All posts tagged featured

South Africa’s Planned Gas To Power IPP Bid Round Is On Hold

By Boniswa Umtata, in Cape Town

And the proposed exploration in the Karoo won’t happen for a while

South Africa’s plans to roll out an Independent Power programme(IPP) for gas to power projects will be on hold for the time being.

The country’s Minister of Energy was to inaugurate the bid this year.

But the entire programme is going to be delayed around political succession (with implications for energy policy) and the general need to close the outstanding renewables deals before South Africa moves on to importing gas, according to ranking sources in the Ministry of Energy.

The LNG to Power IPP Programme aimed to identify and select successful bidders and enable them to develop, finance, construct and operate a gas-fired power generation plant at each of two ports, Ngqura and Richards Bay in South Africa.

The successful bidder would also be required to put in place the gas supply chain to fuel the plant with gas from imported LNG.

The LNG to Power IPP Programme will provide the anchor gas demand on which LNG import and regasification facilities can be established at the Ports of Ngqura and Richards Bay. This will provide the basis for LNG import, storage and regasification facilities to be put in place that can be available for use by other parties for LNG import and gas utilisation development.

Therefore, Third Party Access will be a fundamental aspect of the LNG to Power IPP Programme. This will enable the development of gas demand by third parties and the associated economic development.

Full story in Africa Oil+Gas Report Vol 18, No 7, Southern Africa 2017 issue; September 2017 edition. Will be distributed to paying subscribers as well as delegates at the Africa Oil Week in Cape Town in October. It can also be accessed here…

Why the “Digital Oil Company” Mantra Is Overrated

By Toyin Akinosho

There were hardly any computers on anyone’s desk when I arrived at Chevron Corporation as a trainee geologist in mid-1988.

The entire computing power in the company resided in an offsite location, seven kilometres from the main office.

A geoscientist’s desk was typically filled with several paper prints of two and three dimensional (2D and 3D) seismic reflection profiles. The table also hosted a printed base map or two. In a rack next to the seat were rolls of sepia and paper copies of more seismic reflection profiles, a handful of basemaps and several other maps.

Earth scientists painstakingly interpreted the profiles and transferred their “opinions” on the basemaps, usually of 1: 12,500 scale. What came out of the venture was mainly a structural map, a plan view of the top of a reservoir sand or seismic event several kilometres deep in the subsurface, which every interpreter pinned on a wall above his head.

The pinup was proof that he had completed the interpretation of a prospective sand reservoir or seismic “event”. Such a map prefigured the determination of the location of an oil well.

Full story of the earliest computerisation of oil and gas exploration and why the current advances are less a revolution than part of an ongoing evolution, is here..

Gabfest Galore: Nigerian Government to Start an Oil Conference in 2018

The Nigerian ministry of petroleum has concluded plans to add to the teeming market of oil and gas conferences in the country.

It has even picked a date which puts it in competition with one of the newest of such conferences and a venue that indicates a challenge to one of the oldest such shows.

The Nigeria International Petroleum Summit (NIPS), tagged the “First Federal Government of Nigeria’s official oil and gas industry trade show”will be held in Abuja in February 2018.
So there.

This trade show will happen in Abuja in the same month that the West Africa International Petroleum Conference (WAIPEC), has been scheduled to hold in Lagos. NIPS will be inaugurated in the same month as WAIPEC’s second annual outing.

It will take place at the International Conference Centre, the same venue that the Nigerian Oil and Gas Conference (NOG) has held court for most of its 18 years. NOG is also scheduled to run in February 2018!!

The question is: Is a government conference so necessary to crowd out the space for private initiatives?

There is an answer in the press release.

The organisers advertise what seems like targeting the continent: “This event will undoubtedly be the Africa’s largest and most important industry platform and linkage to the world where engineering and technological breakthroughs, bid rounds, bid sign-off, major contract signing and sites conferences would meet other developmental and economic diversification initiatives of the country”.

Indeed, Yemi Osinbajo, the Nigerian Vice President,“unveiled the official launch of Nigeria International Petroleum Summit 2018 in the presence of 19 African Ministers of Petroleum and delegates who attended the African Petroleum Producers Organisation (APPO) meeting in Abuja, Nigeria recently”, notes the release.

But then the same statement, two paragraphs later, pulls back the curtain and limits itself to Nigeria: The NIPS, it says “will be held annually as a platform to highlight Nigeria’s long history of oil and gas production, substantial reserves and status as a leading global player in the sector”.

Which is what NOG does, What WAIPEC did this year, What the various panels of the Society of Petroleum Engineers (SPE) do, and what the annual conference of the Nigerian Association of Petroleum Explorationsists (NAPE) does.

