All posts tagged feature

Nafi Chinery Confirmed as Africa Director, Natural Resource Governance Institute

The Ghanaian development specialist, Nafi Chinery, has been formally appointed Africa director of the Natural Resource Governance Institute (NRGI).

She had been the interim Africa Director of the Institute since November 2022, a role in which she was specifically directed to oversee the activities of NRGI’s Africa team and provide strategic leadership for NRGI’s work in the region and globally.

“Since joining NRGI in 2017, Nafi has been a strategic leader, a dynamic ambassador and an innovative implementor”, says Suneeta Kaimal, president and CEO of NRGI. “In her service as interim Africa director since November 2022, she has demonstrated her ambition and vision for our Africa programme”, Ms. Kaimal explained. “Nafi is the right leader to ensure that NRGI deepens engagements with women and vulnerable communities, and supports the strong African movement to accelerate a just energy transition and manage natural resources accountably in the interest of citizens.”

With this appointment, the NGRI has concluded a search that had been ongoing since 2016. The Africa director, in the organisation’s description, is one “who can build relationships with a diverse range of critical partners and harness the strengths of the organization to advance accountable and effective governance in Africa”.  The institute says that the role is a unique opportunity “to cohesively improve natural resource governance across Africa”.

In the last four months, Ms. Chinery had combined the job of Interim Africa Director with her role of West Africa regional manager (Anglophone) at the Institute, where she supervised the design, implementation and coordination of NRGI’s strategic engagements and programmes in Anglophone West Africa.

What this appointment means is that the role of West Africa regional manager (Anglophone) is open.

“In this new role, my vision is to prioritize transparency and accountability across the extractive sector value chain and help shape a sustainable energy future for Africa,” Chinery offers, in her response to the appointment. “This means actively promoting a just and equitable transition to renewable energy across the continent. It requires constructive engagement with governments, key regional and global institutions, civil society, local communities, vulnerable populations, and the private sector to promote policies and practices that enable African countries and citizens to thrive in the future. From minerals needed for green technology to building economic futures beyond oil, this transition is critical to addressing the twin challenges of climate change and energy poverty in Africa.”

Nafi Chinery has over 20 years of experience in development work. Prior to joining NRGI, she worked with Oxfam GB and the African Women’s Development Fund (AWDF), a pan-African grant-making foundation for women’s rights. She has a longstanding career in organizational development and transformative and strategic leadership. For 17 years, Nafi has worked to develop and strengthen credible well informed women’s rights organizations and leaders to accelerate the respect for women and rights of marginalized groups across Africa.

She holds a master’s degree in social development and sustainable livelihoods from the University of Reading, U.K., and a bachelor of arts and diploma in education from Cape Coast University, Cape Coast, Ghana. She was also a 2014 Aspen New Voices Fellow.

Decom’s Chop Saw makes the cut in Decommissioning Congo Oilfield


Decom Engineering’s specialist cutting technology has been successfully deployed on a decommissioning project offshore West Africa.

Decom deployed its C1-24 chop saw in water depths of up to 1,050 metres as part of an operation to recover a jumper connector on behalf of Total Energies in the Gulf of Guinea, offshore the Democratic Republic of Congo.

The workscope included the cutting of the insulated 6” Duplex flowline at each end of the jumper, with the chop saw deployed by ROV with hot stab capability, and using a Tungsten Carbon Tip blade with an average cutting time of 1 hour 15 minutes.

The Congo project follows other successful workscopes on behalf of major oil and gas operators and contractors including workscopes in the North Sea, Mauritania, Norway, and Gulf of Thailand.

Established in the United Kingdom in 2011 and with bases in Aberdeen and Belfast, Decom is an R&D specialist focusing on the design and fabrication of cutting solutions and innovative decommissioning equipment, with a growing reputation for providing complex deep water project solutions.

Sean Conway, Decom Engineering managing director, says: “Our C1 range of chop saws are firmly established in the decommissioning sector where the nature of the work and complexity of the projects require smart solutions and fresh thinking.

“Our latest project in deep water offshore DCR is another tick in the box for the versatility, safety and efficiency of our cutting technologies, adding to an extensive track record of completed workscopes in the major hydrocarbon producing regions”.

