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GNPC Wins Awards For Delivery, Leadership

The Ghana National Petroleum Corporation (GNPC) has won two awards, confirming its leadership role in Ghana’s Petroleum Sector and beyond. The Majestic Falcon Award for Quality and Excellence and The Ghana Industry Leadership Award – Petroleum awards, were conferred on GNPC at two separate events in Dubai in the UAE and Accra, in Ghana.

The Majestic Falcon Award for Quality and Excellence was handed to the company in recognition of its leadership in ensuring the timely completion of three key projects (Jubilee, TEN and Sankofa fields) on schedule and on budget. The event was organized and conferred by Other Ways Management and Consulting International Limited.

The Industry Leadership Award – Petroleum, at the first Ghana Energy Awards, held in Accra, under the theme: Energy for National Development: 60years and beyond. The Ghana Energy Awards aims to recognize the efforts, innovation and excellence of stalwarts within the energy sector and to celebrate the successes of the players competing under various categories of the awards.

The Ghana Energy Awards is organized by the Energy Media Group (EMG), a full-service media company based in Accra and GP Business Associates (member of the CH Global Network), a business consultancy company.

GNPC was established in 1983 under the Ghana National Petroleum Corporation (GNPC) Law 1983, PNDC Law 64 and started operations in 1985. GNPC is the anchor partner in upstream petroleum operations in Ghana, and is currently in 17 joint venture partnerships with international players over 17 oil blocks. GNPC is the national gas aggregator.

GNPC’s strategy is to become an operator in the medium term and is currently pioneering exploration works in the onshore Voltaian Basin, the largest sedimentary basin of Ghana, covering 103,600 kilometres (approximately 40% of the country’s landmass).

GNPC’s strategy is to become an operator in the medium term and is currently pioneering exploration works in the onshore Voltaian Basin, the largest sedimentary basin of Ghana, covering 103,600 kilometres (approximately 40% of the country’s landmass).

The current phase of GNPC’s corporate social investments (CSI) is focused in three areas;
.Education and Training
.Economic Empowerment
.Environment and Social Amenities

The GNPC Foundation is driving GNPC’s corporate social investment strategy.
Under the Education and Training pillar, the GNPC Foundation has started awarding scholarships to over 700 students entering the country’s universities to study courses in science, technology, engineering, and mathematics (STEM). The foundation is also in discussions with some universities to drive positive reforms in our educational system (STEM) to meet the growing needs of industry, provide our citizens with livelihoods and upgrade our educational standards to that of developed countries.

The Foundation is working on setting up industry specific chairs in some selected public universities worth 1Million Ghana Cedis annually per university.

A school of petroleum studies is being constructed at the University of Mines and Technology (UMaT). The Foundation is also working assiduously to complete a Science Application Laboratory at the University of Energy and Natural Resources (UENR) in Sunyani.

Ghana Threatens To Overtake Gabon As Oil Producer

By Toyin Akinosho

With its three producing oil ‘fields’ at full throttle, Ghana is threatening to overtake Gabon as Africa’s seventh largest oil producer.

Production from Jubilee, TEN (a cluster of three fields) and Sankofa, have all appreciably increased in the last six months, according to official figures from the Ghanaian authorities.

Gabon’s 2016 average production was 230,000BOPD, after Congo Brazaville’s257,000BOPD and Equatorial Guinea’s 289,000BOPD. But the latter two are even larger hydrocarbon systems, as, unlike Gabon, they both have sizeable gas production. (Gabon sold a mere 53MMcf/d of gas in 2016).

Ghana itself is credited with having grown a domestic gas market larger than Mozambique and close in size to Tanzania’s, two gas-rich eastern exploration hotspots.

The country’s indigenous gas output is triple the gas import from Nigeria through the West Africa Gas Pipeline.
Full details of production profiles of the three producing Ghanaian hydrocarbon fields/projects are published in the January 2018 edition of Africa Oil+Gas Report.

Ghana’s TEN ‘Field’ Surpasses 2017 Output Projection by 40%

By Toyin Akinosho

Production is very close to FPSO capacity, with less than half of the wells drilled.

The TEN cluster of fields in deepwater off the coast of Ghana has far surpassed the gross production guidance for 2017.

The project, which involves a joint development of three accumulations: Tweneboa, Enyara and Ntomme (TEN), was expected to just slightly exceed 50,000BOPD by December 2017.

Operator Tullow Oil has managed production from 11 wells out of a planned 24 wells and did not anticipate production even to reach 60,000BOPD this year.

