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In Egypt, BP Digs in, Grabbing More Asset in the Mediterranean

The British major bp is not about to exit Africa, as the speculations suggest. It is leaving Libya, winding down in Angola, but increasing positions in Egypt.
The company has announced it has just been awarded two exploration blocks in the Mediterranean Sea, offshore Egypt by the Egyptian Natural Gas Holding Company.

“The Northwest Abu Qir Offshore Area – in which bp, the operator, holds 82.75% and Wintershall-Dea holds 17.25% – is located west of the recently awarded North King Mariout block (bp 100%) and north of the Raven field”, bp says in the announcement. “It covers an area of approximately 1038 square kilometres with water depths ranging between 600 metres and 1600 metres.

“The Bellatrix-Seti East block – in which bp and Eni, the operator, each hold a 50% share – is located west of the Atoll field and North Tabya blocks. It covers an area of approximately 3440 square kilometres with water depths ranging between 100 metres and 1200 metres”.

Prior to these awards, bp had earlier, in 2022, been awarded three acreages: King Mariout Offshore Area (100% bp), North El Fayrouz offshore area (50% bp and 50% ENI, the operator) and the North El Tabya area extension (100% bp).


The Facts, The Figures: Why NNPC’s Divestment is the Place to Go

By the Editorial Board of Africa Oil+Gas Report

For close to 50 years, the company formerly known as Nigeria National Petroleum Corporation (NNPC) has functioned essentially in two key areas of the petroleum industry.

The first is upstream crude oil and natural gas operations.

The second comprises services, midstream, and downstream activity.

A close examination of the performance of this state-owned entity, in these sectors, in those decades, provides us a handy guide to determine the merit of the recent calls for its outright privatization.

In the 49 years since Nigeria inaugurated the Joint Venture scheme between NNPC and multinational companies, six (6) international majors, have effectively produced all of Nigeria’s crude oil and gas output.

These multinationals have been self-regulating, with high standards of efficiency, governance, and application of technology, that, in spite of NNPC, they planned and executed programmes for national production, which grew to a peak of 2.531Barrels per day (crude oil and condensate) in 2010, according to the BP Review of Statistics, an industry bible of production data. It was easy for NNPC, the 57% (average) equity holder of the JVs, to take credit for these numbers.

Now the multinationals have, since 2012, been steadily implementing a withdrawal and are being replaced by Nigerian independents who do not have the same standards, efficiency, governance, and application of technology.

In the same hydrocarbon patch in which these six multinationals could collectively produce 2.5Million Barrels per day, there are now over 30 producing companies, “superintended” by NNPC, collectively struggling to deliver 1.3Million Barrels per day (crude oil and condensates), with heavy sweating. It’s not a challenge of geology, we aver, but above-surface issues.

Throughout what is now known as the golden era of Nigerian crude production, NNPC’s main contribution has been the long, dispiriting stretch of contracting cycles and delayed cash call payments.

Now the NNPC has grown larger in terms of asset footprint, with more acreages handed to them in those last 10 years; the same decade in which the multinationals have retreated and Nigerian production has shriveled.

Eighty-eight percent (88%) of the fiscal contribution of oil and gas to the Nigerian treasury comes from rent: taxes and royalties and only 12% come from revenues accruing to NNPC from its equity in the Joint Ventures as well as share in Petroleum Sharing Contracts. NNPC’s whopping 57% of the main oil and gas producing projects translates to only 12% of the total contributions of oil and gas to the treasury. What this means in simple terms is this. If we assume that Nigeria is producing 2.5 Million barrels per day today, then NNPC’s entitlement will be 1.425Million barrels per day. This volume is what is the Federation volume. It is the one whose proceeds are always consistently underperforming. It is the one that Ahmed El Rufai, governor of the Nigerian northwestern state of Kaduna, alleges, never reaches the Federation account. It is this NNPC equity entitlement, that we aver, contributes just 12% of the total contributions of oil and gas to the treasury, at the best of times.

