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Okpere To Take Hold of Trinidad From Early 2019

By Jalatu Madiebo, in Warri

The Nigerian geologist, Eugene Okpere, currently Shell’s Vice President Exploration for South America and Africa, is proceeding to a new job assignment in Trinidad and Tobago from January 2019.

Okpere is currently based in the Upstream Division in The Hague, Netherlands.

He will be taking charge as the Managing Director for Shell Trinidad and Tobago, in Shell Energy House, St Clair, Trinidad, in mid-January.

Prior to his promotion to his current job, Okpere was Shell’s Vice President Commercial &Business Development for Sub-Saharan Africa.

The 1990 Bachelor of Science graduate in Geology from Nigeria’s University of Benin, has had an intriguing career in Shell, since he joined the Anglo Dutch major as Seismic Interpreter/Operations Geologist in 1992.

He actually left Shell for Sasol in July 2009, spending close to four years in the upstream division of South Africa’s largest petroleum/petrochemicals company. He literally walked back to pick up where he left off in Shell in 2013.

The move to Trinidad and Tobago is a leap in Okpere’s career fortunes. Shell has been in that country for over a hundred years and at a point was the largest private sector employer. Its footprint was reduced when the state nationalised the oil industry in 1974.

Things began to change in the last five years. First, in 2014, Shell acquired the Spanish player Repsol’s 20% – 25% non-operated interest in Atlantic LNG. With the completion of the combination of BG Group and Royal Dutch Shell in February 2016, Shell assumed a major Upstream position where gas is supplied to both the petrochemical and LNG sectors and a majority interest in Atlantic LNG across the four train facility.

Shell is now present in seven offshore and onshore blocks (both operated and non-operated) as well as pipelines and a larger presence (around 50%) in Atlantic LNG, which was built in 1995 and was, at a time the world’s largest liquefaction facility; today it is the sixth largest LNG exporter in the world.

 

 


Panoro Looks to Spud Tunisian Well in Mid 2019

Panoro Energy has announced a Heads of Terms agreement with Compagnie Tunisienne de Forage (CTF), the Tunisian state-owned drilling contractor, for the use of the CTF-4, a 2,000-horsepower onshore rig, or equivalent drilling rig, for the drilling of the Salloum West-1 well (SAMW-1) located in the Sfax Offshore Exploration Permit (SOEP). The spud date of the SAMW-1 well is anticipated to be in the first half of 2019 and is subject to the entry into a second renewal period of the SOEP for a period of 3 years, and the subsequent approval of the final drilling program and budget by ETAP. Advanced discussions for the renewal are ongoing with the Tunisian Authorities.

The announcement to spud the SAMW-1 well, to be directionally drilled from the shore as a deviated well, comes only 3 months after the closing of the acquisition of DNO Tunisia AS.

The primary objective of the SAMW-1 well is the Bireno formation, at approximately 3,200 metres vertical depth, where the Company has identified, based on 2D and 3D seismic data, what it believes to be an extension of the Salloum structure to the west. The SAMW-1 well will target an independent fault compartment up-dip from the Salloum-1 well which was drilled by British Gas in 1992 and tested the Bireno formation at a rate of 1,846 bopd.

The objective of the SAMW-1 well is to prove up additional resources in the vicinity of the Salloum-1 well and subsequently fast-track the development of Salloum through a tie-in to existing adjacent oil infrastructure.

The decision to drill this new well is supported by rig availability, cost-savings due to drilling equipment for the well already being owned and stored in Panoro’s Sfax warehouse, existing 2D and 3D seismic covering the SAMW-1 location, close proximity to the Salloum-1 discovery well, the existing adjacent oil infrastructure, and a high chance of success.

The expenditure on SAMW-1 well will be funded from Panoro’s existing financial resources. The well costs will also be an added to the existing substantial cost pool of SOEP which will be fully recoverable against future revenues through crude oil sales.


Vitol & Co Finally Buy Out Petrobras From Nigeria

By Fred Akanni, in Lagos
A consortium led by Vitol and comprising Africa Oil Corp. (25%), Delonex Energy Ltd. (25%) and Vitol Investment Partnership II Ltd. (50%), has entered into a Share Purchase Agreement (SPA) to acquire a 50% ownership interest in Petrobras Oil and Gas B.V. for $1.407Billion.  BTG Pactual E&P B.V. will continue to own the remaining 50% of POGBV. The transaction is subject to customary conditions precedent.
The sale is coming almost exactly a full year since November 9, 2017, when Petrobras announced on its website: “We are at the teaser stage for the opportunity regarding the process of divesting 100 percent of our interest in Petrobras Oil & Gas B.V. We are leading the sales process”.
The primary assets of POGBV are an indirect 8% interest in Oil Mining Lease (OML) 127, which contains the producing Agbami Field, operated by affiliates of Chevron Corporation, and an indirect 16% interest in OML 130, operated by affiliates of TOTAL S.A., which contains the producing Akpo Field and the Egina Field, which is expected to commence production by the end of 2018. Current production of 368,000 barrels per day is anticipated to increase to over 568,000 barrels per day by the second half of 2019.
POGBV has a strong non-operated portfolio, managed by Chevron and Total and which represents circa 20% of Nigerian production. Vitol looks forward to continuing to grow and invest in Nigeria.”

