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Seplat is Stuck with Trans Forcados Until the end of June

Seplat Energy is still unable to start pumping its crude through the Amukpe-Escravos Pipeline (AEP), its hoped-for alternative to the troubled Trans Forcados Pipeline.

The company says that the facility is mechanically completed and “all commercial terms have been agreed “, but the process of getting to pump the fluids through the line is “moving through counterparty approval processes for signature”.

Now, after several delays, the pipeline is “expected to be fully operational by end of Q2 2022”, according to an operational update.

Seplat Energy, bitten by lower than anticipated output as a result the suboptimal evacuation of crude along the TransForcados pipeline, is anxious to start pumping through an alternative route, or at the least, have an alternative route as a standby.

Its operations produced 47,693 barrels of oil equivalent per day (BOEPD) on a working interest basis in 2021, down from 51,183BOEPD in 2020, mainly resulting from shut-ins of the Trans Forcados Pipeline System (TFPS).

The company has thus been canvassing for the Amukpe-Escravos Pipeline as an alternative since 2017, but the construction of the line, begun by the NNPC/Pan Ocean JV in 2012, has simply dragged.

 

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Nigeria’s Reserves Grow In spite of Above Surface Challenges

Nigeria’s crude oil and natural gas reserves have grown year on year, despite the above surface challenges of vandalism of crude evacuation pipelines and lower overall investment in the upstream sector, which have crimped output.

The country’s crude oil reserves rose by 0.37% in 2021 and the natural gas reserves were topped by 1.01% in the same year.

The reserves are collated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from annual reports of operating companies.

Gbenga Komolafe, Chief Executive of the NUPRC announced the National oil and gas reserves position as of 1st January 2022 in line with the provisions of Sections 7 (i), (j), (k) and (r) of the Petroleum Industry Act (PIA) 2021 “which stipulates that all operating exploration and production companies are to submit their annual report of reserves to the Commission.

He said: “A total of sixty-one (61) operating companies submitted their 2021 annual report on reserves in line with the provisions of the Petroleum Industry Act (PIA, 2021)”, declares “Analysis of the report indicates that the Nation’s oil and condensate reserves status as at 1st January 2022 was 37.046 Billion barrels representing a slight increase of 0.37%, compared with 36.910 Billion barrels as at 1st January 2021. On the other hand, the National Gas reserves status as of 1st January 2022 was 208.62 (trillion cubic feet) TCF, representing an increase of 1.01% compared to 206.53 TCF as at 1st January 2021”.

 


M&P Restores Crude Oil Output in Gabon’s Ezanga Permit

Crude oil output is back up in Maurel et Prom (M&P operated Ezanga Permit onshore Gabon, after the restoration of the export capacities of the permit, restricted since the incident which occurred on April 28, 2022 at the facilities of the Cap Lopez oil terminal operated by Anglo-French independent Perenco.

The restriction had been called up after some 300,000 barrels of crude leaked from a storage tank operated by Perenco in the terminal. Perenco immediately declared a situation of force majeure and moved to contain the leak, the company said in a statement. “Instead of the oil at the Cap Lopez terminal entering the sensitive coastal ecosystem, the crude leaked into retention tanks on 28 April, Perenco noted in a statement.

M&P now reports that export capacities have reached an initial phase of around 10,000Barrels of Oil Per Day (BOPD), which has allowed it to gradually restart the wells. The end of export restrictions and the return of production to its level prior to the incident (gross production of approximately 19,000BOPD) are expected within days.

M&P had earlier had to gradually reduce its production on the permit as a result n incident that occurred on Thursday 28 April at the facilities of the Cap Lopez oil terminal operated by Perenco and the suspension of its reception and export activities, The resumption of production on Ezanga back to its normal level could take place in the coming days. Alternative export solutions are also already being reviewed, in order to accelerate the return to normal production of Ezanga if necessary


$2.5Trillion in Cash to Flow from Oil and Gas Sector to Government Coffers in 2022

Sustained high commodity prices and increasing oil and gas supply are set to push upstream sector payments to governments to an all-time high of $2.5Trillion this year, smashing the previous record of $2.1Trillion set in 2011, Rystad Energy research shows.

