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Ghana Earned its Highest Petroleum Revenue in 2022, Despite a Persistent Output Decline

Total petroleum revenue accruing to Ghana in 2022 was the highest for a single year since inception of petroleum production in the country, with a figure of $1.43Billion.

The surge in earnings is in spite of continuing declining of crude oil production for three consecutive years, according to the 2022 annual report by Public Interest Accountability Committee (PIAC).

The 2022 production figure represents the third consecutive year of reduction in annual production volumes since 2010. In 2019, the PIAC explains in the report.

A volume of 71,439,585 barrels was produced in 2019, but declined to 66,926,806 barrels in 2020, representing 6.32% drop. It further declined to 55,050,391 barrels in 2021 (17.75%) and then to 51,756,481 barrels in 2022 (5.98%). The average decline over the three-year period stood at 10%.

The report laments that Surface Rental Arrears continue to rise. It increased from $2.58Million in 2021 to $2.77Million in 2022, 65% ($1.80Million) of which is owed by four (4) contractors whose Petroleum Agreements were terminated in 2021. Efforts made by the Ghana Revenue Authority to retrieve the arrears are yet to yield the desired results.


ExxonMobil Achieves 2.5Billion Barrels of Cumulative Oil Production in Angola’s Block 15

ExxonMobil and partners have achieved the milestone of 2.5Billion barrels of cumulative oil production in Angola’s deepwater Block 15, since the First Production from FPSO Xikomba, 20 years ago.

The partners installed five FPSOs on the asset in the first six years of commencement of production, thus establishing the fastest execution time in West Africa and one of the fastest in the history of the industry, according the ANPG, Angola’s oil and gas regulatory agency.

Production started with the FPSO Xikomba in 2003, followed by the application of the “Design One, Build Several” strategy for FPSOs Kizomba A in 2004, Kizomba B in 2005 and 2 (two) on Kizomba C (Mondo and Saxi-Batuque) in 2008.

ANPG explains that the achievement “demonstrates that Angola maintains a good potential for oil and gas production, so the National Concessionaire, together with its partners, will do everything to ensure that the sector continues to be profitable and contribute to the development of the Nation”.

Block 15, located approximately 145 kilometers west of the coast of Zaire Province, has 18 commercial discoveries, making it one of the most successful offshore concessions in West Africa.

“Due to the increasing maturity of the fields in block 15, the current focus is on maximizing the recovery of the remaining resources by optimizing production, using technological advances and reducing emissions”, ANPG declares in the statement.


Benefits Negotiations Force Removal of 140,000BPD of Crude from Nigerian Output

By Macson Obojemuinmon

A stalemate in negotiation of wages and benefits led ExxonMobil’s Nigerian workers to shut in the company’s oil wells, forcing the American major to declare force majeure on oil liftings from its major export terminals in the country.

ExxonMobil’s Qua Iboe Terminal loaded 138,731Barrels of Oil and Condensate (blend) Per Day in March 2023. The company’s two deepwater FPSOs – Erha and Usan – which are considered terminals in their own right, produced a combined 116,142BPD in the same month, according to figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

Several of the staff told Africa Oil+Gas Report, “we are making all efforts to bring everyone back to the negotiation table”, thus, corroborating the statement by the company’s spokesperson Michelle Gray:  “We will continue to take all reasonable actions necessary to resolve the impasse as soon as possible”.

Some of the staff themselves admit that it is very unusual to shut down production to prove a point on the negotiating table for wages and benefits. “I would have thought they would have allowed for some further negotiation before taking the decision to shut down production”, one staff admitted “This is not the best for anyone”.

ExxonMobiil’s output, which is entirely offshore, has been one of the least affected by the crude oil theft from evacuation infrastructure, a key factor in Nigeria’s plunging hydrocarbon production. But the fields have suffered natural depletion in the last 10 years, as the company has invested less on the facilities.

The shallow water assets, which delivered close to 140,000BPD in March 2023, are in the process of being sold by ExxonMobil to Seplat, although the refusal of the regulator to grant consent for the sale has forced a halt in the proceedings.

