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Tag: oil blocks

  • 208 open oil blocks up for grabs

    208 open oil blocks up for grabs

    Two Hundred and eight open oil blocks are up for grabs by firms and investor, it was learnt.

    A report by the Department of Petroleum Resources (DPR), the oil and gas industry regulator, obtained by The Nation, shows that 184 others have been awarded.

    According to DPR, there are seven basins in the country. They are in Anambra, Benin, Benue, Bida, Chad, Niger Delta and Sokoto. However, some of the basins are more buoyant than others as shown by the number of producing acreages in the Niger Delta basins.

    Sokoto, Bida, Benue and Chad basins are the most uneconomic  as there are no productive wells or those with proven commercial reserves of hydrocarbon.

    According to the report, Anambra basin has 19 oil blocks. Of these, six are operated under the oil exploration licence (OPL) while one is under oil mining licence (OML), leaving 12 blocks for offer. Benin basin has 48 oil blocks with eight OPLs, three OMLs and 37 open blocks. The Niger Delta basin has 191 oil blocks with 52 OPLs, 105 OMLs and 34 blocks open for bid.

    In the Benue,Bida,Chad and Sokoto basins, which have 43, 17, 46 and 28 oil blocks, there are no oil mining leases. Benue and Chad basins have two and six OPLs while Bida and Sokoto do not have any.

    An oil prospecting licence confers exclusive rights of surface and subsurface exploration for the production of oil and gas in an area not more than 2590 square kilometres (sq. km) about 1000 sq. miles in size.

    The OPLs granted for onshore/land/swamp are for an initial period of three years with the option of renewal for a maximum of two years. For the inland basin and deepwater blocks, the exploration  is 10 years, broken into two five years, which automatically roll over unless withdrawn due to nonperformance.

    An Oil Mining Lease or Licence (OML) is granted to a licencee who has fulfilled the work commitment as stipulated in the petroleum drilling and production regulations.

    OML is granted if the following potential for economic production exist in an OPL, for land/shallow offshore/Inland Basin, 10,000 barrels of oil per day (bopd) and for deep offshore acreasges, 25,000 bopd. The oil mining lease or licence allows a maximum acreage of 1295 sq. km and is due for renewal on expiration after 20 years.

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director Dr. Maikanti Baru has reiterated the Corporation’s commitment to continue with exploration activities in these basins to boost daily oil production and reserves of the country.

    He said: “We have a mandate of opening up new frontiers to enable production and reserve addition. NNPC is set to resume exploration activities in both the Chad and Benue Troughs. There is a high level of optimism based on recent seismic processed data from the Chad Basin that our sojourn this time around will yield successes.”

    Some multinational oil service firms, such as Halliburton and Schlumberger as well as indigenous and Chinese firms, have over the years carried out seismic and exploratory activities in the Chad basin without finding hydrocarbon in commercial quantity.

    However, the Federal Government believes that as much as there is oil in commercial quantity in the other part of the Chad basin in the Republic of Chad, there is hope to find same on Nigeria’s side of the basin, perhaps with advanced technology.

     

  • In the muck

    •Award of oil blocks perhaps is the touchstone of corruption in Nigeria’s oil business

    For more than three decades, affluent Nigeria’s petroleum industry has been signposted by graft of the murkiest kinds. Sleazy deals ranging from manipulated calibrations, high sea crude trans-shipment, shady crude swaps, plain crude theft, products round-tripping, unauthorised offshore accounts, unremitted earnings and joint-venture calls padding, among others, have been the unofficial business model in the industry.

    The industry, led by a stinking behemoth, the Nigerian National Petroleum Corporation (NNPC) has become a metaphor for official corruption and how not to conduct business – and it is an acclaim that has gained world-wide renown.

    But the key stakeholders are neither deterred nor repulsed by the quantum of condemnation heaped on it over the years. At every turn there is a scam, and open any book, you are bound to find the ugly pork marks of malfeasance.

    The current episode is the revelation emanating from the House of Representatives over oil block award mess. An ad hoc committee of the House reviewing the award of Oil Mining Leases (OML) and Oil Prospecting Licences found that Nigeria lost at least N111 billion ($565.6 million) to irregularities and questionable activities during the 2005, 2006 and 2007 oil block bid sessions.

