All posts tagged feature

Mozambique’s 450MW Gasfired Power Plant Now Certain of Going Ahead

By Macson Obojemiummen

A substantial portion of the debt funding requirements have been secured for the Central Termica de Temane (CTT) power project in Mozambique.

CTT will receive funding of up to $200Million from the U.S. International Development Finance Corporation (DFC) and up to $50Million from the OPEC Fund for International Development (OPEC Fund) once execution of the loan agreements and other closing conditions have been finalised. The International Finance Corporation is expected to provide the balance of the required debt financing and is in the process of finalizing its approvals.

The technical solution for the project has also been finalised.  Through a competitive procurement process, the Spanish contractor, TSK, has been selected to design and construct the power plant, “which will use efficient and well-proven Siemens gas turbines”, Globeeq, a power developer, says  in a note. “TSK has extensive experience in designing similarly-sized combined-cycle power plants utilizing the Siemens turbines”.

The 450 MW gas-fired power project is located at Temane in Inhambane Province in Mozambique.

Originally developed by  Electricidade de Moçambique, E.P. (EDM)  and Sasol New Energy Holdings, Globeleq is lead developer along with its consortium partner, eleQtra in the Temane Energy Consortium (TEC).

The project will supply low cost, reliable power to EDM through a 25-year tolling agreement using natural gas supplied from the Pande-Temane fields operated by Sasol and ENH, the state-owned hydrocarbon company.  TEC will also provide support to EDM in the development of the Temane Transmission Project.

EDM selected TEC in December 2017 as part of a competitive bidding process. “EDM chose the consortium due to its experience developing and operating gas-fired power projects; competitive cost of capital; and ability to deliver the most competitive tariff”, Globeleq claims in a release.

A joint development agreement was signed on 20 June, 2018 to progress the development of the project and bring it to financial close.

On 28 August, 2019, the Government of Mozambique signed financing documents for the Temane Regional Energy Project.

Tanzania’s Natural Gas Supply Sees A Spike from Mnazi Bay

By Toyin Akinosho

Wentworth Resources reported a surge in production of natural gas in Mnazi Bay, one of two main gas processing facilities in Tanzania, in November 2020.

Increased demand had prompted an 18% increase in Mnazi Bay production, to 68.8Million standard cubic feet per day (MMscf/d) in Q3 2020, compared with 58.3 MMscf/d (gross) for H1 2020.

Lifting of COVID-19 restrictions have helped the boost, the company reports.

Indeed, production volumes have also risen during Q4 2020. In November 2020, the volume averaged 74MMscf/d.

Wentworth also reported low operational cost of production of $1.72/Mscf (2019: $1.88/Mscf)

The Mnazi Bay facility has the capacity to supply volumes of 100 MMscf/d (gross).

Production from the Songo Songo Gas project, the country’s older processing plant, trended in the same upward trajectory as that from the Mnazi Bay during Q3 2020.

Songo Songo is being operated by Orca Energy.

Total output was 92.5MMscf/d at Songo Songo, including: (1) gas supplied directly to Industries (13.4 MMscf/d),; (2) to the Power Sector (47.5MMscf/d) and (3)as Protected Gas (31.6MMscfd). Overall, the output in Q3 2020 increased by 19% compared with the 77.8MMscf/d supplied at the Songo Songo plant in Q2 20

Fuller story of Tanzania’s overall natural gas market in 2020 is published in the January 2021 edition of Africa Oil+Gas Report, which is available to paying subscribers of the monthly journal. Also look out for our STEPPING ON THE GAS ANNUAL.


San Leon Pushes Its Oza Field Farmin into 2021

The AIM listed minnow; San Leon Energy, says that its planned investment in the 400 Barrel Per Day Oza Field onshore Niger Delta will not be realized until 2021.

The company says that the parties it is negotiating with “have agreed to extend the completion date to early in the new year”.

“As previously announced, worldwide restrictions put in place in response to the Covid-19 pandemic have slowed the logistical process in concluding the conditions precedent in the Subscription Agreement”, San Leon says in a note.

“Nevertheless progress continues to be made and the trading subsidiary of a major oil company, which along with a local Nigerian bank, is to provide a five year term debt to (licence holder) Millenium Oil and Gas Company Limited, Decklar’s local partner, has provided a further written confirmation of its support of the transaction”, San Leon explains.

“Given the proximity of the Christmas holiday period, the parties have decided to review the status of the outstanding conditions in the new year and assess at that time what remains outstanding”.


Japanese Contractor Wins the O&M Contract for Sangomar FPSO

MODEC, Inc. the supplier of the Floating Production Storage and Offloading (FPSO) vessel for the Sangomar (formerly SNE) Field Development Phase 1 offshore Senegal, has also won the contract to operate and maintain the facility.

Woodside Energy, operator of the project, has  inked a contract with the Japanese company for the operations and maintenance of the FPSO vessel for the Sangomar Field Development Phase 1 (project in the Sangomar Offshore and Sangomar Offshore Deep oil blocks, located offshore Senegal, MODEC reports.

