oil review africa 4 2014

Pipelines - modifying the

Chad-Cameroon pipeline



Oil Review

Africa

- Issue Four 2014w

ww

.oilreviewafrica.com

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing Europe m10, Ghana CD18000, Kenya Ksh200, Nigeria N330, South Africa R25, UK £7, USA $12

www.oilreviewafrica.com

African finance forenergy projects

Equatorial Guinea -regrouping or graspingfor straws?

Gabon’s watershedmoment

Fire safety: preventingthe unthinkable

Extending field life and increasing recovery rates

The changing face ofremote oilfieldcommunications

Nigeria’stransformation agenda

Volume 9 Issue Four 2014

Wale Tinubu, chairman of OandoEnergy Resources. See page 5.

■ Geology - p22 ■ Gas - p24 ■ E&P - p26 ■ Technology - p34

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

ORA 4 2014 Cover Spine_cover.qxd 7/24/2014 5:08 PM

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Oil Review Africa Issue Four 2014 3

Editor’s noteINFRASTRUCTURE INVESTMENT IS critical for the economic and socialdevelopment of the African continent. In this issue we look at problems facedby project promoters and potential lenders. Sources of funding for energyprojects in Africa are diversifying to include local, foreign, public and privatesector investment, and it is increasingly apparent that the private sector’scontribution to financing energy projects in Africa over the coming decades willincrease whilst that of government will diminish.

We look at Equatorial Guinea, where arresting mature decline would havebeen the best way to start staging a comeback for the tiny hydrocarbon nation.

In fact, in many more established oil-producing nations of Africa, renewedbrownfield investment in EOR techniques is needed. Luckily, the ability ofoperators to extend the life of their fields has never been greater. Reservoirmodelling is one such technique and this has a crucial role to play in unlockingreservoir value, extending field life and increasing reservoir recovery.

One area in which oil companies will never cut corners is safety. This issuelooks at the fire safety challenge and innovative new solutions to prevent theunthinkable. We also look at the safety challenges in dealing with H2S andworking in irrespirable environments around the world.

O3b network satellite fleet image.

ColumnsIndustry news and executives’ calendar 4

AnalysisEnergy investment – a rising trend 10A special report from the International Energy Agency sees an increasing role forgovernments in shaping investment decisions; in Africa the main focus willcontinue to be on development of oil resources.

African FinanceSources for funds for African energy projects 12A look at the fiscal challenges facing the banking sector in financing Africa’scurrent and future energy projects.

Country FocusNamibia 15Creating a tectonic atlas for Nambia and western South Africa.

Equatorial Guinea 16Regrouping or grasping for straws?

Gabon 18Gabon’s watershed moment.

Exploration & ProductionNews and developments 26The latest exploration and production news from around the region.

SafetyFire safety 34Fire safety challenge spurs oil and gas industry to find innovative new solutions.

Meeting African onshore and offshore H2S challenges 38A look at the safety challenges in dealing with H2S and working in irrespirableenvironments around the world.

TechnologyExtending field life 42The battle to prolong oil flow from Africa’s mature fields.Reservoir modelling has a crucial role to play in unlocking reservoir value,extending field life and increasing reservoir recovery.

NigeriaMinistry of Petroleum Resources: Live wire of transformation agenda 46A look at the giant strides being made by the ministry under Alison-Madueke inrespect of the strategic objectives of the industry.

Information TechnologyThe changing face of remote oilfield communications 51In the second of two articles on the changing face of oilfield data and voicecommunications in remote locations, Phil Desmond asks whether satellitenetworks can cope with growing offshore demand.

TD Williamson was tasked withexecuting the entire Chad-Cameroonpipeline modification project.

African finance forenergy projects

Equatorial Guinea -regrouping or graspingfor straws?

Gabon’s watershedmoment

Fire safety: preventingthe unthinkable

Extending field life and increasing recovery rates

The changing face ofremote oilfieldcommunications

Nigeria’stransformation agenda

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing

Volume 9 Issue Four 2014


Europe m10, Ghana CD18000, Kenya Ksh200, Nigeria N330, South Africa R25, UK £7, USA $12

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

Wale Tinubu, chairman of Oando

Energy Resources. See page 5.

■ Geology - p22 ■ Gas - p24 ■ E&P - p26 ■ Technology - p34





Contents

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing

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Executives’ Calendar 2014AUGUST

5-7 NAICE-Society of Petroleum Engineers Nigeria Annual LAGOS www. spenigeria.spe.org/naice

International Conference & Exhibition

18-19 West Africa Oil and Gas Security Summit LAGOS www.waoilgassecurity.com

18-20 Oil & Gas Summit Africa MAPUTO www.africa.oilgassummit.com

26-27 Gas Africa Conference SANDTON www.mcnaughtonevents.co.za

25-28 ONS STAVANGER www.ons.no

SEPTEMBER

6-9 Cairo Energy Oil & Gas Exhibition CAIRO www.cairoenergy.com

16-17 South Africa Local Content Summit CAPE TOWN southafrica-local-content.com

OCTOBER

1-2 IADC Drilling Africa Conference & Exhibition PARIS www.iadc.org

7-9 CIEMEOGIS 2014 ABIDJAN www.cotedivoiresummit.com

15-17 EAOGS-3rd East African Oil and Gas Summit NAIROBI www.eaogs.com

18-20 Practical Nigerian Content Forum YENAGOA www.ncipnc.com

20-21 Global African Investment Summit LONDON www.tgais.com

23-24 Gabon Oil & Gas LIBREVILLE www.theenergyexchange.co.uk

24-26 Mozambique Continuous Education & Career Development Forum MAPUTO www.elliteic.net

28-30 Gulf of Guinea Gas ABUJA www.cwcgog.com

NOVEMBER

3-7 Africa Oil Week CAPE TOWN www.petro21.com

9-13 NAPE-32nd Annual International Conference and Exhibition LAGOS www.nape.org.ng

10-13 ADIPEC ABU DHABI www.adipec.com

DECEMBER

2-4 Valve World Expo DUSSELDORF www.valveworldexpo.com

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

THESOCIETY OF Petroleum Engineers(SPE) is returning as conferenceorganisers for ADIPEC 2014,organised by dmg events. This eventis an opportunity for like-mindedprofessionals to join and contributeto one of the largest industry showsin the Middle East. Providing a first-rate platform for exchangingknowledge and best practices, theconference brings togetherrenowned international speakers,researchers, and experts with acarefully selected mix of technical.This multi-disciplinary conference isintended for international andregional oil and gas professionals,who are involved in both thetechnical and non-technicalfunctions within the industry.

The Abu Dhabi InternationalPetroleum Exhibition & Conference(ADIPEC) will return on 10-13November 2014 and will becelebrating 30 years of service to theindustry. Since its inception in 1984,ADIPEC has provided an unrivalledplatform for industry experts to cometogether and share knowledge and

meet with peers. ADIPEC remains inthe top three oil and gas events in theworld welcoming delegates, visitorsand exhibitors from across the globe.Established as one of the largestconference programmes globally,the ADIPEC 2014 Conference, underthe theme of 'Challenges andOpportunities for the Next 30 Years',presents two conferences in one,offering the following plenary andtechnical content:6 81 Technical conference sessions6 Ministerial panel session6 Keynote address6 Two CEO plenary sessions6 Eight industry panel sessions6 Four academia sessions6 Three IT security sessions6 Middle East Petroleum Club

programme and more

INTERNATIONAL EXHIBITOR INTEREST and support for the Oil & Gas Africaand Maritime & Offshore Marine Africa exhibitions – two of the fourcomponent shows of the Cape Industries Showcase (CIS) – continues tosurge. A major drawcard for visitors was the sheer volume of newtechnologies and high-tech products from around the world on display. CCTVtechnology supplier Videotec, already well-known in South Africa’s securitymarket, plans to expand its product, technology and services footprint intoindustrial sectors.

Videotec manufactures a wide range of CCTV surveillance systems, andnow offers specialised high-tech products specifically designed to operateunder extremely harsh conditions in the oil, gas and onshore and offshoremarine sectors.

The company launched its new Ulisse compact HD integrated pan-tilt-zoom(PTZ) camera at the CIS show. It was successfully launched at the IntertrafficExhibition in Amsterdam in March. The Ulisse compact HD cameras feature truehigh-resolution progressive scanning with advanced image stabilisation; theyalso offer continuous horizontal rotation with day/night monitoring capability,and can withstand temperatures from -40°C to +60°C.

“Security surveillance is an essential component of all business today andVideotec has the technology, expertise and solutions to make it effective, soplease do visit us at the Cape Industries Showcase,” said Videotec’smarketing and communications manager, Alessandro Franchini.

The Cape Industries Showcase (CIS) encompasses the Maritime &Offshore Marine Africa Expo, the Oil & Gas Africa Expo, the Refrigeration andAirconditioning Expo and the Empowertec Africa SME Expo.

Maritime Offshore Marine Africa’s exhibition profile includes ship buildingand repair, marine engineering, offshore mining, fishing and work boats.

Oil and Gas Africa is an event dedicated to West Africa’s offshore oilfieldoperations.

Smart surveillance camera solutions at CISADIPEC celebrates 30 years




THE DEMOCRATIC REPUBLIC ofCongo has been given fullmembership to the ExtractiveIndustries TransparencyInitiative (EITI), the globalorganisation which promotesgood management of oil, gasand mineral resources.The group has announced thatthe Congo was made an officialpart of the group just over ayear after the country failed to disclose its mining sector revenue.EITI said the government had since addressed the issues raised in a2010 report which resulted in the country’s suspension. It addedthat the DR Congo was now compliant.EITI chair Clare Short said the country had made efforts to reform,despite challenges."Despite all the challenges facing the country, the Congolese peoplehave been working together to bring transparency and accountabilityto the management of their natural resources," Short said.The organisation, which involves governments, companies, civilsociety groups, investors and organisations, encouragestransparency by tallying revenue declared by states and comparingthat to payments made by resources companies.The DR Congo was ranked 154 of 177 countries in TransparencyInternational's 2013 corruption perception index.

OANDO ENERGY RESOURCES Inc has received government approvalfor the acquisition of the Nigerian upstream oil and gas business ofConocoPhillips for a total cash consideration of US$1.65bn, subject tocustomary adjustments. OER and ConocoPhillips are now positioned tocomplete the ConocoPhillips transaction.Having received consent from the minister of petroleum resources,both parties have extended the outside closing date for completionof the acquisition to enable them to finalise activities required toconclude the transaction.Commenting, Wale Tinubu, chairman, OER said “We are delighted toreceive the approval of the honourable minister of Petroleum Resourcesfor the completion of the acquisition. It has been a long journey,wherein we kept faith with our strategy and executed every milestonediligently. This acquisition satisfies our criteria for assets in production,as well as excellent appraisal and exploration prospects. The coastnow stands clear for us to immediately complete the acquisition”.OER will now work with ConocoPhillips towards completing theacquisition by the long stop date of 31 July, 2014.

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This oil and gas field at Moanda has been inoperation since the 1970s. Photo: UNEP

DR Congo added to transparency group

Approval granted for Oando’s acquisition


Wale Tinubu, chairman ofOando Energy Resources

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ATWOOD OCEANICS INC hasannounced that one of itssubsidiaries has been awarded adrilling services contract byChina's CNOOC Africa Ltd for theAtwood Hunter (deepwatersemisub). The contract will beperformed offshore EquatorialGuinea, specifies a day rate ofUS$337,000 for a minimum termof 90 days and includes anoption for one additional well. Tothe extent the term exceeds 90days the day rate for days 91 to180 shall be US$330,000. Anyterm in excess of 181 days shallhave a dayrate of US$325,000.The Atwood Hunter is expectedto commence the contract mid-August 2014.In connection with this contract,an Atwood subsidiary andGuinea Ecuatorial de Petroleos(GEPetrol) mutually agreed toterminate the parties'previously announced contractfor the Atwood Hunter providedcertain conditions are met.

6 Oil Review Africa Issue Four 2014

FORUM ENERGY TECHNOLOGIES Inc has received an order from MarinePlatforms Ltd (MPL) to supply four work-class remotely operatedvehicle (ROV) systems each complete with a Dynacon launch andrecovery system.The order includes three Perry heavy work class XLX Evo 200HP ROVs,the latest generation of the Perry XLX series. Two of the systems willbe mobilised aboard MPL’s new “African Inspiration” multi-purposeservice vessel for service offshore West Africa and the other two willbe added to their global fleet.“Forum is very pleased with its continued association with MarinePlatforms,” said Bill Boyle, Forum Subsea Technologies’ senior vicepresident. “The choice of Perry vehicles for their new vessel and for use insuch an operationally demanding market represents a vote of confidencein the reliability of the XLX series and reflects Forum’s strategy ofproviding first class engineering and after-market service to our clients.”

NIGERIA'S LARGEST INDIGENOUS upstream operator, SeplatPetroleum Development Company, has reported a massive profitincrease of 404 per cent for the full year 2013.The figures that would be exciting to shareholders of the dual-listedcompany – on the Nigeria Stock Exchange (NSE) and London StockExchange (LSE) – were contained in the 2013 annual reports releasedat the first Annual General Meeting (AGM) of the company as apublic entity.“The future of our company is very bright,” declared the excitedchairman of Seplat, ABC Orjiako, who was impressed by the continuedexponential growth of the company amid uncertainties shrouding theoil and gas sector on the passage of the Petroleum Industry Bill (PIB)and reduction in US demand for Nigerian crude oil, among others.The company has managed to grow its crude oil production from11.5mn barrels in 2011 to 18.8mn barrels in 2013, with an exit rate61,700 barrels daily as at 31 December 2013.Revenue for the year ended 31 December 2013 also grew by 41 percent in one year to US$880.2mn.Further into the future, Seplat intends to continue infrastructuraldevelopment to enhance operational efficiency and in turn growrevenue, Seplat CEO Austin Avuru stated.“New developments for recent discoveries and the completion ofidentified development projects will also ensure that the company iswell-positioned to grow both reserves and production by convertingcontingent and prospective resources into commercial reserves,”Avuru added.The oil and gas company is working on increasing capacity andrevenue by commercialising gas production, averaging 99mn scfd in2013 and expected to reach about 300mn scfd by 2016.

WOOD GROUP KENNY has beenawarded a subsea engineeringservices contract on the Tullow-operated Tweneboa, Enyenra andNtomme (TEN) project, off Ghana.Wood Group did not reveal thevalue of the contract which willsee it supply subsea, umbilical,risers and flowlines engineeringservices on the project.It will provide Tullow with projectengineering resources, specialisttechnical support and technicalassurance services across the Surfimplementation work scopethrough to first oil.The TEN fields lie in the deep-water Tano Block, about 60 kmoff Ghana, and the developmentwill see the drilling andcompletion of up to 24development wells which will beconnected through subseainfrastructure to a floatingproduction, storage and offloadingvessel which is currently underconstruction in Singapore. Firstoil from the TEN fields iscurrently scheduled for mid-2016.

Wood Group Kennytakes TEN job

MPL’s new “African Inspiration”being guided safely to shore.

AFRICAN GOVERNMENTS SHOULD not mix politics with crucial businessventures including the extractive sector, which is considered one of the bigcontributors in world economy.Stakeholders convening for training on reporting gas and oil issues in Kampalarecently expressed their concerns saying political ‘meanders’ have fatallywounded the lucrative sector in Africa“Decisions based on political interests have seriously injured development ofthe extractive sector, and socio-economic set up of the Africancommunities,” said Abeinomugisha Dozith, principal geologist in Uganda’sdepartment of petroleum exploration and production, ministry of energy andmineral development.The geologist expressed fears about sustainability of the sector in some Africancounties citing Ghana, Tanzania and Uganda where politics had createdconsiderable setbacks in the sector.“If technical people are not allowed to do their work due to politicalinterference, entire communities will never benefit from the resources,” he said.In his presentation titled ‘exploration, development and production overviewof oil and gas,’ the geologist said if the petroleum sector is well managed itcan transform other sectors.African countries should build capacity for local people to participate in thesector so as to improve the people’s economic standards, he said.“Since most African countries do not have enough human resources towork in the sector, we need to train manpower to work in the sector,”Abeinomugisha noted.However, due to unfamiliar terminology in the oil and gas sector the geologistcalled on media houses to designate specific journalists who can effectivelyreport on the sector by helping the community to understand what is availablein the sector.He said technical terms in the sector have been misused becausethere are no specific journalists who have been trained to report in the sector.“Report responsibly, avoid sensational reporting because the oil and gasindustry has the potential to disrupt other sectors,” he added.

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Seplat records 404% profit growth in 2013

Avoid bringing politics in business, govts told

MPL orders four ROVs from Forum


Atwood Hunter towork for CNOOCoffshore EG



AFRICA'S BOOMING ENERGY sector nowaccounts for 13 per cent of the best payingroles advertised for international oil and gasexperts, more than the Middle East,according to new research by Von Essen, theleading providers of tax advisory services tointernational contractors.Von Essen says that a growing number of oiland gas jobs offering more thanUS$170,000 per annum are being created byincreased exploration and extraction activityin Africa, not just in well-established centresin northern Africa and Nigeria, butincreasingly also in Kenya, Ghana, Tanzania,Niger, Uganda, Mozambique, and Angola. Von Essen explains that the businessenvironment in many African countries hasbeen improving, encouraging greater externalinvestment. Ghana, Niger, Uganda and Kenyacan now produce more than 100,000 bopd.

Nigeria is estimated to be the world’s tenthmost oil-rich nation and one of the few oilproducers that has not yet hit peakproduction. Nearly all of the country’sreserves are found in the delta of the NigerRiver where there are approximately 160 oilfields and 1,480 wells in operation.Angola has also become a leading producerof oil, becoming a member of OPEC in 2007and is the third largest sub-Saharan Africantrading partner with the USA, largelybecause of its petroleum exports. Von Essen adds that Africa is now secondonly to Europe for the number of highly paidroles advertised for top UK oil and gasindustry professionals. Lydia Marref, partner at Von Essen,commented: “The fact that Africa now offersthe second largest pool of high paying jobsin the energy sector is a very significant

milestone. Africa has become increasinglyattractive to international explorationcompanies and investors as it has becomeeasier to access oil reserves and thecontinent has made great strides inbecoming more business friendly.”“It is likely that in the future, oil and gascompanies drilling in Africa will require moreconsultants as new reserves are found.”Added Lydia Marref: “With the mosthighly paid roles concentrated in Europe,there are plenty of attractiveopportunities close to home. However,consultants shouldn’t overlook the factthat there are other regions also offeringhigh pay, interesting work, and greatopportunities for career progression.”“Our advice is that consultants shouldchoose the best and most rewardingenvironments for them personally.”

