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Latest news, analysis and commentaries on oil & gas industry in Africa - countries, companies, projects and contracts. Published by NewsBase since 2003, being read in 86 countries worldwide.TRANSCRIPT
For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside…
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
22 January 2013
Week 03
Issue 473
News Analysis
Intelligence
Published by
NewsBase
COMMENTARY 2
The In Amenas attack 2
Nigeria takes Qua Iboe crunch 4
PIPELINES & TRANSPORT 5
Tender issued for Kenya’s new pipeline 5
South Sudan remains keen on pipeline to
Kenya 5
Piracy threat increasing in West Africa 6
INVESTMENT 6
Perenco signs Cameroon exploration
contract 6
PERFORMANCE 7
Eni confirms Sankofa find with appraisal
well 7
Somaliland aspires to oil future 8
Frost: South African shale gas years
away 8
POLICY 9
Griffiths charged with Chadian
corruption 9
PROJECTS & COMPANIES 9
Pura Vida signs up Gabonese block 9
Liberian 3-D seismic under way 10
NEWS IN BRIEF 11
CONFERENCES 21
NEWS THIS WEEK…
Algeria crisis Algiers demonstrated its willingness to engage terrorism last week in its response to the In Amenas assault, but can the country keep its facilities – and workers – safe?
Algeria has committed to providing more security for its facilities, as has Libya, which could well face similar attacks. (Page 2)
East African links South Sudan is still casting around for export options, while Kenya is re-tendering a long-planned products pipeline.
Kenya has taken a first step in tendering a pipeline from Mombasa to Nairobi, which was to have been worked on by Libya’s Tamoil. (Page 5)
A South Sudanese official has reiterated interest in an export pipeline through Kenya, but this will be an expensive proposition. (Page 5)
South African shale Frost & Sullivan believes the shale resource of the Karoo Basin will not be commercially produced for at least seven years. (Page 8)
AfrOil AFRICA OIL & GAS MONITOR
AfrOil 22 January 2013, Week 03 page 2
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
The attack on Algeria’s In Amenas gas
facility began with the ambush of a bus
carrying workers and ended with a death
toll said to be more than 70 – raising
fresh concerns about security in the Sahel
region.
Details of the assault are still emerging
but it seems the January 16 dawn ambush
on the bus led to the deaths of an
expatriate worker and an Algerian
security guard. The attackers, who appear
to have been members of Mokhtar
Belmokhtar’s al-Muaqioon Biddam –
which can be translated as Signed in
Blood – brigade, then stormed the
Tigantourine plant, taking a number of
hostages.
It appears the kidnappers attempted to
move some of their hostages on January
17 but the Algerian army attacked with a
helicopter gunship, leading to the death
of between 20 and 40 people. Both
kidnappers and kidnapped died in the
Algerian assault.
The Algerian army
carried out a final
assault on January 19.
Algerian Prime
Minister Abdelmalek
Sellal, on January 21,
said 37 foreign
workers were believed
to have died. Sellal
also said 29 militants
had been killed and
that three had been
captured. Around 680
Algerian workers and
more than 100
expatriate workers
were freed, according
to Algiers. According
to reports, attackers told locals and
Muslims that they would not be harmed,
and that they were targeting Westerners
and Christians.
The Jamestown Foundation reported
that responsibility for the attack was also
claimed by a rival group, Katibat al-
Mulathamin – which it translated as
Brigade of the Wearers of the Veil.
Grim tally
At the time of the attack there are
thought to have been around 800 workers
at In Amenas, of whom 135 were
expatriates. Figures provided by the UK
government suggest at least 12 workers
are dead and another 20 missing – and
the same source repeated Algeria’s
statement that 37 foreign hostages had
been killed. Over 30 terrorists had died,
UK Prime Minister David Cameron said,
but a “small number” are in Algerian
custody.
Cameron went on to praise the
Algerian response and said the
responsibility for the deaths “lies
squarely with the terrorists.”
As of January 20, BP said four of its
workers were still missing and that it had
18 employees at the facility when the
attack began. The company said it had
evacuated non-essential staff from In
Salah, Hassi Messaoud and other
locations and that the security situation
was under “close review.”
Statoil released the name of five
employees still missing on January 20,
noting that it had 17 workers at the plant
at the time of the assault.
A statement from Sonatrach on
January 20 “condemned and deplored”
the terrorist attack on Tigantourine and
offered condolences to its partners and
the Algerian army for the dead, but did
not provide information on the status of
its workers.
COMMENTARY
The In Amenas attack Algeria has weathered the last few years in relative calm, but the assault last week on the
In Amenas joint venture was a shocking reminder of both local and regional problems
By Chris Moghtader and Ed Reed
The terrorist strike, and its response, ran for four days and led to an estimated 70 deaths
French intervention in Mali and insecurity in the Sahel have been pointed to as motivating factors
Algeria and Libya have responded with assurances of additional security forces for energy facilities
AfrOil 22 January 2013, Week 03 page 3
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Insecurity
The attack has been widely linked to a
French decision to send a military
intervention force to help resolve the
ongoing crisis in northern Mali, which
began on January 11. The militants
themselves reportedly called for a French
withdrawal as one of their demands for
the release of hostages. However, given
the scale of the attack, at more than 1,000
km from Mali itself, it seems unlikely
that it could have been planned and
executed within such a short period.
There was no consensus from Algerian
officials as to where the attack had
originated from, although Libya and
Niger were also mentioned.
It seems likely the Algerians were
spurred into action by concerns that the
terrorists would escape with hostages
over the Libyan border, which is very
close to In Amenas. Once the decision
had been taken, Algerian Special Forces
would have prioritised killing the
assailants, over saving hostages. The
stark line taken by Algiers can be seen in
a statement by Algerian Communications
Minister Mohamed Said Belaid, who said
there would be “no negotiation, no
blackmail, no respite” for terrorists.
The apparent mastermind of the attack,
Belmokhtar, is well known throughout
the region. A former member of al-Qaeda
in the Islamic Maghreb (AQIM), he is
renowned as much for banditry and
smuggling as he is for his terrorist
activities. He has been implicated in
numerous kidnappings of foreigners
throughout the region in recent years,
including a Canadian diplomat, Robert
Fowler, who was held for around four
months.
Regardless of whether or not the attack
can be credibly linked to the intervention
in Mali, it is symptomatic of wider
insecurity throughout the Sahel. Algerian
officials had warned of a growing
terrorist threat in the south of the country
throughout 2012, particularly following a
suicide attack in the southern oasis city
of Tamanrasset in March.
Insecurity in neighbouring Mali, Niger
and Libya, combined with weak to non-
existent border control throughout the
region, while a deluge of arms and
military equipment left over from the
Libyan conflict, have left Algeria
increasingly exposed.
Attacks against the energy industry
have been only sporadic in recent years
in Algeria. Where they have occurred,
they have tended to target vehicles
belonging to oil and gas companies,
rather than the installations themselves. It
is not clear whether this latest attack is
the beginning of a new trend, or whether
it evolved from an attack on a convoy
into something more serious.
Cameron, speaking to the UK’s
Parliament on January 21, said the
international terrorist threat was shifting
away from Afghanistan and Pakistan
towards Yemen, Somalia and parts of
North Africa.
In Amenas
The four wet gas fields that make up the
east Algerian development are operated
by a joint venture involving BP,
Sonatrach and Statoil. Contractors from
Japan’s JGC Corporation were also at the
facility and it is thought that nine of the
hostages killed were Japanese.
Algerian Minister of Energy and Mines
Youcef Yousfi told the state’s
information agency, APS, on January 21
that damage to the plant was minor and
that production would restart in two days.
However, there were reports that the
terrorists had laid mines around the
facility and BP declined to comment on
timing.
In Amenas produces around 9 billion
cubic metres per year of gas – around
10% of the country’s total – and 60,000
barrels per day of liquids, said JBC
Energy.
The attack “may be a sign that the
political stability of the Islamic country
is on a downswing,” JBC continued,
noting also that gas exports from Algeria
to Europe had declined in 2012 by 4%.
“The country is therefore the latest
candidate to be added to the long list of
countries at risk from political turmoil in
the MENA region and could underpin the
geopolitical risk premium further.”
Algerian exports to Italy fell to 60-65
million cubic metres on January 17, from
normal levels of 70-75 mcm per day,
Reuters reported.
