Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
In March 2021 [see post dated 07.03.2021] I posted details of the 4004 sq km Saouaf Licence which occupies the area immediately north and west of the 2200 sq km N Kairouan Permit in which ZEN has a 22.5% interest, which will double with anticipated acquisition of the KUFPEC Sidi El Kilani [SLK] interest. This was prompted by the announcement from Upland Resources of an open tender for a potential farm-in regarding the 15 potential plays identified in the Saouaf area and by the fact that the SW Enfidha structural high appears to extend from Saouaf into the N Kairouan permit area. I added that at the time it seemed unlikely that ZEN would be interested in such a farm-in but indicated the potential significance this might have for future development of the N Kairouan permit area.
Upland Resources Ltd [UPL] acts as operator of Saouaf, with ETAP [State Oil Co] as partner in a 50/50 JV [see www.uplandres.com for details]. On March 16 2022 UPL announced a Heads of Terms agreement with Pennpetro Energy Ltd for a proposed farm-in for Saouaf but in a 20th June RNS, announcing restoration of trading, refers to “a continuation of discussions with interested parties, as well as opening discussions with new potential partners”.
UPL has a market cap of £1m, is desperate for cash, and will probably prioritize its Moray Firth and/or Asian interests, if it survives as a going concern. It was suspended from the LSE, I understand for failing to meet a regulatory deadline regarding accounts, and has I believe failed to meet the Tunisian requirement of a guarantee deposit bond relating to Saouaf.
The reference to “opening discussions with new potential partners” leads me to surmise that ZEN could now be interested as AC may see this as an opportunity for acquiring further assets, at a bargain price, from a distressed seller.
AGEOS
Fakevenues,
Yes. The operating permit was granted to Trident OGX on 14.12.2021 [as I posted on 06,02,2022 albeit with reservation as to reliability of the report] but the “process of transferring the MKB II permit ie concession from SNPC to Trident was launched on 17.05,2022”. The photo appears to relate to the second event as implied by the “Legendes et credits photo”.
As posted on Friday, at 09.42, the award of the MKB operational license to Trident OGX, suggests that the Ministry of Hydrocarbons may also be in the final stages of progressing the award of the Tilapia II license, as anticipated in favour of Zenith. Bruno Itoua, the new Minister of Hydrocarbons, had declared on appointment his intention to expedite development of the Fields controlled by SNPC and specifically mentioned MKB as the primary concern. Having now it appears, achieved that objective, it seems reasonable to assume that Tilapia II, the only other Field currently under direct SNPC control, will be similarly resolved.
On 12.04.22 in a post regarding the Tilapia II contract, I mentioned [para 4] that Maixent Raoul Ominga had been reappointed as Directeur General of SNPC despite the efforts by Bruno Itoua to replace him, and conjectured that the inevitable mutual enmity between these two might impact on a successful conclusion of the Tilapia contract. However, the apparent conclusion of the MKB deal suggests that Itoua has the upper hand in negotiations involving SNPC assets, so providing some reassurance that the Tilapia contract should be unaffected.
Political dynamics at this level are complex and inevitably affect economic outcomes so I note that the photo accompanying the May 18th news item to which Fakevenues supplied a link [see his post 19.05.22, 23.11.], shows the Minister Bruno Itoua [3rd from left[ seated next to Maixent Ominga [4th from left] and the new DG Ministry of Hydrocarbons Stev Onanga [5th from left]. These are the same three whom AC will be negotiating with regarding Tilapia. Ominga and Onanga have close ethnological links to the President.
The loss of at least part of MKB [ assuming the Tchiniambi Field is included] as a potential “second asset” is disappointing but not altogether surprising; after all, Orion Oil paid $150m for a 20% interest in 2013 and although then based on a wildly optimistic assessment of there being 1.3 billion barrels of oil reserves, Trident OGX obviously believe it still has significant potential. As I posted on 06.02.2022, Trident appear to be basing their interest in MKB on a study of the Mengo Reservoir so their relative success or failure in enhancing production will have relevance to the Mengo at Tilapia. MKB lacks an equivalent to the Tilapia Djeno reservoir but has the deeper Vandji prospect.
