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Issue 719

12•December•2017 Week 49

™™

Brightening up
Libya is making progress in getting back on track.

™™

Buy high, sell low
Sinopec is planning to sell off its Nigerian and Gabonese assets, which it
acquired in 2009.

™™

Start up
Egypt’s gas plans are bearing fruit at Zohr and Atoll.

™™

Shooting off
Spectrum has begun a 2D seismic shoot offshore Mozambique.
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AfrOil
Africa Oil & Gas Monitor

COMMENTARY
Gauging the depth of Angola’s purge 4
Libya on the road to recovery 6

I n v e s tment
AP granted offshore Sierra Leone extensions 7
Sinopec plans Nigeria, Gabon sale 8

P er f ormance
Atoll, Zohr near start line 9

P o l icy
Kinshasa extends offshore production licence 10

P ro j ect s & C ompanie s


Erin spuds Oyo exploration well 10
Egina edges onwards 11
AAOG delays Tilapia well 11
Spectrum kicks off Mozambique survey 12

N e w s in b rie f 13

o u r c u s tomer s 19

Have a question or comment? Contact the editor – Ed Reed (edreed@newsbase.com)


Copyright © 2016 NewsBase Ltd. All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes
internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents

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Gauging the depth


of Angola’s purge
The new Angolan president has moved decisively against the dos Santos
interests but does his enthusiasm go any further, writes Ed Reed
Angola Angolan President Joao Lourenco has con- with Sonangol, it announced last week. A
tinued his push against the dos Santos business statement from the company, on December
W h at: empire. The president’s efforts have been well 4, reported Total’s chairman and CEO, Patrick
Total’s commitments to received by the population and there have been Pouyanne, had met Lourenco and the new chair-
Angola suggest newfound promising signs by foreign companies. man of Sonangol, Carlos Saturnino.
confidence in the state. Lourenco became president of the country Pouyanne said the authorities had a “strong
in late September, succeeding Jose Eduardo willingness … to drive an investment dynamic
W h y: dos Santos. He had been largely expected to be in the oil and gas sector, essential to the country’s
Lourenco is in the faithful to the interests of the former president, economy, after three years [of being] impacted
process of rolling back who remains head of the ruling MPLA party. His by the sharp drop in prices. Today’s agreements
the various dos Santos policy of change, though, has surprised many demonstrate Total’s willingness to contribute to
interests throughout the onlookers. this dynamic by restarting exploration offshore
economy. The most dramatic demonstration of Louren- in Angola, launching new projects such as Zinia
co’s efforts came in mid-November when he 2 on Block 17, and extending our co-operation
W h at n e x t: removed Isabel dos Santos from her position as with Sonangol”. The official also said the first part
There have not yet been head of Sonangol. of the Kaombo project should begin in the sum-
any signs of a broader Before his appointment, Lourenco had made mer of 2018.
change in Angola, so the a number of claims, including a pledge to tackle The two companies agreed on the conditions
moves against the dos corruption. In his inauguration address, he crit- for Zinia 2, it said, “enabling a commitment to
Santos family play well, icised monopolies in the telecommunications the final investment decision [FID]”. This pro-
but more is needed. sector. Isabel dos Santos has a major stake in this ject, on Block 17, is operated by Total with a 40%
industry as well, via a holding in Unitel, Angola’s stake and will be connected to the Pazflor float-
largest mobile phone company. ing production, storage and offloading (FPSO)
Angolan Minister of Telecommunications unit, one of the four vessels on the block. Output
and IT Jose da Rocha announced a move, in late from this phase will be 40,000 bpd.
November, to establish a new operator, and there Total also agreed to sign up to work on Block
has been interest from both foreign and domes- 48 with Sonangol. The first phase will run for two
tic sources. The government has also taken steps years and involves the drilling of one exploration
to claw back Isabel dos Santos’ interests in the well. The ultra-deepwater block is to the west of
diamond sector. Blocks 31 and 32. According to reports in early
A mid-November editorial in the Jornal de 2016, the block was awarded to Sonangol.
Angola, titled “A false problem”, attributed much In addition, Total said it had signed a mem-
of the problems with Sonangol to Isabel dos San- orandum of understanding (MoU) with Sonan-
tos. The author, Victor Silva, wrote that given gol on jointly developing a retail network in the
she was the daughter of the former president, country, in addition to agreeing an MoU on
Sonangol might not have been able to obtain opportunities for renewable energy.
external financing because of money laundering Angolan Minister of Communications Joao
concerns and worries over “politically exposed Melo paid particular attention to Total’s entry
people” (PEPs). into distribution in Angola, which he described
Accepting that production costs had been as instrumental in dismantling monopolies.
reduced, the editorial went on to raise con- Sonangol EP also, on December 5, announced
cerns about a “lack of dialogue and excessive that it would not go ahead with the choice of
bureaucracy”. It further noted Angola’s reliance PwC as its auditor. The decision was taken on the
on imported products, a point also raised by grounds that PwC was also contracted as a finan-
Lourenco. cial consultant for the company’s transformation
process and that a dual role would be conflict of
The Total deal interest, under Law 9/16, on public contracts.
In a positive sign for the new administration, PwC’s contract was to have run for three years,
France’s Total signed a number of agreements from 2017 to 2019, and was only announced on

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November 1. The statement declaring the audi- the Vicente issue is a key driver of this current
tor’s appointment said it was compliant with all discontent.
legal procedures. Five companies had applied for Earlier this year, Portuguese prosecutors
the position and only PwC and EY reached the set out charges against Vicente, accusing him
negotiation stage. of having paid around US$800,000 in order to
A PwC audit partner, Sarju Raikundalia, was end a corruption inquiry. The cash was allegedly
appointed to Sonangol’s board in mid-2016 – paid to the public prosecutor, Orlando Figueira,
thought to be the first non-Angolan to hold such to end an investigation in 2012, over Vicente’s
a post – and was dismissed at the same time as reported purchase of a flat in Estoril.
Isabel dos Santos, last month. In November, the Portuguese authorities sent
a letter to Luanda naming Vicente, and giving
Isabel’s grudges details of the charges and requiring a response
The dos Santos children are becoming increas- by the end of the month.
ingly testy about their newly threatened circum- The Angolan government has called for the
stances. Welwitschia dos Santos posted an angry case against Vicente to be transferred to Angola,
screed on a social networking site. Isabel dos citing the needs of sovereignty.
Santos announced on December 5 that a “formal In addition to the Vicente affair, Portugal’s
judicial complaint” had been filed against jour- Diario de Noticias reported at the end of Novem-
nalists from the VOA service over “defamatory ber that an investigation was under way into Luís
articles” about her and Unitel. Ferreira do Nascimento. The inquiry is a prob-
The complaint seems to stem from a VOA lem for the new administration in Luanda, as
article raising questions about whether Uni- Nascimento was appointed to be an executive
tel had imported assets using the cloak of the director of Sonangol in mid-November.
Angolan Red Cross, which is exempt from pay- The official is accused of being involved in the
ing duties. Isabel dos Santos was appointed as the disappearance of US$29 million from Sonair,
head of the local NGO in 2006. Sonangol’s airline arm, under a deal with Por-
Since her removal, Isabel dos Santos has high- tugal’s TAP.
lighted a number of uncomfortable issues for the The case, which was flagged by Isabel dos
new government. On her Twitter account, for Santos on Twitter, is another warning sign over
instance, she noted the recent settlement by SBM the extent to which Lourenco’s efforts can be
Offshore with the US government and reminded seen as more of the same, rather than a break
readers that payments were said to have been with the past.
made to Sonangol officials. A survey commissioned by the government
in the first half of the year, and subsequently
Everything changes leaked, demonstrates the depth of opposition to
While Lourenco’s moves can be clearly seen as the dos Santos family and to corruption. The sur-
reducing the power of the dos Santos empire, vey suggested that 53% of Angolans disapproved
what is less clear is whether the broader issues of the MPLA’s actions over the last five years. It
in Angola will change. The new Angolan gov- went on to note various corruption scandals, sin-
ernment, which is made up of members of pre- gling out Vicente, Helder Vieira Dias “Kopelipa”,
vious governments, has taken a tough line on a Leopoldino Fragoso and the former president.
Portuguese inquiry into corruption allegations These corruption scandals coincide with mount-
around Manuel Vicente, who was previously ing problems in the health sector, increasing
head of Sonangol and at one point was tipped to crime and a general economic malaise.
be the next president. If the new president can successfully pin all
In his inauguration address, Lourenco con- the problems of Angola on the former president
spicuously avoided mentioning ties to Portu- and his interests, Lourenco will gain valuable
gal. There is a broad reason for Angola to want breathing space. Angola’s real problems, though,
to look beyond the former colonial power, but run deeper. v

