The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $45.66 per barrel, WTI at $44.42 per barrel and natural gas at $2.64 per million BTU (end of day, November 10, 2016). Here are AOP’s top five stories from the last seven days.
Ophir and OneLNG establish JOC to develop Fortuna
Ophir Holdings & Ventures has signed a shareholders’ agreement with OneLNG to establish a joint operating company to develop the Fortuna project in Equatorial Guinea, according to a press release. The agreement and final investment decision are still subject to approval by the shareholders of Ophir and the government of Equatorial Guinea.
The move comes after Schlumberger backed out of the project in June. The FID is expected in 2017 on the $2 billion floating LNG project, with first gas expected in 2020. According to the agreement, Ophir will have a 33.8 percent stake in the JOC and OneLNG would have a 66.2 percent ownership. Ophir Holdings & Ventures is a subsidiary of Ophir Energy, and OneLNG is a joint venture between subsidiaries of Golar LNG, which is developing the floating LNG unit, and Schlumberger.
Somalia to launch bidding round
Somalia expects to launch its first oil block bidding round in the second quarter of 2017, officials announced at the Africa Oil week conference in Cape Town. 2D seismic data indicates that oil is the most promising prospect, not gas. The seismic survey, conducted by Spectrum, covered 20,566 kilometers. Data sets and other resources should be available for interested investors in March 2017, in order to prepare for the bidding on the blocks, according to Oil Review Africa.
The government has invested heavily in the Somalia’s legal and regulatory framework in an attempt to attract investors to the round — including amending the petroleum code, developing a new PSA model and creating a downstream law with the assistance of the African Development Bank and the World Bank.
Third FPSO set to arrive in Ghana
A floating, production, storage and offloading vessel headed to the Sankofa Gye Nyame field in Ghana is expected to arrive in March 2017, after work on the vessel is complete and subsea infrastructure is installed. The installation of a third FPSO in Ghana is expected to increase the country’s electricity supply by 50 percent, according to BFTonline.com. When the $6 billion Sankofa Gye Nyame Oil and Gas project comes online, it should deliver some 170 million scf of gas per day for the next 30 years.
ENI is the lead operator for the project, holding a 47.2 percent interest, and Vitol holds 37.8 percent. GNPC holds a 15 percent carried interest and 5 percent additional interest.
Tullow Oil posts positive results
Tullow Oil posted $30 million in profits for the first half of 2016, compared to a loss of $68 million during 2015. The company is on track to pay down and refinance debts in 2017, said CEO Aidan Heavy in a statement. The company is cutting its capital spending plan by 10 percent, down to $900 million, and said its output in West Africa has decreased by 3 percent to 62,000 boepd.
Though cuts throughout the industry are expected to continue in the short-term, several companies are emerging as leaner but more efficient in 2016/2017.
Sasol on the hunt for hydrocarbons deals
South Africa-based Sasol is looking for deals in a low oil and gas price environment, said John Sichinga, the senior vice-president of Sasol Exploration and Production International, according to IOL. Sichinga stated that cheaper oil and gas prices present an opportunity, and that the Sasol is looking for proven hydrocarbons basins, and access to infrastructure, markets and a skilled workforce as part of its investment strategy. Sasol is undertaking an exploration campaign in Mozambique, with two wells drilled in October and 13 wells expected to be drilled in total. Gas from the first phase of the PSA is allocated to a 400 MW power plant near Inhassoro.