Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Thanks RR. Nothing much that I could add and just waiting out the timeline of the next 8 weeks. Hopefully news before then.
Cheers Rocky, so Naira debt restructure could happen anytime now excellent.
Really appreciate this info RR.
Fingers crossed for Naira facility (sounds positive) and South Sudan completion.
PART 3
3) PR
We are being given very minimal information with regards current activity and current / future strategy. We only hear from Andrew when he feels compelled to do so. Can I ask that you put together a Webcast / presentation to be delivered to PI's with a'live' Q&A and not pre-submitted questions? On this note can I also ask that Andrew speaks a bit slower and more clearly as when he's in Africa, I really struggle to understand what he says. I note that we were promised an informal night (meet the BOD) for PI's with nibbles etc which has not yet materialised. Could I please request that you put something on for us sometime in Q4?
We plan to give a detailed strategic update for all investors around the publication of our Admission Document in Q4 2023. We note your comment on the informal evening and will revert once an appropriate date has been considered.
Kind regards,
Sally
PART 2
We conduct thorough due diligence on all of our proposed acquisitions, whilst recognising that we operate in often challenging emerging market jurisdictions. We have a robust risk management framework in place to ensure that clear procedures for risk identification, assessment, measurement, mitigation, monitoring and reporting are aligned with Savannah’s strategic aims and the Board’s risk appetite – see pages 92-101 of our 2022 Annual Report for more details on our Risk Management.
How many cases do we have with the ICC, what is their current status and do any of them have hearing dates listed?
In relation to the nationalisation of our interests in Chad, we have three arbitrations seated with the ICC in Paris, and one seated with the ICC In London. These have been brought by our subsidiaries Savannah Chad Inc (“SCI”) and Savannah Midstream Investments Limited (“SMIL”). We will provide further updates as appropriate in relation to the progress of the various cases. However, these are currently at a relatively early stage in the process.
Are SAVE still looking to undertake new M&A in as I would like to see us sort out our core business before we take on any more risky, very expensive M&A activity? I'd like to see debt sorted, compression completed and new customers added in Nigeria before we take on any other deals. Personally I think we should work on a consolidation plan for a period of time.
As noted above, we expect to have the Naira transitional facility in place in Q4 2023. As noted in our Half Year 2023 results announcement, we are making good progress on the US$45 million compression project in Nigeria. Following the front-end engineering and the associated order of long lead items, detailed design work has commenced and is on track to be completed in Q4 2023, while startup is planned for mid-2024. We also added new customers in Nigeria and have seen continued momentum in H2 2023, with contract extensions secured with three customers, amounting to a total of up to 85 MMscfpd. Such is the strength of demand for gas in Nigeria that we were also pleased to reach an agreement with Amalgamated Oil Company Nigeria Limited (“AMOCON”) in the first half of this year, to purchase up to 20 MMscfpd of gas from them over the course of the next ten years. As mentioned in our CEO’s Letter to Shareholders in Savannah’s 2022 Annual Report, we continue to review M&A opportunities and will pursue those which we believe would be accretive for shareholders.
PART 1
Back from a stunning City break in Valencia now and pleased to have received a very comprehensive reply from Sally this morning. Personally I can’t fault the reply at all and am extremely grateful for such a detailed reply for which i have replied with my sincere thanks. I won’t analyse or comment on the words below but It would great to hear the views of the folk on here who know SAVE well - you know who you are LOL:-
1) Debt
We have known about this issue since the completion of the 7E RTO. We have also been working on it for in excess of two years with several 'expected dates' for closure missed. How on earth have we ended up in this situation whereby failure to renegotiate or refinance our current debt will seriously jeopardise the going concern of the whole company?
Why was this not completed to stabilise, underpin and safeguard the company before we embarked on our very risky M&A activities?
As you say this issue is not new, having been disclosed in our accounts since 2021. The refinancing of the debt acquired upon the Nigeria acquisition has taken longer than originally anticipated. However, as noted in our recent Half Year 2023 results announcement, we anticipate putting in place the Naira-denominated transitional facility during Q4 2023, with a term sheet already agreed with the lenders for this facility. We also do not consider that the current financing in any way jeopardises the financial stability of the company – we continue to adopt the going concern method of accounting and the audit opinion from BDO is not modified in this respect.
