AfrOil 19th Oct 2010 - Centric’s African rift frontier potential

19 October 2010

AfrOil
Week 41

Issue 361
News
Analysis
Intelligence
Published by
AFRICA OIL & GAS MONITOR
NewsBase
COMMENTARY 2 NEWS THIS WEEK…

Gabon delay
Gabon struggles to sustain plans on
auction delay 2

Centric chases rift frontier potential 4
The Gabonese government has announced an
INVESTMENT 6
indefinite delay to the launch of its 10th bid round.
African refining plans fall short 6

Zuma backs economic case for Project
Gabon’s oil production has been declining for
Mthombo 6 some years. The country hopes that exploration of
Sirius Petroleum shines light on Nigeria’s its ultra-deepwater will turn this trend around. (Page 2)
Ke field 7
The country’s reasons for putting off the bid
PERFORMANCE 7
round focus on concerns highlighted by BP’s Gulf
Spain, Algeria fight on gas pricing 7 of Mexico disaster. (Page 9)
Confidence in Libya continues to
deteriorate

Petroceltic updates North African
8
Refining woes
appraisal programme 8 Africa’s refining sector is slow-moving and very
POLICY 9 few schemes actually make progress.
Tullow continues Kinshasa dispute 9 CITAC has diagnosed the downstream industry
Gabon postpones round again 9 and appears unimpressed. (Page 6)

Libyan squeeze
Obasanjo aide charged over NLNG case10

Abyei talks collapse, jeopardising
Sudanese production 10
Tripoli has proved to be a difficult partner in many
PROJECTS & COMPANIES 11
ways and this is slowing development.
Shell to launch Marsa el-Brega tender 11

Sonangol and PetroSA plot refinery joint
A number of companies have dropped licences as
venture 11 a result of poor results and tough terms. (Page 8)

NEWS IN BRIEF 12
Reports suggest work on Marsa el-Brega may
COURSES 20 soon be up for tender again, but it is unclear that
CONFERENCES 21
things will be any better this time around. (Page 11)

For analysis and commentary on these and other stories, plus the latest oil and gas developments, see inside…
Copyright © 2010 NewsBase Ltd.
www.newsbase.com Edited by Ed Reed
All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All
reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its contents

AfrOil 19 October 2010, Week 41 page 2

COMMENTARY

Gabon struggles to sustain
plans on auction delay
Libreville has announced another delay to its 10th licence round, throwing into question
the country’s plans to sustain production levels through licensing the technically difficult
ultra-deepwater offshore
By Alfonse Dubere
The round was due to be held on October 27 but has been postponed indefinitely
Environmental concerns are said to be a major factor in the decision to delay the round
Gabon needs production from new areas to overcome the decline of the last few years

Gabon has postponed its planned 10th Total, which have recently announced Petroleum and Hydrocarbons Minister
licensing round yet again. The news will imminent Gabonese commitments. Julien Nkoghe Bekale said on October
come as a disappointment to explorers The official line from Libreville is that 12. The minister said exploration costs
that have been eyeing the West African the auction of 42 offshore drilling blocks and environmental concerns had changed
country’s deeper offshore waters as a – which had originally been scheduled since the Gulf of Mexico spill.
new oil frontier opportunity – a view for March and was then put off until “This approach is consistent with our
mirrored by foreign majors LUKoil and October 27 – has been postponed hopes to achieve the best standards for
indefinitely, risk prevention and industrial safety, and
owing to a compliance with environmental
number of standards,” he was reported as saying by
factors, Reuters.
including a The Gabonese authorities want “to be
requirement assured of certain guarantees, notably
for improved with regard to security, the environment
security and and the opportunities for operators,” an
environment official said. Libreville is taking into
guarantees. account what happened in the Gulf of
Africa’s Mexico, where the worst oil spill in US
seventh largest history occurred in April 2010. “No one
crude supplier is immune from that sort of accident ...
increasingly which means that we are taking the time
needs to to prepare things in the best way.”
combat steep Concerns over environmental issues
declines from are on the rise around the world, with a
its existing number of company officials reporting
fields, but increased interest as a result of the
“wisdom has Macondo disaster.
prevailed, Mba said some companies had shown
since new interest in the new blocks, reiterating past
factors and statements from the government that the
objectives auction had been delayed to October 27
have arisen,” because of heightened international
Gabonese interest.
Mines,



