Country: Nigeria

The reopening of some refineries in Africa and the gradual commissioning of new facilities will mark the recovery of the continent’s downstream industry in 2023, according to Hawilti’s African Refineries Watch published today. While sub-Saharan Africa’s refining capacity is still under-utilised at some 40%, recovery is on the horizon with the re-opening of South Africa’s Astron Energy Refinery (100,000 barrels per day – bpd) and Ghana’s Tema Oil Refinery (45,000 bpd). Once both facilities are back in operations, the sub-continent will be able to utlise about half of its installed refining capacity. Refining capacity to get a boost in West Africa Ghana is also expecting to commission soon the Sentuo Oil Refinery, a 3 train multi-product crude oil refinery built within the Tema Industrial Zone with a targeted production capacity of 120 000 bpd. Its initial phase will have a capacity to produce 2 million tonnes per year (tpy) of petroleum products, almost doubling the country’s refining capacity. This is welcome news for Ghana who has seen its imports bill soar in recent months, reaching almost $4 billion in 2022 in premium and gasoil imports, according to the Bank of Ghana. But much larger change is currently happening in Nigeria, with the upcoming commissioning of the 650,000 bpd Dangote Refinery. The facility is scheduled to be inaugurated on May 22nd just before President Buhari leaves office and will cement Nigeria’s position as Africa’s leading refiner. Hawilti expresses cautious optimism on the commissioning of the Dangote Refinery, pointing to the complex and lengthy process required to reach full production. In its most recent report on Nigeria, the IMF for instance did not expect the refinery to reach full capacity right away, assuming a production of only 100,000 bpd in 2024 and 200,000 bpd in 2025. Meanwhile, Nigerian modular refineries have managed to navigate the country’s challenging business environments and found ways to secure new feedstock options to run small-scale facilities. Both the 1,000 bpd Edo Refinery and the 2,500 bpd Duport Midstream Refinery for instance are currently receiving crude oil by trucks from a marginal field in the Niger Delta to support their operations. The Edo Refinery is also undergoing significant expansion, with owner AIPCC Energy expecting to reach a capacity of 30,000 bpd at the end of this year and up to 100,000 bpd in 2024. “The drive to develop downstream assets with emphasis on refineries in emerging economies coupled with global energy volatility and evacuation challenges in some African countries is fueling the interest in the development of modular refineries,” declared Souheil Abboud, Managing Director at VFuels LLC. “The benefits of decentralizing refining infrastructure are one of the main reasons for the growth of modular refineries in Africa, and especially Nigeria. We are surely witnessing a growing demand for more sustainable infrastructure assets and an interest from Nigerian developers to integrated low-carbon electrification options within their future refining infrastructure. VFuels is proud to have completed an engineering FEED package that integrates renewable power solution for a refinery project in Nigeria.”

Thor Explorations Ltd, a Canada-based mineral exploration company with interests in Nigeria, Senegal and Burkina Faso, has launched a Nigerian subsidiary to explore the country’s lithium potential as Africa’s biggest economy seeks to diversify its economy beyond oil and gas. Newstar Minerals Ltd, Thor’s newly formed Nigerian subsidiary, is looking to develop its first large-scale lithium mine in the country. The company has already acquired over 600 kilometres squared of granted tenure covering two known lithium bearing pegmatite deposits and one large unexplored prospective pegmatite-rich belt.   Located in Nigeria’s southwest, the tenure covers West Oyo, Kwara State and Ekiti State lithium project areas. Initial field inspection and selective sampling of key sites have returned significant lithium grades from both hard-rock spodumene and lepidolite mineralisation, the company said. It will also continue to prioritise explorations at Segilola gold mine in Osun State, also in Nigeria. “While gold remains fundamental to our growth strategy, we consider the virtually untapped lithium potential of Nigeria to be an opportunity that is too good to miss,” Chief Executive Officer at Thor Explorations Segun Lawson said in a company statement, adding the company will leverage its established in-country presence, experience and first-mover advantage. “We intend to develop both businesses (gold and lithium) without any shareholder dilution.” In 2021, Thor Explorations poured first gold from its Segilola mine as Nigeria’s first industrial gold project entered production. The company spent nearly $100 million to build the mine. Africa Finance Corp., the company’s largest shareholder, provided an $86 million debt-equity financing package. Thor said the Segilola plant produced 98,006 ounces of gold in 2022, which was its first full calendar year of commercial production. Boosting economic growth with mining Nigeria, Africa’s largest oil producer, has substantial untapped deposits of metals including gold, zinc, lead, iron ore and lithium, but nearly all extraction takes place informally on a small-scale or manual basis. As a result, crude oil sales have continued to account for more than 75% of export earnings, leaving the country vastly reliant on oil. Successive governments have pledged to significantly increase mining’s contribution to gross domestic product, which currently stands at less than 1%. In 2017, the World Bank provided around $150 million to the Nigerian government to develop the mining sector, attract investments and enhance its contribution to the economy. Since then, the mining sector has witnessed some sustained growth in its contribution to the country’s GDP, contributing 0.85% in 2022 haven grown from 0.18% in 2018. Mining made up 4% to 5% of Nigeria’s GDP in the 1960s and 1970s, before major operations shut down and crude oil became the government’s major driver of revenues. The new administration of President Bola Tinubu says he wants to boost Nigeria’s GDP by stimulating the growth of non-oil sectors, giving hopes to the revival of some key sectors, such as mining, that were underperforming.

Lagos has officially launched the pilot programme for the implementation of its electric vehicle (EV) mass transit buses in the Nigerian commercial hub, as it pushes to become a modern-state with investments in green and modern transports. The Lagos Metropolitan Area Transport Authority (LAMATA) is partnering with Oando Clean Energy Limited (OECL) to launch the proof-of-concept with two electric buses that will ply the Bus Rapid Transport (BRT) lanes in the state. The mass transit bus, equipped with air conditioning and WIFI, comes with a capacity of 80 passengers for both seating and standing commuters. OECL has taken delivery of some charging stations and spare parts. OECL, a subsidiary of the Nigerian multinational oil company Oando, is teaming up with China’s bus maker Yutong to put 12,000 electric buses on Nigerian roads over the next seven years. The partnership between Oando and Yutong also envisages the construction of a local assembly plant for the electric buses to boost indigenous capacity. Partnerships for sustainable public transport “This is a pivotal moment for Lagos State and the country at large,” CEO at OCEL, Ainojie Irune, said in a statement. “The development of a sustainable transport ecosystem is much more than the deployment of electric vehicles; it’s about reducing the carbon footprint of the seven million public transport commuters and positively impacting the socio-economic indices surrounding transportation. For us at OCEL, Lagos State is only the beginning, we look forward to replicating this model nationwide through strategic partnerships across the public and private sectors.” Lagos State, Africa’s largest city with roughly 30 million people, is expected to save some $2.6 billion in fuel and maintenance costs, as it transits from the current combustion mass transit system to an electric powered scheme. “This is a watershed moment for Yutong,” Managing Director, Yutong West Africa, Frank Lee, said. “It’s our first delivery of electric mass transit buses in Sub-Saharan Africa and the first step in the large-scale deployment of an electric powered public road transport system in Nigeria. I must commend the collaborative efforts of the Lagos State Government through LAMATA in seeing this project through.” Lagos is modernising its logistics infrastructure for urban mobility. Despite delays, the state has made steady progress on its Lagos Rail Mass Transit network currently being developed under the Lagos Strategic Transport Master Plan. The development of the master plan was supported and funded by the World-Bank and notably identified 14 Bus Rapid Transit (BRT) corridors, six rail lines and one monorail.

