June 2011

ISSN 1757-1383

JUNE
2011

VOL. 9 ISSUE 4

CONTENTS
On the Cover
Downstream Focus

25 28

Combating Pipeline Corrosion

Monthly Focus
7th Annual Independents Survey & Awards

Local Impact
Source: Viking Moorings

39 41 43 48 54 58 60 62

South Sudan Rallies Displaced

African Focus
Cote dIvoire Overview

Mooring installations evolve to increase efficiency

Pre-set Mooring Installation

D e pa r t m e n t s
2 3 4 6 10 13 16 18 20 24 64 67 68 68 Moving On Recruitment Message from the Editor Africas Big Five Africa at Large Around the World Downstream News Power & Alternatives Market Movers African Politics Facts and Figures Conferences Contact Us Advertisers Index

Tunisia Overview

Technology And Solutions

A Look Ahead at Fracking

Oil Security
Sudan Peace Still in Jeopardy

Book Review
Dancing in the Glory of Monsters

New Products & Services

Downhole Monitoring Easier via Emerson Atlas Copco Introduces One-Piece Retrieval System Subsea 7: First Commercial Autonomous Inspection Vehicle Baker Hughes Debuts Next Gen Reservoir Modeling Software

We b E x c l u s i v e s ONLY ON WWW.PETROLEUMAFRICA.COM
GeoFORM Conformable Sand Management System Africas Nuclear Ambition
Log-on to www.petroleumafrica.com for web only features, all department news items in-depth, a complete events calendar, an oil directory, all the latest news items out of the continent, and much more. Sign up for a risk-free trial to Petroleum Africa today!

Moving On
Sasol has named David Constable the replacement for former chief executive Pat Davies. Constable is chief executive designate as of June 6 and joins Sasol from Fluor Corp. where he is currently group president, operations. Paradigm has appointed Bruce P. Koch as the companys CFO. Koch previously served as executive VP and CFO for Cal-Dive International. Bradley Hirst has joined Ferguson Modular Ltd. as the new Middle East business development manager. Hirst has years of business development experience, primarily in the Middle East and Asia Pacific regions.

Paul Tyree has been promoted to COO of Total Safety. Tyree joined Total Safety in 1996 and has served in various sales and operations roles. Paul Tyree John Derbyshire has been appointed president of KBRs Technology business unit. Derbyshire succeeds Tim Challand who has led the business unit since its inception in 2007 and is retiring after 23 years of service to KBR.

Pat Davies

TransAtlantic Petroleum Ltd. announced that its board of directors has appointed its chairman, N. Malone Mitchell, III, to serve as the companys CEO effective immediately. Mitchell replaces Matthew McCann who tendered his resignation as CEO. Transocean Ltd.s board of directors elected J. Michael Talbert as chairman of the Board of Directors, replacing Robert E. Rose, who retired following the 2011 Annual General Meeting. Victor E. Grijalva also retired after the meeting. Shareholders approved the election of Jagjeet S. Bindra and Martin B. McNamara and Ian C. Strachan as Class III Directors. OMV has named Glsm Azeri as its new CEO for Petrol Ofisi, its Turkish operation. Azeri replaces Melih Turker who is leaving the company. The change is effective from July 1. Jonathan Lindsay has joined Jees management team. Lindsey will head up the Aberdeen office and be responsible for operations and performance. Jee has also selected Paul Job for the position of engineering manager at the Aberdeen office. Sonde Resources appointed Kurt Nelson as its new CFO. Nelson has held a number of senior positions with oil and gas firms including Anadarko Petroleum Corp. Xmos, a JV between Xodus Group and Mos Baker, had a number of new appointments. Sam Unuigbe owner of Mos Baker will take on the role of chairman and his son, Ohioze Unuigbe, will be managing director. Rod McInnes has been appointed operations director of Xmos.

Bradley Hirst

McDermott International shareholders reelected John F. Bookout III, Roger A. Brown, Stephen G. Hanks, D. Bradley McWilliams, Thomas C. Schievelbein, and David A. Trice, and elected Stephen M. Johnson and Mary L. Shafer-Malicki to the board of directors. The company also reported that Ronald C. Cambre retired from the board. Additionally, McDermott announced that the board of directors appointed Stephen M. Johnson as chairman of the board and D. Bradley McWilliams as its lead director. TGS NOPEC appointed Rod Starr senior VP Africa, Middle East, and Asia Pacific. Starr has been with TGS for more than 10 years and has held a variety of leadership positions in both the geophysical and geological businesses.

Philip Tracy, engineering and operations director at Cairn Energy, has been appointed a non-executive director of West Africafocused Bowleven, with immediate effect.
Philip Tracy

Helix Energy Solutions Group, Inc. has promoted Cliff Chamblee to executive VP of Contracting Services. Terry Jbeili has joined MicroSeismic as its executive VP of operations. Jbeili has over 30 years of experience in international operations, including some time in North Africa. Charles O. Boamah, a Ghanaian, has been appointed as a vice president of the African Development Bank Group (AfDB). Boamah has been with the AfDB since 1996. His immediate past position with the bank was as director and controller. Jean Huby has been appointed executive VP of the AREVA group of companys Offshore Wind business. Huby previously served as AREVAs deputy senior VP of the Renewable Energies Business Group.

Rod Starr

Foster Wheeler AG has promoted Jon Nield to VP, Project Risk Management Group (PRMG), effective immediately. Nield has been with Foster Wheeler for 25 years and succeeds David Wardlaw who retired May 1. Circle Oil has appointed Dr. Mohamed El Mostaine as operations manager for Circle Oil Maroc Ltd. Prior to joining Circle, El Mostaine was director of petroleum exploration for Moroccos state-run oil firm ONHYM..

To include a corporate personnel announcement in Moving On, write to info@petroleumafrica.com. Preference will be given to Africa-specific appointments and to those companies who have interests within the continent; all others will be included on a space available basis.

Petroleum Africa Magazine June 2011

Recruitment
CA. Oil & Gas
Position: Operations Manager - Chemical sales Location: Congo, Pointe Noire Position description: Our client is currently seeking to employ an Operations Manager for their Chemical sales division selling to oil & gas companies. Experience & Education: 10 years relevant experience in the chemical Oil & Gas industry. Contact: Eugenio Maggi, CA Oil & Gas Tel: +27 21 551 5340 Email: eugenio@caglobalint.com

CA. Oil & Gas

Position: Solid Control Engineers Location: Equatorial Guinea Position description: Our client is currently looking for a Solid Controls Engineer for their Drilling Waste Management (DWM) department. The position is live-in OR rotational. Experience & Education: 5 years min experience with relevant qualifications, including experience on cuttings/centrifuges. Contact: Eugenio Maggi, CA Oil & Gas Tel: +27 21 551 5340 Email: eugenio@caglobalint.com

CA. Oil & Gas

Posio: Tecnico de Recursos Humanos Location: Angola Discrio: O nosso cliente pretende recrutar um Tecnico de Recursos Humanos para as suas operaes em Angola. Posio ser baseada em Angola Experincia & Qualificao: 3-8 5. Licenciatura. Bons conhecimentos da lei de trabalho de Angola. Contact: Moises Padre, CA Oil & Gas Tel: +27 21 551 5340 Email: padre@caglobalint.com

CA. Oil & Gas

Position: Projeteur Tuyauterie PII Location: Cameroun Position description: Etude de tuyauterie et encadrement de l'quipe locale. Etudes manuelles mener sur plans existants. Experience & Education: 10-15 ans - Senior avec exprience de mission dans des pays africains - Facult dencadrement - Grande exprience en rvamp dunit - Maitrise de langlais souhaitable. - Excellente lecture des plans de tuyauterie - Connaissance Microstation V8 serait un plus Contact: Sbastien Roger, CA Oil & Gas Tel: +27 21 551 5340 Email: seb@caglobalint.com

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Message from the Editor

Dianne Sutherland Chief Editor
Deputy Editor Jennifer Nickle jnickle@petroleumafrica.com Associate Editor LeAnne Graves lgraves@petroleumafrica.com Senior Correspondent Mark Pabst Contributors Chikezie Nwaoha Guy Brown Leo Ochira Operations Manager Alan Younes Art Director Mario Saad Events Coordinator Basma Awdan Circulation Manager Silvia Rafaat Circulation Coordinator Amira A. Wahab Senior Accountant Said Adly Advertising/Sales Jina Sellers advertise@petroleumafrica.com IT and Website Jacob M. Sellers Administrative Assistant George Saad Printing by Sahara Printing Company S.A.E. Nasr City - Free Zone Cairo, Egypt

Perhaps you were hoping that I would change the subject to something other than natural gas in this issue. Good news, I am, but not entirely. I had occasion to attend the World LNG Series, Americas Summit put on by the CWC Group from May 23-26 where I found a significant amount of attention dedicated to shale gas, the industrys new rock star as more than one speaker termed it. While it is not surprising that shale gas would receive this focus at a North American conference, it was thought provoking as regards to how the entire energy trade picture is going to look in the future. The worlds total shale resources, both gas and oil, are not yet known, but it is clear that the reserves are abundant with some analysts putting current US technically recoverable reserves alone anywhere from 800 Tcf to 2,000 Tcf, and global reserves at 6,500 to 8,500 Tcf. This is clearly a game changer for the future of global oil and gas trade, even at the lower end of the reserves range. How much? Where? How fast will they be developed? These are all questions of imminent importance and currently the focus of many an analyst discussion. Looking at the proven shale reserves already under development in the US including Barnett, Eagle Ford, and Marcellus just to name a few, one would not be off the mark to assume that more development will come pretty darn quick if recent project timelines are an indicator. This true especially with US interest groups looking to defer drilling for oil and gas in environmentally sensitive areas like Alaska and with deep water drilling in the Gulf of Mexico all but ground to a halt since the BP GoM disaster. But perhaps the most important driver will be the US consumers appetite for fuel to power their fondness for larger, less economic vehicles. For many, the current $4 per gallon gasoline price tag just doesnt sit right and a transition to shale resources to keep those prices from climbing higher could be the most appetizing thing on the menu since apple pie and ice cream for the Americans; despite the environmental development challenges. More important to Petroleum Africa readers is just where will African resources go with the US (and world) shale boom? Will American companies still invest? What future oil and natural gas prices can be relied upon when looking to further new developments? For the first two questions I believe the answer is fairly obvious, the third not so obvious. There will not be a shortage of buyers for African oil or gas. There exists huge demand from China and other countries in the East for Africas resources, not to mention the EU, all of which are already competing for African energy. What is most exciting, from my point of view, is that America could become a net exporter of gas, potentially giving energy hungry economies an alternate supplier of gas. The EU probably sees this as a great opportunity to remove the Russian gas noose from around its neck and the East always appreciates greater access to energy. Theres little doubt that established energy trade patterns will change as the US ramps up its shale production and supplies more of its domestic energy needs, freeing up some previously allocated resources. And the answer to the next two questions. Yes, of course US companies will still invest when fiscal regimes are attractive and political stability holds course, they are in the business to make money and secure a return for their shareholders. Now for the barrel price; I see it stabilizing somewhat and even beginning a small to moderate decline in relative terms as more of these resources come online in the future. Those are my thoughts folks, I would love to hear yours, so please do drop me a line. Inside this issue you will hear a bit more about shale gas in our Hydraulic Fracturing feature in the Technology & Solutions section, but more so about the tremendous progress this technology is making to reduce its footprint. The African Focus section features the most recent goings on from Cote dIvoire and Tunisia while Oil Security and Local Impact both look at the situation from South Sudan. And finally, our signature piece of the year, the 7th Annual Independents Survey & Awards features in the Monthly Focus section; congratulations to this years winners! As always, your comments are appreciated and can be sent to info@petroleumafrica.com.

Petroleum Africa Magazine June 2011

Africas Big Five

ALGERIA
Petroceltic Spies Gas at AT-5z, Secures Rig
Petroceltic International completed the drilling of the AT-5z well in Algeria. The well was drilled on Petroceltics Isarene Permit and reached a total depth of 2,421 meters. The horizontal section of the well, which totaled 376.5 meters in the main Ordovician reservoir, will be evaluated by drillpipe conveyed logging tools. The company said that good gas shows were encountered throughout the reservoir section. A multi-stage completion will be run on completion of the logging. The company expects to suspend the well for testing, with test results expected in June. Besides the completion of the AT-5z the company secured a rig for its appraisal campaign on the Isarene Permit. Petroceltic said that it has signed a contract with KCA Deutag for a second drilling rig, a Nomad class drilling rig. The rig known as Deutag T-211 will work alongside the existing Dalma Rig LR-12 on the Ain Tsila Field appraisal program. The T-211 rig contract period is for up to three wells and, in conjunction with the existing rig, will allow the enlarged program of a minimum of six appraisal wells to be completed before the end of 2011, allowing sufficient time for the submittal of the Final Discovery Reporton the Isarene Permit to the Algerian authorities. The T-211 rig recently completed a program in Algeria for another operator in the Illizi basin and is expected to commence mobilizing to the first well location in June 2011, with drilling operations likely to commence in July 2011. The company also reported that it has signed two contracts for studies in support of the Final Discovery Report. The contracts are with G3Baxi Partnership for field development conceptual studies and with Ove Arup & Partners for a geotechnical study. Petroceltic believes these studies will assist with initial concept selection and the location of the facilities, infrastructure, and pipelines for the Final Discovery Report.

Under the contract JGC will construct compression plants at In Amenas aiming to keep production at a level of 30 Mmcm/d for the next 12 years. Work on the project started in early May and is expected to be completed in Q3 2013.

industry terms and conditions, including the notification of the joint venture and receipt of relevant government approvals.

EGYPT
Dana G Makes First Gas Discovery of 2011
Dana Gas made its first gas discovery of the year in Egypt. The company announced that the South Abu El Naga-2 well on the West El Manzala Concession, drilled as an appraisal of the South Abu El Naga Field, encountered 16.6 meters of net pay in the Abu Madi formation, thus extending the field. The company said that in addition to the hydrocarbons encountered in the Abu Madi it also encountered 4.8 meters of net pay in a good quality sandstone reservoir in the El Wastani formation, representing a new pool discovery. On test, the well produced 14.1 Mmcf/d of gas with 718 barrels of condensate from the Abu Madi Formation, and 5.9 Mmcf/d of dry gas from the El Wastani Formation.

ANGOLA
Totals Canna-1 Adds to Oil Bounty
Block 17/06 offshore Angola produced another discovery with the drilling of the Canna-1 well. Total reported that its subsidiary, TEPA (Block 17/06) Ltd., and partner Sonangol E&P hit hydrocarbons in the north-eastern portion of the block. The Canna-1 was drilled in a water depth of 445 meters and produced at more than 5,000 bpd during testing. Sonangol is the concessionaire of Block 17/06 while TEPA is the operator with a 30% stake. Totals partners on the block are Sonangol Pesquisa e Producao S.A. (30%), Sonangol Sinopec International (SSI) Seventeen Ltd. (27.5%), ACREP Bloco 17 S.A. (5%), Falcon Oil Holding Angola S.A. (5%), and Partex Oil and Gas (Holdings) Corp. (2.5%).

Cobalt Readies to Drill Offshore Angola

Cobalt Energy International will be drilling offshore Angola very soon after plans were approved by Sonangol for Block 21. The company will drill the Cameia-1 and Bicuar-1 pre-salt exploratory wells on the block. The company said that given the proximity of the well locations, it plans to drill the surface hole of Bicuar-1, move the rig to Cameia-1 to drill and evaluate the prospect, then return to Bicuar-1 to drill the well to total depth. Cobalt anticipates drilling operations to commence in Q2 using the Ocean Confidence rig. Cobalt said that it also expected to receive the formal award of its 40% working interest and operatorship of Block 20 offshore Angola soon.

RWE Scores Gas Offshore Egypt

Another natural gas discovery was recorded on the North El Amriya concession offshore the coast of Egypt on May 6. German firm RWE Dea said it hit with the drilling of the NEA 4x, confirming the discovery made in January with the drilling of the NEA 3x well. The NEA 4x was drilled to a final depth of 3,320 meters and hit a gas reservoir in the Miocene layer in the Abu Maadi formation with a thickness of 58 meters. A production test was successfully carried out with production volumes of up to 25,000 Mscf/d.

Geyad-3 Well Flows from Shagar Sands

Circle Oil issued an update on its Geyad-3 appraisal/development well and development plans for the NW Gemsa Concession where it holds a 40% stake. The company said that the Geyad-3 was drilled to 5,635 ft measured depth in the Upper Rudeis. The main objective for this well was to appraise and bring into production the oil bearing Shagar and Rahmi sandstones of the Kareem Formation. The Shagar sands were encountered from 5,333 to 5,347 ft MD with 14 ft of net oil pay. The wells Shagar interval was tested at a sustained rate of 1,316 bpd of oil and 1.26 Mmcf/d of gas.

ROC Oil Bows out of Angola

ROC Oil has sold the remaining 10% stake in its block onshore Angola, with effect from April 1. The companys subsidiary, Lacula Oil Co. Ltd., agreed to sell its remaining 10% interest in the Cabinda Onshore South Block to Pluspetrol Angola Corp. Under the sale agreement Pluspetrol will pay ROC $5 million subject to working capital adjustments. The agreement is subject to normal

JGC Wins $213 Million In Amenas Contract

Partners on the In Amenas gas fields Sonatrach, BP, and Statoil awarded Japans JGC a contract worth $213 million to aid in maintaining production levels on the gas fields.

Petroleum Africa Magazine June 2011

The well will be completed for production. Circle did say however that the underlying Rahmi sands were encountered but were found to be of poor reservoir quality and as such, not tested. A secondary objective of the Belayim sands in the Geyad-3 well was also encountered with 5 ft of calculated net pay, but it was decided not to test this interval. The next well proposed for the Geyad field is a westerly peripheral injector to be drilled later in 2011. The well is currently rigging down and the rig is preparing to mobilize to drill the injector well Al Amir SE-8X, located on the south-west flank of the Al Amir SE field.

The 2D seismic survey over the Mesaha exploration concession in southern Upper Egypt is ongoing and the data acquired to date (approximately 750 km) has significantly improved the sedimentary basin definition. Based on the encouraging results, the size of the planned survey has been increased to around 1,600 km and the acquisition program should be completed by late-June. The North East Abu Zahra-1 gas production well experienced water breakthrough in December and subsequently the well rate declined rapidly until it ceased to flow in April. The company now plans to drill a replacement production well in the field at the crest of the structure (the original well was located down-dip on the flank of the reservoir) after completing the current West Dikirnis horizontal well. This will result in the deferral of production but has no implications with respect to the field reserves. Melrose said that based on operational considerations, it was reducing its 2011 production guidance from 44.0 mboepd to 40.5 mboepd on a working interest basis. This is primarily due to the recent North East Abu Zahra-1 well performance and the impact of the decision to initially complete the latest West Dikirnis horizontal producer as a vertical well, coupled with other minor production variances.

Production from the Al Baraka field is approximately 800 bpd of oil, 400 bpd net to Sea Dragon. Sea Dragon has a 50% working interest and is joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%. Commenting on the latest developments on the companys operations in Egypt, chairman and CEO Said Arrata stated: The success of our development drilling and delineation work in both Al Amir SE and Geyad fields in our NW Gemsa Concession is most gratifying. We are looking forward to the commencement of the water flood project and the resulting increase in production. In Kom Ombo, detailed geotechnical work is well underway in preparation for the fall drilling season.

