All posts tagged feature


TOTAL in A Second Big Discovery in South Africa

With the second major discovery in less than two years, South Africa is shaping to become a major gas/condensate heartland for the French major TOTAL.

The company has announced that its drilling of the Luiperd prospect, which follows up the play opening 2019Brulpadda discovery, has yielded another “significant gas condensate discovery” on the Block 11B/12B in the Outeniqua Basin, 175 kilometers off the country’s southern coast.

The Luiperd well was drilled to a total depth of about 3,400 meters and encountered 73 meters of net gas condensate pay in well-developed good quality Lower Cretaceous reservoirs. Following a comprehensive coring and logging program the well will be tested to assess the dynamic reservoir characteristics and deliverability.

We are very pleased with this second discovery and its very encouraging results, which prove the world-class nature of this offshore gas play,” said Arnaud Breuillac, President Exploration & Production at TOTAL. ‘’With this discovery and the successful seismic acquisitions, Total and its partners have acquired important data on the Paddavissie fairway, which will help to progress development studies and engage with South African authorities regarding the possible conditions of the gas commercialization.”

The Block 11B/12B covers an area of 19,000 square kilometres, with water depths ranging from 200 to 1,800 metres. It is operated by TOTALwith a 45% working interest, alongside Qatar Petroleum (25%), CNR international (20%) and Main Street, a South African consortium (10%).

 


Two Percent Is Too High for Operators to Pay Now, NCDMB Pleads

The Nigerian Content Development and Monitoring Board (NCDMB) and key organisations in the country’s oil and gas industry – the Petroleum Technology Association of Nigeria (PETAN), Petroleum Contractors Trade Section (PCTS), Oil Producers Trade Section (OPTS) and the Nigeria LNG Ltd have advised against increasing the percentage of the Nigerian Content Development Fund (NCDF) from the current 1% to 2% as proposed in the amendment of the Nigerian Oil and Gas Industry Content Development (NOGIDC) Act.

The NCDF is deducted from the value of contracts awarded in the oil and gas industry and was pegged at 1%  by the NOGICD Act of 2010.

The organisations canvassed this position in separate presentations they made last Monday in Abuja at the two-day public hearing organised by the Joint Senate Committee and House of Representatives Committee on Nigerian Content Development and Monitoring.

The NCDMB argued that the 1% NCDF deduction should be maintained, “given the pressure that the global oil and gas companies are facing with cost escalations and price reductions in the industry. With prudent management of the NCDF and the full cooperation of the operating companies, we believe Local Content shall continue to operate efficiently and grow.”

The public hearing is focused on three proposed legislations, namely the Bill for an Act to amend Nigerian Oil and Gas Industry Content Development Act, Cap 2, 2010 and other maters connected thereto and  the Bill for an Act to enact Nigerian Local Content Act for the development, regulation and enforcement of Nigerian Content in all sectors of the Nigerian economy except Oil and Gas Industry Sector and for related matters. The third legislation seeks to repeal the NOGICD Act and enact Nigerian Local Content Development and Enforcement Commission Act and establish the Nigerian Local Content Development and Enforcement Commission.

The NCDMB also responded to the proposed new provision to earmark 0.5%  of gross revenue of oil and gas companies for research and development, saying that the Board welcomes it on the condition that the money would be for the operator’s own utilization. The Board also supported the proposal by the amendment to add Naira to the Benchmark Currency for Local Contracts “This means a paradigm shift from the dollar-denominated provision to a bi-currency model,” the Executive Secretary explained.

 

 


Kaduna Electric Disco (KAEDCO) is Granted a 2MW Renewable Energy Sub-Franchise

Konexa, a renewable energy developer with funding from Climate Fund Managers (CFM), has partnered with Kaduna Electric Distribution Company (KAEDCO), to co-develop a private renewable energy generation and distribution sub-franchise project in the Kaduna state, Nigeria.

