Issue 719

12•December•2017 Week 49

™™

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

™™

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

™™

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

™™

Shooting off
Spectrum has begun a 2D seismic shoot offshore Mozambique.
AfrOil AfrOil

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P2 w w w. N E W S B A S E . c o m Week 49 12•December•2017
AfrOil Contents AfrOil

w w w. N E W S B A S E . c o m

AfrOil
Africa Oil & Gas Monitor

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

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

P er f ormance
Atoll, Zohr near start line 9

P o l icy
Kinshasa extends offshore production licence 10

P ro j ect s & C ompanie s

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

N e w s in b rie f 13

o u r c u s tomer s 19

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

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

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P3
AfrOil C o m m e n ta r y
Gauging the depth
of Angola’s purge
The new Angolan president has moved decisively against the dos Santos
interests but does his enthusiasm go any further, writes Ed Reed
Angola Angolan President Joao Lourenco has con-
tinued his push against the dos Santos business
W h at: empire. The president’s efforts have been well
Total’s commitments to received by the population and there have been
Angola suggest newfound promising signs by foreign companies.
confidence in the state. Lourenco became president of the country
in late September, succeeding Jose Eduardo
W h y: dos Santos. He had been largely expected to be
Lourenco is in the faithful to the interests of the former president,
process of rolling back who remains head of the ruling MPLA party. His
the various dos Santos policy of change, though, has surprised many
interests throughout the onlookers.
economy. The most dramatic demonstration of Louren-
co’s efforts came in mid-November when he
W h at n e x t: removed Isabel dos Santos from her position as
There have not yet been head of Sonangol.
any signs of a broader Before his appointment, Lourenco had made
change in Angola, so the a number of claims, including a pledge to tackle
moves against the dos corruption. In his inauguration address, he crit-
Santos family play well, icised monopolies in the telecommunications
but more is needed. sector. Isabel dos Santos has a major stake in this
industry as well, via a holding in Unitel, Angola’s
largest mobile phone company.
Angolan Minister of Telecommunications
and IT Jose da Rocha announced a move, in late
November, to establish a new operator, and there
has been interest from both foreign and domes-
tic sources. The government has also taken steps
to claw back Isabel dos Santos’ interests in the
diamond sector.
A mid-November editorial in the Jornal de
Angola, titled “A false problem”, attributed much
of the problems with Sonangol to Isabel dos San-
tos. The author, Victor Silva, wrote that given
she was the daughter of the former president,
Sonangol might not have been able to obtain
external financing because of money laundering
concerns and worries over “politically exposed
people” (PEPs).
Accepting that production costs had been
reduced, the editorial went on to raise con-
cerns about a “lack of dialogue and excessive
bureaucracy”. It further noted Angola’s reliance
on imported products, a point also raised by
Lourenco.
The Total deal
In a positive sign for the new administration,
France’s Total signed a number of agreements
P4 w w w. N E W S B A S E . c o m
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with Sonangol, it announced last week. A
statement from the company, on December
4, reported Total’s chairman and CEO, Patrick
Pouyanne, had met Lourenco and the new chair-
man of Sonangol, Carlos Saturnino.
Pouyanne said the authorities had a “strong
willingness … to drive an investment dynamic
in the oil and gas sector, essential to the country’s
economy, after three years [of being] impacted
by the sharp drop in prices. Today’s agreements
demonstrate Total’s willingness to contribute to
this dynamic by restarting exploration offshore
in Angola, launching new projects such as Zinia
2 on Block 17, and extending our co-operation
with Sonangol”. The official also said the first part
of the Kaombo project should begin in the sum-
mer of 2018.
The two companies agreed on the conditions
for Zinia 2, it said, “enabling a commitment to
the final investment decision [FID]”. This pro-
ject, on Block 17, is operated by Total with a 40%
stake and will be connected to the Pazflor float-
ing production, storage and offloading (FPSO)
unit, one of the four vessels on the block. Output
from this phase will be 40,000 bpd.
Total also agreed to sign up to work on Block
48 with Sonangol. The first phase will run for two
years and involves the drilling of one exploration
well. The ultra-deepwater block is to the west of
Blocks 31 and 32. According to reports in early
2016, the block was awarded to Sonangol.
In addition, Total said it had signed a mem-
orandum of understanding (MoU) with Sonan-
gol on jointly developing a retail network in the
country, in addition to agreeing an MoU on
opportunities for renewable energy.
Angolan Minister of Communications Joao
Melo paid particular attention to Total’s entry
into distribution in Angola, which he described
as instrumental in dismantling monopolies.
Sonangol EP also, on December 5, announced
that it would not go ahead with the choice of
PwC as its auditor. The decision was taken on the
grounds that PwC was also contracted as a finan-
cial consultant for the company’s transformation
process and that a dual role would be conflict of
interest, under Law 9/16, on public contracts.
PwC’s contract was to have run for three years,
from 2017 to 2019, and was only announced on
Week 49 12•December•2017
AfrOil C o m m e n ta r y
November 1. The statement declaring the audi-
tor’s appointment said it was compliant with all
legal procedures. Five companies had applied for
the position and only PwC and EY reached the
negotiation stage.
A PwC audit partner, Sarju Raikundalia, was
appointed to Sonangol’s board in mid-2016 –
thought to be the first non-Angolan to hold such
a post – and was dismissed at the same time as
Isabel dos Santos, last month.
Isabel’s grudges
The dos Santos children are becoming increas-
ingly testy about their newly threatened circum-
stances. Welwitschia dos Santos posted an angry
screed on a social networking site. Isabel dos
Santos announced on December 5 that a “formal
judicial complaint” had been filed against jour-
nalists from the VOA service over “defamatory
articles” about her and Unitel.
The complaint seems to stem from a VOA
article raising questions about whether Uni-
tel had imported assets using the cloak of the
Angolan Red Cross, which is exempt from pay-
ing duties. Isabel dos Santos was appointed as the
head of the local NGO in 2006.
Since her removal, Isabel dos Santos has high-
lighted a number of uncomfortable issues for the
new government. On her Twitter account, for
instance, she noted the recent settlement by SBM
Offshore with the US government and reminded
readers that payments were said to have been
made to Sonangol officials.
Everything changes
While Lourenco’s moves can be clearly seen as
reducing the power of the dos Santos empire,
what is less clear is whether the broader issues
in Angola will change. The new Angolan gov-
ernment, which is made up of members of pre-
vious governments, has taken a tough line on a
Portuguese inquiry into corruption allegations
around Manuel Vicente, who was previously
head of Sonangol and at one point was tipped to
be the next president.
In his inauguration address, Lourenco con-
spicuously avoided mentioning ties to Portu-
gal. There is a broad reason for Angola to want
to look beyond the former colonial power, but
Week 49 12•December•2017 w w w. N E W S B A S E . c o m
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the Vicente issue is a key driver of this current
discontent.
Earlier this year, Portuguese prosecutors
set out charges against Vicente, accusing him
of having paid around US$800,000 in order to
end a corruption inquiry. The cash was allegedly
paid to the public prosecutor, Orlando Figueira,
to end an investigation in 2012, over Vicente’s
reported purchase of a flat in Estoril.
In November, the Portuguese authorities sent
a letter to Luanda naming Vicente, and giving
details of the charges and requiring a response
by the end of the month.
The Angolan government has called for the
case against Vicente to be transferred to Angola,
citing the needs of sovereignty.
In addition to the Vicente affair, Portugal’s
Diario de Noticias reported at the end of Novem-
ber that an investigation was under way into Luís
Ferreira do Nascimento. The inquiry is a prob-
lem for the new administration in Luanda, as
Nascimento was appointed to be an executive
director of Sonangol in mid-November.
The official is accused of being involved in the
disappearance of US$29 million from Sonair,
Sonangol’s airline arm, under a deal with Por-
tugal’s TAP.
The case, which was flagged by Isabel dos
Santos on Twitter, is another warning sign over
the extent to which Lourenco’s efforts can be
seen as more of the same, rather than a break
with the past.
A survey commissioned by the government
