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South African Parliament Finally Passes Petroleum Bill

South Africa’s National Assembly has voted to pass the Mineral and Petroleum Resources Bill.
198 voted yes to 80 NO votes
The legislation, in debate at the assembly for close to 10 years, has been forwarded it to the National Council of Provinces NCP for approval.
President Jacob Zuma is expected to give his assent after the NCP’s nod.
Just when the law appeared close to final sign off by President Jacob Zuma, in mid-2014, it was challenged by both mining and oil companies for harbouring certain clauses,causing the legislation to be returned back to the parliament.
Mining companies were concerned that it might infringe global trade obligations and was unconstitutional, partly because it elevated the country’s Mining Charter -meant to redress imbalances of the nation’s past apartheid rule -to the status of legislation. The Mining Charter contains regulations and stipulates rules for white-owned companies to sell stakes to black businesses.The bill also gives wide-ranging powers to the mines minister to place certain minerals in a “value-addition” category requiring a portion of extracted resources to be processed domestically and not be exported in raw form

Vertex Assumes the Largest Share of First Hydrocarbon Nigeria (FHN)

Vertex, an Upstream Nigerian independent funded by African Capital Alliance (ACA), has taken 40% of First Hydrocarbon Nigeria FHN, in a new shareholding structure of the latter.

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Seplat Gets a New Shareholder

The French explorer Maurelet Prom (M&P), is about to sell all its shares to Petramina, the Indonesian state hydrocarbon company. M&P holds 21.37% in Seplat, Africa’s largest home grown E&P Company. Petramina has already bought about a quarter (24.53%) of M&P’s shares and hopes to purchase the remaining after an M&P board meeting has approved the purchase. The 24.53% was sold by  Pacifico, a fund controlled by Jean Francois Henin, chairman of M&P.

That block trade was completed for €4.20 ($4.68) per share, plus a €0.50 ($0.56) earn-out per share payable if, from January 1st 2017 (included) to December 31st2017 (included), the Brent price remains above $65 per barrel during all trading days within a period of ninety consecutive calendar days.

“Should Maurel & Prom’s Board of Directors deliver a favourable reasoned advice on the offer, following the conclusions of the report from the independent expert, Petramina has undertaken to file, to the French market authority, a voluntary tender offer on (i) all Maurel & Prom shares under the same conditions as those offered to Pacifico and on (ii) 2019 and 2021 convertible bonds at their par value plus accrued interests”, M&P says in a release. “The schedule of the operation is expected to be completed by the end of 2016”.

Petramina already owns producing property in Africa (it acquired ConocoPhillips’ interests in Algeria), but the M&P buy, of which Seplat is the largest pie, will be clearly the jewel in its African crown.

 Seplat operates four acreages (OMLs 4, 38, 41, and 53) in Nigeria and has non- operating interests in two others (OPL 283 and OML 55). At optimum, those assets deliver around 88,000Barrels of oil per day (BOPD) and 300Million standard cubic feet of gas (MMscf/d) gross. These translate to 37,750BOPD and 135MMscf/d net to Seplat.

 Maurel & Prom‘s Board of Directors has unanimously indicated that it supports the offer and has the intention to recommend the shareholders to tender their shares. In accordance with applicable regulation, Maurel & Prom’s Board of Directors will deliver its definitive reasoned opinion on the tender offer once it has obtained the fairness opinion from Ledouble, the independent expert it has appointed.

Eq Guinea Takes the Bid Round To Singapore

The Equatorial Guinea oil and gas licensing round, EG Ronda 2016, will be in Singapore in September as the Ministry of Mines and Hydrocarbons pushes forward on promoting available blocks.

The visit to Singapore will open opportunities for companies in South-East Asia and Australia to take part in the round. Gabriel Mbaga Obiang Lima, Equatorial Guinea’s Minister of Mines and Hydrocarbons, said Singapore’s position as a leading energy centre in South-East Asia makes it the ultimate venue for EG Ronda.