“Decommissioning redundant piping infrastructure or repurposing assets to be converted for low or zero carbon energy storage is a massive global market, and we are committed to investing in research and development to ensure our clients have the most sustainable means at their disposal to address their needs.”

The C-1 chop saw range is certified for use in water depths of up to 2,000 metres, has multiple buoyancy options, hot stab integration, blade reverse capability and bespoke customisation capabilities.

Decom are expanding its C1 chop saw range with development of new model which will be capable of cutting piping infrastructure of up to 46” in diameter.

NNPC Plots a Return to Seismic Activity in the Chad Basin: Mele Kyari’s Valedictory?

By Macson Obojemuinmoin

Nigeria’s state hydrocarbon company NNPC Ltd, is mulling a return to its long-halted seismic acquisition campaign in the vicinity of Maiduguri in the Chad Basin.

Earlier plans to move to a well location in the area, and commence a drilling activity in parallel with the company’s wildcat drilling in Nasarawa State, is held up by decisions to reduce uncertainties with high grade seismic information. Previously scheduled seismic sweep in the Chad Basin has been inhibited by the rampaging Islamic insurgency; while NNPC has been able to carry out operations elsewhere in the north of the country, it has been unable to work in the northeast.

The proposed well locations in Nasarawa, in the country’s north central region, are sited in the middle Benue Trough, one of Nigeria’s several, inland rift sedimentary basins.

NNPC Ltd has carried out extensive geological mapping and geochemical sampling, as well as stress field surveys in some of these basins in the north of the country in the last six years. Based on the results of these surveys, it acquires focused three dimensional (3D) seismic data, which is how it arrived at the specific drilling locations in Nasarawa.

The most prospective of those basins, often considered low hanging fruits, have been the Dahomey (Benin) Basin and the Anambra Basin, both of which are located in the south of the country. They have benefitted from extensive geologic work by the private sector, but the state hydrocarbon firm has ignored those data.

 “When we shoot 3Ds, we are prospect specific. It is not random”, explains a ranking official in the Ministry of Petroleum Resources in Abuja, speaking on condition of anonymity. “If we make a find, we’d drill one or two appraisal wells and then offer the blocks up to the private sector for development”.

The Chad basin campaign, in the far northeast, has been on and off for the past 40 years. As head of state in February 1985, Muhammadu Buhari, then a serving Military General, visited a site of the (then) Chad Basin drilling. At the time, 22 wells had been drilled, with only two of them indicating hydrocarbon shows.

Apart from the Niger Delta, where all the country’s crude oil is currently being extracted, Nigeria has over five sedimentary basins which, earth scientists have confirmed, have working petroleum systems. For most of the last 30 years, the most prospective of those basins, often considered low hanging fruits, have been the Dahomey (Benin) Basin and the Anambra Basin, both of which are located in the south of the country. They have benefitted from extensive geologic work by the private sector, but the state hydrocarbon firm has ignored those data. The NNPC has been only keen on basins located in the north, and has not been transparent with the reports of the resources in place.

The NNPC Ltd’s management had hoped it could drill a well in the Chad basin, before the expiration of Buhari’s tenure at the end of May 2023. If the incoming administration chooses to ease out Mele Kyari, the Nigerian geologist who is NNPC’s Group Chief Executive Officer (GCEO), the Chad Basin seismic acquisition will be one of his key valedictory projects.

Vaalco Gets Approval for a Small Field Development offshore Equatorial Guinea

New York listed junior Vaalco Energy has won approval of the Equatorial Guinea authorities move on with the development of the Venus discovery in Block P, in shallow offshore in the Rio Muni basin.

The company and its partners will spud the first development well in early 2024, and acquire, convert, and install production infrastructure over the next three years.

Vaalco and co will spud an additional development and a water injection well in 2025-26.

Venus field activities are expected to add 23.1Million barrels of oil of 2P gross reserves.

The partners expect production from the field to peak around 15,000 gross Barrels of Oil Per Day of oil upon completion of the two development wells and injector well, based on results from the initial discovery well and reservoir modeling
Vaalco is the operator (60%) of Block P, Atlas Petroleum, a Nigerian owned independent, holds a 20% participating interest, and GEPetrol has a 20% carried interest.

