Summary About Nigeria Oil & Gas PDF

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CONTENTS
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NIGERIA:
The Nigerian Oil and Gas Industry
CONTENTS
1: NIGERIA
History, Geography and Location, Political Environment,Climate, Population/Human Resources,
Labour Relations,Macro-Economic Setting, Cultural and Ethnic Diversity, People and Tourism
2: INFRASTRUCTURE
Air Transport, Ports, Oil Terminals, River Transport, Rail Network, Road Network, Electric Power Distribution,
3: THE PETROLEUM INDUSTRY

Exploration and Production History, Frontier Basins, Government Participation
4: THE MAJOR OIL COMPANIES

Shell Petroleum Dev. Co. of Nigeria, ExxonMobil in Nigeria, Chevron Nigeria Limited,
Elf Petroleum Nigeria Limited, Nigerian Agip Oil Company, Texaco Overseas (Nigeria),
Pan Ocean Oil Corporation, Addax Petroleum Dev. Nig. Ltd., Statoil Nigeria,
Conoco Energy Nigeria Limited, African Petroleum Plc
5: THE INDIGENOUS OIL OPERATORS

Background, Indigenous Operators
6: THE OILFIELD SERVICE INDUSTRY

History and Services, Petroleum Technology Association of Nigeria
7: THE MINING (MINERAL) INDUSTRY

Solid Minerals Mining Histor, Mineral Occurrence, Mineral Production, Geological Synopsis of Nigeria
8: DOING BUSINESS IN NIGERIA

Business Opportunities
ADDENDUM
The Industry-Wide E&P Committee for International Conferences, 2000. Published May, 2000 For the Year 2000 Offshore Technical Conference, Houston, Texas, USA
The Nigerian Industry-Wide E&P Committee for International Conferences is acknowledged for the time devoted throughout the exercise.
Whilst every care has been taken to compile facts and figures in this brochure, the Nigerian Industry-Wide E&P Committee for International Conferences
cannot be held responsible for loss or damages incurred as a result of transactions.
All rights reserved. No part of this publication may be reproduced, stored in retrieval system or transmitted in any form or by any means electronic,
mechanical, photocopying, recording or otherwise without the prior written permission of the Committee:
The Industry-Wide E&P Committee for International Conferences c/o Nigerian National Petroleum Corporation (National Petroleum Investment Management Services)
Plot 1637 Adetokunbo Ademola Street, Victoria Island, Lagos
Tel: 234-1-2619355, 2613026
Fax: 234-1-2615733
Website: nigeriaoilandgas.org
CHAPTER 1: Nigeria
HISTORY
Nigeria is the most populous and one of the
most culturally diverse countries on the
African continent. Located in the western part
of Africa, it was a former colony of the United
Kingdom and obtained its independence on
October 1, 1960. The Federal Republic of
Nigeria was created on October 1, 1963 after
three years as a sovereign and independent
state of which the British Sovereign was the
titular head.
In the early colonial days, Nigeria was

administered under two Protectorates, the
Northern and Southern Protectorates, which
were amalgamated on January 1, 1914.
Nigeria became the 99th member of the United
Nations Organisation on October 7, 1960.
The country is a member of the
Commonwealth of Nations, the Economic
Community of West African States
(ECOWAS), the Organisation of Petroleum
Exporting Countries (OPEC) and in January,
Two of the four distinct climatic zones in Nigeria: coastal mangrove swamp and tropical rainforest
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NIGERIA: Great Expectations, Abundant Opportunities

1962 hosted and became a founding member of
the Organisation ofAfrican Unity.
Northern Nigeria before spilling over into the

Republic of Niger and the Sahara Desert.
GEOGRAPHY AND LOCATION
POLITICAL ENVIRONMENT
Nigeria is located between 4 and 13 degrees

East longitude and 4 and 14 degrees North
latitude. It occupies a land area of 923,800km2
(357,000sqmiles) - four times the area of Great
Britain and equal to the American (USA)
states of Texas, Alabama, Indiana and
Delaware - with an average density of 96
persons/km 2.
In May 1999, Nigeria adopted the American

style of democratic governance. Thus, the
Federal Government is headed by an
Executive President while the State
Governments are headed by State Governors.
The Federal (National) Assembly is comprised
of the Senate and the House of
Representatives. A State Assembly exists in
each of the 36 states.
There are four distinct vegetation zones which

trend roughly south-north and this also reflects
the rainfall distribution pattern in the country.
Coastal mangrove swamps merge into tropical
rainforest to a depth of between 60 and
100miles over gradually rising ground that
reaches about 2,000feet AMSL. This hilly
region forms the watershed between the
coastal rivers and the Niger River tributaries.
Beyond the northern flood plains of the Niger
and Benue Rivers, the land rises sharply in a
steep escarpment to form the great plateau of
Northern Nigeria where levels of over
4,000feet are known. Rockier ranges thrust
upward to about 6,000feet. This constitute the
middle Savannah belt of the country, that
gradually gives way to the drier area of
The Government maintains healthy relations

with the United Nations, the European Union,
the Commonwealth, the Group of 8 countries,
the International Monetary Fund, the
International Finance Corporation.
CLIMATE
Nigeria lies within the tropics just above the
equator, therefore, it enjoys roughly equal
number of hours of daylight and darkness all
year round. Its climate is dominated by 2
seasons: the dry season spanning NovemberApril/May and the wet season running from
May/June-through to October with a poorly
defined 2weeks rain break usually around
August/September. Thus, the country is
favoured with an abundant and reliable rainfall
in the southern part and a seasonal semi-arid
climate in the northern part.
Rainfall varies from a maximum of 2500mm
(100inches) per annum in the coastal areas to
about 600mm(20inches) along the northern
border. Temperatures range from 200C - 400 C
with little seasonal variation.
Humidity is usually high, especially in the
south except for a brief harmattan period
(December/January) when it drops due to the
Vegetation map of Nigeria
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influence of the cold dry wind which blows in
from the northeast spreading significant dust
storms across the country. Certain
geographical zones notably the Jos Plateau,
the Mambilla/Biu Plateau and the Obudu
mountain ranges bordering on the Cameroun
line experience close to temperate weather
conditions for a significant part of the year.
POPULATION/HUMAN RESOURCES
The population of Nigeria is estimated to be
over a 100 million people. This is however
concentrated in 3 major axes:
1. The Oyo-Ondo axis in the SW
2. The Imo-Akwa Ibom axis in the SE
3. The Kano-Katsina-Sokoto triangle in the
NW
About 80% of the population live in rural
areas and are dependent on agriculture for
their livelihood.
There are 33 universities (four are privately
owned while the rest are owned by the Federal
and State governments) and 40 polytechnics.
These institutions turn out some 120,000
graduates annually. Adult literacy stands out at
57%, (65% being males and 35% for females).
The total labour force comprises nearly
43million people.
Population spread shows an active workforce

comprising both skilled and semi-skilled labour.
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LABOUR RELATIONS
The labour movement, like the press in
Nigeria is well organised, free and vibrant.
Labour relations are good and the principle of
periodic collective bargaining is very well
respected by all parties. Consequently, strikes
and lock-outs are rare in the private sector.
A total of 48 unions exist under the umbrella
of the Nigerian Labour Congress.
In the oil and gas industry, there are only two
unions, namely the Petroleum and Natural Gas
Senior Staff Association (PENGASSAN) and
the National Union of Petroleum and Gas
Workers (NUPENG).
MACRO-ECONOMIC SETTING
Nigeria is regarded as the second largest
economic power in Africa. Until the 1970s, it
was an agricultural economy providing
employment for 80% of its labour force and
the bulk of the foreign exchange earnings. The
oil era in the mid-1970s turned the table
around, as Nigeria became a major oil
producer and exporter. Currently, Nigerias oil
production accounts for 8% of OPEC total
daily production and 3% of the worlds
volume. This sector remains the mainstay of
Population, mid-year (millions):
117.9
GNP (Atlas Method, US$ billions):
30.7
GNP per capital (Atlas Method, US$):
260
Population growth rate(%):
2.9
Labour force growth rate (%):
2.8
Urban populatio n (%):
41
Main export product:
Oil
Currency:
Naira (N)
Exchange rate: (N /$):
100/1
Nigerias key economic indicators: 1997
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Cattle rearing is mainly predominant in northern Nigeria with the herdsmen migrating to the south during the dry season. One of the
numerous traders prevalent in the east and western parts of Nigeria. Aerial view of Onitsha Main market. Trading is a big contributor
to the Nigerian GDP and plays a key economic role in employment of labour
the economy, accounting for 35% of the GDP

estimated at US$35billion. It accounts for 96%
of foreign exchange, and about 80% of total
government revenue.
MACRO-ECONOMIC INFRASTRUCTURE
Under the present democratic setup, Nigeria
has enthusiastically opted for a free-market
economy. There are plans to privatise all stateheld interests in all commercial business
enterprises including mining,
telecommunications, power and steel, hotels,
as well as the upstream and downstream
sectors of the oil and gas industry.
All policies and laws inhibiting private
investments (both local and foreign) have been
revised and or completely scrapped where
appropriate. Both the President and State
Governors are fully committed to encouraging
foreign investments in the country.
To buttress a commitment to transparency and a

free-market economy, the following measures are
being put in place:
l An anti-corruption bill is being debated at
the National Assembly.
l
All Federal Government tenders are now

subject to open competitive bidding.
National and State Assemblies mandatorily

subject the revenue and expenditure
budgets of governments to scrutiny and
statutory approval.
A National Investment Promotion Council

(NIPC) has been established as a one-stopshop approval body.
A three phase programme (2000-2003) for

the privatisation of government
enterprises has been announced. It will
involve over US$20billion of assets and
businesses.
The United States of America is the major

importer of Nigerian crude oil, followed by the
Netherlands, Spain and ECOWAS Countries.
Agriculture is the biggest employer of labour providing

about 80 percent employment for the rural populace
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Nigerias imports consist largely of machinery

and transport equipment. Others are chemicals
and a number of manufactured goods. 14% each
of her total imports come from Germany and the
United Kingdom with the US contributing 12%,
France 9% and the Southeast Asian countries as
a group contributing 15%.
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FISCAL AND MONETARY POLICIES

The official currency is the Naira and Kobo.
One Naira is equivalent to 100kobo. The Central
Bank of Nigeria (CBN) is the sole authority for
issuing currency notes and coins. Visitors can
exchange their money for the Naira in accredited
bureaux de change and banks.
Commercial transactions are done at the
parallel market exchange rate which historically
was about four times the official exchange rate.
Presently, both exchange rates are at par, and
cost projections can be safely done at
N100.00 = US$1.
Tax concessions, import and excise duty
concessions have been given on a wide range of
imports in order to jumpstart local manufacturing
and improve capacity utilisation in the factories
and manufacturing plants.
Ports reforms to aid the accelerated clearing
of goods at the ports and fiscal discipline in
government spending are part of the new
democratic administrations cardinal policies.
BANKS
There are 55 commercial banks, 28 merchant
banks (majority of which are wholly privately
owned) and 6 development banks (government
owned and are undergoing complete
re-organisation for better efficiency).
The total national branch network of all the
banks is substantial with a combined market
capitalisation in excess of US$2billion.
A number of foreign banks now have offices in
Nigeria. These include Citibank and Standard
Chartered Bank. The World Bank, IMF, IFC are
very active in Nigeria, with both the World Bank
and IMF having resident offices.
One of the numerous banks in Nigeria with overseas

correspondence banks
INSURANCE COMPANIES
There are 110 insurance companies and 4 reinsurance companies most of which have
correspondent relationship with leading reinsurance companies worldwide.
CULTURAL AND ETHNIC DIVERSITY

Nigeria is one of the most culturally diverse
states in Africa. The major languages in
Nigeria are Hausa, Yoruba and Ibo. Following
the Greenberg Classification (1963), the three
major language families of Africa are all
represented in Nigeria and within each family
a wide variety of language sub-stocks exist.
Nigeria is thus perhaps the most linguistically
diverse country in Africa. The major Nigerian
language of the Afro-Asiatic family is Hausa,
but others exist such as Shuwa Arabic and
Tamashar (the language of the Tuareg). All
seven of the sub-stocks of the Niger-Congo
family are represented in Nigeria:
n
n
n
n
n
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Kwa (including Ibo, Yoruba, Edo, Nupe)

Ijaw
Benue-Niger (including Ibibio, Tiv, Jukun
and Birom)
Adamawa-Eastern
Voltaic (including the Barbu languages of
Bornu State
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From left the alkita, the goge, talking drums and the oja musicians representing the diversity of the
cultural heritage of Nigeria
n
n
Mandingo (including the Bussa)

Atlantic Groups (primary Fulah). Within the
Sudanic language family, Kanuri and to a
much lesser extent, Songhai.
Due to this complexity of ethnic background and

the colonial association, English language has
been adopted as the lingua franca and official
language of the people of Nigeria.
The country because of its rich ethnic and cultural
diversity is characterised by various cultural
history, origin, beliefs, occupation, and arts and
crafts. However, two major religious groups exist
within the country. These are Christianity and
Islam. A significant proportion of the population
do however, practice traditional religion.
PEOPLE AND TOURISM

Nigeria, because of its cultural and ethnic
diversity, is a fascinating country where the
complementary diversities of the people, their

customs and vitality are enough to attract,
charm, amuse and satisfy the tourist in search
of colour, gaiety and excitement or the most
tired and weary traveller in search of
investment.
Nigeria offers beautiful high-lands such as
plateaux and rolling hills, rivers as the Niger
River which is one of the longest in the world,
waterfalls, and a variety of landscape ranging
from the surging surf on the white sandy
beaches of the coast, through the maze of
creeks and waterways of the Niger Delta.
Added to these are the tall, tangled forest of
the south, and the rising hills and savannah
country of the middle belt, the rolling plains,
the rocky outcrops of the plateau and its sharp
escarpment. This finally gives way to the long
fingers of the Sahara desert creeping over the
northern border.
Wildlife is abundant in Nigeria from the mangrove swamps in the south to the sprawling savannah in the north. Here an antelope
in the Yankari Games Reserve, a gorilla in the Oban Games Reserve and elephants at the Yankari Games Reserve.
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The Presidential Hotel, Port Harcourt, one of the

international hotels in one of Nigerias twin oil cities
However, the real variety and excitement that is

Nigeria is her people. They are characterised by
good neighbourliness and friendliness, especially
to visitors.
Generally the dry season offers the most attractive
and convenient time to embark on trips and
conducted field classes across the country. Roads
are usually in a better state. Rock exposures are
best climbed or studied during this period as
vegetation is scanty (significant bush burning/
farming season) and most river banks are
exposed since river stage is at its lowest. The
weather is hot with much sunshine and
temperatures are in the low 30oC. Humidity is
usually high and you get sweaty and sticky
between 1100hrs and 1600hrs. However, if the
harmattan winds are on, then it is pleasurable as
humidity drops significantly.
A Hausa man inside the walls of the old city in Kano,

Northern Nigeria
Sites range from crater lakes to several water

falls (Assop, Kurra and Kwali), the Yankari
National Park and the Jos Museum and Zoo.
The Kwi Hill (a flat top laterite capped residual hill) on

the Jos Plateau. The foot trail that leads to the top
attracts the starter to take the first step
THE NORTHERN ZONE

The northern zone comprises mainly of the Hausa
and Fulani whose major language is Hausa. The
majority are farmers both animal (nomadic cattle
rearers) and crop traders.
The north, with significant variation in climate
associated with elevation and new Sahel
conditions (hills, plateaux) offers quite attractive
sceneries. Jos with its near temperate climate is a
popular tourist centre.
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The shrub-savana of the Gongola basin. The tertiary

phonolitic (basalt) plugs (Tangale Peak) can be
seen in the distance
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Others are the Zuma
Rocks (Suleja, Niger
State), Bama Rock
(Borno State), and
the Mambilla Plateau
in Taraba State.
Major art works
include; leather works
in Jos, Kano, Kaduna
and Sokoto, brass
Food stuff particularly
and local glass beads
vegetables from the temperate
region of the world thrive on
in Bida, making of
the plateaux of northern
Nigeria
local fabrics and
weaving. The north
has fairly large markets, like the Kurmi
market, Kano. For those who enjoy bird
Fired clay pot making is common among all Nigerian peoples.

Associated beads from various parts of Nigeria particularly
around Bida is usually worn during ceremonies.
watching, the Lake Chad environment is a haven

for a variety of birds. The Argungu fishing
festivals is a popular yearly sport.
THE EASTERN ZONE

The Ibos are the dominant group of this zone.
They have a complex network of trading
routes, which link the separate settlements
where they live. The major trading centres are
the Onitsha Main Market, Aba Main Market and
Nnewi Spare Parts Market.
The major tourist centres are the Nike Lake in
Enugu State and the Ogbunike Caves and
Resort Centre (Anambra State), the Oguta
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The fierce looking but entertaining Abiriba dancers
Lake, Oguta, the National War Museum,

Umuahia (Abia State).
Caves are a common feature of carbonate terrain. The

Ogbunike Cave is carved out of the Nanka Sandstones
(Eocene) A multiple of 39 steps takes you to the mouth
of the cave which is in southeast of Awka,
Anambra State, Eastern Nigeria
THE SOUTHERN ZONE

This comprises the people of the Niger Delta.
The zone stretches from the Benin River in the
west to the Cross River in the east. It is a low
lying land of innumerable creeks, waterways and
mangrove swamps where the inhabitants have
always been able to communicate with one
another through waterways and roads. The
principal people of the delta are the Urhobo,
Ijaw, Itsekiri, Isoko, Edo, Efik, Ibibio,
Ikwerre, Okrika and the Kalabari.
It appears from tradition that these ethnic
groups have had kings and some form of
centralised government since earliest times.
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Cross River State as well as the OPI beach
Eleme in Rivers State.
Benin Kingdom is characterised by its rich cultural

heritage. The most famous people in the use of
brass and bronze are the Edo of Benin. Indeed,
art reached its peak of perfection in skill, grace
and beauty in Benin, and the antique bronzes of
Benin equal those produced in any age in any
other part of the world.
The mermaid dancers from Rivers State in a
stage performance during a local festival.
The Obas Palace and a couple of other well

established traditional homes are worth
visiting. The trip around the various craft
quarters and the remains of the famous Bini
moat is worth your while. There are also other
rich cultural heritages in Cross River and
Efik dancers from the southern part of Nigeria.
Therefore, from the point of view of internal

development, such political institutions have ever
been a part of their life. They however collectively
form the minority group within the Nigeria
context.
The Queen Mother of Benin

depicted in this 16th Century
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The major
tourist centres
in the south are
basically the
Abraka River
Resort and
Abraka Turf
Club both in
Delta State, the
Benin Zoo in
Edo State, the
Obudu Cattle
Ranch and the
Obudu Hills in
Fishing in one of the numerous creeks of the Niger Delta. The

waterways of the Niger Delta are an important means of
livelihood and transportation in southern Nigeria.
Akwa-Ibom States. Boat regattas are a

common feature amongst these riverine
communities.
THE WESTERN ZONE

The Yorubas make up this zone and their
ancestral home is Ile-Ife. Their lingua franca is
the Yoruba language. Majority of them are
businessmen and work in a variety of
establishments across the country. They appear
to have benefited from formal education early as
certain families have a number of generations of
literate persons.
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Some of the old traditional towns like Oyo,

Ile-Ife, Ogbomosho, Ibadan, Ede have craft
exhibition centres around the palaces of the
kings/Obas and these are also worth visiting.
Yoruba musicians playing the famous talking drums
The beaches in and around Lagos are good

resorts and recreational centres. These include the
Lekki Beach and the Coastal Rocky Beach in
Badagry. While in Badagry, it will be nice to see
the first recorded storey building built in Nigeria.
The Ikogosi Warm Spring in Ekiti State, the
Idanre Hills in Ondo State, the Animal Zoo in
Ibadan and Lagos and the popular Olumo
Rocks of Abeokuta, are worth a visit.
The Yorubas of Western Nigeria have mastered the intricate

art of carving, par ticularly, on calabashes and gourds
Like the Binis, the Yorubas are also rich in

cultural heritage and bronze works. They are
believed to have similar origin. The National
Theatre and National Museum both in Lagos
are sites to visit.
The Ikogosi Warm Spring in Ekiti State is a popular

tourist attraction with therapeutic benefits
The rich rainforest of southern Nigeria abound with

numerous species of plant and animal life. Takwa Bay,
off the coast of Lagos, is a popular tourist attraction.
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CONTENTS
CHAPTER 2: Infrastructure
Nigeria has the most extensive road and railway
networks in Africa. The majority of domestic
trade in staple goods is from north to south
between the different ecological zones of the
pastoral/agricultural north and the predominantly
food/cash crop south. This is further
supplemented by the flow of export trade from
the interior to the southern ports. This pattern of
movement can be depicted in the transport
infrastructure.
AIR TRANSPORT
There are four main international airports
located in Lagos, Kano, Port Harcourt and
Abuja. There are limited international
connections to neighbouring countries from
Port Harcourt and Calabar. Most of the larger
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towns and cities are connected to Lagos and

Abuja by an extensive network of domestic
flights. Most parts of the country are
accessible by light aircraft. Similarly, the main
oil cities of Port Harcourt and Warri are well
inter-connected by regular sponsored flights
with Lagos and more recently Abuja.
Air fares are at a rate which allow free
movement of passengers across the country
and several private airlines are well
established in competition with the national
carrier. Air traffic and utilisation are generally
dense. Flight bookings must be confirmed
regularly.
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subsidiary container terminals at Kano, Kaduna

and Minna.
PORT HARCOURT
Construction work to improve the infrastructure is a

priority of the government
PORTS
The two main seaports are located in Lagos
and Port Harcourt. These ports are organised
in the traditional manner and have heavy
traffic all year round. The smaller delta ports
of Calabar, Warri, Onne, Sapele and Koko
were modernised in the 1970s and have spare
capacity.
However, facilities for bulk handling of
mineral exports (except for petroleum) are
very limited. All ports have been under the
Nigerian Ports Authority (NPA) since 1954,
which has recently been commercialised.
LAGOS
This is the principal port of Nigeria, and
handles approximately 750 vessels per year
with import of 5.3 million tonnes and 0.3
million tonnes of exports. Ocean going vessels
up to a maximum of 9.5metres draft can be
accommodated. It has modern cargo handling
facilities up to 50 tonnes capacity, including 4
dedicated container berths and RoRo facilities
at the Apapa Wharf. The Ijora Wharf has bulk
handling facilities of 70tonnes per hour
capacity for cement, coal, gypsum and
fertilisers.
Lagos is linked to all parts of Nigeria by direct
road and rail connections, and has upland
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This port is located 65km upstream from the

mouth of the Bonny River, and is approached
by a channel dredged to a depth of
11.58metres along the river. The port can
accommodate ocean going vessels up to
7.32metres draft and has cargo handling
facilities of up to 48tonnes capacity. Port
facilities are currently adequate only for 1520,000tonne ships.
Containers are handled at the general cargo
berths. The Coal Jetty (Berths 8) is being
rehabilitated in phases. On completion, it will
be fully mechanised having a Stage Loader
and Coal Hard Site to enable export of up to
20,000tonnes of coal per shipment.
Annual traffic is approximately 250 vessels,
totalling 2.9 millions dwt.
ONNE
Located 25km downstream (south) of Port
Harcourt on the Bonny River Estuary, the port
is being equipped for ocean going vessels up
to a maximum draft of 9.2metres. It will have
on completion modern handling facilities of up
to 40,000tonnes capacity, including containers
handling, RoRo and bulk handling facilities.
The bulk-handling berth is expected to
accommodate vessels up to 55,000dwt. It is
envisaged that the port will handle imports of
iron ore and coking coal for the Ajaokuta Steel
Works.
Annual traffic is approximately 20 vessels,
totalling 100,000dwt.
ONNE FREE TRADE ZONE (FTZ)

Incorporated into the planned bulk handling
facility expansion programme under
construction is a 20km rail link to Port
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Harcourt. This is part of Governments intention
to establish a free trade zone at the Onne Port.
Although, the port cannot handle Panamax
Vessels, the deeper draft of 8metres could allow
for vessels of 40,000tonnes in the right
configuration.
CALABAR
This port is located 67km from the mouth of the
Calabar River and equipped currently for ocean
going vessels up to a maximum draft of 8metres,
(recent dredging). The port has modern cargo
handling facilities up to 25tonnes capacity. Annual
traffic is approximately 80 vessels totalling
900,000dwt. The port was recently developed as
an Export Processing Zone (EPZ) or Free
Trading Zone (FTZ).
These two free ports (EPZ/FTZ) were
established with special incentives to attract
manufacturers and suppliers to set up their
plants and supply bases in Nigeria.
WARRI
The port of Warri is located some 100km
upstream from the mouth of the Warri River.
The port can accommodate ocean going
vessels up to a maximum draft of 7.5metres
and has modern handling and RoRo facilities.
There is a bulk handling facility with a
capacity of approximately 1million tonnes per
year, which serves the Aladja Steel Works
situated 5km east of Warri. Annual traffic is
approximately 550 vessels totalling 3.5million
dwt.
KOKO
Located on the Benin River, 32km west of
Sapele, this port can accommodate vessels up
to a maximum draft of 6.4metres. It has cargo
handling facilities up to 15tonne capacity.
Annual traffic is approximately 20 vessels
totaling 75,000dwt.
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SAPELE
This port is located at the confluence of the Benin,
Jamieson and Ethiope Rivers, some100km
upstream from the mouth of the Escravos River
and 32km upstream of Koko. The port can
accommodate ocean-going vessels up to a
maximum draft of 6.4metres, although the
maximum depth alongside the quay is only
4.5metres. There are no modern cargo handling
facilities, and annual traffic is approximately 15
vessels totalling 100,000dwt.
OIL TERMINALS
BONNY ON-SHORE
The Bonny On-Shore Terminal is a crude

petroleum terminal. It is sited on the eastern
side of the Bonny River Estuary about 30km
from the Fairway Bonny.
It has three main berths and a standing berth.
These are labelled Berth A, C and D, while
Berth B is a standby berth. Berths A and D
have the capacity to handle vessels of up to
78,236dwt, 310 metres of length and 15metres
draft. Berth C can handle vessels of
53,851dwt. Loading at the berth is done by
means of a submarine line at an average rate
of 4,064 tonnes per hour.
Berth B can take vessels of 47,754dwt and
335metres in length. The terminal is operated
by Shell Petroleum Development Company of
Nigeria Limited and Elf Petroleum Nigeria
Limited.
BONNY OFF-SHORE
This terminal is operated by Shell Petroleum
Development Company of Nigeria Limited
and Elf Petroleum Nigeria Limited. It is made
up of two single mooring buoys. It utilises the
storage facilities at the Bonny On-Shore
Terminal, and has a loading rate of 61,712
barrels of light crude oil per hour and 58,400
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medium crude per hour. The permissible
maximum loading draft is 22.86metres. The
terminal only allows for one loading vessel at
a time.
BRASS OFF-SHORE
This single mooring terminal is operated by
Nigeria Agip Oil Company Limited. It has a
storage capacity of 1,878,000 barrels. It has
a pumping rate of 9,500 barrels per hour
with booster pump. The permissible loading
draft is 30.48metres.
ESCRAVOS
This is a jetty for the handling of crude oil. It
is located off the mouth of the Escravos
River and has two single point mooring
buoys with minimum water depths of
32metres and 21.95metres respectively.
The storage capacity of the terminal is
2.8million barrels with a loading rate of
25,000 barrels per hour. The terminal can
handle vessels of any length and the average
turn-around time per vessel is about 36
hours.
PENNINGTON
This is an offshore tanker-loading berth. It
has a storage capacity of 367,000 barrels
with a maximum loading rate of 18,000
barrels per hour. The average turn-round
time for vessels at the terminal is 42 hours.
The port has a maximum loading draft of
13.72metres and has no length restriction
since any vessel of whatever length can load
at a time in the terminal.
FORCADOS
This terminal is located off the Escravos
River Bank. Its terminal comprises of two
single mooring buoys. It has a storage
capacity of 7.3million barrels and a maximum
loading rate of 86,250 barrels per hour.
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There are no restrictions on the length of ship

that can load at the terminal, and it has a
permissible maximum loading draft of 19.81
metres. The average ship turn-round time is
about 40 hours.
QUA-IBOE
This is a private terminal owned and
operated by Mobil Producing Nigeria
Unlimited. It is located on the Qua-Iboe
River on latitude 40 33N and longitude 70
59E at Ibeno.
The facility has a tank farm, a pipeline system
and 10 loading berths. The crude oil tank farm
has capacity for 500,000 barrels of crude oil.
The loading berths are made up of a sevenpoint spread mooring of 8km length, and a
single point mooring with a depth of water of
26.56metres. Loading capacity averages
30,000 barrels per hour at the spread mooring,
and 65,000 barrels per hour at the single point
mooring.
ANTAN OIL
The Antan Oil Terminal is a new oil terminal.
It is used for the shipment of crude oil. It
commenced operations in 1986. An offshore
terminal, the facility is mainly operated by
Addax Petroleum Nigeria Limited, a private
oil company in Nigeria.
RIVER TRANSPORT
The management of navigable waterways is
the responsibility of the Inland Waterways
Department of the Ministry of Transport and
Aviation. River transport suffers from the fact
that most of the rivers are only navigable for
larger vessels during the rainy season (that is,
6months of the year). The navigable portions
of the Niger River is up to Lokoja, while the
Benue can take barges up to 45 tonne
capacity as far as Garoua in Cameroun.
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However, no direct navigation link exists
between the Niger-Benue River system and
the ocean. All export-import traffic is
transferred to land based transport at the
coast.
THE RAIL NETWORK

