a triple whammy · from the editor vol 19, no 8, october 2018 report business development: paul...
TRANSCRIPT
FR
OM
TH
E E
DIT
OR
Vol 19, No 8, October 2018
report
Business Development: PAUL KELECHI
FOLUSO OGUNSAN (Lagos)
Publisher: TOYIN AKINOSHO
Editor-In-Chief: FRED AKANNI
Editor: MOSES AKIN AREMU
Consultant: FIDELIS AKPOM
Editorial Assistant: AHMED GAFAR
Reporter: SEUN ALABIOWO
Off Bode Thomas Street, Surulere, Lagos.
EDITORIAL EMAIL: [email protected]
WEBSITE: www.africaoilgasreport.com
TEL: 234-8036-525-979
DISPATCHER: Kayode Akinyele
LEGAL CONSULTANTS
OMISORE AND OMISORE
6th Floor, Western House, Broad Street, Lagos
REGIONAL CONTACTS
CAPE TOWN: ROBERT BAKRE
Western Cape Postnet Suite 226
Post Bag X16 Hermanus, 7200 South Africa
Phone: +277-96971531.
Email: [email protected]
ACCRA: DELALI OTCHI
Email: [email protected]
Phone: 233-2405-69650.
DANIEL BUDU
Phone: +233-243349209.
RIDGE CHURCH,
Tudu Branch, Accra. Phone: +234-243349209
CAIRO: AL-AHRAM NEWSPAPERS LTD.
Al Galaa Street, -11511, Cairo.
Phone: 5796997, Mobile: 012/2180706
OYELADE ABASS
SUBSCRIPTION/ADVERT PLACEMENT
SERVICES
Phone: +234-806-0095809, +234-8127483663,
+234-809-9903294, 234-8036-525-979
Email: [email protected]
REGIONAL REPRESENTATIVES
West Africa: DELALI OTCHI/Accra, Ghana
South Africa: ROBERT BAKRE/Cape Town, SA
North Africa: OYELADE ABASS/Cairo, Egypt
HQ(North): Abuja, KISH ONWUNALI
HQ(South): NOAH AJIBISE/Warri
AMY AVIA /Port Harcourt
DEV George Houston
TAKO KONING Calgary
AKIN ADESOKAN Indiana
REGIONAL CORRESPONDENTS
SA'AD BASHIR (Dar es Salaam)
JOHN ANKROMAH (Accra)
SULLY MANOPE (Windhoek)
MOHAMMED JETUTU (Cairo)
DESIGN & EDITORIAL CONSULTANTS
KAZMA CONCEPTS LAGOS
[email protected], 234-805-621-2178
Cover Design: OBAYANJU WALESEUN
INTERNATIONAL ADVISORY BOARD
MAKOJI ADUKU Abuja
AUSTIN AVURU Lagos
JAHMAN ANIKULAPO Lagos
Published by: FESTAC NEWS PRESS LTD.
OFFICE ADDRESS
12A, Animashaun Street,
ISSN: 1597-5274
Copyright 2018
FESTAC NEWS PRESS LTD.
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 3
This edition is also dedicated to our infrequent midstream overview. We got a rare interview with the Chief Executive of the Nigerian Liquefied Natural Gas Ltd, which allow us to fill these pages with market intelligence to the LNG landscape in Africa.
We are in Africa Oil Week in Cape Town with this issue and for that we have to highlight the opportunities on the southern tip of the continent. The South African gas to power possibility is one and so is the refining landscape. Namibia's progress
with the Kudu gas project and Mozambique's journey to abundant gas production are the top material for any Southern Africa Special. But what about Prospects and Outlook outside of these projects-in- progress? Anyone with very scant knowledge of the Southern Africa hydrocarbon opportunity landscape should get a good bird's eye view by going through these pages.
Midstream oil and gas activity and Crude oil refining are not far apart. So what is happening to the various attempts to build the refining capacity on the continent? Is Africa now on the way to beneficiating enough of its oil resources to fulfil its domestic petroleum product demand and have some extra for exports? The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since November 2001, AOGR is a monthly, 40 page hardcopy publication, delivered to subscribers around the world. Its website remains www.africaoilgasreport.comand the contact email address is [email protected]. Contact telephone numbers in our West African regional headquarters in Lagos are +2348028354297, +2349091009800, +2348036525979 and +2347062420127
But over the years, the devout Muslim says, he began to bristle at his assignments. He felt like he was continually being asked to look for sensationalist, caricatured angles about the Muslim world, and seek out “bad guy” terrorist stories to the exclusion of all else.
“She said, 'Look, why don't we go down to the mosque, and we can become Muslims?'” He laughs. “And I was like, 'Wait a minute. Sounds like there's an ulterior motive here. She wants me to marry her!'”Some time later, he and the girlfriend break up, and Kareem finds himself reading The Autobiography of Malcolm X. Impressed by the tale of Malcolm's personal turnaround, he finally goes into that mosque and takes the faith.A former indifferent college student who had spent more time chasing girls than building a career, he feels he finally has direction. But he quickly realizes that much of the religion is “wrapped up in the Arabic language,” and decides to go abroad to learn it.He goes to the Sudan first, landing at Khartoum. He remembers stepping off the tarmac in the desert heat. “It was like a dragon was breathing on me,” he says. “And at two in the morning! I said, 'That must be the exhaust from the plane.' And I kept on walking, and it didn't stop.”Kareem moved to Egypt from Sudan and mostly remained overseas from then on. Soon, with fluent Arabic and an aptitude for moving freely in the more metaphorically hot zones in the Middle East, he found a career as a freelance fixer, producer and reporter for TV news companies from all over, from CNN to BBC to Al-Jazeera to Sky News to numerous others.
Kareem doesn't go in that day. He's suspicious. He'd previously had a girlfriend who pushed him to get religion.
Excerpted from the article How to Survive America's Kill List, published in Rolling Stone,
July 19, 2018.
ARTICLE EXCERPTIt Was Like A Dragon Was Breathing On Me
A Triple Whammy
- Editor
FR
OM
TH
E E
DIT
OR
Vol 19, No 8, October 2018
report
Business Development: PAUL KELECHI
FOLUSO OGUNSAN (Lagos)
Publisher: TOYIN AKINOSHO
Editor-In-Chief: FRED AKANNI
Editor: MOSES AKIN AREMU
Consultant: FIDELIS AKPOM
Editorial Assistant: AHMED GAFAR
Reporter: SEUN ALABIOWO
Off Bode Thomas Street, Surulere, Lagos.
EDITORIAL EMAIL: [email protected]
WEBSITE: www.africaoilgasreport.com
TEL: 234-8036-525-979
DISPATCHER: Kayode Akinyele
LEGAL CONSULTANTS
OMISORE AND OMISORE
6th Floor, Western House, Broad Street, Lagos
REGIONAL CONTACTS
CAPE TOWN: ROBERT BAKRE
Western Cape Postnet Suite 226
Post Bag X16 Hermanus, 7200 South Africa
Phone: +277-96971531.
Email: [email protected]
ACCRA: DELALI OTCHI
Email: [email protected]
Phone: 233-2405-69650.
DANIEL BUDU
Phone: +233-243349209.
RIDGE CHURCH,
Tudu Branch, Accra. Phone: +234-243349209
CAIRO: AL-AHRAM NEWSPAPERS LTD.
Al Galaa Street, -11511, Cairo.
Phone: 5796997, Mobile: 012/2180706
OYELADE ABASS
SUBSCRIPTION/ADVERT PLACEMENT
SERVICES
Phone: +234-806-0095809, +234-8127483663,
+234-809-9903294, 234-8036-525-979
Email: [email protected]
REGIONAL REPRESENTATIVES
West Africa: DELALI OTCHI/Accra, Ghana
South Africa: ROBERT BAKRE/Cape Town, SA
North Africa: OYELADE ABASS/Cairo, Egypt
HQ(North): Abuja, KISH ONWUNALI
HQ(South): NOAH AJIBISE/Warri
AMY AVIA /Port Harcourt
DEV George Houston
TAKO KONING Calgary
AKIN ADESOKAN Indiana
REGIONAL CORRESPONDENTS
SA'AD BASHIR (Dar es Salaam)
JOHN ANKROMAH (Accra)
SULLY MANOPE (Windhoek)
MOHAMMED JETUTU (Cairo)
DESIGN & EDITORIAL CONSULTANTS
KAZMA CONCEPTS LAGOS
[email protected], 234-805-621-2178
Cover Design: OBAYANJU WALESEUN
INTERNATIONAL ADVISORY BOARD
MAKOJI ADUKU Abuja
AUSTIN AVURU Lagos
JAHMAN ANIKULAPO Lagos
Published by: FESTAC NEWS PRESS LTD.
OFFICE ADDRESS
12A, Animashaun Street,
ISSN: 1597-5274
Copyright 2018
FESTAC NEWS PRESS LTD.
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 3
This edition is also dedicated to our infrequent midstream overview. We got a rare interview with the Chief Executive of the Nigerian Liquefied Natural Gas Ltd, which allow us to fill these pages with market intelligence to the LNG landscape in Africa.
We are in Africa Oil Week in Cape Town with this issue and for that we have to highlight the opportunities on the southern tip of the continent. The South African gas to power possibility is one and so is the refining landscape. Namibia's progress
with the Kudu gas project and Mozambique's journey to abundant gas production are the top material for any Southern Africa Special. But what about Prospects and Outlook outside of these projects-in- progress? Anyone with very scant knowledge of the Southern Africa hydrocarbon opportunity landscape should get a good bird's eye view by going through these pages.
Midstream oil and gas activity and Crude oil refining are not far apart. So what is happening to the various attempts to build the refining capacity on the continent? Is Africa now on the way to beneficiating enough of its oil resources to fulfil its domestic petroleum product demand and have some extra for exports? The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since November 2001, AOGR is a monthly, 40 page hardcopy publication, delivered to subscribers around the world. Its website remains www.africaoilgasreport.comand the contact email address is [email protected]. Contact telephone numbers in our West African regional headquarters in Lagos are +2348028354297, +2349091009800, +2348036525979 and +2347062420127
But over the years, the devout Muslim says, he began to bristle at his assignments. He felt like he was continually being asked to look for sensationalist, caricatured angles about the Muslim world, and seek out “bad guy” terrorist stories to the exclusion of all else.
“She said, 'Look, why don't we go down to the mosque, and we can become Muslims?'” He laughs. “And I was like, 'Wait a minute. Sounds like there's an ulterior motive here. She wants me to marry her!'”Some time later, he and the girlfriend break up, and Kareem finds himself reading The Autobiography of Malcolm X. Impressed by the tale of Malcolm's personal turnaround, he finally goes into that mosque and takes the faith.A former indifferent college student who had spent more time chasing girls than building a career, he feels he finally has direction. But he quickly realizes that much of the religion is “wrapped up in the Arabic language,” and decides to go abroad to learn it.He goes to the Sudan first, landing at Khartoum. He remembers stepping off the tarmac in the desert heat. “It was like a dragon was breathing on me,” he says. “And at two in the morning! I said, 'That must be the exhaust from the plane.' And I kept on walking, and it didn't stop.”Kareem moved to Egypt from Sudan and mostly remained overseas from then on. Soon, with fluent Arabic and an aptitude for moving freely in the more metaphorically hot zones in the Middle East, he found a career as a freelance fixer, producer and reporter for TV news companies from all over, from CNN to BBC to Al-Jazeera to Sky News to numerous others.
Kareem doesn't go in that day. He's suspicious. He'd previously had a girlfriend who pushed him to get religion.
Excerpted from the article How to Survive America's Kill List, published in Rolling Stone,
July 19, 2018.
ARTICLE EXCERPTIt Was Like A Dragon Was Breathing On Me
A Triple Whammy
- Editor
In Namibia, the Kudu gas to power project, meant to develop some of the 1.3Trillion cubic feet of offshore gas reserves into producing 425MW of power for the country, had moved quicker towards fruition between 2015 and 2017 than at any time since it came on the drawing board, or so we assumed.
The planned new gas and renewable energy are coming to replace some of the existing coal fleet, which are going to be progressively decommissioned. South Africa's total electricity generation in the next decade is not expected to be more than incrementally higher than the current 35,000MW operated capacity.
Until Tom Alweendo, the country's minister of Mines and Energy, decided to comment about it.
This “allocation” of natural gas fuelled energy, expected to provide 15.7% of installed capacity in 8-12 years' time (2026-2029), is the most forceful, formal endorsement of natural gas investment into Africa's most industrialised economy. The IRP calls for the gas generated electricity to be used in conjunction with 7,958 MW of solar PV and 11,442 MW of wind PV energy (10.5% and 15.1% of i n s t a l l e d g e n e r a t i o n c a p a c i t y respectively) by 2030. There are over 4,000MW of these renewables already connected into the South African energy grid. The rest are planned to be rolled out annually, with a gap around 2022 to 2025.
To generate 11,900MW requires 3 Billion standard cubic feet of gas a day. There is also no clear line of sight to where that volume of hydrocarbon will come from. South Africa's technical and bureaucratic elite often talk as if the vast reserves of gas in Mozambique are their country's for the asking. The most widely canvassed option of accessing the molecules is to import Liquefied Natural Gas from the North Eastern neighbour. But that is expected to happen after a South African bid process for Gas to Power IPP, in which the winner/s is/are expected to bring in the gas through any of two designated ports in the country and then pipe to turbines. Neither of the two ports, Coega in the Eastern Cape province and Richards Bay, , currently has in Kwazulu Natalinfrastructure for receiving natural gas. The LNG import can only be accessed through a deal with either ENI or Anadarko, who, in developing the three export LNG projects in Mozambique, are currently talking to a number of offtakers, none of which is likely having South Africa on its radar.
That's around four times the allocation of gas to power in the energy mix provided in the last incarnation of the IRP, gazetted in 2011.
So, natural gas is not coming into South African electricity mix as a standalone; the
plan calls for gas generation, which can be deployed and withdrawn from the grid at relatively short notice, to balance wind and solar energy, the availability of which is dependent on weather conditions and time of day.
Another option is to import the gas through a pipeline, no less than 2,000km in length, but what most commentators fail to consider is that none of the LNG developers in Mozambique today is licenced to supply gas into a pipeline. Such supply will not be available until
Mozambiqucan government concessions it and that's unlikely before 2030.South Africa's updated Integrated
Resource Plan IRP, released late August, contains provisions for
introduction of natural gas to produce 11,930MW of electricity in the country by 2029.
Nor is there any likelihood that there would have been any significant movement in developing indigenous South African gas either from onshore Karoo or deepwater orange basin before 2026.
It's important to note that this is just a plan, whose implementation depends on the growth trajectory of the economy and the accessibility to the resource itself.
ELSEWHERE IN THE WIDER SOUTHERN AFRICAN REGION, the investment outlook for the domestic gas market is a mixed bag.
South Africa's economy has tanked. The country is not in demand of energy as much as it was only five years ago.
South Africa's largest proven, undeveloped indigenous gas asset; the Ibhubesi gas is not in the IRP. Located in Block 2A within the Orange Basin, the field contains (estimated so far) proven and probable recoverable reserves of about 540Billion cubic feet of gas and 4.3Million barrels of condensates, stored in channel sands below 250 metres of water. The proposed volume of 100Million standard cubic feet a day is quite minuscule for the scale that the country wants to achieve in the three years it proposes to introduce natural gas into electricity, but there has been a plan by the field's owners, Sunbird Energy (76%) and the state hydrocarbon company PetroSA (24%) to supply gas to state utility Eskom's 588MW Ankerlig power station, as well as customers at Saldanha, an industrial hub in the country's southwest. The project received governmental approval to acquire the production right on Block 2A in October 2013, and the authorities' nod for Environmental Impact Assessment in late 2017. But it has not proceeded as quickly as keen watchers expect.
If there was anyone considered the chief promoter of his country's largest electricity infrastructure project, to outside investors, you would think it was the Minister of Energy. We don't know what Mr. Alweendo's motive is, but he is not entirely correct. The upstream part of the project: developing the gas reserves and getting them to flow, is sorted. BW Offshore holds 56% equity to state hydrocarbon company Namcor's 44% on that segment of the project. K n u t S æ t h r e , t h e company's Chief Finance O f f i c e r , s a y s t h a t BWOffshore is working towards a possible Final Investment Decision. This has been the most progressive statement on Kudu Gas to power since the field's discovery. But upstream delivery relies on downstream offtake. What is far less certain is the profitability of the entire chain from pumping the gas into turbines which generate the power to transmitting and distributing the electricity. A significant fraction of required funding for the electricity production and supply is expected to be raised by debt, but this is far from a done deal. Just as Namcor has no money on the table for the upstream part, so does state power utility Nampower has no money for the power generation and uptake investment. The challenge has always been that the Namibian state itself has never wanted to give any thought to creative models of funding a project that will free it up from begging other countries to supply it power.
“I have been hearing this thing for a very long time now”, the Minister, appointed to the office last February, told the Namibia Broadcasting Corporation. “I am not convinced that it is viable unless you show me otherwise”, Alweendo said in August 2018. “if the project was viable it would have happened already. If it did not happen for the last 25 years, there is something wrong.”
By Toyin AkinoshoPublisher
KI
CK
ST
AR
TE
R
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 84
Vo
l 19,
No
8, O
cto
ber
201
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyrig
ht 2
018,
AFRI
CA O
IL+G
AS R
EPO
RT
SEP
TEM
BER
20
18
UP
DA
TE
Ake
r W
ill S
pu
d P
eca
n 4
in N
ove
mb
er
Ake
r En
ergy
, wh
o p
urc
has
ed H
ess
Co
rp's
Gh
ana
inte
rest
less
th
an n
ine
mo
nth
s ag
o, h
as s
et
to w
ork
on
th
e ac
reag
e. T
he
Mae
rsk
Dri
llin
g o
per
ated
ult
ra d
eep
wat
er d
rills
hip
Ma
ersk
V
ikin
g w
ill s
pu
d t
he
Peca
n-4
A a
pp
rais
al w
ell l
ates
t N
ove
mb
er 2
01
8.
Will
Am
ni D
rill
in C
en
tral
Tan
o in
20
19
?W
ill A
mn
i Pet
role
um
en
tire
ly f
un
d t
he
firs
t o
f it
s tw
o o
blig
atio
n w
ells
off
sho
re G
han
a, in
20
19
, if
it
can
't f
ind
a p
artn
er?
For
ove
r 1
5 m
on
ths
the
Nig
eria
n o
per
ato
r h
as b
een
in s
earc
h o
f a
wel
l h
eele
d f
arm
inee
will
ing
to e
arn
up
to
a 4
0 %
eq
uit
y in
th
e C
entr
al T
ano
Blo
ck b
y fu
nd
ing
the
two
o
blig
atio
n w
ells
(es
t. d
ry h
ole
co
st $
45
Mill
ion
ea
ch).
Am
ni p
rod
uce
s 1
4,0
00
BO
PD
fro
m t
wo
fie
lds
off
sho
re N
iger
ia.
The
re's
Sti
ll 6
00
Mill
ion
B
arre
ls in
th
e
Tullo
w/K
osm
os
De
ep
wat
er
Tan
o A
cre
age
Tullo
w O
il b
elie
ves
that
so
me
24
4M
MB
O 2
C d
isco
vere
d
reso
urc
es r
emai
n t
o b
e d
evel
op
ed in
Gh
ana
and
th
ere
are
som
e 5
70
MM
BO
of
dis
cove
red
up
sid
e p
ote
nti
al,
in t
he
acre
ages
in w
hic
h
itsh
as p
osi
tio
ns.
It s
ays
it
wan
ts t
o “
rep
len
ish
res
erve
s w
ith
rap
id r
etu
rn o
n
inve
stm
ent
The
Pu
blic
Inte
rest
an
d A
cco
un
tab
ility
C
om
mit
tee,
(th
e cl
ose
st t
o a
n E
xtra
ctiv
e In
du
stri
es T
ran
par
ency
Init
iati
ve in
Gh
ana)
, re
po
rts
that
th
e G
han
a N
atio
nal
Gas
Co
rpo
rati
on
(G
NG
C)
“may
wel
l hav
e b
een
cau
ght
up
in t
he
vici
ou
s cy
cle
of
ind
ebte
dn
ess
of
the
ener
gy
sect
or
uti
litie
s (w
hic
h s
too
d a
t $
2.4
Bill
ion
at
the
end
of
20
16
)”. T
he
Co
mm
itte
e's
late
st r
epo
rt s
ays
that
“In
20
17
alo
ne,
Vo
lta
Riv
er A
uth
ori
ty V
RA
, th
e st
ate
elec
tric
ity
uti
lity,
rec
eive
d le
an g
as
wo
rth
$2
79
,91
0,1
18
.08
fro
m G
NG
C, b
ut
has
no
t p
aid
up
, in
curr
ing
US$
16
,73
7,5
31
.29
in in
tere
st
to G
NG
C”.
Gh
ana
Gas
Cau
ght
In V
icio
us
Cyc
le o
f D
eb
t
Fo
r G
ha
na
's T
ax
ma
n,
Ora
nto
is
Hid
ing
In
Pla
in S
igh
tG
han
a R
even
ue
Au
tho
rity
cla
ims
that
Ora
nto
, th
e N
iger
ian
ow
ned
E&
P c
om
pan
y, “
has
bee
n
loca
ted
in A
ngo
la a
nd
Mo
zam
biq
ue”
. Th
is is
in
resp
on
se t
o a
rep
ort
th
at t
he
com
pan
y, in
p
artn
ersh
ip w
ith
Sto
ne
Ener
gy “
has
sti
ll n
ot
ho
no
ure
d a
n o
uts
tan
din
g su
rfac
e re
nta
l in
voic
e o
f $
67
,43
8.3
6 s
ince
Feb
ruar
y 2
01
3”,
acc
ord
ing
to t
he
20
17
rep
ort
of
Pu
blic
Inte
rest
an
d
Acc
ou
nta
bili
ty C
om
mit
tee.
Th
e P
IAC
th
en
reco
mm
end
s th
at t
he
GR
A s
ho
uld
“co
llab
ora
te
wit
h t
he
rele
van
t au
tho
riti
es in
th
ese
juri
sdic
tio
ns
to r
etri
eve
the
mo
ney
”. T
he
clai
m,
by
GR
A ,o
f O
ran
to's
alle
ged
loca
tio
n a
nd
th
e re
com
men
dat
ion
, by
PIA
C r
egar
din
g re
trie
vin
g O
ran
to's
deb
t ar
e q
uit
e te
llin
g, o
f in
stit
uti
on
s th
at a
re r
un
wit
h p
ub
lic f
un
ds.
A c
lick
on
th
e in
tern
et s
ho
ws
wh
ere
Ora
nto
's o
per
atio
ns
are
all o
ver
the
con
tin
ent,
on
its
ow
n w
ebsi
te.
An
gola
an
d M
oza
mb
iqu
e ar
e n
ow
her
e o
n t
he
site
an
d O
ran
to is
no
t h
idin
g; it
is in
th
e n
ews
all
the
tim
e; t
he
late
st (
Au
gust
20
18
), b
ein
g th
at it
h
as w
on
tw
o b
lock
s in
Zam
bia
.
The
Lice
nsi
ng
Ro
un
ds
Bid
s Ev
alu
atio
n a
nd
Neg
oti
atio
n C
om
mit
tee
is p
rep
arin
g fo
r th
e co
un
try'
s fi
rst
bid
din
g ro
un
d a
t th
e en
d o
f 2
01
8. T
he
focu
s o
f th
is d
ebu
t o
uti
ng
will
be
on
th
e W
este
rn B
asin
, bec
ause
th
ere
exis
ts in
fras
tru
ctu
re t
hat
co
uld
fac
ilita
te t
he
dev
elo
pm
ent
of
any
dis
cove
ry m
ade
in t
he
area
. At
the
mo
men
t th
ere
two
gas
pip
elin
es
to s
ho
re, t
hre
e p
rod
uct
ion
fac
iliti
es (
FPSO
s), a
nd
all
thin
gs b
ein
g eq
ual
, a f
ou
rth
FP
SO w
ill
be
in p
lace
by
20
21
.
Fir
st B
id R
ou
nd
Exp
ect
ed
bef
ore
Ye
ar e
nd
Two
Th
ird
s o
f G
han
a’s
Off
sho
re A
rea
Still
Op
en
fo
r In
vest
ors
Gh
ana’
s o
ffsh
ore
bas
ins
(mea
sure
d t
o 3
50
0 m
iso
bat
h)
enco
mp
ass
an a
rea
of
app
roxi
mat
ely
60
,00
0 s
q. k
m. A
bo
ut
23
,09
2 s
q. k
m h
ave
bee
n a
war
ded
to
IOC
s an
d t
he
rest
is o
pen
to
inve
sto
rs.
The Southern Gas Market Is Still Far In The Future
South Africa's largest proven, undeveloped indigenous gas asset; the Ibhubesi gas field, is not in the IRP.
In Namibia, the Kudu gas to power project, meant to develop some of the 1.3Trillion cubic feet of offshore gas reserves into producing 425MW of power for the country, had moved quicker towards fruition between 2015 and 2017 than at any time since it came on the drawing board, or so we assumed.
The planned new gas and renewable energy are coming to replace some of the existing coal fleet, which are going to be progressively decommissioned. South Africa's total electricity generation in the next decade is not expected to be more than incrementally higher than the current 35,000MW operated capacity.
Until Tom Alweendo, the country's minister of Mines and Energy, decided to comment about it.
This “allocation” of natural gas fuelled energy, expected to provide 15.7% of installed capacity in 8-12 years' time (2026-2029), is the most forceful, formal endorsement of natural gas investment into Africa's most industrialised economy. The IRP calls for the gas generated electricity to be used in conjunction with 7,958 MW of solar PV and 11,442 MW of wind PV energy (10.5% and 15.1% of i n s t a l l e d g e n e r a t i o n c a p a c i t y respectively) by 2030. There are over 4,000MW of these renewables already connected into the South African energy grid. The rest are planned to be rolled out annually, with a gap around 2022 to 2025.
To generate 11,900MW requires 3 Billion standard cubic feet of gas a day. There is also no clear line of sight to where that volume of hydrocarbon will come from. South Africa's technical and bureaucratic elite often talk as if the vast reserves of gas in Mozambique are their country's for the asking. The most widely canvassed option of accessing the molecules is to import Liquefied Natural Gas from the North Eastern neighbour. But that is expected to happen after a South African bid process for Gas to Power IPP, in which the winner/s is/are expected to bring in the gas through any of two designated ports in the country and then pipe to turbines. Neither of the two ports, Coega in the Eastern Cape province and Richards Bay, , currently has in Kwazulu Natalinfrastructure for receiving natural gas. The LNG import can only be accessed through a deal with either ENI or Anadarko, who, in developing the three export LNG projects in Mozambique, are currently talking to a number of offtakers, none of which is likely having South Africa on its radar.
That's around four times the allocation of gas to power in the energy mix provided in the last incarnation of the IRP, gazetted in 2011.
So, natural gas is not coming into South African electricity mix as a standalone; the
plan calls for gas generation, which can be deployed and withdrawn from the grid at relatively short notice, to balance wind and solar energy, the availability of which is dependent on weather conditions and time of day.
Another option is to import the gas through a pipeline, no less than 2,000km in length, but what most commentators fail to consider is that none of the LNG developers in Mozambique today is licenced to supply gas into a pipeline. Such supply will not be available until
Mozambiqucan government concessions it and that's unlikely before 2030.South Africa's updated Integrated
Resource Plan IRP, released late August, contains provisions for
introduction of natural gas to produce 11,930MW of electricity in the country by 2029.
Nor is there any likelihood that there would have been any significant movement in developing indigenous South African gas either from onshore Karoo or deepwater orange basin before 2026.
It's important to note that this is just a plan, whose implementation depends on the growth trajectory of the economy and the accessibility to the resource itself.
ELSEWHERE IN THE WIDER SOUTHERN AFRICAN REGION, the investment outlook for the domestic gas market is a mixed bag.
South Africa's economy has tanked. The country is not in demand of energy as much as it was only five years ago.
South Africa's largest proven, undeveloped indigenous gas asset; the Ibhubesi gas is not in the IRP. Located in Block 2A within the Orange Basin, the field contains (estimated so far) proven and probable recoverable reserves of about 540Billion cubic feet of gas and 4.3Million barrels of condensates, stored in channel sands below 250 metres of water. The proposed volume of 100Million standard cubic feet a day is quite minuscule for the scale that the country wants to achieve in the three years it proposes to introduce natural gas into electricity, but there has been a plan by the field's owners, Sunbird Energy (76%) and the state hydrocarbon company PetroSA (24%) to supply gas to state utility Eskom's 588MW Ankerlig power station, as well as customers at Saldanha, an industrial hub in the country's southwest. The project received governmental approval to acquire the production right on Block 2A in October 2013, and the authorities' nod for Environmental Impact Assessment in late 2017. But it has not proceeded as quickly as keen watchers expect.
If there was anyone considered the chief promoter of his country's largest electricity infrastructure project, to outside investors, you would think it was the Minister of Energy. We don't know what Mr. Alweendo's motive is, but he is not entirely correct. The upstream part of the project: developing the gas reserves and getting them to flow, is sorted. BW Offshore holds 56% equity to state hydrocarbon company Namcor's 44% on that segment of the project. K n u t S æ t h r e , t h e company's Chief Finance O f f i c e r , s a y s t h a t BWOffshore is working towards a possible Final Investment Decision. This has been the most progressive statement on Kudu Gas to power since the field's discovery. But upstream delivery relies on downstream offtake. What is far less certain is the profitability of the entire chain from pumping the gas into turbines which generate the power to transmitting and distributing the electricity. A significant fraction of required funding for the electricity production and supply is expected to be raised by debt, but this is far from a done deal. Just as Namcor has no money on the table for the upstream part, so does state power utility Nampower has no money for the power generation and uptake investment. The challenge has always been that the Namibian state itself has never wanted to give any thought to creative models of funding a project that will free it up from begging other countries to supply it power.
“I have been hearing this thing for a very long time now”, the Minister, appointed to the office last February, told the Namibia Broadcasting Corporation. “I am not convinced that it is viable unless you show me otherwise”, Alweendo said in August 2018. “if the project was viable it would have happened already. If it did not happen for the last 25 years, there is something wrong.”
By Toyin AkinoshoPublisher
KI
CK
ST
AR
TE
R
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 84
Vo
l 19,
No
8, O
cto
ber
201
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyrig
ht 2
018,
AFRI
CA O
IL+G
AS R
EPO
RT
SEP
TEM
BER
20
18
UP
DA
TE
Ake
r W
ill S
pu
d P
eca
n 4
in N
ove
mb
er
Ake
r En
ergy
, wh
o p
urc
has
ed H
ess
Co
rp's
Gh
ana
inte
rest
less
th
an n
ine
mo
nth
s ag
o, h
as s
et
to w
ork
on
th
e ac
reag
e. T
he
Mae
rsk
Dri
llin
g o
per
ated
ult
ra d
eep
wat
er d
rills
hip
Ma
ersk
V
ikin
g w
ill s
pu
d t
he
Peca
n-4
A a
pp
rais
al w
ell l
ates
t N
ove
mb
er 2
01
8.
Will
Am
ni D
rill
in C
en
tral
Tan
o in
20
19
?W
ill A
mn
i Pet
role
um
en
tire
ly f
un
d t
he
firs
t o
f it
s tw
o o
blig
atio
n w
ells
off
sho
re G
han
a, in
20
19
, if
it
can
't f
ind
a p
artn
er?
For
ove
r 1
5 m
on
ths
the
Nig
eria
n o
per
ato
r h
as b
een
in s
earc
h o
f a
wel
l h
eele
d f
arm
inee
will
ing
to e
arn
up
to
a 4
0 %
eq
uit
y in
th
e C
entr
al T
ano
Blo
ck b
y fu
nd
ing
the
two
o
blig
atio
n w
ells
(es
t. d
ry h
ole
co
st $
45
Mill
ion
ea
ch).
Am
ni p
rod
uce
s 1
4,0
00
BO
PD
fro
m t
wo
fie
lds
off
sho
re N
iger
ia.
The
re's
Sti
ll 6
00
Mill
ion
B
arre
ls in
th
e
Tullo
w/K
osm
os
De
ep
wat
er
Tan
o A
cre
age
Tullo
w O
il b
elie
ves
that
so
me
24
4M
MB
O 2
C d
isco
vere
d
reso
urc
es r
emai
n t
o b
e d
evel
op
ed in
Gh
ana
and
th
ere
are
som
e 5
70
MM
BO
of
dis
cove
red
up
sid
e p
ote
nti
al,
in t
he
acre
ages
in w
hic
h
itsh
as p
osi
tio
ns.
It s
ays
it
wan
ts t
o “
rep
len
ish
res
erve
s w
ith
rap
id r
etu
rn o
n
inve
stm
ent
The
Pu
blic
Inte
rest
an
d A
cco
un
tab
ility
C
om
mit
tee,
(th
e cl
ose
st t
o a
n E
xtra
ctiv
e In
du
stri
es T
ran
par
ency
Init
iati
ve in
Gh
ana)
, re
po
rts
that
th
e G
han
a N
atio
nal
Gas
Co
rpo
rati
on
(G
NG
C)
“may
wel
l hav
e b
een
cau
ght
up
in t
he
vici
ou
s cy
cle
of
ind
ebte
dn
ess
of
the
ener
gy
sect
or
uti
litie
s (w
hic
h s
too
d a
t $
2.4
Bill
ion
at
the
end
of
20
16
)”. T
he
Co
mm
itte
e's
late
st r
epo
rt s
ays
that
“In
20
17
alo
ne,
Vo
lta
Riv
er A
uth
ori
ty V
RA
, th
e st
ate
elec
tric
ity
uti
lity,
rec
eive
d le
an g
as
wo
rth
$2
79
,91
0,1
18
.08
fro
m G
NG
C, b
ut
has
no
t p
aid
up
, in
curr
ing
US$
16
,73
7,5
31
.29
in in
tere
st
to G
NG
C”.
Gh
ana
Gas
Cau
ght
In V
icio
us
Cyc
le o
f D
eb
t
Fo
r G
ha
na
's T
ax
ma
n,
Ora
nto
is
Hid
ing
In
Pla
in S
igh
tG
han
a R
even
ue
Au
tho
rity
cla
ims
that
Ora
nto
, th
e N
iger
ian
ow
ned
E&
P c
om
pan
y, “
has
bee
n
loca
ted
in A
ngo
la a
nd
Mo
zam
biq
ue”
. Th
is is
in
resp
on
se t
o a
rep
ort
th
at t
he
com
pan
y, in
p
artn
ersh
ip w
ith
Sto
ne
Ener
gy “
has
sti
ll n
ot
ho
no
ure
d a
n o
uts
tan
din
g su
rfac
e re
nta
l in
voic
e o
f $
67
,43
8.3
6 s
ince
Feb
ruar
y 2
01
3”,
acc
ord
ing
to t
he
20
17
rep
ort
of
Pu
blic
Inte
rest
an
d
Acc
ou
nta
bili
ty C
om
mit
tee.
Th
e P
IAC
th
en
reco
mm
end
s th
at t
he
GR
A s
ho
uld
“co
llab
ora
te
wit
h t
he
rele
van
t au
tho
riti
es in
th
ese
juri
sdic
tio
ns
to r
etri
eve
the
mo
ney
”. T
he
clai
m,
by
GR
A ,o
f O
ran
to's
alle
ged
loca
tio
n a
nd
th
e re
com
men
dat
ion
, by
PIA
C r
egar
din
g re
trie
vin
g O
ran
to's
deb
t ar
e q
uit
e te
llin
g, o
f in
stit
uti
on
s th
at a
re r
un
wit
h p
ub
lic f
un
ds.
A c
lick
on
th
e in
tern
et s
ho
ws
wh
ere
Ora
nto
's o
per
atio
ns
are
all o
ver
the
con
tin
ent,
on
its
ow
n w
ebsi
te.
An
gola
an
d M
oza
mb
iqu
e ar
e n
ow
her
e o
n t
he
site
an
d O
ran
to is
no
t h
idin
g; it
is in
th
e n
ews
all
the
tim
e; t
he
late
st (
Au
gust
20
18
), b
ein
g th
at it
h
as w
on
tw
o b
lock
s in
Zam
bia
.
The
Lice
nsi
ng
Ro
un
ds
Bid
s Ev
alu
atio
n a
nd
Neg
oti
atio
n C
om
mit
tee
is p
rep
arin
g fo
r th
e co
un
try'
s fi
rst
bid
din
g ro
un
d a
t th
e en
d o
f 2
01
8. T
he
focu
s o
f th
is d
ebu
t o
uti
ng
will
be
on
th
e W
este
rn B
asin
, bec
ause
th
ere
exis
ts in
fras
tru
ctu
re t
hat
co
uld
fac
ilita
te t
he
dev
elo
pm
ent
of
any
dis
cove
ry m
ade
in t
he
area
. At
the
mo
men
t th
ere
two
gas
pip
elin
es
to s
ho
re, t
hre
e p
rod
uct
ion
fac
iliti
es (
FPSO
s), a
nd
all
thin
gs b
ein
g eq
ual
, a f
ou
rth
FP
SO w
ill
be
in p
lace
by
20
21
.
Fir
st B
id R
ou
nd
Exp
ect
ed
bef
ore
Ye
ar e
nd
Two
Th
ird
s o
f G
han
a’s
Off
sho
re A
rea
Still
Op
en
fo
r In
vest
ors
Gh
ana’
s o
ffsh
ore
bas
ins
(mea
sure
d t
o 3
50
0 m
iso
bat
h)
enco
mp
ass
an a
rea
of
app
roxi
mat
ely
60
,00
0 s
q. k
m. A
bo
ut
23
,09
2 s
q. k
m h
ave
bee
n a
war
ded
to
IOC
s an
d t
he
rest
is o
pen
to
inve
sto
rs.
The Southern Gas Market Is Still Far In The Future
South Africa's largest proven, undeveloped indigenous gas asset; the Ibhubesi gas field, is not in the IRP.
www.africaoilgasreport.com
Vol 19, No 8, Octoberr 2018
report
This is the least encouraging statement Ophir has made on a project it described, just a year ago, its top priority.- Fortuna: If Ophir Loses, the State Will Still Gain. Full story in Gas Monetisation section, Page 39.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence”, Ophir Energy says in the second sentence in its report. “Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300Million.”
Ophir is Going…Going…
IN THIS ISSUEIN THIS ISSUEIN THIS ISSUECOVER STORIES
CONFERENCES, MEETINGS, EVENTSOctober 31-02, November 2018
Maputo, Mozambique.
www.mozambique-gas-summit.com
+44 20 7978 0086
Africa Oil Week 2018
November 05-09, 2018
5th Mozambique Gas Summit &
Exhibition
Multi-use Hall, Joaquin Chissano
International Conference Centre,
Cape Town, South Africa
www.Africa-oilweek.com
+44 (0) 207 384 8384
November 13-15, 2018
Gas Options North & West Africa
Venue: Eko Hotel and Suites, Victoria
Island, Lagos.
Tel: 09092143198, 01-3429082
Marrakech, Morocco
www.gasoptions-nwafrica.com
November 18 - 22 , 2018
36th Annual International Conference
and Exhibitions 2018
www.algeria-future-energy.com
Oil &Gas Tanzania
+44 20 7978 0081
www.futureenergyafrica.com
www.cwceg.com
Dakar, Senegal
Malabo, Equatorial Guinea.
Algeria Future Energy
October 22-October 24, 2018
Sipopo Conferece Centre,
oilandgascouncil.com/event-events/msgbc-basin-summit/
October 29-30, 2018
Oct 04-05, 2018Equatorial Guinea Gas Summit & Exhibition
+44 20 7978 0086
MSGBC Basin Summit & Exhibition
Future Energy Africa Exhibition and ConferenceOct 01-03, 2018
Cape town international convention centre, south africa
+971 4 248 3221
CIC d'alger, Algeria.
