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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.

NNPC Claims to Champion Relief For The Naira With $3Billion Emergency Crude Repayment Loan from AFREXIM Bank

By Abdulwaheed Sofiullahi

The NNPC Ltd. says it has joined. says it has joined forces with the African Export-Import Bank to announce the successful securing of a crucial $3Billion crude oil repayment loan.

The commitment letter and Termsheet for this emergency loan were officially signed in a momentous event held Wednesday August 16, 2023 at the AFREXIM Bank’s headquarters in Cairo, Egypt.

“This strategic move marks a pivotal step towards offering immediate financial support to NNPC Ltd., thereby contributing to the larger efforts of the Federal Government to implement substantial fiscal and monetary policy reforms aimed at fostering stability within the exchange rate market,”, NNPC says.

“The injection of this substantial loan is anticipated to have a far-reaching impact on the economic landscape of Nigeria. As the NNPC Ltd. navigates these challenging times, the partnership with AFREXIM Bank is projected to play a crucial role in bolstering the nation’s financial stability”, the Nigerian state hydrocarbon firm explained.

“This combined action signifies a crucial stride in ensuring the equilibrium of Nigeria’s currency, the Naira. The swift disbursement of funds through this loan is expected to provide the necessary impetus for the government’s ongoing initiatives targeted at enhancing the stability of the exchange rate market”, NNPC declares in the statement.

“As the Nigerian economy stands at a critical juncture, the collaboration between NNPC Ltd. and AFREXIM Bank stands as a beacon of hope, potentially laying the groundwork for a more resilient and prosperous economic future. The signing ceremony, held on foreign soil, underscores the importance of international cooperation in addressing economic challenges and fostering growth”, NNPC affirms. “This development will undoubtedly be closely monitored by financial experts and citizens alike, as it holds the promise of contributing to the nation’s overall economic recovery and stability”, the statement concludes..


ENI Awards >$100Million Contract for FPU in Congo to Fellow Italian Company, Saipem

Italian major ENI has awarded a contract for the conversion of Scarabeo 5 semisubmersible drilling unit into a separation and boosting plant (Floating Production Unit – FPU) for a gas project in Congo Brazzaville.

The contract is worth more than $100Million.

The FPU is a semisubmersible production platform that receives the production fluids from wellheads riser platforms, separate the gas from liquids and boosts the gas in order to feed the nearby Floating LNG (FLNG) unit.

It is the second time in one week that Saipem is announcing the award of a contact of significant value to it by ENI, a company in which it holds significant ownership, for a project in Africa.

On August 9, 2023, Saipem announced a $1Billion contract for a Libyan gas utilisation project awarded to it by ENI. In that statement, Saipem admitted that the Libyan contract was a “related party transaction”, pursuant to Article 6 of the Consob Regulation on related party transactions, since ENI S.p.A. jointly controls both Saipem and Mellitah Oil & Gas B.V (the Joint Venture which owns the project).

ENI owns 30% of Saipem. Indeed, until 2016, it owned 42.5% of Saipem. This means that ENI is one major oil company operating in Africa which thrives on awarding key contracts to a service provider which is almost its own subsidiary.

The Congo contract, subsequent to an agreement signed early this year for the execution of preliminary engineering and procurement activities, entails the Engineering, Procurement, Construction, Transportation and Commissioning of the FPU, to be installed offshore the coast of the Republic of Congo, located northwest of the Djeno Terminal, in a depth of about 35 metres. The commissioning offshore works and the start-up of the FPU are scheduled by the fourth quarter of 2025.

This contract awarded to Saipem is part of Eni’s Congo LNG Project, the country’s first natural gas liquefaction project that is expected to reach an overall liquefied natural gas (LNG) production capacity of 3 million tons per year (approximately 4.5 billion cubic meters/year) from 2025.


TOTALEnergies plans flare-less tie-in to Egina, first oil expected in 2027

By Lukman Abolade

French major, TOTALEnergies is processing Field Development Plan (FDP) approvals for new fields to be connected to the Egina oil field.

Victor Bandele, the Deputy Managing Director, (Deep Water) of Deep Water Assets of TOTALEnergies EP Nigeria Limited disclosed this during the just concluded 2023 Nigeria Annual International Conference and Exhibition (NAICE) of the Society of Petroleum Engineers, Nigeria Council.

“We are bringing on a new field that would be tied in to Egina, it is three ways, field is going to get Final Investment Decision (FID) in 2024, and we plan to reach first oil in 2027. This will be connected to Egina, we have several fields that we’ll tie into Egina and because it is flare-less, it means all the fields that we are bringing later on will have no flaring,” he said.

