All posts by AOGR

ENI Enlarges The Ghanaian Oil Tank

ENI Enlarges The Ghanaian Oil Tank

Italian major ENI encountered  76 meters of gross oil pay and 28 metres gross gas and condensate sands in Cretaceous sequences in the Sankofa East-1X well on Ghana’s Offshore Cape Three Points (OCTP) block. It is the company’s first crude oil discovery on the block, which was always known to be water bearing. Production test yielded 5,000BOPD of what ENI called “high quality” oil in the sand interval. The company said that flow rates were constrained by surface infrastructures.

ENI plans to drill more wells to delineate the size of the discovery and confirm the feasibility of commercial development.
Sankofa East-1X well reached a total depth of 3,650 meters, in 825 meters of water.

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Algeria’s Hydrocarbon Law Review Goes Only So Far

In the revised Algerian Hydrocarbon Law, submitted to Parliament on the last week of September 2012, tax will be calculated based on the profit from a project, as opposed to the current system where tax is levied on the basis of turnover, which was a reason why investors stayed away.

Algeria is desperate to kickstart a shale gas exploration and production activity. Projects involving such resources will be largely incentivized. They will be governed by their own special provisions in the amended hydrocarbons law.

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Frank Timis, Dahiru Mangal, Influence New Acreage Awards In Niger Republic

Frank Timis, Dahiru Mangal, Influence New Acreage Awards In Niger Republic

IP’s blocks are the most prospective after the Chinese operated leases.

In the end, the recently concluded award of licenses for nine hydrocarbon acreage in Niger Republic, came down to the influence of two people: Frank Timis, founder of International Petroleum, and Dahiru Mangal, the Nigerian owner of Persoil Trading and Maxx Air.

Imis, who has, through Africa Petroleum, built a substantial portfolio of acreages in deepwater West Africa, got his day in the desert by winning four acreages in the Sahelian country for his other company: International Petroleum(IP).

A Cabinet meeting on July 6, 2012 awarded Manga 1, Manga 2, Aborak and Tenere West to IP. All of the blocks awarded on IP are trending along the flanks of the trough where reserves have been discovered and currently under production in areas operated by the China National Petroleum Company.

Mr Timis, who is becoming one of the most aggressive hydrocarbon explorers in Africa’s frontier basins(His African Petroleum drilled two deepwater wells in Liberia in 2010/2011 and opened up the country with the first commercial discovery), had courted the Niger Republic president for months, flying into the country several times, according to reports.

Dahiru Mangal, the Nigerian businessman with the most extensive logistics operations along the Nigerian-Nigerien border, was able to get three blocks for Advantica  Gas &Energy and Labana Petroleum, companies linked to two former governors of states in Northern Nigeria.

Labana won Dibella 1, which adjoins CNPC operated  Bilma block to the east. Advantica was awarded the Manadaram Block, south of  I. P’s Aborak. Labana’s other award is Dallol, which is located in the far South west of the concession map.

Mangal’s companies have been responsible for transporting Nigeria’s Northern Pilgims to the Hajj for years and that is quite an important work in the context of economic issues in that part of the country. He was very close to Umar Musa Yar’adua, the late Nigerian president, but more crucially for these new awards, Mr Mangal is very chummy with Mahamadou Issoufou, president of Niger Republic.

Sirius Energy, another company linked with Nigerian owners, won the Grein block, which sits directly north of CNPC operated Tenere block. The Djado 1 permit went to Genmin Bermuda.

Uganda Seeks Transaction Advisor For Refinery

Uganda Seeks Transaction Advisor For Refinery

The Ugandan Government has received expressions of interests from companies bidding to be its Transaction Advisor for the development of an oil refinery. The government will send out invitations to tender or to participate to selected candidates on Monday 22nd October 2012.

When selected the Transaction Advisor shall advise Government on structuring the refinery project, developing a feasible project financing structure, planning and securing appropriate investment partners, development plans for the Refining Company including, but not limited to, preparation of the necessary legal documents for formation of the Refining Company and further detailed agreements and contracts with crude suppliers and petroleum products offtakers.

This is the first formal step that Uganda has taken on its own, to go forward with talks with upstream operators in the country to set up a refinery has stalled several times. But the Ugandan government has been keen on getting a refinery on ground from the get-go of crude oil production.

Tullow Oil, the country’s leading operator, has argued that construction of export pipeline is a more bankable project. The government disagrees. “One of the key findings from a feasibility study (conducted by Forser Wheeler) was that development of a refinery presented better benefits to the country compared to the crude export pipeline”, the government said in the invitation for expression of interest for the role of transaction advisor.

Government’s plan is to develop a 60,000 BOPD refinery that will later be expanded to 120,000 BOPD and then 180,000 BOPD. The strategy is to develop the 60,000 BOPD refinery in a modular manner starting with 20,000 BOPD delivered within 3 years. The Government of Uganda has received a grant from the Norwegian Ministry of Foreign Affairs to contract services of a Transaction Advisor.