The railways, constructed between 19001960 is administered by the Nigerian Railway
Corporation (NRC). In 1993, it was reorganised into 3 units: (i) Nigerian Track
Authority (ii) Nigerian Railway and (iii)
Nigerian Railway Engineering Ltd.
There are three separate single track, narrow
gauge (1.067mm) rail transport corridors,
running inland from the coast. These are:
i)
the central railway which links the Niger

River Port of Baro with Kano and KauraNamoda;
ii) the western railway which runs from Lagos

and joins the central railway at Minna; and
iii) the eastern railway which runs north from
Port Harcourt via Enugu (Coal fields) to
Jos (Tin mines), turning northeast to
Maiduguri.
These last two systems are interconnected by
a single 150km link between Kafanchan and
Kaduna.
Two (2) new standard gauge sections
comprising:
1. A 56km stretch Ajaokuta-Itakpe line,
which has been completed and,
2. the Ajaokuta-Warri route, a 260km
stretch (at an advanced stage of
construction) are being added to the
network.
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A current contract with the Chinese involves

rebuilding the rail lines on standard gauge
using heavier UIC60 and installation of a
completely new signalling system nationwide.
When completed the rails will handle track
speeds of up to 100km/hr.
ROAD NETWORK
Nigeria has a dense and well developed
network of roads. Totalling 143,000km, this
forms the important means of transportation.
There are four categories of roads in the
country:
i.
Highways (with intermittent double

carriageway).
ii. A Class Trunk Roads (30,000km)

iii. B Class Trunk Roads (20,000km)
iv. Other Roads
Nigeria has completed a significant proportion
of its own commitment towards the TransAfrican Highway Network.
ELECTRIC POWER DISTRIBUTION

The National Electric Power Authority
(NEPA) operates all generating stations and
the national distributing grid to deliver 50Hz,
230volt electricity. There are eight major
generating stations supplying the grid with a
total installed capacity of 5,890MW. They
comprise three gas-turbine stations at Afam,
Sapele and Ughelli; two gas fired steamturbines at Sapele and Egbin (Lagos); and
three hydro-electric stations at Kainji, Jebba
(on the Niger River) and Shiroro (on the
Kaduna River)
The transmission grid consists of a primary
grid operating at 330KV. This links all the
generating stations to the grid control centre at
Oshogbo, as well as transformer substations
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at Benin, Onitsha, Aba, Kaduna, Jos, Kano

and Enugu. A secondary transmission grid
operating at 132KV supplies the local
distribution networks operating at 33KV.
In addition to the above, there are:
i.
A coal fired power station at Enugu on the

Oji River (not in use)
ii. Hydro-electric power supply system built and

developed by the tin mining companies on the
Jos Plateau, (1929). Today the Ankwili Dam
operates as Nigerian Electricity Supply
Corporation (NESCO); has US$3.4billion in
assets and generates 3.3MW of electricity,
some of which is sold to NEPA.
One of the numerous electric installations managed

by NEPA. The parastatal is slated for privatisation
to boost provision of electricity in the nation.
iii. Major oil operating companies have their own

generating capacity for full operations.
iv. Major hotels in most cities and factories have
installed generating facilities, which provide
power
v. Most of the small towns and villages rely on
diesel powered generating sets.
vi. Several other dams which are expected to
generate power and provide irrigation
water.
Consideration is being given to privatising
NEPA.
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CONTENTS
CHAPTER 3: The Petroleum Industry

EXPLORATION AND PRODUCTION
HISTORY
Although oil production in Nigeria began in
1958 with the discovery of the Oloibiri field in
the eastern Niger Delta Basin, oil prospecting
dates back to 50 years earlier. In 1908, a
German company, the Nigeria Bitumen
Corporation (NBC) started exploration in the
Araromi area of the present Ondo State, based
on the Mineral Survey Report conducted in
1905. The Mineral Survey of Southern Nigeria
had drilled 16 shallow boreholes (4-9m) on a
line of oil seepage now known as the tarsand
belt. The report indicated the occurrence of
tarry sands (oil sands) in parts of the
Okitipupa Structure (Eastern Dahomey
(Benin) Basin). NBC drilled 15 wells along
the onshore areas of the basin between 1908
and 1914. The wells struck the crystalline
basement at relatively shallow depths
(max.712.3m) but established the presence of
several horizons of oil sands. This was to set
the pace for oil exploration campaign in
Nigeria.
Further exploration continued between the two
World Wars with Shell Overseas Exploration
Company Ltd and DArcy Exploration
Company Ltd (Shell DArcy) exploration
parties conducting geological reconnaissance
and geophysical surveys in selected areas in
Nigeria in 1937. In 1938, Shell DArcy were
jointly granted oil exploration licence (OEL)
to explore for oil throughout the country.
Between 1951 and 1959, Shell DArcy and
later (1956) Shell-BP had drilled 6 wells in the
Benin Basins.
The first deep test in 1951 (Iho-1 NW of
Owerri) into Cretaceous sands on the northern
fringe of the Niger Delta Basin proved
abortive, and by 1955, some 15 dry holes had
been drilled into Cretaceous prospects with no
real finds. However, encouraged by the first
oil show in the Tertiary Niger Delta Basin
(Akata-1 well) drilled in 1953, Shell
intensified its search in the basin and in 1956
made its first major success in
the Oloibiri structure.
This significant find at Oloibiri
focused the search on the Niger
Delta Basin and this trend has
dominated exploration till
present.
Tarsand outcrop belt bordering on the crystalline basement/sedimentary rock contact

along the Okitipupa structure. It stretched over a 5-8km wide band running from just
east of Ijebu-Ode town (Ogun State, southern Nigeria) to the banks of the tributaries of
the Siluko River at Ofosu village (Edo State) a distance of 110km.
CONTENTS
Shell-BP relinquished portions

of its onshore licence in 1959,
allowing a number of other oil
majors to be granted licence to
explore for oil in Nigeria. The
Benin Basin was further
explored in the 1960s and 1970s
due to the surface evidence
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presented by the oil sands
and heavy oil. Offshore
licences were granted to
Shell-BP, Gulf, Mobil and
Texaco in 1961 and the
first offshore production
began in 1965 following
the discovery of oil in
Okan field by Gulf Oil
Company. With this
discovery, it was certain
that the Niger Delta Basin
had significant prospect for
an oil province.
One of the sets of oil exploration wells drilled in Nigeria (1907-1914). NBC-7 was drilled south
of the Tarsand outcrop belt at Agbabu village into the crystalline basement at 298m. It penetrated
several horizon of oil bearing sands to depths of 286m. The oil is biodegraded, heavy and highly
viscous. Drive mechanism is bottom waters (artesian flow). Bitumen can be scooped out from
within a couple of metres from casing head. Elevation 23m AMSL.
Nigeria presently has more

than 250 oil and gas fields
of which some 120 fields are producing.
Nigerias proven reserves now stands at
30billion barrels of oil from its onshore,
proximal, deep and ultra deep offshore areas.
Its proven natural gas reserves are of the
magnitude of 120trillion cubic feet with
recoverable gas reserves of 45tcf, ranking
Nigeria as the 9th in the world. Most of these

reserves are onshore, discovered during oil
exploration, essentially, as associated gas.
Current LNG exports which commenced in the
last quarter of 1999, stands at 5.7million tons
per annum. This is expected to increase by
another 2.8 million tons annual products in
With an impressive exploration success ratio of about 50%, production and export grew steadily during the 1970s peaking
in 1979 at 2,443,919bopd. The oil and gas industry has become the dominant force in the Nigerian economy
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49% of total wells drilled by 1960 were successful, while 84% of the 352 appraisal wells drilled were successfully completed.
The low experienced between 1968-1970 was due to the Nigerian civil war which affected the Niger-Delta area.
2002 when a third train is completed at the Bonny

LNG plant.
FRONTIER BASINS
based on seismic evaluation of possible

structural configurations. Presently, exploratory
drilling is on hold while re-evaluation of the
acquired data is in progress.
CHAD (BORNU) BASIN
DEEP OFFSHORE
Oil exploration activities started in the Chad

Republic section of the basin in 1969, although,
actual drilling only commenced in 1973. In 1979,
when the Chadian hostilities started and forced
the operator CONOCO out of the area, 21 wells
had been drilled. 7 of these wells were drilled in
the Chad Basin while 14 were in the Chari subbasin.
The first round of deep water licensing took

place in 1991. 21 blocks were initially carved
out, 12 of which were allocated to
multinational operators some of which have
been operating in Nigeria. Seven went to
Nigerian companies. Initial exploration activity
commenced in 1994 leading to the first deep
water well in 1995 by Allied and its partners,
Statoil/BPAlliance.
Spurred by the varying degrees of success

recorded in these efforts, the Frontier Exploration
Services (FES) of NNPC began its own
exploration campaigns in the Bornu Basin in the
1980s. The basin was carved out into 48 blocks
and both geological and geophysical studies were
undertaken. By 1995, 20 wells had been drilled
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Since then 18 wells have been drilled in the deep

offshore of Nigeria. 13 of the wells are
exploratory while five are appraisals. Apart from
the two wells that could be regarded as outright
dry holes, the others have potentials of being
productive.
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The Niger Delta remains the greatest attraction in oil exploration search in Nigeria. A total of 22 blocks comprising
4 onshore, 7 on the continental shelf and 11 in the deep/ultra deep offshore are on the year 2000 open bidding exercise
The most significant of these discoveries are

those of Shell in their two efforts at Bonga
(OPL 212) and Ngolo (OPL 219).
Latest findings indicate that no less than 6
major oil companies have made huge amount
of discoveries to date. These include Elf find
on OPL 222 (Ukot field). Esso, Erha field in
OPL 209, Conoco, Chota field in OPL 220,
and Statoil from the Nnwa field in OPL 217.
It would be premature to state categorically
when the first deep offshore field would be put
on-stream; it is opined that the potential
candidates for fixed production platform would
be the Shell fields of Bonga and Ngolo.
THE GONGOLA BASIN

The granting of Offshore Licence in 1961 meant the
introduction of all kinds of offshore drilling rigs into the
Nigerian coastal waters. These range from the swamp rig
which operate within the mangrove swamps to the jack-up and
semi-submersible capable of drilling water depths of 1,0001,500m. With exploration moving out into the ultra deep, we
should be expecting some water giants in the near future
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Until the early 1990s, very little was known of

this basin with respect to its hydrocarbon
potential. Government strategy to carve and
give out acreage in this basin stimulated some
of the multinational oil companies into
acquiring blocks.
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Chevron, Elf and Shell began data acquisition in
the basin and by 1993 significant geological
mapping of the basin has been carried out
followed by the shooting and processing of 2D
seismic. In the late 1990s, exploration drilling
commenced. Although preliminary results are
not very encouraging, the search for possible
prospect in the basin has only just started.
GOVERNMENT PARTICIPATION
In 1962, a Petroleum Division was created out
of the Federal Ministry of Mines and Power,
but was up-graded in 1970 to become the
Department of Petroleum Resources of the
same Ministry. However, in 1975, it was
transformed into a full-fledged Ministry of
Petroleum and Energy, and later renamed the
Ministry of Petroleum Resources. Its primary
responsibility was for advising the
Government on policy matter affecting the
management of the petroleum resources.
under Decree No.33. NNPC was to handle all

commercial activities.
The Decree also established the Petroleum
Inspectorate, as an integral part of the NNPC
with sole responsibility for statutory controls
and regulations of all activities in the industry.
In 1988 following some re-organisation,
NNPC became a holding company with eleven
(11) new subsidiaries formed, while
government participating interests in the
producing properties remain held by NNPC.
Some of the NNPC subsidiaries include the
following:
NIGERIAN PETROLEUM DEVELOPMENT

COMPANY (NPDC)
Introduction
The Nigerian Petroleum Development
Company Limited, a wholly owned
commercial subsidiary of the Nigerian
National Petroleum Corporation (NNPC), was
set up in June 1988.
Mission Statement
NPDC is to profitably operate a Petroleum
Exploration and Production business both
nationally and internationally.
Vision
NIGERIAN NATIONAL PETROLEUM

CORPORATION (NNPC)
Nigerian National Oil Corporation (NNOC), the
forerunner of NNPC was set up in 1971, to
undertake commercial activities on behalf of
the Government. However, following the reorganisation of the Ministry in 1977, the
Nigerian National Petroleum Corporation
(NNPC) was formed through a merger of the
Ministry of Petroleum Resources and NNOC
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NPDC has a vision to become a medium size

Exploration and Production Company by the
year 2003.
Current Status/Potentials
NPDC has five oil prospecting, concessions
(blocks) covering a total area of 2673.44
square kilometres and traversing onshore,
swamp and offshore terrain of the Niger Delta
producing region of Nigeria. Over the years,
the strategic focus of the company had been to
explore and appraise these concessions with a
view to establishing their oil and gas reserves
potential. While current oil production output
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DEPARTMENT OF PETROLEUM RESOURCES

ORGANISATION CHART
DIRECTOR
LEGALADVISER
DEPUTY DIRECTOR
RESOURCE
MANAGEMENT
BACK
DEPUTY DIRECTOR
INSPECTION
DEPUTY DIRECTOR
TECHNICAL
CONTROL
ASSISTANT DIRECTOR
RESOURCE
MANAGEMENT
UPSTREAM
STANDARDS
DEPUTY DIRECTOR
ADMINISTRATION
AND PERSONNEL
ASSISTANT
DIRECTOR
DEVELOPMENT
DOWNSTREAM
DATA MANAGEMENT
AND
COMMUNICATION
DEPUTY DIRECTOR
FINANCE AND
ACCOUNTS
ASSISTANT
DIRECTOR
ASSESSMENT
FIELD OFFICES
COORDINATOR
LABORATORIES
ENVIRONMENT
AND SAFETY
DEPUTY DIRECTOR
PLANNING AND
STATISTICS
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stands at about 7,000 BOPD, from the two fields
at Abura and Oredo, these explored concessions
boast of a total proven oil reserves of 283
MMSTB and additional speculative oil reserves
of nearly 900 MMSTB. Through the
commissioning of a new field, planned drilling
and completion activities expansion of
production capacity and gas conversion
projects in its producing Oredo field, oil
production is expected to double to about
15,000 BOPD by the end of year 2001.
Current Business Direction

With its low-risk, undeveloped offshore acid
swamp concessions, NPDCs current business
direction is to aggressively exploit and
produce its large oil and gas reserves holding,
by seeking investment funds from interested
international companies under an agreeable
service contract or partnership arrangement. It
is envisaged that the prospective investor, with
adequate technical and financial resources will
provide the total funds required for the
development of agreed number of fields/
blocks. At the commencement of production,
and based on agreed terms, investors shall
fully recover its funds plus agreed profit, if
need be, in oil equivalent. In this regard, an
internationally advertised bid by NPDC for
pre-qualification of prospective investors, in
an offshore block, which generated worldwide interest, is currently being processed. It
is planned that funding for the development of
other prospective blocks with substantial oil
and gas, reserves may be sought in a similar
manner.
Investment Opportunities in the Oil/Gas

Companies in NPDC
In seeking to attain its vision to become a
medium-size within the next few years,
NPDC, intends to:
i) Pursue an accelerated exploitation and
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production of undeveloped proven reserves in

all of its five blocks through agreed
arrangements.
ii) Commence aggressive exploration activities in
the soon-to-be-assigned deep offshore
blocks adjoining the Niger Delta producing
region of Nigeria.
It is instructive to note that based on giant oil
discoveries made so far, the Nigerian deep
offshore area may yet spurn out more oil fields
in the billion barrel proven reserves range.
This perhaps holds the key to the
transformation of NPDC to a big-time player
in Nigerias oil industry scene.
With the huge exploration and field
development capital required to operate in
these deep offshore blocks, it is obvious that
NPDC shall be seeking the assistance and cooperation of medium international oil and gas
companies interested in funding E & P
activities within one of the hottest areas of
current exploratory activities around the globe.
Enquiries from prospective and potential
investors and Joint Venture partners are
welcomed, as NPDC is willing to consider
partnership arrangements that would be
mutually beneficial to all parties.
For further enquiries contact,

The Managing Director
Nigerian Petroleum Development Company
62, Sapele Road, P.M.B. 1262 Benin-City
Edo State, Nigeria.
Tel: 234-52-251907, 251867
Fax: 234-52-259514, 255498
Email: e.ayoola@nnpc.com.ng
NATIONAL PETROLEUM INVESTMENT

MANAGEMENT SERVICE (NAPIMS)
NAPIMS is an incorporated subsidiary of
NNPC under the Exploration and Production
Directorate.
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Mission
The mission of NAPIMS is to optimise the
benefits accruing to the Federation from its
investments in the upstream sector of the
petroleum industry. NAPIMS has a vision of
being a world class oil investment
management outfit.
NAPIMS Strategic Role

NAPIMS major role is to project the nations
strategic interests in the upstream sector of the
industry, and in performing this onerous task,
it earns a margin on investments made in the
sector.
This is achieved through cost reduction
strategies to maximise Petroleum Profit Tax
(PPT) and also enhance margin; promote local
content input by developing in-country
technological capability and use of local
supplies and materials; encourage gas
utilisation and commercialisation; promote
maximum co-operation in communities of oil
and gas producing areas as well as ensure that
environmental protection standards are
maintained.
Tasks/Successes of NAPIMS
In order to achieve the national aspirations and
its vision, NAPIMS has been undertaking the
following tasks:
1. Growing national reserve base from 24.1
billion barrels (with the JV/PSC
companies only contributing 22.5 billion
barrels) as at January 1, 1998 to 40 billion
barrels target by the year 2010 and
increase producibility from 2.5 million
barrels per day to 4.0 million barrels per
day over the same period.
2. Diversifying the revenue base in the
hydrocarbon sector by actively
commercialising natural gas and thereby
ensuring gas flare-out by the year, 2008.
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3. Stimulating the (exploration) interest of

indigenous and foreign companies in
frontier areas.
4. Conducting operations in compliance with set
environmental and safety standards in all JV/
PSC upstream operations.
5. Managing Federation hydrocarbon resources
efficiently and effectively as well as ensuring
that JV operations are in line with the various
operating arrangements (Joint Operating
Agreement, Production Sharing Contract and
Service Contract).
NAPIMS is at the moment engaged in the
following types of participation Arrangements:
i) Joint Operating Agreement (seven)
ii) Production Sharing Contract (ten)
iii) Service Contract (one)
The level of Government equity participation
in the Joint Venture arrangements is as shown
overleaf.
Upstream Operations
The production and export of crude oil has
been the traditional focus of Nigerias
petroleum industry. In the upstream sector, the
NNPC has been able to create mutually
beneficial relationships with oil producing
firms, which have translated into increased
revenues for the country.
Up to 1982, Nigeria enjoyed a boom in oil
exports with revenues climbing to as much as
US$20 billion in 1980.
By 1985, exploration was virtually grinding to
a halt, while seismic exploration activities
were at a standstill. The seriousness of the
situation was underscored by the fact that
reserves were also falling.
In redressing the situation, the NNPC took up the
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10
upon, with several new fields

being discovered on and
offshore. Consequently,
Agip
5
between 1986 and 1998,
crude oil reserves increased
NNPC/Mobil
NNPC
Mobil
60
40
from 11 to 24.1 billion
NNPC/Chevron
NNPC
Chevron
barrels. With current efforts
60
40
at exploration, this is
NNPC/Agip/Phillips
NNPC
Agip
Phillips
expected to hit 40 billion
60
20
20
barrels in the year 2010.
NNPC/Elf
NNPC
Elf
Some newcomers and
60
40
established firms are equally
NNPC/Texaco/Chevron
NNPC
Texaco
Chevron
exploring (for oil) in the
60
20
20
inland basins. The recent
NNPC/Pan Ocean
NNPC
Pan Ocean
awards of acreage in the ultra
60
40
deep water are expected to
challenge and convinced government to
further boost Nigerias crude oil and gas
explore the use of the now well-known
potentials.
Memorandum of Understanding (MOU) in
Elf, Shell, Agip and Chevron are exploring in
1986. Reviewed in 1990 and 1991, the MOU
the Benue Trough in Bauchi and Gombe
has turned out to be a good instrument to
states. Nigerias production capacity, now put
attract new investments, with E & P
companies taking the
BETWEEN 1973 AND 1993, THE FOLLOWING
opportunity of the package of
CONTRACTS WERE SIGNED WITH NNPC:
incentives to embark on serious
exploration works.
PARTNERS IN THE
JOINT VENTURE
NNPC/Shell/Elf/Agip
PERCENTAGE OF SHARE
PARTICIPATION
NNPC
Shell
Elf
55
30
10
COMPANY
Recognising the need to commit

the companies towards investing
in the long-term development of
the industry, the NNPC in 1991
negotiated the working
document, spelling out the
responsibilities of the Joint
Venture partners through the
Joint Operating Agreement
(JOA). The release of both
packages (MOU and JOA) has
done a lot towards improving
the nations crude oil reserves.
Investments in deep offshore
fields have also been embarked
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1.
YEAR TYPE OF CONTRACT
NNPC/Addax Nig. Exploration

(former Ashland)
1973
Production Sharing
2.
NNPC/Agip Energy
1979
Service Contract
3.
NNPC/Statoil/BP
1993
Production Sharing
4.
NNPC/Shell (SNEPCO)
1993
Production Sharing
5.
NNPC/MOBIL
1993
Production Sharing
6.
NNPC/Chevron
1993
Production Sharing
7.
NNPC/Elf
1993
Production Sharing
8.
NNPC/Agip
1993
Production Sharing
9.
NNPC/Exxon
1993
Production Sharing
10. NNPC/Conoco (Dupont)
1993
Production Sharing
11. NNPC/Addax Petroleum Dev.
1993
Production Sharing
(former Ashland)
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at about 2.5million barrels per day, is expected
to peak at 3.3 million barrels per day by the
end of the Plan Cycle, the year 2003. It is to
expand to 4 million barrels per day by the year
2010.
Lately, the NNPC has played a crucial role in
encouraging indigenous participation in the
crucial areas of oil exploration and
exploitation. This line of action has two aims:
to increase the reserves and to encourage
increased indigenous participation in the
industry. Blocks have been allocated to
indigenous Nigerian firms to explore for oil.
Already, some of the firms have found oil in
commercial quantities in their blocks.
MAJOR TYPES OF AGREEMENTS/

CONTRACTS
Joint Venture
Upon becoming the 11th member of OPEC in
1971, and further to its interest acquisition
efforts, Government acquired undivided
percentage interest (participation interest) in
the oil companies. This was vested in the
NNPC, established in 1977.
The Participation Agreement set out the level
of participation of each party in the running of
the affairs of the company. It fixed the
participating interest and obligations of the
parties under the Agreements, the ownership
of the production facilities and working capital
applicable to the operations for the benefit of
the parties; the right and obligations pursuant
to any agreements entered into for the sale,
disposal of rights and obligations arising out
of or incidental to the operation of the joint
venture.
Furthermore, the agreements provide that as
soon as practicable, after the execution of the
Agreements, the NNPC and the companies
shall enter into a Joint Operations Agreement
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11
(JOA) with provisions which shall be in the

form commonly in use in the Petroleum Joint
Venture Agreement, subject nevertheless to
changes as may be agreed upon by the parties
which shall provide for the joint control,
supervision and direction of operations by
mutual agreement of the parties. The present
levels of governments participation in all the
oil producing companies differs, standing at
55% in one of the JVs and 60% in six others,
with the NNPC as the constant senior partner
in the joint venture.
Memorandum of Understanding (MOU)

The MOU is an understanding reached
between the Federal Government of Nigeria
and each of the oil producing companies on
incentives for encouraging investments in
exploration and development activities and
enhancing oil exports. The main objective of the
MOU, signed in January 1986, is to guarantee to
the oil companies a profit margin irrespective of
market conditions. At the time, it became
necessary to sign it to inject new life into an
industry that was dying as a direct impact of the
slump of mid 80s. It is intended, by the incentives
described in the MOU, to ensure a minimum
profit margin of US$2/bbl (January 1986) and
US$2.30/bbl (revised in July 1991), after Tax
and Royalty, to the companies on their equity
crude oil. This objective was achieved by
modifying the existing fiscal regime and
establishing a formula for the calculation of
official selling price upon which a Revised
Government Take is based. This superseded
the (December 1985) fiscal arrangement, which
had provided for the computation of Royalty on
the basis of posted prices and petroleum profits
tax on the higher of actual proceeds or posted
prices.
The revised MOU of July 1991 provided for
Reserves Addition Bonus. To the extent that,
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12
INVESTMENT INCENTIVES
ASSURED BY THE REVISED
AGREEMENTS
The MOU, as completely repackaged in
1991, assured:
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An Increase in capital investment cost

considered
A one-year moratorium for increased
investment beyond an agreed level.
A bonus when reserves are more than the
quantity a company produced in one year
A 15-day notice instead of 45 days to enable
an oil company to lift NNPCs share of
crude oil the company had produced
JOA spells out the details of responsibilities
between all partners
JOA gives legal backing to JV arrangements
made between NNPC and its partners while
Enabling NNPC give notice of take over
when necessary
These new agreements have brought about
an:
Increase in oil wells explored and drilled
Increase in rig count
Increase in reserves
in any one year, the addition to oil and

Condensate Ultimate Recovery exceeds the
production for that year, then the company will
be entitled to a Reserves Addition Bonus in
the form of an offset against its Petroleum
Profit Tax (PPT) liability for that year. The
modalities for calculating the additions are set
out in the MOU.
In consideration for the MOU incentives, the
companies undertook to increase their work
programme and lift certain volumes of
NNPCs equity crude oil, which NNPC was
unable to dispose off and in return shared the
profit margin equally with NNPC.
Joint Operating Agreement (JOA)

The Joint Operating Agreement is an
Agreement between the Operator (Company)
and non-Operator (NNPC) and other partners
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(Companies) in some of the JVs setting out the

modalities for the running of the Joint
Operations. The first Joint Operating
Agreement was signed between Mobil
Producing Nigeria Unlimited and NNPC in
1990. The other companies followed in quick
succession. The JOA Agreement is standard
throughout the industry.
HIGHLIGHTS OF THE JOA:

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Parties share in the cost of petroleum

operations
Each partner can lift and separately dispose
its interest share of production subject to
payments of PPT and royalty
One of the partners is designated the
Operator
The Operator prepares and proposes
programmes of work and budget
Technical matters are discussed and policy
decisions taken at Operating Committee
(OPCOMS) where partners are equitably
represented
The Operator has freedom of action in
specific matter and up to certain limits
Each party can opt for and carry on sole
risk operations
The non operator can audit or cause the
joint account to be audited
Service Contract
The Service Contractor provides all the funds
for exploration, development and production
activities. Title to the OPL is held by the
Nigerian National Petroleum Corporation.
There is only one Service Contract in place
with Agip Energy Nigeria Resources which
covers one OML.
The primary duration of the contract is five
years and the Service Contract terminates
automatically if no commercial discovery is made.
In the event of such termination, both NNPC and
the Contractors owe each other no further
obligations with respect to the contract. If
production commences, the Contractors
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exploration and development costs are
recovered in accordance with procedures and
formulae stipulated in the contract. Usually, the
exploration and development costs are paid in
instalments over an agreed period of time. The
Contractor has no title to the crude oil produced
but he may be allowed the option to accept
reimbursement and remuneration in oil. As an
incentive for the risk taken, the Contractor has
the first option to purchase certain fixed
quantities of crude oil produced from the
Service Contract area.
INTEGRATED DATA SERVICES LIMITED (IDSL)
The Integrated Data Services Limited (IDSL)

is one of the subsidiary companies of the
(NNPC). It is the foremost indigenous service
company operating in the Nigerian Oil
Industry. The head office is in Benin City, a
town located about 250 kilometres east of
Lagos while its Seismic Data Processing
Centre is in Port Harcourt, a city which hosts
most of the oil companies.
IDSL has a mission to market Geophysical
and Petroleum Engineering Services. It
maintains joint venture relationships with
several international service companies
operating in Nigeria in the different areas of its
services. These relationships have put IDSL
on a competitive edge.
Services offered by IDSL are:
l Seismic Data Acquisition
l Seismic Data Processing
l Seismic/Engineering Services
l Data Storage and Management
In Seismic Data Acquisition, IDSL and its
joint venture partners have well equipped
crews operating on land and swamp as well as
shallow and deep water environments. It also
has a state-of-the-art computer system for
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large volume seismic data processing and

quick turn-around time. In both acquisition
and processing, IDSL is well equipped with 2D, 3-D and 4-D capabilities.
In Reservoir Engineering, IDSL offers a range
of services, which include:
Reservoir Simulation Studies for both black and
compositional oil, Reserves Estimation and Field
Development plan, Secondary Recovery Studies,
Unitization Studies, Seismic Data Interpretation
and Geological Studies plus Mapping, VSP
Processing and Petrophysics: Advance MultiMineral, Multi-Well Log Analysis with Core Data
Integration.
IDSL is upgrading its data storage system located
at its head office with state-of-the-art facilities to
offer world-class service in Data Storage and
Management.
The company enjoys the patronage of most oil
companies operating in Nigeria.
Spearhead for Natural Gas