Drilling of the remaining 13 wells was stopped in 2015 as Ghana dragged Cote D’Ivoire to International Tribunal of the Law of the Sea, ITLOS, to adjudicate a boundary claim issue.

Tullow planned to drill the remaining wells if the ITLOS judgement favoured Ghana and thereby ramp up production to as close to the FPSO capacity of 80,000BOPD as possible.

On 23 September 2017, ITLOS made their judgment and the new maritime boundary does not affect the TEN fields, but two months later, the TEN development had ramped up to 70,000BOPD, with just the 11 wells!
The output surpassed the 50,000BOPD guidance by 40%.

TEN is the second of three deepwater fields that have been developed since Ghana commenced sizeable commercial crude oil production in December 2010.

The others are the Jubillee (the first) and the ENI operated Sankofa field (the third).

Elcrest Ramps Up Close To 20,000BOPD

Its production increase in 2017 is the most noteworthy of the 11 Shell Divestees

Elcrest, the Joint Venture between Nigerian owned Starcrest and the UK listed Eland Oil and Gas, reached gross peak production of 18,400BOPD, less than 2,000BOPD shy of 20,000BOPD, in the Oil Mining Lease(OML) 40, as November 2017 drew to a close.

It’s a clear result of aggressive work programme by a company which acquired what was almost entirely an exploration asset in 2012.

OML 40 was the least developed of all the 11 onshore OMLs from which Shell and partners divested (selling their equities to Nigerian firms and quasi Nigerian firms) between 2010 and 2015. For the first three years of purchase of the asset(2012 to 2015), production was limited to 4,000BOPD.

Output began to surge after the Asset Management Team (AMT) philosophy was approved in late 2015, allowing joint operatorship of the acreage by Elcrest and NPDC. The partners’ shipping arrangement of the crude (barging), during the 16 month long shut down of the Trans Forcados System, was one of the most successful of the shipping operations during that period.

November 2017 witnessed sharp increases in production by other Nigerian independents, including Shoreline’s OML 30, which breached 70,000BOPD and NDWestern, which also went close to 20,000BOPD, but these assets were not starting from a low base as Elcrest’s OML 40.

Elcrest is on a three well drilling campaign to increase output to 30,000BOPD on the acreage.

South Africa Retreats From E&P Adventure

By Fred Akanni

21 years after JSE listed Energy Africa launched its Pan African foray, fanning out across the continent for exploration and producing portfolio, the spirit of adventure by South African E&P companies has considerably waned.

At its height in the early noughties, the S.A.E&P adventure was vigorously blessed by the state. President Mandela took the state oil company to Libya. His successor, Thabo Mbeki, seriously examined the possibility of PetroSA taking position in Sudan, even when that country stood accused of genocide in Darfur.

With not much of oil to its name, the Rainbow Country hosted the World Petroleum Congress in 2005; it was the only time the Olympics of Petroleum Conferences would take place on the continent.

Today, the only South African owned company with any substantial African E&P holding outside South Africa is Sasol.

It is symbolic of the times that SacOil, the JSE listed company which represents the latest vigorous Pan African effort by any South African enterprise, has dived from upstream to downstream, renaming itself Efora (Energy For Africa), even when its major assets are a bunch of fuel stations and a crude oil trading partnership. Read the full story of South Africa’s 21 Year Pan African Odyssey in the Vol 18, No 7 of the Africa Oil+Gas Report, here.

TOTAL Progresses New Oilfield Projects After Egina and Kaombo

By Fred Akanni

With two huge deepwater projects now close to first oil, French major TOTAL is progressing two relatively minor, field developments offshore Nigeria and Angola, its African heartlands.

Ikike, in shallow offshore Nigeria and Zinia Phase 2, in deepwater Angola, are prognosed to deliver 40,000BOPD each at peak from sometime after 2019.

Angola’s Kaombo and Nigeria’s Egina, each expected to produce at least 200,000BOPDat optimum, will reach first oil latest January 2019.

TOTALholds 40% operatorship in the acreages that host these two projects; The Ikike field is located in the eastern part of the Oil Mining Lease (OML) 99, which also hosts the iconic Amenam-Kpono field. The Zinia 2 project is domiciled in Block 17, TOTAL’s most prolific hydrocarbon property on the continent. It will be connected to the Pazflor FPSO.

TOTAL has been one of the three most aggressive major operators in Africa, with a mix of rank wildcat exploration acreage, near term assets and producing properties.