This plus the May 10th EUR 1.3m loan “to provide additional financial support for the achievement of its business development objectives in the Republic of the Congo” suggests Tilapia II negotiations may not be far from conclusion.
AGEOS.
Fakevenues; thanks for the link to what is a significant development.
In my post of 06.02.2022 regarding the involvement of Trident OGX Int Pte Ltd in an MKB Field production potential study, I maintained a previously outlined proposition that MKB in part or whole might be the “second production asset” first announced by ZEN in an RNS of 07.07.2020. Clearly this latest announcement confirms that the MKB Concession will henceforth be shared by Trident OGX, Orion Oil Ltd [controlled by Lucien Ebata], SNPC [state oil company] and the Congolese government, and operational control is granted to Trident OGX for 20 years.
Although this removes MKB from the ZEN list of potential “second assets”, it provides some reassurance that the Ministry of Hydrocarbons may now be about to move on the Tilapia concession also. As previously posted [20.07.2021 & 08.08.2021], Bruno Itoua the new Minister of Hydrocarbons, was highly critical of Maixent Ominga CEO of SNPC for not having developed the MKB Fields, and had also appointed Stev Onanga as DGH [Directeur General des Hydrocarbures] within the Ministry to expedite this and other developments. Onanga was previously General Manager of SONAREP, the Research & Production subsidiary of SNPC, with responsibility for the State's interest in both Tilapia and MKB.
With the MKB II licensing process now underway it seems likely that Tilapia II will follow shortly.
AGEOS
Sentimentalist
I am unsure as to the validity of the information you have posted on the Robbana Field as the reference “Offshore Technology dot com” you provide, and every permutation of it, only produced invalid search results. However, with regard to the anticipated production and recoverable reserve figures quoted these must pre-date the G & G [Geology & Geophysics] study and figures published by Candex the previous owner/operator, published on SEDAR in 2015. The recoverable reserves you quote, of 0.08 Mmboe [ie 80,000boe] economical to 2055, implies a production rate of 6.6boed from today until 2055.
The Candex figures are included in my posts of 04.05.21 and 03.10.2021, and were redefined in December 2019 as “contingent reserves [1C] of 10.99 MMSTBO [million stock tank barrels] of remaining oil in place from the Lower Cretaceous Mu1 and Mu2 reservoirs, plus a further 5.4 Mmbls [million barrels oil] from the deeper and as yet undrilled Middle Meloussi Formation.” See posts for detailed information.
AGEOS
CanaryinTM
From my limited knowledge of the procedures it appears from the video that Schlumberger used a transmission wireline which was fed through the production string to log the well casing within the production zone and may also have completed remediation repairs. They have various techniques for applying “through-tubing patches and packers”via high pressure wirelines designed to transmit cements and sealants, so in theory could have completed the job. However, if so I would have expected the video caption to have stated “job done”. Whatever the result we should know within a few days.
Note that 0.17min into the video there is only a single length of production pipe on the pipe-rack [confirmed at 0.31min ], and at 1.14min, that pipe has presumably been 'tripped' back in at end of procedure. That suggests the production pipe was raised sufficient to allow logging-tool access to the production zone only and to enable the through-pipe procedure to proceed.
Assuming a successful conclusion, ROB-1 should be back on stream soon.
AGEOS
MG
The view of the second rig you refer to, which is equally visible in the opening shot, is insufficiently detailed to identify its functionality. Bear in mind that the sequence of workover activities could require two rigs with different capabilities ie removal of production tubing string; insertion of wireline to perform logging and examination of casing integrity, and in the event of casing damage being identified, repair or replacement of casing. The rig in place over the wellhead is the same one pictured in the April 6th image captioned as “ workover rig on location at ROB-1” and appears in this latest video to be set up for removal of production string. The second rig appears to be on a shorter transporter implying a different truck-based assembly which could conceivably include the Schlumberger wireline unit. A wholly 'left-field' possibility is that this is the BD-80 A-100-ton truck mounted 375HP workover rig imported from Azerbaijan. The only visual of it confirms the colour scheme but was taken from the cab end at ground level and before the two upgrades.