“The Plan of Development POD for the discovery was submitted in early March 2023 and swiftly approved by the Ministry of Mines and Hydrocarbons of Equatorial Guinea”, the partners say in a release.

Located in Block P, Venus was discovered in 2005, but it was considered rather marginal for fast track development.

TGS /Petrodata to Acquire 11,000Sq km of Seismic Data off Nigeria

The TGS-Petrodata joint venture has received the approval of the Nigerian authorities to commence a $55Million three-dimensional (3D) ‘carpet’, multi-client seismic survey in the deepwater Niger Delta.

It’s an ambitious project which has benefitted from industry prefunding.

Chevron’s pre-funding of the project with $28Million is a bet on Nigeria’s deepwater future, say spokesmen for TGS and Petrodata.

Some other international operators have indicated interest in acquiring the data after production, but they will not get the benefit of the discount that Chevron is getting for pre-funding.

The first and second phases of the data acquisition are 5,500 square kilometres, each in areal size. China Oilfield Services Limited (COSL), a majority owned subsidiary of Chinese state-owned company China National Offshore Oil Corporation (CNOOC) Group, will provide a Chinese made acquisition vessel. “The proposed acquisition will have significant offset, with 10kilometre long streamers”., the operators’ spokespersons say.

NDEP Doubles its Refining Output in Ogbele

Niger Delta Exploration & Production (NDEP) Plc, produced 152.84Million litres of diesel, kerosene, high pour fuel oil and naphtha from its three -phase refinery in 2022.

Nigeria’s best ranked indigenous E&P firm doubled its output of petroleum products for the second consecutive year: 2022’s was 105% increase on 2021’s 74.53Million litres. That itself was double the output of 37Million litres in 2020.

“The refinery was the focal point for the company’s realising value in 2022”, says Gbite Falade, the company’s Chief Executive Officer.

The surge in production was extracted in a severely challenging business environment. As crude oil export dropped as a result of the outage of the Trans Niger Pipeline, NDEP proceeded to debottleneck the refinery production from upstream oil production, pumping in more crude into its 11,000Barrel Per Stream Day refinery complex. “Capacity utilisation improved to 24.0% from 13.45% in 2021; underscoring further upside potential as well as additional opportunities that exist to further optimise the refinery business”, Falade says in an update.

But there are back end stories to these figures.

One is about Naptha, a product which wasn’t sold on its own. Until 2022, it had always been spiked into the crude stream and exported. But the nine-month long outage of the TransNiger Pipeline in 2022 meant that there was no market for the Naptha as it is not in demand in Nigeria. “We had to work with regulators and standards agencies, for the licencing for storage and export of Naptha, satisfying very stringent requirements”, Falade explains.

In the event the company has one more petroleum product, outside of raw crude and gas, that is a foreign exchange income earner.

NDEP’s refining growth is set against the background of the unproven nature of the crude oil refining landscape.

Unlike upstream work, which teems with activity and skills that can be hired round the corner, the refining landscape lacks a robust technical workforce.

State owned NNPC, with combined nameplate capacity of 445000BPSD, has been the only warehouse of refining skills in the country, but it has been chronically inefficient and hasn’t produced anywhere close to 15% of its capacity in 15 years. “Local support from a technical and operational point of view is lacking”, Falade says. Which is why the company has always had to bring in Original Equipment Manufacturers (OEM) personnel to ‘put out fires’, in a manner of speaking. The company has been investing in upskilling and ensuring that OEM personnel adequately pass on the skills.

Other challenges have tested the capacity to deliver.

Falade recalls the vigorous work of lowering the pour point of the High Pour Fuel Oil, one of the refinery’s top revenue earners. “At atmospheric pressure, the product was congealing, such that offtake was complicated”, he explains. He is happy to conclude that the resolution of every one of these complications has aided the improvement of the refining ecosystem. “There’s a curve we are passing which anyone who comes after us would not need to navigate”.

PGS Completes $450Million Refinancing, Says Seismic Market Is in Strong Recovery

Norwegian marine geophysical company, PGS ASA, has successfully placed a new $450Million senior secured bond with 4-year.

