The Nation Newspaper

Category: Energy

  • JTF recovers 4.2 m litres of oil from two ships

    JTF recovers 4.2 m litres of oil from two ships

    No less than 4.2million litres of stolen crude oil have been recovered by the Joint Task Force (JTF) in Niger Delta.

    The oil was found in two ships arrested in March by Operation Pull Shield, an anti-illegal oil bunkering and oil theft unit of  the JTF.

    While one of the ships was arrested in Okrika Local Government Area of Rivers State, the other was caught few metres to Forcados on the Warri waterways in Delta State.

    During a  tour of oil facilities in the region with JTF operatives The Nation, gathered that the ship in Forcados had 10 compartments and nine were filled with oil. The ship  intercepted at Okrika had four compartments filled with oil.

    A JTF team leader Captain Sunday Olaleye, said one compartment contains 330,000 litres of crude oil, which can fill a truck, adding that a compartment boasts of 10 trucks of crude.

    He said: “When you multiply 330,000 litres of crude oil by nine compartments, you have 2,970 million litres. That is for the ship that was intercepted around Forcados. Besides, the ship seized in Okrika region has four compartments filled with crude oil. When you multiply 330,000 litres of crude oil by four, you have 1.32millon litres. Altogether, over 4.2million of stolen crude oil was recovered in two separate operation carried out by JTF.

    Olaleye said his men arrested the ships on a tip-off.

    “Immediately, we are informed by people that the ships were planning to escape, we swung into action by getting into our gun boats. We sped off and was able to arrest the ships. When we move closer to the ship that was arrested around Forcados area, the sailor and other crude members escaped through a boat they snatched on the river.” he added.

    The Commander, JTF, Maj.- Gen Emmanuel Atewe, said it was unfortunate that some people were stealing crude,  Nigeria’s major source of foreign exchange earnings.

    He lamented that some people were stealing crude oil and making billions of dollars from the illegal business.

    He explained that stealing and ferrying of crude oil outside Nigeria was done by people, believed to be experts in that area.

    He said when people steal crude oil, they move it to the high sea and from there to their destinations, usually Europe and other continents where they have a market for the product.

    Atewe said thieves have a way of stealing, refining crude oil and selling it to their clients who are neck-deep in the business.

    He said JTF has located some local oil refineries, destroyed them and make the areas unaccessible for owners of such plants.

    Atewe said: “No retreat, no surrender”is the JTF’ slogan when its comes to the issue of fighting crude oil theft, pipeline vandalism. By virtue of my training and the agency I heads, I must defend Nigeria as a territory; protect its mineral  resources from the hands of overzealous and wicked people who are bent on improvising people at the expense of their ill- gotten wealth. We have declared zero tolerance against oil theft, illegal oil bunkering and other untoward practices that affect the nation’s oil and gas sector.

    He said besides 24-hour patrol of waterways, JTF is committed to monitoring and stopping vandals from accessing oil installation centres in the region.

    Atewe said JTF is achieving its goal of checking crude oil theft and its associated crimes through a strategic process.

    He said the agency relies on   combined efforts of the Police, Navy, Department of Security Service (DSS) and other institutions that made up  JTF to tackle the crime, adding that communities have been cooperating with JTF on the issue.

    The communities, he added, were helping it with information on how to solve the problems facing them.

     

  • NDPHC prepares for NIPP Phase II

    The Niger Delta Power Holding Company Limited (NDPHC), owners of the National Integrated Power Projects (NIPP), is reorganising  for the implementation of NIPP Phase 11.

    The project will centre on generation from hydro plants as against the Phase 1 that operates on thermal plants. The choice of hydro power is part of the diversification of sources of power supply, especially in the face of the rampant pipeline vandalism.

    The General Manager, Communication and Public Relations, NDPHC, Yakubu Lawal, said the Board, at a meeting in Abuja, approved the implementation of the new structure, which was proposed at its meeting in August, last year.

