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Midwestern Moves to Grab A Large Slice of San Leon

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

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

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

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

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

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

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

 


King Kosmos Waves the Sceptre

By Moses Akin Aremu 

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

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

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

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

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

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

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

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

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

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

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

 


Three In One Quality Marks Out NigerStar 7ADABA

By Foluso Ogunsan

PAID POST

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

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

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

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

This is a sponsored article.

 

 

 

 

 

 


The German Force Is Out to Get Oil

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

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

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

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

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

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

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

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

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

Wintershall DEA will be jointly headquartered in Hamburg and Kassel.

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

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

 


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

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

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

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

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

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

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

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

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

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

 


For Ghana’s Taxman, Oranto is hiding in Plain Sight

Ghana Revenue Authority GRA claims that Oranto Petroleum, the Nigerian owned E&P company, “has been located in Angola and Mozambique”.

This “revelation” is in response to a declaration that the company, in partnership with Stone Energy “has still not honoured an outstanding surface rental invoice of $67,438.36 since February 2013”, according to the 2017 report of Public Interest and Accountability Committee, PIAC, on the Management of the country’s Petroleum Revenue for the year.

The PIAC then recommends that the GRA should “collaborate with the relevant authorities in these jurisdictions to retrieve the money”.

The PIAC is the closest entity, in Ghana, to an Extractive Industry Transparency Initiative (EITI). It is a statutory body established under Section 51 of the Petroleum Revenue Management Act (PRMA), 2011 (Act 815) to ensure transparency in the generation and use of petroleum revenues. Its reports are published twice every year.

The claim, by GRA, of Oranto’s alleged location and the recommendation, by PIAC regarding retrieving Oranto’s debt are quite telling, of institutions that are run with public funds.

A click on the internet shows where Oranto’s operations are all over the continent, on its own website.

Angola and Mozambique are nowhere on the site and Oranto is not hiding; it is in the news all the time; the latest (August 2018), being that it has won two blocks in Zambia.


The Namibian Rush Hits A Bump

The first of the two wells scheduled to set off another round of drilling in Namibia, has come up as a duster.

Tullow Oil operated Cormorant-1 exploration well on Petroleum Exploration License 37 (“PEL 37”) offshore the Republic of Namibia encountered non-commercial hydrocarbons. PEL 37 covers 17,295 square kilometers in the Walvis Basin, approximately 420 kilometers south of the Angolan-Namibian border. The Cormorant-1 well, located in 548 meters of water, was drilled by the Ocean Rig Poseidon drillship to a total depth of 3,855 meters. The well has been plugged and abandoned.

The Cormorant-1 exploration well penetrated a 50-metre fan system within the Cormorant Prospect. Interbedded sandstones were encountered in the primary objective of the Cormorant-1 well but proved to be water bearing. Wet gas signatures, indicative of oil, were encountered in the overlying shale section. Important geological data has been gained from this well, and, in combination with high quality 3D seismic data, will provide valuable insights into the future prospectivity of PEL 37 where several additional prospects with significant resource potential have been mapped.

Jan Maier, VP Exploration for Africa Energy, a minority partner with 10% stake in the project, says that his company is encouraged that the probe “confirmed the existence of a mid-Cretaceous aged deep marine fan sandstone system with further potential in the play.

Africa Energy owns one-third of Pancontinental Namibia (Pty) Ltd, which holds a 30% participating interest in PEL 37, resulting in a 10% effective interest for the Company. PEL 37 is operated by Tullow Namibia Ltd, which holds 35%, with partners ONGC Videsh Ltd. and Paragon Investment Holdings (Pty) Ltd, holding 30% and 5%, respectively.

 


NLNG Recorded Its Highest Output of All Time in 2017

By Kish Onwunali, Abuja Bureau Chief

The highest production that the Nigeria Liquefied Natural Gas (NLNG) Ltd has delivered to the market in one calendar year is 21Million Tonnes (21MMTPA) and that was achieved in 2017.

“From a production stand point, 2017 was our best year. That was the year that we produced the highest volume ever and we delivered 21Million Tonnes and slightly more”, Tony Attah, NLNG’s Chief Executive Officer, told Africa Oil+Gas Report. “That was the record year for us as the highest volume that the NLNG has ever delivered to the market in a calendar year”.

The NLNG’s six trains can collectively deliver 22Million Tonnes in a year, which means that 22MMTPA is the nameplate capacity.

“You start looking at name plate capacity versus what we are actually delivering”, Attah, who is in his second year on the job, told us in an exclusive interview. “I think overall, we are optimizing all the bottle necks in the plant to be able to do more. Today, we are really around what is re-rating to 66,000 Tonnes per day capacity plant. We are improving within our capacity in terms of operational flexibility and possibility to keep pushing the envelope”, he explained.

