All articles in the Farm in, Farm Out Section:


Are Independents On The Retreat in Africa?

Independent E&P companies, domiciled in Europe and America, have been through so much in the last three years that they are giving up the African play to the majors. BG has been wrapped up in the voluminous folds of Shell. Tullow has sold its prime position in East Africa to TOTAL. BP will operate what used to be Kosmos led acreages in Northwest Africa.

Cairn Energy is still the lead hunter in that corner of the continent. Africa’s first and second Floating LNGs will be operated by independents. But, in general, are Africa focused Western independents still the continent’s wildcatters? Are they still the markers to where the opportunities lie?

Find out in these pages.

The 2017 edition of Independents’ Day, this magazine’s once-a -year review of activities of foreign independent companies operating in Africa, pays close attention to the results of these companies’ exploration ventures in little known basins on the continent, as well as details of plans for the near term.


SDX Grabs The Gharb Centre

The Gharb Centre exploration permit, covering an area of over 1362 km2, has been awarded to SDX for a period of eight years, with a firm commitment from SDX for the acquisition of 200km2 of 3D seismic, and two exploration wells within the first four-year period.

The Gharb Centre area comes with a considerable quantity of recently acquired 2D and 3D seismic which has established multiple target horizons throughout the Miocene-aged strata, similar to what the Company produces from in its surrounding licenses.

The activity at Gharb Centre complements the work programmes at both Sebou and Lalla Mimouna, where development and exploration wells are planned for H2 2017, as previously announced. Pre-drilling activity is now underway in both permits where the tendering process for drilling rigs and associated services has been initiated. SDX has also received partner approval for seven drilling locations in these permits and is targeting a late Q3 2017 start date for the program.


Agip To Contribute Two Fields To Marginal Bid Round 2017

By Wanokabo Okaikai, in Lagos

For the first time ever, undeveloped discoveries in Nigerian Agip operated acreages may be awarded as marginal fields.
Two accumulations operated by the company are likely to be part of about 40 fields expected to be on offer, when the Nigerian government launches the much awaited marginal fields bid round later in the year.

Sources in Nigerian Agip, the Nigerian subsidiary of the Italian giant ENI, confirm that preliminary data from two of the company’s operated undeveloped discoveries are in the “bid basket” of the Department of Petroleum Resources, the agency responsible for conducting the bid round.

Agip has been unable to “participate” in marginal field awards since the exercise formally began in 2002 because, of all the majors, it has the least prospective acreages in Nigeria, especially Onshore, where the bulk of undeveloped discoveries referred to as marginal fields are located.

Only three of the five oil majors operating in Nigeria contributed fields in their acreages to the basket, during the in the landmark 2002/2003 marginal field bid round.

ExxonMobil did not contribute any field in those awards but has, in the past 15 years since then, “given” up two marginal fields: Okwok and Ebok to the Nigerian government, in furtherance of the cause, which is to help boost indigenous capacity.
Outside the 2002/2003 awards, Shell has contributed two more marginal fields. Ubima and Otakikpo were awarded by the Nigerian state in 2012, outside the process of a bid round, a situation that was severely criticised.

The Marginal field round is expected to be declared open latest September 2017. Click here for a map showing the likely bid round candidates.


AP Counters TOTAL’s March On Senegal

By Sa’ad Bashir, in Dakar

A small, non-producing E&P independent, is attempting a David on the French major

TOTAL’s announcement that it had entered into an agreement with the Senegalese government, on the Rufisque Offshore Profond (ROP) block, was countered by African Petroleum, less than 24 hours after the major’s claim on the block.

The Australia listed minnow said it had a subsisting agreement on ROP with the Senegalese government; the same authority that TOTAL claims it had a deal with. “Under the terms of the ROP PSC, the block remains active unless and until a termination procedure is enacted by the Republic of Senegal”, AP wrote in a statement. “To date, the Republic of Senegal has not validly enacted such termination procedure, and accordingly the Company reserves its rights under the ROP PSC”.