OILCAREERS.COM AND AIR Energi’s 2014 H1 Workforce Survey delvedinto the oil and gas market focusing on key areas of oil production inWest Africa with thought provoking results.Equatorial Guinea has been a significant oil and gas exporter sincethe 1990’s with production mainly from the Zafiro, Ceiba and Okumafields. Equatorial Guinea had proven oil reserves of 1.1 bn barrels asof January 2012 with developing technologies making access tothese much easier. The industry has nurtured local candidates, withcompanies like Marathon Oil hiring a number of interns each year andoffering training and development programmes for employees.However retention in Equatorial Guinea is low with the prospect ofhigher wages luring workers abroad. Gabon is a mature region that, despite facing declining output overthe last decade, is still among the top five oil producers in sub-Saharan Africa. Although the area’s decline in production rate hasreduced in recent years as international companies invest inlongevity projects at mature fields, the current workforce faces thesame issues as that of Equatorial Guinea with a lack of skilledprofessionals due to migration to better paid areas. Developments inboth regions offer extensive opportunities for skilled oil and gasworkers, however the market will be unable to thrive until the issueof workforce retention is addressed.

SINCE THE DISCOVERY of the Jubilee oil field in the Gulf of Guinea in 2007,offshore Ghana has attracted considerable oil and gas investment that hasbeen a boon to the West African country's economy. Ghana's annual overalleconomic growth rate has averaged approximately six per cent in as manyyears, according to a 2014 report by the African Development Bank Group. Inthe case of the service-oriented sectors and industry, economic growth hasbeen even more robust during the period, the report states.Anticipating continued growth in Ghana's burgeoning oil and gas sector, SwiftWorldwide Resources and the Eastern Nzema Stool community in the country'ssouthwestern Atuabo region have formed a joint venture that will provide jobopportunities for more than 2,000 individuals – mostly Ghanaians. The jobswill stem from the pending construction of the Atuabo Free Port, a US$1.5bndeep-water shorebase that Lonrho Ghana Ports Ltd will develop to supportlogistics needs of offshore operators in Ghana and elsewhere in West Africa."We at Swift take seriously our commitment to the areas in which we workworldwide," said Swift CEO Tobias Read. "This partnership is a great example ofleveraging our expertise to support community objectives, help bolsteremployment and develop skills in the local economy."“This joint venture is unique in the fact that its profits after cost recovery will bereinvested in training programmes for the communities, which will allowGhanaians to acquire the skills necessary for obtaining more technical positions.The model is designed so that it can be mirrored over and over again.”

Ghana JV to build workforce for seabase

THE EVER EXPANDING oil and gas industry in Africa has seen figuresdouble over the last two decades. ITECO, with a stronghold in the oiland gas supply industry, has been providing oil country tubular goods(OCTG) for the last 18 years. It has a presence in more than 10countries through its sales offices and stockyards.ITECO Middle East has executed a contract for the supply of casingsand tubing’s for the Menengai geothermal project in Kenya on a DAPbasis (a typical example of mill to well concept). Aware of the criticaltime constraint, ITECO extended its work scope with assistance froma local team in Kenya and embarked on a mission never done before. The project called for ground co-ordination with the involved parties,such as port authority, ground handling agent, trucking crew, cranecrew and client’s crew. The co-ordination and task scheduling resultedin completing the job ahead of schedule without any major damages.

Project highlights included: 6 10,000 tonnes of carbon steel pipes (casings) transported to

Menengai drilling site6 450 trailers ferried the pipes 6 300,000 km distance covered without any loss time incidents.ITECO’s expertise is its understanding of the local market and toprovide a personal approach and genuine knowledge. It is a trading,distribution and logistics business focussing on learning about thecustomers in order to provide them with the finest quality and bestvalue products and services.The leading products and services provided by ITECO are recognisedby major international oil and gas companies as well as renewableenergy companies. ITECO is currently seeking trade partners in Africa.

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Workforce survey in EG and Gabon

DAP contract handled by ITECO in Kenya

Africa’s growing energy sector now offers more top paying jobs than Middle East



Corporate Head Office5B, Rahman Adeboyejo Street, Lekki Phase1, Lagos, Nigeria

Tel: +234 1 7742304, +234 709 872 7105Email: [email protected]

S03 ORA 4 2014 - Analysis_Layout 1 7/24/2014 12:23 PM


AASPECIAL REPORT from the International Energy Agency* sees anincreasing role for governments in shaping investment decisionsrelating to oil, gas and power-sector development. As the tablesummarised below shows, here in Africa the main focus will

continue to be on development of oil resources.“Credible policy frameworks” and “stable access to long-term sources of

finance” will be needed, the WEO publication says. “Neither of these conditionsshould be taken for granted”, the OECD’s energy watchdog warns.

And chief economist Fatih Birol points out that essential sources of privatecapital will be deterred if governments in countries where Africa now sells mostof its oil and gas change the rules in unpredictable ways on matters such aspromoting low-carbon sources of power.

Of the cumulative total investment required over more than two decades(US$48 trillion in all) more than four-fifths will be for energy supply - US$23 trillionof this for extracting fossil fuels, transporting and refining them. Almost US$17trillion will be required for improving power supplies alone. “More than half of theenergy-supply investment is needed just to keep production at today’s levels.”

A different investment landscape The June 2014 report emphasises the very significant costs of investment innew liquefaction facilities, one of Africa’s few feasible ways of selling surplusgas overseas. And it continues to call for significant further progress on reducingcarbon emissions. A breakthrough in next year’s Paris UN climate conference isvital to “open up a different investment landscape” it warns.

This report, the first to be issued by the IEA on investment issues since 2003,examines the differing structure of ownership and models for financinginvestment. It emphasises the continued importance of funds for oil developmentin the Arabic-speaking countries, including here in North Africa, to meet globaldemand, and the likely consequences of delay if these are not forthcoming. Itexamines the dynamics and costs of investment in LNG, and how this can shapethe world’s future gas supply situation. The need for global investment in power

supplies is covered, and the requirement for funds by the various low-carbonsuppliers is stressed. Finally the new IEA report from its World Energy Outlookseries looks at how global financing requirements will change if governmentsmake serious attempts to address the challenge of climate change (ie, adopt the“450 ppm” solution), rather than merely adopting what are described as “newpolicies”.

Amongst the key points made in this year’s call for action are:6 More than US$1600bn was invested last year to supply the world’s energy

consumers. This total has more than doubled in real terms since 2000.6 An additional US$130bn had to be spent on improving energy efficiency.6 Through 2035 the investment required each year to meet energy needs will

rise steadily towards US$2000bn, with annual investment in energyefficiency increasing to US$550bn.

6 Less than half of the required US$40 trillion investment in energy supply willgo to meeting growth in demand; the larger share will be required to offsetdeclining production from existing oil and gas fields, and to replace powerplants/other assets that reach the end of their productive lives.

6 Of the US$8 trillion in investment in energy efficiency required by 2035, 90per cent will be spent within the transportation and construction sectors.

6 Decisions to commit capital to the energy sector are increasingly shaped bygovernment policy measures and incentives, rather than signals coming fromcompetitive markets.

6 Private sector participation will be essential to meet the world’s energyinvestment needs in full, but mobilising private investors and capital willrequire a concerted effort to reduce political and regulatory uncertainties.

6 Fortunately new types of investors in the energy sector are emerging, but thesupply of long-term finance on suitable terms is still far from guaranteed.

6 Investment in the supply of natural gas will rise almost everywhere, butmeeting long-term growth in oil demand will become steadily more relianton investment in the Middle East. Here at “Oil Review” we think this will bethe case in North, West and East Africa too.

6 Investment in LNG facilities will continue to create new links betweenmarkets and improve the security of gas supplies. However high costs for gastransportation may dampen the hopes of buyers in both Europe and Asia foraccess to supplies at significantly lower cost. ■

*”World Energy Investment Outlook”; an IEA/WEO Special Report;www.worldenergyoutlook.org/investment

Investment in LNG facilities will continue to create new links between markets andimprove the security of gas supplies. Image source: Center for Liquefied Natural Gas.

New types of investors in the energy sector areemerging, but the supply of long-term financeon suitable terms is still far from guaranteed.

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More than US$1.6 trillion is needed as investment each year to meet global energy needsthrough 2035. Africa’s share will have to be substantial.

Energy investment -

a rising trend


Average annual investment in energy supply– all-Africa (yr-2012 US$, billions)

Historical 2014-2020* Cumulative 2000-2013 2014-35*

Total 94 138 3238Oil 63 66 1395

- upstream 56 61 1291- transport 5 3 50- refining 2 3 54

Gas 18 39 915- upstream 11 24 674- transport 0 0 6

Coal 2 2 46Power 12 31 882* Under IEA’s “New Policies” scenarioNote: Comparable figures for 2021-25, 2026-30 and 2031-35 are also given, as are totalcumulative investments under the more ambitious “450ppm” CO2 scenario, and required energyefficiency investments, for all regions

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IINFRASTRUCTURE INVESTMENT IS critical forthe economic and social development of theAfrican continent. The African DevelopmentBank estimates current levels of infrastructure

investment across the continent at around US$45bnannually. However the World Bank estimatesinfrastructure-funding requirements in the continentat US$93bn annually for the next ten years. Almosthalf of this amount is needed to address thecontinent’s current power supply crisis which allowsfrequent blackouts and leaves many in energypoverty. Currently, two out of three sub-SaharanAfricans — 600mn people — lack access to electricity,forcing them to spend significant amounts of theirincome on costly and unhealthy forms of energy suchas smoky and scarce wood for indoor fires for cooking.The scale of the energy gap can be seen in Table 1.

To reduce, if not eradicate energy poverty andthe incidence of blackouts, both investors andutility operators, are looking at diverse sources offinancing to fund new investment .

Problems faced by project promoters andpotential lendersFor project promoters “The challenge is to find thecheapest sources of capital”, said Theuns Ehlers,head of resources and project finance, BarclaysAfrica in a telephone interview of 12 June 2014. Forpotential investors and lenders the challenge is toaccurately identify the most bankable deals. Theglobal financial crisis of 2008 and subsequentimposition of new banking regulations, such asBasel III, have reduced the ability of traditionalsuppliers of capital, commercial banks, to provideproject finance. Fortunately, new sources of financeare stepping into the breach including sovereignwealth funds eager to diversify their portfolios,private sector investors including insurance

companies eager for a long-term income streamand private equity firms alongside capital marketsand government issued infrastructure bonds

The challenges of raising finance forinfrastructure projects are acute in most Africancountries, compounded by the existing limitedinstitutional capacity, inadequate regulatory andlegal framework, underdeveloped banking andinadequate capital markets that commonly existoutside South Africa, Nigeria and Kenya. However,the poor credit rating of some countries likeMozambique are likely to make it more difficult tofund its LNG export projects, when rival projects inAustralia, Canada and the US offer a less riskyenvironment, suggested energy experts.Nevertheless, despite all these obstacles, Ehlersasserts, “Interest from investors is worldwide,especially from Europe and America. There is noshortage of capital for energy projects in SouthAfrica and the surrounding region, especially inrenewable projects.”

Sources of financeSources of funding for energy projects in Africa arediversifying to include local, foreign, public andprivate sector investment. Self-funding from existing

reserves or selling of assets by utilities and powergeneration companies is becoming more common.This is certainly a partial solution towards financingmany oil and gas projects on the continent. Forinstance, in September 2013, Enel sold a 20 percent interest in it’s Mozambique gas discoveries toChina’s CNPC, in order to fund further development.

The role and importance of African governmentsas a direct source of power project finance is muchdiminished and can no longer be taken for granted.However, governments remain important indirectly asthey sanction the use of state-owned pension fundsin private power infrastructure projects. For example,and most notably, the South African GovernmentEmployee Pension Fund is involved in the financingof a 44MWp concentrator photovoltaic (CPV) powerplant, being built in South Africa by Soitec. Thepension fund will hold 20 per cent of the project’sequity, reported the PVTech website in June 2014.

Development banksDevelopment banks remain a traditional source offinance for project promoters and developers. Forexample, the African Development Bank (AfDB), inMarch 2014, launched the African RenewableEnergy Fund. The fund, to be headquartered in

There is no shortage of capital for energy projects inSouth Africa and the surrounding region.

Development banks remaina traditional source of

finance for projectpromoters and developers.

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African Finance: Nicholas Newman looks at the fiscal challenges facing the bankingsector in financing Africa’s current and future energy projects.

Sources for funds for African

energy projects


Table 1: Africa’s power gapPopulation Electrification Current Generating Current Demand Demand in 2030 Current Independent

Rate Capacity Power Sector shareKenya 44 million 16 % 1,429MW 2,500MW 15,000MW 20%Nigeria 162 million 50% 4.1GW 20GW 40GW Power sector in

process of privatisation.South Africa 52 million 84% 34,970 MW 35,364 MW 85,241 MW 4%Sources: US EIA, African Development Bank, Eskom


Nairobi, aims to raise US$200mn within the next 12months for grid-connected development stagerenewable energy projects including, small hydro,wind, geothermal, solar, biomass and waste gas. Asof 12 March 2014, it had already securedUS$100mn, to support small to medium-scaleindependent power producers (IPPs). Previously, inMarch 2013, the bank approved US$157mn infinancing for a wind power project designed to add300MW to Kenya’s generation capacity.

Whilst the importance of commercial banks’lending is somewhat diminished, they play animportant role by arranging deals and raisingcapital for energy projects. For example, BarclaysAfrica was a joint mandated lead-arranger in theUS$550mn deal to fund Bokpoort, a solar-poweredrenewable energy project in Northern CapeProvince. In the latest round of South Africanrenewable projects, Barclays Africa handled 30 percent of the deals, numbering 14 projects in total.“Outside South Africa, Barclays has been involvedin independent power projects in Kenya andUganda as well as Mozambique and Nigeria,” saidTheuns Ehlers. In addition, commercial banks areworking as intermediaries, to access new energyproject investment from export credit agenciesincluding Japan’s Bank for International Co-operation (JBIC).

State-sponsored export credit agencies such asthe JBIC, the Export-Import bank of the United Statesand EXIM Bank China not only supply vital financeto their exporters of power goods and services butalso provide finance for foreign companies. Forexample, America’s Export-Import Bank supplied asignificant portion of the US$805mn upfrontfinancing needed by Eskom, South Africa’s state-

owned power utility, for its new 800MW coal powerat Kusile, due for completion in 2015.

Adding to traditional foreign aid sources ofinfrastructure finance, President Obama launchedthe “Power Africa Incentive” programme designedto help reduce energy poverty in June 2013. For itsfirst five-year phase, the US Government hascommitted more than US$7bn in financial supportand loan guarantees to secure 5,000MW of newelectricity for Nigeria, Ghana, Kenya, and Tanzania.In addition, every government dollar committed toPower Africa, is backed by two dollars of privatesector investment commitments. Power Africa’sfinancial partners, including the AfricanDevelopment Bank and World Bank, havecommitted more than US$14bn in project financethrough direct loans, guarantee facilities, and equityinvestments to secure additional electricity supplies.

Another recent development is that majormultinational manufacturers and suppliers ofenergy related products and services, such asSiemens and GE, have set up in-house banks toprovide finance, ranging from debt to junior capitaland equity for client project developers. Forexample, Siemens, through its financial arm, iscurrently involved in wind power projects designedto provide Morocco with 26 per cent of itselectricity by 2020.

Local sovereign Wealth Funds (SWF) arebecoming a new source of funds for energy projectsin Africa. Over the past few years, oil producingcountries including Nigeria, Ghana and Angola haveestablished their own sovereign funds managingUS$1bn, US$100mn and US$5bn respectively.Other African countries are likely to follow over thenext decade, according to Mthuli Ncube, chiefeconomist at the African Development Bank.Foreign sovereign funds are also showing interest,attracted by improving economic growth andgovernance in many countries. In December 2013,for example, Singapore’s SWF Temasek bought astake in Ophir Energy’s gas fields in Tanzania forUS$1.3bn. The sale will help in the development ofthe fields. For a selection of diverse funders ofpower projects in Africa see Table 2 below.

A new and increasing trend is the entry ofAmerican and European investment funds attractedby the opportunities presented by numerousplanned power projects in Africa over the comingdecade. For example, Blackstone LP, the Americanprivate equity group, the largest alternativeinvestment firm in the world, has announced plansto invest US$3bn over the coming years in Africanenergy projects, reported the online financial newschannel, Bloomberg in January 2014.

Important advice for project promoters Bankers are unanimous. Energy project promotersneed to select a banking partner at the earliestpoint of the project cycle. Banks not only offeraccess to finance but also have the specialist skillsand expertise to expedite matters and minimisecosts. Theuns Ehlers advises project developers totreat “your bank as a proactive partner to theproject.” It is increasingly apparent that the privatesector’s contribution to financing energy projects inAfrica over the coming decades will increase whilstthat of government will diminish. ■


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The US Government has committedmore than US$7bn to secure5,000MW of new electricity forNigeria, Ghana, Kenya and Tanzania.

Local sovereign Wealth Funds(SWF) are becoming a newsource of funds for energy

projects in Africa.


Table 2: Some sources of funds investing in Africa

US Power Africa Incentive $7bnUS Blackstone LP $3bnUS Power Africa Incentive $14bnfinancial partnersEU Deutsche Investitions und $7.5bn Entwicklungsgesellschaft GmbH Africa African Renewable Energy Fund $200mnEU The European Investment Bank $1.5bnSource: IEA, Bloomberg, EIA, African Development Bank

Barclays Africa was a joint mandated lead-arranger in the US$550mn deal to fund Bokpoort, a solar-poweredrenewable energy project in Northern Cape Province.


TTHIS HAS GENERATED anincreased subsurfaceunderstanding for one of theworld's leading frontier

petroleum exploration areas. The area of interest is located in the

geologically complicated area of avolcanic passive margin. Despite itscomplex geodynamic setting, theNamibian and South African Atlanticmargins remain one of the world'sfrontier petroleum exploration areas,whose structure and tectonic evolutionhave major implications for hydrocarbondistribution and maturation.

The structure of the passive marginis characterised by two strike parallelgravity highs – an internal highcorresponding to the large basementramp of the Atlantic Hinge Zone; andan external high that may represent ahigher density transitional crustintruded by igneous rocks. In addition,sedimentary basins situated to the eastof the Hinge Zone, though probably notvery deep, may contain pre- and earlysyn-rift successions with a variety ofpotential source rocks.

The objectives of ARKeX’s andSpectrum’s digital atlas was to compile acomprehensive structural data based on a GISplatform and to apply the kinematic implications ofthe results obtained to redefine the morphology ofthe basins in the area.

