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Nigerian Deepwater Bid Round Wraps Up today July 28, 2023

By Macson Obojemuinmoin

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) may be keeping to the reviewed terminal date for the seven deepwater acreages on offer since January 2023.

The commission, on April 1 2023, revised the Deep Offshore Oil Block Bid Round Schedule by extending the deadline for the submission of Technical/Commercial bids to May 19, 2023, with timeline for concluding activities of contract negotiations and signing between July 3 and 28, 2023.

“The outstanding activities for the conclusion of the exercise include the Technical/Commercial Bid Submission and the Ministerial Consent/Contract Negotiation and Signing”, Gbenga Komolafe, Chief Executive of the NUPRC said.

Mr. Komolafe said that constant interrogation and oversight of the process revealed two concerns the plan to conclude the bid process before transition to the new government and the need to guarantee participation of qualified indigenous companies, working collaboratively with multinationals and the International Oil Companies (IOCs) to leverage technology, funding and expertise”

Shell plc, TOTALEnergies, ENI of Italy and Chevron were part of the early contestants for the acreages, located in ultradeepwater Benin (Dahomey) Basin. They were prequalified. But the majors have struggled to remain in the contest, whereas Nigerian owned companies have been more eager.

The seven open blocks: 300-DO, 301-DO, 302-DO, 303-DO, 304-DO, 305-DO & 306-DO) are mostly located in ultradeep waster, with water depth ranging from 1,1000 to 3,000Metres.

Several downstream (petroleum product marketing) Nigerian owned companies, including Masters Energy, Matrix Energy, A. Y. M. Shafa, MRS Oil & Gas, as well as Sifax & Royalgate as a consortium, were prequalified.

Originally conspicuous in their absence from the bid were Nigeria’s producing indigenous independent E&P companies; those who are currently producing crude oil and gas in the country’s onshore and shallow water assets. The exception to the rule is the Sahara Group.

 


ENI Purchases Gas Assets in Algeria & Egypt, Dispenses with ‘Pure Oil Play’ in the Congo

ENI made the announcement, within the same week, about a $300Million sale of oil fields to Perenco in the Congo and a $4.9Billion acquisition of a piece of Neptune Energy, which holds large gas assets in Algeria and Egypt.

The latter is considered more critical to the medium-term future of the Italian firm, with a razor edge focus on weaning Europe from dependence on Russian gas.

The company did not name the Congolese fields, which it had been hawking for some time before getting a buyer in the form of Perenco, the largest independent producer of hydrocarbon in Africa.

ENI’s operated assets in Congo include Néné-Banga Marine and Litchendjili (Block Marine XII, 65%), Zatchi (55.25%), Loango (42.5%), Ikalou (85%), Djambala (50%), Foukanda (58%), Mwafi (58%), Kitina (52%), Awa Paloukou (90%), M’Boundi (83%) and Kouakouala (75%). The Italian explorer’s non -operated interests include Yanga Sendji (29.75%) and Likouala (35%)

The purchase of London-based independent Neptune Energy brings with it 35% stake and operatorship of the 400Million standard cubic feet per day (400MMscf/d) Touat project. It also delivers Interests in hydrocarbon fields in the Egyptian desert and an operated exploration licence in the Gulf of Suez.

Although the Neptune transaction comes with properties in the Netherlands, the UK’s and Norway’s North Sea (which is the biggest asset in the purchase), as well as Indonesia and Australia,  Claudio Descalzi, ENI’s CEO, has been keen to stress the Algeria assets were central to the rationale of a deal

Neptune produces gas from the Touat plant as part of a joint venture with Sonatrach and ENGIE, which is an important source of supply for mainland Europe. Groupement Touat Gaz consisting of Neptune Energy Touat (65%) and Sonatrach (35%). Within Neptune Energy Touat, ENGIE holds 46% and Neptune 54%. Operators Groupement Touat Gaz Touat field was shut-in throughout 2022 to enable upgrades at the processing facilities.

