Zambia Makes Block Awards

The Minister of Mines, Energy and Water Development of Zambia, Yamfwa Mukanga, confirmed the award of blocks that the government put up for auction earlier this year.

The block awards went to Troisad with Block 8; blocks 25, 28, and 29 went to Bowleven; Segocoa was awarded stakes in blocks 29 and 43, Rift Petroleum scored blocks 40 and 41; while Surestream picked up Block 42.

Swala Energy, who bid on blocks 31, 42, and 44, was not awarded a stake in any of the three; however, it still has hopes of gaining access to Blocks 31 and 44.

Dr. David Mestres Ridge (CEO) of Swala said, “The bidding process has been a long and competitive one, and our Zambia team has worked tirelessly to advance the company’s interests. We are obviously disappointed not to have been awarded Block 42 in Zambia but look forward to a more positive outcome with the remaining bids for Blocks 31 and 44.”

TANZANIA: Statoil and ExxonMobil Hit the Gas

Partners on Tanzania’s offshore Block 2, Statoil and ExxonMobil, have made a new natural gas discovery with the drilling of their latest well. The well, the Mronge-1, gave the partners an additional 2-3 Tcf of gas in place and marks the partners’ fifth discovery on the block.

The Mronge-1 well discovered gas at two separate levels. The main accumulation is at the same stratigraphic level as proven in the Zafarani-1 well in Block 2. The Zafarani-1 discovery was made in 2012 and was a play opener for the block. The secondary accumulation was encountered in a separate, younger gas-bearing reservoir, in a play which previously has not been tested in Block 2.

Mronge-1 was drilled at 2,500 meter water depth using the drillship Discoverer Americas and is located 20 km north of the Zafarani discovery

East Africa: South Atlantic Petroleum (SAPetro) Makes Bold Move

Nigerian-based South Atlantic Petroleum (SAPetro) has boldly placed its bid alongside the majors to be the first to discover oil offshore East Africa, from its assets offshore Madagascar and the French territory of Juan de Nova, acquired from Roc Oil in 2011. SAPetro is acquiring a large, 9,000km2 3D seismic survey in four areas to examine prospects identified by earlier 2D seismic. The PGS Ramform Sterling vessel is carrying out the survey, which is expected to complete early next year.

Oil blockades threaten Libya’s financial security

At the end of November, prime minister Ali Zeidan warned that the government will need to borrow on the international markets to pay salaries. A blockade of most of Libya’s oil export terminals means that since July, revenues have at most been half of expected levels and production has frequently fallen below one-tenth of total capacity. According to one estimate presented to African Energy, the entire 2013 budget of about $60bn has already been spent, plus a further $20bn which remained unspent from 2012. Several sources have suggested that inroads may have been made into the Central Bank of Libya’s foreign currency reserves, although the official position is that they are untouched.

To Increase Reserves, Majors Meet Minors in Africa's Deep Waters

The need to maintain supplies of oil and gas in the face of growing competition from new players, and pressure to generate profits during a period when downstream margins are lackluster, has led to an upsurge in activity by the majors in frontier areas like Benin, South Africa, Kenya and Madagascar, which were previously seen as the territory of more nimble independents. Total’s secretary general Africa Abiodun Afolabi told Global Pacific & Partners’ Africa Upstream conference in Cape Town on 27 November that the French major planned exploration drilling in five countries in 2014.

Tanzania Lays Down New Gas Policy

Tanzania’s  newly approved Natural Gas Policy makes clear that the government prioritizes domestic supply of Natural Gas over LNG exports, which have been the focus of much media attention.

As gas discovery after spectacular gas discovery has been made offshore Tanzania in the last three years, global attention has focused on news that this was going to be a new export hub. Their Indian Ocean location supposedly makes the Tanzanian and Mozambican gas resources highly competitive for the Asian gas market. The Tanzanian Government itself claims that the country has about 43 Trillion Cubic Feet of Gas Reserves.

In the new policy, however, the Tanzanian Government “envisages coordinated utilization of gas on the basis of a National Gas Utilization Master Plan, and that to the extent possible, detailed technical and economic analysis should guide selection of the best project for implementation that will address mutual interest of investors and the Nation. The Government, through its entities, intends to participate in the selected investment projects including GTL and LNG value chain”.

Nigeria Opens Margainal FIeld Bids, Issues Guidelines

The second Nigerian Marginal Field Bid Round throws up 31 oil and gas fields, 15 of which are in shallow water, (and 16 onshore), all in the Niger Delta basin. The round is open only to Nigerian Exploration and Production Companies. Guidelines for Farm Out and Operations of Marginal Fields 2013, published on the DPR website declares that “The indigenous company shall be substantially Nigerian and shall be registered solely for exploration and production business.  At the pre-qualification stage, attention shall be paid to the following regarding the promoting team:

• Background and experience with exploration and production at sufficiently high level.
• Niger Delta representation.
• Federal Character representativeness.

