SPDC Says Interim Freeze Order On Its Bank Accounts Unconnected With Alleged Crude Diversion

The Shell Petroleum Development Company (SPDC) has said that the recent interim freeze order on its bank accounts by a Federal High Court Sitting in Lagos, is unconnected with the alleged diversion of crude oil against it, contrary to some media reports.

Some media outlets had reported that SPDC will refund about 2.1 million barrels of crude oil from the Trans Niger Pipeline in line with a directive of the Department of Petroleum Resources (DPR). And that a Federal High Court Sitting in Lagos had blocked the company’s account in January pending the hearing of the case this month.

However, DPR through its spokesman, Mr. Paul Osu, in response to media enquiries on Saturday February 13, 2021 described the allegations of crude diversion against SPDC as untrue and urged that the allegations be disregarded.

In its reaction to the allegations, SPDC in a release on Friday, noted that the freeze order on its accounts was obtained by Aiteo Eastern E&P Company Limited in relation to SPDC sale of its interests and two other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and crude reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into Aiteo’s NCTL. It described the alleged diversion of crude oil as “factually incorrect” , informing that it has to do with a directive by the DPR to SPDC as operator of the Bonny Oil and Gas Terminal, to implement a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.

“It is important to note the claims underpinning the interim freeze order obtained by the plaintiff, Aiteo Eastern E&P Company Limited, relate to the SALE of the interests of SPDC and two other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and crude reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into Aiteo’s NCTL which is a normal industry practice.

“The disputes are subject of ongoing litigation and SPDC is working to secure an expeditious discharge of the freezing injunction which we believe was obtained by Aiteo without any valid basis.

“The crude theft/diversion allegation is also factually incorrect. This is a distinct issue that relates to the directive by the Department of Petroleum Resources to SPDC as operator of the Bonny Oil and Gas Terminal, an asset belonging to the SPDC Joint Venture, to implement a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.

“Crude allocation review and reallocation is a normal industry practice to re-allocate previous provisional allocated volumes under the directive and supervision of DPR, and this is not an exercise resulting from crude diversion, underreporting or theft at the terminal. This industry practice is not peculiar to the SPDC-operated Bonny Oil and Gas Terminal alone and does not translate into any loss of volumes to the Federal Government of Nigeria,” SPDC said.

It further stated that, “The reallocation in issue was initiated by SPDC as operator of the Bonny Oil and Gas Terminal, while the DPR validated and confirmed it for implementation for the concerned oil producers.

“Crude oil production metering and allocation are subject to specific guidelines issued by the industry regulator, DPR. SPDC strictly adheres to these guidelines and the implementation is regularly verified by the regulator.”

“SPDC and all Shell companies in Nigeria are responsible Corporate citizens who conduct their operations in accordance with applicable laws and industry best practices,” the company added.

President Buhari is Committed to Niger Delta Development ---Sylva

...Says security is pre-condition for oil firms to return

The administration of President Muhammadu Buhari is very committed to the development of Bayelsa State and other states of the Niger Delta, the Minister of State for Petroleum Resources, Chief Timipre Sylva said recently.

He spoke in Yenagoa, at the special town hall meeting organized by the Bayelsa State Government and the Ministry of Petroleum Resources with chiefs, youths and other stakeholders in the state. The interactive session was a directive by Mr. President after the ENDSARS protest last year, for ministers and other top government functionaries to enlighten Nigerians about the plans and programmes of the Federal Government.

Chief Sylva affirmed that the Federal Government is willing to promote more investments that will create jobs and prosperity for citizens and residents of the state. He listed the Nigerian Content Tower as one of top achievements of the current administration.

The Minister further stated that the Federal Government is promoting the development of Nigerian Oil and Gas Park at Ogbia LGA of the state and is facilitating the development of two modular refineries within the state, notably the 12,000 barrels per day Hydroskimming modular refinery being constructed by Azikel Petroleum Limited at Obunagha, Gbarain, and the 2000 barrels per day modular refinery being developed by Atlantic International Refinery and Petrochemical Limited at Okpoama, Brass Local Government Area.

He added that the Federal Government has also taken final investment decision on the Brass Fertilizer and Petrochemical Project, among other projects. He affirmed that the various projects will create thousands of direct and indirect jobs for Bayelsans and other Nigerians during the construction stage as well as the operations phase of the facilities.

Speaking further, Sylva has charged residents and stakeholders in Bayelsa State to embrace unity and collaborative spirit in order to enjoy more developmental strides.

He said: “From this meeting, we expect a lot more understanding because some of the problems we have are as result of breakdown in communication. This forum will create a platform to understand the plans of what the state government is doing and how the Federal Government can also assist in order to create a better life for the people,” Sylva said.

Responding to calls for the relocation

of oil companies to the Niger Delta region, the Minister maintained that youths and residents of the region must eschew restiveness and work for peace and security as preconditions for multinationals to relocate. He stressed that asking the companies to relocate without addressing the security concerns would only escalate Nigeria’s cost of crude oil production, which is one of the highest among OPEC members. According to him: “We look at it from the perspective of cost. It will be cheaper for oil companies to operate from here because it is nearer from the operating areas. The only concern is that we have a responsibility to bring peace and security because that is another source of cost. If you don’t have peace and security and the oil companies move back here, then you add to the cost of oil production.”

