Page 1

ORA 4 2012 Cover_cover.qxd 18/07/2012 14:08 Page 1

■ Geology - p31 ■ Gas - p34 ■ Exploration - p38 ■ Technology - p48

Volume 7 Issue Four 2012


Covering Oil, Gas and Hydrocarbon Processing Oil Review Africa - Issue Four 2012

Preparing today for a better tomorrow Operational performance and predictive risk systems

Europe m15, Kenya Ksh300, Nigeria N400, South Africa R20, UK £10, USA $16,50

HR’s deepening offshore challenge

Equatorial Guinea - a global oil & gas force Egypt still pulling in investment D. R. Congo undoubted potential but challenging Securing effective piping connections in Africa’s operations Power generation today: rent or buy? Offshore access bridges the gap

Fred Kabagambe Kaliisa, Permanent Secretary in Uganda’s Ministry of Energy. See page 28.

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

S01 ORA 4 2012 Start_Layout 1 18/07/2012 14:14 Page 2

S01 ORA 4 2012 Start_Layout 1 18/07/2012 14:14 Page 3

■ Geology - p31 ■ Gas - p34 ■ Exploration - p38 ■ Technology - p48


Volume 7 Issue Four 2012


Covering Oil, Gas and Hydrocarbon Processing

Preparing today for a better tomorrow Operational performance and predictive risk systems


Europe m15, Kenya Ksh300, Nigeria N400, South Africa R20, UK £10, USA $16,50

HR’s deepening offshore challenge

Equatorial Guinea - a global oil & gas force Egypt still pulling in investment

Industry news and executives’ calendar


D. R. Congo undoubted potential but challenging Securing effective piping connections in Africa’s operations


Power generation today: rent or buy?

HR’s deepening offshore challenge


Offshore access bridges the gap

Local content legislation is boosting employment prospects wherever it applies, but the industry is finding it hard to keep up with developments in subsea technology.

Talking trade in a connected continent

Fred Kabagambe Kaliisa, Permanent Secretary in Uganda’s Ministry of Energy. See page 28.


REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

Local content legislation is boosting employment prospects wherever it applies, but workers from every subsea discipline are needed.

Africa is becoming more networked than ever before.

Preparing today for a better tomorrow


A region of promise and pitfalls


Editor’s note

Country Focus Equatorial Guinea


A global oil & gas force to be reckoned with.



Egypt continues to pull in investment from foreign energy firms despite the backdrop of a nation in transition.

D. R. Congo


The country has undoubted potential but efforts to make headway in the interior have yet to yield results.

Geology Developments


A roundup of recent geological activity from around the region.

Gas Developments


East Africa is emerging as a potential competitior for Australia’s LNG exports.echnical Focus

E&P Developments

INVESTMENT IN EXPLORATION of oil and gas is booming in Africa, driven primarily by high demand from the Western world, coupled with a significant and developing need from emerging economies. The continent is well placed to supply this demand. Nigeria, still Africa’s leading oil producer, has finally signed contracts allocating supply of its oil in the coming year in a string of deals worth around US$60bn. NNPC has awarded 50 companies 1.59mn barrels a day of oil for the period from August 2011 to July 2013 On the other side of the continent, Kenya has leased out all its existing oil blocks to exploration companies and is also drilling East Africa’s first oil. However, massive offshore gas discoveries in East Africa are catapulting the region into a major player in the global energy arena, bringing billions in investment that could transform entire economies. Multinationals have struck gas -- well upon well upon well, and planned investments worth tens of billions exceed the gross domestic products of some host countries, which range from regional power Kenya to impoverished Mozambique. East Africa's coastal region, stretching out to Seychelles holds 441.1 trillion cubic feet of natural gas, according to the US Geological Survey. That's about 50 per cent more than in Saudi Arabia.


Kenya leases all exploration blocks and also its deepwater debut heralds east Africa’s first oil.


Downstream Developments


A round-up of recent downstream news from around the region.

Technology Securing effective piping connections in Africa’s operations


A look at recent developments in pipeline connections and an alternative to welding that is growing in popularity.

Power generation today


Rent or buy? - that is the question

Offshore access bridges the gap


There’s a smarter way to work using marine access.

Tanzania Electric Supply Co signed a large contract with international genset hirers Aggreko last year.

Managing Editor: Zsa Tebbit - Editorial and Design team: Bob Adams, Lizzie Carroll, David Clancy, Andrew Croft, Immanuel Devadoss, Ranganath GS, Prashanth AP, Louise Quick, Genaro Santos, Nicky Valsamakis, Julian Walker and Ben Watts Publisher: Nick Fordham

Advertising Sales Director: Pallavi Pandey

Magazine Sales Manager: Serenella Ferraro Tel:+44 2078347676, E-mail: Country China India Nigeria Russia South Africa Qatar UAE USA

Representative Wang Ying Tanmay Mishra Bola Olowo Sergei Salov Annabel Marx Saida Hamad Camilla Capece Michael Tomashefsky

Telephone (86)10 8472 1899 (91) 80 65684483 (234) 8034349299 (7495) 540 7564 (27) 218519017 (974) 55745780 (971) 4 448 9260 (1) 203 226 2882

Fax (86) 10 8472 1900 (91) 80 40600791 (7495) 540 7565 (27) 46 624 5931 (971) 4 448 9261 (1) 203 226 7447



Covering Oil, Gas and Hydrocarbon Processing

Head Office: Alain Charles Publishing Ltd University House, 11-13 Lower Grosvenor Place London SW1W 0EX, UK Telephone: +44 (0) 20 7834 7676 Fax: +44 (0) 20 7973 0076

Middle East Regional Office: Alain Charles Middle East FZ-LLC Office 215, Loft No 2A, PO Box 502207 Dubai Media City, UAE Telephone: +971 4 4489260 Fax: +971 4 4489261

Production: Donatella Moranelli, Nasima Osman, Nick Salt, Jeremy Walters and Sophia White E-mail: Subscriptions: E-mail: Chairman: Derek Fordham Printed by: Stephens & George Print Group ISSN: 0-9552126-1-8 © Oil Review Africa

Serving the world of business

Oil Review Africa Issue Four 2012 3

Industry News & Events

S01 ORA 4 2012 Start_Layout 1 18/07/2012 16:15 Page 4

Executives Calendar 2012 SEPTEMBER 10-11 24-26 25-27

9th MENA-Med Libya Summit 6th NGO Oil & Gas Summit


East Africa Oil & Gas Gas to Liquids Gastech 2012 Mauritanides 2012 Ignite! Energy Recruitment Show Upstream & Downstream Oil and Gas Expo 2012 Oil and Gas Recruitment TOG Expo 2012 DRC Oil & Gas Forum Artificial Lift Conference and Exhibition Practical Nigerian Content 18th African Oil Week Oil & Gas Recruitment


Logistics West Africa ADIPEC 2012 Power-Gen Africa 2012 West African Clean Energy & Environment Exhibition & Conference WACEE '12 Nigeria Oil & Gas Exploration OPITO’s Third Global Conference to Focus on Managing the Safety Chain MPC 2012 Sudan Oil, Gas and Energy Exhibition World LNG Summit Oil & Gas Recruitment Summit



OCTOBER 1-3 4-5 8-11 8-11 9-10 10-12 12-14 16-18 17-18 22 - 25 23-25 29-2 Nov 30-2 Dec

NOVEMBER 5-7 5-8 6-8 6-8 11-15 20 20-22 21-23 27-30 30-2 December

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

East Africa Oil & Gas Summit THE HON KIRAITU Murungi, EGH MP Minister of Energy for Kenya, is co-hosting the East Africa Oil and Gas Summit in partnership with Global Event Partners (K) Ltd and an industry-led steering committee of government and industry experts. The Minister said, ‘’These are extremely exciting times for the oil and gas sector throughout East Africa, both in terms of realisation of recent discoveries and also the huge potential that the region has to offer. The EAOG Conference will bring together all the leading players involved throughout the region, representing governments and the private sector.’’ The two-day strategic conference taking place in Nairobi this November will provide a platform for leading East African decision makers to engage with international and local investors to examine the investment opportunities available throughout the region. The Chairman of Global Event Partners (K), Dr Mukhisa Kituyi confirmed, ‘’We are honoured to have been engaged by the Ministry of Energy to organise this high level investment summit for the Oil & Gas industry in East Africa. The Minister is securing the presence of the key Ministers in the region from Mozambique, Tanzania, Uganda and South Sudan so all the major players will be represented this November.’’ The summit will unite regional and international investors and industry experts to share their knowledge and explore the current challenges and opportunities in the region. ‘’The East Africa Oil and Gas Summit comes at a perfect time when the world’s eyes are turning towards our region,’’ said the Minister, Hon. Kiraitu Murungi. The conference programme day one will feature regional sessions covering issues for the whole East Africa region whilst day two will provide focussed sessions on Kenya, Mozambique and Tanzania. Sessions led by government and industry experts will examine the challenges and opportunities in East Africa from a government and private company perspective.

4 Oil Review Africa Issue Four 2012

Growing MENA-MED O&G market attracts investors WITH HUGE GAS finds in the Mediterranean, new gas-LNG ventures afoot, accelerating acreage leasing and major capital investment projects across the region, the Middle East and North African oil and gas market remains one of the biggest and most dynamic energy markets in the world. Therefore, the regional exploration, oil & gas-LNG and energy game is attracting a growing number of companies and investors who find new business opportunities. The 9th MidEast-North Africa Mediterranean Upstream (MENA-MED) 2012 Conference in Geneva will focus on the exploration and development ventures of national oil companies, governments and companies in this vast and complex region. The annual conference is recognised as a business-led, deal-driven and high-level event, and it also contains the 46th PetroAfricanus-PetroArabian Dinner, for networking and relationship building inside the oil & gas game. New opportunities have attracted greater commitments from supermajors, a growing suite of independents, including local oil firms, and increased positioning by national oil companies from around the world. During the intensive and high-level two-day programme, keynote speakers from major companies from all over the world report on key themes like state O&G policies, discoveries and development, regulation and interventions in the oil/energy market, strategies of O&G/LNG-energy investors, private upstream projects and joint-venture interests, corporate assets/portfolio and strategies, as well as bid rounds, licensing, new ventures, business development, OPEC strategies and reserves, plus critical market issues impacting the Middle East-North Africa-Mediterranean zones.

S01 ORA 4 2012 Start_Layout 1 18/07/2012 14:14 Page 5

Cabinet approves Nigeria oil bill

IN A BID to double production by 2020, Angola is planning to launch a bidding round for onshore oil exploration rights next year. According to the Financial Times, Angola will offer exploration rights in the onshore part of the Kwanza Basin, which it is hoped carries large volumes of high-quality light oil. "I would not advance figures but the only thing I would say is that it's very, very lucrative, more than we expected," senior minister, Manuel Vicente, was quoted by the newspaper as saying. He went on to say that Angola aims to boost output to 3.5mn bpd from 1.8mn bpd by 2020. The bidding plan follows the signing of exploration deals between Angola's state oil firm Sonangol and oil majors, including Total, BP and Cobalt, in December last year. Results from tests by Cobalt at a deep sea oil well in the Kwanza Basin exceeded the company’s expectations and predictions have been made that the reserve potential at the Cameia well could exceed two billion barrels.

NIGERIA’S CABINET HAS approved a final draft of an oil law, years in the making, that will be sent to President Goodluck Jonathan before going to parliament shortly, the oil minister has said. The Petroleum Industry Bill's passage is needed to unblock billions of dollars of stalled investment into exploration and production, but it has been stuck for about five years as ministers and parliamentarians disagreed on details. Industry participants say the PIB is needed to halt a decline in crude production in Nigeria. The bill includes plans to partly privatise and list the state oil company, tax oil company profits at 20 per cent for deep offshore and 50 per cent for shallow or onshore, and give the oil minister supervisory powers over all oil institutions. "The new PIB is going to make the oil industry more competitive and accountable. It proposes revolutionary changes in the industry," Diezani Alison-Madueke said. Industry experts have said that the tax terms in the latest bill are more favourable to foreign oil companies like Shell, ExxonMobil, Chevron and Total than previous drafts. There is no guarantee that lawmakers will push through the bill. Powerful interests could block or delay it, as has happened in the past, although Jonathan being explicitly behind it gives this version of the bill a better chance than previous ones. The PIB would also lead to an overhaul of the Nigerian National Petroleum Corporation (NNPC). The oil minister said that NNPC would be unbundled and an independent National Oil Company would be created, which would be listed and take over current infrastructure owned by Nigeria's government.

Oil Review Africa Issue Four 2012 5

Industry News & Events

Angola ‘to launch bidding round’ next year

Indusry News & Events

S01 ORA 4 2012 Start_Layout 1 18/07/2012 14:14 Page 6

‘Leaner and meaner’ technology vital to subsea industry’s future LEANER, MEANER TECHNOLOGY and common global practices are crucial catalysts to ensuring the subsea industry’s future sustainability. This was the message from Proserv’s chief executive officer (CEO) who urged industry leaders to work together. David Lamont, CEO of global-leading energy production technology services company Proserv, was speaking at the annual congress of the Oil Council in London. He said: “Technical advances in subsea technology have typically been not only more complex and heavier but expensive and less reliable too. It is vital that we shift our focus to ensure a crucial upside to the industry because there is significant demand for fit-for-purpose systems and solutions that are reliable, efficient and delivered in an ingeniously simple way. “The development of leaner and meaner technology, which incorporates off-the-shelf components and lighter, simplified designs, is essential for faster and more cost-effective delivery and, crucially, to improve production, reservoir management and ultimate recovery particularly given that the number of subsea start-ups are set to rise considerably from around 300 to more than 800 over the next five years.

“There has been an increase in the number of niche companies developing new technologies but there is no common set of industry standards and practices. It is therefore fundamental that we start working together to establish a more consistent approach for much easier integration and industry standard interfaces. “These are vital catalysts to catapulting the subsea sector into a powerful position and opening us up to significant opportunities in what has become an extremely competitive global market. Ultimately, it will help ensure our future prosperity.” Mr Lamont was one of the speakers and discussion panel members at the Oil Council’s Oilfield Services and Engineering Assembly which is Europe's largest, annual corporate development and thought leadership forum. The two-day assembly unites senior executives from across the oil and gas, oilfield services, engineering, finance and investment communities. Held this week, 300 leaders met to showcase project and engineering excellence, hear the latest in capital raising strategies and investment trends, and chart the evolution in the relationship between oil and gas companies and contractors.

Proserv is a rapidly-evolving, market-leading company which specialises in drilling & production, subsea technology, equipment & support services, and infrastructure services, and operates worldwide in more than seven regions and 30 sites. Since the acquisition of Weatherford’s subsea control’s subsidiaries, Proserv has further strengthened its rapidly-expanding range of subsea capabilities and specialist integrated services. In addition to the company’s pioneering subsea production tree, which is specifically designed for early production, conventional fields and extended well testing, Proserv can now offer clients subsea and topside communication and control systems, subsea intervention services and subsea termination equipment for offshore production optimisation, control and monitoring. Mr Lamont said: “Proserv has experienced exceptional growth over the past 12 months particularly in the subsea services sector. We remain committed to investing in market-leading technologies and the development of ingeniously simple solutions that complement our existing portfolio of value-added products and services, and deliver every time.”

Addax chips in for $500mn Saipem deals ADDAX PETROLEUM HAS extended the charter of a Saipem semisubmersible drilling rig as the latter unveiled a plethora of contracts worth around US$500mn. The Eni-connected services player has also landed more work from its parent as well as Abu Dhabi’s National Drilling Company (NDC). Addax is keeping the semisub Scarabeo 3 for a further period until February 2014 for operations off Nigeria, Saipem has revealed.

The semi-submersible rig Scarabeo 3 .

Eni has inked a two-year extension for the jack-up Perro Negro 8 for work in the Adriatic Sea, with the extension period beginning in November. NDC has extended its charter of the Perro Negro 2 off Abu Dhabi by 18 months, starting this month. Saipem’s Perro Negro 6 and the Saipem 10000 have each scooped rate increases for current contracts offshore Angola and Mozambique, respectively.

Tullow expecting record revenues UK INDEPENDENT TULLOW Oil is expecting revenues for the first half of the year to hit a record high of US$1.15bn on the back of increased production. Production for the first half of the year averaged 77,400 boepd, up from an average of 75,350 boepd during the first half of 2011. Tullow said realised commodity prices during the first half of 2012 were on par with the previous year, with the realised oil price averaging about $114.20 per barrel pre hedge, or $110.6bn post hedge, while the realised UK gas price was about 58.4 pence per therm. The company expects total exploration write-offs and asset value reductions for the first half of the year to total about $440mn. That figure includes about $80mn related to write-offs associated with unsuccessful exploration activities in Sierra Leone, the Côte d’Ivoire and Tanzania, as well as new ventures activity and licence relinquishments. A review of Tullow’s exploration asset values also resulted in an additional write-down of about $360mn. Tullow also said it expected the $2.9bn farm-down of its acreage in

6 Oil Review Africa Issue Four 2012

Uganda to Total and China National Offshore Oil Corporation earlier this year to generate a post-tax profit of $558mn in relation to the deal. Capital expenditure for the year up to 30 June amounted to about $900 mn and the company forecasts full year capital expenditure to total $2 bn, based on current estimates and work programmes, with 60 per cent of the investment to be allocated to exploration and appraisal activities. Tullow has continued to address the decline in productivity of some of the wells at its Jubilee field, off Ghana, during the first half of the year. Gross output at the field averaged 63,100 bopd during the first six months of the year, but Tullow added output had reduced to about 63,000 bpd currently with a number of wells temporarily offline for ongoing acid stimulation activity. However, it expects output to ramp up in the second half of the year as a result of its acidisation programme and as new Phase 1A wells are brought onstream during the fourth quarter. As a result it has forecast full year production to average between 70,000 and 80,000 bpd as output is expected to ramp up to an average of 90,000 bpd by the end of the year as it looks to hit plateau production of 120,000 bpd in 2013.

S02 ORA 4 2012 News_Layout 1 18/07/2012 14:21 Page 7

Petrofac awarded project offshore C. d’Ivoire

UK INDEPENDENT HERITAGE Oil has confirmed that Shoreline Natural Resources has reached an agreement to acquire a 45 per cent participating interest in development Block OML-30 in Nigeria. Shoreline will buy the stake from Shell, Total and Eni, along with a 45 per cent interest in other related assets including a segment of the Trans Forcados pipeline, for a total cash consideration of US$850mn. The remaining 55 per cent interest will be held by state-run NNPC. The block is believed to hold 707mn barrels in reserves, putting it in the same league as lesser regional producers Ghana or Equatorial Guinea. Heritage said output from OML-30 was currently averaging about 35,000 bpd of oil and the deal was expected to boost its own net production from 605 bpd currently to about 11,350 bpd and increase its net proved and probable reserves from 61mn barrels to an estimated 278mn barrels. It added it believed it was possible to increase and stabilise output from existing fields on OML-30 in the short term by refurbishing the gas lift system in producing wells and restarting existing non-producing wells.

PETROFAC HAS BEEN awarded a fast track front end engineering design (FEED) project offshore the Côte d’Ivoire. Petrofac’s Engineering & Consulting Services (ECS) team based in the UK will undertake the work on the Gazelle field in Block C1-202 on behalf of Rialto Energy (Rialto) and Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire (PETROCI). The contract is expected to be completed in October and at its peak will involve a team of 75 personnel. The FEED will support the award of the early engineering, procurement, installation and commissioning contracts for both the offshore platform and offshore and onshore pipelines, which are expected to be awarded by the end of the year. Martin Barnes, General Manager for ECS Woking commented: “This is an extremely intense FEED schedule and I look forward to the team delivering a high quality product for Rialto and PETROCI. In carrying out this work we are also able to draw on the extensive capability of our subsea pipeline consulting and engineering services business, KW Ltd, which differentiates and adds significant value to our offer. Strategically, the project also represents an important offshore reference for us in the West African market.”

Erratum WE WISH TO point out that in Issue 3, on page 52, in the article “Improving online pipeword repair with compliant composite technologies”, the sentence: Another Belzona SuperWrap application took place on corroded pipework from offshore platforms located in the coast of Macaé (Brazil), that was operating at temperature levels up to 800°C should have read 80°C, not 800°C.

Oil Review Africa Issue Four 2012 7


Shoreline confirms Nigerian block buy

Industry News & Events

S02 ORA 4 2012 News_Layout 1 18/07/2012 14:21 Page 8

Rialto awards FEED contract to Petrofac AUSTRALIA’S RIALTO ENERGY has awarded a Block CI-202 Front End Engineering Design (FEED) contract to UK-based Petrofrac, with work scheduled for completion in October. Rialto is working to fast track first hydrocarbons. It expects to award further contracts before the end of this year. Block CI-202, which lies on the Gazelle field offshore Côte d’Ivoire, is being developed by Rialto and Petroci. Rialto is the operator of the block. The field development plan and gas agreement has been approved by the Côte d’Ivoire authorities and the production facilities will consist of a fixed production platform at the Gazelle field with separate oil and gas pipelines from the platform to shore. The pipelines will be designed with spare capacity for future production of up to 40,000 bopd and 230 mmcfd of gas. Initial production from the platform is expected to be around 8,000 bopd and 100 mmcfd ramping up in a phased approach to include other existing discoveries in the Block. Rialto has also secured a drilling rig agreement with US-based Vantage Drilling Company. The Sapphire Driller (375' ILC) jackup drilling rig will be deployed to drill three wells on the CI-202 Block. The rig may be utilised to drill two additional wells. Water depths across Block CI-202 are between 10 to 1,000mn, Rialto said. The current oil and gas discoveries lie in water depths of less than 100 m. Block CI-202 could contain 50mn barrels of oil and 396 bcf of gas, Rialto said.

