All posts tagged feature


Low Price, Lockdown, Ideal for Oil data G&G Evaluation

The low oil price and restricted movement is the ideal time to expand the home office environment to allow for creative evaluation of all data in a company’s possession to resolve identified challenges in exploration Geoscience

This is the opinion of Ebi Omatsola. Africa’s top exploration thinker.

“That’s when its best to share knowledge with appropriate colleagues and prepare for the good days ahead when and if they come”, says the former Chief Geologist at Shell Nigeria and former MD of Conoil Producing.

“Petroleum is still the anchor for global energy”, Omatsola argues, and even if it’s very low priced at the moment, “Prices will still rise sufficiently to encourage low hanging Near Facility Exploration (NFEP)”, he explains.

Contending that natural gas is becoming the most important transition energy resource, Omatsola advises G&G (Geology and Geophysics) staff to pull out Prospect inventory and work them up, “as long as those prospects are in the NFEP category”.


Mojapelo Takes Hold of BP’s Largest African Downstream Operations

BP has appointed Taelo Mojapelo as Chief Executive Officer of its Southern African business unit (BPSA).
The supply chain expert succeeds Priscillah Mabelane, the accountant who, reputably, is the first woman in the history of South Africa’s oil industry to head up a multinational company.

Mojapelo’s last job was Director as Customer Service & Logistics at Mondelez, a position she took up in June 2017.

She had worked at DHL, South African Breweries, SAPICS and Kellogg’s.

The choice of a supply chain specialist as CEO is indicative of BP Southern Africa’s customer-centric focus.

BP SA has over 500 service stations in South Africa alone, comprising of over 200 branded convenience stores.

BPSA owns, with Shell, the largest crude oil refinery in South Africa (the 180,000BOPD SAPREF), which is located in Durban, the seaside holiday town on the edge of the Indian Ocean. It also manufactures lubricants at an oil blending plant located in the city of Durban. The company operates nine depots and three coastal installations, as well as the largest rail gantry in Africa located in Pretoria with planned upgrades to key depots.

 


America’s Move Against Adesina’s Re-election, Fits A Pattern

By the Editorial Board of Africa Oil+Gas Report

With its negative reaction to the conclusions in the report of the ethics committee of the African Development Bank (AfDB), the United States has made a clear symbolic move against the re-election of Akinwumi Adesina as the Bank’s Chief Executive.

Adesina is running for a re-election in which he is his own opponent. Many believe he has done a good job, especially in the energy sector, but being a lone candidate isn’t a surefire guarantee he will return.

The poll was moved by the administrators from May to August 2020.

Elections to the Presidency of the continent’s top development bank is often fraught.

It is instructive that it is in this election year that a group of “worried employees” came up with a list of grievances to the Office of Integrity and the Fight against Corruption (PIAC) as well as the Chairmen of the Ethics Committee and Audit Finance Committee, alleging that Mr. Adesina has violated the code of ethics, citing a number of questionable contracts and dubious appointments on Adesina’s watch.  The Ethics Committee investigated the allegations and declared that “the President is totally exonerated of all allegations”.

That clean bill should ordinarily provide the wind behind his sail.

But in a letter sent on May 22 to Kaba Nialé, the Ivorian Minister of Planning and Development and the president of the board of governors of the AfDB, Steven Mnuchin, the American secretary of the Treasury, says that the United States “urges the initiation of a full investigation into these allegations by using the services of an independent external investigator”.

To continue on the job, Adesina must win a double majority of African and non-African shareholders in a maximum of five rounds.

As of February 2020, Adesina had obtained the unanimous support of the Executive Council of the African Union, composed of 55 foreign ministers.

On the strength of his personal charisma, he was coasting to victory.

But there has to be other ways to stop him, the Trump administration, in its tendency for bringing down talented Africans at the helm of supranational institutions, thinks.

The whistleblowers who reported him to the ethics committee, had been suspected, all along, to have been instigated by the United States. As they were laying down the accusations, they were charging the ethics committee of an inability to be neutral.

