All posts tagged feature


Construction of East African Crude Oil Pipeline to Start Before April 2021

Construction of the East African Crude Oil Pipeline (EACOP), 1,443km long, crude oil export pipeline system, is scheduled to start next month, a key Tanzanian official has announced.

Palamagamba Kabudi, Tanzania’s Foreign Affairs minister, told journalists that actual construction of the project would start in the second week of March 2021.

The $3.5Billion EACOP project is the midstream part of the full, basin wide Uganda oil development, which has been on the drawing board for close to a decade. It will, from Hoima in Western Uganda and head in a southeasterly direction to end up in Tanga, a Tanzanian port town on the edge of the Indian Ocean. The line will pump 216,000Barrels of Oil Per Day at peak.

Mr. Kabudi, who returned from France where he had meetings with officials of the French major TOTAL, operator of the pipeline project, was widely quoted by local Tanzanian media on the issue. “While in France I held talks with TOTAL’s director who assured me that all is set for the construction of the pipeline to kick off in the second week of next month,” he told a press conference, specifically mentioning Nicolas Terraz, TOTAL’s Vice President for E&P Africa, as assuring him that the construction would kick off in March 2021.

Commercial quantities of crude oil were discovered in Uganda in 2006. Field development plans have been on the table before 2013. As Uganda is a land locked country, an extensive export pipeline had been part of the sticky points in the negotiation about the full development. But everything had been negotiated between the governments (Tanzania and Uganda) with the partners TOTAL and CNOOC by the time the pandemic fully hit.

Last November, TOTAL invited for provision of various services including site preparation and infrastructure works construction project management services in respect to enabling infrastructure for fields in the CA-1 block and northern panel LA-2 block. The company had previously received certificates of approval for the Environment and Social Impact Assessment (ESIA) from both Tanzanian and Ugandan authorities.

Prior to TOTAL’s invitation for services, Yoweri Museveni, President of Uganda, and John Magufuli, his Tanzanian counterpart, last September, agreed to hasten the implementation of the EACOP project by expediting the harmonisation of pending issues and fast-track the remaining agreements including the Tanzanian HGA with TOTAL.

The East African Crude Oil Pipeline (EACOP) will be the World’s longest heated crude oil pipeline. It will comprise a 24inch insulated buried pipeline, six pumping stations (two in Uganda and four in Tanzania), and end at a marine export terminal in Tanga.

 


Tullow Is Counting on Ghana to Lift it Out of Debt

By Toyin Akinosho

Irish explorer Tullow Oil has sold out of Uganda, Gabon and Equatorial Guinea in the last one year.

The entire proceeds from these asset sales do not come near a billion dollars, so do not make a dent in Tullow’s debt.

Ghana is where the money is, not by selling assets, but by investing over a period of time, making gains and creating more value.

The company “has mapped out a strategy and plan which focuses on the substantial potential within its large resource base, associated with its producing assets where there is extensive infrastructure in place”.

That large resource base is Tullow’s Ghanaian acreage, where the company has produced just over 400Million barrels of oil (gross) from 2.9Billion barrels of oil in place (c.14%). This plan, alongside a rigorous focus on costs, is expected to generate material cash flow over the next decade, which the Group anticipates will enable reduction of its current debt levels and deliver significant value for its host nations and investors.

The new plan will deliver production growth in the medium term and the ability to sustain production over the longer term. The first phase of investment will start in the second quarter of 2021 with the commencement of a multi-well drilling programme in Ghana.

Assuming an oil price of $45 per barrel in 2021 and $55 per barrel flat nominal from 2022 onwards, and with over 90% of future capital expenditure focused on the Group’s West African producing assets, which is mostly in Ghana, Tullow forecasts it will generate c. $7Billion of operating cashflow over the next 10 years. After capital investment of c. $2.7Billion, there will be c.$4Billion cash flow available for debt service and shareholder returns which Tullow will initially apply towards reducing gearing to 1-2x net debt / EBITDAX while retaining appropriate liquidity.

This piece was originally published in the January 2021 edition of the monthly Africa Oil+Gas Report

 


Shell Says LNG Demand Will Keep Rising for 20 Years

Overall, global LNG demand is estimated to hit 700 million tonnes by 2040, Shell has declared.

“Asia is expected to drive nearly 75% of this growth as domestic gas production declines and LNG substitutes higher emission energy sources, tackling air quality concerns and meeting emissions targets”, the AngloDutch major says in a new report., which also indicated that the demand for LNG had held steady in 2020, despite COVID-19.

The report projects a strong Asian demand, giving an example of China’s heavy-duty transport sector which “consumed nearly 13Million Tonnes of LNG in 2020, almost doubling from 2018, to serve the fast-growing fleet of well over 500,000 LNG-fuelled trucks and buses’.