Oil market “better supplied” THE WORLD OIL market is currently better supplied after an easing of the fundamental supply/demand balance in recent months, but it is not over-supplied, the International Energy Agency has said. In its latest monthly oil market report, the IEA said the market could clearly be characterised as "better supplied, but 'oversupplied' looks something of a stretch, given the myriad uncertainties that lie ahead for the summer." It added: "There have been calls by a number of producers for 'over-production' to be reined in. Memories are indeed short: crude prices remain very high in historical terms, and are acting as a drag on household and government budgets in OECD and emerging markets alike." The IEA report came a day before OPEC met in Vienna to review output policy. With the group currently producing more oil than its agreed production ceiling and prices having fallen notably in recent weeks, a number of OPEC ministers have called for output to be brought back to agreed levels. The IEA said it did not expect the OPEC meeting to result in any change to the formal production ceiling of 30mn bpd, but that actual OPEC production may "trend slightly lower in the third and fourth quarters if the EU embargo and US sanctions crimp Iranian oil sales further." "However, with prices for benchmark Brent still near US$100/barrel, the producer group is expected to maintain the status quo," it said. "Looking ahead, if the eurozone or Chinese economy slows more quickly than envisaged here, weaker customer demand would naturally see producers scale back output," it added. If OPEC output remained unchanged for the rest of this year, then this could result in an overhang of oil stocks in OECD countries. "Higher OPEC production sits against a backdrop of tight end-2011 inventories, stubbornly high prices and persistent uncertainty over non-OPEC and Iranian supply for this summer," it said.

8 Oil Review Africa Issue Four 2012

Jonathan makes changes at NNPC PRESIDENT GOODLUCK JONATHAN is replacing the managing director of state oil company Nigerian National Petroleum Corp (NNPC) and three other senior directors according to a presidency statement. "To further strengthen the ongoing reforms ... and in furtherance of efforts to achieve greater transparency and accountability ... President Jonathan has approved the re-composition of the executive management team of the NNPC," the statement said. Jonathan has come under intense pressure to clean up Africa's biggest energy sector after public anger over corruption and waste of the country's oil wealth surfaced during January protests over fuel prices. The incumbent managing director Austen Oniwon, the finance and accounts director Michael Arokodare, refining director Philip Chukwu and engineering director Billy Agha have all been retired, the presidency statement said. Oil minister Diezani Alison-Madueke has overall control over Nigeria's energy industry and the NNPC. Oniwon will be replaced by Andrew Yakubu, a chemical engineer who has held several positions at NNPC, including executive director of exploration and production, the statement said. Numerous reports and audits have said that corruption is rife within NNPC. Last year, Transparency International and Revenue Watch ranked NNPC as the least transparent oil company in the world. Oniwon told Reuters in February that corruption in NNPC was "in the imagination of some people". A parliamentary report in May uncovered a US$6.8bn fraud within the fuel subsidy, which is partly run by NNPC. It said NNPC was accountable to no one. It said the company owed the government 704bn naira ($4.33bn) for subsidy violations and that it owed oil traders, including Trafigura, $3.5bn in unpaid bills.

Book review: Discover how to optimise process plant equipment FROM ENERGY TO pharmaceuticals to food, the world depends on processing plants to manufacture the products that enable people to survive and flourish. With this book as their guide, readers have the information and practical guidelines needed to select, operate, maintain, control, and troubleshoot process plant equipment so that it is efficient, cost-effective, and reliable throughout its lifetime. Following the authors' careful explanations and instructions, readers will find that they are better able to reduce downtime and unscheduled shutdowns, streamline operations, and maximise the service life of processing equipment. Process Plant Equipment: Operation, Reliability, and Control is divided into three sections: Section One: Process Plant Equipment Operations covers such key equipment as valves, pumps, cooling towers, conveyors, and storage tanks Section Two: Process Plant Reliability sets forth a variety of tested and proven tools and methods to assess and ensure the reliability and mechanical integrity of process equipment, including failure analysis, Fitnessfor-Service assessment, engineering economics for chemical processes, and process component function and performance criteria Section Three: Process Measurement and Control examines flow meters, process control, and process modeling and simulation Throughout the book, numerous photos and diagrams illustrate the operation and control of key process equipment. There are also case studies demonstrating how actual process plants have implemented the tools and techniques discussed in the book. At the end of each chapter, an extensive list of references enables readers to explore each individual topic in greater depth. In summary, this text offers students, process engineers, and plant managers the expertise and technical support needed to streamline and optimise the operation of process plant equipment, from its initial selection to operations to troubleshooting. Process Plant Equipment: Operation, Control, and Reliability Michael Holloway (Editor), Chikezie Nwaoha (Editor), Oliver A. Onyewuenyi (Editor) will be available August 2012

S02 ORA 4 2012 News_Layout 1 18/07/2012 14:21 Page 9

PEM Offshore Delivering Great Services

• • • • • •



Marine and Offshore Consultants Marine Warranty Surveys, Pre-purchase, On/Off - Hire Inspections, Riggings/Loose Lifting Equipment Inspection, NDT Services Vessel Managers and Marine Technical Advisers Rope Access Inspection / Risk Based Inspections Underwater Engineering, Subsea Inspections and Support

• • • • • •

Sewage/Waste Water Treatment Reverse Osmosis Desalination water making Offshore Equipment supply Gas Detection devices/Monitors Lifesaving Appliances/Marine safety appliances Offshore Containers & Baskets


PEM Offshore Limited Plot 231, Trans-Amadi Industrial Layout, Port-Harcourt, Nigeria Phone: +234.(0)84.361.390 Mobile: +234.803.403.6935

PEM Offshore Inc. 2425 West Loop South, Suite 200 Houston, 77027 Texas, USA Phone: +1.713.297.8868 Fax: + Mobile: +1.832.339.6843 UAE Mobile: +971.555.122.725


Industry News & Events

S02 ORA 4 2012 News_Layout 1 18/07/2012 14:21 Page 10

Subsea specialists in demand in Africa STRONG DEMAND FOR subsea specialist workers in Africa is expected to continue as oil and gas companies pursue offshore exploration and production in increasingly deeper waters, according to an executive with NES Global Talent. In African countries such as Nigeria and Angola, expatriate workers are slowly being phased out of senior roles to allow local workers, after a period of training, to take these positions. This shift is taking place as the oil and gas industry seeks to meet local content requirements of African countries that local workers be trained, said Ford Garrard, associate director of NES' Africa division. However, these countries don't have the workers with the experience in subsea development, meaning that expatriates will continue to fill these roles in the short term. Subsea activity has been growing in the region, with a number of floating production, storage and offloading vessel projects being planned offshore.

In May, International Maritime Associates reported that the number of production floater projects planned and under study worldwide was growing, with West Africa, Brazil and southeast Asia accounting for 62 per cent of these planned projects. Workers from every subsea discipline are needed, from equipment manufacturing to design to installation, said Garrard. Some companies operating in Nigeria are training local Nigerians on the hardware side to become experts, but training these workers will take time, Garrard noted. The African market also is competing with the Brazilian and Australian markets for subsea workers, said Garrard. To compete with this demand, oil and gas companies are having to offer higher salaries and increased benefits such as completion and loyalty bonuses to compete with the growing demand for subsea workers from better locations. "In an effort to hang onto subsea specialists,

Hass Petroleum to become regional giant THE MANAGING DIRECTOR of Hass Petroleum, Mr. Omar Hassan Mohamed, speaking to the media said he believed that his company was in a strong position to fill the void left by Total. The Hass Petroleum Group is a regional oil Mr Omar Hassan Mohamed. marketing company, incorporated in 1997, with a significant presence in East Africa and the Great Lakes region. From its humble beginnings as a fuel reseller, Hass Petroleum is now a renowned oil marketer with fully fledged operations in Kenya, Tanzania, Uganda, Southern Sudan, Rwanda, Burundi, and the Democratic Republic of Congo. Its headquarters are in Nairobi. The company’s vision is to be an efficient, credible and profitable oil marketing company in the region that seeks to add value to all its stakeholders, with a focus on serving customers to the highest standards Hass Petroleum’s core business is importation, distribution, and marketing of petroleum products. Hass invests primarily in petroleum imports and exports, bulk trading, petroleum depots, distribution networks, and service stations. With the aid of cutting-edge technologies and modern infrastructure, the firm is consolidating its position as the market leader in the regional oil industry. Mr. Omar said that last year his company placed its tender bid with the national tender board in an effort to secure the rights to run the Berbera storage facility after fulfilling the guidelines and recommendation set by the governments and he hoped his company was in a strong position for securing the rights. To date only three local companies have placed the bids with the national tender board.

10 Oil Review Africa Issue Four 2012

companies are promising candidates future work beyond projects in Africa, making an effort to keep workers on the books for projects in Asia and Singapore in case they are needed," said Garrard. "Even if they don't think they'll need them, they want to hang on to their expertise." Demand for expatriate workers is also expected to continue for onshore exploration, with operators pursuing unconventional plays that make drilling more complex, said Garrard. Obtaining work permits for foreign workers in countries such as Angola has become more difficult, with companies needing to prove they have tried to identify Angolan nationals who can fill these roles. In an effort to 'think outside the box' in terms of managing content requirements, NES has reached out to the Nigerian American Multicultural Society in Houston in an effort to recruit first, second and third generation American Nigerians to fill senior level positions in Nigeria.

London to play host to East Africa’s O&G decision makers ALREADY CALLED EASTERN El Dorado, East Africa is beginning to realise its energy potential and fast becoming a major energy hub with significant discoveries of gas and oil in Mozambique, Tanzania, South Sudan, Uganda and most recently Kenya. CWC Group's East Africa Oil & Gas Conference in London, 1-3 October 2012 will host oil and gas decision makers from across the region to discuss East Africa’s growing hydrocarbon sector, investment opportunities and upcoming projects. It is set to become the leading event for East African governments, national and international oil companies to announce their future plans, launch new projects and cement regional and international collaborations. Exclusive declarations will be made by Ministers and senior representatives from across the region. Tanzania’s Minister for Energy & Minerals, Hon Sospeter Muhongo, will deliver an update on Tanzanian gas opportunities in the rift basins of Lake Eyasi, Lake Manyara, Lake Natron, Selous, Kisangire, Mandawa as well as other deepwater opportunities. H E Sinknesh Ejigu, Ethiopia’s Minister of Mines, will address the growing potential of the East African region and the vast opportunities for regional and international investors. Sumayya Athmani, Managing Director of National Oil Corporation, Kenya, is to analyse the potential for onshore and deepwater opportunities, especially Block 14T, as well as discuss the role of the Kenyan NOC in petroleum exploration and the new legislative outlook. Ministers together with senior representatives from national oil companies and major industry players will discuss the role of East African countries as a future global energy player and the fact the region could become Australia’s greatest LNG competitor. The event is supported by Ethiopia’s Ministry of Mines, Ministry for Energy & Minerals, Tanzania, National Oil Corporation, Kenya, Mozambique’s Petromoc and is expected to bring together more than 300 top executives, decision-makers and leaders in the field from countries around the region and internationally. It will provide a great opportunity to network and participate in a variety of meetings and discussions regarding the region’s energy future and the continued development of hydrocarbons in the area.

S02 ORA 4 2012 News_Layout 1 18/07/2012 14:21 Page 11

Placing our behind your


S03 ORA 4 2012 Analysis 1_Layout 1 18/07/2012 14:22 Page 12


Local content legislation is boosting employment prospects wherever it applies, but the industry is finding it hard to keep up with developments in subsea technology.

HR’s deepening

offshore challenge “T

HE DAYS OF easy oil are over,” said a representative of the Deepwater Recruitment agency recently. “Finding oil in shallow waters is becoming a thing of the past. We are moving into deeper waters in search of the elusive hydrocarbons, and this means new techniques, technologies and people who understand them. “Deepwater E&P involves huge investments which will not yield returns if you do not find the right people to execute the multi-billion dollar projects at the right time.” Other specialised skills suppliers like NES Global Talent agree. NES confirmed recently to Rigzone that the necessary phasing out of expatriates is indeed causing a manpower shortage in countries such as Angola and Nigeria. And that implementation of local content (LC) policies is failing to plug the gap. Development of ever more complex subsea activities, especially in deepwater (more than 200m) conditions, and the use of FPLSO vessels, is making the problem worse. So is the growth of competition from faraway offshore provinces such as Brazil and Australia.

Workers needed from all subsea disciplines “Workers from every subsea discipline are needed, from equipment manufacturing to design to installation,” said Ford Garrard of NES’s Africa division. “Training these workers will take time.” One solution he mentioned is the successful search for highly qualified recruits amongst specifically sub-Saharan expatriates in the USA’s energy capital, Houston, notably the Angolan and Nigerian community societies there. Obtaining work permits for such personnel in West Africa is much easier than for others, he said. As well as searching out local talent for senior design and planning roles Mr Garrard pointed to the increase in physical fabrication activities in local yards such as Nigerdock’s at the Snake Island Free Zone. The intention is for Nigerdock’s facility at the Snake Island Free Zone.

this facility to become a service centre for the industry all the way down to SA. In March, Nigeria’s President inaugurated the Abang and Itut NNPC/MPN Satellite-Field Development-Project Platforms, the first to be 100 per cent locally built by Nigerdock in association with the Jagal Group for ExxonMobil. This was a highly visible fruit of the 2010 Local Content Bill, now being implemented by a specialised division within the NOC. And to complicate the problem further, the meaning of the word ‘subsea’ is growing all the time. No longer does it signify mere physical tasks on the seabed as it did in the days when jack-up rigs predominated. Now it relates to the entire spectrum of exploration, drilling and development work in locations where extreme water depths mean floating vessels and robotic equipment have to be used as the basis for all activity; manned diving at these depths is of course completely out of the question. This has required the development of a huge range of specialised new equipment and services which require a new generation of high-level skills, many of them software based.

The necessary phasing out of expatriates is indeed causing a manpower shortage in countries such as Angola and Nigeria. Many promising new fields in deepwater An increasing number of sub-Saharan Africa’s most promising new fields are located in deepwater areas, where development requires use of complex deepwater production systems. Full-scale ‘system integration’ testing fails to provide satisfactory verification because the eventual operating conditions cannot be replicated precisely, so ultra-modern data-handling technologies have had to be developed as tools for virtual testing before any hardware is actually installed, using simulation tools and appropriate system modelling. Virtual testing in real time; planning of the actual drilling programme; design of above-surface infrastructure; installation of subsea process measure and control equipment – all these and more make huge demands on the operating companies’ HR resources. In short, a lot of running has to be done to keep abreast of the demand for new skills, and adherence to increasingly strict LC legislation just makes the task more complex.

Headway being made in Nigeria The good news is that real headway is being made in cracking this acute universal problem by specialist local organisations like Fairshores Ltd (active in Lagos and Port Harcourt) and the Oil & Gas Trainers Association of Nigeria (both locations as well as Kaduna in the north). Building of institutions such as these is recognised as the key take-off step needed by development agencies globally. Already tackled by Ghana’s Petroleum Regulatory Authority, this stage is now being taken on board in both Angola and Uganda; even Kenya’s nascent oil developers are already at work on the matter. Unfortunately Tanzania’s Petroleum Act pre-dated the trend by three decades-plus, but the issue is now being actively addressed there as well. The problem is the sheer speed of development of demand for the necessary subsea skills, many of them new to the training organisations themselves. ■

12 Oil Review Africa Issue Four 2012

S03 ORA 4 2012 Analysis 1_Layout 1 18/07/2012 14:22 Page 13


S03 ORA 4 2012 Analysis 1_Layout 1 18/07/2012 14:22 Page 14

Africa is becoming more networked than ever before, offering an opportunity for services that had once been unfeasible or unaffordable to find their way onto mobile devices. Among these are online data and trading services for the oil and gas industry, as Phil Desmond finds out.

Talking trade in a

connected continent A

FRICA IS NOT just an established — and expanding — market for the exploration and production of oil and gas, but also for oil and gas data and trading. As communications infrastructure improves and numerous intelligent devices become affordable and widely available to both fixed and mobile device users in the oil industry, access to information and trading tools will become easier to provide. Which is, of course, an opportunity for companies that can deliver both. That, at least, seems to have been the driver for the entry into the African market of Aspect Enterprise Solutions. Founded in 1999 as OILspace, the company changed its name to reflect an expansion into broader commodities markets beyond the energy sector in which it originally made its mark. However, it still has a strong oil and gas presence and one that it serves with a range of web-based commodity trading, risk management and data management applications. Here we will be looking at two in particular: AspectDSC (decision support centre) and AspectCTRM (commodity trade risk management). What do they offer the oil and gas business in Africa — and how? AspectDSC, or in this case AspectDSC Oil, is an online customisable portal that allows users to track real-time and historical futures and spot prices, along with market news. ApectCTRM, by contrast, is described as ‘the only web-based trade, risk and operations management solution’. Among the many facets to this offering are tools that expose critical market intelligence and provide scenario analysis and forecasting. However, perhaps what matters most to the African market is that it provides access from anywhere in the world.

Integrated solution As Brigette Gebhard, the company’s VP marketing, points out, size and simplicity are the key: AspectDSC and AspectCTRM are accessible from the same password. “It’s an integrated solution on one platform,” she says. “It offers smaller companies and start-up companies an opportunity to get into the trading business with little investment — and no capital investment in trade and risk software. Our solutions are managed and hosted by our IT team, so trading businesses don’t require IT teams to build or manage a system.” This means that smaller African trading houses — even those with a staff

14 Oil Review Africa Issue Four 2012

Africa is a dynamic, emerging, and active market...view of a Total Nigeria offshore oil and gas production platform.

of only two to five traders — can start inputting their trades and managing trading and risk activities within days of signing up for a subscription. Until recently, Gebhard claims, “Trade and risk applications have never been affordable to small and mid-size companies”.

A cloud service Naturally, today’s popular technology terms also play a part in this offering. As Gebhard says: “We are a cloud service. In fact, Aspect was built as an entirely web-based system from day one, 12 years ago.” She agrees that at that time, the concept was a new one and not one that companies were necessarily familiar with. However, it looks like they have adapted comfortably enough over the years, even as the buzzwords have changed. “We started off as web-based, then on-demand, then software-as-a-solution (SaaS) — and now cloud is the popular phrase,” says Gebhard. “But it’s always been the same: online access for trade, risk, financial and physical operations tools used by commodities professionals.” AspectDSC uses a number of content sources, such as the BBC and Platts. As for how it chooses and integrates that content, the company has an internal product management process that gathers customer and prospect feedback indicating what content and functionality they

As communications infrastructure improves, access to information and trading tools will become easier to provide. would like to see in the system. It prioritises that information in terms of value to its customer base — and in terms of adding new business. That’s why agriculture and metals content were added in response to interest from customers and the industry and why, responding to technological trends, the company developed a mobile version for iPad. “Our customers drive the process, and our product management and development teams prioritise and build it,” Gebhard explains. That is why, as she puts it, “We will never be the solution that has everything for everyone, as we focus on our core base of customers and provide the best solution we can.” Talk of cloud-based delivery and iPads begs the question of timing. After all, Africa wasn’t a smartphone market or likely to be one only a decade ago. “I would guess that as the telecoms infrastructure has expanded, more companies are reaching out to us,” Gebhard suggests. In fact, she

S03 ORA 4 2012 Analysis 1_Layout 1 18/07/2012 14:22 Page 15

Changing times However, she says, ”Times have changed. An entire shift in the way the world works has benefitted us. You bank online. You shop online. You socialise online. Also, [research company] Gartner has surveyed companies on this behavioural change, and most companies have cloud services

“My impression of Africa is that it’s a dynamic, emerging, and active market to watch.”

AspectDSC uses a number of content sources, such as Platts.

throughout their global organisation, in PR, safety, sales — just about every area of their business. It’s natural that trade and risk go online too.” Supporting her assessment, a recent Gartner survey reveals that energy and utility company CIOs expect a sharp increase in the volume of transactions managed in cloud computing environments and under SaaS-based applications between 2011 and 2015. For larger energy companies and utilities, the report indicates, the penetration of SaaS ETRM [energy trading and risk management] deployments — cloud computing-

based or otherwise — will grow incrementally as common processes are increasingly standardised (for example, settlements). Meanwhile, new entrants into energy markets will typically be smaller in size and more receptive to the idea of SaaS and outsourcing over traditional deployments. Gebhard does add, however, “We have built-in disaster recovery and security features, and we take it [security] seriously.” So how important is Africa in Aspect’s overall portfolio? “We have over 75 companies as our customers, in 15 African countries, and hundreds of users,” says Gebhard. She continues, “Most larger companies look at Africa as small compared to their business around the world. We put sales, marketing, delivery and customer support behind our effort in Africa. My impression of Africa is that it’s a dynamic, emerging, and active market to watch, not only in oil and gas, but other sectors. As business opportunities grow, more and more businesses will be needed throughout Africa to help them expand.” ■


Oil Review Africa Issue Four 2012 15


says, prior to five years ago, the company had not been focusing a great deal on Africa; in that sense development of the service has probably been rather well timed, coming as it does at a period of real telecoms growth in the continent. Of course price structure and products have also been geared for this emerging market, one which, in this case, is very mobile-focused. “Our customers like our mobile AspectDSC service in Africa,” Gebhard says, which itself suggests that, as she says, ”their service and infrastructure is solid enough to be able to get the real-time oil prices and news they need.“ Of course, unlike accessing content, online trading of the sort offered by AspectCTRM, and especially via portals and on multiple devices, might give rise to security concerns. And Gebhard admits that “in the early days security was the concern. Companies were afraid the data would get hacked, or that we couldn’t keep services running. It was just unfamiliar territory to not host your own trade and risk data.”


