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STAC Marine Wraps Up Purchase of Abo FPSO for $20Million

The Nigerian marine operator STAC Marine Offshore Limited, has finalised the purchase of the Abo Floating Production Storage Offloading (FPSO) vessel from BW Offshore, the Norwegian provider of floating productions solutions.

As part of the transaction, BW Offshore has entered into a bareboat charter with STAC to allow for uninterrupted operations for the client during a transition period of maximum two months. Upon expiry of the bareboat charter, STAC will assume responsibility for operations of the unit.

STAC is a member of the Nigerian Transport Group (STAC).

BW Offshore has managed the Abo FPSO since the Abo deepwater field came on stream in 2003.

In the last five months, it had been seeking to end the contract with ENI, the Italian operator of the field. It has had three short contract extensions between June and September 2023.

This sale of the vessel to a Nigerian firm, effectively removes the responsibility of running the FPSO, from BW Offshore’s shoulders.

Originally recognised as the “Gray Warrior“, a Suezmax tanker constructed in 1976, the vessel underwent conversion at Keppel Shipyard before beginning its operations in April 2003. “Abo FPSO has now reached a commendable milestone, having completed two decades of service on the Abo field. This achievement underscores its enduring contribution to the oil and gas industry in Nigeria”, BW Offshore says in a statement.

ENI Awards Fellow Italian Company the SURF Contract in deepwater Côte d’Ivoire

Italian engineering firm Saipem, has been awarded a new contract for offshore activities in Côte d’Ivoire.

The company reported two contracts in Côte d’Ivoire and Italy for an overall amount of 850Million Euro.

It did not indicate the cost of either activity.

The contract in Côte d’Ivoire is for installation of Subsea Umbilicals, Risers and Flowlines (SURF)  for the development of the Baleine Phase 2 project, located in 1,200metre water depth offshore the West African country.

The SURF contract is the fourth in a string of contracts that the company would be handed by ENI, the Italian major and operator of the field development. “Saipem contributed to the drilling activities of Baleine Phase 1 by deploying the Saipem 10000 and Saipem 12000 vessels, followed up by the execution of two contracts for Baleine Phase 1 in fast-track mode”, the contractor testifies in a statement.

The scope of work encompasses the Engineering, Procurement, Construction and Installation (EPCI) of approximately 20 km of rigid lines, 10 km of flexible risers and jumpers and 15 kilometres of umbilicals connected to a dedicated floating unit. The installation works will be carried out by Saipem’s best-in-class offshore construction vessels and will take place in 2024.

“With this new award”, Saipem says it “brings a further strategic contribution to the history of the Baleine field and strengthens its presence in Côte d’Ivoire”.


Indorama Looks to Invest in Egypt

The Indonesian conglomerate Indorama has signed a memorandum of understanding with “Egypt Soyadi Fund” to study investment opportunities in a number of sectors in Egypt.

Indorama is widely known in Africa for its gas to fertilizer projects as well as chemical factories. It manufactures chemicals in Senegal, while its petrochemicals complex in Nigeria consumes over 100Million standard cubic feet of gas per day.

In Egypt, it plans to study investment opportunities in mining, industry, fertilizer, phosphate extraction, medical fiber, and a group of other industries, and agreed to study the company’s partnership opportunities.

“The Memorandum of Understanding contributes to deepening the relationship between Egypt and the with Indorama Global Company”, according to a government communique, “entering into an active partnership with one of the largest companies, and giving the fund the opportunity to benefit from the experience the company has gained, and contribute to the localization of the latest technologies in multiple sectors in Egypt”.

Together with its partners Indorama Ventures General Limited has distributed manufacturing activities in 169 locations in 39 countries with a production volume of more than 30 million tons annually and sales exceed $25Billion.

Nigerian Agip Sells its Onshore Operated Assets to Oando

Italian major ENI has announced the signing of an agreement with NSE & JSE listed  Oando PLC – for the sale of Nigerian Agip Oil Company Ltd (NAOC Ltd), the wholly ENI-owned subsidiary focusing on onshore oil & gas exploration and production in Nigeria, as well as power generation.

