All posts tagged oil-blocks


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.

 

 


Nigeria Plans Hike in Local Content Fees in New Legislation

A doubling of the tariff paid by oil and gas operators into the National Content Fund is one of the key highlights of the ongoing revision of the 10-year-old Nigerian Oil and Gas Industry Content Development (NOGCD) Act in the country’ bicameral legislature.

The document, which has reached its second reading in the Senate, the upper house, proposes an increase, from one percent to two percent, “of every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity or transaction in the upstream sector and designated midstream and downstream projects operation, activity or transaction in the Nigerian oil and gas industry shall be deducted at source and paid into the Nigerian Content Development Fund, established for purposes of funding the implementation of Nigerian content development in the Nigerian oil and gas industry”.  This is the amendment of Section 105 of the original act, which was enacted in 2010.

The new law also seeks to specify what percentage of a company’s gross earnings it must allocate for research and development and goes ahead to mandate companies to fund the country’s research needs. The amendment of  Section 38 says that: ”All operators shall set aside, annually and for the purpose of carrying out research and development activities in Nigeria, minimum 0.5% of the gross revenue received by the operator; The funds set aside under subsection(1) shall be applied as follows (a) fifty percent shall be allocated to Research and Development programmes in Nigeria; (b) Fifty percent shall be applied to research and development activities within the facilities of the operator established in Nigeria.”

The extant law also pays heed to Research and Development R&D, but neither decrees how it is funded, nor determines how much of a company’s earnings must be set aside for funding.

It simply states, in the same section: “The operator shall submit to the Board and update, every six

months, the operator’s Research and Development Plan (R and D Plan). (2) The Rand D Plan shall-

(a) outline a revolving three to five-year plan for oil and gas related research and development initiatives to be undertaken in Nigeria, together with a breakdown of the expected expenditures that will be made in

implementing the R and D Plan; and (b) provide for public calls for proposals for research and development

initiatives associated with the operator’s activities”.

The introduction of administrative sanction in Section 68 is another amendment that sticks out. In this proposal, the influence of the National Content Development Monitoring Board (NCDMB) has been expanded to include prosecutorial powers.

It says:  “A person who submits a plan, returns, report or other document and knowingly makes a false statement, commits an offence and shall be liable to administrative sanction which may include a fine of not more than five percent of the project sum, cancellation of the project or any other sanction as may be prescribed by the Board.  A person who submits a plan, returns, report or other documents and knowingly makes a false statement, and fails to provide satisfactory reason for the violation shall be liable to administrative sanctions including cancellation of project, withdrawal of certificates or any other sanction as may be prescribed by the Board.”

The story was earlier published in the June 2020 edition of the Africa Oil+Gas Report

 


Cameroon’s Gas to Power Market in Distress

By Sully Manope

The Cameroonian electricity company ENEO (Energy of Cameroon), has announced a 32.6% drop in the production of thermal power stations in the country in the first quarter of 2020.

The reduction (compared with production during the same period in 2019), was due to rationing carried out “at some power stations because of a fuel shortage caused by enormous cash constraints.

ENEO has been unable to pay companies that supply gas to its generators (including Victoria Oil &Gas) as well as companies that generate power from natural gas (Globeleq, Aggreko).

Altaaqa, which supplied the generator ENEO used to convert gas to electricity at Logbagba, in Douala City, suspended operations at ENEO’s Logbaba site in September 2019.

Production capacities at Aggreko operated generating plants at Maroua and Bertoua decreased by almost 60% during the period under review, ENEO reports. Generation from Globeleq operated Kribi and Dibamba gas-fired plants also fell drastically.

This drop in thermal energy production, was, very slightly, offset by increased hydropower production, which had an uptick of 3%.

Overall, the Song Loulou and Edéa hydroelectric plants, both on the Sanaga River, provided 65% of Cameroon’s energy supply over the period.

 


FAR Signs New JOAs, But Struggles for Partner to Fund the Next Gambian Well

Australian minnow, FAR, has reported “efforts to find an additional partner for the drilling of the next well in The Gambia”.