S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 16

Increasingly the oil and gas sector growth in West Africa has stood out. GL Noble is helping to provide services and software solutions to aid both international and local oil companies in developing and operating safer and more efficient assets in the region.

Preparing today for a

better tomorrow T

HE OLD AFRICAN proverb – tomorrow belongs to the people who prepare for it today – holds a special relevance to the energy industry. East, West and North Africa are providing oil and gas companies with almost unlimited opportunities, particularly for those prepared to lay the foundations for the future and acknowledge the inherent risks associated with doing business on the continent. The continued stability of oil prices, numerous and enormous reserve finds and leaps in technological abilities are being announced with increasing regularity. They are driving activity in Africa, often previously viewed as limited at best and at worst, unviable…not so today. Africa’s Eastern promise is proving to be enticing, with deep-water drilling advancements in the Indian Ocean encouraging greater interest. Countries across the north also remain on the radars of the biggest energy firms on the planet, as they hunt for new oil and liquefied natural gas (LNG) reserves. Companies working in this region include Cape, which began its activities in North Africa in 2002, with an initial project in Egypt – Damietta LNG. The company’s operations have grown remarkably since, with developments such as the Arzew LNG plant in Algeria.

Africa’s Eastern promise is proving to be enticing, with deep-water drilling advancements in the Indian Ocean encouraging greater interest. Growth in West Africa continues Increasingly however – thanks to innovations in deep water technology – the oil and gas sector growth in West Africa has stood out, with billions of dollars of investment announced by global majors more recently in Ghana alone. Tullow Oil has recently launched a bid contest for a major subsea production system on a new field development offshore the country, for example, with aspirations to follow the success of its Jubilee project. West Africa is intrinsically linked with the history of the energy industry, with the first commercial reserves of oil discovered in the Niger Delta basin in 1956. Fast forward just 20

16 Oil Review Africa Issue Four 2012

Africa needs international oil companies to continue to play a large and essential role in the oil and gas industry’s research and development activity.

years – a relatively short time for a global industry – and Nigeria had become Africa’s top oil producer, only for price shocks and political upheavals to see decline. The turn of the century brought with it renewed vigour and an increasing focus from the energy majors such as Shell, Chevron and Total investing heavily in West Africa once more. Among those companies that recognise the region’s potential is GL Noble Denton. A global independent provider of technical services and software to the oil and gas industry, the company works with some of the sector’s best-known corporations to provide a wide range of services across the lifecycle of their assets. It has opened its first base in West Africa with operations in Lagos, Nigeria – a move that has reinforced the company’s commitment to developing its presence in the region, where major oil and gas firms continue to increase their efforts to access the considerable hydrocarbon reserves available in the Gulf of Guinea.

Growing reputation GL Noble Denton’s Nigerian operations will develop the company’s growing reputation for

providing services and software solutions to aid both international and local oil companies in developing and operating safer and more efficient assets in West Africa. Today, Nigeria is the tenth largest oil producer in the world and arguably the most prolific in sub-Saharan Africa, with proven commodities of more than 37bn barrels, and an estimated 187 trillion cubic feet (tcf) of natural gas. It is also the ninth largest natural gas reserve holder in the world and the largest in Africa. Leading GL Noble Denton’s Nigeria operations is Tekena Dokubo, who joined the company as Country Manager, following a successful career with firms including Kellogg, Brown and Root (KBR), DeltaAfrik Engineering and Lahor Limited. He said: “West Africa’s oil and gas industry has grown from strength to strength over the past decade. Local governments and international oil companies have invested heavily into developing the infrastructure needed to access the area’s considerable energy reserves, and the number of new projects being developed for the region has risen sharply.” The desire for this expertise is expected to match the demand for energy to feed global


S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 17

0860 726 7864

S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 18

Effects of the Arab Spring


There is no question that the so-called Arab Spring affected the prospects and general outlook for African countries, particularly in the north. While long-term predictions of political unrest have created additional considerations for E&P companies, the potential of the region has not been dismissed. Earlier this year, GL Noble Denton commissioned Big Spenders: The outlook for the oil and gas industry in 2012, the second annual industry barometer by the Economist Intelligence Unit. It revealed major industry players continue to believe Africa provides opportunities for growing their revenue, with nearly a quarter (23 per cent) highlighting the North as an integral part of their future plans.

The company is involved in some of the region’s most innovative projects including a major 85 km pipeline upgrade project in the Niger Delta.

requirements. Figures earlier this year estimated global energy consumption increased by almost six per cent between 2010 and 2011 alone – the highest rate of growth since the early 1970s. The same projections suggested oil reserves in the UK and Norway declined from about 16 to 9.5bn barrels, while proven reserves in the US stayed flat at about 30bn barrels. In stark contrast, proven oil reserves in Africa grew by more than 40 per cent over the same period, with more than 130 bn barrels estimated. Nigeria alone was predicted to have over 150 per cent more reserves than the US.

Huge role meeting energy demands Increasingly, it appears Africa – particularly West Africa – can play one of the largest roles in meeting the rising energy consumption demands, to be among the world’s biggest exporters of both

oil and LNG. It will rely on those companies with the expertise, experience and personnel to lead the way. GL Noble Denton’s reputation as a leading technical advisor to the West African oil and gas industry is born from the company’s involvement in some of the region’s most innovative projects. Most recently, the company has begun work to provide verification and inspection services for the design, fabrication commissioning and installation of line pipes for a major 85-km pipeline upgrade project in the Niger Delta. The project, commissioned by a leading international oil company, will see GL Noble Denton provide a team of highly qualified inspectors to issue certificates of safe operation to the newly installed assets. The company has also been contracted to provide a major marine warranty survey project for a well-known national client.

The opportunity for GL Noble Denton to build a stronger presence in Nigeria and its surrounding countries, has never been better. The opportunity for GL Noble Denton to build a stronger presence in Nigeria and its surrounding countries has never been better. Oil and gas sector activity has rapidly increased, alongside indigenous participation in the provision of services via the Nigeria Content Act. Operators need the support of a global technical advisor with strong local knowledge to help them plan, design and develop, operate, optimise and assure their assets. Tomorrow has never looked more promising because we are preparing for it today. ■ Peter Russell-Smith is Executive VP Business Development and Genera Manager , GL Noble Denton.

Energy consumption slows BP’S LATEST REVIEW of world energy statistics* reports that global all-forms consumption growth (2.5 per cent) moderated along with the overall economy last year; back in 2010 it had been a (recovering) 5.1 per cent. “Once again emerging economies accounted for all of the net growth,” said Group Chief Executive Bob Dudley. Meanwhile overall demand in the OECD (heavily industrialised) countries dropped for the third time within the past four years. Of course the big talking point for much of the year was what to do about the loss of Libya’s output of oil, but in the event the BP team note that this was more than compensated for by increases in several Gulf producers, and in the USA too; Libya’s wells were soon back on stream anyway. Crude remains number one fuel Crude remains the world’s number-one fuel, supplying almost one-third of total recorded consumption in 2011, but it has now lost market share for 12 consecutive years, and coal was once again the fastest-growing fossil fuel. Few African countries produce this commodity. Other highlights of last year’s oil market: average prices for the year exceeded US$100/bbl for the first time ever in current dollar terms; inflation-adjusted prices were the second highest on record; the differential between grades reached a record premium, with sweet Nigerian Forcados right at the top of the range ($18.60 above WTI on the spot market); and

18 Oil Review Africa Issue Four 2012

global proved reserves grew yet again. However all-Africa’s proven total grew not a jot. The main focus of energy debaters for the post-Libya crisis period was of course gas, and the continuing impact of the shale fracking revolution in North America and – coming soon to some sub-Saharan countries including SA – the rest of the world. Global reserves grew too, but unfortunately Africa is being left out of this comforting trend. Regional production of gas actually fell by five percentage points. Global LNG trade grew by a very healthy 11 per cent-plus, and price trends for gas in all forms between consuming regions grew apart in interesting ways, with the North American market – where much of West Africa’s liquefied gas is sold - featuring record discounts. All of these trends will be investigated in the next two issues of Oil Review. And from BP’s viewpoint? “The world is not structurally short of hydrocarbon resources…,” Mr Dudley said, “but long lead times and various forms of access constraints in some regions continue to create challenges for the ability of supply to meet demand growth at reasonable prices… “Understanding where we are – and where we have been – is necessary for us to build a safe and sustainable energy future,” he concludes. Once again this mid-year Statistical Review certainly helps with that.

BP Statistical Review of World Energy June 2012

S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 19

S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 20


Through the use of operational performance and predictive risk systems such as Proscient, management is able to access new leading indicators of both operational risk and work efficiency for the enterprise, asset and plant.

A region of promise

and pitfalls I

NVESTMENT IN EXPLORATION of oil and gas is booming in Africa, driven primarily by high demand from the Western world, coupled with a significant and developing need from emerging economies, such as China, India and Brazil. The continent is well placed to supply this demand. Home to some of the world’s most prolific reserves, it is endowed with vast quantities of oil and gas, often located in increasingly challenging frontiers, such as the deepwater fields offshore West Africa. Despite frequent and substantial new findings however, the region is not without its challenges. Given the uncertain and sometimes testing operating environments, there is an even greater onus on companies to optimise resources, standardise processes and deliver faster turnarounds. Combined with the growing emphasis on managing operational risk and the demands to adhere to tighter safety regulations, operators and contractors are consistently looking at how they can improve both efficiency and operational risk management (ORM). Add to this that stakeholder expectation of operational performance continues to rise exponentially, and the industry is now seeing ORM firmly ensconced as a board level priority. The key to managing these expectations is to demonstrate good governance and the ability to deliver performance in a responsible and sustainable manner.

Challenges The interaction between people and the plant has become a key area of focus for corporate governance due to a number of factors: sheer size, scope and the direct impact on performance, stakeholder expectations and reputational risk. This interaction is the leading cause of high potential incidents (HiPo’s), second leading cause of fatalities and a significant contributing factor in process safety incidents. It is also an area where operational performance is impacted by non-productive time, unplanned shutdowns and inefficient utilisation of contractors. While most organisations typically have rigorous corporate procedures for process safety, occupational safety and people management, with systems and data used to provide indicators and close the critical gap in oversight, this is not always the case at the frontline. In this space, where thousands of people interact with an asset or installation on any given day to carry out repair or maintenance work, there are often limited processes and only paper-based systems in place to manage this activity. Despite the lack of ability to generate or capture data, as an industry we have come to accept these systems as being as adequate or ‘good enough’. Without data on performance and risk management however, companies are left with a critical gap in terms of operational assurance. In the eyes of stakeholders, is adequate really good enough in terms of our operational performance and management of frontline operational risk.

The need for feedback data Senior management across hazardous industries need to address the challenges of improving operational performance and reducing risk while embracing the means to measure and demonstrate the organisation’s progress. Typically, the need for continuous improvement has been addressed through various risk reduction and performance enhancing initiatives, better rulebooks, more robust procedures and new metrics to measure progress. More often than not though, there is neither an increase in performance nor a noticeable decrease in the number of HiPo’s, incidents and fatalities. Despite our best efforts to develop, issue and train on best practice and

20 Oil Review Africa Issue Four 2012

Petrotechnics deployed its electronic integrated safe system of work Sentinel PRO on the SNEPCO-operated Bonga FPSO offshore Nigeria.

corporate policies, frontline operations have changed very little in the past 40 years. As a result, significant pressure is placed on the shoulders of those who issue and approve work, with the provision of a limited paper based system to get day-to-day operational risk right. However, with systems based on forms in triplicate or basic digitised processes, there is no assurance that best practices are shared, lessons learned are delivered contextually, or that people are guided to the most appropriate decision. What is missing with these systems is data and feedback. Without feedback data on how work is actually carried out, we do not have the means to measure or even improve performance while reducing risk.

The interaction between people and the plant has become a key area of focus for corporate governance. Closing the critical gap in operational assurance Recognising this critical gap in operational assurance, Petrotechnics’ Proscient closes the gap in the riskiest part of operations; when people interact with the plant. The system intelligently embeds corporate, regional and local policies and processes, and ensures that they are consistently delivered in frontline practice. In practice, Proscient manages and controls frontline work processes and captures data such as type of work, volume of work, the interaction of work and the associated human factors as part of routine work processes. Common metrics can then be established across an organisation or venture to provide an indication of the operational risk associated with the work being performed. Not only does this deliver meaningful insight into frontline operations, but the clarity and confidence that the data provides also empowers improved decision making at an enterprise, regional or local level.

A proven track record Petrotechnics solutions have already been deployed across sites in Africa such as Nigeria, Chad, Cameroon, Tunisia and Angola. One company, operating an FPSO offshore Nigeria, recognised that the existing system

S04 ORA 4 2012 Analysis 2_Layout 1 18/07/2012 14:29 Page 21


being utilised across the vessel could no longer support the volume of work being carried out at the frontline. The lack of integration between work management processes resulted in duplication and a reliance on individual competencies. Managers therefore had little assurance that policies and procedures were being adhered to, as the interpretation of procedures and methods differed between both shift changes and crews. Employment of Petrotechnics’ technology has seen the FPSO transform into an extremely successful operation and a flagship for the company in the region, beating production expectations while achieving an excellent standard of safety management. The consistent application of best practice rules, regulations and lessons learned delivered safety and assurance benefits as well as significant efficiency gains and improved risk management. At its gas plant in Tunisia, a different client recognised that the challenges it faced were the result of a need for supporting technology and improved workforce engagement. The disparate processes and fragmented communication between local assets exposed the site to increased and undue risk. Further issues experienced at the site revolved around competency, culture and different languages, including Arabic, French and English. Petrotechnics’ solutions integrated work activity processes across the board, delivering a standard approach to frontline work management both at the gas plant and at an offshore asset. Frontline workers of all nationalities benefited from the clear definition of roles and responsibilities which, when coupled with the embedded rigour that the software provides, removed the potential for human error. Ultimately, the improvements in the processes associated with the interaction of people with the plant, realised through Petrotechnics’ solutions, led to increased safety and increased attainment of the work plan while reducing exposure to risk across each organisation’s operations.

Employment of Petrotechnics’ software was used by BG Tunisia.

Conclusion Petrotechnics’ software solutions ensure that frontline workers are provided with rigorous processes and practical, critical information relevant to the work that they are about to undertake. In turn, this delivers assurance that corporate policies are being followed in routine practice and measures how these policies impact performance. Through the use of operational performance and predictive risk systems such as Proscient, management is able to access not just relevant historical data, but also new leading indicators of both operational risk and work efficiency for the enterprise, asset and plant. Senior management can then use these indices to manage and monitor the whole organisation to a less risky and more efficient performance. ■

* Iain Mackay, Executive VP, Petrotechnics

Our Mission is to make Energy solutions better

Nadabo Energy is a wholly indigenous Integrated Energy Group providing World Standard Services to the Public and Private Sectors of the Nigerian economy. Our proven track record evidenced in the excellent and professional services we have delivered to our distinguished customers show that we have the capacity to help your business achieve high performance in any of these areas: 


Petroleum Products Trading, Marketing and Distribution Engineering Procurement Project Management Operation and Maintenance of Oil & Gas Equipment Construction and Installation of Electrical and Mechanical Equipment

Recipient of prestigious Award for Best Indigenous Oil and Gas Company in Nigeria presented by African Business Leadership in 2011 Lagos Corporate Office 15B, Ogbunike Street, Off Admiralty Way, Lekki Phase 1, Lagos Tel: +234 (0)1 270 1393, (0)8037144811 Tel/Fax: +234 1 280 6944

Abuja Office: Plot 730 Alexandra Crescent, Wuse II Abuja Tel: +234-1-790-6410, (0)803 317 3656

Port-Harcourt Office: No. 176, Okporo Street, Rumodara, Port Harcourt, Rivers State, Nigeria. Tel: +234-1-870-6893, (0)803 3013157

E-mail: Website:

Oil Review Africa Issue Four 2012 21

Equatorial Guinea

S05 ORA 4 2012 Equatorial Guinea_Layout 1 18/07/2012 14:34 Page 22

Equatorial Guinea, with a population of about 700,000 is making big strides in the global oil and gas industry.

A global oil & gas force to be

reckoned with W

ITH AN ANNUAL oil & gas production of 420,000 barrels of oil equivalent per day (boepd), Equatorial Guinea has been transformed to the richest African country per capita, and the world is taking notice. This could be seen by the attendance at the recent 15th Gulf of Guinea, oil & gas conference hosted by Equatorial Guinea, held in June this year, in Sipopo, just outside the capital Malabo. Lead by its young and dynamic Minister of Mines, Energy and Industry, Equatorial Guinea is fuelling an investment climate that is attracting a tremendous amount of international interest in the opportunities presented by its the oil & gas sector. The Ministry of Mines, Industry and Energy is the overall regulatory body for the oil & gas industry in Equatorial Guinea. The oil & gas industry has transformed Equatorial Guinea to the richest African country per capita. Lead by its young, experienced and dynamic Minister Gabriel Mbaga Obiang Lima, it promotes and regulates the industry, negotiates production-sharing contracts and set up the National Institute for Hydrocarbon Technology Equatorial Guinea to provide higher education and training to enable Guineans to participate in the oil and gas industry. It also plays a key role in fuelling the growth of the economy and its oil & gas industry with its innovative reforms and modernisation programmes which includes fiscal regimes that reward efficiency and fast turnaround in the exploration & production programmes of the oil companies and the monetisation of its large gas reserves, developing not only its upstream sector, but also downstream and mid stream sectors. It is also the champion of not only local content in Equatorial Guinea, but also regional content, encouraging capacity building and technology transfer to locals and local companies through associations with companies in the region.

National oil & gas companies 6 GEPetrol The Equatoguinean government created the national oil company (GEPetrol) which became operational in 2002. GEPetrol’s primary role is to promote and negotiate acreages, manage the government’s stake in the various production sharing contracts (PSCs), marketing of its share of crude oil and providing services to the sector through joint ventures (JVs) with international companies. 6 Sonagas Following the discovery of large gas reserves, Sonagas was created in 2005, and is Equatorial Guinea’s national gas company. It manages the government’s involvement in all gas activities. Oil and Gas production in Equatorial Guinea is at 420,000 boepd, produced from the Zafiro, Ceiba and Okume, Alba and Aseng fields. With much of its proven oil and gas reserves unexplored, its production is said to increase as more fields come onstream. 6 Zafiro - W Africa’s first deepwater field ExxonMobil is the operator of Zafiro, the main producing field in Equatorial Guinea. It was the first deepwater field to be brought on stream in West Africa. The field contains estimated recoverable reserves of over 400mn barrels, and is Equatorial Guinea's largest oil producer, with an output of 125,000 bopd and 3. 26 mcm (115 mcf) of gas per day. Key assets include the Zafiro floating production unit (FPU), the Jade platform and the floating production storage and offloading vessel (FPSO),

22 Oil Review Africa Issue Four 2012

The Okume field achieved its first oil in 2006.

The oil & gas industry has transformed Equatorial Guinea to the richest African country per capita. Serpentina. Mobil Equatorial Guinea Inc (MEGI) owns 71.25 per cent of the Zafiro field, GEpetrol owns 23. 75 per cent and the state owns five per cent. 6 Ceiba field and the Okume field Hess operates two of Equatorial Guinea’s producing fields, the Ceiba field and the Okume, both located in Block G. The Ceiba field was discovered on the 6th October 1999, by Trito - now Hess Corporation -who is the operator. Production began in December 2000, with an initial output of 12,401 bopd rising presently to a production of approximately 23,000 bopd, from the FPSO vessel, Sendje Ceiba. Partners in the field are Hess (80 per cent), Tullow Oil (4.25 per cent) and GEPetrol (five per cent). The Okume field was discovered in 2001 and construction of the complex facility began in August 2004. The development achieved its first oil on December 14, 2006, when the Okume B platform came on-stream, with oil Production of 70,000 bopd, taking the total production of Hess to 94,000 bopd a day from block G, which includes the Ceiba field and the Okume complex. Partners in the field are Hess (80 per cent), Tullow Oil (4.25 per cent) and GEPetrol (five per cent). 6 EG’s largest natural gas field - Alba Marathon Oil Corporation is the operator of the Alba block, which is Equatorial Guinea's largest natural gas field. The field was discovered in 1983 and is estimated to contain reserves of about 127 bcm (4.5 tcf). The field is also responsible for almost all of the natural gas that is produced in the country. The field currently produces condensates and liquefied petroleum gas (LPG). Shortly after establishing its presence in Equatorial Guinea in January 2002, Marathon embarked on the phase 2a, 2b & 3 expansion projects. The phase 2a enabled Marathon to expand its recovery of condensate from

S05 ORA 4 2012 Equatorial Guinea_Layout 1 18/07/2012 14:34 Page 23

Equatorial Guinea

S05 ORA 4 2012 Equatorial Guinea_Layout 1 18/07/2012 14:34 Page 24

recovery plant, a methanol plant and an LNG export plant which all form part of the Punto Europa complex on the Island of Bioko. The largest gas reserve in Equatorial Guinea is located in the Alba field. Other potential reserves of varying quantity are located offshore in the country’s Zafiro, Ceiba, Aseng and Alen fields. To date Equatorial Guinea’s total proven gas reserves are 36.8 bcm (1.3tcf). In 2009, in-line with the government’s policy to reduce gas flaring from productive fields, minimise pollution to the environment and make Equatorial Guinea a major gas hub in the Gulf of Guinea, it formed a consortium through Sonagas called 3G with E.ON Ruhrgas, UNION FENOSA Gas and Galp Energia. The aim of this company is to build its own gas gathering infrastructure, negotiate with the upstream operators for their gas, select different projects for gas monetization, including domestic use of gas and export solutions, in particular gas that has already been discovered and is currently re-injected or flared in the zone of the Gulf of Guinea.

