All posts tagged petroleum people


Yetunde Taiwo Takes Charge of Seplat’s ‘New Energy’ Portfolio, with the Gas Business

Yetunde Taiwo has been appointed the General Manager for New Energy at Seplat.

It is a position that comes with the company’s Gas Business, which she had managed before, so it’s an expanded portfolio.

Seplat is Africa’s largest homegrown E&P company.

Until January 2021, Taiwo was Chief Executive Officer of the ANOH Gas Processing Company (AGPC), the incorporated Joint Venture owned equally between Seplat and the Nigerian Gas Company (NGC), which manages a $700Million midstream development that will monetise 300Million standard cubic feet produced every day from the Assa North /Ohaji South fields, straddling Shell operated Oil Mining Lease (OML) 21 and Seplat operated OML 53, onshore eastern Nigeria.

Taiwo took the AGPC job after three and half years as the first GM Gas (or Head of Gas Business as it is called), where she oversaw the development of one of the fastest growing domestic gas businesses in Nigeria.  On her watch, Seplat grew its operated gas production capacity from 300Million standard cubic feet per day (300MMscf/d) to 525MMscf/d.

Her new role of superintending the New Energy unit involves the increase of gas products to be monetised in the form of LPG, CNG and other gas derivatives, with opportunity framing in the renewable energy space. “A different set of skills is required to get into renewables”, Roger Brown the company’s CEO, told London South East last November, but he added that the New Energy unit, would provide guidance for the company.

“We are looking at LPG, Liquid Petroleum Gas on all of our gas plants and that can be utilised in the local market”, Mr. Brown told London South East. “We’re looking to Compress Natural gas (CNG) and, we are looking further down the value chain potentially into supplying smaller scale, probably not retail but certainly, smaller scale wholesale and customers. And then, through that, we look at what renewable energy means for Nigeria into the future and it’s got huge potential, particularly, in solar. We’ve got a lot of the sun all year round here. That will be a great renewable fuel source for the country. And what we really want to do is that we need to get the grid system up to a level we are having more of the gas going through it and then, the grid will rely on grids solar power rather than, off grid small scale. So that’s something we are looking at”. That statement, effectively framed Mrs. Taiwo’s key job responsibilities

Taiwo started her career as a reservoir engineer with Chevron Nigeria Limited in 1991, straight from National Youth Service. By the time she left the American major, for BG, in 2007, she was a planning advisor at the company’s Asset Management Division. She worked for BG as Economics manager before she showed up at Seplat in May 2011 as head of planning and economics. She joined NNPC, the state hydrocarbon company, in 2013, as General Manager, Planning at NAPIMS, the Investment arm. She was appointed head of Gas Business when she returned to Seplat in 2015.


Gbite Falade is Niger Delta’s New CEO

Niger Delta Exploration & Production PLC (NDEP Group) has announced the appointment of a new Chief Executive Officer (CEO) – Managing Director with effect from 10th February 2021.

Adegbite (’Gbite) Falade will join the company, bringing along some Twenty-five years of impactful and successful career across multiple sectors and continents in the energy Industry, according to a statement by Ladi Jadesinmi, NDEP’s Chairman of the board.

NDEP is a fully Integrated Energy Company which operates the 12,000Barrels of Oil Per Day (BOPD) Ogbele Marginal field, Nigeria’s first officially designated marginal field, in eastern Niger Delta basin. It runs an 11,000BOPD capacity three train modular crude oil refinery as well as a 100Million standard cubic feet per day gas processing plant, which delivers gas to the NLNG system.

“Gbite will succeed the pioneer Managing Director – Layi Fatona (Ph.D.)- who in an Interim position, had supported the running of the affairs of the company from October 2019”, Mr. Jadesinmi’s statement added.

“A First Class B.Sc. Electrical & Electronics Engineering (1995) degree graduate of the University of Ibadan, and a 200B MBA graduate of the Warwick Business School, Coventry, UK; Gbite has in the past Fourteen (14) Years, served in various Senior Executive positions in Oil, Gas, Power, and Services Sectors. With responsibilities for Engineering, Operations, Project Execution, Commercial, Client and Stakeholder Management, Strategy and Enterprise Development.

“He was previously the MD and Group COO at OilServ Group of companies based in Port Harcourt.  Prior to his last assignment, he served variously, as GM-Portfolio Development, Chief Operating Officer (COO), at Oando Energy Resources„ and Executive Director at Oando Gas and Power. He was also Petroleum Economics Discipline & Portfolio Lead for Shell EP, Africa Region”.

With the nimble and proven Technical management team, the chairman concludes: “a young but competent operating workforce and a matured Board of Directors, Gbite will be charged with leading the company, in a well charted and structured manner, to deliver the continuation and indeed enhancement of our historical steady growth”.

“We are confident that our position as Nigeria’s No-1fully Integrated Energy Company will remain, unchallenged and preserved for quite some time yet”.

 

 

 


Accugas Agrees to Supply 2.5MMscf/d of Gas to Mansour Group

By Foluso Ogunsan

Nigerian natural gas supplier Accugas has entered into a new gas sales agreement (GSA) with Mulak Energy Limited.

Accugas is a subsidiary of Savannah Energy PLC, the British independent.

The GSA is initially for a seven-year term. It envisages the supply of gas produced by Savannah’s majority-owned Uquo field for an initial two-year period on an interruptible basis (the “Interruptible Gas Delivery Period”) and the subsequent five years on a firm contract basis (the “Firm Delivery Period”). During the Interruptible Gas Delivery Period, Mulak is able to nominate a maximum daily quantity of up to 2.5 MMscf/d (MMscf/d means Million standard cubic feet of gas per day).

Volumes in the Firm Delivery Period will be agreed by the parties before the end of the Interruptible Gas Delivery Period.

The GSA is priced to reflect Mulak’s status as an industrial customer; Accugas, therefore, expects to see its weighted average gas sales price realisation increase as a result of this contract, without the need for any incremental capital expenditure beyond our previously announced plans.

Sales under the GSA benefit from a bank guarantee arrangement from an investment grade credit rated international bank.

Mulak is a member of the Mansour Group, an Egyptian multinational conglomerate which claims operations in more than 100 countries and annual revenues exceeding $7.5Billion.