ZZ-4 Drilling Ahead on the Abu Sennan

Beach Energy reported that the ZZ-4 well on the Abu Sennan Concession in Egypt is drilling ahead in the Jurassic Khatatba Formation. The well is an appraisal of the Cretaceous GPZZ Oil Field and was deepened to target hydrocarbon exploration potential in the older Jurassic sequence. Current depth is 4,661 meters with a prognosed total depth of 4,884 meters. The ZZ-4 is the first in a multi-well drilling program designed to test several play concepts within the Abu Sennan concession.

LIBYA
Libyan Rebels put Exports on Back Burner
Exports of Libyan crude from production centers held by the rebels will not resume any time soon, according to a statement from Ali Torhoni who is in charge of the economy and energy portfolio under the rebel administration. Torhoni said that the groups main focus now was to ensure that oil installations remained secure against incursions from loyalist fighters. The rebels sent out a few cargos of crude and the US government gave the go ahead for US firms to conduct business with the rebels.

Apache Plans Unconventional Hunt in the Western Desert

Apache Corp. is going unconventional in Egypt with plans to explore deeply buried rock formations, including shales, in the countrys Western Desert for oil and natural gas beginning later this year. The company believes that its East Bahariya property holds a shale formation that contains between 700 million and 2.2 billion barrels of oil. Thomas Voytovich, who heads Apaches Egyptian business, said during the companys annual investor meeting: We have two wells planned to test the idea here later this year. Its a step-change for us.

Status on NW Gemsa and Kom Ombo

Sea Dragon Energy reported that the Al Amir SE No 8 well on the NW Gemsa Concession was spud on May 20. The well at press time was drilling ahead at 3,000 ft. The well is targeting the western edge of the field to be completed as a peripheral water injector. The company said that water injection is expected to commence in late-June and marks the beginning of the water flood project which will result in a significant increase in recoverable reserves and production levels from the field. Sea Dragon also said that geological, geophysical, and engineering work and studies are continuing and this work includes a remapping of the Al Baraka field and exploratory prospects on the Kom Ombo Concession in Upper Egypt. This work will be complemented by the results of other geotechnical studies now underway to firm up locations for the two exploratory wells and the AB-17, AB18, and AB-19 development wells planned for Q4 2011.

Where Has Ghanem Gone?

Austrian leaders said there is no evidence to support claims that Shokri Ghanem, National Oil Corp. (NOC) head and acting oil minister is in the European country, despite his name appearing on the passenger list for a flight that arrived in Vienna on May 19. In mid-May Libyan rebel spokesman, Mohammed al-Menaifi claimed Ghanem defected through Tunisia although Tripoli officials have denied rumors. An Austrian Interior Ministry spokesman said that although the ministers name appeared on the boarding list, it was unclear if Ghanem had actually taken the flight. The oil minister has a valid Schengen visa, affording him the ability to travel within the Schengen zone that includes 25 European countries without being checked and his arrival registered. However, if Ghanem

Melrose Updates Concession Activity

Melrose Resources completed a new 2D and 3D seismic data acquisition program on the South East Mansoura concession in late-2010 with the results confirming the presence of a number of robust structural prospects in the main play fairway. Melrose is finalizing the seismic interpretation with a view to providing an update on the play potential and further details on the prospect selected for drilling in Q3.

Petroleum Africa Magazine June 2011

Africas Big Five

arrived from a non-Schengen country, he would have to be checked even if a visa holder. Sources have also told Petroleum Africa that other ministers from Qaddafis regime, including the Minister of Information, Culture, and Tourism, have also been reported missing since protests escalated. His family found their way to Egypt and then fled to an undisclosed location. ExxonMobil operates as part of a JV with staterun NNPC. By May 23 Nigerian officials reported that ExxonMobil had since expressed a new interest in acquiring leases for these blocks and the issue was on its way to being resolved. future production levels as work is still ongoing to stabilize and optimize long term production rates from the well.

Sirius Gets Serious with Nigerian Acquisition Hunt

Following its admission to Londons AIM in late-March, Sirius Petroleum is once again focusing on an acquisition with a minimum of 20 million barrels in recoverable reserves of Nigerian oil and gas assets. The company said that while it will continue to assess other opportunities if they meet its strict investment criteria, it has already identified several attractive opportunities with valid licenses held by a number of oil majors in relation to potential marginal oil field opportunities in Nigeria. Sirius board of directors is confident that at least one of the fields under consideration will prove to be suitable for it and looks forward to commencing discussions and updating shareholders on progress at the appropriate time. Further announcements will be made when warranted.

Shell Puts Nigerian Assets on Auction Block

Shell is looking to unload some of its Nigerian assets and reports have it that two of the four onshore oil blocks in the Niger Delta that the company put up on offer have been sold. A consortium formed by Kulczyk Oil Ventures and a Nigerian local community won the bid to buy into the OML 42 in the Niger Delta for about $600 million. Another consortium made up of Niger Delta E&P and Petrolin are hoping to become the winners of OML 34 which has oil reserves of around 200 million barrels. In addition, OML 40 went to Elcrest, a JV between independent firm Eland Oil and local company Starcrest.

NIGERIA
BMEs SMART Tagged for Bonga Field
BME UK was awarded a contract for the provision of its Specialized Machinery and Reduced Flow Technology (SMART) on Nigerias Bonga field. Scot Borland, director of BME UK commented, Seven people from Aberdeen will travel to Nigeria to install and operate the SMART equipment. Training provision also forms part of the contract scope and six West African nationals will receive on-site training.

NNPC Tells Exxon Sign Now or Lose OMLs

Various wire reports have it that Nigerias NNPC, as well as the government, gave US supermajor ExxonMobil until May 19 to express its interest in three large licenses. ExxonMobil on its part says that it already has access to these three licenses as a result of a deal entered into in 2009, giving it a long-term renewal on the acreage. According to a report in Nigerian daily THISDAY, petroleum minister Diezani Alison-Madueke, in a letter on March 4, 2011, informed Exxon that the leases remained valid till March 10, 2011, and as such were not subject to renewal on November 25, 2009, when the former minister of State for Petroleum, Odein Ajumogobia, executed the contract for their renewal. In the letter, she advised the company that should the federal government give consideration to renewing the leases, the effective date would be March 11, 2011. The licenses in question are OML 67, OML 68, and OML 70, which

Mart & Partner High on UMU-7 Test Results

Mart Resources, on behalf of its partners, Midwestern Oil and Gas Company Plc (operator of the license) and Suntrust Oil Company Ltd. reported that flow tests were conducted on the four targeted sands: the XIIc, XIV, X, and XVIa sands on the UMU-7 well located in the Umusadege field. The UMU-7 well flowed at a stabilized combined cumulative rate of 10,373 bpd of oil from the four sands tested on choke sizes ranging between 20/64 to 36/64 inches with API gravity ranging from 39 to 47. Following the completion of testing, the well was placed on long-term production from the X and XIV sands at an aggregate initial rate of 3,352 bopd. Mart said that this production rate is not necessarily indicative of

Gasol Strides toward Nigerian Gas Monetization

Gasol entered into an exclusive Project Option Agreement with Moni Pulo in respect of all of the gas contained in Nigerias OML 114. During the exclusivity period, Gasol will have an opportunity to make a proposal to Moni Pulo regarding the development of OML 114, including exploration, development, and offtake. If Moni Pulo accepts the proposal from Gasol, it is then the intention of the parties to work together to conclude definitive gas purchase agreements for development and sale of all of the gas to Gasol. Gasol has commissioned initial pre-feasibility reports which indicate that the available gas could support LNG production of over 800,000 tons per annum for 10 years or fuel a 500 MW power station for 20 years.

Africa at Large
Kenya to See Action from Apache
US independent explorer Apache Corp. may launch its exploration program in Kenya soon. According to the companys COO Rodney Eichler, Kenya is one of two areas that the company is pushing for oil and gas exploration. Apache plans to begin drilling in 2012 in what will be the American E&P companys first foray into sub-Saharan Africa. Eichler said during the companys annual investor day that the Kenyan Block 8 in the Lamu Basin is believed to hold heavy oil and called it a natural extension of discoveries made recently by other companies off Madagascar. And Kenya, he said, offers good fiscal terms to producers. Africa and was eager to get the ball rolling on the project as far back as 2004. Over the past eight years the project received passing interest from companies however, nothing really ever panned out. Terms of a new Kudu Petroleum Agreement were agreed to recently with the Ministry of Mines and Energy and a revised 25-year production license was expected to be issued at any time, but with the pull out of Gazprom, this could be delayed as a scramble for a new partner will likely take place. The partners had already completed the study for the offshore development and were entering into technical integration discussions with NamPower to optimize design concepts of both the offshore development and the Kudu Power Station. In parallel, discussions were underway with NamPower on the gas supply agreements and for the power plant. Tullow recently said that it expected to initiate detailed design of the offshore development in Q2. carried out for the exploration activities on the block.

Anadarko Ready for 3D Offshore Kenya

Kenya is set to see 3D seismic conducted off its coast as results from a 2D seismic survey prove promising. Anadarko Petroleum Corp., operator of five blocks in the East African country, said it is progressing to a 3D survey after encouraging 2D seismic testing results on the blocks. Anadarko has access to L5, L7, L11A, L11B, and L12 in the Lamu Basin and is partnered with Cove Energy and Dynamic Advisors Kenya Ltd.

Nyuni on Fast Track to First Gas

Aminex plc has set a tentative schedule for first gas production from its Nyuni offshore block in Tanzania by early Q1 2012. Production will come from the Kiliwani North development license, to the southeast of the Songo Songo gas field. Mike Rego, exploration director for Aminex, told Petroleum Africa that while the well itself is located at the southern tip of the Songo Songo Island, the development license encompasses a much larger area.

Cameroons Sapele-2 Hits for Bowleven

Bowlevens Sapele-2 well offshore Cameroons Douala Basin, encountered around 35 meters of independently log evaluated net pay in the Omicron objectives, based on the results of drilling and conventional wireline logs. The company expects to launch a testing program, subject to attaining various approvals, on completion of the logging program. Moving forward Bowleven said that a detailed analysis, including test data, will be required to assess the implications of both the Sapele-2 and Sapele-1ST wells on current resource estimates. A testing program is currently underway on Sapele-1ST and the results are expected soon. An update on the Sapele-2 testing program is expected by mid-June.

Gazprom Bails on Namibias Kudu Project

The long-delayed Kudu development in Namibia has taken another hit as the company that was seen as the force needed to push it forward, Russias Gazprom, bailed out on the project. The Kudu gas field has an estimated 2 Tcf of gas and was seen as a way of boosting the countrys extremely beleaguered power generation capacity. The exit of the Russian firm came with little fan fare, with Mines and Energy minister Isak Katali recently confirming Gazproms exit with Namibias New Era. Katali said, we received a letter saying they are not interested because the project did not pass their high-level approval. Gazproms exit is just one of many setbacks the Kudu project has had since the field was discovered in the early 1970s, although some progress was made in recent years. Tullow Oil became involved in Kudu when it acquired Energy

There was a restructuring process at Gazprom a month or two ago and this process led to the decision to withdraw from the Location of Kiliwani North Development License project, Katali said. I am currently arranging to go talk to the higher authority here to see what the way forward would be, Katali stated, adding that Namcor is currently in search of a new partner for Kudu. Justifying its sudden withdrawal from the project, Gazprom told the Namibian government that there was change of management at the company and the new owners did not deem it fit to continue its involvement in Kudu. Gazproms departure leaves a 54% interest in the project available. Rego said Essentially we would like it as soon

Oranto Scores Block in STPs EEZ

Oranto Petroleum, a Nigerian firm, was the big winner in the Sao Tome and Principe (STP) Exclusive Economic Zone (EEZ) licensing round. STPs National Petroleum Agency (ANP) said that the company was awarded Block 3 which covers an area of 4,228 sq km. Orantos award came following the evaluation of all applications submitted, including all necessary due diligence. Within the framework of petroleum legislation in place, a production sharing contract will be negotiated and

as possible, it is scheduled for 2012, but we are planning to bring our gas to the market ahead of the Songas Plant expansion. The company is hoping to construct a pipeline to the Songas Plant. Engineering studies and talks for commercial sales of the produced gas are currently underway. Additionally, contracts for the pipeline construction are in the works. Production from the development, slated to be about 20 Mmscf/d dependent on infrastructure capacity, will be used for both power generation to the national grid and for industrial users. The

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source: Aminex plc

company is in ongoing negotiations for the commercial sale of the gas. The Kiliwani North field was discovered in 2008 and tested at a rate of 40 Mmscf/d and while the company is looking at a rate of 20 mmscf/d once production begins, Rego said its test rate is an indication of what the well is capable of flowing.

seismic data, carry out block-wide G&G studies, and acquire 500 sq km of 3D seismic data. This will result in a minimum gross expenditure of $6.15 million. Following this initial two-year period, the company can enter the second twoyear period by committing to drill a single exploration well.

prospect level. Tower said that a recently identified Albian age reservoir may also be significant. Tower is working on fine tuning the 3D AVO interpretation which is almost complete. The company said that a CPR update incorporating full 3D interpretation is underway and due for completion by the end of June. In Uganda the prospectivity of Block EA5 has been enhanced by the results of an aero gravity gradiometry survey and a probable oil generation kitchen has been identified. The company has also indentified a large high structural area where reservoir quality may be productive. A seismic survey is ready to launch and drilling is expected to take place before the end of the year.

Harvest Spuds Well on Dussafu PSC

Harvest Natural Resources began drilling on the Ruche Marin-A exploration well offshore Gabon on the Dussafu PSC area. This exploration well is being drilled by the Transocean Sedneth 701 semi-submersible drilling unit, and was expected to take about 28 days, finishing up in late May. The Ruche Marin-A well will be drilled in a water depth of 380 ft to test multiple stacked pre-salt targets to a planned total measured depth of approximately 10,100 ft.

Ethiopia Prepares to Close Ogaden Tender

The Ethiopian government said that it expects seven international and domestic companies to bid for oil and natural gas concessions in the restive Ogaden Basin that were previously held by Malaysian firm Petronas. The tender for the concessions closed in midMay and the results are expected to be announced by early June, Ketsela Tadesse, head of petroleum licensing and administration in the Mines Ministry said, during a Bloomberg interview. One of the eight blocks on offer has proven gas deposits of 2.7 Tcf, according to Ketsela.

BG Group Moving Offshore Kenya

BG Group announced that it signed PSCs with the Kenyan government for two offshore exploration blocks L10A and L10B. BG Group will be operator on both blocks and will hold a 40% equity interest in block L10A and a 45% interest in block L10B. The work program consists of a commitment to acquire seismic data during an initial exploration period of two years. Blocks L10A and L10B together cover an area of more than 10,400 sq km in the southern portion of the Lamu Basin, offshore Kenya. The blocks are located in water depths ranging from around 200 meters to in excess of 1,900 meters.

Canadian Overseas Jumps into Liberia

Canadian Overseas Petroleum Ltd. (COPL) signed a deal to acquire an exploration block off the coast of Liberia. The company purchased a 100% stake in Block LB-13 from Peppercoast Petroleum plc for an estimated $85 million. Besides the agreed purchase price, COPL has lent $15 million on a secured basis in order for Peppercoast to satisfy an account payable to TGS-Nopec Geophysical. The funds pay for the acquisition and processing of the 3D seismic survey and should also satisfy Peppercoasts work obligations under the first phase of the production sharing contract for the block. In addition COPL will also acquire 2,200 sq km of 3D seismic data that was shot for Peppercoast in Q1 2010. The company says the purchase price will include between $45 million and $50 million in cash and the remainder in COPL common shares, to be issued directly to the Peppercoast shareholders, and priced at $0.5473 cents per share.

Anadarko Sells Stake in Sierra Leone

Anadarko Petroleum Corp. announced during a conference call that it farmed-down a stake in Block SL-7B-10 offshore Sierra Leone. The US independent sold 10% of its 65% controlling stake to Mitsubishi Corp. The block makeup is now Anadarko as operator with a 55% stake, Repsol YPF with 25%, Tullow Oil with 10%, and Mitsubishi with the remaining 10%.

East Africa Drilling Planned by Africa Oil and Partners

Africa Oil Corp. told attendees at an industry event in Nairobi that it was planning to drill up to eight wells across East Africa in its upcoming drilling campaign set to begin in September. James Phillips, Africa Oils COO, said he had a $43 million budget for the drilling program.

Champion Scores Equatorial Guinea Contract

Champion Technologies secured its first deepwater chemical management services contract in West Africa with an eight-figure deal over the five-year life of the agreement. Under the contract Champion will provide a full suite of chemicals and associated support services for Noble Energys Aseng Field Development project in Equatorial Guinea. The company plans to build a base in Lubas Freeport Zone which will include office space, a fit-for-purpose laboratory, warehouse, and a blending facility. Champion Technologies will assist Noble Energy in tackling the challenges faced in producing, storing, and transporting crude oil that has a high pour point, utilizing some key products from its Flow Assurance portfolio. The project will also involve the use of a deepwater FPSO which is currently located in Singapore and will be heading to Equatorial

Tower Firms Up Leads in Namibia and Uganda

Tower Resources issued its annual report giving an overview of its assets in Namibia and Uganda over the 2010 period. The company was busy in Namibia to good effect as an independent Competent Persons Report (CPR) in mid-2010 confirmed a huge resource potential based on 2D seismic acquired. The company has also completed the interpretation of 3D seismic since the end of 2010 which confirmed clear structural closure, sustained reservoir thickness, and direct hydrocarbon indicators at the main Maastrichtian

Dominion Petroleum the Latest to Land in Kenya

Dominion Petroleum expanded its position in East Africa, picking up a stake in Kenyas offshore Block L9 in the Lamu Basin. The company signed a PSC with the government for a 60% operated stake in the block and is partnered with Avana Petroleum and Flow Energy. Under the PSCs initial two-year exploration period, Dominion will reprocess 2,500 km of 2D

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Africa at Large
Guinea for production due to commence during H1 2012. The partnership make up of the Logbaba Concession is now VOG with 57%, RSM Production Corp. 38%, and SNH with 5%. the blocks prospectivity. Remapping of the seismic is underway, focusing on the Chela formation. The exercise will be concluded during Q3 in order to determine the forward program prior to the end of the initial exploration period.

ADX Gets Extra Time at Chorbane

ADX Energy Ltd. received an extension on the current exploration period for the Chorbane Permit from Tunisian authorities. The permit was extended for one year taking ADXs exploration period into July 2012. Tunisian authorities informed the company during recent meetings in Tunis that the drilling of the Sidi Dhaher well is a priority and the required level of government authority supervision to ensure safe mobilization and efficient drilling operations will be provided. ADX anticipates that the appropriate measures for road clearance, traffic control, and road safety will be available shortly. ADX will continue to prepare for the drilling of the Sidi Dhaher well and provide a further update when a scheduled mobilization date is determined.