The project will consist of the development and construction of a 2.5MW solar PV plant with the potential to include a storage component:

  • Construction of eight solar mini-grids and associated distribution works;
  • Roll out of solar home systems, deployment of smart metering infrastructure;
  • an integrated cutting edge information and operations technology platform, grid network upgrades, as well as securing energy supply from nearby existing renewable generation assets.

The project, requiring an investment of approximately $50Million, will enable Konexa to serve the entire range of customers in its sub-franchise area – from large commercial and industrial customers that currently cannot rely on KAEDCO due to supply reliability and quality issues, to small rural customers that are not viable to be reached by the grid.

The project’s promoters are taking advantage of the Nigerian government’s eligible customer regulation, ratified in 2017, which states that customers with energy demand of more than 2MWh/h per month can directly buy power from a grid connected Genco at a mutually agreed price.

The promoters say that this is an opportunity to contribute towards Nigeria’s grid stability, accelerate the country’s sector reforms and demonstrate the private sub-franchise model.

Donors to the project include donors include Shell and Rockefeller Foundation, the UK’s Foreign, Commonwealth and Development Office and Power Africa and the CFM.

The Nigerian energy sector is notable for its significant energy deficit which has hindered economic growth for many years. Lack of access to grid power has resulted in around 55% of the population resorting to self-generation and has created a $15Billion off-grid market that is primarily fossil-fuel based, Konexa says in a statement.

 

 


Dana Gas Sells Part of Its Egyptian Asset for $236Million

Sharjah based Dana Gas has formally announced the sale of its 100% working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases in Egypt.

Dana Gas will retain its interests in its onshore and offshore exploration concessions, respectively El Matariya (Block 3) and North El Arish (Block 6), and will actively pursue maximizing the value of these assets.

The property on sale produced 30,950 barrels of oil equivalent per day, and contributed $38Million to the Company’s EBITDA in the first half of 2020, the company says. Transfer of ownership, responsibilities and staff to the buyer of the assets will take place upon execution and formal approval of the deeds of assignment for the various concessions.

The beneficiary of the sale is IPR Wastani Petroleum Ltd, a member of the IPR Energy Group to whom Dana Gas is selling for a consideration of up to $236Million. The two parties have entered into a binding agreement with including contingent payments. Under the terms of the sale, the consideration comprises (i) a base cash consideration of $153Million, including the net working capital associated with the assets and before any closing adjustments, and (ii) contingent payments of up to $83Million subject to average Brent prices and production performance between 2020-2023 as well as the realization of potential third party business opportunities. Upon closing, the base consideration will be adjusted by the collections received and payments made by the Company during the intervening period between the effective date, and the closing date.

The transaction, which is subject to a number of conditions precedent and to the Egyptian Ministry of Petroleum and Mineral Resources’ approval, is currently expected to complete early 2021. The proceeds will be used to reduce debt and for general corporate purposes. Consistent with this reported actions this year by most international oil and gas companies, the COVID-19 pandemic and associated negative economic effects, Dana Gas will take an impairment in Q3 2020 which will be disclosed to the market following review by the external auditors as part of the Q3 financial results.

 


OPEC Quota Crimps Indie’s Output in Gabon

Paris based minnow, Maurel et Prom (M&P) reports its working interest oil production (80%) in Gabon’s onshore Ezanga permit dropping by a whopping 14% in the first nine months of the year, compared with the same period in 2019.

The volume was 17,500BOPD (gross production: 21,875 bopd) for the first nine months of 2020.

“This was due to production cuts, initially voluntary, then mandatory as a result of OPEC quotas”, the company explains in its most recent update.

“In order to take advantage of the period of low crude prices, M&P had temporarily suspended production from certain wells to improve reservoir conditions for the future starting from May 2020.

“This effort has subsequently continued under the quotas established by OPEC, of which Gabon is a member. Production at the Ezanga field is therefore currently limited to 19,000BOPD (or 15,200BOPD for M&P working interest).