COMMENTARY
CGG Veritas, which has worked on fresh exploration ventures, as well as the Sud.
marketing the round, said in late 2009 oil companies that buy into the blocks.
that some industry majors and larger This, now, is in question. Existing plays
independents had already shown an Gabon’s attraction as a hydrocarbons
initial interest in the acreage. Recent Ultra-deep prospects market remain strong, though, as shown
reports cited China’s Sinopec – already Oil remains Gabon’s main source of by recent comments from LUKoil,
an existing player in Gabon – as lining wealth, accounting for about 60% of the Russia’s second largest oil company,
up major potential bids at the auction. country’s budget, but output has been which is considering joining an upstream
Mba underlined that one of the key declining for more than a decade after oil and gas project in Gabon as part of its
external concerns – new regulations for hitting a peak of 371,000 barrels per day strategy of expanding in West Africa. No
the Gabonese industry – was being in 1997, falling to around 220,000- further details were provided by
drawn up, and would lay down a number 250,000 bpd. The new licensing round, LUKoil’s president, Vagit Alekperov,
of rules that firms currently operating in which was due to open on October 27 who told reporters on October 13 that
Gabon and those hoping to do so would with a grand event in Libreville, was “we’re looking at Gabon.”
have to obey. A French law firm, Gide therefore seen as key to Gabon’s Far more specific is French Total,
Loyrette Nouel, came up with a draft hydrocarbons future, marking the first which is eyeing a multi-billion
hydrocarbons law in 2009, but work on time that Gabon had offered blocks in the investment into its Gabonese oil acreage.
this would appear to be ongoing. offshore ultra-deepwater. “We are planning to invest some very
It may be significant in this respect Here, untapped subsalt deposits have large sums, nearly US$2 billion in our
that, according to Reuters, a Gabonese been touted as offering complex but installations and at the same time get
energy official said recently that in potentially highly lucrative opportunities access to new resources,” Total’s head of
addition to royalties and production for players prepared to gamble that exploration and production, Yves-Louis
costs, Gabon would seek a 50% share of drilling successes across the Atlantic in Darricarrere, told Gabon’s national
production for fields producing up to Brazil’s offshore can be replicated. television on October 13.
75,000 bpd, and a greater percentage for The untapped potential of Gabon’s Darricarrere reportedly hinted that
fields where output was even higher. subsalt section was recently highlighted Total Gabon’s Anguille oilfield would
Whatever Gabon’s rationale for the by Spain’s Repsol, which said it wanted not be the only investment in the years
move, the news has, yet again, placed on to “export” the Brazilian model to Gabon ahead by the French super-major, which
hold what some market observers have and other West African countries. also controls the 6,000-square km Diaba
envisaged will be a potential 10-year Several small subsalt discoveries have block. His comments came after a
period of offshore exploration in Gabon. already been made offshore the Republic meeting with Gabonese President Ali
It had seemed entirely plausible that a of Congo (Brazzaville), giving rise to Ben Bongo, who took office in August
range of drilling activity could begin predictions that this trend could run all 2009, replacing his father.
across the newly licensed blocks by mid- the way up to Tullow Oil’s discoveries Bongo has held up a range of targets
2011, bringing opportunities for the offshore Ghana. for economic revitalisation, including the
drilling contractors and subsea Data for bidders pursuing this play replacement of gas flaring with re-
equipment manufacturers that feed on offshore Gabon have been handled by injection techniques. Like many African
CGG Veritas, leaders, though, he has failed to match
which has been the ambitious talk with project
retained to advise implementation. Analysts said the 10th
the Direction licensing round would be seen as a key
Generale des gauge of the progress made by the new
Hydrocarbures president, given the government’s long-
(DGH) on the term need to turn around years of slow
promotion of the production decline from maturing
licensing round. It shallow-water fields and thereby sustain
has acquired its future economic development.
almost 13,000 km For the time being, it will be down to
of seismic data existing explorers such as Maurel et
and reprocessed Prom, Royal Dutch/Shell, Perenco and
5,000 km across Vaalco Energy to prop up production
the two levels, but these will only ever swing
deepwater regions back past the previous peak if the focus
involved, Zone of activities can move out into Gabon’s
Nord and Zone deepwater offshore acreage.



COMMENTARY

Centric chases rift frontier potential
The company has significant acreage in two frontier countries, Mali and Kenya, and is on
the look out for additions
By Ed Reed
Centric has 88,000 square km of acreage in Mali and Kenya, working with Heritage and Tullow
The Kenyan block is under-explored, with plans to investigate the on- and offshore
Seismic is to get under way in Mali this year and an exploration well could be drilled in 2011

