London South East | The UK's favourite investor portal.

Also last friday which i thought this relevant as to how a similar issue was resolved withing a week of the AI artictle below

Perenco/Glencore had similar Exxon issues as of only last week.

' N'Djamena urges Glencore to settle its staff accounts before Perenco transfer

Issue dated 08/06/2022
PetroChad Mangara's management (PCM - Glencore Group) cannot yet put the process of transferring its Chadian assets to Perenco behind it. The company's employees, who are still demanding action to settle certain employment rights, have managed to rally the secretary general to the presidency and former agriculture minister, David Houdeingar Ngarimaden, to take up their case. In a letter dated 24 May and addressed to the petroleum and civil service ministries in the name of Chad's head of state Mahamat Idriss Déby, known as 'Kaka', he wrote that Déby "demands Glencore [...] pay its employees the payments they are entitled to".

The conditions of separation for Glencore employees have been the subject of numerous disputes since the sale to Perenco was announced at the end of December 2021. The issue of a separation bonus has been a particular bone of contention (AI, 19/01/22). There are still details to be worked out - including obtaining the approval of the Chadian authorities - before this divestment of blocks south of Doba (and where the Badila and Mangara fields producing 5,000 bpd are located) can be fully completed." '

Posted this friday but forgot to here

Re Mount Teide's 6662 post of the Perenco/Glecore deal closed yesterday.
"Chad O&G Industry - Interesting news that Parenco have closed their Glencore 16,000 bopd asset deal"
----------

That is one of the 3 deals now sorted out and dealt with.

From my AI Article post on 29/3/22

ZENGAS - 29 Mar 2022 - 12:57:46 - 5415 of 6666

'CHAD
The president has told Djerassem Le Bemadjiel to quickly sort out three major transactions in the oil sector.

When Djerassem Le Bemadjiel recently returned to the oil ministry, President Mahamat Idriss Déby, aka Kaka, gave him firm instructions to mount a three-pronged campaign to refill the state's dwindling coffers.

Savannah-ExxonMobil
The first prong consists of clinching the deal over the Doba deposits between Savannah Energy and ExxonMobil as soon as possible. This will entail Le Bemadjiel sitting in on meetings between the two firms and the Chadian state, events to which his predecessor, Oumar Torbo, was not systematically invited. The new minister, who previously held the same post from 2013 and 2016, and who has also worked for Schlumberger, has also been tasked to quickly negotiate the deal's exit bonus; the state wants $30m, while ExxonMobil has offered $15m (AI, 08/03/22).

Glencore's exit
Also high on Le Bemadjiel's in-tray is the matter of Glencore's exit from EP via the sale of its interests in Caracal Energy - blocks to the south of Doba - to Perenco. There are a few details to be ironed out before this sale can be concluded.

Block H doubts
The third prong is the planned sale of Block H by Delonex (financed by Warburg Pincus and led until 2020 by the new CEO of Tullow Oil, Raul Dhir) to CGI, a little-known Canadian firm. Delonex plans to sell this highly prospective area for $6m but Chad doubts the newcomer will be able to raise the money and then develop the licence. The state could be playing for time as Block H is due to be returned to its ownership by the end of 2022. It could then re-offer the block in a bidding round to earn a signature bonus.'

Similar to the demand 2 weeks ago where Glencore were told to pay up employee dues and deal ratified last week with Perenco. I note from this that Exxon acknowledge it.

20/6/22

'Negotiations over Exxon Mobil's exit from Chad drag on

Hoping for a speedy exit from Chad, the US oil major is trying to cut all ties with the country which appears not to want to let the company off too easily.

Exxon Mobil faces several hurdles before it can finally leave Chad for good. Not only does the US oil major still have to negotiate the size of the departure bonus the Chadian state wants to claim from the company for the sale of its assets to Savannah Energy, despite the absence of a legal basis for this practice (AI, 16/06/22), it will also have to settle its accounts with the former employees of its construction subsidiary Tchad Cameroun Constructor (TCC), who have been claiming their unpaid wages for nearly two decades.

