Business Enquirer Magazine Issue 122 | SNPC | Feb'24

ACCELERATING TRANSFORMATION:

AN ENCOURAGING PERFORMANCE 25 PROGRAM UPDATE FROM THE CONGO’S NATIONAL OIL COMPANY

ACCELERATING TRANSFORMATION:

AN ENCOURAGING PERFORMANCE 25 PROGRAM UPDATE FROM THE CONGO’S NATIONAL OIL COMPANY

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t the close of Q3 2023, the World Bank highlighted that the Republic of Congo’s GDP was forecast to grow at a rate of 3.2% in 2023, rising to 3.5% on average in 2024-20251. This was, in part, credited to the country’s oil industry, which accounts for around half of the country’s GDP, as well 80% of its exports.

Supporting the country’s growth in the oil sector is the The Société Nationale des Pétroles du Congo (SNPC), the national oil company, which has six subsidiaries throughout the oil industry chain (SONAREP, ILOGS, SFP, SNPC Trading, CORAF, and SNPC D). In its March 2023 financial statement, it returned $44 million to the Congolese government in dividends.

“The aim of the SNPC is to return the profits of the Congo’s oil industry back to the country, ensuring opportunity and stability for its people. We’re really proud of this achievement, as well as submitting the financial report to the government on schedule,” shared Maixent Raoul Ominga, the SNPC’s General Director.

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Maixent Raoul Ominga, the SNPC’s General Director

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PROJECT DIRECTED BY: GLEN NEWTON ARTICLE WRITTEN BY: LAURA WATLING

1 https://www.worldbank. org/en/country/congo/ overview

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AMMAT GLOBAL RESOURCES

Building a resilient energy pathway Ammat Global Resources is an International Upstream Oil Company.

The core business involves hydrocarbon production with a data-driven approach, emphasizing efficient reservoir management and close interaction with local communities. Ammat’s goal is to develop a consolidated portfolio, leveraging activities with a rapid time to market to ensure a secure, uninterrupted, and affordable energy supply.

Starting from 2023, the Company has initiated production in the offshore fields of Loango and Zatchi located in the Republic of Congo, following the acquisition of two Exploration Permits each lasting twenty years. Ammat will lead the expansion of the fields and infrastructure, bringing about a dual positive impact in terms of increased production and the creation of shared value.

Interview with Massimiliano Mignacca, General Manager of Ammat

Our goal is to serve as a positive force for change in the upstream sector while upholding ESG principles. We actively dedicate ourselves to implementing solutions aimed at reducing gas consumption and the resulting emissions into the atmosphere to minimize our environmental impact.

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Ammat is an independent hydrocarbons producer. Please tell Business Enquirer’s readers about the role the business plays in the industry?

Ammat proudly embraces its role as a key player in independent hydrocarbons production.

Located in the offshore fields of Loango and Zatchi, approximately 70 km off the coast of Pointe Noire in the Republic of Congo, our operations are anchored in a sophisticated, data-driven strategy tailored for optimized reservoir management. This approach underscores our commitment to enhancing hydrocarbon production while prioritizing environmental sustainability.

Sustainability is crucial to Ammat’s operations. How does your business actively contribute to sustainable progress?

Sustainability is at the core of Ammat’s operations, aligning with our vision for Environment, Social, and Governance. We actively dedicate ourselves to implementing solutions aimed at reducing gas consumption and the resulting emissions into the atmosphere to minimize our environmental impact. Additionally, we prioritize creating value for local communities through meaningful initiatives that foster development opportunities. Our goal is to serve as a positive force for change in the upstream sector while upholding ESG principles.

info@ammatgr.com

The business is also passionate about its people. Please tell our readers more about the company culture.

Our culture, propelled by a passion for collaboration and inclusivity, empowers employees and cherishes diversity.

Nurturing innovation, open communication, and a collective commitment to excellence, our people form the bedrock of our success. At Ammat, our strategic focus revolves around People, particularly young talent. We export a training model for young individuals, incorporating mentoring programs and fostering growth in both human and technical values to ensure an excellent level of performance.

What measures are you implementing to fulfil the UN’s SDGs, particularly around the local community?

