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16 Companies, Including BP, Exxon and TOTAL, Apply For Five Ghanaian Acreages

Sixteen (16) companies, including five majors, submitted a total of sixty applications for the five acreages on offer in Ghana’s First Licencing Round.

The Ministry of Energy (MoE) describes these companies as “high calibre companies with proven track records”, and sees their interest as “a vote of confidence in the Ghanaian economy”.

The applications, opened publicly Friday, December 21, are for prequalification for Expression of Interest (Eol) for competitive bidding for three Blocks (GH_WB_02, GH_WB_03 and GH_WB_04) in the Western Basin and direct negotiations in respect of two Blocks (GH_WB_0S and GH_WB_06), all offshore the Republic of Ghana.

Two of the applications were invalidated as they were for Block GH_WB_01 which has been reserved for the Ghana National Petroleum Corporation (GNPC).

“In line with this, fifty eight (58) valid applications will be considered for the next stage of the process”, the Ministry says.

The applicants include ENI, Cairn, Harmony Oil and Gas Corporation, ExxonMobiL, CNOOC, Qatar Petroleum, BP, VITOL, Global Petroleum Group, Aker Energy, FIRST E&P, Kosmos, Sasol and Equinor.

“Government is determined to use a transparent process as specified by law to shortlist companies that have the capacity and will qualify based on prescribed criteria” said Mohammed Amin Adam, the country’s Deputy Minister of Energy.

“We will collaborate and partner with them to explore and exploit the resource for our mutual benefit and most importantly the benefit of the Ghanaian people” said Lawrence Apaalse, Chairman of the Licensing Round Committee.

 

 


Africa Energy Completes Farm in to South African Block

Africa Energy Corp. has received governmental approval and closed the previously announced transactions to acquire an effective 4.9% interest in the Exploration Right for Block 11B/12B offshore South Africa.

The company will thus partner with French major TOTAL, Qatar Petroleum and Canadian Natural Resources to, among other things, spud the Brulpadda-1AX well, scheduled for late December 2018

Africa Energy holds 49% of the shares in Main Street 1549 Proprietary Limited (“Main Street 1549”), which has closed separate farmin transactions with TOTAL E&P South Africa BV, a wholly-owned subsidiary of TOTAL SA, and CNR International (South Africa) Limited (“CNRI”), a wholly-owned subsidiary of Canadian Natural Resources Limited, to acquire 5% from each for an aggregate 10% participating interest in Block 11B/12B (4.9% net to Africa Energy).

Block 11B/12B is located in the Outeniqua Basin approximately 175 kilometers off the southern coast of South Africa. The block covers an area of 18,734 square kilometers with water depths ranging from 200 to 2,000 meters.  After closing, Total, as operator, will have a 45% interest in Block 11B/12B, while Qatar Petroleum and CNRI will have 25% and 20% interests, respectively.

The Brulpadda-1AX exploration well will be drilled in 1,432 meters of water by the Odfjell Deepsea Stavanger semi-submersible rig to a total depth of 3,420 meters subsea. The well will test the oil potential in a mid-Cretaceous aged deep marine fan sandstone system within stratigraphic closure. Drilling and evaluation of the well is expected to take approximately 85 days

 


BP Clears Its Anxieties About Angola

By Toyin Akinosho

BP’s two agreements with Angola’s Sonangol for Platina and Greater Plutionio, have put an end to the British major’s concerns around the government’s thinking about foreign investment in the country.

Up until these agreements were signed in mid-December 2018, the perception was that Angola was undecided whether to extend the licences on which BP’s current production and future operations rely.

One of the agreements was to progress to final investment decision the development of the Platina field in deepwater Block 18. The second was to extend the production licence for the BP-operated Greater Plutonio project on Block 18 to 2032, subject to government approval, and for Sonangol, the state oil company to take an 8% equity interest in the block.

Platina would be BP’s first new operated development in Angola since the PSVM project in Block 31 began production in 2013. It would be the second phase of development in Block 18 – the Greater Plutonio project started up in 2007.

The agreements were signed by Carlos Saturnino, Chairman of the Board of Directors of Sonangol and Bob Dudley, BP group chief executive.

