Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
This is going to have a massive impact in the next few weeks and months. Dollars can no longer be used as collateral for Naira loans, which will stop the hoarding of dollars and more dollars will be liquidated to Naira thus massively increasing dollar supply in the next 3 months.
https://www.reuters.com/business/finance/nigeria-bars-lenders-using-fx-denominated-collateral-naira-loans-2024-04-08/
Interesting to see a new role being posted in Nigeria
https://careers.savannah-energy.com/job/Lagos-Supply-Chain-Manager-LA/975464255/
On the Naira Goldman predicting further gains and see potentially naira back below 1,000. I truly believe in the Q2 2024 we will see Naira back in the 800 - 900 range effectively re-couping all of the second de-valuation that occurred earlier this year.
It could also start to claw back some of the first de-valuation value which occured in June 2023. With Dangote and port harcourt refinery products reaching domestic market alleviating need to import dollar denominated refined products
https://www.bloomberg.com/news/articles/2024-04-12/usd-ngn-nigerian-naira-could-extend-rally-to-below-1000-dollar-goldman-sachs
Caution here is the article Vitol still front runners -
Trader Gunvor takes a swing at GOC-Vitol agreement over Carlyle assets
Guillaume Letessier, a senior manager at Geneva-based trading company Gunvor, visited Libreville in February to meet with junta leader Brice Clotaire Oligui Nguema as part of the company's efforts to get in Gabon's good graces over its rival Vitol to buy Carlyle's assets. According to our sources, Gunvor offered the Gabon Oil Company (GOC) $950m for Carlyle's local assets, currently operated by Assala Energy. However, Vitol is also based in Geneva and has exclusive negotiating rights with the GOC for this. It is also promising the GOC a hefty sum in exchange for Carlye's production of 45,000 bpd. These assets were acquired from Shell in 2017 for over $700m.
This buying race follows the GOC's November 2023 announcement that it was exterting its pre-emption rights over Carlyle's assets in Gabon. Initially, these were supposed to go to Maurel & Prom, a subsidiary of Indonesian Pertamina (AI, 01/04/24). Oligui Ngema confirmed his intention to finalise the acquisition during his official New Year's address. On 15 February, Carlyle and GOC signed a sales and purchase agreement, and GOC must now raise the necessary funds to seal the deal.
Scotpak - if the company sticks to its usual reporting timeline than we should receive a Q1 2024 operational update either the coming we or the week after similar to last year, so I am hoping this will shed some light on a few of the items I have listed.
In conclusion, the strategic extensions undertaken by Savannah are not merely procedural but instrumental in repositioning the company for substantial growth. As a shareholder and observer, I maintain a positive and forward-looking perspective. I believe in Savannah's strategic direction and its potential to enhance value through careful selection of opportunities and diligent execution. The foundational assets in Nigeria and Niger, alongside prospective ventures, position Savannah for a bright future across the short, medium, and long term.
I am optimistic about the recent developments indicated by Savannah's announcements. Here's a summary reflecting my bullish outlook:
I'm encouraged by the decision to postpone market re-engagement until the full-year results are disclosed. This approach is prudent because the market couldn't properly value Savannah during its 2023 suspension, lacking a reference for its performance and growth trajectory in Nigeria. This extension ensures a fair assessment, irrespective of potential acquisitions.
On the Nigerian front, several operational and corporate matters are nearing resolution:
The Accugas debt restructuring, bolstered by the Naira's recovery.
The impact of the CPF completion timeline.
Engagement with new gas customers.
Finalization of the Sinopec acquisition.
The extension grants Savannah additional time to advance its arbitration cases. While outcomes may still be 6-12 months away, progress indicators are promising.
In Niger, the strategic focus remains paramount. With the pipeline ready for imminent operations, expectations are high for Savannah to prioritize this asset, acquisition aside.
The Mali wind project, pending government approval, underscores our commitment to renewable energy initiatives.
Recent updates suggest a strategic preference for market re-entry as a larger entity, possibly incorporating the South Sudan acquisition among others. This aligns with the notion that current extensions are strategic, facilitating a broader consolidation.
The pursuit of additional deals, such as the Sinopec Stubb Creek acquisition and interest in Assala Gabon (as reported by Africa Intelligence), demonstrates our capability to engage in significant transactions despite the ongoing South Sudan situation.
The continued ability to secure capital for attractive deals reaffirms our strategic acumen. The challenge lies in navigating approval timelines efficiently.
