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Company News of Monday, January 21, 2019
Source: Myjoyonline.com
2019-01-21
An offshore oil platform
After a year of rebound and recovery, the old and new hydrocarbon markets in Africa have the opportunity to further strengthen the continent's position as the hottest oil and gas border in the world in 2019.
However, the new year also brings a new set of dynamics and challenges to influence the future of the sector, from presidential elections to megaproject developments, as well as intensifying international competition.
Opening of new African borders
The independents lead the way in exploring and opening new frontiers across Africa. This year will be decisive for the advancement of new exploration and production development projects in West and East Africa.
Developments to be monitored include the development of SNE fields in Senegal, where FEED works are underway and where a final investment decision (FID) is expected this year by Woodside Energy and Cairn Energy; Exploitation of the Amdigh oilfield in Niger, where Savannah Petroleum's $ 5 million early production program is expected to begin shortly; and the opening of the southern Lokichar basin in Kenya by Tullow Oil, where IDF is also expected before the end of the year, as tension increases with the local Turkana community.
A year to confirm Africa as a hotspot for global exploration
Current calls for tenders on major existing and new African hydrocarbon markets will indicate whether Africa will further confirm its position as a new hotspot for global exploration and will manage to attract the necessary investments in its markets. oil and gas areas.
Among the well-established African producers, OPEC members, Gabon and Congo-Brazzaville, each have calls for tenders in progress. The twelfth licensing session for Gabon in shallow and deep waters is scheduled for completion in April 2019 and Phase II of the Congo-Brazzaville license in June 2019.
As both countries struggle to implement their new hydrocarbon codes, the success of these negotiations will indicate whether investors have been convinced by the political reforms that have been developed over the past two years.
Nigeria and Angola, two major African producers and members of OPEC, will launch exceptional and unusual tender offers this year.
Nigeria will auction its gas torch sites as part of the Nigerian flare marketer program, likely after the February general election, and Angola will hold its bid cycle for marginal fields, a result of the two. a new policy adopted in May 2018 by President Lourenço. at the Africa Oil & Power conference in Luanda in June 2019.
As the Nigerian Oil Bill has not yet been signed and ink remains on Angola's new political regime, the two rounds will also be critical in badessing investor interest in the business climate. from both countries.
Ghana, the newest and arguably one of the newcomers, is holding its first round of official licenses which is due to be completed in May 2019, which would have attracted the attention of 16 oil companies, including ExxonMobil, BP, Total and ENI majors.
As a promising new offshore frontier for East Africa, Madagascar is also proposing 44 concessions up to May 2019, which have never been the subject of a call for tenders or explored before. . For a country that has not yet discovered major oil, the current licensing cycle is a gamble test.
FLNG industry struggling in Africa
Following the start of commercial operations on Golar LNG's Hilli Episeyo FLNG ship in Cameroon in June 2018, hopes for Equatorial Guinea to progress rapidly with its own Fortuna FLNG project, which will be FLNG's first deepwater development in Africa. While Fortuna was to change the game for the gas industry of Equatorial Guinea and the rest of the continent, the $ 2 billion project development is stalled due to a lack of funding. And the clock is running since.
The lack of progress on this plan has been so slow that the operator Ophir Energy has been denied the extension of its license allowing it to exploit the R block (from of January this year), which contains the giant gas discovery Fortuna. While Equatorial Guinea's FLNG aspirations seem more uncertain than ever, 2019 will tell whether the country can find the right partners to put the project back on the FLNG map of Africa.
Meanwhile, new entrants into the hydrocarbon phase in Africa are making remarkable progress in developing their own FLNG industry. On December 21, BP finally announced its IDF for Phase 1 of the Great Turtle Ahmeyim Transboundary Development between Senegal and Mauritania, which will involve the installation of a 2.5 MTPA FLNG system.
This is the third FLNG African project to reach the IDF after 2.4MTPA Hilli Episeyo of Cameroon and Mozambique's 3.4 MTPA coral FLNG.
Mega projects in motion
Africa's return to the world oil and gas map is not only due to the vast natural resources of its soils and waters, but also to the fact that the continent is home to very large energy projects to transform future of the industry.
Upstream, the recent intergovernmental cooperation agreement between Senegal and Mauritania and BP's FID regarding its Greater Tortue Ahmeyim cross-border development bodes well for the future of the West African hydrocarbon industry.
The project aims to extract the 15 billion cubic feet of gas that should be contained in the Turtle gas field, located at a depth of 2,850 meters.
However, the ability of Senegal and Mauritania to resolve their differences to ensure more sustainable development of their offshore reserves and facilities around the MSGBC basin is a factor to watch.
African mega-gas projects are not wholly owned by the west coast of the continent. Mozambique has launched two flagship projects that have placed the nation of southern Africa on the LNG map.
Following the launch of the Coral South FLNG project by ENI in June 2017, an FID project is now expected in the coming months for the LNG project in Mozambique by Anardarko, an onshore LNG project initially consisting of two LNG trains totaling 12.88 MTPA intended for the export of gas. extracted from Offshore Area 1, containing approximately 75 billion cubic feet.
Nigeria, the largest oil producer in sub-Saharan Africa, has also launched major oil development projects in 2019. Last year, already, the FPSO Egina, a value of $ 3.3 billion, was launched in Nigeria, where production officially began in the early days of 2019. to peak at 200,000 barrels. IDF is now expected on Shell's offshore field at Bonga Southwest in Nigeria early this year, a multi-billion dollar development expected to reach 180,000 bpd.