    Indeed, it would have amounted to a chilling anti-climax if the committee had not uncovered a new set of odious sleaze for that had been the story of the NNPC for many years. This one, like most others, comes in mind-boggling proportions.

    To think that oil blocks, Nigeria’s most strategic assets, are handled with so much laxity, so much opacity and with unimaginable corruption. The N111 billion so-called outstanding are payments that ought to have been made by companies that won oil blocks since 2005 and 2007 but they managed to escape paying despite commercial oil find from the blocks.

    The committee also found that many firms participated and won biddings for oil blocks but were not only denied, but their successful bids were passed to other firms which sometimes never were part of the process. The committee cited the particular case of OPL 280 in which a firm that never participated in the bidding process came on the scene after the close of bidding to pay $55 million for a block that was originally offered to a firm for $210 million.

    It was found that the revocation order on the bid winner was said to have come from the presidency. But what about the 75 per cent shortfall in the bid price?

    It was also found that the bidding rounds and award of oil blocks violated key provisions of the Petroleum Act which stipulates that an oil mining lease shall not exceed 20 years. Another section stipulates that half of the area of an oil mining lease shall be relinquished after 10 years or the holder reapplies for re-allocation of a part or the whole acreage. But most of these provisions were breached with impunity over the years.

    The Department of Petroleum Resources, DPR, the regulatory arm of the NNPC which is charged with the technicalities of oil block awards can only respond with excuses as to why this crucial process has been infested with so much putrescence.

    In the spirit of the new administration, we urge that the DPR be cleansed out extensively to do away with the old regime of shady dealings and lack of transparency in the most crucial unit of Nigeria’s oil industry.

    Never again should oil blocks be awarded to an individual or a firm not already operating in the industry and not known to be technically and financially sound. And all the firms and individuals still owing signature bonuses and that had been drilling oil must be made to pay their debts with fines, if not an altogether revocation of such leases and licences.

    Henceforth, the process of oil block bidding must be made plain and benchmarked against global best practices. Oil being an international business, mucking it up will only bring Nigeria odium among the comity of nations.

  • Court adjourns suit over oil blocks indefinitely

    The Supreme Court has adjourned indefinitely, the suit involving Chevron Nigeria, Britannia-U Nigeria Limited and Seplat Petroleum Development Company over the disputed sale of three oil blocks – Oil Mining Leases (OMLs) 52, 53 and 55.

    The hearing earlier scheduled for last Friday was stalled because of the absence of the presiding judge, Justice Suleiman Galadima, who was said to have been bereaved.

    Although lawyers to parties in the suit were in court early, they were notified later that the case would not be heard owing to the “unavoidable” absence of Galadima.

    The development informed the decision of court officials to adjourn indefinitely, promising to issue hearing notices on parties when a fresh date has been fixed for hearing.

    At the first hearing on May 18, the apex court restrained Chevron and Seplat from selling the disputed oil blocks.

    The Supreme Court particularly ordered Chevron not to take any step or action regarding the sale of the disputed OML 52, OML 53 and OML 55 to Seplat, pending the determination of the appeal by Britannia-U Nigeria Limited.

    A five-man panel led by Justice Tanko Muhammad issued the order, directing parties in the case to maintain the status quo. He said: “No party is allowed to take any step that will affect the res (subject matter) of the appeal.

    The court’s order was informed by the refusal of lawyers representing parties to give undertaking that their clients would not take steps that would affect the case.

    Appellant’s lawyer, Rickey Tarfa (SAN) caused the court to issue the order on realising that it may be difficult for him to argue his pending application for mandatory injunction seeking to reverse steps taken by Chevron to sell the disputed oil bloc to Seplat.

  • Shell’s controversial oil blocks

    Shell’s controversial oil blocks

    Who  should operate the oil blocks divested by Shell? The Nigerian Petroleum  Development Company (NPDC) says it has the financial and tehnical capacity to run them. But, its Joint Venture (JV) partners in the private sector say it cannot. They argue that the oil assets are “grossly” underutilised under NPDC, adding  that “this is impacting negatively on our investment in the oil acreages.”  They want the blocks transferred   to them. EMEKA UGWUANYI reports.