FAR is still smarting from the dismal results of the Samo-1 well, drilled in offshore Block A 2 in late 2018. The first exploratory well to be drilled in the Northwest African country in  40 years, Samo-1 was a dry hole.

The company signed new Joint Operating Agreements (JOA’s) in respect of the A2 and A5 Blocks, with the Malaysian state hydrocarbon company f Petroliam Nasional Berhad, PETRONAS).

This follows the granting of new Licences for those Blocks by The Government of The Gambia effective October 1 2019, after which FAR and PETRONAS took the opportunity to update the terms of the existing JOA’s by entering into new JOA’s with effect from 1 October 2019.

FAR remains as Operator under the new JOA’s which better reflect the terms of the new Licences.

FAR says it has “run numerous data room presentations for interested parties” and it is “working to conclude a farm-out before the restart of the drilling operations”.


Gasoline Prices Rise in Ghana, Kenya

Gasoline prices have risen in Kenya by Kenyan Shilling (Sh)5.77 higher per litre, while diesel and kerosene prices dropped by Sh3.80 and Sh17.31 respectively in changes announced by the Energy and Petroleum Regulatory Authority (EPRA) a week ago.

A litre of petrol will cost Sh89.10 per litre in Nairobi, the capital city, an increase from the current Sh83.33 while that of diesel will be sold at Sh74.57. Kerosene will retail at Sh62.46 per litre in the city.

“The changes in this month’s prices are as a result of the average landed cost of super petrol increasing by 31.54% from $188.7 per cubic metre in April to $248.21 per cubic metre in May 2020, diesel increasing 5.58% from $242.13 per cubic metre to $228.62 and kerosene decreasing by 51.84% from $262.44 per cubic metre to $126.39 per cubic metre,” says Pavel Oimeke, EPRA Director General, in a statement.

In Ghana, over the weekend of June 19-21, Shell and Goil, two of the country’s largest Oil Marketers, increased their prices by 4% percent, in addition to the 8% bringing the total increase to about 12% within a week.
But the Executive Director of Ghana’s  Institute of Energy Security (IES), Paa Kwasi Anamua Sakyi, says
other Oil Marketers were unlikely to increase their prices to match Goil and Shell at the pump, r due to competition for market share.

The combined Increase in the depreciation of the local currency Ghana Cedi against the US dollar, the world’s major trading currency, added to the rise in prices of crude oil in the international market, have put pressure on the pump prices in Ghana, the IES says.

Local Kenyan media explain that the recovery on the international crude oil market, “now reverses three months of a steep drop in prices that saw the product sell Sh18 per litre cheaper in April 2020.

They also attribute the marginal drop in diesel prices to “lower demand as summer catches on and the need for heating falls in Europe and America while kerosene, which falls in the same class with Jet A1, lost demand due to the grounding of air travel.

The Energy and Petroleum Regulatory Authority said the changes in the pump prices came as a result of shifts in landed costs of the three products, which decreased for diesel and kerosene and rose for petrol.

The Kenyan government in September introduced a Sh18 per litre adulteration levy on kerosene to discourage its use as an adulterant by a fuel cartel who targeted the wide price margin between kerosene and diesel to make millions.

 


COVID Will Not Stop First Oil From Senegal in 2023

Australian explorer Woodside Petroleum insists that COVID-19 would not stop it from reaching first oil from the Sangomar Field Development Phase 1 by 2023

The first oilfield development in Senegal “remains on track for 2023, in line with previous guidance”, Woodside declares.

“Woodside and its joint venture partners took an unconditional final investment decision for the Sangomar Field Development Phase 1 and commenced execution phase activities in January 2020”, the company explains.

“Since then, Woodside has taken early action to proactively manage the emerging impacts of COVID-19 on the supply chain and project schedule. We are working with project contractors, the Government of the Republic of Senegal and our joint venture partners to optimise near-term spend whilst protecting the overall value of the investment and deliver first oil in 2023”.


