Nigeria Oil & Gas Technology issue, May 2013
Intelligence
OTC NEW TECHNOLOGY AWARDS And The Winners Are...
DRILLING BEYOND BOUNDARIES The Reelwell Drilling Method
FULL TENSOR GRAVITY TECHNOLOGY Its Use In Hydrocarbon Exploration
FLOATING LNG The Local Content Issues
EMEKA ENE The Role Of Technology In The Nigerian Oil And Gas Industry UPSTREAM | DOWNSTREAM | REGULATORY | FINANCIAL | ENVIRONMENTAL
Oil and gas technology has evolved exponentially over the last 30 years Emeka Ene, PETAN President
Contents OTC New Technology Awards: And The Winners Are ...................................................2 OTC Oscars: Distinguished Achievement Awards ............................6 Nigerian Exhibitors At OTC Topped 100 ...................8 Drilling Beyond Boundaries: The Reelwell Drilling Method .......................................9 Photo Gallery: Nigerian Exhibitors At OTC ........................................ 10 Nigerian Rig Count: Hampered By Long Contracting Cycle ..................... 12 Full Tensor Gravity Technology: Its Use In Hydrocarbon Exploration .......................... 14 Crude Oil Theft: The Blood Oil Campaign ........................................... 16 Photo Gallery: Out And About At OTC................................................ 18 Photo Gallery: Minister Of Petroleum At Oxford University Lecture .. 20 Photo Gallery: UKTI-Shell Reception For British Business Delegation ..................................... 22
COVER STORY Emeka Ene, PETAN President, discusses the role of technology in the Nigerian Oil and gas industry
Interview: Emeka Ene, PETAN President Discusses The Role Of Technology In The Nigerian Oil And Gas Industry ... 24 Floating LNG: The Local Content Issues ......................................... 27 PTDF Gets New Executive Secretary ..................... 28 Sector News: Upstream/Midstream/Downstream ........................ 29 Sector News: Regulatory/Financial/Local Content........................ 32 Tenders ...................................................................... 35 June Events ............................................................... 36
Editor’s Message Our second ever Nigeria Oil & Gas Intelligence magazine focuses on technology with many of the articles in this feature drawn from the Offshore Technology Conference as well as technological developments in the industry, particularly offshore . We have news of the winners of OTC Oscars. Do make about the innovative technological developments for which they won their awards. Some of those could be useful for your own operations. We also have photos from the exhibition at OTC and including the Nigerian contingent. With over 2,000 Nigerians at OTC this year, it was certainly the place to be seen if you are involved in the industry in any way. We saw professionals and services, logistic, government departments and ministries, banks, training, advisory, legal – any one and every one even with the most remote interest in the industry was there. Of course, as always, there was just as much happening on the periphery of OTC as inside it, with high level transactions being concluded in Houston hotel meeting rooms, lounges and bars. But the best place to be, as is usually the case, was the Nigerian Pavilion, where many Nigerian companies, some under the umbrella of PETAN and others under their own steam exhibited their products and services. NNPC played host to Nigerians, with information available on all aspects of their operations and also plenty of comfy sofas to rest tired legs and Nigerian food to refresh hungry stomachs. We missed the Minister, who had to go to South Africa for the President’s state visit, but she was ably represented by the GMD. The word on the street is that this year’s OTC was another successful outing, with a palpable energy and an infectious buzz about the place. Long live OTC. Do look out for our June edition which will focus on We are expecting heated competition for advertising spots so do get in touch early to sponsor, advertise or member of our editorial team, an ex BBC broadcast and print journalist with many years experience of covering business issues in the print and broadcast media. Book your own copy now by e-mailing your details to info@NOGintelligence.com. Remember, your Nigeria Oil and Gas Intelligence magazine is free. You only need to pay for courier delivery to make sure it gets to you. It’s best to pay for a year’s delivery to make sure you don’t miss out any month. Get in touch for more information. Remi Aiyela Editor
This year’s OTC was another successful outing, with a palpable energy and an infectious buzz about the place NOG intelligence is published by: NOGintelligence Limited Address: Suite 3, Block C, 8b Fabac Close, Off Ligali Ayorinde Close, Victoria Island, Lagos Telephone: +234 807 839 1416 Email addresses: To subscribe: editor@NOGintelligence.com To advertise or sponsor: editor@NOGintelligence.com To send a press release or news item: newsdesk@NOGintelligence.com General enquiries: info@NOGintelligence.com Website: www.NOGintelligence.com
OTC Technology Awards And The Winners Are... One of the most successful Offshore Technology Conference (OTC) events ever, which attracted over 104,000 attendees, and over 2,000 from Nigeria, closed with 15 Technology Awards given for technological developments considered to be – new (not more than 2 years old), innovative (original, ground breaking and capable of revolutionising the offshore exploration and production industry), proven (through fullscale application or successful prototype testing), of broad interest (with broad interest considered and the environmental impact was an important judging criterion.
ABB Inc.
Onboard DC-Grid The Onboard DC-Grid is an innovative marine technology that uses direct current to transport energy to different consumers onboard the vessel. It enables variable speed operation reduced fuel oil consumption, improved emission reduction, reduced maintenance and new operational modes with a more responsive vessel system.
DOW NEPTUNE™ for Advanced Subsea Flow Assurance Insulation System DOW NEPTUNE™ Advanced Subsea Flow Assurance assurance solution, protecting equipment, line pipe and temperature range of any wet insulation system (-40°C to 160°C, or -40°F to 320°F), withstanding hydrostatic enhanced performance safety with its simple, two-layer application.
Baker Hughes/FASTrakTM LWD
Fluid Analysis Sampling and Testing Service
that enhance critical decision-making about the reservoir. FASTrak environments, such as horizontal or extended-reach wells, resulting in
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FMC Technologies/ Sulzer Pumps Ltd.
High-speed, Helico-axial Multiphase Subsea Boosting System
FMC Technologies, Inc. and Sulzer Pumps Ltd. have developed a powerful new highspeed, helico-axial multiphase subsea boosting system optimized for subsea proven pump hydraulics from Sulzer Pumps with FMC Technologies’ permanent magnet technology from Direct Drive Systems for less maintenance with greater speed,
FMC Technologies
Condition and Performance Monitoring
Condition and Performance Monitoring (CPM) is a surveillance system, which enables proactive maintenance of subsea production and processing systems associated with a 24/7 collaborative expert environment for diagnosis and problem solving. CPM combines continuous monitoring of sensors and subsea instrumentation with a historic database to identify fault condition and deviations from normal operating conditions.
GE Oil & Gas
Deepwater BOP Blind Shear Ram
GE Oil & Gas has developed the next-generation technology for shearing and sealing wellbore tubulars. The patent-pending Blind Shear Ram is designed for use in GE’s ram blowout preventers used in offshore some 6-5/8 inch drillpipe tool joints while achieving a wellbore seal holding up to 15,000 psi pressure differential.
GE Oil & Gas
RamTel Plus System and ROV Subsea Display Panel
When closing in a well using a BOP, knowing exactly where the shear and/or sealing elements are positioned is important. The patented RamTel™ Plus provides operators with a direct method of determining ram position. GE’s ROV Display allows the ROV to read stack sensor data, including wellbore temperature and ram position subsea indicators.
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Reelwell AS
Reelwell Drilling Method Riserless (RDM-R)
The RDM-Riserless system enables drilling in 3000 m waterdepth from 3rd generation drilling units due to the reduced weight related to omitting the riser. This is possible because the cuttings are transported to surface inside the dual drill string, i.e. the dual drill string acts as the riser.
SBM Offshore
Drilling Riser Trip Saver™ A rail-mounted transport system, which relocates a suspended drilling riser with a drilling riser tensioner system and surface blowout preventer in-place, this innovative apparatus and method for drilling multiple subsea wells consecutively, saves time, money and reduces risk by avoiding removal of the suspended drilling riser from the well bay.
STATOIL ASA
Remotely Welded Hot Tap Tee
A remote-controlled hot tap operation consists of a robot welding a T-piece on to the pipe,
ShawCor Ltd.
Mobile Robotic Cutback System
Bredero Shaw’s Mobile Robotic Cutback System is an innovative end machining technology for insulated pipe. It replaces manual processes that form the cutback including wire brushing, grinding and scraping. The new technology is safer, quieter, requires less labor and produces consistent high to the industry.