Yet the ongoing negotiations are not restricted to either deepwater asset workers or shallow water staff.

“There’s no transition in ExxonMobil yet”, the staff disclosed to AOGR. “Until government gives their approval, (for the sale and purchase of the shallow water assets) we are maintaining the status quo”.

“We are all one as at today. No difference”,


How John Wayne (Red Adair) Helped Save the Oil Patch

By Gerard Kreeft

I’ve done made a deal with the devil. He said he’s going to give me an air-conditioned place when I go down there, if I go there, so I won’t put all the fires out.”

If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

Red Adair Quotes

Hellfighters (1968) is an American adventure film starring John Wayne depicting Red Adair as the worldwide oilfield fighter. The film was for the most part negatively received. Yet to have a film made about yourself is indeed a high compliment.

In the course of his career spanning some 35 years Adair and his company battled more than two thousand land and offshore oil wells, natural gas wells, and similar spectacular fires. During World War II Adair served in a bomb disposal unit of the US Army. After the war he started working in the oil and gas industry for Myron Kinley now viewed as the grandfather of modern well control.

Already in 1931 Kinley traveled to Romania and extinguished the 2-year-old Moreni 160-well which had created a crater of 250 feet across and 65 feet deep. Kinley became an international celebrity.

In 1936 Kinley extinguished a well fire burning in Lake Maracaibo in Venezuela, using another new technique. Myron erected a derrick six hundred feet from the burning well and drilled a slant-hole well that intercepted the burning well’s casing deep beneath the surface. He then pumped drilling mud into the well bore, killing the gas pressure and putting out the fire. This use of directional drilling, then a nearly new procedure, provided a novel and radical solution to wild-well control.

How will well control be remembered by future generations? Certainly well control certification done either by IWCF or the IADC will seem like a distant memory.

Kinley and Adair pioneered the technique of using a V-shaped charge of high explosives to snuff the fire by the blast known as the Munroe effect. Adair had seen it used in bazookas and the atomic bomb. Chemical energy generated by initiation of an explosive is focused on the center of a hollow cavity. The concentrated force generates a jet with high penetration power.

Adair gained global attention in 1962 when he tackled a fire at the Gassi Touil gas field in the Algerian Sahara, nicknamed the Devil’s Cigarette Lighter: a 140 metre pillar of flame that burned from mid-November 1961 until the end of April 1962.

Regarding Africa, the two largest oil producers are Nigeria and Angola of which the latter has never experienced a major oil or gas blowout.  Nigeria has had its fair share of blowouts.  Perhaps the worst in the country was in 1980 when Texaco was drilling the Funiwa-5 development well in the shallow water of River State.  Texaco lost control of the well, resulting in a blowout and a spill of 400,000 barrels of oil which had a devasting impact on the nearby coastal communities.

Fast forward to April 2010: the Deepwater Horizon oil spill involving BP’s Macondo Prospect. The Deepwater Horizon oil spill off the coast of the USA was considered to be the largest marine disaster in the history of the industry. The US federal government estimated the total discharge at 4.9Million barrels. In 2011 a White House commission blamed BP and its partners for a series of cost cutting decisions and an inadequate safety system, but also concluded that the spill resulted from “systemic” root causes and “absent significant reform in both industry practices and government policies.” As of 2018, cleanup costs, charges and penalties had cost BP more than $65Billion.

While the various oil field fires and marine disasters have captured the imagination of Hollywood, such tragedies have further stained the reputation of the oil and gas industry. What has the industry done on the regulatory front?

The Politics of Well Control

The setting up of an international well control system is a story in its own right. In the early 1990s, the various European countries maintained a variety of well control training schools. The International Association of Drilling Contractors (IADC) encouraged and provided key leadership in a bid to provide standardized well control training. In December 1992, the European Well Control Forum was established in The Hague in The Netherlands, as a non-profit organization.