Nigeria has approved seaport development projects in three states of the country’s southern region as part of push to expand port infrastructure and services that will boost revenue in Africa’s biggest economy. The Federal Executive Council’s approval will allow the development of the Ondo Multi-purpose Port in Ilaje, Ondo State; the expansion of Snake Island Terminal in Lagos State; and the expansion and development of Burutu Seaport in Delta State; all through public-private partnerships (PPP). By 2030, Africa’s Blue Economy, a key priority area of the African Union’s Agenda 2063, is estimated to grow to $405 billion, generating 57 million jobs, according to the African Union. For Nigeria, the development of seaports projects could strengthen its position as a major hub and gateway within Africa’s growing maritime economy.   As the Nigeria Ports Authority confirmed the approval of seaport projects in the states of Ondo, Lagos and Delta, the Authority provided insights into what it means for Nigeria and development partners. Ondo Deep Sea Project The Ondo State Government, along with its partners, incorporated the Special Purpose Vehicle (SPV) Port of Ondo Development Limited to design, finance, operate, maintain, and transfer the Ondo Multi-Purpose Deep Sea Port at a total project cost of $1.48 billion. It’ll be fully funded by the proponent for a concession period of 50 years. Projected revenues accruing to the Federal Government are expected run into $50 billion in royalties and other fees in marine services, while the proponent is expected to receive USD $2.6 billion in profits throughout the concession tenor. The Ondo Deep Sea Project will be developed in two phases. Snake Island Port According to the Nigeria Ports Authority, this project would expand the existing port facility from the current single berth to 4 terminals with 3 km of quay, 7 ship berths, and 11 barge berths, with 6 to 13.5 meters of the draft on a total area of 90 hectares. It would comprise container, bulk, and multipurpose (general cargo/RoRo) terminals. The Snake Island Port facility, located within the Snake Island Integrated Free Zone (SIIFZ), would be expanded at a total cost of $974.1 million for a concession period of 45 years. Projected revenues accruing to the Federal Government stand at $18 billion in royalties and marine services, while the proponent is expected to receive $5.23 billion in profits throughout the concession tenor. Burutu Port Project The Burutu Port project in Delta State, proposed by Messrs. Akewa Colmar Services Ltd., has been conceptualized as a mining, inland transportation, logistics base, operating as a transshipment hub for the provision of other port services in western and central Africa. As part of the project, the old port at Burutu will undergo rehabilitation while a greenfield port, proposed for Agge in Delta State, would be developed. The project is estimated to cost $1.2 billion for a concession period of 40 years. Projected revenues accruing to the Federal Government stand at $125 billion in royalties and marine services, while the proponent is expected to earn $9 billion in profits throughout the concession tenor. The project will be developed in three phases. Revamping ports infrastructure for growth and development “These projects are the results of the Federal Government’s drive, through the Federal Ministry of Transportation (FMT) and the Nigerian Ports Authority (NPA), to improve port services, increase revenues, and take pressure off the existing ports and critical infrastructure,” the NPA said in a statement, adding the Infrastructure Concession Regulatory Commission (ICRC) have issued Certificates of Compliance to the port projects. Many of Nigeria’s existing seaports, inherited from the colonial administration, have struggled to function efficiently over the years. But the country is ramping up investments to reverse the trend. At the beginning of this year, Nigeria commissioned the Lekki Deep Seaport, next to the Dangote Refinery, on the east of Lagos. The port, which is the largest in Nigeria, is expected to end cargo congestion in Lagos and cut waiting times offshore.

