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This is definitely a fast moving situation now that Petronas has filed a ICSID relief probably similar to how Savannah did for chad it would probably be an expediated emergency arbitration to begin with, based on this ruling it would all depend of whether South Sudan government has the will to change their position or continue further challenges at arbitration like Chad did with Savannah as they challenged the emergency arbitration.

Secondly it's clear to see that the GoSS has clearly been playing delayed tactics and being flippany between stringing Savannah along, claiming that they will nominate a purchaser i.e. find a credible buyer themselves and that it wants Nilepet to takeover and they continue to flip between the 3 options to drag the process out probably in the hope that Petronas don't leave or they get a juicy payment.

If there desire to takeover the petronas assets was strong they would have have followed the chad template or the gabon template where they took over the assala assets but till date they haven't so there desire is pretty weak in that respect however it's a tool being used to perhaps get the best deal possible for them, it's a game of cat and mouse

It's clear that the GoSS probably wants 2 chunks of hefty payment's one from the outgoing party i.e. Petronas and one from the incoming party whoever they deem fit to take over and run the petronas assests this is just my assesment of things. Perhaps Savannah are still at the table knowing this fact if Petronas can come to terms with an exit fee, and we can come to the terms with an entry fee for approval than the GoSS will be laughing their way to the bank.

Zengas - Not sure but didn't Rockhopper do something similar they sold on their arbitration award to third party and they have or had start to receive some of their award already

So in a nutshell they probably want Petronas to leave the assess to them for free and pay settle liabilities prior to departure and lets be honest they must be asking for a obscene amount of money likely in the 10s of million or perhaps 100's of million knowing them.

They also want the assets probably once Petronas leave paying them the lump sum they are after and plus hoping that they also get the full share of assets themselves for free, they would than also likely to be looking to onward sale Petronas assests to somebody else for a fee too. So that way they cash up both ways, as we know clearly they really don't want to have the capacity to operate and it's just a guise for a better settlement.

https://x.com/SirMadingManyok/status/1823230491643764767

https://x.com/kuany_machar/status/1821487673137099258

Based on the series of images provided, here's a summary of the sequence of events:

August 5, 2024: Mr. Azahari M. Shuid of PETRONAS writes a letter to the Ministry of Petroleum of South Sudan, raising issues including a threat to take the Government of South Sudan (GoSS) to court over the nomination of a buyer for PETRONAS's shares in South Sudan.

August 5, 2024: The Undersecretary of the Ministry of Petroleum responds to Mr. Azahari's letter, clarifying that:

There is no High Committee, but rather a Technical Committee to negotiate with PETRONAS and other partners.

The GoSS position on the National Oil Company (NILEPET) taking over PETRONAS's shares has not changed.

PETRONAS has no legal authority to give GoSS an ultimatum regarding share nomination.

August 7, 2024: PETRONAS sends a notice of withdrawal for Blocks 3 and 7 to various parties, including:

Requesting NILEPET to confirm if it wishes to acquire PCNL's (PETRONAS Carigali Nile Ltd) Participating Interest.

Stating that unless NILEPET exercises its pre-emption right within 60 days, PCNL's interest will be transferred to other parties.

August 9, 2024: PETRONAS International Corporation Ltd (PICL) sends a letter to the Undersecretary of the Ministry of Petroleum, Dr. Chol Deng Thon Abel, stating:

PICL rejects the allegations made in the August 5 letter.

PICL has complied with all legal and contractual obligations.

The GoSS cannot lawfully condition a sale of PICL's shareholding on settlement of alleged liabilities.

PICL did not give an "ultimatum" to GoSS but notes that GoSS has changed its position on disposing of PICL's shares.

PICL views the GoSS's conduct as arbitrary and unlawful, and mentions ICSID arbitration for dispute resolution.

This sequence shows an escalating dispute between PETRONAS and the Government of South Sudan regarding the sale of PETRONAS's shares in South Sudanese oil operations, with disagreements over liabilities, the process of share transfer, and the potential for international arbitration.

One thing I do find strange is that Nilepet and GoSS is not formalising pre-emption of their rights afterall Petronas are open to this. Clearly the GoSS are overstretching their hand to the maximum extent

1) They want to get the all of Petronas share but don't want to do it via formal pre-emption probably because it will be political suicidal as they know they are not capable of handling the financial liabilities and obligations as well as the technical capabilities, so they would rather it automatically transfer to them after 60 day's without them formally having to pre-empt as that would suit them they can latter just blame Petronas and say they left it to them. As it stands without formal pre-emption it goes to the other partners in the PSA.