RBC Capital markets said BP and
Statoil both had working interest stakes
of 46% in In Amenas, while Sonatrach
held the remaining 8%. “Work is
presently taking place on an expansion
project which was due to [be] completed
in [the second half of 2013]. We have no
incremental volumes in 2013, then 6,000
bpd and 17,000 bpd each in 2014 and
2015.”
More caution
Given that details are still emerging from
the Tigantourine assault, it would be
premature to leap to conclusions.
However, it seems likely that in the near
term, companies will be far more
cautious in making development plans in
remote areas of the Sahel – and require
more assurances from local forces,
whether in Algeria or Libya.
Algeria intends to hold a bid round
later this year and is in the process of
changing its hydrocarbon laws to make
the country more attractive to bidders.
This terrorist assault may increase the
pressure on Algiers to strike a more
conciliatory tone with foreign companies.
There has been some suggestion that
companies will use more local workers,
reducing their expatriate exposure. This
is an appealing idea, and will go down
well with local communities, but the
skills required are in short supply so may
not be practical.
Libya too will face pressure to increase
security at its energy installations as,
following the attack on the US consulate
in Benghazi in September 2012, concern
is running high.
COMMENTARY
AfrOil 22 January 2013, Week 03 page 4
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
A recovery in Nigeria’s crude oil exports
was dealt another blow last week with
news that shipments of the country’s Qua
Iboe grade would suffer delays in
February.
The news comes just a month after
ExxonMobil lifted a force majeure – a
clause which means a company is not
able to meet contractual obligations
because of events beyond its control – on
Qua Iboe, which is Nigeria’s main export
grade. Disruptions to Qua Iboe loadings
mean that three out of 11 cargoes that
were initially scheduled to load in
February will now be pushed back into
March, trade sources told the Energy
Tribune.
Although it is not clear why the delay
has occurred, one trader said that
February’s production forecast was
simply overoptimistic. “It’s just an
adjustment of production, [which] was
forecast too optimistic,” he said.
Nigeria’s oil production had been
expected to rise around 10% in February
after recovering from the floods of late
2012.
Italy’s Eni also lifted its force majeure
on Nigerian oil exports last week, raising
hopes that an end was in sight for
Nigeria’s supply problems. “We have
removed the force majeure on Brass,” an
Eni spokesman said on January 16.
Eni had first declared force majeure in
early November and traders had reported
delays of more than a month for the
Brass River grade, which typically
accounts for around 5% of Nigeria’s total
oil exports.
Royal Dutch Shell also declared three
force majeures on its Nigerian oil and gas
output in the fourth quarter of last year.
The company has been critical of the
Nigerian government’s failure to stem
endemic oil theft in the country – which
has also been a factor behind production
shortfalls and export delays.
Pipe problems
Although Shell itself has “made great
progress over the last two years in terms
of actually dealing with operational
issues, and in cleaning up previous years’
sabotage and operational spill sites” in
Nigeria, at the same time the “stealing
and sabotage of crude oil has
intensified,” Shell’s CEO, Peter Voser,
said in a December statement posted on
the company’s website.
“The overall security situation in 2012
has worsened,” he said. “Shell alone
cannot solve these issues. It needs
concerted government action to reduce
[the] theft of crude.”
Nigerian National Petroleum
Corporation (NNPC) has lost around 165
billion nairas (US$1.06 billion) over the
past four years to oil product theft and
pipeline vandalism, one of its
subsidiaries, the Pipelines and Products
Marketing Company (PPMC), said on
January 17.
“We are talking to legislators at the
National Assembly on proper sanction
and prosecution of people that engage in
oil theft and pipeline vandalism,” said
PPMC’s managing director, Prince
Haruna Momoh. “We believe that
between now and the end of June, we
should be able to come up with a
solution.”
“We at the NNPC are still keeping the
mandatory 30-day national stock reserve,
as directed by the Minister of Petroleum
Resources, Diezani Alison-Madueke, but
we always have challenges because of
the rate at which pipelines are being
vandalised, practically on a daily basis,”
The Nation quoted him as saying.
Pirates
It is not only onshore installations and
pipelines that are being targeted by
thieves. Nigerian authorities last week
charged 23 people with oil theft after the
navy seized two ships carrying allegedly
stolen crude oil late last year.
Nine Nigerians and two Ghanaians
were arrested when the navy intercepted
the Mount Eve vessel, which was
carrying 16,500 gallons (75,000 litres) of
refined fuel. A week later, the navy
arrested 10 Indians and four Nigerians
aboard the Ashkay vessel, which was
carrying 35,000 gallons (161,000 litres)
of allegedly stolen fuel.
The number of attacks on oil tankers
offshore Nigeria nearly doubled in 2012,
from 11 in 2011. In December 2012, 11
attacks were reported on ships in the Gulf
of Guinea, most of them involved in the
oil business, UPI reported.
Piracy off West Africa “is reaching
dangerous proportions,” the International
Maritime Bureau (IMB) said in October
2012. “It’s a serious problem,” said IMB
director Pottengal Mukundan. “The
pirates are getting quite audacious, with
increasing levels of violence being used.”
Corruption is also a perennial problem.
In October last year, a leaked report
commissioned by the government alleged
mismanagement of gas deals had cost the
Nigerian state US$8.6 billion between
2009 and 2011.
COMMENTARY
Nigeria takes Qua Iboe crunch The same old problems continue to curb Nigerian production hopes, while piracy figures
mount
By Helen Castell
Qua Iboe exports in February will come in below previous expectations
Shell has complained of mounting pipeline insecurity, which has restricted exports
Production is returning after the floods of November
AfrOil 22 January 2013, Week 03 page 5
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
That said, Nigeria’s oil exports have
been recovering slowly since the flood
waters receded. In December, a pick-up
in oil exports helped Nigeria’s state
revenue rebound 2% to 581 billion nairas
(US$3.7 billion).
The lift in oil exports occurred “even
as crude-oil production and lifting
encountered several disruptions as a
result of increased bunkering activities
and ongoing maintenance” on pipelines
and other facilities, Nigeria’s accountant
general, Jonah Otunla, said last week,
without releasing specific oil export
figures.
Plans for the construction of a second
products pipeline linking Kenya’s port
city of Mombasa to the capital, Nairobi,
moved forward last week when
invitations went out for procurement,
construction, testing and commissioning
of the project.
The new US$300 million pipeline,
which in future could be extended to
Kampala in Uganda, will replace the
current one whose 30-year lifespan has
ended, according to a report by Reuters.
The undertaking comes after an earlier
attempt to extend the current pipeline,
terminating in Eldoret town in western
Kenya to Kampala, under a contract with
Tamoil East Africa was put off.
Tamoil was contracted to re-design the
pipeline to move fuel in both directions
and also expand it from six inches (152
mm) to 10 inches (254 mm), a plan that
drove up the cost of the project from the
initial US$80 million to US$300 million.
Last week, Kenya Pipeline Company
(KPC) called for expressions of interest
(EOI) in the design of the 450-km
pipeline, as the country seeks to ease the
transportation of fuel from Mombasa,
providing an alternative to the present
system of unreliable trucking.
Submissions must be delivered to KPC
by February 28.
“The new pipeline is designed to meet
petroleum products demand for the
eastern Africa region up to the year
2044,” KPC said in a statement.
Much of the oil trucked from
Mombasa is destined for landlocked
Uganda, Rwanda and Burundi. However,
the challenges of poor roads have led to
delays in the delivery of fuel, creating
supply gaps in the three economies.
KPC runs a pipeline from Mombasa to
Nairobi, which extends to Nakuru, before
branching to Eldoret, in Kisumu.
Those companies hoping to take part
need to meet a number of KPC’s
requirements, including 10 years of
experience on similar work and audited
reports for the last five years.
A South Sudanese diplomat has said his
country remains eager to build an oil
export pipeline to Kenya.
South Sudan’s ambassador to Nairobi,
Ngurduong Majok, indicated in a recent
interview with The EastAfrican that Juba
still saw the proposed link as the best
long-term option for moving crude to
market. South Sudan intends to construct
the 2,000-km pipeline regardless of the
outcome of negotiations with Khartoum,
he said.
South Sudanese officials began talks
with Kenya on the project in the first half
of 2012, saying that they hoped to begin
construction as early as June, with work
wrapping up about 18 months later.
However, the two sides have yet to reach
agreement.