NAOC Ltd is present with interests in Nigeria across four onshore blocks (OML 60, 61, 62, 63), which it operates on behalf of NAOC JV (operator NAOC Ltd 20%, Oando 20%, NNPC E&P Limited 60%), in the Okpai 1 and 2 power plants (with a total nameplate capacity of 960MW), and in two onshore exploration leases (OPL 282 and OPL 135, respectively 90% and 48%) for which it also holds operatorship.

The assets’ gross output is around 30,000Barrels of Oil Per Day and 500Million standard cubic feet per day of gas. On an output basis, it is the least performing Joint Venture among the five JVs operated by oil majors in Nigeria.

NAOC Ltd’s participating interest in SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30%, TOTALEnergies 10%, NAOC 5%, NNPC 55%) is not included in the perimeter of the transaction and will be retained in ENI’s portfolio.

Following the transaction completion with Oando PLC, ENI will maintain its presence in Nigeria through Nigerian Agip Exploration (NAE) and Agip Energy and Natural Resources (AENR), reiterating the company’s commitment to its employees health and safety, as well as to the environment. ENI continues to operate in the country focusing on operated offshore activities. Participations in operated-by-others assets, both onshore and offshore, and Nigeria LNG will remain in ENI portfolio too.

The transaction is consistent with ENI2023-2026 Plan. The Upstream will supplement the core organically led growth with inorganic high-grading activity, adding resources with incremental value while divesting resources that can offer greater value and opportunities to new owners.

The closing of this transaction is subject to, inter alia, the authorization of all relevant local and regulatory authorities.

‘Bring Forth More Crude Oil, quickly’: Tinubu’s Energy SA in Separate One on One with Oil Producers

Olu Verheijen, SA to President Tinubu on Energy

Olu Verheijen, Special Adviser (SA) to the Nigerian President Bola Tinubu on Energy, has been engaging oil producing companies one-on-one on the theme of boosting the country’s crude oil output volume.

The meetings have been taking place at the Nigeria Upstream Petroleum Regulatory Commission (NUPRC)’s offices in Abuja. NUPRC calls them “tripartite engagements”.

Ms. Verheijen has met with officials from First E&P as well as officials from Waltersmith, at different times.  Her team has also consulted with NNPC at the operational level as well as had a direct interface with NUPRC officials regarding how basic regulatory practices impact work on the field. Engagements with other companies are to follow.

Nigeria’s crude oil output has struggled in the 1.1 to 1.3Million Million barrels per day range between January 1 and July 31, 2023, and in one particular month, April 2023, dropped below 1Million barrels per day on average. The engagements are being conducted on the premise that improvement in operating stewardship can free up some thousands of crude oil per day currently locked behind pipe, while the larger issues of crude oil theft, metering integrity, take-off of new host community regulations and the overall inclement investment climate, are being addressed.

“At the end of the engagements, solutions will emerge to tackle existing problems after engaging in a robust discussion”, says Gbenga Komolafe, NUPRC chief executive.

“Verheijen invokes the President’s goals and target on the volume of what we are expected to produce as a nation and speaks on the urgency of the moment to ascertain the possible short term, midterm and long-term goals on our production target and NUPRC’s contribution to this target”, according to a statement by the regulator.


Aradel – A Rebirth that Fuses the Past with the Future

By Akpelu Paul Kelechi in Lagos

Why would the Nigerian independent Niger Delta Exploration & Production (NDEP) change a name with such a direct connection with the heartland of hydrocarbon output in the country?

The answers to that question, which lingered in the minds of some of the over 2,000 participants at the recent, picturesque, name-change in Lagos, was provided by ‘Gbite Falade, the company’s CEO, when he narrated, in a typical African story telling fashion, the history and reasons behind the name Aradel.

“The name Aradel is not an existing word; it’s a creation of the stories that brought us to the point where we are today,” he began. The meaning behind Aradel can actually be interpreted from two verticals; all having a rich and dynamic synergy with the vision and aspirations of the company”.

The Founding Chairman, Godwin Aret Adams, a former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), and other respected professionals came together “to set up an indigenous publicly owned oil company on the premise that ordinary Nigerians should have the opportunity to invest in and benefit from the oil and gas sector”.

Aradel Holdings was incorporated on the 25th of March 1992 originally as the Midas Drilling Fund and Nigeria’s first integrated oil and gas investment company. It was changed to Niger Delta Exploration and Production Plc in November 1996 and assumed its current name, Aradel in May 2023.

