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Australian Junior Gets Approval For Increased Stake in Guinea Bissau

Swedish operator and its partner receive licence extension in this promising corner of the North West African margin

Australian minnow, FAR Limited,has been granted approval by Guinea Bissau authorities to increase its stake from 15 to 21.42% in Sinapa and Esperança oil blocks.

The approval reflects the fact that state-owned Petróleos de Guiné (Petroguin) has given up its shareholding until a discovery with commercial value occurs.

Petroguin will assume a shareholding of 10%if a discovery is made. FAR Limited and Svenska Petroleum Exploration AB, the operator, will then have stakes of 19.28% and 70.71% respectively.

The partnership obtained from the government a more favourable agreement regarding the investment needed for oil prospecting in deepwater, including the reduction of royalties to be paid to the Guinea-Bissau state if production begins, FAR notes in its statement. The partnership’s licences to the blocks have been extended by three years and will now expire on 25 November 2020, with obligation to drill at least one prospecting well and spend a minimum of $3Million on each licence, FAR says.

The Guinea Bissau government places a lot of hope on Svenska, the Swedish explorer, to make a significant discovery in in Sinapa and Esperança. The country, afterall, is located in the North West African margin, which has recently proven vast commercial hydrocarbons in Senegal and Mauritania.

TOTAL Takes Hold of East African E&P

Confirms our prognosis that the Majors are reclaiming the African E&P Frontier

With its $7.45Billion purchase of Maersk Oil, TOTAL has taken over the majority of the 2 Billion barrels sized undeveloped discoveries in East Africa.
Maersk holds 50% of the undeveloped discoveries in Kenya, which have been estimated at 750Million barrels. This sale comes less than eight months after TOTAL purchased 22% of the assets about to be developed in Uganda, fetching it 55% in the upstream part of the entire Uganda basin development project.

This means that TOTAL will be funding the majority share in expenses on the two pipelines that will export crude from Uganda (Hoima –Tanga) and Kenya (Lockhichar to Lamu).

The deal with Maersk is expected to close in 1Q 2018, subject to the consent of the Kenyan authorties. Maersk Oil’s parent, AP Moller-Maersk will receive $4.95bn in the form of Total shares, representing a 3.75% stake in the French major, and Total will also assume $2.5Billion of Maersk Oil’s debt.

TOTAL’s purchase of Maersk Oil, follows Shell’s 28 month old takeover of BG and confirms Africa Oil+Gas Report’s analysis of the retreat of independents from Africa’s E&P frontier, where the majors are extending their footprints.

Egbolom Is the Biggest Field On Offer In the Impending Marginal Field Round

Shell operated Egbolom field, in Oil Mining Lease (OML) 23, is the asset to have in Nigeria’s impending Marginal Field round.

Ibe Kachikwu, the Minister of state for Petroleum Resources, has proposed an asset sale this year and the country’s regulatory agency, the Department of Petroleum Resources, is working frantically to deliver on the call.

Of all the 40+ fields likely to be on offer, Egbolom, an onshore (Swamp) asset, located in the Central Niger Delta, has the highest estimated Ultimate Recoverable (2P) Reserves of 85Million barrels, a volume that is over 30% higher than the second largest field, which is located in the prolific south east shallow water Niger Delta.

The smallest field in the play is Chevron operated Obira field, located in OML 89.

Egbolom was discovered in 1982, and has lain fallow ever since. The Central Niger Delta swamp is the site of one of the most militant, oil theft and crude oil flow disruption activity in the entire Niger Delta basin.
Full marginal field reserves map can be accessed here.

DPR Unaware of Planned Handover of OML 11

The Department of Petroleum Resources, Nigeria’s regulatory agency, is unaware of any plan by Shell to hand over the Oil Mining Lease (OML) 11, the acreage which contains the Ogoni community, to a new divestee on Tuesday July 25, 2017.

There are whispers everywhere that the AngloDutch major has picked one of several companies vying to acquire the 45% stake belonging to Shell, TOTAL and ENI on this onshore eastern Niger Delta asset, which contains the troubled Ogoni area.

→   Read the rest of this entry

I Will Give More To Companies Like Platform Petroleum

By Emmanuel Ibe Kachikwu

“If you did this much, I have enough confidence in you to give you more responsibility”

It is very unique when a single individual along with his team puts up something as edifying as this. I’ve known Austin as the Managing Director of Seplat Petroleum then I saw him with Platform Petroleum, I was a bit confused. Now he goes by the tag name Advisor, a usual synonym for disguising heavy shareholders in oil parlance. I’m glad he’s giving back in a very big way and I urge everybody who’s an alumnus in every university in the country to follow suit.

It is significant in terms of what message he’s sending which is that Nigerian graduands study with the best tools in the best environment and produce the best results. “I congratulate Platform Petroleum and if you did this much, I have enough confidence in you to give you more responsibility and I’m going to work towards that”. I’m impressed with you and what you did and I’m impressed by the fact that you were one of the first to take advantage of the Marginal Field Allocation. I’m going to do what I can to ensure there’re more marginal field allocations to people like you.

In Houston I announced the Project 100, the whole idea is to identify 100 Nigerians who have the impetus, resources and skill set to be able take oil industry forward and do the very quick things. We’re beginning to search for those Nigerians and clearly you’re one of the people we’re looking for. Nigerians have shown they can do it. I’m looking forward to be able to announce soon what terminal date we’ll have for the production of FPSOs in Nigeria, such big type projects.

