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In Search of the Future of Africa’s Oil and Gas Industry

By Gerard Kreeft

 

 

 

 

 

 

The increased speed of the Energy Transition continues to make headlines in Europe.

This is not necessarily good news for Africa. The greening of Europe could in the short and medium term have a boomerang effect in Africa, given the strong presence of the majors there.

Any argument that supporting Africa’s oil and gas industry is a step to helping  bridge Africa’s energy transition becomes nul and void. The greening of Europe promised by the  majors could in fact mean reducing oil and  gas activities in Africa. For example, both BP and TOTAL have pledged to reduce considerably their oil and gas assets. Africa could be a prime candidate.

What is the Energy  Transition doing for Africa’s Oil and Gas Industry?

Are Africa’s state oil  and gas companies prepared to take on new exploration and developments as never before? Why? Simply because the oil and gas majors are choosing  low carbon prospects and natural gas projects on a massive scale,  leaving many potential prospects in Africa in doubt. TOTAL’s Mozambique LNG poject is expected to cost $20Billion and produce up to 43Million tonnes per annum. It will go ahead, but smaller oil and gas projects may not be treated so kindly.

Energy scenarios released by both BP and TOTAL are predicting a sharp decrease of oil production, adding to the view that exploration budgets of the majors will not be a priority item. Instead as TOTAL has explained low cost, high value projects are the goal. Squeezing more value out of its various African assets to ensure a prolonged life cycle.

For too long Africa’s new fledging  state oil companies have been proxies to the international oil majors. In the process many of them have not developed technical knowledge, capability and expertise to manage and implement oil and gas projects.

Being hostage to the whims of the oil majors is no formula to ensure that a country’s oil and gas assets are to be developed. Certainly when the window of opportunity to develop oil and gas assets  could be closing within the next 20-25 years.

Shuffling the Deck

A key aspect of the energy transition includes a serious analysis of company assets. Rystad, the Norwegian energy research  company recently conducted a study that concluded that the world’s largest oil and gas firms could sell or swap oil and gas assets of more than $100Billion in order to adjust and transform to cleaner sources of energy.

The Rystad Energy Study, covers a wide geographical spread  and includes  ExxonMobil, BP, Shell, TOTAL, ENI, Chevron, ConocoPhillips, and Equinor. The eight companies may need to divest combined resources of up to 68Billion barrels of oil equivalent (boe), with an estimated value of $111Billion and spending commitments in 2021 totalling $20Billion.

The key criteria for determining whether a major would benefit from staying in a country are the company’s cash flow over the next five years, the potential growth in its current portfolio, and its presence in key E&P growth countries towards 2030. Based on this, Rystad claims that majors may seek to exit 203 country positions and, as a result, reduce their number of country positions from 293 to 90.

The Continued Need for  Exploration and Development

The case for renewed oil and gas exploration has best been presented by Wood MacKenzie (Andrew Latham and Adam Wilson)who argue that whatever the pace of the energy transition, oil and gas exploration will remain critical well beyond 2040.

“Exploration will be critical in meeting this future demand. Yet exploration is widely perceived as discretionary, even unwarranted. Doubters see a world of risk, declining demand, enormous existing resources and a supply pecking order that ranks exploration squarely in last place. There’s even a public image problem in the false narrative that each new discovery somehow extends the fossil fuels era.”

The authors state that companies  showing signs of fatigue with exploration are questioning their long-term commitment to upstream petroleum. Only about half the supply needed to 2040 is guaranteed from fields already onstream. The rest requires new capital investment.

Cumulative global demand for oil and gas over the next two decades will be at least 1,100Billion boe even in a 2°C scenario. It could be as much as 1,400Billion boe on their base case forecasts. Around 640Billion boe could be met by proven developed supply from onstream fields. This leaves a ‘supply gap’ of some 460Billion to 760Billion boe.