Following the FPSO purchase contract which was signed between Woodside and MODEC on January 10, 2020, with respect to the supply of the FPSO, MODEC will be responsible for the operations and maintenance of the FPSO. The operations and maintenance contract will cover all in-country installation and commissioning activities following which an initial 10 year operations and maintenance term will commence. Extension options are allowed for every year thereafter up to 10 additional years.

The FPSO will be deployed at the Sangomar field located approximately 100 kilometers south of Dakar, Senegal. The Sangomar Field Development is expected to be Senegal’s first offshore oil development.

Scheduled for delivery in 2023, the FPSO vessel will be permanently moored at a water depth of approximately 780 metres by an External Turret mooring system to be supplied by SOFEC, Inc. a MODEC group company.

The FPSO will be capable of processing 100,000 barrels of crude oil per day, 130 million standard cubic feet of gas per day, 145,000 barrels of water injection per day and will have minimum storage capacity of 1,300,000 barrels of crude oil.

TGS, CGG, PGS In New Partnership for Shared Multi-Client Data Offerings

TGS, CGG and PGS, industry leaders of multi-client geoscience data, have announced a pioneering strategic partnership to offer a shared ecosystem providing direct access to their subsurface multi-client data libraries.

The independent, cloud-based ecosystem will offer a single search point to access all three companies’ multi-client data and allow customers to interactively find, visualize and download their subsurface assets and entitlements all in one place.

Kristian Johansen, CEO at TGS, said: “Proactively supporting our clients’ digital transformation initiatives through the development of this one-of-a-kind vendor collaborative ecosystem, accessible from the users’ desktop, is essential to the foundation for any future development of modern subsurface workflows and beyond.”

A beta version is targeted for release in the first quarter of 2021, enabling clients who own data to review the technology and provide feedback, as well as giving other commercial data suppliers the opportunity to evaluate the potential of joining the collaborative approach.

Sophie Zurquiyah, CEO at CGG, said: “The industry historically lacked an ecosystem that provided a vendor neutral single point of access to the industry’s commercial data. This new ecosystem is platform agnostic, which will enable clients to access multi-client seismic and geologic data, when and where they need it.”

A full launch of the ecosystem is expected in the second half of 2021. TGS, CGG, and PGS intend to expand the scope of the project in the future to include additional features, vendors and data types.

Rune Olav Pedersen, President & CEO at PGS, said: “This partnership shows the possibilities when you combine a collaborative approach with the power and breadth of data and the vision to improve customer experience. Combining cloud agnostic direct access to three of the largest multi-client data libraries in one place ensures enhanced efficiency, usability and reduced lead times, raising the bar on customer experience globally.”


Neconde, Shoreline, Lose > 50% of Crude Oil Output to Workers’ Protest

Local contractors and staff working for the NPDC/Neconde Joint Venture in Oil Mining Lease

(OML) 42 and NPDC/Shoreline’s OML 30, in Nigeria’s Delta State, have caused disruption in crude oil output on the assets, ensuring drastic drop by over 50% in each of the OMLs.

They were protesting unpaid salaries and emoluments.

In November 2020, the NPDC/Neconde Joint Venture averaged around 18,000BOPD, a drop of more than half of the JV’s optimal output of 38-42,000BOPD. The same month, the NPDC/Shoreline Joint Venture plunged in output from around 50,000BOPD, to 18,000BOPD, according to field data available to Africa Oil+Gas Report.

OML 30 recorded no production between November 8 and 15, 2020, as a result of the protest, according to the report.

In OML 42, output stoppage occurred from November 22 to 28, record shows.

Reports say that the protesters on OML 42 numbering over 200, escalated things to above-surface level on Tuesday December 8, converging at the main gate of Neconde Energy Limited, located at the Berger

Yard, Warri, in Delta State in the mid-west of the country, vowing not to leave the premises until they were paid. They accused Nestoil and Neconde oil firms of owing them salary arrears and emoluments spanning between 2007 and 2020.

The protesters asserted that “communities, contractors and community staff have been working for Naconde and NNPC, yet they have decided to ignore us”.

Some of the protesters displayed placards with inscriptions such as “We want our total payment today”; “Nestoil pay all our money, stop being wicked to us”; “Stop intimidating us with your security agencies,” among others.




LEKOIL in Talks with Optimum over Obligations

LEKOIL has confirmed that it is currently in talks with Optimum Petroleum Development Company, the Operator of the Oil Prospecting Lease (OPL) 310, over its share of sunk costs and consent fees which fell due on November 30.

Optimum had conveyed its plan to enforce a default clause to Lekoil in a letter as payments to cover the portion of sunk costs and consent fees, have not been received as at when due.

In addition to the fees, Optimum highlighted that Mayfair Assets and Trusts Limited, a fully owned subsidiary of Lekoil has also not made payments to cover general and administrative costs for the year as agreed within the Cost and Revenue Sharing Agreement (CRSA) signed by both companies.

