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RockyRide - That's a million dollar question mate........................... Can only go by the facts that we know so far.
1) Your IR updates have confirmed a few things for us over the last few weeks and months as follow::
- AK preference was to always come back with approval alongside the admission document from what's publicly available this has not been granted otherwise you can not keep these things quiet for too long there is always someone who wants to break the story first. We may have got all the regulatory approvals in such as ministry of petroleum and South Sudan oil and gas commission. But the final approval all depends on presidential approval.
- When you spoke to IR after the caltech saga broke on Monday. You mentioned that they were still progressing as if the deal was a go ahead and they were none the wiser.............. We all know the caltech saga was a sham and a credible entity is still to come forward with a credible bid unless they have come in the last couple of days. Which I highly doubt otherwise that would easily would have hit the news.
- We know that it's not a legal requirement to wait for approval just preference and you had mentioned that the company and it's auditor were reviewing the half year results and admission document side by side.
- I think we can credibly say that South Sudan wishes to nationalise vs reality in it's ability to do so are far apart still.............
In terms of the Admission Document itself I was always under the impression that it always comes first and never have I ever seen explicit approval come in tandem. So in my mind there was never that expectation. I think because a few on here have spoken to IR and confirmed that AD and Approval will be in tandem has got everyone twisted almost treating that as reality and we know that's never the course of play you only have to look at all the other SPA's approvals timeline to know this fact.
So if the company haven't received a no from the SS government than they would be well within there right to issue an admission document if all the quote "other workstreams" are completed.........................................
If we haven't received a no than it will purely remain a choice on Savannah on whether they want to still weight out another month at max and than make that call............................. But that will also be driven by what else would still remain outstanding in terms of the workstreams.
Will we issue AD in the morning with relist Monday morning? Not beyond the realms of possibilities that we do this and gain SH approval then sit it out / carry on negotiating to get Gov approval.
Guess the NOMAD busy ATM and would like to be a fly on the wall over the last few days…
Going to be an interesting speech in light of the news this week:
https://www.zawya.com/en/press-release/africa-press-releases/advancing-sustainable-oil-and-gas-og-investments-savannah-energy-joins-african-energy-week-aew-2023-as-bronze-jwwv7jix
COMMERCIAL ANALYST - https://careers.savannah-energy.com/job/Lagos-Commercial-Analyst-LA/956494355/
SENIOR HSE COORDINATOR - https://careers.savannah-energy.com/job/Eket-Senior-HSE-Coordinator-AK/956490655/
Nigeria team is big enough for a couple of additional deals now........................... ;)
The maintenance of EPSA means the contractor shall have the exclusive right to develop all petroleum fields within the contract area, including but not limited to the construction of the infrastructure necessary for transportation and delivery to the intake point of the transportation system and lifting the sale of contractor's share of all crude oil and gas, produced from the contract areas specified in this agreement, to the delivery point.
Under EPSA, the consortium is mandated to submit a list of the expatriate administrators, professional and technical personnel, whom the contractor intends to employ for the conduct of the operations to the minister of Petroleum for approval, which shall not be unreasonably withheld.
The aforesaid list shall be accompanied with the curriculum vitae and contract of service for each employee. Upon approval, the selected personnel shall be granted such entry, work, and residence permits as may be required by the laws of South Sudan.
On the other hand, the contractor shall, one month after the signature date of the agreement and upon consultation with the minister prepare and carry out specialized training programs for all qualified South Sudanese employees engaged in petroleum operations and not hire unskilled labor from outside the country as expatriate employees.
https://www.southsudanminingjournal.co/en/post/technical-hurdles-force-south-sudan-to-consider-retaining-1997-oil-deal/370
Interesting timing of the article.............................................................
This article is even more interesting and the timing of it being released as well, and talks about the production sharing agreements continuing as they are because of technical hurdles and South Sudan inability to nationalise the assets
Technical hurdles force South Sudan to consider retaining 1997 oil deal
Juba, Wednesday (September 27, 2023) - There has been a consideration to review the Exploration and Production Sharing Agreement (EPSA) signed between the government of the then Sudan and China National Petroleum Operating Companies, Petronas, and Sudapet nearly a decade ago.
The agreement, which came to effect on March 1, 1997, granted the oil consortium the right to explore and develop blocks within the country's southern territory.
The consortium bears the financial and technical risk of exploration, and if commercially viable resources are discovered, they will undertake the production and extraction operations, according to the agreement.
