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April 2012

ISSN 1757-1383


APRIL 2012

VOL. 10 ISSUE 2

CONTENTS Source: VisualMedia

On the Cover

BG’s Hassi Ba Hamou site

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Moving On Recruitment Message from the Editor Africa’s Big Five Africa at Large Around the World Downstream News African Politics Power & Alternatives Market Movers Facts and Figures Conferences Contact Us Advertisers’ Index

Monthly Focus

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Botswana CBM Getting Tech Boost

28

Petronas Helping Egyptian Schools

30 36

D e pa r t m e n t s 2 3 4 6 9 13 16 18 20 21 52 55 56 56

Downstream Focus

LNG Legalities

Local Impact

African Focus Ghana Overview Algeria Overview

Technology And Solutions

42 46 48 50

Diving into Africa’s Offshore

Oil Security Kony Hype Accentuates New Media Pitfalls

Book Review Viewing Tahrir in the Light of History

New Products & Services High-Performing Cable System Redesigned Reservoir Characterization Apps TDW Releases Pipeline Pressure Isolation Product

We b E x c l u s i v e s ONLY ON WWW.PETROLEUMAFRICA.COM PCP Artificial Lift System Caters to Botswana CBM Field Korean Companies Keen on Libya Entry Log-on to www.petroleumafrica.com for web only features, all department news items in-depth, a complete events calendar, an oil directory, all the latest news items out of the continent, and much more. Sign up for a risk-free trial to Petroleum Africa today!


Moving On responsibilities of CEO. Prior to the appointment Chisholm served as president and chairman. Cudd Energy Services announced that Larry Burleson has been appointed director of Business development for corporate services. Burleson joins Cudd Energy Services from Weir Seaboard, where he was VP of sales. Gene Van Dyke

Jeff Mitchell

Gene Van Dyke, president and CEO of Vanco Exploration, has elected to resign from the company to explore other opportunities. The company’s COO, Jeff Mitchell, has been tapped as interim CEO until a long-term successor is brought in. Rialto Energy appointed Bruce Burrows as non-executive chairman of the company. The appointment was effective March 7. Burrows is currently CFO of Seven Energy International. Glen Whiddon, Rialto’s current chairman, will become non-executive director.

Wintershall chairman Rainer Seele is now the new president of the German-Russian Chamber of Foreign Trade. Martin Wensrich has joined ERHC Energy’s technical team. Wensrich is an experienced geoscientist and a proven oil finder with over 36 years in the industry.

T.D. Williamson promoted Bruce Thames to the position of Senior VP and COO. The appointment was effective March 14. Bruce Thames

William C. Nolan

Claiborne P. Deming

It was with great sadness that Murphy Oil Corp. announced that its chairman of the board, William C. Nolan, Jr. died on March 12 following a brief illness. Nolan had been a Murphy director since 1977 and served as chairman since July 15, 2002. In December, 2011 the company announced that Nolan would retire effective May 1, 2012, but would remain on the board. Claiborne P. Deming was elected to succeed Nolan effective from May 1. IDEAL Industries, Inc. announced that its president and CEO Jim James will assume the additional duties of vice chairman of the board of directors, effective immediately. Helmerich & Payne, Inc. announced that Donald F. Robillard, Jr. was elected a director at the company’s Annual Shareholders’ Meeting in March. Robillard, senior VP and CFO of Hunt Consolidated Inc., has extensive experience in the oil and gas business. Flotek Industries, Inc. reported that John Chisholm has been given the additional

GE made a number of appointments globally. Jose Ignacio Garcia has been named VP and CFO for Latin America, GE Global Growth & Operations. Anne Kennelly Kratky was appointed as a GE company officer; currently she is deputy treasurer and chief risk officer for GE Capital Treasury. Khozema Z. Shipchandler has been named VP and CFO for the Middle East, North Africa, and Turkey, GE Global Growth & Operations. Marcelo L. Soares has been named VP for Latin America, GE Energy. Chevron Corp. has nominated Charles W. “Wick” Moorman for election to the company’s board of directors. Greene’s Energy Group (GEG) has named Lance Bolds chief legal counsel. Bolds joins GEG from Global Industries Offshore LLC, where he was employed as an in-house senior legal counsel.

Foster Marketing has named Vicki Wyatt VP of creative services. Wyatt has more than 30 years of experience in marketing, public relations, print, and broadcast media. She joined Foster Marketing in 1991 and prior to her promotion served as production and traffic manager for 10 years.

Vicki Wyatt

Royal Dutch Shell reported that Hans Wijers, a non-executive director of the company, chairman of the remuneration committee, and a member of the nomination and succession committee, has been appointed deputy chairman and senior independent director with effect from May 23. Wijers will succeed Lord Kerr of Kinlochard who will be standing down as a non-executive director of the company with effect from the close of business of the 2012 Annual General Meeting. The Stewart Group has added new depth to the company with the appointment of Michael Braid to launch its specialist subsea and renewables business. Hercules Offshore, Inc. appointed Son P. Vann as VP investor relations and planning and John F. Wasmuth to VP tax. Devin International, a subsidiary of Greene’s Group, has promoted Joe Miller to VP and general manager. Miller has 31 years of experience in the oil and gas industry. Throughout his career he has held sales and management positions with Downhole Rental & Supply and Grant Norpac Inc. CGGVeritas board of directors appointed Stéphane-Paul Frydman and Pascal Rouiller as CGGVeritas senior executive VPs. ExxonMobil Corp. has elected Henrietta H. Fore to its board of directors. Fore is chairman and CEO of Holsman International.

Lance Bolds

David C. Mannon, president, CEO, and director of Parker Drilling, has left the company effective March 9. The company also announced that Robert L. (Bobby) Parker Jr., the company’s executive chairman and previous CEO, will resume the duties of president and CEO and continue to serve as executive chairman until Mannon’s permanent replacement is named.

Anadarko Petroleum Corp. has elected Charles W. “Chip” Goodyear to serve as an independent director of the company, effective from March 1. Additionally, the company announced the nominations of Richard L. George and Eric D. Mullins as director candidates to be included in Anadarko’s 2012 proxy statement for election at its 2012 Annual Meeting of Stockholders on May 15.

To include a corporate personnel announcement in Moving On, write to info@petroleumafrica.com. Preference will be given to Africa-specific appointments and to those companies who have interests within the continent; all others will be included on a space available basis. 2

Petroleum Africa April 2012


Recruitment African Bagg Recruitment

African Bagg Recruitment

Lead Petroleum Engineer Lead Petroleum Engineer with a minimum of 6 years working experience, bachelors degree in Petroleum Engineering and capable of following up the progress of new technologies and thods in onshore and offshore drilling for improvement. develop and oversee mechanical integrity programs.

Fiscal Gas Metering The ideal candidate should be able to manage Maintenance and Calibration/Validation of Pressure Loop, Orifice Plate Inspection, and update configuration data of flow computer, Gas Chromatographs and Moisture Analyzers and have GE PANAMETRICS Flare Gas Meters experience.

Position based in Ghana. Ideal candidate must have International experience. To apply please submit your CV on our website www.africanbaggrecruitment.com.

Position based in Nigeria. To apply please submit your CV on our website www.africanbaggrecruitment.com.

CA Oil & Gas

CA Oil & Gas Posição: Tecnico de Recursos Humanos Location: Angola Discrição: O nosso cliente pretende recrutar um Tecnico de Recursos Humanos para as suas operações em Angola. Posição será baseada em Angola Experiência & Qualificação: 3-8 5. Licenciatura. Bons conhecimentos da lei de trabalho de Angola. Contact: Moises Padre, CA Oil & Gas Tel: +27 21 551 5340 Email: padre@caglobalint.com

www.petroleumafrica.com

Position: Operateur de DCS/sale de contrôle expérimenté sur FPSO Location: Offshore Gabon Position description: A l’aide d’un Yokogawa DCS, observe les paramètres de production et reporte éventuelles anomalies. En charge de la salle de contrôle. Experience & Education: - Expérience avec divers DCS, comme le YOKOGAWA CENTUM 3000. - 5 ans d’expérience en production. - Maitrise de l'anglais obligatoire. - STCW et certificats médicaux valides. Contact: William Vernes, CA Oil & Gas. Tel: +27 21 551 5340 Email: william@caglobalint.com

CA Oil & Gas CA Oil & Gas Position: Exploration Project Manager – Oil & Gas Upstream – West Africa Location: West Africa Position description: Our client is currently seeking an Exploration Project Manager to handle exploration activities on their onshore blocks. Candidate needs to speak French. Experience & Education: 10 years min experience. Geologist, Geophysicist or Petroleum Engineering degree. Contact: Eugenio Maggi, CA Oil & Gas Tel: +27 21 551 5340 Email: eugenio@caglobalint.com Email: william@caglobalint.com

Position: Executive Director – Benin (West African Nationals) Location: Benin Position description: Our client is currently seeking an Executive Director for their Exploration & Production activities in West Africa. Experience & Education: 15 years relevant Oil & Gas experience. Strong Commercial Negotiations & Government Relations Contact: Eugenio Maggi, CA Oil & Gas Tel: +27 21 551 5340 Email: eugenio@caglobalint.com

In today’s competitive market, finding quality local personnel is a challenge.

Place your ad here to attract the best talent Africa has to offer. For more information please contact Jina Sellers at advertise@petroleumafrica.com


Message from the Editor

Deputy Editor Jennifer Nickle jnickle@petroleumafrica.com Associate Editor LeAnne Graves lgraves@petroleumafrica.com Contributing Editor Sarah Abdel-Rahman Senior Correspondent Mark Pabst Contributors Denis Blaquiere Farrah Jacob Michaels Nuno Cabeçadas Ricardo Silva Operations Manager Alan Younes Art Director Mario Saad Events Coordinator Basma Awdan Circulation Manager Silvia Rafaat Circulation Coordinator Amira A. Wahab Database Coordinators Eman Eissa Olabisi Ijeh Senior Accountant Said Adly Advertising/Sales Jina Sellers advertise@petroleumafrica.com IT and Website Jacob M. Sellers Administrative Assistant Dalia Abd El-Wahab Printing by Sahara Printing Company S.A.E. Nasr City - Free Zone Cairo, Egypt

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Petroleum Africa April 2012

Dianne Sutherland Chief Editor

Since many of you will have picked up your copy of Petroleum Africa at the Offshore Technology Conference in Houston this month, I thought it would be fitting to discuss the exciting developments that have occurred in Africa’s offshore since last year, and there are many. While offshore GoM and Brazilian discoveries regularly make the headlines, Africa’s deepwater exploration is yielding incredible results on par with these regions, and often dwarfing them. While historically the focus of African offshore exploration has predominantly focused on the western seaboard from Equatorial Guinea down to Angola, new campaigns have been making headlines to the north and to the south of this hot zone over the past couple of years, especially over the last nine months. Although not making a discovery, Hyperdynamics spud the long awaited for Sabu-1 well off the coast of the Republic of Guinea, giving the partners a glimpse of the prospectivity of the 9,600 sq km concession, while discoveries in Ghana, Sierra Leone, and Liberia are injecting a new enthusiasm in the greater western coastal region. And then there is Namibia which just spud its first well in ages. The multitude of oil companies who have climbed onboard Namibian concessions in recent months are anxiously awaiting news from this drilling campaign. Meanwhile, East Africa has become all the rage with numerous hits offshore Mozambique’s Rovuma Basin. In two separate concessions, Anadarko and ENI have made strikes yielding world class natural gas finds totaling over 60 Tcf in recoverable resources between them, with potential for more likely. And on the Tanzanian side of the basin, recent hits by the BG/Ophir partnership as well as the Statoil/ExxonMobil partnership, are generating even more East Coast euphoria with several large discoveries expected to bring in billions of dollars of investments in the near- to mid-term. And more exciting news out of the region comes from Kenya. Though not offshore, a small ‘oil’ discovery was made by Tullow Oil in the Lokichar Basin, giving the Kenyans high hopes that more oil will be found onshore and possibly offshore as well. In addition, the natural gas bonanza coming from its neighbors leaves the Kenyans looking for the double play in its deep offshore. During the coming year there are plenty of campaigns from these countries on the books in the form of exploration drilling that will result in firming up the potential of the continent’s newest plays. There may never be a better time than the present for services companies interested in tapping new markets to take that step into Africa. Opportunities will be found in drilling, offshore services, subsea installation, transportation, logistics, LNG, power, and elsewhere. Algeria and Ghana feature in this issue’s African Focus pages, bringing you all the latest developments from the oil, gas and power sectors, as well as from the political fronts. You will also find an update on Africa’s top offshore developments in our Technology Focus section. Meanwhile, our Downstream Focus article provides some insights into Africa’s LNG prospects from a legal perspective. And this month’s book review on Steven A. Cook’s latest work, The Struggle for Egypt: From Nasser to Tahrir Square, puts forth a historical perspective on the developments out of Egypt since the Tahrir Square struggles began some 15 months ago. As always, your comments and suggestions are welcome and can be sent to info@petroleumafrica.com.


Africa’s Big Five

ALGERIA PTTEP Knocks Out Discovery Thailand's PTTEP E&P said its JV with Sonatrach and CNOOC struck pay dirt with their first exploration well on the Hassi Bir Rekaiz concession. The well was drilled to a total depth of 4,129 meters and reached a petroleum reservoir, PTTEP said in a statement to the stock exchange in Thailand. The flow test recorded crude oil flow rates of 1,000 bpd and natural gas flow rates of 300 Mcf/d. More exploration wells are to be drilled on the Hassi Bir Rakaiz. PTTEP and its partners will also drill appraisal wells to confirm the extent of the petroleum reserves in the area.

Sonatide, which expired on March 31. Tidewater has been negotiating with Sonangol to put the JV on a more permanent footing as it allows Tidewater to market its boat services to energy companies for operation in Angola. Negotiations have been underway since February with both sides revising proposed additional or modified contract expectations. The Angolan firm advised Tidewater that it would not consider further vessel contracting by Sonatide until the JV negotiations were concluded.

Anadarko said it will record a gain in Q1 to reflect the partial recoupment of past TPE. Maersk said the settlement of disputed tax payments will have a positive impact on the company in 2012 to the tune of about $920 million.

ANGOLA Angola/ROC Sign Agreement for Joint Exploration Angola and the Republic of Congo (ROC) agreed to jointly exploit an oil field on their mutual border and share profits equally, according to local news sources. Two agreements for the development and production of the Lianzi cross-border oil field were signed by the Angolan oil minister, Botelho de Vasconcelos, and his ROC counterpart André Raphael Luemba. The oil field, which will be operated by Chevron, has estimated oil reserves of 67 million barrels. The first agreement establishes the mechanisms for sharing revenues from exploration with the second agreement centering on opening a joint account for depositing income generated by the field.

Sonatide JV Negotiations Not Going Well Tidewater Inc. offered an update on its ongoing negotiations with Sonangol regarding its JV

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Petroleum Africa April 2012

In the nearby NS385 oil field, planning is underway for the drilling of the first development well, which is expected to spud prior to the end of Q2 2012. By Q1 2013, it is anticipated that production from NS385 will be added to NS377 production, resulting in North Shadwan producing up to 5,000 bpd (gross).

Abu Sennan Well Hits for Kuwait Energy

The North Shadwan JV partners have also applied for a development lease over the NS394 oil discovery, with the development expected to commence in 2013. Production from NS394 is anticipated to commence in 2014 at an expected flow rate of up to 7,000 bpd (gross).

Kuwait Energy saw its fourth success with a new discovery while drilling on the Abu Sennan Concession in Egypt’s Western Desert.

Apache Gets Green Light on Faghur Basin Development Leases

EGYPT

Government OKs Tax Settlement Anadarko Petroleum Corp. and Maersk Oil received final approval to an amendment to their PSC with Sonatrach, pursuant to the previously announced exceptional profits tax (TPE) settlement. As a result, the settlement agreement is now fully effective, and this final approval brings closure to the TPE dispute.

operation, which is expected to commence in Q2 2012.

The El Salmiya-1 well initial testing showed commercial flow rates at the Abu Roash “E” Member and Abu Roash “C” Member levels. The well showed rates of 400 bopd from the Abu Roash “E” Member, while the Abu Roash “C” Member level showed rates of 2,500 bopd and 17 Mmcf/d of gas. The total tested flow rate from both Abu Roash “C” Member and Abu Roash “E” Member is approximately 5,600 boepd. Kuwait Energy is the operator of the concession and holds a 50% working interest. The remaining working interest is held by Beach Petroleum (Egypt) Pty Ltd. (22% working interest), and Dover Investments Ltd. (28% working interest).

East Zeit Good to Dana P Zeitco, a JV between Dana Petroleum and EGPC, completed the drilling of its first well in 2012 on the East Zeit field in Egypt. The firm saw initial production rates of over 1,000 bpd of oil from the A12Z well. It was reported that when production stabilizes it will significantly enhance production from the field.

Production Seen from North Shadwan Concession BP, Beach Energy, and TriOcean Energy Co. commenced production from the NS377 field on Egypt’s North Shadwan concession. The oil is flowing via a tie-in to Petrobel’s nearby Ras Ghara oil facility and then by pipeline to the main Petreco Oil Center at Abu Rudeis. Initial production via the pipeline will be restricted to about 1,000 bpd of oil, with further production from the NS377 field to be handled via a trucking

Apache Corp. received approval for seven new development leases in the Faghur Basin, allowing the company to add an additional 5,200 bpd of new production in Egypt’s Western Desert. The US independent has drilled eight development wells in the Faghur Basin this year, including the West Kalabsha A-6, a westward extension of the West Kalabsha-A structure that tested 2,750 bpd from a series of stacked AEB reservoirs. Apache is currently drilling three wells in the Faghur Basin and 14 more wells are planned during 2012. The company is also acquiring new 3D seismic surveys in its concessions in the Western Desert to replace and improve upon existing data. A 1,027-sq km survey at West Kanayes and a 1,065 sq km at West Ghazalat will enable Apache’s technical teams to high-grade prospects in relatively underexplored areas. Apache’s current gross operated production in Egypt totals approximately 203,000 bpd and 880 Mmcf/d of gas, up 3% from 2011. Under the terms of the PSAs, Apache’s net is about half of the gross production.

Egypt Secures $1.2 Billion from ITFC To help shore up its budget and pay for imports Egypt has borrowed $1.2 billion in the form of a credit facility from the International Islamic Trade Finance Corp. (ITFC). Planning and International Cooperation Minister Faiza Abu el-Naga said that the loan carries a 3.75% interest rate and will be available immediately. It will be used for imports of oil, oil products, wheat, and other food commodities.


MENA Hydrocarbons Updates Lagia MENA Hydrocarbons reported that the Lagia field development commenced on March 16 using Petroservices Drilling Overseas (PSDO) 750 HP rig Shams 1 for a six-well program. The drilling program consists of working over two existing wells, the drilling of two development wells, and drilling a further two appraisal wells. The development wells will be completed with thermal casing in order to facilitate steam injection as part of a cyclic steam soak pilot project and fitted with a sucker rod pump. A contract for the rental of a 24 million BTU steam plant is currently being finalized. The plant is expected to arrive by mid 2012

NW Gemsa to See Production Increase Sea Dragon Energy Inc. and its partners on Egypt’s NW Gemsa concession, Vegas Oil & Gas and Circle Oil, will add to their production totals in the near future. The AASE-11 ST-1 development well, spud on February 5, encountered 42 ft of oil pay in the Shagar reservoir, and 22 ft in the Rahmi reservoir. The well was drilled to a total depth of 9,600 ft and then sidetracked to the southwest. The sidetrack was successfully drilled to a total depth 11,160 ft in the Upper Rudeis Formation. The well is being completed in the Shagar Reservoir in the interval 10,730 ft to 10,780 ft and should get support from the AASE-7 water injection well located 1.3 km to the south. It will be placed onstream soon and should contribute to ramping up concession production toward the 10,000 bpd target. Following the well completion the rig will move to drill the AASE-12 infill development well, located in the southern part of the field.

LIBYA More Exploration for Egypt and Libya by Total Two North African countries are set to see increased exploration from French firm Total – Egypt and Libya. Total will drill one exploration well offshore Libya during 2012 and another offshore Egypt’s Nile Delta. The company hopes to see its production grow by 2-3% over 2012; however, this will depend on growth out of the troubled nation of Libya. Total plans to spend about $20 billion in 2012 on its exploration ambitions.

Wintershall’s Libyan Production Picking Up Germany’s Wintershall saw its crude oil and condensate production drop by 43% in 2011 to 25 million boe compared to its production rates of 2010, attributing the decline mostly to the Libyan revolution. While its 2011 production rates may have dropped, 2012 numbers should look a bit better for the company as it adds more of its shut-in Libyan production to the mix. Wintershall’s facilities in Libya restarted in mid-October and at the end of 2011 the company’s daily average production rate from its onshore fields was 60,000 bpd. The

company did say, however, it was unable to predict when maximum production rates would be achieved.

Eastern Libya Installs Council, Wants Autonomy The eastern region of Libya, where a good portion of the country’s oil production comes from, has made moves that could lead to problems with the interim government in Tripoli. Civic leaders from Cyrenaica have created a council to administer the region. At a congress in the eastern city of Benghazi, where the uprising to oust Muammar Qaddafi


Africa’s Big Five began, around 3,000 delegates convened and named Ahmed al-Senussi as head of the council. While the council does not carry any official weight with the interim government it does plant seeds in many a mind that a battle for the east’s autonomy could be in the making. The declaration said the province wanted a federal system under which the historic provinces of Cyrenaica, Fezzan in the south and Tripolitania in the west of Libya would have a large degree of autonomy from the government in Tripoli. It also rejected the mechanism for electing a new national assembly in June, saying it wanted greater representation for Cyrenaica.

NIGERIA

The company said that based on the test data it expects future horizontal production wells at Okoro East will be capable of yielding between 4,500 to 7,000 bpd per well. It will drill two production wells using existing facilities in H2 2012 using free well head slots on the existing Okoro platform, which will be tied back to the Armada Perkasa FPSO. This production information will allow Amni and Afren to finalize development options, with up to eight possible production wells under a full field development.

Nigerdock Moves on to Ofon 2 Project With the commissioning of the Abang and Itut platforms under its belt, Nigerian engineering and construction firm Nigerdock is taking on Total’s multi-billion naira Ofon 2 platforms. The multi-billion naira project is in line with the local content policy.

Shell Chooses Winner for OML 30 A Nigerian unit of Royal Dutch Shell, SPDC, picked a buyer for another of its oil blocks in Nigeria, OML 30. This license is jointly owned by SPDC, Total, ENI, and NNPC. The block is valued at about $1 billion and produces at a rate of around 45,000 bpd. Bids received for a 45% stake owned by the IOCs came in from three companies: Conoil Producing Ltd., Shoreline Natural Resources Ltd., and BSG Resources Ltd. A report by Africa Energy Intelligence said Heritage Oil Corp., which holds 45% of Shoreline, is on the verge of closing the deal. The source wouldn’t confirm or deny that report.

Okoro East Tests Successful for Afren Afren completed three drill stem tests (DSTs) to obtain fluid samples and pressure data at the Okoro East oil discovery offshore southeast Nigeria. The pressure data also obtained has helped with the company’s structural understanding of the field and supports the pre-drill volumetric estimates (Pmean STOIIP of 157 million barrels).

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Petroleum Africa April 2012

Nigerdock’s participation on the Ofon 2 project was announced at the commissioning of the NNPC/MPN Satellite Field Development Project by the chairman of Nigerdock, Anwar Jarmakani.

Chevron’s Funiwa Quits Burning Chevron Nigeria Ltd. (CNL) announced that the fire at the site of the Funiwa 1A natural gas well offshore Nigeria ceased burning on March 2. CNL has detected no natural gas flowing from the well since the fire ceased burning and is monitoring the area continuously. The company will continue to drill the relief well to permanently plug and abandon Funiwa 1A.