I am particularly supportive of pursuing the Assala Gabon deal, recognizing the value of a potentially expedited government approval process. This strategic approach may warrant a premium investment for timely execution.
This strategy suggests a desire to minimize future trading suspensions, leveraging current opportunities to enhance company stature and market presence.
Clarity around the South Sudan deal, particularly regarding government approvals, dispels previous uncertainties related to export routes and financing.
It's evident that the focus isn't solely on South Sudan. Discussions on other potential deals are advancing, with some nearing agreement phases.
Keep the faith guys you have got to understand that any update they provide has to go through various reviews and they are juggling a tight legal rope as well wouldn't surprise me if they wanted to run past the South Sudan government if the deal was still active the last thing the company would want to do is release something which jeopardises all the work they have put to date and annoy the SS government, this is one of the many reasons why I feel the company has chosen to provide limited information with this particular deal.
I will continue to keep the faith it what Andrew is trying to deliver and happy to receive only info which has all parties on board and keeps the transaction alive.
Tier - I am expecting the update to be wrapped in with Q1 2024 update and that usual comes in the second week of April so I am not expecting any news this week even though that was the words used in the rns last week. Perhaps they will be able to push out the Q1 202 update on Friday but lets see.
Certainly looks like a strong partner for savannah and big experience in closing a number of renewable deals towards financing, impressive credentials and I am sure the partnership would bode well for savannah. I am interested to see what the first funded renewable project impact on the SP for savannah would be, that would be interesting to see. As all the projects at the moment are still pretty much on scoping to study phases, but when savannah manages to land a renewable project which is either close to funding or funded that would be massive on the renewables front
https://www.rencore-energy.com/people-1
Looks like our next renewable partnership is in Mali and a wind farm 150 MW, with us partnering with another company called rencore energy.
Here is an interesting article on a potential investment by British companies in 🇲🇱 .
Rencore Energy and its partner Savannah Energy are British companies with considerable experience in the renewable energy sector.
https://x.com/uk_mali/status/1775457539347362299?s=46
https://www.rencore-energy.com/kayes-en
With CPF facility progressing and hopefully completing in the next few months alongside new gas contracts and increased volumes to gas power customers as well as commercial customers will significantly further enhance the value generated by the accugas business.
Interesting to see Nigeria has increased the baseline gas prices for gas supplied to power generation companies and gas supplied to commercial companies.
https://www.naijanews.com/2024/04/01/breaking-tinubu-govt-increases-gas-to-power-price/
Vitol in exclusives discussion, surely they would want a credible operator to run the fields for their loan.
I like this bit “ Meanwhile, Savannah Energy - backed by certain executives in the oil ministry's hydrocarbons department.”
Could Vitol provide a loan and savannah be the operator with the government having a greater profit share.
National oil firm under pressure to raise funds for Carlyle assets
The next few weeks will be decisive in determining whether Gabon's junta is able to raise the necessary $1.3bn to clinch the transaction with the American company.
An agreement under which the Gabon Oil Co (GOC) buys Carlyle's oil assets in the country was struck under the gaze of television cameras and in the presence of junta leader Brice Clotaire Oligui Nguema on 15 February. Ever since, Libreville has been frantically trying to raise the required $1.3bn by the deal's May deadline. The GOC has undertaken to pay a substantial deposit of several tens of millions of dollars, and must now set about finding the rest. If it fails, Carlyle could grant GOC an extension or decide to prolong its oil activities in the country. Production is currently estimated at 45,000b/d.
Geneva-based oil trader Vitol is in exclusive discussions with the GOC to contribute a significant chunk of the purchase price. In exchange, Vitol hopes to obtain the right to market the assets' output. Its optimism is all the greater now that the Société Gabonaise de Raffinage has settled its debts to the trader (AI, 12/02/24). Until the end of the exclusivity period, GOC cannot enter into talks with new potential partners.
Under special adviser's gun
For Carlyle, the February deal was signed by Bob Maguire, head of the Carlyle International Energy Partners fund, which directly owns the assets acquired from Shell in 2017. The Gamba oil fields and terminal are operated by Assala Energy, which is run by Tullow Oil veteran David Roux.
The buyer was represented by GOC CEO Marcellin Simba Ngabi, who used to work for TotalEnergies. The pressure on Simba Ngabi is so great that the matter is being closely monitored by Gabon's transitional head of state via his special adviser on mining, hydrocarbons and energy, Arnauld Calixte Engandji-Alandji, a former director of GOC.