BP’s anxieties about its future in Angola, allayed by these agreements, were captured by a statement by Jasper Peij’s. the company’s VP Africa Exploration, in an interview early in 2018, in which he explained:

“In Angola, you’ve gone through a period where it no longer makes sense to invest because you’re too close to the end of the contract. I think the country has a choice to make. Do they extend the PSCs and then, therefore, reinvigorate investment, or do they want to do this themselves?”

But Sonangol’s Saturnino said on December 17: “These agreements are a positive sign of the work being done by Sonangol and the Angolan government to generate more investment in our oil industry and take us a big step closer toward increasing production from Block 18.  BP has been a key partner for Sonangol and Angola for many years, having contributed to the development of the oil and gas industry through its operated and partner-operated blocks, and we look forward to continuing to work together in the years to come.”

Bob Dudley responded: “The signing of these agreements is a major step towards new investments for BP’s business in Angola, extending production from Greater Plutonio and boosting the nation’s oil output. BP is proud to be a partner with Angola and the signing of these agreements is a major step towards further realising the potential of Angola’s natural resources.”

Discovered in 1999, the Platina field, in water depth of approximately 1,300 metres, is planned to be developed as a subsea tie-back to the existing Greater Plutonio floating production, storage and offloading vessel (FPSO). The final investment decision for the development is anticipated in the second quarter of 2019 with first oil then expected in late 2021/early 2022. The production licence extension will enable later life production from the Greater Plutonio fields as well as the future output expected from Platina.

BP and Sonangol also signed two further memoranda of understanding (MOUs) regarding potential further access and exploration offshore Angola and co-operation in a planned new products and crude terminal and storage facility in Angola.

Under one MOU the companies agreed to progress discussions for further exploration activities in Blocks 31 and 18, to enter discussions for Blocks 46 and 47, and to explore options in Block 18/15.

The second MOU enables them to enter discussions regarding financing and construction of the planned terminal and storage facility at Barra do Dande in Bengo province, approximately 30 kilometres north of Luanda.

 


Wentworth Walks Out of Mozambique

Wentworth Resources has announced it will be leaving Mozambique by the end of April 2019.

The Norwegian explorer, listed on London’s AIM, says it would relinquish the Tembo block, its only asset in the country, close its Maputo office “and shut down activities in the Muxara and Palma camps concurrently”.

The Tembo Block, spread over an area of approximately 2,500 km2, in northeastern Mozambique, is operated by Wentworth Resources (85%) with Empresa Nacional de Hidrocarbonetos (“ENH”; 15%) as a partner.

“The relinquishment of the Tembo block will release the Company from any further appraisal work programme obligations with no material costs foreseen ahead of relinquishment”.

The Tembo gas discovery was made exactly five years ago and since Wentworth had received a go ahead for its appraisal in 2016, it had struggled to find a farm in partner to fund the programme.

“It is anticipated that the Company’s Intangible Assets which are attributable to the Tembo appraisal licence will be written down in full in the current financial year 2018”.

 


So Much Uncertainty about Savannah Petroleum

By Prospect Mojido

Savannah Petroleum had not concluded its takeover of Seven Energy’s assets in Nigeria as of December 14, 2018, less than three weeks to the end of the year.

After signing off on the deals regarding the gas for oil swap with Frontier Oil Limited and the buy-out of minority shareholders in Universal Energy Resources Limited, Savanah has not proceeded as quickly to close out the entire transaction.

Frontier Oil is the holder of the Uquo field, whose gas reserves underpinned Seven Energy’s main gas supply business in the domestic market. Universal Energy, a producer of a marginal oil field in eastern Nigeria, was partly owned by Seven Energy.

Savannah claims it is “seeking certain further amendments to the terms of the Transaction, which the Board considers to be in Savannah’s immediate commercial interests and are expected to significantly enhance the Company’s competitive position in Nigeria”.

The transaction, initiated 13 months ago, has thus dragged out for much longer than initially contemplated.

But such lack of clarity has characterised Savannah Petroleum’s overall activity, whether in the business area or in technical operations.