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Libya on the road


to recovery
Libya’s NOC is working on improving the country’s performance,
but challenges remain, writes David Flanagan
Libya Libyan oil production just keeps on rising. September bulletin, would support Libya’s oil
After the debilitating years following the civil industry “and hence we have to be more trans-
W h at: war, when output slumped dramatically, the parent with our plans and outlook”. The coun-
Libya’s oil production has recovery has really taken root in 2017. National try needs progress in a number of areas such
gained ground over the Oil Corp. (NOC) has pledged to adopt reforms as infrastructure and security, which feeds into
last 12 months. aimed at having a more transparent attitude and investments.
to have a more open “face to the market”, while NOC works “very hard with a minimum
W h y: gas production is also expanding. investment”, he continued, with the company
NOC has proved to be The company has set out plans to spend trying to make the best use of its resources in
a dedicated driver of US$20 billion over the next three years to con- order to “keep oil flowing in the pipeline”.
progress. solidate output and improve infrastructure. In
order to support this goal it has established an Local challenges
W h at n e x t: office in Houston to help in talks with contrac- While the trend and direction now being seen
With little scope to tors. US firms will be encouraged to bring new are highly encouraging, challenges will be
increase production, technology and innovative production methods encountered. Production often faces interrup-
Libya must improve its oil to Libyan sites, co-ordinated through the new tions in various places around the country, both
sector’s efficiency. office. at a field level and on pipelines, as local interests
While US operators are unlikely to make seek political or commercial leverage. Germany’s
much of a push back into Libya, given the Wintershall, which holds the NC 96 permit, has
domestic focus of many of those companies, confirmed that production has been volatile.
other interests are on the up. The UK’s ambassa- A representative of the Germany company
dor to Libya, Peter Millett, has suggested holding told NewsBase Intelligence (NBI) that oil pro-
a conference in 2018 on opportunities for main- duction had been “on and off during the whole
taining and improving production facilities in year”. The group has not produced oil since
the North African state. November 2 at NC 96, said the spokesper-
Millett met NOC’s chairman, Mustafa San- son, “because the local community of Jakhira
alla, on December 5, and had talks on mutual demanded that Wintershall should shut in
co-operation. The ambassador also noted Sanal- production”.
la’s participation at a meeting in Tunis involving Wintershall’s spokesperson added that inter-
UK companies. mittent shut-ins during 2017 had also been a
result of the company “not being included in
Opportunities the lifting programmes for Amna crude at the
New projects are focused in the offshore, though, Zueitina oil terminal”. As a result, the company
given the difficulties of operating onshore. The decided that it would not be an “economic
Bouri field began producing in the first quarter exploitation of the resources of the concession
of 2017 and Eni’s Bahr Essalam Phase 2 pro- to continue production without generating reve-
ject should start in 2018. Some of the gas from nues, while Wintershall is still obliged to carry all
this latter development will supply Italy, via the production-related operational expenses”.
Greenstream pipeline, while the remainder will A deal was reached with NOC in June of this
go to the local market. year which allowed output to resume, reaching
As Libyan output has risen, benefits have 65,000 bpd for a period, until the local commu-
been felt in Europe’s refining sector. The addition nity protested.
of this crude offers flexibility and wider options The OPEC question, at least, seems to have
in terms of sources of supply. Libya must now been solved – for the time being. The North
concentrate on holding on to the ground it has African state will continue to operate without a
captured and putting into motion its next steps. quota but the country has agreed, as has Nigeria,
Sanalla has indicated a desire to improve the to keep a watchful eye on production in order to
way in which Libya’s oil industry communi- ensure market stability. In effect, Libya is thought
cates. Improved transparency, he said in OPEC’s to have committed to a target quota of 1 million

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bpd, according to Bloomberg.


Libya had been aiming for 1.25 million bpd
by the end of 2017 and 1.5 million bpd by the
end of 2018. The first target is unlikely to be met,
owing to the sporadic disruptions that have dest-
abilised production, while the second seems to
be incompatible with the OPEC agreements.
Before the 2011 revolution, Libya was extracting
around 1.6 million bpd.
The immediate objective for Libya must be
to stabilise oil output. Following Sanalla’s recent
observations, NOC may now be expected to add
more detail to its plans for transparency, such as foundation for higher oil output – and crucially
providing more insight into the damage done to for more efficient oil production.
the country’s infrastructure. Challenges do not just come from local
Investments over the next three years should groups and oilfield maintenance. Libya’s elec-
focus on ensuring that export assets are robust toral regulator announced last week that the
enough to handle new volumes – the country voter registration process had begun, ahead of
still has substantial scope for additions. the presidential and parliamentary elections due
In parallel, Libya must make continued in 2018.
efforts to resolve the dispute with Wintershall. NOC has managed to avoid too much polit-
The country has made great progress in rescuing ical interference, with Sanalla taking care to
its status this year, an accomplishment of which define the company as apolitical. A vote – if it
it can be rightly proud. The real challenge will goes ahead – will carry legitimacy and, as a result,
now be to use the progress made this year as a there will be new pressures on the company.v

Investment

AP granted offshore Sierra Leone extensions


Sierra Leone’s Petroleum Directorate has Since 2010, AP has invested more than US$39
agreed terms with African Petroleum (AP) on million in the two licences, but drilling plans
a second extension for its two offshore licences. have been held up by the company’s search for
AP announced on December 5 that its European a farm-in partner. It claimed that recent tech-
Hydrocarbon and African Petroleum Sierra nology advances and gradually lowering costs
Leone subsidiaries will also be allowed to mod- for ultra-deepwater drilling have helped revived
ify their work programmes for the SL-03 and interest in the acreage, where water depths across
SL-4A-10 licenses, which have been extended the two licenses reach 3,000-3,600 metres.
to April 23, 2019 and September 17, 2019 “Based on recent discussions we have
respectively. held with industry players, we are aware of an
AP said these dates were pending a commit- increased appetite for material ultra-deep off-
ment, to be undertaken by November 1, 2018, shore opportunities, driven by the advance-
to drill one exploration well in each licence area ments in drilling technology and the decrease in
during the extension periods. Over the next 12 operating costs,” said the company’s CEO, Jens
months, AP will apply state-owned well and seis- Pace. “The additional flexibility afforded by the
mic data and other existing seismic to de-risk the amended commitments will help us to introduce
concessions, prior to deciding to commit. new parties to the project.”
In accordance with Sierra Leone’s licensing UK-based consultancy ERC Equipoise has
requirements, AP has also relinquished 50% been working with AP to re-assess the pro-
of the SL-03 licence area, now reduced to 962 spective oil resources on both licences through
square km, and 50% of the SL-4A-10 license the inclusion of two new prospects, Leo and
area, which now measures 995 square km. It also Vega. AP said it expects the revised prospective
said that Sierra Leone’s parliament ratified the resources for the SL-03 and SL-4A-10 licences to
changes on December 4. be published shortly.v