Sirius Wants Additional Analysis on Ororo-1 Sirius Petroleum provided an interim update on its Competent Person’s Report (CPR) commissioned on the Ororo marginal oil field in Nigeria from Gaffney Cline & Associates (GCA). The company said that progress continues to be satisfactory, and additional data have been procured to support the potential for incremental

sands deeper in the field which were not penetrated by the Ororo-1 well. As a result, Sirius has asked GCA to undertake additional analysis with a view to quantifying the potential upside from the additional sands, which has led to a longer timescale in producing the report than initially envisaged.

Country Instability Report Nigeria’s sectarian clashes in the northern part of the country continued with seven schools torched in the beginning of March. The arsonists, suspected to be members of the Boko Haram, burned down seven schools. The fires are the latest from the Islamic militant group, looking to impose sharia law across the country, which has killed hundreds in bomb and gun attacks. Violence in the north also spread to Benue state after a raid on a village by the Fulani herdsman which left 16 dead and about 20 wounded. The Nigerian government has launched indirect peace talks with the religious regime marking the first time a ceasefire has been mentioned; however, no agreement has been made. Infamous militant group, the Movement for the Emancipation of the Niger Delta (MEND), is looking to steal the spotlight back from Boko Haram. It reappeared taking credit for a second incident in about a month with an attack on a police checkpoint which left four dead. More news may come from the group in the near future as it says it will resume attacks on the oil industry, stealing back the spotlight from the Boko Haram. Meanwhile, a clash between police and protesters at the Stubb Creek marginal oil field operated by Universal Energy Resources Ltd. has left one of protester wounded. According to Nigeria news agency NAN, police from the Mbo Division and protesting youths clashed as protesters blocked the access road to the oil field. Ten of the protesters were arrested and the gunshot victim was taken to a private clinic.


Africa at Large Luck of the Irish Results in Kenya Discovery Tullow and its partner Africa Oil Corp. reported that Kenya’s Ngamia-1 well on Block 10BB encountered 20 net ft of oil. The well was drilled to an intermediate depth of 1,041 meters and has been successfully logged and sampled. Africa Oil said that moveable oil with an API gravity in excess of 30°, with similar properties to the light waxy crude discovered in Uganda, has been recovered to surface. The reservoirs in this section are composed of good quality Tertiary age sandstones. The well will be drilled to a depth of approximately 2,700 meters to explore further potential. On completion of operations, the Weatherford 804 rig will move to the Tullowoperated Kenya Block 10A where the Paipai-1 wildcat will spud in H2 2012. While the news was definitely welcome for Kenya and the companies operating there, several more wells will need to be drilled to establish whether the oil encountered is of commercial quantities.

BG/Ophir Mark Fourth Tanzanian Discovery

The official also said that many citizens have been affected by the ongoing exploration efforts and there is a lack of compensation and recruitment of local youths in the oil companies. These issues led to youths from the area causing trouble however, an agreement was reached giving them employment.

Mozambique Resource Increase for Cove In a release Cove Energy said it was “delighted to note” a 2 Tcf increase of the P90 (Proven) estimated recoverable gas resource of the Barquentine discovery area operated by Anadarko Petroleum, now estimated to contain 17 to 30 plus Tcf of recoverable gas. The recently performed production test on Barquentine 2 was monitored more than 3 km away in Barquentine 3. A clear pressure response in this well confirmed excellent communication between the two wells as predicted on the basis of the geological model. These results are of vital importance for plans and might allow the partnership to significantly reduce the number of planned development wells. The test information will also be applied in the detailed reservoir simulation and might result in higher estimated recovery efficiencies.

The drilling of the Jodari-1 offshore Tanzania on Block 1 resulted in another discovery for partners BG and Ophir Energy, marking the pair’s fourth consecutive discovery. The well was spud in early January in 1,153 meters of water and was drilled by the drillship Deep Sea Metro 1 to a total depth of 4,465 meters subsea. Preliminary evaluation of the well results indicates gross recoverable resources are in the range of 2.5 to 4.4 Tcf of gas.

BG to Spend Big in Tanzania

The Jodari-1 was designed as a play-finder well to test slope-channel targets of Miocene, Lower Tertiary, and Upper Cretaceous age. Log analysis shows that the well intersected the edge of a Miocene accumulation and two intervals of Lower Tertiary age, with 113 meters and 11 meters of gross pay respectively and high quality reservoirs. The Upper Cretaceous encountered formation gas but was not considered pay at this location.

BG Group said it plans to invest up to $20 billion on its natural gas finds in Tanzania according to a report in The Guardian newspaper. The company’s chairman, Robert Wilson was quoted as saying in a meeting with Tanzanian president Jakaya Kikwete that the country needed to prepare its economy to handle such an amount of money.

Sudan Discovers New Oil Fields Mastoor Abdul Magid, commissioner of the Adeela locality, said that several new oil fields have been discovered in a number of locations in Sudan’s north Darfur state. Unfortunately, controversy remains over the rights of the new find between the Adeela and Gibaish localities. Mastoor told reporters that the two areas reached a temporary agreement pending demarcation of the border which will be supervised by the Decentralized Government Chambers.

East Africa will be garnering a significant amount of investment in the coming years based on the recent natural gas discoveries made off the coasts of Tanzania and Mozambique. Numbers like $4 billion and $5 billion keep popping up in news reports on the development of these natural gas discoveries however, one firm says it will spend significantly more than that on the extraction of Tanzania’s resources.

at 2,002 meters, with the upper 1,600 meters containing a thick section of Tertiary limestones and shales. According to the partners the limestones and shales appear to be a regional seal as no oil or gas shows were encountered above this depth. The well is currently drilling a 400-meter section composed of interbedded sandstones and shales believed to be Upper Cretaceous in age. Most of the sandstone intervals in this section have exhibited oil and gas shows confirming the existence of a working petroleum system. Determination of the quality of the reservoir and prospectivity of any potential oil bearing intervals cannot be determined until downhole electric logs and formation tests are concluded. The well has a planned total depth of 3,800 meters and has yet to penetrate the main reservoir targets in the Lower Cretaceous and Jurassic. It is expected that the next electrical logging run will be coincident with the running of the 9 5/8” casing at approximately 2,400–2,700 meters. Operations continue to run smoothly with no reported security or operational incidents.

Rialto Spuds Gazelle-P3 Offshore Cote d’Ivoire Rialto Energy spud its Gazelle-P3 well on Cote d’Ivoire’s CI-202 block on March 12 using the Transocean GSF Monitor jack-up drilling rig. The well is planned to be drilled to a total depth (TD) of about 3,400 meters measured depth and is expected to take around 60-70 days to drill and test. The well is the first of an overall three-well drilling program on CI-202 that is anticipated to take six months to complete, together with testing. The Gazelle-P3 well, which will be drilled from the Gazelle subsea template, is designed to be drilled as a deviated hole and will target already tested sands over the Upper Cenomanian reservoirs and will be deepened to test a combination structural/stratigraphic trap in the Lower Cenomanian that have never been drilled before.

Sudanese Bid Round Receives Response Sudan received 10 bids from companies to explore new oil and gas blocks, State Oil Minister Ishaq Adam Gamaa, told Reuters. The oil ministry launched the bid round for blocks 8, 10, 12B, 14, 15, and 18 earlier this year and the bid round closed at the end of March.

Puntland Partners Encouraged by Shabeel-1 Drilling Horn Petroleum and Range Resources Ltd. reported on the continuing drilling of the Shabeel-1 well on the Dharoor Block in Puntland

Apache-Led JV Completes Kenyan Seismic Apache Corp. and Pancontinental Oil & Gas completed the Nanaa 3D seismic survey over Block L8 offshore Kenya covering about 1,400 sq km. Data processing and interpretation are expected to be completed by the end of 2012. This survey is in addition to the earlier Mbawa 3D survey which has potential to contain more than 4.9 billion barrels of oil (P10, in place, unrisked) and a corresponding P50 value of

Petroleum Africa April 2012

9


Africa at Large approximately 2 billion barrels of oil (in place, unrisked), although these can only be verified by drilling. Drilling on the Mbawa Prospect is currently planned for during or before Q3 2012.

LoI Leads to Namibia for Petro Viking The latest company working to gain access to Namibia is Petro Viking Energy, entering into a LoI with Grisham Assets Corp. to acquire 100% of the issued and outstanding shares in the capital of Grisham. The firm’s principle asset is an agreement to acquire an 80% interest in Namibian Blocks 1810, 1710, and 2913B offshore the country’s coast covering more than 20,000 sq km. The Ministry of Mines and Energy of Namibia issued a Petroleum Exploration License on Block 1710 and licenses are pending on Blocks 1810 and 2913B, which are expected to be granted prior to closing. The remaining 20% is a carried interest held by NAMCOR and a Namibian Black Economic Empowerment group.

Chinook and Cygam Ready for New Tunisian Well The Chinook Energy operated BJA-2 well on the Bir Ben Tartar production concession within Tunisia’s Sud Remada permit is set to be drilled. The Bir Jaouacha will be drilled to a total depth of 1,580 meters to evaluate the hydrocarbon potential of a new large structure, located about 17 km from the producing TT structure. The main targets of the BJA-2 well are the Bir Ben Tartar and Lower Jeffara Formations of lower Ordovician age, which are the same reservoirs that produce oil in the TT structure. An extensive coring program of approximately 60 to 80 meters in length is planned in the Lower Jeffara and Bir Ben Tartar reservoir formations.

Brenham Lands in Equa G American International Industries subsidiary, Brenham Oil & Gas, officially landed in Equatorial Guinea after receiving a 15% participating interest in four offshore exploration blocks. In January the company announced that it had been invited to negotiate the terms and conditions for multiple deepwater exploration blocks. The names of the blocks were not released however. Rog Hardy, VP of Brenham said: “These four blocks are in between and along geologic trend with a large producing oil and gas field complex with peak production of more than 80,000 bpd of oil and an undeveloped oil discovery. The

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Petroleum Africa April 2012

blocks awarded to Brenham total more than 500,000 acres. We are very excited about the exploration potential of these blocks.”

Maurel et Prom Ups Gabon Reserves Maurel et Prom (M&P) had its P1+P2 reserves net of royalties certified in Gabon by DeGolyer & MacNaughton at the outset of the year. According to the report the company’s P1+P2 reserves net of royalties in Gabon are sitting at 177 million barrels of oil. M&P revealed that work carried out at the fields, including improved water injection and drilling undertaken, added 8.7 million additional barrels of oil, to be compared to a production net of royalties of 5.4 Mboe in 2011. Its P2 reserves rose by 26 Mboe to 120 Mboe. This progression is due to the increase of oil in place on most of the fields. In addition to its P1 and P2 reserves, the group also has P3 reserves net of royalties of 85 Mboe. M&P said that in the next few years it intends to continue developing the producing fields in Gabon. A 3D seismic campaign is in progress to better image the reservoir compartmentalization and optimize water injection scheme with the drilling of new production and injection wells. Surface facilities and evacuation capabilities will be adapted according to these developments. In addition, the company launched a 2D seismic data acquisition campaign in late-2011 across all its permits in Gabon to highlight targets for exploration. All this seismic data will be processed during the year and exploration drilling will begin in 2013.

BP Adds to its Namibian Portfolio BP acquired a stake in Namibia’s Southern Block 2714A from Petrobras, giving it another 20% in Block 2714A. This change to the equity ownership does not affect the current program for License 20, which contains the drill ready prospect Nimrod. As announced previously, the partnership plans to drill the exploration well Kabeljou-1 on the high impact Nimrod Prospect in H2 2012. Following the closing of this transaction ownership of Block 2714A now stands at Petrobras (operator) 30%, BP 45%,with Enigma Oil & Gas Exploration (Chariot’s wholly owned subsidiary) remaining at 25%.

Partners in Uganda Work on Development Options With the official closing of the deal that has Total and CNOOC joining Tullow Oil on its assets in

Uganda, active development of the over 2 billion barrels of resources has begun with the three partners working on development options. Once complete, they will be submitted to the Ugandan government for approval. Small scale production is envisaged to start in late-2012 but substantial production from the Lake Albert Rift Basin is expected approximately 36 months after a basin-wide plan of development is approved by the government. Tullow, in its year-end results, said that based on this timetable, ramp-up of major production should commence in 2016.

SOCO Proposes DRC Work Plan SOCO International released its proposed work plan for Block V in the DRC which encompasses a portion of Virunga National Park, including a portion of Lake Edward. The company received approval to undertake an aerosurvey, which will get underway in the next few months. Dependent on the results of the survey, SOCO will then consider seeking approval, potentially around Q3 2012, to conduct a compressed air seismic survey on Lake Edward. Any activities beyond these would only be conducted with DRC approval and in conjunction with an appropriate consultation process with stakeholders. SOCO does not therefore anticipate undertaking any direct exploration activities within the Virunga National Park for at least six months.

Range to Explore Offshore Puntland Range Resources has garnered more acreage in Puntland, this time offshore obtaining a 100% working interest in the highly prospective Nugaal Basin Offshore Block. Under the agreement Range will commit to a 2D seismic program within the first three years, with further 3D seismic and an exploration well to follow in the second, three-year period. Range has committed $5 million for the tarmac sealing of an Airport Runway in Puntland at the government’s direction. The agreement is subject to a formal PSA being entered into and all necessary regulatory approvals with commercial terms resembling the company’s current onshore PSAs.

M&P Lands Offshore Namibia Maurel et Prom (M&P) scored access to two licenses offshore Namibia in the Walvis Basin, partnered with PGS Seismic UK, National Petroleum Corp. of Namibia, Livingstone Mining Resource Development, and Frontier Mineral Resources. The acreage covers License No 0044


Africa at Large (Block 2212B) and License No 0045 (Blocks 2313A, 2313B, and 2413A). Under the agreement with the government the first exploration sub period shall be for two years with a minimum exploration work of 600 km and 1,800 km of 2D seismic acquisition, for License No 0044 and License 0045 respectively. Minimum exploration work for a Second Exploration Sub Period of two years would include 3D seismic acquisition (100 sq km on License No 0044 and 300 sq km on License No 0045).

PSC Negotiations Continue for ERHC ERHC Energy Inc. and the National Petroleum Agency of Sao Tome and Principe (ANP-STP) are continuing to make progress on the most critical terms of the PSCs for ERHC’s two exploration blocks in the EEZ. The company reported that it participated in an intensive two-day face-to-face round of PSC negotiations with the ANP-STP in Sao Tome at the end of February in respect of its 100% working interests in EEZ Blocks 4 and 11.

Madagascar Ready for Production Madagascar could see production from the Tsimiroro field in 2012 according to Madagascar Oil. The field is expected to come online this year. The advent of production from the Tsimiroro field will be a milestone for the island nation as it will be the first sustained production the country has seen. The company also saw its reserves on the field revised upwards by Netherland, Sewell and Assoc. Inc. (NSAI) to 1.7 billion barrels.

ADX Ready for Sidi Dhaher Testing ADX Energy completed preparations for testing of the previously drilled Sidi Dhaher well and expects the contract for the Dietswell Rig to be formally signed. Scheduling to move the rig and auxiliary equipment to the well site is currently underway with key site personnel in place. An operational work program was agreed upon and finalized by the JV with testing operations expected to commence in April.

Afren and Lion Start Kenya Seismic Lion Petroleum Corp. and its partner Afren have started the acquisition of 1,800 km of 2D seismic on Block 1 in Kenya. After building the seismic camp and logistical preparations, recording of new seismic data has now commenced. The purpose behind the acquisition of new seismic is to delineate exploration prospects for drilling

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Petroleum Africa April 2012

during 2013. Depending on the rate of acquisition, the survey is expected to be completed in Q3 2012. The partnership is utilizing real-time field processing and interpretation of the new data.

ERHC Prepares for Chad Campaign ERHC Energy is getting set to launch an exploration campaign in Chad as it makes preparations for the commencement of its work program in the Chari-Ouest III, BDS 2008, and Manga blocks. The company issued a tender for an Environmental Impact Assessment, and is also seeking expressions of interest from qualified contracting companies to conduct seismic work and gravity and magnetic studies, which will be the focus of the first 18 months of the work program.

Anadarko Sees First Mozambique Flow Test Anadarko Petroleum Corp. and its partners on Mozambique’s Offshore Area 1 in the Rovuma Basin have the results from their first flow test offshore the country. The Barquentine-2 well flowed at an equipment-constrained rate of 90 to 100 Mmcf/d, with minimal pressure drawdown, providing confidence in well designs that are capable of 100-200 Mmcf/d. The Barquentine-2 well is located in water depths of around 5,400 ft in the Offshore Area 1 of the Rovuma Basin. The drillstem test was conducted by the Deepwater Millennium drillship, which is expected to be mobilized to the Barquentine-1 location for a second flow and interference test in the complex. The 2012 testing program also includes drillstem tests in the Lagosta and Camarao areas to the south of Barquentine.

BP Takes Bite of Serica’s Namibian License BP extended its Namibian position with another farm-in deal joining Serica Energy on License 0047 offshore the southern African country. Under the transaction, BP will pay to Serica a sum covering its past costs and earn a 30% interest in the license by meeting the full cost of an extensive 3D seismic survey. Serica’s interest in the license following completion of the seismic survey will be 55%. Serica said drilling in water depths ranging from 300 to 3,000 meters, requires sophisticated drilling techniques and equipment and is very costly. The company granted an option for BP to increase its interest in the acreage by meeting the full cost of drilling and testing an exploration well to the

Barremian level before the end of the first fouryear exploration period.

Simba Ready for Kenya Seismic in April Simba Energy Inc. obtained all the past geophysical data relevant to Kenya’s Block 2A. The reprocessing of 2D seismic lines has been completed and all other seismic data scanned and vectorized into digital format. Existing gravity and magnetic data has also been reprocessed and is now being interpreted in conjunction with the seismic work. Further, two exploration leads have already been identified in these early stages of the study. In addition, the project’s EIA was completed and approved by management and the company has officially submitted the assessment to the oil ministry. The work program for the block has already been approved by the ministry and will be accelerated. The work program includes a passive seismic survey which is anticipated to begin in April.

HRT to Farm-out Namibia Stakes Brazilian oil company HRT Participações plans to sell part of its holdings in Namibian offshore oil blocks, according to Wagner Peres, president of unit HRT America in a Reuters report. The company will look to offload some of its interests by June to help pay for exploration activities in its more than 68,800 sq km holdings. The company plans to maintain a majority stake in the 12 blocks where it plans to sell a stake, two of which are held with a 100% operated interest in the Walvis Basin. In the Orange Basin it holds eight operated blocks with more than a 90% interest. HRT also has a 3% non-operated interest in two Namibe Basin blocks.

Eco Receives Prospect Report on Namibia’s Sharon Block Eco (Atlantic) Oil & Gas Ltd. received an independent Leads Report for Blocks 2213A and 2213B, collectively the Sharon Block, offshore Namibia. The Leads Report included a (P50) Best Estimate of 7.79 billion barrels of prospective oil and was prepared by Gustavson Associates LLC of Boulder, Colorado. The data provided includes recently acquired 2D seismic data and reports from four wells that were drilled in the vicinity of the block. The interpretation of 605-line km of 2D seismic data acquired from WesternGeco over the Sharon Block has produced two leads. The leads which are interpreted as sealed structures are identified as the North Structure and the Wedge.


Around the World

AMERICAS CGGVeritas Set for First 3D Multi-Client Survey CGGVeritas has begun acquiring the Tabasco 3D multi-client survey near the Kuparuk and Alpine oil fields on Alaska’s North Slope. The company is deploying two of its proprietary high-end acquisition technologies for the first time on the tundra to acquire the 133 square-mile survey. The High-Productivity Vibroseis Acquisition (HPVA) is being brought to Alaska to produce the highest density 3D survey ever acquired on the North Slope. With more than 1,500 vibration points per square mile, achieving a new benchmark in offset and azimuth sampling, this survey will be a milestone in Arctic exploration. With the addition of EmphaSeis™ broadband vibroseis to achieve a vibrator sweep of more than four octaves of frequency, the CGGVeritas crew will acquire a high-density, broadband dataset for optimal depth migration and reservoir attribute work. The combination of these two technologies is ideal for imaging the complex reservoirs in this area, and for characterization of rock properties relative to the emerging shale oil resource play on the North Slope.

Bids Flow for Offshore Uruguay Uruguay’s offshore development blocks had ANCAP receiving 19 offers for exploration and production in eight of the 15 blocks on offer by nine of the 11 oil companies that qualified for the bidding process. More than 50% of the area will be explored by four companies new to Uruguay: BP, BG, Total, and Tullow Oil. Older contenders include Petrobras, YPF, and GALP. Blocks from three Uruguayan offshore basins were awarded including those in the Oriental del Plata, the Punta del Este, and the Pelotas basins. After the assessment of the winning bids and the approval of the Uruguayan government, ANCAP plans to sign contracts with the winning companies by September 2012. The winning companies will assume all the risks and costs generated by oil operations during the phases of exploration and production. The contracts will be classified as PSAs with 30-year terms with a contract term of 30 years, and ANCAP may extend the terms up to a maximum of 10 years. The exploratory period comprises a basic subperiod of three years, where the companies will execute the compromised exploratory program. There are two voluntary sub-periods that involves

the production of one exploratory well each, and the companies will be required to relinquish to Uruguay at least 30% of the area. ANCAP will have the option of buying totally or partially the oil production of the companies if it is needed for the national oil consumption of Uruguay.

base of 200 to 400 million barrels of oil equivalent, is expected to ramp up to approximately 45,000 boepd from the first three subsea wells. A fourth development well is expected to be drilled and completed later this year, as part of the planned Phase I development.

Sonangol Starfish and Partners in Brazil Run Production Casing

Pre-Salt Agreement Signed by FMC Technologies and Petrobras

Brookwater Ventures Inc., along with its partners Somoil Internacional de Petroleo do Brasil Ltda. and Sonangol Starfish Oil & Gas, agreed to run production casing to a total depth of 2,698 meters to test oil and gas shows in the 1-MAC-1-BA well on Block REC-T-166, Reconcavo Basin (Block 166).

FMC Technologies, Inc. announced that it has signed a four-year agreement with Brazil’s national oil company Petrobras for the supply of pre-salt subsea equipment. The total award would result in approximately $1.5 billion in revenue to FMC Technologies if all of the subsea equipment included in the agreement is ordered. The initial call-off has an approximate value of $900 million in revenue to FMC and includes 78 subsea trees.

The exploration well experienced a strong gas kick during penetration at the top of the Gomo Shale Member of the Candeias formation. Log and sample analysis identified that oil stained sandstone interbeds were responsible for the gas kick. Within the 500-meter Gomo Shale sequence in the 1-MAC-1-BA well, several potential hydrocarbon zones of interest have been identified, including a 10-meter fractured shale interval. Openhole image logs have confirmed the presence of fractures and this 10-meter interval will be tested through casing. Brookwater has acquired an undivided 30% working interest in Block 166 through Agua Grande, while Sonangol Starfish Oil & Gas, a subsidiary of Angola’s state oil company, has operatorship with a 40% working interest, and Somoil holds the remaining 30%.

Anadarko Sees First Oil from GoM Development Operator Anadarko Petroleum Corp. announced first production at the Caesar/Tonga development in the Green Canyon area of the deepwater Gulf of Mexico. Production from the development, with an estimated resource

FMC’s total scope of supply could include the delivery of up to 130 subsea trees, subsea multiplex controls, and related tools and equipment. The tree systems are for use offshore Brazil in water depths up to 8,200 ft. The equipment will be engineered at the company’s South American Technology Center and manufactured at its subsea facility. The subsea trees will achieve 70%


Around the World Brazilian local content and deliveries are scheduled to commence in 2014.

Argentina Revokes E&P Contracts Tecpetrol SA, Argenta Argentina SA, and Petrobras Argentina saw their concessions in the Neuquen province revoked after the companies allegedly failed to invest enough in the production of the province’s oil fields. Instead, officials have awarded the concessions to the provincial government’s oil and gas company, Gas y Petroleo del Neuquen SA. Under the Argentine president Cristina Kirchner’s administration, regulatory and political pressures have been placed on the country’s hydrocarbon sector blaming private sector companies for the lack of investment resulting in falling production. Argentina was previously a net energy exporter, but its import bill doubled to $9.4 billion in 2011. As one of the country’s top hydrocarbon producers, Neuquen is also thought to have significant shale deposits.