Mulak says it initially plans to distribute CNG to its industrial customers in Rivers State with the CNG to be substituted for diesel in generators supplied by the Mantrac Group, also a member of the Mansour Group and one of the world’s largest dealers in Caterpillar machinery, power systems and equipment.

“Mulak is in a unique position to exploit the synergies with Mantrac’s business in Nigeria through the conversion of Mantrac’s existing customer base of approximately 400MW of diesel-fuelled generators to CNG-fuelled generators”, Accugas says in a release. “Sales under the GSA are expected to commence in 2022 and, following the initial two-year period, Mulak has indicated that it is seeking to expand its CNG sales on a pan-Nigeria basis to Mantrac customers”.

 

 


Morocco’s Tender for 400MW Solar Project Ends January 31

Submissions for Morocco’s tender for the construction of the first phase of the Noor PV II complex will wrap up on January 31, 2021.

Moroccan Agency for Sustainable Energy (MASEN) called for expressions of interest (EOIs)  for the 400MW project in 2020.

Noor PV II Solar complex involves six locations: Sidi Bennour (48MW), Kelaa sraghna (48MW), Taroudant (36MW), Bejaad (48MW), El Hajeb (36MW) and Ain Beni Mathar (184MW). The given capacity is in direct current (DC).

Winning bidders will be announced in the second quarter. The contracts are due to be signed in the third or fourth quarter of 2021.

Morocco’s Noor solar programme was introduced back in 2009 with the goal of adding at least 2,000MW of solar PV across the country, supporting the Kingdom’s target of growing the proportion of renewables in its installed power mix to 52% by 2030.

Construction of the first phase of the project – Noor I – began in 2013, and reached completion in 2016. On 4th February 2016, King Mohammed VI chaired the commissioning ceremony at the first plant, and officially launched the construction of phase II and III of the solar complex.

While Noor I and Noor II use concentrated solar power (CSP) technology to generate electricity with the help of 12-metre-tall mobile parabolic mirrors, Noor III will introduce a technological variation of CSP technology, by using a solar tower. The fourth phase will use photovoltaic technology.


John Anis is M&P’s New Chairman of the Board

Maurel et Prom (M&P) has announced the appointment of John Anis as Chairman of the Board of Directors

He is the second Chairman since the company, originally a French owned independent, was bought over by Pertamina, the Indonesian state hydrocarbon company.

“He replaces Aussie Gautama, who wished to step down from his positions”, the company statement declares. Mr. Gautama spent four years as Chairman.

Anis’s daytime job is President Director at Pertamina Internasional EP. “He has more than 25 years of experience in the oil industry, in particular holding senior positions at TOTAL E&P Indonesie and the Indonesian group Pertamina”, the statement explains. “He will bring his vision and knowledge to support M & P’s development, working closely with Olivier de Langavant, Chief Executive Officer”.

M & P is a key natural gas producer in Tanzania. It is one of the largest shareholders in Seplat, the leading Nigerian independent and a sizeable producer of crude oil in Gabon.

 


The Three – Service Sector- Musketeers of the Energy Transition: The Emerging Energy Value Chain

By Gerard Kreeft

 

 

 

 

 

 

 

 

All- For-One; One-For-All

Musketeer 1 Oilfield Services

Musketeer 2 New Energy Service Companies

Musketeer 3 Energy Service Companies Africa

There is growing evidence of a new convergence between Musketeer 1 Oilfield Services  and Musketeer 2 New Energy Service Companies. 

Perhaps not so much convergence but cross-overs and falling by the wayside of others and in the process creating new alliances.

Little attention has been paid to Musketeer 3- Energy  Service Companies Africa- perhaps viewed as the junior musketeer, but nonetheless playing a significant role.

Their- All- For-One; One-For-All requires  further explanation.

Peak Oil and What to Anticipate From the Majors

Rystad Energy is a preminent independent energy research and business intelligence company, headquartered in Oslo, Norway.

The COVID-19 pandemic, according to the company, has accelerated the global peak demand for oil to 2028, instead of 2030 and cut peak oil demand to 102Million Barrels Per Day. This corresponds with BP’s peak oil analysis of 2025 and demand of 100MMBOPD.

Nonetheless, Rystad  calculated that oil demand,  in 2020, declined to 89.3MMBOPD, compared with 99.6MMBOPD in 2019. This is now termed “COVID-19 induced demand destruction”.  It is only in 2023 that demand will recover to pre-Covid-19 levels and jump back to 100.1MMBOPD.

There is also little evidence from the oil and gas majors to indicate that there will be a quick recovery. In 2021 the sector’s growth in Africa will be halting and slow:

ExxonMobil: Deepwater Offshore Guyana,  Rovuma LNG Mozambique are the company’s key challenges. Expect little else and no plans on renewables.

Chevron: Only $1.5Billion dedicated to possibly Angola, Equitorial Guinea and Nigeria. Attention is focused on Tengiz, Kazakhstan which is receiving 75% of Chevron’s budget outside the USA. Only fossil-based investments.

Equinor: Attention is largely  being devoted to expanding its offshore windpark capacity, all outside Africa.

ENI: With its large African footprint in Angola, Nigeria and Egypt the company is in prime position to expand its African operations. Green energy plans are being made.

Shell: reducing its oil and gas assets to 9 key hubs which includes Nigeria. Green shoots on the horizon.

TOTAL: its Brulpadda and Liuperd (Leopard) prospects in South Africa, together with its Mozambique LNG project will be the focal points in 2021. Little room for further plans. Green plans play a strategic role.

BP: intends to reduce its oil production by 40% .How will this affect the Greater Tortue Ahmeyim  development in Mauritania and Senegal, its Algerian, Angolan and  Egyptian assets? The first green plans are being unveiled.

Musketeer 1 : Oilfield Services

Global demand for oilfield services (OFS), measured in the total value of exploration and production (E&P) company spending, has in 2020 dropped a massive 25% as a result of the Covid-19 caused oil demand destruction, According to Rystad.

Spending in 2020 is at year’s end expected  to be $481Billion and take the first step to recovery will take place in 2021.

“The recovery will accelerate further in 2022 and 2023, with OFS spending by E&Ps reaching some $552Billion and $620Billion, respectively. Despite the boost, purchases will not return to the pre-COVID-19 levels of $639Billion achieved in 2019.”

