Eland Oil & Gas has announced that regulatory approval has been obtained for the Gbetiokun Field Development Plan (‘FDP’) from Nigeria’s Department of Petroleum Resources.
The FDP caters for the drilling of an additional five oil production wells during phase 1 of the development, followed by the drilling of a further six oil production wells and a single workover well (the conversion Gbetiokun-2 to a water disposal well) during phase 2.
Furthermore, following the successful completion of remedial and upgrade works on the swamp drilling unit ‘OES Teamwork’, we are pleased to announce the spudding of the Gbetiokun-4 well on 12 July 2019. It is intended that this well will be completed as a dual string producer on the E3000 and E5000 reservoirs with an estimated initial production rate of between 3,000 and 5,000 bopd.
George Maxwell, CEO of Eland, commented:
‘We are delighted to have received regulatory approval for the Gbetiokun Field Development Plan from the Department of Petroleum Resources. The approval enables us to progress with our phased development programme of the Gbetiokun field.
‘Moreover, we are pleased to have resumed drilling on the Gbetiokun field after the successful remedial work on the OES Teamwork rig. We look forward to updating our shareholders on drilling progress in the near future.’
The Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside, has commended the judgement of the Federal High Court in the case involving Seadrill Mobile Unit Nigeria Limited and the Federal Ministry of Transportation (FMOT), which affirmed NIMASA right to collect fees from drilling operations.
NIMASA was later joined as a necessary party in the suit originally instituted by Seadrill Mobile Unit Nigeria Limited against the FMOT.
Dakuku said the judgement was yet another landmark attempt by the judiciary to set the record straight and boost implementation of nation’s Cabotage law, while generating opportunities for jobs.
The suit instituted by Seadrill Mobile Unit Nigeria Limited was to determine whether drilling operations fell within the definitions of “Coastal Trade” and “Cabotage” under the Coastal and Inland Shipping (Cabotage) Act, and whether on a proper interpretation of the Cabotage Act, drilling operations fell within the definition of “vessels” under the Act.
On the first issue, the court, presided by Justice Babs Keuwumi, ruled that drilling operations fell within the ambit of exploration, exploitation, or transportation of the mineral or non-living natural resources of Nigeria, whether in or under Nigerian waters, as provided under the definition of coastal trade in the Cabotage Act.
Similarly, the court held that the combined reading of the Admiralty Jurisdiction Act, Interpretation Act, and Cabotage Act meant that drilling rigs fell under the definition of vessel under the Cabotage Act.
Having determined the two questions in the affirmative, the court granted NIMASA leave to collect all outstanding payment of the 2 per cent Cabotage surcharge from owners of drilling rigs and associated platforms.
The implication of the judgement is that oil rigs operating on Nigerian waters are subject to the provisions of the Cabotage Act.
Reacting to the judgement, Dakuku said it marked the opening of an important opportunity for job, incomes, and economic growth. He appealed to persons engaged in inland trade to pay their Cabotage fees and reaffirmed the Agency’s commitment to the enthronement of global best practices in the Nigerian maritime sector.
Total at the weekend, announced that it has achieved No-Routine-Gas-Flaring in operations on its Egina Floating Production Storage and Offloading(FPSO).
The achievement, according to Total’s Country Communications Manager, Mr. Charles Ebereonwu, follows the commissioning of Gas Compression System on the Egina Field.
Associated gas from the field is now being compressed, transported via the Akpo/Amenam gas Export line and monetised through the Nigeria LNG.
“Total has again honoured its commitment to the rule of law of its host country by fully abiding by the Nigerian Government’s Gazetted Flare Gas Regulations of 2018.
This landmark achievement, a first of its kind in Nigeria further drives home Total’s ambition to be the responsible energy major by actively reducing our CO2 emission footprints in all our activities,” said the Senior Vice President Africa, Nicolas Terraz.
The Egina Field is part of Total’s Oil Mining Lease (OML) 130, some 150 kilometres south of the Niger Delta region of Nigeria. First Oil from the field was achieved in December 29, 2018 and the field is currently producing over 200,000 barrels of oil equivalent per day (boe/d). The flare-out milestone will allow for sustainability of peak production of 200,000 boe/d over an estimated period of 4 years, with monetisation of about 124 million cubic feet of gas per day.
Execution of the Egina project also involved significant local content contribution in Nigeria, including the construction of the First FPSO Integration Quay in Africa, fabrication and installation of six FPSO topside Modules, fabrication of the largest subsea production manifold in-country, local fabrication of the first buoy hull for turret system, in-country assembly of the first Integration Control and Safety System for an FPSO and fabrication of more than 60,000 tons of equipment in-country. All these achieved with the first Nigerian based FPSO Project Management Team, with over, 46 million direct man-hours performed in-country and over 569,000 man-hours of human capacity development training across all Egina Engineering, Construction and Procurement contracts.
