Gas
IOCs ramp up investment in gas prouduction on back of power
LAGOS-With the recent increase in gas demand fuelled by reforms in the power sector, gas producing companies have seen opportunities for making more money as they are poised to increase their supply to the domestic market.
Shell Petroleum Development Company (SPDC) has already put in place a $6 billion gas utilsation project, and it has spent about $3 billion of this money, while another $3 billion would be spent on other projects to improve gas supply to the domestic market.
Shell said joint venture funding challenges had resulted in delays to some gas-gathering projects, adding that two of these projects, which were expected to gather an additional 35 percent of associated gas by 2014-15, were likely to be delayed.
Similarly, Total Upstream Nigeria has spent about $900 million on a gas pipeline that would supply gas to Alaoji power plant come January 2015. Its multi-billion dollar Amenam project which is due for commissioning in December is also geared towards pushing more gas to the domestic market and improving the value of gas.
Elisabeth Proust, managing director of the company, said in an interview with BusinessDay that through the various gas utilisation projects, the company would also achieve zero gas flare by January 2015 as the Ofon phase 11 project, which would tie all gas from other installations, would have been completed.
“We have one major installation where we are flaring gas, and this is Ofon, but this would stop by January 2015. The shutdown was planned for December but I want to be careful because even though we meant December, it could be extended to the second week of January 2015. Other installations are connected to the gas system and so, we would have zero gas flare,” said Proust.
Also Eni, the Italian oil giant and one of 15 oil operators participating in the Global Gas Flaring Reduction Partnership, the World Bank’s public-private partnership, has embarked on some gas utilisation programme that would help boost power generation. The over $1.5 billion which the company has already consolidated in some gas projects within its operations is meant for improving gas utilisation and reducing the volume of flared gas between 2010 and 2012.
Eni has achieved consistent reduction in gas flaring in Nigeria (down 11 percent), where the “Ogbainbiri Flow Station Upgrading” and “Idu Phase 2 Works Completion & Flaring Down” projects are ongoing.
In 2009, the government developed a Gas Master Plan aimed at promoting investment in gas through pipeline infrastructure and gas utilisation. The government recently created a tariff framework that will incentivise the utilisation of the gas being flared to generate electricity.
“We are trying to create a tariff framework that will incentivise the utilisation of the gas being flared to generate electricity,” Abba Ibrahim, commissioner, government and consumer affairs, Nigerian Electricity Regulatory Commission (NERC), told BusinessDay on the sidelines of a recent conference.
“We will encourage the building of new infrastructure by giving good tariffs that will incentivise the use of the flared gas. This will complement what the Department of Petroleum Resources (DPR) is doing. They put the penalty and we put the incentives. So it is a carrot-and-stick approach and that is why institutions like ours work collaboratively,” Ibrahim said.
With the recent privatisation of the power sector and ongoing reforms designed to encourage investment in power generation capacity from the existing 6,000 megawatts (MW) to 40,000 MW by 2020, demand for gas is expected to grow from 1.8 billion cubic feet per day (bcfd) in 2012 to 7.2 bcfd in 2025, equivalent to 11.3 percent increase per annum.
Nigeria has over 180 trillion cubic feet (Tcf) of discovered reserves and up to 600 Tcf of undiscovered gas reserves, but requires massive investment to unlock the value in the resource. The country is second to Russia in global gas flaring, according to the World Bank, as it currently flares about 1.5bcf daily.
BUSINESSDAY-
Announces ambitious expansion plans
Platform Petroleum says the company is targeting a billion-dollar investment as it announces an ambitious strategic plan to bring 3 marginal fields into production by 2025, with a target of 10,000 barrels of oil and at least 50 billion standard cubic feet of gas per day.
Speaking on the sidelines of the 2024 Offshore Technology Conference (OTC) in Houston, USA, Chief Dumo Lulu-Briggs, Chairman of Platform Petroleum said that the company has scheduled a roadshow in London this June 2024 to raise extra funding to finance their ambitious expansion plans.
“The upcoming roadshow aims to attract equity partners and prepare for future opportunities, targeting a billion-dollar investment. We are seeking partners ready to invest in Nigeria’s oil and gas potential.
Our goal is to showcase the country’s vast opportunities and its potential to international investors” Lulu-Briggs said.
Platform Petroleum’s roadshow in London will highlight the company’s efficient production, upgraded flow stations, increased capacity, and achievements in nearly zero emissions.
With about one percent gas flare currently, Platform aims for zero gas flares by the last quarter.
“Nigeria is a vast market, and Platform Petroleum is thinking big. With the government’s ambitious plans, such as the Lagos-Calabar coastal line, Platform is poised for growth; pushing itself to the next level, building on a strong foundation and following Seplat’s successful precedent”, Lulu-Briggs said.
Despite being a small company, he emphasized that Platform Petroleum has demonstrated significant success and efficiency, showcasing that smaller oil and gas entities can indeed achieve remarkable feats adding that he believes that the company deserves recognition and more assets.
