All posts tagged farm in-farm out


FAR Finally Agrees to Sell to Woodside in Senegal

Shareholders of FAR Limited, the Australian hydrocarbon property broker, have agreed to sell the company’s stakes in Senegal to Woodside Energy.

The deal is that Woodside will pay FAR, $45Million, then reimburse FAR’s share of working capital, including any cash calls, from  January 1, 2020 to completion of the sale, with entitlement to certain contingent payments capped at $55Million. 

Woodside moved, last December, to exercise its right of first refusal to preempt the sale of FAR’s interest in the Rufisque offshore, Sangomar offshore and Sangomar deep offshore (RSSD) contract area to the Indian player ONGC Videsh Vankorneft. FAR’s interest in the RSSD Joint Venture comprises 13.67% of the Sangomar exploration area and 15% of the remaining RSSD evaluation area. 

By the time the transactions are concluded, Australia’s largest E&P firm would have bought up all the stakes belonging to its partners Cairn Energy and FAR in Senegal. It will then hold 82% working stake in the Sangomar exploitation area with the state owned Petrosen holding 18%. Its working interest in the remaining Rufisque, Sangomar and Sangomar Deep (RSSD) evaluation area (including the FAN and SNE North oil discoveries) will be 90%, while Petrosen holds 10%.

In January 2020, Woodside took Final Investment Decision to develop the Sangomar field, located in 800 metres of water. It will be Senegal’s first offshore oil project and the floating production storage and offloading (FPSO) vessel will have a production capacity of approximately 100,000 barrels of oil per day. The execute phase of the Sangomar Field Development includes the drilling of 23 wells, construction and installation of the subsea network and the construction and installation of the FPSO. The company targets first oil in 2023.

In December 2020, Woodside concluded the completed the acquisition of Cairn’s interest with the purchase price of $300Million plus a working capital adjustment of approximately $225Million, which included a reimbursement of Cairn’s development capital expenditure incurred since 1 January 2020. Additional payments of up to $100Mllion are contingent on commodity prices and timing of first oil.

After all these buys, Woodside will, in its own view, have“simplified the structure of the joint venture ahead of our planned equity sell-down in 2021”. 

The company is convinced that the Sangomar development “is an attractive, de-risked asset that offers near-term production to potential buyers.”


Dana’s Egyptian Assets Still Up for Grabs

By Mohammed Jetutu

Dana Gas, the Abu Dhabi listed independent, is still looking for buyers for its Egyptian onshore oil and gas assets, after it failed to consummate a sales and purchase agreement with IPR Energy Group, another middle eastern minnow.

The two had signed a tentative agreement on the transaction, worth $260Million in October 2020. But some of the conditions precedent for the sale to go through were not met by the agreed time-frame on April 14, 2021, Dana said. “A number of conditions precedent to the transaction could not be completed to the satisfaction of both parties,” the company, which describes itself as the ‘Middle East’s largest private sector natural gas company’, declares in a briefing. “The Board has therefore decided to retain and operate the assets in Egypt alongside the highly prospective exploration acreage offshore Block 6”. Patrick Allman-Ward, Dana Gas’ Chief Executive Officer, commented.

The sale was previously due to close in 1H2021.

What Dana Gas Wants to Sell

Dana Gas is a 100% operator in four concessions and 50% non-operator of one concession, all located in onshore Niger Delta. The concessions include: El Manzala, West El Manzala andWest El Qantaraall covering 796 square kilometres, with an estimated 89Million Barrels of Oil Equivalent (BOE) of reserves(Gaffney Cline and Associates). The four concessions include 15 development leases with gas and condensate production from 15 fields. Gas production is about 155 MMscf/day 5,300Bbls/Dcondensate plus 235 tons/day of LPG, totaling 33,000BOEPD in 2020, an 8% decline from 30,300BOEPD in 2019, as a result of natural field declines. Dana Gas has been looking to offload these assets since July 2019, when it declared that a sale would allow it to double down on its more promising operations in Iraqi Kurdistan.

What Dana Gas Wants to Keep, in Egypt

Dana Gas is 100% operator of one offshore concession in the Eastern Mediterranean, a growing natural gas hub.


Angola Starts Roadshows for April-June 2021 Bid Round

By Macson Obojemoinmien, in Windhoek

Angola’s hydrocarbon regulatory agency Angolan National Oil, Gas and Biofuels Agency (ANPG) has scheduled, for Tuesday April 6, 2021, a hybrid online and physical roadshow for the country’s next acreage licencing-round, at the Talatona Convention Centre in Luanda.