The ambassador told The EastAfrican
that Juba and Nairobi were still in talks
on the project but did not say when a deal
might be concluded. The US$5-6 billion
price tag for building the pipeline, which
will run from Juba to Lamu, would be
covered by revenues earned from oil
exports, the newspaper noted.
In the meantime, South Sudan remains
dependent on an existing export line that
runs through Sudan. That pipe has not
carried any South Sudanese crude during
the last 12 months, owing to a dispute
between Khartoum and Juba over transit
fees. In turn, the idling of the pipeline
has forced South Sudan to freeze oil
production.
The two sides signed a deal on transit
shipments in late September, saying they
hoped to see crude flows resume within a
few months.
COMMENTARY
PIPELINES & TRANSPORT
Tender issued for
Kenya’s new pipeline
South Sudan remains keen
on pipeline to Kenya
AfrOil 22 January 2013, Week 03 page 6
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Several weeks ago, the leaders of
Sudan and South Sudan reiterated their
commitment to upholding the deal.
However, South Sudan has yet to bring
its fields back on line, partly as a result
of continued clashes with Sudan over
security issues and jurisdiction over the
Abyei region.
Trucking option
Meanwhile, a group of US senators,
during a visit to Juba last week, said they
did not expect Khartoum to uphold its
share of commitments under the
agreement signed in September 2012. As
such, South Sudan should proceed with
plans for moving oil to market by truck,
the senators suggested.
They said the US government would
support this scheme, which was mooted
last year by South Sudanese Oil Minister
Stephen Dhieu Dau. The minister said
last May that Juba wanted to use tanker
trucks to export at least 35,000 barrels
per day – equivalent to 10% of the
country’s production – via Ethiopia.
The Sudan Tribune noted, though, that
existing roads in South Sudan and
Ethiopia could not withstand heavy
traffic from tanker trucks. New roads will
have to be built to facilitate large-scale
oil exports, it said.
Pirate attacks have fallen to a five-year
low around the world, mainly as a result
of successful action against Somali
pirates, but the waters off the coast of
East Africa remain the world’s most
dangerous, while risk is increasing
offshore West Africa.
Assaults in Somalia and the Gulf of
Aden – reported by 75 ships in 2012,
compared with 237 in 2011 – accounted
for 25% of incidents worldwide last year,
according to a global piracy report
published by the International Maritime
Bureau (IMB) on January 16.
The international watchdog said the
number of Somali hijackings had halved
from 28 in 2011 to 14 last year, largely
because of “pre-emptive strikes and
robust action against mother ships” by
several navies and the work of private
armed security teams, plus the
application of “best management
practices” by ships’ crews.
However, it warned that the threat and
capability of heavily armed Somali
pirates remained strong and that a
continued naval presence was essential to
combating buccaneers. “This progress
could easily be reversed if naval vessels
were withdrawn from the area,” said the
IMB’s director, Captain Pottengal
Mukundan. IMB also said piracy was on
the increase in West Africa’s Gulf of
Guinea, where there is currently no
engagement of international navies for
counter-piracy activity. It reported 58
incidents in the region during 2012,
compared with a total of 46 incidents in
the area during 2011. Last year there
were 10 hijackings and 207 crew
members taken hostage, with the use of
guns during an attack having been
reported on at least 37 occasions.
Attacks in Nigerian waters reached 27
last year, compared with 10 in 2011.
Togo experienced 15 attacks, up from
five in 2011, while Cote d'Ivoire
recorded an increase from one pirate
assault in 2011 to five last year.
“Now, we're seeing more abductions of
sailors from oilfield supply vessels off
Nigeria, and tankers being hijacked as far
west as Abidjan. This type of violent
maritime criminality shows no sign of
decreasing any time soon,” according to
an intelligence analyst from security firm
AKE, quoted by Reuters.
Only Benin reported a reduction in
piracy, with its figures down from 20 in
2011 to two events last year, IMB said.
Anglo-French independent Perenco has
signed a contract with Cameroon’s state-
run Societe Nationale des Hydrocarbures
(SNH) to drill two wells in the Atlantic
coastal Rio del Rey Basin’s Moabi block.
According to the agreement, said
Perenco on January 15, it will explore the
offshore block, which covers 137.13
square km.
Perenco will undertake seismic data
collection on the area for three years and
drill two wells to a minimum depth of
1,100 metres. Depending on the results
obtained, the contract could be extended
for another two years.
PIPELINES & TRANSPORT
Piracy threat increasing
in West Africa
INVESTMENT
Perenco signs Cameroon
exploration contract
AfrOil 22 January 2013, Week 03 page 7
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Perenco is investing 17.5 billion CFA
francs (US$35.5 million) in this first
phase of the project.
There are options for two further
exploration phases, both running for two
years each, with a well required to be
drilled in each additional period.
Cameroon raised about 477 billion
CFA Francs (US$950 million) from oil
production over the first nine months of
2012, up 9.3% on the same period in
2011, according to an official statement
handed to reporters in the capital
Yaounde.
One of the most recent discoveries in
Cameroon was made by Chinese-owned
Addax Petroleum, which said in October
that it had discovered new offshore oil
and gas reserves in Bakassi, at its
Padoux-IX exploration well in its Iroko
block in the country’s southwest region.
SNH is working with Addax Petroleum
in several blocks in the oil-rich Rio del
Rey Basin, where the Bakassi peninsula
is situated.
In the gas sector, Scotland’s Bowleven
has announced its intention to begin
production at its offshore Sapele wells by
the end of 2015 or 2016.
Eni’s first appraisal well in Ghana’s
Offshore Cape Three Points (OCTP)
block has confirmed the commerciality
of the Sankofa discovery. This is
estimated to contain around 450 million
barrels of oil in place, with recoverable
resources of up to 150 million barrels
including gas, associated liquids and oil.
Sankofa East 2A encountered 23
metres of gas and condensate
gross pay – of which there were
17 net metres – and 76 metres of
gross oil pay – with 32 net metres
– in good Cretaceous sands, Eni
said in a statement on January 17.
Data acquisition has confirmed
hydraulic communication in the
oil-prone reservoir between the
discovery and the appraisal wells,
the Italian company said. More
work is under way on planning the
development of the reserves.
The Sankofa East 2A appraisal
well reached a total depth of 4,050
metres, in 990 metres of water in
the OCTP block, in the Tano
Basin, approximately 50 km from
the Ghanaian coastline. It was
drilled 8 km southwest of the
Sankofa East X1 discovery well,
which contains the same reservoir
sands and lies around 38 km east
of Ghana’s Jubilee field.
Engineering studies to develop and
ensure commercialisation of the block
are also ongoing under the terms of a
Memorandum of Understanding (MoU)
recently signed by Eni, Vitol and Ghana
National Petroleum Corporation (GNPC)
with the Ghanaian Ministry of Energy.
The MoU has a particular focus on the
domestic gas market, with Eni and its
joint venture partners playing a
prominent role.
Eni’s subsidiary Eni Ghana
Exploration and Production is the
operator of the block with a stake of
47.2%. Vitol Upstream Ghana holds a
37.8% interest, while the remaining 15%
belongs to GNPC, with an option for an
additional 5% share in the block.
INVESTMENT
PERFORMANCE
Eni confirms Sankofa
find with appraisal well
AfrOil 22 January 2013, Week 03 page 8
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Somaliland, which lies along the
northern side of the Horn of Africa, and
which declared its independence from
Somalia in 1991, hopes to have a future
based partially on hydrocarbon
development.
Anglo-Turkish Genel Energy acquired
two production-sharing agreements
(PSAs) in 2012 for five onshore blocks in
the country and is expected to drill in
2014.
The breakaway state’s Minister for
Mining, Energy and Water Hussein Abdi
Dualeh recently attended an energy
conference in Abu Dhabi to acquaint the
energy industry with his country’s plans.
“In light of its geographical position,
long coastline and deep-sea ports,
Somaliland is strategically positioned to
be one of East Africa's major energy
supply bases and play a key role in the
region’s energy future,” he said,
according to the Somaliland Sun
newspaper.
In August 2012, Genel acquired a 75%
interest in two blocks in partnership with
the East Africa Resource Group, which
holds the remaining 25%. In November,
Genel farmed in to a 50% stake in three
more blocks that form the Odewayne
PSA with partners Jacka Resources and
Petrosoma, which hold 30% and 20%
stakes respectively. The deal called for
Genel to carry its partners through
Phases 3 and 4 of the PSA, which include
gathering 1,500 km of 2-D seismic and
the drilling of one exploration well.