The formal, public announcement of this new name was made on the 4th of August, 2023, in the form of a grand, coming out party, featuring a glitzy unveiling of the company’s new brand identity at the top convention centre in Lagos, Nigeria.

“One vertical of interpreting our name speaks to not just what we aspire to be in the future but also to where we’re coming from,” Falade continues. “ARADEL can be bifurcated into two and those two form essential pillars of where we have come from. The ARA in Aradel is pronounced, coined and created deliberately as a testament and recognition to the funding father who gathered everybody together some 31 years ago – Aret Adams.”

In his opening remarks, Aradel’s chairman, Ladi Jadesimi, described the company’s founding fathers as the “Eight Giants” under the distinguished leadership of late Aret Adams. They included Aret Adams himself, Edward Iyamu and Alex Okoli (both seasoned geoscientists), Sammy Olagbaju (investment banker and serial investor), David Richards (investment banker and accountant, who was the company’s Chief Finance Officer for about two decades) the and John Albert Jones (accountant and investor).  These six ‘giants’ have since passed on. The remaining two of the eight founders include Imo Itsueli and Layi Fatona (the founding Chief Executive), are, in Mr.  Jadesimi’s words, “very much still with us and they remain as vigorous and outstanding as ever”.

“The second part of “Ara-DEL” speaks to our unflinching pride in the place where we started our journey from in the Niger Delta,” Falade declared to the audience.

“So, each time we call Aradel, we are connecting the legacy of the pantheons led by Aret Adams to the place where we started from which is in the Delta region.”

Falade outlined a “second vertical from which we can look at Aradel is to ascribe each letter to the DNA of the company” as follows:

Accountability: “We are boldly putting forward our DNA of accountability,” Falade proclaims enthusiastically. We are accountable internally to our board and we are accountable to our shareholders. We are also accountable to the regulators and to our community.  To a large extent, we are accountable to all critical stakeholders that are involved in the way we run our business.”

Resilience: “In Aradel, the R stands for how we have resiliently weathered different storms, twist and turns operationally and otherwise to be where we are today; and, it’s a promise that when you look into our future, you will continue to see a resilient company. You will continue to see a company that continues to adapt, a company that continues to reinvent itself in the midst of changing situations. Whether it be about energy transition or about the macro economy, we will continue to the adaptable. We are a company that is keenly interested in bringing to the fore affordable energy solutions; we consider ourselves a critical part of the energy security solution for our country and it is the reason why we have decided consciously and deliberately, to domesticate the consumption of the resources that we own. It is the reason why we went into refining. It is about energy access to everybody starting from our immediate community. It is about the domestication of our hydrocarbon resources and deliberately stimulating imports substitution in such a way that it will contribute to a reduction in the pressure on our currency by having to spend less in importing products.

Diversity: The D stands for our diversity; as has been mentioned, we are represented in ownership by various persons from Kano, Cross River, Lagos, Bayelsa, Rivers and that’s who we are. Even in our workforce, we have enshrined and we continue to promote diversity across ethnic tribes, across genders and across races.

Excellence: Our E stands for excellence and this will continue to shape and drive the way we continue to run this business; our pledge and our commitment which is reflected in this name is that you can continue to expect a sustained standard of excellence, a sustained standard of innovation and creativity.

Leadership: Finally, our L stands for our deliberate intention to continue to play the leadership role that we have played up until now. You can be assured that we will continue to play that role in a more deliberate fashion going into the future.

PEPPERING HIS REMARKS WITH A SERIES OF QUOTES taken from personae in American contemporary history, Falade quoted Eleanor Roosevelt, the former first lady of the United States as saying, “the future belongs to those who believe in the beauty of their dreams” and from Abraham Lincoln: “the best way to predict the future is to create it.”

“Today is the future that was dreamt 31 years ago and today, we start another dream that will become a reality in 10 years, 20 years and 30 years to come. In Aradel, we are deliberately creating the future that will translate this company into an energy giant not just in this country but in Africa”, Falade declared.

“In Aradel, the future we see is not just us operating a marginal field that is today producing some 13,000 barrels of oil; we’re going to see a company that will be producing much more multiples of that in the near future. We are going to see a company that will go from its current gas production potential of about 70MMScf/d day to multiples of that and we are on a journey to achieving that within the near term.

