Chariot’s new offshore Morocco block given resource boost
Oil and gas company Chariot Oil & Gas has received a positive competent person’s report over resources in its recently acquired block offshore Morocco.
Chariot on Thursday reported that the CPR by Netherland Sewell & Associates Inc. (“NSAI”) over the satellite prospects adjacent to the Anchois-1 gas discovery in the Lixus Offshore Licence upgraded remaining recoverable resources to in excess of 1 Tcf of gas ( (comprising 2C contingent resources and 2U prospective resources)
The Anchois-1 well was drilled in 2009 in 388m water depth some 40km from the coast and encountered an estimated net gas pay of 55m in two sands with average porosities ranging from 25% to 28%.
The Anchois discovery is in Tertiary-aged turbidite reservoirs that occur above a nappe emplaced during the Alpine orogeny and the pay sands have a characteristic and anomalous seismic signature. Chariot last month said it had identified five satellite prospects to Anchois that have tie-back potential. In its update on Thursday, the oil company said the Anchois North prospect has been confirmed as the low-risk priority satellite prospect with 308 Bcf of 2U prospective resources with a probability of geological success of 43%
Chariot in April said it had estimated that Anchois and the satellites held remaining recoverable resources in excess of 900 Bcf.
The initial license commitment includes a technical program of 3D seismic reprocessing and evaluation to access the additional exploration potential of Lixus. In a statement on Thursday, Chariot said that further CPR on additional five prospects identified in Lixus license would be completed after the 3D seismic reprocessing project.
Larry Bottomley, CEO of Chariot said: “This independent third party evaluation confirms that the Anchois discovery, and its nearby satellite prospects, presents Chariot with an exciting and commercially attractive development opportunity. The combination of a de-risked resource base in a fast-growing energy market, with high gas prices, and a need for increased supply is highly attractive to a wide range of strategic partners throughout the energy value chain.
“We anticipate a period of sustained news flow on this exciting project going forward, which should further unlock the value of the Lixus license, with the results of the feasibility and gas market studies expected to be announced in due course.”
Chariot has said that the excellent quality reservoirs in the Anchois discovery offer the potential for high rate wells and the consequent possibility of a low-cost development.
In its previous presentation Chariot said it might drill an appraisal well at Anchois in mid-2020.
U.S. oil major Chevron will not be increasing its initial bid for the takeover Anadarko and expects the previously agreed deal to be terminated as Anadarko has entered into takeover talks with Oxy which recently submitted a superior offer.
Source: Anadarko
Chevron on Thursday said that “under the terms of its previously announced Merger Agreement with Anadarko Petroleum Corporation (NYSE: APC), it will not make a counterproposal and will allow the four-day match period to expire. Accordingly, Chevron anticipates that Anadarko will terminate the Merger Agreement.”
“Winning in any environment doesn’t mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal,” said Chevron’s Chairman and CEO Michael Wirth. “Our advantaged portfolio is driving robust production and cash flow growth, higher investment returns and lower execution risk. We are well positioned to deliver superior value creation for our shareholders.”
Upon termination of the merger agreement with Chevron, Anadarko will be required to pay Chevron a termination fee of $1 billion.
“Consistent with Chevron’s commitment to superior shareholder returns, the company plans to increase its share repurchase rate by 25 percent to $5 billion per year,” Chevron said.
Chevron and Anadarko had on April 12 entered into a definitive agreement with Anadarko Petroleum Corporation to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65 per share.
“Winning in any environment doesn’t mean winning at any cost. Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal.”
Less than a fortnight later, the U.S. firm Occidental Petroleum (Oxy) entered into the race for Anadarko, saying it would offer $76.00 per share, 50-50 cash and stock, in which Anadarko shareholders would receive $38.00 in cash and 0.6094 shares of Occidental common stock for each share of Anadarko common stock, saying its offer was a premium of approximately 20% to the value of Anadarko’s, at the time, pending transaction with Chevron. The value of the Oxy offer was estimated at $38 billion.
Oxy then on May 5, upped the ante, revising the proposal to include a bigger portion of cash. The offer was for Anadarko shareholders to receive $59.00 in cash and 0.2934 shares of Occidental common stock per share of Anadarko common stock.
Occidental President and CEO, Vicki Hollub, said:”The financial support of Berkshire Hathaway as well as the agreement we announced with Total allows us to delever our balance sheet while focusing our integration efforts on the assets that will provide the most value for us.”