LPG processing Plant

Licence map showing exploration wells.

Equatorial Guinea has been a pioneer in monetising its gas resources. 14,500 to 51,000 boepd. The phase 2b expanded existing LPG production capacity to a factor of 20,000 boepd. Phase 3 was the construction of Train 1 of an LNG plant, this was completed in 2007. Partners in the field are Marathon (63. 25 per cent), Noble (33. 75 per cent) and GEPetrol (three per cent). The Aseng field operated by Noble Energy is Equatorial Guinea’s latest field on come on stream with a production of 60,000 bopd. First oil was produced from the Aseng FPSO in November 2011. The Aseng field development is located in deepwater block I in the Douala Basin. The field development consists of five subsea wells connected to the Aseng FPSO, which is moored in waters that are some five metres deep. Partners in the field are Noble Energy (40 per cent), Atlas Petroluem (29 per cent), Glencore Exploration (25 per cent), PA Resources (six per cent) and GEPetrol (five per cent).

Exploration & field development After a lull in exploration and drilling activity between 2008- 2011, things have picked up again in 2012, with Ophir planning to drill at least three wells. Starc and White Rose are forecasting to drill one. PanAtlantic, Noble Energy, Hess, Gazprom Neft, Atlas will also be moving forward with their exploration activities. Recently awarded oil blocks include Block A-12, whose partners are Marathon (80 per cent) and GEPetrol (20 per cent) and Block J-14, J15, K14 & K15 whose partners are Murphy Oil, PanAtlantic, Kosmos Energy, Dana Petroluem and GEPetrol. The owners of the recently awarded blocks will shortly begin their drilling campaigns. While most of its neighbours are still flaring gas, Equatorial Guinea has been a pioneer in monetising its gas resources. It started by implementing regulations to ban gas flaring in 2006 and made investments jointly with some operators on a number of gas monetisation projects including an LPG

24 Oil Review Africa Issue Four 2012

Equatorial Guinea’s first venture in to monetising its gas reserves dates back to 1991 with the construction of an LPG recovery plant to extract LPG from gas flared during production of condensates on the Alba field. The plant was upgraded at a cost of US$350mn and its production went up to 23,000 boepd. A small fraction of the LPG produced is consumed locally and the bulk of it is exported to the US & Europe. Partners are Marathon, Noble and GEPetrol. In 2001 Atlantic Methanol Production Company (AMPCO), a consortium comprising Marathon Oil 45 per cent, Noble 45 per cent and Sonagas 10 per cent, completed the construction of a $400mn Methanol Plant at Punta Europa on the Island of Bioko. Its annual production is more than one million tones and is mostly marketed to the US and Europe. 6 Liquefied Natural Gas (LNG) Most of Equatorial Guinea’s natural gas production is exported in the form of LNG. Marathon Oil Corporation and its partners completed in early 2007 Train 1 of the $1.4bn Punta Europa LNG facility on Bioko Island and first production of LNG was in May 2007. The plant is initially designed to process approximately three trillion cubic feet of dry gas from the Marathon-operated Alba Field. Its partners are Marathon 60 per cent, Sonagas 25 per cent, Mitsui 8.5 per cent & Marubeni 6.5 per cent. All LNG produced has been sold to British Gas Marketing Limited under a 17 year purchase agreement.

Future projects Apart from the exploration and development of oil and gas blocks, Equatorial Guinea solely, or in conjunction with its international partners, have embarked on other projects that would further boost the country’s oil & gas industry both regionally and globally. Some of the current projects include: 6 Vopak oil product storage terminals Construction of a 2.5 mcm (88.3 mcf) tank farm project in Equatorial Guinea is expected to begin towards the end of 2012 and is projected to be fully operational by late 2013. When completed, the $690mn project will be the largest hydrocarbons storage facility in Africa capable of storing both crude and refined oil products. Once operational, the goal of the storage facility is to increase the importance of Equatorial Guinea as a strategic energy distribution centre in the Gulf of Guinea. 6 Mbini refinery The Ministry of Mines, Industry & Energy ,as part of its plan to further grow diversify the Equatorial Guinea oil & gas industry, has engaged the services of the US construction and engineering firm KBR to do the initial studies and design for a refinery in Mbini. This has now been completed and a tender is expected to go out in 2012 for the construction of the refinery. The planned refinery will have a capacity of 20,000 bopd and will be designed to produce gasoline, diesel, Jet A-1, fuel oils, lubricants and asphalt. The primary purpose of the refinery will be to satisfy domestic consumption, with excess being available to export to the regional markets. The building of the refinery is expected to cost just over $400mn. ■

S06 ORA 4 2012 Egypt_Layout 1 18/07/2012 14:41 Page 25

S06 ORA 4 2012 Egypt_Layout 1 18/07/2012 14:41 Page 26


Egypt continues to pull in investment from foreign energy firms despite the backdrop of a nation in transition.


Egypt I

NVESTMENT CONTINUES IN Egypt’s oil and gas sector, despite a backdrop of political change in the North African state. While the political process continues to unfold, it appears the energy industry has largely weathered the storm of last year’s Arab Spring that resulted in the overthrow of former President Hosni Mubarak. Oil and gas production and exports remain mostly unaffected, in contrast to the turmoil that engulfed Libya across the border. But there have been casualties along the way, not least the former president himself. Natural gas flows to Israel and Jordan have been heavily disrupted since the the political crisis began. Since Mubarak was forced to step down in February 2011, the pipeline delivering gas to these two markets has been bombed at least 14 times, reducing supplies significantly. It reflects the widespread and long-standing unpopularity of the Israeli gas deal. Egypt’s agreement with Israel - which supplied Israel with 40 per cent of its natural gas at below market prices - was formally cancelled last year. The former oil minister that signed the deal, Samih Fahmi, was sentenced by a Cairo court recently to 15 years in prison. Israeli officials insist the terms of the gas deal were fair, but Egyptian prosecutors said in April 2011 that the state had lost more than US$714mn. A fugitive businessman, Hussein Salem - now in Spain fighting extradition - was also sentenced to 15 years for his role in the project, through his company East Mediterranean Gas Company (EMG).

Investor appeal While things may still be in a state of flux in a broader sense, it has not deterred investment from pouring in, confirming that Egypt maintains its reputation for stability in a generally volatile region. Investors in a new refinery project recently secured US$3.7bn in financing for the proposed facility, to be built on the outskirts of Cairo. The Egypt Refining Company (ERC) financing structure includes $1.1bn of equity and $2.6bn of project debt. Investors include the Egyptian government, the Egyptian General Petroleum Corporation (EGPC), Citadel Capital and Qatari gas giant, Qatar Petroleum (QP). Other financial supporters include Gulf Arab investors, the World Bank’s financing arm, the Netherlands development bank FMO, Germany’s private sector lender DEG and the European Investment Fund’s InfraMed Fund. It is a strategically important downstream project for the Arab state. The ERC project will produce 4.1mn tonnes of refined products and oil derivatives a year, including more than 2.3mn tonnes of high-grade Euro V diesel. This production, due in 2016, is expected to cut Egypt’s own diesel imports by up to 50 per cent. Egypt’s rulers have sought to boost diesel imports this yearas fuel shortages in the capital have caused long queues at gas stations and traffic jams in main city streets, angering an already agitated public.

Upstream activity Another critical signal that illustrates a return to normal ways is the continuing activity of projects and developments in the all-important upstream sector.

26 Oil Review Africa Issue Four 2012

On the 23rd of June, first gas from the $334mn Seth development commenced approximately 18 months from project sanction, which is 15 weeks ahead of schedule.

This includes investment from super majors such as BP, which recently announced first production from its $334mn Seth field development. This is sited 60km offshore in the Ras El Bar concession in the East Nile Delta Mediterranean, close to existing producing Ha'py and Denise fields. Gas is exported via the Denise (Pliocene) pipeline to the El Gamil gas terminal near Port Said onshore. The first two wells accessing the western part of the Seth reservoir are expected to reach 170 mmscfd and develop about 240 bcf of gas. BP Egypt’s regional president Hesham Mekawi said production launched just 18 months from project sanction, and 15 weeks ahead of schedule, reflecting business as usual despite the political upheaval. “The success of the Seth project has led us to accelerate its Phase 2 development to access gas in the eastern part of the field through an additional two platform wells, which are planned to be on production by the end of 2012, increasing Seth off-take to in excess of 250 mmscfd,” he said. BP’s joint venture with EGPC currently produces almost 15 per cent of Egypt’s entire oil production; its various local companies together produce almost 40 per cent of total domestic gas demand.

Independents alive It is not just the industry super majors that are supporting Egypt either, with activity among the independent companies alive and well too, a key measure of a healthy energy sector. Another UK-based company, Dana Petroleum, also announced first production recently from two new wells in the Gulf of Suez, taking its daily production tally in the country to more than 13,000 barrels. The work is carried out through Dana’s joint venture, Zeitco, formed last year with the EGPC, set up to operate the East Zeit and North Zeit Bay concessions. “This is a significant well for extending the economic field life of the East Zeit field, which had its first oil production back in 1985, and demonstrates Dana’s commitment to invest in Egypt,” said the company’s local managing director, Nick Dancer. Canada’s TransGlobe Energy also extended its footprint in the country this July, acquiring Cepsa Egypt for US$3mn, landing it 100 per cent ownership in the South Alamein concession in the Western Desert area. The concession includes an oil discovery well, Boraq-2X, which TransGlobe reckons should be capable of initial production of some 1,700 barrels per day, although further exploratory drilling is planned in the area first. The company is gearing up for a three well drilling programme in the Boraq area later this year.

S06 ORA 4 2012 Egypt_Layout 1 18/07/2012 14:41 Page 27

Egypt Zeitco has successfully completed its first well of 2012, A12Z on the East Zeit field, located in the Red Sea.

A gas sweetening and dehydration unit in Saqqarat

Despite the events of the past couple of years Egypt’s energy sector remains very much open for business. Business as usual Despite the events of the past couple of years Egypt’s energy sector remains very much open for business. Interest remains high in key industry events - such as the upcoming 7th Mediterranean Offshore Conference & Exhibition (MOC 2012), scheduled to take place from October 7-9, 2012, in Alexandria - another key barometer of confidence.

And Egypt's new President Mohamed Mursi is clearly keen to reassure investors following all the changes, that have been broadcast to the world. He has promised to work to attract investment in all areas of the economy and to revive tourism, severely damaged following the uprising that ousted Mubarak. His job may not be quite as tough as that facing officials in neighbouring Libya though. The ability to pull in billion dollar financing packages for new refinery projects, and the ongoing commitment of major players like BP, suggests Egypt is back on track. ■

Eunisell Solutions Eunisell flow assurance solution is positioned to provide a world class operation that meets clients’ equipments and personnel requirements. We provide quality equipments, competent, experienced and dedicated personnel. Our operations are strategically located for Well testing, Early Production, Severe Service Sand Management, Well Sampling and various flow assurance solutions. “We force reservoirs to yield their potential” throughout our operations, with key points of coordination located in our service centres.

Eunisell’s services assist clients to: • • • •

Prove Measure or Monitor Reservoir Improve Asset Management Generate Early Cash Flow or Return on Investment

Eunisell Limited 196A Jide Oki Street, Victoria Island, Lagos Nigeria Tel: +234 1 4612476, 4612477, Facsimile: +234 1 4612475, E-mail: Website:

Oil Review Africa Issue Four 2012 27

S07 ORA 4 2012 DR Congo_Layout 1 18/07/2012 14:58 Page 28

D. R. Congo

The country has undoubted potential, but efforts to make headway in the interior have yet to yield results.

Oil investors frustrated by

Congo complexities D. R. Congo oil exploraton highlights evnironmental challenges


IKE SO MUCH else in the Democratic Republic of Congo (DRC), the nation’s oil and gas sector remains lightly explored and hugely under-developed. That is nothing to do with the prospectivity of this vast central African wilderness state. By all accounts, there is plenty to get excited about, echoing the substantial mineral wealth from gold and diamonds, to copper and cobalt that is already known to exist. And yet oil investors come and go, lured by the hydrocarbon potential across several promising inland basins - the Kigoma, Luama and Southern Marungu - but ultimately frustrated, either by security concerns, muddled laws, or quasi-official u-turns. But this natural resources paradise, typified by the lush jungle landscape visible along the mighty Congo River as it winds its way into the interior, can be made to work. French independent Perenco - currently the DRC’s sole oil producer - has established a successful business on the country’s western flank, by Angola’s Cabinda enclave. Sustained investment, with up to 30 wells drilled per year, has pushed its output from the area to around 28,000 barrels per day (bpd), with oil stored on the offshore Kalamu floating terminal, for loading onto tankers.

Perenco - currently the DRC’s sole oil producer - has established a successful business on the country’s western flank, by Angola’s Cabinda enclave.

28 Oil Review Africa Issue Four 2012

This natural resources paradise can be made to work. Efforts in the interior Efforts to make headway in the interior, where some of the most appealing drilling territory is located, have yet to yield results, however. It is telling that the most successful foreign oil investor in the DRC is located along the shoreline. And yet much of the current focus has been concentrated in and around the Albertine Graben area of the Rift Valley, close to the border between the DRC and Uganda. But this is a volatile and lawless region, and not for the faint hearted. The complicated and messy world of the eastern DRC has a legacy of decades of war, exploitation of natural resources, and too many weapons.

Tullow’s experience Among the most recent to hit the buffers was UK-based Tullow Oil, which was seeking to acquire the Congolese blocks adjoining its successful oil discoveries around Uganda’s side of the Lake Albert region.

It secured rights to the area in 2006 after paying US$500,000 to the Kinshasa government, only for the pair of blocks to be re-assigned by presidential decree four years later to previously unheard of Caribbean-registered firms Caprikat Ltd and Foxwhelp Ltd. Tullow, which helped pioneer Uganda’s oil success, subsequently walked away. Initially, the company sought legal action, but quit the fight in 2011 citing the potential expense of any proceedings and the difficulty in enforcing any award against the DRC “even in the event of success”. The Tullow experience highlights the less desirable side of working in the DRC, where the rule of law may often be open to interpretation, or worse, totally absent. President Joseph Kabila's decision to sign over the rights to the blocks in 2010 to the British Virgin Islands companies provoked widespread investor concern at the time. The two unknown firms, which reportedly paid $6mn in signature bonuses for the blocks, are controlled by South African President Jacob Zuma's nephew Khulubuse Zuma. Since the blocks were re-awarded little on-theground exploration has taken place. Aside from any legal and contractual uncertainties, social unrest, or political interference,

S07 ORA 4 2012 DR Congo_Layout 1 18/07/2012 14:58 Page 29

We are delighted to announce to our numerous Clients and the industry at large that Tolmann Allied Services Company Limited has achieved ATLAS approval as an invigilation centre for OPITO International Minimum Industry Safety Training (IMIST). IMIST is an OPITO standard which supports the global oil & gas industry to meet safety initiative targets. Tolmann has always been in the fore front of delivery of internationally accredited safety training. Our Services include: Basic Offshore Safety Induction Emergency Training (BOSIET), viz: Offshore/Onshore Induction Training Helicopter Underwater Escape Techniques (HUET) Survival at Sea (SAS) Basic Fire Fighting Basic First Aid Others are: International Minimum Industry Safety Training (IMIST) Advanced Fire Fighting AED & Advanced First Aid Breathing Apparatus Wearers' Course Confined Space Entry Helicopter Landing Officer (HLO) Helicopter landing Assistant (HLA) Helideck Fire Fighting Helideck Team Member Training Offshore Lifeboat Coxswain Personal Survival Swimming Search and Rescue Standby Fire Watch Swing rope Transfer STCW 95 Further Offshore Emergency Training (FOET) Dangerous Goods Awareness Training Proficiency in Survival Craft and Rescue Boats (PSCRB)

D. R. Congo

S07 ORA 4 2012 DR Congo_Layout 1 18/07/2012 14:58 Page 30

there are other issues that investors must face in this embryonic market. In the same area, UK-based investor Soco International took on a pair of blocks (Nganzi and Block V) in 2008, receiving presidential decree in 2010. But this area treads into the Virungu national park, adding to the sensitivities it must contend with. At Nganzi, Soco completed a 2D seismic survey earlier this year, and is now assessing potential drilling targets. The firm has a fight on its hands though if it is

to move into the drilling phase because of stiff pressure from environmentalists. Its project partners include Japanese exploration house Inpex, UK-based junior Ophir Energy and DRC state firm Cohydro.

Huge optimism remains And yet there remains huge optimism in the future oil potential of this part of the DRC, one of the poorest and least stable parts of the country. In 2011, South Africa’s SacOil - through its Congolese subsidiary Semliki Energy - brought in Total of France as a farm-in partner and lead

World’s Most Trusted Hardbanding

Duraband®NC 100% REBUILDABLE

Decreases Downtime & Increases Productivity! Unmatched Reliability Excellent Casing & Tool Joint Protection No need to remove existing hardbanding Re-application costs up to 75% lower than competitive products Cuts NPT & Maintenance Cycles Only Fearnley Procter NS-1™ Certified Product for reapplication over other existing hardbands

Duraband® NC Hardbanding Uses: New Application and Re-Application to Tool Joints

operator for its Block III project, also in the Lake Albert area. When the deal was announced, last March, there was hope that it could result in a debut well being spudded in 2012, although this has yet to occur and may be overly ambitious. For now, investors may have to be content with opportunities along the country’s Atlantic side, where production and drilling is a reality. Another hopeful, EnerGulf, is gearing up to drill up to three wells on its Lotshi block, after signing a deal with oil services group, Africa Onshore Drilling. EnerGulf has identified some 313mn barrels of potentially recoverable oil across seven oil prospects on the block. The Canadian-listed company has a 90 per cent interest in the project, where it is partnered by Cohydro.

The involvement of respected names such as Total and Eni certainly underscores the DRC’s high oil and gas potential long-term. In 2010, another major European energy firm, Italy’s Eni, landed an operating interest with Surestream Petroleum in the Ndunda block, in the Bassin Côtier, in the onshore Lower Congo Basin. The agreement follows a broad 2009 strategic co-operation agreement between Eni and the DRC authorities to develop the country's hydrocarbon sector. This vowed to develop gas and liquids in the Cuvette basin and in the eastern regions of the country, around the great lakes, northern Kivu and Tanganika lake, underlining the diverse potential of this vast land. Once again, work on the ground has been slow, reflecting the operational difficulties faced by companies working in this virgin area.

Challenging logistical problems

PERFECT FOR ALL HARDBANDING CONDITIONS Highly Deviated Wells • Sour Gas Well Geothermal Wells • HPHT Wells Available from most drill pipe manufacturers and rental companies and supported by nearly 200 certified applicators around the world 30 Oil Review Africa Issue Four 2012

If nothing else, the logistical problems posed by working in this remote terrain, where there is minimal existing infrastructure, are challenging enough. But given the added layers of political insecurity, weak governance and contractual uncertainty, it is little wonder that progress for all has been hard going. The involvement of respected names such as Total and Eni certainly underscores the DRC’s high oil and gas potential long-term. But even with their combined resources, technical prowess and financial clout, it will take something else to surmount the DRC’s roster of problems. For now, it may still be too soon to tap into the country’s undoubted potential. At Nganzi, Soco completed a 2D seismic survey earlier this year, and is now assessing potential drilling targets. ■

S08 ORA 4 2012 Geology_Layout 1 18/07/2012 15:19 Page 31

AUSTRALIAN DUO FAR and Pancontinental Oil & Gas have completed a 3D seismic survey over what they believe to be an oil-prone area in the Lamu basin, off Kenya. The 778 sq km shoot was carried out by Norway’s Fugro marine seismic team and covered several prospects on the L6 permit, including the primary Kifaru prospect in the southern portion of the block. FAR said a preliminary review of the acquired data indicated that the processed products would be of “very good quality”. Results from processing and interpretation of the data are expected early in the first quarter of next year and the company hopes to drill its first well on the block by mid-2013. The L6 permit lies in the in the northern part of the East African margin and while large natural gas discoveries have been made further south off the coasts of Mozambique and Tanzania, Pancontiental predicts the northern area of the margin off Kenya will prove to be oil-prone. The block is 60 per cent owned and operated by FAR, with Pancontinental holding the remaining 40 per cent stake.

High seas delay Aminex Tanzania 2D MONSOON HAS PUT a halt on Aminex’s seismic plans off Tanzania as the independent pushes the remainder of its survey on one area back towards the end of the year. The company is, however, also locked in discussions about starting a new round of conventional 2D seismic on the deep-water section of the Nyuni Area. Aminex was almost half way through completing 2D seismic over a 335 km section of the area’s transition zone using ocean bottom cable technology when it called a halt. “In recent weeks the survey has experienced downtime due to rough seas in the shallow waters of the transition zone as a result of seasonal weather,” the company said. “To reduce downtime costs and ensure optimum data quality Aminex has reached a mutual agreement with the seismic contractors to suspend temporarily the survey until late October when survey work in the transition zone is expected to resume.”

CGGVeritas to do seismic offshore South Africa CGGVERITAS IS REPORTEDLY planning to explore a 121,000 sq km area for oil and gas offshore South Africa in early 2013. The French exploration company will explore an area of the KwaZulu-Natal coastline stretching from Port Shepstone in the south to Kosi Bay in the north, according to a report in South Africa’s The Mercury. The area extends 300 km out to sea and reaches depths of up to 2.5 km. The four-month survey is scheduled to begin in March next year so as to avoid disrupting turtle, whale and dolphin migrations in the area. CGGVeritas has announced that the Petroleum Agency of South Africa accepted its application for a reconnaissance permit off the KZN coastline, subject to the approval of an environmental management plan.


