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Tullow Expects Production Boost To 90,000BOPD

Irish operator Tullow Oil, anticipates working interest production to surge from an average of 58,100 BOEPD in 2010, to between 86,000 and 92,000 BOEPD in 2011. Production had dropped to an 58,300BOEPD average in 2009, from 66,600BOEPD in 2008. The expected 48% uptake, in 2011, is thus bucking a three year downward/flattening trend. Much of the anticipated increase, of course, is coming from Jubilee, the newly commissioned deepwater oil field offshore Ghana.

Jubilee started up at 50,000BOPD at the end of November 2010. It is expected to ramp up to 120,000BOPD by June 2012.

The First Of 2011 And Related Issues

By Dayo Ojo

A number of oil and gas firsts will be recorded in 2011.  The lucky countries and operators will celebrate such accomplishments.  As they do, they will inadvertently raise questions which will define how enduring the successes will be.

Ghana ranks high on the list of countries with firsts in 2011 as it gets set to quickly follow commencement of oil production from the Jubilee field with loading first commercial cargo. Once that is accomplished, issues such as revenue management and economic empowerment of the stakeholders will become the focus of discourse. And quietly, Ghana will gradually unfold the character of its reputation as an oil producing nation. The world is waiting eagerly to see how Ghana will deal with post—oil economic management. Questions will arise whether oil is a blessing or a curse to Ghana. How will Ghana allocate oil resources? Will it stick to agreed plan? Comparisons will be made whether Ghana will fritter resources like Nigeria or go the way of Brazil which has devoted a significant portion of its energy production to powering an industrial base while at the same time ensuring consistent reinvestment in exploration.

Fifty years on, despite billions of petroleum dollars, Nigeria has continued to crawl like a toddler, unashamed that a 50- year old who does not walk or run is an irredeemable cripple! We expect that the widely publicized deprivation of lives in the Niger Delta, coupled with the attendant violence is more than enough lesson for Ghanaian authorities. The good news is that incurable optimists are convinced that the draft (almighty) Petroleum Industry Bill (PIB) is Nigeria’s answer to policy inconsistency and epileptic implementation of policy in the oil and gas sector.

Few things remaining equal (and unfortunately several things don’t remain equal around here), Uganda is also expected to celebrate first oil and first gas before 2017.  From Cameroon, we expect first gas from the Logbagba gas project while in Egypt we anticipate re-commencement of gas export to Israel.  In Nigeria, a few International Oil Companies (IOCs) and indigenous operators are expected to bring gas projects on stream in support of the goal to improve electricity supply from gas.

Whether it is a new crude stream, a gas plant, new discovery, farm in or mini bid round, it is all good news for the state economies as long as jobs are being sustained, new ones created and there is further investment in the sector. What is worrisome is that while all the accomplishments are being celebrated, little or no attention is paid to the soft but critical issues around the business, that is, the issue of the sustenance of the license to operate by the operators. Whether it is in Ghana, Uganda, Cameroon, Egypt or Nigeria, there is need to pay more focussed attention to what ought to be done if oil and gas companies are to retain their licences to operate. Are new entrants to oil and gas production more vulnerable to operational crises or stakeholder issues than experienced ones? That is a moot point. However, the game is changing. Unlike 50 years ago when Nigeria commenced production, the media is everywhere today. Stakeholders are everywhere and they are more aware. The internet is everywhere. And to add insult to injury, Wikileaks is here! Even without Wikileaks, the accountability phenomenon has taken over. And what does all of this portend? It is that to survive today is far more demanding than it was ten years ago.

While the goes on in Nigeria as to the desirability or otherwise of the Corporate Social Responsibility Bill which is currently in the National Assembly, there is no argument whatsoever about the fact that it is no longer enough for business to pay taxes, fair and equitable wages and walk away.

For businesses to retain their licences to operate there should be a transparent commitment to participating actively in the lives of the communities and contributing more than marginally to improving the quality of life in those communities. A number of companies across the continent are developing gas projects but the curious issue is how many of such companies are devoting time, resources, and personnel to researching or improving on known emergency response procedures? Will the new projects raise new concerns about emergency response readiness? Are there new issues emerging that require equally new strategies and tactics? Is it time to review available regional capability to deal with emergencies? All of these issues must be exhaustively debated if the future licences to operate are to be guaranteed.

Beyond emergency response capacity and capability, there is the critical issue of how the projects, companies and countries tackle the issue of the environment and the socio-economic aspirations of the citizenry. The increase in the number of Nigerian gas projects and the news of the registration of four of those projects under the United Nations Framework Convention on Climate Change (UNFCCC) Clean Development Mechanism (CDM) is welcome. However, registration for CDM and the attendant financial reward is not enough. Equally necessary, is a new phase of engagement and economic empowerment for the stakeholders especially locals who are resident in communities in which the facilities are located.

