There has been a flood of activities in the last three weeks in Nigeria’s secondary lease sale market.
In the month that Seplat announced the acquisition of AIM listed Eland Oil and Gas, largely for the complementarity of the latter’s Oil Mining Lease (OML) 40 with its base assets, Oslo listed Panoro Energy ASA agreed to sell its entire stake in OML 113 (Aje field) to another Norwegian Junior, PetroNor E&P Limited.
Meanwhile, in what used to be Petrobras’ assets in deepwater Nigeria, the Canadian minnow, Africa Oil Corp., is purchasing the stakes belonging to oil trader Vitol and Warbug Pincus backed Delonex Energy.
Yet it was only two months ago that LEKOIL announced it was acquiring 45% interest in Newcross operated Oil Prospecting Lease (OPL) 276, in the eastern Niger Delta.
ExxonMobil’s divestment of undeveloped discoveries is ongoing and the global news service, Reuters, has broken the news that Chevron would be divesting more than it was previously thought it would be. Chevron has not vigorously denied the report.
But the mother of all of these asset sales will be TOTAL’s divestment of its 12.5% stake in Shell operated OML 118, if yesterday’s Reuters report holds up. OML 118 hosts the Bonga main field, the Bonga North West, the Bonga North and the Bonga South West structures. The Bonga South West is under consideration for a Final Investment Decision (FID) on a project expected to deliver over 175,000BOPD at peak.
By Toyin Akinosho
In late October 2019, the South African government published the long-awaited Integrated Resource Plan, or IRP, which seeks to chart the means by which the country will manage and meet its electricity needs leading up to the year 2040.
The plan provides insight into the state’s 20-year approach to SA’s energy mix.
IRP 2019 envisages, among other energy types, some 1 000 MW of Gas To Power capacity being introduced into the South African grid by 2024, with a further 2 000 MW to be added by 2027
We have been here before.
Assigning a figure for proposed electrical power expected to be generated by natural gas in the energy plan does not begin to address the possibility of gas based industrialisation in South Africa.
For a country with such an absorptive capacity, a significant flow of gas into the economy is a compelling case against the forces of de-industrialisation, banging hard at the gates.
But the business/political elite has to have the appropriate mind-set to construct a system of opportunities to allow gas to flow in.
The absence of a framework for gas intake and utilisation is a core reason for the looming shutdown of the state run Gas to Liquid (GTL) plant which, at inception, was the largest such plant in the world.
The absence of a coherent guidance on gas to industry is why Sasol’s importation of (currently about) 400Million standard cubic feet of gas a day does not come across as a leverage factor for what the country can do with gas.
What has South Africa done to pump up its economy with natural gas? What has she done?
Find out the details in this Kick-starter piece in the October 2019 edition of the Africa Oil+Gas Report
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Watersmith Petroman Oil is primarily a marginal oilfield operator in Nigeria, producing, at peak, 7,000Barrels of Oil Per Day in the Ibigwe field.
It started production on the field in 2008.
The company’s aspirations for scale led it to acquire 8% in NDWestern in 2012, at a time the latter was purchasing the 45% of the Oil Mining Lease (OML) 34 that Shell, TOTAL and ENI were selling
11 years since the company started production in Ibigwe, and seven years since investment in NDWestern, Abdulrazaq Isa, its Executive Chairman says “the next wave of thinking in our company is that can we provide an industrial infrastructure where we then begin to provide other services to other people?”
He says that oil producing companies in Nigeria should use the oilfield infrastructure to deepen the value of oil extraction to the Nigerian economy. “We can acquire a significant amount of land within our area, we are building a refinery, we are providing electricity for ourselves, we are providing water for ourselves, we are providing security for ourselves so why can’t we scale that up and do that with other people?
Watch Abdulrazaq Isa explain the diversification of Waltersmith in this video
Amni International was drilling ahead in mid-October on a location in the Tubu field in Oil Mining Lease (OML) 52, in shallow water eastern Nigeria.
It is the first of eight development wells. The rig is Triident VIII, operated by Shelf Drilling.
