Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
On re-reading the TLW RNS - Guyana gets a passing mention, towards the end of the list of assets.
The Boards of Tullow and Capricorn believe this Combination:
(a) Creates a leading African energy company with a material and diversified asset base and a portfolio of investment opportunities delivering visible production growth.
· The Combined Group provides shareholders with a diversified pan-African upstream portfolio underpinned by low-cost producing assets, with a deep portfolio of incremental high return investment opportunities in Ghana, Egypt, Gabon and Côte d'Ivoire.
· Capricorn's Egypt portfolio provides significant opportunity to deliver self-funded growth production via infill drilling and low-cost exploration to sustain the resource base over time, whilst championing electrification and decarbonisation initiatives.
· The major resource development project in Kenya provides additional growth and value creation optionality.
· The substantial prospective resource base in Guyana and Mauritania provides material potential upside with limited capital exposure.
· Pro forma reserves and resources of 343mmboe and 696mmboe with 2021A production of 96kboe/d positions the Combined Group as one of the largest, listed independent African focused energy companies today.
As New Tullow will be mostly focused on Africa and as Guyana is in South America - I wonder whether the company may be planning to reduce their current 60% share in Orinduik down to zero or perhaps a token holding. I assume that Total / Qatar Petroleum, would be happy to increase their current rather modest stake with perhaps Total as Operator.
Now that would be great news IMHO
DEM
Are there rules regarding the 60 day extension? Do ICSID have to have particular reasons for it or is it at their discretion? (PD)
Chapter VI, The Award, Rule 46, Preparation of the Award
"The award (including any individual or dissenting opinion) shall be drawn up and signed within 120 days after closure of the proceeding. The Tribunal may, however, extend this period by a further 60 days if it would otherwise be unable to draw up the award."
Most likely reason for any delay would be the Dissenting Arbiter pleading that Covid etc had unavoidably delayed delivery of his report. However, this would be very unprofessional and might be regarded as a 'bridge too far' by Arbiter Dupuy. I would be reasonably hopeful that as an Award was close to being made back in 2019, that all the other relevant docs and reports have long been with ICSID. The 23rd Aug is starred in my Diary.
Of course, post Award, the Dissenting Arbiter could seek an Annulment by the ICSID Secretary-General. (see Chapter VII, The Application, Rule 50). However, there are very limited grounds ie
– the Tribunal was not properly constituted;
– the Tribunal has manifestly exceeded its powers;
– there has been a serious departure from a fundamental rule of procedure;
– the award has failed to state the reasons on which it is based;
They might try objecting on the second point but as the two previous challenges to ICSID's Jurisdiction have both failed (badly) - I think this objection would be rejected in short order.
See the last Section of this doc: 'Rules of Procedure for Arbitration Proceedings' commencing on page 99.
https://icsid.worldbank.org/sites/default/files/documents/ICSID%20Convention%20English.pdf
DEM
Correction
RKH RNS dated 19th April 2022.
DEM
I'm unclear as to why this conversation is taking place as Rockhopper already has an excellent Farm In partner - who is progressing through all the commercial and regulatory steps in double quick time.
"Rockhopper Exploration plc (AIM: RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin, is pleased to announce that, further to the heads of terms notified on 8 December 2021, Rockhopper, Harbour Energy plc ("Harbour") and Navitas Petroleum LP ("Navitas") have signed legally binding definitive documentation in relation to Harbour exiting and Navitas entering the North Falkland Basin (the "Transaction")." (RKH RNS of 22-05-2022)
In most respects Navitas is the ideal partner to farm into Sea Lion. The Navitas deal needs to be viewed in the wider context of the UK's growing trade and defence relationships with Israel.
https://www.gov.uk/government/news/uk-takes-first-steps-towards-new-trade-deal-with-israel
https://www.jpost.com/israel-news/article-702889
Israel has the giant Leviathan (22 TCF) and Tamar (11 TCF) gas fields in the Eastern Med - developed by Gideon Tadmor when he was CEO at Delek Energy, before founding Navitas.
https://www.thejc.com/business/features/the-gas-chief-with-a-whole-lot-of-energy-1.19176
However, Israel has quite modest oil reserves - compared to the FI who have 1.7bn barrels OIP in Sea Lion alone + potential gas fields in the SFB.
This should be a Win-Win deal for all parties and I have no doubt that FIG will be as eager as anyone to “Make it so”.
DEM
According to 560sl: "If you know a little history , after the 2nd world war. there was also talks that the Israeli State will be in southern Argentina ,but they chose the Middle East ! "
This is complete rubbish and is a regurgitation of the Anti-Semitic Conspiracy Theory called The Andina Plan.