“We started off by pioneering the modular refinery concept with the 1,000 barrel AGO train and we’ve moved on to expand that to an 11,000BPSD. In the future, starting within less than 12 months from now, we are going to come on stream as the first privately owned modular refinery that will be refining PMS and the reticulation of that into the domestic economy. But we are going to go beyond that, as far as we are concerned, we’re still scratching the surface. It’s at the proof of concept stage that we are at right now and so, please expect a refinery that is going to be significantly larger in capacity than what we currently have.

“What more should you expect in the future? Today, we self-generate the power that we use in our premises. We generate about 4.6 megawatts of power today and we’re growing our power generation base deliberately as part of our energy transition plan making use of gas and making use of renewables. And, our near term targets within the next five years is to grow that initially to over 50 megawatts and then to scale that up serving not just our needs but also serving captive offtakers  and even injecting it into the national grid.

“In the future and consistent with the trend that we have established over the last 17 years where we have consistently returned dividend payments to our shareholders, we pledge that we will continue to sustain that rich tradition to those who are current investors and to those who are yet to invest. You can expect a company that through thick and thin, will continue to deliver superior shareholders return in such a way that you will get value better than you would have gotten anywhere else.

“In terms of what we see in the future, our history have been dogged by direct operations from just one field but commencing from next year, we will start the journey across multiple field operations and we will move from marginal fields to directly operating mining leases that are bigger than what we are operating today; not just within Nigeria because we are on course of commencing exploration and production from mining leases even outside of the country. This is the future that we are creating and this is the future that we ask you to continue to watch out for and to expect to see.

“The dream of our founding fathers was that every Nigerian would have a stake in this business and by extension, in the ownership of our industry. Today we are traded on the NESD under the tracker NDEP; so what future are we asking you to watch out for? It is a future where our shares will be listed and traded not just on the Nigerian stock exchange but even on foreign burses and the ownership base of this company will stretch beyond racial boundaries to reflect the global giant that we are aspiring to be.

“Again, I will quote the words of Abraham Lincoln: “the best way to predict the future is to create it” and with Aradel, this is the future that we are creating and we thank you for being part of our past 31 years. We invite you to strengthen your resolve to be part of the next 31 years believing that it will be the best decision you would ever take”.











ENI Reaches First Oil in Côte d’Ivoire’s >1Billion Barrel Deepwater Field

Italian explorer ENI has commenced production of oil and gas from the Baleine Field, located in the waters offshore Côte d’Ivoire.

“This milestone comes less than two years after the discovery in September 2021 and less than a year and a half after the Final Investment Decision”, ENI says in a release. “This marks the first emissions-free – Scope 1 and 2 – production project in Africa”, the company claims.

For the initial phase, production takes place through the Baleine FPSO, a refurbished and upgraded Floating Production Storage and Offloading unit capable of handling up to 15,000 Barrels of Oil Per Day(BOPD)and around 25Million standard cubic feet of gas per day (MMscf/d)of  associated gas.

The start of Phase 2 is expected by the end of 2024 and will increase field production to 50,000BOPD  of oil and approximately 70MMscf/d of associated gas.

The third development phase aims to elevate field production up to 150,000BOPD of oil and 200MMscf/d of gas.

“The entire gas production from the Baleine Field in this development phase and the subsequent ones will be delivered onshore through a newly constructed pipeline. This will enable the country to meet its domestic electricity market demands, facilitate energy access, and strengthen its role as a regional energy hub for neighboring countries”, ENI says.

The project leverages the best available technologies to minimize emissions. Residual emissions are offset through initiatives developed within the country, including supplying and distributing improved stoves to local communities, eliminating the need for wood or coal for cooking. The stove distribution program, initiated in 2022, is expected to reach over one million people in the next 6 years. Simultaneously, Eni has launched studies for Nature-Based Solutions projects covering 380,000 hectares of protected forests.

“The first oil from Baleine is a milestone in ENI’s operations”, says Claudio Descalzi, the company’s CEO.

“Stemming from an extraordinary exploration success, we have achieved an industry-leading time-to-market of under two years from the declaration of commercial discovery. This outcome expresses the core principles of our strategy, encompassing Africa’s pioneering net-zero project, accelerated development, local gas supply, and the promotion of a just transition”.

