All posts tagged in the news

GEIL Looks Towards Installing Own, Expanded Evacuation Terminal

Section: In the news · October 21, 2022 · No comments |

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

Section: Farm in, Farm Out · October 20, 2022 · No comments |

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 facilities, offering 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

Section: In the news · October 19, 2022 · No comments |

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

Section: In the news · October 19, 2022 · No comments |

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.

Baker Hughes Takes the Continent, after a Bruising Loss to Schlumberger in Uganda

Section: In the news · October 13, 2022 · No comments |

By Macson Obojemuinmoin

Baker Hughes has made inroads in winning well contracts and other oilfield and midstream service provisions across Africa, after its heavy loss to Schlumberger in Uganda, where it was twice announced winner, but ultimately wasn’t awarded the contract.

In Angola, the company won the tender for the supply of Turbocompressors for the gas processing plant on the Quiluma and Maboqueiro (Q&M) fields, Angola’s first non-associated gas development project. Project execution activities will start later in 2022 with first gas planned for 2026 and an expected production of 330Million standard cubic feet per day (MMscf/day) at plateau.

In Nigeria, Baker Hughes is to provide a range of drilling and related Integrated Well Services to deliver the initial nine well drilling and services programme in the redevelopment of the Abura field, located in the Oil Mining Lease (OML) 65, onshore western Niger Delta. Those services are contracted by Sirius Petroleum, the technical and financing partner and 30% shareholder in COPDC Petroleum Development Company Limited.

Baker Hughes is also currently assisting Geoplex, a Nigerian contractor, in delivering well services, completion and hook up, on a two well campaign by Green Energy International Limited, on the Otakikpo field, onshore Eastern Nigeria.

In Kenya’s Olkaria Geothermal Complex, the American service provider will supply drill bits, drilling services, wireline, drilling fluids, cementing, completions and cementing services for a project which started in September 2022. The drilling contractor is Ormat.

In Zimbabwe, a two well frontier drilling campaign for gas and condensate, by Invictus is being serviced by Baker Hughes. The first location was spud in October 2022.

Baker Hughes had lost, in controversial circumstances, a huge contract for drilling, completions and production services for the 190,000Barrels of Oil Per Day Tilenga onshore oil development to Schumberger in Uganda. TOTALEnergies received bids, awarded the contract twice to Baker Hughes, and cancelled, then finally awarded to Schlumberger, the world’s largest Oilfield Service provider. The scope of the contract includes the provision of directional drilling services, upper completions, lower completions, artificial lift solutions, and wellheads for the Tilenga development, which comprises six fields with up to 426 wells, which will be developed across 31 wellpads.

But the company’s African team is aggressively marketing its services, making up for the massive miss in Uganda.

The story was initially published in the June/July edition of Africa Oil+Gas Report

Uganda’s Local Entities Receive 36% of Procurement Spend by Oil Companies

Section: In the news · October 13, 2022 · No comments |

Fifty-two Million US Dollars, out of the $147Million spent by the licensed oil companies on procurement, between 2017 and 2020, was on local entities owned by Ugandans.

This represents 35.75% of the total procurement spend by the lOCs, “1,700 Small and Medium Enterprises (SMEs) had their capacity built in the areas of health, safety and environment, bid management, financing, corporate governance, among others”, reports Jessica Kyeyune, National Content Specialist at the Uganda National Oil Company (UNOC).

546 entities registered on the National Supplier Database (NSD) have so far been contracted in the country oil and gas sector. Out of these 498 (91%) were Ugandan entities while 48 (9%) were non-Ugandan.

Ugandan nationals directly employed by the oil companies as of September 2021 stand at 81%, with 59% at management, 75% technical and 100% of their support staff, according to data by UNOC.

4,435 Ugandans have been trained by the Oil companies in various technical disciplines to competitively participate in the oil and gas sector.