Developoment in Nigeria
THE NIGERIAN GAS COMPANY (NGC)

LIMITED
The Nigerian Gas Company Limited (NGC)
was established in 1988 as one of the 11
subsidiaries of the Nigerian National
Petroleum Corporation (NNPC). It is charged
with the development of an efficient gas
industry to fully serve Nigerias energy and
industrial feedstock needs through an
integrated gas pipeline network and also
export gas and its derivatives abroad,
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14

particularly to the West African sub-region.
Petrochemical Company at Warri.
Today NGC is a profit-oriented gas

transmission company committed to effectively
and efficiently providing its customers
requirements using skilled manpower, current
technology and the promotion of a gas utilisation
culture.
All these facilities, comprise 1,100 kilometres

of pipelines ranging from 4" to 36" in diameter
with an overall design capacity of more than 2
billion standard cubic feet of gas per day (bscf/d),
14 compressor stations and 13 metering
stations. The facilities represent a current asset
base of more than 12 billion naira for the
NGC.
The Companys vision is to be a fully

commercialised gas company, committed to
excellence and continuous improvement in
satisfying its customers whilst remaining
socially responsible.
The NGC currently operates eight (8) supply
systems namely: the Sapele supply system
which supplies gas to NEPA power station at
Ogorode, Sapele; the Aladja system which
supplies gas to the Delta Steel Company
Aladja; the Oben-Ajaokuta pipeline which
supplies the Ajaokuta Steel Company and will
form the back-bone of a future Northern
Pipeline System and the Imo River-Aba
system for gas supply to the International
Glass Industry Limited PZ, Aba Textile Mills
and Aba Equitable Industry.
The other system are Obigbo North-Afam
system which caters for NEPA power station
at Afam; the Alakiri to Onne Gas pipeline
system for supply of gas to the National
Fertiliser Company (NAFCON) for fertiliser
production; the Alakiri-Afam-lkot Abasi
system for gas supply to the Aluminium
Smelting Plant (ALSCON) and the EscravosLagos pipeline (ELP), which supplies gas to
NEPAs Egbin Power Plant near Lagos.
Subsequent spur lines from the ELP supply the
West African Portland Cement (WAPCO)
Plants at Shagamu and Ewekoro, PZ Industries
at Ikorodu, City Gate in Lagos, NEPA Delta
IV at Ughelli; and Warri Refining and
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The NGC is currently engaged in several

projects, which are geared towards increasing
the utilisation of Nigerias abundant natural
gas resources and creating investment
opportunities for entrepreneurs.
West African Gas Pipeline

The feasibility study for this project which is
designed to export gas by pipeline to the West
African Countries of Benin, Ghana and Togo
has been completed and heads of agreement
signed. Sponsored by NNPC (through NGC),
Ghana National Petroleum Corporation,
Chevron, Shell, Societe Beninoise du Gaz and
Societe Togolais du Gaz, the project is still
open to investors. The long-term plan is to
extend this pipeline to Dakar (Senegal) to
make Nigerian gas available to the whole
region.
Trans Nigeria Pipeline

NGC plans to integrate all gas transmission
systems in the country. It is also planned that
extensions of the systems would be made to
the far northern states of Bornu in the east and
Sokoto in the west as well as to the central
industrial state of Kano. The resulting highly
interconnected system would provide full
flexibility and better management of
adjustment of supply and demand throughout
the country. In the domestic market investment
options exist in gas transmission and
distribution joint ventures with NGC for
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specific projects such as gas-based

Independent Power Plants (IPP) and such
energy intensive sectors as cement, glass and
paper industries.
Third parties could also purchase gas from NGC
at city gates and distribute to industrial and other
users. The company has already signed
agreements with Unipetrol Plc and Shell Nigeria
Gas in this regard for gas distribution to two
major industrial areas in Lagos and Ogun States
of Nigeria.
Compressed Natural Gas as Automotive

Fuel
In transportation, compressed natural gas as an
alternative vehicle fuel has a great future in
Nigeria especially in view of the need to
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export more crude oil or refined products for

additional foreign revenue. Moreover, the
environmental friendliness of natural gas
positions it to compete favourably with refined
products as domestic and commercial fuel.
The outlook of CNG development in the
country is therefore very bright and
investments can be made in the conversion
process, manufacture of conversion kits and
provision of refuelling stations. So far NGC is
pioneering the course albeit with a pilot
scheme, by converting its fleet of vehicles and
that of Shell Petroleum Development
Company to run on CNG. With two miniCNG refilling stations at its headquarters in
Ekpan and its Lagos Operating Department,
NGC also plans to establish bigger
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commercial refilling plants at strategic points in the
country.
Power generation and Distribution

In the power generation and distribution
industry a favourable climate has been created for
the construction of Independent Power Plants
(IPP) with the recent law, that removes the
monopoly of the National Electric Power
Authority.
Several world-renowned power companies have
already made proposals for gas-based power
plants. These include Mobil Producing Nigeria
Unlimited, Asea Brown Boveri Limited and M.S.
Radiotronica S.A. of Spain.
Fertiliser and Petrochemical Plants

Nigeria has a population of 120 million and an
arable land space of 71.2 million hectares, but
has only one nitrogenous and one
supersulphate fertiliser plant. These do not
satisfy the needs of the country. The
establishment of gas-based fertiliser plants is
very fertile area of investment within the
country. In addition, the petrochemical
industry offers a lot of room for expansion due
to the large market available within and
outside the country. This area of petrochemical
plant development holds tremendous
opportunities for investors and an opportunity
for NGC to supply all required gas feedstock
to them.
Natural Gas Liquids Extraction Plants

Apart from the liquefied natural gas business
and sale of Nigerias gas across its borders to
its neighbours, other areas of the gas business
that easily lend themselves for international
investments include Methanol and MTBE
export, Natural Gas Liquids extraction plants
(several of these have been built by operating
oil companies in Nigeria). Chevron and Sasol
of South Africa are currently evaluating a
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20,000b/d proposed Gas-To-Liquid Plant in

Nigeria. Mobil too is engaged in a Natural Gas
Liquids Recovery project that is extracting
propane, butane and pentane, at Bonny in Rivers
State of Nigeria.
Domestic Use of Natural Gas

The NGC is committed not only to the growth
and orderly development of the gas industry in
Nigeria but most importantly to ensure that natural
gas is a major contributor to the energy mix of
Nigeria. In order to demonstrate the technical and
economic viability of natural gas utilisation for
domestic purposes NGC has completed a project
to supply NNPC and Shell Petroleum
Development Companys estates in Warri with
natural gas for cooking, air conditioning and
power generation.
The use of gas in residential and commercial
applications holds tremendous opportunities
for investors.
Conclusion
It is expected that the new democratic political
environment in Nigeria will engender
increased economic activity and growth.
Natural gas is expected to be the major fuel for
powering this activity and growth.
Government recognises this fact and has put in
place several fiscal incentives to assist
investors in the Nigerian gas industry. This is
in addition to a comprehensive natural gas
policy to be released shortly.
For further information, please contact:

The Managing Director
Nigerian Gas Company Limited
Odin Road, Ekpan, P.M.B. 1288
Warri. Delta State, Nigeria
Tel: 234-53-252224 Fax: 234-53-252233
or
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17

The Manager
Commercial Department
Odin Road, Ekpan, P.M.B. 1288
Warri, Delta State, Nigeria
Tel: 234-53-252328
or
The Head
Lagos Commercial Office
90, Opebi Road, lkeja, Lagos.
Tel: 234-1-4970786, 4970724
or
NGC natural gas metering station
The Head
Abuja Commercial Office
Yaounde Street Wuse Zone 6
P.M.B. 389 Abuja F.C.T.
Tel: 234-9-5239215
GAS UTILISATION
Nigeria is endowed with abundant natural gas
resource, which in energy terms, is in excess
of the Nations proven crude oil reserve and
even this is the gas discovered whilst
searching for oil, as no conscious effort has
been made so far to search for gas. The current
reserve estimate is over120 trillion cubic feet
with about 50/50 distribution between
Associated Gas (AG) and Non Associated Gas
(NAG). Only a small fraction of this quantity
is currently being utilised. A large fraction
(about 63%) of the AG produced during the
production of crude oil is currently being
flared. Though this is an improvement over
what it used to be two to three years ago when
it was about 80 to 70%.
In order to diversify its revenue base and reduce

the huge wastage of valuable resource and
degradation of our environment as a result of
flaring, the Nigerian Government, through
(NNPC), is vigorously pursing a number of
natural gas utilisation projects with its joint
venture partners, whereby associated gas which
hitherto was being flared, would be harnessed to
achieve these objectives.
Of great concern to the Government is the
issue of environmental degradation that a deadline
of year 2010 has been set as the year when all
flares must be extinguished. In line with this target
therefore, all our joint venture partners have also
set their own targets in order to meet this dead
line. These targets range from year 2005 to 2010.
This means that the gas sector in Nigeria is going
to be a beehive of activities henceforth, and a lot
of room for investment in this area exists. For
example, LNG (liquefied natural gas), IPP(
Independent Power Plant), GTL(Gas to Liquid
conversion), NGL (natural gas liquids),
Methanol, gas supply to local industries, etc.
This is indeed an industry with great potential
and future for the 21st century. While a
number of gas utilisation projects have already
been completed, commissioned and in
operation, several are in various stages of
execution. In addition, local industries have
NLNG storage tanks
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started converting from the use of fuel oil to
gas due to increase in awareness.
DOMESTIC GAS MARKET

On the domestic front, NNPC currently
supplies gas for power generation, as source of
fuel or as feed stock to cement plants, fertiliser
plant, glass manufacturing industries, food &
beverages manufacturing industries, etc. More
local industries are becoming aware of the
advantages of using gas and the demand is
increasing, so a large market exists for
investors in this area.
EXPORT ORIENTED GAS UTILISATION

PROJECTS
For the international market NNPC and its joint
venture partners are currently embarking on
several gas utilisation projects, which include the
following:
Escravos Gas Project

This project was executed by NNPC/Chevron
JV. The plant is located in the South Western part
of the country and it produces mainly LPG for
export from its first phase. Detailed engineering
for the second phase has reached advanced
stage, while a third phase is being proposed.
Oso NGL Project

The NNPC/MOBIL JV recently commissioned
an NGL plant located at its OSO field in the
South Eastern part of Nigeria. It started
production for export during the third quarter of
1998.
LNG Projects
Nigeria through NLNG (Nigeria Liquefied
Natural Gas) Ltd., is currently embarking on
the construction of its first LNG plant in
collaboration with three partners, namely, ELF,
AGIP and SHELL. The LNG plant site is
located at Finnima in the Eastern region of
Nigeria and, these three companies, in joint
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venture with NNPC, will also supply the

natural gas for feed stock /fuel to the plant
from their Obite, Obiafu and Soku fields
respectively. Markets have been secured for
the product in Europe while vessels have been
acquired for the shipment of the cargo and plant
construction has almost been completed.
Shipment of LNG cargo to its buyers has
already commenced.
Also, construction works for installation of the
facilities for the supply of natural gas to
NLNG by the JV companies are at various
stages of execution and a total volume of
about one billion standard cubic feet per day
of natural gas will be supplied to the LNG
plant. It is expected that flaring will be
substantially reduced by the time these
projects come on stream by third quarter of
this year, in addition to the expected huge
revenue.
Moreover, NLNG has concluded plans to
install a third train which will enable the plant
to process increased volumes of associated gas
that is rich in propanes and butanes to produce
up to 1.2 million tons per annum of LPGs as
well as additional 2.9 million tons of LNG. In
line with this plan therefore, the NNPC JV
companies have also started planning to
upgrade their existing facilities in order to
meet the additional capacity requirements.
OTHERS
Ekpe Gas Compression Projects
The NNPC/MOBIL JV executed this project
in order to gather the gas that was being flared
in this field for enhancement of oil production
by gas lifting and gas injection.
Oso 2Y2 Project

This project is also being executed by the
NNPC/MOBIL JV. The objective is to provide
additional gas make-up for the Oso NGL as well
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as maintain condensate production at the
expected plateau.
Belema Gas Injection project

This project is being executed by the NNPC/
SHELL joint venture and it is aimed at
reducing flares in five flow stations by reinjecting some of the gas, some for gas lifting,
some for use as fuel by local industries and the
excess for backing out NAG that is currently used
to meet various existing contractual obligations.
The contracts for the execution of the EPC and
gathering pipelines are still in the early stages of
execution. About 80mmscf/d of gas is expected
to be utilised.
Obigbo Node Gas Project

The objective of this project is to gather about
113mmscf/d of AG from about six flow
stations in the NNPC/Shell Eastern Nigeria
fields, for supply (about 92mmscf/d) to
ALSCON (Aluminium smelting coy. Of
Nigeria) as feed gas and for gas lifting. The
contracts for the execution of the EPC and
gathering pipelines awarded recently and plant
is expected to come on stream in 2001.
Odidi AGG Project

This project is also being executed by the
NNPC/Shell JV in the South Western part of
Nigeria. The objective of the project is to
gather gas and inject into the ELP (Escravos to
Lagos Pipeline), which will eventually form
part of the West African Gas Pipeline that will
supply gas to some West African Countries.
Cawthorne Channel Gas Injection Project

The objective of this project is to gather the
gas that is currently being flared in this field
for re-injection and for supply to a third party
for LPG extraction. The conceptual design is
still currently on going.
The West African Gas Pipeline Project

The objective of this project is to supply gas to
some ECOWAS countries, pursuant to
Nigerias commitment to Article 48 of the
ECOWAS Treaty, which encourages member
Nations to co-operate, consult and co-ordinate
their policies regarding energy and mineral
resources.
Following the recommendation of one of the
studies commissioned by member states on
improving co-operation on energy, the
governments of Nigeria, Ghana, Benin and
Togo, through their ministries and departments
responsible for energy matters, signed Heads
Of Agreements (HOA) in 1995, to provide
framework for the construction of a West
African Gas Pipeline (WAGP), to transport gas
from Nigeria to Ghana, Benin and Togo.
Among the key stipulations of the HOA are
the following:
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The sale, transmission and purchase of natural

gas must be performed on a commercial basis
Third party access to WAGP must be granted

on a non- discriminatory basis
The pipeline company and the sellers of

natural gas must be guaranteed settlement
in hard currency.
The countries have also set up a Ministerial

Steering Committee (MSC), and Project
Implementation Committee to monitor the
development of the project. A commercial
group has also been set up comprising of
Nigerian Gas Company (NGC), Ghana
National Petroleum (GNPC), SOBEGAZ
(Benin) and SOTOGAZ (Togo); and two gas
producers Chevron Nigeria Ltd (CNL) and
Shell Petroleum Development Company of
Nigeria.(SPDC).
The commercial group retained a German
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company in 1998, to conduct a feasibility
study and the final report was submitted in
March 1999. The report showed that the
WAGP was commercially viable and
technically feasible. Negotiations are currently
on with a number of prospective buyers in the
sub region.
FUTURE FLARE-OUT PROGRAMS

In order to achieve our flare out target of 2010,
NNPC, in conjunction with our JV partners
have drawn up programs of activities and
strategies for the utilisation of all the gas that is
currently being flared and future gas production
resulting from growth in oil production. These
programs include:
NNPC/Elf JV has set its flare out target year at
2006, and some of their planned projects
include Amenam/Kpono, Ofon (phase 2) and
4-bar integrated oil and gas projects.
NNPC/Shell JV flare out target year is 2008.
Some of their planned projects include Akri/
Oguta, S. Forcados, EA, Bonga, Ubie, Bomu
etc, gas gathering and utilisation projects.
NNPC/Chevron JVs flare out target year is
2006 and their planned projects are EGP phase
2 and 3.
NEW FISCAL INCENTIVES FOR NATURAL

GAS UTILISATION
There is increasing awareness that gas
resources could be exploited, utilised and
monetised to broaden the national revenue
base, create employment and drastically
reduce flaring and its associated
environmental impact. Against this
background is the yet-to-be-developed local
market and low returns greatly impacted by
low purchasing power (GDP) in-country, and
the huge capital investment required to
commercialise gas for purposes of power
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plants and industrial uses, to mention a few.

As a result, Government has approved various
incentives most of which have been designed
around specific project needs, that is to achieve
project economics as follows:
a) Finance (Miscellaneous Taxation
Provisions) Decree No. 18, 1998
(Amendment to Petroleum Profits Tax
Act):
Investment required to separate crude oil and
gas from the reservoir into usable products
shall be considered part of the oil
development.
Capital investments on facilities equipment
to deliver associated gas in usable form at
utilisation or designated custody transfer
points shall be treated, for tax purposes, as
part of the capital investment for oil
development.
Capital allowances, operating expenses
and basis of tax assessment shall be
subject to the provision of this Act and the
tax incentives under the revised MOU.
Downstream Operations:
Incentives for encouragement of exploitation
and utilisation of associated gas for
commercial purposes:
Companies engaged in gas utilisation are
subject to the provisions of the Companies
Income Tax Act (CITA).
An initial tax free period of three years,
renewable for additional two years although
discretionary and subject to satisfactory
performance of the company.
Accelerated Capital Allowance after the tax
free period in the form of: 90% with 10%
retention in the books, for investment in plant
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21

and machinery.
15% investment Capital Allowance which
shall not reduce the value of the asset.
Tax free dividends during the tax free period
where:
The investment for the business was in foreign
currency, or the introduction of plant and
machinery during the period was not less than
30% of the equity share of the company.
Plant, machinery and equipment purchased for
utilisation of gas in downstream petroleum
operations are exempted from VAT payments and
Import Duty.
b) Finance (Miscellaneous Taxation Provisions)
Decree No. 19, 1998 (Amendment to
Petroleum Profits Tax Act)
Interest on loans for any gas project is tax
deductible if permission has been obtained
from the Federal ministry of Finance before
taking the loan.
Definition of gas utilisation, the marketing and
distribution of natural gas for commercial
purposes and includes power plant, LNG, gas to
liquid plant, fertiliser plant, gas transmission and
distribution pipelines.
The Future
NNPC realises the enormity of the task that
confronts it as the beacon of the petroleum
industry and the Nigerian economy. Management
will continue to stress on dynamic projects with
relevance to Nigerias long term industrial
development.
NATIONAL ENGINEERING AND TECHNICAL

COMPANY LIMITED (NETCO)
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NETCO is Nigerias 1 national engineering

company and is now a wholly owned
subsidiary of the Nigerian National Petroleum
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Corporation (NNPC). NETCO was established

in 1989 to provide an effective and reliable
engineering base for the NNPC Group and the
entire oil and gas industry. Its services however,
extend to the rest of the national economy and
beyond.
The mission of NETCO is to be an indigenous,
profitable engineering company, providing
innovative and effective engineering,
procurement and project management service
with technical excellence and highest business
ethics. NETCO has a vision of being the
preferred engineering company
NETCO will consider going into alliance or
partnership with international engineering
firms to execute EPC projects in the areas of
gas processing, refinery design, pipelines and
offshore engineering among others. This will
greatly assist the firms in fulfilling the
condition of involving local engineering
companies in all engineering projects in the oil
and gas field.
NETCOs Services
NETCO went into commercial operation in
1989 and has since been providing effective
and reliable engineering services which,
include but not limited to:
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Feasibility Studies
Conceptual Engineering Design
Basic and Detailed Engineering
Project Planning and Scheduling
Cost Estimation and Cost Engineering
Computerised Project Management
Procurement of Engineering Equipment
and Material
Construction Management and Supervision
Commissioning and Start-up
Management of the Maintenance of
Operating Plants
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NETCO ensures the health, safety and welfare of

its employees at work and protects its clients,
including the general public against all health and
safety risks arising from the companys activities.
Major Projects Executed
Scaled model of a project designed by NETCO
NETCO is well equipped with the latest

technology, engineering design, procurement,
project management, administrative, finance and
accounting software/applications packages.
NETCO provides some of these services in
alliance with reputable international Engineering
firms on project-by-project basis and when the
need arises.
NETCOs Approach
NETCO started with BECHTEL of USA as its
technical partner, which later sold its equity
share to NNPC in December 1996. NETCO
has since redefined its customers values
delivery of quality product within budget and
schedule using the latest technology.
NETCO is committed to continuously
improving the way we do our business, given
the dynamic nature of our trade; in our prices,
customer relations and business orientation.
NETCO has executed several engineering

projects in Nigeria. One of the most prominent is
the detailed engineering design of the onshore
portion of the NNPC/Chevron Nigeria Limited
Escravos Gas Development Project Phase 1. This
project, involving about 143,000 man-hours of
engineering work, is still the largest and most
technologically complex engineering effort ever
undertaken locally within Nigeria by Nigerians.
Other prominent projects executed by NETCO
are:
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Management of the Turn Around

Maintenance (TAM) of Nigerias four
refineries with a total capacity of
445,000bpd
Conceptual design of Cawthorne Channel

Gas injection/supply project
Front-end engineering design of an FPSO

for gas development in Nigeria
Detailed engineering design of Condensate

Stabilisation Unit for 3rd Train of Nigerian
Liquefied Natural Gas (NLNG) expansion
project at Bonny Island
Detailed design of the refurbishment of

four offshore platforms
Detailed design of a crude Oil Delivery

Line including Pig Launcher and Manifold
tie-in
NETCOs Customers
A project designed by NETCO being supervised

by NETCO during construction
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NNPC and its subsidiaries
The Shell Petroleum Development Company

of Nigeria Limited
Chevron Nigeria Limited
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23

l
Texaco Overseas Petroleum Company of

Nigeria Limited
Mobil Producing Nigeria Unlimited
The Future
NETCO is committed to personal attention, clear
contract conditions, constant technological
advancement and continuous improvement. Our
customers are our most important asset and their
needs form the core of our future development.
NETCO is open to possible alliances on projectby-project basis with reputable international
engineering companies.
Address/Location
Stallion House (11th & 12th Floors)
2, AjoseAdeogun Street
P.O. Box 74173, Victoria Island Annex
Lagos, Nigeria
Telephone: 234-1-2611232, 234-1-2647301
Telex 22031 NETCO NG
Fax 234-1-2611230
E-mail: netco@linkserve.com. ng
alibe@netco.com.ng
Web-site: http://www.netco.com.ng/
OTHER SUBSIDIARIES OF NNPC

These are mainly in the downstream and include
the refineries and petrochemical industries and the
distribution and maintenance network companies.
THE DEPARTMENT OF PETROLEUM

RESOURCES (DPR)
DPR has the responsibility of achieving the
overall objective of Government policy for the
industry. These objectives include:
- Ensuring compliance with all Petroleum Laws
and Regulations
- Encouraging the development of the nations
petroleum resources in the public interest.
- Protecting both foreign and local
investments (private or public)
- Ensuring harmonious relationship between
government, industry and local communities.
- Promoting intra-industry peace
- Encouraging interaction between the Industry
and the general public.
The Department has three technical divisions and
a number of service and other units; each headed
by a Deputy Director.
INDIGENOUS PARTICIPATION
In 1990, the Federal Government had among
others two principal objectives:
i.
to increase the nations oil reserves from

16 to 25 billion barrels by 1995 and, to 40
billion barrels by year 2000
Kaduna Refinery and Petroleum Company

Limited (KRPC)
ii. increase private (indigenous) participation

in the upstream operations.
Warri Refinery and Petrochemicals Company

Limited (WRPC)
Port Harcourt Refinery and Petrochemicals

Company Limited (PHRC)
Eleme Petrochemicals Company Limited

(EPCL)
Pipeline and Products Marketing Company

(PPMC)
HYSON (Nigeria) Limited, in affiliation with

Calson (Bermuda) Ltd.
This implied stepping up E & P activities

through the creation and allocation of more
blocks in the frontier basins. Thus, blocks
were carved out of the Dahomey (Benin)
Basin, the Benue Trough sub-basins and the
deep offshore Niger Delta Basin. Through
open bidding and discretionary allocation of
acreage, 65 blocks were assigned to 38 private
companies.
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24
DEPARTMENT OF PETROLEUM RESOURCES

ORGANISATION CHART
DIRECTOR
LEGALADVISER
DEPUTY DIRECTOR
RESOURCE
MANAGEMENT
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DEPUTY DIRECTOR
INSPECTION
DEPUTY DIRECTOR
TECHNICAL
CONTROL
ASSISTANT DIRECTOR
RESOURCE
MANAGEMENT
UPSTREAM
STANDARDS
DEPUTY DIRECTOR
ADMINISTRATION
AND PERSONNEL
ASSISTANT
DIRECTOR
DEVELOPMENT
DOWNSTREAM
DATA MANAGEMENT
AND
COMMUNICATION
DEPUTY DIRECTOR
FINANCE AND
ACCOUNTS
ASSISTANT
DIRECTOR
ASSESSMENT
FIELD OFFICES
COORDINATOR
LABORATORIES
ENVIRONMENT
AND SAFETY
DEPUTY DIRECTOR
PLANNING AND
STATISTICS
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In order to avoid the failure of indigenous
participation in E & P programme, the federal
government applied the following criteria:
i.
Ensured that the initial concession awards

were to those Nigerian companies backed by
individuals with proven track records in other
areas of endeavour while bearing in mind the
higher risk-reward profile of the oil industry.
ii. Established a minimum US$1m signature

bonus as the asking price of entry into the
business before any other costs are considered.
iii. Such companies are to provide the entire fund
required to operate the concessions and at
the same time enjoy any reward that
emanated from the projects sole risk
venture subject to payment of the Petroleum
Profit Tax (PPT) and royalties to the
government.
iv. Such companies are allowed to have joint
venture agreements with not more than 40%
of their respective interests to foreign
technical and financial partners. Such foreign
partners should not have been operating in the
country before 1991.
v. A minimum work programme typically 5001,000km of seismic and two-three (2-3) wells.
ACHIEVEMENTS OF INDIGENOUS
PARTICIPATION
Two companies, Consolidated Oil and Summit
Oil, proceeded without assigning any interest to
foreign technical partners. For the others, it was
evident that foreign joint venture partners was
necessary.
By 1988, eight companies had commenced
exploratory drilling with six having discovered
hydrocarbon in commercial quantities and many
others are in the preliminary exploration stages
having acquired seismic and chosen locations.
About 35 wells have been drilled and an
estimated US$900m of new investment attracted
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25
to the industry. Four companies - Consolidated

Oil, Allied Energy Resources Ltd, Amni
International and Express Petroleum - have begun
production increasing the number of private
company participation to five (Dubri Oil was an
early starter).
Some private companies have utilised the latest
technological applications resulting in quite
significant success. For example, at least two
companies have employed horizontal well
techniques. Two companies have successfully
drilled deep-water exploration blocks with
more at the planning stages.
With the current field trend, more private
companies will soon be on production phase
and the aggregate output of indigenous
companies is expected to rise from
35,000BOPD to some 100,000BOPD.
NEW DEVELOPMENTS
The Federal Government in an effort to build
confidence amongst investors in the petroleum
sector has/is implemented/implementing the
following:
l
Executed new crude oil sales contracts

after an open international bidding
exercise.
Instituted a policy for regular (half yearly

and yearly) acreage bidding round.
Awarded franchises to two indigenous

companies to distribute natural gas to
industries in Lagos and Aba.
Privatisation of the Nigerian Gas Company

(NGC) and the Nigerian Petroleum
Development Company (NPDC)
Deregulation of the downstream sector and

government interests in three major petroleum
products marketing companies privatised.
Privatisation of three petrochemical plants.
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26
COMMUNITY DEVELOPMENT
Peace has returned to the oil producing
communities of the Niger Delta following a
protracted series of crises that prevailed for
most of 1999.
This is as a result of the various efforts by the
Federal Government and the oil producing
companies. Such efforts include the setting up
of the Niger Delta Development Commission
(NDDC) and higher proportion of oil and gas
revenues to producing states. Oil producing
companies are in addition to undertaking
community development/assistance projects in
their areas of operations, are to make a direct
token contribution to the NDDC Fund.
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Fish farming is part of efforts by oil and gas companies

to improve the livelihood of host communities
and enhance their income
CONTENTS
CHAPTER 4: The Major Oil Companies
THE SHELL PETROLEUM

DEVELOPMENT COMPANY OF
NIGERIA LIMITED
The Shell Petroleum Development Company
of Nigeria Limited incorporated in 1937 is the
pioneer hydrocarbon exploration and
production company in the country. With the
current production capacity of over 900,000
barrels per day of crude oil and more than 700
million scf/d of gas from its oil fields, it
remains the largest producer of oil and gas in
Nigeria. The company produces almost half of
the countrys oil from more than 90 oil fields,
and supplies about 95 per cent of the countrys
commercial gas. Its Oil Mining Lease (OML)
area of 31,000sq.km contains more than half
of the countrys oil and gas reserves.
Incorporated under the name, The Shell
DArcy Exploration Company Limited, the
company changed its name to Shell-BP
Petroleum Company of Nigeria Limited in
1956; the same year it discovered the first
commercial oil field in the country at Oloibiri,
Rivers State. On August 1, 1979, the
companys name was changed to the Shell
Petroleum Development Company of Nigeria
Limited (SPDC). SPDCs shareholding
structure has also changed significantly over
the years. In April 1973, the Federal
Government acquired 35% participation in the
Companys leases. This was increased to 55%
in 1974, by Government, which nominated the
then Nigerian National Oil Corporation
(NNOC) to represent it in the Joint Venture. In
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line with the Nigerian Enterprises Promotion