Goals included redefining the major structuraland tectonic elements by using gravity data tointerpret the location of major depocentres and theirstructural framework; basin structure interpretationusing 2D gravity and magnetic modelling of seismiclines provided by Spectrum; and 3D gravitymodelling to verify 2D interpretations and produce aseries of 3D geological horizons.

The following basins and sub-basin definitionswere adopted in the study: basins extend over thestructural boundaries to include the full sedimentarycover, which is typically of considerable thickness;and depressions (depocentres) are structurally-bound.

Defining structural highs and basinsStructural highs and basins were defined by positiveand negative gravity anomalies respectively. Inaddition, the total horizontal gradient of the gravityfield was used for mapping structures. Thisderivative focuses positive gravity anomalies over

boundaries of maximum density contrast. Theseusually correspond density contrasts betweenbasement and sedimentary cover.

The overall structure and crustal architecture ofthe Namibian/South African passive margin,revealed by offshore gravity data, allowed theidentification of two chains of structuraldepressions (depocentres): i) inner basins located ona proper continental crust between the AtlanticHinge Zone and the coast which may contain pre-and syn-rift sediments and a reduced post-riftsuccession; and ii) outer basins situated onstretched transitional crust in between twodominant gravity highs. Those basins shouldcomprise an increased thickness of syn-rift deposits.

2D forward modelling of the data was thencarried out to put quantitative constraints on depthto basement and to better understand the passivemargins’ architecture, with models built on highquality seismic lines provided by Spectrum.

To eliminate the ambiguity in recognising thesource of the gravity signal, 2D forward modellingwas calibrated by using the outcomes of a 3D gravityinversion, constrained by seismic refraction data forthe Moho surface. This approach extends the limits

for reliable reconstruction of subsurfacestructure and allows for two alternativeinterpretations of the architecture oftransitional crust to be considered.

To discriminate between the twoalternative interpretations, themodelling of magnetic data wasessential. Furthermore, the depth tobasement estimates from 2D forwardmodels was used to further constraina gravity inversion for a topbasement horizon.

According to a conceptual modelby Unternehr et al (2010), thetransitional crust represents highlyattenuated continental crust,subjected to intense syn-riftstretching. In addition, the AtlanticHinge Zone not only correlates withthe flexure in the floor of syn-riftbasin, but also coincides with a zoneof Moho necking.

Consequently, the thickness ofcrystalline crust beyond the hingezone may be reduced to approximately10 km. Furthermore, since SeawardDipping Reflectors (SDRs) are clearlyvisible throughout the seismicsections, abundant volcanic material

within the syn-rift succession and, potentially,widespread igneous rocks intruded into andunderplated beneath the basement are expected.

The two alternative geological models for thepassive margin architecture were successfullytested, both satisfying the observed gravity data, ascan be seen in figure 1.

Both models assume that a syn-rift successionis a mixture of basaltic volcanic material andclastic sediments. The second model (panel B)postulates that the majority of transitional crustrepresents a combination of stretched continentalcrust and high density underplated material.However, the outer margin of transitional crust inthis model is of igneous origin.

To conclude, the integration of 2D seismic andpotential field data provided interpreters with anincreased subsurface understanding for one of theworld's leading frontier petroleum exploration areas.The Tectonic Atlas demonstrates a method ofbuilding a regional structural framework forexploration activities that can be consistently appliedfor frontier hydrocarbon-bearing regions. ■

Chris Anderson, ARKeX


Figure 1: Two alternative 2D gravity forward models for a seismic linecrossing the Namibian margin in the E-W direction.

Nam

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ARKeX, a leading provider of non-seismic geophysical services and data, and Spectrum,a multi-client services and seismic imaging company, have created an explorationframework for Namibia and Western South Africa through the integrated interpretation of2D seismic and potential field data.

Creating a tectonic atlas for Namibia and

Western South Africa


S05 ORA 4 2014 - Equatorial & Gabon_Layout 1 7/24/2014 12:34 PM


GGONE ARE THE days of record GDP-growth in Equatorial Guinea,when the country within one decade moved from among thepoorest in Africa to the richest, counted in GDP per capita. A yearof negative growth now looks to become at least three, according

to the IMF. The government, however, says it has a plan and remains confidentthat economic diversification, together with a renewed effort at luring explorers,will bring growth back into the black.

Equatorial Guinea, one of Africa's smallest and least developed states,started properly moving up the ladder of development and wealth in themid-1990s. Several discoveries at the start of the decade started yieldingresults growth in the years between 1995 and 2005 could at times be ashigh as 40 per cent per annum. Yet the high growth, which to some extentalso preceded the sustained rise in oil prices, masked the fact that asdiscoveries were developed the pipeline of new projects quickly startedthinning. By 2005 the country's oil production peaked at 376,000 bpd andstarted declining. Last year it came in at 270,000 bpd, confirming thecountry's slide in the sub-Saharan Africa oil production tables from third tofifth. Rising oil prices, as mentioned, together with growing income from itsgas monetisation programme, delayed the economic impact a few moreyears, however. Lacklustre growth at the start of this decade turned to anoutright rout in economic growth in 2013, when the economy shrunk by 4.9per cent. This year the IMF forecasts the economy to shrink a further 2.4 percent and a massive 8.3 per cent decline is projected for 2015.

While little is being done, it might seem, more is planned to be done inthe future. The Equatoguinean government says it has regrouped and comeup with a strategy which again shall restore growth and start the country ona path to lower its dependence on upstream oil and gas. At the same time ithopes to reinvigorate exploration in the country's waters, in order to startenhancing the country's reserve numbers and in due course again raise itsoil and gas production rate.

Manifold challengesThe challenges are manifold. Lacklustre terms and a lack of a proactivegovernment approach means that not only have new explorationopportunities been missed over the past years, enhanced oil recovery (EOR)initiatives at the country’s main oilfields, particularly the dominating Zafirofield, operated by ExxonMobil, appear to have been neglected. Investment inboth these strands is key to halting decline and shoring up the country'svital export earnings, in order to finance the government's vision of a morediversified Equatoguinean economy. Apart from luring more of the oil and gasservice sector to the country, strategically placed in the middle of the Gulf ofGuinea, the country hopes to attract significant investment into ventures inthe petrochemical sector. The AMPCO methanol project, onstream since overa decade with one million tonnes per annum (tpa) capacity has given thecountry's leadership a taste for more, as it has created more jobs for localsthan the equivalent offshore upstream projects so far and allows the countryto capture more of the value added from its hydrocarbon production.

Concretely, the government has already abolished the GEPetrol-basedindustry control approach, with the ministry taking a much more centralisedgrip on the award of exploration and development permits. That reform was

launched in 2011/2012 and had within a year resulted in nine explorationpermits being awarded, compared to a total of eight in the preceding fiveyears. The new approach is more flexible in that it allows for blocks in lessprospective areas to be negotiated bilaterally with interested companieswhich have been shortlisted. In more competitive areas, however, biddingrounds will continue to be run.

Gas to become centre of attentionUnder the “Horizon 2020” national development plan, gas is to become thecentre of attention, both as feedstock and energy for the petrochemicalsector, as well as gas-to-power, enabling the development of mining in theresource-rich nation. In addition to those uses, the government also seesroom for raising exports by adding another LNG-train to its 3.7mn tpa plantand hoping for Ophir Energy to add a floating liquefaction (FLNG) plant to itsBlock R gas discovery. In addition to the raised gas exports andpetrochemical expansion, there are also plans to attract more investments inother sectors like fishing, tourism and finance, by emulating offshore tradingand finance hubs like Dubai and Singapore. To this end, a US$1bn fund toinvest along private enterprises in new projects has been created.

There are problems with the buoyant plans and targets at closer look,however. After almost two decades as one of the continent's largest oilproducers it still ranks 136th in the human development index, recentinfrastructure investments to boot. That statistic is made to look all theworse by the country's per capita GDP, which in the past years has beenroughly at the level of EU-member Portugal. The World Bank has consistentlyrecommended that resources are reallocated from large-scale infrastructureprojects to development of the country's health and education sectors, whichhistorically have been chronically underfunded. Equatorial Guinea's constant

Equatorial Guinea started properly moving up theladder of development and wealth in the mid-1990s.

The government says it has a plan to bringgrowth back into the black.

Eq

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The Equatoguinean government has a plan to bring growth back into the black with economicdiversification as well as a renewed effort at luring explorers. Samuel Ciszuk reports.

Regrouping or grasping

for straws?



place at the bottom of global rankings on civil and political freedomseffectively guarantees that the government's dreams of becoming a regionalhub for banking, as well as a tourist destination will come to nought. Thatwill leave it with a high dependence on hydrocarbons and other mineralresources for the foreseeable future, as well as with a continued dependenceon foreign expertise.

Another fundamental issue is the lack of new oil discoveries. Deepoffshore the country's creage is regarded as promising but it isincreasingly regarded as mainly a gas play. Generally that means lowerincomes, which is likely to sway the Equatoguinean government towardsmaximising LNG exports and to some extent to feed export-orientedpetrochemical projects, rather than to develop gas for power. The lack of aworking domestic electricity market largely precludes attracting FDI topower plants, unless they are integrated in some particular gas-electricity-mining project. Even so, the cost of piping relatively expensive offshoregas to Equatorial Guinea's mainland part, quite far from the most recentdiscoveries west of the main island Bioko, could well prove discouraging,compared with adding some further liquefaction capacity. That is likely tobe the government's temptation, particularly if new discoveries fail toreach such a scale that the downward spiral in export earnings can bearrested. If so, the whole plan for increased job creation would be likely togo overboard too.

Perhaps the most worrying signal is the government's continuingpreoccupation with trying to raise direct government take from oil and tosome extent gas production further at a time like this, when it shouldinstead have tried to adjust to an environment where renewed brownfieldinvestment in EOR-techniques is needed. Arresting mature decline wouldhave been the best way to start staging a comeback for the tinyhydrocarbon nation, however that would have required a readiness to giveup some of the increased control over the resources the government hassecured over the past decade. ■


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This FPSO is operating offshoreon the ASENG Field.

Arresting mature decline would have beenthe best way to start staging a comeback for

the tiny hydrocarbon nation.




GGABON IS ONE of sub-Saharan Africa'smost established oil and gasproducers. That however also means itis one of the most mature producers,

suffering all the challenges intertwined with havingto arrest a diminishing production and create theterms necessary to encourage investment inenhanced oil recovery (EOR) techniques. Trying toachieve this, the country holds a chequered record.Gabon too often figures at the bottom of globalrankings of business-friendliness and red tapethanks in part to a bloated bureaucracy whichthroughout the country's independent historyseems to have been as much a tool to providesecure incomes for the country’s elites, as actuallymanaging the country's governance.

Diversifying the economyNew winds have, however, been blowing in Gabon,since current President Ali Bongo relativelynarrowly won his first presidential term to supporthis late father, long-time President Omar Bongo in2009. Efforts to diversify the economy and unlockother natural resources than hydrocarbons in theinner parts of the country have been launched. Atthe same time, the former OPEC member's oiloutput has steadily been sliding from around370,000 bpd in 1997 to just around 270,000 bpdthis year. That slide has for a resource-dependentcountry like Gabon translated to lower governmentincomes, although the impact for much of the pastdecade was softened by the large sustained rise inoil prices. A strained fiscal situation at times inthe past years has resulted in some fiscaladventurism and resource nationalist tendencieson behalf of the government, as well as in a risingindebtedness towards the country's energycompanies through delayed payments. Both theseissues have combined to raise the industry'sperception of business risk, serving as a risingbarrier to attracting more investment. In thatenvironment, a continued push by the governmentto take direct ownership stakes in oil and gascontracts has done little to help assuage fears ofunchecked government interference.

Still, some headway has been made particularlyin the last few years and while some arbitrationand legal disputes remain between the Gabonesegovernment and some oil companies, a significantnumber of EOR projects have now been launchedin the country’s mature plays. A recent forecast byenergy consultancy Wood Mackenzie hasestimated that crude oil production decline indeedwill be arrested this year and output gradually

edge up to around 290,000 bpd, before falling backto today's level by 2017.

Sub-salt potentialMore hope is however being put to Gabon'soffshore, where exploration is increasingly targetingthe sub-salt potential. Discoveries further southoffshore Angola and the Republic of Congo haveraised hopes, particularly as many see geologicalanalogies between the lower Gulf of Guinea andthe seabed offshore northern Angola and thecorresponding prolific waters off Brazil. A renewedeffort at holding licensing rounds produced a goodresult last year, when a total of 11 IOCs secured 13blocks mainly in the country's deepwater.

According to oil minister Etienne Ngoubou,Gabon held good hopes for the country's oil outputto double to around 500,000 bpd in a few years’time, as a result of sub-salt and deepwateropportunities being unlocked, according to Reuters.

While there certainly are leads to explore,some caution should best be added to the oil

minister's optimism. A discovery by France's Total,with partners Cobalt and Marathon with theDiaman-1 well in a water depth of 1,760 metres inthe Diaba license did raise spirits, but still seemsfar from having proved up commercial reserves.The discovery struck gas and condensates, whichlikely complicates monetisation further, as thethreshold reserves needed do not only have to belarge enough to warrant the high production anddevelopment cost inherent in a deepwater sub-salt field, but also the development of some sortof gas export venture or an integrated gas-to-power project on the mainland. The latter wouldlikely require that the government agreed to pay ahigher price for the feedstock gas than currently isthe norm in order to be viable, which itself raisessome potentially tricky political questions. Indeed,unless a sub-salt oil discovery, or much more gasand condensate reserves, is made relatively soon,the probing of the country's nascent deepwatermight well be put on hold after companies'commitment wells have been drilled, given thecosts involved.

In the meantime, the government needs topull through with reforms and to clarify newlegislation in order to make sure that the gains ininvestment approval which have been made afterthe fiscal instability and labour unrest of the pastfew years, do not come undone. Uncertainty overgovernment stakes and to what extent they willbe actively managed is for instance one issuewhich, particularly in a high-cost, high-stakes

Cobalt had the foresight to acquire several high-potential licenses off the coast of Angola and Gabon, pioneering WestAfrica’s pre-salt play.

More hope is being put toGabon's offshore, whereexploration increasingly is

targeting the sub-saltpotential.

Gab

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Gabon has managed to draw in some new exploration spending and might be seeing asub-salt gas and liquids potential opening up, but will the government push through withreforms or will short-termism, brought on by fiscal pressures, derail the start of apotential output recovery?

Gabon’s watershed

moment



environment like deepwater, itwould benefit the industry to haveclarity on from the outset. Thebuilding up of state debt to theindustry and the frequentwithholding of money is anotherissue, which although it mightimprove in the next three years,looks likely to come back and hauntthe energy sector as mature outputreturns to overall decline.

Clarity and fiscal disciplineneededDelivering on that clarity and fiscaldiscipline will not be an easy feat forthe President and his government.Practicing fiscal restraint in the faceof the upcoming 2016 presidentialelections might prove even harder,particularly given the tendencies ofrestlessness among groups likestudents and oil sector workers. With

that in mind it would not besurprising if several of the industryactors tried to postpone largeinvestment decisions into the post-2016 timeframe, itself risking tocompound the country's economicmalaise. Countering such adevelopment by enhancinginvestment terms and cutting redtape more proactively would be thebest course of action for the longterm, but might of course bepolitically the hardest, as it wouldinvolve starving some of the country'selites of their normal incomes andbenefits. Unfortunately that meansthat from the government's point ofview, more fiscal short-termism couldwell seem like the most rationalapproach to Gabon's economicworries unless outright large game-changing deepwater discoveriesindeed are made. ■


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While there certainly are leads to explore,some caution should best be added to the oil

minister's optimism.


PURA VIDA ENERGY hasannounced an upgrade to itsprospective resourceassessment of the NkembePSC, offshore Gabon. Furthertechnical work undertakenby the company hasrevealed a significant newplay in the pre-salt withinthe Syn-rift interval wherecarbonate Coquinas reservoirs are anticipated to be present.The inclusion of newly identified prospects increases the totalgross mean unrisked prospective resources on the block to1,680mn barrels of oil, 1,344mn barrels of oil net to Pura Vida. Thecarbonate play is analogous to similar plays that have resulted inthe discovery of several billion barrels of discovered oil offshoreAngola and offshore Brazil.Pura Vida’s technical work has also identified several areas whichcontain multiple stacked prospects that have the potential to beattractive drill candidates that could be tested with a singlevertical well."Our recent technical work on the Nkembe block has yielded anexciting new play resulting in a significant increase in the resourcepotential,” said Damon Neaves, Pure Vida’s managing director. “Asour understanding of the geology of this block has developed we havecome to recognise the block has the potential to unlock value througha number of alternative pathways. At this time, industry interest inGabon is running high with significant drilling activity ongoing and avery competitive deep-water bid round recently completed. We aretherefore focused on securing funding from the industry to undertakethe exploration activities required to unlock the potential value of theblock."

Pure Vida discovers Brazil-level pre-salt potential

Proven oil basin map.Image: Pura Vida


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S06 ORA 4 2014 - Geology & Gas_Layout 1 7/24/2014 12:41 PM


FUGRO HAS TAKEN delivery of the first of three Fugro Offshore CoastalSurvey Vessels (FOCSV) being built by Damen. The first of a new class,the Fugro Proteus is a compact, survey ship capable of undertaking awide range of survey, monitoring and inspection operations.The vessel is designed for a variety of survey and inspections dutiesincluding light geotechnical work, environmental baseline surveys,monitoring and inspection, and moon pool deployments. Dieselelectric propulsion delivers excellent economy at all speeds.Fugro Proteus is the first of three survey vessels ordered by Fugro fordelivery in 2014. Each will be operating in a different part of theworld and so they have been adapted for the individual environmentsin which they will work. The operating company is a specialist in theacquisition of the full spectrum of survey data and so the vesselshave been tailored to be adaptable for a wide range of tasks. Fugro Proteus is the first vessel to be built directly by Damen forFugro. However the two groups have worked together on a numberof refits in recent years, and and in the process have built arelationship based on trust and mutual understanding.

OPHIR ENERGY PLC, operator of the jointly held Seychelles exploration blocks,has contracted Dolphin Geophysical to undertake the 1500 sq km Junon 3Dseismic survey over the Junon trend. Ophir Energy holds 75 per cent equity inthe Seychelles blocks and WHL Energy the remaining 25 per cent.

The survey will be undertaken by the M/V Polar Duchess and is targetedto commence on 28 June. The survey will take 30 – 40 days to complete. Aninitial fast track processed data set is expected to be delivered in Septemberand a PreSTM processed volume in December.

The Junon 3D seismic survey is designed to mature a number ofprospects for drilling on the Junon trend in the east of the Ophir Energy/WHLEnergy Seychelles acreage (Junon South, Junon East and Junon Central), anarea high graded by WHL Energy’s geological studies.