With regard to workover activities at Ezzaouia, according to the March 4th Prospectus page 42, this has now evolved to “three workover interventions and two sidetracks in non-producing wells over the next 18 months.” no doubt having evolved due to ongoing geological studies in cooperation with ETAP. These activities will be undertaken by MARETAP, the joint operating company, through which the rig-hire and operational contract will be negotiated on a 50/50 basis with ETAP the state oil company. Robbana contracts are 100% ECUMED, on behalf of ZEN.
When viewing this latest ROB-1 video I was equally interested in looking for signs of possible site preparation for ROB-3 which should be within 0.5km of ROB-1. Unfortunately nothing visible. The walled compound, centre left in the opening shot is not it as it has an entrance gate of Islamic form.. The March 4th Prospectus page 42, item 3, states “For the planned drilling of the Robbana-3 well in the Robbana concession the Issuer plans to spend £600,000, plus another £300,000 for the cost of transporting the Company's drilling rig to Africa.” So maybe we will see the BD-250 rig in place for ROB-3.
AGEOS
ROB-1 workover rig in place and appears ready to begin operations as of the 12th April.
https://t.co/qK2jtNNB3u
In the absence of an RNS update on progress relating to the Tilapia II contract, the latest information we have is that included in the ZEN Prospectus dated March 4th 2022.
On page 35 [and in greater detail on page 48] of the Prospectus, it confirms that on December 23rd 2020 [as previously RNS'd] Zenith Energy Congo SA had been selected as the successful bidder for the award of a new 25-year license to operate the Tilapia II oilfield and that on February 10th 2021 the company had successfully completed the necessary public utility inquiry. It also confirmed that the final steps [yet to be concluded] would be the finalisation and ratification of a production contract and a drilling license, by the Ministry of Hydrocarbons.
Successful completion of both the bidding process and public inquiry provide a significant degree of legal and financial redress if the Congo authorities fail to complete the remaining stages in the award process. These stages include the award of a production contract, issue of a drilling license and receipt of the $5.7m due from SNPC. It is stated on page 41 of the Prospectus that discussions are in progress to settle this payment issue, and importantly, that all capital expenditure [relating to Tilapia] is deferred until the funds are received. Only then will drilling proceed.
Although there appears to be no obvious reason for delay in completing the Tilapia II contract, I suspect that competition between rival factions in the governmental administration are in play. In early March, Maixent Raoul Ominga was reappointed as Directeur General of SNPC [State Oil Company] despite the efforts of Bruno Itoua, the recently appointed new Minister of Hydrocarbons, to replace him. Itoua had publicly rebuked Ominga for failure to develop the MKB fields, and by implication Tilapia also, as management of both had long been Ominga's responsibility..Since both SNPC and the Ministry will be involved in the contract award process, hostility between the heads of both organisations is hardly conducive to a rapid conclusion to negotiations. See 20.07.2021 & 08.08.2021 posts for background details.
Since we know that the award of Tilapia II will be the prelude to the anticipated award of a second asset, which I have previously conjectured to be one or more of the MKB fields, and there has been no confirmation of the rumoured award of MKB to Trident OGX [see 06.02.2022 post for details], I conclude that ZEN remains front-runner for both Tilapia and at least part of MKB. We can only await developments.
AGEOS
Mambamentality
Thanks for acknowledging and re-posting part of my 21.01.2019 post relating to Guaimarala. It is encouraging to know that my observation on that aspect of ANZA was noted by at least one contributor to this chat-site and was not, as I conclude for most, a waste of my time.
I wish you success with your investment.
Buko
Yes, you may well be right and this is just a routine update prompted by a three month time-lapse since the last one. However, as Rimsha has just emphasised, why now and especially with an updated presentation, when nothing to justify a significant update has been reported during the three months. A Conference Call and update in mid-late March would at least allow inclusion of further developments re Nigeria and Tunisia.
