All posts tagged featured

Agip To Contribute Two Fields To Marginal Bid Round 2017

By Wanokabo Okaikai, in Lagos

For the first time ever, undeveloped discoveries in Nigerian Agip operated acreages may be awarded as marginal fields.
Two accumulations operated by the company are likely to be part of about 40 fields expected to be on offer, when the Nigerian government launches the much awaited marginal fields bid round later in the year.

Sources in Nigerian Agip, the Nigerian subsidiary of the Italian giant ENI, confirm that preliminary data from two of the company’s operated undeveloped discoveries are in the “bid basket” of the Department of Petroleum Resources, the agency responsible for conducting the bid round.

Agip has been unable to “participate” in marginal field awards since the exercise formally began in 2002 because, of all the majors, it has the least prospective acreages in Nigeria, especially Onshore, where the bulk of undeveloped discoveries referred to as marginal fields are located.

Only three of the five oil majors operating in Nigeria contributed fields in their acreages to the basket, during the in the landmark 2002/2003 marginal field bid round.

ExxonMobil did not contribute any field in those awards but has, in the past 15 years since then, “given” up two marginal fields: Okwok and Ebok to the Nigerian government, in furtherance of the cause, which is to help boost indigenous capacity.
Outside the 2002/2003 awards, Shell has contributed two more marginal fields. Ubima and Otakikpo were awarded by the Nigerian state in 2012, outside the process of a bid round, a situation that was severely criticised.

The Marginal field round is expected to be declared open latest September 2017. Click here for a map showing the likely bid round candidates.

West African Ventures Not Affected By STG’s Liquidation

Sea Trucks Group (STG) Limited has gone into provisional liquidation, but its subsidiaries are not subject to insolvency proceedings, according to FTI Consulting, the firm handling the Liquidation.

“The management team remain in control of operations and it is business as usual for the Group”, FTI declared in a statement. “The provisional liquidation of the Company has no impact on the operations of the Group”. This is quite an odd sort of liquidation.

STG is an international group of companies offering offshore installation, accommodation and marine support services to the oil and gas industry worldwide. One of its key subsidiaries is the Nigerian based West African Ventures, which has always claimed to be an indigenous company. WAV’s corporate headquarters are in Lagos. It has a Marine Support Base and shipyard in Warri and Dry-dock and Fabrication facilities in Onne Oil and Gas Free Zone, in the east of the country.

The Eastern Caribbean Supreme Court in the High Court of Justice British Virgin Islands appointed, on May 5, 2017, Chad Griffin of FTI Consulting LLP and Ian Morton of FTI Consulting (BVI) Limited as Joint Provisional Liquidators. A statement by FTI notes that “the appointment is only to the Company, being the group holding company”. The underlying operating/asset owning companies (the “Subsidiaries”) are not subject to insolvency proceedings.

Griffin, Joint Provisional Liquidator of the Company, commented: “The Provisional Liquidation will provide stability and Court protection, to create a platform to maximise value. We will be working closely with the Group’s directors and management team to understand the affairs of the Company.”

Chevron’s Deepwater Production Overwhelms Its Shelf/Onshore Output

Chevron’s net daily production in the Niger Delta’s shallow water and onshore acreages averaged 56,000 barrels of crude oil, from 27 fields in 2016. This is less than half of the 148,000BOPD the company averaged (net) in two fields the deepwater in the same year.

Chevron Nigeria’s main provider is Agbami field, from which the American major had a net output of 120,000BOPD. The company averaged 28,000BOPD (net) from the Usan field, also in deepwater. But Agbami’s gross average for the year was 238,000BOPD, clearly the continent’s largest gusher of oil.

The dominance of deepwater production mirrors the country’s crude production profile in the last 10 years. In 2005, Chevron was operating about the same volume it does now, with nary a drop of oil from deepwater.
What Chevron is producing in abundance, on the shelf, is natural gas. In 2016, the company averaged, on a net basis, 142Million cubic feet of natural gas, most of it for the domestic gas market. It produced, for export, 4,000 barrels of LPG every day.

