Nigeria To Renegotiate PSC Contracts With Oil Majors

The NNPC has stated plans to review and renegotiate its production sharing contracts (PSC) with major multinational oil companies in Nigeria, as part of efforts by the current administration to reform and clean up the sector which is the major source of income to the nation’s economy, Business Day Reports.

Dr. Ibe Kachikwu, the new boss of the nation’s owned oil company (NNPC), has said in a statement that “we intend to begin the process of the renegotiation of the PSCs to see what value chain and improvements we can have from these contracts”.

In order to extract as much benefits as possible for the nation’s economy, the NNPC has disclosed that in the weeks and months ahead, that it would overhaul its contracts with companies like American majors; ExxonMobil and Chevron, Dutch major; Shell and Italian major; Eni.

Nigerian economy gets about 70 per cent of government revenues from oil, has been hit hard by the plunge in global oil prices and has recently spent billions trying to defend its currency, which the market believes needs to be devalued for the third time in less than a year.

The need for the PSC review is needful “Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,’’ said Kachikwu, speaking while in France on a state visit with Buhari.

Nigeria Increases Crude Production Volume by 70,400 bopd in August

Nigeria been the largest producer of oil in the African Continent, experienced an increase in her crude oil output which increased by about 70,400 barrels per day (bpd) to 1,857,000bpd in August 2015, from its July output of 1,787,000bpd going by the current figures released by OPEC in its latest monthly oil market report, Business Day Reports.

The August 2015 records, in comparison to the output of August 2014, which stood at 2,008,000bpd shows a massive drop of 151,000bpd. Despite the challenges in the global oil market, Nigeria still maintained the record as Africa’s largest oil producer in August, with Angola at 1.735 million bpd ranking second and Algeria ranked third with an output of 1.109 million.

Total recorded OPEC Crude oil production in August averaged 31.54 million bopd which showed an increase of 99,000bpd over the previous month. The increased volume reflects higher output from Nigeria, Saudi Arabia and Kuwait. “Crude oil output increased mostly from Nigeria, Saudi Arabia and Kuwait, while production in Iraq and Angola showed the largest drop,” the report said.

Global oil supply decreased by 53,000bpd to average 94,620bpd in August 2015, compared with the previous month. This decline was due to the drop in non-OPEC supply. OPEC said it expected non-member supplies to grow by 880,000 barrels a day, down by 72,000 barrels a day from last month’s report, because of “lower-than-expected output” from the United States.

Early Start-Up Experienced By Erha North Phase 2

The Erha North Phase 2 Project, a deepwater subsea development located 60 miles offshore four miles north of the Erha field, in 3,300 feet of water saw its oil flow ahead of schedule. The field been operated by Esso Exploration and Production Nigeria, a local unit of American Oil Giant, ExxonMobil, as reported by Petroleum Africa.

The Erha North Phase 2 project includes seven wells from three drill centers tied back to the existing Erha North FPSO, reducing additional infrastructure requirements.

The project is estimated to develop an additional 165 million barrels from the currently producing Erha North field. Peak production from the expansion is currently estimated at 65,000 bpd of crude and will increase total Erha North field production to approximately 90,000 bpd.

Neil .W. Duffin, president of ExxonMobil Development Company, said that “executing successful projects such as Erha North Phase 2 ahead of schedule and under budget results from ExxonMobil’s disciplined project management approach and expertise”.

“We are able to create additional shareholder value by optimizing existing infrastructure, which reduces capital spending requirements and improves capital efficiency”, he further added.

 

Strong performance from Nigerian contractors, which accounted for more than $2 billion of project investment for goods and services, including subsea equipment, facilities and offshore installation supported the ahead of schedule start up. “These contracts are bringing direct and indirect benefits to the Nigerian economy through project spending and employment, consistent with project objectives” Duffin disclosed.  

DPR Grants Green Energy License for Modular Nigerian Refinery

Otakikpo Marginal Field operator; Green Energy International Limited recently disclosed that it has obtained a license from the Nigeria’s National Electricity Regulatory Commission (NERC), for a 10 MW captive power. Also the company was granted a license for modular refinery to produce diesel and other refined products by the Department of Petroleum Resources (DPR), according to reports by Petroleum Africa.

Although the company didn’t go into further details regarding the modular refinery, but in a statement by the technical director of the company, Bunu Alibe, he said that it will accelerate the work program to put in place necessary infrastructure and processes to continue full development and eventual production from the field in the near future. 

In the coming months the company will install the Extended Production Facility (EPF)  and construct a 5 km undersea pipeline to enable produced crude from the Otakikpo Field to be evacuated via a shuttle tanker.

Alibe also disclosed that some level of progress has been made concerning the power plant as work towards the installation of the power plant and other related gas utilization projects has reached an advanced stage.

GEIL said the processed gas would be utilized for power generation in the communities surrounding the field and excess sold to the Port Harcourt Distribution Company (Disco) in addition to LPG extraction and bottling facility to produce and distribute domestic cooking gas.

Accugas Supports Mini Power Generation With CNG

With the intention of encouraging power generation among small business operators, Accugas has begun to build capacity for such operators, providing them with opportunities to generate their own power. This move is been made, by creating a sustainable and cost effective alternative for them using the compressed natural gas (CNG) to power small generating     plants, Leadership reports.

Accugas, Seven Energy’s wholly owned midstream business, through its managing director, Stephen Tierney while speaking in an interview explained that switching to the CNG takes SMEs’ cost down significantly as gas is cheaper than liquid fuels. 

Tierney also highlighted another major advantage of the CNG to diesel fuel which is its environmental benefit. The CNG is much cleaner than liquid fuels. Typically, a 95 per cent reduction in carbon monoxide is expected if your business changes from diesel usage to gas. In addition, for every diesel truck or tanker you take off the road, there is a secondary impact; you are reducing traffic and pollution from that traffic,” he explained.

In using CNG for power generation, Tierney stated that “the CNG has a limited role to play in power generation. For a very small generation plant with lots of private industrial users, it would make sense to truck the CNG to the base of operations and generate power for their own use or cluster or geographic area.