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Newcross Is Excited About Awoba NW-2 Discovery

By John Ashuks, in Port Harcourt

The Newcross Group, a Nigerian firm of E&P independents, is excited about the results of Awoba NW-2, reporting over 400 feet of pay more than encountered in Awoba NW-1, the discovery well drilled by Shell in 2001.

This is the first well the company would drill as operator of Oil Mining Lease (OML) 24, which it purchased from Shell, TOTAL and ENI in 2015.

Awoba NW-2, drilled with the Chinese rig Sheng Li-4, successfully appraised multiple reservoir complexes, “through a focused, highly deviated well trajectory that targeted spatially diverse pools because of complex geology”, the company reports.

The well discovered four new hydrocarbon accumulations.  Total footage was 450feet Net Oil Sands and 520 feet Net Gas Sands (True Vertical Depth).

The NNPC/Newcross Joint Venture currently averages about 30,000BOPD in OML 24.

 


Woodmac Lines Up, Again, Behind the PDP Candidate

Four years ago Wood McKenzie, the global firm of oil industry analysts, “predicted” that a victory by Goodluck Jonathan, then Nigerian president and candidate of the Peoples Democratic Party, “would be the least disruptive for the oil sector”.

As another Nigerian Presidential election looms, the British firm has circulated a briefing in which it weighs the chances of the two top candidates, in the country’s sixth general elections in 20 years.

This time, Woodmac isn’t discussing the election outcome in terms of the oil industry, even though that is where its primary subscribers are in Nigeria.

Rather, it talks politics all the way.

“Incumbent presidents in Nigeria had an unblemished election record until Buhari’s triumph in 2015”, the company writes in the briefing. “Another win for the challenger cannot be ruled out, especially since Buhari’s presidency has been lacklustre and dogged by ill-health”.

Woodmac describes Atiku as Buhari’s “more dynamic and liberal opponent”, and goes to argue that the PDP candidate is “focused on the economy and jobs”, issues which “will resonate with Nigeria’s younger generation”. It then asks: “Will they turn out in sufficient numbers”? The briefing contends that Buhari’s trump card is his reputation for incorruptibility and tighter fiscal oversight and “he can be sure of support from his northern heartlands and from conservatives, but he may lose votes in the central states where Abubakar is from; while the south will remain a PDP stronghold”.

ONE SIGNIFICANT PART OF THE BRIEFING IS where Woodmac says that its sister company Verisk Maplecroft “predicts that Buhari has only a 45% chance of success, so the election result could be very close. Indeed, if the result is not clear cut, tension and uncertainty is likely. Civil unrest is a risk, particularly if the fairness of the election is disputed. This would be uncharted territory”.

Unlike this year’s, Woodmac’s 2015 briefing focused so directly on the oil industry and it turned out to be close to prescient. “A victory by the opposition APC would be the most uncertain scenario for the oil sector, both from a security and legislative perspective,” it said. “An APC victory would also finally kill off the PIB, and could well herald major changes to how oil revenue is managed “.

The security and legislative “predictions” came to pass.

 


Tullow in a Drawn out Farm Down in Uganda

Prospect Mojido, in Nairobi

Tullow and its partners in Uganda, TOTAL and CNOOC Ltd, are still working with the Government of Uganda to finalise the farm-down which the British operator initiated in late 2016.

It has thus been over two years since Tullow has been trying to divest ~22% of the total equity of the three acreages currently under development in the country.

TOTAL first announced the divestment in the first week of January 2017, in a release in which the French major declared it was prepared “to pay  $900Million for 21.57%” of Uganda’s Albert basin development project. This was to leave Tullow with 11.73%.

Two months later, the Chinese behemoth, CNOOC stepped in to claim its right of first refusal.

In the event, the Chinese and the French agreed to share the 21.57% that Tullow was divesting.

The sticky point has been the Ugandan government.

With Kampala, nothing gets done in a hurry.

“It is now expected to complete in the first half of 2019,” Tullow says in its latest operational update.

Don’t bet on it.

The last time Tullow divested some of its shares (66% then) in Uganda’s acreages, it ended up in a significant court case, over withholding tax to the Government.

“It’s best to be patient with Uganda, to be sure you’re doing what the government wants”, says John Imohimin, an Africa upstream analyst based in Cairo. “You can’t be too slow”.

 


Nigeria Postpones Submission Deadline for Gas Flare Bid

By Akpelu Paul Kelechi, in Abuja

The Nigerian Government has extended the submission date for the first step of the licencing round for uptake of flare gas sites in the country.

The submission deadline for Registration and Submission of Statement of Qualification (SOQ) for the Request for Qualification (RfQ), for the Nigerian Gas Flare Commercialization Programme (NGFCP), was Sunday, January 20, 2019.

