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Global Energy Advisory Deals, Mergers And Acquisitions

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A United States Appeals court has dismissed the lawsuit Canadian mine Crystallex brought against Venezuela’s PDVSA, seeking to take control over its U.S. business, Citgo, as compensation for the nationalisation of assets under the late Hugo Chavez. A World Bank tribunal had awarded Crystallex $1.2 billion plus interest in 2016 but Venezuela has only made part of the payments. Contrary to Crystallex’s hopes, the court this time sided with the Venezuelan attorneys, who argued PDVSA and Citgo are entities separate from the country, which was the defendant in the original lawsuit.
Russian Alrosa, the world’s top producer of rough diamonds has put up for sale gas assets in the Yamal-Nenets region, in northwestern Siberia, which Novatek plans to bid for next month. The starting price of the package is $520 million. In December, Novatek launched the first shipment of LNG from its Arctic LNG project, also in Yamal-Nenets.
Shell has finalized the first phase of the divestment of its LPG marketing business in Hong Kong and Macau for $150 million. The buyer of the company is DCC, the international sales and marketing group. The supermajor will remain operator of the Hong Kong LPG plant. Its sale will be completed in the second phase of the divestment plan.
Suncor and Teck Resources have settled a commercial dispute over the Fort Hills oil sands project by raising their stakes in it. Suncor will now hold 53.06% in Fort Hills, up from 50.8%, and Teck will have a 20.89% interest, up from 20%. The two companies are partners with Total in the Fort Hills project.
Tenders, Auctions & Contracts
Tullow Oil’s Ghana unit has awarded Danish Maersk Drilling a four-year contract for the Maersk Venturer drillship, to be deployed at the Jubilee and TEN fields offshore Ghana. The two are among the most promising new fields discovered in Africa in the last few years
Discovery & Development
Spain’s Repsol has begun commercial production from the Sagari natural gas field in Peru. The field, according to Repsol, will produce 5.6 million cum of gas daily, which will represent a quarter of Peru’s natural gas demand. The launch of production at the field will also raise the overall output from Block 57, in which it is located, by a fourth. The Sagari field holds an estimated at 1-2 trillion cu ft of gas.
Transneft has completed the expansion of the East Siberia-Pacific Ocean crude oil pipeline, doubling the export capacity for China to 30 million tons of crude annually or an average 600,000 barrels daily. China has become the world’s top crude oil importer and Russia last year became its largest supplier, overtaking Saudi Arabia.
TransCanada has commissioned the construction of the Leach Xpress natural gas pipeline that will run between West Virginia and Ohio. The $1.6-billion project will have a capacity to transport some 1.5 billion cubic feet of gas daily from the Appalachian fields to the national market. In addition to this news, TransCanada also said this week the FERC had greenlit another two gas projects: the Mountaneer Xpress and the Gulf Xpress. The two will cost a combined $3.2 billion.
The U.S. administration has plans to open up more Arctic and Atlantic waters for oil and gas exploration, cancelling the five-year leasing programme approved by the Obama administration. This could offer explorers a lot more drilling opportunities, although it remains doubtful to what extent they would be willing to exploit the opportunity in the face of high offshore project development costs and strong environmental opposition.
Company News
Petrobras has agreed to cough up almost $3 billion to put an end to shareholder lawsuit it got hit with because of its involvement in what has turned out to be a major corruption scandal that toppled former Brazil president Dilma Roussef. As part of the investigation into the corruption scheme, senior Petrobras executives were implicated of receiving bribes in exchange for inflating the prices for services performed by companies working for Petrobras.
Source: Oilprice Report For 5/01/2018

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BUA Group, A’Ibom Sign MoU For Refinery’s Access Road

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Bua Group has signed a memorandum of understanding, (MoU), with Akwa Ibom State Government, and the host communities in Ibeno Local Government Area, for the construction of access road to the proposed Bua Refinery and Petrochemical plant site in Ibeno, last week.
Akwa Ibom State Commissioner for Power and Petroleum Development, Dr. John Etim, who presided over the signing of the MoU, applauded BUA for their commitment to the project, prompt documentation and the preparation of the site towards the construction of the refinery.
Etim said that the refinery project will bridge the gap between host communities and Akwa Ibom State, thereby bringing about more developments in the oil and gas sector of the State.
The Commissioner called on all parties concerned to be committed to the terms of agreement and to ensure that peace dominates their relationship, while appealing to the host communities to protect the facilities which is now in their custody
“The refinery and petrochemical project is in line with the Governor’s vision to industrialise the State, develop local capacity in key industries where value can be added and raw materials sourced locally.”
Speaking shortly after the MoU signing, the Chairman of Ibeno local government, Williams Mkpa, expressed delight over the development, describing it as a giant stride in the industrialisation vision of the Akwa Ibom State Government.
The paramount ruler of the area, Owong Effiong Archianga, assured the company of his people’s unalloyed support and cooperation to see to the actualisation of the project.

