AfrOil - oil & gas news for Africa

For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside…

Copyright © 2013 NewsBase Ltd.

www.newsbase.com Edited by Ed Reed

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

22 January 2013

Week 03

Issue 473

News Analysis

Intelligence

Published by

NewsBase

COMMENTARY 2

The In Amenas attack 2

Nigeria takes Qua Iboe crunch 4

PIPELINES & TRANSPORT 5

Tender issued for Kenya’s new pipeline 5

South Sudan remains keen on pipeline to

Kenya 5

Piracy threat increasing in West Africa 6

INVESTMENT 6

Perenco signs Cameroon exploration

contract 6

PERFORMANCE 7

Eni confirms Sankofa find with appraisal

well 7

Somaliland aspires to oil future 8

Frost: South African shale gas years

away 8

POLICY 9

Griffiths charged with Chadian

corruption 9

PROJECTS & COMPANIES 9

Pura Vida signs up Gabonese block 9

Liberian 3-D seismic under way 10

NEWS IN BRIEF 11

CONFERENCES 21

NEWS THIS WEEK…

Algeria crisis Algiers demonstrated its willingness to engage terrorism last week in its response to the In Amenas assault, but can the country keep its facilities – and workers – safe?

Algeria has committed to providing more security for its facilities, as has Libya, which could well face similar attacks. (Page 2)

East African links South Sudan is still casting around for export options, while Kenya is re-tendering a long-planned products pipeline.

Kenya has taken a first step in tendering a pipeline from Mombasa to Nairobi, which was to have been worked on by Libya’s Tamoil. (Page 5)

A South Sudanese official has reiterated interest in an export pipeline through Kenya, but this will be an expensive proposition. (Page 5)

South African shale Frost & Sullivan believes the shale resource of the Karoo Basin will not be commercially produced for at least seven years. (Page 8)

AfrOil AFRICA OIL & GAS MONITOR

AfrOil 22 January 2013, Week 03 page 2





The attack on Algeria’s In Amenas gas

facility began with the ambush of a bus

carrying workers and ended with a death

toll said to be more than 70 – raising

fresh concerns about security in the Sahel

region.

Details of the assault are still emerging

but it seems the January 16 dawn ambush

on the bus led to the deaths of an

expatriate worker and an Algerian

security guard. The attackers, who appear

to have been members of Mokhtar

Belmokhtar’s al-Muaqioon Biddam –

which can be translated as Signed in

Blood – brigade, then stormed the

Tigantourine plant, taking a number of

hostages.

It appears the kidnappers attempted to

move some of their hostages on January

17 but the Algerian army attacked with a

helicopter gunship, leading to the death

of between 20 and 40 people. Both

kidnappers and kidnapped died in the

Algerian assault.

The Algerian army

carried out a final

assault on January 19.

Algerian Prime

Minister Abdelmalek

Sellal, on January 21,

said 37 foreign

workers were believed

to have died. Sellal

also said 29 militants

had been killed and

that three had been

captured. Around 680

Algerian workers and

more than 100

expatriate workers

were freed, according

to Algiers. According

to reports, attackers told locals and

Muslims that they would not be harmed,

and that they were targeting Westerners

and Christians.

The Jamestown Foundation reported

that responsibility for the attack was also

claimed by a rival group, Katibat al-

Mulathamin – which it translated as

Brigade of the Wearers of the Veil.

Grim tally

At the time of the attack there are

thought to have been around 800 workers

at In Amenas, of whom 135 were

expatriates. Figures provided by the UK

government suggest at least 12 workers

are dead and another 20 missing – and

the same source repeated Algeria’s

statement that 37 foreign hostages had

been killed. Over 30 terrorists had died,

UK Prime Minister David Cameron said,

but a “small number” are in Algerian

custody.

Cameron went on to praise the

Algerian response and said the

responsibility for the deaths “lies

squarely with the terrorists.”

As of January 20, BP said four of its

workers were still missing and that it had

18 employees at the facility when the

attack began. The company said it had

evacuated non-essential staff from In

Salah, Hassi Messaoud and other

locations and that the security situation

was under “close review.”

Statoil released the name of five

employees still missing on January 20,

noting that it had 17 workers at the plant

at the time of the assault.

A statement from Sonatrach on

January 20 “condemned and deplored”

the terrorist attack on Tigantourine and

offered condolences to its partners and

the Algerian army for the dead, but did

not provide information on the status of

its workers.

COMMENTARY

The In Amenas attack Algeria has weathered the last few years in relative calm, but the assault last week on the

In Amenas joint venture was a shocking reminder of both local and regional problems

By Chris Moghtader and Ed Reed

The terrorist strike, and its response, ran for four days and led to an estimated 70 deaths

French intervention in Mali and insecurity in the Sahel have been pointed to as motivating factors

Algeria and Libya have responded with assurances of additional security forces for energy facilities






Insecurity

The attack has been widely linked to a

French decision to send a military

intervention force to help resolve the

ongoing crisis in northern Mali, which

began on January 11. The militants

themselves reportedly called for a French

withdrawal as one of their demands for

the release of hostages. However, given

the scale of the attack, at more than 1,000

km from Mali itself, it seems unlikely

that it could have been planned and

executed within such a short period.

There was no consensus from Algerian

officials as to where the attack had

originated from, although Libya and

Niger were also mentioned.

It seems likely the Algerians were

spurred into action by concerns that the

terrorists would escape with hostages

over the Libyan border, which is very

close to In Amenas. Once the decision

had been taken, Algerian Special Forces

would have prioritised killing the

assailants, over saving hostages. The

stark line taken by Algiers can be seen in

a statement by Algerian Communications

Minister Mohamed Said Belaid, who said

there would be “no negotiation, no

blackmail, no respite” for terrorists.

The apparent mastermind of the attack,

Belmokhtar, is well known throughout

the region. A former member of al-Qaeda

in the Islamic Maghreb (AQIM), he is

renowned as much for banditry and

smuggling as he is for his terrorist

activities. He has been implicated in

numerous kidnappings of foreigners

throughout the region in recent years,

including a Canadian diplomat, Robert

Fowler, who was held for around four

months.

Regardless of whether or not the attack

can be credibly linked to the intervention

in Mali, it is symptomatic of wider

insecurity throughout the Sahel. Algerian

officials had warned of a growing

terrorist threat in the south of the country

throughout 2012, particularly following a

suicide attack in the southern oasis city

of Tamanrasset in March.

Insecurity in neighbouring Mali, Niger

and Libya, combined with weak to non-

existent border control throughout the

region, while a deluge of arms and

military equipment left over from the

Libyan conflict, have left Algeria

increasingly exposed.

Attacks against the energy industry

have been only sporadic in recent years

in Algeria. Where they have occurred,

they have tended to target vehicles

belonging to oil and gas companies,

rather than the installations themselves. It

is not clear whether this latest attack is

the beginning of a new trend, or whether

it evolved from an attack on a convoy

into something more serious.

Cameron, speaking to the UK’s

Parliament on January 21, said the

international terrorist threat was shifting

away from Afghanistan and Pakistan

towards Yemen, Somalia and parts of

North Africa.

In Amenas

The four wet gas fields that make up the

east Algerian development are operated

by a joint venture involving BP,

Sonatrach and Statoil. Contractors from

Japan’s JGC Corporation were also at the

facility and it is thought that nine of the

hostages killed were Japanese.

Algerian Minister of Energy and Mines

Youcef Yousfi told the state’s

information agency, APS, on January 21

that damage to the plant was minor and

that production would restart in two days.

However, there were reports that the

terrorists had laid mines around the

facility and BP declined to comment on

timing.

In Amenas produces around 9 billion

cubic metres per year of gas – around

10% of the country’s total – and 60,000

barrels per day of liquids, said JBC

Energy.

The attack “may be a sign that the

political stability of the Islamic country

is on a downswing,” JBC continued,

noting also that gas exports from Algeria

to Europe had declined in 2012 by 4%.

“The country is therefore the latest

candidate to be added to the long list of

countries at risk from political turmoil in

the MENA region and could underpin the

geopolitical risk premium further.”

Algerian exports to Italy fell to 60-65

million cubic metres on January 17, from

normal levels of 70-75 mcm per day,

Reuters reported.