Decree, the Government increased its
participation to 60% on July 1 1979. It also
acquired BPs interest in the then NNPC/
ShellBP Joint Venture on August 1, 1979;
thus bringing its participation to 80%. This
brought about a change of name of the
company operating the Joint Venture to The
Shell Petroleum Development Company of
Nigeria Limited (SPDC) with Governments
approval on December 13, 1979. On August
22, 1984, NNPC and Shell signed an
agreement consolidating their Joint Venture
arrangements from 1973. On Friday, June 30,
1989, the Federal Government of Nigeria
rationalised its interest in the NNPC/Shell
Joint Venture (JV) from 80% to 60%, while
Shells participation increased to 30%. Two
other oil companies, Elf Petroleum Nigeria
Limited and Nigerian Agip Oil Company,
acquired 5% respectively. Elf Petroleum
acquired another 5% from NNPCs equity
share in 1993. Currently, SPDC operates a
joint venture in which the government holds a
majority share of 55% through the Nigerian
National Petroleum Corporation (NNPC),
Shell 30%, Elf 10% and Agip 5%. The terms
of these joint ventures are governed by Joint
Operating Agreements. Operations are funded
by monthly cash calls to the partners who
pay in proportion to their shareholding. The
Shell component of the shares of The Shell
Petroleum Development Company of Nigeria
Limited are owned by N.V. Koningklijke
Nederlandsche Petroleum Maatschappij (60%)
and The Shell Transport and Trading
Company PLC (40%).
From a modest production of 6,000 barrels of
crude oil per day in 1958, when the first cargo
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of oil was exported, NNPC/SPDCs daily

production has shot up to the present day
levels of the OPEC production quota of
950,000 barrels per day. Crude oil export is
via the two terminals: Bonny in Rivers State
and Forcados in Delta State.
Although the companys wide spread of
activities results in varied operational hazards,
spirited efforts are made to ensure that the
environment is protected and that people,
including all categories of workers, are safe.
The company employs over 4,000 people,
95% of them Nigerians. In addition, it has
8,000 contract staff, again mostly Nigerian, and
it is estimated that another 20,000 people are
employed by contractors working for it.
The Nigerian Liquified Natural Gas (NLNG) Train 2 Plant
The NNPC/SPDC Joint Ventures belief in the

theme Nigeria: Great Expectations,
Abundant Opportunities is amply
demonstrated by its commitment to invest
about US$8.5 billion in the next five years, and
remains the largest single investor in the
Nigerian economy.
GAS SUPPLY TO NLNG TRAINS 1 & 2

The Joint Venture has developed considerable
natural gas production and a number of
projects to harness or conserve its flared
associated gas. The largest is the Nigeria
Liquefied Natural Gas (NLNG) project in which
it is a major shareholder. In addition, SPDC
supplies half the gas for this project - 450mmscf/
d. Of this volume, 200mmscf/d is associated gas.
It is hoped that the contribution to the NLNG
from associated gas will rise in the future.
The Joint Venture has a Gas Sales Agreement
(GSA) to supply over 50% of the total feed
gas to the Nigeria LNG Trains 1 & 2 with first
deliveries in October 1999. The initial supply
of gas from the Joint Venture will be
primarily NAG (90%) plus the Associated Gas
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(AG) from the Soku oil rim development. By mid

2000, AG from the nearby Nembe Creek,
Ekulama, Odeama and Santa Barbara oil fields
will be gathered and compressed at the Soku
gas plant to back out some 200mmscf/d of
NAG. In total, 16 wells (7 horizontal oil and 9
deviated gas) have been drilled in the Soku
Field. The gas wells were drilled from two
clusters to minimise land take and consequent
environmental impact. A gas plant with a
nominal capacity of 502 mmscf/d (577mmscf/
d peak) has been built at Soku. The associated
condensate will be evacuated via the SPDC
crude oil system to the Bonny Terminal. The
existing facilities at the Soku flowstation is
already constrained for gas and has been
extended to cater for 35mmscf/d from the oil
rim development and 12-15mmscf/d of HP gas
piped to the Gas Plant. The project is being
executed under an EPIC contract, which was
awarded in 1996.
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GAS SUPPLY TO THE NLNG THIRD TRAIN
The decision by NLNG to expand its LNG
project by an additional train gives a further boost
to the utilisation of associated gas. The new train
will be similar in capacity and design to the first
two trains and will increase NLNGs current
processing capacity by 50% - an additional
3.7billion cubic metres per annum. The total
supply of additional gas feedstock will be
provided by the upstream Oil and Gas Joint
Ventures operated by The Shell Petroleum
Development Company of Nigeria Limited and
Nigerian Agip Oil Company Limited. The
Nigerian National Petroleum Corporation is the
major partner in both these Joint Ventures. Other
partners are Elf Petroleum Nigeria Limited and
Phillips Oil Company of Nigeria. The expansion
project provides the basis for the
commercialisation of the extensive gas reserves in
Nigeria and also the mechanism for an enormous
reduction in the level of gas flaring, realising a
major environmental benefit. It also provides the
opportunity for the development of new oil
reserves, both offshore and onshore, with
immediate utilisation of the associated gas.
With the success so far achieved, the fourth
and fifth LNG trains are already being
planned.
OTHER GAS PROJECTS

In addition to the gas supply to the NLNG
project, 100mmscf/d of associated gas will be
collected to fuel a new aluminium smelting
plant being built at Ikot Abasi in Akwa Ibom
State. Four other projects are being planned
to collect associated gas for the Nigerian Gas
Companys Escravos - Lagos Pipeline System
(ELPS), supplying power stations and
industry in the greater Lagos area and Delta
State. The projects are at Odidi, South
Forcados, Escravos and the Greater Ughelli area
in Delta State.
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ODIDI ASSOCIATED GAS GATHERING

PROJECT
This project consists of the installation of
booster compression stations and low pressure
gathering lines to gather AG from Odidi,
Egwa and Batan/Ajuju fields, in phases, to a
central processing facility (CPF) at Odidi I, for
delivery into the Escravos-Lagos Pipeline
System (ELPS). Phase 1 with a capacity of
80mmscf/d comprising 2 compression
modules, power generation/utility module, and
gas treatment for water and hydrocarbon dewpointing, will come on stream in 2001. The
contract for the main equipment modules has
been awarded. Subsequent phases of the
project, which will come on stream in 2005
and 2012, will increase the AG gathering
capacity to 160mmscf/d.
TECHNOLOGY DEVELOPMENT AND

APPLICATION
As the operator of the Joint Venture, Shell
invests significantly in the development and
application of new technology. Examples
abound of the benefits to the Joint Venture.
One such evolving technology involves gas
dehydration using Twister technology.
Previously, separating water and condensate
from natural gas was complex and costly,
requiring large facilities with high capital and
operating expenses. Shells recently developed
Twister technology offers the potential to
lower capital and operating expenditures by 10
to 25%. Twister allows for smaller and lighter
facilities than other gas dew-pointing
alternatives. With no moving parts, the need
for glycol/methanol systems is eliminated.
Twisters biggest capital expenditure savings
are in green field developments where facilitywide optimisation can be achieved.
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SHELL NIGERIA EXPLORATION AND

PRODUCTION COMPANY LIMITED
(SNEPCO)
1993 saw the entry of Shell into new frontiers
of exploration in Nigeria and the birth of a
new Shell Company. Shell Nigeria Exploration
and Production Company Limited (SNEPCO)
was formed to operate deepwater blocks
(OPLs 212 and 219) and onshore areas in the
Gongola basin (OPLs 803, 806 and 809).
A Joint Operating Agreement between
SNEPCO (55%), Esso (20%), Elf (12.5%) and
Agip (12.5%) was signed in November 1996
(effective August 1993) to assume the role and
responsibilities of the Contractor with
SNEPCO as the Operator.
Extensive 3D seismic surveys were completed
in the offshore blocks between September
1993 and April 1994 which formed the basis
for the drilling of the first exploration wells of
Bonga-1 and Ngolo-1 in 1995 and 1996
respectively. Further exploration and appraisal
drilling was conducted in 1997 and 1998. In
the onshore licences, 2D seismic surveys were
acquired, processed and interpreted, leading to
the spudding of the first ever exploration well
in the Gongola basin of the Benue trough in
mid-April 1999. The well showed minor
presence of gas, but not in commercial
quantities and was subsequently abandoned.
SNEPCO relinquished the blocks in 1999.
SNEPCO currently operates two licences in
the Nigerian waters at depths between 200 and
1,400 metres. In addition to its operated
licences, SNEPCO also has 43.75% interests
in OPL 209 (operated by Esso) and 49.81%
interests in OPLs 211 & 316 (operated by
Agip). This makes Shell one of the major
players in this frontier exploration area.
Implementation of the Bonga field
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development is well underway having taken

Final Investment Decision (FID) in the fourth
quarter of 1999 following very extensive
optimisation. The on-stream date for first oil is
scheduled for the first quarter of 2003.
SNEPCO is committed to the most efficient
exploration and production of these highly
important national hydrocarbon resources for
the benefit of Nigeria, NNPC and Coventurers. With about 100 professional staff,
and growing, three quarters of who are
Nigerians, and backed by the technical
expertise of the Shell Group both worldwide
and in Nigeria, SNEPCO looks forward with
confidence to achieving these objectives for all
stakeholders.
SHELL NIGERIA GAS LIMITED (SNG)

Shells commitment to the growth of local
industrial gas consumption was demonstrated
with the incorporation of Shell Nigeria Gas
Limited in March 1998. This wholly owned
Shell downstream Gas Company has kicked
off with an investment of US$35million for
the extension of gas distribution lines to
industries in Aba/Owerrinta in the South-East
and Agbara/Otta in the South-West. First gas
will be delivered to SNG customers by end
2000. SNG hopes that with the identification
of more industrial consumers the drive to get
gas to the consumer will be continued to
Abuja, Onitsha, Calabar and other parts of
Nigeria in the short to medium term.
THE NIGER DELTA OPERATING AREAS

The story of the Joint Venture is not all oil and
gas production and national economic growth;
it has over the years impacted very positively
on the socio-economic lives of its host
communities. Since 1998, NNPC/SPDCs
approach to community development has been
geared towards achieving long term goals in
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partnership with the host communities. The
emphasis has been on community participation
and direction in order to increase their
capacity, confidence and self-reliance so that
they are able to take charge of their future in a
sustainable manner. This has been done
through numerous community development
projects. Today, in addition to agriculture, the
company assists communities with the
provision of social infrastructure, construction
and upgrade of community health schemes,
educational facilities, scholarships, youth
training and others. The JVs involvement in
community development dates back to the
1960s and traverses agriculture, education,
health and vocational training. The company
has built hospitals, health centres and donated
drugs to health institutions in the Niger Delta
where it operates.
SOCIAL DEVELOPMENT
Education
The first and most enduring educational
assistance programme has been the
scholarship award scheme, which has been
modified over the years. In the 1950s, based
on the prevalent conditions, the focus was on
overseas post-secondary scholarships in
which students were sponsored to British
universities and polytechnics to acquire the
relevant education to support the emergence
and growth of an independent Nigeria. With
the establishment in the 1960s of indigenous
tertiary institutions of learning in Nigeria,
another dimension was added to the above
scheme. Scholarship awards were given to
undergraduates of Nigerian universities,
polytechnics and colleges of technology.
These awards were tied to specific subject
areas of engineering and applied sciences.
Currently, in recognition of the manpower
development needs of Nigeria, the scholarship
award programme reflects present day needs.
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Scholarship awards are now made to cover all

disciplines in Nigerian universities. A total of
about 560 university scholarships are now
awarded annually.
Assisting in developing the teaching of science
Science Teachers Scheme

Before 1994, The JVs educational assistance
programme for communities in her area of
operation centred on the donation of science
equipment, classroom furniture, building of
classroom and science blocks and the award
of scholarship to deserving students.
However, holding the gains of these support
activities proved difficult in the face of
decreasing standard of education arising from
inadequate staffing amongst other factors. To
consolidate the gains of the above activities
and to make the education support
programme relevant, the Science Teachers
Scheme was introduced with a pilot
programme in the Eastern Division in 1994
and the Western Division in 1995. The
Scheme is primarily operated to improve the
staffing situation in the community schools and
thereby provide development opportunities to
students who would otherwise be
educationally disadvantaged.
Infrastructural Support
A major problem facing educational
institutions today is the lack of the necessary
infrastructure
to support the learning process. Dilapidated
structures and empty classrooms and
laboratories are common features in the
schools today. The Joint Venture has a
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portfolio of infrastructural assistance to
community schools in the Niger Delta.
Youth Development Scheme

The Joint Venture operates in an environment
with varied socio-economic problems, which
can negatively affect her activities. One aspect
of this problem is the high youth
unemployment rate. In 1995, the Joint Venture
introduced a Youth Training Scheme. The main
aim of the scheme is to establish and sustain
skills acquisition programmes towards gainful
employment and self-reliance of the youths in
particular and the socio-economic
development of the host community in general.
Skill selection in the portfolio supported is
designed not only to increase the
employability of the youths in the oil
producing communities but also to enhance
the provision of services that contribute to the
improvement of the quality of life of the
people.
Last year, the Joint Venture went further in its
quest for a better life for Nigerian youths by
introducing the NNPC/SPDC Special
Intensive Training Programme, SITP. The
programme is divided into two arms, the
Graduate and the Non-Graduate schemes,
and involves 44 weeks of intensive theoretical
and practical training in the applied sciences.
The Joint Venture intends to recruit its core of

technical personnel from the pool of SITP
graduates, but the trainees are not bonded to
work for the Joint Venture after the session.
They are free to market their skills wherever
they please.
Health Assistance
Between 1996 and 1997 alone, the NNPC/
SPDC Joint Venture completed hospitals at
Angala-biri/Agidiama, Okoroba, Ogulagha,
Eda-gberi, Peremabiri, Otuasegha, Okpare,
Otu-Jeremi and Effurun-Ottor. Meanwhile,
donation of drugs went to 11 hospitals or
clinics. In 1997, mobile clinics were also
introduced.
The Joint Venture built health centres to serve
as primary health care units offering treatment
of minor ailments, immunisation, health talks,
ante natal, delivery and postnatal care. In
addition to out-patient and in-patient care,
surgical procedures are carried out where
necessary. The major benefit to the
communities is that highly subsidised health
care is within reach.
Supporting the provision and access to good

healthcare in our communities where we operate
Agriculture
Youths trained under the YDS Scheme displaying their starter

pack provided by the NNPC/Shell Joint Venture
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Food production has also engaged the

attention of the Joint Venture, which now has
a network of 24 agricultural officers spread
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community development over assistance.

Under this arrangement, the company has
recruited the best brains around in development
and involved communities in the choice and
execution of programmes and projects. The
idea has caught on with communities who now
decide what they want, how they want it
implemented and when. This has helped
members of the communities to acquire new
skills, earn a living and be custodians of the
development projects in their areas. This
development has resulted in additional
initiatives. Some of these are listed below.
Womens Programme
One of the farmers supported in our Community

Development Agriculture Scheme displaying
her produce (pumpkin) at the 1999 SPDC Farmers Day
throughout the length and breadth of the Niger

Delta. These officers provide advice to
farmers and co-operatives and also help
distribute planting materials from the companys
five seed multiplication centres.
Community Development
Womens great potential to contribute

positively to the development of their
communities, have been largely left out of the
decision-making process that determines their
future. Most of the women in the JVs areas of
operations are hard-working and in the quest
to harness their latent potential to the benefit of
their communities, the womens programmes
unit was conceptualised. The objectives centre
on empowering the womenfolk and enabling
them to contribute their quota toward the
overall growth in their area.
Recently, the Joint Venture reviewed its

assistance to communities and decided to
embark on a new approach that emphasises
Training women in mat-making skills

acquisition in Degehele community
Micro-Credit
The Joint Venture assist the communities to articulate and
prioritise their needs. Here the community
draws the map of the area for planning purposes.
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The development of micro and small-scale

enterprises is crucial for the achievement of
broader community development objectives,
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particularly in the area of poverty alleviation.
The Micro-Credit and Business Development
unit aims at reviving the traditional economy of
the NNPC/ SPDC operating areas by
promoting self-help enterprise development,
removing credit related constraints to the
start-up and expansion of micro-enterprises,
and the building of local capacity to operate
and manage micro-credit schemes.
A prominent feature of the micro-credit and
business development initiative is the
participation of the beneficiaries in the
planning, implementation and in equity
participation and project ownership by
community and community groups.
The Joint Venture is the highest private
investor in social development, investing more
than US$32million in community development
projects in the Joint Ventures areas of
operations and more than US$94million on
projects with environmental benefits in 1997
alone.
EXXONMOBIL IN NIGERIA
In December 1999, Exxon Corporation and
Mobil Corporation merged to form
ExxonMobil Corporation. ExxonMobils aim
is to be the worlds premier petroleum and
petrochemical company, operating to the
highest standards of financial and technical
excellence, business ethics, and environmental
and safety awareness. ExxonMobils global
presence dates back more than 115 years and
the company has a presence in some 200
countries. In Nigeria, ExxonMobil
Corporation has three subsidiaries, Mobil
Producing Nigeria Unlimited, Esso

Exploration and Production Nigeria Limited
and Mobil Oil Nigeria Plc. ExxonMobil
subsidiaries have a long history of operations
in Nigeria and our commitment to Nigeria
remains extremely strong. Through our Joint
venture with the Nigerian National Petroleum
Corporation, ExxonMobils operations are
one of the largest sources of revenue to the
Nigerian Government and its economy.
MOBIL PRODUCING NIGERIA

UNLIMITED
Mobil Producing Nigeria Unlimited is the
second largest oil producer in Nigeria.
Commencing operations under the name
Mobil Exploration Nigeria Incorporated
(MENI) as an affiliate of Mobil Corporation
in 1955, the companys name changed on
June 16, 1969 when Mobil Producing Nigeria
(MPN) was incorporated to take over the
business of MENI.
In December 1961, MPN was granted Oil
Prospecting Licences (OPL) in the then South
Eastern State of Nigeria. The companys first
discovery, Ata 1 was drilled in 1964. In
1968, the OPL was converted to an Oil
Mining License (OML). By the end of 1968, a
total of five exploratory wells and 16
appraisal wells had been drilled.
Production of crude oil commenced on
February 15, 1970 from the Idoho field,
Mobil Producing Nigeria Oso Platform
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The Qua Iboe Terminal operated by the NNPC/Mobil Joint Venture
offshore South Eastern State (now, Akwa

lbom State).
Three years later, the Nigerian Government
acquired a 35 per cent participating interest in
MPNs operation and thus began the joint
arrangement between MPN and the Nigerian
National Petroleum Corporation (NNPC). The
Governments equity interest rose to 55 per cent
in 1974 and 60 per cent in 1979. The remaining
40 per cent is owned by MPN.
The NNPC/Mobil Joint Venture has recorded
great strides in its immediate business of
exploration and production of crude oil as well as
in the contributions it has been making towards
the social assistance of communities in the areas
of operation and Nigeria in general.
In 1985, after 15 years of production, the
NNPC/Mobil Joint Venture achieved the one
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billionbarrel production mark. Ten years later, in

May 1995, the joint venture reached the two
billion-barrel production target. On February 4,
2000, the joint venture recorded the three billionbarrel production level, a feat achieved in exactly
three decades of production.
In April 1991 came yet another landmark, as the
NNPC/Mobil Joint Venture executed a US$900
million loan agreement with international lenders
to develop and produce its Oso condensate field,
which contains 869 million barrels of recoverable
condensate. The project was successfully
completed and began producing in December
1992.
The Oso-NGL Recovery Project in the NNPC/
Mobil joint venture concessions was designed to
commercialize the flared associated gas and in
effect reduced dramatically the amount of gas
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10

flared in MPNs operational areas. This is a
testimony to ExxonMobils commitment to
environmental protection. The Oso-NGL
Recovery Project was commisioned in November
1998. It is noteworthy that MPNs interest in the
Oso-NGL Recovery Projects was financed
through foreign investors after the company
had secured an investment grade rating of
Baa3 for MPNs Debt Notes. This was the
first time in sub-Saharan Africa that such a
rating would be approved for any project.
Operationally, the joint venture currently
operates 88 offshore platforms with 290
completions in 240 producing wells. There are
20 injection wells for pressure maintenance.
The joint venture presently produces about
600,000 barrels of crude oil per day, with the
capacity to produce 700,000 barrels of oil, oil
condensate and natural gas liquids. MPN is
the lowest cost producer in Nigeria.
Exxon Mobil Corporation places a great
emphasis on developing the capabilities of the
national workforce to allow individuals to
assume positions of higher responsibility in
Nigeria and throughout our worldwide
organization. We have annually provided
1,450 scholarship and over 600 internships to
prepare young people for a career. Over the
past ten years, we have hired 750 nationals
and Nigerians now make up 96 percent of our
workforce in the country. Ongoing training
programs are continually upgrading
individuals skills in our growing organization.
These training programs help employees
further their careers and earning potential by
improving their skills and technical
competence. Exxon Mobil Corporation places
a great deal of emphasis on enhancing
employees skills through its training
programs, which may include training and
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developmental assignments outside the

country.
In late 1996, MPN floated a company known
as Mobil Exploration and Producing Company
of Nigeria (MEPCON) to manage a joint
venture operation in OPL 215.
Together with our joint venture partner, NNPC,
MPN has maintained a very active community
relations program, which includes financial
support for substantial community development
projects ranging from roads and bridges to
schools and other local initiatives.
In Akwa lbom State, where the NNPC/Mobil
Joint Venture has its operational base,
contributions have been made in the areas of
health, education, water supply, electricity and
roads. To date, the joint venture has constructed
51 asphalt roads with drains totalling
approximately 102 kilometres. These activities
have taken place in the core communities of Eket,
Esit Eket, lbeno and Onna closest to the joint
venture operations and other communities in
Akwa lbom State.
More than 80 boreholes have been drilled by the
joint venture to provide potable water to various
communities in Akwa lbom State. Several
classrooms have been built in Onna community
schools; technical equipment, books and other
educational materials have also been donated.
For the immediate future, the Joint Venture plans
to establish a model technical/science college in
each of the four Local Government Areas of
lbeno, Onna, Eket and Esit Eket.
From 1995, the Joint Venture has sponsored
various health and related programs. Prominent
among them includes the regular provision of
medicines and vaccines to hospitals and other
local government health centres, sponsorship of
various health awareness programs on AIDS,
leprosy, breast-feeding, Tuberculosis, etc. From
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11

1993 to date, the Joint Venture sponsors/manages
a Motherless Babies Home at Eket and also
supports a Vesico Vagina Fistula (VVF) Centre in
Uyo with an annual exposure totalling about
N10.5m. All these programs, in addition to
infrastructural development of new and existing
health facilities, are aimed at improving the quality
of health, and thus life in the recipient
communities.
In the areas of art, the NNPC/Mobil Joint
Venture has sponsored various programs of art
such as the exhibition of the paintings Treasure of
Ancient Nigeria, which toured the United States,
Canada, the United Kingdom, Japan and Lagos
in commemoration of Nigerias 25th
Independence Anniversary in 1985.
In 1993 and 1994, the joint venture underwrote
all of the away matches of the Rovers Football
Club in Calabar and later formed its own football
club, the Mobil Pegasus Football Club. It was a
successful professional Division Two League
clubside, which in eight consecutive years (19891997) won the Akwa lbom State Challenge Club
Trophy. The joint venture, with Mobil Oil Nigeria
PLC, has been the sponsor of the Nigeria
(NNPC) Mobil Track and Field Championships
since 1990. This meet has produced Nigerian
athletes who continue to participate in various
international events.
In recognition of all these achievements, Mobil
has been honoured in Nigeria and abroad among
international bodies and professional groups such
as the Nigerian-American Chamber of
Commerce, the Society of Occupational Health,
and the Nigeria Mining and Geoscience Society
(NMGS), among others.
In continuation of our desired objective to ensure
successful operations in a climate of peace, the
NNPC/Mobil Joint Venture will continue to keep
its operations on the path of growth with the most
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responsible attitude to the environment and its

people. Tailored to achieve this is the current shift
to Self-Help Economic Empowerment Projects in
the communities. The Joint Venture has concluded,
plans for its take-off in Year 2000. Such
commitments will go a long way to ensure the longterm plans of the government for the industry.
ESSO EXPLORATION AND

PRODUCTION NIGERIA LIMITED
Esso Exploration and Production Nigeria Limited
(EEPNL) was established in 1993 as an affiliate
of Exxon Corporation. Since that time, EEPNL
has established a growing presence in Nigeria.
EEPNL is the operator of block 209 and holds
the second largest position offshore Nigeria.
In December 1999, ExxonMobil Corporation
announced confirmation of a major deepwater oil
and gas discovery named Erha. The confirmation
well was drilled to a depth of 3,745 meters and
flow tested an oil-bearing reservoir at a test rate
of 2,800 barrels per day. EEPNL has initiated
development planning for the discovery. Erha,
located in approximately 1200 meters of water,
will utilise ExxonMobils deepwater experience
and technology to efficiently develop and recover
the resource.
Through its 20% participating interest in the Shell
operated blocks of 212/219, ExxonMobil is also
involved in the 1996 Bonga discovery on Block
212 located in greater than 1,000 meters of
water. The first project is expected to produce
more than 600 million barrels of oil and efforts are
underway for production of about 200,000
barrels per day to commence from subsea
manifolds to a Floating Production and Storage
and Offloading vessel in 2003.
EEPNL actively supports community projects,
transfer of technology through workshops and
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technical training of Nigeria National Petroleum
Corporation and Department of Petroleum
Resources staff, development of local staff, and
technical scholarships.
Through ExxonMobil, MPN and EEPNL have
access to the experience and expertise of the
largest U.S. multi-national oil company and one of
the largest corporations in the world.
MOBIL OIL NIGERIA PLC

The story of Mobil Oil Nigeria dates back to
1907 when Socony Vacuum Oil Company began
marketing operations, through the sale of
Sunflower kerosene. On December 31, 1951, the
Company became a limited liability company with
change in name from Socony Vacuum to Mobil
Oil Nigeria limited. Forty years later, on the 25th
of July 1991 the Company became a public
limited company, Mobil Oil Nigeria PLC (MON).
The Company has grown into a full-scale
marketing company selling a full range of products
and chemicals. Currently, MON operates over
200 retail outlets. The Company has in recent
times diversified into real estate and the
manufacturing of insecticides and petroleum jelly.
The most important terminal and manufacturing
asset for MON is at Apapa in Lagos. It houses
the lube oil blending plant, the insecticide plant,
and the petroleum jelly plant.
The petroleum products terminal has a total
tankage of 50,000 tons and an annual throughput
of 200,000 tons for fuels, 4,000 tons for
chemicals and 20,000 tons for base oils.
MON invests in the training of its over 300
empoyees to improve their technical, supervisory
and managerial skills. It also plays a leading role
in championing the cause of the down stream oil
industry in Nigeria. MON engages in sound
environmental protection practices, including
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ground water protection protection, waste

management and used oil disposal.
As a caring corporate citizen, MON has been cosponsoring The Nigeria/Mobil Track and Field
Championship for the past ten years. This
Championship usually serves as selection trials for
Nigerian athletes who qualify for international
competitions. MON has recently become
involved with football on a Pan-African level. The
company supports Youth Camps; charity
programmes and operates scholarship schemes
for the Nigerian public.
CHEVRON NIGERIA LIMITED

Chevron has operated in Nigeria for almost 40
years with its activities dating back to shortly
after the countrys independence. Beginning from
the discovery of Nigerias first successful offshore
field, the export of the countrys first offshore
crude oil, to the successful implementation of the
Escravos Gas Project and the first export of
Nigerias Liquefied Petroleum Gas (LPG), the
company has remained a key player in
Nigerias economy. Chevron Nigeria Limited
(CNL) operates onshore and offshore
concession areas totalling some 2.3 million
gross acres on behalf of its joint venture
partner, the Nigerian National Petroleum
Corporation (NNPC). The NNPC holds
60% interest in the venture, with Chevron
retaining the balance of 40%. Total average
production from these fields was 418,000
barrels of oil and 5,261 barrels of LPG per
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13
later, precisely on September 30, 1997, the

Joint Venture exported Nigerias first shipload
of Liquefied Petroleum Gas (LPG) 30,000
metric tons of LPG (334,000 barrels of oil
equivalent), produced at the EGP to the
world market.
The NNPC/Chevron joint venture is committed to using the

latest technology in the Nigerian oil and gas industry
day at the end of 1999. Chevron is also

actively exploring in 6 blocks totalling 3.5
million acres in the Benue Trough area in
North-Eastern Nigeria.
A COMMITMENT TO GAS DEVELOPMENT

In May 1997, Chevron, along with its Joint
Venture partner, the NNPC, successfully
brought on stream the first phase of the
Escravos Gas Project (EGP), Nigerias first
major associated gas project. Four months
Apart from its economic importance to

