All articles in the Farm in, Farm Out Section:


BP’s Gas Success in Egypt Makes Oil Look Uncool.

By Toyin Akinosho

Britain’s top hydrocarbon company is aiming to dump its oilfields in Egypt, as its recent string of successes in natural gas, aided by the country’s competitive local prices, makes oil properties relatively uncool.

Competitors have been invited to scrutinise BP’s data, a prelude to purchasing the major’s stake in Gulf of Suez Oil Company (GUPCO), the company’s 50+ year old joint venture with the Egyptian General Petroleum Corporation (EGPC).

Egypt is paying at least $5 for every thousand cubic feet –in new projects-to E&P companies who pump gas into its national grid, the largest domestic gas market in Africa.

While payments had been a struggle in the past, the government has recently been in haste to clear the backlog.

BP has found itself right in the centre of Egypt’s gas boom, even though its oil output is 15% of the country’s total production.

BP holds 10% of ENI operated Shorouk concession offshore Egypt, which includes the giant Zohr gas field. The company itself operates the Atoll field, of which it announced the start of gas production from the project’s Phase One last February. Both Zohr (which came on line December 2017) and Atoll collectively produce 700MMscf/d.

BP’s Net production in Nile Delta increases sixfold from 50,000BOEPD in 2016 to over 300,000BOEPD in 2020; 90% of that is natural gas.


Ghana Launches Petroleum Register

Ghana has launched a Petroleum Register in accordance with the provisions of the new Petroleum Exploration and Production Law (Act 919, passed in late 2016).

The Petroleum Register is an online platform (www.ghanapetroleumregister.com) of a Public Register that hosts Petroleum Agreements and contracts ratified by Parliament as well as Petroleum Permits, Certificates, Authorisations, Approvals and Consents.

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Nestoil Wants To Sell Down In Neconde/OML 42

Nestoil, the oil service firm owned by Nigerian businessman Ernest Azudialu, is reportedly angling to sell part of its equity in the Neconde Special Purpose Vehicle SPV.

As such, it will be farming down in its partnership in the Oil Mining Lease (OML) 42, located in the Western Niger Delta.

Nestoil holds 80% of Neconde. What is particularly curious about the story is that Nestoil was the prime mover of the creation of the Neconde SPV, which took over Shell/TOTAL/ENI’s 45% stake in the acreage in 2012. The majority 55% is held by NNPC, the state hydrocarbon company.

Creating value from the asset takeover has been an epic struggle. While Neconde paid $585Million to buy the 45%, it has found it difficult to reach and stay on an optimum output, at an optimum price, to pay back debts and fund a sorely needed expansion. First the NPDC, the ineffectual E&P subsidiary of the state hydrocarbon company NNPC was imposed to operate the asset and that meant a low production (less than 20,000BOPD) for over three years.

It was inside that time frame that the crude oil price collapsed. And just when the prices were about to climb back up, Niger Delta militants bombed the crude evacuation facility, forcing the terminal to shut in for 16 months between February 2016 to June 2017. Out of the $585Million paid for the stake, the consortium partners (Nestoil, Yinka Folawiyo and KOV) paid $435MM as equity and collectively raised $150Million as debt. What’s not clear is how much of the $435Million equity payment was raised as debt by the members of the SPV.

What are you buying?

OML 42 was producing around ……..Details here


Aminex On Course of Farming Out Ntorya Gas Field In Tanzania

Aminex Corp, the London listed junior who is a leading gas producer in Tanzania, has revealed discussions with Eclipse Investments regarding a possible farm out of part of its interest in the Ntorya Appraisal Area.

Eclipse is a wholly-owned subsidiary of the Zubair Corporation and is Aminex’ largest shareholder. The Zubair Corporation is one of Oman’s leading business groups.

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Africa Oil Grabs 25% of Impact O&G

Canadian minnow, Africa Oil Corp., has completed buying about a quarter of the equity in Impact Oil and Gas Limited, a private UK company with exploration assets in South and West Africa.

Africa Oil issued 13,946,545 common shares in its capital to Helios Natural Resources 2 Limited and invested $15 million in shares and warrants of Impact. Now Africa Oil owns an approximate 25.2% equity interest in Impact.

Africa Oil Corp. holds assets in Kenya and Ethiopia, including the South Lokichar Basin (25% working interest in Blocks 10BB and 13T), where the Company and its Joint Venture Partners are undertaking activities aimed at sanctioning development. The Company is listed on the Toronto Stock Exchange and on Nasdaq Stockholm.

What’s Africa Oil Buying Into?

