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Anxiety as PIB date for passage draws near
The Petroleum Industry Bill (PIB) at the weekend struck another anxiety among oil firms in Nigeria as date for the passage of the bill draws near.

Minister of Petroleum Resources, Diezni Alison-Madueke, had earlier stated that the National Assembly might pass the bill before the end of December.

This is expected to pave the way for a new exploration licensing round, the country’s presidential advisor on energy, Emmanuel Egbogah, added.

But findings by **Daily Independent** at the weekend showed that many oil firms that have earlier opposed to the fiscal provisions in the bill still believe that the federal government has not rectified the sections.
“It is likely to be passed by the year end,” Egbogah told Reuters in New Delhi where he is attending an energy conference.

Egbogah said once the legislation is approved, Nigeria would launch its next oil exploration licensing round in the first half of 2011.
The Federal Government says the bill will make state oil firm, the Nigerian National Petroleum Corporation (NNPC), more transparent; encourage investment; promote local oil company involvement in the industry, and increase gas supplies to the dilapidated domestic power sector.

But international oil companies like Royal Dutch Shell, Exxon Mobil, Total and Chevron, which have dominated Nigeria’s energy sector for decades, are worried the Bill will impose higher taxes and royalties while failing to address key issues of under-funding, corruption and security. The Bill has been repeatedly delayed by revisions and disagreement. But on Monday, Egbogah said all the terms relating to the bill have been finalised.

He also said Nigeria is currently producing 2.6 to 2.7 million barrels of oil per day (bpd) versus an output capacity of 3.6 million bpd.

Crude oil supplies from the Organisation of Petroleum Exporting Countries (OPEC) which, together produce over a third of global oil supplies, rose in October because of higher supply from Angola and smaller increases from other members, reducing adherence to agreed output targets, a Reuters survey showed on Friday.

When asked about China’s bid to lock in oil reserves in Nigeria, Egbogah said, “discussions have not progressed.”

China had offered to invest $50 billion to acquire 6 billion barrels of Nigerian oil reserves in proposal made in June 2009.

http://www.independentngonline.com/DailyIndependent/Article.aspx?id=23866
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Content policy stifles new deepwater projects By Bassey Udo


November 16, 2010 11:51PM
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International oil companies (IOCs) operating in the country have criticised government's implementation of the Nigerian Content Development (NCD), saying imposition of the policy is stifling both the number and the pace of developing new deepwater oil projects.



Mark Ward, Lead Country Manager, ExxonMobil Companies in Nigeria, voiced their concern yesterday in a session on Nigerian Content Development (NCD) at the ongoing conference of the Nigerian Association of Petroleum Explorationists (NAPE) in Abuja.

Mr. Ward said though Nigerian Content Development was important, there was need to strike a balance between its objectives and efficient project development processes to sustain activity continuity.

"Nigerian Content Development needs to be paced, realistic, and collaborative. Imposition could stifle both the total number of in-country projects and projects development pace," he said, adding that "significant improvements are also needed to address the protracted permitting and approval process to reduce cycle time, which will lead to improved project value."

Multiple approval system

Under the provisions of the proposed Petroleum Industry Bill (PIB) currently pending before the National Assembly for legislation, a new midstream and downstream project approval and licencing system has been introduced to handle approvals for investments in those sectors of the industry.The new system is in addition to the existing arrangement requiring all joint venture exploration and production companies to get approvals from the National Petroleum Investments Management Services (NAPIMS) and the Department Petroleum Resources (DPR) before embarking on projects in the country's petroleum industry.

Besides, multi-national companies handling jobs that require the use of expatriates are expected to get the approval of the Nigerian Content Development and Monitoring Board (NCDMB) before engaging such personnel to execute jobs in the industry.

Under the new policy, affected companies are to mandatorily give the right-of-first-refusal to Nigerians by advertising the offer of such positions in Nigerian and international media. The jobs can only be given to non-Nigerians only if at the end of the publications, no qualified Nigerian was found with the relevant competence and expertise to handle them in-country.
Huge undeveloped potentials

Other participants at the conference stressed the need to ensure that implementation of the NCD policy facilitated the process to initiate fresh projects to take up the approximately 22 billion barrels of oil equivalent currently being associated with the West Africa deepwater development.
Current estimates show potentials of about three billion barrels of oil as undeveloped, with about 19 billion barrels of oil equivalent as undiscovered, while a combined developed and undeveloped gas resources stand at about six billion barrels of oil equivalent, or 35 trillion cubic feet (TCF), with a sizable proportion of the potentials located in Nigeria.

On challenges in Nigeria's deepwater development, Mr. Ward observed that though Nigeria and Angola began licencing of deepwater oil concessions at the same time in early 1990s, the tough fiscal terms to operators by the government between 2000 and 2005 had rendered exploration for oil unattractive, resulting in the decline in the rate of field development activities.

http://234next.com/csp/cms/sites/Next/Home/5643190-146/content_policy_stifles_new_deepwater_projects.csp
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...The PIB, a wide-ranging legislation, will rewrite Nigeria’s decades-old relationship with its foreign oil partners, altering everything from the fiscal framework for offshore oil projects to the involvement of indigenous firms in the sector.

Industry operators had alleged that uncertainty over the passage of the legislation, which has been subject to numerous revisions and debate, has meant billions of dollars of potential investment are on hold in Nigeria’s oil and gas industry.

http://www.offshoreenergytoday.com/exxonmobil-strikes-rich-gas-discovery-offshore-nigeria/