For For more more information informa o tion

log on to to www w..p or call call or sales sales tteam eam aatt +44 (0) 1709 894575 89457 75 or email o Oil Review Africa Issue Four 2012 31


FAR wraps up Kenyan shoot


S08 ORA 4 2012 Geology_Layout 1 18/07/2012 15:19 Page 32

Dolphin in East Africa swim NORWEGIAN SEISMIC PLAYER Dolphin geophysical has secured its first job in the prospective East Africa play with a letter of intent from Statoil for a 3D survey off Tanzania. The provisional award is for a 5,500 sq-km shoot starting in the fourth quarter. Statoil is targeting further exploration potential in its operated Block 2 off Tanzania following the earlier Zafarani and Lavani discoveries, which are estimated to hold a total of 9 tcf of gas in place. CEO Atle Jacobsen, commented "This marks Dolphin’s entry into the prospective East African Market and will secure backlog for the vessel into Q1 2013. We also look forward to commencing our first large project with Statoil outside Norway".

Madagascar contracts BGP for offshore survey work THE OFFICE OF National Mines and Strategic Industries of Madagascar (OMNIS) has contracted BGP to acquire, process, market, and license seismic, gravity, and magnetic data from Morondava basin offshore Madagascar. The initial programme for the 2D seismic survey is 14,026 km with a grid of 10 km x10 km covering an area of 70,396 sq km. while the 3D program will be designed and performed following the 2D programme. The purposes of the project are:

6 Acquire and deliver a high quality seismic data to OMNIS and international oil companies to further assess the oil and gas potential of offshore Morondava basin 6 Help the government plan for future bidding 6 Enhance the marketability of the concessions and blocks of offshore Madagascar. BGP is set to commence a simultaneous operation in September for both the new 2D multi-client seismic survey and the gravity and magnetic survey.

OMNIS is planning to launch a bidding round as soon as the data is available.

Beach Energy kicks off in Tanzania

Serica all smiles over Namibia seismic

BEACH ENERGY HAS started shooting 2D seismic over its onshore Tanzania acreage, joining other ASX and international players who are trying to unlock East Africa’s petroleum wealth. The Australian mid cap is acquiring 1,800 line km of 2D seismic over its Lake Tanganyika South Block, which contains a rifting structure and style similar to that observed in the Lake Albert part of the rift. UK independent Tullow Oil has found over one billion barrels of oil in Lake Albert, Uganda, to the north and recently sold two thirds of its equity interest for US$2.9bn. Beach said the seismic data will allow it to identify prospects and leads of further interest and run infill seismic on these leads. The infill seismic will be shot after the first 1,200 km is acquired. It added the company was targeting large targets with more than 200mn barrels of oil. Beach acquired the Lake Tanganyika South Block in June 2010 after its international team identified oil seeps on Lake Tanganyika and the potential for similar geological characteristics to those of Lake Albert. Other Australian players have also been busy in East Africa with Bounty Oil & Gas participating in a 335 line km 2D seismic survey at its Nyuni Block offshore Tanzania that targets the transition zone between the coast and the deepwater parts of the block. This will be followed by the shooting of 500 line km of 2D seismic over the deepwater portion of the licence in the second half of the year. Meanwhile, WHL Energy is completing additional seismic work and ongoing geological studies over its large offshore Seychelles acreage and is looking to complete a farm-out agreement with a major oil company with the intention of drilling a well on the Junon lead. Previous seismic had indicated the presence of a Karoo reservoir that extends across the main features, along with a regional Cretaceous and Paleocene seal that has been mapped and is present over much of the area. To the north, Pancontinental Oil & Gas and FAR Limited are hoping for a clearer picture over their L6 licence offshore Kenya once a planned 680 sq km 3D seismic survey is shot. The contract has already been awarded to Fugro-Geoteam AS and is expected to provide high-definition images of subsurface structures.

SERICA WAS FORMALLY awarded the rights to a 17,400 sq km license in the Central Luderitz Basin on December 19, 2011. In March the company announced that it had reached agreement with BP under which BP would earn a 30 per cent interest in the license by meeting the full cost of a 4,150 sq km 3D seismic acquisition programme. Serica retains a 55 per cent interest in the license and is Operator of the license. Operations have made rapid progress. The 3D acquisition commenced on May 10 with the 10 streamer vessel Polarcus Nadia. On June 17, the company passed the 1,500 sq km mark and, as a result, has now met the license obligations for seismic acquisition in full. Data acquisition continues with the survey expected to last through the summer. Data acquired todate has been of good quality and is expected to fully delineate a number of significant prospects which have already been identified on the license. In addition to paying the full cost of the survey, BP has an option to acquire a further 37.5 per cent of the license by drilling and testing a well. Tony Craven Walker, Chairman and Interim Chief Executive of Serica commented: "Although we have met with some weather delays we are very pleased with the progress of seismic operations to-date. Within six months of the license award Serica has completed the seismic acquisition obligations required during the first four year period of the license, a record achievement. The survey, one of the largest to be undertaken off Namibia, continues with results expected later this year following which, with BP, we will be looking to making a drilling decision. "Offshore Namibia remains one of the few under-explored regions worldwide with very large resource potential. With the rapid build up of operations Serica has demonstrated its ability as an operator and its commitment to Namibia. We look forward to completing the survey and moving to the drilling phase."

32 Oil Review Africa Issue Four 2012

S09 ORA 4 2012 Gas_Layout 1 18/07/2012 16:19 Page 33

The region’s leading Oil and gas publication

Essential reading for anyone with a serious interest in the region's

Oil & Gas industry

ABC audited circulation guarantees your advertisement will be seen throughout Middle East

Serving the world of business


Tel: +971 4 448 9260 Tel: +91 80 6533 3362 Tel: +1 203 226 2882 Tel: +44 20 7834 7676

e-mail: web:


S09 ORA 4 2012 Gas_Layout 1 18/07/2012 15:21 Page 34

East Africa emerges as potential competitor for Australia's LNG exports

OFFSHORE TANZANIA AND Mozambique in the past two years, there have been 24 discoveries from just 27 wells. This has smashed expectations and rapidly created another potential competitor for Australia's LNG exports as some of the world's biggest energy companies jostle for position there. While the rise of the prospect of US LNG exports because of a North American shale gas glut has grabbed headlines lately, there is the equally fast appearance of East Africa as a potential LNG hub to supply Asia. A hefty 100 tcf of recoverable gas reserves have been discovered in Mozambique and Tanzania since mid2010, with oil companies involved claiming there is the potential to double this. Plans have already been hatched in East Africa to export 36mn tonnes of LNG a year. But the plays remain at early stages, with hurdles to overcome. "East Africa has been touted as the next major theme in global LNG supply, given the size of the resources and lack of local gas demand," Deutsche Bank energy analyst John Hirjee said. As well as the discoveries being large and concentrated, development could be aided by the tendency of LNG buyers to continually look to diversify supply risks. "The search for diversity favoured recent Australian developments as an alternative to over-reliance on the Middle East," Mr Hirjee said. "However, with Australia now set to be the world's largest LNG supplier by about 2017, East Africa offers a new source of supply to risk-averse LNG buyers." The hurdles to exports, which are

34 Oil Review Africa Issue Four 2012

being planned from 2019, are that the African gas is not high in the petroleum liquids that Japanese LNG buyers prize for their high energy content (and which can boost economics); there is a lack of infrastructure and skilled labour in East Africa; and there is a shortage of credible operators in Mozambique. Like US LNG plans, they could weigh on the pricing of existing LNG contracts, many of which are renegotiated every few years. "Asian buyers (in East Africa) would like a differentiated price -one not linked to the Japanese crude cocktail; confidence on operators' ability to commercialise projects in a new LNG geography; partner cohesion; low-country risk; and, importantly, equity," Credit Suisse analysts David Hewitt said in a recent client note. Japan's Mitsui and Korea's Kogas have already taken stakes in Mozambique projects. The shortage of credible operators in Mozambique, where Anadarko and Eni lead the two big projects being planned, could be strengthened by the entry of Royal Dutch Shell. Shell was recently outbid by Thailand's PTTEP in a $2bn play for Cove Energy, which has an 8.5 per cent stake in Anadarko's Mozambique Area 1 project. But Shell has not walked away from its bid and London-listed Cove's share price is indicating expectations Shell will come back. In East Africa, Mozambique has the biggest resources and planned projects but Tanzania has the best operators, in BG Group and ExxonMobil. Tanzania has also reportedly locked in the fiscal terms for development.

Aminex’ Ntorya tests gas at 20 mmcfd AMINEX HAS ANNOUNCED results of testing the gas discovery made in the Ntorya-1 well in the Ruvuma Basin onshore in southern Tanzania. Testing of the Ntorya-1 well has now been completed. The upper 3.5 m of the gross 25 m and interval was perforated and the well was flow tested on several choke sizes for extended periods over the last four days with corresponding shut-ins for pressure build-up data. The well flowed gas at a maximum rate of 20.1mn scfd (the equivalent of 3,350 bopd) and an estimated 139 bpd of 48°API condensate through a 1" choke. Small volumes of formation water were also produced. The data gathered during testing indicates an initial reservoir pressure of 5,424 psi. Detailed analysis of the pressure data and samples gathered during the testing operation will be carried out in the coming weeks. The successful testing of this reservoir will be followed by a programme of seismic acquisition later in the year to gain a fuller understanding of the extent of this discovery and identify further drilling targets. Aminex CEO, Stuard Detmer, commented: "Today's test results clearly demonstrate the strong commercial potential of the Ntorya discovery. The commercial potential is further enhanced by the presence of condensate with the gas and by the Tanzanian Government's announcement last week that it has secured financing to build a 36" diameter gas pipeline from Mtwara, just 25 km away from the Ntorya-1 discovery, to Dar es Salaam. The presence of liquids with the gas is promising for future exploration in the Ruvuma block. Aminex's upcoming seismic and drilling programmes will be aimed at appraising this discovery and pursuing a number of other very encouraging leads on the Ruvuma block." Participants in the Ruvuma PSA are: Ndovu Resources Ltd (Aminex) 75 per cent (operator) and Solo Oil Plc 25 per cent.

Eni fires up gas production offshore Egypt ENI HAS STARTED production of gas from the offshore field of Seth, located in the Ras El Barr concession, approximately 60 km from the Mediterranean coast of Egypt. After an initial ramp-up phase, the field will produce approximately 4.8 mmcmd of gas, of which Eni's equity 1.7 mmcm (approximately 11,000 boepd). The partners of the Ras El Barr license are Eni (50 per cent), through its subsidiary IEOC, and BP (50 per cent) as operator. The Seth project, whose construction and operations has been assigned by Eni and BP to Petrobel, a joint venture between IEOC and the Egyptian state company EGPC, consists of a platform placed at a water depth of 80 m, two production wells and a pipeline of 11 km. The pipeline links the platform to the onshore processing facility in El Gamil, which handles around 20 per cent of the gas produced in Egypt, through the existing transport network. The development of this project is further evidence of Eni's involvement in Egypt and its contribution to satisfying the growing gas demand in the country through the exploration and development of gas reserves in the Mediterranean Sea. Eni is the leading foreign oil operator in Egypt with total operated production of approximately 236,000 bpd of oil equivalent in 2011. Eni operates in the country through IEOC, which directly executes the exploration activities and participates in the production activities through joint ventures with the Egyptian state company EGPC.

S09 ORA 4 2012 Gas_Layout 1 18/07/2012 15:21 Page 35

Your Partner... ...For Power

!#% #  '#   % $ ( # ( # $ % ( # #  !# ' %# ! (# !%$  #  !% %&#* !# % % & "&!% $%%  %  !#%  * * )!# #$ % $&# #  ) ! (# %# * &   ( (%%$  ! (#  #  # %  $% #  ( &# (%%$  $  ! (# % $&!! #% % %  # # '#$ % ! (# $ &%  %% $ #%  # * & (#'#  ('# * &  %

        $*    ! ! ) #( & "&(' "! #%)&' & $$"





$&( !+(    











S09 ORA 4 2012 Gas_Layout 1 18/07/2012 15:21 Page 36

Algeria talks to Shell/Exxon on shale

Tanzania gas reserves at 287tcf on new finds

ALGERIA HAS STARTED talks with Shell and ExxonMobil on shale gas exploration in the North African country, the head of state energy firm Sonatrach has said. Italy's Eni last year signed an agreement with Sonatrach to help carry out shale gas exploration, Reuters reported. "We are in talks with Shell and Exxon," Sonatrach chief executive Abdelhamid Zerguine said at a news conference . Sonatrach officials previously said several foreign companies were willing to invest in Algeria's shale gas sector. Algeria wants to develop technology-intensive shale gas and offshore production to help ensure security of supply in the long run, and it currently favours allowing foreign oil majors to help achieve those goals.

MAJOR NEW NATURAL gas discoveries in Tanzania have pushed the reserve estimates up to 28.7 tcf from 10 tcf, Tanzania's deputy energy and minerals minister has said. These latest finds in the country's deep-water gas blocks are attracting new interest from a host of international oil companies especially as the bulk of the country's offshore and onshore gas and oil blocks are yet to be explored, Stephen Masele said. "We are encouraging companies to maintain the current momentum in the gas and oil exploration sector," he said. Tanzania, which is slowly becoming a regional gas hub after a flurry of discoveries, has around a dozen deepsea blocks that are yet to be explored due to disputes over revenue sharing with the semi-autonomous archipelago of Zanzibar. The US Geological Survey estimates that East Africa's coastal region holds up to 441 tcf of natural gas. Tanzania is also trying to boost power generation at gas-fired thermal plants as it seeks to wean its electricity sector away from unreliable hydro power generation as well as the expensive diesel-fired thermal plants. In January, the state power utility raised electricity tariffs by at least 40 per cent citing higher generation costs due to the acquisition of emergency dieselfired thermal plants. The increase mainly affected gold miners and other large industrial power consumers. Currently, Tanzania uses around 200 mmcfd of gas to run thermal plants, but plans are underway to double gas production by the end of 2013, according to Mr. Masele. Other oil and gas exploration companies operating in Tanzania include Canada's Orca Exploration Group, Australia's Beach Energy, France's Total E&P Activités Petrolières and London-listed Aminex.

An aerial view of a shale oil drilling rig.





M 247 2 47 FMS.COM

36 Oil Review Africa Issue Four 2012

Shell claims deep cut in Nigeria flaring SHELL, OPERATOR OF Nigeria’s largest oil fields, said flaring of natural gas at its deposits in the West African country fell by more than 60 per cent in the past nine years. “Flaring dropped by more than 60 per cent from over 0.6 bcf of gas a day to about 0.2 bcf,” the company said, according to Reuters. The decline followed investments of more than US$3bn to build gathering facilities since 2000, Shell said . Nigeria, holder of Africa’s largest gas reserves of more than 187 tcf, flares most of the fuel it produces along with oil because it lacks the infrastructure to process it. Shell has 17 gas projects, including the integration of the Forcados oil and gas development, which will start in the first quarter to 2015, the company said on its website. The projects will cost $6bn when completed, it said. About 45 per cent of Nigeria’s domestic gas demand is provided by Shell, most of which is used to generate electricity in Africa’s most populous nation. Chevron, ExxonMobil, Total and Eni are the other major suppliers.

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 37

Hosted by

A world leader in natural gas

UK | ExCeL London | 8-11 October 2012

Uncover the Opportunities at Gastech Exhibition The Gastech Conference & Exhibition is coming to London from 8 – 11 October at ExCeL, London. Two exciting show floor features at the Gastech Exhibition will offer industry professionals a chance to secure recruitment prospects and professional development, as well as gain unrivalled access to one of the world’s largest networking platforms for the gas industry. Registration and attendance is free for all industry professionals.

Explore New Gas Technologies Technological innovation is a key factor in propelling the global gas industry into the ‘Golden Age for Gas’. That is why we are proud to present the Centres of Technical Excellence (CoTEs) as a returning feature at the Gastech Exhibition.

Candidates - A new career is waiting for you!

Reserve your place at these free to attend seminars online today!

Co-located with Gastech, ignite! is one of the leading Recruitment Shows for the Energy world, supported by influential companies and significant industry bodies. Attend this energy recruitment show to: đƫ Network with key recruiters who are looking to fill positions in the UK and overseas đƫ Attend free training workshops run by our industry partners Register with ignite! for free and meet active employers from: đƫ Saudi Aramco đƫ Fluor đƫ Air Products đƫ SBM Off shore đƫ Qatargas đƫ CB&I đƫ ADGAS đƫ STATS GROUP Register your place online today!

CoTE Partners

ignite! Partners & Sponsors

Once again, we are working with many of the world’s most-respected industry associations and organisations to bring together high-level speakers at our exhibition seminars to provide significant insights and updates about the latest developments in gas technology. Speakers & Chairmen for the 12 seminar streams include: đƫDr. Paul Jukes, President, MCS Kenny and Fellow, Institute of Marine Engineering, Science & Technology (IMarEST) đƫMartin Mayer, Director of LNG Technology, CB&I đƫDr. Philippe Lebrun, CERN (The European Organization for Nuclear Research) đƫGary Tomlin, Principal Consultant, GL Noble Denton đƫDr. Hermann Kremer, VP CCS, Siemens

Energy Recruitment Show UK | ExCeL London | 9–10 October 2012

Free O Registr nline for Induation Profess stry ionals

Register online at

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 38


Over 80 oil companies apply for licences in Uganda ENERGY AND MINERAL Development Permanent Secretary Fred Kabagambe Kaliisa says over 80 oil companies have applied for oil licenses discovered in western Uganda while others have threatened to leave for neighbouring Kenya if the government doesn't expeditiously approve their production licenses. "The discovery of oil in Kenya is being used by some oil companies to put the government in a panic mode," the official was quoted as saying during a seminar on oil for legislators in the country. He said that the Ministry of Energy has so far received production license applications for the Kingfisher, Mputa and Wairaga Nzizi oil discoveries which are under consideration. The government, however, suspended licensing in the country pending enactment of a new law

which will provide for a competitive bidding mechanism for acreages. According to the latest 'Background to the Budget' publication of the ministry of Finance, the government also concluded negotiations with Tullow Uganda for exploration licenses over Area 1 and Kanywataba Prospect and issued a production license over the Kingfisher field within the 2011/12 financial year. The publication added that under the PSA signed between the government and Tullow Uganda for Kanywataba Prospect and Exploration Area 1, both parties agreed among other things on an initial royalty based on progressive incremental production and an additional royalty as a percentage of the value of the recovered reserves. They also agreed on state participation by the government or its nominee at production level,

cost recovery limits for oil and gas production set at different levels and production sharing based on incremental production after deduction of initial royalty and cost recovery. Other areas mentioned by the publication include a signature bonus of US$200,000 and $300,000 respectively upon signing of the PSA to government and each of these two PSA's in addition have provisions for a discovery bonus of $2,000,000mn while all taxes will be paid in accordance with the laws of Uganda. It added that, presently, five out of ten Exploration Areas (EA) in the Albertine Graben have been licensed to international oil companies namely EA 1,2,3A,4B and 5 and the remaining unlicensed areas are receiving remarkable interest from oil companies. Geoffrey Muleme

Lion Petroleum’ s farm-in deal with New Age TAIPAN TAKEOVER TARGET, Lion Petroleum, has agreed a farm-in deal with NewAge (African Global Energy) Ltd for Block 2B onshore Kenya The deal would see NewAge fund 50 per cent of the costs of the proposed work programme on Block 2B and provide 50 per cent of the US$5,875,000 bank guarantee required by the Government of Kenya. NewAge is an independent oil and gas exploration and development company that currently holds licences for 13 onshore and offshore blocks in Congo-Brazzaville, Ethiopia, South Africa and Kurdistan. "The farm-in with NewAge provides additional industry validation as to the prospectivity of Block 2B in addition to a partner with significant technical and financial capacity and extensive experience operating in sub-Saharan Africa," said Taipan director, Charles Watson. Taipan Resources has also issued a progress report on its proposed acquisition of Lion Petroleum, with the takeover expected to be completed on or before July 16, 2012. Lion is an oil and gas exploration company with interests in 9.7mn gross oil and gas exploration acres onshore Kenya, known as Block 1 and Block 2B.

Kenya’s deepwater debut heralds East Africa’s first oil APACHE WILL DRILL Kenya’s first deepwater oil well this August, a prospect that could add a US$70bn crude find to the record natural-gas discoveries along East Africa’s coast. Apache and partners, including Tullow Oil, said the Mbawa well is likely to strike oil based on seismic data and slicks seen on the Indian Ocean’s surface. The drilling is targeting as much as 700mn barrels, a resource valued at twice Kenya’s annual economic output at today’s oil prices. With a 50 per cent a stake in the well, a strike could add more than 10 per cent to Apache’s reserves. “What we are looking at in this well is to see if we can actually change the paradigm” in what’s been a gas-prone area, Tullow Chief Financial Officer Ian Springett said in a phone interview. “It’s a high-risk, high-upside well.” East Africa has become one of the world’s most active exploration areas since Anadarko made the decade’s biggest gas discovery off Mozambique. An oil find would be a boon for Kenya as the commodity is easier to sell than the gas found in neighbouring Tanzania and Mozambique, which will require spending at least $50bn on export plants. The Lamu basin, where Mbawa is sited, may hold as much as five billion barrels, according to one of the well’s partners. The Mbawa seismic study indicates the possible presence of gas and crude, Bob Brackett, an oil analyst with Sanford C. Bernstein, wrote in a recent report.