“The companies are creating many spin-offs in areas such as employment and secondary industrial services”, Kyeyune explains. “This has created direct benefits to the economy through generating tax revenues and improvement of infrastructure, such as roads, leading to a decrease in the cost of doing business in the country”.

It is the view of UNOC as well as the Petroleum Authority of Uganda (PAU) that local gains from oil & gas investment will be bolstered by further field development and exploration, joint ventures and farm-in arrangements in existing licenses, the production and processing of the crude oil, transportation facilitates and services related to this field (engineering, pipelines, storages facilities and refinery construction).

“The impact created by oil companies is on a growth trajectory and we believe the companies are contributing to the eluviation of poverty in the country by providing employment that pays higher than a living wage, improving the standards of living for many Ugandans and impacting the indirect and induced sectors of the economy like Agriculture, education, tourism, to mention but a few”, Kyeyune says. “All these are achieving National Content on a direct, indirect and induced aspects of the Oil & Gas value chain”.

NPDC In 800% Profit Surge Despite Lower Crude Oil Sales, Weaker Operating Performance

Section: In the news · October 6, 2022 · 2 comments |

With revenue from its core business relatively unimpressive year to year, how did NPDC manage to achieve such spectacular rise in Profit after Tax?

By Macson Obojemuinmoin

NPDC’s 800% increase in profit after tax, literally made all the difference in the “spectacular profit” that that the NNPC Group reported that it made in 2021.

There are 28 subsidiaries in the NNPC Group, but NPDC (Nigerian Petroleum Development Company), the upstream operating subsidiary, is the jewel in the group’s crown.

NPDC’s net profit after tax of ₦747Billion, a 792% jump in 2021, was more than a dramatic recovery from a 21% loss in revenue in 2020. (NPDC’s Profit after tax in 2020 was ₦ 84Billion. Far down from ₦478.5Billion in 2019).

Curiously, the difference in NPDC’s “overall revenue” year on year was only 32%, from ₦1.029Trillion in 2020, to ₦1.362Trillion in 2021.

As NNPC Group ‘s Profit after tax was ₦674Billion, it goes without saying that the contribution was largely from NPDC’s significant profit surge.

But how much of this runaway financial success was derived from the income from the actual work-related performance in the year of review?

As NPDC is primarily in the business of oil prospecting and production (as well as gas and power production and sales), it is logical to assume that its profit surge was significantly underpinned by the sharp increase in the price of crude oil in 2021. Average 2021: $70.54 (2020: $39.95).

But this surge in profit didn’t essentially come from crude oil sales.

Take a look at the numbers. NPDC’s crude oil revenues relate to liftings of the company’s equity interest in its various oil assets. However, in terms of direct lifting, the company lifted 26Million barrels of crude from a total of 16 oil mining leases (OMLs) in 2021, a sharp drop of almost half of the 47Million barrels it lifted from the same properties in 2020.

Its indirect liftings were higher; some 348,000 barrels from the ENI operated OMLs 60-63 in 2021, compared with 150,000Barrels in 2020. This is a minuscule fraction of the overall liftings.

In sum, this is weak operating performance; for a company to sell, in a year of soaring prices, half of what it sold in a year of depressed prices. The company thus increased its income only slightly, from ₦683Billion in 2020 to ₦749Billion in 2021.

The volume of marketed natural gas also fell, from 530Billion standard cubic feet in 2020 to 248Billion standard cubic feet in 2021, largely as a result of diminished supplies to the Nigerian Liquefied Natural Gas Limited from 256Billion standard cubic feet to 78Billionstandard ubic feet. Revenue from natural gas was, however, almost flat: from ₦211Billion in 2020 to ₦223Billion in 2021.

With revenue from its core business relatively unimpressive year to year, how did NPDC manage to achieve such spectacular rise in Profit after Tax?

The answer lies in some of the small print.

