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From Oando to Axx….Gas & Power Now 100% Helios Owned

What used to be Oando Gas&Power is now 100% owned by Helios.

The company was named Axxela Limited after Helios Investment Partners purchased a majority stake in Oando’s gas and power business enterprise in December 2016. Now, Helios, a private equity firm with a focus on investments in Africa, has acquired Oando’s remaining 25% interest in Axxela. Bolaji Osunsanya, who has been the Chief Executive all through the several stages of acquisition pays homage “to our storied history and legacy”, but quickly adds that “our recognition as being fully owned by Helios gives us global positioning, greater financial flexibility, and access to capital going forward”.

The history and legacy that Osunsanya speaks of includes Gaslink, the brave builder of natural gas pipeline from the Lagos city gate in Ikeja, in the north of the country’s main financial hub, to Apapa, Nigeria’s largest seaport located in the west of the city. That pipeline was constructed on the back of a franchise from the Nigerian Gas Company, to take some 50Million standard cubic feet of gas per day from the Lagos end of the Escravos Lagos Pipeline and distribute to industries and factories in the city. It was the first time an entirely midstream private (and Nigerian owned) company had emerged to supply natural gas to end users. Prior to that, AngloDutch Shell was distributing natural gas in the industrial estate of Agbara on the Lagos outskirts and in the market towns of eastern Nigeria.

Oando also boldly constructed a 128km pipeline in the country’s southeast, but later sold that infrastructure to Seven Energy after it started having financial challenges, mostly due to its acquisition of stakes in ENI (Nigerian Agip) operated upstream oil acreages. “As a partner of choice, we have immense pride in the growth, robustness, and stability of our existing business enterprise, enabling us spur the aggressive expansion of our footprint via our audacious growth initiatives in Nigeria and the West African region,” Osunsanya boasts. Axxela says it is the first private company to attain a shipper’s licence on the West African Gas Pipeline and the first company in the Nigerian oil & gas space to simultaneously integrate and ISO Standards – ISO 9001:2015 (Quality Management Standard), ISO 14001:2015 (Environmental Standard) and ISO 45001:2018 (Occupational Health and Safety Standard).

Excel, Express, Dubri, Produce the Lowest Volumes in Nigerian Output

The Nigerian independent Express Petroleum produced 60Barrels of Oil Per Day on average, making it the E&P company with the lowest operated output in Nigeria in 2017, according to the latest annual report of the Department of Petroleum Resources DPR, the industry regulatory agency.

Slightly ahead of Express is Excel E&P, credited with operated output of 227BOPD in the year.

Dubri’s output was slightly higher at 348BOPD.

Atlas Petroleum, owned by the businessman Arthur Eze, was credited with an operated average daily output of 399BOPD.

Apart from these four, every other company on the list of operating companies in the country,-with the exception of Frontier Oil, produced over 1,000BOPD on average.

Frontier, which produced 332BOPD, was excluded from the companies producing lower than 1,000BOPD because, unlike Express, Excel, Dubri and Atlas, it is not an oil producer. The company is a gas producer which happens to output small amounts of condensate, metred and marketed as light crude.

For full details of who produced what in the year under review, as well as current output of Nigerian independents, please click here.

Aker Submits PoD To Ghanaian Authorities

Looks towards 110,000BOPD at peak by 2023

Norwegian operator Aker Energy has submitted a Plan of Development for the Pecan field in the Deepwater Tano Cape Three Points block (DWT/CT), to Ghana’s Minister for Energy, John-Peter Amewu.

The plan, submitted Friday, March 29, 2019, provides an outline of a development project to drain over 400Million barrels of oil equivalent (400MMBOE) in a field located in 2,400 metres of water in the transform margin of the Gulf of Guinea. The assumed cost of the project is $4.4Billion.

Aker Energy has reported that the recoverable reserves estimate could be more than double the 400MMBBOE, as the company envisages new discoveries outside of the main structure.

Aker’s use of the term ‘barrels of oil equivalent (BOE)’, instead of simply ‘barrels of oil (BO)’, for reserves estimate, is an indication that there’s significant volume of gas and/or condensate in the reservoirs. In short, this is not a pure oil play.

Aker Energy has also repeatedly indicated that the field could produce as much as 110,000Barrels of oil per day. What it hasn’t said, in public, is how long the peak production could last.  First oil is expected in 2022.

Aker Energy operates the acreage with 50%. Its partners include Lukoil (38%), Fueltrade (2%) and Ghana National Petroleum Corporation (10%).


“No Cash Call Now” -AJE Field Is Heavily Constrained By Low Production

By Prospect Mojido, in Badagry

Partners on the Aje Field in Oil Mining Lease (OML) 113 offshore Nigeria are having financial challenges trying to improve the economic fortunes of the overall project, including the oil uptake and the development of the gas reservoirs.

