Vol. 10 Issue 18 6 September 2007 AFRICA OILANDGAS BREAKING NEWS AND ANALYSIS FROM AFRICA Chevron launches Angolan Sanha project Chevron has launched the tender for a new project offshore Technip worked on the pre-FEED in Houston. Angola. The water depth is around 225ft (69m). It is from Sanha that The US major is forging ahead with its multi-billion dollar gas will be piped to two new platforms at the Congo Canyon investment in shallow water Block 0 and has started prequali- and then on to Soyo to the Angola LNG plant. fication for the Sanha Auxiliary Platform project. Bidding on other contracts is expected to start shortly – The firm is looking for a contractor to provide engineering, including for the South N’Dola field. Upstream conducted the procurement, construction, load out, transportation and instal- pre-FEED on this. lation of the topsides, jacket and piles. The platform will is likely to be a 16-slot wellhead linked by The jacket is expected to weigh around 2,800 tons, while the pipeline to North N’Dola 7km distant. The new field is main deck will be 2,300 tons and the auxiliary deck around expected to produce 30,000 b/d and 65 MMcf/d of gas. Oil and 1,500 tons. water will be sent to North N’Dola, while gas will be sent to Full bid documents will be issued in the second quarter of Sanha around 9km to the northeast. next year, with the contract to be awarded by the end of 2008. SBM ‘will get something’ from BP Angola… SBM is saying it sees the contracts for up to four FPSOs for that SBM is looking to develop a yard in a “very remote” place BP in Angola as the “most important objective” in the world in Angola. this year. The exact size of the yard will be tailored to suit any contract The Monaco-based firm has long been seen as favourite with victory. At best it will be able to perform major integration of Sonangol for the vessels for Blocks 18 and 31,but the original FPSO topsides as well as fabrication. award date of May has now slipped. Modec and Saipem are The first of the developments is Block 31 Northeast with still competing and SBM boss Didier Keller said: “We hope the remaining three projects to be spread out evenly at 12-18 they [BP] will make a decision before Christmas. We believe month intervals. we should get something out of Block 18/31, whether it will be This project will be followed by Block 18 West, then Block one or more we cannot tell, it is still our preferred target. 31 South and finally Block 31 Mid. “I will not comment very much because we are in a very Other important SBM targets for the year include a leased tense competition… BP has not made up their mind about FPSO• for Total’s Egina in Nigeria on which it is already talking which contractor to select, whether it will be one [FPSO], four to the operator, a leased FPSO for Eni’s Oyo in OML 120/121 or anything in between, is still to be seen. It is very difficult to in Nigeria, a sale FPSO for ExxonMobil’s Bosi in Nigeria, lease predict when BP will make a decision, we continue to be hope- or sale for Chevron’s Nsiko in Nigeria, a leased FPSO for ful on this project.” Chevron’s Negage off Angola and leased or sale FPSOs for He said, as previously revealed by AOG (see 28 June 2007), Total’s CGC in Block 32 and CLOV in Block 17 in Angola. …with Bonga Southwest just behind Shell is still talking to both SBM and Prosafe about a leased 16-inch gas export pipeline and 25km of 12-inch water injec- FPSO for its Bonga Southwest project offshore Nigeria. tion flowlines. The umbilicals contract is to be contested by “It is very slow but it is moving. We have meetings with Aker Kværner, DUCO, Nexen and Oceaneering. Shell and it seems that their plans are now materialising. It has For the subsea equipment (which is seen as the most critical taken a long time,” said SBM boss Didier Keller. path in terms of timing) the bid list still includes Aker Technical bids were originally submitted in the last quarter Kværner, Cameron, FMC and Vetco. The contract will include of 2006 for the project and by the end of the year only SBM 29 conventional subsea trees. and Prosafe were in the running. The FPSO will have production capacity of 150,000 b/d, The pipelines/flowlines/risers and subsea equipment instal- storage capacity of 1.5m bbl, water injection of 240,000 b/d lation competition is down to Heerema/Subsea 7 and Saipem. and gas production of 175 MMcf/d. It will be turret moored in There will be 36km of 10-inch production flowlines, 92km of a water depth of around 3,937ft (1,200m).