Saudi Aramco, Equinor invest in blockchain-as-a-service solution
Source: Pixabay
Houston-based technology company Data Gumbo has completed a $6 million equity funding round for its blockchain-as-a-service (BaaS) platform.
Data Gumbo said on Tuesday that the equity funding round was co-led by Saudi Aramco subsidiary Saudi Aramco Energy Ventures and Equinor Technology Ventures, the venture subsidiary of Norway’s energy giant.
The new capital will be used to expand the company’s commercial blockchain network, in addition to growing the technical, sales and marketing teams at their Houston headquarters and office in Stavanger, Norway. This funding round brings Data Gumbo’s total funding to $9.3 million.
Andrew Bruce, CEO of Data Gumbo, said: “We enabled the first application of blockchain technology in the offshore drilling industry and will continue to break new ground with applications of BaaS to improve the bottom line of companies of all sizes. The partnership with Equinor and Saudi Aramco, and their associated supply chains and partnerships will provide the momentum for the Data Gumbo BaaS network to gain critical mass.”
The overarching problem that industrial companies have is that transactions resulting from measurements are interpreted differently by companies, their service providers and suppliers, be it weight, speed, height, connection, delivery time, volume, quality controls, or any other number of related contract terms, Data Gumbo says.
According to Data Gumbo, each company in the supply chain has different interpretations of the data, and when it comes to payments, filings and audits, there are significant delays and disputes.
Data Gumbo says its solution eliminates these differences in interpretation with its BaaS network and smart contract technology, facilitating automated calculation, reconciliation, and payment of invoice line items in near real-time with total transparency – driving reconciliation time between supply chain counterparts down to zero, among other benefits.
After removing disputes and enabling automated payment, the BaaS network records the result in an immutable record shared among all parties to the transaction.
The company claims that customers realize savings of 5-10 percent off the top on Data Gumbo-managed contracts from a combination of fewer disputed invoices, fast-pay discounts, and performance contracts.
Boskalis’ vessel hijack in E. Guinea an act of Nigerian pirates
Sunday’s violent pirate attack – in which shots were fired and Boskalis’ heavy transportation vessel was hijacked – was most likely an act committed by Nigerian pirates. Luckily, there were no casualties as the crew locked itself in the citadel and waited for the rescue to arrive.
Blue Marlin; Image by the Spanish Navy
In a statement read out on Equatorial Guinea’s state radio on Tuesday, Vice President of Defense and Security, Teodorin Nguema Obiang, claimed that 10 pirates had been arrested.
“Thanks to the swift intervention of our armed forces, (we) managed to save the crew on board and arrest ten pirates,” he said, adding that their presumed nationality was Nigerian.
Wanting to learn more about the event itself and the environment in the Gulf of Guinea that the vessel operators are facing, Offshore Energy Today spoke to Jake Longworth, a Senior Intelligence Analyst at EOS Risk Group.
Longworth told Offshore Energy Today that the attacks in Equatorial Guinea’s waters were yet another significant development for West African piracy this year.
“Attacks in Equatorial Guinea’s waters are incredibly rare, despite proximity to the severe piracy risk areas south of Bonny Island, Nigeria.”
Longworth added that the last confirmed attack of note in Equatorial Guinea’s waters occurred over five years ago, with attacks only rarely taking place to the east of Nigeria’s maritime boundary (EEZ) with Equatorial Guinea and Cameroon.
Asked if he believed the attack was indeed conducted by Nigerian pirates, as presumed, Longworth said: “EOS has dealt with a numerous kidnap and hijack cases in West Africa and we maintain close links with interested parties from the shipping, legal and financial industries, as well as relevant government authorities. All West African piracy cases we have been involved in or briefed on had roots in the Niger Delta. We have conducted investigations that reveal the occasional involvement of one or two pirates from other nationalities, such as the odd Beninese or Ghanaian national, especially during tanker hijacking for oil theft attempts, but the attack groups are predominantly Nigerian.”
“Sometimes you see a geographically unusual attack, for example in the waters off the Bakassi Peninsula, Cameroon or off Pointe-Noire, Congo and people assume local pirates are involved. But these hostages always seem to end up in the Niger Delta, particularly in the creeks around Nigeria’s Delta, Bayelsa and Rivers States. Nigerian pirate groups sometimes use ‘motherships’ and small ‘ghost tankers’ to sail around the West Africa region, similar to the tactics used by Somali pirates in the Indian Ocean. It makes them very unpredictable.”