This will kickstart a series of both digital and in-person roadshows and technical presentations to promote the blocks to be awarded in key international markets. This event will also provide the opportunity for investors to engage with the agency regarding the blocks on offer, the data packages and the accessibility studies, as well as touch upon environmental, logistical and local content issues.
The contest proper starts on April 30, 2021. The deadline for the submission of proposals runs until June 9, 2021, in compliance with the 40 days provided for by law, and the opening ceremony for proposals will take place on June 10, 2021.

In line with the provisions of Presidential Decree No. 86/18, of 2 April 2019, which establishes the rules for the organisation of bid rounds, the bid round will unfold as follows:

  • Tender Launch
  • Proposal submission
  • The opening of offers from potential suitors in a public setting
  • The evaluation and qualification of proposals
  • The submission of the evaluation report to the Ministry of Mineral Resources and Petroleum and Gas
  • Contract negotiation with the winners of the bid-round

Data available includes 2D seismic coverage of the LowerCongo Basin, a recently updated Geological Map and Database of the Onshore Kwanza Basin and a compilation of recent aeromagnetic data covering the Transition Zone and Shallow Waters of the Lower Congo and Kwanza Basins.

Nine blocks are on offer, in the Lower Congo and Kwanza Basins: they include:

  • Three blocks of the lower Congo onshore Basin CON1, CON5 and CON6
  • Six of the Kwanza onshore Basin (KON5, KON6, KON8, KON9, KON17 and KON20)

The country’s International Competitive Bid Round for oil gas licenses, announced in 2019, is a scheduled offering for onshore and offshore, in the period 2019-2025.

ANPG), awarded three blocks: 27, 28, and 29, offshore in the deepwater Namibe Basin in 2019.

In 2020, the bidding plans were disrupted by COVID-19 complications.


Nigerian Marginal Fields Bid Round: Third Letter Out, Signature Bonus Called

 

By the Editorial Board of Africa Oil+Gas Report

The country’s least transparent bid round in 20 years inches towards some closure

The Department of Petroleum Resources (DPR), Nigeria’s regulatory agency for the hydrocarbon industry, has distributed the third letter in the series of correspondences it has been sending to, apparently, the 161 companies selected as winners of interests in the 57 marginal fields on offer in the country’s second marginal field bid round.

The third letter specifies the percentage awarded to the recipient and the signature bonus expected of it by government. The letters were emailed on March 2, 2021 and the authorities expect the signature bonus to be paid in 45 days, and it could be paid in either the local currency Naira or in US Dollars.

The total signature bonus per field ranges from $5Million to $20Million, but since no single field is assigned to a single company, the signature bonus demanded from each company correlates with the percentage interest in the field offered to the company. If the entire signature bonus charged to Field A is $5Million, a company assigned 20% equity in that field is asked to pay a signature bonus of $1Million.

Names of those who have been granted the awards remain largely in the realm of speculation, as the authorities have not published the list. This latest correspondence to awardees still doesn’t specify who your partners are and doesn’t tell who operates the field, but the partners on each field are expected to jointly create a Special Purpose Vehicle to operate the asset.

The lack of knowledge of who your partners are raises the risk involved in the funding of the signature bonus. So does the instruction to awardees attached to every field to create a Special Purpose Vehicle (SPV) to act as operator.

Africa Oil+Gas Report learns that winners of this round include at least three marginal field operating companies. There are also at least three companies, run by members of PETAN, the umbrella grouping of oilfield engineering contractors. Other companies that have reportedly received letters include those promoted by retired technical staff of some of the oil majors operating in Nigeria.   But there is a lot of talk about wheeling and dealing in Abuja and names of companies that have been awarded fields who didn’t even apply. The only way to dissuade anyone from believing false conspiracy theories is to know who got what at every stage of the process.

The first of the three letters emailed to “winners” indicated that the addressee was qualified for a certain field. The second letter then merely asked the awardee to specify which currency they want to pay the signature bonus in. This third letter, then, which specifies the percentage that the awardee has on the field and requests for payment of signature bonus by a certain date, is the first firm commitment the authorities are making to an awardee. But questions around who other partners are and who to operate the field indicate that there will either be a fourth letter, or the DPR will publish a list on which the fields, the awardees to each field, the signature bonus and the operator will be. It’s quite exhausting.