Impact Oil and Gas acquired its first asset, the Tugela South Exploration Right, offshore South Africa in 2011 and has subsequently expanded its asset base across the offshore margins of South and West Africa. It has since partnered with ExxonMobil and Statoil (South Africa), CNOOC (AGC – between Senegal and Guinea Bissau) and TOTAL (Namibia and South Africa). It is currently seeking a partner in its Gabonese assets. The company’s current portfolio covers a combined area of over 90,000 km² (gross).

Pillar Four Securities LLP acted as financial advisor and Pareto Securities acted as strategic advisor to Africa Oil in connection with the transactions described herein.


Hess Finalises Ghana Divestment, Exits Africa…

By Johnny Matanmmy, in Malabo

Hess Corporation’s $100 Million Sale of its stake in Ghana comes barely three months after its exit from Equatorial Guinea.

It is leaving valuable assets in both countries; the Ceiba field and the Okume complex in Equatorial Guinea’s Rio Muni Basin were snapped up by Kosmos Energy, who reported that Hess’ lacklustre investment in those assets was the lead cause of decreasing output in the last few years.

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Chevron, Shell Pull Back From Africa

By Jackson Otiti

Chevron Corporation’s divestment of its stake in downstream South Africa, its biggest downstream operations on the continent, is the latest evidence of the American major’s cutback from Africa.

Chevron, and indeed Shell, are coming across as increasingly bearish about their African outlook, at a time when other majors, BP, TOTAL, ExxonMobil and the smallest of them, ENI, take more positions.

Shell has led the taking of over $10Billion by a coalition of partners (including ENI and TOTAL) from asset sale in Nigeria between 2010 and 2015. The AngloDutch major is in discussion with two companies over divestment in three more Nigerian blocks, as we speak.

While Chevron unloads its 75% interests in its South Africa assets as part of its three-year divestment goals announced in 2014, TOTAL’s signalling of taking over the same asset, even though unsuccessful, is symbolic of the French major’s increasing investment in Africa.

British major BP has taken vast swaths of deepwater territory in the North West African margin, notably Senegal and Mauritania. BP is growing portfolios in Egypt and Angola. TOTAL is leading the development of Uganda’s oil resources and has won operatorship in new assets in Angola.

The two largest oilfield developments to come on stream in Africa in 2018 are led by TOTAL. Egina in Nigeria and Kaombo in Angola will each drain at least 200,000BOPD of oil at peak production. The largest oilfield development to take financial sanction in 2018, is led by TOTAL. From around 2022, the development, in landlocked Uganda, will produce over 150,000BOPD.

ExxonMobil is in the process of signing a Petroleum agreement in Ghana. The world’s top supermajor led the charge into Mozambique for most of 2016 and 2017, taking blocks in the bidding round, purchasing stakes in ENI’s Area 4 and vying for stake in Anardako operated Area 1 in East Africa’s southernmost country.

ENI commissioned production from Zohr, Egypt’s largest gas field in December 2017. It is also operating the country’s largest gas production at Nooros field, which produces close to 1Billion cubic feet of gas per day. Nooros was put on stream less than two years ago.

Chevron and Shell, meanwhile, are growing quieter about Africa, which features more in their divestment portfolios than their growth plans.


Ghana, ExxonMobil Sign Petroleum Agreement Tomorrow

By Toyin Akinosho

The word’s top supermajor lands a position in the West African Transform margin

Ghanaian authorities will be signing a Petroleum Agreement with ExxonMobil on Thursday, January 18, 2018, in Accra, the country’s capital.

The event, scheduled to take place at the Kempiski Hotel in the city, is the culmination of discussions that began on April 30, 2015, when the then Minister of Petroleum and the Ghana National Petroleum Corporation (GNPC) entered into a Memorandum of Understanding (MoU) with the supermajor’s Ghanaian subsidiary: ExxonMobil Exploration and Production Ghana (Venture) Limited, for acquisition of Petroleum Exploration and Production rights over the Deepwater Cape Three Points (DWCTP) Block, located in ultra-deepwater zone of between 2,000 and 4000 metre water depths in the prolific Tano basin.

“Pursuant to the terms of the MoU, the parties agreed to negotiate in good faith a Petroleum Agreement, with exclusivity period of seven months”, the Ministry of Petroleum said.

The discussions, in the event, have gone on far beyond the seven month exclusivity period and ExxonMobil has managed to get the Ministry’s nod, in large part because Ghana desperately feels that the presence of such a super major in its petroleum industry validates the country’s hydrocarbon potential. “Ghana is one of a few African oil producer countries without the presence of a super major”, the Ministry of Petroleum declares, welcoming the entrance of ExxonMobil.

