ODIRI & SONS OIL AND GAS LIMITED

27/09/2019

NNPC signs agreement with NAOC on four OMLs

The Nigerian National Petroleum Corporation has signed a novation agreement with Nigerian Agip Oil Company on Oil Mining lease 60,61,62 and 63.

Nigerian Agip Oil Company Limited operates in the Niger Delta, under a joint venture arrangement with NNPC (60 per cent), NAOC (20 per cent), and Oando (20 per cent),

The Group Managing Director of the NNPC, Mele Kyari said at the signing agreement in Abuja, on Wednesday that the agreement will strengthen relationship with its partners.

A novation agreement transfers the contractual obligations of one party to a third party or replaces a contractual obligation with another one. All parties involved in this type of contract must consent to the changes.

He said that by the agreement the NNPC had transferred its stake to its subsidiary, the Nigeria Petroleum Development Company.

“The federation divested its interests in the NAOC/NNPC joint venture and that means we transfer those interests to Nigerian Petroleum Development Company.

The meaning of that is to grow NPDC to become a medium size upstream company that the federation and the NNPC will be proud of,’’ said Kyari.

He added that part of the requirement for the agreement was to have the divestment authorized by the Minister of Petroleum Resources adding that a novation agreement was needed to do so.

He said that the corporation had issues of lack of assurance that it could deliver on its responsibilities to its partners.

He noted that the signing of agreement was a clear sign to convince the partners that NPDC would deliver on its responsibilities.

He assured that the corporation would continue to support efforts that would help to grow the sector.

“Today, we have given them all the comfort and condition precedent for them to be convinced that NPDC will deliver.

That is why our partners, NAOC and OANDO have agreed to sign novation agreement which will open a new chapter of business for NPDC and our partners,’’ he added.

This, he noted would expand the frontier of reserves and production for Nigeria and the companies.

25/03/2019

The Nigerian National Petroleum Corporation (NNPC) has said that the Oil Industry will achieve the 2.3million barrel per day production volume-target for the 2019 budget, assuring that measures have been emplaced to attain the set mark.

Speaking in a presentation to the Senate Committee on Finance on the 2019 - 2021 Medium Term Expenditure Framework (MTEF), the Group Managing Director of the NNPC, Dr. Maikanti Baru, stated that with improved security in oil bearing communities as a result of sustainable community partnership, the Industry was confident of attaining the production target.

The NNPC GMD who was represented at the event by Mr. Bala Wunti, Group General Manager, Corporate Planning and Strategy of the corporation, informed that though the country had production capacity of over 2.5mbld, the unfortunate security situations of the past in areas of operation made it difficult to achieve desired production targets.

“Thankfully, the current administration under President Muhammadu Buhari is strongly focused on engagement and sustainable community partnership hich has resulted in improved security and production. This will further improve and we are thus confident of achieving the 2019 budget production target,” he said.

On the possible impact of the Organisation of the Petroleum Exporting Countries’ (OPEC quota, on Nigeria’s production target, the NNPC GMD explained that the production target of 2.3million barrels per day was a combination of liquid hydrocarbon production comprising of crude oil and condensate, noting that the OPEC quota only covers crude oil production.

He further explained that with Nigeria's condensate production currently oscillating between 400,000 to 600,000 barrels per day, the country was in a good position to attain the overall production benchmark, saying that the corporation was working assiduously with other relevant agencies to ensure the attainment of the 2019 budget assumptions contained in the 2019 – 2021 Medium Term Expenditure Framework (MTEF).

The GMD stressed that the NNPC’s mandate on the MTEF was on the key thematic indicators of Production Volume, Crude Oil Price and Unit Crude Oil production Cost.

Dr. Baru also informed that Nigeria’s crude oil grade traded higher than Dated Brent, attributing the development to the recent reforms in the crude oil management regime with emphasis on entrenching pricing transparency and performance.

He restated NNPC’s commitment to transparency and efficiency in every aspect of its operations, stressing that under his watch, the corporation had recorded considerable gains in all the thematic indicators.

To further deepen the culture of pricing transparency in the corporation, the GMD stated that a standing-pricing review committee meets monthly to review crude and products pricing in accordance with the market dynamics.