Saudi Arabia is, unsurprisingly, set to top the table in terms of total cash flow to government from the sector this year, followed by the US and Iraq, with the top 10 list dominated by Middle Eastern producers. Government take varies considerably between nations, however, with Norway and Iraq seeing an average take per produced barrel of oil equivalent (boe) of around $100, while for the likes of the US and Canada the figure is below $20 per boe.

Total tax income in 2020 was just above $600Billion as low oil and gas prices and production cuts due to the outbreak of the Covid-19 pandemic early in that year sent such income to one of the lowest levels this century. Total tax income increased last year to $1.4Trillion, with higher commodity prices being the main driver behind the rise.

“The leap to a record high in revenues is being driven by a combination of high oil and gas prices and lower costs. A year ago, it looked like the era of trillion-dollar revenues might have been behind us. Today it is clear that we are heading into a super cycle that will benefit petrostates. These record revenues present an unparalleled opportunity to diversify economies,” says Espen Erlingsen, Head of Upstream Research at Rystad Energy

Saudi Arabia will be the largest beneficiary in absolute terms and is expected to receive just above $400 billion from its cornerstone industry this year, an increase of almost $250Billion from 2021. The US, when including royalties paid to private landowners, takes second spot with around $250Billion paid to government, an increase of $100Billion compared to 2021. Iraq follows with about $200Billion in total tax income, a doubling of its income compared to 2021.

Norway’s position in fourth comes despite being only the tenth-largest oil and gas producer globally and the government will receive revenues of around $150Billion in total tax income. This is due to European gas prices, low levels of cost and large government ownership driving this achievement.

By the barrel

One way to measure the tax pressure for the different countries is to look at the average government take per produced barrel. This measures how much money is flowing to a particular government per produced barrel, here including both oil and gas. There are several drivers for this metric, including costs levels, oil price discounts, gas prices, tax rates and the share of national oil companies (NOC) in the different countries.

On average Iraq has the highest government take per barrel – for each barrel the country produces, around $100 goes to the government, with the low level of costs and service agreements being the drivers. Norway also has a very high government take per produced barrel, at just below $100. Again, high European gas prices, low cost levels and a large government ownership are driving this achievement. In addition, a 78% profit tax also ensures the government takes most of the exceptional profit the oil and gas industry is expected to generate this year. The US is on the other side of the scale with an average government take per produced barrel of around $20. High investment rates, low domestic gas prices and low corporate tax rates account for this relatively low number.

Per capita

While oil and gas revenues are at an all-time high, the amount of cash per citizen can vary greatly. A per capita measurement shows that Nigeria will receive around $300 per capita. Indonesia and China will jointly receive the lowest incomes per capita at around $100. At the other end of the scale, Qatar, Norway and Kuwait will receive a whopping $40,900, $28,000 and $23,200, respectively, per citizen.

Contacts

Espen Erlingsen
Head of Upstream Research
Phone: +47 24 00 42 00
espen.erlingsen@rystadenergy.com

Victor Ponsford
Media Relations Manager
Phone: +47 94 97 49 77
victor.ponsford@rystadenergy.com

About Rystad Energy
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Our products and services cover energy fundamentals and the global and regional upstream, energy services and renewable energy industries, tailored to analysts, managers and executives alike. Rystad Energy’s headquarters are located in Oslo, Norway with offices in London, New York, Houston, Aberdeen, Stavanger, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.

 


Standard Bank: Big Lender in Uganda, Small Player in Oilfield Project

Standard Bank is the largest lender in Uganda.

The Bank had been keen to be a part of the funding for the country’s basin wide oil development project

But, under pressure by activist shareholders and environmentalist groups to desist from funding fossil fuel development, the Johannesburg headquartered Bank has thrown its hands in the air, explaining that the project does not depend on its participation.