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through it. Afterwards a remote-controlled drilling machine will drill holes in the producing pipeline, with no effect on pressure and production.
Superior Energy Services
Complete Automated Technology System (CATS)
Complete Automated Technology Systems (CATS) is an onshore and offshore completion services rig that uses remote-operated or pre-programmed robotics to control various completion components, including a snubbing unit, BOP/well control stack, pumps, circulation tanks, top drive, closing systems and pipe handling systems as part of one unit.
WeST Drilling Products AS
The Continuous Motion Rig (CMR) The rig of the future - Continuous Motion Rig (CMR)— continuous drilling operation and is also the rig. CMR reduces the overall drilling time up to 50% and facilitates MPD. CMR substantially reduces down-hole problems associated with differential sticking and pressure
Wärtsilä Corporation Wärtsilä GasReformer
The Wärtsilä GasReformer turns VOCs or associated gases that were previously considered as waste into a valuable source of energy. Herewith it enables selfsustaining power generation for the offshore operation. The Wärtsilä GasReformer not only provides cost sustainability.
eliminates personnel safety risk.
Welltec
Well Cutter®
casing recovery without explosives. No shavings are generated, a smooth, polished surface remains after the cut and e-line conveyance ensures accurate depth control. The Well Cutter® offers a safer, faster, more reliable and cost-effective approach to cutting drill pipe and casing.
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OTC Oscars Distinguished Achievement Award Each year, the OTC Awards Committee considers major technological, humanitarian, environmental, and leadership contributions to the industry. If truly an individual and an organization as recipients of the prestigious OTC Distinguished Achievement Award. And the winners are...
Kenneth (Ken) E. Arnold
Ken Arnold is being recognized for his outstanding leadership and extensive contributions to the E&P industry. His many achievements include playing an integral role in the offshore industry’s focus on safety through the development of recommended practices for offshore design and safety management, and developing approaches to both equipment sizing and facility project management that are still in use today. He also has been instrumental in the effort to recognized technical engineering specialty.
Total Exploration and Production Total is being honored for
development in Angola. Now 18 is one of the world’s largest and most sophisticated deep offshore developments to date. subsea separation and pumping on a wide scale, the project included the construction of the world’s largest FPSO, and one of the most complex industrial development in Angola with 3.5 million manhours of work undertaken month ahead of schedule in August 2011.
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PETAN member companies
Nigerian Exhibitors At OTC Topped 100 The Petroleum Technology Association of Nigeria (PETAN) said that it did not have enough space for its members at this year’s OTC as the number of interested members reached an unprecedented number. President of the organisation, Emeka Ene, said that the number of spaces available was oversubscribed as some 60 members wished to exhibit while they could only accommodate 50. He said he was most encouraged by the number of Nigerian exhibitors, which included another 50 exhibitors with their own individual stands.
oil and gas players to transact with Nigerians from the industry.
Mr Ene said: “What has happened is that the OTC pavilion has become a very viable platform for exhibitors to showcase what they are doing in the industry, and also to attract investors to the Nigerian oil and gas industry. It is a very good platform for striking new business deals. Apart from that, it has really portrayed Nigeria in a very positive light.”
PETAN held a workshop on the Petroleum Industry Bill (PIB) during OTC. The event, which was full, was attended by both Nigerians and nonNigerian attendees keen to see if they might gain some insight into what is happening with the PIB. Mr Ene said that everyone with an interest in the industry must recognise that there is an urgent need for the PIB. The workshop was intended to allow different stakeholders in the industry to hold a discourse and hopefully come to realise the importance of the PIB and why action must be taken very quickly to enact the Bill into law.
Speaking about the conference, Ene said PETAN was committed to taking Nigerian companies to OTC because it creates an opportunity for serious
“We arranged an elaborate programme through the OTC week. We had a plenary session where the issues concerning the Petroleum Industry Bill (PIB) were discussed, as well as a workshop with Nigerian oil professionals abroad, where issues in the country’s oil and gas were also discussed. These are ways and means to create a platform for Nigerians to interact concerning the issues in the oil and gas sector,” he explained.
It is a very good platform for striking new business deals Emeka Ene, PETAN President
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Aftrac Limited Ana Industries Limited Ansett Integrated Services Limited Ariboil Company Limited Atlantic Fluids & Integrated Services Ltd Baywood Continental Ltd B.G. Technical Limited Chesroc Nigeria Limited Ciscon Nigeria Limited Dormanlong Nigeria Ltd Drillog Petrodynamics Ltd. Elshcon Nigeria Limited Emval Nigeria Limited Epic Atlantic Limited Future Concerns Nigeria Ltd Geoplex Drillteq Limited Gil Automations Global Petroleum & Pipeline Services Limited Gramen Petroserve Ltd Halden Nigeria Limited Hobark Int’l Ltd International Energy Services Ltd Laser Engineering & Resources Consultants Limited Lonestar Drilling Nigeria Limited Limited Matrix Petro-Chem Limited Mavlin Projects Limited Nestoil Limited Services Limited OCO Industrial Services Limited Oildata Wireline Services Limited Oilserv Limited Oiltest Group Orbital & Oranges Nigeria Limited Petrolog Group Point Engineering Limited Poseidon Energy Services Nigeria Limited Radial Circle Group Segofs Energy Services Limited Slot Engineering Nig Ltd SOWSCO Well Services (Nig) Ltd. Specialty Drilling Fluids Ltd Tecon Oil Services Limited Tilone Subsea Limited Tolmann Allied Services Company Ltd Topline Limited Vandrezzer Energy Services Vhelbherg Int’l Ltd. Weafri Well Services Company Limited Wellopt Nigeria Limited Weltek Limited Wog Allied Services Nigeria Limited Zitadel Limited
Drilling Beyond Boundaries
How it works RDM differs from conventional
The Reelwell Drilling Method The Reelwell Drilling Method (RDM) is a new solution for drilling exploration and production wells. RDM enables drilling of well sections with challenging pressure conditions and drilling to targets beyond conventional reach. The RDM is based on the use of a Dual Drill String where the drilling surface is through an inner string.
s t n e n o p m o c The The Dual Drill String (DDS) is a closed system. Cuttings are transported to the surface by drilling central pipe of the dual string, leaving the wellbore annulus free of cuttings.
The Dual Float Valve (DFV) contains double barriers on both channels and facilitates controlled pressure drilling and pressureless pipe connections. Two or more of the DFV can be mounted in series in the DDS for redundancy.
The Top Drive Adapter (TDA) is a dual conduit swivel that allows rotation of the drill string with the top drive. The TDA route the from the top drive to the DDS annulus is taken of the TDA housing.
returns up wellbore annulus, returns to surface through the inner pipe of the DDS. RDM is into the DDS annulus via the TDA and down to the DFV at the top of the conventional Bottom Hole Assembly (BHA). From the DFV the cuttings are transported back to surface inside the inner string, so that the hole remains clean at all times.
The Flow Control Unit (FCU) is a control valve arrangement is routed through. The purpose is to assure constant downhole pressure during drilling and pipe connection. The unit is equipped and return lines. The Reelwell control panel is fully integrated with the well control and monitoring system of the drilling facility.
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Nigerian Exhibitors At OTC
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Nigerian Rig Count Hampered By Long Contracting Cycle The country’s rig count remains low in spite of the Africa bucking the trend of decreasing rig count worldwide. According rig count for March 2013 was 3,488, down 191 from the 3,679 counted in February 2013 and down 175 from the 3,663 counted in March 2012. Africa’s rig count has however increased to 115 in March, up by two from the 113 counted in February 2013 and up 26 from the 89 counted in March 2012. Nigeria’s low rig count is being blamed in part on the National Petroleum Investment Management Services’ (NAPIMS) long contracting cycle for oil operations. As long as the approval process remains long, arduous and unwieldy, the country’s rig count will continue to be abysmally low. The rig count is a function of the drilling activity plan and is used by the Organisation of Petroleum Exporting Countries (OPEC) for the comparative assessment of the drilling efforts of member countries. Speaking with NOGinteligence, Biodun Adesanya, Managing Director/Chief
Limited (DNL), a hydrocarbon assets management company said it is quite unfortunate that the country, despite its huge reserves lags behind countries like Angola in the number of wells that are currently being drilled. He noted that the rig count has been at its lowest because it is tied to bureaucratic approvals from NAPIMS which has constituted a disincentive to operators’ effort at boosting production through drilling activities. “The truth of the matter is that the contracting cycle by NAPIMS is currently too long for our rig count to improve. It is 18-24 months between when intent is shown and when actual drilling takes place. This cycle as interpreted and implemented by NAPIMS is capable of frustrating additional drilling and seismic acquisition by most upstream companies. It is quite unreasonable,” he said. He added that the non-passage of the Petroleum Industry Bill (PIB) is also affecting the rig count as large investments are being held up.