AUSTRALASIA Tag Oil Confirms New Zealand Discovery Tag Oil Ltd. confirmed a commercial oil discovery on the recently drilled Cheal-B6, Cheal-A9, and Cheal-A10 wells within New Zealand’s Urenui formation at a depth of approximately 4,593 ft. Strong initial flow test results were achieved, with each individual well having the capability to initially produce approximately 200 barrels of light oil per day, plus associated gas from highquality reservoir sands. Permit-wide 3D seismic interpretation, including data from pre-existing wells which all intersected Urenui pay, indicates that the Urenui formation has been deposited as a blanket sand, and is prospective for an oil discovery across the Cheal permit. The Cheal-B6, Cheal-A9, and Cheal-A10 wells will be placed on full-time production, along with other established producing wells, once the enhancements to Cheal’s artificial lift capabilities have been completed. These upgrades will allow TAG Oil to produce all existing and future wells simultaneously, and are expected to be complete within the next three months.

14

The well was drilled to a depth of 3,250 ft TVD on the eastern flank fault block at Bua Ban South, approximately 1.5 miles south of the Bua Ban Main A-11 well. The A-04 well encountered 42 ft of net pay in the Lower Miocene M75 and M100 sands with 29.5% average porosity. Initial results indicate that this is an extension of the Miocene reservoir which was encountered in the Bua Ban Main A-11.

on April 1 and is being transported via three barges that will arrive at the Luwe Hulu staging area in Kalimantan by the end of April. The equipment will take about one week to transport to the drilling location.

EnerMech Secures 1st PPU Contract in China

ENI successfully drilled an appraisal well in the Skrugard discovery in the Norwegian Barents Sea. The well, drilled at a water depth of 388 meters, reached a total depth of 1,740 meters and is located approximately 3 km from the Skrugard-1 discovery.

EnerMech secured its first major pay-per-use (PPU) contract in China and will perform nitrogen/helium leak testing, leak repair, and high pressure hydrojetting services on behalf of Hanas New Energy Group. The engineering services group will supply personnel and a range of leak testing spreads, pumps, tanks, and bolt torquing services at the Ningxia Hanas LNG plant under construction in Yinchaun.

Partners Complete 2D Seismic Survey in Indonesia Spectrum, in partnership with CGGVeritas and GeoData Ventures, commenced a broadband 2D multi-client seismic survey offshore West Timor, Indonesia, utilizing CGGVeritas’ BroadSeis™ technology. The largely pre-funded program will cover 3,340 km over the Timor trough, with CGGVeritas providing acquisition, and processing services. The survey is situated within an underexplored region with a complex geology, making the combination of BroadSeis™ acquisition and pre-stack depth migration the optimal technology solution for this area. Final deliverables are expected to be available in November 2012.

Aker Solutions Tagged for Multiple Contracts Aker Solutions won a contract, totaling about $64 million, with a subsidiary of Honghua Holding Ltd. of China to deliver high specification drilling equipment components for seven new onshore drilling rigs. Each drilling equipment delivery includes a draw-work, three mud pumps, a 1,000-tons top drive, and other equipment from Aker Solutions. The company will deliver the first equipment sets to the customer in Q4 2012.

Thailand a Hit for Coastal

Sound Oil Announces Spud Date in Indonesia

Coastal Energy Co. announced the successful Miocene discovery in the Bua Ban South A-04 well in Thailand.

Sound Oil, as operator, has announced that it will spud the Kerendan gas field as expected in early June. The drilling rig was mobilized from Batam

Petroleum Africa April 2012

EUROPE/CIS ENI Drills Appraisal Well in Barents Sea

The well encountered a gas column of about 25 meters and an oil column of 48 meters in the middle-lower Jurassic reservoir of the Stø and Nordmela formations. Intensive data collection and sampling have been carried out in the wellbore and the results show a reservoir of excellent quality. Estimates confirm that Skrugard holds at least 250 million barrels of recoverable oil and approximately 10 Bcm (standard) of associated and free gas. A new exploration campaign in the PL532 license is scheduled to start by the end of this year and will lead to the drilling of new wells aimed at confirming additional hydrocarbon volumes to be linked to the production hub.

RWE’s Farms-in to Norwegian Continental Shelf RWE Dea Norge AS, a wholly-owned subsidiary of the German upstream company RWE Dea, entered into an agreement with Wintershall Norge ASA to acquire a 10% equity in Production License (PL) 418 in the North Sea. The company is pursuing more assets in the area with the farm-in still subject to approval from the Norwegian authorities. RWE operates the adjacent PL 420, where the Titan discovery was made in 2010, and is also a partner in the producing Gjøa field. The first well (35/9-7) in PL 418 is located 14 km southwest of the Gjøa field. The well will test the hydrocarbon potential of the Skarfjell prospect.

Wintershall Starts North Sea Production Wintershall is continuing to step up its activities in the southern North Sea and is now launching natural gas production from the K18-Golf field in the Dutch North Sea. By carefully designing the well and deploying a new downhole completion technology, Wintershall managed to


set new standards in field development and cost efficiency for tight gas reservoirs offshore.

reservoir interval encountered above the main Jurassic reservoir were completed.

The company initially plans to produce around 1.0 Mmcm of natural gas per day from the tight gas deposit via a subsea well. A second production well next summer is set to maintain a plateau between 1.0 and 1.4 Mmcm of natural gas per day.

This gas-bearing interval is proven to be a separate reservoir from those identified to date within the Miran structure. Technical work is being undertaken to understand further the distribution of this reservoir interval using existing well data and recently processed 3D seismic.

Aker Solutions Wins Two Norwegian Contracts

Following testing, drilling has recommenced in order to appraise the main Jurassic reservoir intervals which are the primary targets of this well. Further tests are planned and drilling is expected to be completed by May.

Aker Solutions won two contracts on the Norwegian continental shelf that will have the company conducting a FEED study for Det Norske Oljeselskap (DNO) on the Drauphne field as well as delivering subsea connection systems for the Draugen field. The FEED study will be carried out by Aker Solutions’ newly established engineering office in London, and delivered to the license partners in Q4 2012. The scope of work includes the delivery of complete tie-in connection systems for production flowlines and umbilicals for the expansion of the field, located to the west of Stavanger in the North Sea. For the Draugen contract, management, engineering, and procurement of the connection systems will be performed at Aker’s office in Fornebu, Norway with deliveries arriving between 2012 and 2013. The field is located in Block 6407/9 in the Haltenbanken area, which is situated about 140 km from Kristiansund, Norway, at a sea depth of 250 meters.

MIDDLE EAST

BP Negotiations for Kirkuk Oil Field Confirmed Iraq’s oil ministry confirmed ongoing negotiations with BP for the development of the Kirkuk oil field, hoping to add 300,000 bpd. It once produced 1.5 million bpd under Saddam Hussein’s rule; however, neglect has left the Kirkuk oil field in continued decline with massive repairs needed. The terms of a development contract have not been disclosed, but it is reported that Baker Hughes and Schlumberger are also interested in working on the field development.

PH Petro Completes Oman Well Test PH Petro announced that the company’s recently completed single-well test project for Oman’s Daleel Petroleum Co. has delivered an impressive 134% incremental oil gain. The project marks the debut of SUR+ (Surfactant Plus) in the Middle East and PH Petro’s first foray into the Arab markets.

Heritage Strikes in Kurdistan Heritage Oil Plc made a gas find on the Miran West-3 well in Kurdistan. At a depth of 10,039 ft, testing operations of a high pressure

The recently completed project gauges the effectiveness of PH Petro’s surfactant technology in improving oil recovery at a Daleel

producer well. PH Petro’s technology delivered 5,785 barrels of cumulative oil exceeding the baseline forecast by 3,171 barrels of oil. Evaluation efforts are now underway to extend the EOR pilot flooding to cover several injectors and a few producer wells for more improved oil recovery. The field implementation is forecasted to deliver an incremental gain of between 100% and 300%.

Gazprom Reactivates the Iraqi Bd1 Well Gazprom Neft began the reactivation of the Bd1 well at the Badra field in Iraq which will make it possible to determine the technical state of the well and subsequently test four productive strata at the site. The Badra oil field is located in the Wassit province in eastern Iraq with an estimated 3.0 billion barrels of oil-in-place. The development project is expected to last for 20 years with a five-year extension option, while the calculated investment is expected to amount to about $2 billion. Under the agreement, investors will be reimbursed for costs incurred and paid a bonus of $5.50 per barrel of oil equivalent produced. First production at the deposit is planned for 2013. By 2017 production is expected to reach 170,000 bpd and maintain this level for seven years. In total 17 operational and five injection wells will be drilled.

Noble Drills Ahead in Israel The Israel Petroleum Commissioner’s office granted an extension for the commencement of drilling of the first well on the Myra and Sara licenses until June 15. The Noble Homer Ferrington drilling rig is currently working in the Levantine Basin and, upon completion of the well, will be mobilized to the Myra-1 location in May for the drilling of the second well.


Downstream News Niger Looks to Chad-Cameroon Pipeline for Export Options Niger has petitioned Cameroon and Chad for throughput in the Chad-Cameroon pipeline. The request comes as landlocked Niger looks at export options for its crude production. State-run Cameroon Radio Television (CRTV) said that Niger’s Foreign Minister Mohamed Bazou made the request during a visit to Cameroon. “Niger wants to export its crude oil through the Chad-Cameroon pipeline and is seeking the accord of Cameroon and Chad,” CRTV reported. Niger’s request to ship its crude through the pipeline follows CNPC’s request for space in the pipeline to export its production. It is expected that other companies exploring in Chad and Niger will seek to export any finds made through the pipeline.

IOCs Team Up to Commercialize Alaskan Gas An international consortium made up of ExxonMobil, ConocoPhillips, BP, and TransCanada are working together on the next generation of resource development in Alaska. The four companies have agreed on a work plan aimed at commercializing North Slope natural gas resources within an Alaska Gasline Inducement Act (AGIA) framework. Two of the partners settled a long-running dispute with the government of Alaska. The settlement paves the way for Alaska’s massive gas reserves to make their way to the lower 48 states and parts international. The dispute was over the companies’ Point Thomson leases; the Alaskan government took away leases from the companies because of limited drilling activity. The settlement was key to a future pipeline because the fields there hold some of the largest and easiest-to-access gas reserves. Although the partners are considering other export options as low natural gas prices in the US have made the pipeline a less attractive option.

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and stable fiscal terms with the State of Alaska to first be established,” the CEOs of ExxonMobil, ConocoPhillips, and BP wrote in a joint letter to Alaskan Governor Sean Parnell.

NNPC Issues Oil Tender Nigeria, the continent’s top producer, will begin selling its oil via annual term contracts in June. An official notice issued by state-run NNPC said that it has opened a tender process to sell its oil under multi-billion dollar annual term contracts. The state-run firm has invited refiners, trading houses, and local Nigerian oil companies to submit bids by April 5. The notice did not specify the volume of oil to be awarded in the 2012 contracts. NNPC said it planned to maintain “regional balance” in the distribution of oil to Africa, Europe, and Asia as well as North and South America. Companies responding to the tender must have an annual turnover of $600 million and be able to pay a $5 million deposit before buying the first oil cargo.

New Storage Facility for Ghana Ghana’s state-owned Bulk Oil Storage and Transportation Co. Ltd. (BOST) plans to begin construction on a storage facility in Atwereboa in the Ahanta West District of the western region. The facility, expected to cost $200 million, will store LPG and other petroleum products. A Ghana News Agency (GNA) publication cited Dr. Yaw Akoto, MD of BOST, as saying that the terminal would receive LPG from the proposed Ghana Gas Facility at Atuabo for transportation to BOST branches in the country. Three hundred acres of land have been acquired for the new storage facilities. The project, which is expected to take off before the end of the year, will take about 24 months to complete. The GNA article said that officials are negotiating with the Lands Commission on the terms of payment for the land.

ExxonMobil said that due to the rapidly evolving global gas market, large-scale LNG exports from south-central Alaska will be assessed as an alternative to a natural gas pipeline through Alberta, Canada. The plans would also likely include pipelines to supply Alaska itself with natural gas for local consumption.

Transneft to Halt Shipments to Moscow Refinery

“Commercializing Alaska natural gas resources will not be easy. There are many challenges and issues that must be resolved, and we cannot do it alone. Unprecedented commitments of capital for gas development will require competitive

Transneft spokesman Igor Dyomin told Interfax that the pipeline’s condition was so critical it could no longer be operated. Dyomin said that the section of the pipe that is in critical condition runs through the preserve and the

Petroleum Africa April 2012

Russia’s Transneft is contemplating suspending crude shipments to the Moscow Oil Refinery through the Yaroslavl-Moscow pipe due to the poor condition of the section of pipeline that passes through the Losiny Ostrov national park.

company cannot get in to fix it without special authorization. In light of the company’s inability to repair the pipes on that section Transneft will be forced to halt supplies of oil along this system until the issue of the repair is resolved. The company plans to get together with Gazprom, the owner of the refinery, to begin negotiations on whether the crude supplies to the refinery will halt.

Chevron to Expand Additive Plant in Singapore Chevron plans to double its production capacity from its Oronite lubricant additives plant in Singapore. The company gave the green light for a multi-million expansion of the petrochemical plant on Jurong Island to meet growing demand in the Asia-Pacific region. The Oronite plant, which cost an initial $200 million, has been upgraded several times since it came online in 2009. The latest expansion is scheduled for completion in 2014. The investment involves expanding the Singapore plant’s manufacturing, blending, and shipping capacity, as well as improving its overall infrastructure. Once the expansion is complete Chevron will have more than doubled the size of the facility since it was first commissioned.

Foster Wheeler Scores FEED Gig in Dominican Republic Foster Wheeler’s Global Engineering and Construction Group subsidiary has been awarded the basic design and FEED contract for a new LNG receiving terminal and jetty to be built in San Pedro de Marcorís in the Dominican Republic. Foster Wheeler’s contract value for this project was not disclosed but it will be included in the company’s Q1 2012 results. Foster Wheeler previously completed a feasibility study for the selection of the most suitable technology for the new terminal, which will be designed for a send-out capacity of 240 Mmcf/d with an LNG storage tank of 160,000 cubic meters. The design will also consider future expansion(s) up to 700 Mmcf/d. Foster Wheeler will work with a local partner in executing this work, expected to be completed in September 2012. “We are pleased to receive this award, which demonstrates our client’s satisfaction with the feasibility study we have completed and Complejo GNL del Este’s confidence in our LNG expertise and ability to deliver fast-track execution strategies,”said Umberto della Sala, President and Chief Operating Officer, Foster Wheeler


AG. “Latin America is a strategically important region for Foster Wheeler, and is a region where we already have a very strong track record in winning and successfully executing large, complex projects.”

Museveni Proposes South Sudan Pipeline Through Uganda Uganda’s President Yoweri Museveni would like the proposed pipeline from South Sudan to the Kenyan port of Lamu to pass through Uganda. Uganda’s Daily Monitor cited Museveni as telling Kenya’s VP Raila Odinga that he understood Kenya’s position since the newly-independent South Sudan is in urgent need of a functional oil pipeline within one and a half years. If the pipeline passes through Uganda it would give the East African country a potential outlet for its own oil production, which is expected to come online in the next year or so. Uganda had hoped to jointly construct a pipeline with South Sudan, an idea brought to the forefront by Total CEO Christophe de Margerie. Museveni’s hope is to use Uganda’s planned oil refinery to process crude from South Sudan and then export it to the West via Port Mombasa in Kenya. The Daily Monitor also said that Museveni had earlier advised South Sudan to build its own refinery rather than having its crude oil refined in Kenya as that would create jobs for South Sudan, and that he was surprised by Juba’s deal with Kenya that will have the oil resource refined there.

Engen Makes Cleaner 50ppm Diesel Available at All 1-Stops Engen Petroleum is making ultra-low sulphur diesel available to its entire 1-Stop network of long-haul service stations. The company has 45 long-haul service stations. Pierr Roodt, retail marketing manager for the company, said that despite several constraints on the supply of 50 parts-per-million (50ppm) diesel, Engen has made sure customers driving new diesel vehicles can get it when travelling longer distances. “We have tried to ensure that our customers do not run into difficulty in situations when their choices are fewer,” Roodt said. Engen has a range of plans to overcome supply restrictions. “We have made supply arrangements to ensure the availability of the fuel in the inland [PWV] region.” Engen imports 50ppm diesel and then transports it with bulk fuel trucks and ships along a distribution network front-ended by regional

depots, from where Engen and contracting suppliers transport it to various locations using bulk fuel trucks. “Depot capacity remains challenging, particularly the larger depots of Wentworth in Durban, Milnerton in Cape Town, and Langlaagte in Gauteng,” says Roodt, “but Engen is unlocking more storage for 50ppm diesel by reconfiguring existing depot tanks and lines.” Roodt says with these factors at play, demand is likely to escalate, which will exert pressure on suppliers and infrastructure. “We will continue to investigate new supply chain solutions to overcome any problems and ensure we are meeting demand,” he says.

Mercuria Looking for Saldanha Bay Partner Mercuria Energy Group is looking for a partner to run an oil storage tank in South Africa when it renews the leasing contract, according to market sources quoted in a Reuters report. The company leases one of the six tanks at Saldanha Bay under a contract with the statecontrolled Strategic Fuel Fund (SFF). The contract expires later this year. The tank has capacity to store up to seven million barrels of crude oil. “Mercuria is using the site mainly for blending. Storage is tough now with backwardation in the market. So they want to renew the contract with somebody,” one of the sources said in the report.

Ghana Promotes LPG Usage

Egypt’s Pipeline Explodes Again

The Ghanaian government is encouraging its citizens to increase their usage of LPG once the fuel becomes more readily available in the country. Currently a gas processing plant is being constructed to produce LPG. The government expects the plant to be online in 2013.

Reports out of Egypt have it that its pipeline supplying natural gas to Jordan and Israel has been hit yet again. On March 5 six gunmen in an unmarked vehicle allegedly set explosives in two different parts of the pipeline, about 15 meters apart, according to an official quoted in an AFP report.

The Ministry of Energy has formulated a strategy to promote the use of LPG in domestic and public institutions. Dr. Joe Oteng Adjei, Ghana’s minister of petroleum, is aiming to have LPG usage increase from its current level of 12% in domestic and public institutions to 50%. The initiative is expected to commence in 2013 when the gas processing plant to process natural gas from the Jubilee Field becomes operational.

The latest blast marks the thirteenth time the pipeline has been sabotaged since the fall of President Hosni Mubarak early last year. Each time a blast occurs the ruling military council has stated they would step-up security efforts, but so far any effort has been ineffective. The pipeline has been shut-in on and off over the past year to allow for repairs.

Yemen LNG Blast

South Sudan to Export Crude by Truck

A pipeline explosion caused the closure of the Total-run Yemen LNG terminal. Reports have gunmen blowing up a 38-inch gas pipeline that feeds the facility. The pipeline links Yemen’s Block 18 to the LNG terminal at Balhaf on the Gulf of Aden.

South Sudan is lining up its plan to get its oil production flowing again through pipelines to ports in Kenya and Djibouti. As a temporary measure, until the pipelines are complete, the government plans to ship crude for export by truck.

The explosion on the feed pipe is expected to eliminate about four cargos from the export schedule. This is the second explosion seen at the LNG terminal since October 2011.

Toward that end South Sudan plans to build a temporary underwater oil pipeline along the Nile River. The pipeline would extend from oilfields to the capital Juba where the crude would be transferred to trucks and taken on to Kenya and Djibouti, South Sudan’s Minister of Petroleum and Mining Stephen Dhieu Dau told Reuters. While this measure would only ensure a small portion of the country’s production made it to market, about one-tenth, it would aid in adding some revenue to the country’s depleted budget. 30,000 bpd of crude would be delivered to ports under the project, which could be completed by the end of the year, Dau said to Reuters. Prior to shutting-in all its production South Sudan was producing around 350,000 bpd.

The latest incident was thought to be in retaliation for a US drone attack that killed at least five suspected al Qaeda militants earlier. “Yemen LNG confirms the sabotage,” said Yemen LNG, which is run by France’s Total, in a statement. “Production has stopped but the loss of production is expected to be limited to four cargoes as the LNG plant was due to shut down on April 15 for annual maintenance.”

Petroleum Africa April 2012

17


African Politics Malian Troops Stage Coup Renegade soldiers launched a coup d’etat in Mali on March 22 declaring on state television that they had seized power in protest of the government’s inability to handle the rebellion taking place in the northern region of the country. The army had appealed to the government for better weapons to fight the northern Tuareg rebels whose arsenal was being bolstered by Libyan loyalists fled over the border. The newly-formed National Committee for the Return of Democracy and the Restoration of the State (CNRDR) had a member read a statement after citizens of Mali’s capital Bamako heard heavy weapons fire around the presidential palace. “The CNRDR ... has decided to assume its responsibilities by putting an end to the incompetent regime of Amadou Toumani Toure,” said Lieutenant Amadou Konare, spokesman for the CNRDR. “We promise to hand power back to a democratically elected president as soon as the country is reunified and its integrity is no longer threatened.” The self-proclaimed junta leader called for a “national convention” on April 5 so that political and society representatives could create a consensus on how to deal with the challenges facing the nation. Meanwhile, an influential politician has called for a six-month transitional government to unite the country prior to organizing elections. The UN Security Council held an emergency session noting that the situation in Mali had taken a turn for the worse. Tuareg rebels launched an offensive on March 30, seizing three key cities that were formerly under army control. An Islamist militant group called Ansar Dine also entered some areas and started imposing Sharia, or Islamic law. The separatists in the north appear divided between Islamic fundamentalists and Tuaregs, who say they want to turn the area into a separate,

democratic and secular nation embracing a moderate strain of Islam. However, reports out of the town of Kidal said gunmen went through the streets demanding that residents remove pictures of unveiled women from hair salons and other shops.

Blast Shakes Brazzaville An explosion at an arms depot in the capital of the Republic of Congo (ROC) on March 4 left around 200 people dead with hundreds more injured by the blast that flattened homes in Brazzaville. The blast even shattered windows across the Congo River in the Democratic Republic of Congo’s (DRC) Kinshasa. While rumors of a coup made the rounds after the blast, the country’s defense minister Charles Zacharie Bowao dismissed the talk telling state radio that the explosions had been caused by a fire in the arms depot in the Regiment Blinde base.

Wells Bombed in South Sudan Accusations in the two Sudans are flying once again as South Sudan claims that Khartoum bombed two of its oil wells. Reports have two wellheads and flowlines destroyed, as well as two cars, but no casualties. The oil wells are operated by the Greater Nile Petroleum Operating Co. (GNPOC), a consortium made up of Chinese, Malaysian, and Indian stateowned firms. Spokesman for the South Sudan government Barnaba Marial Benjamin said two MiG aircraft dropped six bombs on oil fields in Unity State, violating a non-aggression pact signed by the two countries. The South has also accused Khartoum of moving some of its troops and weaponry close to an army base near the border. Khartoum denied the bombing saying it has not violated the nonaggression pact signed in early February.

Khartoum’s military spokesman Al-Sawarmi Khalid said Sudanese forces had not been involved in any bombing inside the South.

Equatorial Guinea Slams France for Illegal Seizure Police in Paris seized valuable items like paintings, vintage wines, and expensive cars from the son of Equatorial Guinea’s president as a result of corruption charges. Teodoro Nguema Obiang Mangue is accused in a civil suit of using misappropriated funds to acquire assets in France. The matter was brought to French courts by the Paris office of anticorruption group Transparency International. The African country claims that the raided building was an embassy, but French prosecutors say it is the private property of Teodorin. Equatorial Guinea took it a step farther accusing individuals in France of attempting to destabilize the country, basing claims on a coup attempt led by a group of foreign mercenaries in 2004. The former Spanish colony released a statement condemning France’s actions saying: “Given this open provocation against the Equatorial Guinean state, the government of the Republic of Equatorial Guinea recommends to the government of the French Republic that it take immediate action to curb the continuity of these destabilizing activities, and it reserves the right to reciprocate, since, if France wants a rupture of relations with the Equatorial Guinean State, unilaterally, they should state it clearly.” This has serious implications for French companies in the country as Equatorial Guinea is Africa’s sixth-largest oil producing nation. The country said, “Despite the good relations the government of Equatorial Guinea maintains with the French companies established in the country, we understand that these companies must contradict this action, repair, and share the negative consequences that arise from this situation.”