According to the Genel website, the
area of Somaliland that it is exploring
could hold 1 billion barrels of oil.
Meanwhile, in neighbouring Puntland,
a semi-autonomous region of Somalia,
Horn Petroleum drilled two wells last
year that proved to be dry.
Horn said last year it would continue
with its exploration programme in
Puntland. The company and its partners,
Range Resources and Red Emperor, said
they would enter the next exploration
phase in the Nugaal and Dharoor Valley
PSAs. Those agreements call for one
exploration well to be drilled within a
three-year period.
South Africa’s hopes to replicate the
North American shale gas boom are
unlikely to cut prices by the same extent
and will take seven to 10 years to reach
commercial levels, according to a recent
conference call by Frost & Sullivan
experts.
A South African industry analyst at the
consultants, Dominic Goncalves, said the
main difficulty in exploiting the
country’s shale gas reserves in the Karoo
Basin would be environmental concerns.
The area is highly prized and opposition
to hydraulic fracturing in particular is
notable.
The moratorium on the industry was
lifted in September 2012, Goncalves
said, but “fracking is still not currently
permitted.” As such, industry is caught in
a “Catch-22” situation, the analyst said,
where it cannot prove South African
shale gas is a valuable, exploitable
resource.
A number of companies are working
on shale in the country, although South
Africa’s Sasol pulled out during the
moratorium.
US figures have put South Africa’s
shale gas resource at 13.7 trillion cubic
metres but this is likely to fall once more
information is established, with the
analyst citing the example of Poland,
where figures were reduced by around
85% after initial drilling results.
Goncalves said the likely figure for
South Africa would probably be 283
billion cubic metres to 1.42 tcm, which is
“still significant.”
The country needs to press ahead with
finding new sources of power feedstock,
as it is experiencing fuel shortages.
“There is no way to know the price” of
shale gas production, he continued,
although suggesting that US$9-16 per
million British thermal units (US$249-
440 per 1,000 cubic metres) might be
reasonable, while allowing it could be as
low as US$6 per million Btu (US$166
per 1,000 cubic metres).
Fracking in the Karoo poses particular
difficulties owing to the region’s limited
water resources, with extremely low
rainfall. “A huge amount of water would
need to be transported,” Goncalves said,
in order to provide the 2-30 million litres
of water per well needed.
Unlike Europe or the US, South Africa
has only a limited amount of
infrastructure so substantial investments
would be needed in pipelines and a
market would have to be created.
Statistics from the US suggest the
possibility of water contamination is very
low, but the Frost analyst said there was
“no element of certainty in fracking.
Accidents can happen.”
PERFORMANCE
Somaliland aspires to oil future
Frost: South African
shale gas years away
AfrOil 22 January 2013, Week 03 page 9
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All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Griffiths Energy International has been
charged with foreign corruption by the
Canadian authorities, but the company
said it was confident there would be a
“near-term negotiated resolution.” The
company was charged with one count
under Section 3(1)(b) of Canada’s
Corruption of Foreign Public Officials
Act by the Public Prosecution Service of
Canada (PPSC).
Griffiths’ notified US and Canadian
authorities in November 2011, after
discovering contracts signed by its
previous management with two
companies owned and controlled by a
“foreign public official and his spouse”
between August 2009 and February
2011. The new team at Griffiths was
appointed between July and September
2011.
The company began an internal
investigation in November 2011 and
shared the results with authorities in May
2012.
“We've worked extensively with the
Crown and the RCMP throughout and we
anticipate a negotiated resolution in the
very near future,” said Griffiths’
president and CEO, Gary Guidry. “We
can't say any more at this time, but will
commit to providing more details as soon
as a resolution is approved by the Court
and made public.”
According to previous statements,
Griffiths paid around US$8.5 million on
consulting agreements on entering Chad
and around US$2 million of this amount
was considered to be potentially
problematic. Fees paid to consultants are
often flagged by transparency
campaigners as open to abuse.
Griffiths filed for an IPO in November
2011 but dropped these plans in February
the following year, saying it had raised
cash privately. The company said it had
spudded its first development well on the
Badila field at the end of November last
year.
The company signed up the Mangara-
Badila production-sharing contract (PSC)
in March 2011 and the Doseo-Borogop
PSC in January 2011. Griffiths signed a
preliminary deal with Glencore
International last year under which the
trader would take a 25% stake in the
Mangara and Badila developments.
Australia-based Pura Vida Energy has
taken an 80% stake in the Nkembe
block, offshore Gabon. The company
will be the operator and will carry the
remainder of the equity on behalf of
Gabon. Pura Vida announced the deal
on January 15, after signing the
production-sharing contract (PSC) in
Libreville on January 11.
The block covers 1,210 square km,
with water depths of 50 to 500 metres,
in the Gabon Basin. Nkembe is close to
a number of producing oilfields, Pura
Vida said.
The company’s technical director,
David Ormerod, said the award was an
important step in building a
“diversified portfolio of high-quality
exploration assets.
POLICY
Griffiths charged with
Chadian corruption
PROJECTS & COMPANIES
Pura Vida signs up Gabonese block
AfrOil 22 January 2013, Week 03 page 10
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www.newsbase.com Edited by Ed Reed
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Pura Vida has taken a high equity
position, demonstrating our confidence in
this project and the belief that sound
technical work will generate value by
proving the potential of these plays.”
Pura Vida recently struck a deal to
farm out a stake in its Moroccan block,
Mazagan, to the US’ Plains Exploration
and Production (PXP). Under the
Mazagan deal, PXP agreed to make a
US$15 million upfront cash payment and
provide US$215 million of funding for
work on the block.
A note from Hartleys, which has also
acted as Pura Vida’s corporate advisor,
predicted the company would adopt a
similar strategy to its new Gabon block,
with a “farmed-out carry on at least one
well.”
The Australian company noted recent
interest in subsalt plays in Gabon and
said it would be investigating these on
Nkembe. Tudor Pickering Holt has
described the country as being the most
appealing in West Africa for pre-salt
work, based on its potential resources
and contract terms.
Pura Vida is to buy 845 square km of
3-D seismic data from WesternGeco.
Under the first phase, which will run for
four years, the company will acquire 550
square km of Multi Azimuth 3-D seismic
and drill an exploration well. Seismic
work is expected to begin early in the
second half of this year.
The second phase will involve another
550 km of 3-D seismic and the drilling of
two exploration wells.
TGS-NOPEC Geophysical has started
acquiring a 3-D multi-client survey over
up to 7,800 square km of acreage in the
Harper Basin, offshore Liberia. The
survey, known as Sunfish, “provides
excellent data coverage for the source-
prone, syn-rift and early post-rift
sequences in this highly prospective area
offshore Liberia,” said TGS on January
16.
“TGS has been active in acquiring data
over the West Africa Transform margin
for the past decade and this survey
demonstrates TGS’ ongoing commitment
to grow the seismic data library in
Africa,” said TGS’ senior vice president
for the eastern hemisphere, Stein Ove
Isaksen.
TGS is chartering the 12-streamer
Polarcus Asima for the survey, which is
supported by industry funding. The
charter will last for approximately six
months. Data processing will be
performed by TGS and will be available
to clients in the third quarter of 2013,
prior to Liberia’s 2013 bid round.
Liberian President Ellen Johnson
Sirleaf has been active in courting
investments in the country’s oil and
natural gas sector, as it recovers
politically and economically from years
of civil war. The Liberian government
has said that more than US$16 billion has
been invested in natural resources, such
as oil, during the past six years.
Inroads have been made by Australia’s
African Petroleum Corporation, which
announced recently that it had started
drilling at its Bee Eater-1 well offshore
Liberia, about 10 km from what the
company said was a proven high-quality
reservoir. The Australian company said
the well was meant to test the westward
extension of the reservoir. African
Petroleum’s CEO, Karl Thompson, said
there were plans for a “very active
exploration programme” in Liberia for
2013.
A second well is planned in the
offshore region once the Bee Eater-1
well has been completed. The
recoverable resources for the Bee Eater
area are estimated by the company at
more than 840 million barrels of oil.
PROJECTS & COMPANIES
Liberian 3-D seismic under way
AfrOil 22 January 2013, Week 03 page 11
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www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
The following news items are sourced
from local and international news
sources. NewsBase is not responsible for
the contents of the stories and gives no
warranty for their factual accuracy.
