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Crude Oil Theft, An Existential Threat – Shell

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Crude oil theft in Nigeria poses an existential threat to the country’s oil industry, according to the Local Head of Shell, Osagie Okubor, who stated this at a recent energy conference.
This, Okunbor said,  has resulted in the shutdown of two of Shell’s major pipelines.
Okunbor, the Managing Director and Country Chair for Shell Petroleum Development Company (SPDC) of Nigeria Limited and Shell Companies in Nigeria, said oil theft was one of the reasons that Nigeria could not meet its OPEC quota of 1.8 million barrels a day.
“Two of our most important pipelines in this country today are shut down with hundreds of thousands of barrels a day shut-in,” Okunbor said without giving details.
He continued that “it is a fact that the issue of theft, whether as a standalone, or as the basis for us to meet our Organization of Petroleum Exporting Countries (OPEC) quota, is an existential threat for this industry”.
According to the petroleum regulator last week, Nigeria lost $1 billion in revenue during the first quarter of this year due to oil theft.
Shell has operated for decades in Nigeria and together with other oil majors, is selling onshore assets to focus on deep water drilling.
Okunbor said local companies which won licences to develop marginal fields would face challenges to transport their crude once they start production.
Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.
Oil theft has resulted in the declaration of force majeure at Bonny Oil & Gas Terminal, a pipeline transporting crude from the oil-rich Niger Delta to export vessels, among others, creating a hostile environment and disincentive to investors.

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NCDMB Lauds TotalEnergies On Ikike’s First Oil

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The Nigerian Content Development and Monitoring Board (NCDMB) has lauded management of TotalEnergies EP Nigeria Limited for achieving first oil from the Ikike offshore project.
Recall that The Tide source reported that TotalEnergies’ Ikike project which had its investment decision in 2019 had achieved first oil last month, without any lost time injury or incident and with significant local content milestones.
Ikike, located within OML99, is 15km North of Amenam and 20km offshore, will increase TotalEnergies’ crude oil production within the oil block.
Commending the French multinational, the Executive Secretary of NCDMB, EngrSimbiWabote, noted that TotalEnergies has demonstrated true leadership of Nigerian Content development by continuing to invest in Nigeria and achieving great strides in Nigerian Content when other operators were divesting from fields in Nigeria.
Wabote spoke recently at the ground-breaking ceremony of human capacity development projects for Government Technical College in Port Harcourt, Rivers State.
“Let me at this juncture thank the management of Total Energies for demonstrating faith and commitment to the betterment of Nigeria. Let me also congratulate the management of Total for achieving the first oil of the Ikike project.
“But Total Energies has demonstrated that indeed they are a true leader of Nigerian Content Development, and when many other operators are divesting from fields in Nigeria, Total has continued to invest in Nigeria and achieving great strides in Nigerian Content.”
Wabote, represented by the Director, Planning, Research and Statistics, Mr. Patrick Obah, said the Board had developed a guideline that allocates 60 percent of the Human Capacity Development budget on major oil and gas projects to the strengthening of training institutions.
Under the guideline, according to the NCDMB boss, a large chunk of the HCD commitments on projects will be channeled towards the upgrade and provision of facilities in institutions that train relevant workforce for the oil and gas industry.
The remaining percentages of the HCD budget, he said, will be applied to other human capacity programmes, stressing that the Board has placed emphasis on human capital development.

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NNPC Renews Oil Production Contracts For Five Deepwater Blocks

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The Nigeria National Petroleum Corporation Limited (NNPC), has renewed oil Production Sharing Contracts (PSCs) with International Oil Companies (IOCs) and local firms for five deep water blocks, which could produce up to 10 billion barrels over the next 20 years.
The renewal ceremony on Friday was attended by officials of the NNPC and the affected oil companies.
Bala Wunti, head of the National Petroleum Investment Management Services (NAPIMS), an NNPC subsidiary, said the renewed agreement should lead to the production of 10 billion barrels of oil.
NNPC jointly and separately owns the Oil Mining Leases (OMLs) 128, 130, 132, 133, 138 blocks with oil majors Shell, Equinox, Chevron, ExxonMobil, China’s Sinopec and Nigerian firm, South Atlantic Petroleum.
Nigeria, a member of the Organization of Petroleum Exporting Countries (OPEC) is heavily reliant on oil for its revenues, but has been unable to get the full benefit of a surge in energy prices this year as years of underinvestment have prevented it from meeting its OPEC output targets.
MeleKyari, Managing Director/CEO, NNPC Ltd, said investment had been slowed by disputes over revenues and taxes that stemmed from previous contracts.
Protracted negotiations had reduced “all ambiguities” to a minimum for the new 20-year contracts and any disputes related to past contracts had been settled amicably”, he said.
Under the new contracts, the NNPC will work alongside local and international energy companies.
The international companies attended Friday’s signing ceremony but made no comment.
The most common partnerships used by Nigeria are joint ventures and production-sharing agreements, which were first introduced in 1993 and have cumulatively accounted for about 40% of Nigeria’s oil production, NNPC said.
The companies pay the government in the form of royalties and tax as well as providing the state with oil and gas.

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‘Seplat’s $1.28bn ExxonMobil Assets Acquisition, Contempt Of Court’

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The Akwa Ibom State Government says President MuhammaduBuhari’s consent for Seplat Energy to acquire shallow water assets of Mobil Producing Nigeria Unlimited (the Nigerian arm of ExxonMobil Corporation) amounts to contempt of court.
Recall that President Buhari on Monday granted consent to the acquisition of Exxon Mobil’s Nigerian unit by Seplat Energy in a $1.28 billion deal announced in February.
But, the AkwaIbom State government said the transaction was subject to restraining orders of injunction of the High Court of Akwa Ibom State, sitting in Uyo in Suits No. HEK/56/2018, between Attorney General of Akwa Ibom State V. Mobil Producing Nigeria Unlimited and HU/209/2020, Mobil Producing Nigeria Unlimited V. Governor of Akwa Ibom State and three others.
The Attorney General and Commissioner for Justice in Akwa Ibom State, Uko Essien Udom, explained that ExxonMobil, Seplat Energy, NNPC Ltd and the Federal Government were all aware of the court order, as they were all served.
Udom expressed regret that President Buhari’s interference with the judicial process of a court of competent jurisdiction was sad and ill-advised, and was contemptuous of the High Court of Akwa Ibom State.
He warned that anyone who deals with the shares or assets of Mobil Producing Nigeria Unlimited during the subsistence of the said orders and in the pendency of the above suits, was doing so at his or her own risk.
“ExxonMobil, Seplat Energy, NNPC Ltd and the Federal Government of Nigeria, all have actual knowledge of the court orders, having been duly served with the orders and/or various newspaper publications of same.
“This executive interference with the judicial process of a court of competent jurisdiction is sad and ill-advised, and is contemptuous of the High Court of Akwa Ibom State.
“The State urges the Nigerian Upstream Petroleum Regulatory Commission to take the above facts into consideration as it considers its position in this matter.
“Take notice, therefore, that anyone who deals with the shares or assets of Mobil Producing Nigeria Unlimited during the subsistence of the said orders and in the pendency of the above suits does so at their own risk. Let the buyer beware,” he said.

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