OMLs 83, 85 Bid Is a One Day Auction

Any chance of winning? Seplat’s CEO, Austin Avuru

…and final bids for OMLs 52, 53 and 55 must be accompanied with a non- refundable fee equaling 15% of the offer.
By Fred Akanni

Chevron’s sale of its 40% stakes in Oil Mining Leases (OMLs) 83 and 85, in Nigeria’s shallow offshore, will be a one day auction. It is planned not to be as complicated as the company’s sale of its equity in OMLs 52, 53, 55, three onshore leases in the east of the country.

Sometime between mid- September and October 15, 2013, Chevron will simply choose a date on which participating companies will make an offer and the top bidder will be asked to pay, company sources say.

The data room for OMLs 83 and 85 was opened last May, a full month before bids were invited for the three onshore leases. But interest in OMLs 52, 53 and 55 has been marked, with 36 companies making indicative offers as of the deadline of July 29, 2013. Twenty five of these were weeded out. The 11 companies which made it to the second round are currently evaluating the data in Chevron offices in Houston, the United States. They include: Seplat, First Hydrocarbon Nigeria, South Atlantic Petroleum (SAPETRO), which is in league with Niger Delta Petroleum Resources, Sogenal Ltd, Seven Energy, Britannia U, First Exploration and Production Ltd, Amni International Petroleum, Sahara Energy Group Belema and the Dangote Group. They will be expected to make their bids before the end of September. All such bids are to be accompanied with a non-refundable commitment fee which is 15% of the bid offer.  Three finalists are expected to have been announced by October 1, 2013.

But while there’s so much buzz around OMLs 52, 53 and 55, talk around progress of the sale of OMLs 83 and 85 has been muted. There is certainly much less appetite for OMLs 83 and 85, which are located offshore Bayelsa state, regarded as one of the most active sites of piracy in the Gulf of Guinea. OMLs 83 and 85 are also less advantaged because they are undeveloped assets, compared with the eastern onshore OMLs which are mostly producing properties.

Still, OML 83’s Anyala and OML 85’s Madu fields are very prospective acreages that have been the talk of the upstream property market in Nigeria for upwards of eight to 10 years. Chevron “inherited” Anyala and Madu, with its acquisition of Texaco in the late 90s. The fields themselves had only been discovered in the early 1990s and Chevron, though willing to increase output, had kept putting off sanction for their development.

The Information Memorandum sent to the invited companies declares that OML 83’s Anyala field “has discovered total resource and upside potential (as deeper opportunities are mapped) of over 200MMBOE(8/8ths). The field’s discovery well, Anyala 01A, drilled in 1974, encountered 259 feet net gas sands, 50 feet net oil sands and 34 feet net undifferentiated hydrocarbon. Additional five exploratory and six appraisal wells were drilled and evaluated between 1996 and 2006. The field is fully covered by seismic data, Chevron notes in the IM, stating that “250km of 3D seismic data was acquired over Anyala field in 1993 and processed in 1994. 700 km of 2000 vintage migrated full stack3D seismic data was bought in 2006. Time-depth chart is based on Anyala 4 and Anyala 8 check shots and seismic stacking velocity”.

OML 85′s Madu field has discovered total resource and upside potential (as deeper opportunities are mapped) of over 140MMBOE (8/8ths). Approximately 45% of discovered resource is gas. The field was discovered in 1992 with Madu 01 well, drilled in 80 feet of water to a TD of 9, 114 feet True Vertical Depth subsea. The well encountered 170 feet net oil and 146 feet net gas in six hydrocarbon zones. Additional nine appraisal wells were drilled and evaluated between 1992 and 2006, the company says.

 


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