2) M&A
Having had a team of people conducting due diligence on over 20 potential opportunities in multiple countries, why did we decide to go in to 2 (Chad & South Sudan) of the most corrupt, dangerous and untrustworthy jurisdictions in Africa? With only Accugas underpinning the company, why did we not take on lower risk profile M&A opportunities before taking on these very cheap, very high risk deals?
What is going on with the South Sudan deal? After all the recent press speculation, why have SAVE not updated the market? If this press speculation had occurred while we were trading, the share price would have tumbled and I'm sure you'd have had to issue something. Why is this different while we are suspended?
As noted in our recent Half Year 2023 results announcement, we continue to advance the various workstreams required to complete the acquisition of PETRONAS International Corporation Limited’s energy business in South Sudan (the “PETRONAS Acquisition”) and intend to publish an AIM Admission Document in respect of the PETRONAS Acquisition on or before 15 December 2023. Whilst we do not comment on press speculation, we would note that both ourselves and PETRONAS are continuing to engage fully with the Government of South Sudan and are all working together in country as we continue to progress the transaction to its expected completion.
Https://www.businessincameroon.com/public-management/1010-13461-cameroonian-joseph-pagop-noupoue-fired-from-ernst-young-for-policy-violation#:~:text=(Business%20in%20Cameroon)%20%2D%20Cameroonian,Ernst%20%26%20Young%20(EY).
Business in Cameroon) - Cameroonian lawyer Joseph Pagop Noupoué has been removed from his position as Country Managing Partner at the international accounting firm Ernst & Young (EY). A recent internal memo co-signed by Erik Watremez, the interim Country Managing Partner for Cameroon and Gabon, and Marcel Van Loo, EY's Western Europe Region Manager, cited policy violations as the reason for Noupoué's dismissal. The memo also stated that Noupoué is no longer employed by EY and is attempting to separate the Cameroonian legal entities from the global EY network, which his former partners do not agree with.
"We would like to reaffirm that EY's management in Cameroon has been restructured with Erik Watremez, Acting Country Managing Partner of EY Cameroon, Abdoulaye Mouchili, Head of Assurance EY Cameroon, and Anselme Patipewe, Head of Tax EY Cameroon. They will continue to lead EY's activities in Cameroon, meeting clients' needs in both audit and tax", the memo reads.
This change has raised questions, with some speculating that it may be connected to Noupoué's involvement with Savannah Energy, a British junior oil company. Noupoué, who is the sole known Cameroonian shareholder in Savannah Energy, was part of a recent diplomatic dispute between Cameroon and Chad. The dispute arose after Cameroon signed an agreement with the National Hydrocarbons Company of Cameroon to transfer 10% of Cotco assets, the company managing the Cameroonian section of the Chad-Cameroon pipeline. Chad claimed that Cameroon had engaged in unfriendly actions by contracting with a "fishy" group associated with Cameroonian figures who were challenging Chad's nationalized oilfields following Exxon Mobil's departure.
Noupoué's involvement with Savannah Energy became official when he was appointed as a non-executive director on the company's board in April 2023. He was also named to succeed Steve Jenkins, Savannah Energy's current non-executive chairman, who plans to retire after serving eight years in the position. To join the company's decision-making body, Noupoué purchased 6,095,726 new shares at £1.6 million (about CFA1.2 billion). This acquisition gives him a 0.46% stake in the company's total voting rights. The source of funds for this acquisition remains undisclosed.
"I am delighted to be joining Savannah at this key time in its growth and look forward to bringing my experience to the role. I would like to thank the outgoing Chairman, Steve Jenkins, for guiding this company since 2014 and I look forward to working with him, the rest of the Board, and the management team to achieve our many and wide-ranging goals. It's very clear to me that Savannah is ambitious and fueled by a passion for doing good in the world. The benefits Savannah has brought to the African community in Nigeria and Niger, and the projects for Cameroon and South Sudan, are impressive and obvious," he commented following his appointment.
https://www.businessincameroon.com/public-manag
I’m sure this will get sorted but it’s jut a matter of time. I think our projects will also be fine but god knows what delays we will have to put up with.