At Ammat, we’ve been dedicated to advancing the UN’s Sustainable Development Goals from the outset. Our social initiatives, developed in collaboration with the government and local communities, create shared value and opportunities for growth. We concentrate our efforts on education, health, and well-being through training programs and infrastructure projects in partnership with SNPC.

In a short span, we have increased production capacity by 75%, rising from approximately 4,000 to around 7,000 barrels per day.

Ammat is considered one of Société Nationale des Pétroles du Congo’s (SNPC) most valued partners. Please tell Business Enquirer more about the relationship.

As of July 1, 2023, we initiated production in the offshore fields of Loango and Zatchi through a strategic partnership with Société Nationale des Pétroles du Congo (SNPC). We take great pride in being entrusted with the Permis Zatchi III and Permis Loango III by the Republic of Congo for a 20-year duration, extendable for an additional 5 years. This acknowledgment underscores the value of our Strategic Plan and the proposed investments aimed at enhancing the fields. The partnership between Ammat and SNPC is characterized by mutual trust and a shared commitment to excellence in the petroleum sector, reflecting a robust and collaborative alliance.

What key initiatives and investments are outlined in Ammat’s Strategic Plan to enhance the offshore fields of Loango and Zatchi?

In our Strategic Plan, we have outlined a series of targe-

www.ammatgr.com

HYHYHY

Pointe-Noire, Republic of Congo

ted investments aimed at achieving priority objectives of integrity and security for our people, as well as ambitious operational, economic, and sustainability goals. Our aim is to double current production levels while simultaneously enhancing operational safety. To achieve these outcomes, we’ve developed a comprehensive plan involving the structural revamping and asset integrity of the operational platforms in both fields, along with a well workover plan.

This plan includes a maintenance and replacement program for key components. All interventions are focused on stabilizing and regulating production flows, thereby reducing operational risks, and optimizing activities.

And now, Massimiliano, as the General Manager, could you share updates on the milestones achieved in the first few months of executing Ammat’s Strategic Plan?

In a short span, we have increased production capacity by 75%, rising from approximately 4,000 to around 7,000 barrels per day. This accomplishment is a result of a pioneering data-driven approach, leveraging the profound expertise of our production managers, and goal-oriented smart collaborations with leading global companies for engineering and efficiency studies in the oil industry. To optimize the efficiency and productivity of the Loango and Zatchi fields, considering evolving reservoir conditions and extended well downtime, we’ve initiated assessments and analyses aimed at partially restoring asset integrity.

Substantial investments, estimated at around $250 million, have been meticulously planned to strategically support these initiatives.

Finally, what opportunities and challenges do you think the industry will face soon?

Soon, the oil and gas sector will grapple with evolving market dynamics, technological advancements, regulatory shifts, and a growing environmental consciousness linked to the necessary energy transition. Exciting opportunities lie in harnessing artificial intelligence to bolster operational efficiency and cut costs, as well as repurposing existing reservoirs for renewable energy production.

The primary challenge facing the industry is the imperative to reduce greenhouse gas emissions, a critical aspect of contributing effectively to the energy transition. For Ammat, this represents both a challenge and an ethical duty, compelling us to enhance the sustainability of our production and explore innovative solutions to meet increasingly ambitious targets.

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The Progression of the Performance 25 Program Speaking to Business Enquirer in May 2023, Mr Ominga, discussed the business’ Performance 25, a program designed to increase company revenue; reduce company costs; support governmental action; and better governance and control of activities.

Nearly a year on, the SNPC is seeing great success from the program’s measures.

“We have recently invested in new drilling and production equipment, most of which is now on site and in action. By updating the equipment, our colleagues are able to complete their jobs to a much better standard, and it’s also reducing downtime,” Mr Ominga explained.

An eight week shut down of SNPC’s refinery has seen a revision of all its equipment, and the business is proud to share that it has restarted its operations without incident.

The SNPC has also invested significantly in training in 2023, with 125 training sessions benefitting 1200 employees.

“As our aim is to better the lives of people in our country, training has been paramount. It has enabled access to jobs within the oil industry for more people,” added Mr Ominga To ensure both the future of the SNPC and the people of Congo, in 2023, the company discussed with Business Enquirer its groundbreaking study to identify potential greener energy resources sheltering in Congolese subsoil. The SNPC has discovered resources of both hydrogen and helium in the Congo.