According to Wiki:
"The Andinia Plan (Spanish: Plan Andinia) is a conspiracy theory that alleged plans to establish a Jewish state in parts of Argentina and Chile. It is partly based on an exaggeration of historical proposals for organized Jewish migration to Argentina in the late 19th and the early 20th century (which, however, did not include plans for a Jewish state there). The name and contents of the plan have wide currency on some circles of the Argentinian and Chilean left-wing[1] and right-wing, but no evidence of its actual existence has ever been brought up, making it, according to the US-based Anti-Defamation League and the Israeli research institute Jerusalem Center for Public Affairs, an example of a conspiracy theory".
DEM
Congratulations 560sl on building up a multinational property empire - although it must be inconvenient having to cross the Andes each time you travel between your investments.
The water supply in Chile was indeed privatised some years ago and over 90% is owned by Suez, Aguas de Barcelona, Marubeni and the Ontario teachers' pension fund. Don't quite see any link to Israel.
Water supply in Argentina is mostly State controlled - so once again I see no link to Israel ? Please enlighten.
DEM
ps Your preoccupation with water reminds me of a previous poster 'Hydrant' with whom you may be familiar?
That's very interesting 560sl - I was certainly unaware of the acquisition of water rights. For obvious reasons, Israel is far more into Resilience planning for the future, than most countries. I once met a Civil Contingencies expert who commented that in the event of an all-out nuclear conflict, the only relatively safe places to be were New Zealand, Patagonia and the Falklands. I guess with global warming the Antarctic Peninsula might also qualify.
DEM
Evening Mogger - all agreed.
I think ERC Equipose carried out the original CPR on OM back in 2013 for MOG. I have a vague recollection that I had a copy of the report once - now lost in the mists of time. Don't recall ever seeing the Rebuttal Export Report.
Strongly suspect that this has been a 'done deal' since the Paris meeting in Feb 2019, which was the last time 'Quantum' appears in the ICSID Procedural Details. The past three years has mostly been RoI exploiting every possible delaying tactic allowed in the Rule Book.
In many respects the timing may be fortuitous. If RKH had received £100m net payout in 2019 or 2020 but was unable to proceed with SL due to PMO shenanigans - they would have been a sitting duck for every blood sucking asset stripper in the Western hemisphere.
As it is, the timing could not be better. A modest OM win should obviate the need for a 'working capital' placing. A mid size win should cover the £46m net cost to RKH for that part of the Phase 1 costs not covered by the NAV Pre & Post FID Loans. A large win may mean that we can avoid needing to draw down any loan monies at all and revenues from First Oil and onwards, will be ours.
My only Caveat regarding the above is that I would personally be very comfortable if Navitas was interested in participating in a RKH placing. Having NAV as a Cornerstone investor with say 25% would provide a degree of stability and long term commitment which we currently lack. At some point NAV would probably want to T/O the company - but provided it was agreed that this could not happen until after First Oil - it could be a Win-Win for all parties.
ECO(Atlantic) has a similar symbiotic relationship with the Canadian company Africa Oil Corp - having a friendly big brother watching your back has advantages and in no way impedes ECO's ability to grow as a company. AOC have a seat on the ECO BOD and I guess that in a similar situation, Navitas would also want to be able to nominate a Director. Probably no bad thing.
https://www.ecooilandgas.com/projects/key-partnerships/
DEM
Thanks again p777 for some outstanding OM links. An invaluable insight into the methodology used in assessing Quantum. In any case - certainly some light relief from processing reams of Navitas docs through Google Translate.
After a very quick skim read :
I particularly liked the 'Happy Ending' in (Para 635C) the Ecuador case.
$379.8m + interest would be very acceptable!
Did not expect to find much humour in the text but on page 1 of the Kazakhstan doc. we have the following !
"Alright. Mr Romanosov, welcome. As you, I think,
have experienced yesterday, we ask every witness to read
out a declaration to us. You have it in front of you in
English, but the interpreters are in a position to
translate it to you, so that you can do it in any
language you like, as long as it is English or Russian".
Surely a contender for the 'Arbiters Joke of the Year' award at the annual ICSID dinner.
DEM
Fascinating article in the ST today 'How the Falkland Islands became one of the world’s most affluent places'. A real insight into how the FI has evolved over the past 40 years. Not sure if link will work - if not, will be available to anyone with a ST subscription.
My thanks to TopCat - an old friend from the Don't Stop Believing days of ten years ago - for flagging up the article and providing the link.