Basic running costs sweep off the entire income, so plans for increasing the current average production is challenged, as bankability is difficult. “We are not contributing cash call really; revenue is used to keep production going”, says one of the partners who would rather keep his name out.

The field, planned to deliver 10,000BOPD of crude for at least the first three years has been doing 3,000 BOPD, as the crucial Aje-5 well failed to deliver.

The consortium partners are currently reprocessing three dimensional seismic data to see if new interpretation can lead to two new wells.

How about the gas development?  “It would cost $250Million to fund the gas project, so it is not a priority”, the source says. This piece has been earlier published in the February 2019 edition of Africa Oil+Gas Report, released four weeks ago.


Sasol Completes Huge Petrochemicals Facility outside the Continent

Africa’s largest Petrochemicals Company has finished construction of a huge facility in the United States of America.

Johannesburg listed Sasol built a 1.5Million-ton-per-year ethane cracker, as well as six downstream chemical units and associated utilities, infrastructure and offsites in Westlake, Louisiana, United States.

The project achieved first steam in August 2018. Utilities to support the early process units were fully operational by the end of November 2018 and the linear low-density polyethylene unit achieved beneficial operations in February 2019.

More than 6,000 staff and craft were on site at peak to build the complex, which use the ethylene produced by the cracker to manufacture high-value chemicals that are used in everyday consumer products. The project team strengthened and widened more than two miles of roadway in the community to support the completion of more than 500 heavy haul transports to the project site.

The construction was undertaken for Sasol by two main contractors, Fluor Corporation and TechnipFMC, who integrated a team of 30 main construction contractors and worked in collaboration with Sasol.

OPEC+Still Committed to Production Cuts

The coalition of the Oil Producers Exporting Countries and other high producing, but non OPEC member countries, known as OPEC+ coalition, has reaffirmed its commitment to continuing output cuts.

The coalition however decided to defer the decision on whether to extend the curbs until June 2019.

The output cuts, started in 2017, helped to bouy up crude oil prices that had been depressed since 2014. The stability it brought into the market has however been challenged by increasing oil production from shale formations in the United States. So the OPEC+ finds itself having to continue capping production in order to ensure that prices remain reasonable.

The coalition’s working group, known as the Joint Ministerial Monitoring Committee (JMMC) meeting in Baku, Azerbaijan, reviewed recent developments in the global oil market, as well as immediate prospects for the remainder of 2019.

“The JMMC reiterated the critical role that the “Declaration of Cooperation” has played in supporting oil market stability since December 2016 and took note of the expressed commitment of all participating countries to ensure that such stability continues on a sustainable basis, as overall conformity reached almost 90% for the month of February 2019, which is up from 83% in the month of January”, says a release from the meeting in Baku.
The Committee recognized the current, critical uncertainties surrounding the global oil market throughout 2019, and stressed on the shared responsibility of all participating countries to restore market stability and prevent the recurrence of any market imbalance.

One key statement in the release avers that “All participating countries present at the meeting, individually and collectively, assured the Committee that they will exceed their voluntary production adjustments over the coming months”.

“To this end, the JMMC also urged all participating countries, including those not present at the meeting, to achieve full and timely conformity with their voluntary production adjustments under the decisions of the 175th Meeting of the OPEC Conference, 6 December 2018, and the 5th OPEC and non-OPEC Ministerial Meeting, 7 December 2018.

In consideration that market fundamentals are unlikely to materially change in the next two months, the JMMC adopted a recommendation to forego the full Ministerial Meeting in April and instead schedule a JMMC meeting in May ahead of the OPEC Conference meeting on 25 June, during which a decision will be taken on the production target for the second half of 2019.


Panoro Monetises Its New Assets in Tunisia

Norwegian oil producer Panoro Energy ASA has lifted its first cargo of crude oil from the TPS assets in Tunisia.

Some 151,000 barrels of Rhemoura blend crude oil was lifted from La Skhirra Terminal in Tunisia in the first week of March 2019. “The pricing for this cargo was based on Rhemoura blend which is at a modest discount to Dated Brent in line with the differentials achieved in the recent past”, the company explains. “Panoro’s net participation in this lifting is 60%”.

Panoro had purchased 49% equity and operatorship of the TPS Assets from OMV, the Austrian player, in November 2018. It also purchased the 52.5% of the Sfax offshore Exploration Permit, from the same party: both for $65Million.

Current production of the TPS assets is around 4,000 barrels of oil per day.

Approximately 50 wells have been drilled in the TPS fields to date, whilst some of these wells have been abandoned, 14 remain on production with 5 wells currently shut-in awaiting workovers or reactivation. Two wells are used for disposal of produced water. Production facilities consist of the various wellhead installations, connected via intra-field pipelines to processing, storage and transportation systems. Crude is transported to a storage and export terminal about 70 km south of the Assets at La Skhira.