Lekoil continues to discuss with Optimum on deferment of these payments as the company intends to focus its financial and other resources in support of securing funding for the second phase of the Otakikpo development as well as the Ogo appraisal programme.

Working with Optimum, Lekoil says it has identified and engaged an appropriate rig for the appraisal drilling where the service provider has accepted the result of the early performed site survey.

“It is well known that over the years”, Lekoil explains in a release, “Lekoil has resolved similar issues due to the good working relationship between the parties. Lekoil has been able to receive multiple extensions on outstanding payments and remains hopeful of a mutually acceptable solution being reached shortly.

“To finance the appraisal programme, Lekoil has explored and is in constructive discussions with potential financiers to provide a combination of cost effective vendor and alternative financing solutions. A further update will be provided to shareholders when appropriate”.

Optimum Development Limited is an indigenous, Nigerian owned E&P company. With major participating interest in OPL 310 Optimum is the operator and local partner while Lekoil technical and financial partner.


Uganda Invites Bids for Installation of Seismic Data Transcription System

The Petroleum Authority of Uganda has invited sealed bids from eligible bidders for the provision of, among other things:

Supply, Installation, Commissioning and Post Implementation Support for a Fully Functional/Turnkey Seismic Data Transcription System.

The deadline for bid submission is 8th January, 2021 at 10:00am.

The procurement shall be subjected to the PPDA guideline on reservation on schemes to promote local content in public procurement.

Full details of bid requirements are to be found in this link.



Nigeria Caves in, Returns to Subsidy of Gasoline Consumption

By the Editorial Board of Africa Oil+Gas Report

The Nigerian government has reneged on its decision to remove subsidy on gasoline consumption. Following from stringent complaints by the country’s organized labour, the government ruled that the pump price of the product, as of December 8, 2020, which was calculated based on market forces, be reviewed downwards.

The announcement effectively reversed a policy that was informally announced with fanfare by the NNPC in early April 2020, and confirmed the worst expectations of avid callers of petrol price deregulation. The declaration of Chris Ngige, Minister of Labour and Employment, that the Nigerian government had “reduced the pump price of premium motor spirit otherwise known as petrol from ₦168 per litre to 162.44 per litre effective from December 14, 2020”, is a major reversal of a victory that the proponents of reforms in the pricing of energy, thought they had won. The government’s statement, ordering a reduction in price, by fiat, undermines any goal of plugging the Two Trillion Naira annual revenue hole that gasoline subsidy had become.

It also increases the risk profile of, any investment in the gasoline part of the hydrocarbon value chain which had been based on the promise, last April, that “subsidy of gasoline prices was gone forever”.

The April 2020 announcement of subsidy removal had come at a time of abysmally low crude oil prices, so that market fundamentals simply led to a reduction in pump prices at the time. As crude oil price is directly correlatable to pump price of gasoline, it had always been a point of argument, that the government might not be able to sustain the subsidy removal whenever crude oil prices moved to higher grounds. This is what has been proven with Mr. Ngige’s declaration.

In the unfortunate case of Nigeria, at the moment, gasoline is imported, so the landing cost is partly determined by the Naira -Dollar exchange, which has, in the past one month, worsened for the Naira. That has meant that even if crude oil prices had not increased, the pump price of gasoline would have kept increasing-if subsidy removal was maintained-as a result of downward pressure on the local currency. But on top of the foreign exchange crisis, an upward movement of crude oil prices has now crept in, ensuring that market-determine gasoline price is moving skywards. With an artificial cap of pump price of gasoline at ₦162.44, and the government lacking courage to move away from price control, Nigeria is unlikely, any time soon, to adjust to whatever prices are dictated by the market, especially now that crude oil prices are likely to keep trending up, even if modestly.

This means that the chronically indebted petro state will open another file in its growing debt profile; it will have to find a way of paying the subsidy it has now introduced by this cap in price.

It is not the most optimal way for the country to manage its revenue at this point in time.

Giuseppe Ricci Is ENI’s New ‘Chief Operating Officer  for Energy Evolution’

ENI has appointed Giuseppe Ricci as the new Energy Evolution Chief Operating Officer.
The Italian major announces that Massimo Mondazzi, current Energy Evolution Chief Operating Officer, “will leave the Company starting from the 1st January 2021”.
“At the same time, Massimo Mondazzi will be appointed to the Board of Directors of Fondazione ENI Enrico Mattei”, ENI says in a release.
It will be the second job promotion for Ricci in six months. Only last July, he was given a combined role of Deputy Chief Operating Officer for Energy Evolution and Director Green/Traditional Refinery and Marketing for the group.
Before then, he had been literally stuck in a job for eight years: Ricci had been the executive responsible for Health, Safety, Environment and Quality for the entire ENI group since 2012. Prior to that he was responsible for ENI’s Industrial, Refining & Marketing Department.
Mr. Ricci was born in 1958. He graduated from Politecnico Torino, Italy’s oldest engineering University, in 1984.


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