Russian oil firms lock horns over lucrative OML29

OML 29, which holds the site of Nigeria’s first discovery, Oloibiri field in addition to Nembe Creek field, Santa Barbara and Odeama Creek fields, all producing is now at the center of tussle between two Russian firms; Lukoil and L1 Energy.

Lukoil is Russia’s second largest oil company. The company was formed in 1991 when three state-run, western Siberian companies merged. That meant vertically integrating the three branches of the industry – exploration, refining, and distribution – that were strictly separate under the old Soviet system

Headquartered in Moscow, Lukoil is the second largest public company (next to ExxonMobil) in terms of proven oil and gas reserves. The company has operations in more than 40 countries around the world. During the Obasanjo administration, Lukoil indicated interest in leading a consortium of international and indigenous investors to acquire and turn around the 210,000 bpd capacity Port Harcourt refinery that was then slated for privatisation but the deal fell flat due to public outcry. Recently, Lukoil outbid Rosneft and Gazpromneft-Noyabrskneftegaz at auction for Siberian oilfields with a $1.66 billion.

Schlumberger unveils new microseismic acquisition system

Schlumberger announced Tuesday the introduction of the MS Recon high-fidelity microseismic surface acquisition system.

The new microseismic system for surface and shallow grid microseismic surveys provides improved imaging of the hydraulic fracture geometry by optimizing the microseismic signal quality.

“The new microseismic surface acquisition system addresses the challenges of detecting small microseismic signals emitted during hydraulic fracturing at the surface and near-surface locations,” said Joseph Elkhoury, vice president and general manager, Microseismic Services, Schlumberger, in a statement.

“The MS Recon system improves signal-to-noise ratio during acquisition enabling the detection of many more microseismic events than conventional systems. This provides our customers with a better understanding of their stimulation operations, allowing them to optimize completion design and potentially increase production.”

Insurgency, non-Passage of PIB leads to rise in cost of oil and gas projects

Heightened insecurity in Nigeria, due to the Boko Haram increased attacks, has triggered an unprecedented rise in the costs of execution of oil and gas projects, THISDAY investigations have revealed.
Oil industry sources hinted yesterday that the spate of violence in Nigeria, particularly in the northern region, plus the renewed attacks on oil facilities and abduction of expatriates who work for oil companies located in the Niger Delta area, have pushed up costs of doing business in Nigeria’s oil and gas industry by about 100 per cent in the last two years, as Nigeria is now regarded a “high risk area”.
Investigations further revealed that most foreign and local firms that signed contracts with firms in Nigeria for the execution of various projects in the oil industry are seeking the renegotiation of contract sums on the grounds that the environment is highly insecure for business.
It was also reliably gathered that some projects have been abandoned, while the execution of others have been stalled because contractors handling such projects are reluctant to continue with the jobs for fear of attacks.
An industry expert confirmed that most contracting firms now turn down oil and gas jobs, while foreign experts develop cold feet once they are assigned jobs in Nigeria owing to security concerns. He said the execution of drilling contracts had suffered major setbacks due to disagreements that arise in contracts renegotiation.

My thoughts on ‘fraud’ allegations in CBN, NNPC – Atedo Peterside

Chairman of the Stanbic IBTC, Atedo N A Peterside is the first bank chairman to speak publicly on the suspension of Central Bank Governor, Mallam Sanusi Lamido Sanusi. In a statement made available to MARCEL MBAMALU, he called for urgent forensic audit of the accounts of the Nigeria National Petroleum Corporation (NNPC) as well as satisfactory answers on the Financial Reporting Council’s (FRC) queries regarding the apex bank’s 2012 accounts:

“I don’t know if anything is true or false. What I do know is that in a Presidential system, various aides and pressure groups try and pull the President towards the direction that they believe is best. Is that not why they even have lobbyists in Washington DC?

One does not have to jump on the rooftops and sound populist every time in order to be branded “patriotic”. Some times the true patriots are those who apply pressure where it matters most – and some times on some issues, that might be in private.

The facts of the matter are clear and are all now in the public domain and I list some of them sequentially:-

JTF arrests 8 suspected oil thieves in Rivers, Bayelsa, Delta and Edo

Joint Task Force (JTF) in the Niger Delta, Operation Pulo Shield, on Sunday said that it arrested eight suspected oil thieves and destroyed 17 illegal refineries in multiple raids.

A statement issued by Col. Onyema Nwachukwu, Media Coordination of JTF in Yenagoa, said the anti-oil theft raids were conducted from Feb. 11 to Feb. 18.

Nwachukwu said that several items were seized during the operation in Rivers, Bayelsa, Delta and Edo.

He said that the JTF troops in Edo and Delta destroyed five illegal oil distillation sites and 40 boats and seized 300 metal tanks, 64 plastic storage tanks, 72 drums and 68 cooking ovens.

