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Eland Not Ready For Ubima Development

Nigerian authorities are lenient about the entire marginal field exercise

AIM Listed Eland Oil and Gas is not ready for development work on Ubima field, located onshore eastern Nigeria.
The company farmed into the asset as a 40% technical and financing partner to All Grace Energy Ltd., holder of the field, as far back as 2014.

It was two years after All Grace Energy was awarded the field by the Nigerian authorities, on a discretionary basis, outside of the process of a bid round.

The Ubima field is covered with three dimensional (3D) seismic data. Shell, the former operator, had drilled four wells on the structure. It would seem that its development would be easy.

But Eland had struggled as a going concern for the past five years. Even in the year it purchased equity in Ubima, it recorded a loss of over $10Million.

Today, Eland is back in the black, but it is not in a hurry to take Ubima to first oil. The company says the scheduling for evaluation and production of Ubima 1 is planned for 2018, with full field development being scheduled for 2019. The exact details of the development will be subject to the results obtained from the Ubima-1 re-entry.

“Work is currently on-going with pipeline surveys to both evacuation opportunities to the south through the Bonny Oil Terminal and to the north east through Brass River Oil Terminal”, Eland says in its full year 2017 report. “We expect to finalise these studies prior to completing the Ubima-1 re-entry”.

Eland cannot commit adequate time and resources to Ubima just yet because (1) it is busy with an aggressive development drilling campaign on OML 40 and (2), there are still cash flow issues, even with the seeming success of OML 40 (where it now produces in excess of 20,000BOPD from as low as 3,000BOPD three years ago).

In April 2018, Eland is continuing with drilling of with Opuama-9 and 10. “Further drilling activity on OML 40 is being considered for the Gbetiokun field development with the re-entry and completion of Gbetiokun-1 and the drilling of Gbetiokun-3 also potentially within 2018, subject to the various regulatory approvals being in place”.

Eland is also planning an exploration well on the Amobe prospect, to potentially be drilled in late 2018 or 2019, in the same acreage. “This large, robust, structure is similar to Opuama in structural style, shows structural closure over a vertical interval of 5,000 feet, and is located less than seven kilometres from the Opuama Flow Station. Best estimate prospective resources are assessed by NSAI at 78 MMstb, with very high upside potential”.

There is really no space for Ubima development here.

ENI’s Egypt Joint Venture Announces Half A Billion Barrel Crude Oil Milestone

Italian giant ENI has reported that cumulative oil production of AGIBA, the operating joint venture company between its subsidiary IEOC Production BV and Egyptian General Petroleum Corporation (EGPC), reached 500Million barrels in mid March 2018.

AGIBA has been active since 1981 with operations mainly focused in Egypt’s Western Desert Area.

With recent development of a number of new discoveries such as Rosa North, Emry Deep and Melehia West Deep within existing conventional asset, AGIBA, leveraging on its operated infrastructures “has been able to produce and valorize oil resources amounting to around 110 MMbbls in the last five years, thus reaching the target of 500 MMbbls as oil cumulative production”, the company says in a release on its website.

“This achievement confirms the success of ENI’s strategy to focus on exploration activities which offer high value and quick development within a mature environment by optimising traditional drilling/infilling campaign and the synergies with existing upstream infrastructure and national hydrocarbons export network”, ENI explains.

The Italian payer, on a n aggressive campaign across Africa, says it plans new exploration investments in Egypt in the next four years “to valorize the deep oil potential and the gas resources of the Melehia Concession”.

ENI has equity production of more than 250.000 barrels of oil equivalent per day in North Africa’s largest economy.

Amni In Talks With NAPIMS for 8-Well Tubu Development Campaign

Amni has progressed talks with its Joint Venture partner NAPIMS, the investment arm of the Nigerian state hydrocarbon company NNPC, over field development plan for the Tubu oil and gas field in shallow water southeast Niger Delta.

The conversations have happened in Houston, where Amni has technical office and in Lagos, where it is headquartered.

The undeveloped discovery is the main asset in the Oil Mining Lease (OML) 52 that Amni purchased from Chevron in 2013.

Chevron had done a comprehensive appraisal of the field, drilling a total of seven wells, but had stopped short of full scale development.

The company has in plan to drill eight more wells as part of field development, but it’s not clear whether this includes a gas development, as Tubu also contains, apart from pure oilfield reservoirs, both non associated gas reservoirs and associated gas accumulations.

This story was initially published in the Vol 19, No 1, (January 2018) issue of the Africa Oil+Gas Report

Egypt To Return, Again, To The Market

Egypt, the perennial launcher of bid rounds, has said it will launch international tenders for oil exploration in the second half of 2018.

But first, there will be a bid round for natural gas asset

The Government owned Al-Ahram Newspaper reports TarekEl-Molla, the country’s charismatic petroleum minister, as declaring that Egypt will launch a lease sale specifically for companies to explore for oil, as it seeks to add crude oil reserves to its growing discovery of gas.

But before Mr El-Molla’s interview with Al-Ahram, the Egyptian Natural Gas Holding Co (EGAS) announced its plans to launch gas exploration and production tenders for 11 onshore and offshore areas ahead of June 2018.

El-Molla also said that the country has experienced stability and economic progress since the disruption of the Egyptian version of the Arab Spring in 2011.

“The Egyptian oil sector has started to settle after the 30th June Revolution in spite of the unstable scene the country witnessed after the 25th January Revolution,” he told Al-Ahram.

Angola Trounces Nigeria in 2017 Crude Oil Output

By Sully Manope, in Luanda

Angola averaged daily crude oil production of 1.632Million in 2017, compared with Nigeria’s 1.510Million, according to the current (February 2018) issue of OPEC’s Monthly Oil Market Report (MOMR).

