All posts tagged farm

Sirius, with Funds in Hand, Takes Over Management of Abura Field Redevelopment

Section: Farm in, Farm Out · December 18, 2022 · No comments |

Sirius has now fulfilled all conditions needed to access the funding facility for the planned redevelopment of the Abura field in Oil Mining Lease (OML) 65, and will assume key senior management positions within CMES–OMS Petroleum Development Company (COPDC) Limited, the organization which “owns” the project.

Sirius holds 30% in COPDC, who in turn has a Finance and Technical Sales Agreement (FTSA) with NNPC Ltd, the licenceholder of OML 65. But Sirius is the one bringing the finances, as well as technical and managerial expertise, to the project.

With these credentials, Sirius takes fuller control of OML 65 redevelopment, with its executives assuming the positions of Managing Director, Finance Director, Executive Director, and Vice-Chairman of COPDC “and will immediately begin to accumulate cash flow entitlements related to the assumption of operational responsibility for existing production at the Abura field”.

Following the approvals previously secured from NNPC regarding the commencement of Phase 1 of the OML65 Approved Work Programme (AWP), Sirius can now start drawing down funds under the senior loan facility of up to $200Million, executed with (the commodity trader) Trafigura, to finance the well drilling, re-entry and completion in OML 65, notably the Abura field, to boost production by as high as 11,000Barrels of Oil Per Day, to reach, around 16,000BOPD.

The project has come a long way, even though it is yet to take off.

The context: In 2019, COPDC, the Nigerian E&P company founded by Hosa Okunbor, who was very well connected to President Muhammadu Buhari, secured an FTSA with the Nigerian Petroleum Development Company (NPDC), an NNPC subsidiary which holds the right to OML 65, located onshore mid-western Nigeria, in the Niger Delta basin. COPDC had never operated an E&P asset before it was granted the FTSA, a deal it clinched largely as a result of political connections of its principal.

Sirius Petroleum, as of then, was desperate to get in on the action on any bankable hydrocarbon project. The OML 65 revamp, as it were, has provided it the first real opportunity for relevance.

Phase 1 of the AWP will be undertaken in conjunction with Baker Hughes under a Master Services Agreement (“MSA”) which has been executed with Sirius, and will involve the drilling of up to nine wells on the Abura field, intended to produce the remaining 2P reserves of 16.2 MMbbl1.

Conoil Pays Deposit for Chevron’s Stake in OMLs 86 and 88

Section: Farm in, Farm Out · January 25, 2021 · No comments |

By Jo-Jackson Mthembu, in Yenagoa

Conoil Producing, the Nigerian E&P independent owned by the billionaire Mike Adenuga, has paid a deposit for its purchase of the 40% equity held by Chevron Corp. in Oil Mining Leases (OMLs) 86 and 88.

Conoil won the drawn out bid for the two shallow water assets and had been in discussion with the California headquartered major, since Africa Oil+Gas Report broke the story in August 2020.

Conoil bid over $250Million for the blocks, which lie in contiguity with some of its own producing properties.

Chevron had been trying to dispose the shallow water acreages, located off the mouth of the current Niger Delta basin, for over six years. They are part of the five Nigerian tracts acquired in the course of the merger between Chevron and Texaco 22 years ago.

But things only revved up in the last 12 months. Africa Oil+Gas Report initially disclosed, in May 2020, that bidders were expected to have made full disclosure of their financial and operating capacities by the end of April 2020.

OML 86 contains the Apoi fields; the largest being North Apoi.

It also holds Funiwa, Sengana and Okubie fields. One recent discovery: Buko, straddles Shell Nigeria operated Oil Prospecting Lease (OPL) 286 and is either on trend with, or on the same structure as the HB field in OPL 286. OML 88 holds the Pennington and the Middleton fields, as well as the undeveloped condensate discovery, Chioma field.

The conclusion of this sale means that Chevron has disposed of all the legacy shallow water assets it acquired when it purchased Texaco in 1999.

Shell Sells OML 17 To Elumelu… Less than Half of What He Wanted

Section: Farm in, Farm Out · January 18, 2021 · 1 comment |

By Toyin Akinosho

Tony Elumelu wanted badly to purchase Shell &Co’s stakes in Oil Mining Leases (OMLs) 11 and 17.

Last Friday, January 15, 2021, Shell announced it had completed the sale of Shell &Co (meaning Shell, TOTAL and ENI)’s 45% interest in OML 17 to TNOG Oil and Gas Limited, a company controlled by the tycoon.

But the UK-Dutch major didn’t mention OML 11, whose operation it is no longer in control of.

TNOG, “a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc (Transcorp)”, had paid $453Million at completion, with the balance to be paid over an agreed period”, Shell said in the release. The balance is $80Milion.

