All posts tagged africainbusiness


Ghana Backs Down on Objection to Wissam Al Monthiry as Tullow’s Head

Ghanaian authorities have quietly dropped objections to having Wissam Al Monthiry as Managing Director of Tullow Oil Ghana.

The Government initially demonstrated fidelity to its local content requirements when it objected to British company’s appointment of a non-Ghanaian as the Company’s Chief Executive in Ghana, insisting that Tullow Oil’s action defeats the Government’s localisation agenda.

Tullow had initially picked Kweku Awotwi, a Ghanaian electrical engineer and businessman, in February 2020, after the retirement of Charles Darku, the first Ghanaian managing director who had served the company for five years

But in the middle of May 2020, after an extensive review of its operations in the country, which is also its heartland, Tullow appointed Wissam Al Monthiry to replace Awotwi, who was due for retirement on June 30, 2020.

“Government did not pursue this objection further as the new MD remained Tullow’s MD as at June 30, and into the second half of 2020”, says the country’s Public Interest Accountability Committee, in its latest report.


Michael Ajukwu Takes the Chairmanship of LEKOIL 

Michael Onochie Ajukwu, a Nigerian businessman, has been named Chairman of LEKOIL Limited, after Metallon Corporation succeeded in getting the three directors it nominated into the company’s board of directors, at the Extraordinary General Meeting (EGM) of the company on January 8 2021.

He takes over from Mark Simmonds, the British diplomat and politician, who had been in the position for just about a year.

Mr. Simmonds is as high profile as they come. He was Britain’s Foreign & Commonwealth Office Minister with responsibilities for Africa, the Caribbean, UK Overseas Territories, International Energy and Conflict Prevention. He served as a Member of the UK Parliament for fourteen (14) years and was also a senior advisor to the then Prime Minister, David Cameron.

Simmonds took over the Chairmanship at a time of huge reputational challenges for LEKOIL: the company’s shares were in a headlong crash in January 2020, after the AIM listed firm discovered that a $184 Million loan it had announced was fraudulent.

But LEKOIL had not been able to live down the smear. And it was one of the issues that Metallon Corporation raised, two months after it bought 15% share of the company and moved in for board changes.

“I am honoured to assume the position of Chairman of LEKOIL and would like to thank my predecessor, Mark Simmonds, for his contributions to the Company”, Ajukwu, known in Lagos  business circles for his closeness to South African brands and Nigerian banking interests, said. “I look forward to working with my colleagues on the Board and the management of LEKOIL to deliver a high performing company anchored on strong governance structures that produces value for all shareholders.”

The path to Mr. Ajukwu’s chairmanship was cleared when Mr. Simmonds chose to step down as Chairman at the EGM and all resolutions that Metallon put to the meeting were duly passed, with Metallon’s nominated directors, including Michael Ajukwu, Thomas Richardson and George Maxwell invited to join the Board with immediate effect.

Mr. Simmonds noted his intention to stand down from board Chairmanship role with immediate effect with a new Chairman to be appointed by the enlarged board of directors.

 


FAR May Not Yet Ride into the Sunset, Afterall

Australian junior FAR Limited has cautioned that the proposed acquisition of all of its shares by Remus Horizons PCC has a dim chance of happening.

“The Remus Proposal terms are uncertain at this stage”, the company declares in a statement early on Friday, January 8, 2021.

The most significant lie in the release goes thus: “The Remus Proposal is conditional on the Woodside Sale not occurring”. Meaning: If FAR’s shareholders agree to sell the company’s 15% stake in Senegal’s Sangomar oilfield development to Woodside, then Remus will not move ahead.

“FAR cautions that the Remus Proposal is not a legally binding offer, there is no certainty that the Remus Proposal will necessarily eventuate, and the Remus Proposal terms are uncertain at this stage”, FAR explains.

“Accordingly, care needs to be used in assessing the Remus Proposal at this time. The Remus Proposal is conditional on the Woodside Sale not occurring”.