DEM
https://www.thetimes.co.uk/article/how-the-falkland-islands-became-one-of-the-worlds-most-affluent-places-f9kc8fzjk?shareToken=2dfaeeebeaa8f483ab792a32f80199d7
Matt - hope this helps:
King & Spalding (K&S) are Rockhopper's legal Representatives in the Ombrina Mare Claim under the Energy Charter Treaty (ECT) before the International Centre for Settlement of Investment Disputes (ICSID) - part of the World Bank in Washington. ie This is not like any ordinary legal case which we might be familiar with !
K&S were recently selected by Global Arbitration Review as the number one international arbitration practice worldwide and as the best of the best, will no doubt have fees to match. As an indication, 'Magic Circle' firms in London charge upwards £1,000 per hour.
Whilst to the average Private Investor 'nothing much ever seems to happen' there have been around 40 separate legal stages so far, several generating a considerable volume of technical documents and legal arguments - some running to several hundred pages - most either initiated by K&S or requiring their input. There is a useful summary on the ICSID web site - click on the blue 'Procedural Details' tab:
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/14
K&S will have been involved at every stage of the case and will also have been responsible for maintaining regular contact with Rockhopper (Claimant), Harbour Litigation (providing funding for case on a 'No Win - No Fee ' basis) and the ICSID Arbitration Panel (including Dr. Charles Poncet, the world leading Swiss Arbiter appointed by the Claimant). Just as K&S act for Rockhopper, so the Republic of Italy (RoI) as 'Respondents' in the case, have been represented by their own team of top lawyers led by Giacomo Aiello, Italian State Attorney.
I would not be at all surprised if K&S have not incurred a bill for legal costs and expenses over the past five years, in eight figures. Fortunately, if Rockhopper lose the case - which whilst unlikely is not impossible - they do not pay a penny. However, K&S's bill will have been paid in full by Harbour Litigation (nothing to do with Harbour Energy). K&S' motivation is to maintain their No 1 spot - which means winning all their large and important cases. Harbour's motivation is they are naturally keen to recoup their financial investment in the case and make a profit. (BTW Harbour conduct rigorous due diligence on all cases offered to them and only accept those where they are very confident of winning).
From discussions with Sam Moody and also other Directors since 2017, they have indicated that if the award is c$50m then the Harbour Litigation fee will be c.50%, if the award is c.$100m then the fee will be c. 40%. If the award is c.$150m then the fee will be 35% or less, reducing on a sliding scale. (Caveat: All figures are indicative only and may be more or less).
Rockhopper plc has 458m shares in issue. So every £4.58m net to Rockhopper should add 1p to the share price + whatever value the market places on Sea Lion.
DEM
Third time lucky - hopefully this one will work.
https://rockhopperexploration.co.uk/wp-content/uploads/2022/04/Rockhopper-Corporate-Update-April-2022-protected.pdf
Thanks pre2rcd - also first time I've seen it. Good find . Probably explains why BOR and ARG have suddenly come to life. Considerably expanded and updated on previous PP slide deck. Designed for showing to potential corporate investors, I think.
The big surprise is the emphasis placed on the exciting opportunities offered in the SFB - where RKH still retains 100% of retained acreage. (See Slides 3 & 12). Much talk of gas as well.
The pace quickens !
DEM
(cont)
ps Still puzzled by hydrants reference to Russia paying Italy's debts - they are actually quite different countries. In any case, I don't think Russia will be flush with cash for a very long time.
LTH will be familiar with most of these links and once again my thanks to Mogger for his research skills. One new announcement regarding K&S - Rockhopper’s lawyers in the OM case - who have just cause to be celebrating their own landmark award.
‘PARIS, April 4, 2022 – Global Arbitration Review has once again selected King & Spalding as the number one international arbitration practice worldwide in its “GAR 30” guide to the world’s leading international arbitration practices.
The ranking was unveiled at the 12th GAR Awards ceremony in Paris. Notably, King & Spalding eclipsed the field in the number of “bet-the-company” and large hearings, with 34 such hearings during the research period. Celebrating more than 130 years of service, King & Spalding is an international law firm that represents a broad array of clients, including half of the Fortune Global 100, with more than 1,200 lawyers in 23 offices in the United States, Europe, the Middle East and Asia’.
https://www.kslaw.com/news-and-insights/king-spalding-named-top-international-arbitration-practice-worldwide
Chambers & Ptns issue Global Ranking tables for all international lawyers. "The firm (K&S) is very experienced at arbitration proceedings. They do their best for the case and have very good relations with the client." Market commentators also note that "it is a very dense and strong firm with significant capacities to deal with massive cases."