SOCO Plans Action in the Congos

SOCO International issued its interim management statement which included an update on the companys activities in the Republic of Congo (ROC) and Democratic Republic of Congo (DRC). SOCO said that preparations are underway to drill up to three exploration wells offshore ROC, with the first well expected to spud in early-September. The initial well will drill for a pre-salt target on the Marine XI Block with estimated pre-drill unrisked mean recoverable resources of 165 million barrels, and should take approximately 45 days to reach TD. The company has secured a rig and it is currently undergoing refurbishment in dry dock. SOCO said that if the first well is successful, an appraisal well is expected to be drilled on the pre-salt target. If not, the final well in this exploration program will be drilled on a Miocene target in the Marine XI Block with 70 million barrels of pre-drill mean unrisked recoverable resources. In the DRC the security review over Block V in the Albertine Rift is ongoing. A final environmental impact assessment (EIA) was submitted to the Groupe dEtudes Environnementales du Congo in May. SOCO said that the Block V project can be progressed into the seismic acquisition stage over Lake Edward once approval of the EIA report by the government is received. The company anticipates the review of the EIA report to be concluded prior to the beginning of Q3. The company also said that further evaluation of the Nganzi Block, onshore DRC, is being undertaken, incorporating information gathered in its 2010 drilling program to better understand

DRC: Lotshi Resource Report In

EnerGulf Resources Inc. received an assessment of the Prospective Resources on its Lotshi Block in the Democratic Republic of Congo (DRC) from DeGolyer and MacNaughton (D&M). The report concluded that the prospective resources in seven oil prospects, as of December 31, 2010 had a mean estimate of 313,176 10 bbls (thousands of barrels). The D&M report did not include the potential resource contribution from any reservoirs above the Loeme Salt, or from the Chela dolomite. The Chela dolomite is the main reservoir in the giant Rabi-Kounga field in Gabon and in smaller fields nearby in Cabinda. There have also been shows reported in the Chela in other wells near the Lotshi Block, but the stratigraphic position of the Chela directly underneath the Loeme Salt make it a difficult target to map seismically.

Logbaba Development Receives Presidential Decree

Victoria Oil & Gas (VOG) received the award of an Exploitation License for the development of the Logbaba gas and gas condensate field onshore Cameroon. The award came following extensive due diligence carried out by the state oil and gas company Societe National des Hydrocarbures, (SNH), the Ministry of Industry, Mines & Technology, and the Offices of the President of Cameroon. The exploitation rights cover the entire 20 sq km development area applied for by VOG and extend its rights for 25 years with an option to add a further 10 years. In addition, under the terms of the Logbaba Concession Agreement signed in May 2001, SNH will exercise its right to participate in the Logbaba Concession, and will pay its share of development costs.

JDZ Block 2 Extension for Sinopec and Partners

ERHC reported that the Nigeria-So Tom & Prncipe Joint Development Authority (JDA) approved a 12-month extension to Exploration Phase I Joint Development Zone (JDZ) Block 2. The JDA approval of extension is subject to final approval by the Nigeria-So Tom & Prncipe Joint Ministerial Council. Negotiations on the exploration program in JDZ Blocks 3 and 4 continue between the JDA and the contracting parties, led by Addax Petroleum. ERHC holds a 10% working interest in JDZ Block 3 and a 19.5% working interest in JDZ Block 4.

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Around the World

AMERICAS
Production Starts for Shell in Canada
Shell announced the start of production from its Scotford Upgrader Expansion project in Canada, producing 255,000 bpd of heavy oil from the Athabasca oil sands. The 100,000 bpd expansion allows engineers to focus on improving operating efficiencies and adding capacity through debottlenecking. Shell Canada Energy is 60% owner and operator of the Athabasca Oil Sands Project (AOSP) along with Chevron Canada Ltd. (20%), and Marathon Oil Corp. (20%). The AOSP includes the Muskeg River Mine, Jackpine Mine, and Scotford Upgrader.

additional high-quality resources with strong growth potential, according to Chevron North America Exploration and Production Co. president Gary Luquette.

after which they will be flow tested in preparation for a resource booking in July/August 2011. Both Holdfast-1 and Encounter-1 are data gathering wells and as such are not designed to flow at levels expected of a production well. The design of pilot production wells will be based on information gathered from the flow stimulation of, and earlier core samples retrieved from, Holdfast-1 and Encounter-1. The timing of these pilot production wells will be primarily driven by equipment availability, and as such, it is anticipated that the pilot production program will now commence early in 2012.

Brazilian FPSO Gets Siemens Topside Solutions

Siemens Energy was awarded several contracts from Singapore-based Jurong Shipyard Pte Ltd. and Wasco subsidiary, Gas Services International Pte Ltd., to supply topside solutions covering power generation, water injection, and power distribution packages for a FPSO in Brazil. The FPSO will also be equipped with water injection facilities in order to boost oil recovery from the reservoirs. Siemens will supply the key elements for this system in skid format, including the sulfate removal membrane, SRU feed pumps, chemical cleaning, and reverse osmosis. The water injection system will be designed to handle 638 cubic meters per hour. The FPSO Cidade de Itajai will have a production capacity of 80,000 bpd of oil and a storage capacity of approximately 650,000 barrels. The FPSO is expected to be in operation by summer 2012, producing from the Tiro and Sidon fields located in the south Santos basin.

CGGVeritas Completes Brunei Seismic

CGGVeritas completed a BroadSeis seismic survey in Brunei Darussalam for Brunei Shell Petroleum Company Sdn. Bhd. (BSP). BroadSeis, the new CGGVeritas broadband marine solution, combines Sercel Sentinel solid streamers, a unique variable-depth towing configuration and a proprietary deghosting, and imaging algorithm. The program comprised a number of 2D lines located in deepwater and combined BroadSeis technology with a bigger source array and a long streamer. CGGVeritas acquired the survey on the block operated by BSP and in cooperation with Total E&P Deep Offshore Borneo B.V.

Quest Completes Deepest Shale Wireline in US

Canadian company Quest Coring completed the first 90-ft wireline in a shale gas reservoir in the US using its QuickCore technology, reducing the amount of time it takes to cut core by more than half. The tool is designed to bridge the gap between 90-ft conventional coring and 30-ft wireline coring tools that are generally inefficient for shale gas environments. The technology has been used in 15 projects spanning across the US and Canada and the company plans to further its prowess into the UK, European, Middle Eastern, and Asian Pacific markets.

AUSTRALASIA
BP to Invest Major Money in Indonesia
BP will invest $10 billion in Indonesia over the next 10 years, according to the countrys investment agency chief Gita Wirjawan. The group will begin to explore the Kalimantan to bring its coal bed methane resources online, as well as continue its development of the Tangguh LNG project. The Kalimantans main hydrocarbon area is in the east with the Kutei Basin and the Tarakan Basin, where its first commercial discovery was made in 1971. The Tangguh LNG is the third LNG hub in Indonesia which includes six fields to extract combined proven reserves of around 14.4 Tcf.

Tap Oil Divests in Western Australia

Tap Oil Ltd. will sell a 25% interest in its WA-351-P exploration permit in Western Australias Carnarvon Basin. Japan Australia LNG Pty Ltd. will acquire the stake for about $30 million with Tap expecting to net $26 million. In addition, Japan Australia will pay Taps 20% share of the next exploration well in the permit up to a cap of $10 million. Tap is reducing its holding in the exploration permit from 45% to 20% with operator BHP Billiton Petroleum Pty Ltd. retaining a 55% interest.

BP Gets 10 E&P Blocks in Brazil

BP received final approval to purchase 10 exploration and production blocks in Brazil from Devon Energy. The blocks acquired will give BP a diverse and broad deepwater exploration acreage position offshore Brazil with interests in eight license blocks in the Campos and Camamu-Almada basins in water depths ranging from 330 ft to 9,100 ft. The company will also pick up two onshore licenses in the Parnaiba basin.

EUROPE/CIS
Exile Resources Has Certain Licenses in Turkey Revoked
Exile Resources Inc. was notified that Aladdin Middle East Ltd.s (AME) five Rubai exploration licenses (2759, 2598, 2599, 2600, and 2601) in southeast Turkey were cancelled by the General Directorate of Petroleum Affairs of the Republic of Turkey as a result of missing drilling deadlines. Exile farmed-in to the Rubai Licenses with the company expected to earn its 35% equity by

Beach Energy to Flow Shale Chevron Acquires more Shale Acreage in the US
Chevron Corp. has acquired oil and gas assets in the Marcellus Shale, located in the US state of Pennsylvania, from Chief Oil & Gas LLC and Tug Hill, Inc. Terms of the transaction have not been disclosed, but the 228,000 net leasehold acres will help the company expand its shale gas portfolio giving it Beach Energy Ltd. will commence flow stimulation of its Holdfast-1 shale well in early June, which will be followed immediately by the flow stimulation of the Encounter-1 shale well. In preparation for flow stimulation, the Holdfast-1 well has been successfully completed and the Encounter-1 wells completion was expected shortly thereafter. The flow stimulation process may take up to two weeks for each well,

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Around the World

mid-2011. The company had spudded the Bostanci-1 well on April 24 on License 2600, but with recent events, drilling was suspended and the well is in the process of being temporarily abandoned. At the time of press, there were no updates but Exile executives were said to be in discussions with the Turkish government to resolve the issue. main engines and generating sets, the electrical power and propulsion systems, integrated automation, and the power management system. The selection of Wrtsils dual-fuel (DF) technology enables operation on marine diesel oil if required. of the countrys oil ministry. Ahmadinejad reduced the number of ministries from 21 to 17, and according to the leader in an interview to local news stations, it was based on a legal duty and structural obligation. The Iranian leader will also forego attending the Organization of Petroleum Exporting Countries (OPEC) meeting on June 8 in Vienna. An Iranian oil ministry official, Shojaeddin Bazargani, told news sources that Ahmadinejad would assign someone to represent the country to attend OPECs joint session with the EU.

TWMA, Total Extend North Sea Deal

Environmental waste management contractor TWMA was awarded a $6.4-million contract extension for two additional years by Total E&P UK Ltd. for continued drilling-waste management services in the UK North Sea. The N-class newbuild drill unit will commence a two-well UK offshore drill program for development drilling in the Elgin field, followed by the planned drilling of the Corfe prospect, south of Elgin. Under the extended deal, TWMAs TCC RotoMill thermal processing technology will process and recycle cuttings alongside the firms Cuttings Containment and Distribution System.

Azerbaijan Ratifies PSA between BP and SOCAR

Azerbaijan ratified the new PSA between BP and SOCAR for joint exploration and development of the Shafag-Asiman structure in the Azerbaijan sector of the Caspian Sea. Under the PSA, which is for 30 years, BP Exploration (Azerbaijan) Ltd. will be the operator with a 50% interest while SOCAR will hold the remaining 50% equity.

Bahrain Looks to Invest $20 Billion in Hydrocarbons

Bahrain is geared to infuse $20 billion into its oil and gas sector over the next 20 years with the majority used for potential wells and upgrading the Bapco refinery, according to energy minister Dr. Abdulhussain Mirza. Tatweer Petroleum will receive $15 billion to drill 3,600 new oil wells while $6 billion will be earmarked for the Bapco refinery. Mirza said that a plan was also set to dig deeper than ever before for natural gas and a $420-million lube base oil project between National Oil and Gas Authority, Bapco, and Finlands Neste Oil was almost complete and set to begin operations.

Tullow Ups Dutch Ops with Nuon E&P

Tullow Oil plc entered into an agreement to acquire Nuon Exploration & Production for 300 million from the Vattenfall Group. The acquisition of Nuon E&P, expected to be complete by July, will significantly enhance Tullows North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development, and exploration opportunities and ownership of key infrastructure. This portfolio will increase the Groups North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe.

MIDDLE EAST
Gulf Keystone Spuds Kurd Appraisal Well
Gulf Keystone said that the Shaikan-4 deep appraisal well was spudded on the Shaikan block in the Kurdistan region of Iraq. It is the second deep appraisal well to be drilled after the companys significant Shaikan-1 discovery. Shaikan-4 is being drilled 6-km to the north-west of the Shaikan-1 discovery well and is targeted to drill to the top of the permian to reach the planned TD of approximately 3,760 meters. Gulf Keystone is the operator of the block with a working interest of 75%, and partnered with Texas Keystone Inc. and Kalegran Ltd.

Jordan Signs MoU with Russian Firm for E&P

The Jordanian government signed a MoU with state-owned Russian oil and gas joint stock company Zarubezhneft for oil exploration in Jordans Jafr region. The agreement has the Russian firm conducting a study of the available technical, geological, and geophysical data over 10,416 sq km before submitting a report to the government about the potential for oil. The six-month agreement, which can be extended for another three months, was signed by the director general of Jordans Natural Resources Authority, Maher Henazine, and Zarubezhneft deputy director general Victor Gorshenev.

Wartsila Wins Norwegian Contract from Kleven Maritime

Kleven Maritime has contracted Wartsila to design a new LNG-powered platform supply vessel (PSV) for Norwegian operator Rem Offshore. The contract includes the propulsion machinery, automation, and other vessel equipment. Rem Offshores new LNG-powered PSV, the first such vessel for its fleet, will be a Wartsila Ship Design VS499 LNG PSV. Wartsilas scope of supply for the new PSV includes the dual-fuel

Ahmadinejad Takes over Irans Oil Ministry

Iranian president Mahmoud Ahmadinejad made significant changes to his cabinet in mid-May, merging some ministerial positions, dismissing other ministers, and taking on the management

Downstream News
Connecting Ugandan Crude to Rwanda and Burundi
Plans are in the works to connect Rwanda and Burundi with Uganda by pipeline in an effort to boost the energy security of the two central African countries. The plans for the pipeline were revealed by Patrick Nyoike, Kenyas energy ministry permanent secretary in a statement. Nyoike said in the statement that the East Africa Community (EAC) had obtained a $600,000 grant from the African Development Bank to finance a feasibility study on the proposed pipeline between Kigali and Bujumbura. The pipeline will be a boon to both countries once Uganda brings its oil production online. Uganda has said it will construct a refinery as a public-private project to process its crude and will need about $2 billion to finance the facility. The plan is to link Kigali by a pipeline from Kampala, which will allow petroleum products to be accessed from the planned refinery in Kampala as well as the existing refinery in Mombasa and international markets, Nyoike said. The planned pipeline between Kampala and Kigali would then be extended to the Burundian capital, Bujumbura. and with its storage tanks full, it will weigh around 600,000 tons. Shell will progress the Prelude FLNG project at a rapid pace, with first production of LNG some ten years after the gas was discovered, expected online in 2017. Once operational, the FLNG will tap into about 3 Tcf equivalent of resources contained in the Prelude gas field. Some 110,000 boepd of expected production from Prelude should enable the vessel to process at least 5.3 million tons per annum (mtpa) of liquids, comprising 3.6 mtpa of LNG, 1.3 mtpa of condensate, and 0.4 mtpa of liquefied petroleum gas. Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop, said Malcolm Brinded, Shells executive director, Upstream International. Our decision to go ahead with this project is a true breakthrough for the LNG industry, giving it a significant boost to help meet the worlds growing demand for the cleanestburning fossil fuel. The FLNG facility will stay permanently moored at the Prelude gas field for 25 years, and in later development phases should produce from other fields in the area where Shell has an interest. said. The secondary traded market could become a reality if it is supported by international interconnection. The muted demand from the industrial sector is a result of the recession, while in the generation sector, the fuel has been marginalized by increased wind generation and now by the governmentmandated minimum stake in the mix for Spanish coal, finally implemented in March.

Reports Vary on Libyan Rebel Crude Exports

At the beginning of May, a statement by Ali Torhoni who is in charge of Libyas economy and energy portfolio under the opposition administration, said exports of Libyan crude from production centers held by the rebels will not resume any time soon. Torhoni said that the groups main focus now was to ensure that oil installations remained secure against incursions from loyalist fighters. Im waiting for an assessment on all of the oil installations (in rebel-held territory), he said. The top priority is to protect the installations, not to produce. Meanwhile, the opposition are reported to have sent out a few cargos of crude and the US government gave the go ahead for US firms to conduct business with the rebels. In mid-May reports surfaced that the Libyan opposition had made a deal with oil trader Vitol which had the company lifting a cargo of naptha from the rebelheld Tobruk port. According to wire reports, the cargo was loaded at the end of April. Vitol declined to confirm the report.

Sinai Pipeline Explodes Again

A second act of sabotage took place in Egypt on the natural gas pipeline that ships gas to countries such as Jordan and Israel. According to local officials the pipeline exploded on April 25. Sinai governor Abdul Wahab Mabrouk told state TV that the explosion was an act of sabotage and stressed there were no reported casualties. The fire was extinguished after the gas flow into the pipe was stopped. The explosion is the second the pipeline has suffered since Egypts revolution took place over late-January and early-February.

JX Nippon Enters SPA for Gorgon LNG

Chevron Corp.s Australian subsidiary has signed a Sales and Purchase Agreement (SPA) with JX Nippon Oil and Energy Corp. to take a portion of the US majors offtake of LNG from the Gorgon Project. Under the agreement, JX Nippon will receive 0.3 mtpa of LNG from the Gorgon Project for 15 years. The initial Gorgon Project development, situated in northwestern Australia, will include a three-train, 15 mtpa LNG facility, and a domestic gas plant.

Foster Wheeler to Supply CFBs to Chinese Project

A subsidiary of Foster Wheelers Global Power Group has been awarded a contract by Zhejiang Jiahua Industrial Park Investment & Development Co. for the design and supply of three circulating fluidized-bed (CFB) steam generators to meet rapidly increasing steam demand at China Chemical and New Material Park (Jiaxing) in east Chinas Jiaxing city, Zhejiang Province. Foster Wheeler will design and supply three 100 MWe (gross megawatt electric) CFB steam generators plus auxiliary equipment and provide site advisory services for the project. The CFB steam generators will be designed to burn coal while meeting all environmental requirements. The company has already received a full notice to proceed on this contract. The terms of the agreement were not disclosed, however the

Medgaz to Run at Half Capacity FID in on Shells FLNG Project

Shell has taken the final investment decision (FID) on the Prelude Floating Liquefied Natural Gas (FLNG) Project offshore Australia. The decision means that Shell is now ready to start detailed design and construction in a ship yard in South Korea, of what the company says will be the worlds largest floating offshore facility. From bow to stern, Shells FLNG facility will be 488 meters long, and will be the largest floating offshore facility in the world longer than four soccer fields laid end to end. When fully equipped Cepsa reported that the Medgaz pipeline out of Algeria will most likely run at half-capacity for the next few years due to the reduced consumption of natural gas in Spain. Antonio Melcon, supply manager at Cepsa, speaking at the FLAME gas conference in Amsterdam said that the reduction in natural gas use came from the industrial sector. Melcn also predicted that Medgaz would help with the creation of a traded Spanish market. We think Medgaz will favor the creation of a secondary traded market in Spain a hub, he

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contract value will be included in Foster Wheelers Q2 bookings. Commercial operation of the new steam generators is scheduled for Q4.

Sasol Selects EPCm Contractor for Tetramerization Plant in US

Sasol has selected S&B Engineers and Constructors for the EPCm contractor to construct its ethylene Tetramerization plant at Lake Charles, Louisiana. The plant will utilize Sasols proprietary technology to convert ethylene to 1-octene and 1-hexene, a process developed in the companys R&D laboratories in South Africa. The process selectively produces alpha olefins required for the high growth polymer markets. Engineers and scientists from Sasol North America (SNA) participated with an international team to design the unit, which will utilize the new technology on an industrial manufacturing scale.

HIMA to Aid BP with Refinery Safety

HIMA has entered into a five-year agreement with BP Products North America, Inc. to provide its Safety Instrumented Systems (SIS) and Functional Safety Services to BPs five North American refineries. The agreement is based on HIMAs TVcertified HIMax safety platform, its SILworX configuration, programming, and diagnostic software suite and associated Functional Safety and Engineering services, which under the agreement will be available to all five of BPs North American refineries. The HIMA safety systems will allow BP to standardize safety design, implementation methodology, and compliance documentation, which will help to enhance its safety infrastructure by creating an efficient model that can be easily replicated.