“We have considerable admiration for what Singapore has accomplished in becoming an important global energy hub,” said H.E the Minister. “It is a model for Equatorial Guinea’s long-term development and a reference point for oil and gas trading in South-East Asia. We look forward to having excellent discussions with organizations in the region.”

Lima will deliver a keynote presentation during the CWC LNG & Gas Series: 8th Asia Pacific Summit, to be held at the Grand Hyatt Hotel on September 20-23. The ministry’s press release claims that Equatorial Guinea has a large portfolio of gas projects in operation or under development, including EG LNG and the pioneering Fortuna FLNG development, expected to be the first of its kind in Africa.

EG Ronda 2016 was launched on June 6, 2016 at the Africa Oil & Power conference and will conclude on November 30, 2016. The MMH invites bids on all open acreage outside of blocks under direct negotiation.

MX Oil Takes Full Charge

AIM listed MX Oil has taken over Jacka Resources Nigeria Limited.

This is the final stage of an investment process which involves MX Oil’s right to take sole control of Jacka Resources’ equity in Oil Mining Lease (OML) 113, which holds the Aje Field offshore Nigeria. The deal is for a nominal sum. An official change in ownership still has to be approved by the country’s Department of Petroleum Resources.

Aje field commenced crude oil production in May 2016. The Field has an FPSO installed with a storage capacity of 750,000 barrels of oil and can accommodate 40,000 barrels per day of crude production.

Tanzania: Unusual Dispute around Petroleum Rights

Two partners in a Tanzanian licence are involved in very unusual dispute over payments of cash calls.

Ordinarily, the operator of the licence leads the other partners and spends the money on operations, while the non-operating partners pay their share of the cost, sometimes after the fact.

This means that more often than not, the operator is the most aggressive partner.

However, in thecase between  two Australian minnows: Swala Oil &Gas and Otto Energy, both of whom are partners in the Tanzanian onshore Pangani and Kilosa Kilombero acreages, anon operating partner is accusing the operator of laxity and not paying cash calls (ie. Agreed contribution for opex and capex) and is demanding to take over operatorship.

Otto Energy and Swala Oil&Gas each has 25% of the assets. Each of them initially had 50%, but had farmed down to other partners.

Otto Energy says it has issued i variousdispute notices toSwala Oil and Gas Tanzania, the Dar es Salam listed local subsidiary of the Australia listed Swala Oil and Gas.

These notices relate to: (1). defaults in relation to non payment by Swala Oil and Gas Tanzania of cash calls and associated interest accrued under the Joint Operating Agreements (JOAs); (2). claims by Otto Tanzania for payment of interest accruing under the JOAs as a result of Swala Oil and Gas Tanzania’s default samounting to approximately $360,000; and (3). the removal of Swala Oil and Gas Tanzania as operator of the Kilosa Kilombero licence area, following that company’s

“failure to satisfy the joint venture partners that it is not insolvent”. Otto contends that “the matters raised in these notices are unrelated to the current Federal Court proceedings brought by Otto Tanzania against Swala Energy Limited (In Administration)”

The company argues that “these steps are the most appropriate course of action to ensure that joint venture operations, including the drilling of the planned Kito-1 exploration well, are undertaken by a joint venture which has the financial and technical capability to ensure the efficient and safe completion of drilling. Otto Tanzania believes it is likely that the joint venture will be unable to progress the drilling of the Kito-1 well in 2016 until the joint venture disputes are resolved”.

Nigerian Companies Win Two of Uganda’s Six Auctioned Acreages

Waltersmith Petroman, Niger Delta Petroleum Resources (NDPR), and Oranto Petroleum, all Nigerian independents, have been awarded two acreages in Uganda.

Waltersmith won the Turaco shallow and deep acreage. NDPR was paired with Oranto for the Ngassa block.

The Nigerian companies are the only proven hydrocarbon producers of all the seven companies which made the final list for the six blocks.