These workers were hired by ExxonMobil to carry out work on the Komé and Miandoum oil sites from 2001 to 2004 in conditions deemed dangerous at the time. They were dismissed a year after oil production on the sites began and have been asking for their rights to be upheld ever since. In January, Chad's Supreme Court ordered ExxonMobil to pay them, but the terms of this payment remain unclear.

Digging up an old dispute

In a letter sent on 9 June to ExxonMobil's general manager in Chad, Cécile Rauline, the Ministry of Justice's inspector general Hamza Boukar Abdoul ordered the company to pay "the sums due into an account belonging to the Ministry of Justice". In a courteous response sent the following day which failed to mask the company's irritation, Rauline wrote that the firm was "astonished" by the General Inspectorate's request and questioned its legal basis.

In her letter, Rauline wrote that ExxonMobil hoped to carry out the payment by handing an enforcement agent "bank cheques in the names of each of the former employees", without going through the Ministry of Justice. However, the identity of the enforcement agent, who is an official appointed by the State as ExxonMobil does not have the necessary information about the former TCC employees, including their addresses, has not yet been established (two men were successively appointed), adding further brakes to the release of funds.'

This was from a Subscription Upstream article back on 17th January and it too mentions July for completion. It also shows the upside potential on a number of fronts - not just production.

3,000 bopd future production savings from burned oil and new drilling as well as new drilling/workovers, there has to be potential that along with existing gas production/new contract supplies, these current crop of assets could make SAVE a 50k+ boepd producer ahead of Niger and an expected H2 acquisition.

There is significant pipeline throughput improvement potential also. (129,000 bopd throughput forecast to give $60m FCF meaning approx another $60m upside potential to play for as fixed costs taken for). Income from 3rd party direct access to FSO. Also a significant opportunity to materially increase P2 reserves from same. Definitely not all about production alone !

"Savannah Energy is pulling together an ambitious plan to begin in 2023 a multi-well drilling campaign on long-neglected oil assets in Chad that it is acquiring from ExxonMobil and Petronas for $626 million.

Assuming the deal completes as planned in July, Savannah will spend the remainder of this year on well optimisation and workover activities, before embarking on an infill drilling campaign in 2023 set to average 12 wells per year through to 2030.

The resource potential of Chad's Doba basin play is significant, with chief executive Andrew Knott telling Upstream that no wells have been drilled on the assets since 2015 and only 16% of the in-place oil has been tapped.

“I would describe as extremely exciting the opportunities associated with workovers and new wells, given the lack of investment. It will get our focus and attention,” he said.
“There is a large well stock that we believe is ripe for a significant workover programme and it is clearly much more material for us than ExxonMobil.”
The current Doba partners own rigs in Chad, explained Knott, but Savannah also intends to run a bid process to bring in a drilling contractor, highlighting that both US and Chinese service companies have been very active in the country."

Low hanging fruit

While there is deeper exploration potential at the fields, he said the near-term goal is to go after producing zones.

Gross proven and probable reserves stand at almost 140 million barrels of oil, while total contingent resources are estimated to be about 110 million barrels.

About 631 million barrels has so far been recovered from an estimated oil in place resource base of 3.8 billion barrels, comprising 17 to 27 degrees API oil in Upper Cretaceous sands and much lighter crude in Lower Cretaceous reservoirs.

The seven producing fields — Kome (the biggest producer), Miandoum, Bolobo, Moundouli, Maikeri, Nya and Timbre — in which Savannah is acquiring a 75% stake were brought on stream between 2003 and 2009 and host some 300 wells in total.
In 2020, production averaged 33,700 barrels per day, but output is due to drop to about 30,000 bpd this year before Savannah’s well operations and infill drilling programme kicks in.

The new operator also aims to boost the performance of existing waterflooding and polymer flooding activities to enhance oil recovery.

A bonus for Savannah is that any fresh oil reserves it exploits can be fed into the Chad-Cameroon export pipeline, which runs for 1070 kilometres between the Doba basin and a floating storage and offloading vessel at Kribi port.