by Wale Yusuff, Managing Director of Wärtsilä in Nigeria Wale Yusuff, the Managing Director of Wärtsilä in Nigeria, explains how businesses operating in energy-intensive industries like cement or steel are investing in flexible engine technologies to secure reliable and efficient power while also setting the perfect stage to make good on their decarbonisation objectives. Nigeria is a major industrial hub. It is home to energy-intensive manufacturing businesses whose operations, and growth potential, are constrained by the weakness of the country’s electricity supply. To mitigate this, industrial companies have been building their own power generation capabilities, but the result has often been the reliance on expensive and polluting diesel generators. As such, the industrial sector represents one of the country’s largest sources of greenhouse gas emissions. In most places in Africa, the development of renewable energy capacity is a very competitive solution that industrials can adopt to lower their environmental impact and energy costs. But things aren’t as clear-cut in Nigeria. Most of its industrial activity is in the south, a region where wind and solar resources are often not available in the right quantity to make renewables competitive at today’s equipment prices. It leaves industrials with a twin challenge to meet. First and foremost, they need to secure their own reliable and affordable power capacity either by buying electricity from an independent power producer or by building their own “captive” plant. Second, they need to integrate decarbonisation in their overall energy strategy. Both objectives are not contradictory. By making smart technology choices, forward looking businesses like BUA Cement, African Foundries, Lafarge, Wempco, Nestle and Flour Mills have found a way to hit these two birds with one stone. Here is how. Securing a reliable supply of electricity Mitigating power generation risk is critical to Nigeria’s industrial growth. As one of the world’s largest producers of liquified natural gas (LNG), Nigeria has a strong interest to develop its utilization to power local industries. That’s why flexible engine power plants have emerged as the technology of choice for Nigeria’s industries. Fuel-flexible engine technology provides a great hedge against fuel supply risk as it can operate on multiple types of fuels, from gas to heavy or light fuel oil, and switch between fuels while operating. This fuel-flexibility is also a key enabler to the decarbonisation strategy of industrials, as engine power plants can be converted to run on sustainable fuels like biofuels and green hydrogen, ammonia, or methanol, when these become available. Thanks to their modular design, Wärtsilä engine power plants are easy to construct, fully scalable and can be deployed in phases. They have the flexibility to be ramped-up or down quickly to adjust to demand, they have a high operating efficiency even at partial load and are designed to cope with regular stops and starts. This very high operating flexibility is also what is needed for the future integration of intermittent renewable energy capacity to the power mix. What is more, they require much less water to function than competing power technologies, which is an important water conservation consideration in view of Nigeria’s long dry seasons.  With all these attributes, flexible engine power plants offer a cost-effective solution to meet energy demand in the short term, and environmental objectives in the longer term. BUA Cement PLC, one of Nigeria’s largest cement producers, is one example of an energy intensive industrial company which has invested to secure its own flexible and reliable power supply and decrease its carbon footprint. As the demand for cement is increasing every year, BUA has taken advantage of the modularity of engine technology to increase its power capacity in stages. The company is currently installing a 70 MW power plant for the line 4 in its Sokoto cement plant, NW Nigeria. This is in addition to a 50 MW power plant commissioned two years earlier for the line 3 of the same cement plant. Future expansion plans include another 70MW for its OBU line 3 cement plant in Edo State SW by the end of 2023. The plants feature Wärtsilä 34 DF dual-fuel engines operating primarily with LNG and PNG, but with the flexibility to switch to an alternative fuel should there be interruptions to the gas supply, quality, or pressure. What is more, the operational flexibility of the Wärtsilä engines provides future-proofing advantages by enabling the potential integration of renewable energy further down the line. Paving the way for renewables Nigeria’s long term energy strategy has defined the rapid deployment of renewables and strengthening the power transmission network as key objectives. But it must also overcome the specific challenges of the tropical monsoon climate in the industrialized south of the country where the solar and wind potential is respectively 30% and 40% lower than in the hot and semi-arid conditions in the north. By investing in gas engine power plants, energy-intensive industries will not only decrease their carbon footprint, but they will also free up resources for the government to expand the transmission network enabling the entire country to benefit from the natural gas reserves located in the south and renewable resources in the north. Paras Energy sets an example of how this can work. Since installing a 132 MW Wärtsilä gas engine power plant in Ikorodu in Lagos State and Ogijo in Ogun State, Paras Energy is supplying the company’s steel production needs as well as providing power to the Nigerian grid to support over 20,000 homes annually. The company is now commissioning a 10 MW solar power plant in Suleja and a 5 MW solar rooftop system for commercial and industrial customers is under development.  Flexible engine power plants represent a smart and future-proof investment for Nigeria’s energy intensive industries. They offer the efficient power capabilities needed to offset the shortcomings of the national power grid, strengthen their global competitiveness, and reduce their GHG emissions today and tomorrow. By working towards the country’s decarbonization targets, the smart energy investments made by industry will benefit the whole country. 

Nigeria produced 37.35 million barrels of crude oil and condensate in April this year, loosing 10 million barrels from its March production levels, according to data from NUPRC. This brought the country’s average daily oil production below the 1 million barrels of oil per day (bopd) threshold, in a country where production capacity stands at over 2 million bopd. Africa’s largest oil producer continues to be hit hard by severe crude theft from onshore assets. These used to represent almost 40% of production before COVID-19, but their share of output fell to only a fourth of the country’s daily oil and condensates volumes last year.   Despite intense efforts from authorities to curb crude theft, results have been limited. “From March 2022 to March 2023, we removed 460 illegal connections on the Trans-Niger Pipeline so we could lift force majeure from our Bonny Terminal,” said Osagie Okunbor, Chairman of the Shell Companies in Nigeria, at the recently concluded Nigeria Energy Summit in Abuja. “However, we are now struggling to catch up our repair programs vis-à-vis new attempts to steal crude oil,” he confessed. So far, Shell’s Bonny Terminal has been able to export only between 2 and 3 million barrels per month in 2023, against traditional monthly volumes of 6 to 8 millions three years ago. But the biggest blow to the country’s production came from a wide strike organized by ExxonMobil workers in April 2023, forcing the American major to declare a Force Majeur at its four terminals in Nigeria. Data from NUPRC shows a loss of 4.6 million barrels at the ExxonMobil terminals between March and April 2023, including at Qua Iboe (-2.3 million barrels), Erha FPSO (-1.3 million barrels), Usan FPSO (-480,000 barrels) and Yoho FSO (-473,000 barrels). ExxonMobil was only able to resume normal operations at the end of April after successful negotiations with the workers. In its most recent report on Nigeria’s upstream industry, Hawilti forecasted a total production of some 1.57 million barrels per day in 2023. The forecast remains heavily dependent on a recovery of onshore volumes by implementing crude theft mitigation measures.

A new Joint Venture agreement is aiming to invest in a range of carbon avoidance and removals projects in Nigeria as part of efforts to support the energy transition plan in Africa’s most populous country. The Nigeria Sovereign Investment Authority and Vitol, a global energy and commodities company, completed the Carbon Vista JV . Both parties made an initial commitment of $50 million to the new venture. The JV’s first investment will go into a household energy efficiency programme. It includes an initial deployment of up to 200,000 devices each for clean cooking. “Nigeria’s Energy Transition Plan (ETP) requires a radical rethink of our energy consumption mix beginning from the micro-level,” says Aminu Umar-Sadiq, Managing Director, and Chief Executive Officer of the Nigeria Sovereign Investment Authority (NSIA). The NSIA manages the Nigeria sovereign wealth fund where surplus income from Nigeria’s excess oil reserves is deposited. During last year’s COP27, Nigeria joined several African nations to announce its commitment to scaling voluntary carbon markets as part of the Africa Carbon Markets Initiative (ACMI). African leaders, CEOs, and carbon credit experts are involved in the initiative.  ACMI seeks to produce 300 million carbon credits annually by 2030, and 1.5 billion credits annually by 2050. The latest JV brings Nigeria closer to meeting these ambitious targets. “Without incremental steps to address the fundamental issues, the ETP’s goals may remain unrealised and further exacerbate our climate risks,” says Aminu Umar-Sadiq. “Carbon Vista adopts a pragmatic approach to these challenges. We are pleased to be leading this novel path for delivering Nigeria’s net-zero targets.” Partnerships for clean energy The JV will commence with projects in Nigeria, partnering with local firms with proven track records of successfully delivering high-quality projects. Investments will focus on various sectors including infrastructure, agriculture, and energy.  Energy remains a critical issue for Africa. Household air pollution from traditional stoves and polluting fuels is reported to cause over four million premature deaths annually in the region.  “This joint venture should be a catalyst in the creation of the domestic emissions trading scheme,” says Michael Curran, Head of Environmental Products at Vitol. The JV, Michael Curran says, will create a pipeline of high-quality credits into the global voluntary carbon markets. “When combined with a comprehensive corporate energy transition strategy, offsetting will play a key role in meeting the Paris Climate Agreement objectives and contribute toward the UN Sustainable Development Goals.” According to the 2022 Africa Energy Outlook, Sub-Saharan Africa is struggling to increase access to clean-cooking-technology – a trend exacerbated by recent spikes in the price of cooking gas – leaving almost 1 billion people without access to clean cooking.  Experts say global efforts to increase clean cooking access will need to target the continent with greater intensity. That way, they say, Africa can achieve the UN Sustainable Development Goals on access to affordable, reliable and modern energy for all. Nigeria’s Vice President Yemi Osinbajo says the Energy Transition Process remains a tough process.  “It’s especially tough for those of us who are from gas-rich countries and fossil fuel-rich countries,” notes Vice President Yemi Osinbajo. “For countries like ours rich in fossil fuel, we also find ourselves in a situation where we are energy poor. I believe Africa can become the first truly green civilisation to use renewable fuel for purposes of a transformative economic journey.”