Success in Uganda has helped drive claim. A hearing is to be held on October Under its licence, Centric has
enthusiasm for Kenyan work, a sentiment 27 on the matter. committed to carrying out an airborne
corroborated by Tullow Oil’s decision to Exploration has been moving in fits gravity survey and acquiring 200 km of
strike a deal with Centric Energy on its and starts in Kenya for many years, 2-D seismic on the block in the first
Block 10BA. although there have been relatively few three-year phase. The company has
Tullow is to take a 50% stake in wells. received satellite images of Lake
Centric’s production-sharing contract Turkana to look for slicks that might
(PSC), assuming it gains approval from Kenyan programme have come from oil seeps.
the Kenyan government. “We have had Robinson said the sheer size of the area – “The next step is to get out on the lake
indications that the Kenyan government Block 10BA covers 16,205 square km – to sample these and we will need to do
is pleased, so we do not anticipate any meant there was substantial untapped seismic onshore and in the lake. We have
difficulties in that regard,” Centric’s exploration potential. On this large also initiated reprocessing of the old
CEO and president, Alec Robinson, told expanse only one well has been drilled seismic data and reinterpretation of the
AfrOil. Tullow, he said, “will be a strong and around 1,500 km of seismic old gravity and magnetic data,” Robinson
partner for Kenya.” acquired. said.
One potential concern, though, is a “The latest seismic [on the block] was Should Centric – and Tullow’s – hopes
Kenyan court case, under which shot in 1992,” Centric’s CEO said. “We for oil be successful in Kenya, the
Interstate Petroleum has sought a judicial feel that the opportunities that are companies would face some challenges
review of the block’s award, although demonstrated by the seismic are in terms of exporting the crude, as there
Centric has said there is no basis for the significant.” is no nearby infrastructure at present.
Robinson,
though, was
confident a
solution could be
found, saying
success at Block
10BA could
piggyback on
other export
schemes, either
from Sudan or
Uganda.
South Sudan is
set to hold a
referendum in
January 2011 on
potential
secession.



COMMENTARY
Should independence be approved, as “They are both part of the interior rift were in the blocks. “The survey is
seems likely, the new country would face system, although of slightly different sufficiently high-resolution that we can
an interesting dilemma over how to ages. The rift basin in Mali is use it to decide where to shoot more
export its oil. South Sudan holds the Cretaceous-age and the rift basin in seismic. As I mentioned, seismic is
majority of the country’s production but, Kenya is Tertiary, so it is younger. The planned to start later this year.
for now, output flows to the north, to rift basin in Kenya is north to south, and Depending on the results, drilling should
Port Sudan. crossing it at an angle is the Cretaceous start [in 2011].”
Should Sudan break up, this export rift, known as the Anza Graben, that Although Mali has mostly flown under
route may come under pressure and continues into southern Sudan,” he said. the radar, a number of high-profile
schemes have emerged for a link to be Robinson went on to note the potential companies have signed up to work in the
constructed to transport crude through presence of “lake sediment, which forms Sahelian state. Algeria’s state-owned
Kenya. Such a plan, which has been Sonatrach, for instance, has Block 20 and
backed by Toyota Tsusho, would involve a stake in Block 4, alongside Italy’s Eni.
building a pipeline probably passing
“The Agadem block, in “The Agadem block, in Niger, is of a
through Centric’s block. Niger, is of a similar age similar age and may indicate the
Alternately, the plan could tie into a potential of our licences in Mali,”
Ugandan scheme. “The export pipeline
and may indicate the Robinson said. “One study by another
for Uganda’s oil, if it [passes] through potential of our licences in company suggests it has 350 million
Kenya, will come very close to our barrels of oil in place. It is reported that a
operation,” Robinson said. “The ideal
Mali,” Robinson said Chinese company paid a signature bonus
solution would be a pipeline network, of US$300 million about two years ago
source rocks and generates oil, as seen in
bringing together Sudanese, Ugandan to acquire the licence.”
Uganda.” Finally, the licence terms in
and Kenyan oil.”
both states are good and the tax regimes
The pipeline would have to be heated Looking to the future
are “acceptable. We’re a small company,
to more than 40 degrees Celsius, Centric’s strategy is to focus on
so we have to go to regions where,
Robinson explained, in order to “keep the opportunities in areas “where there is
currently, there is less competition.”
oil flowing, because of [its] wax evidence of hydrocarbons, in countries
Another link, tying Mali to Uganda, is
content.” that have favourable commercial terms
the presence of Heritage Oil, which
Despite the block’s proximity to and that accept direct applications for
acquired a 75% stake in the blocks in
Sudan, the Centric official was exploration acreage.”
2008, committing to carry Centric
unconcerned about security issues. There Robinson said the company was on the
through the acquisition of seismic and
is a disputed area nearby, he said, but lookout for additional deals and that its
the drilling of a first exploration well.
there does not appear to be any fighting focus was on sub-Saharan Africa. “We
Centric’s two areas, Blocks 7 and 11,
there. “It’s important to have strong don’t just look at geology: we look at
are in southeast Mali, in the Cretaceous-
community programmes in the areas of deal flow, competition, business
age Goa rift basin. Between the two
operations. It is good common sense. environment and fiscal regime when
blocks, Robinson said, is a water well in
Local people should see the benefit our considering where to go next.”
which oil and gas have been detected.
presence – it’s partly altruistic, partly Centric has previously been linked to
“BP sampled it in the 1970’s and
wise business.” Eritrean opportunities, which have also
confirmed that the oil [there] is a seep of
been under-explored, appearing to match
natural crude oil and not pollution. This
Mali the company’s plans to seek up and
gives us some indication of hydrocarbons
As a result of the Tullow deal and other coming plays. With the completion of the
in the basin,” he said.
corporate activity much has been made Kenya deal and the start-up of seismic in
Heritage is planning to acquire seismic
of East African assets in recent times, but Mali looming, Centric seems to have
on the blocks in the fourth quarter of this
Centric also has two blocks in Mali, proved its ability to sign up frontier
year. An aeromagnetic survey, covering
covering 72,850 square km. acreage. Now the company needs to
42,000 line km, has already been shot on
Robinson told AfrOil that there were a establish its ability to move into the
the blocks, “which is about the
number of links between Mali and exploration phase and firm up its
circumference of the world.”
Kenya, including the geology, lake hopes.
Robinson said this had given clear
sediments and licence terms.
indications of where the basins of interest



