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Energy

President Muhammadu Buhari is set to virtually inaugurate the National Oil and Gas Excellence Centre (NOGEC), Lagos, January 2021. This is to boost the operations of the nation’s petroleum sector, the Department of Petroleum Resources (DPR), has said.

Mr Paul Osu, Head, Public Affairs,  in a statement issued on Monday, in Lagos, quoted the Director  of DPR, Mr Sarki Auwalu, the chief host of the event, as saying that the centre would afford the oil and gas industry the critical elements for competitive advantage, in a changing global energy landscape.

“The integrated centre will also entrench Nigeria’s status as a regional leader and position the nation for significant global impact in the provision of value-added services and breakthrough solutions for the industry in years and decades to come,” he said.

According to him, the centre was structured to drive the three-pronged objectives of safety, value and cost efficiency which are critical for oil and gas industry stability, growth and sustainability .

Auwalu said  the NOGEC complex was structured to house various flagship centres, including Search, Rescue and Surveillance (SeRAS) Command and Control Centre and National improved Oil Recovery Centre (NIORC), in  order to comprehensively cover all the key areas of the industry.

Other centres are the Oil and Gas Dispute Resolution Centre (DRC) , Oil and Gas Competence Development Centre (CDC) and Integrated Data Mining and Analytics Centre (IDMAC).

The DPR boss said: “SeRAS is an industry-wide programme established to enhance safety management, emergency preparedness and response, as well as bed space management and logistics services across the industry .

“The SeRAS Command and Control Centre (CCC), established at the NOGEC Centre, Lagos, will entrench safe practices, drive cost reduction and improve operational efficiency across the industry.

”Two  other Rescue Coordination Centres (RCC) will be set up at Osubi and Brass, in the first instance, for effective coverage of all areas of operations, ” he said.

The director said that the NIORC was established to formulate and implement strategies for improved and enhanced oil recovery methods in the industry for the purpose of achieving maximum production at the lowest possible cost.

“The centre will partner with operators and technology innovators, in their research and development efforts, for achieving its objectives.

“It will also collaborate with similar international oil and gas regulators in sharing lesson learnt and operational best practices.

“NIORC will focus on the implementation of a robust national IOR framework to enable the country optimise its resources, as well as create greater opportunities for operators,” he said.

Similarly, he noted that the Oil and Gas DRC would offer arbitration, mediation and conciliation services for the Industry.

“The DRC is structured to adequately resolve disputes  in a manner consistent with regulatory and commercial interests of the Industry.

“This will address sub-optimal development of oil and gas assets associated with lingering disputes and the attendant consequences of value erosion in terms of national resource growth. It will also improve global competitiveness, investment attractiveness, government take and investor’s profitability,” he added.

Auwalu  said the centre would leverage industry technical experts, Alternative Dispute Resolution Practitioners and resources of the National Data Repository (NDR) to provide fair and balanced resolutions of industry-related disputes from an informed position.

On the Oil and Gas CDC, he said, it was set up to be a regional hub to deliver trainings for oil and gas industry practitioners, as well as a world class centre of excellence that would serve as the innovation hub for the oil and gas Industry in Nigeria, and beyond.

“The centre will feature state-of the-art training facilities, meeting rooms, conferencing, electronic library, digital visualisation centre, and co-working spaces.

”It is designed to stimulate creative thinking to proffer solutions for the technical and business challenges facing energy sector practitioners.

“The centre wil significantly reduce the cost of training and capacity building, which is often associated with international travels by utilising both local and international subject matter experts (SME), to deliver world-class training in-country.

“The centre shall leverage the National Data Repository (NDR) and its robust suite of digital solutions as well as other existing real-time electronic services to deliver hands-on, practical solutions to industry challenges,” Auwalu explained.

As for the IDMAC, the director said it would provide a platform for appropriate analysis of industry data, to provide meaningful insights, that would enable effective decision making for investment, asset development, portfolio management and operational excellence.

”Technical, operational and economic decisions, across the value chain, are underpinned by credible, reliable datasets both from corporate and national planning perspectives.

“IDMAC will take advantage of DPR’s resources and tools- Big Data, Internet of things (loT) and Artificial intelligence (Al), for evaluation, analytics and data synthesis by interested parties.

