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Manish Takes Over From Phillip Ihenacho

Seven Energy Finance Limited has announced the appointment of Manish Maheshwari as its Chief Executive Officer.
Until recently the Chief Executive Officer of Essar Exploration & Production, Maheshwari succeeds Phillip Ihenacho, who had elected to step down from a full time executive role with the Company.

Maheshwari has over 25 years’ experience in the oil and gas sector. Before his movement to Essar in November 2014, he was Managing Director of Hindustan Oil Exploration Company Limited, a subsidiary of the Italian giant, ENI SPA.
The Essar job entailed responsibility for 15 blocks and fields in various stages of exploration and production in India, Indonesia, Madagascar, Nigeria and Vietnam. The total reserves and resources across these assets were estimated, by the company, to be 2,034MMBOE in March 2015.

“Manish has been instrumental in turning around and delivering multi-fold growth from onshore and offshore assets in a safe, timely and cost effective manner in his previous assignments”, Seven Energy notes in a statement. “Manish has been involved in negotiating Production Sharing Contracts with Governments, Joint Operating Agreements with National & International Oil Companies, Crude Oil Sales Agreements, Gas Sales Agreements with aggregators and end users, as well as successfully completing several farm-in and farm-out arrangements.

Manish brings rich experience overlapping technical, commercial and financial domains in emerging economies. Manish has a Bachelor (Hons.) in Engineering and a Masters in Business Administration from Strathclyde University and has been a member of several professional bodies including the Society of Petroleum Engineers (SPE) and Association of International Petroleum Negotiators (AIPN).

Seven Energy is a leading player in the domestic Nigerian gas market, supplying gas to the power generation and manufacturing industries, principally through its own integrated processing and pipeline infrastructure, and the backing of strategic long-term investors. The Group’s midstream gas infrastructure assets, focused in the south east Niger Delta, include the 200 MMscf/d Uquo gas processing facility and a gas pipeline network of 260 km with distribution capacity of 600 MMscf/d. Its upstream assets include licence interests in the Uquo Field and the Stubb Creek Field (south east Niger Delta), an indirect interest in OMLs 4, 38 & 41 through a Strategic Alliance Agreement with Nigerian Petroleum Development Company (north west Niger Delta) and a licence interest in OPLs 905, 907 and 917 (Anambra Basin). The Group has its main offices located in Lagos and London.


Algeria Reduces Fiscal Deficit Despite Lower Oil Price

By Mohammed Jetutu, in Cairo

Overall economic activity was resilient, but IMF advises reduction in ‘costly’ energy subsidies

The International Monetary Fund (IMF) has praised Algerian authorities for achieveing a notable reduction in the fiscal deficit in 2016, despite the challenges of lower oil prices.

Algeria is the third largest crude oil producer in Africa and the continent’s largest gas exporter. But its economic indices are better than Nigeria’s and Angola’s, the two top oil producers.

In a March 21 2017 report, the IMF noted that Algerian authorities were seeking to reshape the country’s growth model, but the country “continues to face important challenges posed by lower oil prices” the World Bank institution noted.. While efforts to adjust to the oil price shock are underway, “fiscal . consolidation will need to be sustained as oil prices are expected to remain low”. 

The report is the product of an IMF staff team visitation led by Jean-François Dauphin.

Discussions focused on the appropriate mix of policies to adjust to lower oil prices. “Overall economic activity was resilient, but growth in the nonhydrocarbon sector slowed under the effects of spending cuts and is estimated at 3.4% in 2016,” Mr. Dauphin explained in the statement.

Inflation increased from 4.8% in 2015 to 6.4% in 2016 and stood at 8.1% year-on-year in January 2017. Unemployment increased to 10.5% in September 2016 and remains particularly high among the youth (26.7 percent) and women (20.1 percent). Despite some fiscal consolidation in 2016, the fiscal and current account deficits remained large, and public debt increased. International reserves, while still ample, fell by $30Billion to $113Billion (excluding SDRs).

“Efforts to adjust to the oil price shock are underway. The authorities achieved a notable reduction in the fiscal deficit in 2016 and have adopted an ambitious fiscal consolidation plan for 2017-19. They made progress improving the business environment and are working on a long-term strategy to reshape the country’s growth model to foster greater private sector activity and economic diversification. The central bank is adapting its monetary policy instruments to a tighter liquidity environment. This growing reform momentum is welcome.

“A key challenge at this juncture is choosing a policy mix that will help the economy adjust to the oil price shock in a way that is sustainable and the least costly in terms of growth and employment.