“While we are the biggest lender in Uganda, we are such a small player in the $10Billion project that if Standard Bank does not participate, the project can still be funded by more well-heeled financial firms”, the company’s management sources say.

TOTALEnergies, the project leader, declared in a release after the Final Investment Decision (FID) on the project in early February 2022, that the FID was in line with the company’s “strategy of only approving new projects if they are low-cost and low emissions”. In particular, TOTALEnergirs said, “the design of the facilities incorporates several measures to limit greenhouse gas emissions well below 20 kg CO2eq/boe, including the extraction of Liquefied Petroleum Gas for use in regional markets as a substitute for burning biomass, and the solarization of the EACOP pipeline”.

The French major’s emission numbers stand in stark contradiction to the figures thrown up by groups like Just Share, which says the pipeline would pump enough oil to generate up to 34.3Million tonnes of carbon dioxide – about seven times the emissions of Uganda and Tanzania combined. It’s not clear whose numbers are correct, but TOTALEnergies has not lamented scarcity of funding for the project and it continues to announce first oil in Uganda by 2026.

South African banks like ABSA, Nedbank and Investec have been scared away from oilfield development projects by the loud protestations of such groups.

 


Five Nigerian Indies Produce Close to 60,000BOPD in Shallow Water

Onshore assets are the default working areas of Nigerian indigenous companies, but there is a growing output from shallow water terrain credited to this species.

Five companies: First E&P, Oriental Resources, Amni Petroleum, and Britannia U operated close to 60,000Barrels of Oil Per Day in December 2021.

The fields included First E&P’s Anyala, which produced slightly higher than half of the entire output; Oriental Resources’ Ebok; Amni International’s Okoro and Britannia U’s Ajapa, which brought up the rear with less than 1,000BOPD.

First E&P has produced even far more than its last year’s average in the last three..

This story appeared in the January 2022 edition of the monthly Africa Oil+Gas Report, distributed to paying subscribers

Read More.

 

 


Libya Declares Force Majeure on its Largest Oilfield

The Libyan National Oil Company (NOC) has declared force majeure on the country’s largest oil field.

The 300,000 Barrels Per Day (BOPD) Al Sharara field in the Murzuq basin in the country’s southwest, was shut in amid protests that had led to closure of two ports and the outage of the El Feel oilfield.

“A group of individuals put pressure on workers in the Al-Sharara oil field, which forced them to gradually shut down production and made it impossible for the NOC to implement its contractual obligations”, the state hydrocarbon firm says in a statement.

The shutting of Al Sharara forced the suspension all Libyan oil production and exports.

The NOC declared that loadings of crude oil at two Libyan ports had been suspended amid anti-government protests that were interfering with oil industry operations. Loading from the Mellita terminal was suspended following a shut down in production at the El Feel oil field. The NOC also shut down operations at the Zueitina export terminal over protests calling for the resignation of incumbent Prime Minister Abdul Hamid Dbeibah.

Libyan production had ramped up considerably above 1.15Million BOPD for most of the second half of 2021. That has bolstered the NOC’s optimism to push the country’s output  to 1.4 MillionBOPD Libya, but the political skirmishes that have led to the protests may prod Libya into another civil war.

 


ENI Reports Oil & Gas Discovery Onshore Algeria

Italian explorer ENI has announced that Sonatrach, the Algerian state hydrocarbon company, and itself have encountered a significant oil and associated gas accumulation in the Zemlet el Arbi concession, located in the Berkine North Basin in the Algerian desert.

The concession is operated by a joint venture between ENI (49%), and Sonatrach (51%). Preliminary estimates of the size of the discovery are around 140 million barrels of oil in place.

The exploratory well that led to the discovery has been drilled on the HDLE exploration prospect, located about 15 Km from the processing facilities of Bir Rebaa North field. “HDLE-1 discovered light oil in the Triassic sandstones of Tagi Formation, confirming 26 metres of net pay with excellent petrophysical characteristics. During the production test, the well delivered 7,000 barrels of oil per day and 5MMscf/d of associated gas”, ENI declares in the announcement. “The HDLE-1 well is the first well of the new exploration campaign which will include the drilling of 5 wells in the Berkine North Basin”.