October 10-October 13, 2018
Dar es Salaam, Tanzaniahttps://www.clocate.com/conference/4th-Oil-and-Gas-Tanzania-2018/48067/
The West African International Petroleum Exhibition and Conference (WAIPEC)
www.igcs-sa.com
http://waipec.com/
EPIC SANA Luanda Hotel,
+44 7850 025295
Feb 11-13, 2019
http://ametrade.org
International Gas Cooperation Summit
+44 207 700 4949
Eko Convention Centre, Lagos
nd2 Africa Oil & Gas Local Content Conference & Exhibition
December 10-12, 2018
Luanda, Angola.
+44 7904 060927
Egypt International Exhibition Center, Egypt
080 372 55190
Cape Town, South Africa
Egypt Petroleum Show 2019 (EGYPS)
November 26 – 27, 2018
January 23-24, 2019
COVER PHOTO: Tony Attah, Chief Executive of the Nigerian Liquefied Natural Gas Limited
Pages: 32 - 34Pages: 32 - 34Pages: 32 - 34
FROM THE EDITOR
KICKSTARTER
IN THE NEWS
COMPANY UPDATE
PETROLEUM PEOPLE
OIL PATCH SAHARA
OIL PATCH SUBSAHARA
FARM IN FARM OUT
SOUTHERN AFRICA ANNUAL
MIDSTREAM /REFINING
MARITIME ISSUES
GAS MONETISATION
REFINING GAP
26
29
32
35
39
44
03
04
10
17
18
20
21
CO
NT
EN
TS
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 86
www.africaoilgasreport.com
Vol 19, No 8, Octoberr 2018
report
This is the least encouraging statement Ophir has made on a project it described, just a year ago, its top priority.- Fortuna: If Ophir Loses, the State Will Still Gain. Full story in Gas Monetisation section, Page 39.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence”, Ophir Energy says in the second sentence in its report. “Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300Million.”
Ophir is Going…Going…
IN THIS ISSUEIN THIS ISSUEIN THIS ISSUECOVER STORIES
CONFERENCES, MEETINGS, EVENTSOctober 31-02, November 2018
Maputo, Mozambique.
www.mozambique-gas-summit.com
+44 20 7978 0086
Africa Oil Week 2018
November 05-09, 2018
5th Mozambique Gas Summit &
Exhibition
Multi-use Hall, Joaquin Chissano
International Conference Centre,
Cape Town, South Africa
www.Africa-oilweek.com
+44 (0) 207 384 8384
November 13-15, 2018
Gas Options North & West Africa
Venue: Eko Hotel and Suites, Victoria
Island, Lagos.
Tel: 09092143198, 01-3429082
Marrakech, Morocco
www.gasoptions-nwafrica.com
November 18 - 22 , 2018
36th Annual International Conference
and Exhibitions 2018
www.algeria-future-energy.com
Oil &Gas Tanzania
+44 20 7978 0081
www.futureenergyafrica.com
www.cwceg.com
Dakar, Senegal
Malabo, Equatorial Guinea.
Algeria Future Energy
October 22-October 24, 2018
Sipopo Conferece Centre,
oilandgascouncil.com/event-events/msgbc-basin-summit/
October 29-30, 2018
Oct 04-05, 2018Equatorial Guinea Gas Summit & Exhibition
+44 20 7978 0086
MSGBC Basin Summit & Exhibition
Future Energy Africa Exhibition and ConferenceOct 01-03, 2018
Cape town international convention centre, south africa
+971 4 248 3221
CIC d'alger, Algeria.
October 10-October 13, 2018
Dar es Salaam, Tanzaniahttps://www.clocate.com/conference/4th-Oil-and-Gas-Tanzania-2018/48067/
The West African International Petroleum Exhibition and Conference (WAIPEC)
www.igcs-sa.com
http://waipec.com/
EPIC SANA Luanda Hotel,
+44 7850 025295
Feb 11-13, 2019
http://ametrade.org
International Gas Cooperation Summit
+44 207 700 4949
Eko Convention Centre, Lagos
nd2 Africa Oil & Gas Local Content Conference & Exhibition
December 10-12, 2018
Luanda, Angola.
+44 7904 060927
Egypt International Exhibition Center, Egypt
080 372 55190
Cape Town, South Africa
Egypt Petroleum Show 2019 (EGYPS)
November 26 – 27, 2018
January 23-24, 2019
COVER PHOTO: Tony Attah, Chief Executive of the Nigerian Liquefied Natural Gas Limited
Pages: 32 - 34Pages: 32 - 34Pages: 32 - 34
FROM THE EDITOR
KICKSTARTER
IN THE NEWS
COMPANY UPDATE
PETROLEUM PEOPLE
OIL PATCH SAHARA
OIL PATCH SUBSAHARA
FARM IN FARM OUT
SOUTHERN AFRICA ANNUAL
MIDSTREAM /REFINING
MARITIME ISSUES
GAS MONETISATION
REFINING GAP
26
29
32
35
39
44
03
04
10
17
18
20
21
CO
NT
EN
TS
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 86
Vol 1
9 N
o 8,
Oct
ober
201
8
NIG
ERIA
N IN
DEP
END
ENTS
: UPS
TREA
M A
CTIV
ITY
MA
P ©
Copy
right
201
8,
AFRI
CA O
IL+G
AS R
EPO
RT
SEP
TEM
BER
20
18
UP
DA
TE
repo
rtw
ww
.afric
aoilg
asre
port.
com
FOLA
WIY
O A
ND
PA
RTN
ERS
Pip
elin
e C
om
pan
y an
d t
he
Lago
s St
ate
Go
vern
men
t.ar
e h
op
ing
to e
xecu
te G
as S
ale
Agr
eem
ents
wit
h W
est
Afr
ican
Gas
has
bee
n s
ub
mit
ted
to
Nig
eria
n r
egu
lato
ry a
uth
ori
ties
. Par
tner
s A
Fie
ld D
evel
op
men
t P
lan
fo
r th
e Tu
ron
ian
Gas
dev
elo
pm
ent
OM
L 1
13
-Aje
Fie
ld A
ugu
st 2
01
8 P
rod
uct
ion
: 3
,20
0B
OP
D
NP
DC
/NEC
ON
DE
JVO
ML
42�
The
NP
DC
/NEC
ON
DE
JV r
eco
rded
ab
ou
t 6
1,7
53
BO
PD
gro
ss
pro
du
ctio
n (
27
,78
9B
OP
D n
et t
o
Nec
on
de)
in A
ugu
st 2
01
8
NP
DC
/ND
WES
TER
NO
ML
34
Gro
ss J
V P
rod
uct
ion
in A
ugu
st 2
01
8
aver
aged
16
,18
2B
OP
D (
7,2
82
BO
PD
n
et t
o N
DW
ESTE
RN
)
NN
PC
/ER
OTO
N J
VO
ML
18
NN
PC
/ER
OTO
N J
V a
vera
ged
20
18
. Eq
uit
y to
ER
OTO
N w
as
The
ERO
TON
E&
P o
per
ated
42
,00
0B
OP
D g
ross
in A
ugu
st
18
,90
0B
OP
D.
NN
PC
/AIT
EO J
V
Au
gust
–Gro
ss p
rod
uct
ion
ave
rage
d8
3,0
00
BO
PD
(29
,25
0B
OP
D n
et t
o A
ITEO
).
OM
L 2
9
OM
Ls 4
, 38
& 4
1A
ugu
st 2
01
8-
Gro
ss P
rod
uct
ion
Ave
rage
w
as 6
3,2
46
BO
PD
fo
r th
ese
thre
e ac
reag
es (
28
,46
1B
OP
D n
et t
o S
epla
t)
NP
DC
/Se
pla
t
SHEL
L
AG
IP
TOTA
L
AD
DA
X
NP
DC
SEP
LAT
PAN
OC
EAN
MO
BIL
CH
EVR
ON
Gro
ss o
il p
rod
uct
ion
in
Au
gust
20
18
was
1
4,8
52
BO
PD
(6
,68
3B
OP
D n
et t
o
Elcr
est)
NP
DC
/ELC
RES
TO
ML
40
NP
DC
/FIR
ST H
YD
RO
CA
RB
ON
NIG
ERIA
Gro
ss o
il p
rod
uct
ion
in A
ugu
st 2
01
8 w
as
3,5
06
BO
PD
(1
,57
7B
OP
D n
et t
o F
HN
)
OM
L 2
6
OM
L 2
4Th
e N
ewcr
oss
E&
P o
per
ated
10
,80
0B
OP
D.
20
18
. Eq
uit
y to
New
cro
ss w
as2
4,0
00
BO
PD
gro
ss in
Au
gust
NN
PC
/NEW
CR
OSS
JV
NN
PC
/New
cro
ss J
V a
vera
ged
OP
TIM
UM
/LEK
OIL
LEKO
IL h
as c
om
men
ced
lega
l p
roce
edin
gs a
gain
st t
he
Nig
eria
n
Min
iste
r o
f Pe
tro
leu
m R
eso
urc
es ,
on
ac
cou
nt
of
the
Go
vern
men
t's
alle
ged
fa
ilure
to
gra
nt
con
sen
t fo
r it
s in
vest
men
t in
Oil
Pro
spec
tin
g Le
ase
(OP
L) 3
10
, fo
llow
ing
its
acq
uis
itio
n o
f p
revi
ou
s st
ake
ho
ldin
g b
y A
fren
Plc
.
OM
L 3
0G
ross
oil
pro
du
ctio
n in
Au
gust
20
18
was
4
9,0
99
BO
PD
(2
2,0
95
BO
PD
net
to
Sh
ore
line)
NP
DC
/Sh
ore
line
Nat
ura
l Re
sou
rce
s
NN
PC
/BEL
EMA
OIL
OM
L 5
5
Au
gust
20
18
gro
ss o
utp
ut
was
9,8
00
BO
PD
. Sep
lat
was
enti
tled
to
2,0
93
BO
PD
(o
r 2
2.5
%)
of
this
as
a re
sult
of
a
fin
anci
ng
arra
nge
men
t. N
NP
C e
qu
ity
is 6
0%
. Op
erat
or
Bel
emao
il w
as e
nti
tled
to
1,6
27
BO
PD
.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 88
Vol 1
9 N
o 8,
Oct
ober
201
8
NIG
ERIA
N IN
DEP
END
ENTS
: UPS
TREA
M A
CTIV
ITY
MA
P ©
Copy
right
201
8,
AFRI
CA O
IL+G
AS R
EPO
RT
SEP
TEM
BER
20
18
UP
DA
TE
repo
rtw
ww
.afric
aoilg
asre
port.
com
FOLA
WIY
O A
ND
PA
RTN
ERS
Pip
elin
e C
om
pan
y an
d t
he
Lago
s St
ate
Go
vern
men
t.ar
e h
op
ing
to e
xecu
te G
as S
ale
Agr
eem
ents
wit
h W
est
Afr
ican
Gas
has
bee
n s
ub
mit
ted
to
Nig
eria
n r
egu
lato
ry a
uth
ori
ties
. Par
tner
s A
Fie
ld D
evel
op
men
t P
lan
fo
r th
e Tu
ron
ian
Gas
dev
elo
pm
ent
OM
L 1
13
-Aje
Fie
ld A
ugu
st 2
01
8 P
rod
uct
ion
: 3
,20
0B
OP
D
NP
DC
/NEC
ON
DE
JVO
ML
42�
The
NP
DC
/NEC
ON
DE
JV r
eco
rded
ab
ou
t 6
1,7
53
BO
PD
gro
ss
pro
du
ctio
n (
27
,78
9B
OP
D n
et t
o
Nec
on
de)
in A
ugu
st 2
01
8
NP
DC
/ND
WES
TER
NO
ML
34
Gro
ss J
V P
rod
uct
ion
in A
ugu
st 2
01
8
aver
aged
16
,18
2B
OP
D (
7,2
82
BO
PD
n
et t
o N
DW
ESTE
RN
)
NN
PC
/ER
OTO
N J
VO
ML
18
NN
PC
/ER
OTO
N J
V a
vera
ged
20
18
. Eq
uit
y to
ER
OTO
N w
as
The
ERO
TON
E&
P o
per
ated
42
,00
0B
OP
D g
ross
in A
ugu
st
18
,90
0B
OP
D.
NN
PC
/AIT
EO J
V
Au
gust
–Gro
ss p
rod
uct
ion
ave
rage
d8
3,0
00
BO
PD
(29
,25
0B
OP
D n
et t
o A
ITEO
).
OM
L 2
9
OM
Ls 4
, 38
& 4
1A
ugu
st 2
01
8-
Gro
ss P
rod
uct
ion
Ave
rage
w
as 6
3,2
46
BO
PD
fo
r th
ese
thre
e ac
reag
es (
28
,46
1B
OP
D n
et t
o S
epla
t)
NP
DC
/Se
pla
t
SHEL
L
AG
IP
TOTA
L
AD
DA
X
NP
DC
SEP
LAT
PAN
OC
EAN
MO
BIL
CH
EVR
ON
Gro
ss o
il p
rod
uct
ion
in
Au
gust
20
18
was
1
4,8
52
BO
PD
(6
,68
3B
OP
D n
et t
o
Elcr
est)
NP
DC
/ELC
RES
TO
ML
40
NP
DC
/FIR
ST H
YD
RO
CA
RB
ON
NIG
ERIA
Gro
ss o
il p
rod
uct
ion
in A
ugu
st 2
01
8 w
as
3,5
06
BO
PD
(1
,57
7B
OP
D n
et t
o F
HN
)
OM
L 2
6
OM
L 2
4Th
e N
ewcr
oss
E&
P o
per
ated
10
,80
0B
OP
D.
20
18
. Eq
uit
y to
New
cro
ss w
as2
4,0
00
BO
PD
gro
ss in
Au
gust
NN
PC
/NEW
CR
OSS
JV
NN
PC
/New
cro
ss J
V a
vera
ged
OP
TIM
UM
/LEK
OIL
LEKO
IL h
as c
om
men
ced
lega
l p
roce
edin
gs a
gain
st t
he
Nig
eria
n
Min
iste
r o
f Pe
tro
leu
m R
eso
urc
es ,
on
ac
cou
nt
of
the
Go
vern
men
t's
alle
ged
fa
ilure
to
gra
nt
con
sen
t fo
r it
s in
vest
men
t in
Oil
Pro
spec
tin
g Le
ase
(OP
L) 3
10
, fo
llow
ing
its
acq
uis
itio
n o
f p
revi
ou
s st
ake
ho
ldin
g b
y A
fren
Plc
.
OM
L 3
0G
ross
oil
pro
du
ctio
n in
Au
gust
20
18
was
4
9,0
99
BO
PD
(2
2,0
95
BO
PD
net
to
Sh
ore
line)
NP
DC
/Sh
ore
line
Nat
ura
l Re
sou
rce
s
NN
PC
/BEL
EMA
OIL
OM
L 5
5
Au
gust
20
18
gro
ss o
utp
ut
was
9,8
00
BO
PD
. Sep
lat
was
enti
tled
to
2,0
93
BO
PD
(o
r 2
2.5
%)
of
this
as
a re
sult
of
a
fin
anci
ng
arra
nge
men
t. N
NP
C e
qu
ity
is 6
0%
. Op
erat
or
Bel
emao
il w
as e
nti
tled
to
1,6
27
BO
PD
.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 88
IN
T
HE
NE
WS
The model is to focus on small to medium sized E&P companies with exist ing undeveloped reservoirs, and offer them field development capabilities through partnership models.For this BWOffshore created a subsidiary BWEnergy Holdings (BWEH)Pte Ltd, which is
66.7% owned by BWOffshore and 33.33% owned by the BW Group.BW Offshore, the Norwegian provider
of floating production vessels, has commissioned its first self-operated
oilfield.
The BW Adolo is a converted VLCC with a production capacity of 40,000 barrels of oil per day. The vessel has undergone an increased life extension scope enabling an extended production profile on the back of positive reserve developments.
The production facility arrived in Gabon in late July and hook up of mooring systems and installation of risers and umbilicals were completed in September. The FPSO is installed on the Tortue field, one of five proven discoveries in the Dussafu license.
To be an efficient operator of an oilfield is a deep dive for BWOffshore.“We've been developing in-house capabilities within drilling, reservoir and geoscience and matching existing assets with high assurance of hydrocarbon resources”, BWOffshore CEO Carl Arnett says. The priority, he adds in an investor update, is making Dussafu a success
In early 2017, BWEH concluded a transaction to take over 91.667% working interest in the Dussafu production sharing contract, with Panoro Energy, the original licence holder, holding the remaining 8.33% working interest in the Dussafu license.
"Our first priority now is to complete start-up activities and stabilise production on BW Adolo. We will at the same time work towards the final investment decision on Tortue Phase 2, which will unlock additional production
volumes, and continue the appraisal program of the recently announced discovery at Ruche NE as well as to confirm additional resources and strengthen the commerciality of the Dussafu license,
BW Offshore is primarily a service company, which designs, builds, installs and operates FPSOs, but it embarked on a search for access to proven reserves in 2016, after low oil prices squeezed the market for new FPSOs.
The company reports it safely achieved first oil from the BW Adolo FPSO on 16 September 2018, eighteen months after the initial investment was made in the Dussafu license offshore Gabon.
It's BW Offshore's First Operated Oilfield; It's Located Offshore Gabon
The company has been the operator of Oil Mining Lease (OML) 18, onshore Eastern Nigeria, since September 2015. Eroton averaged 38,578BOPD (after downtime)
production before pipeline losses for the first six months of 2018, or 46,086BOPD on a producing days basis.The company was planning to ramp up well activity, as this magazine went to press. A rig should be on the Akaso field by November, to drill an infill well. Further wells are planned afterwards. Eroton is also awaiting regulatory permits to commence operations on the Buguma field.
Three of the five planned Lease Automatic Custody Transfer (LACT) units are now operational in the field (on Alakiri, Krakama and Cawthorne-1 production areas), with units on Cawthorne-2 and Cawthorne-3 expected to be operational around the start of the fourth quarter of 2018.
he Nigerian independent Eroton, can Tproduce as much as 49,000 barrels of oil per day (BOPD) today, if there were
no oil theft on the pipelines, claims of losses along the evacuation route by the terminal operator.
Trouble Free Production for Eroton is Close to 50,000BOPD
It is now clear that there will be a new dedicated pipeline and offshore Floating Storage and Offloading (FSO) system.
roton is targeting to stop pumping its Ecrude through the Nembe Creek Trunk Line (NCTL by Third Quarter 2019.
The company had, for over a year, been evaluating a number of independent alternative oil evacuation routes that will improve consistency of supply of its crude oil, produced from the Oil Mining Lease (OML) 18
to the market.
Eroton is leaving NCTL for two main reasons: Tank tops and cargo shipping delays at the Bonny Terminal, as well as intermittent upstream outages on the Nembe Creek Trunk
Line pipeline (“NCTL”), the export pipeline used to transport oil to the Bonny Terminal, has resulted in material production downtime at OML 18. The second is Pipeline Losses, claimed by Shell Nigeria, operator of the Bonny Terminal, which Eroton finds dubious.
…..Has A Firmer Date to Exit Nembe Creek Trunk Line
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 810
NPC officials are privately cautioning Nagainst the popular description of the corporation's pay off of the cash call
arrears on JV operations and the associated suite of alternative funding as “exit from cash calls”.
Legacy arrears are being paid off; ongoing obligations are disposed of without having to put them into the national budget and significant projects are funded through banks.
“We try to pay them as promptly as we do the IOCs, but their threshold for pain is far lower
than the majors'; once you owe as little as $20Million they scream”, one source says. Plus, the Central Bank takes an inordinate amount of time in paying monies approved by the NNPC to the companies, the sources allege. “Some approval made for payment in June 2018 were still waiting on esteemed tables at the Central Bank as of end of August 2018 but the affected companies would think we haven't paid”.
The officials say that “there will always be cash calls as long as the Joint Venture exists in unincorporated form”, but what is fundamental now is that whatever NNPC is expected to pay on an ongoing basis is
deducted as a first line charge.
The sources disagree that NNPC Joint Ventures with the indigenous companies do not get as much priority attention as the JVs with the majors.
NNPC-It's Not Cash Call Exit: It's First Line Charge
IN
T
HE
NE
WS
The model is to focus on small to medium sized E&P companies with exist ing undeveloped reservoirs, and offer them field development capabilities through partnership models.For this BWOffshore created a subsidiary BWEnergy Holdings (BWEH)Pte Ltd, which is
66.7% owned by BWOffshore and 33.33% owned by the BW Group.BW Offshore, the Norwegian provider
of floating production vessels, has commissioned its first self-operated
oilfield.
The BW Adolo is a converted VLCC with a production capacity of 40,000 barrels of oil per day. The vessel has undergone an increased life extension scope enabling an extended production profile on the back of positive reserve developments.
The production facility arrived in Gabon in late July and hook up of mooring systems and installation of risers and umbilicals were completed in September. The FPSO is installed on the Tortue field, one of five proven discoveries in the Dussafu license.
To be an efficient operator of an oilfield is a deep dive for BWOffshore.“We've been developing in-house capabilities within drilling, reservoir and geoscience and matching existing assets with high assurance of hydrocarbon resources”, BWOffshore CEO Carl Arnett says. The priority, he adds in an investor update, is making Dussafu a success
In early 2017, BWEH concluded a transaction to take over 91.667% working interest in the Dussafu production sharing contract, with Panoro Energy, the original licence holder, holding the remaining 8.33% working interest in the Dussafu license.
"Our first priority now is to complete start-up activities and stabilise production on BW Adolo. We will at the same time work towards the final investment decision on Tortue Phase 2, which will unlock additional production
volumes, and continue the appraisal program of the recently announced discovery at Ruche NE as well as to confirm additional resources and strengthen the commerciality of the Dussafu license,
BW Offshore is primarily a service company, which designs, builds, installs and operates FPSOs, but it embarked on a search for access to proven reserves in 2016, after low oil prices squeezed the market for new FPSOs.
The company reports it safely achieved first oil from the BW Adolo FPSO on 16 September 2018, eighteen months after the initial investment was made in the Dussafu license offshore Gabon.
It's BW Offshore's First Operated Oilfield; It's Located Offshore Gabon
The company has been the operator of Oil Mining Lease (OML) 18, onshore Eastern Nigeria, since September 2015. Eroton averaged 38,578BOPD (after downtime)
production before pipeline losses for the first six months of 2018, or 46,086BOPD on a producing days basis.The company was planning to ramp up well activity, as this magazine went to press. A rig should be on the Akaso field by November, to drill an infill well. Further wells are planned afterwards. Eroton is also awaiting regulatory permits to commence operations on the Buguma field.
Three of the five planned Lease Automatic Custody Transfer (LACT) units are now operational in the field (on Alakiri, Krakama and Cawthorne-1 production areas), with units on Cawthorne-2 and Cawthorne-3 expected to be operational around the start of the fourth quarter of 2018.
he Nigerian independent Eroton, can Tproduce as much as 49,000 barrels of oil per day (BOPD) today, if there were
no oil theft on the pipelines, claims of losses along the evacuation route by the terminal operator.
Trouble Free Production for Eroton is Close to 50,000BOPD
It is now clear that there will be a new dedicated pipeline and offshore Floating Storage and Offloading (FSO) system.
roton is targeting to stop pumping its Ecrude through the Nembe Creek Trunk Line (NCTL by Third Quarter 2019.
The company had, for over a year, been evaluating a number of independent alternative oil evacuation routes that will improve consistency of supply of its crude oil, produced from the Oil Mining Lease (OML) 18
to the market.
Eroton is leaving NCTL for two main reasons: Tank tops and cargo shipping delays at the Bonny Terminal, as well as intermittent upstream outages on the Nembe Creek Trunk
Line pipeline (“NCTL”), the export pipeline used to transport oil to the Bonny Terminal, has resulted in material production downtime at OML 18. The second is Pipeline Losses, claimed by Shell Nigeria, operator of the Bonny Terminal, which Eroton finds dubious.
…..Has A Firmer Date to Exit Nembe Creek Trunk Line
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 810
NPC officials are privately cautioning Nagainst the popular description of the corporation's pay off of the cash call
arrears on JV operations and the associated suite of alternative funding as “exit from cash calls”.
Legacy arrears are being paid off; ongoing obligations are disposed of without having to put them into the national budget and significant projects are funded through banks.
“We try to pay them as promptly as we do the IOCs, but their threshold for pain is far lower
than the majors'; once you owe as little as $20Million they scream”, one source says. Plus, the Central Bank takes an inordinate amount of time in paying monies approved by the NNPC to the companies, the sources allege. “Some approval made for payment in June 2018 were still waiting on esteemed tables at the Central Bank as of end of August 2018 but the affected companies would think we haven't paid”.
The officials say that “there will always be cash calls as long as the Joint Venture exists in unincorporated form”, but what is fundamental now is that whatever NNPC is expected to pay on an ongoing basis is
deducted as a first line charge.
The sources disagree that NNPC Joint Ventures with the indigenous companies do not get as much priority attention as the JVs with the majors.
NNPC-It's Not Cash Call Exit: It's First Line Charge
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 13
COMPANY NAME
OPERATED
Prdn (BOPD)
EQUITY Prdn
(BOPD)
GROSS Field
Prdn (BOPD) ACREAGES LICENCE TYPES
KEY PRODUCING
FIELD
NPDC 175,768 138,511 238,741OMLs 4, 26, 30, 34, 38,
41, 65, 66, 111, 119JV, PSC Okono
AITEO 83,000 37,350 83,000 OML 29 JV Nembe Creek
SEPLAT - Note 1 66,246 31,754 75,546 OMLs 4, 38, 41, 53, 55 JV Oben, Sapele
EROTON 42,000 18,900 42,000 OML 18 JVCawthorne
Channel
NEWCROSS E&P 24,000 10,800 24,000 OML 24 JV Ekulama
ORIENTAL 22,000 22,000 22,000 EBOK Marginal Field Ebok
CONOIL 20,000 20,000 20,000 OMLs 59, 103 Sole Risk Otuo South
MIDWESTERN 18,000 12,600 18,000 UMUSADEGE Marginal Field Umusadege
AMNI PETROLEUM 14,019 14,019 14,019 OMLs 112, 117 Sole Risk Okoro
BELEMAOIL 9,300 1,627 9,300 OML 55 JV Robertkiri
NIGER DELTA PETROLEUM 6,500 6,500 6,500 OGBELE FIELD Marginal Field Ogbele
GREEN ENERGY/LEKOIL 6,000
6,000
6,000
OTAKIKPO Marginal Field Otakikpo
PAN OCEAN 5,500 2,200
5,500
OML 98 JV Ogharefe
WALTER SMITH 5,500
5,500
5,500
IBIGWE FIELD Marginal Field Ibigwe
ENERGIA 3,500 1,846 3,500 EBENDO Marginal Field Ebendo
PLATFORM 3,400 1,360 3,400 EGBEOMA FIELD Marginal Field, JV Egbeoma Field
YINKA FOLAWIYO 3,200
3,200
3,200
OML 113 Sole Risk Aje Field
MONI PULO 3,000
3,000
3,000
OML 114 Sole Risk Abana
PILLAR OIL 2,800
1,680
2,800
UMUSETI Marginal Field Umuse�
NECONDE AMT 27,789
61,753
OML 42 JV Jones Creek
SHORELINE NAT' RESOURCES AMT 22,095
49,099
OML 30 JV Afiesere
ND WESTERN AMT 7,282
16,182
OML 34 JVUghelli, Warri
River
ELCREST AMT 6,683
14,852
OML 40 JV Opuama
FIRST HYDROCARBON AMT 1,577
3,506
OML 26 JV Ogini
FAMFA - Note 3 NIL 20,000
238,000
OML 127 Sole RiskAgbami Field
(Deepwater)
OANDO ER - Note 2 NIL 15,000
100,000
OMLs 60, 61, 62, 63, 125,
EBENDO, QUA IBOE
JV, PSC, Marginal
Field
SAPETRO - Note 4 NIL 15,000
120,000
OML 130 Sole RiskAKPO Field
(Deepwater)
SUNTRUST NIL 5,400
18,000
UMUSADEGE Marginal Field Umusadege
TOTALS 254,965
283,812
885,657
COMPANY NAME
OPERATED
Prdn
(MMscf/d)
EQUITY Prdn
(MMsf/d)
GROSS Field
Prdn
(MMscf/d) ACREAGES/O�aker
NPDC 363 406 635
Includes Oben,
Utorogu, Ughelli and
Oredo
OANDO ER NIL 186 900
Mainly ENI operated
into NLNG system and
Okpai Power Plant
ND WESTERN NIL 132 293
Utorogu Gas, fed into
the Escravos Lagos
Pipeline System (ELPS)
SEPLAT 360 154 360
Fed into NGC lines
(Oben to Geregu line
and the ELPS)
FRONTIER 95 NA 95
Sold to Ibom Power,
Unicem and Calabar
Plant
EROTON 50 22.5 50Supplied to Notore
Fer�liser company
NIGERIA's TOP INDIGENOUS NATURAL GAS PRODUCING COMPANIES-AUGUST 2018 OUTPUT
NIGER DELTA - Note 5 36 36 36
(1)Pumped into NLNG
system(2) Supplied to
PNG
ENERGIA 10 10 10 Sold in the community Plans for expansion and sale to NGC
TOTALS 914 946.5 2,379
Notes Below:
(1) SEPLAT Produc�on now includes Pillar Oil operated Umuse� field, as well as OMLs 53&55.
(2) Most of Oando's gas produc�on via NNPC/Agip JV is supplied to the NLNG; but 4.275MMsf/d is its share of the Energia operated Ebendo field
(3) Famfa holds 60% equity in OML 127 (Agbami), which outputs 238,000BOPD, but is li�ing 20,000BOPD, as a result of its "carried" status
(4) SAPETRO's take is 13.5% of Akpo field's (OML 130)'s daily produc�on of 120,000BOPD but it li�s 18,000BOPD due to its "carried" status
(5) Niger Delta Petroleum Resources delivered 35MMscf/d of gas from the Ogbele field to the Nigerian Liquefied Natural Gas(NLNG) system and
supplies 1MMscf/d to a local gas o�aker
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018AFRICA OIL+GAS REPORT
NIGERIA's TOP INDIGENOUS CRUDE OIL PRODUCING COMPANIES - AUGUST 2018
NIG
ER
IA’S
MA
RG
INA
L F
IELD
S:
AC
TIV
ITY
SEP
TEM
BER
20
18
UP
DA
TEVo
l 18,
No
8, O
ctob
er 2
018
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyrig
ht 2
018
AFRI
CA O
IL+G
AS R
EPO
RT
WA
LT
ER
SM
ITH
PE
TR
OM
AN
Pro
duct
ion:
com
mence
d:
2008
Au
gu
st
20
18
Pro
du
cti
on
: 5,5
00BO
PD
.
Ibig
we
Fie
ld
EN
ER
GIA
PE
TR
OLE
UM
Au
gu
st
20
18
outp
ut:
3,5
00BO
PD
.
Eb
en
do
Fie
ldP
art
ne
r: O
an
do
Pro
du
cti
on
co
mm
en
ce
d:
20
09 Te
ch
nic
al/
Fin
an
cin
g P
art
ne
r: L
EK
OIL
Au
gu
st
20
18
ou
tpu
t: 6
,00
0B
OP
D.
GR
EE
N E
NE
RG
YO
tak
ikp
o F
ield
Pro
du
cti
on
co
mm
en
ce
d:
Fe
bru
ary
20
17
.
AS
SO
CIA
TE
D O
IL &
GA
S/D
AN
SA
KI
To
m S
ho
t B
an
k (
TS
B)F
ield
Te
ch
nic
al/
Fin
an
cin
g P
art
ne
r: N
on
eBoth
part
ners
, Ass
oci
ate
d O
il &
Gas
and D
ansa
ki L
imited,
have
reje
cted M
idw
ay
Reso
urc
es
as
their t
ech
nic
al and
financi
ng p
art
ner, a
s it h
as
not,
in t
heir v
iew
, im
ple
mente
d
any
of
the p
rom
ises.
The T
SB F
ield
was
issu
ed u
nder
the 1
st
Marg
inal Fie
ld R
ound in 2
003 a
nd late
r ext
ended u
ntil 14th
M
arc
h, 2015. It
has
now
been furt
her
ext
ended for
a p
eriod
of
24 m
onth
s w
ith e
ffect
fro
m 1
st, M
ay
2016, w
hic
h h
as
exp
ired.
SA
HA
RA
EN
ER
GY
FIE
LD
ST
se
ke
lew
u F
ield
The M
inis
try
of
Petr
ole
um
Reso
urc
es
is c
onsi
dering r
evo
cation o
f th
e lic
ence
, w
hic
h w
as
aw
ard
ed 1
5 y
ears
ago, fo
r la
ck o
f any
work
pro
gra
mm
e. “T
hey
(Sahara
) sa
y th
ey
want
to t
ie
deve
lopm
ent
to O
PL
274”, M
inis
try
sourc
es
say.
“But
tim
e h
as
run o
ut”
.
Pro
du
cti
on
co
mm
en
ce
d:
Octo
be
rP
art
ne
rs:
Ha
rdy O
il &
Em
era
ld
MIL
LE
NIU
M O
IL &
GA
SO
za
Fie
ld
20
17
. A
ug
ust
20
18
Pro
du
cti
on
: 7
00
BO
PD
IND
EP
EN
DE
NT
EN
ER
GY
Ofa
Fie
ldPro
duct
ion u
nlik
ely
to
happen o
n t
his
fie
ld.
Why?
In 2
009, Afr
en r
e-
ente
red O
fa-1
and c
onduct
ed
a D
rill
Ste
m T
est
whic
h faile
d
to e
stablis
h c
om
merc
ial flow
. In
2012, Xenerg
i, a
loca
l early
pro
duct
ion faci
lity
pro
vider, h
ad t
he s
am
e
exp
erience
. U
bim
a Fi
eld
Pro
du
ctio
n:
No
t Ye
tTe
chn
ical
an
d F
inan
cin
g P
artn
er:
Ela
nd
Oil
& G
as
ALL
GR
AC
E EN
ERG
Y
The
Deu
tag
T5
7 r
ig w
as c
arry
ing
ou
t a
du
al s
trin
g co
mp
leti
on
on
U
bim
a -1
in A
ugu
st 2
01
8
PIL
LA
R O
ILU
mu
se
ti/Ig
bu
ku
Fie
ldPro
duct
ion:
com
mence
d:
2008
Au
gu
st
20
18
Pro
du
cti
on
: 2,8
00BO
PD
EX
CE
L E
&P
Pro
du
cti
on
Co
mm
en
ce
d:
No
ve
mb
er
20
16
August
2018 a
vera
ge o
utp
ut:
NIL
. Tr
ans
Ram
os
Pip
elin
e s
hut
in s
ince
April 2018.
Ero
mo
r Fie
ld
Tech
nic
al a
nd
Fin
anci
ng
Par
tne
r: S
iriu
s P
etro
leu
m-
Oro
ro F
ield
Siri
us
Petr
ole
um
has
mo
ved
on
to a
n a
lter
nat
ive
for i
ts tw
o w
ell d
rilli
ng
cam
pai
gn o
n th
e O
roro
fi
eld
in
sh
allo
w w
ater
Oil
Min
ing
Leas
e (O
ML)
95
off
sho
re N
ort
h w
este
rn N
iger
Del
ta o
f N
iger
ia. A
fter
wai
tin
g fo
r CO
SL F
orc
e ri
g fo
r fo
ur m
on
ths,
the
com
pan
y n
ow
say
s it
wo
uld
uti
lise
the
Ad
ria
tic
I jac
k u
p, o
per
ated
by
Shel
f D
rilli
ng,
an
d c
urr
entl
y o
n d
uty
on
Am
ni P
etro
leu
m's
O
koro
fie
ld i
n S
ou
th e
aste
rn o
ffsh
ore
Nig
er D
elta
. Si
riu
s sa
ys i
t h
as d
ecid
ed,
by
mu
tual
ag
reem
ent
wit
h C
hin
a O
ilfie
ld S
ervi
ces
Lim
ited
(C
OSL
), “
to a
bro
gate
its
agre
emen
t w
ith
th
e la
tter
for t
he
sup
ply
of a
jack
-up
rig
for t
he
dri
llin
g p
rogr
amm
e o
n th
e O
roro
fiel
d.
GU
AR
AN
TEE
PET
RO
LEU
M/O
WEN
A
BA
YE
LS
A O
IL C
OM
PA
NY
LIM
ITE
DA
tala
Fie
ldT
ech
nic
al
an
d F
un
din
g P
art
ne
r: C
en
tury
En
erg
yP
rod
ucti
on
Co
mm
en
ce
d:
Ma
rch
20
18
Bu
t th
e f
ield
ha
s b
ee
n s
hu
t in
sin
ce
ea
rly J
un
e 2
01
8.
Du
e t
o d
eb
t b
y o
pe
rato
r, t
o t
he
ve
nd
ors
of
Pro
du
cti
on
Fa
cil
ity.
MO
BIL
CH
EV
RO
N
S
HE
LL
AG
IP
T
OTA
L
AD
DA
X
NP
DC
SE
PLA
T
PA
N O
CE
AN
Pro
du
cti
on
Co
mm
en
ce
d:
Au
gu
st
20
05
NIG
ER
DE
LT
A P
ET
RO
LE
UM
O
gb
ele
Fie
ld
Au
gu
st
20
18
Ave
rag
e O
utp
ut:
6
,50
0B
OP
D.
20
18
wa
s 1
,20
0B
OP
D.
20
13
. A
ve
rag
e f
or
Au
gu
st
Asa
ram
ato
ru F
ield
.
PR
IME
E
NE
RG
Y/S
UFFO
LK
Pro
du
cti
on
co
mm
en
ce
d:
PLA
TFO
RM
PE
TR
OLE
UM
/N
EW
CR
OS
SE
gb
eo
ma
Fie
ldPro
duct
ion c
om
mence
d:
2007
Au
gu
st
20
18
Ave
rage P
roduct
ion:
3,4
00BO
PD
.