INVESTMENT

African refining plans fall short
Africa’s refining plans have failed, for company has been instrumental in more support for refining plans and must
the most part, to make any progress building plants in Sudan, Algeria, Chad honour long-term commitments.
beyond the drawing board, CITAC and Niger, while Citadel Capital is Subsidies can act to distort the market, it
Africa pointed out at a recent forum. involved in a facility being planned in continued, and governments must pay
The group’s executive director, Gary Egypt. these on time, should they be maintained.
Still, speaking at a downstream event in The CITAC official said the Chinese The World Bank and International
Lagos on October 14, said that while involvement in these downstream areas Monetary Fund (IMF) should support the
there had been 60 announcements of “may lead to the acquisition of prime construction of refineries over product
plans for new refineries in Africa, only exploration concessions, which may imports, which would draw in
one had actually been built. become future Chinese-controlled crude commercial backing. Finally, CITAC
CITAC said that 90% of the proposals reserves for years to come.” Local said, refineries should focus on meeting
for refineries fail to make any progress. governments benefit from these domestic demand in land-locked
Some make it as far as a feasibility study investments, with the introduction of new countries, rather than marginal exports.
but are then dropped once backers try to product capacity as well as securing Still said as long as these factors were
raise financing. Slow progress in African upstream commitments. uncertain, African refining plans would
refining has been further compounded by Still also said the African refining continue to struggle and “perhaps only
weak international margins, with some sector was “desperately searching for CNPC will be prepared to take the
experts saying the world needs to cut as financing to improve product quality.” commercial risk of the necessary
much as 7 million barrels per day of There would be significant health and investment by supplying soft loans.”
capacity. economic benefits for countries Even CNPC, though, would look to
The prime driver of downstream switching to clean fuels, CITAC said, but balance its downstream investment risk
projects in Africa, CITAC continued, has in sub-Saharan states alone this would through securing upstream
been China National Petroleum Corp. require US$10-15 billion of investment concessions.
(CNPC), which has been involved in five by 2020.
out of seven schemes. The Chinese CITAC said governments should show

Zuma backs economic
case for Project Mthombo
South African President Jacob Zuma has billion rand (US$1.8 billion) per year in The Project Mthombo refinery is
given his support to PetroSA's planned energy costs once it was running, and expected to ease some of this pressure,
refinery in the Coega industrial “could export oil [products] across with Zuma singling out state-owned
development zone, near Port Elizabeth. Africa.” PetroSA’s recent track record as a reason
The president said the project would While the refinery would “showcase for optimism.
reduce South Africa’s dependency on South Africa’s competitive ability” it “We welcome the fact that PetroSA is
energy imports and improve the country's would also help the country escape from making its impact, not only in job
image overseas. its current dependency trap, where creation but in empowering the people as
Construction of the US$11 billion demand for refined automotive products well. It employs close to 2,000 people,
facility, which will have 400,000 barrels relies on imports, he added. while 27,500 more will be absorbed
per day of capacity, is expected to start in Despite South Africa's status as one of within the crude oil refinery that is
2012, with the refinery to come onstream the most developed economies in sub- [being] planned,” Zuma said.
by 2015. Once completed it will be the Saharan Africa, it has frequently “To be able to reach the markets in
largest oil refinery on the continent. struggled to maintain a consistent and Europe, the US, the Caribbean, the
Speaking at a visit to PetroSA’s gas-to- secure energy supply, with both domestic Middle East and the Far East is an
liquids (GTL) refinery in Mossel Bay on use and its large-scale and resource- important achievement,” the president
October 14, Zuma said the project would intensive mining sector regularly said.
help South Africa save an estimated 12.6 disrupted.



