Shell, Nestoil Seal Deal on Oil Mining Lease
- By Nik Ogbulie
- Published May 9th, 2011
- News
- Unrated
Nestoil Plc led consortium, NECONDE Energy Limited has signed a Sale Purchare Agreement on the Oil Mining Lease OML 42 with the original owners, Shell Petroleum Development Company, Total E&P Limited and Nigeria Agip Oil Company Limited.
The Nestoil consortium emerged winners of 45 percent stake in the oil block owned by the oil majors after a keenly contested bid. The signing of the agreement is the first step in the long chain of processes leading to final consummation of the deal. Five blocks, OML 26, 30, 34, 40 and 42 located in the western swamps of the Niger Delta, were hitherto operated by Shell, while French giants Total, Italy’s ENI and Nigeria National Petroleum Corporation NNPC were partners.
While the Nestoil outfit now holds 45 percent of OML 42, the outstanding 55 percent of the block, said to hold over a billion barrels of Crude Oil and over three trillion cubic feet of gas, is held by NNPC. The company under a subsidiary, Century Power Generation Company Limited and Time Power Global Dynamics Limited, is also making fresh inroads into the power generation and distribution business in the country.
The block is located onshore in a swampy area and is in Shell’s western operations near its Forcados terminal in Delta State; its biggest oil fields are Odidi and Jones Creek. Others include Batan and Egwa. Nestoil and its partners will be expected to sink more oil wells to maximise output from the fields. Currently, one of the fields produces in the 26,000 barrels of crude oil per day.
Other members of the consortium along with Nestoil include Aries Exploration and Production Limited, which is a member of the Yinka Folawiyo Group; VP Global Limited, a special purpose vehicle fully owned by the community where the block is situated and KI Nigeria BV/KOV Nigeria, a Polish based international investment group.
At the signing of the Sales Purchase Agreement with Shell last week, the Managing Director of Shell congratulated the indigenous firm for its tenacity that has seen it through many challenges of growth that has seen it rise to become the most preferred bidder in a very rigorous bidding process. Being the first step in the entire approval process, Dr the Managing Director of Nestoil Earnest Azudialu, thanked Shell for all its past supports and the confidence it has reposed in the company in the past years.
He disclosed that but for the confidence of Shell in his company, which has provided them the opportunity to perform; the story may probably be different today.He said having come this far, Nestoil is putting in every thing to ensure that the venture is successful and that it will work round the clock to get the approval of all relevant stakeholders.
The subsidiaries, according to him, are TimePower Global Dynamics Limited and Century Power Generation Limited. According to Nestoil Managing Director, TPGD is a strategic business unit that was created to participate in the ongoing effort to increase Nigeria’s electricity distribution by increasing customer access to economic and reliable electricity supply in urban areas, increasing the number of registered customers and reducing losses. “Century Power Generation Limited was set up to carry out electricity power generation as part of the effort to increase Nigeria’s electricity generation capacity. Its strategy promises to achieve this through development of new power plants in several parts of the country, in addition to the acquisition, refurbishment, upgrade, operation and maintenance of existing power plants in Nigeria,” he said.
Nestoil is also involved in dredging activities via its sister company, B&Q Dredging Limited. B&Q’s activities initially commenced as an ancillary part of Nestoil’s routine oil and gas contract construction activities. During the execution of the SPDC Egbeleku Engineered Landfill Construction Contract in Delta State, it became necessary to engage in significant dredging works. To this end, the Company acquired a 12inch cutter suction dredger [NNENNA]. Subsequently during river crossing activities at its 20“ x 38KM Kolo-Creek to Rumuekpe Trunkline Replacement Project [KCTL], the newly acquired 18“ Cutter suction dredger [ADAOMA] was instrumental to the speedy, safe and successful completion of several river and creek crossing activities.
Perhaps, the most dramatic indication of the phenomenal growth of B&Q is its single handed completion of river crossing of 7 major rivers (namely Sego, St. Nicholas, Odioma, Twoni, Santa Barbara, Tora) and 44 other minor rivers and creeks during the execution of the NCTL Project. This was made possible by a systematic acquisition of nine additional dredgers, booster stations, bucket dredger and ancillary equipment. These recently acquired dredgers include Helgoland, (Dopke suction dredger), Falkland (IHC Beaver 3300 Cutter Suction Dredger) and Lolland (IHC Beaver 3300 Cutter Suction Dredger).