TOTAL had announced, on May 2, 2017, that under its agreement with the Republic of Senegal, it “will be the operator of the 10,357 square kilometer block with a 90% interest alongside Société Nationale des Pétroles du Sénégal (Petrosen), holding the remaining 10%.”

The Senegalese government had not offered a rejoinder to AP as of the time of this writing. TOTAL takes the Senegalese acquisition seriously; the agreements were signed by Patrick Pouyanné, TOTAL’s Chief Executive Officer and the Senegalese President Macky Sall . Both men were present at the Press Conference announcing the agreements, which also had Prime Minister Mahammed Boun Abdallah Dionne.”We have signed two new agreements to explore, look for oil and gas in offshore Senegal,” said Pouyanné.

TOTAL actually made some commitment at the conference.  Mr. Pouyanné said the company intended to inject $ 100Million, although he did not give a time frame for the investment. Senegal has been at the centre of the recent rush for the Northwest African margin.

African Petroleum may have lost the asset for apparently sitting on it for so long without activity. It has been the 90% holder of ROP for over six years. The best that it has done was to purchase 1,800 sq km of three dimensional seismic data from Petrosen, which it was reprocessing. AP apparently hoped that, with a slew of discoveries in the neighbourhood, a well heeled E&P operator would come along and farm into the asset. Instead, the government chose to award it to one of Europe’s largest oil companies.


Uganda’s Licencing Round Unravels

Two of the four companies that won the three acreages awarded at the close of Uganda’s 2015/2016 licencing round have discontinued with the process.

Waltersmith Petroman Oil Limited, awarded the 425 km2 Turaco Block in Ntoroko District, has opted out because of what it calls “unfavourable terms”.

Niger Delta Petroleum Resources(NDPR), which was paired with Oranto Petroleum International on the 410 km2 Ngassa block in Hoima district, said from the onset that it did not want to do get into the block unless it was granted operatorship. The company hasn’t had a conversation with any Ugandan official in the last four months.

Follow this link for fuller details of the report.


S/Sudan Opens Up Blocks B1 and B2 To Negotiations

Talks With TOTAL &Co Collapse

South Sudan’s Ministry of Petroleum says it welcomes the interest of investors for direct negotiations on oil and gas in blocks B1 and B2. The announcement comes after negotiations broke down with the French oil and gas company Total E & P due to irreconcilable differences. 

Officials of the Ministry of Petroleum met with representatives of the French major TOTAL in Kampala, Uganda between April 10 and 21, 2017. Also involved in the negotiations to develop an exploration and production sharing agreement (EPSA) for the blocks (B1 & B2) were UK independent Tullow Oil Private Limited Company and the Kuwait Foreign Petroleum Exploration Company (KUFPEC). The negotiations reached an impasse over the proposed exploration period and cost recovery limit. 

“Following lengthy discussions with representatives of the company Total we have decided it is in the best interest of South Sudan to open opportunities to other potential investors,” said Ezekiel Lol Gatkuoth, Minister of Petroleum of South Sudan. “We had hoped for a favorable outcome but we believe these large and highly prospective blocks need a fast and ambitious development program to achieve their full potential. B1 and B2 are now open for direct negotiation.”

Blocks B1 and B2 were once part of the 120,000 square kilometer area known as Block B, which was divided into three licenses in 2012. The area is highly rich in hydrocarbon deposits but has experienced very little exploration. In March 2017, Pan African independent Oranto Petroleum Limited signed an exploration and production sharing agreement (EPSA) with the Government of South Sudan for Block B3. The area covers 25,150 square kilometers and has estimated reserves in place of more than 3 billion barrels.

“The resource base in these blocks are enormous and we need committed operators who are ready to invest and work with our government to comply with the laws of our country,” said the Minister. “South Sudan is creating an enabling environment for companies to operate. We want companies to invest, explore, produce and we are ready to offer incentives to investors.”
The Government of South Sudan has adopted a very pro-business stance with the expectation that aggressive investments in the petroleum sector will stimulate the economy. In 2017, the Ministry of Petroleum announced it was planning to double its total oil production by next year. South Sudan currently produces 130,000 barrels per day but can produce as much as 500,000 barrels per day. 