2) Want the full Petronas assets which by the way are going for free now that we know that Petronas don't want to be compensated they just want to leave, plus they want lump sum payment from Pet

Niger Wind Farm, very encouraging to see we have the support at the highest level of Niger government and they are doing everything in their power to move the project towards execution.

Our relationships in Niger will also help us on the Niger Hydrocarbon front once we can test our well test programme, they are clearly receptive of what savannah want to do in country

According to Mr. Moussa Chetima, this project will only impact birds and bats and at this date all the data is positive to allow the execution of the project in 9 to 12 months. He announced that the first phase of electricity will be produced by 2027.

It should be noted that the Tarka Wind Farm is a project under development located south of the Tahoua region. The project will have a maximum capacity of 250 MW and will include up to 45 wind turbines (each reaching up to 200 m in height), spread over a distance of 25 km. The project, as an independent producer, will produce approximately 800 GWh of competitive and clean electricity per year which will be sold to the Niger Electricity Company (NIGELEC) over a period of 25 years.

Finally, note that Savannah Energy is a British independent energy and resources company focused on the realization of major projects in Africa. Its objective is to set up large-scale renewable energy projects across the continent, in order to provide millions of homes with clean electricity at competitive prices. The company is committed to respecting the highest environmental, social and governance standards, in order to guarantee a positive and sustainable impact of its projects.

TSA/KPM/ANP- August 2024

http://www.anp.ne/article/tahoua-la-ministre-de-l-energie-sur-le-chantier-de-construction-du-parc-eolien-de-250-mw-de

Tahoua, August 9 (ANP) - The Minister of Energy Pr Amadou Haoua visited, on Friday, August 9, 2024, the construction site by Savannah Energy of the wind power plant with a capacity of 250 MW in the village of Magaria Makéra straddling the Department of Madaoua and that of Malbaza in the Tarka Valley.

The Minister is accompanied in this trip by the Governor of the Tahoua region Colonel-Major Oumarou Tawayé and several central and regional executives of her ministerial department.

This visit is part of the development of Niger's renewable energy resource potential. It aims to note the development of the wind farm project.

On the project site, Minister Haoua first indicated that she had joined the project as soon as she became aware of it, because it is a wind energy project. Since then, she informed, "I have created a committee responsible for monitoring the project, in order to create all the conditions to support it so that this major project can see the light of day and be realized". Indeed, it is noted that once completed, this project will allow Niger to have its energy sovereignty, she said, while expressing her conviction as to the ability of the promoters to move quickly in the execution of the work for which they already have a focal point at the Ministry in order to facilitate administrative negotiations.

The Minister of Energy insisted a lot on respecting the project deadline, or even reducing it.

For his part, the Governor of the Tahoua region was also delighted with this visit. "My satisfaction," he said, "is that the Tahoua region was chosen to house the wind farm. I hope we will be there for its inauguration".

Governor Tawayé thanked and encouraged the promoters of this project before promising to support them so that the project can be realized in a short time. He recalled that the President of the CNSP, Head of State, Brigadier General Abdourahamane Tiani is very committed to the search for energy sovereignty in Niger.

As for the Director for renewable energies of Savannah Energy Niger, Mr. Sofiane Ferdjani, he explained to the authorities the advantages that the project presents for Niger and its population. According to him, it will help the country achieve its energy sovereignty by 2027 with a contribution of 250 MW to the energy mix, or 22% of the country's needs.

"Niger will be at the forefront in terms of energy, there will be a transfer of skills, many jobs, taxes as well as the export of energy with many positive spinoffs," he said.

Previously, the HSE Manager of Savannah Energy Niger, Mr. Moussa Chetima made the presentation on the installation of the pylons to the ministerial delegation who traveled to the site on a rural track.

According to his explanations, each pylon is installed on 100m times 3m of support from 20m, records the time and direction of the wind every 10 seconds to have the atmospheric potential.

Noix - That could be very much be plausible considering they did mention the following as part of their annual report for 2024 KPI under inorganic growth

• Deliver at least one significant M&A opportunity.

• Complete the South Sudan Acquisition and the SIPEC Acquisition.

Considering that we are already up to the speed on the second bullet point. It could be reasonable to say that we could have something on bullet 1 afterall not much of the year has been left now. Also perhaps the termination of the original Petronas SPA may allow us to legally enter into another SPA which would be considered as a RTO. Whereas I think from the Nomad and regulator would probably have not allowed 2 sizeable transaction when the south sudan acquisition SPA was in flux, the formal termination of that SPA may allow us to enter a new one purely from a rules perspective whilst still being suspended.

