The Nation Newspaper

Tag: OMLs

  • Chevron to divest from OMLs 86, 88

    Chevron Nigeria Limited has started the process of divesting its 40 per cent interests in oil mining leases (OMLs) 86 and 88, located in shallow waters of the Niger Delta Basin.

    The American oil giant, it was learnt, has invited some Nigerian oil and gas firms to offer bids for its stakes in the oil blocks. OML 86 contains the Apoi fields; the largest being North Apoi with producing capacity of 3,500 barrels of oil per day (bopd).

    According to Africa Oil+Gas Report, OML 86 also holds Funiwa with 1,300 bopd, Sengana and Okubie fields. One recent discovery – Buko, straddles Shell Nigeria operated oil prospecting licence (OPL) 286 and is either on trend with, or even on the same structure as the HB field in OPL 286. OML 88 holds the Pennington and the Middleton fields, as well as the undeveloped condensate discovery, Chioma field, it added.

    On completion of the sale, Chevron would have sold off all the legacy shallow water assets it inherited when it purchased Texaco in 1999. Between 2013 and 2015, Chevron sold its stakes in five acreages, two of them, OMLs 83 and 85, being former Texaco Nigeria assets. Chevron’s largest producing asset in Nigeria, Agbami, is from that turn- of –the- century merger with Texaco; this deepwater field alone produces 250,000 bopd, about half of Chevron’s total operated crude oil production in Nigeria.

    Seplat Petroleum Development Company Plc recently acquired 40 per cent working interest in oil mining lease (OML) 53, onshore north eastern Niger Delta from Chevron Nigeria Limited. Seplat also acquired 56.25 per cent of the share capital of Belemaoil 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.

  • Supreme Court wants status quo maintained over OMLs sales

    The Supreme Court has asked parties in a suit involving Brittania-U Nigeria Limited, Chevron/Seplat and others to maintain status quo and not do anything that might overreach the case.

    Justice John Fabiyi, who sat on the appeal, also reminded counsel representing the parties that it was their duty to advise their clients on the need to respect the court’s authority.

    The case is in respect of the acquisition of Chevron’s interest in oil mining leases (OMLS) 52, 53 and 55.

    Brittania-U’s counsel, Chief Rickey Tarfa (SAN) sought to move a motion for interlocutory injunction pending the appeal’s hearing.

    Seplat’s lawyer Damian Dodo (SAN) informed the court that the appeal itself was ripe for hearing, but that they filed their respondent’s brief out of time.

    The court expressed its willingness to hear the substantive appeal.

    The Federal High Court in Lagos had granted interim injunction against Chevron and others, restraining them from selling to Seplat Chevron’s 40 percent participation interest in OMLS 52, 53  and 55.

    Brittania-U alleged that it won in a competitive bid for the OMLs conducted by Chevron’s investment bankers-BNP Paribas, in 2013 at a price of USD $1.015 billion.

    Seplat appealed to the Court of Appeal in Lagos against the refusal by the Federal High Court to vacate the interim injunction, contending that the jurisdiction of the court to hear the case was being challenged by the respondent.

    The Court of Appeal allowed the appeal in June 2014, reasoning that the life of the interim order could not be extended, while the jurisdiction of the Federal High Court was being challenged.

    Dissatisfied, Brittania-U appealed to the Supreme Court, seeking the restoration of the injunction granted by the Federal High Court, which was to last till the motion for the interlocutory injunction is determined.

    It was learnt at the weekend that officials of both Chevron and Seplat landed in Port Harcourt, in what was ostensibly believed to be a mission to inspect two of Chevron’s assets that the multinational put up for sale in 2013, the matter of which is now subject of litigation.

    The inspection trip came barely a day after the Supreme Court, sitting for the first time over an appeal filed before it, said it was ready to proceed with the main suit and admonished parties to the suit to stay any action on the asset sale and not to do anything that would overreach the case.