 


Angola Will Sign Assignment With Onshore Bid Winners in March 2024

The Angolan National Agency of Petroleum, Gas and Biofuels (ANPG) has presented the outlines and scope of its Petroleum Concessions-2023, for the exploration and production of petroleum, of 12 blocks, in the onshore parts of the Congo and Kwanza Basins.

The agency will announce the public tender for the award of the 12 oil blocks on September 30 of 2023, with the signing of the Basins assignment, scheduled for March 19, 2024.

ANPG is working to meet the target, set by r the government in 2019, to offer around 55 blocks by 2025. The Petroleum Concessions-2023 represents a segment of this objective.

“The two basins have great production potential and a proven history of oil activity”, Paulino Jerónimo, chairman of the ANPG’s Board of Directors at the presentation, which was attended by a hall full of petroleum industry professionals. “The ANPG is committed to maintaining an open dialogue with its partners so that together we can find the best solutions with a view to the continuous improvement of the sector and make Angola a a privileged location for investors in the oil sector in Africa and the world”, he noted. It should be remembered that the National Agency of Petroleum, Gas and Biofuels (ANPG) has already carried out three tenders, in 2019, 2020 and 2021”.

ANPG managers gave various presentations at the roadshow in Luanda, to highlight the value of the assets on offer. One presentation was titled: “Technical assessments of blocks and existing data packages“, Another was “Accessibility studies and environmental legislation”, There was “Legal, fiscal and contractual framework” as well as “Commercial terms requirements”.

There were presentations focused on “Logistical conditions and opportunities for regional development and promotion of Local Content” and “Requirements for attributing the quality of associate of the National Concessionaire“.

ANPG announced that Blocks CON 1, CON 3, CON 7 and CON 8 in the Onshore Congo Basin, have produced, as high as 50,000 barrels of oil/day in the 1970s and early 1980s. It is hoping that, with new  money invested by would-be  acreage holders, the assets could still do as much as 80,000 BOPD.

The tender for the Congo and Kwanza Onshore Basins is based on Presidential Decree No. 52/19, which establishes rules aimed at increasing oil and gas production in Angola, as well as ensuring the decline of crude oil in the country.

The ANPG says that its database contains an enormous amount of geophysical, geological, geospatial information that can serve as support for the evaluation of the basins. Naire Quenge of the ANPG Archive Office, notes that the Kwanza Basin has an area of ​​approximately 25 thousand square kilometers, consisting of 23 blocks, whose exploration history comprises two phases, the first dating from 1910 to 1925, when a total of 26 wells were drilled.

From 1925 to the present date, several two dimensional (2D) seismic campaigns, aeromagnetometric surveys, a total of 300 wells drilled, between exploration and production, culminating in the discovery of 11 oil fields and two gases.

“Studies of geological cacography and geochemical evaluation made it possible to recognize two mega frequencies in the Kwanza basin, which are: the pre-salt and post-salt unit. In the pre-salt there are, structurally, normal faults eradicated in the leak that originated structures of the horsts and grabens type (structural ups and downs)”, Quenge explains, stressing: “In the structural lows are deposited fine material rich in organic matter that constitutes the main rock of the referred unit, which is the red cube formation, responsible for feeding the sandstones deposited on the flanks of the horsts in the form of a pinchout, also responsible by feeding Coquina-type carbonates from the top of the horsts, equivalent to the Lower Congo Toca formation.

“At the top of the sequence, a Sag-type basin was formed, in which there are sands as reservoirs equivalent to the Chela formation of the lower Congo and at the top of the sequence the microbiological limestones that are reservoirs and as source rock, we have the formation of the cube grey. This unit culminates with the deposition of massive salt formation”.

 

 

 

 


Afentra Pushes the Final Acquisition of Angola’s Block 3/05 by One More Month

Afentra has named a new date at which it expects the completion of its acquisition of Sonangol’s stake in Block 3/05.

