The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Part 1.
The CNPC-Agadem pipeline is a strategic project that aims to export crude oil from Niger to Benin, through a 1,980km cross-border pipeline.
The project is developed and operated by China National Petroleum Corporation (CNPC), a state-owned oil and gas company of China. The pipeline is expected to have a capacity of 90,000 barrels per day (bpd) and to be commissioned in 2021.
The political and security challenges of the pipeline
However, the pipeline faces several political and security challenges that could delay its launch or jeopardize its operation. The first challenge is the recent military coup in Niger, which ousted President Mohamed Bazoum on 26 July 2021. Bazoum was a close ally of CNPC and had supported the pipeline project since its inception.
The coup leaders, who formed a junta called the National Committee for the Restoration of Democracy and the State (CNRDS), have not yet clarified their position on the pipeline or their relations with China.
The second challenge is the pressure from the Economic Community of West African States (ECOWAS), a regional bloc that condemned the coup and imposed sanctions on Niger. ECOWAS has also urged Benin, Niger’s neighbour and partner in the pipeline project, to suspend its cooperation with CNPC until the restoration of constitutional order in Niger. ECOWAS fears that the pipeline could provide financial resources to the junta and undermine the democratic transition in Niger.
The third challenge is the security threat posed by armed groups and terrorists in the region, especially in the Lake Chad basin and the Sahel. The pipeline crosses several areas that are prone to attacks by Boko Haram, Islamic State West Africa Province (ISWAP), and other militants. The pipeline also passes through some ethnic and tribal conflicts zones, where local communities may oppose or sabotage the project.
In this context, Patrice Talon, the president of Benin, plays a crucial role in determining the future of the CNPC-Agadem pipeline. Talon is facing a dilemma between complying with ECOWAS’s demands and maintaining his good relations with China.
Talon has been a staunch supporter of the pipeline project, which he sees as a source of economic development and regional integration for Benin and Niger. He has also been a loyal partner of China, which is Benin’s largest trading partner and investor.
Talon has recently sought to reassure Xi Jinping, the president of China, over his commitment to the pipeline project. He has sent a letter to Xi, expressing his gratitude for China’s support and cooperation in various fields, including energy, infrastructure, health, and education. He has also reaffirmed his willingness to work with China to advance the Belt and Road Initiative (BRI), a global development strategy that includes the CNPC-Agadem pipeline as one of its flagship projects.
#Savannah is pleased to announce the publication of our first disclosure report for the Sustainability Accounting Standards Board (“SASB”).
Read the full report here: bit.ly/3PHAOx6
#Sustainability #SASB
We continue to excel at producing glossy booklets and our networking activities all over. Africa.
Just need to close a few bits of business now and we’ll be the full package!
Forgot to copy the article:-
Kenyan President William Ruto will be travelling to China later this month to seek a $1bn (£820m) loan to pay for stalled road projects, his deputy Rigathi Gachagua has said.
Mr Gachagua told local-language Inooro FM radio that many contractors had abandoned projects around the country as they were not getting paid for their work.
He said while Kenya was already heavily in debt to China, the president would ask for an extra $1bn while seeking a longer repayment period for the money that is already owed.
He said the president would tell the Chinese that “we admit we owe you money, can we talk so that you add more time, we pay more slowly, and can you add some little more money to finish building our roads?”.
Kenya owes China more than $8bn from loans mostly contracted during the former government under President Uhuru Kenyatta for infrastructure projects.
The deputy president addressed the issue of extravagance by government officials, saying it was the reason the president had ordered a curb on foreign trips.
Earlier this week, the presidency banned public officials from taking non-essential trips abroad to cut spending and has ordered all ministries to cut their budget for the next financial year by 10%.
The government has been accused of unnecessary spending amid complaints by many Kenyans over the rising cost of living and tax hikes put in place by the government.
Kenya trying to get $1bn from China for stalled infrastructure projects. This put the SS / Caltech into perpective. $3bn ($1.2bn for all the Petronas assets + $1.8bm interest free for a few years and then 1.5%) from some tinpot company who pair $100 bucks to take Kiir for a bloody good ‘massage’!