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Sinopec plans Nigeria, Gabon sale


Nigeria, Gabon Sinopec has hired BNP Paribas to sell its Nige- that payments were transmitted via banks in
rian and Gabonese businesses acquired through New York and California.
its purchase of Addax Petroleum in 2009, three The Le Temps newspaper published a report
sources told Reuters last week. The Chinese from Deloitte – Addax’s auditor – in Novem-
company is expected to hold onto its Cameroo- ber setting out a number of concerns. Deloitte
nian interests, though. expressed concerns about Addax’s failure to pro-
The decision was attributed to a number of vide “sufficient audit evidence to support various
factors, including low oil prices, militancy in payments made in relation to the Nigerian and
Nigeria and a corruption inquiry into the actions Gabonese business units”.
of certain Addax executives. In particular, it noted payments of US$20
The news agency reported that the assets are million made to “legal advisors” in Nigeria and
expected to sell for around US$1 billion. Sinopec the US and a payment of US$80 million paid to
bought Addax for US$7.2 billion, paying a pre- Kaztec Engineering. The latter payment, Deloitte
mium of 47% on the company’s then share price. said, “may have ultimately been utilised to bribe
Reuters suggested Perenco or Kosmos Energy government officials”.
might be interested in the assets. Among a number of details, Addax is also
The news agency also noted the decision, in said to have paid US$75,000 for a Chopard
August this year, to close Addax’s three offices, in watch, intended as a gift to Nigeria’s then oil min-
Geneva, Houston and Aberdeen. ister, Diezani Alison-Madueke. “Eventually the
gift was not presented and the watch has alleg-
Points of strain edly disappeared, potentially misappropriated
In July, the company agreed to pay 31 million by Addax management.”
Swiss francs (US$31.2 million) to settle a corrup- Given the cloud hanging over Addax’s
tion probe from the Geneva prosecutor’s office. West African dealings, any buyer is likely to
The company and two executives were suspected be extremely cautious – and to demand a low
of bribing foreign officials, according to the Swiss price.v
probe. No criminal intent was admitted but the
company acknowledged shortcomings. NBI Insight
Company filings in the UK reveal Addax’s
The way in which Sinopec is These all come amid signs that
CEO, Yi Zhang, had been removed as a direc-
engaging with foreign assets Beijing is tightening Sinopec’s
tor, replaced by Guangjun Chen. A report in
appears to be changing towards purse strings, following a number
Switzerland’s Le Temps said the company’s legal
much greater caution. The Chinese of disappointing deals in Angola.
director, Guus Klusener, had retired at the end
company is reported to have put Plans to sell off the Nigerian and
of June.
its Argentine interests up for sale, Gabonese interests demonstrate a
While the payment ended the Swiss probe,
in October, and in a sign that broader shift in Chinese thinking
the US Department of Justice (DoJ) and Secu-
its patience has worn thin with and, perhaps, one that no longer
rities and Exchange Commission (SEC) were
Venezuela, is pursuing litigation in considers it to be necessary to
reported in late August to be examining poten-
a US court against PDVSA. own foreign productive assets.
tially worrisome payments. There are allegations

Addax’s primary driver


has always been
Nigeria, with production
Addax's struggles
of 108,000 bpd in 60
2008 from a company Data source: NNPC
total of 136,000 bpd.
50
In the 12 months
Thousand bpd

to June of this year,


Addax’s output 40 34.3
averaged 33,700
bpd, according to data 30
from Nigerian National
Petroleum Corp.
20
(NNPC).

10

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Atoll, Zohr near Nicosia Baniyas


Syria

start line
Homs
Cyprus
Gas fields
Tripoli
Oil fields
LNG Refinery Lebanon
Egypt BP Egypt has begun testing the Port
phase one development of the Atoll Pipeline
Aphrodite

gas field at a rate of 8.5 mcm per Damascus


Planned Pipeline
day, Egyptian Minister of Petro- Tamar

leum Tarek al-Molla announced Zohr


Leviathan
last week. Regular production Tel Aviv
could begin during the third week Raven
of December. Meanwhile, first gas Amman
has been produced at the giant Ashkelon

Zohr gas field. The Eni-operated


field is also expected to start this Idku
Damietta Arish Israel
month. Port Said Jordan
Both BP and Eni agreed with
the Egyptian government in 2015
to fast-track development of the Cario
fields as Cairo sought to allevi-
ate its energy shortage. That year, Eygpt Taba Aqaba

falling domestic gas production


100km
had forced Egypt to begin import-
ing gas in the form of LNG. With 100miles
production increasing, such as
that which will come from Atoll
and Zohr, Egypt expects to be able to stop LNG The field is being developed through a US$3.8
imports by the end of 2018. Atoll was discovered billion investment. Onshore processing is taking
in March 2015 and Zohr in August of that year. place at the West Harbour gas processing plant.
Atoll holds an estimated 42 bcm of natural BP also discovered the Salamat field in the block
gas and 31 million barrels of condensate. Bring- in 2013, which is under appraisal, and in March
ing the field online will boost total Egyptian gas this year it made a discovery at the Qattameya
production to 155.8 mcm per day. Eni’s Nooros Shallow-1 well. Other discoveries in the North
field began producing in 2016 and BP’s Libra and Damietta Offshore include Taurt North, Seth
Taurus fields started production earlier this year. South, Salmon and Rahamat, Satis, Hoda and
The country’s gas demand is averaging 167 mcm Notus.
per day. The shortfall should be covered by Zohr, BP’s Libra and Taurus fields in the North
which will gradually increase output to 28 mcm Alexandria concession came into production in
per day in 2018. March this year at a rate of 19.8 mcm per day.
Atoll is located in the North Damietta Off- Initial production at Zohr began on Decem-
shore concession and is held by BP with 100%. ber 9 at a rate of 8.5-14.2 mcm, the Ministry of
Petroleum announced. The 850 bcm reservoir is
operated by Eni, which is partnered with Rus-
sia’s Rosneft and BP. Output should increase to
28 mcm per day by mid-2018 and phase two
development should reach 76.5 mcm per day in
2019, drawn from seven wells. Total investment
in Zohr is estimated at US$10 billion.
Egypt’s gas production is expected to reach
175.6 mcm per day by the middle of next year
and exceed 198.2 mcm per day in 2019 when
Zohr reaches full production. At that rate, the
country plans to resume its role as a gas exporter.
Recently, officials from the Houston-based oil
firm, Noble Energy, visited Molla. Discussions
focused on the construction of a subsea pipeline
from Cyprus’ Aphrodite field, where Noble is
operator, to be exported to Egypt where it would
be processed into LNG at either the Idku or
Damietta LNG plants and re-exported.v

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Kinshasa extends offshore


production licence
Congo Congo Kinshasa has agreed to extend the its three growth targets in the medium to long
Kinshasa licence for the Offshore DR Congo block for 20 term. Inpex works on the DR Congo block via its
years, Japan’s Inpex said on December 6. The Teikoku Oil (D.R.Congo) subsidiary.
Japanese company has a 32.28% stake in the MIOC, the operator of the block, is a subsid-
concession, while Muanda International Oil Co. iary of Perenco, which dominates the country’s
(MIOC) has 50% and Chevron has 17.72%. oil sector. The unit was bought from Chevron-
As a result of this agreement, the licence has Texaco – as it was then – in 2004. At that point,
been extended from November 2023 to Novem- production was put at 19,000 bpd from seven
ber 2043. fields. Perenco also has onshore interests, which
The 1,000 square km block lies in water depth produce around 15,000 bpd. Chevron holds its
of four to 20 metres and, as of September, was current interest in the block via ODS, which the
producing around 11,000 bpd of crude from 10 US company received when it bought Unocal.
oilfields. While Congo Kinshasa’s hydrocarbons sector
The concession was acquired in 1970 and is relatively small, although with some explora-
began producing in 1975. Inpex said the licence tion prospects in the Cuvette Basin and in the
extension would allow it to increase production country’s east, in Lake Albert, mining is a much
and reserves attributable to the company. The larger part of its economy. Global Witness pub-
financial impact was described as minimal. lished a report on the Congolese mining sector
As such, this tallies with the Japanese com- in July, saying there was a “toxic combination of
pany’s “continuous enhancement” of explora- corruption and mismanagement”, which had led
tion and production, which it defined as one of to the loss of US$750 million over three years.v