Areas of operations, it entails, included but were not limited to Block 1a, located onshore South Sudan and now operated by Greater Pioneer Operating Companies, Block 2a, and Block 4 - all of which are located in the Muglad Basin.
In return for assuming the risk and investing in exploration and development of these blocks and sub-blocks, the consortium was granted an exclusive right to the resources found in the designated area.
The terms and conditions of the agreement included provisions on the duration of the contract, work obligations, fiscal terms, profit sharing, and other regulatory requirements.
"The contractor, subject to the provisions of the Agreement, shall carry out Petroleum Operations to explore for, appraise, develop, and produce commercial discoveries in the contract area, provide all capital, machinery, equipment, technology, personnel, and services necessary for carrying out petroleum operations," reads Article III of the agreement under the Grant of Rights and Term.
The content of the aforementioned article is unlikely to change after the inaugural National Economic Conference recommended that Joint Operating Company (JOC) remained in charge of the ownership and control of the oilfield due to a lack of adequate local expertise to nationalize the oil industry.
The recommendation came months after Puot Kang, minister of Petroleum, received a certificate of approval of EPSA from the National Petroleum and Gas Commission Chairperson Caesar Oliha Marko in November 2022, hinting the continuation of the agreement regulating an oil block in Unity State.
"The Chairperson of the National Petroleum and Gas Commission (NPGC) Amb. Caesar Oliha Marko handed over the approval certificate of EPSA/ Block B2 to my office. In this regard, the commissioners of NPGC unanimously resolved to approve the exploration production sharing agreement for Block B2 in Jonglei State," he wrote on X.
Interesting quotes -
"It is crucial that as we continue to contribute to the economy of South Sudan, and as the company expands across the region, that we apply the highest level quality services and management standards," said Trinity Energy CEO Robert Mdeza in a statement issued on Wednesday.
"[Again], to create a positive example in South Sudan's nascent and vibrant private sector, and attract international partners to the economy to support job creation."
Exactly Savannah's intention and plans job creation................................................
Some interesting articles on South Sudan mining journal
https://www.southsudanminingjournal.co/en/post/energy-entities-declare-war-against-corruption/363
Energy entities declare war against corruption
Juba, Wednesday (September 27, 2023) - To prevent corruption creeping into the energy private sector, South Sudan's leading indigenous energy supplier has announced it is embarking on employing measures to curb the vice and making the sector more promising in contributing to the nation's economy.
In working closely with it's partners - Dentons and Willkie Farr & Gallagher LLP, Trinity Energy aims at ensuring a top-class compliance by conduct of risk assessment of its operations to guide informed decisions.
As a signatory to the UN Global Compact and ISO 9001:2015 certified company implicated by the US-based watchdog in 2023, Trinity Energy now recommits to transparency and corporate standard to become a model for South Sudan in international arena.
A February investigative report by The Sentry -- a result of a three-year investigation into a loan deal between a local company and a regional bank-- uncovered red flags for illicit business practices.
"It is crucial that as we continue to contribute to the economy of South Sudan, and as the company expands across the region, that we apply the highest level quality services and management standards," said Trinity Energy CEO Robert Mdeza in a statement issued on Wednesday.
"[Again], to create a positive example in South Sudan's nascent and vibrant private sector, and attract international partners to the economy to support job creation."
According to Mdeza, the measures undertaken add on to the company's internal review of compliance policy and governance structures to ensure zero-tolerance against corruption in the energy private sector, not only in the Africa's nascent country, but also elsewhere Trinity Energy has operations presence.
The company, one of the regional entities dealing in fuel products in Kenya, Ethiopia, Democratic Republic of Congo, also provides it's services in the United Arab Emirates, making it an international corporate.
The measure, which could propel more concrete relations with multinational corporates the company partners with such as the African Export-Import Bank (Afreximbank), is imperative at the moment now it is a subject of the corruption report.
"Trinity Energy is committed to doing its part to improve the business environment in South Sudan by ensuring it has a top-class compliance program in place", Mdeza continued.
Mdeza's statement coincided with the company Chairperson, Akol Emmanuel Ayii's reflections on the Afreximbank's supports to the growth and expansion of the South Sudanese energy and business consortium, including the Trinity Energy itself.
Trinity Energy is now on a move to establishing the country's first-ever oil refinery to curb recurring fuel shortages in the region.