The Transaction Advisory Services, which are estimated to last one year,  are expected to be provided by a firm with extensive experience with a minimum of 10 years’ experience in providing similar services. The company should include most important projects of similar type executed during the last 3years including their value, execution period and client. Detailed description of relevant projects executed by the company involving development/planning/evaluation of Transaction activities related to complex petroleum projects in general and particularly in Africa should also be included.

The project team is expected to provide the following key expertise for the assignment:

  1. Experience in oil supply & refining contracts and agreements e.g. Joint venture/cooperation/ participation agreements, Crude oil supply contracts, Oil logistics (supply, transportation, trading and storage)
  2. Project management experience/competence in oil and gas
  3. Legal expertise and experience from international oil and gas
  4. Experience in valuation, incorporation and setting up manufacturing companies
  5. Experience/competence in financing of large investment projects

The ideal consultants should be qualified in their respective fields with a minimum of graduate qualification and with not less than 10 years of experience in the oil and gas sector.

Joint proposals are acceptable, but one company must undertake responsibility as Main Consultant and the others as sub-Consultants to the Main Consultant.

Egypt: Vegas Moves For A New Take Point In Geyad

Vegas Oil & Gas has moved the rig to the Geyad field, following the successful completion of the Al Ola-3 well. The new location, Geyad-6, is an infill production well, located in the south central part of the structure.
Al Ola, Al Amir SE field (AASE) and Geyad fields are all in Egypt’s North Gemsa Concession, which is 50% operated by Vegas. Al Ola-3 is a water injection well, located downdip of and to support the oil production from the Al Ola-1, Al Ola-2, AASE-12ST and AASE-1X production wells respectively, and is located 870 metres to the south of the Al-Ola-1 well and 1,445 metres south-east of Al-Ola-2 well. The well’s objective was to appraise both the Shagar and Rahmi sands for water injection in that location.
The well was successfully drilled to a total depth of 10,550 ft MD into the Upper Rudeis. The well encountered 18 ft of net reservoir in the Kareem Shagar sand (between 10,164-10,182 ft MD) and 20 ft of net reservoir in the Rahmi sand (between 10,232-10,252 ft MD), with high water saturation present to the base of the reservoir as expected. Formation pressure tests in the Kareem sands of Al Ola-3 indicate fluid communication in this southern extent of the AASE field. The well will be dually completed as a Shagar and Rahmi water injector.

Gas Policy Delays Tanzanian Bid Round

Tanzania has shifted its 4th offshore licensing round further by a few months to allow its parliament enough time to ratify the Natural Gas Policy and Gas Utilization Master Plan. The sale of nine blocks was to have been launched in the first week of September 2012, but the Tanzanian Ministry of Energy & Minerals has called for the delay until the parliamentary session in October 2012, when the government will be presented with the instruments.

The move will allow the policy to be ratified before the start of the new roadshow schedule, which is anticipated to start again soon after the Parliamentary ratification. The gas policy and gas utilization master plan have to be backed up by a Gas Act.

18 companies are working in Tanzania with 26 gas exploration licenses, exploring gas in the country as well as off the country’s coast.

ION GeoVentures, the consultant to the Tanzanian government on the bid round, says  that the bid round data package will be available for review and purchase by September-end.

“Investors will get more time period to evaluate the technical data and assess the prospects of the nine blocks on offer”, the company explains.

NDEP Sucks 7MMBO Out of Ogbele

The Nigerian independent, Niger Delta Exploration and Production (NDEP), had produced Seven Million barrels of oil (7MMBBO) from  its Ogbele field in Eastern Niger Delta as of July 2012. The field production commenced in October 2005. The company is hoping it can produce many times more oil in the short term. It is also working prove that the field has reserves of 100 million barrels of oil equivalent by 2015.

The Ogbele field oil and gas probable and proven reserves (P1+P2) “stood at 51.42 million barrels of oil, 39.06 billion cubic feet (bcf) of associated gas and 517.4 bcf of non associated gas”, according to Layiwola Fatona, Managing Director of NDEP. “This brings the total gas reserves to 556. 46 bcf and total hydrocarbon (oil + gas) of 144.16 million barrels of oil equivalent (BOE), the total proven (P1) hydrocarbon reserves (liquids and gas) for the Ogbele field; including developed and undeveloped oil, condensate and natural gas liquid reserves is currently 64.l6million barrels of oil equivalent.”

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Ugandan Businessmen Call For Local Content

Ugandan private sector interest group, the Association for Uganda Oil and Gas Service Providers(AUOGS), has called on government to include opportunities for local firms in the Petroleum Bills tabled before Parliament.