Lessons learned and some practical solutions 

Of interest are lessons learned from Tullow Oil. In its 2019  annual report Tullow states that between 1999- 2009 Sub-Sahara Africa significantly increased its share of oil production and reserves.

With the oil shock of 2009 and the much deeper price collapse of 2014, larger African gas discoveries, and the US shale industry, oil discoveries have diminished on the continent.

Tullow further states that many African countries have adopted tighter fiscal terms, deterring exploration investments, rendering otherwise investable projects unviable at today’s oil prices.

Finally, decision-making has been slower, more complex as new institutions have been developed to govern the sector and governments have become more accountable to civil society. Tullow cites Uganda and Tanzania as examples of where increased industry participation was sought, but stalled because of a lack of market interest.

Additional practical measures:

  • Clear definitions of regulatory power: does a country’s regulatory regime  define what a Ministry of Energy does as opposed to the goals of the state oil company?
  • Improved fiscal and tax incentives to encourage new exploration companies to participate
  • High on the list of priorities for these fledging state oil companies should be knowledge transfer and development of local talent, which the majors should provide.
  • Special teams consisting of the majors and state oil companies be set up to develop energy transition road maps.
  • Extra monetary or tax incentives to ensure a speedy transfer of knowledge and developing local content.
  • To date the international multilateral agencies- be that the World Bank, African Development Bank, or the International Monetary Fund- were reluctant to throw new petro-economies a life line, based on oil and gas potential. This should be re-evaluated so that both oil and gas and renewables can be used to evaluate a country’s financial needs. Perhaps an item for the agenda of APPO (African Petroleum Producers Organization).
  • At the national level state oil companies and energy agencies which support renewables must better coordinate their national energy policies.

Gerard Kreeft,  BA (Calvin University ) and  MA (Carleton University, Ottawa, Ontario, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe. He writes on a regular basis for Africa Oil + Gas Report.


South African Criminals Mimic Nigerian Oil Pipeline Vandals

South African criminal gangs have begun to do what Nigerian vandals have been doing for three decades.

They drill holes in pipelines and siphon fuels.

Organised syndicates stole 10Million litres of fuel in the past year in South Africa, according to a report by the Sunday Times of Johannesburg. They siphoned off fuel, in some cases into their own tankers – that are valued at around $60Million (or R1Billion) per year.

The gangs achieved this by targeting pieces of Transnet’s 3,800km underground pipelines, which transport petrol, diesel, gas, crude oil, and aviation fuel across the country.

Transnet is S.A’s state-owned logistics company. It runs the rail system; it operates the ports and builds and manages the petroleum pipeline system in Africa’s most industrialised economy.

For close watchers of the Nigerian oil industry, the petroleum theft story from elsewhere feels eerily familiar. Crude oil theft in Nigeria rose steadily in the ten years from 2007 and 2017 and peaked between 2011 and 2014; with some estimates indicating that up to $15.9Billion was lost in 2014 alone. It has grown from a localised, small scale activity into a multi-million-dollar illegal industry with many complicit stakeholders. But crude oil theft in Nigeria is different from petroleum product theft, which is just about everywhere along the state hydrocarbon company NNPC’s pipeline right of way. In Nigeria, petroleum product theft involves more than criminal gangs. It is routine.

South Africa’s Trasnet’s network of pipelines pumped 17,825 Million Metric Tonnes of products in 2019.

To put in context, Transnet’s pipeline revenue increased by 17.2% to $319Million (R5.3Billion) in 2019 (2018: $271Million (or R4,5Billion)), due mainly to the regulatory agency’s decision to increase the 2018/19 tariff for petroleum transportation. This means that the value of the theft is around 20% of the revenue accruing to the pipelines

The Sunday Times report notes, exasperatedly: “So brazen are the thieves, who have their own tanker trucks to transport the stolen product that in one case they reacted a shack on a farm where a pipeline passes and punched a hole into it to help themselves”

Transnet says it is working with the Directorate for Priority Crime Investigation (“Hawks”), National Crime Intelligence and SAPS and that the effort is “generating positive results with a number of breakthroughs in the form of arrests as well as the impounding of vehicles and fuel tankers, being recorded”.