BRADE: We Place a Premium on our Values

PARTNER CONTENT

The legacy transformation of BRADEAFRICA from a consulting company to a group of companies with interests in Nigeria, Ghana and Uganda is largely due to the premium the company places on its values and human capital. “Our organizational values describes our core principles.” For any institution such as the family unit to be enduring, core values such as integrity, reliability, respect, safety and creativity, must be closely knit. “This is the philosophy behind the recent overhaul of our logo, as this points towards our growth and our strategic improvement plans to maximize shareholder values,” Horace Enemugwem, Business Development Manager for BRADE says in a recent interview with the Africa Oil+Gas Report.

Excerpts:

AOGR: Three years ago or thereabouts BRADE was at the verge of breaking into the Ghanaian industry. It eventually did after overcoming various government-imposed challenges such as the delay in getting the Petroleum Commission Permit. It then organized a synergized training secession between its Nigerian and Ghanaian staff to boost business development. Today, the reality of COVID-19 is with us. How would you say those training have impacted the BRADE business during this period?

BRADE: The 2016/2017 local and foreign trainings for BRADE staff in Ghana and Nigeria was very impactful. We achieved several benefits from the trainings, including enhancement of our capacity to deliver quality services, improvement of our work-culture and development of teamwork & leadership skills among our staff. Now, we do not just do things right, we get it right the first time and every time. We have followed up those trainings with even more in Europe and North America. And the later have facilitated business opportunities and strategic alliances with key OEM’s in Europe and the Americas.

The leadership skills acquired from the trainings aided our business focus and resilience through the pandemic. We are hopeful that other values gathered from the trainings will be utilized as upstream activities pick up in 2021. In this regard, we executed some Engineering projects in 2018 and 2019 for international clients

AOGR: Is Uganda still a big deal for you? How so?

BRADE: Yes, Uganda is still a big deal for us. Uganda is a developing market, with several opportunities and a huge growth potential. We are aware of the major developmental projects coming up in the Oil & Gas industry in Uganda and BRADE is well positioned to participate locally, with a team of experienced professionals and our investments in technology and knowledge transfer. We recently participated in two major tender opportunities for the development of Tilenga Upstream Project for Total E&P. We have received some interests to partner with globally renowned OEMs to deliver projects for Lake Albert development. Hopefully things will move quicker now with a clear plan to take FID after the tax issues between Uganda and the IOCs were resolved.

AOGR: Let‘s talk about why BRADE rebrands. What is the philosophy behind the overhaul of your logo and name? I mean, I knew you first as BRADE Consulting, then BRADE West Africa and now BRADE Africa. Should we expect any more changes in your identity or is this the real deal?

BRADE: The philosophy behind the overhaul of our logo points towards our growth, the premium we place on our values (integrity, reliability, respect, safety and creativity, all qualities that are synonymous with an enduring institution: the family unit) and our strategic improvement plans to maximize shareholder values. Our new visual language is bolder, more colorful, modern, clearer and simpler.

We commenced operation, from inception as a company (BRADE Consulting Limited) and grew into a group of companies (e.g BRADE West Africa Ghana), with interests in the Ghanaian Market and then BRADE Oil & Gas Uganda, to service the nascent industry in Uganda and Eastern Africa. BRADE has grown into an emerging African conglomerate based in Nigeria, Ghana and Uganda with business interests and operations across Africa. The Group’s activities span petroleum and energy services, manufacturing, consulting services and chemical solutions. Our new brand identity marks the start of a new era for BRADE Group, and it will not be changed soon.

AOGR: The BRADE Legacy is something I find very interesting. Could it be part of the reason you added the red tinge to your new logo?

BRADE: Yes. The red tinge was added to our new logo, as a visual depiction of the premium we place on our values as mentioned earlier. This ties into the BRADE Legacy. Our new logo is modern, clearer, and simpler. In the new logo, a new red tone has now been added to the letter “A” in the brand name.

AOGR: Why should anyone care about BRADE Africa aside from the legacy you are trying to build?