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Nigeria upstream transition ...... 2 Hydro Angola tie-back...... 4

Tullow Ghana accelerates ...... 3 Gasol ever closer to LNG...... 5 EUROPEAN OFFSHORE Eq Guinea FPSO looms...... 3 Madagascar hots up ...... 6 PETROLEUM NEWSLETTER Uganda juggling act ...... 4 Roc heavy in Angola ...... 8 STRATEGY New Nigeria upstream structure needs ability and liberty The upstream industry in Nigeria is waiting to understand the sit on the Energy Council, set up to implement the new policy, transitional structure that will guide operators over the next theoretically within six months. year following the wide-ranging changes to current institutions. Under the new structure, the NNPC’s core roles of exploration President Yar’Adua’s medium-term plans are finally in place and production will fall to the NOC, which is to be empowered and nobody will really know whether they will work until late to conduct itself like any other oil and gas company. next year. Much will depend on the ability and liberty of the The old Department of Petroleum Resources, which in the new people appointed rather than the structure itself. past oversaw the often controversial awarding of oil licences But in the short-term the upstream has ground to a halt. and blocks, will now be an independent entity known as the Nothing is expected to happen this year. The Budget season Petroleum Inspectorate Commission. starts next month and the money must be put in place to allow The Energy Ministry itself will now become the National projects to continue. In the meantime, the ongoing “discovery Petroleum Directorate, which alongside the NOC will be over- process” into most recent major contract awards made under seen by the newly created National Oil and Gas Assets Holding the last administration must also be completed before new and Management Committee, which replaces NAPIMS. contracts can be awarded. Only at that point can operators The Petroleum Products Distribution Authority will replace once again start pushing their projects such as Bonga the Pipelines and Products Marketing Company. Southwest, Egina and Bosi. The idea is to turn NNPC’s amorphous structure of regula- In the meantime the President is finalising the membership tory and business arms into a company that could tap interna- of the Energy Council that will oversee the massive changes. tional markets, acquire assets and assert more control over the Sources say that he has now decided that NNPC will not be nation’s vast oil reserves. The company wants to complete the represented on the council. reforms in six months, but an entrenched network of vested Yar’Adua took office in April and there was concern that interests – from contractors to bureaucrats who benefit from until a couple of weeks ago little had happened. But he has the status quo – may get in the way. revitalised the plan dating originally back to 1988 that will Alhaji Lawal Yar’Adua, the group managing director of the overhaul the oil industry in Nigeria. corporation, said: “I believe the purpose of the new policy is in The government plans to replace the NNPC with five enti- line with government’s desire to make the NNPC function ties to separately handle exploration, production, distribution, purely as a profit oriented, commercial and duly capitalised domestic fuel pricing and the awarding of oil licences. limited liability company with the right to raise funds for its The President, Vice President and other senior ministers will projects and operations just like its peers around the world.” Total cuts production target by 20% Total’s hope of resisting pressures on production has been for access to resources. dashed and the company has cut output targets by 20% for the A recent study found that while worldwide spending by oil four years to 2010. companies had reached record levels, reserve volumes had Christophe de Margerie, the new chief executive, said on increased by only 2%. Wednesday that Total expected only 4% growth between 2006 However Total’s focus on less mature regions and its recent and 2010, against previous forecasts of 5%. exploration successes had buoyed hopes it would be able to It is the second time in three months that Total has been resist some of the pressures facing rivals, which are forecast- forced to rein in production forecasts, even though the group ing production growth of about 2%. still expects to outpace rivals BP and Shell. Jason Kenney, head of research for oil and gas at ING, Most majors have been forced to scale back production tar- remained confident the group’s profile would deliver results. gets, faced with maturing oil fields, skyrocketing costs, and the “They have quite a robust set of assets... particularly in deep growing readiness of oil-rich nations to demand a higher price water, west Africa and Angola,” he said. Grenland/FMC Kongsberg subsea partnership Grenland Group and FMC Kongsberg Subsea have signed a business methodologies, core expertise and market potential,” Memorandum of Understanding for entering into a partner Grenland said. agreement. The partner agreement for delivery of subsea production “The agreement is consistent with both parties’ objectives to systems will be valid for a five year period. The agreement is provide mutually competitive, world class fabricated products expected to be signed – and made effective – in the second half to the subsea market. This partnership will improve common of September 2007. Angola production to be limited in 2008 Angola will start to be affected by OPEC quotas in 2008, once Oil Minister Desiderio Costa, adding he did not expect any again resurrecting the fear of project delays. “quarrels when the time comes”. OPEC secretary-general Abdullah al-Badri said he expected “I think we will not have any different point of view about a “common understanding” with Angola in the future on estab- Angola’s production allocation,” he told a news conference in lishing an OPEC quota, but saw no changes in 2007. Luanda. Speaking in Luanda ahead of an OPEC production policy Angola’s entry into OPEC reflected its government’s desire to meeting on 11 September, Badri said oil markets were well exert political, as well as economic, influence on the interna- supplied despite growing pressure from consuming nations to tional stage. increase output. Under the most optimistic estimates, the country’s output “There is no quota [for Angola] in 2007 but there will be could reach 3m b/d by the end of 2010, up from an estimated some allocation in 2008,” Badri said after meeting Angolan 1.8m b/d currently.