Nigeria’s NNPC announced on March 6th the appointment of NNPC Eighteen Operating Ltd as operator of Oil Mining Lease 18 (OML 18) onshore Nigeria by the block’s non-operating joint-venture partners. OML 18 is operated by Eroton Exploration and Production Co. (27%) while non-operating partners include NNPC (55%), OML 18 Energy Resource (Sahara Group, 16.2%) and Bilton (1.8%). Eroton was removed as operator of the joint-venture to protect the partners’ investment in OML 18, NNPC said. OML 18 has been unable to produce oil for several months due to the unavailability of the Aiteo-operated Nembe Creek Trunk Line (NCTL) that provides a connection to Shell’s Bonny oil export terminal. As a result, production has fallen from some 30,000 barrels of oil per day (bopd) a few years ago to zero for most of last year, data from NNPC shows. In comparison, Eroton E&P’s initial intention after taking operatorship of the asset in 2014 had been to increase production to 115,000 bopd of oil and 485 MMscf/d of gas. Such performance is deemed unsatisfying for an asset that covers 1,035 km2 and contains 11 discovered oil and gas fields with 714 million stock tank barrels of oil and condensate and 4.7 trillion cubic feet (Tcf) of gas reserves, according to NNPC. However, Eroton E&P is not the only to suffer from reliance on the NCTL. Data from NNPC shows that all neighboring blocks and joint-ventures who rely on that pipeline have been unable to get oil to market since April 2022. To mitigate the impact of crude theft and pipeline losses, an Alternative Crude Oil Evacuation System (ACOES) had been approved by the partners to barge oil to a floating, offloading and storage (FSO) vessel offshore Bonny. While limited barging reportedly started in June 2022, COVID-19 and delays in mooring the FSO have postponed the commissioning of the ACOES and prevented resumption of production. San Leon Energy’s Transactions The replacement of Eroton E&P as operator comes at a time when LSE-listed San Leon Energy is working to secure a controlling interest over Eroton E&P, OML 18, and the ACOES project. The company already owns 40% of Midwestern Leon Petroleum Ltd (MLPL), the entity that owns Martwestern, which itself owns 98% of Eroton E&P. In July 2021, San Leon signed Heads of Terms to reorganize MLPL and acquire the remaining 60% of the company from Midwestern Oil & Gas. Such a transaction would increase San Leon’s indirect economic interest in Eroton E&P from 39.2% to 98%. In parallel, Eroton E&P is planning to acquire Sahara Group’s 16.2% and Bilton’s 1.8% interests in OML 18, with funding from the Afreximbank. The consolidation of Eroton E&P’s interest in OML 18 is one of the conditions that must be completed for San Leon to proceed with its reorganisation of MLPL. If Eroton was to consolidate its interest in OML 18, and if San Leon was to secure a controlling interest of Eroton, its indirect economic interest in OML 18 would increase from 10.58% to 44.1%. In parallel, San Leon has also invested in the ACOES being developed for OML 18 and owns 10% equity plus a conditional further 3.323% equity in ELI Malta, the owner and operator of the ACOES project. In July 2022, a Reorganisation Agreement was signed, whose completion would increase San Leon’s interest in ELI to 50.64%. The appointment and replacement of Eroton E&P as operator of OML 18 throws uncertainty both over San Leon’s transactions but also over redevelopment plans for one of Nigeria’s biggest assets in reserves size and infrastructure capacity. Since this article was first written, Eroton E&P has categorically contested NNPC’s move. “We hereby re-iterate that Eroton remains the Operator of OML-18 in line with the provisions of the JOA and any dispute whatsoever between the parties are reserved exclusively for resolution under the Dispute Resolution clause of the JOA. The actions of the other JV partners (NNPC and Sahara) remain illegal and run contrary to the rule of law and in total breach of the terms and conditions stipulated in JOA,” the company said in a statement. This article was updated on March 14th to reflect Eroton E&P’s position and statement.

Despite a very tight offshore rig supply market, 2023 might set a new 10-year high for Africa’s offshore drilling market as several development, infill, and exploration campaigns get executed this year. According to the Offshore Rigs Tracker released this week by Hawilti and the Caverton Offshore Support Group (COSG) Plc, over 30 rigs are already confirmed to be active offshore sub-Saharan Africa this year, with more in the pipeline. Angola will continue to dominate the market like it has for a couple of years. The country has six floaters already contracted until at least 2024. Based on its pipeline of brownfield and greenfield projects, it will continue to drive deep-water drilling activity until at least 2026. All international oil companies (IOCs) have active rigs in the country, especially TotalEnergies (3), Azule Energy (2), Chevron (1), and ExxonMobil (1). They are actively pursuing infill drilling campaigns and subsea tie-back schemes on their producing FPSO units, while targeting infrastructure-led exploration opportunities. “We continue to witness an upsurge in drilling activity offshore West Africa despite the offshore rigs supply getting tight,” said Capt. Ibrahim Bello, Managing Director of Caverton Helicopters. “More drilling contracts are currently in negotiations across the region for both exploratory and development drilling, which could make 2023 one of the biggest years for offshore drilling activity on the continent since the crisis of 2014.” Nigeria’s offshore industry is also maintaining the momentum of drilling activity it saw in 2022 with at least five offshore rigs scheduled to be active in the country this year. Shell’s subsidiary SNEPCO and TotalEnergies both have floaters mobilized for most of the year on their respective deep-water blocks, OML 118 and OML 130. However, most of Nigeria’s demand is for jack-ups in shallow water, driven by key players such as Chevron, First E&P, General Hydrocarbons, and Damas E&P. After Angola and Nigeria, the Republic of Congo and Gabon are the next most active offshore drilling destinations in sub-Saharan Africa. Both countries are seeking to mitigate their production decline with additional infill drilling, development drilling, and exploratory drilling. Several campaigns are currently taking place there, including exploratory drilling by Eni in Congo and CNOOC in Gabon. Across the rest of the continent, significant development and exploratory drilling campaigns are also on the table this year, including in Senegal and Namibia. While the former is drilling to start producing oil and export LNG, the latter has all the industry’s attention as both Shell and TotalEnergies seek to confirm significant oil and gas discoveries made in the Orange Basin. The Offshore Rigs Tracker Q1 2023 can be downloaded for free here.  