“The uncertainty hovering around the PIB is taking its toll on the rig count. It is slowing down activities in this regard. In fact what most companies are doing presently are appraisal and development drilling and not exploratory drilling due to the non passage of the bill, he explained.” He therefore urged that urgent steps be taken to improve the situation so that production companies should not have to wait endlessly to get approvals before carrying out drilling operations. He lamented the situation where the country, rather than making investments to improve oil production, is only interested in crude oil sales, a development, which he said is quite unhealthy to the growth of the oil and gas industry. He called for the speedy passage of the bill so that more investments can be made in doing increasing Nigeria’s reserves. “One thing we must understand is that there is a connection between drilling (rig count), reserve replacement and OPEC quota. The point is by drilling new wells, we would be replacing our reserves which are being depleted. And when our reserves are replaced then our chances of raising the OPEC quota from its current 2.3 million barrels can be increased.” If our reserves increase from its current 40billion barrels to about say 45billion barrels there is every likelihood that the OPEC quota may be increased from 2.3 million barrels to say 2.5 million barrels per day, he said. “So it is obvious that for us to increase our quota there is the need to something about our reserves replacement by increasing our drilling activity cum rig count,” he continued. He concluded that the country must reposition itself in oil exploration and production in the face of the competition from other oil producing countries on the continent so as to remain relevant in the global oil business.
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3,488 The worldwide rig count for March 2013
191
Down from February 2013
The uncertainty hovering around the PIB is taking its toll on the rig count 13
Full Tensor Gravity Technology Its Use In Hydrocarbon Exploration Full Tensor Gravity (FTG) Gradiometry is now available for hydrocarbon exploration in Nigeria either as a base line acquisition technique or to complement conventional seismic data to solve complex geological problems. Chidi Offor, Managing Director of CB Geophysical Solutions Limited explained the technology which is used by oil and mineral prospectors to measure the density of the subsurface, effectively the rate of change of rock properties. From this information it is possible to build a picture of subsurface anomalies which can then be used to more accurately target oil, gas and mineral deposits. Offor went on to explain what the technology entails.
Field Acquisition
passive, deep penetrating and has zero impact on the environment. Results are comparable to conventional seismic with the advantage of very fast acquisition and very low cost comparison. Once the acquired data has been interpreted, it is then possible to report on the arrears of geologic interest for commercial hydrocarbon accumulation and advise drilling locations.
ADVANTAGES OF GRAVITY GRADIOMETRY: More data for less cost low altitudes, an FTG survey measures the gradient of the Earth’s gravity
Since this geophysical data acquisition
underlying rocks. It can deliver results on both shallow and deeper targets and can provide strong 3D image quality and a detailed exploration dataset, helping petroleum explorers and producers to reduce risks and increase returns. The technology is also highly cost-effective - on a kilometre-by-kilometre basis, FTG
coming from the earths crust, it is very
acquisitions.
This involves mounting calibrated FTG equipment (Full Tensor Gravity Gradiometry equipment) on an airborne platform such as a Dash 8 Series 400 in linear grid lines at low altitude.
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Other advantages over seismic FTG is very well suited to surveying “transition zones” - coastal areas linking land and sea and areas prone to seasonal terrain and big variations in sea-bottom depths and sediment thicknesses. This tricky geology makes standard seismic costly and compromises seismic data quality. It is also suited for surveying densely populated/built up areas, that would ordinarily be impossible with conventional seismic. And even when possible with conventional seismic would normally involve large source to receiver offsets. Large offsets have the effect of diluting the spatial resolution achievable and resolution of shallow targets of interest. Governments can also use this technology for reconnaissance as a precursor to licensing rounds. Thus the government can then split the acreages into blocks and offer them for sale in licensing rounds backed by this baseline data.
Since the past decade, most multinational mining companies have been using this technology to locate and quantify mining reserves. However, its use for hydrocarbon exploration is only recently available due to advancements in FTG sensor technology.
Survey Design FTG sensor technology engagement will normally start with a full feasibility study of the project to determine the gravity response of the target body. On completion of the study the survey company will be in a position to make an informed judgment on what survey parameters best suit the geophysical objectives for the proposed project. During the survey the onboard sensors
continually monitor the number of satellites and/or PDOP availability at all times. Real time differential corrections to the GPS data are applied. Daily static GPS tests will also be performed over a known position on the apron.
Data Processing and Interpretation
After acquisition, the data is processed using different techniques, including FTG signal enhancement, interpolation and terrain corrections.
density analysis, image processing and reduced data set that represents density contrasts encountered in th
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Crude Oil Theft The Blood Oil Campaign At the recent special lecture at Oxford University hosted by St Anthony’s College in conjunction with the Oxford Institute for Energy Studies and the African Studies Centre at Oxford University, the Minister of Petroleum Resources, Diezani AllisonMadueke reiterated her call for Nigerians to become engaged in the Blood Oil campaign. She spoke of the government’s determination to stop crude oil theft by
Labelling the stolen oil “blood oil” the Minister said the government was calling for the assistance of foreign governments over tracking the proceeds of the oil theft. For example, she said, the President met recently week with the British Prime Minister, David Cameron for discussions on how to address the menace both from the internal and external perspective. Apart from seeking foreign assistance in
proceeds of the theft. The Minister said: “The government is determined to address these problems once and for all. As a matter of fact it is trying to reach out to some of its counterparts where some of these
proceeds are also not kept in these something that had been talked about as far back as 2008 is to be introduced. It is generally thought that although the illegal oil exports may be ending up further
thinking of the government that some responsible for laundering of the funds realized from this illicit act. One thing that is sure is that the products of bunkering are not sold in ECOWAS countries. The
theft campaigner, Ambassador Dele Cole recently said that the illegal oil is ending Serbia and Singapore.
campaign. The technology makes it possible to identify the origin of any cargo of oil using analytical chemistry techniques. The identity of the cargo will be used to determine its legitimacy or otherwise. It is theft that is a more modern idea.
The successful use technology in Nigerian crude oil theft is expected to choke off the market
The technology was developed to trace sources of crude where various sources were likely to co-mingle. The successful expected to choke off the market thereby interrupting the supply chain. This appetite to introduce this technology into the Nigerian oil industry as it braces itself in Nigeria. The Minister said the Service Chiefs are included in the battle against crude theft and bunkering, as they are being
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disturbing trend. “We are doing everything including inviting the Service Chiefs to help us out. In fact, the Chief of Naval staff is already putting up programmes and fashioning out plans towards addressing this problem,” she said. Although she did not mention it, the Navy has set up a website intended to sensitise Nigerians to the menace and the attendant problems that come with crude theft. The idea is to make the ordinary person recognise the dangers that crude theft poses to the environment, to health,
to the economy, something which in turn should enable them to take ownership of the issue and ensure that such activities are not condoned in their own backyards. It appears that the plea for foreign assistance by foreign governments does not include military assistance, something that, during President Yar’Adua’s regime, the government was willing to consider. Gordon Brown had in 2008 offered military assistance for the policing of the Gulf of Guinea, which had, at that time, become one of the most dangerous waterways in the world. For many commentators, effective policing
of the creeks is one of the most effective theft by ensuring that stolen oil never gets chance of exporting stolen oil. The estimates are that 90 per cent of the stolen oil is exported. Inability to export the oil and earn valuable foreign exchange will prove a strong deterrent, many believe. The Minister said the government is not going to surrender to the antics of the criminal gangs as it is prepared to do all within its power to stop these cabals and their collaborators.
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Out And About At OTC
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Minister Of Petroleum At Oxford University Lecture
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UKTI - Shell Reception For British Business Delegation
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Workshop
Understanding Cabotage And Local Content In The Nigerian Oil And Gas Industry The Workshop programme was designed to further the objectives of the Nigerian Chamber of Shipping especially its advocacy initiatives for the Maritime and Oil & Gas Industry with the emphasis to expose a more practical, thorough and in-depth technical and commercial knowledge and approach to vessel operations from the Cabotage and Local Content perspectives. A thorough knowledge of the increasing technicalities involved in the upstream oil and gas sector and its associated support structure is needed for one to successfully engage in any form of business in this sector. The coming into force of the Coastal and Inland shipping Act and the Nigerian Oil and Gas Industry Development Act are indicators for a much-needed training in line with these regulations.