The flagship of this armada of dredging equipment is the MV ENESTO, an enormous 28’’ IHC manufactured cutter suction dredger, which was commissioned by President Goodluck Jonathan .
The Nestoil consortium emerged winners of 45 percent stake in the oil block owned by the oil majors after a keenly contested bid. The signing of the agreement is the first step in the long chain of processes leading to final consummation of the deal. Five blocks, OML 26, 30, 34, 40 and 42 located in the western swamps of the Niger Delta, were hitherto operated by Shell, while French giants Total, Italy’s ENI and Nigeria National Petroleum Corporation NNPC were partners.
While the Nestoil outfit now holds 45 percent of OML 42, the outstanding 55 percent of the block, said to hold over a billion barrels of Crude Oil and over three trillion cubic feet of gas, is held by NNPC. The company under a subsidiary, Century Power Generation Company Limited and Time Power Global Dynamics Limited, is also making fresh inroads into the power generation and distribution business in the country.
The block is located onshore in a swampy area and is in Shell’s western operations near its Forcados terminal in Delta State; its biggest oil fields are Odidi and Jones Creek. Others include Batan and Egwa. Nestoil and its partners will be expected to sink more oil wells to maximise output from the fields. Currently, one of the fields produces in the 26,000 barrels of crude oil per day.
Other members of the consortium along with Nestoil include Aries Exploration and Production Limited, which is a member of the Yinka Folawiyo Group; VP Global Limited, a special purpose vehicle fully owned by the community where the block is situated and KI Nigeria BV/KOV Nigeria, a Polish based international investment group.
At the signing of the Sales Purchase Agreement with Shell last week, the Managing Director of Shell congratulated the indigenous firm for its tenacity that has seen it through many challenges of growth that has seen it rise to become the most preferred bidder in a very rigorous bidding process. Being the first step in the entire approval process, Dr the Managing Director of Nestoil Earnest Azudialu, thanked Shell for all its past supports and the confidence it has reposed in the company in the past years.
He disclosed that but for the confidence of Shell in his company, which has provided them the opportunity to perform; the story may probably be different today.He said having come this far, Nestoil is putting in every thing to ensure that the venture is successful and that it will work round the clock to get the approval of all relevant stakeholders.
The subsidiaries, according to him, are TimePower Global Dynamics Limited and Century Power Generation Limited. According to Nestoil Managing Director, TPGD is a strategic business unit that was created to participate in the ongoing effort to increase Nigeria’s electricity distribution by increasing customer access to economic and reliable electricity supply in urban areas, increasing the number of registered customers and reducing losses. “Century Power Generation Limited was set up to carry out electricity power generation as part of the effort to increase Nigeria’s electricity generation capacity. Its strategy promises to achieve this through development of new power plants in several parts of the country, in addition to the acquisition, refurbishment, upgrade, operation and maintenance of existing power plants in Nigeria,” he said.
Nestoil is also involved in dredging activities via its sister company, B&Q Dredging Limited. B&Q’s activities initially commenced as an ancillary part of Nestoil’s routine oil and gas contract construction activities. During the execution of the SPDC Egbeleku Engineered Landfill Construction Contract in Delta State, it became necessary to engage in significant dredging works. To this end, the Company acquired a 12inch cutter suction dredger [NNENNA]. Subsequently during river crossing activities at its 20“ x 38KM Kolo-Creek to Rumuekpe Trunkline Replacement Project [KCTL], the newly acquired 18“ Cutter suction dredger [ADAOMA] was instrumental to the speedy, safe and successful completion of several river and creek crossing activities.
Perhaps, the most dramatic indication of the phenomenal growth of B&Q is its single handed completion of river crossing of 7 major rivers (namely Sego, St. Nicholas, Odioma, Twoni, Santa Barbara, Tora) and 44 other minor rivers and creeks during the execution of the NCTL Project. This was made possible by a systematic acquisition of nine additional dredgers, booster stations, bucket dredger and ancillary equipment. These recently acquired dredgers include Helgoland, (Dopke suction dredger), Falkland (IHC Beaver 3300 Cutter Suction Dredger) and Lolland (IHC Beaver 3300 Cutter Suction Dredger).
The flagship of this armada of dredging equipment is the MV ENESTO, an enormous 28’’ IHC manufactured cutter suction dredger, which was commissioned by President Goodluck Jonathan .