    Under the new structure, he said the company has four executive directors  to head generation, networks; finance and accounts and corporate services departments. He added that the office of the Company Secretary/Legal Adviser has been upgraded to a director’s status.

    Mr. James Abiodun Olotu retains his position as Managing Director/Chief Executive Officer and the head of the new structure, he said.

    Lawal also dismissed in situations that the Board made the appointments ahead of May 29 swearing in of the new government to avoid changes.

    He said the report could cast aspersions on the integrity, credibility and competence of the chairman and directors of the NDPHC.

    According to him, the National Economic Council (NEC) in April 2013 approved the execution of the second phase of the NIPP projects, which comprise Mambilla hydro power project and 16 other identified medium and small hydro power projects to create a mix of power generation/supply system for the country.

    The Phase 1 NIPP projects have 10 new thermal power stations in the south.

    The second phase will contribute about 4,000 megawatts (MW) to the national grid. It has some critical transmission projects, which are expected to wheel power from the existing and new power stations as it has the capacity to wheel over 20,000MW to the power distribution chain. The projects are being assembled.

    According to the report presented to the Board of NDPHC, four power stations in the NIPP Phase One have been inaugurated by President Jonathan.

    They include Geregu II, 434mw capacity in Kogi state, Omotosho II, 500 MW capacities in Ondo state, 750MW capacity Olorunsogo II power plant in Ogun State and Phase One 504MW Alaoji thermal power station in Abia State. But Benin Generation Company and Ogorode with 450MW capacity each in Edo and Delta states are awaiting opening.

    Other projects for completion are the 21.5km gas pipeline Creek town to Ikot Nyong power plant; 18km  Ikot Nyong-Adiabo 330kV DC lines to evacuate power from Calabar power plant in Cross River State;  completion of 13km 132kv DC Adiabo – Calabar 132/33kV substation and reinforcement of this Calabar 132/33kV substation with 1no 60MVA 132/33kV transformer and bays to accommodate new lines from Adiabo;  completion of the upgrading of Jos 330/132/33kV substation with 1no 150MVA transformer, 1No 75MVA reactor and new 330 and 132kV bays provision to accommodate new lines in and out of Jos 330kV substation.

    Others due for completion are the 286Km 330kv DC Jos-Makurdi transmission line; new Makurdi 330/132/33kv substation; 222km 330kV DC transmission line Geregu-Lokoja-Gwagwalada, linking NIPP power plant at Geregu to FCT, 2x150MVA 330/132/33kV transformer substation at Gwagwalada in Abuja with a further 90km of both 330kV and 132kV lines to reach Katampe and Apo 330/132/33kV substations in Abuja, among projects.

  • Marketers: we are owing transporters N20b

    THE Major Oil Marketers Association of Nigeria (MOMAN) is owing petroleum products’transporters N20billion, its Executive Secretary, Olufemi Olawore, has said.

    The debts, he said, arose over the marketers’ inability to get subsidy arrears from the Federal Government. The marketers are Mobil, Forte, Total, MRS, Conoil and Oando.

    Olawore said at a stakeholders’ forum in Lagos that the association was planning to offset the debts soon.

    The matter, he said, was presented before the marketers by transporters, adding that his body would investigate the claims.

    He said: “Transporters have told us (oil marketers) that we are owing them N20 billion for helping us to move petroleum products across the country.These are claims, which we are planning to investigate. By the time we reconcile the figures the transporters have with our own, there may not be any difference.”

    He said the debt is a confirmation that marketers are in a dire situation, adding that the problems facing marketers are many.

    “Marketers are talking about difficulties in getting money to import fuel into the country, while at the same time, battling with debts. The money the government is owing marketers is huge, making it difficult for them to operate optimally. We would get over our problems as soon as the Federal Government fulfills its financial obligations to us, he said

    According to him, it is becoming difficult for marketers to work, stressing that marketers are mulling pruning their activities to cut costs.

    He said stakeholders would be affected if the association embarked on cutting its operation.