Shell’s LNG Outlook 2021 www.shell.com/lngoutlook reports that LNG-fuelled shipping is also growing, “with the number of vessels expected to more than double and global LNG bunkering vessels set to reach 45 by 2023.

“As demand grows, a supply-demand gap is expected to open in the middle of the current decade with less new production coming on-stream than previously projected. Just 3Million Tonnes in new LNG production capacity was announced in 2020, down from an expected 60Million Tonnes”, the report testifies.

“According to estimates, more than half of future LNG demand will come from countries with net-zero emissions targets. The LNG industry will need to innovate at every stage of the value chain to lower emissions and play a key role in powering hard-to-abate sectors”, Shell notes.

 


Sasol takes FID on $760Million Moza to SA Gas Export Project

 By IsiZulu S’thembi

South Africa’s synfuel giant Sasol has announced its final investment decision (FID) on a $760Million gas project in Mozambique, that will provide additional supply to South Africa in the short term.

The company´s Board approved the FID on the development of the Mozambique production sharing agreement (PSA) license area, in the onshore Pande Temane region, which entails an increase in the company’s export of gas to South Africa, as well as  in-country monetisation of gas in Mozambique through a 450 megawatt gas-fired power plant and a liquefied petroleum gas (LPG) facility in the same time frame.

“The PSA development underpins Sasol’s gas transformation strategy by securing additional gas supply from southern Mozambique into Sasol’s gas value chain starting 2024 and serves as a cornerstone in addressing Sasol’s sustainability agenda”, the company said.

Fleetwood Grobler, Sasol’s CEO, said the Mozambique project would provide “additional short-term gas supply to South Africa”.

There may be up to 1.2Trillion cubic feet of gas and 10 Million barrels of crude oil in the PSA licence Sasol estimates. Sasol plans to export the crude.

Sasol is also considering LNG and supplies from (Mozambique’s northern)Rovuma Basin, in addition to exploration in Pande Temane. In the next couple of years we will set out steps towards the energy transition, it’s going to involve gas and renewables,” Sasol says.


Natural Resource Governance Institute Appoints Suneeta Kaimal as President and CEO

PARTNER CONTENT/NRGI

The Natural Resource Governance Institute (NRGI) has appointed Suneeta Kaimal the new President and CEO of the independent, non-profit organization.

Ms. Kaimal, currently Interim President and CEO of NRGI, joined the organization in 2009 and previously served as Deputy Director and Chief Operating Officer.

“NRGI’s trajectory is such that it requires someone who has a holistic understanding of the field of resource management and knows how to deal with the consequences of the upheavals we are going through,” said Smita Singh, Interim President of the Institute’s Board of Directors.

“After careful and in-depth global research that identified many excellent candidates, the Board of Directors came to the conclusion that Suneeta Kaimal offers the ideal combination of attributes: a vision for the future, interdisciplinary knowledge of issues related to the management of extractive industries in resource-rich countries, extensive external networks and in-depth knowledge of the internal strengths of the Institute. Her unique skills make her the ideal candidate to guide the Institute through the important changes that must continue to take place in order to continue its work with communities. The Board of Directors is unanimously convinced that Suneeta Kaimal has the capacity to continue the activities that make the reputation of the Institute and adapt to the profound changes we are witnessing around the world. “

Suneeta Kaimal to lead Institute’s ambitious programme for 2021, building on the successes f a difficult 2020. The Institute’s programme teams work with national and international civil society organizations, multilateral organizations and governments to facilitate the transition to a more climate-friendly future in countries dependent on fuel extraction. fossils; to help countries with significant mineral deposits meet growing demand for critical minerals in a way that benefits their citizens while reducing corruption and environmental impact; reduce resource-related debt; and to defend and develop governance, environmental and social standards.

“We are at a historic turning point in the area of ​​natural resource governance,” said Suneeta Kaimal. “New thinking conducive to transformation is needed if we are to face the heavy economic consequences of the global pandemic and the looming climate emergency.” I have the honor and the privilege, as President and CEO, to have the opportunity to build on the success of the Institute to meet this challenge. In collaboration with the outstanding staff of the Institute, distinguished members  of the Board of Trustees and advisers, committed donors and accomplished partners, I believe we can create a more just and sustainable future for resource-rich countries. “

NRGI’s goal is to ensure a future where countries rich in oil, gas and minerals achieve sustainable, equitable and inclusive development, enabling citizens to benefit sustainably from extractive industries and helping to reduce the associated negative effects. to the sector. The organization is present in more than a dozen resource-rich countries in Latin America, the Middle East and North Africa, Eurasia, sub-Saharan Africa and Asia-Pacific.

