Chevron Earmarks $18b For Investment In 2018

Chevron Corporation has hosted its annual security analyst meeting in New York, where executives highlighted the company’s plans to excel in any market environment even has it earmarked N$18 billion for investment program this year.

“We intend to grow free cash flow in 2018 and thereafter,” said Michael K. Wirth, Chevron’s chairman and chief executive officer. “Even with no commodity price appreciation, we expect to deliver stronger upstream cash margins and production growth. This is a powerful combination.”

“And we intend to maintain capital discipline, as evidenced by an $18 billion investment program this year and an $18-$20 billion annual investment range projected through 2020,” Wirth added. The company emphasized its portfolio strength, highlighting resilience and sustainability through the price cycle, as well as numerous attractive development opportunities under a ratable capital program.

“We plan to further lower our cost structure, get more value from our existing assets and continue to high-grade our portfolio. We believe execution of these plans will support our primary commitment to shareholders, which is a sustained and growing dividend over time. As we generate surplus cash, we would expect to be in a position to resume our share repurchase program.”

Jay Johnson, executive vice president, upstream, reviewed Chevron’s upstream opportunities. “Our objective is to ensure our upstream business provides competitive returns throughout the price cycle. We’re focused on operating safely and reliably, continuing to lower our costs, and delivering production growth from the Gorgon and Wheatstone LNG projects in Australia.”

“In addition, we’re advancing development of our unconventional resources, particularly in the U.S. Permian Basin, where we have a leading position. We’re seeing reserves grow, costs shrink, efficiencies expand and production rise.”

Mr. Johnson provided an update on the company’s Tengiz growth project in Kazakhstan, which is on track to deliver first production in 2022. He also discussed multiple deepwater assets and emphasized near-term opportunities to leverage existing infrastructure, apply technology and increase standardization to improve capital and operating cost efficiencies for these deepwater assets.

Shell Debunks Amnesty Allegations On Spills Management In Niger Delta

The Shell Petroleum Development Company of Nigeria Ltd (SPDC) has denied allegations of environmental mismanagement in the Niger Delta levelled against it at the weekend by Amnesty International, reiterating its commitment to swift response to oil spill incidents as much as access and security conditions permit teams to mobilise and deploy to spill sites to investigate, clean up and remediate such areas.

This is in addition to deploying technology and best practice to make it more difficult for unauthorised persons to break pipelines and steal crude oil from its facilities.

“SPDC, in collaboration with government regulators, responds swiftly to spill incidents as quickly as it can and cleans up spills from its facilities regardless of the cause,” said General Manager, External Relations, Igo Weli. “We regularly test our emergency spill response procedures and capability to ensure staff and contractors can respond rapidly to an incident. However, response to spills, clean-up and remediation depend on access to the spill site and ultimately on the security of personnel and equipment while work is ongoing.”

He said Amnesty International’s allegations are false, without merit and fail to recognise the complex environment in which the company operates where security, a sole prerogative of Government, remains a major concern with persisting incidents of criminality, kidnapping, vandalism, threats from self-described militant groups, etc.

Mr. Weli said the transparency in the online reporting of spill incidents by SPDC in its areas of since 2011, which Amnesty International itself acknowledged, demonstrates its commitment to creating awareness and enhancing collaboration with key stakeholders on oil spill response and clean-up processes and deepening understanding of the complex and challenging operating environment. “SPDC reiterates its commitment to carrying out operations in line with best practice in a responsible and environment-friendly manner,” he added.

Over the years, SPDC, the operator of a joint venture between the government-owned Nigerian National Petroleum Corporation – NNPC, SPDC, Total E&P Nigeria Ltd and the ENI subsidiary Nigerian Agip Oil Company Limited, sustained air and ground surveillance as well as anti-theft mechanisms on equipment and pipelines to mitigate third-party interference and ensure that spills are detected and responded to as quickly as possible. The company conducts daily over-flights of its pipeline network to identify any new spill incidents or illegal activities, and installed state-of-the-art high definition camera to a specialised helicopter that greatly improves the surveillance of our assets.

SPDC also works diligently to develop new hardware barriers and technologies to detect and prevent oil theft, sabotage, criminality and other types of third party interference that cause environmental damage, participating in industrial organisations in Nigeria as well as internationally to share best practices. Regrettably, despite these and other efforts, criminals still target oil and gas infrastructure, causing spills, and the company is continuing to focus attention on the detrimental impact of these activities on people, the economy and environment in engagements with the media, government officials, diplomats and community people.

