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ENI Grabs More Assets in Algeria, as bp Eases Out

Nine years after Islamist militants took 41 foreigners hostage in a deadly raid on a gas field operated by bp in southern Algeria, the British producer has decided to give it all up.

Italian explorer ENI has agreed to acquire bp business in Algeria, including the two gas-producing concessions “In Amenas” and “In Salah” (45.89% and 33.15% working interest respectively).

The transaction is subject to the approvals of the competent authorities.

The “In Amenas” and “In Salah” assets, which are jointly operated with Sonatrach and Equinor, are located in the Southern Sahara and their production of gas and associated liquids began in 2006 and 2004 respectively. In 2021 they produced approximately 11Billion cubic metres of gas, 12Million barrels of condensates and LPG.

“This acquisition has a great strategic value to further contribute to Europe’s gas needs and further strengthens ENI presence in Algeria, a major gas producer and a key country in for ENI”, the company says in a release. The deal “will allow ENI to increase its portfolio of assets in the country and, jointly with the new contracts of Berkine South and Block 404/208 recently signed, will allow new and synergic development opportunities, mainly focused on increasing gas production”.

Following these acquisitions and the development programs underway in the Berkine basin, in 2023 ENI’s production from Algeria will rise to over 120,000 barrels of oil equivalent per day, further confirming ENI as the main international energy company operating in the country.

 


TGS Finalises the Takeover of ION Geophysical

TGS has announced the closure of its acquisition of the multi-client and processing business of ION Geophysical Corporation (ION).

The purchase “includes substantially all of ION’s global offshore multi-client data library, data processing and imaging capabilities, intellectual property, and Gemini Extended Frequency Source technology and equipment”, TGS said in a statement.

The transaction was concluded as part of ION’s bankruptcy process in the United States Bankruptcy Court for the Southern District of Texas.

ION’s data library consists of over 637,000 kilometres of 2D and over 317,000 square kilometres of 3D multi-client seismic data in major offshore petroleum provinces globally, generating revenues in excess of USD 86M in 2021.

“TGS funded the acquisition from its current cash holdings and employed over 60 ION employees associated with the acquired business as part of the transaction”.

TGS has been in acquisitive mode for over three years. In 2019, acquired a keen rival, Spectrum Geophysical.

Kristian Johansen, CEO at TGS, said the company was “excited about taking over another quality data library, particularly in the South Atlantic”, and pleased to add strong capabilities to our processing business in terms of software, hardware, imaging technologies and people.

 


FAR Takes All in The Gambia, Looks for Well Heeled Partners

In spite of two disappointing dry holes in the space of three years, Australian minnow FAR has taken 100% ownership in two Blocks in The Gambia.

FAR Ltd has  acquired an additional 50% interest in Block A5, where it sank money in Samo-1 and Bambo-1 and Block A2, both offshore the Northwest African country.

The interest was acquired from Petroliam Nasional Berhad (PETRONAS), the Malaysian state hydrocarbon company which had co-financed the two wells.

But while FAR takes up all the stakes, it “has initiated a process to find partners to fund the forward exploration programme” and convinced its host Government to remove the Commitment to drill an exploration well during the next two-year contract term

FAR keeps seeing its disappointing drill programme in the Gambia in bright terms: “new laboratory analysis has positive implications for the Panthera Prospect directly up-dip of Bambo-1”, the company explains.

FAR shook up its executive management in March 2022, ousting its CEO Catherine Norman and replacing her with Independent Chairman Patrick O’Connor to oversee the business during a period of transition and “bringing in fresh perspective”.  The next two-year license term for Blocks A2 and A5 is due to commence on 1 October 2022 and “the removal of the commitment to drill an exploration well results in a significant reduction in expenditure and allows for a detailed geoscience review incorporating the results of the recent Samo-1 and Bambo-1 wells to ensure future exploration wells are located optimally”.

Data room Opened

FAR says it has opened a data room “for suitably qualified parties to consider participation in a Joint Venture to undertake the geoscience review and ultimately to drill additional exploration wells. FAR expects new partners to fund the costs of the work programme”, adding that “subject to the satisfaction of certain conditions, including Government approval, incoming participants in the Joint Venture may assume Operatorship.