And you could read, from Mr. Mnuchin’s letter, that these allegations are the US’ ammunition to stop Adesina from getting a re-election.

“Given the scope, gravity and detail of the allegations against the sole candidate for leadership of the bank for the next five years, we believe that further investigation is necessary to ensure that it has broad support, trust and a clear shareholder mandate,” Mnuchin writes.


Kenya To Restart Distributing Small LPG Cylinders to Poor Households

$28Million project had been stalled by a court case for two years.

After a two-year court case, in which it was accused of distributing substandard cylinders, the National Oil Corporation of Kenya (NOCK) will start the distribution of the six-kilogramme (6kg) Gas Yetu cylinders to poor households in the country.

East Africa’s largest economy wants to wean its poorest people from the use of dirty wood fuel. A total of 109,649 six-kilogramme cylinders, 329,422 burners and 329,260 grills have been lying in the corporation’s warehouses since the distribution was discontinued on court orders in 2018.

The government had allocated $28Million for purchase of the cylinders to be sold at a subsidised $19 rate with complete accessories under the Gas Yetu brand. It’s a steep discount from the market price of $47 for the 6kg gas cylinder with cooking accessories.

The operation was disrupted by the discovery that fraudulent contractors supplied 67,251 faulty gas cylinders. The discovery indicated that 40% of the cylinders supplied to NOCK were sub-standard, including having faulty valves that posed the danger of fire eruptions.

The court case, instituted by the Consumer Federation of Kenya (COFEK) was dropped after certain conditions were met including bringing on board the third party cylinder inspector. “The exercise by a third party cylinder inspector to independently test the cylinders and confirm the integrity and safety of the same ahead of distribution to Mwananchi starts on Monday, May 25, 2020,” Leparan Gideon Morintat told, NOCK’s chief executive officer told the Energy Committee of the Senate, the upper house of Kenya’s bicameral legislature.

 


BP’s Top Man in North Africa Retires

Hesham Mekawi has decided to retire. The Egyptian engineer, who is BP’s Regional President for North Africa, is leaving after a career with the European oil giant spanning over 30 years.

Mekawi will leave at the end of 2020 to pursue non-executive director opportunities. He will continue in his current role until 1 July 2020 and will then spend 6 months as a senior advisor to ensure the smooth transition of leadership.

Hesham joined BP in 1990 and, in the early stages of his career, held a variety of commercial, economic analysis and business development roles in Cairo, Houston, Chicago and London. He led the consolidation of BP Egypt, BP Algeria and BP Libya to create the expanded BP North Africa Region in 2014. Hesham transformed the North Africa business by identifying and progressing complex growth opportunities and actively managing the portfolio.

Over the past 5 years, BP has invested $14Billion in Egypt delivering at its peak 60% of Egypt’s annual gas production together with its partners. Hesham has been recognized many times over the years, both internally and externally. Of particular note is that he and his team were awarded BP’s Helios award for “BP at its best”, in 2011.

Bernard Looney, BP CEO, commented that “Over the years BP has counted on Hesham’s vision and leadership to maintain and grow our business in North Africa. Hesham has always shown outstanding performance and progressive leadership supported by longstanding relationships with key stakeholders and business partners. His deep commitment to the development of people has served as an example to us all. Hesham has been instrumental in delivering on our plans over many years – regardless of the circumstances. We will miss him.”

 


Deadline for PIB is Challenged; First Drafts Unlikely in Cabinet Before Mid-June

There’s a chance that the first drafts of Nigeria’s Petroleum legislation will reach the Federal Executive Council (the country’s cabinet) by mid- June 2020, not before.

A three-month delay in producing the documents has pushed the envelope in getting this most crucial assignment delivered by the end of the year.

After they are approved by the 42-man FEC, the drafts will proceed to the National Assembly for deliberations that will shape them into acts of parliament, for the President to sign. It is unlikely that the bills: the Petroleum Industry Administratve Bill (PIAB), and the Petroleum Industry Fiscal Bill (PIFB), will get a first hearing at the bicameral house until July.