The five discoveries the company claims to have made in Niger Republic are not exactly all discoveries, geologically speaking. Savannah’s own technical field reports show that the crude oil encountered were reported in largely the same reservoir units, suggesting that most of the wells have been appraisals, not new discoveries. The last well, Zomo 1, described like the rest as a “discovery”, encountered oil only in the E1 unit, the same unit in which Eridal-1 encountered oil. And Savanah’s own record shows that the reservoir is less developed in Zomo-1 and yet it says Zomo is a discovery. Once you move to other wells and compare, you find generally more or less the same pattern.

Now it is on the basis of these “significant” discoveries that Savannah submitted a prefeasibility study for Early Production Scheme, to the Niger Republic’s authorities. The deal with the government includes that the government would facilitate a crude oil marketing agreement between Savanah and Soraz Refinery, which has the capacity to process no more than 20,000BOPD and all that capacity is already taken up by supply from the CNPC. With other operators, Niger has the capacity to produce far in excess of the 20,000BOPD it processes at Soraz, but there is no evacuation infrastructure in place. The published agreement between Savannah and the Nigerien government does not allude to this inadequacy.

 

 

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Nigeria Announces First Bid Round In 11 Years

The Nigerian Government has announced a Bid Round; the first such auction for licencing of subsurface hydrocarbon property in 11 Years.

It’s not a conventional licencing round. It is for uptake of natural gas that is currently being flared in hundreds of sites in the country’s Niger Delta basin.

The government expects licence winners to take over the flare sites, monetize the molecules and boost the micro and macro economy in the process.

“We invite parties interested in participating in the Nigerian Gas Flare Commercialization Programme (NGFCP), NGFCP to register and apply for the issuance of the Request for Qualification (RfQ)] package which will lead to the submission of statements of qualification (SOQs) by interested parties for participation in the programme”, the Ministy of Petroleum Resources says in a statement through Justice O. Derefaka, who is Programme Manager, NGFCP

“The auction presents a significant opportunity for domestic and international developers alike to participate in the largest market driven flare gas monetization program undertaken on this scale globally.

“Bidders will have flexibility of choosing which flare site(s) to bid for, determine the gas price, and their end – use market or gas product, as well as the technology to be deployed. Interested parties will need to demonstrate project development experience and proposed proven technology which we expect to be in commercial application. Additionally, parties will need to demonstrate technical and commercial capacity. Successful bidders will be granted title to the flare gas through a gas sales/supply agreement with the FGN.

An interested party (applicant) is not required to be a Nigerian entity in order to submit its SOQ. Following a successful bid, each Preferred Bidder will be required to act through or establish a Nigerian corporate entity, which will enter into the necessary Commercial Agreements.

Applicants may come from a variety of backgrounds including but not limited to:

  • Communities
  • Technology providers
  • project developers
  • resource and energy companies
  • industrial companies
  • infrastructure companies
  • financial investors/lenders

It is important to note that ONLY registered parties on the Programme web portal can participate in the NGFCP bidding process.

For those who have not registered, see the link below for Registration/Expression of Interest (EoI) on the NGFCP web portal:

NGFCP Registration/Expression of Interest (EoI)

It is also important to note that the interface by those interested in the Programme with the NGFCP will be through the portal ONLY.

ALL registered parties are notified to download the Request for Qualifications (RfQ), to submit their statements of qualification (SOQs) for participation on the programme as well as download the Programme Information Memorandum (PIM) from our website. Parties will only have access to relevant programme documents from the NGFCP Portal using their Log on details.
For any inquiries, please refer to the Frequently Asked Questions (FAQs) section on the NGFCP portal or kindly send an e-mail to us via: info@ngfcp.gov.ng


Uganda: FID Postponed Till Far into 2019

The much anticipated Final Investment Decision on Uganda’s basin wide crude oil development will not happen in 2018.

And the indicated date in 2019 is not set in concrete.

Tullow Oil, a former leader of the project and now a very minority stakeholder (with 12% equity on completion of the ongoing farm down), says that “technical work on the development and the upstream pipeline is well advanced and the Operators are now targeting First Half 2019”.

The Ugandan project has been on course since 2009, when it became reasonably clear, from exploratory and appraisal wells, that the Albert Graben held huge tanks of oil, even if it was waxy.

Financial issues between the private developers and the governments involved, surrounding the 1,450km pipeline from Hoima in Uganda through Tanga in Tanzania, are part of the reasons for delays in FID

So is the environmental impact work. Fuller details of what is going are accessible here.