P r o j ec t s & C o m p a n ie s

Erin spuds Oyo exploration well


Nigeria US-listed Erin Energy has begun drilling the it had been forced to suspend the completion
Oyo North West exploration well in Nigeria’s Oil and hookup of the development. Erin blamed
Mining Licence (OML) 120. the guarantor of its loan facility, saying it had
The well is targeting a mean resource of 1.1 “demanded the guarantor cease and desist from
million barrels, the company said on Decem- interfering in the disbursement of funds for the
ber 6. Work on the well is being carried out by project”. As a result of these financial difficulties,
the Pacific Bora, a sixth-generation drilling the company said it had demobilised the rig.
rig owned by Pacific Drilling on a dayrate of Erin ran into financial difficulties with the
US$195,000. The hole should take 60 days to drill FPSO provider, Bumi Armada, which sus-
and log, Erin said. pended the Oyo vessel in June as a result of a
“We are extremely pleased to have com- build-up of unpaid bills. It agreed to allow oper-
menced drilling of the Oyo North West pros- ations to restart in August.
pect,” said Erin’s CEO, Femi Ayoade. “Our team By the time Erin filed its third quarter results,
has worked hard to mature our extensive portfo- though, it had secured a funding commitment
lio of prospects and we look forward to positive of around US$20 million, from Greene Street
results from this campaign. A discovery in the Capital, allowing it to restart its exploration plans
Miocene formation would be a significant step in OML 120. The company has not been able to
forward in the evolution of our company.” carry out the hookup work on Oyo-9 as yet. v
Success at the well would allow oil to be pro-
duced via its existing floating production, stor-
age and offloading (FPSO) vessel, on the Oyo
field.
The company signed up the Pacific Bora
in March of this year, with the rig arriving in
August. First, it drilled the Oyo-9 well, which
was intended to add 6,000-7,000 bpd.
While results from this well were in line with
expectations, the company said in October that

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AfrOil P r o j ec t s & C o m p a n ie s AfrOil

Egina edges onwards


Two contracts have been put to tender, for well yet reached a final investment decision (FID).
Nigeria
completion services and heavy equipment sup- Total has a 24% stake in OML 130 and is
plies, at the Total-operated Oil Mining Licence the operator. CNOOC Ltd has a 45% stake,
(OML) 130, home of Egina, one of Nigeria’s big- Petrobras 16% and South Atlantic Petroleum
gest offshore project. Notice of the tenders came (Sapetro) 15%. Under mounting financial pres-
from NiPex, the country’s agency responsible for sure, Brazil’s Petrobras has indicated an interest
the evaluation of upstream contracts. in selling its stake.
The field is expected to begin producing in Egina will require 3,000 rig days from two
the fourth quarter of 2018 and reach a peak of rigs, with 52 km of oil and water injection flow-
200,000 bpd. Recent comments have reaffirmed lines, 20 km of gas export pipelines,12 flexible
the project’s budget at US$16 billion. jumpers and 80 km of umbilicals. Several Nige-
Five out of the planned 44 subsea wells have rian companies, largely in partnership with
been drilled, at water depths of 1,400 to 1,700 experienced international partners have been
metres, and 13 more will be completed when the involved in the project from scratch.
field starts up, said Total. Individual flow rates Total has taken pains to highlight the local
are expected to be impressive, with Egina-5, for content aspect of the project. “The idea is to
instance, estimated to reach 12,000 bpd. accelerate the pace of technology transfer by
While progress is being made at the training Nigerian employees … It is expected
ultra-deepwater field, located about 130 km off- that 21 million man-hours will be worked
shore, there have been some concerns from the locally, corresponding to 70% of the total hours
government over contract awards, which has led planned for the project. Some 58,000 tonnes, or
to an inquiry. Of particular interest is the ques- 34% of equipment will also be produced locally.”
tion of local content, with the Senate demand- The floating production, storage and offload-
ing the head of National Petroleum Investment ing (FPSO) is due to arrive in Nigeria at the end
Management Services (NAPIMS) provides of January and the topsides will be integrated in
answers. Also under scrutiny are plans for Bonga country, at the Lagos Deep Offshore Logistics
Southwest and Zabazaba, neither of which have (LADOL) base. v

AAOG delays Tilapia well


Congo Anglo African Oil & Gas (AAOG) has posted discovery and a deeper interval that is known
Brazzaville further delays in the arrival of a rig at its Tilapia to be a prolific producer on neighbouring fields,
oilfield, in Congo Brazzaville. The company, in TLP-103 is potentially a transformational well
an update on December 11, said it was also in for AAOG,” said the company’s executive chair-
talks for a licence extension, which it intends man, David Sefton. “We are conscious that there
to complete before drilling the well. Currently, have been delays due to the availability of our
the licence ends in 2020. An update is expected preferred rig, and that this has caused frustration
before the end of the year, it said. to shareholders. We are working hard to secure
Much of AAOG’s hopes rest on the drilling the new licence and ensure that drilling can com-
of the TLP-103 well. This is targeting a number mence as early as possible in 2018.”
of horizons, including a producing reservoir – In addition, AAOG is struggling to increase
expected to hold 8.1 million barrels of contin- production from its TLP-101 well. The company
gent resources – and a deeper prospect, which said there had been no increase in output but
has 58.4 million barrels of prospective resources. that this would come after the flow lines between
The company owns a 56% stake in the Tilapia the wellhead and separator were replaced. As of
field, following its acquisition of Petro Kouilou. September, output from this well was 48 bpd.
The remaining 44% is held by Societe Nationale The TLP-102 well, meanwhile, will need
des Petroles du Congo (SNPC). mechanical intervention in order to begin pro-
The company has inspected the rig, which is ducing. Once the TLP-103 well has been drilled,
working with a company in Congo Brazzaville. the rig will carry out this work, AAOG said. The
Its current contract is expected to end in January, TLP-101 and TLP-102 wells have the potential to
later than the previous estimate of mid-Decem- flow at 185-250 bpd combined, it said, but more
ber. In an attempt to moderate the risk of fur- work must be done to secure this.
ther delays, AAOG said it was in talks with other Achieving this target would allow the com-
potential suppliers, in order to begin drilling in pany to reach breakeven, and success at the new
the first quarter of 2018. well would potentially bring AAOG’s output to
“Targeting proven sands, an existing around 750 bpd, it said in September.v