  • Seven Energy eyes 2.3 tcf of gas

    Seven Energy is targeting 2.3 trillion cubic feet of gas from oil mining leases (OMLs ) 3, 38 and 41 in Benin, the Edo State capital, its Chief Executive Officer, Phillip Ihenacho, has said.

    Seven Energy, an indigenous oil and gas exploration and development firm, and the National Petroleum Development Corporation (NPDC) entered a Strategic Alliance Agreement (SAA) that saw it holding 55 per cent interest in the oil fields, while Seplat Petroleum Development Company, the operator of the assets hold 45 per cent interest.

    This is coming as Seven Energy and Frontier Oil Company partnered to build  the Uquo gas plant, which boasts of 650 billion cubic feet of gas reserves. The facility financed with N90billion sourced from various financial institutions, was inaugurated by President Goodluck Jonathan.

    Ihenacho told The Nation that the average production expected from the fields is  51,600 barrels of oil per day, adding that the gas potential are immense.

    He said: “OMLs, 4, 38, and 41 are part of Seven Energy’s upstream businesses, and the company is expecting 2.3 trillion cubic feet of gas from the fields. The potential in the fields are immense, and we hope to leverage on it to increase supply of gas to users across the value chain for growth. Power generation, fertiliser, and other companies that use natural gas for production will benefit whenever works are completed on the fields. We are working with Seplat in Benin on the issue and we believe that there would be substantial gas investment in the fields. ‘’

    According to him, the country can meet its gas to power needs when investment in gas infrastructure is galvanised.

    “Improving investment in gas pipeline construction will help in transporting the product from the plants to the power and other companies that need it for production.  That has been a major obstacle to the utilisation of gas in the country,” he said.

  • NPDC votes $3.6b for capital expenditure

    NPDC votes $3.6b for capital expenditure

    The Nigerian Petroleum Development Company (NPDC), the upstream subsidiary of the Nigerian National Petroleum Corporation (NNPC), has set aside $3.6billion for its capital expenditure for the year and 2015.

    The firm set 300,000 barrels per day (bpd) and 900million standard cubic feet of gas per day (mscf/d) as its oil and gas production targets over the next four years.

    Its Managing Director, Victor Briggs, who unveiled the company’s programmes as well as the state of the divested assets from Shell at the weekend, said, the firm produces 140 barrels per day (bpd) and expects to increase it to 160,000bpd by end of this year while it delivers 410 mmscf/d and plans to raise it to 600mmscf/d by end of the year.

    He said from the operational projections, the expenditure from 2016 would decrease by 50 per cent from the budget of $1.8 billion for the year and 2015 to between $700 million and $800 million despite projected increases in oil and gas outputs.

    According to him, many investments are going into the newly acquired assets from Shell to optimise production and connect the well to where crude can be piped to the export terminals through the flow lines, flow stations and trunk lines.

    He explained the extent of works done on oil mining licences (OMLs) 26 4340 42 34, current levels of production, plans and timelines to increase their output.

    He said: “The company started in 1988 with few assets. At that time the company was producing less than 1000bpd. NPDC then was very active in exploration and production. Most of the fields that are keeping Total were discovered by NPDC as well as some of those of Conoil but because the NPDC didn’t have the funds to continue with the development phase of these assets where the bulk of the money was needed, they were taken away and given to other companies to develop.

    “We started with OMLs 65 and III but today NPDC is involved in several OMLs, about 28, with some in deep offshore where we are not operators but equity partners. One is shallow offshore (OML119), which we are operating, some in swamp where we have OMLs 40 and 42, which we also operate. The remaining OMLs are on land. Currently, we are concentrating on swamp, land and offshore, which we have been doing over a long period.

    “Today, NPDC has the capacity to produce about 140,000bpd. Production varies each day depending on absence of any issue. If there is any breach on our pipeline or flow line, the safe thing to do is to shut down. The main impact on our production is really when there is a breach on a trunk line, which is a big pipe which carries production from different companies’ pipe to the terminal. The essence of the trunk line is that it is cost-effective for the oil companies. Therefore, if there is a breach on such line, all the companies using it will be forced to shut down.”