The bulk of contribution to the National Treasury from oil and gas comes from the petroleum profit tax (now hydrocarbon tax) and royalties that are paid by Shell, Chevron, TOTAL, ExxonMobil, ENI, Seplat, NDEP, NDWestern, AITEO, Newcross, Amni, Elcrest, First Hydrocarbon Nigeria, Midwestern, Lekoil, First E&P, Conoil, Green Energy, Energia, Waltersmith, Platform, Britannia U, Savannah Energy, Sahara Energy, Oando, Shoreline, Neconde, Heirs Holdings, Oriental Resources, Eroton, NNPC itself and several others.

And there is another point we have to make here. It is its “senior” position in the JVs and its management of the PSCs that has provided NNPC the opportunity to wreak so much havoc (Poor cash call remittances, long contracting cycles, bullying service companies into partnerships with NNPC owned service companies and then insisting the contracts for oilfield service be awarded to those partnerships).

If NNPC was holding a zero percent interest in these JVs, the national purse will feel a more positive impact.

This is why the Africa Oil+Gas Report has always made the argument for the reduction of NNPC equity in the JVs.

The clearest example of the need for NNPC to be less than a 50% shareholder in Nigeria’s oil and gas projects is the Nigeria Liquefied Natural Gas (NLNG) Ltd. Its an incorporated joint venture of NNPC with three European majors (UK’s Shell, France’s TOTAL and Italy’s ENI) in which NNPC has 49% equity. That less than 50% NNPC equity allows these companies a breather to run one of the most profitable hydrocarbon operations (no cash call (payables) issues, no approval challenges for projects, no bullying), with billions of dollars guaranteed as dividends meant for the National Treasury.

Apart from JVs and Production Sharing Agreements in oil and gas production, the NNPC has an extensive network of subsidiaries, some of them service companies, some of them midstream companies, some are in transportation and some are in marketing.

The NNPC runs refineries. It has depots and pipelines for petroleum product storage and distribution.

It has a seismic acquisition and seismic data processing subsidiary chrsitened Integrated Data Services Limited (IDSL); it has an engineering company named NETCO. It has a crude oil marketing division for marketing the Federation crude.

The refineries have not performed above 25% of their capacity since 1997, which is 25 years ago. NNPC’s bungling of its mandate to refine-the Nigerian- crude is one of the most brazen acts of de-industrialisation of the Nigerian economy by any state-owned enterprise.

NNPC, the one-time corporation, now a Limited Liability Company, had three petrochemical plants, each in Warri, Port Harcourt, and Kaduna. The one in Port Harcourt was built as a stand-alone from the refinery. The Warri and Kaduna Petrochemical plants are located inside the refineries.

Nigeria took the bold step to privatize the Port Harcourt Petrochemical plant, named Eleme Petrochemicals. It has been so successful that the 10% equity of it that is owned by the Rivers State Government is probably the state’s largest investment.

The petrochemical plants that remain in NNPC’s control are shabby; they have not sold a bag of petrochemicals for 30 years.

Let us go to crude oil marketing.

Every large oil producer, even lowly Angola, sells its crude oil directly on its own through its state hydrocarbon company.

NNPC is the only such state company that does not market its crude.  It has to allocate to companies who line up every year waiting for an arbitrage opportunity. Nigeria is the only place where you have to allocate crude oil to middlemen to sell.

Even Duke Oil, the NNPC’s crude marketing subsidiary, doesn’t sell directly. It markets through other entities.

The data acquisition and processing company, IDSL and the engineering firm, NETCO, each forms partnership with the competition. By using the weight of the NNPC, they get the contracts that oil companies would have awarded directly to their competition and hand over the work to the competition to do. IDSL, on its own, does not process a single kilometre of seismic data.