These figures were obtained by OPEC secretariat through direct communications with the approving authorities in both countries, the report explains.
Production data obtained by the Secretariat from secondary sources are significantly different in terms of pattern; they cite Nigeria as having produced 1.66MMBOPD contrasted with Angola’s 1.639MMBOPD.

But for us in Africa Oil+Gas Report, the officially supplied data (ie one provided by the countries’ authorities) in the MOMR, corroborates the data on Angola’s dedicated reporting website, which we access every month.

Nigeria does not have a comparable website with the Angolan site, which presents every month, almost in real time, crude oil production data by all the companies operating in the country.

The Central Bank of Nigeria reports all liquid hydrocarbons, including natural gas liquids and condensates in its quarterly statements. The CBN fourth quarter 2017 report indicated 1.8MMBPD of liquid hydrocarbons produced by Nigeria. This is not as definitive as the Angolan reporting. The OPEC report and the Angolan dedicated website, report just the crude oil data. Condensates are not counted in OPEC production quota even though they are sold in the market as crude oil.

Find the full details of Angola’s 2017 production, including the main producers and their gross and net output, in this link.

TNP Reopens After 46 Days Shut In

The Trans Niger Pipeline, the Shell operated crude oil export line in the east of Nigeria, came back up on Sunday February 18, 2018.

It was 46 days after a shut in of a critical segment of the line for major repair works since January 3, 2018.
The pipeline, with capacity for 180,000BOPD, pumps crude to the Bonny Export Terminal and is also part of the gas evacuation infrastructure.

The TNP consists of three parts:, a 12.5km 30” pipeline from Ogale to Eleme/Ogu Bolo over land terrain;a 25.5km 30” pipeline from Eleme/Ogu Bolo to the Cawthorne Channel Junction Manifold, and a 2.4km 8” pipeline from Alakiri to Ojikirispurline, both over swamp terrain; anda 20km 30’’ pipeline and a 20km 24” loop pipeline leg from Cawthorne Channel Junction Manifold to Bonny Oil and Gas Terminal, both over swamp terrain.

Senegal: Cairn to Drain~400Million Barrels With 25 Wells

By Toyin Akinosho, Lagos

Cairn Energy and partners are considering an initial well count of approximately 25 wells for the first phase of development of the SNE field in deepwater Senegal.

The project is the first major oil development in the Northwest African margin.

The wells will be principally drilled in the field’s “S500 lower reservoirs”.

It is anticipated that other discoveries, e.g Fan South and SNE North, may be developed and tied to the SNE field development afterwards.
But all these considerations are at concept selection stage now and a clear decision is still a little far ahead.

“The development concept being considered by the joint venture is a standalone FPSO facility with subsea wells and infrastructure”, FAR Limited declares in a just released report. “The project will be designed to allow flexibility for anticipated subsequent development”.

Although FAR Ltd is a 15% non operating partner in the venture, it has been the more vocal with updates than operator Cairn Energy.

The joint venture aims to have all Government approvals in place by the end of 2018, with a target of first oil in 2021-2023.

The extensive SNE field with an area covering approximately 350km2 has been assessed by FAR to contain 640MMbbls on a full field basis (100% basis, best estimate, Contingent Resources, unrisked). This means less than 450MMbbls in terms of proven oil.
“In line with the terms of the Production Sharing Contract with the Government of Senegal, the joint venture has made a submission to evaluate the SNE North discovery and an application to evaluate the FAN South discovery is currently being compiled”, FAR explains in the note. “Both discoveries are in tie-back range of a hub development at SNE and, if the appraisal is successful, will be tied into the SNE development in later phases of development.

Nigerian Indies: The Talented Tenth

By the Editorial Board of the Africa Oil+Gas Report

Africa’s growth as an industrial marketplace is going to be determined by its exceptional companies

To go by sheer volume of crude oil output, Aiteo and Eroton should undoubtedly be the leading indigenous Nigerian Independent companies to watch in the immediate term. Their gross daily production of around 90,000 and 60,000 barrels In Oil Mining leases (OMls) 29 and 18 respectively, for most of 2017, are underpinned by the reserves sizes of those assets. On a net basis, these volumes compare favourably with other Western independents focused on African resources, including such aggressive operators as Tullow Oil and growing stars like Kosmos Energy.

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Nigerian Independents Don’t Pay Petroleum Profit Tax-NEITI

Waziri Adio

By Sully Manope, in Abuja

Sixteen Nigerian owned companies, all of them hydrocarbon producers, defaulted on payment of the Petroleum Profit Tax (PPT) to the country’s coffers in the year 2015, according to the latest audit report of the Nigerian Extractive Industry Transparency Initiative (NEITI).

Those that were reported to have defaulted on PPT payment included AITEO, Allied Petroleum, Atlas Petroleum, Dubri Oil, Energia, Eroton, Express Petroleum, Frontier Oil, Network E&P, Oando OML 125&134, Oando Qua Ibo Ltd, Prime Energy, Seplat, Shebah, South Atlantic Petroleum (SAPETRO) and Universal Petroleum.

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Four Large African Oil Projects for Sanction in 2018

Tullow Oil

By Toyin Akinosho

Nigeria is the site of two of Africa’s four largest greenfield oil developments on queue for Final Investment Decision in 2018.
The remaining two are each located in landlocked Uganda and offshore Senegal.

The most certain to take FID of the four is the Ugandan Albert Basin oilfield development, which had been on the drawing board for nine years. Now TOTAL, which has 44% equity in that development, is also the lead operator. The Albert basin development will deliver 230,000 barrels of oil per day BOPD at peak. The sanction announcement is expected be made any time before the end of the First Quarter 2018.

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