All posts tagged in the news


NECONDE Finalises Finance and Technical Service Agreement with NPDC on OML 42

The Nigerian independent NECONDE has finalized an agreement with the state-owned Nigeria Petroleum Development Company NPDC in which a Special Purpose Vehicle will fund as well as carry out technical services on the Oil Mining Lease (OML) 42.

The FTSA will see an SPV named Amaranta…

Read more…


Ghana Looks for Contractors to Build, Co-Own a 300MMscf/d Gas Processing Plant

Ghana Gas Company has completed a Front-End Engineering and Design for a 300Million standard cubic feet of gas per day (300MMscf/d) Gas Processing Plant, which will be developed in phases, the first phase being 150MMscf/d (Phase II-A) and the second Phase II-B. The entire 300MMscf/d constitutes the second plant (second train in industry terminology) to the existing 150MMscf/d Atuabo plant and will be located just north of the first train.

The state gas company is in discussion with some companies, but wants to expand the dialogue to more local and international enterprises with expertise in the field to build the facility and co-own it and co-run it on equity participation basis with Ghana Gas (BCCT basis).  It will cost up to $400Million to install. Gas will come from Tullow Oil operated Jubilee field and TEN cluster of fields, as is the case with the first train. This planned expansion assumes that Tullow has enough gas reserves to underpin the project.

Ghana Gas is hoping that interested parties can show up early enough to sign the necessary documents and get the facility up and running by 2024.

 


OPEC Picks Al Ghais to Replace Barkindo, as OPEC+ Decides: More Oil or Less?

The oil exporters cartel OPEC has appointed a new secretary-general.

Kuwait’s Haitham Al Ghais, will replace Nigeria’s Mohammed Sanusi Barkindo, who leaves at the end of July 2021.

Barkindo, the Nigerian energy bureaucrat has led the cartel through some of the most momentous 52 months in the cartel’s 61 year history, and his second, three-year term ends this year. Barkindo took charge as Secretary General in August 2016, implementing “the freeze” that enabled the uplift from the extremely low oil prices in 2016 to ‘balancing the market’ by 2017 to engaging with the Pandemic from first quarter 2020.

Meanwhile OPEC+, the expanded group of countries that includes OPEC members and 13 other countries, meets Tuesday, January 4, 2022 to decide, whether to go ahead with plans to add another 400,000 barrels per day to the market from February 2022. The group had agreed, just before the Yuletide, to continue ramping up oil production despite concerns that omicron could scupper demand. Pundits see it sticking to its planned monthly production increases at this week’s meeting.

OPEC is made up of 15 member countries i namely Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.To make OPEC+, 13 other countries are part of the agreement to decide whether or not to increase or increase crude oil production. They include: Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, South Sudan, Brazil and Bolivia.…


Africa Wants to Finance African Oil & Gas Projects

Africa’s Oil and Gas Ministers are mulling the idea that a greater percentage of financing of oil and gas projects  on the continent should be financed by Africa based financiers.

At the 41st ministerial session of the African Petroleum Producers’ Organization (APPO) , the ministers identified the imminent challenges that the oil and gas industry will face in Africa as international financiers withdraw funding for the industry, and oil and gas research institutions in the developed countries that have always led the technological development are closing their petroleum faculties.

“The Council resolved to look within the continent at both public and private sources to raise the necessary capital to continue to finance the oil and gas industry”, according to a statement on the resolutions released by the APPO secretariat. “They agreed that Africa needs to” re-strategize as the game is fast changing.

“Furthermore, the Council called on the technologically advanced and financially capable countries to lend their support to African countries as they grapple with the challenges of Energy Transition”.

 


LOCAL CONTENT, GLOBAL INSIGHT, 2021

The latest monthly edition of the Africa Oil+ Gas Report has been released.