Total is the operator of the OML 130 field with a 24 percent interest in Partnership with CNOOC, SAPETRO, Petrobras and the Nigerian National Petroleum Corporation (NNPC) as concessionaire.
Seplat Development Company Plc has announced that its $700 million Assa North-Ohaji South (ANOH) gas project investment would deliver first gas by first quarter, 2021.
Chief executive officer of Seplat, Austin Avuru made this known at the company Capital Markets Day at the Nigerian Stock Exchange (NSE) at the weekend in Lagos.
Avuru said the project would enable the company to produce 800 million scuff of gas per day, which would ultimately account for 40 per cent domestic gas production in Nigeria.
According to him, the project is such that 50 per cent is situated in the vicarage that belongs to Shell OML 21 while the remaining half is in the Seplat JV vicarage of OML 53.
Furthermore, he added that one would be operated by Shell as a conventional joint venture concept while the other would be developed by under Seplat JV which would be functioning as a sole midstream entity.
He noted that the market prices remain strong, long term outlook for gas in Nigeria and the regional market remains positive, adding that Seplat’s access to gas infrastructure positions it to be the lending long term gas supplier of choice for Nigeria.
He stated further that “Conventional diesel off-grid poser generation is expected to be displaced, presenting Seplat gas business with a significant opportunity.
The managing director of AGPC, Yetunde Taiwo said ANOH or AGPC will built a 300 million plant which would be on a commercial construct of buying wet gas from the upstream as well as managed and operated by shell.
Nigeria and other sub-Saharan African countries would soon heave a sigh of relief from the importation of petroleum products, with the imminent completion of the 650,000 barrels-per-day (bpd) Dangote Refinery at Ibeju-Lekki area of Lagos.
Group Executive Director, Strategy, Capital Projects & Portfolio Development, Devakumar Edwin, made this statement on Wednesday, July 10, 2019, during the opening of the Ghana International Petroleum Conference (GhIPCON), which took place in Accra, Ghana.
This year’s conference held under the theme: ‘Regional Collaboration: A Catalyst for Transformation,” organised under the auspices of the Ministry of Energy and the National Petroleum Authority, was attended by stakeholders in the petroleum sector in the West Africa region.
Represented by the Technical Adviser to the President of Dangote Group on Refinery and Petrochemicals, Ign. Babajide Soyode, Mr. Edwin expressed the belief that the completion of Dangote Refinery and other modular refineries projects across West Africa, would lead to the integration of the downstream industries and stabilise the prices of petroleum products across the African sub-region.
He stressed the need for other investors in West Africa to emulate the investment drive of Aliko Dangote in the downstream petroleum sector and make the sub-region exporter of refined products.
He also urged investors in sub-Saharan Africa to take the bull by the horn by investing in the downstream sector.
According to him, “If Dangote can do it, any investor can do it. Dangote has not waited for government to regulate the downstream sector before starting the construction of the refinery.”
“We don’t need foreign investors to turn around our downstream sector. African investors should be able to emulate Dangote and revive the African downstream petroleum industry,” he added.
He assured that the refinery is designed to process multiple grades of domestic and foreign crude, which can be converted into high-quality gasoline, diesel, kerosene, and aviation fuels that meet Euro V emissions specifications.
The facility, according to him, would be integrated with a petrochemical unit that will produce polypropylene and fertilisers.
Mr. Edwin said Nigeria would soon become the largest exporter of fertiliser in Africa as the Dangote Fertiliser Company is set to commence full production.
According to him, pre-commissioning activities have started while construction work is still on-going at the Dangote Refinery site.
Speaking also at the event, the Vice President of the Republic of Ghana, Dr. Mahamudu Bawumia, assured stakeholders in the petroleum downstream industry that government would create an enabling environment for downstream business to thrive competitively, efficiently and with the highest of safety standards.
“Government, through the Ministry of Energy is in the process of ensuring institutional and regulatory re-alignment of the midstream gas subsector to bring clarity and a degree of certainty to players within that subsector,” he said.
The GhIPCON is designed to actively bring to the fore the operating industry’s perspective and guidance on issues of governmental and regulatory policy, as well as best practices for the advancement of the industry across West Africa.
The conference witnessed a convergence of about 250 regulators and downstream industry stakeholders from across the West African sub-region and beyond.