Amni purchased Chevron’s 40% stake in OML 52 in 2014. The American major had drilled seven wells; the discovery well and six appraisals. In 2013, Chevron was carrying P1 reserves of 142MILLION barrels of Oil Equivalent.
Amni had its field development plan approved by the Department of Petroleum Resources and plans to drill eight wells to drain the field in the first phase, which is oil development. Some of the production facility is being constructed outside Nigeria. The well head platform will be tied into Amni’s existing Ima facilities, 10 kilometres to the south on OML 112.
It’s not clear what volume of oil per day is envisaged, but the oil development is the first of two phases. Gas development is the second phase of the project. For the first phase, associated gas will be extracted at Ima, and re-routed to Tubu for re-injection. Liquids will be offloaded at the same FPSO.
By Paul Njoroge
Australian explorer, Armour Energy, has suspended work on two dimensional (2D) Seismic data acquisition in the Kwanytaba block onshore Uganda.
Completion of that 2D seismic survey was part of the Minimum Work Program to be completed by the Company by 13 September 2019, pursuant to the Production Sharing Agreement for Petroleum Exploration, Development and Production in the Republic of Uganda By and Between The Government of the Republic of Uganda and Armour Energy Ltd for Kanywataba Contract Area dated 14 September 2017.
The Company wrote to the Minister in mid- October 2019, declaring that it was suspending work on the 2D seismic survey as a result of an event of Force Majeure (as defined under the PSA). Armour stated that recent severe storms and flood in the Kanywataba Contract Area, have made it practically impossible for vehicles to traverse many of the access roads in the Contract Area, so that the Company’s contractor cannot complete the line clearing, surveying or drilling activities necessary to complete the 2D seismic survey.
Armour ought to have finalised the seismic survey acquisition earlier, as per the terms of the licence, even before these recent weather challenges. But the company says that “due to a series of delays beyond the control of the Company, the Company was unable to complete the 2D seismic survey by 13 September 2019”. The Government of Uganda has made it a condition of the renewal of EL 1/2017 that the Company complete the 2D seismic survey during the second term of the licence.
Armour says that as at the date of this announcement, approximately 89% of the land clearing (being 96.06 km) and 86% of the surveying (being 93 km) necessary to carry out the 2D seismic survey has been completed. Also, 810 boreholes (into which the seismic charges are to be placed), or 37.5% of the total, have been drilled.
“Given the amount of work that was completed before work was suspended, the Company anticipates that it should be able to complete the 2D seismic survey relatively quickly once it resumes work”, Armour explains. The company says it is “advised that water levels will likely have sufficiently subsided by early 2020, to allow work to recommence”.
BP-Kosmos’ brand new Orca-1 discovery is more than a regular hydrocarbon find.
It has provided the British giant and the American junior, the confirmation of a possible second LNG project after the one already sanctioned.
The well targeted a previously untested Albian play, exceeded pre-drill expectations encountering 36 metres of net gas pay in excellent quality reservoirs, Kosmos Energy gushed in a statement. “Orca-1 extended the Cenomanian play fairway by confirming 11 metres of net gas pay in a down-structure position relative to the original Marsouin-1 discovery well, which was drilled on the crest of the anticline”.
The well location, approximately 7.5 kilometres from the crest of the anticline, proved both the structural and stratigraphic trap of the Orca prospect, which was estimated as having a mean gas initially in place (GIIP) of 13Trillion cubic feet (Tcf) of gas.
In total, we believe that Orca-1 and Marsouin-1 have de-risked up to 50Tcf of GIIP from the Cenomanian and Albian plays in the Bir Allah area, more than sufficient resource to support a world-scale LNG project. In addition, a deeper, untested Aptian play has also been identified within the area and surrounding structures”, Kosmos remarks.
The BP-Kosmos Energy consortium, in partnership with the state hydrocarbon companies of Senegal and Mauritania, took final investment decision for a 2.5Million tonnes per annum of LNG in December 2018. Commercial production for that project is scheduled for 2022.
This new discovery, from all reports, offers the opportunity for another LNG project.
