₦airaland Forum

The Nigerian Govt through the NNPC, has different contract arrangements with the oil and gas companies; either by JV arrangement, Production sharing contract (PSC) or Service contract. Exxon's Erha is on PSC, that is why you don't see NNPC as holding shares. Under PSC, the state is entitled to royalty as a first call on production; development costs may then be recovered by the contractor,
any PPT liability is then settled to the state and any remaining oil is shared between NNPC (for the government) and the contractor under percentages set out in the PSC.

yimikaa:
Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75

NNPC holds 0.00 percent, OUR OIL

Anyway, since kachichuwkwu became GMD of NNPC, I noticed mobil has been in the news of late.

The contract existing is a PSA (Petroleum Sharing Agreement). Read up on it.

davide470:
The contract existing is a PSA (Petroleum Sharing Agreement). Read up on it.

I know of PSC (production sharing contract) and PSA ( production sharing agreement), which one is petroleum sharing agreement again?

Production sharing agreements are a common type of contract signed between a government and a resource extraction company (or group of companies) concerning how much of the resource (usually oil) extracted from the country each will receive.

The oil company bears the mineral and financial risk of the initiative and explores, develops and ultimately produces the field as required. When successful, the company is permitted to use the money from produced oil to recover capital and operational expenditures, known as "cost oil". The remaining money is known as "profit oil", and is split between the government and the company, typically at a rate of about 80% for the government, 20% for the company.

From the article Esso has 56.75 while she'll owns the remaining 43.75. Government(NNPC) owns what percentage?

Would like to know more about this petroleum sharing agreement you're talking about. I Googled, could not find anything on it.

yimikaa:
Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75

NNPC holds 0.00 percent, OUR OIL

Anyway, since kachichuwkwu became GMD of NNPC, I noticed mobil has been in the news of late.

oga plz tell me more r u 4ril?

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SenseiX:
IRVING, Texas--(BUSINESS WIRE)--Exxon Mobil Corporation (NYSE:XOM) announced today that its subsidiary, Esso Exploration and Production Nigeria Limited, has started oil production ahead of schedule at the Erha North Phase 2 project offshore Nigeria.

The Erha North Phase 2 project is a deepwater subsea development located 60 miles offshore Nigeria in 3,300 feet of water and four miles north of the Erha field, which has been producing since 2006. The Erha North Phase 2 project includes seven wells from three drill centers tied back to the existing Erha North floating production, storage and offloading vessel, reducing additional infrastructure requirements.

The project is estimated to develop an additional 165 million barrels from the currently producing Erha North field. Peak production from the expansion is currently estimated at 65,000 barrels of oil per day and will increase total Erha North field production to approximately 90,000 barrels per day.

“Executing successful projects such as Erha North Phase 2 ahead of schedule and under budget results from ExxonMobil’s disciplined project management approach and expertise,” said Neil W. Duffin, president of ExxonMobil Development Company. “We are able to create additional shareholder value by optimizing existing infrastructure, which reduces capital spending requirements and improves capital efficiency.”

Duffin said the ahead-of-schedule startup was supported by strong performance from Nigerian contractors, which accounted for more than $2 billion of project investment for goods and services, including subsea equipment, facilities and offshore installation.

“These contracts are bringing direct and indirect benefits to the Nigerian economy through project spending and employment, consistent with project objectives,” Duffin said.

ExxonMobil expects to increase its global production volumes this year by 2 percent to 4.1 million oil-equivalent barrels per day, driven by 7 percent liquids growth. The volume increase is supported by the ramp up of projects completed in 2014 and the expected startup of major developments in 2015.

The Erha North field was discovered in 2004 and initial production commenced in 2006. Operator Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75 percent share.
http://news.exxonmobil.com/press-release/exxonmobil-starts-oil-production-erha-north-phase-2-project-ahead-schedule-and-well-un
Cc lalasticlala

winterfell007:
i propose we continue an aggresive gas production as opposed to oil production. we are xperiencing an oil glut in the market. thankfully NLNG has bben a success story due to the sustained investment of NNPC and its strategic shareholders as well as FG's commitment beginning from 1991 all the the way to 2014 . we compete favourably with our peers across the globe. companies like Seplat, orient Energy, Seven Energy, Falcon Petroleum, Oando and their likes should pursue aggresive investment in gas exploration for energy and industralisation. Nigeria is blessed with gas reseverves all the way from the Anambra Basin down to the gulf of guinea. we could do well here. my humble contribution.