Power & Alternatives Sierra Leone to Revive Bankasoka Hydropower Plant Sierra Leone is looking to break ground for the construction of a small-scale hydropower plant on its Bankasoka River. The European Union had initially expressed interest in getting involved in the project, but the country instead opted to bring China onboard. The project is expected to produce 1 MW of energy with the help of a UNIDO-led team comprised of engineers from China and the Energy Resources Institute of India (TERI). The project is expected to be online in 2013.

Ethiopian Wind Project Set for June Completion Ethiopia’s Adama wind power project is nearing completion with the potential capacity of 51 MW from a total of 34 towers each generating 1.5 MW. The $117-million project, launched in June 2011, is expected to be complete by this June. The majority of the funding for the project came from a loan from the Chinese Import-Export Bank and the bulk of the work was contracted out to Chinese firms. The mechanical work was done by Hydro China while Chinese contractor CGOC was in charge of the civil work.

Kenya and Ethiopia Cooperate on Power Kenya signed an agreement to purchase power from Ethiopia covering the importation of 400 MW of electricity from the Ethiopian government annually. The announcement of the agreement was made in Kenya at a state banquet in honor of the visiting Ethiopian Prime Minister Meles Zenawi. Mwai Kibaki, Kenya’s president, said the agreement was a good achievement that showed the interdependency of the two countries in the pursuit of socio-economic development. Kibaki said that lack of infrastructure has presented challenges to increased trade between the two countries.

Guinea: Bartering Food for Power Establishing a payment method that is areaspecific seems to miss many areas in Africa, but one small private electricity supplier in Guinea launched a service that has 100% of the villagers paying their electricity bills on time. The West African country is seen as one of the most corrupt and unstable places in Africa, yet the rural village of Goyola is spearheading a campaign that is indicative of the establishment

20

Petroleum Africa April 2012

of more such projects. The innovative payment model allows locals to connect to the electricity grid in exchange for the produce grown, instead of cash. The produce-based payment model was the outcome of discussions between the small private operator, La Société Électricité Nakoloma De Goyola (ENDG), and the Bureau for Decentralized Rural Electrification (BERD) government agency. The area is known for its agriculture, particularly rice, maize, peanuts, coffee, bananas, and palm oil. However, for farmers to sell the goods for cash, they must transport the materials on foot to the nearest market which is at least 6 km away. Nava Touré, director of BERD, shared the Goyola story with 230 representatives of African rural energy agencies and funds, ministries, utilities, and regulatory agencies when they met in Dakar in November. Goyola’s public-private partnership (PPP) model for scaling up rural access was the winner in a Call for Papers on innovative solutions to Africa’s electrification challenges organized by the World Bank’s African Electrification Initiative (AEI).

Nigeria/GE Sign MoU on Power Nigeria and GE have signed an MoU for the investment of $10 billion in new power plants. Under the agreement, GE will have a 10-15% equity stake in the plants. A spokesman said GE would join forces with the government and power partners after privatization of Nigeria’s power sector, according to a Reuters report. Currently the government is looking to build gas-fired stations to take advantage of its massive natural gas reserves, although it was not reported what kind of power plants GE would be involved in. Nigeria’s power sector is severely deficient in its capacity to power the country, and while attempts have been made in the past to privatize the sector to bring it up to date, these attempts have not gone as well. In February the government delayed its timeframe for selling off state-owned power plants, squashing any hope that reforms would be in the offing anytime soon. Besides using natural gas to power the country, the Nigerian government is also looking at renewable energy to keep the lights on. Earlier this month the governments of Nigeria and Germany signed a renewable energy deal amounting to about $19 million. On March 26 Nigerian president Goodluck Jonathan said that a comprehensive roadmap for

the power sector was to be implemented to stabilize the country’s power supply, which includes the rehabilitation of some hydropower plants.

Joule Africa Lands IPP in Cameroon Energy developer Joule Africa and the government of Cameroon entered into an MoU for the development of the Kpep Hydroelectric Project. The project is expected to increase the country’s current installed power generation capacity by at least 40%, and the project is expected to have an installed capacity of more than 450 MW upon completion. The project is located on the Katsina-Ala River in Menchum Division, near the Nigerian border. In addition to the increase in power capacity, which will boost economic development, the project will create jobs as well as opportunities for training and the transfer of industry expertise to local residents. Joule Africa will undertake the development with local partner Bethel Industrievertretung Inc. Ltd and European engineering firm Lahmeyer International GmbH.

Mozambique Power Plant Feasibility Study Advances Sasol’s feasibility study for a 140-MW gas-fired power plant to be developed in Mozambique is in its advanced stages. The plant, if Sasol goes forward, will be developed near Ressano Garcia. While the project has not been board-sanctioned yet, it could be pursued in a JV between Sasol and Mozambique’s state-utility firm Electricidade de Moçambique. Senior group executive Lean Strauss told Engineering News Online that the project would be a copy of the R1.8-billion, 140 MW gas-fired power project currently under development at Sasolburg.

AFDB Gives Kenya Loans for Roads and Energy The African Development Bank (AfDB) is loaning Kenya about $337 million to finance the construction of roads and energy projects, bringing the total amount of support for the East African country to $1.5 billion. Robinson Githae, Kenya’s acting finance minister who represented Kenya at the function to sign the agreement, said the financing would help to facilitate inter-regional trade.


Market Movers Sonangol already holds a 15% indirect stake in Galp through its 45% stake in Portugal’s Amorim Energia, but is looking for a direct stake in the company.

Independent E&P Companies Top Performers Company

Symbol

Africa Oil Corp.

AOI.V

Exchange Currency Price as of Mar 30 1 Month % Change

52-Week Range

CDNX

CAD

4.20

102.8

1.10 - 4.49

Bounty Oil

BUY.AX

ASX

AUD

0.03

65.0

0.02 - 0.04

Simba Energy

SMB.V

CDNX

CAD

0.12

56.0

0.06 - 0.22

Pancontinental Oil & Gas

PCL.AX

ASX

AUD

0.21

40.0

0.06 - 0.24

Cooper Energy

COE.AX

ASX

AUD

0.66

36.4

0.31 - 0.69

Worst Performers Exchange Currency Price as of Mar 30 1 Month % Change

Company

Symbol

Groundstar Resources

GSA.V

CDNX

CAD

0.03

-41.6

0.03 - 0.54

Gulf Keystone

GKP.L

LSE

GBP

262.25

-27.9

87.00 - 465.00

52-Week Range

Madakena Ventures

MVN.V

CDNX

CAD

0.92

-26.9

0.39 - 1.41

Bowleven

BLVN.L

LSE

GBP

100.23

-26.2

58.54 - 414.25

Epsilon Energy

EPS.TO

TSX

CAD

2.60

-21.1

1.75 - 4.14

While not making it to either side of this period’s list, Tangiers Petroleum did make the financial news recently. The company halted its shares from trading on the ASX pending the release of an announcement on resource results. The company shares are still trading on the Alternative Investment Market.

Shell Uganda Sale Blocked The sale of Shell’s Ugandan unit, Shell Uganda Ltd., has been delayed due to an injunction blocking the sale. Uganda’s High Court blocked the sale from proceeding with further negotiations on the intended sale. The injunction was granted after an employee of the Ugandan unit initiated a lawsuit against the company. In the lawsuit the employee claims that the sale of the unit without their consent is illegal and directly opposes terms in the employee’s contracts of employment. The sale of the Shell Uganda Ltd. is part of Shell’s proposed deal to sell part of its retail and distribution business in 14 African nations to a partnership between Helios Investment Partners and Vitol Group, a Dutch international oil trader, for $1 billion.

FMC Wins Two Spotlight on New Technology Awards FMC Technologies, Inc. was the recipient of two Spotlight on New Technology awards by the Offshore Technology Conference (OTC). The awards, which honor innovative technologies that significantly impact offshore exploration and production, recognize FMC’s subsea processing systems designed for Total’s Pazflor field and Petrobras’ Marlim field. “We are honored to be recognized by OTC for a third consecutive year with these prestigious awards,” said John T. Gremp, chairman,

president and CEO of FMC Technologies. “This is a significant accomplishment for our employees and for our industry-leading subsea processing systems.” The Pazflor field is the world’s first use of subsea separation and boosting in a new subsea field that will produce two grades of oil (light and heavy). This technology enables economic development of the reservoir where the use of a conventional subsea production system was not feasible. The equipment for the Marlim field is a step-change in the evolution of subsea processing. It is the industry’s first use of oil and water separation technologies in deep water, and it is the first subsea system to separate heavy oil and water. FMC will receive both awards during a ceremony and press conference on April 30, in the Rotunda area of the Reliant Center in Houston, Texas.

Sonangol Eying ENI’s Galp Stake Angola’s state-run oil and gas firm Sonangol is looking to increase its stake in Portugal’s Galp Energia. According to wire reports, the Angolan NOC is eying a portion of ENI’s stake in the company. Sonangol is negotiating to buy half of Italian group ENI’s 33.3% stake in Galp, board member Sebastiao Gaspar Martins told Reuters on the sidelines of an industry event in Kuwait.

“We are working on that deal,” Martins said. “We will go ahead ... I think the deal will be done,” he said when asked if Sonangol is in talks to buy half of ENI’s stake.

Sea Dragon/NPC Egypt Acquisition Sees Movement Sea Dragon Energy Inc. entered into an Amended and Restated Share Purchase Agreement with Golden Crescent Investments Ltd. whereby it will acquire, directly or indirectly, all of the issued and outstanding shares of National Petroleum Company Egypt Ltd. (NPC Egypt). Under the terms of the revised agreement Sea Dragon will acquire, directly or indirectly, all of the issued and outstanding shares of NPC Egypt in consideration of the issuance of 437.5 million common shares of Sea Dragon at a deemed price of $0.20 per and $60 million of redeemable, convertible, non-voting preferred shares. These shares are to be issued, directly or indirectly, to Golden Crescent at the closing of the acquisition, subject to certain working capital adjustments made in accordance with the terms of the Amended Agreement. Sea Dragon said that the preferred shares will bear a preferred cumulative dividend of 7% per annum for the first 12 months after issuance, 10% per annum for the next nine months, and 12% per annum thereafter until converted or redeemed. In certain circumstances, dividends may be capitalized and added to the redemption value of the Preferred Shares. The Preferred Shares may be redeemed by Sea Dragon at any time after issuance in increments of not less than $20 million upon 45 days written notice. Golden Crescent has the right to convert the preferred shares, in whole or in part, into common shares of the corporation at a conversion price of Cdn$0.15 per common share at any time after the first anniversary of the date of issuance. Golden Crescent shall not be entitled to transfer the Preferred Shares until after the first anniversary of the issuance date. Sea Dragon has until May 8 to complete the acquisition (subject to a 10 day extension). Following execution of the amended agreement, Golden Crescent will be entitled until May 1, to solicit and entertain alternative proposals. In

Petroleum Africa April 2012

21


Market Movers Drilling & Service Companies Top Performers Currency Price as of Mar 30 1 Month % Change

Company

Symbol

Exchange

Subsea 7

SUBC.OL

Oslo

NOK

150.80

13.7

99.35 - 151.60

Petrofac

PFC.L

LSE

GBP

1740.00

9.1

1,045 - 1740.00

Technip

52-Week Range

TEC.PA

Paris

EUR

88.33

8.6

52.85 - 89.17

Transcocean

RIG

NYSE

USD

54.70

7.8

38.21 - 83.05

Shaw Group

SHAW

NYSE

USD

31.71

5.0

18.98 - 39.91

Worst Performers Currency Price as of Mar 30 1 Month % Change

Company

Symbol

Exchange

RPC Inc

RES

NYSE

USD

10.61

-35.5

Willbros Group

WG

NYSE

USD

3.24

-30.1

3.13 - 11.87

Nabors Industries

NBR

NYSE

USD

17.49

-21.6

11.05 - 32.47

Baker Hughes

BHI

NYSE

USD

41.98

-19.2

40.20 - 81.00

Geokinetics

GOK

NYSE

USD

1.76

-17.3

1.51 - 9.71

52-Week Range

9.31 - 19.37

RPC Inc. came in as this period's worst performer seeing a 35.5% drop in share price. 2012 has not been kind to the company compared to 2011. Last year the company tripled its share price, going from $5 per share in 2010 to a high of $18 per share in 2011. Unfortunately since the start of 2012 its share price has done nothing put drop. Investment website Seeking Alpha named the company one of the five underperformers for Q1 2012 saying it had a -19% return for the quarter.

the event that Golden Crescent receives a proposal it wishes to accept, it may terminate the amended agreement without any penalty or payment in favor of Sea Dragon of the previously contemplated termination fee or right of Sea Dragon to match any alternative proposal. The revised terms of the acquisition are subject to certain conditions precedent including Sea Dragon shareholder approval; receipt of all necessary consents and approvals from Sea Dragon’s existing senior secured lenders; completion of certain amendments to Sea Dragon’s senior secured reserve-based credit facility agreement and related agreements with BNP Paribas and HSBC; regulatory and stock exchange approvals; and completion, in accordance with the terms set out in the Amended Agreement of the proposed International Finance Corp. (IFC) financing announced by the corporation on January 31, 2012. Other than as set forth above, the terms of the acquisition, terms of the pre-closing reorganization, the net profits interest and the termination fee payable by Sea Dragon (with the inclusion of the above IFC and lenders conditions and confirmation by Sea Dragon of its ability to close the acquisition as additional termination fee events) remain substantially unchanged from the terms announced in the company’s January 8, January 9, and March 8 press releases.

22

Petroleum Africa April 2012

Schlumberger to Acquire SPT Group Schlumberger entered into an agreement with Altor Fund II to acquire SPT Group – a privately owned software company specialized in dynamic modeling for the oil and gas industry. The company provides a combination of software and consulting services for multiphase flow and reservoir engineering applications. Closing is subject to customary regulatory approvals. The acquisition of the SPT Group’s software offerings will complement the existing Schlumberger production software portfolio. Tony Bowman, president, Schlumberger Information Solutions (SIS) said: “In combination with the Petrel* E&P software platform and other SIS technologies, this will enable customers to further optimize production from reservoir performance to processing facilities.” SPT Group, founded in 1971, is headquartered in Norway and employs approximately 280 people in 11 countries worldwide.

FAR on Funding Mission for Kenyan Exploration Program FAR Ltd. intends to raise $15.04 million, to fund offshore oil and gas exploration in East Africa, specifically Kenya. The funds will be raised through a placement of 280 million shares at 4.3 cents per share to raise up to $12.04 million and a Share Purchase Plan of up to $3 million to existing shareholders.

The placement is being made predominantly to international and domestic institutional clients of Hartleys, the broker to the offer. A total of approximately 70 million shares at 4.3 cents per share will be offered under the SPP to eligible shareholders registered at March 28, 2012 with SPP documentation to be sent to eligible shareholders shortly. The SPP will open on April 2, 2012 and close on April 13, 2012. The capital raising will allow FAR to maintain its equity interest in Kenya’s Block L6 and Block L9, close to a string of recent major offshore gas discoveries in East Africa. FAR’s managing director Cath Norman said, “We were overwhelmed by the support shown for the placement. We received offers for a multiple of the money we sought to raise, which shows the interest that is building in the East African oil and gas province. FAR is one of the early movers in East Africa and has accumulated an enormous acreage position in prime exploration areas. I am confident that the rewards from several years of hard work in this area will now start to flow to shareholders.”

Beach Looks to Raise Funds for Africa Program Beach Petroleum is on a fund raising mission and aims to raise A$345 million through the sale of new shares and convertible bonds to help fund its drilling program, a portion of which will be used on its assets in Africa. Beach said it plans to spend up to A$650 million through June 2013 to expand its gas reserves in South Australia, develop oil finds in Egypt, and explore for oil in Tanzania. “Beach is entering a new and exciting development and exploration phase, which we believe has the potential to transform not only Beach, but also the Cooper Basin and the east coast gas market for years to come,” Beach Managing Director Reg Nelson said in a statement.

INOVA Completes First Sale and Delivery of its G3i™ INOVA Geophysical has made its first sale and delivery of G3i, the company’s newly released mega channel recording system. The sale was to China’s BGP, one of the industry’s largest land contractors. The purchase by BGP was for immediate use on a project in Western China. INOVA collaborates closely with all its customers to develop products that meet the advanced technical requirements and tough field


Nigerian Villagers to Get UK Court Day

Major E&P Companies Top Performers Company

Symbol

ENI

ENI.MI

Exchange Currency Price as of Mar 30 1 Month % Change

Milan

EUR

17.59

0.1

11.83 - 18.72

ConocoPhillips

COP

NYSE

USD

76.01

0.1

58.65 - 81.80

ExxonMobil

XOM

NYSE

GBP

86.73

-0.1

67.03 - 88.13

Company

Symbol

Total

FP.PA

Paris

EUR

38.05

-9.5

29.40 - 44.55

BP

BP.L

LSE

GBP

462.55

-6.7

361.25 - 554.00

BG Group

BG.L

LSE

GBP

1,448.00

-6.1

1,018.53 - 1,741.50

52-Week Range

Worst Performers Exchange Currency Price as of Mar 30 1 Month % Change

52-Week Range

ExxonMobil, one of last period’s worst performers, lost its title as the world’s largest publicly traded producer of oil. The company lost out this year to Chinese firm PetroChina who reported that it averaged 2.4 million bpd in 2011, bumping ExxonMobil out of the top spot by 100,000 bpd. PetroChina’s output increased 3.3% in 2011 while Exxon’s fell 5%. Not only did the supermajor slip out of the number one spot, it did not come in at number two either. The company was beat out for number two by Russian firm Rosneft.

specifications needed to produce consistent, high quality data. BGP participated throughout G3i’s development and initial field testing in November 2011. Following High Productivity Vibroseis (HPVS) testing in February, BGP purchased the original 5,000 channels used in the initial field testing and ordered an additional 10,000 in preparation for a large 3D HPVS project scheduled to begin in early April.

Expro to Sell C&M Unit to Siemens Expro has agreed to sell its Connectors & Measurements (C&M) business, including the Tronic and Matre brands, to Siemens AG at a valuation of $630 million. Expro’s C&M business is a market leader in the design, manufacture, assembly and installation of subsea electrical power and data connectors and temperature and pressure sensors. The C&M business had revenues of approximately $119 million in the calendar year

2011. The C&M business employs approximately 450 people in Ulverston in the UK, Bømlo in Norway, Houston in the US, Niterói in Brazil, and Johor in Malaysia. Expro CEO, Charles Woodburn, said: “We received several unsolicited indications of interest for our C&M business last year, allowing us to explore strategic alternatives that led to the optimal outcome for our shareholders, customers and employees. We are very pleased with the result of the sale process. We will look to use the net proceeds from the sale of the C&M business to repay existing borrowings and support our strong position within the industry by further investing in the growth strategy of our core business. We wish Siemens and everyone at C&M every success in the future.” The transaction is conditional upon receipt of approval from competition authorities in Norway. Completion of the sale is expected to take place in May 2012.

A UK court will be the site of a battle between Shell and a fishing community in the Niger Delta. Lawyers representing the Nigerian fishing community will argue for compensation for the villagers following a breakdown in compensation negotiations with Shell over two oil spills. Shell, in August, admitted liability in a legal claim brought in the UK on behalf of Nigerians living in the Bodo community in Ogoniland. However, the two cannot come to terms on acceptable compensation. Shell says that the two spills totaled 4,000 barrels, while lawyers for the villagers say some 500,000 barrels were leaked into the environment surrounding the Bodo community. Martyn Day, a lawyer from Leigh Day, said in a statement: “We are desperately disappointed that the attempts to negotiate a settlement for all those affected have now failed.” “We had thought that the invitation to sit around the table meant that Shell was taking the impact of the two oil spills seriously.” “We are now left with the only option of taking the claims through the UK Courts to obtain justice for the people of Bodo.”

DuPont Expands with Two Moroccan Offices DuPont is expanding in North Africa, opening two new offices in Morocco. The company, as a part of its continued growth strategy in key developing markets, opened offices in Casablanca and Tangier. The company said that Morocco’s dynamic and solid economic environment and its preference for new technologies and practices that achieve sustainable development make it a perfect market for DuPont to consolidate its diverse, multi-industry offerings.


Downstream Focus By Ricardo Silva and Nuno Cabeçadas Miranda Correia Amendoeira & Associados *

The LNG Dilemma Legal Issues in Securing Access to Gas Angola, Equatorial Guinea, and Mozambique

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n LNG project is completely different from your typical upstream crude oil production venture. While in the latter case, there is a thriving international spot market, and numerous companies waiting to acquire the crude oil as soon as it is extracted from the reservoir, in the former, a complex value chain must be put in place to ensure the project’s economic viability. In simplistic terms, the LNG value chain can be broken down into (i) upstream gas production, (ii) transportation to the liquefaction plant, (iii) liquefaction and storage, (iv) shipping to the target market, (v) offloading, (vi) regasification, and (vii) subsequent marketing. While it’s true that, to guarantee its commercial success, an LNG project should be structured on a long term LNG supply agreement (to allow for the sale of the gas and full recovery of construction, financing and operating costs, and a reasonable profit margin), one cannot forget the crucial preliminary step of upstream gas production and access. Without enough gas to keep the liquefaction trains busy for the estimated life of the project, an LNG project will be doomed to operational and financial failure. In view of the foregoing, access to gas should be considered one of the crucial elements (and a condition precedent) of an LNG project, and is important at two different stages of an LNG project’s life cycle: at the beginning of the project (to ensure its commercial viability), and at a later stage (to potentiate continuing operation of the plant and higher revenue). At the beginning of the project, access to gas is typically guaranteed through the underlying upstream concession or contract. The biggest issue at this stage is making sure that the applicable rules allow for adequate (i.e., sufficient) supply to the plant. In this respect, it is important to determine if the gas fields that have been discovered hold sufficient reserves to feed the project during its life cycle and, if not, whether relinquishment obligations or exploration phase terms are sufficient to allow for the discovery and development of additional reserves. The answer to this question differs depending on the jurisdiction where the project will be implemented. When we look at three current African jurisdictions with LNG projects in different phases (Equatorial Guinea – with one existing train and a second train being discussed, Angola – where first gas is expected any day now, and Mozambique – the new gas frontier, where the

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first projects are now taking shape), we find different rules governing this subject. In Equatorial Guinea, the country’s Hydrocarbons’ Law (Law no. 8/2006, of November 3, 2006) determines that production sharing contracts shall have an initial exploration phase of four to five years, with the possibility of two extensions of one year each. The supervising Ministry may, however, at its discretion, approve different periods in the contract. Appraisal, development and production phases shall be further regulated in each contract. The Hydrocarbons’ Law refers generically to relinquishment obligations, which shall be better defined in the respective contract. To this effect, the model PSC sets forth mandatory relinquishment of certain percentages of the contract area at the end of the initial exploration period, and of each extension period. The Angolan legal framework is not as rigid in terms of exploration periods and relinquishment rules. The Angolan Petroleum Activities Law (Law no. 10/04, of November 12, 2004) and the Petroleum Operations Regulations (Decree 1/09, of January 27, 2009) both refer the terms of the exploration and production phase to the respective concession decree for each block. Both statutes also foresee the possibility of the regulatory authorities approving extraordinary extensions of exploration and production periods, provided that they are duly grounded and all prior obligations have been complied with by the contractor group. Angolan Production Sharing Agreements (PSAs) typically foresee an initial exploration period, followed by an optional period that the contractor group may elect to enter into, provided certain obligations are complied with. Additional discretionary extensions may be requested from the authorities for duly grounded reasons. Angolan law does not set forth any rules on mandatory relinquishment of areas (except at the end of the exploration phase). The Model PSA also allows for some degree of flexibility in the negotiation of appraisal periods. Relinquishment is typically only required at the end of the exploration phase, in respect of each area not then converted into a development area. This said, the biggest challenge in the Angolan E&P legal framework is linked to the access to gas proper. Under the model PSAs standard gas clause, the right to develop non-associated gas reserves lies exclusively with the National Concessionaire, Sonangol, E.P., which


may choose, at its own discretion whether or not it wishes to develop non-associated gas discoveries in conjunction with the contractor group members. Although this restriction has not impacted the Angola LNG project (insofar as it has been structured around associated natural gas reserves, and non-associated gas concessions), it may impact future LNG projects, as the development of stranded natural gas fields will ultimately depend on the regulator and the Angolan State’s political will.