A, sounds like we’re telepathic :) absolutely sleep well tonight ready for tomorrow. Love to all.
Was hoping for an rns first thing this morning. We all know now it’s 100% the deal has not been approved. Sure the government hasn’t said yes or no, but pretty sure they’re unlikely to say yes. Let’s hope Nigeria is doing exceptionally well and we have more new contracts. Niger? Well who knows when we will see rewards and honestly it’s not even on most people’s minds. Happy/sad Friday we still have to face it. Rest well tonight everyone.
Mr B I absolutely share your frustrations along with a multitude of others on here. With being so heavily invested here I do flip flop a lot with my thought train - and by God do I think about this a lot.
But when I look at the risk / reward and the size of the prize should we land a big one, people will hve differing views but at the end of the day, in all honesty, we have been given plenty of info from AK to let us know what he would be trying to do.
One of the ways I look at it is this:- Whilst admittedly, we could have been spending the time and money on something else, but there are no guarantees anywhere and if we'd have done something different, even in Nigeria, we could have hit a similar set of challenges. But all things being equal. I estimate we would hve spent circa $40m on the Exxon / Petronas deals on Chad / Cameronn and on the current SS transaction. If we had not spent that and paid down debt, it would equate to 2.5p on the SP. So as I am in for a lot more than 2.5p, I think this is a risk worth taking.
We have know idea how SS will play out but I genunely belive that we will win the 2/3 x ICC cases and will be rewarded with anywhere between $500m to $1bn - afterall we did pay $400m for the stuff.
I still think AK is right by saying "small deals come with as much hassle as big deals, so we may as well only take on the big ones"! We have recently seen that small deals elsewhere hit the same troubles that we encounter.
Finally, I firmly believe that AK will have known that SS is very high risk and I am genuinely hoping that he has some other stuff 50% to 80% worked though which will either soften the blow should SS fail or be the icing on the cake should it succeed.
Sleep well this evening and let's see what tomorrow brings - MASSIVE FINGERS CROSSED AND GLA
It is frustrating when a share is suspended with any company for a lengthy period and the proposed deal fails to materialise. In Savannah’s case I suppose that’s the nature of the business that we choose to invest in. Speculate to accumulate as they say. We win some and loose others.
Anyhow nothing in set in stone at present and we should all know more tomorrow. No doubt the bb will be busy again. Fingers crossed for a juicy update and progress report.
Has anyone contacted the company , nomad or firewall that is cammarco ?
State owning and nationalising assets is not always the dream NIgeria is at a stage where it will divest some of it's assets from NNPC for better performance and operations
https://africaoilgasreport.com/2023/06/farm-in-farm-out/six-year-plan-to-sell-down-nnpc-stakes-needs-careful-management-could-raise-40billion/
https://www.bloomberg.com/news/articles/2023-06-13/nigeria-president-tinubu-advised-to-sell-state-oil-assets-refineries
1) Assets owned by state may lack the competitive incentive to optimize operations and reduce costs, which can result in wastage of resources.
2) Corruption can divert resources away from productive uses and also deter foreign investment.
3) State might face challenges in raising capital for investment compared to their private counterparts and they don't always like to dip into their own treasury to develop and maintain assets, must countries don't even have ability to finance their own capital programme
4) Additionally, the perception of political risk might deter foreign investment, which is often crucial for the development and expansion of oil and gas sectors.
5) State-owned oil and gas companies may lack the technical expertise, technological advancements, and innovative approaches that private companies possess.
4) Over-reliance on state-owned oil and gas assets might hinder economic diversification, making the economy highly susceptible to global oil and gas price fluctuations.
I see Nigeria as an opportunity if NNPC are selling assets and we bid competitively than they are likely to approve their own asset sell as suppose to divestment from majors or both.
Besides we have already reviewed plenty of assets this year and already down technical studies on them. So it's a case of striking a deal if Petronas doesn't bear fruition.
You could say what took Petronas, Exxon, Chevron, Sinopec, CNPC, ONGC, Sonagol and others to these places and sunk billions in developing fields and pipelines and running these assets until they were mature when they were already so called 's' holes 20+ years ago and made money from them.
If Chad wasn't worth chasing for over TWO HUNDRED MILLION FCF yr at $65/b oil what was. Have you seen the number of other companies that chased deals there and got whittled down to preferred bidders not to mention others that have arrived ?