INVESTMENT

Sirius Petroleum shines
light on Nigeria’s Ke field
UK-listed minnow Sirius Petroleum said was originally discovered in 1965 by barrels of crude.
it had raised GBP15.7 million (US$24.9 Chevron, which retains a small royalty Trading in the company’s shares has
million) to help develop Nigeria’s Ke interest in any production income from been halted on London’s Alternative
field, a small oil discovery in the the Ke farm-out area. Investment Market (AIM) while the
southern part of the Niger Delta. The area, which covers 52 square km, transaction is in play.
The company said last week that it was originally part of Oil Mining The move into Nigeria’s oil sector
would place about 313.9 million shares at Licence (OML) 55 and was awarded to marks a major strategic shift for Sirius
GBP0.05 (US$0.08) per share to raise the Del Sigma in 2003, as part of the Petroleum, which has had no substantive
money. Sirius agreed earlier this year to Department of Petroleum Resources trading business since 2007, following a
acquire a 40% interest in the field, held (DPR) marginal field round. decision to cease its gaming industry
by Nigerian independent Del Sigma Del Sigma presently holds a 100% aggregation software business.
Petroleum, in a reverse takeover deal. participating interest in the field. Starting with the Ke field, it now plans
The deal is still awaiting Nigerian According to Sirius Petroleum, to focus on marginal oilfields,
government approval, which is potential recoverable reserves at the Ke particularly in Nigeria. The Sirius board
anticipated later this month. The Ke field field are expected to exceed 25 million said the project “has unrealised value.”

PERFORMANCE

Spain, Algeria fight on gas pricing
The gas price dispute between Spain’s the Paris arbitration court over 2007-09 to 50% from 60%. The 60% level was set
Gas Natural Fenosa and Algeria’s gas prices, and must now pay Sonatrach in 2004 by another royal decree.
Sonatrach is now a full blown political up to US$2 billion in unpaid costs, which Gas Natural is Spain’s biggest gas
conflict between the two countries, is more than Gas Natural’s annual net group, with more than 60% of all
Spanish Industry Minister Miguel profit. Spanish gas customers. The economic
Sebastian told Parliament on October 13. The legal change to limit a foreign nature of the dispute has become political
Sebastian revealed he would be company’s gas market share to 30% for several reasons. One is that Gas
travelling to Algeria in the week would restrict Sonatrach’s power in Natural’s debt to Sonatrach could end up
commencing October 18 to discuss the Spain. The power the Algerian company being paid partly by Gas Natural’s
matter with Algerian Energy Minister wields is set to increase radically when customers. Gas Natural has asked the
Youcef Yousfi. the Algeria-Spain underwater Medgaz government to allow some of the huge
As the Spanish government angles for gas pipeline comes into operation later debt to be paid through Spaniards’ gas
a solution through dialogue, Gas Natural this year. bills.
is studying legal measures to limit Almost worse for Gas Natural is that Another reason is the much greater
Sonatrach’s power in Spain as the Sonatrach has a licence to trade its gas in power Sonatrach could wield once
country’s main gas supplier. One is to Spain, which means it can sell directly to Medgaz began operating, which would
reduce by law the 50% maximum gas end users without going through include the power to condition prices.
supply market share a foreign company intermediaries, such as Gas Natural, Sonatrach holds the largest stake in
can have in Spain to 30%. Sonatrach’s Iberdrola or Endesa. Sonatrach already Medgaz, with a 36% stake. Gas Natural
current share is 32%. has a 1.04% trading market share, and has no stake in Medgaz, although
Another is to take Sonatrach’s Algeria’s ambassador in Spain has Iberdrola and CEPSA have 20% each,
intention of raising gas supply prices for indicated the company may triple this. while Endesa and Gaz de France each
2010-12 by a further 30% to another A Spanish royal decree issued in 2007 own 12%. Sonatrach’s gas currently
international arbitration court. In August, had already lowered the gas supply reaches Spain via the Maghreb pipeline,
Gas Natural lost a case with Sonatrach in market limit for a non-Spanish company which passes through Morocco.



PERFORMANCE

Confidence in Libya
continues to deteriorate
Confidence in Libya’s oil and gas November. were lifted in 2005.
marketplace took another hit this month The announcements reiterate the Many have looked to the experience of
as a series of international firms feeling of general unease surrounding Canada’s Verenex Energy and have
announced they would exit the country Libya, with the lacklustre finds of many begun to wonder if the risk of investing
because of low returns and an unstable international companies made worse by in the country is worth the hassle.
political climate. erratic comments and behaviour on the The Calgary-based company agreed to
Following BG Group, which part of the government. Libya had a sale to China National Petroleum Corp.
announced its exit in late August after appeared to be moving towards (CNPC) but, following opposition from
three consecutive dry wells, Chevron, modernisation but shifting power local interests, was forced to accept an
Occidental Petroleum, Woodside balances within the Tripoli regime have offer of 30% less from the Libyan
Petroleum and Abu Dhabi-based Liwa swung back towards more conservative Investment Authority (LIA),
Energy have said they will not renew figures. Poor results and comments However, while many companies are
their licences. suggesting a nationalisation of Libya’s cutting Libyan projects, others have
The planned exits follow a summer of resources have created an uneasy elected to remain, such as Hess,
delays as BP has struggled to move atmosphere for foreign investors. Petrobras, Indonesia’s Medco Energi, Oil
forward on a US$900 million offshore In addition to threatening needed India Ltd (OIL) and Algeria’s Sonatrach.
drilling project. The company has been exploration and infrastructure In addition, Italy’s Eni has reiterated its
criticised by European Union officials for investment, this loss of confidence pledge to invest US$25 billion in Libya
planning to drill in the Mediterranean jeopardises the country’s growth rates, over the next decade.
Sea. The UK-based super-major appears which have been driven by the promise
to be set to begin drilling in Libya in of its oil and gas industry since sanctions