“That said, if you’re looking at the criminal incidents at anchorage or port – this is always done by locals. But if it’s a hijack, kidnap or serious attack requiring expertise, this points to Nigerian PAG involvement.”
“West Africa Pirate Attack Heatmap. August 2018 – May 2019”
According to data provided by EOS Risk Group, there have been three attacks in the space of two days in the broader area.
First, on Friday, May 3, the Liberia-flagged tanker Levanto, underway from Calabar to Lagos, was attacked by armed pirates in a speedboat at 2050 hrs local time, 35nm SSW of Agbami terminal, 97nm SW of Brass, Nigeria. The vessel’s master enacted AP procedures and evasive maneuvers. Pirates fired upon vessel but failed to board.
Then on Sunday morning, Nigeria-flagged tug Charis was boarded and hijacked by pirates 30nm SW of Bioko Island, Equatorial Guinea.
It is believed that this vessel was used by the pirates to attack Boskalis’ semi-submersible heavy lift ship Blue Marlin which was, underway from Luba (EG) to Valetta (Malta).
According to EOS, the vessel was attacked by seven armed pirates at around 1 pm local time 36nm SW of Bioko Island, Equatorial Guinea. Pirates boarded and the crew retreated to the citadel.
“Pirates remained onboard overnight, attempting to access the citadel and ransack valuables. Pirates used vessel’s PA system to threaten crew to emerge from the citadel and give the pirates all cash onboard. When the Master refused, the pirates used a small hole into the citadel to fire off several rounds (likely 7.62mm). No injuries reported,” EOS said.
An Equatorial Guinea Navy frigate (F073) and two helicopters responded to the scene of the attacks. Spanish Navy Patrol Boat Serviola (P71) was diverted from Nigerian waters and sped to the location at max speed.
“With the presence of naval forces, pirates disembarked and fled the location. On May AM, a boarding team from the Serviola boarded the Blue Marlin and all 20 crew were later reported to be safe. The tug Charis was also declared to have been freed from pirates,” EOS Risk Group information stated.
Serviola Patrol boat near the Blue Marlin / Image by the Spanish Navy
Ominous picture for shipping companies
In further comment for Offshore Energy Today, Longworth also noted that several other attacks in 2019 have redefined the risk profile in the region, specifically the attack on the tanker Cap Theodora 106nm south of Lagos, the attack on tanker Advantage Summer with its freeboard of 15.9m, the kidnapping from tanker Histria Ivory offshore Togo, the attack and successful kidnap from diving support vessel E.Francis under security escort off the Niger Delta, the kidnap of crew from the cargo vessel Contship Oak at Douala anchorage and two attacks on commercial vessels on the Bonny River.
Speaking about the geography of the threat, Longworth said that Nigerian pirates have operated at substantial ranges across West Africa since January 2018, “conducting attacks off Ghana, Togo, Benin, Cameroon, Equatorial Guinea, Gabon, and the Congo. Within the last decade, Nigerian pirates have also operated in the waters of Cote d’Ivoire, Sao Tome and Principe, and Angola. This paints a very ominous picture for shipping companies operating in the region, whose vessels face elevated security risks in around 338,000 square miles of water, an area twice the size of the Red Sea.”
Nigerian pirates have kidnapped 46 seafarers from vessels operating in West Africa so far this year, compared to 93 seafarers abducted in 2018.
According to EOS Risk Group statistics, Nigerian pirates have kidnapped 46 seafarers from vessels operating in West Africa so far this year, compared to 93 seafarers abducted in 2018.
Longworth believes that the presence of a NATO naval asset in the Gulf of Guinea, specifically Spain’s OPV Serviola (P71), is a positive deterrent, having responded to two pirate attacks since it arrived in the region in April 2019.
However, he noted that the vessel is only deployed on a temporary mission spanning three months and that continued support from foreign navies was likely to be intermittent: “the Gulf of Guinea is not a strategic or economic priority for western navies, which are already overstretched on deployments in the Mediterranean, Indian Ocean, Persian Gulf and South China Sea. The shipping industry will have to continue to do what it can to mitigate the risks of operating in the region in the absence of effective state security.”
