Mele Kyari and Michelle Pflueger, director of deepwater and PSC, CNL, sign documents. (Image source: NNPC Ltd)

Chevron Nigeria (CNL) and Nigerian National Petroleum Corporation have concluded the conversion of five of its joint venture (JV) assets into the Petroleum Industry Act (PIA) 2021 terms to leverage its investor-friendly approach over the erstwhile petroleum profit tax

The oil major opted voluntary conversion that is applicable for oil prospecting licenses (OPL) and oil mining leases (OML) holders under the old regime.

As for existing OPLs and OMLs nearing expiration, the new PIA regime automatically recognises them as petroleum prospecting licenses (PPLs) and petroleum mining leases (PMLs) upon their expiration.

The conversion of five OMLs into four PPLs and 26 PMLs as per the new PIA terms not only benefits Chevron but also boosts Nigeria's domestic gas market while expanding its global presence. 

The PIA has been a major driver of NNPC's exceptional net profit of N3.297 trillion that comprised its 2023 audited financial statement.

Long-term partner

“Over the years, Chevron has been a partner of choice that has not contemplated completely divesting/exiting (oil production in) the shallow water and we are proud of them,” said Mele Kyari, group CEO of NNPC, defining Chevron Nigeria as a reliable partner of the corporation. 

The partners are aiming to reach a production target of 165,000 barrels of oil per day (bopd) by the end of the year, revealed Bala Wunti, chief upstream investment officer, NNPC. He acknowledged Chevron Nigeria's commitment to maintaining network stability and facilitating gas supply especially to the domestic market. 

The Dangote Fertiliser Plant that opened in 2022 runs on natural gas supply from Chevron that was ensured by a gas sale and aggregation agreement signed in 2019. 

Permanently storing carbon dioxide generally has better sustainability credentials than utilising CO2. (Image source: Adobe Stock)

While covering all aspects and technologies of the CCUS value chain, a new report by IDTechEx titled 'Carbon Capture, Utilisation, and Storage (CCUS) Markets 2025-2045: Technologies, Market Forecasts, and Players' has interestingly noted how policymakers and key industrial players are focusing more on carbon dioxide storage, increasingly dropping the 'U' (utilisation) from discussions at conferences and expos

The report has found that by 2045, the world will be sequestering 1.6 gigatonnes per annum of CO2 underground, as dedicated geological storage of carbon dioxide will outpace enhanced oil recovery as the end result for CO2 capture. Major oil and gas players such as Shell, Equinor, and Chevron are leveraging decades of subsurface expertise to open-up storage in saline aquifers.

Permanently storing carbon dioxide generally has better sustainability credentials than utilising CO2. This is because permanently sequestering CO2 captured from an industrial process in dedicated underground storage is a net-zero process (or even net-negative for some CO2 sources). In contrast, captured CO2 returns to the atmosphere on short time scales for several CO2 utilisation applications, such as when a fuel synthesised from CO2 is combusted. Storing CO2 is therefore better suited to meeting emission reduction targets.

For industry stakeholders from the African energy market, CCS will be vital in attracting energy investments and eradicating energy poverty from the continent.

Decarbonising oil & gas assets

Fossil fuel infrastructure won’t disappear overnight, but existing assets can be decarbonised. New CCUS enhanced oil recovery projects are still expected in the future because the oil produced by this method has a much lower carbon footprint than typical oil extraction. Alternatively, drop-in replacements to fossil fuels can be made by utilising CO2, such as CO2-derived e-fuels. Such low-carbon fuels are seeing demand from the aviation and maritime sectors, where full electrification remains unfeasible for decarbonisation.

In the Middle East and North Africa (MENA) region, the Habshan Carbon Capture, Utilisation and Storage project is one of the largest carbon capture projects that will have the capacity to capture and permanently store 1.5 mn tonnes per annum (mtpa) of carbon dioxide (CO₂) within geological formations deep underground.

The company has secured two rig contracts. (Image source: Adobe Stock)

Shelf Drilling has secured a contract for the Shelf Drilling Mentor and a letter of award for the Shelf Drilling Achiever

While a US$60mn deal for Shelf Drilling Mentor will be covering 10 wells and an estimated duration of 450 days in direct continuation of the rig’s current campaign in Nigeria, Shelf Drilling Achiever will kick-start a multi-year campaign in October. 

Shelf Drilling has already been proactive in Nigeria since last year., and its Tenacious jack-up rig is currently deployed offshore Angola.

Strong rig market

Anticipating contract execution soon, the company is currently mobilising the Shelf Drilling Achiever rig to West Africa on a dry transport carrier to arrive by September. Concurrently, Shelf Drilling is mobilising the Main Pass IV rig using the same dry transport carrier, and this rig is also expected to commence operations before the end of 2024.

Greg O’Brien, CEO of Shelf Drilling, said, “We are very pleased with these two awards, which build on our leading position in West Africa and demonstrate the strength of this market. These awards further support our decision to mobilise the two rigs from the Middle East, and we are confident that operations for the Main Pass IV will also commence shortly after the rig’s arrival.”

Work over operations on the gas wells TE-6 and TE-7 have been completed. (Image source: Adobe Stock)

Transition energy company, Sound Energy, has confirmed the release and demobilisation of the Star Valley Rig 101 to the Tendrara Production Concession

The work over operations on the gas wells TE-6 and TE-7 have been fully completed. The wells are being prepared for long-term gas production into the micro-LNG plant currently under construction at site. The works were completed safely with no recordable incidents. The company acknowledged the well management team at Bedrock Drilling Ltd, subcontractors and suppliers, and the Office National des Hydrocarbures et des Mines (ONHYM) for their ongoing partnership and support.

The company has successfully replaced the tubing head spool and ran new corrosion resistant completion tubing into TE-7. The rig will be stacked at the TE-7 site, at no on-going cost to the company.