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 13
COMPANY NAME
OPERATED
Prdn (BOPD)
EQUITY Prdn
(BOPD)
GROSS Field
Prdn (BOPD) ACREAGES LICENCE TYPES
KEY PRODUCING
FIELD
NPDC 175,768 138,511 238,741OMLs 4, 26, 30, 34, 38,
41, 65, 66, 111, 119JV, PSC Okono
AITEO 83,000 37,350 83,000 OML 29 JV Nembe Creek
SEPLAT - Note 1 66,246 31,754 75,546 OMLs 4, 38, 41, 53, 55 JV Oben, Sapele
EROTON 42,000 18,900 42,000 OML 18 JVCawthorne
Channel
NEWCROSS E&P 24,000 10,800 24,000 OML 24 JV Ekulama
ORIENTAL 22,000 22,000 22,000 EBOK Marginal Field Ebok
CONOIL 20,000 20,000 20,000 OMLs 59, 103 Sole Risk Otuo South
MIDWESTERN 18,000 12,600 18,000 UMUSADEGE Marginal Field Umusadege
AMNI PETROLEUM 14,019 14,019 14,019 OMLs 112, 117 Sole Risk Okoro
BELEMAOIL 9,300 1,627 9,300 OML 55 JV Robertkiri
NIGER DELTA PETROLEUM 6,500 6,500 6,500 OGBELE FIELD Marginal Field Ogbele
GREEN ENERGY/LEKOIL 6,000
6,000
6,000
OTAKIKPO Marginal Field Otakikpo
PAN OCEAN 5,500 2,200
5,500
OML 98 JV Ogharefe
WALTER SMITH 5,500
5,500
5,500
IBIGWE FIELD Marginal Field Ibigwe
ENERGIA 3,500 1,846 3,500 EBENDO Marginal Field Ebendo
PLATFORM 3,400 1,360 3,400 EGBEOMA FIELD Marginal Field, JV Egbeoma Field
YINKA FOLAWIYO 3,200
3,200
3,200
OML 113 Sole Risk Aje Field
MONI PULO 3,000
3,000
3,000
OML 114 Sole Risk Abana
PILLAR OIL 2,800
1,680
2,800
UMUSETI Marginal Field Umuse�
NECONDE AMT 27,789
61,753
OML 42 JV Jones Creek
SHORELINE NAT' RESOURCES AMT 22,095
49,099
OML 30 JV Afiesere
ND WESTERN AMT 7,282
16,182
OML 34 JVUghelli, Warri
River
ELCREST AMT 6,683
14,852
OML 40 JV Opuama
FIRST HYDROCARBON AMT 1,577
3,506
OML 26 JV Ogini
FAMFA - Note 3 NIL 20,000
238,000
OML 127 Sole RiskAgbami Field
(Deepwater)
OANDO ER - Note 2 NIL 15,000
100,000
OMLs 60, 61, 62, 63, 125,
EBENDO, QUA IBOE
JV, PSC, Marginal
Field
SAPETRO - Note 4 NIL 15,000
120,000
OML 130 Sole RiskAKPO Field
(Deepwater)
SUNTRUST NIL 5,400
18,000
UMUSADEGE Marginal Field Umusadege
TOTALS 254,965
283,812
885,657
COMPANY NAME
OPERATED
Prdn
(MMscf/d)
EQUITY Prdn
(MMsf/d)
GROSS Field
Prdn
(MMscf/d) ACREAGES/O�aker
NPDC 363 406 635
Includes Oben,
Utorogu, Ughelli and
Oredo
OANDO ER NIL 186 900
Mainly ENI operated
into NLNG system and
Okpai Power Plant
ND WESTERN NIL 132 293
Utorogu Gas, fed into
the Escravos Lagos
Pipeline System (ELPS)
SEPLAT 360 154 360
Fed into NGC lines
(Oben to Geregu line
and the ELPS)
FRONTIER 95 NA 95
Sold to Ibom Power,
Unicem and Calabar
Plant
EROTON 50 22.5 50Supplied to Notore
Fer�liser company
NIGERIA's TOP INDIGENOUS NATURAL GAS PRODUCING COMPANIES-AUGUST 2018 OUTPUT
NIGER DELTA - Note 5 36 36 36
(1)Pumped into NLNG
system(2) Supplied to
PNG
ENERGIA 10 10 10 Sold in the community Plans for expansion and sale to NGC
TOTALS 914 946.5 2,379
Notes Below:
(1) SEPLAT Produc�on now includes Pillar Oil operated Umuse� field, as well as OMLs 53&55.
(2) Most of Oando's gas produc�on via NNPC/Agip JV is supplied to the NLNG; but 4.275MMsf/d is its share of the Energia operated Ebendo field
(3) Famfa holds 60% equity in OML 127 (Agbami), which outputs 238,000BOPD, but is li�ing 20,000BOPD, as a result of its "carried" status
(4) SAPETRO's take is 13.5% of Akpo field's (OML 130)'s daily produc�on of 120,000BOPD but it li�s 18,000BOPD due to its "carried" status
(5) Niger Delta Petroleum Resources delivered 35MMscf/d of gas from the Ogbele field to the Nigerian Liquefied Natural Gas(NLNG) system and
supplies 1MMscf/d to a local gas o�aker
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018AFRICA OIL+GAS REPORT
NIGERIA's TOP INDIGENOUS CRUDE OIL PRODUCING COMPANIES - AUGUST 2018
NIG
ER
IA’S
MA
RG
INA
L F
IELD
S:
AC
TIV
ITY
SEP
TEM
BER
20
18
UP
DA
TEVo
l 18,
No
8, O
ctob
er 2
018
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyrig
ht 2
018
AFRI
CA O
IL+G
AS R
EPO
RT
WA
LT
ER
SM
ITH
PE
TR
OM
AN
Pro
duct
ion:
com
mence
d:
2008
Au
gu
st
20
18
Pro
du
cti
on
: 5,5
00BO
PD
.
Ibig
we
Fie
ld
EN
ER
GIA
PE
TR
OLE
UM
Au
gu
st
20
18
outp
ut:
3,5
00BO
PD
.
Eb
en
do
Fie
ldP
art
ne
r: O
an
do
Pro
du
cti
on
co
mm
en
ce
d:
20
09 Te
ch
nic
al/
Fin
an
cin
g P
art
ne
r: L
EK
OIL
Au
gu
st
20
18
ou
tpu
t: 6
,00
0B
OP
D.
GR
EE
N E
NE
RG
YO
tak
ikp
o F
ield
Pro
du
cti
on
co
mm
en
ce
d:
Fe
bru
ary
20
17
.
AS
SO
CIA
TE
D O
IL &
GA
S/D
AN
SA
KI
To
m S
ho
t B
an
k (
TS
B)F
ield
Te
ch
nic
al/
Fin
an
cin
g P
art
ne
r: N
on
eBoth
part
ners
, Ass
oci
ate
d O
il &
Gas
and D
ansa
ki L
imited,
have
reje
cted M
idw
ay
Reso
urc
es
as
their t
ech
nic
al and
financi
ng p
art
ner, a
s it h
as
not,
in t
heir v
iew
, im
ple
mente
d
any
of
the p
rom
ises.
The T
SB F
ield
was
issu
ed u
nder
the 1
st
Marg
inal Fie
ld R
ound in 2
003 a
nd late
r ext
ended u
ntil 14th
M
arc
h, 2015. It
has
now
been furt
her
ext
ended for
a p
eriod
of
24 m
onth
s w
ith e
ffect
fro
m 1
st, M
ay
2016, w
hic
h h
as
exp
ired.
SA
HA
RA
EN
ER
GY
FIE
LD
ST
se
ke
lew
u F
ield
The M
inis
try
of
Petr
ole
um
Reso
urc
es
is c
onsi
dering r
evo
cation o
f th
e lic
ence
, w
hic
h w
as
aw
ard
ed 1
5 y
ears
ago, fo
r la
ck o
f any
work
pro
gra
mm
e. “T
hey
(Sahara
) sa
y th
ey
want
to t
ie
deve
lopm
ent
to O
PL
274”, M
inis
try
sourc
es
say.
“But
tim
e h
as
run o
ut”
.
Pro
du
cti
on
co
mm
en
ce
d:
Octo
be
rP
art
ne
rs:
Ha
rdy O
il &
Em
era
ld
MIL
LE
NIU
M O
IL &
GA
SO
za
Fie
ld
20
17
. A
ug
ust
20
18
Pro
du
cti
on
: 7
00
BO
PD
IND
EP
EN
DE
NT
EN
ER
GY
Ofa
Fie
ldPro
duct
ion u
nlik
ely
to
happen o
n t
his
fie
ld.
Why?
In 2
009, Afr
en r
e-
ente
red O
fa-1
and c
onduct
ed
a D
rill
Ste
m T
est
whic
h faile
d
to e
stablis
h c
om
merc
ial flow
. In
2012, Xenerg
i, a
loca
l early
pro
duct
ion faci
lity
pro
vider, h
ad t
he s
am
e
exp
erience
. U
bim
a Fi
eld
Pro
du
ctio
n:
No
t Ye
tTe
chn
ical
an
d F
inan
cin
g P
artn
er:
Ela
nd
Oil
& G
as
ALL
GR
AC
E EN
ERG
Y
The
Deu
tag
T5
7 r
ig w
as c
arry
ing
ou
t a
du
al s
trin
g co
mp
leti
on
on
U
bim
a -1
in A
ugu
st 2
01
8
PIL
LA
R O
ILU
mu
se
ti/Ig
bu
ku
Fie
ldPro
duct
ion:
com
mence
d:
2008
Au
gu
st
20
18
Pro
du
cti
on
: 2,8
00BO
PD
EX
CE
L E
&P
Pro
du
cti
on
Co
mm
en
ce
d:
No
ve
mb
er
20
16
August
2018 a
vera
ge o
utp
ut:
NIL
. Tr
ans
Ram
os
Pip
elin
e s
hut
in s
ince
April 2018.
Ero
mo
r Fie
ld
Tech
nic
al a
nd
Fin
anci
ng
Par
tne
r: S
iriu
s P
etro
leu
m-
Oro
ro F
ield
Siri
us
Petr
ole
um
has
mo
ved
on
to a
n a
lter
nat
ive
for i
ts tw
o w
ell d
rilli
ng
cam
pai
gn o
n th
e O
roro
fi
eld
in
sh
allo
w w
ater
Oil
Min
ing
Leas
e (O
ML)
95
off
sho
re N
ort
h w
este
rn N
iger
Del
ta o
f N
iger
ia. A
fter
wai
tin
g fo
r CO
SL F
orc
e ri
g fo
r fo
ur m
on
ths,
the
com
pan
y n
ow
say
s it
wo
uld
uti
lise
the
Ad
ria
tic
I jac
k u
p, o
per
ated
by
Shel
f D
rilli
ng,
an
d c
urr
entl
y o
n d
uty
on
Am
ni P
etro
leu
m's
O
koro
fie
ld i
n S
ou
th e
aste
rn o
ffsh
ore
Nig
er D
elta
. Si
riu
s sa
ys i
t h
as d
ecid
ed,
by
mu
tual
ag
reem
ent
wit
h C
hin
a O
ilfie
ld S
ervi
ces
Lim
ited
(C
OSL
), “
to a
bro
gate
its
agre
emen
t w
ith
th
e la
tter
for t
he
sup
ply
of a
jack
-up
rig
for t
he
dri
llin
g p
rogr
amm
e o
n th
e O
roro
fiel
d.
GU
AR
AN
TEE
PET
RO
LEU
M/O
WEN
A
BA
YE
LS
A O
IL C
OM
PA
NY
LIM
ITE
DA
tala
Fie
ldT
ech
nic
al
an
d F
un
din
g P
art
ne
r: C
en
tury
En
erg
yP
rod
ucti
on
Co
mm
en
ce
d:
Ma
rch
20
18
Bu
t th
e f
ield
ha
s b
ee
n s
hu
t in
sin
ce
ea
rly J
un
e 2
01
8.
Du
e t
o d
eb
t b
y o
pe
rato
r, t
o t
he
ve
nd
ors
of
Pro
du
cti
on
Fa
cil
ity.
MO
BIL
CH
EV
RO
N
SH
ELL
AG
IP
TO
TAL
AD
DA
X
NP
DC
SE
PLA
T
PA
N O
CE
AN
Pro
du
cti
on
Co
mm
en
ce
d:
Au
gu
st
20
05
NIG
ER
DE
LT
A P
ET
RO
LE
UM
O
gb
ele
Fie
ld
Au
gu
st
20
18
Ave
rag
e O
utp
ut:
6
,50
0B
OP
D.
20
18
wa
s 1
,20
0B
OP
D.
20
13
. A
ve
rag
e f
or
Au
gu
st
Asa
ram
ato
ru F
ield
.
PR
IME
E
NE
RG
Y/S
UFFO
LK
Pro
du
cti
on
co
mm
en
ce
d:
PLA
TFO
RM
PE
TR
OLE
UM
/N
EW
CR
OS
SE
gb
eo
ma
Fie
ldPro
duct
ion c
om
mence
d:
2007
Au
gu
st
20
18
Ave
rage P
roduct
ion:
3,4
00BO
PD
.
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 15
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018
AFRICA OIL+GAS REPORT
ANGOLA's CRUDE OIL EXPORT AND PRODUCING COMPANIES (FOREIGN & LOCAL) JANUARY-JUNE, 2018
BLOCK NAME
GROSS
VOLUME OPERATOR PARTNER1 (Percentage) PARTNER 2(Percentage)
PARTNER 3
(Percentage)
PARTNER 4
(Percentage)
PARTNER 5
(Percentage)
PARTNER 6
(Percentage)
BLOCK 17 103 210 033 TOTAL 40% ESSO 20% BP 16.67% STATOIL 23.33%
BLOCK 15 44, 844, 504 ESSO 40% BP 26.67% ENI 20% STATOIL 13.33%
BLOCKS OA&B 441, 011, 78 CHEVRON 39.2% Sonangol 41% TOTAL 10% ENI 09.8%
BLOCK 31 21 112 255 BP 26.67% ESSO 25% Sonangol P&P 20% STATOIL 13.33% MARATHON 10% China Sonangol 5%
BLOCK 18 15 853 814 BP 50% SSI 50% NONE NONE NONE NONE NONE
BLOCK 14&14 K/A-IMI 13, 675, 288 CHEVRON 31% Sonangol P&P 20% ENI 20% TOTAL 20% GALP 9%
BLOCK 15/06 25 057 644 ENI 35% SSI 20% Sonangol P&P 15% TOTAL 15% FALCON 5% STATOIL 5% PETROBRAS 5%
BLOCK 3/05 4 118 792 Sonangol P&P China Sonangol 25% AJOCO 20% ENI 12% SOMOIL 10% NAFTGAS 4% INA NAFTA 4%
BLOCK 4/05 950 027 Sonangol P&P 50% STATOIL 20% SOMOIL 15% ACREP 15% NONE NONE NONE
BLOCK FS/FST 552 500 SOMOIL 15% Sonangol 63.67% CHEVRON 14.3% Sonangol P7P 5% NONE NONE
BLOCK 2/05 175, 001 PETROBRAS Sonangol P&P 25% CHEVRON 20% SOMOIL 9.3% POLIEDRO 9.1% KOTOIL 9.1%
BLOCK 3/05A 18, 000 Sonangol P&P China Sonangol 25% AJOCO 20% ENI 12% SOMOIL 10% NAFTGAS 4% INA NAFTA 4%
ZONE SUL TERRESTE CABINDA 206 000 Plus Petro 50% Sonangol P&P 20% Force Petroleum 20% CUPET 5%
TOTALS 273 875 036
COMPANY NAME
OPERATED
Prdn EQUITY Prdn GROSS Prdn ACREAGES
SOMOIL 552,500 655,333 5, 814, 320Blocks FS/FST, 2/05, 3/05,
3/05A, 4/05
FALCON NIL 1,252,882 25 057 644 Block 15/06
ACREP NIL 142,504 950 027 Block 4/05
POLIEDRO NIL 15,925 175, 001 Block 2/05
KOTOIL NIL 15,925 175, 001 Block 2/05
FORCE PETROLEUM NIL 41,200 206, 000Zone Sul Terreste
Cabinda
TOTALS 552,500 2,123,770 32, 377, 993
Data sourced from the Angolan Ministry of Finance. Daily produc�on averaged 1.513MMBOPD during the period
ANGOLA's INDIGENOUS PRODUCING COMPANIES-2018 EXPORT ENTITLEMENTS JANUARY-JUNE, 2018
Egina Will Start With 170,000BOPD in December
Ubima Is The Next Marginal Field In Production
The Egina field is scheduled to commence production on December 15, 2018. The Floating Production Storage and Offloading (FPSO} Vessel arrived the field on August 29, 2018. It is undergoing some
pre-commissioning work. Production is expected to start with 170,000BOPD and ramp up to 200,000BOPD a few months after. There have been no comments about whether Nigeria's OPEC quota allows such a significant volume of crude oil to be introduced in such a short amount of time
IN
T
HE
NE
WS
To date, (as of September 18, 2018), the F7000 reservoir was tested at flow rates of up to 2,500BOPD. Upon completion of the D1000 test, the potential to test the E1000/E2000 will be evaluated and the well will be completed with a dual completion with the KCA Deutag T-57 rig. Eland has a 40% interest in the Ubima Field
licence (which is 60% held by the Nigerian owned All Grace Energy Ltd), and is the Technical and Financial Partner on the field development and production operations.
2The onshore area covers 65km in the northern part of Rivers State, Nigeria, and has been carved out of Oil Mining Lease (OML) 17.
IM listed Eland is making progress on Athe Ubima (Marginal) Oilfield in Eastern Nigeria. “Well testing
operations on Ubima are currently in progress on the D1000 reservoir”, the company says in an update, “to gather important information on oil characteristics and reservoir performance”.
Offshore in Blocks 15 and 17 mature projects have been started but innovation is needed to ensure that the life cycle of these projects can be extended. The majors involved here—BP, Chevron, Eni, ExxonMobil, Statoil and Total are interested in further developing their businesses and open to innovative ideas and business propositions. Varying from enhanced oil recovery to natural gas
he newly minted Oil and Gas Authority, Tnow responsible for determining the strategic direction of the sector, is now
busy determining the scenarios to follow…this concessionaire role previously the sole monopoly of Sonangol. There is immense pressure for the Oil and Gas Authority to move ahead quickly and with a sharp sense of pragmatism ensuring and
sending the message that Angola is open for business.The New Authority can be expected to be transparent and follow best practices of other like-minded oil theatres, i.e. Offshore Morocco and Senegal, to ensure that they continue to attract the investment monies of the majors, and possibly new companies. The opportunities are many:
What's Expected From Angola's New Hydrocarbon StrategyBy Energywise
continued on page 16
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 814
Nigerian indies' experiences are also the surest way to determine the effect of routine oil theft and frequent sabotage in the Niger Delta. This is because their acreages are largely onshore. They pump crudes into pipelines that run hundreds of kilometres through many communities in the Niger Delta. While Shell, the Anglo Dutch major, shares terminals with these companies, its proportion of the crude pumped into the main crude evacuation pipelines: Nembe Creek Trunk Line and the Trans Forcados Pipeline, have been significantly reduced in the last
three years. More and more of Shell's onshore crude is pumped to the terminals without going through these two main arteries. Meanwhile, ExxonMobil, TOTAL and Chevron are largely offshore producers, whose production activity are almost out of reach of the many crude thieves onshore Niger Delta. ENI's production experiences sabotage, through its Kwale to Brass pipeline, but its output is the least of the majors' and its onshore component (operated, not equity) is less than 90,000BOPD.
Crude oil production improved, in July and August 2018, for 10 Nigerian companies who
pump their crude through the Trans Forcados Pipeline (TFP) in the Western Niger Delta and the Nembe Creek Trunkline and TransNiger Pipeline in the Eastern Niger Delta basin.Whereas NDWestern, Neconde, Seplat, Shoreline, Midwestern, Platform and Pillar Oil experienced fewer shut ins as a result of fewer theft induced pipeline leakages along the TFP, the news from the east was that TransNiger Pipeline (TNP) had over 80% uptime throughout August, leading Waltersmith Petroman and Niger Delta Petroleum Resources, who evacuate their crudes through TNP, to produce close to optimum.Meanhwile, the Nembe Creek Trunk Line was back up, on July 8, 2018, after a full month of repairs, such that Aiteo, Eroton, Newcross and Belemaoil were able to average higher volumes per day of crude oil production in July and August, than they did in May and June. The production curve/trajectory of Nigerian owned independents is a key register of the country's performance in any given period. If the companies' output drops, it now correlates to Nigerian overall output drop.
Nigerian Oil Thieves Take a Break in July, August
The Kaombos, are 30% operated by TOTAL, and have the capacity to produce
230,000BOEPD, most of which is oil.
Two other African projects on TOTAL's list of start ups between 2018 and 2020 are the 30,000BOEPD Timimoun project in Algeria, of which the company is 38% non-operating partner and the 40,000BOEPD Zinia project in Angola, which it operates with 40%.
Of the 18 projects on the French major's list of major start-ups in that time frame, five are outstanding in terms of volume. They include the 440,000BOEPD Johan Sverdrup in Norway, of which TOTAL has 8.44%; the 340,000BOEPD
Ichthys LNG project in Australia, of which the company holds 30%. TOTAL is 22.5% owner of Iraq's Halfaya 3, with production capacity of 200,000BOEPD and 24% owner and operator of Nigeria's Egina, which can produce 200,000BOEPD at optimum.
The second largest start up project for TOTAL, as an operator, is Egina. The remaining projects on the list are all less than 200,000BOEPD.
But in spite of the large volumes of Johan Sverdrup, Ichthys LNG and Halfaya 3, they are not operated by TOTAL.
he combined Kaombo North and South Tprojects, in ultradeepwater off Angola, is the biggest start up, in terms of
hydrocarbon volume, for TOTAL as an operator anywhere in the world between 2018 and 2020.
Kaombo Is the Biggest Start Up for TOTAL Anywhere
Development projects about to take FIDs in Senegal and Mozambique are in deepwater and require higher level of technological knowhow to participate in, so they have higher barriers of entry to companies that are not covered by local content regulations. In Uganda and Kenya, subsurface work will be almost exclusively the ambit of the usual suspects: Baker Hughes, the Schlumbergers, the Wheatherfords and the Halliburtons of
this world, but above ground facilities are almost for everyone's grab.
Although Uganda and Kenya are just two of four African countries where Final Investment
Decisions for large hydrocarbon projects are about to be taken for the first time, they are lower hanging fruits because they are onshore projects
&P contractors relatively new in the Ebusiness will have an easier ride in the two ongoing major field developments
in East Africa.Uganda and Kenya are to pull in over $32Billion worth of projects to develop waxy crudes in over 10 fields in the next five years. None of them have done it before, so while the E&P companies operating the fields have been around the block for many years, the host countries themselves are open to contracting firms willing to take a chance.
Uganda is determined that its indigenous companies get a good share of the pie, but everyone interested has to register in the National Database. Ely Karuhanga, Chairman of the Ugandan Chamber of Mining &Petroleum encourages contracting firms from other African countries “not to miss out on the $20Billion to be spent on oilfield development, storage facilities, a pipeline and refinery construction” in the next four years.
East African Onshore is the Easiest for New ContractorsBy Jakomine Natori
Pipeline construction underway in the Niger Delta. Vandalism occurs every three out of 10 days.
IN
T
HE
NE
WS
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 15
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018
AFRICA OIL+GAS REPORT
ANGOLA's CRUDE OIL EXPORT AND PRODUCING COMPANIES (FOREIGN & LOCAL) JANUARY-JUNE, 2018
BLOCK NAME
GROSS
VOLUME OPERATOR PARTNER1 (Percentage) PARTNER 2(Percentage)
PARTNER 3
(Percentage)
PARTNER 4
(Percentage)
PARTNER 5
(Percentage)
PARTNER 6
(Percentage)
BLOCK 17 103 210 033 TOTAL 40% ESSO 20% BP 16.67% STATOIL 23.33%
BLOCK 15 44, 844, 504 ESSO 40% BP 26.67% ENI 20% STATOIL 13.33%
BLOCKS OA&B 441, 011, 78 CHEVRON 39.2% Sonangol 41% TOTAL 10% ENI 09.8%
BLOCK 31 21 112 255 BP 26.67% ESSO 25% Sonangol P&P 20% STATOIL 13.33% MARATHON 10% China Sonangol 5%
BLOCK 18 15 853 814 BP 50% SSI 50% NONE NONE NONE NONE NONE
BLOCK 14&14 K/A-IMI 13, 675, 288 CHEVRON 31% Sonangol P&P 20% ENI 20% TOTAL 20% GALP 9%
BLOCK 15/06 25 057 644 ENI 35% SSI 20% Sonangol P&P 15% TOTAL 15% FALCON 5% STATOIL 5% PETROBRAS 5%
BLOCK 3/05 4 118 792 Sonangol P&P China Sonangol 25% AJOCO 20% ENI 12% SOMOIL 10% NAFTGAS 4% INA NAFTA 4%
BLOCK 4/05 950 027 Sonangol P&P 50% STATOIL 20% SOMOIL 15% ACREP 15% NONE NONE NONE
BLOCK FS/FST 552 500 SOMOIL 15% Sonangol 63.67% CHEVRON 14.3% Sonangol P7P 5% NONE NONE
BLOCK 2/05 175, 001 PETROBRAS Sonangol P&P 25% CHEVRON 20% SOMOIL 9.3% POLIEDRO 9.1% KOTOIL 9.1%
BLOCK 3/05A 18, 000 Sonangol P&P China Sonangol 25% AJOCO 20% ENI 12% SOMOIL 10% NAFTGAS 4% INA NAFTA 4%
ZONE SUL TERRESTE CABINDA 206 000 Plus Petro 50% Sonangol P&P 20% Force Petroleum 20% CUPET 5%
TOTALS 273 875 036
COMPANY NAME
OPERATED
Prdn EQUITY Prdn GROSS Prdn ACREAGES
SOMOIL 552,500 655,333 5, 814, 320Blocks FS/FST, 2/05, 3/05,
3/05A, 4/05
FALCON NIL 1,252,882 25 057 644 Block 15/06
ACREP NIL 142,504 950 027 Block 4/05
POLIEDRO NIL 15,925 175, 001 Block 2/05
KOTOIL NIL 15,925 175, 001 Block 2/05
FORCE PETROLEUM NIL 41,200 206, 000Zone Sul Terreste
Cabinda
TOTALS 552,500 2,123,770 32, 377, 993
Data sourced from the Angolan Ministry of Finance. Daily produc�on averaged 1.513MMBOPD during the period
ANGOLA's INDIGENOUS PRODUCING COMPANIES-2018 EXPORT ENTITLEMENTS JANUARY-JUNE, 2018
Egina Will Start With 170,000BOPD in December
Ubima Is The Next Marginal Field In Production
The Egina field is scheduled to commence production on December 15, 2018. The Floating Production Storage and Offloading (FPSO} Vessel arrived the field on August 29, 2018. It is undergoing some
pre-commissioning work. Production is expected to start with 170,000BOPD and ramp up to 200,000BOPD a few months after. There have been no comments about whether Nigeria's OPEC quota allows such a significant volume of crude oil to be introduced in such a short amount of time
IN
T
HE
NE
WS
To date, (as of September 18, 2018), the F7000 reservoir was tested at flow rates of up to 2,500BOPD. Upon completion of the D1000 test, the potential to test the E1000/E2000 will be evaluated and the well will be completed with a dual completion with the KCA Deutag T-57 rig. Eland has a 40% interest in the Ubima Field
licence (which is 60% held by the Nigerian owned All Grace Energy Ltd), and is the Technical and Financial Partner on the field development and production operations.
2The onshore area covers 65km in the northern part of Rivers State, Nigeria, and has been carved out of Oil Mining Lease (OML) 17.
IM listed Eland is making progress on Athe Ubima (Marginal) Oilfield in Eastern Nigeria. “Well testing
operations on Ubima are currently in progress on the D1000 reservoir”, the company says in an update, “to gather important information on oil characteristics and reservoir performance”.
Offshore in Blocks 15 and 17 mature projects have been started but innovation is needed to ensure that the life cycle of these projects can be extended. The majors involved here—BP, Chevron, Eni, ExxonMobil, Statoil and Total are interested in further developing their businesses and open to innovative ideas and business propositions. Varying from enhanced oil recovery to natural gas
he newly minted Oil and Gas Authority, Tnow responsible for determining the strategic direction of the sector, is now
busy determining the scenarios to follow…this concessionaire role previously the sole monopoly of Sonangol. There is immense pressure for the Oil and Gas Authority to move ahead quickly and with a sharp sense of pragmatism ensuring and
sending the message that Angola is open for business.The New Authority can be expected to be transparent and follow best practices of other like-minded oil theatres, i.e. Offshore Morocco and Senegal, to ensure that they continue to attract the investment monies of the majors, and possibly new companies. The opportunities are many:
What's Expected From Angola's New Hydrocarbon StrategyBy Energywise
continued on page 16
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 814
Nigerian indies' experiences are also the surest way to determine the effect of routine oil theft and frequent sabotage in the Niger Delta. This is because their acreages are largely onshore. They pump crudes into pipelines that run hundreds of kilometres through many communities in the Niger Delta. While Shell, the Anglo Dutch major, shares terminals with these companies, its proportion of the crude pumped into the main crude evacuation pipelines: Nembe Creek Trunk Line and the Trans Forcados Pipeline, have been significantly reduced in the last
three years. More and more of Shell's onshore crude is pumped to the terminals without going through these two main arteries. Meanwhile, ExxonMobil, TOTAL and Chevron are largely offshore producers, whose production activity are almost out of reach of the many crude thieves onshore Niger Delta. ENI's production experiences sabotage, through its Kwale to Brass pipeline, but its output is the least of the majors' and its onshore component (operated, not equity) is less than 90,000BOPD.
Crude oil production improved, in July and August 2018, for 10 Nigerian companies who
pump their crude through the Trans Forcados Pipeline (TFP) in the Western Niger Delta and the Nembe Creek Trunkline and TransNiger Pipeline in the Eastern Niger Delta basin.Whereas NDWestern, Neconde, Seplat, Shoreline, Midwestern, Platform and Pillar Oil experienced fewer shut ins as a result of fewer theft induced pipeline leakages along the TFP, the news from the east was that TransNiger Pipeline (TNP) had over 80% uptime throughout August, leading Waltersmith Petroman and Niger Delta Petroleum Resources, who evacuate their crudes through TNP, to produce close to optimum.Meanhwile, the Nembe Creek Trunk Line was back up, on July 8, 2018, after a full month of repairs, such that Aiteo, Eroton, Newcross and Belemaoil were able to average higher volumes per day of crude oil production in July and August, than they did in May and June. The production curve/trajectory of Nigerian owned independents is a key register of the country's performance in any given period. If the companies' output drops, it now correlates to Nigerian overall output drop.
Nigerian Oil Thieves Take a Break in July, August
The Kaombos, are 30% operated by TOTAL, and have the capacity to produce
230,000BOEPD, most of which is oil.
Two other African projects on TOTAL's list of start ups between 2018 and 2020 are the 30,000BOEPD Timimoun project in Algeria, of which the company is 38% non-operating partner and the 40,000BOEPD Zinia project in Angola, which it operates with 40%.
Of the 18 projects on the French major's list of major start-ups in that time frame, five are outstanding in terms of volume. They include the 440,000BOEPD Johan Sverdrup in Norway, of which TOTAL has 8.44%; the 340,000BOEPD
Ichthys LNG project in Australia, of which the company holds 30%. TOTAL is 22.5% owner of Iraq's Halfaya 3, with production capacity of 200,000BOEPD and 24% owner and operator of Nigeria's Egina, which can produce 200,000BOEPD at optimum.
The second largest start up project for TOTAL, as an operator, is Egina. The remaining projects on the list are all less than 200,000BOEPD.
But in spite of the large volumes of Johan Sverdrup, Ichthys LNG and Halfaya 3, they are not operated by TOTAL.
he combined Kaombo North and South Tprojects, in ultradeepwater off Angola, is the biggest start up, in terms of
hydrocarbon volume, for TOTAL as an operator anywhere in the world between 2018 and 2020.
Kaombo Is the Biggest Start Up for TOTAL Anywhere
Development projects about to take FIDs in Senegal and Mozambique are in deepwater and require higher level of technological knowhow to participate in, so they have higher barriers of entry to companies that are not covered by local content regulations. In Uganda and Kenya, subsurface work will be almost exclusively the ambit of the usual suspects: Baker Hughes, the Schlumbergers, the Wheatherfords and the Halliburtons of
this world, but above ground facilities are almost for everyone's grab.
Although Uganda and Kenya are just two of four African countries where Final Investment
Decisions for large hydrocarbon projects are about to be taken for the first time, they are lower hanging fruits because they are onshore projects
&P contractors relatively new in the Ebusiness will have an easier ride in the two ongoing major field developments
in East Africa.Uganda and Kenya are to pull in over $32Billion worth of projects to develop waxy crudes in over 10 fields in the next five years. None of them have done it before, so while the E&P companies operating the fields have been around the block for many years, the host countries themselves are open to contracting firms willing to take a chance.
Uganda is determined that its indigenous companies get a good share of the pie, but everyone interested has to register in the National Database. Ely Karuhanga, Chairman of the Ugandan Chamber of Mining &Petroleum encourages contracting firms from other African countries “not to miss out on the $20Billion to be spent on oilfield development, storage facilities, a pipeline and refinery construction” in the next four years.
East African Onshore is the Easiest for New ContractorsBy Jakomine Natori
Pipeline construction underway in the Niger Delta. Vandalism occurs every three out of 10 days.
IN
T
HE
NE
WS
TOTAL is 18% non operating of the deepwater Owowo field, now operated by ExxonMobil.
Other such projects in Nigeria are the 45,000BOEPD Ikike field development, which is mostly crude oil. It is located in shallow water, in the country's prolific south eastern offshore zone. TOTAL holds 40% operatorship of Ikike.
The biggest crude oil development project that TOTAL is working on for Sanction purposes is the Ugandan basinwide development, known as Tilenga and Kingfisher. TOTAL is operating this massive
project with 44% interest.
With Kaombo in Angola and Egina in Nigeria almost delivered, TOTAL has gone ahead to work on
sanctioning five projects it considers “high return”.
The African projects include the 1Billion standard cubic feet per day gas valourisation project in Ibewa field, in Eastern onshore Nigeria. This project is to help serve as
thfeedstock for the 7 Train of the Nigerian LNG plant, located in Bonny, also in Eastern Nigeria.
TOTAL holds 15% of the NLNG project.
They are part of 24 projects around the world that it hopes to take to Final Investment Decision by 2020.
“A lot of things happen just before elections, several legislations are passed in the transition period between the end of one administration and the coming of a new one”, say several sources within and outside government.
But sources close to the entire process of the petroleum reform insist to Africa Oil+Gas Report, that it is Buhari's loss if he fails to allow passage of these crucial reform laws, the original versions of which were first introduced in the National Assembly 10 years ago.
President Muhammadu Buhari's Econonomic Management Team, headed by his Vice President Yemi Osibajo, met with several bodies, in the last week of September 2018, to address the President's concerns in those aspects of the PIGB that he has objected to.
“What if he wants to take full advantage of the passage of the laws when it matters most?”,
they ask. “What if he doesn't want to allow his opposition to take the credit?” The PIGB is the only one of the four so far passed by the National Assembly. The remaining three Bills; Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host Communities Bill (PHCB), complement the Petroleum Industry Governance Bill (PIGB) to ensure holistic reform of the petroleum industry, according to the promoters of the reforms. They have not even been passed by the legislature, which has been in a long recess and is unlikely to reconvene before mid-October. Besides, a lot of its members are in a messy, pre-election proxy war against Buhari himself. It will be surprising if the PIB laws are passed by Buhari at this rate, but Presidency insiders argue that such a surprise can still be sprung.
Many critics had dismissed the likelihood of
the passage of the reform laws before the end of President Buhari's tenure in May 2019 since a Reuters' report in late August 2018, broke with the news that Buhari had withheld Assent to the first of the four bills: Petroleum Industry Governance Bill. That report, coupled with a feeble disclaimer by Buhari's liaison official with the National Assembly, had generated frenzied debate in the media, with much of the conclusion indicating that Buhari is opposed to the central tenets of the Petroleum Reform Laws.
Nigerian presidency insiders are contending that it is too early to dismiss the possibility of the passage
of the four pieces of legislation that make up the country's Petroleum Industry reform laws: the so called Petroleum Industry Bills (PIB), before the country's general elections in February-March, 2019.
TOTAL: Five Large African Projects in FEED, Under Study
Nigerian Petroleum Laws Still Likely to Be Signed Before March 2019
production. All options are on the table. The message is with higher oil prices and a new oil and gas regime in place…we must make hay while the sun shines!
While exploration has been done in the pre-salt basins …to date the results have been left wanting…yet there is optimism that with addit ional geological model ing and exploration hydrocarbons can be found…look to the example of Brazil, which shares the same geological structure…it took a number of years before the huge presalt fields were discovered…and in hind-sight it is the pre-salt that is now the backbone of the Brazalian oil and gas industry. Up to 2010 average Petrobras production was approx.. 40 000 bpd ; as of 2016 because of the pre-salt this has increased 24-fold to 1 million mbpd. There is no guarantee that the results will be the same, but the downside is that: nothing ventured nothing gained!
National Gas Company
I m a g i n e t h a t h y d r o c a r b o n s a r e found…certainly a new horizon could be the start of a gas industry which could help
become the fuel of choice for future industrialization. Also for the hydro-power sector and industrial and residential sectors.
New Exploration Offshore
ConclusionsExpanded and new projects for Blocks 15 and 17;
It is of utmost importance that the National Oil and Gas Authority prioritize the establishment of the petro-chemical and ref ining sector,thereby reducing the huge import costs of shipping hydrocarbon products from abroad.
Petro-Chemical Sector
Establishment of a National Gas Company to implement a national gas strategy;
The notion that Angola can have a budding gas industry is not far-fetched…Given the new gas legislation that is now in place, allowing the industry to monetize the natural gas it now finds. Previously natural gas remained the property of the state (Sonangol) and there was no incentive to prospect for natural gas.
The strategy to further develop Angola's oil and gas industry is also the key to economic diversification: oil and gas are literally the black gold of how the country can move ahead and at the same time diversify the economy allowing Angola's to find it's place in the sun.
The black sheep in Angola's oil and sector has been the petro-chemical sector. Deadlines to expand or build additional refining capacity have in the past come and gone. There are now plans to expand the Luanda refinery which meets 20% of domestic demand. The
Lobito Refinery has a long history of planned deadlines…and a new date(2022) has been set when it will be up and running.
A key question is : would it be necessary to set up a separate national Gas Company? Such a National Gas Company could be instrumental in setting up a national gas strategy. Parallel to such a company it is necessary to have a regulatory regime in place. Ensuring that the National Gas Authority will be even busier!
Expanded projects on existing fields and exploration on new fields will guarantee Angolan production to rise to at least 1.5 mbpd by 2020.
continued from page 14 ...What's Expected From Angola's New Hydrocarbon Strategy
Africa's first Nobel Laureate for Literature, Wole Soyinka, at the Youth Programme of the Lagos Book and Art Festival, in November 2013
Left to right: Jahman Anikulapo, CORA's Programme Chair and Festival Director, with
Spencer Onosode, Managing Director, Pillar Oil and Toyin Akinosho, CORA's Secretary
General, at Pillar Oil headquarters in Lagos.
Dickson Okotie...shipped in 10 books in 2013
CO
MP
AN
Y U
PD
AT
E
The theme of this year's festival is Renewal: A World That Works For All, a subject that is inspired by the need to reflect on the possibilities of shaping the country into a capable state, as the nation's democracy turns 20 and the sixth general elections in the Fourth Republic are about to hold. The 10 core books, lined up for conversation over the course of the weeklong Festival, reflect, in various ways, ideas of nation building.
Other past supporters have been Neconde E&P, which weighed in with its backing in 2015, Midwestern Oil and Gas, which gave significant
financial support in 2013 and So did Esso Exploration Nigeria, the deepwater subsidiary of ExxonMobil in the country. Hosted at the Freedom Park, site of an old colonial prison renovated into scenic grounds incorporating an art gallery, an auditorium, a museum, food court, amphitheatre and concert space, LABAF runs two parallel programmes; (1) the Adult programme involving discussions around books, book exhibition and fair, visual art display, poetry slam and musical performances, film screenings and art stampede and (2) a workshop-heavy, interactive Youth programme catering to young people between the ages of 9 and 16.LABAF's proposition to Nigeria's leading oil explorers is to use the event to bolster their
image as companies keen on the idea of rejuvenating the culture of book reading and engagement with ideas.
“The LABAF will remain one of the main functions that we support outside of our host communities”, the Niger Delta Petroleum Resources had said last year.