The SNPC also recently announced a memorandum of understanding with Sonatrach, the Algerian National Hydrocarbon Company. “The historic agreement aims to strengthen both companies’ development within hydrocarbon exploration and development,” explained Mr Ominga, “we are excited to share technology 6

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THE AMERICAN UNCONVENTIONAL PETROLEUM EXPERTISE AND EQUIPMENT

APPLIED BY AFRICANS FOR AFRICANS

Our African-competent teams executed complex petroleum projects of utmost quality, in record time within unbeatable low budgets.

Olive Energy succeeded in truly achieving the Congolisation of the workforce.

Our experts trained and worked with Congolese technical staff making up to 90% of the local personnel.

Within the strategic framework of the WinWin-Partnership with SNPC, Olive Energy has invested in acquiring the finest quality oilfield equipment for drilling, workover, hydraulic fracturing, completion and production operations, in order to transform conventional and unconventional resources into producible hydrocarbons.

Energize Africa with Olive Energy www.olive-energy.com

Olive Energy works towards an effective and sustainable economic development, socially fair, while abiding by stringent environmental regulations.

EXPERTISE & SERVICES AVAILABLE IN REPUBLIC OF CONGO (BRAZZAVILLE)

Exploration & Production

Drilling & Workover

Hydraulic Fracturing & Production

Environmental Awareness

Social Impact

Exploration and production of new reservoirs and launching the development of the Tilapia and Marine 3 oilfields

Utilizing an offshore jack up rig and two versatile rigs for drilling and completion Olive energy can drill horizontal, deviated or vertical wells at highly competitive prices.

Two state-of-the art modern frac spreads assembled with American cutting-edge technologies for a total of 12,000 HP, enables the development of unconventional resources with fastpaced programs.

Processing and valorization of hydrocarbon-bearing waste products using a combined-method implemented at the Tchitanzi Site.

Self sufficient women initiatives, launching and mentoring of small businesses creating jobs, facilitating easy access to drinkable water and healthcare.

Olive Energy - Interview Questions for Written Response Olive Energy describes itself as the future of oil and gas in Africa.

What sets the business apart from its competitors?

Olive Energy has unique capabilities that give us a leading advantage compared to other E&P companies operating in Africa. We are an exploration company with unique Africa-centric expertise and advanced technologies that allow us to see opportunities others cannot see. To seize these opportunities, we have our own drilling equipment, high pressure pumping fleet for hydraulic fracturing, and all the production equipment required to turn these opportunities into production that will be processed by micro refineries to provide the much-needed refined products to local African markets. We are also fortunate and grateful to have unconventional financial partners dedicated to Africa development as they provide the necessary means to execute integrated projects that help throughout the whole lifecycle from the start in exploration all the way to selling refined products.

Olive Energy is considered one of Société Nationale des Pétroles du Congo’s (SNPC) most valued partners. Please tell Business Enquirer more about the relationship.

Olive Energy’s business model in Africa is to partner with national oil companies by providing turnkey solutions to develop their resources or to partner with them in developing new resources in blocks we operate.

The experience with SNPC and our 5 wells turn-key project in the giant unconventional MKB field has successfully demonstrated that this business model could create a win-win partnership that benefits all the stakeholders.

The business is playing a vital role in the socio-economic development of Africa - what are the key impacts you are having?

A major motivation for our presence in Africa is to contribute significantly to its socio-economic development, which is the backbone of our vision.

This is the continent with the lowest life expectancy, and where more than half of the households are without electricity, forcing people to desperate means such as cutting trees to cook their meals. Through our environmentally responsible oil and gas activities, we create opportunities to lift families from poverty by giving them the means and the know-how to become self-reliant. We focus on providing clean water, healthcare to women and children, and micro-grants to allow women and young entrepreneurs start their business to sustain their families and create jobs.

This strategy is working, and we have already seen the significant impact these actions have on women that are now employing their entire village.

Equally important, the youth formerly unemployed are now thriving in their new businesses, that we helped launch, and currently continue to support.