“ Algeria has announced it has suspended its efforts to mediate the political crisis in Niger following the coup in July.
Its foreign affairs ministry said in a statement on Monday that declarations from Nigerien authorities had raised “legitimate questions about their real willingness to follow through on their acceptance of Algerian mediation”.
It has now put the process on hold pending commitment from the junta to continue with the mediation.
Last month, Niger accepted Algeria’s offer to mediate in its political crisis aimed at returning the country to constitutional rule.
In August, Algeria had proposed a six-month transition period led by a civilian authority.
But the head of the junta, Gen Abdourahamane Tchiani, who seized power in July, wanted a three-year transition period.
Algeria had also objected to a military solution to the crisis in Niger following threats by the regional bloc Ecowas of a possible military intervention to restore democracy.
Nigerian President Bola Tinubu, who is also the chairman of the regional bloc, had welcomed the mediation process, but this latest development will further frustrate efforts to resolve the political crisis in Niger.”
With rising oil prices it would be nice to have some to sell 🤔
With growing energy demand and a determined effort to exploit its abundant natural resources, the country finds itself at a pivotal moment where innovation, environmental management and economic progress converge.
“Tapping into Niger’s rich hydrocarbon reserves and exploiting its abundant renewable energy potential are not only crucial steps for the country’s sustainable development, but also a means of consolidating its role as an energy leader in the region. Increased investment and infrastructure development will not only boost Niger's economic growth, but will also significantly contribute to the energy security and environmental sustainability of the entire West African region. , says NJ Ayuk, executive president of the AEC.
Minister Barké's statements promise to be a highlight of AEW 2023, providing a unique perspective on Niger's role in the global energy landscape and its journey towards a sustainable and prosperous future.
AEW is the AEC’s annual conference, exhibition and networking event. AEW 2023 will bring together African energy decision-makers and stakeholders with global investors to discuss and maximize opportunities across the continent’s energy sector. For more information on AEW 2023, visit https://aecweek.com
https://aecweek.com/le-ministre-nigerien-du-petrole-des-mines-et-de-lenergie-se-joint-a-aew-2023-pour-presenter-le-programme-energetique-durable-du-pays/
Mahaman Moustapha Barké, Nigerien Minister of Oil, Mines and Energy, will meet other regional ministers and global investors during the African Energy Week in his active search for investments for Niger's sustainable development.
Niger is making significant progress towards its sustainable development. The country has huge proven reserves of oil and gas, as well as significant deposits of minerals and untapped renewable energy resources. As global attention increasingly turns to environmental preservation and equitable economic progress, Niger's energy sector is emerging as a focal point for investment opportunities.
As such, the African Energy Chamber (AEC) is pleased to announce the participation of the new Nigerien Minister of Oil, Mines and Energy, Mahaman Moustapha Barké, as a keynote speaker at the Africa Energy Week (AEW) conference and exhibition, scheduled for October 16-20 in Cape Town. Minister Barké will highlight the opportunities and challenges of Niger’s dynamic energy sector while providing valuable insights into promising investment prospects that can propel sustainable development in the region.
As one of the largest countries in West Africa, Niger has significant surface water resources in regions such as the Niger River Basin and the Lake Chad Basin, as well as a wealth of mineral resources, including uranium, gold, coal and oil. The country's main economic activities include agriculture, livestock, fishing and handicrafts, with exports including oil, uranium, gold, livestock, etc. As a major player in uranium and oil production, Niger, led by Minister Barké, is poised to further develop its energy sector, with ambitious goals for sustainable development.