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Energy

Heirs Holdings (“HH”), the leading African strategic investor, in partnership with affiliated company Transnational Corporation of Nigeria Plc (“Transcorp”), Nigeria’s largest publicly listed conglomerate, announced today the unconditional acquisition of a 45% participating interest in Nigerian oil licence OML 17 and related assets, through TNOG Oil and Gas Limited (a related company of Heirs Holdings and Transcorp), from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and ENI. In addition, TNOG Oil and Gas Limited will have sole operatorship of the asset.

The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1.1 billion, provided by a consortium of global and regional banks and investors. OML 17 has a current production capacity of 27,000 barrels of oil equivalent per day and, according to our estimates, 2P reserves of 1.2 billion barrels of oil equivalent, with an additional 1 billion barrels of oil equivalent resources of further exploration potential.

The investment demonstrates a further important advance in the execution of Heirs Holdings’ integrated energy strategy and the Group’s commitment to Africa’s development, through long term investments that create economic prosperity and social wealth. Heirs Holdings’ heritage and approach to business fundamentally underscores its commitment to inclusive development and shared prosperity with its host communities. Heirs Holdings is fully invested in the development of the Niger Delta region.

Heirs Holdings’ strategy of creating the leading integrated energy business in Africa is executed through a series of strategic portfolio holdings. Transcorp is one of the largest power producers in Nigeria, with 2,000 MW of installed capacity, through ownership of Transcorp Power Plant and the recent acquisition of Afam Power Plc and Afam Three Fast Power Limited. Transcorp closed the US$300 million Afam acquisitions in November 2020.  Transcorp supplies electricity to the Republic of Benin, as part of an emphasis on promoting regional integration and delivering robust power supply to catalyse development in Africa. Transcorp also operates OPL281, under a production sharing contract with the Nigerian National Petroleum Corporation (“NNPC”). Similarly, Heirs Holdings’ subsidiary, Tenoil is the operator of OPL 2008, under a production sharing contract with NNPC. Tenoil also owns the Ata Marginal Field, which will commence production in Q2, 2021, with 3,500 barrels of oil per day.

Chairman of Heirs Holdings, Tony Elumelu stated: “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled. As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria.  We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.”

Speaking further, he said “I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”

Speaking on the investment, the President/GCEO of Transcorp, Owen Omogiafo, said “This deal further demonstrates Transcorp’s integrated energy strategy and our determination to power Africa.”

Heirs Holdings was advised by Standard Chartered Plc, as Global Coordinator, and United Capital Plc, with a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm Amundi. The deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an offtaker.

Heirs Holdings has created one of Africa’s largest, indigenous owned, oil and gas businesses, headquartered in Lagos, Nigeria and led by a board and management team with significant regional and global experience in production, exploration, and value creation in the resources sector. The HH Group is committed to the highest standards of safety, health, and community relations, together with best practice in governance and accountability.

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Energy

The Shell Petroleum Development Company of Nigeria Limited (SPDC) has completed the sale of its 30% interest in Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp), for a consideration of $533m. A total of $453m was paid at completion with the balance to be paid over an agreed period.

Completion follows the receipt of all approvals from the relevant authorities of the Federal Government of Nigeria.

SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area.

SPDC is committed to transfer OML 17 in an orderly and responsible manner to the new owner, which will help to provide a sustainable long-term plan to unlock its full potential. The sale also enables SPDC to focus on supporting the Federal Government of Nigeria’s national energy agenda in its remaining OMLs through oil and gas production, payment of royalties, taxes and levies as well as advancing local content and providing social investments.

Osagie Okunbor, Managing Director of SPDC and Country Chairman of Shell Companies in Nigeria, said: “As with previous divestments, we will facilitate a successful transition to new ownership. Shell has been in Nigeria for over 60 years and remains committed to a long-term presence here.”

The other SPDC JV partners, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited, have also assigned their interests of 10% and 5% respectively in the lease, ultimately giving TNOG Oil and Gas Limited a 45% interest in OML 17.

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Energy

The public opening of bid for rehabilitation of the Nigerian National Petroleum Corporation’s (NNPC) downstream infrastructure was held virtually in Abuja on Thursday, no fewer than 96 companies have indicated interest.

According to the Managing Director of the Nigerian Pipelines and Storage Company (NPSC), Mrs Ada Oyetunde, the exercise was in conformity with the mandate of the Federal Government to prioritise the rehabilitation of critical downstream infrastructure across the country.

She listed some of the facilities that would be rehabilitated by successful bidders to include critical pipelines for crude oil supply to the refineries and evacuation of refined products, depots, and terminals.

Oyetunde said that the objective was to get them ready to support the refineries when they become operational after their rehabilitation.