Key Modules
The 3-Day Workshop is scheduled as follows:
The Development of the Maritime Industry in Nigeria/Legislation Overview of the Upstream Oil and Gas Industry in Nigeria Finding a Vessel Vessel/Equipment Inspection
Date: Tuesday 25th – Thursday 27th June, 2013 Time: 8:30 – 4:30 daily Venue: The Civic Centre, Ozumba Mbadiwe Avenue, Victoria Island, Lagos.
Surveys) Vessel Registration and Working within the Regulatory Framework (Cabotage & Local Content) Funding your Contract Understanding Marine Insurance Legal Issues within the Cabotage and Local Content Regimes Ship Management Environmental Issues Maritime Security
The Nigerian Chamber of Shipping was formed in 2002 with the primary objective of ensuring that the domestic shipping industry participates fully in all commercial services in the Nigerian Coastal Waters and beyond. The body has grown to become an umbrella body for all stakeholders in the Maritime / Shipping industry in Nigeria and secures for its members, maximum participation in Nigeria’s domestic and international trades
For further information kindly contact us as follows: E-mail: info@nigerian-shipping.org Or call: 01- 892 2289 // 0803 386 1289 // 0703 959 9551 // 0807 127 8073 // 0803 565 2602
WELL MANNED AD
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The Role Of Technology In The Nigerian Oil And Gas Industry EMEKE ENE, PETAN PRESIDENT In this interview with the NOGintelligence, Emeka Ene, President of Petroleum Technology Association of Nigeria (PETAN), the umbrella body of indigenous operators shares his thoughts on how indigenous companies have been developing and deploying new technologies to meet the evolving challenges of the industry. How has oil and gas technology evolved in the past decade? Do you think the evolution has been worth the while in Nigeria considering the changing Oil and Gas technology has evolved exponentially over the last 30 years, more so in the past decade primarily through entrepreneurial efforts and the emergence of Local Content as a developmental framework for the industry. Many challenges still exist, but the key indicators are mostly trending in the positive direction.
have been very effective in disseminating best practices. Probably the most effective way has been through technical service companies operating in the region. A number of these companies based in Nigeria also provide services in places such as Ghana and Angola. Can you highlight some of the most
Has the Nigerian oil and gas industry fared any better with the acceptance of new technologies? Certainly. Technology has played a
industry? Enhanced Oil Recovery (EOR) solutions such as Electrical Submersible pumps (ESPs) are now being deployed in Nigeria. Pipeline installation companies now routinely utilize horizontal drilling technology. Fabrication shops are also becoming more sophisticated in what they can do in-country.
and improving oil recovery. In the deep water arena, the application of modern technology has enabled the production of reservoirs that were traditionally outside the reach of convention oil and gas exploitation.
Are local companies making their mark in contributing to the development of these new technologies? Local companies under the umbrella of PETAN, the Petroleum Technology
Does the industry provide a platform where technological ideas can be shared among countries with similar characteristics within the Gulf of Guinea? There are several platforms for interaction and sharing ideas on technology developments in the region. Beyond regional and international oil and gas conferences such as Offshore West Africa and the OTC, professional engineering organizations such as the Society of Petroleum Engineers (SPE)
strides in contributing to the deployment on new technology in the oil industry. PETAN companies offer up to 250 distinct technical services ranging from Drilling services, to Engineering and Fabrication, production operations and Training. This effort has been the “content” part of “local” in the drive to develop Local content in the oil industry.
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In selecting or adopting a particular technology what would you say are the
key considerations to ensure that the technology is successful talking in terms Technology adoption is driven primarily by people matched with the creative application of knowledge to solve problems. In the Nigerian oil industry, new technology has been introduced historically by the competitive environment driven by the service industry coupled with leadership and early-adopter investment by International oil companies operating in the region. I mentioned earlier the challenges of deep water exploration and production. In many instances, drilling takes place in over 3000 ft of water and oil from these reservoirs is produced from sub-sea wellheads located on the sea shore. Delivering on the technology required to seamlessly and safely produce and commitment by the operator together with a tight integration of the various technical service providers and engineering companies that make up the technology delivery value-chain. What in your opinion are some of the best practices required in the areas maintenance of a new technology to ensure long term performance? The key is long-term planning and optimization of in-country capacity ahead of the contracting cycle to ensure that the required competences which may take years to nurture, are available when needed.
Technology has played a improving oil recovery Emeka Ene, PETAN President
Usually the mistake is to view technology as a commodity to be ordered off the shelf even though most contracts these days are call-off. What are some of the pitfalls noticeable in technology applications taking into cognizance the Nigerian scenario? Pushing the envelope of technology adoption without taking into consideration the various support systems or the cost of adoption in the local environment can severely limit The dearth in highly specialized skills in country is a big challenge in sustaining the growth and adoption of new technology in the Nigerian oil industry. The Nigerian Content Monitoring and Development Board, NCDMB and organizations such as PETAN, PTDF and OGTAN have spearheaded skills development programs at various levels. between the academia and the industry on oil and gas technology? If yes, do you think the collaborations are are capable of developing new theory or methodology for addressing relevant industrial problems? There is some traction between Operators, particularly companies like Shell in collaborating with some of the Universities in applied research. Most of this interaction consists of “hand-to-mouth� sponsorships from the operators. Moreover, there have been very few Joint industry projects between Universities, Operators and Service companies. These initiatives help accelerate innovation and Technological development. This has limited the number of technology driven initiatives that get to market.
How do you rate the effectiveness of technology transfer from the IOCs to the indigenous company/ local contractor? What are the measurable impacts? IOCs play an important role in creating the space for Technology adoption by evaluating various solutions to technical challenges on their projects. In some instances, these companies invest in incubating new technologies. However, technology and its transfer are implemented by service companies and their partners. One of the most powerful paths to technology transfer that has occurred in this industry is the transfer of knowledge and skills. Technocrats who have worked for the Operators and IOSCs (International Oil Service Companies) became very highly skilled over time and have been able to transfer those skills into entrepreneurial start-ups and Indigenous oil producing companies. I terms of impact, it is apparent
in the Nigerian Service industry. Most Nigerian service providers have roots in Operating or international Service companies. What role do you think stakeholders including the government should be playing as regards encouraging the development of local technology that is The key is to encourage manufacturing and applied technology research in-country. Nigerian technical service companies such as those in PETAN should be directly and create sustained 3-way industry collaboration between the Universities, oil companies and Nigerian technical service companies. Such collaboration can go a long way in accelerating the penetration and localization of technology in the Nigerian oil industry.