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P11


AfrOil P r o j ec t s & C o m p a n ie s AfrOil

Spectrum kicks off


Mozambique survey
Mozambique Spectrum has set out plans to acquire around the seismic’s findings.
19,000 km of 2D seismic offshore Mozambique, The first results are expected to be available
ahead of future licence rounds, the company said early in the second quarter of 2018. Spectrum
on December 8. Working on behalf of the Insti- is working on the project with Schlumberger’s
tuto Nacional de Petroleo (INP), the multi-client Western Geco.
study will focus on the southern Rovuma Basin Spectrum’s vice president for Africa, Graham
and North East Zambezi Delta, where no wells Mayhew, said the study would “play a key role in
have previously been drilled. refining our understanding of the hydrocarbon
The seismic company said the work would potential of the area and accelerate hydrocarbon
involve a 10,000 metre offset with continuous exploration activity in what is believed to be an
recording, which would complement its previ- oil-dominated region with exceptional quality
ous work in the Mozambique Channel, carried reservoirs in large traps generated by a wide
out in 2013. Gravity and magnetic data will also variety of mechanisms. In addition the data will
be acquired, providing additional verification of also provide the basis for future license rounds as
planned by INP.”
In particular, there is
potential structural and
stratigraphic trapping,
it said. Source, reservoir
and seals have been found
in Cretaceous and Ter-
tiary plays. Data will be
processed with pre-stack
time migration (PSTM),
pre-stack depth migration
(PSDM) and broadband
products, it said.
Judging from Spec-
trum’s map of its proposed
seismic, the campaign
looks like it will cover the
A5-A and A5-B blocks,
which were awarded to Eni
and ExxonMobil respec-
tively in 2016.
S c h l u m b e r g e r, i n
November 2014, made
available its multi-client
seismic work. The com-
pany said it held 110,000
km of 2D data, includ-
ing more than 36,000
long-offset 2D that it had
recently acquired. The data
was available for Mozam-
bique’s fifth licensing
round.
CGG won work from
INP in October 2016 and
began shooting seismic in
Mozambique in the third
quarter of 2017. Work
covered 40,000 square km
of 3D seismic in the Zam-
bezi Delta.v

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NO R T H AF R I C A
Italy natural gas market at Siemens signs on to boost
DEA signs memorandum of ‘pre-alert’ level Libya power generation
understanding in Algeria PSV spot, the Italian wholesale natural gas
contract for day-ahead delivery, has extended
Siemens has signed contracts with the state-
owned utility General Electricity Company
DEA Deutsche Erdoel AG and the Algerian its rally as grid system operator Snam said the of Libya (GECOL) to expand Libya’s power
state company Sonatrach have signed a gas balance in Italy was entering a pre-alert generation capacity by approximately 1.3 GW.
memorandum of understanding (MoU). The status in cold weather. Under these contracts, Siemens will build a
MoU aims at strengthening ?the co-operation The Ministry of Economic Development 650 MW open cycle power plant in Misrata,
between the two companies and defines the has declared an Early Warning level of the equipped with two F-class gas turbines, and
framework for DEA’s potential participation in Emergency Plan in the Italian gas market, a 690 MW open cycle power plant in Tripoli
additional upstream projects in Algeria. The Snam said in a published statement. West, equipped with four E class gas turbines.
agreement was signed by Sonatrach upstream However, tight supplies may ease in the The total volume of EPC contracts, including
vice-president Salah Mekmouche and DEA next two days as they are public holidays in long-term service agreements, is in the range
chief operating officer Dirk Warzecha. Italy. of 700 million euros.
“This MoU builds on the existing business Despite increased Italian demand, Algerian Siemens has been supporting Libya with
relationship between DEA and Sonatrach and flows to Italy remained flat at 63 million cubic technology and expertise since the 1950s.
paves the way for further co-operation of the metres. CEO of Siemens’ Power and Gas Division,
two companies. It also reflects DEA’s long- Algeria has been hit by a cold snap in Willi Meixner, said: “Around 30% of Libya’s
term commitment to Algeria and represents recent days, with temperatures 3-5 C below installed power generation capacity is based
a good opportunity for us to access additional seasonal norms in the key demand centres on Siemens technology that delivers electricity
business opportunities in one of our core such as Algiers, which has triggered increased to two million people. After completion,
countries,” said Warzecha. domestic demand for gas and power. The the power plants in Misrata and Tripoli
“DEA has been active in Algeria for more supply crunch comes as Algeria vowed to West will help the country to solve the
than 15 years. We welcome the opportunity maintain its export levels through the winter ongoing challenges caused by frequent and
to co-operate with Sonatrach in identifying and follows the startup last month of a new unpredictable power cuts”.
oil and gas projects of common interest in associated gas production project at the Hassi SIEMENS (GERMANY), December 11, 2017
Algeria and we hope that this will result in Messaoud oil field. The project means an
significant value creation potential for both
parties,” added Sameh Sabry, who is the new
associated gas that before now was mostly
converted into LPG can be sent into the main NOC Chairman receives the
general manager for DEA in Algeria since
September 1, 2017.
Algerian gas grid.
The project started up at a rate of 10 French Deputy Ambassador
Algeria is the leading natural gas producer
in Africa and an important natural gas
million cubic metres per day, the equivalent
of 3.7 billion cubic metres per year, but can be to Libya
supplier to Europe. DEA participates in the increased to 20 million cubic metres per day Mustafa Sanalla, NOC Chairman of the
Reggane Nord project in the Algerian Sahara if needed. Board, has received the French Deputy
with a 19.5% working interest. Reggane Nord To offset flat Algerian gas flows to Italy, Ambassador to Libya Mr Iyad Jaber at NOC
comprises of six gas fields under development, Russian gas flows to Italy via Austria ramped HQs on December 2017 in the presence
which are planned to be brought on stream in up to 110 million cubic metres, after averaging of Mr Salah Ben Ali Manager of Office of
the coming few months. 102 million cubic metres per day in Week 48. International Cooperation at NOC.
DEA (GERMANY), December 6, 2017 PLATTS (US), December 6, 2017 The French Deputy Ambassador formally
invited NOC to participate in a workshop that
will be carried out by French companies and
held in Tripoli during the first half of next
OPEC's benchmark basket v year. The meeting discussed oil relationships
65
with the French companies and ways to
60.74 61.12 strengthen and develop such relationships.
60
The two Parties also talked about the
conditions of the oil and gas sector in Libya
55.5
55 53.37 53.44
and the challenges that face NOC and its
51.67
52.4
subsidiaries in addition to the efforts made
US$ per barrel

51.37
50.32
50
49.2 49.6 to improve the security situation to achieve
46.93 production stability and oil flowing in the
45.21
45
entire fields and ports.
NOC (SOUTH AFRICA), December 7, 2017
40

35
SDX makes gas discovery
30
at KSR-16 well
Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 SDX Energy has announced that a gas
discovery has been made at its KSR-16
development well on the Sebou permit in