Hawilti released an important new study on Gas for Africa in partnership with the International Gas Union (IGU), assessing the potential for domestic gas resources to energise Africa in line with the global energy transition. The African Energy Commission (AU-AFREC) and the Africa Finance Corporation endorse the report and its findings. The study starts by analysing current energy poverty trends in Africa, a continent with the lowest electricity per capita consumption in the world and the lowest CO2 per capita emissions. It argues for a pragmatic use of natural gas reserves to support a broad industrial and economic development of Africa in a way that is sustainable and enables a just energy transition. Mickael Vogel, Director & Head of Research, Hawilti “Energy poverty in Africa often boils down to the number of people without access to electricity – 600 million, or without access to clean cooking – 970 million. Unfortunately, this assessment misses the point and can lead to responses and solutions that are ill-adapted to Africa’s development needs. As it argues for a better use of gas, the report calls for more ambitious targets around energy access so that we can both bridge Africa’s energy deficit but also support economic growth and industrialisation.” The ”Gas for Africa” report highlights several ways in which gas can have a positive impact on Africa’s socio-economic development including by switching away from coal and diesel, developing energy-intensive industries and gas-based industrialisation, displacing fuelwood and biomass in households, generating baseload electricity to integrate intermittent energies, and building gas systems that can be decarbonisable in the future with hydrogen, renewable gas, and CCUS. However, a pragmatic utilisation of Africa’s 18 Tcm of proven gas reserves – or 9% of the world’s reserves – calls for a reorientation towards domestic monetisation. Most of the gas produced in sub-Saharan Africa remains exported, with local consumption still limited because of limited infrastructure availability. Additional barriers include limited access to capital, security risks, and policy uncertaint.y To overcome these key barriers to development, a total of eight guiding principles are given as recommendations to help stakeholders and policy makers navigate the complexity of the gas industry: The full report is available for download here.

Three-quarters of the world is covered by water and up to 90% of world trade is seaborne. Seaports and shipping are critical to the conduct of global trade. Africa has relatively few natural harbours that offer shelter and are deep enough to take big vessels. Along the Atlantic coastline of West Africa, for instance, natural harbours exist only at Freetown and Lagos. Consequently, artificial ports have been carved out of lagoon and river ports, which dot the coastline from Morocco to South Africa. Considerable capital and engineering know-how have been applied since the late nineteenth century to make African ports accessible to ocean shipping. Since the 1990s, African countries have engaged in a “ports race” to emerge as the shipping hub for their region. In this context, the recent completion of the US$1.5 billion Lekki Deep Sea Port in Lagos, Nigeria, is significant. Lekki is one of Africa’s top six ports. It is Nigeria’s first fully automated port, and its largest. It has more than doubled the capacity of Lagos’ ports, which had remained the same for 25 years. It will accommodate the world’s largest cargo ships and is expected to reduce cargo wait times from over 50 days to two days. Its modernity and efficiency are projected to make Nigeria a regional hub and boost the country’s GDP. It is envisaged to generate 170,000 direct and indirect jobs, billions of dollars in tax revenues for Lagos State and the host community, and a turnover of US$361 billion over the next 45 years. My work on the economic history of African seaports supports the view that the Lekki Deep Sea Port could serve as a pivot of local and regional development. The project should have multiplier effects on commerce, industry, agriculture and small-scale enterprises connected to it by various modes of transport. A combination of factors will determine its success. These include its capacity to meet the demands of shipping; its efficiency and competitiveness in the national and international contexts; the coordination of policies; the way transport modes work together; the state of the inland economies; and the application of technology. Nigeria’s port history In colonial Nigeria, significant port development took place between 1850 and 1950 for the economic benefit of Britain. Shipping was concentrated at a few ports during the world wars and the Great Depression (1929-33). But increasing imports and exports in prosperous times required more functioning ports to cope with the greater volume of trade. Lagos and Port Harcourt gained prominence because they had railway links to the hinterland. Port Harcourt was created as an outlet for the coal exports from Udi, near Enugu in eastern Nigeria, and the tin exports of the Jos Plateau. Lagos had become the leading port in West Africa following extensive harbour works between 1892 and 1914 when it welcomed its first ocean liner. It handled the bulk of Nigeria’s foreign trade right into the independence period. The civil war of 1967-70 compelled the adoption of a policy of port concentration at Lagos. Port congestion at Lagos was aggravated by the demands of post-war reconstruction. Massive oil revenues, following the 1973 Arab-Israeli conflict, funded massive imports. Poor planning saddled Nigerian ports with an armada of cement-laden ships in the late 1970s. The congestion imposed huge demurrage costs on the country. And containerisation, which existing seaports were unsuited to handle, made it necessary to expand Apapa Port and create the Tin Can port in Lagos in 1977. During the 1980s and 1990s, the growth of the national economy outstripped the installed capacity of Nigerian ports. At the same time, Nigerian ports attained increasing notoriety for inefficiency, decaying infrastructure, uncompetitive tariffs and systemic corruption. Other West African ports offered better services – so traffic went there instead. The Nigerian government eventually in 2005 adopted the landlord model of port administration: state control was replaced by a system of concessions. This improved port services, but did not bridge the gap between capacity and volume of container traffic. Thus the idea of the Lekki Deep Sea Port was conceived. Lekki port’s potential Lekki is expected to generate direct and induced business revenue estimated at US$158 billion, a qualitative impact on the manufacturing, commercial and services sectors, and a multiplier effect over 230 times the cost of construction. It will attract a massive influx of people, businesses and investment. The new facility will support the industrial and petrochemical complex, including the Dangote Refinery, the largest in the world, situated in the Lekki Free Trade Zone. It is poised to attract investment in the range of US$20 billion in the first few years. With an airport in the vicinity, the port will be a component of a Harbour City equipped with logistics infrastructure of various kinds. Lekki port should reduce congestion at the older ports in Lagos and help recover the lost traffic of landlocked Chad and Niger, which had been diverted to more efficient ports in the sub-region. The port also positions Nigeria to optimise the African Continental Free Trade Agreement. Weak Points However, it appears that the project suffered from some lapses in planning. Provision for cargo evacuation by rail is non-existent, and the road infrastructure is inadequate for the anticipated volume of traffic. The other challenge is the encroachment on land around the Lekki port and the future problem of congestion. Unless the state government takes drastic action under the Land Use Act to acquire land in the public interest for the future expansion of the port, it will be a repeat of the problems of older ports hemmed in by unplanned industrial, urban and commercial land use. The project indicates that public-private sector partnership is the best way to plan and deliver landmark infrastructure projects. Lekki Port LFTZ Enterprise Ltd was created for the purpose, with investment by China Harbour Engineering Company Ltd, Singapore’s Tolaram Group and the Nigerian government. But it has the potential drawback of idle capacity if the economic prospects that motivated it fail to materialise. Then the huge investment in the deep sea port project would become a huge burden of unpaid debts. This article is republished from The Conversation under a Creative Commons license. Read the original article.