FAR says it has obtained further information from Remus in relation to the Remus Proposal as follows:

  • Remus is presently finalising the funding arrangements in advance of making the proposed offer.
  • The only internal and regulatory approval required to proceed with the offer is the final approval of the Remus Board and final review and confirmation of documentation.
  • Remus is presently satisfied that it will not need to undertake any further due diligence on FAR.
  • FIRB approval is not required and any offer made will not be conditional on FIRB approval.
  • Any proposed offer is expected to be subject to a requirement that Remus achieves a controlling interest in FAR together with other customary conditions.

“In these circumstances, FAR has determined to further postpone the shareholder meeting to consider approving the Woodside Sale currently scheduled for 21 January 2021 to 10.00 am on 18 February 2021. This will enable further time for FAR shareholders to see if the Remus Proposal eventuates, if so assess its merits, and consider the Woodside Sale on the basis of more detailed information. FAR will in due course distribute updated meeting information in this regard. FAR is not presently inclined to further postpone the shareholder meeting to consider updates in relation to the Remus Proposal. In the meantime, FAR is continuing to advance negotiations with Woodside in relation to the form of the Woodside Sale proposed contractual documentation following Woodside’s pre-emptive rights exercise. FAR advises that it is in the process of paying the RSSD project November 2020 cash call ($8.96Million plus interest) and the December 2020 cash call

 


Savannah May Get A Trickle of Crude Oil to Zinder Refinery In Niger Republic

Savannah Petroleum intends to commence installation of an Early Production System by the end of financial year (FY) 2021, market conditions and financing permitting, and intends to deliver its initial production of 1,500Barrels Per Day from the R3 East development, to the Zinder refinery in Niger Republic.

“Subsurface work has been progressing well following the completion of our Pre-Stack Depth Migration (PSDM) processing of the R3 East seismic in 2019”, Savannah explains in a release. Savannah has now completed the seismic interpretation of the R3 East area. The PSDM dataset shows an overall improvement in the interpretation of faults and horizons, supported by attributes analysis which has also improved our structural, stratigraphic and sedimentological interpretations. Based on the newly interpreted PSDM, 3D geocellular models have been built for the Amdigh and Eridal discoveries. The resulting oil in place volumes are in line with previously reported estimated figures from the Niger CPR dated April 2020.

Significant further potential on the Savannah PSC areas remains, with 146 further potential exploration targets having been identified for future drilling consideration as Savannah looks to follow up on its highly successful R3 East drilling campaign in 2018, which saw five exploration discoveries from five exploration wells. The R3 East portfolio is currently being re-evaluated based on the newly interpreted PSDM seismic dataset with a focus on the deeper Cretaceous plays.

 


WELLSWORTH ENERGY SERVICES RECEIVES ISO 9001:2015 AND ISO 14001 INTEGRATED MANAGEMENT SYSTEMS CERTIFICATION.

PARTNER CONTENT

Wellsworth Energy Services Limited (WESL), a Nigerian oilfield service company, officially received its ISO 9001:2015 and ISO 14001 Integrated Management Systems Certification from the Standards Organisation of Nigeria (SON).

The certification was delivered on December 8, 2020.

Wellsworth specialises in the provision of oilfield Drilling & Production chemicals, Equipment Rental & Engineering services to Exploration and Production companies. SON is the Nigerian regulatory agency tasked with ensuring compliance to laid-down operating procedures and guidelines for various sectoral service organisations.

At a ceremony held at Wellsworth’s headquarters in Victoria Island, Lagos, the SON team led by Engineer Felix Nyado, Fsi, Director, Management Systems Certification representing the Director-General of the agency and Mallam Farouk A. Salim officially presented the Certification to Mr. Olusola Falodun, the company’s Managing Director.