“The 100% interest in Blocks A2 and A5 and the revised investment obligation enhances FAR’s ability to seek farm-in partners to the project while controlling any potential corporate action and process”.

 


Norwegian Operator Grabs a Stake in Cote d’Ivoire’s top Hydrocarbon Asset

DNO ASA, the Norwegian oil and gas operator, has entered into a transaction agreement in which RAK Petroleum plc will transfer its ownership of Mondoil Enterprises LLC to DNO. The all-share transaction comprises Mondoil Enterprises’ 33.33% indirect interest in privately-held Foxtrot International LDC whose principal assets are operated stakes in offshore production of gas and associated liquids in Côte d’Ivoire, forming a bridgehead for DNO in West Africa.

“The move into Côte d’Ivoire is an important first step into a highly prospective region offering a broad set of growth opportunities through acquisition of producing fields, development assets and exploration licenses,” said Bjørn Dale, DNO’s Managing Director. The Company is already evaluating other opportunities in the region, he added.

Foxtrot International holds a 27.27% interest in and operatorship of Block CI-27 offshore Côte d’Ivoire containing the country’s largest reserves of gas, produced together with condensate and oil, from four offshore fields tied back to two fixed platforms, meeting more than three-quarters of the country’s gas needs. Foxtrot International also operates an exploration license offshore Côte d’Ivoire, Block CI-12, in which it holds a 24% interest.

In addition to the Foxtrot gas field, which began production in 1999, Block CI-27 contains the Mahi gas field, developed in 2012, as well as the Marlin oil and gas field and the Manta gas field which began production in 2016, following a four-year, $1Billion development campaign by the joint venture. Gas produced from these fields is transported by pipeline to fuel power stations in Abidjan pursuant to a gas sale and purchase (take-or-pay) agreement put into force in June 1999 and subsequently increased to 140 million cubic feet per day with a base price of $ 6.00 per MMBtu, subject to an indexation formula which has lifted the current price to $ 6.47 per MMBtu.

This asset is big deal: In early 2020, the Block CI-27 joint venture embarked on a two-year, $350Million field development and onshore facilities construction project to supply gas to two new power stations

In early 2020, in connection with the signature of amendments and extension of the production sharing contract and the gas sales agreement to 2034, the Block CI-27 joint venture embarked on a two-year, $350Million field development and onshore facilities construction project to supply gas to two new power stations. Cash flow from operations have funded these capital investments. This work is nearing completion following the drilling of three new and two side-track wells; the last well in the programme, a side-track, is currently progressing.

This additional processing and well capacity are slated to increase gas supply to over 230 million cubic feet per day, subject to electricity sector demand and well performance. Drilling of up to another two wells over the period of the extension is planned to maintain the higher production capacity of the license. During the first half of 2022, gross sales averaged 200Million cubic feet of gas and 1,500 barrels of oil and condensate per day. Oil and condensate (and limited quantities of gas) are sold to the local refinery at arms-length prices. www.foxtrot-international.com

The effective date of the transaction is 1 January 2022 and the agreed consideration is $ 117.25Million, covering transfer of 100% of Mondoil Enterprises share capital valued at $ 95Million, comprising 9.09% indirect working interest in Block CI-27 and 8% in Block CI-12 both held through the ownership in Foxtrot International, and $ 22.25Million including $ 21Million in cash and $ 1.25Million in working capital.

Completion of the transaction is conditional upon shareholder approval at an extraordinary general meeting of DNO resolving to issue the consideration shares. The formal notice of the extraordinary general meeting of DNO to be held on 13 September 2022 is attached and provides further information on the proceedings as well as a description of the terms and conditions of the transaction agreement. RAK Petroleum, too, will hold an extraordinary general meeting to seek shareholder approval of the capital repayment plan.

DNO says it has conducted a due diligence of the assets to be acquired supported by third-party assessment of reserves and resources. The transaction has been negotiated by the independent members of DNO’s Board of Directors who, in addition to the attractive business merits also considered the advantage of increasing the Company’s free float to attract institutional investors and of augmenting DNO’s gas exposure to reduce its carbon footprint. Pareto Securities AS has been retained as financial advisor to DNO and has provided the independent directors with a fairness opinion.