“Good governance of natural resources is more than ever essential if we want to strengthen economic resilience and advance social justice for the benefit of more than a billion people living in poverty in resource-rich countries” , added Suneeta Kaimal. “The NRGI team remains unfazed by the scale of the challenges and is emboldened by the opportunities ahead. “

Suneeta Kaimal succeeds President Emeritus Daniel Kaufmann, who worked for the Institute from 2013 to February 2020.

 


Yetunde Taiwo Takes Charge of Seplat’s ‘New Energy’ Portfolio, with the Gas Business

Yetunde Taiwo has been appointed the General Manager for New Energy at Seplat.

It is a position that comes with the company’s Gas Business, which she had managed before, so it’s an expanded portfolio.

Seplat is Africa’s largest homegrown E&P company.

Until January 2021, Taiwo was Chief Executive Officer of the ANOH Gas Processing Company (AGPC), the incorporated Joint Venture owned equally between Seplat and the Nigerian Gas Company (NGC), which manages a $700Million midstream development that will monetise 300Million standard cubic feet produced every day from the Assa North /Ohaji South fields, straddling Shell operated Oil Mining Lease (OML) 21 and Seplat operated OML 53, onshore eastern Nigeria.

Taiwo took the AGPC job after three and half years as the first GM Gas (or Head of Gas Business as it is called), where she oversaw the development of one of the fastest growing domestic gas businesses in Nigeria.  On her watch, Seplat grew its operated gas production capacity from 300Million standard cubic feet per day (300MMscf/d) to 525MMscf/d.

Her new role of superintending the New Energy unit involves the increase of gas products to be monetised in the form of LPG, CNG and other gas derivatives, with opportunity framing in the renewable energy space. “A different set of skills is required to get into renewables”, Roger Brown the company’s CEO, told London South East last November, but he added that the New Energy unit, would provide guidance for the company.

“We are looking at LPG, Liquid Petroleum Gas on all of our gas plants and that can be utilised in the local market”, Mr. Brown told London South East. “We’re looking to Compress Natural gas (CNG) and, we are looking further down the value chain potentially into supplying smaller scale, probably not retail but certainly, smaller scale wholesale and customers. And then, through that, we look at what renewable energy means for Nigeria into the future and it’s got huge potential, particularly, in solar. We’ve got a lot of the sun all year round here. That will be a great renewable fuel source for the country. And what we really want to do is that we need to get the grid system up to a level we are having more of the gas going through it and then, the grid will rely on grids solar power rather than, off grid small scale. So that’s something we are looking at”. That statement, effectively framed Mrs. Taiwo’s key job responsibilities

Taiwo started her career as a reservoir engineer with Chevron Nigeria Limited in 1991, straight from National Youth Service. By the time she left the American major, for BG, in 2007, she was a planning advisor at the company’s Asset Management Division. She worked for BG as Economics manager before she showed up at Seplat in May 2011 as head of planning and economics. She joined NNPC, the state hydrocarbon company, in 2013, as General Manager, Planning at NAPIMS, the Investment arm. She was appointed head of Gas Business when she returned to Seplat in 2015.


Kuwaitis Target A Second Discovery in Abu Sennan

Kuwait Energy Company is moving the ED-50 rig to the north of the Licence, to drill another well, after the moderate success of the last one, which will soon be brought to production.

The next probe is the ASD-1X exploration well, located close to the producing Al Jahraa field. The well is targeting the Abu Roash reservoirs in the Prospect D structure and, if successful, can again be quickly be brought into production.

The last well, ASH-3, a step-out development well in the ASH Field, penetrated a gross hydrocarbon column of 59metres in the primary Alam El Bueib (AEB) reservoir target, 27.5metres of which is estimated to be net pay. The well recorded a maximum flow rate of 6,379 bopd and 6.7 mmscf/d (c. 7,720 boepd gross; 1,700 boepd net), during testing, on a 64/64″ choke, from the AEB reservoir. On a reduced, 30/64″ choke, expected to be more representative of the producing flow rates, the well flowed at 3,561 bopd and 2.9 mmscf/d (c. 4,140 boepd gross; 910 boepd net).

It was spud on the 4th January, and it reached a total depth (TD) of 4,087m MD (3,918m TVDSS) on 8th February.

“The partners, Kuwait Energy and United  Oil and Gas when brought on production over the coming days, ASH-3 will provide a significant boost to the concession-wide production rates that averaged 10,500 boepd gross (2,310 boepd net) during January 2021.

“We look forward to the spudding of the forthcoming exploration well and the remainder of our 2021 work programme,” the partners say.