Nigeria, the multi-phase Escravos Gas Project
has brought about significant environmental
benefits to the country through utilising the
associated gas produced in the Joint Ventures
fields. The second phase is due on stream in
early 2000, and will nearly double the
capacity to over 250mmscf/d.
WEST AFRICAN GAS PIPELINE

The West African Gas Pipeline Project (WAGP)
and Gas-to-Liquids are two other major efforts
that Chevron has gone into in recent times as part
of its commitment to the stoppage of gas flaring
and the utilisation and monetisation of Nigerias
abundant gas resources. Chevron is playing the
role of project manager in a consortium of six
NNPC/Chevrons Escravos tank farm and terminal - hub of the companys operations
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Onshore Gas Plant of the Escravos Gas Project
companies involved in the WAGP, which will pipe

gas from Nigerias fields to three other West
African countries. The gas-to-liquids project, a
partnership with Sasol of South Africa, will
convert gas to environmentally friendly liquids
such as naphtha and diesel. A purpose built plant
for this will be sited adjacent to the onshore gas
plant of the Escravos Gas Project.
14
The first expor t of Nigerias Liquified Petroleum Gas,

a product of NNPC/Chevrons Escravos Gas
Project - September 30, 1997
This provides improved healthcare, schools,

scholarships, roads, and job training for the local
communities. Over the past five years, Chevron,
on behalf of the NNPC/Chevron Joint Venture,
has invested more than US$37 million in
community development projects and charitable
contributions.
PEOPLE AND THE ENVIRONMENT

Chevron maintains an active community
development programme in its areas of operation.
The West African Gas Pipeline Project route map
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15

CHEVRON COMPANIES IN
NIGERIA
Chevron Nigeria Limited (CNL)
l Chairman and Managing Director R. I. Wilcox.
l Chevron is operator (40% interest) in the NNPC/Chevron Joint
Venture,
l Operates 11 concessions (2.3 million acres) in the Swamp &
near offshore Niger Delta.
l Production averaged 418,000 barrels of oil and 6,600 barrels
of LPG.
Chevron Oil Company Nigeria Limited (COCNL)
l Managing Director R. A. Filgate
l Non-operated 20% interest in Texaco Joint Venture, includes
6 concessions (0.6 million acres).
l Production averaged 61,000 barrels of oil.
Chevron Petroleum Nigeria Limited (CPNL)
l Managing Director R. I. Wilcox
l Exploring 9 onshore and 2 deep offshore blocks.
l Chevron is operator in 6 blocks (100% interest) and nonoperator in 5 (30% interest).
Scholarships
The NNPC/Chevron Joint Venture provides two
scholarship programs as part of its contributions
to the education of the Nigerian youth, particularly
those in the areas of operation, and the
development of superior manpower in Nigeria.
One is exclusively for the companys areas of
operation, while the other is a national merit
program for beneficiaries throughout the country.
Both programs cover secondary and tertiary
education. Approximately 3,000 beneficiaries are
on both programs at any given time.
The Western Niger Delta Development

Program
The company has committed to a five-year
project called The Western Niger Delta
Development Program, expected to take off this
year. This project, over which a total of
US$5million will be spent, seeks to address
critical social, economic and developmental
problems in the Niger Delta by initiating skills
acquisition training, micro credit for the
establishment of small businesses, basic education
and teacher training and health education.
Commissioning of the Water Project and 15KVA generator

provided for Abraka Hall, Delta State University,
Delta State by NNPC/Chevron Joint Venture.
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The Nana-Ajamogha Road built by NNPC/Chevron links two

busy parts of the bustling and fast growing city of Warri.
Health, Safety and Environment

Chevron is proud of its efforts in conducting its
operations in an environmentally sensitive manner
and, over the past few years, both the Nigerian
Conservation Foundation and the Federal
Environmental Protection Agency (FEPA), among
other organisations concerned with the
environment, have recognised these efforts.
Chevron integrates environmental protection into
every aspect of its activities wherever it
operates, and employs its high environmental
standards throughout its worldwide operations.
The companys policy, Protecting People and
the Environment, emphasises safe operations,
compliance, pollution prevention and community
programs.
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16
ELF PETROLEUM NIGERIA LIMITED

Elf Petroleum Nigeria Limited (EPNL) has a
remarkable record spanning more than 38
years of activities in Nigeria. Its first
exploration well discovered one of the major
Nigerian fields in the early sixties - Obagi
(OML 58) - that has remained an enduring
signpost in the nations oil and gas industry.
The following years brought repeated
Jetty built by NNPC/Chevron for one of its host communities
The company has in recent times been engaged

in the significant upgrade of its production
facilities, including the installation of improved
equipment to reduce discharges and reduce the
risk of oil spills. In addition, the Escravos Gas
Project has enormous environmental and
economic benefits for Nigeria and Chevron by
reducing the amount of flared associated gas and
by putting to economic use an abundant cleanburning fuel.
Chevron recently brought on stream the
Gbokoda and Dibi Fields, the Joint Ventures
first zero-flare fields.
Chevron receives FEPAs environmental

achievement award - January 25, 1999
Chevron has an intensive exploration and

development program geared toward a longterm presence in the country, consistent with our
vision to be the Petroleum Company of
Choice in Nigeria.
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successes: development of the fields in the

swamp area (OML 57) in the seventies;
considerable offshore discoveries in the eighties
(OMLs 99, 100 and 102) and successes in
deep offshore in the nineties. The Ofon oil field
(OML 102) in eastern offshore Nigeria, was
put on stream in December 1997 and its
development has continued to make
remarkable progress, with the field now
producing above 50,000 bopd of its nominal
peak capacity of 60,000 bopd within the
short period.
Despite the challenging environment facing the
oil industry in Nigeria, the company has been
able to produce above 150,000 bopd and its
production costs have come down for the
fourth consecutive year. Currently, it is
pursuing efforts to have the Amenam/Kpono
project fully take off the ground. When
completed, the field - which straddles OML 70
(Mobil) and OML99 (EPNL) is expected to
double the companys offshore production by
mid- July 2002.
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17
(NLNG) Limited. Through the Obite Gas

Project (OGP), which came on stream in
December 1999, Elf is contributing 23.3% of
natural gas supplies to the LNG plant at Bonny
Island. The OGP is part of the efforts of the
company to reduce gas flaring and
commercialise the nations abundant gas
resources.
The Odudu Production Platform, one of EPNLs

environment-friendly facilities
NNPC/EPNL participates in four oil and gas

exploration and production partnerships, in two of
which it is the operator. It is the operator in a
Joint Venture with the NNPC, with 40%
ownership of three onshore blocks (OMLs 56,
57 and 58). It is also the operator (with 20%
ownership) of an exploration partnership with
Chevron (30%), Exxon (30%) and Canadian
Petroleum (20%) covering one deep offshore
block (OPL 222) and three onshore blocks in the
Benue Basin (OPLs 802, 804 and 807).
Production Sharing Contracts (PSCs) signed in
April 1993 with NNPC cover these blocks.
NNPC/EPNL Joint Venture believes that while

carrying out its primary business objective
exploration and production of oil and gas a
company must wear a human face. It should have
a social responsibility of improving the quality of
life of the people and environment where it
operates. Consequently, the company identifies
closely with its neighbours economically, socially
and culturally. This it has done and will continue
to do through the provision of social and
economic infrastructure, human development
through scholarship awards, improvement of
educational facilities and skills acquisition and
utilisation schemes as well as the promotion of
agriculture.
Above all, as an environmentally friendly
company, NNPC/EPNL Joint Venture adheres
to local and international environmental
regulations and standards. The companys policy
on safety and environment is largely pro-active,
giving top priority to prevention. In all its
EPNL also owns a 10% equity in the NNPC/

Shell/Elf/Agip Joint Venture operated by Shell
which covers 48 blocks and produces about
900,000 barrels of crude oil per day and a
12.5% interest in an exploration partnership
operated by a Shell subsidiary (SNEPCO)
covering two deep offshore blocks (OPLs 212 &
219).
The Joint Venture has recently diversified its
activities into the natural gas sector with a
15% equity in the Nigerian Liquefied Natural Gas
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The Obite Gas Plant operated by NNPC/Elf Joint Venture

supplies associated gas to the NLNG at Bonny
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The Aja-Osolo modern jetty provided by the NNPC/Elf Joint

Venture to ease communicatiuon in Aja-Osolo,
a riverine community in Delta State, Nigeria
locations, safety and environment personnel

operate alongside other workers to ensure that
safety rules are strictly observed. It also
participates actively in private sector initiatives for
a safe environment.
EPNL has struck a long term cord with Nigeria
and its people. With the continued support of its
Joint Venture partners, the NNPC, and the cooperation and understanding of the host
communities, the company will continue to play a
key role in the nations economy.
18
fully integrated oil and gas company engaged in

all aspects of the petroleum business. ENI has
leading operations in the exploration,
development and production of oil and natural
gas, the supply, transmission and distribution of
natural gas, the refining and marketing of oil
and petroleum products, the production and
sale of petrochemicals, and oilfield services
contracting and engineering. ENI conducts
operations in more than 70 countries where it
employs more than 80,000 people. It produces
more than one million barrels of oil equivalent
per day and generates revenues of more than
US$33billion per year. ENIs operations are
conducted through six principal operating
subsidiaries:Agip Division, Snam, AgipPetroli,
EniChem, Saipem and Snamprogetti.
Agip Division engages in the exploration,
development and production of oil and natural
gas. These operations are principally
conducted in Italy, North Africa, West Africa
and the North Sea, with additional operations
in the United States, China and Kazakhstan.
Agip has estimated proven reserves of 1.7
billion of oil and 164 billion cubic metres of
natural gas.
OIL PRODUCTION
NIGERIAN AGIP OIL COMPANY

LIMITED
Nigerian Agip Oil Company Limited (NAOC),
a company of ENI-Agip Division was
incorporated in Nigeria in 1962. It is in joint
venture with NNPC (60%), NAOC (20%) and
Phillips POCL (20%) with NAOC as the
operator.
ENI-AGIP DIVISION
NAOC was granted Oil Prospecting Licence

for (OPL 34) in 1962 corresponding to 4
blocks (60, 61, 62 & 63) with a total area of
5,313sqkm. Following its success at
exploration, the OPL was converted to OML
(Oil Mining Licence) in 1967.
In 1965, oil was discovered in Ebocha and
production started after the construction of its
oil centre at Ebocha in 1970. By 1977,
production was 250,000bopd, currently it is
about 150,000bopd.
Over the years, the Joint Venture acquired
Agip is the upstream division of ENI. ENI is a
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19

21,000km of 2D and 3,000km2 of 3D; has
drilled 328 wells out of which 99 were
exploratory, with 54% success rate. So far, 46
fields have been discovered, with 26 of them
put into production. There are 8 Flowstations,
2 Gas Plants and 1 Export Terminal of
3,558,000 gross storage capacity with 2 single
point moorings for loading tankers. The
Flowstations and Gas Plants are connected to
the Terminal in Brass through a 460km-pipeline
network. While additional 90km pipeline carry
NGL to Eleme Petrochemical and another
180km for delivering LNG and fuel gas to
NLNG in Bonny and the Eleme Petrochemical
Company in Eleme, near Port Harcourt.
GAS UTILIZATION
NNPC/NAOC started large scale gas injection
in 1985 with the Obiafu Obrikom Gas Plant
with a capacity of 270mmscf per day. This was
followed by the Kwale Gas Plant in 1987, with
capacity for 75mmscf per day. In 1994, the
Ob.Ob Gas Plant was expanded to produce
NGL and Fuel Gas for the Eleme
Petrochemical Plant, (a company owned by the
NNPC). This is the first and only investment of
its kind in Nigeria dedicated exclusively to
produce feed stock for a domestic concern.
Production capacity of the NGL unit is
583,000 tons per year.
By 1999, through additional investment, the
Obiafu Obrikom Plant was further expanded.
NAOC started supplying gas to Nigerian
Liquid Natural Gas Co. Ltd., Bonny (NLNG).
The plant built to supply 250mmscf/d, which
will increase to 383mmscf/d when the third
train comes on stream was the first supplier
plant to be ready. Besides being a supplier to
NLNG, NAOC has 10.4% participation in
NLNG. NAOC has thus become a leader in
the industry in gas utilisation achieving up to
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75% utilisation of its produced associated gas

as against the industrial average of 60%.
In all its activities, NNPC/NAOC strives to
develop and sustain excellent relationship with
its host communities, through the provision of
infrastructural development projects, active
support for indigenous enterprise and various
poverty alleviation programmes.
The Joint Venture provides basic infrastructure like
electricity and water to its host communities
directly from its plants when possible. The
company also provides structures for health care
and education as well as scholarships, roads, town
halls, library, jetties, etc. for its communities.
The NNPC/NAOC Joint Venture has built a large
and effective extension services for farmers and
fishermen within its areas of operation through its
Green River Project (GRP) programme and
introduced agro-mechanisation and agroprocessing to move agriculture from sustenance
level to big business. Economic empowerment is
provided through contract awards, Community
Project Self Management and Skill Acquisition
Programme, where youths are trained in various
crafts at the end of which they are assisted to set
up on their own.
NIGERIAN AGIP EXPLORATION

LIMITED
Nigerian Agip Exploration Limited (NAE) is a
subsidiary of ENI-Agip Division incorporated
in Nigeria in 1996. It operates a production
sharing contract with the NNPC on deep
offshore blocks with SNEPCO as its joint
venture partner. Further, it manages all other
Agip joint venture interests in deep offshore.
NAE as operator of OPLs 211 and 316 in the
deep offshore has acquired 5,170km of 2D
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20

seismic, 3,783 of 3D seismic and drilled 4
wells - 3 wells in OPL 316 resulting in the
Abo discovery and field development
programme and 1 well in OPL 211 which is a
gas discovery well with oil traces.
The Abo field discovery in OPL 316 which
will be further appraised in 2000 is planned
for development with first oil expected in the
year 2002.
An exploratory well Udoro-1 is planned for
drilling in the first half of 2000 in OPL 211.
The first exploration phase of the OPLs 211/316
PSCs will end on 4th of July, 2000 at which time
a decision to enter the 2nd phase of exploration
should be made.
Brass on the Atlantic Coastline. A total of about

59 million bbls of oil has so far been produced.
The Platform was installed in 1988 with its
jacket fabricated in Nigeria. Among other unique
features of the Agbara project is a 45km sealine,
which conveys crude oil from the production
platform to the Brass Terminal for storage and
export.
It is noteworthy that the Agbara Platform has
recorded no accidents or spills since its
commissioning.
The Service Contract has been renewed for 20
years and further exploration and development
activities have commenced.
AGIP ENERGY AND NATURAL

RESOURCES (AENR)
Another subsidiary of ENI-AGIP in Nigeria is
Agip Energy and Natural Resources currently
executing a Service Contract with the NNPC.
AENR was incorporated in Nigeria on 27th May
1980 and is the only company that has made a
success out of all the companies that signed a
contract with NNPC in 1979, despite of some
relinquishment made.
Approximately, 12,600km of seismic were
acquired over this period and 8 wildcat wells
have been drilled on possible prospects prior to
the relinquishment exercise.
AENR now holds 3,609sq.kms of the OML 116
in which 3 wildcat, 3 appraisal wells and 14
development wells were subsequently drilled and
completed by December, 1989.
Production started in June 1989 from the
Agbara field situated some 117km south of Port
Harcourt and 45km offshore from the town of
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A World of Energy
TEXACO OVERSEAS (NIGERIA)

PETROLEUM COMPANY UNLIMITED
Texaco has grown from its small beginnings in
the early 1960s under the umbrella of
Amoseas, which metamorphosed into Texaco
Overseas (Nigeria) Petroleum Company
Unlimited, to become a major player in the
exploration and production of crude oil in
Nigeria. It is the operator and owner of a 20%
interest in six oil mining leases (OML 83-88)
that cover about 606,000 acres offshore the
Niger Delta in Nigeria. The other participants in
the joint venture are the Nigerian National
Petroleum Corporation (NNPC) and Chevron
with a 60% and 20% equity shareholding
respectively.
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Texaco has been involved in exploration and
production of Nigerian crude oil resources
since 1961 when Amoseas (Texaco and
Chevron) acquired joint concession rights to
our original offshore acreage blocks. Since
acquiring these blocks, Texaco has successfully
and effectively worked with succeeding
government regimes.
AMOSEAS, TOPCONs forerunner, drilled
the first offshore well in Nigeria in 1963. This
well was a non-commercial discovery.
Additional exploratory drilling led to the
discovery of the Sengana Field in 1963,
Pennington Field in 1965 and Okubie in 1966.
Further discoveries were made in Middleton
and Anyala Fields (1972), North Apoi Field
(1973), Funiwa Field (1978) and Madu Field
(1993).
NNPC/Texaco Joint Venture is also involved in
deep-water activities in Nigeria through its
wholly-owned subsidiaries: Star Deep Water
Petroleum Limited, Texaco Nigeria Outer Shelf
Limited, Star Outer Shelf Petroleum Limited
and Star Ultra Deep Petroleum Limited.
The NNPC/Texaco Joint Venture currently
produces from North Apoi, Funiwa,
Pennington, Middleton and Okubie fields.
Production from these fields, with the exception
of Okubie field, is gathered and treated at
21
production platforms located in each field. Oil

from the platforms is pumped through sub-sea
pipelines to a Floating Storage and Off-loading
(FSO) vessel called Oloibiri.
The FSO, which is rented from the Nigerian
National Petroleum Corporation (NNPC), has
a storage capacity of 1.5 million barrels of oil
and a dead-weight capacity of 276,895 metric
tonnes.
Lifting for export is made by tankers, which
normally take on cargoes of approximately
900,000 barrels. In addition to lifting our own
equity share of production, Texaco purchases
from NNPC part of its 60% equity crude as
well as other NNPC crude cargoes.
The Joint Ventures producing fields (North
Apoi, Funiwa, Pennington, Middleton and
Okubie) have jointly produced over 487
million barrels of oil as at the end of 1999.
North Apoi and Funiwa fields accounted for
over 415,724 MBO as at December 31,
1999; Pennington 40,028 MBO; Middleton
27,954 MBO; Okubie 3,156 MBO and
Sengana field, 676 MBO.
In addition to the above-mentioned producing
fields, plans to bring the North Chioma,
Anyala and Madu fields on stream during the
years 2000/2001 is in the pipeline.
The North Chioma, Anyala and Madu fields
were discovered in the years 1967, 1972 and
1993 respectively.
The Anyala field is located in OML 83 about
45km south of Funiwa field and 15km from
Madu field. Madu field is located in 0ML 85,
approximately 24km from the Funiwa field.
The North Chioma field is located
approximately 15km west of Pennington field.
The Anyala/Madu fields development has
TOPCONs Funiwa Offshore production platform
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estimated reserves of about 180MMBO.
Peak production of 40MBOPD is anticipated
when both fields come on stream. These two
fields are among the Joint Ventures strategic
focus area in the outer trend with the aim of
reducing operating cost and improving
earnings plus cash flow.
The NNPC/Texaco Joint Venture production
history in the last nine years (1991 - 1999)
averaged approximately 60,000 BOPD.
TOPCONs crude, Pennington Light, is the
best crude oil and attracts a premium of about
20-30 cents above Nigerias Bonny Light
market price.
TOPCONs operational activities are
controlled from three locations: Lagos, the
head office, Ekpan the district office and
Abuja, the liaison office.
GAS DEVELOPMENT
Development of the Joint Ventures substantial
gas and condensate reserves is now being
considered as one of the ways to add value to
the companys assets. The pre-feasibility
report of the Condensate Development
project, prepared in 1996, found that about
70% of the identified condensate reserves are
located in North Apoi and Okubie reservoirs.
Results of the study conducted in 1997
recommended gas cycling for the condensate
development, both to optimise recovery and
utilise the produced gas. The North Apoi/
Okubie Gas Condensate business plan is
currently being completed and the project is
ready to proceed into Commercial and
Engineering Definition phase.
DEEP WATER ACTIVITIES

NNPC/Texaco Joint Venture currently holds
interest in five deep-water blocks offshore
Nigeria.
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22
The Joint Venture is involved in deep-water

activities in Nigeria in OPL 216 through its
wholly owned subsidiary Star Deep Water
Petroleum Limited (Star). Star and Famfa
Oil Limited, an indigenous Nigerian oil
company, were granted exploration rights to
the 617,000 acre Block 216 in late 1996. The
companies initiated in late 1996 and
completed 3-D seismic acquisition and
processing during 1997. Braspetro became a
co-licensee in the block in 1999.
In July 1998, the first wildcat well, Agbami-1,
was spudded in 4,700feet of water,
approximately 70miles offshore and 135 miles
from Port Harcourt in the central Niger Delta.
The initial exploration well was drilled to a
total depth of over 12,000feet in late
November and was announced as a discovery
in January 1999. In 1999, the Agbami-2
appraisal well was drilled to more than
15,000feet and a successful test was
conducted on the well. Another exploratory
well Ikija-1 is currently drilling on a separate
structure. Star Deep Water Petroleum Limited
serves as Technical Advisor and Famfa Oil
Limited is the Operator.
In January 2000, the Joint Venture announced
the completion of testing on the Agbami-2
appraisal well, which confirmed that the
Agbami structure is a giant discovery with
potential recoverable reserves in excess of
one billion oil equivalent barrels. The well,
which ranks among the largest single find to
date in deep-water West Africa, spans an area
of 45,000sqkm.
The Agbami-2 appraisal well, located in Block
216 approximately 220 miles southeast of
Lagos, was drilled in 4,800 feet of water to a
total depth of 15,683 feet. The well
encountered 534 feet of pay in five separate
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23

oil-bearing zones, one of which flowed at a
maximum rate of 10,000 barrels of oil per day
with a well-head pressure of 2,200 psi
(pounds per square inch). Surface equipment
limitations prevented the achievement of a
higher flow rate. Oil from the reservoir is
light, sweet crude (45 degree API gravity)
with no contaminants.
Texaco and Statoil announced a second major
discovery in March, on Nnwa-1 on OPL
Block 218, 70 miles (112 km) off the coast of
Niger Delta.
The NNPC/Texaco Joint Venture, as part of
its deep-water strategy, also acquired 100%
interest in OPL 213, 46.15% in OPL 217 with
Statoil (53.85%) and 46.15% in OPL 218
with Statoil (53.85%). Texaco also has
interest in OPL 215 where Texaco has 50%
equal share with ExxonMobil. Texaco has the
largest net acreage in Nigerias deep offshore.
(Further details may be obtained from
Houston office).
Texaco is a leader in deep-water exploration
and production technology and has been a
pioneer in the advancement of this technology
through its role in the Deep Star Project in the
USA.
Texaco has had extensive deep-water
exploration experience in the Gulf of Mexico
and has also been a pioneer in the technique
of 3-D visualisation of complex seismic data
to enhance the probabilities of success in this
technologically challenging environment.
Moreover, Texaco is also an industry leader in
fabricating the state-of-the-art drill ships
necessary to carry out these operations.
Texacos deep-water activities are managed
from Lagos (the head office), and Port
Harcourt (the district office).
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In the new millennium, Texaco is poised to
make even greater impact on the society.
Whilst maintaining the highest standards in our
production operations, we hope to build upon
the long-standing relationships we have forged
in Nigeria, and develop the countrys vast
energy resources in a responsible and
sensitive way. We plan to diversify our
Charity Challenge initiatives, which range
from our Adopt a School partnership and
activity involving the arts, to projects that
develop the social infrastructure and
healthcare facilities in areas close to our
operations.
The primary objective of the NNPC/Texaco
Joint Ventures community development
program is to promote the company as a good
corporate citizen, willingly assuming its share
of responsibilities in communities nearest its
areas of operation. While some community
development activities are carried out at the
national level, most are focused in the areas
where the company has major business
interests in Bayelsa and Delta States,
reinforcing TOPCONs commitment to be a
good neighbour and an integrated participant
in those communities. The communities are
Koluama 1 & 2, Sangana, Foropah,
Fishtown, Ezetu and Ekeni. Those in Delta
State are Warri, Enerhen, Edjeba, Ubeji and
Ekpan.
Many projects have been completed under
this program. Cottage hospitals in Sangana,
Koluama 1 and Ezetu; blocks of classrooms in
Ekeni and Foropah; potable water in Koluama
1, Sangana and Ezetu 1; electricity generators
in Sangana, Fishtown, Ekeni, Ezetu 1 and 2
and Medicare scheme; all in Bayelsa state.
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EDUCATION
At the NNPC/Texaco Joint Venture,
partnership is a key concept in our education
program, just as teamwork is in our business
operations, pooling expertise, resources and
experience to achieve maximum
effectiveness. In effect, partnership for the
Joint Venture often involved providing
practical assistance as well as funding.
The Adopt a School Partnership is a
program through which the company works
hand in hand with schools in all levels of
education in an effort to support their
educational activities. This partnership
encompasses more than just giving a
donation. The warm relationship with the
schools allows for an easy exchange of ideas
and information.
Through our rehabilitation and refurbishment
programmes, the Joint Venture has continued
to supply stationery, blocks of classrooms
are rehabilitated, laboratories are upgraded
and other areas of needs of the schools are
considered. We also give scholarships
annually to a number of university
undergraduates and secondary school
students, who cut across various academic
disciplines at the national and community
levels based on academic excellence and the
need for financial assistance.
CHARITY CHALLENGE
Alongside the main community development
program, NNPC/Texacos Charity
Challenge initiative is aimed at providing
financial and volunteer support to responsible
non-profit organisations that work effectively
for the betterment of life. Beneficiaries
include the Nigerian Training Centre for the
Blind, Lagos, Compassion Home for
Handicapped Children, Port Harcourt, St.
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24
Annes Orphanage, Warri, Nigerian

Conservation Foundation and UNICEF to
mention a few.
SOCIAL ENRICHMENT
In addition, the Joint Venture casts a wide
net with the category that it calls Social
Enrichment aimed at maintaining and
improving the quality of life in the
communities at large. A very important part
of our social enrichment program focuses on
Enterprise Development in which we assist
in the development of rural based self-help
businesses. Under this program, a number of
youths from our communities in Bayelsa
State are trained annually since 1997 at the
Nigerian Opportunities Industrialisation
Centre (NOIC), Warri in the Electrical and
Mechanical techniques, Fish smoke
equipment have been provided, Co-operative
Society Scheme is billed to commence in
Year 2000. The highlight of this programme
is our Vocational Training projects in which
youths are to be trained in various skills
ranging from carpentry, welding, tailoring and
plumbing etc. The project will kick off in
Year 2000.
ART EXHIBITION
Another principal category of our community
development is our abiding commitment to
the support of the Nigerian Art and Culture.
Art exhibitions are crafted annually to
provide grassroots opportunities for young
artists to gain exposure and also to heighten
the awareness of the public to explore their
unique talents. Selected art works at the
exhibition are featured in our calendar to
project artists works and expose their
talents. About 70 Nigerian young artists have
participated in the yearly exhibition since its
inception in 1993.
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25
PAN OCEAN OIL CORPORATION

(NIGERIA)
Pan Ocean Oil Corporation (Nigeria) is an
exploration and production company in a Joint
Venture partnership with the Nigerian National
Petroleum Corporation (NNPC). It operates
OML 98 in Delta and Edo States in the Niger
Delta, an area of 523sqkm at Ologbo and
Ogharefe oil fields.
Under an agreement in February 1971, Pan
Ocean Oil Corporation (Nigeria) acquired a
100% working interest in Oil Prospecting Licence
71 (OPL-71) from Delta Oil Company. On
December 1, 1975 OPL-71 was converted to
Oil Mining Lease 98 (OML 98). Pan Ocean
commenced crude oil production from OML 98
in August, 1976.
and maintaining of roads, thereby ensuring to a

large extent a peaceful co existence with the
communities.
The Joint Venture believes man cannot continue to
operate without due respect to the environment
and ecosystem, hence her dynamic policy to
ensure that the operating environment is not
disintegrated.
Pan Ocean Oil Corporation (Nigeria) is a
member of the Clean Nigeria Associates
established in November 1984.
In May 1976, Pan Ocean Oil Corporation