Savannah will control the pipeline and FSO with a 70% stake as part of the ExxonMobil-Petronas deal.

This pipeline’s capacity is 250,000 bpd, with throughput in 2020 averaging 129,000 bpd, about 75% of which came from other Chadian oilfields operated by China National Petroleum Corporation — which is producing about 100,000 bpd — and Taiwan’s OPIC, plus Switzerland-based Glencore, which is selling its assets to Perenco.

Knott said all three operators look set to increase production in the coming years.
The pipeline tariff is not related to oil prices, and in 2020 equated to about $3.6 per barrel for both ExxonMobil and Petronas and about $6.7 per barrel for the third-party shippers.

According to Savannah, total pipeline throughput is forecast to reach almost 160,000 bpd in 2027, with consultancy Wood Mackenzie estimating that output could potentially exceed 200,000 bpd by this time.

Savannah’s in-house broker finnCap noted that the upstream assets are expected to deliver net production of 22,500 bpd in 2022, with the pipeline forecast to transport 136,000 bpd.

Knott also pointed out there is the potential to to make more use of the Kribi FSO. "I think there's potential for us to allow third parties to link directly to our FSO and to evacuate crude."

On the ascent

FinnCap said the ExxonMobil-Petronas transaction is expected to boost Savannah’s total working interest production in 2022 by 144%, to 38,600 barrels of oil equivalent per day, and proven and probable reserves by 131%, to 183.1 million boe."

https://www.upstreamonline.com/production/savannah-set-for-big-infill-drilling-campaign-on-oil-rich-chad-assets/

16/6/22 AI

ExxonMobil still hashing out bonus payment with transitional authorities

The oil major ExxonMobil, which is withdrawing from Chad on 1 July, has still not managed to agree on the terms of its departure with the transitional leaders.

As we previously revealed, in February the Chadian transitional authorities demanded a bonus of $30m in connection with ExxonMobil withdrawing from the country on 1 July 2022 (AI, 29/03/22). However, according to our sources, negotiations with the American company, which are being led by the president's new secretary-general, David Houdeingar Ngarimaden, and the finance minister, Tahir Hamid Nguilin, have still not resulted in an agreement. At the beginning of this year, ExxonMobil offered to pay $15m, but the government considers this sum to be much too low given how long the US major has been operating in Chad.

ExxonMobil's 40% share in Doba basin operations has been acquired by the British junior Savannah Energy for around $626m. The major had been producing in the basin since 2003, having begun development works in 1999. At one point, production reached more than 100,000 bpd but is now struggling to hit 30,000 bpd, though this could well increase thanks to future drilling planned by Savannah. The junior is run by the financier Andrew Knott with the help of former Perenco executives such as his operations director Antoine Richard.

No bonus from Petronas

The Malaysian company Petronas has also sold off its 25% holding in the Doba basin for around $266m, again to Savannah. However, its management team in Kuala Lumpur has no intention of paying any bonus to Chad's finance ministry in order to withdraw from the country.

Petronas has never asked for a clean bill of fiscal health from the authorities, only has a handful of employees actually based in Chad, and unlike ExxonMobil it is not the operator of the project. The company has also pointed out that it is under no legal obligations, since such withdrawal bonuses are not provided for in any law or regulatory code. When Petronas announced that it was giving up its stake in the latter half of 2021, the Société des hydrocarbures du Tchad (SHT), which holds a 25% stake in Doba, sought to exercise its pre-emptive rights but was unable to match the sum offered by Savannah Energy.

My notes -

Management have 10% of FD Business = incentive to deliver.

Blue Chip Institutions hold 80% pretty unique and strong backing.

AK in Abuja in connection wth Accugas refinancing. Estimates 1/4 over 5 years, 1/4 over 15 years and half over 12 years. Not concerned about interest rate rise as they have an inflation hedge in the gas price. Expect it to complete Q3.