38 Oil Review Africa Issue Four 2012

Kenya leases all oil exploration blocks KENYA HAS LEASED out all existing oil blocks to exploration companies, according to Energy Minister Kiraitu Murungi. The government has given out the remaining four blocks to international companies, including America's Apache Corp, France's Total SA, Anadarko from the US and China's CNOOC, Mr. Murungi was quoted as saying. "All our 46 oil blocks, including the nine in the deep sea are now contracted out and our offices are currently busy signing productionsharing contracts. The role of the ministry now is to follow up to ensure that the work programmes are implemented," he said on the sidelines of the launch of the Oil and Gas Summit scheduled to start in November. It wasn't immediately possible to obtain a comment from the Energy Ministry. Apache is expected to drill Kenya's first deep-water oil well in three months. "We are going to be doing deep-sea drilling again from September with Apache about 60 km east of Malindi. We are witnessing significant interest since we struck oil in Turkana," Mr. Murungi said. In March, Tullow Oil announced it had encountered oil in its Ngama-1 well in northern Kenya, which it expects to be the largest oil find in East Africa so far.

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 39

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 40


African Petroleum to explore in Sierra Leone AFRICAN PETROLEUM AND Kosmos have provisionally been awarded exploration block SL-4A-10 offshore Sierra Leone. The final award is subject to added negotiations. African Petroleum submitted an application in March 2012, as part of the Sierra Leone 3rd bid round for offshore exploration permits. The company recently got two exploration blocks in Côte d’Ivoire: CI-509 and CI-513. These deepwater blocks cover 2,531 sq km. A 3D seismic programme covering both blocks is under way. African Petroleum also has licenses in Senegal over two blocks: Rufisque Offshore Profond and Senegal Offshore Sud Profond. The area covers 18,277 sq km. The company holds a 90 per cent interest with its partner Petrosen holding the remaining 10 per cent. A 3D seismic acquisition has now been completed on Senegal Offshore Sud Profond covering 3,600 sq km. African Petroleum currently holds a 100 per cent interest in blocks LB-08 and LB-09 offshore Liberia, where it has completed 5,100 sq km of 3D seismic data and where a significant discovery was announced in February 2012 at Narina-1 in block LB-09. Offshore Gambia, African Petroleum holds a 60 per cent operating interest in blocks A1 and A4 where it has completed 2,500 sq km of 3D seismic. This is in conjunction with its partner Buried Hill Gambia BV.

Ophir kicks off Equatorial Guinea trio UK-LISTED OPHIR Energy has started drilling on the first of three planned wells on Block R, off Equatorial Guinea. Ophir said the semi-submersible drilling rig Eirik Raude had started operations and this will see it batch drill the top-hole sections at both the Fortuna East and Fortuna West wells. It will then move to the Tonel-1 location where it will drill the entire well before returning to complete Fortuna West and then Fortuna East. The company expects the entire three-well programme, which is targeting 2.2 tcf of unrisked mean estimated recoverable gross resource, to take between 60 and 90 days to complete. Results from the Tonel-1 well, which is targeting multiple stacked midMiocene targets within a stacked thrust belt, are expected to be released towards the end of the month. Fortuna West and Fortuna East are step-out exploration wells from the existing Fortuna-1 gas discovery targeting multiple stacked prospects of Miocene to Pliocene age.

Tullow hits pay in Ghana wildcat UK INDEPENDENT TULLOW Oil has hit both oil and gas condensate in the Wawa-1 wildcat on the Deepwater Tano licence, off Ghana. Tullow said the well had intersected 20 metres of gas condensate pay and 13 metres of oil pay in the turbidite sand, with samples showing the oil to be good quality between 28 and 44° API. It added pressure data showed the accumulation was also separate from the Tweneboa, Enyenra and Ntomme fields. "Wawa-1 was the first of three important

remaining exploration wells to be drilled in the second half of 2012, to close out the exploration phase of the Deepwater Tano licence,” Tullow’s exploration director, Angus McCoss, said. “It found light oil and gas condensate, trapped separately from TEN and demonstrates once again that liquid rich hydrocarbons are pervasive in this prospective licence.” Wawa-1 was drilled to a total depth of 3322 metres using the semi-submersible drilling rig Atwood Hunter in a water depth of 587 metres

and will now be suspended for possible future use in appraisal and development operations. Tullow plans to drill the remaining two exploration wells, Okure and Sapele, on the Deepwater Tano licence before the end of the year. Tullow operates the licence with a 49.95 per cent stake and is partnered by Kosmos Energy (18 per cent), Anadarko Petroleum (18 per cent), Sabre (4.05 per cent) and the Ghana National Petroleum Corporation (10 per cent carried interest)

Marathon in Gabon re-entry HOUSTON-BASED MARATHON Oil is poised to make its return to the West African country of Gabon after its 2009 exit. Its subsidiary has entered into a farm-out agreement with Total Gabon for interest in its pre-salt Diaba G4-223 license, Marathon announced on 22 June 2012. The agreement has been submitted to Gabon authorities and is expected to close 3Q 2012. The farm-out would grant Marathon 21.25 per cent working interest in Diaba, to be effective 15 June 2012. “We are pleased to re-enter Gabon and join our partners to explore presalt objectives in the Diaba permit,” said Annell R. Bay, Marathon Oil's vice president of global exploration. “This partnership combines the extensive deepwater drilling and completion experience of Marathon Oil, Cobalt and Total Gabon to fully evaluate the potential of this license.” The Diaba license is spread over 9,075 sq km and is located 50 km off Gabon’s southern coast in water depths ranging from 100 to 3,500 m. Exploratory drilling is expected to begin 1Q 2013. Total Gabon will continue to operate the Diaba license with 42.50 per cent interest. Its partners now include Marathon (21.25 per cent), US Cobalt

40 Oil Review Africa Issue Four 2012

International Energy subsidiary Gabon Diaba Co (21.25 per cent), and the Gabonese government (15 per cent).

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 41

S10 ORA 4 2012 E&P_Layout 1 18/07/2012 15:49 Page 42


Circle, Exxoil ready Tunisia spud CIRCLE OIL AND Exxoil are aiming to spud an exploration well in Tunisia sooner rather than later after receiving the go-ahead from local authorities. The pair is looking to start drilling the Bou Argoub-1 (BAB-1) well in the South West Belli area early in the second half, Circle said. The well will be situated on the Grombalia permit near to the Belli, El Manzah and Beni Khaled fields. Total depth is expected to hit 1,350 m and is targeting a fault-bounded structural culmination crossing two vertically stacked fractured carbonate reservoirs, the Eocene Bou Dabbous Formation and the Late Cretaceous Abiod Formation. Exxoil Tunisie operates the Grombalia permit with a 65 per cent slice while Circle holds the balance.

42 Oil Review Africa Issue Four 2012

Wintershall’s Libya output at 70,000 bpd GERMANY’S WINTERSHALL IS currently producing just over 70,000 bpd of oil in Libya, or around 70 per cent of its output level from before the civil war in the North African country, according to a senior company official. Speaking at a conference in London, Wintershall vice president Klaus Langemann said the company's output was being restricted by infrastructure constraints and that production would rise once a new oil export pipeline in Libya was completed. "We are at more than 70 per cent of our original production capacity, and we are producing a little beyond 70,000 bpd," Langemann told the conference. Before the unrest in Libya began in February 2011, Wintershall was producing around 100,000 bpd from its fields in the country. Langemann said the company's production facilities suffered no damage during the civil war, and that it was able to boost production up to around 50,000 bpd within a week of the end of the war. He also said that Libya had asked Wintershall to help build a new export pipeline together with the state-owned NOC and Agoco. "We acted quickly, and the pipeline is now under construction," Langemann said. "It will be finalised early next year." This will help the company restore its pre-uprising output, Langemann told Platts later on the sidelines of the conference. "It's just a question of pipeline infrastructure," he said. "The wells could produce more -- indeed our reservoir engineers told us the shut-in had helped the reservoir 'relax', which is a good thing."

S11 ORA 4 2012 Downstream_Layout 1 18/07/2012 16:22 Page 43

The Baker Hughes Rig Count tracks industry-wide rigs engaged in drilling and related operations, which include drilling, logging, cementing, coring, well testing, waiting on weather, running casing and blowout preventer (BOP) testing.



Land OffShore Total 41 0 41 1 11 12 0 0 0 2 0 2 0 1 1 0 0 0 0 2 2 0 0 0 4 0 4 0 4 4 0 0 0 2 0 2 10 0 10 0 0 0 0 0 0 0 1 1 8 11 19 0 0 0 0 0 0 0 2 2 2 0 2 3 0 3 73 32 105

From Last Month 15 -1 0 0 -1 0 0 0 0 0 0 0 3 0 0 -1 4 0 0 0 1 3 23



Land OffShore Total 26 0 26 2 11 13 0 0 0 2 0 2 0 2 2 0 0 0 0 2 2 0 0 0 3 1 4 0 4 4 0 0 0 2 0 2 7 0 7 0 0 0 0 0 0 0 2 2 5 10 15 0 0 0 0 0 0 0 2 2 1 0 1 0 0 0 48 34 82

Land OffShore Total 31 0 31 0 7 7 1 1 2 2 0 2 0 1 1 0 0 0 0 1 1 0 0 0 6 2 8 0 1 1 0 0 0 1 0 1 0 0 0 0 0 0 0 1 1 0 1 1 2 10 12 0 0 0 0 0 0 0 0 0 3 1 4 1 0 1 47 26 73 Source: Baker Hughes

E&P companies explore offshore Namibia’s hydrocarbon potential RECENT GIANT DISCOVERIES offshore West Africa, including the Jubilee discovery offshore Ghana and additional discoveries offshore Angola, have sparked new interest in the West Africa's Atlantic Margin. Oil and gas companies, including majors BP, Petrobras and Repsol, are testing Namibia's offshore hydrocarbon potential. Namibia's largest offshore commercial hydrocarbon discovery to date is the Kudu gas field, which is estimated to hold 1.3 tcf of proven reserves and an upside of 20 tcf. Operator Tullow Oil plans to make an investment decision for Kudu later this year, meaning initial production from Kudu, which could mean the delivery of gas and power generation by the end of 2015, Tullow said. Companies exploring Namibia believe the country has potentially significant hydrocarbon resources offshore due to its common geological history and similar petroleum systems to that of Brazil, where a number of large pre-salt offshore hydrocarbon discoveries have been made.

Chariot Oil & Gas has reported that the same source rocks are present offshore Namibia as in Brazil with respect to depositional sequences, source rock type and oil fingerprinting. Additionally, geochemical analyses of Kudu gas indicate an over-mature oilprone, lacustrine source rock is the origin of the gas. "Similar source rocks are identified all around the South Atlantic margins Ocean Rig drillship to drill for Chariot offshore Namibia. with recent discoveries pushing proven areas both north and south from the traditional plans to drill to a total depth of 3,100 using Ocean 'salt basins'," according to Chariot's website. Rig Poseidon (UDW drillship) and estimates The company estimates its acreage to hold drilling will take two months. 19.4bn barrels of gross mean unrisked Partners in Southern Block 2714A include BP prospective resources. and Petrobras, according to Chariot's June 2012 Chariot is to drill the Kabelijou (2714/6-1 well) investor presentation. Nimrod is estimated to to test the Nimrod prospect in the Orange Basin in contain gross mean unrisked prospective resources Southern Block 2714A. Drilling will take place 77 of 4.9bn barrels of oil, including 1.2 bn barrels net km offshore Namibia in 360 m of water. Chariot to Chariot.

Oil Review Africa Issue Four 2012 43


S11 ORA 4 2012 Downstream_Layout 1 18/07/2012 15:58 Page 44

Egyptian Refining to commence on $3.7bn project HAVING ACHIEVED FINANCIAL close, Egyptian Refining Company (ERC) are to begin developments on a US$3.7bn Greenfield petroleum refining upgrade project The project, for which planning has been underway for more than five years and financing includes $2.6bn in debt and a further $1.1bn in equity, is considered to hold numerous advantages for the surrounding Egyptian economy, environment and people. ERC plan for the refinery to provide an excess of 4.1mn tons of refined products and high-quality oil derivatives annually, including more than 2.3mn tons of Euro V diesel, which is recognised as the cleanest-burning diesel fuel globally. By establishing the infrastructure within the country it is expected that Egypt’s current diesel imports will be cut by 50 per cent, as well as $300mn being generated in direct annual benefits as a result of avoiding transportationrelated expenses. Citadel Capital founder and chairman Ahmed Heikal said, “ERC is one of Africa’s largest-ever project finance deals; it is also a transformative development for the Egyptian economy. The financial close of ERC confirms to international investors and the global community that Egypt is open for business. The signal this sends is huge.” ERC chief executive officer Thomas Thomason added: “To keep the lender group and all other stakeholders engaged during this period is a testament to the economic strength of the project.” Environmental concern has been a priority for ERC. In addition to utilising advanced and environmentally stringent technologies, such as ConocoPhillips, Bechtel, Axens, and KTI, the planned refining process is expected to reduce the annual sulphur dioxide emissions by 29.1 per cent, thereby improving the quality of the air in the Greater Cairo area. Additionally, ERC chairman Abdelfattah Abu Zeid has announced that the planned infrastructure will provide substantial job opportunities for Egypt, requiring up to 10,000 employees during periods of peak construction.

Nigeria, Vulcan sign $4.5bn refineries deal NIGERIA HAS SIGNED a memorandum of understanding with Vulcan Petroleum Resources for a US$4.5bn project to build six refineries with a combined 180,000 bpd capacity. Vulcan aimed to have two of the refineries finished in under a year, they said. Although Nigeria is Africa's top crude oil producer its refineries are in such a state of disrepair that they meet only a fraction of its domestic fuel needs. Its crude is shipped out and costly refined products imported. "Each modular refinery, when completed, will refine up to 30,000 bpd of crude oil and produce up to five million litres of petrol, diesel, kerosene and LPFO (liquid petroleum fuel oil)."said Yemi Kolapo, spokeswoman for the trade ministy. Nigeria's existing plants have a total capacity of 445,000 bpd, but are running at less than three-quarters of that capacity. Chief Edozie Njoku, chairman of Petroleum Refining and Strategic Reserve, Vulcan's partner in the joint venture, said that the aim was to distribute the sites in different regions of Nigeria. "We have to look at where the crude pipelines are. We need to plant them so that everyone is favoured, but in the north the pipelines only go to Kaduna (in central Nigeria)," he said. "Two of them are going to be finished in about a year. It's not rocket science to have all six ready should take about 30 months," he added. Nigeria has two refineries in its main oil-hub Port Harcourt and one each in the Niger Delta town of Warri and in Kaduna. Some Nigerians are sceptical about building more refineries when existing ones are under capacity, but Njoku dismissed this. "The refineries already in Nigeria are on their last legs. They will cost the country millions to turn around. Nigeria needs new refineries," he said. A lot of MoUs are signed with Nigerian authorities that go nowhere, but Njoku said he was confident the projects would happen. "The only thing we need for this to be done is our permits from the government ... They have shown enough honesty that they want these refineries to be built," he said.

Fluor wins tar separator replacement project FLUOR HAS BEGUN work on a new project for Sasol Technology in South Africa for its Tar Separator Project. The new contract is for engineering, procurement and construction management (EPCM) services for the replacement of 24 duplex stainless steel separator tanks. The undisclosed contract value was booked in the second quarter. "Fluor is pleased to continue its ongoing 45year relationship with Sasol for this important new Tar Separator Project," said Peter Oosterveer, president of Fluor's Energy & Chemicals Group. "The tar separators feed all four phases of Sasol's Secunda complex and we're honoured by the trust Sasol has placed in Fluor to perform this project."

The purpose of the gas liquor separation units is to separate various gaseous, liquid and solid components from the gas liquor streams that originate in the gasification, gas cooling, rectisol and phenosolvan units. Engineering is under way with construction to begin in the fourth quarter of 2012. The 24 separation units weigh between 80 and 100 tons each. Construction will begin using shifts working 24-hours-per-day, seven days-per-week to shorten the construction schedule and to enable ongoing production while the project is under way. Construction is expected to be complete by mid-2015. Fluor originally performed as the EPC firm

for Sasol's 2 & 3 plants in Secunda in the 1970s. The facility remains the largest coalto-liquids facility in the world to this day. More recently, Fluor executed the Secunda Growth Programme for Sasol that included a portfolio of projects totaling US$2bn in total installed cost.

South Africa liquefied petroleum gas storage plant to start in 2014 CONSTRUCTION OF SOUTH Africa's largest liquefied petroleum gas (LPG) storage facility will start early in 2013 and the plant will be operational in late 2014, the project director has said. The project, aimed at reducing LPG shortages that regularly hit Africa's largest economy, will cost US$143mn, with imports coming from the Middle East, Gulf of Guinea and Angola. "We will be commissioning the facility at the end of December 2014," said Barthlo Harmse, of Sunrise Energy, the company developing the site

44 Oil Review Africa Issue Four 2012

next to the Saldanha Bay port on the country's west coast. Sunrise Energy is a joint venture between Ilitha Group and state-owned financier Industrial Development Corporation. South Africa is diversifying its energy mix away from electricity to alleviate pressure on state utility Eskom, which is operating on razorthin capacity. An estimated three per cent of the country's 49mn people use LPG and the intention is to have an additional one million users over the next five years.

S11 ORA 4 2012 Downstream_Layout 1 18/07/2012 15:58 Page 45

Turn The



Exterran Nigeria Limited offers our customers a world of energy solutions through a comprehensive portfolio of products and services. We offer the Total Solution, a single point of contact to design, fabricate, install commission, operate and maintain your oil and gas facilities with worldwide expertise in: Natural Gas Compression System and Services Natural Gas Processing and Treatment LPG and NGL Fuel Gas Conditioning for Power Plant Gas Flare out Solution

Oil and Gas Production Facilities Gas-fuelled Power Generation Systems Operation and Maintenance services Integrated Oil and Gas Solutions Aftermarket OEM spare parts and Manpower Services

Our pre-engineered and modular plants, combined with our local presence and highly experienced personnel result in faster project delivery times and better Return on Investment to our customers.


S11 ORA 4 2012 Downstream_Layout 1 18/07/2012 15:58 Page 46

GE sign long term CSA with Angola LNG

Kenyan discoveries threaten Uganda refinery plans UGANDA IS PROCEEDING with its plans to build a refinery in Kabale-Buseruka, in the Hoima District. However, new discoveries made by Tullow in Kenya could somewhat upset Kampala's aspirations. CNOOC is negotiating with Uganda to invest in Further down the line, other the country's first oil refinery. projects in the region could also provide substantial competition. Although, acccording to BMI (Business Monitor International), Uganda is well placed to obtain a small-scale 20,000 bpd refinery in the near future, we will have to wait longer for the dust to settle and establish which country is best placed to become East Africa's undisputed downstream leader. Petroleum Officer-Refining at Uganda's Ministry of Energy and Mineral Development, Irene Batebe, said that the country's plans to build the 20,000 bpd refinery would be developed under a Public Private Partnership (PPP) and that 29sq km had been earmarked for its construction. Recent oil finds in Kenya are widely believed to threaten the project as Nairobi could leverage these discoveries to reassert its downstream prominence.

GE OIL & GAS have signed a long-term contractual service agreement (CSA) with Angola LNG, operator of Angola's first LNG liquefaction and export facility. Under the terms of the contract, GE's services will 'increase overall plant efficiency' and 'provide maximum availability' for the plant's key gascompression equipment. GE's services will pertain to two GE gas turbine-driven compression trains that are used in Angola LNG. According to GE, it will provide continuos technical assistance and provide maintenance for Angola LNG. GE will provide an on-site team of GE field services engineers for these services, while day-to-day service operations will be supervised by a local contractual performance manager. The US$10bn Angola LNG project is owned by a consortium comprising of Angola's national oil company (NOC) Sociedade Nacional de CombustĂ­veis de Angola (Sonangol), Chevron, Eni, Total and BP. The plant is based in Soyo, within the Zaire province and will have an export capacity of 6.8bcm per year. It will source gas from producing offshore fields in Blocks 0, 1, 2, 14, 15, 17 and 18, which are all located in the Lower Congo Basin. According to Angola's oil minister, JosĂŠ Maria Botelho de Vasconcelos, Angola LNG is set for commercial production in June 2012. Associated gas from offshore oil discoveries, which were made in the early 2000s, has been the main addition to Angola's proven gas reserves. Data from the US Energy Information Administration (EIA) shows Angola's gas reserves to have significantly jumped from 50bcm in 2006 to 270bcm in 2007; continued exploration in Angola makes it likely that discoveries could bring this figure up to 310bcm by 2021. However, low domestic consumption of gas means that Angola will have an excess capacity of gas.


Covering Oil, Gas and Hydrocarbon Processing

Make sure you visit our new website with updated news coverage in Africa

You can also view our digital edition of this issue on 46 Oil Review Africa Issue Four 2012

S12 ORA 4 2012 Technology A_Layout 1 18/07/2012 16:00 Page 47

S12 ORA 4 2012 Technology A_Layout 1 18/07/2012 16:00 Page 48


This article, by John Spain, Quickflange, will look at recent developments in pipeline connections and an alternative to welding that is growing in popularity.