Chevron says it is continuing its efforts to monetize total potentially recoverable natural gas resources of approximately 17 trillion cubic feet in the Escravos area through a combination of domestic and export sales and use as fuel in company operations. That is close to 10% of Nigeria’s estimated natural gas reserves of 192Tcf. The company is the operator of the Escravos Gas Plant (EGP) with a total processing capacity of 680Million cubic feet per day of natural gas and an LPG and condensate export capacity of 58,000 barrels per day.

ExxonMobil Is Not Helping To Balance the Market

By Fred Akanni, Editor in Chief

American oil companies are pumping more crude into the global economy, just as OPEC is desperately seeking to balance the market with cuts in production by its members.

The poster company for the surge in output, notably from shale formations, is ExxonMobil, the world’s largest publicly traded oil company.

Although data from OPEC’s research unit indicates that shale oil output will ultimately begin a rapid decline in the 2030s by natural depletion, the production boost from this source, in the short term, is only likely to arrest the price increase that everyone thinks the market needs right now.

Western Analysts like DrillInfo argue that cut in production by OPEC countries will have to “be extended because the first cuts didn’t balance the market”. They say that if that doesn’t happen, “ prices won’t remain at this level” , meaning above $50.

But prices have not held steady above $50; indeed in the last week the price of the premium blends have dipped below $50.
DrillingInfo notes that, with American producers continuing to expand U.S. production as they become more efficient and produce at a lower cost, “they aren’t helping to balance the market.”
Such statement point fingers at a company like ExxonMobil, the largest of the aggressive Shale oil producers. The company, in its 2016 Annual report, is not bashful about how well it has done to increase crude oil output. “Approximately 350 new wells were brought to sales, mainly across the Permian and Bakken areas “(which are prominent shale basins), “during 2016. Our operating efficiency continues to improve. In the horizontal program in the Permian Basin, we have reduced cash field expenses to approximately $5 per barrel(1), a 46% reduction since 2014”.

“In 2016, unconventional development in the Permian Basin remained a key focus. One strategic transaction added approximately 3,000 acres in the Delaware Basin, supplementing our already strong unconventional Permian position across the Wolfcamp, Spraberry, and Bone Springs formations. At year-end 2016, we operated nine unconventional rigs in the Permian. Our net production grew 45 percent during 2016. In the prolific Wolfcamp formation in the Midland Basin, we have increased ultimate recoveries while substantially reducing drilling and completion costs. ExxonMobil holds 222,000 net acres in the Haynesville/Bossier Shale of East Texas and Louisiana, where we continue to capture benefits from drilling and completion improvements”.

ExxonMobil also boasts that The Bakken (Shale)”remained one of our most active unconventional programs in 2016, with production volumes again reaching all-time highs”. The company “currently holds 570,000 net acres of high-quality resource in this play”. With three drilling rigs in operation in 2016, net production in the Bakken increased 18%. In 2016, “we continued drilling at a measured pace in the liquids-rich Woodford Shale in the Ardmore and Marietta basins of southern Oklahoma.

We operated one rig on our 281,000 net acres. We continue to advance infrastructure projects to optimize production from this area”. ExxonMobil holds 492,000 net acres in the Marcellus Shale across Pennsylvania and West Virginia. It also hold 33,000 net acres in the promising Utica Shale in Ohio. it has continued “ to develop and maintain our leasehold of 190,000 net acres in the Barnett Shale play in North Texas. In the Freestone tight gas trend, where ExxonMobil holds 265,000 net acres, we remain focused on operating efficiently and making disciplined investments to offset decline”.

AP Counters TOTAL’s March On Senegal

By Sa’ad Bashir, in Dakar

A small, non-producing E&P independent, is attempting a David on the French major

TOTAL’s announcement that it had entered into an agreement with the Senegalese government, on the Rufisque Offshore Profond (ROP) block, was countered by African Petroleum, less than 24 hours after the major’s claim on the block.

