All posts tagged oil-blocks


Ghana Backs Down on Objection to Wissam Al Monthiry as Tullow’s Head

Ghanaian authorities have quietly dropped objections to having Wissam Al Monthiry as Managing Director of Tullow Oil Ghana.

The Government initially demonstrated fidelity to its local content requirements when it objected to British company’s appointment of a non-Ghanaian as the Company’s Chief Executive in Ghana, insisting that Tullow Oil’s action defeats the Government’s localisation agenda.

Tullow had initially picked Kweku Awotwi, a Ghanaian electrical engineer and businessman, in February 2020, after the retirement of Charles Darku, the first Ghanaian managing director who had served the company for five years

But in the middle of May 2020, after an extensive review of its operations in the country, which is also its heartland, Tullow appointed Wissam Al Monthiry to replace Awotwi, who was due for retirement on June 30, 2020.

“Government did not pursue this objection further as the new MD remained Tullow’s MD as at June 30, and into the second half of 2020”, says the country’s Public Interest Accountability Committee, in its latest report.


Angola Charges $1Million Entry Fee for Next Bid Round, to Launch in April 2021

Angola’s National Oil, Gas and Biofuels Agency (ANPG), as a national concessionaire, has announced its intention to hold an international tender for the award of new oil concessions in the country.

Nine blocks are on offer: three in the Terrestrial Basin of the Lower Congo and six in the Terrestrial Basin of the Kwanza. The contest opens 120 days from December 31, 2020, ANPG says. That is April 30, 2021.

This licence sale, which focuses on Blocks CON1, CON5 and CON6, of the Terrestrial Basin of the Lower Congo, and Blocks KON5, KON6, KON8, KON9, KON17 and KON20, of the Terrestrial Basin of Kwanza, “has a mandatory condition of participation the payment of an Entry Fee (Entry Free) in the amount of $1,000,000.00 (One Million United States Dollars), which will allow access to the Data Packages related to the basins to bid.

The deadline for the submission of proposals runs until June 9, 2021, in compliance with the 40 days provided for by law, and the opening ceremony for proposals will take place on June 10, 2021.

“This 2020 bid aims to relaunch the exploration and production of hydrocarbons in the terrestrial areas of the referred basins, to decrease the decline in production, by increasing the exploration and discovery of new resources, to stimulate the local creation of small and medium oil companies, to promote the incorporation of qualified Angolan labor, as well as fostering technological innovation and good governance practices. 

Paulino Jerónimo, Chairman of the Board of Directors of ANPG

The bid round is taking place under Law no. 10/04, of 12 November (Law of Petroleum Activities, amended by Law no. 5/19, of 18 April) and the aforementioned Presidential Decree No. 86/18, “to acquire the status of associate of the national concessionaire and to contract goods and services in the oil sector ”, Mr. Jerónimo explains.

“The National Concessionaire will communicate in due time the date and location of the technical presentations (roadshows), through an advertisement on the ANPG portal ( www.anpg.co.ao ), and in the national and international media”.

 


ENI Discovers Oil and Hooks It Up Quickly in Egypt’s Western Desert

 

By Toyin Akinosho

ENI announced a relatively small new oil discovery in Egypt and hooked it up within a month.

The discovery, in the Meleiha Concession in Egypt’s Western Desert, was achieved through the Arcadia- 9 well, drilled on the Arcadia South structure, which is located 1.5km south of the main Arcadia field already in production.

Arcadia -9 encountered 85 feet of oil column in the Cretaceous sandstones of the Alam El Bueib 3G formation. The well was drilled close to existing production facilities and is already tied-in to production, with a stabilized rate of 5,500 barrels of oil per day.

Following the discovery, two development wells, Arcadia 10 and Arcadia 11, have been drilled back-to-back, the Italian major says in a statement. The first one encountered 25 feet of oil column and the second one 80 feet, within the Alam El Bueib 3G formation. The three wells share the same oil-water contact in the discovered reservoir. Arcadia 11 also encountered 20 feet of oil pay in the overlying Alam El Bueib 3D formation.

“The new discovery adds 10,000 barrels of oil per day to ENI’s gross production in the Western Desert of Egypt”, the company explains.

ENI’s successful implementation of its infrastructure-led exploration strategy in the Western Desert through AGIBA, a joint venture between Eni and Egyptian General Petroleum Corporation (EGPC), allows a quick valorization of these new resources. 