in the first half of the year, and subsequently
leaked, demonstrates the depth of opposition to
the dos Santos family and to corruption. The sur-
vey suggested that 53% of Angolans disapproved
of the MPLA’s actions over the last five years. It
went on to note various corruption scandals, sin-
gling out Vicente, Helder Vieira Dias “Kopelipa”,
Leopoldino Fragoso and the former president.
These corruption scandals coincide with mount-
ing problems in the health sector, increasing
crime and a general economic malaise.
If the new president can successfully pin all
the problems of Angola on the former president
and his interests, Lourenco will gain valuable
breathing space. Angola’s real problems, though,
run deeper. v
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AfrOil C o m m e n ta r y
Libya on the road
to recovery
Libya’s NOC is working on improving the country’s performance,
but challenges remain, writes David Flanagan
Libya Libyan oil production just keeps on rising.
After the debilitating years following the civil
W h at: war, when output slumped dramatically, the
Libya’s oil production has recovery has really taken root in 2017. National
gained ground over the Oil Corp. (NOC) has pledged to adopt reforms
last 12 months. aimed at having a more transparent attitude and
to have a more open “face to the market”, while
W h y: gas production is also expanding.
NOC has proved to be The company has set out plans to spend
a dedicated driver of US$20 billion over the next three years to con-
progress. solidate output and improve infrastructure. In
order to support this goal it has established an
W h at n e x t: office in Houston to help in talks with contrac-
With little scope to tors. US firms will be encouraged to bring new
increase production, technology and innovative production methods
Libya must improve its oil to Libyan sites, co-ordinated through the new
sector’s efficiency. office.
While US operators are unlikely to make
much of a push back into Libya, given the
domestic focus of many of those companies,
other interests are on the up. The UK’s ambassa-
dor to Libya, Peter Millett, has suggested holding
a conference in 2018 on opportunities for main-
taining and improving production facilities in
the North African state.
Millett met NOC’s chairman, Mustafa San-
alla, on December 5, and had talks on mutual
co-operation. The ambassador also noted Sanal-
la’s participation at a meeting in Tunis involving
UK companies.
Opportunities
New projects are focused in the offshore, though,
given the difficulties of operating onshore. The
Bouri field began producing in the first quarter
of 2017 and Eni’s Bahr Essalam Phase 2 pro-
ject should start in 2018. Some of the gas from
this latter development will supply Italy, via the
Greenstream pipeline, while the remainder will
go to the local market.
As Libyan output has risen, benefits have
been felt in Europe’s refining sector. The addition
of this crude offers flexibility and wider options
in terms of sources of supply. Libya must now
concentrate on holding on to the ground it has
captured and putting into motion its next steps.
Sanalla has indicated a desire to improve the
way in which Libya’s oil industry communi-
cates. Improved transparency, he said in OPEC’s
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September bulletin, would support Libya’s oil
industry “and hence we have to be more trans-
parent with our plans and outlook”. The coun-
try needs progress in a number of areas such
as infrastructure and security, which feeds into
investments.
NOC works “very hard with a minimum
investment”, he continued, with the company
trying to make the best use of its resources in
order to “keep oil flowing in the pipeline”.
Local challenges
While the trend and direction now being seen
are highly encouraging, challenges will be
encountered. Production often faces interrup-
tions in various places around the country, both
at a field level and on pipelines, as local interests
seek political or commercial leverage. Germany’s
Wintershall, which holds the NC 96 permit, has
confirmed that production has been volatile.
A representative of the Germany company
told NewsBase Intelligence (NBI) that oil pro-
duction had been “on and off during the whole
year”. The group has not produced oil since
November 2 at NC 96, said the spokesper-
son, “because the local community of Jakhira
demanded that Wintershall should shut in
production”.
Wintershall’s spokesperson added that inter-
mittent shut-ins during 2017 had also been a
result of the company “not being included in
the lifting programmes for Amna crude at the
Zueitina oil terminal”. As a result, the company
decided that it would not be an “economic
exploitation of the resources of the concession
to continue production without generating reve-
nues, while Wintershall is still obliged to carry all
production-related operational expenses”.
A deal was reached with NOC in June of this
year which allowed output to resume, reaching
65,000 bpd for a period, until the local commu-
nity protested.
The OPEC question, at least, seems to have
been solved – for the time being. The North
African state will continue to operate without a
quota but the country has agreed, as has Nigeria,
to keep a watchful eye on production in order to
ensure market stability. In effect, Libya is thought
to have committed to a target quota of 1 million
Week 49 12•December•2017
AfrOil C o m m e n ta r y
bpd, according to Bloomberg.
Libya had been aiming for 1.25 million bpd
by the end of 2017 and 1.5 million bpd by the
end of 2018. The first target is unlikely to be met,
owing to the sporadic disruptions that have dest-
abilised production, while the second seems to
be incompatible with the OPEC agreements.
Before the 2011 revolution, Libya was extracting
around 1.6 million bpd.
The immediate objective for Libya must be
to stabilise oil output. Following Sanalla’s recent
observations, NOC may now be expected to add
more detail to its plans for transparency, such as
providing more insight into the damage done to
the country’s infrastructure.
Investments over the next three years should
focus on ensuring that export assets are robust
enough to handle new volumes – the country
still has substantial scope for additions.
In parallel, Libya must make continued
efforts to resolve the dispute with Wintershall.
The country has made great progress in rescuing
its status this year, an accomplishment of which
it can be rightly proud. The real challenge will
now be to use the progress made this year as a
Investment
AP granted offshore Sierra Leone extensions
Sierra Leone’s Petroleum Directorate has
agreed terms with African Petroleum (AP) on
a second extension for its two offshore licences.
AP announced on December 5 that its European
Hydrocarbon and African Petroleum Sierra
Leone subsidiaries will also be allowed to mod-
ify their work programmes for the SL-03 and
SL-4A-10 licenses, which have been extended
to April 23, 2019 and September 17, 2019
respectively.
AP said these dates were pending a commit-
ment, to be undertaken by November 1, 2018,
to drill one exploration well in each licence area
during the extension periods. Over the next 12
months, AP will apply state-owned well and seis-
mic data and other existing seismic to de-risk the
concessions, prior to deciding to commit.
In accordance with Sierra Leone’s licensing
requirements, AP has also relinquished 50%
of the SL-03 licence area, now reduced to 962
square km, and 50% of the SL-4A-10 license
area, which now measures 995 square km. It also
said that Sierra Leone’s parliament ratified the
changes on December 4.
Week 49 12•December•2017 w w w. N E W S B A S E . c o m
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foundation for higher oil output – and crucially
for more efficient oil production.
Challenges do not just come from local
groups and oilfield maintenance. Libya’s elec-
toral regulator announced last week that the
voter registration process had begun, ahead of
the presidential and parliamentary elections due
in 2018.
NOC has managed to avoid too much polit-
ical interference, with Sanalla taking care to
define the company as apolitical. A vote – if it
goes ahead – will carry legitimacy and, as a result,
there will be new pressures on the company.v
Since 2010, AP has invested more than US$39
million in the two licences, but drilling plans
have been held up by the company’s search for
a farm-in partner. It claimed that recent tech-
nology advances and gradually lowering costs
for ultra-deepwater drilling have helped revived
interest in the acreage, where water depths across
the two licenses reach 3,000-3,600 metres.
“Based on recent discussions we have
held with industry players, we are aware of an
increased appetite for material ultra-deep off-
shore opportunities, driven by the advance-
ments in drilling technology and the decrease in
operating costs,” said the company’s CEO, Jens
Pace. “The additional flexibility afforded by the
amended commitments will help us to introduce
new parties to the project.”
UK-based consultancy ERC Equipoise has
been working with AP to re-assess the pro-
spective oil resources on both licences through
the inclusion of two new prospects, Leo and
Vega. AP said it expects the revised prospective
resources for the SL-03 and SL-4A-10 licences to
be published shortly.v
P7
AfrOil Investment AfrOil