19/11/2018

24/10/2018

Nigeria’s representative in the Organization of Petroleum Exporting Countries (OPEC), Mele Kyari, has said the country cannot be ignored in the global oil market due to the growing positive outlook of its oil output. Mr Kyari, who is also the Group General Manager, Crude Oil Marketing Division, Nigerian National Petroleum Corporation (NNPC), was speaking on Thursday at a conference organised by Argus Media in Le Richemond, Geneva, Switzerland.

He said; “Nigeria has the second highest crude oil reserves in sub-Saharan Africa (about 37 billion barrels of proven oil), after Libya. That means if Nigeria continues to produce at the current level, even without doing anything, it will still be producing in the next 35 to 40 years. This means for the period, Nigeria will continue to be a relevant supplier of at least two million barrels of crude oil into the international oil market every day. So, Nigeria cannot be ignored in the global oil market for a long time.”

In January 2017, Nigeria and Libya were granted exemption from the output cut resolution by OPEC to stabilise global oil prices. During the period, due to rising incidences of attacks and sabotage of oil facilities by armed Niger Delta militants, daily oil output averaged 1.7 million barrels. But, Mr Kyari said since 2017 Nigeria’s oil production climbed to about 1.8 million barrels per day, and about 2 million barrels by the end of September 2018. He added that Egina, a deep offshore oil field being developed by Total Nigeria, on course to commence production by December 2018 would add another 200,000 barrels of crude oil.

01/08/2018

By Michael Eboh Abuja—Nigeria lost N1.6 trillion in 2016 and N995 billion in 2017 to crude oil theft, translating to a loss of about $8.9 million daily and a combined loss of N2.6 trillion over the two-year period, according to a draft report presented yesterday, by the Nigeria Natural Resource Charter, NNRC. Presenting the report at a capacity building workshop for journalists to enhance quality of reporting on oil theft in Abuja, Senior Consultant, Africa Practice, Dawn Dimowo, lamented the rising cases of crude oil theft, which she blamed on poor governance of oil revenue and corruption in the sector, as well as neglect of oil-producing communities by oil companies. File Photo: Crude Oil She also stated that findings in the report showed a positive correlation between elections, politics and crude oil theft, noting that local politicians, it was assumed, engages in oil theft to gain funding for elections. She also disclosed that researchers during the course of preparing the report discovered that the Joint Task Force, JTF, created by the security agencies to curb the menace of oil theft had cost the country a sizable amount of money. Oil thieves bribe JTF officers N374m monthly She said: “This large scale crime cannot go on without the $432,000 used to bribe JTF officers for access to crude oil pipelines. This translates to a bribe of approximately N373.68 million monthly. “It is widely speculated that JTF officers often turn a blind eye to oil theft in return for a fee. Oil thieves buy the ‘right’ to operate on pipelines from JTF officers patrolling that area and also from host communities’ leaders.” Also speaking, Mr. Paul Nwabuikwu convener of the programme and former spokesperson to Ngozi Okonjo-Iweala, former Minister of Finance, disclosed that it was estimated that Nigeria loses revenue in the range of $7 billion to $12 billion annually to oil theft, peaking at $15.9 billion in 2014 and N3.8 trillion in 2016. According to him, the amount lost to crude oil theft in 2016 was more than the N4 trillion revenue target attained by the Federal Inland Revenue Service, FIRS, in 2017. Speaking in the same vein, consultant to the NNRC, Mrs. Ramatu Bako, noted that oil theft had brought about a number of social ills, declaring that apart from environmental degradation, it had brought about low enrolment in schools, as youths now find it more attractive to steal crude oil than attend schools. The NNRC Report titled, ‘Oil Theft in Nigeria,’ disclosed that the estimated value of total losses suffered by Nigeria through the various methods by which oil is stolen from the Niger Delta was higher than the current combined allocations for health and education captured in the 2018 budget. Losses to oil theft bigger than education, health allocations According to the report, the combined allocations for health and education amount to N189.4 billion, which translates to a mere 8.4 per cent of the estimated value of losses from oil theft two years ago.

01/08/2018

SHELL, NNPC STILL NEGOTIATING $10B BONGA FIELD CONTRACT

Royal Dutch Shell and its partners will decide next year on whether to go ahead with the development of Nigeria’s Bonga Southwest offshore oilfield, it was gathered yesterday.