That milestone has been extended to Thursday, February 28, 2019, according to Justice O. Derefaka, who is the Programme Manager of the programme (NGFCP).

He added that he would provide further details, (notably about how that shift affects the other milestones).

The other milestones of the NGFCP include the Shortlist of Qualified Applicants, which was to end by March 31, 2019; Issue of Request for Proposal (RFP), which was limited to first quarter of 2019; Submission of Proposals and Selection of Preferred Bidders, both of which were not expected to last beyond the end of September 30, 2019.

Would be bidders have been hoping for postponement of the submission deadline, largely because the first announcement of the licencing round came in during the last six weeks of 2018.

The Nigerian Gas Flare Commercialization Programme is the first auction targeted at  licencing of subsurface hydrocarbon property in 11. Years. It is not a conventional licencing round. It is for uptake of natural gas that is currently being flared in hundreds of sites in the country’s Niger Delta basin.

The government expects licence winners to take over the flare sites, monetize the molecules and boost the micro and macro economy in the process.

“The auction presents a significant opportunity for domestic and international developers alike to participate in the largest market driven flare gas monetization program undertaken on this scale globally”, Mr.Derefaka had declared in earlier statements.

“Bidders will have flexibility of choosing which flare site(s) to bid for, determine the gas price, and their end – use market or gas product, as well as the technology to be deployed. Interested parties will need to demonstrate project development experience and proposed proven technology which we expect to be in commercial application. Additionally, parties will need to demonstrate technical and commercial capacity. Successful bidders will be granted title to the flare gas through a gas sales/supply agreement with the Federal Government of Nigeria.

An interested party (applicant) is not required to be a Nigerian entity in order to submit its SOQ. Following a successful bid, each Preferred Bidder will be required to act through or establish a Nigerian corporate entity, which will enter into the necessary Commercial Agreements.

Applicants may come from a variety of backgrounds including but not limited to:

  • Communities
  • Technology providers
  • project developers
  • resource and energy companies
  • industrial companies
  • infrastructure companies
  • financial investors/lenders

It is important to note that ONLY registered parties on the Programme web portal can participate in the NGFCP bidding process.

See the link below for Registration/Expression of Interest (EoI) on the NGFCP web portal:

NGFCP Registration/Expression of Interest (EoI)

It is also important to note that the interface by those interested in the Programme with the NGFCP will be through the portal ONLY, Derfaka says.

“ALL registered parties are notified to download the Request for Qualifications (RfQ), to submit their statements of qualification (SOQs) for participation on the programme as well as download the Programme Information Memorandum (PIM) from our website. Parties will only have access to relevant programme documents from the NGFCP Portal using its Log on details.
For any inquiries, please refer to the Frequently Asked Questions (FAQs) section on the NGFCP portal or kindly send an e-mail to us via: info@ngfcp.gov.ng”, declares the statement from the Nigerian Ministry of Petroleum, which is also coordinated by the contry’s industry regulator: the Department of Petroleum Resources (DPR).

 


‘We Are a Faith Based Company’-Platform Petroleum’s Bosses

For the second consecutive time, Dumo Lulu-Briggs turned his speech into a form of Christian sermon.

He did it in December 2017. He repeated it in December 2018.

The chairman of the board of directors of Platform Petroleum, a Nigerian independent, preached about the goodness of the Lord at the Company’s end of year party, held in a swank venue on the edge of the Atlantic Ocean on Victoria Island, the hub of Nigerian commerce.

Choosing two examples of creation of masterpieces of the arts, he explained that evil and good derive from the same sources. Two images of the same person were used to create the Jesus and the Judas in Leonardo da Vinci’s The Last Supper, Mr. Lulu-Briggs told his attentive audience, most of whom were staff, contractors, and employees of affiliates of the company. Likewise, he pointed out, the critically acclaimed praise song: Amazing Grace, was created by the captain of a slave ship, while transporting hordes of the human cargo.

Asked why Mr Lulu-Briggs, a second generation upstream oil and gas entrepreneur, was always delving into Christianity in what was meant to be the Chairman’s address, Austin Avuru, who is deputy chairman of the company’s board of directors, replies: “We are a faith based company”. He explains that Platform Petroleum started production of hydrocarbons from a geologically challenged marginal field, Egbaoma, close to 12 years ago and was currently averaging 3,500 barrels of oil per day (BOPD). “We’ve built a midstream company operating a profitable pipeline out of this resource; we have commissioned a gas plant even if there are issues, our CSR is robust, and we have paid dividends timeously. We have always wondered how we’ve weathered the storms and the point is: if it’s not God, what is?”

The end of year party was itself prefaced by a Thanksgiving Service at a Catholic Church.

In his address, Osa Owieadolor, a career Petroleum Engineer who is Managing Director of the company, spoke enthusiastically of the Mid-Weekly Prayer Session, held at the headquarters every Wednesday.