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P13


AfrOil New s i n b rie f AfrOil

Rigs in Africa
90
v
13 14
and fair elections are held. Next, to this, a
80
14 12 14
11 broad-based inclusive national dialogue, the
15
9
10
13
opening up of political and civic space, and
70 support for local initiatives of reconciliation,
healing and peacebuilding are needed. The
60 population needs to be supported through
international assistance by the intensification
50 of humanitarian assistance, sufficient security
provision to all citizens, and upgrading of the
40
68 70 76 69 72 75 66 71
protection of civilians (POC) sites.
72 74
PAX (SOUTH SUDAN), December 11, 2017
30
February March April May
Land
June
Offshore
July
Algeria
August September October November
Source: Baker Hughes
South Sudan owes Sudan
Morocco. After the oil conference here in Juba a lot of for US$1.3 billion from 2012
The KSR-16 well was drilled to a total
depth of 1,896 metres and encountered 14.2
oil companies are interested to come to South
Sudan,” he further explained. oil deal
metres of net conventional natural gas pay in SUDAN TRIBUNE (FRANCE), December 4, 2017 South Sudan still owes neighbouring Sudan
the Hoot formation. The company expects US$1.3 billion from a 2012 deal that ended
that the well will be connected to the existing
infrastructure and placed on production Debating South Sudan’s a dispute over oil payments between the two
nations, the deputy finance minister told
within the next 30 days.
The drilling rig will now move to the future Reuters before he was sacked last week. The
previously undisclosed amount is equivalent
ELQ-1 prospect on the Gharb Centre permit A group of concerned citizens in South to eight years worth of oil revenues for South
and drill the first commitment well on this Sudan have warned that the situation in the Sudan at current prices, according to former
recently acquired licence. country is likely to become even worse unless deputy minister Mou Ambrose Thiik. He
The recently completed KSR-15 well has a genuine, inclusive political process can be spoke to Reuters and was removed from his
been connected to the existing infrastructure started immediately. The group says South post by President Salva Kiir later that day.
and it is anticipated that test production will Sudan’s internal conflicts cannot be settled Finance Minister Stephen Dhieu Dau
commence early next week. by war but must be settled through political did not answer calls or text messages. Oil
SDX ENERGY (UK), December 11, 2017 dialogue based on a shared vision for a Minister Ezekiel Lol Gatkuoth also did not
peaceful future in which the South Sudanese answer calls or text messages. Information
South Sudan optimistic are united in diversity.
The Concerned Citizen’s Network for Peace
Minister Michael Makuei said he could
not comment on figures. In 2012, South
rising oil prices will boost (CCNP) therefore calls upon the wisdom of
the leaders of all South Sudanese parties to act
Sudan shut down oil output after it could
not reach an agreement with neighbouring
economy for the general good of all citizens.
The CCNP recently published a report
Sudan, its former ruler, on payment to use
its infrastructure to export crude from its
South Sudan said that it hopes to reap from setting out their vision for South Sudan. The oilfields.
the global rise in oil prices to uplift an major objective of the report is to stimulate an South Sudan eventually agreed to pay US$3
economy weakened by nearly four years of open debate and to motivate those in power billion to Khartoum in a late 2012 agreement.
civil war that led to a halt in the nation’s oil to foster a peaceful future for South Sudan, South Sudan is also supposed to pay royalties
production. “The oil market is appreciating but at the same time to be prepared for other fees for each barrel of oil it exports through
now very well the oil price is going up its scenarios. Sudan. But Thiik said Juba still owes US$1.3
US$65 a barrel and yet in South Sudan, it’s The report updates developments in South billion of that original amount.
something we need to celebrate because our Sudan based on a 2016 analysis of five possible REUTERS, December 6, 2017
economy is driven by oil. We are going very scenarios for the country: United in diversity,
well in the oil industry,” Petroleum Minister divided leadership, fragmentation, 21
Ezekiel Lol Gatkuot said. kingdoms and dictatorship. According to the W E ST AF R I C A
“If you look at the production in Dar CCNP’s analysis, without swift and concerted
Petroleum or DPOC in Paloch, we used
to produce 270,000 bpd but now we are
action South Sudan is heading toward one
of the darker of these scenarios. However, it ESIA process begins for
producing 135,000-140,000 bpd. Then if you
go to GPOC we used to produce close to
is not too late to steer the country toward a
better scenario, unity in diversity. This would Tower in Cameroon
200,000 bpd but now we are producing zero,” take political will and a renewed political Tower Resources has announced that it
said Gatkuoth. “So we have agreed with Sudan process. has awarded CIME Services of Cameroon
to resume the production there,” he added. To achieve this, the CCNP calls upon all the support contract for preparing an
The minister further disclosed that the French South Sudanese parties to end the military Environmental and Social Impact Assessment
oil giant Total and Tullow also expressed strategy through a complete and sustained (ESIA) for the drilling of multiple wells on
willingness to invest in South Sudan’s oil cessation of hostilities and return to dialogue Tower’s Thali licence in Cameroon.
blocks. and the renewal of the political peace The ESIA is a process governed by the
“Total is coming back for B1, B2 and you process. Parties should establish a transitional Ministry of Environment, Nature Protection
have Tullow being committed to making sure authority of technocrats that would allow for and Sustainable Development of Cameroon
that we are going to seal the deal with them. important reforms to be made before free (MINEPDED). The contract has been

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AfrOil New s i n b rie f AfrOil

awarded following a competitive tender Ghanaian workers, numbering about five verification is still ongoing, as only 60% of the
among three companies, and covers the hundred, say they are gradually being replaced expected data has been received, while the rest
preparation and approval by MINEPDED by other nationals on the field despite having are being awaiting.
of the terms of reference of the ESIA, the same qualification. He explained that the essence of embarking
preparation of a stakeholder consultation A situation one worker who spoke on on the verification exercise was to address
report, and support through public hearings condition of anonymity describes as a breach issues of bankability and the need to attract
and the submission of the ESIA report to the of the country’s local content laws. They investors and financiers to the gas flare
MINEPDED for approval. believe the move is also a violation of their commercialisation initiative. He said that the
The completion and approval of the three months renewable contracts with overall idea was that the country must have a
ESIA constitute an important step before Amaga Oilfield and Orsam for the past nine credible, measurable, attainable data that was
launching the drilling campaign on the Thali months. bankable, so that it would be an investment-
license. CIME is a highly experienced firm in CITIBUSINESS (GHANA), December 6, 2017 grade data for investors and lenders to put
conducting oil and gas ESIAs in Cameroon. their money.
It is expected that the ESIA process will be
completed by June 2018. Nigeria, World Bank, others Derefaka noted that by the time investors
see that the World Bank had done a lot of
TOWER RESOURCES (UK), December 11, 2017
verify gas flare sites studies with the federal government, and
the remaining sites are verified, they would
Workers strike over Programme Co-ordinator of the Nigerian
Gas Flare Commercialisation Programme at
come in and make investment. “We have
bankability issues, because data is very key to
wrongful dismissals at Nigeria’s Ministry of Petroleum Resources
Justice Derefaka says the federal government
us. Without accurate data, gas flare data, then
this programme is dead on arrival.
OCTP has commenced the verification of gas flare
sites across the country. He said that the
NAN (NIGERIA), December 6, 2017

Ghanaian workers operating on the Eni


onshore receiving facility for the OCTP
federal government had discovered that there
were at least 178 sites where gas were flared, as 577 Firms bid for NNPC
project at Sanzule in the Ellembelle
constituency in the Western region, have
opposed to 140 sites listed in the past.
He said the verification exercise was Insurance Renewal
suspended operations over unlawful
dismissals. Citi Business News understands
conducted in conjunction with the World
Bank, United States Agency for International programme
the workers have embarked on a sit down Development (USAID) and the Canadian The Nigerian National Petroleum Corporation
strike as a result of the development. The government. According to him, the (NNPC) has said that 577 firms have