It is the third time it would shift the completion date a little further.

The company is upbeat about the value of the asset: “Recent gross production levels in Block 3/05 has averaged approximately 18,900Barrels of Oil Per Day(BOPD) in May 2023. Water injection levels have averaged approx. 39,000 Barrels of Water Per Day from January through May 2023. Finally, production in Block 3/05A, at the Gazela field, has continued at approximately 1,100BOPD” Afentra announces.

In late 2021, Sonangol, selected 10 companies for purposes of farm down negotiations from six blocks in which it has interests.

In April 2022, Afentra signed Sales and Purchase Agreements (SPAs) with Sonangol to acquire non-operated interests from Sonangol and INA in the producing Block 3/05 (24%), adjacent development Block 3/05A (4%) and exploration Block 23 (40%).

It then entered into financing and offtake agreements with Trafigura to finance the acquisitions through Reserve Based Lending (‘RBL’) facility: up to $75Million with 5-year tenure (8% margin over 3- month secured overnight financing rate (SOFR)).

The acquisition of INA’s stake has been concluded.

But taking over Sonangol’s 20% interest in Block 3/05, which is the crown jewel of the deal, and 40% interest in Block 23, has taken a little time.

“Subsequent to the approval of the licence extension in May 2023, Sonangol (the Angolan state hydrocarbon company) is now pursuing the requisite government approvals for the transaction”, the London headquartered junior says in a recent update.

“Based on the outstanding workstreams and associated timeframes, completion of the transaction is now expected to occur in July 2023 and we are working, together with Sonangol, to extend the long stop date for this acquisition accordingly”, Afentra says in the release.

In addition, the enhanced fiscal terms associated with the Block 3/05 PSA extension have been submitted for the requisite government approvals.


M&P Moves to Take Over Nine Licences in Gabon

Maurel et Prom (M&P) has announced a “possible offer for Assala Energy Holdings Ltd”.

The Paris headquartered, Indonesian owned, independent informs the market that it is in advanced discussions with the Carlyle Group, shareholder of Assala Energy Holdings Ltd with respect to the acquisition of all the shares of Assala.

“Assala is an onshore oil upstream and midstream company in Gabon with working interest production of approximately 45,000Barrels of Oil Per Day (BOPD)  in 2022”, M&P reports in a release.

That volume of crude was extracted from some of six production licences that Assala had operated in Gabon since it entered the country in 2017.  The planned acquisition also includes a non-operator interest in one production licence, as well as three onshore exploration licences also in Gabon, held since 2019.

“There can be no assurance that agreement between the parties will be reached on final terms and that the Proposed Acquisition will complete”, M&P explained..

M&P will update shareholders as to progress made in relation to the Proposed Acquisition in due course


Six Year Plan to Sell Down NNPC Stakes, ‘Needs Careful Management’, Could Raise $40Billion

By Lukman Abolade, Senior Correspondent, Lagos

A multi-phase proposal by President Bola Ahmed Tinubu’s Policy Advisory committee, anticipates the sell down of NNPC Ltd’s stakes in over 50 acreages in the Niger Delta, to pull in close to $34Billion into the Nigerian treasury over five -six years, “if the transaction is properly and professionally managed”.

This estimated value is for upstream assets only. It “excludes challenging-to-value assets such as refineries, refined products infrastructure, and pipelines”, the committee explains.

The value estimates are based on precedent transaction multiples and the focus is on asset-level deals in Nigeria, according to the report entitled ‘Enabling growth in Nigeria’s Energy & Natural resources sectors: sector challenges and proposed interventions, dated May 2023.

NNPC holds between 55% and 60% in Joint Ventures in assets that deliver over 80% of Nigerian production. The plan is to sell in such a way that NNPC becomes a less than 50% partner in each of those acreages.  The state hydrocarbon company’s commercial relationships with its partners in these assets have been fraught over the years; where it is the passive partner, it has struggled to pay its cash calls. And its “senior partnership” status has been the reason, critics argue, for the underperformance of these assets, and the ruinously long contracting cycle, of over four years on average, for projects.