 

Audun Martinsen, Rystad Energy’s Head of Energy Research, argues that the comeback will not be visible across all OFS segments. Well services and the pressure pumping market will be the first to see a boost, while other markets will need to get further depressed before recovering.

“Despite the recovery in oil prices, it will take many quarters before all segments of the supply chain see their revenues deliver consistent growth. In case of an upturn, operators would prefer flexible budget items with production increments and high-return investments with short pay-back times. Therefore, we expect well service segments to be the first to recover, while long-lead segments will pick up much later.“

  • Maintenance and operations: is poised for consecutive yearly rises in the next three years after slumping to $167Billion this year from $202Billion in 2019.
  • Well services and commodities: is set for a similar recovery, but only after slumping to $152Billion in 2020 from $231Billion in 2019 – the biggest decline among segments in absolute numbers.
  • Drilling contractors: falling to $46Billion in 2020 from $62Billion in 2019, and then rising to $57Billion in 2023.
  • Subsea segment: will fall from $25Billion in 2019 to $22Billion in 2021 – before starting to rebound to $24Billion in 2022 and to $29Billion in 2023.
  • EPCI: fell to $81Billion in 2020 from $105Billion in 2019, sliding further to $74Billion in 2021, before rising back to $81Billion in 2022 and growing to $106Billion a year later.
  • Seismic: declined to $12Billion in 2020 from $15Billion in 2019, dropping to $10Billion in 2021, before rebounding to $11Billion in 2022 and to $13Billion a year later.

The Players- BakerHughes, Halliburton and Schlumberger

Baker Hughes, Halliburton and Schlumberger, the traditional giants of the service providers, have experienced a long trek through the wilderness. Is relief on the way? A mixed bag.

Their stock prices have tanked: in December 2016 Baker Hughes’s share price was $65, now December 2020, it was $21; Schlumberger in December 2016 was $85, December 2020 it had dropped to $21; Halliburton in December 2016 was $55; in  December 2020 it was $19.

81,000 jobs have been lost since November 2019, to go by the report of the Petroleum Equipment and Services Association  (PESA).  In a recent forum PESA President Leslie Beyer stated: “The majors are making carbon reduction and setting net zero goals. Then they’re turning to their OFS sector partners and saying, ‘How are you going to help us get there?’”.  How indeed!

The strategies of both Halliburton and Schlumberger are defensive and show little reason for optimism:

Halliburton on its website talks about further digalization of its services, lower capital intensity and being committed to provide technologies that reduce emissions/environmental footprint.

Olivier Le Peuch, Schlumberger’s CEO, recently announced a major strategic restructuring creating four new divisions- Digital & Integration, Production Systems, Well Construction, Reservoir Performance.

Within the confines of the E&P bubble both major service companies continue on with what they anticipate what the IOCs (International Oil Companies) are dictating: belt tightening, a reduced head count, with the hope for a better tomorrow. Simply re-shuffling the deck chairs on the Titanic.

The one exception is Baker Hughes who has recently unveiled a forward looking strategy focused on CCS (Carbon Capture Storage), Hydrogen, and Energy Storage. Key themes for the Energy Transition.

The Drillers

Hans Hagelberg, Bassoe Offshore, has estimated that in the last 12 months the offshore rig fleet has lost almost 42%, or $30Billion of its total value. A large portion of the global fleet is now cold stacked. Of the 103 cold stacked, 94 have been stacked for 12 months or longer.

West Africa has been one of the hardest hit areas in 2020, according to IHS Markit: the region saw 11 contract cancellations from March to July 2020, the most of any area. Most of those cancellations were associated with jackups.

Jackup utilization in West Africa fell from 71% in September 2019 to 29% in September 2020, while drillship utilization fell from 48% to an abysmal 19% in the same time frame, according to Bassoe.

Dayrates for drillships in West Africa are currently between $150,000 and $200,000 per day, while jackups currently sit between $70,000 and $90,000. Looking to 2021, Teresa Wilkie, Offshore Rig Market Analyst, Bassoe,  rig utilization in West Africa is likely to stay flat, unless there is a marked increase in oil demand. With rig oversupply set to continue in the region, she expects dayrates to remain at the same level in 2021; further reductions are unlikely as the current rates are around operating cost level.

Marine Contractors- Two  key players- TechnipFMC & Heerema

Marine contractors have not been sitting idle. They are demonstrating adaptation and innovation.

The 2017 merger of Technip and FMC featured distinct market segments: subsea, onshore and offshore and surface projects. Now Technip Energies- entailing LNG, sustainable chemistry and decarbonization- is being spun off, creating new innovative options.

Arnaud Pieton, President and CEO of Technip Energies, says that the company is well placed to produce green hydrogen, given  that some  270 plants worldwide have their origin with TechnipFMC.  A strategic alliance with McPhy, a builder of electrolyzers, is expected to help enhance the production of green hydrogen. 

Heerema, which had its own enormous fabrication yard in Angola,  recently announced that it shut down operations citing poor  market conditions and sustained low oil price.  Instead the company is investing in the Offshore Wind Sector.

Heerema Marine Contractors recently signed a contract  to support the construction of the Changhua Windfarm Phase 1 project, Offshore Taiwan. Heerema will take on the installation of 21 jacket foundations (4 legged) for the Changhua project.

Musketeer 2 New Energy Service Companies

Siemens Energy

Siemens Energy has operations in 90 countries offering a full project cycle of services: generation, transmission and storage from conventional to renewable energy. Two examples:

  • Service center and a training academy in Egypt. The service center is the first of its kind in the region, combining a repair center, a tooling center and a spare-parts warehouse under one roof; and
  • Siemens Energy will supply six SGT-800 industrial gas turbines to the Mozambique LNG Project that will be used for low-emissions onsite power generation.

Cummins

Cummins operates in 51 countries in Africa and market leader in fuel cell and hydrogen production technologies. Cummins began developing its fuel cell capabilities more than 20 years ago.

In 2019 Cummins purchased Hydrogenics, a leader in hydrogen technology. This accelerated Cummins’ ability to further innovate and scale hydrogen fuel cell technologies across a range of commercial markets.