The company has signed high level cash call exit with Nigeria’s NNPC-which means that the Ikike project will be funded outside the Nigerian official budget. In Angola, TOTAL’s CEO Patrick Pouyanné, recently concluded a range of cooperation agreements with Sonangol, the state hydrocarbon entity.

Kosmos Grabs what SAPETRO Threw Away

By Toyin Akinosho

“The former Triton executives have returned home”

Kosmos Energy has added, to its basket of acreages in Equatorial Guinea, a block that SAPETRO walked away from.

It is the highly prospective Block W, located north of the Ceiba and Okume fields.

SAPETRO terminated the discussions with Pan Continental, operator of Block W, before June 2017. Sources in Malabo, the Equatorial Guinean capital, said that the Nigerian independent wasn’t comfortable with the Pan Continental’s capacity as a partner. The Equatorial Guinea government apparently shared the same sentiments. By September, it had effectively booted out the company from the acreage.

Kosmos was awarded Block W in the same month, along with its purchase of85% of the stake in Ceiba and Okume fields from Hess Corporation and its entry into Block EG-21 and Block S, making it a large acreage holder in the Rio Muni basin.

Equatorial Guinea authorities are excited. “Do you know why Kosmos is acquiring all these assets in Equatorial Guinea”?, Gabriel Obiang Lima, the country’s Petroleum minister, asked delegates at the Africa Oil Week Conference in Cape Town in late October 2017. “The guys who founded Kosmos are the former Triton Energy people who discovered the Ceiba field in the mid 90s”, he gushed. “They have come back home”.

The Equatorial Guinea Ministry of Mines and Hydrocarbons considers Kosmos’ takeover of ownership and operatorship of Ceiba and Okume, two legacy oil producing areas, as “landmark sale transfers”.

These entries make Kosmos the country’s biggest petroleum explorer by acreage and the sole producer in Equatorial Guinea’s Rio Muni southern maritime area.

Egypt’s Economic ProspectsBest Among Africa’s Top Three

Egypt’s growth rates suggests its economic prospects are better than Nigeria and South Africa, its peers in Africa’s three largest economies.

The country’s growth picked up speed during fiscal year 2016/17, with GDP rising by 4.2% compared to the projected 3.5%.

This contrasts with Nigeria just emerging from a recession and South Africa’s less than 1% growth.

The IMF is encouraged that Egypt’s current account deficit narrowed in dollar terms, “supported by the increase in non-oil exports and tourism receipts while non-oil imports declined”.

Portfolio investments into North Africa’s most populated country reached $16BillionIN 2017 and foreign direct investment rose by 13%, reflecting increased investor confidence.

Headline inflation appears to have peaked in July and has been declining since then, supported by the Central Bank of Egypt’s (CBE) prudent monetary policy stance.

“The budget performance was broadly in line with program projections with a primary deficit of 1.8% of GDP.
There’s a chink in the armour though.

“The overall deficit exceeded projections by 0.4% of GDP and reached 10.9% of GDP, mainly on account of higher than expected interest payments”.

Even then, the IMF notes:Reflecting the overall strong policy framework and credibility of the authorities’ program, foreign exchange reserves increased significantly to record levels.

Egypt’s African rivals, meanwhile, get some tongue lashing from the Fund.
An IMF team, which departed South Africa on November 8, 2017 “sees little improvement in growth outlook in 2018. The country’s authorities project 0.7%GDP growth in 2017;

“Despite South Africa’s institutional strength and favorable global conditions, increasing domestic political uncertainty and stalled reforms point to a challenging economic outlook. Some sectors, including agriculture and mining, are certainly generating growth, but other key activities have stagnated or declined, as investment decisions are being postponed or abandoned.
The team sees growth as recovering only gradually in the medium term, “unless the pace of implementation of structural reforms accelerates quickly enough to prompt a clear recovery in business and consumer confidence”.

The IMF is equally disappointed with Nigeria. “The economic backdrop remains challenging, despite some signs of relief in the first half of 2017”, said a team which concluded a visit to that country in August 2017. “Economic activity contracted in the first quarter of the year by 0.6%, mainly as maintenance stoppages reduced oil production. However, following four quarters of negative growth, the non-oil economy grew by 0.6% (year-on-year), on the back of a rebound in manufacturing and continued strong performance in agriculture. Various indicators suggest an uptick in activity in the second quarter of the year. Helped by favourable base effects, headline inflation decreased to 16.1% in June 2017, but remains high despite tight liquidity conditions.