    In the last two months, the battle over the operatorship of some of the Shell’s divested oil blocks in oil mining leases (OMLs) 30, 34, 40, 42 has been a major issue in the oil industry in the country.

    Trouble started when the Federal Government handed over its 55 per cent equity stakes in the oil assets to the Nigerian Petroleum Development Company (NPDC), which is the exploration and production arm of state-run oil firm, the Nigerian National Petroleum Corporation (NNPC). The remaining stakes of 45 per cent in the Joint Venture (JV) oil blocks held by Shell Petroleum Development Company (SPDC), Total and Agip were sold to some indigenous companies that came together as a consortia.

    Aside  Seplat Petroleum Development Company that bought the very first set of divestment in oil mining leases (OMLs) 4, 38 and 41, and was granted the operatorship of the assets, the government transferred the operatorship of subsequent divested assets to the NPDC.

    However, very recently, the government withdrew the operatorship of OML 42 from the NPDC to the private sector JV partner, a situation that irked the NPDC workers and compelled them to embark on strike. The strike stalled the transfer of the operatorship of the remaining three oil blocks to the private sector JV partners, which lingered until the President Goodluck Jonathan’s led administration ended last month.

    The indigenous private sector JV partners of NPDC are Neconde Energy Limited (OML 42), Elcrest Exploration and Production Nigeria Limited (OML 40), Shoreline Natural Resources Limited (OML 30), ND Western Limited (OML 34) and First Hydrocarbon Nigeria FHN/Afren (OML 26).

    These companies are of the view that due to bureaucratic bottlenecks associated with public owned companies,  NPDC is constrained technically and financially to optimise output from the oil blocks adding that NPDC as a firm, cannot borrow money from banks to conduct its business and also cannot take decision on crucial issue of production without getting clearance from its parent company, the  NNPC.

    As private sector companies that have made huge investments, non-optimisation of the assets is affecting their bottom-line and the economy, the investors lamented.

    The buyers of SPDC’s divested stakes in OMLs 30,34, 40 and 42 cite the achievements Seplat as operator of its acquired oil blocks. They said if the operatorship had remained with NPDC, Seplat couldn’t have recorded meaningful progress. When Seplat acquired Shell’s stakes in the three blocks in 2010, the combined production was less than 30,000 barrels per day (bpd) but as at last year, the production has been ramped up to 70,000 bpd while also increasing the natural gas output significantly.

    A source in the NNPC, however, said the truth is that NPDC doesn’t have the capacity. ‘Imagine a company that was operating just one block and got eight oil blocks in one fell swoop. They have been advised several times to go into partnership with other companies to improve capacity and efficiency but they held on to status quo.

    “Frankly speaking, we don’t have the financial and requisite personnel to manage these blocks and this is the reason for the transfer of the operatorship to the indigenous firms in joint venture partnership with them NPDC. NPDC was unable to absorb the multinational oil firms’ workers in the divested assets resulting in acute personnel deficit and fortunately, the indigenous JV partners absorbed them. Besides, NPDC doesn’t have the capacity to take loans from banks for their operations unlike their JV partners, which puts a serious financial constraint on the firm,” the source said.

    The indigenous JV partners of NPDC that are expecting that operatorship of their blocks may be granted include Elcrest (OML 40), Shoreline (OML 30), ND Western (OML 34) and FHN/Afren (OML 26). The source said the firms have the technical capacities, personnel and financial strength to operate the assets and also have the ability to invest billions of naira into drilling of new wells and multi-field developments, which will increase oil and gas production and revenue to the nation.

    Despite the strike embarked upon by NPDC workers, the private sector JV partners are not relenting in the transfer of the operatorship from NPDC. The Nation, however, spoke to some NPDC workers in confidence on the veracity of the claims by their independent JV partners.

    The NPDC workers said the company is being unjustly undermined adding that it has the capacity and personnel to manage the oil blocks. They listed the achievements the company has recorded in the past including some of the Shell’s divested assets especially OMLs 30 and 34.