Some of the highlights:

COVER FEATURE

  • Angola Lists ‘Locals Only’ Services
  • A Target $2.5Billion Spend in Mozambique
  • Ghana: Get a Local Partner
  • Nigeria: The 10 Year Plan

KICKSTARTER

  • Shell Divestment: The Final Five

 FARM IN FARM OUT

  • MAP of Marginal Bid Round Winners

The link to the edition is here

https://africaoilgasreport.com/wp-content/uploads/2021/12/AOGR-VOLUME-22-NO-9-2021-global-Local-contents.pdf

Other stories in the copy include:

BRIEFINGS

  • Afreximbank: The Lender Chews It All
  • ENI, TOTAL, Will Be the Last Majors

FULL DISCLOSURE

  • PIA: The Promise Vs. The Delivery

 IN THE NEWS

  • Bullish on Libya

SPREADSHEETS

  • Angolan Operators’ Production
  • Nigerian Indigenous Producers: October 2021 Output
  • Angolan Rig Activity November 2021
  • Nigerian Rig Activity, November, 2021

MAPS

  • Equatorial Guinea E& P Map, Ghana E&P Map; Mozambique’s Activity Map; Angolan Activity Map; Nigerian Independents; Marginal Fields Activity Map

Plus, the regular features; Nigerian Independents Output, Concession Status, Angolan Production by Companies, Petroleum Rights, etc.
Contacts: +2348028354297, +2348124374087, +2348038882629, +2348036525979

 


ENI Commits to Invest $1Billion in Egypt’s Gulf of Suez and Nile Delta

The Italian player ENI has signed an agreement with the Egyptian General Petroleum Corporation (EGPC), committing to spending a minimum $1Billion on exploration and extraction in the Gulf of Suez and Nile Delta regions, the country’s Oil Ministry says in a statement, which does not specify a timeframe.

Tareq Al-Mulla, Egypt’s Minister of Oil and Mineral Wealth, and Alisandro Politi, ENI’s Executive President of Natural Resources Activities signed the agreement “of commitment to search for oil and development and exploitation in the Gulf of Suez and the Nile Delta between the Oil Corporation and Eni Italian Company and issued under law No. 185 for 2021”, the statement says.

ENI is also committed to spend at least $20Million extra dollars to Drill four (4) wells, “and the agreement comes within the new curriculum of the Ministry of Oil and Mineral Wealth to increase production rates and countering the natural shortage of energy by using the latest technologies in some areas are currently producing”, the statement, translated from Arabic says.

Egypt and ENI have lined up a number of joint initiatives on carbon capture, utilization and storage (CCUS), to be announced during the upcoming COP27 global climate summit in Sharm El Sheikh next year. Carbon capture is expected to be a big theme at COP27, with Oil Minister Tarek El Molla stressing its importance to the oil and gas industry and to combating climate change

 

 

 


Baker Hughes Executes Services Agreement on OML 65 Development

Sirius Petroleum reports that it has now executed a legally binding Master Services Agreement with Baker Hughes relating to the development of the Oil Mining Lease (OML) 65 in Nigeria’s Niger Delta. “This follows the Memorandum of Understanding (MOU) signed with Baker Hughes Company Limited earlier this year”, the London headquartered company says.

The MSA formalizes the terms of the appointment of Baker Hughes as the approved services provider to Phase 1 of the approved work programme (AWP) of the OML 65 Licence, a large onshore block in the western Niger Delta, Nigeria. Baker Hughes will provide a range of drilling and related Integrated Well Services under a mutually agreed pricing structure to deliver the initial nine well programme to Sirius and the joint venture COPDC Petroleum Development Company Limited (COPDC) in which Sirius is a 30% shareholder.

Phase 1 of the AWP will focus initially on the redevelopment of the Abura field, involving the drilling and completion of up to nine development wells, intended to produce the remaining 2P reserves of 16.2 MMbbl, as certified by Gaffney Cline and Associates (“GCA”) in a CPR dated June 2021.

The execution of the MSA with Baker Hughes constitutes the fulfilment of a key condition precedent to the drawing of the first tranche of funds under Sirius’ senior secured prepayment facility as the first stage of the OML 65 development programme, announced earlier this year.

“This marks a significant milestone for Sirius and its operational partners, and we look forward to working with the team on this innovative project.” said Toks Azeez, Sales & Commercial Executive for Subsaharan Africa at Baker Hughes. “Our leading Integrated Well Services solutions leverage new digitalization capabilities and will help deliver cost effective and efficient operations for the development of this important onshore opportunity.”