Sinopec plans Nigeria, Gabon sale

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

Addax’s primary driver

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

to June of this year,

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

10

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AfrOil P er f o r m a n ce AfrOil

Atoll, Zohr near Nicosia Baniyas

Syria

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

gas field at a rate of 8.5 mcm per Damascus

Planned Pipeline
day, Egyptian Minister of Petro- Tamar

leum Tarek al-Molla announced Zohr

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

Zohr gas field. The Eni-operated

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

falling domestic gas production

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

Week 49 12•December•2017 w w w. N E W S B A S E . c o m P9
AfrOil P o l ic y
Kinshasa extends offshore
production licence
Congo Congo Kinshasa has agreed to extend the
Kinshasa licence for the Offshore DR Congo block for 20
years, Japan’s Inpex said on December 6. The
Japanese company has a 32.28% stake in the
concession, while Muanda International Oil Co.
(MIOC) has 50% and Chevron has 17.72%.
As a result of this agreement, the licence has
been extended from November 2023 to Novem-
ber 2043.
The 1,000 square km block lies in water depth
of four to 20 metres and, as of September, was
producing around 11,000 bpd of crude from 10
oilfields.
The concession was acquired in 1970 and
began producing in 1975. Inpex said the licence
extension would allow it to increase production
and reserves attributable to the company. The
financial impact was described as minimal.
As such, this tallies with the Japanese com-
pany’s “continuous enhancement” of explora-
tion and production, which it defined as one of
P r o j ec t s & C o m p a n ie s
Erin spuds Oyo exploration well
Nigeria US-listed Erin Energy has begun drilling the
Oyo North West exploration well in Nigeria’s Oil
Mining Licence (OML) 120.
The well is targeting a mean resource of 1.1
million barrels, the company said on Decem-
ber 6. Work on the well is being carried out by
the Pacific Bora, a sixth-generation drilling
rig owned by Pacific Drilling on a dayrate of
US$195,000. The hole should take 60 days to drill
and log, Erin said.
“We are extremely pleased to have com-
menced drilling of the Oyo North West pros-
pect,” said Erin’s CEO, Femi Ayoade. “Our team
has worked hard to mature our extensive portfo-
lio of prospects and we look forward to positive
results from this campaign. A discovery in the
Miocene formation would be a significant step
forward in the evolution of our company.”
Success at the well would allow oil to be pro-
duced via its existing floating production, stor-
age and offloading (FPSO) vessel, on the Oyo
field.
The company signed up the Pacific Bora
in March of this year, with the rig arriving in
August. First, it drilled the Oyo-9 well, which
was intended to add 6,000-7,000 bpd.
While results from this well were in line with
expectations, the company said in October that
P10 w w w. N E W S B A S E . c o m
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its three growth targets in the medium to long
term. Inpex works on the DR Congo block via its
Teikoku Oil (D.R.Congo) subsidiary.
MIOC, the operator of the block, is a subsid-
iary of Perenco, which dominates the country’s
oil sector. The unit was bought from Chevron-
Texaco – as it was then – in 2004. At that point,
production was put at 19,000 bpd from seven
fields. Perenco also has onshore interests, which
produce around 15,000 bpd. Chevron holds its
current interest in the block via ODS, which the
US company received when it bought Unocal.
While Congo Kinshasa’s hydrocarbons sector
is relatively small, although with some explora-
tion prospects in the Cuvette Basin and in the
country’s east, in Lake Albert, mining is a much
larger part of its economy. Global Witness pub-
lished a report on the Congolese mining sector
in July, saying there was a “toxic combination of
corruption and mismanagement”, which had led
to the loss of US$750 million over three years.v
it had been forced to suspend the completion
and hookup of the development. Erin blamed
the guarantor of its loan facility, saying it had
“demanded the guarantor cease and desist from
interfering in the disbursement of funds for the
project”. As a result of these financial difficulties,
the company said it had demobilised the rig.
Erin ran into financial difficulties with the
FPSO provider, Bumi Armada, which sus-
pended the Oyo vessel in June as a result of a
build-up of unpaid bills. It agreed to allow oper-
ations to restart in August.
By the time Erin filed its third quarter results,
though, it had secured a funding commitment
of around US$20 million, from Greene Street
Capital, allowing it to restart its exploration plans
in OML 120. The company has not been able to
carry out the hookup work on Oyo-9 as yet. v
Week 49 12•December•2017
AfrOil P r o j ec t s & C o m p a n ie s
Egina edges onwards
Two contracts have been put to tender, for well
Nigeria
completion services and heavy equipment sup-
plies, at the Total-operated Oil Mining Licence
(OML) 130, home of Egina, one of Nigeria’s big-
gest offshore project. Notice of the tenders came
from NiPex, the country’s agency responsible for
the evaluation of upstream contracts.
The field is expected to begin producing in
the fourth quarter of 2018 and reach a peak of
200,000 bpd. Recent comments have reaffirmed
the project’s budget at US$16 billion.
Five out of the planned 44 subsea wells have
been drilled, at water depths of 1,400 to 1,700
metres, and 13 more will be completed when the
field starts up, said Total. Individual flow rates
are expected to be impressive, with Egina-5, for
instance, estimated to reach 12,000 bpd.
While progress is being made at the
ultra-deepwater field, located about 130 km off-
shore, there have been some concerns from the
government over contract awards, which has led
to an inquiry. Of particular interest is the ques-
tion of local content, with the Senate demand-
ing the head of National Petroleum Investment
Management Services (NAPIMS) provides
answers. Also under scrutiny are plans for Bonga
Southwest and Zabazaba, neither of which have
AAOG delays Tilapia well
Congo Anglo African Oil & Gas (AAOG) has posted
Brazzaville further delays in the arrival of a rig at its Tilapia
oilfield, in Congo Brazzaville. The company, in
an update on December 11, said it was also in
talks for a licence extension, which it intends
to complete before drilling the well. Currently,
the licence ends in 2020. An update is expected
before the end of the year, it said.
Much of AAOG’s hopes rest on the drilling
of the TLP-103 well. This is targeting a number
of horizons, including a producing reservoir –
expected to hold 8.1 million barrels of contin-
gent resources – and a deeper prospect, which
has 58.4 million barrels of prospective resources.
The company owns a 56% stake in the Tilapia
field, following its acquisition of Petro Kouilou.
The remaining 44% is held by Societe Nationale
des Petroles du Congo (SNPC).
The company has inspected the rig, which is
working with a company in Congo Brazzaville.
Its current contract is expected to end in January,
later than the previous estimate of mid-Decem-
ber. In an attempt to moderate the risk of fur-
ther delays, AAOG said it was in talks with other
potential suppliers, in order to begin drilling in
the first quarter of 2018.
“Targeting proven sands, an existing
Week 49 12•December•2017 w w w. N E W S B A S E . c o m
AfrOil
yet reached a final investment decision (FID).
Total has a 24% stake in OML 130 and is
the operator. CNOOC Ltd has a 45% stake,
Petrobras 16% and South Atlantic Petroleum
(Sapetro) 15%. Under mounting financial pres-
sure, Brazil’s Petrobras has indicated an interest
in selling its stake.
Egina will require 3,000 rig days from two
rigs, with 52 km of oil and water injection flow-
lines, 20 km of gas export pipelines,12 flexible
jumpers and 80 km of umbilicals. Several Nige-
rian companies, largely in partnership with
experienced international partners have been
involved in the project from scratch.
Total has taken pains to highlight the local
content aspect of the project. “The idea is to
accelerate the pace of technology transfer by
training Nigerian employees … It is expected
that 21 million man-hours will be worked
locally, corresponding to 70% of the total hours
planned for the project. Some 58,000 tonnes, or
34% of equipment will also be produced locally.”
The floating production, storage and offload-
ing (FPSO) is due to arrive in Nigeria at the end
of January and the topsides will be integrated in
country, at the Lagos Deep Offshore Logistics
(LADOL) base. v
discovery and a deeper interval that is known
to be a prolific producer on neighbouring fields,
TLP-103 is potentially a transformational well
for AAOG,” said the company’s executive chair-
man, David Sefton. “We are conscious that there
have been delays due to the availability of our
preferred rig, and that this has caused frustration
to shareholders. We are working hard to secure
the new licence and ensure that drilling can com-
mence as early as possible in 2018.”
In addition, AAOG is struggling to increase
production from its TLP-101 well. The company
said there had been no increase in output but
that this would come after the flow lines between
the wellhead and separator were replaced. As of
September, output from this well was 48 bpd.
The TLP-102 well, meanwhile, will need
mechanical intervention in order to begin pro-
ducing. Once the TLP-103 well has been drilled,
the rig will carry out this work, AAOG said. The
TLP-101 and TLP-102 wells have the potential to
flow at 185-250 bpd combined, it said, but more
work must be done to secure this.
Achieving this target would allow the com-
pany to reach breakeven, and success at the new
well would potentially bring AAOG’s output to
around 750 bpd, it said in September.v
P11
AfrOil P r o j ec t s & C o m p a n ie s AfrOil