Of most comments on Nigerian Energy issues of late, your's. Really got me!
it's really a no-brainer, countries like China, India and the rest are using the U.S induced oil-price slump to buy up our oil and store for the posterity of themselves because whether we believe it or not, There's going to be an energy crisis in say 15-20 yrs from now!
The oil we're selling at almost-zero price now will be hot cake by then and had we any sense, we'll find alternatives and live on other resources so that by the time industrialization really takes root here, we won't be dependent on these same countries for the oil we ourselves sold to them.

It's like the man who rents a house in 1984 at say 50naira/room and pays 70yrs' rent upfront.
He'll keep living in that house all the while building more houses and letting at ridiculously higher prices. Yet the landlord will have no justification to force him out or sue for an increase.

So short-sightedness only leads a man astray later on.
Would have been better if we take our rightful place in the committee of nations and start refining both for local consumption and for export (at least to neighbouring W.African states) before Ghana beats us to it.
Yes we'll have a cash crunch while trying to achieve that but who achieves anything worthwhile easily?

Team enp2 on board jascon 25 via gang way 3 half gbosa for you all. Who can stop the job?

winterfell007:
i propose we continue an aggresive gas production as opposed to oil production. we are xperiencing an oil glut in the market. thankfully NLNG has bben a success story due to the sustained investment of NNPC and its strategic shareholders as well as FG's commitment beginning from 1991 all the the way to 2014 . we compete favourably with our peers across the globe. companies like Seplat, orient Energy, Seven Energy, Falcon Petroleum, Oando and their likes should pursue aggresive investment in gas exploration for energy and industralisation. Nigeria is blessed with gas reseverves all the way from the Anambra Basin down to the gulf of guinea. we could do well here. my humble contribution.

Of most comments on Nigerian Energy issues of late, your's. Really got me.

Countries like China, India and the rest are using the U.S induced oil-price slump to buy up our oil and store for the posterity of themselves because whether we believe it or not, There's going to be an energy crisis in say 15-20 yrs from now!
The oil we're selling at almost-zero price now may be hot cake by then and had we any sense, we'll find alternatives and live on other resources so that by the time industrialization really takes root here, we won't be dependent on these same countries for the oil we ourselves sold to them.

It's like the man who rents a house in 1984 at say 50naira/room and pays 70yrs' rent upfront.
He'll keep living in that house all the while building more houses and letting at ridiculously higher prices. Yet the landlord will have no justification to force him out or sue for an increase.

So short-sightedness only leads a man astray later on.
Would have been better if we take our rightful place in the committee of nations and start refining both for local consumption and for export (at least to neighbouring W.African states) before Ghana et. al. beats us to it.

Yes we'll have a cash crunch while trying to achieve that but who achieves anything worthwhile easily?
David470 and all what do you say?

Am so happy that I was of part of the design. Team on ehra north phase 2 project.

Subsea engineering

If as you say they acquired the oil blocs then why do you also expect to own it?

Next2Bezee:
Abeg where was NNPC when these guys were acquiring ownership of our OWN oil?

good to hear


in other news,order your football jerseys
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Bros you were ther too abi....
Which contractor were you with?

dkdenco:
Team enp2 on board jascon 25 via gang way 3 half gbosa for you all. Who can stop the job?

mickey45:
Of most comments on Nigerian Energy issues of late, your's. Really got me.

Countries like China, India and the rest are using the U.S induced oil-price slump to buy up our oil and store for the posterity of themselves because whether we believe it or not, There's going to be an energy crisis in say 15-20 yrs from now!
The oil we're selling at almost-zero price now may be hot cake by then and had we any sense, we'll find alternatives and live on other resources so that by the time industrialization really takes root here, we won't be dependent on these same countries for the oil we ourselves sold to them.

It's like the man who rents a house in 1984 at say 50naira/room and pays 70yrs' rent upfront.
He'll keep living in that house all the while building more houses and letting at ridiculously higher prices. Yet the landlord will have no justification to force him out or sue for an increase.

