All posts tagged feature

Libya: With Fiscal Terms Amended, ENI Takes $8Billion FID on Structures A& E

By Muhammed Jetutu, in Cairo

After years of delay and drawn-out negotiations over fiscals, Italian major ENI has, with Libya’s National Oil Corporation, NOC, taken the Final Investment Decision to develop the Structures A&E, the country’s first major project since the early 20-noughties.

It involves development of two gas fields – the A and E structures – located in contractual area D, offshore Libya. First gas from the two clusters is targeted for 2026 and will reach a combined plateau production of 750Million cubic feet per day (750MMscf/d).

Structure A is located in the central part of Block NC41, approximately 75 kilometres from the Libyan coast in a water depth of between 93 and 145 metres. Structure E is sited in the central-eastern part of Block NC41, approximately 125 kilometres from the Libyan coast in a water depth of between 205 and 235 metres.

ENI has been in talks with NOC over the development for 15 years and, with political and security challenges in Libya in the last 12 years, the Italian firm’s enthusiasm had waned. The decision to finally go ahead was determined over meetings at which far reaching fiscal terms were negotiated and agreed between the two parties in August 2022.

Structure E platform will handle output from 23 wells — including five subsea wells — with 600 MMscf/d of gas and 30,000 Barrels Per Day (BPD) of liquids sent via two pipelines to a facility at Mellitah on the coast. Meanwhile, some 160 MMscf/d of gas plus 12,000BPD of liquids from the eight-well Structure A wellhead platform is due to be exported to ENI’ss existing Sabratha platform via a multiphase pipeline

The Fiscal Terms

NOC presents, in detail, the history of the meetings that took place between the representatives of the company and those of ENI. “In the first meeting on 24 August 2022 with ENI’s management, NOC called on ENI to implement the project. ENI had initially slowed down (the stages of implementation) due to political and security concerns. After several meetings, ENI accepted and asked for an agreement to be reached first to determine the costs”. Subsequently, “the company asked to change the cost recovery rate from 40 to 45 percent and a negotiating team was created (…)”. The parties “agreed to change the percentage (of cost recovery) from 40 to 38 percent, which decreases to 37 percent if the value of the project costs is within $7Billion and rises to 39 percent if it exceeds $8Billion.” Furthermore, as foreseen, the percentage is “30 per cent after ten years from the start of the implementation project”. The NOC reiterates that the percentages relate to the recovery of implementation costs and “not to the sharing ratio”. In addition, the NOC specifies that the “exploration expenses for offshore plants A and E, equal to $1.2Billion, were fully recovered before the project was implemented”.

THE FIELDS’ DEVELOPMENT will centre on two main platforms tied into the existing treatment facilities at the Mellitah Complex. The project also includes construction of a carbon capture and storage (CCS) facility at Mellitah, allowing a significant reduction of the overall carbon footprint, in line with Eni’s decarbonisation strategy.

NOC says that the project needed to be immediately implemented for a variety of reasons:  “Gas production in the Al Wafa and Al Salam fields will start declining in 2025 by more than 440Million cubic feet per day, which will lead to a shortfall in the supply of gas for domestic consumption and, if this loss is not compensated with investments and increasing production, the Libyan state will be forced to import gas to power gas-fired power plants”.

NOC points out that “an investment of $8Billion will once again bring Libya to the fore and will attract investors from the oil and gas sector, which will lead to the progress of the economy, creating many job opportunities and increasing levels of income”. Thirdly, NOC considers that “the return that the Libyan state will obtain from this investment is estimated at $13-18Billion, after recovering capital and operating expenses”. Finally, “the announcement of this project will encourage contracting companies engaged in the exploration of exploration blocks, onshore and offshore, to start their activities”.

This story is a slight update from the article that appeared in the December 2022 edition of Africa Oil+Gas Report


Ed Daniels, Shell’s Director of Strategy, to Step Down, as Unit is Discarded

Shell plc has announced the discontinuation of its Strategy, Sustainability and Corporate Relations (SSCR) Directorate in far reaching organization changes as Wael Sawan, the company’s new CEO, moves to stamp his authority.

Ed Daniels, Director of the SSCR, will step down from the Executive Committee effective July 1, 2023, and leave Group service thereafter. “Strategy will be brought together with New Business Development and, alongside Sustainability, will report direct to Sinead Gorman, Chief Financial Officer, enabling more streamlined planning and better capital allocation decisions”, Shell declares in a statement. ”Corporate Relations will report direct to Wael Sawan, Chief Executive Officer”.

The reorganization effectively reduces the size of the Executive Committee (EC) from nine to seven members “in a decisive move designed to simplify the organisation further and improve performance as we deliver our Powering Progress strategy”, the statement adds..

Under the changes, which are expected to take effect on July 1, 2023, Shell’s Integrated Gas and Upstream businesses will be combined to form a new Integrated Gas and Upstream Directorate led by current Upstream Director, Zoe Yujnovich. The Downstream business will be combined with Renewables & Energy Solutions to form a new Downstream and Renewables Directorate led by current Downstream Director, Huibert Vigeveno.

“I’m making these changes as part of Shell’s natural, and continuous, evolution”, says Wael Sawan, “Our core purpose is to provide energy to our customers, safely and profitably, while helping them, and us, to decarbonise. I believe that fewer interfaces mean greater co-operation, discipline and speed, enabling us to focus on strengthening performance across the businesses and generating strong returns for our investors”.

