NIGERIA - ChevronTexaco - Jay Prior.
ChevronTexaco has long demanded a "reasonable price" for the gas which the US major sells to NNPC's unit Nigerian Gas Co. (NGC). The US major has listed three "minimum conditions" needed to bring Nigeria's gas projects to fruition: (1) adequate and timely funding from the government, (2) a sound commercial framework, and (3) development of local markets to absorb the gas and gas liquids - with the government having to allow industry access to Nigeria's pipelines and an expansion of the gas infrastructure.
Chevron Nigeria (ex-Gulf Oil Corp which Chevron bought in 1984) has many fields in operation in a JV 60% owned by NNPC. The fields are rich in natural gas, mostly associated with oil, with the gas being developed under a $1 bn programme to 2006. The main oilfields, Okan and Mefa, are sourcing associated gases for a pipeline which came on stream in late April 1997. The system feeds Nigeria's industry and power plants.
Chevron Nigeria, which has proven 17 TCF of associated and free gases in its 2.2m acre areas in the country, is leading a project for a 960-km export pipeline to supply gas to neighbouring Benin, Togo and Ghana (see Gas Market Trends No. 7).
Chevron and Sasol of South Africa are having a gas-to-liquids (GTL) JV built at Chevron's Escravos gas processing centre. The GTL facility will extract about 15,000 of liquids. These will be further processed to produce 33,000 b/d of top quality diesel, naphtha and other liquids. This is part of a $2 bn programme to cut Nigeria's massive gas flaring. The other major scheme in this is the Escravos Gas Project Phase III, targeted for completion in 2005. It will process nearly 400 MCF/d of gas produced with crude oil and currently flared.
TotalFinaElf, with Elf having been a most successful oil explorer in West Africa, is expanding its Nigerian oil production capacity to 400,000 b/d before 2010. Its Nigerian unit is still called Elf Oil.
George Buresi is the CEO of the French major's Nigerian operations. His boss in charge of Total E&P for Africa is Michel Benezit. Benezit says Total is depending on Africa to help raise its global output from 2.4m b/d of oil equivalent in 2002 to 2.8m b/doe by 2005. Total is already Africa's largest crude oil producing company. It is one of the biggest oil retailers in Africa, with 3,300 service stations having a 21% market share. Total is the biggest oil retailer in Nigeria, which is market share exceeds 15%.
Andrea Forzoni is the managing director of Nigerian Agip Oil Co. The Africa manager of ConocoPhillips is Dee Simpson, and his boss in charge of Europe and Africa is Henry McGee.
The Italian and US majors are NNPC's partners in the Agip-operated Brass River oil production JV, which has a capacity of 150,000 b/d to be doubled to 300,000 b/d before 2010. They are also partners in one of the LNG export ventures in Nigeria.
The Oil Producers' Trade Section of the Lagos Chamber of Commerce is the lobby for both the international and local oil companies. But the foreign companies have their own private club headed by Shell which, occasionally, becomes a more powerful lobby than the one at the chamber.
The Nigerian Association of Indigenous Petroleum Explorers and Producers (Naipec) is the main lobby for the locals. In April 2003 Lagos-based Naipec formed a sub-group, called Marginal Fields Operators, to represent more than 30 local companies which in February 2003 won provisional access to 24 neglected oilfields.
The locals are producing 150,000 b/d. Several of their ventures are in partnership with foreign oil firms. Their output will fall to about 100,000 b/d before 2010. The heads of most local firms are well connected. They include Chief Tunde Afolabi, CEO of the oil producing Amni Int'l, is the technical secretary of Naipec. Prominent Lagos tycoon Leno Adesanya, who heads Zebra Oil & Gas, is in partnership with the mainland Chinese state oil company CNPC and their JV is called Sino-Africa, set up in 2002. Godwin Obaseki, a cousin of NNPC's CEO Jackson Gaius-Obaseki (see DT), is involved in Pillar Oil whose CEO is Gamaliel Onosode, the architect of the Bonny LNG policy. Folorunso Alakija heads Famfa Oil which has a stake in the Chevron-operated Agbami deep-water giant, to be on stream by 2007 and its capacity will be 250,000 b/d.
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|Publication:||APS Review Gas Market Trends|
|Date:||Aug 25, 2003|
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