The thefts are not good for branding for Transnet, which fancies itself as Positioning Pipelines as an international best-in-class pipeline operator and offering subject matter expertise in the pipeline arena

Its also bad at a time when Transnet is investing in more infrastructure to take advantage of the deliveries from the pipelines. The company says in its report that it invested $5.7Million (R95Million) last year in firefighting upgrades at Pipelines to ensure stringent compliance to safety standards and regulations; and $5.9Million (R99Million) IN the multi-product pipeline towards the construction of tanks.

Another reason to be worried about petroleum product theft: last year, the National Energy Regulator of South Africa (NERSA) increased the Pipelines’ allowable revenue (AR) by 7.69% for the

2020 financial year. This translates into an 11% increase in the Durban to Alrode tariff for the 2020 financial year.

 


Nigeria Opts for Non-Discretionary, Open Bid Round Awards in Proposed Reform Law

Nigeria has opted for non-discretionary award of petroleum licences, with open bid rounds as the core framework, if the Petroleum Industry Bill (PIB) currently in its parliament is the signpost of things to come.

The 252 -page draft bill was delivered to the bicameral house of legislature by the executive arm of the Nigerian government on Tuesday, September 29, 2020.

It says that petroleum prospecting licence or petroleum mining lease shall only be granted –

(a) based on a fair, transparent and competitive bidding process; and

(b) in compliance with the provisions of this Act, regulations made under this Act and licensing round guidelines issued by the Commission for each licensing round.

The ‘Commission” refers to the Upstream Regulatory Commission, which s created by the new law. The success of the reform rests largely on its capacity to deliver.

“The Commission may periodically publish a licensing round plan”, the PIB declares, stopping short of decreeing some form of regularity.

The Minister may, on the recommendation of the Commission, grant a petroleum prospecting licence or petroleum mining lease to a winning bidder, provided that the winning bidder has complied with the requirements of the bid invitation.

The Minister shall inform the Commission of his decision within 90 days of the application for licence or lease and where he fails to inform the Commission within the stipulated time, the licence or lease shall be deemed granted.

Award process

(1) The grant of a petroleum prospecting licence or a petroleum mining lease on a previously appraised area of a petroleum prospecting licence or a surrendered, relinquished or revoked petroleum mining lease in, under or upon the territory of Nigeria, shall be by an open, transparent, competitive and non-discriminatory bidding process conducted by the Commission. The winning bidder shall be determined on the basis of the following bid parameters –

(a) a single bid parameter, which shall be based on any one of the

following parameters –

(i) a signature bonus to be paid in full prior to the granting of the licence or lease by or on behalf of the winning bidder;

(ii) a royalty interest;

(iii) a profit split or profit oil split;

(iv) a work programme commitment during the initial exploration period; or

(v) any other parameter as may be defined specific to a bid round;

and

(b) a combination of the bid parameters, based on a points system assessable by the bidder in such

a manner that the bidder with the highest aggregate number of points shall be the winning bidder.

The PIB says that notwithstanding the bidding parameters prescribed, where there is a bilateral or multi-lateral agreement between Nigeria and another country, the Government may, for strategic purposes and in return for substantive benefits to the nation, direct the Commission to negotiate and award a petroleum prospecting licence or petroleum mining lease to a qualified investor identified in the agreement or treaty.

A SIGNATURE BONUS PAYABLE IN RESPECT OF any licence or lease awarded shall be based on a transparent method for evaluating the acreage.

The Commission shall call for bids in accordance with a procedure published on its website and in at least two international financial newspapers and two national newspapers with wide coverage.

Where the Commission calls for bids pursuant to this section, it shall prescribe a technical, legal, social, economic and financial requirement, including the minimum experience and capacity for an applicant in a regulation or guideline, and the applicant shall be chosen in accordance with the regulation or guideline.