Been building the right team and people, putting building blocks in place this past few years and growth now, not by accident.

Niger - R3 35 mmbls + 140 exploration targets. Announcement on this in the next 3-4 weeks on taking this forward and the next near term exploration targets.

Increased gas sales in Nigeria expected and expect to be working on the potential of export gas. No increased CPF capacity beyond the expected 240 mmcf/d needed yet and that others could choose to process their own gas of which SAVE would transport it and charge a tarriff. Direction of travel on export gas side. Want to tie in higher gas prices.

Greatly excited about Chad-Cameroon assets - running into Q3 completion - all done on Saves side. 700 inactive wells. No wells drilled in over 5 years. Only 16% oil recovered so far. Expect to deliver on a lot of that upside.

New hydrocarbon acquisitions H2. Oppportunties are massive. 'Watch this space.'

Once in a generation opportunity to materially grow the company through these divestment opportunities ($25b worth approx in Africa alone from majors).

Not needing to suspend again on any of the current deals they are looking at.

Masive demand for Power and Green Energy along with further deals - a lot of debt funding available for these.

Paying $10m div next year but won't pay more as the opportunities are too good to take advantage off rather than increase dividend - again once in a generation opportunity for massive growth.

Valuations as mentioned by others of $1b+ each potential for Niger business, Chad-Cameroon, Accugas Nigeria, and the green Energy division itself.

On the cusp of great things which will be great for the company and by default shareholders.

Surely with the level of supply going up, there must be a material increase in revenue and subsequent bottom line profitability as most of the costs involved are already fixed.

7th GSA customer today - Accugas has entered a GSA with TAPL to supply up to 35 MMscfpd of gas on an interruptible basis for an initial term of three months, with the option to extend for a mutually agreed period.

This puts's the total with todays GSA + existing 247.5 = 282.5 mmcf/d DCQ.

At an 80% TOP level (226 mmcf/d) that puts the CPF in it's operating range of name plate 200 up to 240 mmcf/d with compression.

------------------------------------------------------

ZENGAS - 22 Apr 2022 -

' F/Cap - "Accugas has six gas sales agreements in place, three of which have been signed since Savannah acquired Seven Energy in late 2019. In total, these contracts represent up to 247.5 mmcfd of daily gas deliveries."

Surely that should set investors thinking now, that given the CPF is capable of 200 mmcfd and believed it can run at 240 mmcf/d with compression etc that it is in effect nearly at our limitations because at some point if the grid is sorted out the TOP could quickly increase to the DCQ levels to meet the full power generation needs.

This though is still only a fraction of Nigerias electricity needs at they build to over 30 GW via the grid and also displace more costly petrol/diesel power generation.

In the relisting presentation for activity it shows the compresssion start up at Accugas expected approx end Q1 next year.

With 6 material contracts, this should increase earnings significantly as most of the fixed costs are already taken for as MT says. If the refinancing with an estimated $27m/yr additional FCF were to be soon announced, this would be very material along with these new contracts.

It's getting to a stage where at some point in the next 12 months or so i'd expect them to announce plans for bolt on CPF capacity for future growth.

Slowly but surely, Accugas is transforming into a very material business with a significant expanding market. All imo as usual.'

AI stating Save in possession of Exxons assets since yesterday. 3000-4500 bopd going for fuel oil to be saved as a result. Chad director appointed.

2/6/22

' Savannah unleashes charm offensive on Kaka following ExxonMobil exit

The British junior, newly arrived in Chad, intends to do everything in its power to gain the approval of the country's authorities. It is preparing to develop huge electrification projects in its production area of Doba and near N'Djamena.

Since 1 June, the British junior Savannah Energy has been in possession of ExxonMobil's stakes in the Chadian Doba oilfields, and it is already making moves to get itself into the good books of the transitional authorities, led by Mahamat Idriss Déby, aka Kaka. The 27 May signing of a memorandum of understanding between the Minister of Petroleum, Djerassem Le Bemadjiel, and the CEO of Savannah Energy, Andrew Knott, concerning renewable electricity projects involving 500 MW will help to establish good relations with both the Chadian authorities and the country's population.