In line with its sustainability objectives, Niger is actively diversifying its investment landscape by developing its renewable energy sector. The country has attracted considerable investor interest, driven by its abundant solar and wind resources. Savannah Energy Niger Solar notably concluded an agreement with the government to develop two solar power plants with a total capacity of 200 MW. This initiative follows a 2022 agreement between the same company and the government for a 250 MW wind project. These renewable energy initiatives will significantly improve sustainability and strengthen energy security in Niger.
Meanwhile, on the oil front, Niger is expected to begin crude oil exploitation by the end of 2023, marking a significant milestone in its oil production journey. The flagship Niger-Benin oil pipeline project is almost complete, with 98% progress. This project will increase Niger's crude production to 110,000 barrels per day (bpd) and provide access to global markets via an export terminal on Benin's Seme coast. Currently, Niger produces 20,000 b/d from the Agadem block, operated by the Chinese National Oil Company (CNPC), processed locally at the Zinder refinery.
Seplat founder banks on buying assets from TotalEnergies and Equinor to revive his career
French oil major TotalEnergies is reportedly on the verge of selling part of its Nigerian oil assets. The former CEO of Seplat, Austin Avuru, is in pole position to acquire them.
Austin Avuru, the founder and former CEO of Seplat, is considered as a preferred bidder in the process of buying TotalEnergies' 10% stake in the oil blocks of the Shell Petroleum Development Company of Nigeria (SPDC) joint venture, Shell's Nigerian subsidiary.
If Avuru wins with his firm Chappal, he would take over part of an asset representing 10% of Nigeria's domestic gas and almost 30% of the country's production. Added to this are 3,000km of pipelines in the Niger Delta, as well as two export terminals.
Two simultaneous deals
Avuru has the added advantage of being very well-connected to President Bola Ahmed Tinubu's power base. In June, he was appointed a member of the energy and natural resources sub-committee of the new head of state's advisory council, alongside Tinubu's special adviser on energy, Olu Verheijen (AI, 30/06/23).
However, Chappal's interest in deals could prove to be a drawback. At the same time, it has also won preferred bidder status in the bid to acquire the assets of Norway's Equinor in Nigeria - essentially the 20.2% stake in the giant Agbami field operated by Chevron. Yet it may be difficult for Chappal, which does not yet own a single asset, to complete both purchases simultaneously.
If the purchase of TotalEnergies' shares is confirmed, Avuru could find himself in partnership with his former employer, Seplat, which has been bidding for the 30% stake in SPDC that Shell has been trying to sell since 2022.
Shell stalls for its 30% stake
In addition to Seplat - which is currently busy with its unsuccessful takeover of ExxonMobil's shallow water oil blocks - a number of other companies are also in the running to buy Shell's 30% stake in SPDC: Heirs Holdings (owned by banker Tony Elumelu), Sahara Energy (the trading subsidiary of Sahara Group led by Tope Shonubi) and ND Western (comprising Niger Delta Petroleum and, among others, Beninese businessman Samuel Dossou-Aworet).
Elumelu has approached Tullow Oil and Gran Tierra Energy to form a trio capable of financing a deal worth nearly $3bn, as we revealed (AI, 07/04/22).
Despite this clear interest in its SPDC interests, Shell has apparently decided to give itself more time before completing the transaction.
Looks like oil and gas outlook from OPEC underlines the underinvestment in the sector and demand is not going anywhere in the short medium or long term
https://www.reuters.com/markets/commodities/opec-raises-oil-demand-view-long-term-outlook-2023-10-09/
Niger has been forced to cut its budget by 40% over the impact of sanctions and suspension of aid after the 26 July coup. There are fears that the sanctions may worsen the economic situation in Niger - one of the world’s poorest countries.
In a statement on Saturday, the military junta announced a 2023 budget cut from $5.3bn to $3.2bn, although details of the cuts are lacking.
The West African country depended on over 40% of this year’s budget on aid from external partners.
The coup which ousted President Mohamed Bazoum attracted regional and international sanctions including border closures, frozen assets and halted aid supplies.
The import-dependent country has recorded soaring food and commodity prices and limited supply of medicines, owing to trade restrictions.
This has however not deterred popular local support for the junta.