BRADE: Asides the legacy, BRADE is proudly African with 100% globally experienced indigenous workforce. At BRADE, we do not just do things right, we get it right the first time and every time. That is something people should care about.

AOGR: I know BRADE prides itself with having hands-on technical and management staff that are industry certified. When it comes to well engineering, what are your main strengths?

BRADE: Our main strengths in Well Engineering lies in our highly trained and experienced well-engineering team, ability to deliver well-engineering projects to budget and  schedule, good relationship with our clients and our excellent work ethics. We deploy our best personnel and technology on every project to provide innovative solutions to technical challenges and improve the performance and economics of our Client’s assets of operators. We design cost-effective wells that deliver value to shareholders.

AOGR: What helped you manage the effects of COVID-19 and how do you intend to reinvent yourself post COVID-19?

BRADE: Our diversity. Although most of our contracted opportunities were suspended, our diversity and business interests helped us sustain cashflow and kept us busy in other service offerings. We have learnt a lot from the pandemic – and presently, we have equipped our offices with upgraded IT infrastructure to support “Work From Home.”

AOGR: What projects are you currently working on in Nigeria, Ghana, and Uganda if any?

BRADE: We have two ongoing contracts with SEPLAT Petroleum Development Company in Nigeria. We are also in the beginning stages of 2 additional field development projects in Nigeria.

Several other contracted projects have been suspended due to COVID-19 pandemic and the decline of upstream activities due to the low price of crude. Hence, we are not part of any project in Ghana at this time. Uganda should come into play in terms of projects, once we succeed in the current “Tendering” stage.

AOGR: What future plans do you have in the pipeline for expansion beyond your current operating locations in Africa?

BRADE: Our current operating locations are strategic, for easy deployment of our services and products across the sub-Saharan region in Africa. Our current operating locations also serve as launching terminals for deployment of resources and solutions for projects in nearby countries. Our plan is to consolidate and grow our operations across our existing locations, in preparation for resumption of upstream Oil & Gas activities in 2021 and beyond.

The Nigerian Oil & Gas industry promises a flurry of activities in the short term, say 6 months to 18 months. We are prepared for that. Realise that the Nigerian Oil & Gas space is quite large, when compared to any of the markets we currently play today.

AOGR: Finally, the call right now seems to be for renewables! In fact, some governments of the world have been taking proactive steps to move away from fossil fuels, the natural resource that Africa depends on heavily for its sustenance. Do you see this impacting the BRADE bottom-line in the next 10 years for instance?

BRADE: Truly, the world is shifting towards a more diversified energy mix to achieve net-zero emissions and a lot of support is being given to renewables at the moment. The argument out there is that what we need is a supplementary source of energy and not a total elimination of pre-existing source which is fossil fuel. Efforts are being made to make fossil fuel cleaner and environmentally friendly hence it will remain dominant for the next 30-plus years to provide the supply needed by the global demand.

Having said the above, we have our thinking caps on. Our Consulting arm is actively working on this. Let’s just say it is still early to let the cat out of the bag on our plans.


New Oil Route Planned to Bypass the Suez Canal

Israel’s state-owned Europe Asia Pipeline Company (EAPC) has inked an agreement with UAE-based Med-Red Land Bridge to move crude oil from the Arabian Gulf to Europe through a land route

Currently crude oil shipments to Europe from the Gulf States go through the Suez Canal, which is supervised by Egypt.

The binding Memorandum of Understanding (MoU) by the two parties, calls for using the existing Eilat-Ashkelon pipeline, owned by EAPC, to connect the Red Sea to the Mediterranean.

EAPC says it could increase the quantity of shipped oil by “tens of millions of tons per year,” according to newswires.

Oil could start flowing through this route at the start of 2021.

EAPC and Med-Red — a consortium of Emirati and Israeli companies say that the “land bridge” to ship oil between countries in the region will save time and fuel compared with the Suez Canal.

Israeli economic magazine, Globes said: “There will be options to bring the oil by tanker to Eilat port or to build a pipeline from the UAE across Saudi Arabia to Israel”, adding that Med-Red is already in “advanced negotiations with major players in the West and in the East for long-term service agreements,” according to EAPC’s statement.