Completion of the divestment was complicated for ExxonMobil due to its employees fears of job losses and benefit cuts. Following employee protests, at the end of 2021 the company decided to temporarily close the Komé site, and it also decided to replace its general manager Carole Gall with Cécile Rauline (AI, 14/03/22).

The case for electrification

Savannah Energy is working on two solar power plants in Chad. One in Komé, in the production area, will eventually replace the one that runs on crude oil. Since 2003 when production began, ExxonMobil has consumed between 3,000 and 4,500 bpd to run this power station and thereby conduct its extraction activities. Keen to avoid this waste, Savannah hopes to sell this crude oil, which up to now has been burned to produce electricity, on the international markets.

This is a triple win: more revenue, better environmental protection and an increase in the number of Chadians benefiting from electricity in the production area (Moundou and Doba), since the plant will generate 300 MW, which is far more than the capacity of the current crude oil plant and makes it the largest solar power plant on the continent outside South Africa. But Savannah does not intend to stop there and plans to build two more 100 MW solar power plants to supply the capital N'Djamena and thus double the country's largest city's current generation.

Perenco team in business

Knott and his vice president, Yacine Wafy, have chosen Nicolas de Blanpré as Savannah's Chad director. Blanpré came highly recommended by Savannahs operations director Antoine Richard and Niger and Nigeria operations director Yannick Le Bloa. All three are former employees of the French family-owned company Perenco.

My estimate for SAVEs Renewables division with PPAs is for £1b+ value creation. So far 750 MW planned to be in operaton 2025/26.

Actis 60% founded Lekela Power in 2015. Lekela operates with significant long term debt financing and visible income stream under PPAs.

Feb 2015 "Actis, the UK-listed private equity group, is to set up a $1.9bn renewable energy business in Africa, in an attempt to tap the continent’s resources and meet its growing demand for electricity.

Lekela Power, as the new company is called, will be a joint venture with Mainstream, a wind and solar developer that already works in partnership with Actis in Chile. Actis will take 60 per cent of the equity in new business — which it said would run to a maximum of $220m."

https://www.ft.com/content/fdf4e32a-b5f9-11e4-a577-00144feab7de

and now

Feb 18 2022
Reuters) - South African miner Exxaro (EXXJ.J) and Chinese state fund CNIC are among potential buyers admitted to the final round of bidding for African renewable energy firm Lekela Power - a company worth around $2 billion, a number of sources familiar with the deal told Reuters.

African Infrastructure Investment Managers (AIIM), an arm of Old Mutual (OMUJ.J), has advanced to the final stages alongside Exxaro, two sources said. Another two sources said CNIC was in the final bidding round. All sources spoke on condition of anonymity.

Private equity firm Actis' plans to sell its 60% stake in Lekela were first reported last year, but 40% shareholder Mainstream Power is also looking to cash out as well, three sources familiar with the decision said, with one adding it was being advised by Citi alongside Actis.

Actis, which founded Lekela with Mainstream in 2015, values the company at $1.9 billion, according to its website.

Lekela develops utility-scale renewable power projects in Africa. It has 1.3 GW of projects in Egypt, Ghana and South Africa and lays claim to building the first ever utility-scale wind farm in Senegal, according to its website.

https://www.reuters.com/markets/deals/exxaro-chinas-cnic-vie-with-aiim-2-bln-african-power-firm-lekela-sources-2022-02-18/

I note that Emerging Energy Corp have announced their arrival in Niger coincidentally 4 weeks before Save, signing an agreement with the Niger Government.

Saves recent advertised recruitment drive mentioned to applicants potential involvement in Green Hydrogen (which is reported to be one of the biggest investment propsects of our time).