 

 


Chevron, Namibia’s First Hydrocarbon Finder, Plots a Return

By Toyin Akinosho, Publisher

The news is still in the realm of speculations, but if Chevron takes an operatorship stake in an ultra-deepwater block north of Shell and TOTALEnergies’ recent discoveries, offshore Namibia, it will be returning to a country it left over 40 years ago.

Chevron made the first discovery in Namibia with Kudu 9A, in 1974, two years after the country’s first licencing round. The geologic complexity of the Kudu field, as well as the United Nation’s sanctions against the ruling South African apartheid govenment, pushed the American giant away.

Fortuitously, for all those four decades, explorers never encountered any significant hydrocarbon prospect in the south west African country, until the last two years, when a raft of discoveries suddenly started to happen.

If Chevron takes equity in either Block 2813A (Petroleum Exploration Licence (PEL) 83, or/and Block 2813B., it would be following the footsteps of Shell, the UK major, as a returnee.

Shell took over operatorship of the storied Kudu field long after Chevron and left the asset and country in 2002, after its plans for a Floating LNG collapsed on account of inadequate reserves volume.

Shell’s return as an explorer in Namibia’s offshore, in 2014, was tied to its geoscience thinking about the prospectivity of South Africa’s deepwater Orange Basin, which straddles Namibia. Shell’s three South African acreages (at the time) were sited just south of its Namibian acreages.

It is instructive that Blocks 2813A and 2813B, which Chevron is reportedly interested in, lie west of the Kudu field, which BWEnergy is now operating.

 

 

 


Azule Energy: Can the union of Two Majors be termed an Independent?

By Adeniyi Adeoloye

Mergers in the oil industry have a long history. The break-up of Standard Oil and the attendant amalgamations of forerunner companies to forming the 7 sisters are perfect examples of mergers in the days of old. When they are done, such coalitions allow partnering companies to pull resources together to deepen expertise and grow competitive advantage. This thinking is reinforced by Claudio Descalzi, CEO of the Italian major ENI with his take on the creation of Azule Energy – “a new, strong entity is born, which combines our experience, skills and technologies with those of our partner bp, putting them at the service of the development of Angolan energy resources, with a priority commitment to environmental protection and the growth of the economy.”

Many mergers have happened in the oil industry, but most have been in such a way that the union is recorded across the global operations of the entities concerned. So it is interesting to see Azule Energy, a child of two European majors after combining their entire operations in Angola, to mint a new company, with both parties having 50:50 equity shares have a merger that is only limited to Angola and no other jurisdictions where bp and ENI operates.

Before the coming together, bp’s entire production in the year 2021 was roughly 100,000 barrels of oil equivalent per day(BOEPD), whilst ENI, its equity partner in Azule Energy did 120,000BOEPD. Prior, French major, TOTALEnergies prided herself as number one operator in Angola given her output of 175,000BOEPD 2021, 212,000BOEPD in 2020 and 232,000BOEPD in 2019. The 2021 production of TotalEnergies is some 17% decrease compared to her output in year 2020 and a further 24% contraction in contrast to the throughput of 2019.

The newly formed Azule Energy which claims to be Angola largest independent holds 2 billion barrels of net resources with an ambition to grow production to 250kboe/d in the next five years from the current net of  about 220kboe/d that was produced by Eni and bp in 2021.

Going by the average production of TOTALEnergies in Angola between 2019 and 2021, and particularly if it ramps up production to hit the scope of what it achieved in 2019; in addition to projects it is having in the pipeline like Begonia whose FID has been taken and commissioning expected in 2024 with planned output of 30,000BOPD, the Quiluma and Maboqueiro non associated natural gas projects with first gas scheduled for 2026, and the ramping up of Zinia phase 2 project to pump 40,000 bopd, it is clear that the claim to leadership by the newly minted Azule Energy’s  total production will be severely tested, if not pushed aside by o the French energy giant by 2027, when Azule is looking to achieve 250,000BOEPD. Could this be why bp and ENI chose to call their new company “Angola’s largest independent”?

Adeoloye,  a Dublin based petroleum geoscientist, is a frequent contributor to Africa Oil+Gas Report

 


Seplat/ExxonMobil Deal: Intra Government Public Spat Projects Poor Optics for Investment  

By the Editorial Board of Africa Oil+Gas Report

The public exhibition of disagreement between various agencies of the Nigerian government over the ExxonMobil/Seplat Energy share acquisition reinforces a troubling image for the country’s investment climate.