According to Longworth, “informed risk assessments, safe routing, vessel hardening and anti-piracy procedures – as defined in the Gulf of Guinea Guidelines and Global Counter Piracy Guidance – remain a ship owner or Master’s first line of defence. Indeed, the Blue Marlin’s crew have demonstrated how citadels can be effectively employed as part of a layered defence system.”
Beyond this, Longworth outlined several armed security solutions available across the West Africa region, involving the sub-contracting of state naval personnel and deployment of registered security escort vessels, but claimed that using these services requires professional oversight. “Security risk mitigation has to be intelligence and compliance-led. If you don’t understand the threat and you don’t understand relevant regulatory and operational limitations, it’s very easy to get things wrong in West Africa.”
One killed, five kidnapped in pirate attack on offshore support vessel in Nigeria
Pirates armed with machine guns attacked an offshore support vessel offshore Nigeria last Saturday, kidnapped five men, and escaped. A Nigerian navy guard was killed in the attack.
According to a piracy report by ICC Commercial Crime Services (CCS), a division of International Chamber of Commerce, pirates armed with machine guns in two speed boats approached an offshore support vessel underway in waters offshore Brass, Nigeria.
A report by EOS Risk Group stated that there were six pirates in each speed boat and that the OSV vessel was Panama-flagged diving support vessel E. FRANCIS.
The Captain immediately notified the naval escort security boat which maneuvered to engage the attackers. One speed boat closed in from port side of the vessel and crossed the bow, while the other speed boat exchanged fire with the security boat.
Alarm raised, crew proceeded to the engine room and all power was shut down. The pirates boarded the vessel with the aid of an elongated ladder. They broke into the accommodation, vandalized the cabins and took crew belongings and vessel’s properties.
The pirates then proceeded to the engine room, kidnapped five men and escaped. The remaining crews sailed the vessel under escort to a safe anchorage.
CCS also said that one Nigerian Navy armed guard was reported killed in the exchange of fire between the naval security boat and the pirates. The investigation is ongoing.
Nigeria’s waters are some of the most dangerous in the world when it comes to pirate attacks as pirates in Nigeria are often well armed, violent and have attacked, hijacked, and robbed vessels, and kidnapped crews along the coast, rivers, anchorages, ports and surrounding waters.
The most recent such incident reported on Offshore Energy Today was an attack and boarding of an offshore vessel by pirates in December 2018.
Total looking to buy Anadarko’s African assets from Oxy for $8.8 billion
French oil company Total has reached a binding agreement with Occidental to acquire Anadarko’s assets in Africa (Algeria, Ghana, Mozambique, South Africa) for a consideration of $8.8 billion in the event of a successful completion of Occidental’s ongoing bid for Anadarko.
FPSO Prof. John Evans Atta Mills operates on the TEN field off Ghana; Author: SP Mac
Announcing the agreement with Occidental to buy Anadarko’s African assets, Total said on Sunday that the transaction was contingent upon Occidental entering into and completing its proposed acquisition of Anadarko and to approval by the relevant authorities and is expected to close in 2020.
The assets to be acquired include:
Algeria – 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine basin in which Total already owns 12.25%. These fields represented a gross production of 320 kboe/d in 2018.
Ghana – 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143 kb/d in 2018,
Mozambique – 26.5% participating interest and operatorship in Area 1 where a 12.8 million tonne per year LNG project is largely derisked and close to sanction. Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two train project which is expected to come into production by 2024,
Overall, these assets represent around 1.2 billion boe of 2P reserves, of which 70% is gas, plus 2 billion boe of long term natural gas resources in Mozambique. 2018 equity production was 96 kboe/d and is expected to grow to around 160 kboe/d by 2025.
Patrick Pouyanne, Chairman and CEO commented on the announcement: “If completed, the acquisition of Anadarko by Occidental offers us the opportunity to acquire a world class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent.
“We have said consistently that our M&A activities will add value by playing to our strengths and focusing on upgrading our portfolio. This is exactly what we would do here. We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner.
“We would also be able to generate value through adding volumes to our growing LNG portfolio where we are already the 2nd largest private player. We have demonstrated the success of this strategy through the recent acquisitions of Maersk Oil.”
