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Afentra Wins Small, But the Sonangol Prize Is Still Out of Grasp

Afentra has reported that it has not yet concluded its acquisition of some of Sonangol’s asset in Angola, but it has won Government’s approval to acquire minor interests from a company named INA-Industrija d.d (INA).

The London headquartered independent has now, in the bag, 4% interest in Block 3/05 and 4% interest in Block 3/05A offshore Angola, pursuant to a sale and purchase agreement between INA and Afentra’s wholly-owned subsidiary, Afentra (Angola) Ltd, dated 19 July 2022.

While these properties are good to have, the chase for Sonangol’s equity in Block 3/05 (20%) and Block 23 (40%), is the big deal in Afentra’s sights. A 20% entry into Block 3/05 will give Afentra some 4,000Barrels of Oil Per Day on a net basis, going by the Block’s current output. The sale and purchase agreement for this transaction is subject to a number of conditions precedent, including the receipt of governmental approvals and the extension of the Block 3/05 Production Sharing Agreement until at least December 31, 2040. Afentra says it “remains in discussion with all relevant parties in this regard, as the Block 3/05 contractor group continues to progress conversations with the ANPG, the country’s oil and gas regulatory body”.

Afentra discloses that it has agreed with Sonangol to extend the long-stop date from 31 December 2022 to 31 March 2023. “The receipt of approval from the Ministry of Mineral Resources, Oil and Gas for the INA Acquisition is a key step in this process and we now look forward to completing the acquisition in the coming weeks. It will mark our entry into Angola and the first of two highly complementary acquisitions that will provide Afentra with a strong growth platform, underpinned by robust cash flow and significant potential to deliver upside value. It will also mark the inception of our partnership with Sonangol in Blocks 3/05 and 3/05A where we intend to work closely with Sonangol to optimise production and to extend the life of this quality, long-life asset.”


ENI Finalises Its Partial Sale in Algeria-Italy Gas Pipelines to Snam

Italian major ENI has announced the closing of Snam’s acquisition of a 49.9% of the equity interest directly and indirectly held by ENI in the companies operating two groups of international gas pipelines connecting Algeria to Italy.

Snam S.p.A. is an Italian energy infrastructure company.

The scope of the transaction includes the onshore gas pipelines running from the Algeria and Tunisia borders to the Tunisian coast (TTPC), and the offshore gas pipelines connecting the Tunisian coast to Italy (TMPC) [1].

These ownership interests were transferred by ENI to a new company (SeaCorridor S.r.l.), of which Snam has acquired 49.9% of the share capital, while the remaining 50.1% continues to be held by ENI. ENI and Snam will exercise joint control of SeaCorridor under joint governance arrangements.

Snam paid ENI a total consideration of about 405 million euros in the transaction [2].

“The transaction leverages ENI’s and Snam’s respective areas of expertise in gas transport on a strategic route for the security of Italy’s natural gas supply”, ENI says in a statement, “enabling potential development initiatives within the hydrogen value chain also thanks to the natural resources North Africa has to offer. The North Africa – Europe link is a key element of progressive decarbonisation at the international level in support of the energy transition.

“The transaction has obtained the authorisations envisaged under antitrust legislation and so-called golden power legislation, consent from the Tunisian government as well as the approval of the shareholders and corporate bodies of the various target companies”.

 

 


Moza Bid Round: China Gets Five Out of Six Awarded Blocks

China´s state owned behemoth, CNOOC (China National Offshore Oil Corporation), has been awarded exploration rights to five out of the six hydrocarbon blocks offered in Mozambique’s sixth licencing round.

ENI, the aggressive Italian major, was awarded one block.

No bids were made for ten of the sixteen offshore blocks which were offered in the round, launched in November 2021.

Bidders even ignored the two blocks in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, which are adjacent to Areas 1 & 4, known to host over 100Trillion cubic feet of gas (proven).

Mozambique’s National Petroleum Institute (INP), the country’s upstream hydrocarbon regulator, is superintending the sale.

Three of the blocks granted to CNOOC (A6-R, A6-E and A6-G) are all in Angoche Basin, in the region of Angoche, off the coast of Nampula province.

The other two (S6-A and S6-B) are in the Save region, off the coast of Inhambane, and near the mouth of the river Save.

The sixth block (A6-C), awarded to ENI, is also in the Angoche region.

INP says that the work programmes proposed by CNOOC and ENI for the first period of exploration will allow investments of around $370Million, including the drilling of at least four wells.