The ongoing bid round has been the least open of all the non-discretionary awards organized by the Nigerian authorities since the country’s first competitive lease sale was announced in 2000. Prior to 2000, the year after Nigeria’s return to democratic governance, the country’s sole process of granting awards of acreages was discretionary. The 2003/2004 Marginal field bid round was a high-water mark in the annals of licencing rounds in Nigeria. 120 companies were shortlisted from a bidders’ list of less than 200 companies that applied for 24 fields, with their names all published. For each of the 24 fields, five companies were then asked to appear before a jury, and give technical and financial presentations on their proposed paths to first oil. The jurors at those presentations included DPR representative, who chaired the jury; a ranking technical staff of the IOC on which the marginal field lies (who is the farmor) and a representative from the NNPC. What that jury composition suggested was that the key stakeholders on a marginal field were all involved in determining who was going to develop it. The signature bonus was a flat $150,000. Companies were granted fields on the basis of convincing the jury with technical and financing argument on field development. In spite of all that rigour, 11 fields still did not achieve production 16 years after the farm out agreements were signed. Compared with the 2003/2004 process, the current round is a long walk in the dark.

Nigerian bid rounds have deteriorated in the quality of transparency since the 2003/2004 marginal field bid round, but the ongoing round surpasses all in its high level of opacity.


Angola Says Data Checks for Bid Round Is Free

Angola’s National Agency of Petroleum, Gas and Biofuels says it has made available for free consultation the data packages related to the concessions that will be put out to tender starting in April.

“However, the geophysical data (seismic and magnetometric) do not integrate any of these packages, being obligatory to pay a fee for their acquisition”.

According to ANPG, the available packages contain the compilation of existing data, duly selected, related to the concessions to tender. The aim is to assist potential interested parties in the evaluation they are going to carry out and support them in decision making.

The agency, however stresses that companies will still have to buy the data if they want to interprete.

“The geophysical data (seismic and magnetometric) do not include any of these packages, being obligatory to pay a fee for their acquisition”.

For this tender, which started in late 2020, two data packages were prepared, taking into account the two terrestrial basins to be tendered – the Lower Congo and the Kwanza.

The Lower Congo Terrestrial Basin Data Package , relating to three blocks (CON 1, 5 and 6) consists of geological information on the 24 wells of the three blocks to bid and the remaining 33 wells of the adjacent blocks, as well as 14 reports studies that detail the stratigraphy, structural component and prospective; accessibility study (Atlas); georeferenced information (maps); and legal / legal information.

The Kwanza Land Basin Data Package , relating to six blocks (KON5, 6, 8, 9, 17 and 20) is also composed of geological information (reports and diagrams) from 47 wells, 36 of which belong to the blocks to be bid and 11 wells belonging to the neighboring blocks; 13 reports of abandonment of the main producing fields in the basin; seismic data (vintage seismic); accessibility study (atlas); georeferenced information (maps); and legal / legal information.

For both packages, ANPG stresses that geophysical data (seismic and magnetometric) are not part of these packages, so interested parties should purchase them from their partners Delta Development Management (Lower Congo) and GEOTEC and ION / GXT (Kwanza ).

“The disclosure of these packages, in a free session – which can be done in person or online – contributes to making the bidding process more transparent, allowing interested parties to know the data available before they acquire them for more accurate and accurate study and analysis “

– ANPG

Interested companies should contact the National Oil, Gas and Biofuels Agency through its website ( www.anpg.co.ao ), e-mail or even by letter, requesting an appointment for a data consultation session. These sessions will be free and can be virtual or in person, depending on the possibilities of the interested parties, but always carried out according to the rules in force in the context of the pandemic still in force.

 


Sapura’s Not Going Down with Seadrill

Malaysian driller Sapura Energy Berhad has declared that its joint venture with Seadrill, namely Sapura Navegacao Maritima SA (SNM), is not impacted by the recent Chapter 11 cases filed by several Seadrill subsidiaries operating in Asia.

In a clarification to Bursa Malaysia, the country’s Stock Exchange, Sapura  states the Chapter 11 filing by Seadrill, which is an internationally renown Scandinavian drilling company, does not involve Sapura or entities related to the corporate structure of the joint venture, stressing  that the filing has no financial impact on Sapura Energy’s business plans and financial strength.

Sapura Navegacao Maritima SA (SNM) is the only joint venture between Sapura Energy and Seadrill.