The original plan was that the Executive arm of government, coordinated by the state hydrocarbon company NNPC, would have pieced together the draft documents as early as late February or early March. But as the work dragged on, “it got truncated by the COVID -19 lockdown”, in the words of people who are familiar with the process, and only got significant traction in the last three weeks.

Considering the COVID-19 challenge, it’s not clear whether there will be public hearings at the Senate and the House of Representatives, as they work on the bills from late in the second half of the year.

But even if there are not, there has to be some time for inviting and accepting memoranda.

A comprehensive petroleum reform legislation, widely known as Petroleum Industry Bill (PIB), has been showing up on the legislative agenda of the Nigerian National Assembly since 2008. In terms of construction, the document from which the first iteration of the legislation was generated was produced in 2000, in the form of a report and policy document issued by the Oil and Gas Implementation Committee (“OGIC”) established by (then) President Olusegun Obasanjo. That report, approved by the Yaradua government, resulted in the Petroleum Industry Bill 2008 being forwarded to the 6th National Assembly.

“The PIB has been a long time coming and we think that when it comes out later this year, it will come out with a lot of sweetness”, Timipre Sylva, Minister of State for Petroleum Resources, said on the sidelines of the OPEC meeting on March 5, 2020. “We are very mindful of the fact that it’s a very competitive environment right now and we are taking that on board in the new law”.

But does this three-month (probably more) delay mean that the reform law is unlikely to become reality in 2020?

Some of the people close to the process are optimistic.

“With the Presidency now apparently convinced”, says a consultant who has been part of the executive-legislature interface in the last 12 years, “these bills can be passed in three months. Remember the DOIB (Deep Offshore and Inland Basins) review took only 26 days from start to finish”.

There is a lot riding on this law. Nigeria is expecting a rise in investor interest in the energy market once the law goes through. Sylva said: “We are expecting that everybody will be interested because Nigeria is not just a brownfield, it has a lot of greenfield opportunities,” he said. “We believe the investment world will be quite pleased when we do come out with the bid round.” The PIB will provide a more stable investment framework in the sector. “Things have remained quite stagnant and that’s why we believe that with this bill it will bring a lot of certainty to the investment framework and people will get interested and come,” he said.


Nigerian Government Takes Ownership of Ororo-1 Fire

The state is paying for extinguishing the flames and has ordered the drill a relief well

Nigeria’s Department of Petroleum Resources (DPR) says it had novated the contract to the Drilling Contractor working on the re-entry of Ororo-1, a full month before the fire erupted on the rig on May 15, 2020.

The novation was made at the time of revocation order on the award of the Ororo marginal field on April 6, 2020.

Effectively, the Nigerian government is paying the contractor, bearing the cost of extinguishing the rampaging fire and in this particular instance, it has ordered that if need be, a relief well should  be drilled.

A relief well, targeted at above or at the producing problem formation, is one of the most efficient ways to control a blowout.

Sarki Auwalu, director of DPR, specifically instructed that the contractor engage Boots & Coots Services, a Halliburton owned firm of well control specialists, to put out the fire.

Grace-1 HWU, a Hydraulic workover rig reportedly owned by Joeny Holdings, was contracted for the job of re-entry and completion by the Nigerian minnow Guarantee Petroleum.

The operations on Ororo-1, a highly pressured well located in Oil Mining Lease (OML) 95, in shallow water offshore Western Niger Delta, experienced a sudden rush of hydrocarbon fluids speeding up from over pressured reservoirs at depths deeper than 8,500 feet to the surface and forcing a blowout. The Blow Out Preventer (BOP) for the main well bore and the BOP for the annulus (the space between the pipe and the skin of the well), both failed. The reservoir pressure was 8,000 pounds per square inch (psi) and above, surface pressure was about 4,600psi as of the time of incident, according to field data.

The regulatory agency dismisses the claims of Guarantee Petroleum, that it engaged with DPR personnel before it took a Hydraulic workover rig to the conduct a re-entry and completion of a highly pressured well.

“If the rig was there, our people must know. You cannot mobilize any rig without informing the DPR Zonal office. You cannot even spud the well or start to drill without informing the DPR Zonal Office. You cannot have a workover without having your oil spill contingency activation documents with DPR so that in case anything happens, we will activate it. They all don’t have that”.