NPDC obtained a Presidential waiver, it says in the report, of ₦173Billion on its outstanding tax liabilities. It also raised income by reducing the cost of sales: from ₦837Billion in 2020 to ₦445Billion in 2021. The details of the so called reduction in the cost of sales show that the reduction in royalties and rental charges to the Nigerian government was around ₦200Billion year on year. This is an evolving story.

Our Latest Issue/Southern Africa: New Hot Spot, Old Habits

Section: In the news · October 2, 2022 · No comments |

This is our fifth Southern Africa Special since we started dedicating an edition to the annual gathering in Cape Town.

There are two such conferences now and this year, the Southern African hydrocarbon story is more compelling.

It all happened quickly, one after the other, at a time of great anxiety in the world.

Just before the year of COVID, TOTALEnergies opened a new petroleum province offshore South Africa. The discovery of the Bullfrog (Brulpadda), in the legendary “Cape of Storms”, in deepwater Outeniqua basin, was followed up late the following year, in 2020, with the discovery of the Leopard (Liuperd). The unveiling of these significant gas and condensate tanks indicate that Africa’s most industrialised economy has no more excuse for indifference in growing a gas-based industry.

But as you’d find out in those pages, the more things change, the more they stay the same.

To Namibia: In 2021, a rank unknown Canadian minnow delivered screaming headlines from around the drill bit in a rank unknown onshore frontier. ReconAfrica drilled two stratigraphic test wells onshore the country’s north, and confirmed that the Kavango or the Owambo (Etosha) Basin, a very large, previously unregarded sedimentary basin, exists beneath the sands of the Kalahari Desert. The 6-1 and 6-2 wells intersected over 300 metres of oil and gas shows and 200 metres of oil and gas shows respectively. The two were drilled to provide stratigraphic, sedimentological, reservoir and geochemical information. Neither of them was tested, but Reconfrica had made a point: “There’s something here!”. As we went to press with this edition, the company was drilling three seismically defined exploration wells whose primary zone is a Permian-age Karoo rift fill sequence of sediments. Based on the two stratigraphic wells and recently acquired high-resolution seismic, the Kavango basin is now viewed as highly prospective for conventional light oil and gas.

The bigger story from Namibia however is that two wildcats, spud back-to-back in late 2021 by two of the world’s biggest oil companies, made significant oil and gas discoveries. Shell’s Graff 1 and TOTAL’s Venus-1, drilled in deeper water Orange Basin, have been described by Rystad as some of the largest finds on the planet in the last one year. The once “disappointing” Namibian hydrocarbon scene, has certainly turned the corner.

Elsewhere in the south, Zimbabwe is currently hosting a two well campaign; a rare drilling activity, while Angola looks to two projects to top up its output by 300,000BOPD by 2026.

There is always a spoilsport: TOTAL has not returned to the site of the largest hydrocarbon project in Africa; the 13Million Metric Tonne Per Year Mozambique LNG project. The company blames the Islamist insurgency, which it says is still raging. The government pleads in response: “We are winning the war”.

Read your copy here…

The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions, for useful analyses of Africa’s oil and gas industry. Published since November 2001, AOGR is a monthly publication delivered to subscribers around the world. Its website remains www.africaoilgasreport.com and the contact email address is info@africaoilgasreport.com. Contact telephone numbers at the headquarters in Lagos are +2347062420127, +2348036525979 and +2348023902519.

GNPC Holds on to $100Million Oil Proceeds Meant for the Ghanaian Treasury

Section: In the news · September 29, 2022 · No comments |

Ghana National Petroleum Corporation (GNPC) is holding, in its account, about $100Million that should otherwise have been paid to the country’s Petroleum Holding Fund.

The money is part of the proceeds of crude oil export in the first half of 2022.

Following the acquisition of 7%, interest in the Jubilee and TEN Oilfields by GNPC in 2021 (later ceded to its subsidiary, Jubilee Oil Holding Limited – JOHL), reports the Ghanaian Public Interest Accountability Committee (PIAC), “JOHL made its first lifting (944,164bbls) on the Jubilee Field in the First Half 2022, amounting to $100,748,907.95. This amount was not paid into the Petroleum Holding Fund (PHF)”.