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CSO Urges Oil Communities To Challenge PIA In Court

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A Civil Society Organisation, Policy Alert, has faulted President Muhammadu Buhari’s signing of the Petroleum Industry Act 2021, urging communities to test the provisions of the Act before the courts.
President Buhari had signed the erstwhile Petroleum Industry Bill, PIB, into law last Monday amidst protests from community groups and many other stakeholders that the Bill do not adequately cover the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholders Engagement Officer, Mrs. Nneka Luke-Ndumere, Policy Alert, which is working for economic and ecological justice, described the presidential assent to the PIB as “grossly insensitive and problematic.
“It is sad that the bill has been assented to in the most controversial manner despite its many obvious flaws and its rejection by many stakeholders,” the statement read.
It added: “For example, the controversial provision for a direct payment of 30 percent profit oil and profit gas to the Frontier Exploration Fund potentially shortchanges the oil producing states and local governments of some of its thirteen percent derivation as it bypasses the requirement in section 162 (2) of the 1999 Constitution (as amended) which provides that all revenues be channeled through the federation account.
“This is most unfair, viewed against the ceding of only three percent of previous years’ operating expenses to the Host Communities Development Trust Fund and the punitive provision to charge costs of any damage to facilities against the community’s Fund, among other obnoxious provisions.
“That Mr. President has gone ahead to give assent to these vexing provisions only reinforces the politics of exclusion and expropriation that has for long characterised the relationship between the Nigerian state and the oil producing communities.
“We are also concerned that the host communities’ component of the legislation flies in the face of one of its stated objectives to address tensions between host communities and companies as it has all the ingredients for escalating rather than abating such conflicts.
“At a time when fossil fuel investments are being deprioritised elsewhere as a result of the global energy transition, it is unfortunate that this Act failed to provide a bridge between the current era of fossil fuel dependency and the low-carbon energy future that Nigeria aspires to within the framework of government’s much vaunted commitments under the Paris Agreement.”
The statement also said: “Granted, the new legal framework introduces some predictability and clarity to the governance and fiscal arrangements in the oil and gas industry. We are also not oblivious to certain clauses that respond to some of our earlier demands, such as those providing that the Board of Trustees of the Host Communities Development Trust will now be determined in consultation with the host communities, with  membership drawn from community members. But that is just as far as it goes.
“As a tool for improved benefit sharing to host communities, the Act falls flat on its face. It actually ridicules the exertions of the host communities and advocacy groups that have clamoured over the years for a law that yields some space for participation, direct socio-economic benefits and environmental remediation for oil-rich communities.
“The theatre of action will now have to move to the communities and the courts of law. As implementation of the Act gets underway over the next 12 months, we urge host communities and civil society groups to begin to seek interpretation of some of its more controversial provisions before the courts.”

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Kyari Tasks Greenfield Refinery On Fuel Importation

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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has charged members of the Board of the NNPC Greenfield Refinery Limited (NGRL), to explore all available options to bring an end to the current challenge of petroleum products importation.
Mallam Kyari gave the charge Thursday while inaugurating the Board of the newly incorporated subsidiary of the Corporation, NNPC Greenfield Refinery Limited (NGRL), at the NNPC Towers, Abuja.
The NNPC Greenfield Refinery Limited is a subsidiary of the Corporation set up in December 2020 with a mandate to oversee the establishment and operation of new refineries.
The GMD, who is also the Chairman of the NGRL Board, challenged members of the Board to focus on profitability in order to remain afloat and avoid liquidation.
“As a business, this is a big opportunity for us and this company’s balance sheet must change positively. Going forward, with the Petroleum Industry Act (PIA), I can tell you that if you continue to post negative for three years, you are out. So, there is really no excuse”, Mallam Kyari stated.
He urged the Board and Management Team of the new company to set up a proper structure with the required skills, technology and financing to drive the company’s operations, adding that he was optimistic that the company would be able to achieve its mandate.
“Our company must grow and we can’t do well except we are able to process our production whether it is the liquid or gas. If we don’t monetise it then we have done nothing. This is really a new chapter and we are committed to making it work,” he said.
The NNPC helmsman stated that all the Corporation’s initiatives in the areas of new refineries, condensate refineries and equity acquisition in credible private refineries were geared towards ensuring energy security for the country.
In his remarks, the Alternate Chairman of the Board and Group Executive Director, Refinery and Petrochemicals, Engr. Mustapha Yakubu, declared that the operations of the company would be guided by the principles of cost effectiveness in line with the new Petroleum Industry Act (PIA), noting that profitability would be the key focus.
Speaking in similar vein, the Group General Manager, Greenfield Refineries and Project Division (GRPD) and Managing Director of the NGRL, Engr. Bege Talson, disclosed that the Division was working with third party investors to establish greenfield, modular and condensate refineries with a combined capacity of 250,000barrels per stream day (bpsd).

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