As IADC’s Director of European Operations (1991-1997), part of my mission was to help build consensus among the drilling schools, the drilling contractors and the operators. These meetings were held throughout Europe. Consensus and trust were slowly built over a number of months. The breakthrough came when Shell declared its global support for such a standard. The consent of BP and TOTAL soon followed.  When the European Well Control Forum was founded in 1992 in The Hague, Shell, not surprisingly, delivered the first chairman.

IADC’s reaction was mixed. At first it was surprised and happy that a global well control standard had been reached; but later it felt some reservation and worry that the oil companies now had a dominant say in well control training. Do not forget that oil companies and the drillers have–in good times and in bad—always maintained an adversarial relationship. This is the real reason why IADC has created its own well control programmes.

To illustrate the point more graphically. I remember one meeting at which a key Shell speaker was scheduled to give an opening address and was introduced by Alain Roger, then IADC Chairman. Alain gave an introduction as only Alain could: “We all know what win-win means”…the Shell speaker was ready to nod his agreement…then came Roger’s punch line…”the oil company screws you twice”. The audience became deadly silent; an acknowledgement that the blow had landed.

Since then, the European Well Control Forum has been renamed the International Well Control Forum (IWCF). Their primary objective is to develop and manage well control training, evaluation, and certification programs for the exploration and production sectors of the oil and gas industry.

“IADC’s WellSharp accreditation programme provides comprehensive well control training standards for the global drilling industry, emphasizing rigorous training for every person with well control responsibilities”, IADC says in a statement. “WellSharp provides trainees with in-depth knowledge, well-honed role-specific skills, and greater confidence that they know what to do to prevent and handle well control incidents.”

The question remains: what is the difference between the IADC and IWCF well control training? According to LearnToDrill…” both IADC and IWCF certificates are the same. Both organizations exist to offer accredited Well Control training, and both organizations typically have the same standards.”

“The IWCF, or International Well Control Forum, is based out of Aberdeen, Scotland. The IWCF’s sole focus is well control and well control training. Generally, IWCF training and IWCF certificates are more focused on European, Asian, and Middle Eastern markets.”

The IADC is based out of Houston, Texas.  While it has global reach, and is constantly working to expand this reach, the contractors group is primarily focused on the United States. As a result, for many US-based land drilling contractors, IADC Well Control is used almost exclusively.

Adair gained global attention in 1962 when he tackled a fire at the Gassi Touil gas field in the Algerian Sahara, nicknamed the Devil’s Cigarette Lighter: a 140 metre pillar of flame that burned from mid-November 1961 until the end of April 1962.

…Both IADC certificates and IWCF certificates are used interchangeably in many parts of the world. In the United States, for example, many operators and contractors exclusively accept IWCF certificates. Similarly, IADC Well Control training is accepted in many parts of Europe and Asia.”

Some final remarks

How will well control be remembered by future generations? Certainly well control certification done either by IWCF or the IADC will seem like a distant memory. Perhaps a bedtime story for your grandchildren? A gloating story of Red Adair putting out a desert blaze will certainly gain their attention.  And if that doesn’t draw their fancy simply play that old John Wayne film…one more time.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil + Gas Report and is a guest contributor to IEEFA(Institute for Energy Economics and Financial Analysis) based in Cleveland, Ohio, USA. His book ‘The 10 Commandments of the Energy Transition ‘is on sale at https://books.friesenpress.com/store/title/119734000211674846/Gerard-Kreeft-The-10-Commandments-of-the-Energy-Transition


East African Oil Pipeline in Court Again: Hearings Reserved for June at the Earliest

The 1,443 Kilometre East Africa Community Oil Pipeline (EACOP) has had another day in court; and the East African Court has decided it would rule whether it was qualified to hear the case against its construction or not, between June and August 2023.

The last court attempt to halt the construction -before this one- was dismissed in Paris, France on February 28, 2023. The Paris Civil Court, after more than three years and a lengthy procedural battle, threw out the case  brought by Friends of the Earth France, Survie and four Ugandan civil society organizations (AFIEGO, CRED, NAPE/Friends of the Earth Uganda and NAVODA) against French oil giant TOTAL, regarding its oil mega-projects (the upstream development, Tilenga and the midstream work, EACOP) in Uganda and Tanzania.