Spectrum kicks off

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

P12 w w w. N E W S B A S E . c o m Week 49 12•December•2017

AfrOil
NO R T H AF R I C A
Italy natural gas market at Siemens signs on to boost
DEA signs memorandum of ‘pre-alert’ level
understanding in Algeria
DEA Deutsche Erdoel AG and the Algerian
state company Sonatrach have signed a
memorandum of understanding (MoU). The
MoU aims at strengthening ?the co-operation
between the two companies and defines the
framework for DEA’s potential participation in
additional upstream projects in Algeria. The
agreement was signed by Sonatrach upstream
vice-president Salah Mekmouche and DEA
chief operating officer Dirk Warzecha.
“This MoU builds on the existing business
relationship between DEA and Sonatrach and
paves the way for further co-operation of the
two companies. It also reflects DEA’s long-
term commitment to Algeria and represents
a good opportunity for us to access additional
business opportunities in one of our core
countries,” said Warzecha.
“DEA has been active in Algeria for more
than 15 years. We welcome the opportunity
to co-operate with Sonatrach in identifying
oil and gas projects of common interest in
Algeria and we hope that this will result in
significant value creation potential for both
parties,” added Sameh Sabry, who is the new
general manager for DEA in Algeria since
September 1, 2017.
Algeria is the leading natural gas producer
in Africa and an important natural gas
supplier to Europe. DEA participates in the
Reggane Nord project in the Algerian Sahara
with a 19.5% working interest. Reggane Nord
comprises of six gas fields under development,
which are planned to be brought on stream in
the coming few months.
DEA (GERMANY), December 6, 2017
65
60
55 53.37
51.67
52.4
US$ per barrel
50
45
40
35
30
Dec-16 Jan-17 Feb-17
Week 49 12•December•2017
New s i n b rie f
Libya power generation
PSV spot, the Italian wholesale natural gas
contract for day-ahead delivery, has extended
its rally as grid system operator Snam said the
gas balance in Italy was entering a pre-alert
status in cold weather.
The Ministry of Economic Development
has declared an Early Warning level of the
Emergency Plan in the Italian gas market,
Snam said in a published statement.
However, tight supplies may ease in the
next two days as they are public holidays in
Italy.
Despite increased Italian demand, Algerian
flows to Italy remained flat at 63 million cubic
metres.
Algeria has been hit by a cold snap in
recent days, with temperatures 3-5 C below
seasonal norms in the key demand centres
such as Algiers, which has triggered increased
domestic demand for gas and power. The
supply crunch comes as Algeria vowed to
maintain its export levels through the winter
and follows the startup last month of a new
associated gas production project at the Hassi
Messaoud oil field. The project means an
associated gas that before now was mostly
converted into LPG can be sent into the main
Algerian gas grid.
The project started up at a rate of 10
million cubic metres per day, the equivalent
of 3.7 billion cubic metres per year, but can be
increased to 20 million cubic metres per day
if needed.
To offset flat Algerian gas flows to Italy,
Russian gas flows to Italy via Austria ramped
up to 110 million cubic metres, after averaging
102 million cubic metres per day in Week 48.
PLATTS (US), December 6, 2017
OPEC's benchmark basket
60.74
55.5
53.44
51.37
50.32
49.2 49.6
46.93
45.21
Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17
w w w. N E W S B A S E . c o m
AfrOil
Siemens has signed contracts with the state-
owned utility General Electricity Company
of Libya (GECOL) to expand Libya’s power
generation capacity by approximately 1.3 GW.
Under these contracts, Siemens will build a
650 MW open cycle power plant in Misrata,
equipped with two F-class gas turbines, and
a 690 MW open cycle power plant in Tripoli
West, equipped with four E class gas turbines.
The total volume of EPC contracts, including
long-term service agreements, is in the range
of 700 million euros.
Siemens has been supporting Libya with
technology and expertise since the 1950s.
CEO of Siemens’ Power and Gas Division,
Willi Meixner, said: “Around 30% of Libya’s
installed power generation capacity is based
on Siemens technology that delivers electricity
to two million people. After completion,
the power plants in Misrata and Tripoli
West will help the country to solve the
ongoing challenges caused by frequent and
unpredictable power cuts”.
SIEMENS (GERMANY), December 11, 2017
NOC Chairman receives the
French Deputy Ambassador
to Libya
Mustafa Sanalla, NOC Chairman of the
Board, has received the French Deputy
Ambassador to Libya Mr Iyad Jaber at NOC
HQs on December 2017 in the presence
of Mr Salah Ben Ali Manager of Office of
International Cooperation at NOC.
The French Deputy Ambassador formally
invited NOC to participate in a workshop that
will be carried out by French companies and
held in Tripoli during the first half of next
v year. The meeting discussed oil relationships
with the French companies and ways to
61.12 strengthen and develop such relationships.
The two Parties also talked about the
conditions of the oil and gas sector in Libya
and the challenges that face NOC and its
subsidiaries in addition to the efforts made
to improve the security situation to achieve
production stability and oil flowing in the
entire fields and ports.
NOC (SOUTH AFRICA), December 7, 2017
SDX makes gas discovery
at KSR-16 well
Dec-17 SDX Energy has announced that a gas
discovery has been made at its KSR-16
development well on the Sebou permit in
P13
AfrOil
Rigs in Africa
90
13
80
14
15
9
10
70
60
50
40
68 70 76 69
30
February March April May
Land
June
Morocco.
The KSR-16 well was drilled to a total
depth of 1,896 metres and encountered 14.2
metres of net conventional natural gas pay in
the Hoot formation. The company expects
that the well will be connected to the existing
infrastructure and placed on production
within the next 30 days.
The drilling rig will now move to the
ELQ-1 prospect on the Gharb Centre permit
and drill the first commitment well on this
recently acquired licence.
The recently completed KSR-15 well has
been connected to the existing infrastructure
and it is anticipated that test production will
commence early next week.
SDX ENERGY (UK), December 11, 2017
South Sudan optimistic
rising oil prices will boost
economy
South Sudan said that it hopes to reap from
the global rise in oil prices to uplift an
economy weakened by nearly four years of
civil war that led to a halt in the nation’s oil
production. “The oil market is appreciating
now very well the oil price is going up its
US$65 a barrel and yet in South Sudan, it’s
something we need to celebrate because our
economy is driven by oil. We are going very
well in the oil industry,” Petroleum Minister