The DWCTP Block has twice been relinquished in the past: by Vanco Energy (which became Pan Atlantic) and Lukoil, the Russian explorer. “It is one of the ultra-deepwater blocks which severely test the limits of modern technology and would take Research and Development to optimally develop and exploit any discovered resources”, said a newspaper advertisement by the Petroleum ministry.

ExxonMobil has been trying to get into Ghana for close to a decade, since the Anadarko/Kosmos Energy partnership discovered the Mahogany field in 2007 and established Ghana’s place on the hydrocarbon map of the globe. Indeed, the company and the country clashed in the early 2010s, as ExxonMobil worked on the possible purchase of Kosmos Energy’s portfolio in the country. Ghanaian authorities protested about being left out of the discussion and accused Kosmos of handing over the country’s exploration data to a third party without going through proper procedure.


Cameroon, Egypt To Launch Licencing Round in 2018

President Paul Biya will take advantage of the Cameroon Oil & Gas Summit 2018 to be held in the capital city of Yaoundé from 6-8 February 2018, to launch the country’s next licencing round.

The summit is being organised with the official support from the country’s Ministry of Industry, Mines & Technological Development.
Meanwhile, Egypt says it will launch a lease sale for blocks in the Red Sea, after an ongoing seismic acquisition programme is concluded in the area. The launching is expected to take place before the end of Second Quarter 2018.

Cameroon and Egypt differ widely in their approaches to acreage licencing.

Whereas the Cameroonian government prefers negotiations, which means that this proposed bid round is out of the norm, Egyptian authorities could be described as perennial bid rounders.

In Cameroon, next February, the blocks on offer will be from the eight blocks that are not currently being operated. They include Etinde Exploration, Kombe Nsepe, Tilapia, Ntem, Elombo, Bolongo, Bomana Exploration and Bakassi.

In Egypt, the blocks that will come on offer depend on the results of the 10,000 km 2D long-offset broadband multi-client TGS-NOPEC and Schlumberger project, which commenced in mid December 2017. The project will comprise acquisition of a seismic survey. Advanced new acquisition and imaging techniques will provide better illumination of complex subsalt structures. The project will integrate all legacy seismic and non-seismic data. Acquisition commenced mid-December 2017 and is expected to complete in late Q1 2018.


Equatorial Guinea Is Excited About Only Four

By Sully Manope

Equatorial Guinea is not expecting all the seven companies which won acreages in its last bid round to get up to speed with their proposed work programmes.

The country’s oil patch is littered with stories of several companies which picked up assets and did not implement a robust work programme, let alone drill a single well, even though they were obligated to, for, in cases, close to a decade.

Which is apparently why Gabriel Mbaga Obiang Lima, the Minister of Petroleum, chooses to talk up only the companies that he sees, with their track records, are more likely to do the work.

In three conferences in the last three months, he has talked excitedly about Kosmos Energy’s entry into the country, ExxonMobil’s sign-on into a new acreage and Ophir Energy’s winning of Block EG-24.

Of these three companies, only Ophir got its own new block through the process of the last bid round. Kosmos got EG-21, S and W by discretionary awards and bought out Hess from the Ceiba and Okoume fields. ExxonMobil got Block EG -11 also by negotiations with the authorities.

Equatorial Guinea knows that there are questions around the other six (apart from Ophir), who won in the bid.Atlas Petroleum, which is partnered with South Africa’s Strategic Fuel Fund for Block EG-10, is well known for sitting on assets without taking them any closer to drilling, let alone development.

Given its pedigree in EQ Guinea, where it sat on Blocks until bigger independents came in to farm in at least five years after it had been awarded the acreages, it is surprising that it won this time again.Atlas Petroleum has repeated this pattern all over Africa.

Offshore Equator Plc, which won Block EG-23 is unknown; Taleveras, which picked up Block EG-07, is an oil trader trying to feel its way upstream. Its oil trading business is not anywhere on the scale of Vitol or Glencore, who have been acquiring upstream acreages too, but have the deep pockets to purchase upstream technical expertise.

Elenilto won Block EG-09. It’s an Israeli group involved in a range of activity from real estate to renewable energy, is relatively a novice in oil and gas. Its only hydrocarbon asset is the Senegal Offshore Sud Shallow Block (SOSSB), on which it has announced no work programme. One company that looks, from a distance, a little earnest is Clontarf Energy, which won Block EG-18.

© 2018 Festac News Press Ltd..