The others: Armour Energy Limited of Australia, Rift Energy Corporation of Canada, Glint Energy LLC of USA and Swala Energy Ltd of Australia, largely own  exploration acreages.

Uganda announced its first competitive bidding round for the six exploration blocks, including Mvule, Taitai & Karuka, Ngassa, Turaco, Kanywantaba and Ngaji, covering a total of 3,000 square kilometres, in February 2015. Bidding documents were issued to 16 oil firms in October 2015.

In March 2016, the country announced the list of companies which had turned in bids.

There are two matters arising from the award of these assets to the three Nigerian companies.

A more comprehensive story is published in the Volume 17, Number 6, 2016 edition of the Africa Oil+Gas Report


MV Grabs ASlice of Kilosa

Will pay $2.3Million to get into Tanzanian onshore

MV Upstream has reached an agreement in principle with Otto Energy for the acquisition of a 25% participating interest in the Kilosa-Kilombero License, onshore Tanzania.

MV Upstream is a newly formed joint venture established to participate in upstream activity. Vegas has a track record of exploration and production activities in both Egypt and the USA and is privately owned.

MOH is a diversified downstream company, which has a core business in refining crude oil products at its owned and operated Corinth Refinery. MOH is listed on the Athens stock exchange and during 2015 had a consolidated annual turnover of 7Billion Euros..

Otto Energy (Tanzania) is a subsidiary of Otto Energy Limited, a company the shares of which are listed on the Australian Securities Exchange (ASX).

Kilosa-Kilombero is an onshore block of 17,625 square kilometers for oil & gas exploration. The companies which participate as Joint Venture partners to this Exploration License are: Otto (currently 50%), Swala Oil and Gas (Tanzania) plc, (a company listed on the Dar es Salaam Exchange – 25%), Tata Petrodyne (a member of the Indian Tata Group – 25%). Swala Oil and Gas (Tanzania) plc is the operator.

In consideration for the above MV Upstream will pay to Otto $2.3Million as past costs contribution and will carry Otto in respect of well costs up to the amount of $ 2 Million. In addition, if there is a discovery necessitating drilling an appraisal well MV Upstream will carry Otto in respect of well costs up to USD 1 million.

The transaction is subject to the approvals of Tanzanian authorities and the joint venture partners (SWALA Energy and Tata Petrodyne).

Aminex Extends the Mtwara Licence

Irish minnow Aminex says it has completed discussions with the Tanzanian Petroleum Development Company TPDC “in relation to extending the licence term for the Mtwara Licence of the Ruvuma Production Sharing Agreement”. The PSA was due to expire late December 2016.

“A one-year extension has been approved by the TPDC, which is processing the extension for Ministerial approval and signature”, the company says in a release.

Aminex has also completed discussions with the TPDC with regards to transferring the drilling obligations in the northern Lindi Licence covered by the Ruvuma PSA into the southern Mtwara Licence, which includes the appraisal area for the Ntorya discovery.

With the support of the TPDC, the transfer of the Lindi drilling obligations to the Mtwara licence area is also being processed for Ministerial approval and signing. Thereafter, the company intends to drill the Ntorya-2 well to satisfy the appraisal drilling obligation and then to apply for a 25-year development licence subject to its success.

Aminex adds that its lender has granted an 18-month extension until January 31, 2018 to the repayment date of its corporate loan facility on existing terms. “As recently announced, the power generation system and other auxiliary facilities at Kiliwani North have been completed and commissioning of the gas plant and sub-sea pipeline commenced on April 4, 2016 . Aminex continues to be the sole producer to the TPDC gas processing plant during the commissioning process and is expected to reach production levels of up to 30MMscf/d”.

Equatorial Guinea Places 37 Licences on the Auction Block

Equatorial Guinea’s Ministry of Mines, Industry and Energy (MMIE) ( launched the country’s latest oil and gas blocks licensing round, EG Ronda 2016 (, at the Africa Oil & Power conference in Cape Town, South Africa. Companies are now able to submit letters of interest to the Ministry, and to view the official map of available blocks.

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