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For Ororo 2, Sirius Will Take Adriatic 1, from Amni

After waiting for over four months on COSL Force rig, Sirius Petroleum has moved on to an alternative for its two well drilling campaign on the Ororo field in shallow water Oil Mining Lease (OML) 95 offshore North western Niger Delta of Nigeria.

The company now says it would utilise the Adriatic I jack up, operated by Shelf Drilling, and currently on duty on Amni Petroleum’s Okoro field in south eastern offshore Niger Delta. Sirius says it has decided, by mutual agreement with China Oilfield Services Limited (COSL), “to abrogate its agreement with the latter for the supply of a jack-up rig for the drilling programme on the Ororo field.

COSL Force rig was expected to have mobilized on its way to Nigeria, since June 2018 at the latest The Ororo field is held by Guarantee Petroleum and Owena Oil &Gas, to whom Sirius is a Financing and Technical Partner. But in early June 2018, Sirius reported that COSL Force Jack up rig had commenced critical equipment re-certification programme which it had to do “before it could be released to its next contract” That re-certification process has taken all the last four months.

Sirius’ agreement with Shelf Drilling Limited is to supply its Adriatic I jack-up rig “which is scheduled to become available during November 2018”.  Sirius’ statement indicates that the rig is concluding a well campaign with Amni, which is “utilising Schlumberger services and equipment on board the Adriatic I, and meets the specifications required for the Company’s proposed drilling programme at Ororo-2 and Ororo-3”.  Sirius says that its  Company’s operational budget for the Ororo drilling programme as disclosed in the Company’s admission document published on 30 November 2017 remains unchanged.

This means that the four month delay in waiting for the COSL jack up rig has not caused any financial harm. The company doesn’t say anything of the fact that part of the deal with COSL was that the drilling company would be part vendor financing the drilling. It says of Adriatic 1: “The proposed rig is fully certified, currently previously announced, the Company and its operational partners, Schlumberger and Add Energy intend to achieve the spudding of Ororo-2 at the earliest possible time during Q4 2018.”

 


Will Sirius Petroleum Spud Ororo-2 Before Year End?

Sirius Petroleum has admitted, publicly, that the rig it announced would drill its first well on a Nigerian marginal field, has taken too long to arrive.

COSL Force rig was expected to have mobilized on its way to Nigeria, since June 2018 at the latest. The China Oilfield Services Limited (COSL) operated jack-up is meant to drill Ororo-2 on the Ororo field  in shallow water Oil Mining Lease (OML) 95.

That asset is held by Guarantee Petroleum and Owena Oil &Gas, to whom Sirius is a Financing and Technical Partner. But in early June 2018, Sirius reported that COSL Force Jack up rig had commenced critical equipment re-certification programme which it had to do “before it could be released to its next contract”. Since that early June announcement, Sirius had not published any update on Ororo, until September 27, 2018, when it declared that it was currently waiting to conclude this process (of deploying a rig to site) which “has taken significantly longer than originally envisaged”. Sirius then said it was “at an advanced stage of concluding its rig requirements in order to achieve the spud of Ororo 2 in Q4 2018”, a very ambiguous statement.

Sirius first mentioned it had a partial vendor financing deal with COSL in a late 2017 presentation, where it reported an Initial Ororo-2 well programme, delivering initial production of 2,700BOPD in HI 2018. “Sirius has the option to extend the well campaign to drill additional wells under the commercial arrangements with the service providers”, it had promised.

 


TOTAL Expects First Gas from Erg Issouane in 2021

Algeria’s state hydrocarbon company Sonatrach and the French major TOTAL have signed two agreements as part of the comprehensive partnership announced in 2017:

  • A new concession contract to jointly develop the Erg Issouane gas field located on the TFT Sud permit, signed by Sonatrach, TOTAL and Alnaft (the National Agency for the Valorization of Hydrocarbon Resources).

The TFT Sud permit is located south of the Tin Fouyé Tabankort (TFT) field, of which TOTAL is a long-standing partner. Sonatrach (51%) and TOTAL (49%) will develop the reserves of Erg Issouane located on the TFT Sud permit estimated at more than 100Million barrels of oil equivalent (BOE). The development, which represents an investment of around $400Million, will be tied back to the existing TFT gas treatment unit by a 22-kilometer-long gas pipeline. First gas is expected late 2021. The partners have also signed a gas marketing agreement. The concession contract will become effective upon approval by the Algerian authorities.

  • A shareholder agreement to create a joint venture known as STEP (Sonatrach TOTAL Entreprise Polymères).