The UAE and Israel began normalizing relations only two months ago, in a truce brokered by the US’ Trump administration.

The proposed alternative route to the Suez Canal will certainly shave significant revenue from the waterway’s pocket.

Nearly 66% of oil sent from the GCC to western countries is shipped through the Suez Canal or the Sumed pipeline linking Alexandria to the Red Sea.

 


I Disliked Tullow, Then I Loved Tullow, and Now What?

By Toyin Akinosho

I was extremely upset when I learned that Tullow Oil, the Irish independent, had delisted Energy Africa from the Johannesburg Stock Exchange.

The year was 2004. Tullow was on acquisition spree in Africa.

Tullow acquired the Cape Town based company for $500Million.

I was upset because Energy Africa was the one homegrown African independent with an active producing asset inventory around the continent.

It was based in Africa, listed on the continent’s most prosperous bourse and had interests in Equatorial Guinea, Congo, Gabon, Cote d’Ivoire, Ghana, Uganda, Egypt and Namibia. Its producing acreages (in Equatorial Guinea, Gabon, Congo) averaged over 20,000 Barrels of Oil Per Day (BOPD) in net output at the time.

I did not know it then, but I was beginning to nurse the sentiment that Africa needed local E&P companies to access acreage licences, operate and extract mineral resources on their own land and build technical and financial capacity on the back of the adventure.

150 years after the first Western mining companies took over vast stretches of continental land and introduced a concept of property rights that favoured them and disadvantaged the natives, they had built fortunes with those assets in their own countries. The best that African companies had become, as of 2004, was to be competent contractors.

At the time, only Nigeria’s Conoil, with about 30,000BOPD in output, operated any producing property with sizable hydrocarbon volume. The other Nigerian owned producing independents, seven of them then, had combined production less than 15,000BOPD.

In South Africa, the only homegrown E&P players were SPI, the Sasol subsidiary, and the state hydrocarbon company, PetroSA. As to why I don’t consider Sasol’s SPI as an African independent, you have to google the company’s history.

There were no comparable homegrown independents in Egypt, Algeria or Angola.

So, Tullow Oil had come from the Western Hemisphere, to shoot down such a stellar African star from the sky. It was pretty depressing.

And this Irish company with a very Irish name, started going about calling itself an African independent.

Tullow claimed it had a reason for the entitlement. It was founded in 1986, primarily to look for and work up small oil fields, which had been left behind by the majors in Africa, with no-one to work them. Its first work programme was to develop some small gas fields in Senegal.

Fast forward 18 years later, the Energy Africa acquisition bolstered this relatively small company.

In 2006, Tullow found oil in Uganda, after Hardman Resources had made the country’s first discovery. The same year, it signed a Petroleum Sharing Contract with the Ghanaian Government for Deepwater Tano Block in 2006. It was a transformative move.

At a conference in Cotonou, Benin Republic, in 2007, I sat through a presentation by Tim O’ Hanlon, then director of Tullow’ Oil’s business development activities in Africa. It was an impassioned speech, brimming with promises of genuine love for the land of my birth.  I became a Fan.

Kosmos Energy’s discovery of the Mahogany field, the first sizable find in Ghana, de-risked Heydua-1, the prospect that Tullow had lined up for drilling in Deepwater Tano. In the event, Heydua turned out to be a straddle play with Mahogany. The unitized field was christened Jubilee and Tullow was appointed operator. In the space of three years, Tullow took Jubilee from discovery to market. By 2010, “Africa’s Leading Independent” had taken off.

Meanwhile, Tullow’s Irish charm was failing to work the magic in Uganda. The Government and a host of civil society groups were demanding more upfront benefits before first oil than the Ghanaians did. There was a part of the Ugandan demand that I lined up behind: would Tullow agree to converting a quarter, even a fifth, of the crude production (after first oil), to petroleum products through a refinery? Tullow demurred, citing bankability issues. The thought came back to me: Africa certainly needs brave local businessmen with industrial scale mindset who, with Government support, would take the risks.