NPDC has been delinquent in paying taxes and royalties on most of the assets in which it is 55% or 60% joint venture partner to private producing companies. Most of these assets were assigned to them by NNPC: NNPC novated its equity in several joint ventures to NPDC, but the latter has never paid the equivalent market price for those assets.

NNPC’s Petroleum distribution is probably the most inefficient of all its operations. The petroleum product pipeline system is supposed to ensure the minimal presence of tankers on Nigerian roads. The failure of that system is the reason for some of the most fatal traffic accidents across the breadth of the country.

If NNPC is scrapped today, what will the Federation account lose?

But that’s already a stretch of the argument.

This editorial is part of the Public Service contribution of the Africa Oil+Gas Report.


Zimbabwe Wildcat: Working Petroleum System Doesn’t Mean a Discovery

By John Mokwena, in Johannesburg

Australian minnow Invictus Energy has reported “fluorescence and elevated gas shows of up to 65 times above background levels” in the Upper Angwa sequence, a primary target in the Mukuyu-1 well in Zimbabwe’s Cabora Bassa Basin.

The company also reports “elevated gas shows and resistivity in shallower Pebbly Arkose formation” and has so declared that there’s a “working conventional hydrocarbon system” in the frontier Cabora Bassa Basin.

The company hasn’t declared a commercial discovery, as these mudlog interpretations are not ever any geoscientist’s basis for calling a discovery.

Invictus is going ahead to drill to a planned total depth of 3,500 metres Measured Depth.

The Mukuyu-1 well is being drilled in Invictus Energy’s 80% owned SG 4571 license.

Scott Macmillan, the company’s Managing Director, says that while “the presence of elevated mud gas readings, fluorescence in the cuttings, elevated LWD resistivity and increasing background gas with depth is a positive sign as we progress through the Upper Angwa Alternations Member”, the company still has several hundred metres of drilling “through our primary targets with additional potential, which will be followed by a comprehensive wireline logging programme to evaluate results, with the aim of confirming the presence of moveable hydrocarbons in multiple zones.”

So far, the 8½” hole section of the well has been drilled to a depth of 3,086 metres Measured Depth. Elevated mud gas peaks (up to 65 times above the background gas baseline) have been observed while drilling through a depth of 3,070 mMD with marked increases from C1 to C5 compounds (methane, ethane, propane, butanes, and pentanes).


Yes, Seplat Doesn’t Own the Amukpe-Escravos Pipeline, So Who Does?

The Amukpe-Escravos crude oil evacuation pipeline (AEP) has started to work after 14 years of construction.

And the question of its ownership stubbornly lingers.

Staff and management of Pan Ocean, a Nigerian independent E&P company, are often irked by media reports which suggest that Seplat Energy controls the 20 inch, 67km facility.

Seplat Energy’s spokespersons reinforce those misgivings with press statements like: “The commercial launch of the Amukpe-Escravos Pipeline is a significant event for Seplat Energy and for Nigeria”.

But “at no time did Seplat Energy, nor Seplat Energy/NPDC JV, say that they owned the Amukpe Escravos Pipeline”, Seplat officials argue.

So, what’s the story?

The pipeline was part of the assets in the Oil Mining Lease (OML) 98 Joint Venture between Pan Ocean, and NNPC, the state hydrocarbon company

Pan Ocean had 40% and NNPC had 60%, which means the construction was being carried out with funding by the two parties.

Government revoked Pan Ocean’s licence in OML 98, which was effectively the 40% equity. It then handed that 40% equity to NPDC, the operating subsidiary of the NNPC.

NNPC itself novated its 60% share in the JV to NPDC, making NPDC the 100% holder of OML 98.

But Pan Ocean went to President Buhari and pleaded that it had invested so much on the pipeline as well as the gas facility in the acreage. The president granted its prayers, so the company kept its 40% in the pipeline and the gas facility. As the company is so much heavily indebted to banks on these two projects, they were transferred to AMCON, the government owned debt buyer, to sell to would be buyers.