‘Gabon-ising' the economy
Meanwhile, Savannah Energy - backed by certain executives in the oil ministry's hydrocarbons department -, the Turkish trader BGN and Indian groups have also been mentioned as potential partners. However, none has made a strong enough commitment for exclusive discussions to be concluded.
The only certainty is that Maurel & Prom (Pertamina) is definitely out of the running. The group, already heavily involved in the country, signed a sale and purchase agreement with Carlyle last August, just before president Ali Bongo was toppled. However, when Nguema came to power, the new administration quickly decided to pre-empt the deal, making it a symbol of the "Gabon-isation" of the economy championed by the junta leader, who officially announced this decision in November, and reaffirmed it during his 31 December address to the country.
If we invited Petronas to become shareholders in the enlarged group of Savannah could it convince SS government in approving the transaction they will still get the comfort that they have Petronas still operating albeit through Savannah shareholding. Perhaps we could offer Petronas 20-25% of the enlarged share capital. I brought this point as I saw that the recent deal announced by Ithaca will see eni take an enlarged share capital in Ithaca and become a major shareholder on completion.
https://www.ft.com/content/ba599bb2-dd8e-4289-a80e-8a4d40ae6395
If the economics still made sense than it wouldn’t be a bad outcome although anything above 20-25% would reduce value enhancement for existing shareholders
The argument for approval at the moment could be that low oil exports and pipeline disruption and government coffers running dry could tempt approval from government if the exit tax or approval fees are tasty and high $100 - $200m dollars and could tempt the government into approval when they are struggling to pay salaries at the moment
Overall I am pleased with the rns for one main reason as it also a window for Q1 2024 update to land by 2 week of April as per usual timelines which will allow for a broader update on the business particularly interested to see plans on Niger being strongly articulated, also interesting to see how the accugas business is performing and if we are still growing our volumes by double percentage production. I always maintained in any circumstance or whatever is the outcome of SS I wanted to come back after the full year results of 2023. So I will be supportive of a further extension until mid June and come to market post full year 2023 results.
As for the rns last week I believe it’s probably to intended to make public the difficulties in completing the South Sudan deal I.e outing the South Sudan investment environment as a difficult place for
Investments. I believe if savannah think they have completed all there workstreams and the only thing now outstanding is government approvals than they are hoping a public statement will shame the government into action, especially with the South Sudan oil conference in June 2024, it could be savannah way of saying to the government you are your own stumbling block to approvals and a public statement could pressure South Sudan government and make it look bad especially when they are also looking to attract investments.
As for deals I believe Andrew should pursue an oil acquisition in Nigeria and if he can land another prior to re-listing that would be a bonus. Even a small acquisition of 10,000 Bopd and 50 million in 2p reserves would take us another level.
I want to remain optimistic on progress and closing of SS but I remain skeptical and believe if a rns does provide more detail next week it would likely be a public outing on the SS approval inaction more than anything else. I for one like all want a positive outcome on SS but let’s see the detail behind the detail that Savannah intend to provide.
The RNS next week could be as strong as savannnah have completed all work streams and if they don’t get approval in the next 6 weeks I.e by 17th May we will terminate the deal and come back to market it could be the final ultimatum to the SS government and a public outing
Wood Mackenzie predicting more Nigeria deal making
https://www.woodmac.com/news/opinion/navigating-nigerias-changing-oil-and-gas-landscape/
Great to see us engage in a top legal Nigeria law firm who are experts in oil and gas law alongside our UK based Bracewell team. Always great to see as it helps to tighten the SPA and deal approval process when the local law firm has relationships and experience with Nigerian laws and government representatives.
https://www.linkedin.com/feed/update/urn:li:activity:7176532218163396608?updateEntityUrn=urn%3Ali%3Afs_feedUpdate%3A%28V2%2Curn%3Ali%3Aactivity%3A7176532218163396608%29
I am sure they can help facilitate more deal making in Nigeria for us if they are not already in the midst of doing.
https://enradvisory.com/
Here is a great summary on what the new Oil and Gas reform to drive investment by Nigeria president means
https://enradvisory.com/wp-content/uploads/2024/03/ENR-Client-Alert-Presidential-Order-and-Policy-Directives-1-1.pdf