 


Nigeria Wants to Know Who Own the Companies That Produce Her Oil

By Sully Manope, in Abuja

Industry regulator issues a no-holds- barred directive on Beneficial Ownership Register

The Nigerian Upstream Petroleum Regulatory Commission NUPRC has issued a requirement to “all entities that apply for or hold a participating interest in an exploration or production oil and gas license, lease or contract (“relevant persons”) to provide information of their owners, including the identity(ies) of their beneficial owner(s), the level of ownership and details about how that ownership or control is exerted”.

With this announcement, the regulator, as empowered by the Petroleum Industry Act (PIA), has waded into the Beneficial Ownership issue, taking the initiative from the Nigerian Extractive Industry Transparency Initiative (NEITI).

The Transparency watchdog had, in its last report (2020), lamented that companies were not responding to its call to them to provide the relevant information.

NEITI noted that it had designed a Beneficial Ownership Data template to collect information from companies. Copies of the template were sent to all the covered companies and only 32 companies provided all the information required in the templates. “11 companies did not provide any information on beneficial ownership while 26 did not provide complete information, most especially the owners (natural persons) of the companies”, NEITI says in that report, which is now two years outdated. “Most of the companies that submitted BO information provided the required attestation by a senior management officer or senior legal counsel of the company as to the validity of the information provided”.

The NUPRC declared in an end of year statement: ”all relevant persons are hereby required to provide the information of persons with significant control over them”.

The regulator describes a “person with significant control” as one who:

    • directly or indirectly holding at least 5% of the shares or interest in a relevant person;
    • directly or indirectly holding at least 5% of the voting rights in a relevant person;
    • directly or indirectly holding the right to appoint or remove a majority of the directors or partners in a relevant person;
    • otherwise having the right to exercise or actually exercising significant influence or control over a relevant person; or
    • having the right to exercise, or actually exercising significant influence or control over the activities of a trust or firm, whether or not it is a legal entity, but would itself satisfy any of the first four conditions above if it were an individual.

NUPRC also says that the information shall be provided using the BENEFICIAL OWNERSHIP DECLARATION FORM

The upstream regulator says: “All current holders of participating interest in an exploration or production oil and gas license, lease or contract are hereby required to fill the BENEFICIAL OWNERSHIP DECLARATION FORM and send to the Commission at bor@nuprc.gov.ng not later than seven (7) days from the date of this notification.

“All entities that henceforth apply for participating interest in an exploration or production oil and gas license, lease or contract shall also be required to fill the BENEFICIAL OWNERSHIP DECLARATION FORM and submit with their application.

“Notice of change in persons in significant control over a relevant person shall be provided by the relevant person within 30 days of the change using the CHANGE IN BENEFICIAL OWNERSHIP DECLARATION FORM”.

 

 


Egypt Will Offer 12 Blocks for Gas Exploration

Egyptian Natural Gas Holding Company (EGAS), is expected to launch Energy companies can bid for 12 new oil and gas exploration blocks latest by the first week of January 2023.

The bid offering will close by the end of second quarter 2023.

It will cover concessions in the Western Desert and the Mediterranean, where a host of gas fields have been discovered by BP, ENI and latterly Chevron, in the last seven years.

Egypt is a perennial launcher of bid rounds.

The country’s last tender, concluded barely six months ago, witnessed seven international energy companies win eight of the 24 oil and gas exploration blocks that were up for sale.  in the tender, and. BP, ENI, Apex International, Energean Egypt, United Energy, Ukraine’s INA Naftaplin, and Chile’s Enap Sipetrol all received blocks in the tender.

 

 


Somoil Grabs Even More

Angola’s largest homegrown E&P firm, Somoil, has agreed to increase its equity position in one acreage, even as it waits for government approval to acquire stakes in three others.

Somoil will purchase the 2.5% interest belonging to Indonesian state hydrocarbon company PTTEP in TOTALEnergies operated Block 17/06 project offshore Angola. Completion of the sale is expected by mid-2023, subject to the conditions prescribed in the sale and purchase agreement (SPA).

Somoil currently has at least 10% stake in each of six blocks, including 2/05, 3/05, 3/05A, 4/05, 14, FS/FST, all of them producing assets. Block 17/06, which is the seventh is under development.

Somoil’s net daily output in these properties collectively ranges from 10,000BOPD to 15,000BOPD, an outlying performance among Angolan indigenous players.