The Director-General commended Wellsworth Energy Services Limited for undertaking the audit process to ensure their internally-developed systems and procedures measure up to globally acceptable standards. The ISO 14001 is an Environmental Management System while the ISO 9001 is the Quality Management System, which its dual use will strengthen the systems and processes of Wellsworth Energy in line with her Corporate Strategy of exceeding internal and external stakeholder expectations

The presentation of the ISO9001:2015 and ISO 14001:2015 certificate to Wellsworth Energy Services Limited effectively puts the organisation  in the elite league of those service companies  adhering to a high level of globally acceptable standards. Re-certification occurs every three years, with routine annual surveillance checks. The initial certification comes up for renewal in 2023. Negligence or untimely correction of non-conformities within an observed space of time can result in the withdrawal of the certificate.

Wellsworth Energy Services Limited has been in existence since 2007 and provided oilfield services through partnerships with credible local and multinational companies. Wellsworth undertook a rebranding exercise in 2017 to streamline service offerings and deepen customer-facing activities aimed at sustaining shareholder value. The multi-layered technical and management experience offered by Olusola Falodun (Managing Director) and Emeka Emezi (Executive Director) have ensured development and implementation of the company’s strategic initiatives. The company’s employees have a combined work experience of over 100 years in land, swamp, shallow water and deep water terrain garnered in regions such as Nigeria, Gabon and the Middle East. Wellsworth Energy services Limited has as its core competencies in the provision of drilling fluids and production chemicals used in the drilling and production sectors of the Oil & Gas industry ensuring production of crude oil with API qualities according to clients’ specification.

In its short span of existence, Wellsworth Energy Services Limited has worked in the IOC-dominated deep water terrain with SNEPCO, TOTAL & Chevron and Mobil Producing Nigeria, Elcrest, in the shallow water field and Nigeria Agip Oil Company on Land to mention a few. With certification of its processes and procedures, the company brings to bear the ability to influence to the highest possible standards the level of performance of any and all stakeholders associated in the drilling and production phase of the oil and gas industry, so echoes Emeka Emezi.


TOTAL Annexes a New Acreage in East Mediterranean

French supermajor TOTAL says that an international consortium it is leading has signed an exploration and production agreement with the Egyptian Natural Gas Holding company (EGAS) for the North Ras Kanayis Offshore block located in the Herodotus Basin, offshore Egypt in the Mediterranean Sea.

TOTAL will operate the block with 35% equity. AngloDutch giant Shell holds 30%, with Kuwait Foreign Petroleum Exploration Company (KUFPEC) having 25%. Tharwa Petroleum, an Egyptian state hydrocarbon firm, holds the remaining 10%.

North Ras Kanayis is an exploration acreage covering 4,550 square kilometres, extending from 5 to 150 kilometres from the shore, with water depths ranging from 50 to 3,200 metres. The Herodotus Basin is an underexplored area and the agreement includes a three dimensional (3D) seismic campaign during the first three years.

‘‘TOTAL is pleased to further strengthen its Eastern Mediterranean position as an operator of this exploration and production agreement’’, commented Kevin McLachlan, the French major’s Senior Vice President Exploration. “We are excited by the exploration potential of the North Ras Kanayis Offshore block. It reinforces our presence in Egypt, following a gas discovery made in July 2020 with the Bashrush well on the North El Hammad license, to be developed through a tie-in to nearby existing infrastructure.”

TOTAL holds a working interest of 25% in the North El Hammad license, alongside operator ENI (37.5%) and BP (37.5%)


Nigeria’s Opaque Marginal Field Bid Round Process Escalates the Risk of ‘Investment Scare’

By the Editorial Board of Africa Oil+Gas Report

The Department of Petroleum Resources (DPR), Nigeria’s hydrocarbon regulatory agency, started emailing letters to potential awardees of the country’s Marginal Fields Bid Round over the last week of 2020.

But the fact that the agency does not publish a list of these potential awardees, and does not send the letters all at once, but chooses to distribute the letters in batches, sometimes in the wee hours of the morning, has raised concerns about the transparency of the process. It also heightens the risk of assurance of investment inflows.