The Festival encourages oil companies to bring young people from the communities where they operate to participate in the Festival's youth programme, which involves three days of literacy and literary exercises, art and
craft workshops, mentorship and book reviews. Outside these corporate brands, a number of selfless individual oil workers back the Festival in a significant way; by donating the books that are then sent to reviewers and discussants who
make up the panels in the several readings and d iscuss ion segments which constitute LABAF. D i c k s o n O k o t i e , a c o n s u l t a n t E a r l y Production Facility (EPF) engineer, shipped in 10 books in 2013.Bashir Koledoye, a former
Chevron geologist who now owns a geoscience consultancy firm named D'Harmattan, bought copies of nine books in 2014, donated money for books in 2015 and in 2016 delivered six copies of three books (two for each) including The Yacoubian Building by Alaa Al Aswany, Terrorism and the Politics of Fear by David Altheide, and The Spirit of Terrorism, by Jean Baudrillard.
Pillar Oil has been a key supporter of LABAF, while Ofserv, an oil service firm, has been a location sponsor since 2015, paying for hotel accommodation for festival participants who fly into Lagos. Energy & Mineral Resources, a subsurface evaluation firm, has been helpful.
This initiative to strengthen the foundations of Nigeria as a literate society has also been supported by Lekoil, a London listed operator.
Nigeria is home to 170Million people and part of LABAF's raison d'être is to convert as many as possible of this number into true human capital.
In 2014, Caritas PR, a reputation management company focused on the industry, founded by Dayo Ojo, an ExxonMobil “alumnus”, ordered fifteen copies of both the French scholar
stThomas Picketty's hefty tome: Capital in the 21 Century and Dambisa Moyo's How The West Was Lost, for review and conversation at the Festival. A year after, Caritas donated copies of Joe Stiglitz's new book: The Great Divide, Unequal Societies and What To Do With Them.
The oil industry in Nigeria is stepping forward again this year, in support of the Lagos Book and Art Festival (LABAF), the
largest culture picnic in Africa and the continent's most invigorating feast of the written word.
thThe 20 edition runs from November 5 to 11, 2018, and the Niger Delta Petroleum Resources, the country's most integrated energy provider, has backed the Festival for Eight of those 20 Years and is doing same this year. Marine Platforms, which was first invited last year, has come across as the most enthusiastic of the new backers.
The earliest donors of books to the Festival included Layiwola Adeniji, a Chevron Nigeria communications specialist and Adedoja Ojelabi, former President of the Nigerian Association of Petroleum Explorationists (NAPE) as well as Femi Aisida, a former Petroleum Engineer with Shell, each donating upwards of 20 books for three consecutive years between 2011 and 2013.
In 2015, Shell geologist Kehinde Olafiranye shipped in 20 copies of books, including Tom Burgis' The Looting Machine and Ari Shavit's My Promised Land for the purpose of two sessions
that the 17 LABAF.
SignedToyin Akinosho, publisher Africa Oil+Gas Report and Secretary General of CORA, organisers of LABAF.
LABAF organisers are encouraged by this show of support for the finer elements of human civilisation by companies and individuals whose jobs involve the old fashioned business of extracting fossil fuels. “This tells us something”, says Jahman Anikulapo, programme chairman of the Committee for Relevant Art (CORA) and the Festival Director, “The Lagos Book and Art Festival is an important event and we will keep driving it”.
Olayiwola Adeniji
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 17
Oil Industry Continues To Support the Lagos Book & Art Festival
IN
T
HE
NE
WS
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 816
TOTAL is 18% non operating of the deepwater Owowo field, now operated by ExxonMobil.
Other such projects in Nigeria are the 45,000BOEPD Ikike field development, which is mostly crude oil. It is located in shallow water, in the country's prolific south eastern offshore zone. TOTAL holds 40% operatorship of Ikike.
The biggest crude oil development project that TOTAL is working on for Sanction purposes is the Ugandan basinwide development, known as Tilenga and Kingfisher. TOTAL is operating this massive
project with 44% interest.
With Kaombo in Angola and Egina in Nigeria almost delivered, TOTAL has gone ahead to work on
sanctioning five projects it considers “high return”.
The African projects include the 1Billion standard cubic feet per day gas valourisation project in Ibewa field, in Eastern onshore Nigeria. This project is to help serve as
thfeedstock for the 7 Train of the Nigerian LNG plant, located in Bonny, also in Eastern Nigeria.
TOTAL holds 15% of the NLNG project.
They are part of 24 projects around the world that it hopes to take to Final Investment Decision by 2020.
“A lot of things happen just before elections, several legislations are passed in the transition period between the end of one administration and the coming of a new one”, say several sources within and outside government.
But sources close to the entire process of the petroleum reform insist to Africa Oil+Gas Report, that it is Buhari's loss if he fails to allow passage of these crucial reform laws, the original versions of which were first introduced in the National Assembly 10 years ago.
President Muhammadu Buhari's Econonomic Management Team, headed by his Vice President Yemi Osibajo, met with several bodies, in the last week of September 2018, to address the President's concerns in those aspects of the PIGB that he has objected to.
“What if he wants to take full advantage of the passage of the laws when it matters most?”,
they ask. “What if he doesn't want to allow his opposition to take the credit?” The PIGB is the only one of the four so far passed by the National Assembly. The remaining three Bills; Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host Communities Bill (PHCB), complement the Petroleum Industry Governance Bill (PIGB) to ensure holistic reform of the petroleum industry, according to the promoters of the reforms. They have not even been passed by the legislature, which has been in a long recess and is unlikely to reconvene before mid-October. Besides, a lot of its members are in a messy, pre-election proxy war against Buhari himself. It will be surprising if the PIB laws are passed by Buhari at this rate, but Presidency insiders argue that such a surprise can still be sprung.
Many critics had dismissed the likelihood of
the passage of the reform laws before the end of President Buhari's tenure in May 2019 since a Reuters' report in late August 2018, broke with the news that Buhari had withheld Assent to the first of the four bills: Petroleum Industry Governance Bill. That report, coupled with a feeble disclaimer by Buhari's liaison official with the National Assembly, had generated frenzied debate in the media, with much of the conclusion indicating that Buhari is opposed to the central tenets of the Petroleum Reform Laws.
Nigerian presidency insiders are contending that it is too early to dismiss the possibility of the passage
of the four pieces of legislation that make up the country's Petroleum Industry reform laws: the so called Petroleum Industry Bills (PIB), before the country's general elections in February-March, 2019.
TOTAL: Five Large African Projects in FEED, Under Study
Nigerian Petroleum Laws Still Likely to Be Signed Before March 2019
production. All options are on the table. The message is with higher oil prices and a new oil and gas regime in place…we must make hay while the sun shines!
While exploration has been done in the pre-salt basins …to date the results have been left wanting…yet there is optimism that with addit ional geological model ing and exploration hydrocarbons can be found…look to the example of Brazil, which shares the same geological structure…it took a number of years before the huge presalt fields were discovered…and in hind-sight it is the pre-salt that is now the backbone of the Brazalian oil and gas industry. Up to 2010 average Petrobras production was approx.. 40 000 bpd ; as of 2016 because of the pre-salt this has increased 24-fold to 1 million mbpd. There is no guarantee that the results will be the same, but the downside is that: nothing ventured nothing gained!
National Gas Company
I m a g i n e t h a t h y d r o c a r b o n s a r e found…certainly a new horizon could be the start of a gas industry which could help
become the fuel of choice for future industrialization. Also for the hydro-power sector and industrial and residential sectors.
New Exploration Offshore
ConclusionsExpanded and new projects for Blocks 15 and 17;
It is of utmost importance that the National Oil and Gas Authority prioritize the establishment of the petro-chemical and ref ining sector,thereby reducing the huge import costs of shipping hydrocarbon products from abroad.
Petro-Chemical Sector
Establishment of a National Gas Company to implement a national gas strategy;
The notion that Angola can have a budding gas industry is not far-fetched…Given the new gas legislation that is now in place, allowing the industry to monetize the natural gas it now finds. Previously natural gas remained the property of the state (Sonangol) and there was no incentive to prospect for natural gas.
The strategy to further develop Angola's oil and gas industry is also the key to economic diversification: oil and gas are literally the black gold of how the country can move ahead and at the same time diversify the economy allowing Angola's to find it's place in the sun.
The black sheep in Angola's oil and sector has been the petro-chemical sector. Deadlines to expand or build additional refining capacity have in the past come and gone. There are now plans to expand the Luanda refinery which meets 20% of domestic demand. The
Lobito Refinery has a long history of planned deadlines…and a new date(2022) has been set when it will be up and running.
A key question is : would it be necessary to set up a separate national Gas Company? Such a National Gas Company could be instrumental in setting up a national gas strategy. Parallel to such a company it is necessary to have a regulatory regime in place. Ensuring that the National Gas Authority will be even busier!
Expanded projects on existing fields and exploration on new fields will guarantee Angolan production to rise to at least 1.5 mbpd by 2020.
continued from page 14 ...What's Expected From Angola's New Hydrocarbon Strategy
Africa's first Nobel Laureate for Literature, Wole Soyinka, at the Youth Programme of the Lagos Book and Art Festival, in November 2013
Left to right: Jahman Anikulapo, CORA's Programme Chair and Festival Director, with
Spencer Onosode, Managing Director, Pillar Oil and Toyin Akinosho, CORA's Secretary
General, at Pillar Oil headquarters in Lagos.
Dickson Okotie...shipped in 10 books in 2013
CO
MP
AN
Y U
PD
AT
E
The theme of this year's festival is Renewal: A World That Works For All, a subject that is inspired by the need to reflect on the possibilities of shaping the country into a capable state, as the nation's democracy turns 20 and the sixth general elections in the Fourth Republic are about to hold. The 10 core books, lined up for conversation over the course of the weeklong Festival, reflect, in various ways, ideas of nation building.
Other past supporters have been Neconde E&P, which weighed in with its backing in 2015, Midwestern Oil and Gas, which gave significant
financial support in 2013 and So did Esso Exploration Nigeria, the deepwater subsidiary of ExxonMobil in the country. Hosted at the Freedom Park, site of an old colonial prison renovated into scenic grounds incorporating an art gallery, an auditorium, a museum, food court, amphitheatre and concert space, LABAF runs two parallel programmes; (1) the Adult programme involving discussions around books, book exhibition and fair, visual art display, poetry slam and musical performances, film screenings and art stampede and (2) a workshop-heavy, interactive Youth programme catering to young people between the ages of 9 and 16.LABAF's proposition to Nigeria's leading oil explorers is to use the event to bolster their
image as companies keen on the idea of rejuvenating the culture of book reading and engagement with ideas.
“The LABAF will remain one of the main functions that we support outside of our host communities”, the Niger Delta Petroleum Resources had said last year.
The Festival encourages oil companies to bring young people from the communities where they operate to participate in the Festival's youth programme, which involves three days of literacy and literary exercises, art and
craft workshops, mentorship and book reviews. Outside these corporate brands, a number of selfless individual oil workers back the Festival in a significant way; by donating the books that are then sent to reviewers and discussants who
make up the panels in the several readings and d iscuss ion segments which constitute LABAF. D i c k s o n O k o t i e , a c o n s u l t a n t E a r l y Production Facility (EPF) engineer, shipped in 10 books in 2013.Bashir Koledoye, a former
Chevron geologist who now owns a geoscience consultancy firm named D'Harmattan, bought copies of nine books in 2014, donated money for books in 2015 and in 2016 delivered six copies of three books (two for each) including The Yacoubian Building by Alaa Al Aswany, Terrorism and the Politics of Fear by David Altheide, and The Spirit of Terrorism, by Jean Baudrillard.
Pillar Oil has been a key supporter of LABAF, while Ofserv, an oil service firm, has been a location sponsor since 2015, paying for hotel accommodation for festival participants who fly into Lagos. Energy & Mineral Resources, a subsurface evaluation firm, has been helpful.
This initiative to strengthen the foundations of Nigeria as a literate society has also been supported by Lekoil, a London listed operator.
Nigeria is home to 170Million people and part of LABAF's raison d'être is to convert as many as possible of this number into true human capital.
In 2014, Caritas PR, a reputation management company focused on the industry, founded by Dayo Ojo, an ExxonMobil “alumnus”, ordered fifteen copies of both the French scholar
stThomas Picketty's hefty tome: Capital in the 21 Century and Dambisa Moyo's How The West Was Lost, for review and conversation at the Festival. A year after, Caritas donated copies of Joe Stiglitz's new book: The Great Divide, Unequal Societies and What To Do With Them.
The oil industry in Nigeria is stepping forward again this year, in support of the Lagos Book and Art Festival (LABAF), the
largest culture picnic in Africa and the continent's most invigorating feast of the written word.
thThe 20 edition runs from November 5 to 11, 2018, and the Niger Delta Petroleum Resources, the country's most integrated energy provider, has backed the Festival for Eight of those 20 Years and is doing same this year. Marine Platforms, which was first invited last year, has come across as the most enthusiastic of the new backers.
The earliest donors of books to the Festival included Layiwola Adeniji, a Chevron Nigeria communications specialist and Adedoja Ojelabi, former President of the Nigerian Association of Petroleum Explorationists (NAPE) as well as Femi Aisida, a former Petroleum Engineer with Shell, each donating upwards of 20 books for three consecutive years between 2011 and 2013.
In 2015, Shell geologist Kehinde Olafiranye shipped in 20 copies of books, including Tom Burgis' The Looting Machine and Ari Shavit's My Promised Land for the purpose of two sessions
that the 17 LABAF.
SignedToyin Akinosho, publisher Africa Oil+Gas Report and Secretary General of CORA, organisers of LABAF.
LABAF organisers are encouraged by this show of support for the finer elements of human civilisation by companies and individuals whose jobs involve the old fashioned business of extracting fossil fuels. “This tells us something”, says Jahman Anikulapo, programme chairman of the Committee for Relevant Art (CORA) and the Festival Director, “The Lagos Book and Art Festival is an important event and we will keep driving it”.
Olayiwola Adeniji
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 17
Oil Industry Continues To Support the Lagos Book & Art Festival
IN
T
HE
NE
WS
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 816
PE
TR
OL
EU
M
PE
OP
LE
The combined business would have had pro-forma production of approximately 575,000 barrels of oil equivalent per day in 2017, almost 70% of which comes from natural gas. Production is expected to rise to between 750,000 and 800,000 barrels of oil equivalent per day in the early 2020s as the company executes its business plan.
Mario Mehren, Chief Executive Officer (CEO) of Wintershall, will be the CEO of Wintershall DEA. Maria Moraeus Hanssen, CEO of DEA, will be the deputy CEO and Chief Operating Officer. In addition, Thilo Wieland, member of the Board of Executive Directors of Wintershall, and Hugo Dijkgraaf, Managing Director of Wintershall Norge, will be on the five-member Management Board of Wintershall DEA. The appointment of the Chief Financial Officer will be announced in
due course.
Two large German firms, LetterOne and BASF signed a Business Combination Agreement to merge their oil and gas
businesses and create Wintershall DEA, which, they state, “will be the largest independent European exploration and production company, with activity in twelve countries across Europe, Latin America, North Africa and the Middle East”.The top five people in the new company, have been announced.
The British Virgin Islands headquartered company, listed on the Toronto Stock Exchange Venture Exchange, is engaged in
natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. It trades under the trading symbols ORC.B and ORC.A.
Ta n za n i a n ga s p ro d u c e r, O rc a Exploration Group Inc., says its board of directors has commenced a global
search process for a new Chief Executive Officer. The search process will target individuals with the skills and experience to
maximise the value of, and diversify the risks facing, Orca's business while increasing the liquidity in the trading of Orca's shares.
Ak e r E n e r g y h a s a p p o i n t e d B j ø r n Thore Ribesen as
head of Drilling & Wells. He is coming to the job from the p o s i t i o n a s O f f s h o r e Installation Manager on Aker BP's Ivar Aasen field outside the coast of Norway. Ribesen has been with Aker BP since 2 0 0 7 , h o l d i n g s e v e ra l positions in the drilling d e p a r t m e n t , i n c l u d i n g
Drilling and Wells Manager for exploration drilling and Ivar Aasen. He joined Aker
stEnergy from October 1 2018. M r. R i b e s e n h o l d s a n E n g i n e e r i n g d e g re e i n Offshore Technology from University of Newcastle upon Tyne and an MBA from N o r w e g i a n S c h o o l o f Economics. Before he joined A k e r B P h e w a s i n Schlumberger (1996-2007),
where he held a variety of positions.Jeremy Hill resumes his position as Well Development Manager for Aker Energy. CEO Jan Arve Haugan thanks him for his interim service as SVP Drilling and Wells during the transition.
Ribesen Is Top Driller For Aker Energy
Orca In Search of A CEO
Philip Loader is a qualified geologist with
over 30 years' experience working in the oil and gas industry, with previous roles including EVP – Global Exploration at Woodside Petroleum, the Australian oil and gas company and Non-executive Chairman of Chariot Oil & Gas. Prior to joining Woodside Petroleum, Loader held senior executive roles at Mubadala Oil & Gas,
Anadarko Petroleum, Triton Energy, Sasol Petroleum and Neste Oil. Philip has a BSc in Geology from the University of Manchester, an MSc in Petroleum Geology from Imperial College London and an MBA from Henley Business School.
zinam Limited has appointed Philip ALoader as Non-executive Director with immediate effect., the company
reported in late September 2018. Mr. Loader has also been appointed as Strategic Adviser to Seacrest Capital Group, which is the financial backer of Azinam Limited..
Loader Moves To the Board Of Azinam
The German Force Presents Its Top Team
Maria Moraeus Hansen Hugo DijkgraafThilo Wieland
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 818
PE
TR
OL
EU
M
PE
OP
LE
The combined business would have had pro-forma production of approximately 575,000 barrels of oil equivalent per day in 2017, almost 70% of which comes from natural gas. Production is expected to rise to between 750,000 and 800,000 barrels of oil equivalent per day in the early 2020s as the company executes its business plan.
Mario Mehren, Chief Executive Officer (CEO) of Wintershall, will be the CEO of Wintershall DEA. Maria Moraeus Hanssen, CEO of DEA, will be the deputy CEO and Chief Operating Officer. In addition, Thilo Wieland, member of the Board of Executive Directors of Wintershall, and Hugo Dijkgraaf, Managing Director of Wintershall Norge, will be on the five-member Management Board of Wintershall DEA. The appointment of the Chief Financial Officer will be announced in
due course.
Two large German firms, LetterOne and BASF signed a Business Combination Agreement to merge their oil and gas
businesses and create Wintershall DEA, which, they state, “will be the largest independent European exploration and production company, with activity in twelve countries across Europe, Latin America, North Africa and the Middle East”.The top five people in the new company, have been announced.
The British Virgin Islands headquartered company, listed on the Toronto Stock Exchange Venture Exchange, is engaged in
natural gas exploration, development and supply in Tanzania through its subsidiary PanAfrican Energy Tanzania Limited. It trades under the trading symbols ORC.B and ORC.A.
Ta n za n i a n ga s p ro d u c e r, O rc a Exploration Group Inc., says its board of directors has commenced a global
search process for a new Chief Executive Officer. The search process will target individuals with the skills and experience to
maximise the value of, and diversify the risks facing, Orca's business while increasing the liquidity in the trading of Orca's shares.
Ak e r E n e r g y h a s a p p o i n t e d B j ø r n Thore Ribesen as
head of Drilling & Wells. He is coming to the job from the p o s i t i o n a s O f f s h o r e Installation Manager on Aker BP's Ivar Aasen field outside the coast of Norway. Ribesen has been with Aker BP since 2 0 0 7 , h o l d i n g s e v e ra l positions in the drilling d e p a r t m e n t , i n c l u d i n g
Drilling and Wells Manager for exploration drilling and Ivar Aasen. He joined Aker
stEnergy from October 1 2018. M r. R i b e s e n h o l d s a n E n g i n e e r i n g d e g re e i n Offshore Technology from University of Newcastle upon Tyne and an MBA from N o r w e g i a n S c h o o l o f Economics. Before he joined A k e r B P h e w a s i n Schlumberger (1996-2007),
where he held a variety of positions.Jeremy Hill resumes his position as Well Development Manager for Aker Energy. CEO Jan Arve Haugan thanks him for his interim service as SVP Drilling and Wells during the transition.
Ribesen Is Top Driller For Aker Energy
Orca In Search of A CEO
Philip Loader is a qualified geologist with
over 30 years' experience working in the oil and gas industry, with previous roles including EVP – Global Exploration at Woodside Petroleum, the Australian oil and gas company and Non-executive Chairman of Chariot Oil & Gas. Prior to joining Woodside Petroleum, Loader held senior executive roles at Mubadala Oil & Gas,
Anadarko Petroleum, Triton Energy, Sasol Petroleum and Neste Oil. Philip has a BSc in Geology from the University of Manchester, an MSc in Petroleum Geology from Imperial College London and an MBA from Henley Business School.
zinam Limited has appointed Philip ALoader as Non-executive Director with immediate effect., the company
reported in late September 2018. Mr. Loader has also been appointed as Strategic Adviser to Seacrest Capital Group, which is the financial backer of Azinam Limited..
Loader Moves To the Board Of Azinam
The German Force Presents Its Top Team
Maria Moraeus Hansen Hugo DijkgraafThilo Wieland
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 818
OI
L P
AT
CH
S
UB
SA
HA
RA
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018AFRICA OIL+GAS REPORT
ANGOLA RIG ACTIVITY SEPTEMBER 2018ANGOLA RIG ACTIVITY, SEPTEMBER 2018
Operator/RIG RIG Owner Current Location Operation Terrain
ExxonMobil
Deutag KCA Deutag KizombaB Production/Development Deepwater
Deutag KCA Deutag KizombaA Production Deepwater
TOTAL
Skyros Ocean Rig Block 32 Development Deepwater
Ensco DS-8 Ensco Block 17 Development Deepwater
Total No of Active Rigs 4
CONGO BRAZAVILLE
EQUATORIAL GUINEA
Tilapia Well Drills Through October 2018
A Surge of Drilling Activity Expected in Rio Muni
GHANA
Anglo African Oil & Gas plc commences operations on the TLP-103C well in the second week of October 2018.
The company completed installing the conductor pipe late in September and moved the rig to location by the end of that month.
The London listed junior purchased 56% of the field (holding an estimated 8 Million Barrels of Oil in probable reserves) in March 2017.
Gabriel Obiang Lima, Minister of Mines and Hydrocarbon believes that the survey itself is
part of “the proof of success of the Equatorial Guinea Bid Round 2016”. Block EG-24 was awarded to Ophir Energy in the aftermath of the round in late 2017. The company then farmed out 40% of the Block to Kosmos Energy, who is now carrying out the survey, as operator. The minister describes it as “one of
the biggest seismic processing surveys in the Rio Muni area”, adding that the project “ is very positive because it guarantees that there is going to be a lot of drilling activity in the Rio Muni Basin in 2019.”
Kosmos Energy has reached close to 70% of the carpet, three dimensional (3D) seismic survey it is carrying out over
the Block EG-24 offshore Equatorial Guinea. The survey commenced in May 2018.
Will Amni Petroleum entirely fund the first of its two obligation wells offshore Ghana, in 2019, if it can't
find a partner?
For over 15 months the Nigerian operator has been in search of a well heeled farminee willing to earn up to a 40 % equity in the Block by funding the two obligation wells (est. dry hole cost $45 million each), with a negotiated contribution to past costs. Envoi was commissioned by to assist in its search for a partner and has vigorously marketed it.
Amni was awarded the area as the distinct “Central Tano Block” in March 2014 for an initial seven year term of three exploration phases. Five prospects and eleven leads across the three plays have so far been identified to date with a combined potential of more than 3,500 MMBO in place, Envoi claims.
2An interpretation of the 1,600 km Tano Deep
23D data set together with some 450 km of 3D
PSDM reprocessed seismic has enabled Amni to select three possible drilling locations where stacked prospects can be tested by individual wells. But Amni was unable to spud the first of two commitment wells in late 2016 or early 2017.
The location is the Central Tano Block in the Tano Basin, which its 90% owned and operated. The remaining 10% is controlled by the Ghana National Petroleum Company (GNPC).
So, is 2019 drilling possible without a partner? Amni has producing properties in Nigeria, where it delivers 14,000BOPD without the challenge of oil theft (as the assets are offshore and the oil is directly produced into a Floating production facility).
2The 279.48 km Central Tano Block, part of the original Deepwater Tano Block, which was relinquished by its operator Tullow in 2013 as part of their Licence obligation, is situated approximately 60 km offshore in water depths of 300 to 1,500 metres and is bounded by the prolific Deepwater Tano and Cape Three
Points Blocks, within which are a number of very large discoveries, including the Jubilee, the TEN field complex and Teak Fields discovered from 2007 onwards. “These are recognised by the industry as the first discoveries in the deep water Cretaceous (Cenomanian-Turonian-Campanian) sand play, regenerating a West African exploration frenzy post the major Albian –Aptian synrift discoveries of the 90's”, Envoi says in a note to investors.
Amni May Drill Central Tano In 2019, Without A Partner
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 21A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 820
OI
L P
AT
CH
S
AH
AR
A
EGYPT
NIGER REPUBLIC
Egypt's cabinet approved in March an agreement to explore the North Sinai region of the Mediterranean Sea.
Under a comprehensive deal, the two partners will spend $105Million in two stages over six years, which involve drilling one well
in the first stage and another in the second.talian giant ENI and Tharwa (an Egyptian Istate hydrocarbon company) have combined to spud the first exploratory oil
well in Northern Sinai's offshore Noor
Concession.
..And success in the Eastern DesertIn West Bakr, the Company drilled a two well infill program in the M field resulting in two oil wells during August/September. M-North was drilled to a total depth of 5,113 feet and cased as an oil well. M-North encountered an internally estimated 132 feet of net oil pay. The M-North well is currently producing ~750 Bopd. M-South was drilled to a total depth of 5,077 feet and cased as an oil well. M-South encountered an internally estimated 142 feet of net oil pay. The M-South well was placed on production at an initial rate of ~500 Bopd in September. Both of these wells have exceeded
internal pre-drill estimates of initial production rates.Following M-South, the rig was moved to NW Gharib 38A-7 to drill a potential water injector in the NWG 38A pool. The NWG 38A-7 well was drilling as of last week of September 2018, a potential water injector targeting the 38A Red Bed pool in a structurally lower position 0.4 kilometres south of the NWG 38A Injector well (NWG 38A-I, drilled Q2 2018). The NWG 38A-I well encountered oil with an internally estimated 34 feet of net Red Bed oil pay and was placed on production in September at an initial rate of ~110BOPD (following a fracture stimulation). Should the NWG 38A-7 well also encounter additional oil column, the Company has planned an additional well further south at NWG 38A-8 as a contingency for reservoir pressure support.
Canadian explorer TranGlobe reported hitting a duster in the North West Sitra ('NWS') 12X well in the Western
Desert. The well was dilled to a total depth of 1 3 , 3 0 0 f e e t t a r g e t i n g a s t a c k e d Cretaceous/Jurassic prospect. It did not encounter hydrocarbons in the targeted zones and was abandoned. With the drilling of NWS 12X, the first phase work commitments have been met. Prior to January 7, 2019, the Company can elect to enter the second and final exploration phase (3.0 years after the extension of phase one). The second exploration phase has a two well ($6.million) work commitment and a mandatory relinquishment of 30% of the original concession area not held by development leases. A final decision on whether the Company will elect to relinquish the concession or enter the second exploration phase of the concession will be made following a full evaluation of the data obtained from the wells.…New well expected by NovemberIn South Ghazalat ('SGZ') the Company was preparing the location for SGZ 6X, the second exploration well in the concession. SGZ 6X is located on the eastern portion of the concession offsetting the Raml oil field in the
Abu Gharadig basin. The SGZ 6X prospect is targeting stacked Cretaceous targets similar to the Raml and SW Raml fields. Site construction is underway and it is expected t h a t S G Z 6 X w i l l b e d r i l l e d i n October/November.
ENI, Tharwa Spud a Wildcat In Sinai's Noor Concession
TransGlobe Wins Some, Loses Some, and Prepares New SpudsA dry hole in the Western Desert…
As with others, Zomo-1 is located in the R3/R4 PSC Area in the Agadem Basin, south east of the republic of Niger. It is also, as with the rest, designed to evaluate potential oil pay in the Eocene Sokor Alternances as the primary target.The well is planned to be drilled to a total depth of 2,438metres Drilling is expected to take between 30 and 35 days.The Company plans to log all prospective sections within the well, with further logging employed for hydrocarbon bearing sections. “In the success case, the well will be suspended for future re-entry and further evaluation, which could include well testing”, the company says.
avannah Petroleum has moved the GW 215 Rig to drill Sthe fifth well in its exploration campaign in the Niger Republic. Zomo-1, spudded on September 8, follows
Bushiya-1, Amdigh-1 Kunama-1 and Eridal-1, all drilled by the British explorer between March and August 2018, and all of which encountered crude oil bearing zones, considered by Savannah to be of commercial size.But none of the wells have been tested, so there is no clear handle on flow assurance.
Zomo-1; Likely Fifth Success or First Duster
OI
L P
AT
CH
S
UB
SA
HA
RA
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018AFRICA OIL+GAS REPORT
ANGOLA RIG ACTIVITY SEPTEMBER 2018ANGOLA RIG ACTIVITY, SEPTEMBER 2018
Operator/RIG RIG Owner Current Location Operation Terrain
ExxonMobil
Deutag KCA Deutag KizombaB Production/Development Deepwater
Deutag KCA Deutag KizombaA Production Deepwater
TOTAL
Skyros Ocean Rig Block 32 Development Deepwater
Ensco DS-8 Ensco Block 17 Development Deepwater
Total No of Active Rigs 4
CONGO BRAZAVILLE
EQUATORIAL GUINEA
Tilapia Well Drills Through October 2018
A Surge of Drilling Activity Expected in Rio Muni
GHANA
Anglo African Oil & Gas plc commences operations on the TLP-103C well in the second week of October 2018.
The company completed installing the conductor pipe late in September and moved the rig to location by the end of that month.
The London listed junior purchased 56% of the field (holding an estimated 8 Million Barrels of Oil in probable reserves) in March 2017.
Gabriel Obiang Lima, Minister of Mines and Hydrocarbon believes that the survey itself is
part of “the proof of success of the Equatorial Guinea Bid Round 2016”. Block EG-24 was awarded to Ophir Energy in the aftermath of the round in late 2017. The company then farmed out 40% of the Block to Kosmos Energy, who is now carrying out the survey, as operator. The minister describes it as “one of
the biggest seismic processing surveys in the Rio Muni area”, adding that the project “ is very positive because it guarantees that there is going to be a lot of drilling activity in the Rio Muni Basin in 2019.”
Kosmos Energy has reached close to 70% of the carpet, three dimensional (3D) seismic survey it is carrying out over
the Block EG-24 offshore Equatorial Guinea. The survey commenced in May 2018.
Will Amni Petroleum entirely fund the first of its two obligation wells offshore Ghana, in 2019, if it can't
find a partner?
For over 15 months the Nigerian operator has been in search of a well heeled farminee willing to earn up to a 40 % equity in the Block by funding the two obligation wells (est. dry hole cost $45 million each), with a negotiated contribution to past costs. Envoi was commissioned by to assist in its search for a partner and has vigorously marketed it.
Amni was awarded the area as the distinct “Central Tano Block” in March 2014 for an initial seven year term of three exploration phases. Five prospects and eleven leads across the three plays have so far been identified to date with a combined potential of more than 3,500 MMBO in place, Envoi claims.
2An interpretation of the 1,600 km Tano Deep
23D data set together with some 450 km of 3D
PSDM reprocessed seismic has enabled Amni to select three possible drilling locations where stacked prospects can be tested by individual wells. But Amni was unable to spud the first of two commitment wells in late 2016 or early 2017.
The location is the Central Tano Block in the Tano Basin, which its 90% owned and operated. The remaining 10% is controlled by the Ghana National Petroleum Company (GNPC).
So, is 2019 drilling possible without a partner? Amni has producing properties in Nigeria, where it delivers 14,000BOPD without the challenge of oil theft (as the assets are offshore and the oil is directly produced into a Floating production facility).
2The 279.48 km Central Tano Block, part of the original Deepwater Tano Block, which was relinquished by its operator Tullow in 2013 as part of their Licence obligation, is situated approximately 60 km offshore in water depths of 300 to 1,500 metres and is bounded by the prolific Deepwater Tano and Cape Three
Points Blocks, within which are a number of very large discoveries, including the Jubilee, the TEN field complex and Teak Fields discovered from 2007 onwards. “These are recognised by the industry as the first discoveries in the deep water Cretaceous (Cenomanian-Turonian-Campanian) sand play, regenerating a West African exploration frenzy post the major Albian –Aptian synrift discoveries of the 90's”, Envoi says in a note to investors.
Amni May Drill Central Tano In 2019, Without A Partner
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 21A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 820
OI
L P
AT
CH
S
AH
AR
A
EGYPT
NIGER REPUBLIC
Egypt's cabinet approved in March an agreement to explore the North Sinai region of the Mediterranean Sea.
Under a comprehensive deal, the two partners will spend $105Million in two stages over six years, which involve drilling one well
in the first stage and another in the second.talian giant ENI and Tharwa (an Egyptian Istate hydrocarbon company) have combined to spud the first exploratory oil
well in Northern Sinai's offshore Noor
Concession.
..And success in the Eastern DesertIn West Bakr, the Company drilled a two well infill program in the M field resulting in two oil wells during August/September. M-North was drilled to a total depth of 5,113 feet and cased as an oil well. M-North encountered an internally estimated 132 feet of net oil pay. The M-North well is currently producing ~750 Bopd. M-South was drilled to a total depth of 5,077 feet and cased as an oil well. M-South encountered an internally estimated 142 feet of net oil pay. The M-South well was placed on production at an initial rate of ~500 Bopd in September. Both of these wells have exceeded
internal pre-drill estimates of initial production rates.Following M-South, the rig was moved to NW Gharib 38A-7 to drill a potential water injector in the NWG 38A pool. The NWG 38A-7 well was drilling as of last week of September 2018, a potential water injector targeting the 38A Red Bed pool in a structurally lower position 0.4 kilometres south of the NWG 38A Injector well (NWG 38A-I, drilled Q2 2018). The NWG 38A-I well encountered oil with an internally estimated 34 feet of net Red Bed oil pay and was placed on production in September at an initial rate of ~110BOPD (following a fracture stimulation). Should the NWG 38A-7 well also encounter additional oil column, the Company has planned an additional well further south at NWG 38A-8 as a contingency for reservoir pressure support.
Canadian explorer TranGlobe reported hitting a duster in the North West Sitra ('NWS') 12X well in the Western
Desert. The well was dilled to a total depth of 1 3 , 3 0 0 f e e t t a r g e t i n g a s t a c k e d Cretaceous/Jurassic prospect. It did not encounter hydrocarbons in the targeted zones and was abandoned. With the drilling of NWS 12X, the first phase work commitments have been met. Prior to January 7, 2019, the Company can elect to enter the second and final exploration phase (3.0 years after the extension of phase one). The second exploration phase has a two well ($6.million) work commitment and a mandatory relinquishment of 30% of the original concession area not held by development leases. A final decision on whether the Company will elect to relinquish the concession or enter the second exploration phase of the concession will be made following a full evaluation of the data obtained from the wells.…New well expected by NovemberIn South Ghazalat ('SGZ') the Company was preparing the location for SGZ 6X, the second exploration well in the concession. SGZ 6X is located on the eastern portion of the concession offsetting the Raml oil field in the
Abu Gharadig basin. The SGZ 6X prospect is targeting stacked Cretaceous targets similar to the Raml and SW Raml fields. Site construction is underway and it is expected t h a t S G Z 6 X w i l l b e d r i l l e d i n October/November.
ENI, Tharwa Spud a Wildcat In Sinai's Noor Concession
TransGlobe Wins Some, Loses Some, and Prepares New SpudsA dry hole in the Western Desert…
As with others, Zomo-1 is located in the R3/R4 PSC Area in the Agadem Basin, south east of the republic of Niger. It is also, as with the rest, designed to evaluate potential oil pay in the Eocene Sokor Alternances as the primary target.The well is planned to be drilled to a total depth of 2,438metres Drilling is expected to take between 30 and 35 days.The Company plans to log all prospective sections within the well, with further logging employed for hydrocarbon bearing sections. “In the success case, the well will be suspended for future re-entry and further evaluation, which could include well testing”, the company says.
avannah Petroleum has moved the GW 215 Rig to drill Sthe fifth well in its exploration campaign in the Niger Republic. Zomo-1, spudded on September 8, follows
Bushiya-1, Amdigh-1 Kunama-1 and Eridal-1, all drilled by the British explorer between March and August 2018, and all of which encountered crude oil bearing zones, considered by Savannah to be of commercial size.But none of the wells have been tested, so there is no clear handle on flow assurance.
Zomo-1; Likely Fifth Success or First Duster
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 23
Cormorant-1 penetrated a 50-metre fan system within the Cormorant Prospect. Interbedded sandstones were encountered in the primary objective, but they proved to be water bearing. Wet gas signatures, indicative of oil, were encountered in the overlying shale section. Tullow Oil's geoscientists say that
important geological data has been gained from this well, and, in combination with h i g h q u a l i t y 3 D seismic data, will provide valuable insights into the future prospectivity of PEL 37 where several additional p r o s p e c t s w i t h significant resource potential have been mapped.
The first of the two wells scheduled to set off another round of drilling in Namibia, has come up as a duster.
Tullow Oil operated Cormorant-1 exploration well on Petroleum Exploration License 37 (PEL 37) offshore the Republic of Namibia encountered non-commercial hydrocarbons. PEL 37 covers 17,295 square kilometres in the Walvis Basin offshore Namibia, approximately 420 kilometers south of the Angolan-Namibian border. The hole, located in 548 metres of water, was drilled by the Ocean Rig Poseidon drillship to a total depth of 3,855 metres. It has since been plugged and abandoned.
“The probe confirmed the existence of a mid-Cretaceous aged deep marine fan sandstone system with further potential in the play”, says . Jan Maier, encouraged that VP Exploration for Africa Energy, a minority partner with 10% stake in the project. PEL 37 is operated by Tullow Namibia Ltd, which holds 35%, with
partners ONGC Videsh Ltd. and Paragon Investment Holdings (Pty) Ltd, holding 30% and 5%, respectively. Africa Energy owns one-third of Pancontinental Namibia (Pty) Ltd, which holds a 30% participating interest in the tract, resulting in a 10% effective interest for the Company.
NAMIBIA The Namibian Rush Hits A Bump
OI
L P
AT
CH
S
UB
SA
HA
RA
Chariot Oil and Gas , a London listed minnow, announced the deployment of the Ocean Rig Poseidon to spud the
Prospect S well in the Central Blocks licence offshore Namibia, less than a week after Tullow Oil went to town with the results of Cormorant-1 as a dry hole.
The structure on which the Prospect S was drilled is one of five dip-closed structural traps, totalling 1,758MMBbls gross mean prospective resources, which have been identified in the Upper Cretaceous turbidite clastic play fairway. The company had talked
of a probability of geologic success of 29%, citing a Competent Persons Report by Netherland Sewell Associated Inc.
12 days later, the probe was announced a duster. The well had been safely drilled to a total measured depth (MD) of 4,165 m to test the stacked targets in Prospect S. It penetrated the anticipated turbidite reservoir sands, in line with the pre-drill prognosis, however the
reservoirs were water-bearing. “The data collected will be used to calibrate the existing data sets to understand the implications of the well results on the prospectivity of the surrounding area.”
“A further two higher r isk-reward, stratigraphic traps, totalling 885MMBbls gross mean prospective resources”, was to have been de-risked through the calibration of the
26,100km of proprietary 3D seismic data on the Central Blocks with the result of the Prospect S well. All that did not happen. Chariot operates the Central Blocks with 65%. Partners include Azinam 20%, NAMCOR 10% and Ignitus 5%.