I was also influenced by awareness of the MKB Field potential developments, sufficient to conclude that ZEN might be close to revealing progress in Congo [Brazzaville] which alone would justify a major presentation update and elicit a conference call arranged at what seemed short notice. This would of course also require a prior RNS.
However, perhaps the timing of the Conference Call & Presentation is influenced by matters more mundane but nevertheless of special concern to AC, namely the 25% fall in market capitalisation on the Oslo/Euronext Market in recent weeks, from 210m NOK [£17.5m] to 160m NOK [£13m].
Whatever the motivation no doubt there will be some revelations of interest tomorrow and especially if even half of the questions submitted by MarketGunslinger are answered.
The ZEN Press Release relating to the Investor Call, posted on the Euronext website [link below] includes reference to “an updated corporate presentation (to be made available for download on the morning of February 22, 2022, ar www.zenithenergy.ca )
https://live.euronext.com/en/product/equities/CA98936C1068-MERK#CompanyPressRelease-8853746
Leaving aside what appears to be an absence of similar disclosure to the London Market and a defective link on the company website which leads to a duplicate of the Nov 10th, 2921 Conference Call, the reference to “an updated corporate presentation” implies significant developments since the Nov 2021 Investor Presentation.
Having re-read that Presentation during the weekend I failed to find any part worthy of “updating” based on developments RNS'd since last November, so concluded there was a high probability of significant news prior to Tuesday's Investor Call. There is still time for such an RNS of course, although unlikely, so it will be interesting to see what constitutes an “updated presentation” in the anticipated absence of significant news in the remaining hours. The Investor Call itself cannot be a means of releasing significant information not previously released in RNS.
AGEOS
Even more confusion; this time by me it seems.
The SFP [ Societe de Forage Petroliers ] I refer to is the rig company quoted by AAOG on 12 Nov 2019 as undertaking the drilling at Tilapia, whereas the ZEN RNS of 11.11.2020 referenced by Fakevenues refers to the company as SMP [Societe de Maintenance Petroliere].
Without ploughing through the AAOG documentation presumably both drilling companies were involved but only one is the subject of ZEN's litigation ie SMP.
A bit of confusion there.
$5.3m [now $5.7m minimum] is the debt owed by SNPC {Societe Nationale des Petroles du Congo] to ZEN which is not subject to litigation and from which the initial fee relating to the Tilapia II licence will be deducted before payment of the balance, plus accumulated interest, presumably in cash. [ref RNS 20.07.2020 and several subsequent confirmations including 02.02.21 Financial Fox interview at which the amount was said by AC to be $5.7m including interest up to that date]
$3.1m is the minimum in compensation [could be substantially more] being sought by ZEN from SFP [Societe de Forage Petroliers] by litigation through the Paris courts for rig failures during the AAOG Tilapia drilling exercise.. It was referred to by AC during an Investor Call April 2021 and incorrectly reported by some as being “SNP” hence the subsequent confusion with SNPC. The court case is due Q1/2 this year.
AGEOS
I see from the latest “Newsletter to Fixed Income Investors” recently posted on the ZEN website, that AC has left little doubt that Tilapia is 'in the bag'. The following quotes appear to confirm this.
“Zenith Energy achieved a significant degree of growth during 2021 as we successfully implemented our strategy of acquiring revenue generating oil production and development assets in Africa, specifically in Tunisia and Congo Brazzaville, ...”
“It is our expectation that we shall soon be in a position to progress our activities in the Republic of the Congo for the award of a new 25- year licence for the Tilapia oilfield.”
AC is too astute to commit to such statements in a legally onerous document without certainty of a successful outcome to such a claim.
AGEOS
Florida, couldn't have put it better myself. The following details the operational controls in Tunisia.
Fakevenues, operational control of the Bibane & Robbana Fields and their associated infrastructure is in the hands of the Tunisia-based staff of Ecumed Petroleum Tunisia, a 100% owned subsidiary of ZEN, and acquired from Candax in April2021. Additional technical staff including a Production & Technical Director [ref AC July 2021] were appointed by June 2021.