LNG Train 2 Expected for Equa G

Serapio Sima Ntutumu, deputy director general of Equatorial Guineas Sonagas, took the stage at the World LNG Series, Americas Summit put on by the CWC Group in San Antonio, TX, giving an overview on the West African countrys plans for its significant natural gas assets and its role as a global supplier of LNG. Ntutumu said that a memorandum of understanding was signed in May to align upstream and downstream operators to build Train 2 at the Equatorial Guinea LNG (EGLNG) facility. He added that the final investment decision is expected in 2012 and first production envisioned for 2016. Train 2 is expected to have a 4.4 mtpa capacity. Equatorial Guineas first shipment of LNG hit the high seas in May 2007 headed for the US. Since start up of the first train, Equatorial Guineas LNG promised to play an increasingly important role in meeting the growing energy needs of not only the Atlantic Basin, but the rest of the world. The Train 1 facility operated at 95% reliability in 2009 and this high level of reliability, coupled with innovative debottlenecking, increased production to 3.9 mtpa of LNG in 2009. There has been on and off talk of a second train since the start of production, with feedstock potentially coming from Cameroon and Nigeria. Since then the country has made a number of discoveries with deputy minister of Mines and Energy Gabriel Lima saying that the countrys reserves had doubled in October 2009. We have the good problem of having more gas in Equatorial Guinea than we thought, Lima said. We have had to go back and redo all the figures in the master plan.

FID for Brass LNG

As the date for the inauguration of Nigerian president Goodluck Jonathan closes in, key projects in the downstream sector are set to see some action. Jonathan was to officially take the oath of office in his first full term as president on May 29, however, before that one of the LNG projects on Nigerias books should see a significant decision pushed through. On the sidelines of CWC Groups World LNG Series, Americas Summit an official from Nigeria told Petroleum Africa that the Brass LNG facility would see its FID taken prior to the new regime taking office on May 29. Brass LNG has been on the books for some time but has floundered a bit over the years, until recently that is. In Q4 it was reported that the FID would be made in Q1 of this year and while it is a month or so late it may finally be made. The $8 billion plus LNG facility will be built at Brass in Bayelsa states Niger River delta. The state-owned Nigeria National Petroleum Corp. has a 49% stake in Brass LNG and is partnered with Total, ENI, and ConocoPhillips who each hold 17% stakes. In December the Nigerian government announced plans to cede a 10% stake in the project to the local community as part of its plan to bring host communities in on the development of projects.

Power & Alternatives

Malta: Connecting North Africa to the EU via Electricity Cable
Malta has put itself in the running to become the hub for the cable that would transport electricity between North Africa and the European Union as part of the Desertec Industrial Initiative (DII). The countrys minister of Finance, Economy, and Investment Tonio Fenech made the proposal at the 8th Euromed Ministerial Conference on Industrial Cooperation. Malta is uniquely positioned to share its technical experience since such agreements were specifically designed for Malta prior to EU membership, the Minister indicated. Malta has been ramping up its renewable energy efforts and has even explored other investment opportunities in North African countries like Tunisia. The EU-member archipelago is situated 93 km south of Sicily and 288 km east of Tunisia, so its strategic location and RE initiatives make it a viable option to become the meeting point of the Sahara solar scheme transmission cable from North Africa to the mainland EU member states. to Transparency International (TI). The corruption watchdog group released a new study, Global Corruption: Climate Change, that suggests the countrys national strategy to incorporate 20% of renewable energy sources into its total energy generation will be more difficult. The report includes a section pertaining to solar and wind energy in North Africa, saying that dubious actions could be discouraging much needed private investment. [Foreign] investment often does not occur because of complex and lengthy bureaucratic procedures and uncertainty as to whether public officials will expect bribes, says the chapter, authored by Nadejda Komendantova and Anthony Patt. The World Bank noted in 2008 that 45% of the companies involved in foreign direct investment (FDI) in Egypt found the levels of corruption to be a major deterrent. On April 17, Egypts former prime minister and two other cabinet members were charged with corruption in the countrys latest campaign to bring officials from the Mubarak regime to justice. The ex-prime minister and cabinet members are accused of giving a German businessman a deal to sell license plates without allowing a public tender as required by law. Prior to this allegation, Hosni Mubarak and his sons were detained for a 15-day period under an investigation on corruption charges and deaths of hundreds of protestors. However, the TI study notes that the dishonest practices affect all sectors including renewable energy. A failure to address corruption will result in higher quantities of investment being required for concentrated solar power (CSP) deployment in North Africa... Another [result] is that investors will simply seek other regions for investment, the chapter concluded. Egypt had hoped to obtain $110 billion of investment to be allocated toward its energy sector by 2027 with ambitions of reaching 7,200 MW of wind energy capacity by 2020. However, with a new leader on the horizon as elections are scheduled for later this year, many are optimistic that the depth of this problem will be minimized, in comparison to the previous ruling party. It is going to take longer than a few months to restore faith in Egypts markets and undoubtedly, investors are going to watch initial investment enticements with caution before jumping into the mix.

Fast Tracking the Rusumo Hydropower Project

Officials from Rwanda, Burundi, and Tanzania met in Kigali to discuss the fast track implementation of the Rusumo hydroelectric power project which will add 90 MW to the three countries power generation capacity. The project is expected to come online in 2012. The transmission lines will span from Rusumo to Gitega in Burundi, Kigali to Kabarondo, and Biharamuro in Tanzania. Rusumo power project is one of the priority energy projects that will benefit the people in the region by providing them with cheap energy, Adam Malima, Tanzanias minister of Energy and Minerals, said.

Egypts Power Sector Overshadowed by Corruption

As Egypt struggles to meet its growing power generation needs with the use of natural gas, its biggest natural resource for power is being threatened by corruption. The country has vast natural gas deposits, which could fuel its development through export dollars; however, its growing domestic consumption has led to a halt in new exports. The country has huge potential in the alternative energy department such as solar and wind power, but the corruption taint could slow Egypts clean power generation capacity growth. Despite the recent change in leadership in the North African country, Egypt still has a long way to overcome corruption which could threaten its energy sector, according

US Firm Buys Tanzania Power Plant

Symbion Power acquired a 120-MW thermal power plant in Tanzania. The Ubungo plant has been sitting idle for roughly three years, despite the continuous struggle the country faces keeping the lights on. The plant was previously owned by Dowans Tanzania Ltd.

Paul Hinks, CEO of the company said The negotiations with the former owner have been challenging and, as a consequence of past reports, we have undertaken extensive due diligence. This due diligence also encompassed the thorough examination and testing of the equipment to ensure that it is in excellent condition. The results have been positive; the plant has been very well maintained. Hinks went on to say, It gives me great pleasure to be able to move to the next phase which is to offer electricity to TANESCO and to the people of Tanzania at a time when load shedding and disruption to consumers is worsening. The 120 MW that this plant can deliver would have a significant impact on the power situation in Tanzania. Hinks continued, We want to keep the plant in Tanzania, but if TANESCO does not wish to utilize our services, we have other opportunities for its use overseas. This is a mobile plant that can be moved easily. The company has extensive electrification contracts in Tanzania that are funded by the US government through the Millennium Challenge Corp. Symbions work encompasses the construction of 3,000 km of overhead power lines and 26 substations in eight regions across Tanzania and Zanzibar.

he hoped this project would lead to further collaboration in the energy sector through its Korea International Cooperation Agency (KOICA).

Aggreko Debuts New Short-Term Power Generator

Aggreko has introduced a new 1,300-kW natural gas generator into its North American fleet, which will allow companies an option for shortterm power generation. The new addition to Aggrekos power generation equipment uses a smokeless output and a save-all containment base to reduce the risk of fluid leakage. A modular design, standardized in 20 ft ISO containers, allows for easy transportation and flexible installation. Units can be installed in a matter of days, often hours, without the need for large capital expenditures.

Joburg Nears First Production from Waste-to-Energy

Reports from Johannesburg have it that the citys first project to produce electricity from landfill gas was expected to be fully operational by the end of May. In addition, four other sites are planned to follow which would give a substantial boost to South Africas job market. The first plant will generate about 19 MW of electricity for 15 years, and will also help Johannesburg earn carbon credits through the UNs clean development mechanism (CDM) process.

Energy Storage Products Coming to SA

US-based company Powin Corp. has formed a JV with a Chinese manufacturer, Shandong RealForce Enterprises Co. Ltd., to market and distribute a line of energy storage products across North America and South Africa. Powin Corp., started by Chinese-American Joseph Lu, said its new JV could add 10% to the companys annual revenue this year. The JV, dubbed RealForce-Powin LLC, will be based in Tigard, Oregon manufacturing lithium-ion batteries, storage batteries, energy storage power plants, solar cells, and other related products across the US, Canada, Mexico, and South Africa.

Cairo Electrified by Korea

The closing ceremony for the project for developing and automating the electricity distribution system in north Cairo was held the first week in May as part of the South Korean governments development cooperation program for Egypt. The Asian nation has been working with the Egyptian government over a two-year period to help improve the quality of Egypts power generation in one of the most congested areas in Cairo. The power scheme includes a pilot distribution automation system that can automatically detect faults and remotely operate field devices. The South Korean ambassador to Egypt, Yoon Jong-Kon, said that

Market Movers E&P COMPANIES

Top Performers
Company Symbol Exchange Currency Price as of May 24 1 Month % Change 52-Week Range

companies which have participating interests in the Dharoor Valley and Nugaal Valley production sharing agreements (PSAs) in Puntland. Africa Oil will receive, in consideration of the transfer, 27,777,778 common shares of Denovo. As a result of the transaction, the Puntland subsidiaries will become wholly owned subsidiaries of Denovo, which will change its name to Puntland Petroleum Corp. The definitive agreement will contain representations and warranties between the parties that are customary for transactions of a similar nature. Currently Africa Oil holds a 45% participating interest in the Puntland PSAs. Upon completion of the Lion Energy Corp. acquisition, Africa Oils participating interest will be increased, directly or indirectly, to 60%. It is anticipated that the entire 60% participating interest will be transferred to Denovo. Africa Oil is currently in the process of planning a two-well exploratory drilling campaign in Puntland, with the first well planned to spud in Q3 2011. Drilling locations have been selected and a LoI has been signed with a drilling subcontractor. Keith Hill, president of Africa Oil Corp., said The creation of Puntland Petroleum allows Africa Oil Corp. to keep a large working interest in a highly prospective exploration project and also provides the necessary capital to pursue an aggressive drilling program. We are in advanced planning stages of a two well drilling program which will drill the first well in a basin that appears to be directly analogous to the rift basins

Gasol Europa Oil and gas Madalena Ventures Maurel et Prom El Paso Corp.

GAS.L EGO.L MVN.V MAU.PA EP

LSE LSE CDNX Paris NYSE

GBP GBP CAD EUR USD

1.20 23.50 0.67 15.05 20.22

33.3 23.6 21.8 6.0 4.8

0.70 - 1.70 10.00 - 42.50 0.19 - 1.12 8.51 - 16.85 10.60 - 21.54

Worst Performers
Company Symbol Exchange Currency Price as of May 24 1 Month % Change 52-Week Range

Premier Oil Groundstar Resources Mediterranean Oil & Gas Bounty Oil WHL Energy

PMO.L GSA.V MOG.L BUY.AX WHN.AX

LSE CDNX LSE ASX ASX

GBP CAD GBP AUD AUD

467.40 0.27 10.63 0.03 0.03

-76.6 34.1 26.9 -25.0 -25.0

248.75 - 535.50 0.23 - 0.75 8.00 - 37.00 0.03 - 0.13 0.01 - 0.05

The companies making it to the Top Performers list were the top five out of only seven E&P companies to post on the positive side for the period, of those that we track. Gasol came in as the number one performer, with its shares rising steadily over the period. Europa Oil & Gas and Madalena Ventures both climbed their way off the bottom of the Worst Performers list to come in second and third respectively. There were two newcomers to make the top chart this period Maurel et Prom and El Paso Corp. On the losing side, the company coming in as the Worst Perfomer, Bounty Oil, posted a 76.6% drop though the negative can be atributed to a 4-1 stock split. Prior to the stock split the company was only down a few percentage points. Groundstar Resources maintains its stay on the bottom of the charts, extending its loss from last period. The list was rounded out with Australian firms Bounty Oil and WHL Energy, who both posted a 25% loss.

Kosmos Goes Public

Kosmos Energy has priced its IPO of 33 million shares at $18.00 per share. The companys common shares began trading on the NYSE on May 11 under the ticker symbol KOS. Kosmos holds stakes in acreage in Cameroon, Ghana, and Morocco. The underwriters of the IPO have the option to purchase from Kosmos Energy up to an additional 4.95 million common shares, on the same terms and conditions, to cover overallotments, if any. Citi, Barclays Capital and Credit Suisse are acting as joint bookrunning managers of the offering. The company is just now seeing income from its efforts in Africa with the start of production from the Jubilee Field offshore Ghana. Its asset portfolio in Ghana consists of seven discoveries including the Jubilee Field, which was one of the largest oil discoveries worldwide in 2007 and the largest find offshore West Africa in the last decade.

company will be created as a result of the transfer of Africa Oils interest in its oil and gas properties in Puntland, Somalia to Denovo. Under the terms of the LoI, Africa Oil and Denovo will negotiate and enter into a definitive agreement pursuant to which Africa Oil will transfer to Denovo all of the issued and outstanding shares of its subsidiary holding

MAJOR E&P COMPANIES

Top Performers
Company Symbol Exchange Currency
Price as of May 24 1 Month % Change

52-Week Range

BP Chevron Gaz de France

BP.L CVX GSZ.PA

LSE NYSE Paris

USD USD EUR

456.40 102.27 25.67

-0.9 -5.4 -5.4

296.00 - 658.20 66.83 - 107.01 22.64 - 30.05

Worst Performers
Company Symbol Exchange Currency
Price as of May 24 1 Month % Change

52-Week Range

BG Group ConocoPhillips Royal Dutch Shell

BG.L COP RDSA.L

LSE NYSE LSE

GBP USD GBP

1,376.50 71.91 2,119.00

-10.0 -10.0 -6.4

995.20 - 1,741.50 41.06 - 81.80 1,621.00 - 2,377.00

Africa Oil Creates Puntland Petroleum

Africa Oil has entered into a LoI with Denovo Capital Corp. for the creation of a new Puntlandfocused oil exploration company to be aptly named Puntland Petroleum Corp. The new

There were no majors on the positive side of the charts although the losses for the most part (as in the other categories) can be attributed to dividends paid during the period. Coming in at the top of the list, which for this period means the least drop in share price, is BP. The company saw its shares drop a miniscule 0.9% for the month. Both BG Group and ConocoPhillips came in 10% down, with Royal Dutch Shell rounding out the bottom with a 6.4% loss.

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Petroleum Africa Magazine June 2011

Market Movers DRILLING & SERVICE COMPANIES

Top Performers
Company Symbol Exchange Currency Price as of May 24 1 Month % Change 52-Week Range

Heritage Launches Arbitration against Ugandan Government

Heritage Oil & Gas said that it initiated arbitration against the Ugandan government for the release of, among other things, the $405 million currently held by the Ugandan Revenue Authority (URA) in escrow with Standard Chartered Bank following the companys sale of its interests in Blocks 1 and 3A in Uganda on July 26, 2010. On completion of the sale of its interests in Block 1 and Block 3A, Heritage received and retained $1.045 billion. An additional $405 million (approximately) of the purchase price, was in part deposited with the URA and in an escrow account pending resolution of a tax dispute with the URA. The company says it wants the money released based on advice received from tax experts around the world, including Uganda, as the sale of its stakes should not be taxable in Uganda. Accordingly, the arbitration proceedings concern its claims that the Ugandan government wrongfully or unreasonably withheld consent to the sale by Heritage of the rights under the PSAs for the two blocks, including making this consent conditional upon the payment of a sum alleged to be a tax liability. The arbitration proceedings will be held in London in accordance with the provisions of the PSAs in relation to Block 1 and Block 3A.

Newpark Resources CGGVeritas Petrofac Bronco Drilling Subsea 7

NR GA.PA PFC.L BRNC SUBC.OL

NYSE Paris LSE NYSE Oslo

USD EURO GBP USD KNR

8.77 25.00 1,528 10.99 138.45

20.4 5.6 0.6 -0.2 -0.7

5.12 - 10.00 12.93 - 27.79 1,101 - 1,697 3.25 - 11.63 88.55 - 163.80

Worst Performers
Company Symbol Exchange Currency Price as of May 24 1 Month % Change 52-Week Range

Global Industries ION Geophysical Cal Dive Wilbros Group Nabors Industries

GLBL IO DVR WG NBR

NYSE NYSE NYSE NYSE NYSE

USD EURO USD USD USD

5.90 9.00 6.26 8.82 26.97

-39.6 -27.5 -21.7 -17.8 -15.5

4.05 - 10.23 3.26 - 13.92 4.48 - 8.15 6.80 - 12.55 15.54 - 32.47

Drilling and services companies had a lackluster performance over the period to say the least, although the timing of quarterly reporting and the issuance of dividends could have contributed to the rash of negative performances. Newpark Resources was the Top Performer for the period, and one of only three companies to come in with a positive performance. CGGVeritas pulled itself off the bottom of the charts reversing its loss last period to see a gain of 5.6%. Petrofac was the last of the companies to see a gain, although it was only a negligible 0.6%. Cal Dive was another company that reversed its position from last months rankings, dropping off the top of the chart to come in with a 21.7% loss.

in Southern Yemen that have yielded multi-billion barrels of reserves.

Petroceltic Confirms Stake Sale

Petroceltic International confirmed the sale of an 18.375% interest in Algerias Isarene PSC to ENEL Trade S.p.A. The amendment of the PSC was signed by Petroceltic, ENEL, and Sonatrach at an official signing ceremony in Algiers on April 28. The only regulatory condition now remaining relates to the approval of the amendment by executive decree and subsequent publication of this decree in the Official Gazette of the Algerian government. Petroceltic said that this is an administrative process and does not confer any rights of preemption or challenge or involve any additional scrutiny of the terms of the transaction. The first payment under the agreement, which will be in excess of $55 million, is due 30 days following this publication. Brian OCathain, chief executive of Petroceltic commented: We are delighted to have concluded the signing of the Amendment to the PSC in an efficient and timely fashion with the active support of Sonatrach and ENEL. Petroceltic has already commenced planning for the enlargement of the Isarene appraisal campaign and introduction of our new partner. We look forward

to the results from the continuation of this drilling campaign and are confident that ENELs input will also make a significant contribution to pre-development and gas commercialization planning when this commences in the months ahead.

Madagascar Oil Begins Arbitration

Madagascar Oil reported that arbitration proceedings have begun against the Malagasy government and the state-run OMNIS regarding Blocks 3104, 3105, 3106, and 3107. The arbitration claims were formally submitted to the International Chamber of Commerce (ICC) in accordance with the requirements of the PSCs. Madagascar Oils filing seeks declaration that the PSCs are valid and that OMNIS proceed with the approval process of the work programs and related extensions as contemplated under the PSCs. Madagascar also submitted a notice of dispute to the government under the rules of the International Center for Settlement of Investment Disputes (ICSID) with regard to its threatened expropriation of its assets. While the arbitration process under the ICC rules begins immediately, the notice sent by the company under ICSID triggers a nine-month cooling off period designed to stimulate negotiations between the parties.