Ezekiel Lol Gatkuot said.
“If you look at the production in Dar
Petroleum or DPOC in Paloch, we used
to produce 270,000 bpd but now we are
producing 135,000-140,000 bpd. Then if you
go to GPOC we used to produce close to
200,000 bpd but now we are producing zero,”
said Gatkuoth. “So we have agreed with Sudan
to resume the production there,” he added.
The minister further disclosed that the French
oil giant Total and Tullow also expressed
willingness to invest in South Sudan’s oil
blocks.
“Total is coming back for B1, B2 and you
have Tullow being committed to making sure
that we are going to seal the deal with them.
P14
New s i n b rie f
14
12 14
13
72 75 66 71
72
Offshore
July
Algeria
August September October
Source: Baker Hughes
After the oil conference here in Juba a lot of
oil companies are interested to come to South
Sudan,” he further explained.
SUDAN TRIBUNE (FRANCE), December 4, 2017
Debating South Sudan’s
future
A group of concerned citizens in South
Sudan have warned that the situation in the
country is likely to become even worse unless
a genuine, inclusive political process can be
started immediately. The group says South
Sudan’s internal conflicts cannot be settled
by war but must be settled through political
dialogue based on a shared vision for a
peaceful future in which the South Sudanese
are united in diversity.
The Concerned Citizen’s Network for Peace
(CCNP) therefore calls upon the wisdom of
the leaders of all South Sudanese parties to act
for the general good of all citizens.
The CCNP recently published a report
setting out their vision for South Sudan. The
major objective of the report is to stimulate an
open debate and to motivate those in power
to foster a peaceful future for South Sudan,
but at the same time to be prepared for other
scenarios.
The report updates developments in South
Sudan based on a 2016 analysis of five possible
scenarios for the country: United in diversity,
divided leadership, fragmentation, 21
kingdoms and dictatorship. According to the
CCNP’s analysis, without swift and concerted
action South Sudan is heading toward one
of the darker of these scenarios. However, it
is not too late to steer the country toward a
better scenario, unity in diversity. This would
take political will and a renewed political
process.
To achieve this, the CCNP calls upon all
South Sudanese parties to end the military
strategy through a complete and sustained
cessation of hostilities and return to dialogue
and the renewal of the political peace
process. Parties should establish a transitional
authority of technocrats that would allow for
important reforms to be made before free
w w w. N E W S B A S E . c o m
AfrOil
v
and fair elections are held. Next, to this, a
11 broad-based inclusive national dialogue, the
opening up of political and civic space, and
support for local initiatives of reconciliation,
healing and peacebuilding are needed. The
population needs to be supported through
international assistance by the intensification
of humanitarian assistance, sufficient security
provision to all citizens, and upgrading of the
protection of civilians (POC) sites.
74
PAX (SOUTH SUDAN), December 11, 2017
November
South Sudan owes Sudan
for US$1.3 billion from 2012
oil deal
South Sudan still owes neighbouring Sudan
US$1.3 billion from a 2012 deal that ended
a dispute over oil payments between the two
nations, the deputy finance minister told
Reuters before he was sacked last week. The
previously undisclosed amount is equivalent
to eight years worth of oil revenues for South
Sudan at current prices, according to former
deputy minister Mou Ambrose Thiik. He
spoke to Reuters and was removed from his
post by President Salva Kiir later that day.
Finance Minister Stephen Dhieu Dau
did not answer calls or text messages. Oil
Minister Ezekiel Lol Gatkuoth also did not
answer calls or text messages. Information
Minister Michael Makuei said he could
not comment on figures. In 2012, South
Sudan shut down oil output after it could
not reach an agreement with neighbouring
Sudan, its former ruler, on payment to use
its infrastructure to export crude from its
oilfields.
South Sudan eventually agreed to pay US$3
billion to Khartoum in a late 2012 agreement.
South Sudan is also supposed to pay royalties
fees for each barrel of oil it exports through
Sudan. But Thiik said Juba still owes US$1.3
billion of that original amount.
REUTERS, December 6, 2017
W E ST AF R I C A
ESIA process begins for
Tower in Cameroon
Tower Resources has announced that it
has awarded CIME Services of Cameroon
the support contract for preparing an
Environmental and Social Impact Assessment
(ESIA) for the drilling of multiple wells on
Tower’s Thali licence in Cameroon.
The ESIA is a process governed by the
Ministry of Environment, Nature Protection
and Sustainable Development of Cameroon
(MINEPDED). The contract has been
Week 49 12•December•2017
AfrOil
awarded following a competitive tender
among three companies, and covers the
preparation and approval by MINEPDED
of the terms of reference of the ESIA, the
preparation of a stakeholder consultation
report, and support through public hearings
and the submission of the ESIA report to the
MINEPDED for approval.
The completion and approval of the
ESIA constitute an important step before
launching the drilling campaign on the Thali
license. CIME is a highly experienced firm in
conducting oil and gas ESIAs in Cameroon.
It is expected that the ESIA process will be
completed by June 2018.
TOWER RESOURCES (UK), December 11, 2017
Workers strike over
wrongful dismissals at
OCTP
Ghanaian workers operating on the Eni
onshore receiving facility for the OCTP
project at Sanzule in the Ellembelle
constituency in the Western region, have
suspended operations over unlawful
dismissals. Citi Business News understands
the workers have embarked on a sit down
strike as a result of the development. The
Week 49 12•December•2017
New s i n b rie f
Ghanaian workers, numbering about five
hundred, say they are gradually being replaced
by other nationals on the field despite having
same qualification.
A situation one worker who spoke on
condition of anonymity describes as a breach
of the country’s local content laws. They
believe the move is also a violation of their
three months renewable contracts with
Amaga Oilfield and Orsam for the past nine
months.
CITIBUSINESS (GHANA), December 6, 2017
Nigeria, World Bank, others
verify gas flare sites
Programme Co-ordinator of the Nigerian
Gas Flare Commercialisation Programme at
Nigeria’s Ministry of Petroleum Resources
Justice Derefaka says the federal government
has commenced the verification of gas flare
sites across the country. He said that the
federal government had discovered that there
were at least 178 sites where gas were flared, as
opposed to 140 sites listed in the past.