 


Ghana’s Oil & Gas Governance Index Better than the Older Gold Mining Sector

Ghana’s oil and gas sector scored 78 out of 100 points in the 2021 Resource Governance Index (RGI), improving by 11 points since the 2017 RGI. 

Strengthened resource governance is underpinned by improvements across both the index’s value realization and revenue management components.

• Ghana’s oil and gas sector’s move into the “good” performance band in the 2021 RGI is driven by improvements in the governance of licensing and national budgeting along with continued improvements of the state-owned Ghana National Petroleum Company (GNPC) and the Ghana Stabilization Fund, the country’s sovereign wealth fund.

• Adoption of new laws regarding licensing and national budgeting strengthened Ghana’s extractives legal framework and helped drive the 2021 RGI score increase.

• Both law and practice scores increased, but the difference between them widens from -7 to -22, signaling a worrying “implementation gap.”

• GNPC improved its performance through commodity sales disclosures, but areas for future improvement include the timeliness of disclosures and aspects of corporate governance.

• The Ghana Stabilization Fund scored a full 100 points on governance, owing to new disclosures of assets and asset classes.

• Ghana’s oil and gas sector outperformed the older gold mining sector owing to enhanced transparency and accountability in the oil and gas sector legislative framework.


Shell Will No Longer Be Dutch, AngloDutch, or ‘RoyalDutch’

By Toyin Akinosho

European oil giant AngloDutch Shell is about to drop the prefix AngloDutch or RoyalDutch and simply be Shell.

The name change will happen if the shareholders approve, in full, a special resolution at a proposed General Meeting scheduled for December 10, 2021.

The broad proposal, put forward by the Board of Royal Dutch Shell plc, is for a simplified structure that will establish a single line of shares to eliminate the complexity of Shell’s A/B share structure, and align Shell’s tax residence with its country of incorporation in the UK, where it will hold Board and Executive Committee meetings, and locate its chief executive and chief financial officer.

The proposed structure should enhance the speed and flexibility of capital and portfolio actions, strengthen Shell’s competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net-zero emissions business.

Shell has been incorporated in the UK with Dutch tax residence and a dual share structure since the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and The Shell Transport and Trading Company under a single parent company. It was not envisaged at the time of unification that the current A/B share structure would be permanent.

A conventional single share structure will allow Shell to compete more effectively. It will:

  • Allow for an acceleration in distributions by way of share buybacks, as there will be a larger single pool of ordinary shares that can be bought back. Following the start of a $2Billion buyback programme in July 2021, Shell announced in September 2021 that it will return an additional $7Billion to shareholders following completion of the sale of its Permian assets in the United States.
  • Strengthen Shell’s ability to rise to the challenges posed by the energy transition, by managing its portfolio with greater agility.

Reduce risk for shareholders by simplifying and normalising Shell’s share structure in line with its competitors and most other global companies. The current complex share structure is subject to constraints and may not be sustainable in the long term.

Following the simplification, shareholders will continue to hold the same legal, ownership, voting and capital distribution rights in Shell. Shares will continue to be listed in Amsterdam, London and New York (through the American Depository Shares programme), with FTSE UK index inclusion. It is fully expected AEX index inclusion will be maintained. Shell’s corporate governance structure will remain unchanged.

Shell is proud of its Anglo-Dutch heritage and will continue to be a significant employer with a major presence in the Netherlands. Its Projects and Technology division, global Upstream and Integrated Gas businesses and renewable energies hub remain located in The Hague.

Shell’s growing presence in wind projects off the Dutch coast, recent decision to build a world-scale low-carbon biofuels plant at the Energy and Chemicals Park Rotterdam, plan to build Europe’s biggest electrolyser in Rotterdam, and its intention to participate in the Porthos carbon capture and storage project, all underline the importance of the Netherlands to the company’s energy transition activities.

Carrying the Royal designation has been a source of immense pride and honour for Shell for more than 130 years. However, the company anticipates it will no longer meet the conditions for using the designation following the proposed change. Therefore, subject to shareholder approval of the resolution, the Board expects to change the company’s name from Royal Dutch Shell plc to Shell plc.