The Egina field is located at water depths of between 1,400 and 1,700 metres, 200 kilometres offshore from Port Harcourt. It is operated by TOTALEnergies, which has a 24% stake, in partnership with NNPC, CNOOC, Sapetro and Petrobras.

Speaking on the role of Foreign Direct Investments (FDIs) in Africa’s energy transition during a panel discussion at the conference, Bandele said about 50% of Nigeria’s 208MillionTrillion Cubic Feet (Tcf) of gas reserves were associated gas. Associated gas are gas produced in the process of producing oil.

He ascribed it to the lack of enough infrastructure and fiscal environment to produce non-associated gas in Nigeria.

To foster the development of non-associated gas and attract investors on a larger scale, Bandele stressed the necessity of creating an appealing fiscal environment. He urged policymakers to adopt a stable and transparent legal framework, ensuring confidence among foreign investors that their ventures would thrive in Nigeria.

“We need to find infrastructure that is soothing for gas development, find environment that will suit people to bring money to develop gas as a single item. Gas needs to be developed, not only as a bye-product, we have to be desperate about producing the non-associated gas. There is no way we will develop energy today based on the same terms and conditions that we are using for associated gas,” he added.

The Deputy Director also emphasized the need for a fiscal environment that would attract investors to Nigeria for gas development on a large scale.

Tony Elumelu, the Chairman of Heirs Holdings who was also a member of the panel said government and regulators need a stable and transparent legal framework to attract investment to gas development.

Elumelu, who was represented by Sam Nwanze, the Executive Director and Finance Officer of Heirs Holdings said foreign investors must have confidence that their business would be allowed to thrive.

He also highlighted the potential for gas exports to drive economic growth, urging the government to provide investment incentives to attract foreign capital.

“I mentioned stable and transparent legal framework, stability in terms of people having the confidence that you do not have a lot of policy reversals, another thing is having an environment where investors can find certain elements to thrive.

“The other thing also is that a lot of foreign investors are interested in exports, the market is out there, the returns are wonderful and with all the things happening in Ukraine, however we have a need on-ground. The new government has come in and very encouraging things are being rolled out. It’s pointing us more and more to the importance of gas as a key resource to drive development. A lot of foreign investors may not necessarily look at things from that lens, so a lot of work that needs to happening in creating an environment for foreign investors to invest in the economy here are things like investment incentives,” he said.

Elohor Aiboni, the Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo) represented by Tunde Oduwole, the company’s Head of Gas Business Finance advocated for security, tax rate, ease of payment and ease of capital flow, adding that some of the most important factors, according to the FDI Confidence Index, were transparency and lack of corruption.

“It’s a small world, information is going around and another investor is factoring it into their decision,” he said.

ENI Revokes Force Majeure Status on Three Exploration Assets in Libya

Italian explorer ENI says it has formalised with its Libyan counterpart NOC the revocation of force majeure status on exploration areas A and B (onshore), and C (offshore), where the company is the operator with a 42.5% stake, along with BP, 42.5%, and the Libyan Investment Authority with 15%.

“Force Majeure, declared in 2014, was revoked following the completion by ENI of a Security Risk Assessment to assess the security conditions in the areas where the exploration programme will be carried out; this study yielded positive results”, ENI says in a release.

ENI, as operator of the blocks, will now be able to resume the contract activities in exploration basins, some of which are located close to Wafa’s gas facilities.

With an 80% share of national production (1.6Billion standard cubic feet per day (1.6 Bscf/d in 2022)), ENI is Libya’s leading gas producer and domestic market supplier.

ENI has operated in Libya for 64 years and currently has a large portfolio of assets under exploration, production and development.

Production activities are operated through the joint venture company Mellitah Oil and Gas BV (ENI 50%, NOC 50%). Equity production was 165,000 barrels of oil equivalent per day in 2022.


TOTAL Cites ‘Improvement in Nigerian Security Conditions’ in 2nd Quarter 2023

By Toyin Akinosho, Publisher

TOTALEnergies has attributed part of the increase in its hydrocarbon output, in the second quarter of 2023, to improvement of security conditions in Nigeria and Libya.

The French major recorded 2.741Million Barrels of Oil Equivalent Per Day (BOEPD) on average between April 1 and June 30, 2023. This is 2% higher than 1Q 2023 average output. TOTAL interprets 1% of that increase in hydrocarbon output to “improvement of security conditions in Nigeria and Libya”.

TOTAL also credits its 2% increased production to, in part, the commissioning of the 50,000Barrels Per Day Ikike field in southeast shallow offshore Nigeria.