STEP will be responsible for carrying out a joint petrochemical project in Arzew, western Algeria. The project includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tons per year. The two partners (Sonatrach 51%, TOTAL 49%) are planning to start the front-end engineering and design (FEED) from November 2018.

“This project will allow to valorize the propane, produced in large quantities locally, by transforming it into polypropylene, a plastic for which demand is growing strongly”.

 

 


Aker Makes Hay With Ghanaian Asset

Aker Energy, who purchased Hess Corp’s Ghana interest less than nine months ago, has set to work on the acreage, signing a rig contract and looking to drill in the next month and half.

The Maersk Drilling operated ultra deepwater drillship Maersk Viking will spud the Pecan-4A appraisal well offshore Ghana latest November 2018. Aker’s contract with Maersk covers one firm well with an expected duration of between 30 and 35 days, with options for additional wells.

The location of the probe is in an ultra deepwater depth of 2,674metres in the Deepwater Tano Cape Three Points (DWT/CTP) block. The main objective of the well will be to test the extension of the Pecan Field. This will give valuable and important input when optimizing the plan of development for the field and in understanding the wider appraisal potential of the block”.

Aker Energy operates the DWT/CTP block with a 50% participating interest, LUKOIL (38%), Ghana National Petroleum Corporation (10%) and Fueltrade (2%).

 


Indies: What Would Africa Do Without Them?

By Toyin Akinosho

The concept of local content grew out of the concern that the oil industry operates as an enclave sector in most hydrocarbon resourced African economies.

But in those countries where the oil companies serve as part of the industrial pivot, there’s a good chance that the main actors are independents, not majors.

In most of Africa’s petrostates, it is the independents who commit more to local beneficiation of the molecules.

The story is that the majors once built and operated local refineries in some of these countries, but that the era has since gone.

Independents now demonstrate more commitment to serve as industrial partners.

Take Cameroon. The French operator Perenco developed the offshore Sanaga field and installed a gas processing plant, to feed the 216 MW Kribi Power Plant.  The company inaugurated a Floating Liquefied Natural Gas (FLNG) facility to export gas from the same field. True. But from this small project (1.2Million Tonnes Per Annum), it produces an annual volume of 30,000Tonnes of cooking gas (technically known as LPG), on the side, for the country.

In Gabon, it has been Perenco, not TOTAL, not Shell, that has beensupplying natural gas to power plants in Libreville and in Port-Gentil.

Victoria Oil &Gas, the tiny British gas producer, can be credited to have built the natural gas market for Douala, Cameroon’s main commercial city, from scratch. The company arrived the country in 2008, acquired the Logbagba marginal gas field, and started work, drilling gas wells and, “convincing factories and small industries to replace expensive diesel with natural gas for their power needs, constructing a gas supply network round the city, and drilling even more gas wells”, according to a report in the April 2018 edition of Africa Oil+Gas Report. The company, the magazine reported, “ambitiously set a target for a near tenfold increase from thirteen million standard cubic feet per day 13MMscf/d, in 2017, to 100MMscf/d by 2021”.

To ensure that gas resources were available for the anticipated expansion, VOG has been on an acquisitive mode for acreages. In 2016, it secured 75% interest in the Matanda block, a 1,235-sq km acreage adjacent to Logbaga. The Matanda field,  ”indicates the potential for more than 1Trillion cubic fet (Tcf) of recoverable gas across onshore sections of the block”, the company says.

THE METHANOL PLANT IN EQUATORIAL GUINEA is owned by two American independents, Marathon Oil and Noble Energy, as well as  the government parastatal  SONAGAS, the National Gas Company of Equatorial Guinea. The plant started production in 2001 and produces in excess of 1,000,000 metric tons of methanol per year, or just greater than 1% of the global market. It is fed with natural gas from the Marathon operated Alba field. Again, it is true that a significant volume of gas from Alba field is exported as LNG through the Equatorial Guinea LNG, but those same reservoirs feed the 155MW Malabo Gasfired Power Plant.

Now that Alba field is in decline, it is gas from Alen field, operated by another independent, Noble Energy, that Equatorial Guinea has turned to for replenishment.

In Ghana, about 120MMscf/d of natural gas from the Jubilee field, operated by the UK based Tullow Oil, has been a more reliable fuel for the country’s electricity plants than the gas exported from Nigeria by a company majorly owned by Shell and Chevron(and operated by the latter), which have been stuck at around 60MMscf/d for the past three years. The Italian giant, ENI, has just completed a gas supply system from the Sankofa field that will deliver 180MMscf/d, but it is important to note that the foundation for local supply of natural gas to electricity plants in West Africa’s second largest economy was laid by independents (Kosmos and Anadarko are Tullow’s partners).