    It would be recalled that the issue of petroleum subsidy has generated controversy, pitching the Federal Government and the marketers against each other.

    This has resulted in the plans, by the government to withdraw subsidies in January 2013, a development which led to protests nationwide.

  • Why oil operators cannot access funds

    Why oil operators cannot access funds

    MARGINAL oil field operators are finding it difficult to access funds for operation because they have weak financial structures, complex field development plans, and unresolved legal and environmental issues, the Division Head, Oil and Gas (Upstream), Fidelity Bank Plc, Abolore Solebo, has said.

    Other problems plaguing them are faulty Memorandum of Understanding (MoU) and low exploration and production activities.

    Speaking on the sideline of a stakeholders forum in Lagos on why some marginal oil fields are idle, despite the directive from the Federal Government that owners of such fields should activite them, Solebo said poor financing is affecting operation of many oil firms in Nigeria.

    He said Fidleity Bank could not provide funding to some marginal field operators that came  for loans because of their inability to meet the requirements.

    He said financial institutions are ready to provide funds for operators, provided they are willing to abide with the terms and agreements for accessing loans.

    He said: “Most of the marginal oil field operators are complaining about financing. But they have forgotten that they are not playing the roles expected of them by the banks. They are not ready to meet the banking requirements. They are not ready to do the needful, by meeting the legal and financial requirements provided for them. Often times, the field development plans of some oil companes are too complex for banks to work with.

    “There are legal hurdles that can stop a firm from operating. Once the legal hurdles are not sorted, banks would not be willing to advance credits to existing and prospective loan seekers. If there is a court injunction stopping an oil firm from operating, that shows that banks would not be able to recoup its money.”

    Solebo said the falling price of crude oil in the international market is a lesson in disguise for operators, urging them to improve their production for growth.

    “At this time of sliding crude oil prices, marginal oil field operators should try and work up numbers, by taking advantage of spontaneous financing at their disposal to increase production. By this, they should involve in activities that would encourage production since this is the only way they can compete well in the industry,” he said.

    He said banks have keyed into the local content initiatives by supporting indigenous oil companies.

    According to him, the Nigerian Content Development Monitoring Board (NCDMB) has recorded success in the oil and gas sector by ensuring that local content initiatives are adopted and implemented by operators. This is evident by the support local banks are given to oil operators in the sector by supporting them with the needed funds.

    He said: “Fidelity Bank and others have keyed into the local content initiatives in the petroleum industry.

    “On the exploration and production space, banks have participated in the divestment of assets of Shell by supporting indigenous oil companies that acquired the assets. Nigerian banks provided $2.5 billion out of $3 billion needed to acquire the assets of Shell. We would continue to invest in the industry as opportunities arise.”

     

     

  • UN, World Bank chiefs launch gas flare-out initiative

    UN, World Bank chiefs launch gas flare-out initiative

    • Target 40% flaring

    A gas flare-out initiative expected to cut global flaring by 40 percent was launched at the weekend in Washington DC, the United States capital.

    Tagged Zero Routine Flaring by 2030, the initiative has already been endorsed by nine countries, including four African nations, 10 oil companies and six development institutions. The initiative was launched  by the United Nations (UN) Secretary-General, Ban Ki-Moon and World Bank Group President, Jim Yong Kim.

    They were joined by Royal Dutch Shell Chairman Jorma Ollila; Statoil Chief Executive Officer, Eldar Sætre; Norwegian Foreign Minister, Borge Brende; Gabonese Minister of Petroleum, Etienne Dieudonne Ngoubou; and several other senior government and corporate officials, as well as representatives of the World Bank Group, African Development Bank (AfDB), Islamic Development Bank  and other international development banks. The endorsers collectively represent more than 40 per cent of global gas flaring.

    The UN scribe said: “Gas flaring is a visual reminder that we are wastefully sending carbon dioxide into the atmosphere. We can do something about this. Together we can take concrete action to end flaring and to use this valuable natural resource to light the darkness for those without electricity.”