Indeed, there have been concerns that the SPE and NAPE conferences, organised by associations of technical personnel, have been focusing much more on the business and politics of hydrocarbon exploration and extraction, than on the technical programme that is their core remit.

They all want “key Nigerian political decision makers, government officials and industry’s specialists from the National Oil Company(NOC) and other relevant government bodies on the one part and Chief Executive Officers (CEOs) of National and international oil companies, multinationals and multilateral organizations, the academia and other relevant stakeholders et cetera”, as the NIPS statement says.

They all cite Nigeria’s petroleum industry as “the largest in Africa with proven Oil and Gas reserves of 37 billion barrels (bbl) and 192 trillion cubic feet respectively. The sector contributes about 10% to the country’s Gross Domestic Product and accounts for 95% of all exports”, as the NIPS press release notes.

Then again, “given that Nigeria’s Gas reserves have remained largely untapped, the country is expected to make a shift towards becoming a major producer and exporter of Gas which the summit provide with an excellent business environment to interact, cross-pollinate ideas and to make deals happen”.

Ha. What the country needs are subject specific conferences, even in the hydrocarbon sector. That way, you deepen the search for solutions to specific areas and participants not only network, but go away from summits with information they can translate immediately to business success.

ENI Is Ready For Its Debut Moroccan Drilling

By Toyin Akinosho

Italian giant ENI has secured the Saipem 12000, a sixth generation ultra-deepwater drillship, for a drilling programme to include a one-well drilling slot in Rabat Deep Offshore in Morocco. It is currently anticipated that the rig will arrive on location in the latter part of Q1 2018 and that the drilling of the RD-1 well on the JP-1 prospect will commence shortly thereafter.

ENI operates the Rabat Deep Offshore licence with 40%. Its partners include Australian Woodside 25%, Morocco’s state hydrocarbon company ONHYM 25%, and the London listed minnow Chariot 10%).

The JP-1 prospect is a large, four-way dip closed structure of approximately 200 square km areal extent, with Jurassic carbonate primary reservoir objectives which, Chariot claims, has an “independently audited gross mean prospective resource estimate of 768MMbbls”.

ENI purchased its 40% on the asset from Chariot, who it is partnering Chariot in return for a capped carry on the drilling of the JP-1 prospect as well as a carry on other geological and administrative costs relating to Rabat Deep Offshore and a recovery of Chariot’s investment prior to farm-out.

Ogbele Scouts For More Domgas Clients

The Nigerian independent, Niger Delta Exploration and Production (NDEP),is hoping to expand its supply of natural gas from its Ogbele field far beyond the requirements of its two offtakers.

The company’s only domestic gas offtaker is PGINL- Power Gas Industries Nigeria Limited, which compresses the gas and uses it to generate power in offsite industrial locations.

But the “anchor” client for NDEP’s100Million standard cubic feet of gas per day capacity processing plant is the Nigerian Liquefied Natural Gas NLNG Ltd in Bonny, to which its supplies 35MMscf/d.

NDEP has prided itself for five years as the only non NNPC JV partner and the only indigenous company which supplies the NLNG system.

Now the company’s ambition has soared above the satisfaction it derives from being the only indigenous company supplying gas to an export project in a country where there is energy deficit on account of gas supply constraints and where industrialisation can take off on the wings of natural gas production.

“Currently, we are negotiating a few more offtake agreements and as soon as those are completed and they are ready to offtake gas, we are obviously in good stead to deliver gas”, Layi Fatona, the company’s Chief Executive Officer, told me in a recent interview. “I have always said that we have the most Unencumbered-Ready-To-Deliver-Gas among the indigenous companies”.

Fatona says he cannot name the names of companies that NDEP is currently negotiating Gas Purchase agreements with, “because negotiating a gas deal is an extremely tricky thing. But at least currently today, we have a reasonable number of interested parties who are discussing with us aggressively”.

The Full Interview with the CEO of NDEP is in this link.

CBGS’ Party, China’s Celebration

The world’s ‘largest geophysical company’s ets on its 20th Year of Winning in Africa’s E&P

It was a party called by a Nigerian service contractor, which turned out to be largely a celebration of China’s twenty years in African hydrocarbon exploration and production.

The world’s second largest economy first arrived in the African oil industry in the mid- nineties as a contractor. The Bureau of Geophysics (BGP), a subsidiary of China National Petroleum Corporation (CNPC), won a seismic acquisition contract from Shell in 1998.