 

 

 


Shale Drilling on the Rebound in 2022, with Spending Cruising to $100Billion

 By Rystad

US shale expenditure is projected to surge 19.4% next year, leaping from an expected $69.8Billion in 2021 to $83.4Billion, the highest level since the onset of the Covid-19 pandemic and signaling the industry’s emergence from a prolonged period of uncertainty and volatility, according to a Rystad Energy report.

As the impact of the pandemic on demand and activity levels out, US Land players are poised to loosen their purse strings. As the Omicron variant of the novel coronavirus tightens travel restrictions and raises concerns over a potential industry slowdown, some hesitancy in spending could yet materialize.

Of the expected year-on-year increase, service price inflation alone is set to add $9.2Billion, with increased activity chipping in $8.6Billion. These increases will be partially offset by $4.2Billion in savings from efficiency gains. Efficiency gains are expected to be driven predominantly by further adoption of simul-fracs. Despite the sizeable annual spending growth, the 2022 total will still end up well below the level forecast for 2022 before the pandemic took hold.

“Oil and gas activity and upstream spending in US Land has been exposed to significant volatility in the last two years. Aggressive strategies from private operators in the US shale patch have driven spending this year, but we anticipate significant growth in 2022 from public and private operators alike,” says Artem Abramov, head of shale research at Rystad Energy.

In November 2019, before the market downturn caused by Covid-19, Rystad Energy forecast total US shale spending for 2020 would be $104.9Billion, with $109.7Billion and $119.8Billion per annum estimated for 2021 and 2022, respectively. The estimate for 2020 was taken down sharply in that year’s second quarter to $60.4Billion following the unprecedented oil price crash and a domestic storage crisis. While modest adjustments to this estimate were observed in the second half of 2020 and the first half of this year, the final numbers for all public producers and final estimates for private exploration and production (E&P) players had only a marginal net impact on that original estimate. Currently, the number for 2020 still stands at $60Billion.

Public independents largely maintained their 2021 US shale budgets compared with 2020 on a full-year basis, with a modest increase in the weighted-average well activity index (two-thirds of completion count and one-third of drilled well count). Somewhat higher activity was offset by structural efficiency gains and lower service costs behind actual drilling and completion (D&C) operations. While the latter might sound counterintuitive from the perspective of significant spot rate inflation in most service segments throughout 2021, it should be noted that there was an opposite trend throughout 2020, which allowed large independents to lock in cheaper service rates in early 2021 compared to what was behind their D&C spending in 2020.

Meanwhile, private operators, which moved aggressively throughout 2021, warmed up spot service rates and have already felt the impact of cost inflation this year. As a result of this private E&P activity uptick, total US shale capital expenditure increased by around 16% in 2021 compared with 2020.

How the regions stack up

At the regional level, spending in the Permian and Haynesville plays stayed resilient during 2020’s downturn, seeing a faster structural increase in activity this year. As a result, full-year upstream spending in these regions has increased by between 23% and 24% so far this year, outperforming the national average growth rate. The Niobrara saw an even steeper increase in spending in 2021 on a percentage basis, albeit starting from a particularly low base after the massive collapse last year.

Appalachia and the Eagle Ford, on the other hand, have experienced only minor growth in 2021, with spending rising between 3% and 6% compared with last year. While the Eagle Ford has seen a healthy recovery in rig count during 2021, its full-year spending growth numbers were dragged down by low drilled but uncompleted (DUC) wells to completion activity, especially when compared to the Permian, and inflated 2020 spending amid robust activity in the first quarter of 2020. Spending in the Bakken and Anadarko regions in 2021 has declined by between 7% and 14% from last year.

Looking ahead to 2022, the Eagle Ford, Niobrara and Anadarko regions are anticipated to beat nationwide average spending growth due to the rig activity expansion observed in recent months, which provides some momentum to the increase in the running rate of frac activity in 2022. The Bakken is forecast to have 19% spending growth next year, matching the national average growth rate, while the Permian is set to grow by 17%, slightly less than the national average as other basins are catching up. On the gas side, we anticipate a 15% increase in spending from Appalachia and an around 10% increase in the Haynesville. While the full-year growth rate is seen higher in Appalachia, this does not really suggest a stronger increase in the running rate of frac activity in the northeast region, where supply remains constrained by the takeaway capacity situation.

 

© 2021 Festac News Press Ltd..