2 Africa Oil and Gas 6 September 2007 FIELD DEVELOPMENT Tullow Ghana FPSO ‘focus on sanction’ Tullow’s fast-track FPSO project offshore Ghana continues to The plan is now for a final investment decision in 2009 and gather pace with the company providing details of the devel- first oil in 2012. opment concept, announcing new appraisal wells and lifting The results of the second well showed that the reservoir reserves even further. sands from both discoveries are likely to be in communication The field, which straddles the boundary between two and in total the discoveries have blocks in which Tullow partici- combined hydrocarbon columns of pates (West Cape Three Points 1,184ft (361m) of 37º API oil. and Deepwater Tano), has been Tullow has lifted recoverable explored by two wells, reserve estimates saying that the ulti- Mahogany-1 and Hyedua-1. mate figures range between a low- “The focus is now on the early case of 150-200m bbl, with a possi- sanction of the full field develop- ble mid-case of 450-500m bbl, to a ment,” Tullow said and initial high-case upside potentially of more than 1.3 Bn bbl. studies indicate that the most A programme of accelerated appraisal is under way. This likely development scheme will will comprise high resolution 3D seismic and three further consist of a large FPSO and subsea wells. This will be appraisal wells on the Mahogany/Hyedua structure beginning reviewed following the appraisal programme and detailed con- in October. Of these Mahogany-2 and Hyedua-2 will be cept studies but Tullow believes the dataset at the year-end drilled this year with Mahogany-3 drilling early next year. should be adequate to initiate formal conceptual studies. “In addition, the blocks contain a number of potentially mat- The current plan envisages an FPSO with storage of around erial prospects whose prospectivity has been enhanced by the 2m bbl and around 20 production and 10 water injection wells, recent results and the exploration team is focused on prioritis- with gas potentially exported by pipeline. ing the best of these for potential 2008 drilling,” Tullow said. Equatorial Guinea deep FPSO ever more likely A new deepwater FPSO project offshore Equatorial Guinea is Charles D Davidson, Noble Energy’s chairman, said: “The looking more likely for Noble Energy, although the firm is still success of our Belinda appraisal well exceeded our expecta- considering a platform development. tions and is significant from several perspec- This follows success on the Belinda tives. It infers lateral continuity and quality of appraisal well on Block O in 1,740ft (530m) the reservoir, confirms significant resources of water, approximately 7km southwest of the downdip of the original discovery well, and it original Belinda discovery. The new well was provides another calibration point for seismic drilled to a total depth of 9,500ft (2,895m). attributes. We remain extremely encouraged The O-3 well successfully extended the with the results of our current drilling pro- Belinda discovery by establishing significant gramme in West Africa with this latest well downdip resources. Reservoir quality at the being the third successful well out of a total O-3 location was even better than was encoun- of four drilled so far.” tered at the O-1 discovery location while maintaining reservoir The firm previously outlined a small platform project with thickness. Reservoir quality and content has been confirmed, subsea wells for the Belinda condensate field. Liquids would with test results showing condensate-rich natural gas producing be piped 36km to an onshore process facility. at maximum flow rates of 30.4 MMcf/d of natural gas and Originally Noble put reserves at Belinda at 77-211m boe and 1,540 b/d of condensate, or approximately 6,607 boe/d. development costs at US $450m-$1.1 Bn. Production could The Songa Saturn drillship will next move back to Block I come as early as 2011 but the firm has said that if the reserves where it will drill a Benita appraisal well located approxi- come at the top of estimates then a much larger FPSO project mately 3km from the I-1 discovery well announced earlier this is possibly envisaged. year. The I-1 well is around 21km from the O-1 well. Mart mixed Nigerian marginal messages Nigerian marginal field specialist Mart Resources is looking cased by Elf in 1980. According to Elf’s well report, the probe for facilities for one field in Nigeria while it is in dispute with encountered three oil pay zones with a total of 59ft (18m) of one of its partners over another. net oil pay. In addition the well encountered a deeper gas zone Mart and operator Midwestern Oil and Gas are now trying to and a deeper oil zone. The deep oil zone has 20ft (6m) of net source and construct the facilities to start production from the oil pay and was tested at a rate of 1,673 b/d of oil. Umusadege oil field as soon as possible. In July the partners At the Qua Ibo field, Mart is in a dispute with partner tested the UMU-1 well at a rate of 6,021 b/d. The partners will Network Exploration & Production regarding Mart’s contrac- construct a short 328ft (100m) pipeline to tie-in to a nearby tual rights in the field. In the event this dispute cannot be export pipeline that is nearing commissioning, together with resolved amicably, Mart said it will proceed with arbitration in metering system and production storage facilities. London. It is intended that oil production from the field will initially At the Ke oil field, Mart and its partner Del-Sigma pass through a rented separation facility before entering the Petroleum have plans to reprocess existing 3D seismic data pipeline system, with production anticipated to start by and drill a new well offset to the existing Chevron well drilled January 2008. in the 1960s. Mart and Del-Sigma are reviewing the possibil- In the same field, Mart and its partners are preparing to re- ity of re-entering Ke-1,which was drilled by Chevron in 1965 enter and test the UMU-N2 well. This well was drilled and and production tested at a rate of 1,145 b/d of oil.