ENI, through its subsidiary IEOC, holds a 38% interest in the Meleiha concession while Lukoil holds a 12% and EGPC a 50% interest.


LEKOIL Asks Shareholders to Rebuff Metallon’s “Attempt to Take Control”

By Macson Obojemuenmoin

LEKOIL has told its shareholders that the requisition by Metallon Corporation, proposing three names to act as directors of LEKOIL, is “no more than an ill-disguised attempt by Metallon to gain control of your Company without paying a price to all shareholders that reflects the intrinsic value of the business and assets of the Company”.

It argues, in the letter, that Metallon is a poorly run gold mining firm with no idea about how to manage the affairs of a hydrocarbon, E&P business.

LEKOIL’s briefing suggests that it has clearly scrutinized Metallon’s financials, and determined that “Metallon has identified LEKOIL’s assets as an opportunity to address its own financial challenges”. If all of Metallon’s Requisitioned Resolutions are passed, LEKOIL’s Board contends, “Metallon’s appointees would represent 50% of the directors on the Board and, if Michael Ajukwu is elected Chairman, they will also have the casting vote. The Board does not believe that it would be appropriate for a c.15% shareholder, to enjoy that level of Board representation and control over the Company”.

Background: On 15 November 2020, LEKOIL received notice from Strand Hanson of its resignation as the Company’s nominated adviser, with effect from close of business on 20 November 2020 (resulting in trading in the Company’s shares being suspended from 23 November 2020). On the same date that Strand Hanson’s resignation took effect, the Company received Metallon’s requisition notice (together with the consent of the three proposed directors to act as directors of the Company).

LEKOIL’s letter is a blistering response to Metallon’s charges, in its requisition, that “a lack of accountability of management by the Board has led to shareholder value being destroyed.”

Metallon had raised the following concerns:

  • LEKOIL has raised over $264Million of equity from shareholders since listing in 2013. The Company’s shares were suspended on 23 November 2020 with a market cap of $13Million.
  • During this period LEKOIL has spent $129Million on General and Administrative (G&A) Expenditure and invested $210Million into Oil & Gas activities but delivered no production growth at Otakikpo (marginal field) since first oil in 2017.
  • The Board has continually missed the market expectations it sets, with production levels at Otakikpo averaging 5,676 barrels of oil per day (BOPD) (gross) in H1 2020, despite setting targets of 10,000 BOPD by 2017 year-end and 20,000 BOPD in 2020.
  • Otakikpo, its only asset generating returns, has been starved of investment whilst G&A and other costs remain at extremely elevated levels.
  • Since its listing, the Board has awarded the CEO a total remuneration of over $10Million, close to the current market capitalisation of LEKOIL. It also recently entered into a related party transaction to extend a material part of the longstanding $1.8Million Directors loan to the CEO at a time when the Company is short of cash.

LEKOIL describes Metallon’s assertion that close to half of the equity raised has been spent on G&A as incorrect. “In fact, of the $275.5Million equity raised since listing in 2013, $166.2Million was invested in capital expenditure for the development of Oil Prospecting Lease (OPL) 310, OPL 325 and Otakikpo, with only $73.3Million (which represents, 27%) going towards G&A expenditure. To date, taking into account all sources of funding for the Company (including debt and proceeds from production), G&A expenditure would represent 28% of total funds raised or generated. Further, the Company would like to clarify that the cash component of the Chief Executive Officer’s total remuneration is $7.9Million over a period of seven years, with the balance in the form of share awards and stock options. The Chief Executive’s total remuneration since Admission of $10.6Million is included in the total G&A expenditure referred to above”.

Metallon became LEKOIL’s largest shareholder after it acquired a 15.10% interest in LEKOIL’s shares between 16 June 2020 and end August 2020. LEKOL’s share price between 1 June and 3 August 2020 ranged between 2.6p and 2.75p. The Company’s share price on the last day before suspension of trading on 20th November 2020 was 1.75p.

“Metallon has been a shareholder for less than six months”, LEKOIL notes. “Shareholders are urged to undertake their own due diligence on Metallon”.

The major areas of significant concern to LEKOIL’s board, “centre on the violation of foreign exchange control regulations in Zimbabwe; winding-up petitions from several creditors leading to a winding up order of the High Court; the distressed state of Metallon’s gold mines in Zimbabwe; and the failure to remunerate employees – all of which are a matter of public record”.