The installation of the massive EACOP infrastructure; a heated pipeline which would allow Uganda to export its crude via Tanzania’s port of Tanga, is ongoing. Its contractors include China Petroleum Pipeline Engineering (CPP), Bollore, Schneider Electric and Worley. In January 2023, Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development, issued the license authorizing the project, following the application submitted on July 1, 2022, “in compliance with various acts and regulations, including the Petroleum (Refining, Conversion, Transmission, and Midstream Storage) Act 2013, Regulation 59 of the Petroleum (Refining, Conversion, Transmission, and Midstream Storage) Act 2016, and the East African Crude Oil Pipeline Special Provisions Act 2021”..

In the current suit against the project, the East African Court of Justice (EACJ) reserved judgment after hearing arguments for and against the objection to the court’s jurisdiction filed by the Secretary General of the East African Community, the Republic of Tanzania and Republic of Uganda in response to the case challenging the construction of the East African Crude Oil Pipeline (EACOP) “until the questions of environmental, social justice, and climate justice concerns raised in the case are heard and determined.”

The preliminary objection sought to dismiss the case before the Applicants Natural Justice, Centre for Strategic Litigation, the Centre for Food and Adequate Living Rights (CEFROHT) Limited, and Africa Institute for Energy Governance (AFIEGO) – got the opportunity to ventilate the real issues at the main hearing.

The contention of the Respondents’ was threefold: One, that the court did not have the power to entertain the case since it was brought outside the statutory period of two months. Secondly, they contested the jurisdiction of the court to entertain issues of violation of human rights- according to the Respondents, this matter fell outside the court’s purview when human rights issues arose. Finally, the Respondents argued that the matter was not ripe for hearing due to the Applicants’ submission being defective.

The Applicants – asked the court to dismiss this preliminary objection on the basis that it was not properly framed. The nature of the objection raised by the Respondents is argued on points of law only. The Applicants argued that the issues raised by the Respondents required the court to go into questions of fact, which the court should not consider at a preliminary stage. Specifically, the court could not, at this point, evaluate the contested dates on which The Intergovernmental Agreement and the Host Government Agreement were signed.

Ruling on the preliminary objection will likely be handed down when the court sits again in June or August 2023. If the preliminary objection on the court’s jurisdiction is successful, the case shall be dismissed, and if the court determines that it has jurisdiction, then the matter shall proceed, and will be heard on merits.


ENI’s FPSO ‘Firenze’ Sails Away to Baleine Field, Offshore Côte d’Ivoire

Italian explorer ENI, in partnership with PetroCi, has celebrated the sail away of the FPSO Firenze to the Baleine field offshore Côte d’Ivoire.

The FPSO Firenze will allow production start-up of the Baleine field, which is the largest hydrocarbon discovery in Côte d’Ivoire to date, with an estimated oil in place of 2.5Billion barrels and 3.3Trillion cubic feet of associated gas.

“The development of Baleine will also be Africa’s first net-zero emission project (Scope 1 and 2)”, ENI claims in a statement.

The FPSO Firenze, that will be renamed Baleine after its arrival in Cote d’Ivoire, has been refurbished and upgraded in order to allow it to treat up to 15,000Barrels of oil and around 25Million standard cubic feet of associated gas.

The entire gas production will be delivered onshore via a newly built export pipeline. The installation of the subsea production system and well completion campaign are underway and will ensure an accelerated start-up of production by June 2023.

ENI’s phased development is set to start production less than two years from the Baleine 1X discovery well and one and a half years after the FID. ENI is already progressing swiftly on the second phase of the project forecasting a start-up of production by December 2024 after having taken the FID in December 2022.

ENI is committed to sustainable development, and the Baleine field’s net-zero emission project is a significant step towards achieving this goal. The company looks forward to contributing to the development of Côte d’Ivoire’s hydrocarbon industry with the Baleine field and its other projects in the Ivorian deep water.