He insisted that it would make sense to the oil companies to return if the environment is safe because it will be cheaper for them. He added: “They were before. Shell was in Port Harcourt and Warri and most of other companies were here. They only ran away when insecurity took over the region. It is time to bring back peace and security so that those firms can return.” On our part as the Ministry we are not against the oil companies moving back.”

In his remarks, the Executive Governor, Bayelsa State, His Excellency, Douye Diri applauded the peace building initiative of President Muhammadu Buhari. He also pleaded for unity, synergy, collaboration and cooperation from all parties to move the state forward.

While appreciating the President for some of the Federal projects ongoing within the state, Diri pleaded with the Federal Government to commence the Nembe/Brass road. “All the projects that you have sited in Brass LGA will become Elephant projects if we do not have a road leading there.”

He noted that Brass LGA and Southern Ijaw LGA are some of the few Local Government headquarters in Nigeria that are not accessible by road. Diri pledged his readiness to collaborate with the Federal Government to ensure that all federal investments in the state are protected.

The engagement had in attendance representatives of the State in the National Assembly, State Assembly members, leaders of youth groups, traditional rulers as well as members of the Civil Society Groups.

FG Targets 35,000 Jobs as NCDMB, NNPC Stake US$670 in Brass Methanol Plant

The Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian National Petroleum Corporation (NNPC) and DSV Engineering recently signed the Final Investment Decision (FID) for the construction of 10,000 tonnes/day methanol production plant by the Brass Fertiliser and Petrochemical Company Ltd (BFPCL), committing equity investment of US$670m.

The facility would be the largest methanol plant in Africa and the first in Nigeria and the construction phase is expected to create 30,000 direct and indirect jobs and additional 5000 permanent jobs during the operations phase.

According to the financing plan, the project is estimated to cost about US$3.5bn and aside the equity from

NCDMB, NNPC and DSV, there is an impressive cast of lenders which includes a consortium of Chinese banks led by the China Exim Bank, African Development Bank (AfDB), international commercial banks, regional banks and African institutions and they would be expected to raise 70 percent of the project cost.

Other agreements that have been firmed up include a Gas Supply Purchase Agreement (GSPA) with the Shell Petroleum Development Company (SPDC) led joint venture, offtake agreements and contracts for Engineering Procurement and Construction and technology provider.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, the Group Managing Director (GMD) of the NNPC, Malam Mele Kolo Kyari and Executive ViceChairman of BFPCL, Chief Ben Okoye signed the FID on behalf of their organisations.

Speaking at the event, the Minister of State for Petroleum Resources, Chief Timipre Sylva said the project was part of the strategic efforts to maximize value and monetize the country’s vast gas endowments. He stated that President Muhammed Buhari had in July 2020 “approved the development of the Brass Gas Company with the sole aim of aggregating and monetizing all stranded gas in the Brass area, which amounts to over 10 trillion cubic feet of gas, into the processing facilities to be built in the hub.”

He expressed confidence that the project would have significant economic and developmental impact on the country, including support for gas-based industries, revenue generation and import substitution for methanol needs of the nation that is currently 100 percent imported.

Other economic benefits include foreign direct investment, economic diversification, acceleration of Nigeria’s march to zero gas flaring and community development through the company’s plan to offer one percent equity to host communities.

In his remarks, the Executive Secretary NCDMB underscored the significance of two Federal Government’s agencies – NCDMB and NNPC catalysing investments in the country. He added that the project would place Nigeria in the world’s map as one of the top 10 producers of methanol.

He emphasised that Local Content can only grow sustainably when there are oil and gas projects, adding that a mega project of this size provides opportunities to utilize local capacities and capabilities built over the years.

He further explained that opportunities provided by the project in job creation, gas utilization, local availability of methanol for primary and secondary users, formed part of the basis of the Board’s decision to partner with Brass Fertiliser and Petrochemicals Company Ltd to enhance delivery of the project.

Wabote also commended Chief Sylva for recording huge achievements in the energy sector, at a time when most nations are unsure of decisions to make amid the COVID-19 pandemic. He listed some of the Minister’s accomplishments to include the signing of Train-7 FID, Gas Flares Commercialisation, Marginal Field bid rounds, Petroleum Industry Bill (PIB), Refining Roadmap, and others.

The GMD NNPC in his comments described the BFPCL as the most third most important project that had taken FID in the last five years. He stated that achieving FID for the project was proof of the Federal Government’s commitment to monetize the nation’s gas resources, notwithstanding the challenging investment environment. He pledged the commitment of NNPC to ensure the delivery of the methanol plant on schedule by 2025.