RBC Capital markets said BP and

Statoil both had working interest stakes

of 46% in In Amenas, while Sonatrach

held the remaining 8%. “Work is

presently taking place on an expansion

project which was due to [be] completed

in [the second half of 2013]. We have no

incremental volumes in 2013, then 6,000

bpd and 17,000 bpd each in 2014 and

2015.”

More caution

Given that details are still emerging from

the Tigantourine assault, it would be

premature to leap to conclusions.

However, it seems likely that in the near

term, companies will be far more

cautious in making development plans in

remote areas of the Sahel – and require

more assurances from local forces,

whether in Algeria or Libya.

Algeria intends to hold a bid round

later this year and is in the process of

changing its hydrocarbon laws to make

the country more attractive to bidders.

This terrorist assault may increase the

pressure on Algiers to strike a more

conciliatory tone with foreign companies.

There has been some suggestion that

companies will use more local workers,

reducing their expatriate exposure. This

is an appealing idea, and will go down

well with local communities, but the

skills required are in short supply so may

not be practical.

Libya too will face pressure to increase

security at its energy installations as,

following the attack on the US consulate

in Benghazi in September 2012, concern

is running high.

COMMENTARY






A recovery in Nigeria’s crude oil exports

was dealt another blow last week with

news that shipments of the country’s Qua

Iboe grade would suffer delays in

February.

The news comes just a month after

ExxonMobil lifted a force majeure – a

clause which means a company is not

able to meet contractual obligations

because of events beyond its control – on

Qua Iboe, which is Nigeria’s main export

grade. Disruptions to Qua Iboe loadings

mean that three out of 11 cargoes that

were initially scheduled to load in

February will now be pushed back into

March, trade sources told the Energy

Tribune.

Although it is not clear why the delay

has occurred, one trader said that

February’s production forecast was

simply overoptimistic. “It’s just an

adjustment of production, [which] was

forecast too optimistic,” he said.

Nigeria’s oil production had been

expected to rise around 10% in February

after recovering from the floods of late

2012.

Italy’s Eni also lifted its force majeure

on Nigerian oil exports last week, raising

hopes that an end was in sight for

Nigeria’s supply problems. “We have

removed the force majeure on Brass,” an

Eni spokesman said on January 16.

Eni had first declared force majeure in

early November and traders had reported

delays of more than a month for the

Brass River grade, which typically

accounts for around 5% of Nigeria’s total

oil exports.

Royal Dutch Shell also declared three

force majeures on its Nigerian oil and gas

output in the fourth quarter of last year.

The company has been critical of the

Nigerian government’s failure to stem

endemic oil theft in the country – which

has also been a factor behind production

shortfalls and export delays.

Pipe problems

Although Shell itself has “made great

progress over the last two years in terms

of actually dealing with operational

issues, and in cleaning up previous years’

sabotage and operational spill sites” in

Nigeria, at the same time the “stealing

and sabotage of crude oil has

intensified,” Shell’s CEO, Peter Voser,

said in a December statement posted on

the company’s website.

“The overall security situation in 2012

has worsened,” he said. “Shell alone

cannot solve these issues. It needs

concerted government action to reduce

[the] theft of crude.”

Nigerian National Petroleum

Corporation (NNPC) has lost around 165

billion nairas (US$1.06 billion) over the

past four years to oil product theft and

pipeline vandalism, one of its

subsidiaries, the Pipelines and Products

Marketing Company (PPMC), said on

January 17.

“We are talking to legislators at the

National Assembly on proper sanction

and prosecution of people that engage in

oil theft and pipeline vandalism,” said

PPMC’s managing director, Prince

Haruna Momoh. “We believe that

between now and the end of June, we

should be able to come up with a

solution.”

“We at the NNPC are still keeping the

mandatory 30-day national stock reserve,

as directed by the Minister of Petroleum

Resources, Diezani Alison-Madueke, but

we always have challenges because of

the rate at which pipelines are being

vandalised, practically on a daily basis,”

The Nation quoted him as saying.

Pirates

It is not only onshore installations and

pipelines that are being targeted by

thieves. Nigerian authorities last week

charged 23 people with oil theft after the

navy seized two ships carrying allegedly

stolen crude oil late last year.

Nine Nigerians and two Ghanaians

were arrested when the navy intercepted

the Mount Eve vessel, which was

carrying 16,500 gallons (75,000 litres) of

refined fuel. A week later, the navy

arrested 10 Indians and four Nigerians

aboard the Ashkay vessel, which was

carrying 35,000 gallons (161,000 litres)

of allegedly stolen fuel.

The number of attacks on oil tankers

offshore Nigeria nearly doubled in 2012,

from 11 in 2011. In December 2012, 11

attacks were reported on ships in the Gulf

of Guinea, most of them involved in the

oil business, UPI reported.

Piracy off West Africa “is reaching

dangerous proportions,” the International

Maritime Bureau (IMB) said in October

2012. “It’s a serious problem,” said IMB

director Pottengal Mukundan. “The

pirates are getting quite audacious, with

increasing levels of violence being used.”

Corruption is also a perennial problem.

In October last year, a leaked report

commissioned by the government alleged

mismanagement of gas deals had cost the

Nigerian state US$8.6 billion between

2009 and 2011.

COMMENTARY

Nigeria takes Qua Iboe crunch The same old problems continue to curb Nigerian production hopes, while piracy figures

mount

By Helen Castell

Qua Iboe exports in February will come in below previous expectations

Shell has complained of mounting pipeline insecurity, which has restricted exports

Production is returning after the floods of November






That said, Nigeria’s oil exports have

been recovering slowly since the flood

waters receded. In December, a pick-up

in oil exports helped Nigeria’s state

revenue rebound 2% to 581 billion nairas

(US$3.7 billion).

The lift in oil exports occurred “even

as crude-oil production and lifting

encountered several disruptions as a

result of increased bunkering activities

and ongoing maintenance” on pipelines

and other facilities, Nigeria’s accountant

general, Jonah Otunla, said last week,

without releasing specific oil export

figures.

Plans for the construction of a second

products pipeline linking Kenya’s port

city of Mombasa to the capital, Nairobi,

moved forward last week when

invitations went out for procurement,

construction, testing and commissioning

of the project.

The new US$300 million pipeline,

which in future could be extended to

Kampala in Uganda, will replace the

current one whose 30-year lifespan has

ended, according to a report by Reuters.

The undertaking comes after an earlier

attempt to extend the current pipeline,

terminating in Eldoret town in western

Kenya to Kampala, under a contract with

Tamoil East Africa was put off.

Tamoil was contracted to re-design the

pipeline to move fuel in both directions

and also expand it from six inches (152

mm) to 10 inches (254 mm), a plan that

drove up the cost of the project from the

initial US$80 million to US$300 million.

Last week, Kenya Pipeline Company

(KPC) called for expressions of interest

(EOI) in the design of the 450-km

pipeline, as the country seeks to ease the

transportation of fuel from Mombasa,

providing an alternative to the present

system of unreliable trucking.

Submissions must be delivered to KPC

by February 28.

“The new pipeline is designed to meet

petroleum products demand for the

eastern Africa region up to the year

2044,” KPC said in a statement.

Much of the oil trucked from

Mombasa is destined for landlocked

Uganda, Rwanda and Burundi. However,

the challenges of poor roads have led to

delays in the delivery of fuel, creating

supply gaps in the three economies.

KPC runs a pipeline from Mombasa to

Nairobi, which extends to Nakuru, before

branching to Eldoret, in Kisumu.

Those companies hoping to take part

need to meet a number of KPC’s

requirements, including 10 years of

experience on similar work and audited

reports for the last five years.

A South Sudanese diplomat has said his

country remains eager to build an oil

export pipeline to Kenya.

South Sudan’s ambassador to Nairobi,

Ngurduong Majok, indicated in a recent

interview with The EastAfrican that Juba

still saw the proposed link as the best

long-term option for moving crude to

market. South Sudan intends to construct

the 2,000-km pipeline regardless of the

outcome of negotiations with Khartoum,

he said.

South Sudanese officials began talks

with Kenya on the project in the first half

of 2012, saying that they hoped to begin

construction as early as June, with work

wrapping up about 18 months later.

However, the two sides have yet to reach

agreement.

The ambassador told The EastAfrican

that Juba and Nairobi were still in talks

on the project but did not say when a deal

might be concluded. The US$5-6 billion

price tag for building the pipeline, which

will run from Juba to Lamu, would be

covered by revenues earned from oil

exports, the newspaper noted.

