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Interesting to see the below, we know the export issues and as the eye radio article suggest they are progressing with repairs.
Something that caught my eye is the mention of Vitol, seems to me like Vitol are the principal trading house that market south sudanese crude, and I wonder if they played a key role in us striking an SPA with Petronas, they could be our financial backers and with a company like savannah operating south sudanese assets and increasing production they would be the principal benefactors in marketing addtional volumes if south sudan can increase it's export capacity to levels it was capable of doing previously
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/022924-force-majeure-declared-on-south-sudans-dar-blend-crude-loadings-sources
Morning All - A new month and all is quiet in the Savannah front.
https://www.eyeradio.org/crude-oil-set-for-smooth-flow-as-pipelines-under-repair-amour/
Https://apnews.com/article/south-sudan-crisis-oil-red-sea-f8954810435083ade292f79ac08a7638
I personally feel that both waring Sudanese parties need the pipeline revenues so they have already started to fix the oil pipeline infrastructure
https://twitter.com/RSFSudan/status/1761375911830503789
Tier - SS Government is in a dire financial situation so unless so dodgy transaction occurs there is slim chance of them purchasing the acquisition themselves.
A few articles below to stew on until savannah is able to pull the finger out and provide updates
https://sudantribune.com/article282734/
https://apnews.com/article/south-sudan-crisis-oil-red-sea-f8954810435083ade292f79ac08a7638
StreetsofGold - I am guessing the recent red sea troubles as a matter of fact would re-instate Petronas stance further for leaving. Obviously for someone like size of our company can extract significant value and is probably still a good asset to go for even with export interruptions especially if the balance of payment on closing is low with the significant amount of time passed since deal inception.
It clearly hinges on approvals being the main thing that slows progress or stops the deal from occruing.
Buffett is bullish on energy “ When the dust settles, America’s power needs and the consequent capital expenditure will be staggering”
https://www.forexlive.com/news/warren-buffett-capital-spending-on-americas-power-needs-will-be-staggering-20240226/amp/
Thanks Zengas - as ever appreciate your thoughts but at the same time the company could do a lot better with comms on such questions in my opinion, answers even as small as the one you provide for example go along way. I am hoping sooner or later Savannah are able to fully articulate the full value of the accugas asset
Zengas - One thing that will be interesting is how the company and market values third party gas reserves for example the gas that goes through our network from Amocon, the company did mention they see a lot of stranded gas assets that can be converted or utilised through our pipeline.
It will be interesting to see the book value of 2p reserves from third party licences or acreage and how they can value this or provide numbers to for example the gas that we get from AMOCON is licence OML 156, I couldn't find 2p reserve number for this licence online, but it would be interesting data point purely because if Amocon have significant reserves and the only way to cash in is through our pipeline than that gas effectively strengthens our 2p numbers albeit not our gas if that makes sense.
Any thoughts on this ?
Scotpak - agreed but clearly still plenty of deliberation ongoing still, one would think if Petronas and Savannah have kept it alive till now, neither parties will flake out. So effectively forcing the SS government to take a formal stance on the deal either through an approval or formal rejection.
#South_Sudan's Trade Minister and Ambassador meet Mark Fitzgerald, Vice President of #Petronas for Intl. Assets, in #Malaysia to discuss the company's activities in 🇸🇸. However, in December 2022, Petronas decided to sell its entire oil and gas business in 🇸🇸 to Savannah Energy.
https://twitter.com/PatrickHeinisc1/status/1762424020379505150
Noix - 200 mmcfd is the amount of treated / processed gas, our total capacity is 600 mmscfd. So that's the difference it depends on whether the customer wants treated gas or untreated where they are happy to process themselves. I would imagine most customers would want treated gas and hence we commenced the cpf capital expenditure
Recovery of Naira is a 3 step process:
1) Mop up excess black market liquidity so speculators and arbitrage trading does not affect naira stability.
2) Increase dollar exports and decrease dollar imports
3) Make oil and gas investment attractive through regulation thus increasing FDI through it's oil and gas sector/
If Nigeria can do all this than I am confident Nigeria can reverse all the devaluation that happened since June 2023.
Although it will need the Nigerian federal government, central bank and oil and gas regulators like minister of petroleum alongside NNPC to work together in this, it's possible but requires openess from all parties and ego's and politics will need to be put aside
If Nigeria can increase it's oil exports mainly through oil and with the additional reforms supporting it I can see Naira trading below 1000 against by end of 2024. Any significant refinery surplus which can be exported will bring in US dollars inflow to Nigeria, whilst domestic oil refinery product providing fuel to Nigeria should alleviate dollar import pressure of importing fuel from foreign countries.
Therefore it's highly important for Nigeria to get all it's refinery in full flow this year to export markets whilst also meeting domestic demand.
Some additional significant news on Naira today
https://africa.businessinsider.com/local/markets/nigerias-central-bank-resumes-sale-of-dollars-to-bureau-de-change-operators/z3hdnyd
https://www.bloomberg.com/news/articles/2024-02-27/nigeria-delivers-jumbo-rate-hike-to-aid-its-battered-naira
There is discontent in every country in the world at the moment rocky, tell me a country where there isn't a political, social, economic or geopolitical crisis.
Whilst I am fully cognisant that that the risk is always heightened in African countries, I would be surprised if it led to a coup in Nigeria the probability is never zero as one would never want to tempt fate but I would still say the probabilities are on the lower end of the spectrum.
A lot of the crisis has been driven by de-valuation of Naira, but that's an active decision that the federal government took short to attract foreign direct investment short term pain for long term gain.