Two examples of Cummins’s presence in Africa:

  • Cummins Angola operations, which is a joint venture partnership with Angolan ProjectNet. Cummins Angola currently occupies 1,000-square meters of office and parts outlet space, as well as 1,750-square meters of rehousing.  Cummins is working closely with the Angolan government to maximize the Private Public Partnership Framework to invest in the energy sector.
  • Cummins has supplied a power solution based around four of its 630 kVA generator sets to Standard Chartered Bank in Ghana. The system will provide the bank’s head office in Accra with standby power whenever interruptions to the grid supply require it.

ITM Power

ITM Power Plc designs and manufactures products which generate hydrogen gas, based on Proton Exchange Membrane (PEM) technology. This technology only uses electricity (renewable) and tap water to generate hydrogen gas on-site and can be scaled  up to 100MW+ in size.

Two examples:

  • The REFHYNE project to be installed and operated at the world’s largest hydrogen electrolyser at the Shell Rhineland Refinery in Wesseling, Germany.The PEM electrolyser, built by ITM Power, will be the largest of its kind to be deployed on a large industrial scale.
  • HyDeploy the £6.8Million project, funded by Ofgem and led by Cadent and Northern Gas Networks, UK, is an energy trial to establish the potential for blending up to 20% hydrogen into the normal gas supply to reduce carbon dioxide emissions. HyDeploy will run a year-long live trial of blended gas on part of the University of Keele gas network to determine the level of hydrogen which could be used by gas consumers safely and with no changes to their behaviour or existing domestic appliances. ITM Power is supplying the electrolyser system.

Musketeer 3: Energy Service Companies Africa

Musketeer 3 has huge challenges if Africa is to be lit up by 2025. The African Development Bank envisages:

  • 160 GW of new capacity for On-grid generation;
  • 130Million new connections for On-grid transmission and grid connections;
  • 75Million connections for Off-grid generation, an increase 29 times more than what Africa generates today;
  • Access to clean cooking energy for 130Million households.

There is a strong need to enhance the capability of Musketeer 3- Energy Service Companies Africa- to build coalitions across the sector and the region,  including the oil and gas and the renewable sector.

Some examples

  • Clean Energy Corridor which aims to support integration of cost-effective renewable power options to national systems, promote its cross-border trade and support creation of regional markets for renewable energy. The Clean Energy Corridor initiative has two African components:   (1.) African  Clean Energy Corridor(ACEC) for the member countries of Eastern and Southern African power pools.  (2.) West African Clean Energy Corridor(WACEC) within the Economic Community of West African States.
  • Partners should also include National Governments and their National Power Companies, including companies from Asia, Europe, the Americas, and the Middle East.
  • Finally this should include the oil and gas sector accustomed to carrying out large -scale projects. Providing them an opportunity to participate and be a partner in renewable energy.

The increased speed of the Energy Transition is not necessarily good news for Africa. The greening of Europe by the  majors could  mean reducing oil and  gas activities in Africa.

Why? Simply because the oil and gas majors are choosing  low carbon prospects and natural gas projects on a massive scale  leaving many potential prospects in doubt. Other smaller oil and gas projects will not be treated so kindly.

How will oil and gas prospects in Africa be judged? Do the various governments have the management skills to properly assess their energy scenarios?

Do they have the technical knowledge, capability and expertise to manage and implement oil and gas projects?

Then there is the matter of developing national service companies which have the technical capacity and knowledge to implement projects.

Conclusions

  1. Musketeer 1- Oilfield Services is in the sunset of his youth. Oilfield Services will continue but in a diminished marketplace. With the majors cutting back their oil and gas investments there is little room for optimism. Halliburton and Schlumberger must seriously re-examine their energy scenarios. Baker Hughes is showing investors that they have a Plan B.  Also the marine contractors- both TechnipFMC and Heerema- are making bold energy transition moves.
  2. Musketeer 2- New Energy Service Companies are defining the energy transition. Siemens Energy, Cummins and ITM Power are examples of new companies delivering energy systems for a renewable world.
  3. Musketeer 3- Energy Service Companies Africa could well become an alliance of national oil and gas companies, power companies and service companies in order to meet the requirements of the energy transition. They could well receive assistance from Musketeer 2-New Energy Service Companies.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil+ Gas Report.

 

 


Shaky Before the Goal Post: Business Lessons from Austin Avuru’s Biography

By Toyin Akinosho

One evening in 2009, Austin Avuru, then CEO of Platform Petroleum, received a call from Nasir Ado Bayero during which the latter asked if Platform would be interested in purchasing Shell’s stake in Oil Mining Lease (OML) 38, in the western Niger Delta.

The offer, it turned out weeks later, was on condition that Platform was willing to go into partnership with Shebah Exploration and Production, then headed by Ambrosie Bryant Chukwueloka (ABC) Orjiako, a flambouyant orthopedic surgeon who was becoming widely known for his interest in oil and gas. Shell could divest its stakes in OMLs 4, 38 and 41 to the partnership.

“I had never really met Dr. A B C Orjiako until that time”, Avuru says in A Safe Pair of Hands, his just released authorized biography, written by Peju Akande and Toni Kan. “I knew him from a distance. I had known people who were working for him and I always saw him in the same mould as Kase Lawal, whom I had worked for: young men who were operating at a very high level in the O&G industry. Now, that itself was an issue because I had to treat him with absolute caution. I didn’t want to go into partnership with somebody that could “swallow” me. My thinking was, I don’t want wahala”.

Considering that Avuru had earned a reputation, already at the time,  as a public intellectual and strident critic of Nigeria’s policy choices, it is quite instructive to find that he harboured a sense of insecurity at the thought of meeting a potential business partner. It’s an enormously useful piece of information for Business students:  knowing that people they see as phenomenal also have their vulnerabilities.

“For a start”, Avuru recalls, “we had to name our new company, so I suggested that we joined Sepcol and Platform together to form SEPLAT”.

That Avuru led the company as CEO for 11 years is a well-documented part of Nigeria’s corporate history. But the story above is one of the many nuggets that make A Safe Pair of Hands, published in Lagos by RADI 8, such a riveting business thriller.

There’s one revealing anecdote after another startling insight.

A few of the passages that leapt at me from the pages:

The authors, Toni-Kan, left and Peju-Akande

Keep your eyes on the ball:

Shell didn’t have faith in Nigerian banks. They wanted Letters of Credit backed with cash guarantees. They preferred to deal with a global player.