Somoil is currently, in partnership with Sirius Petroleum, in the process of acquiring, from state owned Sonangol, participating interests of 8.28% and 10% respectively in Blocks 18 and 31 (producing blocks) and a 25% participating interest in the exploration Block 27, for a total consideration of $335.5Million.

If that deal, which is far gone, is consummated by mid 2023 as anticipated, Somoil will have a position in 10 acreages in Angola, eight of which are producers.

Neither Somoil, nor PTTEP has disclosed the sum for which Somoil will purchase PTTEP’s  2.5% participating interest in Block 17/06. What’s clear is that the Block is host to the Begonia oilfield, currently under-development by French supermajor TOTALEnergies, who is the operator. Located in water depths of up to 750 metres, Begonia will be exploited as a subsea tie-back to TOTALlEnergies’ Pazflor floating production, storage and offloading vessel on adjacent Block 17. The Begonia project, which is expected to cost $850Million, will deliver about 30,000 barrels per day of crude.

 


Sirius, with Funds in Hand, Takes Over Management of Abura Field Redevelopment

Sirius has now fulfilled all conditions needed to access the funding facility for the planned redevelopment of the Abura field in Oil Mining Lease (OML) 65, and will assume key senior management positions within CMESOMS Petroleum Development Company (COPDC) Limited, the organization which “owns” the project.

Sirius holds 30% in COPDC, who in turn has a Finance and Technical Sales Agreement (FTSA) with NNPC Ltd, the licenceholder of OML 65. But Sirius is the one bringing the finances, as well as technical and managerial expertise, to the project.

With these credentials, Sirius takes fuller control of OML 65 redevelopment, with its executives assuming the positions of Managing Director, Finance Director, Executive Director, and Vice-Chairman of COPDC “and will immediately begin to accumulate cash flow entitlements related to the assumption of operational responsibility for existing production at the Abura field”.

Following the approvals previously secured from NNPC regarding the commencement of Phase 1 of the OML65 Approved Work Programme (AWP), Sirius can now start drawing down funds under the senior loan facility of up to $200Million, executed with (the commodity trader) Trafigura, to finance the well drilling, re-entry and completion in OML 65, notably the Abura field, to boost production by as high as 11,000Barrels of Oil Per Day, to reach, around 16,000BOPD.

The project has come a long way, even though it is yet to take off.

The context: In 2019, COPDC, the Nigerian E&P company founded by Hosa Okunbor, who was very well connected to President Muhammadu Buhari, secured an FTSA with the Nigerian Petroleum Development Company (NPDC), an NNPC subsidiary which holds the right to OML 65, located onshore mid-western Nigeria, in the Niger Delta basin.  COPDC had never operated an E&P asset before it was granted the FTSA, a deal it clinched largely as a result of political connections of its principal.

Sirius Petroleum, as of then, was desperate to get in on the action on any bankable hydrocarbon project. The OML 65 revamp, as it were, has provided it the first real opportunity for relevance.

Phase 1 of the AWP will be undertaken in conjunction with Baker Hughes under a Master Services Agreement (“MSA”) which has been executed with Sirius, and will involve the drilling of up to nine wells on the Abura field, intended to produce the remaining 2P reserves of 16.2 MMbbl1.


Afentra’s Angola Acquisition: So Far, Still Far

By Sully Manupe, in Windhoek

Afentra has made significant progress trying to win upstream assets in Angola. But the company admits that none of the two deals leading to ownership is likely to be consummated by December 31, 2022.

The sale and purchase agreement with Sonangol Pesquisa e Producao S.A. (Sonangol) to purchase non-operating interests in offshore Block 3/05 (20%) and Block 23 (40%), is subject to a number of conditions precedent (the ‘CPs’), including the receipt of governmental approvals and the extension of the Block 3/05 Production Sharing Agreement until at least December 31, 2040. The Company remains in discussion with all relevant parties in this regard, as the Block 3/05 contractor group continues to progress conversations with the  ANPG, the country’s oil and gas regulatory body, Afentra notes in a release. “Nevertheless, the PSA extension is now unlikely to be finalised before December 31, 2022 and the Company, together with Sonangol, are working on extending the long stop date for the Sonangol Acquisition in order to facilitate satisfaction of the remaining CPs to enable completion in Q1 2023”.