The proceeds from the Bonds will together with cash held on balance sheet be used to repay $600Million of the Company’s Term Loan B (the “TLB”) maturing in March 2024 at par value. The Transaction is expected to be completed around March 31, 2023.

“The offshore seismic market is in strong recovery as multiple years of underinvestment in oil and gas exploration and development, combined with a materially changed energy security situation, drive a strong increase of E&P spending”, the company says in a release.

“The Transaction materially improves the Company’s debt maturity profile while still allowing PGS flexibility to pursue its deleveraging strategy without incurring excessive costs.

  • After the Transaction, $138Million of the TLB maturing in March 2024 will remain outstanding and be repaid at par value from cash flow and liquidity sources
  • The $50Million super senior loan maturing in March 2024 remains in place. The loan may be extended by one year at the Company’s discretion or alternatively be replaced by a revolving credit and guarantee facility of up to $75Mllion
  • The Bonds are callable after two years with a customary declining call premium profile

PGS made a repayment of $83Million on its export credit financing (ECF) loans in early February 2023. The remaining balance of the ECF loans is $180Million gross (~$140Million net, if considering ~$40Million of restricted cash for debt service on the ECF loans).

The Bonds will carry a fixed interest of 13.5%. The total interest costs for the Company will be reduced following the Transaction as the Company will have significantly less debt. In addition, the interest on the remaining portion of the TLB is expected to be reduced by approximately 1% as a result of improved credit ratings and lower leverage. The Company remains committed to continue reducing its debt and thereby further reduce interest cost.

PGS insists it retains a strong liquidity reserve after the debt repayments.

DNB Markets, a part of DNB Bank ASA and Pareto Securities AS acted as joint bookrunners (the “Joint Bookrunners”) for the issuance of the Bonds. Advokatfirmaet BAHR AS is acting as Norwegian counsel to the Company and Wikborg Rein Advokatfirma AS is acting as Norwegian counsel to the Joint Bookrunners and Nordic Trustee.

PGS ASA and its subsidiaries provides a broad range of seismic and reservoir services, including data acquisition, imaging, interpretation, and field evaluation to the oil and gas industry, as well as to the broader and emerging new energy industries, including carbon storage and offshore wind.

Seplat Sues ABC Orjiako in Court For “Impersonation, Grave Act of Deceit”, Demands ₦5Billion

Seplat Energy has commenced legal proceedings against its former chairman Ambrosie Bryant Chukwueloa (ABC) Orjiako, and his consulting company Amaze Limited, demanding the sum of five billion naira (₦5 Billion) as damages.

Seplat is levelling allegations of a host of corporate governance infractions against Mr. Orjiako a co-founder of the company, who retired from the board in May 2022. The proceedings centre around the manner of execution of his consultancy contract with the company, awarded in mid-2022, for services that would assist Seplat Energy Plc with specific and essential external stakeholder engagements he was involved in, which continued beyond the date he stepped down.  At the heart of that contract is to engage with agencies of the state to deliver on the closure of the company’s acquisition of the entire shares of Mobil Producing Nigeria Unlimited, which has been held up for over a year.

That contract was suspended before this court challenge.

Part of Seplat’s claim in the writ of summons is that Orjiako unilaterally issued a letter purporting to be from the company, with the company’s letterhead-without Seplat’s approval-to the President of Nigeria and Honourable Minister of Petroleum, “an act of deceit and false representation especially as it is intended to bind Seplat in a transaction worth over $300Million”. Seplat alleges that, in the said letter, Orjiako describes himself as Pioneer Chairman, a position unknown to the relevant law on corporate matters, especially as the letter sought to create the false impression that he had the authority of Seplat to bind the company in an offer of rights worth over $300Million.

The timing of the writ of summons, filed at the Federal High Court in Abuja, capital of Nigeria, on March 21, 2023, is telling, coming less than two weeks after a Federal High Court in Lagos issued an interim order restricting Roger Brown, the Chief Executive of Seplat , from everyday running and management of the company, based on a motion by some stakeholders on notice for interlocutory injunction.