Africa Oil and Gas 6 September 2007 3 FIELD DEVELOPMENT Angolan Pazflor waiting to bloom Total has decided on its preferred winners for two of the major subsea production system package. Sonangol has said it wants contracts for the giant Pazflor project in Angola but has yet to to receive all three recommendations at the same time so hand any recommendations to Sonangol. everything is still in Total’s hands. The French giant is understood to currently prefer Hyundai This means that lobbying can still continue on the closely Heavy Industries for the FPSO and the Technip/Acergy joint fought battle, something that will carry on when Sonangol is bid for the subsea umbilical, riser and flowline package. making up its own mind. However, it has yet to decide on its preferred winner for the Hydro considers Angola deep tie-back Norsk Hydro is looking at a tie-back for a new discovery off The Gimboa field, discovered in 2004 by exploration well Angola, as previously exclusively revealed by AOG (see 26 4-41-1, is currently under development, with an anticipated July pg 8). production start up in the third quarter of The find was made in the Gimboa 2008 of approximately 50,000 b/d of oil. Development Area in deepwater Block The FPSO contract was awarded to 4/05. Saipem, while Technip was awarded the The appraisal well, 4-31-11,was made in US $70m umbilical, risers and flowlines the west of the block a water depth of contract. 1,502ft (458m). It encountered oil in The Gimboa project consists of three Miocence reservoirs in two adjacent com- production and four water injection wells partments. During a test of compartment B tied back to the FPSO. the well produced 5,346 b/d of 26ºAPI The field, operated by Sonangol with crude. Samples were collected from com- technical partner Norsk Hydro, is at a water partment A. depth of 2,297ft (700m). “Technical studies of the reserves as an extension of the Recoverable reserves in the original discovery were esti- Gimboa project are ongoing,” Hydro said. mated at 50m bbl of oil. Aker Kværner smaller project subsea tree solution Aker Kværner is launching a pre-configured subsea tree sys- “We are reducing lead times as well as project risks and costs tem that it says will cut lead times for smaller subsea develop- by utilising field proven configured components for this sys- ments and tie-backs when developing fields close to existing tem. Our objective is a six-month delivery period,” said John offshore installations. Macleod, vice president – trees at Aker Kværner Subsea. The company says RapidSolution™ is a complete subsea The development of RapidSolution™ also mirrors Aker tree system based on Aker Kværner Subsea’s standard config- Kværner’s ambition to grab a larger slice of the global stand- urable tree (SCT™) that will provide a complete accelerated alone tree market. solution within a fraction of the traditional system lead times. The system will be ready for delivery from Q3 2008. CB&I goes upstream as ABB Lummus Global bows out Chicago Bridge & Iron (CB&I) has bought out ABB Lummus including the Extended Tension Leg Platform and Single Global for US $950m. Column Floater designs. They then formed joint venture Under the terms of the agreement, Netherlands-based CB&I FloaTEC and also gave it their own technology. will purchase the entire Lummus Global business. Lummus “The divestment of Lummus Global is the final milestone in Global employs about 2,400 people and reported revenue of our strategy of focusing on our highly successful core business $988m in 2006. in power and automation technology,” said Fred Kindle, ABB This is the last act in ABB’s exit from the upstream industry. CEO. “At the same time, we are pleased that CB&I is taking CB&I was one of the bidders interested in ABB Vetco Grey over our Lummus Global business. They are an experienced when it was up for sale in 2003. Candover eventually won that engineering, procurement and construction company and are for a price of $925m. therefore in a very good position to further develop Lummus Then in 2005 Keppel Fels and J Ray McDermott bought the Global’s market activities and operations.” patent rights from Lummus Global for deepwater platforms Total Gabon spend soars Total’s capital expenditure in Gabon soared in the first half of on Hylia and one on Atora; drilling of a well on Port-Gentil the year as the firm lifts spending to battle declining produc- Océan; and the successful workover of one well each on tion. Anguille and on Torpille and the beginning of the first phase The capital expenditure related to oil operations in the first- of Anguille field redevelopment. Capital expenditure also half of 2007 was US $122.2m, up from $48.2m in the same includes exploration and development studies and spending to period in 2006. Full-year expenditure is expected to be more maintain production facility integrity. than double the figure for 2006. In non-operated activities money was spent on continued First-half 2007 capital expenditure in operated activities geoscience studies to prepare for further development of the originated mainly from a major drilling programme that Rabi Kounga field. included the bringing onstream of a well on Anguille, another