(Nigeria) was acquired by Marathon Oil
Company of USA, who remained the owner until
1983, when its foreign interests were acquired by
Impex Limited of the USA.
Pan Ocean Oil Corporation (Nigeria) has two
operating offices: the corporate headquarters,
based in Lagos and the operating group,
overseeing the oil fields operations, based in
Warri.
The NNPC/Pan Ocean Joint Venture maintains
very cordial community relations in its area of
operation by providing adequate social amenities,
such as building of classroom blocks, scholarship
awards, portable water supply system, electricity
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26
The Nigerian National Petroleum Corporation has

a 60% working interest in OML 98 and Pan
Ocean Oil Corporation (Nigeria) has 40% and is
the operator of the Joint Venture.
ADDAX PETROLEUM
DEVELOPMENT (NIGERIA) LIMITED
Addax Petroleum, a wholly owned subsidiary
of the Addax and Oryx Group, was created in
1994. The parent companys petroleum trading
activities in Africa have led to its involvement in
the upstream sector. In Nigeria, Addax Petroleum
operates through its subsidiary - Addax
Petroleum Development (Nigeria) Limited
(APDNL) - which operates as contractor to the
(NNPC).
On May 6, 1998, the company signed two
Production Sharing Contracts (PSCs) with
NNPC to formalise the acquisition of interests
in OPLs 98, 118, 90 and 225. These concession
areas total approximately 3,150sqkm.
Current production is about 18,000 BOPD from
eight fields both onshore and offshore (OPL-98).
Identified prospects contain over 300 million
barrels of risk discounted recoverable oil.
The company currently has a total staff strength of
225, of which 117 are regular employees and the
rest are contract staff.
In August 1999, fifteen months after entering
Nigeria and following the commissioning of
Fred Olsens FPSO Knock Taggart, Addax
Petroleum Development Nigeria Limited
(APDNL) contracted the Noble jack-up rig
Percy Johns for a 3-month drilling campaign in
the Ebughu field in OPL-98. The drilling
campaign consisted of five pilot wells, one of
which was horizontal one core well, two
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A vessel owned by of Addax loaded with petroleum for export
appraisal wells and five horizontal producers with

total depths ranging between 716 feet and 9,759
feet with an average length of 200 feet. Drilling
performance exceeded expectations, with more
than 70,000 feet drilled in 12 days effective bit on
bottom time. In one instance, 6,363 feet was
drilled in 21.5 hours a Nigerian record.
With a team of highly experienced and
professional personnel and prudent Health, Safety
and Environmental practices, the company is
strategically placed to grow well beyond its
current hydrocarbon portfolio. With a focus on
West Africa, the parent company, Addax
Petroleum, intends to extend activities to other
African countries.
Recently, Addax agreed on basic technical and
commercial terms with Nigerian Agip Oil Company
(NAOC) for Associated Gas utilisation in OPL-118.
OPLs 90 and 225 are located further offshore,
about 90 km south of Port-Harcourt, in water
depth ranging between 60m and 210m. OPL 90
contains a commercial oil discovery - the Okwori
field - for which a development plan is under
review. Seismic studies on OPL 225 indicate that
the area is prospective, including the deeper series.
In order to accelerate exploration and development
of this prime under-explored acreage, Addax is
currently reviewing partial farm-out opportunities
with several international oil companies.
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On community relations, the companys objective
is to assure peaceful co-existence with its host
communities and avoid incidence that would result
in disruption of its operations. To this end, the
company has been engaged in the provision of
social and economic amenities towards improving
the quality of life of its host communities.
Our current year community development projects
include: extension of potable water supply to 3
communities; road improvement and drainage;
construction of a community town hall; construction
of 2 blocks of classrooms; post-primary and postsecondary scholarships; skill acquisition scholarship
scheme; cultural support and donations to
charitable courses.
During the next 3 years, the company plans to
implement the following projects/programmes:
l
Supply potable water to 8 communities
Construct 4 modern town halls
Construct several blocks of 4 classrooms
Provide additional market stalls for various

communities
Donate to cultural festivals and other charity

organisations
Award scholarships
Generate employment opportunities.
HEALTH, SAFETY AND ENVIRONMENT (HSE)

Addax Petroleum Development (Nigeria) Limited
(APDNL) believes that a good HSE performance
is an integral part of efficient and profitable business
management. Consequently, APDNL strives to
protect the environment by minimising the impact of
its activities and creating a working environment
free of incidents. The HSE Management System,
which has been put in place in the company,
establishes a common safety culture for all persons
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27
connected with the companys operations. All

employees and contractors are trained in workplace safety. Plans have been developed for all
reasonably foreseeable operational emergencies to
ensure prompt response, mitigate losses and
facilitate speedy recovery.APDNL conducts inhouse exercises to monitor operational compliance
with statutory regulations and industry codes of
practice.
STATOIL NIGERIA
Statoil commenced operations in Nigeria in June
1992 when the company was provisionally
awarded the three deep-water blocks 213, 217
and 218. The award was ratified mid-1993 after
the signing of Production Sharing Contracts
(PSC) with the Nigerian National Petroleum
Corporation (NNPC). Statoil was designated
operator of the three OPLs.
The company farmed into indigenous deepwater OPL 210 in late 1993, holding 20% of
the interests. Statoil was named technical
adviser under a Technical Service Agreement
with Allied Energy.
Statoil is a corporate member of the Nigerian
Mining and Geosciences Society with a seat on
the Council as well as the Nigerian Association
of Petroleum Explorationists.
EXPLORATION ACTIVITY
Deep-water OPLs 213, 217, and 218 were
awarded to Statoil with an initial 10-year
exploration period divided into a first phase of
six year and a second phase of four years.
Statoil, in partnership with all stakeholders
drilled a total of seven exploration wells
between 1995 and 1999. This was based on a
total coverage of approximately 9,150sqkm of
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28

3D and 16,00 line kilometres of 2D seismic.
The first major discovery was made in OPL
218 in February 1999.
During 1995, Statoil farmed down 15% equity
in OPL 213, 217 and 218 to Texaco. Today,
Statoil continues to operate deep-water blocks
217 and 218 with equity split between Statoil
(58.85%) and Texaco (46.15%).
TRAINING AND DEVELOPMENT

Statoil Nigeria provides equal opportunities
for gainful employment to Nigerians. Transfer
of technology is achieved through coaching
and on-the-job training, foreign assignments,
national service assignments and industrial
attachments.
Statoil also has a scheme to improve
awareness in computer and information
technology. To this end, each office staff is
provided a multi-media home PC and offered
training in these areas.
Orientation of Nigerian staff towards human

rights and business ethics is also provided
through workshops and seminars.
COMMUNITY SUPPORT AND

DEVELOPMENT
The Akassa community of Bayelsa State is
being offered training in self-sufficiency and
sustainable improvements to the standard of
living. This has been achieved largely through
the use of micro-credit and health orientation
schemes. The effort has been successful and
has received international acclaim. Today, it is
ready to be replicated elsewhere in the Niger
Delta and any community for that matter.
SPONSORSHIP
Statoil Nigeria has developed a sponsorship
program that focuses on health, education, the
environment, abandoned and homeless
children, homeless and needy women and the
rest of the local community, which includes
societies and organisations.
HIGHLIGHTS
l
Incorporated on 10th February, 1992
Signed three Production Sharing Contracts (PSCs)

for OPLs 213, 217 & 218 on 18/5/93 with Statoil as
operator. Texaco farmed in as partner in July 1995.
Equity distribution Statoil 35%, BP 35% and
Texaco 30%.
Farmed into OPL 210 on 16/12/93. Equity

distribution Allied 60%, Statoil 20% and BP 20%.
Drilled seven wells from 1995-99. Two wells in

OPL 210, one each in OPL 213 and 217 and three
in OPL 218.
First Nigerian management staff appointed in

October, 1997.
Framed out of 210 late 1998.
Strategic alliance with BP terminated in February

1999.
First major discovery in OPL 218 Nnwa in March

1999.
Reassigned OPL 213 interest to Texaco. PSC

Phase II commenced for OPLs 217 and 218 on
17/5/99.
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CONOCO ENERGY NIGERIA

LIMITED (CENL)
Conoco Energy Nigeria Limited (CENL) and
Conoco Exploration and Production Nigeria
Limited (CEPNL) were established in 1991 as
subsidiaries of Conoco International, a
Houston based major integrated energy
company with operations in more than 40
countries. Conoco is celebrating its 125th
anniversary in 2000.
CENL was assigned a 40% interest in OPL
74 (now OML 108) by Express Petroleum
and Gas Company Limited, an indigenous oil
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29

company. On June 30, 1997, CENL became
the first multinational company to bring an
indigenous oil company to production. Using a
very large crude carrier (VLCC) converted to
a Floating Production Storage and Offtake
(FPSO), CENL, demonstrated its core values
of safety, environmental stewardship, ethics
and valuing all people.
CEPNL signed a Production Sharing Contract
(PSC) with NNPC for OPL 220 in July 1993. A
3D seismic survey was performed on the block in
1996 followed by two exploratory wells in 1997
and 1998. Exploratory drilling resulted in the
Chota-1 discovery well in water depth of 3,066
feet. An appraisal program is being planned to
uncover more information on the reserve potential
of Chota in the fourth quarter of 2000. Additional
wells on the same structure are expected in 2001.
CEPNL is operator on the OPL 220 block with a
47.5% interest. Exxon Exploration and
Production Nigeria (Benue) Limited, holds a
47.5% interest in the block while Medal Oil
Company Limited holds the remaining 5%.
Conoco is committed to growing its assets base in
Nigeria and gearing itself towards taking
advantage of the new opportunities opening up in
the Nigerian oil industry.
AFRICAN PETROLEUM PLC

The origin of African Petroleum Plc could be
traced to 1954 when the then British Petroleum
Company Limited bought over the assets of the
Atlantic Refining Company on the West African
Coast. BP Nigeria Limited was incorporated in
Nigeria 10 years later. In 1978, the company
changed from a private to public one, when 40%
of the shares were sold to Nigerians in compliance
with provisions of the Nigerian Enterprises
Promotions Decree of 1977.
On July 31, 1979, the Nigerian Government
acquired the 60% equity held by BP, thus
transforming the company into an entirely Nigerian
concern. With this development, the name of the
company changed to African Petroleum Limited in
November 1979. Subsequently, 20% of the
Federal Governments 60% shares were sold to
the public in March 1989 in line with its
privatisation policy. The exercise saw the number
of shareholders increasing from 15,000 to about
150,000 as the shares were extensively oversubscribed. Presently, the Company has a share
capital of N144million and paid-up share capital of
N108million.
BUSINESS ACTIVITIES
African Petroleum is one of the 8 major marketers
of refined petroleum products in Nigeria, supplying
15.03% of the countrys requirements in 1998. In
volume terms, this represented 0.8million metric
tons, valued at over N10.4billion. The range of
products which the company procures and
markets include Petrol (PMS), Diesel (AGO)
Household Kerosene (HHK) Fuel Oils, Jet A-1
(Aviation Turbine Kerosene).
AP also manufactures and distributes a wide
range of lubricants mainly BP branded grades.
Foremost among the popular brands are Super V
and Visco 2000, both of which are the toast of
Nigerian motorists. Both have been successfully
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marketed to the point of being Nigerias best
selling engine oils and indeed the benchmark in
the lubricants market. Our lubricant grades are
upgraded from time to time in line with our
tradition of commitment to quality and continuous
brand reinforcement programme. We are aware
that customers values are continuously changing
while we constantly track them. APs Apicide
Insecticide has also become a household name.
AP operates four marketing areas in order to
ensure that the companys products reach all
parts of the country effectively. The companys
retail outlets are situated in strategic locations for
an even geographical spread . And like the
mythical bird whose wings span the length and
breadth of the country, AP is able to penetrate
every nook and cranny of Nigeria.
The source of the companys fuel products is the
(NNPC) through its network of depots and
refineries. Moreover, AP maintains its own depots
at Apapa, Jos and Kano for enhanced delivery
flexibility. AP operates a Lubricant Oils Blending
Plant (LOBP) at Apapa, with a production
capacity of 50,000 metric tons. Moreover, AP
has in recent years diversified into chemicals
marketing, real estate development and
insecticide manufacture. In all, our production
processes are carried out in strict adherence to
environmental and safety standards thus
portraying AP as human and environment friendly.
30
As a company wholly owned and run 100% by

Nigerians for Nigeria, African Petroleum is one of
the best representatives of what the future of
Nigeria should be. The companys phenomenal
growth and consistent trend of impressive
performance is attributable to a tradition of
unalloyed devotion to product and corporate
excellence. AP derives its strength from a history
of goodwill engendered by quality service and
thorough understanding of the market
environment. That AP has won the prestigious
Nigerian Stock Exchange Presidents Merit
Award four times bears testimony to its leadership
qualities. AP has always proved its mettle as a
key player in the national economy and
responsible corporate citizen through sports
sponsorship, donations to philanthropic
organisations and other community-oriented
projects.
The raison dtre of AP is encapsulated in its
STATEMENT OF VISION: AP is a world class
integrated petroleum company, where outstanding
and dedicated people enabled by superior
technology deliver exceptional benefits to its
stakeholders. And the MISSION: to be an
innovative and customer-oriented provider of
quality petroleum and related products and
services to Nigerian and African markets.
The company entered into a joint venture

agreement with Star Oilfield Supply and Services
Limited in August, 1996 for an initial period of 5
years principally for the provision and sale of
oilfield products and services.
African Petroleum is blessed with visionary
leadership, loyal and dedicated staff, the vital
asset, which the company depends on to cope
with future challenges.
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CONTENTS
CONTENTS
1
CHAPTER 5: Indigenous Oil Operators

BACKGROUND
The impressive performance of nine out of 38
private Nigerian entrepreneurs, granted oil
prospecting licences between 1990 and 1994,
has boosted Federal Governments plan to
indigenise the exploration and production sector
of the petroleum industry.
No fewer than 35 wells have been drilled and an
estimated over US$1billion of new investment
attracted by the nine companies between 1991
and 1999.
Six of the companies - Consolidated Oil, Amni
International, Express Petroleum, Monipulo, Atlas
and Cavendish. They are at various stages of
developing these discoveries.
Significant discoveries have been made by others
including the billion barrel discovery by FamfaTexaco, Yinka Folawiyos Aje Field and Allied
Energy Oyo Field.
With the current field development, additional
independents are expected to be on production
by end 2000 with aggregate output of indigenous
companies rising from 35,000bopd to some
135,000bopd.
Governments intention to develop a minimum
home-based production capacity through the
indigenous programme will be realised further,
when the other companies conclude on-going
exploration activities.
The indigenous companies are expected to
feature prominently in the upcoming deep water
bidding rounds.
The indigenous companies, which operate on a
sole risk basis, are encouraged to farm out part of
their lease holdings (to a maximum of 40 per cent)
CONTENTS
to foreign technical partners to help address the

usual problems of funding and technical expertise.
Under the sole risk arrangement, the companies
provide the entire fund required to operate the
concessions and have the right to dispose of the
output, subject to payment of the Petroleum Profit
Tax (PPT) and royalties to government.
Other criteria for participation, under the
indigenous programme by Nigerian entrepreneurs
include:
o
a minimum US$1million signature price as the

price of entry; and,
a minimum work programme, typically 50 to

1,000 kilometres of seismic and between 2
and 3 wells.
ATLAS PETROLEUM
INTERNATIONAL LIMITED
Atlas Petroleum International Limited is an
indigenous Petroleum Development Company.
The company was registered in 1991 during
which year a discretionary offer of OPL-75,
previously made to Nanze International, was
transferred to ATLAS.
Atlas Petroleum International was granted
concessionary rights in OPL-75 on March 27,
1991. Consequently, the Company was charged
with the responsibility of carrying out full scale
hydrocarbon exploration and production in OPL75. Atlas has since July 1992 gone into
partnership with Summit Partners Management
Company, a Texas (U.S.A.) based petroleum
exploration and production conglomerate. This
agreement called for a 30% undivided
participating interest to Summit in OPL-75.
Summit however, is to fund all the pre-production
projects on sole risk basis.
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ALLIED ENERGY RESOURCES

Allied Energy Resources, with its strong oil and
gas team, is a dynamic company with great
commitment to the Nigerian energy industry.
On June 3rd, 1992, Allied Energy Resources was
awarded OPL-210 situated offshore western
Niger Delta. After singularly operating the block
for about 18 months Allied, on December 16th,
1993, assigned 2.5% interest to Camac
International Nigeria Limited and 20% each to
Statoil (Nigeria) limited and BP Exploration
(Nigeria) Limited.
On July 9th, 1995, Allied made exploration
history with the Spudding/Drilling of the very
first deep offshore well name OYO-1. It was a
discovery!
These two concessions are being operated in

Joint Venture Partnership with LIBERTY
TECHNICAL SERVICES LTD. which is a
wholly owned subsidiary of Abacan Resources
Corporation of Calgary, Canada. From 1994 to
July 1997, AMNI successfully drilled 7 wells.
Plans to drill an 8th well are already underway.
AMNI commenced production in December
1996 and produces an average of 20,000 bopd.
CONSOLIDATED OIL LIMITED

Consolidated Oil Limited (CONOIL) was
incorporated on the 2nd of August, 1984 as a
Petroleum Exploration and Production
Company.
AMNI International Petroleum Development

Company Limited (AMNI) was incorporated
on the 23rd of June, 1993 as an oil and gas
exploration and production company.
In August, 1990, Conoil was awarded an Oil

Prospecting Licence (OPL) by the Ministry of
Petroleum and Mineral Resources as one of
about eighteen (18) Nigerian Indigenous
Companies awarded concessions on a
discretionary basis by the Nigerian
Government. The assigned Oil Prospecting
License (OPL) 113, lies predominantly in a
fresh water swamp terrain on the western
fringes of the Niger Delta. This move by the
Federal Government was part of an integral
policy to increase Nigerias hydrocarbon
reserves base and production potential by
involving indigenous entrepreneurs in the
upstream part of the petroleum sector of the
economy. Consequently, Conoil vigorously
pursued an exploration programme which
included all aspects of data acquisition
(seismic and well) interpretation and studies
culminating in the drilling of the successful
exploration well (Bella-1) in December, 1991.
The company operates two concessions in the

Offshore Niger Delta - OPL 469 and OPL 237,
which were acquired in 1993 and 1994
respectively.
Three follow-up appraisal and development wells

were successfully drilled, tested and completed
by November, 1992. Conoil produces over
7,000 barrels of oil per day.
An affiliate of Allied Energy Corporation,

Texas; Allied Energy Resources represents and
act as the Technical advisor in its 40% equity
interest in OML-110 (formerly OPL-453) with
Cavendish Oil Company (57.5%) and Camac
International Nigeria Limited (2.5%).
Allied Energy has participated in joint
ventures with other multinationals, including
Conoco Dupont. With this background, Allied
is well positioned for tomorrows energy
requirements.
AMNI INTERNATIONAL
PETROLEUM DEVELOPMENT
COMPANY LIMITED
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DUBRI OIL COMPANY LIMITED

(DUBRI)
Dubri is Nigerias first indigenous petroleum
producing company, operating OML 96. Oil
production from the first field, Gilli-Gilli,
commenced on 17th August, 1987, at a modest
800 bopd, on the assignment of the Oil Mining
Lease No.96 by Phillips Oil Company
Limited. The first private and indigenous
exploration well in the country was spudded
by Dubri in July 1991. This led to the
discovery of the Ovia field which was put on
stream in 1995.
Dubri currently produces 1000 bopd from
Gilli-Gilli field, which is in the Northern Niger
depobelt, approximately 45 km Southwest of
Benin City. The crude produced is barged to
Chevrons Escravos terminal. Total production
over the past six years is just under 2 million
barrels.
EXPRESS PETROLEUM & GAS

COMPANY LIMITED
Express Petroleum & Gas Company Limited
(Express), an indigenous company, was
founded in 1990 with the aim to explore,
develop and produce oil and gas in Nigeria.
The company was awarded a discretionary
licence, OPL 74, in September of the same
year by the Ministry of Petroleum and Natural
Resources.
In June 1991, Express assigned a 2.5% interest
to Camac International Nigeria Limited
(Camac) and a 40% interest to Conoco Energy
Nigeria Limited (Conoco), a subsidiary of
Dupont Company of the USA and appointed
Conoco as a technical advisor to the license.
The partnership undertook an aggressive
programme to acquire, process, and interpret
BACK
some 2500 kilometres of 2-D seismic data

covering the entire licence and some adjoining
areas, identified prospects, initiated the drilling
campaign and discovered the Ukpokiti Field
from the first well in late 1992.
Two additional wells were drilled discovering
hydrocarbons in the Kunza prospect. The
partners have acquired some 150 square
kilometres of 3-D seismic data covering the
Ukpokiti and Kunza areas in the Northern part
of OPL 74 to further appraise the discoveries.
By early 1995 the appraisal result showed that
the only economical method of developing the
Ukpokiti reserves was through a leased,
Floating, Storage, and Offtake Option (FPSO)
equipped with all the crude oil processing,
handling, and metering facilities including
water injection. A final decision to develop the
field was taken in 1996 after Nigerian
governments approval of its development
plan and proposal to convert the license to an
OML were obtained. The licence is now
referred to as OML 108.
The engineering contract was awarded to
Mustang Engineering of Houston, Texas in
March of 1996 along with the procurement of
a tanker Independence. The tanker,
converted to an FPSO in Spain; arrived in
Nigeria last June.
Drilling of two development wells and tyingin of two existing wells were also done early
1997. Production from the field started in July
while the first cargo of one million barrels was
exported in September.
GENERAL OIL LIMITED

General Oil Limited was established in 1981
to participate in the indigenisation of the
petroleum products marketing in Nigeria.
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The company rapidly grew to become the largest
privately-owned Indigenous Petroleum Marketing
Company amongst more than five hundred (500)
other marketers. The company presently operates
from six (6) regions of the country, with over forty
(40) service stations nationwide. General Oil
Limited has today over three hundred (300)
industrial customers, many of whom are blue chip
companies.
As a result of the expanding nature of General Oil
activities in the downstream sector, it floated a
Lubricants Department charged with the
responsibility of manufacturing and sale of
Lubricants products. The company plans to
establish, in the nearest future an LPG Plant to
help ensure a wider distribution of the product
nationwide as well as secure a fair share of the
rapidly expanding Nigerian domestic gas market.
In 1991, General Oil Limited became involved in
the upstream sector when it bid for and was
awarded OPL 304 located onshore in the
Benin Basin. Since then, the Company has
pursued a systematic geoscientific evaluation
of the block and investigations have so far
revealed potential hydrocarbon accumulations
in three (3) areas of the lease.
MONCRIEF OIL INTERNATIONAL

LIMITED
Moncriefs core business of Oil and Gas
exploration and exploitation began in October
1991 when it was allocated OPL 471 by the
Department of Petroleum Resources (DPR) on
a sole risk basis.
OPL 471 is situated in the Western offshore
Niger-Delta in a water depth of 20 - 70 metres
and occupies an area of 1,365 sq. Km, lies
immediately to the South of some important
Texaco oil fields, and also bounded to the
South-East by some Oil Fields being operated by
Texaco.
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Moncrief is a subsidiary of the Okada group of

Companies and has access to services such as
maritime facilities and investment capital
offered by other members of the group.
Two sets of 2-D seismic data have been
acquired over the block. The first 1840 km. of
2-D data was acquired in 1974 by SSL for
NNPC/Texaco joint venture and the second set
of 1741 km of high quality 2-D seismic data
was acquired in 1992 by GECO PRAKLA for
Moncrief. 420 km of the old SSL survey were
enhanced through scanning and migration that
was carried out by SPECTRUM on behalf of
Moncrief. The two sets of surveys were each
acquired on approximately 2x2 km grid which
together provides a coverage of 1km x 1km
over most of the block.
Detailed interpretation for structural traps and
hydrocarbon possibilities have been carried
out and some seven structural fault closures
associated with a regional antithetic fault and
leads have been identified. These structural
traps and leads have confirmed the
hydrocarbon prospectivity of the block.
Moncrief intends to further explore the block
by carrying out test drilling on the best
structures after re-evaluating the initial
interpretation for a reconfirmation of the oil
and gas potentials therein. The Pennington
terminal of Texaco is located within the block
and is only 6km from the principal known
prospect.
ORIENTAL ENERGY RESOURCES

LIMITED
Oriental Energy Resources is an E & P oil
company based in the Federal Republic of
Nigeria, West Africa.
Oriental Energy is the operator of block OPL224 situated in the extreme South Eastern part of
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the offshore Niger Delta. Water depth in the
block ranges from 65 feet to 300 feet. It has an
area of about 310sqkm (76,601acres).
Seven wells have been drilled in the concession.

The seismic information reveals several new
prospects which are yet to be tested.
The block is bounded on the North by OPL98, on the West by OML-102 and OML-67
and on the North and South by the
international borders of the Cameroun and
Equitorial Guinea.
PGS EXPLORATION NIGERIA

LIMITED
Oriental Energy Resources Limited assigned

2.5% interest to Camas (Nigeria) Limited and
40% interest to Dupep E&P 13, Netherlands in
June 1991.
Under the terms of the assignment, Dupep is
required to instigate a technology transfer to
Oriental in line with the objective of the
indigenisation programme initiated by the
Federal Government of Nigeria.
Oriental commenced exploration activities in
1991 by acquiring over 1000km of 2D
Seismic. In 1992, an exploratory well was
drilled to test the central portion of the block.
The second well was drilled in 1993.
PEAK PETROLEUM INDUSTRIES

NIGERIA LIMITED
Peak Petroleum was incorporated to take
advantage of the Nigerian governments
invitation in 1990 to intensify petroleum
exploration in Nigerias major Sedimentary
basins including the open acreage in the well
explored Niger Delta.
Peak Petroleum is the indigenous operator of
OPL 460, located in the offshore continental shelf
of Nigerias Niger Delta. The concession was
awarded to Peak Petroleum in January, 1993.
The companys mission is to work and realise, as
quickly as possible, the petroleum potentials of
OPL 460 and where possible, to diversify into
other sectors of the Petroleum Industry.
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PGS Exploration Nigeria Ltd, a subsidiary of

Petroleum Geo-Services, is a technologically
focused oilfield service company that acquires,
processes, manages and markets seismic data
used by oil and gas companies to explore for
new reserves, develop
existing reservoirs and oil and gas fields. PGS
Exploration Nigeria Ltd has forged an
alliance with Integrated Data Services Limited
((IDSL), a subsidiary of the Nigerian National
Petroleum Corporation (NNPC). IDSL has
technical expertise in land seismic acquisition
and data processing. Through a Joint
Operating Agreement, PGS is able to draw on
local expertise through an existing
infrastructure with the objective of providing a
locally tailored service with PGS global
standards. The aim is for the alliance to
become the leading service provider in Nigeria
and through the transfer of technology and
expertise, enable IDSL to develop a high
degree of technical independence.
PGS also provides floating production systems,
data management solutions, 4D reservoir
monitoring and characterisation studies and other
specialised geophysical services. PGS operates
12 advanced 3D marine seismic crews, two
ocean bottom seismic crews and two reservoir
crews with full data processing capabilities
onboard each master vessel.
The Federal Government of Nigeria, represented
by the Ministry of Petroleum Resources, has
signed an exclusive agreement with the PGS-
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IDSL alliance to acquire non-exclusive 3D
seismic data over deepwater blocks 242-245,
247-250 and 312-315. In partnership with the
Ministry of Petroleum Resources, the objective is
to acquire and process the data prior to new
license awards in the deep water, as the new 3D
data will enhance competitive bidding for the
open blocks among investors. The entire 3D
program will be funded, acquired, processed and
stored by the PGS-IDSL alliance.
YINKA FOLAWIYO PETROLEUM

COMPANY LIMITED
Founded in 1991, Yinka Folawiyo Petroleum
Company Limited was one of the first private
indigenous oil prospecting companies to take
up the challenge of private-sector participation
in the Nigerian oil sector.
In June 1991, in the bidding round for the
countrys deepwater acreage, the company was
allocated the high risk Benin Basin area,
bounded on the East by the Okitipupa High in
Ondo State of Nigeria; West by Cotonou,
Benin; and Lome, Togo; South by the Atlantic
Ocean; and North by the North African
Massif. The basin is considered high risk
because it is a cretaceous region older than the
Niger Delta.
Undaunted, Yinka Folawiyo Petroleum, in
conjunction with its technical partners, Liberty
Technical Services Limited, a subsidiary of
Abacan Resource Corporation of Calgary,
Canada, began a systematic and meticulous
exploitation of the Benin Basin area. This
involved, the acquisition between, 1993 and
1995, of two seismic programmes totalling
1,600 kilometres.
Prospecting Licence (OPL) 309. The discovery

marks the first new oil in the Benin Basin since the
Seme Field and the first oil on the Nigerian side of
the offshore Basin. Aje #1 tested at a gross
cumulative flow rate of 5,500 bbls/d of oil and
condensate with associated gas.
A second well, Aje #2, also located on OPL 309
was tested in March of 1997 at a gross
cumulative flow rate of 8,800 bbls/d. The test
confirms a large accumulation of oil and gas
on OPL 309.
The company, together with its technical
partners, is in the process of drilling additional
development wells and have contracted a jackup rig to drill the other structures which are
adjacent to the Aje #1 and Aje #2 wells.
Altogether, OPL 309 covers an area of
413,000 acres and extends from the coast into
water with depths up to 1,500 metres.
In just its 6th year of operation, the Yinka
Folawiyo Petroleum Company has succeeded
where others have feared to tread. The unique
discovery of oil in OPL 309 marks a new
chapter in Nigerias 60-year-old hydrocarbon
exploitation drive. It has the potential of
opening up a whole new area for oil and gas
prospecting away from the familiar Niger
Delta region. It definitely represents a radical
change in the traditional geological projections of
the Benin Basin.
The efforts paid off dramatically with the

Companys first oil discovery in the Fall of 1996
with Aje #1, located offshore Badagry on Oil
BACK
CONTENTS
CHAPTER 6: The Oilfield Service Industry

HISTORY AND SERVICES
Nigerias indigenous Technical Service
Industry evolved during the post Nigerian civil
war period (from 1970).
l
Period: Before 1970: Very few Nigerian

technical professionals were employed in
the Industry. Most of the highly skilled
people running the industry at the time
were imported. However, the situation
changed significantly by the end of the
civil war, during which most of these
professionals were forced to leave the
country and were reluctant to return.
Period: 1970 ~ 1980: The first Nigerian
Engineers and Technicians were employed
by multi-national Technical service
companies in field operating positions,
exposed to similar responsibilities and
training as their foreign counterparts.
An internal testing unit operated by one of PETANs members
engineers began to rise and operate/

function as Field Managers in the various
multi-national technical service
organisations.
l
Period: 1989 ~ 1995: The first Nigerian

owned and managed Technical Service
companies emerge from the oil industry
slump of the late eighties. Again, the
pioneers of this effort are mostly first and
second-generation Nigerian Oil Industry
technical professionals.
Period: 1995 ~ 1997: Nigerian Oilfield

Technical service companies, employing
Nigerian engineers, begin to lead the
oilfield industry in innovation and the
application of technology.
Period: 1980 ~ 1988: Nigerian nationals

employed in the seventies as field
For Example:
l A Nigerian Technical Service Company
performed the first deep offshore
directional drilling ever done on an oil
well in Nigeria. (Company: SNEPCO;
Service Company: DrillogPetrodynamics).
l
Nigerias oilfield service companies provide services that

include running tests on the crude oils of Nigeria
CONTENTS
The first and only successful coiled tubing

deployed Production logging operation on
a short radius horizontal well in Africa and
one of the first in the world, was
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performed by a Nigerian Technical Service
Company (Oil company: Ashland; Service
Company: Oildata Wireline Services).
l
A Nigerian Technical Service Company

successfully achieved the first drillcutting-reinjection project trial performed
in Africa. (Oil Company: Shell Petroleum
Development Company; Service
Company: SOWSCO Well Services/
Petroscan)
A Nigerian Technical Service Company
successfully had the first Full Hydraulic
Main and Back Drive Decanter
Centrifuges manufactured on one skid and
deployed in Nigeria for Drilling Mud
Solids Control/ Barite recovery. (Oil
Company: Shell Petroleum, Development
Company; Service Company: Ariboil
Company Limited).
The first company to design and
manufacture wellhead and Production
Control Systems in Nigeria, is a Nigerian
Technical Service Company (Oil
Company: Mobil Producing; Service
Company: Weltek Limited).
Nigerian Indigenous Technical service

companies have consistently matched and
exceeded the performance of multi-national oil
service companies, in the application of
ANA Industries Milling Plant in Port Harcourt, Nigeria
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innovation, new technology and quality of service.