In the meantime, South Sudan remains

dependent on an existing export line that

runs through Sudan. That pipe has not

carried any South Sudanese crude during

the last 12 months, owing to a dispute

between Khartoum and Juba over transit

fees. In turn, the idling of the pipeline

has forced South Sudan to freeze oil

production.

The two sides signed a deal on transit

shipments in late September, saying they

hoped to see crude flows resume within a

few months.

COMMENTARY

PIPELINES & TRANSPORT

Tender issued for

Kenya’s new pipeline

South Sudan remains keen

on pipeline to Kenya






Several weeks ago, the leaders of

Sudan and South Sudan reiterated their

commitment to upholding the deal.

However, South Sudan has yet to bring

its fields back on line, partly as a result

of continued clashes with Sudan over

security issues and jurisdiction over the

Abyei region.

Trucking option

Meanwhile, a group of US senators,

during a visit to Juba last week, said they

did not expect Khartoum to uphold its

share of commitments under the

agreement signed in September 2012. As

such, South Sudan should proceed with

plans for moving oil to market by truck,

the senators suggested.

They said the US government would

support this scheme, which was mooted

last year by South Sudanese Oil Minister

Stephen Dhieu Dau. The minister said

last May that Juba wanted to use tanker

trucks to export at least 35,000 barrels

per day – equivalent to 10% of the

country’s production – via Ethiopia.

The Sudan Tribune noted, though, that

existing roads in South Sudan and

Ethiopia could not withstand heavy

traffic from tanker trucks. New roads will

have to be built to facilitate large-scale

oil exports, it said.

Pirate attacks have fallen to a five-year

low around the world, mainly as a result

of successful action against Somali

pirates, but the waters off the coast of

East Africa remain the world’s most

dangerous, while risk is increasing

offshore West Africa.

Assaults in Somalia and the Gulf of

Aden – reported by 75 ships in 2012,

compared with 237 in 2011 – accounted

for 25% of incidents worldwide last year,

according to a global piracy report

published by the International Maritime

Bureau (IMB) on January 16.

The international watchdog said the

number of Somali hijackings had halved

from 28 in 2011 to 14 last year, largely

because of “pre-emptive strikes and

robust action against mother ships” by

several navies and the work of private

armed security teams, plus the

application of “best management

practices” by ships’ crews.

However, it warned that the threat and

capability of heavily armed Somali

pirates remained strong and that a

continued naval presence was essential to

combating buccaneers. “This progress

could easily be reversed if naval vessels

were withdrawn from the area,” said the

IMB’s director, Captain Pottengal

Mukundan. IMB also said piracy was on

the increase in West Africa’s Gulf of

Guinea, where there is currently no

engagement of international navies for

counter-piracy activity. It reported 58

incidents in the region during 2012,

compared with a total of 46 incidents in

the area during 2011. Last year there

were 10 hijackings and 207 crew

members taken hostage, with the use of

guns during an attack having been

reported on at least 37 occasions.

Attacks in Nigerian waters reached 27

last year, compared with 10 in 2011.

Togo experienced 15 attacks, up from

five in 2011, while Cote d'Ivoire

recorded an increase from one pirate

assault in 2011 to five last year.

“Now, we're seeing more abductions of

sailors from oilfield supply vessels off

Nigeria, and tankers being hijacked as far

west as Abidjan. This type of violent

maritime criminality shows no sign of

decreasing any time soon,” according to

an intelligence analyst from security firm

AKE, quoted by Reuters.

Only Benin reported a reduction in

piracy, with its figures down from 20 in

2011 to two events last year, IMB said.

Anglo-French independent Perenco has

signed a contract with Cameroon’s state-

run Societe Nationale des Hydrocarbures

(SNH) to drill two wells in the Atlantic

coastal Rio del Rey Basin’s Moabi block.

According to the agreement, said

Perenco on January 15, it will explore the

offshore block, which covers 137.13

square km.

Perenco will undertake seismic data

collection on the area for three years and

drill two wells to a minimum depth of

1,100 metres. Depending on the results

obtained, the contract could be extended

for another two years.

PIPELINES & TRANSPORT

Piracy threat increasing

in West Africa

INVESTMENT

Perenco signs Cameroon

exploration contract






Perenco is investing 17.5 billion CFA

francs (US$35.5 million) in this first

phase of the project.

There are options for two further

exploration phases, both running for two

years each, with a well required to be

drilled in each additional period.

Cameroon raised about 477 billion

CFA Francs (US$950 million) from oil

production over the first nine months of

2012, up 9.3% on the same period in

2011, according to an official statement

handed to reporters in the capital

Yaounde.

One of the most recent discoveries in

Cameroon was made by Chinese-owned

Addax Petroleum, which said in October

that it had discovered new offshore oil

and gas reserves in Bakassi, at its

Padoux-IX exploration well in its Iroko

block in the country’s southwest region.

SNH is working with Addax Petroleum

in several blocks in the oil-rich Rio del

Rey Basin, where the Bakassi peninsula

is situated.

In the gas sector, Scotland’s Bowleven

has announced its intention to begin

production at its offshore Sapele wells by

the end of 2015 or 2016.

Eni’s first appraisal well in Ghana’s

Offshore Cape Three Points (OCTP)

block has confirmed the commerciality

of the Sankofa discovery. This is

estimated to contain around 450 million

barrels of oil in place, with recoverable

resources of up to 150 million barrels

including gas, associated liquids and oil.

Sankofa East 2A encountered 23

metres of gas and condensate

gross pay – of which there were

17 net metres – and 76 metres of

gross oil pay – with 32 net metres

– in good Cretaceous sands, Eni

said in a statement on January 17.

Data acquisition has confirmed

hydraulic communication in the

oil-prone reservoir between the

discovery and the appraisal wells,

the Italian company said. More

work is under way on planning the

development of the reserves.

The Sankofa East 2A appraisal

well reached a total depth of 4,050

metres, in 990 metres of water in

the OCTP block, in the Tano

Basin, approximately 50 km from

the Ghanaian coastline. It was

drilled 8 km southwest of the

Sankofa East X1 discovery well,

which contains the same reservoir

sands and lies around 38 km east

of Ghana’s Jubilee field.

Engineering studies to develop and

ensure commercialisation of the block

are also ongoing under the terms of a

Memorandum of Understanding (MoU)

recently signed by Eni, Vitol and Ghana

National Petroleum Corporation (GNPC)

with the Ghanaian Ministry of Energy.

The MoU has a particular focus on the

domestic gas market, with Eni and its

joint venture partners playing a

prominent role.

Eni’s subsidiary Eni Ghana

Exploration and Production is the

operator of the block with a stake of

47.2%. Vitol Upstream Ghana holds a

37.8% interest, while the remaining 15%

belongs to GNPC, with an option for an

additional 5% share in the block.

INVESTMENT

PERFORMANCE

Eni confirms Sankofa

find with appraisal well






Somaliland, which lies along the

northern side of the Horn of Africa, and

which declared its independence from

Somalia in 1991, hopes to have a future

based partially on hydrocarbon

development.

Anglo-Turkish Genel Energy acquired

two production-sharing agreements

(PSAs) in 2012 for five onshore blocks in

the country and is expected to drill in

2014.

The breakaway state’s Minister for

Mining, Energy and Water Hussein Abdi

Dualeh recently attended an energy

conference in Abu Dhabi to acquaint the

energy industry with his country’s plans.

“In light of its geographical position,

long coastline and deep-sea ports,

Somaliland is strategically positioned to

be one of East Africa's major energy

supply bases and play a key role in the

region’s energy future,” he said,

according to the Somaliland Sun

newspaper.

In August 2012, Genel acquired a 75%

interest in two blocks in partnership with

the East Africa Resource Group, which

holds the remaining 25%. In November,

Genel farmed in to a 50% stake in three

more blocks that form the Odewayne

PSA with partners Jacka Resources and

Petrosoma, which hold 30% and 20%

stakes respectively. The deal called for

Genel to carry its partners through

Phases 3 and 4 of the PSA, which include

gathering 1,500 km of 2-D seismic and

the drilling of one exploration well.

According to the Genel website, the

area of Somaliland that it is exploring

could hold 1 billion barrels of oil.