The application form (for bidding) shall attract non-refundable chargeable fees as follows:

• Application fee: =N=200,000.00 (Two Hundred Thousand Naira) per field.
• Data prying fee: $3,000.00 (Three Thousand US Dollars) per field. Data prying shall be on appointment.
• Bid Processing Fee: Naira) =N=300,000.00 (Three Hundred Thousand Naira) per field.

Part of the criteria for evaluation is that a company shall confirm willingness to pay a Signature Bonus of $300,000 (Three Hundred Thousand US Dollars) if successful. Such monies will be paid into the CBN/Accountant –General FGN Account by Telegraphic Transfer.

The Nigerian government’s definition of a marginal field “is any field that has (oil and gas) reserves booked and reported annually to the Department of Petroleum Resources (DPR) and has remained un-produced for a period of over 10 years.

Algeria: ConocoPhillip finally Exits Algeria

ConocoPhillips is now officially out of Algeria. The company completed the sale of its Algerian business unit to Pertamina. The sale price on the transaction was $1.75 billion, which resulted in proceeds of $1.65 billion, including customary adjustments.

“We are pleased to complete this transaction with Pertamina,” said Don Wallette, executive VP, Commercial, Business Development and Corporate Planning. “We appreciate the long and productive relationship we have had with the government of Algeria and with Sonatrach, the national oil company of Algeria.”

The company’s divestiture proceeds from 2012 through Q3 2013, plus this sale and the recently completed Kashagan sale, have totaled approx. $12.4 billion. These proceeds will be available for general corporate purposes, including investments in the company’s organic growth programs.

Total Plans South African Spud

Total will drill an exploration well offshore South Africa in 2014 according to its general secretary for Africa, Abiodun Afolabi. The company acquired a 50% stake in the 19,000 sq km Block 11B/12B from CNR in September of this year. The block is located in the Outeniqua Basin off the southern coast of South Africa.

“Total becomes the operator of the block…where we will drill next year our first exploration well,”  Afolabi said while speaking at Global Pacific & Partners’ 20th African Oil Week being held in Cape Town.

Afolabi said that South African authorities had also granted permission to convert a technical cooperation permit on another block, Outeniqua South, where the company anticipates shooting 7,000 km of 2D seismic data.

The French firm is targeting three million barrels of oil a day by 2017, with deep-water production in Africa being one of its key drivers. “We expect to see an increasing proportion of the operated production in Africa coming from the deep offshore, (which) has risen steadily from 34% in 2006 to 72% in 2012,” Afolabi said.

Africa's Oil Consumption On Rise

Africa is the region with highest increase in oil consumption globally – 5% in 2012 versus only a 1% increase Globally

CAPE-TOWN, South-Africa, November 25, 2013/ – The recent oil and gas finds in Africa will continue to have a positive impact on local economies, if local African suppliers, service providers and other businesses are geared up to service this growth.

This is according to Steve Harley, President of the Energy Sector, for DHL Customer Solutions & Innovations (http://www.dhl.com). Harley says that these energy finds provide many possibilities for local businesses, to echo the express operator’s own marked increase in the transportation of energy-related material in the region.

Harley says that forecasts expect African oil supply growth to continue over the next 25 years, with predicted ranges of growth over the period of between 0.5 million and 2.0 million barrels per day. “Africa will need to adapt in order to keep up with the demand, as well as evolving trends in this highly competitive sector.”

He says that globally, the steady and reliable supply of energy is critical to economic activity, and due to Africa’s availability of the resource, it is expected that the continent will see continued and steady economic growth.

“We have also witnessed an increased demand for the resource on the continent, and currently Africa is the region with highest increase in oil consumption globally – 5% in 2012 versus only a 1% increase globally. This is likely to continue as many of the fastest growing economies are situated on the continent.”

Harley does warn though that, as the easily obtainable oil reserves have been has depleted, that most of the new developments are either very remote or technically challenging, which brings issues of infrastructure, transportation and expertise to the fore.

“Forecasts predict that conventional oil production will decline by five percent per year. Extraction from unconventional sources is more complex and relatively more expensive from a supply chain perspective. As such, customers will need complementary expertise from integrated logistics suppliers to meet the challenges of these new geographies and technologies.”

Harley points to DHL’s recent global white paper on Maintenance, Repair and Operations (MRO) supply chain management for energy companies (http://www.dhl.com/energywhitepaper), which shows the oil and gas businesses will require integrated suppliers that are able to support them with end-to-end supply chain solutions. According to the white paper, logistics suppliers need to provide a global footprint in combination with local market expertise. As a trustworthy partner, they also need to drive cost and process optimization and maintain safety and compliance both on and off-site.”

“This is particularly true in Africa,” notes Charles Brewer, Managing Director for DHL Express Sub-Saharan Africa. “While the continent is showing promise, issues around infrastructure, regulatory hurdles, and lack of an integrated supply chain in most markets, can be a major hindrance for energy businesses. Couple that with the need to optimise production and improve supply chain management to enhance service and reduce cost, and you understand the need for integrated suppliers to introduce more robust metrics, optimize the inventory and find cost-effective transport solutions.”