Meanwhile, Tullow says it is waiting, along with its Joint Venture Partners, TOTAL and CNOOC Ltd,  approval of the farm-down transaction from the Government of Uganda. At completion of the farm-down, the Irish explorer anticipates receiving a cash completion payment of $100Million and a payment of approximately $100Million to reimburse Tullow for pre-completion capital expenditure. A further $50Million of cash consideration is due to be received when FID is taken.


Lease Renewal: Elcrest To Pay $6Million, Do A Gas Project

Nigerian authorities have asked Elcrest E&P to commit to gas monetisation as a condition to renewing its equity participation in a lease in the Western Niger Delta.

Elcrest acquired 45% of Oil Mining Lease (OML) 40 from Shell, TOTAL and ENI in 2012, but the subsisting licence with which these majors held the lease expires in 2019. Elcrest has, since 2012, held the lease in a Joint Venture partnership with NPDC, the operating subsidiary of the state hydrocarbon company NNPC.

The company announced that the Minister’s consent was “conditional on Elcrest payment of a Renewal bonus of $6.3Million within 90 days and a commitment from the Oil Mining Lease (OML) 40 JV to gas monetisation and additional sale 25MMSCF/Day with the gas sales agreement to be signed within 5 years”.

But while the company is currently preparing the title deed for OML 40 to conclude the renewal process, the authorities have given the nod.

“Honourable Minister of Petroleum Resources has consented to Elcrest’s renewal of its equity participation in OML 40, for a further 20 years, taking effect on 22 October 2018”, the company says in an update

 


Vitol & Co Finally Buy Out Petrobras From Nigeria

By Fred Akanni, in Lagos
A consortium led by Vitol and comprising Africa Oil Corp. (25%), Delonex Energy Ltd. (25%) and Vitol Investment Partnership II Ltd. (50%), has entered into a Share Purchase Agreement (SPA) to acquire a 50% ownership interest in Petrobras Oil and Gas B.V. for $1.407Billion.  BTG Pactual E&P B.V. will continue to own the remaining 50% of POGBV. The transaction is subject to customary conditions precedent.
The sale is coming almost exactly a full year since November 9, 2017, when Petrobras announced on its website: “We are at the teaser stage for the opportunity regarding the process of divesting 100 percent of our interest in Petrobras Oil & Gas B.V. We are leading the sales process”.
The primary assets of POGBV are an indirect 8% interest in Oil Mining Lease (OML) 127, which contains the producing Agbami Field, operated by affiliates of Chevron Corporation, and an indirect 16% interest in OML 130, operated by affiliates of TOTAL S.A., which contains the producing Akpo Field and the Egina Field, which is expected to commence production by the end of 2018. Current production of 368,000 barrels per day is anticipated to increase to over 568,000 barrels per day by the second half of 2019.
POGBV has a strong non-operated portfolio, managed by Chevron and Total and which represents circa 20% of Nigerian production. Vitol looks forward to continuing to grow and invest in Nigeria.”

The agreed base purchase price of $1.407Billion, is on a cash and debt free basis as of the effective date of 1st January 2018 (the “Effective Date”). A deferred payment of up to $123 million may be due to the Seller depending on the date and ultimate OML 127 tract participation in the Agbami Field, which is subject to a redetermination process (see below). The Consortium’s funding required to ultimately close the transaction will be reduced by any leakage paid to the Seller by POGBV, including dividends, and increased by any contributions made to POGBV by the Seller during the period between the Effective Date and completion. POGBV has an existing reserve-based lending facility, with a syndicate of international banks and commitments of $1.245 billion, which POGBV and the Consortium believe may be increased. Given the anticipated time required to complete the transaction, POGBV’s debt capacity, forecast post effective date cash flow and the structure of the transaction, Africa Oil expects to fund its share of the acquisition with cash on hand.