    They said OML 34 is among the assets the NPDC acquired from SPDC in 2012 during its divestment programme.  The asset is predominantly a gas producing field with Utorogu non-associated gas (NAG) 1 and Ughelli East (UGHE) gas plants as the two running plants prior to the acquisition. Utorogu NAG 1 and UGHE gas plants have an installed capacity of 360 million standard cubic feet of gas per day (mmscf/d) and 90 mmscf/d) respectively.

    Prior to the takeover by NPDC, the former operator SPDC, was producing an average of 270 mmscf/d and 60mmscf/d) from NAG 1 and UGHE plants respectively. However with the recent improvement drive and overall service commitment by the management and staff of NPDC, production has steadily ramped up to 360mmscf/d and 70mmscf/d for NAG 1 and UGHE plants respectively. Currently NPDC produces 420mmscf/d from the two plants, they added.

    “It should be noted that this is a record that has never been achieved since the field came into existence in the 1970s. Production is still ramping up, having attained 430mmscf/d. In addition, plans are currently underway to further increase production from the two fields with the completion of Utorogu NAG 2 plant with an installed capacity of 150mmscf/d. NPDC’s focus is to ramp up, grow and sustain production from the three plants at 450mmscf/d by the third quarter of 2015 and this would make NPDC the second largest gas producer in Nigeria.

    “NPDC wishes to achieve this feat through the aggressive gas development campaign currently going-on in OML 34. This involves drilling of gas wells and completing/commissioning of the 150mmscf/d capacity NAG II plant in the short term. The NAG II plant is 96 per cent completed as at 4th June, 2015. The company’s medium term plan is to deliver about 600mmscf/d of gas to the national grid to support the Federal Government’s gas to power aspiration by the end of 2015. NPDC took over the operatorship of OML 34 from SPDC on Monday, 31st December, 2012.

    “Also at takeover from SPDC, daily oil production was 10,032 bpd and has since increased to 22,000 bpd. We have increased gas production in the asset from an average of 295mmscf/d in 2012 to 360mmscf/d for NAG 1 and 70mmscf/d for UGHE Plant, altogether producing 430mmscf/d making the asset the largest single supplier of gas to the country’s domestic market. We also successfully shut down and carried out improvement job for NAG 1and UGHE Plant to revamp work and boost production, successfully drilled and completed three wells to ramp up gas production.

    “NPDC took over operatorship of OML 30 from SPDC on 1st February, 2013. NPDC holds 55 per cent equity shares while its Joint Venture partner, Shoreline Natural Resources has the remaining 45 per cent participatory shares. The average daily net production as at takeover from SPDC was about 20,982 bpd. Today, production in OML 30 has increased to 60,000bpd under the operatorship of NPDC. The oil block’s flow-stations are all operational now.”

    The NPDC workers also stated the company achieved successful re-entry into Uzere community to open-up Uzere-West field with a locked-in potential of 14,000 bpd, rehabilitation of eight units of 5.2mmscf/d gas lift compressors and commissioning of new compressors to ensure adequate production uptime and increase in gas lift capacity. Other achievements include successful installations for proper hydrocarbon accounting; successful negotiation on Global Memorandum of Understanding (GMOU) with 112 communities of OML 30 together with Delta State Government to ensure uninterrupted production   took over Oleh Field Logistic Base (FLB) and deployed personnel to fully man all the flowstations and Ughelli production station.

    We also developed and secured approval for the AFELOROW (Afiesere, Olomoro-Oleh, Oroni and Oweh) fields development plan, and ensure proper management of the Trans Forcados Pipeline, the workers said. They recalled that the former NPDC Managing Director, Mr. Iyowuna Briggs, in an interview with energy correspondents during a facility tour, said taking over the operatorship of the oil fields came with enormous challenges, but the state-owned company was keeping the promise to ensure that the fields remained productive.

    Briggs said: “It is clear right from the beginning that the challenges faced by the NPDC are enormous, following the divestment of OMLs 34 and 40 on January 1, 2013, and OML 30 on February 1, 2013. For example, five days after the takeover of the operatorship of OML 30, the Oroni and Olomoro flow stations were forcefully shut down by the members of the Igbide and Olomoro communities respectively. “Oroni flow station was eventually shut down for over 50 days. This resulted in the deferment of production amounting to over 115,000 barrels. Other shutdowns of production in various fields had impeded the attainment of the company’s production target of 135,000 barrels of oil per day for the fiscal year 2013. Consequently, over the past one year, NPDC had witnessed a drastic drop in its daily oil production from about 135,000bpd to 115,000bpd leading to a substantial loss of revenues.”