Novation is the process by which the original contract is extinguished and replaced with another, under which a third party takes up rights and obligations duplicating those of one of the parties to the original contract.

The DPR says it did not see the need to consult with either Guarantee Petroleum or its partner Owena Oil & Gas over the novation, as technically, they were no longer rightsholders to the well.

The Ororo field was awarded to both parties as a marginal field in 2003. The government revoked the award because the grantees had “failed to develop the field and bring it to full production before the expiration of the granted extension period which elapsed on April 30, 2019”, says the revocation letter.

Guarantee Petroleum has claimed that the rig was moved to site in October 2019 with the permission of the DPR  and that the revocation order, made with immediate effect right in the middle of a well re-entry process, encouraged a sense of pandemonium which resulted in the fire incident on the Grace-1 HWU.

“Service providers became jittery when the announcement came”, the company lamented to Africa Oil+Gas Report.

The DPR disagrees. It contends that when it was conducting due diligence to determine the revocation, in March, the rig had not been moved to site. “By the time we implemented the revocation, the rig was onsite. And when that rig was onsite, we realized that technically that rig, and just to tell you that if they engaged us, we have to access the rig, the BOP and all that but they didn’t do that”, the agency says. “We know that that rig could not do what they wanted to do because of the history of that place”.

The DPR says that extant technical information on the well indicates that the hydraulic workover rig could not perform the service it was called up to do. “That was why they refused to contact DPR because they know that we would say no to that. We cannot allow that and so they refused to inform us. They are ware that revocation or no revocation, if they go with that rig, there is a potential that the well would collapse. There is that potential”.

In a letter it purportedly wrote to DPR on May 15, Guarantee Petroleum sought the regulator’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”. Such a letter would suggest that Guarantee Petroleum was sure it was still in charge of operations.

The Regulatory agency denies receiving any such correspondence. “We have only two ways of receiving correspondences in DPR. It is either you bring it physically which we would stamp and give you a received copy, or you send it through DRP@DPR.GOV.NG which also carries date and time. And as soon as you email it through dpr@drp.gov.ng do you know what will happen? it will enter into our ERP and it will capture the subject and we will see it immediately”.

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‘Government Licence Revocation to Blame for Rig Fire Incident’, Company Laments

By Toyin Akinosho, Publisher

The Nigerian minnow, Guarantee Petroleum, has argued that the revocation order, sent to the company in early April 2020, right in the middle of a well re-entry process, encouraged a sense of pandemonium which resulted in the fire incident on the Grace-1 HWU, the hydraulic workover rig that was performing re-entry operations on Ororo field, in shallow water Oil Mining Lease (OML) 95.

“Service providers became jittery when the announcement came”, Tunde Giwa, the company’s Managing Director, lamented to Africa Oil+Gas Report.

“We had almost finalised operations”, Giwa explained, “We were at the bottom of the well (circa 10,000feet) we had opened four hydrocarbon zones, and taken all the plugs out. Baker Hughes was on site to put the tubings, (and complete the well). That was when the problem started. The service providers who could have intervened in the various well pressure amelioration work, were refusing to do their job”.

Nigerian regulatory authorities were well aware that there was an operation going on, there were safety issues involved and yet they revoked the licence of the operator with immediate effect.

The well re-entry commenced in October 2019 and officials of the Department of Petroleum Resources (DPR) were aware of the work, which they sanctioned, according to documents sighted by Africa Oil+Gas Report. Well control challenges started in April and when the revocation order came, “the service companies started reducing their work scope”. Giwa claims that as of Sunday, May 17, 2020, the DPR had not responded to letters and email messages on the fire incident.

Asked why the company had deployed a hydraulic workover rig to re-enter and work over a well that had prior record of overpesssured zones, Giwa said that the issue was not the rig competency. “The Blowout Preventer (BOP) stack and drilling mud pumps (designed to circulate drilling fluid under high pressure) were the same as a regular rig”.