    Kim said by endorsing the initiative, governments, oil companies and development institutions recognise that routine gas flaring is unsustainable from a resource management and environmental perspective and agree to cooperate to eliminate ongoing routine flaring as soon as possible and no later than 2030. They will publicly report their flaring and progress towards the target on an annual basis. Furthermore, routine flaring will not take place in new oil fields developments. Governments will provide an operating environment conducive to investments and to the development of functioning energy markets.

    “As we head towards the adoption of a meaningful new international climate agreement in Paris in December, these countries and companies are demonstrating real climate action. Reducing gas flaring can make a significant contribution towards mitigating climate change,” said Moon.

    Oil companies and governments that have yet to endorse the initiative are currently undertaking comprehensive reviews of their gas flaring. Many are expected to join the Initiative in the coming months.

    Every year, around 140 billion cubic meters of natural gas produced together with oil is wastefully burned or flared at thousands of oil fields around the world.

    This results in more than 300 million tons of carbon dioxide being emitted to the atmosphere—equivalent to emissions from approximately 77 million cars.

    If this amount of associated gas (AG)  were used for power generation, it could provide more electricity (750bn kWh) than the entire African continent is consuming today. But currently, the gas is flared for a variety of technical, regulatory, and economic reasons, or because its use is not given high priority, Kim said.

     

  • Cooking gas price rises on scarcity

    Cooking gas price rises on scarcity

    Marketers have increased the price of Liquefied Petroleum Gas (LPG) known as cooking because of its scarcity, The Nation has learnt.

    LPG marketers, including NIPCO, Total, Forte Oil, Nigerian National Petroleum Corporation (NNPC), among others, have not only increased the price of the product but are rationalising its supply.

    The problem, it was gathered, was caused by hitches in the distribution among stakeholders in the value chain. A source in one of the oil marketing firms said the scarcity was caused by the usage of LPG distribution channels for other purposes than what they were built for.

    The sources said the government directed that two out of the three distribution channels be used to supply Premium Motor Spirit (PMS) to make fuel available in the country.

    The President, Liquifield Petroleum Gas Association of Nigeria (LPGAN), Dapo Adesina corroborated the source saying the scarcity was caused by the usage of LPG terminals for other purposes.

    He said NIPCO terminal, Products and Pipeline Marketing Company (PPMC) terminal and NAFGAS terminal are the three approved by the Federal Government for the supply of LPG in Lagos.

    He said NAFGAS terminal is the only one supplying LPG to the bulk and retail sellers, while NIPCO and PPMC terminals are being used to supply petrol since the election was held.

    He said the development has resulted in uneven distribution and scarcity of cooking gas in the country.

    He said: “The Nigeria Liquefied Natural Gas (NLNG) is not the cause of the scarcity of the product as people were made to understand. NLNG supplies LPG seamlessly through vessels that are coming from its base in Port Harcourt, Rivers State, to Lagos. The failure to use the three terminals to distribute LPG is the cause of the scarcity.  Imagine a situation where one out three terminals was used to get cooking gas to the consumers.  Definitely few people would access LPG which would ultimately lead to its scarcity.

    “At Creek Road, Apapa, Lagos, there is a gridlock. The traffic was caused by tankers waiting to load LPG. Many trucks have waited for days to get the product but to no avail. The scarcity of cooking gas dates back to the electioneering period and we are still experiencing it,” he said.

    He said the solution to the problem lies in the hand of the Federal Government because it regulates the oil and gas sector.

    The price of 12.5 kg cylinder of cooking gas has increased from N2,800 to N3,200 depending on the area. Besides, many refilling outlets do not have the product while those that have sell at high prices.

    A gas seller, Joshua Oliha, told The Nation that the market was dull because there was no gas to sell to customers. According to him, he struggles with his colleagues to get the product at a high price, a development that has forced them to increase the price.