Noting that Metallon has no expertise or track record in oil and gas development, LEKOIL’s board testifies that “Metallon’s gold mining operations have fared poorly over the years and contracted from at least four mines in 2002 to just one operating mine at present”.  The board also charges that “whilst Metallon claims to be a natural resources and infrastructure investment company, it is not apparent from its most recently filed 2018 financial statements that it has interests in infrastructure.

“Prior to its investment in LEKOIL, its only asset was its interest in its Zimbabwe gold mines”.

LEKOIL points to Metallon’s payables as being almost two times its 2018 revenues, going by its annual revenues of $79Million, as; “operating cash flow of $3.9Million would be negative if $51.9Million of overdue payables had been settled. If overdue payables had been settled, Metallon’s operating cash flow would be negative $48Million;  one of the only reasons the company is now considered a going concern given its negative equity, is that it has sales of two subsidiary goldfields in December 2020 (possibly explaining the reason for the very late filing of the 2018 accounts

Metallon says it is categorically not seeking to take control of LEKOIL and is not working in concert with any other shareholders. “We believe LEKOIL’s assets, specifically Otakikpo, are being substantially undervalued by the market and that the value of these assets could be realised if the proposed changes are made to the LEKOIL Board. Since notice of the requisition was given on 19 November, we are aware that a significant number of shareholders have the same concerns regarding the Board’s lack of governance and oversight of management”.


Malabu: ENI’s Descalzi Has Won the Politics, but Can He Escape Judicial Conviction?

By Toyin Akinosho

ENI is wrestling with the request by the Italian Public Prosecutor for conviction of the Company, its former and current CEOs and the managers involved in the Malabu case.

The company says the pursuit of convictions “are completely groundless”.

Mr. Descalzi has held the reins of the Italian E&P major for six years. His appointment, last May, for a third term of another three years by the President of Italy, is clear indication that he has won the politics of the most important challenge to his reputation.

Sergio Mattarella’s government is either convinced  that Desclazi is untainted by the Malabu case, involving alleged corrupt dealing with Nigerian officials in the course of the purchase of the Oil Prospecting Licence (OPL)245, or it would rather have a seasoned technocrat at the helm of its largest energy company to steer the country into the green economy, however smeared that technocrat is.

So, the political arm of the Italian government has signaled that it is comfortable with the 65-year-old, hard-working graduate of Physics from the University of Milan, but the country’s Judiciary has indicated, consistently, that it is not sure he is clean.

The fact that the state prosecutor is still pursuing “a conviction of the current CEO” says a lot about how it is convinced of wrongdoing.

ENI has insisted on its innocence, both in court and in public. “During its indictment, in the absence of any evidence or tangible reference to the contents of the trial investigation, the Public Prosecutor has told a story based on suggestions and deductions as already developed during the investigation. This narrative ignores both the witnesses and the files presented within the two years long and more than 40 hearings proceeding, that have decisively denied the prosecutorial hypothesis”.

Descalzi, who has been ENI’s CEO since May 2014, is on course of being the longest serving CEO of ENI in 30 years, if this case does not stop him.

He joined the company in 1981 as a young reservoir engineer. His career took off in 1994, when he was appointed Managing Director of the company’s subsidiary in Congo. Four years later he was Vice President & Managing Director of NAOC, a subsidiary of ENI in Nigeria. From 2000 to 2001 he held the position of Executive Vice President for Africa, Middle East and China. From 2002 to 2005 he was Executive Vice President for Italy, Africa, Middle East, covering also the role of member of the board of several Eni subsidiaries in the area. In 2005, he was appointed Deputy Chief Operating Officer of the Exploration & Production Division in Eni. From 2006 to 2014 he was President of Assomineraria and from 2008 to 2014 he was Chief Operating Officer in the Exploration & Production Division of ENI. From 2010 to 2014 he held the position of Chairman of ENI UK.

ENI’s press release earlier today, July 22, 2020 repeats the claim it has always made: “ENI and Shell paid a reasonable price for the license directly to the Nigerian Government, as contractually agreed and through transparent and linear means. Furthermore, Eni neither knew nor should have been aware of the possible destination of the money subsequently paid by the Nigerian government to Malabu. Moreover, the payment was made after an inquiry carried on by the UK’s Serious Organised Crime Agency (SOCA).

