oil - Afrikan Heroes

Kenya Has Just Sealed Its First Oil Export Deal Worth Sh1.2 Billion

August 3, 2019

Time for early investors and startups in Kenya to leech onto the country’s blossoming petroleum industry! It is now safe to say that Kenya is now an oil-producing nation in the world, the only nation in the whole of East Africa, after South Sudan to actually export oil.

The country has just sealed its first oil export deal worth Sh1.2 Billion ($11.6m). With 60,000 to 100,000 barrels per day, Kenya is set to displace either Ghana, Brunei or Chad in the ranking of oil-producing and exporting countries by production capacity.

“We are now an oil exporter. Our first deal was concluded this afternoon with 200,000 barrels at a price of 12 million US dollars. So, I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we eliminate poverty,” Kenyan President Uhuru Kenyatta said

Here Is The Deal

This deal which is the first-ever in the whole of Kenya’s history saw Kenya selling off 200,000 barrels of oil at a price of Sh1.2 billion ($12m).
Kenya discovered commercial oil reserves in its Lokichar basin in 2012 and Tullow Oil estimates the basin to contain an estimated 560 million barrels in so-called 2C proven and probable oil reserves.
Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production.
Tullow Oil is a multinational oil and gas exploration company founded in Tullow, Ireland with its headquarters in London, United Kingdom. It has interests in over 150 licenses across 25 countries with 67 producing fields and in 2012 produced on average 79,200 barrels of oil equivalent per day.

**Source: Statista 2019; Oil Production in Africa from 2001 to 2018 (in 1,000 barrels per day)**

The government and Tullow Oil had expected to start exporting crude under the Early Oil Pilot Scheme (EOPS) by June this year but that appeared unlikely with the company only having trucked about half of the amount that will be needed for the first shipment.
In May, Kenya’s Ministry of Petroleum said about 88,000 barrels of oil had so far been trucked to Mombasa and was targeting to accumulate 200,000 barrels that would form the first export cargo.
The oil that has been ferried to Mombasa was produced in 2015 during an extended well testing exercise. By end of March, Tullow had shipped all the oil stored in Lokichar and has been setting up an Early Production Facility, which will produce 2,000 barrels a day.

Currently, major oil producers in Africa include Nigeria (0.0449), Libya (0.0101), Egypt (0.0418) and Algeria (0.0913), producing a total of 0.1881 trillion cubic feet of gas cumulatively which is 5.4 percent of the world’s total production.

In 2018, Africa’s total oil production amounted to around 8.19 million barrels of oil per day.

Africa’s production rate is, however, decreasing at a rate of 1.1 percent per annum. Africa’s consumption rate is at 138.2 billion cubic meters at a growth rate of 1.4 percent. It would take Africa 68 years to completely deplete its reserves.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

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Nigeria may not survive post-oil world economy – SBM Intelligence report

July 23, 2019

With most part of the world trying to move away from oil to adopt alternative and renewable energy, Nigeria’s future in the post-oil world looks rather bleak, according to SBM Intelligence. The Nigerian economy is heavily dependent on its oil exports.

According to the Nigeria Bureau of Statistics, crude oil exports contributed N3.376tn or 74.45 percent to Nigeria’s total exports in the first quarter of 2019. The Nigerian government has spoken of its plan to diversify its economy, in order to be less dependent on oil but there have been very little results.

SBM Intelligence, an organization devoted to the collection and analysis of information, in a report titled Energy Revolution and Economic Disruption, notes that the inability of Nigeria to innovate as the world heads towards the post-oil economy could spell doom.

“The federal government of Nigeria remains hopelessly addicted to crude oil revenues, and rather than innovate or truly revolutionize its economic base, the political elite only seems capable of focusing on areas in which some small amounts are already demonstrably available and then increasing taxes in those areas,” SBM said in a special report released last week.

Nigeria is struggling to grow its own food and it is feeling the crunch of collapsing oil price with the success of unconventional oils – US Shale oil and Canada’s Oil sands – in the market. After exiting a recession, the country has been seen its debt profile rise sharply with the country needing to borrow to fund its budget.

According to SBM intelligence, the Shale Revolution has both an economic and a geopolitical impact. “The United States of America has displaced Saudi Arabia as the world’s largest oil producer, and now accounts for 19% of global output.”