Africa Will Gain 11% Share of Global Gas Supply by 2050, a New Report Says

…It is the only region where gas production growth will more than double

A hefty sum of $9.7Trillion  is required for investment in upstream projects between now and 2050, if the rise in the world’s demand for energy is to be met in that time frame.

As population growth surges with 1.8Billion additional people, mostly in Asia and South Pacific, “energy demand is expected to rise by 22% by 2050”, according to the latest edition of the annual Global Gas Outlook 2050, launched on January 29, 2023 by the Gas Exporting Countries Forum (GECF).

Natural gas trade will expand by more than a third, led by LNG, which will overtake pipeline trade by 2026, the outlook notes.

“Global GDP will more than double, from $95Trillion today to $210Trillion in real term”, the 91 page report indicates. ”Natural gas’ share in the energy mix will go from 23% today to 26% in 2050”, while the supply of the product “will increase by 36%”, the report assures. The Middle East will contribute the largest growth share, accounting for one-third of the total, followed by Africa and North America. North America, the world’s largest gas producer, will maintain its position until the end of the outlook horizon. The region’s natural gas production is forecast to grow by 10Trillion cubic feet (Tcf) to reach 50Tcf by 2050. However, the region’s share will decline from 28% in 2021 to 26% in 2050.

Africa will be responsible for the second-largest volumetric growth, gaining more than 11% share of global gas supply by 2050, compared with slightly more than 6% in 2021. Africa is the only region where gas production growth will more than double, from 9.2Tcf in 2021 to 21Tcf in 2050.

Global natural gas production will continue to rise by an average of 1.1% per annum, from 142Tcf in 2021 to 193Tcf in 2050, representing a total of 36%.

GECF is an intergovernmental organisation established in May 2001, becoming a fully-fledged organisation in 2008, comprising eleven Members and eight Observer Members from four continents. Member Countries include Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela). Observer Members include Angola, Azerbaijan, Iraq, Malaysia, Mozambique, Norway, Peru and the United Arab Emirates.

Although the Global Gas Outlook 2050 was produced by a team constituted by GECF, the organization issues a strong disclaimer: “The data, forecasts, analysis, and/or any other information contained within this document and any attachments thereto are for information purposes only and are provided on a non-reliance basis and any obligation and responsibility is hereby disclaimed with respect to such content”. The GECF declares that t neither itself, “any of the GECF Members and Observer Countries, nor any of their officials, representatives, agents or employees, while fully reserving their rights with respect thereto, shall assume any liability or responsibility for the content of the Documents and any data, analysis, or any other information incorporated therein”.

Expro Wins a Contract for LNG Pre-treatment Facility for ENI in Congo

Expro Group, the New York listed Energy services provider, has won a long-term Production Solutions contract from the Italian explorer ENI for a liquified natural gas (LNG) pre-treatment facility in Congo.

“As initially discussed on the company’s third quarter earnings conference call on November 3, 2022, the 10-year contract is expected to generate more than $300Million of revenue for Expro”, the contractor noted in a press release.

Expro will design, construct, operate and maintain a fast-track onshore LNG pre-treatment facility under a 10-year contract on the ENI operated Marine XII development, located offshore Congo. The facility will be built near the Litchendjili gas plant – which supplies gas to the adjacent Centrale Electrique du Congo (CEC) Pointe-Noire power plant.

The pre-treatment facility will process approximately 80Million standard cubic feet of gas per day (80MMscf/d) and will be tied to one of ENI’s two offshore floating LNG (FLNG) projects, allowing incremental gas production for low carbon electricity generation and enabling the production of LNG to significantly increase from the West Africa area, thereby supporting both the local energy market and increased global demands for LNG.

ENI’s two FLNG projects under development on the Marine XII cluster of fields include (1) 0.6Million tons per annum (MMTPA) capacity project that will utilise the Tango FLNG vessel, with LNG production expected to begin in 2023.  (2) A 2.4 MMTPA FLNG facility under construction by Wison Heavy Industry. The two FLNG projects will deliver 3Million tons/year of LNG, (which is over 159Billion cubic feet/year) in 2025. The 2.4 MMTPA FLNG vessel, a 380 metre long and 60 metre wide unit, will be anchored at a water-depth of around 40 metres and will be able to store around 6.5Million cubic feet of LNG and 1.6Million cubic feet of LPGs. Preliminary activities have already started, with long lead items ordered and steel cut of cryogenic tanks occurred on December 20th, 2022.




Dwindling Number of Projects Can Undermine Local Content Boost

SIMBI KESIYE WABOTE has invested in a range of midstream hydrocarbon projects since he took charge as the Executive Secretary (ES) of the Nigerian Content Development Monitoring Board (NCDMB) in 2016. He has run with the idea of Nigerian Oil &Gas Parks (NOGAPS), and constructed a 10-year roadmap for nearly tripling the Nigerian local content input (from 26% to 70%). But even he admits that it is “so far, still far”.  In the first of a two-part interview for Africa Oil+Gas Report’s C-SUITE SERIES, he discusses the headwinds, the enablers, and the big wins of his six years in office. Excerpts:

AOGR: You took charge of the NCDMB in the sixth year of the passage of the Nigerian Content Act. Coming from a part of the industry that was perceived as the object of the act, what was the one thing on your mind that you thought had to be addressed in the first, say 30 days?