    He said: “The gas sellers come together to deliberate on developments in the sub-sector.  We have resolved to wait till post-election period to see whether the problems would be solved.  We hope that the government would ensure that LPG is widely distributed to end the scarcity. Customers would be buying cooking gas at high price until the government does the right thing about the issue,” he said.

  • Oil price crash: 6,000 jobs gone

    Oil price crash: 6,000 jobs gone

    NO fewer than 6,000 technical workers have been sacked in the last eight months, following the fallen oil price.

    They include geologists, engineers, artisans, and fitters in the oil servicing firms.

    President, Petroleum Technology Association of Nigeria (PETAN), Emeka Ene, told The Nation that the body was feeling the price crash pinch, going by the gale of retrenchment carried out in the oil service segment.

    He said:“The oil servicing companies employ 20,000 technical workers, while the indirect workers are around 100,000. These are people that, by virtue of their services, do not have direct dealings with members of the Petroleum Technology Association of Nigeria. Thirty per cent of 20,000 will give us 6,000 plus.”

    He said the fall in price of crude oil from over $100 per barrel to $40 per barrel, between August last year and January this year,  has affected the operations of firms that provide technical services. Ene said this is evident in the failure of oil servicing firms to secure and implement good contracts.

    “At a point, oil servicing firms were directed by oil exploration and production companies operating in the country to reduce the cost of contracts by 30 per cent. By this, oil services firms are going to execute contracts at a rate or cost that is not beneficial to them. This is a loss, and everyone is now feeling the spiral effect of oil price plunge. Based on this, there is no way oil servicing firms would review their operations to be able to meet up in the industry,” he added.

    He said the body is working to curtail further job loss by introducing measures that would pave way for the engagement of more domestic oil and gas operators.

    Ene said discussions between oil service providers and the Oil Producers Trade Section (OPTS), a body that comprises multinational oil firms in Nigeria, are ongoing to salvage the situation.

    He said: “There are series of engagements between the oil service providers, international oil companies and local oil and gas producers to minimise the effects of the falling crude oil prices on the industry. The discussions were initiated to enable the operators maximise the gains of the Local Content policy formulated years ago.’’

    According to him, oil servicing firms would tap into opportunities provided by the Act to improve their operations after the discussions. He said the discussion would help in clustering activities or services in the industry, stressing that the operators will form groups to execute projects. He said the idea would benefit the local firms in the long run because they would secure and implement oil servicing contracts profitably.

    He said: “When services are clustered and executed by groups, the losses accrued to the parties involved would be minimal. The  purpose  of the Local Content Act or policy  would be defeated if domestic operators cannot tap the opportunties in it.”

    Also, the Chief Executive Officer, Manifold Energy, Dr Dapo Oshinusi, said the effects of the crash in oil prices are evident globally. He said the prayer of operators was that the price of oil should rebound to encourage industry’s growth.

    Oshinusi said oil device providers and other operators were facing hard times caused by glut in supply of crude oil.

    He said oil servicing firms were battling to survive because of the fall in the global prices of crude oil. He said the firms were being forced to review their contracts downward, without considering the implications the development would have on their operations.

    He said: “Imagine a situation where oil services firms got the contracts when the price of crude oil was $100 per barrel, and now being directed by oil majors to cut the cost by 30 per cent. How are they going to make up for the shortfall?”

    Nigeria and other member-countries of the Organisation of Petroleum Exporting Countries (OPEC) have been battling challenges following the fall in the prices of crude oil since last year.The situation is having debilitating effect on Nigeria that derives over 70 per cent of its revenue from oil.

     

  • Nigeria gets $3.017b from Shell

    ANGLO–Dutch oil giant Shell  said its subsidiaries in  Nigeria paid the Federal Government $3.017 billion as income taxes and royalties last year.

    In its 2014 Sustainability Report, the company said it paid the government $2.290 billion income taxes and $727 million as royalties.

    Its Chief Financial Officer, Simon Henry, said the company knows the importance of taxes to the governments where it operates.