ABC Orjiako suggested BNP Paribas, the French bank he usually did business with. Austin Avuru thought it was a good idea but the moment BNP Paribas asked for a $3Million transaction fee, Austin Avuru flew into a rage.

“For what?” he thundered. “How can they charge $3m for merely facilitating a deal? I won’t hear it.”

ABC Orjiako urged his new partner to be calm.

“Austin, I will pay the $3Million myself if need be but we need a bank with global connections, one that speaks the language of global finance and confident enough to get Shell back to the table.”

BNP Paribas turned out to be what was needed. Once the deal was signed they made a suggestion that changed the whole process and saw Seplat buy up OML 4, 38 and 41 without spending one kobo.

How did this happen?

BNP Paribas informed Seplat that a French company had just sold its interests in Congo and was awash with cash. Would Seplat like an introduction?

Maurel and Prom was interested in the deal put forward by Seplat and BNP Paribas and agreed to go with Seplat to London.

BNP Paribas was already earning its fee and Austin Avuru could see clearly now that the move to get a western bank was a smart one.

Deep knowledge will set you free from the tyranny of NNPC

After we had reached agreement with Maurel & Prom, the chairman of Maurel & Prom said he would like to visit Nigeria to see for himself the field his company was investing in.

At this point, Shell did not want their staff to know that they were on the verge of selling their assets. I remember when we made the trip to Sapele and Oben to inspect the facilities, Shell had to tell their staff that Platform Petroleum, which had a marginal field in there was merely inspecting their facility just in case we needed to send our production there.

After that trip, we were meant to take the chairman of Maurel & Prom to go and see the minister. Dr. Rilwanu Lukman was the adviser then. We had spoken to him before and he was very happy that we were doing that transaction. He said “oh, yeah, we will talk to NNPC and once NNPC gives the approval, we will approve it, that’s it.”

But in between giving us that promise and when we physically went to visit him, operatives inside NNPC and the DPR had given him an opinion that he should not allow us to proceed with the transaction.

In fact, some whiz kid head of legal at NAPIMS had given him an opinion which generally said that Shell had nothing to sell, that under the Petroleum Act, everything inside the ground belonged to the Federal Government.

But what he glossed over was the fact that all the operators who have a JV interest have an economic interest. That’s why they can list the value of their economic interest on the stock exchange. So, how can you then say that they have no value to sell?

‘Rags to Riches’ is not a cliché:

“I was very short before I went to the boarding house. When I got to the boarding house, the food they ate was beans and yam, rice and dodo and the occasional swallow. I came in October, then went home for mid-term in December. When I got to Abbi, I just sauntered into my compound. My aunt was visiting and she looked up and asked “who is this o?” I said I was the one. She peered close and exclaimed – “You are tall.” Not understanding what she was saying I went inside. Back then we had all these long mirrors at home. I stood in front of the mirror and looked and saw that it was true. I had sprung up. If I hadn’t go to that boarding school, I would have died a short man. What had happened was simple; I had started eating balanced diet.”

From the backwaters of the Niger Delta, in Nigeria’s oil rich region, to one of Africa’s most influential boardrooms, Austin Avuru’s story of becoming reads like a dream. Despite its being a master class work on the audacity of entrepreneurial undertaking, the 220 page story is an old fashioned, feel good tale. And that’s because it has benefitted from careful research and painstaking delivery by a pair of writers with a keen eye for the diversity of human relationships: our foibles, triumphs, generosity, candor, nepotism.

This book is a must read for anyone who believes in potential.

 


Be Bold, Cut Out Entitlement: No One Owes Us Anything

By NJ Ayuk
In 2021 most opportunities in the energy sector and in business in general will go to those who show up and negotiate better deals and get involved in making African resources work for us. Forget handouts, foreign aid and government handouts.

As I wrote in the second edition of Billions at Play: The Future of African Energy and Doing Deals, in 2021, young African dealmakers, negotiators and lawyers will have to embrace a new mindset to win. They will have to mobilize their resources and advocate for important principles of personal responsibility, smaller government, lower taxes, free markets, personal liberty, and the rule of law.

In 2021, African gas projects are going to be in the news. Companies will push to get them going, from Mozambique to Nigeria and from Equatorial Guinea to Tanzania.

If some extremists have their way, none of these projects should happen and our people should be left in the dark. Question we must also ask is how Africans are going to participate when it comes to jobs and contracts. In 2021, we cannot be bystanders. We all can’t afford to.

Africa’s economic recovery from Covid-19 and our global significance in the era of energy transition and attacks on our energy sector must be driven by the talent and entrepreneurship of its people.

Our continent is still struggling when it comes to establishing democratic and trade institutions, we must push for more democracy. Democracy isn’t perfect but it is the best of all political practices and we must embrace it.

I have a few words of advice for this generation, for Africa’s young attorneys, entrepreneurs, rising stars and dealmakers:

Never lose sight of the significance of your work.

By negotiating effectively for African businesses and governments, you can play a huge role in transforming the lives of hundreds of thousands of Africans. Few things in life are more satisfying.

I am proud of the law group I have built, but I consider the work I have done to get justice for and empower African individuals, businesses, and communities among my greatest successes.

I am the first to advise many young people to avoid feeling entitled to anything. No one owes you or us anything. We have to earn it. Our approach and success in oil and gas negotiations stem from our deep preparation and mindset. More of that is needed in 2021.

I have stated many times: you succeed when you look for mentors and let them mentor you. It’s important to have someone who is promoting you when you are not in the room. Next, be stubbornly loyal. Don’t try to pull a fast one because you know more than others! Further, embrace your trials and shortcomings for they teach you to be a better person and lawyer.

I have seen too many young lawyers or rising stars who get a chance to be on a podium, and then tend to spend more time being celebrities than being around colleagues or supervisors.

Many so-called celebrities have not earned a deal and completed one, so avoid having a big head. For me if you have not closed a deal and are not making money, you need to keep your philosophies to yourself. It is crucial to have a strong focus on building your skills because clients and business partners really want you to be good at what you do. Your writing, critical thinking, commercial mindset and in-depth industry skills cannot hurt you. Most clients want to know who is working on their deals, and they do not care about your race or nationality. They want to know you are qualified and can get the job done.

When you finally get a deal done and you get your first bonus or check, do not fall in the trap of buying that fancy car or getting into fast life. You will get broke so quickly. Spend wisely even when you think you have arrived where you need to be. Always think there is more and stay hungry. Look at the Texas oil boys, they are always hungry. They wear their cowboy boots and continue searching for the next big discovery.