The bids received based on the bid parameters through an open, transparent and competitive bidding process, shall include an electronic bidding process, open to public and conducted in the presence of representatives of the Nigerian Extractive Industry Transparency Initiative, the Ministry of Finance and the Ministry of Petroleum Resources.


Morocco’s $9/MMBtu Gas Price Looks Good on Paper

“Gas has been a growing component of Morocco’s power generation mix”, says Chariot Oil&Gas, the London listed minnow who is looking to develop a gas field in the country.

“Attractive gas prices are established for power generation and industry”, the company notes.

The power sector pays $8 per million British thermal units (MMBtu), which roughly equates a thousand cubic feet (Mscf). It the sort of price that gas producers dream about, especially at this time when international prices have shrunk.

It gets even better.

Gas prices  for industry are in the range of $9-11/MMBtu.

Rabat is pushing natural gas as part of the national strategy to reduce imports and transition to lower carbon energy.

A key problem is that coal significantly dominates the energy scene. Although Morocco imports most of its energy needs, facilities for gas commercialization are underutilized. The installed gas fired electricity capacity is 850MW using around 100Million standard cubic feet of gas per day. Natural gas supplies 15% of the country’s electricity. But the Moroccan government isn’t looking at gas as the prime energy fuel in the forseeable future. The country, instead, talks up renewables.

Chariot keeps scouting for investors to develop the Anchois gas find. We are “continuing to engage with off-takers and develop alternative commercialisation routes for gas and liquids”, the company says in its latest update.

 

 

 


Without a Host Community Trust, You Lose Your Nigerian Oil Licence, PIB Says

By Fred Akanni, Editor in Chief

Failure by any holder of a licence or lease to incorporate a trust for the benefit of the host communities in the licence area may be grounds for revocation of the licence or lease, according to the Petroleum Industry Bill (PIB), currently tabled for discussion at the Nigerian National Assembly.

“Each settlor, where applicable through the operator, shall make an annual contribution to the applicable host community development trust fund of an amount equal to 2.5% of its actual operating expenditure in the immediately preceding calendar year in respect of all petroleum operations affecting the host communities for which the applicable host community development trust was established”, says the 252 page draft legislation.

Host community issues are some of the most intractable items in the development of Nigeria’s oil and gas industry. Some companies have robust Host Community plans while several do not.

The Nigerian state has earned 83 Trillion Naira (or $216Billion) in hydrocarbon revenues in the last thirty seven years, according to the Nigerian Natural Resource Charter (NNRC), but many of the communities in which the fossil fuel is extracted are derelict.

In the PIB’s definition, a “settlor” is a holder of an interest in a petroleum prospecting licence or petroleum mining lease or a holder of an interest in a licence for midstream petroleum operations, whose area of operations is located in or appurtenant to any community or communities.

“Where there is a collectivity of settlors operating under a joint operating agreement with respect to upstream petroleum operations, the operator appointed under the agreement shall be responsible for compliance with the law on behalf of the Settlors”.

The constitution of the host communities development trust shall contain provisions requiring the Board of Trustees to be set up by the settlor, who shall determine its membership and the criteria for their appointment. The Board of Trustees shall in each year  allocate from the host communities development trust fund, a sum equivalent -(a) 75% to the capital fund out of    which the Board of Trustees shall make disbursements for projects in each of the host community as may be determined by the management committee, provided that any sums not utilised in a given financial year shall be rolled over and utilized in subsequent year; (b) 20% to the reserve fund, which sums shall be invested for the utilisation of the host community development trust whenever there is a cessation in the contribution payable by the settlor; and (c) to an amount not exceeding 5% to be utilised solely for administrative cost of running the trust and special projects, which shall be entrusted by the Board of Trustee to the settlor. The law also says that host community development plan shall -(a) specify the community development initiatives required to respond to the findings and strategy identified in the host community needs assessment; (b) determine and specify the projects to implement the specified initiatives; (c) provide a detailed timeline for projects; (d) determine and prepare the budget of the host community development plan; (e) set out the reasons and objectives of each project as supported by the host community needs assessment; (f) conform with the Nigerian content requirements provided in the Nigerian Oil and Gas Industry Content Development Act; and (g) provide for ongoing review and reporting to the Commission.