The World Petroleum Congress (WPC) Returns to Calgary after 23 years

Tako Koning, Calgary

In the year 2000, the World Petroleum Congress (WPC) was held in Calgary, Canada’s energy capital city. Now 23 years later, the 24th WPC returns to Calgary with similar and different objectives. The theme of this year’s congress is “Energy Transition: The Pathway to Net Zero”.
Back in 2000, the WPC in Calgary was focused entirely on oil and gas. But this year’s WPC, which runs from September 17 – 21 has its focus beyond just oil and gas and is dealing with the energy transition, growing concerns about climate change, energy security and affordability. It is expected to draw more than 5,000 delegates from 100-plus countries along with 750 representatives of the local, national, and international media.
The list of keynote speakers includes the following:
• Amin Nasser, CEO Saudi Aramco
• Darren Woods, CEO, Exxon Mobil
• Josu Jon Imaz, CEO, Repsol
• Jonathan Wilkinson, Minister, Canada Natural Resources
• Haitham Al Ghanis, Secretary General, Organization of Petroleum Exporting Countries
• Abdulaziz Bin Salman Al Saud, Minister of Energy, Saudi Arabia
• Dai Houliang, Chairman, China National Petroleum Corporation
Speakers from Africa include:
• Gaspar Martins, CEO, Sonangol EP Angola
• Leparan ole Morintat, CEO & MD, National Oil Company of Kenya
• Malam Mele Kyari, Group CEO, Nigerian National Petroleum Corporation
• Anibor Kragha, Executive Secretary, African Refiners & Distributor Association
• Omar Farouk Ibrahim, Secretary General, African Petroleum Producers Organization
This year’s WPC Strategic Programme features high-level sessions led by government leaders, CEOs, and other industry leaders from around the world with discussions focused on the transformation of the industry and developing global and regional supply and demands. Meanwhile the Technical Program features over 200 expert speakers representing more than 100 organizations and 30 countries, providing a platform to explore market trends, investment opportunities, technological advancements and process integrations and optimizations to help business navigate the energy transition.
Al Ghanis, Secretary General of OPEC, is expected to expand on his presentation in mid-July 2023 to the G-20 energy ministers where he said that by 2045, global energy demand will increase by 23 percent. However, to meet this increasing appetite for energy, the industry must invest an estimated $12Trillion by 2045, even as there are increasing calls to end oil-project financing.
Canada’s Pathways Alliance is a group of major Canadian oil sands producers working to reach net-zero emissions. The group’s CEO, Kendall Dilling, who will be a speaker at the WPC, recently stated “We are at a massive crossroad. Clearly, the world is moving to a low carbon future and that is a massive shift for us as producers and for consumers and heavy industry. This is the challenge ahead of us for the next decade or decades. And it very much is a pivotal point in the industry”.
In early July, the World Petroleum Council which organizes the triennial congress official announced a name change. Founded in 1933, it will now be known as WPC Energy, which “reflects the organization’s commitment to lead the global transition to a low-carbon energy system” it said in a statement. The Calgary WPC won’t alter its name due to the short amount of time before the WPC is held in September.
The return of the World Petroleum Congress to Calgary is very appropriate since the head offices of all of Canada’s oil and gas companies are based in this city. Also, not to be taken lightly is that Canada is the 4th largest producer of oil in the world, after the USA, Saudi Arabia, and Russia. Canada is the world’s 6th largest producer of natural gas. Also, Canada is investing billions of dollars annually in the energy transition including wind, solar, and geothermal energy. Almost all the companies active in the energy transition are based in Calgary. Similarly, several Calgary-based companies are carrying out major investments in the development of helium, lithium, and hydrogen.
Sponsors of the 24th WPC include:
Aramco, Accenture, China National Petroleum Corporation, Quatar Energy, Saudi Arabia Ministry of Energy, Sinopec, Cenovus Energy, Pathways Alliance, Repsol, Suncor, bp, Bennet Jones, Canadian Association of Petroleum Producers, Chevron, Deloitte, Enbridge, ExxonMobil, Imperial Oil, Fluor, Petrobras, PWC Canada, S&P Commodities Insight, Sonangol EP, and WestJet. Government partners includes the Federal Government of Canada, the Government of Alberta, and the City of Calgary.