 


Maússe is EnerMech’s Pointman in Mozambique

EnerMech, the Aberdeen-based energy industry services company, has appointed Celestino Maússe to the newly created role of Mozambique country manager as the company seeks to expand its business in the growing Mozambican energy market.

Mr Maússe will lead the business development effort within Mozambique and will aim to secure and deliver new contracts in country. Mr Maússe brings with him over fifteen years of oil and gas engineering experience, having worked as a process engineer in the areas of engineering, commissioning and start up across projects around the world.

Previously, he led business development in Sub-Saharan Africa for companies such as SNC-Lavalin and Kentz and has held general management positions in Mozambique for both Kentz and Golder Associates. In these roles, Mr Maússe serviced clients in the mining and oil and gas industries across the region, providing specialist engineering solutions to enhance project delivery and operational capacity.

EnerMech has also established an office in the capital city of Maputo, the gateway to Mozambique’s international energy market.

 


Algeria is Now A Net Exporter of Gasoline

By Toyin Akinosho

Algeria has returned to being a net exporter of gasoline, the most in-demand product of distillation of crude oil.

The country began exporting both gasoline and diesel, in 2020, the first time it is doing so in the last decade, the Algerian Press Agency reports.

Algeria used to be self-sufficient in petroleum products. Up until 2009 it was the only country among the top three African hydrocarbon producers to have enough products to spare for the export market. But years of under investment has dragged Algeria into the same product-import league in which Angola and Nigeria have been top card-carrying members for over 20 years.

With the ramp up of the Algiers refinery, Sonatrach, the country’s state hydrocarbon company and sole domestic refiner of Algerian crude oil, says it produced 9.5 Million tons of diesel and 3.4Million tons of gasoline in 2020.

Algeria ended its imports of diesel in March 2020 and ceased its import of gasoline in August of the same year as refining activity increased by 7.4% in the volumes of oil and condensate processed compared to 2019, from 27.2Million tonnes to 29.1million tonnes.

 

 


Oza Field Poised to Flow More Than the Trickle it Currently Does

By Sully Manope, in Port Harcourt

London listed minnow, San Leon Energy, has moved much closer to injecting the funds it says it plans to use to ramp up output from the Oza field, onshore Niger Delta, which has produced a trickle of crude oil: about 400Barrels of Oil Per Day, in the last one year.

San Leon will invest in Oza field, by way of both granting a loan to and taking equity interest in Decklar Resources Limited. San Leon will grant Decklar a loan of $7.5Million, and subscribe for a 15% equity interest in Decklar, with another $7.5Million.

Decklar, a Canadian player listed on the Toronto Stock Exchange, will re-enter Oza 1, perform a work over and drill a new well, to start with.

Oza field is held by and operated by Millenium Oil and Gas Company Limited, a Nigerian owned independent which won the field from the government in the 2003 marginal field bid round. Decklar is the holder of a Risk Service Agreement (RSA) with Millenium on the field. Translation: Millenium had been unable to properly optimize production from the field. Decklar is investing in the field, both technically and financially and the Risk Service Agreement is legal instrument to ensure that it makes back its investment and take some profit.

Decklar is raising money elsewhere for the ramp up, apart from the $15Million it has agreed it will receive from San Leon. It is trying to raise funds from private placement financing and secure a facility from a crude trading company, which is a subsidiary of an E&P major (most likely Shell Trading, but Decklar doesn’t say).

Decklar, indeed has announced it was completing a private placement financing for a total of just over CAD $4Million, (or $31.75Million) which will enable it to immediately advance operational activities to re-enter the Oza-1 well. Closing of this private placement is expected to provide sufficient funds to re-enter the Oza-1 well and to re-establish oil production at the Oza Oil Field.

“The previously announced debt funding plans, including the arrangements of which San Leon is part, are in the final stages of being concluded which will provide additional development funding for further operations and development drilling for the full development of the Oza Oil Field”, San Leon says in a statement  “The current private placement, which will allow Decklar Petroleum to begin the Oza-1 well re-entry and production operations on an expedited basis, is expected to close by the end of February 2021.

Civil works required for the Oza-1 wellsite are complete, according to Decklar, including rebuilding of the access road, construction of a concrete drilling pad, a concrete mud pit, buildings and other facilities required for well re-entry and drilling operations and management. A drilling rig located near the field has been contracted and will be moved to the Oza-1 wellsite in the near term, and operations to perform the planned re-entry of the Oza-1 well will begin shortly thereafter. The recently completed drilling pad will be used for both the Oza-1 well re-entry and the first horizontal development well on the Oza Oil Field.

The funds proposed to be used from San Leon on Oza are now expected to be used on the drilling of the new well on the Oza structure.

© 2021 Festac News Press Ltd..