TotalEnergies is expected to start its much-anticipated infill drilling campaign offshore Nigeria in February 2023, its partner Africa Oil Corp. has said. The major has been planning a new drilling campaign on its flagship deepwater block OML 130 for some time, with an initial start scheduled for Q3 2022. The campaign will focus on infill drilling and could target up to 9 wells, including 2 exploration/appraisal ones.  Exploratory drilling could notably focus on the Egina Ridge and Egina South prospects. “The rig contracted to drill the Egina infill wells is expected to commence operations in February 2023, after obtaining its final regulatory approval,” Africa Oil Corp. said in a production and operational update released today. The company is a 50% shareholder in Prime Oil & Gas, which itself holds a 16% interest in OML 130. While the rig selected is yet to be announced, Hawilti’s Offshore Drilling Tracker shows that Noble Corp.’s Gerry de Souza drillship is a likely candidate. The rig completed a drilling campaign for TotalEnergies offshore Suriname in December 2022 and arrived in West Africa at the end of last year, data from Marine Traffic shows.

RusselSmith, one of Nigeria’s leading oil & gas maintenance and inspection solutions companies, has joined the Roboze 3D Parts Network. The Nigerian services company is now part of a network of specialized additive manufactured centres that use Roboze ARGO Production technology and are able to deliver on complex designs and difficult engineering challenges.   “We are excited to introduce industrial 3D printing to the Nigerian market by joining the Roboze 3D Parts Network. This innovative just-in-time manufacturing solution allows our customers to replicate and replace hard-to-obtain OEM parts locally in a fraction of the time that it takes to source and ship them, thereby reducing costs, improving uptime and optimising their supply chain,” said Kayode Adeleke, CEO of RusselSmith. By joining the Roboze 3D Parts Network, RusselSmith wants to bring industrial 3D printing in Nigeria and set up the foundation for a digital supply chain in West Africa. The company has always been at the forefront of innovation in the Nigerian oil & gas industry, first introducing rope access technology to the market several years ago and following it up with other innovative solutions, especially in subsea services. In cooperation with Kongsberg Ferrotech of Norway, RusselSmith is already offering a unique underwater robotic pipeline repair technology that is now approved and certified by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The oil & gas sector knows no break and has had its fair share of developments over the past two weeks. Here is what you need to know as you get back to the office. Mozambique has announced the results of its 6th Licensing Round On December 21st, Mozambique revealed the results of its 6th Licensing Round, which resulted in the award of only six blocks out of the 16 license areas that were proposed. The China National Offshore Oil Corporation (CNOOC) secured five blocks over the Save and Angoche Basins and Eni Mozambique securing one license in the Angoche Basin. None of the areas within the Zambeze Basin were awarded. “The Exploration programs proposed for the first sub-period of the Exploration Period have the potential to allow investments amounting to approximately $369.8m, foreseeing the acquisition of 31,200 Km2 of 3D seismic, opening of a minimum of four wells in deep water, and other geoscientific studies,” the National Institute of Petroleum (INP) said in a statement. Nigeria has launched a Mini Bid Round for deep-water blocks On December 21st, Nigeria announced its Mini Bid Round 2022 and put seven deep-water blocks on offer covering some 6,700 km2. A pre-bid conference is scheduled for January 16th while pre-qualification applications mut be submitted by January 31st. Under the new PIA regime, the blocks on offer are PPL-300-DO (former OPL 312); PPL-301-DO (former OPL 313); PPL-302-DO (former OPL 314); PPL-303-DO, PPL-304-DO, and PPL-305-DO (the three used to form IPL 318); and PPL-306-DO (former OPL 327). This Mini Bid Round will be a test for Nigeria’s attractiveness and competitiveness after a full overhaul of its oil & gas regulatory regime with the adoption of the PIA in 2021. Eni has selected a provider for its second FLNG unit in Congo-Brazzaville On December 22nd, Eni announced the signing of a contract with Wison Heavy Industry of China for the construction and installation of a 2.4 mtpa floating LNG unit in the Republic of Congo, offshore Pointe Noire. The unit will be the second FLNG facility of Eni in Congo since the company expects to commission this year the 0.6 mtpa Tango FLNG vessel it acquired from Exmar a few months ago. Both units will be monetizing associated gas from the Marine XII permit. Total Gabon expanded its upstream portfolio in Central Africa On December 26th, TotalEnergies EP Gabon extended its presence in Gabon with the signing of a new Exploitation & Production Sharing Contract (EPSC) over the Baudroie-Merou-Marine G5-143 permit. The 25-year agreement will run until 2047. “We remain fully committed as an energy producer in Gabon. We will maintain our investments to reduce greenhouse gas emissions by valorising associated gas and will continue to implement actions to maintain our production,” said Henri-Max Ndong-Nzue, President of TotalEnergies EP Gabon.  Invictus Energy has finished drilling its first wildcat onshore Zimbabwe On January 3rd, Invictus Energy confirmed that technical and operational issues prevented a discovery at its Mukuyu-1 wildcat well onshore Zimbabwe. However, multiple potential gas bearing reservoir units were encountered and the well did prove the existence of a working hydrocarbons system. The Rig 202 is currently warm stacked on site for maintenance and upgrades and will recommence drilling operations later this year. Invictus Energy is considering an appraisal well (Mukuyu-2) or the drilling of Baobab-1. As a result, the contract with EXALO Drilling for the rig has been extended by another 12 months.

Nigerian LNG distribution company Bridport Energy has made new appointments to its Board of Directors, the company has said today. Engr. Ahmadu-Kida Musa and Mr. Auwalu A. Ilu, two experienced energy executives, have joined the company as Non-Executive Directors effective 1st October 2022. Both directors are well-known within the Nigerian oil & gas sector, where they have successfully held leadership position within international and local companies.  Engr. Ahmadu-Kida Musa has over three decades of experience working in the oil & gas industry and worked on several of TotalEnergies’ onshore and offshore gas projects in Nigeria. He was until 2020 the Deputy Managing Director of TotalEnergies’ deep-water district in the country. On the other side, Mr. Ilu founded and runs one of Nigeria’s most successful LPG businesses, Ultimate Gas. He brings over 20 years of experience in the energy, maritime, and logistics industry. Bridport Energy is one of the Nigerian companies who signed a Sales & Purchase Agreement (SPA) with Nigeria LNG in 2021 to start delivering liquefied natural gas (LNG) to the domestic market. The expansion of its Board comes as the company is currently developing an LNG import, storage, and distribution terminal in Lagos where first cargo is expected within a few months.