So short-sightedness only leads a man astray later on.
Would have been better if we take our rightful place in the committee of nations and start refining both for local consumption and for export (at least to neighbouring W.African states) before Ghana et. al. beats us to it.

Yes we'll have a cash crunch while trying to achieve that but who achieves anything worthwhile easily?
David470 and all what do you say?

thanks bro. there's no two way about it. Orient exploration company is building a gas compression plant in Aguleri, Anambra to to truck CNG to captive power plants in selected industrial area in anambra so is Oando doing in Aba and Port Harcourt. we should start thinking of gas based industrialisation, that could fetch more monies in the future.

I will be working here by 2017, Amen. watch out.

yimikaa:
Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75

NNPC holds 0.00 percent, OUR OIL

Anyway, since kachichuwkwu became GMD of NNPC, I noticed mobil has been in the news of late.

Olodo. There is a difference between working interest and net revenue interest. Also the production sharing agreement in Nigeria ensures that the government will get carried.
If NNPC is a working interest owner, then they essentially will have to pay their own share of all the drilling and production costs.

Keneking:
Ok...

1. I hope Niger-Delta Militants and their bosses would not attack this field.
2. With kachikwu, all oil majors would strength their businesses in Nigeria.
3. 65,000 Bpd means ...refined crude or raw crude

Na raw crude bros

winterfell007:
thanks bro. there's no two way about it. Orient exploration company is building a gas compression plant in Aguleri, Anambra to to truck CNG to captive power plants in selected industrial area in anambra so is Oando doing in Aba and Port Harcourt. we should start thinking of gas based industrialisation, that could fetch more monies in the future.

Oando's Gaslink already supplies lots of companies in Lagos especially the Ikorodu, Ilupeju and Oshodi-Apapa axes. Shell has lines in Ota in Ogun.
While Tower&Lexcel's Greenfuels limited supplies CNG to customers who're too far from the existing neghbouring gas-lines.

Shell and Oando both buy from FG's NGC. Don't know where Greenfuels' feedstock's from.

I don't know about Green-fuels and other CNG plants but I know Gaslink's having an issue with pricing which is still regulated by FG for now.
Hopefully as we develop, more gas-based companies are going to spring up and we're really going to see growth in that area, however we look at it though the Gas outlook's still looks more attractive, especially if more indigenous/in-country-production policies are enforced.

EbolaParasite:
Olodo. There is a difference between working interest and net revenue interest. Also the production sharing agreement in Nigeria ensures that the government will get carried.
If NNPC is a working interest owner, then they essentially will have to pay their own share of all the drilling and production costs.

Oloorun ebola. Your head is correct

you got it wrong. all joint ventures operation are shared 45 and 55. Now out of the 45% for the Exxon, Esso has 56.25 and shell has 43.75 while the Fed gov 55% is intact.

yimikaa:
Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75

NNPC holds 0.00 percent, OUR OIL

Anyway, since kachichuwkwu became GMD of NNPC, I noticed mobil has been in the news of late.

donchuky:
you got it wrong. all joint ventures operation are shared 45 and 55. Now out of the 45% for the Exxon, Esso has 56.25 and shell has 43.75 while the Fed gov 55% is intact.

Thanks

yimikaa:
I know of PSC (production sharing contract) and PSA ( production sharing agreement), which one is petroleum sharing agreement again?

Production sharing agreements are a common type of contract signed between a government and a resource extraction company (or group of companies) concerning how much of the resource (usually oil) extracted from the country each will receive.

The oil company bears the mineral and financial risk of the initiative and explores, develops and ultimately produces the field as required. When successful, the company is permitted to use the money from produced oil to recover capital and operational expenditures, known as "cost oil". The remaining money is known as "profit oil", and is split between the government and the company, typically at a rate of about 80% for the government, 20% for the company.

From the article Esso has 56.75 while shell owns the remaining 43.75. Government(NNPC) owns what percentage?

Would like to know more about this petroleum sharing agreement you're talking about. I Googled, could not find anything on it.

Sorry, Its Production Sharing Agreement, also called PSC. Let's leave Wikipedia definition and face Nigeria definition.