“Fiscal consolidation will need to be sustained as oil prices are expected to remain low and hydrocarbon reserves are exhaustible. At this stage, the consolidation should rely primarily on broadening the tax base, including through better tax enforcement and the rationalization of tax exemptions; containing current spending; gradually replacing costly energy subsidies, which mostly benefit the well-off, by direct support to the population most in need; and improving the efficiency of capital spending and reducing its cost. Investment in health, education, and well-targeted social safety nets should be preserved. These efforts should be supported by further strengthening the budget framework and closely monitoring growing fiscal risks.

“Too abrupt a fiscal deficit reduction, however, should be avoided to reduce the risk of a sharp slowdown in growth. In the mission’s view, given the relatively low level of public debt, Algeria could afford a somewhat more gradual fiscal consolidation than entailed in the current medium-term budget framework if it were to consider a broader range of financing options, including external borrowing and the sale of state assets.

“The mission strongly supports the authorities’ objective to decrease the economy’s dependence on hydrocarbons and unleash the potential of the private sector. This is not only needed to adjust to lower oil prices but also to ensure a sustainable source of job creation even beyond the horizon for proven oil and gas reserves. Achieving this goal will require wide-ranging structural reforms. Measures are needed to improve the business environment and access to finance, strengthen governance and transparency, make the labor market more effective, ensure that skills produced by the education system and sought by students match the needs of employers, foster greater female participation in the labor market, and further open the economy to foreign investment. The overall strategy should be designed and sequenced so that reforms reinforce each other and the burden of economic adjustment is shared equitably. Action should be timely as structural reforms take time to bear fruit.

“Exchange rate, monetary, and financial policies should support the adjustment. Further efforts to bring the dinar in line with fundamentals, combined with steps toward the elimination of the parallel foreign exchange market, would support fiscal and external adjustment. The Bank of Algeria is appropriately introducing open market operations, which should become its main monetary policy tool. The Bank of Algeria will need to stand ready to tighten monetary policy in light of growing inflationary pressures. Based on preliminary data, the banking sector as a whole remains adequately capitalized and profitable, but the oil price shock has increased liquidity, interest rate, and credit risks. It is therefore important to accelerate the transition to a risk-based supervisory framework, enhance the role of macro-prudential policy, strengthen the governance of public banks, and develop a crisis resolution framework”, the statement concluded.
 


NPDC Annexes OML 13

The Nigerian government awards a block outside the process of a bid round..

The Nigerian Petroleum Development Company (NPDC) has been awarded the Oil Mining Lease (OML) 13, in the south east onshore Niger Delta.

The 1,923 sq km block used to be operated by Shell, but was revoked along with a number of other blocks in 2005. Shell went to court, but ultimately gave up the asset.

It is not clear why such a petroleum producing property was awarded outside of the process of a bid round. OML 13 hosts the Utapate South and Ibibio fields, as well as a string of producing marginal fields including the Frontier oil operated Uquo, a gas accumulation and the 2,000BOPD Qua Iboe, operated by Network E&P.

NPDC is the operating subsidiary of the state hydrocarbon company NNPC and as an operating company, it is subject to the same laws of the country as any operating company.

Although the extant petroleum laws of the country allow the Minister of Petroleum to award Oil Blocks on discretionary grounds, the current bills at the Senate and the House of Representatives are in favour of competitive bid rounds as the way to grant assets to E&P companies.

“I can’t exactly comment on your query”, said Ndu Ughamadu, NNPC’s spokesperson, when asked about the award. “As you know, matters such as this are currently being discussed at the hearings of the National Assembly in Abuja and the DPR (industry regulator) is involved”.

What makes the award to NPDC more intriguing is the fact that the government has signaled intention to declare a transparent lease sale sometime in 2017, so why the hurry?


GE Commissions Takoradi Facility

GE Oil & Gas is commissioning its new services facility in Takoradi, in Ghana’s oil rich western region, this Wednesday, March 22, 2017.

On hand will be Ghana’s top petroleum bureaucrats, led by the country’s Minister of Petroleum, and G.E’s African leadership.
The project will primarily support the ENI operated Sankofa-Gye Nyame integrated oil and gas field development, located in Offshore Cape Three Points (OCTP) block, in water depths ranging from 600 to 1,500metres.

For a duration of 15 years, the Sankofa-Gye Nyame development will drain about 400Million barrels of crude oil reserves at 50,000BOPD at peak. It will supply 180Milliion standard cubic feet of gas to the country’s burgeoning domestic market.
The crude oil phase of the development is expected to come on stream before the end of June 2017.

GE will deliver a total of 21 subsea trees (also known as Christmas Trees, or XTs) for the project –  18 for installation and three for backup. Their primary function is to control the flow – usually oil or gas – out of the wells.

