NNPC Awards 2017 Crude Term Contracts To 39 Companies

NNPC, Crude Term ContractsThe Nigerian National Petroleum Corporation (NNPC) has awarded 1.31 million barrels per day (BPD) of crude oil to 39 companies as part of its 2017 crude term contracts.

A statement by the Group Managing Director at the Public Affairs Division, Ndu Ughamadu, revealed the companies were selected for the term contracts after a transparent bid by 224 companies in December 2016.

The companies are 18 Nigerian owned companies, three foreign state owned companies, 11 international trading houses, five foreign refineries and trading arms of the NNPC group.

The statement said each of the contracts were for 32,000bpd apart from Duke Oil Limited, an oil trading arm of the NNPC which would be for 90,000bpd.

It also disclosed that the contract, which was announced by the Group General Manager of the Crude Oil Marketing Division of the corporation, Mr Mele Kyari, would run for one year, with effect from the January 1, 2017 for consecutive 12 circles of crude oil allocation.

The breakdown of the term contract winners are; Nigerian companies: Oando, Sahara Energy Resources Limited, MRS Oil and Gas, A.A. Rano Nigeria Limited, Bono, Masters Energy, Eterna Oil and Gas, Cavalva Energy, Hyde Energy, Britania-U, North West Petroleum, Optima Energy, AMG Petroenergy, Arkleen Oil and Gas Limited, Shoreline Limited, Emo Oil, Setana Oil and Prudent Energy.

International trading companies: Trafigura, Enoc, BP Trading, Total Trading, UCL Petro Energy, Mocoh Trading, Trevier Petroleum, Heritage Oil, Levene Energy, Glencore as well as Litasco Supply and Trading.

NNPC trading companies: Calson/Hyson and Duke Oil Incorporated.

Refiners: Hindustan Refinery, Varo Energy, Sonara Refinery, Bharat Petroleum and CEPSA.

Government to government: Indian Oil Corporation (India – IOC), Sinopec (China) and Sacoil (South Africa).

Reps To Probe NNPC Deals Without Tenders

The House of Representatives said that next week they will investigate deals in which the Nigerian National Petroleum Corporation (NNPC) gave two local firms with no previous operating experience the rights to make potentially billions of dollars from oilfields without competitive bidding.

Local activists raised the issue with the parliament last week, while NNPC has denied any wrongdoing.

“We have invited them (the activists) to come and table the matter and substantiate their claims … We have also invited NNPC to get their side,” Senator Emmanuel Paulker, the head of the Senate committee on upstream oil and gas, told an international news agency.

The House of Representatives passed a motion late on Thursday to investigate the deals, which activists say cast doubt on pledges by President Goodluck Jonathan’s government to improve transparency and end an era of backroom deals that have characterised the Nigerian Petroleum industry for decades.

Activists say multi-layered deals on oil blocks through secretive local companies, often lacking technical expertise, are at best inefficient and at worst an avenue for corruption.

In 2011, Septa Energy and newly formed Atlantic Energy, owned by tycoon Jide Omokore, signed “strategic partnership agreements” with the Nigerian Petroleum Development Company (NPDC) to help it operate oil mining leases (OMLs) 4, 38, 41, and 30, 34, respectively.

A news agency said it obtained copies of the deals on Friday.

The chief executive of Atlantic Energy, Scott Aitken was previously the head of Seven Energy, which owns Septa. Neither company was immediately available for comment.

“No need for bidding process”

Activists from a region of the Niger Delta, where the blocks run by Atlantic Energy are located, allege the deals breach rules requiring the government to openly tender for stakes in oil blocks. They also accuse Oil Minister Diezani Allison-Madueke of having an indirect financial interest in Atlantic, which was denied by the state oil firm that she heads.

“The protesters complained of the secret and arbitrary farm-out of (the blocks) … to both Atlantic Energy Drilling Concept and Septa Energy Limited without regard to the law and due process,” Afam Ogene, the proposer of the motion, told parliament late on Thursday.

The NNPC, the NPDC’s umbrella company, said in an emailed statement there was legally no requirement to tender the deals.

“There was never any sale of equity involved … As such, there is no need for a bidding process,” it said.

“There is no evidence indicating that the honourable minister of petroleum resources has any direct or indirect pecuniary interest in the company (Atlantic),” it added.

Former operator Royal Dutch Shell sold its 45 percent stake in the blocks to various bidders, including Heritage Oil and a consortium involving Eland Oil in 2011. At the same time NNPC transferred its 55 percent stake to its production arm NPDC.

NPDC then planned to operate the blocks itself but industry experts say it lacked the capacity or finances to do so.

The agreements struck with Atlantic and Septa were supposed to resolve this, but the companies quickly sub-contracted out the work to other oil operators with relevant experience.

“It is worrisome that the entire racket became possible through a mischievous process of hinging the transaction on the strategic alliance agreement, an action deliberately designed to circumvent due process and transparency,” Mr Ogene said.

Copies of the original agreements obtained by the news agency show Atlantic gets 30 percent of oil profits from OML 34 and 30, while SEPTA gets 10 percent of oil profits on OMLs 4, 38 and 41.

Reps. To Investigate Sale Of OML 30 Minning Licence

The House of Representatives has resolved to carry out a comprehensive investigation on the sale of oil mining licence, OML 30 to an alleged questionable oil exploring company.

This resolution was reached after Representative Yusuf Tajudeen presented a motion on the security implications bordering the said oil deal.

He said this development will have adverse effect on Nigeria’s revenue, economy, infrastructural and technical development.

The House Committee on Petroleum Resources, Upstream has been mandated to investigate the matter and report to the House within 3 weeks.

UK based explorer Heritage Oil had announced earlier in the year that Nigerian outfit Shoreline Power has agreed to acquire a 14.5 per cent equity slice of the duo’s OML 30 venture.

Heritage Oil and Nigeria’s Shoreline Power acquired OML 30 from Shell, Total and Eni last year in an $850million deal.

The deal came with an option for Shoreline Power to acquire an extra 30 per cent of Heritage Oil’s stake in the joint venture at OML 30.

The prolific block produced 35,704 barrels of oil in November, 15,665 of which was net to Heritage Oil under the prior 55:45 ownership and which yielded the UK explorer an estimated $52million.