Page 18 - AfrOil Week 44

AfrOil NEWS IN BRIEF AfrOil

UPSTREAM a national oil company, enjoys with a number of no need for piling into the seabed for stability.
oil majors.” As announced on September 16, the new
Lekoil in strategic alliance LEKOIL, October 29 2020 development plan is expected to lower the esti-
mated cash-break even oil price for the Hibiscus/
deal with NAMCOR E&P BW Energy acquires jack- Ruche (phase 1 and 2) development to approx-
imately $25 per barrel Brent. With the planned
LEKOIL, the oil and gas exploration and pro- ups to be converted for increased production from Hibiscus/Ruche,
duction company with a focus on Nigeria and the Dussafu license production cost, including
Africa, today announces that it has entered Dussafu developments the Tortue field, is expected to drop to approxi-
into a Strategic Alliance Agreement (SAA) mately $11 per barrel. A final decision to restart
with NAMCOR Exploration and Production BW Energy has concluded on an alternative the Hibiscus/Ruche development is subject to
(Pty) Ltd (NAMCOR E&P) through its subsid- development plan for the Hibiscus/Ruche satel- a lifting of COVID-19 restrictions to allow for
iary, LEKOIL Exploration & Production (Pty) lite field in the Dussafu license offshore Gabon, efficient project execution.
Namibia Ltd (LEKOIL Namibia). utilising a converted jack-up rig to reduce invest- The initial FID approved for the Hibiscus/
NAMCOR E&P, a subsidiary of the national ments and time to first oil. Ruche development was approved in the fourth
oil company (NOC) of Namibia, namely the Subsequently, the Company has acquired two quarter of 2019 with an estimated gross develop-
National Petroleum Corporation of Namibia jack-up drilling rigs, the 2003-built sister-units ment cost of about $660mn for both phases and
Pty Ltd (NAMCOR), seeks to invest capital in the Atla and Balder, from Borr Drilling. BW Energy proven resources (2P) of gross 112mn barrels of
acquisition of interests in well-managed oil pro- will pay a total of $14.5mn for the two units. recoverable oil.
ducing assets in politically stable jurisdictions “A jack-up conversion will enable us to reduce Q3-2020 production update: Gross pro-
as a means of securing long-term sustainability. capital investments by about $100mn compared duction from Tortue averaged 15,449 bpd in
The SAA will leverage the technical capabilities to our previous development plan,” said Carl the third quarter of 2020, amounting to a total
of the respective parties towards the joint evalu- Krogh Arnet, the CEO of BW Energy. “We are gross production of 1,421,329 barrels of oil. BW
ation and acquisition of low-risk quick-to-pro- benefitting from the availability of high-quality Energy completed one lifting in the quarter, real-
duction oil and gas assets across Africa. jack-up units at very attractive prices due to the ising an average price of approximately $46 per
LEKOIL has a long-standing history in current drilling market slump. By re-using facil- barrel. Production cost (excluding royalties) was
Namibia with its holding of an 80% stake in ities, we will also achieve a substantial reduction $19.6 per barrel. This includes approximately
LEKOIL Namibia, providing an entitlement to in field development related CO2 emissions $2mn of additional costs related to the COVID-
90% of income distributed by the Subsidiary. compared to a newbuild platform.” 19 pandemic in the quarter.
LEKOIL Namibia previously owned a 77.5% The seismic reprocessing carried out by BW BW Energy’s share of gross production was
Participating Interest in two Namibian offshore Energy has indicated the potential for a substan- 1,044,676 barrels of oil. Net sold volume, which
exploration blocks (Blocks 2514A and 2514B) tial increase to the Greater Hibiscus oil-in-place is the basis for revenue recognition in the finan-
and continues to maintain a strong relationship volumes, making further developments in the cial statement, was 548,441 barrels, reflecting an
with NAMCOR. Hibiscus/Ruche area highly likely. under-lift position of 299,110 barrels at the end
Lekan Akinyanmi, LEKOIL’s CEO, com- “This development concept offers tangible of the third quarter.
mented: “We are excited by this opportunity to financial, schedule and environmental bene- The company generated a positive cash flow
work with NAMCOR again in evaluating and fits. We have consequently decided to secure a with a cash balance of $145mn at September 30,
subsequently investing and developing high second jack-up at a very attractive price to pre- 2020, compared to $128mn at June 30, 2020.
value assets within Africa. We look forward pare for the future development of the Dussafu BW Energy, November 02 2020
to benefitting from the synergies of this part- license,” said Arnet. “Acquiring a sister unit will
nership as we share our considerable technical enable us to re-use the engineering and project
experience in oil and gas development and pro- plans for a second development with obvious SERVICES
duction in Africa.” synergies.”
Immanuel Mulunga, NAMCOR’s Managing Calculations show that redeployment and PGS expands Angola
Director, added: “We will greatly leverage from conversion projects offer 70%-80% reductions
LEKOIL’s wealth of experience in operating and to greenhouse-gas emissions compared to new MegaSurvey in Lower
managing oil producing assets, as well as its deep built assets due to reduced steel consumption
knowledge of key African markets. At the same and shorter yard stays. Further tangible bene- Congo Basin
time, I believe LEKOIL will benefit from strate- fits are reduced installation cost as a jack-up can
gic commercial relationships that NAMCOR, as “self-install” after mobilisation to the field, with PGS recently expanded the Angola MegaSurvey
to include Block 16 PSTM GeoStreamer data,
increasing 3D seismic data coverage over the
prolific Lower Congo Basin. Block 16 and mul-
tiple blocks in the surrounding area are included
in the 2021 license round, making this an inter-
esting target for future exploration.
Angola Exploration Strategy Approved: In
October 2020, the Angola 2020-2025 Hydrocar-
bon Exploration Strategy was approved under
Presidential Decree No. 282/20. The strategy
aims to boost oil and gas exploration in order to
mitigate the country’s declining production.

P18 www. NEWSBASE .com Week 44 04•November•2020