Tako Koning is a Calgary-based senior geologist and energy consultant. He is Holland-born and Alberta -raised. He graduated from the University of Alberta in 1971 with a B.Sc. in Geology and earned a B.A. in Economics in 1981 from the University of Calgary. His fifty years of work experience includes thirty years of living and working in Indonesia, Nigeria and Angola and the remainder in Canada. He was employed primarily by Texaco but also consulted for Tullow Oil and Gaffney, Cline & Associates. Koning has been an active member of the International Advisory Board of the Africa Oil + Gas Report since it was founded by Toyin Akinosho in 2001.

Ministers of State domiciled to Ministry of Petroleum Resources in absence of petroleum Minister

By Lukman Abolade

Nigerian President, Bola Ahmed Tinubu has domiciled the appointed oil and gas Ministers of State designate to the Federal Ministry of Petroleum Resources.

The President made the adjustments on Sunday evening among other cabinet reshuffle according to a statement by his Special Adviser on Media and Publicity, Ajuri Ngelale.

The initial appointments had included Heineken Lokpobiri as Minister of State for Petroleum Resources, and Ekperikpe Ekpo assigned as Minister of State for Gas Resources. However, the dynamics swiftly shifted. Senator Heineken Lokpobiri’s portfolio was realigned to Minister of State (Oil), Petroleum Resources, while Ekperipe Ekpo emerged as the new Minister of State (Gas), Petroleum Resources.

The fact that President Tinubu did not name a substantive Minister of Petroleum Resources on the list of ministers that were screened by the Senate, is a strong signal that he has decided he will assume the role of Minister of Petroleum Resources.

In Nigeria, Ministers of State are essentially assistant ministers who support the main Minister in their respective areas of responsibility. More often than not, they are usually ‘ceremonial ministers’ to balance political appointments.

The Nigerian oil and gas sector has failed to live up to expectations in the last 15 years. Its persistently poor performance has hobbled he Nigerian economy.

Despite being the second largest holder of crude oil reserves in Africa, the sector’s performance has been marred by a combination of systemic issues that demand a comprehensive strategy for resolution.

The country’s oil and gas infrastructure, including refineries, pipelines, and storage facilities, have suffered from neglect and underinvestment. This deficiency has resulted in inefficiencies, leakages, and disruptions in the supply chain, affecting both domestic consumption and export capabilities.

Inadequate policy execution has impeded the sector’s growth. Bureaucratic bottlenecks and administrative inefficiencies have created hurdles for businesses operating in the sector. Lengthy approval processes, cumbersome regulatory requirements, and slow decision-making have discouraged innovation and delayed project implementation, leading to missed opportunities for growth.




NNPC Should Focus on the Technical Job, Not Playing Games with Financial Engineering

Editorial Board of Africa Oil+Gas Report

NNPC’s widely distributed press release about a loan it secured from AFREXIM bank, ostensibly for the purpose of supporting the Naira, is taken from a playbook that has served it well in the last eight years. The basic contents of that playbook are for NNPC to position itself as the be all and end all of the solution to Nigeria’s enduring fiscal and economic challenges.

These two lines in the release simply play to the gallery for President Bola Tinubu: “The partnership with AFREXIM Bank is projected to play a crucial role in bolstering the nation’s financial stability”.

And: “This combined action signifies a crucial stride in ensuring the equilibrium of Nigeria’s currency, the Naira”.

The announcement came at a time of precipitous drop of the naira against the American dollar, which also coincided with the news that crude oil output had plunged Month-on Month by 13% from 1.25Million Barrels Per Day in June to 1.1Million Barrels of Oil Per Day(BOPD) in July 2023, according to data published by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

NNPC is not the finance ministry that should be assigning itself the mandate of supporting the naira.

NNPC should ordinarily be ashamed and concerned that the drop in crude oil output, which will help worsen the value of the naira, is largely of its own doing.

The state-owned company should be focusing single-mindedly on improving its technical efficiency so it can deliver more of the crude oil-locked behind pipes as a result of its suboptimal operational procedures- into terminals.