He said the verification exercise was
conducted in conjunction with the World
Bank, United States Agency for International
Development (USAID) and the Canadian
government. According to him, the
w w w. N E W S B A S E . c o m
AfrOil
verification is still ongoing, as only 60% of the
expected data has been received, while the rest
are being awaiting.
He explained that the essence of embarking
on the verification exercise was to address
issues of bankability and the need to attract
investors and financiers to the gas flare
commercialisation initiative. He said that the
overall idea was that the country must have a
credible, measurable, attainable data that was
bankable, so that it would be an investment-
grade data for investors and lenders to put
their money.
Derefaka noted that by the time investors
see that the World Bank had done a lot of
studies with the federal government, and
the remaining sites are verified, they would
come in and make investment. “We have
bankability issues, because data is very key to
us. Without accurate data, gas flare data, then
this programme is dead on arrival.
NAN (NIGERIA), December 6, 2017
577 Firms bid for NNPC
Insurance Renewal
programme
The Nigerian National Petroleum Corporation
(NNPC) has said that 577 firms have
P15
AfrOil
indicated interest to secure the insurance
renewal contract for its oil and non-oil assets.
In a statement signed by the Groups General
Manager, Mr Ndu Ughamadu, it said the
bidding was part of corporation effort to
ensure transparency.
It quoted the NNPC Group General
Manager of Risk Management and Insurance,
Mr Modupe Bameke, who said that the
bidding was also a requirement of the Bureau
of Public Procurement (BPP).
“The essence of this public bid opening
is to ensure that the Corporation complies
strictly with the provisions of the Bureau of
Public Procurement Act (BPP). All the bids
will be opened in the presence of everybody
to ensure that all entries are properly captured
in line with the transparency principle of the
NNPC,” he said.
Also, the Group General Manager of
Supply Chain Management, Mr Shehu Liman,
said that the public opening bids measure was
aimed at providing a level playing field for all
bidding companies.
“The idea is to select broking and insurance
companies that are credible and capable of
track records of performance. What this
means is that we are going to eliminate all
those transactions that are not necessary”.
A breakdown of bidders shows that 245
brokers tendered for oil assets, 251 brokers
tendered for non-oil assets while 37 insurance
companies tendered for oil assets and 44
tendered for non-oil assets.
NAN (NIGERIA), December 10, 2017
Oyo set to generate 2000
MW through IPP
The Oyo State Government has claimed that
necessary arrangements are being put in
place to generate more electricity through
the Independent Power Project (IPP), saying
that it has sought the approval of the National
Energy Regulation Commission (NERC) to
generate 2000 MW embedded power.
The Commissioner for Works and
Transport, Mr Wasiu Dauda, made
the disclosure during a meeting with
the Management of Ibadan Electricity
Distribution Company (IBEDC) at IBEDC
office headquarters in Ibadan. Dauda stated
that the state government is poised to proffer
a lasting solution to the challenge of power
generation shortfall in the state in order to
improve the social and economic growth of
individuals, corporate organisations, the state
and the country at large.
The Commissioner explained that the
analysis of the energy needs of the State
revealed that Oyo State requires about 1265
MW, adding that the State Government has
requested for the approval of the NERC to
generate 2000 MW embedded power. He
P16
New s i n b rie f
stated that the State Government is already
having fruitful discussions with Messrs
Diversified Global Eco- Energy, DGE, and
efforts have resulted in the starting of the
project using Ibadan North and South West
Local Government as a pilot scheme with a
total of 100 MW.
Dauda said that Ibadan North Local
Government is chosen to represent the
residential client template of the scheme
while Ibadan South West Local Government
represents the industrial client template,
pointing that a total of 50 MW is intended to
be provided for each of the Local Government
Area chosen as a pilot scheme.
THE NEWS (NIGERIA), December 10, 2017
Senate threatens NAPIMS
boss with arrest over Egina
project
The Senate Committee on Local Content
has ordered the Group General Manager
of National Petroleum Investment and
Management Service (NAPIMS), Mr Roland
Ewubare, to appear before it in the next 24
hours, or risk consequences.
The Chairman of the committee, Sen.
Solomon Adeola, said Ewubare was expected
to appear before the committee to explain the
huge variations associated with the US$16
billion Egina Deep Sea Oil Project. Adeola
decried that it was becoming a tradition in
the Nigeria National Petroleum Corporation
(NNPC) and its subsidiaries to treat National
Assembly invitations with levity.
He said the committee would no longer
tolerate this, adding that “henceforth we
will not deal with ‘lieutenants’ of these
agencies without their heads or cogent
reasons in advance.” According to him,
“NAPIMS has sent three General Managers
as representatives to the committee after it
received an invitation three weeks ago for an
appearance of the Group General Manager.
“He was invited to throw light on
submissions made by Total Exploration
and Production Nigeria handling the Egina
project but we have not seen him since the
invitation was sent three weeks ago,” he said.
The Vice Chairman of the Committee, Sen.
Godswill Akpabio, according to the statement,
expressed displeasure over the inability of the
GMD to appear before the committee.
SWEET CRUDE (NIGERIA), December 8, 2017
Fuel scarcity to worsen
as PENGASSAN threatens
strike
The Petroleum and Natural Gas Senior Staff
w w w. N E W S B A S E . c o m
AfrOil
Association of Nigeria (PENGASSAN)
has threatened to disrupt fuel supply and
distribution across the nation via a strike
action from December 18, 2017. The
association said it is unhappy with the Federal
government for not addressing its grievances
as regards unfair labour practices by the
management of some indigenous oil and gas
companies.
This latest development was made in a
statement by the general secretary of the
association, Comrade Lumumba Okugbawa.
The association expressed anger over
unfair labour practices and the government’s
inability to tame some indigenous oil
and gas companies and marginal field
operators. PENGASSAN accused Neconde
Energy (of Nestoil Group of companies) of
sacking workers that joined the union and
dehumanising them in total disregard of the
rules of engagement.
According to Okugbawa, “The action
of companies such as Neconde in the mass
