BY KUNLE KALEJAYE with Agency Reports

LAGOS -French oil major, Total, Monday, said it has made new oil discovery estimated at 85,000 barrels per day, in its offshore oil mining lease 102 in Nigeria.

This is the second discovery in the lease, increasing the feasibility of a new development hub, Total said.

One of the three reservoirs tested at 8,500 barrels per day, the company added.

Total Petroleum Nigeria Limited, TPNL, a joint venture between Nigerian National Petroleum Corporation, NNPC, (60 per cent) and Elf (now Total) produced approximately 125,000 bbl/d (19,900 m3/d) since 1997, both on and offshore Nigeria.

A number of discoveries have been made in the Nigerian oil and gas industry in the last couple of years. Chinese oil producer Sinopec reported last year that its Addax subsidiary struck oil offshore Nigeria after the unit was acquired in 2009 to expand the company’s African presence.

Sinopec, also known as China Petroleum and Chemical Corporation, stated that one of its oil wells in the Niger Delta showed a heavy oil flow of 3,365 barrels and 28,300 cubic metres of gas per day in a test.

In a related development, Nigeria’s gasoline import allocations for the fourth quarter are being delayed as the National Assembly debates the removal of subsidies and as gasoline held in offshore floating storage surges to record levels

Nigeria insufficient refining capacity means it relies on fuel imports, mostly gasoline, for up to 85 percent of its oil product needs

About half of the country’s yearly gasoline needs are imported through swap exchanges arranged by a subsidiary of state-run Nigerian National Petroleum Corporation, NNPC, while the other half is organised independently through deals with Nigeria-based distributors.

President Goodluck Jonathan has proposed a plan to remove costly gasoline import subsidies, currently running at about 30 per cent. This could prove sensitive in a country where large sections of the population survive on less than $2 a day.

Finance Minister and Coordinator of the economy, Dr Ngozi Okonjo-Iweala, projected that fuel subsidies will cost Nigeria at least N1.2 trillion ($7.7 billion) this year.

The former World Bank official believes subsidies are a wasteful use of funds, as they are mainly paid to importers of refined products and do not reduce gasoline costs at the pump.

The Central Bank governor and other key officials have also said a necessary step in reforming the downstream oil sector and expanding sub-Saharan Africa’s second-largest economy will involve weaning Nigerians off hefty fuel subsidies, but the negotiations could drag on for months.

The debate is expected to prove controversial as many Nigerians regard cheap fuel as the only benefit they get from living in an oil-rich nation. Proposed fuel price increases in the past led to nationwide strikes.

Vitol in long-term deal to buy Nigeria crude

Meanwhile, an independent energy trader, Vitol, has entered into a long-term purchase agreement with Sterling Oil Trading and Sterling Oil Exploration for their new Nigerian Okwuibome crude oil production.

The company said the deal includes a pre-payment and long-term purchase agreement with Sterling Oil Trading and Sterling Oil Exploration, part of Sterling Global Oil Resources.

Vitol said the deal is estimated at 10,000 barrels per day (bpd) and is expected to grow to 25,000 (bpd) by the end of 2012.

The company has a licence to explore and produce crude oil from four onshore blocks with a total acreage of almost 2,000 square kilometres in Nigeria.

Sterling Global Oil Resources is part of the Sandesara Group, a diversified company with interests in oil and gas and oil trading, among others.