David Rowbottam, WHL Energy’s managing director, commented: “It isvery pleasing to see the Seychelles project reach an important milestonewith the acquisition of the first 3D dataset in the acreage. Because of thegeological nature of the Seychelles region, it is believed that 3D seismicdata will provide a significant upgrade to the understanding of our largeexploration area. The Junon 3D dataset for example is expected to provide ahigh definition image of the Junon structures and provide a number ofprospects for targeted drill site selection. The Junon 3D seismic surveyfulfils the 3D seismic obligation under Ophir’s farm-in agreement with WHLEnergy and the company looks forward to the results of the survey. Thecompany anticipates that an exciting exploration drilling opportunity willmature from this data.”

As part of the farm-in agreement Ophir Energy will fully fund the initial 1,500sq km 3D seismic acquisition programme up to a total amount of US$17mn.

OCEANGEO BV, A geophysical company specialising in multicomponent oceanbottom seismic (OBS) acquisition, has been awarded a contract by a majorEuropean oil & gas company to acquire a substantial 3D ocean bottom seismicsurvey offshore Republic of Congo. Acquisition is expected to commence inthird quarter 2014.Colin Hulme, OceanGeo’s chief executive officer, commented, “We areextremely pleased to announce this award. OceanGeo has a proven trackrecord of successfully acquiring ocean bottom seismic data, safely andefficiently. Since 2008, our crew has been operating offshore Brazil andTrinidad & Tobago, delivering superior reservoir understanding for our E&Pclients. This award is in keeping with our strategy of deploying our crew intothe west African region. With the full support of ION, we are well positioned tocompete and thrive in the growing ocean bottom seismic market and are trulyexcited about our future.” Meanwhile, in a separate statement, ION Geophysical Corp has entered into anagreement to increase to 100 per cent its ownership of OceanGeo.Brian Hanson, ION’s president and CEO, commented, “The OBS segment is thefastest-growing seismic market segment today, commanding an estimated 13per cent of E&P company marine seismic spend, up from about six per cent in2006. Our increase in the ownership of OceanGeo is indicative of our fullcommitment to the OBS market and is in keeping with our strategy of leveragingour key technologies, such as our Calypso next generation VSO acquisitionsystem, to deliver solutions to oil & gas companies. With the addition ofOceanGeo services, we now offer a fully-integrated OBS solution that includessurvey planning and design, data acquisition using Calypso, and data processing,interpretation and reservoir services through our GX Technology group.”

OceanGeo receives ocean bottom award

Fugro Proteus is the first of three surveyvessels ordered by Fugro for 2014.

SWALA ENERGY LTD hasannounced that the 2D seismicacquisition programme in Block12B, Kenya (Figure 1) hascommenced. The work will becarried out by BGP International. Swala and its Joint Venturepartners Tullow (operator) andCEPSA will acquireapproximately 350 km of 2Dseismic over the coming weeksand the data will be processed as the survey progresses. The programmeis designed to identify the main structural lineation in the basins and hasthe potential to identify structural leads for follow up infill seismicand/or possible drilling. Block 12B lies in the Neogene Nyanza basin, an off-shoot of the EastAfrican Rift System (EARS) where large quantities of oil have been provenin recent years by Tullow in Uganda and in Kenya. The seismic data willbe vital in determining the forward exploration programme in the block. Although the basin has been under explored to date, with only 50 km oflow quality seismic data recorded in 1989, reprocessing of this data bySwala has revealed a possible tertiary basin fill of more than 3,000meters, supported by passive seismic work carried out by the JV in 2013. The new seismic lines will be acquired over the basin centre and work.The new data will be acquired using a high quality dynamite sourcecompared with the very low impact vibrator source in 1989 and shouldprovide a much better representation of the basin geometry and potentialdrilling candidates. David Ridge, Swala’s CEO said: “The start of the 12B seismicprogramme underlines the JV’s commitment to explore this frontierbasin – an offshoot of the highly prospective East Africa Rift System.Our technical re-evaluation of the legacy seismic data is encouragingand we look forward to seeing the results of the seismic survey thathas now commenced.”

Geo

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3D seismic survey contract for Seychelles

Positive results from 12B seismic in KenyaFugro Proteus first of three for 2014


Figure 1: Map of planned 2D seismic area.



CIRCLE OIL HAS reported that its SAH-W1well on the Sebou Permit, onshore Morocco,has made a gas discovery.Circle said that the well – located in thewestern central area of the Sebou Permit –encountered gas shows at three levels withinthe target Guebbas sands after being drilled to atarget depth of 1,263 meters. Wireline logginghas confirmed the presence of three gas-bearingzones with subsequent pressure testingconfirming permeable high-pressure reservoirs.The net pay from the wireline log analysis issix meters in the Top Guebbas, six meters in

the main target Intra Guebbas and threemeters in the lower part of the IntraGuebbas.Circle now plans to produce the three zonessequentially from the bottom up – where thehighest pressure is present.Circle CEO Professor Chris Green commented: "We are delighted to add another successfuldiscovery to our Sebou gas portfolio. This isthe first well of a six-well program to bedrilled with our partner ONHYM in the Seboupermit and is coupled with another six-wellprogram in the Lalla Mimouna permit."

SOUTH AFRICA’S SASOL is teaming up with Eni and Mozambique’s national oilcompany, Empresa Nacional de Hidrocarbonetos, to conduct a pre-feasibilitystudy for a large-scale GTL plant in Northern Mozambique. The plant would usegas reserves from the offshore Rovuma Basin.

GTL is highlighted as one of the many options for monetising Mozambique’sgas reserves in the country’s draft gas master plan. Along with LNG exports, thegovernment is considering developing major petrochemical, steel, aluminiumand cement projects near towns and cities, which will help boost employmentand add value to the country’s vast offshore reserves.

The gas master plan has already been submitted to Mozambique’s Council ofMinisters, where it is expected to be approved within the next month. Thegovernment has yet to make a decision on how much Rovuma Basin gas toallocate to the domestic market and how much to reserve for exports, but theministry estimates the country will only need around 1.02 tcm over the next 20years. However, this figure could rise as the downstream industrial sector expands.

Eni is also conducting a FEED study on a floating LNG facility based on itsCoral gas reserves within Offshore Area 4, which is estimated to hold 2.4 tcm ofgas. While Anadarko, the operator of offshore Area 1, has already submitted adevelopment plan to the government for its two-train LNG plant, a final – moredetailed – plan is still to come.

Anadarko is planning to take an FID on the project before 2015, but this willdepend on whether the government passes a decree law – which will lay outthe framework for exploration and production contracts in the country, as wellas changes to the petroleum and fiscal legislation – before elections in October.

STATOIL HAS INCREASEDits estimate of in-placenatural gas in Block 2offshore Tanzania to 20 tcffollowing the completionof the Piri-1 discovery well.The new gas discovery wasmade in the same LowerCretaceous sandstones asthe Zafarani-1 discoverywell drilled in 2012. Thewell location is twokilometers southwest of the Lavani-1 well at 2,360 m of water.Piri-1 was drilled by the drillship Discoverer Americas which now has moved todrill the Binzari prospect in block 2. The Piri-1 discovery is the venture's sixthdiscovery in block 2. It was preceded by gas discoveries at Zafarani-1, Lavani-1,Tangawizi-1 and Mronge-1, and a discovery in Lavani-2.“Additional prospectivity has been mapped and will be tested throughout 2014and 2015. We expect to drill several additional exploration and appraisal wellsand hope that the results from these wells will continue to add gas volumesfor a future large-scale gas infrastructure development,” said Nick Maden,senior VP for Statoil’s exploration in the Western Hemisphere.Statoil operates the licence on behalf of Tanzania Petroleum DevelopmentCorporation and has a 65 per cent working interest. ExxonMobil Explorationand Production Tanzania holds the remaining 35 per cent.

Statoil increases gas reserves off Tanzania

AFRICAN OIL CORP has made a gas discovery in Block 9 onshore Kenya. TheSala-1 drilled a large 80 sq km anticlinal feature along the northern basinbounding fault in the Cretaceous Anza graben and encountered severalsandstone intervals which had oil and gas shows. The well was drilled to atotal depth of 3,030 meters and petrophysical analysis indicated three zones ofinterest more than a 1,000 meter gross interval which were subsequently drillstem tested. An upper gas bearing interval tested dry gas at a maximum rate ofsix mmcf/d from a 25 meter net pay interval. The interval had net reservoirsand of over 125 meters and encountered a gas water contact so there ispotential to drill up-dip on the structure where this entire interval will beabove the gas-water contact. A lower interval tested at low rates of dry gasfrom a 50metres potential net pay interval which can also be accessed at theup-dip location. It should also be noted that there were oil shows while drillingand small amounts of oil were recovered during drilling and testing whichindicates there may be potential for oil down-dip on the structure. Africa Oil isthe operator of Block 9 with a 50 per cent working interest. Marathon OilKenya Ltd BV has the remaining 50 per cent interest.

An appraisal plan to follow up this discovery is currently being evaluated

by the partnership in consultation with the Kenyan government. Plans beingdiscussed include an up-dip location to confirm the real extent of the gaszones tested where the full net sand interval can be intersected above the gas-water contact. The partnership is also considering a down-dip appraisallocation to test an on-lapping stratigraphic wedge on the flanks of thestructure which is of the same age as the zones in the nearby Ndovu-1 wellwhich had oil and gas shows.

In addition, the company is considering drilling an appraisal well on thecrest of the large Bogal structure to confirm this large potential gas discoverywhich has closure over an area of up to 200 sq km. The gross best estimate ofprospective resources for Bogal are 1.8 tcf of gas based on a third-partyindependent resource assessment. The company currently has two optionalslots on the Great Wall drilling rig used to drill the Sala-1 well that areavailable for this appraisal programme.

The company believes there is a very strong market for gas development inKenya and has already engaged in discussions with power companies and thegovernment to potentially fast track a gas-to-power project that could addsignificant value and create benefits for the people of Kenya.

Gas

Sasol, Eni plan study of GTL plant inMozambique

Africa Oil discovers gas at Sala Prospect

Circle hits gas onshore Morocco


The drillship Discoverer Americas.


S07 ORA 4 2014 - E&P A_B_Layout 1 7/24/2014 12:47 PM


TULLOW OIL HAS discovered oil and gas innorthwest Kenya with partners Africa Oil inBlock 9. It said its Twiga-2 appraisal wellhad found 62 meters of net oil pay north ofthe companies’ Twiga-1 well, which hadpreviously encountered some 18 meters ofnet oil pay with limited reservoir quality.

The well encountered up to 39 meters ofnet oil pay and 11 meters of net gas payand appears to have identified a new faultblock trap north of the main Ngamiaaccumulation," said the statement.

"The reservoirs were high quality withmore than 200 meters of net reservoirsands with good permeability inferred fromMDT sampling," Tullow’s explorationdirector Angus McCoss said.

McCoss said the well has beensuspended for testing and the rig willcontinue to drill up to four additionalappraisal wells in the Ngamia field area foran extended well test programme.

The firm also announced a gas discoveryin Block 9 onshore Kenya.

"The Sala-1 drilled a large 80 sq kmanticlinal feature along the northern basinbounding fault in the Cretaceous Anzagraben and encountered several sandstoneintervals which had oil and gas shows," it

said, “and we are evaluating an appraisalplan on the latest discovery in consultationwith the Kenyan government.”

The company also said that “four newbasins in Kenya and Ethiopia are beingtested”, via the drill bit, “during thesecond half of the year”. It added: “Fivefurther basins will be tested in Kenya andEthiopia during 2015”.

The Ethiopian adventure has not beenanywhere as successful as the Kenyanexploit and Tullow cited the former as oneof three (including Mauritania and

Norway) in which it expects “a netexploration write off of US$415mn for thefirst half of the year”.

Tullow clearly has a handle on Kenya’sSouth Lockichar basin, where its majordiscoveries were made. It has eyes onTurkana, Turkwel, North Lockichar, Kerio,Suguta, Kerio Valley and Nyanza basins. InEthiopia, its concessions are located inOmo, West Omo and Chew Bahir. The Exalo205 rig is drilling ahead on the Gardimprospect, located in the Chew Bahir basin inthe South Omo block in Ethiopia.

AUSTRALIAN OIL EXPLORATION firm Pancontinental Oil & GasNL has confirmed an “historic” discovery of oil in an exploratorywell sunk off the Lamu coast in southern Kenya.Pancontinental said analysis has shown there is a 14-metrethick oil column beneath a 29.6-metre column of gas in the‘Sunbird-1’ zone. According to the company, the results are“first proof” that a prospective oil system is present in theLamu Basin and is “expected to lead to a significant increase inindustry interest offshore Kenya”.Pancontinental’s CEO Barry Rushworth said: “The Sunbird-1 oilis the historic first-ever oil discovery offshore Kenya.Furthermore, it is the only offshore oil column ever reportedseaward of the eastern coastal margin of the African continent,from South Africa to the north-west tip of Somalia.”Rushworth said: “We encountered a thick and effective sealover the top of the reef, which was an initial risk for us, and theregional follow-on implications of this are truly significant.Porosity, permeability and seal for the reservoir were all betterthan Pancontinental expected. Now that we know there is aprospective oil system in the Lamu Basin and we know theimportant technical details, we are in a prime position toexplore for larger volumes of oil over our very extensiveportfolio of prospects and leads.”Pancontinental said: “The oil and gas have been geochemicallytyped in detail and the prospective source rocks have beendated and characterised for use in future exploration.Calculating the Sunbird results (in the area designated ‘L10A’)has been a lengthy process due to the complexity of the dataderived from the well.”

SWALA ENERGY LTD hasannounced the completion of thefarm-out agreement for a 25 percent working interest in Block 12B(Kenya) to Compañía Española dePetróleos, SAU (CEPSA), a blue chipinternational integrated oil and gascompany.As previously announced, the farm-out agreement was subject tocertain conditions that includedthe consent of the Kenyan Government and the Competition Authorityof Kenya. These consents have now been received and the farm-outagreement has been finalised and is unconditional. CEPSA is a Spanishintegrated energy company operating at every stage of the oil valuechain. CEPSA is 100 per cent-owned by the Abu Dhabi government’sIPIC (International Petroleum Investment Company) and is Spain'sfourth largest industrial group.Swala will retain a 25 per cent net working interest in Block 12B,CEPSA will own a 25 per cent net working interest and Tullow Oil willhold the remaining 50 per cent net working interest and continue toact as the joint venture operator. As part of the farm-out agreementSwala will have its past costs repaid and be free carried through twoexploration wells up to a maximum of US$7.5mn for each one. Dr David Mestres Ridge (CEO) said, “I would like to again welcomeCEPSA, a company of sound financial and technical standing to theKenya Block 12B joint venture. Completion of this farm-in agreementwill now allow the company to focus its resources on existing operatedassets and the continued growth of our portfolio”.

Completion of farm-out of Kenya’s Block 12B

An aerial view of a Tullow oil rig in Turkana.

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Kenya’s historic offshore discovery

Tullow strikes oil and gas in north west Kenya



AFRICAN OIL & GAS exploration group Bowleven has entered a drill-to-earn agreement with privatecompany Africa Fortesa Corp (AFC) at the Bomono Permit in Cameroon. According to the agreement,AFC will earn a 20 per cent interest in the Bomono Permit in return for drilling two wells, it said. The cost of drilling is expected to be nearly US$15mn and drilling is likely to begin by the end of2014, although the Cameroon government is yet to approve this deal, according to AFC. The Bomono Permit consists of two former blocks – OLHP-1 and OLHP-2, in the onshore extensionof the Douala Basin covering an area of 2,328 km to the North and North-West of Douala City. Wells that were drilled in the 1950s and surface oil seeps and proven hydrocarbons in existingwells were discovered within the Bomono permit. Further explorations, mapping andvolumetrics have revealed multiple prospects and leads with both tertiary and deepercretaceous-aged targets, reports revealed. AFC, through its wholly owned subsidiary, Africa Onshore Drilling, has drilled numeroussuccessful wells onshore West Africa and in Senegal, a number of which are currentlyproducing for gas-to-power


CAMAC ENERGY INC, an independent oil andgas exploration and production company, hasannounced that the Oyo-8 development welloffshore Nigeria was spud 15 June. The Oyo-8well is located offshore Nigeria in OML 120,where CAMAC Energy is the operator andowns a 100 per cent working interest. Thisdevelopment well lies within the Oyo field,which was one of the first deepwater oildiscoveries made in Nigeria. The Oyo field islocated approximately 75 km offshore Nigeriain water depths of approximately 300 meters.Oyo-8 will be drilled by the NorthernOffshore Energy Searcher (mid-waterdrillship) to a total depth of approximately1,800 meters in water depths ofapproximately 310 meters, and will producefrom the Pliocene reservoir. The Oyo-8 well

is expected to commence production in thefourth quarter and, together with the Oyo-7well which will be completed subsequent tothe Oyo-8 well, is expected to significantlyincrease production from the Oyo Field.

THE CHEVRON-OPERATED Nsiko field and theExxonMobil-managed Uge field, located roughly60 km apart, may be co-developed and producedinto the same FPSO facility. This is one of theseveral field development options on the table,in the ongoing discussions among partnersinvolved in OML 140 in which Nsiko field liesand OPL 214, where Uge field is domiciled. Ifthis option is taken, the FPSO will be stationedmidway between the two accumulations.

“Neither of the two fields make the thresholdof 250mn barrels estimated recoverable reserves,which could allow a standalone project at waterdepths of between 1,300 and 2,500 metres”, saidofficials privy to the conversation. Nsiko wasdiscovered in 2003 with Nsiko-1, drilled to a totaldepth of 4257 metres, in 1729 metres of water,hosting a substantial amount of net hydrocarbonpay in multiple zones. One zone was tested inthe well and flowed at 6,500 bpd of high qualitycrude under restricted flow conditions.

Uge was discovered in 2005 in 1,350 metresof water in OPL 214. An appraisal wellconfirmed the discovery and provided the majorinput for a field development plan that calledfor at least two more wells to drain thereservoirs. To develop the field, ExxonMobilinitially planned to refurbish and deploy theFalcon, first used on the company’s shallowoffshore Yoho field. NNPC, the state hydrocarboncompany, rejected the plan.

HOUSTON-BASED ERHC Energy Inc willinvest around US$100mn on explorationand development of one of its blocksoffshore São Tomé and Principe, thecompany's president said. São Tomé, a tinyformer Portuguese colony in Africa's Gulfof Guinea, is surrounded by oil-richneighbours but has failed to find oil afterseveral years of prospecting. Othercompanies operating in the country includeEquator Exploration Ltd on blocks 5 and 12,Sinoangol - a joint venture betweenChina's Sinopec and Angolan state oilcompany Sonangol - on block 2, andNigeria's Oranto Petroleum on block 3

ERHC to invest US$100mnin São Tomé block

OML 120/121 oil exploration blocks.

