All articles in the Farm in, Farm Out Section:

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.


Angola Returns the KONS and the CONS to the Bid Basket

By Sully Manope, in Windhoek

Angola is putting the acreages it offered in the botched 2015 Bid Round in the bid basket from 2020 to 2023.

The onshore Congo Basin (CON series) and Kwanza Basin (KON series) blocks, which were issued to local Angolan companies in 2016, are in the basket for the period.

CON1, CON5, CON6, among others in the onshore Congo Basin and Blocks KON5, KON6, KON8, KON9, KON17, KON20 in the Kwanza Basin, are among the 31 blocks to be in the open Public Tender.
Recall that these onshore blocks were the main constituents of the 2014/2015 bid round, advertised internationally, with roadshows in Houston and Singapore, but which after so much claim to “internationality”, the Angolan government turned around and awarded to local companies in 2016.
A year after, with nothing much done about the blocks in terms of funding, the state hydrocarbon company Sonangol, annulled the awards.
The proposed “2019 Angolan licencing round” that everyone has been talking about, however only starts in 2019 with Nine (9) blocks offered in the Namibe Basin and one block in the Benguela Basin, all under a public tender.
The remaining 45 blocks will be offered between 2020 and 2025.
Please see details.

Did Buhari Change Operatorship Because Shell Wanted To Sell OML 11?

The one thing that is unclear about the decision of Muhammadu Buhari, the Nigerian President, to remove operatorship of Oil Mining Lease (OML) 11 from Shell and grant it to NNPC, the state hydrocarbon company, is whether he did so in consideration of Shell’s ongoing moves to divest its equity in the asset after it had been renewed.

Or whether the decision was due to pressure by the NNPC.

Or, for that matter, Mr. Buhari was unaware of Shell’s proposed divestiture, but was convinced the AngloDutch major wasn’t doing much with the asset because of the challenges it has operating in Ogoniland, which occupies about a quarter of the block.

OML 11 is the last of the 15, Shell-operated acreages, whose expiring licences have been approved for renewal by the Department of Petroleum Resources (DPR), the country’s petroleum regulatory agency and a parastatal of the Nigerian Ministry of Petroleum Resources.

While the renewal of 14 blocks had been completed, that of OML 11 was kept on hold because it is larger than the maximum areal size allowed for a Mining Lease in the DPR’s current regulations.

And the DPR was working on carving the acreage into three, when a letter signed by Abba Kyari, President Buhari’s Chief of Staff, emerged in circulation, instructing  NNPC/NPDC to confirm by May 2, 2019, that they have taken over operatorship of OML 11.

Shell has been in advanced conversation with Transcorp/Tenoil, for the purpose of divesting its equity in OMLs 11 and 17 to the latter, a Nigerian E&P group controlled by the businessman Tony Elumelu.

Officials at the Nigerian Ministry of Petroleum Resources are aware that Shell was in discussion to sell its equity in the lease after renewal, but they argue that the Ministry’s renewal processes are based on the fulfilment of the terms of holding the asset. “Shell can take us to court if we don’t renew”, say some ranking officials in the Ministry.

Officials at DPR received the news of the change of operatorship like most other people: via a grainy, scanned letter on the whatsapp messenger, on Thursday, March 14, 2019. They couldn’t immediately confirm it was authentic. A fuller article on this issue, including detailed analysis of opportunities, risks and challenges in Nigerian oil acreage administration, is published in the March 2019 edition of the Africa Oil+Gas Report, out soon…


Equatorial Guinea is Putting 27 Blocks on Offer

By Sully Manope, in Calabar

Equatorial Guinea’s 2019 Licencing Round, to be launched on April 2, will have 27 Blocks on auction.

25 of these blocks are offshore. Two are onshore.

The licencing round is for both hydrocarbon blocks and mining (minerals) concessions.

A high point of the sale, the third in seven years, is the presence, in the basket, of the former Block R, containing the Fortuna Gas field which was being developed by Ophir Energy. The field was to be monetised through a Floating LNG project, an initiative which had gone far. The project had secured an offtaker and an agreement had been signed for the vessel. But securing funding for the construction of the plant had been difficult.

The Equatorial Guinea government disallowed a renewal of that Block at expiry on December 31, 2018. Now it has changed the name of the block to EG-27.

Another asset on offer with existing discoveries is EG-23, which lies directly north-west of Marathon Oil operated Alba gas-condensate field and adjacent to the maritime boundary with Nigeria. It hosts the Estaurolita field, which is an undeveloped gas discovery, and Tsavarita field, which has commercial oil accumulations. A third prospect in the block is Sodalita West which is a non-commercial find.

The government is encouraging investors to take a look at the country’s segment of the Douala Basin, which straddles Equatorial Guinea and Cameroon.

Equatorial Guinea is an active Bid Round proposer. If the number of bid rounds it organises per decade is positively correlatable with hydrocarbon discovery and exploitation, the country should be producing several times the 175,000BOPD it currently does.


Sasol Seeks To Acquire More Upstream Assets in West Africa

Sasol is looking to acquire more upstream acreage in West Africa.

