Nigeria approves Oando, ConocoPhillips transaction

Oando Energy Resources (OER) reported a receipt of the consent of the Honourable Minister of Petroleum Resources of Nigeria for the acquisition of the Nigerian Upstream Oil and Gas Business of ConocoPhillips for a total cash consideration of $1.65 billion subject to customary adjustments (the “ConocoPhillips Transaction”).
 
Further to the receipt of consent of the Honourable Minister of Petroleum Resources, OER and ConocoPhillips are now positioned to complete the ConocoPhillips Transaction.
 
Commenting, Mr. Wale Tinubu, Chairman, OER said “We are delighted to receive the  approval of the Honourable Minister of Petroleum Resources for the completion of the acquisition. It has been a long journey, wherein we kept faith with our strategy and executed every milestone diligently. This acquisition satisfies our criteria for assets in production, as well as excellent appraisal and exploration prospects. The coast now stands clear for us to immediately complete the acquisition”.
 
OER will now work with ConocoPhillips towards completing the acquisition by the long stop date of June 30, 2014 or shortly thereafter.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Libya seeks to avoid oil-market disruption as supplies rebound

Libya, the north African country whose crude exports collapsed last year amid protests and political feuding, will seek to revive shipments in a way that avoids oil-market disruption, its governor for OPEC said.

Protesters in the east of the country with Africa’s largest oil reserves reopened two ports at the start of this month, ending a yearlong blockade that helped decimate the nation’s supplies. Brent crude, the global benchmark, slid about 3.3% since the rebels said the terminals would restart.

“Our return to the market will be gradual and in coordination with our fellow member countries,” Samir Kamal, the nation’s governor for the Organization of Petroleum Exporting Countries, said by email yesterday, July 8. Libya will take the same gradual approach toward sales of oil it has stored at the two terminals, he said.

Crude surged last year when the protesters halted four Libyan ports in an attempt to change how the country’s oil wealth is distributed. Two of those terminals resumed earlier this year, and the rebels said at the start of this month that they halted a blockade of Es Sider and Ras Lanuf, the largest and third-biggest. Neither has so far shipped cargoes.

Libya is producing 325,000 bpd of crude as of today, National Oil Corp. spokesman Mohamed Elharari said by phone today from Tripoli. A pipeline from the Sharara oil field resumed, allowing the deposit that can pump 340,000 bpd to restart.

Output will rise toward 1 MMbpd as Es Sider and Ras Lanuf terminals resume exports, according to estimates from Petromatrix GmbH, a Vienna-based consulting firm.

Libya ended force majeure at the ports on July 6, according to National Oil. Operators have been instructed to evaluate their facilities in order to resume operations, Kamal said.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Tullow Oil gives East Africa operational update

Tullow Oil’s partner in Blocks 10BB and 13T in Northern Kenya (Tullow 50% operated interest), issued the following operational update. Ngamia-2 appraisal well encounters up to 39 m of net oil pay and 11 metres of net gas pay.

“The PR Marriott 46 rig has recently completed the Ngamia-2 well which was drilled 1.7 km from the Ngamia-1 discovery well to test the northwest flank of the prospect. The well encountered up to 39 m of net oil pay and 11 m of net gas pay and appears to have identified a new fault block trap north of the main Ngamia accumulation. The reservoirs were high quality with more than 200 m of net reservoir sands with good permeability inferred from MDT sampling. The well has been suspended for testing and the rig will continue to drill up to 4 additional appraisal wells in the Ngamia field area for an extended well test program. A 3D seismic program is currently being concluded over the field area which should allow for detailed mapping of the fault trends.”

Agete-1 well test flows at 500 bopd .“The SMP-5 rig has completed testing operations on the Agete-1 well where it confirmed the Auwerwer pay previously released, the well flow rate was tested at 500 bopd. This rig is now currently on location at the Ewoi-1 discovery and is preparing to test, after which it will continue to be used to test discovery and appraisal wells in this basin.”

Additional drilling and testing operations in Kenya and Ethiopia “The Weatherford 804 rig is currently drilling the Agete-2 downdip appraisal well and will then move to drill the Etom prospect which is 7 km north of the Agete discovery along the basin bounding ‘string of pearls’ trend.

The Sakson PR-5 rig is drilling the Amosing-2 downdip appraisal well, with a planned sidetrack, and will then move to test the North Kerio and Turkana Central Basins by drilling the Kodos and Epir prospects respectively.

Finally, the Exalo 205 rig is drilling ahead on the Gardim prospect, located in the Chew Bahir basin in the South Omo block in Ethiopia. The partnership is in discussions on the next prospect to be considered for drilling in this block.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Africa Oil reports New Gas discovery at Sala prospect in Block 9 in Kenya

Africa Oil reported that it has made a gas discovery in Block 9 onshore Kenya. The Sala-1 drilled a large 80 sq km anticlinal feature along the northern basin bounding fault in the Cretaceous Anza graben and encountered several sandstone intervals which had oil and gas shows. The well was drilled to a total depth of 3030 m and petrophysical analysis indicated three zones of interest over a 1000 m gross interval which were subsequently drill stem tested. An upper gas bearing interval tested dry gas at a maximum rate of 6 mmcfpd from a 25 m net pay interval.

The interval had net reservoir sand of over 125 m and encountered a gas water contact so there is potential to drill up dip on the structure where this entire interval will be above the gas water contact. A lower interval tested at low rates of dry gas from a 50 m potential net pay interval which can also be accessed at the up dip location. It should also be noted that there were oil shows while drilling and small amounts of oil were recovered during drilling and testing which indicates there may be potential for oil down dip on the structure. Africa Oil is the Operator of Block 9 with a 50% working interest. Marathon Oil Kenya has the remaining 50% interest.