Petroceltic updates North African
appraisal programme
Drilling is to start at Petroceltic appraisal drilling programme lasting six Bir Ben Tartar reservoir unit, a detailed
International’s Ain Tsila discovery in months at the gas condensate field, where evaluation of the data indicated oil
Algeria’s Isarene permit in November, three test wells have revealed “an saturation and reservoir characteristics
but its Tunisian exploration well is to be extensive and probably continuous gas were insufficient to justify fracture
plugged and abandoned. accumulation” that, following fracture stimulation and well bore testing.
Petroceltic confirmed these contrasting stimulation, is capable of flowing at rates Petroceltic’s CEO, Brian O'Cathain,
fortunes from its North African wells in exceeding 850,000 cubic metres per day. commented that, while the ST-4
an operations update issued on October This latest appraisal programme aims exploration results were disappointing,
12. to confirm recoverable hydrocarbon “the extensive modern logging data
The Irish-headquartered independent reserves and to optimise development collected” would be reviewed “before
said it was making good progress at its plans for the discoveries and gas sales making a decision on whether to
Ain Tsila (AT-4) well in Algeria, where contracts. continue with any further exploration” on
it holds a 75% stake as operator in a joint that block.
venture with state-owned Sonatrach. Tunisia ST-4 is part of a work programme
Civil engineering works are now Meanwhile, the Sidi Toui-4 (ST-4) well, agreed when Petroasian Energy Holdings
complete and the site is ready to receive at the Ksar Hadada permit in Tunisia, is farmed into the permit, in which
the Dalma No 12 rig. Drilling is expected to be plugged and abandoned without Petroceltic is the operator with a 27.03%
to begin during the first week of testing. The CTF Rig 06 will be interest. Petroasian’s holding is 51% and
November and take around 40 days. demobilised. there are three other partners.
This will be the first in a multi-well Despite encountering oil shows in the



POLICY

Tullow continues Kinshasa dispute
Tullow Oil said last week it would companies owned by Khulubuse Zuma, of Hydrocarbons Celestin Mbuyu told
continue to pursue a court case in order the nephew of South African President members of parliament that Tullow did
to uphold its claims to two blocks on the Jacob Zuma. In June of this year, a not have the right to seek arbitration in
western side of Lake Albert, in the presidential decree endorsing the award the Paris court. He asserted that the
Democratic Republic of Congo of Blocks 1 and 2 to Caprikat and presidential decree signed in June
(Kinshasa). Foxwhelp was signed. invalidated the sections of the Irish
Tullow’s vice president, Tim According to the Congolese company’s agreement that provided for
O’Hanlon, told Bloomberg that his government, the signing of the arbitration of future disputes.
company had no choice but to seek a presidential decree means that the only He also said Kinshasa had sent letters
judicial remedy for its claims to Blocks 1 valid contract for the blocks is the one to both Tullow and DIG giving notice of
and 2, located in the northeast part of signed with Caprikat and Foxwhelp. cancellation and offering instructions on
Congo (Kinshasa). “Since Tullow is not However, Tullow has challenged securing compensation from the
in the habit of buying back goods which Kinshasa’s actions, saying that the Congolese Ministry of Finance.
have been stolen from us, I defy anybody original deal should stand. It has filed O’Hanlon told Bloomberg that his
to show what alternative we had to these cases against Congo (Kinshasa) in the company was not aware of any such
legal actions,” he said in an email International Court of Arbitration in Paris letter. However, DIG’s director, Andrea
message. and in a British Virgin Islands court. Brown, told the news agency that her
Kinshasa had awarded the blocks to The latter court recently made a ruling company had received Kinshasa’s letter
Tullow in 2006. Before the project had in Tullow’s favour. On September 21, it and was in negotiations on
reached the step of being approved by issued an injunction barring Caprikat and compensation.
presidential decree, though, the Foxwhelp from exercising or transferring Tullow also holds rights to several
Congolese government announced that it rights to the blocks and from working at blocks on the Ugandan side of Lake
had been cancelled. In 2008, it awarded either site. It also said a new hearing on Albert. These blocks contain about 1
the two blocks to Divine Inspiration the case would be held on October 18. billion barrels of crude oil and are set to
Group (DIG) of South Africa. As of press time, it was not clear begin production in 2014-15. They may
This deal also fell through and whether the Congolese government had come to yield 200,000 barrels per day.
Kinshasa later turned the blocks over to commented on the injunction.
two British Virgin Islands-registered In early October, Congolese Minister