The Mozambican legal framework provides for a maximum eight-year exploration period that may be extended if additional time is required to complete ongoing work. However, if a non-associated gas discovery is made, the Petroleum Operations’ Regulations allow for an additional eight-year appraisal period to be granted. This means that, in practice, oil companies may benefit from a 16-year period to conduct exploration and appraisal operations in respect of gas discoveries, which is uncommon (to say the least) in terms of international terms for oil & gas E&P. The maximum statutory production period is of 30 years as of commercial discovery. The EPCCs typically contain certain relinquishment obligations at the end of each period within the exploration phase, with final relinquishment of all areas not converted into development areas at the end of exploration. Contrary to the Angolan model, in Mozambique the oil companies party to an EPCC have a direct and immediate right to appraise and develop any non-associated natural gas they find during the exploration phase. This is of the utmost importance insofar as it gives the oil companies greater comfort during negotiation of their EPCC, as well as giving them a greater certainty as to the possibility of future development of gas reservoirs. It also allows the companies greater flexibility in terms of designing and implementing exploration programs. Moving on to the issue of extension of a project beyond its initial estimated life cycle, we find similar challenges in all three jurisdictions. Once the exploration phase for a given E&P contract has expired, the companies operating the LNG facilities will be left without a secure source of gas (besides those areas that have been converted into development areas). In fact, as would be expected in a civil law jurisdiction that considers natural resources to be a part of the State’s public domain assets, it is unthinkable to have unlimited rights over the contract area. If the oil companies wish to extend the life cycle of the project, or find new reserves to justify subsequent trains, various options exist. One solution is to negotiate new E&P concessions or contracts with the

Source: Angola LNG

In Mozambique, upstream legal matters are essentially governed by the Petroleum Law (Law no. 3/2001, February 21, 2001), the Petroleum Operations Regulations (Decree no. 24/04, of August 20, 2004). Further rules may also be found in the 2008 Model Exploration and Production Concession Contract (EPCC). Angola LNG site at Soyo

host nation. In this case, special care should be taken to ensure a direct and exclusive right to develop non-associated gas reservoirs. Another solution (which may have a greater impact on project economics) is to enter into a gas purchase agreement with other operators in the country (for purchase of stranded associated gas or non-associated gas), or other countries in the region which may have smaller pockets of gas which do not justify the construction of separate LNG facilities. This second option is not as simple as it may seem from the outset, as it may be necessary to negotiate cross-border pipeline agreements, taxation and customs regimes, etc. Many of the above challenges result from the fact that civil law jurisdictions typically treat natural gas liquefaction as part of the downstream sector, and not as part of an upstream development plan. This said, there are numerous examples of successful implementation of LNG plants in these countries. In all such cases, however, to a greater or lesser extent, this success has derived from the negotiation and approval of special rules and procedures aimed at dealing with the technical, legal and economic specificities of LNG projects. * Ricardo is a Partner at Miranda Correia Amendoeira & Associados’ Lisbon headquarters, and is responsible for coordinating the firm’s Houston and Timor-Leste offices. He is Co-Head of the Firm’s Energy Practice Group and frequently advises oil companies and service providers in setting up and carrying out their operations in Angola, Equatorial Guinea and Timor-Leste. He may be contacted at Ricardo.Silva@Mirandalawfirm.com. Nuno is a Senior Associate at Miranda Correia Amendoeira & Associados. He worked in Mozambique for six years, being now a member of the firm’s Mozambique Practice Group based in Lisbon. He is also a member of the firm’s Energy Practice, advising oil companies and service providers in setting up and carrying out their operations in a number of African countries. He may be contacted at Nuno.Cabeçadas@Mirandalawfirm.com.


By Denis Blaquiere, NOV Monoflo

PC Pump System Helping Launch Botswana Oil and Gas Industry Introduction

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istorically, Botswana has not been an oil and gas producing country but instead has relied on importing petroleum from South Africa to serve its domestic needs. Underscoring the virtual absence of an oil industry within its boundaries, a recent sovereign nations’ association report flatly stated that Botswana does not have any known oil or gas reserves. As a result, there would seem to be little or no production interest in Botswana. Yet, the viability of the gas industry in Botswana is rapidly changing. A new focus on Coal Bed Methane (CBM) exploration is quickly emerging, as evidenced by a joint venture agreement signed late last year between two major local energy companies. Further evidence to support the emergence of Botswana in the energy field is the recent news that for the first time ever a national oil company will be established. So, essentially “the pump is primed” for the birth of an oil and gas industry in Botswana.

Seeds of Growth

When preparing a new market for oil and gas operations, many considerations are involved. For example, the industry must be supplied with oilfield equipment and, considering the remote drilling locations, certain obstacles exist. Additionally, communities must be educated so that local forces can be utilized for mobilizing equipment. While multinational oil and gas companies sell fuel and lubricants in Botswana, they are not engaged in exploration and production (E&P). To help drive E&P growth in Botswana, National Oilwell Varco’s Monoflo group (artificial lift equipment and solutions supplier) has

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taken some important steps in supporting local production companies engaged in the extraction of CBM during the initial development of pilot wells and some existing reserves. Originally contacted by an Australian company interested in investing in the newly formed Botswana oil and gas market, NOV Monoflo assisted with developing a complete artificial lift solution package customized for this market and application. This solution package addressed all the production company’s needs including pump design, training and mobilization of workforce, on-site equipment installation, and automation technology. Currently, NOV Monoflo has installed two pilot Progressing Cavity Pump (PC Pump) systems in Botswana, replacing older systems which had experienced significant failures. These new systems have been operating successfully for the past six months without failures. Due to the success of the systems, other producers have also considered NOV Monoflo to supply their artificial lift systems. The pilots and other ongoing developments have been the platform for NOV Monoflo to establish an infrastructure within the Botswana oilfield and grow with the industry as it further develops.

Highly Adaptable to Botswana E&P Recognizing the importance of successfully meshing with the crosssection of Botswana’s emerging oil industry and its people, NOV Monoflo has made its PC Pump the equipment of choice. Their Botswana customers prefer this pump because of its design for utilization in both oil and CBM applications, the latter being of increasing interest incountry. Where oil and gas production economics demand efficiency, reliability, and low lifecycle cost from pumping equipment, the PC Pump is an ideal operational fit.


Monthly Focus

All images are courtesy of NOV Monoflo

topics may include how to conduct drilling operations, how to keep the supply chain functioning both in-country and outside Botswana, as well as the overall operations training of local employees. On a more advanced level, they also taught operations crews how to run the pump, how to commission and program a pump, and detailed instruction about operating procedures, system functionality, and troubleshooting. With no skilled oilfield labor from which to draw, these actions are a necessity rather than an option.

Aside from being ideally suited for pumping downhole fluids, PC pumps have other benefits for Botswana operators. Because of their simple design and construction, PC Pumps require a lower capital cost which translates into more available capital to purchase and install more pumps and, ultimately, recover more oil and gas. Also, because the fluid rate is directly proportional to rotational speed, the PC pump can be closely matched to well inflow rate for maximum production. When evaluating reliability, which is critical in remote locations where replacement equipment is scarce, the PC pump is a perfect fit. It has only one moving part downhole and is excellent at handling gases and solids without blocking, more resistant to abrasive wear, and wellsuited for both low-flow and high-flow applications. PC Pumps can also operate with low running speeds for long-wear life which extends the periods between routine maintenance and potential failures. In fact, reliability is at (or near) the top of list in terms of PC pump attributes for logistical reasons as much as any other consideration. Equipment replacement via ocean freight to landlocked Botswana typically takes more than two months. Quicker, but more costly airfreight flies in to Johannesburg and takes approximately a week to clear customs followed by an additional two days to reach central Botswana and onto the drilling site. Another operator benefit from the use of a PC Pump is an efficiency rating in excess of 70% that results in lower running costs. With a rating higher than other methods of artificial lift, i.e. Electric Submersible Pumps (ESPs), PC pumps can reduce the cost per barrel or fluid recovered. Also, in environmentally sensitive areas within Botswana, the PC pump’s low-profile and quiet running surface drive head make it more acceptable within its surroundings.

Getting Operations up to Speed

Botswana’s other E&P challenges include training of locals in order to utilize an indigenous workforce. NOV Monoflo personnel began their training on a basic level by working through the entire process with the production company before each well was even drilled. Training

Another way that NOV Monoflo has assisted with the issue of an inexperienced workforce was to install automation technology with the PC Pump systems. This automation allows the PC Pump to operate at optimum performance with little input from the outside. For example, downhole gauges automatically feed data to the system allowing it to pump out the wells’ pressure, making sure that drawdown and pressure on the coal seam are fully automated in controlling the pump. Currently in the design stage are remote telemetry and remote monitoring controls that will enhance the ability of production companies to overcome the limited availability of trained personnel. Emphasis on technology comes full circle for the Australian customer who originally expressed an interest in NOV Monoflo’s pumps for maximum performance and equipment reliability. They were looking to utilize the latest technology which is above the level of what other suppliers in the industry are providing, especially in regard to CBM development. Meanwhile, work moves ahead as NOV personnel are in a six to 12 month stage of dewatering a coal seam in one of the wells.

Future Outlook

In light of Botswana’s emergence toward fully-fledged E&P activity and making CBM a viable industry, NOV Monoflo is well-positioned to assist local communities as well as multinational and small independent producers with artificial lift solution packages that will maximize well performance and profitability. Denis Blaquiere is with NOV Monoflo and is jointly responsible for the company’s Africa operations. He can be reached at denis.blaquiere@nov.com.

Petroleum Africa April 2012

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By LeAnne Graves Associate Editor

GIVING BACK TO EGYPT Malaysia’s Petronas is committed to continuing its corporate social responsibility program in countries where it operates, and recently completed a mission to support less-fortunate children in four of Cairo’s public schools.

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espite Egypt's natural resource wealth, poverty is a major problem and public school education is less than adequate. Although Egypt has mandated that all children must attend school, low yearly fees amounting to $7.50 per child are often times difficult for families to afford. A team from cairo office of the national oil and gas company of Malaysia, Petronas, set out to deliver supplies to children from four of the capital’s poverty-stricken public schools on February 19. The firm acquired security approval from the Egyptian Ministry of Education, and based on studies conducted by Petronas PICL (Egypt) and on advice from the Ministry, El Fardous, Gawhar Allah, El Gamaleya, and Al Kamal schools were chosen based on overall need. The company’s corporate affairs officer Sameh Said told Petroleum Africa, “[Education] enlightens the mind and prepares students to meet future demands. Education has a great power to change lives.”

Petronas helped supply school bags that included a variety of stationary materials to 1,841 students between the ages of 7-12. Of that number, the company also paid school fees for 292 students meeting certain criteria. School fees are paid by the government for orphans, but children in the less-fortunate category sometimes take a full year to pay the school fees. For example, many children from Al Fardous live with their families in ‘Dead City’, an area that is composed of tombs

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Petroleum Africa April 2012

All photos by Petroleum Africa

The group met at the Petronas PICL office in the Cairo suburb of Maadi, loading a bus with all the supplies to head to the first of four schools near the famous souq and tourist destination, the Khan El Khalili. The Cairo staff scheduled various activities for each school such as coloring and talent contests, an IQ test, and a Q&A with chief executive Mohamed Amin Abdullah offering opening statements to encourage the children to continue their education.

Petronas CEO Abdullah giving a school bag with stationary to students

and mausoleums where people reside. Some residents of Dead City began as tomb keepers while others moved from other poorer areas within Egypt unable to afford housing elsewhere. Even fees amounting to $7.50 per child are difficult for these families to afford.


Local Impact believe that investing in education and human capital development today ensures the availability of a sustainable pool of motivated and knowledge-empowered human resources for Petronas, our partners, and our host nations and communities wherever we operate to continue on the success achieved thus far for a better future.” Petronas offers a broad spectrum of programs and training facilities, ranging from education sponsorship to the establishment of various educational and training institutions. The company is also actively involved in numerous school outreach programs to “nurture and develop the potential of the leaders of tomorrow.” Education and human capital development programs in Malaysia and abroad include Petronas eLearning, Petrosains, and industrial training.

Petronas staff and students at Al Gamaleya school

Said added, “This project is basically to support very low income families and single parents, helping the students concentrate on studies by providing [necessary] basic tools.” The company provides educational opportunities throughout the world as well to needy communities as its employees. Petronas said, “We

In Egypt, the Malaysian firm is involved in the West Delta Deep Marine (WDDM) concession, which just saw first gas from its second stage come online. The second stage of the WDDM Phase 7 comprises onshore gas receiving facilities, five new compressors, and a new power plant. Other activities in the North African country include the El Burg offshore and a stake in the North Damietta block. Petronas Egypt is planning another similar project in September. Abdullah told Petroleum Africa, “There’s just something about being able to give back.”


African Focus By Jennifer Nickle Deputy Editor

GHANA Politics and Economy

Ghana received its independence from the British in 1957. The first several decades following independence saw dictators, coups, and coup attempts aplenty. The country started moving in the right direction with the appointment of Kwame Nkrumah as its first prime minister and then president of the modern Ghanaian state. Much of Nkrumah’s political idealisms carry over into Ghanaian politics to this day. Nkrumah was a promoter of Pan-Africanism and believed in freedom and justice, equity, and free education for all, irrespective of ethnic background, religion, or creed. Today the country is run by John Atta Mills. Mills was elected to the presidency in December 2008. The country’s next election will take place this December and is going high-tech with biometric voter registration, doing away with previous ID cards. The new biometric registration began recently and will close in May. The nation is considered in the mid-range of African economies, with the majority of its economic juice coming from the agricultural industry. The industry also employees a good portion of the country’s work

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force. In December 2010 the country added another significant contributor to its economy, oil production. While Ghana has had oil contributing to its economy from the Saltpond oil field for over a decade, it did not see a significant amount of economic contribution from the industry until the Jubilee oil field came online. Ghana’s per capita GDP for 2011 is estimated at $3,100, up from 2010’s $2,800. The country also saw a rise in its real growth rate, which more than tripled since 2009, going from 4% to 13.7% for 2011. Its real growth rate beat analysts’ expectations by 1.7%. President: John Atta-Mills (since January 2009) Independence: March 1957 (from UK) Population: 25,241,998 (July 2012 est.) GDP (purchasing power parity): $77.74 billion (2011 est.) Real GDP Growth Rate: 13.5% (2011 est.) Per Capita GDP: $3,100 (2011 est.) President John Atta-Mills Ministry of Energy: Dr. Joe Oteng-Adjei Oil Production: 80,000 bpd (2011 est.) Oil Exports: 5,752 bpd (2009) Oil Consumption: 60,000 bpd (2010 est.) Proven Oil Reserves: 660 million barrels (January 2010 est.) Natural Gas Production: N/A Natural Gas Consumption: N/A Natural Gas Exports: N/A Proven Natural Gas Reserves: 22.65 billion cubic meters (January 2011 est.)

Source: CIA Factbook February 21, 2012

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uring its colonial period, Ghana played host to a number of European powers. The Portuguese came in the 15th century, followed by the Dutch in the 16th century, while other European traders made their presence felt by the mid-18th century. Ghana’s coastline was dotted by forts built by the various European contingents, but by the latter part of the 19th century the Dutch and the British were the only traders left. When the Dutch withdrew in 1874, Britain made the Gold Coast a crown colony


African Focus

Ghana Upstream With a little over a year as a significant oil producer under its belt Ghana’s popularity is still growing. While production targets on its star field, the Jubilee Field, have not been reached yet, the West African country is continuing to see E&P firms come-a-courting for access to acreage.

The intrepid team made up of Kosmos Energy, Tullow Oil, and Anadarko Petroleum has continued working on the Jubilee Field to bring production rates up to target, which has been easier said than done. The field, expected to hit its optimum production rate of 120,000 bpd by the end of 2011, is still not performing at that level. In November it was reported that some of the production wells on the field would need to be re-drilled to achieve original production targets. The Phase 1 remedial program was launched in January and is expected to bring up production totals. The remedial work commenced with the successful sidetracking of the J-07 production well which utilized a new completion design. The well was flow tested to the rig at rates of up to 15,000 barrels per day (bpd) and production to the FPSO began in early January. Tullow said it is expected that the redesigned completion will be utilized in the new Phase 1A wells and the sidetracks of a further three existing Phase 1 wells over 2012.

Source: Tullow Oil

Approval for the next phase of the Jubilee development, Phase 1A, came in early January. The development calls for eight new wells, five producers and three additional water injectors, and the expansion of the subsea network. The work is expected to take 18 months and production is expected to average between 70,000 to 90,000 bpd in 2012. At the end of 2011 the partners purchased the FPSO used on the Jubilee Field, the Kwame Nkrumah, from MODEC.

TEN cluster development scenario

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Petroleum Africa April 2012

Exploration activities outside the Jubilee Field are also moving forward with wells drilled elsewhere on the West Cape Three Points (WCTP) and the Deepwater Tano blocks. Significant progress was made in appraising the discoveries in the Deepwater Tano block including the Tweneboa, Enyenra, and Ntomme, collectively known as the TEN cluster. The Enyenra3A appraisal well successfully encountered oil in high quality sandstone reservoirs. Pressure data indicates that the Enyenra-3A well has confirmed an up-dip extension

Source: Tullow Oil

Since the last coverage of Ghana in the March 2011 issue of Petroleum Africa, the country has continued to see success from its upstream arena, specifically offshore the country. Exploration, appraisal, development, and production work have continued in earnest for the many companies holding acreage.

Eirik Raude semi-submersible rig operating on the Jubilee Field

of the Enyenra oilfield. Appraisal drilling on the Enyenra continued including the re-drill of the Owo-1 discovery well in December 2011. More success was seen with the Ntomme-2A appraisal well, which encountered approximately 128 net ft of light oil pay in excellentquality sandstone reservoirs. The success with the Ntomme-2A comes simultaneously with the success of the Teak 3A appraisal well on the WCTP block. In March, partners on the Deepwater Tano license saw further success with the drilling of the Enyenra-4A well, drilled to define the southern extent of the field. The Ocean Rig Olympia drilling rig drilled the Enyenra-4A to a total depth of 4,174 meters in water depths of 1,878 meters. The well encountered oil in very good quality sandstone reservoirs. Drilling results, wireline logs, samples of reservoir fluids, and pressure data show that Enyenra-4A intersected 32 meters of net oil pay. Pressure data from the oil leg has demonstrated that the oil is in static communication with the oil seen in other wells on the field and indicated a continuous oil column of around 600 meters. Wireline logging has been completed on the well and injectivity tests are underway to provide important data for the design of the water injection system. On completion of operations, the well will be suspended for later use and the drillship will return at a later date to the Deepwater Tano block to perform a drill stem test on the oil zone in the Ntomme-2A well. Earlier in February the partners entered into a framework agreement with Aker Solutions to provide well intervention services. Under the agreement Aker will provide slickline and coiled tubing equipment and services, which are conducted with the objective of maximizing production of oil and gas. The initial contract period is for three years, with two additional one-year options. Aker Solutions estimates that the agreement will generate annual revenues of approximately $4 million. The partners also tapped Technip for two contracts for the Jubilee Field. The contracts are worth approximately â‚Ź100 million for Phase 1A of the project and cover full project management, engineering,


are Mitsui with 20% and GNPC with 10%. ENI is also active on the offshore West Cape Three Points block.

Source: Vanco Energy

Hess Corp. holds the Deepwater Tano/Cape Three Points block. Hess drilled the Paradise-1 well last year with success. The company said earlier this year that $800 million of its capital expenditure budget would be spent on Ghanaian operations. The company is looking to expand its position in Ghana. Last November it was reported that Hess and Nigerian firm Sahara Energy Fields Ltd. were seeking exploration and production rights over the West Keta and East Cape Three Points offshore blocks. The pair have submitted their applications for the open blocks and GNPC has made the necessary recommendations to the Ministry of Energy.

Ghana offshore exploration program map

fabrication, and installation of a new flexible riser, two rigid flowlines, and 11 spools/jumpers. The contract also covers the installation of two manifolds and 5 km of umbilicals. The WCTP and Deepwater Tano partnership was not the only action in Ghana over the past year; other firms have been busy conducting exploration programs. The partnership of Vanco Energy and Lukoil worked on their Cape Three Points block. The Ocean Rig Olympia was contracted to conduct a multi-well drilling campaign in Ghana and Cote d’Ivoire. The drilling unit mobilized to Ghanaian waters in May 2011. The program commenced with the Dzata-2A well, which was drilled to appraise the areal extent of the discovery made with the drilling of the Dzata-1 well previously. The well encountered poor reservoir quality at the target horizon. Vanco said that Dzata does not appear to be a commercial discovery but it may merit further appraisal and may become commercial at a later date. The pair also drilled the Cheetah-1X to evaluate slope fan potential reservoirs of Turonian and Cenomanian age. The well encountered good quality Cenomanian reservoir rock but these were found to be water-wet. Currently an extensive exploration work program is in progress to evaluate the drilling results, recalibrate seismic data, integrate CSEM data acquired in 2011, and prepare for resumed drilling activity. The partnership of Afren and ENI spud the offshore Nunya-1X exploration well in early February. The well is located on the Keta block in the Volta River Basin offshore eastern Ghana. The Nunya-1X (formerly named Cuda-2) exploration well is being drilled using the Marianas semi-submersible drilling rig. Following the farm-out in 2011 of a 35% participating interest in the Keta block and transfer of operatorship to ENI, Afren has a 35% participating interest. Other partners

Another firm looking to make some progress in Ghana is Clontarf Energy. The company signed an agreement with GNPC in 2010 for the Tano 2A concession. The Tano 2A covers 1,532 sq km and Clontarf holds a 60% stake partnered with Petrel Resources holding 30%, while


African Focus the remaining 10% is held by Ghanaian companies. Clontarf is waiting for the block contract to work its way through the parliamentary approval stage. Clontarf said in a statement that the Tano 2A was a good block with both onshore and shallow offshore possibilities. New seismic is needed to better define targets, but the ultimate test is a well or two. Major E&P firms are still trying to gain ground in Ghana. Shell, looking to make a mark in frontier basins, entered into an agreement with Tullow. The Irish independent said the planned partnership would focus on making “transformational” discoveries in “underexplored frontier basins” like the discoveries it made across Africa and South America.

While Shell has been eying Ghana to add to its African portfolio, it wasn’t clear whether the two would indeed team up in the West African country, although it is a possiblity. On the corporate end, Tullow listed its shares on the country’s stock exchange in June 2011. Kosmos Energy, formerly a privately owned firm, listed its shares on the New York Stock Exchange and is pondering the possibility of listing on the Ghanaian Stock Exchange. Kosmos has also been in negotiations with the Ghanaian government over the renewal of the undeveloped acreage on the West Cape Three Points block.