The three and half month-long bid round exercise was launched on June 1, 2020 and concluded on September 15, 2020. The bid analysis, carried out by the DPR, was concluded a month after and the result dispatched to President Muhammadu Buhari for approval.

Since the President’s nod, the follow up process has been so opaque that speculations have replaced public conversations that open bid rounds supposedly engender. Nobody said that this was a discretionary award, so why should the standard discussion of the bid process begin with: “Have you received your letter?”. If the list was published no one would be making such a stress induced query. And no one would be suggesting that there are “checkpoints” at the Ministry of Petroleum Resources, where agents are demanding bribes to deliver letters, or add companies to the approved list. Openness is important.

The DPR’s tepid public statement, released on December 31, 2020, sheds only very little light. “161 successful companies have been shortlisted to advance to the next and final stage of the bid round process for 57 marginal oilfields in the country”, it says. What the statement does for us at Africa Oil+Gas Report, is that it confirms the numbers-of those shortlisted- in our story of December 16, 2020. But it gives us no comfort to note that the Ministry of Petroleum Resources appears uncomfortable to publish the approved list of shortlisted companies for a bid round that has received the President’s nod for close to a month.

For all the strident conversations around probity in public office, for all the talk about Nigeria’s poor reputation as an investment destination; for all the challenges that the country has with revenue generation, for all the problem about a soaring debt burden, this highly patronized marginal field bid round was an opportunity to show that the country was open for business.  600 applications for a bid round is a high figure by any standard anywhere in the world. But it is not one to be taken for granted. People flock to Nigerian marginal fields- where at least a well has proven hydrocarbon resources in place, and most fields are sited in the producing parts of the basin- than they do to acreage licencing rounds, in which the tracts are located largely on the margins of the Niger Delta and many of the available assets are exploratory.

Even as the competition is open only to locals, the investment dollars are largely coming from abroad-as development of 57 fields in a two-to-four-year span cannot be funded by Nigerian lenders alone. This means that, with this process, Nigeria has attracted the gaze of the global investment community. It is about hydrocarbon resources, aftercall.

It is so unfortunate, then, that the current leadership at the Ministry of Petroleum Resources has chosen to throw away the chance to show that competitive bids for Nigerian hydrocarbon resources can again be open and transparent, after years of struggling with reputational damage.

Whatever happens after now, with this process, the waters have already been muddied.

This editorial is a public service-oriented opinion of the Africa Oil+Gas Report


Shaky Before the Goal Post: Business Lessons from Austin Avuru’s Biography

By Toyin Akinosho

One evening in 2009, Austin Avuru, then CEO of Platform Petroleum, received a call from Nasir Ado Bayero during which the latter asked if Platform would be interested in purchasing Shell’s stake in Oil Mining Lease (OML) 38, in the western Niger Delta.

The offer, it turned out weeks later, was on condition that Platform was willing to go into partnership with Shebah Exploration and Production, then headed by Ambrosie Bryant Chukwueloka (ABC) Orjiako, a flambouyant orthopedic surgeon who was becoming widely known for his interest in oil and gas. Shell could divest its stakes in OMLs 4, 38 and 41 to the partnership.

“I had never really met Dr. A B C Orjiako until that time”, Avuru says in A Safe Pair of Hands, his just released authorized biography, written by Peju Akande and Toni Kan. “I knew him from a distance. I had known people who were working for him and I always saw him in the same mould as Kase Lawal, whom I had worked for: young men who were operating at a very high level in the O&G industry. Now, that itself was an issue because I had to treat him with absolute caution. I didn’t want to go into partnership with somebody that could “swallow” me. My thinking was, I don’t want wahala”.

Considering that Avuru had earned a reputation, already at the time,  as a public intellectual and strident critic of Nigeria’s policy choices, it is quite instructive to find that he harboured a sense of insecurity at the thought of meeting a potential business partner. It’s an enormously useful piece of information for Business students:  knowing that people they see as phenomenal also have their vulnerabilities.

“For a start”, Avuru recalls, “we had to name our new company, so I suggested that we joined Sepcol and Platform together to form SEPLAT”.