4 Africa Oil and Gas 6 September 2007 FIELD DEVELOPMENT Tullow balances Uganda project has issued tenders for its Kaiso-Tonya development local power station (of around 50MW capacity) and poten- in Uganda but said it expects to firm up adequate reserves for a tially also supply a mini refinery. pipeline to the coast and international crude markets. However, Tullow is really hoping that it will be able to firm The firm is under strong pressure from the government to up enough reserves for a 1,300km pipeline to the ocean. start production from the country’s first commercial oil finds “We haven’t reached the threshold we require for a major in Block 2. Pre-FEED facilities, topping plant and power stud- export pipeline but we anticipate we will with some of the exp- ies are now complete and tenders have been issued. Power loration drilling we’re doing in the backyard. We’re doing transmission and road studies are underway and project sanc- scoping studies to prepare for that and the overall objective is tion is timetabled for the fourth quarter of this year, with first to initiate full scale export as soon as possible,” said Tullow oil in 2009. COO Paul McDade. Tullow previously said any early production system could “The challenge is to balance long and short-term goals,” said initially comprise production and processing facilities to fuel a Angus McCoss, exploration director.

GAS Gasol claims ever closer to LNG project reality West Africa LNG hopeful Gasol said it is in ongoing discus- gas infrastructure construction and operation activities of Afgas. sions with a number of major European utilities regarding long “Gasol will benefit from the potentially significant revenues term sales agreements and has just bought the majority stake accruable to AIL from tariff charges and tolling fees in respect in a gas infrastructure contractor. of gas pipelines constructed and operated by AIL and for the Gasol has a stake in African LNG – which is currently focus- use of associated infrastructure. Under its relationship with ing on three conventional single train LNG projects and a Sonagas, AIL is participating in the development of one floating LNG project. clearly identified major gas project in Equatorial Guinea and is African LNG is 80% owned by African Gas Development actively reviewing other prospective opportunities for co-oper- Corporation (Afgas), which has an exclusive joint venture with ation between Equatorial Guinea and neighbouring countries Sonagas, the national gas company of Equatorial Guinea. This including Nigeria,” Gasol said. joint venture named Sonaf is responsible for implementing a Haresh Kanabar, Gasol’s chief executive, said: “We have detailed multiphased strategy involving the monetisation of made significant progress to date in creating the platform from selected gas resources in Equatorial Guinea. which the company can move towards the next stage in its Gasol, African LNG and also have an alliance to gain development: the production, liquefaction, shipping and sale access to upstream gas supplies in the Gulf of Guinea through of significant volumes of LNG. Via our investee company Afren, in return for which Afren gains preferred access to African LNG we are in discussions with a number of major Gasol’s planned gas conversion activities. European utilities in terms of long term sales agreements, Gasol has also just bought a 75% shareholding in Afgas which will form the basis of the project financing of our first Infrastructure (AIL), a project company formed to support the LNG production project.” Sonatrach keeps Algeria gas giant Sonatrach has said it threw the foreign firms out of the US $4 for delays and cost overruns, while the Spanish firms released a Bn Gassi Touil project because they had turned it into a statement saying they: “regret and reject the Algerian decision to “major industrial fiasco”, while the firms have said they reject appropriate for themselves, and illegitimately” the project. the decision. They blamed the move on political influence wielded by Algeria announced its decision to throw out Repsol and Gas Algiers over Sonatrach and said they would take the issue to Natural earlier this week, blaming spiralling costs and long international arbitration where they would seek damages. delays since the project was first awarded in 2004. The firms Algeria has become an increasingly difficult place to work have so far spent $320m on the development. In addition for foreign investors, particularly due to recent tax changes Sonatrach has become much more confident over its own abil- which are costing foreign operators such as Anadarko hun- ities as an operator, and the Spanish and Algerian governments dreds of millions of dollars. have been arguing in recent months over how much of the gas The firms were looking at building a 4m ton per annum plant from Algeria’s Medgaz export pipeline can be sold in Spain. in Arzew with a potential second train. A KBR/JGC consor- The end result is that Sonatrach has blamed the Spanish firms tium was working on the FEED. Angola confirms Bechtel will get LNG construction Angola has said it will award the construction contract for the ure could rise even further. It is this rise that has delayed Angola LNG project to Bechtel before the end of the year. award. Antonio Orafo, president of Sonangol Gas Natural, said that In the meantime, Sonangol is still hoping to bring the plant the construction contract would follow the engineering and on line ahead of expectations of many in the market. procurement contracts which were awarded at the start of this “Construction of the factory is scheduled to take four years year. and the first exports of LNG should start in the fourth quarter As previously revealed by AOG, of the total US $2.7 Bn fig- of 2011,” said Orafo. There has recently been talk that first ure for the plant, the construction contract was expected to be exports are now not realistically expected until 2012 as nego- $1 Bn. However Bechtel has now lifted this estimate to $1.4 tiations between Sonangol and foreign operators over financ- Bn due to industry cost increases, and some believe this fig- ing of the infrastructure to bring the gas to Soyo are ongoing.