Now, before the revocation of Pan Ocean’s 40% interest in OML 98, the Seplat/NPDC joint venture had approached Pan Ocean to allow the latter to support the funding of the Amukpe-Escravos pipeline, so that, on completion, the Seplat/NPDC crude could be pumped through the line and the tariff that would be earned by the Pan Ocean/NNPC JV would be part of the repayment of the funding support. The Seplat/NPDC JV has spent over $90Million in support of completing the line.

This piece had been earlier published in the July 2022 edition of the Africa Oil+Gas Report

 


‘My Pipeline is Safer than Yours’: Why NLNG Has No Worries About Vandalism-OPINION

By Ifeanyi Igwebike Mbanefo

The Nigeria Liquefied Natural Gas (NLNG) Limited found a solution to pipeline vandalism long before the problem assumed epidemic proportions.

My career with the company offers a testimony.

I joined (NLNG) Limited in 1998 as Senior Public Relations and Community Relations Officer. At the time, the company was constructing its first production units — trains one and two. It currently has six trains and constructing the seventh.

It was my job to negotiate (on the ground) the right of way from Obrikom to Bonny, to enable TSKJ lay the pipelines.

The government had acquired the right of way on the map, had signed all the papers and had done all the handshakes in Lagos and Abuja.

But there had to be people on the ground to negotiate with the communities. I was one of them.

It was a 217 kilometre pipeline traversing all the kingdoms in Rivers State — Bonny, Kalabari, Ogba, Ikwerre, Abua, Ekpeye. The line did not pass through Ogoniland because of the agitations of the Movement for the Survival of the Ogoni People (MOSOP).

“We made it surveillance and grass cutting contracts awarded to land owners. We did this on two simple logics: they are the owners of the land and know best how to protect it, otherwise it would not have remained in their ancestry since God knows when and as owners they, more than any other parties”

My colleagues and I were responsible for payment of compensation to landowners. These were monies to compensate for cash crops felled along the way. It was a difficult job in every sense of the word.

In that role, I regularly appeared before magistrates in Ahoada and other courts in Rivers State to defend the company from aggrieved villagers. My heart was with villagers because most of they got only ₦5,000, ₦10, 000, ₦20, 000 or ₦30, 000 at most for their cash crops, the result of an enumeration from the consultants. Some desperados manufactured shrines over night to claim payments for their gods.

The Nigerian Land Use Decree of 1978 was a brutal law. It took their ancestral land free of charge. And only paid for cash or economic trees. Observing/supervising and on some cases, enforcing (with Mopol & military) this law left a wound on my conscience and those of some of my colleagues. I watched helplessly as the villagers were being economically raped but helpless in the face of an all-mighty federal government.

Finima Community on Bonny Island is without doubt the most abused community in Nigeria. It is the host of NLNG which acquired, via (the state hydrocarbon company) NNPC 525.63 hectares of land, bulldozed and relocated the community from their ancestral land to new Finima town. Finima is host to a tank farm belonging to Shell Petroleum Development Company, a facility adjudged the biggest in Africa at some point during my service. Bonny camp in Lagos was the take off point for Nigerian soldiers who defended that facility and prevented it from falling into the hands of Biafra (in the course of the Nigeran Civil War, 1967-1970). Finima also hosts some ExxonMobil facilities. All these economic jewels sitting on thousands of hectares in Finima; landed property acquired on the cheap.

It is most disheartening that a community where Nigeria exports and realizes over 70 percent of its revenue is still a ghetto. A squalor! I am happy that I threw a punch in defence of the communities when I eventually became the community relations manager.

“Since land makes up part of Nigeria’s 49% shares in NLNG, I often wondered if Finima could not be said to be entitled to some of these shares. But then I don’t have a right of audience, as lawyers would say.”