The three fields in these two licenses are all giant fields, located over 100 km offshore Nigeria, and are some of the largest and highest quality in Africa. Two of these fields, Agbami and Akpo, have been on production since 2008 and 2009, respectively, and in 2017 averaged a combined gross production rate of approximately 368,000 barrels of oil per day. Lifting costs in 2017 were well below $10/bbl. The TOTAL-operated Egina development project in OML 130 is the largest investment project currently ongoing in the oil and gas sector in Nigeria. The Egina FPSO, with a 200,000 barrel of oil per day capacity is currently on station and is being hooked up to existing wells. Egina first oil is expected before the end of 2018 and quickly ramp up to plateau production of approximately 200,000 barrels of oil per day during the first half of 2019. The fields all have high quality reservoirs and produce light sweet crude oil with state of the art Floating Production, Storage and Offloading (“FPSO”) facilities.

During 2017, daily oil production from the Agbami Field averaged approximately 240,000 barrels of crude oil. Production commenced from the field in 2008 and has been on plateau for over 8 years. An infill drilling programme is ongoing, aimed at extending plateau into 2020. The field spans OML 127 and OML 128 and is subject to a unitization agreement, with 62.5% of field production currently allocated to OML 127. A redetermination process has been subject to expert review and arbitration in order to finally determine an increase in the portion of the Agbami Field attributable to OML 127. During 2017, POGBV’s entitlement of daily oil production averaged approximately 21,000 barrels of crude oil (based on a 62.5% tract participation).

During 2017, daily oil production from the Akpo Field averaged approximately 128,000 barrels of crude oil. Production commenced from the field in 2009. During 2017, POGBV’s entitlement of daily oil production averaged approximately 26,000 barrels of crude oil.
In addition to the current fields under production and development there are other growth opportunities in horizons not yet under developed in existing fields and adjacent fields being considered for development together with exploration opportunities, the consortium say in a statement.


Midwestern Moves to Grab A Large Slice of San Leon

Nigerian independent Midwestern Oil &Gas has entered into a binding agreement with SunTrust Oil Company Nigeria Limited, to acquire the latter’s equity interest in San Leon Energy.

San Leon holds 10% economic interest in Oil Mining Lease (OML) 18, in which Midwestern is also an equity holder.

The AIM listed San Leon reports that Midwestern has notified the Company that Pursuant to the agreement, Midwestern will acquire a total of 71,487,179 ordinary shares in San Leon (representing 14.29 % of the issued ordinary shares of the Company and SunTrust’s entire remaining interest in the Company).

There is something curious about this breaking story for anyone who has chanced on the dispute between San Leon and Sun Trust.  Just three months ago, Suntrust summoned San Leon Energy Plc and six other defendants to appear before a Federal High Court in Lagos, Nigeria,  within 30 days in the suit number FHC/L/CS/793/2018 in respect of Oil Mining Lease (OML) 18. The six other defendants in the suit are Midwestern Leon Petroleum Limited, Martwestern Energy Limited, Midwestern Oil and Gas Company Limited, Mart Resources Inc; Minister of Petroleum Resources and the Corporate Affairs Commission (CAC). In the statements of claim Suntrust alleged that in order to acquire an indirect economic interest in OML 18, San Leon Energy Plc began acquiring direct and indirect interests in Martwestern Energy’s shareholding from March 2016, contrary to the November 2013 shareholders’ agreement between the plaintiff, Martwestern Energy, Midwestern Oil, and Mart Resources Inc. “San Leon Energy and Midwestern Oil and Gas formed Midwestern Leon Petroleum Limited as a special purpose vehicle to acquire and restore the entire shareholding in the Martwestern Energy outside the framework of the shareholders’ agreement,” Suntrust Oil alleges. The plaintiff argued that Midwestern Oil and Mart Resources Inc. transferred all their shareholdings, four million shares each, to Midwestern Leon Energy (Sale Shares), adding that Midwestern Leon did not execute the Deed of Accession as required by Clause 13 of the shareholders’ agreement.

San Leon had not made any public statement about resolution of this court dispute before the new story about Midwestern purchasing Sun Trust’s shares in San Leon.

San Leon merely states that Sun Trust’s shares in San Leon are being transferred to Midwestern in exchange for the transfer of interests in certain assets currently owned by Midwestern. San Leon has been informed by Midwestern that 47,243,590 ordinary shares in San Leon (representing 9.44% of issued ordinary shares) have already been transferred to Midwestern, and that the remaining shares will be transferred by SunTrust in the coming weeks.

San Leon says that the transaction does not directly involve San Leon or its assets.

 

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