Gas
Chevron’s $6.4 billion China gas project pushed back again
BEIJING – A $6.4 billion gas project being built by Chevron CVN.X in China is facing further delays due to disagreements with partner PetroChina (0857.HK) over how to develop the technically tricky fields, three industry sources said.
The Chuandongbei project, the U.S. firm’s largest investment in China, is now not expected to deliver first gas until the second half of 2014, nearly 7 years after the firms clinched a 30-year deal to produce 7.6 billion cubic meters of gas a year.
The latest setback follows a series of delays for Chuandongbei, which Chevron has described as one of its larger capital projects for 2013. PetroChina initially expected first gas to be delivered in 2010, while its parent CNPC forecast just four months ago that production would start by end-2013.
China, the world’s top energy user, but the fourth-largest consumer of gas, is racing to unlock supplies of the cleaner-burning fuel by boosting imports and domestic exploration.
“There are some discrepancies over how to develop the fields between PetroChina and Chevron,” said a Beijing-based industry official with knowledge of the project, a 2,000 square-kilometer block in Sichuan basin in southwest China.
Chevron is the operator of the project and holds a 49 percent stake. PetroChina holds the rest.
The Chinese government had now suspended its approval for the development plan for the second stage of the three-stage Chuandongbei project, to encourage the companies to focus on delivering the first phase, the sources said.
Chuandongbei is a sour gas development. The natural gas contains a high level of hydrogen sulphide.
“The complexity of the project, being a high-pressure, high sulphur development that means higher operational risk and higher standards for technical processes, also contributed to the delays,” said a second industry official.
As the only international oil firm developing high-sulphur gas in China, Chevron has imposed stringent safety standards, sources said, especially after a deadly disaster in 2003 in the same region that forced the then-head of CNPC to quit.
A blowout in 2003 at a gas well in Chongqing municipality owned by CNPC turned 25 sq km (10 sq miles) of farmland into a lethal zone, killing 243 people and poisoning thousands as they slept or scrambled to escape a toxic cloud of hydrogen sulphide.
However, a similar sour gas development in the same geological area, the $10 billion Puguang project developed by PetroChina’s domestic rival Sinopec Corp (0386.HK), took 32 months from start of construction to first gas in 2010. It has a designed annual capacity of 12 bcm.
“Sinopec being the sole owner of the project had a much stronger sense of execution,” said a third industry official involved in the Puguang development. “It had top attention from Sinopec management, which pooled the best design and construction teams to build it.”
PetroChina declined comment on the project start-up date.
Chevron said the company has not yet announced a first-gas date. Chevron “continues to advance the construction of the first natural gas processing plant and development of the Luojiazhai and Gunziping natural gas fields for the Chuandongbei project,” a spokesman said by email.
The plant and the two fields make up the first stage of the project. Chevron said on its website in April that it expected the plant, which is designed for maximum production of about 2.7 bcm a year to be “mechanically complete” by end-2013.
The full development will include two sour gas processing plants and five natural gas fields with gathering systems and tie-ins to the plants. An exploration well is planned for the third quarter of 2013, Chevron said on its website.
The project, in the northeastern part of Sichuan province, has proven reserves of 176 billion cubic meters, the two companies have said.
Chevron is an experienced sour gas developer, and has partnered with PetroChina to develop gas in Australia. It won the deal in December 2007, beating rival bidders Royal Dutch Shell (RDSa.L) and Total (TOTF.PA), partly because it pledged swifter development, sources said.
By last February, Chuandongbei had cost 12.6 billion yuan ($2.1 billion), local media reported. The project is Chevron’s largest upstream investment in China, where it also has a much smaller offshore portfolio.
– REUTERS
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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