    In spite of this, Briggs said the NPDC was producing between 65,000 and 70,000 barrels of oil per day before it took over the assets, and this had since gone up to 140,000bpd with a target to hit 160,000bpd by the end of 2014. He stated that NPDC would spend a minimum of $1.8billion per annum on capital expenditure over a two-year period. He explained that the company would drill 18 oil wells across its oil assets in 2014, stressing that it currently maintains an interest in 28 OMLs in the country.

    He said: “NPDC drilled less than 10 wells over a five-year period ended October 2012. However, we drilled about six to seven wells between then and 2013 and we are going to be drilling up to 18 wells in 2014.” Briggs said NPDC then had the capacity to produce 140,000 bpd adding that it had been delivering 410 million metric standard cubic feet of gas per day into the domestic gas.

     

     

     

     

  • Supreme Court bars Chevron, Seplat from selling disputed oil blocks

    Supreme Court bars Chevron, Seplat from selling disputed oil blocks

    The Supreme Court yesterday ordered Chevron not to take any step or action regarding the sale of the oil mining lease (OMLs) 52, OML 53 and OML 55 – to Seplat Petroleum Development Company pending the determination of an appeal by Britannia-U Nigeria Limited.

    Brittania-U Limited’s appeal is against an earlier ruling by the Appeal Court, Abuja, which vacated an order of interlocutory injunction by a High Court, restraining Chevron and Seplat from proceeding to conclude any deal on the two oil leases.

    A five-man bench, led by Justice Tanko Muhammad issued the order, directing parties in the case to maintain the status quo. He said: “No party is allowed to take any step that will affect the res (subject matter) of the appeal.”

    The court’s order was informed by the refusal of lawyers representing parties to give undertaking that their clients would not take steps that would affect the case.

    Appellant’s lawyer, Rickey Tarfa (SAN), had urged the court to order parties not to take further steps  on the subject of the case on realising that he would be unable to argue his application for mandatory injunction seeking to reverse steps taken by Chevron to sell the disputed oil bloc to Seplat.

    Tarfa reminded the court that it had, during last hearing date of March 24 this year, fixed yesterday, May 18, for hearing of his application for mandatory injunction.

    Seplat’s lawyer, Damian Dodo (SAN), though did not object to Tarfa’s position, but noted that the substantive appeal was ripe for hearing, urging the court to hear the main appeal rather than dissipating energy in first hearing an interlocutory application.

    Lawyer to Chevron Nigeria and BNP Paribas Securities Corp, Uche Nwokedi (SAN) and lawyer to Chevron U.S.A Inc, Hermant Patel argued in similar vein, following which the apex court ordered parties to maintain status quo pending the outcome of the appeal, which hearing it adjourned to October 6 this year.

    Crisis started when Chevron offered for sale OMLs 52, 53 and 55 and invited bids from firms. The sale of the assets became controversial after Chevron, in a bid to ensure transparency put the assets through a public bidding, failed to make a public announcement of a winner, a reserve bidder and unsuccessful bids.

    It, then, allegedly turned its back on the highest bidder, Brittania-U Nigeria Limited, and began to deal with Seplat behind the scene. Brittania-U went to court to contest Chevron’s action of not declaring it winner after it posted a $1.67 billion bid for the three assets, an amount later revised to $1.015 billion after both companies’ officials met in Houston, United States.

  • 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.

  • Seplat invests $391.6m in two oil blocks from Chevron

    Nigeria’s indigenous oil exploration and production company, Seplat Petroleum Development Company Plc, has acquired 40 per cent working interest, and another 56.25 per cent stake in two oil mining leases, (OML) 53 and 55  at a cost of $391.6 million.

