Dear DELE, Welcome to our 37th issue.

Last week I asked you to save the 13th of February for our official launch. Unfortunately, we've had to postpone the event to accommodate our special guest of honour whose identity remains very hush hush at the moment. More will be revealed closer to the time. Please save the new date of the 14th of March. We will send email invitations out in the coming week. Welcome to our new subscribers especially those from the insurance world. You may be interested in checking out the Shell tender opportunity for insurance services below. Just scroll down to the Tenders section. We are still preparing our events directory and you will be able to download it this week. Don't forget to: 1. Visit our archive to read back issues if you have just joined so that you can catch up on all the news you've missed. 2. Send us your press releases. Click here to contact us and also add our email address:newsdesk@nogintelligence.com to your mailing list. 3. Email newsdesk@NOGintelligence.com to let us know about your events and we'll list them free of charge! 4. Visit our website www.NOGgintelligencee.com for more up to the minute news updates and special features. 5. Advertise your company's services and reach thousands of oil and gas industry executives and professionals. Email advertise@NOGintelligence.com NOW to secure
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EVENTS

Nigeria Oil and Gas, Abuja

Balanced Scorecard Certification Bootcamp, Lagos

Afroinvest Oil and Gas, London

DOWNSTREAM NEWS
OPEC Daily Basket Price Continues Climbing
The price of OPEC basket of twelve crudes climbed to $111.43 dollars a barrel on Wednesday, compared with $110.52 the previous day, according to OPEC Secretariat calculations, up from $109.88 the previous week. Introduced on 16 June 2005, the new OPEC Reference Basket is currently made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela). Back to top

REGULATORY NEWS
House to Probe Sale of OML 30
The furore over the sale of oil mining lease (OML 30) to Heritage Oil refuses to go away as the House of Representatives orders a committee to investigate the sale of the block to Heritage. The House ordered the investigation following a motion by the Hon. Yusuf Tajudeen, on the grounds that due process may not have been followed in the transaction. In a reference to the background of the controversial chief executive of Heritage, Tony Buckingham, who is worth over 500 million, Yusuf said: "The sale of OML 30 to Heritage Oil, a company, whose chief executive's antecedent is allegedly unsavoury, is highly disturbing."

Tony Buckingham's mysterious and colourful past as a "security consultant" includes allegations of involvement in the failed "Wonga coup" in which the President of Equatorial Guinea was to have been overthrown. British national, Simon Mann, was jailed for the failed coup but was granted a presidential pardon in 2009. Heritage said acknowledged these issues in Buckingham's past when it listed in 2008, saying in its prospectus: "There has been, from time to time and may periodically be in the future, media and other public speculation about the chief executive officer's associations with private military contractors and/or individuals involved with those types of companies." Yusuf believes that the sale to Heritage Oil was not in the national interest. "The past activities of the British boss of Heritage Oil led to prolonged militia operations and political instability in Angola and Equatorial Guinea," he said.

Yusuf said he was concerned that Buckingham was "an individual whose shadowy business ethics is recognised all over the world." He said that, given his mercenary connections, starting operations in the Niger Delta could result in security threats. The matter is to be investigated and a report is expected within three weeks. Back to top

Governors Head for Supreme Court Over Excess Crude Account

State Governors remain on a collision course with the Federal Government over the Excess Crude Account (ECA). Following their first meeting of the year, the Nigerian Governors' Forum (NGF) has decided that it will go to the Supreme Court for a resolution of its issues over the ECA. The NGF is unhappy with the way in which the Federal Government has made deductions from the ECA including the use of $1 billion from the ECA to offset fuel subsidy costs. Meanwhile, the Federal Government has approved $1 billion from the ECA for the state governments to share. Cynical observers find the timing remarkable. However, the funds are to be used, according to the Minister of State for Finance, Yerima Ngama, for the execution of more people-oriented projects. The projects will have to conform to the government's transformation agenda. The sum will be distributed between all 36 states and the Federal Capital Territory. Back to top