“Total is committed to execute smoothly this transaction, should Occidental be successful in its offer to acquire Anadarko. The proposed transaction is a win/win for Total and Occidental. Total would get access to around over 3 billion boe of resources and Occidental would be able to strengthen its post completion balance sheet by monetizing immediately the international assets of Anadarko.”
Fast-tracking Oxy’s divestiture plan
In a separate statement on Sunday, Occidental said that the proceeds of the sale of these non-strategic assets to Total covers a portion of the cash consideration to fund the proposed acquisition of Anadarko. The sale fast-tracks the divestiture plan by Occidental, delivering on the majority of the $10 to $15 billion of planned asset sales. It also reduces the overall integration demands of the acquisition.
After giving effect to the asset sale, Occidental continues to expect to deliver $2.0 billion of annual cost synergies and $1.5 billion of annual capital reductions from the proposed acquisition of Anadarko.
“We are pleased to have secured this agreement with Total. The $8.8 billion value to be received for Africa represents an attractive value based on our extensive evaluation over the last 18 months. Given our long history of working together productively, I am confident we can execute this sale quickly and efficiently,” said Occidental President and CEO Vicki Hollub.
“Total has extensive experience working in Africa and is well positioned to maximize value from these assets.”
Kosmos to sell down Mauritania/Senegal stake. Books loss despite rising revenues
Tortue Ahmeyim FLNG render / Image source: BP
Kosmos Energy has started a process to sell down its interest in acreage located offshore Mauritania/Senegal. Kosmos also recorded a loss in the first quarter of the year despite increase in revenues.
Kosmos, which discovered the Greater Tortue Ahmeyim field in 2015, is now a partner in the cross-border development located offshore Mauritania and Senegal, following a December 2016 farm-out deal with BP who is now the operator.
In its first quarter 2019 report on Monday, Kosmos said it had started a formal process to sell down its interest in the wider Mauritania/Senegal basin to around 10% with bids expected by the end of summer.
Andrew G. Inglis, chairman and chief executive officer, said: “We remain on track to hit our production growth guidance for the year, while at current prices exceeding the 2019 free cash flow that we set out at our capital markets day in February. Our intention to sell down our position in Mauritania and Senegal to around 10% has generated significant industry interest and we have commenced a formal process, with bids expected by the end of summer.”
For the first quarter of 2019, the company generated a net loss of $53 million compared to a loss of $50.2 million in the prior-year quarter.
First quarter 2019 revenues were $297 million on sales of 5.1 million barrels of oil equivalent (boe). In the first quarter of 2018, Kosmos’ revenues were $127.2 million.
Realized oil and gas revenue, including the impact of the company’s hedging program, was $56.73 per barrel in the first quarter of 2019.
First quarter results included production expense of $80 million, or $15.64 per boe; general and administrative expenses were $36 million, $28 million in cash expense and $8 million in non-cash equity based compensation expense; depletion and depreciation expense was $118 million, or $23.14 per boe; exploration expenses totaled $30 million; and capital expenditures in the first quarter were $110 million.
Total net production volumes during the first quarter of 2019 averaged approximately 59,500 barrels of oil equivalent (boepd) per day.
Greater Tortue Ahmeyim Project
As of early May, all major contracts have been awarded for Tortue Phase 1, and construction activity for the project has started with work on the FPSO.
In April 2019, KBR was awarded the Pre-FEED services contract for Phases 2 and 3 of the Greater Tortue Ahmeyim project. These next phases are expected to expand capacity of this hub to almost 10 MMTPA of LNG for export.
Norwegian seismic players TGS, Spectrum set to merge
Norwegian seismic giant TGS is set to acquire its rival Spectrum. The deal would, TGS says, create a leading provider of 2D and 3D seismic data.
The two companies have agreed on the terms of the transaction which is s expected to be completed as a statutory merger pursuant to Norwegian corporate law between TGS and Spectrum.
The shareholders of Spectrum will receive 0,28 shares of TGS per one (1) share in Spectrum (0,28 exchange ratio), corresponding to 7 TGS shares per 25 Spectrum shares, meaning that the shareholders of Spectrum upon completion of the transaction will receive a total of 16.6 million shares in TGS, representing 13.9% of all issued shares in TGS immediately following completion of the transaction. Fractional consideration shares will be settled in cash.
In addition to shares, Spectrum shareholders will receive a cash consideration of USD 0.27 multiplied by the Exchange Ratio subject to the transaction closing after the ex-date for the TGS dividend payable in Q3 2019 (expected to be early August 2019).