North Africa
Algeria crisis triggers Libya, Egypt oil security review
Libya rushed to beef up security at its
oilfields and energy firms were
considering similar measures in Egypt as
Islamist militants threatened to attack
new installations in North Africa.
Hundreds of workers were evacuated
from a number of Algerian production
sites on the border with Libya to safer
places in the country's centre and
industry experts said that could
ultimately lead to lower oil and gas
production from the OPEC member state.
Libya and Algeria are Africa's third and
fourth largest oil producers with Libya
also the largest oil reserves holder on the
continent. Together with Egypt they are
important gas suppliers to Europe and the
budgets of all three countries are heavily
dependent on energy revenues. Libya's
oil protection force, affiliated with the
defense ministry, said there had been no
reports of incursions into its oilfields,
where more guards and military personal
had been deployed and security patrols
intensified inside and around the sites
around the clock. “Due to events in the
region, the Petroleum Faculty Guard has
taken a series of actions to enhance and
reinforce the protection of oilfields,
facilities and employees in the western
and southern regions of Libya,” it said. A
Western security adviser working in
Libya said by telephone he was not sure
that would immediately boost security,
since the oil protection force, set up after
the overthrow of Muammar Gaddafi in
2011, was at an “embryonic stage.”
Libya's National Oil Corporation
chairman Nuri Berruien confirmed
increased security measures at fields on
the Algerian border.
REUTERS, January 18, 2013
Egypt discovers oil and gas in Western Desert
Egypt General Petroleum Co. (EGPC)
made an oil and natural gas discovery in
the Western Desert and plans to drill nine
wells to develop the concession, the Oil
Ministry said January 14. The find has
reserves estimated at about 16.5 billion
cubic feet of gas and 48 million barrels
of crude, the Cairo-based ministry said in
an email. The company and Kuwait
Energy Co. made two joint discoveries in
the same area, the ministry said.
BLOOMBERG, January 14, 2013
MENA Hydrocarbons notes Lagia progress
MENA Hydrocarbons is pleased to
announce the following operational
update. Activities on the Company's
100% owned Lagia oil field in Egypt
have re-commenced. A new progressive
cavity pump (PCP) has been installed in
the Lagia well 9 which has produced
over the last 12 days at an average
stabilised rate of 90 barrels per day of
approximately 16 degree API oil gravity.
This PCP replaces the original sucker rod
pump that was previously installed in
Lagia 9. MENA has also completed
installation of required production
facilities in the field with three oil
storage tanks, a water tank, and a 500
barrel fuel tank and has connected all
producing wells with flow lines. Lagia
wells 8 and 10, which were also drilled in
2012 and designed for steam injection,
will be placed on production following
an initial steam injection cycle to begin
next month. The Company has signed an
agreement with an experienced Middle
East steam operator, Steamtech and Co.,
to provide steam injection equipment and
personnel to start the steam injection
operation in the field. Given the quality
of sandstone reservoir and oil gravity, it
is expected that production volumes from
the wells will be significantly improved.
The two remaining production wells in
the field, Lagia 6 and 7, were drilled by a
previous operator and were not
completed with thermal casing, however,
their flow rates are expected to increase
from their current 22 barrels per day with
steam injection into the other nearby
wells.
MENA HYDROCARBONS,
January 15, 2013
Tension increases in Libya
Unconfirmed reports indicated that
hostile groups have threatened attacks on
foreign targets in Libya in response to
ongoing violence in Mali. In Benghazi,
unconfirmed reports indicate that
security forces in the city intercepted a
number of vehicle-borne improvised
explosive devices (VBIEDs) at the
airport before they were detonated.
Unidentified militants opened fire on the
vehicle of Italy's consul, although he was
not injured in the attack. Meanwhile, two
police officers were killed in separate
attacks in the city on January 15 and 16.
Saif al-Islam Gaddafi appeared in court
in Zintan on January 17 to face charges
related to a visit by an International
Criminal Court (ICC) lawyer in 2012.
AKE, January 18, 2013
Major Libyan oil terminal remains closed, exports delayed
The Zueitina oil terminal in Libya
remains shut, almost a month after
demonstrators forced the closure of the
major oil exporting hub, a shipping agent
told Dow Jones Newswires Thursday.
The closure has caused severe
disruptions to exports of oil from the
North African country, traders have said.
One trader said last week that five
cargoes for January loading had been
dropped, three cargoes of Bu Attifel oil
and two cargoes of Zueitina oil. “It's
affecting the market really badly,” he
said. “Basically January liftings were
cancelled.” Oil installations have been
focal points for demonstrations following
elections in July.
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 12
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
What is happening in “Zueitina is in line
with what's been going on elsewhere;
there's been quite a lot of protests at oil
terminals throughout the country over the
last three months,” said Alan Fraser, risk
consultant at Ake security in an interview
last week. “Locals are trying to pressure
the government and oil ministry into
giving more people in the local
community jobs,” he said. In 2011, a
civil war that completely halted oil
exports from the OPEC member rocked
the markets and contributed to soaring
prices.
DOW JONES NEWSWIRES,
January 17, 2013
Chad's SHT seeks Sudan oil co-operation
The head of the projects unit in Chad's
Societe Des Hydrocarbures du Tchad
(SHT) Eng. Al-Mahdi Mohamed Gamar
said his country is participating in the
international trade fair of Khartoum and
the objective of their participation is to
benefit from Sudan's experience in
indigenising the oil industry and striking
agreements with Sudanese oil companies.
Sudan and Chad signed a protocol to
promote co-operation in oil, the deal won
strong support from Chadian President
Idriss Deby who is seeking strong
partnerships with African countries. He
said Chad entered the oil industry in
1972 through international companies
and is now making efforts to establish
local oil companies, stating that the
current oil output in Chad is 125,000
barrels from Kume oilfield, 60,000
additional barrels are expected to be
produced this year. Chad has an oil
export pipeline running across
Cameroon, which brought major benefits
for the economy and the population.
SUDAN VISION, January 19, 2013
Gulfsands completes Moroccan acquisition
Gulfsands Petroleum has completed a
US$19 million acquisition of Cabre
Maroc from its previous owner Caithness
Petroleum. Cabre Maroc is the operator
of an extensive portfolio of highly
prospective oil and gas exploration
licences and gas exploitation concessions
covering an area of approximately 5,100
square miles in northern Morocco. As
well as the US$19 million paid to secure
the acquisition, a financial guarantee of
US$5 million for the performance of
future exploration commitments on the
Rharb permits has also been provided to
ONHYM, the regulator of Morocco's oil
and gas sector. This guarantee will be
refunded immediately upon the
fulfillment of those commitments which
is expected to occur during the second
half of this year. Gulfsands said its
purchase of Cabre Maroc delivers to the
company a large, contiguous and highly
prospective acreage position in an area
with proven petroleum systems, revenues
from near term production, and multiple
drilling targets. It believes that there is
meaningful near term value potential
contained within the proven conventional
and shallow depth gas play in the Rharb
Centre permit, together with significant
exploration upside related to the fold and
thrust belt structures identified in the
adjacent Rharb Sud, Fes and Taounate
permits. Following completion of the
acquisition, Gulfsands and ONHYM
have become co-venturers in the Rharb
Centre and Rharb Sud permits, with
Gulfsands the operator of the joint
venture and following completion of
various post completion matters,
Gulfsands and Caithness Petroleum
through their respective wholly owned
subsidiaries will become co-venturers
with ONHYM in respect of the Fes and
Taounate Permits, with Gulfsands the
operator of both exploration joint
ventures.
RIGZONE, January 17, 2013
US calls on Kiir to transport oil by trucks
A delegation of US Senators have urged
President Salva Kiir Mayardit of South
Sudan to begin to truck his country's oil
to the international market through
Ethiopia instead of waiting for Khartoum
to honour its agreements on oil transport.
In May last year South Sudanese oil
minister Stephen Dhieu Dau told the
Wall Street Journal that his country plans
to use trucks to export at least 10% of its
oil production, 35,000 barrels per day,
through Djibouti after crossing Ethiopia
and the Kenyan maritime port of
Mombasa. The Senators who visited Juba
this week include Senator Steve Pearce
of New Mexico carrying the message
which urged Kiir to immediately
transport its oil by trucks, saying
Khartoum's act of stopping the flow of
oil “doesn't make sense.” The Senators,
who later gave statements to the state-
owned South Sudan Television (SSTV)
on Sunday, said their government would
support the new alternative initiative to
truck the oil to the international market in
order to generate significant amount of
revenues for the country's economy.