In 1987, NNPC approached the Chief of Brown House of Finima on Bonny Island, Chief Israel Idamiebi Brown and opened a discussion concerning the acquisition of land for the construction of NLNG. An agreement was reached and documented in a letter of 3rd March 1978 by Mr. A. M. Akpe a manager in NNPC. It included:

  1. That all parcels of land to be acquired from Finima community for the project will be compensated for at reasonable commercial rates.
  2. NNPC will design and construct bungalows/houses for displaced families and residents

However, on 29th of March 1978, (26 days after the agreement) the Federal Government promulgated the Land Used Decree. A law is superior to contractual agreements. Without explaining to the community their intentions to abandon the agreement, the government and NNPC acquired community land. Cmdr. Suleiman Sa’idu, then military administrator of Rivers State in a gazette on November 22, 1979, revoked all rights of occupancy existing in respect of Finima land. And NNPC applied and obtained a certificate of occupancy from Rivers State for the parcel of land measuring 596.5 hectares of land in Finima of which it set aside 525.63 hectares exclusively for NLNG. That title was later perfected by Gov. Rufus Ada George on April 1993.

Since land makes up part of Nigeria’s 49% shares in NLNG, I often wondered if Finima could not be said to be entitled to some of these shares. But then I don’t have a right of audience, as lawyers would say.

To build NLNG, 350 families in Finima were displaced and relocated to new Finima town. Of this number 70 families were not provided with any houses. And most others, inadequately housed. One of the things I am most proud of was building 70 houses for these families in 2016, about 46 years after, when I became community relations manager of NLNG. I also paid compensation to those inadequately housed at an agreed rate of N2Million per room. For these I was declared a persona non grata by the Amanyanabo and Bonny Chiefs Council for making direct payments to the victims. They wanted control of the monies. Hear! Hear!!

Returning to the matter on hand, before NLNG began operations in 1999, my colleagues and I, tapping from our experiences from pipeline construction, restructured NLNG pipeline surveillance and protection contracts. It is normal and still the routine in the oil industry (The Tomopolo pipeline protection contract rocking the NNPC is an example) to award such contracts to big shots in Abuja and other places who use the police to carry out these duties.

In case of NLNG, we made it surveillance and grass cutting contracts awarded to land owners. We did this on two simple logics: they are the owners of the land and know best how to protect it, otherwise it would not have remained in their ancestry since God knows when and as owners they, more than any other parties, were entitled to revenue from it.

The contract guaranteed them of income over the lifespan of the project and pipeline. This simple move proved very radical. Security big hats in police, SSS, and military advised against it. It cut them out. Politicians and community leaders kicked against it. They said they were in charge of security in their villages and should naturally be the contract holders. We stood our ground, despite the intimidation, harassment and sometimes physical assaults.

In the event, there was not a single case of vandalism on NLNG pipeline for over 16 years, except for inside the swamps, bogs and marshes — no man land. And those were reported promptly by land owners who survey the pipelines in canoes daily. No land owner would permit any militant to vandalize a pipeline under his care, because the contract prescribes no payment for any landlord that any portion of pipeline under his care is vandalized. NLNG till date has little or no worries regarding its pipelines whilst NNPC, Shell, Agip, etc sometimes record up to 5,000 breakages. Showing empathy for the voiceless goes a long way! That, I dare say, is the answer to oil theft. Which I consider the work of karma.

Apologies the diversions and detours in this piece. Apologies also for too much background. I wanted to put the matter in perspective. Enough said.

Ifeanyi Igwebike Mbanefo, President and Chief Executive Officer of Champions Court Limited was until recently, Manager Corporate Business Logistics, Nigeria LNG Limited.


THE FLOODING MENACE: WHEN WE IGNORE THE ROOT CAUSES

By Austin Avuru

The flooding menace in Nigeria has now become an annual ritual. In September/October each year, whole towns, villages and communities are completely submerged in water. Deaths occur, valuables are lost, and farmlands are devastated while hundreds of thousands of persons are displaced.