The PIB does not relate this trust fund to the Niger Delta Development Commission (NDDC) which has the legal backing to receive 3% of the total yearly budget of any oil producing company operating onshore and offshore in the Niger Delta area.

But the new law says that “each host community development trust may receive donations, gifts, grants or honoraria that are provided to such host community development trust for the attainment of its objectives”.

 


Volkswagen Pushes for Incentives to Join Egypt’s Autogas Plan

By Toyin Akinosho, Publisher

German car maker Volkswagen is asking for tax breaks and localization incentives before it agrees to produce natural gas-powered vehicles in Egypt.

It wants the opportunity to bring in foreign staff to work on the local assembly lines it would use to manufacture the vehicles in North Africa’s largest economy.

If the government gives the nod, the company will produce natural gas -powered versions of Crafter and Caddy 5 vans for the Egyptian market.

Volkswagen has been more enthusiastic to be part of Egypt’s Autogas plan than any other automaker. It announced last year that it was planning to invest in the countrywide effort. Japanese car making giants Toyota and Nissan have also expressed interest, but Nissan has withdrawn, while Toyota is, like Volkswagen, pushing for incentives. Toyota’s plan is to manufacture 240,000 minibuses running on dual fired engines. The Russian car maker Skoda is not in on the local assembly plan. But natural gas-powered versions of its Octavia and Rapid models will be imported into Egypt by local agents.

More than any African country, Egypt is big on domestic use of its natural gas deposits, the third largest in Africa. It holds 76Trillion cubic feet of reserves, less than half of either Nigeria’s or Algeria’s, but it produced 2.3Trillion cubic feet from those tanks in 2019, way higher than Nigeria’s production of 1.74Trillion cubic feet and, more importantly, over 80% of it was for domestic consumption, primarily through the country’s 40,000MWof gas fired electricity supply.

Egypt’s Autogas plan is to convert two million vehicles into dual fired engines that could be fueled by both gasoline and natural gas in the next three years.

Vehice licencing will be conditional on cars being equipped with natural gas engines.

Through the initiative, owners of vehicles over 20 years old will receive low interest loans through Egypt’s MSME Development Agency to purchase new dual-fueled vehicle. Owners of newer vehicles can access zero interest finance to outfit them with new engines.

 

 


Angola, “Creator” of EITI, Formally Applies to Join

By Toyin Akinosho

An incident that occurred in Angola in 2001, led to the formation of the Extractive Industry Transparency Initiative EITI.

But the country itself had abstained from being part of the international body for these last 19 years.

Now the Angolan Government has formally notified the EITI of its intention to join the 54 countries already implementing the EITI Standard.

The organization recalls, on its website, how opacity in the Angolan oil sector quickened the steps that led to the EITI’s founding.

In February 2001, when BP published the signature bonus of $111Million it paid to the Angolan government for an offshore license and committed to publish more, it sparked a strong reaction from Angola. In his 2010 memoir, “Beyond Business”, Lord John Browne, the then Chief Executive Officer of BP, recalled how he received a cold letter from the head of the Angolan national oil company, Sonangol, stating that, “[I]t was with great surprise, and some disbelief, that we found out through the press that your company has been disclosing information about oil-related activities in Angola”. The backlash and threats from the Angola government, led Lord Browne to conclude “clearly a unilateral approach, where one company or one country was under pressure to ‘publish what you pay’ was not workable”.

The oil companies argued for a shift away from company reporting, to reporting by governments, in order to reduce conflict with host governments and put contracts at risk. If company reporting was to be required, they wanted a global effort to level the playing field that required all companies in a country to disclose.

