Mrs. Mofoluke Dosumu, Executive Director, Oceanic Bank Plc (left); Segun Osunkeye, Chairman, ICC Nigeria (ICCN); Mrs. Olubunmi Osuntuyi, Secretary-General, and Martin Woolnough, Board Member, ICCN at the 11th AGM held recently.
http://www.independentngonline.com/DailyIndependent/Article.aspx?id=15673
The two-year-long negotiations between the Federal Government and oil giants, Royal Dutch Shell and Chevron Corporation, over the renewal of oil leases were, at the weekend, stalemated.
The government and parties involved are, according to findings by Daily Independent, yet to agree on some terms of contract, which would give the oil companies the leases for the next 20 years on oil platforms in Nigeria.
Minister of Petroleum Resources, Diezani Alison-Madueke, had, within one month, met top notches of the oil companies for three times over the matter and the Nigeria’s country Chair for Shell, Mutiu Sunmonu, who confirmed the meeting, declared that the company is anxious on the lease. An industry Source, however, told Daily Independent that “there could be more to the negotiations than meet the eyes.”
The leases granted Shell and Chevron in Nigeria have, it would be recalled, expired about two years ago and former Minister of State for Petroleum Resources, Odein Ajumogobia, had, last year, confirmed that negotiations were going on between the government and the duo of Shell and Chevron, months after the government had renewed leases for ExxonMobil.
In May 2008, the state-run Nigerian National Petroleum Corporation (NNPC) signed an oil-financing deal worth $2 billion with Mobil Producing Nigeria, a unit of Exxon Mobil Corp.
The same month, the Nigerian state-run company signed a similar deal worth $1 billion with Elf Petroleum Nigeria Limited
An official statement from the Ministry of Petroleum Resources made available to our correspondent quoted Ajumogobia, saying no specific authorisation is required from the Presidency before the licence could be renewed.
“Chevron and Shell are still in negotiations with the Federal Government...over the renewal of their expired licences,” Ajumogobia stressed.
But Ajumogobia, who confirmed that no agreement has been reached, added that the Minister of Petroleum Resources has the power to renew the lease without necessarilly waiting for authorisation from the President.
“The Minister of Petroleum Resources has the full authority under extant laws to renew leases and licences,” the statement said.
But Sunmonu, who doubled as Managing Director of Shell in Nigeria, while presenting the company’s brief notes to journalists in Lagos, said: “I am as anxious as you are on that (oil lease renewal). During my discussion with the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, she told me that the issue is on her agenda. She has granted me two to three meetings with her on this.”
Royal Dutch Shell, it would be recalled, declared that it has lost confidence on its operations in Nigeria, maintaining that it no longer depends on the country for growth in its oil and gas output.
Chief Executive of the oil giant, Peter Voser, who stated this in comments posted on the company’s website, maintained that “Shell staff in Nigeria are doing a great job in this very difficult environment.” This new stance by Shell is, in the main time, fuelling insinuation of a halt to new oil investments by the oil giant in Nigeria.
Nigeria, Voser said, “is still a heartland for Shell, but we no longer depend on it for our growth aspirations.”
This new stance, he continued, “gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria.”
Shell, which has been the dominant force in Nigeria’s oil industry for decades, may be looking to dramatically reduce its presence in the country.
It is seeking buyers for 10 of its Nigerian onshore oil producing assets worth between $4 billion and $5 billion in total, people familiar with the matter told the Wall Street Journal last month. China National Petroleum Corp. has been reported as a possible buyer.
Violence, kidnapping and sabotage attacks on infrastructure in Nigeria’s oil producing areas have hampered Shell’s operations for years.
“Shell staff in Nigeria are doing a great job in this very difficult environment,” Voser said. “During 2009 sabotage and attacks on installations of the Shell Petroleum Development Corporation of Nigeria have again reduced production levels,” and delayed a scheme to reduce gas flaring, he said.
Voser said in October that Shell’s Nigerian oil output was down to 120,000 barrels per day from 300,000 barrels per day before the violence started.
Following the amnesty, oil production levels did improve toward the end of the year and its liquefied natural gas business is performing well, Voser noted.
Shell’s output growth in the coming years will be driven by more unconventional energy projects, notably large LNG and gas-to-liquids developments approaching completion in Qatar.
Shell has new developments with a combined output of around one million barrels equivalent of oil and gas per day under construction, although much of this will offset natural output decline in other assets.
These technology driven projects require massive capital expenditure and Voser warned of a looming oil supply crunch if investment in the wider industry does not rebound from a big drop in 2009.
“We’ve seen a worldwide drop in upstream oil and gas investment of some 20%. And for alternative energies the drop is even steeper, around 40%,” he said. “Governments and industry must work together to get back to higher investment levels. Otherwise, we run a risk of a supply-demand imbalance in a few years time.”
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