“Preliminary data for the first half of the year indicate significant revenue shortfalls, with the interest-payments to revenue ratio remaining high (40% at end-June) and projected to increase further under current policies. High domestic bond yields and tight liquidity continue to crowd out private sector credit. Given Nigeria’s low growth environment and the banking system’s exposure to the oil and gas sector, non-performing loans increased from 6% in 2015 to 15% in March 2017 (8% after excluding the four undercapitalized banks)”.

Egina FPSO Finally Sails Away ..First Oil Now November 2018

By Fred Akanni

The Egina FPSO left the quay side in Geoje Korea at 7.18am Korean time on the 31st of October.

The vessel started its long anticipated journey to Nigeria, several months after the original schedule.

It will take 90 days to arrive at the yard of the Lagos Deep Offshore Logistics (LADOL) in Lagos, meaning either late January or early February 2017.

There, the six modules constructed by TechnipFMC, which are presently at the LADOL yard will, together with some other modules coming from Korea be integrated to the FPSO at LADOL yard, a process that will take about six months to complete. That is the key local content part of the FPSO integration.

The FPSO will then leave LADOL yard in Lagos to Egina location off the southeastern Nigeria, where the risers, offloading Buoy and other subsea cables will then be hooked up to the FPSO before Egina first oil in November 2018.

Shell Divestment Transformed NPDC into A “Major”

By Toyin Akinosho

The divestment from four western Niger Delta acreages by the AngloDutch major Shell and its European partners transformed the Nigerian Petroleum Development Company NPDC, into “a major company”, in the opinion of NPDC managers.

“Huge hydrocarbon resources became available to us”, Kareem Folorunso, the NPDC Manager in charge of the Oil Mining Lease (OML) 26, told a technical session of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos recently.

Shell, with 30% operatorship of OMLs 26, 30, 34, and 42, led its two partners, TOTAL (10%) and ENI (5%), out of the acreages by selling the combined 45% equity to Nigerian companies between 2011 and 2012. NPDC’s involvement in those assets was triggered by NNPC assignment of her 55% equity to her wholly owned subsidiary.

The NAPE lunch hour presentation was part of a series of attempts by the company to counter charges that its takeover of operatorship of acreages divested by Shell & Co was not a value-destroying enterprise. There are widespread misgivings that the acreages would have delivered much more in terms of output and value to the Nigerian treasury if they had been operated by the private companies who purchased the Majors’ 45% share.
Mr. Folorunso’s paper presented NPDC as a technically honed, well-resourced entity, which just happens to be hampered by bureaucratic challenges normally faced by state owned enterprises.

NPDC’s crude oil in place increased tenfold from 313Million stock tank barrels before the divestment to 3.17Billion stock tank barrels (STB) post-divestment; the company’s stock tank barrels of condensate in place increased more than fivefold from 60MMSTB to 330MMSTB, while the gas resources in place jumped nine times from two trillion cubic feet (2Tscf) to 18Tscf, Folorunso said.

“NPDC is the third largest oil company in Nigeria in terms of oil reserves and has the 4th largest gas reserves in Nigeria”, Folorunso told the meeting, a monthly lunch hour talk designed for knowledge sharing among petroleum geoscientists. “Countless opportunities for partnership and collaboration with other business entities also became available as a result of the divestment”, he testified.

The word ‘Major’ was rather loosely used by Mr. Folorunso. In the oil industry lexicon, only six oil and gas companies –Shell, ExxonMobil, Chevron, BP, TOTAL and ENI are described as Majors. None of them produces less than 1.75Million Barrels of Oil Equivalent per day (1.7MMBOEPD) on a net basis.
The highest producer, ExxonMobil, produced 4.053MMBOEPD in 2016, of which liquid hydrocarbons, mostly crude oil, was 2.365MMBOPD, much higher than Nigeria’s gross total production. Even ENI, the smallest of the group, is only described as a Major because of its unique place in the European industry. In the strictest sense of the term, ENI is really considered “a large independent”, in the same class as ConocoPhillips, Apache, Anadarko and Woodside Petroleum.

What’s more, the smallest of these majors has 7.7BillionBOE, as proven reserves and not Stock Tank Barrel (STB) in Place.
So it is a clear misnomer for Mr. Folorunsho to say that NPDC had transformed into major company. But the Nigerian state hydrocarbon company can be forgiven for being excited by its good fortune.

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