The operator was in the process of plugging and abandoning the well as we went to press in early October 2018.
GABON
NIGERIA
roton expects a drilling rig to arrive in EOil Mining Lease (OML )18 by late October 2018.
It will be the company's first new well since it purchased 45% of the lease from Shell, ENI and TOTAL and became the operator in September 2015. Other wells are planned to follow.
The proposed well, an infill probe in the Akaso field, is planned to spud in early November, and have a duration of approximately 60 days, Eroton has vigorously optimised the OML 18
since it commenced operations three years ago, running Workovers, installing Gas lift and Lease Automatic Custody Transfer ("LACT") units.
BW Offshore has successfully appraised the discovery it made in late August 2018 in the Ruche North East (DRNEM-
1), located in the Dussafu Marin PSC, offshore Gabon.
The rig has been demobilized and the well has been plugged and abandoned, as BW Offshore and partners evaluate the resources for the next phase of development.The appraisal was made by drilling a sidetrack
(DRNEM-1ST1) to the northwest to test the lateral extent and structural elevation of both
the Gamba and Dentale reservoirs.DRNEM-1 ST 1 encountered approximately 34 metres of total oil pay (TVD) in the Gamba reservoir and Dentale reservoirs. In addition, several other stacked sands with oil shows were encountered. The sidetrack was drilled to a total depth (TD) in the Dentale of 3,600 metres, (3,285 metres True Vertical Depth
Subsea (TVDSS) ), approximately 800 metres from the original wellbore.
Eroton To Spud An Akaso Well in NovemberOthers to follow in the first drilling campaign since September 2015
BW Offshore Succeeds In Appraising New Discovery
….And the Second Well Is Also A Duster
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 822
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018 AFRICA OIL+GAS REPORT
In Association with
NIGERIA RIG ACTIVITY AS OF MID SEPTEMBER 2018Operator /RIG RIG Owner Current Loca�on Opera�ons Terrain
AMNI
ADRIATIC I SHELF DRILLING Okoro Ac�ve Offshore
CONOIL
Majes�c Depthwize Ango to be demobbed Swamp
Monarch Depthwize Toju Eja Nla Ac�ve Offshore
CHEVRON NIG (SHELF)
OES Respect OES Energy Services Dibi Ac�ve Onshore/Swamp
Resourceful Shelf Drilling Sonam Ac�ve Offshore
CHEVRON NIG (DEEPWATER)
ENSCO-DS4 ODENL Agbami Ac�ve Deepwater
ELCREST
OES Teamwork OES Energy Services Opuama Ac�ve Swamp
Deutag T 57 Deutag Ubima Comple�ons Land
EXXONMOBIL
Trident 14 Shelf Drilling Adua A Ac�ve Offshore
MONI PULO
Imperial Depthwize Inaha Ac�ve Offshore
NAOC
HPEB 120 ZPEB Oleh Ac�ve Land
OES Integrity OES Onne Pre-Move Offshore
HI LONG 19 SAP HI LONG Kwale Ac�ve Land
NEWCROSS E & P
SHENG LI -4 SHENGLI Awoba NW Ac�ve Swamp
NDPR
ACME - 5 ACME Ogbele Ac�ve Land
ND-WESTERN
HPEB 187 ZPEB Ughelli Ac�ve Land
SEEPCO
Bogel Durga 1 Bri�sh Oil&Gas Expl Okwuibome Ac�ve Land
Bogel Durga 2 Bri�sh Oil&Gas Expl Okwuibome Ac�ve Land
Bogel Durga 3 Bri�sh Oil&Gas Expl Agu Comple�on Land
Bogel Durga 4 Bri�sh Oil&Gas Expl Agu Rig Move Land
Bogel Durga 5 Bri�sh Oil&Gas Expl Anieze Rig Move Land
Bogel Durga 6 Bri�sh Oil&Gas Expl Akara Ac�ve Land
Bogel Durga 7 Bri�sh Oil&Gas Expl Agu Rig Move Land
SNEPCO
ENSCO-DS-10 ODENL Bonga Ac�ve Deepwater
SPDC
BR-301 SDF Dodo North Ac�ve Swamp
HI LONG 27 SAP HI LONG Epu Ac�ve Land
Sheng Li-1 SHENGLI EA Ac�ve Offshore
TOTAL (DEEPWATER)
West Jupiter Seadrill Akpo Ac�ve Deepwater
TOTAL (SHELF)
Bal�c 1 Shelf Drilling Ofon Ac�ve Offshore
Frigg Borr Drilling Ayama Ac�ve Offshore
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 23
Cormorant-1 penetrated a 50-metre fan system within the Cormorant Prospect. Interbedded sandstones were encountered in the primary objective, but they proved to be water bearing. Wet gas signatures, indicative of oil, were encountered in the overlying shale section. Tullow Oil's geoscientists say that
important geological data has been gained from this well, and, in combination with h i g h q u a l i t y 3 D seismic data, will provide valuable insights into the future prospectivity of PEL 37 where several additional p r o s p e c t s w i t h significant resource potential have been mapped.
The first of the two wells scheduled to set off another round of drilling in Namibia, has come up as a duster.
Tullow Oil operated Cormorant-1 exploration well on Petroleum Exploration License 37 (PEL 37) offshore the Republic of Namibia encountered non-commercial hydrocarbons. PEL 37 covers 17,295 square kilometres in the Walvis Basin offshore Namibia, approximately 420 kilometers south of the Angolan-Namibian border. The hole, located in 548 metres of water, was drilled by the Ocean Rig Poseidon drillship to a total depth of 3,855 metres. It has since been plugged and abandoned.
“The probe confirmed the existence of a mid-Cretaceous aged deep marine fan sandstone system with further potential in the play”, says . Jan Maier, encouraged that VP Exploration for Africa Energy, a minority partner with 10% stake in the project. PEL 37 is operated by Tullow Namibia Ltd, which holds 35%, with
partners ONGC Videsh Ltd. and Paragon Investment Holdings (Pty) Ltd, holding 30% and 5%, respectively. Africa Energy owns one-third of Pancontinental Namibia (Pty) Ltd, which holds a 30% participating interest in the tract, resulting in a 10% effective interest for the Company.
NAMIBIA The Namibian Rush Hits A Bump
OI
L P
AT
CH
S
UB
SA
HA
RA
Chariot Oil and Gas , a London listed minnow, announced the deployment of the Ocean Rig Poseidon to spud the
Prospect S well in the Central Blocks licence offshore Namibia, less than a week after Tullow Oil went to town with the results of Cormorant-1 as a dry hole.
The structure on which the Prospect S was drilled is one of five dip-closed structural traps, totalling 1,758MMBbls gross mean prospective resources, which have been identified in the Upper Cretaceous turbidite clastic play fairway. The company had talked
of a probability of geologic success of 29%, citing a Competent Persons Report by Netherland Sewell Associated Inc.
12 days later, the probe was announced a duster. The well had been safely drilled to a total measured depth (MD) of 4,165 m to test the stacked targets in Prospect S. It penetrated the anticipated turbidite reservoir sands, in line with the pre-drill prognosis, however the
reservoirs were water-bearing. “The data collected will be used to calibrate the existing data sets to understand the implications of the well results on the prospectivity of the surrounding area.”
“A further two higher r isk-reward, stratigraphic traps, totalling 885MMBbls gross mean prospective resources”, was to have been de-risked through the calibration of the
26,100km of proprietary 3D seismic data on the Central Blocks with the result of the Prospect S well. All that did not happen. Chariot operates the Central Blocks with 65%. Partners include Azinam 20%, NAMCOR 10% and Ignitus 5%.
The operator was in the process of plugging and abandoning the well as we went to press in early October 2018.
GABON
NIGERIA
roton expects a drilling rig to arrive in EOil Mining Lease (OML )18 by late October 2018.
It will be the company's first new well since it purchased 45% of the lease from Shell, ENI and TOTAL and became the operator in September 2015. Other wells are planned to follow.
The proposed well, an infill probe in the Akaso field, is planned to spud in early November, and have a duration of approximately 60 days, Eroton has vigorously optimised the OML 18
since it commenced operations three years ago, running Workovers, installing Gas lift and Lease Automatic Custody Transfer ("LACT") units.
BW Offshore has successfully appraised the discovery it made in late August 2018 in the Ruche North East (DRNEM-
1), located in the Dussafu Marin PSC, offshore Gabon.
The rig has been demobilized and the well has been plugged and abandoned, as BW Offshore and partners evaluate the resources for the next phase of development.The appraisal was made by drilling a sidetrack
(DRNEM-1ST1) to the northwest to test the lateral extent and structural elevation of both
the Gamba and Dentale reservoirs.DRNEM-1 ST 1 encountered approximately 34 metres of total oil pay (TVD) in the Gamba reservoir and Dentale reservoirs. In addition, several other stacked sands with oil shows were encountered. The sidetrack was drilled to a total depth (TD) in the Dentale of 3,600 metres, (3,285 metres True Vertical Depth
Subsea (TVDSS) ), approximately 800 metres from the original wellbore.
Eroton To Spud An Akaso Well in NovemberOthers to follow in the first drilling campaign since September 2015
BW Offshore Succeeds In Appraising New Discovery
….And the Second Well Is Also A Duster
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 822
Vol 19, No 8, October 2018
reportwww.africaoilgasreport.com
©Copyright 2018 AFRICA OIL+GAS REPORT
In Association with
NIGERIA RIG ACTIVITY AS OF MID SEPTEMBER 2018Operator /RIG RIG Owner Current Loca�on Opera�ons Terrain
AMNI
ADRIATIC I SHELF DRILLING Okoro Ac�ve Offshore
CONOIL
Majes�c Depthwize Ango to be demobbed Swamp
Monarch Depthwize Toju Eja Nla Ac�ve Offshore
CHEVRON NIG (SHELF)
OES Respect OES Energy Services Dibi Ac�ve Onshore/Swamp
Resourceful Shelf Drilling Sonam Ac�ve Offshore
CHEVRON NIG (DEEPWATER)
ENSCO-DS4 ODENL Agbami Ac�ve Deepwater
ELCREST
OES Teamwork OES Energy Services Opuama Ac�ve Swamp
Deutag T 57 Deutag Ubima Comple�ons Land
EXXONMOBIL
Trident 14 Shelf Drilling Adua A Ac�ve Offshore
MONI PULO
Imperial Depthwize Inaha Ac�ve Offshore
NAOC
HPEB 120 ZPEB Oleh Ac�ve Land
OES Integrity OES Onne Pre-Move Offshore
HI LONG 19 SAP HI LONG Kwale Ac�ve Land
NEWCROSS E & P
SHENG LI -4 SHENGLI Awoba NW Ac�ve Swamp
NDPR
ACME - 5 ACME Ogbele Ac�ve Land
ND-WESTERN
HPEB 187 ZPEB Ughelli Ac�ve Land
SEEPCO
Bogel Durga 1 Bri�sh Oil&Gas Expl Okwuibome Ac�ve Land
Bogel Durga 2 Bri�sh Oil&Gas Expl Okwuibome Ac�ve Land
Bogel Durga 3 Bri�sh Oil&Gas Expl Agu Comple�on Land
Bogel Durga 4 Bri�sh Oil&Gas Expl Agu Rig Move Land
Bogel Durga 5 Bri�sh Oil&Gas Expl Anieze Rig Move Land
Bogel Durga 6 Bri�sh Oil&Gas Expl Akara Ac�ve Land
Bogel Durga 7 Bri�sh Oil&Gas Expl Agu Rig Move Land
SNEPCO
ENSCO-DS-10 ODENL Bonga Ac�ve Deepwater
SPDC
BR-301 SDF Dodo North Ac�ve Swamp
HI LONG 27 SAP HI LONG Epu Ac�ve Land
Sheng Li-1 SHENGLI EA Ac�ve Offshore
TOTAL (DEEPWATER)
West Jupiter Seadrill Akpo Ac�ve Deepwater
TOTAL (SHELF)
Bal�c 1 Shelf Drilling Ofon Ac�ve Offshore
Frigg Borr Drilling Ayama Ac�ve Offshore
Tullow Will Bring Five Wells On Line Between Now and March 2019
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 824
OI
L P
AT
CH
S
UB
SA
HA
RA
GHANA
NIGERIA
Four rigs owned by the Indian independent SEEPCo: the BOGEL series rigs, are on standby due to flooding issues.
The state hydrocarbon company NPDC, the operating arm of NNPC, says they haven't yet got DPR approval for the AG Butler rig, so the rig is not fully accepted yet. This is surprising, considering that the rig caught fire on their Abura field in early September 2018. The land
rig OES integrity is now on location for NAOC, a Nigerian subsidiary of the Italian giant ENI. It spud on the last week of September 2018.
Meanwhile, Hilong 27, which had drilled the deep, High Pressure gas targets in the Gbaran -Kolo Creek -Epu field areas for Shell since 2014, has been released to NAOC. The
Gbaran-Epu-Kolo Creek deep HP drilling campaign was to unlock all the reservoirs that are located deeper than normal hydrostatic pressure on these fields. The Gbaran Field gas project was already in production before the campaign, but it was only producing in the hydrostatic pressure zones before this campaign.
he rig operator Depthwize's Majestic Thas been demobilised from Conoil's Ango field in Oil Mining Lease (OML) 59
for repairs after fire.
COSL Force rig was expected to have mobilized on its way to Nigeria, since June 2018 at the latest The Ororo field is held by Guarantee
Petroleum and Owena Oil &Gas, to whom Sirius is a Financing and Technical Partner. But in early June 2018, Sirius reported that COSL Force Jack up rig had commenced critical equipment re-certification programme which it had to do “before it could be released to its next contract” That re-certification process has taken all the last four months.
After waiting for over four months on COSL Force rig, Sirius Petroleum has moved on to an alternative for its two
well drilling campaign on the Ororo field in shallow water Oil Mining Lease (OML) 95 offshore North western Niger Delta of Nigeria.The company now says it would utilise the Adriatic I jack up, operated by Shelf Drilling, and currently on duty on Amni Petroleum's Okoro field in South eastern offshore Niger Delta. Sirius says it has decided, by mutual agreement with China Oilfield Services Limited (COSL), “to abrogate its agreement with the latter for the supply of a jack-up rig for the drilling programme on the Ororo field.
Sirius' agreement with Shelf Drilling Limited is to supply its Adriatic I jack-up rig “which is scheduled to become available during November 2018” .. Sirius' statement indicates that the rig is concluding a well campaign with Amni, which is “utilising Schlumberger services and equipment on board the Adriatic I, and meets the specifications required for the Company's proposed drilling programme at Ororo-2 and Ororo-3”. Sirius says that its
Company's operational budget for the Ororo drilling programme as disclosed in the Company's admission document published on 30 November 2017 remains unchanged. This means that the four month delay in waiting for the COSL jack up rig has not caused any financial harm. The company doesn't say anything of the fact that part of the deal with COSL was that the drilling company would be part vendor financing the drilling. It says of Adriatic 1: “The proposed rig is fully certified, currently previously announced, the Company and its operational partners, Schlumberger and Add Energy intend to achieve the spudding of Ororo-2 at the earliest possible time during Q4 2018.”
The Maersk Drilling operated ultra deepwater drillship Maersk Viking will spud the Pecan-4A appraisal well offshore Ghana latest November 2018. Aker's contract with Maersk covers one firm well with an expected duration of between 30 and 35 days, with options for additional wells.
Aker Energy, who purchased Hess Corp's Ghana interest less than nine months ago, has set to work on the acreage, signing a rig contract and looking to drill in the next month
and half.
The location of the probe is in an ultra deepwater depth of 2,674metres in the Deepwater Tano Cape Three Points (DWT/CTP) block. The main objective of the well will be to test the extension of the Pecan Field. This will give valuable and important input when optimizing the plan of development for the field and in understanding the wider appraisal potential of the block”.Aker Energy operates the DWT/CTP block with a 50% participating
interest, LUKOIL (38%), Ghana National Petroleum Corporation (10%) and Fueltrade (2%).
Majestic Demobbed, Hilong Moves Over and The BOGELs Are Flooded
For Ororo 2, Sirius Will Take Adriatic 1, from Amni
Aker Makes Hay With the Pecan Appraisal
The surge in output is expected to be achieved by bringing five new wells on line by March 2019. There are options to drill up to eight i(8)
infill wells in 2019. Rig availability is not a problem, the company says. Tullow's net output in West Africa (including non-operated assets in Gabon and Equatorial Guinea) was 89,100BOPD in 2017, while net production for 2018 is targeted at between 82,000 and 90,000BOPD.
Tullow Oil hopes to achieve significant results from its current infill drilling campaign offshore Ghana, which could
shoot gross production up to 180,000BOPD by March 2019.This would be about 33% jump from the 122,000BOPD achieved in the company's
assets in the first seven months of 2018. Tullow has about 41% of the Jubilee field and the TEN cluster, netting it about 50,000BOPD in the period.
Tullow Will Bring Five Wells On Line Between Now and March 2019
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 824
OI
L P
AT
CH
S
UB
SA
HA
RA
GHANA
NIGERIA
Four rigs owned by the Indian independent SEEPCo: the BOGEL series rigs, are on standby due to flooding issues.
The state hydrocarbon company NPDC, the operating arm of NNPC, says they haven't yet got DPR approval for the AG Butler rig, so the rig is not fully accepted yet. This is surprising, considering that the rig caught fire on their Abura field in early September 2018. The land
rig OES integrity is now on location for NAOC, a Nigerian subsidiary of the Italian giant ENI. It spud on the last week of September 2018.
Meanwhile, Hilong 27, which had drilled the deep, High Pressure gas targets in the Gbaran -Kolo Creek -Epu field areas for Shell since 2014, has been released to NAOC. The
Gbaran-Epu-Kolo Creek deep HP drilling campaign was to unlock all the reservoirs that are located deeper than normal hydrostatic pressure on these fields. The Gbaran Field gas project was already in production before the campaign, but it was only producing in the hydrostatic pressure zones before this campaign.
he rig operator Depthwize's Majestic Thas been demobilised from Conoil's Ango field in Oil Mining Lease (OML) 59
for repairs after fire.
COSL Force rig was expected to have mobilized on its way to Nigeria, since June 2018 at the latest The Ororo field is held by Guarantee
Petroleum and Owena Oil &Gas, to whom Sirius is a Financing and Technical Partner. But in early June 2018, Sirius reported that COSL Force Jack up rig had commenced critical equipment re-certification programme which it had to do “before it could be released to its next contract” That re-certification process has taken all the last four months.
After waiting for over four months on COSL Force rig, Sirius Petroleum has moved on to an alternative for its two
well drilling campaign on the Ororo field in shallow water Oil Mining Lease (OML) 95 offshore North western Niger Delta of Nigeria.The company now says it would utilise the Adriatic I jack up, operated by Shelf Drilling, and currently on duty on Amni Petroleum's Okoro field in South eastern offshore Niger Delta. Sirius says it has decided, by mutual agreement with China Oilfield Services Limited (COSL), “to abrogate its agreement with the latter for the supply of a jack-up rig for the drilling programme on the Ororo field.
Sirius' agreement with Shelf Drilling Limited is to supply its Adriatic I jack-up rig “which is scheduled to become available during November 2018” .. Sirius' statement indicates that the rig is concluding a well campaign with Amni, which is “utilising Schlumberger services and equipment on board the Adriatic I, and meets the specifications required for the Company's proposed drilling programme at Ororo-2 and Ororo-3”. Sirius says that its
Company's operational budget for the Ororo drilling programme as disclosed in the Company's admission document published on 30 November 2017 remains unchanged. This means that the four month delay in waiting for the COSL jack up rig has not caused any financial harm. The company doesn't say anything of the fact that part of the deal with COSL was that the drilling company would be part vendor financing the drilling. It says of Adriatic 1: “The proposed rig is fully certified, currently previously announced, the Company and its operational partners, Schlumberger and Add Energy intend to achieve the spudding of Ororo-2 at the earliest possible time during Q4 2018.”
The Maersk Drilling operated ultra deepwater drillship Maersk Viking will spud the Pecan-4A appraisal well offshore Ghana latest November 2018. Aker's contract with Maersk covers one firm well with an expected duration of between 30 and 35 days, with options for additional wells.
Aker Energy, who purchased Hess Corp's Ghana interest less than nine months ago, has set to work on the acreage, signing a rig contract and looking to drill in the next month
and half.
The location of the probe is in an ultra deepwater depth of 2,674metres in the Deepwater Tano Cape Three Points (DWT/CTP) block. The main objective of the well will be to test the extension of the Pecan Field. This will give valuable and important input when optimizing the plan of development for the field and in understanding the wider appraisal potential of the block”.Aker Energy operates the DWT/CTP block with a 50% participating
interest, LUKOIL (38%), Ghana National Petroleum Corporation (10%) and Fueltrade (2%).
Majestic Demobbed, Hilong Moves Over and The BOGELs Are Flooded
For Ororo 2, Sirius Will Take Adriatic 1, from Amni
Aker Makes Hay With the Pecan Appraisal
The surge in output is expected to be achieved by bringing five new wells on line by March 2019. There are options to drill up to eight i(8)
infill wells in 2019. Rig availability is not a problem, the company says. Tullow's net output in West Africa (including non-operated assets in Gabon and Equatorial Guinea) was 89,100BOPD in 2017, while net production for 2018 is targeted at between 82,000 and 90,000BOPD.
Tullow Oil hopes to achieve significant results from its current infill drilling campaign offshore Ghana, which could
shoot gross production up to 180,000BOPD by March 2019.This would be about 33% jump from the 122,000BOPD achieved in the company's
assets in the first seven months of 2018. Tullow has about 41% of the Jubilee field and the TEN cluster, netting it about 50,000BOPD in the period.
THOSE WHO ARE SELLINGA round up of some of the rich pickings in the petroleum rights sector
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 27
F
AR
M
IN
F
AR
M
OU
T
quatorial Guinea will focus on ultra-Edeepwater in its next bidding round. It may be making the announcement at
the end of 2018. But the country may also open the planned
next licencing rounds to fields that are already producing. “Some of the contracts are expiring”, says Gabrial Obiang Lima, the Minister of Mines and Hydrocarbon. “We are deciding to give the first option to the
operator for a proposal. If we see they are not at the level we want, we will go through a tender process where many companies can participate in presenting proposals to do something better”.
Multiclient data surveys are cheaper and the products can be high graded in house.
B y p u r c h a s i n g We s t e r n G e c o f r o m Schlumberger, Shearwater will own and operate a fleet of 14 seismic vessels offering a full range of acquisition services including three dimensional (3D), four dimensional (4D) and ocean bottom seismic (OBS). The company will also have a portfolio of proprietary streamer technology and processing software enabling effective execution of geophysical surveys and delivery of high-quality data. The combined company will have approximately 600 employees and will operate in all major offshore basins across the world.
Schlumberger's decision to sell the marine seismic acquisition assets and operations of WesternGeco, its
geophysical services product line, reflects the lowturn of the exclusive seismic business.The company will focus on multi-client seismic surveys, which reduces the burden of having to maintain a fleet of marine survey vessels.
Schlumberger already has a huge library,
which enables it to offer post survey data processing after it conducts multi-client surveys, which is the growth area in the seismic market today.E & P c o m p a n i e s a r e becoming more reluctant in funding exclusive, large area seismic acquisition and are getting more interested in sharing exploration seismic data.
“Our customers are unwilling to pay a premium for our differentiated seismic measurement and surveys, and they clearly believe that generic technology and performance is sufficient”, Schlumberger's CEO, Paal Kibsgarard said in the company's 4Q 2017 report. “In general, this approach commoditises the seismic data acquisition
business and creates a very low technical barrier to entry for smaller players, who steadily add vessels and keep the market in a chronic state of overcapacity”. In the multiclient business, library data are sold to oil companies at a significantly lower cost than proprietary data from an exclusive seismic survey.
Eq Guinea Mulls Bid Round For Ultradeepwater
Schlumberger Sells Out of “Exclusive Seismic”, To Face Multiclient Business
Ophir Winds Down in Africa
Its Half Year 2018 report is a clear indication that the pie had diminished for it in the former.
Ophir Energy, the London listed minnow, is looking away from Africa, a continent that was once its core
focus, and looking forward to Asia. In the last 18 months Ophir had exited all of its PSCs in Cote d'Ivoire and Gabon, after eight dry holes in the course of five years. Although it won a new tract in Equatorial Guinea, it almost immediately sold 40% of it, becoming a non-operator. The proposed LNG project in Tanzania, of which the company holds 20%, is not gaining traction. As with the Fortuna, “our LNG options have potential value that is not today reflected in our share price despite a
rapidly improving LNG landscape. We will consider options to unlock this value and intend to ensure that our shareholders share appropriately in any value subsequently realised”. Outside of these depressing stories out of Africa, “the Board is rebalancing the company's portfolio towards a larger Asian production and cash flow base with the aim of building a stable, self-financing E&P company”. Ophir was born in Africa: created 14 years ago by Mvelaphanda Holdings, the diversified mining group founded by the South African politician Tokyo Sexwale. The company rapidly developed an extensive exploration portfolio covering projects in Equatorial Guinea, Gabon, Congo Brazzaville, the Nigeria-Sa˘o Tomé/Principe Joint Development Zone, South Africa, Tanzania, Somaliland, and Saharawi Arab Democratic Republic. As it expanded beyond Africa, Ophir dropped Congo, South Africa, the Nigeria-Sao Tomé/Principe Joint Development Zone, Somaliland and Saharawi Arab Democratic Republic. It grabbed stakes in Thailand, Myamar, Indonesia and Malaysia by acquiring Salamander Energy in 2015. Now it has two producing oil and gas assets in Thailand, and has commissioned a gas field development in Indonesia.
Ophir made a telling remark about the Fortuna FLNG project, located offshore Equatorial Guinea, in the highlights of that report . “Ref lect ing the uncertainty surrounding this however”, it noted, “we have impaired the value of the asset to
$300Mi l l ion”. T h i s i s d o u r o b s e r v a t i o n about a project which, until last March, was the company's most i m p o r t a n t h y d r o c a r b o n d e v e l o p m e n t programme. The company has struggled for close to four years, to raise money to get to project sanction a n d “ u n c e r t a i n t y
remains as to whether this can be realised before the licence expires”, by end of 2018.
Schlumberger's CEO, Paal Kibsgarard
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 826
F
AR
M
IN
F
AR
M
OU
T
SOCO International, the small, London Listed producer with less than 8,000BOEPD equity production to its credit, beat SAPETRO and other independents in the bid to acquire Merlon Petroleum
El Fayum Company.
SAPETRO had a similar “near miss” in Equatorial Guinea. Shortly after it agreed to end discussions with Dallas based Pan Atlantic, holder of the W Block, the Government revoked the asset from Pan Atlantic. Kosmos
Energy walked into Equatorial Guinea several months later and purchased the same asset from the government.
SAPETRO's failure to clinch the deal is the latest in a series of failed attempts to expand its footprint on the continent. After spending over $200Million in a fruitless experiment to revamp an oilfield in shallow offshore Benin Republic and hundreds of million of dollars feeling its way through underexplored tracts in the deepwater Mozambique Channel, SAPETRO has been in search of assets within and outside Nigeria to bolster its portfolio, which includes 15% equity in deepwater Oil Mining Lease (OML) 130, a hugely prospective acreage which hosts the large Akpo and Egina fields.
It won by offering approximately $215Million. Merlon is a privately owned oil and gas company with a 100% operated working interest in the onshore El Fayum concession in Egypt.
As recently as September 2017, SAPETRO ended negotiations with Hyperdynamics, holder of an acreage hosting the Fatala, reportedly a highly prospective location offshore Guinea, Northwest Africa. But soon after Hyperdynamics itself was forced to relinquish the block, executives from the French oil giant TOTAL, visited the country and signed agreements with the government, awarding TOTAL a large tract that includes the Fatala prospect.
Prior to these misses, SAPETRO invested heavily in Afren at a time the company was about to crash, although hardly anyone knew it then.
SAPETRO has set itself apart from other 1990s era beneficiaries of Nigerian local content acreage policy who have been content with rent. It had built technical competencies in its workforce and is roaring to take on the continent, but has been spectacularly unlucky.
“The ratification process was delayed by the Ghanaian General and Presidential Election at end 2016 (originally scheduled for November, but finally occurring in December 2016), with officials and parliamentarians reluctant to sign-off shortly before a democratic change of government”.
The subject contract is for the development of the Tano 2A Block, which sits in the country's most prospective hydrocarbon province. Petrel holds a 30% interest in the agreement (held through its interest in Pan Andean Resources Limited), Clontarf Energy, a sister
company holds 60% and local interests hold 10%.Petrel Resources is hopeful that an oil
exploration agreement it signed in 2010 will finally be ratified by the
incumbent executive cabinet in Ghana, “now that the party who first made the agreement with us” has returned.
The company is now far more confident than it ever was, about g e t t i n g a h e a d i n Ghana. “Now that the ratification process has been made a Ghanaian priority, we have applied for direct negotiations to finalize and implement our negotiated Petroleum Agreement on Tano 2A Block, with adjusted coordinates, in accordance with Section 10(9) of the Petroleum Exploration & Production Act 919, 2016”.
The company says that, with a new government in place since January 2017,
“there is now renwed energy to attempt to finalise a deal”. “It was an earlier NPP administration which
had signed the original Memorandum of Understanding and Heads of Agreement with our group shortly before the end 2008 Ghanaian General and Presidential Election”, Petrel says
“Since 2010, there has been a series of obstacles placed in the way of ratification”, the company laments in a recent update. “We believed a court settlement in 2014 would expedite the decision. It has not”.
Its acquisition of Deep Gulf Energy (DGE), a deepwater company operating in the Gulf of Mexico, adds, immediately to its portfolio, approximately 25,000 barrels of oil equivalent per day (BOEPD) production (~85% oil), “with an estimated reserves to production ratio of 8.8, growing 2018 pro forma production by 50% from approximately 45,000 to 70,000 BOEPD”, Kosmos says in a release. Kosmos says that the acquisition adds
estimated 2P reserves of approximately
80Million barrels of oil equivalent (MMBOE), increasing total 2P reserves by 40% from over 200 MMBOE to approximately 280 MMBOE.American explorer Kosmos Energy, has
completed acquisition of its first set of hydrocarbon producing properties
outside the African continent. Kosmos acquired DGE for total consideration of $1.225Billion, comprised of $925Million in cash and $300Million in Kosmos common shares issued to First Reserve, management, and other DGE shareholders. Kosmos intends to fund the cash portion of the purchase price with borrowings under its existing credit facilities. In connection with the transaction, Kosmos has received $200Million of additional firm commitments to increase its reserves-based loan facility capacity.
That, still, was an acquisition in Africa.
Kosmos, was until November 2017, only an oil
producer in Ghana, though an aggressive explorer elsewhere. In that month, however, it acquired the entire interest of Hess Corporation in the Ceiba field and the Okoume complex, offshore Rio Muni, in Equatorial Guinea.
The takeover of Deep Gulf Energy is made in the context of Kosmos' preference and deep understanding of hydrocarbon assets in the Atlantic margin, but this is an established producer outside of the African continent.
Small SOCO Beats Big SAPETRO In Bid For Egyptian Prize
Kosmos Gets Its First Producing Assets outside Africa
Petrel Is Banking on the Current Government in Ghana
THOSE WHO ARE SELLINGA round up of some of the rich pickings in the petroleum rights sector
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 27
F
AR
M
IN
F
AR
M
OU
T
quatorial Guinea will focus on ultra-Edeepwater in its next bidding round. It may be making the announcement at
the end of 2018. But the country may also open the planned
next licencing rounds to fields that are already producing. “Some of the contracts are expiring”, says Gabrial Obiang Lima, the Minister of Mines and Hydrocarbon. “We are deciding to give the first option to the
operator for a proposal. If we see they are not at the level we want, we will go through a tender process where many companies can participate in presenting proposals to do something better”.
Multiclient data surveys are cheaper and the products can be high graded in house.
B y p u r c h a s i n g We s t e r n G e c o f r o m Schlumberger, Shearwater will own and operate a fleet of 14 seismic vessels offering a full range of acquisition services including three dimensional (3D), four dimensional (4D) and ocean bottom seismic (OBS). The company will also have a portfolio of proprietary streamer technology and processing software enabling effective execution of geophysical surveys and delivery of high-quality data. The combined company will have approximately 600 employees and will operate in all major offshore basins across the world.
Schlumberger's decision to sell the marine seismic acquisition assets and operations of WesternGeco, its
geophysical services product line, reflects the lowturn of the exclusive seismic business.The company will focus on multi-client seismic surveys, which reduces the burden of having to maintain a fleet of marine survey vessels.
Schlumberger already has a huge library,
which enables it to offer post survey data processing after it conducts multi-client surveys, which is the growth area in the seismic market today.E & P c o m p a n i e s a r e becoming more reluctant in funding exclusive, large area seismic acquisition and are getting more interested in sharing exploration seismic data.
“Our customers are unwilling to pay a premium for our differentiated seismic measurement and surveys, and they clearly believe that generic technology and performance is sufficient”, Schlumberger's CEO, Paal Kibsgarard said in the company's 4Q 2017 report. “In general, this approach commoditises the seismic data acquisition
business and creates a very low technical barrier to entry for smaller players, who steadily add vessels and keep the market in a chronic state of overcapacity”. In the multiclient business, library data are sold to oil companies at a significantly lower cost than proprietary data from an exclusive seismic survey.
Eq Guinea Mulls Bid Round For Ultradeepwater
Schlumberger Sells Out of “Exclusive Seismic”, To Face Multiclient Business
Ophir Winds Down in Africa
Its Half Year 2018 report is a clear indication that the pie had diminished for it in the former.
Ophir Energy, the London listed minnow, is looking away from Africa, a continent that was once its core
focus, and looking forward to Asia. In the last 18 months Ophir had exited all of its PSCs in Cote d'Ivoire and Gabon, after eight dry holes in the course of five years. Although it won a new tract in Equatorial Guinea, it almost immediately sold 40% of it, becoming a non-operator. The proposed LNG project in Tanzania, of which the company holds 20%, is not gaining traction. As with the Fortuna, “our LNG options have potential value that is not today reflected in our share price despite a
rapidly improving LNG landscape. We will consider options to unlock this value and intend to ensure that our shareholders share appropriately in any value subsequently realised”. Outside of these depressing stories out of Africa, “the Board is rebalancing the company's portfolio towards a larger Asian production and cash flow base with the aim of building a stable, self-financing E&P company”. Ophir was born in Africa: created 14 years ago by Mvelaphanda Holdings, the diversified mining group founded by the South African politician Tokyo Sexwale. The company rapidly developed an extensive exploration portfolio covering projects in Equatorial Guinea, Gabon, Congo Brazzaville, the Nigeria-Sa˘o Tomé/Principe Joint Development Zone, South Africa, Tanzania, Somaliland, and Saharawi Arab Democratic Republic. As it expanded beyond Africa, Ophir dropped Congo, South Africa, the Nigeria-Sao Tomé/Principe Joint Development Zone, Somaliland and Saharawi Arab Democratic Republic. It grabbed stakes in Thailand, Myamar, Indonesia and Malaysia by acquiring Salamander Energy in 2015. Now it has two producing oil and gas assets in Thailand, and has commissioned a gas field development in Indonesia.
Ophir made a telling remark about the Fortuna FLNG project, located offshore Equatorial Guinea, in the highlights of that report . “Ref lect ing the uncertainty surrounding this however”, it noted, “we have impaired the value of the asset to
$300Mi l l ion”. T h i s i s d o u r o b s e r v a t i o n about a project which, until last March, was the company's most i m p o r t a n t h y d r o c a r b o n d e v e l o p m e n t programme. The company has struggled for close to four years, to raise money to get to project sanction a n d “ u n c e r t a i n t y
remains as to whether this can be realised before the licence expires”, by end of 2018.
Schlumberger's CEO, Paal Kibsgarard
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 826
F
AR
M
IN
F
AR
M
OU
T
SOCO International, the small, London Listed producer with less than 8,000BOEPD equity production to its credit, beat SAPETRO and other independents in the bid to acquire Merlon Petroleum
El Fayum Company.
SAPETRO had a similar “near miss” in Equatorial Guinea. Shortly after it agreed to end discussions with Dallas based Pan Atlantic, holder of the W Block, the Government revoked the asset from Pan Atlantic. Kosmos
Energy walked into Equatorial Guinea several months later and purchased the same asset from the government.
SAPETRO's failure to clinch the deal is the latest in a series of failed attempts to expand its footprint on the continent. After spending over $200Million in a fruitless experiment to revamp an oilfield in shallow offshore Benin Republic and hundreds of million of dollars feeling its way through underexplored tracts in the deepwater Mozambique Channel, SAPETRO has been in search of assets within and outside Nigeria to bolster its portfolio, which includes 15% equity in deepwater Oil Mining Lease (OML) 130, a hugely prospective acreage which hosts the large Akpo and Egina fields.
It won by offering approximately $215Million. Merlon is a privately owned oil and gas company with a 100% operated working interest in the onshore El Fayum concession in Egypt.
As recently as September 2017, SAPETRO ended negotiations with Hyperdynamics, holder of an acreage hosting the Fatala, reportedly a highly prospective location offshore Guinea, Northwest Africa. But soon after Hyperdynamics itself was forced to relinquish the block, executives from the French oil giant TOTAL, visited the country and signed agreements with the government, awarding TOTAL a large tract that includes the Fatala prospect.
Prior to these misses, SAPETRO invested heavily in Afren at a time the company was about to crash, although hardly anyone knew it then.
SAPETRO has set itself apart from other 1990s era beneficiaries of Nigerian local content acreage policy who have been content with rent. It had built technical competencies in its workforce and is roaring to take on the continent, but has been spectacularly unlucky.
“The ratification process was delayed by the Ghanaian General and Presidential Election at end 2016 (originally scheduled for November, but finally occurring in December 2016), with officials and parliamentarians reluctant to sign-off shortly before a democratic change of government”.
The subject contract is for the development of the Tano 2A Block, which sits in the country's most prospective hydrocarbon province. Petrel holds a 30% interest in the agreement (held through its interest in Pan Andean Resources Limited), Clontarf Energy, a sister
company holds 60% and local interests hold 10%.Petrel Resources is hopeful that an oil
exploration agreement it signed in 2010 will finally be ratified by the
incumbent executive cabinet in Ghana, “now that the party who first made the agreement with us” has returned.
The company is now far more confident than it ever was, about g e t t i n g a h e a d i n Ghana. “Now that the ratification process has been made a Ghanaian priority, we have applied for direct negotiations to finalize and implement our negotiated Petroleum Agreement on Tano 2A Block, with adjusted coordinates, in accordance with Section 10(9) of the Petroleum Exploration & Production Act 919, 2016”.
The company says that, with a new government in place since January 2017,
“there is now renwed energy to attempt to finalise a deal”. “It was an earlier NPP administration which
had signed the original Memorandum of Understanding and Heads of Agreement with our group shortly before the end 2008 Ghanaian General and Presidential Election”, Petrel says
“Since 2010, there has been a series of obstacles placed in the way of ratification”, the company laments in a recent update. “We believed a court settlement in 2014 would expedite the decision. It has not”.
Its acquisition of Deep Gulf Energy (DGE), a deepwater company operating in the Gulf of Mexico, adds, immediately to its portfolio, approximately 25,000 barrels of oil equivalent per day (BOEPD) production (~85% oil), “with an estimated reserves to production ratio of 8.8, growing 2018 pro forma production by 50% from approximately 45,000 to 70,000 BOEPD”, Kosmos says in a release. Kosmos says that the acquisition adds
estimated 2P reserves of approximately
80Million barrels of oil equivalent (MMBOE), increasing total 2P reserves by 40% from over 200 MMBOE to approximately 280 MMBOE.American explorer Kosmos Energy, has
completed acquisition of its first set of hydrocarbon producing properties
outside the African continent. Kosmos acquired DGE for total consideration of $1.225Billion, comprised of $925Million in cash and $300Million in Kosmos common shares issued to First Reserve, management, and other DGE shareholders. Kosmos intends to fund the cash portion of the purchase price with borrowings under its existing credit facilities. In connection with the transaction, Kosmos has received $200Million of additional firm commitments to increase its reserves-based loan facility capacity.