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P15


AfrOil New s i n b rie f AfrOil

indicated interest to secure the insurance stated that the State Government is already Association of Nigeria (PENGASSAN)
renewal contract for its oil and non-oil assets. having fruitful discussions with Messrs has threatened to disrupt fuel supply and
In a statement signed by the Groups General Diversified Global Eco- Energy, DGE, and distribution across the nation via a strike
Manager, Mr Ndu Ughamadu, it said the efforts have resulted in the starting of the action from December 18, 2017. The
bidding was part of corporation effort to project using Ibadan North and South West association said it is unhappy with the Federal
ensure transparency. Local Government as a pilot scheme with a government for not addressing its grievances
It quoted the NNPC Group General total of 100 MW. as regards unfair labour practices by the
Manager of Risk Management and Insurance, Dauda said that Ibadan North Local management of some indigenous oil and gas
Mr Modupe Bameke, who said that the Government is chosen to represent the companies.
bidding was also a requirement of the Bureau residential client template of the scheme This latest development was made in a
of Public Procurement (BPP). while Ibadan South West Local Government statement by the general secretary of the
“The essence of this public bid opening represents the industrial client template, association, Comrade Lumumba Okugbawa.
is to ensure that the Corporation complies pointing that a total of 50 MW is intended to The association expressed anger over
strictly with the provisions of the Bureau of be provided for each of the Local Government unfair labour practices and the government’s
Public Procurement Act (BPP). All the bids Area chosen as a pilot scheme. inability to tame some indigenous oil
will be opened in the presence of everybody THE NEWS (NIGERIA), December 10, 2017 and gas companies and marginal field
to ensure that all entries are properly captured operators. PENGASSAN accused Neconde
in line with the transparency principle of the
NNPC,” he said. Senate threatens NAPIMS Energy (of Nestoil Group of companies) of
sacking workers that joined the union and
Also, the Group General Manager of
Supply Chain Management, Mr Shehu Liman, boss with arrest over Egina dehumanising them in total disregard of the
rules of engagement.
said that the public opening bids measure was
aimed at providing a level playing field for all project According to Okugbawa, “The action
of companies such as Neconde in the mass
bidding companies. The Senate Committee on Local Content sacking of Nigerian workers contributes in
“The idea is to select broking and insurance has ordered the Group General Manager no small measure to the unending militancy
companies that are credible and capable of of National Petroleum Investment and in the Niger Delta. This company has also
track records of performance. What this Management Service (NAPIMS), Mr Roland severally boasted that no government agency
means is that we are going to eliminate all Ewubare, to appear before it in the next 24 can call it to order.”
those transactions that are not necessary”. hours, or risk consequences. SWEET CRUDE (NIGERIA), December 8, 2017
A breakdown of bidders shows that 245 The Chairman of the committee, Sen.
brokers tendered for oil assets, 251 brokers
tendered for non-oil assets while 37 insurance
Solomon Adeola, said Ewubare was expected
to appear before the committee to explain the Nigeria’s Senate passes
companies tendered for oil assets and 44
tendered for non-oil assets.
huge variations associated with the US$16
billion Egina Deep Sea Oil Project. Adeola 2018-2020 budget
NAN (NIGERIA), December 10, 2017 decried that it was becoming a tradition in
the Nigeria National Petroleum Corporation framework, raises oil price
Oyo set to generate 2000 (NNPC) and its subsidiaries to treat National
Assembly invitations with levity. estimate
MW through IPP He said the committee would no longer
tolerate this, adding that “henceforth we
Nigeria’s Senate passed the government’s
medium-term expenditure framework for
The Oyo State Government has claimed that will not deal with ‘lieutenants’ of these 2018-2020 on Tuesday, raising its oil price
necessary arrangements are being put in agencies without their heads or cogent assumption to US$47 from US$45 per barrel.
place to generate more electricity through reasons in advance.” According to him, The document, which the government
the Independent Power Project (IPP), saying “NAPIMS has sent three General Managers agreed upon in August before sending it to
that it has sought the approval of the National as representatives to the committee after it lawmakers for approval, is the framework
Energy Regulation Commission (NERC) to received an invitation three weeks ago for an used to prepare the country’s budget.
generate 2000 MW embedded power. appearance of the Group General Manager. Aside from the oil price assumption, all
The Commissioner for Works and “He was invited to throw light on other details contained in the document were
Transport, Mr Wasiu Dauda, made submissions made by Total Exploration kept the same by the lawmakers in the upper
the disclosure during a meeting with and Production Nigeria handling the Egina house of parliament. It must also be passed
the Management of Ibadan Electricity project but we have not seen him since the by the lower chamber before being applied to
Distribution Company (IBEDC) at IBEDC invitation was sent three weeks ago,” he said. spending plans.
office headquarters in Ibadan. Dauda stated The Vice Chairman of the Committee, Sen. Nigeria is Africa’s biggest oil producer
that the state government is poised to proffer Godswill Akpabio, according to the statement, and crude oil sales make up two-thirds of
a lasting solution to the challenge of power expressed displeasure over the inability of the government revenue. In the second quarter
generation shortfall in the state in order to GMD to appear before the committee. Nigeria emerged from its first recession in
improve the social and economic growth of SWEET CRUDE (NIGERIA), December 8, 2017 25 years which was largely caused by low oil
individuals, corporate organisations, the state prices and militant attacks in the Niger Delta
and the country at large.
The Commissioner explained that the Fuel scarcity to worsen energy heartlands.
The budget framework projects crude
analysis of the energy needs of the State
revealed that Oyo State requires about 1265 as PENGASSAN threatens production of 2.3 million bpd for next year.
It also forecasts growth of 3.5% for next year,
MW, adding that the State Government has
requested for the approval of the NERC to strike rising to 4.5% by 2019 and 7% by 2020.
REUTERS, December 5, 2017
generate 2000 MW embedded power. He The Petroleum and Natural Gas Senior Staff

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SEC begins forensic audit of adoption of projected 5.28 trillion naira


for non-oil revenue and adoption of 1.7
To add value to the project, Fluor will use
its global networks to competitively source
Oando trillion naira for new borrowing. The senate
recommended that relevant committees of
material and equipment that cannot be
sourced locally. Local contractors and vendors
The Securities and Exchange Commission the National Assembly should constantly and will also be used to further develop and
(SEC) will commence a forensic audit of closely oversight Ministries, Agencies and sustain the local labour market, enterprises
Oando, contrary to reports that the audit had Departments (MDAs) on the implementation and economy.
been stopped following the suspension of of programmes to ensure effective targeting of Fluor previously completed Vopak’s
director-general of the commission Mounir beneficiaries. Fuel 2 project at the same location and
Gwarzo. In a letter, the SEC notified Oando NAN (NIGERIA), December 5, 2017 will similarly execute this project in a safe,
group CEO Adewale Tinubu of its decision to socially, economically and environmentally
conduct a forensic exercise into the activities
of the company. Nigerian oil magnate left us responsible manner to benefit future
generations.
The letter, which was signed by SEC acting
director-general Dr Abdul Zubair said the high and dry over mansion FLUOR (US), December 11, 2017