Then the usual drama … Government officials, politicians and sundry attention seekers queue up to display our deep sense of “compassion and philanthropy” by trooping to the various IDP Camps to donate toilet rolls, foodstuff, mattresses etc etc. By mid-November, the flood waters would have receded, the victims count their losses and everyone returns to business as usual. We do nothing and remember nothing until the next twelve months when we repeat the annual ritual.

But why does this disaster befall us every year? Some people have suggested climate change. I checked and the rainfall index in Nigeria, which stands at about 1295 has remained unchanged since 2001. So our rainfall intensity and pattern have been largely predictable over the last twenty years. So, what is the nature of this problem that has defied solution?

All the communities that have been most badly affected by this menace have one thing in common. They are all situated along the banks of the Rivers Benue and Niger and tributaries of the Niger River.

The ease and ferocity with which these rivers overflow their banks and flood adjacent habitats call to question the real root causes of the perennial menace. While driving on the bridges across River Benue in Makurdi, or River Niger in Onitsha or Patani during the dry season, a quick look would show that the rivers are so silted up that you can practically walk across the river at some portions. What this means is that these rivers and their tributaries, which are supposed to be critical drainage channels now have near-zero carrying capacity. Any incidents of heavy, sustained rainfall, or release of water from any of the upstream dams would have all the water simply overflowing the banks, resulting in massive flooding of adjacent communities. Again, because of the near-zero carrying capacity of these rivers, the flood waters would take days/weeks to gradually recede.

The Nile River, 6650km long and passing through nine African Countries, has remained navigable all year round since biblical times. It is 26 to 36 feet deep with busy traffic of Cargo and Cruise ships. Infact, cruises are a major tourist attraction on the Nile and in Egypt. A four-day cruise along the Nile can cost as much as $500 per person. Large tonnages of Cargo … agricultural produce, timber and manufactured goods are moved through the Nile River every year. So, while others have turned their rivers into a major nexus of economic activity, from drainage to tourism to transportation, we have turned ours into a killing field for our hapless citizens and a source of economic devastation to our country.

Dredging, the River Benue to Lokoja and the River Niger from Baro in Niger State to the Atlantic Ocean, to a minimum draught of 10 feet will transform both rivers to the same economic value as the Nile is to Egypt. From Baro to Onitsha by speed boat would be 90 minutes instead of nine hours. Imagine ferrying tons of yam and other farm produce from Makurdi to Onistha on a self propelled badge in three hours! Most importantly, these rivers and their tributaries would constitute the critical drainage channels to ensure that adjoining towns and villages remain safe while reaping the benefits of the fertile banks of these rivers.

So, why are we unable to do the simple things that other Countries of even smaller size do, as a matter routine? Are we just wicked at heart, too corrupt to care or just incompetent?

In 2008, the Yar Adua administration awarded an N34.8 billion contract to dredge the River Niger from Baro to the Atlantic. The following year, another contract for the rebuilding of the Baro inland Port was awarded to complement other inland ports in Lokoja and Onitsha. The dredging did not happen. In 2011, the Jonathan administration revisited the project, revising the contract sum upwards to N49 Billion. The mantra then was that the River Niger would be navigable all year round from Baro to the Atlantic. But the Federal Ministry of Works and the Inland Waterways Authority would rather fight over the control of sand dredging rights in the Lagos Lagoon than serve this Nation diligently to address key existential problems.

The state governments have not fared any better. Travel to Yenagoa in Bayelsa State or Ashaka/Aboh in Delta State and you realise that dredging and maintaining the River Niger tributaries that criss-cross the low-lying parts of these states to some minimum depth is more important than building roads. These tributaries ought to be the main arteries of well-engineered drainage master plans for these towns and villages. Until this is done, the roads we build in these towns can only wait to be washed away every rainy season.