This morning at the Federal Executive Council, under the guidance of the Acting President, we approved the new Gas Policy for 2017 which is now official and we’re in the thresholds of approving a new Petroleum Policy and working very hard with National Assembly to finalize the PIB. The terrain today is now different, oil is no longer the commodity that we can take for granted in terms of pricing. Pricing has tumbled down to about a quarter of what it used to be, production has pummelled and no matter how much we try to fight as OPEC, we continue to suffer the pangs of price uncertainties and continual decline. Every country worth its salt is looking inward, in terms of investors.

It’s amazing how much Nigerian investors exist when you see the amount of fields bought up from the majors by Nigerians, you’ll realize we actually neglect our capacity. One of the things I’m committed to do under the Project 100 Theory is to create the right incentives for Nigerians to invest in their own country. Different from those investments, there’re certain very bold steps we must take.

Refining for example we’ve been having all these debates, but the reality is if we can’t refine our petroleum products in this country, it’s a major shame. And whatever it takes, I seek all your support in all of these, we must achieve those 2019 goal post. In terms of financing, we have changed the dynamics of the funding mechanism that allows the majors to move forward. We need to transmit some of those advantages to domestic producers and I’m hoping that in the next one month, the process will be completed and we’ll give you some advantages that we give the majors.

There’re lots of things to be done, we’re moving from oil to gas. Gas is a new equation but more importantly, we’re moving to aphilosophical base of not just producing oil and shipping out crude rather having to process as much of that into this country. Hopefully soon, we’ll be able to provide to our Nigerian populace, our work is cut out for us, there’s a huge amount of work out there. When we see this sort of effort that Austin has done together with the state, it is time to knock doors, it is time to say you must take coverage of this and begin to move forward it encourages all of us to move forward.

Speech delivered by Mr. Kachikwu, Nigeria’s Minister of State for Petroleum Resources on the occasion of his opening of a $0.6MillionGeoscience Teaching and Research Complex at the University of Nigeria, Nsukka.

Heritage Oil Reward Contravened Ugandan Law

By Ngong Oyok, in Kampala

Public officers who received money from President Yoweri Museveni for ostensibly helping the state to recover tax payments from Heritage Oil and Gas Ltd were in contravention of Ugandan law, the country’s parliament has noted.

President Museveni’s payment of $1.7Million (or Six Billion Ugandan Shillings) to 42 public officers who participated in the Heritage Oil and Gas Arbitration case, had caused a storm of criticism across the country. All over the media, radio, newspapers, TV and in the social media, commentators are calling it “The Handshake Scandal”.

A report, released last week by the Parliamentary Committee on Commissions, Statutory Authority and State Enterprises (COSASE) said a team, representing those officers, met the President at his country home in Rwakitura on May 17, 2015 and “requested for a reward to which the president agreed”.

The Ugandan Parliament assigned the committee, on January 19, 2017 to, among others, investigate the claims that the public officers solicited for the handshake, the basis of determination of the beneficiaries of the bonus payment and in effect examine whether all proper and legal procedures under the laws of Uganda were followed in making the payment.

The committee evaluated letters by the Attorney General dated April 13, 2015 and that of the President dated November 16, 2015 which all confirmed that the team that had met the President had solicited for money as a reward for their efforts which led to the winning of the capital gains tax case.

Mr.Museveni had defended his payment of the money to officers involved in winning the capital tax gains case against Heritage Oil, because, in his view, their action had helped recovered, for Uganda, a lot of money.

The President was particularly excited that a Ugandan legal team had won the landmark $434MM (over Sh1.1 Trillion) tax case in London against Heritage Oil and Gas Ltd. A three-member arbitration team ruled against the three core tax claims by Heritage, which was contesting the decision by the Uganda Revenue Authority (URA) to tax their $1.45Billion transaction with Tullow Oil.

Ms Doris Akol, the Commissioner General Uganda Revenue Authority (URA), was head of URA’s legal department, in April 2013, that led the court battles against both Tullow Oil and and Heritage and won the case in London, which “conclusively affirmed that oil transactions will be taxable. It means that such deals will be subject to a 30% capital-gains tax for Uganda”, according to the Ugandan newspaper New Vision.

Wouldn’t this be enough justification for President Museveni to reward officers involved in such a landmark case?
COSASE, apparently, doesn’t think so. The report by the legislators led by the committee chairperson, Abdul Katuntusays otherwise. The report states that all the beneficiaries denied soliciting for the reward apart from Ali Ssekatawa, who incidentally was the lead lawyer for the state at the London hearing.

The beneficiaries gave basis for the reward as Article 98 and 99 of the Constitution of the Republic of Uganda, suggesting that the President being the fountain of honour exercised his executive powers and directed that the team be given the reward.

But despite the President informing the committee that it was his decision to reward the team, “members found it morally wrong and setting a bad precedent for other public servants having confirmed that the reward was a solicitation”, according to the committee report.

The report pointed out, “According to Black’s Law Advanced Learner’s Dictionary, solicit refers to the act or instance of requesting or seeking to obtain something.”
Those implicated for soliciting the reward include; the Attorney General, Fred Ruhindi, URA Executive Director, DorisAkol, Allen Kagina, Ali Ssekatawa, Peter Muliisa, Martin Mwambutsya, Francis Atoke, George Kalemera, Honey Malinga and Ernest Rubondo.

The committee noted that the reward was in contravention of the Constitution particularly Articles 98 and 99 as relied on by the beneficiaries, the National Honors and Awards Act, 2001, the Public Service Standing Orders and the URA Human Resource Manual.

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.

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