“So there can therefore be no bribes from ENI in Nigeria, no existence of an ENI scandal. ENI recalls the decision of the Department of Justice and the US SEC, which decided to close its own investigations without taking any action against the company.

“The multiple internal investigations entrusted to international third parties by the company’s supervisory bodies have long since highlighted the absence of unlawful conduct. ENI trusts that the truth can finally be re-established following the defensive arguments that will be presented at the end of September, pending the Milan Court’s forthcoming verdict”.

 

 


Nigerian Bid Round: DPR Says ‘Hold on, We’d Communicate Soon’

Nigeria’s Department of Petroleum Resources (DPR) says it will communicate the next steps of the ongoing bid round of marginal fields soon.

Several of the 500+ companies who have been notified of their prequalification had fruitlessly attempted to access the portal, on Monday and Tuesday, to pay for the next step of the round.

But officials at the regulatory agency told Africa Oil+Gas Report, they were still dealing with matters arising over the pre-qualification process and that access to the portal was closed for now.

The portal itself, on the DPR website, says: “Next step of the bid round to be communicated, soon”.

For the purpose of further payments, the notice on the portal adds: GIFMIS Code for Application Fee: 1000289370 and GIFMIS Code for Bid Processing Fee: 1000289383.

The matters arising that the officials spoke about has to do with the fact that there were companies who could make the qualification, but who are owing government a tax, tariff, fee or the other. A company may have fulfilled all obligations to government, but a director on its board may be a director in another company that is delinquent in paying statutory fees. Prequalificiation of such a company is on hold until the director clears himself.

Companies so affected have to comply by close of business on Friday, July 24, 2020.

In effect, the Nigerian government has taken advantage of the bid round to reclaim some of the debts owed to it.

As an update to our last report, there are no clear schedules for the remaining steps of the bid round, now.  The best thing to do is keep visiting the website of the DPR, https://www.dpr.gov.ng/


Chevron Announces Agreement to Acquire Noble Energy

Chevron Corporation announced today that it has entered into a definitive agreement with Noble Energy, Inc. to acquire all of the outstanding shares of Noble Energy in an all-stock transaction valued at $5Billion, or $10.38 per share.

Based on Chevron’s closing price on July 17, 2020 and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total enterprise value, including debt, of the transaction is $13Billion. The acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio.

The American major says that Noble Energy brings low-capital, cash generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean. Noble Energy also enhances Chevron’s leading U.S. unconventional position with de-risked acreage in the DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow. These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline. We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organizations.”

Transaction Benefits, according to Chevron include:

  • Low Cost Acquisition of Proved Reserves and Attractive Undeveloped Resource: Based on Noble Energy’s proved reserves at year-end 2019, this will add approximately 18 percent to Chevron’s year-end 2019 proved oil and gas reserves at an average acquisition cost of less than $5/boe, and almost 7Billion barrels of risked.
  • Proved reserves to be acquired for under $5 per oil equivalent barrel
  • Delivers $300 million in anticipated annual pre-tax synergies
  • Accretive to ROCE, free cash flow and earnings.

“ This combination is expected to unlock value for shareholders, generating anticipated annual run-rate cost synergies of approximately $300 million before tax, and it is expected to be accretive to free cash flow, earnings, and book returns one year after close,” Wirth concluded.

“The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns,” said David Stover, Noble Energy’s Chairman and CEO. “Over the last few years, we have made significant progress executing our strategic objectives, including driving capital efficiency gains onshore, advancing our offshore conventional gas developments and significantly reducing our cost structure. As we looked to build on this positive momentum, the Noble Energy Board of Directors and management team conducted a thorough process and concluded that this transaction is the best way to maximize value for all Noble Energy shareholders. The release says that

Noble Energy’s assets will enhance Chevron’s portfolio in:

  •  U.S. onshore
  • DJ Basin – New unconventional position with competitive returns that can be further developed leveraging Chevron’s proven factory-model approach.
  • Permian Basin – Complementary acreage that enhances Chevron’s strong position in the Delaware Basin.
  •  Other – An integrated midstream business and an established position in the Eagle Ford.
  • International o Israel – Large-scale, producing Eastern Mediterranean position that diversifies Chevron’s portfolio and is expected to generate strong returns and cash flow with low capital requirements.
  • West Africa – Strong position in Equatorial Guinea with further growth opportunities.