    He said: “We provide the authorities with timely and comprehensive information on potential tax issues, while we receive treatment that is open, impartial, proportionate, responsive and grounded in an understanding of our commercial environment. Not only does this approach help us to comply with both the letter and the spirit of the laws where we have our operations, it also improves transparency about our tax affairs and allows Shell to better manage its tax-related risks throughout the life cycle of each project.

    “At Shell, we understand how tax binds governments, civil society and businesses together. We use legitimate tax incentives and exemptions designed by governments to promote investment, employment and economic growth. But we oppose tax fraud and tax evasion. For transparency reasons, Shell reports all its significant subsidiaries.

    “At Shell, we have a zero tolerance policy on corruption and bribery. “They disrupt societies, they disrupt the level playing field among companies, and they threaten the viability of the long-term investments that characterise our industry. We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form. Facilitation payments are prohibited. Our Code of Conduct include specific instructions to staff and mandatory training, especially with respect to potential conflicts of interest and the offer or acceptance of gifts and hospitality. A Global Helpline allows employees and business partners to seek advice and report any violations. In addition, Shell sits on Transparency International‘s Steering Committee for the Business Principles for Countering Bribery.

    “Our anti-bribery commitment is an integral part of the Shell General Business Principles, first published in 1976. So is our stance against political donations, which precludes Shell from making payments to political parties, organisations or their representatives.

    “In today’s fast-changing world, where energy plays a vital role, Shell is active as a constructive and responsible partner in public policy making, from advocating the implementation of effective carbon pricing to the protection of our ships against piracy. In all these endeavours, we favour a multi-stakeholder approach, working with others inside and outside our industry to achieve practical and effective solutions, beneficial to all parties involved.

    “Tax binds governments, communities and businesses together. Revenue transparency provides citizens with an important tool to hold their government representatives accountable and to advance good governance. Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people.”

     

     

  • NLNG pays $14.7b dividend to govt

    The Nigeria Liquefied  Natural Gas Limited (NLNG) paid $14.7billion to the Fedral Government as dividend last year.

    It also paid $15.3 billion dividend to other investors, $21 billion to joint venture (JV) feedgas suppliers, and N220 billion tax during the period.

    In its 2015 Facts and Figures report, NLNG said besides financial contributions, it also contributed substantially to environmental hazard reduction, foreign direct investment, job creation, local content development and the boost in the Gross Domestic Product (GDP).

    The report read: “NLNG utilises gas that would have otherwise been flared, thus making significant contributions to the nation’s income while helping to protect the environment. Payment to joint venture feedgas suppliers from inception till date is almost $21 billion, between 55 and 60 per cent of this amount goes to the Federal Government via its shareholding in Nigerian National Petroleum Corporation (NNPC).

    “NLNG has also over the years paid dividends of almost $30 billion, out of which 49 per cent went to the Federal Government through its shareholding in NNPC.

    “As a good corporate citizen, NLNG also contributes to national wealth and economic wellbeing of states in which it operates, by paying all applicable taxes and tariffs. In 2014, the company’s corporate income tax amounted to about N220 billion, thus making NLNG by far the highest tax payer in Nigeria and sub-Sahara Africa.

    “The company since 2008, contributed about four per cent of Nigeria’s annual Gross Domestic Product (GDP) and with current rebasing of the GDP, NLNG’s contribution to the GDP is put at about one per cent.”

    On environmental hazard reduction, the company said it has converted about 133 billion standard cubic metres (Bcm) of associated gas (AG), which is equivalent to 4.68 trillion cubic feet (Tcf) of associated gas to exports as liquefied natural gas (LNG) and natural gas liquids (NGLs). The conversion of the associated gas helped to reduce gas flaring by upstream companies, it stated, adding that however, flares are only permitted in order to eliminate waste gas which cannot be converted to any further use. Flares also act as safety systems for non-waste gas and are released via pressure relief valves, when required, to ease the strain on equipment.