Africa Oil and Gas 6 September 2007 5 GAS No infrastructure needed for stranded fields Sea of Solutions says it has developed a technically feasible Nick Wessels, sales engineer at Sea of Solutions, said: “The and low-cost concept to exploit stranded gas fields without off- advantage of this concept is that the investment is in the vessel shore infrastructure. itself and is not related to a specific offshore field. It is an The Dutch firm, which is a partner in the Offshore Ship attractive means to develop fields for which the production Designers group, has developed the concept of a long pipeline rate or total volume cannot be easily predicted.” coiled inside a ship rather than laid out on the seabed: the con- Sea of Solutions has worked out the optimum vessel size, tinuous pipe CNG carrier. The gas comes out of the ground cargo pipeline size and temperature and pressure of the stored into a coiled pipeline in the ship and is delivered to the shore natural gas for a typical stranded gas field. With an overall facility without need for offshore installations or shipborne length of 787ft (240m) the ship can carry a coiled pipeline of installations. about 218km, at speeds of 15knots. Typically, one load would The CNG carrier can cope with unprocessed gas direct from equate to 515 MMcf of saleable gas. the well and the coiled pipe design avoids the need for large All parameters are open to change depending on position complex pressure vessels built into the ship. and size of fields.

LICENSING EnerMad crazy on Madagascar… Canada’s EnerMad has become the latest firm to be awarded Other firms that have been awarded acreage from the last acreage from last year’s licensing round in Madagascar – tak- round include Gippsland, Roc Oil, Candax and Wilton, while ing 10 offshore blocks. a number of other companies are still believed to be in negoti- Exploration Licence No. 34/07/TM, more simply called ations including East African Exploration, Grynberg Grand Prix, includes the blocks which cover 16,845sq km to Petroleum and MacOil. the west of Madagascar’s Morondava Basin in the The Exploration Licence includes a prime multi-zone deep- Mozambique Channel. water prospect as well as shallower extensions of the potential EnerMad has been in formal negotiations with L’Office des field. Prime targets have been preliminarily identified in Mines Nationales et des Industries Strategiques since the bid approximately 4,265ft (1,300m) of water, which would require round closed last December. A second round is expected some drilling to a depth anticipated to be approximately 11,483ft time this year. (3,500m). …as ExxonMobil looks for partner ExxonMobil is trying to farm out some of its acreage in in the offshore Majunga Basin, with the data room due to close Madagascar. on 2 November. ExxonMobil currently has a 70% stake in this ExxonMobil is looking to farm down its stake in one of the and the neighbouring Ambilobe block, as well as 40% in the three blocks in which is has interests. Majunga Offshore Profond block. As such is it is one of the It is inviting bids for up to 20% of the Ampasindava block largest acreage holders in this frontier exploration region.