In the space of three hours, three press releases had gone out to the media, two of them declaring that ministerial consent had been granted and one clearly saying ‘no’ with some ambiguity.

In the afternoon of August 8, 2022, a press statement by the media aide to President Muhammadu Buhari declared that the president, as Minister of Petroleum Resources, had “consented to the acquisition of ExxonMobil shares in the United States of America by Seplat Energy Offshore Limited”.

That statement, coming from the office of the highest office in the land, seemed so sacrosanct that industry watchers were declaring victory for orderly exit of International Oil Companies from the Nigerian E& sector.

A ministerial consent for E&P asset sale, delivered in six months, would be one of the fastest in Nigeria’s recent history.

The content of the statement from the Presidency was the core material in the news stories by global news agencies Bloomberg and Reuters.

Seplat Energy’s external affairs directorate corroborated the Presidency statement, but in what must be seen as an important data point, the company’s statement declared it had received “a letter from the Honourable Minister of State for Petroleum Resources notifying Seplat Energy that His Excellency, President Muhammadu Buhari has graciously approved that Ministerial Consent be granted to Seplat Energy Offshore Limited’s cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited from its shareholders, Mobil Development Nigeria Inc and Mobil Exploration Nigeria Inc, being entities of Exxon Mobil Corporation registered in Delaware, USA (ExxonMobil).

So there. There had been a statement from the presidency and a letter from the Minister of State for Petroleum.

But just about the close of business, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) sent out a statement that at once contradicted those from the Presidency and the Minister of State but left open, doubts as to the conclusion of the transaction. “The Chief Executive of the NUPRC Engr. Gbenga Komolafe clarified that the Commission in line with the provisions of the Petroleum Industry Act 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector”, the Commission stated, adding, “the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard. As such the Commission further affirms that the status quo remains”.

Even as the Commission talked of commitment “to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector”, it is hard for anyone to read its statement, check with the others, and conclude that this is a “predictable regulatory environment”.

 

 

 


With Oza Back On Stream, Wade Cherwayko Returns to Nigerian Activity

The report of the revamped production on the Oza field, onshore eastern Nigeria, effectively announces the return of Wade Cherwaycko to the country’s oilfield activity.

Cherwayko is the spine behind Decklar Resources, the Toronto listed firm which has taken control of three marginal fields in Nigeria in the last three years.

The Oza field was the first asset the company moved on to, when in April 2019, it concluded an RFTSA with Millenium Oil &Gas, operator of Oza Field (one of the marginal fields awarded in 2004).

After re-entry into Oza-1 well, which had been produced sub optimally  by Millenium Oil& Gas  Decklar Resources announced resumption of production at Oza, at an averaged, stabilized production rate of 1,184 barrels of oil per day (BOPD) of 23 degree API sweet crude oil and flowing tubing head pressure of 400 psig with zero BS&W and an average gas oil ratio of 71 mcf/bbl. Production flows into storage tanks at the Oza Oil Field and then will be delivered by truck to the Umugini Pipeline Infrastructure Limited crude handling facilities.

The Asaramatoru field is the second field in Decklar’s basket. In July 2021, the Canadian minnow announced the completion of a Share Purchase Agreement to purchase all of the issued and outstanding ordinary shares of Purion Energy Limited, a Nigerian entity that had entered into a RFTSA with Prime Exploration and Production Limited, the Operator of the Asaramatoru Oil Field.

In June 2022, Decklar announced the purchase of all of the issued and outstanding ordinary shares of Westfield, a Nigerian entity that had entered into a Risk Finance and Technical Services Agreement (RFTSA) with Erebiina Energy Resources Limited to participate in the Emohua Field in Nigeria, located in Oil Mining Lease (OML) 22, onshore eastern Nigeria.

What these deals mean is that Decklar Resources Inc is targeting a list of Nigerian independents struggling with financing and technical capability to continue developing their assets.

The striking thing is that the holders of Emohua field were only granted the licence to the field in late June 2022, as the field is one of those in the just concluded 2020 Marginal field bid round.