Meanwhile, in neighbouring Puntland,

a semi-autonomous region of Somalia,

Horn Petroleum drilled two wells last

year that proved to be dry.

Horn said last year it would continue

with its exploration programme in

Puntland. The company and its partners,

Range Resources and Red Emperor, said

they would enter the next exploration

phase in the Nugaal and Dharoor Valley

PSAs. Those agreements call for one

exploration well to be drilled within a

three-year period.

South Africa’s hopes to replicate the

North American shale gas boom are

unlikely to cut prices by the same extent

and will take seven to 10 years to reach

commercial levels, according to a recent

conference call by Frost & Sullivan

experts.

A South African industry analyst at the

consultants, Dominic Goncalves, said the

main difficulty in exploiting the

country’s shale gas reserves in the Karoo

Basin would be environmental concerns.

The area is highly prized and opposition

to hydraulic fracturing in particular is

notable.

The moratorium on the industry was

lifted in September 2012, Goncalves

said, but “fracking is still not currently

permitted.” As such, industry is caught in

a “Catch-22” situation, the analyst said,

where it cannot prove South African

shale gas is a valuable, exploitable

resource.

A number of companies are working

on shale in the country, although South

Africa’s Sasol pulled out during the

moratorium.

US figures have put South Africa’s

shale gas resource at 13.7 trillion cubic

metres but this is likely to fall once more

information is established, with the

analyst citing the example of Poland,

where figures were reduced by around

85% after initial drilling results.

Goncalves said the likely figure for

South Africa would probably be 283

billion cubic metres to 1.42 tcm, which is

“still significant.”

The country needs to press ahead with

finding new sources of power feedstock,

as it is experiencing fuel shortages.

“There is no way to know the price” of

shale gas production, he continued,

although suggesting that US$9-16 per

million British thermal units (US$249-

440 per 1,000 cubic metres) might be

reasonable, while allowing it could be as

low as US$6 per million Btu (US$166

per 1,000 cubic metres).

Fracking in the Karoo poses particular

difficulties owing to the region’s limited

water resources, with extremely low

rainfall. “A huge amount of water would

need to be transported,” Goncalves said,

in order to provide the 2-30 million litres

of water per well needed.

Unlike Europe or the US, South Africa

has only a limited amount of

infrastructure so substantial investments

would be needed in pipelines and a

market would have to be created.

Statistics from the US suggest the

possibility of water contamination is very

low, but the Frost analyst said there was

“no element of certainty in fracking.

Accidents can happen.”

PERFORMANCE

Somaliland aspires to oil future

Frost: South African

shale gas years away






Griffiths Energy International has been

charged with foreign corruption by the

Canadian authorities, but the company

said it was confident there would be a

“near-term negotiated resolution.” The

company was charged with one count

under Section 3(1)(b) of Canada’s

Corruption of Foreign Public Officials

Act by the Public Prosecution Service of

Canada (PPSC).

Griffiths’ notified US and Canadian

authorities in November 2011, after

discovering contracts signed by its

previous management with two

companies owned and controlled by a

“foreign public official and his spouse”

between August 2009 and February

2011. The new team at Griffiths was

appointed between July and September

2011.

The company began an internal

investigation in November 2011 and

shared the results with authorities in May

2012.

“We've worked extensively with the

Crown and the RCMP throughout and we

anticipate a negotiated resolution in the

very near future,” said Griffiths’

president and CEO, Gary Guidry. “We

can't say any more at this time, but will

commit to providing more details as soon

as a resolution is approved by the Court

and made public.”

According to previous statements,

Griffiths paid around US$8.5 million on

consulting agreements on entering Chad

and around US$2 million of this amount

was considered to be potentially

problematic. Fees paid to consultants are

often flagged by transparency

campaigners as open to abuse.

Griffiths filed for an IPO in November

2011 but dropped these plans in February

the following year, saying it had raised

cash privately. The company said it had

spudded its first development well on the

Badila field at the end of November last

year.

The company signed up the Mangara-

Badila production-sharing contract (PSC)

in March 2011 and the Doseo-Borogop

PSC in January 2011. Griffiths signed a

preliminary deal with Glencore

International last year under which the

trader would take a 25% stake in the

Mangara and Badila developments.

Australia-based Pura Vida Energy has

taken an 80% stake in the Nkembe

block, offshore Gabon. The company

will be the operator and will carry the

remainder of the equity on behalf of

Gabon. Pura Vida announced the deal

on January 15, after signing the

production-sharing contract (PSC) in

Libreville on January 11.

The block covers 1,210 square km,

with water depths of 50 to 500 metres,

in the Gabon Basin. Nkembe is close to

a number of producing oilfields, Pura

Vida said.

The company’s technical director,

David Ormerod, said the award was an

important step in building a

“diversified portfolio of high-quality

exploration assets.

POLICY

Griffiths charged with

Chadian corruption

PROJECTS & COMPANIES

Pura Vida signs up Gabonese block






Pura Vida has taken a high equity

position, demonstrating our confidence in

this project and the belief that sound

technical work will generate value by

proving the potential of these plays.”

Pura Vida recently struck a deal to

farm out a stake in its Moroccan block,

Mazagan, to the US’ Plains Exploration

and Production (PXP). Under the

Mazagan deal, PXP agreed to make a

US$15 million upfront cash payment and

provide US$215 million of funding for

work on the block.

A note from Hartleys, which has also

acted as Pura Vida’s corporate advisor,

predicted the company would adopt a

similar strategy to its new Gabon block,

with a “farmed-out carry on at least one

well.”

The Australian company noted recent

interest in subsalt plays in Gabon and

said it would be investigating these on

Nkembe. Tudor Pickering Holt has

described the country as being the most

appealing in West Africa for pre-salt

work, based on its potential resources

and contract terms.

Pura Vida is to buy 845 square km of

3-D seismic data from WesternGeco.

Under the first phase, which will run for

four years, the company will acquire 550

square km of Multi Azimuth 3-D seismic

and drill an exploration well. Seismic

work is expected to begin early in the

second half of this year.

The second phase will involve another

550 km of 3-D seismic and the drilling of

two exploration wells.

TGS-NOPEC Geophysical has started

acquiring a 3-D multi-client survey over

up to 7,800 square km of acreage in the

Harper Basin, offshore Liberia. The

survey, known as Sunfish, “provides

excellent data coverage for the source-

prone, syn-rift and early post-rift

sequences in this highly prospective area

offshore Liberia,” said TGS on January

16.

“TGS has been active in acquiring data

over the West Africa Transform margin

for the past decade and this survey

demonstrates TGS’ ongoing commitment

to grow the seismic data library in

Africa,” said TGS’ senior vice president

for the eastern hemisphere, Stein Ove

Isaksen.

TGS is chartering the 12-streamer

Polarcus Asima for the survey, which is

supported by industry funding. The

charter will last for approximately six

months. Data processing will be

performed by TGS and will be available

to clients in the third quarter of 2013,

prior to Liberia’s 2013 bid round.

Liberian President Ellen Johnson

Sirleaf has been active in courting

investments in the country’s oil and

natural gas sector, as it recovers

politically and economically from years

of civil war. The Liberian government

has said that more than US$16 billion has

been invested in natural resources, such

as oil, during the past six years.

Inroads have been made by Australia’s

African Petroleum Corporation, which

announced recently that it had started

drilling at its Bee Eater-1 well offshore

Liberia, about 10 km from what the

company said was a proven high-quality

reservoir. The Australian company said

the well was meant to test the westward

extension of the reservoir. African

Petroleum’s CEO, Karl Thompson, said

there were plans for a “very active

exploration programme” in Liberia for

2013.

A second well is planned in the

offshore region once the Bee Eater-1

well has been completed. The

recoverable resources for the Bee Eater

area are estimated by the company at

more than 840 million barrels of oil.

PROJECTS & COMPANIES

Liberian 3-D seismic under way






The following news items are sourced

from local and international news

sources. NewsBase is not responsible for

the contents of the stories and gives no

warranty for their factual accuracy.

North Africa

Algeria crisis triggers Libya, Egypt oil security review

Libya rushed to beef up security at its

oilfields and energy firms were

considering similar measures in Egypt as

Islamist militants threatened to attack

new installations in North Africa.

Hundreds of workers were evacuated

from a number of Algerian production

sites on the border with Libya to safer

places in the country's centre and

industry experts said that could

ultimately lead to lower oil and gas

production from the OPEC member state.