forensic auditors would be at the premises


of Oando to undertake the audit. Zubair sale S.African prosecutors
was appointed by the federal government on
November 30, 2017. extend deadline for Zuma to
A billionaire prince is being sued for GBP1.8
million by a couple who claim he left them
It will be recalled that following the
recent suspension of former SEC director- file arguments over revived
with a “huge hole” in their finances when
he pulled out of a deal to buy their London
general Mounir Gwarzo, facts emerged that
the DG was suspended for looking into the graft charges
mansion. Richard and Deborah Conway say
they were left stranded on the housing ladder
affairs of Tinubu, a close ally of the present when Nigerian oil magnate Prince Arthur South Africa’s National Prosecuting Authority
administration. Eze withdrew from the deal on their GBP5- (NPA) has said that it has extended the
NAN (NIGERIA), December 6, 2017 million home in Mill Hill. deadline for President Jacob Zuma to
However, the Nigerian royal, said to be submit arguments on why he should not be
NASS passes MTEF worth GBP2 billion, denies breach of contract
and is counter-suing the couple for the return
prosecuted for corruption. “They must submit
their representation on the 31st of January,”
The two chambers of the National Assembly of a GBP500,000 deposit. The court heard said NPA spokesman Luvuyo Mfaku.
passed the long-awaited 2018-2020 Medium- they exchanged contracts for the nine- The 783 charges against Zuma relate to a
Term Expenditure Framework (MTEF) and bedroom home in August 2015, but Prince 30 billion rand (US$2.20 billion) government
the Fiscal Strategy Paper (FSP). This followed Eze had been acting through a “go-between” arms deal arranged in the late 1990s. They
the adoption of report of Joint Committees and had never seen the house. were filed but then dropped by the NPA
on Finance, Appropriation, Loans and Debt The 62-year-old prince, the founder of shortly before he ran for the presidency.
Management, Legislative Budget and Research oil firm Atlas Oranto Petroleum, paid a 10% REUTERS, December 11, 2017
and National Planning and Economic deposit of GBP500,000 but now alleges the
Development at both chambers. At the senate, deal was void because the Conways agreed
the report was presented by Senator Yahaya to pay the agent a “secret commission” to E AST AF R I C A
Abdullahi (APC-Kebbi) on behalf of the secure the sale. The Conways, who deny any
committee, while Chairman of the Committee
on Finance Babangida Ibrahim did so at the
inappropriate conduct, said the “go-between”
contacted them initially without Prince Eze’s East African countries
House of Representatives. Both chambers
adopted US$47 per barrel as oil benchmark
knowledge and later raised the prospect of a
“GBP75,000 finder’s fee”. adopts energy security
for 2018 budget and retained the 2.3 million
bpd oil production and market rate of 305
EVENING STANDARD (UK), December 5, 2017
policy
naira to a dollar as proposed by the executive. The East African Community (EAC) has
Similarly, the chambers recommended SOUT H E R N AF R I C A adopted a policy that will enable countries to
manage the security of their energy supplies.
Fluor chosen for Durban The EAC becomes the first bloc on the
continent to have such a policy. The Energy
terminal work Security Policy Framework comes at a time
new discoveries of oil and gas reserves have
Fluor has announced that it was awarded an been made in Kenya, Uganda and Tanzania.
engineering, procurement and construction Elsam Turyahabwe, an energy expert at the
management contract by Vopak Terminal EAC Secretariat said the policy will guide
Durban (Pty) to deliver the Vopak Growth countries as they implement projects to boost
4 Project in Durban, South Africa. Fluor access to energy.
booked the undisclosed contract value in the East African countries have been
fourth quarter of 2017. depending largely on imported refined
The expansion project is part of Vopak’s petroleum. Yohannes Hailu, an energy
programme to facilitate the increased demand economist at the United Nations Economic
for fuel with cleaner specifications in Southern Commission for Africa said the energy
Africa by increasing the capacity of fuel framework will also address disruptions in
storage at its Durban terminal. the supply of imported energy, particularly

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P17


AfrOil New s i n b rie f AfrOil

hydrocarbons, and sharp swings in prices,


which undermine the momentum of Total pledges to support
economic development taking place in East
Africa. Tanzania in oil exploration
“Actions are recommended to restore oil
and gas supplies security in exploration and in four lakes
developmentce,” said Hailu. Projections show Total, the French multinational integrated
that the implementation of planned energy oil and Gas Company, has pledged to
projects will see the region register a surplus. support Tanzania in oil exploration in four
For example, an additional 5,000 MW of lakes, a statement said. The statement was
power will give Kenya surplus capacity in the released by the Directorate of Presidential
2018-2020 period. Communication at State House and said that
THE EAST AFRICAN (KENYA), December 5, the pledge was made by Total chief executive
2017 officers during talks with President John
Magufuli.
Mozambique debt US$96.22 (S$130 million).
Keppel Shipyard’s contract from SOFEC is
According to the statement, Total has
decided to heavily invest in the gas and oil
restructuring to drag on for the fabrication of a turret mooring system
for the newbuild floating liquefied natural
market. The company has agreed to work
closely with the government of Tanzania in
until 2019 at least gas (FLNG) vessel bound for the Coral South
FLNG Project in offshore Mozambique.
the exploration of oil in Lakes Tanganyika,
Eyasi, Wembere and Rukwa.
The BMI Research consultant group Fabrication is due to start in the first quarter Total’s President for Marketing and
revealed that it thought Mozambique’s debt of 2018 with the delivery of the turret Services, Momar Nguer, said the oil company
restructuring process would not be resolved components expected in the first quarter of was in final stages of preparations to start
until 2019 at the earliest, and that lack of 2020. implementation of the oil pipeline project.
financing and pre-election spending would OE DIGITAL (US), December 11, 2017 Nguer made the remarks after president
limit infrastructure spending in the country. Magufuli had asked the oil firm to speed up
“We see it as unlikely that donors and
concessional institutions will re-engage with Eni achieves financial close implementation of the project scheduled to be
completed in 2020.
Mozambique over the coming quarters,” the
consultants write in an economic analysis note for Coral South FLNG XINHUA (CHINA), December 7, 2017

on capital spending.
In the analysis, which Lusa has access to,
Eni, together with its Area 4 Partners, has
announced that the Coral South FLNG multi- Tanzania’s Magufuli
the Fitch consultancy experts say that, with
the approach of the municipal elections in
sourced project financing achieved financial
close, for a total amount of US$4.7 billion to launch nationalism
2018 and legislative elections in 2019, “the
authorities will refrain from cutting current
in the following facilities: BPI Export Credit
Agency Covered Loan, KEXIM Export Credit campaign
expenditure and thus capital spending will Agency Covered Loan, Ksure Export Credit Tanzania’s President John Magufuli it set
inevitably suffer most in fiscal consolidation”. Agency Covered Loan, Sace Export Credit to launch a nationalism campaign at the
This, they continue, will result in “a Agency Covered Loan, Sinosure Export Credit University of Dodoma. The drive, organised by
smaller implementation of infrastructure Agency Covered Loan, Commercial Bank the Ministry of Information, Culture, Sports
projects, which will negatively influence the Direct Loan and KEXIM Direct Loan. and Arts, is aimed at inculcating patriotism
competitiveness of the economy and keep Coral South FLNG is the first project among Tanzanians. Dr Harrison Mwakyembe,
GDP growth well below the trend of recent sanctioned by the Area 4 Partners for the the minister, briefing reporters in Dodoma,
years”. BMI Research predicts a government development of the considerable gas resources said that in recent days unity and solidarity had
deficit of 4.4% this year and 3.8% in 2019, discovered by Eni and its Partners in the been diminishing among the people, including
noting that last year, “capital expenditure Rovuma Basin offshore Mozambique. It leaders, due to lack of nationalism.
almost stopped compared to the previous targets the production and monetization of He added that the ‘Nchi Yangu Kwanza’
year”. the gas contained in the southern part of the (My Country First) campaign, which is part of
Capital expenditure comprises Coral gas reservoir, by means of a floating the Independence commemorations, will help
infrastructure costs borne by the state and LNG plant with a capacity of 3.4 MTPA. A revive the spirit of nationalism as espoused
is of particular importance in Mozambique Sale and Purchase Agreement was signed by the founding leader Mwalimu Julius
due to the weak logistic conditions faced by in 2016 for the sale of 100% of the LNG Kambarage Nyerere. “It’s a shame to see some
large multinationals wanting to invest in the production to BP. people showering praise on leaders who have
country. Eni is the Operator of Area 4, holding a been ejected out of the leadership system due
CLUB OF MOZAMBIQUE (MOZAMBIQUE), 50% indirect interest through its participation to malpractices, especially fraud,” he said.
December 5, 2017 in Eni East Africa (EEA). In March 2017, He said the country cannot industrialise
Eni and ExxonMobil signed a Sale and its economy unless all people embrace
Keppel Offshore & Marine Purchase Agreement to enable ExxonMobil
to acquire a 25% interest in Area 4, through
nationalism. “Development calls for unity and
solidarity, in absence of these, nothing good
inks Mozambique FLNG EEA. The remaining interests in Area 4 are
held by CNODC (20%), Empresa Nacional
can be achieved,” he insisted. Tanzania will
mark its 56th Independence Day celebrations
Keppel Offshore & Marine, through its de Hidrocarbonetos E.P. (ENH, 10%), Kogas on December 9.
subsidiaries, has signed new contracts from (10%) and Galp Energia (10%). THE EAST AFRICAN (KENYA), December 7,
Petrobras and SOFEC, worth in total about ENI (ITALY), December 6, 2017 2017

P18 w w w. N E W S B A S E . c o m Week 49 12•December•2017


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