That Avuru led the company as CEO for 11 years is a well-documented part of Nigeria’s corporate history. But the story above is one of the many nuggets that make A Safe Pair of Hands, published in Lagos by RADI 8, such a riveting business thriller.

There’s one revealing anecdote after another startling insight.

A few of the passages that leapt at me from the pages:

The authors, Toni-Kan, left and Peju-Akande

Keep your eyes on the ball:

Shell didn’t have faith in Nigerian banks. They wanted Letters of Credit backed with cash guarantees. They preferred to deal with a global player.

ABC Orjiako suggested BNP Paribas, the French bank he usually did business with. Austin Avuru thought it was a good idea but the moment BNP Paribas asked for a $3Million transaction fee, Austin Avuru flew into a rage.

“For what?” he thundered. “How can they charge $3m for merely facilitating a deal? I won’t hear it.”

ABC Orjiako urged his new partner to be calm.

“Austin, I will pay the $3Million myself if need be but we need a bank with global connections, one that speaks the language of global finance and confident enough to get Shell back to the table.”

BNP Paribas turned out to be what was needed. Once the deal was signed they made a suggestion that changed the whole process and saw Seplat buy up OML 4, 38 and 41 without spending one kobo.

How did this happen?

BNP Paribas informed Seplat that a French company had just sold its interests in Congo and was awash with cash. Would Seplat like an introduction?

Maurel and Prom was interested in the deal put forward by Seplat and BNP Paribas and agreed to go with Seplat to London.

BNP Paribas was already earning its fee and Austin Avuru could see clearly now that the move to get a western bank was a smart one.

Deep knowledge will set you free from the tyranny of NNPC

After we had reached agreement with Maurel & Prom, the chairman of Maurel & Prom said he would like to visit Nigeria to see for himself the field his company was investing in.

At this point, Shell did not want their staff to know that they were on the verge of selling their assets. I remember when we made the trip to Sapele and Oben to inspect the facilities, Shell had to tell their staff that Platform Petroleum, which had a marginal field in there was merely inspecting their facility just in case we needed to send our production there.

After that trip, we were meant to take the chairman of Maurel & Prom to go and see the minister. Dr. Rilwanu Lukman was the adviser then. We had spoken to him before and he was very happy that we were doing that transaction. He said “oh, yeah, we will talk to NNPC and once NNPC gives the approval, we will approve it, that’s it.”

But in between giving us that promise and when we physically went to visit him, operatives inside NNPC and the DPR had given him an opinion that he should not allow us to proceed with the transaction.

In fact, some whiz kid head of legal at NAPIMS had given him an opinion which generally said that Shell had nothing to sell, that under the Petroleum Act, everything inside the ground belonged to the Federal Government.

But what he glossed over was the fact that all the operators who have a JV interest have an economic interest. That’s why they can list the value of their economic interest on the stock exchange. So, how can you then say that they have no value to sell?

‘Rags to Riches’ is not a cliché:

“I was very short before I went to the boarding house. When I got to the boarding house, the food they ate was beans and yam, rice and dodo and the occasional swallow. I came in October, then went home for mid-term in December. When I got to Abbi, I just sauntered into my compound. My aunt was visiting and she looked up and asked “who is this o?” I said I was the one. She peered close and exclaimed – “You are tall.” Not understanding what she was saying I went inside. Back then we had all these long mirrors at home. I stood in front of the mirror and looked and saw that it was true. I had sprung up. If I hadn’t go to that boarding school, I would have died a short man. What had happened was simple; I had started eating balanced diet.”

From the backwaters of the Niger Delta, in Nigeria’s oil rich region, to one of Africa’s most influential boardrooms, Austin Avuru’s story of becoming reads like a dream. Despite its being a master class work on the audacity of entrepreneurial undertaking, the 220 page story is an old fashioned, feel good tale. And that’s because it has benefitted from careful research and painstaking delivery by a pair of writers with a keen eye for the diversity of human relationships: our foibles, triumphs, generosity, candor, nepotism.