Rivers State Pulls Out of Peace Talks Over Disputed Oil Wells
The dispute between Rivers and Bayelsa State over some oil wells has escalated after Rivers State government accused the President Goodluck Jonathan-led administration of bias in the dispute. At a recent meeting between representatives of the two states and the National Boundary Commission (NBC), Rivers State pulled out of the peace talks. The Deputy Governor of Rivers State, Mr. Tele Ikuru, who led his state's delegation, accused the Federal Government of bias in the boundary dispute before he led his team out of the peace talks held in Yenegoa, Bayelsa State. The Rivers delegation gave the NBC, which mediated in the dispute, three conditions that must be fulfilled before they could take part in future peace talks. Ikuru noted that the Rivers State Government had sought redress in a court of law to resolve the matter. He disclosed that the case was still pending when the Federal Government started paying the revenue accruing from the wells to Bayelsa - President Jonathan's home state. "Under the circumstances, the commitment to speedy and transparent resolution of this potentially volatile and protracted boundary issue cannot be guaranteed. Rivers State has strongly argued that the most effective and transparent way to make all parties genuinely focus on the settlement bid is by the immediate intervention of the Federal Government to direct the payment of all revenue proceeds from the disputed oil wells into an escrow account under the Accountant General of the Federation," he said. "To direct that all withdrawals hitherto made from and given to Bayelsa from the erstwhile escrow account maintained by the two state governments be returned, to direct the return to status quo with regard to the 11th edition of the Administrative Map of Nigeria as reiterated by the National Boundary Commission vide its letter no.NBC SEC.4/s/75 of 3rd July, 2002 addressed by the Governor of Rivers State," he said. Ikuru also accused the Bayelsa State Commissioner for Justice and Attorney-General, Mr. Richard Egele, of fraud for allegedly holding secret meetings with indigenes of the Kula Community in Rivers State in a bid to convince them to lay claims to being indigenes of Rivers State. The Director-General of NBC, Dr. Muhammad Ahmad, while reacting to Ikuru's claims, said the technical reports from both states had been accepted. Ahmad stated that Rivers State Government should not have withdrawn from the boundary delineation process.

Also speaking, the Deputy Governor of Bayelsa State, retired Rear Admiral John Jonah said he was surprised that the Rivers State Government was pulling out after both states and the Federal Government had cooperated. Back to top

NEITI Begins Audit of Oil funds

Nigeria Extractive Industries Transparency Initiative (NEITI) will soon begin auditing the flow of oil funds to state governments, the Central Bank of Nigeria, the Niger Delta Development Commission and the Petroleum Technology Development Fund. NEITI has signed a contract worth N140 million with an indigenous tax firm, SIAQ, which will carry out the audit. The Executive Secretary of NEITI, Mrs Zainab Ahmed, said the exercise was intended to provide information on how oil revenue is being spent. "The audit exercise will provide baseline information required for planning and development. It will help reduce friction, promote public trust and provide the public with current information and data on the basis for revenue allocation, disbursement and application," she said. As part of its remit, the enquiry will track disbursements of funds, accruing from the oil and gas sector, to the federal and state governments and local councils and agencies. The audit will also track the application of the funds. In addition, the States that receive the 13 per cent derivation allocation will have to account for the funds they have received. The financial audit of 2009 - 11 has been completed although the results are yet to be finalised. The results of the previous financial audit for the period 2007 - 10 proved explosive as it was revealed that the nation may have lost about $456 million in unpaid royalty. Back to top