These companies now provide technical services
in over twenty-six distinct technical service
categories in the oil industry. These categories
include:
l
Casing and Tubing Services & Tools
Cased Hole Electric-line logging
Directional drilling and borehole surveys
Drilling and Workover
Fluid filtration, Mud solids control
Laboratory Services
Mechanical Wireline services
Mud logging
Petrophysical and Reservoir data Services
Coiled Tubing and electric line production

logging
Rigless Workover Services
Wellhead Maintenance Services
Well Completion services
Measurement While Drilling (MWD)
Casing and high pressure pumping
Drilling and Petroleum engineering

consultancy services
Fishing and tool rentals
Oil field waste management
Manufacture of well head and flow station
Ariboil Company Limited 16 Full Hydraulic

Drive Decanter Centrifuges
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control systems
l
Mechanical Wireline using lift barges
Mud supply and engineering services
Piling services
PVT Analysis
Tubing Conveyed Perforating (TCP)
Surface and Bottom Hole Sampling
Well Production testing services
PETROLEUM TECHNOLOGY
ASSOCIATION OF NIGERIA
(PETAN)
Petroleum Technology Association of Nigeria
(PETAN) is an organisation whose members
are independent, professional, Nigerian Oil
Service companies, operating mainly in the
upstream, Technical service sector of the
Nigerian oil industry. PETAN companies
currently offer services in all the categories
listed in the section above.
Commitment and responsibilities of PETAN
l
Strive for the unfettered development of

the oil industry through emphasis on
professionalism, service quality, fair
competition and lesser restrictive
regulation of the industry.
Study and propose industry-wide common

technical, contracting and service quality
standards.
Invest in technical education and retraining

programs targeted at specific technical
requirements of the industry.
Improve the working relationship between

key industry operators through the
dissemination of technical information,
lower operating costs, greater innovation
and service quality etc.
Existing conditions and potentials in the

Nigerian Oil Industry
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The Nigerian oil industry, just like other

oil industries worldwide is operated and
managed by highly skilled professionals.
Operations in the oil industry involve huge

amounts of investment in Technology and
assets, some of which rub off on the rest
of the economy.
Proven and potential reserves of oil and

gas are extensive and operating costs are
one of the lowest in the world, thus
creating conditions for future growth.
The Nigerian oil service industry is today

very competitive and offers value for
money because of the quality and variety
of technical services offered by indigenous
companies.
Although there are several Nigerian oilfield

service companies, some of which are listed
below, PETAN comprises 21 member
companies with different categories of
technical services in the oil industry.
ARIBOIL COMPANY LIMITED

Ariboil Company Limited experience in the
provision, rental and maintenance of High
Speed Centrifuges for Brines clarification,
Decanter Centrifuges for Mud Solids Control,
Primary/Drying Shakers, CEC Flocculation
Units and Auger Conveyors, started in
Ariboil Company Limited LCM-2D

Primary/Drying Linear Motion Shaker
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Nigerias Oilfield Industry in1988. By 1991,

Ariboil had on rental nineteen (19) high speed
and decanter centrifuges on twelve (12)
Drilling and Workover rigs. These included
three land, three swamp and six offshore rigs
in Nigerias eastern and western areas of
operations. Ariboil is 100% Nigerian owned.
Our equipment manufacturers have included AlfaLaval, Hutchison-Hayes and Brandt (A
Tuboscope Company). Brandt is currently the
manufacturer of most equipment in our rental
fleet.
Ariboils clients have included Shell, Mobil,
Chevron, Elf, Santa Fe Drilling, Mallard Bay
Drilling, Sedco Forex and Forasol Drilling.
CISCON NIGERIA LIMITED

Ciscon Nigeria Limited was formally
established in 1987. It is a 100% Nigerian
owned company and with Ciscon Incorporated
of Houston, Texas, USA, provide a wide range of
technica1 services and products to the Nigerian
oil and gas industry.
From our 7 acres purpose-built head office
complex, Ciscons Nigerian operations in Port
Harcourt and Warri - Nigerias twin oil cities are co-ordinated and managed by a technically
competent team of experts to ensure rapid
response to Clients needs.
CISCON Machine Shop in Port Harcourt, Nigeria
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CISCON Bucking Unit in Port Harcourt, Nigeria Base
Our watchword in Ciscon has remained focusing

on excellence and this has made us a key player
in the service sector of the Nigerian oil and gas
industry.
The basic principle on which Ciscon is built is
innovation and teamwork. Innovation that
sharpens Ciscons best business strategies in
the delivery of technical services and products
at competitive costs. The consistent growth of
our company is attributable to teamwork,
continuous research and our ability to listen to
our Clients. These enable us provide
customised and improved service delivery to
our clients. This partnering approach with
clients further enhances our ability to provide
enduring solutions to our Clients needs the
first time and always. We have over l15 welltrained staff that includes 5 expatriates.
Dynamic hands-on entrepreneurial
management style in a motivating work
environment is the hallmark of our success.
In Ciscon our health, safety and environment
policy is underpinned by our pre-emptive and
proactive planning. Our operations take
cognisance of the concerns of host
communities where we operate. Minimal
impact on the environment, safety, health and
security of all stakeholders in the Nigerian oi1
and gas industry never cease to be of concern
to us.
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Our increased work profile within the Nigerian oil
and gas industry is a result of our commitment to
these high standards. This ever-improving safety
record has earned us the trust and confidence of
our clients and in return, we have given them
handsome dividends in our various cost-saving
measures.
Nigerian oil field. She has worked for most of the

major oil companies and is currently working in
the Industry.
DRILLOG PETRO-DYNAMICS
Drillog Petro-Dynamics Ltd, was
incorporated in 1990 with the objective to
showcase Nigerias indigenous expertise in the
provision and development of petroleum
technology with particular focus on the
provision of high quality drilling technology
services to the Nigerian Oil Industry.
Services provided by Drillog Petro-Dynamics
Ltd have progressed from Borehole Survey
services in 1990 to the addition of Direction
Drilling, conventional and steerable in 1991
and Measurement while Drilling Services in
1997.
The company provides the full range of its
services to Shell, Chevron, Mobil etc. at top
industry standards.
Drillog-Petrodynamics tools repair bay in

Port Harcourt, Nigeria Base
LONESTAR DRILLING
The first Nigerian company to own a drilling
rig. The picture below shows one of their
drilling rigs that has drilled many wells in the
BACK
A Lonestar drilling rig
SOWSCO WELLS (NIGERIA)

SERVICES
Sowsco Well Services (Nigeria) Limited was
incorporated in 1993 to provide services in the
oil & gas industry in upstream development
drilling and production in areas of cementing,
stimulation, brine filtration, wellhead
maintenance/repairs and downstream in areas
of turn around maintenance activities of
refinery, Petrochemical and fertiliser plants.
Our clientele to date include among others,
Chevron, Shell, NNPC, NAFCON, Mobil,
Addax etc.
We strive to become the premier oil service
company in Nigeria, render optimum returns
to shareholders and provide quality service to
our customers.
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WELTEK LIMITED
Weltek limited was incorporated in 1986, to
provide a unique total quality and inexpensive
concept of engineering and construction. Over
the years, the company has executed several
projects for numerous clients, which include
Mobil, Chevron, Texaco, Shell, ELF, Nigerian
Petroleum Development Company (NPDC ),
Nigerian Petrochemical and Refinery
Companies, SAIPEM, NISSCO, SOIMI to
mention just a few. Weltek provides turnkey
engineering, procurement and construction of
complete oil and gas production facilities from
wellhead to export pipeline.
SOWSCO Well Ser vices mobile dual high pressure

pumps in Port Harcourt, Nigeria Base
NNPC flowstation programmable logic

control system for Oziemgbe flowstation
Today, Weltek is committed to helping not

only the oil and gas industry, but electrical and
water utilities industry, manufacturing, and
any process industry save money in
development, and also operate more profitably
through improved engineering and
construction. By working together with us,
you can change the face of turnkey project
execution. Give us a chance and start to profit
from our experience.
One of the equipment owned by a PETAN member
Welteks process skids in NNPC Oziemgbe flowstation
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MEMBER COMPANIES OF THE PETROLEUM TECHNOLOGY ASSOCIATION

OF NIGERIA
COMPANY NAME
CATEGORY OF SERVICE
CONTACT PERSON
CONTACT ADDRESS
TEL/FAX/ E-MAIL
Ana Industries Limited
- Mud Supply & Engineering

- Drilling fluid Oil service
- Solid mineral processing services
Mr. Alex Ajuebon
Reclamation Road,
P. O. Box 7884,
Port Harcourt.
Tel: (234)-84-230159, 331811

Fax: (234)-84-230159
(234)-82-440136
Ariboil Company Limited
- Fluids Filtration & Drilling Mud

Solids Control;
- Drilling Waste Management;
- Drilling & Petr, Eng. Consultancy
Mr. Stephen O. Aribeana
Plot 219, Trans Amadi

Ind. Layout,
P. O. Box 7172,
Port Harcourt.
Tel: (234)-84-238568, 238628

(234)-90-501264
Fax: (234)-84-238568
ariboil@micro.com.ng
B.G. Technical Limited
- Corrosion Monitoring and Control

Services
- CP Installation and Monitoring
- Pigging Supplies and Services
- Pipeline Surveys
Mr. Chinedu Maduakoh
8, 29th Street,
DDPA (Bendel Estate)
Ugborikoko, Effurun,
P. O. Box 1920, Warri
Tel: (234)-84-236774
Tel/Fax: (234)-53-254492
bgt@warri.rcl.nig.com
Ciscon Nigeria Limited
- Casing & Tubing Services & Tools;

- Fishing & Tool Rentals;
- Eng. & Maintenance Services
(Compressors, Pumps, etc.);
- Well Completion Services.
Mr. Shawley Coker
Km 14, Aba/Port
Harcourt Expressway,
Port Harcourt.
Tel: (234)-84-612081, 612082

612083, 612023, 612273
(243)-53-253784
Fax: (234)-84-613024
(234)-84-612080
ciscon@alpha.linkserve.com
Drillog Petrodynamics Ltd.
- Directional Drilling & Borehole

Surveys;
- Measurement While Drilling (MWD).
(Ugo) O. R. Ekezie
Plot C, Trans Amadi

Ind. Layout,
P.M.B. 047
Port Harcourt.
Tel: (234)-84-233719, 239668,

237190, 237237
Fax: (234)-84-232350
drillpet@ph.rcl.nig.com
Dubi Nigeria Co. Ltd.
- Fluids Filtration & Drilling Mud

Solids Control;
- Drilling Waste Management;
Mr. Ifeanyi Ogbechie
Km 14, Aba/Port Harcourt

Expressway,
P. O. Box 8195
Port Harcourt.
Tel: (234)-84-612525, 612594

(234)-53-253268
(234)-1-4973171
Fax: (234)-84-612525, 612594
ify@phca.linkserve.com
Emval / Kanuco Nigeria

Limited.
- Cementing & High Pressure Pumping;

- Mechanical Wireline/Completions;
- Drilling & Petro. Eng. Consultancy
Mr. Uche Obidi
5 Waico Road,
P. O. Box 852,
Warri.
Tel: (234)-53-250367
(234)-82-440027
(234)-53-254193 Ext52224
Fax: (234)-53-251042
Kasolute Nigeria Limited
- Directional Drilling & Borehole

Surveys;
- Measurement While Drilling (MWD)
Mr. Telle Quadry
Block B, Plot A-1, Trans

Amadi Industrial Layout,
Port Harcourt.
Tel: (234)-84-239605, 230166

(234)-53-250869
Fax: (234)-84-230167
kasolute@phca.linkserve.com
Lonestar Nigeria Limited
- Drilling / Workover
- Drilling & Petro. Eng. Consultancy
Chief H. Idisi
37, Chechester Road,

P. M. B 4104, Sapele
Tel: (234)-53-254193 Ext. 50248,

(234)-84-612258
(234)-90-501170
Fax: (234)-1-2617483
(234)-53-251320
Oildata Wireline Services

Limited
- Cased Hole Electric-Line Logging;

- Petrophysical & Reservoir Data
Services.;
- Tubing Conveyed Perforating
(TCP-DST) Services;
- Production Logging Services
- Horizontal logging Services
Mr. Emeka Ene
Plot 282,Trans Amadi Ind.

Layout,
Port Harcourt.
Tel: (234)-84-236673
239398, 231077
Fax: (234)-84-236673
(234)-1-2692072
oildata@infoweb.abs.net
oildata@micro.com.ng
Oilscan Limited
- Cased Hole Electric-Line Logging;

- T ubing Conveyed Perforating (TCP)
Services.
Mr. Joe Egwele
Mile 9, Airport Road,

Rumuodomanya,
P. O. Box 5325,
Port Harcourt.
Tel: (234)-84-237024
Fax: (234)-84-237024
oilscan@alpha.linkserve.com
Oiltest Services Limited.
- Laboratory Services; - Mechanical

Wireline/ Completions; - Production
Logging Services; - PVT Services;
- Surface & Bottom Hole Sampling;
- Well Analysis; - Well Prod. Testing.
Dr. T revor Ajayi

Industrial Layout,
P.M.B. 5135,
Port Harcourt.
Tel: (234)-84-230931, 331135

Fax: (234)-84-236942, 239230
Tel: (234)-53-250385
Fax: (234)-53-254673
oiltestng@hyperia.com
Reservoir Fluids Lab. Inc.

(Sart Nigeria Limited)
- Laboratory Services;
- PVT Services.
Mr. Bert Douglas
Reclamation Road,
P.O.Box 4347,
Port Harcourt.
Tel: (234)-84-236645, 230709

Fax: (234)-84-236645
rfl@phca.linkserve.com
Sego Oilfield Services
- Wireline (Slickline)
- Wellhead Maintenance
- Oilfield Manpower supply
Mr. Godwin Ogbodu
East-West Road,
(Rumukwurushi Junction)
P.M.B. 052,
Port Harcourt.
Tel: (234)-84-335702, 330983

(234)-84-234798
(234)-53-250726, 250769
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NEXT PAGE

COMPANY NAME
CATEGORY OF SERVICE
CONTACT PERSON
CONTACT ADDRESS TEL/FAX/ E-MAIL
SOWSCO Well Services

Limited
- Cementing & High Pressure Pumping;

- Wellhead Maintenance Services.
- Brine Filtration
- Pipeline pumping services
Mr. Sam Adegboyega
Plot 212, T rans Amadi

Industrial Layout,
P. O. Box 6726,
Port Harcourt.
Tel: (234)-84-238581, 236774

Fax: (234)-84-238581
sowsco@ph.rcl.nig.com
Specialty Drilling Fluids Ltd
- Drill-cutting Re-Injection Services

- Waste Management Services
Mr. Tony Eze
Plot 184C, Trans Amadi

Industrial Layout,
P. O. Box 3807,
Port Harcourt.
Tel: (234)-84-235915,
(234)-1-2614001, 2619722
Fax: (234)-84-235915
(234)-1-261-2383
charngr@infoweb.abs.net
Tecon Oil Services Limited
- Oilwell Fishing
- Completion Tools and Services
- Engineering Maintenance
Mr. Cassmir Maduafokwa
299B Akin Olugbade St.

P. O. Box 74258,
Victoria Island, Lagos
Tel: (234)-1-261-8371,
(234)-53-255831
(234)-84-236846, 233488
Fax: (234)-236846
teconlos@infoweb.abs.net
Weafri Well Services

Company Limited
- Cementing & High Pressure Pumping
Mr. Cletus Onyekwere
58, Airport Road,

P. O. Box 58, Warri.
Tel: (234)-53-251028,
253673, (234)-84-232249
(234)-90-504751
Fax: (234)-53-253673
(234)-82-440240
Weltek Limited
- Manufacture Of WellHead /
Flow Station / Compressor
Fail-Safe Control Panels;
- Production Maintenance
Services.
- Engineering Design and Project
Management.
- Construction, Installation,
Commissioning and Maintenance.
- Electrical and Instrumentation
- PLC and SCADA Systems
Integration
- Platform and Wellhead Control
Panels manufacturing
- LV,MV and HV electrical works.
Mr. Pedro Egbe
Plot 35, Trans Amadi,

P. O. Box 6585,
Port Harcourt.
Tel: (234)-84-237902, 237903,

237904, 231435
Fax: (234)-84-237904
welteklimited@compuserve.com
Wog Allied Services Nigeria

Limited
- Directional Drilling Services

- Oilwell Surveys
- Instrument and Tool Rentals
Chief Gabriel S. Ofoma
54B Airport Road,

P. M. B. 1049,
Effurun, Warri.
Tel: (234)-1-493-7136
(234)-53-252630, 250478,
252892
(234)-84-330347
Fax: (234)-53-252630,
wog@warri.rcl.nig.com
Zukus Industries Ltd.
- High Pressure Pumping Services;

- Well-testing Oilfield Services
- Marine Services
- Environmental Services
- Corrosion Services
Chief Azuka Uzor
Evoc Yard,
Off Enerhen Road,
P. O Box 1192, Warri,
Tel: (234)-53-250880
Fax: (234)-53-252392, 253354
zukus@linkserve.com
Contraco (Nig.) Limited
- Consulting, Agency, supplies

and shipping services
Ayo Oduntan MD/CEO
Suite 8D Princes Court,

Ahmed Onibudo Street,
Tel.: (234)-1-2623536
Tel/Fax: (234)-1-2622285
Branch Tel: (234)-1-7748001
E-mail: contracohq@aol.com
contraship@aol.com
BACK
NEXT PAGE
OTHER TECHNICAL OILFIELD SERVICE COMPANIES

COMPANY NAME
CATEGORY OF SERVICE
CONTACT PERSON
CONTACT ADDRESS
TEL/FAX/ E-MAIL
Empromex Limited
- Wireline & Wellhead Services

- Offshore procurement & supplies
- Electrical projects, Turbo machinery
and Power Generator
- General Maintenance; Pipe work,
Insulation job, sandblasting and
painting
- Civul Engineering Works
- Solid mineral processing services
Mallam Ibrahim Aliyu

Mr. M. Gidado Bakari
Mr. Arnold R. Southard
Plot 182, Rumuogba Estate

P.O. Box 13799
Rumuogba
Port Harcourt
Tel: (234)-84-571067
(234)-09-3148538, 2345227-8
(234)-53-255474
(234)-090-804047, 405977
Fax:(234)-53-256493
(234)-09-2359052
m.bakari@micr.com.ng
Integrated Applications
Engineering Nig. Ltd (IAE)
- Exploration Services
- Seismic Acquisition & Processing
Drilling services,
- Wireline logging,
- Mud logging
- Well Testing
- Pipeline Engineering design &
construction,
- Equipment supply
Mr. Dave Howe
35A, Adetokunbo
Ademola Street,
Victoria Island, Lagos.
Tel: (234)-1-262-1327, 262-1328

iae nig@beta.linkserve.com
International Trading &

Logistics Coy. Ltd (Intralog)
- Procurement, Installation, Servicing/

Maintenance of pumps,
John crane/ flexibox
- Barton control and measuring
instruments and equipment
- Engineering construction services
Mr. Ralph Gbobo

Mr. Ben Olughor
Plot 330, Akhigbe Drive,

Trans Amadi Industrial
Layout,
Port Harcourt.
Tel: (234)-84-239274,232840
(234)-1-4703487, 7740965
Fax: (234)-84-239274
(234)-1-2645211
intralog@compuserve.com
Multinational Expertise Ltd.
- Petroleum, Energy & Management

Consultancy
Chief Aret Adams
6, Sam Adegite Close

Of f Amodu Ojikutu Street
PO Box 73945
Tel: (234)-1-2616771, 2616539

610396
Fax: (234)-0-2613233
mel@infoweb.abs.net
Pan-African Intl. Group

(PAI Group)
- Engineering construction services

- Electrical Instrumentation services
- Drilling services
Mr. Winifred Edeimu

Mr. Dave Bott
Plot 113, Trans Amadi Ind. Tel: (234)-84- 236799

Layout,
(234)-1-2624904 2617767
Port Harcourt.
Fax: (234)-84-236799
(234)-1-2624477
pailag@nova.net.ng
Pelican Petro-services Ltd.
- Drilling Waste Mgt. & cutting

re-injection services
- Supply of Oilfield Chemicals
- Oilfield support services
- Storage tank cleaning and chemical
flushing of pipelines.
Mr. Segun Faleke

Mr. Lanre Adesanya

Industrial Layout,
Remm Yard,
P. M.B 076, Port Harcourt.
Tel: (234)-84-232422
Quad Mud logging Coy.

(Nig.) Ltd
- Core Slabbing & Resination

- Core Description & Biostratigraphy
- Core stabilization
- Production/ Chemical Engineering
services
- Well site Core Handling
Mr. Damola F. Abolade

Mr. Kehinde I. Ladapo
Suite 802, Western House,

8/10 Broad Street,
P. O. Box 54452, Falomo,
Ikoyi, Lagos.
Tel: (234)-1-262-4795, 263-2852

Fax: (234)-263-4517
quadmud@beta.linkserve.com
quadpetrol@aol.com
BACK
CONTENTS
CHAPTER 7: The Mining (Minerals) Industry

SOLID MINERALS MINING HISTORY
Organised mining in Nigeria was initiated
between 1902 and 1923 following the
commissioning in 1903/04 of the Mineral
Surveys of the Southern and Northern
Protectorates by the then Secretary of State for
the Colonies. Deposits of tin and its associated
minerals, columbite and tantalite had been
located in the Jos Plateau, and the Royal Niger
Company commenced mining operations in
1905. Gold mining followed in 1914 having
been discovered in parts of present day Kogi
and Niger States.
Exploration for coal dates back to 1906, but
production did not commence until 1916 in
parts of present day Enugu State. By 1919, the
Geological Survey of Nigeria was established
as a department to take over and continue the
work of the survey teams. The Minerals
Ordinance and the Coal Ordinance No. 29 of
1950 provided the legal basis for the
development of the solid minerals industry.
Today, all mineral resources other than mineral
oils fall under the jurisdiction of the Ministry
of Solid Minerals Development (MSMD).
Government owned companies as well as
private ones with some partnership or joint
venture projects carry out mining. For example,

the Nigerian Iron Ore Mining Company mines
and processes iron ore, the Nigerian Mining
Corporation (NMC) is involved in the mining of
gold, kaolin, tin, barite, salt, etc. while the
Nigerian Coal Corporation (NCC) mines coal.
However, Government, in line with the new policy
on Solid minerals has begun to disengage from
direct exploitation of minerals.
MINERAL OCCURRENCES
Metallogenic studies employed to identify the
areas or volumes of rock in which particular
types of minerals deposits may be located
within Nigeria have identified the following:
(a) Metallogenic Epochs and Province of
metallic minerals
(b) Metallogenic Epochs and Provinces
relating to non-metallic substances.
Interestingly, the Benue Trough is the site for a
number of the metallogenic provinces or
mineral districts. These include:
a. The Isiagu-Abakaliki-Zurat Lead-Zinc
districts
b. The Akwana-Arufu fluorite district
c. The Azura, Ibi and Dumgal barite district
and
d. The Benue Trough Salt brine district
Many mineral deposits in Nigeria conform to
classic ore deposit models.
MINERAL PRODUCTION
The rivers carry significant volumes of sand as

they erode the land. Sand-dredging is one way
of getting it back, but this is time at a price.
A dredger on site in a coastal town in the delta
CONTENTS
Reports from the Nigerian Minerals Appraisal

and Monetisation Programme (NIMAMOP)
show that over the last 20years, the local solid
mineral production for Nigerian consumption
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MINISTRY OF SOLID MINERALS DEVELOPMENT

ORGANISATION CHART
MINISTRY OF SOLID
MINERALS DEVELOPMENT
MINISTER
INFORMATION UNIT
AUDIT UNIT
TECHNICAL ASSISTANT
TECHNICAL ASSISTANT
MINISTRY SECRETARIAT
PERMANENT SECRETARY
FINANCE AND SUPPLIES
MINES DEPARTMENT
ADMINISTRATION
DIRECTOR
DIRECTOR
DIRECTOR
PLANNING, RESEARCH
AND STATISTICS
DIRECTOR
PARASTATALS
BACK
NIGERIAN MINING
CORPORATION
NIGERIAN COAL
CORPORATION
REGIONAL
GEOLOGY
MINERAL
INVESTMENT
APPLIED GEOLOGY AND

DOCUMENTARY
CHIEFEXECUTIVE
CHIEFEXECUTIVE
DIRECTOR
DIRECTOR
DIRECTOR
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due to a lack of means to obtain proper returns

from the thousands of miners and the many small
scale operations throughout the country.
Awe formation and salt-bearing weathered sands (heaped).