The US currently produces 15 million bpd, just 7 million shies of the combined output of Saudi Arabia and Russia, both second and third respectively in oil production while Nigeria produces 2.32 million bpd, according to the NNPC.

The demand for Nigerian crude oil has diminished with the US (formerly Nigeria’s largest buyer) cutting most of its oil imports. Oil exports from Nigeria to the United States fell from 36.4 million barrels in July 2010 to just 5.6 million barrels in January 2019, according to the U.S. Energy Information Administration.

“The Middle East and Nigeria used to be critical to America’s energy security. They no longer are. 15 years ago, the US used to be the top destination for Nigeria’s crude oil exports, today they barely buy anything from Nigeria, and India has replaced the US as Nigeria’s top energy importer,” the SBM report said.

However, India’s status as Nigeria’s top energy importer could change with the competition in the energy market. Saudi Arabia’s crown prince, Muhammad bin Salman’s visit to India in February 2019 is of critical importance, with the world’s second-largest producer of oil looking to capture the Indian market.

The energy revolution is also heavily impacted by the push for clean renewable energy with climate change concerns. Most economies across Europe and America are now investing heavily in the development of mass-produced electric cars. Going forward, strategic partnerships with Europe and America would be less about exports and more about migration and security.

BloombergNEF projects that the number of electric vehicles in the world will increase from 1.1 million in 2017 to 11 million units in 2025. That number is expected to increase to 30 million units “in 2030 as they become cheaper to make than internal combustion engine cars.”

“Some nations will survive the post-oil economy in much better shape than others, and as things currently stand, Nigeria cannot count itself in the former category.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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Africa Oil Week turns up heat on deal-making with new features for 2019

July 17, 2019

This year organizers have crafted a programme that puts deal-making front and centre of the agenda for the 1500+ delegates.

For over twenty-five years, Africa Oil Week has acted as a central hub for decision-makers in the African oil and gas sector, bringing together delegates from Marrakesh and Maputo to Lagos and Lusaka in Cape Town each November. Following consultation with two expert advisory boards, and countless interviews with the industry, this year organizers have crafted a programme that puts deal-making front and centre of the agenda for the 1500+ delegates.

In 2019, AOW will include the following dynamic features designed to foster business development:

Ministerial & VIP Programme

Projected to host 20+ government Ministers and 150+ CEOs, VPs and Investors in 2019, the aim of the Ministerial & VIP Programme is to act as a catalyst which moves projects towards Final Investment Decision. With a dedicated team on hand to facilitate introductions, delegates taking part in the Programme will be fast-tracked to the best opportunities in the African upstream.

In the words of Kael O’Sullivan, Director of Investor and VIP Relations: “A key aim of ours for the 2019 Summit is to ensure that capital is connected to the right opportunities. The Ministerial & VIP Programme is key to these efforts and will bring together the top 150 decision-makers and influencers in the African upstream space for investment and deal-making. This core group, we believe, will play a major role in the future development of the sector and, by extension, the economic development of Africa.”

Prospect Forum

After a well-received 2018 launch, the Prospect Forum returns to AOW this year with three days of insights into the most exciting plays across Africa. The data revealed at the forum will help define where Operators and Geophysical companies allocate their investments and attention during the coming years. Expect to hear from Independents including Steve Jenkins, Chairman of Savannah Petroleum, Edward van Kersbergen, Founder and Chairman of Mazarine Energy and global geophysical players including TGS, PGS, and ION.

Bidding Rounds

Aiming to match the success of last year’s Ghanaian, Congolese (ROC) and Sudanese licensing rounds, which resulted in the issue of multiple shallow-water licenses, it has been confirmed that further African nations will be offering licenses at the conference this year. Further information will be released soon.

Wells to Watch

The 26th Africa Oil Week will unveil the first-ever Wells to Watch insight series, which will give delegates access to brand-new proprietary information about the most promising prospects on the continent. Highlights include Scott Macmillan, Managing Director of Invictus Energypresenting Zimbabwe’s SG 4571 and Alexander Mollinger, COO of Discover Exploration presenting Comoros blocks 35, 36 and 37.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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AFC provides US$100 million to Aker Energy’s Deep Water Offshore Oil Project in Ghana

Africa Finance Corporation, the leading infrastructure solutions provider in Africa, announces today it has financed Aker Energy A.S. (“Aker Energy”), a subsidiary of Aker ASA, one of the highest-quality-rated companies in the Norwegian market and a leader in oil, gas, and industrials.