Olive Energy is described as ‘By Africans, For Africans’. What are the opportunities for your employees, as well as those who are in the communities of where you work?

Olive Energy commits to truly allow the transition from the reliance on foreign aid to developing the African skills and the businesses needed to develop the continent. This can only be achieved by a new generation of young Africans rising to the occasion. This new generation needs mentoring and hands on practice with other Africans who come from around the world and bring their know-how and resources to facilitate this generational transformation. In the oil and gas sector, Africans around the world have made a major impact and could play a major role in this effort by sharing their personal experience with the new generation that are hungry for knowledge and work.

Do you have any exciting projects (past, present, or future) which you would like to share with Business Enquirer’s readership?

As Africa shifts more towards the use of gas, Olive Energy is currently working on new integrated technologies and processes that allow the exploration, production, transport, and processing of gas resources for Africa needs at a lower cost than all the ongoing bloated gas projects where billions of dollars are required. Africa gas development needs small scale modular robust technologies that allow incremental gains. A good example of such technologies includes the revalorization and monetization of flared gas which is one of our priorities. Olive Energy uses the Scrum Field Development approach that we introduced in all our African projects. Just like in our software development efforts, even large gas projects could be divided into small sprints where tangible results that benefit the people are achieved every 6 months. We will be providing soon with more details on a specific project we are currently working on.

Many energy companies look to diversify into sustainable energy (such as solar and hydro), is this something Olive Energy may seek to do?

HYHYHY

Humanity has been continuously living through the energy transition.

Humans transitioned from wood to coal during the industrial revolution, then they transitioned from coal to petroleum in the early 20th century and today we are slowly transitioning to other forms of energy while still using coal to produce more than 30% of the electricity in most of the developing countries. So, in energy use, it is an evolution not a revolution.

Olive Energy is participating to this evolution and focusing on the use of natural gas to relief the African families from cutting trees to cook their meals. Another venue we are pursuing is the use of geothermal energy in East Africa to produce electricity. Leveraging our drilling and hydraulic fracturing equipment and experience we are vetting multiple geothermal projects to pursue in the near future.

As a business, what sustainable measures do you implement?

Olive Energy sustainable business measures revolve around the following key factors: Ecosystem management, shared use infrastructure, sustainable urbanization (Bricks), supply chain sustainability, efficient waste management, emissions mitigation with revalorization and monetization of flared gas, environmental assessments, improve energy efficiency in operations and production. We also enjoy nimble field operations and extremely rapid decision making, integrated projects with minimal reliance on third parties, integrity in everything we do, and finally taking care of our people. These sustainable business measures allowed us to grow rapidly and will continue to guide our future strategies.

What are the key strategic plans for Olive Energy in the near term?

Olive Energy strategic plans in the near term is to accelerate the development of our assets in the Republic of Congo and to expand operations in other African countries.

What is the outlook for the energy market in Africa in the next 12-18 months in your opinion? What are the opportunities and challenges?

We believe that 2024-2025 are going to be prosperous years for the Africa energy market where many projects could materialize and will start realizing value for their stakeholders. However, this high potential growth could be slowed down by the lack of capital, supply chain delays and availability of oilfield services. Thus, the need to look for alternative solutions and create new ways of doing business in Africa, without relying on past models and actors. The energy market in Africa needs to reinvent itself in order to achieve the continent’s socio-economic goals.

Our readers would love to hear more about Olive Energy’s CEO & Founder, Dr. Ahmed Ouenes. Please tell us more about your career journey.

I was trained in France as an entrepreneur and aerospace engineer and discovered oil and gas by chance through my military service. Instead of joining the army, I joined the French oil & gas company Elf-Aquitaine, (later acquired by TOTAL), to conduct applied petroleum research in the high desert of New Mexico. At the end of my military service, I returned few months to France but the call of the American southwest lead me to move back to the US. Back in New Mexico, I continued doing research funded

by French company Gaz de France (now ENGIE) to develop some new technologies for gas storage reservoirs which lead me to earn a Ph.D. in Petroleum Engineering. Residing in New Mexico and Colorado, for the next 35 years I created multiple software start-ups specialized in the development of new reservoir modeling technologies and applying them in the oilfields mainly for small US independents to improve their bottom line.