“Summit Oil will supply crude to Duport Refinery in Edo State…Shell will provide feedstock to Azikel Refinery in Bayelsa”

Simbi Wabote, ES NCDMB: At Shell, where I served for almost 26 years, I had the responsibility to manage local content locally and also eventually, internationally because local content at some point, became a global phenomenon. If you remember the Arab spring in North Africa, started by youths who wanted jobs created. They were protesting Globalization which, allegedly, provided a context in which their jobs were disappearing to China and sent to other Asian countries. Thousands of youths were being trained but there was nowhere for them to go and stuff like that. So Shell asked me , ‘hey we need you to design a global Local Content strategy for us because everywhere we operated, we faced the same problem. Be it in the US, be it in the Middle East, be in Europe, they were facing the same problem which was a reaction to the so-called globalization then.

Here in Nigeria, the population was growing geometrically and people are out of jobs. There are no opportunities for them. I have that passion to say what can we do to change the narrative? I am a patriotic citizen and as such, I should be able to drive it even if I was coming from the IOCs. For the first 30 days or a hundred days, what I needed to establish was (a) to assert myself for people to know that I believe in the course of local content development and (b) is to build the capacity of my staff in the sense that, when I was on the other side, I knew the way government institutions are perceived and looked at in terms of competencies and in terms of ability to match them. I had to make sure that their competencies were developed and I had to make sure that the industry knew that this is a Nigerian that is occupying this seat.

Given the kind of training we had in Shell which essentially is that you must stand for the truth, you must be objective and you must make the right decisions. I didn’t see how that could change me when I took on the position.

What drove the decision that by 2027, you could increase industry spend retained in the country from 26% in 2017, to 70% by 2027. As at today, that’s about five years ago. What needs to happen urgently for you to deliver on the targets fully considering the nature and challenges of the industry?

The first thing I did was ask where was Local Content at the time I took over in 2016, because the ACT was enacted in 2010 and as then, they had the operated for almost seven years before I came on board. I needed to ask myself how they Had fared in terms of the aspirations of the authors of the ACT itself? I bought in KPMG as a consultant to determine where we were in terms of implementation of the ACT. Then together we looked at the capacity in country and established where we were as at 2016 and I then said look, in 10 years’ time, I want us to get to 70% irrespective of where we find ourselves. It is an aspirational target on how we most drive things to get to that 70%. It’s very aspirational but I felt it is doable given the building blocks to attaining that 70%. We had to go through a gamut of workshops to say okay, if you want to attain 70%, what are the things you need to do to get there? We broke things down into five strategic pillars of the things we needed to do and then created some enablers that will enable it happen and of course. Now we have five years to go. But again, like you said, attaining that had a lot of conditions precedence. It wasn’t lost on us. We knew it and we lined up those conditions precedence and then created the enablers to support it.

Of course, one of the greatest factors to get there is the number of projects that we see through and within the system in terms of activities; we took a benchmark where the activities were, we looked at the portfolio of opportunities within a couple of years’ time and factored if those opportunities would be realized, then for sure, we’re going to get there.

We looked at the pitfalls, we looked at the risks associated with it and everything and then we created that roadmap to attaining that 70%. Like every roadmap, you will face challenges as you progress. We see those headwinds, we’re able to address them and we are able to use all the tools we have because part of it is that project must come through.

Out of that desire to attain our milestone targets, we had to work very hard with the minister of State for Petroleum Resources to ensure that the NLNG Train-7 project was sanctioned even in the midst of the COVID-19 because, those are things that will enable that 70% as it were. We looked at other projects in the funnel to say how do we bring them alive? You talk about the Ikike project, which of course saw First-Oil, you saw the active participation of Nigerians there. We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects. One of the factors we saw in trying to develop the strategy was the uncertainty in the industry which was instituted by the Petroleum Industry Bill that remained there and our aspiration and desire was to drive and work with all stakeholders to see that that bill became an ACT which of course was achieved. The expectation was that once you clear most of those uncertainties, projects will come. Yes, since it was passed, we can see some bit of inertia within the companies to start to move. But of course, we also faced with the challenge of COVID which hit us and then currently, of course, we are in the election season and most businesses would want to see that that is over before they invest. We still believe that we will attain the 70% because today in Africa and in the world, everybody looks up to Nigeria in terms of what we’ve been able to achieve and pull through in the Local Content arena. We keep pushing and driving that agenda.

One of the things that leap at us when we look at this your growth plan is: “Build effective internal structures in terms of people, skills, processes and systems to support the Board’s operations”. Seven years down the line, do you think you have nailed that down?

Today, the NCDMB is seen as the number one MDA by the Ease of Doing Business assessments. We came from almost 27 to become number one.

And this is as a result of the people. We’ve invested heavily in capacity building of our staff and I’m sure that if you have interaction with them, you will see that we have built their capacity. A lot of our staff feel proud putting on the NCDMB barge and we see that even when we serve in committees with other MDAs. We stand out as NCDMB.. The Ease of Doing Business (a unit in the Presidency) assesses the processes that you have established; how functional they are, how transparent they are. All those were put into a basket. So having attained the number one position, there is no other measure I want to use to test that equally because this was independently done within the office of the Vice President of the Federation; they gave us that rating as the number one agency in terms of ease of doing business and it’s about people processes and the institution itself. I could tell you with all certainty that I don’t know what else is there after number one and that’s what we have achieved.

You don’t want to say that’s number one in Nigeria but it could be a global thing?

What do you mean, comparing globally?