“The Orca-1 result demonstrates highly calibrated AVO, which together with our exploration track record provides further confidence in our ability to predict the presence of high-quality gas charged Cenomanian and Albian reservoirs within the 400-kilometre long inboard Mauritania/Senegal gas basin2, Kosmos explains.
The synfuels giant Sasol, has funded South Africa’s first locally-owned chemical maritime vessel through the Sasol Siyakha Trust, an instrument it uses to empower the country’s black owned enterprises.
The company, one of the top three on the Johannesburg Stock Exchange, funded Nduna Maritime with $27Million as an enterprise and supplier development (ESD) vehicle. This is Sasol Siyakha’s single largest funding agreement to date.
The specialised chemical tanker, named Bow Cecil, is the very first Republic of South Africa flagged vessel that will transport chemicals to international markets registered to carry the South African flag.
The 37 000 dwt vessel, equipped with 47 tanks, was acquired from Odfjell Chemical Tankers AS. The vessel called on the Port of Durban on 01 August 2019 for its inaugural load.
The tanker was built in 1998 by STX Norway Floro and was formerly known as 5W Cecil. Until Nduna Maritime bought it, it was sailing under the flag of Norway.
“We are particularly proud of this landmark agreement, as it is a significant investment into localising and diversifying our supply chain. As a global producer of a number of chemical products, we supply numerous markets around the world with products made in South Africa. Through Nduna Maritime, we are extending our value chain participation through a wholly owned South African business,” said Vuyo Kahla, Executive Vice President: Advisory, Assurance and Supply Chain, Sasol Limited.
Sasol spends approximately $125Million a year on shipping from South Africa to global markets. As the owner of Bow Cecil, Nduna Maritime will leverage this asset to increase its capacity to ship more chemical products to markets concentrated in Asia.
Martin Greenslade has been appointed a non-executive Director of Tullow Oil, the Africa focused, London headquartered explorer.
Mr. Greenslade, an accountant, is Chief Executive Officer of CFO of Land Securities Group plc, (Landsec), a large listed property development & investment company with more than $18Billion of assets, focused on evolving consumer, work, retail, leisure & tech trends. He has also been appointed as a member of the Audit Committee and will stand for election to the Board at the 2020 Annual General Meeting (AGM).
Greensdale who will be appointed Chair of the Audit Committee, effectively replaces, Steve Lucas, non-executive Director, who is expected to step down from the Board following the conclusion of the Group’s 2020 AGM, following eight years with Tullow.
“Martin brings extensive financial experience to Tullow from his current position as Chief Financial Officer and member of the Board of Land Securities Group plc which he has held since 2005”, says Dorothy Thompson, Chair of Tullow Oil plc..
Chevron Nigeria Limited, operator of the NNPC-Chevron Nigeria Limited Joint Venture (NNPC/CNL JV), has signed a gas sale and aggregation agreement with Olorunsogo Generation Company Limited, Niger Delta Power Holding Company Limited and Gas Aggregation Company Nigeria Limited.
It is the second time the American major would be signing a Gas Sales Agreement with a company that would use the gas in the Nigerian economy.
Last March, Chevron, which operates the NNPC/Chevron Joint Venture, signed a 75MMscf/d Sales Agreement with Dangote Fertiliser. The new agreement with NDPHC, will enable the company to supply on an interruptible basis, a daily contract quantity of up to 63Million standard cubic feet a day (63MMscf/d) of natural gas to Olorunsogo Generation Company Limited.
The Olorunsogo generation plant in Ogun State is an existing NDPHC electricity generation project designed to supply power of about 750MW into the national grid. “Natural gas is the feedstock of the Olorunsogo generation plant. The GSAA for the supply of the major input needed to run the power generation plant is another demonstration of the NNPC/CNL JV’s commitment to the domestic gas market,” explains Esimaje Brikinn, Chevron Nigeria’s General Manager, Policy Government and Public Affairs.
Sanjay Narasimhalu, Director, Chevron Nigeria’s Downstream Gas claims that NNPC/CNL JV was currently the largest and most on-spec supplier of gas to the domestic market. “The JV continues to collaborate extensively with other stakeholders in finding creative solutions to issues relating to the domestic gas market”, he says.