By John Onah, Abuja
The Nigerian National Petroleum Corporation (NNPC) said it has signed a 875.75 million dollar funding and technical services agreement and alternative financing deal for the Nigerian Petroleum Development Company (NPDC) operated Oil Mining Lease (OML) 65.
The Corporation in a statement by its spokesman Mr Ndu Ughamadu in Abuja yesterday, said it signed the deal with CMES-OMS Petroleum Development Company (CPDC).
The Chief Financial Officer of the NNPC, Mr Umar Ajiya,who signed for corporation explained that the package entailed comprehensive financing solution that addresses the complex issues involved in growing NPDC’s production.
He added it would help minimise its cost of capital, and maximize its value preservation.
On CPDC’s right to provide technical services, he listed the field of consideration in this regard to include: drilling and completion services; building capacity and technology transfer; generating employment opportunities for youths.
This, he added that it would have an attendant positive multiplier effect on the nation’s economy, among other considerations.
He noted that the deal would also struck a balance between risk and reward which gave investors a rate of return that was commensurate with funding a brownfield project which had significant exploration risk.
Ajiya noted that the expectation was that the collaboration between the NPDC and CPDC would translate in real terms to the efficient execution of the scope of activities for the optimal development of the OML 65 asset within cost and schedule, whilst maximizing value to all the stakeholders.
He said it was projected that the collaboration would enhance operational and financial performance strictly guided by the pre-agreed Key Performance Indicators (KPIs) which remains critical for determining incentive payment due to CPDC.
Ajiya further disclosed that the project, which scope cuts across exploration, development, production and provision of facilities with incremental first oil targeted for fourth quarter 2020, was estimated to have potential reserves of 800 million barrels of oil equivalent (mmboe).
“It will also help an ultimate recoverable reserve of 244 mmboe and cumulative production of 44mmboe from the Abura Main and Abura SE fields,” he said.
He explained that over the project’s life, it was expected to generate over 6.35 billion dollars in taxes and royalties to the Federation to support government’s medium to long term economic development agenda.
He described the contractor financing model as an innovative approach by NPDC to funding its operations in response to the challenging economic environment, saying the approach would fast-track the development of NPDCs under-developed assets.
He informed that the project was expected to ramp up production at OML 65 from 900barrels per day to 60, 000 barrels per day with average production over field life at 40,000 barrels per day.
Dangote Petroleum Refinery Begins Production of Diesel, Aviation Fuel – Official
Dangote Petroleum Refinery has commenced production of diesel and aviation fuel.
Mr Anthony Chiejina, Group Head, Corporate Communications, Dangote Group, confirmed this in a statement to newsmen in Lagos.
Chiejina quoted the President of Dangote Group, Alhaji Aliko Dangote, to have elatedly thanked President Bola Ahmed Tinubu for his support, encouragement and thoughtful advice towards the actualisation of this project.
Dangote also thanked the Nigerian National Petroleum Company Ltd., the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigerians for their support and belief in the historic project.
According to him, “We thank President Tinubu for his support and for making our dream come true.
“This production, as witnessed today, would not have been possible without his visionary leadership and prompt attention to details.
“His intervention at various stages cleared all impediments, thereby accelerating the actualisation of the project.
“We also thank the NNPCL, NUPRC and NMDPRA for their support.
“These organisations have been our dependable partners in this historic journey.
“We also thank Nigerians for their belief and support in this project,” he said.
Dangote said: “We have started the production of diesel and aviation fuel, and the products will be in the market before the end of the month.
“This is a big day for Nigeria. We are delighted to have reached this significant milestone.
“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects.
“This is a game changer for our country, and I am very fulfilled with the actualisation of this project.
“The refinery has so far received six million barrels of crude oil at its two SPMs located 25 kilometres from the shore.
“The first crude delivery was done on Dec. 12, 2023, and the 6th cargo was delivered on Jan. 8, 2024,” he added.
He said that the refinery can load 2,900 trucks a day at its truck-loading gantries.
He added that the products from the refinery will conform to Euro V specifications.
Dangote boss said that the refinery design complies with the World Bank, US EPA, European emission norms, and Department of Petroleum Resources (DPR) emission/effluent norms. State-of-the-art technology.
“I must extend our sincere appreciation to our Bankers and financiers, both local and offshore, who demonstrated a great deal of patience, in seeing us through many difficult times.
“In the same vein, we thank the Government of Lagos State, under the leadership of Babajide Sanwo-Olu, who has been incredibly proactive in ensuring that the many challenges we encountered in the course of executing this project were quickly resolved.
“I thank him immensely.
“I also sincerely thank our host communities and their traditional leaders for their sustained patience, forbearance, and admirable willingness to work with us to find amicable and win-win resolutions to the many issues we have had to deal with as the construction of this huge facility progressed.
“Our staff have also contributed so immensely to the success of this project. I thank them profusely,” Dangote added.(NAN)
Refinery Rehab: Don’t Expect Immediate PMS Price Crash, Experts Tell Nigerians
Some Oil and Gas Experts have said that the coming on stream of both Port Harcourt and Dangote refineries may lead to some marginal reduction in the cost of petroleum products and not a significant price crash.