In Gabon, it has been Perenco, not TOTAL, not Shell, that has been supplying natural gas to power plants in Libreville and in Port-Gentil. The gas is produced onshore, treated to specification and delivered at pressure through a 450 km, 36MMscf/d capacity gas pipeline across the country. It is a major contribution to national power needs and industrial development.

In Nigeria, Shell likes to claim the credit for helping to inaugurate the Gas to Power market, but the contribution of the majors to the country’s bourgeoning domestic gas industry is on the wane. Shell has divested its largest domestic-purpose gas processing plants. Seven Energy (now Savannah) and Oando have each been more daring in constructing midstream gas supply pipelines in the country than any major. Seplat, the London listed independent founded by Nigerians, now supplies close to 400MMscf/d of gas to the domestic market and the molecules are mainly used for electricity generation.

What’s more, while the only crude oil refinery outside of the NNPC operated sub performing refineries is owned by Niger Delta Petroleum. Now, two other small refineries are under construction by Nigerian independents. One is the 5,000BOPD Ibigwe Refinery, promoted by Waltersmith Petroman; the other is the 7,000BOPD OPAC Refinery, which is being developed by Pillar Oil and partners. Of course the largest refinery under construction in the country is the 650,000BOPD Dangote Refinery, but how do you classify Dangote Industries?

LONG BEFORE BG, THE DEFUNCT BRITISH GAS COMPANY, discovered large deposits of gas offshore Tanzania, the country had been growing a domestic gas market on the back of the onshore and shallow water reserves, estimated at around eight trillion cubic feet (8Tcf). This market was created and developed by small companies. Today, Orca Exploration, originally from Canada but now very Tanzanian; Paris based, Indonesian owned Maurel et Prom and the AIM and Oslo listed Wentworth Resources are, in partnership with the government, collectively responsible for Tanzania’s 160MMscf/d domestic gas industry, which is vibrant and growing.

 


Midwestern Moves to Grab A Large Slice of San Leon

Nigerian independent Midwestern Oil &Gas has entered into a binding agreement with SunTrust Oil Company Nigeria Limited, to acquire the latter’s equity interest in San Leon Energy.

San Leon holds 10% economic interest in Oil Mining Lease (OML) 18, in which Midwestern is also an equity holder.

The AIM listed San Leon reports that Midwestern has notified the Company that Pursuant to the agreement, Midwestern will acquire a total of 71,487,179 ordinary shares in San Leon (representing 14.29 % of the issued ordinary shares of the Company and SunTrust’s entire remaining interest in the Company).

There is something curious about this breaking story for anyone who has chanced on the dispute between San Leon and Sun Trust.  Just three months ago, Suntrust summoned San Leon Energy Plc and six other defendants to appear before a Federal High Court in Lagos, Nigeria,  within 30 days in the suit number FHC/L/CS/793/2018 in respect of Oil Mining Lease (OML) 18. The six other defendants in the suit are Midwestern Leon Petroleum Limited, Martwestern Energy Limited, Midwestern Oil and Gas Company Limited, Mart Resources Inc; Minister of Petroleum Resources and the Corporate Affairs Commission (CAC). In the statements of claim Suntrust alleged that in order to acquire an indirect economic interest in OML 18, San Leon Energy Plc began acquiring direct and indirect interests in Martwestern Energy’s shareholding from March 2016, contrary to the November 2013 shareholders’ agreement between the plaintiff, Martwestern Energy, Midwestern Oil, and Mart Resources Inc. “San Leon Energy and Midwestern Oil and Gas formed Midwestern Leon Petroleum Limited as a special purpose vehicle to acquire and restore the entire shareholding in the Martwestern Energy outside the framework of the shareholders’ agreement,” Suntrust Oil alleges. The plaintiff argued that Midwestern Oil and Mart Resources Inc. transferred all their shareholdings, four million shares each, to Midwestern Leon Energy (Sale Shares), adding that Midwestern Leon did not execute the Deed of Accession as required by Clause 13 of the shareholders’ agreement.

San Leon had not made any public statement about resolution of this court dispute before the new story about Midwestern purchasing Sun Trust’s shares in San Leon.

San Leon merely states that Sun Trust’s shares in San Leon are being transferred to Midwestern in exchange for the transfer of interests in certain assets currently owned by Midwestern. San Leon has been informed by Midwestern that 47,243,590 ordinary shares in San Leon (representing 9.44% of issued ordinary shares) have already been transferred to Midwestern, and that the remaining shares will be transferred by SunTrust in the coming weeks.