The event stimulated regional discussions that set the tone for a West African policy framework on the outlook of the petroleum downstream industry, regulate petroleum downstream infrastructure projects, efficiency and financing.
Participants discussed whether or not West Africa was ready for IMO 2020 and fuel specification trends, making West African refineries work, tackling illicit activities, fuel fraud and supply chain security in the West African sub-region, as well as consumerising West Africa’s natural gas.
Topics discussed at the event included: Unlocking West Africa’s Deregulatory Inertia, Making West Africa’s Refineries Work, Ghana’s Cylinder Reticulation Model, Harmonsing Sub-Regional Petroleum Products Specifications, and Challenges of Regional Distribution of Petroleum Products’.
After nearly two months extension, contractors have started a renewed race to meet the July 31 deadline to submit their technical and commercial bids aimed at supplying a floating production, storage, and offloading vessel for Shell’s $10 billion Bonga South West Aparo (BSWA) project.
People familiar with matter say if bids are submitted this quarter, clarification talks proceed as planned and costs meet the expectations of all partners in the deep-water project, Shell Plc. may attempt to take a final investment decision (FID) next year.
Three contractors with active interest in supplying the 150,000 barrels per day FPSO include South Korea’s Samsung Heavy Industries, with a base-case proposal, said to involve using the SHI-MCI yard in Lagos which most recently handled the FPSO integration work on Total’s Egina project.
A consortium of China’s Offshore Oil Engineering Company (COOEC) and Italy’s Saipem are also in the race. Iain Esau and Xu Yihe, analysts at Upstreamonline.com, an online platform that provides oil and gas news reported July 4 that an informed source said COOEC would build the topsides but would outsource hull fabrication work to other yards in China. Saipem will deal with the challenging local content aspect of the project.
A third group believed to be preparing to submit bid documents is China’s CIMC Raffles and Monobuoy, a Lagos-based engineering concern with a United States of America parent company.
CIMC was previously expected to tie up with Kavin Engineering and NOV, and it is not known if these two contractors remain involved.
However, the Samsung-led group will be the bidder to beat because it has access to the only yard in Nigeria able to build and integrate FPSO topsides, a key factor in satisfying stringent local content requirements. It would have to navigate its thorny relationship with the Lagos Deep Offshore Logistics Base (Ladol), its joint venture partner in the SHI-MCI yard.
The most likely scenario will see Samsung use the SHI-MCI yard for BSWA, although experts have said that the Korean giant could propose other options. For years, Niger Dock has been touted as a possible facility that could be upgraded to handle FPSO and topsides work.
On February 14th Shell Nigeria Exploration and Production Company (SNEPCo) had announced the release of Invitation to Tender (ITT) to contractors for the development of the Bonga South West Aparo (BSWA) oil field.
The project’s initial phase includes a new FPSO vessel, more than 20 deep-water wells, and related subsea infrastructure. The field lies across Oil Mining Leases 118, 132 and 140, about 15km southwest of the existing Bonga Main FPSO.
The ITT is for engineering, procurement and construction contracts for the 150,000 barrels per day project in the Gulf of Guinea.
“This is a new vista for deep offshore oil and gas exploration in Nigeria based on a revised commercial framework embraced by government and the project investors,” Bayo Ojulari, SNEPCo’s managing director, said on 14 February 2018 a day after the execution of the Heads of Terms by the Nigeria National Petroleum Corporation (NNPC), SNEPCo and its Unit partners, revising the terms of the OML 118 Production Sharing Contract, in a media release of February 14, 2019, signed by Bamidele Odugbesan, media relations manager at Shell Plc stated; obtained from the super oil major’s website.
Ojulari said, “SNEPCo has concluded OML 118 negotiations with the NNPC. We now have a clear commercial framework, supported by the government and project investors, toward a potential Bonga South West Aparo Final Investment Decision (FID).”
BusinessDay rang Odugbesan at 12:57 pm on Tuesday but he was in a meeting and could not immediately comment before press time.
McDermott, Saipem, Subsea 7 and TechnipFMC are among those set to submit bids by the end of this month for the project’s EPC-2 package which will be worth upwards of $1 billion.
BSWA’s umbilicals, single-point mooring system and subsea production system are subject to separate bid processes, with TechnipFMC, BHGE, and OneSubsea thought to be chasing the latter, which is centred on more than 20 wells.
However, many project watchers are doubtful that the scheme will progress as planned unless the FPSO costs, in particular, can be reined in, and Shell and its partners can finalise an agreement with Nigeria’s government on a new production sharing contract for the asset.