We must start today to plan the execution of this major inland waterway infrastructure project, both at Federal and State levels. It will take time and discipline to execute, starting from the Atlantic and working our way towards Baro and Makurdi. Maybe I am asking for too much, knowing that we have been working on the East-West Road for forty years and are not done yet! But this is much more than infrastructure for transportation. Lives, whole communities, and food security will all depend on it. Failure to act is an existential threat.

Austin Avuru,fnape

October 20, 2022

aavuru@aaholdingsng.com

 


GEIL Looks Towards Installing Own, Expanded Evacuation Terminal

With gross output expected to reach over 10,000 Barrels of Oil Per Day (BOPD) on hook up of the second of its two well campaign, the Nigerian independent Green Energy International (GEIL) is considering the limitations of its current evacuation infrastructure.

The company’s production leaped from 4,651BOPD in June 2022, through 5,199BOPD in July 2022 to 7,596BOPD in August 2022, largely on account of the tie in of one of the two wells. The output performance has been beyond the company’s expectations.

Five years after first oil from Otakikpo field onshore eastern Nigeria, the operator envisages the possibility of an output higher than 20,000BOPD from what was initially identified as a “marginal field”. The company currently pumps its crude volumes into Amni International’s Ima Floating Storage and Offloading (FSO) Terminal. But until August 2022, output had been less than 6,500BOPD.

“If we do 10,000 Barrels of Oil Per Day (BOPD) now and we want to go to 25,000BOPD, we are going to have a challenge with our evacuation”, says Anthony Adegbulugbe, GEIL’s Chief Executive Officer (CEO). Our present evacuation option will not work. If you want to take off on that scale and you are still depending on a third-party terminal, is that reasonable? Due to no fault of yours, if they close down for just one day, please multiply 25,000 by $50 and you will understand the amount of money that is on the table. We have not closed out any options and we might still build our own terminal. We might still talk with the likes of Notore and so forth. But definitely by the time we are going to 10,000 barrels, we have 140,000 barrels storage onsite now and that is 14 days. If we are now going to 10,000 would 14 days storage be reasonable? If there is some problem on the other side and you keep on producing, in just 14 days you won’t have any storage capacity and those are some of the issues that we are looking at. Every option is on the table and we are still looking for ways to debottleneck our processing facility and a lot of interesting things are going on. Again, this goes back our original philosophy of taking things step by step.


Panoro Takes More Position in Equatorial Guinea

Panoro Energy has agreed to farm-in to the Kosmos Energy-operated exploratory tract-the Block S offshore Equatorial Guinea for a 12% non-operated participating interest.

The Oslo-based minnow already has an interest in a producing asset in the country, operated by Trident Energy.

The current joint venture partnership at Block S is Kosmos Energy (40% and operator), Trident Energy (40%), and GEPetrol (20%). Panoro’s agreed farm-in is on the basis that it will acquire a 6% participating interest from each of Kosmos Energy and Trident Energy, respectively (12% in aggregate).

Block S covers a surface area of 1,245 km2 with water depths ranging from 450 metres to 1,500 metres and is covered by high-quality 3D seismic. The block surrounds the producing Ceiba Field and is adjacent to the producing Okume Complex, which is operated by Trident Energy and where Panoro holds a 14.25%percent non operated participating interest which accounted for 4,714Barrels of Oil Per Day (BOPD) net working interest production for Panoro during the first half of the year, around 60% of Panoro’s total output.

Past exploration activities on Block S have tested and proven the necessary geological play elements which have led to an extensive prospect inventory being identified within tie-back distance to the Ceiba Field and Okume Complex facilities”, Panoro explains in a release. One exploration well is planned to be drilled during 2024.  Panoro’s farm-in is subject to customary approvals.