Libya and Algeria are Africa's third and

fourth largest oil producers with Libya

also the largest oil reserves holder on the

continent. Together with Egypt they are

important gas suppliers to Europe and the

budgets of all three countries are heavily

dependent on energy revenues. Libya's

oil protection force, affiliated with the

defense ministry, said there had been no

reports of incursions into its oilfields,

where more guards and military personal

had been deployed and security patrols

intensified inside and around the sites

around the clock. “Due to events in the

region, the Petroleum Faculty Guard has

taken a series of actions to enhance and

reinforce the protection of oilfields,

facilities and employees in the western

and southern regions of Libya,” it said. A

Western security adviser working in

Libya said by telephone he was not sure

that would immediately boost security,

since the oil protection force, set up after

the overthrow of Muammar Gaddafi in

2011, was at an “embryonic stage.”

Libya's National Oil Corporation

chairman Nuri Berruien confirmed

increased security measures at fields on

the Algerian border.

REUTERS, January 18, 2013

Egypt discovers oil and gas in Western Desert

Egypt General Petroleum Co. (EGPC)

made an oil and natural gas discovery in

the Western Desert and plans to drill nine

wells to develop the concession, the Oil

Ministry said January 14. The find has

reserves estimated at about 16.5 billion

cubic feet of gas and 48 million barrels

of crude, the Cairo-based ministry said in

an email. The company and Kuwait

Energy Co. made two joint discoveries in

the same area, the ministry said.

BLOOMBERG, January 14, 2013

MENA Hydrocarbons notes Lagia progress

MENA Hydrocarbons is pleased to

announce the following operational

update. Activities on the Company's

100% owned Lagia oil field in Egypt

have re-commenced. A new progressive

cavity pump (PCP) has been installed in

the Lagia well 9 which has produced

over the last 12 days at an average

stabilised rate of 90 barrels per day of

approximately 16 degree API oil gravity.

This PCP replaces the original sucker rod

pump that was previously installed in

Lagia 9. MENA has also completed

installation of required production

facilities in the field with three oil

storage tanks, a water tank, and a 500

barrel fuel tank and has connected all

producing wells with flow lines. Lagia

wells 8 and 10, which were also drilled in

2012 and designed for steam injection,

will be placed on production following

an initial steam injection cycle to begin

next month. The Company has signed an

agreement with an experienced Middle

East steam operator, Steamtech and Co.,

to provide steam injection equipment and

personnel to start the steam injection

operation in the field. Given the quality

of sandstone reservoir and oil gravity, it

is expected that production volumes from

the wells will be significantly improved.

The two remaining production wells in

the field, Lagia 6 and 7, were drilled by a

previous operator and were not

completed with thermal casing, however,

their flow rates are expected to increase

from their current 22 barrels per day with

steam injection into the other nearby

wells.

MENA HYDROCARBONS,

January 15, 2013

Tension increases in Libya

Unconfirmed reports indicated that

hostile groups have threatened attacks on

foreign targets in Libya in response to

ongoing violence in Mali. In Benghazi,

unconfirmed reports indicate that

security forces in the city intercepted a

number of vehicle-borne improvised

explosive devices (VBIEDs) at the

airport before they were detonated.

Unidentified militants opened fire on the

vehicle of Italy's consul, although he was

not injured in the attack. Meanwhile, two

police officers were killed in separate

attacks in the city on January 15 and 16.

Saif al-Islam Gaddafi appeared in court

in Zintan on January 17 to face charges

related to a visit by an International

Criminal Court (ICC) lawyer in 2012.

AKE, January 18, 2013

Major Libyan oil terminal remains closed, exports delayed

The Zueitina oil terminal in Libya

remains shut, almost a month after

demonstrators forced the closure of the

major oil exporting hub, a shipping agent

told Dow Jones Newswires Thursday.

The closure has caused severe

disruptions to exports of oil from the

North African country, traders have said.

One trader said last week that five

cargoes for January loading had been

dropped, three cargoes of Bu Attifel oil

and two cargoes of Zueitina oil. “It's

affecting the market really badly,” he

said. “Basically January liftings were

cancelled.” Oil installations have been

focal points for demonstrations following

elections in July.

NEWS IN BRIEF






What is happening in “Zueitina is in line

with what's been going on elsewhere;

there's been quite a lot of protests at oil

terminals throughout the country over the

last three months,” said Alan Fraser, risk

consultant at Ake security in an interview

last week. “Locals are trying to pressure

the government and oil ministry into

giving more people in the local

community jobs,” he said. In 2011, a

civil war that completely halted oil

exports from the OPEC member rocked

the markets and contributed to soaring

prices.

DOW JONES NEWSWIRES,

January 17, 2013

Chad's SHT seeks Sudan oil co-operation

The head of the projects unit in Chad's

Societe Des Hydrocarbures du Tchad

(SHT) Eng. Al-Mahdi Mohamed Gamar

said his country is participating in the

international trade fair of Khartoum and

the objective of their participation is to

benefit from Sudan's experience in

indigenising the oil industry and striking

agreements with Sudanese oil companies.

Sudan and Chad signed a protocol to

promote co-operation in oil, the deal won

strong support from Chadian President

Idriss Deby who is seeking strong

partnerships with African countries. He

said Chad entered the oil industry in

1972 through international companies

and is now making efforts to establish

local oil companies, stating that the

current oil output in Chad is 125,000

barrels from Kume oilfield, 60,000

additional barrels are expected to be

produced this year. Chad has an oil

export pipeline running across

Cameroon, which brought major benefits

for the economy and the population.

SUDAN VISION, January 19, 2013

Gulfsands completes Moroccan acquisition

Gulfsands Petroleum has completed a

US$19 million acquisition of Cabre

Maroc from its previous owner Caithness

Petroleum. Cabre Maroc is the operator

of an extensive portfolio of highly

prospective oil and gas exploration

licences and gas exploitation concessions

covering an area of approximately 5,100

square miles in northern Morocco. As

well as the US$19 million paid to secure

the acquisition, a financial guarantee of

US$5 million for the performance of

future exploration commitments on the

Rharb permits has also been provided to

ONHYM, the regulator of Morocco's oil

and gas sector. This guarantee will be

refunded immediately upon the

fulfillment of those commitments which

is expected to occur during the second

half of this year. Gulfsands said its

purchase of Cabre Maroc delivers to the

company a large, contiguous and highly

prospective acreage position in an area

with proven petroleum systems, revenues

from near term production, and multiple

drilling targets. It believes that there is

meaningful near term value potential

contained within the proven conventional

and shallow depth gas play in the Rharb

Centre permit, together with significant

exploration upside related to the fold and

thrust belt structures identified in the

adjacent Rharb Sud, Fes and Taounate

permits. Following completion of the

acquisition, Gulfsands and ONHYM

have become co-venturers in the Rharb

Centre and Rharb Sud permits, with

Gulfsands the operator of the joint

venture and following completion of

various post completion matters,

Gulfsands and Caithness Petroleum

through their respective wholly owned

subsidiaries will become co-venturers

with ONHYM in respect of the Fes and

Taounate Permits, with Gulfsands the

operator of both exploration joint

ventures.

RIGZONE, January 17, 2013

US calls on Kiir to transport oil by trucks

A delegation of US Senators have urged

President Salva Kiir Mayardit of South

Sudan to begin to truck his country's oil

to the international market through

Ethiopia instead of waiting for Khartoum

to honour its agreements on oil transport.

In May last year South Sudanese oil

minister Stephen Dhieu Dau told the

Wall Street Journal that his country plans

to use trucks to export at least 10% of its

oil production, 35,000 barrels per day,

through Djibouti after crossing Ethiopia

and the Kenyan maritime port of

Mombasa. The Senators who visited Juba

this week include Senator Steve Pearce

of New Mexico carrying the message

which urged Kiir to immediately

transport its oil by trucks, saying

Khartoum's act of stopping the flow of

oil “doesn't make sense.” The Senators,

who later gave statements to the state-

owned South Sudan Television (SSTV)

on Sunday, said their government would

support the new alternative initiative to

truck the oil to the international market in

order to generate significant amount of

revenues for the country's economy.

Senator Steve Pearce questioned the

logic why South Sudan with such huge

resources should suffer economically.