SKANA/MENA Reverse Take-over Update

Stockholders of SKANA Capital Corp. and MENA Hydrocarbons Inc. have been mailed proxy-related materials for special meetings of the shareholders of the two companies to consider and approve, among other things, the proposed reverse take-over of SKANA by MENA. The special meeting of SKANA shareholders will be held in Vancouver and a special meeting of MENA shareholders will be held Calgary. Subject to the approval of the TSX Venture Exchange, the transaction was completed on May 25.

Mart Execs Blocked from Trading

Mart Resources CEO and CFO have been banned by the Alberta Securities Commission (ASC) from trading in the stock of the company. Mart chairman and CEO Wade Cherwayko and

22

Petroleum Africa Magazine June 2011

CFO Angela Clark have had their trading ability put on hold due to a delay in the issuance of the companys 2010 financial reports. In accordance with its guidelines, the ASC has issued a management cease trade order that prohibits effective immediately, all trading of the securities of the company by Cherwayko and Clark. Mart said May 31 was the earliest the statements were likely to be filed.

conditions precedent for completion, the parties to the sale and purchase agreement have agreed to extend the end date for satisfaction of the conditions precedent from June 30, 2011 to August 31, 2011. Global is in the process of preparing the Notice of Meeting seeking shareholder approval for the Jupiter transaction. The Notice of Meeting will include the independent expert report. Allowing for the completion and dispatch of the Notice of Meeting, the company now expects the meeting to be held by late-July.

enhance Tullows North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development and exploration opportunities, and ownership of key infrastructure. This portfolio will increase the Groups North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe. The Nuon E&P transaction has an effective date of January 1, 2011 and is expected to complete by July 2011.

DMTI Forms New Division

Delta Marine Technologies (DMTI) has entered a new marketplace adding more technical support to the industry with its newly formed Integrity Management Division. DMTI acquired the services of Les Colter to head-up its newly formed Integrity Management Division located in its corporate offices in Montgomery, TX. In the coming months, DMTI will be completing the necessary equipment purchases and hiring staff, which will be trained and certified to meet current challenges being thrust upon facilities and pipeline operators in the United States. And, if the trend follows previous patterns, DMTI will be solving the same issues worldwide. The move from a reactive operator to a proactive operator is necessary to meet the proper risk management philosophy in which systems are required to have addressed all possible threats to the structures integrity, whether they be above grade facilities, buried or subsea pipelines.

Global Works on Conditions for Jupiter Petroleum Acquisition

Global Petroleum reported that the requisite documents needed to obtain approval from the Namibian Competition Committee to acquire Jupiter Petroleum have been submitted. The deal, once it goes through, will give Global access to Jupiters holdings in Namibia and offshore Juan de Nova, a French dependency in the Mozambique Channel. The sale and purchase agreement to acquire Jupiter was conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, obtaining necessary consents from governmental authorities, a report from an independent expert that the transaction is fair and reasonable to Global shareholders, and shareholder approval at a General Meeting. Global is continuing to work towards satisfying the conditions precedent as soon as possible. In order to allow sufficient time to meet the

Tullow on Buying Spree

Tullow Oil entered into an agreement to acquire the interests of EO Group Ltd. (EO) offshore Ghana. Under the conditional agreement Tullow will spend $305 million in a combined share and cash consideration. The company will issue 10,137,196 ordinary shares of 10p each in the share capital of the company to EO to satisfy approximately $216 million of the consideration. The balance, which will include certain working capital adjustments, will be paid in cash. The number of shares has been determined using an average of the closing share prices and exchange rates for the five business days up to and including May 24, 2011. The Irish independent also entered into an agreement to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of 300 million from the Vattenfall Group. The acquisition of Nuon E&P will significantly

African Politics
Sudans Bashir Seizes Disputed Abyei Area
The Khartoum government, led by Omar al Bashir, has taken control of the disputed oil-rich territory of Abyei. The region straddles the boundary between the north and south and was actually left out of the equation when the borders were demarcated so that the two sides could come to an amicable agreement over the region. The UN estimates that 30,000 people have been displaced after continuous fighting between the north and south. However, a local official said that up to 80,000 South Sudanese may have fled their homes after northern forces seized Abyei. The region is claimed by both sides with Sudanese president, Omar al Bashir saying at a rally in April, Abyei is located in north Sudan and will remain in north Sudan. On May 28, northern and southern Sudanese representatives met to defuse tensions over Abyei. Analysts worry that the northern takeover of Abyei could spark another civil war which would overshadow the newly gained independence of the south. Salva Kiir, president of South Sudan, said that there would not be a war over the incursion and that it would not derail independence. government in Tunisia just over six months to put the necessary infrastucture in place for free and fair elections. The political parties are divided on the postponement of the election, with most arguing that a delay could lead to instability and others saying that the postponement will provide time for a proper campaign. people acting on behalf of the defense for Taylor, attempted to bribe several prosecution witnesses to recant their statements. The trial chamber judges granted the prosecutions request and on March 18 ordered the Registrar of the Court to appoint an independent counsel to investigate the allegations. On April 21, the counsel concluded that there was sufficient evidence on the bribery charges. Four people have been indicted for contempt.

Crisis in Libya Continues

The battle between Libyan ruler Muammar Qaddafi and opposition forces continues to wage on with a new round of NATO air strikes in the countrys capital of Tripoli that began on May 23. International opposition to Qaddafi is growing. Russian president Dmitry Medvedev offered to mediate the longtime leaders exit, saying that Qaddafi had forfeited legitimacy. Previous attempts at an exit strategy for Qaddafi have been undertaken by the African Union, Turkey, and the UN, but to no avail. Russias remarks indicate a turning point it had previously criticized NATOs involvement in the North African country. Meanwhile, Italy has set up a group of government representatives and companies to secure deals with Libyan rebels. A source was quoted in a Reuters report as saying: The groups aim is to set up relations with rebels and revive trade. Operations are being coordinated by the [foreign office].

Sudan, Chad, and CAR Join for Border Protection

Sudan, Chad, and the Central African Republic (CAR) have agreed to renew an agreement to establish joint forces to protect their borders. The presidents of the three countries met in Khartoum on May 23, issuing a final communiqu that establishes a consultative mechanism to ramp up security forces. Sudan and Chad had previously signed a joint security protocol which created joint forces to combat opposition groups from crossing borders. Chadian president Idriss Deby said: The standing security coordination among the three countries does not target a particular party, but it is an expression of the common will in facing standing challenges. It is based on the charter governing the work of the African organizations and it is open for any party willing to join.

Tunisian Elections Could be Delayed

The planned July 24 election to decide on Tunisias next leader may be postponed until mid-October, according to the head of the countrys independent election committee, Kamel Jandoubi. The countrys current prime minister Beji Caid Essebsi said on May 27 that while the poll had yet to be delayed, he would support the decision of the electoral commission. Jandoubi followed by saying, The High Independent Panel charged with preparing elections has prepared a calendar that sets October 16 as the date of the election for the constituent assembly. Jandoubi said the need to change the date was for operational purposes though some opposition parties claims it is political. The July election schedule will only have given the interim

Sierra Leone Holds Special Court over Former Liberian President

Sierra Leone judges have issued two separate contempt proceedings to be held in a special court regarding allegations that several individuals associated with former president Charles Taylor as well as members of the Armed Forces Revolutionary Council (AFRC) have attempted to bribe witnesses. The former Liberian president is being held for war crimes and other serious charges committed in Sierra Leone from November 1996 to January 2002. The first contempt allegation has it that

Suspected Separatist Rebel Attack in Senegal

Reports have armed men, presumed to be separatist rebels, attacking Senegals Djinbanar village on May 28. Allegations have the members as part of the Casamance Movement of Democratic Forces (MFDC) a rebel group that has been fighting for independence from Senegal since 1982. Locals told news sources that one man was killed while eight shops were looted. The conflict is considered one of Africas longest, and a revival of the fighting came at the end of 2010 with at least 19 Senegalese soldiers killed.

Alternative Energy Africa

The Authority
www.AE-Africa.com

Downstream Focus
By Chikezie Nwaoha Downstream Correspondent

BACK TO BASICS
Pipeline Corrosion Monitoring, Control and Management

ipeline corrosion is an inevitable concern in the oil and gas industry, and is mainly due to the reservoir fluids tapped during the exploration, production and/or processing operations. These constituents, one or all of them, may be present in varying compositions. Each one of the component in the fluid has an influence on the corrosivity of the fluid and will determine the performance of the pipeline materials in contact. This phenomenon is cost effective in terms of pipeline failure and repair, contaminated product, human safety, environmental damage, and downtime resulting in lost production. Some of the corrosive mechanisms generally observed in the oil and gas industry, control mechanisms and management, are briefly discussed in the following sections.

Microbial Influenced Corrosion (MIC) This form of corrosion is induced due to the presence of sulfate reducing bacterium which grows in anaerobic conditions. The formation of these colonies are promoted by neutral water, especially when stagnant. They are most commonly found in cooling water systems. Stress Corrosion Cracking (SCC) This type of corrosion is aggravated by the presence of chlorides in the media. The presence of chlorides in the process media can attack the material through the de-passivation effect induced by chloride ions. With SCC, stress in the metal initiates the corrosion process and leads to cracking. The hydrogen produced from this form of corrosion can aggravate the condition further. Stress Corrosion Cracking can be detrimental to the integrity of the pipe network.

Types of Corrosion
CO2 Corrosion (Sweet Corrosion) CO2 is one of the main corroding agents in oil and gas production systems. CO2 will mix with the water forming Carbonic acid making the fluid acidic (reducing the pH value). CO2 corrosion is influenced by temperature and an increase in pH value. At elevated temperatures iron carbide (Siderite) scale will form on the material as a protective scale and the corrosion rate is reduced as a result. The metal starts corroding under these conditions and results in the ringworm form of corrosion. CO2 corrosion is enhanced in the presence of oxygen and organic acids which dissolve the protective iron carbide scale and prevent further scale formation. Galvanic Corrosion This type of corrosion occurs when two metallic materials with different electrochemical potential (nobility) are in contact and are exposed to an electrolytic environment. In this scenario the metal with the least or most negative potential becomes anode and starts corroding. The leading type of galvanic corrosion occurs in a coupling between stainless steel or nickel alloys with carbon or low alloy steels in a de-aerated environment. Hydrogen Embrittlement Hydrogen Embrittlement is simply the reduction of metal ductility, or toughness, due to the presence or absorption of atomic hydrogen. This embrittlement may occur during fabrication or through hydrogen absorption from its environment. Hydrogen embrittlement in itself is not detrimental to the integrity of the pipe but may lead to cracking, blistering, and weakening of the metal.

Figure 1: Stress Corrosion Cracking

Corrosion Monitoring
There are various monitoring techniques and strategies applied in the modern day industry. Below are classifications on the basis of intrusive, inline inspection, non-intrusive and laboratory test. Some are applied alone while some are applied in conjunction with others to get the desired corrosion level. Intrusive This type is time consuming and requires the operation to cease before installation. Weight-Loss Coupons This method directly monitors corrosion by way of placing a metal

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Sources: Chikezie Nwaoha

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Downstream Focus
coupon inside the pipe for a period of time, say at least six months, and then removes it. The only inference one can make is that the weight loss occurred linearly over that time. Advantages: Simplest method for direct corrosion monitoring; long track record of use; equipment is inexpensive; highly versatile. Limitations: Pipe must be shut down to install and retrieve data and is labor intensive to repeat; data not real-time; impractical to use in remote areas due to labor required to collect data; intrusive style of monitoring; a reactive, not proactive corrosion monitor. Electrical Resistance Probes (ER) These are introduced into the product stream and provide a measure of metal loss based on increases in electrical resistance as the metal corrodes. The devices can remain in-situ, connected to a SCADA system like any other sensor. Advantage: May be used as a continuous monitor; may be categorized as a proactive monitor if it is hooked up directly; data is not affected by temperature changes. Limitations: Pipe must be shut down to install; data not real-time; pigging can not be performed while ER probe is installed; ER probes can only be used in liquid phase environments, therefore they cant detect corrosion in the gas phases; scaling on the surface of the electrical probes can cause incorrect readings. Non-Intrusive This type of monitoring technique does not gain access to the media to be measured. It does not require any form of shut down. Clamp-On Ultrasonic Intelligent Sensor This has the same ultrasonic technology, but the difference is that it is clamp-on. Advantages: Can locate exact location of wall loss; non-intrusive. Limitations: Can not be used for continuous corrosion or process monitoring; labor intensive to repeat. Field Signature Method (FSM) The field signature method measures corrosion or erosion by detecting small changes in current flow due to metal loss. This is achieved via sensing pins which are distributed over the areas to be monitored and detect changes in the electrical field pattern. FSM can operate at pipe temperatures of up to 500C. Laboratory Analysis of Process Media Another method is the laboratory analysis of process media. Laboratory analysis of process gas samples can detect impurities and other chemicals that promote or signal corrosion. Labs often measure pH, dissolved gas (02, CO2, H2S, etc.), metal ion count (Fe2 and Fe3 ), and microbiological organisms.

Pipeline Corrosion Management

Effective corrosion management programs start in the equipment design by selecting corrosion-resistant materials appropriate for the particular purpose. Other programs include changing corrosive media when present, and applying the appropriate coating. Corrosion-Resistant Materials (Cathodic Protection) When it is observed that the existing material of construction is prone to corrosive attack, it is normally decided to change the materials of construction and select alternate material to suit the specific need.
Figure 2: ER Probes

Inline Inspection/Intelligent or Smart Pigs Magnetic Flux (MFL) In an MFL tool, a magnetic detector is placed between the poles of the magnet to detect the leakage field. When the tool passes a location where the amount of metal in the pipe wall has been decreased by a corrosion or pitting corrosion , a leakage of magnetic flux takes place. Figure shows the principle of MFL for pipeline inspection. Ultrasonic Pigs In ultrasonic pigs, the sound energy is introduced and propagates through the materials in the form of waves. When there is a discontinuity (such as a crack) in the wave path, part of the energy will be reflected back from the flaw surface. The reflected wave signal is transformed into an electrical signal by the transducer and is displayed on a screen.

Change of Corrosive Media and/or Environment Here inhibitors are applicable to reduce the aggressiveness of the media. The inhibitors are normally chromates, phosphates, or silicates added as per the recommendations of the manufacturer. Also removal of the oxygen from the fluid media improves the chances of corrosion resistance of materials in contact. Application of Coatings Today, four main coating systems are commonly used for pipelines: 3LPE (Three layer PE) Suitable for protection for small and large diameter pipelines, with broad operating temperature range (from -45C to + 85C) and ability to withstand very rough handling and installation practices without damage to the coating. It has three coatings, the first is the fusion bonded epoxy, the second represents copolymer adhesive, and the third represents polyethelene.

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(3LPP) Three layer PP 3LPP is good for improved impact and abrasion resistance compared to 3LPE and is suitable with operation temperatures of more than 110C. They are recognized for elevated operating temperature (0C to +140C) and extreme mechanical stress on the pipes. This also has three coatings, the first is the fusion bonded epoxy, the second represents copolymer adhesive, and the third represents polypropylene. (FBE or Dual FBE) Fusion bonded epoxy Dual FBE cost has become quite competitive after increases in coal tar prices. Dual Layer Abrasion Resistant FBE Systems provide excellent properties for a variety of service applications which may include directional drilling and anti-abrasion for road and river crossings. This type has two coatings, the first is the anticorrosion coating, and the second represents abrasion resistant overcoat. (CTE) Coal Tar Enamel and Asphalt Enamel For many refineries which have their own pipelines, coal tar is the

cheapest coating option, being their own product. Asphalt Enamel is a plant applied, durable coating based on modified bitumen (asphalt). Both systems are declining and suffer from health and environmental concerns.

Conclusion
It is imperative to understand corrosion mechanisms before taking into due consideration the various material options for the applications. Conversely it should be well known that no precise material is a single best bet to alleviate corrosion. Proper considerations, taking in all necessary factors, must precede material selection.

About the Author

Chikezie Nwaoha, AMIMechE is a petroleum engineer (with specialty in process engineering) covering flow systems design, with added focus on natural gas processing and distribution. He received his bachelors degree at the Federal University of Technology, Owerri. His technical career started with Port Harcourt Refining Company (PHRC) in 2005 and in 2007 as an industrial trainee. He has authored several technical articles in leading international journals and is a member of SPE, IMechE, ICE, IGEM, and the Nigerian Gas Association. He is currently the Hon. Secretary of IMechE Young Member Section in Nigeria. He can be reached via chikezienwaoha@yahoo.com.

References 1) Corbin, Darryl and Willson, Elfriede (2007), New Technology for Real-Time Corrosion Detection Proceedings of the Tri-Service Corrosion Conference. 2) McElroy, Michael I., Q&A: Corrosion Monitoring & Control, Flow Control, Volume XVI, No. 10 , 2010 3) Nwaoha, Chikezie (2011),Pipeline Corrosion Monitoring, Detection and Management: Back to Basics Proceedings of the 11th Technical Meeting of Pipeline Professionals Association of Nigeria (PLAN) March 24, Novotel Hotel, Port Harcourt.

Monthly Focus

th 7
Annual Independents Survey & Awards

2010 EXAMINED
Exploration and production opportunities within the African continent still attract the interest of Independents of every size from all corners of the globe, leaving the continents landscape heavily dotted with their presence. This years Annual Independents Survey & Awards was as exciting as ever for our Survey Committee to judge with all the new entrants and developments over the year. As opposed to the 2009 Survey when the activity of the mid- and small-size independents was notably slower because of the financial crunch, 2010 saw those independents make a rebound of sorts. Operators enjoyed higher oil prices over 2010 and thus those with production were not under the constraints of 2009. However, both strategy and luck made the difference for more than a few, whether producers or pure explorationists. This years line-up features many of the mainstays in the continent and newcomers to both our semi-finalist and finalist rosters that did a bang-up job, and also features a couple of independents for the last time as they have been acquired by larger companies. While many of the finalists from last year still stand in these categories, the small and mid-size categories saw a number of new companies, and there were others still that did not make the 2010 final cut. We look forward to potentially seeing them again in our next Annual Survey. Assisting us once again in this Survey were many companies who actively participated by providing us accurate operational and financial information. A sincere thank you goes out to top management along with those in communications and investor relations who took the time to answer all of our questions.

Decision-making Process and Criteria

As with each year, the 7 Annual Independents Survey & Awards was undertaken by grouping companies according to their market capitalizations to ensure that the fairest possible comparison was made. For each group there is a winner. To qualify for any award, over 2010 the oil company must have held at least one operated property (or technical operator status) within Africa, and had a market capitalization that did not exceed $35 billion at the end of December 2010. And to be considered an indigenous oil company, ownership from African capital must have exceeded 50%. Non-publicly traded companies were included and categorized based on information either provided by the companies themselves, or through documents of public record. In this years survey we evaluated over 120 independents of all sizes from around the globe, listed and private. The process of elimination brought the number of companies up for serious award
th

consideration down to 28. From this list the final cut was made at 20 companies competing within our four market capitalization categories. Included herein is a list of semifinalists who deserve recognition, along with a brief operational summary highlighting the accomplishments of those companies who made the final contenders list in each category. The complete scope of activities over 2010 was analyzed including acreage and corporate acquisitions, the entire upstream spectrum from pre-exploration all the way up to production, through transport to downstream facilities. The criteria taken under consideration during the judging phase is specific to African operations and included total acreage, number of discoveries, total production, year-end exit reserves, technical achievements, and milestones. While a number of companies operating in Africa have made notable achievements since the turn of the year, only 2010 data were analyzed.