Yes; exactly.

NCDMB is sought after by most African countries that have discovered hydrocarbon. I was in Ghana to deliver the keynote address

“The Africa Energy Fund was an Idea of the NCDMB. We started that advocacy then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’.”

at their Local Content workshop. Every time, every day, you have most of the countries calm down to Nigeria to rob minds with us for us to take them on the path we went through to achieve this objective. It’s not a local accomplishment. Like you are aware, I think one of the local magazines or so also give an award to me as the African Local Content Icon. So it’s to tell you that it’s not a local achievement. Yeah.

One of your concerns, when you took charge, was the dwindling size and value of projects. You said, at the 2017 NOG conference, that domiciliation can only be robust when the (upstream) projects are there. Since then, investment has dwindled and the number of projects have reduced. Are you particularly worried?

Not particularly, but I am very concerned. There are so many factors that you could attribute to that and one of them I have addressed. A key headwind we are now facing again is the climate change issue, which is the raging argument against most of the hydrocarbon related projects. How do we respond to the narrative that highlights fossil fuel as the demon and which threaten to dry up funds that are coming to Africa especially now that every country on the continent is now an oil producing country. These international companies and funders would withdraw funds. What do we do? Let us create the African Energy Fund (AEF) and so we started that advocacy in NCDMB and then the idea was taken from us under permission by APPO, the African Oil Producers Association. They had to come to us and say, ‘let’s take this idea and let’s midwife it further’. I believe that if we don’t do that, there’ll come a time when those investments will no longer come. So we are advocating. When COP-26 happened in Glasgow, the entire fossil fuel was put on the table including gas as part of what will not be pursued. But today, thankfully, gas has been taken out of that and made also green energy as it were. That also helped by the regional conflict between Russia and Ukraine where people now saw the energy challenge because the oil and gas business is not something you can switch off and on.

To develop a field takes you almost four- five years and people have seen that Investments have declined with regards to looking for new finds and the rest of it and the world is heading towards an energy crisis. We keep pushing; we see those hand winds, but we try and say, from our own standpoint, what can we do as NCDMB to support that process?

The NCDMB under you has part funded several midstream projects. Our interpretation is that you want to industrialise the country NOW NOW NOW. It means that you are in a haste but critics may say: why not let this be organic, why are you kind of rushing this?

People who will talk about me rushing it are probably not in this business and they probably don’t understand it. There’s no rush associated with wanting to support the growth of the midstream. If there is anything at all, these are things we should have done like yesterday. As an example, you produced almost 2Million barrels of crude oil every day before but now we are struggling with 1Million barrels of oil which we don’t add any value to. You sell all your crude and you import refined products. I mean, how can you explain that? If you are not in a hurry, what else will you be? You look at your gas and you pride yourself that you have almost 206Trillion cubic feet of gas yet, there is no gas available to run your power plants in the country. And 60% of Nigerians perhaps, don’t have access to electricity. What else will spur you on to be in a hurry, is it when Armageddon comes that you will been a hurry? All we are trying to do is catch up because the world is moving on. Today, with an abundant of hydrocarbon beneath our feet, we are still struggling; the world is thinking of other forms of energy. When are we going to get there if we don’t quickly get to do what we have to do in order to bring Nigeria to where it’s supposed to be?

Some people look at what you’re doing and try to make comparison with other projects that are already in the pipeline or under construction. So they look at Nigeria Oil and Gas Parks (NOGAPS) initiative and they say, that looks like the Gas Master Plan that didn’t happen. Is it now going to happen just because NCDMB is driving it?  Yet some would say that NOGAPS is competing with the Ibigwe Industrial Park and the Utorogu Industrial Park. Why are you competing with all these private resources?

I think if I take it from this perspective, Nigeria is not an industrialized Nation. Manufacturing capacity is extremely low in the country and for us, we want to be seen as acting like a catalyst for the industrialization of this country. We’re not in the forefront. We don’t have enough resources to be in the forefront of it. But, let us do good examples that people can see and say it is doable. That’s where we come in. For instance, when we decided to work with Waltersmith to build a modular refinery, a 5,000 barrels per day modular finery, we wanted to catalyze it and we wanted to prove it that it is doable.  Today, the Waltersmith refinery in Ibigwe is running non-stop; they don’t even have a product storage in their tank because as they produce it is taken away. What we didn’t want to be as NCDMB is to talk about things without showing people that it is doable. That’s where we don’t want to be. We don’t want to keep talking about establishing manufacturing base and we are not showing people that it is doable. That’s why you see us in those Industrial Parks. Our industrial park is just a mini 25 hectares industrial park, but we want to show people that if you put your heart to it, it can be done. If you go to Odukpani today, we’re almost there to commission the industrial park, if you go to Yenagoa, as a matter of fact, in all the flooding that happened in Yenagoa, our Industrial Park was not flooded including our head office because it was taught of about properly and it was constructed properly. We do what we say. We don’t want to be the preacher who tells people to do something but turns around and says look, do what I say not as I do. Ours is to say do what we say and as we do. That’s what we are trying to proveWhen we started working with Waltersmith to start the modular Refinery, it wasn’t what was thought about but we did it and within a record time of 18 months. We got the refinery running. It’s one of those good examples that you can think of and we try to touch other areas; also in the gas business today, almost 70% of our partnership, our investments, are in the gas area. Be it storage facilities for LPG, be it SPC Distribution Network to ten northern states of the Federation. We have no capacity to muscle out anybody, but we have capacity to show people that it is doable.