However, the country has the plan in

place already to alternatively truck the oil

through Ethiopia from Upper Nile state

but there was need to construct a

tarmacked road to connect Upper Nile

and Ethiopia which will be able to

withstand the frequent heavy traffic of

big oil trucks. The road to connect Upper

Nile state and Gambella region of

Ethiopia was one of the priority roads

such as that of Juba-Nimule road which

connects South Sudan and Uganda

because of their economic importance.

SUDAN TRIBUNE, January 14,

2013

South Sudan signs deals with Israeli companies

South Sudan says it has signed an

agreement with several Israeli oil

companies, a potentially significant

strategic move that will consolidate

Israel's relations with the fledgling, oil-

rich East African state.

NEWS IN BRIEF






South Sudan's petroleum and mining

minister, Stephen Dhieu Dau, announced

the oil deal last week after he returned

from a visit to Israel. The country will

also bolster Israeli moves to counter

Iranian inroads into the Red Sea and a

major gunrunning route from the

Revolutionary Guards' base at Bandar

Abbas in the Persian Gulf to the Gaza

Strip via Sudan. Dhieu Dau said

negotiations were ongoing with Israeli

companies - whom he did not identify -

seeking to invest in South Sudan. He

indicated that the government in Juba,

the ramshackle capital of the infant state,

hoped to export oil to Israel, but

observed that this could not happen

before March. He gave no indication how

the landlocked south would achieve this,

or what volume of crude would be

involved.

HAARETZ, January 20, 2013

Oil shutdown is correcting tax revenue shortfall in Unity State

The financial crisis caused by the year-

long oil shutdown in South Sudan is

forcing Unity state to address the

government's relaxed attitude to tax

collection, the state's minister of

agriculture and forestry told Sudan

Tribune. Samuel Lony Geng said Friday

that since South Sudan split from Sudan

in 2011 the process for collecting tax

revenues has remained “very weak.”

Following the oil shutdown a year ago

South Sudan's government has begun to

look into diversifying its economy and

how to increase revenues from other

avenues. In January last year South

Sudan accused Sudan of confiscating oil

entitlements worth about US$815

million. This was denied by Khartoum,

which said it had only taken some oil as

payment in kind for alleged unpaid

transit fees.

SUDAN TRIBUNE, January 20,

2013

Sudan to boost oil output to 150,000 bpd

Sudan plans to increase oil production to

at least 150,000 bpd this year thanks to

two new oilfields and a higher recovery

rate from existing fields, its oil minister

told a newspaper on Wednesday. The

African country, which currently pumps

136,000 bpd to 140,000 bpd, lost three-

quarters of its output when South Sudan

became independent in July 2011. The

drop in oil, its main source of budget and

trade revenues, has thrown its economy

into turmoil. Sudan had originally

planned to reach 180,000 bpd by the end

of the year, but its major Heglig oilfield

was damaged during a brief occupation

by South Sudan's army and border

fighting between the two countries in

April. The planned increase will be

driven partly by the al-Barsaya oilfield in

Block 17 in South Kordofan state, which

has started with an initial output of 6,000

bpd, State Oil Minister Faisal Hamad

told the al-Intibaha newspaper. Its output

will rise to between 10,000 bpd and

15,000 bpd this year, he estimated. He

did not name the companies involved in

the field, but Block 17 is operated by

state oil firm Sudapet and Ansan, a

company owned by Yemeni investors. A

second new oilfield in Hadida in Block 6

in the western Darfur region will increase

output to 20,000 bpd this year from

10,000 bpd currently, he said. Chinese-

owned Petro Energy E&O is operating

the field.


West Africa

Seadrill receives term extension for semi-submersible

Tullow has exercised its contractual

option to extend the contract for the

ultra-deepwater semi-submersible rig

West Leo by two years from May 2016

to May 2018. The West Leo is expected

to carry out operations in West Africa

until the end of its contract in May 2018.

The potential contract revenue for the

extension is estimated to approximately

US$450 million based on 97% utilisation

and includes a performance bonus

arrangement. This brings the total

estimated contract value to US$1.13

billion. In line with the omnibus

agreement terms and conditions between

Seadrill and Seadrill Partners, Seadrill is

obligated to offer the West Leo to

Seadrill Partners at a fair market price.

SEADRILL, January 16, 2013

Angola production reaches 1.78 million bpd

In December 2012 Angola’s oil

production totalled a daily average of

1.78 million barrels, which is slightly

lower than the target set by the

government of 1.8 million barrels per

day, according to Angolan weekly

newspaper Expansao. Although Angolan

production last year ranged between 1.65

and 1.75 million barrels per day, the

State Budget for 2013 outlines daily

production of 2 million barrels per day.

Expansao said it would be difficult to

meet that target and cited Oil Minister

Botelho de Vasconcelos, as saying that,

“to achieve 2 million barrels we will

have to work more and more.”

MACAUHUB, January 16, 2013

GE, GLS, strike partnership

US group General Electric (GE) has set

up a partnership with Angolan company

GLS Oil & Gas, of the GLS Holding

group to expand the services it offers to

the oil sector, in which it has operated for

over 50 years, Angolan state newspaper

Jornal de Angola reported. The

partnership, called GE-GLS Oil & Gas

Limitada, was made official on 31

December 2012 following a long

negotiation process. The US

multinational is represented in this

partnership by its subsidiary Nuovo

Pignone Angola, which is based in

Italy.

NEWS IN BRIEF






The two sides agreed to set up a

partnership with share capital of 5 billion

kwanzas (US$52 million), and this will

initially involve construction in the Soyo

region of Zaire province of a factory to

produce underwater equipment and

providing services for oil and gas

exploration in Angola.

MACAUHUB, January 18, 2013

Glencore awards Plexus HP/HT work

Plexus Holdings has agreed to supply its

high pressure/high temperature (HP/HT)

POS-GRIP wellhead equipment, subject

to finalisation of the contract, to

Glencore Exploration Cameroon, the

leading integrated commodities producer

and marketer, for drilling a gas

exploration well offshore Cameroon. The

contract will have an estimated initial

value of circa GBP700,000. The order is

initially for one well with an option to

increase this to three. This is the first

contract Plexus will enter into with

Glencore, and it is anticipated that

revenues will commence in March 2013.

The exploration drilling programme will

utilise Plexus' POS-GRIP HP/HT 18-3/4”

15,000 psi wellhead equipment, and this

contract further strengthens the

Company's growing presence in West

Africa, and Cameroon in particular.

Plexus CEO Ben Van Bilderbeek said,

“This first contract to supply our POS-

GRIP wellhead equipment to Glencore

adds another blue chip operator to our

broad customer base, and provides

further evidence of Plexus' high standing

in the oil and gas industry as a supplier of

best in class equipment in terms of

operational performance and safety. In

the last few months, we have announced

contract wins in three continents, Asia,

Europe, and Africa, illustrating how our

patented technology continues to gain

traction worldwide.”

PLEXUS, January 15, 2013

Rialto updates CPR figures

In an investor presentation today, Rialto

Energy provided technical information

on the upgraded prospectivity identified

in Block CI-202 via the 2011-12 3-D

seismic acquisition and verified by the

CPR, with a total mean prospective

recoverable liquids and gas resource of

897 million barrels and 2,936 Bcf

respectively. It also gave details on

proposed 2013 work programme

including drilling with the Vantage

Sapphire Drilling Unit, an overview of

the revised development concept and

updated Contingent Resource for the

Gazelle Field; and information on the

recently acquired 12.5% interest in the

Accra Block, offshore Ghana.

RIALTO ENERGY, January 15,

2013

Tanker taken off Cote d’Ivoire

Gunmen seized a Nigerian-owned,

Panama-flagged tanker with 16 Nigerian

crew off Cote d’Ivoire's port of Abidjan

as it prepared to unload 5,000 tonnes of

fuel, port officials said on Monday.

Attacks on shipping are increasing in the

Gulf of Guinea – second only to the

waters around Somalia for piracy. But

the ITRI incident was only the second of

its kind in Ivorian waters, reports

Reuters. The tanker, named the ITRI and

owned by Lagos-based Brila Energy, was

commandeered on Thursday, Abidjan's

port authority said in a statement. Serge

Constant of Koda Maritime, an Ivorian

firm that was managing its stopover in

Cote d’Ivoire, said there has been no

contact with it since. Constant said the

ITRI's onboard tracking system had been

disabled. Abidjan port officials said the

ITRI's last known position was off the

coast of neighbouring Ghana. But

Ghanaian authorities said they had been

unable to locate the ITRI. “We now seem

to be back to square one. The

information is contradictory. We don't

know who's telling us the truth and who

isn't,” said Constant.