Senator Steve Pearce questioned the
logic why South Sudan with such huge
resources should suffer economically.
However, the country has the plan in
place already to alternatively truck the oil
through Ethiopia from Upper Nile state
but there was need to construct a
tarmacked road to connect Upper Nile
and Ethiopia which will be able to
withstand the frequent heavy traffic of
big oil trucks. The road to connect Upper
Nile state and Gambella region of
Ethiopia was one of the priority roads
such as that of Juba-Nimule road which
connects South Sudan and Uganda
because of their economic importance.
SUDAN TRIBUNE, January 14,
2013
South Sudan signs deals with Israeli companies
South Sudan says it has signed an
agreement with several Israeli oil
companies, a potentially significant
strategic move that will consolidate
Israel's relations with the fledgling, oil-
rich East African state.
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 13
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
South Sudan's petroleum and mining
minister, Stephen Dhieu Dau, announced
the oil deal last week after he returned
from a visit to Israel. The country will
also bolster Israeli moves to counter
Iranian inroads into the Red Sea and a
major gunrunning route from the
Revolutionary Guards' base at Bandar
Abbas in the Persian Gulf to the Gaza
Strip via Sudan. Dhieu Dau said
negotiations were ongoing with Israeli
companies - whom he did not identify -
seeking to invest in South Sudan. He
indicated that the government in Juba,
the ramshackle capital of the infant state,
hoped to export oil to Israel, but
observed that this could not happen
before March. He gave no indication how
the landlocked south would achieve this,
or what volume of crude would be
involved.
HAARETZ, January 20, 2013
Oil shutdown is correcting tax revenue shortfall in Unity State
The financial crisis caused by the year-
long oil shutdown in South Sudan is
forcing Unity state to address the
government's relaxed attitude to tax
collection, the state's minister of
agriculture and forestry told Sudan
Tribune. Samuel Lony Geng said Friday
that since South Sudan split from Sudan
in 2011 the process for collecting tax
revenues has remained “very weak.”
Following the oil shutdown a year ago
South Sudan's government has begun to
look into diversifying its economy and
how to increase revenues from other
avenues. In January last year South
Sudan accused Sudan of confiscating oil
entitlements worth about US$815
million. This was denied by Khartoum,
which said it had only taken some oil as
payment in kind for alleged unpaid
transit fees.
SUDAN TRIBUNE, January 20,
2013
Sudan to boost oil output to 150,000 bpd
Sudan plans to increase oil production to
at least 150,000 bpd this year thanks to
two new oilfields and a higher recovery
rate from existing fields, its oil minister
told a newspaper on Wednesday. The
African country, which currently pumps
136,000 bpd to 140,000 bpd, lost three-
quarters of its output when South Sudan
became independent in July 2011. The
drop in oil, its main source of budget and
trade revenues, has thrown its economy
into turmoil. Sudan had originally
planned to reach 180,000 bpd by the end
of the year, but its major Heglig oilfield
was damaged during a brief occupation
by South Sudan's army and border
fighting between the two countries in
April. The planned increase will be
driven partly by the al-Barsaya oilfield in
Block 17 in South Kordofan state, which
has started with an initial output of 6,000
bpd, State Oil Minister Faisal Hamad
told the al-Intibaha newspaper. Its output
will rise to between 10,000 bpd and
15,000 bpd this year, he estimated. He
did not name the companies involved in
the field, but Block 17 is operated by
state oil firm Sudapet and Ansan, a
company owned by Yemeni investors. A
second new oilfield in Hadida in Block 6
in the western Darfur region will increase
output to 20,000 bpd this year from
10,000 bpd currently, he said. Chinese-
owned Petro Energy E&O is operating
the field.
REUTERS, January 17, 2013
West Africa
Seadrill receives term extension for semi-submersible
Tullow has exercised its contractual
option to extend the contract for the
ultra-deepwater semi-submersible rig
West Leo by two years from May 2016
to May 2018. The West Leo is expected
to carry out operations in West Africa
until the end of its contract in May 2018.
The potential contract revenue for the
extension is estimated to approximately
US$450 million based on 97% utilisation
and includes a performance bonus
arrangement. This brings the total
estimated contract value to US$1.13
billion. In line with the omnibus
agreement terms and conditions between
Seadrill and Seadrill Partners, Seadrill is
obligated to offer the West Leo to
Seadrill Partners at a fair market price.
SEADRILL, January 16, 2013
Angola production reaches 1.78 million bpd
In December 2012 Angola’s oil
production totalled a daily average of
1.78 million barrels, which is slightly
lower than the target set by the
government of 1.8 million barrels per
day, according to Angolan weekly
newspaper Expansao. Although Angolan
production last year ranged between 1.65
and 1.75 million barrels per day, the
State Budget for 2013 outlines daily
production of 2 million barrels per day.
Expansao said it would be difficult to
meet that target and cited Oil Minister
Botelho de Vasconcelos, as saying that,
“to achieve 2 million barrels we will
have to work more and more.”
MACAUHUB, January 16, 2013
GE, GLS, strike partnership
US group General Electric (GE) has set
up a partnership with Angolan company
GLS Oil & Gas, of the GLS Holding
group to expand the services it offers to
the oil sector, in which it has operated for
over 50 years, Angolan state newspaper
Jornal de Angola reported. The
partnership, called GE-GLS Oil & Gas
Limitada, was made official on 31
December 2012 following a long
negotiation process. The US
multinational is represented in this
partnership by its subsidiary Nuovo
Pignone Angola, which is based in
Italy.
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 14
Copyright © 2013 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
The two sides agreed to set up a
partnership with share capital of 5 billion
kwanzas (US$52 million), and this will
initially involve construction in the Soyo
region of Zaire province of a factory to
produce underwater equipment and
providing services for oil and gas
exploration in Angola.
MACAUHUB, January 18, 2013
Glencore awards Plexus HP/HT work
Plexus Holdings has agreed to supply its
high pressure/high temperature (HP/HT)
POS-GRIP wellhead equipment, subject
to finalisation of the contract, to
Glencore Exploration Cameroon, the
leading integrated commodities producer
and marketer, for drilling a gas
exploration well offshore Cameroon. The
contract will have an estimated initial
value of circa GBP700,000. The order is
initially for one well with an option to
increase this to three. This is the first
contract Plexus will enter into with
Glencore, and it is anticipated that
revenues will commence in March 2013.
The exploration drilling programme will
utilise Plexus' POS-GRIP HP/HT 18-3/4”
15,000 psi wellhead equipment, and this
contract further strengthens the
Company's growing presence in West
Africa, and Cameroon in particular.
Plexus CEO Ben Van Bilderbeek said,
“This first contract to supply our POS-
GRIP wellhead equipment to Glencore
adds another blue chip operator to our
broad customer base, and provides
further evidence of Plexus' high standing
in the oil and gas industry as a supplier of
best in class equipment in terms of
operational performance and safety. In
the last few months, we have announced
contract wins in three continents, Asia,
Europe, and Africa, illustrating how our
patented technology continues to gain
traction worldwide.”
PLEXUS, January 15, 2013
Rialto updates CPR figures
In an investor presentation today, Rialto
Energy provided technical information
on the upgraded prospectivity identified
in Block CI-202 via the 2011-12 3-D
seismic acquisition and verified by the
CPR, with a total mean prospective
recoverable liquids and gas resource of
897 million barrels and 2,936 Bcf
respectively. It also gave details on
proposed 2013 work programme
including drilling with the Vantage
Sapphire Drilling Unit, an overview of
the revised development concept and
updated Contingent Resource for the
Gazelle Field; and information on the
recently acquired 12.5% interest in the
Accra Block, offshore Ghana.
RIALTO ENERGY, January 15,
2013
Tanker taken off Cote d’Ivoire
Gunmen seized a Nigerian-owned,
Panama-flagged tanker with 16 Nigerian
crew off Cote d’Ivoire's port of Abidjan
as it prepared to unload 5,000 tonnes of
fuel, port officials said on Monday.