The Baleine field extends over blocks CI-101 and CI-802. ENI also owns interests in four other blocks in the Ivorian deep water: CI-205, CI-501, CI-401, and CI-801, all with the same partner, PetroCi Holding.

 

 


Nigerian Court Vacates Interim Orders against Seplat Energy CEO

The Federal High Court sitting in Lagos, Nigeria’s commercial city, has vacated the ex parte Interim Orders against Seplat, its CEO and its Board Chairman, including the orders that restrained the Chief Executive Officer, Mr. Roger Brown from participating in the running of the Company.

The case has been adjourned to May 16, 2023, to continue the hearing.

“The ex parte Interim Orders were in relation to a court petition filed by five persons who claim to be minority shareholders of the Company, collectively holding 161 units of shares”, Seplat says in a release.

The Company argues that “the petition lacks proper basis and is premised on false allegations”, and declares: ”Seplat Energy remains confident that the judicial process will address the circumstances appropriately.

“The Company continues to engage with the Ministry of Interior”.


Angola To Put Up 12 More Onshore Blocks for Sale

By Toyin Akinosho, publisher

Angola will launch the tender for concessioning of 12 onshore oil blocks on September 30, 2023, its hydrocarbon regulatory agency has announced.

Four (4) of the concessions are located in the Onshore Basin of the Lower Congo (CON 2, CON 3, CON 7 and CON 8) and the other 8 (eight) in the Onshore Kwanza Basin (KON 1, KON 3, KON 7, KON 10, KON 13, KON 14, KON 15 and KON 19), according to the National Agency of Petroleum, Gas and Biofuels (ANPG),

“The deadline for submitting proposals is November 4, 2023, in compliance with the 40 days after the official launch of the tender, under the terms of the legislation in force”, ANPG explains.

“The tender takes place under Law n.º 10/04, of November 12 (Petroleum Activities Law, amended by Law n.º 5/19, of April 18) and Presidential Decree n.º 86/18, of April 2 (rules and procedures for tenders for acquiring the status of Associate of the National Concessionaire).

If this offer is consummated, it will be Angola’s second conclusive offering of onshore acreages in two years.

Angola is almost exclusively an offshore producer, but in September 2021, it awarded nine onshore acreages (CON 1, CON 5, CON 6, KON 5, KON 6, KON 8, KON 9, KON 17 and KON 20), to 16 companies, six  of whom were handed operatorships, while 10 were announced as non-operating partners in all the blocks. MTI Energy was the bid round’s major beneficiary, as it gets to be operator of four out of the nine blocks and has no less than 50% equity in all the blocks it is allocated to operate.

THE FORTHCOMING ROUND, christened “Tender 2023” aims to, in the words of the ANPG:  (i) relaunch the exploration and production of hydrocarbons in onshore areas, (ii) reassess the existing oil potential in the said basins, (iii) mitigate the decline in production, by increasing exploration activity and discovering new resources and (iv) encourage the participation of small and medium oil companies, as well as (v) promote technological innovation and good governance practices.

The ANPG says it will, at the appropriate time, hold sessions to share information on the oil potential of the blocks and on the legal and contractual framework, the date and place/platform of which will be announced on the website www.anpg.co.ao and in the media.

For more information, interested parties may contact us via email : certocao2023@anpg.co.ao .


Nigerian Interests Keep Pushing Shell, ENI Away from OPL 245 Development

By Macson Obojemuinmoin

ENI and Shell have not made much progress in returning to activity on the Oil Prospecting Lease (OPL) 245 in Nigeria’s deep offshore, despite a string of court victories validating their case in UK and Italian courts.

The Nigerian government has maintained a steadfast opposition to the majors’ claims that there was nothing fraudulent about how they won the rights to the asset.

The legal wranglings have put, on the back of the burner, development plans for Etan and Zabazaba fields, two commercial sized discoveries made on the lease.

But can these two major European partners lose the asset, if they don’t settle the legal issues with the government by the terminal date of the Production Sharing Contract (PSC) governing the acreage, which comes up sometime in 2023?