Calendar TransGlobe buys into Tanganyika Oil has sold its interests in Egypt km and current gross oil production is 3,000 2007 to TransGlobe Energy for US $70m. b/d. Independent reserve auditors have SEPTEMBER Tanganyika, through its subsidiaries, holds assessed Tanganyika’s share of the eight a 70% interest in one development lease and a leases to contain 3.24m bbl of proved reserves 17-18 Acquisition and 45% working interest in seven additional and 6.30m bbl of proved plus probable Divestiture in Oil & Gas: development leases comprising the West reserves. The acquisition will increase West Africa Summit Gharib production sharing concession. TransGlobe’s reserves by around 35% for Novotel London West, UK The development leases encompass 178sq proved and by 54% for proved plus probable. Tel:+44 (0)207 368 9350 Email: [email protected] www.iqpc.com/uk Zambia round falters /AfricaAandD/ogilvie Zambia has suspended the bidding process for “The Act does not break licences into com- oil exploration in its northwestern province ponents so you will find that one licence OCTOBER until it has put in place a law protecting the includes exploration, production and sale of 2-6 DOWAC, 2nd Regional country’s national resources. oil,” he said. Deep Water Offshore Mines Minister Kalombo Mwansa was The government will amend the act to dis- West Africa Exploration quoted as saying that the government had put mantle licences into various components, & Production Conference on hold the bidding process until the including local content. & Exhibition Petroleum Act is reviewed to protect the The process is expected to be completed by Luanda, Angola Tel +31 (0)26 3653444 resources from being exploited to the disad- the end of this year, he said. Fax +31 (0)26 3653446 vantage of the nation, according to the In June, Finance Minister Ngandu Magande Email: Zambia Times said Zambia would launch its first licensing [email protected] Mwansa said the current Petroleum Act did round within weeks and offer up 25 blocks. www.dowac.com not effectively serve national interests.

6 Africa Oil and Gas 6 September 2007 LICENSING Equator looks to sell as woes mount Equator Exploration is looking to sell off more assets after the BW Offshore for an FPSO offshore Nigeria, although it is in merger agreement with CAMAC Energy was terminated. negotiations for a new FPSO contract. “The cessation of merger discussions will permit the com- Equator originally awarded the contract for the FPSO BW pany to focus on optimising the value of its assets on a stand Peace for the Bilabri field in OML 122 in the middle of last alone basis. The company is reviewing the most appropriate year. Later in the year the development was scaled down, and ways in which to do this, similar to the farm out of OPL 323 Equator then ran into financial troubles when Nigerian partner to BG… (see AOG 23 August) The operating costs of the com- Peak Petroleum did not meet its cash call commitments. pany are expected to be adjusted commensurate with the Equator said that: “The company is conducting a detailed results of the asset reviews,” Equator said. review of its interest, commitments, prospects and financing of Equator also has s 30% stake in OPL 321 in Nigeria, a 9% the Bilabri project under the terms of the finance and service stake in Block 2 in the Joint Development Zone between agreement with Peak Petroleum Industries Limited, the opera- Nigeria and São Tomé & Príncipe (STP) and a discretionary tor and sole licence holder of OML 122, offshore Western right to two blocks in the Exclusive Economic Zone held by Niger Delta, Nigeria.” STP. In the meantime it is finalising an agreement with an exist- At the end of August Equator terminated its contract with ing lender for a short term working capital facility. Libya reveals licensing shortlist Libya has revealed the shortlist of 55 companies that will be Oil & Gas Development Co, OMV, ONGC Videsh, Oxy, allowed to bid in its latest licensing round. Pakistan Petroleum, Pan American Energy, Petrobras, A total of 35 companies have been chosen as operators, and Petrocanada, Petronas, Polskie Gornictwo Naftowe, PTTEP, another 20 as minority partners. The majority of hopeful new- Repsol, RWE Dea, Shell, Sonatrach, Statoil, Talisman, Total, comers are in the last group. The companies must now form Wintershall and Woodside. themselves into consortia by 30 November. The companies that qualified as minority partners are: This fourth international bid round is offering 12 contract Addax, Bridas, Burren Energy, , Edison, e.on Ruhrgas, areas with 41 blocks. Hellenic Petroleum, INA Industrija, Indian Oil, Itochu The companies that qualified as operator are: BG, BP, Corporation, Japan Petroleum Exploration, JOGMEC, Korea Chevron, Conoco, Eni, ExxonMobil, Gas de , Gazprom, Gas, Mitsubishi, Mitsui Oil, MOL, Mubadala Development, Hess, Inpex, Lukoil, Mærsk, Marathon, Naftogaz, Novatek, Nippon Oil, Oil India, SK Energy and Union Fenosa. Tower releases in Uganda… Tower Resources looks to have farmed out a major stake in a licence interest in return for continuing to fund 83.33% of two block in Uganda to Tanzania specialist Orca Exploration. exploration wells, expected to begin in mid-2008. Tower subsidiary Neptune Petroleum holds the rights to In the event that Orca exercises its option to become a 50% Exploration Area 5 in northwestern Uganda. partner, Neptune will continue to remain operator under the Orca will fund 83.33% of certain back costs and a 250- licence for a period of three years. However, Orca will assume 300km 2D seismic programme starting this September, which management responsibility for all drilling activities. fulfils the work commitment relating to the first exploration Orca operates the Songo Songo gas field in Tanzania, while period of the EA5 licence. Tower Resources also holds Blocks 1910A, 1911 and 2011A On completion of interpretation of the seismic data, Orca offshore Namibia. will have the exclusive option to be assigned a 50% working …but guards Namibian partner Tower Resources has agreed farm out terms for its three blocks tially be extended to fund future seismic and drilling. offshore Namibia. Tower is keeping a lid on the company’s name until it has The UK minnow said the farm out agreement with an received approval from the Namibian government. unnamed third party to fund recently completed 700km of 2D Currently it holds 100% of Blocks 1910A, 1911 and 2011A has been signed. It also said that the agreement could poten- through wholly-owned subsidiary Neptune Petroleum.