The Anglo Dutch giant was reluctant, but Nigerian National Petroleum Corporation NNPC, the country’s state hydrocarbon company, insisted on opening up the competition to non-western service companies.

BGP fumbled in its first shoots, but the evidence in hand today suggests that it was all a matter of teething. The company went ahead to win a Shell award after that project, successfully executed more contracts and at some point, started squeezing the older, more established geophysical companies from the Western hemisphere out of the market with its low bid prices.

The gentlemen who addressed the investment forum organised by CBGS- a Nigerian seismic processing company- last Tuesday, looked many times more dapper and flashier than the Chinese men in crumpled suits who showed up on the second floor of Chevron Nigeria headquarters in 1997, proposing to acquire and process seismic data for the American company; one of the many solicitation visits marking BGP’s arrival on the continent.

Indeed, the spokes persons at the forum were Western gentlemen, while the Chinese stayed in the background.Their names are withheld because “BGP doesn’t want press coverage”.

By 2003, BGP had become the largest land acquisition company in the world, the forum heard. “In 2015, we became the world’s largest seismic service provider”, the lead presenter noted, with a follow up remark: “Everyone thinks that CGG is still the biggest seismic service provider, but we are”.

He didn’t exactly provide the financial data, nor the company capitalisation to support the claim, preferring, essentially, to lay out the head count and company infrastructure: BGP has 22,000 employees, 115 land crews, six streamer vessels and 10 shallow water Ocean Bottom Node (OBN) vessels.

BGP Marine, a recently formed arm of the company (founded in 2006), had carried out 120 marine projects. The purpose of the forum, indeed, was to show the company’s capacity for acquiring Ocean Bottom Node seismic, especially for high grading existing oil field production projects in shallow water terrain.

CBGS is the Nigerian Local Partner for BGP Marine. “Our objective is to build local capacity and knowledge in Ocean Bottom Seismic (OBS), technology in Nigeria”, says Bank Anthony Okoroafaor, CBGS Chief Executive.“My first step is this Technology forum and training of about 40 persons on OBS on first phase”.

Lekoil in OPL 310: One Down, One More to Go

LEKOILis expecting the second of the two consents of Nigerian authorities on the Oil Prospecting Lease (OPL) 310.

The current lease expiry date is February 2019. Lekoil has an understanding with Baker Hughes, a GE company, for technical partnership and investment in appraisal of the discovery, possibly leading to first oil. But it can’t proceed without ministerial consent. Optimum, which is the licence holder and Lekoil’s partner, is not a technically resourced company, so a work programme will not happen before expiry date if Lekoil doesn’t get the government’s nod.

But no one seems to be in a hurry at the Department of Petroleum Resources (DPR), the industry regulatory agency, to respond to Lekoil’s challenges.

The consent to complete the transfer of the original 17.14% participating interest that Lekoil acquired on the lease in February 2013 was granted by the Minister of state for Petroleum Resources in June 2017. This means it has taken four years and three months after it acquired the interest in the block to achieve this very important regulatory approval.

What now remains is the authorities’ consent for a second acquisition that the company made on the same block. In November 2015, Lekoil acquired Afren’s remaining 22.86% participating interest in the block. That acquisition remains conditional upon receiving Ministerial Consent.

The key challenge here is that Optimum feels it ought to have been consulted when Lekoil acquired the equity from Afren. Some of the regulatory officials at the DPR, who are in charge of preparing the documents for the Minister of state to sign on, want Optimum to give them a go ahead before doing the required Due Diligence and processing the consent documents. Lekoil, a listed company, argues that the law does not require Optimum’s nod before the Minister can give a consent. Indeed, Optimum is pushing for a renegotiation of terms and Lekoil is pushing back.

“We are trying to working through the process”, once lawyer close to both parties says, “although it’s not always clear what the process is”. This is clearly an issue highlighting how difficult it is to do business in Nigeria.

The delay in regulatory consent for Lekoil on this block stands in the way of the company’s plans for the development of a work programme for the Ogo field (the only discovery on the block) for which it has signed a Memorandum of Understanding with GE Oil & Gas, now Baker Hughes, a GE Company.

Lekoil says it is also in discussions with other potential partners for the financing of the appraisal programme, following which, and subject to the fulfilment of a number of conditions including a positive well result, Baker Hughes, through a consortium SPV, and Lekoil through its funding partners, intend to invest funds towards the full field development capital of the project. Lekoil estimates this cost to be US$400MM for full field oil development and US$600MM for subsequent upstream gas field development.

“When all the issues have been resolved” Lekan Akinyanmi, Lekoil’s Chief Executive Officer told Africa Oil+Gas Report’s Akpelu Paul Kelechi back in April 2017, “we hope to spud before the end of the year”.