The Takoradi facility received the first two XTs for the Sankofa-Gye Nyame development in the last quarter of 2016.
GE Oil & Gas will also, at this facility, support the customer’s aftermarket needs, with the facility largely responsible for site receival testing and providing support to ENI’s equipment installation campaign for the Sankofa-Gye Nyamme project. Site receival testing involves ensuring the safe arrival of equipment, flushing systems and replacing hydraulic fluids, and making sure there’s continuous, undisrupted communication between the control equipment after they have been deployed offshore.


Cameroon Will Host the World’s First Floating LNG

By Sully Manope, in Douala

Move over, Australia, the quiet Atlantic waters offshore Cameroon are steadily on course of hosting the world’s first Floating Liquefied Natural Gas (FLNG) unit.

Golar’s FLNG Hilli, currently under conversion in Singapore’s Keppel Shipyard, is close to moving to West Africa to start its eight-year contract in the second half of 2017. 

Golar, owner and operator of liquefied natural gas carriers; Perenco, the French E&P independent and Cameroon’s state hydrocarbon company Société Nationale des Hydrocarbures (SNH), are partners in the 1.2Million Tonnes Per Annum (MMTPA) FLNG Hilli, which they have been developing since November 2014.

Shell’s bigger Prelude FLNG project, planned for offshore Western Australia, took Final Investment Decision (FID) in 2011, four years earlier than the September 2015 FID for FLNG Hilli. But Prelude FLNG is a 5.3MMTPA project with all the issues of a large LNG facility. With 488m in length and 74m in width, it is the largest facility of its kind. It will monetize the resources in the 3Tcf Prelude natural gas field, discovered in 2007. Partners in the project include Shell, 67.5%, INPEX, 17.5%; KOGAS, 10% and CPC, 5%.

Golar has spoken with certainty about the scheduled delivery of the conversion project and claims it is within its $1.2Billion budget. Shell speaks less of timing of delivery and more of the might of the Prelude: ”Hundreds of engineers from across the world have combined their experience and expertise to design the world’s largest floating offshore facility”, the company says on its website. “It will be used to help open up new natural gas fields at sea that are currently considered too costly or difficult to develop”. Prelude FLNG is said to be the largest of its kind, but the world, really, does not yet know of any stationary gas floater! Module installation work for the Prelude FLNG has been completed at Samsung Heavy Industries’ Geoje shipyard in South Korea and, in the words of the JGC, which is contracted to support the completions work for the FLNG’s safe and on-schedule completion, ”commissioning is well and truly underway.” Still, it is likely that this project is not commissioned until the third quarter of 2017.

The Cameroon project is based on the allocation of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the FLNG Hilli. The 1.2MMTPA of LNG, represents approximately 50% of the vessel’s nameplate production capacity.


Nigeria’s Newest Indies Produce Close to 200,000BOPD

By Toyin Akinosho, in Lagos

Three Nigerian independents Aiteo, Eroton and Newcross, collectively produced close to 200,000Barrels Per Day at peak, close to the end of 2016.

These companies, each of which emerged less than four years ago, are the newest beneficiaries of the divestment programme of the oil majors operating in the country.

Aiteo Eastern E&P, the operator of the Oil Mining Lease (OML) 29, reported gross production of 92,000BOPD in October 2016, figures in NNPC’s December 2016 report show. Eroton E&P, in OML 18, averaged 63,764BOPD gross output in the same month. There were no figures published for Newcross in October 2016 and November 2016, (the last months for which figures are officially available), but the company, operator of OML 24, delivered 30,213BOPD in September 2016.

These figures come to about 186,000BOPD, roughly 10% of the country’s average 2016 production and are less than half of what the 22 Nigerian owned producers of crude oil and gas are capable of delivering.

Indeed, the five similar Nigerian independents, including Seplat, Shoreline Natural Resources, NDWestern, Elcrest and First Hydrocarbon Nigeria, who have had up to 80% of their production shut-in for more than 12 months by the damage to the TransForcados pipeline, were collectively producing over 160,000BOPD before the bombing. Seplat and Neconde alone were averaging 115,000BOPD prior to the February 14, 2016 outage.

Analysts however say that Nigerian owned oil producing companies have not historically been consistent in maintaining, let alone increasing production. Conoil, which produced around 45,000BOPD in 2005, and now delivers less than 10,000BOPD, with four acreages, is proof of this assertion.

“Poor governance is part of the challenge”, says Sam Ojehonmo, an Africa focused energy consultant based in Cairo, “but these new breed of operators have a different challenge; they took huge loans to buy the assets; the earlier generation had the assets largely handed over to them gratis, and they were cash flush when they had to bid for another round of acquisitions”.

