Petrofac Clinches Strategic Alliance Partnership For OML 119 - Africa’s premier report on the oil, gas and energy landscape.

Petrofac Clinches Strategic Alliance Partnership For OML 119

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.

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4 comments

  1. AAA says:

    I am always a litle surprised at the seeming fearlessness that Toyin Akinosho displays. He didnt fail to subtly highlight the possible political and very likely illegal leverage that Taleaveras enjoyed by the relationship with the Minister. There is even a possibility that the Minister is deeper in the deal than we can imagine.
    Deals like this Petrofac/Taleaveras is another reason why the Minister’s powers must be dreastically reduced in the scheme of petroleum business in Nigeria. While concentrating power in the Minister has some benefits,it can be argued that these powers most of the times are used for unwholesome and shady deals.

  2. foluso Ogunsan says:

    AfricaOil+GasReport is the premier and primer of hydrocarbon activity in Nigeria. We go great lengths to connect a story to its reality past, present and future. For a company that has no known track record in the upstream industry to become the preferred candidate for an oilfield that produces more crude than most marginal field operators in preference to a known, willing and able candidate that kept show due diligence to operate, smacks of favouritism to say the least! Facts are Facts! AfricaOil+GasReport just states t as it is.

  3. Anonymous says:

    I believe the idea is to promote local content and indigenous companies participation/ownership of these fields. The agreement places Taleveras solely within the capacity of funding NPDC operations of the asset because of the state company’s incapacity to do so, similar to the Atlantis Energy agreement.

    Most IOC’s are selling off their onshore assets due to the crude oil theft in Niger Delta anyways, so won’t it be better for local companies to start acquiring these fields? Eventually they will perfect the physical operations in the field and community relationships will be managed by an indigene.

  4. Anonymous says:

    @Foluso, it looks like you need to read the local content act to understand the strategic shift Nigeria has taken with its local content policies. How does a local company acquire such experience in upstream operations and even attempt to grow and become a major player without getting such benign opportunities. They are only funding operations so there isn’t a safety or operational risk. IMHO its a very good way to give an indigenous company a start. As Nigerians, we need to rethink our policies and employ more strategies to help indigenous companies. In this case its a win-win. NPDC (local operator) operates the field and Taleveras (local content partner) funds the operations. For example, One cannot start ANY business in Dubai without a local Emirati owning 51% share in the business. Look at how far they have progressed and how much wealth they have created locally in such a small time. Africa Oil & Gas report please take note that not every transaction is shady or fraudulent.

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