Ghana Downstream Ghana’s downstream is on pace with its upstream sector, not huge but growing fast. As the country sees more success in the upstream sector, interest has been generated in building up the downstream. Ghana is home to one refinery, the Tema, which is operated by the Tema Oil Refinery Corp. (TOR), and has an operating capacity of 45,000 bpd. The refinery historically has run on crude imported from Nigeria though on occasion it still runs short of crude for processing. In September 2011 TOR had to enter into negotiations with Ghana’s Volta River Authority (VRA) for 50,000 metric tons of crude oil. The crude has already been handed over to TOR for safekeeping. TOR’s receipt of crude from VRA’s stores for power generation is not a new situation and has been ongoing for some time. The two entities had performed swaps on various occasions with VRA taking crude from TOR to fire its thermal power plant. As more crude becomes available from its offshore production the country could be come self-sufficient in its feedstock needs. Not all downstream action is centered around oil and the upcoming increase in production; gas is also an important downstream commodity to Ghana and becoming even more important as additional resources are discovered off its shores. The Ghanaian government is currently encouraging its citizens to increase their usage of LPG once the fuel becomes more readily available in the country. Currently a gas processing plant is being constructed to produce LPG. The government expects the plant to be online in 2013. The Ministry of Energy has formulated a strategy to promote the use of LPG in domestic and public institutions. Minister of Petroleum Dr. Joe Oteng Adjei is aiming to have LPG usage increase from its current level of 12% in domestic and public institutions to 50%. The initiative is expected to commence in 2013 when the plant to process natural gas from the Jubilee Field becomes operational. On the ports and terminals side of the equation, Lonrho Plc plans to spend around $1 billion to build ports that will service oil rigs in the western region of Ghana. The company previously signed an MoU with the government to be the sole developer and manager of a new oil logistics port. Lonrho anticipates spending about $10 million for feasibility studies on the port. The studies are expected to end in August and if they determine the viability and sustainability of a port, construction will start by Q4 2012. Studies already undertaken show that there is a need for a port dedicated to the oil and gas industry with a “number of potential tenants

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and users” showing interest in “Ghana as a regional hub for their oil and gas operations,” the company said. Lonrho plans to invest “$400 million in the first phase,” increasing it to $1 billion if the demand is there. Just recently Ghana’s state-owned Bulk Oil Storage and Transportation Co. Ltd. (BOST) reported that it planned to begin the construction of a storage facility in Atwereboa in the Ahanta West District of the western region. The facility, expected to cost $200 million, will store LPG and other petroleum products. The terminal would receive LPG from the proposed Ghana Gas Facility at Atuabo for transportation to BOST’s branches in the country. Three hundred acres of land has been acquired for the project which is expected to take off before the end of the year, and take about 24 months to complete. Another project revolving around natural gas is state-owned Ghana National Gas Co.’s (GNGC) Gas Infrastructure Project. The project involves receiving gas from the oil and gas fields in the Tano (Western) Basin and processing it into lean gas, propane, butane, and condensate. The overall goal of the project is to ensure that natural gas, associated gas, and NGLs produced in Ghana are effectively and efficiently processed into clean fuels and feedstock for the domestic and export markets. The project will also enable Ghana and the companies operating there to substantially reduce and/or eliminate flaring of gas. It will also aid in the development of the western region as a new economic growth pole for Ghana in the longer term. Initial gas produced will come from the Jubilee Field. The associated raw gas production profile from the Jubilee Field development plan estimates a maximum 120 million standard cubic feet per day for the initial phase. This is expected to be maintained over a three-year period. There are also developments underway in the country’s offshore that can supply gas to be processed at a new green-field processing plant. For the initial phase of the gas commercialization project, the lean gas will be fed to an existing power plant in Aboadze, although there is still some debate on the location. It is envisaged that the initial phase of the project will be implemented in 18 months. GNGC said on its website in February that the study conducted by Sinopec International Petroleum Service Corp. has selected a site in Atuabo as its preferred choice for locating the plant. Sinopec was selected by GNGC to provide EPCC for the processing plant.


Ghana Power & Alternatives Looking to learn from Nigeria’s example, Ghana is actively pursuing renewable energy despite becoming Africa’s latest oil producing nation. The Minister of Environment, Science, and Technology Sherry Ayitey said that Parliament was working on legislation to help the private sector generate energy from waste. She said that the bill aims to stop the government’s monopoly, being the sole supplier of energy, and will create a better haven for private companies to invest in the country’s energy sector. The renewable energy bill would also introduce a Feed-In Tariff (FIT) mechanism to create a platform for trading renewable energy and providing a purchase obligation for utility services and bulk customers. Other benefits of this mechanism can help free up more oil for export while using renewable energy for in-country power generation. The country plans to increase its energy supply via renewable energy sources over the next 50 years in order to improve its power generation. VRA, the country’s power utility mentioned previously, said that it would look further into biofuels, wind, and solar energy while also using existing sources like the Akosombo dam. VRA’s CEO Major

John Gyasi Rtd. said that the land had already been acquired in Navrongo where solar energy would be tapped to add up to 10 MW of power. The utility is planning to construct a solar PV plant at a cost of around $8 million and three other plants could be located at Kaleo, Lawra, and Jirapa. Ghana hopes to integrate biodiesel into its market in which Germany promised to help the nation further develop its sector. The country was identified in a survey saying that it had the potential to become one of the leading producing countries of biodiesel. Investors are climbing on board for Ghana’s biofuel potential coming from Belgium, Brazil, China, Germany, Israel, Italy, The Netherlands, and Norway. In addition, the country has released plans to prepare Africa’s first entirely green and sustainable residential compound – similar to Abu Dhabi’s Masdar City. The construction of the Granhill Community Project will consist of 3,000 high quality energy efficient turnkey housing units on an initial 898-acre development site. The community will have residential and commercial units, a light industrial park, multiple communal facilities, and outdoor parks.


African Focus By Jennifer Nickle Deputy Editor

A LG E R I A Politics and Economy

The country was a French colony for 132 years, receiving independence in 1962. March 19 of this year marked the 50th anniversary of the cease-fire between Algerian rebels and French troops. While this landmark anniversary passed quietly there were some calls for Algeria to actually “criminalize colonialism” through the law. On the political scene the country is controlled by President Abdelaziz Bouteflika, who was instated by the army following what some claim was a fraudulent election in 1999. The country’s last presidential election took place in 2009 and secured Bouteflika another five years in office with a whopping 90.2% of the vote. The next presidential elections are due to take place in 2013. The Arab spring that created chaos across much of the MENA region last year was barely a flickering flame in Algeria, although with restrictions on press inside the country the true extent of the protests that took place cannot be calculated. Regardless of the number, Algeria maintained order with the protests that did take place being quickly quashed. The protests generally revolved around the fact that Algeria has been under a state of emergency for nearly 20 years. Citizens of the North African country began to challenge and rally for a democratic change. These protests which took place in Algiers, Oran, Tizi-Ouzou, and other cities throughout the country led to five deaths and more than 800 wounded. The government brought an end to the protests by making small concessions, including the lifting of the state of emergency, avoiding the downfall of its neighboring regimes in Tunisia, Libya, and Egypt. Economically the country is dependent on its extractive industries, such as oil and gas, which account for around 95% of export earnings. They also account for 60% of budget revenues and 30% of the GDP. While the country is dependent on its petroleum industry, it is trying

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to wean itself away from that dependency. The government is making a great effort to move the economy away from dependence on oil and to diversify its resources so not to be “a hostage to the fluctuation of oil prices in international markets,” President Bouteflika said in August. The president was on target with his remark according to analysts who say the longer the economy is dependent on oil the more vulnerable it becomes. While Bouteflika may be gung-ho on shifting Algeria’s economic focus away from the hydrocarbon sector, there haven’t been any real alternatives in the making. The country does have huge potential as a source of solar power which could provide export income from the ever growing consumer base in the EU, and in fact, plans are in the works for just that. Whether such a scheme is enough of a diversification is yet to be seen. Previously the president had said he did not want to participate in projects that would send resources to the EU, namely refering to the Desertec Industrial Initiative, but if diversification is truly on the menu, he may be reconsidering that position. Economically speaking, on the surface the country has strong economic indicators of good growth. Algeria saw a year-on-year increase for its purchasing power parity GDP, with estimated numbers for 2011 coming in at almost $8 billion more than 2010’s figures and per capita income also on the rise. While these two economic statistics are climbing, the country’s real growth GDP dropped over 2011. President: Abdelaziz Bouteflika (since April 1999) Independence: July 5, 1962 (from France) Population: 34,994,937 (2011 est.) GDP (purchasing power parity): $264.1 billion (2011 est.) Real GDP Growth Rate: 2.9% (2011 est.) President Abdelaziz Bouteflika Per Capita GDP: $7,200 (2011 est.) Minister of Mines and Energy: Youcef Yousfi Oil Production: 2.078 million bpd (2010 est.) Oil Consumption: 312,000 bpd (2010 est.) Proven Oil Reserves: 12.2 billion barrels (January 2011 est.) Natural Gas Production: 85.14 Bcm (2010 est.) Natural Gas Consumption: 29.86 Bcm (2010 est.) Natural Gas Imports: N/A Proven Natural Gas Reserves: 4.502 Tcm (January 2011 est.)

Source: CIA Factbook February 2012

A

lgeria has a long history and more than a few of history’s conquerors have left their mark on the country. Carthaginians, Romans, and Byzantines dominated most of Algeria until the spread of Islam and the coming of the Arabs. Algeria, and North Africa as a whole, served as a transit region for people moving towards Europe or the Middle East leaving behind their respective influence on the population and paving the way for colonization by the French in the mid-18th century.


Algeria Upstream E&P Update

The North African country is sitting on approximately 12.2 billion barrels of proved reserves according to the Energy Information Agency which estimates natural gas reserves at a hefty 10.9 trillion cubic feet. While the country’s reserve figures are significant it should be noted that its oil reserves have not seen an increase for a number of years. The country still has vast swathes of land that are underexplored so there is a possibility for both oil and gas reserves to rise, although recently companies have been loathe to acquiring access to Algerian blocks due to some stringent fiscal terms tightening potential profit margins. The country still attracts interest but is aiming to increase that with another revamp of its hydrocarbon laws. In October Energy and Mines Minister Youcef Yousfi recommended to President Bouteflika that Algeria’s energy laws be changed. An Algerian official who spoke under the condition of anonymity said that it was possible that there would be some changes to the petroleum code as the government needed to allow for a reasonable level of profits to foreign companies. The country’s state-run oil firm, Sonatrach, saw its fourth chief in two years when the government replaced Nourredine Cherouati with Abdelhamid Zerguine in November 2011. Algerian officials offered no explanation for the reshuffle. A statement was released by Sonatrach saying that Yousfi had installed the new chief executive at a ceremony on November 17. Zerguine’s first order of business will be to pick up the exploration pace in Algeria which has been lagging for a number of years due to the country’s petroleum legislation and windfall tax laws. Zerguine, an engineer by training, was at one time VP of Sonatrach and until this appointment ran a Sonatrach affiliate in Switzerland. The windfall tax enacted in 2006 has already caused some issues between Sonatrach and one of its partners and the one of the country’s largest foreign producers. Sonatrach and US independent Anadarko Petroleum Corp. have been in a protracted struggle over these taxes for quite some time. However, earlier this year the struggle came to an end with Sonatrach settling with Anadarko and Maersk Oil. The effect of the amendment will, using current petroleum prices discounted at 10%, provide Anadarko with approximately $2.6 billion of additional net present value over the remaining term of the PSC. The settlement with Maersk, which is based on reciprocal concessions, provides for delivery to the company of additional crude oil volumes in the amount of approximately $920 million over a period of 12 months from the effective date. Further, the effect of the improved terms of the PSC will moderately increase the company’s share of oil production from the effective date and for the remaining term of the PSC. The amendment also confirms the term for each development license granted under the PSC is to be extended, in accordance with the terms of the PSC, and as a result, will now be 25 years from the original effective date.

Sonatrach actively contributes to the search and production of oil and gas. In 2011 the company made 20 new discoveries, 19 of which were made by its own efforts. Since the start of 2012 Sonatrach has participated in four discoveries, according to an interview with Yousfi on Radio Algeria in February. Yousfi said that the resources were unconventional and would require advanced technology to exploit them. The potential of various regions were also not yet known, the minister said, citing the area extending from Al-Bayadh to the Algerian-Malian border. The company shut-in some discoveries in 2010 in the Ghardaia region due to the lack of technology to take advantage of them; however, in 2011 Sonatrach was instructed by the ministry to re-open the wells following the acquisition of technologies that would allow for their operation. Sonatrach has made clear moves over the past decade to make itself a fully rounded NOC. The company explores outside its borders in countries like neighboring Libya and Mali. In October it said that it would start its long-awaited drilling program in the Taoudeni Basin by mid-2012. Sonatrach gained access to acreage in Mali in 2007; however, not much exploration work has taken place since that time. The first well is expected to be drilled in 2012. The country will also seek to identify resources offshore according to Yousfi. Currently Algeria’s booked reserves, unlike its neighbors, are all onshore and little, if any, effort over the past decade has been expended to determine if the country is blessed with offshore resources. The minister noted that the company would undertake offshore exploration work in partnership with foreign companies in 2013. The state-run company is also looking to move into the unconventional side of its resource potential and plans to launch a pilot program to do just that in 2012. Aiding Algeria in its unconventional aspirations is ENI, who signed a cooperation agreement with Sonatrach in 2011 to explore for unconventional hydrocarbons, particularly shale gas plays. The first well is expected to be drilled in May and a second is scheduled for October. Sonatrach does not work alone; Algeria plays host to a multitude of foreign E&P firms who aid the country in keeping its production numbers up. US independent Anadarko Petroleum is responsible for a major portion of the country’s production. Besides settling its tax dispute with Sonatrach, as mentioned previously, Anadarko made significant progress on its El Merk project on Block 208. Currently the company is constructing the El Merk Central Processing Facilities (CPF) and associated infrastructure. The project remains on track for first production in 2012, with a significant uptick by the end of the year. Anadarko closed out 2011 with a gross production rate of 345,000 barrels per day (bpd) in Q4, 60,000 bpd of which were net to the company. The company’s net figures are up about 9,000 bpd over 2010 flow rates for the same period. Total is another big producer in Algeria and has been in the country for quite a long time. Its in-country operated production was 33,000 boepd in 2011, compared to 41,000 boepd in 2010 and 74,000 boepd in 2009. The company attributes this decline to the termination of the Hamra

Petroleum Africa April 2012

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African Focus

ENI has stakes in a number of blocks in Algeria and they run the gauntlet from exploration to development to production. The company is currently in the midst of an exploration phase on Blocks 316b and 321a on the Kerzaz permit where it operates with a 100% interest. ENI says that the Kerzaz, located in the Timimoun Basin, has high potential.

Source: ENI

There are also development activities taking place on the MLE and CAFC integrated project on Block 405b. ENI purchased the block in 2008 from the Canadian company First Calgary Petroleums. The final Tubes being transported in the Algerian desert investment decision of the project was sanctioned by the government. The MLE development plan foresees the construction of a natural gas treatment plant with a capacity of 350 million cubic feet per day (Mmcf/d) and of four export pipelines with linkage to the national grid system. These facilities will also receive gas from the CAFC field. The CAFC project provides the construction of an oil treatment plant and will also benefit from synergies with existing MLE production facilities. Gas and oil production start-up of the CAFC field are expected in 2012 and 2014 respectively. The integrated project targets a production plateau of approximately 33,000 boepd net to ENI by 2015. Petroceltic International is one of the few companies operating in Algeria that is free with information on its exploration program; perhaps because it has been so successful with it. Its many drilling successes on the Isarene block have moved it toward development over the past year. Between November 2010 and December 2011 the company drilled and tested wells AT-4 through AT-9 on the Ain Tsila field. In order to establish the maximum flow potential from the wells, two horizontal wells were drilled. The company incorporated open hole multi-stage

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Drilling on the Ain Tsila field

fracture completion equipment into the well design. In order to establish the maximum flow potential from the wells, two horizontal wells were drilled. The fracture stimulation and the enhanced completion design were extremely successful, producing the best results on the permit to date. With the exception of AT-6, all wells flowed gas to the surface and wells AT-8 and AT-9 produced gas and gas condensate rates far in excess of anything experienced so far on the license or in the region. The results from the AT-7 well were significant in demonstrating that commercial flow rates are achievable on the southern part of Rig on the Isarene permit the field.

Source: Petroceltic

On Total’s TFT field, plateau production was maintained at 185,000 boepd gross. A 3D seismic survey covering 1,380 sq km on the east and west portions of the field was completed in October 2011. The data is being processed and interpreted. Launched in 2010, following approval of the development plan by ALNAFT, the basic engineering phase for the Timimoun project has been completed. Commercial gas production is scheduled to start up in 2016 with an anticipated plateau production of 160 thousand cubic feet per day (Mcf/d). On the Ahnet project Total reported in its 2011 Form 20-F that the technical section of a development plan was submitted to Algerian authorities in July 2011. Discussions are underway with the project partners and the authorities with regard to bringing the gas to market with an anticipated plateau production of 400 Mcf/d.

Source: Petroceltic

contract in October 2009 and the divestment of its stake in Cepsa (48.83%), which was finalized in July 2011. Total’s production now comes entirely from the TFT field (Tin Fouyé Tabenkort, 35%). The French major also has 37.75% and 47% stakes in the Timimoun and Ahnet gas development projects respectively.

In April 2011 Petroceltic sold a portion of its Isarene permit stake to Enel; the deal was approved by the government in December 2011. Under the deal Enel gained an 18.375% stake with a pay up of $36.75 million to Petroceltic, which equates to 24.5% of all back costs incurred from signing of the PSC in 2005 until the end of the exploration period in April 2010. The Italian firm has also committed to funding 49% of the cost of the first six appraisal wells in an enlarged Isarene appraisal campaign and of a contingent additional well, of which costs are capped, in aggregate, at $145 million. The agreement also calls for Enel to pay Petroceltic a contingent cash consideration, up to a maximum of $75 million; the amount is to be determined by a number of factors based on the results of the appraisal program, such as the overall level of reserves and the production profile. Another sale of an Algerian block stake took place in December when Algerian authorities and the BG Group came to terms over an increase in participation for BG in the Hassi Ba Hamou gas field. In February 2010 Gulf Keystone agreed to transfer slightly more than 38% of its stake over to BG; however, the deal had been delayed pending the approval. Now that Gulf Keystone is out of the Hassi Ba Hamou, BG will hold a 65% stake.


Gulf Keystone is also looking to get out of its commitments in regards to its other holdings in Algeria. The company is currently evaluating a number of options with regard to its remaining interests in Block 126a (the GKN and GKS oilfields under the Ferkane permit) to conclude its gradual strategic exit from Algeria. The next phase of development for the BP-led In Salah gas field saw movement with the award of a new contract. The contract for the development of the second phase was signed by the partners on the field – Sonatrach, BP, and Statoil – with the winning contractor Petrofac. The EPC contract, valued at $1.1 billion, includes the setting up of a plant to process 17 million cubic meters per day (Mmcm/d) of natural gas and the drilling of 33 wells in the In Salah contract area. This phase is set to come online in Q4 2013. BP, Statoil, and Sonatrach are also partnered on the In Amenas field. In May of last year the partners awarded Japan’s JGC a contract worth $213 million. The contract is to aid in maintaining production levels on the gas fields. Under the contract JGC will construct compression plants at In Amenas with the aim of keeping production at a level of 30 Mmcm/d for the next 12 years. Work on the project started in H1 2011 and is expected to be completed in Q3 2013. The In Amenas gig was not the only contract JGC was awarded in Algeria over the past year. The company, partnered with ABB, was also awarded a €1-billion, 42-month contract covering the EPC of facilities in the Gassi Touil gas fields in southern Algeria. There was also the win of an EPC contract for the Bir Seba Field Development project. The contract is worth more than $400 million and is for a lump-sum turn-key project to build a gathering system from 16 productive wells, a 20,000-bpd crude oil processing facility, and an oil and gas export pipeline. The facilities should be up and running by H1 2014. The Bir Seba contract for JGC came from Groupement Bir Seba, a consortium that includes Petrovietnam Exploration Production Corp. (PVEP) and PTT Exploration & Production Algeria (PTTEP). In September the Hyundai Group was awarded a contract worth an estimated $167 million that calls for the construction of a crudegathering plant at the Bir El M’Sana oil field in southern Algeria.

Sonatrach said the contract for the crude-gathering plant was signed between itself, US independent Hess Corp., Malaysia’s Petronas, and Hyundai. The plant, which will have a capacity to handle 13,200 bpd of crude, is scheduled to be completed in 30 months with production starting in April 2014. The contract includes the production of oil processing facilities, pipelines, and an industrial base for the development of the El M’Sana oil field. The field is expected to give Algeria’s production capacity a boost. PTTEP and CNOOC partnered with Sonatrach in the drilling of a well on the Hassi Bir Rekaiz concession. The well was drilled to a total depth of 4,129 meters and reached a petroleum reservoir. During testing the well flowed oil at a rate of 1,000 bpd and a natural gas flow rate of 300 Mcf/d. More exploration wells are to be drilled on the Hassi Bir Rakaiz and the partners will also drill appraisal wells to confirm the extent of the petroleum reserves in the area. German firm RWE Dea AG obtained a permit to develop a total of six natural gas fields. ALNAFT issued the permit to develop the Reggane, Azrafil Southeast, Kahlouche, Kahlouche South, Tiouliline, and Sali gas fields in the Algerian desert. The project includes the construction of a gas treatment plant, a gas accumulation system, a pipeline for export, and infrastructure (runway, electrical systems). The total investment in the development project is expected to hit about $3 billion. The Field Development Plan foresees a constant production rate of 8 Mmcf/d over a production period of 12 years. According to preliminary estimates, a total of 104 wells distributed throughout the six areas will be developed. RWE is partnered with Repsol and Edison. While RWE and partners are looking towards development, Russian firm OAO Stroytransgaz is looking to sell off its stake in an Algerian oil block. The company is said to be close to sealing a deal with its partner and fellow Russian firm OAO Rosneft. Stroytransgaz CEO Sergei Makarov told reporters that the deal should close by the end of this year; he declined however to say how much the deal was worth. The Rosneft-Stroytransgaz Ltd. joint venture holds a 60% stake in the 245-South block project on a 50/50 basis. Sonatrach holds the remaining 40%.


