Gas
Seven Energy moves to develop gas supply in Nigeria
…secures US$255M equity capital
ABUJA – Seven Energy International Limited an indigenous integrated oil and gas development, production and gas distribution company with interests in Nigeria, is pleased to announce that it has secured US$255 million of new equity capital, enabling the Group to further develop gas supply opportunities in Nigeria’s domestic energy market.
Temasek, the Singapore investment company, has committed US$150 million, the International Finance Corporation (“IFC”), a member of the World Bank Group, has committed US$75 million, and the IFC African, Latin American, and Caribbean Fund (“IFC ALAC Fund”) has committed US$30 million. The investments will be in two tranches, the timing of which is subject to the satisfaction of certain conditions in the investment agreements.
The institutions are investing in Seven Energy’s irredeemable convertible loan notes which bear no coupon and are akin to equity capital. On a converted and fully diluted basis, on full satisfaction of the investment agreements, the new investors would account for approximately 26% of the equity capital of the Group.
This new equity capital will assist Seven Energy in the development of its growing portfolio of assets in Nigeria, where the Group is focusing on the development of upstream reserves and resources and gas infrastructure to provide gas to the domestic market for power generation and industrial consumption.
Through its gas processing, distribution and marketing subsidiary, Accugas Limited (“Accugas”), and its recent acquisition of the East Horizon pipeline, the Group has to date invested approximately US$1 billion in south-eastern Nigeria. This reinforces the Group’s position as a leading integrated gas company in Nigeria. The Group aims to capture the growing demand for gas and power as Nigeria’s industrial base grows and the liberalisation of the power sector spurs further investment in generating capacity.
The Group has long-term take-or-pay gas sales agreements in place to sell over 1.4 trillion cubic feet of gas. A 10 year contract to supply 43.5 million cubic feet of gas per day (“MMcfpd”) to Ibom Power; a 20 year contract to supply 131 MMcfpd to the federally-owned power plant at Calabar; and a 20 year contract to supply 25 MMcfpd to a cement plant in the Calabar area, increasing to 50 MMcfpd upon the anticipated expansion of the plant. The two power stations, which will have a combined installed capacity of approximately 750 MW when fully commissioned, will add an additional 20% of capacity to Nigeria’s current operating electricity generation capacity.
In collaboration with its customers and other stakeholders, Seven Energy is working to link its infrastructure together to establish a 300 km gas ring of 24-inch and 18-inch high pressure pipelines in Akwa Ibom and Cross Rivers states with total distribution capacity of 600 MMcfpd, capable of supplying the demand centres of Calabar, Uyo and Ikot Abasi, and giving access to Port Harcourt to the west. In addition, at Ekid, near the ExxonMobil Qua Ibo terminal, the Group owns a gas plant for treating and processing 200 MMcfpd of gas which is currently supplied from the Uquo Field where the Group is the 100% funding partner.
With this significant capacity built into its processing and distribution infrastructure, the Group is well-positioned to provide long-term gas supply for power generation as well as lower-cost fuel to local industries. The Group is currently in active discussions with a number of current, planned and potential off-takers with regards to future gas supply agreements.
The relative lack of investment in gas development for the domestic economy has resulted in most Nigerian industry and power generation relying heavily on imported diesel and fuel oil, which are significantly more expensive than locally-sourced natural gas.
Seven Energy’s Chief Executive Officer, Phillip Ihenacho, said of the equity investment:
“Seven Energy has developed a strong and strategically important position in the rapidly developing gas market in Nigeria. I am very pleased that the Group has gained the support of Temasek, IFC and the IFC ALAC Fund, all highly-respected global investors.
“These investments are a vote of confidence in Nigeria and in Seven Energy’s vision to be the leading supplier of gas in the country.”
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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