Afentra also signed an SPA with INA – Industrija Nafte d.d. (‘INA’) to purchase a 4% interest in Block 3/05 and an up to 5.33% interest in Block 3/05A offshore Angola (the ‘INA Acquisition’). ”The transaction is now with the Ministry awaiting Governmental approval, and formal completion is anticipated to occur in early 2023”. In this particular case, “given the progress made to date, there is not considered to be any requirement to extend the long-stop date pursuant to the INA Acquisition at this time, as set out in the Company’s admission document”.

Afentra says that Block 3/05 “production for the first nine months of 2022 has been stable and in-line with expectation at 19,160Barrels of Oil Per Day (BOPD) gross. This is equivalent to ~4,600BOPD net to Afentra upon completion of the Sonangol and INA Acquisitions”. in due course.


Savannah Terminates SPA With PETRONAS in Chad, Cameroon

British producer Savannah Energy and Malaysian state-owned PETRONAS have mutually agreed to terminate the Sales and Purchase Agreement (SPA) for the latter’s Chad and Cameroon portfolios.

“Completion of the proposed acquisition remained subject to satisfaction of certain conditions precedent which has not yet been satisfied”, Savannah says in a statement, “and Savannah and PETRONAS have, therefore, mutually agreed to terminate the SPA with immediate effect”.

The agreement was initially announced exactly a year ago to the date of termination (December 13, 2021). Savannah signed an SPA with PETRONAS at the same time it did with ExxonMobil. The ExxonMobil sale has been concluded, but the PETRONAS transaction failed.

If both had been concluded, Savannah would be holding a 75% controlling interest in the Doba Oil Project and an effective c. 70% indirect controlling interest in the Chad-Cameroon export transportation system.

Instead, Savannah now owns a 40% interest in the Doba Oil Project (comprising interests in seven producing fields) with a combined gross 2P Reserve base of 142.3Million barrels (MMbbls) as of October 1, 2022 and expected 2022 gross production of 28, 000Barrels of Oil Per Day (BOPD) and an effective c. 40% indirect interest in the Chad-Cameroon export transportation system comprising a 1,081 km pipeline and the Kome Kribi 1 floating storage and offloading facility, offshore Cameroon.

The remaining 25% interest in the Doba Oil Project is held by the national oil company of Chad, SHT Petroleum Chad Company Limited (“SHT”). The remaining 30% interest in the Chad-Cameroon export transportation system is held indirectly by affiliates of SHT together with the Republic of Chad and the national oil company of Cameroon, Société Nationale Des Hydrocarbures. For reference, in 2020 the Doba Oil Project produced an average gross 33,700BOPD and the Chad-Cameroon pipeline transported a gross 129,200BOPD.


Tullow Chases the Same Fortune as ENI; Takes More Position in Cote D’Ivoire

By Marcus Michelangelo, in Accra

Tullow Oil has signed Production Sharing Contract for new offshore exploration licence in Côte d’Ivoire in order to chase leads in the country’s segment of the Tano Basin.

Tullow will operate the CI-803 licence with 90% equity, the remaining 10% is held by PetroCi. CI-803 covers an area of 1,345 square kilometres and is adjacent to licence CI-524 which is also held by Tullow (90%, operator) and PetroCi (10%).

Tullow produces hydrocarbon in the Ghana segment of the basin, but its forays in Cote D’Ivoire have not delivered commercial results.

In 2021, however, the Italian explorer ENI reported the discovery of a massive tank of oil and gas in their first wildcat in Côte d’Ivoire. Baleine-1X was drilled in 1,200metre water to a TD of 3445metres, targeting Cretaceous sands in the Tano,which is a Transform Margin.  The company currently carries a figure as high as 2Billion BOE as ultimate recoverable reserves in the Baleine Structure.

Tullow’s managers, clearly sat up and took notice. Houston based Vanco (now defunct) had held the acreage in 2007 and just fell short of drilling this major prospect, supported by amplitude and a large ‘gas cloud’, according to a report by GeoExpro. In 2013 and 2014Lukoil drilled the Capitaine EastIndependence and Orca fields nearby, finding sub-commercial volumes of oil in Upper Cretaceous sands, GeoExpro explains

Tullow’s management is convinced it can deploy the geoscientific skill sets that helped ENI to nail the Baleine mega structure. “Significant prospectivity has been identified within the proven Cretaceous turbidite plays, similar to the plays which are producing in the adjacent TEN and Jubilee Fields. The work programme for the initial two and a half years includes reprocessing of existing 3D seismic data, along with prospect evaluation. In CI-524, a number of drill candidates are being matured while preparations continue for an exploration well to be drilled during 2024”.

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