Seplat Slips in Output in February 2019

By Prospect Mojido, in Sapele

Seplat’s operated production in its core three acreages, slipped from over 50,000 Barrels of Oil Per Day in January, to about 40,000BOPD in February 2019, according to field data.

The core three acreages, or base business licences, are Oil Mining Leases (OMLs) 4, 38 and 41, located in the northwest Niger Delta basin, onshore Nigeria.

The drop is attributable to leakages in the Trans Forcados Pipeline, which forced a shut in of flow stations on these leases in the last week of February.

The same drop affected outputs of other companies pumping crude into the TFP, most notably Shoreline Natural Resources, whose gross output had averaged as high as 75,000BOPD in January 2019, according to field data.

(The emphasis on field data is brought on by the fact that calculations at the terminal end, always differ significantly, in Nigeria, from reported production at the well head).

When Seplat’s interests in OML 53 (which it operates), OML 55 (operated by Belemaoil) and the Pillar Oil operated Umuseti field in OPL 283 are considered, the company’s gross output for February 2019 is around 55,000BOPD, which is lower than January figure of slightly higer than
60,000BOPD. This means that the production in OMLs 52,55 and Umuseti were slightly higher in February than in January 2019 and compensated for the sharp fall in the output in the Western Niger Delta.

Natural Gas production, according to field data, averaged around 300MMscf/d (gross) for February 2019.

OB3-“We’d Complete Our Own Section By End of March”, Nestoil Declares

Ernest Azudialu-Obiejesi, Chairman and Chief Executive of the Obijackson Group, parent of Nestoil Ltd, says that mechanical completion of the Oben Obiafu-Obrikom pipeline, a part of which the company is constructing, will be done by the end of March 2019 “and pre-commissioning and finalcommissioning much later in the year”.
Azudialu-Obiejesi told Africa Oil+Gas Report in a wide ranging interview: “We are at the mostinteresting and exciting part of the job. In the next few weeks, when we announce its completion; it would be one of the most interesting engineering achievements in pipeline construction in Nigeria.We are trying to get 48” sized pipeline under the River-Niger from the eastern part across the otherpart of the Niger, some 1.8km on the other side of the river”.

The company explains that there’s a host of challenges delivering the job, a crucial east –west pipeline meant to deliver gas from the rich reserves in the east of the country to the large markets in the west. The pipeline will help create some sort of a gas grid for the country. “It is the sheer scale and size and complexity of the river crossing and also the fact that you have a
seasonal window to operate” that have made the construction work so onerous, Azudialu-Obiejesi explains. “Once the rain starts, you are unable to do any work in those areas and you find that you have huge equipment that can be submerged when the river overflows its bank. We also had security challenges. In January 2018, Nigeria’s security operatives killed one of the major militants in the Omoku area. Many Nigerians who may be aware of the project may not be aware that the main operating area of this militant and his associates was in Omoku and its environs, the same vicinity where a large percentage of Nestoil’s section resides.  That was a major challenge but we are glad to announce that the worst is over as far as this project is concerned”.

Kenya’s PIB Hands 25% of Revenue to Host Oil Counties, LGs

Kenya has addressed revenue-sharing issues and host community concerns in a new petroleum law signed by President Uhuru Kenyatta,

The Petroleum Exploration Development and Production Bill 2017 grants the NationalGovernment 75% of the revenue accruing to the state from crude oil and gas exploited in the country, while County Government takes 20% and the Local Community takes 5%.

The new law, signed on March 12, 2019, improves on a 2015 Bill, which would have cappedthe County and Community allocations on the basis of revenue inflows into the national coffers in the fiscal year. The country’s parliament is expected to review percentages within ten years to take into consideration any adjustments needed.

In some fuller details, the law says:
The profit derived from upstream petroleum operations shall be shared between the contractor and the National Government in accordance with the petroleum agreement.
The national government’s share of petroleum revenues before the imposition of taxes shall be deposited to a dedicated petroleum fund, and managed in accordance with the PublicFinance •Management Act, (No 18 of 20112), and any other relevant law.

The national government’s share of the profits sharing of C rived from upstream petroleum operations shall be apportioned between the national government, the county, government and the local community.
The county government’s share shall be equivalent to twenty percent of the national government’s share: Provided that the amount allocated in accordance with this subsection shall not exceed the amount allocated to the county government by Parliament in the financial year under consideration.

The local community’s share shall be equivalent to five percent of the Government’s shareand shall be payable to a trust fund managed by a board of trustees established by thecounty government in consultation with the local community:
Provided that the amount allocated in accordance with this subsection shall not exceed one-quarter of: the amount allocated to the county government by Parliament in the financial year under consideration.

The new petroleum law provides quite a comprehensive framework for contracting, exploring, developing and producing petroleum in the East African country. Full story in the March 2019 edition of the Africa Oil+Gas Report

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