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Floating LNG The Local Content Issues As Australia comes to terms with being the Floating LNG guinea pig, some are wondering if Nigeria is ready for the technology. Floating production, storage because they have the ability to station removing the need for offshore pipelines and adding the advantage of mobility. The vessel, along with all its facilities can be easily moved to a new location also has the added advantage of making it commercially viable to exploit gas reserves in locations too remote to be previously commercial to exploit. These LNG facilities. Other upsides that come with this new technology include the lower capital investment that is required in comparison with having to construct onshore facilities. It is also useful in situations where land is unavailable to develop onshore facilities. Time to shipment is also much shorter since local facilities will not have to be constructed. It is easy to get carried away with all these upsides and you would think that with all these advantages Australia world. However, there are signs that the local take is not adding up. There are considerable drawbacks as a result of the vessel being located offshore. The State loses out on some fees that would be tied to onshore operations such as where jetties have to be operated or pipelines constructed. Even more important for Nigeria is
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to satisfactorily enforce local content requirements for a vessel that is moored offshore. Local employment is not feasible and the local industries that normally feed off plants such as these will not be denied that opportunity. For a start, the construction of the vessel or be performed outside the country. The vessel will be brought in only when it is completed, whereas, for shore-based LNG operations, there are extensive building projects that will require plenty of local labour and local suppliers and the local industries that normally spring up around such projects. The local content requirements are more easily implemented in such projects. LNG project, there are currently 10 live projects, and an additional 8 under construction, and at least 30 other potential projects on the drawing board. For a while, as far back as 2008, it was thought that indigenous company, Peak Petroleum Industries Nigeria getting the approval of the Department of Petroleum Resources (DPR) for the
natural gas (LNG) plant in the country. At the time, FLEX LNG and Mitsubishi Corporation were said to be collaborating with Peak on the project, which was to cost an estimated $1.6 billion. Unfortunately, the project failed to take off. Shell, Mobil and Statoil are all reported to be developing large-scale FLNG projects in Australia, Nigeria and Namibia. Shell is by far the leader in FLNG plants with which is taller than the Petronas Towers in Kuala Lumpur and standing at nearly 500 metres tall. While Nigeria waits, it remains to be seen if for the Nigerian gas industry, the future
Prelude Floating LNG Factsheet Shell’s Prelude Floating LNG project facility. Moored far out to sea, some 200 kilometres from the nearest land in Australia, the FLNG facility was built liquefy it onboard by cooling. From bow to stern, Shell’s FLNG facility measures be 488 metres long, longer than fully equipped and with its storage tanks full, it weighs around 600,000 tonnes – roughly six times as much as the largest aircraft carrier. Some 260,000 tonnes of
said Malcolm Brinded, Shell’s Executive Director, Upstream International at the time said. “Our decision to go ahead with this project is a true breakthrough for the LNG industry, world’s growing demand for the cleanestburning fossil fuel.” The facility has been designed to withstand the severest cyclones - those of Category
“Our innovative FLNG technology will allow
and shrunk in volume by 600 times, and other products, directly from the facility out at sea for delivery to markets worldwide. Until the Prelude, the liquefaction of offshore gas had always involved piping the gas to a land-based plant. The FLNG facility will stay permanently
otherwise would be too costly to develop,”
years, and in later development phases
times more than was used to build the Sydney Harbour Bridge.
where Shell has an interest. The FLNG technology also reduces the cost and environmental footprint of the development of gas resources. Having the gas-processing and gas-liquefaction facility removes the need for: gas-compression platforms; long subsea pipelines to shore; near-shore works, such as dredging and jetty construction; and onshore construction, including roads, storage yards and accommodation facilities. Another plus is that FLNG can accelerate LNG developments. This is because an FLNG vessel can be ordered at an earlier stage guarantee of production longevity than investment; if and when the gas resources
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PTDF Gets New Executive Secretary The newly appointed Executive Secretary, Petroleum Technology Development Fund (PTDF), Dr. Oluwole Oluleye assumed duty on May 16th with a call on management and staff of the Fund to be more proactive and diligent in providing service to the people.
A fellow of the International Labour Organisation, Dr. Oluwole Oluleye is stepping in as the 6th Executive Secretary of PTDF and will be bringing his wealth of experience in the industry and the academia to confront the numerous challenges of PTDF capacity building initiatives. Dr. Oluwole Oluleye is from Ekiti State, South West Nigeria.
In a meeting with General Managers, Dr. Oluwole Oluleye said he will maintain an open door policy with little protocols in his administration of the Agency, the objective being to provide transparent and result oriented leadership. Dr. Oluwole Oluleye’s appointment as Chief Executive of PTDF is seen as a positive development, in view of his vast knowledge of the Oil and Gas Industry having served as pioneer Executive Secretary of the Petroleum Products Pricing Regulatory Agency PPPRA between 2003 and 2009, and member/secretary, Presidential Projects Assessment Committee.
The Petroleum Technology Development Fund (PTDF) is a parastatal of the Ministry of Petroleum Resources established by Degree 25 0f 1973 dedicated for the purpose of development, promotion and implementation of petroleum technology and manpower development through research and training of Nigerians as graduates, professionals, technicians engineering, geology, geosciences, management, economics and relevant minerals industry in Nigeria or abroad.
His notable achievements include the development of a transparent petroleum pricing mechanism that responds to the dynamics of market fundamentals. He also initiated deregulation policy on the supply of products into the system by creating a well as set up guidelines for the subsidy Fund in collaboration with stakeholders.
The Fund is dedicated for the purpose of development, promotion and implementation of petroleum technology and manpower development through research and training of Nigerian as graduate, professional, technician and
Dr Oluwole’s appointment as Chief Executive of PTDF is seen as a positive development in view of his vast knowledge of the oil and gas industry
petroleum and solid minerals industry.
Offshore Energy Center The Offshore Energy Center works to promote the importance (past, present, and future) of the offshore energy industry and its contributions to our quality of life. The Center is dedicated to expanding the awareness of the vast energy resources beneath the world’s oceans, and to chronicle the unique heritage and technological accomplishments of the industry that discovers, produces, and delivers these resources in a safe and environmentally responsible way. The objectives of this mission statement are being met through the Ocean Star Offshore Drilling Rig Museum and Education Center, the Offshore Pioneers Hall of Fame, and its educational program for students, teachers, and the general public. The Ocean Star Offshore Drilling Rig Museum and Education Center is located
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on Galveston Island, Texas, less than an hour from downtown Houston, the world’s petroleum capital. Visitors board the retired jackup drilling rig and view a video about the offshore industry. The museum features three illustrating the story of offshore oil and gas from seismic technology to exploration and production. Scale models of production platforms, actual drill bits and remotelyoperated vehicles (ROVs) as well as videos and exhibits explain drilling, geology, seismic, well servicing and production. Following a leisurely tour inside the museum, visitors can take the skywalk out of the museum.
For more information contact Trina Claire, Museum Programs Manager Phone: 409.766.STAR (7827) / Email: osprograms@oceanstaroec.com
SECTOR NEWS
UPSTREAM
Westbridge Energy Corporation Looking For Nigerian Assets TSX Venture Exchange listed Westbridge Energy Corporation, which describes itself as having a “robust portfolio of oil and gas licences” in Walvis Basin, offshore Namibia has announced a new strategic alliance that will provide it with an entry into Nigeria. The company, which is already present in the vastly under-explored basin in Namibia, has entered into an agreement with United Oil and Gas Nigeria Limited (UOG), which will enable them to jointly acquire Nigerian assets. They are looking to acquire asses that are near term production as well as exploration assets.
Westbrige is a big player in Namibia where 1911A rel, 1912B, 1910A rel and 2011A rel) in Namibia, which cover over 21,448 square kilometers and contain over 10,000 line kilometers of high quality 2D seismic data. Westbridge is Operator of the licenses and has an 80% working interest in 1811b and a 75% working interest in the remaining four licenses.
in Nigeria, Oman, Ghana, Gabon, Namibia and Kenya. He was also New Ventures & Area Geologist for Sub-Saharan Africa for Shell International. He currently serves as an adviser to Westbridge and is also ViceChairman of Mike Adenuga’s Conoil Group of Companies. Conoil Producing, the exploration and production offspin is one of the largest indigenous net oil producers in the country.
UOG was founded by Dr. Ebi Omatsola who has been active in the international oil and gas sector for over 40 years. The former Chief Geologist for Shell, has extensive experience
Commenting on the deal, Mark Frewin, Westbridge’s Chairman said: “Westbridge is delighted to be working alongside United Oil and Gas Nigeria Ltd.,” he said.
Marginal Fields Licensing Round To Be Announced Within Two Months The Minister of Petroleum Resources,
will be announced within two months. a special lecture at Oxford University hosted by St Anthony’s College in conjunction with the Oxford Institute for Energy Studies and the African Studies Centre at Oxford University. The lecture was entitled “The Future of African Energy in a Changing Global Market.”
Nigeria has been at the heart of every conversation on African Energy decades
announcement would be made within two months. The Marginal Fields Programme was devised to bring meaningful indigenous participation into the upstream landscape particularly given the large number of reported oil and gas discoveries in the Niger Delta, which over time had remained undeveloped, unproduced and, in some cases, only partially appraised by the international oil companies (IOC’s) which deemed them uneconomic.
During the lecture she spoke about Africa’s rich resource and its prodigious reserves, stressing the fact that, as the largest producer and exporter and the second largest economy in Africa, “Nigeria has been at the heart of every conversation on African energy for the
had completed the work necessary for the commencement of the next licensing
and answer session of the lecture, Remi Aiyela, the editor of NOGintelligence
and preparing accompanying the data packages.
which was held in February 2003 and in which 24 licences were awarded, brought smaller indigenous players into the upstream sector of the industry. Unfortunately, out of those 24 licences only 9 are producing.
timescale for the announcement of the
Responding to Remi’s question, the Minister explained that the delay in announcing the licensing round was because the government was keen to ensure that the mistakes of the last round were not repeated this time.
