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Sonangol Would Have to Be Restructured Before Sale

State hydrocarbon firm Sonangol has not yet created the right conditions required for some of its equity to be sold in the ongoing privatization of Angola’s national assets.

One of such conditions include restructuring not only the company, but the (oil) sector in which Sonangol is involved “and as we know this restructuring is only just beginning”, according to Patrício Vilar,  chairman of the Board of Directors of the Institute for Management of State Assets and Holdings (IGAPE)

But he said that the state has kept Sonangol in its privatisation process in 2022.

Sonangol -owned assets make up about a quarter of the entire Privatisation bucket list.

The list includes divestments in the subsidiaries and assets of Sonangol Cabo Verde – Sociedade e Investimentos and Óleos de São Tomé and Príncipe, as well as stakes in Founton (Gibraltar), Sonatide Marine (Cayman Islands), Solo Properties Knightbridge (United Kingdom), Societé Ivoiriense de Raffinage (Cote d’Ivoire), Puma Energy Holdings (Singapore) and Sonandiets Services (Panama), by 2021.

Sonangol will sell also its stake in WTA-Houston Express and French company WTA, as well as assets in Portuguese real estate companies Puaça, Diraniproject III and Diraniproject V, in Sonacergy – Serviços e Construções, Sonafurt International Shipping and Atlantis Viagens e Turismo.

Sonangol also holds assets to be privatised in Angolan companies in the Health, Education, Transport, Telecommunications, Energy, Civil Construction, Mineral Resources and Oil and Banking sectors.

 

 


ENI and Sonatrach Agree to Pump 318Bcf/Year of Algerian Gas Through Transmed

Algeria’s state hydrocarbon company Sonatrach has signed an agreement with ENI, the Italian explorer which allows the latter to increase the volume of gas imported through the TransMed / Enrico Mattei pipeline “under the umbrella of the long term gas supply contract in place with Sonatrach starting from the next autumn”.

The deal was inked by the President of Sonatrach, Toufik Hakkar, and the CEO of ENI, Claudio Descalzi, in the presence of the Algerian President Abdelmadjid Tebboune and the Italian Prime Minister Mario Draghi.

This agreement will allow to exploit the pipeline’s available transportation capacities to ensure greater supply flexibility, gradually providing increasing volumes of gas from 2022, up to 9Billion cubic meters (Or 318Bllion cubic feet) per year in 2023-24.

“The signing took place during the visit of the Italian Prime Minister Mario Draghi to the President of the Democratic Republic of Algeria, Abdelmajid Tebboune, which also included a wider letter of intent to strengthen cooperation in the energy field signed by the Algerian Foreign Minister Ramtane Lamamra and the Italian Foreign Minister Luigi Di Maio on behalf of their respective Governments, in the presence of the Algerian Prime Minister, Aymen Benabderrahmane, the Algerian Minister of Energy Mohamed Arkab, and the Italian Minister for Energy Transition Roberto Cingolani”, a statement by ENI read.

“The agreement between ENI and Sonatrach, whose foundations have been laid during the previous visit of Descalzi and the Italian Foreign Minister Di Maio to Algiers last February 28, was defined and signed in record time following intense negotiations between the top management of the two companies”, ENI reported. “The new gas volumes covered by the agreement are also the result of the close collaboration in the development of upstream gas projects, leveraging Eni’s distinctive fast track model, which is bringing a significant acceleration to the production potential of the Algerian fields”.

 

 


Sirius, Petrolog, Afentra Move Closer to Purchase of Sonangol’s Producing Interests

Angolan state oil firm Sonangol, has selected 10 companies for purposes of farm down negotiations from six blocks in which it has interests.

Four of the blocks are producing; two are undeveloped.

Sonangol says that during a public tender it conducted between September 20, 2021 to January 27 of the current year, “due diligence process was carried out to verify the compliance of competitors, which resulted in the certification of a total of 10 companies, among which, under the terms of the said tender, were selected because they presented the best proposal as per information below: ´

  1. Blocks in Production:
  • Block 3/05 – Afentra (20%)
  • Block 15/06 – Namcor, Sequa and Petrolog (10%)
  • Block 18 – Somoil and Sirius (8,5%)
  • Block 31 – Somoil and Sirius (10%)
  1. Blocks in Exploration:
  • Block 23 – Namcor, Sequa and Petrolog (Operator 40%); and Afentra (40%)
  • Block 27 – Namcor, Sequa and Petrolog (35%); and Somoil and Sirius (25%)

“The partial farm down of participating interests, of the above-mentioned concessions, is part of Sonangol’s strategy of repositioning and sustainability of its investment portfolio”, the company says in a statement.