Continuation of last post

Tullow must also be 'stupid'—to be sarcastic—if they want to start entering into African M&A again. If AK were the only one pursuing this strategy, one might think he could be wrong. However, the reality is that a whole list of African operators with positive cash flow see this as an opportunity of a lifetime. Regardless of the timeframes or execution risks, the metrics are so compelling that they are all trying. Some will emerge as serious winners in the African M&A game. I would rather be in camp AK which is aggressively pursue as many in the shear game of probability that 1 or 2 eventually stick why takes us into a whole new level.

https://www.upstreamonline.com/finance/tullow-targeting-organic-and-inorganic-africa-acquisitions-says-chief-executive/2-1-1688940

If we were the only company pursuing this African oil and gas M&A strategy, one might argue that Andrew is delusional, thinking he is the only one in the industry recognizing this opportunity. However, we know he is not mad, as every African oil and gas producer with positive cash flow is currently looking to capitalize on this opportunity. Most of these companies understand that they may only successfully complete 1 out of 5 deals they pursue, but the potential rewards are so significant that, despite the challenges of government approvals and legal hurdles, they are willing to invest up to 3 years to close these deals. The Exxon/Seplat deal is a classic example, having already been in progress for 2.5 years. Most companies with production and positive cash flow consider this time investment worthwhile. In the worst-case scenario, these companies will continue to build cash reserves and reduce debt, while M&A efforts proceed. In Savannah's case, the CPF facility will allow us to double our accugas business, whilst Niger asset will allow us to the blue sky asset all against the backdrop of accugas debt restructuring which in progress and completed by the end of the year. Not to mention the renewable project with development finance capital commitments in place or any Chad / Cameroon settlement or resolution that may be on the cards.

If any of the above is not to get excited about for shareholders than I don’t what is as far as oil and gas names come by Savannah is probably the right place to be offering plenty of upside cushioned comfortably by its current operations and programmes.

AK's ability to get these deals over the line is not the issue; he successfully struck deals with Exxon, Petronas, and Eni for assets in Chad, Cameroon, and South Sudan, as well as with Eni for Tunisian assets, which was halted due to government inaction. AK and Savannah's ability to close deals is not limited by financing, legal matters, or industry networks. The primary challenge is host country politics and the necessity of obtaining the presidential signature, a challenge not unique to South Sudan but applicable to all countries we might consider for M&A. This challenge is not exclusive to Savannah but is faced by all independent companies looking to execute transactions in Africa.

In this context, I am confident that AK is working to deliver growth in our hydrocarbon business, something that his team, Savannah shareholders, and the broader market can all be proud of. This may manifest through the successful acquisition in South Sudan or another opportunity. So, let’s support him and stay patient. In fact, I would say that, despite the suspension, we are likely heading into one of our most positive periods over the next 6-12 months, with the CPF completion, Sipec completion, Niger work program, Accugas long-dated debt restructuring, and renewable funding to commence project construction. We have come this far already……

1. Regulatory Framework:

The notice mentions the Petroleum Act 2012 of South Sudan. This act likely governs how oil companies can enter or exit the market. Understanding the specifics of this law would be crucial for any company looking to acquire assets in the country.

2. Political Considerations:

The letter is addressed to high-ranking government officials, including the Minister of Petroleum & Mining. This suggests that any changes in oil company participation are closely monitored by the government, potentially making it a political as well as an economic decision.

3. Timeline:

The 60-day window for NILEPET to exercise its pre-emption right is a critical period. This relatively short timeframe might be challenging for a national oil company to arrange financing and make a decision, which could potentially open opportunities for other parties.

4. Economic Implications:

PCNL's withdrawal could have significant economic implications for South Sudan, as oil is a major source of revenue for the country. The government may be keen to ensure continued operations and might be open to solutions that guarantee this.

5.Consortium Dynamics:

The presence of multiple foreign parties (CIDL, SIPC, SSTO) in the existing consortium suggests a complex operating structure. Any new entrant would need to navigate these relationships.

6. DPOC's Role:

The letter mentions Dar Petroleum Operating Co. Ltd (DPOC) as the operator. Their position and capabilities could be crucial in determining how smoothly any transition occurs.

7. Geopolitical Factors:

The presence of Chinese companies (assuming SIPC refers to Sinopec) indicates China's interest in South Sudan's oil sector. This could influence how receptive the government might be to Western companies like Savannah Energy.

8. Savannah Energy's Strategy:

Given the formal process outlined in PCNL's letter, Savannah Energy might be exploring options such as partnering with NILEPET, negotiating with existing consortium members, or proposing a completely new structure to the government.