He added that four pumping machines and one Lister Generator were seized at Warri South-West Local Government Area, Delta.

The spokesman said the troops also intercepted a locally made tug boat conveying 30 drums of stolen petroleum at Ajide on Benin River in Edo.

He said that six suspects were arrested during the operation and moved to the Tactical Headquarters of the Battalions for preliminary investigation.

Marketers await arrival of fuel cargoes next week to end scarcity

Some independent marketers of Premium Motor Spirit (PMS), otherwise called petrol, are selling the products above the official pump price and ex-depot price as queues in filling stations across the country worsen, THISDAY has gathered.

However, the Major Oil Marketers Association of Nigeria (MOMAN) is certain that normalcy will return to oil distribution by the time the first set of fuel cargoes land in the country next weekend.
The worsening scarcity of petrol, it was learnt, followed the initial delay of the release of fuel import allocation to the Nigerian National Petroleum Corporation (NNPC) and the Oil Marketing and Trading (OM & T) companies by the Ministry of Petroleum Resources, through the Petroleum Products Pricing Regulatory Agency (PPPRA).

Shell shuts Nigeria’s Nembe Creek Trunk oil pipeline due to theft

Royal Dutch Shell said on Wednesday that it had closed Nigeria’s Nembe Creek Trunk oil pipeline on Saturday to stop leakage caused by theft.

The pipeline pumps the Bonny Light grade of crude oil. Bonny Light exports for April are at about 95,000 barrels per day according to shipping lists compared to 155,000 for March.

Absence of EFCC witnesses stalls Alao, others’ trial

The trial of an oil marketer, Abdullahi Alao and four others, charged with N1.1 billion fuel subsidy fraud, was stalled yesterday in Lagos following the absence of prosecution witnesses at an Ikeja High Court.

Abdullahi, son of a prominent businessman, Alhaji Abdullazeez Arisekola-Alao, is being prosecuted by the Economic and Financial Crimes Commission (EFCC).

He was charged alongside two other oil marketers — Olarenwaju Olalusi and Opeyemi Ajuyah, and their companies –Majope Investment Ltd and Axenergy Ltd.
The accused are facing an eight-count charge bordering on conspiracy, obtaining money under false pretences, forgery, uttering and use of false documents.

During yesterday’s proceedings, all the accused and their counsel were in court when the case came up for hearing.
Counsel to the EFCC, Mr. Rotimi Oyedepo, however, informed the court that the witnesses were not in court for the trial to commence.

Oyedepo, who apologised for their absence, asked for a short adjournment to enable the prosecution to produce the witnesses in court to give evidence.
Justice Lateefat Okunnu acceded to Oyedepo’s request and adjourned the case to March 19 for continuation of trial.

Importers move to Ghana, Benin ports as slow processes in Nigeria hurt business

Nigeria stands to lose volumes in maritime-related business and the revenues and jobs that come with it as activity is shifting from the country’s seaports to those of neighbouring Ghana, Togo, Benin and Cameroon on account of long delays in cargo clearance.

Average clearing time for containerised cargo in Nigeria is between 14 and 21 days (two to three weeks), while in Ghana, importers spend two days for the same purpose. Similarly, in Cotonou (Benin) and Togo, importers spend an average of seven days to take delivery of their goods.

Analysts say that slow cargo clearing processes, which result in high demurrage and storage charges, also lead to loss of business to nearby ports where the processes are faster and therefore more cost-effective.

Trader backs NNPC on SWAP deals

Executive Director, Sahara Energy, Wale Ajibade has backed the Nigerian National Petroleum Corporation (NNPC) conduct of the oil SWAP arrangement, saying the deals conformed to international standard.

Ajibade who addressed the House Committee Upstream currently investigating the alleged connivance of NNPC with Swiss Oil Traders to defraud the government, noted that the deals were transparent and complied with all audit requirements.

Ajibade who represented Trafigura Trading Oil Company based in Switzerland explained that there was nothing untoward between his company’s SWAP arrangements with NNPC/PPMC.

According to him “NNPC in its records noted that Nigerian traders collectively account for 98.2million barrels on 2013. The other international traders, including the Swiss Trading Companies lifted 61.2 million barrels while offshore and the Nigerian refineries took 36.2 and 38.3 million barrels respectively.  The NNPC trading companies account for 83.5 million barrels”.

He said in view of the above, there was no remote possibility that NNPC would lose $6.8 billion from sales below market value to “the companies described by the petitioners as Swiss Trading Companies”.

“The SWAP arrangement referred to by the Bern Declaration was in line with the known practices in the oil industry. The NNPC had to dispose unrefined portion of its 445,000 barrels to meet domestic needs of petroleum products.

“It is to be noted that the NNPC delivers the international market value of the crude oil to the federation on the basis of the general sales agreement and conditions.  There is therefore no value loss to the federation. The claims by the Bernes Declaration are baseless and without material substance and should be set aside in its entirety”, he added.