The Board (NCDMB) recently reported it had secured the approval of its Governing Council for a partnership to produce 123,000 metric tonnes per annum LPG, which is about 10 percent of current demand nationwide, from the Utorogu Gas Plant, in Warri, Delta State. That would mean a partnership between that company on one hand and NPDC and ND-Western, joint operators of the Oil Mining Lease (OML) 34, where the Utorogu field is located. But the feelers from the industry is that this same company approached Seplat for the same thing and the deal broke down because they didn’t even show up to build anything, let alone receive the gas. After the Seplat challenge, which Seplat sources say, smacks of PGID, the sense we get from NPDC is the same sense of frustration with this same company. Are you sure of them?

Southfield Petroleum?


Southfield Petroleum is a company we are partnering with in order to produce LPG within the Utorogu field. Currently the company is in discussion with Utorogu gas plant, which is a joint venture between ND-Western and NPDC. First, before the project will go ahead, they will be sure that there is a gas availability and then that commitment has to be on the table because currently where we are at now is the feed development for the project itself; but before we will beat our chest that we have secured that project is to ensure that all the i’s are dotted and the t’s are crossed. It’s within the project development funnel and one thing we must understand about investments in general today is that, if you go and speak to Elon Musk and ask him about how many businesses did he invest in and he didn’t succeed, he will probably give you a catalog of what he tried and he didn’t succeed at but with the ones he succeeded at, he is where he is today. Talk to Bill Gates, talk to Zuckerberg, nobody can tell you that every Investments they’ve been into was a success and that’s the challenge we have in Africa.

The averse appetite for risk-taking is even in us as a people, let alone talking about investment. Take our sense of adventure: some adventures that you see the Caucasians engaging in, you just have to think and ask yourself: How many Africans will want to go and climb Kilimanjaro? How many Africans will want to enter the sea and swim with a shark or with a Whale? These are risks that people take in order to understand nature and these are serious risks. But send an African, particularly in Nigerian man, he will hardly want to take any risks as it were. So with Investments globally, you must continue to push the boundaries and some of them will succeed while some of them will not succeed. But if you want to wait for everything you get involved in to succeed, you’re not going to go anywhere as a person or as a country.

So that -Utorogu-is a good project and it is still work in progress. We’re still pushing and believing that it will come to fruition as quickly as possible.

The NCDMB has succeeded in helping to deliver one modular refinery that has been working now for the past two years. It has also invested in two others, but refineries that are not built on producing fields always have challenges of feedstock supply. What’s the guarantee that these refineries will not be sitting idle?

“We looked at the Bonga Southwest, we had thought it would come on stream, but somewhere along the line, it was thrown into the lawn grass again, and then we looked at so many other projects.”

One of the things we look at in our Investment Portfolio is particularly this risk you have identified because we know that there are some companies that invested in refineries that are not close to producing assets and they’re having some bit of challenges or the people involved are not holders of marginal fields or acreages; those risk are there. But when you look at refineries globally, some of the very big ones are not close to any field or assets. They still procure the crude and they refine and then they sell. Dangote refinery in Lagos is not close to any field. He didn’t own a field when he started the refinery, probably does now, but when he started the refinery project, he didn’t have an asset. He built it on the export mindset. If you go there and you see the intake and outlet, you will know that it is an export mindset. But most of the ones we got involved in are close to producing assets. For instance, the Duport Refinery in Edo State is just about 200 metres from Summit’s oil field and Summit is also a partner in the Duport Midstream. Azikel Refinery that we are involved in is just about 200 metres away from the Shell Gbaran-Ubie gas plant and it is a condensate Refinery and that gas plant produce a lot of condensates and there is an agreement between Shell and him for the supply of condensate. And so we look at all those risks and that’s why we didn’t get involved with a lot of modular refineries that came knocking because the first thing we asked them was where is your feedstock? Where is the agreement for you to get your feedstock? We know it’s always a challenge.

Duport refinery may be ready sir, but we know that Summit is not producing their field as we speak.

As at last week, Summit told me that they were ready because they have done some bit of simulation on their wells and the rest of it; so they too are also working. Yes, Dupont is ready, but they have to align themselves with Summit. Summit like you know, was producing before now. It was heavy on gas and condensate and that Refinery, the Dupont refinery, is a condensate refinery that was designed to receive condensate. I think they are addressing their issues; our inability to open up the refinery right now is predicated on two issues: one is to get DuPont really ready which of course they’ve been trying to do all this while and also to get Summit to also come on stream. I believe very soon they will resolve whatever the issues are and the refinery will start producing.

Let me ask you what you think about this. Do you think Shell will genuinely supply from Gbaran to Azikel knowing that the IOCs don’t typically deal with small projects: 1 or 2 thousand barrels wouldn’t excite Shell will it?

I believe that they will. Like I said earlier, I spent my whole adult life perhaps working for Shell and I know that if Shell commits to doing something, they definitely would do it. They don’t sign an off-take agreement if they don’t mean it because that’s how disciplined they are. I genuinely believe they would do it because I was part of that process; I serve on the board of Azikiel and we went through the process with Shell to sign the off take agreement. The challenge is now for Azikel to get ready and as a matter of fact, earlier this year had to ask me to say “hey, what’s happening with this agreement? We’re still waiting to trigger off that uptake”. They’re really keen and they also see it as a way of also supporting Bayelsa as a State and they also see it as an obligation to support such aspiration. The refinery is just an 11,000 barrels Refinery. So that won’t create any dent with regards to their products supply.