The PIAC, in its just released 1H 2022 report, recommends that “the proceeds of liftings by JOHL should be paid into the Petroleum Holding Fund (PHF), as the Committee is convinced that the proceedsform part of Ghana’s petroleum revenues”.

The PIAC also notes that “Capital Gains Tax was not assessed and collected by the Ghana Revenue Authority in the sale of the 7% interest by Anadarko in the Jubilee and TEN Fields in 2021”, and when the committee requested for explanation, “the Ghana Revenue Authority referred the Committee to the Ministry of Finance indicating that the Ministry was exclusively in charge of the transaction. The Ministry of Finance in turn referred the Committee to the Ghana Revenue Authority for answers”.

The lack of assessment of Capital Gains Tax of upstream asset sale by revenue authorities in the land was “contrary to Section 6(e) of the Petroleum Revenue Management Act, 2011 (Act 815)”, PIAC maintained.

The 186-page report observes an overall tardiness in petroleum revenue collection in 1H 2022. “Surface Rentals outstanding continue to increase”, it points out. “As at the end of H1 2022, the balance outstanding was $2,774,702.29 constituting an increase of 7.58% percent on the surface rentals of $2,579,170.21 at the end of 2021.

“The Ghana Petroleum Funds received an amount of $390,029,916.55 for the H1 2022, which is 91.43% percent higher than the budgeted allocation of $203.75Mllion for the GPFs for the full year in compliance with Section 4(a)(iii) of the Petroleum Revenue Management (Amendment) Act, 2015 (Act 893).

“The retention of the current cap of $100Million on the GSF for the year 2022 is not in accordance with the formula stipulated in the Petroleum Revenue Management Regulations, 2019 (L.I. 2381). A proper application of the formula would have returned a figure of $460,633,074.02.

The PIAC is an independent statutory body mandated to promote transparency and accountability in the management of petroleum revenues in Ghana.

Saipem Wins €1Billion Contracts for Cote D’Ivoire’s Field Development

Section: In the news · September 28, 2022 · No comments |

The ENI Cote d’Ivoire-Petroci consortium, a partnership of Italian explorer ENI and Cote d’Ivoire’s state owned Petroci, has awarded the major contracts for the development of Cote D’Ivoire ‘s large deepwater oil development to Italian contractor Saipem.

There are two new contracts and they are “worth approximately 1Billion euro overall”, Saipem says in a statement released September 27, 2022.

The contracts are for the Baleine Phase 1 Project, for the development of the relative oil and gas field offshore Ivory Coast located at a 1,200m water depth. “The Baleine Prospect represents the largest commercial discovery in the country in the last 20 years”, Saipem explains. The field was discovered in 2021 and it holds over 1Billion barrels of oil in recoverable reserves, ENI itself has disclosed.

The first contract entails Engineering, Procurement, Construction and Installation (EPCI) activities of Subsea Umbilicals, Risers and Flowlines (SURF) and of an onshore gas pipeline for the connection to the distribution grid. The offshore laying of flexible lines, risers and umbilicals will be executed by Saipem’s flagship vessel FDS2 and the development of the project will be on a fast-track basis. The start of operations is planned for the fourth quarter of 2022.

The second contract – also expected to be a fast-track – encompasses Engineering, Procurement, Construction and Commissioning activities regarding the refurbishment of the Firenze FPSO vessel, plus 10 years of Operations and Maintenance services of the vessel.

The award of significant contracts in a new area with great potential such as Cote d’Ivoire represents an important recognition of Saipem’s role as a contractor of excellence for the execution of complex projects requiring the integration of drilling, engineering and construction skills – both onshore and offshore – on a fast-track basis. These contracts also consolidate Saipem’s strategic positioning in West Africa.