Baru Reiterates Commitment to Support Local Investors, Lauds Caverton Helicopters

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru, has restated the corporation’s commitment to support indigenous companies operating in the oil and gas industry to grow to their fullest potential.

The GMD who stated this in Lagos on Thursday at the official unveiling of 11 new helicopters to Caverton Offshore Group, an indigenous aviation and marine logistics service provider, commended the company for its high quality services to the oil and gas sector.

He said with the Federal Government doing so much to stabilize the economy, NNPC would continue to encourage investors like Caverton Group in the keeping with the provisions of the Nigerian Content Act.

He expressed confidence that the company would deliver on its new contract to provide aviation services for the NNPC/Chevron Nigeria Limited (CNL) Joint Venture project based in Escravos.

“The award of a new contract by the NNPC/Chevron JV and the capacity of the Caverton Group to respond and mobilize with the introduction of 11 brand new helicopters exhibit the quality of character and tenacity of purpose of the company’s management.

“The development also represents true commitment towards ensuring seamless running of the nation’s oil and gas industry and by extension the Nigerian economy,” Baru said.

The firm was last year awarded a five-year logistics support contract by CNL, operator of the NNPC/CNL JV, for provision of aviation services with a two-year renewable option.

He urged the company to continue to raise the bar in its business in order to position itself as company of choice in its chosen area of operation.

Earlier in his speech, the CEO of Caverton Offshore Group, Mr. Olabode Makanjuola, thanked the GMD and other partners for their consistent patronage, pledging that the company would continue to soar to greater heights.

He recalled that when the company started, they were told that the business was an exclusive preserve of foreign companies, “but people like Dr. Baru kept encouraging us, in line with their belief in supporting the growth of indigenous companies.”

He said over the years, the company had grown from a family business of six people to about 700 employees.

He also thanked the NNPC/CNL JV for the opportunity to participate in the latest Escravos project, even as he expressed confidence that Caverton would work hard to meet the expectations of its clients.

Abu Dhabi: Total Consolidates Its Strategic Partnership With ADNOC

Total has signed two new 40-year concession agreements with the Supreme Petroleum Council of the Emirate of Abu Dhabi (United Arab Emirates) and the Abu Dhabi National Oil Company (ADNOC).

In the frame of these agreements, Total is granted a 20% participating interest in the new Umm Shaif & Nasr concession and 5% in the Lower Zakum concession, effective March 9th, 2018, for a total participation fee of 1.45 billion dollars, which represents an access cost of around 1 dollar per barrel of reserves. These interests bring to Total a production of 80,000 barrels of oil per day in 2018.

Located about 135 and 65 kilometers off the coast respectively, Umm Shaif and Lower Zakum are two of the major fields offshore and counting for around 20% of Abu Dhabi production.

In addition to the huge oil reserves and the potential to grow oil production beyond 450,000 barrels per day (including Nasr – the present production being at around 300,000 barrels per day), Umm Shaif also contains a giant gas-cap, which is to be developed in the scope of the concession with a gas production target of 500 mmscfd. ADNOC Offshore (100% owned by ADNOC) will be the operator of all concessions offshore Abu Dhabi, to which Total, as a partner in the concessions, will bring its expertise by providing personnel and carrying out studies.

“These agreements represent another major milestone in our long-standing partnership with Abu Dhabi and ADNOC that dates back to 1939. Following the signing of the ADNOC Onshore concession in 2015, they confirm our commitment to ADNOC for the next 40 years,” said Patrick Pouyanné, Chairman and CEO of Total.

“With a 25% overall participating interest in two concessions, we are honored that ADNOC chose Total as its main partner on these offshore concessions that contain giant reserves with low technical costs and offer significant growth potential. In particular, we are delighted with the trust that ADNOC demonstrated by granting us a 20% participating interest in the Umm Shaif & Nasr concession, and therefore to be the leading partner on this asset. We intend to bring all of our competencies in order to make the most of the upside coming from the gas reserves, while we develop the oil production in the most effective way.”

“For nearly 80 years, Total has partnered with Abu Dhabi in the development of our oil and gas resources and has closely collaborated with ADNOC across various stages of our value chain,” stated Dr Sultan Ahmed Al Jaber, ADNOC Chief Executive Officer. “Today’s announcement marks an important step to further strengthen our mutually beneficial and value-adding partnership with one of the world’s largest integrated upstream and downstream companies.”

In addition, as part of this partnership, Total has also extended its concession with ADNOC in the offshore Abu Al Bukoosh field, operated by Total with a 100% interest, for three more years. This field produces approximately 10,000 barrels per day.