Securing effective piping connections in

Africa’s operations W

HETHER IT IS onshore or offshore, upstream or downstream, having a robust and effective pipeline infrastructure is a key element of African oil & gas operations. This doesn’t just apply to the subsea pipelines that transport hydrocarbons from subsea tiebacks to onshore hubs or the thousands of kilometres of pipelines that transport oil, gas and other associated products around the region (the 4,400 km Trans-Saharan Gas Pipeline and the 1,070 km Chad-Cameroon Pipeline being two such examples). It also refers to the complex network of noncritical piping that on offshore platforms can support everything from fire fighting, cooling and water injection through to compressors and scrubbers, and onshore can be responsible for process control, the drainage of waste products and many other roles. Many older offshore platforms and onshore plants, however, face continued challenges with the maintenance and upgrading of their pipeline infrastructures with a growing threat of corrosion, leaks and generation deterioration. This in addition to recent new pipeline investments in Africa linked to capital projects such as the new LNG plant in the northern Zaire Province of Angola which will see three export pipelines transporting gas from offshore fields; or

the Cameroon LNG Project, jointly owned by GDF Suez and Cameroon’s SNH. In all these cases, an effective engineering strategy towards piping connections, modifications, repairs and upgrades is central to African oil & gas operations today – both onshore and offshore. Typical installations might include pipework and new spool tie-ins; the replacement of existing flanges or fitting flanges in restricted areas; the replacement of sections of damaged/corroded piping; or re-routing and de-bottlenecking. This article will look at recent developments in pipeline connections and an alternative to welding that is growing in popularity.

The traditional approach - welding For many piping managers and engineers in Africa, the prominent technology for piping connections and installing flanges is that of welding.

For many piping managers and engineers in Africa, the prominent technology for piping connections and installing flanges is that of welding.

Figure 1 outlines the simplicity of the installation process and a cutaway of the flange.

48 Oil Review Africa Issue Four 2012

While few would deny the enhancements in welding over the last few years – developments in electron beam, friction, or induction welding, for example – welding still, however, comes with limitations, chief among these being the need to access heat-based energy sources. These might include a gas flame, electric arc, laser, electron beam, friction or ultrasound.

What does this mean in practice? Firstly, there is the issue of safety. With regulators particularly stringent in regard to safety, the fact that welding is ‘hot work’ based and requires access to gases, ignition sources and flames brings with it a number of potentially expensive and time consuming requirements. This might include testing for flammable gases, identifying ventilation sources, and securing permission to carry out hot-work – something that can take up to two weeks. Once the goahead is given there are also the accompanying training and accommodation costs for the relevant personnel. In addition to the impact on time, cost and resources, there is also the potential impact welding can have on production. Where piping lines cannot be temporarily isolated, there might be occasions where production and operations must be completely shut down at significant cost to the operator.

S12 ORA 4 2012 Technology A_Layout 1 18/07/2012 16:00 Page 49


S12 ORA 4 2012 Technology A_Layout 1 18/07/2012 16:00 Page 50

It’s with these issues in mind that African operators are beginning to consider more flexible and lower impact solutions when it comes to piping connections. Top of this list is cold operations.

Fig 2. The cold-based Quickflange solution.

The move towards cold operations Cold work solutions provide the same benefits as welding in the form of a secure, leak-free and pressure tight connections but dispense with the drawbacks with no requirements for ignition sources, flames and hot work. Our cold-based Quickflange solution, for example, is a modified, standard weld neck flange, with a patented internal groove pattern machined into it. It is machined in such a way that it can slide onto the pipe without the use of heat or ignition sources with a hydraulic tool then used to activate the flange. The result is a mechanically robust flange-to-pipe and metal-to-metal connection within minutes. Figure 1 outlines the simplicity of the installation process and a cutaway of the flange and figure 2 the product itself. There are a number of significant benefits for African operators from cold work solutions, such as the Quickflange. Firstly and most importantly to operators, there is no compromise on quality as compared to welding. A good quality piping connection not only ensures the quality of the line. It also ensures that there are less likely to be defects, cut outs and repairs that can have a negative impact on the efficiency and productivity of the pipeline. In the case of the Quickflange, the connection is highly secure with third party qualification having extensively proved that the process has no detrimental effects on pipe or performance. With the Quickflange, the cold-forging tool forces the pipe wall into the grooves, simultaneously affecting the seal and grip on the pipe. The result is that the assembled joint is stronger than the flange itself and is energised by the natural relaxation ‘springback’ of the deformed pipe material forced into the groove modification in the flanges. The two processes generate huge contact pressures, forming a seal and structural grip on the pipe. Crevice corrosion is also tackled through the application of an epoxy paste which sets hard to a metal-like consistency. The metal-to-metal seal also ensures that there are no gaskets that can be affected by temperatures and fluids and the solution can often avoid the problems of ‘difficult-to-weld’ materials, such as CuNi, Monel and Duplex. The Quickflange is compatible with all materials, such as Carbon steels, Stainless steel F316, 6Mo and Monel, Duplex, Super Duplex and Copper Nickel (CuNi), as well as sizes from 1” up to 12”. Another benefit of cold work operations is improved safety. As the Quickflange is slid over the pipe end and activated with a cold-forging tool, no spark or heat is generated during the activation process, resulting in increased safety, flexibility and speed and less onerous permitting applications as in the case of welding. With the Quickflange, the whole connection process can take up to 15 minutes for the largest sizes (12”) and far less for smaller sizes, irrespective

50 Oil Review Africa Issue Four 2012

to the pipe end with crevice corrosion protection and then tested with a flange weld tester.

The last few years have seen the continued rise of coldbased operations.

of pipe wall thickness or material. The fact that the Quickflange is modified from a standard flange and is self-contained also means that it can be shipped and delivered within hours. These speeds are one reason why cold-based operations can lead to cost efficiencies as well as dramatically reduced personnel requirements compared to traditional welding. Finally, there is the flexibility of the Quickflange with installation able to take place in contained areas with no impact on production and little support equipment required.

Cold-based operations in practice The last few years have seen the continued rise of cold-based operations. The Quickflange pipe connection solution, for example, has had over 2,500 applications worldwide and is used in a wide variety of scenarios. Recent examples include the replacement of 30 3” flanges at an onshore Steam Assisted Gravity Drainage (SAGD) plant, where the installation time for the new flanges, including the cutting of the old flange and the setup time in getting the equipment into the water separator vessel, was just 25 minutes. The installation of two Quickflanges on the discharge line of a fire water jockey pump at an offshore accommodation platform in the Middle East also significantly reduced the normal work scope and time required for connecting flanges to utility piping. Another example is the installation of the Quickflange on an offshore platform in response to corrosion issues on a flare header drain, with the entire activation and testing taking place within one shift. With the location of the required repairs in an area of limited access where no hot work was allowed, the 12” Quickflange solution was applied

Going subsea Having made such a major impact topside, Quickflange is also taking its technology subsea, where the need for safe, cost effective, flexible and quick connection solutions is every bit as critical and where deepwater production is particularly prevalent in offshore Africa. The latest World Deepwater Market Report from analysts Douglas Westwood, for example, forecasts a 90 per cent growth in deepwater expenditure between 2012 and 2016 with 72 per cent of this spend predicted for Africa and the Americas. In the case of subsea operations, pipeline repair time is vital with significant costs relating to subsea operations, divers and support vessels. There are also the challenges of underwater welding where hyperbaric welding, for example, requires an expensive chamber, large support equipment, and costs which increase proportionately to depth. With its compact size at up to 60 per cent shorter than other sleeve connectors, the Quickflange will require less pipe preparation especially in regard to coating removal and the simple activation process will enable divers to install a Quickflange quickly and efficiently. Initial testing subsea has already taken place in partnership with Brazilian operator, Petrobras, where our solution was deployed and activated within a specialist water tank with divers supporting the installation process. The solution is also being tested at the National Hyperbaric Centre in Scotland, simulating various water depths.

Unprecedented challenges African operators today are facing unprecedented challenges in guaranteeing the integrity of their pipeline infrastructures as they face ageing platforms and piping and new infrastructure investments, while at the same time needing to guarantee the economic delivery of oil and gas from reservoir to refinery and beyond. The emergence of cold work solutions as an alternative to welding couldn’t have been better timed. ■

S13 ORA 4 2012 Technology Power_Layout 1 18/07/2012 16:01 Page 51

OVERESTIMATING OIL AND gas reserves has the potential to cause significant damage to companies’ financial security. Recent cases from the UKCS and beyond have shown that this is a very real scenario, with far-reaching consequences, particularly if information relating to the estimate data is not readily available. International oilfield services company Reservoir Group, has announced the launch of Reserves Guard, designed to secure this vital information, ensuring it is easily accessible if required by auditors. The product, showcased at the 74th EAGE Conference & Exhibition in Copenhagen, has been brought to market by Interica, a new entity formed by Group members InfoAsset and Enigma Data. Its purpose is to provide a consolidated information management service to the global oil and gas industry. Currently, operators are required to submit reports in order to book their reserves’ estimates, however the underlying data that provides the foundation for these reports is not always managed or filed consistently. In some cases, the evidence behind these reports can be requested by an auditor, often expected within a matter of days. Reserves Guard tackles this by providing a framework for geophysicists, geologists and reservoir engineers to submit their data by asset and region. The information is locked down by individual business units before being managed centrally, allowing data to be accessed quickly and with ease. Simon Kendall, managing director of the Group’s geosciences and data services business, said: “Overstating oil and gas holdings or failing to check the accuracy of reserves bookings can have a significant impact; not just with regard to the damage it can cause to a company’s reputation, but also in terms of affecting overall market rating. “This is not just a company specific challenge - it is an industry-wide issue. With global oil and gas reserves continuously reducing, the threat of diminishing supplies means the booking process has assumed greater importance than ever before. Furthermore, if estimation data cannot be found rapidly, or is inaccurate, there is a risk that certain staff within oil companies’ could find themselves in the firing line. “Recognising this, we have launched Reserves Guard, a control system designed to provide more rigorous enforcement of information. “Interica is transforming the data control landscape within the worldwide energy sector. We have harnessed the attributes and achievements of InfoAsset and Engima Data, creating a new hub of information management excellence. Companies can rest assured that we will deliver secure, innovative solutions designed to support the global oil and gas industry’s business processes and companies’ own data organisation procedures.”

Hardbanding offers solution for harsh drilling environments HARDBANDING SOLUTIONS, A business unit of Postle Industries, offers Duraband®NC for HPHT, sour gas, highly deviated and geothermal wells. Drilling these types of wells can be very hard on hardbanding and drill pipe tool joints. In addition, casing can show excessive wear. In these types of wells, typical hardbanding products that contain cracks frequently result in spalling and chipping caused by unwanted materials getting into and under the crack. This requires premature removal of the drill pipe for repair and re-application of the hardbank, adding extra costs to any drilling operation. Duraband®NC

Non-cracking Duraband NC is the ideal solution. It is the first product ever developed offering maximum protection that is applied 100 per cent crack-free. Without cracks, high temperatures, steam, abrasives, and drilling fluids cannot penetrate into, and underneath the hardband. It offers superior wear resistance, longer down hole life thereby reducing drilling costs. Duraband NC it is the only product to be certified for reapplication over itself and certain other products. The cost of reapplication is substantially reduced since it does not have to be removed. With other hardbanding products, the cost of reapplication can be three or four times higher since they have to be removed before re-application

For oil and gas fire safety PARADIGM FLOW SERVICES has launched an innovative system for cleaning safety critical fire mains in oil and gas installations. Pure-Flow can be injected into fire mains systems while pressurised, making it possible for the first time to deal with corrosion accumulation without shutting down operations. Corrosion and marine growth in offshore fire mains is an industry-wide issue, particularly in ageing assets where the pipework can be more than 25 years old. Paradigm has launched PureFlow to tackle corrosion caused by bacteria, which can restrict water flow, thin pipeline walls and also cause blockages in deluge

nozzles. Pure-Flow is a practical-to-use chemical for the remediation of fire mains and is also environmentally friendly. Using a pioneering deployment method, Paradigm can inject the chemical treatment and take debris from a live fire mains system whilst maintaining the system pressure. Paradigm has developed a unique method of generating the chemical solution in-situ which is then injected into the live fire mains in low concentrations. The chemical then rapidly removes biofilm and marine growth deposits with no need for dismantling the pipework, as is the case in traditional methods of fire mains

remediation, such as high pressure jetting. If there are instances where isolation valves don't work, these would have to be removed and treated separately before treatment of the fire mains could commence. This new solution from Paradigm can be injected live into the system at any time throughout operations even where the ring main valves no longer isolate. This provides a cost-effective solution as deluge and fire mains systems can be maintained online and even operated if required during the work. The Pure-Flow solution degrades quickly into sea-salt after use and is approved for use in environmentally sensitive areas.

Oil Review Africa Issue Four 2012 51


Reservoir Group launches reserves guard, enabling E&P firms to protect their economic health

S13 ORA 4 2012 Technology Power_Layout 1 18/07/2012 16:01 Page 52


Rent or buy? That’s the question that has to be asked after the need for an engine generating set has been identified, and its size decided. The industry itself can help.

Power generation today:

rent or buy? D

IESEL-POWERED GENERATING sets of the size used in oil/gas prospecting and production are, rightly, costly items of long-lasting equipment. Often the question arises whether it is best to purchase and install a genset from new, or to hire it. Sometimes a handy third option – used-plant purchase – is available, too, but not often in Africa’s booming power markets these days, especially where energy development is taking place.. We checked top manufacturers’ websites in the 100-3000 kVA range – more than adequate for most oil and gas purposes – and found that many now often a rental option, and provide sound costbased arguments for and against it too. “Ask your dealer” is the normal bottom line. At the same time we noticed that general plant-rental operators, who deal with gensets regularly all over the world, argue convincingly from their own point of view, sometimes providing a series of handy online calculating tools to help you decide. An easy-to-use example from the construction-orientated European Rental Association can be found at At the huge Intermat building trade fair held in Paris earlier this year this was evident along with a handy single-page summary on Total cost of ownership of construction equipment, one of the Guidance Documents coming from the ERA’s Brussels-based Committee on Equipment Technology. This very user-friendly document can be

Tanzania Electric Supply Co signed a large contract with international genset hirers Aggreko last year.

downloaded from the site. It covers both first- and second-priority deciding issues relevant to all stages of ownership of a capital item like an engine generating set: acquisition; operations and maintenance; and divestment. Gensets usually have very good residual values when energy businesses move on anywhere in SSA.

If time is available to ship in a replacement or add-on (expansion) facility the hire option may be the optimum one. Reliable output is indispensable

The key to making the right decision with a genset is to have on hand accurate information about past demand patterns and reliable estimates about future use.

52 Oil Review Africa Issue Four 2012

However the sort of large static sets used in today’s oil and gas industry, often matching (paired) and nearly always fuelled with diesel (associated gasbased operations only become possible – and not always - once the facility is up and running) are usually a category above the offerings of mobile contractors’ plant. Whether installed for prime (24/7) or standby service reliable output is invariably indispensable for coping emergency conditions, such as when the mains supply fails or a major process interruption is experienced on the rig. For this reason the case is usually skewed towards an outright purchase. But if time is available to ship in a replacement or add-on (expansion) facility the hire option may be the optimum one nevertheless. Large gensets with all their ancillary gear (tropicalised sound-attenuating housing, control and instrumentation facilities, fuel tankage and so on) can easily reach six-figure dollar

S13 ORA 4 2012 Technology Power_Layout 1 18/07/2012 16:01 Page 53



S13 ORA 4 2012 Technology Power_Layout 1 18/07/2012 16:01 Page 54

sums in apiece, so for temporary use or emergency, a hire contract may be the best solution. This was certainly the decision of Tanzania Electric Supply Co last year when two very large static sets were needed to compensate for seriously low river flows at their Tegeta and Ubungo hydro plants last year. So a large contract was signed with international genset hirers Aggreko plc, a specialised company possessing excellent service facilities nearby in the Arabian Gulf, and one which the utility already had positive experience of. Presumably such necessities will disappear when more offshore gas becomes available for TANESCO’s use! One of the key factors influencing this decision was that it takes time to adequately size and install engine generating sets like these on an outrightpurchase basis. No reputable manufacturer would supply on an off-the-shelf basis without taking full account of all the operating circumstances, which could mean several site visits. This is why several offer different ranges of equipment for their rental and outright-sale markets. Maintenance requirements including personnel vary significantly, for example. Generally the hire option is indicated whenever the increase in demand for power is predictable but temporary. The keys to resolving the problem are a very thorough analysis of costs, including some – like opportunity ones (how else could this

expenditure be used?) - which are not so obvious to the busy site manager who is more accustomed to technology than finance. And making a realistic estimate of how long and how often the genset will be needed; allow for a huge under-estimate on the second say the experts at the wellhead.

On hand accurate information essential To achieve all this it is vital to have on hand accurate information about past power demand patterns, and reasonable estimates of how these are likely to change as the operation grows. Therefore, obtain basic data about all the costs involved – initial purchase and/or rental, usage in hours per year and therefore fuel consumption, servicing etc. Then calculate the full and comparable costs of operation over the expected time, according to which option is taken. Remember that with rental maintenance costs are usually built into the package – but what about the downtime this will bring with it? Then compare all the costs anticipated, building in weighting factors such as the need for versatility and, above all, operating safety. And decide whether to rent or buy your new genset on the basis of what you think is likely to happen. The really important thing is to get the plant onto the site in working condition as soon as possible. Of course, a third option may turn out to be

Total costs associated with owning an engine generating set include the number of items you commit to when you make a purchase, regardless of how many hours you will require it to run.

the very best one, and that is to acquire goodquality used equipment, Gensets of most sizes used in manufacturing premises turn up regularly in the catalogues of captial equipment auctioneers such as Ritchie Bros who frequently hold sales in Jebel Ali, Dubai. ■

At Ny Nynas, ynas, we’re passionate abou about ut every ything to do with power everything power..

Need to talk to a transfo transformer ormer oil supplier who business? ess? One who’s who’s local enough understands your busine global al enough to have the to be near you, yet glob expertise you need. Get in touch. www

54 Oil Review Africa Issue Four 2012

S13 ORA 4 2012 Technology Power_Layout 1 18/07/2012 16:01 Page 55

THE TRADTIONAL METHOD of using pen and paper to manually record and manage safety and inspection procedures is being replaced by automated Inspection and Safety Compliance Management (ISCM) systems. Companies have thousands of pieces of equipment, ranging from rigging to fall protection. While certain equipment requires daily inspection, others need to be inspected on an annual basis and some require recertification. Knowing which inspection criteria to apply for each piece of equipment is a process that could easily become unmanageable. To this end, Field ID is an industry leading safety compliance solution that combines electronic identification, inspection and reporting to solve the problems associated with inspection and safety compliance management. Increasing accuracy and safety, it also saves time and money while removing the “guesswork” from compliance management. Anchor Testing & Rigging Services (TRS), a subsidiary of the Anchor Group, the sole distributor of Field ID locally, recently introduced the system to the African market

at the Oil & Gas Africa Expo earlier this year in Cape Town. “It is vital for our clients and the rest of the market to realise how critical it is to ensure that the correct health and safety measures are in place. I hope that by making this offering available, we are able to educate and motivate the industry to replace their outdated security and filing systems,” says Johan Kruger, Anchor TRS Managing Director. In use by Rolls-Royce, Rio Tinto and Goodrich, Field ID has also been implemented at a large internationally operating engineering company based in Cape Town. Their old paper-based inspection registers and product certificates have been replaced by an internet accessed system allowing safety officers to identify and track all safety critical equipment and to view the scheduling and outcome online. Inspections are completed using handheld devices which indicate the exact standard to apply while guiding the user through the process. Certificates are uploaded directly to the company’s online register for immediate viewing. Simultaneously the software will notify the

safety officer when future inspections are due, ensuring compliance with the Occupational Health and Safety Act. “The Field ID technology has recently been updated and can now be used on iPads and iPhones. Soon we will also provide Field ID on Android smart phones and tablets,” says Jesse Kohl, Digital Marketing Manager at Field ID . The main fea tures and benefits of using Field ID: 6 No inspection and audit paperwork 6 Chance for human error removed 6 Quick identification and timesaving 6 Web and mobile access to safety reports at any time 6 Daily backups 6 Real-time visibility into safety 6 Automated notifications “All Anchor TRS staff members have undergone Field ID training and are equipped to assist clients with upgrading to, and maintaining electronic ISCM systems,” Kruger concludes.

WHEN YOUR MISSION IS MAKING MEDICINES THAT SAVE LIVES, FAILURE’S NOT AN OPTION. ESPECIALLY POWER FAILURE. Tests are performed, results compiled and production lines roll. Every day, a leading U.S. pharmaceuticals innovator makes the products that treat serious and life-threatening medical conditions. Loss of power for even a short time could cost a production run … and hope for those who need help now. For the health of this company and its customers, KOHLER backup power solutions are the best medicine. With KOHLER, the power stays on because the people behind the products are on. Always. You can’t make breakthroughs in medicine if you’ve got breakdowns in power. Which is why so many people trust KOHLER to come through. Without fail.

Tony Arroyo of Kohler prescribed two 2,000 kW KOHLER® generators and KOHLER switchgear to protect the productivity of a major pharmaceuticals maker.



MEDIUM VOLTAGE | STANDARD AND REMOTE RADIATORS | PACKAGING | CONTROLS Call us at +33 149178300, e-mail, or check out KOHLER®, ON™ and the color green are trademarks of Kohler Co.

Oil Review Africa Issue Four 2012 55


Field ID: latest technology in safety compliance management and inspection

S14 ORA 4 2012 Technology C_Layout 1 18/07/2012 16:02 Page 56


There’s a smarter way to work using marine access.