TOTAL operates three shallow water acreages, a deepwater block and an onshore acreage in Nigeria in Nigeria; its shallow offshore and onshore production are exported through the Odudu Terminal on the edge of the Atlantic in south eastern Nigeria.

Receipts of crude and condensate at the Odudu Terminal increased slightly from 104, 682Barrels of crude and condensate per day (BPD) in 1Q 2023 to 105, 312BPD in 2Q 2023. That doesn’t say enough; a bulk of TOTALEnergies’ output in Nigeria is located in the 10% equity it holds in about 18 Shell operated onshore and shallow water blocks, a stake it has already put up for sale.

Libya has had a relatively peaceful 2023, with output of about 1.2Million barrels a day.


What Took So Long? Woodside Belatedly Postpones First Oil for Sangomar Field

The Senegalese government had banked on commissioning the country’s first commercial scale oilfield development by Christmas of 2023.

The operator, Australian based Woodside Energy, had repeated assurances of this timeline for the past three years.

Even when BP and Kosmos Energy announced the postponement of first cargo from the Greater Tortue Ahmeyim (GTA) liquefied natural gas project — which the country shares with Mauritania —  from 2023 to 2024, Woodside kept insisting that the first development phase of the Sangomar oilfield development was on course.

Now the company is saying that first oil is now delayed to as late as mid-2024, with project costs for the development going up by as high as 13%.

Woodside, on July 18, 2023 said it had carried out a cost and schedule review of the Sangomar field development’s first phase “following the identification of remedial work required on the floating production storage and offloading facility”, which highlighted higher project costs.

This remedial work, which the company did not anticipate, is responsible for pushing the timeline father down some three to five months away. Meg O’Neill, Woodside’s chief executive officer (CEO), said the project team’s highest priority remains “the safe completion of all activities.”

The company, she said, has “taken the prudent decision to have the remedial work conducted while the FPSO remains at the shipyard in Singapore.”

The total project cost has now moved up by around 7% to 13%, to between $4.9Billion and $5.2Billion, an increase from the $4.6Billion that was previously estimated.

The FPSO was delivered to Keppel Offshore & Marine in Singapore in November 2022.

Once the FPSO associated problems are resolved, Ms. O’Neil assures, “the project can achieve production start-up in line with the adjusted schedule, and ramp-up operations as planned”.

Jubilee SE: Two New Wells Gush Over 20,000BOPD; Push Field Output Above 100KBD

By Abdulwaheed Sofiullahi

The first two of four wells in the Jubilee field to be brought onstream in 2023 came online in May and July 2023 at initial rates of over 20,000Barrels of Oil Per Day (BOPD), way above expectations.

The probes are in the Jubilee South East (JSE) comportment of the Jubilee field, which has been producing since December 2010.

The first well in the JSE project was hooked up in May 2023, delivering around 17,000BOPD.

Tullow is expecting to finalise two more JSE producers as well as one water injector well. The company says it is “confident in the production ramp-up we have outlined”.

Tullow and its Partners plan to maintain this increased level of production of over 100,000BOPD at Jubilee “over the next few years through an ongoing infill drilling programme”, Tullow says in a release.

“Future drilling locations have been identified to further extend this plateau and realise the full potential of the significant Jubilee resource base”, the company explains

Production efficiency on the Jubilee FPSO has been high, averaging 97% uptime in the first half of 2023, Tullow reports.

Jubilee field average daily output for 2022 was 83,626BOPD, according to the annual report of Ghana’s Public Interest Accountability Committee (PIAC).


Petrofac Wins the Management Contract for Espoir FPSO in Cote D’Ivoire

Petrofac, the UK headquartered energy industry service provider, has been awarded a facilities management contract by CNR International offshore Cote D’Ivoire, West Africa.

“The initial three-year, multi-million-dollar contract will see Petrofac’s Asset Solutions business providing integrated services for the Espoir Ivoirien Floating Production Storage and Offloading (FPSO) vessel”, the company says in a release.

“Around 110 personnel currently supporting the FPSO, including those onshore and on the vessel, will transition to Petrofac from BW Offshore following the recent sale of the vessel to CNRI. The transition of people and operatorship is expected to complete before the end of July 2023”.

Petrofac says the contract builds upon its existing strong relationship with CNRI in the UK Continental Shelf (UKCS), which has centred around the provision of operations and maintenance services.

“The contract will be managed from Petrofac’s technical hub in Aberdeen, using decades of experience in the mature and highly regulated UKCS market”.


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