Foretelling Winners and Losers in Nigeria’s High-Stake  Marginal Field Bid Round

By Dimeji Bassir

The Nigerian government, obviously betting that its estimated 2.3Billion barrels of discovered but mostly unappraised crude oil reserves across 183 fields considered marginal are peculiarly coveted, launched the 2020 Marginal field bid rounds at the end of May 2020. The fee structure as published in the advertised bid guidelines suggest the exercise is a desperate move to raise capital by a government on the verge of a second recession in five years. Pundits, however, believe the timing for the bid round could not be more inauspicious given the global pandemic that has thrown the world into severe health and economic crisis. With resource ownership and production dominated by the five major International Oil Companies (IOCs) operating in the country, the government in 2003 formally transferred ownership of 24 fields to Nigerian companies following the 2003/4 marginal field bid round and between then and now have approved the transfer of $10Billion worth of assets from IOCs to a slew of homegrown independent companies, who are mostly well-positioned to benefit from the ongoing bidding exercise.

A recent Africa Oil+Gas Report newsletter article, quoting unnamed sources at the ministry of petroleum resources, reports that up to 500 companies are expected to have applied and paid the fixed registration fee of Five Hundred Thousand Naira by the new June 21 registration deadline. Six out of the seven statutory fee categories are field-specific thus variable, growing incrementally depending on how many fields a participant is bidding for. A bidder who has narrowed down to and bidding for only one field must part with approximately $125,000 to progress to the stage of signature bonus. The asking amount for signature bonuses was not disclosed in the bidding guidelines contrary to what obtained in the past. A successful bidder must confirm willingness to pay the signature bonus upon selection and before the award of the marginal field. While the process is planned to be conducted 100% electronically, how this will pan out in reality remains to be seen. In the period since the bid round was launched, some prospective bidders have complained of inability to access the registration portal. Previous bidding processes in Nigeria have been fraught with political interference and nothing in the current political climate in Nigeria suggest there will be a departure from status quo this time.

Challenges: Setting aside the widespread enthusiasm by participating stakeholders momentarily, the sub-optimal performance shown by the majority of licensees from the 2003/4 class should evoke some caution. For a number of reasons but mostly due to funding challenges, no more than 50% of the marginal fields awarded in Nigeria have produced hydrocarbon, leaving observers pondering how successful bidders hope to attract capital as sources of funding for fossil fuels thin out across the globe. On their side, local banks who have shut their purses primarily due to over-exposure to the sector, draw little inspiration to further invest in this round at a time when unprecedentedly, the credit rating of giants like ExxonMobil has been downgraded by S & P due to its anaemic cash flow position thereby impacting the company’s ability to fund its capital projects and continue to pay dividends as the industry witnesses its bleakest outlook in history.

Among the class of 2003, approximately 47% of those licensees that attained production partnered with foreign entities, at one point or the other in their development journeys with 23% funded through financing and technical services partnerships with international players. Notably, 55% of gross daily liquid production from marginal fields comes from assets initially funded by foreign entities. This fact assumedly raises a glimmer of hope that if replicated, the model of seeking avenues to partner with foreign entities under similar arrangements could bode well for current bidders.

Other areas that could pose challenges down the line to undiscerning participants in the current bid round pertains to potential issues surrounding enforceability and bankability of contracts between the licensee, who enters into a farm-out agreement with the main lease owner, effectively as a sub-lessee. The parameters of the terms of the farm-out agreement which ideally must thoroughly address obligations of parties regarding issues such as overriding royalty to the farmor, crude handling prioritization & lifting costs, how to handle pipeline losses, abandonment & decommissioning, resolution of unitization where applicable etc. could potentially become contentious. Aside from the reality of restiveness in some areas of the Niger Delta, which portends risk for those that will operate in those communities, certain fields included in the basket are potential candidates for litigation as the government had revoked licenses from previous lessees in controversial circumstances.