Guarantee Petroleum, with its partner, Owena Oil, won the Ororo field in the 2002/2003 Marginal field round.

DPR is right to be concerned that the two companies had sat” on the licence for 17 years without applying a sense of urgency to bring the asset to production.

It is in the DPR’s remit to revoke the licence.

But it is wrong for officials, themselves geoscientists and engineers, to approve technical operations of this nature and financial magnitude (in excess of $20Million), with a high safety quotient, and revoke the licence right in the middle of the operations.


TOTAL Won’t Go into Ghana’s Upstream Yet

French major TOTAL has taken the decision not to proceed with consummating the purchase of Occidental Petroleum’s stakes in Ghana.

Occidental had acquired Anadarko in early 2019 and subsequently entered into a Purchase and Sale Agreement (PSA) in order for TOTAL to acquire Anadarko’s assets in Africa. Under this agreement, TOTAL and Occidental have since completed the sale and purchase of the Mozambique and South Africa assets.

The PSA provided that the sale of the Ghana assets was conditional upon the completion of the Algeria assets’ sale. Occidental has informed TOTAL that, as part of an understanding with the Algerian authorities on the transfer of Anadarko’s interests to Occidental, Occidental would not be in a position to sell its interests in Algeria.

“Given the extraordinary market environment and the lack of visibility that the Group faces, and in light of the non-operated nature of the interests of Anadarko in Ghana”, says a company press release, “TOTAL has decided not to pursue the completion of the purchase of the Ghana assets and, as a consequence, to preserve the Group’s financial flexibility”.

 


Hydraulic Workover Rig Catches Fire on Ororo Well

By Toyin Akinosho

A Hydraulic workover rig Grace-1 HWU, working for the Nigerian independent Guarantee Petroleum, burst into flames over the weekend in the course of re-entry operations on the Ororo-1 well in shallow water Oil Mining Lease (OML) 95.

The incident was the culmination of a well control situation that had been shaping up since mid -April.

Field data indicate that, in late April, technicians had put the well under control after it had released fluid to surface through malfunctioned Blow Out Preventer (BOP) on the rig, owned by Joeny Holdings Limited. “Well is stable and gas leak at the same level as at when BOP was closed-in.  No increase in gas flow”, the report indicated as of April 22, 2020.

But by May 15, the wellhead had caught fire.

“All the personnel had been successfully evacuated off the 300 Series SEWOP (Self Elevating Work-Over Platform)”, reported Guarantee Petroleum, operator of the Ororo field. But the Platform itself had not been moved from the site.

The company had written the Department of Petroleum Resources (DPR), the industry regulatory agency, since April 23rd, requesting for approval to carry out the needed containment of the flow of gas and fluid droplets from the wellhead. Guarantee claims that the regulator did not dignify it with a response.

DPR spokespersons dd not have any comments on the matter.

Guarantee’s licence to Ororo field had been revoked by the Nigerian government, through the DPR, on April 7, 2020, but the company was deep in the middle of the re-entry operations when the letter came.

DPR’s refusal to respond, in the last month, to Guarantee Petroleum’s correspondences, may have to do with the regulator’s consideration that the company no longer had a right to the field. But that itself throws up a question: How can you revoke a licence right in the middle of operations you have yourself approved? See related story.

On May 15, after the fire incident started, Guarantee Petroleum sought DPR’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”.

It also said it contacted Chevron Nigeria and Halliburton (the American oil service provider) for help. Chevron, an E&P major, is the operator of OML 95, the acreage from which Ororo field was ringfenced.

Esimaje Brikinn, Chevron’s General Manager, Public Affairs  explained to Africa Oil+Gas Report that  “the affected facility is a third-party facility and it is not operated by Chevron Nigeria Limited (CNL) or any of its affiliates”. He added that the company was “prepared to provide necessary emergency response assistance in accordance with petroleum industry emergency response protocol, to help address the situation, if required. CNL remains committed to safety of the people and the environment. CNL will continue working with relevant regulatory agencies and other stakeholders on protection of the environment”.

Grace-1 HWU had been on the well since October 2019.

 

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