Page 6 - AfrOil Week 34 2019

AfrOil PERFORMANCE AfrOil
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Plans by NNPC to repair the facilities have been regularly delayed and early in the year Abuja formally acknowledged the failure of more than two and a half years of e orts to per- suade private investors to fund the work.
e rst real sign of progress came when in March, when Italy’s Maire Tecnimont con- rmed an announcement by NNPC the previ- ous day that the company had been awarded a contract to rehabilitate the re ning facilities at Port Harcourt.
The confirmation by each party was important, since both the client and potential restorers have previously claimed separately to have reached such agreements, which were then either formally denied or simply never implemented.
e Italian company explained that the con- tract involved two phases. e rst stage, worth roughly $50mn, would encompass a six-month “integrity check” and equipment inspection at the site, as well as “relevant engineering and planning activities’”
Subject to completion of that work, the
Italian company would then carry out the EPC contract on the required rehabilitation, which was said to be designed to restore output to at least 90% of nameplate capacity.
e second phase will be ful lled in collab- oration with an unnamed partner, which was later revealed to be Japan’s JGC. Together with Italy’s Saipem. JGC was the original builder of the larger of the two Port Harcourt re neries.
Key to Nigerian e orts to improve its down- stream sector is the private 650,000 bpd Dan- gote Re nery, which is under construction by the local Dangote Group. e facility at Lekki near Lagos is set to be Africa’s largest, and it could transform the country from a fuels importer to a net exporter.
However, Dangote Group’s executive direc- tor Devakumar Edwin said earlier this month that the re nery would not reach mechanical completion until the end of 2020, with output ramping up therea er. e latest delays came about because of issues with the nearby Apapa Port, through which equipment for the facility was being transported. ™
POLICY
Nigerian judge reinstates SPDC’s licence for OML 11
SHELL Petroleum Development Co. (SPDC) scored a victory in court last week, when a Nige- rian judge ordered the government to reinstate the consortium’s licence for Oil Mining Lease 11 (OML 11), a block in the south-eastern Niger River Delta.
SPDC led suit against Nigeria’s government in the Abuja Division of the Federal High Court earlier this year. It did so a er federal authorities declined to renew its licence for OML 11, citing security concerns and technical objections, and the court heard the case last week.
In the ruling, Judge Taiwo Taiwo wrote that SPDC had met all conditions for the renewal of its rights to the block. He also dismissed the state’s argument for reducing the size of the block to comply with current laws limiting the area of oil mining leases to 1,295 square km, saying that OML 11 would remain at its current size of 3,095.25 square km.
e judge stopped short of meeting all of the consortium’s requests. Even though SPDC had asked for a 30-year renewal, he ordered the government to reinstate the OML 11 licence for a period of 20 years, on the grounds that the shorter interval was the maximum permissible term.
SPDC is a consortium formed by Royal Dutch Shell (UK-Netherlands), Eni (Italy) and Total (France). e Shell-led group serves as operator of OML 11 and holds a 45% stake
in the block. e remaining 55% is owned by state-controlled Nigerian National Petroleum Corp. (NNPC).
OML 11 is one of the most important oil-bearing sites in Nigeria, but it has produced almost nothing for the last 26 years. SPDC suspended upstream production in 1993 and focused instead on sustaining midstream oper- ations in the area. It did so a er the Nigerian government sent troops to the area in response to protests led by the Movement for the Survival of the Ogoni People (MOSOP). ™
ANP
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w w w . N E W S B A S E . c o m Week 34 27•August•2019