A high point of the parley was the enthusiastic response of the audience to saxophone performance by BJ Sax, a widely travelled, award winning musician, who belts out popular Christian Pentecostal praise songs on his alto saxophone. Everyone danced, of course.

 


Aker Finalises Pecan Field Appraisal, Offshore Ghana

Aker Energy is finalising a successful drilling operation of the Pecan-4A appraisal well offshore Ghana.

The well was drilled at the Pecan field in the DWT/CTP block, to a vertical depth of 4,870 meters in 2,667 meters of water. The DWT/CTP block offshore Ghana contains seven discoveries, of which Pecan is the main discovery to date.

The main purpose of Pecan-4A appraisal well was to confirm Aker Energy’s understanding of the geology in the area and to identify deep oil water contact in the Pecan reservoir. This was successfully proven.

“We are pleased to announce the well results, confirming our understanding of the area, as well as the resource base and upside potential in the DWT/CTP block. Based on these results, we will optimise the Plan of Development for the Pecan field. There is still a lot of work to be done, including to conclude the phasing of the development, the size of first phase and detailing of the concept. Our most important priority going forward is to deliver a robust field development plan to the Ghanaian authorities,” says Jan Arve  Haugan, Chief Executive Officer at Aker Energy.

Based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan-4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent (MMBOE). Aker Energy estimates that with the next two appraisal wells to be drilled, the total volumes to be included in a Plan of Development (POD) have the potential to increase to between 600 – 1,000MMBOE. In addition, there are identified multiple well targets to be drilled as part of a greater area development after submission of the POD.

“Aker Energy sees great potential in this promising area offshore Ghana. We see the foundation for a phased development producing through several production units. Since we became the operator less than a year ago, we have established an open, inclusive and transparent collaboration with Ghanaian authorities. This partnership will enable us to unlock the vast potential in the area to the benefit of both the Ghanaian society and our license partners. We are looking forward to continuing and further strengthening this partnership to develop the Ghanaian oil and gas industries,” concludes Haugan.

Aker Energy is the operator of the DWT/CTP block with a 50% participating interest. Aker Energy’s partners are LUKOIL (38%), the Ghana National Petroleum Corporation (GNPC) (10%) and Fueltrade (2%).

 


Norway Banks on Taofik Adegbite’s Business Savvy

“We’d set up a consulate service in Lagos”-Ambassador

“If I need to be introduced to a Norwegian businessman, I go to Taofik”.

So says Jens-Petter Kjemprud, the Ambassador of Norway to Nigeria, speaking at a reception organised around the investiture of Taofik Adegbite as Honorary Consul of Norway in Nigeria.

He said it in a way that provoked laughter around the room. But the comment was more of a high praise than a joke, coming from someone who was awarded the Ambassador of the Year prize for 2017 by the Confederation of Norwegian Enterprise (NHO). Translation: Jens-Petter Kjemprud was regarded the most business-friendly Norwegian envoy anywhere in the world.

“We decided on Taofik Adegbite, (among a few very good candidates), as a prominent Nigerian businessman because of  him doing his trade in sectors important for Nigeria and Norway namely oil and gas industry, his broad network of business partners in Norway, his innovative skills, his prominence in promoting local content and his personality and determination”, declared the envoy.

Adegbite is Chief Executive of Marine Platforms, an oil service company which owns two large Multi-Purpose Support Vessels, used for work in deep water oil fields, located off Nigeria.

Kjemprud is something of an African expert. He has served as his country’s representative on the continent since 2006; as Ambassador or special envoy in four African countries (Ethiopia, Sudan, South Sudan and Nigeria), a 13 year stretch punctuated by just two years as Ambassador to Iran. In his 30 months in Nigeria he has witnessed Adegbite, running “a well-established company which could serve Norwegian interests in Nigeria well”.

The primary connection between Marine Platforms and Norway was through construction of the $130Million African Inspiration, the newer and bigger of the company’s two vessels. Commissioned in February 2015, African Inspiration was built in Havyard Shipyard, located in the maritime cluster in the north west of Norway. The vessel deploys Remote Operated Vehicles (ROVs) and associated equipment to water depths that divers can’t reach. The ROVs perform tasks on equipment and structures on the seabed and return to the vessel.

But the relationship between the Nigerian company and the Norwegian business sector goes farther back. Marine Platforms started dealing with Norwegian companies when it chartered its first vessel: African Vision, in 2008. Business dealings with Norway, however spiked with the African Inspiration project, which brought in the Guarantee Institute of Export Credits (GIEC), the Norwegian export credit agency, to guarantee the debt incurred in the construction of the vessel.

Post the vessel’s commissioning, Marine Platforms has, in the last three years, done over $500Million worth of business with both Norwegian companies and Nigerian firms with which it has served as links to Norwegian companies, according to Adegbite.