Chevron Names Mark A. Nelson Vice Chairman

Chevron Corporation has announced that Mark A. Nelson, executive vice president, Strategy, Policy & Development, has been named vice chairman and executive vice president, Strategy, Policy & Development, effective February 1, 2023.

In this new corporate officer role, Nelson will continue leading Chevron’s Strategy & Sustainability, Corporate Affairs, and Business Development functions, and take on additional corporate responsibilities.

“Throughout his career, and as a senior leader, Mark has made significant contributions to the company’s success,” said Michael K. Wirth, Chevron’s chairman and chief executive officer. “He has worked in every segment of our business, and his results-driven approach positions him well to help execute our strategy and represent Chevron more broadly.”

Nelson previously served as executive vice president of Downstream & Chemicals, vice president, Midstream, Strategy & Policy, and vice president of Corporate Strategic Planning.


Sagir Jajere is New MD, in Charge of Addax Operations

Sagir (Sajiru) Jajere, General Manager, PSC at the NNPC Ltd’s headquarters, has been seconded to Addax Petroleum, as the state hydrocarbon firm takes ownership of Addax’s Nigerian operations.

With Jajere at the head of the new management as Managing Director are Emmanuel Agwu and Ida Ekerelu, also seconded from NNPC. Ekerelu will act in CFO capacity, while Agwu will be Chief Operating Officer in the transition.

The threesome is effectively “the transition management team to manage oil production and develop the gas potentials of the acreages”.

NNPC’s take-over of Addax comes on the heels of a close-out and signing ceremony of an asset transfer, settlement and exit agreement (TSEA) with Addax, after a drawn-out dispute on Addax operated Oil Mining Leases (OMLs) 123/124, 126/137, that crystalized with a hurried, unilateral transfer of those assets by the defunct Department of Petroleum Resources, to two Nigerian owned companies in 2020.

“The protracted dispute has finally been laid to rest, paving the path for much-needed investment and growth on the oil blocks,” NNPC declared in a statement.

The Production Sharing Contract (PSC) for the blocks was initially signed in 1973 between the NNPC and Ashland but was terminated after 25 years. Subsequently, the NNPC signed another PSC with Addax in 1998 on the blocks which were operated through Addax Petroleum for another 24 years. However, the Addax PSCs were associated with significant intricacies and complexities and attendant disputes, the statement added.

“In 2021, issues around the revocation of the licences were reconsidered and   the upstream industry regulator, the NUPRC, advised that the asset be returned to the Concessionaires, NNPC Limited, to ensure clean and amicable exit for Addax…On January 25, 2022, the NNPC Limited commenced formal engagements with Addax and the Nigerian Upstream Petroleum Company (NUPRC), followed by series of meetings to ensure a swift closeout of the exit discussions and formalities.


Zimbabwe’s Mikuyu-1: Invictus Never Pronounced a Discovery

By Sully Manope, in Windhoek

Media reports about the conclusion of the Mikuyu-1 and Mikuyu-1 Sidetrack have played up the number of hydrocarbons shows encountered by these keenly watched wildcats.

But Invictus Energy, the Australian listed operator and 80% equity holder ofthe SG 4571 licence in Zimbabwe’s Cabora Bassa Basin, has never uttered the word “discovery” in any of its correspondences on the subject.

The company’s focus on identification of ”13 potential hydrocarbon bearing zones and combined 225metre gross potential hydrocarbon bearing zones identified in primary Upper Angwa target”, which have become  attention grabbing headlines, could, however create a “ReconAfrica Moment” for Invictus, as it can edge on investors to mentally mapping the “lead time” to first oil.

The company admits that “some gross intervals may contain significant proportions of non-net reservoir. Further log calibration will be obtained following completion of side wall core analysis”.

What is more, there were several challenges that Invictus faced in the process of drilling and they should have been farther up in the press releases than they are. A few:

  • Wireline log interpretation calculated porosity of up to 15% and gas saturation of up to 90% in selected potential pay zones in the Upper Angwa but are yet to be calibrated with fluid and core data and subsequently subject to wide margins of error.
  • Weak to strong hydrocarbon fluorescence was noted from approximately 2,100metre Measured Depth (mMD) in the Pebbly Arkose and was consistent to TD at 3,923mMD, with up to 100% fluorescence observed in some cuttings and side wall cores.
  • Further reservoir and potential pay intervals in the Upper Angwa intersected when the Mukuyu1 well was deepened from 3,618 to 3,923m could not be fully evaluated due to a breakdown in the borehole, preventing logging of the deepened section.

Invictus is still interpreting the well data with results to be integrated into the seismic interpretation and basin models to guide future well locations and exploration prospect selection. Of note is that planning has commenced for Mukuyu appraisal & Phase 2 drilling and evaluation.

The Company is now assessing the forward work programme and a range of targets for the first well in its Phase 2 drilling campaign, including Mukuyu-2 and Baobab-1, as well as other promising exploration prospects identified across the wider Cabora Bassa acreage. The timing of the forward exploration and drilling will be determined following the completion of long lead and well services tendering exercises which are commencing imminently.