John Hamilton, CEO of Panoro, says that Block S will significantly expand the company’s acreage position offshore Equatorial Guinea, and our exposure to near field exploration potential. The block is in the immediate vicinity of our producing Ceiba Field and Okume Complex which have to date produced around 465Million barrels of oil, and where we are also partnered with Kosmos Energy, Trident Energy, and GEPetrol

With the new acquisition, Hamilton explains, Panoro will have modest financial exposure to a large inventory of prospects and leads within tie-back distance of existing production facilitiesoffering scope to leverage synergies in the event of a commercial discovery.

Following the recent extension of the Ceiba Field and Okume Complex PSC to end 2040, he says Panoro looks forward to working with our aligned partners and stakeholders to unlock the full potential of our enlarged asset base in Equatorial Guinea.”    


‘OPEC Mandated Output Cuts Are Not About Politics’, African Ministers Insist

African energy ministers have dismissed the misgivings that the OPEC-mandated cut in oil production was a politically motivated move that they were forced to comply with, arguing that the decision was based on technical data and fully supported by all members.

Gabriel Mbaga Obiang Lima, Equatorial Guinea’s Minister of Mines and Hydrocarbons, and Puot Kang Chol, South Sudan’s Minister of Petroleum, both said that the two million barrels per day reduction decided during the Ministerial Meeting in early October 2022 was supported by every member of OPEC+., that is the Organization of Petroleum Exporting Countries (OPEC) and its allies.

“If OPEC decides to have a meeting and decide something, its decision is not up for debate by others. We were not forced to agree to production cuts. Each country entered OPEC willingly. We were not forced by anyone: we did it purposefully,” Mr. Chol declared at a panel discussion in the course of the Africa Energy Week (AEW) conference and exhibition in Cape Town, South Africa. “It was not a political decision but a technical agreement, and therefore, should only be addressed technically and not politically.”

Citing concerns over an impending global recession and ongoing market instability, OPEC+’s decision to cut oil production aims to stabilize the market and ensure more consistency between the physical and paper markets. Yet, following OPEC’s decision, accusations that the move to cut production was based on political drivers began to surface, with the international community – the U.S. in particular – accusing the organization of bowing to Russia’s agenda.

“The decision at OPEC was not political”, Lima of Equatorial Guinea weighed in. “What the consumers and producers want is the stability of pricing and demand. If you look at the price for consumers, the price has not gone down: it has been maintained.”

Over the last two years, the global oil market has seen the highest fluctuation in decades, with COVID-19 and ongoing geopolitical tensions causing prices to skyrocket, supply to be short, and countries worldwide seeking more stability. Oil prices were at their highest in years at the beginning of 2022, measuring upwards of $130 per barrel – compared with 2020 lows of just short of $40 per barrel. For consumers, this has caused significant stress, with prices changing significantly and fuel being in short supply.

Haitham Al Ghais, Secretary General of OPEC, delivering a keynote presentation at the same conference, noted that the group has prioritized market stability, with the production cuts expected to help meet this objective. “The producers of the declaration of cooperation remain a vital stabilizing force despite being in a period of great uncertainty. The last meeting was held a few days ago and the heads of delegations unanimously decided to take a proactive stance to create stability in global markets. With the very real potential of a global recession, there was a consensus among the ministers. I would like to thank the African heads of delegations for their ongoing support to provide lasting stability in global oil markets,” adding that, “Our efforts at the declaration of cooperation aim to provide stable oil markets.”


Uganda: CPF For Installation in 2023, First Oil Expected in 2025

TOTALEnergies is targeting Q1 2023, for the installation of the first equipment for the central processing facility on the Tilengaoil development project onshore Uganda.

The company its land acquisition programme was completed by August 2022 (with all compensations paid) while the last resettlement houses will be delivered in January 2023, the company explains.

The Tilenga development falls within TOTALEnergies strategy to develop resources with low carbon intensity, the company explains in a report. The project design has integrated the best available technologies and as a result it has less than 10 kilograms of carbon dioxide per barrel of oil, which is far below the average for oil and gas developments.
TOTAL says it is determined to deliver first oil in 2025.
Over 400 wells will be drilled in the course of the development.

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