The company’s only operated upstream acreages outside South Africa are in Mozambique. It has equity in upstream acreage in Gabon and is involved in a midstream project in Nigeria.

Sasol says it has strong basin knowledge in West Africa and it is building on existing relationships, assets and capabilities on the continent. In the last few years, it has strengthened its skilled team for the purpose for acquisitions.

It is one of the 16 companies looking to get an acreage through Ghana’s ongoing bidding round.

The company says it has a structured West Africa basin screening process. It has identified acquisition targets and has assessed both sub-surface and above ground risks. Sasol is investigating low-cost entry into targeted infrastructure-led exploration opportunities.

Its model for value delivery is to acquire new production assets with exploration running room; invest in the early part of exploration life cycle and farm down for value and realise asset option value through active management.

This piece was originally published in the January 2019 edition of Africa Oil+Gas Report, released on January 21, 2019.

Rumours That Buhari Refuses To Renew Some Licences Are Exaggerated

The president isn’t a terrific economic manager, we agree, but this thing about licences is untrue..

The Africa Oil+Gas Report has been inundated with requests by its subscribers to confirm or repudiate stories flying around about the Nigerian President, Muhammadu  Buhari, using licence renewal as a tool either to deal with critics and the opposition or to pacify the States.

Our checks with sources in both the regulatory and executive arms of the Ministry of Petroleum Resources indicate that the President is not keen about anything about license allocations.

People in the ‘Villa’ and ministry officials may play games using the Presidency, but the man himself is not necessarily aware and the only acreage sanction he has personally appended to, has been the transfer of OPLs which used to make up OML 13, onshore eastern Nigeria, from private companies that won the three acreages in the 2007 bid round, back to NNPC, which claimed they were wrongly taken from it.

Africa Oil+Gas Report has published, in the last six editions of the last six months, stories which explicitly stated what expiring acreage licence was renewed or revoked.  Just to indicate that these rumours are all hot air: Elcrest Petroleum, which is on the list, has had its acreage (Oil Mining Lease (OML) 40), renewed for 20 years. Seplat’s OMLs 4, 38 and 41 are on the list of acreages that will purportedy not be renewed. But these licences are already renewed for the next 20 years.

Let’s take other examples on the list. The Government had, before June 2018, revoked the licence awarded to Alfred James for Oil Prospecting Lease (OPL) 302 as well as that for Sunlink for OPL 238.

It was clearly stated to Africa Oil+Gas Report, at that time, (and we have reported it) that Sunlink never paid signature bonus for OPL 238 since it was awarded in the early 1990s.

As for the Optimum Petroleum held OPL 310, a case concerning Ministerial consent for a company which bought 40% of the equity in the acreage has been in court since May 2018.

Buhari has not been a terrific manager of the economy, we agree, but this thing about licences is untrue.




German Indie Back to Exploration in  Egypt

The Egyptian Natural Gas Holding Company (EGAS) has finalised the award of a new licence it made to DEA in its 2018 Bid Round The East Damanhour exploration block (originally offered as Block 10) covers 1,418 square kilometres and is located west of the Disouq development leases, where DEA is the operator with a licence share of 100%.

Sameh Sabry, DEA’s General Manager in Egypt, says the block is located in DEA’s core region in the Onshore Nile Delta, “where we successfully explore the Messinian and Pliocene plays as operator since 2004”. The extensive knowledge and experience the company has gained over the years, the right set of skilled experts “and our nearby infrastructure will offer us very good conditions to continue this exploration efficiently”, Sabry adds.

“The proximity of DEA’s Disouq central processing plant and infrastructure provides us with an operational edge, which would enable accelerated development of any discovered volumes as well as considerable synergies and cost optimizations. In addition, the block offers significant potential in pre-Messinian structures, which is in line with our ambition to further grow in Egypt”, underlines Sameh Sabry.

Tullow in a Drawn out Farm Down in Uganda

Prospect Mojido, in Nairobi

Tullow and its partners in Uganda, TOTAL and CNOOC Ltd, are still working with the Government of Uganda to finalise the farm-down which the British operator initiated in late 2016.

It has thus been over two years since Tullow has been trying to divest ~22% of the total equity of the three acreages currently under development in the country.

TOTAL first announced the divestment in the first week of January 2017, in a release in which the French major declared it was prepared “to pay  $900Million for 21.57%” of Uganda’s Albert basin development project. This was to leave Tullow with 11.73%.

Two months later, the Chinese behemoth, CNOOC stepped in to claim its right of first refusal.

In the event, the Chinese and the French agreed to share the 21.57% that Tullow was divesting.

The sticky point has been the Ugandan government.

With Kampala, nothing gets done in a hurry.

“It is now expected to complete in the first half of 2019,” Tullow says in its latest operational update.

Don’t bet on it.

The last time Tullow divested some of its shares (66% then) in Uganda’s acreages, it ended up in a significant court case, over withholding tax to the Government.

“It’s best to be patient with Uganda, to be sure you’re doing what the government wants”, says John Imohimin, an Africa upstream analyst based in Cairo. “You can’t be too slow”.


© 2020 Festac News Press Ltd..