Gas
NDDC, NLNG brawl: We are solidly behind NLNG-KACHIKWU
Yemie ADEOYE
Nigeria’s oil minister Dr Ibe Kachikwu during a world press conference on the sidelines of the just concluded Offshore Technology Conference in Houston
HOUSTON TEXAS, USA-NIGERIA’s Minister of state, Petroleum Resources and Chairman NLNG Board, Dr. Ibe Emmannuel Kachikwu has affirmed that the federal government is solidly behind the Nigeria Liquefied Natural Gas Company, NLNG, over the ongoing controversy with the Niger Delta Development Commission, NDDC at the National Assembly.
Dr. Kachikwu stated that the laws establishing the NLNG must be respected by all if foreign investment into Nigeria is something that we all desire. according to him there is no basis for reviewing the NLNG Act to accommodate a 3 percent budgetary tax to NDDC as this could translate to double taxation.
The minister gave made this assertion while responding to questions from Biztellers.com.ng during the world press conference on the sidelines of the just concluded Offshore Technology Conference in Houston Texas, USA.
According to the Minister, NLNG is the poster child for a well run and profitable business venture with governments involvement and this is the best example Nigeria have to show, hence any attempt to tamper with the Act in order to fulfill the yearnings of the Niger Delta Development Commission, NDDC is a recipe for disaster as the international community is watching and that may form a large part of the discussion during future investment negotiations with foreign investors.
Kachikwu assured the world and perspective international investors in the Nigerian economy that the Nigerian government is observing the development and stands solidly behind the NLNG in this brawl with the NDDC.
Speaking further on other developments affecting the sector he said that some key milestone however recorded recently by the government was the commencement of settlement of outstanding joint venture cash call debts the Federal Government owes the International Oil Companies (IOCs), He stated that the first payment of $400 million was paid last week to the IOCs. The $400 million payment was part of cash call debt owed the IOCs in 2016. This, the Minister of State stated, was different from the discounted $5.1 billion cash call arrears it negotiated in December 2016 with the IOCs.
The Federal Executive Council had approved the Ministry’s proposal and the concurrence of the National Economic Council had been obtained to begin payments and The Ministry on behalf of NNPC had engaged the International Oil Companies and secured a discount of 25% with each JV Partner on the pre-2016 Cash Call Arrears resulting in a final settlement in the sum of US$5.1 billion payable from incremental production from the JV assets over a five-year tenor without any interest charges during the repayment period. In addition, the 25% discount will not qualify for tax deduction. The sustainable funding of the JVs will lead to an increase in national production from the current 2.2mbpd to 2.5mbpd by 2019, while the immediate effect of the new cash call policy will increase net Federal Government Revenue per annum by about $2 billion.
Responding to further questions during the Press Conference, Dr. Kachikwu said that the Federal Government of Nigeria having kept its own side of the agreement by making the first tranche of payment, the International Oil Companies have announced new investments to in the upstream sector that will create limitless opportunities including job creation along the entire value chain.
He also harped on the extensive work collaborative work being done by the Ministry of Petroleum Resources with the National Assembly on the Petroleum Industry Governance Bill, this bill he stated would be followed by the Bill on Fiscal Terms. He further allayed fears on the cooperation between the Executive and Legislature in ensuring the passage of the bill by affirming that the Ministry and Agencies have been collaborating with the National Assembly on the PIGB to ensure its passage in record time.
The Honorable Minister of State also restated the efforts of the Federal Government to continue to build a strong collaboration between Nigeria and the World Bank on the Global Gas Flaring Reduction Energy and Extractive Global Practices (GGFR). The National targets for gas flare out for Nigeria remains fixed at year 2020 while the target for the global initiative is 2030. The Ministry he said has unveiled the National Gas Flare Commercialization Programme which is a key component of the draft Gas Policy awaiting the approval of the Federal Executive Council and when fully implemented, it will unleash a gas revolution that will lead to tremendously improved power generation, full scale industrialization and LPG penetration at the domestic levels.
Part of the successes the Minister stated that was being worked on during the Press conference is the tracking of oil molecules from production to destination and also the work being put in to reduce the contracting cycle in the Nigerian Oil and Gas sector in order to ensure delivery of projects within the projected period.
The Honorable Minister of State, while addressing the issues raised on Niger Delta, reaffirmed that pursuing peace, security and stability in the Niger Delta which is BigWin5 under the “7BigWins” is an integral aspect of the implementation of the “7BigWins”. He outlined the substantial progress that has been recorded in the dialogue with Niger Delta communities and leaders so that security and safety could be restored permanently, in the region.
Some of the key steps taken include: Facilitating the first all in inclusive meeting with Niger Delta leaders and representatives hosted by President Muhammadu Buhari; a follow up of that meeting has been the visit of Presidency led by the Vice President, His Excellency Prof. Yemi Osinbajo to virtually all the Oil Producing States in Nigeria.
Engagement with host Communities to ensure security and protection of infrastructure Engagement with IOCs to take more responsibilities for infrastructure security.
These engagements led to the development and unveiling of a “20-Point Agenda: Roadmap to Closure” which is aimed bringing an end to militancy in the region. An Inter-Ministerial Working Group consisting of all related Ministries and Agencies that would handle the implementation of the 20-ponit plan has been set up and has also commenced work. The aim is to proffer and implement a long term solution to militancy in the Nigerian Oil and Gas Sector and this approach is presently yielding results with the almost near zero militancy in the past three months.
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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