Gabon postpones round again
Gabon has opted to push back the start of Hydrocarbons Ministry official, Guy produce 220,000-240,000 barrels per
its offer of blocks indefinitely, attributing Martial Mbeang Mba, told AFP on day, are in decline and the country is
the delay to security concerns and October 13 that the government wanted seeking to diversify its economic reliance
environmental guarantees in the wake of to “be assured of certain guarantees, on oil, which is said to account for
BP’s Gulf of Mexico disaster. notably with regard to security, the around 60% of its budget.
The sale of 42 Gabonese offshore environment and the opportunities for Earlier this year, an energy official said
blocks, which was originally set for May operators.” Gabon would be asking for a 50% share
5 and then delayed until October 27 Without announcing a new auction of production from fields generating up
because of greater than expected date, Mba confirmed Gabon was drawing to 75,000 bpd, with a greater amount due
international interest, is now in jeopardy. up a code of conduct for companies from those with a higher output, in
A government official linked the latest working in its energy industry, taking addition to receiving royalty payments
deferral to a need to “adopt a new “international factors” into account. “No and production costs.
approach rather than just launch into this one is immune from that sort of The country has also suffered from
operation” following the loss of life and accident,” he said, adding the oil-rich numerous strikes and, early this month,
environmental damage caused by an state was “taking the time to prepare Gabon said it was to move towards
explosion on and the subsequent sinking things in the best way.” strengthening the role of local content, in
of BP’s Deepwater Horizon rig in April. Gabon is Africa's seventh largest crude a move that might prove difficult for
A Gabonese Mining, Oil and supplier but its existing fields, which foreign investors.



POLICY

Obasanjo aide charged
over NLNG case
The long-running case centred on bribes Technip, Snamprogetti and JGC. TSKJ is to the government.
paid to secure construction contracts at said to have paid around US$180 million The Nigerian government has also
Nigeria LNG (NLNG) took a fresh twist in order to secure work on the NLNG been reported as preparing to sue
last week as an official close to Nigeria’s project. The US government has also Halliburton, which was the parent
former president, Olusegun Obasanjo, chosen to pursue these companies, with company of KBR at the time of the
was charged with money laundering. KBR, Technip and Snamprogetti having scandal, for US$2 billion in US courts.
A senior aide in the Obasanjo paid out or set aside cash to cover fines.
administration, Adeyanju Bodunde, was Charges filed in September had named Panalpina
charged with six counts of money a number of participants in the scandal, In related news, the Wall Street Journal
laundering on October 14. He pleaded but suits against many foreigners were reported Panalpina, a Swiss logistics
not guilty to all the charges and was dropped last week. Among those company, and Royal Dutch/Shell were
subsequently freed on bail. previously named and then dropped are nearing a settlement with the US
Bodunde was accused of accepting Jeffrey Tesler, George Mark and the government over foreign bribery.
around US$5 million in cash from local affiliate of construction giant Panalpina’s actions are being
various businessmen. The aide denied Bilfinger Berger. investigated in a number of foreign
wrongdoing, saying in local reports that Tesler, who resides in the UK, is states, including Nigeria. The logistics
he was merely acting to raise fighting attempts by the US government company is to pay US$85 million, while
contributions for Nigeria’s ruling to extradite him, to face charges of Shell will have to stump up US$30
People’s Democratic Party (PDP). contravening the Foreign Corrupt million for using Panalpina’s services in
The charges stem from actions taken Practices Act (FCPA). Julius Berger is Nigeria.
by TSKJ Nigeria, a consortium of said to have reached an out of court
international service companies – KBR, settlement, paying around US$30 million

Abyei talks collapse, jeopardising
Sudanese production
Prospects for the Heglig and Unity US-mediated talks in Addis Ababa be aggravated by the looming dispute
oilfields, in Sudan’s Muglad Basin, have collapsed, shattering any hopes by the between NCP and SPLM, both of whom
been thrown into question following the Greater Nile Petroleum Operating have agreed to a fresh round of
collapse of the latest negotiations over Company (GNPOC), the major operator negotiations later in the month. The two
the over the future of the oil-producing of the two oilfields, of boosting the sides are also accusing each other of
Abyei region. falling production figures and of amassing troops along the demarcation
The Khartoum-based National enhancing the capacity of the Greater boundary.
Congress Party (NCP) and the Nile Oil Pipeline. The link runs from the GNPOC oil production in Blocks 1, 2,
Government of Southern Sudan’s Sudan fields to Port Sudan, on the Red Sea. 4, which include areas in Unity State,
People's Liberation Movement (SPLM) “Despite serious efforts and many Southern Kordofan and Abyei, generated
have been locked in unsuccessful productive discussions, [the delegates] around 175,000 barrels per day in 2009,
negotiations over the control of Abyei. did not succeed in reaching an agreement down from an estimated 252,000 bpd in
The area is to hold a separate referendum on the eligibility criteria for voters in the 2006.
from the south, under which the two Abyei area referendum,” the NCP and Under the Comprehensive Peace
dominant tribes in the area – the the SPLM said in a joint statement, Agreeement (CPA) of 2005, the oil
Messiriya and Ngok Dinka – will decide quoted in the International Business produced in the country, over 80% of
whether to throw in with Juba or Times. which comes from the south, was to be
Khartoum. Statistics show falling production from shared equally between Khartoum and
Despite frantic efforts last week, the the two fields, a situation that is likely to the Government of South Sudan.