Attacks on shipping are increasing in the
Gulf of Guinea – second only to the
waters around Somalia for piracy. But
the ITRI incident was only the second of
its kind in Ivorian waters, reports
Reuters. The tanker, named the ITRI and
owned by Lagos-based Brila Energy, was
commandeered on Thursday, Abidjan's
port authority said in a statement. Serge
Constant of Koda Maritime, an Ivorian
firm that was managing its stopover in
Cote d’Ivoire, said there has been no
contact with it since. Constant said the
ITRI's onboard tracking system had been
disabled. Abidjan port officials said the
ITRI's last known position was off the
coast of neighbouring Ghana. But
Ghanaian authorities said they had been
unable to locate the ITRI. “We now seem
to be back to square one. The
information is contradictory. We don't
know who's telling us the truth and who
isn't,” said Constant.
THIS DAY, January 21, 2013
NOCAL, African Petroleum counter over optimism
A joint press release from the National
Oil Company of Liberia (NOCAL) and
African Petroleum (AP) has indicated
that there has always been a harmonious
and cordial working relationship between
the two entities since oil blocks were
awarded, adding that they have aligned
objectives. According to the press
statement dated January 18, African
Petroleum officially announced the
commencement of the drilling of the Bee
Eater - 1 well in Block LVB-09 offshore
Liberia with semi-submersible ocean rig,
the Eirik Raude, which is meant to test
the potential of a westerly extension of
the Narina - 1 Turonian oil discovery.
NOCAL and African Petroleum jointly
clarified that “un-risked prospective
resources” need to be confirmed by
further technical work and additional
drilling, and shall not be considered as
“proven reserves of oil” ready to be
produced as was reported recently in the
press. Only further drilling can
demonstrate whether “resources” can
move to the “reserve” category and how
much commercial quantities will be
available for production. In addition, the
release stated that the current drilling
campaign is aimed at confirming the
nature of the geology and of the
reservoir, including its size and quality so
that further drilling and technical
programmes can be developed. The
shape of the programme, the number of
possible appraisal wells will be
dependent on the outcome of the Bee
Eater - 1 well.
THE INFORMER, January 21,
2013
French troops push towards Diabaly
Fighting continued in Mali on 19 and 20
January as French troops pushed towards
the contested town of Diabaly.
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 15
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
French troops are also conducting
operations near the towns of Sevare and
Konna. Reports suggest that some
insurgents are beginning to pull back,
retreating towards the mountainous areas
around Kidal in the north or blending in
to local populations. African troops
under the International Support Mission
in Mali (MISMA) are arriving with
Canadian and Russian planes now
deploying to assist with transportation.
AKE, January 21, 2013
Mali: Eni pulls out of Mali on poor prospecting outlook
Italian oil and gas group Eni has pulled
out of Mali because of the poor
prospecting outlook in the African
country, an Eni spokesman said on
Tuesday. “Eni has handed back licenses
it had because of the very low potential
of the area,” the spokesman said. The
licenses were handed back before the
recent outbreak of fighting in the
country, he said. France intervened in
Mali last week in an effort to block an
advance by rebel fighters whom the West
fear could use the West African nation as
a launching pad for international attacks.
Eni is the biggest foreign oil major in
Africa and has identified the continent as
one of its key drivers for growth. Eni, in
partnership with Algeria's state-owned
Sonatrach, said in 2006 it had acquired 5
exploration licenses in Mali's Taoudeni
Basin. Eni acquired a 50% participating
interest along with operatorship from
Baraka Mali Operations Limited, a
wholly owned subsidiary of the public
company Baraka Petroleum Limited, and
the private company Baraka Mali
Ventures Limited, which originally had
75% and 25% interest respectively in the
licences. Sonatrach acquired a 25%
interest in the licences through its
subsidiary Sipex. The blocks – Blocks 1,
2, 3, 4 & 9 – were located in the
Taoudeni Basin.
REUTERS, January 16, 2013
South Africa finds Nigerian militant guilty of terrorism
A South African court found suspected
Niger Delta militant leader Henry Okah
guilty of terrorism on Monday for
masterminding two car bombs that killed
at least 10 people in the Nigerian capital
at an independence day ceremony in
2010. Judge Neels Claassen said Okah,
who was accused of leading the militant
MEND group in Nigeria's oil-producing
Niger Delta, was found guilty on 13
counts ranging from conspiracy to
commit terrorism to detonating
explosives. “The evidence that was given
by his accomplices was not
contradicted,” Claassen told the court in
Johannesburg.
REUTERS, January 21, 2013
Nigeria boosts gas production, may revoke 132KV power contract
Federal government’s efforts to sustain
the existing improvement in power
supply received a boost at the weekend
with the unveiling of the Oredo
Integrated Gas Handling Facility (IGHF)
by the Minister of Petroleum Resources,
Diezani Alison-Madueke. It was at the
Nigerian Petroleum Development
Company (NPDC) operated Oredo field
in Edo State. The facility which currently
supplies 65 million metric standard cubic
feet per day (MMscfd) has ramped up
NPDC’s total gas production to a record
level of 400MMscfd with projected
growth to 600MMscfd by year end is
envisaged to significantly enhance the
Federal Government’s power supply
drive. At the ceremony, Alison-Madueke
noted that the project was in line with the
ongoing reform process in the industry
designed to vigorously ensure the
monetisation of the nation’s gas
endowment through gas-to-power and
other gas-related industrialisation.
However, the Federal Government has
threatened to revoke the contract for the
132KV power sub-station in Umuahia,
Abia State if the contractor handling the
project which was awarded to Valence
Nig, fails to rectify a fault with one of the
transformers meant for the facility. The
132KV Sub-Station, which was
commissioned despite the fact that one of
the transformers was faulty, has the
capacity to generate 64 MW of electricity
to Umuahia and its environs. At present,
it supplies only 33 MW of electricity due
to the fault.
GUARDIAN, January 20, 2013
Tackle oil spills, not illegal bunkering, Nigeria urged
Stakeholder Democratic Network (SDN)
a pressure group in the Niger Delta, has
frowned at the priority given by the
Federal Government to security against
crude oil theft to the detriment of the
needed environmental protection action
against oil spillages in the region. SDN
noted that though the activities of crude
oil thieves were reducing the economic
earnings of the nation, the excessive
focus and security actions against illegal
bunkering and crude oil theft was a poor
reflection of government's policy focus
and sign of neglect of the people of Niger
Delta by the Federal Government.
Country Co-ordinator of the group,
Inemo Samiama, in a statement, said
SDN's position was informed by the lack
of action on the KS Endeavour blowout
in 2012, off the Atlantic coast of
Koloama in Southern Ijaw Local
Government Area of Bayelsa State. “The
2012 incident is typical of a year in
which much was put in the public
domain about oil spills, especially those
from illegal refineries, but too little was
done to address the massive gap between
Nigeria's spill record and its capacity to
contain and clean up the spills.”
VANGUARD, January 18, 2013
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 16
Copyright © 2013 NewsBase Ltd.
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All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
Fuel-laden ships waiting to discharge at Lagos
There are 25 ships are waiting to
discharge petroleum products at the
various oil terminals within the Lagos
ports, the Nigerian Ports Authority
(NPA) has said. NPA, in its daily
'Shipping Position', made available to
newsmen on Wednesday in Lagos, said
that 14 of the ships would discharge
petrol, while three ships would discharge
diesel. It said that three ships would
discharge kerosene, three others would
discharge diesel, while ethanol and base
oil would be discharged by a ship each.
NPA reports that nine ships would
discharge rice, fresh fish, containers,
bulk sugar, and fertiliser. It added that 68
ships carrying different cargoes were
expected to sail into the ports between
Jan. 16 and Jan. 31.
VANGUARD, January 16, 2013
Nigeria's oil production stagnant for 40 years
Nigeria's oil production has remained
stagnant in the last 40 years, a report
from ExxonMobil has said. The
multinational company also said the
country's new deepwater production has
not buoyed its oil production during the
period under review. General Manager,
Operations Technical Geoscience, Mobil
Producing Nigeria Andrew Ejayeriese
said this during the presentation of
Mobil's Energy Outlook. He said in the
mid 1970s, Nigeria's oil production
reached a high of 2.2 million barrels per
day, mainly from onshore and shallow
water fields. He attributed the nation's
stagnant oil production to delays in
project approvals, restrictions in NNPC
funding and tortuous contract award
process which have slowed overall
reserve replacement and put pressure on
long-term production and growth. He
said: “We all know the story of the
impact of militancy and oil
bunkering/illegal refinery on the
maintenance and growth of Joint
Ventures volumes.”