The complexity of this situation underscores the importance of not just legal and financial considerations, but also political and strategic factors in oil and gas deals in regions like South Sudan. Savannah Energy's success would likely depend on their ability to navigate all these aspects effectively.​​​​​​​​​​​​​​​​

Based on the notice issued by Petronas Carigali Nile Ltd (PCNL) to the South Sudan government, here are the key points and likely intentions:

1. PCNL is giving notice of withdrawal from Blocks 3 and 7 in South Sudan, where it had been operating under a Joint Operating Agreement (JOA) dated October 1, 2012.

2. This withdrawal is in accordance with Article 14.1 of the JOA and Article 22.3(a) of the new Exploration and Production Sharing Agreement (EPSA).

3. PCNL is offering two options for the transfer of its Participating Interest:

a) NILEPET (the national oil company of South Sudan) can acquire PCNL's interest under its statutory pre-emption right.

b) The remaining foreign parties (CIDL, SIPC, and SSTO) can acquire PCNL's interest pro rata.

4. Unless NILEPET exercises its pre-emption right within 60 days, PCNL's interest will be transferred to CIDL, SIPC, and SSTO.

5. PCNL expresses a desire to work with partners to facilitate a smooth transition and minimize impact on operations.

Petronas' intention appears to be an orderly exit from these blocks in South Sudan, likely due to strategic or economic considerations. They are following the legal procedures outlined in their agreements to withdraw.

Regarding Savannah Energy's attempts to strike an alternative deal:

1. Savannah may see an opportunity in Petronas' withdrawal to enter the South Sudanese oil market.

2. They might be trying to negotiate with either the government or the remaining partners to acquire PCNL's interest.

3. However, the existing agreements and South Sudanese petroleum laws seem to give priority to NILEPET and the current partners in acquiring PCNL's stake.

The likely outcome:

1. NILEPET will have the first option to acquire PCNL's interest within 60 days.

2. If NILEPET doesn't exercise this right, the remaining partners (CIDL, SIPC, and SSTO) will likely acquire the interest proportionally.

3. Savannah Energy's success in entering this arrangement would depend on negotiations with the government and existing partners, and potentially on changes to the current agreements or petroleum laws.

4. Given the existing legal framework, it may be challenging for Savannah to insert itself into this deal unless it can offer significant advantages that prompt the South Sudanese government to reconsider the current arrangement.

The final outcome will largely depend on the decisions of NILEPET and the South Sudanese government, as well as their willingness to consider alternative arrangements that might include new partners like Savannah Energy.​​​​​​​​​​​​​​​​

Rocky and others who have a relationship with IR, I wonder if you are able to illicit any new informatio. Out of IR based on the new information I have shared recently around the Petronas notice and official disapproval since March 2024. Would appreciate if any of you are, have or plan to speak to IR and see if you have learnt anything new and also if there have been developments in other areas.

Rumple - that’s not possible as deemed consent is already baked in the agreements if you read the formal notice that Petronas agreement I shared yesterday. So legally South Sudan government can do nothing to stop Petronas leaving. Petronas will be leaving in 60 days from 7 August 2024.

https://x.com/kuany_machar/status/1821487673137099258?s=46

Zengas - An alternative deal could mean giving up some of Petronas Assets to Nilepet afterall. It would be hard to see us getting all of Petronas assets as intended in the original SPA perhaps a 50% split with a minimal cash lump sum payment to government might be the way to go, let see but clearly Savannah as per the petronas terms was rejected in March 2024 and since than the company has kept on releasing RNS's to say advancing workstreams towards completion so it makes me think that the alternative deal referenced in savannah's rns this week would have been in the works since March 2024 and not something that they started to engage this week based on Petronas withdrawal. The only thing is if South Sudan over play this situation than they risk damaging an already battered South Sudanese oil sector which they really can't afford at this stage as it will be suicidal in the grand scheme of things, let's hope that the South Sudanese government see the light at the end of the tunnel otherwise it they risk oblivion for there economy, oil sector, and politics as their oil sector plays a huge influence on all areas of their society.

This article from a Malaysian reputable source clearly states that approval was the main challenge and in fact in March 2024 in decided not to approve our deal with Petronas.

"In March 2024, the government of South Sudan decided against any approval for the agreement, Petronas said."

So it's been 4 to 5 months till date since formal rejection that Savannah have been in country plus they highlighted in there accounts still referencing that they expected to close the deal in Q3 2024.

The elephant in the room is have Savannah wasted some months in country since formal rejection or have they been given confidence that this alternative deal that they refer to is more or less in the bag hence they still continue to work in country and still have been persisting let's see..........

Petronas also announced that it did not intend to participate in South Sudan’s first oil licensing round in 2011, citing challenging market conditions and that it is undertaking a strategic review of its assets to ensure that its portfolio remains resilient and commercially viable.