Potential for Upsides: Marginal fields by definition are technically and economically challenged assets that typically haven’t met the development criteria of the IOCs who discovered them. Decisions made and the strategy adopted at the bidding stage invariably predicts future outcomes post-bid and drives an asset’s overall performance as well as underpins the ability to effectively de-risk the ensuing development project to maximize commercial value from the asset. A delicate balance must be achieved to effectively manage the competing philosophical considerations that will drive the most prudent risk-balanced FDP approach; the wisdom to achieve early, albeit relatively minimal cash flow timeously and most cost-effectively versus a full-blown, costlier and seemingly more lucrative development strategy. The upsides realizable centers on taking a life-cycle view during bidding, ensuring that consideration is given to depletion beyond primary recovery. Looking at assets deemed marginal, the prudent approach is to advocate key technologies, multiple depletion strategies and the timing of implementation to be incorporated in the field’s life cycle plan and road-map. Having a life cycle plan and road-map allows for optimal facility planning to accommodate technology application geared towards maximizing economic URF. The eventual goal, of course, is to maximize the value of the full hydrocarbon stream.

The self-healing nature of crude oil cycles infers some optimism that current effort to stimulate supply deficit through agreed production cuts will yield results in short order. Pending the restoration of oil prices to pre-COVID 19 levels, the prevailing environment where demand remains relatively depressed could offer some advantages – reduced baseline costs to procure services, that typically trails oil price, should motivate operators to develop projects through this slump and be positioned to reap in the upside when the cycle adjusts in a couple of years.

Winners and Losers: The federal government has clearly placed its bet on a robust subscription in this bid round. However, there are no indications that learnings from the historical performance of previous awardees have been incorporated into the thinking in order to influence better outcomes for the program. If the only driver for launching the round, as it appears, is for the government to raise capital from signature bonuses, then the government’s outlook is at best myopic.

As stipulated in the bid guidelines and consistent with what obtained historically, pressures on successful licensees to ” develop or lose ” amidst potential government-imposed bottlenecks, fiscal uncertainties as PIB remains unpassed, as well as other challenges earlier outlined pose significant headwinds which fundamentally threatens the achievement of the marginal field program’s theoretical objectives. With minimal long-term value creation for stakeholders, the crushing legacy of serial losses underwhelms the lofty ideals behind the marginal field programme.

Bassir is Chief Executive, Ofserv, an E&P service company with expertise covering a broad range of services across the Drilling & Facilities Maintenance domains.

 


PAID POST: Global E&P: National Regulators Meet With IOCs Online  

IN-VR is organising the Global E&P Summit on July 2nd, taking place completely online. For the first time ever, 16national oil & gas ministries, regulators and NOCs are gathering online to ​promote their available E&P global opportunities to IOCs and service providers from all over the world.

The biggest online E&P event of the year

Meet with hundreds of IOCs and service providers at the biggest online oil & gas event to ever take place. Book private meetings, network, and find the latest news on Licensing Rounds, discoveries, and tech updates

Listen to presentations from ​Brazil, Namibia, Timor-Leste, Ghana, Morocco, Peru, Argentina, Benin and many more authorities on the same stage for the first time. The countries will discuss their success, challenges and new opportunities after COVID-19.

Promote your company to IOCs and service providers from all over the world looking to prospect and expand their business.

Who is presenting at the Global E&P Online Summit?

  • ANP, ​Brazil
  • Ministry of Energy, ​Ghana
  • Ministry of Mines and Energy, ​Namibia
  • Ministry of Petroleum and Mineral Resources, ​Somalia
  • Gabon Oil, ​Gabon
  • ONHYM, ​Morocco
  • Perupetro, ​Peru
  • ANPM, ​Timor-Leste
  • CUPET, ​Cuba
  • SOBEH, ​Benin
  • Ministry of Energy,​Sao Tome and Principe and many more​, soon to be announced!

Three stages, more than 60 topics

With hundreds of VIPs, officials from 16 countries, and 12 hours of non-stop streaming, you will have the option to choose the session you are most interested in watching and participate in it, before having private meetings. All three stages will be hosting sessions with different topics, discussions, Q&As and presentations on: onshore and offshore available acreage, upcoming Licensing Rounds in 2021, latest E&P technology advances, farm-in opportunities and many more.

Join us ​here​.

For further information please visit:

https://www.in-vr.co/global-ep

Or contact: felix@in-vr.co

 

 

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