The agreed base purchase price of $1.407Billion, is on a cash and debt free basis as of the effective date of 1st January 2018 (the “Effective Date”). A deferred payment of up to $123 million may be due to the Seller depending on the date and ultimate OML 127 tract participation in the Agbami Field, which is subject to a redetermination process (see below). The Consortium’s funding required to ultimately close the transaction will be reduced by any leakage paid to the Seller by POGBV, including dividends, and increased by any contributions made to POGBV by the Seller during the period between the Effective Date and completion. POGBV has an existing reserve-based lending facility, with a syndicate of international banks and commitments of $1.245 billion, which POGBV and the Consortium believe may be increased. Given the anticipated time required to complete the transaction, POGBV’s debt capacity, forecast post effective date cash flow and the structure of the transaction, Africa Oil expects to fund its share of the acquisition with cash on hand.

The three fields in these two licenses are all giant fields, located over 100 km offshore Nigeria, and are some of the largest and highest quality in Africa. Two of these fields, Agbami and Akpo, have been on production since 2008 and 2009, respectively, and in 2017 averaged a combined gross production rate of approximately 368,000 barrels of oil per day. Lifting costs in 2017 were well below $10/bbl. The TOTAL-operated Egina development project in OML 130 is the largest investment project currently ongoing in the oil and gas sector in Nigeria. The Egina FPSO, with a 200,000 barrel of oil per day capacity is currently on station and is being hooked up to existing wells. Egina first oil is expected before the end of 2018 and quickly ramp up to plateau production of approximately 200,000 barrels of oil per day during the first half of 2019. The fields all have high quality reservoirs and produce light sweet crude oil with state of the art Floating Production, Storage and Offloading (“FPSO”) facilities.

During 2017, daily oil production from the Agbami Field averaged approximately 240,000 barrels of crude oil. Production commenced from the field in 2008 and has been on plateau for over 8 years. An infill drilling programme is ongoing, aimed at extending plateau into 2020. The field spans OML 127 and OML 128 and is subject to a unitization agreement, with 62.5% of field production currently allocated to OML 127. A redetermination process has been subject to expert review and arbitration in order to finally determine an increase in the portion of the Agbami Field attributable to OML 127. During 2017, POGBV’s entitlement of daily oil production averaged approximately 21,000 barrels of crude oil (based on a 62.5% tract participation).

During 2017, daily oil production from the Akpo Field averaged approximately 128,000 barrels of crude oil. Production commenced from the field in 2009. During 2017, POGBV’s entitlement of daily oil production averaged approximately 26,000 barrels of crude oil.
In addition to the current fields under production and development there are other growth opportunities in horizons not yet under developed in existing fields and adjacent fields being considered for development together with exploration opportunities, the consortium say in a statement.


Namibia Records A Second Duster in Weeks

Chariot Oil and Gas , a London listed minnow, announced the deployment of the Ocean Rig Poseidon to spud the Prospect S well in the Central Blocks licence offshore Namibia, less than a week after Tullow Oil  went to town with the results of Cormorant-1 as a dry hole.

12 days later, the probe was announced a duster.
The well had been safely drilled to a total measured depth (MD) of 4,165 m to test the stacked targets in Prospect S. It penetrated the anticipated turbidite reservoir sands, in line with the pre-drill prognosis, however the reservoirs were water-bearing. “The data collected will be used to calibrate the existing data sets to understand the implications of the well results on the prospectivity of the surrounding area.”
The operator was in the process of plugging and abandoning the well as we went to press in early October 2018.

The structure on which the Prospect S was drilled is one of five dip-closed structural traps, totalling 1,758MMBbls gross mean prospective resources, which have been identified in the Upper Cretaceous turbidite clastic play fairway. The company had talked of a probability of geologic success of 29%, citing a Competent Persons Report by Netherland Sewell Associated Inc.

“A further two higher risk-reward, stratigraphic traps, totalling 885MMBbls gross mean prospective resources”,  was to have been de-risked through the calibration of the 6,100km2 of proprietary 3D seismic data on the Central Blocks with the result of the Prospect S well. All that did not happen.