Tullow Oil has never been the largest Western independent operating in Africa. That credit goes to Apache Corp (which also has a higher net hydrocarbon output on the continent, even if the only African country in its portfolio is Egypt), and the defunct Anadarko. Tullow was also never the lead exploration company. In the years that independents were actively foraging in frontier basins that the majors were allegedly not keen on, it was Australia’s Woodside who opened up the Northwest African margin;  Anadarko funded Kosmos Energy’s Ghanaian discovery, and discovered Mozambique and, following the Rovuma basin fairway that Anadarko had proven, BG opened the neighbouring Tanzanian deepwater.

Tullow bore no shame in arriving late and buying entry into the game. But the Irish company was a fast follower.

Then came the company’s 26th year on the continent.  In February 2012, Tullow went into a drilling location in Kenya like any other wildcatter, acting on gut feeling and shooting from the hip, bearing the risk of failure.

Tullow struck oil at a depth shallower than 1,200metres, less than mid-way to the planned 2,700metre depth, in Ngamia 1, in the Turkana County, one of seven sub basins outlined on the Kenyan/Ethiopian concession map.

That discovery conferred even more respect on a company that had benefitted from a carefully deployed publicity machine.

Kenya rolled out the carpet that Uganda didn’t for Tullow. And at some point, it was being suggested that it would take Final Investment Decision on the much smaller Kenyan cluster of fields (about 100,000BOPD at peak) earlier than it would take for Ugandan development (230,000BOPD) peak production.

But who was to know that everything would go downhill from here?

After a number of challenges in East Africa, including the decision by Uganda (prompted by French major TOTAL) to abandon the Kenya route, as well as a considerably drawn out negotiation concerning Tullow’s farm down on its assets in Uganda, Tullow’s shareholders were no longer seeing a clear line of sight to new, significant hydrocarbon production, the type of which happened in Ghana between 2010 (Jubilee) and 2016 (TEN). It portended something about a company that was atrophying, rather growing.

I am running out of space here. Tullow is out of Uganda and it has signaled it was leaving Kenya sooner than later. Production in Ghana will be flat, at best, for a few years and then will start plunging. There is no major new heartland for the company on the continent. Tullow has, in the past six months, ceased calling itself Africa’s Leading Independent. Its reports now bear the title An independent oil and gas company focused on Africa and South America.

This piece was originally published, for the benefit of paying subscribers, in the June 2020 edition of Africa Oil+Gas Report. Sometimes an essay like this is republished in the newsletter; but most times it’s not.

 

 


It’s Official: Tullow Finally Leaves Uganda

The Ugandan Government and the Ugandan Revenue Authority have executed a binding Tax Agreement that reflects the pre-agreed principles on the tax treatment of the sale of Tullow’s Ugandan assets to TOTAL.

Tullow Oil, in a release this morning, October 21, 2020, says it is pleased to announce that the Ugandan Minister of Energy and Mineral Development has also approved the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2.

With all the Government-related conditions to closing having been satisfied, Tullow expects the transaction to close in the coming days after completing certain customary pre-closing steps with TOTAL.

“Tullow will provide a further update once the transaction has closed and funds have been received”, the London listed Tullow says. “On closing, Tullow will receive $500Million consideration and a further $75Million when a Final Investment Decision is taken on the development project.

“In addition, Tullow is entitled to receive contingent payments linked to the oil price payable after production”.


‘I Don’t Have the Chance to Be Chairman of Seplat’-Austin Avuru

By Toyin Akinosho

A few days to the deadline for submission of bids for the Nigerian marginal field bid round, Austin Avuru is going through documents on a desk near a window with almost the same view as the one from his office in his last job.

He is operating from a “family office”, located a whistling distance from the Lagos headquarters of Seplat Petroleum, the London listed company he co-founded and ran for 11 years.

