….‘Malabu to be divided into small blocks’

By Udeme Akpan

THE $10 billion Nigeria’s Bonga South West, Gongola Basin and Malabu, have been identified as the major oil and gas projects, with great prospect and lasting value, in Nigeria.

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In its latest report, obtained by Vanguard, Africa Oil Week (AOW), which noted that the Total-operated Egina project began production earlier in 2019, stated: “A Final Investment Decision (FID), is expected on the Bonga South West deep-water project after Shell and the NNPC invited bidders for the project’s execution in February 2019.

“The project will eventually cost $10 billion and is expected to produce 225,000 b/d and 270 million standard cubic feet per day (mmscfd) of gas at peak production by 2022 after first oil in 2021.”

It added: “More than 44 wells are planned as well as a 98-kilometre 16inch gas export pipeline. Bonga’s reserves mostly lie in OML 118 but also extend to OMLs 132 and 140, which are operated by Chevron. Total, ENI, and Sasol Petroleum all of whom are partners in the project. The Bonga project would be the first major deep offshore development after Egina.

“In the latest attempts to develop oil activities in the north NNPC’s Nigerian Petroleum Development Company (NPDC) subsidiary has announced an increase in exploration spending in the Gongola Basin in the North East region of the country.”

The report, which disclosed plans to divide Malabu into small blocs stated: “While the anti-corruption court case around Malibu Oil & Gas’ ownership of OPL 245 continues, the government is flirting with plans to divide the superblock into smaller blocks in the medium term. Although the proposed Nigeria-Morocco gas pipeline may eventually replace it, one project that has been on the drawing board for many years is the Trans-Saharan Gas Pipeline which would export 20-30 cm of Nigerian gas to Europe via Algeria. Bonga-oil-field

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“The 4,300-kilometre pipeline would connect the Warri region in Delta State northward through Niger to Beni Saf on the Algerian coast where it would be piped to Almeria in Spain. Upcoming Licensing Rounds Nigeria had announced that it would be holding bidding rounds for the licensing of subsurface hydrocarbon property for flared natural gas uptake in the Niger Delta, under the Nigerian Gas Flare Commercialisation Programme.”

The report stated: “Nigeria had around 37 billion barrels of oil reserves in 2018 of which 70 per cent was offshore and 30 per cent onshore and 189 tcf of proven gas reserves of which 44 per cent is located offshore and 56 per cent onshore. Oil remains the backbone of Nigeria’s economy and the sector has accounted for up to 60 per cent of the government’s revenues in recent years.”

The report which identified a few problems in the nation’s oil and gas industry stated:  “Historically, the sector has been disrupted by militant attacks on oil infrastructure and highly organised oil theft in the country’s southern Niger Delta region. Since January 2017, however, there have been a limited number of incidents in the Delta – aside from a small number of kidnappings and small-scale disruptions —, which has brought relative stability to the IOCs and indigenous producers. (Bonga)

In spite of fears that this stability would be disrupted in the run-up to the February-March 2019 elections, militant attacks have remained low scale which is a huge positive to the sector, although pipeline sabotage remains a major problem.

“With elections now passed, and a second four-term for the septuagenarian President Muhammadu Buhari and the ruling All Progressives Congress (APC), Nigeria can return to economic and political policymaking. A degree of political risk remains. Buhari’s principal opponent — Atiku Abubakar and his opposition Peoples Democratic Party (PDP) — has challenged the election results in the courts. They may take their challenge right up to the Supreme Court although Buhari’s margin of victory was so great that it is highly unlikely that the result will be overturned.” Meanwhile, corruption remains rampant across the country’s 36 states with a number of past and present governors facing ongoing indictments.”

“In the regulatory space, little can be expected of the long-delayed Petroleum Industry Bill (PIB), which is split into four sub-sections: the Petroleum Industry Governance Bill (PIGB); the Petroleum Industry Administration Bill (PIAB); the Petroleum Industry Fiscal Bill (PIFB); and the Petroleum Host and the Impacted Communities Bill (PHICB). The PIGB eventually passed through the National Assembly in mid-2018 but Buhari refused to sign it into law until changes were made. This acted as a major setback for industry stakeholders who had hoped the bill(s) would bring much-needed transparency to the sector. On the horizon, expect the renegotiation of some of Nigeria’s production sharing contracts (PSCs).”

However, in different interviews with Vanguard, some stakeholders, including, Mazi Bank-Anthony Okoroafor, Chairman, Petroleum Technology Association of Nigeria (PETAN), called for the immediate tackling of these and other issues that stare the industry in the face.

Vanguard