Page 6 - AfrOil Week 01 2020

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REPUBLIC OF CONGO
UK-BASED Zenith Energy is set to make its first move into Africa via the purchase of a majority stake in AIM-listed Anglo African Oil & Gas Congo (AAOG Congo).
In a statement published late last month, Zenith said it had agreed to pay GBP1mn ($1.32mn) for 80% of AAOG Congo. The latter company’s main asset is Tilapia, a small oilfield in the Republic of Congo (Brazzaville). Equity in Tilpaia is currently split 56% to AAOG Congo, the operator, and 44% to state-owned Société Nationale des Pétroles du Congo (SNPC).
Zenith described Tilapia in its statement as “a highly prospective oil production and devel- opment asset.” It noted that the field was located 1.8km from the coast, but it also pointed out that production wells could be drilled from the shore, using regular land-based drilling equip- ment. Oil from the field can be stored and pro- cessed at a depot not far from Point Noire and then refined at a nearby refinery, it said.
AAOG Congo is currently extracting about 30 barrels per day (bpd) of oil from Tilapia, Zenith noted. It said, though, that production levels were not likely to remain at this level. The
current operator identified a number of poten- tial reservoirs that may hold hydrocarbons during its drilling programme in 2018-2019, it added.
“This has confirmed the transformational potential productivity to be obtained from the licence,” Zenith said. “Recent expert wireline log analysis commissioned by AAOG Congo after drilling activities in the Djeno formation has indicated that reservoir quality is between good and excellent.”
The company’s first task will be to drill a new well, the statement noted. Zenith is likely to begin preparing for drilling work at the TLP- 103C well site in the near future, it added.
Zenith went on to say that it had agreed to compensate AAOG Congo for part of its past exploration work at Tilapia. “SNPC owes AAOG Congo approximately $5.3mn as a result of the
work conducted to date on the licence,” it said. “Zenith has met with SNPC and expects to obtain the full repayment of the aforementioned amount. Upon completion of the acquisition
and repayment of the credit by SNPC, Zenith
will retain 80% of the aforementioned amount.” 
The remaining equity in the site is split between Sonatrach, the operator, with 49%; Repsol (Spain), with 29.25%, and Wintershall Dea (Germany), with 19.5%.
In the meantime, the UK-listed company is continuing talks with Edison to determine whether the parties must amend the SPA to exclude the latter’s Algerian assets. “Ener- gean and Edison are also working to agree an appropriate settlement on the total transaction
consideration to take into account any exclu- sion of the Algerian asset from the transaction perimeter,” it said.
Talks with Algeria are not likely to affect the other assets in Edison’s upstream portfolio, Energean added.
France, Greece, Norway and the UK have all given their green light to the acquisition, it explained, and Egypt and Italy are likely to do the same in the near future. ™
Zenith Energy set to acquire majority stake in operator of Congolese oilfield
The Tilapia oilfield is located offshore Republic of Congo (Image: AAOG Congo)
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w w w. N E W S B A S E . c o m Week 01 08•January•2020