“An open tender for pre-qualification of interested companies was published in August 2020 in the national dailies, for the rehabilitation of NNPC downstream critical pipelines and associated depots and terminal infrastructure through Finance Build Operate and Transfer (BOT) to cover the 4 lots.

 “The four lots are Lot 1: Port Harcourt Refinery related infrastructure, Lot 2: Warri Refinery related infrastructure, Lot 3: Kaduna Refinery related infrastructure and Lot 4: System 2B related infrastructure,” she said.

The NPSC boss said that the BOT arrangement would provide a reliable pipeline network and automated storage facilities for effective crude feed, product storage and evacuation from the nation’s refineries post-revamp through an open access model.

This, she added, would charge market reflective prices and tariffs to recover the investment.

Earlier, the Group General Manager, Supply Chain Management, Mrs Aisha Katagum, commended the Infrastructure Concession Regulatory Commission (ICRC), and the Bureau of Public Procurement (BPP) for providing guidance for the project.

She assured the bidding firms of a fair, equitable and transparent selection process.

Observers at the public bid opening exercise were representatives of the ICRC, BPP, the Nigeria Extractive Industries Transparency Initiative and Civil Liberties Organisations.

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Energy, Government

Stakeholders in the oil industry need to find and agree on cheaper means of producing oil while also ensuring a more competitive environment that meets the needs and purposes of the Nigerian nation including the largest production volumes possible.

This was the view of Vice President Yemi Osinbajo, SAN, at a virtual meeting on the Petroleum Industry Bill (PIB) with stakeholders in the industry under the auspices of the Oil Producers Trade Section (OPTS) in Nigeria, and Independent Petroleum Producers Group (IPPG).

According to Prof. Osinbajo “we need to agree on terms that will give us a more competitive environment. We should find a way of producing oil cheaper at the largest volume possible given the circumstances and future of oil itself, and of course, given our requirements and needs.”

The meeting held Tuesday afternoon just as consultations ahead of the passage of the Petroleum Industry Bill (PIB) continue. Vice President Yemi Osinbajo noted that in line with the focus of the Buhari administration, there is need for stakeholders in the sector to agree on terms to create a more competitive environment, while maximizing opportunities in the oil and gas industry.

Continuing the Vice President said “the other point is that of gas. To sound the question of reconciling and maintaining our domestic gas obligation, and at the same time improving the gas environment in such a way that we are able to benefit maximally from it as a business and government.

 “I like the concept that gas should be an enabler for quick development and I think that we must reach some kind of balance with this, especially with this question around domestic gas obligation. I would like OPTS and IPPG to look more carefully and see in what ways we can come to some agreements as to how it should be done.”

Speaking further on the benefits of harmonizing interests in the PIB, Prof. Osinbajo observed that the passage of the PIB should be seen as an opportunity to transform the industry by addressing lingering issues that have impeded development across the different sectors that make up the industry.

“Businesses would like to invest and invest more in this environment. So, that is the point of convergence. We want more investments and obviously state governments like more investments, and you (private companies) would like to invest so that you can make more money. No question about that; what we should seek to do is to see to what extent we can come to that convergence,” the Vice President said

The new PIB, which was presented to the National Assembly by President Muhammadu Buhari in September last year, has already passed the second reading in both the Senate and the House of Representatives. The central aim of the bill is to foster sustainable development in Nigeria’s oil and gas industry.

Earlier in his remarks, the Minister of State for Petroleum Resources, Mr Timipre Silva, said the interaction with the stakeholders in the petroleum industry is indicative of their commitment to the transformation of the industry through the PIB.

He assured that working with other stakeholders, including the National Assembly, the PIB as conceived by the Buhari administration would be passed into law.

On his part, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari said that most of the concerns raised by stakeholders have been addressed in the proposal before the National Assembly, noting that the Federal Government has moved from its previous position to one that is more competitive and attractive to investors.

Commending the efforts of the Buhari administration in guiding the process of having a new law for the industry, the Chairman of OPTS, Mr Mike Sangster, who is also the Managing Director/Chief Executive of Total E&P Nigeria Ltd, said stakeholders remain committed to making Nigeria the “preeminent hydrocarbon province” in the region and the world.

Other participants at the meeting include the Chairman and Managing Director of ExxonMobil in Nigeria, Mr Laing Richard; the Chairman of Chevron Nigeria Limited, Mr Rick Kennedy; and the Chairman of IPPG, Mr Ademola Adeyemi-Bero, among others

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