EXPLORATION Melrose ramps up Egyptian campaign Melrose Resources is stepping up its exploration in Egypt with activity is now switching to exploration drilling on the first up to five wells to be drilled before the end of the year. prospects which have been screened and prioritised. To date, Activity in Egypt in the first half of 2007 has focused on the nine prospects have been approved for drilling and up to five appraisal and development of the West Khilala and West of these will be drilled this year. A further twenty-two Dikirnis fields. However at the same time the company has prospects and leads are being further evaluated and ranked for been building up an inventory of prospects from 3D seismic drilling in 2008 and 2009. The gross risk-adjusted mean and a new shoot is ongoing. reserves being targeted by this programme total 440 Bcf and Melrose currently has two rigs drilling in Egypt. Drilling 77m bbl.

Africa Oil and Gas 6 September 2007 7 EXPLORATION Delayed Kudu well penetrates gas Crunch time has finally arrived for the Kudu project offshore Drilling has been held up by equipment problems and poor Namibia with the first of two appraisal wells penetrating a gas- weather but earlier this week the well penetrated the primary bearing reservoir. objective section and was found to be gas-bearing. Operations Operator Tullow is giving the project one last chance with continue with coring and drilling to total depth of 15,420ft the exploration campaign and is trying to firm up adequate (4,700m) followed by logging. These operations are expected reserves for a power station in Namibia and gas pipeline to to complete in October with any testing occurring subse- South Africa. quently. In May, the Pride South Seas semisub started drilling Tullow is currently talking to the Namibian and South Kudu-8. The objective of the well is to establish commercially African national oil companies and power authorities about a productive flow rates from the extensive Kudu East reservoir 300MW power station in Namibia and then gas export directly originally tested by the Kudu-5 well. to South Africa. CNOOC quietly drills in Nigeria CNOOC has quietly drilled its first exploration well on a block total signature bonus of $20m. offshore Nigeria in which few even knew it had a stake. The block is one of the largest shallow-water blocks offshore In January the Chinese firm paid US $60m for a 35% stake Nigeria. It covers about 1,357sq km, ranging from a swamp in in shallow water OPL 229 in the central Niger Delta. the northwest to a water depth of more than 98ft (30m). Back in 2001 the block was awarded to indigenous company However, in a press conference this week, CNOOC said it Resources which held a 55% stake. The had recently been unsuccessful with its first well and is now remainder was taken by Amni International. The firms paid a looking at the location of a second probe. Roc optimistic on Cabinda heavy oil find Australia’s Roc Oil said that its oil discovery in Angola could to produce 20% or more of the in-place oil using standard prove to be commercial and has already spudded one new heavy oil industry production techniques, provides plenty of wildcat with another imminent. reason for Roc and its co-venturers to take a very close look at The firm said that while the onshore Massambala oil find the discovery,” said CEO John Doran. appears to be heavy, it also appears to be producible and that The well, drilled by the Explorer rig, was Roc’s first well in the find warrants further investigation. the Cabinda South block and it was the first well in Cabinda Based on preliminary interpretation of data, Massambala has itself for 35 years. a 52ft (16m) oil column in the main zone, with around 49ft In the meantime another rig has started drilling the Soja-1 (15m) of net oil saturated sand with good to excellent qualities. exploration well. “It is far too early to comment specifically on potential When the rig demobilises from this location, it will move to recoverable reserves at Massambala, but volumetric calcula- a higher and drier location where it will drill the Milho-1 and tions, based on the most recent 3D seismic mapping and avail- Trigo-1 exploration wells, each of which is expected to take able well data, suggest the in-place oil resource potential could approximately two months to drill. be in the order of 170m bbl of oil,” said Roc. The Explorer rig is being relocated from the Massambala “In Massambala’s case, the thought that it might be possible discovery to drill the Cevada-1 exploration well.

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8 Africa Oil and Gas 6 September 2007