    Seplat said it acqqured OML 53 located onshore Northeastern Niger Delta from Chevron Nigeria Limited, as well as  56.25 per cent of the share capital of Belema Oil Producing Limited, a Nigerian Special Purpose vehicle that has 40 per cent interest in OML 55, located in the swamp of South eastern Niger Delta, previously held by Chevron Nigeria Limited.

    The firm said in a statement yesterday, that with the acquisition, it’s effective working interest in OML 55 is 22.50 per cent, while the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60 per cent in the two assets.

    Seplat  said the up-front acquisition cost of OML 53 to Seplat, after adjustments, is $259.4 million, out of which $69 million was deposited in 2013 and the balance of $190.4 million was paid   at completion.

    It explained that the adjustments to the up-front acquisition cost include a deferred payment of $18.75 million contingent on oil prices averaging $90 per barrel (bbl) or above for the 12 consecutive months over the next five years.

    The firm said its estimate of  net recoverable hydrocarbon volumes attributable to its 40 per cent working interest, to be approximately 51 million barrels of oil and condensate, and 611 billion standard cubic feet (Bscf) of gas, totaling 151 million barrels of oil equivalent (MMboe).

    Seplat said following the development, it has been designated as Operator of OML 53 pursuant to the Joint Operating Model approved by the Minister of Petroleum Resources, adding that the consideration for the 22.50 per cent interest in OML 55 is $132.2 million after allowing for adjustments.

    The adjustments to the consideration include a deferred payment of $11.6 million net to Seplat contingent on oil prices averaging $90/bbl, or above for 12 consecutive months over the next five years.

    The company has also advanced $80 million credit to the other shareholders of Belemaoil to meet their share of investments and  associated costs with Belemaoil.

    In addition, discussions are underway to determine repayment terms for the initial deposit against the acquisition of $52.5 million that Belemaoil funded with bank debt.

    This amount may subsequently be added to the total amount loaned to Belemaoil by Seplat.

    Under the agreed terms, Seplat will recover the loaned amounts, together with an uplift premium of up to $20.6 million, and an annual interest of 10 per cent, from 80 per cent of the other shareholders’ oil lifting entitlements.

    Seplat’s estimates net recoverable hydrocarbon volumes attributable to its 22.50 per cent interest to be approximately 20million barrels of oil and condensate and 156 Bscf of gas (total 46 MMboe).

    The current gross production at OML 55 is approximately 8,000 bpd (1,800 bopd on a 22.50 per cent working interest basis). The deal is pursuant to the Joint Operating Model approved by the Minister of Petroleum Resources.

  • Group threatens showdown over oil blocks

    THE Niger Delta Indigenous Movement for Radical Change (NDIMRC) at the weekend threatened a showdown, following a report that 83 percent of oil blocks are owned by northerners.

    The group urged President Goodluck Jonathan and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, to revoke and re-allocate the oil blocks.

    A statement by the group’s President, Nelly Emma, Secretary John Sailor and Public Relations Officer Stanley Mukoro urged the President and the minister to address the issue with urgency.

    The group said the percentage of oil blocks owned by northerners was unacceptable to the people.

    It lamented that urgent steps must be taken by the President and the minister to investigatethe report.

    “The oil blocks should be revoked and reviewed or any other block to be given out from today should be given to the people from the region.

    “The owner of the resources must be respected and we may be forced to ask for total control of our resources.

    “We are set to control our God-given resources by ourselves and nobody will drill any oil in the Niger Delta, if this situation is allowed to continue.

    “We are demanding that the President revokes all oil blocks in the country.”

  • Revealed: Northerners own 80% of oil blocks

    Revealed: Northerners own 80% of oil blocks

    Supporters of the Petroleum Industry Bill (PIB) pushed their case further yesterday at the Senate, with startling facts on the sector.

    Senator Ita Enang (Akwa Ibom North East) described the opposition to the 10 per cent host community fund by mostly northern senators as “misplaced”.

    Enang, who is also the Chairman, Senate Committee on Rules and Business, said that those opposed to the fund should know that over 83 per cent of oil blocks are owned by northerners.

    But he did not give the number of oil blocks Nigeria has.

    Senate President David Mark, who seemed to have been shocked by what Enang said, said the Akwa Ibom lawmaker should not be distracted (some senators were grumbling) because he was making an important point.