AFC’s support is through investing in US$100 million of convertible bond notes with an intention to participate in follow on fundraising activities. The funds will be used by Aker Energy to finance the development of the Deepwater Tano Cape Three Points block (“DWTCTP” or the “Asset”), a block offshore Ghana containing multiple oil fields.

The Asset is owned by joint venture partners, including Aker Energy (50%), Lukoil (38%), Fueltrade (2%) and a 10% carry for the Ghana National Petroleum Corporation (“GNPC”), wholly owned by the Government of Ghana. The Pecan field, which is the most appraised in the DWTCTP block and the field to be developed in the first phase, is an oil field estimated to contain reserves of about 334 million barrels of oil equivalent.

This investment is aligned with AFC’s overall natural resources strategy, which entails building a portfolio of value-added assets across the Energy value chain. By taking an early equity financier role in operational or near-operational upstream assets. AFC can enhance the revenue potential of African states to generate revenue required for investment in infrastructure and social services for its growing populations.

This investment also marks the beginning of AFC and Aker’s mutually beneficial relationship in the exploration and production sector across the African continent; AFC will offer support to Aker, open new opportunities, and mitigate potential geopolitical risks. Aker, with its proven track record of delivering complex deepwater projects on time and budget, and a network of affiliates, such as Aker Solutions, leading subsea equipment, and services provider, is an ideal partner for AFC, as it seeks to broaden its partnerships with developers within the natural resources sector.

The Republic of Ghana (Ghana) which became an AFC sovereign shareholder in 2018, having acceded to membership in 2011, will benefit from this project through increased revenue and government royalty and taxation income. Deepwater Tano Cape Three Points field is one of Ghana’s principal hydrocarbon assets and is expected to contribute to Ghana’s near term target of an annual production volume of 500,000 barrels of oil equivalent per day.

Samaila Zubairu, President & CEO of AFC, commented on the announcement: “This is an exciting milestone for Africa Finance Corporation – we have partnered with the

subsidiary of one of the most highly respected international oil, gas, and industrials companies to support its first project in the African market as an operator. This is an opportunity for AFC to invest alongside a technically and financially strong sponsor that requires project development expertise and public sector advice in Africa, both of which AFC is ideally placed to offer.”

Jan Arve Haugan, CEO of Aker Energy, added: “We value AFC’s vote of confidence by collaborating with Aker Energy and the commitment to further strengthening this partnership going forward. We believe AFC will be a valuable partner to help Aker Energy navigate the opportunities and challenges that lies ahead of us.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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Centurion CEO speaks to Chinese Oil and Gas Investors on African opportunities

July 3, 2019

A team of attorneys from Centurion is in China this week to participate in the EG Ronda Licensing Roadshow being held today and tomorrow at the Kempinski Hotel Beijing. Led by CEO Nj Ayuk, the team is meeting with several high-profile Chinese executives and energy companies seeking to invest in sub-Saharan Africa.

The roadshow is organized by the African Energy Chamber on behalf of Equatorial Guinea’s Ministry of Mines and Hydrocarbons. With the biggest names amongst the Chinese energy companies attending, including companies such as CNPC, PowerChina Group, Sinopec, Sinochem, CNOOC, Shenergy, CMEC, and China Minmetals Corp, Centurion has had the opportunity to discuss considerable deals in several African oil markets.

“Centurion’s presence in China for the EG Ronda Roadshow is a mark of our commitment not only to Equatorial Guinea but to the promotion of Chinese investments across Africa,” declared Nj Ayuk from Beijing. “China is serious about investing in Africa, and Chinese investors and companies are looking for reliable African legal advisors and partners to efficiently do business in our continent. This represents billions of dollars of investment ready to support the development of the African oil industry.”

Centurion has always been at the forefront of channeling foreign investments into Africa’s oil & gas value chains. The firm has advised on the most recent PSCs being signed in the continent and continues to be part of landmark deals and projects in West and Eastern Africa.

The firm has a specific desk dedicated to Chinese companies and investors and has been increasingly working in diversifying the flow of investments coming into Africa’s extractive industries, working with new partners from Russia, Turkey, and the Middle East.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.