THIS DAY, January 21, 2013

NOCAL, African Petroleum counter over optimism

A joint press release from the National

Oil Company of Liberia (NOCAL) and

African Petroleum (AP) has indicated

that there has always been a harmonious

and cordial working relationship between

the two entities since oil blocks were

awarded, adding that they have aligned

objectives. According to the press

statement dated January 18, African

Petroleum officially announced the

commencement of the drilling of the Bee

Eater - 1 well in Block LVB-09 offshore

Liberia with semi-submersible ocean rig,

the Eirik Raude, which is meant to test

the potential of a westerly extension of

the Narina - 1 Turonian oil discovery.

NOCAL and African Petroleum jointly

clarified that “un-risked prospective

resources” need to be confirmed by

further technical work and additional

drilling, and shall not be considered as

“proven reserves of oil” ready to be

produced as was reported recently in the

press. Only further drilling can

demonstrate whether “resources” can

move to the “reserve” category and how

much commercial quantities will be

available for production. In addition, the

release stated that the current drilling

campaign is aimed at confirming the

nature of the geology and of the

reservoir, including its size and quality so

that further drilling and technical

programmes can be developed. The

shape of the programme, the number of

possible appraisal wells will be

dependent on the outcome of the Bee

Eater - 1 well.

THE INFORMER, January 21,

2013

French troops push towards Diabaly

Fighting continued in Mali on 19 and 20

January as French troops pushed towards

the contested town of Diabaly.

NEWS IN BRIEF






French troops are also conducting

operations near the towns of Sevare and

Konna. Reports suggest that some

insurgents are beginning to pull back,

retreating towards the mountainous areas

around Kidal in the north or blending in

to local populations. African troops

under the International Support Mission

in Mali (MISMA) are arriving with

Canadian and Russian planes now

deploying to assist with transportation.

AKE, January 21, 2013

Mali: Eni pulls out of Mali on poor prospecting outlook

Italian oil and gas group Eni has pulled

out of Mali because of the poor

prospecting outlook in the African

country, an Eni spokesman said on

Tuesday. “Eni has handed back licenses

it had because of the very low potential

of the area,” the spokesman said. The

licenses were handed back before the

recent outbreak of fighting in the

country, he said. France intervened in

Mali last week in an effort to block an

advance by rebel fighters whom the West

fear could use the West African nation as

a launching pad for international attacks.

Eni is the biggest foreign oil major in

Africa and has identified the continent as

one of its key drivers for growth. Eni, in

partnership with Algeria's state-owned

Sonatrach, said in 2006 it had acquired 5

exploration licenses in Mali's Taoudeni

Basin. Eni acquired a 50% participating

interest along with operatorship from

Baraka Mali Operations Limited, a

wholly owned subsidiary of the public

company Baraka Petroleum Limited, and

the private company Baraka Mali

Ventures Limited, which originally had

75% and 25% interest respectively in the

licences. Sonatrach acquired a 25%

interest in the licences through its

subsidiary Sipex. The blocks – Blocks 1,

2, 3, 4 & 9 – were located in the

Taoudeni Basin.


South Africa finds Nigerian militant guilty of terrorism

A South African court found suspected

Niger Delta militant leader Henry Okah

guilty of terrorism on Monday for

masterminding two car bombs that killed

at least 10 people in the Nigerian capital

at an independence day ceremony in

2010. Judge Neels Claassen said Okah,

who was accused of leading the militant

MEND group in Nigeria's oil-producing

Niger Delta, was found guilty on 13

counts ranging from conspiracy to

commit terrorism to detonating

explosives. “The evidence that was given

by his accomplices was not

contradicted,” Claassen told the court in

Johannesburg.


Nigeria boosts gas production, may revoke 132KV power contract

Federal government’s efforts to sustain

the existing improvement in power

supply received a boost at the weekend

with the unveiling of the Oredo

Integrated Gas Handling Facility (IGHF)

by the Minister of Petroleum Resources,

Diezani Alison-Madueke. It was at the

Nigerian Petroleum Development

Company (NPDC) operated Oredo field

in Edo State. The facility which currently

supplies 65 million metric standard cubic

feet per day (MMscfd) has ramped up

NPDC’s total gas production to a record

level of 400MMscfd with projected

growth to 600MMscfd by year end is

envisaged to significantly enhance the

Federal Government’s power supply

drive. At the ceremony, Alison-Madueke

noted that the project was in line with the

ongoing reform process in the industry

designed to vigorously ensure the

monetisation of the nation’s gas

endowment through gas-to-power and

other gas-related industrialisation.

However, the Federal Government has

threatened to revoke the contract for the

132KV power sub-station in Umuahia,

Abia State if the contractor handling the

project which was awarded to Valence

Nig, fails to rectify a fault with one of the

transformers meant for the facility. The

132KV Sub-Station, which was

commissioned despite the fact that one of

the transformers was faulty, has the

capacity to generate 64 MW of electricity

to Umuahia and its environs. At present,

it supplies only 33 MW of electricity due

to the fault.

GUARDIAN, January 20, 2013

Tackle oil spills, not illegal bunkering, Nigeria urged

Stakeholder Democratic Network (SDN)

a pressure group in the Niger Delta, has

frowned at the priority given by the

Federal Government to security against

crude oil theft to the detriment of the

needed environmental protection action

against oil spillages in the region. SDN

noted that though the activities of crude

oil thieves were reducing the economic

earnings of the nation, the excessive

focus and security actions against illegal

bunkering and crude oil theft was a poor

reflection of government's policy focus

and sign of neglect of the people of Niger

Delta by the Federal Government.

Country Co-ordinator of the group,

Inemo Samiama, in a statement, said

SDN's position was informed by the lack

of action on the KS Endeavour blowout

in 2012, off the Atlantic coast of

Koloama in Southern Ijaw Local

Government Area of Bayelsa State. “The

2012 incident is typical of a year in

which much was put in the public

domain about oil spills, especially those

from illegal refineries, but too little was

done to address the massive gap between

Nigeria's spill record and its capacity to

contain and clean up the spills.”

VANGUARD, January 18, 2013

NEWS IN BRIEF






Fuel-laden ships waiting to discharge at Lagos

There are 25 ships are waiting to

discharge petroleum products at the

various oil terminals within the Lagos

ports, the Nigerian Ports Authority

(NPA) has said. NPA, in its daily

'Shipping Position', made available to

newsmen on Wednesday in Lagos, said

that 14 of the ships would discharge

petrol, while three ships would discharge

diesel. It said that three ships would

discharge kerosene, three others would

discharge diesel, while ethanol and base

oil would be discharged by a ship each.

NPA reports that nine ships would

discharge rice, fresh fish, containers,

bulk sugar, and fertiliser. It added that 68

ships carrying different cargoes were

expected to sail into the ports between

Jan. 16 and Jan. 31.

VANGUARD, January 16, 2013

Nigeria's oil production stagnant for 40 years

Nigeria's oil production has remained

stagnant in the last 40 years, a report

from ExxonMobil has said. The

multinational company also said the

country's new deepwater production has

not buoyed its oil production during the

period under review. General Manager,

Operations Technical Geoscience, Mobil

Producing Nigeria Andrew Ejayeriese

said this during the presentation of

Mobil's Energy Outlook. He said in the

mid 1970s, Nigeria's oil production

reached a high of 2.2 million barrels per

day, mainly from onshore and shallow

water fields. He attributed the nation's

stagnant oil production to delays in

project approvals, restrictions in NNPC

funding and tortuous contract award

process which have slowed overall

reserve replacement and put pressure on

long-term production and growth. He

said: “We all know the story of the

impact of militancy and oil

bunkering/illegal refinery on the

maintenance and growth of Joint

Ventures volumes.”

DAILY TRUST, January 16, 2013

Afren issues trading statement

Afren’s CEO, Osman Shahenshah, said:

“2012 saw record production and

financial performance combined with

significant exploration success in Nigeria

and the Kurdistan region of Iraq. In 2013

we expect to further grow our reserves

base through a multi-well exploration

and appraisal drilling campaign in both

established and new basins, while

continuing to grow our production base.