The plan to sell down equity of the NNPC Ltd has been on the table for decades.  The agenda has also always included NNPC’s non performing refineries and the company’s suboptimal midstream and downstream infrastructure; including product pipelines, tank farms,

The reasons adduced by the promoters of the sale are to raise funds for country’s national budget, enlist partners to high grade the value of the properties and minimise the corporation’s cash call obligations.

In the last seven years, the plan showed up vigorously in the 2017 and 2018 draft National budget plans championed by Udoma Udo Udoma and Kemi Adeosun, former Ministers of National Planning and Finance respectively, in (former) President Muhamadu Buhari’s First term in office.  But the idea never made it to approval, let alone implementation. By the time Buhari arrived for his second term in 2019, the notion had been altogether scuttled. With the benefit of hindsight, if the sale had sailed through at the time, the proceeds would have been swallowed in the large deficit hole ($10.7Billion) “lost annually to PMS subsidy and inefficiencies associated with the purchase, distribution, and sale of PMS”, the Committee says in the report.

In the budget plan for 2020, the then Finance Minister Zainab Ahmed, who had now absorbed the planning portfolio into her schedule, clearly confirmed that the nation’s oil assets were not for sale.

The President Tinubu Policy Advisory Committee’s proposal chose its words carefully to explain the raison d’etre for the sale this time around: “to foster private sector participation, attract foreign direct investment, and promote competition and efficiency within the industry”.

In the view of the Committee, the first steps would involve the establishment of a dedicated team to assess the portfolio of upstream, midstream, and downstream assets held by NNPC.

This team will conduct a thorough valuation exercise and analyse the potential range of considerations for divestment, will also conduct high-level decision analysis to ensure a well-informed approach.

In order to facilitate the divestment process, the Committee advises that in the first 100 days, the new administration should engage external experts, including investment bankers, legal advisors, and financial advisors. The experts would assist in identifying suitable buyers and test transaction principles with key stakeholders.

Additionally, the experts will be responsible for establishing a robust transaction process, determining an appropriate execution timeframe, and assessing market conditions to maximize the value of the divestment.

To attract potential buyers and financiers, the Committee recommends the preparation of an Investment Memorandum (IM) and Management Presentation. These documents will provide detailed insights into the assets available for sale and highlight the potential benefits of investment. Potential bidders will be identified, and non-disclosure agreements (NDAs) will be signed to facilitate the sharing of confidential information.

Once potential buyers are identified, a data room will be set up, and a shortlist of candidates will be selected for due diligence. The Committee advises engaging in bidding and negotiation processes to ensure favourable pricing and contract terms. A Sales and Purchase Agreement (SPA) will be drafted, and upon its signing, preparations for the transfer of operations will begin.

The Committee’s recommendations extend to three distinct phases. In the short term of 18 months ending in December 2024, the Committee proposes the sale of some NNPC stakes in shallow water assets operated by the international oil companies. The estimated value of these initial divestments is up to $4.5Billion.
For the longer term, the Committee proposes sale of some NNPC stakes in the shallow water Joint Venture with Nigerian independents. These divestments for the second phase are projected to reach a total value of up to $12. 9Billion.

In the long term, beyond May 2027, the Committee advises concluding the sale of JV assets planned for divestment or currently undergoing divestment in the Onshore East and West regions. This is projected to be up to $16.4Billion. These upstream sales will therefor total  $33.7Billion.

While the committee did not put the estimated value of NNPC owned refineries; its 19 petroleum product depots all over the country and its product pipeline network, there are back- of- the- envelope estimates by analysts that put the value at around $6Billion.

“By reducing NNPC’s stakes, the government aims to increase efficiency and unlock the sector’s potential for sustainable economic development in a country battling multi-dimensional poverty and dwindling income.