Family owned Perenco made their cash in so called s.holes.
There's others chasing assets in both S.Sudan & Sudan alone never mind Niger which didn't seem to be a concerning s/hole up to the latest coup.
If you can't understand when you read a strategy to expect ups and downs you shouldn't be complaining later. Whatever happens re S.Sudan doesn't change our underlying value regardless of emotional sentiment about S.Holes and why are we there.
M&P acquiring Assala during a Gabon Coup - fools ?
Meanwhile Afentra is doing exactly the same in West Africa in creating a 'west african independent' - 'opportunity for new, credible and responsible operators' on transition assets. All on a buy and build strategy. They too are chasing similar to what they have negotiated so far as well as larger operated/non operated being evaluated across West Africa.
Maybe they all went to the AK school of thought or maybe like many other CEOs they seek out assets relevant to cost, risk and non recourse debt financing. I didn't buy into SAVE or a few other African plays hoping to be a UK/Norwegian north sea operator.
Correct MR B he believes these assets are cheap and also the Accugas underpins our current business and more, So perhaps knowing that Accugas is a massive insurance policy for the company he is willing to take a swing at these assets. If Accugas wasn't a strong asset that is currently outperforming since acquisition and continues to have double digit percentage growth year to year.
‘What the ffs is AK doing in these places?’
He probably considers these assets cheap as chips and is prepared to take a little risk.
One thing I found interesting is that in the 8th June update they talked about
"Our focus in the short term is on the recruitment of the in-country management team ahead of completion of the proposed acquisition of the South Sudan Assets"
"The Group has previously used hedging instruments to provide protection against fluctuations and following the acquisition of the South Sudan Assets, the Group is expecting to enter into a rolling hedging programme to provide protection against oil price fluctuations."
Surely it was cart before the horse what made them say this..........................................................................................
Was the transaction further along the line that made them say this with confidence.............................................................
At the end of the day, SS is a sh..thole in which to do business. Ass is Chad. As is Niger.
What the ffs is AK doing in these places?
Longshort - Russian interest is not a new threat or an elevated threat. They have been in an around for a while
https://energycapitalpower.com/south-sudan-snp-group-bentiu-refinery-ssop-2023/
https://oilprice.com/Latest-Energy-News/World-News/South-Sudan-Welcomes-Russian-Firms-To-Its-Oil-Gas-Sector.html
Under the current climate and foreign sanctions even a proxy deal would be exposed involving Russia so would be hard for Petronas to entertain such a deal.
Besides very rarely does Russia or it's companies participate in JV's outside of Russia in oil extraction. They prefer local partners where they can impose their influence............You have to remember the other partners in these PSCs are state oil companies of India and China..................................... So the exposure is much greater and Russia foreign policy has always been to operate illusively in the shadows without too much traceability.
I alluded to the likes of Russia and mercenary groups in my post yesterday, Elections are due next year and the President is not certain of getting in. I am pretty sure Petronas wouldn't deal direct with Russian state buy by proxy possibly but at what cost to South Sudans future ?
South Sudan’s President Salva Kiir is in Moscow for talks with Russian President Vladimir Putin.
The visit comes at a time when Russia and Western powers are trying to woo African support in the wake of the invasion of Ukraine.
Mr Kiir arrived in the Russian capital on Wednesday and was received by Deputy Foreign Minister Andrey Rudenko Yurevich, according to statement from the president's press unit.
Mr Kiir's office says the meeting with the Russian president on Thursday will discuss prospects for the development of bilateral relations in various areas, as well as regional and international issues.
It adds that the visit aims at deepening diplomatic relations and explore other areas of co-operation on trade, investment opportunities and security.
The two leaders will also discuss the lifting of an arms embargo and targeted sanctions imposed on individuals in South Sudan, the statement added.
In May, Russia abstained in the UN Security Council vote to renew sanctions imposed on South Sudan, which include asset freezes, travel bans and an arms embargo.
Rockyride - oh believe me I am not hinging on that fact. I know they are not worth the paper in normal circumstances. But we don't know the specific clauses that were attached or the petroleum contracts in place as zengas alluded to earlier and how that ties in with the South Sudanese petroleum law. At the end of day I totally agree it's a binary choice between us or no sale, unless they can muster up the loan but there is a slim chance of that. The third option is deal inertia as i referred to earlier continuing to drag the deal without a yes or no..........................