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ENI Farms Down A Little in Deepwater Kenya

Italian explorer ENI has concluded an agreement with Qatar Petroleum (QP) that will see the Qatari national hydrocarbon company acquire a 13.75% share in the exploration blocks L11A, L11B and L12, in deep offshore Kenya. The proposed deal is pending subject to the approval of the Kenyan authorities.

Blocks L11A, L11B and L12 are located in water depths ranging between 1,000 and 2,700 metres, cover a total surface of about 15,000 square kilometres and hold high exploration potential. ENI and TOTAL currently hold 55% and 45% interest share in the blocks respectively, with ENI acting as the operator. QP would acquire 25% interest share in each of the blocks, of which 13.75% from ENI and the remaining from TOTAL. Accordingly, the composition of the joint venture should become ENI 41.25%, TOTAL 33.75% and QP 25%.

ENI has been present in Kenya since 2014, through its subsidiary ENI Kenya, but has not drilled a single well on the blocks.

We Were Wrong: OML 11 Renewal Isn’t Concluded

By Fred Akanni, Editor in Chief

Anglo Dutch major Shell has not concluded negotiations with the Nigerian Government regarding the renewal of its licence to Oil Mining Lease (OML) 11 for the next 20 years.

NNPC, the state hydrocarbon company, has also not taken over operatorship of the asset as directed by President Muhammadu Buhari.

The status update is simply: Shell, (ENI and TOTAL)’s combined 45% stake in the asset has not been renewed.

The very widespread assumption that the companies’ licence to the acreage was renewed stems from the widely distributed copy of the March 4, 2019 letter from Abba Kyari, President Buhari’s Chief of Staff, directing the NNPC to take over operatorship of the entire OML 11, “and ensure smooth re-entry, given the delicate situation in Ogoniland”.

Bouyed by comments from NNPC Public Affairs that Shell had not lost the lease outright but had only lost operatorship, public assumption grew that the company’s 30%, as well as the 15% belonging to TOTAL and ENI, had been renewed. But Shell officials, reacting to an Africa Oil+Gas Report story last Friday, noted that the true status of OML 11 wasn’t reflected in that story. “Please NOTE that OML 11 renewal discussions are still ongoing”, wrote Bamidele Odugbesan, the company’s Media Relations Manager.

The issue has dragged for long.

In 2017, Shell made an early application for renewal of licences of 17 onshore acreages that were due to expire in 2019. By mid-2018, t h e company had succeeded in getting 13 of them approved by the DPR for renewal, including OMLs 17, 20, 21, 22, 23, 25, 27, 28, 32, 35, 43, 45 and 46. OMLs 31, 33 and 36 were denied approval, while the Department of Petroleum Resources DPR, the regulatory agency, recommended to President Buhari, who doubles as the Minister of Petroleum, that OML 11 needed to be cut up into three because it was too large.

A new regulation, introduced after Shell had been awarded the acreage in its present form in 1989, instructs that no acreage should be larger than 1,260 square  kilometres (sq km). OML 11 is a sprawling property occupying 3,036sq km, which was why the DPR wanted to carve it up into three parts. Shell contested the DPR’s decision, arguing that “the proposal would unduly punish” the company, which had conducted operations in the asset “legally and in full compliance with the law”. DPR officials sent their proposal to the President anyway, and the regulator was granted the request to cut up the acreage. It was in the week that the agency was expected to submit the proposed new acreages that the NNPC received the instruction to take over operatorship of the entire acreage.

After the initial refusal by DPR, the renewal of licences of OMLs 31, 33 and 36, had been effected, which means that Shell has had licences to 16 of the 17 acreages renewed. Only OML 11 remains.



First E&P Wins the Most Contested Acreage in Ghana’s Licencing Round

The Nigerian Independent, First E&P, has pulled ahead in Ghana’s keenly contested first licencing round, winning Block GH_WB_02, or Block 2, one of the three blocks available for competitive bidding.