It is an advanced form of JV (Joint Venture). The IOC's technically owns 100% of the field, bears all the risk and operational expenses. The government do not care if you discover oil or not as a penny would not be invested by them as against a JV where the ownership, risk and costs are shared and there have been complications with that.

All the IOC's actually prefer this type of agreement.

Flets:
Before the noise, let's clarify somethings

This project started early engineering in 2012 and progressed into proper r execution in 2013 by three major EPC contractors

This project will add 65KBD only at ppeak production envisaged for 2016. Early wells are producing 10KBD as at today

Thanks to GEJ who insisted that all major fabrication be done in-country despite efforts by the contractors to move it in their home countries. Nigerdock, Aveon, Globestar etc were key beneficiaries.

The local content is a major achievement of the GEJ era that I cannot fault. It is of immense benefit to the country.

mickey45:
Of most comments on Nigerian Energy issues of late, your's. Really got me.

Countries like China, India and the rest are using the U.S induced oil-price slump to buy up our oil and store for the posterity of themselves because whether we believe it or not, There's going to be an energy crisis in say 15-20 yrs from now!
The oil we're selling at almost-zero price now may be hot cake by then and had we any sense, we'll find alternatives and live on other resources so that by the time industrialization really takes root here, we won't be dependent on these same countries for the oil we ourselves sold to them.

Would have been better if we take our rightful place in the committee of nations and start refining both for local consumption and for export (at least to neighbouring W.African states) before Ghana et. al. beats us to it.

Yes we'll have a cash crunch while trying to achieve that but who achieves anything worthwhile easily?
David470 and all what do you say?

Your words are thoughtful, but you need to understand the Oil market. There is something called Market Correction; it occurs once in 5-7 years or so, it is like a sinusoidal wave and bound to occur. Sadly, we don't do Commodities trading here in Nigeria, so we panic anytime oil price crashes. Also, there are billions of undiscovered reserves in the world and right here in Nigeria, as such, a working refinery is really a wonderful investment like you said (Dangote knows about this and he is cashing in on it)

@bolded, haba na. Lol. Almost zero ke. I attached today Brent and WTI crude price below. It has started gaining.

mickey45:
Oando's Gaslink already supplies lots of companies in Lagos especially the Ikorodu, Ilupeju and Oshodi-Apapa axes. Shell has lines in Ota in Ogun.
While Tower&Lexcel's Greenfuels limited supplies CNG to customers who're too far from the existing neghbouring gas-lines.

Shell and Oando both buy from FG's NGC. Don't know where Greenfuels' feedstock's from.

I don't know about Green-fuels and other CNG plants but I know Gaslink's having an issue with pricing which is still regulated by FG for now.
Hopefully as we develop, more gas-based companies are going to spring up and we're really going to see growth in that area, however we look at it though the Gas outlook's still looks more attractive, especially if more indigenous/in-country-production policies are enforced.

oando has seen how successful it ran the Gaslink project that prompted it to embark on new compression gas stations to feed the industrial concern within Aba and Ph. let's not forget the Local Content Act did bring some good with it. Now companies like falcon petroleum has an Mou with the Anambra state govt. to build similiar project. seven energy is doing a similair project in Akwa-ibom. the future is ultimately gas!. i want to partake in this burgeoning industry in the future

seek TRUTH>

https://www.youtube.com/watch?v=73_HYeb2Io8 ……>4those who HV spiritual eye listen2uterance in video&know its TRUE but U CANT accept?

So why the pay cut in ExxonMobil? It should have added some money in the pocket? Just thinking.

I guess is a good one for Nigeria thankGod. d fabrication was done in Nigeria not d refinery dangote dat d fabrication will be done in Paris.

ikpeteboghWG:
Am so happy that I was of part of the design. Team on ehra north phase 2 project.

Bros you try ooo, to do this in NL, I hope you dont live in Warri, no sane Mobil guy will expose himself like this, must be a "contractuer"......

Keneking:
Ok...

1. I hope Niger-Delta Militants and their bosses would not attack this field.
2. With kachikwu, all oil majors would strength their businesses in Nigeria.
3. 65,000 Bpd means ...refined crude or raw crude

hey dude, Exxonmobi is own by kachikwu, and the question is y was Exxon was not able to start dis since 2006 upto 2012 y just now, the friend there are things fishing.