NUPRC Chief Frowns at “Trading Papers”

Gbenga Komolafe, Chief Executive of Nigerian Upstream Petroleum Regulatory Commission, has expressed displeasure at the predilection for assignment of rights to upstream assets by Nigerian licence holders.

“In many cases, the moment people get a letter of award, they write to say they want to assign”, he told Africa Oil+Gas Report in an interview.

“Assign what?”, he asked.  “There’s a phrase in law, frequently rendered in Latin: Nemo dat quod non habet meaning ‘You can’t give what you don’t have’. For you to get an award you have to show the proof that you can pay the signature bonus and you can finance the field development. You get it only because you’ve met the requirements. Your award would have been consummated before you can talk of assignment. We shouldn’t be encouraging people making money by trading papers”.

Komolafe, a career public servant, who was appointed to the job in September 2021, declared to AOGR that “what separates a fish seller from a proper industry person is the attitude to the development of the field or asset he is assigned”.

In the very brief interview, the first exclusive conversation he would have with any media enterprise, Komolafe declared again and again:

“We will not be arbitrary. Anyone whose licence is revoked during my tenure will not have a space to challenge. We will take a decision such that anyone challenging will be standing on very weak ground. You bring your field development programme. That programme is very key and our oversight of the programme will be guided by the finest points of the law”.

The Full interview can be accessed in these pages culled from the February 2022 edition of Africa Oil+Gas Report.

 

 


UNOC Partners with Chinese Explorer to Bid for Ugandan Block

By Joe Mshoeshoe, in Nairobi

It wasn’t clear, from UNOC’s press release, if any of the blocks in the ongoing licencing round, had been renamed Pelican-Crane block, the object of the UNOC-CNOOC joint application agreement, or whether the proposed application will be outside the process of the ongoing licencing round.

 The Uganda National Oil Company (UNOC) and the Ugandan branch of China National Offshore Oil Corporation (CNOOC) have signed a joint application agreement (JAA) for the Pelican-Crane block, located in Albertine Graben.

“An opportunity to jointly apply for a licence emerged in 2018, and subsequently an MoU was signed by the parties in Beijing”, Proscovia Nabbanja, UNOC’s CEO, says in a release. “The Pelican-Crane block has high potential and is one of the biggest exploration blocks in the Albertine Graben,” UNOC added.

In late 2020, UNOC had applied for one of the four blocks offered in the Second Licensing in line with its “ambitions of eventually attaining the required capacity to become an operator,” Ms. Nabbanja said at the time. The company was one of the four shortlisted applicants, which also included PetroAfrik Energy Resources East Africa Limited, a local company, Total E &P, Activites Petroliniers (France) and DGR Global Limited from Australia.

The shortlisted applicants were to participate in the request for proposal, a biding stage expected to end in June 2021 before licensing in December 2021. Licensing is preceded by negotiation of production sharing agreements.

The blocks on offer were: Block01 (Avivi); Block02 (Omuka); Block03 (Kasuruban); Block04 (Turaco);

Block05 (Ngaji).

It wasn’t clear, from UNOC’s press release, if any of the blocks in the ongoing licencing round, had been renamed Pelican-Crane block, the object of the UNOC-CNOOC joint application agreement, or whether the proposed application will be outside the process of the ongoing licencing round.

UNOC simply says that “the JAA will be submitted to Uganda’s Ministry of Energy and Mineral Development in a process that UNOC expects to culminate in an exploration licence for the block”.


Angola Wraps Up 40 Day ‘Limited’ Bid Round on April 5

The Angolan government expects that the 13 selected companies it has invited to bid for any of eight acreages should submit their proposals by 6pm on April 1, 2022.

By then it would have been 35 days since the Angola National Agency for Oil, Gas and Biofuels (ANPG) launched the “limited tender”, as it calls it, by sending invitation letters to 13 selected companies to look at Blocks (16/21, 31/21, 32/21, 33/21 and 34/21 ) Blocks in the Baixo Congo Basins and (7/21, 8/21 and 9/21), in the Kwanza Basin.

“The Limited Public Tender modality occurs when, for reasons of national strategic interest, the awarding of Concessions that have already been abandoned and returned to the State sphere is proposed, being limited to a limited number of companies with proven experience and accumulated knowledge in the exploitation of hydrocarbons in basins and geological systems”, ANPG says in a public notice.

“The Restricted Public Act for the Opening of Proposals will take place on the April 5th, 2022”, the statement adds.

