Page 10 - AfrOil Week 41 2019

AfrOil
NEWS IN BRIEF
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Led by Senior Associate Zion Adeoye, the dis- cussion centered on ways to make energy access more reliable and affordable for Africans and how to better balance supply and demand for key commodities such as oil, natural gas and petro- leum products.
The conversation was joined by leading Afri- can energy executives such as Mohsin Seedat, interim CEO at iGas, Eghosa Oriaikni Mabhena, Head of Africa at Puma Energy, Muzi W. Mkh- ize, Regulator Member for Petroleum Pipelines at the South African National Energy Regula- tor, SAR Managing Director Serigne Mboup, and Igho Charles Sanomi, CEO at the Taleveras Group.
Reminding the audience that Africa’s down- stream sector is marked by outdated refineries and lack of refining capacities, Adeoye led the participants to provide a detailed assessment of the continent’s current supply and demand scenario. “The market reach is diversifying,” declared Seedat. “Oil & gas is becoming more accessible and the retail segment is also evolving.”
Most African oil nations are either revamp- ing and expanding their existing refineries, or building and planning new ones. Such addi- tional capacity will be transforming current industry dynamics, and the panel highlighted the opportunities that will be coming in terms of rebalancing fiscal deficits for big importers of petroleum products, and of further diversifying into petrochemicals and value added products. “Maintaining the balancing of demand and sup- ply for traders is key to shifting Africa’s trade routes,” said Mabhena.
Concluding the discussion, the panelists were all in agreement that a downstream master plan for the whole of Africa is urgently needed to ensure that infrastructure efforts are not ineffi- ciently duplicated, especially on a regional basis. Centurion Law Group, October 12 2019
INVESTMENT
Recommended cash acquisition of Eland Oil & Gas by Seplat Petroleum Development
The boards of Seplat and Eland are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat. The acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
Under the terms of the acquisition, each Eland Shareholder will be entitled to receive: for
each Eland share, GBP 1.66 in cash.
The acquisition values the entire issued and
to be issued ordinary share capital of Eland at approximately GBP 382mn on a fully diluted basis. In addition, Eland shareholders on the reg- ister at the close of business on October 18, 2019, will be entitled to receive and retain the interim dividend of GBP 0.01 per Eland share to be paid on October 31, 2019.
Seplat is a leading independent oil and natu- ral gas producer in the Niger Delta area of Nige- ria and a leading supplier of processed natural gas to the domestic market, fully listed on both the Nigerian Stock Exchange and the London Stock Exchange since April 2014. As a full-cycle upstream oil and gas exploration and production company, Seplat’s focus is on maximising hydro- carbon production and recovery from existing production and development assets, realising the upside potential within the portfolio through focused appraisal and exploration activities and farm-in into new opportunities in Nigeria. Seplat’s existing portfolio comprises of direct interests in five blocks in the Niger Delta area and a revenue interest in an additional block.
Eland is an independent oil and gas company focused on production, development and explo- ration in West Africa, particularly the Niger Delta region of Nigeria. Eland was founded in 2009 with a strategy to deliver exceptional share- holder returns through a combination of devel- opment, production growth and exploration success. In 2012 Eland, through its joint venture company, Elcrest, purchased a 45% interest in OML 40 and in 2014 acquired a 40% stake in a second licence, Ubima. Led by its experienced senior management and operating team, the Eland Group took gross production on OML 40 from 3,338 bpd average daily production for producing days in 2014 to a peak 2018 produc- tion rate of over 31,000 bpd, an increase of over 800%. Eland’s headquarters are in Aberdeen, with additional offices in London, Lagos, Benin City and Abuja.
The cash consideration payable under the acquisition is being wholly funded through a combination of existing cash resources of Seplat and a new loan facility available to Seplat.
Seplat Petroleum Development, October 15 2019
Somalia open for business
with 15 licenses on offer,
says petroleum minister
Rich in hydrocarbons and possessing a favorable geological structure, Somalia holds huge oppor- tunities for investors looking to enter the East African market, said the country’s Minister of Petroleum and Mineral Resources Abdirashid Mohamed Ahmed at the Africa Oil & Power
conference.
“Nowhere is the contribution that the energy
industry can make to civil society and economic development greater than in Somalia,” he said, adding that the sector has the potential to greatly enhance stability and economic development.
On its path to transforming its petroleum industry and attract the attention of new inves- tors, Somalia has made significant progress in recent years. This year, the country passed a new petroleum law which enabled it to make progress in exploration and development, and attract interest from oil and gas majors Exxon- Mobil and Shell.
“My ministry worked successfully with the six federal member states to develop an equita- ble and transparent framework for development, focused on the greater good of Somalia and all its people, whilst ensuring that we are highly com- petitive internationally to attract investment by delivering returns that are consistent with the risks and rewards of developing our off-shore industry,” said the minister.
Eager to demonstrate to the world that Somalia is open for business, the minister said the country is currently on an international roadshow which will showcase the exploration opportunities available in its hydrocarbons sec- tor. “This includes seismic data recently shot by Spectrum covering 20,185 km. The current licensing round is in respect of up to 15 blocks, covering a total area of approximately 7,500 square miles. The bid round will follow shortly after to ensure that the world knows: Somalia is open for business.”
Minister Ahmed also spoke on the attrac- tiveness of the country’s production sharing agreement (PSA) model for offshore oil explo- ration and development – regarding it as being amongst the most attractive to investors in the frontier basins. The PSA provides a highly attrac- tive regulatory fiscal framework that is both competitive and equitable for both the people of Somalia and international oil companies (IOC).
“By equitably linking of royalties and share of revenue closely to the price of oil, the Soma- lia PSA ensures that IOCs can recover their up-front development costs and earn a fair share profit even if oil prices fall, whilst maximising the profit going to the Somalian people,” he said. Africa Oil & Power, October 11 2019
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Week 41 16•October•2019