San Leon says that the transaction does not directly involve San Leon or its assets.

 


King Kosmos Waves the Sceptre

By Moses Akin Aremu 

Kosmos Energy has taken the spotlight as the Western independent mostly associated with African frontier exploration.

The Dallas based independent didn’t get properly recognised for opening the Tano Basin offshore Ghana, even though it made the 2007 discovery on which Tullow Oil rode to world acclaim.

No one could ignore, however, its effort in the North West African margin.

Even when it comes up with dry holes back to back it is able to snatch victory from the jaws of defeat. The statement that its second phase of exploration offshore Mauritania and Senegal, “yielded the industry’s largest hydrocarbon discovery of the year at Yakaar-1”, masks the reality of three dry holes in that campaign, and the fact that the Yakaar-1 was the lone discovery.

The claim also conveniently hides the company’s frustration at not finding the sorely wanted oil reservoirs, outboard the gas that it had earlier encountered in the Tortue complex off those two countries in mid-2015.

Kosmos couches its disappointment in earth science speak. The campaign, it said, had provided “sub-surface data that will help us refine our understanding of how the petroleum systems offshore the two countries work”.

There are many influential entities who bet on Kosmos’ extraordinary ability to deliver on E&P projects, from exploration to production.

Gabriel Obiang Lima, Equatorial Guinea’s Minister for Hydrocarbons, is one, and we’d soon get to that.

BP is another.  The British major is so much a worshipful admirer of the geoscientific competencies of this sleek American independent, that its agreement with Kosmos has extended beyond the partnership in NW Africa. Now they work together in Cote D’Ivoire and are jointly seeking prospective tracts elsewhere on the continent.

BP’s philosophy is: Kosmos understands the geology of Africa. It gets to do the foundational basin analysis and maps the fairways. It determines where the leads are and comes up with the play concepts. It generates the prospect inventory. It then works up the well locations and drills.

If there is a discovery and two appraisals follow successfully, BP takes up the development phase.

 


Three In One Quality Marks Out NigerStar 7ADABA

By Foluso Ogunsan

PAID POST

The NigerStar7 ADABA, a recently acquired vessel by NigerStar7, was unveiled at a renaming ceremony  held at the NigerDock facility, its first port of call on the 20th of September 2018. NigerStar7 is a Nigerian joint venture company formed by the Jagal Group and SubSea7, an offshore pipeline-laying and subsea infrastructure deployment organisation that had previously operated, exited and re-entered the Nigerian oil service industry.

NigerStar7 ADABA is described by Yann Cottart, CEO of NigerStar7, as “an Anchor Handling Tug and Supply vessel that is wholly-owned and flagged as a Nigerian ocean-going vessel entirely manned by a Nigerian crew of 14 persons”. This tripartite quality, Mr. Cottart, explains, ”makes it a first in the Nigerian offshore service industry”. Cottart claims that the vessel is “the most powerful anchor handling tug operating in Nigeria presently with a bollard pull of 140 tons. It can tow rigs and large-capacity supply vessels, retrieving and deploying anchor in deep offshore environment.” Mr, Cottart allows that the tugboat is “permanently imported and equity-financed through international lending of $10Million  in direct investment into the country. Ancillary services will add further $10Million in the next five years

Built in 2008, the Dynamically Positioned (DP2) vessel measures 70metres in length, summer draft of 6.1metres, deadweight of 2114.74metric tonne, gross tonnage of 2,705metric tonne, lightship of 2,539.51metric tonne, with applicable fire-fighting capability for both offshore and portside fires. The deck space measures 462square metres. It has a 52-bunk capacity, 14 crew members inclusive”. This tug has two Operation stations OS1 and OS2 equipped with three individual 680 kilowatt thrusters, two at the Bow, the third at the Stern. The thrusters allow the DP2 vessel to operate and switch stations without changing positions. A 2.2 metric tonne telescopic boom crane sits mid-ship the vessel. The vessel comes equipped with Electronic Fuel Monitoring System.” He further stated safety, integrity, innovation and performance as the bedrock of the NigeStar7 brand which aims to compete internationally.

For a vessel that has been operational a decade in, won’t its servitude time in Nigeria ebb quicker? “Not so!”, states Maher Jarmakani, Group CEO of the Jagal Group, one-half of the joint venture partnership- NigerStar7. “It’s not uncommon for vessels this kind to run a 25-year lifespan and still be useful”. With two jobs at hand, first-off the Erha Field onwards to Qua Iboe Terminal, both ExxonMobil facilities, the NigerStar7 ADABA has started off her Nigerian service life running. Port/Yard dockings during off-peak periods will largely be determined by economical factors of costs and benefits.