The court action against Mr. Brown, instituted within 48 hours of his deportation for “charges of racism, favouring of foreign workers, and discriminating against Nigerian employees”, was clearly suggestive of a high stake wangling between some very interested persons and the Seplat’s board and top management.

In the statement it issued after Roger Brown’s deportation, the Board of Directors had pointedly noted that the allegations against Brown, a British national, are “a spurious and vindictive reaction to the enforcement of corporate governance standards in the company.”

The question had always been: whose interests could Roger Brown and the multinational board of directors of Seplat have hurt so badly that they don’t mind wrestling the company to the mud? Whose sense of justice has been affronted? Whose sense of entitlement has been so bruised, or whose sense of outrage has been stoked by Brown & Company in a way that ‘the victim’ feels justified in throwing everything into the fight?

Seplat’s top six shareholders are Maurel & Prom (20.7%); Petrolin (14.5%) Platform Group (11.5%), Sustainable Capital (SA) 9.5% and Shebah Group (8.5%). Nigerian institutional investors (Pension funds and insurance companies) hold about 15%.

Mr. Orjiako’s interests in Seplat are held through Shebah Group, of which he is founder. The group has a representation on the board, as does Platform Group and M&P, all three of which are Seplat’s co-founders. Petrolin and Sustainable Capital (SA) decline to have seats on the board.

In its writ of summons, Seplat is asking the court to declare that Orjiako and Amaze Limited (his consultancy company) acted in contravention of the Companies and Allied Matters Act (CAMA) and the operations and regulations of Seplat when they unilaterally issued a letter dated December 22, 2022 purporting same to be from Seplat to the President of Nigeria and the Honourable Minister of State for Petroleum Resources, without the approval of Seplat or its Board of Directors.

Kinetiko and Renergen: How Domestic Gas Production can help Mitigate South Africa’s Energy Crisis

By NJ Ayuk

The country’s fuel and energy sector is truly in trouble, with power shortages and blackouts worse than ever before

South Africa is facing an energy crisis on a very large scale. It’s not for nothing that President Cyril Ramaphosa took the unprecedented step of declaring a “national disaster” in February. The country’s fuel and energy sector is truly in trouble, with power shortages and blackouts worse than ever before.

There are some hopes for relief, including efforts to find new sources of fuel for thermal power plants (TPPs).

On the one hand, South Africa possesses large offshore natural gas reserves in the Outeniqua basin and may be able to find more in its section of the Orange basin and elsewhere. On the other hand, it shares borders with other two future gas producers – Namibia and Mozambique, both of which have sizeable reserves and smaller populations than South Africa – that may be willing to export some of their bounty under the right conditions.

Nevertheless, these solutions are still some distance away, given that it will take years to bring gas from these large-scale projects to market.

In the meantime, South Africa should not lose sight of the fact that it has other solutions at hand.

It is true that the solutions I’m talking about are considerably smaller in scale and humbler in nature than the massive projects I’ve already mentioned. They don’t target massive reservoirs in deepwater frontier basins, and they won’t deliver hundreds of thousands of barrels of oil equivalent per day  through multi-billion-dollar investments. But they do have the potential to offer crucial support to Africa’s second-largest economy at a time of severe crisis.

I know of two companies that are in a position to offer this kind of support. Nevertheless, these solutions are still some distance away, given that it will take years to bring gas from these large-scale projects to market.

In the meantime, South Africa should not lose sight of the fact that it has other solutions at hand.

  • Kinetiko Energy: Onshore Gas Supplies to Local Power Stations

One of them is Kinetiko Energy, an Australian company that is working to develop conventional gas reserves in southern Africa. Its primary focus is the Amersfoort-to-Volksrustregion, which focuses on a large gas deposit in the Mpumalanga province, southeast of Johannesburg. Kinetiko is still working to determine exactly how much gas its licenses contain, but it is optimistic in light of the fact that the area has long been known to hold very high-quality methane in shallow sediments and coal-beds, and it has estimated its 2C resource at 4.9Trillion cubic feet.