Offshore access bridges

the gap T

HE EVER INCREASING demand for oil and gas reserves from fast-growth economies in regions such as Asia, coupled with the technological advancements being leveraged by many companies has seen an increase in the number of operators developing resources in increasingly challenging environments such as the deepwater offshore. Meanwhile, production from many existing fields is in decline, with a greater number of marginal prospects being exploited as a result. These challenging resources often require greater investment; in research and development, personnel and exploration and production costs. This means that more than ever, operators and service companies alike must come up with new ways of working to improve operational efficiency and reduce costs in other areas, while maintaining high levels of safety. More than 10mn crew transfers take place annually across the world in the offshore oil and gas sector, either by helicopter, vessel, crane and basket, making it one of the highest cost activities in the industry. With the addition of a high risk factor, personnel transfer is an area that often comes under scrutiny.

Suitable vessel Operators rightly demand that transfer methods being used are inherently safe, proven, reliable and capable of handling the changeable conditions that occur in the offshore environment. Suppliers

56 Oil Review Africa Issue Four 2012

The Bourbon Gulf Star 3

therefore, must provide solutions that are both technically and economically feasible. Recognising all of these factors, market leader Offshore Solutions (OSBV), based in IJmuiden, The Netherlands, developed the Offshore Access Systems (OAS).

There are further opportunities to explore in the development of marine personnel transfer Conceived in 2003, the OAS is a 21-metre hydraulically operated telescopic gangway, fitted with an active heave-compensation system. It incorporates a motion reference unit in its active hydraulic system which, when engaged, maintains the walkway tip at a constant height relative to the horizon. This allows the gangway to safely connect to a fixed offshore structure in sea states of up to three-metre significant wave height (Hs) when installed on a suitable vessel. The gangway connects to a landing station installed on the offshore structure by means of a hydraulically operated gripper-head. Once connected, the heave compensation is disengaged, allowing the transfer of personnel to commence. With its own independent power source, the OAS can remain operational, even in the event of vessel

power failure. The OAS has the unique ability to offer 24-hour connectivity, enhancing operational efficiency by allowing sustained personnel transfer to take place, 24 hours a day. Should an emergency disconnection be required, the gripper-head has a fail-safe mechanism that allows automatic release from the landing station’s connection pole. This system allows an emergency vessel sail-away to be performed without the need for operator intervention. In the event of this situation, the walkway automatically reactivates the heave compensation system, allowing a controlled and safe retrieval of the gangway to its boom-rest on the vessel. In July this year, OSBV launched its free-standing OAS, designed to allow further efficiency and cost reduction through a decrease in the time required to install the system on a vessel. The new design allows quayside installation to be completed in a day, eliminating the need for structural modifications to the vessel (previously required to accommodate the pedestal both above and below the deck). The free-standing OAS is pre-commissioned and, once installed on a suitable vessel, is ready for immediate operation. Offshore Solutions is widely-recognised as being able to offer one of the safest methods of facilitating personnel access to offshore installations, having completed over 7,500 successful connections and in excess of 90,000 transfers since operations began in 2006, with zero recorded incidents. During 2011, in the Gulf alone, the OAS has run

S14 ORA 4 2012 Technology C_Layout 1 18/07/2012 16:02 Page 57

Cost savings Operating and maintaining normally unmanned installations (NUIs) in harsh offshore conditions using helicopters to transfer the workforce, means that many hours are lost through shuttling procedures and downtime due to adverse flying conditions. Having an OAS-equipped vessel with accommodation in the field, means that personnel can be transferred to the installation at the start of their 12-hour shift. Several installations can be serviced by one vessel and with available man-hours on each installation increasing by up to 70 percent by using an OAS, this equates to very significant cost savings for the operator. The cost per bed is also less than a Jack-Up accommodation unit and with multi-function capability, the OAS vessel can also be used as a standby vessel, to facilitate ROV or dive spread, dive support, workshops, materials storage and platform supply.

Track record Most recently, Offshore Solutions has been providing 24/7 personnel access in the Middle East for Qatar Shell GTL Ltd. (Qatar Shell), operator of the world’s largest gas to liquids plant – the world’s first heavecompensated access

system to work in the region. The OAS has been used to transfer crews to the Pearl 1 Platform, positioned in The Gulf, since the completion of sea trials in December 2010. Pearl 1 is one of two platforms providing offshore gas to the Pearl Gas to Liquids (GTL) project in Qatar. Using the 21 m OAS mounted on the Bourbon Gulf Star vessel, the Qatar Shell operations, project and maintenance personnel were able to access the platform 24-hours a day. The OAS’ continuous connection capability was a key element of this marine access success story. As well as the robust physical connection, this OAS was specifically adapted to perform for extended periods in demanding climatic conditions.

With its own independent power source, the OAS can remain operational, even in the event of vessel power failure Despite a challenging environment affected by a range of weather conditions and sea states, the unique continuous 24-hour connection capability allowed staff to leave the platform for the vessel during periods of high temperature and humidity; returning to work during cooler periods of the day a demonstration of the flexibility and efficiency of the OAS. The Bourbon Gulf Star with OAS mounted onboard will also enable personnel transfer to Pearl 2, aiding Qatar Shell in bringing the second platform on line. The contract was awarded based on the OAS’ proven technology, safety record and the potential to increase operational efficiency.

Free standing OAS

Step change The development of the OAS has brought a step change to access solutions for the offshore oil & gas and wind industries. Since commencing commercial operations five years ago, operators now have a safe and cost effective solution for undertaking construction, maintenance and decommissioning work. The OAS has been widely recognised for its innovative technology winning numerous awards; The IChemE Merck, Sharpe and Dhome award for excellence in safety in 2006, the Energy Institute's award for innovation and cost-effectiveness with major applications for the oil and gas industry 2006, The American Society of Mechanical Engineers (ASME) Woelfel Best Mechanical Engineering Award at the Offshore Technology Conference in Houston 2009 and most recently (together with GDF SUEZ E&P Nederland B.V.) the GDF SUEZ Grand Prix de L’innovation, in the category of Field Operations.

Developments There are further opportunities to explore in the development of marine personnel transfer and Offshore Solutions is committed to the continuous advancement of marine access. Design has now been completed for a development to the standard OAS. The elephant’s foot connection has already been successfully trialled at OSBV’s factory facility using a prototype unit. As a result of this, OSBV has commenced production, and certification has been applied for on this additional connection methodology. This new technology will expand the ability of the OAS to be utilised on installations with little or no preinstallation requirements. The connection detail for the elephant’s foot is based on friction interface, which defines the contact area used for the foot itself - 1m x 1m. Proximity sensors are fitted to the foot to sense when it is grounded. This allows the system to change from active to passive. Meanwhile, the overriding design principles of the OAS are being retained in terms of a robust connection and minimal disruption to the operation. The production model will be in operation by end of 2011. Delivering flexible and safe marine access solutions is Offshore Solutions’ core business, as well as continuing to maintain its reputation for providing a credible, efficient and cost effective alternative to current transfer methods. Offshore Solutions is convinced that marine access systems will be increasingly used in the transfer of personnel to offshore structures in the future and is noticing that operators worldwide are beginning to challenge their existing operating models. Moving towards marine access as an alternative way of liquidating man-hours offshore will increase personnel availability on location, improve productivity and with a multi function vessel, will help operators to reduce the cost of construction, maintenance and decommissioning work at offshore work sites. ■

Oil Review Africa Issue Four 2012 57


for more than 2,500 hours with 100 per cent availability. During this period, more than 20,000 personnel transfers have taken place without any safety incidents.

S15 ORA 4 2012 ICT_Layout 1 18/07/2012 16:06 Page 58


Two-wire liquid transmitters EMERSON PROCESS MANAGMENT has announced the new family of Rosemount Analytical 1066 two-wire liquid instruments featuring the broadest range of measurement parameters available, advanced communications capabilities, and unique ease-of-use features. The Rosemount Analytical 1066 transmitters are suitable for many industrial applications including those with exacting performance requirements in harsh environments such as chemical plants, metals processing, and effluent monitoring. The 1066 series has the latest version of Hart 7, and they are the industry’s first pH transmitters to be registered under the Interoperability Test Kit 6 (ITK6) from Foundation Fieldbus. The Rosemount Analytical 1066 family of transmitters can measure pH, ORP, resistivity/conductivity, percent concentration, total dissolved solids, total chlorine, free chlorine, monochloramine, dissolved oxygen, and dissolved ozone. A second sensor input allows continuous pH correction for free chlorine measurement. According to Dave Anderson, marketing director, Emerson Process Management, Rosemount Analytical, “The 1066 transmitters are feature-rich and cost-effective, and include many capabilities that we have implemented into our high-end instruments such as SMART pH sensor capability, which eliminates the need for field calibration.” The instruments’ SMART capabilities also enable them to accept pre-calibrated Rosemount Analytical SMART pH sensors, saving time and money for field technicians.

Discovering oil & gas reserves with 32 touches IT HAS TAKEN three companies working together and combining their specialist skills and expertise, to develop the world’s first Quad Full HD Multitouch Panel. They are Barco, an international provider of visualisation solutions; Citron, a German manufacturer of touch and multitouch systems and the Fraunhofer Institute for Intelligent Analysis and Information Systems IAIS bringing in its expertise in the areas of information visualization and human computer interaction. Designed to aid the analysis of seismic data during oil exploration, the system is the first of its kind in the world and is targeted primarily at decision makers and analysts in the oil and gas industry. At the heart of the system is a Barco-manufactured 56” display with a resolution of 3840x2160 pixels combined with an innovative infrared-based multitouch overlay by Citron. The Barco display delivers crisp, clear and coloraccurate perfect images and the resolution needed by the oil and gas experts. The software, developed by Fraunhofer IAIS, uses seismic data acquired during oil exploration to look at rock formations below the seabed and allows oil and gas experts to work as a team to analyse and interpret potential oil or gas reserves. “Several people can easily work together at a time in front of the 56“ display as the portable VRGeo Multitouch recognises 32 simultaneous touches”, emphasises Dr. Manfred Bogen, coordinator of the VRGeo Consortium at Fraunhofer IAIS. “In order to guarantee success, the planning of bore holes requires the input and joint effort of a number of different specialists, each with their own area of expertise.” The multitouch panel was developed especially for the VRGeo Consortium, a group made up of representatives from different international oil and gas companies. “Initially, we will be using the panel to analyse seismic data emanating from the oil and gas industries. However, we already see it in a variety of other application domains”, states Bogen.

Subscription Form 2012

Advertiser’s Index Aggreko Middle East Ltd...................................................................................35 Alduco Energy ......................................................................................................23 Century Energy Services Limited ..................................................................19 CWC Associates (PNC 2012) ............................................................................42 Delegation of German Industry & Commerce in Ghana (WACEE 2012)............................................................................................................................7 DMG World Media (Gastech 2012)................................................................37 Doris Engineering ..................................................................................................5 Elite International Careers Ltd.........................................................................13 Emval Nigeria Limited*......................................................................................49 Eunisell Limited ....................................................................................................27 Exterran ..................................................................................................................45 GEFCO ......................................................................................................................15 Global Pacific and Partners (Africa Oil Week 2012) ................................59 DURABAND ............................................................................................................30 i360 Group..............................................................................................................36 Ibafon Oil Ltd ........................................................................................................47 Inmarsat ....................................................................................................................2 Kohler Power Systems........................................................................................55 Lumbegh Services Ltd. ......................................................................................39 Marelli Motori S.p.A.............................................................................................53 Nadabo Energy Group ......................................................................................21 Nelson Dreil Ltd. ..................................................................................................33 Nynas South Africa..............................................................................................54 Oil Country Tubular Ltd (OCTL) ......................................................................41 Pem Offshore ..........................................................................................................9 Portwest Clothing Ltd. ......................................................................................31 RWE Dea AG ..........................................................................................................60 Samsung Galaxy Note........................................................................................17 Spina Group S.r.l. ..................................................................................................39 Standard Bank (Stanbic)....................................................................................11 Tilone Subsea Limited........................................................................................25 Tolmann Allied Services Company Limited ..............................................29

I wish to subscribe to Oil Review Africa for 1 year (6 issues) starting with the next copy. Europe a 93, Kenya Ksh 2200, Nigeria N3500, South Africa R228, United Kingdom £63, USA $124 Enclosed is my cheque/draft ❑ Please send us the invoice ❑ Please debit my: Amex ❑ Visa ❑ Mastercard ❑ Card number:

oooo oooo oooo oooo oo/oo Security Code: ooo

Expiry date: (Please note that we will debit your account in sterling).

Name ..............................................................................................Position.......................................................... Organisation .......................................................................................................................................................... Telephone............................................................Fax ............................................................................................ Address..................................................................................................................................................................... .......................................................................................................................................................................................

Country .........................................................................Signed ............................................................................ Email:

................................................................................................Date .............................................................

Send this subscription form by airmail together with cheque payable to: Alain Charles Publishing Ltd, University House, 11-13 Lower Grosvenor Place London, SW1W 0EX, UK

Subscription order can also be placed via the web: or email at Corporate Management Government Municipal, Public Services Executives General Management Technical Management Others, Please specify




Industry/Manufacturing Commercial Services Import/Export Agents, Distributors Commercial Transport Oil & Gas: Exploration, Dirlling and Production Oil & Gas: Downstream Processing Oil & Gas: Other, Please specify


Others, Please specify


04 08 10 54 64

YOUR BUSINESS Government/Public/Diplomatic Services 02 Infrastructure 03 Educational/Research Institutes 01



S15 ORA 4 2012 ICT_Layout 1 18/07/2012 16:06 Page 59

0 324 6154 Tel: T e el: + 31 70 0 324 1741 Fax: + 31 70

V Vice ice Chairmann Babette van Gessel

Sponsor & Exhibition

Registration & Mark Marketing eting

amanda@glopac-partne sonika@glopac-partners babette@glopa

www .p p o21 com 29th October - 2nd November 2012 The Pavilion Centre, Cape Town, South Africa Africa’s Africa’s Premier Premier Internat International tional Oil & Gas Event Sub-Saharan & Maghreb-North Maghreb-North Africa Plus Exhibiton Sub-Saharan

S Separately Bookable Confirmed Speakers

14 1 4th Scr Scramble amble FFor or Africa: Str Strategy ateg gy Briefing - 29th October 2012

Jacques Marraud des Grottes, Senior Vice President, Africa, Total, Immanuel Mulunga, Petroleum Commissioner, Ministry of Mines and Energy Namibia, Mahmoud Mohammed Mahmoud, Transitional Federal Government, Somalia, Hon Hussein Abdi Dualeh, Minister, Ministry of Mining, Energy & Water Resources, Somaliland, Carlos Aguilera, VP Business Development, Africa & Latin America, Chevron Corporation, Dr Nick Cooper, CEO, Ophir Energy Plc, Keith Hill, President & CEO, Africa Oil Corporation, Matt Wilks, Country Manager, Tanzania, BG Group, Wade Cherwayko, Chairman & CEO, Mart Resources, Joseph Pili Pili Mawezi, Secretary General of Hydrocarbons, Ministere des Hydrocarbures, DRC, Dr Duncan Clarke, Chairman & CEO, Global Pacific & Partners, Yi Zhang, Chief Executive, Addax Petroleum, Ebbie Haan, Managing Director, Sasol Petroleum International, Tim O’ Hanlon, Vice President, Africa Business, Tullow Oil, Galib Virani, Associate Director, Afren, Karl Thompson, Chief Executive, African Petroleum Corporation, Dr Kase Lawal, Chairman & CEO, Camac Energy, Adewale Tinubu, GEO, Oando, Senior Executive, Eni E&P Division, Mthozami Xiphu, CEO, Petroleum Agency SA, Frederik Dekker, Managing Director, Wessex Exploration, Peter Hill, Chief Executive, Global Petroleum, Xiao Zongwei, Managing Director, CNOOC Africa, David Ginger, Director Exploration & New Ventures, Cairn India, Phil Loader, Senior Vice President, Exploration, Mubadala Oil & Gas, Jeff Waterous, Chairman, Deloitte JMW Energy Advisers, Jasper Peijs, Exploration Manager-Eastern Hemisphere, BP plc, Oumar Torbo Djarma, Couseiller Technique, Ministre de l’Energie et du Pétrole, Chad, Ken Kuroda, Sr. Vice President & GM, Energy Business, Mitsubishi, Dr Ketsela Tadesse, Director, Petroleum Licensing, Ministry of Mines & Energy, Ethiopia, Dave Jennette, Exploration Director, Europe, Africa, Middle East, Apache Corp, Fredrik Ohrn, President & CEO, Svenska Petroleum Exploration, Mark Llamas, Managing Director, First Energy Capital, Steve Ilett, Exploration Director, Impact Oil & Gas, Paul Welch, CEO, Chariot Oil & Gas, Christopher Pitman, CEO, Surestream Petroleum, Barry Rushworth, CEO & Director, Pancontinental Oil & Gas, Mark Weller, COO, Madagascar Oil, Lindsay Elliott, Exploration New Ventures, Beach Energy, Steve Noske, Managing Director, WHL Energy, Robin Vela, Chief Executive, SacOil, David Mestres Ridge, Chief Executive, Swala Energy, Peter Wakeling, Managing Director, Bahari Resources, Rob Tims, Managing Director, Standard Chartered Bank, Hon Mohadji Fouad, Vice President, L’Union des Comoros, Eddy Belle, Chief Executive Officer, PetroSeychelles Frank Patterson, Vice President, International Exploration, Anadarko Petroleum, Shi Jicheng, General Manager, BGP East Africa, Nishant Dighe, President Africa, Panoro Energy, Phil Frank, Exploration Director, Sterling Energy, John Downey, Director, International Exploration & New Ventures, Dana Petroleum, Tony Atherton, Head of Exploration, Europe, Africa, Middle East, CIS, Talisman Energy, Campbell Airlie, Technical Director, Seven Energy, Raymond Kargbo, Head, Petroleum Directorale, Sierra Leone Petroleum Directorate, Scott Aitken, Chief Executive, Atlantic Energy, Chris Faulkner, Chief Executive, Breitling Oil & Gas, Robert McBean, Executive Chairman, Wentworth Resources, Jeffery Schrull, Managing Director, Rialto Energy, Sudhir Kamath, Managing Director, Suntera Energy, Halfani Halfani, Director of Exploration & Production, Tanzania Petroleum Development Corporation, Ernest Rubondo, Petroleum Commision, Uganda, Narendra Verma, Director Exploration, ONGC Videsh, Marcio Mello, CEO, HRT, Osten Olorunsola, Director, Department of Petroleum Resources, Nigeria, Elly Karuhanga, President, Chamber of Mines & Petroleum, Uganda, Pedro Augusto Bastos, E&P International Business Development Manager, Petrobras, Ahmed Salem Ould Tekrour, Director General of Petroleum, Ministry of Energy & Petroleum, Mauritania, Rufus Tarnue, VP, Technical Services, National Oil Company of Liberia, Hon Gabriel Nguema Lima, Minister, Ministry of Mines, & Industry & Energy, Equatorial Guinea, Thore Kristiansen, SVP, Development & Production, South America & Sub-Saharan Africa, Statoil, Sumayya Hassan-Athmani, CEO, National Oil Corporation of Kenya, Francisco Pulit, Sr. VP, Corporate Development, Pluspetrol, Ousseini Assane Boureima, Director of Exploration, Ministere des Mines et de l’Energie, Niger, Daniel Gnangni, Director General, Petroci, Ian Craig, Executive VP, Sub-Saharan Africa, Shell E&P Africa, Lagos, Nigeria, Arsenio Mabote, Chairman, The National Petroleum Institute Mocambique, Antoine Rostand, Managing Director, Schlumberger Business Consulting, Tewodros Ashenafi, Chairman & Chief Executive Officer Southwest Energy (HK) Ltd. Lumen Sebastio, Senior Geologist, Sonangol, Angola, Derek Stewart, Senior Vice President, Exploration & New Ventures, Murphy Exploration & Production

Presentations P resentations By By Dr Duncan Clarke, Clarke, Chairman Chairmaan & CEO, CEO O, Global Pacific Paacific & Partners Partner a rs

9th Africa Independents FForum orum - 30 30th October 2012 19 1 9th Africa Upstr Upstream eam Confer Conference ence - 31st October - 2nd November 2012 4 th PetroAfricanus 47 PetroAfricanus Dinner In Africa Afrrica - 29th October 2012

Lead Sponsor 2012

Plus 900 Senior Level State & Corporate Attendees From Across The Continent & Worldwide, Over 70 Exhibitions Dinners, Cocktails, Social Functions, Networking

Key Sponsors

T Titanium itanium

Pla Platinum atinum SSponsors 2012




Bronze Bron nze

Exclusive International Broadcast Partner

S15 ORA 4 2012 ICT_Layout 1 18/07/2012 16:06 Page 60


SUCCESSFUL ENERGY PARTNERSHIP. RWE Dea is a top-performing company for the exploration and production of natural gas and crude oil, operating on an international scale. Exploration expertise, state-of-the-art drilling and production technologies as well as a diverse range of professional experience and know-how acquired in 113 years of corporate history make RWE Dea a powerful company engaged in numerous operations at home and abroad. Safeguarding energy supplies, environmental protection and responsible decommissioning are key objectives. RWE Dea is part of the RWE Group - one of Europe‘s largest energy corporations. RWE Dea currently gives proof of this high standard upstream activities in Europe, the Caspian region, in North Africa as well as in Trinidad & Tobago - day-to-day. With activities in Algeria, Egypt, Libya and Mauritania, North Africa represents one of the operational core regions of RWE Dea. In light over ever-higher global demand and in an effort to expand its international upstream position, RWE Dea follows a distinctive growth strategy and is investigating further business opportunities worldwide. The continent of Africa is one of the focus regions of interest for RWE Dea. RWE Dea AG l Ăœberseering 40 l 22297 Hamburg l Germany T +49(0)40 - 63 75 - 0 l E l I

ORA 4 2012  

Oil Review Africa Issue 4 2012