ETA to next SS news - 10 weeks today and counting…
O&W, your posts are pretty ironic given your posts on other boards
On PRD 'Must admit I am new here, but I would like to ask those who have been around a while, why are a few posters intent on spreading negativism, yet presumably holding shares here? It's so boring.'
On HZM 'All the clever dick "I got out ages ago with a profit" crowd are dominating the posts here now. What a shower.'
You've made your point already that you reduced your holding by 90% just before suspension so not sure why you feel the need to continue with your smug posts. Pretty immature stuff from someone professing to be wiser.
You lot continue to discuss the"wishful thinking" shopping list, because you are stuck in the invested mode, but maybe you should pay more attention to RR's "ouch" case scenario. Quite likely, imho.
On your point around continuing to still grow head count, one would hope that there are genuine reasons that we may not be privy too that justifies continued growth in headcount......................
Rockyride - I do sincerely hope that we don't have to wait 2.5 month for the next rns. Hoping for a few operational update RNS's. For me personally the following 2 will go along way:
1) News of additional accugas contracts
2) debt restructuring - if they had a term sheet already that we shouldn't have to wait till December 15th for news on debt restructure .
Acquisitions or not the company, AK, and the board need to do a better job in keeping the market and the investor base appraised on existing business as a bare minimum......................
All quiet on the channels I monitor so far RR. No more additions regarding the NY appeal from CityBank. I guess it could be a while before that is heard.
TiL - TY for monitoring so many channels for any snippets on SAVE. Re this one - you would like to think that AK is confident of some incremental NOI for somewhere or other if he is still recruiting and growing the team in the UK and abroad.
What were the focus areas for 2023:-
1 Close SS
2 Add another hydrocarbon acquisition
3 Get to 1GW - now put back the next year
4 Re-structure Accugas debt
I’d be ecstatic if we completed on 2 & 4 by the end of 2023.
Surprised we’ve not seen more trade press / Social Media. I hope Z and Komakino are still researching all this lot along with Komakino’s excellent research on progress re the New York and Paris court cases.
Hmm, perhaps they might need to devise or structure contracts that allow us to maximise up to 200 mmcf//d or at least until 180 mmcf/d, helping us maximise as close to our current processing capacity
The 8 gas contracts
https://www.savannah-energy.com/operations/nigeria-3/our-assets/
They sold 142 mmcf/d for all of 2022.
I don't know if they have spare capacity for new contracts because if those cornerstone customers take their 80% TOP as well as the others taking 80% of theirs, they could be running at 212 mmcf/d. They mightn't meet those contract requirements.
Correct me if I am wrong but according to H1 2023 update we are averaging daily production from Nigerian operations was 25.3 Kboepd. If I our processing capacity is 200 MMSCFD that's equivalent of 35,000 Kboepd.
So in theory we still have plenty of leg room to sign additional gas contracts to the tune of 10k still lets hope we can start to ramp this up. Personally I don't think it's a tough ask to get to 30k plus in the next few months minimum...........
Anybody notice the 8 trades today all for 4,025,000 @ 26.25p = £1,056,562 per trade and 32.2m shares in total?
On ADVFN they all show as positive numbers but on LSE 5 of the trades show positive and 3 trades negative.
Can’t be Joseph’s shares going through as he only bought 6 m at 26.35p.
Strange why these are showing today and does anybody have any thoughts? Hope it’s not a placing going through, although if it is at least it would (hopefully) provide Sime support at 26.25p and you would think we would not be coming back in the teens or worse.
Oil cartel leader warns of prolonged high prices https://www.bbc.co.uk/news/business-66985654
I do wonder legally or ethically how long they can keep rolling on the suspension. It's currently suspended on the basis of a deal that wasn't the reason for the initial suspension, and talk of working on another deal if SS fails, and a another extension to the already extended suspension period does make we wonder if they are playing a bit fast and loose to avoid having the shares trading until they have possibly managed to pull something out of the hat. Can anyone shed any light on what the Nomad might need to support an extension request ?