In late May, Nigeria’s Minister of Petroleum Ibe Kachikwu said: “We’ll be looking to better terms than the previous production sharing contracts (PSCs).” He clarified that old PSCs which gave an 80:20 profit split in favour of oil companies is “a non-starter”, pointing out that a 60:40 split would be desired by Abuja.
The PSC covering OML 118, which holds the bulk of BSWA, is due to expire in 2023.
Other critical projects that have also suffered delays in Nigeria’s oil and gas industry include: the 120,000bpd Shell and Eni’s Zabazaba/Etan project in the disputed Oil Prospecting Lease (OPL) 245, ExxonMobil’s 140,000bpd Bosi project, ExxonMobil’s 110,000bpd Uge project and Chevron’s 100,000bpd Nsiko deepwater project.
The delays in the execution of these projects, which are estimated to cost about $23 billion, is largely caused by the lack of clarity of terms as a result of the non-passage of the 12-year-old Petroleum Industry Bill (PIB), and inadequate funding.
Conoil, a listed oil and gas company, has announced a 53.9 percent increase in its profit for the first quarter of 2019. This increase pushed the company’s net profit to the highest level in the last five years.
The company on Wednesday reported that it made N325.18 million as profit in the first quarter, up from N211.295 million made a year earlier. The increase was driven by improvements in Conoil’s revenue and cost management.
In the quarter, Conoil recorded revenue of N35.64 billion from the sales of petroleum products, representing 13.8 percent more than the oil company made in the corresponding period of 2018.
Conoil makes its revenue from three segments namely; White products, Lubricants and Liquefied Petroleum Gas (LPG).
White products segment involves the sale of Premium Motor Spirit(PMS), Aviation Turbine Kerosene (ATK), Dual Purpose Kerosene (DPK), Low-pour Fuel Oil (LPFO) and Automotive Gasoline/grease Oil (AGO). In Q1, White products contributed 95 percent to revenue while Lubricants accounted for the other 5 percent.
Despite the double digit growth in revenue, cost of sales rose 15 percent to N32.68 billion paring Conoil’s gross profit in the quarter. As a result, top-line shrunk to N2.96 billion, down from N3.06 billion in Q1 2018.
Conoil’s other operating income fell to N30.9 million, 68 percent less than N96.42 million previously earned.
However, the oil and gas company was able to reduce its cost in the period which translated to improved earnings. In the period, distribution expenses fell by 31 percent and the company was able to cut down administrative expenses by 7 percent, while finance cost declined some 4 percent.
Consequently, Conoil was able to post a profit before tax of N478.202 million in Q1 2019 as against N310.730 million in the same period of 2018. The company made a profit of N325.18 million while its tax expenses rose 53.9 percent to N153.03 million.
On the back of its improved performance, earnings per share rose to 47 kobo in Q1 2019, from 30 kobo in Q1 2018 while Net asset per share rose to N26.76 from N26.09.
Meanwhile, Conoil shed 9.93 percent on Wednesday to close at N19.95 per share. The company’s share has fallen by 14.19 percent so far in 2019. Conoil markets refined petroleum products in Nigeria. The Company also manufactures and distributes lubricants and chemicals.
Ogun State Governor, Dapo Abiodun, has declared that his administration would not allow the oil rich Tongeji Island that shares boundary with the Republic of Benin, to be taken away by Nigeria’s neighbouring country.
Abiodun said his administration is determined to do all in its power to make life meaningful for the citizens of the state living within the Island located in Ipokia Local Government area of the state,
Abiodun who made this known at the weekend when he received the Nigerian Ambassador to the Republic of Benin, Ambassador Emmanuel Kayode Oguntuase and the Flag Officer Commanding Western Region(FOC), Rear Admiral Oladele Daji, noted that the Island had been on his administration’s radar because of its huge deposit of petroleum resources.
According to him, the Island is of huge interest to his administration.
Abiodun said the visit of the Ambassador would only make his administration to act even quicker and ensure that the Republic of Benin that shares boundary with the state does not take advantage of the Island.
He added that state government would set up a team to visit the Island soon on a fact finding mission and to find out what could be done to assure the people of the area that they have not been forgotten.
The Governor further disclosed that his administration had informed the Federal Ministry of Petroleum that the Island was of huge interest to the state government, adding that his government had also began discussions with investors on the way forward.
Abiodun said: “Tongeji Island is a place where we do have valuable reserve and I had mentioned to the Federal Ministry of Petroleum that the Island and Ogun Waterside are areas of interest to the state government and we have began discussions with others to explore partnership agreements under a Public Private Partnership to see what we can do in terms of prospecting the opportunities that lay beneath the soil in Tongeji Island and Ogun Waterside.”