$533Million appears to be a lot of money to be paid for OML 17 at this point in time, considering how the deal has travelled. The acreage, located north of Port Harcourt, the commercial hub of the Niger Delta region, contains such iconic Shell operated fields as Agbada, Obigbo, Obigbo North, as well as Otamini and Umuchem. It currently produces up to 20,000Barrels of Oil Per Day (20,000BOPD) and hosts facilities that can output 150,000BOPD. Gas production is less than 50Million standard cubic feet per day (50MMscf/d).

As far back as late 2016, Shell had demanded $1.2Billion for 45% interest in OMLs 11 and 17, a process constrained by the fact that the two licences were close to their expiry dates. In 2017, they were included on the list of 17 acreages that Shell had submitted to the government for renewal. But the Nigerian regulatory agency, Department of Petroleum Resources (DPR), citing the extra-large size of the acreage per its extant regulations, withheld the renewal of OML 11 as it was and proposed to President Muhammadu Buhari, who doubles as the petroleum minister, to carve the tract into three and approve only one for Shell. The President’s office, however, went farther than the request. It withdrew the operatorship of the entire OML 11 from Shell. Renewal of the remaining 16 assets was approved. That singular act dimmed the investment prospects of the deal that Shell and TNOG were negotiating, as OML 17 is considered the less prospective of the two blocks.

Still, Mr. Elumelu, it would seem, badly wanted to annex an apparently sizeable producing asset to his energy portfolio, which already includes two thermal generating plants and two non-producing hydrocarbon acreages. More crucially, for the businessman, producing assets like OML 17 start their lives with new holders as ongoing cash generating engines, no matter how depleted the fields are or how challenging the operations turn out to be.

Shell, in its release, reported that the completion of the transaction “follows the receipt of all approvals from the relevant authorities of the Federal Government of Nigeria”. Shell also said that it will retain its interest in the Port Harcourt and Residential areas, which fall within the lease area.

Africa’s Electricity Unlikely to Go Green This Decade

Section: ENERGY TRANSITION · January 13, 2021 · No comments |

PARTNER CONTENT

New research from the University of Oxford predicts that total electricity generation across the African continent will double by 2030, with fossil fuels continuing to dominate the energy mix – posing potential risk to global climate change commitments.

The study, published by Nature Energy, uses a state-of-the art machine-learning technique to analyse the pipeline of more than 2,500 currently-planned power plants and their chances of being successfully commissioned. It shows the share of non-hydro renewables in African electricity generation is likely to remain below 10% in 2030, although this varies by region.

“Africa’s electricity demand is set to increase significantly as the continent strives to industrialise and improve the wellbeing of its people, which offers an opportunity to power this economic development through renewables” says Galina Alova, study lead author and researcher at the Oxford Smith School of Enterprise and the Environment

“There is a prominent narrative in the energy planning community that the continent will be able to take advantage of its vast renewable energy resources and rapidly decreasing clean technology prices to leapfrog to renewables by 2030 – but our analysis shows that overall, it is not currently positioned to do so.”

The study predicts that in 2030, fossil fuels will account for two-thirds of all generated electricity across Africa. While an additional 18% of generation is set to come from hydro-energy projects. These have their own challenges, such as being vulnerable to an increasing number of droughts caused by climate change.

The research also highlights regional differences in the pace of the transition to renewables, with southern Africa leading the way. South Africa alone is forecast to add almost 40% of Africa’s total predicted new solar capacity by 2030.

“Namibia is committed to generate 70% of its electricity needs from renewable sources, including all the major alternative sources such as hydropower, wind and solar generation, by 2030, as specified in the National Energy Policy and in Intended Nationally Determined Contributions under Paris Climate Change Accord,’ says Calle Schlettwein, Namibia Minister of Water (former Minister of Finance and Minister of Industrialisation). “We welcome this study and believe that it will support the refinement of strategies for increasing generation capacity from renewable sources in Africa and facilitate both successful and more effective public and private sector investments in the renewable energy sector.”

“The more data-driven and advanced analytics-based research is available for understanding the risks associated with power generation projects, the better”, Mr. Schlettwein argues. “Some of the risks that could be useful to explore in the future are the uncertainties in hydrological conditions and wind regimes linked to climate change, and economic downturns such as that caused by the COVID-19 pandemic.”

The study suggests that a decisive move towards renewable energy in Africa would require a significant shock to the current system. This includes large-scale cancellation of fossil fuel plants currently being planned. The study also identifies ways in which planned renewable energy projects can be designed to improve their success chances – for example, smaller size, fitting ownership structure, and availability of development finance.

“The development community and African decision makers need to act quickly if the continent wants to avoid being locked into a carbon-intense energy future’ says Philipp Trotter, study author and researcher at the Smith School. ‘Immediate re-directions of development finance from fossil fuels to renewables are an important lever to increase experience with solar and wind energy projects across the continent in the short term, creating critical learning curve effects.”