The Australia listed minnow said it had a subsisting agreement on ROP with the Senegalese government; the same authority that TOTAL claims it had a deal with. “Under the terms of the ROP PSC, the block remains active unless and until a termination procedure is enacted by the Republic of Senegal”, AP wrote in a statement. “To date, the Republic of Senegal has not validly enacted such termination procedure, and accordingly the Company reserves its rights under the ROP PSC”.

TOTAL had announced, on May 2, 2017, that under its agreement with the Republic of Senegal, it “will be the operator of the 10,357 square kilometer block with a 90% interest alongside Société Nationale des Pétroles du Sénégal (Petrosen), holding the remaining 10%.”

The Senegalese government had not offered a rejoinder to AP as of the time of this writing. TOTAL takes the Senegalese acquisition seriously; the agreements were signed by Patrick Pouyanné, TOTAL’s Chief Executive Officer and the Senegalese President Macky Sall . Both men were present at the Press Conference announcing the agreements, which also had Prime Minister Mahammed Boun Abdallah Dionne.”We have signed two new agreements to explore, look for oil and gas in offshore Senegal,” said Pouyanné.

TOTAL actually made some commitment at the conference.  Mr. Pouyanné said the company intended to inject $ 100Million, although he did not give a time frame for the investment. Senegal has been at the centre of the recent rush for the Northwest African margin.

African Petroleum may have lost the asset for apparently sitting on it for so long without activity. It has been the 90% holder of ROP for over six years. The best that it has done was to purchase 1,800 sq km of three dimensional seismic data from Petrosen, which it was reprocessing. AP apparently hoped that, with a slew of discoveries in the neighbourhood, a well heeled E&P operator would come along and farm into the asset. Instead, the government chose to award it to one of Europe’s largest oil companies.

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Tony Hayward Bows Out of The Company He Created

By Sully Manope

Tony Hayward will retire as a Director and Chairman of Genel Energy, a company he helped create, at the conclusion of the 2017 AGM, to be held on June 6, 2017.
Stephen Whyte will take up the role of Chairman.

Genel Energy was formed in 2011 through the reverse acquisition of Turkish Genel Enerji by the  investment company Vallares, led by Tony Hayward, who had just been forced out as CEO of BP (in the event of the Deep water Horizon spill in the Gulf of Mexico), Nat Rothschild, a financier and Julian Metherell, a banker.

At the time, Genel Enerji was controlled by the wealthy Turkish businessman Mehmet Emin Karamehmet, who ran the company through his Cukurova Group (56%), a conglomerate and Mehmet Sepil’s family (44%). At the time Hayward and his partners showed up, Genel Enerji’s planned merger with Heritage oil, (the defunct British independent), had just collapsed.

But Hayward’s six year old creation has struggled, largely due to the challenges of receiving payment from production of its flagship asset, the Taq Taq field, located in the Kurdistan part of Iraq.

Whyte’s appointment as an independent non-executive director and Chairman designate was announced on April 24, 2017.

 Genel has some positions in Africa: in Somaliland and in Morocco, but it is not excited about either. Citing security issues, it has not conducted an aggressive work programme on the two acreages it operates in Somaliand. It plans to acquire portions of speculative two dimensional (2D) seismic data that the government has purchased and interprete the data after which, it says, it is not keen on extending the licences on the acreages.

In Morocco, Genel has drilled a well, which was promising, but it is not talking of appraisal.

Uganda’s Licencing Round Unravels

Two of the four companies that won the three acreages awarded at the close of Uganda’s 2015/2016 licencing round have discontinued with the process.

Waltersmith Petroman Oil Limited, awarded the 425 km2 Turaco Block in Ntoroko District, has opted out because of what it calls “unfavourable terms”.