Work highlights: Advised Rockhopper on a USD400 million ICSID arbitration against the Government of Italy under the ECT. The matter concerned the governments investments to develop Ombrina Mare, an offshore field containing hydrocarbons.
https://chambers.com/department/king-spalding-llp-international-arbitration-commercial-arbitration-uk-1:2717:11805:1:3635
I am encouraged that K&S chose the Ombrina Mare Arbitration as one of the two cases highlighted in their Chambers profile – out of their extensive portfolio of cases. As did Harbour Litigation – litigation funder for RKH’s ICSID claim – in their Commercial Arbitration brochure. Do not believe that either firm would have chosen to showcase Rockhopper unless they were very certain of a positive outcome.
https://harbourlitigationfunding.com/wp-content/uploads/2020/11/Harbour-Investment-Commercial-Treaty-Arbitration.pdf
Also, the Chambers report mentions a figure of $400m which is very similar to the $450m quoted by Charles River Associates who ‘testified on behalf of Italy in a $450 million ICSID arbitration brought on by Rockhopper Exploration’. Also, both are written in the past tense (‘’Advised’ and ‘Testified’) which suggests to me that this is a ‘done deal’ just awaiting final sign off.
https://www.crai.com/engagements/rockhopper-exploration-plc-rockhopper-italia-s-p-a-and-rockhopper-mediterranean-ltd-v-italian-republic-icsid-case-no-arb-17-14/
DEM
ps Still puzzled by hydrants reference to Russia paying Italy's debts - they are actually quite different c
"If RKH get even 20 million out of the Russian government they should be happy"
Astonished and amazed might be a better description!
No prizes for guessing this posters Point Of Origin.
DEM
Assuming RKH has won - which I do think is very likely – the most difficult part of the Award will be the Quantum. The OM costs to date - including purchase price, rig costs and subsequent decom. will be a known amount. Establishing a fair figure for lost profits is far more complex. I assume the calculation will be based on three elements - estimated future production, how long the well would be productive and what would be the average price of oil over the next N years. Future production and life of well should be reasonably easy to establish based on known reserves etc.
Average price of oil over the next 10-15 years is much more difficult. We know that the oil market is likely to be much 'tighter' in the future with little investment in new fields since 2016, a steady decline in production from existing wells and a Green Lobby growing daily in power and influence.
I have no idea what formulae the experts adopt for this type of calculation but would not be surprised if it is based on a rolling daily average price over the past couple of years or similar. If this is the case, consider the following. In April 2020 the price of Brent was below $25 and remained under $50 for most of that year. We may just be in a situation where every day that passes results in a 'cheap' day for oil from two years ago being replaced by a new norm day at $100+.
Italy may have agreed the deal in principle in 2019 when the oil prices were depressed and then been horrified at its dramatic recovery in 2021/22, which may account for the desperate attempt to derail the case on jurisdiction grounds in December. A calculation based on past prices is becoming increasingly expensive whilst an Award based on future prices will probably be even worse.
IMHO it is impossible to second guess precisely what is causing the 'latest' delay’. As previously discussed, it may well be due to the ‘third’ arbiter dragging his feet over writing his 'Minority Report'. A more nuanced explanation may be that ICSID – like many First Tier Supreme Courts - probably prefers all ‘Landmark’ decisions to be unanimous. Make no mistake – the OM Case is such a decision which will create case law precedent and be quoted in a host of future Energy Charter cases, many of which are waiting to be lodged.
ICSID will much prefer a rock solid unanimous decision on Ombrina Mare rather than an Award diluted by a lengthy Minority Report. (Just imagine if the Ten Commandments had a Minority Report from Satan). So, the delay may be due to ICSID trying to persuade the 'third' arbiter (nominated by RoI) to agree to the Award – perhaps along the lines of ‘if we agree to tweak the formulae to reduce the future lost profits element by X then will you sign off a total award of Y’.
Or to borrow a phrase from the American West of the 1820s – Horse Trading !
DEM
Morning LTT
I agree that NAV or RKH will probably not wish to bring in a third party until just before FID, when the 'big money' will be required and the SL proposition will have all its t's crossed & i's dotted etc. Pro tem, my understanding is that NAV are confident that they can raise funding through their own connections. With respect, I think your second para may perhaps 'slightly' understate how good the Navitas deal may turn out to be. Time will tell.