The bottom line is that oil and gas companies must redraw the stakeholder map and engagement plan in order to regain the trust of society. It is no longer enough to have a good plan. There must be professional handling of the day to day management of issue and crises. If issues do not arise because of what the companies have failed to do, issues will arise because of the increased awareness and knowledge.

Adedayo Ojo is Lead Consultant/CEO of Caritas Communications Limited, a specialist reputation strategy and corporate communication consultancy based in Lagos. Caritas is the West Africa affiliate of Regester Larkin, a pioneer reputation strategy and management consultancy with offices in London, Washington and United Arab Emirates.

The East Threatens A Downpour

By Toyi Akinosho

Mozambique is trying hard to be the next Ghana.

Since late November 2010, the news from the south easternmost country in Africa have been mostly about the confirmation of large reservoirs, filled with hydrocarbon, buried in the deep blue waters off the adjoining coastline of the Indian Ocean.

The only reason we are not cheering the way we applauded the finds in Ghana’s deepwater in May 2007 is that the hydrocarbon type is largely gas.

Take note of this: in spite of the rise and rise of methane as a choice fossil fuel in the last decade, the African petroleum industry still finds stories of discovery of large crude oil pools more reassuring, because the domestic markets for raw or processed hydrocarbon, especially in the sub-Saharan part of the continent are small. The fertilizer for tens of millions of people, are minuscule by the standards of developed countries. So companies are not always readily excited about delivering projects that beneficiate gas resources.

However, let us look first at these assets for the surprise they have been.

We have always guessed that the east African crustal plate contained a lot of small gas tanks.

These resources, we reckoned, would be enough to drive the regional economy: from Mozambique, it would provide sizeable export for gas -to —synthetic fuel plants in South Africa; in Tanzania, it would deliver enough feedstock for small IPP plants and CNG facility. There will be enough gas for export to the port of Mombassa, in Kenya for conversion to LPGs.

No one ever suspected that an extra large facility, say an LNG project, could result from exploration on this side of the Indian Ocean.

But that possibility is beginning to loom large. Anadarko’s recent discoveries in the deep blue waters off Mozambique, in 2010, belong in the same class as the Mahogany oil find, off Ghana, in 2007. They are both elephant sized discoveries, contrary to the popular geologic imagination of the region at the time they were encountered.

Baquentine encountered a total of more than 416 feet net of natural gas pay in multiple high- quality sands. Lagosta encountered more than 550 feet net gas pay in multiple high quality Oligocene and Eocene sands. Specifically, the Barquentine well encountered more than 308 net feet of pay in two Oligocene sands that are separate and distinct geologic features, but age-equivalent to those encountered in Anadarko’s previously announced Windjammer discovery located three kilometres to the southwest. Anadarko doesn’t supply any more information (porosity, permeability) to corroborate its claim that these are “high quality” sands. And we don’t yet know how thick each of these sands are, but the results call for excitement. (For instance, if you stack twenty reservoirs in a 500feet net gas package, it means that that the average thickness for one sand is 25 feet).

The Mozambican reservoirs are tertiary sands, markedly different in age from the cretaceous play of the Ghanaian reservoirs. They are closer in age to the deepwater sands of Angola and Nigeria. The Mozambican finds support the speculation that the tertiary was the great age of hydrocarbon generation in the sinks surrounding the continent. It’s the same line of speculation that adduces that the Ghanaian reservoirs, deposited in the transform margins that hold the reservoirs of the Rio Muni )Equatorial Guinea), Abidjan Margin(Cote D’Ivoire) and probably the Sierra Leone- Liberian basin, are going to be few. These cretaceous fairways are shorter than the tertiary fairways that produced the Congo Fan(Angola) and the Niger Cone(Nigeria).That the Mozambican reservoirs may be in a different ocean today, but have closer depositional and age relationship with pools that are located in another sea, half the world away is proof that Geology is not Geography. What I am saying in effect is that Mozambique might have more elephants than Ghana, on the long run. The challenge remains the fluid type: gas. Delivering the LNG business is not as easy as selling the crude oil.

As I was writing this, the drillship Belford Dolphin was arriving on location at the Tubarao wellsite, the fourth location in the Offshore Area 1 acreage off Mozambique’s Rovuma Basin, where Anadarko encountered those three spectacular finds. It looks like we are set for a cheerful year. Anadarko, the company which provided most of the funds for the first discovery in Ghana and went on to unlock reservoirs in deepwater Liberia, has cracked another African geologic code. It’s Anadarko’s time.