The other winner so far announced has been the ENI/VITOL partnership for GH_WB_03 or Block 3. The winner of GH_WB_04, or Block 4 has not been announced.

The remaining two of the five blocks on offer are expressly for direct negotiations.

Ghana’s Ministry of Energy received 15 applications for Block 2, the highest number for any block.

First E&P and its local content partner Elandel Energy (Ghana) Limited have been invited for negotiations on the detailed terms of the Petroleum Agreement.

First E&P is one of the smallest four out of the 16 companies that submitted 60 applications, in a list which features ExxonMobil, ENI, BP, TOTAL, Cairn, Equinor, Tullow, Kosmos, Sasol, CNOOC, Qatar Petroleum, Harmony Oil and Gas Corporation, VITOL, Global Petroleum Group, Aker Energy.

If it finalises the Petroleum Agreement, this eight year old company will be the fifth Nigerian independent with interests in an acreage in Ghana. The four others are operators: Amni, Oranto, Brittania U, Sahara. None has advanced much in their work programmes even though they’ve held the assets for more than five years.

First E&P holds a 10% of NDWestern, which in turn has 45% of the Oil Mining Lease (OML) 34, in Nigeria’s Western Niger Delta basin. It is the operator of OMLs 83 and 85 and is in partnership with Dangote’s West African E&P, in OMLs 71 and 72.

The two Blocks for direct negotiations in Ghana’s ongoing licencing round are (GH_WB_0S and GH_WB_06), or Blocks 5 and 6, both located in ultradeepwater (>2,500metre water depth).

All the five blocks are in the offshore Western Basin.


ENI Grabs One More in Ghana

Italian operator ENI(70%) and its partner Vitol (30%) have been awarded rights to Block WB03, located in the medium deep waters of the prolific Tano Basin, offshore Ghana.

ENI will be the Operator of the license and besides Vitol the Joint Venture will include the Ghana National Petroleum Corporation (GNPC) and a local registered Company that will be identified during the phase of contract finalization. The Contract award is subject to approval from the Authorities.

This award comes as an outcome of Ghana’s first international competitive bid round, in which 5 Blocks have been put on offer in water depths ranging from 100 to 4,400 m.

In Ghana’s Tano Basin ENI owns rights to the Development Areas of Sankofa and Gye Nyame as well as to the Exploration and Production area of CTP-Block 4. The new block is located approximately 50km south-east from the FPSO John Agyekum Kufuor (JAK) that is currently producing oil and gas from Sankofa Field. The proximity of these infrastructures will became synergic in case of new discoveries in Block 3.

Ghana is among the key Countries for Eni’s organic growth. The company has been present in the Country since 2009 and accounts currently a gross production of about 70,000 barrels of oil equivalent per day.



Uganda Puts Five Acreages on the Auction Block

Bidding process to last five months..

The Ugandan government started its second licensing round by offering five acreages in its proven Albertine Basin.

Irene Muloni, the country’s Minister for Energy and Mineral Development, announced the offering at the East African Petroleum Conference and Exhibition, in Mombasa, Kenya.

“Following this announcement, the Ministry will issue a Request for Qualification (RFQ) inviting interested firms and/or consortia to submit applications within a period of six months,” Mrs. Muloni told the congregants at Pride Inn, Paradise Beach Resort & Spa.

“Upon evaluation of the applications the successful firms/consortia will be issued with bidding documents comprising the model production sharing agreement and data sale regulations among others”.

Uganda is assuming that current, relatively high oil prices will help draw E&P companies to the offer, the second round in four years.

Muloni noted that the investment climate in Uganda was very conducive for investment singling out peace and security, infrastructure development, tax incentives and good human resource made of youthful and educated population.
The five blocks include; Avivi with an area coverage of 1026square kilometres, Omuka (750square kilometres), Kasuruban (1285square kilometres), Turaco (637square kilometres) and Ngaji (1230square kilometres).

The bidding process will take five months and result in the negotiations and signing of production sharing agreements between Government and the successful bidders. The licensing round is expected to be concluded with the award of Petroleum Exploration Licenses to successful firms by December 2020.