NLNG Calls for EoI & Pre-qual for Supply Chain Management Services


This is not an invitation to tender. The full tendering procedure will be provided to applicants that are successful in the pre-qualification exercise…

Nigeria LNG Limited (NLNG) requires a vendor to provide Supply Chain Management Services (SCMS) to support maintenance and production activities in its Plants in Bonny, Rivers State, Nigeria.

The company hereby invites SCMS providers with all requisite experience, capacity and regulatory permits & licences to express their interest to participate in the tendering for this service.


The Supply Chain Management Services required will include but are not limited to the provision of:

  • Procurement Management services
  • Contract Administration and Management services
  • Inventory Control and Stock Management services
  • Material Management services including Material Handling, Packaging for Export, Heavy Goods Vehide/Forklift Services, Stock Check, Material Preservation & Quality Control
  • Vendor Management services


The expected date of commencement of the service is 1st February 2024 and the duration will be three (3) years with an option to extend at NLNG’s sole discretion.


A pre-qualification exercise of interested SCMS providers will be carried out and only successful applicants will be invited to provide a competitive tender for this service.

To be considered for pre-qualification, interested companies are required to submit the following documents for consideration:

  • Valid Certificate of Incorporation and Corporate Affairs Commission (CAC) Forms 2A & 7A (or its equivalent).
  • Tax Clearance Certificates for the past three (3) years i.e., 2019 – 2021 and Nigerian Tax Registration/ldentification Number.
  • Details of relevant verifiable experience of SCMS provision that has been undertaken as main contractor over the past five (5) years.
  • Valid Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)/DPR permit(s).
  • Valid Federal Ministry of Labour and Employment Recruiter’s licence
  • Acknowledgment of willingness to undergo NLNG and Third-Party audits.
  • Confirmation of willingness to operate in strict accordance with the NLNG Business Principles.
  • Any additional information that will enhance the potential of the company



NLNG is committed to the development of the Nigerian Oil and Gas business in accordance with the Nigerian Oil and Gas Industry Content Development Act 2010 (NOGICD Act).

Interested companies must comply with all the provisions of the NOGICD Act that relate to this service and in particular comply with the minimum Nigerian content percentage for ownership (i.e., 51% and above) and in relation to the scopes of service as provided in the Schedule to the NOGICD Act 2010.

Failure to fully comply with the NOGICD Act 2010 or demonstrate commitment to Nigerian content development policy of the Federal Government of Nigeria and NLNG shall result in outright disqualification from the tender process for this scope of services as described above.

As part of their submissions, companies signifying interest by responding to this advertisement shall submit acknowledgement of willingness to comply with the Nigerian Content Act.

General Nigerian Content Requirements

Companies responding to this advertisement are required to submit the following in compliance with the Nigerian Oil and Gas Industry Content Development Act, 2010:

  1. Documentation to demonstrate that the entity is a Nigerian-registered company. Submission of certified true copies of CAC Forms 2A & 7A (or its equivalent) including company Memorandum and Article of Association. All companies shall be Nigerian Indigenous Service Companies having 51% and above Nigerian equity in the shareholding and ownership structure of tenderer’s legally registered entity in Nigeria by CAMA (Companies and Allied Matters Act).
  2. Evidence of registration on the Nigerian Content Development Monitoring Board (NCDMB) NOGIC Joint Qualification System (JQS).
  3. Evidence of valid Nigerian Content Equipment Certificate (NCEC) in the relevant category.
  4. The process and procedure that explain the methodology of how it intends to comply with the requirements of the NOGICD Act 2010 (Nigerian Content Plan) and how to achieve the set target(s) in the schedule of the NOGICD Act and any targets set by the Board.
  5. Details of the company’s corporate organisations overall Human Resources structure (management, supervisors, senior and junior skilled officers, etc.), identifying positions manned/occupied by Nigerian nationals with evidence of type of employment in-country and identifying the positions manned/occupied by other nationals.
  6. Proposed organogram for this work scope populated with nationality, qualifications of personnel and years of experience of personnel on the job (attach CV of key finance, operational and technical personnel) including a succession plan in this work scope.
  7. A detailed description of the location of facilities and infrastructure (assets, equipment, technical office, and administrative space, storage, etc.) in Nigeria to support this contract, evidence that 50% of all equipment deployed to work by multinational and international companies are owned by the local subsidiaries.


Submissions in response to the above requirements shall be completed strictly in accordance with the instructions given in this publication, segregated and arranged in the order indicated.

Failure to submit any of the documents may result in the disqualification of the applicant.


The Expression of Interest document should be submitted:

In electronic copy in PDF format by e-mail to: with “CONFIDENTIAL Expression of Interest and pre-Qualification for Provision of Supply Chain Management Services (SCMS) for Nigeria LNG Limited” in the

subject line.

The submission must be received by NLNG no later than 16th February 2023. Please Note:

  • This is not an invitation to tender. The full tendering procedure will be provided to applicants that are successful in the pre-qualification exercise which will be carried out in accordance with NLNG’s relevant procedures.
  • Notwithstanding the submission of an Expression of Interest, NLNG is neither committed nor obliged to indude any company and/or its associated companies, agents or subcontractors on any bid list or award any form of contract to any company and/or its associated companies, agents or sub-contradors.
  • This advertisement for Expression of Interest and Pre-qualification shall not be construed as a commitment by NLNG, nor shall it entitle respondents to daim any indemnity from NLNG or its affiliates by virtue of having responded to this advertisement.
  • This Expression of Interest is a simple invitation for interested vendors to express interest in providing the indicated services and does not warrant any further feedback from NLNG hereafter.
  • If you do not hear from NLNG within 3 months of submission of this publication, it should be taken that your application was not successful.