African Focus

Algeria Downstream Looking for a downstream or midstream investment? Algeria has it all with thousands of miles of pipelines, refineries, LNG, and petrochemicals. Pipelines make up a big part of Algeria’s midstream sector, both on the domestic and export sides. The Hassi R’Mel gas field is the center of domestic pipelines connecting all major fields and plants, like the In Amenas field and the Arzew refinery. In August 2011 Sonatrach signed contracts with Italy’s Saipem and Egypt’s Petrojet for work on the GK3 pipeline project. Petrojet will build the first two sections of the pipeline running 433 km from Hassi R’Mel to Mechatine, and Saipem is to construct the remaining section to Skikda port and El Kala, a total of 351 km. The GK3 pipeline will boost output from Hassi R’Mel to 9 billion cubic meters (Bcm) per annum. The additional capacity will be used to feed two Algerian power stations, the domestic gas network, an LNG terminal, and also fill the proposed Galsi pipeline linking Algeria to Spain if the Galsi moves forward. Natural gas plays a big role in Algeria’s downstream sector, especially on the pipeline front. The country has a couple of pipelines exiting the country and a few more in the works. Currently there are three pipelines exporting natural gas to markets in Europe. There is the 670-mile, 2.32-billion cubic feet (Bcf) per day Trans-Mediterranean (Transmed, also called Enrico Mattei) pipeline and the 1,000-mile, 820-Mmcf/d Maghreb-Europe Gas (MEG, also called Pedro Duran Farell) pipeline. The Medgaz pipeline is the third and latest of Algeria’s export pipelines to come online. The 1,050-km long pipeline cost about €900 million to build. With a depth of more than 2,000 meters under the Mediterranean Sea, the Medgaz pipeline has the capacity to export up to 8 Bcm of natural gas per year directly to Spain. Sonatrach owns 36% of the pipeline, while Spanish companies Iberdrola and Cepsa own 20% each. Additionally, Endesa and Gas de France hold 12% each and in July 2011 Gas Natural joined the consortium acquiring a 10% stake from Sonatrach. In May 2011 Cepsa said that the Medgaz pipeline would most likely run at half-capacity for the next few years due to the reduced consumption of natural gas in Spain. At the time the muted demand from the industrial sector was a result of the recession; then in the generation sector, the fuel was marginalized by increased wind generation, and since March 2011, the government-mandated minimum stake in the mix for Spanish coal has resulted in a continued demand downturn. With gas at least flowing through the pipeline Algeria can concentrate on other export plans like the Galsi pipeline that will carry natural gas to Italy via Sardinia. This pipeline will transfer an estimated 8 Bcm annually, according to Sonatrach projections. While the project is still on the books, it may be quite a while before it moves from paper to reality. In October of last year it was thought that the pipeline project could see some movement; however, in early 2012 it was reported that the project was facing some economic and technical challenges. Yousfi said that these issues were blocking construction of the pipeline

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and raising doubts as to whether it will ever coming to fruition. While Yousfi did not say exactly what the issues were, he was quoted by the Algerian daily El Khabar as saying “With regard to the Galsi project, the partners are waiting for technical and economic conditions to be present and also to obtain administrative authorization in Italy to go ahead with the project.” Partners on the project are Sonatrach and Italian utility firms Edison, Enel, and Hera. If your going to dream, then dream big, could be the motto for the partners involved in another pipeline project, the Trans-Saharan pipeline. This pipeline is by far the most interesting and ambitious project being considered to date in Africa. The pipeline will take gas from Nigeria and pipe it over 4,000 miles through Niger and across the Sahara Desert to Algeria. No movement has been seen on the pipeline over the past couple of years, but in July 2011 one of the principles in the project, Nigeria, said that the pipeline would be completed by 2015. Algeria was one of the world’s first LNG producers and exporters and intends on adding to that capacity in the coming year. Sonatrach said that the country will start producing 5.4 million tons per annum (Mmtpa). The company launched two trains to produce LNG: a unit in Skikda with an estimated output of 5.4 Mmtpa will be ready this year and a second unit at its Arzew facility will have an output of 7.4 Mmtpa and be online in 2013. The country has another gas project on the books, the Gassi Touil. The project saw some delays while Sonatrach battled it out with its partners, finally going it alone. In late 2009 it was reported that the project completion date would be pushed back to 2012-2013; however, with the scandals that rocked Sonatrach last year no date should be considered concrete. The project did see some movement with the award of a contract to JGC. The €1-billion, 42-month contract covers the EPC of facilities on the Gassi Touil. JGC will build gas gathering and processing facilities to produce 12 Mmcm/d of gas from seven gas fields. The company will also oversee the entire project at the complex, which includes a facility for collecting and distributing output from 54 gas wells in the Gassi Touil region, 350 km of pipelines, and equipment to collect the oil extracted as a byproduct. The Gassi Touil development is expected to supply gas as feedstock to the 4.7-million ton/per year (Mmtpa) GL3Z LNG plant at Arzew. On the refining side the country’s refineries supply most of Algeria’s refined petroleum needs with a nameplate capacity of 530,000 bpd. More than one refinery was shut-in for a period of time in the past year for maintenance making it necessary for Sonatrach to import gasoil. A host of maintenance projects on Algerian refineries will aid in boosting refining capacity. Currently the country has a capacity of around 25 Mmtpa. According to Yousfi, the ongoing maintenance projects will increase refining capacity to 30 Mmtpa. The government is even planning to increase that further with the construction of two new refineries. Yousfi told state-radio that the new refineries would aid the country in meeting its long-term demand increase.


Algeria Power & Alternatives Algeria previously fell behind neighbors like Morocco and Egypt in regards to its alternative energy ventures; however, the country has recently stepped up its efforts in the industry. The government announced that it would invest about $60 billion by 2030 in its renewable energy sector by focusing on its domestic solar market.

Sahara desert sending the electricity produced to Europe, the Middle East, and Africa via high temperature superconducting transmission lines. Funded by the Japan Science and Technology Agency and the Japan International Cooperation Agency (JICA), the idea is to be propelled with $1 million each year over the next five years.

With 98% of its current income coming from the hydrocarbon sector, Algeria is looking for ways to diversify its economy to lessen its dependence on oil and gas. The country’s dependence on the sector leaves it open to vulnerabilities in the event that there is a big drop in oil prices and a Japanese professor is also trying to help shift the country’s energy focus. Hideomi Koinuma, a professor at the University of Tokyo, is the brain behind the Solar Breeder Project which aims to use the Sahara’s sand for high-purity silicon suitable for manufacturing solar panels. The project also hopes to construct plants in Algeria for PV panels and establish solar power stations throughout the empty

Not to be left behind, the Desertec Industrial Initiative (DII) and Algeria’s state-owned Sonelgaz signed an agreement for further collaboration on expanding the Sahara solar scheme in mid-December. The activities on both sides of this partnership will promote industrial cooperation in Algeria, including the creation of jobs. Sonelgaz CEO Noureddine Boutarfa said that the company also hoped that renewable energy production would be up to 2,700 MW by 2020 and 12,000 MW by 2030. Sonelgaz subsidiary CEEG chose a German company, Centrotherm, to build a €300-million solar panel plant to be located in Algiers that will be part of the DII project.


Technology and Solutions By Farrah Jacob Michaels Correspondent

AFRICAN OFFSHORE Innovative Developments Already on the scale of the Gulf of Mexico when it comes to best-in-class technologies, Africa continues to attract innovative solutions to her deep offshore. And with new frontier exploration activity expanding off Africa’s coasts, opportunities for the services contingent to the offshore sector abound.

I

Source: Anadarko Petroleum Corp.

t is well established that easy to get to reserves are dwindling and with that the industry continues to dive deeper and deeper into the offshore. While the action may have died down slightly following the economic crisis, both 2010 and 2011 saw activity pick up again and expansive plans for 2012 and beyond were laid. Over the past year a number of technologies have been employed around the continent and a number of new technologies were introduced by the industry that may land on Africa’s shores in the near future.

Africa’s Future Developments Energy business analyst firm Douglas-Westwood (DW) backs up the prospects for Africa’s offshore. In an early 2011 release DW forecast a “79% growth in capital expenditure compared to the last five years, with $206 billion to be spent on deepwater developments over the 2011-2015 period.” Of this spend DW predicts a significant amount will head to Angola and Nigeria. In the firm’s most recent estimates, it maintains its prediction for Africa although it projects Latin America is likely to experience substantial growth, exceeding Africa’s deepwater expenditure towards the end of the forecast period, driven by Petrobras’ development of its Campos and Santos pre-salt fields offshore Brazil. Africa has a host of offshore developments up and running and more on the drawing board with a number of deepwater developments across the continent scheduled to come online in the next few years. While Angola and Nigeria traditionally have received the bulk of Africabound investments to erect world class offshore developments, as exploration efforts continue to pay off in Liberia and Sierra Leone a surge of investment to these newly proven resource holders could materialze if commerciality is reached. And the most exciting developments at present will come from the recent mega gas discoveries offshore Mozambique and Tanzania. These will result in billions of

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Proposed Mozambican LNG Facility

investment dollars over the next 5-10 years. Anadarko Petroleum Corp. has discovered in excess of 30 trillion cubic feet (Tcf) of resources-inplace in Mozambique’s Offshore Area 1. The company has plans to proceed with at least one LNG train, and probably two.The final investment decision on Anadarko’s trains is expected by the end of 2013 and first sales delivery of LNG is envisioned for 2018. The preFEED work has been completed and the company is moving on to the FEED program. Anadarko says it has several experienced, high-quality consortiums that are bidding. And on neighboring Area 4, ENI has added to the resource potential of its concession offshore Mozambique with the drilling of the Mamba North East-1 exploration well. The company said that the results of this well, drilled in the eastern part of Area 4, are of special importance since they increase the resource base of Area 4 by at least 10 Tcf of which 8 Tcf are contained in reservoirs exclusively located in Area 4. ENI says this new discovery further improves the potential of the Mamba Complex in Area 4, now estimated to hold at least 40 Tcf of gas in place. The company is also looking at LNG as its primary monetization option and


On the Tanzanian side of the Rovuma Basin, natural gas resource totals also continue to climb. The BG and Ophir Energy partnership have made four successive discoveries in Tanzania’s Block 1. The latest discovery announced in March indicates gross recoverable natural gas resources in the range of 2.5 to 4.4 Tcf. Nick Cooper, CEO of Ophir Energy said: “The result from Jodari-1, at 3.4 Tcf recoverable, has materially exceeded pre-drill estimates.” Cooper added that the 2012 Ophir-BG drilling program has two objectives: firstly to test deeper intervals below the Miocene and secondly to accumulate sufficient resources to promptly confirm a two train LNG development. “These excellent Jodari-1 results are important for the future development of Tanzanian offshore industry and for the Ophir-BG partnership since they achieve both of these objectives by de-risking the previously untested deeper Lower Tertiary levels and also taking a major step closer to the second LNG train,” Cooper said.

New Developments Online

Angola’s offshore contains numerous developments that utilize best in class technologies and solutions, and can be seen in a number of past and present developments. On August 24, 2011 the country realized one of its greatest achievements yet when French major Total brought its long-awaited giant Block 17 Pazflor development on online. “We are very proud to be inaugurating Pazflor today...Following on from Girassol and Dalia, Pazflor is a new chapter in the remarkable twinned story of Total, its contractors and Angola, allowing us to successfully pursue the Block 17 adventure,” Christophe de Margerie, Total’s chairman and CEO, commented during the inauguration ceremony November 22. The Pazflor development’s output, once at peak production of 220,000 bpd, will make Total Angola’s largest producer. More developments are coming up for Angola and today’s technologies make them some of the most advanced in the world. Additional Angolan deepwater developments are scheduled to come onstream in the next few years including Total’s CLOV, also on Block 17, and BP’s

Source: Total

Petroleum Africa April 2012

Located 150 km offshore Angola, Pazflor comprises four reservoirs covering an area of 600 sq km, lying under 1,200 to 2,100 meters of sediment in water depths of 600 to 1,200 meters. The FPSO is 325 meters long, 61 meters wide and 32 meters high. The living quarters can accommodate 140 people. Pazflor’s production plateau will be 220,000 barrels per day. The two subsea production systems encompass 49 wells (25 producers, 22 water injectors, and two gas injectors), and three subsea separation units connected to six pumps. Some 175 km of pipeline and 90 km of control lines, or umbilicals traverse the seabed. Subsea gas/liquid separation: a technological world first. Three subsea separation units (SSU), each weighing a massive 1,200 metric tons, were installed at a depth of 800 meters of water in Block 17 offshore Angola. The flagship innovation of the project, these units constitute a world first in terms of technology. The FPSO Pazflor is the first vessel of its kind to process two very different grades of oil. Nearly 120,000 metric tons of steel were used in its construction, one of the largest FPSOs ever built. The onboard equipment includes gas turbines rated at a record 120 MW – enough to supply a city with some 100,000 inhabitants. The FPSO, the third on Block 17, is able to process 220,000 bopd and store 1.9 million barrels.

Block 31 PSVM development. The deepwater CLOV development project consists of the Cravo, Lirio, Orquidea, and Violeta discoveries, located in approximately 4,500 ft of water. FMC was awarded a $520 million contract for the manufacture and supply of subsea production equipment for the CLOV development, to include the manufacture of 36 subsea trees, wellheads, and controls. The company will also supply eight manifolds, two workover systems, and associated tooling and equipment. Deliveries are scheduled to commence in H1 2012. BP’s PSVM project is situated in a water depth of 2,000 meters and is named after four fields: Plutao, Saturno, Venus and Marte. Recovery of 533 mmbbls (gross) is expected during the license period. PSVM comprises 48 wells (22 initial producers, 16 water injectors, two gas injectors and 8 later infills). The floating production, storage and offloading vessel (FPSO) is based upon a VLCC conversion with 1.8 mmbbls of storage and an external turret. The sub-sea architecture comprises nine wet insulated hybrid risers, 50 km of pipe in pipe production flow lines, 56 km of plastic lined water injection lines, seven 2-slot and six 4-slot manifolds. Oil production from PSVM is scheduled to begin this year.

Pazflor Development Plan

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Project Factoids Pazflor Prowess

Without a doubt Ghana’s Jubilee Oil Field has been one of the most talked about West African developments over the past couple of years.

Source: Total

there is a possibility that ENI and Anadarko could look at unitization, although nothing is firm until both operators have had a chance to more fully explore their blocks and consider all of the options.


Technology and Solutions Project Factoids Jubilee Phase 1 Jubilee Phase 1 consisted of 17 subsea wells, including up to nine oil producers, five water injection wells, and three gas injection wells, tiedback to the Kwame Nkrumah MV21 FPSO. The FPSO boasts the largest turret ever constructed and encompassed detailed engineering, installation, and integration of 17 modules, including a water treatment plant, crude separation plant, chemical injection plant, gas process and injection plant, the turret, electricity generation plant, and a 120-room accommodation facility. The development process was designed so that produced gas will be available for export to shore and/or re-injected into the reservoir, thereby eliminating gas flaring.

The main partners on the project, Tullow Oil, Kosmos Energy, Anadarko Petroleum, and the state owned oil firm GNPC, rapidly mobilized the resources necessary to bring this project online in a lightning-quick 40 months from discovery to production. Located on two licenses, Deepwater Tano and West Cape Three Points, the Jubilee is situated in a water depth of 3,609 ft. The field will be developed in several phases, the first of which has been completed. Tullow embarked this year on the Phase 1 remedial work, and the partners hope to ramp production up. Meanwhile, Phase 1A development drilling began in February and a plan of development is expected to be submitted for Tweneboa-Enyenra-Ntomme (TEN) later in the year. While Angola is the superstar of the African offshore, Nigeria boasts some sophisticated developments of her own. The country’s producing deepwater developments such as the Agbami field operated by Chevron, and the Bonga field operated by Shell, both saw technological firsts for Africa, and in some cases the industry. The Agbami development was the first to use Steel Catenary Risers to bring production from subsea wells. The Bonga development included the fabrication and installation of the world’s largest deepwater Single Point Mooring Buoy at Nigerdock’s facilities in Nigeria. The Usan Field is Nigeria’s latest and greatest development, coming online this past February. The Usan development comprises a spread

moored FPSO vessel designed to process 180,000 bpd with a crude storage capacity of 2 million barrels. Its size of 320 meters long and 61 meters wide makes it one of the largest vessels of this type in the world. The development involves 42 wells that are connected to the FPSO by a 70 km long subsea network. Nigeria’s Greater Ebok-Okwok offshore project saw its initial phase completed under independents Oriental Energy and Afren in January with the commissioning and ramp up of all 14 production wells. The partners plan to drill up to four further horizontal production wells targeting oil bearing reservoir zones that were not drilled during the initial phases of field development work. The partners also plan to drill an exploration well on the Ebok North Fault Block during the first half of the year. The selected development solution for the field incorporated two un-manned wellhead platforms, one positioned in the Central Area and one at the West Fault Block, tied back to a MOPU where crude oil is processed, and then piped to a nearby spread-moored FSO. Shell’s producing Bonga project in Nigeria will see an offshoot development with the Bonga North-West field. The field is being developed with 12 subsea wells tied back to the Bonga field’s main infrastructure. Shell will use the Saipem vessels Saipem FDS and Saipem 3000 to carry out most of the subsea work between H2 2012 and Q4 2013. During any given month, the number of land rigs compared to offshore rigs active in Egypt is about triple, but the disparity does not accurately paint a clear picture of its offshore arena. The North African country has more than one sophisticated deepwater development as over the years BG, Petronas, BP, and ENI have brought more than a few offshore developments online. Fields like the Tuna on the Temsah Concession, the West Delta Deep Marine (WDDM), and the Scarab-Saffron Field (Egypt’s first deepwater development), have all brought technological advances to the country’s offshore arena. The latest happenings in Egypt’s deepwater take place in the Mediterranean where BG and Petronas have continued their phased

Project Factoids Usan Field Development

Source: Afren

Discovered in 2002 Proven and probable reserves of Usan were put at in excess of 500 million barrels of oil Project sanctioned in 2008 The Usan FPSO is 320 meters long, 61 meters wide, and weighs 114,000 tons Cameron was awarded a contract to provide subsea systems for the initial phase of the 44-well subsea development Cameron subcontracted Acergy to provide fabrication, assembly and testing of eight manifolds and associated structures Saipem was awarded the contract for the umbilicals, flowlines, risers and oil loading terminal activities The project recorded many firsts in technology for several Nigerian companies directly related to the project. Fabrication was carried out locally in Nigeria, mainly in Saipem’s Rumuolumeni yard. Afren’s Ebok Field Development


Project Factoids WDDM Phase 8a A number of service and drilling companies were involved in Phase 8a including Saipem and Diamond Offshore whose Scarabeo 6 and Ocean Endeavour vessels, respectively undertook drilling and completion operations. Technip was awarded the main subsea EPIC contract that included detailed engineering design, procurement, fabrication, and installation. The majority of the subsea controls systems were supplied by Vetco Gray, with Aker Solutions providing controls systems for one well. Cameron supplied the nine subsea trees and subsea deepwater connector system components.

development of the WDDM. The partners brought the initial stage of Phase 7 production online in January 2011, and one year later brought the phase’s second stage online. While this stage revolved around onshore facilities, it was through the technological advances of the previous offshore phases that allowed this milestone. Adding to the WDDM’s status of a world-class offshore development was the addition

of Phase 8a to the line up in October 2011. This phase consisted of an extension of the existing deepwater subsea infrastructure and comprises nine subsea wells. It also had the distinction of seeing all of the subsea structures constructed in country. Petrojet, an affiliate of EGPC, fabricated all of the subsea structures in its Maadia yard, making it the largest subsea construction project completed by the facility. Opportunities abound for service companies in Egypt’s offshore sector, within existing developments and those in the works. One of these opportunities comes from the development of the West Nile Delta, or WND in the North Alexandria Concession. The WND is being developed by BP in partnership with RWE Dea. The WND’s resource base comes from the successful exploration and appraisal of eight discoveries. There were also two Miocene discoveries made that will eventually be developed – the Raven and the Taurus Deep – and one Oligocene discovery, the Hodoa. The WND project is the first development phase of these discoveries and will focus on the five fields (Giza, Fayoum, Raven, Taurus, and Libra). The selected development case for the first phase of development involves 24 subsea wells tied back to shore by three export trunk lines to a new onshore processing facility.


a

By Mark Pabst Senior Correspondent

e dia M P l ar

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A Soc i

Oil Security

The short film Kony 2012 is many things to many people. To some it is a call to action for ordinary citizens. For others it is a gross over simplification of a complex situation. For the international oil industry, it should be an alarm bell warning that the new media landscape is fraught with potential danger.

T

he film Kony 2012 is small by just about every conventional measure. It clocks in at a mere 29 minutes and 59 seconds. It lacks a major commercial distributor. According to documents made public by Invisible Children, the non-governmental organization that produced the film, its budget was relatively modest by contemporary filmmaking standards. However, through savvy use of social media, Invisible Children has made Kony 2012 an international sensation.

Based on the LRA’s long history and brutal tactics, it might seem somewhat disingenuous for an NGO to claim it is raising awareness about an organization that has drawn increasingly negative attention from the global military, political, diplomatic, and human rights communities over the last ten years. However, news of the LRA’s savageness has apparently not trickled down to average citizens, or even many in the media world. In October, after US President Barack Obama authorized 100 soldiers to deploy to Central Africa to support The splash made by Kony 2012 is all the more surprising given the a regional campaign against the LRA, US-based conservative talk show film’s purported purpose, namely “to raise international awareness” host Rush Limbaugh criticized the president’s move and even defended about Joseph Kony, leader of the Lord’s Resistance Army (LRA). The the LRA. “Now, up until today, most Americans have never heard of LRA, originally formed in northern Uganda in 1987 to fight against the Lord’s Resistance Army, and here we are at war with them,” the government of Ugandan President Yoweri Museveni, has been Limbaugh said on an October 14 broadcast listened to by an implicated in widespread human rights abuses since the early estimated 15 million people. “Lord’s Resistance Army are 1990s. Ostensibly a Christian militia with a political Christians. They are fighting the Muslims in Sudan. And ideology based on the Ten Commandments, the group Obama has sent troops, United States troops to remove has become infamous over the last decade for its them from the battlefield, which means kill them.” Kony 2012 crashed use of kidnapping children as a method of like a tsunami through augmenting its ranks. A 2006 report by UNICEF Although Limbaugh later retracted his comments the twitterverse, and the estimated the LRA had kidnapped at least 25,000 after some research by his staff, his gaffe children since the late 1980s. However, until NGO itself racked up almost underscored the lack of popular knowledge fairly recently the international community has about Kony and the LRA, something Invisible half a million twitter humored the LRA, attempting to address its Children sought to correct with Kony 2012. By perceived grievances. International figures, many measurements the NGO succeeded beyond followers in the weeks including the late Pope John Paul II and former its wildest dreams. The film, uploaded to YouTube immediately following March 5, was viewed over 85 million times in less United States’ President Jimmy Carter attempted the film’s release. to mediate between the LRA and the Ugandan than a month, becoming the most-watched viral government at various points in the conflict. After it video for a non-profit cause in Internet history. Kony became obvious that the LRA was little more than a terrorist 2012 crashed like a tsunami through the twitterverse, and group, soldiers from various countries, including UN blue helmets and the NGO itself racked up almost half a million twitter followers in the United States’ Special Forces, tried to destroy the group through weeks immediately following the film’s release. military means. In 2005 the International Criminal Court (ICC) issued arrest warrants for Kony and four other LRA commanders, charging Despite its popular success, the film drew decidedly mixed reviews. them with crimes against humanity, sexual slavery, and using The YouTube response was overwhelmingly positive, with almost children as combatants. 1.4 million likes to a mere 128,000 dislikes by the third week of March.