Day to day operational control of the Ezzaouia Field and associated infrastructure [45% ZEN interest] is, on the other hand, maintained by staff of MARETAP, a 50/50 joint operating company owned in partnership with ETAP {state oil company with 55% interest]..A similar arrangement applies to the Sidi El Kilani Field but with CTKCP staff as operators.
The operational progress you want to see, presumably that of workovers, sidetracks and new-drills, was, as we know, outlined in RNS on 24th Jan for Robbana and Ezzaouia, with that of El Bibane under ongoing technical evaluation. The schedule may appear delayed but that is to misunderstand the evaluation and logistical process. ROB-3 is to be drilled from a new location due to a “geological and reservoir review” and the Ezzaouia sidetracks await “completion of a reservoir study” Similarly for El Bibane. The Production & Technical Director and his team will be the main determinants of this.
Further to yesterday's post on this subject, I see that the conference promoter, www.energycapitalpower.com includes the following statement in its promotional information.
“Leading upstream activities in the Kundji and Tilapia fields, SNPC drilled five appraisal wells in 2021, with a view to increasing output by 30,000 bpd. “
There is no evidence to suggest that any drilling has taken place at Tilapia since AAOG's efforts, so I conclude that all 5 appraisal wells undertaken by SNPC [State Oil Company] during 2021 were at Kundji and for geotechnical reasons, which I wont detail here, probably targeted the deep Vandji reservoir. This conclusion is confirmed by an SFP [State Drilling Subsidiary] statement that its MR 8000 rig has been exclusively employed in the Cuvette and Kundji prospects in recent years. In July 2020, I posted that the Kundji Field [one of the 4 MKB Fields] was the most likely target for the “second Congo asset” referred to in the 07.07.2020 RNS, as it had two functional wells, probably still in production from the Mengo sandstone in early 2019. The disclosure of appraisal drilling at Kunjdi during 2021 thus maintains the possibility of ongoing ZEN interest in this as a JV acquisition although admittedly complicated by the Trident OGX interest detailed in my 06.02.2022 post.
The conference brochure also includes, amongst the discussion topics, the following which may be of particular relevance to ZEN's potential strategic involvement in the local gas to power market, “Congo’s gas masterplan and the opening of new strategically profitable opportunities - strategies to monetize stranded and flared gas.” This has particular significance with regard to the gas resource at Tilapia. The AAOG Oct 2016 CPR for Tilapia cited estimated recovery factors of 5-20% for oil and 60-80% for gas from the Tilapia Djena reservoir, which is described as being a structurally confined gas resource with a significant oil rim. It would not be surprising therefore if ZEN's submission for the 25 year Tilapia licence included proposals for development of the gas resource. If AC appears on the speakers list for this conference it will be an encouraging indication of a probable positive outcome to this protracted negotiation.
AGEOS
Oil Review Africa, www.oilreviewafrica.com issued a promotional release on Jan 19th, for an Energy Summit to be held in Brazzaville from June 15-17, 2022, to which the link below should provide access. If not use the link above and search events.
Republic of Congo to host first-ever International Energy Summit in Brazzaville
Since the stated purpose of the event is to “showcase partnership and investment opportunities in hydrocarbon exploration, gas monetisation,[and] green energy.....with a focus on the Republic of the Congo as a key investment destination...” Bruno Itoua as “Minister of Hydrocarbons & President of OPEC for 2022” has plenty of incentive to finalise as many deals as possible in time for announcement at or before the conference.
Failure to complete the Tilapia/Zenith transaction by then would not go unnoticed by the international O & G industry and conference attendees.
AGEOS
Yes Fakevenues, and we can only hope the impact is a positive one.
With Congo [Brazzaville] ranked 162 out of 180 on the Transparency org World Corruption Index it is not impossible that the individual, self-styled as the “Director General of Trident OGX Energy Afrique” on a well known website for four months during 2021, might end up as a proxy in control of MKB. Orion Oil paid $150m for a 20% interest in MKB in 2013 on the basis of 1.3 billion barrels of oil reserves so the political elite will have their eyes on this one.
If AC can bring Tilapia intact into the ZEN fold it will have been a considerable accomplishment. To add even one of the MKB Fields at a similar cost would be masterly.