“President Tinubu’s Policy Committee believes that the sale of NNPC stakes in the oil and gas sector will contribute significantly to Nigeria’s overall growth and position the country as an attractive investment destination in the global energy landscape”.


Angola Proposes a June 19 Roadshow for 12 Onshore Blocks

Angola’s National Agency of Petroleum, Gas and Biofuels (ANPG), has announced plans for a Roadshow in Luanda, on the 19th of June 2023,  “within the scope of Auction 2023”.

12 (twelve) oil blocks are in public tender, 8 (eight) in the Onshore Kwanza Basin (Blocks KON 1, KON 3, KON 7, KON 10, KON 13, KON 14, KON 15 and KON 19) and 4 (four) in the Lower Congo Onshore Basin (CON 2, CON 3, CON 7 and CON 8).

During the session the following topics will be addressed:

  • Technical assessments of existing data blocks and packages;
  • Accessibility studies and environmental legislation;
  • Legal, tax and contractual framework, as well as commercial terms;
  • Logistic conditions and opportunities for regional development and promotion of Local Content;
  • Requirements for attributing the quality of associate of the National Concessionaire.

In this context, the ANPG invites all those interested in associating with the National Concessionaire to develop activities in Research and Production of hydrocarbons in Angola, in order to participate in the said event, for which purpose they must submit their registrations to the email: tender.eventos2023@anpg.co.ao, providing the corporate name of the company, the names of the participants and their respective positions, telephone contact and email address, until the 16th of June

Luanda, June 8, 2023.

ANPG – promoting a business environment of excellence


Africa Oil Divests from Kenyan Oil Development, to Focus on Namibia and Nigeria

By Toyin Akinosho

Africa Oil Corp, which marketed Kenya’s opportunities to the world and brought in Tullow Oil, has elected to withdraw from the country’s only upstream development project.

The Canadian junior says it has submitted withdrawal notices to its joint venture partners on Blocks 10BB, 13T and 10BA in Kenya, to unconditionally and irrevocably, withdraw from the entirety of the joint operating agreements (JOAs) and Production Sharing Contracts (PSCs) for these concessions. The Company has concurrently submitted notices to Ministry of Energy and Petroleum, requesting the government’s consent to transfer all of its rights and obligations under the PSCs to its remaining joint venture partner.

Africa Oil Corp has determined that “the carrying value of the Kenya intangible exploration assets was written down to $58.6Million at December 31, 2022, and the Company intends to further impair this value to zero”.

“Our strategy has shifted to focus on production and high potential exploration opportunities”, declares Keith Hill, the company’s President and CEO. Those opportunities include “our Orange Basin portfolio where we are now appraising the exciting Venus discovery, offshore Namibia”.

The production opportunity refers to the company’s stake in Prime Energy, which receives dividends from proceeds in Agbami, Akpo and Egina fields in Nigeria.

Africa Oil Corp. came into the consciousness of the global oil and gas community in the late 2000s, when it was vigorously marketing the Kenyan and Ethiopian opportunities, distributing printed regional maps and seismic sections from tiny booths at conferences focused on African oil and gas. These were the years immediately after the commercial discovery of oil in Uganda.

One company which took more than a cursory glance at those maps was Tullow Oil, which went ahead to farm in to acreages held by Africa Oil, took charge as operator and proceeded on a seismic and drilling campaign. In March 2012, Tullow announced a commercial discovery at Ngamia -1, in Block 10BB, placing Kenya on the hydrocarbon map of the planet. The South Lokichar basin development grew on the back of the Ngamia-1 discovery and the string of finds that came after it.

The latest field development plan calls for seven fields to contribute to a 130,000Barrels of Oil Per Day central processing facility from which the crude is evacuated into a 20 inch, 823 kilometre long, heated pipeline, which ferries the commodity to the country’s port town of Mombassa on the edge of the Indian Ocean.