The company says “the discovery will be quickly appraised with the drilling of a second well, HDLE-2, in April 2022 to confirm the additional potential of the structure extending in the adjacent Sif Fatima 2 concession operated by an ENI-Sonatrach JV (50-50%)”.

In parallel with the appraisal programme, ENI and Sonatrach will perform studies and analyses to accelerate the production phase of the new discovery through a fast-tracked development with start-up foreseen in Q3 2022.

ENI holds equity production in Algeria of about 95.000 BOEPD and it claims to be the most important international company operating in the country.

 

 


Azule Energy is the Name for the Combined ENI and BP Operations in Angola

The British major bp and the Italian giant, ENI have confirmed an agreement to form a new 50/50 independent company, Azule Energy, a bp and Eni company, through the combination of the two companies’ Angolan businesses.

The agreement follows the memorandum of understanding between the companies agreed in May 2021.

Azule Energy will be a new international energy company, independently managed, with more than 200,000 barrels equivalent a day (BOEPD) of net oil and gas production and two billion barrels equivalent of net resources. It is expected to be Angola’s largest producer, holding stakes in 16 licences, as well as participating in the Angola LNG joint venture. Azule Energy will also take over ENI’s stake in Solenova, a solar company jointly held with Sonangol.

Azule Energy will have a strong pipeline of new projects starting up over the next few years, including the new Agogo and PAJ oil projects in Blocks 15/06 and 31 respectively. It will also develop 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, its decarbonization path and strengthen its role as a global LNG player.

bp and ENI say they believe combining their efforts with a long-term perspective will create more efficient operations and offer the potential for increased investment, job creation and growth in Angola, adding that they share common goals for Azule Energy in achieving environmental and sustainability ambitions. “Azule Energy will continue to develop the full potential of the country’s upstream sector, while also positioning itself to capture new opportunities from the energy transition with the growing role of gas and renewables in its portfolio”, the companies say.

“Since announcing the intent to form the joint venture in May 2021, bp and ENI have worked closely with the Angolan government and the creation of Azule Energy will be subject to all customary governmental and other approvals, with the aim of completing the transaction in the second half of 2022. Once set up, Azule Energy will be equity accounted by bp and ENI. Hydrocarbon production and GHG emissions will continue to be reported on an equity share basis”, the statement adds.

Currently ENI is operator of Blocks 15/06 Cabinda North, Cabinda Centro, 1/14, 28 and soon NGC. In addition, ENI has a stake in the non-operated blocks 0 (Cabinda), 3/05, 3/05A, 14, 14 K/A-IMI, 15 and in Angola LNG.

bp is operator of Blocks 18 and 31 offshore Angola, and has non-operated stakes in blocks 15, 17, 20 and 29. bp also has non-operated interests in NGC and Angola LNG.

 


Tullow Pledges Renewed, Aggressive Focus on Ghana’s Jubilee Field

UK independent Tullow Oil is pledging “a great deal of activity at our flagship Jubilee field (offshore Ghana), with investment in new infrastructure and new wells to grow production in the near term”.

The company, in its annual 2021 report, says it is also “taking on the operation and maintenance of the (Jubilee)FPSO.

“Following a transformational 2021, in which Tullow successfully refinanced its balance sheet, drilled highly productive wells in Ghana and demonstrated operational excellence and financial discipline across the Group, we are now concentrating on the successful delivery of our long-term business plan”, declares Rahul Dhir, Chief Executive Officer, Tullow Oil plc.

At TEN (which is Tullow Oil’s second producing accumulation ion the country), Dhir promises: “we will drill two important, strategic wells that will help define our future plans for the fields”.

He also talks of plans to continue to build production in Gabon.

“With additional opportunities to deliver value across our portfolio, including gas commercialisation in Ghana, our revised Kenya development project and an exciting well in a proven play in Guyana, we are well-placed to deliver value from our assets and to grow our business.”

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