That, still, was an acquisition in Africa.
Kosmos, was until November 2017, only an oil
producer in Ghana, though an aggressive explorer elsewhere. In that month, however, it acquired the entire interest of Hess Corporation in the Ceiba field and the Okoume complex, offshore Rio Muni, in Equatorial Guinea.
The takeover of Deep Gulf Energy is made in the context of Kosmos' preference and deep understanding of hydrocarbon assets in the Atlantic margin, but this is an established producer outside of the African continent.
Small SOCO Beats Big SAPETRO In Bid For Egyptian Prize
Kosmos Gets Its First Producing Assets outside Africa
Petrel Is Banking on the Current Government in Ghana
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 29
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
Charlotte Matthews is a former Energy Editor of Financial Mail of South Africa. She wrote this piece specifically for Africa Oil+Gas Report
AT Kearney said in a recent paper: “Refining 2021: who will be in the game?” that “Asia Pacific is the region with the highest activity in terms of numbers of refineries opened and closed, even as small, polluting, and less efficient refineries are being closed and world-scale state-of-the-art facilities are
coming on line.“In this highly attractive market, international oil majors are becoming much more involved in joint ventures to build petrochemical plants, attracted by relatively high economic growth in many countries.”
Although originally mooted as a project partnership with Sinopec with the local Industrial Development Corporation as funding partner, Sinopec's defeat on the Chevron deal may alter these plans. Clearly Mthombo would need substantial foreign funding – it would cost at least $7bn, based on an estimated cost of $25,000 per barrel of
capacity.
Refineries are not big employers. The World Bank study cited Valero, the largest refiner in the US, which employed an average of only 510 workers at each 200,000bbl/day refinery.
Natref, which was commissioned in 1971, was last upgraded about twenty years ago. Apart from Natref and Sasol's Secunda plant, SA's other refineries are Chevron (100,000BOPD), Engen/Petronas (135,000BOPD), Sapref (owned by Shell/BP) (180,000BOPD) and the government owned PetroSA refinery at Mossel Bay, which converts gas to fuel (45,000BOPD).
Project Mthombo would ensure SA retains refining capacity. Each of SA's last three energy ministers has talked enthusiastically about it. They say it is needed to secure the country's energy supply and preserve refinery jobs.
Other oil multinationals might find it difficult to divest from SA because flat fuel sales render their petrol forecourts unattractive and the cost of refinery upgrades or closures presents a substantial capital commitment for the future.
Three years ago Petronas was reported to be trying to sell its 80% stake in Engen to PetroSA, another deal that fell through partly because of PetroSA's precarious financial position.
But there are many critics of Mthombo.
SA's weak growth rate and joblessness would benefit in the short term from a substantial infrastructure project funded by foreign investment. But a new refinery has long term consequences. It cannot be a purely political decision. The economic argument for it must be sound.
In August, the country's Competition Commission recommended the Glencore/Off The Shelf purchase of Chevron's assets, with
certain conditions including “commitment to a significant investment being made to deal with refinery capacity and related matters.”
While upgrades are deferred, it becomes increasingly likely the existing refineries will close in the next few years and SA will become reliant on refined fuel imports. It currently imports about a quarter of its petroleum products. Consumption of both petrol and diesel has exceeded supply for the past decade, according to the department of energy's “Overview of the Petrol and Diesel Market in SA 2007-2016”.
SA does not have the cost advantage of being a crude oil producer. It may have some offshore oil, but that is unproven. According to a March 2010 World Bank study, “Petroleum Markets in Sub-Saharan Africa”, for countries with no domestic oil, “it is not clear that importing and refining crude oil enhances supply security any more than importing refined products.”
In principle, the South African government could try to find foreign partners for Mthombo. But unfortunately the country does not offer the high economic growth rates that AT Kearney is referring to. Its second quarter GDP growth was a negative 0.7% and the highest growth rate it has achieved in the last eight years was 3.3% in 2011.
Government and the oil companies have remained tight-lipped on the shape of an agreement on the refinery upgrades. With SA's pump prices at record highs on the back of higher oil prices and a weak currency, and consumers recently having to swallow a 1%
hike in the VAT rate, government has little room to manoeuvre on adding more taxes to the fuel price.
The global trend, noted by EY in its 2018 Global Divestment study on oil and gas, is for oil multinationals to divest mature or late-stage assets. South Africa saw this last year when Chevron agreed to sell its Caltex-branded fuel stations and refinery to Sinopec. That sale foundered on the resistance of Chevron's local shareholders, who instead partnered with global commodities giant Glencore.
Middle Eastern and Asian Pacific countries, notably Saudi Arabia and India, have recently
built large, efficient refineries with plenty of export capacity, and plan to expand further. They could easily supply SA's needs.
SA's six privately-owned refineries have been largely in limbo for the last few years. Most are 50 years old or more and in need of substantial investment to enable them to meet the latest standards for petrol and diesel for new-model vehicles, or most will be closed in the next few years.In 2012 SA introduced new regulations, called Clean Fuels II, to enforce the Euro V standard for fuels by mid-2017. But the effective date has been postponed while government and oil companies are at odds over how the refineries will be able to recover the costs (in a regulated fuel price environment) for making the necessary upgrades.
The project may be controversial because arguments for a new refinery are not conclusive, and SA has a poor record in bringing mega projects on stream on time and on budget.
In the interim, the refined product needed for the latest model vehicles is being imported.In August, Bloomberg reported Sasol, which owns a plant at Secunda making about 150,000 barrels a day of fuel from coal and gas, and a 63.64% stake in the Natref refinery with a capacity of 108,000 bbl/day in partnership with Total, was considering selling its Natref stake, amongst other options. CEO Bongani Nqwababa said Sasol had “found a relatively affordable way forward” on clean fuels for Secunda but Natref “is a more difficult case”.
South Africa's energy minister, Jeff Radebe, is expected to announce later this year a development plan for Project
Mthombo, a new 300,000 barrels a day (bbl/day) refinery, which would inject new life into SA's refinery sector.
South Africa's Oil Refining Landscape: Opportunities Anywhere?By Charlotte Mathews
While upgrades are deferred, it becomes increasingly likely the existing refineries will close in the next few years and SA will become reliant on refined fuel imports.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 828
EQ/GUINEA: SEPTEMBER/OCTOBER 2018 ACTIVITY UPDATE
Kosmos is working on well optimization in the Ceiba field and the Okume complex. The experiment is working; production has increased marginally. The plan is to follow up with waterflood optimisation, from the later part of the third quarter 2018, through to late 2019. The company will install Electrical Submersible Pump from later 2018, but only for a limited time.
Ceiba and Okume Will Soon Be Flooded
Plans for A Natural Gas Megahub at Punto EuropaGovernment plans to construct a natural gas megahub project, consisting of interlinked production, aggregation and processing facilities offshore and onshore, tieing to existing facilities. Noble Energy will supply gas from Aseng and Alen fields in Block I/O to the Punta Europa gas complex, which includes the Malabo power station, AMPCO methanol plant and Equatorial Guinea LNG plant. The molecules will replace some of the gas production lost as the Alba field declines.
XOM Has Zafiro Until Later Than 2023Government has approved plans for the Zafiro field expansion. ExxonMobil's operating licence is likely to be approved beyond its renewal date in 2023.
Alen and Aseng Produced 148,000 BOEPD in 2017Noble Energy's fourth quarter 2017 report indicates 148,000BOEPD (gross) for both Aseng and Alen Fields. Crude Oil accounts for 44,000BOPD of this figure, which means that production has reduced, slightly, from 2016 to 2017.
Block R Licence Close to Expiry
The Block R licence (which contains the Fortuna gas discovery) is due to expire at the end of 2018. Ophir Energy is in active discussions to secure a partner but the financing and timing of FID has not been resolved.
The three dimensional (3D) survey being carried out by Kosmos Energy is part of “the proof of success of the Equatorial Guinea Bid Round 2016”, according to Gabriel Obiang Lima, Minister of Mines and Hydrocarbon believes. Block EG-24 was awarded to Ophir Energy in the aftermath of the round in late 2017. The company then farmed out 40% of the Block to Kosmos Energy. The minister describes the project as “one of the biggest seismic processing surveys in the Rio Muni area”, adding that the project “ is very positive because it guarantees that there is going to be a lot of drilling activity in the Rio Muni Basin in 2019.”
A Surge of Drilling Activity Expected in Rio Muni
Kosmos is acquiring three dimensional (3D) seismic data over Blocks W, S and E-21.
3D Seismic Activity Commences Over Blocks W, S and E-21.
The acquired data are expected to have been completely processed by end of 1H 2019, after which a drilling campaign will commence, around 2020.
Three key events will take place: the Equatorial Guinea Gas Summit(4-5 October 2018) the African Petroleum Producers' Organization Cape VII meeting (18-22 March 2019), and the 5th GECF Gas Summit (date to be announced). “With the Year of Energy we want to make a big impact in bringing together global leaders in Malabo to promote cooperation and encourage new investments,” said Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima. “This is our moment as a nation to show the caliber of our oil and gas projects, and to bring the industry to Malabo to celebrate the achievements of oil and gas producers all over the continent.”
Government Announces 2018/2019 Year of Energy Initiative, The Ministry of Mines and Hydrocarbons is working in partnership with Africa Oil & Power to organize the series of conferences in 2019 and has announced the year as the year of Energy Initiative. .
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 29
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
Charlotte Matthews is a former Energy Editor of Financial Mail of South Africa. She wrote this piece specifically for Africa Oil+Gas Report
AT Kearney said in a recent paper: “Refining 2021: who will be in the game?” that “Asia Pacific is the region with the highest activity in terms of numbers of refineries opened and closed, even as small, polluting, and less efficient refineries are being closed and world-scale state-of-the-art facilities are
coming on line.“In this highly attractive market, international oil majors are becoming much more involved in joint ventures to build petrochemical plants, attracted by relatively high economic growth in many countries.”
Although originally mooted as a project partnership with Sinopec with the local Industrial Development Corporation as funding partner, Sinopec's defeat on the Chevron deal may alter these plans. Clearly Mthombo would need substantial foreign funding – it would cost at least $7bn, based on an estimated cost of $25,000 per barrel of
capacity.
Refineries are not big employers. The World Bank study cited Valero, the largest refiner in the US, which employed an average of only 510 workers at each 200,000bbl/day refinery.
Natref, which was commissioned in 1971, was last upgraded about twenty years ago. Apart from Natref and Sasol's Secunda plant, SA's other refineries are Chevron (100,000BOPD), Engen/Petronas (135,000BOPD), Sapref (owned by Shell/BP) (180,000BOPD) and the government owned PetroSA refinery at Mossel Bay, which converts gas to fuel (45,000BOPD).
Project Mthombo would ensure SA retains refining capacity. Each of SA's last three energy ministers has talked enthusiastically about it. They say it is needed to secure the country's energy supply and preserve refinery jobs.
Other oil multinationals might find it difficult to divest from SA because flat fuel sales render their petrol forecourts unattractive and the cost of refinery upgrades or closures presents a substantial capital commitment for the future.
Three years ago Petronas was reported to be trying to sell its 80% stake in Engen to PetroSA, another deal that fell through partly because of PetroSA's precarious financial position.
But there are many critics of Mthombo.
SA's weak growth rate and joblessness would benefit in the short term from a substantial infrastructure project funded by foreign investment. But a new refinery has long term consequences. It cannot be a purely political decision. The economic argument for it must be sound.
In August, the country's Competition Commission recommended the Glencore/Off The Shelf purchase of Chevron's assets, with
certain conditions including “commitment to a significant investment being made to deal with refinery capacity and related matters.”
While upgrades are deferred, it becomes increasingly likely the existing refineries will close in the next few years and SA will become reliant on refined fuel imports. It currently imports about a quarter of its petroleum products. Consumption of both petrol and diesel has exceeded supply for the past decade, according to the department of energy's “Overview of the Petrol and Diesel Market in SA 2007-2016”.
SA does not have the cost advantage of being a crude oil producer. It may have some offshore oil, but that is unproven. According to a March 2010 World Bank study, “Petroleum Markets in Sub-Saharan Africa”, for countries with no domestic oil, “it is not clear that importing and refining crude oil enhances supply security any more than importing refined products.”
In principle, the South African government could try to find foreign partners for Mthombo. But unfortunately the country does not offer the high economic growth rates that AT Kearney is referring to. Its second quarter GDP growth was a negative 0.7% and the highest growth rate it has achieved in the last eight years was 3.3% in 2011.
Government and the oil companies have remained tight-lipped on the shape of an agreement on the refinery upgrades. With SA's pump prices at record highs on the back of higher oil prices and a weak currency, and consumers recently having to swallow a 1%
hike in the VAT rate, government has little room to manoeuvre on adding more taxes to the fuel price.
The global trend, noted by EY in its 2018 Global Divestment study on oil and gas, is for oil multinationals to divest mature or late-stage assets. South Africa saw this last year when Chevron agreed to sell its Caltex-branded fuel stations and refinery to Sinopec. That sale foundered on the resistance of Chevron's local shareholders, who instead partnered with global commodities giant Glencore.
Middle Eastern and Asian Pacific countries, notably Saudi Arabia and India, have recently
built large, efficient refineries with plenty of export capacity, and plan to expand further. They could easily supply SA's needs.
SA's six privately-owned refineries have been largely in limbo for the last few years. Most are 50 years old or more and in need of substantial investment to enable them to meet the latest standards for petrol and diesel for new-model vehicles, or most will be closed in the next few years.In 2012 SA introduced new regulations, called Clean Fuels II, to enforce the Euro V standard for fuels by mid-2017. But the effective date has been postponed while government and oil companies are at odds over how the refineries will be able to recover the costs (in a regulated fuel price environment) for making the necessary upgrades.
The project may be controversial because arguments for a new refinery are not conclusive, and SA has a poor record in bringing mega projects on stream on time and on budget.
In the interim, the refined product needed for the latest model vehicles is being imported.In August, Bloomberg reported Sasol, which owns a plant at Secunda making about 150,000 barrels a day of fuel from coal and gas, and a 63.64% stake in the Natref refinery with a capacity of 108,000 bbl/day in partnership with Total, was considering selling its Natref stake, amongst other options. CEO Bongani Nqwababa said Sasol had “found a relatively affordable way forward” on clean fuels for Secunda but Natref “is a more difficult case”.
South Africa's energy minister, Jeff Radebe, is expected to announce later this year a development plan for Project
Mthombo, a new 300,000 barrels a day (bbl/day) refinery, which would inject new life into SA's refinery sector.
South Africa's Oil Refining Landscape: Opportunities Anywhere?By Charlotte Mathews
While upgrades are deferred, it becomes increasingly likely the existing refineries will close in the next few years and SA will become reliant on refined fuel imports.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 828
EQ/GUINEA: SEPTEMBER/OCTOBER 2018 ACTIVITY UPDATE
Kosmos is working on well optimization in the Ceiba field and the Okume complex. The experiment is working; production has increased marginally. The plan is to follow up with waterflood optimisation, from the later part of the third quarter 2018, through to late 2019. The company will install Electrical Submersible Pump from later 2018, but only for a limited time.
Ceiba and Okume Will Soon Be Flooded
Plans for A Natural Gas Megahub at Punto EuropaGovernment plans to construct a natural gas megahub project, consisting of interlinked production, aggregation and processing facilities offshore and onshore, tieing to existing facilities. Noble Energy will supply gas from Aseng and Alen fields in Block I/O to the Punta Europa gas complex, which includes the Malabo power station, AMPCO methanol plant and Equatorial Guinea LNG plant. The molecules will replace some of the gas production lost as the Alba field declines.
XOM Has Zafiro Until Later Than 2023Government has approved plans for the Zafiro field expansion. ExxonMobil's operating licence is likely to be approved beyond its renewal date in 2023.
Alen and Aseng Produced 148,000 BOEPD in 2017Noble Energy's fourth quarter 2017 report indicates 148,000BOEPD (gross) for both Aseng and Alen Fields. Crude Oil accounts for 44,000BOPD of this figure, which means that production has reduced, slightly, from 2016 to 2017.
Block R Licence Close to Expiry
The Block R licence (which contains the Fortuna gas discovery) is due to expire at the end of 2018. Ophir Energy is in active discussions to secure a partner but the financing and timing of FID has not been resolved.
The three dimensional (3D) survey being carried out by Kosmos Energy is part of “the proof of success of the Equatorial Guinea Bid Round 2016”, according to Gabriel Obiang Lima, Minister of Mines and Hydrocarbon believes. Block EG-24 was awarded to Ophir Energy in the aftermath of the round in late 2017. The company then farmed out 40% of the Block to Kosmos Energy. The minister describes the project as “one of the biggest seismic processing surveys in the Rio Muni area”, adding that the project “ is very positive because it guarantees that there is going to be a lot of drilling activity in the Rio Muni Basin in 2019.”
A Surge of Drilling Activity Expected in Rio Muni
Kosmos is acquiring three dimensional (3D) seismic data over Blocks W, S and E-21.
3D Seismic Activity Commences Over Blocks W, S and E-21.
The acquired data are expected to have been completely processed by end of 1H 2019, after which a drilling campaign will commence, around 2020.
Three key events will take place: the Equatorial Guinea Gas Summit(4-5 October 2018) the African Petroleum Producers' Organization Cape VII meeting (18-22 March 2019), and the 5th GECF Gas Summit (date to be announced). “With the Year of Energy we want to make a big impact in bringing together global leaders in Malabo to promote cooperation and encourage new investments,” said Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima. “This is our moment as a nation to show the caliber of our oil and gas projects, and to bring the industry to Malabo to celebrate the achievements of oil and gas producers all over the continent.”
Government Announces 2018/2019 Year of Energy Initiative, The Ministry of Mines and Hydrocarbons is working in partnership with Africa Oil & Power to organize the series of conferences in 2019 and has announced the year as the year of Energy Initiative. .
RESTRICTION IN TERMS OF SECTION 49(1) OF THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, 2002 (ACT NO. 28 OF 2002) (“THE ACT”) ON THE GRANTING OF NEW APPLICATIONS FOR TECHNICAL CO-OPERATION PERMIT, EXPLORATION RIGHT AND PRODUCTION RIGHT IN TERMS OF SECTIONS 76, 79 AND 83 OF THE ACT
I, Samson Gwede Mantashe, Minister of Mineral Resources, having regard to the national interest and the need to promote the sustainable development of the nation's petroleum resources, hereby impose a restriction under section 49(1) of the Act on the granting of applications for technical co-operation permit, exploration right and production right in terms of sections 76, 79, and 83 of the Act from the date of this Notice until I publish a Notice of Invitation for applications. The designated areas for restriction are depicted on the plan attached as Annexure I.
This restriction shall not affect the processing of applications for reconnaissance permits, technical co-operation permits, exploration and production rights received before the date of publication.
SOUTH AFRICAN AGENCY FOR PROMOTION OF PETROLEUM EXPLORATION ANDEXPLOITATION (SOC) LTD (PETROLEUM AGENCY SA)
MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, 2002(ACT NO. 28 OF 2002)
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 31
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
he recent publication of South Africa's Tupdated Integrated Resource Plan (IRP) charting the country's energy mix to
2030 and beyond should unlock the logjam around its gas to power programme.
The updated IRP recommends a detailed analysis of local and international gas supply options to understand the technical and financial risks for an energy mix after 2030 that would be dominated by renewables and gas. Under the recommended plan, gas/diesel would contribute 15.7% of the total by 2030.
Although the SA government decided in principle three years ago to increase the country's natural gas consumption, which is still very small, by launching a liquefied natural gas (LNG) to power programme at three identified coastal sites (Richards Bay, Coega and Saldanha Bay), progress has stalled amidst a policy vacuum. Government's Independent Power Procurement (IPP) office released a preliminary memorandum two years ago but deferred releasing the request for qualification, originally scheduled for the third quarter of 2017, until the updated IRP had been released.
They said GUMP should provide guidance on the framework for investment in gas infrastructure; the role of gas in the South African market; the regulatory
Hulisani chairman Pat Mdoda said in the group's latest annual report that the government's recent signing of 27 renewable energy contracts with independent producers would provide “much greater policy certainty a n d q u a nt i f i e s e n e rg y i nve st m e nt opportunities”.
environment, government commitments and economic prediction; and demand, supply, market structure, industry organisation, environmental risks, financing and social impacts.
Hulisani, which has stakes in RustMo1 CPV Solar Farm, Kouga Wind Farm, GRI Wind Towers and the Avon and Dedisa OCGT peaking power plants, as well as in land leases, said in its latest annual report it is targeting long term total returns of CPI + 6-8%. Its returns are based on long-term contracts between Eskom and the IPPs, which are inflation linked with a sovereign guarantee, with predictable cash flows. There are also gains to be made through optimisation and capital appreciation.
However, the plan notes real risks in using gas to support renewables, since SA does not have its own gas resources. It would expose SA's electricity price to currency fluctuations and potentially affect the balance of payments.
The department of energy did not respond to
a request for information on the status of GUMP.
SA's renewable energy sector is relatively mature by comparison with its gas sector. The commitment in the IRP 2018 to roll out more
wind and solar energy in the coming years could encourage project developers to seek ways to release capital from completed or nearly-completed projects to invest in new developments.
By providing a policy outline on the rollout of renewable energy, it should also stimulate the growth of more renewable energy investment companies such as Hulisani, which listed on the JSE in 2016.
Energy minister Jeff Radebe said in April that drafted amendments to the Gas Act of 2001 would support gas to power IPP procurement. He said after the IRP update was released, government aimed to conclude the Integrated Energy Plan and other sectoral plans, including one for gas (the Gas Utilisation Master Plan or GUMP), by the end of March 2019.
Analysts Frost & Sullivan said recently the reasons for the delay in issuing GUMP were the complexity of the landscape and the diverse nature of stakeholders. “The needs of these very different participants in the sector must be considered and addressed by the policy, and getting their input and feedback takes time,” they said.
A second renewable energy investment fund, London-listed Foresight Solar Fund, which had announced plans in 2017 to take a secondary listing on the JSE, postponed the event because of market volatility in SA. It said at the time it would continue to assess SA.
More Clarity About SA's Energy MixBy Charlotte Mathews
To date, 48 exploration, one production, and two Coal Bed Methane licenses have been issued to Namibian and international oil and gas companies. Two dimensional (2D) seismic coverage offshore Namibia stands at approximately 147 000 line kilometres; more than 40 423 km² of 3D seismic data has been acquired by respective license operators.
TOTAL partners Impact Oil and Gas in Petroleum Exploration Licence (PEL) 56, which covers two acreages in the North East of the Namibian concession map; ExxonMobil holds equity in PEL 82 with GALP Energia. Shell is the only major operating in Namibia without a partner.
Namibia shows up in the prospecting highlights far more frequently than South Africa, Botswana, Zambia or Zimbabwe. But the two recent dusters, drilled back to back offshore this beautiful Southwest African country, remind us that the 1.3Tcf Kudu gas field is a spectacular exception.
10 exploratory wells have been drilled onshore, accord ing to government documents.
Tullow operated Cormorant -1 and Chariot's Prospect S, drilled between September 1 and October 12, 2018, top up the number of wells drilled offshore Namibia to 34, comprising 15 exploratory wells and seven appraisal wells (Kudu gas field/license area) and 10 wells drilled for scientific research.
The Namibian government has always touted
the presence of the majors: Shell, TOTAL and most recently ExxonMobil, as proof of the country's hydrocarbon prospectivity, but companies do not always take positions in a country because they are so sure of the resources: Shell has been here for about five years, with two acreages abutting the Namibia/South Africa boundary, and has not come close to firming up a drilling location.
What's most instructive about the lack lustre results of those recent probes is that they were the first to be drilled in the country after
the widely publicised encounter of significant oil potential by HRT's Wingat-1 well, drilled in 2013, which supposedly demonstrated that there is a working petroleum system. That well didn't encounter a commercial sized hydrocarbon pool, but many astute geoscientists have spoken or written about its significance as having pointed a blinding torchlight on the source rock system.
Outside of Mozambique, the Southern Africa region is a rank exploration f r o n t i e r w i t h l i t t l e p r o v e n
hydrocarbon.
Namibia Remains A WildcardBy Toyin Akinosho
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 830
RESTRICTION IN TERMS OF SECTION 49(1) OF THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, 2002 (ACT NO. 28 OF 2002) (“THE ACT”) ON THE GRANTING OF NEW APPLICATIONS FOR TECHNICAL CO-OPERATION PERMIT, EXPLORATION RIGHT AND PRODUCTION RIGHT IN TERMS OF SECTIONS 76, 79 AND 83 OF THE ACT
I, Samson Gwede Mantashe, Minister of Mineral Resources, having regard to the national interest and the need to promote the sustainable development of the nation's petroleum resources, hereby impose a restriction under section 49(1) of the Act on the granting of applications for technical co-operation permit, exploration right and production right in terms of sections 76, 79, and 83 of the Act from the date of this Notice until I publish a Notice of Invitation for applications. The designated areas for restriction are depicted on the plan attached as Annexure I.
This restriction shall not affect the processing of applications for reconnaissance permits, technical co-operation permits, exploration and production rights received before the date of publication.
SOUTH AFRICAN AGENCY FOR PROMOTION OF PETROLEUM EXPLORATION ANDEXPLOITATION (SOC) LTD (PETROLEUM AGENCY SA)
MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, 2002(ACT NO. 28 OF 2002)
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 31
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
SO
UT
HE
RN
AF
RIC
A A
NN
UA
L
he recent publication of South Africa's Tupdated Integrated Resource Plan (IRP) charting the country's energy mix to
2030 and beyond should unlock the logjam around its gas to power programme.
The updated IRP recommends a detailed analysis of local and international gas supply options to understand the technical and financial risks for an energy mix after 2030 that would be dominated by renewables and gas. Under the recommended plan, gas/diesel would contribute 15.7% of the total by 2030.
Although the SA government decided in principle three years ago to increase the country's natural gas consumption, which is still very small, by launching a liquefied natural gas (LNG) to power programme at three identified coastal sites (Richards Bay, Coega and Saldanha Bay), progress has stalled amidst a policy vacuum. Government's Independent Power Procurement (IPP) office released a preliminary memorandum two years ago but deferred releasing the request for qualification, originally scheduled for the third quarter of 2017, until the updated IRP had been released.
They said GUMP should provide guidance on the framework for investment in gas infrastructure; the role of gas in the South African market; the regulatory
Hulisani chairman Pat Mdoda said in the group's latest annual report that the government's recent signing of 27 renewable energy contracts with independent producers would provide “much greater policy certainty a n d q u a nt i f i e s e n e rg y i nve st m e nt opportunities”.
environment, government commitments and economic prediction; and demand, supply, market structure, industry organisation, environmental risks, financing and social impacts.
Hulisani, which has stakes in RustMo1 CPV Solar Farm, Kouga Wind Farm, GRI Wind Towers and the Avon and Dedisa OCGT peaking power plants, as well as in land leases, said in its latest annual report it is targeting long term total returns of CPI + 6-8%. Its returns are based on long-term contracts between Eskom and the IPPs, which are inflation linked with a sovereign guarantee, with predictable cash flows. There are also gains to be made through optimisation and capital appreciation.
However, the plan notes real risks in using gas to support renewables, since SA does not have its own gas resources. It would expose SA's electricity price to currency fluctuations and potentially affect the balance of payments.
The department of energy did not respond to
a request for information on the status of GUMP.
SA's renewable energy sector is relatively mature by comparison with its gas sector. The commitment in the IRP 2018 to roll out more
wind and solar energy in the coming years could encourage project developers to seek ways to release capital from completed or nearly-completed projects to invest in new developments.
By providing a policy outline on the rollout of renewable energy, it should also stimulate the growth of more renewable energy investment companies such as Hulisani, which listed on the JSE in 2016.
Energy minister Jeff Radebe said in April that drafted amendments to the Gas Act of 2001 would support gas to power IPP procurement. He said after the IRP update was released, government aimed to conclude the Integrated Energy Plan and other sectoral plans, including one for gas (the Gas Utilisation Master Plan or GUMP), by the end of March 2019.
Analysts Frost & Sullivan said recently the reasons for the delay in issuing GUMP were the complexity of the landscape and the diverse nature of stakeholders. “The needs of these very different participants in the sector must be considered and addressed by the policy, and getting their input and feedback takes time,” they said.
A second renewable energy investment fund, London-listed Foresight Solar Fund, which had announced plans in 2017 to take a secondary listing on the JSE, postponed the event because of market volatility in SA. It said at the time it would continue to assess SA.
More Clarity About SA's Energy MixBy Charlotte Mathews
To date, 48 exploration, one production, and two Coal Bed Methane licenses have been issued to Namibian and international oil and gas companies. Two dimensional (2D) seismic coverage offshore Namibia stands at approximately 147 000 line kilometres; more than 40 423 km² of 3D seismic data has been acquired by respective license operators.
TOTAL partners Impact Oil and Gas in Petroleum Exploration Licence (PEL) 56, which covers two acreages in the North East of the Namibian concession map; ExxonMobil holds equity in PEL 82 with GALP Energia. Shell is the only major operating in Namibia without a partner.
Namibia shows up in the prospecting highlights far more frequently than South Africa, Botswana, Zambia or Zimbabwe. But the two recent dusters, drilled back to back offshore this beautiful Southwest African country, remind us that the 1.3Tcf Kudu gas field is a spectacular exception.
10 exploratory wells have been drilled onshore, accord ing to government documents.
Tullow operated Cormorant -1 and Chariot's Prospect S, drilled between September 1 and October 12, 2018, top up the number of wells drilled offshore Namibia to 34, comprising 15 exploratory wells and seven appraisal wells (Kudu gas field/license area) and 10 wells drilled for scientific research.
The Namibian government has always touted
the presence of the majors: Shell, TOTAL and most recently ExxonMobil, as proof of the country's hydrocarbon prospectivity, but companies do not always take positions in a country because they are so sure of the resources: Shell has been here for about five years, with two acreages abutting the Namibia/South Africa boundary, and has not come close to firming up a drilling location.
What's most instructive about the lack lustre results of those recent probes is that they were the first to be drilled in the country after
the widely publicised encounter of significant oil potential by HRT's Wingat-1 well, drilled in 2013, which supposedly demonstrated that there is a working petroleum system. That well didn't encounter a commercial sized hydrocarbon pool, but many astute geoscientists have spoken or written about its significance as having pointed a blinding torchlight on the source rock system.
Outside of Mozambique, the Southern Africa region is a rank exploration f r o n t i e r w i t h l i t t l e p r o v e n
hydrocarbon.
Namibia Remains A WildcardBy Toyin Akinosho
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 830
Attah has campaigned widely and frequently in public forums about the value that Train 7 brings. Much of the talk is to keep the government attentive to the project because, ultimately the decision is the state's, which owns 49% through NNPC, to push through to financial sanction. He is comfortable that the Final Investment Decision is closer at hand than it has ever been, though 2018 is running to the end. “It represents about 35% capacity growth for NLNG”, he says. “That is huge. But what would it take to add 35% capacity growth and what would it take for that to be competitive? What would it take to have the people who will run that additional capacity and the entire new scope of 30 Million tonnes capacity to be ready?
AOGR: Once you do that would it not be project finance?
and relax because the pace with which it might evolve, you might just be left behind. Our trains 1, 2, 3, those contracts will come to term by 2022/2023 and those are contracts that we signed over twenty years ago but suddenly, at the point of renewal, of course my preference would be that we should renew over the next twenty years but the market is saying no we don't want long term any more, we want shorter term, even spot, more flexibility and more control. The balance between the buyer's world and the seller's world is oscillating depending on what is in play. But for a long time, it was the seller's world”.
“In order not to allow anything stop us, we have come up with a frame work to work with the government to look at possibilities that would include perhaps, a forward sale payment and go into agreement with government to just be sure that the supply is properly financed. And I think we are not far off. We recently signed an MOU with NNPC on funding but overall, the project itself will have to be financed and my side of it is never the issue because that will rise on my balance sheet.
“So, if I go out to look for funds, they are all going to be interested in knowing how I would de-risk supply and that is normally question number one. What is your exposure to supply? Today, I essentially have three major suppliers: Shell, TOTAL and ENI but the conversation around financing in the upstream which I have referenced publicly, is recognizing that the joint venture upstream, is an unincorporated venture which includes the government. NNPC is on the average about 57% of the average JV upstream and I know because I have
come from the upstream side of the industry, is that funding is an issue. But most times, it is really around the equity funding of the NNPC element because the IOCs are responding.
Attah: Yes it would because you have to put something on the table. On the back of the strength of my balance sheet, I can be financed
“Train 7 is really about the full value chain. We are not directly involved in the upstream supply side, but to build the facility, we have to have assurances on the supply which is what the financial world will ask us.
NLNG Needs 5.5Bscf/d By 2022Another 2bcf/d and that is why I said I can do with two more Gbarans today. But what I think we are going to get is going to be a aggregation of supplies from many of the suppliers and one conversation that we were not open to in the past was third party suppliers. When I say third party suppliers, I mean non-shareholders suppliers because today I have shareholders suppliers. Quite a few people have taken me on in the public domain and say what is the point?
MI
DS
TR
EA
M
/R
EF
IN
IN
G
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 33
Tony Attah, MD, NLNG: My vision is that we cannot stop until we get to Train 10
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 832
MI
DS
TR
EA
M
/R
EF
IN
IN
G
Or that he would be excited if you indicated that he was the leading man in line for the position of the Managing Director of Shell Petroleum Development Company, the most influential of all the local subsidiaries of the five majors operating in Nigeria.
“We have delivered on the dreams and the visions of our
founding fathers who believed in the possibilities of this project and we give them a lot of credit for what they have done”, Attah says in a long chat in his office in Abuja, the Nigerian capital city, “but what credit would the people who show up here to run this place in 2050 give us? Would we have earned that credit? What do we really need to do? What is possible in the next 30 years?
The Chief Executive dives into the familiar talk about Nigeria losing its market share with the shale revolution in the United States, and the surge in LNG output in Australia and Qatar, lamenting the country's slip from third to fourth place (without yet counting the US incursion), the 22Million Tonnes per annum (22MMTPA) nameplate capacity notwithstanding.
th2019 is also the 20 year the NLNG has been exporting natural gas and the initial contracts are nearing their end.
“Conventional market is that you go into a relationship and you are contracted for 25 years. It is like a marriage. We deal, we manage and we carry on. In a lot of places, it expires and you renew it. But suddenly we are realizing that the market is saying no, hold on, we need a bit more agility in this space. We don't want to be locked into a twenty-year agreement anymore; can we do five? Or just wait a minute, can we do an agreement that I can just call you when I need you which is really about the commoditization of the product. So LNG market trading is not as mature yet, it is not as liquid as you might expect and when you want it to be traded like somebody offers you an oil tanker today and you take it to the trading floor and it is sold, no, that is not the case with LNG, it is evolving. “It is not a revolutionary change but it is evolving. You cannot sit back
You would think that if you asked Attah what was uppermost on his mind when he took over in 2016, he would go straight to details of the Train 7, the proposed Eight Million Tonnes Per Annum (8MMTPA) plant, conceived as a game changer, but which has stayed on the drawing board for over ten years.
“As a plant, maybe we will stay completive because our capacity is big but the ranking doesn't recognize plants but countries. That is why we sort of said no and asked the question: why did we stop in 2007? Between 1999 and 2007, we were the fastest growing LNG Company in the world. We were commissioning a new train every 18 months and that was how we got from train 1 to train 6 before there was a sharp stop. Then we said we should go back and review the growth agenda that underpins the future that we talked about previously in the next 30 years”.
Instead, what comes across is that the former CEO of Shell-SNEPCO, operator of the Bonga field, the country's flagship deepwater asset, is
focused on preserving the legacy at NLNG and laying a foundation for the next 30 years.
“What is not within our control is what will define our current reality. And that is the energy transition. There is a change in energy mix which is a given because the world is looking for more energy and the world wants it cleaner. By the year 2050, two more Chinas would have been added to the world and global population would go from 7Billion people to 9Billion people. Where would the energy come from? Would we still be relevant then and would the world want this kind of energy?We wanted to know how the market was evolving, considering the growing spot cargo segment in the LNG
business, which leads to talk of commoditization. Is the LNG landscape becoming a buyer's market?
Still, the operator of the largest industrial facility in West Africa is keen on retaining its relevance in the market by growing its output capacity.
Tony Attah took the top job at the Nigerian Liquefied Natural Gas NLNG Ltd at a time of great flux. The company turns 30 next year amid significant evolution of the LNG market, with the
shale gas emergence turning one of the world's dominant importers to a large volume exporter, the traditional long term contract model slowly turning on its head and the rapid pace of energy transition weakening the dominance of fossil fuels in the energy mix.
COVER: INTERVIEW
Since the time I took over this position, (July 2016), last week (September 2018) was the very first time when we had a perfect week. 100% of everything. Zero incident, 100% gas supply, 100% NLG production and so on. I have seen this only once in the last one and half year. But that is not what I want. I never get a perfect week because most time gas supply is not 100%. That is part of the issue. We will continue to aspire to be gas sufficient and that is why when we see gas supply, we are happy to look at it.
The last thing I want is to be gas insufficient
The LNG Landscape Is Not Yet a Buyers' Market
I 'm Not Interested in Gas Pricing
Attah has campaigned widely and frequently in public forums about the value that Train 7 brings. Much of the talk is to keep the government attentive to the project because, ultimately the decision is the state's, which owns 49% through NNPC, to push through to financial sanction. He is comfortable that the Final Investment Decision is closer at hand than it has ever been, though 2018 is running to the end. “It represents about 35% capacity growth for NLNG”, he says. “That is huge. But what would it take to add 35% capacity growth and what would it take for that to be competitive? What would it take to have the people who will run that additional capacity and the entire new scope of 30 Million tonnes capacity to be ready?
AOGR: Once you do that would it not be project finance?
and relax because the pace with which it might evolve, you might just be left behind. Our trains 1, 2, 3, those contracts will come to term by 2022/2023 and those are contracts that we signed over twenty years ago but suddenly, at the point of renewal, of course my preference would be that we should renew over the next twenty years but the market is saying no we don't want long term any more, we want shorter term, even spot, more flexibility and more control. The balance between the buyer's world and the seller's world is oscillating depending on what is in play. But for a long time, it was the seller's world”.
“In order not to allow anything stop us, we have come up with a frame work to work with the government to look at possibilities that would include perhaps, a forward sale payment and go into agreement with government to just be sure that the supply is properly financed. And I think we are not far off. We recently signed an MOU with NNPC on funding but overall, the project itself will have to be financed and my side of it is never the issue because that will rise on my balance sheet.
“So, if I go out to look for funds, they are all going to be interested in knowing how I would de-risk supply and that is normally question number one. What is your exposure to supply? Today, I essentially have three major suppliers: Shell, TOTAL and ENI but the conversation around financing in the upstream which I have referenced publicly, is recognizing that the joint venture upstream, is an unincorporated venture which includes the government. NNPC is on the average about 57% of the average JV upstream and I know because I have
come from the upstream side of the industry, is that funding is an issue. But most times, it is really around the equity funding of the NNPC element because the IOCs are responding.
Attah: Yes it would because you have to put something on the table. On the back of the strength of my balance sheet, I can be financed
“Train 7 is really about the full value chain. We are not directly involved in the upstream supply side, but to build the facility, we have to have assurances on the supply which is what the financial world will ask us.