Headquartered in Rio de Janeiro, SNM is one of the leading subsea services operators in the Brazilian market, with a fleet of submarine service vessels providing support, installation and flexible pipe laying expertise to clients in the region.

The company has a workforce of more than a thousand professionals, from 21 different nationalities. SEB’s clarification was in response to a media report linking Seadrill’s Chapter 11 filing of its Asian units, to the Brazil-based SNM. In the clarification, SEB also explained that the filing has no effect on its contracts with Petrobras, which forms the main revenue for SNM; and does not trigger any cross default for the joint venture’s business financing.


Egypt Will Launch Another Bid Round Before March 2021

By Toyin Akinosho

State-owned Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas Holding Company (EGAS) will launch a new oil and gas exploration tender before the end of February 2021.

The tender will include offshore blocks in the Mediterranean and Nile Delta, as well as onshore areas in the Western Desert and Eastern Desert, according to Tarek El Molla, the country’s flambouyant Minister of Petroleum.

The lease sale announcement is coming barely six weeks after Mr. El Molla signed nine new agreements worth more than $1Billion with six international and Egyptian companies to explore and produce oil and natural gas in parts of the Mediterranean and Red Sea. The agreements are for the drilling of 17 new exploration wells.

El Molla said in January that three additional agreements were pending approval in the near future. The total of 12 deals targets the drilling of 23 wells in nine regions in the Mediterranean and three regions in the Red Sea, with a minimum total investment of $1.4Billion.

Egypt is a perennial organizer of lease sales. It is the largest producer and the biggest domestic consumer of natural gas in Africa. But its record in crude oil production is shabby, despite its persistent bid rounds. Last year, it produced an average of 600,000Barrels of Oil Per Day, the lowest in 40 years.


New Debt Arrangement Completes the $680Million Financing of the ANOH Project

The ANOH Gas Processing Company (AGPC), has successfully raised $260Million in debt to fund completion of its ANOH Gas Processing Plant.

The 300 Million standard cubic feet per day (300MMscfd) capacity ANOH plant, located on OML 53 in Imo State, is being built by AGPC, which is an IJV owned equally between Seplat-the dual listed company on the London and Nigerian stock exchanges, and the Nigerian Gas Company (NGC), a wholly owned subsidiary of Nigerian National Petroleum Corporation (“NNPC”).

Seplat and NGC have previously provided a combined $420Million in equity funding and the project is now fully funded.

The $260Million funding was provided by a consortium of seven banks: Stanbic IBTC Bank Plc (advisor), United Bank for Africa Plc, Zenith Bank Plc, FirstRand Bank Limited (London Branch) / RMB Nigeria Limited, The Mauritius Commercial Bank Limited, Union Bank of Nigeria Plc and FCMB Capital Markets Limited. It allows for an additional $60Million accordion at the time of completion to fund an equity rebalancing payment at that time, if considered appropriate. Funding commitments of more than $450Million were received by the company, which is a significant oversubscription and a strong sign of confidence in the project.

Following a cost optimisation programme, the AGPC construction cost is now expected to be no more than $650Million, inclusive of financing costs and taxes, significantly lower than the original projected cost of $700Million.

ANOH is one of Nigeria’s most strategic gas projects. It will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation.

Seplat is a leading provider of natural gas to Nigeria’s power sector, supplying around 30% of gas used for electricity generation.

 

 

 


In Senegal, Woodside Wants it All

Barely three months after pre-empting the sale of Cairn Energy’s interest in the Senegalese oilfield development and adjoining discoveries to a third party, Woodside Energy has made the same move on a similar transaction by FAR.

In mid-August 2020, the Australian explorer executed its right of first refusal to Cairn Energy’s sale of its 40% interest to LUKOIL, the Russian giant.

Last weekend, it pre-empted the sale of FAR’s i15% interest to the Indian company ONGC.

If Woodside successfully acquires both Cairn’s and FAR’s interests, its working stake in the Sangomar exploitation area will be 82%, with the state owned Petrosen holding 18%. The working interest in the remaining Rufisque, Sangomar and Sangomar Deep (RSSD) evaluation area (including the FAN and SNE North oil discoveries) will be Petrosen 10%, and Woodside 90%.

That is if the Senegalese authorities approve the transactions, as they are.

But Woodside is not there yet.

