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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) (www.MMIE.gob.gq) launched the country’s latest oil and gas blocks licensing round, EG Ronda 2016 (www.EGronda2016.com), 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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DRC Needs More Transparency to Attract Investors

By Sully Manope

The Democratic Republic of Congo has been long expected to issue tender for new blocks on its western coastal basins. The Licensing, which has been speculated to take place in 2016, is subject to terms that are still being defined. There will be tougher terms, according to Babette van Gessel, president of the International Licencing Association.

Apart from the western coastal basins where the focus of speculation is, there is vast open acreage in the eastern part of the country, Ms. Van Gesel explains in a paper Licencing in Africa; Bid Rounds, Blocks. President Joseph Kabila has approved a new oil code, which has noticeably few changes to the bill that was passed in parliament. Ms. Gessel cautions investors to expect tough terms; saying that the minimum capital gains tax is between 35 and 45%. The state also has an expanded role-it will hold 20% carried interest.

She notes that some of the unanswered questions around accessing permits in the DRC include the implementation of the oil code as well as criteria for exploration permits.“There, certainly, is need for greater transparency”, she declares. The lack of clarity of the processes could deter investment.

In the DRC, there have been long standing issues around the maritime boundary with Angola offshore on the one hand and with Uganda onshore in the Lake Albert. Again, 2016 is election year in the DRC and that in itself certainly puts a brake on things.


Nigerian companies the only proven oil producers in the Ugandan Bid Round

By Toyin Akinosho, Publisher

The three Nigerian independents that emerged on the final list of bidders for Uganda’s six-block licencing round are the only proven oil producers among the seven firms from four countries.

WalterSmith Petroman Oil, Oranto Petroleum International Ltd and Niger Delta Petroleum Resources Ltd, have been in the business for a total of 50 years aggregate. They have equity daily oil production ranging from 3,000BOPD to 11,020BOPD.

In contrast, the remaining four, including Armour Energy Limited of Australia, Rift Energy Corporation of Canada, Glint Energy LLC of USA and Swala Energy Ltd of Australia, are rookies in the E&P business. None of these International Oil Firms has a barrel of oil to its name.

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Chevron Shares the Burden in Morocco

The deep water segment of this part of the North Atlantic has been a graveyard of exploration dreams

U.S Major Chevron Corp is sharing the burden of its obligations in Morocco. It has agreed to cede 30% of the gross interest in three deep water offshore leases in the Kingdom.

Qatar Petroleum will acquire the 30% interest in Cap Rhir Deep, Cap Cantin Deep and Cap Walidia Deep, while Chevron will retain a 45% interest and remains the operator. In the deal, which has been approved by the government, Morocco’s Office National Des Hydrocarbures Et Des Mines will continue to have a 25% interest.

Chevron has been closely watching the North and Central Atlantic margin play in the last five years. Apart from the three assets in Morocco, the company holds acreages in Mauritania.

But whereas deep water Mauritania and Senegal, in the Central Atlantic Margin, have experienced significant gas and oil finds respectively, Morocco’s string of dry holes has been second only to Namibia’s, in the south west, in the last three years. Chevron has not drilled a well in Morocco since it

It is clear that, in the partnership with Qatar Petroleum, Chevron is reducing its exposure in the country while Qatar is entering, largely, for diplomatic reasons. “It is no coincidence that Qatar Petroleum’s international presence is now extended to Morocco, a country which Qatar enjoys special relations with,” Saad Sherida Al-Kaabi, president and CEO of Qatar Petroleum, remarked during the signing.

The three offshore lease areas are located between 100-200 kilometers west and northwest of the Moroccan city of Agadir. They encompass approximately 29,200km2, with average water depths ranging from 100 meters to 4,500 meters.


Bowleven Smells a Rat, Annuls Its Plans for Tanzania

By Sa’ad Bashir, in Dar es Salaam

Bowleven has completed due diligence on the Kilwani North Development Licence and Ruvuma PSA, both onshore Tanzania.

And the company feels it should simply leave these assets alone.The AIM listed minnow has “decided not to pursue its interest in the proposed acquisition”.

The terse statement announcing the cancellation of plans is at odds with the exuberance projected in the November 19, 2015 release about the Heads of Agreement between Bowleven and Aminex, (the holder of the licences).

The deal had an aggregate gross consideration of up to $28Million comprising $8.5Million cash, $10Million carry, $5Million share-based element and $4.5Million in contingent payments.

The plan was for Bowleven to acquire:

  • 25% interest in the soon to be producing Kiliwani North Development Licence (KNDL); and
  • 50% interest in the proven and highly prospective Ruvuma PSA.

The company was hoping it would gain:

  • A low cost entry into a rapidly expanding Tanzanian gas market with substantial existing infrastructure with spare capacity;
  • Near-term high quality production providing cash flow from the essentially complete Kiliwani North development;
  • Access to extensive exploration and appraisal potential on the Ruvuma PSA, with the opportunities for near-term gas-to-power into the local market and longer term gas sales into adjoining major existing trans-Tanzanian pipeline to Dar Es Salaam.

An Appraisal drilling was even planned for Ruvuma PSA early 2016.

Now, everything has been cancelled.

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