Green Hydrogen has to be made from Solar or Wind etc (no hydrocarbon involvement)
From EECs website "
Emerging Energy Corp. is an investment firm dedicated to creating growth in the African energy sector and related infrastructure.
We aim to build local capacity, create well-paid jobs, attract foreign partners, diversify the economies in which we operate and deliver market-leading returns to our investors.
As an investment firm, we partner with top-tier management teams and portfolio companies that share this philosophy and understand the pivotal role Africa will play in the world energy market due to its vast resources, talent, and enterprise.
Direct access to individual energy investments often calls for significant investment amounts. Through Emerging Energy Corp., investors can broaden their reach across a range of African energy opportunities with more modest investments.
Emerging Energy Corp. strives to create value through investment opportunities for institutions and individuals who want to combine economic prosperity and social impact in Africa.
Our goal is to attract international capital to enable Africa to unlock its full potential by building the energy industry it needs. Emerging Energy Corp. aims to generate superior risk-adjusted returns and a lasting impact for our businesses, investors, and the communities in which we operate in.
Our primary responsibility is to our investors. In addition to operating in an honest and transparent manner, we place great importance on ensuring our investors’ capital is deployed in an ethical and socially responsible way".
https://emenergycorp.com/
21/2/22
"German investor EEC to develop green hydrogen projects in Niger
German energy solution provider Emerging Energy Corporation (EEC) will cooperate with the government of the Republic of Niger to explore and develop commercial green hydrogen projects in the West African country.
As part of the newly-signed agreement, EEC will also invest in various projects to decarbonise oil field operations and refineries in Niger through the use of carbon capture technologies. This will be in addition to relying on electrolysis for the production of green hydrogen from renewable power sources.
The partners’ intention is to make Niger a hub for green hydrogen production in the region. No details were given about specific projects.
Centurion International AG has acted as the lead advisor on the transaction."
https://renewablesnow.com/news/german-investor-eec-to-develop-green-hydrogen-projects-in-niger-774138/

I believe the renewables projects so far may represent a figure of around $1 billion and via the FCF model i belive with PPAs in place this will lead to another £1b minimum of value creation for Save on long term visible contracts of 20+ years.

Below imo gives a rough cost guide to Saves 3 projects of Solar & Wind farms and i've estimated pro rata based on a range of other African projects - so might mean a total ball park cost of $950m - $1.1b so far ?
Save expect to finance these projects through debt and internal cash flow and due to the estimated low net debt level of $134m from the current assets (incl Chad) in just over 2 years at $60/b oil and the possibility of financing 60%+ i see no reason why it can't be achieved.

On the current assets, we are estimated to have net debt of $134m in 2.5 years at $60/b oil. Though at $60/b oil, some uplift in Chad production, Accugas refinancing savings, impact of FIPL contracts and a saving of 3,000 bopd from Kome that goes to power the generators, i think we could well move from the FCF case of $269m at $60/b oil to around $400m FCF/yr again at $60/b oil. In turn the renewables projects should increase FCF further.

Globeleq financed a $69m farm with a 20 yr PPA with $52m of debt leaving them to cough up $17m - ie 75% debt financed.

Saves Projects so far

Niger - The proposed wind farm project, Parc Eolien de la Tarka, is expected to be owned by a subsidiary of Savannah, Savannah Parc Eolien de la Tarka ("SPET"), and to consist of up to 60 wind turbines with a total power generation capacity of up to 250 MW. ($4-$500m ?)

Chad Kome - At 300 MW, the Centrale Solaire de Komé would be the largest solar project in sub-Saharan Africa (excluding South Africa) as well as constituting the largest battery storage project in Africa. Project sanction for the Centrale Solaire de Komé is expected in 2023 with first power in 2025. ($3-$350m ?).

Chad Capital - Centrales d'Energie Renouvelable de N'Djamena - The second project covered by the Agreement involves the development of solar and wind projects of up to 100 MW each to supply power to the country's capital city, N'Djamena. Project sanction for the Centrales d'Energie Renouvelable de N'Djamena is expected in 2023/24 with first power in 2025/26. ($250m ?)

Latest Share Chat

Member Info for ZENGAS

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for ZENGAS

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending