Energy's Nigerian Block OPL-242 with its own chase boat MV Remus in support, writes Barry Morgan.
The job is slated for completion in mid-December, after which it has a full order book off West Africa before heading back to the North Sea at the end of the current season.
Veritas expects its own vessel Seisquest on Nigerian Block OPL-320 for Pioneer Natural Resources before the end of the week where a 1600 square kilometre 3D survey is slated for completion during the first week of January. The boat will then head for the Benin embayment for Kerr-McGee where 1000 square kilometres of 3D is planned for the shallows.
The Seisquest is fully committed through to October 2006 in what has become a very tight market.
Meanwhile, GX Technology's MV Discoverer will finish up on its 2D programme on the shelf, dubbed "Nigeria-Span", linking up with the Equator-Span and Congo-Span surveys further down the littoral.
The swamps and shallows are also active with Chinese National Petroleum Corporation unit BGP commanding two crews in the Delta for Emerald Energy Resources, both on OPL-229. BGP is mobilising the MV Yak for a shoot in shallow marine acreage while another crew has started a survey on Clarendon in the Brass and Akassa local government area.
Another crew will mobilise before the end of the year for Shell's OML-31 licence.
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18 November 2005 00:01 GMT | last updated: 18 November 2005 00:01 GMT
Chevron on track in Africa
By Upstream staff
US supermajor Chevron said its African projects under development, from pipelines to oil and gas ventures, are slated to come on stream on schedule.
The first gas from the outfit's $500 million, 390-mile West African pipeline development which crosses Nigeria, Benin, Togo and Ghana, will be delivered in January next year, according to Chevron Nigeria executive Olanrewaju Kalejaiye.
Kalejaiye, terminal superintendent at Chevron Nigeria's Escravos Operations, said the company was anxious to invest in Africa, Reuters reported.
"I'd say all our projects in Africa are progressing well. All are due to come onstream on schedule," Kalejaiye said.
"Our upstream growth areas include development of natural gas resources with gas utilisation projects in Nigeria and Angola, we've entered deepwater in the Nigeria/Sao Tome joint development zone as 51% equity holder and operator and we returned to Libya this year when we were awarded an exploration licence for the offshore Block 177," he added.
"Chevron's also exploring offshore Equatorial Guinea in the Rio Muni basin," Kalejaiye said, but declined to name prospects.
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22 November 2005 19:41 GMT | last updated: 22 November 2005 19:41 GMT
ONGC keen to take Akpo stake
By Upstream staff
India's Oil & Natural Gas Corporation (ONGC) is bidding for a stake in the Akpo field, off Nigeria, according to reports.
The stake in the yet to be developed Akpo oil and gas field was put up for sale earlier this year by Nigerian player South Atlantic Petroleum, which is controlled by former Nigerian Defence Minister Theophilus Danjuma, sources have told Reuters.
The deep-water field, operated by French giant Total , needs billions of dollars in capital expenditure for development.
The source declined to disclose the size of ONGC's bid. People familiar with the situation have said the asset carried an estimated value of about $1 billion.
Bids were to be submitted yesterday, sources said.
It is not immediately clear who the other bidders are, although there is talk that a couple of Chinese state oil companies have looked at the asset.
Interest in the Nigerian auction has been helped by major offshore discoveries in West Africa in the past few years, and by the recent strong bidding for oil assets in the North Sea and the US Gulf of Mexico.
Akpo was discovered in 2000, and lies 200 kilometres offshore in water depths ranging from 1100 to 1700 metres.
Energy consultancy Wood Mackenzie estimates Akpo has condensate reserves of over 600 million barrels and commercial natural gas reserves of 2.5 trillion cubic feet.
In May, Total said Akpo would come on stream in late 2008 and was forecast to reach peak production of 225,000 barrels of oil equivalent per day.
Total said it had been authorised by Nigerian National Petroleum Corporation (NNPC) to begin developing the Akpo field on the Oil Mining Licence (OML) 130.
Total holds a 24 percent interest in the OML 130. Other partners are South Atlantic, NNPC and Petrobras.
According to African Web site www.mbendi.co.za , South Atlantic also holds a stake in Nigeria's Oil Prospecting Licence (OPL) 246, another offshore concession covering the Akpo field.
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18 November 2005 05:37 GMT | last updated: 18 November 2005 09:12 GMT
Chevron, Indian firm invest in Nigerian oil fields
The United States energy giant, Chevron is building a floating oil platform, which will produce a quarter of a million barrels of oil per day from a new field off the Nigerian coast within four years, the firm said in a statement released on Monday.
A South Korean shipyard owned by Daewoo Shipping and Marine Engineering has begun cutting steel for the hull of a "floating production, storage and offloading vessel," which will be moored in the Atlantic 113 kilometres (70 miles) from the Niger Delta shoreline, the statement said.
It said that once connected to a network of ocean floor oil wells in the Agbami field, the vessel will pump 250,000 barrels oil and 450 million cubic feet of natural gas per day.
“Tanks on board the vessel will be able to store 2.15 million barrels of crude before unloading it directly onto ships destined for markets in Europe and the Americas,” it added.
"We are right on track to bring this project on stream in 2008," Chevron Nigeria's Managing Director, Jay Pryor, said in the statement, adding that full production would come online between six and 12 months after the vessel is sailed into position.
Nigeria is already Africa's biggest oil exporter with production of more than 2.5 million barrels per day and has embarked on an ambitious plan to almost double output by 2010 by exploiting several newly discovered fields in the deep waters of the Gulf of Guinea.
In another development, ONGG Mittal Energy of India has secured a 650,000 barrels per day deep water oil block in Nigeria.
The joint venture company entered into an MoU with Nigeria’s Ministry of Petroleum on November 10 in the presence of an Indian delegation of Public Sector Enterprises, an OMEL press release said in New Delhi, on Sunday.
Nigeria’s Minister of State for Petroleum Resources, Dr. Edmund Daukoru, was also present at the occasion.
OMEL has agreed to provide $6billion back-to-back infrastructure support to Nigeria in return for the blocks having potential to produce up to 650,000 barrels per day, the company said.
The Indian venture’s investments would be proportional to the scale of oil discoveries under the agreement. The oil exploration blocks are yet to be identified.
The PUNCH, Tuesday, November 15, 2005
Pioneer Natural Resources Makes Management Changes
Pioneer Natural Resources Company 11/14/2005
URL: http://www.rigzone.com/news/article.asp?a_id=26941
Pioneer Natural Resources announced that A.R. (Ray) Alameddine has been named Executive Vice President, Worldwide Negotiations, William F. (Bill) Hannes has been promoted to Executive Vice President, Worldwide Business Development, Jay P. Still has been promoted to Executive Vice President, Western Division, and Denny B. Bullard has been named Vice President, Engineering and Development.
Mr. Alameddine will oversee transaction negotiation, execution and implementation and the Company's domestic land administration team. He joined Pioneer in 1997 and became Executive Vice President of Worldwide Business Development in November 2003. Prior to joining the Company, Mr. Alameddine spent 26 years with Mobil in engineering, planning, and acquisitions and divestitures. He graduated from Louisiana State University in 1971 with a Bachelor of Science degree in Petroleum Engineering. He is based in Dallas and will continue to report to Scott D. Sheffield, Chairman and Chief Executive Officer, and serve on Pioneer's Management Committee.
Mr. Hannes will direct Pioneer's worldwide business development efforts, including opportunity generation and analysis. He joined Pioneer in 1997 and has served in various capacities, most recently as Vice President, Engineering and Development. Prior to joining Pioneer, Mr. Hannes held engineering positions with Mobil and Superior Oil. He graduated from Texas A&M University in 1981 with a Bachelor of Science degree in Petroleum Engineering. He is based in Dallas and will report to Mr. Sheffield and serve on Pioneer's Management Committee.
Mr. Still is based in Denver and manages Pioneer's Western Division, which is the Company's largest division having responsibility for drilling and operations in the Raton, Piceance and Uinta basins. He joined Pioneer in 1995 and was appointed head of the Western Division in September, 2004. Prior to joining Pioneer, Mr. Still spent 10 years with Mobil in various drilling, operations and reservoir engineering assignments. He graduated with a Bachelor of Science in Mechanical Engineering from Texas A&M University in 1984 and received his Masters in Business Administration from Loyola University in 1992.
Mr. Bullard will assume Mr. Hannes' prior responsibilities for Pioneer's drilling, development and facilities related activities and is based in Dallas. He joined the Company in 1991 and has served in various senior capacities, most recently as Vice President, Gulf Coast Operations. Prior to joining Pioneer, Mr. Bullard held engineering and managerial positions with Conoco, Inc. and Damson Oil Corporation. He graduated from Texas Tech University in 1970 with a Bachelor of Science degree in Petroleum Engineering.
Mr. Sheffield, stated, "Over the last few years we've experienced significant growth in our domestic and international assets. As we increase our focus on expanding our North America onshore property base while continuing to pursue international opportunities, the demands on our business development team are expanding. Ray has a long history of successfully negotiating complex transactions, including international government contracts. By bringing Bill in to head up our efforts to generate and analyze new opportunities, we leverage his strong leadership ability and his industry relationships and experience. Jay has done an exceptional job in establishing our Western Division and will be playing a critical role in expanding our production and reserves in the Rockies, and Denny's extensive engineering expertise and commitment will continue to benefit Pioneer as he takes on this new role."
King Win tests ExxonMobil security
By Upstream staff
An obscure Chinese company that has made a $450 billion offer to buy ExxonMobil said it has filed for a national security review with the US government.
In a filing with the US Securities & Exchange Commission, King Win Laurel Ltd said it has filed paperwork with the Committee on Foreign Investments in the United States, which reviews acquisition offers for US companies that have national security implications, Reuters reported.
"The proposed tender offer to acquire ExxonMobil Corporation is just an ordinary merger or acquisition of general meaning on financial market, and it has no difference from those mergers or acquisitions (that) happened or will happen on market either in the US or other places over the world," King Win said in the SEC filing.
When King Win launched its bid last month, analysts laughed at the notion of the offer. The Beijing offices that King Win listed in its original SEC filing are housed in a $150-a-month apartment on the outskirts of the city.
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14 November 2005 13:51 GMT | last updated: 14 November 2005 13:54 GMT
CNR confirms Pioneer deal with plans to kick-start development
Canadians step up Olowi drive
Calgary-based Canadian Natural Resources (CNR) is re-igniting the proposed development of the Olowi oil and gas field off Gabon, having finally confirmed that it has bought Pioneer Natural Resources' 100% stake in the prospect.
In June this year, Pioneer disclosed it had struck a deal to sell the asset for $49 million but declined to name the buyer, although a senior Gabonese official told Upstream that CNR was the buyer.
During the Canadian company's third-quarter conference call, chairman Allan Markin said CNR assumed control of the production sharing contract last month and that it planned to file a development plan with the authorities by the end of this year.
Essentially, this development scheme is similar to that evolved by Pioneer before the Dallas-based outfit announced its plan to sell Olowi in October 2004.
Markin said Olowi's oil rim contains about 500 million barrels of 34-degree API oil in-place, which will be tapped by horizontal wells drilled from three wellhead platforms with output fed to a "basic" floating production, storage and offloading vessel.
Front-end engineering and design is due to start next year, with development work kicking off in late 2006 targeting first oil two years later.
Houston-based contractor EDG Consulting carried out early engineering work on the overall project for Pioneer, with Intec Engineering looking after flowlines.
It is unclear if CNR will use the same companies for its engineering work or plough its own furrow.
The new operator conservatively estimates production to be around 20,000 barrels per day compared to Pioneer's earlier forecast of 24,000 bpd.
The US player decided to pull out of Olowi because steel costs came in way above estimates during the bidding process, driving up total capital expenditure in September last year to $540 million.
Chief executive Scott Sheffield said at the time: "We felt... we were not going to put $500 million into a 40 million-barrel project based on $36 per barrel crude."
Now with oil prices higher by about $30 per barrel, CNR clearly feels the project is economic.
CNR chief operations officer Steve Laut said: "It is not a large project but it is a good project," pointing out that his company has adopted a "somewhat conservative" recovery factor.
He said Gabon is a "stable country, we like the geology" and said that Olowi like the Ivory Coast where it operates the Espoir and Baobab complexes offers the opportunity to enter a country "with a development project".
Beyond its oil rim, Olowi also holds a significant gas cap, which CNR belives holds about 1 trillion cubic feet of gas in-place.
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11 November 2005 00:02 GMT | last updated: 11 November 2005 10:27 GMT
EFCC Arrests Wabara, Hallmark Bank MD
By Ayodele Aminu, 11.07.2005
The Economic and Fina-ncial Crimes Comm-ission (EFCC) has arrested Chairman/ Chief Exe-cutive, Hallmark Bank Plc, Mr. Marc Wabara in connection with about $58 million (N7.5bn) belonging to the Joint Development Zone (JDZ) trapped in the bank.
The money, THISDAY gathered, was placed in fixed deposit account with Hallmark Bank by JDZ but could not be produced on demand. Nigeria and Sao Tome and Principe shares the resources in the JDZ. While Sao Tome and Principe holds 40 per cent of JDZ, Nigeria owns 60 per cent.
It was based on this development, THISDAY checks revealed, that the EFCC was invited to help recover the JDZ funds. Wabara has been in custody of the EFCC since Friday, last week.
Sources disclosed that when the EFCC officials moved into Hallmark they discovered that the bank also had some questionable dealings with one state in the Southeast.
Hallmark Bank, according to sources, had an Irrevocable Standing Order (ISO) from the Southeast state said to have borrowed from it some billions of naira. In order to recover its loans, when federal allocation is released every month, Hallmark Bank makes direct deduction a certain percentage of the loans it gave to the said state including interest.
Last Friday, EFCC officials were said to have collected print outs of the financial transactions between Hallmark Bank and the said Southeast State from 1999 till date. Thereafter, the EFCC was said to have initially attempted to arrest one of the Executive Directors of Hallmark Bank, Mr. Edward Ajayi, before eventually picking up Wabara.
Contacted, officials of Hallmark Bank who craved anonymity, confirmed that Wabara was being quizzed for what they described as “some operational issues.”
Hallmark Bank and two other banks – Broad Bank and Universal Trust Bank- recently sealed a merger deal with Union Bank of Nigeria Plc after the latter had concluded due diligence and valuation of the three banks.
Hallmark Bank, a founding member of the First Consolidated Bank (the first merger group to emerge in the wake of the consolidation exercise announced by the Central Bank of Nigeria, CBN Governor, Prof. Charles Soludo last year) however, opted out of the merger.
Just a couple of weeks ago, Central Bank of Nigeria (CBN) wielded the big stick by sacking the entire board and management of Allstates Trust Bank Plc over alleged financial malpractices.
The Chairman of the bank, Chief Ebitimi Banigo, was arrested by the EFCC based on the recommendation of the CBN, which had earlier met with the bank’s board in Abuja.
INTELLIGENCE REPORT:US to spend $500m to secure Nigeria's oil, gas
By Hector Igbikiowubo with agency report
Posted to the Web: Tuesday, May 31, 2005
*Algeria too; to combat terror spots in W-Africa
DAKAR—THE US government has concluded plans to spend $500 million (about N67 billion) over the next five years to bolster its counter-terrorism campaign in the West African sub region and to guarantee access to Nigeria’s crude oil and gas, the continent’s largest oil producer. The US has also concluded arrangements to hold a joint military exercise with Nigeria and Algeria as part of efforts to consolidate its presence in the West and North African regions.
This move comes on the heels of a US National Intelligence Council report stating that Nigeria may disintegrate in the next 15 years if its leadership continues to work at cross purposes.
A statement released by the US embassy in Dakar, Senegal recently disclosed that the US was pouring more soldiers and millions more dollars into its anti-terrorism campaign in Africa, particularly Nigeria and Algeria; both oil-rich nations where radical Islam has a following. Specifically, the US proposes spending $100 million a year over five years to boost security in both countries described as some of world’s least policed areas.
An earlier anti-terror exercise with a budget of just $6 million focused on troop training in four West African nations. The new campaign will target nine North and West African nations and seek to bolster regional co-operation.
Analysts were waiting to see if the programme would be fully funded — but said the intended budgetary increase showed the US was taking West Africa more seriously. “If they’re turning the corner to $100 million, that’s graduation into something much larger,” said J. Stephen Morrison, Africa director at the Washington DC-based Centre for Strategic and International Studies. “It’s still modest, but it’s a dramatic step up.”
Major Holly Silkman, a US military spokeswoman, said underpopulated border areas in the region could be sanctuaries for “terrorists or would-be terrorists.”
“We want to increase security in those areas by training with each country’s military and creating a regional focus, rather than just a country focus,” Silkman said by telephone from European Command headquarters in Stuttgart, Germany.
US officials have long viewed northwestern Africa’s vast desert stretches as prime real estate for aspiring terrorists seeking to set up training camps or other bases. Some US commanders liken the area’s ungoverned expanses to Afghanistan during Taliban rule, under which Bin Laden’s al-Qaeda terror group thrived.
The region is shot through with sandy tracks still travelled by camel caravans bringing salt slabs in from the desert — ancient thoroughfares officials say militants can use to traverse poorly guarded borders. Much of the troop training will focus on units responsible for guarding frontiers, said Silkman.
Muslims in West and North Africa, like Muslims elsewhere, generally are moderate. But extremists do exist. Militants have roamed south from oil-rich Algeria into West Africa in recent years, and in northern Nigeria, years of poverty and brutal military rule has radicalised some in the population. “We’re concerned with the radical movement,” said Silkman. “Islam isn’t the problem, it’s only the radicals.”
Troop exercises aside, the new programme will also bring together for medical training and command-post exercises military staff from the nine participating countries— Morocco, Algeria, Tunisia, Senegal, Mali, Niger, Mauritania, Chad and Nigeria. The earlier programme encompassed just Mali, Mauritania, Chad and Niger.
Morrison, of the Centre for Strategic and International Studies, said the US now appeared to have created a “counter-terrorism bookend” to its strategy in East Africa, which has seen a spate of terror attacks, including the1998 bombings of the US embassies in Kenya and Tanzania blamed on al-Qaeda. Notable among the new entries is Nigeria —Africa’s most-populous nation of 130 million, the continent’s biggest petroleum producer and source of one-fifth of all American oil imports.
About half of Nigeria’s people are Muslim. Osama bin Laden purportedly marked the country for liberation in release posted on the Internet earlier last year.
The country is led by a Christian president and has seen deadly spates of Christian-Muslim violence, although most Nigerians live peacefully in mixed-religion areas.
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Fradique assures that oil are-tomense is mortgaged
The president, Fradique of Menezes, (in the picture) denied this end of week the transparency absence accusations, favorecimentos and games of interests in the oil-producing trial. In a conference of press that aimed at clear the contours of the polémica about the second auction of the oil, the leader of state affirmed that to polémica of today “deve-itself to bad agreements rubricados in the past” with oil-producing companies mortgaging each one the oil of the islands.
“So much for the block 1 as for these last, the decisions are taken by unanimity, but the problem arises because of the commitments that we assume before to of I be a president. It was with signature of this that we mortgage our oil”, explained Fradique of Menezes.
The leader of state affirmed even if by road of that, Saint Tomé and Prince does not have voice before the Nigeria for dictate what want that be.
“Already neither we be able to tell nothing, we be able to negotiate nothing because by example for the block 2, the Nigeria stayed with 60 percent, the American-Nigerian company ERHC stayed with 30 percent, or be are 90 percent for the Nigeria and we stayed barely with 10 percent for take an any decision, then that do not we be able to do nothing a time be the majority of the blocks in the It guaranteed the president are-tomense.
The leader of state recognized in the however that the participation of his director of cabinet, Mateus Meira Rita, in the joint ministerial advice represented an I knock down the law a time be a partner of an oil-producing company. By that even, guaranteed, that already withdrew him of the negotiations. Valdimir António
Devon Energy looking to collect $2 billion from recent asset divestiture
Devon Energy has now reported the results of the Canadian portion of its previously announced program to divest non-core oil and gas properties after the company also reported the US results last month. Devon has entered into purchase and sale agreements for all of the properties it has offered for sale and the aggregate after-tax proceeds from the divestitures are estimated at more than $2 billion. In Canada, Devon's utilization of existing tax pools reduces the amount of current taxes attributable to the divestitures.
These agreements cover multiple packages of properties and already some of the transactions have already closed. The company expects the remaining transactions to be closed by mid-June, 2005. In accordance with the terms of the agreements, Devon is not disclosing the details of individual transactions nor identifying the purchasers.
Devon expects these divestitures to provide aggregate gross proceeds of approximately $2.3 billion that represents an average price of approximately $14 per equivalent barrel of proved reserves, based upon year-end 2004 reserve estimates. The combined divestiture properties produced approximately 6.9 million equivalent barrels of oil (mmboe) in the first quarter of 2005
Devon Energy looking to collect $2 billion from recent asset divestiture
Devon Energy has now reported the results of the Canadian portion of its previously announced program to divest non-core oil and gas properties after the company also reported the US results last month. Devon has entered into purchase and sale agreements for all of the properties it has offered for sale and the aggregate after-tax proceeds from the divestitures are estimated at more than $2 billion. In Canada, Devon's utilization of existing tax pools reduces the amount of current taxes attributable to the divestitures.
These agreements cover multiple packages of properties and already some of the transactions have already closed. The company expects the remaining transactions to be closed by mid-June, 2005. In accordance with the terms of the agreements, Devon is not disclosing the details of individual transactions nor identifying the purchasers.
Devon expects these divestitures to provide aggregate gross proceeds of approximately $2.3 billion that represents an average price of approximately $14 per equivalent barrel of proved reserves, based upon year-end 2004 reserve estimates. The combined divestiture properties produced approximately 6.9 million equivalent barrels of oil (mmboe) in the first quarter of 2005
29 April 2005
Nigerian President Obasanjo to Visit White House May 5
Bush, Obasanjo to discuss bilateral ties, peacekeeping, regional stability
The White House announced April 29 that Nigerian President Olusegun Obasanjo will visit the White House on Thursday, May 5.
Following is the text of the announcement:
(begin text)
THE WHITE HOUSE
Office of the Press Secretary
April 29, 2005
STATEMENT BY THE PRESS SECRETARY
President Bush will welcome Nigerian President, and current Chairman of the African Union, Olusegun Obasanjo to the White House on May 5. President Bush looks forward to discussing U.S.-Nigerian bilateral relations, Nigeria's role in the African Union's peacekeeping efforts in Sudan, and regional stability for West Africa
Pioneer Announces Sale of Non-Strategic Canadian Properties for $207 Million
Thursday April 28, 8:41 am ET
DALLAS--(BUSINESS WIRE)--April 28, 2005--Pioneer Natural Resources Company (NYSE:PXD - News) today announced that its Canadian subsidiary has signed a definitive agreement for the sale of its Martin Creek, Conroy Black and Lookout Butte oil and gas properties to Ketch Resources Ltd. (TSE:KER.UN - News) for proceeds of approximately $207 million. The transaction is expected to close by May 31, 2005 with a March 1, 2005 effective date and is subject to normal closing conditions.