The country’s legislative arm is debating two bills – Upstream (Exploration, Development and Production Bill 2012) and Mid-stream (Refining, Gas Processing and Conversion Transportation and Storage Bill 2012). The Upstream bill instructs Exploration and Production companies as well as their agents to give preference to goods and services produced or available in Uganda unless they are more expensive or of inferior quantity and quality to those that can be imported. The AUOGS however argues that the provision could be interpreted to the disadvantage of indigenous companies. “Who determines whether the services by local firms do not meet the international specifications?” the lobby group contends. “There should be an independent body to scrutinize whether dealers meet the required standards.”

The AUOGS asks the Natural Resources Committee  of the Parliament-which  has been gathering views from the public to include enough clarity in the law to ensure that local firms benefit from local content opportunities set aside for them.

“Government needs to be clear what a Ugandan company is”, AUOGS Chairperson Bob Kabonro told the committee, “is it one registered in Uganda or one owned entirely by indigenous Ugandans?”  He declared that “there has been lack of enabling laws on the provision of goods and services”.

Emmanuel Baluyi, the lobby group’s lead counsel, requested that laws should give preference to indigenous contractors, encourage joint ventures between indigenous companies and foreign companies and ensure uniform financial and legal accounting standards for ll international oil companies that operate in Uganda.

South Africa Warms Up To Gas

First it was the National Planning Commission report. Then came the Cabinet’s lifting of moratorium.

Overnight, the mainstream thinking of the South African political and business elite has changed from “gas-is-not-on-the cards” to “its -okay-to-include-gas-in-the mix”.

The South African National Planning Commission’s revised plan, released in August 2012, repeated its cautionary note on the cost of nuclear power, the country’s preferred alternative to fossil fuels, and suggested a diverse mix of energy sources. The Commission said: “If gas reserves are proven, and environmental concerns alleviated, then development of these resources and gas-to-power projects should be fast-tracked.”

Several days after the Planning Commission’s report was aired all over the media, the government lifted a year- long moratorium on Shale Gas Exploration.

And then, the South African media went agog with discussions about the imperative of gas in the country’s energy mix.

South Africa’s energy policy has not always viewed natural gas, the world’s least polluting fossil fuel, as an important resource for its planned, massive increase in electricity supply capacity.

The Integrated Resource Plan (IRP) for the country, published as a government gazette in May 2011, envisages an addition of 42, 600MW of new build electricity generation capacity between 2010 and 2030, to all existing and committed power plants. The plan assumes a nuclear fleet of 9,600MW; 6,300MW of coal; 17,800 MW of renewable;  and 8,900 MW of other generation sources, which includes only 2, 400MW of close cycle gas turbine generated power.

The installed open cycle gas turbines currently generate 1,316MW, or a mere 4% of the country’s nameplate capacity. Two of these four gas plants-the 588MW Ankerlig plant and the 438MW Gourikwa plant- were commissioned only in the last six years. Before they were built, the country was generating just 342MW (171MW each) from two plants: Acacia and Port Rex. South Africa’s power utility Eskom currently supplies 45% of Africa’s power and 95% of its own country’s electricity, mostly from coal-fired plants. There’s limited space for more private sector generation in the medium to the long term.

We have argued, in this magazine, that even the 2,400MW of gas fired electricity in the IRP, a 20 year resource plan envisaging a build of  42, 600MW, is a mere after thought. The national conversation around energy issues in South Africa has involved every conceivable energy source but natural gas. The roll out for installation of renewable energy plants has kicked in; there’s a vibrant discussion of the possibility of scaling up nuclear power generation in the country, even if there are more skeptics than optimists; and the place of coal in the country’s energy future is assured.

But no one was, really, discussing gas until recently. The IRP had extensive input from a wide range of stakeholders in the energy industry.

A key reason for the aversion to gas utilization in S.A’s energy mix is that while the country doesn’t have much gas reserves, it considers the cost of imported gas as rather too high.  Take this liner in the plan:  “The import coal and hydro options are preferred to local options, but imported gas is not preferred to local gas options”. So, even while South Africa has the opportunity to benefit from the recent natural gas finds offshore Mozambique, one of the  most significant hydrocarbon discoveries  on the planet in the last 10 years.

The current upbeat mood about gas in the South African national conversation is driven largely by the optimism that Shale gas exploration would unlock trillions of cubic feet of shale gas in the Karoo.

The discussion still has not accommodated nuanced reviews of the opportunities afforded by gas pools in neighbouring countries.

Midwestern Heads West, Dumps Agip

Midwestern Oil&Gas, the Nigerian independent, has taken a decision to find an alternative to its current crude oil evacuation route. The company is about to construct a 53km pipeline to take the 13,000Barrels Of Oil per Day produced in its Umusadege field to Shell’s Eriemu manifold, where the fluid will be taken into the trunkline to Shell’s Forcados facility. “The pipes have been ordered, we’ve done the survey, we are doing the right of way acquisition”, says Adams Okoene, Midwestern’s CEO.

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