In December 2022, Petronas announced that it was selling its entire portfolio in South Sudan to Savannah. The assets comprise interests in 64 producing fields, with first production dating back to 1999.

If the deal had gone through, Savannah would have owned Petronas’ stake in three joint operating companies which operate Blocks 3 and 7 with 40% working interest, Blocks 1, 2 and 4 with 30% equity, and 33.9% in Block 5A in South Sudan.

Major partners in the joint operating companies include Chinese state-owned firms China National Petroleum Corp and China Petroleum and Chemical Corp, or Sinopec, as well as India’s Oil and Natural Gas Corp Ltd and Nile Petroleum Corp, South Sudan’s national oil company.

Petronas has shed some local and foreign assets. Most recently, Petronas completed the divestment of a 74% stake in Engen Ltd in South Africa in May and sold 25% equity in fertiliser unit Petronas Chemicals Fertiliser Sabah Sdn Bhd through Petronas Chemicals Group Bhd (KL:PCHEM) for RM1.25 billion in 2023.

In 2022, Petronas sold E&P O&M Services Sdn Bhd that provides frontline operations and maintenance services for all floating facilities in Malaysia.

https://theedgemalaysia.com/node/722079

Petronas withdraws from South Sudan

Petronas said it remains committed to the “portfolio rationalisation exercise and will continue to work with the host authority and relevant parties to find a mutually beneficial path forward” for the divestment of its ventures in South Sudan.

KUALA LUMPUR (Aug 8): Malaysia’s national oil and gas company Petroliam Nasional Bhd, or Petronas, said it is withdrawing its operations from South Sudan.

“The decision was made following a two-year period of divestment initiatives in alignment with Petronas’ long-term investment strategy amid the changing industry environment and accelerated energy transition,” Petronas said in a statement.

A planned sale of its entire oil and gas business in South Sudan to Savannah Energy plc, a British energy company, for up to US$1.25 billion (RM5.61 billion) was scrapped as both parties could not complete the deal based on the envisioned terms.

“However, Savannah remains in active discussions with relevant parties around an alternative potential transaction” for acquisition of Petronas assets, Savannah said.

The withdrawal would mark the end of Petronas’ more than two decades venture in the East African country beset by one crisis after another that resulted in frequent shutdowns and disruptions to its operations there.

The company also grappled with South Sudan’s secession from the Republic of Sudan in 2011 after decades of armed conflicts that killed more than two million people.

An ongoing civil war in South Sudan between two armed factions has seen over 14,000 people perish in the country, according to the United Nations’ estimates.

Deal fails to get necessary approvals

One of the conditions precedent for the deal is the written approval from the South Sudan's Ministry of Petroleum for the sale-and-purchase agreement, Petronas said in another statement later on Thursday.

In March 2024, the government of South Sudan decided against any approval for the agreement, Petronas said.

Savannah also said the deal was subject to conditions precedent, including receipt of in-country approvals, which despite "the extensive, combined and fully collaborative efforts of all parties”, were not met.

Nevertheless, Petronas maintained that the divestment was done in full compliance of all agreements and laws of South Sudan.

Petronas said it remains committed to the “portfolio rationalisation exercise and will continue to work with the host authority and relevant parties to find a mutually beneficial path forward” for the divestment of its ventures in South Sudan.

Sudan ops small fraction of Petronas output

Petronas has never detailed its production in South Sudan. However, its assets in South Sudan produced an average gross 153,200 barrels of oil per day in 2021, according to Savannah, a small fraction of Petronas’ total production of 2.28 million barrels of oil equivalent per day in 2021.

It’s hard to see how Nilepet can pre-empt the Petronas share of assets and take on the obligations and liabilities when they can barely pay salaries.

https://apnews.com/article/south-sudan-oil-exports-economy-civil-servants-1727c6a6d13d3b539ec2fa993eccf310?utm_campaign=TrueAnthem&utm_medium=AP&utm_source=Twitter

It seems like the deal approval environment is improving in Nigeria Eni Asset sale to Oando recently approved:

https://www.msn.com/en-us/news/other/eni-gets-approval-to-sell-nigerian-unit-naoc-to-oando/ar-BB1qyKLu?ocid=BingNewsVerp

I am expecting all the other pending deals to also go through in the next few weeks and months, there is quite a few pending:

1) Seplat / Exxon Deal

2) Chappal Energy deals with Total and Equinor

3) Renaissance deal with Shell

With the approval environment improving in Nigeria even another small deal in the region of 5,000 - 10,000 Bopd will do wonders.