During that time, I Introduced Artificial Intelligence in reservoir modeling in 1994 and actively participated in the US unconventional revolution by focusing on the technologies needed to derive a good understanding of natural and hydraulic fractures. This critical area that controls the performance of oil and gas wells and the economics of many projects around the world remains a big mystery in the petroleum industry. I use my advanced knowledge in this area as a competitive advantage.

The best way to take advantage of this edge is to operate with my partners our own oilfields which we started doing in the US more than 20 years ago.

Unfortunately, due to multiple obstacles, the upside in the USA is very limited and we realized quickly that the real challenges and the big financial and human rewards are in Africa where we started working 10 years ago.

After some exploratory work in DRC, we shifted our focus to the Republic of Congo where the oil and gas industry is mature and where large unconventional resources remain untapped. Our win-win partnership with SNPC led to a new win-win business model where we can bring advanced US technologies and unconventional financial resources to Africa’s to participate in its economic development which is my focus for the years to come.

Finally, please sum up your leadership technique in three words.

LEAD BY EXAMPLE. Business Enquirer Magazine · Issue 122

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SNPC and establish a training partnership with Sonatrach, which is a leading player in the industry”.

The two companies have agreed that the partnership will enable the exploration of new opportunities, whilst promoting innovation, and contributing to the economic development of both the Congo and Algeria.

The SNPC has also agreed a partnership with Eni Congo, Eni SPA, and Lukoil for the purchase and sale of LNG. The LNG Marine XII project, which is set to be discussed at Italy-Africa Summit in Rome , has seen a substantial investment of nearly $5 billion, with an ultimate goal of reaching an annual LNG export of three million tons.

“Whilst this is an historic achievement which highlights our dedication to the exploration, production, and export of hydrocarbons, the SNPC also appreciates the significance of oil’s role within our country’s economy,” said Mr Ominga, “with the SNPC contributing to 75% of the state’s budget, we will take time with our transition to ensure the vital balance of our economy”.

Although many measures are under way to support Performance 2025 program success, the SNPC will launch further initiatives in the coming months to achieve its goals.

The business has plans to modernise its existing refinery and explore the opportunity to establish a new facility. In honour of the SNPC’s 25th anniversary, it has also begun the construction of a new headquarters in Pointe-Noire, which is planned to complete within the next 18 months.

“As SNPC is a national company, we want to enable as many people in the Congo as possible to access our products. With this in mind, we’re also embarking on a project to increase our service stations across the country, particularly in regions where there is more challenging access,” shared Mr Ominga.

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Commitment to the Future As part of its CSR policy established within Performance 2025, the SNPC has made a commitment to contributing to the preservation of the environment, particularly through actions aimed at reducing greenhouse gas emissions and achieving carbon neutrality by 2050.

One such initiative is its Eco Zamba project. Planned over a period of twenty years, the Eco Zamba project aims to create a forestry and agroforestry plantation over 50,000 hectares in the country’s Plateaux Batéké region.

Eco Zamba is also boasts an agroforestry initiative, allowing local populations and industries to take advantage of 4000 ha of trees with species adapted to economic use.

In 2024, the SNPC plans to plant 1,000 hectares, adding a further 6,000 hectares per year from 2025 onwards.

“This project will have significant positive impacts which includes the implementation of regenerative

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SNPC silviculture of soils and forest ecosystems, the development of agricultural sectors and, importantly, a new timber industry which will see the generation of additional jobs,” explained Mr Ominga.

Ensuring that the country’s people continue to benefit from the oil produced in the country, the SNPC Foundation has established a 400-bed boarding school located in the north of the Congo.

“The boarding high school is a stand out project for SNPC, and is considered one of the most modern schools in the country,” shared Mr Ominga.

A testament to the efforts of the SNPC Foundation on this project, it has become the blueprint for further schools.

“The partnerships being formed across our business, be it exploration or social initiatives, is evidence of the SNPC and our country’s commitment to betterment. Now, we are encouraging more businesses to consider partnerships, investment, and knowledge sharing with the SNPC,” said Mr Ominga.

www.snpc-group.com

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