This is a sponsored article.

 

 

 

 

 

 


The German Force Is Out to Get Oil

Germany has not been identified with a large, influential independent oil and gas company.

The proposed merge of LetterOne and BASF attempts to change that premise.

The two companies have signed a Business Combination Agreement to merge their oil and gas businesses and create Wintershall DEA. Closing of the transaction is subject to customary regulatory approvals.

“Wintershall DEA will be the largest independent European exploration and production company”, says a statement by the would -be new company, “with activity in twelve countries across Europe, Latin America, North Africa and the Middle East. The combined business would have had pro-forma production of approximately 575,000 barrels of oil equivalent per day in 2017, almost 70% of which comes from natural gas. Production is expected to rise to between 750,000 and 800,000 barrels of oil equivalent per day in the early 2020s as the company executes its business plan”.

DEA Deutsche Erdoel AG is an international operator in the field of exploration and production of crude oil and natural gas based in Hamburg. It has shares in production facilities and concessions in, among others, Germany, Norway, Denmark, Egypt, Algeria and Mexico. Production of DEA averaged 125,000 barrels of oil equivalent (BOE) per day in 2017; as of year-end DEA had 1P reserves of 508 million BOE, and 2P reserves of 698 million BOE.

Wintershall, headquartered in Kassel, Germany, focuses on exploration and production in oil and gas-rich regions in Europe, Russia, South America, North Africa, and the Middle East. Its production averaged 450,000 BOE per day in 2017; as of year-end Wintershall had 1P reserves of 1.67 billion BOE.

L1 Energy is the energy investment arm of LetterOne. LetterOne was founded in 2013 and is an international investment business headquartered in Luxembourg. LetterOne’s strategy is to build a new portfolio of successful companies that are leaders in their fields and sectors

In 2017, the combined business would have generated revenue of €4.7 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) of €2.8 billion. Based on the combined proven (1P) reserves of almost 2.2 billion barrels of oil equivalent at the end of 2017, the reserves to production ratio of the combined business would be approximately 10 years.

The combined portfolio and scale of Wintershall DEA will provide significant potential for sustainable, long-term growth. LetterOne and BASF expect to be able to realise synergies equivalent to at least €200 million per annum. In the medium term, the shareholders intend to offer shares in the company to the public through an initial public offering.

Wintershall DEA will be jointly headquartered in Hamburg and Kassel.

LetterOne and BASF will now begin the process of seeking regulatory approvals, a process which could take approximately six months. Until closing, DEA and Wintershall will continue to operate as independent companies.

BASF will initially hold 67% and LetterOne will hold 33% of Wintershall DEA. This does not take into account Wintershall’s gas transportation business. However, at closing of the transaction, Wintershall DEA will issue preference shares to BASF reflecting the value of Wintershall’s gas transportation business. Before IPO, but no later than 36 months after closing, these preference shares will be converted into additional ordinary shares in Wintershall DEA for BASF.

 


In 24 Months, Nembe Creek Trunk Line Will Be Running Empty

Work is far advanced on alternatives to the “renowned” Bonny Terminal

Nigerian companies pumping crude oil into the Nembe Creek Trunk Line (NCTL) have advanced so much in progressing alternative routes that several sources are “so sure” that there will be hardly a drop of crude pumped into that line by June 2020.

The 97kilometre pipeline, with capacity to pump 150,000Barrels Per Day, is a favourite of oil thieves, who routinely hack into the line, creating as many as 24 illegal bunkering points that require constant plugging.

The facility starts from the Nembe Creek field in Oil Mining Lease (OML) 29, and ends at a manifold at the Cawthorne Channel field on OML 18. From here, crude is evacuated the short distance to the Bonny oil terminal.

Up to 600,000 BOPD of liquids can be evacuated from the end point at Cawthorne Channel.

Shell doesn’t pump its own crude into NCTL, but sends the liquid into the short line between Cawthorne Channel and the Bonny Terminal.

AITEO, Eroton and Newcross, three Nigerian independents which evacuate their crude through the NCTL, lose as much as 40% of the crude routinely to oil theft, sources tell Africa Oil+Gas Report. They have each been working assiduously on alternatives, with Eroton reportedly being ahead of others, to install alternative pipelines that evacuate their crude to FPSOs on the Atlantic.

“The famous Bonny Terminal looks like is about to lose its relevance after several decades”, sources tell Africa Oil+Gas Report. NCTL was reopened on July 8, 2018, a full month after the latest shut in for repairs.

This story was earlier published in the July 2018 edition of the Africa Oil+Gas Report monthly.

 

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