NNPC has over 55% equity in the largest producing oil and gas fields in Nigeria. While the general perception is that NNPC is mainly a joint venture partner in producing assets that it doesn’t operate, the reality is that NNPC has 100% in several producing assets, most of them underperforming because of the company’s poor technical delivery.

If we ignore NNPC’s JV equity in 57 blocks operated by Chevron, ENI (Agip), ExxonMobil, Shell,TOTAL, AITEO, Amni, Elcrest, FHN, First E&P, Seplat, Heirs, NDWestern, Shoreline, WAEP, and others, what about the low hanging fruits in NNPC’s own 100% held and operated assets?

Some examples: NNPC operates the Okono/Okpoho fields in Oil Mining Lease (OML) 119 offshore Niger Delta, free of any encumbrances of pipeline evacuation. The low output of ~10,000BOPD, at which the company has been stuck for over the last five years is not due to geology, but facility constraints. NNPC insiders know they can produce 30,000BOPD readily. But it won’t happen.

NNPC was gifted the OML 98 in 2019, after that asset was revoked from Pan Ocean Corporation, but it hasn’t been able to revamp the acreage and grow production from at most 4,000Barrels of Oil Per Day.

There was so much bluster from the NNPC Towers when the company took charge of what were Addax operated OMLs 123/124 and 126/137 in January 2023. NNPC has since superintended the fall in production from these assets. To go by data from the NUPRC, the Antan Terminal received 15,568BOPD in January 2023. As of July 2023, that volume had dwindled to 10, 650BOPD. The Okwori terminal, which took in 951BOPD in January 2023, received 248BOPD in July 2023. These are shallow water assets without any issue of pipeline attacks.

Out of the three 100% -held NNPC acreages for which the company has signed Finance and Technical Service Agreements (FTSA) with partners, only the development on the OML 13 agreement, signed with the Indian Independent SEEPCO, is close to first oil. NNPC could beat its chest about topping up the country’s crude export volume with around 30,000Barrels of Oil Per Day in the next few months with this project, but the company can do much better.

There are two other FTSAs, one of which is for an asset (OML11) with far larger producible fields than OML 13 has, but that development is struggling as we write.

ANY LISTED COMPANY IN THE WORLD, WHICH CONSTRUCTS a gas pipeline for 11 years without the certainty of completion will be punished by the market. NNPC has been looping the 439 kilometre Escravos-Lagos Pipeline System (ELPS) since 2012. It has been constructing the 127kilometre OBOBOB (OB3) since 2012. The costs of these grid length, transmission lines, would have ballooned from the original invoice in 2012 but they don’t show up in the section allotted to the Nigerian Gas Company in NNPC’s widely celebrated Annual Reports. And, what’s even more crucial; these are transportation facilities that were meant to improve the distribution of natural gas to power plants and industrial clusters in the country. It is for the lack of completion of OBOBOB that Seplat operated ANOH project has been held up for at least 12 months. It is for the limitation of the ELPS that Chevron is never sure whether it can pump more than 300Million standard cubic feet a day (300MMscf/d) even when it has the capacity to deliver more than 400MMsf/d.

NNPC has behaved like a chokehold on the Nigerian economy.

With this score card you have to wonder how the company’s top brass are able to stand and deliver keynote addresses with themes like Defining the Roadmap for the Future of Nigeria’s Upstream Sector, at conferences.

Without a solid set of achievements in getting crude oil and gas out of the subsurface by its own competence, the recourse is grandstanding, like the press release on the AFREXIM bank loan, and barefaced lies about what the company is doing with or without its partners.

Of course, they lie. Bala Wunti, the flamboyant, admittedly personable NNPC Ltd’s Chief Upstream Investment Officer, told a conference in Abuja in mid-July 2023 that he was looking forward to Final Investment Decision on ExxonMobil’s (deepwater) Owowo field and Chevron operated Agbami Gas project in the next two years. It was so untrue. The man lied in the presence of the world. Owowo is in Pre-Feed stage and is unlikely to take FID in that time frame. Neither is Agbami Gas. More explanation about why these projects are held up, is here.

In the face of the crash in crude oil output and steep drop in the Naira’s value, NNPC’s position ought to be, how can we find a way to add 300,000BOPD to production volumes within the next six months? That should be its valid concern, not financial engineering announcements.

This is a public service opinion/analysis by the Editorial Board of Africa Oil+Gas Report.

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