Salt will be leached out of the sands in the cottage
industry set up in the town. Warm salt springs are
common features in the basin (Makurdi Basin). A seismic
anomaly has been identified in the Oku Lake area.
The Itakpe Iron Ore mine is the only large-scale

(world class) mine in Nigeria, but has been stalled
due to lack of finances to operate and due to the
lack of market infrastructure for its concentrate.
Other medium-size operations are involved in the
production of limestone or marble for cement
manufacturing. A number of granite quarries are
producing concrete and road aggregates.
The rest of the industry produces less than a few
thousand tons of ore per year of tin, tantalite,
barite, kaolin, feldspar, talc, gold, gemstone,
gypsum, phosphatic nodules and various
firesclays.
GEOLOGICAL SYNOPSIS OF
NIGERIA
Cottage industry mining of baryte veins emplaced in Awgu
shales at Aloshi on the Obi-Keana Road, Nasarawa State.
Makurdi Basin quartz veins also commonly occur.
Outcropping rocks in Nigeria show that the

bedrock geology is composed of two (2) main
groups: Basement Complex and the
Sedimentary Series.
The Basement Complex comprises:
1. The Migmatite-Gneiss Complex.
2. The Schist Belts
3. The Pan-African Granitoids
4. The Younger Granite
5. The Tertiary-Recent Volcanic Rocks
The Okaba open cast mines operated by the Nigerian Coal

Corporation. Escavators on site used for stripping
the overburden comprising loose sandstones and mudstones
has not been prolific. Most of the solid minerals

required by the chemical and pharmaceutical
industries have been imported.
Mining represent an insignificant percentage of
the gross national product (less than 0.01%) and
until recently the industry was poorly regulated
BACK
THE SEDIMENTARY SERIES

The sedimentary rocks of Nigeria were
deposited in 11 presently recognised basins
and crop out over one half of the surface area
of Nigeria. With the exception of the 2
extreme northern basins (the Sokoto and the
Chad) all the others were initiated in the late
Jurassic-Early Cretaceous and are related to
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the opening of the Gulf of Guinea. The Sokoto
and Chad Basins are part of the Illumedden
and Taodeni Basins respectively, which
outside Nigeria have histories dating back to
the Paleozoic.
Tectonically, the basins can be classified into 2
broad groups:
Marginal Sag Basins: This group, comprising
the Niger Delta and the Benin (Dahomey)
Basins were formed in response to the
tensional regime that accompanied the opening
of the Equatorial Atlantic Ocean during the
Aptian-Albian times. The marginal sag
structure is the result of the collapse of the
margin on the ocean-ward side due to
sediment loading.
Intra Continental Basins: This group
comprises all the other basins in Nigeria. But
for the Sokoto Basin, which is a simple
Interior sag basin, others have been formed
either by distension resulting in grabens
bounded by normal faults or by localised
tension caused by large-scale transcurrent
faults.
Calabar Flank.
Sedimentation was determined largely by extrabasinal tectonics, eustatic relative base level
changes and subsidence. Sediment accumulation
was greater in the Onitsha sub-basin, a pattern
which reflects differences in the extent of eustatic
sea level rise and influenced facies distribution and
the depositional characteristics of each
formational unit within the succession. Between
10-12km thick of sediments pile (determined
from gravity measurements) accumulated in the
basin, of which some 3-5km thick sediments
belong to Upper Companion-Maastrichtian ages.
Sediments within the basin show remarkable
textural and mineralogical maturity, indicating
that its source was both from previously
deposited sediments and possibly, in-situ
chemically weathered crystalline basement.
The sedimentary fills for these basins show

complete cycle development, characterised by
a basal continental facies, overlain by marine
facies and subsequently continental sediments.
Most basins show repeated cycles.
ANAMBRA BASIN
The basin comprises a shallower and much
smaller size sub-basin, the Ankpa to the north,
and a larger and deeper southern Onitsha Subbasin separated by the Nsukka High (a sub
marine basement feature).
It has a south-west platform extension, the
Benin Flank, while its south-eastern limits
may encompass the Afikpo Syncline and the
BACK
Geological map of the Anambra basin. Exploration in the

basin dates back to the early 1950s. Till date no commercial
hydrocarbons have been discovered, although there are oil
sands and some gas shows
NEXT PAGE
Regional geological cross-section: NW-SE Transect (A-A) from the Benin flank across the
Anambra-Afikpo basin to the Ikpe platform
HYDROCARBON POTENTIALS
Good prospects for hydrocarbon occurrence
probably exist, especially in post Santonian
Sediments of the basin. Early exploration
wells in the basin encountered some gas
horizons. More importantly, the presence of
bituminous sandstones unconformably
overlying pre-Senonian organic-rich Awgu/
BACK
Eze-aku Shales, and the occurrence of coal beds

in the pro-deltaic sequence of Mamu and Nsukka
Formations support further exploration efforts in
the basin.
NIGER DELTA BASIN

This basin evolved in the Tertiary following the
deposition of the Imo Shale during the
Palaeocene-transgression, and the subsequent
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NE-SW transect showing the dipwise facies succession from the Makurdi basin across the
Anambra basin to the Niger Delta (After Murat, 1972).
Cross-section shows progress southward growth of the basin from the early Cretaceous (basin inception) to present
seaward build-up of a delta complex in the

Eocene.
The tripartite division of the major lithofacies
units into the diachronous Akatamarine,
Agbada-paralic and Benin continental-fluvial
Formations is well known. From time to time
on the delta flanks, channels were cut which
were subsequently clay filled.
BACK
DEPOSITIONAL CYCLES
Major progradational sequences associated with
deltaic settings consists of numerous repetitive
cycles, each one being characterised by an
erosive surface followed by the most shallow
facies, then a deepening commonly leading to a
condensed horizon. This is usually followed by the
most shallowing sequence either prograding or
aggrading depending on several factors.
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Mapping of individual sand bodies from well data tend to reveal both strongly lobate and tabular-strike parallel geometries.
Sand bodies with more lobate geometries are confined to progradational parasequence sets, deposited in coastal regions
strongly influenced by fluvial dominated processes. sand bodies possessing a more strike parallel orientation are products
of wave and tidal dominated processes giving rise to retrogradational parasequence sets
Generally, eustatic sea level fall and/ or increased

sediment supply cause delta progradation out
onto the mud prone shelf. At such times loading
on shale platforms initiate or reactivate growth
fault movement, thus creating extra
accommodation space in the hanging wall, and a
lateral shift in the facies type across the fault is
experienced, and aggradation sets in.
Listric growth faults and their associated

structures, which form the major structural
style in the Niger Delta Basin are most
prevalent in the Agbada Formation. They tend
to die out within the Akata Shales, which are
plastically deformed in response to the
increasing overburden of paralic sediments as
well as over 3,000m of the Benin Formation.
STRUCTURAL STYLES AND DEFORMATION
BACK
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a)
The collapsed crest comprises two grabens (A and B). Graben A is further from the major fault and has its keel at a
deeper stratigraphic level than of the younger Graben B. This is characteristic of progressive slip on the major
growth fault resulting in the southward translation and burial of the older Graben A. In order to facilitate subsequent
deformation in the hanging wall, Graben B then developed in the former position of Graben A.
b)
The large crestal-collapsed zone is characterised by sub-parallel, discontinuous normal growth faults. Note that
hydrocarbons located in the footwall highs, spill through the relatively faulted relay between discontinuous faults in
such systems
The Shale forms diapiric structures with large

counter regional faults and toe thrusts in the
distal areas.
A large roll over anticline is developed on the
downthrown side of a regional south dipping
growth fault. The structural styles imposed on
the general framework becomes a function of
the interplay of depositional rate (Rd), basin
subsidence rate (RS) and sediment type.
The structural styles range from simple
rollovers, predominantly dip-closed (Type R)
to roll over dissected by faults, predominantly
fault closed (Type F) to collapsed crest
structure, dip-closed but dissected by
numerous synthesis and antithetic faults (Type
C) closely spaced down-to-basin faults on a
semi-regional flank. Stratigraphic and
combination traps play secondary roles in the
basin.
BACK
DEEP OFFSHORE
Evidences from seismic showed tremendous
sedimentary thickness and shale tectonics.
Growth faults, which constitute the havens for
hydrocarbon trapping onshore and in the shelf,
are not ubiquitous in the deep offshore. Instead
extensional and gravity sliding tectonics of the
shelf have given way to imbricate thrusting and
toe structures replete with amplitude anomalies
and sometimes complex radial faulting atop shale
structures. These structures which have been
variously identified as diapirs or compression toe
structures are potential traps for hydrocarbons
though their paragenic relationship with the
process of hydrocarbon generation and migration
are not well understood. This poses some
challenges to deep offshore exploration.
The basin has sustained production in the last
40yrs. Its deep-/ultra deep water prospects are
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looking very attractive based on present findings
and the desire of a number of majors to seek for
the new blocks put up for bidding.
DAHOMEY (BENIN) BASIN

The Dahomey (Benin) Basin forms the onshore
part of the West African peri-cratonic passive
margin basin stretching from Eastern Ghana
through Togo and Republic of Benin to the
western part of Nigeria. Sediments are of early
Cretaceous Recent in age. Up to 3,000m of
section is known to accumulate onshore within
major grabens. The section thickens markedly
towards the offshore where Tertiary depositional
styles bear striking similarities to those of the
Niger Delta Basin.
HYDROCARBON POTENTIAL
Though lacking in the intensity of exploration seen
in the Niger Delta, the Dahomey (Benin) Basin is
believed to hold good prospects for
hydrocarbons offshore. Some remarkable
hydrocarbon discoveries have been made
BACK
recently on the edge of the Continental Shelf.

However, the limiting factor is the rather
narrow nature of its Continental Shelf, in
contrast to that of the Niger Delta Basin. This
implies that further offshore exploration must
be in deep waters. The basin straddles the
Nigerian-Benin Republic border where oil is
being exploited in the Seme Fields from
Cretaceous sands.
A major discovery was made in 1996 in one of
the 18 block carved out to Yinka Folawiyo/
Abacan Resources, Canada on the Nigerian
portion of the basin. Discovery was on the
narrow Continental Shelf.
THE CHAD (BORNU) BASIN

The Chad Basin lies within a vast area of
Central Africa at an elevation of between 200
and 500m above sea level (ASL). It is the
largest inland basin in Africa occupying an
area of approximately 2,500,000km2 extending
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10
Schematic of hydrocarbon plays types and their distribution within the Benin Basin
over parts of the Republic of Niger, Chad, Sudan

and the northern portions of Cameroon and
Nigeria.
these sediments may be preserved in the lower

depressions and grabens which characterise
the basin floor topography.
The Chad Basin presents a rather complex

tectonic history that is still not fully
understood. It is a polyhistory basin,
combining possibly an Interior Fracture (IF)
cycle supplanted on an original Interior Sag
(IS) [Intracratonic depression of the PreCambrian Basement]; where the latter
represents the Paleozoic geology, interrupted
in the Late Paleozoic - Early Mesozoic by a
non-depositional/erosional episode. An IS
phase seem to have affected the basin in the
Late Tertiary - Quaternary period following an
Early Tertiary phase of basaltic and acidic
igneous intrusions.
Faults are both Basement-induced and

detached. Most induced-faulting give rise to
horst and graben features; and movement
along such faults are translated into high angle
fault systems in the overlying sediments.
Detached faults probably developed in
response to basinal deformation (Sag Phase).
They show an overall increase over the
Basement controlled faulting. Throws along
these faults vary in magnitude with most of
them characterised by a decrease with depth.
Its Cretaceous and Paleozoic sediments appear

to lie in more discrete trough-like basin
systems that are linked to graben trends in the
Benue Trough and the Tenere Rifts. In the
Nigerian sector of the Chad Basin, no rocks of
Paleozoic age outcrop, but it is believed that
BACK
Folds are simple symmetrical structures,

restricted to the deeper parts of the basin. They
have low frequency and amplitude and are
generally cut by faults. The folds are
considered flexural folds which developed as a
result of thermal subsidence in the Basement
controlled graben along fault/fracture planes.
Gravity data suggests that in excess of
30,000m of Cenozoic and Mesozoic sediments
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11
General framework of Dahomey (Benin) Basin
exist in the Southern Chad Basin.
HYDROCARBON POTENTIALS
The basin is presently being actively explored by
the Frontier Exploration Services (FES) of
NNPC. Some 48 blocks have been carved out
and 27,000km length of 2D Seismic data
acquired. Twenty four (24) wells have been
drilled with only marginal shows recorded in
Wadi-1 Well.
These campaigns are encouraged by the fact
that oil has been discovered by Conoco in the
Mesozoic continental sequence on the
Republic of Chad portion of the basin in
closely similar geologic setting.
GONGOLA BASIN
The Gongola Basin is a rift arm of the Benue
Trough Complex. Based on the age of the
oldest stratigraphic sequence it is formed
BACK
during the period of extensional tectonics

associated with the opening of the Gulf of
Guinea.
Subsidence was the dominant process throughout
the life of the basin interrupted by brief periods of
uplift or non-deposition. Present data show that
upward of 3.5km of sediment accumulated in
portions of the basin comprising mainly
continental facies of the Bima Sandstone. Marine
facies represented by the Yolde Formation and
significant carbonate build-up and marine shales
of the Pindiga Formation were subsequently
replaced by regressive facies of the Gombe
Formation (delta front) and later more continental
sequence of the Kerri-Kerri Formation.
Two (2) major unconformities have been
recorded in the basin, one occurring within the
Bima sequences and the other underlying the
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12
Well-based schematic cross section across the Dahomey (Benin) and Anambra Basins
Kerri-Kerri Formation.
Tertiary volcanics (10.3MA) are evident in
portions of the basin.
HYDROCARBON POTENTIAL
Source rock Potential source rocks are some
shaly units within the Bima Formation and the
predominantly marine sequence of the Yolde
and Pindiga Formations or their lateral
equivalents of the Fika Shales and Gongola
Formation.
RESERVOIR ROCK
The Bima Sandstone, although largely
feldsparthic to arkosic, does contain medium
fine grained quartz arenite. The sandstone
beds within the Yolde Formation have good
reservoir properties.
EXPLORATION CAMPAIGNS
The basin is relatively unexplored although 29
blocks have been carved out and a number of
them acquired by some majors. Chevron, Elf
BACK
and Shell commenced exploration campaigns in

1994 and over 3000km of 2D seismic acquired.
Shell spudded its first well (Kolmani 1) in the
first quarter of 1999.
NIGERIAN CRUDE OILS

Geochemically, the Nigerian crudes in both the
Niger Delta and Dahomey (Benin) Basins
appear to belong to one family with heavier
bacterially degraded oils being found at
shallower depths (Niger Delta Basins) or as
seepage on the surface (Benin Basin). The
light oils commonly found in the Niger Delta
Basin typically in the 350 450 API gravity
range, are paraffinic and waxy with pour
points ranging from 60 to 320 C and
viscosities lower than 10CP. The degraded
crudes have gravities around 100 to 260 ,
depending on the depth of occurrence, and are
naphthenic and non-waxy. Sulphur content of
all oils is in the order of 0.1%, though they
tend to be a little higher in the Dahomey
(Benin) Basin heavy oil / tarsands.
NEXT PAGE
13
Synthetic cross sections along the Gongola Basin showing the relationship between the various lithostratigraphic units
The geochemistry, petrology, palynology,

palynofacies and distribution data suggest a
predominantly marine organic source material
in the Cretaceous Dahomey (Benin) Basin and
terrestrial and detrital source for the organic
matter in the Tertiary sediment. The organics
are mainly a mixture of types II and III
kerogen as defined by pyrolysis and are
composed of the macerals, vitrinite and minor
liptinite. The main palynofacies are structural
woody material, opaque organic matter,
cuticles, pollen and spores, and minor
amorphous organic materials.
BACK
CONTENTS
CHAPTER 8: Doing Business in Nigeria

CONDUCIVE BUSINESS CLIMATE
1. Nigeria offers the basic facilities that are
required to conduct business
2. A fairly well developed infrastructure.
3. Dynamic banking community.
4. Relaxed foreign exchange regulations.
5. Existing Stock Exchange for capital
raising.
6. Large local market for industrial
commodities.
7. Good accommodation facilities (world
class) in major cities.
8. Fixed and mobile communication systems.
9. Several private and state owned airlines
with daily flights between major cities.
10. A large community of geoscientists,
engineers, computer experts, architects,
lawyers, etc.
11. A commitment to privatisation of state
owned companies.
12. Existing joint venture opportunities in
several projects.
STARTING POINT
Foreign nationals desiring to do business in
Nigeria will need to:
i.
Incorporate a new company or a Nigerian

branch of their company. This is achieved
through the Corporate Affairs
Commission.
consulting outfits (see under-listed) who are

available and can assist you meet your desire.
Arthur Andersen & Co
22A Gerrard Road
Ikoyi, Lagos, Nigeria
Tel: 234 (1) 2694660 4
Coopers & Lybrand
Elephant Cement House
(5th Floor) ASSBIFI Road,
Central Business District
Alausa, Ikeja, Lagos, Nigeria.
KPMG
Bolex House
Plot 33 Imam Dauda St.
Iganmu Industrial Estate
Iganmu, Lagos, Nigeria
BUSINESS OPPORTUNITIES
Nigeria has one of the largest markets in
Africa, and has the potentials to be the fastest
growing market on the continent. Some of
these investment opportunities are highlighted
below.
AGRICULTURE/FORESTRY
Extensive opportunities exist for foreign
investors in the areas of forestry and
agriculture, particularly in cultivation of
exportable crops like timber, pulp wood,
rubber, groundnuts and soya beans.
SOLID MINERALS INDUSTRY
ii. Register the new company with the

Nigerian Investment Promotion Council.
Government has announced its intention to

embark on open competitive bidding rounds
for bitumen, coal, barytes etc. as from the third
quarter of the year 2000.
The various ministries that supervise or

regulate your business interest will have their
own specific guidelines. There are
internationally recognised management
Generous terms and incentives for attracting

foreign investments in this sector are also in the
offering.
CONTENTS
NEXT PAGE

GAS MARKET POTENTIALS
Internal
An internal demand for 360mmscf of gas daily
exist which is expected to exceed 1.2billion cubic
feet per day by 2003.
Most of these will be utilised in independent
power generation as well as gas utilisation
plants. A quantum leap in liquefied petroleum
gas (LPG) consumption is expected in the
same period. The National Gas Trunk-line
System is to be extended northwards to Abuja
and Kaduna.
External
Gas demands for LNG exports stands at
700million Standard cubic feet per day which
are utilised in the two train LNG plants at
Bonny. A 1.05billion cubic feet per day
consumption is expected in the third quarter of
2003 when a third train comes on stream. A
planned Trans-West African Gas Pipeline for
2003 is expected to deliver 120million
standard cubic feet of gas per day to the
Republics of Benin, Togo and Ghana.
These gas utilisation projects will require the
construction of a large number of systems for gas
gathering within and outside of the oil and gas
fields and the distribution systems in industrial and
residential estates.
OIL INDUSTRY
Petroleum Products
West Africa is an obvious target for Nigerian
manufactured petroleum products. Current
installed refining capacity in Nigeria is
445,000 barrels per day, although effective
performance is only 50% of the installed
capacity.
BACK
Tremendous opportunities for investment (in

the privatisation of Nigerias refineries and
petrochemical plants) therefore exist to meet
the demand for petroleum products in both
Nigeria and West Africa. There are also
opportunities for the establishment of export
oriented refineries, petrochemicals and LPG
plants.
Support Facilities
Investment opportunities exist in the
establishment of manufacturing facilities to
produce most of the inputs for oilfield
operations e.g oil well drilling clays,
chemicals and materials, pipes bolts and nut,
screws gaskets, valves and other accessories,
pans and plastics including other components.
Opportunities also exist for engineering
construction and contracting companies
willing to establish locally to boost the
Nigerian content in the operations, activities
and growth of the oil and gas industry.
FINANCIAL SECTOR
Government interests in both the commercial
and merchant banks are already on the market
for divestment.
The sector is totally open for overseas
investment.
HOSPITALITY INDUSTRY
This industry is not well developed despite the
rich culture and a long history of traditional
hospitality. This could be commercialised as
the tourist attractions are many and varied and
are spread all over the country.
CONTENTS
ADDENDUM
PETROLEUM (DRILLING AND PRODUCTION) (AMENDMENT)
REGULATIONS 1998: GUIDELINE FOR ACCREDITATION AS OIL
INDUSTRY SERVICE COMPANIES: SPECIALISED CATEGORY
CLASSIFICATION
1. EXPLORATION SERVICES:
Exploration Data gathering and acquisition,
topographic and geodetic surveys, supply of
seismic materials and explosives etc.
2. DRILLING SERVICES:
Drilling Rig supply and operation, drilling mud
chemicals and materials supply, directional
drilling and other drilling support services,
water borehole drilling and water treatment,
etc.
3. CONSTRUCTION SERVICES:
Civil, Structural and Road Construction,
Metal Fabrication, Mechanical, Electrical,
construction of Marine vessels, Onshore and
Offshore production and Export facility
construction and installation, etc.
4. PIPELINE/PRODUCTION SERVICES:
Pipeline and Production Facility operation
and maintenance.
5. EQUIPMENT SUPPLY SERVICES:

Supply and maintenance of specialised oil
field equipment and devices of all types
including Data Storage Systems and
Communications Equipment.
6. CONSULTANCY SERVICES:
Engineering, Management, Environmental,
Exploration, Architectural, Drilling and
Technical Consultancy, Petroleum Operations
Data Analysis and Interpretation, Computer
application, etc.
CONTENTS
7. LABORATORY SERVICES:
Specimen sample examination and analysis in
general.
8. MARINE OR SPECIAL
TRANSPORTATION SERVICES:
Rig move and deployment logistics, Marine
Vessels Supply and Operation and Offshore
Operation supports including Air
Transportation, Road Haulage, etc.
9. MARINE SURVEYS AND CARGO

SUPERINTENDENT SERVICES:
Bulk petroleum quantity and quality
measurement and certification, marine facility
inspection and quality assurance.
10. PRESSURE TESTING SERVICES:

Surface and underground oil and gas storage
tank leak detection and integrity assurance.
11. CALIBRATION SERVICES:

Calibration of Petroleum Storage Tanks, Oil
and Gas Measurement devices and all other
basic data measurement equipment.
12. DIVING SERVICES:

Underwater inspection, all hyperbaric
activities and associated services.
13. DREDGING SERVICES:

Hydraulic water channel maintenance, shore
consolidation, land reclamation, etc.
NEXT PAGE
APPLICABLE CONDITIONS
Submit a comprehensive list of its staff,

indicating their names, designations and
nationalities. In addition, this has to be
complimented with a progress report on
the level of the companys manpower
indigenisation programme during the
preceding year of its operations and the
training programme for the New Year.
Submit returns on the expatriate staff in the

employment of the company, which should
be backed, with current quota approvals of
the Federal Ministry of Internal Affairs for
such positions.
An application for the renewal of a permit

should be accompanied by a brief write-up
on the activities of the company in the
preceding year.
Supply any other information that might

help in the evaluation of the application.
Any Oil Industry Services Company that falls into

any of the above categories is required to satisfy
the following minimum requirements, all of which
are applicable to both the initial grant of permit
and subsequent renewals:
l
Complete the prescribed application form and

form F-20 which are both obtainable from the
Department of Petroleum Resources, stating
clearly the specific area of services to be
rendered, in paragraph 7 of the application
form and the category of classification in
accordance with the list in 1(a) - (m) above.
Give proof or show evidence of expertise and
technical know-how in the specialised area of
activities of oil industry where its services will
be required. To this end, it is desirable that a
profile of jobs previously handled or being
handled by the applicant be supplied, coupled
with a list of equipment at the companys
disposal stating clearly their types and
technical specification. In addition, the
curriculum vitae and experience of the
companys key professional staff should be
furnished.
Submit the Companys Tax Clearance (TCC)
in the case of a Limited Liability Company or
Tax Clearance Certificate of one of the
Directors in the case of a sole Proprietorship/
Partnership business firm.
Submit an accident status report for the

preceding year.
Attach a photocopy of the Companys

expiring permit to operate as an Oil
Industry Service Company (for a permit
renewal), and attach a photocopy of the
Companys Certificate of Incorporation or
copies of form/particulars (i.e. forms 1, 2 and
3) for registration of business names in
Nigeria.
BACK
FEES PAYABLE
l
SPECIAL CATEGORY A
Seismic Data gathering and Interpretation,

Drilling Rig and Hoist Operation, Downhole
data gathering and interpretation, Pipeline and
production facilities construction.
Application Fee: N250,000.00
Renewal Fee:
N250,000.00
l
ALL OTHER SPECIAL CATEGORIES:
Application Fee : N250,000.00

Renewal Fee:
N250,000.00
l
All payments shall be made in the form of

Bank Drafts in favour of FGN-DPR Fees
Account.
For each application in respect of (a - m)
above, a separate application form is to be
completed for each category.
NEXT PAGE
TECHNICAL PARTNERSHIP OR
JOINT VENTURES
If a Foreign Company which is in technical
partnership or joint venture with a Nigerian Oil
Industry Service Company intends to register with
the Department of Petroleum Resources; the
following conditions shall apply:
l
A formal application has to be lodged with the

Department of Petroleum Resources; the
following conditions shall be completed.
Pay the application/renewal fees as applicable
in paragraph 3 in Bank Draft drawn in favour
of the Federal Government of Nigeria -DPR
Fees Account.
In addition, the certification of all standard

measures used for calibration services shall be
verified. Confirmatory inspection of facilities
to be used and other services listed above
shall be carried out as deemed necessary.
CONSULTANCY SERVICE
ENGINEERING
Accreditation by the Council Registered

Engineers of Nigeria ( COREN), in the
relevant field.
ARCHITECTURE
Accreditation by the Architectural Registration
Council of Nigeria (ARCON).
Where applicable, the company should show

evidence of fulfilment of tax obligation to the
Nigeria Government on earnings from Oil
Industry Services rendered to the Oil Industry
so far by the foreign company concerned.
LAND/GEODETIC
Produce evidence of expertise/competence

available to the foreign company for
rendering the desired services.
Accreditation by the relevant Council or

Statutory regulation body for the professions
in question.
Produce an attestation to illustrate similar

services of that nature which have been
carried out by the company in recent past.
MARINE OR SPECIAL
TRANSPORTATION SERVICES
Produce a current and properly attested

copy of the technical and financial
agreement entered into by the foreign
company with its local affiliates
(Photocopies of agreements ordinary
letters of intent are not acceptable for this
purpose).
SPECIAL CONDITIONS
l
For registration/renewal permits of Oil

Industry Service Companies that engage in
calibration and pressure testing, marine
surveys and cargo superintendent services,
dredging, and diving services, it is imperative
that their facility be inspected and expertise
verified before accrediting them.
BACK
Accreditation by the Survey Licensing Board

of Nigeria.
FOR OTHER FIELDS OF SPECIALISATION
Particulars of ownership/relevant licenses

in respect of the marine Vessels or Aircraft
to be used to render the services desired.
Certification of relevant Marine

professionals in the Companys
employment.
Brochures on Marine Vessels/ Aircraft in

the fleet of the Company.
Companies applying for the supply of

explosives or similar materials should attach a
valid copy of permit issued by the relevant
government agency authorising the Company to
deal in such materials.
NEXT PAGE
GUIDELINE FOR ACCREDITATION

AND REGISTRATION OF GENERAL
PURPOSE OIL INDUSTRY SERVICE
COMPANIES
General Purpose Oil Industry Service Companies
are those companies that do not render highly
specialised or technical services to the oil industry.
Any company in this category will be required to
satisfy the following requirements before being
registered.
*
Complete the prescribed application form.
In paragraph 2 of the form, state the current

address of the companys office and mailing
address.
In paragraph 7 of the form, Be specific on

the nature of business engaged in.
(Exporter, Importer, General Contractor,
General Suppliers, Merchandise, are not
acceptable descriptions).
Pay the sum of five thousand naira
(N5,000.00) only as the prescribed
application renewal fee. This must be in
bank draft (MICR Cheque Form) made
payable to the Federal Government of
Nigeria (DPR - Fees Account).
BACK
Furnish the companys Certificate of

Incorporation in case of a Limited Liability
Company coupled with the current Tax
Clearance Certificate of the company
issued by the Federal Inland Revenue
Department.
Furnish the companys copies of form/

particulars (i.e. forms 1, 2, 3) for
registration of business names in Nigeria
(in case of non- limited liability company)
supported with the current Tax Clearance
of one of the companys Directors.
Attach a photocopy of the expiring permit to

the companys application form (in case of
application for permit renewal).
For Clearing and Forwarding,

pharmaceutical, security, land/geodetic
surveying and allied jobs, companies
evidence of accreditation by Customs and
Excise Department, Pharmaceutical Board of
Nigeria, Federal Ministry of Internal Affairs
and Surveyors Licensing Board of Nigeria as
applicable to each case should accompany
the companys application form.
Furnish any other requirements and

information, which may assist in the
evaluation of the companys application.
RETURN TO INTRO PAGE
CONTENTS

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MOVE TO

3: THE PETROLEUM INDUSTRY

4: THE MAJOR OIL COMPANIES

5: THE INDIGENOUS OIL OPERATORS

6: THE OILFIELD SERVICE INDUSTRY

7: THE MINING (MINERAL) INDUSTRY

8: DOING BUSINESS IN NIGERIA

Tel: 234-1-2619355, 2613026

In the early colonial days, Nigeria was

NIGERIA: Great Expectations, Abundant Opportunities

Northern Nigeria before spilling over into the

GEOGRAPHY AND LOCATION

Nigeria is located between 4 and 13 degrees

In May 1999, Nigeria adopted the American

There are four distinct vegetation zones which

The Government maintains healthy relations

Vegetation map of Nigeria

NIGERIA: Great Expectations, Abundant Opportunities

Population spread shows an active workforce

GNP (Atlas Method, US$ billions):

GNP per capital (Atlas Method, US$):

Population growth rate(%):

Labour force growth rate (%):

Urban populatio n (%):

Main export product:

Exchange rate: (N /$):

Nigerias key economic indicators: 1997

NIGERIA: Great Expectations, Abundant Opportunities

the economy, accounting for 35% of the GDP

To buttress a commitment to transparency and a

All Federal Government tenders are now

National and State Assemblies mandatorily

A National Investment Promotion Council

A three phase programme (2000-2003) for

The United States of America is the major

Agriculture is the biggest employer of labour providing

Nigerias imports consist largely of machinery

NIGERIA: Great Expectations, Abundant Opportunities

FISCAL AND MONETARY POLICIES

One of the numerous banks in Nigeria with overseas

CULTURAL AND ETHNIC DIVERSITY

Kwa (including Ibo, Yoruba, Edo, Nupe)

NIGERIA: Great Expectations, Abundant Opportunities

Mandingo (including the Bussa)

Due to this complexity of ethnic background and

PEOPLE AND TOURISM

complementary diversities of the people, their

NIGERIA: Great Expectations, Abundant Opportunities

The Presidential Hotel, Port Harcourt, one of the

However, the real variety and excitement that is

A Hausa man inside the walls of the old city in Kano,

Sites range from crater lakes to several water

The Kwi Hill (a flat top laterite capped residual hill) on

THE NORTHERN ZONE

The shrub-savana of the Gongola basin. The tertiary

NIGERIA: Great Expectations, Abundant Opportunities

Fired clay pot making is common among all Nigerian peoples.

watching, the Lake Chad environment is a haven

THE EASTERN ZONE

The fierce looking but entertaining Abiriba dancers

Lake, Oguta, the National War Museum,

Caves are a common feature of carbonate terrain. The

THE SOUTHERN ZONE