The Exchange Ratio and the cash consideration imply a transaction share price of Spectrum of NOK 61.9 per share (based on closing of the TGS share on May 2, 2019), corresponding to a market capitalization of NOK 3,671 million (USD 422 million) on a fully diluted basis.
Both Boards approve
According to TGS, the transaction is supported by the board of directors of each of the companies, as well as Spectrum shareholders representing more than 34.1 % who have given their support to the transaction and agreed to vote their shares in favor of the deal.
“The transaction will enhance TGS’ position as a leading multi-client geophysical data provider with a 2D and 3D seismic data library covering all major mature and frontier basins world-wide. Spectrum has successfully built a substantial presence in the South Atlantic and other important frontier regions. With TGS’ extensive library and financial robustness, the combined entity will be well positioned to accelerate 3D seismic investment plans in an improving market. Furthermore, the combined libraries will have a scale that will help accelerate TGS’ data analytics strategy,” TGS said
“Spectrum has successfully built a strong position in key offshore basins, particularly in the South Atlantic. The transaction thus fits well with one of TGS’s key strategic goals of growing exposure to this region. Moreover, Spectrum’s library, and in particular the vast 2D coverage, further adds to TGS’s strategy within data analytics, where access to large amounts of data is a key success factor. TGS remains committed to maintain the existing dividend policy and emphasizes that the strong cash position, the combination of two free cash flow positive entities and significant cost synergies, will enable continued industry-leading shareholder returns”, stated Kristian Johansen, Chief Executive Officer of TGS.
“The strategic combination of TGS and Spectrum will form a stronger and better company with a world-class data library, people and opportunities. We look forward to joining forces with TGS. There are strong strategic benefits from combining the companies, and we believe we can enhance our growth as part of a larger combined company,” stated Rune Eng, President & Chief Executive Officer of Spectrum.
“Over the past years, Spectrum has been through a growth phase with particular focus on establishing profitable positions in non-mature exploration basins, especially along the Atlantic margin. TGS´ interest in Spectrum is a manifestation of the solid position built by the Spectrum organization over a long time. Being ready for the next phase of the strategic growth plan, TGS is an excellent match, with its asset-light multi-client strategy and strong balance sheet. Altor Fund IV are proud to be part of creating a leading multi-client company, with a strong presence in all the major basins and superior cash generation capabilities”, stated Pål Stampe, Chairman of the board of Spectrum and partner at Altor Equity Partners, the investment advisor to Altor Fund IV.
Definitive merger documents are expected to be entered into during May, with closing of the transaction expected during the third quarter of 2019 following shareholder approvals in EGM and regulatory clearance, TGS said.
Guyana has approved the previously proposed farm-out of a share in CGX’s two offshore blocks in Guyana to Frontera Energy Corporation.
Frontera will farm into two shallow water offshore Petroleum Prospecting Licenses in Guyana, the Corentyne and Demerara blocks, acquiring a 33.333% share.
The signing bonus of $33.3 million will be paid by way of offset of $24.6 million of debt payable to Frontera by CGX plus a cash payment of US$8.7 million paid by Frontera to CGX.
Frontera has agreed to pay one-third of the applicable costs under the joint venture plus an additional 8.333% of CGX’s direct drilling costs for the initial exploratory commitment wells in the two blocks. CGX is the operator of the blocks.
Professor Suresh Narine, Executive Chairman and Executive Director (Guyana), CGX, said the partnership, along with recently concluded rights offering financing, allows CGX to “significantly clean up its balance sheet and resume with vigor its exploration of the continental shelf in the Guyana basin.”
“As oil and gas begins to play a pivotal role in the transformation of The Cooperative Republic of Guyana, CGX is delighted to be positioned to claim its place in the development of Guyana and this exciting new industry,“ Narine said.
Richard Herbert, Chief Executive Officer of Frontera, said: “We are very excited to be moving forward with our joint venture partner CGX on this important project for both of our companies and for the people of The Cooperative Republic of Guyana. Given the strong track record of discoveries in the adjacent Stabroek block and our own technical studies of seismic and well data within the two blocks, we are very encouraged about the opportunity on both the Corentyne and Demerara Blocks. We look forward to moving into the drilling phase to test the potential of the two blocks in the coming months.”