NLNG Needs 5.5Bscf/d By 2022Another 2bcf/d and that is why I said I can do with two more Gbarans today. But what I think we are going to get is going to be a aggregation of supplies from many of the suppliers and one conversation that we were not open to in the past was third party suppliers. When I say third party suppliers, I mean non-shareholders suppliers because today I have shareholders suppliers. Quite a few people have taken me on in the public domain and say what is the point?
MI
DS
TR
EA
M
/R
EF
IN
IN
G
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 33
Tony Attah, MD, NLNG: My vision is that we cannot stop until we get to Train 10
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 832
MI
DS
TR
EA
M
/R
EF
IN
IN
G
Or that he would be excited if you indicated that he was the leading man in line for the position of the Managing Director of Shell Petroleum Development Company, the most influential of all the local subsidiaries of the five majors operating in Nigeria.
“We have delivered on the dreams and the visions of our
founding fathers who believed in the possibilities of this project and we give them a lot of credit for what they have done”, Attah says in a long chat in his office in Abuja, the Nigerian capital city, “but what credit would the people who show up here to run this place in 2050 give us? Would we have earned that credit? What do we really need to do? What is possible in the next 30 years?
The Chief Executive dives into the familiar talk about Nigeria losing its market share with the shale revolution in the United States, and the surge in LNG output in Australia and Qatar, lamenting the country's slip from third to fourth place (without yet counting the US incursion), the 22Million Tonnes per annum (22MMTPA) nameplate capacity notwithstanding.
th2019 is also the 20 year the NLNG has been exporting natural gas and the initial contracts are nearing their end.
“Conventional market is that you go into a relationship and you are contracted for 25 years. It is like a marriage. We deal, we manage and we carry on. In a lot of places, it expires and you renew it. But suddenly we are realizing that the market is saying no, hold on, we need a bit more agility in this space. We don't want to be locked into a twenty-year agreement anymore; can we do five? Or just wait a minute, can we do an agreement that I can just call you when I need you which is really about the commoditization of the product. So LNG market trading is not as mature yet, it is not as liquid as you might expect and when you want it to be traded like somebody offers you an oil tanker today and you take it to the trading floor and it is sold, no, that is not the case with LNG, it is evolving. “It is not a revolutionary change but it is evolving. You cannot sit back
You would think that if you asked Attah what was uppermost on his mind when he took over in 2016, he would go straight to details of the Train 7, the proposed Eight Million Tonnes Per Annum (8MMTPA) plant, conceived as a game changer, but which has stayed on the drawing board for over ten years.
“As a plant, maybe we will stay completive because our capacity is big but the ranking doesn't recognize plants but countries. That is why we sort of said no and asked the question: why did we stop in 2007? Between 1999 and 2007, we were the fastest growing LNG Company in the world. We were commissioning a new train every 18 months and that was how we got from train 1 to train 6 before there was a sharp stop. Then we said we should go back and review the growth agenda that underpins the future that we talked about previously in the next 30 years”.
Instead, what comes across is that the former CEO of Shell-SNEPCO, operator of the Bonga field, the country's flagship deepwater asset, is
focused on preserving the legacy at NLNG and laying a foundation for the next 30 years.
“What is not within our control is what will define our current reality. And that is the energy transition. There is a change in energy mix which is a given because the world is looking for more energy and the world wants it cleaner. By the year 2050, two more Chinas would have been added to the world and global population would go from 7Billion people to 9Billion people. Where would the energy come from? Would we still be relevant then and would the world want this kind of energy?We wanted to know how the market was evolving, considering the growing spot cargo segment in the LNG
business, which leads to talk of commoditization. Is the LNG landscape becoming a buyer's market?
Still, the operator of the largest industrial facility in West Africa is keen on retaining its relevance in the market by growing its output capacity.
Tony Attah took the top job at the Nigerian Liquefied Natural Gas NLNG Ltd at a time of great flux. The company turns 30 next year amid significant evolution of the LNG market, with the
shale gas emergence turning one of the world's dominant importers to a large volume exporter, the traditional long term contract model slowly turning on its head and the rapid pace of energy transition weakening the dominance of fossil fuels in the energy mix.
COVER: INTERVIEW
Since the time I took over this position, (July 2016), last week (September 2018) was the very first time when we had a perfect week. 100% of everything. Zero incident, 100% gas supply, 100% NLG production and so on. I have seen this only once in the last one and half year. But that is not what I want. I never get a perfect week because most time gas supply is not 100%. That is part of the issue. We will continue to aspire to be gas sufficient and that is why when we see gas supply, we are happy to look at it.
The last thing I want is to be gas insufficient
The LNG Landscape Is Not Yet a Buyers' Market
I 'm Not Interested in Gas Pricing
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 35
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 834
because that gives assurance and guarantees the market that their money will be paid back. We have also proven that we are credible and if you look at it this way, we recently financed six new vessels and that is more than $1.5Billion and almost $2Billion that we went to market with. Today, we are paying back and we have just paid off all our loans from the previous projects from trains 1 to 6 and we paid off without defaulting even once.
“The Gbaran field for me today is my biggest source and it delivers almost 40% of my supply. On a daily basis, I need about 3.5Billion cubic feet of gas so when I say in those conferences that we are the WallMart of gas, because if you produce it we will take it, that is actually not a joke. Gbaran was actually built on the back of trains 4,5 and 6 but irrespective of that, you are going to have decline in the reservoirs and even for Trains 1 to 6 today, I have projects that we are talking about to help keep trains 1 to 6 fully and then guarantee supply for train 7 over the life span. I will like to see two more Gbarans, which is 2Bscf/d because assurance is paramount. The last thing I want is to be gas insufficient which we have experienced quite a bit this year. Gbaran was down for some 30 days on the back of pipeline issues they had and that really put us in a tough situation in terms of delivering the plan but we are recovering. Again, working the efficiencies and reliabilities of our own assets.“But what I think we are going to get is going to be an aggregation of supplies from many of the suppliers and one conversation that we were not open to in the past was third party suppliers. When I say third party suppliers, I mean non-shareholders suppliers because today I have shareholders suppliers.AOGR: When someone is offering you just a 100MMscf/s do you really need that?
At this point it is natural to ask Attah how the company manages supply of natural gas. What are the constraints?
Attah: Yes I will take it because we really need the volume. I can't tell you how many times I look at my COO dashboard and I see all green in terms of supply. I have more times when I see gas insufficient on the board than when I am stable. For example, two weeks ago, since the time I took over this position, was the very first time when we had a perfect week. 100% of everything. Zero incident, 100% gas supply, 100% NLG production and so on. I have seen this only once in the last one and a half year. But that is not what I want. I never get a perfect week because most time gas supply is not 100%. That is part of the issue. We are will continue to aspire to be gas sufficient and that is why when we see gas supply, we are happy to look at it.THREE YEARS AGO, NLNG Ltd was selling to its European and Asian buyers at around $7 per thousand cubic feet, which was considered historically low, as Asia used to command prices as high as $13-$14. About 30% of the price that NLNG earns is paid to the gas suppliers, who, in NLNG's case, are also its owners: Shell, TOTAL, ENI and NNPC. Although the low prices could then, in 2015, be attributed to the headlong crash in crude oil prices, but while crude is on the recovery now; natural gas prices haven't closed up the gap. “I would be excited about the price now compared to 2 years ago when the price was
down”, Attah responds, giving no specifics of what exact prices currently are. He talks of “multiple pricing mechanisms in the world today, the most of which is the indexation to Brent, but we also have others that are tied to hubs”. The market, he explains, is getting to a point where the players are refusing to be benchmarked to any hub, preferring willing seller-willing buyer deals.
“And I think that was where a few of the initiatives that we are running around energy efficiency and asset integrity in the company and looking for higher reliability. For instance, we are working on a mandate which we call Top Quarter by 2019 and within TQ 2019 is realigning how we think and how we do business.
“I don't think we have any index to Henry Hub but we have a few index to other hubs. There are a few hubs around like the TTF, National Balance Point and so on but I think for me, the simplicity is just
recognizing that the market will be the market. That is why I am not quick to discuss price. My mindset and my mental model is that the market will be the market and there is nothing I can do about the market. So my energy is around, what can I influence and what I can influence how can I keep my company compet i t ive at whatever price.�
Interview was conducted by Toyin Akinosho and Kish Onwunali. Transcription was by Akpelu Paul Kelechi.
Of course, you will work our scenarios but in the end for me, it is finding where I can preserve the most value and keeping the company competitive because the market won't be on me alone as everybody would be impacted.
“We are actually on a transformation journey which is realigning to win. Within realigning t o w i n , i n t e r m s o f e s t a b l i s h i n g competitiveness in so as to stay alive as a business, is setting what we call 9717, 9818
and the target is to deliver 97% reliability in 2017 and 98% reliability in 2018 and you can almost predict what will be our ambition for 2019. So it has really been about taking charge of what is within our control and staying competitive. That is how we plan to continue to stay in business and not to worry too much about what the price of the market would be. The market as I said earlier, will be the market but you have to be competitive at whatever price level.
COVER: INTERVIEW
MI
DS
TR
EA
M
/R
EF
IN
IN
G
“Of a fact, 35% of my contracted capacity was destination US. So you
cannot kid yourself and say this has evolved because it revolutionized everything
because suddenly, they don't want it anymore. I am now needing to find
new markets.
The US Has Disrupted the Market
Technician on bicycle, a common means of transport in the plant-Gaibo-NLNG
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 35
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 834
because that gives assurance and guarantees the market that their money will be paid back. We have also proven that we are credible and if you look at it this way, we recently financed six new vessels and that is more than $1.5Billion and almost $2Billion that we went to market with. Today, we are paying back and we have just paid off all our loans from the previous projects from trains 1 to 6 and we paid off without defaulting even once.
“The Gbaran field for me today is my biggest source and it delivers almost 40% of my supply. On a daily basis, I need about 3.5Billion cubic feet of gas so when I say in those conferences that we are the WallMart of gas, because if you produce it we will take it, that is actually not a joke. Gbaran was actually built on the back of trains 4,5 and 6 but irrespective of that, you are going to have decline in the reservoirs and even for Trains 1 to 6 today, I have projects that we are talking about to help keep trains 1 to 6 fully and then guarantee supply for train 7 over the life span. I will like to see two more Gbarans, which is 2Bscf/d because assurance is paramount. The last thing I want is to be gas insufficient which we have experienced quite a bit this year. Gbaran was down for some 30 days on the back of pipeline issues they had and that really put us in a tough situation in terms of delivering the plan but we are recovering. Again, working the efficiencies and reliabilities of our own assets.“But what I think we are going to get is going to be an aggregation of supplies from many of the suppliers and one conversation that we were not open to in the past was third party suppliers. When I say third party suppliers, I mean non-shareholders suppliers because today I have shareholders suppliers.AOGR: When someone is offering you just a 100MMscf/s do you really need that?
At this point it is natural to ask Attah how the company manages supply of natural gas. What are the constraints?
Attah: Yes I will take it because we really need the volume. I can't tell you how many times I look at my COO dashboard and I see all green in terms of supply. I have more times when I see gas insufficient on the board than when I am stable. For example, two weeks ago, since the time I took over this position, was the very first time when we had a perfect week. 100% of everything. Zero incident, 100% gas supply, 100% NLG production and so on. I have seen this only once in the last one and a half year. But that is not what I want. I never get a perfect week because most time gas supply is not 100%. That is part of the issue. We are will continue to aspire to be gas sufficient and that is why when we see gas supply, we are happy to look at it.THREE YEARS AGO, NLNG Ltd was selling to its European and Asian buyers at around $7 per thousand cubic feet, which was considered historically low, as Asia used to command prices as high as $13-$14. About 30% of the price that NLNG earns is paid to the gas suppliers, who, in NLNG's case, are also its owners: Shell, TOTAL, ENI and NNPC. Although the low prices could then, in 2015, be attributed to the headlong crash in crude oil prices, but while crude is on the recovery now; natural gas prices haven't closed up the gap. “I would be excited about the price now compared to 2 years ago when the price was
down”, Attah responds, giving no specifics of what exact prices currently are. He talks of “multiple pricing mechanisms in the world today, the most of which is the indexation to Brent, but we also have others that are tied to hubs”. The market, he explains, is getting to a point where the players are refusing to be benchmarked to any hub, preferring willing seller-willing buyer deals.
“And I think that was where a few of the initiatives that we are running around energy efficiency and asset integrity in the company and looking for higher reliability. For instance, we are working on a mandate which we call Top Quarter by 2019 and within TQ 2019 is realigning how we think and how we do business.
“I don't think we have any index to Henry Hub but we have a few index to other hubs. There are a few hubs around like the TTF, National Balance Point and so on but I think for me, the simplicity is just
recognizing that the market will be the market. That is why I am not quick to discuss price. My mindset and my mental model is that the market will be the market and there is nothing I can do about the market. So my energy is around, what can I influence and what I can influence how can I keep my company compet i t ive at whatever price.�
Interview was conducted by Toyin Akinosho and Kish Onwunali. Transcription was by Akpelu Paul Kelechi.
Of course, you will work our scenarios but in the end for me, it is finding where I can preserve the most value and keeping the company competitive because the market won't be on me alone as everybody would be impacted.
“We are actually on a transformation journey which is realigning to win. Within realigning t o w i n , i n t e r m s o f e s t a b l i s h i n g competitiveness in so as to stay alive as a business, is setting what we call 9717, 9818
and the target is to deliver 97% reliability in 2017 and 98% reliability in 2018 and you can almost predict what will be our ambition for 2019. So it has really been about taking charge of what is within our control and staying competitive. That is how we plan to continue to stay in business and not to worry too much about what the price of the market would be. The market as I said earlier, will be the market but you have to be competitive at whatever price level.
COVER: INTERVIEW
MI
DS
TR
EA
M
/R
EF
IN
IN
G
“Of a fact, 35% of my contracted capacity was destination US. So you
cannot kid yourself and say this has evolved because it revolutionized everything
because suddenly, they don't want it anymore. I am now needing to find
new markets.
The US Has Disrupted the Market
Technician on bicycle, a common means of transport in the plant-Gaibo-NLNG
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 37
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 836
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 37
In A
sso
cia
tio
n w
ith
Vo
l 19
, N
o 8
, O
cto
be
r 2
01
8
repo
rtw
ww
.afric
aoilg
asre
port.
com
©Co
pyri
ght 2
018
AFR
ICA
OIL
+GA
S RE
PORT
Nig
eri
an E
&P
Ve
sse
l Co
un
t A
ugu
st 2
01
8
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 836
“The gas mega-hub is the newer terminal and it will prolong the life of the LNG and methanol sectors, and may be able to develop other industries. It is more than a horizontal diversification; it allows us to have a
longer period of production, rather than slipping and having to stop because of a lack of resources”.
“The only project we are kicking off and moving forward with is the gas mega-hub. This is the project to be able to use Bioko Island, and especially Punta Europa, as a processing area for other stranded gas, not only for the Alba plant.“We did a lot of adjustment on projects we
wanted to do”.Equatorial Guinea is putting a brake on development of a large oil terminal and Petrochemicals Plant in order to
facilitate a natural gas hub.“We used to have REPEGE [Petrochemicals Revolution of Equatorial Guinea], the Bioko Oil Terminal and even the refinery projects”, Gabriel Obiang Lima, Minister of Mines and Hydrocarbons, told The Oil and Gas Year (TOGY). “Because 2016 and 2017 were difficult years, we either paused or cancelled some of the projects
The first phase of gas mega-hub entails the backfilling of gas from blocks O and I, operated by Noble Energy, all the way to Punta Europa. “For phase two, there will p r o b a b l y b e o t h e r resources available. From there, we will go down the cha in”, the min ister explains.
GA
S M
ON
ET
IS
AT
IO
N
Eq. Guinea Steps down Oil Terminal for a Mega Gas Hub
Ophir Energy has stepped back from talking up its Fortuna LNG in Equatorial Guinea.
The Block R licence, which hosts the gas accumulations that form the basis of the project, is due to expire at the end of 2018. As the company is yet unable to secure financing for the 2.2MMTPA Floating LNG, the host government has threatened to revoke the licence if there was no clarity on FID for the
project by the end of the year. “There are deadlines and if the company cannot meet them, then the ministry will take over the resources”, Gabriel ObIang Lima, Equatorial G u i n e a ' s M i n i s t e r o f M i n e s a n d Hydrocarbons, has repeatedly declared. “We are confident that Ophir is working very hard and that it understands the deadlines. The company has already given us confidence that it should be able to have an FID [final investment decision] before the end of 2018. If that does not happen, I do not have a
problem. Either way, the state wins”.
The company mentioned the project in a brief two-liner in the highlights of its second quarter 2018 report, and it wasn't very positive.
This is the least encouraging statement Ophir has made on a project it described, just a year ago, its top priority.
And then there is one more declaration by the government that should be of interest to any investor paying attention to this tiny Island off the south Atlantic. If the government sees that a company, holding a producing asset at the end of its licence, has not matured the property “to the level we want, we will go through a tender process where many companies can participate in presenting proposals to do something better”, Minister Obiang Lima says.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence”, Ophir says in the second sentence in its report. “Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300Million.”
“This level of production was achieved thanks to the start-up of the fifth production unit (T4), backed by the eight gas producers and a new 30” x 218 km sealine, commissioned August 2018 and confirms the programme
pursued by ENI, its partner, Egyptian Natural Gas Holding Company (EGAS) and their joint venture company Petrobel aimed to reach a plateau in excess of 2.7Bscf/d in 2019”.
gypt's Zohr field, discovered by ENI in E2015, is now producing 2Billion standard cubic feet per day (2Bscf/d),
“equivalent to approximately 365,000 BOEPD, according to the Italian explorer. “This outstanding result has been achieved only a few months after the first gas in December 2017 and one year before the schedule of the Plan of Development (PoD)”, the company gushes, in a release.
ENI boasts even moe: “ The latest achievement reinforces the exceptional development path of the Zohr project, one of ENI's seven record-breaking projects, which is playing a fundamental role in supporting Egypt's independence from LNG imports”.
The project is executed by Petrobel, the Operating Company jointly held by ENI and the state corporation Egyptian General Petroleum Corporation (EGPC), on behalf of Petroshorouk, jointly held by Contractor (EN and its partners) and the state company Egyptian Natural Gas holding Company (EGAS).
The Zohr field, the largest gas discovery ever made in Egypt and in the Mediterranean Sea with more than 30 Tcf of gas in place, is located within the offshore Shorouk Block (some 190 km north of Port Said). In the Shorouk Block,
ENI holds a 50% stake, Rosneft 30%, BP 10% and Mubadala Petroleum 10% of the Contractor's Share (where Eni, Rosneft, BP and Mubadala Petroleum are collectivity the Contractor).
Fortuna: If Ophir Loses, the State Will Still Gain
Zohr Field Now Producing 2Billion Cubic Feet A Day
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 39A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 838
MA
RI
TI
ME
IS
SU
ES
The Egina FPSO has since arrived on the field on August 29, but the case of the collision is in arbitration in Lagos where, officials of Samsung Heavy Industries, operators of the FPSO, reported the incident at the Nigerian Maritime Administration and Safety Agency.
he Nigerian owners of two petroleum Tproduct vessels are compiling estimates of damages after the Egina Floating
Production Storage and Offloading (FPSO} Vessel rammed into them at the Lagos Harbour.
MT Jazi and MT Zion, were docked at the harbour, waiting for cargoes of product supplies,
when the collision happened. The impact threw off a crew member from MT Zion into the water, but he swam into safety. Divers in the Egina FPSO quickly moved to restore the tow lines and guide the ship back to course.
The FPSO was beginning its journey from Lagos to the Egina oilfield offshore Akwa Ibom, in the country's south east, on August 26, 2018, when its tow lines parted.
Egina Rams into MT Jazi and Zion on Its Way OutBy Sully Manope
Built in 2008, the Dynamically Positioned (DP2) vessel measures 70metres in length, summer draft of 6.1metres, deadweight of 2114.74metric tonne, gross tonnage of 2 , 7 0 5 m e t r i c t o n n e , l i g h t s h i p o f 2,539.51metric tonne, with applicable fire-fighting capability for both offshore and portside fires. The deck space measures 462square metres. It has a 52-bunk capacity, 14 crew members inclusive”. This tug has two
Operation stations OS1 and OS2 equipped with three individual 680 kilowatt thrusters, two at the Bow, the third at the Stern. The thrusters allow the DP2 vessel to operate and switch stations without changing positions. A 2.2 metric tonne telescopic boom crane sits mid-ship the vessel. The vessel comes equipped with Electronic Fuel Monitoring System.” He further stated safety, integrity, innovation and performance as the bedrock of the NigeStar7 brand which aims to compete internationally.
NigerStar7 ADABA is described by Yann Cottart, CEO of NigerStar7, as “an Anchor Handling Tug and Supply vessel that is wholly-owned and flagged as a Nigerian ocean-going vessel entirely manned by a Nigerian crew of
14 persons”. This tripartite quality, Mr. Cottart, explains, ”makes it a first in the Nigerian offshore service industry”. Cottart claims that the vessel is “the most powerful anchor handling tug operating in Nigeria presently with a bollard pull of 140 tons. It can tow rigs and large-capacity supply vessels, retrieving and deploying anchor in deep offshore environment.” Mr, Cottart a l l o w s t h a t t h e t u g b o a t i s
“permanently imported and equity-financed through international lending of $10Million in direct investment into the country. Ancillary services will add further $10Million in the next five years
For a vessel that has been operational a decade in, won't its servitude time in Nigeria ebb quicker? “Not so!”, states Maher Jarmakani, Group CEO of the Jagal Group, one-half of the joint venture partnership- NigerStar7. “It's not uncommon for vessels this kind to run a 25-year lifespan and still be useful”. With two jobs at hand, first-off the Erha Field onwards to Qua Iboe Terminal, both ExxonMobil facilities, the NigerStar7 ADABA has started off her Nigerian service life running. Port/Yard dockings during off-peak periods will largely be determined by economical factors of costs and benefits.
The NigerStar7 ADABA, a recently acquired vessel by NigerStar7, was unveiled at a renaming ceremony held
at the NigerDock facility, its first port of call on ththe 20 of September 2018. NigerStar7 is a
Nigerian joint venture company formed by the Jagal Group and SubSea7, an offshore pipeline-laying and subsea infrastructure deployment organisation that had previously operated, exited and re-entered the Nigerian oil service industry.
Three In One Quality Marks Out NigerStar 7ADABABy Foluso Ogunsan
AD
VE
RT
OR
IA
L
“The gas mega-hub is the newer terminal and it will prolong the life of the LNG and methanol sectors, and may be able to develop other industries. It is more than a horizontal diversification; it allows us to have a
longer period of production, rather than slipping and having to stop because of a lack of resources”.
“The only project we are kicking off and moving forward with is the gas mega-hub. This is the project to be able to use Bioko Island, and especially Punta Europa, as a processing area for other stranded gas, not only for the Alba plant.“We did a lot of adjustment on projects we
wanted to do”.Equatorial Guinea is putting a brake on development of a large oil terminal and Petrochemicals Plant in order to
facilitate a natural gas hub.“We used to have REPEGE [Petrochemicals Revolution of Equatorial Guinea], the Bioko Oil Terminal and even the refinery projects”, Gabriel Obiang Lima, Minister of Mines and Hydrocarbons, told The Oil and Gas Year (TOGY). “Because 2016 and 2017 were difficult years, we either paused or cancelled some of the projects
The first phase of gas mega-hub entails the backfilling of gas from blocks O and I, operated by Noble Energy, all the way to Punta Europa. “For phase two, there will p r o b a b l y b e o t h e r resources available. From there, we will go down the cha in”, the min ister explains.
GA
S M
ON
ET
IS
AT
IO
N
Eq. Guinea Steps down Oil Terminal for a Mega Gas Hub
Ophir Energy has stepped back from talking up its Fortuna LNG in Equatorial Guinea.
The Block R licence, which hosts the gas accumulations that form the basis of the project, is due to expire at the end of 2018. As the company is yet unable to secure financing for the 2.2MMTPA Floating LNG, the host government has threatened to revoke the licence if there was no clarity on FID for the
project by the end of the year. “There are deadlines and if the company cannot meet them, then the ministry will take over the resources”, Gabriel ObIang Lima, Equatorial G u i n e a ' s M i n i s t e r o f M i n e s a n d Hydrocarbons, has repeatedly declared. “We are confident that Ophir is working very hard and that it understands the deadlines. The company has already given us confidence that it should be able to have an FID [final investment decision] before the end of 2018. If that does not happen, I do not have a
problem. Either way, the state wins”.
The company mentioned the project in a brief two-liner in the highlights of its second quarter 2018 report, and it wasn't very positive.
This is the least encouraging statement Ophir has made on a project it described, just a year ago, its top priority.
And then there is one more declaration by the government that should be of interest to any investor paying attention to this tiny Island off the south Atlantic. If the government sees that a company, holding a producing asset at the end of its licence, has not matured the property “to the level we want, we will go through a tender process where many companies can participate in presenting proposals to do something better”, Minister Obiang Lima says.
“On Fortuna, we are continuing to work to deliver value for our shareholders whilst we are in possession of the licence”, Ophir says in the second sentence in its report. “Reflecting the uncertainty surrounding this however, we have impaired the value of the asset to $300Million.”
“This level of production was achieved thanks to the start-up of the fifth production unit (T4), backed by the eight gas producers and a new 30” x 218 km sealine, commissioned August 2018 and confirms the programme
pursued by ENI, its partner, Egyptian Natural Gas Holding Company (EGAS) and their joint venture company Petrobel aimed to reach a plateau in excess of 2.7Bscf/d in 2019”.
gypt's Zohr field, discovered by ENI in E2015, is now producing 2Billion standard cubic feet per day (2Bscf/d),
“equivalent to approximately 365,000 BOEPD, according to the Italian explorer. “This outstanding result has been achieved only a few months after the first gas in December 2017 and one year before the schedule of the Plan of Development (PoD)”, the company gushes, in a release.
ENI boasts even moe: “ The latest achievement reinforces the exceptional development path of the Zohr project, one of ENI's seven record-breaking projects, which is playing a fundamental role in supporting Egypt's independence from LNG imports”.
The project is executed by Petrobel, the Operating Company jointly held by ENI and the state corporation Egyptian General Petroleum Corporation (EGPC), on behalf of Petroshorouk, jointly held by Contractor (EN and its partners) and the state company Egyptian Natural Gas holding Company (EGAS).
The Zohr field, the largest gas discovery ever made in Egypt and in the Mediterranean Sea with more than 30 Tcf of gas in place, is located within the offshore Shorouk Block (some 190 km north of Port Said). In the Shorouk Block,
ENI holds a 50% stake, Rosneft 30%, BP 10% and Mubadala Petroleum 10% of the Contractor's Share (where Eni, Rosneft, BP and Mubadala Petroleum are collectivity the Contractor).
Fortuna: If Ophir Loses, the State Will Still Gain
Zohr Field Now Producing 2Billion Cubic Feet A Day
AFRICA OIL + GAS REPORT O C TO B E R 2 0 1 8 39A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 838
MA
RI
TI
ME
IS
SU
ES
The Egina FPSO has since arrived on the field on August 29, but the case of the collision is in arbitration in Lagos where, officials of Samsung Heavy Industries, operators of the FPSO, reported the incident at the Nigerian Maritime Administration and Safety Agency.
he Nigerian owners of two petroleum Tproduct vessels are compiling estimates of damages after the Egina Floating
Production Storage and Offloading (FPSO} Vessel rammed into them at the Lagos Harbour.
MT Jazi and MT Zion, were docked at the harbour, waiting for cargoes of product supplies,
when the collision happened. The impact threw off a crew member from MT Zion into the water, but he swam into safety. Divers in the Egina FPSO quickly moved to restore the tow lines and guide the ship back to course.
The FPSO was beginning its journey from Lagos to the Egina oilfield offshore Akwa Ibom, in the country's south east, on August 26, 2018, when its tow lines parted.
Egina Rams into MT Jazi and Zion on Its Way OutBy Sully Manope
Built in 2008, the Dynamically Positioned (DP2) vessel measures 70metres in length, summer draft of 6.1metres, deadweight of 2114.74metric tonne, gross tonnage of 2 , 7 0 5 m e t r i c t o n n e , l i g h t s h i p o f 2,539.51metric tonne, with applicable fire-fighting capability for both offshore and portside fires. The deck space measures 462square metres. It has a 52-bunk capacity, 14 crew members inclusive”. This tug has two
Operation stations OS1 and OS2 equipped with three individual 680 kilowatt thrusters, two at the Bow, the third at the Stern. The thrusters allow the DP2 vessel to operate and switch stations without changing positions. A 2.2 metric tonne telescopic boom crane sits mid-ship the vessel. The vessel comes equipped with Electronic Fuel Monitoring System.” He further stated safety, integrity, innovation and performance as the bedrock of the NigeStar7 brand which aims to compete internationally.
NigerStar7 ADABA is described by Yann Cottart, CEO of NigerStar7, as “an Anchor Handling Tug and Supply vessel that is wholly-owned and flagged as a Nigerian ocean-going vessel entirely manned by a Nigerian crew of
14 persons”. This tripartite quality, Mr. Cottart, explains, ”makes it a first in the Nigerian offshore service industry”. Cottart claims that the vessel is “the most powerful anchor handling tug operating in Nigeria presently with a bollard pull of 140 tons. It can tow rigs and large-capacity supply vessels, retrieving and deploying anchor in deep offshore environment.” Mr, Cottart a l l o w s t h a t t h e t u g b o a t i s
“permanently imported and equity-financed through international lending of $10Million in direct investment into the country. Ancillary services will add further $10Million in the next five years
For a vessel that has been operational a decade in, won't its servitude time in Nigeria ebb quicker? “Not so!”, states Maher Jarmakani, Group CEO of the Jagal Group, one-half of the joint venture partnership- NigerStar7. “It's not uncommon for vessels this kind to run a 25-year lifespan and still be useful”. With two jobs at hand, first-off the Erha Field onwards to Qua Iboe Terminal, both ExxonMobil facilities, the NigerStar7 ADABA has started off her Nigerian service life running. Port/Yard dockings during off-peak periods will largely be determined by economical factors of costs and benefits.
The NigerStar7 ADABA, a recently acquired vessel by NigerStar7, was unveiled at a renaming ceremony held
at the NigerDock facility, its first port of call on ththe 20 of September 2018. NigerStar7 is a
Nigerian joint venture company formed by the Jagal Group and SubSea7, an offshore pipeline-laying and subsea infrastructure deployment organisation that had previously operated, exited and re-entered the Nigerian oil service industry.
Three In One Quality Marks Out NigerStar 7ADABABy Foluso Ogunsan
AD
VE
RT
OR
IA
L
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 41A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 840
GA
S M
ON
ET
IS
AT
IO
N
Lot A involves the EPC of 64.15km x 48” Class 600 gas pipeline and Custody Transfer Metering Station at Obiafu/Obrikom in Rivers State. Lot B involves the EPC of 47.13km x 48” & 18km x 36” Intermediate Pigging Station and Gas Treatment Plant at Oben, Edo State.
But whereas Lot A (OILSERV) is mechanically finished, Lot B (NESTOIL) is stagnant. There are contractor issues with Lot B and the project is stalemated.
The OB3 is the most crucial gas transmission pipeline under construction in Africa's largest economy. It will ferry gas from the huge reservoirs in Rivers State, in eastern Nigeria, to
the industrial markets in the West.Seplat Petroleum will be unable to take Final Investment Decision on its part of the Assa North-Ohaji South (ANOH)
project before the first quarter of 2019, as delays persist on the construction of the grid length pipeline to evacuate the gas.
For ANOH gas to go ahead, there needs to be clarity on how NNPC, the state hydrocarbon company that owns the project on behalf of the government, plans to resolve the dispute
with NESTOIL. But NNPC spokespersons have not responded to questions from Africa Oil+Gas Report on the issue.
Contractual project completion date for both stLots is 31 July, 2018.
A key condition precedent for financial close of the $1.3Billion, 600MMscf/d domestic gas supply project is the completion of the Oben to Obiafu/Obiakom-Oben (OB3) pipeline, a large diameter (48”/36”) facility running 130 kilometres long from Oben in Nigeria's Midwest to Obiafu/Obrikom in the east. The two fields involved, Shell operated Assa North in Oil Mining Lease (OML) 21 and Seplat operated Ohaji South in OML 53, are straddling pools, with combined 2P reserves estimated at 4.5Tcf.
The OB3 construction was not always the only obstacle in the path of Seplat's taking FID on ANOH. In the last one year, the London Listed Nigerian independent, has severally announced shift in in FID dates for the (ANOH) project, mainly because of the involvement of the state gas company: Nigerian Gas Processing and Transportation Company NGPTC, which has now taken 35% equity in the ANOH project, and created, with Seplat, an incorporated joint venture midstream company. But now that the IJV process has been finalised, the OB3 stands in the way.
The EPC contract was awarded by the Nigerian cabinet of Ministers (Federal Executive Council) in the third quarter of 2012, to Messrs Nestoil Limited (Lot A) and Oilserv Limited (Lot B).
The pipeline, being constructed by the Nigerian government, will have the capacity to pump 2Billion standard cubic feet of gas a day.
OB3 Delay Will Stall Final Investment Decision For ANOH By Prospect Mojido
Lot B (NESTOIL) is stagnant. There are contractor issues with Lot B and the project is stalemated.
Wentworth Resources has reported improved delivery in payment for natural gas sold to Tanzanian
Petroleum Development Company 9TPDC) and Tanzanian Electricity Supply Company TANESCO.
The Company also reports that gross production volumes during September 2018 from the Mnazi Bay concession averaged 83.2 MMscfd. The September reduction in production volumes (August average of 87.9 MMscfd) was due to previously planned slick-line activities on the wells and TPDC hot-tapping operations for the Lodhia Steel works offtake.In an October 3, 2018 update, Wentworth
reported that payments received for September 2018 gas sales generated from the totalled $3.24Mllion net to Wentworth. “Payments were received from both TPDC and TANESCO for one month's gas sales to TPDC and one month's gas sales to TANESCO.
The company is a partner in the Mnazi Bay Concession Joint Venture, the largest gas producing entity for Tanzania's domestic gas market.
“Given the consistency of payments received to date in 2018, the Company no longer intends to release monthly updates to the market”, Wentworth explains. “Such information will be included in regular
Corporate and Operational activity RNS updates”.
The Nigerian Petroleum Development Company (NPDC) is weighing options on how to develop the gas in Utapate
South field in the Oil Mining Lease (OML) 13, onshore Akwa Ibom state. One proposition on the table is to pump the wet gas to the Uquo
Gas processing plant and evacuate the resulting dry gas through the Uquo-Ibom Power pipeline infrastructure, to customers in Eastern Nigeria. Another option is to sell the entire gas molecules insitu to Sterling Exploration, the aggressive Indian company
who has hinted of plans to build a processing plant right on the field. “These options are so preliminary at this stage we haven't gotten to talking about tariffs”, NPDC insiders say.
French major TOTAL has announced first gas from the Timimoun field in southwestern Algeria.
The production complex with a capacity of around 177Million cubic feet of natural gas per day at plateau (around 30,000 barrels of oil equivalent per day (BOEPD)), is jointly operated by Sonatrach (51%), TOTAL (37.75%) and Cepsa (11.25%).
Timimoun's gas will be produced with 37 wells connected to a gas processing facility that ties into the GR5 pipeline used to transport gas from fields in southwestern Algeria to Hassi R'mel.
In 2017, the company's production in Algeria averaged 15,000 BOEPD, all of it from the Tin
Fouyé Tabankort (TFT) gas and condensate field, located 300 kilometres west of the Libyan border. The Group holds a 35% in interest in TFT. Through the Maersk Oil acquisition, which closed on March 8, 2018, TOTAL now holds a 12.25% interest in the El-Merk, Hassi Berkine and Ourhoud oil fields, with a combined production capacity of 400,000 BOEPD.
TOTAL has been increasing its foothold in Algeria exploration and production activities of late, even though it had been in the country's upstream since 1952.
It is the company's second field in the North African country.
NPDC Hasn't Yet Agreed To Pump Utapate Gas Through Uquo Infrastructure-
TOTAL Delivers First Gas from Algeria's Timimoun Field
Tanzanian State Companies Now Pay Promptly For Gas
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 41A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 840
GA
S M
ON
ET
IS
AT
IO
N
Lot A involves the EPC of 64.15km x 48” Class 600 gas pipeline and Custody Transfer Metering Station at Obiafu/Obrikom in Rivers State. Lot B involves the EPC of 47.13km x 48” & 18km x 36” Intermediate Pigging Station and Gas Treatment Plant at Oben, Edo State.
But whereas Lot A (OILSERV) is mechanically finished, Lot B (NESTOIL) is stagnant. There are contractor issues with Lot B and the project is stalemated.
The OB3 is the most crucial gas transmission pipeline under construction in Africa's largest economy. It will ferry gas from the huge reservoirs in Rivers State, in eastern Nigeria, to
the industrial markets in the West.Seplat Petroleum will be unable to take Final Investment Decision on its part of the Assa North-Ohaji South (ANOH)
project before the first quarter of 2019, as delays persist on the construction of the grid length pipeline to evacuate the gas.
For ANOH gas to go ahead, there needs to be clarity on how NNPC, the state hydrocarbon company that owns the project on behalf of the government, plans to resolve the dispute
with NESTOIL. But NNPC spokespersons have not responded to questions from Africa Oil+Gas Report on the issue.
Contractual project completion date for both stLots is 31 July, 2018.
A key condition precedent for financial close of the $1.3Billion, 600MMscf/d domestic gas supply project is the completion of the Oben to Obiafu/Obiakom-Oben (OB3) pipeline, a large diameter (48”/36”) facility running 130 kilometres long from Oben in Nigeria's Midwest to Obiafu/Obrikom in the east. The two fields involved, Shell operated Assa North in Oil Mining Lease (OML) 21 and Seplat operated Ohaji South in OML 53, are straddling pools, with combined 2P reserves estimated at 4.5Tcf.
The OB3 construction was not always the only obstacle in the path of Seplat's taking FID on ANOH. In the last one year, the London Listed Nigerian independent, has severally announced shift in in FID dates for the (ANOH) project, mainly because of the involvement of the state gas company: Nigerian Gas Processing and Transportation Company NGPTC, which has now taken 35% equity in the ANOH project, and created, with Seplat, an incorporated joint venture midstream company. But now that the IJV process has been finalised, the OB3 stands in the way.
The EPC contract was awarded by the Nigerian cabinet of Ministers (Federal Executive Council) in the third quarter of 2012, to Messrs Nestoil Limited (Lot A) and Oilserv Limited (Lot B).
The pipeline, being constructed by the Nigerian government, will have the capacity to pump 2Billion standard cubic feet of gas a day.
OB3 Delay Will Stall Final Investment Decision For ANOH By Prospect Mojido
Lot B (NESTOIL) is stagnant. There are contractor issues with Lot B and the project is stalemated.
Wentworth Resources has reported improved delivery in payment for natural gas sold to Tanzanian
Petroleum Development Company 9TPDC) and Tanzanian Electricity Supply Company TANESCO.
The Company also reports that gross production volumes during September 2018 from the Mnazi Bay concession averaged 83.2 MMscfd. The September reduction in production volumes (August average of 87.9 MMscfd) was due to previously planned slick-line activities on the wells and TPDC hot-tapping operations for the Lodhia Steel works offtake.In an October 3, 2018 update, Wentworth
reported that payments received for September 2018 gas sales generated from the totalled $3.24Mllion net to Wentworth. “Payments were received from both TPDC and TANESCO for one month's gas sales to TPDC and one month's gas sales to TANESCO.