The government is keen to ensure a higher level of success with this licensing round, which the Minister explained, was the reason why the announcement had been continuously delayed.
Remi pointed out that the Director of the Department of Petroleum Resources NOGintelligence that the Department
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SECTOR SECTOR NEWS NEWS
UPSTREAM
Afren Completes OPL 310 Farm Out London Stock Exchange (LSE) listed Afren Plc has announced the completion of its OPL 310 farm out agreement with Lekoil Limited. At the same time, the company also announced the commencement of exploratory drilling at the Ogo prospect. Lekoil, recently listed on the the LSE’s Alternative Investment Market (AIM) will acquire a 17.14 per cent participating interest in the block, subject to Ministerial consent. The agreement will enable Afren to obtain a total carry of up to $50 million in respect of the exploration well. Indigenous company, Optimum Petroleum Development’s 60 per cent interest remains unchanged. Optimum, which acquired the block in 2008, is the “Operator” of the block and the
company will continue to receive technical assistance from Afren under a Technical Assistance Agreement between the two companies. Following the farm in by Lekoil, the companies’ interest in the block will be as follows:
Economic interest: Optimum: 30 per cent; Afren: 40 per cent; Lekoil: 30 per cent. Commenting on the new acquisition, the Chairman of Afren, Mr. Egbert Imomoh, said: “We are delighted to have successfully concluded a farm-out on OPL 310, offshore Nigeria and welcome Lekoil as a Partner
Participating interest: Optimum: 60 per cent; Afren: 22.86 per cent; Lekoil: 17.14 per cent.
under-explored region of the West African Transform Margin.”
Shell, NLNG Declare Force Majeure On Gas Supplies Shell Petroleum Development Company (SPDC) has declared force majeure on following a leak in its Eastern Gas Gathering System (EGGS-1) right-of-way (RoW) pipeline near Awoba in Rivers State. As a result of the leak, Shell shut down its gas production at Gbaran Ubie as plant in Bayelsa State and reduced production at its Soku gas plant in Rivers State. SPDC, said the pipeline, which carries some 1.5 billion standard cubic feet per day (SCF/D) of gas, would necessitate the shutdown of the Gbarain Ubie plant, “until necessary remedial actions are completed by SPDC, to ensure safe operation.” SPDC supplies LNG to the Nigerian through the pipeline and as a result of the disruption in supplies, the 22.5 million tonnes per annum capacity NLNG
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plant has also had to declare force majeure on its exports of LNG. The Soku plant provides up to 40 per cent of the company’s gas supplies and with the disruption in supplies its overall exports are now down by up to 50 per cent. NLNG’s General Manager in charge of External Relations, Kudo Eresia-Eke said in a statement: “NLNG not being able to meet its contractual commitments fully, declared Force Majeure to its customers on the 15th of May 2013.” Eresia-Eke said in the statement that NLNG was working with SPDC and its other gas suppliers to mitigate the effect of the disruption, having delivered over 3000 LNG and natural gas liquids (NGL) cargoes to its customers in Asia, the US and Europe. NLNG is a joint venture company whose shareholders are the Nigerian National
Petroleum Corporation (49per cent), Shell Gas BV (25.6per cent), Total LNG Nigeria Limited (15per cent) and ENI International (N.A) NY (10.4per cent). The force majeure declaration has compounded the problems of NLNG. Only two weeks ago, its faced a blockade of its vessels at Bonny Channel after a face off with the Nigerian Maritime Administration and Safety Agency (NIMASA) which was trying to collect a 3 per cent statutory levy on freight leaving or entering the channel. NLNG had argued that it was exempted from paying the levy by the NLNG Act. The dispute has now been resolved in NIMASA’s favour with the Government directing NLNG to pay the statutory levies, possibly going back to 2009, that are determined to be owed to the agency. Both parties have been directed to meet to work out the outstanding fees and modalities for payment.
SECTOR NEWS Gas Infrastructure To Attract N2.4 Trillion In Four Years Nigeria’s gas infrastructure development programme will attract an investment of over N2.4tn ($16bn) within the next four years, in line with the three-point strategic focus of the Gas Master Plan (GMP). The Group Executive Director, Gas and Power, Nigerian National Petroleum Corporation, Dr. David Ige, stated this at the 4th annual Oil and Gas Free Tra de Zone conference in Lagos recently. Ige who was represented by the General Manager, Pipelines, NNPC, Mr. Sam Ndukwe also disclosed that NNPC was set to build on the achievements of the free trade zone with the establishment of the Ogidigben Gas
MIDSTREAM Dangote in $4.5 Billion Record Time
City, the largest of its kind in Africa. He stated that the GMP will deliver gas to power for at least a threefold increase in generation capacity by 2015; achieve a reasonable level of gas-based industrialisation by positioning Nigeria as the undisputed regional hub for gas-based industries such as fertiliser, petrochemical and methanol plants by 2014; and achieve high value export export drives. Ige said the ongoing work to consolidate the agenda had thrown up investment opportunities in the gas sector to the tune of $16 billion.
Barely a month after announcing his intention to build a 400,000
breaking speed with which he secured the loans is a display
will effectively double Nigeria’s
banks line up to do business with his group of companies. He is also now able to silence sceptics who were wondering if the announcement on his 57th birthday was just a publicity stunt. The man who does nothing in half measures can now show he means business when he says he will turn
man, Aliko Dangote, has secured $4.25 billion bank loans to Dangote made the revelation while speaking at the World Economic Forum in South Africa, where he said the loans came from a consortium of offshore and Nigerian banks. The neck-
NNPC Invites Applications For Crude Oil Term Contracts The Nigerian National Petroleum Corporation (NNPC) has announced the beginning of the application process for its annual round of term contracts for lifting Nigerian crude oil for the period starting 1st August 2013 to 31st July 2014.
players out of the running. Applicants must have not less than $500 million annual turnover and a net worth of not less than $100 million. Many indigenous companies will not be able to scale this hurdle and will probably fall out at his stage.
The Nigerian government has very stringent rules about who can be awarded a contract. It is generally intended that only end users are
Successful applicants also have to make an immediate payment of $2.5 million, which will
owners or retail outlets and large volume traders are to apply. The applicant has to show details of its facilities, markets and volume of crude processed over the previous 3 years or, in the case of traders, evidence of its global network, activities and volume of crude oil handled over the previous 3 years.
Other criteria are that applicants must comply with the Nigerian Content Act including demonstrating a strategy to grow Nigerian equity in the tankers to be used to lift the allocated crude oil. Applicants must also submit commitments for sub-contracting insurance and legal services, banking and
Indigenous companies are excepted however from these stringent entry requirments, and only need to show that they are engaged in Nigerian oil and gas business. The low entry bar will make it easier for indigenous companies to qualify.
capacity building.
and are likely to take all but the most serious
In addition, applicants are to include investment plans for investing in any of a number of areas of the Nigerian economy including upstream, downstream, gas utilisation, independent power plants, agriculture, railway construction, solid mineral development, healthcare sector development and real estate development.
industry.
DOWNSTREAM The deadline for applications is 4pm on the 18th of June. Last year, to the surprise of many industry observers, and in spite of the $600 million won a large share of the contracts. Almost half of the $60 billion worth of oil contracts went to Nigerian companies. Nigeria normally allocates about 75% of its daily production for sale through term contracts that last for a year. About 580 million barrels of oil a day will be sold through term contracts while the rest of its oil is sold through its IOC production sharing partners. Last year many of the large oil traders such as usual allocations were cut in half. Asian traders, mainly Chinese and Indian, are expected to fare well this year as they did last year when Unipec (China’s Sinopec Corporation’s trading arm) and Indian Oil Corporation saw their allocations increased. The 20 successful Nigerian companies last year included the usual suspects, Oando, Masters and Sahara.
OPEC Daily Basket Price The price of Organization of the Petroleum Exporting Countries (OPEC) basket of twelve crudes stood at $99.97 a barrel on Wednesday 1 May 2013, compared with $100.65 the previous day, according to OPEC Secretariat calculations. Meanwhile, crude oil output from OPEC is set to reach 30.46
million barrels per day (bpd) from 30.18 million bpd in March, as it rebounds from the lowest it has been in over a year. It stood at $102.75 dollars a barrel Tuesday 7 May on compared with $102.61 the previous day. By Wednesday 22 May 2013, it had fallen to
$100.36 a barrel on compared with $101.39 the previous day, according to OPEC Secretariat calculations. The OPEC daily basket remains under pressure and has been falling since the 20th, before which it had been rising for a few days. The new OPEC Reference Basket
of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
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SECTOR SECTOR NEWS NEWS
REGULATORY Four Financial Firms Reach Final Stage Of NEITI Audit Award The Nigeria Extractive Industries Transparency Initiative (NEITI) has begun qualifying the auditing the oil and gas industry.