He said his administration would fast-track the process to see other services that could be rendered to the people of the area, pledging take the issue up with the National Borders Commission.
The governor said he would also engage the Development Agenda for Western Nigeria Commission (DAWN) and involve Lagos and Oyo State governors that also share border towns with the Republic of Benin.
He lauded the Flag Officer Commanding the Western Region, Rear Admiral Oladele Daji for ensuring that the water ways were free and devoid of anarchy, and urged him not to hesitate to bring to his notice, issues that are germane to the security of the region.
In his remark, the Nigerian Ambassador to the Republic of Benin, Ambassador Emmanuel Kayode Oguntuase disclosed that his visit to the state governor was to intimate him on happenings in the area as the closet to the Island, adding that it was important to let the over One thousand inhabitants of the Island to feel governments presence, as the Republic of Benin was presently trying hard to lure the people and take over the Island because of the huge petroleum resources embedded beneath the ground.
The Nigerian Ambassador to the Republic of Benin and the Flag Officer Commanding Western Nigeria, had with them the Consular Officer, Mrs. Olubunmi Olanusi, Commandant, Nigerian Navy Secondary School, Abeokuta, Commandant Dauda and the Deputy Defence Attache, Commandant Tony Bassey.
OPEC’s oil production dropped by another 68,000 bpd to 29.83 million bpd in June, as output from Iran and Libya—exempt from the production cut pact—and other members offset large increases in Saudi Arabia and Nigeria.
According to secondary sources in OPEC’s closely watched Monthly Oil Market Report published on Thursday, the cartel’s output hit a new low in recent years and was at the lowest in five years in June, just ahead of OPEC and its allies rolling over the production cuts into March 2020.
OPEC’s official figures are very close to last week’s Reuters survey, which showed that OPEC pumped 29.60 million bpd in June, the lowest monthly output since April 2014.
Last month, the largest drop in production was registered in Iran, whose crude oil production fell by 142,000 bpd to 2.225 million bpd, due to the U.S. sanctions on its industry. Iran’s production is now more than a million barrels per day down from its 2018 average of 3.553 million bpd, according to OPEC’s secondary sources, which the cartel uses as a benchmark to report production and compliance with the deal.
Iran has stopped supplying directly reported figures to OPEC regarding its production.
Production in Libya and Angola also fell significantly last month, by 58,000 bpd and 57,000 bpd from May, respectively. Venezuela booked another decline, by 16,000 bpd, bringing its crude oil production to just 734,000 bpd in June.
Among OPEC’s members who boosted production, Nigeria led the increases with 129,000 bpd in June over May, while the largest producer Saudi Arabia raised its crude oil production by 126,000 bpd to 9.813 million bpd, still cutting more than its quota of 10.311 million bpd under the pact.
In July and August, Saudi Arabia is determined to keep its oil production below 10 million bpd and average monthly exports at below 7 million bpd, to “avoid excess stock building, particularly in oversupplied markets,” a Saudi source told Argus on Thursday.
Based on OPEC’s oil market outlook for 2020 in this month’s report, the cartel expects demand for its crude next year to be lower than its current production and to average 29.3 million bpd, down by around 1.3 million bpd from 2019.
Eland Oil & Gas PLC (AIM:ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce that a remedial tubing patch has been installed on the Gbetiokun-3 well in licence OML40.
As previously announced (“OML40 Operational Update”, 25 June 2019) we have been undertaking necessary remedial work on the Gbetiokun-3 short string. The well was drilled as an appraisal well in Q4 2018 with the dual completion on the D9000 and E4000 reservoirs being installed in Q1 2019. During pressure testing, a small leak was identified on the shallower D9000 completion string. Following further diagnostic logging, the leak was located, and a remedial tubing patch has now been successfully installed.
At present, the short string is being produced with the temporary facilities on location. Initial gross rates of some 3,880 bopd have been recorded at a choke size of 36/64″. The deep E4000 interval was tested in Q1 2019 and achieved choke-limited gross rates of 3,000 bopd, in line with pre-drill expectations.
The company expects the field to be brought onstream in July through the Early Production Facility, presently being installed, with initial gross production of approximately 12,000 bopd (net: 5,400 bopd) from the Gbetiokun-1 and -3 wells.
George Maxwell, CEO of Eland, commented:
“We are pleased to have successfully completed the remedial work on Gbetiokun-3 and are very happy with the achieved flow-rates of almost 7,000 bopd. With Gbetiokun-1 performance already established at over 5,000 bopd, we look forward to updating all shareholders as we bring the field on stream later this month.”