TOTAL Ties Up With Oxy For Anadarko’s African Pie

French major TOTAL has reached a binding agreement with American independent Occidental to acquire Anadarko’s assets in Africa (Algeria, Ghana, Mozambique, South Africa) for a consideration of $8.8Billion, in the event of a successful completion of Occidental’s ongoing bid for Anadarko.
The transaction is contingent upon Occidental entering into and completing its proposed acquisition of Anadarko and to approval by the relevant authorities and is expected to close in 2020.

The assets to be acquired are:
Algeria: 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine basin in which Total already owns 12.25%. These fields represented a gross production of three hundred and twenty thousand barrels of oil equivalent per day (320KBOEPD) in 2018.

Ghana: 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143KBOPD in 2018,
Mozambique: 26.5% participating interest and operatorship in Area 1 where a 12.8 million tonne per year LNG project is largely derisked and close to sanction. Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two train project which is expected to come into production by 2024,
South Africa: exploration licences, close to Total’s recent Brulpadda discovery.
“Overall, these assets represent around 1.2BillionBOE of 2P reserves, of which 70% is gas, plus 2BillionBOE of long term natural gas resources in Mozambique. 2018 equity production was 96KBOEPD and is expected to grow to around 160KBOEPD by 2025”, TOTAL says in a release.

“If completed, the acquisition of Anadarko by Occidental offers us the opportunity to acquire a world class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent. We have said consistently that our M&A activities will add value by playing to our strengths and focussing on upgrading our portfolio. This is exactly what we would do here. We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner. We would also be able to generate value through adding volumes to our growing LNG portfolio where we are already the 2nd largest private player. We have demonstrated the success of this strategy through the recent acquisitions of Maersk Oil.” Patrick Pouyanne, Chairman and CEO commented on the announcement.

“TOTAL is committed to execute smoothly this transaction, should Occidental be successful in its offer to acquire Anadarko. The proposed transaction is a win/win for TOTAL and Occidental. TOTAL would get access to around over 3Billion BOE of resources and Occidental would be able to strengthen its post completion balance sheet by monetising immediately the international assets of Anadarko.”

Despite the capital investment in Mozambique LNG, the acquisition is expected to be free cashflow positive from 2020 even at a Brent price of less than 50 $/b and to generate more than 1Billion $/year of free cashflow from 2025 onwards after start-up of Mozambique LNG, the release says.

Chevron Finally Pulls Out of South Africa

US major Chevron, has finally pulled out of South Africa.

It is official. The company was never keen on the country’s upstream. And now, the authorities have finally approved its offloading of its downstream assets for a total $1Billion to a vehicle controlled by Glencore, the oil trader.
The sale had dragged on for one year.

In March 2018, South Africa’s Competition Tribunal conditionally approved the acquisition of Chevron SA by Sinopec, one of China’s three oil and gas behemoths. But Glencore out-foxed Sinopec when it bankrolled Off The Shelf Investments — Chevron SA’s empowerment partner — to exercise its right of first refusal of the deal.

With a $1Billion loan from Glencore, and another conditional approval from the tribunal, Off The Shelf went on to acquire Chevron SA and renamed it Astron Energy. The deal was always that the Black Economic Empowerment (BEE) partners would later transfer the controlling stake to Glencore.
Chevron SA’s assets include properties in South Africa and Botswana: a 110,000Barrels Per Day (BPD) refinery, a lubricants plant, 820 petrol stations, and oil storage facilities.

Glencore SA Oil Investments, the trader’s wholly owned subsidiary, says it is looking forward to working with the Astron management team, led by CEO Jonathan Molapo, to drive growth in the businesses as well as increasing the BEE ownership and localisation of the business in SA.”
Off The Shelf will retain its minority shareholding of 23% in Astron, and has the option to increase this to 30% — which will help Glencore meet the Competition Tribunal’s condition that it bolster the empowerment shareholding to 35%.