ENVIRONMENTAL NEWS
Dutch Court Clears Shell of Causing Oil Spills
Royal Dutch Shell Plc and its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), can breathe a sigh of relief after a Dutch Court ruled on Wednesday that they were not responsible for causing the oil spills that occurred at Oruma, Goi and Ikot Ada Udo between 2004and 2007 in the Niger Delta area. The District Court of The Hague (The Netherlands) held that the four oil spills, which were the subject of the litigation between four farmers from the area assisted by Friends of the Earth (Milieudefensie), were caused by sabotage. However, the court ruled that in the case of the oil spill at Ikot Ada Udo, SPDC could have prevented the sabotage by plugging the well at an earlier stage. The saboteurs opened the valve (above surface) with a wrench. Although the spill had not been caused by SPDC, the company was held liable for not doing enough to prevent the sabotage that resulted in the oil spill. Shell points out that the court acknowledged that they did take necessary measures to contain the well. What is interesting about the ruling in respect of Ikot Ada Udo is that although SPDC did not cause the spill they were held responsible for not doing enough to prevent it from happening in the first place. This is a dangerous precedent for oil companies. Some legal observers believe that as a result of this case, oil companies could be held responsible for breaches to their pipelines if they fail to take adequate security precautions to prevent such incursions. The Court has not yet determined the quantum of damages in respect of the liability and proceedings will now continue between SPDC and Friday Akpan in respect of that particular oil spill. In spite of SPDC's victory, another big concern for international oil companies is that the Ikot Ada Udo decision could pave the way for other affected host communities to go after them.

NOGintelligence gathered that ExxonMobil is particularly concerned, in view of the recent spill at Ebeno, Akwa Ibom State which it is still battling to clean up to the satisfaction of the community. The oil companies could face multiple claims by farmers and fishermen whose livelihoods have been destroyed by incessant oil spills. Ebun Adegboruwa, lawyer and activist said she expects that the decision will make it easier for farmers and other aggrieved host community members to bring action in a Nigerian court against the oil companies. "Farmers, land farmers in a host of communities who on a daily basis are subjected to the eclipse of their farmland and the environment have the opportunity now to challenge Shell not only in the Hague but particularly in Nigeria, because now the Nigerian courts will have courage," said Adegboruwa." Friends of the Earth had hoped to make Royal Dutch Shell liable for the spills with the argument that it should be held responsible for the activities of its Nigerian subsidiary. For them, the case was a test of whether and under what circumstances international companies could be held liable for the activities of their foreign subsidiaries. Royal Dutch Shell was cleared of any liability and it was only SPDC that was held responsible in the case of Ikot Ada Udo. The Niger Delta has been devastated by the effect of oil spills. A United Nations report has said a properly conducted clean up of the area will take 25 years to complete and will cost $1 billion. Shell has long argued that most of the spills are caused by sabotage. In the company's 2012 Spill Incident Data, which was obtained by NOGintelligence, Shell said it suffered 198 incidents of oil spills last year, with 161 incidents or 83.3 per cent resulting from sabotage and theft. The Managing Director of SPDC and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu said in a statement that the company welcomed the court's ruling that all the spill cases were caused by criminal activity. "Oil pollution is a problem in Nigeria, affecting the daily lives of people in the Niger Delta. However, the vast majority of oil pollution is caused by oil thieves and illegal refiners. This causes major environmental and economic damage, and is the real tragedy of the Niger Delta. SPDC has made great efforts to raise awareness of the issue with the government of Nigeria, international bodies like the UN, the media and NGOs. We will continue to be at the forefront of discussions to find solutions," said Sunmonu. Friends of the Earth says it will appeal the ruling. Geert Ritsema, their spokesperson said there was still a lot of oil lying around. "These sites need to be cleaned," she said. Shell is also facing legal action in England in a class action suit brought by the Bodo community in the Niger Delta. The company has already admitted liability for two of the spills although both parties disagree over the amount of oil spilled. The case is expected to come before the court later this year or early next year. Back to top