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Sup er Independen ts
Market Capitalization: $10 billion-$35 billion Semi-finalists Anadarko Petroleum, Apache Corp., Hess Corp., Marathon Oil, Noble Energy, Sasol Petroleum, and Tullow Oil The Super Independents turned in fantastic performances over 2010 with each realizing at least one major accomplishment in addition to their already busy work programs, making this category arguably the most difficult to select a winner from. Four of our five finalists make a repeat appearance from last year while Sasol returns to the line-up after a few-year absence. And the finalists are

on Block 208, including construction of the Central Processing Facility and associated infrastructure. The project was 65% complete as of December 31 and is scheduled to come online during 2012. Anadarko also drilled around 22 wells during 2010 in Algeria. In November Anadarko added Sierra Leone to its packet of successes when the Mercury-1 well encountered hydrocarbons of good quality and quantity. Light crude oil was encountered at 15,950 feet, in water depths of 5,250 feet, encountering 135 net feet of oil. In Kenyas Lamu Basin, blocks L5, L7, L11A, L11B, and L12, the company continued planning for a 3D seismic program. Elsewhere in West Africa, Cote dIvoire specifically, the company acquired a 460 sq mile 3D seismic survey over its operated CI-105 license and initiated a 425 sq mile 3D survey over CI-103 where it has a non-operated interest. Anadarko also holds an interest in the Kosmos Energy and Tullow Oil blocks that house the Jubilee Field and where new field discoveries were made in 2010.

Anadarko
Anadarko Petroleum Corp. built on the progress it made in 2009 and turned 2010 into one of the most successful it has had in Africa. As an equity participant in the Jubilee Field offshore Ghana, the company added West African production to its portfolio in December. Anadarko also added another West African success to its discovery belt and tallied up more frontier offshore discoveries on the other side of the continent. Anadarko saw three of the largest discoveries in all of Africa during 2010 with the Windjammer, Barquentine, and Lagosta wells offshore Mozambique, with the three wells hitting 555, 416, and 550 net feet of natural gas respectively. The company also began drilling the Collier prospect. The well encountered pore pressure issues at the top of the predicted reservoir and was suspended in a manner which would allow re-entry of the wellbore at a later date, pending analysis of all relevant well data. On the other three wells Anadarko, based on the expected resource potential of these discoveries, began moving forward with appraisal and commercialization plans for the natural gas discovered. Perhaps the most exciting event for Anadarko offshore Mozambique came with the drilling of the Ironclad-1 well which encountered both oil and gas. The oil encountered in the Ironclad well is the first documented occurrence of liquid hydrocarbons in deepwater offshore East Africa. It should be noted that the parties involved are cautiously optimistic and not many details have been released on the well. Algeria, traditionally Anadarkos African bread and butter, accounted for over half of its daily production totals worldwide during 2010, about 55,000 boepd, compared to its worldwide average of about 87,500 boepd. Anadarko continued work on the El Merk development

Apache Corp.
US-based Apache Corp. could be considered a one trick pony in Africa until recently only holding African acreage in Egypt but what a pony it is. The company is one of the most active on the continent and is the number one independent producer in Egypt. Apache holds over 11 million acres in Egypt with proved reserves of 307 million boe. 2010 was a goal-achieving year for the company. In late 2005 Apache set a bold goal to double production from its Egyptian assets in five years, increasing gross production to more than 326,000 boepd. June 2010 brought the realization of that goal when Apache not only met, but exceeded the goal hitting the 330,000 boepd mark. By the end of 2010 the company had increased production even further bringing it up to 350,000 boepd. Apache is one of the busiest drillers in Africa, whether it be exploration, appraisal, workovers, or recompletions. During 2010 the company drilled 204 wells, with 177 of those being productive. The company added to its Egyptian acreage over the year when it purchased four leases under-development and one exploration concession from BP in November. Apache announced the West Kalabsha I-1X discovery in the Faghur Basin of Egypts Western desert in March. The well, located about 10 miles southwest of the Phiops field, test-flowed at a rate of 4,554 bopd and 10.1 Mmcf/d of natural gas from 105 feet of net pay in the Jurassic Safa formation. The company also completed waterflood programs in the Qarun Joint Venture, commissioning and improving oil and gas processing to handle increased hydrocarbon volumes.

Last Years Independent Award Winners

Anadarko Petroleum Addax Petroleum Oando Plc Maurel et Prom Circle Oil

Melrose Resources

Monthly Focus
Hess Corp.
Hess Corp. returns to the survey and awards lineup once again. The company holds acreage positions in North and West Africa where its holdings account for 224 million barrels of oil equivalent (boe) of its proved developed reserves and 56 million boe of its proved undeveloped reserves. Hess produced on average a total of 113,000 net bopd from Africa, with the majority of the contribution coming out of Equatorial Guinea and Libya. During 2010, 37% of its crude oil and natural gas liquids production was from African operations. At the end of 2010, 18% of the corporations total proved reserves were located in Africa (Libya 11%, Equatorial Guinea 6%, and Algeria 1%). Over 2010 the company made three wildcat discoveries in Libya as a partner in the Waha Group. The first discovery, the 6R1-59 wildcat exploration well, was drilled to a total depth of 11,400 feet. Initial testing of the well flowed from the Lidam at an average rate of 1,321 bpd of crude and 1.2 Mmcf/d of gas. The next discovery was with the drilling of the 6P1-59 new field wildcat well; this well was drilled to a total depth of 12,450 feet and initial production testing from the Gir established an oil flow rate of 637 bpd. The third discovery made came with the drilling of the UU1-71 new field wildcat well which flowed at a rate of 765 bopd. The company also operates independently in Libya holding title to Area 54 in the Sirte Basin where last year it was given a five-year extension to the license. Egypt is home to the West Mediterranean Block 1 concession where Hess holds a 55% stake. The company also has an interest in Block 1 offshore Egypt in the north Red Sea where a well was spud in December. Hess entered a farm-out agreement with Premier Oil in late-2010 to farm down its stake in the block to 80%. In Algeria Hess has a 49% interest in a venture with Sonatrach where the partners redeveloped three oil fields the El Agreb, El Gassi, and the Zotti. The company also has an interest in Bir El Msana (BMS) Block 401C. Additionally, Hess is in West Africas new hot spot, Ghana. The company holds a 100% interest in the Deepwater Tano Cape Three Points License. In 2010 it acquired additional 3D seismic data and plans were laid out to drill a second exploration well on the block. Equatorial Guinea is home to the majority of Hess production numbers in Africa. It is the operator and owns an 85% interest in Block G which contains the Ceiba Field and Okume Complex. In 2010, the company acquired a 4D seismic survey covering the Okume Complex and the Ceiba Field. Companhia Moambicana de Hidrocarbonetos and the International Finance Corporation produced and sold 107.4 M GJ of natural gas, compared with 106.8 M GJ in 2009. Work continued on the $300 million expansion of its onshore gas production facilities at Pande and Temane to increase production capacity, aimed to supply additional gas to customers in Mozambique and in South Africa. The company also completed the construction of a new compressor station at Komatipoort, close to the Mozambican border. The new station increases the export capacity for natural gas deliveries along the 865-km pipeline by about 20%. Further in Mozambique, the exploration drilling campaign in offshore blocks 16 and 19 discovered gas, though because of reservoir complexity Sasol does not expect to develop the wells in the near future. However, the company acquired exploration rights in the adjacent Sofala and M-10 blocks and success in either of these two new blocks could possibly allow for blocks 16 and 19 to be developed. Sasol and Petronas acquired the offshore M-10 Block on an equal 50% equity basis with Sasol subsidiary SPI as operator. SPI acquired 100% equity in the Sofala Block. Subsequently, 15% in each permit was offered to state company ENH, resulting in an equity distribution of 42.5% each for SPI and Petronas in the M-10 Block. In September the company signed an agreement to explore in concession Area A, covering approximately 8,370 sq km onshore Mozambique, also adjacent to the Pande and Temane gas fields. Sasol holds a 90% operated interest. On its home turf, near the end of 2010 Sasol and partners Chesapeake and Statoil were awarded a petroleum technical cooperation permit (TCP) to assess and quantify the prospective shale gas resource in the onshore Karoo Basin in South Africa. The partners plan to evaluate existing and available geological information within the area to determine the potential for shale gas. In Gabons Etame field Sasol is partnered with operator Vaalco Energy. Over 2010 two new wells in the satellite Ebouri field were brought into production, and the partners laid plans for drilling an exploration well in the southeast of the Etame field. These activities are aimed at sustaining production levels and extending asset life. The partners recently renewed their exploration rights for the permit area offshore Gabon until 2014 and extended the production licenses for the satellite Avoumi field through 2025 and Ebouri through 2026.

Tullow
Tullow, as always, had another banner year as an independent operator in Africa. The company saw its working interest production average 58,100 bpd and its three year reserves replacement ratio hit 250%. Tullows exploration success ratio reached 83% for the year finding hydrocarbons in 24 out of 29 wells. The company also increased its holdings in Africa and brought one development online. In what will probably become known as the companys signature project in Africa, Tullow brought the Jubilee Field in Ghana online in December, just 40 months after first discovery. The company and its partners worked at a feverish pace to bring this subsea development online, on time and within budget. Also in Ghana the company continued

Sasol
Sasol, or the Sasol group of companies, is the largest independent on the continent. With operations that span upstream, downstream, mining, refining, petrochemicals and beyond, the company realized success over 2010 on all fronts, domestically and internationally. On the domestic front, in Mozambique where Sasol produces gas and condensate from the Pande and Temane onshore gas fields, the company maintained steady output in 2010, despite reduced demand as a result of the global economic slowdown. In 2010, Sasol and its partners

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with its exploration program over 2010 drilling six exploration and appraisal wells, with a 67% success rate. Tullows four successful wells netted the company a total of 143 meters of net pay and established a new oil zone offshore Ghana with the success of the Owo-1 well and the Owo-1ST, now the Enyenra. The Jubilee Field Development in Ghana is just one of over a dozen projects around the continent for Tullow who has holdings in 15 African nations. The company also has operator status in at least one property in 11 of those countries. In Cote dIvoire Tullow holds stakes in four properties, one of them operated. Over 2010 the firm realized 3,850 boepd on an average working interest production basis in the country. Across the continent in Uganda, activity was slowed due to tax issues beyond Tullows control emanating from its purchase of former partner Heritage Oils stakes in Blocks 1 and 3A, which led to a whole other set of issues between the Ugandan government and Tullow. Despite this the company was able to complete the acquisition in July 2010 and negotiate the remainder of the year with farm-in partners Total and CNOOC, bringing major players into Uganda in early 2011. Even with all the upheaval and negotiating in Uganda, Tullow still drilled 10 exploration and appraisal wells with a 100% success rate on the Ugandan properties. Tullow expanded its position in the continent as well. In September, it acquired a 50% operated interest in six adjacent licenses from Africa Oil, covering the East African Rift Basins of Kenya and Ethiopia over an area of 97,000 sq km, expanding on the farm-in to Block 10BA from Centric Energy announced in August. Tullow now holds new interests in five licenses Blocks 10BB, 10A, 12A, and 13T in Kenya and the South Omo Block in Ethiopia. Major accomplishments in Tullows non-operated properties include its participation in yet another frontier discovery with the drilling of the Mercury-1 well offshore Sierra Leone with operator Anadarko. The company had a participating interest in the Block 2 Cormoran-1 well offshore Mauritania which resulted in a decent natural gas discovery at a constrained flow rate. The operator Dana Petroleum (KNOC), believes the gas discovery has further potential and may be re-entered later.

Afren
Afren amassed a significant amount of acreage across the continent, increased its production, made some key acquistions, and looks as if it might grow to be Tullowesque in stature. At the close of 2010 the company had a market cap of roughly $2 billion and held 29 assets in 11 different African countries. Known as a West African explorer with holdings from Nigeria to South Africa, during the year the company broadened its horizons and journeyed across the continent to East Africa with a key aquisition. The company is now present in Nigeria, Ghana, Cte dIvoire, Nigeria and So Tom & Prncipe JDZ, Republic of Congo, South Africa, Ethiopia, Kenya, Madagascar, the Seychelles, and Tanzania. Afren has massive tracts of acreage and net production totaling 14,333 boepd from a portion of its assets, including in Nigeria where it holds nine interests in both onshore and offshore blocks. Afren drilled the offshore Ebok Deep well on OML 67 to a total depth of 11,375 feet, intersecting two sandstone intervals of 370 feet combined thickness in the targeted Biafra and Isongo formations. The Phase I development of the Ebok Field began and included production testing on three of the five horizontal production wells, all of which led to the start of production in 2011. At the Okoro field, during November work commenced on the Okoro-11 and Okoro-12 infill production wells. The company, through its 45% stake in First Hydrocarbon Nigeria (FHN), added to its onshore portfolio and upped its production flows when FHN acquired a stake in OML 26. In January Afren also picked up a stake in OML 115 in the eastern Niger Delta, which surrounds the Okwok field and extends to within around 2 km of the Ebok field. The company expanded its interest later in the year when it acquired the remainder of Energy Equity Resources stake in the field. Afren began an exploration and appraisal drilling campaign on OML 115 which included the August spud of the Okwok-9 appraisal well which was drilled to 8,053 feet and completed over a 35 ft interval, flowing 31 API crude oil. Afren expects to be able to deliver significant production and operational synergies between the three Nigerian fields. In Cote dIvoire, home to Afrens other producing assets, the company saw an average production rate of 5,088 boepd from Block CI-11. Afren conducted a wireline workover program during the year to remove wellbore wax build up and obtain down hole pressure data. Afren is the sole owner of the Lion Gas Plant, which processes gas from the CI-11 and adjacent CI-26 and CI-40 blocks operated by Canadian Natural Resources. 2010 NGL production was 721 boepd. Afren holds a stake in Ghanas Keta Block where the Cuda-1X was drilled but not tested in 2009 due to pressure issues. In-depth subsurface studies were undertaken over the year to gain further understanding of the broader prospectivity of the block, and several large prospects were identified. The block saw its estimate of gross unrisked prospective resources more than double as a result of the studies. In June 2010 Afren picked up the East Africa acquisition gauntlet and acquired Black Marlin Energy Holdings for an estimated $101 million. The purchase of Black Marlin gave Afren assets in several East African countries through its subsidiary East African Exploration Ltd. (EAX), including Kenya, Ethiopia, Madagascar, and Seychelles. Afren completed a 551-km 2D seismic survey in 2010 over its Ethiopian acreage.

Lar ge Independen ts
Market Capitalization: $1 billion-$9.99 billion Semi-finalists Afren plc, Dana Gas, Dana Petroleum, Kosmos Energy, Maurel et Prom, PA Resources, and TransGlobe Energy The Large Independents once again turned in outstanding performances, but like last year, we noted that this market cap category continues to shrink, with companies either being snapped up by a larger firm or organic growth moving them up to the Super Independent category. This will be the last appearance for Dana Petroleum who is now part of the Korea National Oil Corp. Now on to the finalists

Petroleum Africa Magazine June 2011

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Monthly Focus
Dana Gas
Dana Gas holds three concessions in Egypt and is 100% operator of two of those concessions. The company produces from 11 fields in the Nile Delta and is a 50% joint operator of one exploration concession, and also produces from one field in Upper Egypt. In 2010 the company was awarded another four development leases, two of which are contiguous and sizeable. Over the year the company saw its total proved reserves in Egypt increase by 90% to 89 Mmboe and proved plus probable reserves by 15% to 152 Mmboe, and its production increased by 20% bringing it to 42,300 boepd. Its Nile Delta assests were reviewed by Gaffney Cline & Associates over the period and put Danas risked resources at 1.8 Tcf of gas. The production increase was achieved as a result of five discoveries made over the period on the Qantara and West El Manzala concessions. These discoveries the Sama, the Orchid, the Sharabas, the Faraskur, and the South Faraskur were all brought onstream over the year. The South Abu El Naga-1ST well in the West El Manzala encountered 7.2 and 12.6 meters of net pay in the Abu Madi Upper and Lower formation respectively, and 4.8 meters in the Kafr El Sheikh formation. The company said that it carried out a multi-rate test on the 12-meter interval in the Abu Madi Lower reservoir. The interval flowed at a rate of 19.4 Mmcf/d of gas and 1,160 bpd of condensate. The discoverys high liquid yield resulted in higher revenues based on international market prices for natural gas liquids. Dana Gas was particularly busy in Upper Egypt (southern Egypt) on its Kom Ombo Concession. Several wells were drilled over the course of the year and put on production. The company continued with its work plan to increase the productivity of the Abu Ballas formation utilizing a fracture program. Also during 2010, 480 km of 2D seismic was acquired and processed, and the Memphis-1 exploration well commenced drilling in December. the addition of a 50% interest in the El Manzala Offshore Area Concession partnered with UK major BG. Operationally the company participated in the drilling of more than a few wells and the acquisition of seismic in Morocco and Guinea. The company recorded two discoveries in June, one with the drilling of the Lorcan-1x well on its 100% operated North Zeit Bay PSC in Egypts Gulf of Suez and the other onshore the East Beni Suef with the drilling of the Fayoum-2x well. The Lorcan-1x encountered good quality oil bearing sands and tested at a rate of 4,714 bopd. The Fayoum-2x well hit oil in the Upper Bahariya formation, with net pay of 64 feet, and in the A/R G-20 sands, with net pay of 10 feet. Test data indicates that the well should be capable of flowing at rates of approximately 600 boepd. In July the company discovered a new oil field in Egypt, also on the North Zeit Bay property, with the drilling of the Fin-1x well which tested at a rate of 1,049 bopd on a 52/64 choke. Dana reported that the flow rate was restricted by the temporary flow testing facilities and the requirements to truck the produced oil from the desert location. The company hit once again in Egypt near the end of the year with the Nefertiti Prospect on the South October Concession in the Gulf of Suez. The well was technically challenging being highly deviated and drilled from an onshore location. It was drilled to 14,150 feet MD and encountered 65 feet of oil bearing sands. The reservoir was moderately pressure depleted and the flow test was completed using an ESP. Dana expects to secure 3.9-6.5 million barrels of resources from the well. The company also had a participating interest in the Bamboo prospect drilled by GDF Suez in the Nile Delta. As operator of Block 7 in Mauritania, Dana spud the Cormoran-1 well which resulted in a gas discovery at the end of 2010. The well encountered four separate gas columns and flowed at a rate of around 23 Mmcf/d from the 33 meter Lower Pelican Group interval. Dana said the flow rate was constrained due to the need to avoid sand production and that substantially higher flow rates could have been achieved were it not for this operational constraint.