On January 30, 2023, the company issued a statement extolling the “record breaking” results achieved from a new core well, 271-23C, during logging and core-sample testing after the completion of a three-well drilling program. The statement included some insights into the well’s geology, but it also quoted Kinetiko CEO Nick de Blocq as saying that 271-23C was in a favorable geographic location. Specifically, he drew attention to the well’s position in Block ER271, close enough to the Majuba TPP to represent a field which could supply it with gas in addition to coal, its usual fuel.

Meanwhile, de Blocq also drew attention to 270-03C and 270-06C, the other wells drilled during the three-well drilling campaign. He pointed out that the Lily Pipeline runs through all of Kinetiko’s current blocks, including Block ER270. This is South Africa’s largest gas conduit, which transports (primarily Mozambican) gas from Sasol’s Secunda plant to coastal cities and to industrial consumers in the KwaZulu Natal region. “The proximate location of our southernmost boreholes in ER270 to the steel-smelting and manufacturing centre of Newcastle could mean a simplified logistical solution to get the gas to an increasingly hungry thermal industry market,” he stated.

Of course, it is true that Kinetiko is still working to finalize its plans. It has yet to determine exactly when it can begin commercial production, having started the activities required to evolve their Exploration Right into a Production Right, and it is busy negotiating with midstream players who bring downstream offtakers and financing. But it is optimistic about its ability to launch small-scale development quickly — and about its ability to make a local power-generating entity one of its very first clients. This is the sort of initiative and drive that has the potential to benefit South Africans greatly on a local level while larger-scale solutions come together, and I hope to see more of it.

INDEED, IF SOUTH AFRICA WAS WILLING to take steps to open up more of the onshore basins that might hold gas — such as the Karoo basin— it would be giving investors a signal that it was ready to entertain new solutions to a problem that has persisted for far too long.

Of course, when I call for new solutions, I don’t mean it’s time to give free rein to polluters and forget about environmental concerns entirely. If South Africa is going to develop an onshore gas industry, the government ought to be making plans to develop the regulatory regime accordingly, and investors ought to be keeping environmental concerns front and center as well.

But there’s good news: Some of them are already doing so.

(2) Renergen: Demand for Gas Beyond Power Generation

And that brings me to my second example: Renergen, the native South African company that is carrying out the Virginia gas project.

Renergen has been working to develop three conventional gas fields in Free State – Theunissen, Virginia, and Welkom, which are collectively estimated to hold nearly 407Billion cubic feet  of conventional natural gas in proved and probable (2P) reserves. It is keen to monetize these fields because they contain relatively high levels of helium — a commodity that is both valuable and rare — as well as gas. As such, it has worked to transform its initial compressed natural gas (CNG) initiative into a larger-scale and considerably more ambitious liquefied natural gas (LNG) project.

In September of last year, Renergen started up its onshore gas liquefaction plant, becoming South Africa’s very first producer of LNG. The company touted its environmental credentials in a Twitter post announcing the launch, noting that the plant’s output would help reduce the country’s carbon footprint by making a new type of fuel with lower emissions intensity than diesel available for trucking and other commercial uses. It was referring to a deal signed in the summer of 2020 with Total South Africa, a subsidiary of the French major TOTALEnergies on joint marketing and distribution of LNG. Under that deal, Renergen agreed to deliver some of the LNG from the first phase of its plant to Total-branded filling stations along the N3 road, a major highway connecting Durban and Johannesburg, for sale as a long-haul trucking fuel. It also pledged to make more LNG available for distribution and sale via Total stations along other key highways once the second phase of its plant came online, saying that expanding the use of LNG in the road freight sector would help curb the rise in carbon emissions.

But Renergen has not confined its efforts to transport. It has also targeted industrial customers, and in August 2021 it signed a five-year supply agreement with Ardagh Glass Packing (previously known as Consol Glass), a supplier of glass packaging materials based in Johannesburg. Then in February 2022, it followed that with another five-year deal — this time, with Ceramic Industries Group, based in Vereeniging. Both Ardagh and Ceramic Industries are subsidiaries of Italtile, based in Cape Town; Ardagh has said it intends to use the LNG to replace liquid petroleum gas (LPG) at its Belville operation in the Western Cape area, while Ceramic Industries will use LNG to supplement the gas supplies it receives via pipeline. Renergen made its very first shipment of LNG to Ardagh’s Belville site in December 2022 after setting up turn-key delivery facilities per the terms of its contract.