HEALTH AND SAFETY NEWS

Oando's OES Teamwork Rig Achieves 3 Years Of Drilling Without Loss Time Injury
Oando Plc subsidiary, Oando Energy Services Limited ("OESL") reported this week that its Teamwork swamp rig has achieved a safety milestone of three years of uninterrupted operations without a Loss Time Injury (LTI). LTI is used in the industry to measure adherence to safety requirements by evaluating the number of injury-bearing incidents capable of preventing a worker from performing or continuing with a task. This is the second in Oando's drilling fleet to achieve this safety milestone. The company owns four drilling rigs currently, making it the largest

indigenous provider of swamp rig drilling services. Teamwork is the second rig in Oando's drilling fleet to achieve this safety feat. Its OES Integrity rig recorded the same achievement on Friday, August 10, 2012. Commenting, Mr. Bandele Badejo, Chief Executive Officer, OESL said: "We are pleased with this very significant and commendable milestone for all our stakeholders. Operating the rig for One Thousand and Ninety-six days without a Lost Time Injury is a demonstration of the emphasis we place on Environment Health, Safety, Security and Quality processes in the company, as well as the commitment of our people to these processes. This feat further demonstrates to the industry that indigenous drilling services providers with the right people and attitude are capable of sustaining safe, efficient and incident-free operations." Also commenting, Mr. Chijioke Akwukwuma, Chief Environment, Health, Safety Security and Quality (EHSSQ) Officer, Oando PLC, "We are very proud of the OES teamwork for achieving this remarkable safety milestone, which is in line with the Oando Group's zero tolerance for unsafe conditions and practices. We are committed to achieving our world-class aspirations of incidentfree operations every day across all of our operations". Teamwork is currently contracted to a leading international oil company and has successfully drilled, completed and worked over wells in the course of its campaign. The rig is a 3000 HP swamp drilling barge equipped with 10,000 psi Blow Out Preventers (BOP) systems. It has an IDECO built mast and substructure with rated static hookload capacity of 1.5M lbs and capable of drilling up to 25,000 ft. The rig is equipped with three model 645E8 EMD diesel engines, two model T-1600 IDECO mud pump, three Derrick Linear Motion Shakers, two Hi-G- dryers, and Varco TDS-3 Top Drive. Other rigs in the OES's fleet are OES Respect, OES Integrity and OES Passion. Back to top

COMMUNITY RELATIONS NEWS

More Ex-militants Graduate as Marine Divers
The Federal Government's Presidential Amnesty Programme for repentant militants in the Niger Delta has recorded a major boost in the current efforts to create a conducive environment for crude oil production and also prevent the ex-fighters from going back to the creeks. This success was recorded as 64 ex-fighters were recently certified after undergoing a six-month course in marine diving at the Nigeria Naval Under Water Warfare School in Lagos. The programme is said to be a success story of the public-private sector partnership in Nigeria between the Nigeria Navy and the Mieka Dive Training Institution, which is a private indigenous company. Both parties have worked assiduously to ensure that the ex-agitators were given adequate skill acquisition exercise in diving and other related fields in human development and capacity building. Speaking at during the graduation ceremony in Lagos, Commanding Officer, Underwater Warfare School, Ojo, Lagos, Navy Captain Osoba Tajudeen congratulated the graduates on their successful completion of the diving course. He urged the trainees to focus on the task ahead as they venture into the marine world. Managing Director, Mieka Dive Limited, Mr. Pondi Kestin reiterated that completing the course does not automatically translate into success for the trainees adding that discipline, positive attitude and determination on their parts would lead to success in the long run. In his words of encouragement to the trainees, he said "The experience you have garnered here

must be put to good use to enhance your communal and socio-economic life. "Henceforth, you must be good ambassadors of both the Nigeria Naval and the Mieka Dive Training Institution. The time you give to practicing what you have leant and your continuous exposure to modern diving skills will determine whether you will fail or succeed. "But my prayer for you is that all of you who have gone through this program become successful as you venture into the world of diving." The Federal Government has already commenced effective implementation of the third phase of the President's Amnesty to former militants of the Niger Delta. Back to top