I ask him how deeply involved he is in the marginal field bid round: how many fields he is bidding for.

“You know they say you can bid for a number of fields, but experience will show that you can only win one if you’re lucky”, he responds with the usual candour.  “We applied for three fields with the hope that we can win one and that will be a good start for us. And if we do win, we’ll set up a team which is the operating company for that field. AA HOLDINGS will set it up properly, fund it, supervise the development of that field and then it runs on its own as a company”.

AA HOLDINGS is the vehicle Avuru created for his business life after Seplat, he explains, “a modest investment company run out of our own personal capital, and we’ll concentrate on four areas. The oil and gas upstream which is where I’ve always been, some real estate, some agriculture. The case of agriculture will be greenhouse farming. The farming with greenhouse is let’s see how we can apply some technology to farming and see what the yields will be like and then we will be active in the Nigerian Stock Exchange. In Equity investments. Those are the four areas”.

He has had some time to think it through.

“I had four years to plan for my retirement”, he says. “I gave notice of retirement from Seplat, to the board in July 2016 and named the date of August 1 2020, which was going to be our tenth anniversary as a company. I had a lot of time to prepare, mentally in particular. During this period, I was doing my little calculations; if I put everything all my emoluments and perks all together, what does it amount to? And when I retire, what is the minimum income I would need to have to be able to continue with the modest lifestyle and not necessarily stepping down drastically?. Experience has now shown me that when you’ve had enough time to think through all this, retirement doesn’t come as a shock. As you can see, it’s exactly thirty days after I retired I sat on this desk and started working.

I steer the discussion back to the Marginal field bid round, asking him, if he would run a marginal field operating company, if AAH HOLDINGS wins an oil field

“No! We’ll hire a full team from MD down to run the place”.

‘So’, I ask, ‘if you’re looking at three fields, it means you’re paying all the way down to the last bit, which means you’re investing roughly about $450,000’.

“Yes! About $350,000. It’s a hefty cheque. To tell you the truth, it wasn’t in our 2020 budget when we set out, but we didn’t know what the terms would be, that’s what it is”

I am interested in what Seplat Petroleum will become in Avuru’s life going forward. In corporate Nigeria, co-founders of companies frequently end up becoming Chairmen of the boards.

I am a little surprised by his answer.

“ No! You don’t even have the privilege of eyeing it in the case of Seplat. Dr. A.B.C Orjiakor is the first and only Non-Executive Director to be Chairman. After him, the Chairman of Seplat will be an independent Non-Executive Director. This is how to explain it. I’m still on the board of Seplat, not because I’m ex-CEO, but because Platform group of investors that I represent in Seplat, still have an equity interest of more than 7.5%. If our equity interest drops below 7.5%, we won’t have a seat on the board. That is the shareholders’ interest that I represent. Dr. A.B.C Orjiakor represents the Shebah shareholder interests. So those who are shareholder interest representatives are called non-executive directors. The Executive Directors are members of the management team. The Independents -and there are six of them on the board -are the ones who have no shares in the company at all or they have very few, not enough to think that they have substantial interests, so they essentially represent the minority shareholders and the regulators. They’re the eyes and the ears of the regulators and the minority shareholders. It will be one of those independent directors that will be Chairman after Dr ABC Orjiakor has done being Chairman. I do not even have the chance to be Chairman of Seplat because I’m not an Independent director. That’s part of our governance structure in the sense of it”.

Now it gets interesting.

‘This is what you wrote for yourselves or this is part of what the London Stock Exchange demanded?’, I ask.

“That’s what the London Stock Exchange views as best practice. For an independent director to be Chairman. And for having a Chairman for more than nine years, a number of boundaries here and there and we intend to stay with those. The regulators and the small-sized shareholders would normally be nervous if a major shareholder is also the chairman. So everybody will be much more comfortable if an independent is Chairman and let the major shareholders have their seats on the board to protect their interests. That’s the best practice’.

The Full story will be published in the November 2020 edition of Africa Oil+Gas Report

 

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