    NLNG also said it provided more than 2,000 jobs in each construction year. Overall, the major sub-contractors employed about 18,000 Nigerians in technical jobs in the base projects adding that through each Nigerian Content plan for its contracts, NLNG has promoted the development and employment of indigenous manpower. “For instance, 600 Nigerians will be trained in Nigeria and at the contractors’ (Hyundai and Samsung) shipyards in Korea as part of the Nigerian Content deliverables tied to the construction of six new LNG vessels by Bonny Gas Transport (BGT), a wholly owned subsidiary of NLNG.

    “Those 600 Nigerians, with enhanced skills in welding, hull assembly, pipe fitting, electrical, mechanical, painting and ship design will join the country’s workforce, providing a support base for technology transfer and industrialisation.

    “Thirty-five of the Nigerian trainees are in Korea for participation in the ship construction and six Nigerians are working as ship managers (two Production Managers, two Quality Assurance/Quality Control Managers and two HSE Managers) in the ship construction at the shipyards in Korea,” it added.

    Shareholders of NLNG are NNPC (49 per cent), Shell Gas B.V. (25.6 per cent), Total LNG Nigeria Limited (15 per cent) and Eni International (10.4 per cent).

     

  • Shell rakes in $2.437b from two oil blocks sale

    Shell rakes in $2.437b from two oil blocks sale

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) and other joint venture firms, Total Exploration and Production (E&P) Nigeria Limited and Nigerian Agip Oil Company Limited have realised $2.437 billion from sale of their interests in two oil blocks – oil mining lease (OML) 18 and OML 29 and the Nembe Creek Trunk Line (NCTL) and related facilities in the Eastern Niger Delta.

    The companies completed sale of their interests in assets last week bringing an end to the controversies that trailed the transaction since last year. The transaction on the two assets ought to have closed since last year alongside other two blocks OMLs  24, 25, but because OMLs 18 and 29 were considered juicy when compared to others and besides there were issues of capacity and capability on the side of the preferred bidders, the transaction lingered till last week.

    According to SPDC’s Corporate Media Relations Manager Precious Okolobo, Shell’s interests in OML 18 were assigned to Eroton Exploration & Production Company Limited and total cash proceeds for Shell amount to $737 million while OML 29 and the NCTL were sold to Aiteo Eastern Exploration and Production (E&P) Company Limited and total cash proceeds for Shell amount to some $1.7 billion.

    This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government’s aim of developing Nigerian companies in the country’s upstream oil and gas business, he added.

    Shell, he said, has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there – both onshore and offshore. Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to help fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

    OML18 covers an area of 1,035 square kilometres and includes the Alakiri, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities. The divested infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced on average of about 14,000 barrels of oil equivalent per day in 2014.

    OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities. The NCTL is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT). BCOT is not part of the transaction and will remain owned and operated by the SPDC Joint Venture. The divested infrastructure includes flowstations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced around 43,000 barrels of oil equivalent per day (100 per cent) in 2014.

    Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited have also assigned their interests of 10 per cent and 5 per cent respectively in the lease, ultimately giving Eroton Consortium a 45 per cent interest in OML 18 and also assigned the same interests to Aiteo Eastern E&P Company Limited ultimately giving it a 45 per cent interest in OML 29 and the Nembe Creek Trunk Line.

    Shell said all approvals have been received from the relevant authorities.

    Royal Dutch Shell Plc had said it targets $15 billion from assets sales between last year and this year. The divestments of the assets are part of the steps to achieve the target.

    Shell Chief Executive Officer Ben Van Beurden had said the company had already completed about $8 billion in asset sales and announced plans to dispose of about $15 billion through 2015 adding that the company agreed to sell two natural gas assets in the United States for $2.1 billion plus shale acreage.

    Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, said last year that the value of divested assets by the International Oil Companies (IOCs) including Shell, Chevron, Total and Agip from onshore, shallow water and offshore terrains, would hit about $11.5 billion by the end of last year. She said before the end of last year, at least 20 oil blocks with reserves of not less than four billion barrels of oil equivalent (boe) would have been divested by the multinational oil firms.