What these deals mean is that Decklar Resources Inc is targeting a list of Nigerian independents struggling with financing and technical capability to continue developing their assets.

This role is reminiscent of what Mart Resources, an earlier vehicle that Mr. Cherwayko championed, played in the Nigerian oil industry in the 2000s.

Indeed, Wade Cherwayko first showed up in Nigeria in the early 1990s, with his Toronto-listed minnow, Abacan Resources, with which he farmed into two Nigerian offshore licences. The company eventually went belly-up. He reappeared in 2003 during the first marginal fields bid round and farmed in and funded four marginal fields, the star one of which was the Umusadege Field, won by Midwestern Oil and Gas Limited. He and his Mart Resources brought the field to a peak production of 27,000Barrels of Oil Per Day. He eventually collapsed Mart into MidWestern and, together with other investors, they founded Eroton, which won the bid (jointly with Sahara Energy) to acquire Oil Mining Lease (OML) 18 from the Shell partnership in 2015. With that deal, Cherwayko moved far away from the nuts and bolts of things. He returned to the  Marginal Fields terrain in 2019 with another Toronto-listed minnow, Decklar Resources. The success of Decklar in Oza’s revamp is a statement. Cherwayko is signaling: watch this space

This article was adapted from a piece published two months ago in the May 2022 edition of the Africa Oil+Gas Report.


Bid Round: Mozambique Drops AITEO From Contention

12 of the 13 companies which participated in Mozambique’s Sixth Licencing Round, launched in November 2021, were prequalified.

The only one who didn’t make it was the Nigerian owned AITEO Eastern Exploration and Production Company Limited, who was dropped for not meeting the pre-qualification requirements.

Sasol of South Africa, the only other Africa headquartered company in the bid round-apart from AITEO-made it to the next round.

The results will be announced before the end of January 2023.

The National Petroleum Institute (INP), Mozambique’s regulatory agency, says six of the pre-qualified companies are operators and the rest non-operators.

The operators include: China National Offshore Oil Corporation (CNOOC) Hong Kong Holding Limited, ENI Mozambico SPA, ExxonMobil Mozambique (Offshore) Limited, Petro-China International, Iraq FZE and TOTALEnergies Ep New Venture. Non-operating companies include RN Angoche PTE, Joint Stock Company Novatek, Qatar Petroleum Mozambique Limited, Sasol Africa (PTY) Limited, ONGC Videsh Limited and Discover Exploration Limited.

 

 


ENI Claims Azule Energy is Angola’s Largest Hydrocarbon Producer

Italian explorer ENI has announced the completion of the incorporated joint venture of bp and ENI.assets and operations in Angola.

Azule Energy, as it is called “is now Angola’s largest independent equity producer of oil and gas, holding 2Billion barrels equivalent of net resources and growing to about 250,000 barrels equivalent a day (boe/d) of equity oil and gas production over the next 5 years”.

The new company holds stakes in 16 licences (of which six are exploration blocks) and a participation in Angola LNG JV. Azule Energy will also take over ENI’s share in Solenova, a solar company jointly held with Sonangol, and the collaboration in the Luanda Refinery.

Azule Energy boasts a strong pipeline of new projects that are scheduled to come on stream over the next few years, growing organically from exploration discoveries. These include the Agogo Full Field and PAJ oil projects in Blocks 15/06 and 31 respectively, and the New Gas Consortium (NGC), the first non-associated gas project in the country, which will support the energy needs of Angola’s growing economy and strengthen its role as a global LNG exporter. The JV also holds significant exploration acreage in excess of 30,000 sqkm in Angola’s most prolific basins, allowing it to leverage proximity with existing infrastructures.

Azule Energy’s leadership team draws on experience and expertise from both parent companies. The leadership team will report to a six-person board comprising three bp and three Eni representatives, reflecting the ownership share of the company. All bp Angola and ENI Angola staff have joined Azule Energy.

The JV incorporation takes place after the pending conditions were met, among them having secured a third-party financing of $2.5Billion in the form of Pre-Export Financing, and after receiving regulatory approvals.

After announcing the intent to form the joint venture in May 2021, bp and ENI worked closely with the Angolan government, and Azule Energy’s formation was subject to all customary governmental and other approvals.

 

 

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