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The BBC called Kony 2012 “emotive, self-confident, slick, and powerful.” However critics complained that the film was simplistic, unclear about the facts in the Kony case, and about five years too late to do anything for Ugandan children. Many Ugandans, especially those in power, were upset by the film, complaining that it cast their country in a bad light. Kony 2012 fails to mention that Kony is probably somewhere in the Democratic Republic of Congo, and that the LRA has not been a threat to Ugandan children for years. In his own nine minute YouTube video Ugandan Prime Minister Amama Mbabazi seemed particularly chagrined that Kony 2012 was misleading on Kony’s current whereabouts, saying, “The Kony 2012 campaign fails to make one crucial point clear. Joseph Kony is not in Uganda.” At the time Kony 2012 was approaching 85 million views Mbabazi’s response video had attracted about 86,000. More stinging to Invisible Children are charges that Kony 2012’s geographic vagueness and decision to focus on what ordinary citizens in the developed world can do to assist “helpless Africans,” fosters the type of paternalistic attitude to Africa that most NGOs are trying to move away from. The backlash was almost as big as the film itself. Kony 2012 director (and de facto star, since he gets more screen time in the video than anyone else) Jason Russell apparently took the criticism especially hard, suffering a breakdown in mid March. According to police reports he ran around his San Diego neighborhood in his underwear, screaming and pounding the sidewalk with his fists. Russell’s wife blamed his behavior on all the negative attention given to the film, and the incident only fed into the media circus that has come to surround all things Kony. Invisible Children CEO Ben Keesey was quick to respond to the Kony 2012’s critics, fittingly posting his own online video. In his video Keesey dismisses claims that Kony 2012 is a simplistic portrayal of both Kony and the LRA, saying the film is “connected to a really deep, thoughtful, very intentional and strategic campaign.” Before his breakdown Russell used similar language to answer the critics, saying the film’s simplicity was intentional and designed to be “the gateway into the conversation… we want you to keep investigating, we want you to read the history.” Despite what critics are saying, the simplistic message of Kony 2012 seems to be resonating with many people. Invisible Children sold out of it the Kony 2012 action kit ($30) and its Kony 2012 bracelet ($10). According to the Invisible Children website the action kit can turn anyone into an “advocate of awesome” since it contains “everything you’ll need to take part in our KONY 2012 campaign… includ(ing) an official campaign T-shirt + KONY bracelet + Action guide + Stickers + Button + Posters.” After selling out of the action kit, Invisible Children made elements of the kit, including the poster, free to download from their website. The poster and stickers were initially intended for a part of the campaign called “cover the night,” when supporters were meant to paper cities with images of Kony to raise awareness about the LRA. The simple idea behind Kony 2012, namely to make Kony so famous among ordinary people that they demand he is arrested this year, continues to ring despite the backlash. In fact, Invisible Children is falling back on the simplicity of its message to answer the critics,

saying that the criticism of their campaign does not change the fact that Kony must be brought to justice. “We’ve done our utmost to be as inclusive, transparent, and factual as possible,” reads a message on the group’s website. “Let’s focus on what matters, and what we DO agree on: Joseph Kony needs to be stopped.” The tale of Kony 2012 is more than simply a parable about modern media. For oil companies that work in places like Africa it may also be a cautionary tale. Oil companies have famously been the target of human rights activists and NGOs for their African endeavors in the past. Shell’s operations in Nigeria and Talisman’s activities in Sudan are possibly the best known of these types of campaigns. However, both these campaigns occurred before the emergence of YouTube, Twitter, and Facebook, and a social media campaign with the visibility of something like Kony 2012 has never been undertaken against an oil company. Certainly Chevron was not excited initially when the documentary Crude, about a $27 billion environmental lawsuit filed against the company on behalf of residents of Ecuador’s Amazon, debuted in late 2009. However, unlike Kony 2012, Crude was feature length, had a complex storyline, and was not attached to a larger media campaign against the company. In fact, Chevron later subpoenaed outtakes of the documentary and used them in a counter lawsuit against the legal team representing the Ecuadoreans. The company used the footage to support its claims that the lawyers for the Ecuadorians colluded with a supposedly independent court-appointed expert in Ecuador who subsequently recommended penalizing Chevron for environmental damage in the Amazon. A similar move would be nearly impossible with a film like Kony 2012, if only because the film includes almost nothing that has not already been reported about the LRA or Joseph Kony. It is nothing more than a stylish attempt to elicit an emotional response; and thus its simplicity really is part of the film’s strength. Russell’s profile on the Invisible Children website says that the director’s “sparks of creative intelligence and insanity have propelled IC to redefine the concept of humanitarian work, offering new life to old hope. He admires Oprah, Bono, Steven Spielberg, Walt Disney, Steve Jobs, Baz Luhrmann, and Dan Eldon and believes wholeheartedly in magic and the impossible.” Some may dismiss the statement as a nearly meaningless jumble of words followed by some drivel about admiration for celebrities. However the statement is quite illuminating in the case of Kony 2012. Russell’s movie has taken Joseph Kony and the LRA, a subject that was already well known in certain niche circles, and made it a cause célèbre of millions. In the process the film takes a stab at redefining humanitarian work, redefining humanitarianism as merely spreading the word about a problem. One does not have to look very far to find potential examples of this new type of humanitarianism that could hurt oil companies. A film in the Kony 2012 mold about the Niger Delta or Sudan could certainly put some oil companies on the hot seat. While oil companies presumably have access to better PR firms than Joseph Kony, it is often difficult to defend against attacks that rely more on emotion than facts. However, these types of emotional attacks may soon have the power of social media behind them, and no one knows who the target of the next wildly successful social media guerilla campaign will be.

Petroleum Africa April 2012

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Book Review Reviewed by Mark Pabst Senior Correspondent

Viewing Tahrir in the Light of History The Struggle for Egypt: From Nasser to Tahrir Square By: Steven A. Cook Oxford University Press 2012

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ith Syria devolving into what looks like a low grade civil war, post-Saleh Yemen struggling with a resurgent Al Qaeda and a fractured military, and the majority of Arab leaders still clinging stubbornly to the status quo, it is easy to forget the early, heady days of the Arab Spring. The term once had a fitting double meaning. Not only did it signal a type of political rebirth for an Arab street that had remained largely quiet and compliant under decades of dictatorial rule, its height also roughly coincided with the 2011 spring season. The spring metaphor owed much of its power to the uprising in Egypt, where January demonstrations led to the February ouster of Egyptian President Hosni Mubarak. These events in turn resulted in a March constitutional referendum and then an early April protest organized by pro-democracy activists to “protect the revolution.” The uprising, with its most visible symbol being the thousands of demonstrators that packed Cairo’s Tahrir Square, not only captured the imagination of the world but also embodied the spring-like qualities that gave the revolts their collective nickname.

almost all facets of power, the military, religious parties, the secular left, and a smattering of technocrats are now jostling for control. While the uprising itself appeared both sudden and unexpected, according to Cook the seeds of both Mubarak’s fall and the groups that are now competing for dominance were sown several decades ago. In particular the Islamist political parties, the big winners in Egypt’s most recent parliamentary elections, have a long and complex relationship with the Egyptian government, especially the authorities that followed the expulsion of Egypt’s last king in 1952. Over the course of more than 300 pages Cook details the political dance between the Islamists and the military clique, known as the Free Officers, that ruled the country after exiling King Farouk. The story not only sheds light on how various religious parties survived during periods of government repression, but also reminds readers that Islamists and Egypt’s military establishment have often used each other as a proxy against political rivals. Gamal Abdel Nasser, the first Free Officer to rule Egypt, persecuted the Islamists. Nasser’s successor, Anwar Sadat, infamously used them as a bulwark against leftists.

Egypt’s seemingly outsized role in the Arab Spring is due in part to its The book also details the tentativeness of the first political steps taken population (the largest in the Arab world), but also in part to its historical by the Free Officers back in the 1950s. While less detailed histories role as a political and cultural leader in the region. In fact, while the often lead one to believe that the military’s bold actions following the Egyptian uprising surprised almost everyone, Mubarak’s fall end of the monarchy somehow catapulted Egypt into the role of major makes much more sense when placed in a historic context. That is regional player and champion of Arab nationalism, Cook points out exactly what author Steven Cook attempts to do in his latest book that the military men who took the reigns of power had no firm The Struggle for Egypt: From Nasser to Tahrir Square. Cook program or ideology, and in reality often vacillated between Where is a senior fellow at the Council on Foreign Relations, opposing policies. He even shows that the socialist Mubarak once a United States-based think tank, and has previously policies that supposedly governed the Egyptian written a critical review of the ruling cliques in Turkey, economy during the late 1950s and 1960s were dominated almost all Algeria, and Egypt. In The Struggle for Egypt he facets of power, the military, constantly in flux, with the government willing to provides more of the same, but has new material settle on any policy that would placate the masses religious parties, the to work with in the political turbulence that has secular left, and a smattering and produce solid economic growth. characterized Egypt over the last 15 months. of technocrats are Today, with a military clique once again in power now jostling for Though a conventional history in many ways, the book and the Islamists emerging as a potential political force, control. also helps explain the rich political stew that has emerged there is a real temptation to gain insights about Egypt’s in post-Mubarak Egypt. Where Mubarak once dominated future from its past. Cook himself even writes that after

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the fall of Mubarak, “with the military in control of the and determine their goals and policies. For decades What country, there was a strange back to the future sense Egyptians have had minimal say in domestic or foreign Egypt’s long-term of things.” However, to his credit as a historian, he policy, now suddenly these policies are potentially future holds is anyone’s is quick to caution about drawing too many parallels back in play and no group is sure exactly how guess. However, it will almost between the current ruling military group, known to proceed. as the Supreme Council of the Armed Forces, and definitely be influenced by its past. the Free Officers. Of course, some similarities After all, the uprising that led to What Egypt’s long-term future holds is anyone’s are difficult to ignore, and Cook writes that “by Mubarak’s downfall resulted in a guess. However, it will almost definitely be far the most striking-though far from perfect influenced by its past. After all, the uprising military government not entirely analogy… was that, like the Free Officers in 1952, that led to Mubarak’s downfall resulted in a unlike the one that eventually the Supreme Council had no plan other than a vague military government not entirely unlike the one that followed the fall of notion about turning the country over to civilian rule eventually followed the fall of Farouk. The 1952 Farouk as soon as conditions warranted.” revolution, which was executed in a matter of hours, revealed its true nature very slowly. It took the Free Officers Of course, in Egypt’s current political theater, improvisation is key. months to declare a republic and years to develop meaningful domestic Throughout The Struggle for Egypt Cook shows that even players with and foreign policies. If the most recent Egyptian revolution, which strong ideological underpinnings (like religious parties) are still trying itself only took a matter of weeks, is anything like the last one, it will to figure out how to negotiate the country’s new political landscape be some time before we really know how it has changed the country.


New Products & Services New G3i Cable System Delivers High Performance and Operational Efficiency INOVA Geophysical has released its G3i™, a highly flexible and rugged land recording system. The mega channel recording system offers the industry a highly-portable technology that provides support for conducting a wide range of land seismic surveys, including high density wide azimuth acquisition for the world’s most challenging environments. Based on years of product development experience in seismic acquisition technologies, INOVA has developed a powerful, cable-based recording system that offers advanced ground electronics, power-down-the-line (PDL) technology and high productivity vibroseis (HPVS) capabilities. G3i supports over 100,000 channels and can be used to capture 2D, high density 3D and time-lapse 4D data. The addition of this new cabled land system will offer seismic players in the industry another alternative for cable-based recording that meets a broad scope of operational demands, allowing contractors to achieve a higher rate of return on their assets. Several key features provide immense benefit to geophysical contractors, including its rugged, aircraft grade aluminum enclosure and high-strength polycarbonate exterior for maximum durability. Power management and deployment logistics are simplified because the G3i system utilizes PDL technology to evenly distribute battery power to multiple field station units using the power supply (PSU) and fiber tap (FTU) units along with standard 12V batteries. In addition, G3i's ground electronics consume only 235mW of power per channel measured at PSU.

G3i was also designed with the “do more with less” philosophy in mind; contractors can take advantage of having four analog channels in a 1.2 kg compact, remote acquisition module (RAM) station, as opposed to using the existing single channel stations offered by competitors. With less field equipment to transport, maintain, and troubleshoot, surveys can be operated more efficiently. G3i was initially field tested in November of 2011 and later in February of this year for High Productivity Vibroseis techniques in an oilfield in western China by BGP, the largest land geophysical contractor in the world. Both tests met BGP’s high standards of excellence.

Hampson-Russell Launches Innovative Reservoir Characterization Software Suite Hampson-Russell Software & Services, a CGGVeritas company, launched a complete redesign of its suite of reservoir characterization applications. Christened HRS-9, the suite of applications has new functionality, and now shares a common intuitive interface and data management system among all modules. The enhanced software interface acts as a dashboard, integrating all functionality from the previously separate programs into a single application. This new architecture is further enhanced with user-customizable workflows which span the historic separate applications, resulting in a more complete, solutions-based approach to reservoir characterization. Efficiency and speed advancements include multi-threaded 64-bit computing, allowing for the managed use of multiple CPU cores, batch processing for optimum resource scheduling, and the ability to chain processes together that require the output from one process as the input for another.

50

Petroleum Africa April 2012

The Hampson-Russell HRS-9 software suite encompasses a wide spectrum of seismic exploration and reservoir characterization technologies; from AVO analysis and inversion to 4D and multicomponent interpretation. The new integrated approach in HRS9 facilitates a more in-depth analysis of the reservoir, further reducing exploration risk.


TDW Delivers Largest SmartPlug Tool Ever TDW Offshore Services AS (TDW) has successfully designed and built a customized 48-inch SmartPlug® pipeline pressure isolation tool for Nord Stream AG. Weighing approximately 12 tons, it is the largest SmartPlug tool ever produced. Nord Stream retained TDW to assist in developing contingency solutions for pipelay, pressure testing, and planned future maintenance of the Nord Stream gas pipelines. Upon completion, the two 48-inch pipelines will extend 758 miles from Russia through the Baltic Sea to Germany. TDW carried out a series of pre-engineering studies before finalizing the design. The SmartPlug tool was designed, built, and rigorously tested by TDW at its global headquarters in Stavanger. The new 48-inch SmartPlug tool will be used to safely isolate pipeline pressure during scheduled pipeline maintenance and potential valve change-outs. It is currently Type Approved by Det Norske Veritas for a maximum operating pressure of 199 Bar. “The tool design is based on our proven 42-inch SmartPlug design,” said Larry Ryan, Director, Operations for TDW Offshore Services. “However, the exceptionally large diameter of the pipeline meant that Nord Stream required a SmartPlug tool that was 30% larger. The

new SmartPlug tool is not only exceptionally large, but is also capable of isolation at extremely high pressures,” he added. The SmartPlug pipeline pressure isolation method is designed to provide great value to owners and operators of pipeline systems. It makes it possible to safely isolate the area targeted for work from hydrocarbons without bleeding down the entire work zone, which is costly and time-consuming. In the case of Nord Stream, there are no mid-line valves available for use, so the entire 1,220 km pipeline would have had to be depressurized, taking a significant amount of time. Given the minimal amount of gas released while isolating a work area, the new SmartPlug tool offers more than economic benefits. It is also very effective in minimizing impact on the environment.


Facts and Figures

A F RI CA N RI G CO U N T February 2012

Country

January 2012

Variance From Last Month

Oil

Gas

Misc

Total

Oil

Gas

Misc

Oil

Gas

Misc

Total

ALGERIA

25

6

1

32

5

(1)

0

20

7

1

28

ANGOLA

10

0

0

10

2

0

0

8

0

0

8

CAMEROON

0

0

0

0

0

0

0

0

0

0

0

CHAD

2

0

0

2

0

0

0

2

0

0

2

CONGO

5

0

0

5

2

0

0

3

0

0

3

DRC

0

0

0

0

0

0

0

0

0

0

0

EGYPT

52

21

0

73

0

1

0

52

20

0

72

EQUATORIAL GUINEA

2

0

0

2

0

0

0

2

0

0

2

ETHIOPIA

0

0

0

0

0

0

0

0

0

0

0

GABON

4

0

0

4

(1)

0

0

5

0

0

5

GHANA

0

0

1

1

(1)

0

0

1

0

1

2

IVORY COAST

0

0

0

0

0

0

0

0

0

0

0

KENYA

0

0

1

1

0

0

0

0

0

1

1

LIBERIA

1

0

0

1

0

0

0

1

0

0

1

LIBYA***

0

0

0

0

0

0

0

0

0

0

0

MAURITANIA

0

0

0

0

0

0

0

0

0

0

0

MOROCCO

0

0

0

0

0

0

0

0

0

0

0

MOZAMBIQUE

2

0

0

2

0

0

0

2

0

0

2

NIGERIA

13

4

1

18

(2)

1

0

15

3

1

19

SENEGAL

0

0

0

0

0

0

0

0

0

0

0

SOUTH AFRICA

0

0

0

0

0

0

0

0

0

0

0

TANZANIA

1

0

1

2

0

0

0

1

0

1

2

TUNISIA

0

0

1

1

(2)

0

0

2

0

1

3

UGANDA

0

0

0

0

0

0

0

0

0

0

0

AFRICA

117

31

6

154

3

0

0

114

30

6

150

***The last report of rig activity in Libya was for February 2011.

WO RLD RI G CO U N T February 2012

Source: Baker Hughes International

Country

52

January 2012

Variance From Last Month

Oil

Gas

Misc

Total

Oil

Gas

Misc

Oil

Gas

Misc

Total

EUROPE

82

25

13

120

15

(3)

0

67

28

13

108

MIDDLE EAST

173

65

0

238

(4)

4

(1)

177

61

1

239

AFRICA

117

31

6

154

3

1

0

114

30

6

150

LATIN AMERICA

381

53

5

439

14

3

2

367

50

3

420

ASIA PACIFIC

179

54

20

253

1

0

(2)

178

54

22

254

INTERNATIONAL

932

228

44

1204

29

5

(1)

903

223

45

1171

Petroleum Africa April 2012


Africa Production of Crude Oil

OECD Production of Crude Oil

(including Lease Condensate, Thousand Barrels/Day)

(including Lease Condensate, Thousand Barrels/Day)

2011

2011

Country

September October November December

Country

1731

1731

1731

1540

Australia

347

357

447

437

Angola

1840

1790

1940

1890

Canada

2952

2976

2974

3106

Cameroon

60

60

60

59

Denmark

210.415

216.694

210.751

185.367

Chad

130

140

140

140

Germany

31

31

31

31

Congo (Brazzaville)

285

290

290

298

Germany (Offshore)

25

25

25

25

Congo (Kinshasa)

20

20

20

20

Mexico

2534

2598

2573

2601 14

Cote d’Ivoire (IvoryCoast)

40

40

40

40

Netherlands

13

14

13

Egypt

505

505

505

505

Netherlands (Offshore)

10

10

9

9

Equatorial Guinea

274

273

276

261

Norway

1636

1756

1764

1713

Gabon

245

247

245

245

United Kingdom

14

15

16

17

Ghana

85

85

85

70

United Kingdom (Offshore)

901

1032

1006

995

Libya

100

300

550

800

United States

5641.167

5783.677

5842.267

5877.032

7

7

7

7

Total OECD

14594.782 15090.57

15193.22

15268.60

Morocco

0.5

0.5

0.5

0.5

282.202

258.201

Niger

15

15

15

20

2600

2400

2500

2400

4

4

4

4

425

405

375

350

Mauritania

Nigeria South Africa Sudan and South Sudan Tunisia

80

80

80

80

Africa

8446.5

8392.5

8863.5

8729.5

All other OECD*

(Thousand Barrels/Day)

OPEC Production of Crude Oil (including Lease Condensate, Thousand Barrels/Day)

Country September October

276.199

2011

2011 Country

280.198

*All other OECD countries with production include Austria, Chile, Czech Republic, France, Greece, Hungary, Italy, Japan, New Zealand, Poland, Slovakia, Spain, and Turkey.

Production of Natural Gas Plant Liquids

Source: EIA

September October November December

Algeria

November December

Ecuador

September October

November December

501.522

501.522

504.118

500.601

Algeria

350

350

350

345

Iran

4000

4000

4000

3950

Angola

55

55

55

55

Iraq

2725

2725

2725

2725

Congo (Brazzaville)

8

8

8

9

Kuwait

2600

2600

2600

2600

Egypt

150

150

150

175

Qatar

1300

1300

1300

1300

Equatorial Guinea

24

24

24

46

Saudi Arabia

9540

9540

9840

10040

Libya

0

35

35

35

United Arab Emirates

2720

2720

2720

2820

South Africa

5

5

5

5

Venezuela

2240

2240

2240

Tunisia

3

3

3

3

Total Africa

595

630

630

673

Total World

8,479.40

8,708.13

8,770.24

8,874.04

Total OPEC Less African Members 25626.522 25626.522 25929.118 Total OPEC With African Members 32141.824 31847.522 32650.118

2240 26175.601 32805.601

**For OPEC’s African members’ individual production see Africa chart.

www.AE-Africa.com


Facts and Figures

O I L P RI C ES Marh 1 OPEC Basket Brent Crude Nymex

$ 122.08 125.76 109.27

OPEC Basket

Brent Crude

Nymex

Marh 6 OPEC Basket Brent Crude Nymex

121.98 125.03 105.21 Marh 8 124.13 12796 107.06

OPEC Basket Brent Crude Nymex

107.58

107.27

107.03

March 21

March 26

107.01 March 13

March 16

107.06

March 1

March 26

March 21

March 16

123.49 125.85 107.03

March 8

109.27

Marh 26 OPEC Basket Brent Crude Nymex

March 6

122.91 123.89 107.27

105.21

125.85

123.89

128.14

125.09

127.96 March 8

March 13

125.03

123.49 March 26

March 6

122.91 March 21

125.76

122.92 March 16

124.59 March 13

121.98

124.13

122.08

Marh 21 OPEC Basket Brent Crude Nymex

March 6

122.92 125.09 107.58

March 1

Marh 16 OPEC Basket Brent Crude Nymex

March 8

124.59 128.14 107.01

March 1

Marh 13 OPEC Basket Brent Crude Nymex

135 134 133 132 131 130 129 128 127 126 125 124 123 122 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 103 102 101 100 99 98 97 96 95 94 93 92 91 90

G A S P RI C ES March 1 Henry Hub

$

Spot Price

2.45

New York

3.0

Futures Price*

2.58 March 5 2.31

Henry Hub

2.47

New York

2.75

March 8 Henry Hub

2.24

New York

2.37 March 13

Henry Hub

2.15

New York

2.41

2.50

March 16 Henry Hub

54

Petroleum Africa April 2012

2.32

2.45

2.44

2.41

2.25

March 26

March 21

March 16

March 13

March 8

March 5

March 1

2.16 March 26

2.15

2.21

2.01 March 21

Dollars per BTU

March 16

* Contract 2

March 13

2.32

2.24

2.16

New York

March 1

Henry Hub

March 8

2.45 March 26

2.31

New York

March 5

2.21

2.45

Henry Hub

2.372.37

2.58

2.44 March 21

2.47

2.01

New York

2.0


Conferences April 15th Africa OILGASMINE Trade and Finance Conference & Exhibition

Brazzaville, Republic of Congo www.ogtfafrica.com

17-18

18th Latin Oil Week

Rio de Janeiro, Brazil

www.petro21.com

17-18

4th

Nigeria International Infrastructure and Construction

Lagos, Nigeria

www.cwcnic.com

22-25

6th

German-African Energy Forum

Hamburg, Germany

www.energyafrica.de

24-25

Mozambique Mining and Energy Conference & Exhibition (MMEC)

Maputo, Mozambique

www.mozmec.com

26-27

Pre-Salt Tech 2012

Rio de Janeiro, Brazil

www.presalttech.com

26-27

5th

2-6

30-May 3

Texas, USA

www.energycorporateafrica.com

Offshore Technology Conference (OTC) 2012

Texas, USA

www.otcnet.org

Angola International Oil & Gas Conference & Exhibition (AIOGACE 2012)

Luanda, Angola

www.aiogace.com

Annual Sub-Saharan Africa Oil & Gas Conference

May 7-9

LNG 2012

London, UK

www.smi-online.co.uk

21-23

9-10

6th Annual Global Refining Summit

Barcelona, Spain

www.refiningsummit.com

21-24

4th African Gas-LNG Conference

London, UK

www.petro21.com

21-24

African Utility Week 2012

Johannesburg, South Africa

www.african-utility-week.com

22-23

12th World XTL Summit 12th International Downstream Technology & Strategy Conference (IDTC 2012)

London, UK

www.cwcxtl.com

Rome, Italy

www.europetro.com

24-24

5th Nigeria Upstream Conference

London, UK

www.petro21.com

24-25

10th International Bottom of the Barrel Technology Conference (BBTC 2012)

Rome, Italy

www.europetro.com

4-8

25th World Gas Conference

Kuala Lumpur, Malaysia

www.wgc2012.com

7-8

2nd Cameroon International Energy & Water Conference & Exhibition (CIEW 2012)

YaoundĂŠ, Cameroon

www.camenergywater.com

12-14

East Africa Gas Forum

Dar es Salaam, Tanzania

www.cvent.com

13-15

5th

Annual Pipe Tech World Summit

Istanbul, Turkey

www.pipetechsummit.com

13-15

5th Annual Pipe Tech World Summit

Istanbul, Turkey

www.pipetechsummit.com

19-22

2nd Zambian International Mining & Energy Conference & Exhibition (ZIMEC 2012)

Lusaka, Zambia

www.zimeczambia.com

26-28

Africa Energy Forum 2012

Berlin, Germany

www.energynet.co.uk

26-28

Nigeria Oil & Gas Technology

Lagos, Nigeria

www.cwcnogtech.com

17th Asia Oil Week

Singapore, Singapore

www.petro21.com

Africa Mining Congress 2012

Johannesburg, South Africa

www.terrapinn.com

Accra, Ghana

www.ghanaoilsummit2012.com

22-23

June

July 9-10 16-19

September 13-14

The 2nd Ghana Oil & Gas Summit 2012

October 8-11

Gastech Conference & Exhibition

London, UK

www.gastech.co.uk

8-11

2nd Mauritanian Mining & Oil & Gas Conference & Exhibition (MAURITANIDES 2012)

Nouakchott, Mauritania

www.mauritanides2012.com

16-18

Technology of Oil & Gas Conference and Exhibition (TOG 2012)

Tripoli, Libya

www.libyatog.com

22-23

4th Annual World Refining Technology Summit 2012

Brussels, Belgium

www.cerebralbusiness.com

23-24

Offshore Energy 2012

Amsterdam, Netherlands

www.offshore-energy.biz Petroleum Africa April 2012

55


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April 2012