Managing Director, Shell Nigeria Exploration and Production Company, Bayo Ojuli, told reporters that the project, one of the country’s largest with an expected production of 180,000 barrels per day, will generate profit at below $50 a barrel.


He said Shell is currently negotiating a production sharing contract (PSC) with the Federal Government, through the Nigerian National Petroleum Corporation (NNPC) which will determine the viability of the project. The negotiations are expected to be concluded this year.

Shell operates the project and ExxonMobil, Total, Eni and the Nigerian National Petroleum Company are partners.

The Minister of State for Petroleum, Dr. Ibe Kachikwu, was said to have directed NNPC and Shell Nigeria Exploration and Production Company (SNEPCo) to commence the tendering process for the ex*****on of the deepwater project.

The report said Kachikwu’s directive followed the April 17, 2018 meeting between President Muhammadu Buhari and a delegation from Royal Dutch Shell Plc., led by its Chief Executive Officer, Bern Van Beurden, in London. A decision was said to have been reached the implementation of projects be started.

The London meeting, which was facilitated by Kachikwu, also had in attendance the Group Managing Director of the NNPC, Dr. Maikanti Baru.


The meeting was said to have presented an opportunity to open investment talks of up to $15 billion to be invested by Shell in Nigeria.

First oil from the project, which is expected to add 225,000 barrels per day of crude oil to Nigeria’s daily production, is expected in 2021 or 2022.

Other key projects that have also suffered delays in the industry include: the 120,000bpd Shell and Eni’s Zabazaba/Etan project in the disputed Oil Prospecting Lease (OPL) 245, ExxonMobil’s 140,000bpd Bosi project, ExxonMobil’s 110,000bpd Uge project and Chevron’s 100,000bpd Nsiko deepwater project.

The delays in the ex*****on of these projects, which are estimated to cost about $23 billion, are largely caused by the lack of clarity of terms as a result of the non-passage of the 18-year-old Petroleum Industry Bill (PIB), and inadequate funding.

However, following the meeting between the president and the Shell executives, Kachikwu directed the NNPC to conclude all the processes leading to the ex*****on of the Bonga South West project latest by Monday, June 18.

24/06/2018

The United States cut its crude oil imports from Nigeria by 62.08 per cent to 3.92 million barrels in March, the lowest monthly level since February 2016.

The latest data from the US Energy Information Administration seen by our correspondent on Friday showed that the country imported 10.03 million barrels and 10.34 million barrels in January and February, respectively. It bought as much as 13.34 million barrels in October last year.

The US purchased a total of 24.28 million barrels of Nigerian crude in the first three months of this year, down from 25.97 million barrels in the same period last year.

The import of Nigerian crude by the US rose by 48 per cent to 112.92 million barrels last year, the highest annual level in five years, up from 75.81 million barrels in 2016 and 19.86 million barrels in 2015

For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 and June 2015, according to the EIA data.

In 2010, the US bought as much as 358.9 million barrels from Nigeria, but slashed its imports to 280.1 million barrels in 2011.

In April this year, The PUNCH reported that the US crude oil exports had surpassed that of Nigeria as shale oil production surged.

The EIA, the statistical arm of the US Energy Department, said the US crude oil exports rose by 582,000 barrels per day in the third week of April to an all-time record high of 2.331 million bpd.

An analysis of data obtained by our correspondent from the EIA showed that the US crude oil exports averaged 1.12 million bpd last year, with the highest daily export of 1.73 million bpd recorded in October.

Light sweet Nigerian crude is very similar to the light oil produced in the US shale.

The US exports will continue to rise in the medium term, and by 2022, the country will be the fourth biggest oil exporter in the world behind Saudi Arabia, Russia and Iraq, energy consultancy, Wood Mackenzie, said at the end of January.

The US will export four million bpd of light sweet crude of API gravity of between 38 and 45 by 2022, Wood Mackenzie has estimated.

The US removed the 40-year-old restrictions on its crude exports in December 2015 following the rapid growth of its shale oil production. In 2016, the US exported an average of 520,000 bpd.

24/06/2018

24/06/2018