19 years later, 52 resource-rich states have committed to improving extractives sector transparency by implementing the EITI Standard. Yet Angola has never been a member.

In a letter to the EITI Board Chair, dated 14 September 2020, the Minister of Mineral, Oil and Gas Resources, Diamantino Pedro Azevedo, outlined steps already taken towards EITI implementation.

These include signature of Presidential Order 117/20, appointing the Minister to the role of President of the National Coordination Committee of the EITI, and a public statement announcing the Government’s commitment to joining the initiative.

“The announcement of Angola’s intention to join the EITI is a welcome development,” said the EITI International Secretariat’s Executive Director, Mark Robinson. “We have been working towards this outcome with the Angolan authorities and the Norwegian Government, who have been supportive of our efforts.

In a statement last January, the EITI called on Angola to join the EITI and implement its Standard, in the wake of the Luanda Leaks, in which the International Consortium of Investigative Journalists (ICIJ) exposed records allegedly linked to businesswoman Isabel dos Santos, daughter of the former President of Angola. Some of these revelations concern the country’s state-owned oil company Sonangol, which dos Santos headed until 2017.

The EITI said, then, that it believed that EITI implementation could enable Angola “to make sustained progress in addressing governance challenges in its extractives sector, to the benefit of Angolan citizens.”

 


Why Africa’s Oil Production Declined in the Last 10 Years

The African oil industry has enjoyed mixed fortunes over the past ten years.

Between 1999 and 2009, Sub-Saharan Africa significantly increased its share of global oil production and reserves, but since then – despite the opening of new oil provinces in West and East Africa – African production has declined and reserves growth has tailed off.

Several factors explain this, including the oil price shock of 2008 and the much longer and deeper price collapse in 2014.

Big African gas discoveries and the growth of the US shale industry have also played a part in the reallocation of investment capital.

However, Africa’s oil fortunes have also been affected by trends closer to home.

Firstly, during the oil super-cycle, many countries in the region adopted tighter fiscal terms, deterring exploration investment and rendering otherwise investable projects unviable, especially at today’s lower oil price.

Secondly, the decision-making process has become slower and more complex as countries have established new institutions to govern the sector and as governments have become more accountable to civil society and democratic practices have deepened. Consequently, many governments have been slow to adjust to changing market signals and many African oil jurisdictions have become uncompetitive.

Several recent licensing rounds have attracted limited industry interest and countries like Tanzania and Uganda that have sought to capture greater host country value in the midst of major developments have seen project momentum stall.

African countries are right to seek to maximise the socio-economic development opportunity that oil presents and to establish the right institutional framework to ensure this. However, these pressing needs must be balanced with the right economic incentives for International Oil Companies, coupled with the timely and judicious decision making that is necessary for Africa’s undoubted oil potential to be realised at a time of increasing competition for capital.

This is especially true in the context of the energy transition, which will require prospective oil producers to minimise the time to First Oil and to develop local content strategies that prepare their economies and societies for disruptive change in the global energy matrix.

Finding this balance will not happen overnight, but companies need to work harder with host countries to achieve it: engaging early and systematically with all project-affected stakeholders to ensure that host countries and prospective hosts understand the commercial needs of the business and see the merits of the investments; working with host governments and communities to develop a shared prosperity strategy that will deliver real socio-economic benefits; and ensuring that business and operations are as transparent as possible.

Excerpted from Tullow Oil’s Operational Update, 2020 and initially published in the June 2020 edition of Africa Oil+Gas Report


Angola: New Development and Field Expansion Projects Resume as COVID- 19 Clears

Four key Angolan oilfield development, redevelopment, field optimization and field extension projects were halted by the COVID-19 challenges, from June 2020, and they will proceed in full as the anxiety clears.