CORPORATE SOCIAL RESPONSIBILITY NEWS

Falcon To Train 48 Women Entrepreneurs
An indigenous company, Falcon Petroleum, is giving vocational training to 48 women from its host communities for its Ikorodu Phase II pipeline. The women will also be given one-month's industrial placement following the training. The training is intended to give them practical experience as entrepreneurs before starting their own businesses. Falcon company manages the distribution of natural gas in the Ikorodu Zone. The company's managing director, Joseph Ezigbo said: We have continued over the years to increase our investment in gas distribution infrastructure within Ikorodu and currently supply gas to 16 companies in the area. He said the decision to offer the training was as a result of a collaborative engagement with the communities. Back to top

TENDERS
Shell - Provision of Operational Insurance Coverage
The Shell Petroleum Development Company of Nigeria Limited (operator of the NNPC/Shell/EPNL/Agip Joint Venture) is seeking qualified insurers for the provision of operational insurance coverage for its assets and liabilities which include the following: Onshore and offshore assets and operators extra expenses; general 3rd party liability; marine hull and aviation. SPDC invites submissions from reputable Nigerian registered insurance companies having world class experience in the provision of insurance services for major oil and gas companies. Only tenderers registered in the NJQS product/category 31432 Non-Life Insurance Product/Services category shall be invited to submit technical bids. The closing date for this opportunity is 21 February 2013. Back to top

Chevron - Downhole Permanent Guages (onshore)

Chevron Nigeria Limited, operator of the NNPC/Chevron Joint Venture invites interested and prequalified companies for the tender opportunity for the provision of Downhole Permanent Guages (onshore). Only those registered with NJQS Product/Category 1.01.08 (Production Well Test and Monitoring Instruments) shall be invited to submit a technical bid. The closing date for this opportunity is 4pm on 20 February 2013. Back to top

Chevron - Expandable Sandscreens (offshore)

Chevron Nigeria Limited, operator of the NNPC/Chevron Joint Venture invites interested and prequalified companies for the tender opportunity for the provision of Expandable Sandscreens (offshore). Only those registered with NJQS Product/Category 3.04.21 (Well Completions) shall be invited to submit a technical bid. The closing date for this opportunity is 4pm on 20 February

2013. Back to top

Chevron - Mud Logging Services (onshore)

Chevron Nigeria Limited, operator of the NNPC/Chevron Joint Venture invites interested and prequalified companies for the tender opportunity for the provision of Mud Logging Services (onshore). The services shall consist of complete Formulation Evaluation and Advanced Drilling Technology (ADT) Services as required for Mud Logging operations in vertical, highly deviated or horizontal wells and inclusive of real time transmissions to the company's Lagos, Escravos and Port Harcourt bases. Only those registered with NJQS Product/Category 3.04.07 (Mud Logging) shall be invited to submit a technical bid. The closing date for this opportunity is 4pm on 21 February 2013. Back to top

Esso - FPSO System Integrity Inspection Services

Esso Exploration and Production Nigeria Limited, contractor of the NNPC/EEPNL Production Sharing Contract plans to engage the services of competent contractors for the provision of FPSO System Integrity Inspection Services on its Erha FPSO within the NNPC OML 133 acreage for an anticipated contract term of two years with one year optional renewal period. The contract is expected to commence in 2013. Only tenderers who are registered with the Other Inspection Services (3.07.98) and Non-Destructive Testing (NDT) Services (3.07.01) NJQS Product Categories shall be invited to submit technical bids. The closing date for this opportunity is Wednesday 20 February 2013. Back to top Once again, please don't don't forget to join our mailing list if you haven't done so already. Remember, you won't have to look anywhere else for your weekly Nigerian oil industry updates, and it's free to join. Do send us your news. And let us know if you want to advertise in NOGintelligence. Sincerely, Remi Aiyela Editor, NOGintelligence Back to top