sacking of Nigerian workers contributes in
no small measure to the unending militancy
in the Niger Delta. This company has also
severally boasted that no government agency
can call it to order.”
SWEET CRUDE (NIGERIA), December 8, 2017
Nigeria’s Senate passes
2018-2020 budget
framework, raises oil price
estimate
Nigeria’s Senate passed the government’s
medium-term expenditure framework for
2018-2020 on Tuesday, raising its oil price
assumption to US$47 from US$45 per barrel.
The document, which the government
agreed upon in August before sending it to
lawmakers for approval, is the framework
used to prepare the country’s budget.
Aside from the oil price assumption, all
other details contained in the document were
kept the same by the lawmakers in the upper
house of parliament. It must also be passed
by the lower chamber before being applied to
spending plans.
Nigeria is Africa’s biggest oil producer
and crude oil sales make up two-thirds of
government revenue. In the second quarter
Nigeria emerged from its first recession in
25 years which was largely caused by low oil
prices and militant attacks in the Niger Delta
energy heartlands.
The budget framework projects crude
production of 2.3 million bpd for next year.
It also forecasts growth of 3.5% for next year,
rising to 4.5% by 2019 and 7% by 2020.
REUTERS, December 5, 2017
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AfrOil
SEC begins forensic audit of
Oando
The Securities and Exchange Commission
(SEC) will commence a forensic audit of
Oando, contrary to reports that the audit had
been stopped following the suspension of
director-general of the commission Mounir
Gwarzo. In a letter, the SEC notified Oando
group CEO Adewale Tinubu of its decision to
conduct a forensic exercise into the activities
of the company.
The letter, which was signed by SEC acting
director-general Dr Abdul Zubair said the
forensic auditors would be at the premises
of Oando to undertake the audit. Zubair
was appointed by the federal government on
November 30, 2017.
It will be recalled that following the
recent suspension of former SEC director-
general Mounir Gwarzo, facts emerged that
the DG was suspended for looking into the
affairs of Tinubu, a close ally of the present
administration.
NAN (NIGERIA), December 6, 2017
NASS passes MTEF
The two chambers of the National Assembly
passed the long-awaited 2018-2020 Medium-
Term Expenditure Framework (MTEF) and
the Fiscal Strategy Paper (FSP). This followed
the adoption of report of Joint Committees
on Finance, Appropriation, Loans and Debt
Management, Legislative Budget and Research
and National Planning and Economic
Development at both chambers. At the senate,
the report was presented by Senator Yahaya
Abdullahi (APC-Kebbi) on behalf of the
committee, while Chairman of the Committee
on Finance Babangida Ibrahim did so at the
House of Representatives. Both chambers
adopted US$47 per barrel as oil benchmark
for 2018 budget and retained the 2.3 million
bpd oil production and market rate of 305
naira to a dollar as proposed by the executive.
Similarly, the chambers recommended
Week 49 12•December•2017
New s i n b rie f
adoption of projected 5.28 trillion naira
for non-oil revenue and adoption of 1.7
trillion naira for new borrowing. The senate
recommended that relevant committees of
the National Assembly should constantly and
closely oversight Ministries, Agencies and
Departments (MDAs) on the implementation
of programmes to ensure effective targeting of
beneficiaries.
NAN (NIGERIA), December 5, 2017
Nigerian oil magnate left us
high and dry over mansion
sale S.African prosecutors
extend deadline for Zuma to
A billionaire prince is being sued for GBP1.8
million by a couple who claim he left them
file arguments over revived
with a “huge hole” in their finances when
he pulled out of a deal to buy their London
graft charges
mansion. Richard and Deborah Conway say
they were left stranded on the housing ladder
when Nigerian oil magnate Prince Arthur
Eze withdrew from the deal on their GBP5-
million home in Mill Hill.
However, the Nigerian royal, said to be
worth GBP2 billion, denies breach of contract
and is counter-suing the couple for the return
of a GBP500,000 deposit. The court heard
they exchanged contracts for the nine-
bedroom home in August 2015, but Prince
Eze had been acting through a “go-between”
and had never seen the house.
The 62-year-old prince, the founder of
oil firm Atlas Oranto Petroleum, paid a 10%
deposit of GBP500,000 but now alleges the
deal was void because the Conways agreed
to pay the agent a “secret commission” to
secure the sale. The Conways, who deny any
inappropriate conduct, said the “go-between”
contacted them initially without Prince Eze’s
knowledge and later raised the prospect of a
“GBP75,000 finder’s fee”.
EVENING STANDARD (UK), December 5, 2017
SOUT H E R N AF R I C A
Fluor chosen for Durban
terminal work
Fluor has announced that it was awarded an
engineering, procurement and construction
management contract by Vopak Terminal
Durban (Pty) to deliver the Vopak Growth
4 Project in Durban, South Africa. Fluor
booked the undisclosed contract value in the
fourth quarter of 2017.
The expansion project is part of Vopak’s
programme to facilitate the increased demand
for fuel with cleaner specifications in Southern
Africa by increasing the capacity of fuel
storage at its Durban terminal.
w w w. N E W S B A S E . c o m
AfrOil
To add value to the project, Fluor will use
its global networks to competitively source
material and equipment that cannot be
sourced locally. Local contractors and vendors
will also be used to further develop and
sustain the local labour market, enterprises
and economy.
Fluor previously completed Vopak’s
Fuel 2 project at the same location and
will similarly execute this project in a safe,
socially, economically and environmentally
responsible manner to benefit future
generations.
FLUOR (US), December 11, 2017
South Africa’s National Prosecuting Authority
(NPA) has said that it has extended the
deadline for President Jacob Zuma to
submit arguments on why he should not be
prosecuted for corruption. “They must submit
their representation on the 31st of January,”
said NPA spokesman Luvuyo Mfaku.
The 783 charges against Zuma relate to a
30 billion rand (US$2.20 billion) government
arms deal arranged in the late 1990s. They
were filed but then dropped by the NPA
shortly before he ran for the presidency.
REUTERS, December 11, 2017
E AST AF R I C A
East African countries
adopts energy security
policy
The East African Community (EAC) has
adopted a policy that will enable countries to
manage the security of their energy supplies.
The EAC becomes the first bloc on the
continent to have such a policy. The Energy
Security Policy Framework comes at a time
new discoveries of oil and gas reserves have
been made in Kenya, Uganda and Tanzania.