The redevelopment of the Chevron operated  Tômbua Lândana development area, which comprises Kuito, Benguela, Belize, Lobito, Tomboco and Tômbua Lândana fields in Block 14; new developments in the ExxonMobil operated Block 15; new phases in the expansion of the CLOV and Dalia clusters of fields in TOTAL operated Block 17 and  the Platina field, part of BP operated Greater Plutonio development area, in Block 18 are all projects for which the Majors and the government had signed renegotiation agreements in the last 12 months.

These agreements provide for drilling of several development and exploration wells, to add, as a collective, over 120Million barrels of oil. The Block 14 agreement, in particular, provides for the drilling of several development and exploration wells, adding, in the first phase, approximately 60Million barrels in reserves.

Paulino Jerónimo, Chief Executive of the country’s National Oil, Gas and Biofuels Agency (ANPG), says there was a brake on implementation of these developments as a result of the State of Emergency imposed by COVID-19. “It caused the temporary suspension of the contracts of most of the rigs operating in national territory. We have been working with the Ministry of Mineral Resources, Oil and Gas, oil operators and service providers to prevent the spread of the pandemic in oil facilities and the return, as soon as possible, of the rigs in order to effect the agreements”, he said in an interview published on the ANPG website, adding “in Block 18, the development of allowing the production of about 20 thousand barrels of oil per day in the near future”.

The agency he says is pleased that, “the return of the rigs for the execution of the approved project has already started”.

 

 


S/Sudan’s Nilepet Wants to Be an Operator by 2022

South Sudan’s state hydrocarbon company, Nile Petroleum Corporation (Nilepet), has set a target of 2022, to be a leading and competitive integrated oil and gas corporation of choice in South Sudan and beyond.

“We want to have our own block to operate”, says James Yugusuk, the company’s Director General for Downstream. “We want to raise world class South Sudanese technical staff and we want to construct four refineries: one in Bentiu, Paloch, Pagak and Thiangrial. All those are producing blocks. We also want to construct depots in major towns in South Sudan which is a very ambitious plan because we need to have strategic reserves. We want to extend our retail outlets to all the major towns in South Sudan. We want to have a very robust and highly effective JV and this is for companies and people who are willing to do that. We also want to have a strong footprint in the research and development programmes”.

Starting from 2013, Nilepet started participating in Joint Operating Companies in the country, holding stakes on behalf of the government in these JOCs through which it builds capacity of its staff. Between 2015 and 2018, Nilepet established joint ventures with oil service companies “and we continue to build the capacity of our national staff such that between 2022 and 2027, we’ll become a standalone operator, able to work up and develop hydrocarbon acreages by ourselves.

Nile Delta, for one, is a JV with 51% Nilepet and 49% held by Niger Delta Exploration and Production of Nigeria. “The mandate is to work on gas monetization and production optimization. This JV is also operating in the current producing blocks.

SIPET, for another, is an engineering and construction company which is 80% owned by Nilepet and 20% by QDC, a Chinese Engineering company. The areas of service are project management, consultancy, operation and maintenance. It is working on some of the country’s producing fields.

Nile Drilling is open to any international partner. “It is 90% Nilepet and 10% open to any willing investor”, Yugusuk explains. The specialization is drilling, and work over services.

“Nile Services and Logistic Company is 51% Nilepet and 49% from a local investment group and a South African company”, Yugusuk discloses. “It is into logistics and of course, it is still under development”.  Another JV that we have is the Nile-Delta Systems which deals in ICT and it is currently operating and it is 51% Nilepet and 49% ASECCO Polland.

“We have SNP Group which is 30% Nilepet and 70% a Russian company called Sufinat it is working on the Bentiu refinery and it is currently operating.  We have Dietsmann Nile S.A Ltd which is 31% Nilepet and 69% Dietsmann Technology which is an Italian company that deals on technology. It is operating.

“Again, we have NIYAT which is 40% Nilepet and 60% Eyat-Sudan. It specializes in road construction and maintenance”.

This story was originally published, for the market intelligence benefit of paying subscribers, in the July 2020 edition of Africa Oil+Gas Report. Here’s the link to the subscription portal.

 

 

 

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