I will be very interested to see whether Navitas decide to participate in the expected placing by Rockhopper which several posters have speculated to be close. No problem if they don't, but I can think of several compelling reasons why it would make good sense for all parties. (For the avoidance of doubt - I clearly have no inside track on any of this - if I did, I would not be posting).
DEM
(cont.)
"Also, starting in February 2022, in addition to his positions as a director and as Deputy CEO General and in charge of business development, Mr. Wolf will focus on leading the development planning of the Sea project Lion. However, in the coming months Mr. Wolf is expected to relocate to the West Europe, for the purpose of continuing to fulfill its aforesaid role and to promote the development of the partnership's business and in particular for the purpose of leading the development planning of the Lion Sea project. Mr. Wolf's relocation to Western Europe is required for the promotion of the Lion Sea project since most of the suppliers and service providers, the financing bodies and the bodies involved in the development activities required to lead this project are in Western Europe".
The translation from the original Hebrew text is slightly 'garbled' (sorry) but it is quite clear that Navitas are taking the Sea Lion project very seriously indeed with one of their most senior and experienced Executive Directors now in charge:
Chanan Wolf serves as the Deputy CEO of the Navitas Petroleum partnership and his key responsibilities include business development and new ventures. Until January 2022, he managed, in addition to these positions, the activities of the partnership in Houston as CEO of the company's US subsidiary Navitas Petroleum Holdings LLC. Chanan brings his vast experience in international transactions and business development to the partnership’s executive management team. Prior to joining Navitas, Chanan was an independent consultant and held various positions at Ernst & Young including head of M&A and capital markets. During this period he sourced and managed many oil & gas related private and public transactions. Chanan started out his career at the Dutch Central Bank. Chanan holds Doctorates in both Economics and Accounting from the University of Amsterdam.
In Chanan's previous role heading up Navitas in the USA, I assume he was responsible for delivering the $1.8bn funding and successful FID for the massive Shenandoah Project in the Gulf.
https://www.navitaspet.com/executive-committee/?msclkid=b5884cf0a83311ecaa348b87a7170f47
The past couple of years with Brexit, Covid, Storms and now Ukraine reminds us of that famous quote by Lenin: “There are decades where nothing happens and there are weeks when decades happen". I think that after suffering a decade of enforced inactivity in the South Atlantic we may be entering our own period of a few weeks of action, thrills and excitement !
DEM
ps Assuming that Mr Wolf will be based in the UK - I wonder where his office will be ?
I agree with Secret Blueprint that Ombrina Mare - although likely to be in our favour - seems to be governed by a modern day version of Zeno's Paradox. Indeed, to mix my metaphors, if Samuel Beckett's play 'Waiting for Godot' was ever updated it would surely be renamed 'Waiting for Ombrina Mare' ! I rather suspect that the latest delay may be due to the dissenting Arbiter, assuming a 2:1 vote in our favour, exercising his right to submit a Minority Report - presumably in the form of a 500 page illuminated manuscript hand crafted by Italian monks.
Without positive news of an Award from ICSID, Sam will virtually be compelled to announce a 'planned prudent placing' to coincide, more or less, with an announcement regarding Navitas. It would seem to be the optimal moment to raise funds (say £10m ?) to cover any anticipated non-Sea Lion related costs ie anything that will not be covered by the two Pre and Post FID loan arrangements. Whilst it will clearly involve dilution this will hopefully be mitigated by SB's 'tide of exuberance' regarding Navitas. I assume that the anticipated c£45m RKH contribution to the SL Development Costs will be dealt with as a separate 'issue' much nearer to FID - perhaps via a more creative solution. OM will remain as a 'wild card bonus' for the future - as will any residual value in OM itself and Monte Grosso.
The last Rockhopper RNS confirmed that RKH, HBR and NAV are on course for a binding agreement by 31st March 2022, but please remember that neither the Gregorian nor the Julian calendars apply as RKH exists in its own unique time warp. We also know that Sam spent a productive 7-10 days in the FI, meeting with The Governor, Elected Representatives and also the new FIG CEO and senior team. It would be surprising if regulatory approval for the proposed Novation was not discussed. I am very confident that Navitas will commit to Sea Lion and my 'source' is the following announcement released by Navitas to the Tel Aviv Stock Exchange on Feb 1st 2022 and confirmed on March 10th.
The Feb 1st announcement comprised two docs. The first broadly mirrors the RKH RNS - but with some useful clarifications. The second doc contains a very detailed report of a Navitas Partners meeting to confirm the proposed Relocation Package agreed with Mr Chanan Wolf - who sits on the Navitas Executive Committee chaired by Gideon Tadmor. See next post:
DEM