STUNG BY CRITICISM of poor performance on assets it took over from Shell, state-ownedNigerian Petroleum Development Company (NPDC) is threatening aggressive rig activity thatwill boost gross output and alter media perception of incompetence.The company says it plans to have six rigs on different locations in OMLs 26, 30, 34 and 42 bythe end of 2014, and stay on course with high drilling and field development activity in the nearterm. The first of the rig moves is to Ogini-5 on OML 26, where the Durga-2 rig, owned by BritishOil Gas Exploration (BOGEL),will be active. ”The rig will be drilling Ogini-6 after this and we’rehoping to boost gross production on the lease from about 5,100 bpd to 8,000 bpd.”, NPDCofficials said. Ogini-5 will be the first well drilled on any of these four leases since 2011, whenShell led the divestments of the 45 per cent combined equity belonging to itself, Total and Eni,to various Nigerian companies. After the divestments, the NNPC had transferred its 55 per centinterest to its subsidiary, NPDC, as operator of the blocks. The buyers had paid betweenUS$102mn and US$850mn for the stakes, but three years on, OMLs 26, 34 and 42 havestruggled at either the same output or have seen a decrease. Conversely, Seplat, which tookoperatorship of the same kind of asset from Shell, just a year earlier, has grown gross outputfrom less than 20,000 bpd to more than 60,000 bpd. NPDC says it is deploying two rigs on OML 34 to drill two oil wells on the Utorogu field and threegas wells in Ughelli West and East. “The plan is that BOGEL Durga 3 will move to drill Utorogu 36and 37, which are to appraise the new reservoir on Utorogu 35 as well as develop existingreservoirs. The swamp rig Imperial, owned by Depthwize, will be drilling Opuama 8 in OML 40 ina matter of months. Dredging has commenced and hydrographic surveys have been done. NPDCis hoping to add 3,000 bpd to current 1,200 bpd production on the lease when the well is tied in.NPDC has OML 42 drilling in its sights for 2015, but it says it is committed to drilling two wellson Olomoro-Oweh, as well as Afiesere, in the otherwise prolific OML 30, some time in 2014.

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Chevron, ExxonMobil toshare FPSO

NPDC threatens ‘surge’ in drilling activity

CAMAC spuds Oyo-9 well in OML 120


Bowleven signs agreement with Africa Fortesa



WOODSIDE PETROLEUM LTD has finaliseda deal to farm-in to the prospective basinof Lake Tanganyika in western Tanzania. The oil and gas producer says BeachEnergy Ltd has accepted its offer toacquire a 70 per cent participating interestin the Lake Tanganyika South Block andrespective Production Sharing Agreement. While the commercial terms have notbeen disclosed Woodside believes thefarm in provides the company with anopportunity to secure a large acreagefootprint in an exciting and underexploredoil prone frontier basin.

CEO Peter Coleman said securing the acreagerepresents another step forward in buildingWoodside’s global exploration portfolio. Subject to government and regulatoryapprovals the proposed work programmesincludes seismic studies with an option forfuture drilling and operatorship.

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Woodside securesTanzania farm-in


AFRICAN PETROLEUM CORP has enteredinto an agreement with Buried Hill Africa Ltdto farm-out a 10 per cent interest in BlockCI-509 offshore Côte d’Ivoire in return forBuried Hill funding 21.1 per cent of the costof the next exploration well to be drilled onthe block and an additional cash payment toAfrican Petroleum representing 10 per centof past costs incurred. African Petroleumwill continue as operator on the licence. Completion of the farm-out agreement issubject to the satisfaction or waiving ofcertain conditions precedent, which, apartfrom one pertaining to government approvalof the transfer, must be satisfied or waived nolater than 1 November 2014 (unless extendedin accordance with the farm-out agreement). African Petroleum operates eight licenceslocated in fast-emerging hydrocarbon basinsoffshore West Africa. The company isactively seeking partners to share risk andreward across all assets. In line with thisclearly communicated strategy, dialoguewill continue with other potentiallyinterested parties with a view of securing anadditional farm-in partner for Block CI-509.

Farm-out agreement inCôte d’Ivoire

S08 ORA 4 2014 - E&P C_D_Midstream_Layout 1 7/24/2014 12:52 PM

PEM


Source: Infield Systems Ltd.

The Infield Systems Ltd. Rig Count tracks industry-wide offshore rigs engaged in drilling and related operations, which include drilling, logging, cementing, coring, welltesting, waiting on weather, running casing and blowout preventer (BOP) testing.

AUSTRALIAN OIL AND gas firm Woodside has finalised an agreement withChariot Oil & Gas to farm-in to the prospective Doukkala Basin offshore northwestern Morocco.

Under the agreement Woodside will acquire an initial 25 per centparticipating interest in the Rabat Deep Offshore permits I-VI. The agreementincludes an option to acquire an additional 25 per cent and operatorship in thesepermits for a capped well carry obligation. The agreement is also subject torequired government approvals. These undrilled permits are 10,782 sq km in areaand water depths range from 150 to 3,600m.

Woodside CEO Peter Coleman said the farm-in provided an opportunity tosecure a large acreage footprint in an emerging petroleum province that isprospective for both oil and gas.

“Exploration in this basin aligns with our strategy to secure new internationalgrowth opportunities in frontier and emerging basins characterised by materialityand quality,” said Coleman.

“This opportunity has been supported by Woodside’s disciplined approach tostudying regional petroleum systems, including the Atlantic margins, and is agood fit with our core capabilities in deepwater exploration and production.”

The Rabat Deep permits complement Woodside’s acreage position in thenearby Canary Islands and are a further demonstration of continued efforts tobuild a global exploration portfolio.

Woodside farms into ‘prospective’ basinoffshore Morocco


Sonatrach signs deal with DodsalALGERIAN STATE ENERGY company Sonatrach has signed aUS$618mn deal with India's Dodsal Engineering and Construction fora project to maintain oil output at the OPEC member's main HassiMessaoud oilfield.

The sprawling North African energy exporter has been struggling toincrease oil and gas output, on which it heavily relies to financeeconomic development and programmes that help ease social tensions.This deal covers the building of a gas compression unit with capacity of24mn cmd and a 180-km-long gas pipe network, Sonatrach said.

The project, to be implemented in 36 months, will help keepproduction at the field at its current level of 400,000 bpd, Sonatrachchief Abdelhamid Zerguine said at the signing ceremony. Zerguinesaid Sonatrach was planning more projects to boost production inHassi Messaoud.

A major gas supplier to Europe, Algeria has also planned a thirdboosting complex that will allow it salvage an additional 490 bcm ofgas at its main gas field of Hassi R'mel, Zerguine said.

Said Sahnoun, Sonatrach vice-president for upstream activities, saidoutput would see a "considerable rise" from now to 2018 when thecompany starts production from its fields of Tinhert, Hassi Bahamou,Hassi Mina, Touat and Reggane.

JUNE 2014 - OFFSHOREJUNE 14 MAY 14 VARIANCE JUNE 13 MAY 13 VARIANCE

Country Offshore Offshore From Last Month Offshore Offshore From Last MonthANGOLA 22 22 0 18 19 -1NIGERIA 16 17 -1 19 17 2GABON 7 7 0 4 4 0CONGO (BRAZZAVILLE) 3 3 0 6 5 1MOZAMBIQUE 2 2 0 4 3 1GHANA 2 1 1 3 3 0CAMEROON 2 3 -1 4 3 1EGYPT 15 15 0 19 17 2TUNISIA 2 2 0 2 2 0SOUTH AFRICA 3 3 0 1 1 0TANZANIA 2 2 0 2 2 0EQUATORIAL GUINEA 1 0 1 2 2 0NAMIBIA 1 1 0 1 1 0LIBERIA 2 2 0 0 0 0LIBYA 1 1 0 0 0 0TOGO 0 0 0 1 1 0SENEGAL 1 1 0 0 0 0BENIN 1 1 0 0 0 0KENYA 0 0 0 1 0 1MOROCCO 0 1 -1 0 0 0MAURITANIA 0 1 -1 0 0 0TOTAL 83 85 -2 85 82 7


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IN THE EVER expanding oil and gas industry in Africa that has seen figuresdouble over the last two decades, ITECO has been supplying oil country tubulargoods (OCTG) with a stronghold in the oil and gas supply industry for the last 18years and a presence in more than 10 countries through its sales offices andstockyards.ITECO Middle East has executed a contract for the supply of casings and tubingsfor the Menengai Geothermal Project in Kenya on DAP basis (a typical exampleof mill to well concept).Aware of the critical time constraint, ITECO extended its working scope and withassistance from a local team in Kenya embarked on a mission never donebefore.The project called for ground co-ordination with the involved parties, such asport authority, ground handling agent, trucking crew, crane crew and client’screw. The co-ordination and task scheduling resulted in completing the jobahead of schedule without any major damages.Project highlights included:6 10,000 tons of carbon steel pipes (casings) transported to Menengai

drilling site6 450 trailers ferried the pipes6 300,000 km distance covered without any loss time incidents.ITECO’s expertise is its understanding of the local market. It is a trading,distribution and logistics business focussing on learning about the customers soto provide them with the finest quality and best value products and services.The leading products and services provided by ITECO are recognised by majorinternational oil and gas companies as well as renewable energy companies.ITECO is currently seeking trade partners in Africa.

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DAP contract handled by ITECO in Kenya


POWER COMPANY GIGAWATT Mozambique has secured thefinancing to build a 100MW gas-fired power plant in the Africancountry, which should be in operation late next year, one of itsadvisers said.The US$200mn project located at the Ressano Garcia border withSouth Africa will inject much needed power into the rapidlyexpanding country, which currently has very limited plant capacityto produce electricity from natural gas.Gas is seen as an attractive electricity source for Mozambiqueafter major gas discoveries off its central coast. Its Rovuma basinis estimated to hold more than 150 tcf of gas, enough to supplyGermany, UK, France and Italy for 15 years."Construction will now commence on the project, with theintention being that the power plant will be onstream in Q42015," Eaglestone, an investment bank that advised the deal, saidin a statement.Eaglestone said equity was provided by a consortium ofMozambique shareholders, Gigajoule Power, Old Mutual LifeAssurance Company and WBHO Construction.Privately-owned Gigawatt Mozambique already has a take-offagreement with the state-owned utility Electricidade deMocambique (EDM) but it hopes to attract industrial clients,whose higher tariffs would make the project sustainable over thelong-term.EDM needs to provide more than 760MW but receives only 500MW from the Cahora Bassa dam at a price of 1,080 meticais(US$35) per MW, according to a World Bank report on the country. The cost of purchasing electricity from other suppliers such asAggreko and South Africa's Eskom is significantly higher atbetween US$145 and US$240, while EDM's average sale price isonly US$76.South Africa's Standard Bank was lead arranger and underwriterfor debt financing.

Gigawatt Mozambique secures financing


REMOTE LOCATIONS PRESENT manychallenges to the health ofemployees who work in them. In theevent of an illness or injury, an

evacuation would take a much longer timethan can be expected in an urban setting.During this period, the patient’s condition maydeteriorate leading to disability, or even death.Remote locations are also associated withhigher risks (eg, hot or cold extremes indeserts or polar regions, or infectious diseasesin tropical areas), limited access to basicnecessities (eg, clean water) and limitedsupplies (due to logistical challenges of re-supply). Remote locations are also oftenassociated with limited communicationoptions (eg, the lack of telephone lines,mobile network, satellite communications orInternet). This means a higher likelihood ofharm to health (unless appropriate preventivecontrols are put in place). It also means thatwhen people do get ill or injured, thelikelihood of developing a complication or thecondition worsening is high, unless mitigationsare put in place.

Higher stakes in AfricaIn Africa, the stakes are even higher asappropriate medical facilities that can managecertain injuries are often located in a differentstate or even a different country. Therefore,additional protocols need to be put in place tomake sure that these extra risks are mitigated.

For nearly five years the Flying DoctorsNigeria - a proudly Nigerian company - hasbeen supporting the energy industry acrossWest Africa by providing emergency medicalevacuation by plane and helicopter for mostremote locations.

Its fleet of aircraft include both twin andsingle engine helicopters as well as long and

short distance jets. All of its flight physiciansare critical care doctors/anaesthetists withhundreds of hours of combined medevacexperience.

The company provides both local andinternational evacuations from its aircraftbases in Lagos, Abuja and Port Harcourt in aslittle as thirty minutes.

In addition to the medical evacuation, theFlying Doctors has provided medical staffingsolutions for remote locations, certified firstaid training, land ambulances and medicalaudit services.

Remote healthcareRemote Healthcare (RHC) encompasses thehealth activities involved with the prevention,diagnosis, and treatment targeted at thoseworking in remote locations. It represents aset of controls and mitigations that minimisethe health risks of workers in these locations.It builds on the existing controls already inplace in the energy sector and its associatedmaritime activities in such a way thatenhances their effectiveness.

Flying Doctors Nigeria aims to make surethat the remote locations in which a clientworks do not affect the standard of healthcarethey receive. The company believes that thesame standard of healthcare that is available

in an urban centre can be achieved in remotelocations with the correctly trained staff,emergency planning and equipment available.

The Flying Doctors Nigeria has receivedvarious international and national awards forits works. It is also a member of the BritishSafety Council and recently became the firstcompany in Africa to become a training centrefor their accredited first aid courses. ■


Remote locations are alsooften associated with

limited communicationoptions. This means a

higher likelihood of harmto health.

33

The search for sustainable energy/resource solutions has taken Flying Doctors into someof the world’s most remote and often hazardous working locations. For the oil and gasindustry these include distant swamp locations, offshore vessels, ships and forest locations.

Upgrading medical support in the

oil & gas industry


S09 ORA 4 2014 - Technology A_Layout 1 7/24/2014 2:35 PM


TTHE HYDROCARBON INDUSTRY - from the extraction and processingof oil and gas, right through to its eventual sale and transportation -presents unique health and safety challenges for all operators acrossthe globe.

Working in the cramped, tight conditions of an offshore oil rig, or apetrochemicals facility onshore, or even driving a tanker down the freeway, thevolatile and highly flammable nature of the product means safety is uppermostin the minds of all players.

Things are no different in Africa’s buoyant energy sector.In the past decade or so, West Africa - particularly Nigeria and Angola - has

emerged as a key world oil producer of note, joining the more establishedcountries of North Africa, the likes of Libya and Algeria.

With more new and upcoming producers across the continent, including anascent gas export industry taking shape off the coast of eastern Africa, theinterest in all things safety is poised to increase significantly.

Leading industry expertiseLeading industry players such as Dräger and Tyco Fire & Integrated Solutionsoffer a plethora of fire safety products and services to oil and gas companiesacross this market and others.

These range from public address systems and alarms, right through tobreathing apparatus, fire extinguishers, and even escape equipment for whenthings go wrong.

Another well-known company, Intertek, specialises in rig safety training.No one wants to see life boats launched from a rig - perhaps one of the

industry’s most dramatic spectacles to witness - but they are welcomeadditions should a fire break out in such a confined space.

Luckily, Africa’s offshore industry is yet to experience any major fire disastersor explosions along the lines of the 2010 Deepwater Horizon tragedy in the US’Gulf of Mexico that cost 11 lives.

Still, oil companies and workers are tested every single day to make surethat continues to be the case.

Safety is never something that can be taken for granted, especially in such adangerous industry as the oil and gas business.

Prevention better than cure Of course, prevention is always better than cure, so the industry priority will alwaysbe on making sure there are no fires, accidents, or slip-ups in the first place.

This means the front line of defence is always first rate skills and trainingfor workers, and in maintaining the integrity of equipment, from pumps andpipelines, through to control switches and compressors.

But zero risk is not possible and this means the management of safety andfire hazards is perhaps the most important task of all facing all industry players.

And so companies working in this space are always exploring ways to makethings easier for operatives.

A recently-launched Dräger mobile app, for example, helps employees tonavigate through the jungle of hazardous materials they may be exposed to inthe oil and gas environment.

The free app, called ‘Voice’, makes it easy for staff to quickly review safetyrecommendations for more than 1,700 hazardous substances.

Available in English and German, it also suggests products to protect usersfrom these substances.

Putting essential information like this at the fingertips of staff has become atheme of technology development in the energy safety niche, in a similar waythat it has inside the ordinary home.

The bottom line is that these state-of-the-art advances each play anincremental role in helping to save human lives from fire and other risks.

Every second countsAnd then there are the industry’s lifeboats which provide, quite literally, alifeline should things go terribly wrong.

In a similar way, technology has evolved here too.The Norwegian GES50 MK III escape boat - dubbed the world's most

advanced, robust and safe lifeboat by makers Norsafe - is designed to fall frommore than 50 metres, offering rig workers a near immediate emergency escapeshould they need it.

The Deepwater Horizon oil platformshortly before sinking.

The front line of defence is always first rateskills and training for workers, and in

maintaining the integrity of equipment.

Fire

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34

Fire safety challenge spurs oil and gas industry to find innovative new solutions.

Preventing the

unthinkable



Tolmann Deepwater Survival Training Centre, a world class Facility built solely for the purpose of addressing the safety, survival and training needs of persons working in and around Deepwater facilities and installations comes complete with Accommodation facilities located within the grounds of the school, for the ease and comfort of our esteemed clients.In achieving this laudable objective, we have put in place global standard infrastructure that demonstrates Health, Safety, Environment and Security challenges which are of immense value to deepwater operations and maritime related activities.

TBOSIETHUET/SASBasic Fire Fighting & Self RescueBasic First AidOffshore Safety InductionFOET

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OFFICE/TRAINING FACILITIESOffshore Safety Training Centre (OSTC)58 Trans-Amadi Industrial Layout, Port HarcourtTel: +234 803 312 9962, 0803 760 0151, 0809 990 1280 Email: [email protected]. Website: www.tolmann.com

International CentresTexas Engineering Extension Services (TEEX) USASurvival Systems Ltd. Canada

We offer the following courses at the center among others:


During tests, however, the vessel plunged successfully from more than 60metres.

It has been designed to always land upright, is fully equipped withseatbelts, and has enough capacity to hold 70 people who can climb on boardin just one and a half minutes.

Lifeboats are also deployed on mobile drilling units.Maersk Drilling is to equip its soon-to-be completed XL Enhanced 4 jack-up

rig with seven ‘Boat-In-A-Box’ lifeboat and rescue systems from Danish firm Xervo.Again, with lifeboats hopefully never used for their intended purpose - like

airbags in a car - this is an area where maintenance is critical to ensure allsystems perform when required.

