Petrofac, in league with local content vehicle Taleveras, has won the strategic alliance partnership of NPDC to fund the operations in the Oil Mining Lease (OML) 119 in Nigeria’s prolific south eastern offshore.
State hydrocarbon company NPDC is operator of the acreage, which contains the Okono and Okphoho fields, discovered by the defunct Exploration & Exploitation (E&E) Division of NNPC, the forerunner of NPDC, during its exploration campaigns between 1978 and 1983.
With the contract secured, Petrofac takes over from Agip Energy and Natural Resources (AENR), the subsidiary of Italian giant ENI, which has funded oilfield activity in the acreage since 2000. Although AENR was competitively selected as a strategic alliance partner for the development of the twin fields in August 2000, it is not clear whether the Petrofac/Taleveras award was a result of any competitive bidding. AENR signed the agreement in December 2000 and delivered first oil in December 2001. “It was one of our best field development undertakings”, according to a source at ENI. AENR operated the asset from 2000 to 2005, and turned it over to NPDC for operatorship. The terms of the agreement with Petrofac/Taleveras however precludes operatorship. Their purpose is, solely, to fund NPDC’s operations in the asset.
Clinching the partnership deal is clearly a big one for Petrofac, a UK listed, FTSE 100, oilfield service company, with EPC contracts in excess of $3Billion currently in execution in North Africa alone. OML 119 was producing 35,000BOPD as of June 2013, down from as high as 66,000BOPD in 2007, but the acreage’s upside potential is underscored by the recent discovery of two oil filled reservoirs-deeper by as much as 600 metres than the deepest producing zone- which NPDC is hoping to develop.
Petrofac has hovered around West Africa for the last three years, hoping to get a significant transaction. It has invested close to $175MM in Nigeria (mainly in Septa Energy) since 2010, attempted to get into Cote D’Ivoire and bravely announced, several months ago, a planned $500MM investment in tiny Cameroon.
AENR is not entirely happy to walk away from OML 119. For the past 10 years, it has hoped that the service contract could be converted to a Production sharing contract. In 2010, the Nigerian media reported that Nigerian authorities dismissed AENR’s application to buy out NPDC from OML 119. ENI’s sources deny the claims, but admitted the company would have preferred a PSC in which AENR serves as operator. OML 119 remains NPDC ‘s main cash cow.
Taleveras’ founder, Igho Senomi, 37, a 1999 graduate of geology from the University of Jos in north central Nigeria, is reportedly close to Diezani Allison- Madueke, the country’s petroleum minister. The company is known majorly as a trading firm through Taleveras Petroleum Trading BV, a wholly-owned subsidiary of Taleveras Group. Operating out of London, the company trades Crude and Fuel Oil, Condensates and Liquefied Petroleum Gas (LPG) as well as refined petroleum products such as Gasoline, Dual Purpose Kerosene, Gasoil, Naphtha, Jet Fuel.
Taleveras’ upstream track record is largely unknown, although the company claims it has equity in two blocks which are not disclosed on its website.