International claimants and suitors
As Africa strengthens its position at the center of global transformations, it is increasingly becoming the playground for international actors wishing to take advantage of the continent's vast resources.
While China has affirmed its position on the continent, will the new continental dynamics lead the Asian giant to change its investment or portfolio strategy? As Russia's intentions on the continent become clearer, will the first Russia-Africa summit this year result in more concrete agreements with Russia on the continent? At the same time, will the US Prosper Africa initiative launched in December 2018 address both growing international competition and declining US influence on the continent?
A complex energy diplomacy dilemma for OPEC in Africa
Consisting of a majority of African members, since the accession of the Republic of Congo in June 2018, the evolution of relations between OPEC and the continent, which strives to manage the overabundance of the African Union. global supply, will require skilled diplomatic ingenuity.
On the one hand, the main African producers and OPEC members (Algeria, Libya, Nigeria, Angola and Congo-Brazzaville) are trying to increase their national production, which makes it increasingly difficult for the Organization to negotiate its production cuts.
On the other side, the continent is also home to a multitude of upcoming oil producers, such as Senegal, Kenya or Uganda, or returning former players like South Sudan, some of which are part of the OPEC Declaration of Cooperation, whose production increases or increases another layer of complexity in the formulation of OPEC's overall oil price management strategy.
Increased African production by OPEC countries and non-OPEC countries only complicates OPEC's maneuvering capabilities and adds to the dilemma of creating a stable, investment-friendly pricing environment. while avoiding a worsening of the glut of supply that would drive down prices.
Africa's largest oil producers voted
Among the series of elections that will take place this year on the continent, from Senegal to Mozambique, none will be more important for the African oil sector than that of Nigeria in February.
The Nigerian presidential election is shaping the future of the sector, not only because Nigeria is Africa's largest oil and gas producer, but also because what is happening in Nigeria is affecting the rest of the subcontinent.
While Muhammadu Buhari, candidate for reelection, and his ally become rival, Atiku Abubakar, pledged to sign the Nigerian oil industry bill, the future president's ability to bring order in his business and having it pbaded quickly will greatly influence investment in the hydrocarbon sector in Nigeria for years to come.
The north, Algeria and Libya are also entering an election year, the Libyan general elections of 2019 being fixed for the first half of the year and Algeria for April. Both countries are in the process of transformation.
The Libyan authorities plan to more than double the country's production, which is expected to reach 2.1 million bpd by 2021, provided that the policy does not alter the oil governance and the work of the National Oil Company. With the son of Muammar Gaddafi, Saif al-Islam Gaddafi is about to stand for election and the country still divided between West and East, the maintenance of stability required by investors will prove difficult.
In Algeria, where a wave of reforms is shaking the entire hydrocarbon sector, the elections should maintain a relative status quo, at least politically.
The country's national oil company, Sonatrach, has launched an ambitious transformation strategy that will enable it to invest $ 56 billion over the next four years and internationalize its operations in the world's major energy markets. By 2019, the state giant and the largest company in Africa could still extend south of the Sahara.
Angola continues its reform path
Since taking office in the summer of 2017, Angolan President João Lourenço has implemented an optimistic reformist program that is radically transforming the governance of the country's oil and gas sector. Angola is reforming rapidly, but will market forces allow changes to occur at this rate and produce the desired results for the government?
As international investors seem to think, Total and BP have signed important agreements to strengthen their activities in Angola in recent months, 2019 will tell if the international oil industry is convinced of the return of Angola as a competitive African border or not.
In order to showcase the work done by Sonangol and the Angolan government to generate more investment in the country's oil and gas industry, Angola supports an international conference organized by Africa Oil & Power in Luanda from 4 to 6 June 2019, where will launch the auction round on the field of marginal fields of Angola.
It will be the first official investment roadshow in Angola under the current administration and is expected to unveil a new set of investment reforms and commitments.
The march of South Sudan towards peace
The major advance in South Sudan, on which the whole economy is based, is that of the peace agreements. The Sudanese and South Sudanese authorities have demonstrated time and time again their commitment to the peace process, which has remained largely peaceful.
However, will the peace agreements result in investment pledges and investments in South Sudan 's economy this year? Some signals suggest that the South African Central Energy Fund is paying $ 1 billion to South Sudan by the end of last year, but markets remain skeptical and observers will remain pragmatic and will wait to see how the transition is peaceful. will be managed and how oil production will resume concrete movements.
A year to improve market access for producers in East Africa
Uganda is expected to join the club of African oil producers in the early 2020s. Efforts are underway to set up an adequate infrastructure for the disposal of oil produced in the Lake Albert basin.
The project seemed to be a positive step forward when Uganda and Tanzania exchanged the intergovernmental agreement on the crude oil pipeline of East Africa, the United States, and the United States. a length of 1,443 km, in May 2017.
However, the partners in the construction of the pipeline, the large French group Total, the Chinese companies CNOOC and Tullow Oil, have not yet made the final decision to invest in the project. At the same time, agreements with host governments are to be signed in January, but delays in reaching the financial agreement with the pipeline have already delayed Uganda's oil production ambitions. between 2020 and 2021. The pipeline is crucial for the future integration of the East African community and a positive record of joint planning, financing and implementation of flagship energy projects in the region.
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