AOC says, in its release, that it is proud to have played a central role in discovering the oil fields in Kenya’s South Lokichar Basin.

“We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country. We have also had the privilege of working with our host communities on our social-focused programs and we are grateful to them for welcoming us to their midst. We thank the government of Kenya, our host communities and our joint venture partners for their support over the years and we wish them the best in taking the project forward to the next stage.”

 


Uganda’s Turaco Block Awarded to a Second Firm in Seven Years

Ugandan authorities have signed a production-sharing agreement (PSA) with a subsidiary of Australian firm DGR Global for exploration of oil in the west of the country.

DGR Energy Turaco Uganda Limited will explore in the 637 sq km Turaco block) in the Albertine Rift basin that straddles the African nation’s border with the Democratic Republic of Congo.

Armour Energy Uganda Ltd, another subsidiary of DGR Global, got a two-year extension of its licence for the Kanywataba exploration area, which it has been exploring since 2017.

Turaco was one of five blocks put up for auction in Uganda’s second licensing round, launched in 2019.

“This licence marks a significant milestone for the competitive second licensing round,” declared  Ruth Nankabirwa, the country’s Energy Minister.

It would be the second time in seven years that the Turaco block would be awarded to an operator.

In a 2015 bid round, the Nigerian independent Waltersmith Petroman Oil Limited, was awarded the same Block, located in Ntoroko District. A year later,  the company had opted out because of terms that included (1)the state’s request that it posted a bond amounting to $58Million for its four year work programme, (2), carry the state 20% and (3) share the profit 50: 50 with the state.

DGR won the block in an updated bid round, started four years ago and delayed by the COVID-19 pandemic as travel curbs affected the bidding and negotiation stages, the Minister explained.

With this transaction, DGR has four years of exploration.

Uganda hosts 6.5Billion barrels of crude oil, 20%  (or 1.2Billion barrels), of which  is estimated recoverable reserves.

Development plan for Turaco or any other block for that matter is dependent on the delivery of the ongoing development of the Tilenga cluster of fields by TOTALEnergies and the Kingfisher field by CNOOC, as well as the installation of the EACOP pipeline for the evacuation. First oil from these projects is expected by late 2026.

 

 

 

 


Savannah Sells Stake in Chad-Cameroon Pipeline

Savannah Energy Plc has sold a quarter of its 41% stake in Cameroon Oil Transportation Company S.A. (COTCo).

The British junior reports that its wholly owned subsidiary, Savannah Midstream Investment Limited (SMIL), has signed a Share Purchase Agreement (SPA) with the national oil company of Cameroon, Société Nationale Des Hydrocarbures (SNH), relating to the sale by SMIL and purchase by SNH of 10% of the issued share capital in Cameroon Oil Transportation Company S.A. (COTCo).

COTCo owns and operates the 903km Cameroon section of the Chad-Cameroon export pipeline, the Kome Kribi 1 floating storage and offloading facility and related infrastructure. The pipeline has a 250,000Barrels Per Day (BPD) nameplate capacity and is the only international export route for oil production in Chad. “During 2022, COTCo transported an average of 124,000BPD of crude oil valued at an estimated $4.6bBillon at the prevailing Brent crude oil prices”, Savannah declares in a press statement.

“In consideration for the sale of the Shares, SNH will pay a cash consideration of $44.9Million to SMIL”. Savnnah says in a release. The Consideration, when received, will be used by the Savannah group for part repayment of existing debt facilities.

“Completion of the transfer of the Shares from SMIL to SNH will result in SMIL shareholding in COTCo reducing from 41.06% to 31.06%. Completion shall occur upon satisfaction of certain conditions precedent related to amendments to the bylaws of COTCo and is expected to occur in H2 2023. SMIL will retain the right to the dividend attaching to the Shares until the date of payment of the Consideration.

“Pursuant to the terms of the SPA, SNH and SMIL have pledged, inter alia, their support of one another as shareholders in COTCo.”

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