Although Cairn Energy PLC shareholders voted in favour of the sale and purchase agreement for Cairn Energy’s stakes on 23 September 2020, the transaction with FAR still depends on the outcome of a shareholder meeting, scheduled for December 21, 2020. “The shareholder meeting documentation expressly contemplated that such authorisation would cover the exercise of a pre-emptive right”, FAR says in a release.

Woodside has offered FAR the exact terms of the FAR/ONGC Transaction, including: • Payment to FAR of $45Million • Reimbursement of FAR’s share of working capital, including any cash calls, from 1 January 2020 to completion • Entitlement to certain contingent payments capped at $55Million.

Woodside says that the acquisition will be funded from current cash reserves.

Woodside CEO Peter Coleman said the acquisition of FAR’s participating interest makes the value proposition for Sangomar even more compelling. “Sangomar is an attractive, de-risked asset in execute phase, offering near-term production. The acquisition is value accretive for Woodside shareholders and results in a streamlined joint venture which will assist in our targeted sell-down in 2021”.


Indians to Take over FAR’s High Profile Assets in Senegal

By Toyin Akinosho

FAR has finally found a buyer for its high profile oil and gas asset offshore Senegal.

ONGC, the Indian state hydrocarbon company, has agreed to buy the property, which includes FAR’s entire interest in the Production Sharing Contract for the Rufisque, Sangomar, and Sangomar Deep Offshore Blocks offshore Senegal and the relevant Joint Operating Agreement (the RSSD Project).

The Sangomar exploitation project, located in these blocks, is the largest offshore crude oil development currently under construction in Africa. Phase 1 development of the project, which will develop some 250Million barrels of oil, remains on track for targeted delivery of first oil in 2023. Production from this phase is expected to be around 100,000 barrels of oil per day (BOPD).

The Australia listed minnow, which has struggled as a going concern-and has defaulted on paying cash calls on the project- in the last two quarters, says it has entered into a Sale and Purchase Agreement with ONGC (full name ONGC Videsh Vankorneft Pte Ltd), the largest E&P company of India, which has agreed to pay FAR $45Million at completion. In addition, ONGC has agreed to reimburse FAR’s share of working capital for the RSSD Project from 1 January 2020 totalling $66.58Million, payable on completion. The reimbursement is comprised of cash calls paid by FAR, including $29.60Million paid to cure FAR’s default to the Joint Venture. The Transaction also includes an entitlement to certain contingent payments capped at $55Million.

The Transaction is subject to conditions precedent, including the following:

  • The written approval of the Minister of Petroleum and Energies for the Republic of Senegal to the transfer of the Transferring Interest to the Purchaser being obtained. FAR hopes that such approval would be obtained in January 2021.
  • RSSD Project Pre-Emptive Rights – The Transaction is conditional on the waiver or non-exercise of preemption rights available to FAR’s co-venturers in the RSSD Project. FAR is issuing the pre-emption notices between November 11 and November 12, 2020, and the co-venturers have 30 days to advise if they wish to exercise their right to preempt the Transaction on the same terms and conditions as ONGC. In the event of pre-emption, FAR will receive the same consideration as from ONGC.
  • FAR Shareholder Approval – ASX Listing Rule 11 requires that FAR obtains shareholder approval in relation to the Transaction. FAR intends to convene a general meeting of FAR shareholders as soon as practicable to be held in December 2020 to consider approving the Transaction (including if the sale is the subject of pre-emption).
  • Third Party Agreement Termination – The Transaction is subject to the termination or satisfactory resolution of an agreement between FAR and a third party, details of which are currently commercial in confidence. ONGC has the discretion to waive this condition.

Cath Norman, FAR’s Managing Director, describes the offer from ONGC as representing “the best option available at this time and we trust that our shareholders will vote for this transaction”. She reinstates the well-known fact that “the market for financing and selling assets has been weak since the impact of COVID was felt in March of this year”.

If the Transaction completes, the company anticipates, “FAR will be in a strong financial position and will be relieved of its future development obligations in relation to the RSSD Project, which in the absence of a sale, FAR cannot currently meet beyond December 2020”.

FAR expects to have approximately $130Million in cash at the close of this Transaction that, Ms. Norman says,” will be used to rebuild the Company and further our other West African prospects offshore the Gambia and Guinea-Bissau”.

Having been in the RSSD project for 14 years, “it’s a bittersweet moment to be selling our stake. FAR is committed to our projects in The Gambia and Guinea-Bissau and using our deep knowledge of the MSGBC Basin to potentially explore offshore Senegal again,” Norman declares.

© 2021 Festac News Press Ltd..