An appraisal plan to follow up this discovery is currently being evaluated by the partnership in consultation with the Kenyan government. Plans being discussed include an up dip location to confirm the a real extent of the gas zones tested where the full net sand interval can be intersected above the gas-water contact. The partnership is also considering a down dip appraisal location to test an on lapping stratigraphic wedge on the flanks of the structure which is of the same age as the zones in the nearby Ndovu-1 well which had oil and gas shows.

In addition, the company is considering drilling an appraisal well on the crest of the large Bogal structure to confirm this large potential gas discovery which has closure over an area of up to 200 sq km. The gross best estimate of prospective resources for Bogal are 1.8 Tcf of gas based on a third party independent resource assessment. The company currently has two optional slots on the Great Wall drilling rig used to drill the Sala-1 well that are available for this appraisal program.

The company believes there is a very strong market for gas development in Kenya and have already engaged in discussions with power companies and the government to potentially fast track a gas to power project that could add significant value and create benefits for the people of Kenya. In 2013 the Government of Kenya launched its "+5000 MW by 2016 - Power to transform Kenya" initiative with ambitious plans to increase Kenya' s power generating capacity by 5,000 Mega Watts in 40 months. This plan includes significant generating capacity fuelled by imported LNG and coal which are currently being bid. The discovery of indigenous gas in significant quantities in Block 9 has the potential to offer a far more cost effective fuel source for these power projects that will also provide positive environmental and local development benefits. Significant interest exists with development agencies and commercial independent power producers to partner on power developments in Kenya.

The Company is also gave an update on additional exploration and appraisal activities in Kenya and Ethiopia.

In Kenya, the Company has 4 additional rigs active in the South Turkana Basin where oil discoveries have previously been at Ngamia, Twiga, Agete, Amosing, Ekales, Etuko and Ewoi.

The PR Marriott 46 rig has recently completed the Ngamia-2 well which was drilled 1.7 km from the Ngamia-1 discovery well to test the northwest flank of the prospect. The well encountered up to 39 m of net oil pay and 11 m of net gas pay and appears to have identified a new fault block trap north of the main Ngamia accumulation. The reservoirs were high quality with more than 200 m of net reservoir sands with good permeability inferred from MDT sampling. The well has been suspended for testing and the rig will continue to drill up to 4 additional appraisal wells in the Ngamia field area for an extended well test program. A 3D seismic program is currently being concluded over the field area which should allow for detailed mapping of the fault trends.

The SMP-5 rig has completed testing operations on the Agete-1 well where it confirmed the Auwerwer pay previously released, the well flow rate was tested at 500 bopd. This rig is now currently on location at the Ewoi-1 discovery and is preparing to test, after which it will continue to be used to test discovery and appraisal wells in this basin.

The Weatherford 804 rig is currently drilling the Agete-2 downdip appraisal well and will then move to drill the Etom prospect located 7 km north of the Agete discovery along the basin bounding ' string of pearls' trend.

The Sakson PR-5 rig is drilling ahead on the Amosing-2 downdip appraisal well, with a planned sidetrack, and will then move to drill the Kodos and Epir (formerly Aze) prospects, which will be the first exploratory wells to test the Kerio Basin, located immediately adjacent to the prolific S. Lokichar basin.

Finally, the Exalo 205 rig is drilling ahead on the Gardim prospect, located in the Chew Bahir basin in the South Omo block in Ethiopia. The partnership is in discussions on the next prospect to be considered for drilling in this block.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Libya’s biggest oil port may open in August, rebels say

Libya’s largest oil-export terminal, the port of Es Sider, may re-open in August after the North African nation’s new parliament takes office, said a spokesman of the rebel group that shut the facility almost a year ago.

“It’s possible to solve all issues and get to an agreement to re-open Es Sider and Ras Lanuf when the new parliament starts working, God willing, after Ramadan,” Ali Al-Hassy, a spokesman of the Executive Office for Barqa, said by phone from eastern Libya.

Ras Lanuf is the second of two ports still under control of the Barqa rebels. The Muslim fasting month of Ramadan started today, June 29, in Libya and will finish with the Eid El Fitr holiday at the end of July.

The rebels’ Executive Office for Barqa seeks self-rule for the region known also as Cyrenaica. It occupied oil ports in eastern Libya at the end of last July, demanding an oil-revenue sharing agreement to make up for the neglect the area experienced under Muammar Qaddafi’s 42-year rule.

Libya, with Africa’s largest oil reserves, is now producing about 300,000 bpd, or a fifth of its output before Qaddafi was overthrown in 2011. The loss of the country’s oil production has boosted the price of Brent, a benchmark for half the world’s traded crude.

Deal

Under an agreement reached on April 6, the Barqa federalists handed over control of Zueitina and Hariga, two of the four oil ports they seized a year ago. In return, they received an amnesty and the payment of salaries for defectors from Libya’s Petroleum Facilities Guard who joined the rebels.

The accord calls for a second round of talks aiming at a comprehensive deal that would allow the re-opening of the two remaining ports, Es Sider and Ras Lanuf.

The Barqa federalists last month threatened to cancel the April agreement in protest over the appointment as prime minister of Ahmed Maiteg, whom they see as allied with the nation’s Islamists. His appointment was later withdrawn, and elections were held last week for a new parliament.

Danske Bank on June 19 raised its third-quarter forecast for Brent crude to $107 a barrel, from $104, on the turmoil in Iraq and the protests at oil sites in Libya. “We expect the oil price to stay in the $108-114 a barrel range over coming months, as it will take some definitive progress in Iran and Libya for the oil price to break below this range,” it said.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.