PROJECTS & COMPANIES

Shell to launch Marsa
el-Brega tender
A new tender is close to being issued to has been operating for around 40 years – a new plant or upgrade.
overhaul the Marsa el-Brega liquefaction it was only the second in the world to Libyan expectations about price are
facility in Libya, according to a report in begin producing. It originally had a also likely to cause trouble, with a
Upstream. capacity of 3.2 million tonnes per year previous tender being scrapped because
A note from IHS Global Insight on but this has fallen to around 700,000 contractor quotes were around double
October 14 picked up on the report but tonnes per year. NOC’s forecasts.
warned that contractors remained The plant lacks the capacity to strip Leading contenders in the new tender,
“sceptical and risk-averse” about liquid petroleum gas (LPG) from its Global Insight said, would be similar to
operations in Libya. Global Insight feedstock, which restricts its exports to those from the previous effort, with
reported Shell and Sirte Oil Co. (SOC) one destination – a Spanish regasification Italy’s Bonatti and the UK’s Petrofac.
were close to re-launching the tender, facility run by Enagas. This problem Upstream suggested Greece's
noting hopes from contractors that the would be tackled in the first phase of Consolidated Contractors Co. (CCC)
project had been carved up into more work, Global Insight said. would also be interested in the deal.
manageable packages. Shell’s deal with Libya also involves NOC’s failures with the Marsa el-
Shell struck a bilateral deal to work on the company securing sufficient reserves Brega deal demonstrate wider problems
the Marsa el-Brega plant in 2005 but to drive the construction of a new LNG with the Libyan regime and its attitude
progress has been slow – hampered by facility, as well as new reserves for the towards investments and various
Libyan bureaucracy and a lack of clarity existing plant. The note said Shell and fluctuations in the administration.
about reserves. Problems at the plant SOC had not disclosed their exploration “Inflexibility and decision-making
expose “the organisational problems results but quoted the two firms as saying paralysis have become permanent,”
within the structures of the National Oil these had been “encouraging.” Global Insight said, noting the
Corporation (NOC) and its subsidiaries,” Upstream quoted industry sources as “micromanaging of the sector from the
Global Insight’s analyst, Samuel Ciszuk, saying there was uncertainty about what highest levels [at NOC], in what always
said. Libya wanted from Marsa el-Brega – has been a very top-heavy
The liquefied natural gas (LNG) plant whether it was to “patch things up,” build organisation.”

Sonangol and PetroSA
plot refinery joint venture
Angola’s state-run Sonangol and South Although no other details were given, PetroSA.
Africa’s PetroSA are looking at ways to both countries are keenly interested in “Angola briefed South Africa about its
work together in the refining sector and developing new refining capacity. new oil exploration strategy, which will
upstream. Angola’s oil ministry said in a Angola has been planning a large be approved at the end of 2010,
statement, seen by Bloomberg, that the refinery in Lobito, with a capacity of providing an opportunity for PetroSA to
two state energy companies were around 200,000 barrels per day, for take part in licence bidding,” a ministry
contemplating setting up a joint venture years. The country’s only other refinery statement said. It said PetroSA wanted to
to build and manage oil refineries. is a much smaller facility, with a import oil and liquefied natural gas
“The parties are considering the maximum capacity of 41,000 bpd. (LNG) from Angola.
possibility of creating a joint venture PetroSA has a refinery of similar size The two sides may sign a
between Sonangol and PetroSA to at its Mossel Bay plant, although South memorandum of understanding (MoU)
construct and manage refineries and Africa too has been crafting plans for a on energy issues when Angolan President
finished petroleum products,” the much larger capacity plant, up to 400,000 Jose Eduardo dos Santos visits South
ministry’s statement said. bpd, for some years. Africa, the ministry statement added,
It follows recent talks between the two Angola’s oil ministry also said there although it did not specify when the trip
sides in the Angolan capital, Luanda. were upstream opportunities too for would take place.


AfrOil 19th Oct 2010 - Centric’s African rift frontier potential

AfrOil 19th Oct 2010 - Centric’s African rift frontier potential

Recommandé

Recommandé

Contenu connexe

Similaire à AfrOil 19th Oct 2010 - Centric’s African rift frontier potential

Similaire à AfrOil 19th Oct 2010 - Centric’s African rift frontier potential (13)

Dernier

Dernier (20)

AfrOil 19th Oct 2010 - Centric’s African rift frontier potential