Posted (copied and pasted) on another board, but just as relevant here, being as oil and gas based here.
Very sad news flow...
I am interested to see if it does commence how aggressive can Savannah be in terms of securing pipeline capacity and getting some well drilled and flow tested.
In my personal opinion if the pipeline does commence and we are aggressive I think we can get to 5-10k of production from Niger by the end of 2024 and up to 20k by end of 2025………………
It’s important savannah start to get some reserves booked and start producing some oil up to 5k Bopd than Niger will almost become self funding. I am sure once we book reserves and get some production we could easily get access to some RBL debt facility so Niger becomes a self
Sustaining production based that can grow from its own revenue and reserves
WSJ
https://twitter.com/JavierBlas/status/1710981702275694683?t=gFIZygVYokuM0FPNpGYuyQ&s=19
Bloomberg pt2
7) The Saudi-Israeli diplomatic deal, which many had penciled in for early-to-mid 2024, is a casualty. Even if Riyadh is likely furious with Hamas, it’s difficult to see how Crown Prince Mohammed bin Salman would be able to sell the deal domestically. That, in turn, removes the potential for Saudi Arabia pumping more oil to help passage of the deal in Washington. The other victim of the Hamas-Isaeli war is the Saudi-Iranian rapprochement, which itself was another bearish element for oil.
8) Finally, a key difference from 1973, Washington can tap its Strategic Petroleum Reserve to limit the impact on gasoline prices — and on President Joe Biden’s approval rating. If oil prices surge because of tension in the Middle East, the White House is sure to tap the SPR. Although it’s at its lowest level in 40 years, the reserve still has enough oil to deal with another crisis.
Bloomberg pt1
For oil it's not 1973 again, but it could still turn ugly:
History doesn’t repeat itself, but it often rhymes. On the eve of the 50th anniversary of the world’s first oil crisis, the parallels between October 2023 and October 1973 are easy to draw: A surprise attack on Israel and oil prices rising. But the resemblance ends there.
The global economy isn’t about to suffer another Arab oil embargo that would triple the price of a barrel of crude. Yet, it would be a mistake to downplay the chances that the world faces higher-for-longer oil prices.
2) The oil market itself doesn't have any of the pre-October 1973 characteristics. Back then, oil demand was surging, and the world had exhausted all its spare production capacity. Today, consumption growth has moderated, and is likely to slow further as electric vehicles become a reality. In addition, Saudi Arabia and the United Arab Emirates have significant spare capacity that they use to curb prices – if they choose to do so.
3) As importantly, today, OPEC nations aren’t trying to boost prices beyond a few extra dollars. Riyadh would be content with oil prices rising another 10-20% higher, to just above $100 a barrel from $85 currently, rather than pushing them more than 100% higher to $200 a barrel. Just before the October 1973 oil embargo, OPEC nations unilaterally hiked the official petroleum prices by about 70%. Although the embargo is the element most vividly remembered of the crisis, the price hike was as crucial.
4) The fallout could yet have an impact on oil markets in 2023 and 2024. The most immediate impact could come if Israel concludes that Hamas acted on instructions of Tehran. In that scenario, oil prices could go much higher. In 2019, Iran demonstrated, via Yemeni proxies, that it’s able to knock down a significant chunk of Saudi oil production capacity. It could do the same as retaliation if it finds itself under Israel or American attack.
5) Even if Israel doesn’t immediately respond to Iran, the repercussions will likely affect Iranian oil production. Since late 2022, Washington has turned a blind eye to surging Iranian oil exports, bypassing American sanctions. The priority in Washington was an informal détente with Tehran. As a result, Iranian oil output has surged nearly 700,000 barrels a day this year – the second-largest source of incremental supply in 2023, behind only US shale. The White House is now likely to enforce the sanctions. That could be enough to push oil prices to $100 a barrel, and potentially beyond.