DAILY TRUST, January 16, 2013
Afren issues trading statement
Afren’s CEO, Osman Shahenshah, said:
“2012 saw record production and
financial performance combined with
significant exploration success in Nigeria
and the Kurdistan region of Iraq. In 2013
we expect to further grow our reserves
base through a multi-well exploration
and appraisal drilling campaign in both
established and new basins, while
continuing to grow our production base.
We are financially well positioned with
robust cash flows, a strong balance sheet
and the necessary financial capacity and
flexibility to optimally explore and
develop our high quality portfolio of
growth opportunities well into the future.
There is much to look forward to in 2013
and beyond.” Net production at the
Company's assets during the full year
2012 (subject to final reconciliation) was
approximately 42,830 boepd, driven by
the year-on-year increase in net
production from the Ebok and Okoro
fields, offshore Nigeria. Notably during
the period, the Company commenced
production from the Okoro Field
Extension offshore Nigeria within nine
months of announcing the discovery and
also initiated production from the Barda
Rash field in the Kurdistan region of
Iraq. Total revenue for 2012 is expected
to be circa US$1.5 billion, compared
with US$597 million in 2011. The
increase in revenue is due to higher sales
volumes in 2012, principally due to
increased production from the Ebok and
Okoro fields offshore Nigeria together
with continued strength in commodity
prices. Oil and gas inventory at
December 31 2012 was approximately
US$36 million, representing
approximately 780,000 barrels net to
Afren. Hedges covering approximately
4.7 million barrels are in place for the
period January 1 2013 to June 30 2014,
providing minimum floor prices on these
volumes of between approximately
US$80-90 per barrel before costs. Capital
expenditure for 2012 amounted to
approximately US$520 million, in line
with guidance. Of this amount,
approximately US$315 million was
allocated to production and development
activities and approximately US$200
million to exploration and appraisal.
Based on current plans, capital
expenditure for 2013 is forecast to be
approximately US$620 million.
AFREN, January 21, 2013
Southern Africa
HRT takes Transocean rig
HRT Participacoes em Petroleo has
received the semi-submersible drilling-
rig Transocean-Marianas from
Transocean, offshore Ghana, at zero hour
of January 15, 2013. The rig will be in
transit to Namibian waters for the next
three weeks and, then, she will undergo
mandatory maintenance for the following
21 days, before starting HRT's drilling
campaign in Walvis and Orange
sedimentary basins. The Marianas is
expected to be on location to start drilling
the first well in Namibia, in the Wingat
Prospect, in Walvis basin at HRT's
Petroleum Exploration License-23 (Pel-
23) by the end of the first quarter. Wingat
is located in 1,000 metres of water and its
drilling operations are expected to last
approximately 60 days. “The arrival of
the Transocean-Marianas is excellent
news for HRT and GALP. She is arriving
within the planned timeframe to start one
of the most expected and exciting drilling
campaigns in Southern offshore West
Africa,” added the CEO, Marcio R.
Mello.
HRT, January 15, 2013
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 17
Copyright © 2013 NewsBase Ltd.
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All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
South Africa proposes law to give state share of oil projects
The South African government has
proposed changes to an energy law that
would enable it to secure free stakes in
all new oil- and gas-production projects.
The planned amendments to the Mineral
and Petroleum Resources Development
Act also aim to secure the state the right
to appoint two directors to the board of
companies operating new energy projects
and to abolish the petroleum industry
regulator. The changes, if approved by
Parliament, could have repercussions for
companies such as ExxonMobil and
Royal Dutch Shell. The law didn’t
specify what size stake the state would
take in new energy projects and it was
unclear how the provisions will work in
practice, said Peter Leon, the
Johannesburg-based head of Africa
mining and energy projects at law firm
Webber Wentzel. “These proposals are
extremely negative for the industry while
surrounding countries continue to benefit
from an exploration boom,” he said in an
e-mailed response to questions today.
“No obvious reason has been advanced
for the abolition of the Petroleum
Agency of South Africa and the transfer
of its all responsibilities to nine regional
managers of the Department of Mineral
Resources.”
BLOOMBERG, January 18, 2013
East Africa
Madagascar Oil sets out finance plan
Madagascar Oil has received a detailed
proposal for an alternative financing
transaction to the financing transaction
announced on December 18 and 20,
2012, details of which were set out in the
circular dated December 28.
Accordingly, the Board has adjourned
the Special General Meeting in order
fully to explore the proposed New
Financing Transaction, which is seeking
to raise gross proceeds of up to US$65
million from a pre-emptive issue of new
Common Shares. The Pre-Emptive Share
Issue would be undertaken at a
subscription price of US$0.29 per
Common Share and firm commitments
have been received in respect of
subscriptions in an amount of US$33.4
million (gross) from investors including a
number of existing institutional
Shareholders. Further discussions
between the Company and other
substantial Shareholders are continuing
with regard to their participation in the
New Financing Transaction and a further
announcement will be made as and when
appropriate.
MADAGASCAR OIL, January 15,
2013
Total makes new oil discovery in northern Uganda
Uganda’s oil prospects got a boost
following another discovery in the
northern part of the country. The
Commissioner for Petroleum, Ernest
Rubondo, confirmed the development but
declined to give details, pending what he
referred to as further analysis. “I can
confirm that we have discovered more oil
in Nwoya, but the details about the
volume and its commercial viability can
only be ready in about three weeks after
analysis,” Rubondo said in a telephone
interview with the Daily Monitor
yesterday. “But all indications suggest
that we have actually found more oil.
However we still need to wait for the
analysis,” he added. The area’s Member
of Parliament, Richard Todwong, had
told the Daily Monitor a week before
Christmas that it was already known that
Nwoya Constituency was laden with oil.
“About four to five wells has been
confirmed to have oil,” said the NRM
party-leaning MP. He also said a
presentation to the effect would be made
at the ongoing NRM retreat at
Kyankwanzi by the Energy Minister,
Irene Muloni. According to Rubondo,
Total is spearheading the operation that
has led to the new discovery.
DAILY MONITOR, January 16,
2013
Aminex signs loan deal
Aminex has agreed a US$8 million loan
facility with a fund managed by Argo
Capital Management (Cyprus), with
which the company has had a long-
standing relationship. The loan will
provide working capital, particularly for
the company's Tanzanian operations. The
company intends to repay the loan
facility from proceeds of the proposed
sale of its US assets which is currently
under way. In the event that the loan is
not repaid by the sale of US assets before
December 31 2013, Aminex has agreed
to raise additional equity to repay the
loan facility and to provide for the
company's ongoing operations. Aminex
chairman, Brian Hall, commented: “We
are very pleased to have completed this
financing which will provide valuable
working capital for the Company's
significant projects in Tanzania. These
include gas discoveries at Ntorya in the
onshore Ruvuma Basin and at Kiliwani
North, both of which are close to
Tanzania's proposed new gas trunk line,
due onstream in late 2014. A farm-out
process is currently under way to
introduce new partners into our Ruvuma
Basin joint venture in order to accelerate
activity and do justice to this large
concession. The campaign to sell the
Company's US assets has recently
recommenced.”
AMINEX, January 17, 2013
NEWS IN BRIEF
AfrOil 22 January 2013, Week 03 page 18
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
STATISTICS
AfrOil 22 January 2013, Week 03 page 19
Copyright © 2013 NewsBase Ltd.
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
STATISTICS
AfrOil 22 January 2013, Week 03 page 20
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
STATISTICS
AfrOil 22 January 2013, Week 03 page 21
Copyright © 2013 NewsBase Ltd.
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reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents
CONFERENCES
AfrOil 22 January 2013, Week 03 Back Page
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HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK
Oil and Gas Sector
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have signed a joint LNG purchase deal with Eni.
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EurOil Statoil has announced it will go ahead with the
redevelopment of the Aasta Hansteen natural gas field.
FSU OGM Preliminary data show that LUKoil's oil production
dropped by about 1% last year.
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MEOG Saudi Arabia is gearing up to develop the Kidan non-
associated gas project in the Empty Quarter.
NorthAmOil ConocoPhillips has struck a US$1.05 billion deal to sell
North Dakota and Montana assets to Denbury Resources.
Unconventional OGM BP has predicted that China will be the most successful
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