My wish list in order:-
Debt refinance
Additional 10k - 20k hydrocarbon deal
Niger drill test
South Sudan RTO
New renewable deals announced
Compression project update / new customers
ICC cases with the court in Paris
What would we be worth if all that lot proved to be successful - ker-ching
And conversely…ouch
What’s the chance we will get it if still not by Dec 15th? Six months passed the original deadline. I don’t have high hopes for SS but as long as we have another big deal signed by year end all is fine. Let’s hope so.
TiL, don't forget Save have an objective of a further acquisition completed by end of year, and AK reiterated that at the last meeting, so whether we come back or not by December, we should hopefully have another one in the bag by then.
Zengas - On the basis of what you are saying, I think if we if don't receive news by end of November than it is fair to say we are probably in the same place as end of September. My personal opinion is that the first 2 weeks of December probably aren't going to change the position we are in at the end of November. I tend to discount December as a slow month as it's pretty hard to get things moving quickly leading up to Christmas and new year break. So in reality wouldn't put it past if there was another extension till end of Feb / March 2024. Again Jan tends to be a slow month as well going into the new year.
So if December 15th is not achieved than with every chance we are looking at 31st March 2024.....................
'Took a further 12 months to complete Exxon on 9/12/23' - should read 9/12/22
Bear in mind
On 2/6/21 we were suspended on the basis of a proposed acquisition and RTO of Exxons interest - There was NO SPA signed.
On 13/6/21 just over 6 months later we signed the SPA with Exxon - but also signed the SPA with Petronas for their interest re Chad.
2 weeks later the adm doc was issued for both SPAs and suspension was lifted -overall in 7 months on 31/12/21.
Took a further 12 months to complete Exxon on 9/12/23 and we discontinued with Petronas in Dec '22.
This time around we've signed the SPA with Petronas for S.Sudan on 12th Dec 2022 along with immediate suspension.
We had a general statement for the adm doc to be issued in H1, then it was moved to be by 30/9/23. This time however it's a mid December month guideline - why not Dec 30th ? It's on or by 15th Dec - so is this seen as the overall final date, both for completion & approval.
Even though we signed the SPA with Petronas in Dec 2022 - i would think it was under discussion long before that - so why i think Jan 2022 might be the effective date.
That leads me to think that when AK said they hoped to have another significant acquisition before the end of 2023 - it could be well progressed.
If S.Sudan concludes - suspension is lifted and there'd be no need for a further suspension unless its a very large acquisition in its own right.
If S.Sudan doesn't go through then they should come back to trading immediately.
Perhaps this could throw a further acquisition into dissaray or they wait and leave a period of trading before an announcement which could be weeks, months away or not happen.
I think the date of 15th December is possibly significant regardless of Christmas - it's mid month and eaxctly 12 months since the SPA was signed.
I think the Government perhaps has been looking at an alternative deal in August on the basis of pre-emption which must be done in a defined period ie getting more money from somewhere else and run the asset themself.
Problem is they want a 5 year payment holiday and they are genuinely broke. From what i know all their oil is pre sold up to 2027 so have no flexibility imo and why i think the touted amount sought from Caltech has been so much to make an alternative deal worthwhile. On the basis of their pre sold oil, i'm not sure if that was based on much higher production figures say pre 2019 and which has fallen way down to todays numbers. Such a deal would leave them in an even more precarious state ie totally dependent on oil revenues something the world financial aid partners are totally against.
Https://cityreviewss.com/savannah-energy-to-delay-acquisition-of-petronas-assets/
Don’t think this says anything that we don’t already know; suspension extended because so far it didn’t get approval.
I wonder if we are exploring compressed natural gas (CNG) options in Nigeria. I assume the have one or two buses knocking around.
Nigeria's President Tinubu increases wages as national strike looms https://www.bbc.co.uk/news/world-africa-66976445