According to him, “The country is blessed with abundant gas resources, over 200 trillion standard cubic feet of gas (tscf) proven, with potential of over 600 tscf. As energy transition processes go on, you must monetize these gases as quickly as possible. NNPC will continue to collaborate with all the strategic partners. We will ensure that feedstock is available for this project and subsequent projects that would happen in the Brass hub.”

Executive Vice-Chairman of BFPCL, Chief Ben Okoye said that jobs that would be created from the project would help to assuage the restiveness in the Niger Delta in addition to the development of a new oil and gas city in Brass Island.

Sylva Performs Groundbreaking of Atlantic Energy Infrastructure Park

...project includes 2000bpd modular refinery, power plant, jetty Ground-breaking

The Minister of State for Petroleum Resources, Chief Timipre Sylva recently performed the groundbreaking ceremony of an Energy Infrastructure Park being developed by Atlantic International Refinery and Petrochemical Limited in partnership with the Nigerian Content Development and Monitoring Board (NCDMB) at Okpoama, Brass Local Government Area, Bayelsa State.

The Minister also commissioned three corporate social responsibility (CSR) projects executed by the Atlantic International Refinery for the people of the Okpoama Kingdom. The projects included the Okpoama Cottage Hospital, Iseleama Health Centre and Okpoama Community Water Works.

Speaking at the event, the Minister hinted that one of the best strategies to curb restiveness in the Niger Delta region is to create jobs and opportunities for youths. He added that part of his mandate is to collaborate with players in the private sector to establish oil and gas facilities, including modular refineries, which would ensure value addition to the crude oil, products sufficiency, create jobs in-country and curb pipeline vandalism.

He charged the people of Okpoama Kingdom and other parts of the Niger Delta to create an investment friendly environment that would attract other oil and gas and manufacturing facilities to the region.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote in his remarks, listed the various elements of the Energy Park project to include a 2000 barrels per day modular refinery, power plant, and jetty. He added that the project will serve as catalysts for infrastructural development and spur of economic activities in Bayelsa State.

He explained that the Board decided to partner with Atlantic International Refinery and Petrochemical Ltd to develop the Energy Park in line with its mandate of catalyzing oil and gas activities. He confirmed that the Atlantic modular refinery is the fourth in the series of the Board’s partnerships to contribute to the implementation of the Modular Refinery aspect of the Federal Government’s Refining Roadmap.

The previous partnership included the Waltersmith 5000 barrels per day modular refinery at Ibigwe, Imo State, the 12,000 barrels per day Hydroskimming modular refinery being constructed by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State and the 2,500bpd modular refinery being developed by Duport Midstream Company as part of its Energy Park in Egbokor, Edo State.

According to the Executive Secretary, “with the recent commissioning of the Waltersmith Refinery, we have proven that the concept is doable with the right dedication and partnership models. Our focus now is to ensure the completion of the remaining three modular refineries under construction”.

Acknowledging that the location of the Atlantic Modular refinery was challenging, the Executive Secretary said “we believe that with the capability of our partner, and especially the support of our stakeholders in the Community, the State, and the nation at large, we will come back next year to commission the project”.

Also speaking, Chairman/CEO of Atlantic International Refinery and Petrochemicals Limited, Dr. Akintoye Akindele stated that the company is building the first integrated energy park, comprising a scalable and environmental friendly modular refinery, power generation and distribution plant and a world class jetty services in Brass, Bayelsa state.

He added that the park will not only transform the economic activity in Brass but will also act as a commercial hub for logistics in Niger Delta, unlocking significant developmental in Brass community and its environs.

He thanked His Royal Majesty, the Amanyanabo of Okpoama Kingdom, King Ebitimi E. Banigo (OFR) for his royal blessings and hosting the project in his Kingdom. He also thanked the Honourable Minister of State for Petroleum Resources and the Executive Secretary, NCDMB, for their unwavering support towards the actualization of the project.

Wabote Tasks IOCs on New Projects

...Total’s Ikike to hit first oil Q4 2021

The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote has charged International Operating Oil and Gas Companies to emulate Total Exploration and Production Company (Total E&P) in sponsoring new projects and stop being deterred by the delayed passage of the Petroleum Industry Bill (PIB).

He gave the charge recently when he received the Managing Director of Total E&P, Mr. Mike Sangster at the Nigerian Content Tower, headquarters of the NCDMB in Yenagoa, Bayelsa State.

He commended the MD for his emergence as the chairman of the Oil Producers Trade Section (OPTS)- the umbrella body of major oil producers, adding that his appointment was deserving because Total E&P was the only international operating company that had taken Final Investment Decisions and sanctioned major oil and gas projects in recent times in Nigeria despite the delayed PIB.

While expressing confidence in the determination of the 9th National Assembly to pass the PIB after it had been delayed for over 15 years, Wabote encouraged other IOCs to forge ahead with their new projects. He hinted that new projects were needed to grow Local Content and create work opportunities for local fabrication and manufacturing yards, many of which have been idle since the conclusion of the Total’s Egina deep water project in 2018.

He also charged Total E&P to lend its full support to the ongoing NLNG Train 7 project, adding that the project held great prospects for the local oil and gas industry and host communities.