Tanzania hasn’t been as exciting as Mozambique. This, at least, is our interpretation of the caution with which information on recent, similar drilling, has been coming out of that place. BG, the British gas major, has encountered gas in its two wells in deepwater Tanzania, in the same Indian Ocean waters, where Anadarko’s Mozambican finds have been reported. Pweza 1 and Chewa-1, both located on Block 4, are two of a three-well initial work programme planned for Blocks 1, 3, and 4 offshore southern Tanzania. The initial work programme also includes the acquisition of 4,000 sq km of 3D seismic data. BG Group (60%) has the option to assume operatorship of all three blocks upon completion of the initial work programme.

The statements from partners BG (60%) and Ophir(40%) are carefully worded sentences: “The success of the Chewa-1 well follows on from the earlier Pweza-1 discovery and provides a measure of confidence in the use of seismic attributes to guide a successful exploration campaign, in Tanzania” says Allan Stein, CEO Ophir. “We have now calibrated the seismic response from two separate hydrocarbon bearing reservoir intervals and shall use this information to more fully evaluate the potential of this exciting new hydrocarbon province.”

Frank Chapman, BG Group Chief Executive, sounds even less excited” This is an encouraging start to our campaign in Tanzania. We have a large acreage position to explore and an extensive exploration program will be needed to assess the full potential of this new play.”

But again, what is going on there is not what we were expecting.

SacOil Admits Carina de Beer To The Board

SacOil Holdings limited has appointed Carina de Beer as the Financial Director of the company. Ms de Beer is a Chartered Accountant (SA), who has been a part of the SacOll executive team from the time of the acquisition of Samroc (as SacOil was then called) while it was still listed under the Venture Capital board of the JSE. Carina completed her articles with PricewaterhouseCoopers, and she has extensive experience in corporate financial management and reporting, company secretarial practice and corporate governance. Carina is a member of the South African Institute of Chartered Accountants, the Chartered Secretaries of South Africa, and the Institute of Directors.

Robin Vela, the Chief Executive of SacOil, had this to say about the appointment: “We are pleased that Carina has agreed to join the SacOil Board of Directors. She is an excellent addition to the team, and brings a wealth of experience with her that will greatly benefit the company”.

Orca Promotes Andrew Brown

Orca announced two senior natural gas operations and marketing appointments. Andrew Brown has been named General Manager of the company’s natural gas production, gas marketing and distribution operations in Tanzania. Pierre Raillard has been named Vice President, East Coast Transmission and Marketing, the new infrastructure development division of Orca.

Mr. Brown has had a broad and successful career in downstream gas marketing and operations. He previously held senior management positions over a period of 36 years within the BG Group. Mr. Brown recently served as Managing Director for BG’s Nile Valley gas company in Egypt. His skill and experience are ideally suited to managing operations and continuing the development of Orca’s gas markets in Tanzania. Mr. Brown will be based at Orca’s operations headquarters in Dar es Salaam, Tanzania. He replaces Pierre Raillard as In-Country Manager.

Mr. Raillard has been with Orca since it began its natural gas operations in Tanzania. He has played a key role in the development of the Company’s Songo Songo natural gas operations and has been at the heart of Orca’s market development work with industrial and utility gas customers. Mr. Raillard will head up a previously announced new division of Orca committed to expand midstream gas distribution beyond Dar es Salaam and potentially for export to other countries in East Africa.

As part of this, Mr. Raillard is leading a study focused on expanding the onshore natural gas pipeline system that currently transports Songo Songo gas to Dar es Salaam. An expansion would require the twinning of the existing 207 kilometer onshore pipeline. Ultimately it is envisioned that the pipeline could be extended along the coast – north to Mombasa and south to Mtwara near the Mnazi Bay gas discovery on the border with Mozambique.

Ojo Grabs The Reins Of NAPE

Africa’s largest body of petroleum professionals has elected a new leader. Jide Ojo, who is general manager of Exploration for Addax’s Nigerian subsidiaries, is the new President of the Nigerian Association of Petroleum Exlorationists (NAPE).

Established in 1975, NAPE has grown over the years into the foremost Oil and Gas geoscience professional organisation and has consistently taken a central role in influencing policy decisions. The association also sustains a platform for individuals as well as corporate entities to further both socio-strategic and technical interactions to leverage competitive advantage in the Oil and Gas industry. NAPE membership transcends academia as well as the Oil & Gas, Mining and Energy sectors within and outside Nigeria. The Association is an affiliate of the American Association of Petroleum Geologists (AAPG) and is supported by a large number of corporate entities which champion its programmes.

A graduate of the University of Ibadan, Jide Ojo served as NAPE’s Vice-President and Ex-Officio member from 1996 to 1997. In 2010, he became the President-Elect of the Association as well as the Chairman, of the Planning Committee of the recently concluded Regional Deepwater Offshore West Africa Conference.