Dana Petroleum
Dana Petroleum makes it as a finalist once again, however this will be the companys last appearance as it was acquired in a semi-hostile takeover by the Korea National Oil Corp. (KNOC) in 2010, effectively removing another large independent from the African scene. Despite the wrangling that went on between Dana Petroleum and KNOC over the year, the UK-based company was able to make good on its work program during its last three quarters as an independent. Dana also acquired new acreage in North and West Africa, settled a suit with a former partner over East African acreage, and participated in a number of wells across its acreage portfolio. Besides battling KNOC, on the corporate front the company started out the beginning of 2010 closing a deal with Hyperdynamics that gave it access to some acreage with high potential off the coast of Guinea. The company acquired a 23% participating interest in Hyperdynamics PSC with the government of Guinea. In August the company settled its contractual dispute with Woodside Energy over the Kenyan acreage, sharing in a lump sum payment of $12 million with partner Global Petroleum. Dana Petroleum also expanded its position in Egypt with

Maurel et Prom
Maurel et Prom holds considerable acreage in East and West Africa, operating in five African countries. Over the course of 2010 the French firm focused on two major growth areas in Africa; Gabon and Nigeria. The company ramped up production in Gabon, developing the OMBG and OMGW fields rapidly and at a low cost, following the receipt of the Exclusive Exploitation Authorization from the government. The OMGW-102, OMGW-103, and the OMGW-201 wells were drilled during the period and brought onstream through the Onal fields production center. The company also discovered the OMOC-North field over the year and began its development shortly thereafter. Appraisal drilling on the OMOC-North began in July. The OMOC-N-301 and OMOC-N-302 were connected to the evacuation pipeline from the Onal platforms in December. Maurel et Proms average production rate over 2010 in Gabon was 14,618 bpd.

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In somewhat of a surprise move, the company officially sealed a deal in 2010 giving it access to Nigerian production acreage when it took a 45% stake in indigenous company Seplat Petroleum. Through its share in Seplat, Maurel et Prom gained rights to Nigerias OMLs 4, 38, and 41. Production was integrated progressively during H2 2010. Based on the 128 production days in 2010, the fields produced 17,632 bpd of which Maurel et Proms share was 3,570 bpd. In Tanzania the company holds stakes of 35% or better in five permits and is operator of four of those permits. One of its permits, the MafiaDeep was evaluated as having between 1.97 and 4.15 Tcf of gas. The company is looking for a farm-in partner to fund the studies necessary to determine how much of this gas is commercially viable. Over the year Maurel et Prom drilled the Kianika-1 exploration well on its operated Mandawa exploration permit. The well achieved all of the planned objectives and showed good reservoir characteristics, confirming the regions potential. Despite the positives of the well, no hydrocarbons were detected and the well was abandoned. The company drilled a few wells in the ROC during the year; unfortunately they were less than successful. Both the NGoumba-1D and the MBafou exploration wells were drilled on the Marine III permit and both were subsequently plugged and abandoned. Maurel et Prom also drilled the Ti-Ti-NE-1 well on its operated La Noumbi permit. The well was a bit more successful, but not by much. During drilling a silty sandstone zone was encountered that showed hydrocarbon indicators. Measurements indicated that production (mainly natural gas) would not be commercially viable because of the distance to any potential market.

new wells, increasing Arta/East Arta production from 140 bopd to over 3,000 bopd. The company accelerated the development program by bringing a second rig into the Arta/East Arta fields in mid-2010. Overall the company drilled 31 wells, resulting in 24 successes (four at Hana, six at Arta, five at East Arta, two at North Hoshia, one at each of Hana West, Hoshia and South Rahmi, and four at East Ghazalat). All in all the company saw a good success rate in its 2010 drilling program and by the end of the year was producing from Egypt about 8,000 bopd net, up from Q1 production of around 6,800 bopd.

Mid -size Independents

Market Capitalization: $250 million-$999.99 million Semi-finalists Bowleven plc, Melrose Resources, Ophir Energy, Petroceltic International, Vaalco Energy, and Vanco Energy The mid-size independents rebounded during 2010, outshining their 2009 performances that were hindered with budget and funding constraints. All of our 2010 finalists made remarkable progress on either the corporate or technical front, some on both fronts. Over 2010 they pushed through their delayed agendas and edged out a tough field of competitors. Now on to the finalists

Melrose Resources
Melrose Resources is a staple in our Annual Survey and Awards. The company holds three concessions in Egypt with a 100% operated interest and holds a 40% operated interest in a frontier exploration block in Upper Egypt, the Mesaha. A good majority of its production is generated from these concessions. The companys average production on a working interest basis in 2010 from its Egyptian holdings was 189.6 Mmcf/d of gas and 6,251 bpd of oil, condensate, and LPG. Net entitlement production averaged 76.2 Mmcf/d of gas and 2,587 bpd of hydrocarbon liquids. Total global average production for the year reached a record level of 38,944 boepd on a working interest basis, representing an increase of 4.6% over the previous year. Melrose undertook an active exploration campaign during the period, completed the expansion of field facilities, and added a further development to its portfolio. The company drilled four exploration wells during 2010 with one success the 26 Bcf South Damas discovery in February and placed it on production in four months. The company saw Phase II of the expansion of the West Dikirnis field facilities completed during Q2 of the year. This included the installation of a fractionation plant to recover LPG from the fields associated gas production and gas re-injection facilities to maximize the recovery of oil, condensate, and LPG from the field. The company also acquired additional 2D and 3D seismic data in the under-explored South East Mansoura Concession. The program was designed to evaluate a new oil exploration play in the Cretaceous and Jurassic formation. In the Mesaha Concession, a 1,047 km 2D seismic acquisition program was completed in early 2010 which provided

TransGlobe Energy
TransGlobe Energy had a banner year. The company holds working interests in four concessions in Egypt, three with a 50% stake or better. TransGlobe recorded substantial growth in reserves and production over the year with its operated concessions in Egypt being primary contributors to those increases. The companys Egyptian 1P reserves grew 16% over 2009 numbers, representing a production replacement of 181%. Accordingly, its 2P and 3P year-over-year increases represented a production replacement of 369% and 558% respectively. The most significant reserves additions for 2010 came from the exploration and appraisal drilling on the Arta/East Arta in West Gharib and the Safwa discovery in East Ghazalat. The discovery of the Nukhul oil pools in the Arta and East Arta leases resulted in significant reserves growth. In January 2010, TransGlobe farmed-in for a 50% interest in the 858 sq km Western Desert East Ghazalat exploration concession, which it hopes will contribute to future reserves increases. Operationally the company had a hugely busy year, drilling numerous wells and overcoming some challenges. The main challenge met by TransGlobe was faced at West Gharib in early 2010 where the Nukhul reservoirs have variable reservoir quality and low permeability sands that required fracture stimulation to improve production and oil recovery rates. The company improved flows in the first four fracture stimulations and then rapidly confirmed the success of this technique by drilling 18

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further insight into the basins architecture and sufficient encouragement to justify an infill seismic survey in 2011. Melrose continued with its active reservoir management program to optimize individual well withdrawal rates in the West Dikirnis field to prevent premature water breakthrough and minimize gas production volumes. In 2010 the field produced from six wells. The company also recompleted the Salaka Field on the Mansoura Concession to tap the Kafr El Sheik reservoir. stakes in Algeria and Tunisia with the former providing it with a significant resource base. In H1 the company successfully raised cash to fund an appraisal program on Algerias Isarene Permit, began the process of finding a partner to aid in bringing its resources onstream, and extended its stay in Algeria. Petroceltic is the operator of the Ksar Hadada Permit in southeastern Tunisia. The company completed a 2D seismic survey and subsequent processing on the acreage in early 2010, followed by the commencement of a two-well drilling campaign in July 2010. The first exploration well, the Oryx-1, reached its total depth at 1,140 meters. The well encountered oil shows in both the upper and lower Ordovician reservoir units however, the well was not tested. The Sidi Toui-4 was spud in August and drilled to a total depth of 1,603 meters. The two wells did not produce the results Petroceltic was looking for and both were plugged and abandoned. Under a farm-out agreement entered into in 2009 both the wells were drilled with little cost to Petroceltic. The company was busy on the Isarene Permit, starting off the year with the completion of its five-well drilling program, begun in 2009, that resulted in the discovery of the Ain Tsila gas condensate field. The February testing program confirmed the Ain Tsila as a major new gas condensate discovery. According to the companys internal estimates the most likely gas initially in place is 6 Tcf. Petroceltic also saw two discoveries with the drilling of the INE-2 and INW-2 wells in the early part of the year. In April the company signed an Addendum to PSC for the Isarene Block giving it a two-year extension to carry out appraisal work on the four discovery areas on the block, namely Ain Tsila, Isarene North East, Isarene North West, and Hassi Tabtab. The appraisal period began in late-April 2010. In July a significant step toward launching its 2010 drilling program took place when the company secured the services of Dalma Energys land rig No. 12, leading to the spud of the AT-4 well in November. The well was a success encountering a gross gas column of 155 meters with no gas-water contact observed. Additionally, static reservoir pressure readings indicated that the main Ordovician gas reservoir in this area is in the same pressure regime as that encountered at wells AT-1, AT-2, and AT-3.

Ophir Energy
Ophir Energys portfolio boasts 19 concessions spread over eight African countries and the company serves as operator on all but one of those concessions. Ophirs acreage covers Senegal, the AGC, Equatorial Guinea, Republic of Congo, and Gabon in West Africa; Western Sahara in North Africa; and Tanzania, Madagascar, and Somaliland in East Africa. As of December 31 the company was one of the top five holders of deepwater exploration acreage in Africa in terms of net acreage, according to IHS Energy. Ophir negotiated deals aplenty across the continent that have added value to the company and resulted in a number of successes, including in its drilling program. The company brought BG Group onboard its assets in Tanzania where it realized two gas discoveries over 2010. The Pweza-1 well drilled on Block 4 in the Mafia Basin encountered a natural gas column of nearly 60 meters. The well was followed up by the Chewa-1 well, its second discovery. As operator of the block, Ophir entered into gas commercialization agreements with the government of Tanzania. It should be noted that despite BG taking a majority interest in the blocks, Ophir remained operator of the acreage, although BG has the option to take on operatorship once the initial work program is complete. In Equatorial Guinea the company interpreted new 3D seismic data and completed the conceptual field design project for Block R, and entered into the two-year first extension period for the block. Ophir entered into an agreement with FAR to earn the right to acquire a 25% interest in its Senegal license areas covering an area of 7,490 sq km. The deal also enabled FAR to immediately acquire a 10% interest in Ophirs AGC Profond PSC offshore Senegal and Guinea Bissau. A rig was contracted to drill the AGC Profonds Kora Prospect. Ophir also took the decision to exit Block 3 in the Nigeria/Sao Tome and Principe Joint Development Zone after a sub-commercial discovery. In July Ophir expanded its East African position with the acquisition of an 80% interest and operatorship of the Marovoay Block 2102 PSC, onshore Madagascar. The block lies in the coastal area of northwest Madagascar covering an area in excess of 12,000 sq km. The company conducted an airborne gradiometry and magnetic survey over Block 2102. In Gabon, where Ophir has four blocks, it undertook marine gradiometry surveys and also entered into negotiations to farm-out stakes in its Mbeli and Ntsina blocks.

VAALCO Energy
VAALCO Energy makes it to the finals once again based on its performance in Gabon. The company was able to fund its production and development operations, and its exploration program from cash flows, which included drilling more than a few wells. The company also holds a stake in Angolas Block 5. The company operates on the producing Etame Marin Concession offshore Gabon and the onshore Mutamba Iroru Concession. VAALCO produced a total of 7.3 million barrels over the course of 2010 from the Etame Marin Concession and reached an agreement with Total Gabon to establish a joint operation on the Mutamba Iroru, securing a second extension of the exploration period until May 2012. VAALCOs year in Gabon consisted of three new wells being brought online, the recompletion of another well, and a new discovery.

Petroceltic plc
Irish independent Petroceltic International makes it to the finals again this year based on its operations in North Africa. The company holds

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The company launched an aggressive drilling program at the start of the year, planning four wells on the Etame Marin Concession and expanding the program to six before the year was over. The company drilled a development well, the Ebouri 4H, from the Ebouri platform which began producing oil in May. A successful workover of the Ebouri 3-H well to replace submersible pumps was completed, as well as an exploration well with two sidetracks in the Southeast Etame Field, which resulted in an oil discovery in the Gamba reservoir. The Etame 7H development well, a subsea completion, began adding to the companys production totals in December when it was successfully hooked-up by undersea connections. VAALCO also drilled a development well on the South Tchibala field, the South Tchibala 2H, which was tied-in and began producing oil in November. Well number six was on the Omangou prospect which was water-bearing in the objective reservoir and subsequently abandoned. Steps were taken in 2010 to get back on track in Angola, working with the government to rectify the situation of the non-performing partner, leading to the partner being removed late in the year. VAALCO remains committed to the project despite the delay and as such opened a data room for prospective partners in an effort to move exploration forward.

Bay in southeast Equatorial Guinea. The block covers an area of 5,460 sq km and contains numerous high-potential Tertiary and Cretaceous prospective features. The contract became effective upon presidential ratification on September 3.

Sma ll Independents
Market Capitalization: Under $250 million Semi-finalists ADX Energy, Africa Oil Corp., Circle Oil, Cooper Energy, Energulf Resources, Orca Exploration, Sea Dragon Energy, and Vanoil Energy The small independents struggled a bit over the past year and many that traditionally make it through to our later judging rounds did not move on. Despite the tough year, a number of independents made the cut to our semi-finals for the first time and also dominate the final roster, having achieved impressive results. And now on to the small cap finalists

ADX Energy
Making it to the show for the first time is ADX Energy (formerly Audax Energy). The company had a very busy year on its assets in Tunisia. The company has an operated interest in the Kerkouane and Pantelleria Licenses in the Sicily Channel offshore Tunisia; these permits are contiguous across the Tunisian-Italian border with a total area of 4,504 sq km. The company also has an operated interest in Tunisias Chorbane License. Over the period the company had a number of accomplishments on these assets, from maturing a prospect to securing the right rig for drilling, to farming out stakes, not once or twice, but three times. The company also saw a discovery in Tunisia. In early 2010 ADX reached an agreement for Gulfsands Petroleum to farm-in on the Chorbane and Kerkouane Permits. ADX and Gulf Keystone expanded the farm-in agreement in June giving Gulf a total of 30% in the permits. The company also entered into agreements with Bombora Energy and PharmAust. Bombora will earn a 10% interest in the Chorbane by paying 20% of the first exploration well, and PharmAust will earn 10% in the Chorbane and Kerkouane. During the year the company matured the Lambouka (offshore Tunisia) and Sidi Daher (onshore Tunisia) prospects for drilling. The company acquired 3D over the Sicily Channel permits, including the Lambouka prospect. The seismic was completed one week ahead of schedule despite the challenging weather faced in the Sicily Channel. ADX saw a significant increase in the resource potential at its Dougga gas condensate discovery, made in the 1980s, on the Kerkouane. The company came to the resource increase conclusion based on the results of a remapping using its leading edge dual sensor 3D seismic data acquired earlier in the year. The company secured the use of the Atwood Southern Cross for drilling, leading to the Lambouka-1 discovery well. ADX reported that the analysis of the final suite of wire line logs on

Vanco Energy
Vanco Energy is one of the first independents to see the potential of West Africas frontier deepwater acreage and holds stakes in three West African countries Cote dIvoire, Equatorial Guinea, and West Africas newest sweet spot Ghana. The company was busy over the year firming up leads, conducting seismic, and drilling wells. The company added to its seismic portfolio in Ghana with the acquisition of more than 1,600 sq km of new 3D data on the Cape Three Points Deep Water Block. In February 2010, Vanco Ghana Ltd. as operator, drilled the first well ever on its Ghanaian block. At that time, the well was not only the first drilled on the block but also the deepest-water exploration well drilled to date in the Ghanaian Tano Basin. Vanco drilled the well to a depth of 4,433 meters, using the Sedco 702 and at 3,653 meters encountered a gross hydrocarbon column of 94 meters with 25 meters of net stacked oil and gas pay. The primary reservoir sandstone between the depths of 3,663 and 3,690 meters contains gas and light oil. Volatile black oil was also recovered from a zone between 3,701 and 3,709 meters. In April the first well on Cote dIvoires Block CI-401 was drilled, the Orca-1X bis. The well was drilled to a total depth of 4,015 meters below sea level in a water depth of 1,868 meters, encountering thin oil-bearing sandstone reservoirs. Oil samples were recovered from Campanian and Turonian sandstones during the course of drilling operations. The Orca-1X bis well was plugged and temporarily abandoned, having confirmed the availability of an active petroleum system for future exploration. In Equatorial Guinea the company signed a signed a Contract of Participation in Hydrocarbon Production for Block K, offshore Corisco

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the well showed at least two hydrocarbon bearing zones present in the Abiod Formation, intersecting a gas column of approximately 25 meters. ADX saw its stay extended on the Chorbane permit in March. The company also issued tenders for drilling services for the drilling of the Sidi Daher Prospect in September with an eye toward spudding a well on the Chorbane in December. Technical work on the Sidi Daher Prospect over the year identified a Direct Hydrocarbon Indicator in the Eocene-age Metlaoui Formation strata that significantly enhanced the expectation of success and upgraded the prospect to a ready to drill status. In December ADX Energy reported that the rig tender evaluation was approved by ETAP, giving the company the choice of four compliant and technically capable onshore rigs. The company also stayed busy with seismic over the period in one form or another. In Kenya a tender for the acquisition of 600 km on Block 10BB was completed. On Block 10BA the company reprocessed all available seismic data. In Ethiopia it processed the data from its 2009 2D acquisition over 500 km in the Adigala Area and initiated seismic in the Ogaden Area. In Puntland the company completed a comprehensive interpretation of 2D seismic data over the Dharoor Block, and on the Nugaal Bock the re-interpretation of the existing 2D seismic data was completed.

Circle Oil
For the third year in a row Circle Oil makes it to the finals as a small independent. The company holds stakes in three North African countries; Egypt, Morocco, and Tunisia. In Morocco, where the company holds the status of operator, its drilling program in 2009 led to an extended production test on the Sebou Permits KSR-8 well in early-2010 and the eventual start up of production from the well in H1 2010. Circle also expanded its acreage position in Morocco during the year when it was awarded the Lalla Mimouna area. The petroleum agreement covers the Lalla Mimouna Nord and Lalla Mimouna Sud Exploration permits in the Rharb Basin. While the companys 2010 drilling program in Morocco was held up by flooding in the early part of the year, it did manage to make a discovery with the drilling of the KAB-1 exploration well in H2. The well was drilled to a total depth of 1,400 meters in the Guebbas unit and significant gas shows were observed at expected levels during drilling and wireline logging and pressure sampling tools were prepared for formation evaluation. The KAB-1 well was followed by the CFD-11 well. This well was drilled to 1,171 meters MD and encountered multiple significant gas shows at four levels. As a non-operating partner on various concessions in Egypt, Circle Oil realized positive results. In February, the Geyad-2X ST1 well commenced production in the onshore NW Gemsa Concession. The well initially produced at a rate of approximately 2,100 bpd, bringing the overall adjusted daily production from the Al Amir Development Lease and the Geyad wells to over 9,200 bpd. Also on the NW Gemsa the Al Amir SE-6X well was reported a success in June, testing a hydrocarbon bearing interval over a pay zone of approximately eight feet in thickness in the Lower Rudeis within the 13,776 to 13,784 ft interval. A drill stem test flowed oil at a sustained average rate of 66 bpd and 1.1 Mmcf/d of gas using a 32/64-inch choke. In November the Al Ola-1X well added more success on the NW Gemsa for the partners. The Kareem Rahmi formation sandstones flowed 42 API oil at an average rate of 1,575 bopd and 1.65 Mmscf/d of gas on a 32/64-inch choke from the lower of the two identified pay zones. The company also holds a stake in Tunisias Grombalia Permit. While no drilling took place on the permit in 2010, Circle did initiate plans for drilling, ordering long-lead time drilling materials well in advance. In late-2010 Circle was in the process of finalizing technical studies to decide on the optimum drilling location.