The company is a partner in the Mnazi Bay Concession Joint Venture, the largest gas producing entity for Tanzania's domestic gas market.
“Given the consistency of payments received to date in 2018, the Company no longer intends to release monthly updates to the market”, Wentworth explains. “Such information will be included in regular
Corporate and Operational activity RNS updates”.
The Nigerian Petroleum Development Company (NPDC) is weighing options on how to develop the gas in Utapate
South field in the Oil Mining Lease (OML) 13, onshore Akwa Ibom state. One proposition on the table is to pump the wet gas to the Uquo
Gas processing plant and evacuate the resulting dry gas through the Uquo-Ibom Power pipeline infrastructure, to customers in Eastern Nigeria. Another option is to sell the entire gas molecules insitu to Sterling Exploration, the aggressive Indian company
who has hinted of plans to build a processing plant right on the field. “These options are so preliminary at this stage we haven't gotten to talking about tariffs”, NPDC insiders say.
French major TOTAL has announced first gas from the Timimoun field in southwestern Algeria.
The production complex with a capacity of around 177Million cubic feet of natural gas per day at plateau (around 30,000 barrels of oil equivalent per day (BOEPD)), is jointly operated by Sonatrach (51%), TOTAL (37.75%) and Cepsa (11.25%).
Timimoun's gas will be produced with 37 wells connected to a gas processing facility that ties into the GR5 pipeline used to transport gas from fields in southwestern Algeria to Hassi R'mel.
In 2017, the company's production in Algeria averaged 15,000 BOEPD, all of it from the Tin
Fouyé Tabankort (TFT) gas and condensate field, located 300 kilometres west of the Libyan border. The Group holds a 35% in interest in TFT. Through the Maersk Oil acquisition, which closed on March 8, 2018, TOTAL now holds a 12.25% interest in the El-Merk, Hassi Berkine and Ourhoud oil fields, with a combined production capacity of 400,000 BOEPD.
TOTAL has been increasing its foothold in Algeria exploration and production activities of late, even though it had been in the country's upstream since 1952.
It is the company's second field in the North African country.
NPDC Hasn't Yet Agreed To Pump Utapate Gas Through Uquo Infrastructure-
TOTAL Delivers First Gas from Algeria's Timimoun Field
Tanzanian State Companies Now Pay Promptly For Gas
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 43A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 842
CO
MP
AN
Y U
PD
AT
E/
AD
VE
RT
OR
IA
LS
The company has however, been keen on expanding its footprints all over the African continent. It is involved in negotiations with the Ugandan government over a gas pipeline from the hydrocarbon rich town of Hoima to Kanugu, site of a proposed Iron and Steel
factory. Its subsidiary, Frazimex, once took a position in Sierra Leone, as an E&P operator.
The agreement between the two, signed in early July 2018, has resulted in the formation of OILSERV EQUATORIAL GUINEA S.L.
There are no details on the project that the Joint Venture will start with, but GEpetrol's credentials provide a clue: the company manages the Equatorial Guinea State's participation in petroleum contracts, markets the State's share of production and participates in oil service activities. In the midstream area, GEpetrol is a partner in the Equatorial Guinea Liquified Natural Gas Company and in other ventures, So that's a clue: Equatorial Guinea has just created a hub for natural gas supplies, which will, in the first instance, introduce third party gas into the Punto Europa complex that was, until now, only supplied with gas from Marathon Oil operated Alba field. If the Equatorial Guinea government is thinking of pipeline to supply gas into that complex from any field that is some distance away, then Oilserv has the capacity to do it.
“The Joint Venture Partnership is a collective strategic thinking aimed at driving inbound investment into the Equatorial Guinea Oil/Gas landscape and to develop the
necessary local technical capacity to support the investment aimed at repositioning the national economy”, the two companies say in a press release. “In this new collaboration, Oilserv brings its vast years of technical experience and successful delivery of projects to replicate its achievements in Equatorial Guinea oil and gas industry in partnership with GEpetrol”.
The Nigerian engineering oil service company Oilserv Limited, is bolstering its Pan African credentials by getting
into a joint venture with GEpetrol, the state hydrocarbon company of Equatorial Guinea.
But to have formed a Joint Venture company with Equatorial Guinea's state hydrocarbon firm is big deal.
Oilserv is the most visible hydrocarbon pipeline installation firm in Nigeria; its order book is the key guide to the most
important crude oil or natural gas pipeline construction going on in Nigeria. Currently it is constructing half of the OB3 pipeline, the 48 inch, 67km line that is scheduled to be the nerve of the country's imminent gas grid.
Oilserv In Bed with GEpetrol
Emeka Okwuosa, Chairman, Oilserv Group (Nigeria) and Antonio OBURU ONDO, Chief Executive Officer, GEpetro, during the signing
of the Joint Venture agreement in Equatorial Guinea
ENPPI, Wood Group Sign Partnership Deal for Deepwater Gas Drilling
El-Molla described London as Cairo's first trading partner, responsible for 40% of direct foreign investments into Egypt.
It was signed by Alaa Hejazi, Chairman of ENNPI and his counterpart at Wood, Colin McKinnon.
El-Molla said following the signing that the agreement aims to transfer technology and necessary experience between both sides to undergo the needed engineering work for natural gas exploration and drilling in the deep ocean, as Egypt continues to move forward with executing mega projects for the development and production of natural gas from the Mediterranean. He praised the deal as a new step of extended cooperation
between Egypt and the UK in natural gas production through several successful models of partnership between the petroleum sector and British companies throughout a number of development
projects in discovered gas fields in the Mediterranean.
Egypt's state oil company Engineering for Petroleum and Process Industries (ENPPI) has signed a deal with Wood
Group of the UK for a technical and engineering partnership on natural gas exploration and production through deepwater drilling.
Egypt's petroleum ministry said the inking of the agreement was witnessed by Minister of Petroleum Tarek El-Molla, UK's Ambassador to Egypt Sir Geoffrey Adams, and UK trade envoy Sir Jeffrey Donaldson.
This page is sponsored... contact [email protected]
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 43A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 842
CO
MP
AN
Y U
PD
AT
E/
AD
VE
RT
OR
IA
LS
The company has however, been keen on expanding its footprints all over the African continent. It is involved in negotiations with the Ugandan government over a gas pipeline from the hydrocarbon rich town of Hoima to Kanugu, site of a proposed Iron and Steel
factory. Its subsidiary, Frazimex, once took a position in Sierra Leone, as an E&P operator.
The agreement between the two, signed in early July 2018, has resulted in the formation of OILSERV EQUATORIAL GUINEA S.L.
There are no details on the project that the Joint Venture will start with, but GEpetrol's credentials provide a clue: the company manages the Equatorial Guinea State's participation in petroleum contracts, markets the State's share of production and participates in oil service activities. In the midstream area, GEpetrol is a partner in the Equatorial Guinea Liquified Natural Gas Company and in other ventures, So that's a clue: Equatorial Guinea has just created a hub for natural gas supplies, which will, in the first instance, introduce third party gas into the Punto Europa complex that was, until now, only supplied with gas from Marathon Oil operated Alba field. If the Equatorial Guinea government is thinking of pipeline to supply gas into that complex from any field that is some distance away, then Oilserv has the capacity to do it.
“The Joint Venture Partnership is a collective strategic thinking aimed at driving inbound investment into the Equatorial Guinea Oil/Gas landscape and to develop the
necessary local technical capacity to support the investment aimed at repositioning the national economy”, the two companies say in a press release. “In this new collaboration, Oilserv brings its vast years of technical experience and successful delivery of projects to replicate its achievements in Equatorial Guinea oil and gas industry in partnership with GEpetrol”.
The Nigerian engineering oil service company Oilserv Limited, is bolstering its Pan African credentials by getting
into a joint venture with GEpetrol, the state hydrocarbon company of Equatorial Guinea.
But to have formed a Joint Venture company with Equatorial Guinea's state hydrocarbon firm is big deal.
Oilserv is the most visible hydrocarbon pipeline installation firm in Nigeria; its order book is the key guide to the most
important crude oil or natural gas pipeline construction going on in Nigeria. Currently it is constructing half of the OB3 pipeline, the 48 inch, 67km line that is scheduled to be the nerve of the country's imminent gas grid.
Oilserv In Bed with GEpetrol
Emeka Okwuosa, Chairman, Oilserv Group (Nigeria) and Antonio OBURU ONDO, Chief Executive Officer, GEpetro, during the signing
of the Joint Venture agreement in Equatorial Guinea
ENPPI, Wood Group Sign Partnership Deal for Deepwater Gas Drilling
El-Molla described London as Cairo's first trading partner, responsible for 40% of direct foreign investments into Egypt.
It was signed by Alaa Hejazi, Chairman of ENNPI and his counterpart at Wood, Colin McKinnon.
El-Molla said following the signing that the agreement aims to transfer technology and necessary experience between both sides to undergo the needed engineering work for natural gas exploration and drilling in the deep ocean, as Egypt continues to move forward with executing mega projects for the development and production of natural gas from the Mediterranean. He praised the deal as a new step of extended cooperation
between Egypt and the UK in natural gas production through several successful models of partnership between the petroleum sector and British companies throughout a number of development
projects in discovered gas fields in the Mediterranean.
Egypt's state oil company Engineering for Petroleum and Process Industries (ENPPI) has signed a deal with Wood
Group of the UK for a technical and engineering partnership on natural gas exploration and production through deepwater drilling.
Egypt's petroleum ministry said the inking of the agreement was witnessed by Minister of Petroleum Tarek El-Molla, UK's Ambassador to Egypt Sir Geoffrey Adams, and UK trade envoy Sir Jeffrey Donaldson.
This page is sponsored... contact [email protected]
By Emmanuel Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources
For Shell, it is simply an attention to the fact that the time has come to process without just carrying crude out, and ultimately the policies of this country will begin to compel that if we can't persuade that. Because some of the things I've struggled with as I've pushed very aggressively, the whole concept of refinery, re-injection and re-activation and the modular refinery is how do you find the crude? The crude is owned by those who produce it and so once they take theirs away, we're left with nothing to process. But in the next couple of months, those will begin to change. We'll have to begin to enforce the 20% crude processing requirement in this country, graduating all the way to 50% over the next 5 years. Really we have no option otherwise we're going to just stay in an abyss of not processing while people are taking away raw materials. The time for that is gone. I'm hoping Okunbor's presence here not just as Shell MD but also head of (the Oil Producers Group) OPTS is to begin to have that dialogue that is essential. Because I find out I can achieve more when I can dialogue rather than when I can compel. I only compel when I can't dialogue and I'd like to see that move very rapidly. For NCDMB, I'm happy that they're here largely because as Chairman of NCDMB, when we put together this whole process of putting money in Bank of Industry, most of that was articulated by Simbi and I'm not sure we actually knew where the 200Million dollars was going to go, we just
knew that we had a momentum to help the local industry. But since then, he and his team have done a fantastic work in articulating where these monies should go and how it should be deployed. I'm currently in the middle of trying to settle a battle between him and the Bank of Industry (BOI) because in his typical manner, he said he has given 6 months and he hasn't seen where the money where it should be so I need to take my money. We'll be having a meeting over the next few days in trying to resolve that. But that's the spirit, there's a reason why things are done. I'm happy that he's here and more than Razak, he's put a lot of pressure on me to make sure that whatever I'm doing, I should be present here today. Osten Olorunshola, largely to the fact that he's done a huge amount on the Petroleum Industry Bill PIB and I tell him not to be disillusioned. The president's position is not that PIB will never see the light of day, that's not his position. His position is that there are concerns that he has and we need to make him comfortable, he's the man who's going to sign. Nobody should sign what he's not comfortable with. I urge him to put on that garb of perseverance that he has and continue to work with us and let's see how we can get the big man to the point of comfort because this is something that needs to happen for the country. NNPC, your huge presence today is incredible! It's very nice for me, because you're part-owners of most of the crude. If I'm going to drive this policy, I need to get you on my side. So hearing the lovely words that the COO GAS has said just gives us a lot of happiness. Accompanying him is the COO SERVICES who's also here. I'm very glad that you're all here today. Let me spend a few minutes on what the refining roadmap is for this country. First is that we're very much committed to repairing what we call the existing Big Four which are the four refineries we have located in Port-Harcourt, Kaduna and Warri. If
everybody had ran at the speed that I wanted to run, we should have that up and running quite frankly all done and functioning by 2019. Not for election purposes, but for the fact that it will be such a sad day for this country if at the end of 2019, we're still hopping around the world trying to import product. It costs us a lot of money, it's a waste of vital foreign exchange that we shouldn't pay and it deprives our people of god jobs at hand. We need to hurry up that process. The board is working with NNPC to see how fast we can, I'm not sure any of us realized what is required for raising international finance for these things when we started, so it's taking a bit more time since when we started but believe me, they get polished each time we have a board meeting because we need to move on this goal and I'm continuous with the move around the world to find Alternative Financing because I did give the president my word that federal government money will not go into this project if we can help and we're looking for private sector funding. So that's the first step in the roadmap, and if we do that, we'll be able to process at least 500,000 barrels from these four refineries. The second is of course the Modular Challenge. As part of the strategy to pull away militants from crude processing of products, we came up with the concept of absorbing a lot of them, create modular
I could make this event, I had three different events for the day, one in Russia, another in Equatorial Guinea and one
here. Eventually I had to call my colleague in Russia to say it's so important that I should be here because of the significance of this event and so I won't be able to make it to Russia. Then I negotiated hard with Razak ( A b d u l r a z a q I s a , C h i e f E xe c u t i v e Waltersmith), to say how do I get here and still make it to Equatorial Guinea where I need to function as the president of African Petroleum Producers Association. The effect of that is I'm going to make this speech very quick and catch the next flight to Malabo so that I can return back to Nigeria before the end of day. The king of the place Eze Ekweme Ekweme is really the major owner of the protocols here and once I recognise him, I can then stand beside other existing protocols. I'm particularly glad to see here today, the likes of the Shell MD and Nigerian Content Development Monitoring Board (NCDMB) Executive Secretary. I'll tell you why I'm particularly glad for their presence. My good friend Osten Olorunshola and of course the Eze himself.
If the NNPC Had Implemented the Refinery Revamp The Way I Planned
If everybody had ran at the speed that I wanted to run, we
should have that up and running quite frankly all done and functioning by 2019. Not for election purposes, but for the fact that it will be such a sad day for this country if at the end of 2019, we're still hopping around the world trying to import product. It costs us a lot of money, it's
waste of vital foreign exchange that we shouldn't pay and it deprives our people of good
jobs at hand. We need to hurry up that process.
We Could Have Done BetterWe are very much committed to repairing what we call the
existing Big Four which are the four refineries we have located in Port-Harcourt, Kaduna and
Warri.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 844
RE
FIN
ING
GA
P
RE
FIN
ING
GA
P
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 45
refineries in these contiguous communities, create jobs and get some of the fairly uncouth skill sets that they have and polish them and put them in the system and that is how the whole concept of modular refineries started. Thank God the Vice-President bought into that and worked very hard with us as part of the 14-Point Agenda for reducing militancy in the Niger-Delta. So today we hope that if the 10 Modular Refineries that have at least began to kick-off, have signed basic agreements, some of them have actually commissioned and are working and the very first one to put products in the markets will do so by December/January and if we do that, out of those ten modular refineries, we hope to process between 200,000-300,000 barrels of crude oil into the system. That of course includes WalterSmith. The third arm of that is obviously the private sector-led Greenfield refineries. Under that, you have the Dangote bumper 650,000 barrel refinery which he's doing in Lagos, we have the Niger-Nigeria one which is about 70,000-100,000 barrels, we have the Agip one which is about 150,000 barrels refinery in Bayelsa and we have the one led by a Chinese consortium which we're finalising now which will also be able to do a c-location refinery. Infact, we have two co-location refineries possibilities. One far gone, one just beginning, each of them about 100,000 barrels. So again, from this field alone, you have processing in excess of a million barrels of crude in this country. So you can see that these are well thought out policies driven from the mind of specific focus on refining and if we do that, we'll be able to process between a million and a million and half barrels of crude oil in this country and take over what is basically the processing hub of West Africa and East Africa. The market is there just for the picking so it would be a
shame if we let some of these opportunities go. Realizing that very early in the game therefore, I set up a refining technical team and brought in the COO/SCA Suleiman who's done more work on this. I get the praises, but he's the man in the engine room. He's driven very purposefully the whole dream of how we can get to the refining final hub, both the modular, both the refinery activation. NNPC is doing, both the third-party private-sector driven ones. And his singular purpose is to be able to deliver this as quickly as possible, so
this is how we've gone about this. But how do we get crude to those that want to refine, because some of those who want to refine do not have production wells. Some of them are going to depend on third-party injections and that's one of the things we're struggling with Dangote right now, how do we get him all the gas and crude he needs. But I believe that the private sector led by the majors are equally committed to the progress and success of this country and as long as the crude itself is adequately priced in a way that it doesn't injure their interests, they should be able to get adequate amount of crude back in. I'd also be pushing NNPC through NPDC to uplift their game. Another thing is what incentives must you provide for this group of people who want to refine Nigerian crude? We've succeeded in providing Custom duties clearances and waivers as a first call to enable them bring in
their equipment at zero duty levels. We've created a financing model which NCDMB is driving. Funding is key, what I'm expecting NCDMB to do ultimately is to work with Suleiman as the engine to drive refining not just local refining. What it means is that we're going to have to find funds, federal government funds, CBN-designated funds to put in the hands of NCDMB in a managed professional way to help those who need to reactivate and build refineries in this country. So that there's funding available for you to manage, there's funding for you to expand the scope of what you're doing currently, which is a bit limited to be able to take much bigger proposals and more committed individuals. And I think that when you do that, the IOCs will be able to come onboard once they can see a funding
line, a credible partner, they can see a direction and then we'll be able to go. The other incentive or other directive you'll be
able to see coming out, hopefully soon is what I call the “Clutch-free Mechanism”. That Clutch-free means that those who have licences who can't use the licences will have to let them go. We're not going to have people just clutching on licences and putting them as signboards in their houses. If you take a license, we'll give you a timeframe in which you must put up or shut up! There're people who have held Modular licences for 2,3,5 almost 10 years and have done nothing
with it other than just hawking it all over the place. If you can't use it, there's no need for me to licence almost 40 Modular licence and you're talking of only 10 being active, So that Clutch-free Mechanism is something we're going to begin to explore very seriously with DPR to try and free up the whole of some of these licences.
Being excerpts from the Keynote Address By the Honourable Minister of State For Petroleum, at the Groundbreaking Ceremony of Waltersmith Refinery & Petrochemical Company Limited, Ibigwe, Ohaji Local Government Area, Imo State. The speech was delivered extempore. Transcription was by Foluso Ogunsan.
From left, Danjuma Saleh, Executive Vice Chairman, Waltersmith; Simbi Wabote, Executive Secretary NCDMB; Florence Ita-Giwa, Board member, Waltersmith; Eze Ekweme Ekweme of Ohaji Kingdom; Ibe Kachikwu, Nigeria's Minister of State for Petroleum; Abdulrazaq Isa, Executive Chairman, Waltersmith and Saidu Mohammed, NNPC's Chief Operating Officer, Gas and Power, at the Groundbreaking ceremony for the 5,000BSPD Waltersmith Refinery.
10 Modular Refineries On Course..We hope that if the 10 Modular Refineries that have at least begun
to kick-off, have signed basic agreements, some of them have actually commissioned and are working and the very first one to put products in the markets will do so by December 2018/January 2019..
By Emmanuel Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources
For Shell, it is simply an attention to the fact that the time has come to process without just carrying crude out, and ultimately the policies of this country will begin to compel that if we can't persuade that. Because some of the things I've struggled with as I've pushed very aggressively, the whole concept of refinery, re-injection and re-activation and the modular refinery is how do you find the crude? The crude is owned by those who produce it and so once they take theirs away, we're left with nothing to process. But in the next couple of months, those will begin to change. We'll have to begin to enforce the 20% crude processing requirement in this country, graduating all the way to 50% over the next 5 years. Really we have no option otherwise we're going to just stay in an abyss of not processing while people are taking away raw materials. The time for that is gone. I'm hoping Okunbor's presence here not just as Shell MD but also head of (the Oil Producers Group) OPTS is to begin to have that dialogue that is essential. Because I find out I can achieve more when I can dialogue rather than when I can compel. I only compel when I can't dialogue and I'd like to see that move very rapidly. For NCDMB, I'm happy that they're here largely because as Chairman of NCDMB, when we put together this whole process of putting money in Bank of Industry, most of that was articulated by Simbi and I'm not sure we actually knew where the 200Million dollars was going to go, we just
knew that we had a momentum to help the local industry. But since then, he and his team have done a fantastic work in articulating where these monies should go and how it should be deployed. I'm currently in the middle of trying to settle a battle between him and the Bank of Industry (BOI) because in his typical manner, he said he has given 6 months and he hasn't seen where the money where it should be so I need to take my money. We'll be having a meeting over the next few days in trying to resolve that. But that's the spirit, there's a reason why things are done. I'm happy that he's here and more than Razak, he's put a lot of pressure on me to make sure that whatever I'm doing, I should be present here today. Osten Olorunshola, largely to the fact that he's done a huge amount on the Petroleum Industry Bill PIB and I tell him not to be disillusioned. The president's position is not that PIB will never see the light of day, that's not his position. His position is that there are concerns that he has and we need to make him comfortable, he's the man who's going to sign. Nobody should sign what he's not comfortable with. I urge him to put on that garb of perseverance that he has and continue to work with us and let's see how we can get the big man to the point of comfort because this is something that needs to happen for the country. NNPC, your huge presence today is incredible! It's very nice for me, because you're part-owners of most of the crude. If I'm going to drive this policy, I need to get you on my side. So hearing the lovely words that the COO GAS has said just gives us a lot of happiness. Accompanying him is the COO SERVICES who's also here. I'm very glad that you're all here today. Let me spend a few minutes on what the refining roadmap is for this country. First is that we're very much committed to repairing what we call the existing Big Four which are the four refineries we have located in Port-Harcourt, Kaduna and Warri. If
everybody had ran at the speed that I wanted to run, we should have that up and running quite frankly all done and functioning by 2019. Not for election purposes, but for the fact that it will be such a sad day for this country if at the end of 2019, we're still hopping around the world trying to import product. It costs us a lot of money, it's a waste of vital foreign exchange that we shouldn't pay and it deprives our people of god jobs at hand. We need to hurry up that process. The board is working with NNPC to see how fast we can, I'm not sure any of us realized what is required for raising international finance for these things when we started, so it's taking a bit more time since when we started but believe me, they get polished each time we have a board meeting because we need to move on this goal and I'm continuous with the move around the world to find Alternative Financing because I did give the president my word that federal government money will not go into this project if we can help and we're looking for private sector funding. So that's the first step in the roadmap, and if we do that, we'll be able to process at least 500,000 barrels from these four refineries. The second is of course the Modular Challenge. As part of the strategy to pull away militants from crude processing of products, we came up with the concept of absorbing a lot of them, create modular
I could make this event, I had three different events for the day, one in Russia, another in Equatorial Guinea and one
here. Eventually I had to call my colleague in Russia to say it's so important that I should be here because of the significance of this event and so I won't be able to make it to Russia. Then I negotiated hard with Razak ( A b d u l r a z a q I s a , C h i e f E xe c u t i v e Waltersmith), to say how do I get here and still make it to Equatorial Guinea where I need to function as the president of African Petroleum Producers Association. The effect of that is I'm going to make this speech very quick and catch the next flight to Malabo so that I can return back to Nigeria before the end of day. The king of the place Eze Ekweme Ekweme is really the major owner of the protocols here and once I recognise him, I can then stand beside other existing protocols. I'm particularly glad to see here today, the likes of the Shell MD and Nigerian Content Development Monitoring Board (NCDMB) Executive Secretary. I'll tell you why I'm particularly glad for their presence. My good friend Osten Olorunshola and of course the Eze himself.
If the NNPC Had Implemented the Refinery Revamp The Way I Planned
If everybody had ran at the speed that I wanted to run, we
should have that up and running quite frankly all done and functioning by 2019. Not for election purposes, but for the fact that it will be such a sad day for this country if at the end of 2019, we're still hopping around the world trying to import product. It costs us a lot of money, it's
waste of vital foreign exchange that we shouldn't pay and it deprives our people of good
jobs at hand. We need to hurry up that process.
We Could Have Done BetterWe are very much committed to repairing what we call the
existing Big Four which are the four refineries we have located in Port-Harcourt, Kaduna and
Warri.
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 844
RE
FIN
ING
GA
P
RE
FIN
ING
GA
P
AFRICA OIL + GAS REPORT J U LY 2 0 1 8 45
refineries in these contiguous communities, create jobs and get some of the fairly uncouth skill sets that they have and polish them and put them in the system and that is how the whole concept of modular refineries started. Thank God the Vice-President bought into that and worked very hard with us as part of the 14-Point Agenda for reducing militancy in the Niger-Delta. So today we hope that if the 10 Modular Refineries that have at least began to kick-off, have signed basic agreements, some of them have actually commissioned and are working and the very first one to put products in the markets will do so by December/January and if we do that, out of those ten modular refineries, we hope to process between 200,000-300,000 barrels of crude oil into the system. That of course includes WalterSmith. The third arm of that is obviously the private sector-led Greenfield refineries. Under that, you have the Dangote bumper 650,000 barrel refinery which he's doing in Lagos, we have the Niger-Nigeria one which is about 70,000-100,000 barrels, we have the Agip one which is about 150,000 barrels refinery in Bayelsa and we have the one led by a Chinese consortium which we're finalising now which will also be able to do a c-location refinery. Infact, we have two co-location refineries possibilities. One far gone, one just beginning, each of them about 100,000 barrels. So again, from this field alone, you have processing in excess of a million barrels of crude in this country. So you can see that these are well thought out policies driven from the mind of specific focus on refining and if we do that, we'll be able to process between a million and a million and half barrels of crude oil in this country and take over what is basically the processing hub of West Africa and East Africa. The market is there just for the picking so it would be a
shame if we let some of these opportunities go. Realizing that very early in the game therefore, I set up a refining technical team and brought in the COO/SCA Suleiman who's done more work on this. I get the praises, but he's the man in the engine room. He's driven very purposefully the whole dream of how we can get to the refining final hub, both the modular, both the refinery activation. NNPC is doing, both the third-party private-sector driven ones. And his singular purpose is to be able to deliver this as quickly as possible, so
this is how we've gone about this. But how do we get crude to those that want to refine, because some of those who want to refine do not have production wells. Some of them are going to depend on third-party injections and that's one of the things we're struggling with Dangote right now, how do we get him all the gas and crude he needs. But I believe that the private sector led by the majors are equally committed to the progress and success of this country and as long as the crude itself is adequately priced in a way that it doesn't injure their interests, they should be able to get adequate amount of crude back in. I'd also be pushing NNPC through NPDC to uplift their game. Another thing is what incentives must you provide for this group of people who want to refine Nigerian crude? We've succeeded in providing Custom duties clearances and waivers as a first call to enable them bring in
their equipment at zero duty levels. We've created a financing model which NCDMB is driving. Funding is key, what I'm expecting NCDMB to do ultimately is to work with Suleiman as the engine to drive refining not just local refining. What it means is that we're going to have to find funds, federal government funds, CBN-designated funds to put in the hands of NCDMB in a managed professional way to help those who need to reactivate and build refineries in this country. So that there's funding available for you to manage, there's funding for you to expand the scope of what you're doing currently, which is a bit limited to be able to take much bigger proposals and more committed individuals. And I think that when you do that, the IOCs will be able to come onboard once they can see a funding
line, a credible partner, they can see a direction and then we'll be able to go. The other incentive or other directive you'll be
able to see coming out, hopefully soon is what I call the “Clutch-free Mechanism”. That Clutch-free means that those who have licences who can't use the licences will have to let them go. We're not going to have people just clutching on licences and putting them as signboards in their houses. If you take a license, we'll give you a timeframe in which you must put up or shut up! There're people who have held Modular licences for 2,3,5 almost 10 years and have done nothing
with it other than just hawking it all over the place. If you can't use it, there's no need for me to licence almost 40 Modular licence and you're talking of only 10 being active, So that Clutch-free Mechanism is something we're going to begin to explore very seriously with DPR to try and free up the whole of some of these licences.
Being excerpts from the Keynote Address By the Honourable Minister of State For Petroleum, at the Groundbreaking Ceremony of Waltersmith Refinery & Petrochemical Company Limited, Ibigwe, Ohaji Local Government Area, Imo State. The speech was delivered extempore. Transcription was by Foluso Ogunsan.
From left, Danjuma Saleh, Executive Vice Chairman, Waltersmith; Simbi Wabote, Executive Secretary NCDMB; Florence Ita-Giwa, Board member, Waltersmith; Eze Ekweme Ekweme of Ohaji Kingdom; Ibe Kachikwu, Nigeria's Minister of State for Petroleum; Abdulrazaq Isa, Executive Chairman, Waltersmith and Saidu Mohammed, NNPC's Chief Operating Officer, Gas and Power, at the Groundbreaking ceremony for the 5,000BSPD Waltersmith Refinery.
10 Modular Refineries On Course..We hope that if the 10 Modular Refineries that have at least begun
to kick-off, have signed basic agreements, some of them have actually commissioned and are working and the very first one to put products in the markets will do so by December 2018/January 2019..
RE
FIN
ING
GA
P
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 846
In Africa, there are some 50 listed refining projects, which, if all built, would add nearly 5Million barrels of crude oil per day
(5MMBOPD) of new refining capacity to the continent.
It must be borne in mind that this regional outlook is unusual in that it hinges largely on a single project. Moreover, since the project is in West Africa, its implementation does not necessarily alter the situations in North and East/South Africa. What should happen, especially in West Africa, is a reduction in the need and opportunity for product imports.
For the first time in many years, projected firm
additions at 1.1MMBOPD exceed regional demand grow th for 2018–2023 at 0.7MMBOPD. This change relates primarily to one project in Niger ia now under construction. Recognizing that this one major project is in West Africa,
This outlook for increasing excess refining capacity implies reduced refinery utilizations and/or more closures, especially post-2020 as the excess builds. It is important to note,
however, that this medium-term assessment does not take into account the effects of closures. As discussed later, additional (gross) closures of 1.2MMBOPD were estimated for the period 2018–2023 and applied in the WORLD modelling cases. They are a combination of already announced closures, m a i n l y e a r l y i n t h e p e r i o d , w i t h estimated/possible closures later in the period that would likely result from anticipated demand declines, especially in Europe, but also in the US & Canada and potentially other regions. Based on this medium-term outlook, at least the highlighted level of closures would appear to be warranted.
Excerpted from the 2018 edition of the Annual World Oil Outlook, a publication of the Oil Producing and Experting Countries
This year, the outlook represents a significant reversal from recent history.
Bringing these regional outlooks together, six regions have an excess of refined product potential compared to requirements. The most significant excess is that of the Middle East (1.4MMBOPD by 2023), followed by Europe (0.5MMBOPD), Africa (0.3MMBOPD), US & Canada (0.25MMBOPD), Russia & C a s p i a n ( 0 . 1 M M B O P D ) a n d C h i n a (0.1MMBOPD), for a total of 2.6MMBOPD by 2023.
In recent World Oil Outlooks (WOOs), however, the proportion of projects considered firm has generally been low, for example, 400,000Barrels per day for the 2017–2022 period in WOO 2017.
As always, careful monitoring of refinery projects versus demand growth is called for to gauge whether this impending excess will 'evaporate' as the time draws nearer (via project slippage, further demand growth and/or plant closures) or whether it will in fact remain.
In contrast, the Asia-Pacific region (excluding China), as well as Latin America exhibit a deficit of less than 0.1MMBOPD by 2023 each. As summarized in Figure 5.12, the net global outlook is for incremental refined product potential based on projects to exceed incremental refined product requirements by over 2.5MMBOPD by 2023.
Last year's WOO hinted that, in Africa, “new projects could improve the situation somewhat toward the end of the period”. This year, increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture. Allowing for some uncertainty in the project's start-up timetable, incremental potential in Africa is
expected to continue to lag incremental demand-based requirements through 2020, after which the potential is for a balance or excess requirements. A deficit of around 0.2 mb/d in 2019–2020 is estimated to swing to an excess of around 0.3 mb/d by 2022–2023.
the prospects for North and East/South Africa continues to be for further increases in regional net product imports.
Africa: Ambitious Refining Plans, Delivery More LikelyBy OPEC's Annual World Outlook
Dangote Refinery under construction in the east of Lagos
Increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture
Expanded Ogbele Refinery Slips in Completion Date
Sources in the Niger Delta Petroleum
Resources, owners of the refinery, however described the statement as “alternative facts” and wonder where the story was coming from.
Edobor Iyamu, Special Assistant to the President on the Niger Delta, had been widely quoted in the media as saying that the 5,000BSPD refinery was slated to be commissioned in the first week of November.
The second phase of the Ogbele Crude Oil Topping Plant is not going to be commissioned in November 2018, as
indicated by a ranking official in the Nigerian Presidency. “When we are ready, we will let you know”.
The project, which is the Phase Two of the crude oil to diesel topping plant that was commissioned in 2011, was expected on stream by Q2 2018. But there have been delays. The project will enable NDPR TO produce five (5) different products including
Dual Purpose Kerosene, DPK, where the company aims to meet the quality specification for Jet Fuel, more diesel, AGO, including Marine Diesel (which is another grade of diesel for the marine industry), Heavy Fuel Oil and Stabilized Naphtha. The case for this last product, Stabilized Naphtha, is that it will be available in case there are any offtakers who want to buy it
Nigerian President, Muhammadu Buhari and his counterpart, the President of the Republic of Niger, Mahamadou Issoufou,
oversaw the signing of a Memorandum of Understanding for the Niger/Nigeria Hydrocarbon Pipeline & Refinery Projects & Inauguration of the Steering and Technical Committees.
The initative is expected to increase trade between Nigeria and Niger by giving access to each other's markets and opening the markets to other industries.
The proposed projects for the construction of crude oil pipelines from Republic of Niger to Nigeria and establishment of new refinery at a border town in Nigeria are envisaged to be wholly
private sector financed and the proposed Crude Oil Export from the Republic of Niger and Construction of Refinery Facilities “will offer immense benefits and opportunities for the people of both countries”, according to spokespersons of the Nigerian Ministry of Petroleum Resources.
The Nigerian-Niger Refinery Is Up For Private Sector Investment
RE
FIN
ING
GA
P
A F R I C A O I L + G A S R E P O R T O C TO B E R 2 0 1 846
In Africa, there are some 50 listed refining projects, which, if all built, would add nearly 5Million barrels of crude oil per day
(5MMBOPD) of new refining capacity to the continent.
It must be borne in mind that this regional outlook is unusual in that it hinges largely on a single project. Moreover, since the project is in West Africa, its implementation does not necessarily alter the situations in North and East/South Africa. What should happen, especially in West Africa, is a reduction in the need and opportunity for product imports.
For the first time in many years, projected firm
additions at 1.1MMBOPD exceed regional demand grow th for 2018–2023 at 0.7MMBOPD. This change relates primarily to one project in Niger ia now under construction. Recognizing that this one major project is in West Africa,
This outlook for increasing excess refining capacity implies reduced refinery utilizations and/or more closures, especially post-2020 as the excess builds. It is important to note,
however, that this medium-term assessment does not take into account the effects of closures. As discussed later, additional (gross) closures of 1.2MMBOPD were estimated for the period 2018–2023 and applied in the WORLD modelling cases. They are a combination of already announced closures, m a i n l y e a r l y i n t h e p e r i o d , w i t h estimated/possible closures later in the period that would likely result from anticipated demand declines, especially in Europe, but also in the US & Canada and potentially other regions. Based on this medium-term outlook, at least the highlighted level of closures would appear to be warranted.
Excerpted from the 2018 edition of the Annual World Oil Outlook, a publication of the Oil Producing and Experting Countries
This year, the outlook represents a significant reversal from recent history.
Bringing these regional outlooks together, six regions have an excess of refined product potential compared to requirements. The most significant excess is that of the Middle East (1.4MMBOPD by 2023), followed by Europe (0.5MMBOPD), Africa (0.3MMBOPD), US & Canada (0.25MMBOPD), Russia & C a s p i a n ( 0 . 1 M M B O P D ) a n d C h i n a (0.1MMBOPD), for a total of 2.6MMBOPD by 2023.
In recent World Oil Outlooks (WOOs), however, the proportion of projects considered firm has generally been low, for example, 400,000Barrels per day for the 2017–2022 period in WOO 2017.
As always, careful monitoring of refinery projects versus demand growth is called for to gauge whether this impending excess will 'evaporate' as the time draws nearer (via project slippage, further demand growth and/or plant closures) or whether it will in fact remain.
In contrast, the Asia-Pacific region (excluding China), as well as Latin America exhibit a deficit of less than 0.1MMBOPD by 2023 each. As summarized in Figure 5.12, the net global outlook is for incremental refined product potential based on projects to exceed incremental refined product requirements by over 2.5MMBOPD by 2023.
Last year's WOO hinted that, in Africa, “new projects could improve the situation somewhat toward the end of the period”. This year, increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture. Allowing for some uncertainty in the project's start-up timetable, incremental potential in Africa is
expected to continue to lag incremental demand-based requirements through 2020, after which the potential is for a balance or excess requirements. A deficit of around 0.2 mb/d in 2019–2020 is estimated to swing to an excess of around 0.3 mb/d by 2022–2023.
the prospects for North and East/South Africa continues to be for further increases in regional net product imports.
Africa: Ambitious Refining Plans, Delivery More LikelyBy OPEC's Annual World Outlook
Dangote Refinery under construction in the east of Lagos
Increasing confidence that the Dangote project in Nigeria will go ahead is indeed changing the picture
Expanded Ogbele Refinery Slips in Completion Date
Sources in the Niger Delta Petroleum
Resources, owners of the refinery, however described the statement as “alternative facts” and wonder where the story was coming from.
Edobor Iyamu, Special Assistant to the President on the Niger Delta, had been widely quoted in the media as saying that the 5,000BSPD refinery was slated to be commissioned in the first week of November.
The second phase of the Ogbele Crude Oil Topping Plant is not going to be commissioned in November 2018, as
indicated by a ranking official in the Nigerian Presidency. “When we are ready, we will let you know”.
The project, which is the Phase Two of the crude oil to diesel topping plant that was commissioned in 2011, was expected on stream by Q2 2018. But there have been delays. The project will enable NDPR TO produce five (5) different products including
Dual Purpose Kerosene, DPK, where the company aims to meet the quality specification for Jet Fuel, more diesel, AGO, including Marine Diesel (which is another grade of diesel for the marine industry), Heavy Fuel Oil and Stabilized Naphtha. The case for this last product, Stabilized Naphtha, is that it will be available in case there are any offtakers who want to buy it
Nigerian President, Muhammadu Buhari and his counterpart, the President of the Republic of Niger, Mahamadou Issoufou,
oversaw the signing of a Memorandum of Understanding for the Niger/Nigeria Hydrocarbon Pipeline & Refinery Projects & Inauguration of the Steering and Technical Committees.
The initative is expected to increase trade between Nigeria and Niger by giving access to each other's markets and opening the markets to other industries.
The proposed projects for the construction of crude oil pipelines from Republic of Niger to Nigeria and establishment of new refinery at a border town in Nigeria are envisaged to be wholly
private sector financed and the proposed Crude Oil Export from the Republic of Niger and Construction of Refinery Facilities “will offer immense benefits and opportunities for the people of both countries”, according to spokespersons of the Nigerian Ministry of Petroleum Resources.
The Nigerian-Niger Refinery Is Up For Private Sector Investment