Research has gone into other areas too for when things do go wrong.Dräger, again, recently re-engineered its safety hood for workers that gives

them valuable breathing time if they are escaping from a fire, or smoke, oranother toxic substance.

The Parat escape hoods are equipped with high-performance filters, enablingworkers to breathe even in the harshest of conditions.

Emergence of local playersThere is also a growing role for indigenous companies servicing this importantarea too, a popular theme especially in Nigeria right now.

The Nigerian government is keen to see local players take on moreresponsibility within the nation’s strategic energy sector, from upstream oilproduction right through to the smallest of industry services.

Seafloat Marine Services Limited has emerged as one of the leadingindigenous marine safety specialists in the country.

It offers life craft testing, inspection and certification, among other services,and is keen to expand its presence throughout West Africa.

It is also responsible for fire extinguisher inspection and service onboard rigsand other installations.

Seafloat’s client list includes most of the big multinationals working inNigeria today (the likes of Chevron, Total, Addax), plus a roster of local andoverseas service companies and drilling firms.

Like most other players active in this niche space, it is all valuable work, butnot often recognised until after things go wrong.

Still, with oil and gas production tipped to rise in Africa, it is a market that ispoised to see yet more growth in the years ahead.

One area in which oil companies will never cut corners is safety. ■


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Maersk Drilling is to equip its soon-to-be completed XL Enhanced 4 jack-up rigs withseven ‘Boat-In-A-Box’ lifeboat and rescue systems from Danish firm Xervo. Photo Xervo.

The Nigerian government is keen to see localplayers take on more responsibility.


BLYTH DRAEGER MARINE & Offshore, part ofthe Dräger Group, is among the leadingproviders of safety solutions in the Oil & Gasindustry with its Drägersorb product used bysaturation divers.With safety one of the top priorities for theHealth and Safety Executive’s OffshoreDivision, and with manned diving anessential part of operations in the Oil & Gasindustry, Dräger is passionate aboutprotecting lives.On offshore oil and gas assets it is criticalthat divers are equipped with the best safetysolutions to enable them to remainsubmerged in really deep water for longperiods of time.Drägersorb (soda lime) gives offshore divers alifeline after they have carried out challengingunderwater inspections and maintenance workon installations in the field.Trips up and down from great depths riskcausing ‘the bends’. Therefore, due to the

rising demand for deepwater operations up to300MSW and up to 28 days inside adecompression chamber system on board aDive Support Vessel (DSV). On board every DSV as part of the entiresaturation diving system (SAT) are life SupportSystems with Environmental Control Unit (ECU)which contain Drägersorb-ECU (soda lime). Anaverage ECU will contain around 20 to 30kgsoda lime, that needs to be exchanged on aregular basis during diving operations.Depending on the SAT system used it willcontain different numbers of ECU units.Divers’ lives depend on these tiny whitegranules which absorb carbon dioxide (CO2)while they wait in a decompression chamberfor their bodies to readjust to surface airpressure. Exhaled air contains around four percent carbon dioxide and the soda lime removesthis CO2, so the remaining air - enriched withoxygen - can be fed back into the breathingcircuit. On average, 1kg gram of soda lime can

absorb up to 120 litres of carbon dioxide.An integrated gas detection system on boardthe DSV is able to pick up when theDrägersorb is low and needs to be replaced.It can be refreshed by an on-board technicianwho looks after the diving team.Frank Pietrowski, business developmentmanager for Dräger, said it’s interesting tosee performance tests from established usershave found capacity of Drägersorb to beapproximately 20 per cent better than thecompany’s main competitors.

Dräger explores new depths with Drägersorb

The Norwegian GES50 MK III escape boat - dubbed the world's most advanced, robustand safe lifeboat by makers Norsafe - is designed to fall from over 50 metres, offeringrig workers a near immediate emergency escape should they need it.

Protecting the lives of oil and gas saturation divers,operating in deadly environments


S10 ORA 4 2014 - Technology B_Layout 1 7/24/2014 2:50 PM

Oil Review Africa Issue Four 201438 www.oilreviewafrica.com

AAS GAS SAFETY and breathing experts, we work in all manner ofirrespirable environments where equipment, training and teamworkare the cornerstones of ensuring the safety of staff and partnercompany staff, as well as that of third parties. This is true of any gas

environment, and at Sabre Safety we deal with some of the most threateningones to be found on the planet.

As a former driller, I have first-hand experience of the hazards of dealingwith H2S at the oil-well. A natural by-product of organic decay, H2S is unlockedas a result of drilling and well-servicing operations. Oil and gas fields, tankersand production facilities all have the potential to contain significant amounts ofH2S. It is a hugely challenging gas to deal with.

H2S is a killer gas that acts as a broad spectrum poison when inhaled bymammals. Broad spectrum means that it can affect many different systems inthe body – from the respiratory, pulmonary and circulatory to the digestivesystem. It has claimed the lives of numerous workers around the world inincidents that might have been prevented had they known more about theproperties of H2S. The gas occurs naturally in geological formations, withcertain geological periods being more likely to contain it than others. Higherrisk geological periods are: Triassic; Permian; and Carboniferous.

All petroleum industry jobsites are potential H2S locations. The effects ofthis neuro toxin gas can range from mild discomfort to death. It is so toxicthat it quickly overwhelms the nervous system, with initial inhalationovercoming the sense of smell. At higher concentrations, the effects areimmediate and can be catastrophic.

H2S is colourless and therefore invisible – there are no visual clues to itspresence. Although it has a distinct ‘rotten eggs’ odour, it attacks and quicklyimpairs a victim’s sense of smell, even in low concentrations. Quite simply, itcould be fatal for a person to rely on their nose as a detection device: there areno second chances.

As H2S is heavier than air, it tends to settle in low-lying areas such as pits,cellars or tanks. It is a potentially explosive as well as a poisonous gas. Mixedwith the right proportion of air or oxygen, H2S can ignite. The ignition range is4.3 and 46 per cent of atmosphere and it can auto-ignite at temperaturesaround 260˚C. Add to that its highly corrosive qualities, and the fact that it issoluble and can therefore be present in any container or vessel used to carry orhold fluids, and you have a formidable adversary.

In terms of toxicity, five parts per million (5 PPM) is the long-term exposurelimit. A dose of 500 – 700 PPM will cause loss of consciousness and deathwithin 30 minutes to one hour. A dose of 1,000 PPM (the equivalent of one tenthof one per cent) will cause immediate unconsciousness and death within a fewminutes – even if the casualty is removed to fresh air. As can be imagined, thereis absolutely no margin for error when working with this toxic and highlydangerous gas. It means that everything we do as a company has not only tomeet but to exceed safety requirements, with multiple backups to ensure thatthere is no interruption to breathing systems under any circumstances.

Offshore African operationsWherever the company operates, Sabre’s work is really all about coming upwith particular BA safety engineering solutions. Recent work in Africa hasincluded operations on a drill ship off the coast of Kenya. The ship had abreathing air (BA) system on board that was installed 10 years ago, and that hadbeen tested routinely but had never been used.

Sabre carried out a full inspection to establish what was needed to modifythe system to get it to optimum performance – changing many of the fittings

and overhauling the system generally, as well as making recommendations forthe future. In the end, Sabre’s work meant that the well was completed using acombination of its system and the existing system. The original main hardpipesystem was used and Sabre deployed its own personnel lines and retractor reelsfrom the existing outlets, which were modified in the auto-selectors to ensurethat it all functioned together.

Incidentally, the project also entailed working with our Norwegian partnersVestteknikk to move forward and sort out the technical solutions. In a trulyinternational industry, expertise really does come from all parts of the world,and the sum of the whole is greater than the individual parts. There is anotherpoint to this too: ISO standards and everything that goes with them are appliedto everything that Sabre does, whether it’s in the North Sea or off the coast ofAfrica, which is a major consideration for customers.

On another ship off the coast of Benin, the oil company involved did notwant a cascade system on board, preferring instead the modification of a system.Sabre used BA compressors and a system similar to one it has been using on theBrents in the North Sea. running HP lines to the work sites where they wereneeded; Sabre had the same manifolds and reducing stations as on the Brentsand connected personnel lines on to them. Getting to the drill floor was quitechallenging as it was essential that bulkhead integrity was maintained.

Adapting way s of working to suit local conditionsSabre has recently deployed off the coast of Malta as part of a project that hasinvolved drilling operations there, with a further two initial wells off the coast ofMorocco. This project has involved the delivery of an extensive cascade breathing

A new wellhead is lowered intoposition-PA270121.

Tech

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Meeting African onshore and offshore

H2S challenges



system. The rig does not have pressurised accommodation so it cannot be usedas a temporary refuge. This would normally be our preferred way of working asmost rigs have such accommodation. In the absence of this, we had to set up anexternal breathing muster station for around 130 people and provide much moreairline breathing apparatus. Once it is fully rigged up the system will stay inplace wherever the rig moves. Sabre would normally supply 140 standard Elsabreathing sets, but here we are having to supply Elsa musters with an airlineattachment so that people can connect to a breathing cascade system. Awireless gas detection system has also been installed on the rig.

As a BA specialist company, Sabre does not make people wear BA unlessabsolutely necessary. That is one of our reasons for using pressurisedaccommodation as a temporary refuge, wherever possible, because people canmuster there without BA. In such situations, people still of course have to donBA to evacuate the rig and get out of the refuge, but the principle of only usingBA when absolutely necessary remains.

Meeting onshore challenges – location and logisticsOnshore challenges for safety companies include the sheer diversity oflandscape: onshore drill site locations can vary from desert to jungle, andfrom mountain to farmland. Recent work in Mauritania for two major oilcompanies has focused on exploration projects in the desert, where sandstorms and high temperatures combine to make for a difficult workingenvironment. In order to mitigate risks, the system on the HP side isdesigned to be within a container. Staff still have to be careful moving in andout of the container, but the system itself is protected. Only LP distributionlines and BA sets, which can be cleaned off, are exposed to the elements.

Logistics can be daunting in such locations. It is all very well being able todo a job in one relative ‘easy’ location, but quite another to be able to work insome of the most inaccessible and inhospitable terrain on the planet. In both

cases, however, oil companies will expect H2S companies and other suppliers tohave robust and failsafe measures in place to get people and equipment to theright location and at the right time – always. The ability to deliver to scheduleand specification across the world and at short notice is of primary importance.Location spares and additional equipment have to be planned ahead of theequipment package being mobilised to the site. It entails envisaging problemsand coming up with solutions before the problems are encountered.

Dealing with emergenciesOver the years Sabre has been called out to numerous well blow-outs with suspectedH2S. An incident that occurred in Libya highlighted the issues faced by specialistcompanies as the Sabre team mobilised within 24 hours of receiving the call.

Detailed knowledge of local customs regulations meant that the Sabre teamwas ushered through and was on-site and quickly operational alongside the wellcontrol company – all within a couple of hours of arriving in Libya. It took wellcontrol two days to set up, during which time Sabre took samples from the blow-out with full BA sets and from the tree where it had blown. The company was alsotasked with monitoring conditions around the perimeter of the site, depending ontime of day and wind direction; we were trying to establish where the plume waslanding so that we could take samples. Precise country knowledge in terms ofprocedure was a decisive factor in a successful deployment.

The expansion of Oil & Gas operations into ever more challenging areas ofthe world is driving demand for specialist services provided by companies suchas Sabre Safety. Whether in exploration or decom work, Oil & Gas operators arelooking for innovation and expertise that underpin their activities against abackdrop of tight margins. This is an area in which specific expertise and thelatest technology and training can really improve safety and profitability. Thecontribution of specialist service companies is set to be an increasingly vitalpart of Oil & Gas operations all over the world. ■

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28- 30 OCTOBER 2014

SHERATON HOTEL | ABUJA | NIGERIA

PRESENTS:

Conference & Exhibition

PRODUCED BY:

Strategic 2- Day

Conference

Unparalleled

Networking

Opportunities

International

Exhibition Featuring

Technical Seminars

Regional Gas Master Plan

LNG Projects

Latest Techology Solutions

Exploration & Production

Gas Market Dynamics

Pipelines & Infrastructure

Gas to Power & Processing

S11 ORA 4 2014 - Technology C & D_Layout 1 7/24/2014 2:56 PM


NNEW TECHNOLOGY ADVANCES, high oil prices, and a generalscarcity of resources worldwide, means squeezing every barrelfrom each and every reservoir is now a top priority for all 21stCentury energy companies.

That’s especially true in some of Africa’s more established producers, thelikes of Nigeria and Gabon, and the North African states, where oil and gas hasbeen flowing for decades.

It’s a similar story too in many other oil producing territories of the world,including the Middle East Gulf.

However, even relatively newer producers are facing up to this same challenge.Chad, for instance, is looking to halt declining production from its

maturing fields. Its output is now down to around 100,000 bpd, from a peak of 176,000 bpd

in 2005; that’s less than 10 years ago.Similarly, Gabon’s oil production declined to 11mn tonnes in 2013 from

11.6mn tonnes in 2012. A modest pick-up is expected this year, due to operators’ new techniques to

drill marginal fields, but production “will at best stagnate in 2015”, according toratings agency Fitch.

Strategic interestIndeed, for all of these locations, arresting - and even reversing - the declinefrom mature oil fields is nothing short of a matter of vital national interest; ameans of sustaining cash flow into the wider economy as a whole.

For poor countries especially, such as Chad, this need becomes evenmore pressing.

While drillers scouring frontier locations, such as the deep offshore (thinkMozambique, Ghana, among others), to unlock big new oil finds captures theimagination more than anything else, it is perhaps the quiet work behind thescenes of the scientists, geologists and other technicians, that is more valuablein the long-run.

Only by maximising value from these existing assets - whether oil, gas orindeed other minerals - can companies, and countries, benefit fully from theirnatural resources.

It’s important from a global perspective too, making available precioushydrocarbon reserves to a world at a time when many perceive growing scarcity.

But it is a great challenge too, and one that varies considerably from field tofield, and place to place.

Oil recovery factors vary wildly from one location to another, from less thanfive per cent to greater than 80 per cent.

Perhaps a reasonable estimate of the average oil recovery factor around theworld is in the region of 37 per cent.

Anything drillers can do to raise this number - even fractionally - can makea massive difference to the overall profitability and longevity of a field.

Proper field management can improve recovery rates by addressing bothnear- well conditions and the reservoir as a whole.

This strategy is common practice today.

Technology leapLuckily, the ability of operators to extend the life of their fields has never been greater.

While a strong oil price environment and growing resource scarcity provide themarket backdrop and economic justification, it is the advance in technology thathas made it all possible.

New developments, such as the rise of horizontal drilling, have given

operators more tools with which to unlock and access underground oil andgas pockets.

Computer modeling and seismic technology also offer greater visibility intoreservoir systems than at any other time in history.

As well as prolonging the life of mature fields, these innovations - many ofwhich have been pioneered in places like the North Sea and the Middle East -have also been used similarly to access new deposits, both onshore and offshore.

Other new tools are also available for engineering an entire field.Acquisition of repeat seismic surveys, called a time-lapse seismic study, can

provide valuable information for field optimisation.In addition, changes in fluid saturation and composition, or the lack of change,can indicate areas of the field that would benefit from more wells, or wells thatneed work-overs.

Africa contextThese are issues facing all operators in Africa today.

For Total, one of West Africa’s leading producers, the management of itsmature fields portfolio is a critical strand of its business.

In Congo-Brazzaville, while it pushes further offshore in search of newdiscoveries, the emphasis is very much on maintaining production flow fromexisting onshore and shallow water assets.

About 60 per cent of the group’s production in the country comes frommaturing fields, such as Nkossa, one of Congo’s flagship developments.

Without any intervention, Total says the natural decline rate from these fieldswould be around 15 per cent; the goal is to limit the decline to five per cent.

The strategy includes ‘heavy intervention’ methods (production from newlayers, well activation conversions, increased recovery on developed reservoirs),plus ‘light intervention’ (dewaxing, gas lift, perforations, acid stimulations).

And the success is there for all to see: in 2012, for instance, re-entry wellson the Yanga and Sendji fields added a further 5,000 bpd of production.

As well as the redevelopment of these mature fields, the focus is also on thedevelopment of satellite - often previously marginal - fields, and theexploitation of non-conventional reservoirs; these include Tchendo Senoniantight oil and Sendji C viscous oil.

This work complements the search for new oil and gas deposits infrontier zones too.

Total will add 140,000 bpd to its local capacity via the Moho Northoffshore project, an indicator perhaps how oil companies still see biggerimpact and more immediate returns from new finds, rather than squeezingincremental barrels from existing reservoirs.

The Moho Nord project will target additional reserves in the southern part of thelicense and new reserves in the northern part.

The ability of operators to extend the life oftheir fields has never been greater.

Tech

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yIn search of eternal youth: the battle to prolong oil flow from Africa’s mature fields.

Live long

and prosper


Gas sector It is a similar story when it comes to maintaining output from Africa’s gas fields too.

It is an area that requires not only technology but also extensive capitalinvestment too.

In one of Africa’s leading gas exporters, Algeria, there are multiple projectsin play to extend the life of its producing fields.

UK services group Petrofac, for instance, is working with Italian contractor Bonattito extend the life of the Alrar gas field on behalf of state energy company, Sonatrach.

The field, in southeast Algeria, has been in operation since 1987.The US$650mn project encompasses engineering, procurement,

construction, and commissioning services for the development of new

separation and booster compression facilities. But this kind of thing all comesat a cost, as the Alrar project illustrates.

The days of ‘easy oil’ are widely considered to be over, even in fertile lands suchas the Middle East, and that goes not only for discovering it, but also in producing it.

It means prolonging field life is an essential part of the life cost matrix forany upstream asset.

This additional cost burden, in maintaining production from ageing fields,and reversing decline, is something that operators must now routinely factor in.

Engineering and technology input also shifts throughout the life cycle of anyfield, as needs and demands dictate.

Mature fields typically have increasing water cuts, for instance, both fromnatural aquifer encroachment into the producing zones and from water-injectionprogrammes to sustain oil flow.

Mounting problem But with more oil and gas fields in Africa maturing it is a growing issue for all players.

According to the US Energy Information Administration (EIA), production isset to drop in a multitude of countries - Sudan and South Sudan, EquatorialGuinea, Cameroon, Congo (Kinshasa), Mauritania, as well as Chad and Gabon -because of the natural decline in mature fields, which will not be offset bysufficient output from newer finds.

While other countries, like Nigeria and Congo (Brazzaville), may be facingsimilar struggles with mature fields, new production will at least keep outputlevel - for now.

It is only in Africa’s newest and upcoming producers - the likes of Ghana,Uganda, Tanzania and Mozambique - where the challenge of mature productionhas yet to be faced.