Nigeria LNG Limited



South African Hydrocarbon:  So Much Possible, But So Much Stalling

By Toyin Akinosho

Barbara Creecy, South Africa’s Minister of Environment, Forestry and Fisheries, has had far greater impact on investment in hydrocarbon development in the country, than the Minister of Mines and Energy, in the last two years.

Ms. Creecy passionately does her job, which has meant hounding out several companies intent on monetizing hydrocarbon resources, in the country.

Conversely, Mr.Gwede Mantashe, the Minister of Mineral Resources and Energy and a far more senior member of the ruling party, is laid back, very laid back.

If it wasn’t for the fact that fossil fuels are derided today as harbingers of extreme weather conditions, I would have invoked the last two lines of the first stanza of W.B Yeats’ poem, The Second Coming, to contrast Ms. Creecy’s and Mr. Mantashe’s attitudes to their work.

The best lack all conviction, while the worst   

Are full of passionate intensity.

It is the wrong text to cite, I admit. But a large segment of the oil industry would nod to the sentiments expressed in those lines when they consider their proposed/ongoing work programmes in the continent’s most industrialised economy.

One of the most recent of the unrelenting assaults on hydrocarbon investments in South Africa was the denial of the appeal by Turkish owned Karpowership, to obtain environmental authorization to install a 1,200Megawatt gas to power facility off the South African coast, despite its winning a bid run by the Ministry of Energy. The decision came a full year after environmental authorisation for the project was initially denied in June 2021.

The story? Three subsidiaries of the Karpowership Group:  Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, won the bid for an emergency power supply aimed at procuring 2,000MW of power to bridge a looming electricity supply gap. They were to generate 1,220MW of power from imported Liquefied Natural Gas (LNG), in what was to be the first formal introduction of natural gas into the country’s electricity grid, through Eskom, the state utility.

In denying the project approval twice, Ms. Creecy said she had “the constitutional and legal obligation not to allow a preventable situation in an environment that may potentially harm the health or well-being, in a wide sense, of another person or persons. The need and desirability of a proposed project should also be considered in this context”.

These are valid arguments. But what does the Minister of Energy do?

He wrings his hands.

There have been several such disruptions by scores of environmental rights groups, fanned out across  the more than 3, 000 kilometre length of the South African coastline, from the desert border with Namibia on the Atlantic coast, to southwards around the tip of the continent and then back north to the border with Mozambique on the Indian Ocean. They are all screaming: “Not in My Backyard (NIBY)!” Their protests have forced a halt to a seismic data acquisition campaign by Shell on the Wild Coast (in the Eastern Cape); held up drilling by ENI in Kwazulu Natal and compelled Searcher Seismic, the Australian geophysics company, to give up on its proposed 10,000 multiclient 3D seismic survey, meant to cover the Outeniqua Basin and its sub-basins, including Bredasdorp, Infanta, Pletmos, Gamtoos and Algoa Basins.

The one case that many of us are closely watching is the progress of development of the Brulpadda and Liuperd fields, two giant gas and condensate tanks that TOTALEnergies recently discovered in deepwater Outeniqua basin. The company had submitted, in early September 2022, an application for production licences for a development plan that includes supply of the gas to the state owned, 200Million standard cubic feet per day (200MMsf/d), Gas to Liquids Plant (Refinery) in Mossel Bay on the Cape Town coast, as well as some 700MMscf/d of piped gas to other customers, located as far as Port Elizabeth in the Eastern Cape. This will represent some substantial flow of natural gas into the South African economy. But, as Ayanda Noah, chief executive of the state-owned Central Energy Fund (CEF) had long predicted, the approval process has come to be heavily subjected to virulent legal opposition from climate justice groups and nongovernmental organisations opposed to the development of the gas reserves.

Like Mr. Mantashe, Ms. Noah, a trained engineer whose office also oversees the functions of PetroSA, the state hydrocarbon company, comes across as helpless. “There is litigation just from all angles”, she told FN24, the country’s top online financial newspaper. And she said more: “PASA (the oil and gas upstream regulatory agency) has been trying to work actively to start engaging the public and just to simplify and help the public to understand better what we do”. Translation: “The Barbarians are going to invade! I really don’t know how we can hold our own!!”

What intrigues me is that even before the recent eruptions of NIBY protests against offshore exploration and production, the South African government, over the past 20 years, had sucked its thumb about the place of oil and gas in development. I’d stood and watched as several iterations of the Upstream Petroleum Resources Development Bill (Upstream Bill) had passed through parliament, observing endless debates without any traction; I have listened to several rounds of speeches by officials expressing concern about the looming shut down of the Mossel Bay refinery, as a result of depletion of gas reserves, and doing  nothing until it actually wound down; I’ve read statements after affirming statements about the Gas Utilisation Master Plan (GUMP) which never saw the light of day.

Then in 2016, the government came up with this idea of imported LNG for power generation. And I thought, well, may be. You know the outcome now.

Around the same time, I sensed I’d discovered what the problem had been. South Africans simply abhorred the idea of utilizing large volumes of imported natural gas. If there were discoveries of indigenous molecules, there would be less reticence, more vigour and robust activity around energizing the economy with this transition fuel.

But I am certain to be proven wrong again.

© 2021 Festac News Press Ltd..