The Ministry of Petroleum invites companies to negotiate directly on Blocks B1 and B2. Government officials will be present at the Africa Oil & Power conference in Cape Town onJune 5, 2017 to advance discussions with interested parties.


Nigeria’s Marginal Field Bid Round May Be Launched in September 2017

Minister of State prefers to kick start the process at the OTC in May 2017
Nath Ojugbajue, in Abuja

The Nigerian Government is unlikely to have a full auction of all open exploration blocks in 2017, if the Petroleum Industry Bill (PIB) legislations are not passed before the end of the year, but the Minister of state for Petroleum thinks he can at least go ahead with a bid round for marginal fields.
“He is eager to get a bid round done this year”, sources at the Ministry of Petroleum (MoP) affirm, “but the one without any inhibition is the marginal field round”.

→   Read the rest of this entry


ENI Wins More Assets In The Tano Basin

Africa’s leading hydrocarbon producer has snagged more assets in a prolific part of the continent’s deepwater.
Italian explorer ENI has been awarded 90% interest in two new exploration blocks, in the Ivorien part of the Tano basin, which has proven commercial in nearby Ghana.

With this March 2017 acquisition of Cote d’Ivoire’s CI-101 and CI-205, covering an area of approximately 2,850km², ENI is following up on its acquisition, in 2016, of the Cape Three Point Block 4, in the same Tano Basin, in neighbouring Ghana.
ENI’s interest in Cote d’Ivoire’s segment of the Tano basin suggests that the company is evaluating the entire Basin, which straddles the two countries.

Ghana and Cote D’Ivoire have dragged themselves to court over oil production in this basin, with Cote d’Ivoire arguing that it is entitled to some of the oil being produced in Ghana’s TEN cluster of fields (operated by Tullow).

Whereas ENI’s Cape Three Point Block 4 is an exploratory tract, the company is developing another block in Ghana. The Sankofa-Gye-Nyamme project in the Offshore Cape Three Points (OCTP) is expected to come on stream by the third quarter of 2017, delivering, at peak, 45,000BOPD of oil and 180MMscf/d of gas.

ENI will operate the two newly awarded blocks in Cote d’Ivoire, with remaining 10% stake owned by Petroci, the state-hydrocarbon company.


NPDC Annexes OML 13

The Nigerian government awards a block outside the process of a bid round..

The Nigerian Petroleum Development Company (NPDC) has been awarded the Oil Mining Lease (OML) 13, in the south east onshore Niger Delta.

The 1,923 sq km block used to be operated by Shell, but was revoked along with a number of other blocks in 2005. Shell went to court, but ultimately gave up the asset.

It is not clear why such a petroleum producing property was awarded outside of the process of a bid round. OML 13 hosts the Utapate South and Ibibio fields, as well as a string of producing marginal fields including the Frontier oil operated Uquo, a gas accumulation and the 2,000BOPD Qua Iboe, operated by Network E&P.

NPDC is the operating subsidiary of the state hydrocarbon company NNPC and as an operating company, it is subject to the same laws of the country as any operating company.

Although the extant petroleum laws of the country allow the Minister of Petroleum to award Oil Blocks on discretionary grounds, the current bills at the Senate and the House of Representatives are in favour of competitive bid rounds as the way to grant assets to E&P companies.

“I can’t exactly comment on your query”, said Ndu Ughamadu, NNPC’s spokesperson, when asked about the award. “As you know, matters such as this are currently being discussed at the hearings of the National Assembly in Abuja and the DPR (industry regulator) is involved”.

What makes the award to NPDC more intriguing is the fact that the government has signaled intention to declare a transparent lease sale sometime in 2017, so why the hurry?


VOG Adds Bomono to the Douala Gas Network

Victoria Oil & Gas (VOG) Plc is on course of extending its gas network in Cameroon to include gas to be produced from the Bomono production sharing contract (Bomono PSC).