    Mark asked Enang whether he could substantiate his claim.

    Enang promptly pulled out a document from his folder and reeled out oil blocs and their owners.

    He said he did not intend to divide the country but to guide those who wanted to contribute to the debate to be truly informed.

    He listed northerners who own oil blocks to include Alhaji Mai Deribe, Borno State and owner of Cavendish Petroleum, which operates OML 110 with an average of about N4billion monthly.

    He also listed Seplat/Platform Petroleum, operators of the ASUOKPU/UMUTU Marginal Field with Mallam (Prince) Sanusi Lamido, Kano , as a major shareholder and director.

    South Atlantic Petroleum Limited (SAPETRO) established by General T. Y. Danjuma, Taraba State , who is also chairman of Eni Nigeria Limited.

    SAPETRO partnered with Total Upstream Nigeria Limited (TUPNI) and Brasoil Oil Services Company Nigeria Limited to become operators of the OPL 246.

    AMNI International Petroleum and Development Company is owned by Alhaji (Colonel) Sani Bello of Kontangora , Niger State.

    “They are operators of OML 112 and OML 117,” he said.

    He said that a former Petroleum Minister and former OPEC Chairman, Rilwanu Lukman, another northerner manages AMNI oil blocks “with very key interest in the NNPC/Vitol trading deal.”

    He said that Oriental Energy Resources Limited, a company owned by Alhaji Indimi, runs three oil blocks – OML 115, the Oldwok field and the Ebok field.

    He said that Alhaji Aminu Dantata’s Express Petroleum and Gas Limited, operates OML 108.

    Enang said that OML 113 allocated to Yinka Folawiyo Petroleum Limited is owned by Alhaji W.I. Folawiyo. Alhaji Saleh Mohammed Gambo, North East Petroleum Limited, is the holder of the OPL 215 Licence.

    North East Petroleum was awarded blocs OPL 276 and OPL 283 and closing thereupon a Joint Venture Agreement with Centrica Resources Nigeria Limited and CCC Oil and Gas.

    He said that INTEL is owned by former Vice President Atiku, the late Gen. Shehu Musa Yar’Adua and Ado Bayero. It has substantial stakes in Nigeria ’s oil exploration industry both in Nigeria and Sao Tome and Principe .

    He said that Mike Adenuga’s Conoil is the oldest indigenous oil exploration company with six blocks. OPL 291 was awarded to Starcrest Energy Nigeria Limited, owned by Emeka Offor, which was sold to Addax Petroleum.

    Enang urged the Senate to cause the immediate revocation of all oil blocks licences and their redistribution, in accordance with the Federal Character Principle.

    He said: “My submission is that when you look at the distribution of those who own oil blocks and the amount of money that comes from the different oil blocks to the Federation Account and you see the owners of these oil blocks, you will agree with me that there is inequity in the distribution of oil blocks.

    “The oil is produced in the Niger Delta yet it is the people of the Northeast and the Northwest and a little of the Northcentral, almost nothing of the Southwest and the Southeast, that are the persons owning and controlling these oil blocks.

    “Almost nothing for the Southsouth, Niger Delta oil producing areas.

    “They are quarreling with the area that takes just 13 per cent when you are producing the entire 100 per cent, you give some to the Federation Account and they give only 13 per cent of what you give and, of course, it is whatever you declared that you have produced. It is actually produced by you.

    “I did not want to introduce something that is divisive.

    “It is not intended to divide the country, it is intended to say ‘look, let us be realistic’.

    “What some of the oil wells and the owners of the oil wells produce in a month and take as profit is sometimes more than what two or three states receive from the Federation Account.”

    Enang noted that “when a group of people are richer than a state and then it is produced by you, then there is so much opposition that even the people who suffer the effect of the oil production should not be give host communities’ fund; and we have explained that the host communities fund is not only for the oil producing; it is for any of the communities that hosts oil infrastructure, which includes oil pipelines, refineries, gas pipelines and anything that is capable of causing danger.”

    “If we had the host communities fund, the danger that we have been having in Arepo in Ogun State, the area would have benefited from the host communities fund.”

    Enag said that other areas, such as Kaduna and some other states, will benefit from it.