The Caverton Offshore Support Group (COSG) Plc will install, operate, and maintain an AW109 FNPT II MCC simulator purchased by Global Aviation Training & Maintenance (GATML) at its aviation training center in Lagos. The new simulator is equipped with a spherical visual system, 4 axis electromagnetic vibration system and an Entrol Mission Package, which includes hoist control for SAR mission and an external mirror, among other equipment. It will be available at the Caverton Aviation Training Center (CATC) in Lagos, which already operates an EASA-certified Level D AW139 full flight simulator, Africa’s first level D helicopter simulator. With this second simulator, the Caverton Aviation Training Center (CATC) will improve its range of training devices while reducing operational costs and increasing the safety of its clients’ pilots. “We are excited to introduce this Entrol AW109 FNPT II to our growing number of training devices in Nigeria and West Africa as a whole. The advent of Covid 19 opened our eyes to the fact that there is a huge void in training establishments and particularly access to training simulators. The need for affordable and accessible training is long overdue in West Africa and we are delighted to work with Entrol in making this a reality,” said Mrs. Lolade Abiola, accountable manager at the Caverton Aviation Training Center (CATC).

On November 1st, Addax Petroleum Development Nigeria Ltd signed a Transfer, Settlement and Exit Agreement (TSEA) with NNPC Ltd for offshore blocks OML 123, OML 124, OML 126, and OML 137. The subsidiary of the Sinopec Group has now ceased to be the production sharing contractor on these assets, after two decades operating in Nigeria. Much sought-after assets The operator had already been criticized for its lack of investment on the blocks, leading to the revocation of its licenses in March 2021 and their award to the consortium of Kaztec Engineering and Salvic Petroleum. However, an intervention by President Buhari had seen the blocks quickly returned to Addax Petroleum a month later. Throughout the rest of 2021, rumours circulated that another Nigerian consortium involving Mars E&P, a subsidiary of the AA&R Group, along with Kaztec Engineering and Salvic Petroleum was in the race to acquire Addax Petroleum’s interest in the four OMLs. AA&R notably announced in November 2021 a $274m senior secured reserve-based lending facility from the Afreximbank to support the acquisition. However, the deal eventually fell through and did not complete.   Addax’ blocks were originally awarded on a sole risk basis (100% interest) and are considered very attractive by the industry. Two of them are currently producing: OML 123 has been on production since 2006 via the Yinson-operated Adoon FPSO that develops the Antan Field, and OML 126 since 2005 via the BW Offshore-operated Sendje Berge FPSO that develops the Okwori and Nda Fields. The Adoon FPSO pumped an average of 16,400 barrels of oil per day (bopd) from January to September this year, according to NUPRC data. Its charter period expires at the end of 2022. Meanwhile, the FPSO Sendje Berge’s average output stood at under 4,500 bopd over the past few months and the vessel lease and operation contract was extended by another year until Q4 2022. On the other side, OML 137 remains undeveloped but is believed to be the most attractive asset because it holds significant gas resources that could be monetised domestically or via exports.

The French development agency, AFD, has declared it would support the Lagos State Government and its waterways authority, LASWA, to develop a mass public inland waterways transportation system in Africa’s largest megacity. Known as the Waterways Investment and Development of the Environment project in Lagos State (WIDE-LAG), the €200m scheme targets the moving of over 50m passengers every year through Lagos’ waterways by 2028. The project’s scope involves the development of five to eight priority ferry routes including ferry terminals, first mile/last mile land connections, jetties, pontoons, shipyard for vessel maintenance and dredging of critical areas. It will also include the acquisition of clean-powered vessels, Information Transport Systems (ITS), capacity-building and institutional strengthening of LASWA. “This ambitious program will put Lagos State at the forefront of mobility innovation in Africa, setting the path for other western African countries sharing the same geographical configuration,” said Antoine Le Bihan, the AFD Representative in Lagos. The project’s preparatory studies were officially launched last week in Lagos, under a €1.2m grant provided by the AFD.

While in South Korea last week, President Muhammadu Buhari witnessed the signing of a letter of intent (LoI) between NNPC Ltd and Daewoo E&C for the revised strategy to fix the state-owned Kaduna Refinery in northern Nigeria. According to officials, Daewoo E&C intends to complete the Kaduna refinery rehabilitation project by signing the official contract with the NNPC by the first quarter of 2023. The Kaduna refining complex was developed in two major phases: the construction of the 110,000 bpd refinery in 1983, followed by a 30,000 tpy petrochemical unit in 1988. Various factors have severely impacted the operational efficiency of the refinery. Over the past 10 years, capacity utilization at the Kaduna Refinery has averaged only 13.87%. Future rehabilitation works the refinery site and on associated pipelines and depots are expected to bring back capacity utilization to 90% in the near future. Daewoo E&C was already selected last June for the “quick fix” project at the state-owned Warri Refinery, under a contract worth $492.3m. Both refineries were initially scheduled for full rehabilitation under a $1.484bn contract with Italian contractor Saipem, approved by the Federal Executive Council (FEC) in August 2021. However, the deal fell through and led to the restructuring of both initiatives as cheaper, “quick fix” projects executed by Daewoo E&C. Meanwhile, Italian contractor Tecnimont is busy rehabilitating the state-owned Port Harcourt Refinery under a full-fledged, $1.5bn rehabilitation scheme that started in April 2021 and will last 40 months. In early June 2022, the Italian EPC contractor reached 1 million safe manhours without LTI at the site. Details on the rehabilitation of Nigerian refineries are available in your Hawilti+ research terminal.