Chariot operates the Central Blocks with 65%. Partners include Azinam 20%, NAMCOR 10% and Ignitus 5%.

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If the NNPC Had Implemented the Refinery Revamp The Way I Planned

By Ibe Kachikwu

Nigeria’s Minister of State for Petroleum Resources

I wasn’t sure I could make this event, I had three different events for the day, one in Russia, another in Equatorial Guinea and one here. Eventually I had to call my colleague in Russia to say it’s so important that I should be here because of the significance of this event and so I won’t be able to make it to Russia. Then I negotiated hard with Razak (Abdulrazaq Isa, Chief Executive Waltersmith), to say how do I get here and still make it to Equatorial Guinea where I need to function as the president of African Petroleum Producers Association. The effect of that is I’m going to make this speech very quick and catch the next flight to Malabo so that I can return back to Nigeria before the end of day.

The king of the place Eze Ekweme Ekweme is really the major owner of the protocols here and once I recognise him, I can then stand beside other existing protocols. I’m particularly glad to see here today, the likes of the Shell MD and Nigerian Content Development Monitoring Board (NCDMB) Executive Secretary. I’ll tell you why I’m particularly glad for their presence. My good friend Osten Olorunshola and of course the Eze himself.

For Shell, it is simply an attention to the fact that the time has come to process without just carrying crude out, and ultimately the policies of this country will begin to compel that if we can’t persuade that. Because some of the things I’ve struggled with as I’ve pushed very aggressively, the whole concept of refinery, re-injection and re-activation and the modular refinery is how do you find the crude? The crude is owned by those who produce it and so once they take theirs away, we’re left with nothing to process. But in the next couple of months, those will begin to change. We’ll have to begin to enforce the 20% crude processing requirement in this country, graduating all the way to 50% over the next 5 years. Really we have no option otherwise we’re going to just stay in an abyss of not processing while people are taking away raw materials. The time for that is gone. I’m hoping Okunbor’s presence here not just as Shell MD but also head of (the Oil Producers Group) OPTS is to begin to have that dialogue that is essential. Because I find out I can achieve more when I can dialogue rather than when I can compel. I only compel when I can’t dialogue and I’d like to see that move very rapidly.

For NCDMB, I’m happy that they’re here largely because as Chairman of NCDMB, when we put together this whole process of putting money in Bank of Industry, most of that was articulated by Simbi and I’m not sure we actually knew where the 200Million dollars was going to go, we just knew that we had a momentum to help the local industry. But since then, he and his team have done a fantastic work in articulating where these monies should go and how it should be deployed. I’m currently in the middle of trying to settle a battle between him and the Bank of Industry (BOI) because in his typical manner, he said he has given 6 months and he hasn’t seen where the money where it should be so I need to take my money. We’ll be having a meeting over the next few days in trying to resolve that. But that’s the spirit, there’s a reason why things are done. I’m happy that he’s here and more than Razak, he’s put a lot of pressure on me to make sure that whatever I’m doing, I should be present here today. Osten Olorunshola, largely to the fact that he’s done a huge amount on the Petroleum Industry Bill PIB and I tell him not to be disillusioned.

The president’s position is not that PIB will never see the light of day, that’s not his position. His position is that there are concerns that he has and we need to make him comfortable, he’s the man who’s going to sign. Nobody should sign what he’s not comfortable with. I urge him to put on that garb of perseverance that he has and continue to work with us and let’s see how we can get the big man to the point of comfort because this is something that needs to happen for the country. NNPC, your huge presence today is incredible! It’s very nice for me, because you’re part-owners of most of the crude. If I’m going to drive this policy, I need to get you on my side. So hearing the lovely words that the COO GAS has said just gives us a lot of happiness. Accompanying him is the COO SERVICES who’s also here. I’m very glad that you’re all here today. Let me spend a few minutes on what the refining roadmap is for this country. First is that we’re very much committed to repairing what we call the existing Big Four which are the four refineries we have located in Port-Harcourt, Kaduna and Warri.

If everybody had ran at the speed that I wanted to run, we should have that up and running quite frankly all done and functioning by 2019. Not for election purposes, but for the fact that it will be such a sad day for this country if at the end of 2019, we’re still hopping around the world trying to import product. It costs us a lot of money, it’s a waste of vital foreign exchange that we shouldn’t pay and it deprives our people of god jobs at hand. We need to hurry up that process. The board is working with NNPC to see how fast we can, I’m not sure any of us realized what is required for raising international finance for these things when we started, so it’s taking a bit more time since when we started but believe me, they get polished each time we have a board meeting  because we need to move on this goal and I’m continuous with the move around the world to find Alternative Financing because I did give the president my word that federal government money will not go into this project if we can help and we’re looking for private sector funding.