Hashtags do not pay the bills. Get off your phone.

Get offline, social media is nice but it isn’t everything, we have seen people who prefer to seat on their phone even during business meetings rather than engage on real business. How do want a deal when you are busy on your whatsapp group chats? Why have a meeting with someone when you will be on your phone while they are talking? Get out of the room and take the call or send a message. If you decide to work on your Instagram while talking to me, I walk you out of my office or end the meeting. When you don’t get the job or the contract, don’t be so quick on blaming the “White Man” or Racism.

I know this will get the young generation annoyed, but its real. We need to start having a post covid mindset and know we will have to engage again. I am not crazy about Zoom meetings, but we have to do it. Business is not about who had the best tweet two hours ago or who does the best hooting and hollering. Get down on the ground and make money. Do not believe those who tell you money is bad. We know it is bad being broke and we hate being broke. You should never apologise for working hard and making money. To do that, you must be focused and yes, get off your phone.

Commit to work. Pay your dues. Your time to shine will come.

Always ask yourself, “Am I adding value to the firm or the company?” Don’t think you are in the firm to be the labour union representative or the head of diversity.

Do not walk around the firm or even a negotiation with arrogance or give off a sense that you are entitled, or that your opinion matters on every subject. You are not owed anything. It is important not to cry over discrimination on every issue, whether it is sexism, racism, or xenophobia.

You beat them with excellence and success. We see it every day and you will be surprised it comes from the same liberals who claim to love all humans and want to save the world. They will love to patronize you and put you in your place. I have experienced it myself. I just work harder, and success follows.

You must understand that building a successful practice or business calls for something not taught in law school or business school or any school: the ability to hustle and deliver on deals. I have always had run-ins with young lawyers because I can be a tough, goal-oriented taskmaster. I have a fierce sense of urgency that many others don’t share.  

Working for Centurion is not for the naïve or the fainthearted—we don’t tolerate young lawyers viewing Centurion as merely a job. Everyone has to give their maximum effort all the time.

The truth is, I am harder on myself. I am never satisfied, and I just believe I can win bigger and do the deal better. The most important outcome for me is to have people around me achieve more than they ever thought they could.

Lean in and take the heat for your client or causes you believe in, and for Africa

In 2021, you will have to visible, be vocal in defending the African energy sector from those that want to end it and you must capitalize on the opportunities that you see. One of the key things you must do in 2021, is take the heat for your clients. I have never had a problem being called an ambulance-chaser in the past. Today I am that ambulance that is being chased and many know i will always stand with them and I built a strategy of taking the heat for them. Don’t let them push on your client or kill your issue. Develop a thick skin and let them hit you. If I can’t take the heat, I have no business being in the kitchen.

I have been pushed, been kicked, sometimes been spat on, lied on, demonized, talked about and even derided in the media. Its does not bother me one bit, I always know I am going to outlast my distractors or competition. In 2020, we made more money than any other year with Centurion Plus, our latest on-demand service. I have also been invited to meet with Presidents, Ministers, CEO’s and even Royals. But I never lost my way.

Never take your eyes off the prize. Be patient, play chess, keep smiling, be ready to take a punch and definitely hit back and do it harder. Maybe a combination of Jabs, Uppercuts and Hooks. That’s going to be you in 2021. Its going to be a fight to stay alive, stay employed, stay in business, stay relevant and stay sane when everything and everyone around you is going crazy.

You are going to be tested. They are going to come after you. sometimes even your own friends and those who laugh with you then stab you in the back. You will be called a traitor to most of your liberal elitist friends who feel entitled, drink latte with soy or almond milk. They sometimes cannot believe that this kid who was their darling and their best boo does not buy into their tree hugging, cry me a river ideology. You and I will have to believe and fight for Africa first, against energy poverty, and for personal responsibility, free markets, limited government and yes we must not be ashamed of being people of faith.

The wisdom and advice my law school mentor and professor John Radsan, who used to serve as the CIA’s assistant general counsel and Ron Walters shared with me hold true for you today: each one of us has a mandate to use our education and skills to impact communities and to promote economic growth and empowerment.

So, yes, seek career success and prosperity in 2021. But, in the end, choose to do good: use your skills to make sure that everyday Africans receive their fair share of the benefits the continent’s natural resources can provide.

NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including ‘Billions at Play: The Future of African Energy and Doing Deals.’

 


‘African Governments Will Be in “Listening Mode” Now More than Ever’-Monsieur Afrique

The current shock in the hydrocarbon industry “is so profound and so deep”, in the view of Tim O’Hanlon, Tullow Oil’s former Vice President for Africa, that “companies will find Governments across Africa in “listening mode” now than before”.

That comment references the perception, by International Oil Companies, that African Governments, as a rule, are never in a hurry to follow the pointers to fiscal terms dictated by the market.

African Governments, O’ Hanlon says “have sometimes been more than a bit “late-to-the-party” when it comes to adjusting the work programme or fiscal arrangements, necessary when the oil price dies and capital dries up”.

O’Hanlon should know, or should he not?.

For most of the last twenty years he was the face of Tullow Oil in Africa. Known to governments and stakeholders around the continent as ‘Monsieur Afrique’, he negotiated the entries for the company, represented the partner countries’ feelings in Tullow’s executive management meetings and promoted the Tullow brand at the C-Suite level type conferences.

In those years, the company earned the sobriquet: ‘Africa’s Leading Independent’. Now as it leaves Uganda, winds down in Kenya and sees its Ghanaian production declining, Tullow Oil calls itself ‘An independent oil and gas company focused on Africa and South America’.

‘Monsieur Afrique’, retired last April after 34 years with the company, and four months after Tullow’s historic headlong stock price crash.

“To have African governments listen, he says is “all it will take to re-ignite the flame and get the ball rolling whereby exploration permits are extended, stay alive and stay in the right hands (like Tullow’s) until the inevitable turn-around comes”.

O’Hanlon: Oil explorers always seem to end up looking either like visionaries or idiots – rarely in between

The inevitable turnaround?

Mr. O’Hanlon is unapologetically clear sighted about the continued relevance of fossil fuels.