The company signed a farm-in agreement with Bowleven plc, operator of the Bomono PSC, which allows that gas produced from the Bomono PSC will be fed into the customer distribution network owned and operated by Gaz du Cameroun S.A. (“GDC”), a wholly owned subsidiary of VOG.

In the event, VOG will have 80% working interest in Bomono PSC.
VOG currently runs a 7Million standard cubic feet of gas per day (7MMscf/d) network which feeds power plants and industries in the city of Douala, the commercial hub of Cameroon.

“First gas supply to the GDC network is anticipated to start following granting of a Provisional Exploitation Authorisation (“PEA”) and other approvals”, Bowleven notes in a statement. “This Agreement, which has been negotiated by the parties over several months, aligns Bowleven’s intention of realising near term value from Bomono through commercial production of its Bomono gas deposit with VOG’s business of commercialising local onshore gas deposits using its established gas infrastructure and customer network”, the company explains, adding: “The transaction provides the ability to minimise the timescale to first production and optimises the proven advantages of Bowleven’s upstream expertise and VOG’s established gas supply business that feeds a diverse range of industries and the local power grid.

The initial plan is that gas currently suspended at Moambe be brought onstream and that further drilling be considered to supply the growing domestic market in and around the Douala area.

Farm Out Highlights
On completion, EurOil Limited (“EurOil”), a Bowleven subsidiary, will have a 20% working interest in the Bomono PSC and GDC Bomono S.A. (“GDC Bomono”), a wholly owned VOG subsidiary, will have an 80% working interest.
Bowleven will remain as operator of the project.

Gas from Bomono PSC will be sold to GDC less a tolling fee. The gas price paid will be a weighted average received by GDC for its total domestic sales less a tolling fee for use of the pipeline network.

The pipeline connection from the Bomono PSC to the main network will be managed and funded by GDC. GDC Bomono will complete the civil engineering works necessary for the gas processing plant installation at the Bomono site. The estimated capital cost for these works is US$6 million.

Bowleven has agreed to pay GDC Bomono 50% of any deficit, limited to a maximum payment of US$2 million, if the first 3 years of net income received by GDC Bomono is less than the development expenditure incurred.

EurOil will receive a 3.5% royalty from GDC Bomono’s production share of hydrocarbons, with an aggregate cap limiting the total royalty payments to US$20 million.

Bowleven will, on completion, also receive £100,000 worth of new ordinary shares in VOG based on the volume weighted average share price 10 days preceding the date of the Agreement, being 69.23 pence per share. It is the intention of Bowleven to retain these shares initially, but keep that decision under regular review as there are no restrictions on their disposal.
Asset Details:

The farm-out transaction relates to the Bomono PSC, onshore Cameroon. EurOil is operator of the Bomono PSC.

Bowleven completed extended well flow tests on the Moambe well that exceeded 7mmscf/d. The Moambe and Zingana exploration wells drilled at Bomono were then suspended as future producers.

As previously announced by Bowleven, the detailed prospect inventory prepared indicates there is 146bcf and 263bcf of mean un-risked GIIP in the Tertiary and deeper Cretaceous reservoir intervals respectively.

Additional Transaction Details:
The economic effective date of the transaction is 1 January 2017.
The above interests are expressed prior to the exercise of any back-in rights by the Cameroon State. Under the terms of the Bomono PSC, the Cameroon State has the right to take a 10% participating interest in development activity undertaken under an exploitation authorisation.

Completion is subject to, amongst other things:
The grant of a PEA over the Bomono PSC. The PEA application was submitted by Bowleven to the Cameroon authorities as requested following Ministerial approval for the award of a two-year extension to the Bomono PSC (to 12 December 2018);
The approval by the Cameroon Government of the assignment of the equity interest from EurOil to GDC Bomono; and
Should these conditions precedent not be satisfied by 30 June 2017, both Bowleven and VOG have the right to terminate the Agreement.

In the event that any of the resolutions requisitioned by Crown Ocean Capital P1 Limited at the forthcoming Bowleven General Meeting on 14 March 2017 are passed, VOG has the right to terminate the Agreement.

© 2017 Festac News Press Ltd..

Site by BluQuadrant