So that’s the first step in the roadmap, and if we do that, we’ll be able to process at least 500,000 barrels from these four refineries. The second is of course the Modular Challenge. As part of the strategy to pull away militants from crude processing of products, we came up with the concept of absorbing a lot of them, create modular refineries in these contiguous communities, create jobs and get some of the fairly uncouth skill sets that they have and polish them and put them in the system and that is how the whole concept of modular refineries started. Thank God the Vice-President bought into that and worked very hard with us as part of the 14-Point Agenda for reducing militancy in the Niger-Delta. So today we hope that if the 10 Modular Refineries that have at least began to kick-off, have signed basic agreements, some of them have actually commissioned and are working and the very first one to put products in the markets will do so by December/January and if we do that, out of those ten modular refineries, we hope to process between 200,000-300,000 barrels of crude oil into the system.

That of course includes WalterSmith.  The third arm of that is obviously the private sector-led Greenfield refineries. Under that, you have the Dangote bumper 650,000 barrel refinery which he’s doing in Lagos, we have the Niger-Nigeria one which is about 70,000-100,000 barrels, we have the Agip one which is about 150,000 barrels refinery in Bayelsa and we have the one led by a Chinese consortium which we’re finalising now which will also be able to do a c-location refinery. Infact, we have two co-location refineries possibilities. One far gone, one just beginning, each of them about 100,000 barrels.  So again, from this field alone, you have processing in excess of a million barrels of crude in this country. So you can see that these are well thought out policies driven from the mind of specific focus on refining and if we do that, we’ll be able to process between a million and a million and half barrels of crude oil in this country and take over what is basically the processing hub of West Africa and East Africa.

The market is there just for the picking so it would be a shame if we let some of these opportunities go. Realizing that very early in the game therefore, I set up a refining technical team and brought in the COO/SCA Suleiman who’s done more work on this. I get the praises, but he’s the man in the engine room. He’s driven very purposefully the whole dream of how we can get to the refining final hub, both the modular, both the refinery activation. NNPC is doing, both the third-party private-sector driven ones. And his singular purpose is to be able to deliver this as quickly as possible, so this is how we’ve gone about this.

But how do we get crude to those that want to refine, because some of those who want to refine do not have production wells. Some of them are going to depend on third-party injections and that’s one of the things we’re struggling with Dangote right now, how do we get him all the gas and crude he needs. But I believe that the private sector led by the majors are equally committed to the progress and success of this country and as long as the crude itself is adequately priced in a way that it doesn’t injure their interests, they should be able to get adequate amount of crude back in. I’d also be pushing NNPC through NPDC to uplift their game.

Another thing is what incentives must you provide for this group of people who want to refine Nigerian crude? We’ve succeeded in providing Custom duties clearances and waivers as a first call to enable them bring in their equipment at zero duty levels. We’ve created a financing model which NCDMB is driving. Funding is key, what I’m expecting NCDMB to do ultimately is to work with Suleiman as the engine to drive refining not just local refining. What it means is that we’re going to have to find funds, federal government funds, CBN-designated funds to put in the hands of NCDMB in a managed professional way to help those who need to reactivate and build refineries in this country. So that there’s funding available for you to manage, there’s funding for you to expand the scope of what you’re doing currently, which is a bit limited to be able to take much bigger proposals and more committed individuals. And I think that when you do that, the IOCs will be able to come onboard once they can see a funding line, a credible partner, they can see a direction and then we’ll be able to go.

The other incentive or other directive you’ll be able to see coming out, hopefully soon is what I call the “Clutch-free Mechanism”. That Clutch-free means that those who have licences who can’t use the licences will have to let them go. We’re not going to have people just clutching on licences and putting them as signboards in their houses. If you take a license, we’ll give you a timeframe in which you must put up or shut up! There’re people who have held Modular licences for 2,3,5 almost 10 years and have done nothing with it other than just hawking it all over the place. If you can’t use it, there’s no need for me to licence almost 40 Modular licence and you’re talking of only 10 being active, So that Clutch-free Mechanism is something we’re going to begin to explore very seriously with DPR to try and free up the whole of some of these licences.

Being excerpts from the Keynote Address By the Honourable Minister of State For Petroleum, at the Groundbreaking Ceremony of Waltersmith Refinery & Petrochemical Company Limited, Ibigwe, Ohaji Local Government Area, Imo State. The speech was delivered extempore. Transcription was by Foluso Ogunsan.

 


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.

 

© 2018 Festac News Press Ltd..