“Since we have had an Embassy here since 1962 my predecessors have not seen the need for an honorary consul”, Kjemprud says. “On my arrival, being based in Abuja, I decided that we needed a more solid, visible and permanent presence in Lagos since most of the approximately 70 Norwegian companies operating in Nigeria are based there, and thus started the process of identifying candidates. Usually we have Norwegians as honorary consuls but we decided to go for Taofik. We would also like to have an honorary consul in Port Harcourt but Nigerian policy does not allow more than one.

“The Honorary Consul mandate is to serve Norwegian residents and interests generally, but we also see the opportunity in him promoting bilateral relations and trade in cooperation with the Embassy. The consulate will be in charge of consular services apart from visa applications which is handled by VFS”

 

 


Eroton Successfully Refinances Its RBL Debt with GTB

The Nigerian independent Eroton Exploration and Production Company Limited has successfully refinanced the facility it took from Guarantee Trust Bank to purchase the 45% of Oil Mining Lease (OML) 18 in the eastern Niger Delta.

Eroton produces around 40,000BOPD from that asset, which it took over as operator in September 2015. The state hydrocarbon company NNPC is 55% Joint Venture partner.

With a final repayment of $398Million, the RBL has been repaid in full and replaced by a new reserves based lending facility with Guarantee Trust Bank (the “GT Bank RBL”) for the same principal amount, with the following notable advantages to the operator of OML 18.

  • The original RBL had a repayment date in mid-2021, while the GT Bank RBL has a late-2025 repayment date, consequently reducing quarterly repayments and freeing cashflow (in excess of $80Million per year until mid-2021) for further drilling and development.
  • The debt service reserve account (DSRA) requirement under the GT Bank RBL is reduced to two future quarterly repayments which combined with the lower quarterly repayment amounts means that only approximately $50Million is required in the DSRA compared with more than $100 million previously.

The refinanced interest rate is marginally higher at approximately 11% (versus 10% previously).

 


AFC Closes Financing Deal For West Africa’s Top Crude Oil Refinery

Africa Finance Corporation announces it has successfully closed a €577Million debt financing  for Société Ivoirienne de Raffinage (SIR) of Côte d’Ivoire. AFC’s participation was for €192Million.

The corporation was Sole Mandated Lead Arranger for the transaction.

“SIR has an installed capacity of 3.8 Million tonnes per annum of refining capacity and is currently the largest and most sophisticated operational refinery in West Africa”, THE AFC says in a release.

The purpose of the Facility is to repay historical obligations on crude supply, provide a long tenured facility and reduce the interest rate of SIR’s stock of debt. The Facility comprises a Euro tranche with a 9-year maturity and a West African CFA franc tranche with a 7-year maturity. The long-term funding solution to refinance historical accrued debts will free up resources to enable SIR to make much needed investments in its current operations and upgrade its facility and production processes to align with current environmental emissions standards and expand its business, thereby contributing to job creation.

Participating banks include AFC, Deutsche Bank, ICBC Standard Bank, United Bank for Africa, NSIA Bank and Bridge Bank. Counsel for the Lenders was Norton Rose Fulbright and Bilé-Aka, Brizoua-Bi & Associés.

 


PENSPEN Wins Contract To Execute FEED For Nigeria-Morocco Pipeline

By Fred Akanni, in Djibouti

Penspen has announced that it has been awarded a contract by The Office National des Hydrocarbures et des Mines (ONHYM) and the Nigerian National Petroleum Corporation (NNPC) to execute the First Phase of the FEED (FEED Phase I) of approximately 5,700 km gas pipeline proposed to run from Nigeria to Morocco.

The award is a follow-up on the feasibility study completed by Penspen in July 2018., the company says.

The London headquartered firm claims it is a leading global provider of engineering and project management services to the energy industry, but it doesn’t have a single office in the entire African continent.

Its announcement comes at a time when there’s still a lot of conversation around the value of the project and questions around why the Nigeria-Algeria pipeline idea was scuppered.

Penspen says that the FEED Phase I consists of a detailed review of the feasibility study results and in-depth evaluation of the gas demand and supply study. Further design of the pipeline system, in addition to the execution of an Environmental and Social Impact Assessment (ESIA), will then be carried out with the aim of optimising the proposed pipeline route and project economics.

“Penspen will also support the client in marketing and promoting the pipeline project to potential stakeholders showcasing the wider benefits of its development”, the company says..

“At the end of the study, key detailed outcomes will help the client prepare for the second phase of the FEED (FEED Phase II) which is expected to lead to a Final Investment Decision (FID).

“Penspen will be utilising the skills and capabilities of Dar Al-Handasah, Crestech and Control Risk to conduct a number of special studies required for the FEED services, environmental impact assessment, Nigeria gas supply study and risk study respectively”.

 

 

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