Describing the process, the Executive Secretary of NEITI, Zainab Ahmed, said that following the initial evaluation process, 21 shortlisted bidders were asked to submit proposals. Of these, 19
Following the submission of Expressions of
participate by the Tenders Committee. These 19
committee of experts constituted by the Board of the transparency agency. Of these, Abayomi Dosunmu and Company, Olaolu Olabimtan and Company, and Sada Idris and
demonstrable skills, including best practices in oil and gas auditing and familiarity with EITI processes; adequacy of the proposed work plan and methodology, including organization and and; promotion of Nigeria content by key staff.
criteria. The selection process began last year, in July. The bids they submitted were Taju Audu: N139.45 million; Sada Idris: N122.47 million; Abayomi Dosunmu: N113.9 million, and Olaolu Olabimtan: N71.82 million.
be recommended to the Tenders Committee of the Board and the National Stakeholders Working the approval of the Bureau of Public Procurement and Executive Council of the Federation.
NEITI Board Member NNPC: No Government Appointed To The Plans To EITI Global Board A member of the Nigeria Extractive Industries Transparency Initiative (NEITI) National Stakeholders Working Group (NSWG), Faith Nwadishi has been nominated as a full member of the International Board of the Extractive Industries Transparency Initiative (EITI). The move is largely seen as validation of the work being done by NEITI to achieve transparency and accountability in the Nigerian extractive industries, but due to its importance, the Nigerian oil and gas industry in particular. The EITI International Board, chaired by former British Member of Parliament, Clair Short is the highest policy making organ of the global Extractive Industries including Nigeria. Ms Nwadishi is to represent the Civil Society in the International Board made up of twenty members drawn from member countries across the world. Faith Nwadishi is the National Coordinator of an international Civil Society Organisation known as Publish What You Pay (PWYP). PWYP is reputed worldwide for championing the campaign for companies to disclose publicly what they pay to government in form of royalties, levies and taxes and for governments to also declare what they receive.
South Africa And Nigeria Sign MOU On Oil And Gas Nigeria and South Africa have signed a Memorandum of Understanding (MOU) that will see the two largest African economies co-operating over a number of sectors including oil and gas. The pact was signed during President Goodluck Jonathan’s state visit to
Establish Pipeline Protection Agency
Following the call by the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) for the establishment of a pipeline protection agency, the state national oil company, Nigerian National Petroleum Corporation are no plans to establish any such agency. The President of the NUPENG, Comrade Igwe Achese had called for special agency that will be responsible for monitoring and protecting the nation’s 5,000 kilometres pipeline network. Responding to the call for a new agency, Ms Tumini Green, speaking to Dow Jones Newswires, said that NNPC has been collaborating with security agencies and local communities and she commended the work being done by the Joint Task Force, the agency set up by the Government to tackle the menace of oil theft, which she said to end pipeline vandalism.
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WAGPCo Unable To Resumption Date After failing to meet the April 30 deadline it had set previously for the resumption of gas delivery through its pipeline, the West African Gas Pipeline Company (WAGPCo) has decided not to set a new deadline until it has completed all preparatory work. The vital pipeline was shut six months ago on the 28th of August, after incurring extensive damage in the Lome area. The crash occurred when a Togolese naval vessel collided with another craft causing severe damage to the pipeline in the incident. According to the General Manager,Corporate Affairs, Mrs Harriet Wereko-Brobby, the company is carrying on with maintenance work and is currently cleaning and drying the pipeline, a measure that will protect it against pipeline corrosion. The delay in resuming operations is causing a great deal of hardship to the recipient nations. Ghana, for example, has been rationing power after the 200 mega watt Asogoli power plant, which relies wholly on gas delivered through the pipeline, ground to a complete halt following the incident. MrsWereko-Brobby said previously: “The damaged pipeline is receiving intensive repairs and it is being tested to make it leakage-proof. We have replaced the damaged segments, tested the joins and made sure that there are no leakages. Now the next thing that we have to do is to clean the pipeline to make sure that there is no water and debris.” Unfortunately, the April 30th deadline she gave in the statement was not adhered to by the company. MrsWereko-Brobby explained that the damaged pipes had been replaced and the joints tested and that the drying of the pipeline was now taking place following which, operations along the 656 kilometre long pipeline will resume. The pipeline project, a joint venture between public and private sector companies from Nigeria, Benin, Togo and Ghana was set up to transport natural gas from Nigeria to the partner countries who make up the customers. The company, which has its headquarters in Accra is owned by Chevron West African Gas Pipeline Ltd. (36.7%); Nigerian National Petroleum Corporation (25%); Shell Overseas Holdings Limited (18%); Takoradi Power Company Limited (16.3%); Societe Togolaise de Gaz (2%); and Societe BenGaz S.A. (2%). An extension of the pipeline to the Jubilee will see Ghana adding to Nigerian supply to the company’s customers.
SECTOR SECTOR NEWS NEWS
FINANCIAL Heritage Oil’s Share Price Fell Following OML 30 Under Performance FTSE 250-listed Heritage Oil’s share price fell yesterday after revelations that OML 30 was not performing as expected. The independent upstream exploration and production company which his dually listed on the Toronto Stock Exchange was expecting to maintain production at the 35,000 barrels per day (bpd) pre-acquisition level but production had to be cut back due to repairs to a faulty manifold. Labour issues have exacerbated matters with production now down to 20,350 bpd. This prompted a share fall as the company announced its results for the 12 months ended December 2012. The company acquired an interest in OML 30, Nigeria, through Shoreline Natural Resources Limited, whose ownership interests are held by Heritage Oil SNR, a wholly owned subsidiary of Heritage and a local Nigerian partner, Shoreline Power Company. The acquisition provided a material change in proved and probable reserves for Heritage, which RPS Energy Consultants Ltd independently estimate at 412 MMbbls, for interests in Nigeria and Russia, as at 31 March 2012. has been a momentous year in the evolution of Heritage. ... Our transformation includes entry into new regions of Nigeria ...” enlarged exploration portfolio, providing more balance with both Since the acquisition of an interest in OML 30, revenues net to Heritage of $234.5 million have been generated. The company made a cash payment of $52.5 million, in April 2013, to reduce the bridge loan to $497.5 million. Average gross production from OML 30 has been 20,350 bpd since the acquisition. Heritage is expecting to push production back up to 35,000 bpd once the repairs are completed by the end of May especially with the labour issues now resolved. The share price of the company which has producing assets in Nigeria and Russia and exploration assets in Tanzania, Papua New Guinea, Malta, Libya and Pakistan closed down six per cent at 160p May 1st.
Oryx Raises $249.7 Million In Canadian IPO Oryx Petroleum’s partners in Oil Mining Lease (OML 141) will be pleased to know that the company has succeeded in raising $249.7 million in an initial public offering. The company, which farmed into OML 141 in 2011, is an offshoot of the Addax and Oryx Group Limited (AOG), which was incorporated in 1987. Founder of AOG, Jean Claude Gandur, was the founder of Addax Petroleum, which he sold to Chinese state-owned Sinopec in 2009 for a reported $9.8 billion. Oryx is his attempt to build a new Addax Petroleum and it is made up of key members of the former senior management team of Addax.
Lekoil was welcomed to market by Alderman Roger Gifford, Lord Mayor of the City of London, who presented a commemorative plaque to the company to mark the occasion. Ibukun Adebayo, Head of Primary Markets for Africa, London Stock Exchange Group, said: “We are delighted to welcome Lekoil to AIM.
The company had previously announced that it was seeking the IPO to enable it to accelerate work on its assets. It had said that it plans to invest $400 million over the next four million on exploration in 2013 alone.