Chevron anticipates the transaction to be accretive to ROCE, free cash flow and earnings per share one year after closing, at $40 Brent.

The acquisition consideration is structured with 100 percent stock utilizing Chevron’s attractive equity currency while maintaining a strong balance sheet. In aggregate, upon closing of the transaction, Chevron will issue approximately 58Million shares of stock. Total enterprise value of $13Billion includes net debt and book value of non-controlling interest.


African Energy Chamber Launches New Energy Jobs Portal

The platform will assist local and international companies in attracting local talent across 30 different skills set in the oil & gas, power and renewable energy sectors

The African Energy Chamber says it has launched a free-of-access jobs portal “in order to maximize the saving of local jobs and assist in the recovery of African energy markets after the COVID-19 crisis,”.

The Chamber says the portal it created with its partners is  for trained and qualified African workforce. “The collaborative platform is accessible at www.EnergyChamber.org/jobs and relays the latest jobs opportunities for Africans across the continent’s energy markets”.

The platform will assist local and international companies in attracting local talent across 30 different skills set in the oil & gas, power and renewable energy sectors. All energy companies operating in Africa are able to post their job offers for free, and these will be relayed on the platform and via the Chamber’s communications channels after approval by the Chamber’s admin and team. The jobs portal will be operated and maintained by the African Energy Chamber in order to avoid all fraud and guarantee the credibility of the offers available.

“Local content has always been the number one priority of the African Energy Chamber when advocating for an energy industry that works for Africans and builds truly sustainable business models. With this new platform, we are getting rid of a lot of entry barriers set on the job market by expensive recruitment agencies. This initiative of the Chamber is non lucrative and we encourage all African and international companies to work with us on boosting local jobs creation to support the recovery of our industry and build true sustainability,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.


AFC Takes Djibouti’s First IPP To Bankability

Africa Finance Corporation has worked up a $63Million strategic investment to construct and operate a 60MW wind project in the Ghoubet area, near Lake Assal in Djibouti.

AFC has made this investment as lead developer together with Great Horn Investment Holdings (GHIH) and inviting further investment from Climate Fund Managers (CFM), and FMO, the Dutch entrepreneurial development bank.

AFC has led the development of the project since 2017, developing it from concept to bankability, securing a 25-year take or pay power purchase agreement with Électicité de Djibouti as the off-taker, an implementation agreement and with the Government of Djibouti backed by a Government Guarantee. The Project also has MIGA guarantee cover. The wind project is expected to begin commercial operations in 2021.

AFC says it adopted, along with its partners, an all sponsor equity financing for this transaction, which enabled the start of construction within two years, a significant reduction from the typical 3-5 years development cycle. As part of this investment, Oliver Andrews, Chief Investment Officer, as well as Amadou Wadda Head of Project Development at AFC, have joined as nominee non-executive directors to the Board of the project and the holding company, Red Sea Power SAS, and Djibouti Wind LP.

Currently Djibouti’s power sector faces significant challenges, with less than 100 MW reliably available for the population. Its electricity demand is also expected to considerably increase due to various large-scale infrastructure projects including ports, free-trade zones and railways that the Government of Djibouti has undertaken.

 


ENERGY TRANSITION: EU Gives €46Million Climate Grant to Egypt, Morocco

The European Union (EU) has approved €45Mllion in grants for several European Bank for Reconstruction and Development (EBRD) programmes for green investments and climate change resilience.

The grants will benefit two countries in North Africa.

€21.1Million is earmarked for Morocco, under the EBRD’s Green Energy Financing Facility (GEFF), set up to support companies and owners wishing to invest in green technologies.

The GEFF programme is implemented through a network of more than 140 local financial institutions in 26 countries, supported by more than €4Billion of the EBRD funding.

In Morocco, the EU grant (via the EBRD) will enable local companies to invest in green technologies. EBRD believes the beneficiaries will reduce their operating costs by implementing climate adaptation measures, energy-efficient technologies and renewable energies, which will also improve their overall competitiveness.

Egypt will receive €24.8Million under the GEFF to support energy efficiency and renewable energy investments through local banks for loans to private companies. The EBRD’s investment should thus support the Egyptian government’s ambition to increase electricity production from renewable sources.

 

 

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