Brewer concludes, “This highlights the need to partner with an experienced provider who has extensive knowledge on the region. DHL has an unrivaled global presence and experience to ensure partners are offered integrated solutions that address today’s energy industry challenges.”

-From petroleumafrica.com

Angola and Tanzania Figure Broadly in Statoil’s 2014 Budget

Africa will see a bit more action from Norwegian firm Statoil as its focus targets Angola and Tanzania. The company’s spending for 2014 will remain at the level that was seen in 2013, which was a record for the company. Other regions to see the company’s efforts focus on are Norway and the Gulf of Mexico; the company also plans to drill in the Arctic.

Exploration chief Tim Dodson told Reuters “Next year you can expect about the same level of activity we had this year and the same amount spent, more or less.”

“Maybe not quite as many wells, but because of Angola, there will be a few more expensive wells next year,” Dodson said. “There will be a big tick up in (exploration in) Angola next year, continued drilling in Tanzania, … one or two wells in the Gulf of Mexico, two wells the Faroes and one well in the UK probably.” He continued that in Tanzania exploration will continue and about half of its wells there will be exploration and half appraisal.

Taleveras Picks up More Acreage in Cote d’Ivoire

Taleveras, an indigenous firm out of Nigeria, has signed another upstream deal this year giving it a stake in a block offshore Cote d’Ivoire for Block CI-523. The President and CEO of Taleveras Group, Igho Sanomi, who led the firm’s delegation, signed the deal with officials of the Ministry of Energy and Petroleum, Petroci, and Afren.

Prior to this latest deal Taleveras had acquired an interest in Afren’s CI-525, located near the Ghanaian border. The new investment portfolio, which covers Block CI-523, contains the Ibex oil and gas discovery, while CI-525 covers the Kudu and Eland gas discoveries.

In mid-2011 Taleveras signed a MoU with Petroci for collaboration in upstream activities and since then has signed PSCs four offshore exploration blocks. Following the signing of one of these PSCs the company farmed down a stake, bringing in Russian oil giant Lukoil on Block CI-504.  The deal gave Lukoil a 65% stake in the block leaving Taleveras and Petroci with 25% and 10% respectively.

Nigeria: Chevron contributes 12 Fields To Marginal Field Auction

Close to 11 years after the first marginal field awards were granted, Nigeria has launched a second process, with 31 fields in the basket.

15 of the fields planned for auction to Nigerian independents are in shallow water (continental shelf), while the remaining 16 are located onshore, all in the Niger Delta basin, according to Diezani Alison-Madueke, the country’s minister of petroleum resources.

The Department of Petroleum Resources, DPR, will, within the next two weeks, undertake a road show to different parts of the country to enlighten stakeholders about the exercise, the minister said. The process is expected to end around mid 2014.

Chevron submitted 12 fields to the DPR for the purpose, including Olure, Bime, Omofejo in Oil Mining Lease (OML) 49. It also has Shango, Meta, Azama, Ruta and Oloye in shallow water OML 95, as well as Obira and Kudo, also in shallow water OML 89. At the time of the submission, it was not clear if all these fields were in the 31-field basket. 

For the first time, fields operated by Nigerian Agip Oil Company (NAOC) and ExxonMobil are going to be in a marginal field auction.  NAOC submitted two fields, including the gas field Ajaketon, located in OML 63 and the Odimodi oil field, located in OML 62.

Tanzania’s Gas Policy Prioritizes Domestic Market

Tanzania’s newly approved Natural Gas Policy aims to “ensure that the domestic market is given first priority over the export market in gas supply.” Gas producers in the country will have domestic supply obligation and localization is emphasized down the value chain.

The country currently generates 450MW of electricity from gas-fired plants, fuelled by reservoirs from marginal, shallow water fields. In the last three years however, deepwater discoveries have displayed the country prominently on the gas map of the planet, with the Tanzanian government official estimates of gas reserves standing at 42.7-trillion cubic feet as of September 2013.

The gas policy, approved in early October 2013, will be adopted into a law of the Tanzanian parliament, christened the Natural Gas Act, which regulates mid and downstream activities of the industry, including gas processing, liquefaction, transportation, storage and distribution. It calls for the establishment of a natural gas revenue fund to ensure transparency and accountability over collection, allocation, expenditure and management of all natural gas revenues.

The policy prescribes that natural gas processing take places on shore, so that activities around the projects can impact the local economy more.

Nigeria: Heritage Oil and Bayelsa Oil Company Sets up New Indigenous Company

Heritage Oil has agreed to enter into a joint venture with Bayelsa Oil Company one of the indigenous oil companies in Nigeria owned by the Bayelsa State of Nigeria government for the purpose of setting up a new indigenous oil and gas company, which would be called Petrobay Energy.

Heritage Oil will own 45% of Petrobay Energy, which will be based in the Bayelsa State capital Yenagoa, in the Niger Delta. The venture will give Heritage access to more Nigerian assets while complying with Nigeria’s strict local content laws. Heritage said Petrobay would look to acquire production, development and exploration assets from international oil companies, and would combine “Bayelsa Oil Company’s indigenous support from state government and local communities with Heritage’s strong technical track record and access to financial markets”.