“Platform Petroleum is ambitious, aspiring to become a tier-1 company akin to international oil companies (IOCs) or a tier-2 company like Seplat. Interestingly, Seplat originated from Maurel & Prom, Shebah Petroleum, and Platform Petroleum, and today stands as a major player in the industry.
This history underlines Platform’s potential for substantial growth”, Lulu-Briggs said.
Furthermore, the Platform Petroleum Chairman said that the Offshore Technology Conference (OTC) is a crucial event for promoting Nigeria’s significant market potential.
“Partnering with the Petroleum Technology Association of Nigeria (PETAN) at OTC is key to attracting investment. The current proactive government understands the necessity for economic growth, and Platform is prepared to leverage every opportunity in the oil and gas industry to contribute to this expansion”, he concluded.
Precious ADELOLA
The NNPC/Aiteo Joint venture has announced the introduction of Nembe Crude Oil Grade, a new crude oil grade into the international crude oil market.
The announcement of the Nembe Crude Oil Blend, produced by Aiteo, the Operator of the NNPC/Aiteo Oil Mining Lease (OML) 29 Joint Venture (JV), was made at the ongoing Argus European Crude Conference in London, on Tuesday.
OML 29, an asset located onshore Nigeria, is operated by Aiteo Eastern Exploration & Production Ltd, Africa’s leading indigenous hydrocarbon producer, following a historic acquisition from Shell in 2014.
NNPCL Boss, Engr. Mele Kyari
The Nembe Crude was previously blended with the popular Bonny Light grade and exported via the Bonny Oil & Gas Terminal.
The unique selling point of the Nembe Crude Oil grade with an API gravity was highlighted by both the Aiteo E & P and NNPC Limited Leadership at the Argus Conference in London.
The Nembe Crude Oil grade also has a low sulphur content and low carbon footprint due to flare gas elimination, fitting perfectly into the required spec of major buyers in Europe.
Two cargoes of 950,000 barrels each of the Nembe Crude Oil grade have since been exported to France and the Netherlands. With its attractive Assay of API 29 and low sulphur content, the Nembe Crude Oil grade commands a premium to the global Brent benchmark.
With the NNPC-Aiteo OML 29 JV back on-stream, Nigeria now boasts of an additional crude oil export of 2 Cargoes at 950,000 barrels each per month and 1.2 Bcf of export gas monthly.
This remarkable achievement signals the commencement of activities at Nigeria’s newest crude oil terminal, the Nembe Crude Oil Export Terminal (NCOET), which was licensed in line with the extant laws and Crude Oil Terminal establishment regulations.
The terminal was conceived as a Floating Storage and Offloading Vessel (FSO) with a storage capacity of two (2) Million Barrels and the ability to offload crude oil to any export tanker from AFRAMAX to Very Large Crude Carriers (VLCC).
It has a loading capacity of 25,000 barrels per hour and will be exporting over 3.6 million barrels of Crude oil monthly at full scale of operation.
Currently, hydrocarbon production from OML 29, which was hitherto constrained due to evacuation challenges owing to the security issues around the Nembe Creek Trunk Line (NCTL) corridor, has now been resolved through a collaborative and creative approach that led to the innovation of the Alternative Crude Oil Evacuation Solution.
The Argus European Crude Conference 2023 in London is a gathering of energy majors, refiners, NOCs, traders, financial institutions, and other representatives from across the global oil markets. The event also provides a critical opportunity for business leaders to connect, discuss, share and learn from one another.
Modupe Asudo
Major players in the oil and gas sector in Nigeria led by the Nigerian National Petroleum Company Limited (NNPCL) have covenanted to optimise operations by reducing contracting cycle to not more than 180 days.
A statement issued by the company disclosed that the Memorandum of Understanding (MoU) to this effect was endorced on Monday in Abuja at the company’s head office.
Other parties to the the contract include, the Nigerian Content Development and Monitoring Board, (NCDMB) and international oil companies.
Biztellers reports that an optimised contracting cycle was expected to improve the ease of doing business, reduce cost and drive efficiency, which would eventually translate to production growth, increased revenues, and ultimately improved profitability.
In addition, the MoU was expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate value for all stakeholders, including investors, companies, host communities and Nigeria.
Notable elements in the framework of the MoU, going by the statement, included a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively.
This was in contrast with the current best effort performance of 327, 333, and 185 working days respectively.
According to Group Chief Executive Officer, NNPCL, Mele Kyari, signing the agreement portends exciting times for Nigeria’s oil and gas industry, in addition to standing as a bold testimony that the company was plunging into the future of hope, productivity and success.
Kyari, represented at the occasion by Executive Vice President, Upstream, NNPCL, Oritsemeyiwa Eyesan, pointed out that with oil and gas as the bedrock of Nigeria’s economy, there was need to get the contracting process in the Industry right so as to get the economy back on track.
In his remarks, Executive Secretary, NCDMB, Simbi Wabote, described the MoU as a way forward and a critical step towards enhancing the nation’s crude oil production.
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