This event, a collaboration between the Nigerian Association of Petroleum Explorationists (NAPE) and the American Association of Petroleum Geologists  (AAPG), featured workshops, oral as well as poster presentations and short courses which focused on successes, challenges and future prospects of the West African deepwater and ultra deepwater terrains. The five-day programme was attended by over 1,000 leading global industry players and stakeholders.

Mr. Ojo is a certified  Petroleum Geologist with over 30 years of local and international work  experience in the Oil and Gas industry.

Ogunbiyi Takes Hold Of FHN

First Hydrocarbon Nigeria Limited has appointed Constantine ‘Labi’ Ogunbiyi as Chief Executive of the  Company.  FHN was established in 2009 by Afren, the UK listed operator and some Nigerian partners, with the objective of increasing indigenous involvement in the upstream sector of the oil and gas industry by acquiring and developing substantial oil and gas assets in Nigeria from the joint ventures between the Nigerian government and international operating companies. The Company has announced its initial acquisition, subject to regulatory and government approval, of the Oil Mining Lease(OML) 26 from the Shell Petroleum Development Corporation (SPDC) Joint Venture in October 2010.

Mr Ogunbiyi was appointed following a request from the company’s Board of Directors to Afren Plc that he be released to focus on the growth and development of FHN, as the Company seeks to establish itself as a leading indigenous player in the upstream oil and gas sector in Nigeria.

Constantine Ogunbiyi became an Executive Director of Afren on 3rd January 2008 and was part of the management team that established the Company in late 2004. In his role as Executive Director he was responsible for business development, growth and strategy at the Company and was instrumental in the establishment of FHN, its capital raising efforts and its subsequent acquisition of an interest in OML 26 In Nigeria.

NDPR Achieves First Diesel

Nigerian independent, Niger Delta Petroleum Resources, commenced production of diesel oil a week to Christmas 2010. The product has specific gravity of 850kg/ m3 and flash point ranging between 6668oC to tank.

NDPR feeds 800 Barrels of Oil Per Day from its daily crude oil production of roughly 5,000BOPD to the diesel topping plant, located in its flowstation on its Ogbelle oil field in eastern Nigeria.

“A Joint Chemex(contractor) and NDPR teams continue to monitor and fine tune operating parameters until a steady state is reached”, the company said in a statement. “I am pleased to announce that our Company had, by this simple little achievement, now elevated itself, into the ‘one-in-class’ status of an Integrated Independent Nigerian Oil Company’ declared Layi Fatona, NDPR’s managing director, in an emailed message to staff. “First, to you all operating Staff at Ogbelle, I say Congratulations and well done! A Milestone, one so dear to my heart you all have helped and supported to deliver. To God, the biggest Gentleman out there and upstairs of our respective mind and abode, we all must praise, always, not just for giving us the good thoughts, but the ability and will to execute. For his grace and the state of our individual health, I continue to be eternally grateful to him.”. It was a very Nigerian official message.

Circle Gets Closer To The Magical 10,000BOPD

Circle Oil, the LSE listed minnow, is inching close to 10,000 barrels of oil per day (BOPD) in its only producing concession on the continent. The company placed the Al Ola-1X discovery well, in Egypt’s NW Gemsa Lease, on stream after perforating an interval in the Kareem Rahmi sand and flowing at approximately 1,400 BOPD on a 28/64”choke. The overall production from the Geyad and Al Amir SE fields, on the same lease, was over 8,500 BOPD as of late December 2010. These production levels are now being managed to allow the planned water injection wells to be drilled and the waterflood to become fully operational. “As previously announced, for an interim period, production is expected to be 7,000-8,000 BOPD after which oil production levels will be systematically and incrementa1ly increased together with the planned gas production once the waterfiood is in full operation. Further development drilling is also envisaged with the drilling of Geyad-3.

The Al Amir SE-7X water injector was spud on November 27, 2010 and was drilling ahead (08:00 hrs, 19 Dec 2010) in the Belayim Formation at a depth of 2,645metres(8,677 ft) MD. This well was also planned to drill deeper to test the Lower Rudeis potential previously identified in wells A1 Amir SE 6 and Al Ola-1X.

Centrica Boss Moves On To SEPLAT

Stuart Connal, who, only last June was briefing the press about the changes in status of Centrica’s operations in Nigeria, is now working for SEPLAT. The former managing director of the Nigerian subsidiary of the British Gas company resumed as the Chief Operating Officer at the Nigerian Independent, around November 2010. He reports directly to Austin Avuru, SEPLAT’s CEO and Managing Director. Connal is well liked by the Nigerian media, who find him easily accessible and engaging.

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