With technology advancing at such pace, there will be plenty of lessons andexperience to be had for these new and emerging producer states. ■


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43www.oilreviewafrica.com

With the Alrar Gas Field Extension project, Sonatrach is aiming at maintaining theplateau production of this depleting gas field.

Africa’s gas fields is an area that requires notonly technology but also extensive capital

investment too.



FFOR ALL THE technologicaldevelopments in the oil & gas industryover the past decade, global oil & gasrecovery rates remain remarkably low.

Today, according to Italian operator Eni, averageworld oil recovery rates are 35 per cent against atechnical limit estimated at between 70 and 80per cent. Many recovery rates are much lowerthan this in the 20’s.

Furthermore, the pressures on increasing oreven just maintaining current recovery rates is onlylikely to increase as companies move into evermore complex areas and challenging geologies.

Africa is no exception to this as operatorscontinue to tap into frontier areas offshore Westand East Africa. This is in addition to the complexgeologies onshore, such as the East African Rift –the largest continental rift on Earth that extends3,500 km from the Red Sea in the north toMozambique in the south.

Such large, complex and high-costenvironments are likely to put huge pressures onprofitability and focus operator minds even more ongaining maximum returns from their fields for aslong as possible. Resource owners today aredemanding best-in-class technologies to maximisethe value of their existing and future assets andextend the field’s lifecycle.

It’s against this context that reservoirmodelling has a crucial role to play in unlockingreservoir value, extending field life and increasingreservoir recovery.

Role of reservoir modelling3D reservoir modelling today is the standardplatform for the mapping, understanding andpredicting of reservoir behaviour worldwide.

A robust, reliable and accurate reservoir modelprovides an integrated picture of all availablesubsurface data and allows the operator to buildand test multiple production scenarios. In this way,operators can determine how best to develop andproduce their resources and access crucialinformation on oil in place.

Successful reservoir models today, however, mustreflect all faults and the true compartmentalisation ofthe reservoir, represent the controlling flow properties- such as porosity and permeability at the right scale- and ensure a seamless and cost-effective workflowfrom seismic through to simulation.

This article will examine what makes a successfulreservoir model and the impact on African operators.

The role of seismicAny model that oversimplifies geologicalcomplexities in the reservoir is not going to deliverthe vital information African operators require.

That’s why it has become so important toincorporate 3D seismic into the reservoir model withseismic interpretation becoming a central elementand prerequisite of reservoir modelling today.

Emerson’s reservoir modelling workflow, RoxarRMS, for example, now comes with seismicinterpretation, seismic inversion and seismic

attribute tools that allow geoscientists to useseismic data to create a rock property modelquickly and accurately.

Yet, despite the embracing of seismic, for manyworkflows there still remains a reliance on just asingle model to calculate uncertainty predictionseven if it is widely accepted that multiplescenarios fit the data.

There is also often ambiguity in the datacollected, where many configurations or scenarios(fault configurations, for example) are supported bythe data and yet are unable to be distinguishedbased on the data alone.

Uncertainties in static reservoir properties, forexample, are often difficult to quantify, due tolimited well control and seismic resolution, andphysical limitations in seismic acquisitiontechnology can result in only a portion of the earthresponse being captured in a seismic image.

Importance of an integrated workflowAs well as seismic interpretation that is tightlylinked to geological model building, another

Figure 1: Base case surfaces with faults network.

Reservoir modelling has acrucial role to play in

unlocking reservoir value,extending field life and

increasing reservoir recovery.

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Extending field life and increasing oil & gas recovery in Africa.By Samir Walia, Emerson Process Management.

Increasing recovery

rates



prerequisite for reservoir modelling and its role ingenerating an accurate description of the reservoiris an integrated workflow from seismic acquisitionand interpretation right through to simulation.

Such a workflow ensures maximum productivityof all members of the asset team, the ability toshare knowledge and resources, and givesinterpreters the ability to move back and forthbetween different modelling tools coveringeverything from seismic interpretation and structuralmodel building through to facies petrophysicalmodelling, well planning and uncertainty modellingtools. A strong workflow also provides flexibility indeciding which areas of the model to focus on.

Many conventional interpretation and reservoirmodelling workflows today, however, aredisjointed and independent within organisations.This leads to a lack of agility on the part of thetypical asset team, whether it is difficulty inadapting and responding to new data orchallenges correcting errors in existing data. Sucha disjointed workflow can lead to a high numberof points and clicks to map just a singlegeological feature and little flexibility for thereservoir modellers to change direction.

With geophysicists interpreting thousands ofpoints at seismic scale, and geomodellers doing thebest they can to fit the model to the interpretation,data and crucial decision-making information cansubsequently often be overlooked.

Growth in model-driven interpretationIt’s with these issues in mind that Emerson hasdeveloped a new reservoir modelling approachwithin its latest software, Roxar RMS 2013, whereuncertainty is captured during the interpretationprocess and where the model is effectively theinterpretation. The process can handle multiplemodels, capture the limitations of the data, andquantify geologic risk as early in the reservoirmodelling process as possible with directcorrelations with the seismic.

Rather than creating one model with thousandsof individual measurements, with RMS 2013modellers create thousands of models byestimating uncertainty in their interpretations. Thesoftware then generates statistically significantensembles of models based on these probabilitydistributions, thereby providing immediate value tothe geoscientist.

The interpretation is based on uncertaintyinformation being collected and paired with aninterpreted geologic feature (horizon, fault, contactetc), thereby more accurately representing thelimitations of the data and the interpreter’s visionfor the geologic structure. In this way, the newmethod can show what parts of the model are most

uncertain, and can quickly indicate where moredetailed investigation is needed and where newdata needs to be acquired.

In addition, users will also receive instantfeedback on the consequences of a measurementwith fewer points and clicks required to map ageologic feature. Through this, interpreters will beable to rapidly map the key features of the reservoirusing a sparse representation and with noadditional quality control phases.

So what impact will this new model-driveninterpretation workflow have on extending field lifeand increasing oil & gas recovery for African operators?

The new workflow generates a more completerepresentation of the data irrespective of the qualityof the data leading to a better picture of thesubsurface and more valuable input for effectivereservoir management decision-making anddelivering returns on the asset.

The workflow can also generate early estimatesof reservoir volumes, enabling geoscientists toquickly build risked models of static reservoirvolumes and generate the best possible estimatesto support commercial decisions. Histograms anddistributions of static reservoir volumes, forexample, can be quickly constructed and analysed,resulting in probability estimates directly used infinancial modelling.

Risk estimates for drilling decisions can alsobe generated through a combining ofinterpretation and structural uncertainty modules.Operators can make risked predictions of horizonor fault positions and integrate this with logging-while-drilling data and precision steering toreduce risk in drilling.

Quantifying GRV uncertaintyGRV uncertainty is often one of the most significantuncertainties, especially in the early phases of fieldappraisal and development with the correcthandling of structure and contacts often key torealistic uncertainty assessment.

To this end, Emerson’s new model-driveninterpretation capabilities is able to generate a

multi-realisation 3D uncertainty structural modelwhere interpreters can define lateral and verticaluncertainty at every pick during the seismicinterpretation workflow alongside velocity modelsand fluid contacts.

Figure 1, for example, illustrates an examplewhere the control points were used for the twosurfaces – the upper surface control points, thelower surface control points, and the base casesurfaces with the fault network. Each pointrepresents a best estimate coordinate withdifferent uncertainty ranges then applied foreach point.

Through this approach, standard deviation mapscan be generated. Figure 2, for example, comparesa new standard deviation map from the model-driven workflow (on the right) with the mapgenerated from a conventional uncertaintyworkflow (on the left) with the new map reflectinggreater confidence in the quality of the seismicdata rather than constant uncertainty rangesinputted by the interpreter.

The standard deviation map will be used asvaluable input in the creation of a 3D grid, thegeneration of multiple realisations, andeventually gross rock volume ranges with greateraccuracy that can have an important role in fielddevelopment.

Focal point of decision-makingToo often in the past oil & gas productionstrategies have been guided by short-termdecision-making and a knowledge that once theeasy oil has been found and a recovery rate of say30 per cent has been achieved, easier oil can befound elsewhere. No longer!

This ability to quantify geologic risk early in theinterpretation process and the integrated seismic tosimulation workflow is likely to have a strong futureimpact on not only drilling decisions but theaccuracy and effectiveness of bid valuations,production estimates or divestments, and, of course,in increasing recovery. Reservoir modelling will playa key role in achieving this. ■


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Figure 2

Many conventionalinterpretation and reservoirmodelling workflows today

are disjointed andindependent within

organisations.




AAS AN ECONOMIC resource, the oil andgas resources is the mainstay of theNigerian economy providing 30 percent of the country’s GDP; 80 per cent

of government revenue and 95 per cent of thecountry’s foreign exchange. For Nigeria to realise itsnational aspiration of becoming one of the top 20economies of the World by 2020, the success ofthe oil and gas industry is crucial.

This strategic industry has in the last three yearsbeen under the purview of Diezani Alison-Madueke,Hon minister of Petroleum Resources. To have arobust view of the contribution she has made to theindustry, it is pertinent to segment the industryactivities in respect of its various sectors such asupstream, midstream and downstream.

The upstream sectorThe upstream sector is the heart of the oil and gasindustry. Here, the management of the industryunder Alison-Madueke has exceeded expectations.In about 2010, Nigeria’s daily crude oil productionwent down to as low as 800,000 bpd. Today crudeoil production has been maintained at an averageof 2.3 mbopd with gas production increased from6.3 to 8.1 bcfd by year-end 2013, in spite ofincessant pipeline vandalism and crude oil theft.

tAlison-Madueke has also mounted concertedefforts to grow Nigeria crude oil reserves in theinland sedimentary basins especially in the ChadBasin with the acquisition of additional 3D data andcommencement of Phase 5 of the explorationprogramme. Data processing and interpretation arealso ongoing to establish drillable prospects in thebasin. The result has been an increase in NPDCcrude oil production which now averages about150,0000 per day.

The oil and gas industry under the watch ofAlison-Madueke is also paying deserved attentionto the management of the environment of the oiland gas operation. An organisational as well asimplementation structure for the execution of therecommendation of the Ogoni UNEP Report whichprovides information on the level of devastation ofOgoni land has been put in place. Already, theprocesses and intervention programmes whichinclude remediation, economic empowerment ofimpacted communities as well as funding havebeen agreed upon by the industry.

The midstream sectorIn the midstream, under her watch, the industry hassustained gas supply for power generation andindustrial use following the execution of gas supply

intervention programmes, resulting in increased gassupply to the Western Gas corridor which has inturn positively impacted electric power generationin the country.

The implementation of critical pipelineinfrastructure for gas supply has been pursuedvigourously. ELPS Phase I expansion project hasbeen commissioned which has increased thedelivery capacity of the Escravos-Warri pipelinesystem from 399mmscfd to 600mmscfd. Gassupply to Olorunsogo has also beencommissioned, while OB3 and Oredo-Ogherefe gassupply projects are progressing.

As part of the efforts to support the creation ofnew gas based industries, President Jonathan’sadministration through the NNPC has secured thesupport of JBIC of Japan to part-finance NNPCequity interest as well as get the strategicparticipation of the Japanese investors in the BrassLNG project. This is expected to facilitate theattainment of FID for the project soonest.

In March 2011, the present administrationlaunched “The Gas Revolution: Rebirth of Nigeria’sIndustrialisation”. The objective of the initiative isto stimulate industrialisation through gas-basedindustries. The initiative will also involveestablishing an industrial gas city in Delta State.The gas city will comprise establishing a world-class petrochemical plant with the capacity toproduce 1.3mn tonnes of polyethylene and 400,000

tonnes of polypropylene per annum. Governmentplan is that from this plant alone, myriad secondaryindustries will develop producing such items asplastics, packaging stuffs and high-end products asprinted circuit among others. The initiative isexpected to bring into the country foreign directinvestment of about US$10bn between 2011 and2014. It is also expected to generate massiveemployment opportunities, support for agriculturalproduction and boosting the government’s plan toprovide stable power for economic development.

The downstream sectorThe Downstream Sector has encountered festeringchallenges such as pipeline vandalism as well asloss of hard-earned resources due to administrationof subsidies on petroleum products in the country.Alison Madueke has striven to ensure that all partsof the country receive petroleum products in thequantity that will sustain their economic activities.Where there were hiccups in petroleum productssupply, she had taken up the challenge and put anend to such occurrence.

She has also undertaken an aggressive repair,rehabilitation and upgrade of industry facilities. Inthe last few years, the Port Harcourt–Aba productpipeline has been re-streamed, while the integrityof Warri–Benin, Aba–Enugu pipelines are being re-established. Within the period under reference, AbaDepot and Okrika Jetty were re-commissioned. It is

Alison-Madueke at Okrika Jetty.

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Nigeria has an enormous endowment of natural resources, chief among which ishydrocarbons. We look at how the management of the petroleum sector under Alison-Madueke has contributed to the giant strides being made in respect of thestrategic objectives of the industry.

Ministry of Petroleum Resources - Livewire of transformation agenda


S12 ORA 4 2014 - Technology E & Innovations_Layout 1 7/24/2014 3:42 PM

worthy of note that the integrity of most of thenetwork of pipelines serving the North has beenre-established such that products are now beingmoved to locations such as Jos, Gombe andKaduna through pipelines.

Undertaking a holistic rehabilitation of the threerefineries has been a major position of the ministersince her assumption of office. Her plans are tocontract their rehabilitation to the originalmanufacturers to guarantee an excellent job. As attoday, Port Harcourt refinery is undergoing a majorrehabilitation while Warri refinery as well asKaduna refinery has been scheduled.

While the focus is to abolish petroleum subsidiesas soon as possible, she has also put in placestringent measures to curb corruption in the system.

Local Content DevelopmentThe Nigerian Content Development is an issuewhich the minister of Petroleum Resourcesconsiders a top priority. To date the contribution ofthe oil and gas industry to the GDP is a mere 30per cent. In one stroke, the Nigerian Content Law ,reversed this trend by attracting investors to set upfacilities in Nigeria, provide avenues to ensureprocurement of goods and services are domiciledin-country, stimulate employment and provideopportunities for training for Nigerians as well as

create an environment that promotes in-countrysupport services and linkage industries.

Due to the enactment of this law, expectedimpact of Local Content on the national GDP in thenext four years is put at the following: 6 Retention of US$10bn out of 20bn average

annual industry expenditure6 Creation of more than 30,000 direct

employment and training opportunities6 Establishment of three to four new pipe mills to

service industry demands6 Development of one or two dockyards and

utilisation of existing shipyards6 Transformation of ownership profile of marine

assets supporting industry6 Integration of indigenes and businesses residing

in the oil producing areas and 6 Capture of over 50 per cent to 70 per cent of

banking services, insurance risk placements andlegal services.

The Petroleum Industry BillMuch has been written about the PetroleumIndustry Bill, PIB; much more will still be writtenabout it now and in the nearest future. Inessence, the bill is a reform legislation whichpromises to establish the legal and regulatoryframework, institutions and regulatory authorities

for the Nigerian petroleum industry. Alison-Madueke has shown serious

commitment to progress the bill to the point ofbeing passed into law. As at today, the bill haspassed a Second Reading in the House ofRepresentatives, for instance. What is re-assuringis that given the commitment of the minister tofacilitate the passage of the bill, the industry ishopeful that the PIB will be enacted into law inthe life of the Jonathan administration, with allthe major changes it promises to effect on theindustry and for the benefit of its players.

Giant strides and mounting challengesAlthough some giant strides are being made inthe industry, the journey has been anything butrosy. Challenges posed by pipeline vandalismand crude oil theft are taking a heavy toll on theindustry. Similarly, the activities of crude oilthieves also endanger exploration activities inthe upstream sector. It is estimated that in thepast five years these challenges have cost theindustry more than US$1.5bn in crude oil andproduct losses. To move the industry to the nextlevel, every Nigerian is encouraged to identifywith the efforts of Alison-Madueke to rid theindustry of these unnecessary challenges andmove it to the next level. ■


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W O R L D - L E A D I N GMANUFACTURER and distributorof precision tubes for criticalapplications Fine Tubes hasbeen awarded a major order byFMC Technologies for thesupply of advanced tubing forTotal's offshore Egina project.Located some 150 km off thecoast of Nigeria at a depth of upto 1,750 metres, the Egina oilfield is being developed by TotalUpstream Nigeria Ltd for whomFMC Technologies is providingall the subsea productionsystems. The oil field isestimated to reach a peakproduction rate of 150,000 bpdand covers an area of around1,300 sq km. Fine Tubes hasbeen contracted to supply FMCwith significant volumes ofseamless instrumentationtubing for the control, hydraulicand injection lines required forthe subsea manifolds.Fine Tubes sales and marketingdirector Brian Mercer said:"Winning this contract is animportant achievement for FineTubes, given the environmentaland operational demands thatwill be placed on the tubing. It'sfurther evidence of ourexpertise in working with themost advanced materials tomeet the most stringent qualityand safety standards."Fine Tubes has been deliveringhigh precision tubes for supercritical applications in the oiland gas industry for the last 70years. The tube mill regularlysupplies precision tubing instainless steels 904L (UNSN08904) and 6Moly (UNSS31254), as well as nickel alloy625 (UNS N06625) and alloy825 (UNS N08825) for globaloffshore and onshore projects.Fine Tubes oil and gas businessdevelopment manager RyanDover said: "The subseaproduction systems deployedwithin the corrosive environmentof the Egina oil field demandspecialist corrosion resistanttubing. This is where ourexpertise lies with our extensiverange of high performance alloysthat offer extended productservice life in the most hostileoffshore conditions."

TO MEET THE challenging flow assurance demands of an Angolan deepwater development in Total's Clove field, Subsea7recently designed a high-performance Pipe-in-Pipe ({PIP) pipeline which is currently being installed by J-lay from itsflagship pipelay/heavy-lift vessel, the Seven Borealis. The PIP installation is more than 125 km long and is being laid in1400 metres of water. Subsea 7 is also delivering similar high-performance PIP technology by using the reel-lay method.The main challenges during this project were:6 achieving the required thermal performance6 the laying tension in excess of 550 t during the installation of the PIP production lines6 the large number of flowline structures6 the stringent welding acceptance criteria for flowlines susceptible to lateral buckling.Subsea 7 collaborated on an advanced PIP design with development partner ITP InterPipe using a 24 metres-long double jointwhich was fabricated onshore. The annulus in the double joint contains a blanket of Izoflex and the outer pipe is swaged downand welded to the inner pipe. The annulus is then drawn down to a reduced pressure to achieve the required insulationproperties. A further benefit offered by this design is that offshore welding activities can be confined to just the inner pipe.