In a rare, extended conversation, his first interview with any publication since his exit, he fielded questions ranging from the future of oil, the alleged retreat of Independent companies from Africa, to the ‘hysteria’ about climate change.

Excerpts from the interview, published a month ago, in the August 2020 issue of Africa Oil+Gas Report.

Having spent several decades, right in the jungles of the oil patch, negotiating deals and seeing them implemented, as actual crude flow to export, how does it feel to sit back and watch things from a distance?

For the moment, I am relaxed to sit back and watch from a distance……….but my feet are still a bit itchy to be honest!  While poor Tullow is not what it once was, our legacy is secured. Through the efforts of the brilliant technical people we always surrounded ourselves with and the cool leadership at the top, Tullow added many tens of billions of dollars to the economies of some lucky African nations. It’s uplifting to think that ordinary people just doing their day-jobs like that have had such a positive impact on a Continent with wall-to-wall problems to solve. This achievement can never be undone.

Does any of the things happening now: lockdowns everywhere, crude oil prices going negative at some point, Massive write downs by oil majors, does any of them feel surreal?

Surreal is a bit strong. We chose to work in this oil-patch which is, after all, a boom/bust game. Oil explorers always seem to end up looking either like visionaries or idiots – rarely in between. Extreme outcomes are the norm. What we do for a living is so different from all the mainstream careers out there, that after 35 years of it – all spent in Africa – little ends up being truly surreal. Surprises, shocks, failure and setbacks are what to expect and so it becomes only a question of degree…

How do you see the future of Tullow in Africa? Is there life after death?

They say “debt is death” but that is just a corny cliché. At the right level, debt is an indispensable financial tool which is perfectly suited to our E&P business. Unfortunately, some recent mis-steps by Tullow management put our debt level in the spotlight – unnecessarily centre-stage in our story – whereas our banks had been actually quite relaxed about matters. Optics and story-telling matter in the fickle marketplace and this contributed to a spiral in equity value which of course did indeed highlight the then relatively high debt level. Discretionary spending like exploration is always the first to go in tough times and yet that’s what attracted so many fans (both shareholders and African Governments) to Tullow down the years. If the new leadership is wise, it will re-establish a credible African growth narrative for Tullow – however modest for now – in order to attract again the savvy shareholders as well as the key African stake-holders before the fabulous, hard-won, Tullow brand withers further………….

With the prevailing conditions likely to linger a while longer, is there any likelihood that those many acreages in Cote D’Ivoire and other frontier acreages in Africa are likely to be worked on by the company at all?

I am on the outside now and can only speculate. While African Governments have sometimes been more than a bit “late-to-the-party” when it comes to adjusting the work programme or fiscal arrangements, necessary when the oil price dies and capital dries up, Ivory Coast has proven to be very responsive and pragmatic with us in the recent past. The current industry shock is so profound and so deep that I predict companies will find Governments across Africa in “listening mode” now than before. That’s all it will take to re-ignite the flame and get the ball rolling whereby exploration permits are extended, stay alive and stay in the right hands (like Tullow’s) until the inevitable turn-around comes.

For the past three years, the International Independent, whose exploration exploits since the late 90s led to massive discoveries of gas in Mozambique and Senegal, and oil in Mauritania, Ghana and Senegal, has been on the retreat. Anadarko is gone. Noble Energy is about to be wrapped in Chevron’s voluminous folds, Tullow has left Uganda. Do you still see a role for International Independents finding new hydrocarbons and developing them?

No doubt about it. As long as oil and gas dominate the energy mix and Africa’s energy needs accelerate like no other Continent’s, investment in exploration will have a role, albeit modest for the moment. With no criticism of the MAJORS intended, the industry niche of frontier exploration has not, with a few exceptions, been theirs in Africa for the last few decades. The risk profile of true wildcatting across Africa – often onshore – doesn’t particularly suit them whereas the independents’ shareholders are prepared to face high risk in return for access to possible bonanza outcomes. A new crop of independents will emerge to fill these needs when the time is right. They may even start with developing already discovered resources which abound in Africa, moving out into exploration again as the oxygen returns into the room.

Is this ongoing retreat only a blip?

In my opinion, it’s a wee bit more than a blip – maybe more like an abrupt and violent speed-bump! But the fundamentals are still there for the E&P business to thrive again. Africa needs development and nations develop faster with cheap energy. Resources abound on the Mother Continent and the technology and skills are there to exploit them safely and profitably. Each side – Govts and oil explorers – needs the other and this “need” is the eternal driver of good business.

What is your take on the imminent end of the fossil fuel era -especially in the context of the timeline that is now so readily bandied around?

”Bandied around” is a perfect phrase for what’s going on here. Nobody ever seems to police these wild claims and you get a hearing these days once you have a wifi connection. But words matter and the IOC’s speak in a much more measured tone. Nothing will happen overnight and indeed the energy transition is quietly underway. And so it should be. Fossil fuels are already being replaced in the mix by cleaner energy sources but (pre-Covid) the total energy demand was increasing worldwide. So, common sense and sound economics will prevail because, as ever, the private sector will have to do all the heavy-lifting here. The transition will happen faster in some regions than others but oil and particularly gas will have a major albeit  decreasing role to play for decades to come.

You keep saying Africa needs development and nations develop faster with cheap energy. That’s quite contrary to the growing narrative that solar PV prices keep going down and power generated from them is ultimately cheaper?

Solar power technology  improves daily and seems to have a huge role to play in Africa’s future energy needs. However, the connected electric grid leaves a lot to be desired in Africa and so, a bit like the connected landline phone system of old, sunny Africa could maybe skip a technology chapter here with solar power being generated much closer to where it is consumed. That would indeed be great. But again, it will be in the context of an overall energy mix. Oil products are relatively safe, flexible, cheap, widely-distributed and dense bundles of energy. Transport is the principal user of fossil fuels worldwide and Africa is on-the-move!  Just like high-Capex / low-Opex hydro-power, large-scale solar can produce impressive generating costs on a given day and that will be a very welcome addition to the minestrone of Africa’s future energy needs.

What, in your view, is the future of the oilfield service companies…Halliburton/Schlumberger/Baker Hughes? What, in your view, is the short- and long-term future of the drilling companies?