NNPC, MPN Considering Bond Market Alternative Funding The Nigerian National Petroleum Corporation (NNPC) and its Joint Venture partner, Mobil Producing Nigeria Limited (MPN) are considering going into the bond market as an alternative source of funding by the year 2016. This was disclosed by the NNPC’s Group Executive Director, Finance and Account, Mr Bennard Otti at the opening ceremony of a 3-day workshop titled: “NNPC/MPN JV Project Bond Workshop” held in Abuja. In his opening remarks, the GED stated that:
Lekoil Lists On London Stock Exchange’s AIM Market Lekoil has been admitted to the London Stock Exchange after listing on its Alternative Investment Market (AIM). The company raised approximately $50 million giving it a market capitalisation of $112.1 million at admission. The Lekoil listing is remarkable, as it is the largest capital raising on AIM so far in 2013. It follows the recent admission by another exploration and production company, Eland Oil & Gas.
Oryx Petroleum is understood to have reduced the size of the sale after originally announcing its intention to raise $346 in the IPO. It sold 16.7 million shares for $14.86 each as against the price of $19.81 to $22.78 dollars, which it was initially seeking. The sale was led by Royal Bank of Canada, Barclays, Bank of America Merrill Lynch and Bank of Montreal.
This is the third Nigerian company in eight months to raise money and issue shares on our markets, highlighting London’s role centre for the economic development of Nigeria.” AIM is the London Stock Exchange’s international market for smaller growing companies. A wide range of businesses including early stage, venture capital backed as well as more established companies join AIM seeking access to growth capital.
“NNPC is meeting with her JV partner to brainstorm on alternative sources of funding such as bond market in order to enhance the revenue and also create employment opportunities”. Speaking at the event, MPN’s Upstream Controller and Chief noted that since 2004, funding from the Federal Government has not been NNPC/MPN joint venture to seek for alternative source of funding in order to bridge the gap.
Nigeria’s $1 billion Sovereign Wealth Fund To Start Investing In June Nigeria’s Sovereign Wealth Fund (SWF) is preparing to begin investing as from June. The Nigerian Sovereign Investment Authority (NSIA) said this in a statement this week. The Authority said it would allocate 32.5 per cent of the fund to infrastructure investment, and the same for a future generations savings pot. Two per cent, it said would be used to protect against commodity price shocks, while 15 per cent would remain unallocated. “This formula aims to balance the infrastructure need of the current generation and the need for savings for the future generation of Nigerians,” said the statement. Investment in the infrastructure fund will be delayed while further details are worked out. However, investment in both the future generation and the stabilization fund will proceed in June, according to the statement.
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LOCAL CONTENT
SECTOR SECTOR NEWS NEWS
Shell Begins Registration Of Local Manufacturers development initiative, Shell is looking to identify in-country manufacturing and raw material production capability for the oil and gas sector. The company is calling on companies involved in manufacturing, raw material extraction and production, assembly and maintenance, chemicals, machine
parts and piping materials related to or which may have relevance to the Nigerian oil and gas industry. These may be local manufacturers of tools, goods and products that can be used in the oil and gas industry. It could also be companies that are involved in the extraction of raw materials, which can be used for end products in the oil and gas industry.
Any company interested in registering their details are asked to email their company details to NCD-events@Shell. com and they are to include details of the products and raw materials with their possible use or application in exploration and production operations. The deadline for the submission of information is Friday 14th June 2013.
Aveon Offshore Featured In OTC News Indigenous company, Aveon Offshore, an exhibitor at OTC was a source of pride to Nigeria after getting a mention in the daily newspaper from the Conference and Exhibition. Aveon, an engineering and fabrication services company, was mentioned for its contract award for the fabrication of some major components of the subsea systems for the Esso Exploration and Production Nigeria Limited (EEPNL) Erha North Phase 2 Project. The wholly Nigerian owned company secured the contract from Cameron Offshore Systems Nigeria Limited who won the
Engineering Procurement Construction contract for the subsea systems of the project. Aveon’s contract consists of the fabrication and load-out of approximately 1,000 tons of subsea structures which includes 5 manifolds and modules together with the associated suction piles, various Christmas Tree frame elements and control system foundations. Aveon’s fabrication yard in Rumuolumeni, near Port Harcourt, is preparing its
200,000
The expected productive man-hours of work generated at Aveon’s fabrication yard in Rumuolumeni
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240,000 sq m fabrication yard to take on the project. They expect it to generate 200,000 productive man-hours of work. The company is now intending to add a dedicated 2,000 m2 high-bay workshop that will ensure that it has the capacity to handle the job with delivery scheduled for between August and October 2014. Cameron Offshore Systems Nigeria Limited is itself no stranger to the manufacturing and fabrication sector. In October last made-in-Nigeria sub-sea Christmas Tree for Total’s Usan project. At the time, the Executive Secretary of the Nigerian content Development Management Board, Mr Ernest Nwapa, commended the company on the completion of the Christmas Tree, saying: “In the next 3-5 years Nigeria will have over 25 globally recognised original Equipment Manufacturers making their equipment or major components here, either directly or using their Nigerian representatives”.
Tenders Chevron Nigeria
EEPNL
Provision of Self-Propelled Barges
Provision Seismic Data Processing Services
Chevron Nigeria Limited invites interested and for the provision of self-propelled barges (SPBs) of NNPC/CNL joint venture onshore production operations, including Non-Rig Work-Over (NRWO). Only bidders who are registered with NJQS Product/Categories 3.08.02 (Barges - including self-propelled) and 3.08.99 (Other Transportation/ Supply and Disposal Services) shall be invited to submit technical bids. The closing date for this opportunity is 5th June 2013.
ESSO Exploration and Production Nigeria Limited contractors for the tender opportunity for the provision of 3D/4D seismic data processing services. The contract is proposed to commence by the 3rd quarter of 2013. Only bidders who are registered with the relevant 2D/3D/4D Seismic Data Processing Services Product Group 3.10.02 NJQS Product/Category shall be invited to submit technical bids. The closing date for this opportunity is 14th June 2013.
Chevron Nigeria
Addax Petroleum
Provision of Self-Elevating Work-Over Platform/Jack- Up Barges
Provision of Helicopter Services in OMLs 123,124,126 and 137
Chevron Nigeria limited invites interested
Addax Petroleum Limited invites interested and
opportunity for the provision of self-elevating work-over platform/jack-up barges in support of NNPC/CNL joint venture offshore operations. Only bidders who are registered with NJQS product category 3.08.04 (Accommodation Platforms/Vessels - Jack-up) shall be invited to submit technical bids. The closing date for this opportunity is 10th June 2013.
for the provision of helicopter services for Addax OML 123/124 and OML 126/137. The contract is proposed to commence in the 3rd quarter of 2013 and continue for a duration of 5 years. Only bidders who are registered with NJQS under the applicable Product/category (3.08.03) shall be invited to submit technical bids. The closing date for this opportunity is 14th June 2013.
Chevron Nigeria
Pan Ocean Oil
Provision of Leased International (IPLC) Communication Circuits
Provision of Telecom Services
Chevron Nigeria Limited invites interested and precompanies to respond to the opportunity for the provision of international leased circuits services between CNL locations and other Chevron international business units. of 2014. Only bidders who are registered with NJQS product/category 3.01.12 “telecommunications services” and 3.11.20 “telecommunication installation/support services” shall be invited to submit technical bids. The closing date for this opportunity is 13th June 2013.
Pan Ocean Oil Corporation Nigeria limited invites interested and preopportunity for the provision of telecoms infrastructure for their Lagos and Warri with NJQS Product/Category for Telecommunication Installation/Support Service 3.11.20 Product Category shall be invited to submit technical bids. The closing date for this opportunity is 31st May 2013.
For further information on all the above listed tender opportunities please visit www. Nipexng.com
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Nigeria Oil & Gas Technology Exhibition Lagos, Nigeria. 4 - 6 June www.cwcnogtech.com Oil Council’s Africa Assembly Paris, France 11-12 June www.oilcouncil.com Oil Spill Conference Accra Ghana 12 - 14 June www.oilspillconferenceng.com Global Petroleum Show Calgary, Canada 12 - 14 June www. globalpetroleumshow.com 4th Eastern Africa Oil, Gas & Energy Conference Nairobi, Kenya 16 - 20 June www.petro21.com North Africa Gas Summit Rome, Italy 24 June www.north-africa-gas.com Understanding Cabotage and Local Content in the Nigerian Oil and Gas Industry Lagos, Nigeria 25-27 June info@nigerian-shipping.org PLATTS Africa Oil Forum Lagos, Nigeria 27 June www.platts.com
Assembly London, United Kingdom 26 - 27 June www.oilcouncil.com
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June Events
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