Pipe-in-Pipe pipeline meets challenging flow assurance demands

WITH THE COMPLETION deadline of the massive LomPangar dam construction project looming on thehorizon, a leading Italian construction firm has beenhard at work in the jungles of Cameroon modifyingsections of the Chad-Cameroon pipeline. Thenecessary modifications had to be made well beforethe pipeline is submerged in the reservoir when thedam becomes operational later this year. Described by Michael Ngako Tomdio, minister ofenergy and water for Cameroon, as the “keystone inthe arch of the Cameroonian electric system," theLom Pangar Dam will generate electricity for industryand millions of residents throughout Cameroon. Inpreparation for constructing the dam, extensiveenvironmental assessments and studies were carriedout, revealing that two sections of the pipeline wouldbe flooded in the reservoir when the dam iscompleted, so they would have to be modified.It was essential that there be minimal impact on thesurrounding environment, which is a semi-deciduousrainforest and the home of Cameroon’s Deng DengNational Park. The park is a wildlife-protected zonethat boasts a rich variety of wildlife, includingprimates, so it was critical that every precaution betaken to ensure that the pipeline modifications becarried out flawlessly.The Chad-Cameroon pipeline extends 1,080 km fromChad to Kribi, Cameroon on the Atlantic coast. Ittransports oil from Chad through Cameroon’s coastalport, where it is exported. The two 13 km pipelinesections in need of modification lay in partial jungleterrain east-northeast of Douala. The objectives ofthe modification programme were to re-route andstrengthen the two pipeline sections to ensure thatthey would be capable of supporting 20-meter watercolumns that would eventually be installed uponcompletion of the dam.Tasked with executing the entire pipeline modificationproject, the construction firm retained TD Williamson(TDW), specialising in pipeline intervention andpressure isolation services, to isolate the live pipelinesso that repair or modifications could be made safely,without disrupting product flow.Working in the jungle heat, the TDW team,consisting of four technicians based on-sitethroughout the operation, carried out more than 30hot tap and plugging operations to isolate pressurein the two sections. TDW used the tandem Stopple

pipeline pressure intervention method to achieve adouble block and bleed isolation, which makes itpossible to cut, plug and safely isolate pressure fromthe sections without shutting them down, whichwould have resulted in disruption to flow.While the lines were safely isolated, providing a safeworking environment, the necessary modificationsto the lines were made so that they could be re-routed. Each line was safely isolated forapproximately 20 days while the tie-ins werecompleted. The entire pipeline interventionoperation, from deployment to completion of thefinal intervention, was completed by TDW wellwithin the four- month timeframe.The isolation made it possible for TDW’s customer toconnect the existing pipeline to the new pipelinesafely and efficiently. Maintaining product flowthroughout this complex operation was critical, soTDW’s ability to make that possible was key.Operating in the remote jungle, in such hot and humidconditions, called for detailed planning in logistics andoperational safety. In addition, given that the pipelineswere located in jungle terrain, TDW worked closelywith the construction firm to plan every move verycarefully, especially in terms of personnel safety andtransporting equipment and materials.“We worked very closely with this construction firmwhich, like TDW, has vast experience in executingpipeline operations in remote, harsh environments, “said Alexandre Flamand, project manager –Europe/Africa/Middle East for TDW. “As a result, ourjoint efforts and shared commitment to careful planningand high levels of safety led to a successful result: thetimely completion of the tie-ins, with an absoluteminimal impact on the environment,” he added.

Advanced tubing forTotal’s Egina Project

Cameroon jungle pipelines modified



OOFFSHORE CRUDE OIL production hasgrown steadily over the last half-century to nearly 25mn barrels perday (bpd) in 2005 or one third of the

total world crude oil production. In 2005 the Gulf and Middle East topped the list

of offshore producers. Of the total world offshorecrude, shallow water accounted for 20.3mn bpd anddeepwater 3.5mn bpd. Thirty years ago deepwaterexploration meant water depths of 800 ft. Today,depths below 1,500 ft are shallow, between 1,500and 7,000 ft is considered deepwater, and more than7,000 ft ultra deepwater. (Source: I Sandrea and RSandrea; Oil and Gas Journal, 5 and 12 March 2007.)

All the construction and maintenance ofproduction infrastructure installed in waters deeperthan 300ft is managed from the surface and reliesheavily on Remotely Operated Vehicles (ROVs) andadvanced tooling capabilities.

The management and control of installations atdepths up to 9,000ft is possible but is technicallyvery challenging and much more expensive.Operators pay great attention to ROV pilot skills,offshore operations awareness, and to reliable, well-engineered solutions.

UnpredictableRigorous investigation and testing of designs insimulation before deployment increases thelikelihood of success and reduces risks to anacceptable level in what can be a very hostile andunpredictable environment.

The offshore oil and gas industry sets strictstandards for deepwater field developments anddefines compliance criteria for the verification ofdesigns, operability and maintenance ofproduction systems.

This is due not only to the increasingcomplexity of the design of deepwater productionsystems - often multiple wells accessed via atemplate or clustered around a manifold exportingto a floating production system - but also to thehigh costs of new developments and changingexisting developments.

Full scale system integration tests are noteconomically practical so the oil industry appliesmodern simulator technologies for virtual testing

of subsea systems to discover and rectify designflaws particularly at the concept and earlyengineering phases of projects, when the greatestsavings can be made and there is time to improvedesigns and mitigate risk.

Subsea services contractors use modernsimulation tools with models of deepwater systemsto verify system functions, and dynamic properties,against various requirements specifications andunder a wide range of environmental conditions.This includes model-based development of plantequipment and deepwater solutions for the design,installation and maintenance of safe deepwaterproduction systems.

The leading European producer of ROVsimulators is Fugro Subsea Services Ltd. (FSSL).Their robotic technologies business line based inthe UK provides DeepWorks: an ROV trainer,engineering simulator and live operationsvisualisation toolset.

InteractivityThe DeepWorks ROV pilot training simulator usesdynamic simulation, with hydraulic and electricalcomponent libraries to reproduce the actualsubsea conditions and ROV tooling that mimic thephysical environment and pressures under whichROV pilots work.

DeepWorks ROV brings full force-modelledphysics simulation to subsea scenarios so thatremotely operated vehicles and other moveable

subsea assets respond to electrical and hydraulicdemands, environmental forces, and friction justlike the real thing.

‘Touch and feel’ interactivity gives ROV pilotsthe same graduated tactile response as if they wereactually navigating the ROV, or deploying a toolfrom a manipulator like a measurement probe or ahot stab. Rehearsing operations across a wide rangeof conditions helps to validate procedures and todefine the safe operating envelope for successfulinspection, maintenance and repair operations.Being able to rehearse specific tasks easily andrepeatedly allows ROV pilots to hone their skillsquickly and allows ROV supervisors to assess thejob skill level required and to grade pilots forspecific operations based on an objectiveassessment of their performance.

EvaluationFor fast engineering and trustable solutions,DeepWorks Engineer provides a sophisticateddynamic simulation engine which models the truehydrodynamic responses of offshore equipmentwhen acted upon by environmental conditions.Engineers can quickly drag and drop componentsfrom the extensive libraries to build subseascenarios containing items like vessels, risers, pipes,cables and ROVs and drive them with force inputs.

Engineers can also build and save their owncustom assemblies by importing 3D engineeringmodels, associating them with components from the

FCV3000 ROV operator console.

Fugro also uses DeepWorks tobuild accurate and functional

models of ROVs and theirassociated tooling.

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Simon Marr, Robotic Technologies business development manager with Fugro SubseaServices Ltd, explains how to minimise risk and increase production.


Subsea control and

simulation


library and then connecting them together.DeepWorks speeds up the evaluation of subseaengineering designs by simulating complex subseainteractions and collisions in great detail whilstrecording all the engineering data for offline analysis.

By enabling the ‘live’ features, the software canbe driven by data captured in the real-world.Onshore, missions can be played out in advance byusing previously recorded datasets to drive thesimulation and verify acceptable windows for safeoffshore operations.

Simulated dataOffshore, the software is integrated with shipsystems and accepts NMEA standard inputs such asGPS, Gyro and USBL. DeepWorks has beenintegrated with ship systems on Fugro supportvessels and on third party vessels of opportunity. OnFugro vessels configuration is simplified becausethey all use Fugro Starfix via Message Manager.DeepWorks synthesises navigational and positionaldata in real-time to generate a clear, augmentedreality view of what is really happening subsea bothnear and far from the vessel.

This is a valuable tool for ships’ superintendentsand crane and deck teams as they can each havetheir own viewpoint to improve work co-ordination.This makes vessel positioning and winchedoperations easier for more accurate deploymentswithin the water column and on the seabed. Real-time feedback enables offshore teams to reactfaster to unforeseen events.

Additionally, simulated data is used to fill thegaps between measured points which is essentialfor accurately tracking flexible lay or replacementoperations. A permanent record is saved forsubsequent post mission review and for comparisonwith previous operations.

Fugro Subsea Services in Aberdeen (FSSL) usesDeepWorks’ Live capabilities for real-timemonitoring of subsea operations. They also useDeepWorks Engineer and DeepWorks ROVextensively to support engineering services projects.

These simulation tools enable fast and accurateverification of new engineering, as well as toolingdesigns and deployment solutions and supportprocedures development for the installation and

repair of subsea production infrastructure.FSSL is committed to forging strong and

enduring partnerships. Over the last two years FSSLand Kongsberg Maritime have jointly developed anIntegrated vessel and subsea simulator. This is usedfor cross-disciplinary training of vessel, crane andROV teams for the installation and repair of subseaproduction infrastructure.

FSSL also works closely with GE Oil & Gas tosupport their tree design and field developmentprojects and with Innospection Ltd who design ROVdeployed inspection tools.

Like most subsea companies, FSSL previouslyrelied on building prototypes, SITs (systemintegration tests), small scale wet tests, and otherexpensive and time-consuming processes. Due toits wide range of construction, survey and divesupport operations across the whole upstream oiland gas process, simulation is now benefiting moreparts of the business, resulting in shorter projecttimeframes and enabling the delivery of a morecost-effective service.

ConfigurationFugro ROV training and offshore simulators aremanufactured in-house by Fugro SubseaTechnologies in Singapore which makes theprogramme of global rollout easier to manage.

DeepWorks has established itself as a leader inthe simulation field primarily because it is easy touse and because it is underpinned by trustedphysics. Engineers perform their work efficiently

using the intuitive Windows-style drag and dropinterface to build scenarios and the drop-downmenus to change property values. The absence ofany need for scripts or programming skills toconfigure the system enables high utilisation andwidespread use with minimal training.

Fugro also uses DeepWorks to build accurateand functional models of ROVs and their associatedtooling. With access to the underlying electricaland hydraulic circuits, new tooling and tooldeployment units can be configured quickly and itis easy to change the vehicle configuration fordifferent kinds of mission, thereby saving significanttime and money.

“We are talking about bespoke equipment wemake for our clients such as tooling, controlsystems and other kit for the ROV,” said NickAlvarado, senior subsea engineer, Fugro SubseaServices Ltd (Aberdeen).

“When clients encounter a subsea problem weoccasionally have to design a set of tools specificto that job and sometimes the ideas andmechanisms have never been used before, so beingable to test before we actually start manufacturingis of great value.”

For training in fault detection and repairing, theunderlying circuits are fully modelled. Trainingsupervisors can ‘break’ individual circuits orcomponents to test how well pilots understandtheir equipment.

The supervisor can do this in real-time, ordevelop a problem scenario to test whether thetrainee responds correctly. The system is setup sotrainees can easily repeat a scenario until they getit right. The whole scenario and simulation data isrecorded and can be returned to any point forreview and detailed behaviour response analysis.

DeepWorks provides an integrated suite of toolsto help subsea operators complete each project taskspeedily and effectively. Simulation and controltechnologies now give operators an unprecedentedinsight and ability to intervene directly in thedesign, development, deployment, operation andmaintenance of subsea and seabed equipment,minimising risk and speeding up production. ■


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FCV3000 ROV training scenario for torque tool operation.

DeepWorks ROV brings fullforce-modelled physics

simulation to subsea scenarios


FCV3000 ROV training scenariofor pipeline inspection.



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IIN OUR FIRST look at the data and voicecommunications requirements of oil and gasoperations in remote locations we discussednew and emerging communications needs

and how they are driving demand.Of course, demand is largely irrelevant if those

needs can’t be met. And that usually meanssatellite — even on land. For example, inmetropolitan areas fibre and other fixed or wirelessservices may readily be available and provide arobust and resilient communications medium. Also,across oilfields, WiMax, Wi-Fi and VHF/UHF radiolinks may be required to communicate locally andare often installed and left unsupported. However,when it comes to the wider world, the answer isoften satellite communications. Bill Green, globalaccount director with Hermes Datacomms, aprovider of managed networks for the upstream oiland gas sector worldwide, explained, “In remotelocations or where the local infrastructure isunreliable — intermittent cable cuts for instance —VSAT is often the viable choice.”

For onshore sites and offshore jack-ups, thatmeans fixed VSAT implementation. However,stabilised antennas will be required on vessels andfloating rigs. Green added, “Onshore, rigs may movefrequently so an autodeployable antenna could berequired to ensure the rig can deploy to a newlocation and establish communications quicklywithout the need for the attendance of a costly,skilled communications engineer.”

Offshore, on a mobile platform, blocking mayrequire the deployment of more than one antenna.“So,” Green suggested, “consideration needs to begiven to how this can be deployed cost-effectively,giving ‘always on’ communication whilstpartitioning between crew welfare and missioncritical operations and approaching almost 100 percent availability”.

The most popular satellite bands are usually Ku,C and increasingly Ka band, each of which has itsadvantages and disadvantages in terms oflicencing, interference and rain fade, not tomention size of antenna.

The recently arrived O3b satellite system is anexample of a growing trend towards Ka band as freebandwidth on Ku and C becomes difficult to access.An advantage here is that O3b’s constellation islower in orbit than many systems, which bringsadvantages in terms of limiting latency — that is,delay. O3b satellites are not geostationary, unlikemany of the more distant satellites, so they dorequire two antennas to manage the handoverbetween satellites as they move through the sky.

However, Simon Maher, vice president, EnterpriseO3b Networks Ltd, points out that the antennas arevery small and the data rates “phenomenal”.

Also O3b doesn’t quite cover the entire globe.This is not going to be a problem in most cases; if arig isn’t going anywhere else for a long time itwon’t matter at all.

More important perhaps is the argument thatcommunications on the Ka band can be affected bymonsoon conditions — rain fade, as it’s known. This,regular readers will know, is a well-worn topic.O3b’s Maher points out that technology has gone along way to coping with rain fade. “Ka hasdeveloped significantly. We have multipleadvantages.” Referring to two technologies that canhelp to compensate for weather-induced changes,he said, “We can use adaptive coding modulation(ACM) with uplink power control (UPC) to getthrough those rain events. But it ultimately comesdown to the link budget and the service you’reoffering: what guarantees you’re prepared toprovide behind that.”

Either way O3b does seem happy to target someof the more rainy areas of Africa. “As far as offshoreis concerned yes,” Maher agreed, “Angola andNigeria are massive areas of opportunity for O3b.”

Simon Bull, senior consultant with specialisedtelecommunications consultancy Comsys, has aslightly different view of the rain fade question. Hesuggested: “If you’re a rig offshore Nigeria and you

can pick up one of the Yahsat [regional Ka service]beams, might you put a Ka band service on? Youmay well do; it will give you an awful lot ofbandwidth for a very low cost on a small antenna.But are you going to use it for mission-critical stuff?No, you’re not, because it’s not going to have theavailability rates you’re going to need. “ But, hesuggested a hybrid service might be the answer: Kuor C for mission-critical communications and Ka forcrew welfare, which can cope with, say, an houroffline in bad weather.

However, we shall see soon enough how wellthese satellites perform. O3b isn’t the onlycompany offering Ka. Inmarsat’s Global Xpressservice is due soon. And the Epic Intelsat offeringbrings together not just Ka but Ku and C band — orwill when it starts service in a few years.

Fibre still an optionOf course fibre is still an option in some cases, evenoffshore — and that leads to another possible hybrid.Martin Denari, Orange Business Services’ globaldirector of oil, gas and mining vertical explained: “Ifyou have, for instance, a production offshoreplatform you know is in place for a long period oftime, it might make sense to consider fibre optics. If,by contrast, we are considering a drilling rig utilisedin non-conventional exploration, then that rig is notgoing to stay for long on a given point. In this case,it might be better to consider satellite connectivity.There might be situations where a hybrid solution isthe best option, for instance in vessels and aplatform. You might connect the platform usingfibre optics, but connect the vessels to the platformusing microwave or satellite.”

Oil and gas operations are generating more data than ever. But if your rig or vessel isway offshore how do you get that information back to land? In the second of two articleson the changing face of oilfield data and voice communications in remote locations, PhilDesmond asks whether satellite networks can cope with growing offshore demand.

The changing face of remote oilfield

communications - part 2

03b network satellite fleet image.

Technology has gone a longway to coping with rain fade.

S13 ORA 4 2014 - ICT_Layout 1 7/24/2014 3:56 PM

ICT

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Referring to his company’s offering, he added:“Today we have plenty of solutions ranging all theway from a SIM card to having ships that are ableto deploy subsea fibre optic cables.”

There is, as he pointed out and as Bill Greennoted earlier, no clear rule. Even onshore youmight have to go with satellite in areas whereburying a cable underground is prevented byenvironmental regulations. Similarly, weatherconditions in an otherwise fibre-friendlyenvironment might force you to go for asatellite solution.

Either way remote communications is likelyto be more the norm as exploration goes furtheroffshore and deeper — to areas offshore Brazil,say, that make even the depths plumbed sodisastrously in the Gulf of Mexico by theDeepwater Horizon depths seem shallow. “It’snot like you’re ever going to run fibre roundthat,” said Bull. So it’s just as well — for E&P —that satellite is becoming more competitive andthat service providers are recognising the needto drive lower prices. As Green said, “Using

cutting edge technologies such as the HermesVMS platform over Africa allows us to becompetitive with local service providers whilstmaintaining a high level of service.”

Maher added another note of optimism. “Thesatellite market is growing year on year — andit’s a phenomenal market. But innovation hasbeen lacking somewhat. Now the satellite

industry is bringing more innovation. We [O3b]are labelling quite hard our latency andcapacity advantage: that’s how we’re trying todifferentiate ourselves from the other HTS [highthroughput satellite] programmes that arecoming in the future. But really everyoneshould welcome and embrace innovation. Thisis what we need in the market.” ■

If you have a production offshore platform you know is in place for a long period of time, it might make sense toconsider fibre optics.

Angola and Nigeria aremassive areas of opportunity

for O3b.


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