“The range of invited investors includes countries such as Angola, Australia, Norway, Italy, Qatar, France, England, Namibia and China”.

 

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Ghana Pre-emption Bumps Up Tullow’s & PetroSA’s Interests

By pre empting the sale of Occidental’s interests in the Jubilee and TEN fields in Ghana to Kosmos Energy, the old partners in the fields have bumped up their equities, with Tullow Oil becoming the major beneficiary.

This transaction takes Tullow’s equity interests to 38.9% in the Jubilee field and to 54.8% in the TEN fields and adds c.5,000BOPD of unhedged daily production”, Tullow explains.

“Following completion of the pre-emption by both Tullow and PetroSA, Kosmos’ ultimate interest in Jubilee will be reduced by 3.8% to 38.3% (Kosmos retains ~80% of the original acquired interest), and Kosmos’ ultimate interest in TEN will be reduced by 8.3% to 19.8% (Kosmos retains ~25% of the original acquired interest)”, the company says in an update.

Whereas Tullow Oil has finalized the process and followed through to payment, PetroSA, the South African state hydrocarbon firm, is still working its way through the books and its conclusion “remains subject to execution of definitive agreements and required government approvals”.

Consideration paid to Kosmos from Tullow after taking into account closing adjustments was approximately $118Million in the first quarter. An additional ~$10 million is expected to be payable on completion of the PetroSA pre-emption process. Kosmos plans to accelerate debt reduction with the proceeds.

Tullow says that the additional equity increases its 2022 capital expenditure forecast by $30Million to $380Million “and is expected to generate c.$300Million incremental free cash flow at $75/bbl between 2022 and 2026”.

 


Afentra Continues Negotiations to Purchase Sonangol’s Stakes

Afentra plc has confirmed that negotiations with Angolan state hydrocarbon firm Sonangol E.P to purchase interests in Block 3/05 and Block 23 in the country’s deepwater, have continued into the second month of 2022.

Afentra submitted a non-binding expression of interest for the two blocks on 20 September 2021, following Sonangol’s announcement of an asset sales process to divest some of its interests in eight blocks across its portfolio.

On  October 7, 2021, Sonangol announced Afentra as one of six bidders on Block 03/05 and one of two on Block 23.

Since submitting the Expression of Interest, Afentra has been engaged in negotiations with Sonangol to reach agreement on the detailed terms of the transaction. These negotiations are ongoing but there is, however, no guarantee at this stage that an agreement between the two companies will be reached. The Acquisition would be subject to satisfactory completion of the necessary due diligence and agreement of a sale and purchase agreement with Sonangol.

If Afentra ultimately proceeds with the Acquisition, it would be classified as a reverse takeover transaction in accordance with Rule 14 of the AIM Rules for Companies. Trading in Afentra shares will remain suspended until either the publication of an AIM admission document, or until confirmation is given that Afentra’s participation in the bid process has ceased.

“Whilst the timeline of the Sonangol sales process has been extended beyond the previously expected timetable, this has not diverted Afentra from the pursuit of other production assets in West Africa. The Company continues to appraise multiple acquisition opportunities that support its growth strategy in terms of acquiring assets across West Africa with solid low-cost production, proven reserves and significant upside”, Afentra says in a release.

Says Paul McDade, Chief Executive Officer, Afentra plc: “We are pleased that we were selected by Sonangol to negotiate for Block 3/05 and Block 23 in Angola, and have been working diligently to find a mutually attractive outcome for both parties. Given our ambition to build an African business of scale, we also remain focused on identifying additional value-accretive opportunities across West Africa and are engaged in a number of active acquisition processes.


NNPC’s Grab and Grab Will Demarket the Nigerian Hydrocarbon Opportunity

By The Editorial Board of Africa Oil+Gas Report

In the week of January 24, 2022, speculations emerged that NNPC had exercised its right of pre-emption of the ongoing divestment of ExxonMobil’s Joint Venture assets, located in the south east shallow offshore Nigeria.

On the heels of those speculations came the news that the state hydrocarbon firm had received a $5Billion corporate finance commitment from the African Export Import (Afrexim) Bank to fund major investments in the country’s Upstream sector.

If NNPC’s plans for the money includes pre-empting the sale of ExxonMobil’s and /or Shell’s JV assets to other parties, then it would be deeply concerning.

Two sentences in the press release announcing the Afreximbank transaction give us pause. One allows that NNPC would be raising between $3.5Billion and $5Billion as corporate finance to fund major upstream investments. The other avers that the state hydrocarbon firm “plans to take over ownership from non-investing partner through acquisition of pre-emption rights in the sample Joint Venture”.