We are financially well positioned with

robust cash flows, a strong balance sheet

and the necessary financial capacity and

flexibility to optimally explore and

develop our high quality portfolio of

growth opportunities well into the future.

There is much to look forward to in 2013

and beyond.” Net production at the

Company's assets during the full year

2012 (subject to final reconciliation) was

approximately 42,830 boepd, driven by

the year-on-year increase in net

production from the Ebok and Okoro

fields, offshore Nigeria. Notably during

the period, the Company commenced

production from the Okoro Field

Extension offshore Nigeria within nine

months of announcing the discovery and

also initiated production from the Barda

Rash field in the Kurdistan region of

Iraq. Total revenue for 2012 is expected

to be circa US$1.5 billion, compared

with US$597 million in 2011. The

increase in revenue is due to higher sales

volumes in 2012, principally due to

increased production from the Ebok and

Okoro fields offshore Nigeria together

with continued strength in commodity

prices. Oil and gas inventory at

December 31 2012 was approximately

US$36 million, representing

approximately 780,000 barrels net to

Afren. Hedges covering approximately

4.7 million barrels are in place for the

period January 1 2013 to June 30 2014,

providing minimum floor prices on these

volumes of between approximately

US$80-90 per barrel before costs. Capital

expenditure for 2012 amounted to

approximately US$520 million, in line

with guidance. Of this amount,

approximately US$315 million was

allocated to production and development

activities and approximately US$200

million to exploration and appraisal.

Based on current plans, capital

expenditure for 2013 is forecast to be

approximately US$620 million.

AFREN, January 21, 2013

Southern Africa

HRT takes Transocean rig

HRT Participacoes em Petroleo has

received the semi-submersible drilling-

rig Transocean-Marianas from

Transocean, offshore Ghana, at zero hour

of January 15, 2013. The rig will be in

transit to Namibian waters for the next

three weeks and, then, she will undergo

mandatory maintenance for the following

21 days, before starting HRT's drilling

campaign in Walvis and Orange

sedimentary basins. The Marianas is

expected to be on location to start drilling

the first well in Namibia, in the Wingat

Prospect, in Walvis basin at HRT's

Petroleum Exploration License-23 (Pel-

23) by the end of the first quarter. Wingat

is located in 1,000 metres of water and its

drilling operations are expected to last

approximately 60 days. “The arrival of

the Transocean-Marianas is excellent

news for HRT and GALP. She is arriving

within the planned timeframe to start one

of the most expected and exciting drilling

campaigns in Southern offshore West

Africa,” added the CEO, Marcio R.

Mello.

HRT, January 15, 2013

NEWS IN BRIEF






South Africa proposes law to give state share of oil projects

The South African government has

proposed changes to an energy law that

would enable it to secure free stakes in

all new oil- and gas-production projects.

The planned amendments to the Mineral

and Petroleum Resources Development

Act also aim to secure the state the right

to appoint two directors to the board of

companies operating new energy projects

and to abolish the petroleum industry

regulator. The changes, if approved by

Parliament, could have repercussions for

companies such as ExxonMobil and

Royal Dutch Shell. The law didn’t

specify what size stake the state would

take in new energy projects and it was

unclear how the provisions will work in

practice, said Peter Leon, the

Johannesburg-based head of Africa

mining and energy projects at law firm

Webber Wentzel. “These proposals are

extremely negative for the industry while

surrounding countries continue to benefit

from an exploration boom,” he said in an

e-mailed response to questions today.

“No obvious reason has been advanced

for the abolition of the Petroleum

Agency of South Africa and the transfer

of its all responsibilities to nine regional

managers of the Department of Mineral

Resources.”

BLOOMBERG, January 18, 2013

East Africa

Madagascar Oil sets out finance plan

Madagascar Oil has received a detailed

proposal for an alternative financing

transaction to the financing transaction

announced on December 18 and 20,

2012, details of which were set out in the

circular dated December 28.

Accordingly, the Board has adjourned

the Special General Meeting in order

fully to explore the proposed New

Financing Transaction, which is seeking

to raise gross proceeds of up to US$65

million from a pre-emptive issue of new

Common Shares. The Pre-Emptive Share

Issue would be undertaken at a

subscription price of US$0.29 per

Common Share and firm commitments

have been received in respect of

subscriptions in an amount of US$33.4

million (gross) from investors including a

number of existing institutional

Shareholders. Further discussions

between the Company and other

substantial Shareholders are continuing

with regard to their participation in the

New Financing Transaction and a further

announcement will be made as and when

appropriate.

MADAGASCAR OIL, January 15,

2013

Total makes new oil discovery in northern Uganda

Uganda’s oil prospects got a boost

following another discovery in the

northern part of the country. The

Commissioner for Petroleum, Ernest

Rubondo, confirmed the development but

declined to give details, pending what he

referred to as further analysis. “I can

confirm that we have discovered more oil

in Nwoya, but the details about the

volume and its commercial viability can

only be ready in about three weeks after

analysis,” Rubondo said in a telephone

interview with the Daily Monitor

yesterday. “But all indications suggest

that we have actually found more oil.

However we still need to wait for the

analysis,” he added. The area’s Member

of Parliament, Richard Todwong, had

told the Daily Monitor a week before

Christmas that it was already known that

Nwoya Constituency was laden with oil.

“About four to five wells has been

confirmed to have oil,” said the NRM

party-leaning MP. He also said a

presentation to the effect would be made

at the ongoing NRM retreat at

Kyankwanzi by the Energy Minister,

Irene Muloni. According to Rubondo,

Total is spearheading the operation that

has led to the new discovery.

DAILY MONITOR, January 16,

2013

Aminex signs loan deal

Aminex has agreed a US$8 million loan

facility with a fund managed by Argo

Capital Management (Cyprus), with

which the company has had a long-

standing relationship. The loan will

provide working capital, particularly for

the company's Tanzanian operations. The

company intends to repay the loan

facility from proceeds of the proposed

sale of its US assets which is currently

under way. In the event that the loan is

not repaid by the sale of US assets before

December 31 2013, Aminex has agreed

to raise additional equity to repay the

loan facility and to provide for the

company's ongoing operations. Aminex

chairman, Brian Hall, commented: “We

are very pleased to have completed this

financing which will provide valuable

working capital for the Company's

significant projects in Tanzania. These

include gas discoveries at Ntorya in the

onshore Ruvuma Basin and at Kiliwani

North, both of which are close to

Tanzania's proposed new gas trunk line,

due onstream in late 2014. A farm-out

process is currently under way to

introduce new partners into our Ruvuma

Basin joint venture in order to accelerate

activity and do justice to this large

concession. The campaign to sell the

Company's US assets has recently

recommenced.”

AMINEX, January 17, 2013

NEWS IN BRIEF






STATISTICS






STATISTICS






STATISTICS






CONFERENCES

AfrOil 22 January 2013, Week 03 Back Page

For further details on the stories above and NewsBase’s entire product range:

tel: +44 (0) 131 478 7000 e-mail: [email protected] Copyright © 2013 NewsBase Ltd.

www.newsbase.com

HEADLINES FROM A SELECTION OF NEWSBASE MONITORS THIS WEEK

Oil and Gas Sector

AsianOil Japan's Chubu Electric Power and South Korea's KOGAS

have signed a joint LNG purchase deal with Eni.

ChinaOil ConocoPhillips' restart plan for its Penglai oilfields has

been approved by China's NEA.

EurOil Statoil has announced it will go ahead with the

redevelopment of the Aasta Hansteen natural gas field.

FSU OGM Preliminary data show that LUKoil's oil production

dropped by about 1% last year.

LatAmOil Repsol is poised to sell off its LNG assets, including its

share in the Atlantic LNG project in Trinidad and Tobago.

MEOG Saudi Arabia is gearing up to develop the Kidan non-

associated gas project in the Empty Quarter.

NorthAmOil ConocoPhillips has struck a US$1.05 billion deal to sell

North Dakota and Montana assets to Denbury Resources.

Unconventional OGM BP has predicted that China will be the most successful

developer of shale gas outside North America by 2030.

CUSTOMERS INCLUDE

NEWSBASE INFORMATION

Date post:	13-May-2015
Category:	News & Politics
Upload:	olgamelnyk
View:	1,212 times
Download:	0 times

AfrOil - oil & gas news for Africa

News & Politics