In the first week of September 2017, Mr.Akinyanmi’s timeline is not looking very good.

African Petroleum Clutches At a Straw in the Gambia

The West African state believes that the minnow was trying to sell hydrocarbon property that did not belong to it

Oslo listed junior, African Petroleum, says it is preparing toformally commence arbitration against Gambian authorities, as it has not received any feedback, formal or otherwise, from the Government, “despite its best efforts to engage in dialogue with the relevant authorities”.

African Petroleum has for the past three and half years been at odds with the Gambian Government, who revoked the two licences in January 2014 and then reinstated the licences after the company went to arbitration.

The Government’s concern has always been that it doesn’t see African Petroleum doing much with the acreages, located in what has now become one of the world’s hottest Exploration spots; the Northwest African transform margin.

Since late 2016, African Petroleum has been in negotiation with an unnamed third party regarding the possible acquisition of interests by said third party in those two Licences: A1 and A4
But the acquisition was conditional upon extension of the exploration periods of both licences by at least 12 months. This fact, as far as the Gambian government was concerned, meant that African Petroleum was trying to sell hydrocarbon property that did not belong to it.

ByJuly 2017, the proposed deal had unravelled.The putative buyer was no longer keen. African Petroleum had failed in the bid to sell a 70% stake in A1 and A4 offshore blocks in Gambia, along with another licence in neighbouring Senegal.

African Petroleum is vexed that the Government’s non response to its call for renewal fostered the climate of uncertainty that soured the deal. The government simply didn’t respond to the company’s proposal to enter into the next phase of the licences and transfer the outstanding well commitment into the new phase.

“We now believe that in order to protect our historical investment, we have no choice but to take this case to arbitration.We remain open to progressive dialogue and sensible resolutions with the Gambian authorities but must proactively seek to protect our rights through this process”, the company said.

Angola LNG Sells All To Vitol

Angola LNG Limited (ALNG) and Vitol SA (Vitol) have entered into a multi-year LNG sales agreement. Under the agreement, ALNG cargoes will be delivered to Vitol at destinations around the world.

This deal“demonstrates our ability to respond to the needs of our customers and the market”,Artur Pereira, CEO, Angola LNG Marketing Ltd, said. “Vitol has already purchased many LNG cargoes from Angola LNG, and we look forward to continuing our successful relationship”

The 5.2MMTPA capacity plant, Angola LNG, commissioned in 2013, draws its gas supply from a diverse range of sources, primarily associated gas from offshore oil operations in Blocks 15, 17, and 18. The LNG’s use of associated gas as a primary feed source is unlike other LNG projects around the world which tend to use non associated gas.

Pablo Galante Escobar, Head of LNG, Vitol, said; “We are delighted to have entered into this agreement with Angola LNG. It is an exciting initiative for Vitol; we have a long history of investment and partnership across Africa and are pleased to add these LNG purchases to our portfolio.”

Chariot Walks Out Of Namibian Southern Blocks

London listed Chariot Oil & Gas Limited has elected not to enter into the First Renewal Exploration Period of the exploration licences covering each of the Namibian Blocks 2714A and 2714B.

But in the event that any company completes exploration drillingin any of these blocks, Chariot has secured an assurance from the Namibian government that it could return to them and acquire f10% equity for no financial consideration.

Chariot has been one of those companies extremely keen on Namibian prospectivity. It currently holds85% equity with the state hydrocarbon firm NAMCO Rholding 10% and Quiver, a little known minnow holding 5%. The company says it has notified these two partners about its exit and the process of withdrawal is now underway.

Chariot was in the Joint Venture that drilled Kabeljou-1 in Block 2714A in 2012, and plugged and abandoned the well as a duster at a total depth of 3,150metres True Vertical Depth subsea (TVDss) in September 2012. At the time of that drilling, Chariot held 25%, with Petrobras (Operator) 30% and BP 45%. The other companies have since left.

Chariot acquired approximately 2,128 kilometres of 2D seismic data, prefunded the ION Namibia SPAN long offset 2D seismic data and reprocessed the historic 3D seismic data over the 2714A and 2714B. Analysis of the integration of this seismic data with regional well data identified gas prospects AO1 and AO2 in the Aptianclasticonlap play.

“The work undertaken by Chariot to define this prospectivity resulted in industry interest; however the technical risk associated with these prospects deterred potential partners from committing to a programme of exploration drilling in the current environment”, the company explains. “The decision not to enter into the next period was made in line with the Company’s risk management strategy, its focus on portfolio management and capital discipline”.

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