The experts made this known in an interview on Sunday in Abuja.
According to them, some ancillary costs such as freight and port charges, among others would have been eliminated to achieve the marginal reduction.
The Federal Government had on Dec.21, announced the mechanical completion and flare start-up of the Port Hacourt Refining Company Limited (PHRC) and the subsequent streaming of its phase two in 2024.
This, according to the Minister of State Petroleum (Oil), Sen.Heineken Lokpobiri, will herald the commencement of the production of petroleum products after the Christmas break.
The PHRC comprised of two refining units, with the old plant having a refining capacity of 60,000 barrels per day (bpd) and the new plant 150,000 bpd, both summing up to 210,000 bpd.
Reacting to the development, an Associate Professor of Energy and Natural Resources, University of Abuja, Olanrewaju Aladeitan, said there should be some marginal reduction in petrol prices as some ancillary cost would have been eliminated.
However, he explained that the price of petroleum products may not come down significantly as to describe it as crashing.
“The price may not come down significantly considering the fact that crude oil and condensates supply for the domestic market under the Petroleum Industry Act is going to be based on a willing supplier and a willing buyer basis.
“And the fact that the supply of crude oil will be commercially negotiated having regard to prevailing international market price for similar grades of crude,” he said.
With this provision, he said there would be no dedicated percentage of crude for local refineries.
“Hence international market price which of course is denominated in dollars will still be the determinant of cost of the crude oil that would be refined.
“So I do not see how the price of Petroleum products will crash,” Aladeitan said.
Also speaking, Mr Yushau Aliyu, an Economic Expert, said reaching to a mechanical test of the refinery after a very long fruitless effort was an indication that part of our refined Premium Motor Spirit (PMS) deficit would be attended.
Aliyu described it as a good signal of recovering in the forex deficit which dominated the dwindling liquidity crisis.
“In addition, the new Nigerian National Petroleum Company Limited (NNPC Ltd.) is responding to the immediate solution for availability of PMS in the economy.
“We are expecting the NNPC Ltd.’s retail stations to reduce their pump price due to absence of landing cost in the short term effects,” he said.
Another oil and gas expert who preferred to remain anonymous said it was obvious that some people in the oil and gas sector were engaged in an act of sabotage.
He frowned at the situation where the government preferred to spend so much, including foreign currency, to import fuel, rather than fix it refineries.
“They claim that the 60,000 barrels capacity refinery in Port Harcourt is back on stream, while the 150,000 barrels capacity will work soon.
“We are waiting to see them work, including that of Warri and Kaduna. When they are put to use, let’s see why fuel prices will not crash,” the expert said.
NAN reports that pump price of PMS has increased to N660 per litre at various fuel stations, while NNPC Ltd.’s retail outlets sell at N617 since the removal of subsidy in May 2023 due to high crude cost and high foreign exchange rate.
The after effect of the removal and high cost of fuel brought untold hardship and suffering on Nigerians due to inflation, increase in goods and services, among others. (NAN)
NNPC Ltd, TotalEnergies Sign MoU on Adoption of Methane Detection Technology
The Nigerian National Petroleum Company Limited (NNPC Ltd) has signed a Memorandum of Understanding (MoU) with TotalEnergies for adoption and deployment of Airborne Ultralight Spectrometer for Environmental Application (AUSEA) in its upstream operations.
The agreement is a direct benefit from the Company’s participation at the recently concluded United Nations Climate Change Conference (COP28) in Dubai, UAE.
A statement on Tuesday by Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd, stated that with the agreement, the company would be able to deploy the TotalEnergies AUSEA, known as methane detection technology on its upstream operations sites.
This, will ascertain the level of methane emissions from them, with a view to working out emission curtailment measures to help in combating global warming and climate change.
The MoU was signed by Oritsemeyiwa Eyesan, NNPC Ltd’s Executive Vice President, Upstream, and Managing Director and Country Chair, TotalEnergies EP Nigeria, Matthieu Bouyer, on behalf of their respective companies.
Putting the deal in proper perspective, the NNPC Ltd’s Executive Vice President, Upstream, Oritsemeyiwa Eyesan, said the pilot phase of the TotalEnergies AUSEA deployment would be on NNPC Ltd’s owned operations.
Eyasan added that the deal would enable the company to deploy methane abatement measures.
Other benefits of the TotalEnergies AUSEA technology include identification of unaccounted emission sources, establishment of a basis for querying and improving current emission reporting processes.
It will aid in provision of data to review operational system and implement corrective actions, and estimation of flare combustion efficiency.
The agreement was signed under the watch of the Group Chief Executive Officer (GCEO) NNPC Ltd, Mele Kyari, and Chairman and Chief Executive Officer of TotalEnergies, Patrick Pouyanné.
Speaking at the event, Kyari described TotalEnergies as a great and reliable partner over the years with whom the company was looking forward to exploring greater opportunities in the nation’s energy sector.
On his part, Pouyanné said his company was offering the technology to NNPC Ltd, in keeping with its commitment to promote responsible production of hydrocarbons.
He applauded NNPC Ltd for its successful transition into a limited liability company, stressing that he could feel the energy that the reforms have brought about, not only in the company but also in the sector. (NAN)
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