As for the acreage that is part of the CGX-Frontera deal, the Corentyne block contains 1,125,000 net acres offshore Guyana in shallow water, adjacent to the ExxonMobil Stabroek block. The partners are required to drill the Utakwaaka well by November 27, 2019, with an additional exploration well to be drilled by November 27, 2022. The Utakwaaka well will be drilled by a Rowan jack-up.
The other block, the Demerara, contains 750,000 net acres offshore The Cooperative Republic of Guyana in shallow water, adjacent to the ExxonMobil Stabroek block which has encountered 13 discoveries since May 2015. An exploration well is required to be drilled on the block by February 12, 2021 with a further exploration well by February 12, 2023.
BP takes over disputed offshore block in The Gambia
Oil major BP has struck an offshore exploration deal with the Gambian government in a disputed block previously held by African Petroleum Corporation.
The signing ceremony / Image source: GNPC
The Ministry of Petroleum & Energy of The Gambia has this week announced the official licensing of Offshore Block A1 to BP.
“This license provides the necessary legal framework for the Exploration of the A1 acreage, the eventual development of fields (upon the discovery of hydrocarbons) and the ultimate production of Oil and/or Gas from Block A1,” the Ministry said earlier this week.
Announcing the deal via Twitter on Wednesday BP said:” BP expands growing acreage off West Africa by signing a deal for exploration rights in The Gambia.”
This was confirmed also via social media by State House of the Gambia and Gambia National Petroleum Corporation (GNPC) which quoted BP’s VP Africa New Ventures Jonathan Evans as saying: “BP is very excited to make its re-entry into The Gambia. We were here 30 years ago and now we are back.”
“This is about looking for oil and gas in the deep water where BP would be able to connect the government of the Gambia with our partners at GNPC to explore for oil and if it is successful to develop that oil in the future,” Evans was quoted as saying.
It could take a decade before any revenue comes in
According to the report, BP will first carry out an environmental impact assessment, followed by a two-year period of drilling, exploration, and development of the first well.
Per the State House of the Gambia Facebook post, BP’s Evans also called for cautious optimism, “emphasizing that the explorative stage is just the beginning and the results could go both ways despite the attractiveness of the zone. He added that it could actually take close to a decade before the country accrues any revenue from the venture.”
“It is very important for the viewers to understand that the money wouldn’t start flowing tomorrow. It is probably in ten years’ time before the revenues would start flowing in,” Evans was quoted as saying.
GNPC tweeted:”This monumental achievement represents one of the most important and most valuable agreements our country has signed since independence and has the realistic potential to positively transform our country and bring out significant transformative economic development.
“The journey to this historic event has been two years in the making through the competitive bidding process which started with more than 22 interested International Oil Companies (IOCs).
“Oil exploration has been ongoing in The Gambia since 1960s. In 2016 discovery of Oil on the SNE acreage in Offshore Senegal due to its proximity to Gambian Offshore blocks greatly de-risked the area and brought in renewed interest.”
Disputed area
It is worth noting that the Block A1 along with the Block A4 was previously held by Oslo-listed African Petroleum. The Gambian government in 2017 said it had ended talks with the company for the extension of exploration rights over these two blocks, stripping the company of its rights in the blocks.
Commenting on BP signing the agreement for the A1 Block, African Petroleum this week said:” African Petroleum notes recent media articles stating that BP Plc has signed an agreement with the Gambian government in relation to Block A1 in The Gambia. The Company continues to reserve its rights in relation to the A1 license and will continue with its efforts to protect its interest in the A1 license through the ongoing ICSID arbitration process.”
Apart from The Gambia, African Petroleum is also in a dispute over its (former) blocks in Senegal. Senegal in 2017 awarded operatorship over Rufisque Offshore Profond block to the French oil major Total (later joined by Petronas). The block was previously held by African Petroleum, and the company last year initiated the arbitration process over its rights there.
Chariot on Thursday reported that the CPR by Netherland Sewell & Associates Inc. (“NSAI”) over the satellite prospects adjacent to the Anchois-1 gas discovery in the Lixus Offshore Licence upgraded remaining recoverable resources to in excess of 1 Tcf of gas ( (comprising 2C contingent resources and 2U prospective resources)
The two companies have agreed on the terms of the transaction which is s expected to be completed as a statutory merger pursuant to Norwegian corporate law between TGS and Spectrum.