6) Russia will benefit from any Middle East oil crisis. If Washington enforces sanctions against Iran, it could create space for Russia’s own sanctioned barrels to both win market share and achieve higher prices. One of the reasons why the White House turned a blind eye on Iranian oil exports is because it hurt Russia. In turn, Venezuela could also benefit, with the White House relaxing sanctions to ease market
Of course presuming no major delays in completing the oil pipeline that is, as the article seems to imply. 🤞
TIL, good read thanks,
Let's get a share of the spare (after CNPC) oil pipeline capacity as soon as possible, presuming first come, first served.
Https://www.linkedin.com/posts/kabirou-zakari-oumarou-213464101_le-niger-fait-un-grand-pas-dans-lindustrie-activity-7116383274423193600-4MOb?utm_source=share&utm_medium=member_ios
Niger is taking a big step forward in the oil industry.
Over the past three years, intense activities have led to the development of 109 new fields on the Agadem block and the construction of the longest pipeline in Africa, with a length of 1950 km, from Agadem (eastern Niger) to the maritime coast of SEME in Benin.
All the work is at a 98% completion rate. By the end of this year, the first cargo of Nigerien crude oil, the "MELECK", will be loaded to the international market.
Indeed, in addition to the 20,000 barrels produced per day and entirely destined for the Soraz Refinery (Zinder) since 2011, an export production of 90,000 barrels per day will start in December 2023. This export production will certainly increase in view of the very promising research underway on other blocks and the enormous unexplored potential of the Nigerien oil cadastre.
As a next step, Niger wants to create more added value, with a focus on the creation of a petrochemical industrial hub and placing the oil sector at the heart of Niger's industrial policy.
Be prepared to receive MELECK, a quality crude oil with a very low sulphur content.
Welcome to MELECK, Welcome to Niger!
Sound like positive news as we know that xi ping has been in deep discussion with Niger, Benin and Ecowas and is pulling his weight with China heavily invested in the pipeline project. If the pipeline is resumed, I want to see aggressive drilling campaign and securing some pipeline capacity from Savannah in Niger
Africa Oil week this week - https://africa-oilweek.com/home followed by Africa Energy week https://africa-oilweek.com/home
It would be interesting to see if any major deals that come out of these 2 events in south africa and the tone in the african oil and gas space not Savannah Energy Specifically but across the sector.
One thing is the timing of these 2 events couldn't be more pertinent as global events such as the Israel / Palestine conflict is showing we are in a fragile energy security world and on top of that the severe under investment that has been going on the the last few years has really put a strain on long term supply outlook for oil and gas when demand still continues to grow.....................
If Africa really wants to attract capital it will not find a better moment in terms of selling itself as the destination of choice by ensuring deals are done swiftly and ensuring that there is transparency is the sector. The greatest winners in the african oil and gas space will be the countries that are willing to sanction deals quickly.............
On the capital front i do see more capital flowing into the african oil and gas space and should loosen the strings on debt providers as they will be more keen to fund deals and back the independents which they feel have the capabilities to deliver............. Savannah would have to be one of those independents that would be on top of the list or there abouts with there ESG credentials making it a safe vehicle for debt providers to park their capital with allowing them to still have a piece of the oil and gas pie without the scrutiny of not complying with ESG and Carbon reduction agenda as Savannah has made significant strides in this aspect shown from there various ESG and sustainability reporting.
I truly believe debt is available for the right deal which can get through the technical & regulatory approvals. As for the SS deal who knows their could be a condition this this round the debt providers might want to see explicit consent granted from government before execution........................................................
Plus considering the fact that AK consistently keeps on saying we continue to look for hydrocarbon acquisitions surely he knows or there must be a list of debt providers that are willing to grant debt to savannah for acquisitions obviously with certain t&c's and the major one being approvals for acquisitions from host countries.................................
Agreed, Rocky. Cash received for delivered (or to-be-delivered) oil and gas is all that really counts.
If anyone spots any articles concerning Naira liquidity (or otherwise) in a post-dollar-peg world, I'd be grateful if they'd post. It would be good to see if any corporates are getting Naira away spot, in size.
Enjoy beautiful Valencia: I'd live in Spain if it weren't for the taxes and the socialism.