Although 22MMTPA has been the nameplate capacity since the installation of Train 6 in 2008, several challenges, including gas supply adequacy,  sabotage of supply facilities, even logistics issues such as the company’s 2015/2016 face-off with the Nigerian Maritime Administration and Safety Agency (NIMASA), all have acted as downward pressure on optimum output.

The NLNG Ltd, incorporated in 1989, commissioned production in 1999, with the first train having a nameplate capacity of 3.2MMTPA. The base project, Trains 1 and 2 collectively have the capacity to deliver 6.4MMTPA. Train 3 is another 3.2MMTPA plant. Trains 4, 5 and 6 have capacities of 4.1 MMTPA each. The proposed Train 7 will be twice the size of the largest of these six trains.

The full interview is published in the October 2018 issue of the Africa Oil+Report, which focuses on Africa’s Midstream projects and the continent’s Refining Gap.

 


Oilserv In Bed with GEPetrol

PAID POST

The Nigerian engineering oil service company Oilserv Limited, is bolstering its Pan African credentials by getting into a joint venture with GEpetrol, the state hydrocarbon company of Equatorial Guinea.

The agreement between the two, signed in early July 2018, has resulted in the formation of OILSERV EQUATORIAL GUINEA S.L.

“The Joint Venture Partnership is a collective strategic thinking aimed at driving inbound investment into the Equatorial Guinea Oil/Gas landscape and to develop the necessary local technical capacity to support the investment aimed at repositioning the national economy”, the two companies say in a press release. “In this new collaboration, Oilserv brings its vast years of technical experience and successful delivery of projects to replicate its achievements in Equatorial Guinea oil and gas industry in partnership with GEpetrol”.

Oilserv is the most visible hydrocarbon pipeline installation firm in Nigeria; its order book is the key guide to the most important crude oil or natural gas pipeline construction is going on in Nigeria. Currently it is constructing half of the OB3 pipeline, the 48 inch, 67km line that is scheduled to be the nerve of the country’s imminent gas grid.

The company has however, been keen on expanding its footprints all over the African continent. It is involved in negotiations with the Ugandan government over a gas pipeline from the hydrocarbon rich town of Hoima to Kanugu, site of a proposed Iron and Steel factory. Its subsidiary, Frazimex, once took a position in Sierra Leone, as an E&P operator.

But to have formed a Joint Venture company with Equatorial Guinea’s state hydrocarbon firm is big deal.

There are no details on the project that the Joint Venture will start with, but GEpetrol’s credentials provide a clue: the company manages the Equatorial Guinea State’s participation in petroleum contracts, markets the State’s share of production and participates in oil service activities. In the midstream area, GEpetrol is a partner in the Equatorial Guinea Liquified Natural Gas Company and in other ventures, So that’s a clue: Equatorial Guinea has just created a hub for natural gas supplies, which will, in the first instance, introduce third party gas into the Punto Europa complex that was, until now, only supplied with gas from Marathon Oil operated Alba field. If the Equatorial Guinea government is thinking of pipeline to supply gas into that complex from any field that is some distance away, then Oilserv has the capacity to do it.

‘’I am delighted to welcome yet another global brand to GEpetrol, especially a respected and recognized name in the Nigerian Oil and Gas industry”, says Antonio OBURU ONDO, Chief Executive of GePetrol. “This new partnership is a testament of the government continuous efforts in encouraging private sector participation with greater economic liberalization policies and the creation of favourable investment climate and enabling framework”.

 


Egina Rams into MT Jazi and Zion on Its Way Out

By Sully Manope

The Nigerian owners of two petroleum product vessels are compiling estimates of damages after the Egina Floating Production Storage and Offloading (FPSO} Vessel rammed into them at the Lagos Harbour.

The FPSO was beginning its journey from Lagos to the Egina oilfield offshore Akwa Ibom, in the country’s south east, on August 26, 2018, when its tow lines parted.

MT Jazi and MT Zion, were docked at the harbour, waiting for cargoes of product supplies, when the collision happened. The impact threw off a crew member from MT Zion into the water, but he swam into safety. Divers in the Egina FPSO quickly moved to restore the tow lines and guide the ship back to course.

The Egina FPSO has since arrived on the field on August 29, but the case of the collision is in arbitration in Lagos where, officials of Samsung Heavy Industries, operators of the FPSO, reported the incident at the Nigerian Maritime Administration and Safety Agency.

 

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