Until this transaction, South Africa and Botswana had been the last standing hosts of Chevron’s downstream assets.

But the company’s upstream and midstream presence in the region will be buoyed by its take over of Anadarko, which gives it 26.5% in Area 1 offshore Mozambique, with estimated 75Trillion cubic feet of gas about to be developed through LNG projects.

German Oil Force Has Now Come To Be

In the twilight days of the age of fossil fuel, Deutschland is pulling its weight.

Wintershall Holding GmbH (Wintershall) and DEA Deutsche Erdoel AG (DEA) have completed their merger.

The combined company, Wintershall Dea, of German nationality, says it is now the leading independent gas and oil company in Europe.

“We are a European champion and are making an important contribution to Europe’s energy security,” explains Mario Mehren, Chairman of the Board of Executive Directors and Chief Executive Officer (CEO) of Wintershall Dea.

“Following the approvals granted by all relevant authorities, shareholders BASF and LetterOne successfully completed the merger on May 1, 2019. The merger was agreed in September 2018”.

Germany is not represented in the rank of oil majors. BP is British, Shell is combined Dutch and British, TOTAL is French, Chevron and ExxonMobil are American and ENI is Italian.

In terms of size, Wintershall Dea may not be as large as the top American independents; ConocoPhillips, Apache, Anadarko…But at least, in these waning days of the hydrocarbon era, it can boast of being a little king in the European Trade Area.


More Data For Gabon’s Licencing Round

CGG has completed its acquisition of 9,800 line kilometre long-offset broadband two dimensional (2D) multi-client seismic survey “in the highly prospective Gabon South Basin”, the company reports. “Fast-track data sets will be delivered in batches from the end of April 2019, giving interested oil companies sufficient time to understand offshore petroleum systems and appraise blocks offered in Gabon’s 12th offshore licensing round”

Deadline for licence applications is September 30, 2019.

CGG has claimed credit for two “successful” wells drilled on acreages granted during Gabon’s 11 th round because they were drilled on data it acquired on those acreages.
One of the wells, Boudji-1, drilled by the Malaysian state hydrocarbon company Petronas, is located in the south Gabon basin.

The just completed data set, CGG says, will help define the full extent of existing and new plays in the region. “It will also aid in understanding the thickness variations in the sediment overburden for source rock and maturity analysis”, CGG touts. “Broad bandwidth data will not only increase resolution and improve characterization of the turbidite systems that represent potential exploration targets, it also provides deep imaging penetration with low frequencies to help describe the nature of the crust. New insights from this data will expand and update CGG’s Gabon South Basin JumpStart™ integrated geoscience package”.

Nigerian Government Revokes Licences of Seven Oil Blocks

By Prospect Mojiddo, in Warri

The Nigerian government has approved the request to revoke the licences of six Oil Mining Leases (OMLs) and one oil prospecting lease (OPL), in the onshore, shallow water and deepwater Niger Delta basin.

The request was made by the country’s Ministry of Petroleum Resources.

The assets are all held by Nigerian companies.

Revocation is the ultimate penalty for defaulting on royalty payments and the Nigerian government has not always be keen to wield the stick. Indeed, the country is perhaps the most lenient in Africa, in applying the full force of the law on oil acreage rent, especially when it concerns local E&P

The acreages affected include OML 98, an onshore asset located on the western flank of the Niger Delta, held by Pan Ocean, a company controlled by the Nigerian businessman Festus Fadeyi; OMLs 120 and 121, held by Allied Energy, which has changed its name to Erin Energy and has now gone bankrupt; OML 108, held by Express Petroleum, but whose technical activities are managed by Shebah Exploration & Petroleum, a company owned by Seplat Chairman A.B.C Orjiakor and OML 141, held by Emerald Resources whose principal, Emmanuel Egbogah, passed on recently..

The only OPL among the seven is OPL 206, held by Summit Oil International, a company founded by the late Moshood Abiola, politician and businessman, whose victory at the country’s Presidential elections in 1993 was annulled by the Military.


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