Elsam Turyahabwe, an energy expert at the
EAC Secretariat said the policy will guide
countries as they implement projects to boost
access to energy.
East African countries have been
depending largely on imported refined
petroleum. Yohannes Hailu, an energy
economist at the United Nations Economic
Commission for Africa said the energy
framework will also address disruptions in
the supply of imported energy, particularly
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AfrOil
hydrocarbons, and sharp swings in prices,
which undermine the momentum of
economic development taking place in East
Africa.
“Actions are recommended to restore oil
and gas supplies security in exploration and
developmentce,” said Hailu. Projections show
that the implementation of planned energy
projects will see the region register a surplus.
For example, an additional 5,000 MW of
power will give Kenya surplus capacity in the
2018-2020 period.
THE EAST AFRICAN (KENYA), December 5,
2017
Mozambique debt
restructuring to drag on
until 2019 at least
The BMI Research consultant group
revealed that it thought Mozambique’s debt
restructuring process would not be resolved
until 2019 at the earliest, and that lack of
financing and pre-election spending would
limit infrastructure spending in the country.
“We see it as unlikely that donors and
concessional institutions will re-engage with
Mozambique over the coming quarters,” the
consultants write in an economic analysis note
on capital spending.
In the analysis, which Lusa has access to,
the Fitch consultancy experts say that, with
the approach of the municipal elections in
2018 and legislative elections in 2019, “the
authorities will refrain from cutting current
expenditure and thus capital spending will
inevitably suffer most in fiscal consolidation”.
This, they continue, will result in “a
smaller implementation of infrastructure
projects, which will negatively influence the
competitiveness of the economy and keep
GDP growth well below the trend of recent
years”. BMI Research predicts a government
deficit of 4.4% this year and 3.8% in 2019,
noting that last year, “capital expenditure
almost stopped compared to the previous
year”.
Capital expenditure comprises
infrastructure costs borne by the state and
is of particular importance in Mozambique
due to the weak logistic conditions faced by
large multinationals wanting to invest in the
country.
CLUB OF MOZAMBIQUE (MOZAMBIQUE),
December 5, 2017
Keppel Offshore & Marine
inks Mozambique FLNG
Keppel Offshore & Marine, through its
subsidiaries, has signed new contracts from
Petrobras and SOFEC, worth in total about
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New s i n b rie f
US$96.22 (S$130 million).
Keppel Shipyard’s contract from SOFEC is
for the fabrication of a turret mooring system
for the newbuild floating liquefied natural
gas (FLNG) vessel bound for the Coral South
FLNG Project in offshore Mozambique.
Fabrication is due to start in the first quarter
of 2018 with the delivery of the turret
components expected in the first quarter of
2020.
OE DIGITAL (US), December 11, 2017
Eni achieves financial close
for Coral South FLNG
Eni, together with its Area 4 Partners, has
announced that the Coral South FLNG multi-
sourced project financing achieved financial
close, for a total amount of US$4.7 billion
in the following facilities: BPI Export Credit
Agency Covered Loan, KEXIM Export Credit
Agency Covered Loan, Ksure Export Credit
Agency Covered Loan, Sace Export Credit
Agency Covered Loan, Sinosure Export Credit
Agency Covered Loan, Commercial Bank
Direct Loan and KEXIM Direct Loan.
Coral South FLNG is the first project
sanctioned by the Area 4 Partners for the
development of the considerable gas resources
discovered by Eni and its Partners in the
Rovuma Basin offshore Mozambique. It
targets the production and monetization of
the gas contained in the southern part of the
Coral gas reservoir, by means of a floating
LNG plant with a capacity of 3.4 MTPA. A
Sale and Purchase Agreement was signed
in 2016 for the sale of 100% of the LNG
production to BP.
Eni is the Operator of Area 4, holding a
50% indirect interest through its participation
in Eni East Africa (EEA). In March 2017,
Eni and ExxonMobil signed a Sale and
Purchase Agreement to enable ExxonMobil
to acquire a 25% interest in Area 4, through
EEA. The remaining interests in Area 4 are
held by CNODC (20%), Empresa Nacional
de Hidrocarbonetos E.P. (ENH, 10%), Kogas
(10%) and Galp Energia (10%).
ENI (ITALY), December 6, 2017
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AfrOil
Total pledges to support
Tanzania in oil exploration
in four lakes
Total, the French multinational integrated
oil and Gas Company, has pledged to
support Tanzania in oil exploration in four
lakes, a statement said. The statement was
released by the Directorate of Presidential
Communication at State House and said that
the pledge was made by Total chief executive
officers during talks with President John
Magufuli.
According to the statement, Total has
decided to heavily invest in the gas and oil
market. The company has agreed to work
closely with the government of Tanzania in
the exploration of oil in Lakes Tanganyika,
Eyasi, Wembere and Rukwa.
Total’s President for Marketing and
Services, Momar Nguer, said the oil company
was in final stages of preparations to start
implementation of the oil pipeline project.
Nguer made the remarks after president
Magufuli had asked the oil firm to speed up
implementation of the project scheduled to be
completed in 2020.
XINHUA (CHINA), December 7, 2017
Tanzania’s Magufuli
to launch nationalism
campaign
Tanzania’s President John Magufuli it set
to launch a nationalism campaign at the
University of Dodoma. The drive, organised by
the Ministry of Information, Culture, Sports
and Arts, is aimed at inculcating patriotism
among Tanzanians. Dr Harrison Mwakyembe,
the minister, briefing reporters in Dodoma,
said that in recent days unity and solidarity had
been diminishing among the people, including
leaders, due to lack of nationalism.
He added that the ‘Nchi Yangu Kwanza’
(My Country First) campaign, which is part of
the Independence commemorations, will help
revive the spirit of nationalism as espoused
by the founding leader Mwalimu Julius
Kambarage Nyerere. “It’s a shame to see some
people showering praise on leaders who have
been ejected out of the leadership system due
to malpractices, especially fraud,” he said.
He said the country cannot industrialise
its economy unless all people embrace
nationalism. “Development calls for unity and
solidarity, in absence of these, nothing good
can be achieved,” he insisted. Tanzania will
mark its 56th Independence Day celebrations
on December 9.
THE EAST AFRICAN (KENYA), December 7,
2017
Week 49 12•December•2017
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