TechnipFMC foresees between $4.5bn and $7bn of subsea opportunities in Angola, Nigeria, and Côte d’Ivoire over the coming 24 months, according to its latest earnings presentation. Angola Angola will continue to dominate the market in terms of projects’ scope and value, as it has for the past couple of years. The implementation of an enabling environment and the granting of fiscal incentives by the Government there has translated into several new projects being approved by International Oil Companies (IOCs). Last July for instance, TotalEnergies took a final investment decision on the Begonia subsea tie-back, a 5-well development tied back to its Pazflor FPSO on Block 17. While several subsea tie-back projects have already been executed, more are in the making like the tie back of the Alho, Cominhos and Cominhos East (ACCE) fields to TotalEnergies’ Kaombo Norte FPSO on Block 32. TechnipFMC expects the subsea scope there to be worth up to $1bn. Meanwhile, new production hubs are also moving forward and will rely on the deployment of additional FPSO units. This is the case at Agogo on Azule Energy’s Block 15/06 where TechnipFMC expects the subsea scope to be worth over $1bn. On the same block, the development of additional reserves at the Cuica discovery could also support additional activity. The field was already tied-back to the Armada Olombendo FPSO in mid-2021 via an early production system (EPS) but its further development could represent up to $500m of subsea work, according to TechnipFMC. Finally, TechnipFMC expects the development of TotalEnergies’ Cameia field on Block 21 to be worth up to $500m in subsea opportunities. The development of the field benefits from fiscal incentives and will rely on a new FPSO unit. Bumi Armada is believed to have been shortlisted to provide the FPSO, with FID expected in 2024. Nigeria Despite ongoing turmoil, the Nigerian oil & gas sector is expected to rebound from 2023, after its presidential elections. TotalEnergies and Shell are both expected to approve brownfield projects there after years of hesitation. On OML 130, TotalEnergies has already restarted engineering work on its Preowei subsea tie-back project, a 70,000 bpd development that will rely on the Egina FPSO. TechnipFMC sees the subsea scope to be worth up to $1bn. Overall, OML 130 is expected to see renewed activity after the renewal of its PSC last August, with operator TotalEnergies planning a 9-well drilling campaign there that will start in a few months. Finally, Shell is expected to progress a few of its own deep-water projects on OML 118, where the production sharing contract (PSC) was renewed in May 2021. The major continues to consider three major projects on the block, including brownfield projects like Bonga North Tranche 1 (120,000 boepd at peak) and Bonga Main Life Extension & Upgrade (60,000 boepd at peak). It also has the option of developing Bonga Southwest, which would rely on a new FPSO and a unitization with the Aparo field, for a peak production of 150,000 boepd. TechnipFMC expects the subsea scope at Bonga North to be worth between $500m to $1bn, with pre-qualification documents issued by Shell in May this year. Bonga South West would be more significant as it would rely on a new FPSO, with subsea activity worth over $1bn. Côte d’Ivoire Finally, the phased development of Eni’s Baleine deep-water discovery in Côte d’Ivoire will support subsea activity in West Africa for the next couple of years. TechnipFMC notably expects the subsea scope of work to be worth up to $1bn. Phase 1, whose final investment decision (FID) was taken inearly 2022, is expected to be commissioned in 2023 with three wells producing an average of 12,000 barrels of oil per day (bopd) and 17.5 MMscfd of gas. It is expected to rely on the Firenze FPSO as a production hub: the vessel has been in Port Rashid (Dubai) since 2018 and is currently being refurbished before its redeployment offshore Côte d’Ivoire. In September 2022, Saipem already landed €1bn in contracts for the project’s initial phase, covering Engineering, Procurement, Construction and Installation (EPCI) activities of Subsea Umbilicals, Risers and Flowlines (SURF) and of an onshore gas pipeline, and the Engineering, Procurement, Construction and Commissioning activities on the refurbishment of the Firenze FPSO vessel. Details on future deep-water activity and projects in sub-Saharan Africa are available on the Hawilti+ research terminal – plus.hawilti.com.

Shell still has four major pre-FID options to develop its reserves offshore Nigeria, according to the major’s latest quarterly presentation. These represents the biggest share of the company’s pre-FID options across its global upstream portfolio. Most projects are concentrated on and around the Bonga deep-water field on OML 118, where the production sharing contract (PSC) was renewed in May 2021. Shell continues to consider three major projects on the block, including brownfield projects like Bonga North Tranche 1 (120,000 boepd at peak) and Bonga Main Life Extension & Upgrade (60,000 boepd at peak). It also has the option of developing Bonga Southwest, which would rely on a new FPSO and a unitization with the Aparo field, for a peak production of 150,000 boepd. The two brownfield projects are likely to be prioritized given their lower development costs. In May 2022, Shell notably started the tendering process for the Bonga North subsea tie-back project. The pre-qualification documents included three different packages:  the topsides modification of the Bonga FPSO (design engineering, procurement, transportation, fabrication, offshore installation and commissioning); the engineering, procurement and construction of flowlines, risers, umbilicals, and installation works; and the design, manufacture, and supply of subsea equipment and provision of healthcare support. The major also continues to make progress towards the development of the shallow-water HI gas field, in partnership with Nigerian independent Sunlink Petroleum. While the development concept has not been officially confirmed, the field is expected to be a key supplier of gas to Nigeria LNG’s upcoming Train 7.   Details on deep-water activity in Nigeria are available within your Hawilti+ research terminal.

Nigeria LNG, Africa’s biggest LNG exporter, has clarified that its terminal on Bonny Island in the Niger Delta is still operating despite a force majeure issued by the company earlier this week. “The company’s plant is in operation though at limited capacity due to reduced gas supply from some of its upstream suppliers,” Nigeria LNG has declared today. The declaration of force majeure by NLNG had raised several concerns on gas supplies in and out of Nigeria. The company is Africa’s largest LNG exporter and the gas it exports represents on average 10% of Nigeria’s export revenues. It is also the biggest domestic supplier of cooking gas, a commodity that already suffers from soaring inflation. The company had earlier revealed that all its upstream gas suppliers had declared force majeure following their inability to produce gas due to ravaging floods that have already displaced millions in the Niger Delta. The shut-in of gas production has caused significant disruption of gas supply to Nigeria LNG, forcing the LNG exporter to operated at limited capacity. Nigeria LNG operates six LNG trains on Bonny Island with a capacity of 22.5 million tonnes per annum (mtpa). Most of Nigeria’s LNG is exported to Europe and Asia, with key European markets such as France, Spain, and Portugal amongst its largest buyers.

Petralon 54 Ltd has announced that it recently held a meeting with its host and impacted communities around the Dawes Island Field south of Port Harcourt in the Niger Delta. The company officially presented its Petroleum Prospecting License No. 259 (PPL 259) to the Royal Fathers and the people ahead of starting sustained commercial production later this year. “The initiative was aimed at building mutual understanding between our organisation and the Ogoloma, Okochiri and Koniju communities in Okrika Local Government Area, Rivers State,” the company said today. Petralon 54 Ltd is a subsidiary of Petralon Energy, who was awarded PPL 259 in mid-2022 by the Federal Government of Nigeria, giving it operatorship of the Dawes Island Field. The group also holds an indirect minority interest in Prime Oil & Gas, which in turns entitles it to a net reflective production of some 3,000 barrels of oil equivalent per day (boepd) from the Agbami, Akpo, and Egina deep-water fields.