Page 9 - AfrOil Week 25 2022

AfrOil INVESTMENT AfrOil

Wentworth sees the stake in Ruvuma as a good complement to its holdings in Mnazi Bay (Image: Wentworth)

As underscored ahead of the upcoming EGM capital required to meet near-term obligations
by Ferguson, the company’s participation in the which would likely lead to the company default-
pending field development would be subject to ing on its financial commitments and poten-
a cash call of around $6mn to cover Scirocco’s tially relinquish its interest in Ruvuma for zero
share of costs for the planned drilling of the consideration.”
Chikumbi-1 well later in 2022. (Ferguson, along Adding further to the potential uncertainties,
with Scirocco’s board, owns just over 3% of the he noted, the partners also have no guarantee of
company’s shares.) success at the Chikumbi-1 well.
Further funding requirements would also Nor do they know whether they will ulti-
follow, subject to the results of the Chikumbi-1 mately gain approval for a related development
well, to develop the field. The partners aim to or know the extent or timing of such a project,
begin commercial gas production before the he remarked.
end of 2024. “The Ruvuma project involves significant
In his June 21 letter to shareholders, Fergu- technical and subsurface uncertainties, mean-
son noted the potential risks that Scirocco would ing the company would retain material down-
face if it were to retain the Tanzanian assets. side exposure associated with the project, as well
“Should the resolution not be passed, the as the potential long-term requirement for large
company will be required to fulfil its near- capex expenditure, implying further dilutive
term funding obligations on the Ruvuma asset, capital raises in order to maintain our interest,”
which can only be achieved by raising further Ferguson said. “Those factors and the significant
equity, likely in excess of its current market concentration in a single asset lead the board
capitalisation, and at a level of issuance and and management to conclude that this is not an
price that would be highly dilutive for existing appropriate risk/reward profile for Scirocco and
shareholders,” he said. “There are no guaran- does not provide a reasonably deliverable path to
tees that the company will be able to raise the growth or cashflow.” ™

PERFORMANCE
Oil minister says Libya’s crude production

has returned to 800,000 bpd after outages

LIBYA LIBYA’S Oil Minister Mohamed Oun has resumption of development operations at Shar-
reported that the country’s crude production ara, the country’s largest oilfield, and rising out-
rose to 800,000 barrels per day (bpd) last week, put levels at the Sarir oilfield.
moving back up after several weeks of lower pro- Sharara is located in south-western Libya in
duction levels. the Murzuq basin, while Sarir is in the eastern
The increase is a consequence of the part of the country in the Sirte basin.

Week 25 22•June•2022 www. NEWSBASE .com P9