What ‘sample’ Joint Venture? Do these statements “confirm” the speculations that NNPC was exercising its right of pre-emption on the ongoing divestment of ExxonMobil JV assets? If they do, we should all be worried by this proclivity of NNPC to grab and grab. For one, the Nigerian state is in dire need of investors taking interest in any sector of its economy. The hydrocarbon opportunity is still one of the main drawing cards to the Nigerian concert party. In the ExxonMobil divestment process, the preferred bidder is the dual listed Seplat Energy, Africa’s largest homegrown independent, which ran with Trident Energy, a London based explorer, backed with funding from Warburg Pincus, a leading global growth investor. The reserved bidder is a consortium involving a new Nigerian independent and a London listed explorer Cairn Energy, who made the first commercial oil find in Senegal and has invested over $400Million in the last 12 months acquiring Shell’s brownfield assets in Egypt. What this means is that the divestment from majors attracts the cream of global investors.

NNPC just concluded pre-empting the sale of Chevron operated Oil Mining Leases (OMLs) 86 and 88 to Conoil Producing. If it swoops on ExxonMobil, it will draw a pattern. It would mean that it would do the same for Shell. And what does that mean? Nationalisation?

Soon, investors around the world will mark Nigeria as a no-go area. For how do you spend over $4Million in a bidding process only to get to a pre-emption sign at the end?

After the bungled Marginal Field Bid Round, an exercise that turned out to be the least transparent licence offering anywhere on the continent, the last thing Nigeria needs is to be seen as a jurisdiction in which a company, from anywhere, is not welcome to bid for asset.

What’s particularly noteworthy about its penchant for grabbing is that NNPC is not using them to build any capacity.

It would not manage the assets, so any excuse about “this being taken over in the interest of the state” is untrue. In the last three years, it has implemented Finance and Technical Service Agreements (FTSAs), with companies that it chooses to work the assets. Its choice of “partners” for the assets it grabs points more to cronyism than the quest to help build an industrial economy. So NNPC takes an asset that should have gone to Conoil, a proven operator of oilfields in the last 30 years, and turns around to “sell” the asset to MRS, a far downstream player. This time it plans to, if the speculations are confirmed, snatch victory from the jaws of Seplat, a 12 year old technically honed operator with 80,000BOPD operated production capacity and then “sell” it, through an  FTSA arrangement, to a company that participated in the ExxonMobil bid but lost out?

And who says we shouldn’t challenge these pre-emptions?

Why are people so unwilling to challenge these matters in court?

One recurring argument in the statement on the Afreximbank funding commitment was that NNPC was seeking to take advantage of the opportunity provided by the new law: Petroleum Industry Act. Our question is: What more does it want? As we’ve noted here in an earlier piece, NNPC is in joint venture in acreages that produce 45% of the country’s crude, and will continue to be. It is also the Concessionaire in the Production Sharing Contract (PSC) arrangements, which deliver over 39% of the crude, according to the 2018 Oil and Gas Industry annual report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

And there is the matter of NPDC, the operating subsidiary of NNPC, which has been gifted joint venture participation in 10 Oil Mining Leases (OMLs), all of them producing.

In 2019 alone, the Nigerian Government added more to the cart: It approved the transfer of OMLs 11, 24 and 98, including the operatorship of OML 116, from Federation’s interest (NNPC) to NPDC.

NPDC is also the sole stakeholder in three producing OMLs and two non-producing OMLs (i.e. no Joint Venture with any company, no PSC relationship, just NPDC held).

So, what does it want: to take over the entire concession map?


Shell Divestment: No Anxiety Among Staff

There is nothing to tell, in the behavioral gait of the personnel in the Nigerian offices of Shell, that a significant transformation is afoot.

The European super major is working on selling most of its assets in the country.

“But we are not feeling the pressure”, a company insider tells me, looking out the window with a view of the Lagos marina. “Every project is going on as we know it”.

Shell actually had just concluded a major reorganization involving personnel worldwide, in the month (May 2021) that Ben van Beurden, the company’s global head, announced the proposed large-scale divestment from Nigeria.

Exploration activity has been stepped up in the company’s shallow water Central Niger Delta assets (see link), to validate gas reserves aimed at boosting the feedstock for the Nigeria Liquefied Natural Gas plant in Bonny.

A new Chief Executive has just taken hold of Shell Nigeria Exploration Company SNEPCO, the subsidiary overseeing operations of the company’s assets under Production Sharing Contracts (PSC), the bulk of which are in deepwater.

Another head honcho just moved into the Port Harcourt head offices…

Read more.

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