    He went on: “If you are producing and declaring only what you like and only the 10 per cent now being provided for the host communities and the 13 per cent which is after deducting everything, that cannot be in the interest of the country.

    “What I am asking now is that oil blocs in the whole country should be revoked and redistributed according to Federal Character Principle.

    “We are not saying that we in the Southsouth should have all or the Southeast should have all or the Southwest should have all.

    “In fact, if there are 18 oil blocs or 36 oil blocks, we don’t mind that you give us at least four, Northeast four, Southeast four, Northwest four.

    “At least, let there be equity, but then there should be the principle of who owns it and then you give us more.

    “But at this time, we don’t even have it. The 13 per cent is what we are even suffering to sustain.”

    Senator Olufemi Lanlehin (Oyo South) praised the maturity of Senators in considering the bill.

    He urged the Senate to look at the “absolute and sweeping powers” granted the President in Section 191 of the bill.

    The Section, he said, gives the President absolute and unqualified powers to grant petroleum licences to whoever he pleases.

    Lanlehin prayed the Senate to use the opportunity of the bill to design a template that would grow the economy.

    Senator Adegbenga Kaka (Ogun East) said he was supporting the bill with mixed feelings.

    He noted that the trend of the debate seemed to indicate that senators were more concerned about how to share the cake and not how to bake it.

    Kaka said the power granted the minister of petroleum in the bill should be reconsidered “so that we don’t give too much power to the minister.”

    The lawmaker who insisted that the bill should be finetuned, said certain percentage of earnings should be set aside to fix electricity, agriculture and other infrastructure.

    Senator Mohammed Goje (Gombe Central) said before the debate, he was completely against the bill.

    He said the trend of the debate showed that the Senate was poised to do justice to the bill by removing offensive sections.

    To him, it seems a consensus is being built around certain sections of the bill.

    He noted that most contributors agreed that the power of the minister should be reduced, such that the minister will just be like any other minister.

    Goje said: “We should not create a super minister.”

    He said that definite provision should be made for frontier exploration, especially adequate funding.

    He opposed 10 per cent host community fund.

    Senator Barnabas Gemade (Benue North East) described the bill as very important and long overdue.

    Gemade said an adage says: “Wherever you find oil, corruption creeps in and wherever you find diamond war emerges.”

    He said the adage had been proved to be true.

    Gemade said the bill contained good and bad provisions. He listed the good sections to include development of the gas sector, increase in promotion of local content and the unbundling of the Nigeria National Petroleum Corporation (NNPC).

    The bad sections, he said, include the minister’s economic power.

    On the host community fund, Gemade said efforts should be made to ensure that it does not degenerate to very poor management of resources as it is, according to him, in the Niger Delta Development Commission, 13 per cent derivation and others.

    On the frontier exploration, he said more effort should be geared towards discovering oil in other places.

    Senator Akin Odunsi ( Ogun West) described the bill as the most important legislation before the National Assembly.

    Odunsi noted that the bill becomes even more important when it is recognised that the country runs a mono economy based on oil.

    The lawmaker cautioned against undue sentiment in the consideration of the bill.

    He agreed that the bill was not perfect but posited that it could be fine-tuned to engender development.

    Senator Abdulahi Adamu (Nasarawa West) said he was giving the bill “a reserved support”.

    Adamu expressed worry about the absence of transparency and accountability in the oil sector.

    He said the bill appears to contradict the Constitution (as amended), especially when it is recognised that oil and gas as well as other minerals are in the Exclusive List and under the control of the Federal Government.

    The lawmaker cautioned about the unbundling of the NNPC in order not to put up the corporation for outright purchase by wealthy Nigerians.

    On the host community fund, Adamu said the provision would create the fourth tier of government.

    To Senator Gbenga Ashafa (Lagos East), the bill will be counter productive in its present form. He demanded the definition of host community.

    Ashafa said pipelines burst at times not because of vandalisation but because of the integrity of the pipes.

    Senator Ayogu Eze said his support for the bill stemmed from the realization that the oil sector should be reformed.

    Eze highlighted issues of details in the bill, which, he said, should be addressed at the committee and public hearing levels.

    It was obvious that most northern Senators were not comfortable with what Enang said.