Pioneer announced that it was initiating a process to divest these three non-strategic Canadian properties late last year. As of the effective date, the properties' net proved reserves were estimated to be approximately 9 million barrels oil equivalent (BOE) and current net production is averaging approximately 3,000 BOE per day. Tristone Capital acted as Financial Advisor for this transaction with TD Securities as Lead Strategic Advisor and Scotia Capital as Strategic Advisor.
Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "We had strong interest in the divestiture package and are very pleased with the sales price. Combined with our excess cash flow and proceeds from the volumetric production payment transactions we closed earlier this year, the proceeds significantly enhance our financial flexibility. By divesting these non-strategic properties, our Canadian team can now focus all of their efforts on increasing the value of our remaining core areas."
Pioneer is retaining its core areas in Canada, the Chinchaga natural gas and the Horseshoe Canyon coalbed gas fields, where it has an extensive inventory of drilling locations. The Company recently completed its largest-ever winter drilling campaign in Canada, drilling 56 wells. During the summer drilling season, Pioneer plans to drill up to 100 wells to assess the potential of its extensive Horseshoe Canyon coalbed acreage position.
Pioneer is a large independent oil and gas exploration and production company with operations in the United States, Argentina, Canada, Equatorial Guinea, Nigeria, South Africa and Tunisia. Pioneer's headquarters are in Dallas. For more information, visit Pioneer's website at www.pioneernrc.com.
Except for historical information contained herein, the statements in this News Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, Pioneer's ability to replace reserves, implement its business plans, or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, environmental and weather risks, acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.
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Contact:
Pioneer Natural Resources Company, Dallas
Investors:
Frank Hopkins or Chris Paulsen, 972-444-9001
or
Media and Public Affairs:
Susan Spratlen, 972-444-9001
JDZ Oil Blocks: Companies May Know Fate Today
From Onyebuchi Ezigbo in Abuja, 04.27.2005
Ministers from Nigeria and Democratic Republic of Sao Tome and Principe (DRSTP) appear set to release the result of the 2004 Licensing Rounds for five oil blocks (Blocks 2,3,4,5, and 6) whose bids were opened November, 2004.
The Ministers yesterday went into a close-door session in Abuja aimed at settling once and for, all issues holding up the announcement of results for the bid.
The ministers from Sao Tome who arrived Abuja, late Monday night said they were full of optimism that the meeting would thrash out the remaining issues to enable actual development of the oil blocks to commence.
Addressing the opening session of the Joint Ministerial Meeting, Nigeria's Minister of State for Foreign Affairs, Alhaji Abubakar Tanko, said the authorities of the Joint Development Zone is moving towards the conclusion of the much-awaited 2004 JDZ Licensing Rounds with the response from ExxonMobil on the exercise of their rights.
Apart from concluding action on the oil blocks, the meeting will also consider some key administrative issues such as the Joint Development Authority (JDA) 2005 Budget and other activities that are geared towards furthering the objectives of JDZ.
Tanko explained the several delays that have accompanied the implementation of the 2004 Licensing Rounds, saying the need for the parties to work within the dictates of contractual agreements necessitated the shift from the scheduled date of announcement of bids result last December, 2004.
"We have now reached the moment of decision towards the conclusion of the much-awaited 2004 JDZ Licensing Rounds following the response from ExxonMobil on the exercise of their rights", he said.
He recalled that a lot has happened in the JDA, an organ charged with the responsibility for managing and developing the petroleum and other natural resources in the JDZ for the benefit of the governments and peoples of the two countries.
Some of the achievements so far recorded by the JDA included the signing of the Production Sharing Contract (PSC) for Block one in February 2005 in Sao Tome, the commencement of the 2004 bidding rounds and payment of signature bonus by the contractors for block one.