At that time, the company said it had received expressions of interest in its LNG from multiple South African businesses, including independent power producers (IPPs), large-scale industrial manufacturers, and heavy logistics operators. It did not name any potential new clients, and since then, its efforts to drum up new business may have been overshadowed by the escalating energy crisis.

Nevertheless, Renergen’s efforts to establish a foothold in the industrial and transport sectors are important. They demonstrate that there is ample room for natural gas in South Africa – that there are opportunities for gasification in the country that are not confined to the power-generating sector.

Yes, South Africa urgently needs gas to help resolve its energy emergency. Gas will help South Africa find ways to produce the additional electricity it needs to provide all of its citizens with reliable and secure power — both in the longer run as new offshore fields come online and in the shorter term as companies such as Kinetiko and Renergen develop onshore resources.

But South Africa could also use gas for other purposes. It could use gas as a substitute for diesel in long-haul trucking — and thereby reduce emissions in the transport sector. It could introduce LNG as a fuel for industrial customers — and thereby reduce emissions in that part of the economy, while also reducing the drain on the national transmission grid. It could create markets that can be sustained and made profitable even beyond the time when (I hope) the current crisis will be nothing but a memory.

Let us give South Africa’s smaller-scale gas producers a chance to grow.

NJ Ayuk is the Executive Chairman of the African Energy Chamber ( and Author of “A Just Transition: Making Energy Poverty History with an Energy Mix”.

’The Most Crooked Oil Deal of the Era’


By Paul Kenyon

The industry was ‘following the oil’ – wherever a big strike occurred, it was always assumed more would follow – and now Libya was that place and Tripoli was a boom town.

Orser and his family settled into the city’s expat community, living at first in a primitive duplex with no cupboards and only wood-burning stoves against the winter chill. The country remained desperately poor. The Esso discovery had been in a remote spot, far out in the Sahara Desert. A pipeline would be needed to link it to a port and that could take years to build. Even then, there was no refinery; the infrastructure just didn’t exist. Although King Idris promised that the Zelten Field would revolutionize the country’s fortunes, it was going to take time to work its way through the economy. But there were signs already that the money was being diverted into the pockets of the king’s men.

In a flash, Idris had gone from being an impoverished hermit, writing begging letters to Britain and the US, to a king whose country was awash with dollars, able to make rich men of whomever he chose. The opportunity for personal enrichment came at the point of auction. The oilmen were prepared to be extremely generous to whomever put them in pole position. ‘There were kickbacks galore,’ says Orser, ‘and many greedy hands.’ One new boy on the block, a small independent American company, learned how to fill those greedy hands like no other. Its name was Occidental Petroleum.

As it turned out, the king’s most trusted lieutenant was so well insulated by layers of dealmakers and officials that the Doctor needed intermediaries just to introduce him to the intermediaries.

On an autumn day in 1967, David Orser was sitting in his Mobil office when news reached him that seemed to suck the air from the room.

It had all begun when Mobil was forced to surrender one of its least-promising concessions at the end of the five-year cycle imposed by Idris. There was to be an auction. As usual, one of the big seven oil companies was expected to win. This tiny outfit from California, Occidental, or Oxy as it was known, was sniffing around, and no one could understand why. It had no expertise in oil exploration outside the US, no experience of running concessions, and anyway, Idris’s prices were too high, way out of Oxy’s league.

But, despite competitive bids from the other players, Oxy some­how walked away with Mobil’s former concession: blocks 102 and 103, 2,000 square miles of bleak, gravelly desert in the Sirte Basin, more than 100 miles from the coast. The others scoffed from the sidelines. Oxy would have no idea where or how to drill, and no chance of riding out the inevitable dry holes. They’d be bankrupt before the concession was up.

Then came the news that had so alarmed David Orser’s office in the autumn of 1966. Oxy had struck oil, first at block 102, and then at 103, not just a few drops but a spectacular field. It dwarfed the first Libyan discovery. There were 3Billion barrels down there, making it one of the most prolific deposits in the world. Sweet Libyan crude came shooting straight from the ground. To make matters worse it had happened right beneath an abandoned Mobil desert camp. The ageing seismic apparatus that Mobil used meant they had missed it.