This book is a must read for anyone who believes in potential.

 


No Oil, Only Gas, in the Future of Sasol

By Fleetwood Grobler Sasol’s President and Chief Executive Officer

 

 

 

 

 

 

 

Future Sasol will comprise two market-focused businesses, Chemicals and Energy.

A key decision as a result of this is the discontinuation of all oil growth activities in West Africa and

resizing our upstream portfolio to focus on gas.

The revision of our strategy aims to have a greater focus on value realization for all stakeholders, business sustainability and enhanced cash generation. It acknowledges the need to streamline what was

previously a complex and wide portfolio.

The Chemicals Business will transform our portfolio towards specialty chemicals in which we enjoy differentiated capabilities and strong market positions that can be expanded over time. We will continue to focus on our commodity chemicals portfolio, however this will diminish over time as we focus more on specialty chemicals.

The Energy Business comprises the Southern African value chain and associated assets and will be positioned for higher cash generation through improved margins, cost efficiency and divesting of assets with low returns. This business will also pursue Greenhouse Gas (GHG) reduction through a focus on gas as a key complementary feedstock and renewables as a secondary energy source. These will be critical enablers to achieve our 2030 GHG reduction target and our longer-term sustainability aspirations.

These two businesses will be fully accountable for profit and loss, management of resources and capabilities. A lean corporate centre will enable the businesses by fostering synergies and integrating activities, setting strategic boundaries and allocating capital. These developments will support improved financial returns.

In tandem, resetting our strategy necessitated a revised operating model, which will become effective on 1 November 2020. The top leadership structure has already been realigned and optimised to enable this new model.

Our intent with Future Sasol is to deliver a Group that is streamlined, focused and positioned to succeed. It is therefore a matter of much regret that not all our employees will be able to make the journey to the new Sasol. In this, unfortunately, we have no choice. We have to put the sustainability of Sasol first, and the steps we are following are taken with only this in mind.

Future Sasol will not only look different, it will behave differently, requiring a change in culture and ways of working, and will be more open to partnering arrangements. It will remain heavily committed to South Africa and plans to work closely with the government to align with the country’s energy and economic goals.

-Sasolburg, August 21, 2020

Published for the benefit of paying subscribers in the August 2020 edition of Africa Oil+Gas Report


Waltersmith Formally Gets Seplat’s Nod as a Supplier of Refinery Feedstock

Seplat Petroleum has formally signed off on an agreement to supply between 2,000 and 4,000 Barrels of Oil Per Day from its working-interest production fin the Ohaji South Field in Oil Mining Lease (OML) 53 to Waltersmith Petroman Limited’s just completed 5,000BOPD capacity refinery in Ibigwe, in the east of Nigeria

Seplat, a Nigerian independent listed on both the Nigerian Stock Exchange and the London Stock Exchange, has operated output of about 7,000BOPD in the field at optimum, of which 2,800BOPD is its current, optimal working interest.

Previously, Seplat’s share of Ohaji South crude was primarily evacuated to the export Terminal via a third-party Crude Handling Agreement with Waltersmith.

“This new agreement benefits Seplat by selling its crude oil directly to Waltersmith for refining, thereby eliminating crude losses and downtime experienced along the evacuation and export route. The transaction would also boost the capacity of Waltersmith in providing its products particularly to the immediate region of our operations thereby supporting Seplat’s commitment to national energy security”, Seplat says in a release.

“This Crude Purchase Agreement with Waltersmith ensures that Nigerian crude will be refined locally by a Nigerian refiner”, says Roger Brown, Seplat’s CEO. “The agreement will eliminate losses we previously experienced on the export pipeline, meaning more revenue will be booked by Seplat for the same amount of oil produced from the field. Waltersmith’s refinery will also benefit the Nigerian economy by creating local jobs to refine our oil.”

Seplat maintains its guidance of 48,000 – 52,000BOEPD for the 2020 financial year.

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