Michael Ajukwu Takes the Chairmanship of LEKOIL

Section: Farm in, Farm Out · January 11, 2021 · No comments |

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

Section: Farm in, Farm Out · January 8, 2021 · No comments |

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

TOTAL Annexes a New Acreage in East Mediterranean

Section: Farm in, Farm Out · January 4, 2021 · No comments |

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%)

Serica Walks Out of Namibia

Section: Farm in, Farm Out · December 20, 2020 · No comments |

British junior, Serica Energy has decided to walk away from its Licence 047 in Namibia, covering Blocks 2512A, 2513A, 2513B and part of 2612A.

It is exiting the South West African country, nine years after it was originally awarded the assets.

Serica, a gas focused company with relatively extensive UK operations, has basically sat down on its Namibian portfolio for all of those nine years.

It admitted this much in its statement: ”The initial work commitment was fulfilled when BP farmed-in to the licence and funded a 3D seismic survey at no cost to Serica. In late 2013, BP decided to exit the licence rather than making a commitment to drill in the next licence period”.

Serica claims it “continued with its technical work to interpret the seismic and geological data, and secured extensions to the licence and waivers on area relinquishment and well commitments”.

Having just been formally awarded four new blocks in the UK’s 32nd licensing round and seeing gas prices trending up, it has opted “to withdraw from Namibia to focus on Serica’s North Sea-focused portfolio and opportunities”.

“The pace of exploration activity in Namibia has been slower than we hoped, and the development of any discovery would likely have been expensive, time consuming and inconsistent with our sustainability objectives”.

FAR Is About to Ride into the Sunset

Section: Farm in, Farm Out · December 20, 2020 · No comments |

FAR Limited, the Australian minnow which brands itself as a key player in Africa’s Northwest margin, may soon be swallowed.

If the company’s shareholders agree to a proposal from Remus Horizons PCC Limited, a private investment fund regulated by the Guernsey Financial Services Commission, FAR, an explorer with holdings in Senegal, Gambia and Guinea Bissau; the MSGBC axis where hub sized hydrocarbon resources have been found in the last eight years, will be gone.

Things are still in a preliminary stage. FAR cautions that “the Proposal is not a legally binding offer, there is no certainty that the Proposal will necessarily eventuate, and that the Proposal terms are uncertain at this stage. Accordingly, care needs to be used in assessing the Proposal”.

Remus’ move is “conditional non-binding indicative, to engage in further discussions and further investigations for the purpose of evaluating its capacity to make an offer or announce an intention to make an offer to acquire 100% of the shares of FAR at 2.1c cash per share.

Remus has stated that the price represents a premium to the cash backing per share that would exist if FAR was to complete the sale of the Rufisque Offshore, Sangomar Offshore, Sangomar Deep Offshore (RSSD)project to Woodside Energy (which pre-empted the earlier proposed sale to ONGC Videsh.

Remus has also stated that it is conditional (amongst other things) on: –

The FAR shareholder meeting to consider approving the sale of the RSSD project scheduled for Monday 21 December 2020 being rescheduled. –

FAR providing access to management and information in relation to the RSSD project and Remus being satisfied with such information.
No superior proposal emerging. Remus has stated that the Proposal will be funded from available internal cash reserves and that any formal binding offer would not include any financing conditions. Remus has stated that Remus is willing to discuss the possibility of making available a zero coupon bridge loan to FAR of up to $50Million from the date of any binding offer on terms and subject to conditions to be agreed to enable FAR to meet its valid funding calls in relation to its interest in the RSSD project and other necessary working capital requirements.
Remus has stated that it is well placed to move quickly to complete its confirmatory investigations and has committed to engage collaboratively with FAR to progress the Proposal.

FAR says it is seeking clarification from Remus regarding various aspects associated with the Proposal. In these circumstances, FAR has determined to postpone the shareholder meeting currently scheduled for 21 December 2020 to 10.00 am on 21 January 2021. “This will enable further time for FAR and its shareholders to be able to obtain further information in relation to the Proposal and assess the relative merits of the sale alternative and the Proposal. FAR will in due course distribute updated meeting information in this regard. FAR has appointed Baker McKenzie to advise in relation to the Proposal”.

Angola Invites Tenders for Logistics Services for Kassanje Basin Study

Section: Tenders · December 19, 2020 · No comments |

Angola’s NATIONAL AGENCY FOR PETROLEUM GAS AND BIOFUELS (ANPG) has thrown open the tender for Acquisition of Assistance and Logistical Support Services for the North and South Lots of the Kassanje Basin, within the scope of the Petroleum Potential Study Project of the Interior Basins of Angola.

Deadline and place for the Submission of Applications: Until December 30, 2020 at 3 pm

Contract performance period: 12 months.

Fuller description of the tender is in this link