Shell, Seplat in hunt for land rigs signals possible oil recovery

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The hunt for land rigs by Anglo-Dutch super major Shell, and Nigerian independent Seplat Petroleum, probably shows exploration and production activities are about to pick-up again after active rig count in Nigeria fell by half last year.


Shell is getting ready for a major drilling programme and has gone to the market for two jack-ups and a pair of land rigs, one of which will have to handle high-pressure, high-temperature wells. Seplat Petroleum is also searching for a land drilling rig for work on Oil Mining Licence (OML) 53.

As of June 2018, Africa’s largest crude producer had 32 oil rigs according to the Organisation of Petroleum Exporting Countries’ Monthly Oil Market Report (MOMR). But this has fallen to 14 rigs as of June 2019, according to the oil cartel’s latest July MOMR. This is more than a 50 percent decrease.


Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. A drop in active rig count means oil exploration and production activities in have decreased year-on-year.


“Both elements correlate. To replace oil reserves, you need to intensify exploration and production activities. This means more active rigs. It also means more investment inflows into Nigeria’s oil and gas sector,” one major contractor told BusinessDay in confidence. “Falling active rig count and reserves mean there have been no fresh investments in the sector.”

Nigeria’s oil reserve decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.062 in 2015 while in 2016 it stood at 37.453 billion.

However, at an …

Shell boss advises govt on royalty, tax on deepwater projects

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Shell Nigeria Exploration and Petroleum   Company has advised that federal government should be considerate on what it take as royalty from deep water projects so as not to discourage investors from putting -in the  necessary resources  to achieve the potentials in such terrains.

Bayo Ojulari, managing director of the company in a interview with BusinessDay opined that stakeholders are debating the issue of royalty and tax with the National Assembly (NASS), in respec of investment in the oil industry and that Nigeria should fast track business activities.

He said the issue around Production Sharing Contract, PSC, is also before NASS and may soon be resolved by all stakeholders to make it convenient for operators in Nigeria’s oil and gas space.

He said: “for every barrel, you pay royalty, you pay cost for doing business and tax as well. You have to take out these three and whatever is left, if the government takes 50% from it, the investors can as well pack their bags signifying the end of business.

When there is a high royalty there is no profit and if government says there is royalty which is taken from production and another 50% taken what is left cannot cover cost?”.

He however said these issues are currently ongoing at NASS, and all stakeholders have made their views known about the issues. “This is democracy and we should not bastardize what we have. Since the debate is on, it is hopeful that the final passage of the bill will be something that will work for the nation. But NASS cannot be forced to pass bills”.

The Shell boss said when we think about issues around policy, we should know that as a country, we are competing against other countries which are what gives him concern.… Read More...

Nigeria escalates fight for oil block granted to Shell and Eni

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Nigeria is seeking damages as well as a declaration that it has the right to revoke the licence for a multibillion-dollar oil block granted to Royal Dutch Shell and Eni, in an escalation of a long-running dispute between Africa’s largest crude producer and two of its biggest foreign investors.

The government “seeks to trace and recover the money paid as bribes” and an entitlement “to rescind the grant of the OPL 245 licence”, a prized exploration and production block that Shell and Eni bought in a 2011 deal, the government said in a legal claim filed in April.

The Anglo-Dutch and Italian companies paid $1.3bn for the block, but Nigeria believes the undeveloped deepwater block could be worth at least $3.5bn and damages should now be calculated on that basis, documents filed in the commercial division of the High Court in London said.

The claim in the English courts alleges that Shell and Eni “both paid bribes” either directly or indirectly and senior executives at both companies “received bribes (or were intended to receive bribes)” as part of the 2011 deal.
Nigerian and Italian prosecutors have alleged that the companies knew that most of the money would be funnelled to corrupt government officials and executives. Both companies, current and former executives deny any wrongdoing.

In his first comments since the documents were released by the court, Emmanuel Ibe Kachikwu, Nigeria’s minister of state for petroleum, said the government was simply keeping all options open.

“If we come back and find that the parties were not transparent, and this wasn’t awarded transparently, then obviously the government has an option to decide to pull that [licence] back,” he said.

Mr Kachikwu said the government was focused on reaching a resolution to the dispute. “The participants in this are