Niger Delta Petroleum Resources(NDPR), which was paired with Oranto Petroleum International on the 410 km2 Ngassa block in Hoima district, said from the onset that it did not want to do get into the block unless it was granted operatorship. The company hasn’t had a conversation with any Ugandan official in the last four months.

Follow this link for fuller details of the report.

S/Sudan Opens Up Blocks B1 and B2 To Negotiations

Talks With TOTAL &Co Collapse

South Sudan’s Ministry of Petroleum says it welcomes the interest of investors for direct negotiations on oil and gas in blocks B1 and B2. The announcement comes after negotiations broke down with the French oil and gas company Total E & P due to irreconcilable differences. 

Officials of the Ministry of Petroleum met with representatives of the French major TOTAL in Kampala, Uganda between April 10 and 21, 2017. Also involved in the negotiations to develop an exploration and production sharing agreement (EPSA) for the blocks (B1 & B2) were UK independent Tullow Oil Private Limited Company and the Kuwait Foreign Petroleum Exploration Company (KUFPEC). The negotiations reached an impasse over the proposed exploration period and cost recovery limit. 

“Following lengthy discussions with representatives of the company Total we have decided it is in the best interest of South Sudan to open opportunities to other potential investors,” said Ezekiel Lol Gatkuoth, Minister of Petroleum of South Sudan. “We had hoped for a favorable outcome but we believe these large and highly prospective blocks need a fast and ambitious development program to achieve their full potential. B1 and B2 are now open for direct negotiation.”

Blocks B1 and B2 were once part of the 120,000 square kilometer area known as Block B, which was divided into three licenses in 2012. The area is highly rich in hydrocarbon deposits but has experienced very little exploration. In March 2017, Pan African independent Oranto Petroleum Limited signed an exploration and production sharing agreement (EPSA) with the Government of South Sudan for Block B3. The area covers 25,150 square kilometers and has estimated reserves in place of more than 3 billion barrels.

“The resource base in these blocks are enormous and we need committed operators who are ready to invest and work with our government to comply with the laws of our country,” said the Minister. “South Sudan is creating an enabling environment for companies to operate. We want companies to invest, explore, produce and we are ready to offer incentives to investors.”
The Government of South Sudan has adopted a very pro-business stance with the expectation that aggressive investments in the petroleum sector will stimulate the economy. In 2017, the Ministry of Petroleum announced it was planning to double its total oil production by next year. South Sudan currently produces 130,000 barrels per day but can produce as much as 500,000 barrels per day. 

The Ministry of Petroleum invites companies to negotiate directly on Blocks B1 and B2. Government officials will be present at the Africa Oil & Power conference in Cape Town onJune 5, 2017 to advance discussions with interested parties.

In Senegal, The Aptian Carbonates Are Not Commercial

By Sully Manope, in Dakar

Cairn Energy has failed to find a commercial pool of hydrocarbon in the deeper, older reservoirs below the play it encountered in its 2014 discovery of the SNE field in Senegal.

The VR-1 well was loudly applauded in the media as a bigger success than most of the five appraisals of the SNE-1 discovery.” It is a significant step out, some 5 km west from the line of wells drilled to date, including the SNE-1 discovery”, Cairn says. “The results will be useful for the planning of the first phase of development – the lower 500 series reservoirs are the better connected, more tabular, highly productive sands, where water-flooding should yield recovery factors of 30% or more”. 
But while VR-1 was primarily meant to evaluate the 500 series reservoirs already confirmed elsewhere, its secondary objective was to test the carbonates below those sands.

“The deeper carbonate exploration targets were encountered as expected with indications of hydrocarbons at the base of the well in tight formation that is not currently viewed as commercial”, the company says in a release. 
A significant amount of new stratigraphic and log data has been recorded which will be incorporated into the regional geological model” Still, the company is encouraged that the appraisal results from VR-1 are very encouraging, as the well result confirms the predictability of the mapped reservoir over a wide area giving confidence to the reservoir engineering models”

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