Like the IOCs, the service companies including drillers are having a grim time at the moment. But the industry is uniquely experienced in dealing with appalling risks every day which Main St. businesses can’t even comprehend. How can you set out to drill a well which will cost you M$50+ and which has an 85% chance of failing? While that risk is the IOC’s risk, we pay the service companies bills and therefore their salaries. So it is also their risk really in a way. But the service companies are habitual innovators, forever adjusting to the twists and turns and challenges of the business. This will stand to them and they will be fine. There will be mergers, they may have to learn new skills but change and challenges have been their constant companions in our crazy industry and thus ensured their survival to date…

Which of the majors will be left standing?

If Africa………….it will be TOTAL.

Can we anticipate a revival of the industry any time soon?

Yes….but one man’s soon is another man’s eternity. This COVID-19 issue needs urgent solving and then there needs to be less hysterical shouting and more listening / thoughtful discussion around the climate change debate. The huge technical, creative and financial firepower of the oil industry can then be harnessed to make a sensible and properly-paced transition towards a cleaner future energy mix. This should be done without forfeiting the right of the developing world to catch-up with our living standards here in the West which benefited from cheap energy.

Will there be a merger of activities with renewables or are these two separate worlds?

There is space and need for both entities in the energy mix for the foreseeable future. That said, the MAJORs – who have a vulnerable presence at street level and MUST therefore think big picture – will be more able and more likely to try to cover both sectors and hedge their bets through acquisition of renewable energy targets. But under the entire energy supply umbrella, there will always be a need for niche players with their expertise – be they frontier oil and gas explorers or renewable energy technology innovators. You need these pioneers and risk-takers in ours and every other industry as well as the heavy-lifters to see the job through. It’s not an either/or.

There is not a lot in the media about how you showed up. How did it all start? An engineering education in the UK? Then what? 

Do you remember the cartoon guy, Mister Magoo? Well I’m his Irish cousin and I’ve been safely walking under ladders all my life! I scraped through Engineering in UCD, Ireland’s best Engineering school, then worked with Schlumberger for a few years, then scraped through Imperial College London, the UK’s best Engineering school, then bumped into dodgy-Accountant (his words) Aidan Heavy in Dublin on the very week his start-up Tullow Oil signed an onshore exploration permit just outside Dakar, Senegal. It was like the blind hiring the blind although to be honest, Aidan is a superb entrepreneur. Ignorance of the scale of our undertakings was our best friend for the first 15 years but the work ethic was amazing. Surrounded by hungry, talented people – back then, mostly fellow Irish – survival was the objective and it remains the miracle of Tullow to this day. Success inevitably follows in our game if you can just remain focussed and simply stay in the game! Our turn eventually came and we surfed those waves, one after another – SNS gas fields, Energy Africa acquisition, huge oil discoveries in Uganda, then Ghana and finally Kenya. Aidan’s laser focus on Africa was our big differentiator. I have been blessed to be at the heart of this story from my twenties to my sixties and for much of that time I was Tullow’s Monsieur Afrique. What a ride………

And now?

The same month I retired from Tullow (April 2020) was the month Europe and Africa went into COVID-19 lockdown and the worldwide E&P sector hit the rocks. Mr Magoo again just walked under that ladder! But I am flattered to report that my phone has rung a few times with requests for advice from people with African E&P projects needing to navigate through the maze. But the maze is new every time and the same routes that Tullow took aren’t available. But that’s ok. There are other routes and there are similarities that I am recognising in their stories! I can probably help much more than I even realise but time will tell. A new start-up to go back and “discover” all that oil we left behind, well that’s possible too maybe some day. 

 

 

 

 


Adesina re-elected as President of the African Development Bank Group

Akinwumi A. Adesina has been re-elected to serve a second five-year term as President of the African Development Bank Group on Thursday, August 27, 2020 by the Board of Governors of the Bank.

A globally renowned development economist and a World Food Prize Laureate and Sunhak Peace Prize Laureate, “Dr. Adesina has distinguished himself in driving a bold agenda to reform the Bank and accelerate Africa’s development. He was first elected as President of the Bank on May 28, 2015”, the Bank’s spokesperson, Grace Kiire says in a statement..

“As newly re-elected President, Dr Adesina, a former Nigerian Minister of Agriculture, will begin his new term on September 1, 2020.

“The election result, which gave him a hundred percent of votes of all regional and non-regional members of the Bank, was announced by the Chairperson of the Board of Governors of the Bank, Mrs. Niale Kaba, Minister of National Planning of Côte d’Ivoire.

“The election took place on the final day of the 2020 Annual Meetings of the African Development Bank Group, which was held virtually for the first time in the Bank’s history.

Adesina’s first term focused on the bold new agenda for the Bank Group based on five development priorities known as the High 5s: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa.

During Adesina’s first term, the Bank achieved impactful results on the lives of 335Million Africans, including: 18Million people with access to electricity; 141Million people benefiting from improved agricultural technologies for food security; 15Million people benefiting from access to finance from private investments; 101Million people provided with access to improved transport; and 60Million people gaining access to water and sanitation.

The Bank has maintained its AAA-ratings by all major global credit rating agencies for five years in a row. The Board of Governors of the Bank Group approved a 125% increase in the General Capital of the Bank, raising its capital from $93Billion to $208Billion, the largest in the history of the Bank.

The African Development Fund received a $7.6Billion pledge from donors, a 32% increase, for support to low-income countries and fragile states. The Bank was ranked the 4th most transparent institution globally by Publish What You Fund, bolstering its strong governance credentials for transparency and accountability.

Under Adesina’s leadership, the African Development Bank’s Board of Directors approved a $10Billion facility to support African countries to address the COVID-19 pandemic. The Bank also launched a $3Billion COVID-19 social bond on the global capital markets, the highest US dollar denominated social bond ever in world history, which is listed on the London Stock Exchange, Luxembourg Stock Exchange and NASDAQ.
Adesina said, “I am deeply grateful for the collective trust, strong confidence and support of our shareholders for electing me for a second term as President. It is yet another call for selfless service to Africa and the African Development Bank, to which I will passionately devote myself.”

The African Development Bank is Africa’s premier development finance institution, comprising 54 regional and 27 non-regional member countries.

“The future beckons us for a more developed Africa and a much stronger and resilient African Development Bank Group. We will build on the strong foundations of success in the past five years, while further strengthening the institution, for greater effectiveness and impacts,” Adesina said.

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