Or can they still lose the asset, if they resolve their legal issues before the PSC’s terminal date, but are seen as not having carried out sufficient work programme to develop the acreage?

“The case against ENI and Shell by the Federal Government of Nigeria is a separate issue from the commercial activity that the two companies have carried out on the asset”, argues Austin Avuru, former Chief Executive of Seplat Petroleum and chair of the influential Petroleum Club of Lagos. “If the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) elects not to renew the licence based on the legal issues, or on the grounds that they haven’t advanced on the development, the action will be deemed punitive”.

Avuru would not respond to inquiry about widespread speculations that there are interests, deeply ensconced in the Nigerian political system, who are hoping to take advantage of the non-renewal of the licence to ENI and Shell.

As there has been significant work by ENI and Shell on OPL 245, in Avuru’s view, “the discussions around the renewal of the asset should focus on what the benefits are for the economy. The delay in development should be seen as a form of Force Majeure”.

Still, it is not clear when the partners will get around to resume activity on the asset.

In June 2022, the United Kingdom commercial Court held “that there is no evidence of fraud in the OPL 245 transaction between Nigeria and JP Morgan Chase Bank”. That ruling followed the March 17, 2021 ruling by an Italian court in Milan, that ENI’s CEO Claudio Descalzi and members of his management “had no case to answer” for the payment the company made to acquire its stake in the OPL 245 Lease, eleven years ago. That case had run in the Milan court for three years and Mr. Descalzi, who has been ENI’s CEO since May 2014, faced certain prospect of a jail term. On July 19, 2022, Italy’s Assistant Attorney General Celestina Gravina brought the legal proceedings on the case to a close by waiving the possibility to appeal against the Court’s decision of 17 March 2021.

But the Nigerian government has remained unimpressed by these rulings, outrightly dismissing the ruling in Milan as disappointing and going cold on the UK ruling. The country’s Economic and Financial Crimes Commission (EFCC) has maintained, in the Nigerian court system, “that a fraudulent settlement and resolution came under (President Goodluck Jonathan’s government with Shell and ENI buying the oil block from Malabu in the sum of $1.1Billion”. It said its Investigations into the deal “revealed crimes that border on conspiracy, forgery of bank documents, bribery, corruption and money laundering, to the tune of over $1.2Billon against   Malabo Oil and Gas Ltd, Shell Nigeria Ultra deep (SNUD) Ltd, Nigeria Agip Exploration (NAE) and their officials”.

The Zabazaba-Etan twin deepwater field development is aimed at monetizing reservoirs located in 1,500 and 2,000metres below the seabed. The Field Development Plan calls for conversion of a Very Large Crude Carrier (VLCC) to a Floating Production Storage and Offloading (FPSO). Recoverable reserves for the two fields combined are in the region of 500Million barrels of oil equivalent (BOE).

This piece was initially published in the November 2022 edition of the monthly Africa Oil+Gas Report.


Vallourec to Shut Down Nigerian Operations and Dismantle Factory

Vallourec, the France based giant in tubular solutions for the energy market, is shutting down its Nigerian operations.

The downturn in oilfield activity in the country has determined that the company should leave.

“There are no new contracts to sustain the business”, multiple sources tell Africa Oil+Gas Report.

Vallourec commissioned its first African industrial facilities in Nigeria in 2009, and the Group has been developing its industrial and commercial operations across the continent since then, such that it now has a presence in five African countries.

“Different components (f the factory) will be sold or dismantled and shipped out”, the sources say, adding that a firm decision on evacuation had not been taken.

Unlike Nigeria, there are no factories in the three other countries: Egypt, Angola and Angola, and the company, for now.

Vallourec offers  seamless tubes and premium connections for OCTG, line pipes, tubes for petrochemical facilities as well as a wide range of services, from tubular yard management enhanced with digital technologies to welding with Serimax or oilfield operations support with the VAM ® Field Services’ team throughout the continent where our customers are present.

 

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