Aiteo, Eroton and Newcross took over their assets from the consortium of Shell, TOTAL and ENI between 2014 and 2015, paying a total of $4.1Billion for the consortium’s 45% share, with the state hydrocarbon company, NNPC holding the remaining 55%. “We are a strategically important Borrower to the Nigerian banking industry”, Chike Onyejekwe, Group Managing Director of Aiteo, told an industry summit a fortnight ago in Abuja.


Petrodata Achieves ISO 27001:2013 Certification

Petrodata Management Services Limited (PMSL) is the first multi-clientele Storage Data Centre in West Africa, a wholly owned Nigerian company incorporated in 1994 with a share capital of N250 Million out of which N185 Million has been fully paid up; today announced that it was awarded the International Organization for Standardization (ISO) 27001 certification.

The ISO 27001:2013 certification includes the provision of data management services, encapsulating Cloud Services & disaster recovery; Electronic document Management systems (EDMS); Software Services (PSS), Colocation services; Data Storage, Data Transcription and Well Log Digitization Services.

ISO 27001:2013 is a global security standard that sets out requirements for an Information Security Management System. Petrodata’s compliance with the ISO standard was certified by DAS Certification – Member of United Kingdom SN Registrars (Holdings) Limited. It validates the company’s strong commitment to the ongoing maintenance and development of its Information Security Management System (ISMS), making information security and data protection an integral part of all its business processes.“The ISO 27001 Certification aligns with our strategic vision for Petrodata as a Storage and Data Management Service provider,” said Wole Shebioba, Managing Director of Petrodata.

We are honored to have earned this certification, demonstrating that our highest level of controls is in place when handling client’s confidential information.

Petrodata is continuing its commitment to provide further assurance of security controls and practices has established a governance program that includes the Management Committee whose job is to support the ongoing security improvements since we believe the “race for quality has no end”.


Nigeria’s Senate Says Four Petroleum Laws Will Be Passed in 2017

The upper house of the country’s bicameral legislature, the Senate, will pass all the four petroleum reform bills replacing the Petroleum Industry Bill before the end of the year, a ranking legislator has said.

“We will lay down the third reading of the Petroleum Industry Governance Bill (PIGB)sometime in March and possibly pass it by April 2017”, David Alasoadura, Chairman of the Upstream Petroleum Committee in the Senate, said in response to a question by Africa Oil+Gas Report at the Nigeria Oil and Gas (NOG) conference in Abuja last week.

The PIGB is the first of four bills which replace the Petroleum Industry Bill (PIB), which has been under deliberations since 2008. “The third reading is the last of the readings; it’s the nut and bolt reading”, he said.

The house is looking forward to fast track the passage of the three other bills; including the Petroleum Fiscal Reform Bill and the Host Community Bill. “We plan to combine two of the three remaining bills so that we can pass all the bills before the end of the year,” Alasoadura said.


Nigeria’s LPG Consumption Inches to 500,000Metric Tonnes Per Annum

Consumption of Liquefied Petroleum Gas (Cooking Gas), reached 500,000Metric Tonnes in 2016, according to Dapo Adesina, Chairman of the Nigeria Liquefied Petroleum GAS Association.

It was the first year in which the Nigerian Liquefied Natural Gas (NLNG), which has been the main supplier of the fuel since 2004, broke even on the project.

The company provided 350,000 Metric Tonnes, or 70% of the consumption, in 2016. Other suppliers included NNPC refineries , but the consumption is still far short of the World Bank estimated market potential for the country which, as far back as 2004, was 3.2Million Tonnes Per Annum.

NLNG was instructed by the government of President Olusegun Obasanjo administration to start supplying the market in 2003, by which time the refineries had almost entirely ceased supplies and there was a near zero supply to the market, leading, itself, to significant reduction in demand.

The NLNG intervention, which started with 70,000Metric Tonnes Per Year allocation, thus guaranteed some security of supply, which led to increased demand from what was clearly a low base.

By 2012, the company had increased its allocation to 150,000 Metric Tonnes. It increased to 250,000 Metric Tonnes in 2013 due to growing demand.


Ophir Says Fortuna LNG Will Be One of A Handful of FIDs in 2017

Ophir Energy says that Final Investment Decision for Fortuna “will be one of a handful of global FIDs of a green-field LNG project in 2017”.

Fortuna is located offshore Equatorial Guinea. In November 2016, Ophir signed a Shareholders’ Agreement with OneLNG in November 2016 for the formation of a Joint Venture that will develop and finance the Fortuna FLNG project.
Ophir is excited that the establishment of a Joint Venture with other partners “means we can now move the Fortuna FLNG Project towards FID in mid-2017. At FID, the project NPV will be a healthy multiple of the $120Million of capital we are committing before first gas”

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