THE DISCOVERY REQUIRED AN APPROPRIATE CELEBRATION. There was to be a party for the king. A vast marquee was erected in the desert, its floors laid with fine Persian carpets, rose petals scattered along its walkways. Oxy presented Idris with a Faberge cigarette case, and his wife with a Faberge beauty box. In the middle of the celebrations, the company’s ecstatic bosses announced they would rename the block. From now on, it was to be called ‘The Idris Field’. Of course, the Mobil team only heard about all this second-hand. They had not been invited to the party.

But the question remained: how did an unknown oil company manage to leap the rest of the field?

Occidental Petroleum was run by an American industrialist named Dr Armand Hammer, or simply ‘the Doctor’. He was a dealmaker extraordinaire, a tireless schmoozer who was already in his sixties when Occidental arrived in Libya but had lost none of his appetite for moneymaking, or his knack of knowing who to pay off. His Libyan contact book was empty. The country had been in the business deep­freeze so long, he had no connections there. When the Doctor heard about that first Esso strike, he had sent out a speculative team with a brief to bring him back a piece of the action.

It was said that the route to oil success in Libya passed through the bank accounts of a man called Omar Shelhi. Shelhi was a short, bullish man who had spent time in exile with King Idris during the war and was now treated as his adopted son. Idris had needed someone to oversee the bidding process, and Shelhi seemed the obvious choice.

It hadn’t taken the Doctor long to realize that Shelhi was his target. As it turned out, the king’s most trusted lieutenant was so well insulated by layers of dealmakers and officials that the Doctor needed intermediaries just to introduce him to the intermediaries.

As the deadline for bids approached, he finally managed to secure a meeting with a facilitator called Hans Kunz, a Swiss citizen who had begun his working life as a lowly fixer in the oil industry. Kunz passed the Doctor to his business partner, a man called Kemal Zade, a Soviet who had graduated from the London School of Economics. Zade didn’t actually know Shelhi, and so couldn’t organize the introduction personally, but he did know Shelhi’s brother. He could pass the Doctor to him. It was a maddeningly circuitous route, but with just days to go until the deadline for bids, the Doctor had no better option.

Even that plan had a hitch. The two intermediaries didn’t want to recommend the Doctor without getting to know him personally. They needed to make sure he wasn’t a time-waster. The Doctor was invited to a hastily arranged dinner in Germany, for no other reason than that was where Zade lived, and it was Zade who was calling the shots. The Doctor flew out the next day to meet the two inter­mediaries. They drank and ate while a belly-dancer gyrated around their table, and the Doctor impressed them so much, they made the call to Shelhi’s brother that same night.

A week later, the Doctor met Shelhi himself in another German hotel. The king’s representative was not impressed by what he saw. The Doctor looked like a crumpled pensioner and seemed to have no idea about oil. He had no concept of prices or how the bidding system worked, and Shelhi had the world’s seven biggest producers waiting to wine and dine him back in Tripoli. But slowly the Doctor worked his charms. He had no board of directors, he said, no auditors and no shareholders. There was no one making sure that he followed company rules because he was Occidental. He set the rules. As Shelhi visibly warmed to him that night, the Doctor announced that, should he win the concession, he would make Shelhi ‘the richest man in all Europe’.

What followed was the most crooked oil deal of the era.

The others scoffed from the sidelines. Oxy would have no idea where or how to drill, and no chance of riding out the inevitable dry holes. They’d be bankrupt before the concession was up.

Shelhi and the two facilitators would require $2.8Million in cash from the Doctor as a thank-you for being awarded the concession. The Doctor agreed, but it was just the start. If they struck oil, they would then require a cut of the money from every barrel sold. They set the figure at a modest-sounding 3 per cent, which was to be paid into their Swiss bank accounts. That was before Oxy struck oil, of course, so no one knew quite how that 3 per cent would translate into cash.

Excerpted from Dictatorland: The Men Who Stole Africa, first published in the UK in 2018 by Head of Zeus Ltd.

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