Africa Oil Corp.

Africa Oil Corp. graduated from being a semi-finalist in last years awards to being a finalist this year. Based on its activities over 2010 and early 2011 this will be the last year that the company qualifies as a Small Independent, look to see the company in the mid-size category in the next round of awards. A host of acquisitions, farm-ins, and farm-outs put Africa Oil in contention for an award this year. The company increased its holdings in East Africa, now holding stakes in three East African countries and one West African country. The company over 2010 achieved significant corporate accomplishments adding interests in five blocks in the East African Tertiary Rift System and two blocks in the Central African Rift Trend to its portfolio. Africa Oil also had the savvy to bring in a heavy hitter to aid it in its exploration endeavors. During August the company completed a farm-in transaction, acquiring an 80% participating interest and operatorship of the South Omo Block in Ethiopia and then turned around and farmed out a stake to East African success magnet Tullow Oil. During September Africa Oil completed the assignment of a 100% interest in Blocks 12A and 13T in Kenya and based on negotiations over 2010, Tullow will be joining the company on these blocks also. The company launched negotiations in 2010 to acquire two firms, Centric Energy and Lion Energy. While these deals did not close in 2010 they did pave the way for the entrance of Tullow Oil into Africa Oils exploration acreage, at least in the case of the Lion Energy acquisition. Africa Oil also farmed out stakes in its Ethiopian acreage in June to Red Emperor Resources. Under the terms of the agreement, Red Emperor will earn a 10% interest in both the Dharoor and Nugaal Valley Blocks and is committed to paying a disproportionate share of costs related to the one-well drilling commitment included in the first exploration period of both the Dharoor and Nugaal Valley PSAs. Operationally the company participated in the drilling of the Boghal-1 well on Kenyas Block 9. While the well was spud in 2009 a majority of drilling as well as testing took place in 2010. At the outset of drilling the Boghal-1 well the operator of the block was Chinas CNOOC however, the Chinese firm bowed out of the project and Africa Oil took on the role of operator.

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Vanoil Energy
Vanoil Energy makes it to the final line-up for the first time this year. Formerly mining company Vangold, the company split in late 2009, reinventing itself into a pure E&P company. Under the Vanoil banner it has undertaken a concerted effort to explored Rwandas frontier acreage and added Kenyan acreage to its portfolio. Over 2010 the company continued with its geophysical work over a large swathe of virgin territory. The company started the year off with a successful rights offering in January. By February Vanoil had completed its Rights Offering, issuing over eight million common shares. In September Vanoil began a cash raising exercise which closed in December, and with an extension netted the company over $3.4 million. Operationally the company was very busy in Kenya where it holds 24,960 sq km in Block 3A and 3B. In March Vanoil submitted its environmental impact assessment (EIA) for Block 3A and Block 3B in northeast Kenya which included an environmental management and monitoring plan for its upcoming 2010 seismic program on the blocks. The final reports were also submitted to the EIA coordinating authority and the Kenya National Environment Management Authority. In September Vanoil launched a comprehensive 2D seismic program on Block 3A. By October approximately 409 line-km of new 2D seismic on five structural leads in the Anza Graben was completed. The company acquired an additional 38 line-km in Block 3B, which surveyed a structural lead in the Lamu Embayment Basin. Vanoil was also busy in Rwanda where it holds a production sharing agreement covering 1,631 sq km in the East Kivu Graben, part of the East African Rift System. In November Vanoil commenced a 300 km high resolution, low impact seismic and magnetic survey over Lake Kivu. The high-resolution seismic reflection survey was the fourth part of an EIA survey undertaken by Vanoil earlier in 2010. The results of the first part of the EIA supported the view that the wellknown methane gas of Lake Kivu has a mixed biogenic and thermogenic

origin following the laboratory work conducted by GH Geuchem Laboratory UK. The objective of the second part of the EIA program was to determine by laboratory modeling the energy required to excite dissolved gases from Lake Kivu waters while the third part of the EIA was to determine an optimal seismic source from a safety perspective.

Victoria Oil & Gas

Victoria Oil & Gas Plc (VOG) returns to our Survey for the second year running. The company is active in Cameroon on the onshore Logbaba concession which is a project aimed at bringing previously discovered natural gas reserves, once thought to be non-commercial by the majors, online. VOG started off the year nearing total depth on its La-105 well. The well reached a total depth of 8,920 feet and showed a gross pay in excess of 300 feet. Multiple gas-bearing sands were encountered at virgin pressures at depths between 6,017 feet and 8,330 feet, which VOG said can be correlated to those found and tested in the nearby La-103 well. Over the testing period, various zones of La-105 flowed at rates between 11-56 Mmcf/d of natural gas and 210-1,000 bpd of condensate. In February the La-106, a deviated well, spud from the same well-pad as La-105. The well was designed to twin the LA-101 well drilled by Elf in the 1950s. The La-106 was deemed a success flowing at 22 Mmscf/d. Both wells were completed as producers. VOG also interpeted the passive seismic spectroscopy survey which indicated potential hydrocarbon accumulations. The survey findings are in line with the geological understanding of the Logbaba reservoir sands and correlate well with data from four older wells and the La-105 well. The data was the first new geophysical information to be acquired over Logbaba since the discovery was made in the 1950s. On the corporate front VOG continued to secure gas sales agreements with industrial end-users, undertook capital raising exercises, and worked with the authorities toward receiving its exploitation authorization and domestic transport authorization licenses.

Monthly Focus
And the winners are.

Super Independent
It will come as no surprise to those who are familiar with African E&P operations that Anadarko undertook a jampacked work program with tremendous success last year. Anadarko realized success with the drill bit, adeptly drilling several deepwater discoveries and opening up new plays in the offshore frontier of East Africa, Mozambique specifically. It also proved up its 2009 West Africa discovery with another 2010 strike on its Sierra Leone acreage and progressed its El Merk development and related CPF facilities in Algeria. These feats, among others, are impressive and have earned the company the nod from our Survey Committee once again. Petroleum Africa gladly names Anadarko Petroleum Corp. its 2010 Super Independent award winner.

Large Independent

Anadarko Petroleum Corp.

While all of our finalists in this category had a fantastic run over 2010, we felt Afren had the edge. The company undertook an aggressive and successful development program in Nigeria geared to more than double its production this year. The additional revenue will serve Afren well in funding upcoming exploration in highly prospective East African acreage following its purchase of Black Marlin Energy and subsidiaries. In addition to this, Afren conducted a workover program in Cote dIvoire and upgraded its prospects in Ethiopia and Ghana toward drill status. It is for these accomplishments that Petroleum Africa finds Afren deserving of its 2010 Large Independent award. Congratulations, well done Afren!

Afren plc

Co-winners

Mid-Size Independent
Year after year Ophir Energy has plugged away on the corporate front, growing an African portfolio that even Tullow could admire. Ophirs efforts have begun to payoff over the past few years resulting in deep-pocket partners joining the game and impressive drilling programs offshore the east and west coasts. Over 2010 the company exercised corporate savvy, reducing its risk in the AGC Profond while gaining access to acreage in Senegal on reasonable terms, and bringing BG Group into its deepwater East African acreage. Ophir was no slouch on the technical side either, completing conceptual field studies, a 3D seismic interpretation program, and drilling two deepwater discoveries. It is for these accomplishments that Ophir Energy is Petroleum Africas 2010 Mid-size Independent award winner. Congratulations Ophir!

Small Independent

Ophir Energy

Discovery of the Year

While many of our finalists in all categories had significant discoveries in their own right, there was no doubt by our Survey Committee that Anadarkos three natural gas discoveries offshore Mozambique earned it the Discovery of the Year award. Not only were each of the discoveries significant in size, but also proved up a new hydrocarbon province for future industry exploration. And if indeed the fourth discovery, the Ironclad, is confirmed to have found oil, the game will have changed for exploration offshore the entire coast of East Africa. Congratulations to Anadarko for becoming a twofold winner in this years Survey & Awards!

Anadarko

This year the run for the Small Independent award was tight, and a clear consensus by the survey committee was not reached, leaving no choice but to award co-winners. This year the award is shared between Circle Oil and ADX Energy. Circle Oil, for the third year running, makes it to the winners circle. The company added to Moroccos gas reserve totals through its drilling program and added to its acreage position. Circle also had a participating interest in major drilling programs in Egypt, adding to its production totals over the year. In Tunisia Circle firmed up work plans and finalized technical studies for drilling. ADX Energy, the co-winner, managed to wheel and deal its way into drilling in Tunisia with little or no cost to the company. Its deal making ability brought in partners on its assets which led to a discovery with the drilling of the deep offshore Lambouka-1 well. ADX also extended its stay in Tunisia and conducted technical studies on the Chorbane Permit, maturing leads for its drilling program this year, and significantly upgraded its reserves totals on the offshore Dougga discovery. Congratulations to Circle Oil and ADX Energy for taking the Small Indpendent award!

ADX Energy & Circle Oil

Indigenous Independent of the Year

While not winning the Super Independent award where it is a finalist, Sasol is well deserving of the 2010 Indigenous Independent Award for its aggressive expansion program to bring Mozambican gas south, which included facilities expansion and a drilling program. It also added a license for the Karoo shale hunt, and showed moxy in further expanding its exploration portfolio internationally, picking up Block AC/P 52 in Australia. Congratulations to Sasol, Petroleum Africas 2010 Indidgenous Independent Award winner!

Sasol

Operator of the Year

We are the World, or at least We are Africa could have been Tullows catch-phrase over 2010. The company has taken itself from coast to coast in Africa over the year working deals, drilling wells, and making discoveries. In Uganda, the company managed to negotiate itself out of a difficult situation, bring in new partners, and drill 10 wells. The company also wheeled and dealed itself into more than one block in Kenya and some frontier acreage in Ethiopia. All of this combined with bringing Ghanas sophisticated subsea development online just 40 odd months after discovery while adding more discoveries off the countrys coast, earns Tullow Petroleum Africas Operator of the Year Award. Congratulations on another brilliant year!

Tullow Oil

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Local Impact

By Leo Ochira South Sudan Contributor

SOUTH SUDAN Rallies its Expats

We have the longest boarder to be controlled militarily but the (Republic of South Sudan) RoSS will always work with the northern counterpart to maintain security in the region, said Major General Gier Chuang Aluong, Minister of Interior, Government of South Sudan. April 29, 2011. Just about a month ago when the Minister made this statement while addressing a cheerful crowd in Cairo, Egypt many South Sudanese were concerned over Abyei issues being unresolved before July 9. But Aluong tried to allay their fears. The Government of South Sudan (GoSS) under leadership of the SPLA and its president Salva Kiir has no intention to go back to war with the north, Aluong said. However, he also expressed concern and warned that Abyei could possibly push the south back to war with the north. The Minister said he wished the north would not continue its ongoing campaign of sponsoring insurgency. Aluong said the military build up in the region was real, resonating reports by Hollywood actor and Sudan activist George Clooneys monitoring agents. He also said the massive military machines of Khartoum were just 20 miles away from the boarder waiting to occupy Abyei and to occupy the rest of South Sudan. He went on to say that nobody should be surprised if the two sides plunged back to war after July 9, because of Khartoums provocative attitude. Examples of provocation include ignoring the international ruling in The Hague regarding Abyei, its support of the Lords Resistance Army, extending its boarder into western Bar el Ghazal, and bombing southern territory as witnessed during the referendum voting in January. By May 23, the northern Army had rolled into the town of Abyei and is still occupying it. The president of the Republic of Sudan [the north] gave the green light to his general in Abyei to attack any element that posed a threat to his forces without his concurrence. In some circles this sounds like a declaration of war from the side of the north, not a state that is still a peace partner with South Sudan. However, the president of South Sudan has called upon his peace counterpart in the north to withdraw his forces from Abyei unconditionally. Khartoum has said they are willing to negotiate over Abyei, but their military will stay put for the meantime.

Minister Aluong responded to Minister Aluong many questions raised by different groups representating chiefs and women to youth and students. Aluong also briefed his audience on the general security situation in South Sudan. He said out of the ten states of the RoSS, Jongolei is the state that experiences the most trouble due to cattle rustling and child abduction among the tribal communities. Regarding renegade former SPLA commander George Athor who is from the same district as the minister, and those who followed his example like David Gadet, Aluong says they continue to receive support from Khartoum whose aim is to destabilize GoSS. He said Khartoum is responsible for most of the troubles in the South by providing weapons and ammunition even to those tribes that raid cattle from others. There is more than enough evidence he said, pointing to aircraft captured by SPLA forces last year while it was airlifting Georges followers to a training location. The craft was registered to Khartoum Aviation Service. He said we can confirm that by tracing back the aircraft to the manufacturer to find out who has purchased it in the first place. In regard to the question of corruption in the RoSS, the Minister responded by saying that corruption is not an institution in South Sudans governing system, but an individual choice of some government officials in the system and GoSS is trying to get rid of them. There is no one who is above the law in the RoSS, Aluong said. The Minister cheered up the crowd with some positive answers regarding their questions and concerns, including allegations by the UN about

Petroleum Africa Magazine June 2011

Images: Leo Ochira

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Local Impact
recruits abused in the UN-sponsored police academy in Rajaf. He said those stories were either untrue or isolated incidents, and those who claimed to have been victimized had the right to come forward and file a complaint against those abusive officials. He went on to say that training must be tough in order to build a solid and disciplined police force in South Sudan. Those who do not measure up to the standard must step aside and look for other employment opportunities instead of making up stories. He also said the UN threat to withdraw funds from the Police Academy is even more inhuman than an alleged abuse in the center. Aluong is widely respected by his fellow government officials as well as international agencies, for his role in improving security in the capital of Juba, especially during the referendum. He designed a program that reined in idle young men and women from the streets of Juba and other South Sudan state capitals, and trained them in security and to eventually become special police forces tasked with keeping order in all of the South during the referendum vote in January. He is also known for disguising himself and driving civilian vehicles around Juba at night to catch his officers off guard. His philosophy is to get firsthand information about police officers on duty and the security in the city. Regarding the press restriction, Aluong said South Sudan boasts the most liberal and free press in the region. He said even those who are insulting our president and general are free and protected, in response to a question I put to him regarding an alleged January raid of The Citizen Juba, the local newspaper, by intelligence officers. Aluong said those responsible might have been some criminal elements that carried out the raid. Aluong assured the South Sudanese group in Cairo that new ID cards and passports would be provided to all citizens, including those children who were born of South Sudanese mothers but abandoned by their foreign fathers. And he promised to discuss the security situation of the South Sudanese with his counterpart in the Egyptian government. Aluong also encouraged the South Sudanese in Cairo to establish partnerships with Egyptian businessmen in order to bring business to South Sudan instead of waiting for government employment. Aluong was on an international tour just two months ahead of the official scheduled July independence date for the Republic of South Sudan (RoSS). The purpose of this tour according to the Minister was to address some of the many questions the citizens of RoSS put forward to him. Issues of new passports and national identity cards for South Sudanese living in diaspora have been in the plans of the RoSS, he concluded.

African Focus
By LeAnne Graves Associate Editor

COTE DIVOIRE
Politics and Economy

ith over 60 ethnic groups present, Cote dIvoire boasts a diverse cultural background going back to the first French settlers in the 17th century. Over five million non-Ivoirian Africans reside in the West African nation with one-third from neighboring Burkina Faso while the rest originate from Ghana, Guinea, Mali, Nigeria, Benin, Senegal, Liberia, and Mauritania. Cote dIvoire officially became a French colony in 1893 after being under the European nations protection following the 18th century invasion from present-day Ghana. Prior to 1946, the country, considered a part of the Federation of French West Africa, was under French rule but without the rights of citizenship or representation in Africa or France. However, the French government made extensive reforms in 1946 to reward African loyalty during World War II including granting French citizenship and abolishing slavery. And 10 years later the 1956 Overseas Reform Act transferred a number of powers from Paris to an elected territorial government. Independence was granted on August 7, 1960 with Felix HouphouetBoigny elected as the first president of the republic; he ruled until his death in 1993. The president helped Cote dIvoire become one of the most stable and prosperous countries on the continent during his over three-decade reign. That prosperity, however, came to a halt with Houphouet-Boignys successor, Henri Konan Bdi. Cote dIvoire suffered during the Bdi years as world market prices fell for the countrys primary exports cocoa and coffee. Corruption and misappropriation of funds led to steep reductions in foreign aid in 1998 and 1999, resulting in the nations first coup in December 1999 which ended Bdis presidency. The bloodless coup, led by General Robert Guei, saw the creation of a national unity government and a new constitution in 2000. However, mounting tensions between the north and south along religious and ethnic lines grew. Elections were originally scheduled for the fall of 2000, but the Generals Supreme Court disqualified all of the candidates from the two major parties, Houphouet-Boignys Parti Democratique de la Cote dIvoire (PDCI) and Rassemblement des Republicaines (RDR), leading to only two candidates: Guei and Front Populaire Ivoirien (FPI) candidate Laurent Gbagbo. The interim leader disbanded the election commission after early polls showed Gbagbo as the

frontrunner. Guei declared himself the winner, but a popular uprising which included defected soldiers forced the General to flee. A coup attempt occurred in 2001, but was laid to rest as local municipal elections were accomplished a few weeks later without incident and the full participation of all political parties. Although Gbagbo formed a de facto government of national unity that included the RDR party in August 2002, the next month saw another coup attempt with exiled military personnel and other conspirators attacking government ministers and facilities. The government-ousting plot was foiled, but the attacks resulted in the deaths of Emile Boga Doudou, then Minister of Interior, and several high-ranking military officers. The government launched an aggressive security mission that demolished a number of immigrant and Ivoirian shantytowns, displacing over 12,000 people. Trouble continued for Cote dIvoire as the failed coup attempt evolved into a civil war with rebel group Patriotic Movement of Cote dIvoire (MPCI) controlling the north. Then two new rebel groups the Ivoirian Popular Movement for the Great West (MPIGO) and the Movement

President: Alassane Ouattara (December 4, 2010) Independence: August 7, 1960 (France) Population: 21,504,162 GDP (purchasing power parity): 37.8 billion (2010 est.) Real GDP Growth Rate: 3.6% (2010 est.) Per Capita GDP: $1,800 (2010 est.) Minister of Mines and Energy: Adama Toungara Oil Production: 58,950 bpd (2009 est.) Oil Consumption: 24,000 bpd (2009 est.) Proven Oil Reserves: 250 million barrels (January 2010) Natural Gas Production: 57 Bcf (2008 est.) Natural Gas Consumption: 57 Bcf (2008 est.) Natural Gas Exports: N/A Proven Natural Gas Reserves: 1 Tcf (2008 est.)
Source: CIA World Factbook April 26, 2011 and EIA July 14, 2010

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for Justice and Peace (MJP) formed in the western part of the nation, allying with the MPCI. In 2003, the Economic Community of West African States (ECOWAS) sent approximately 1,500 peacekeeping troops from five neighboring countries to help Frances 4,000-member peacekeeping force. The troops maintained the east-west ceasefire line, known as the Zone of Confidence, dividing the country. Although tensions remained, the country had begun seeing signs of rehabilitation. According to the US State Department, non-African expatriates constituted roughly 10,000 French and possibly 60,000 Lebanese. The government website said, As of mid-November 2004, thousands of expatriates, African and non-African, had fled from the violence in Cote dIvoire. However, many expatriates are slowly returning. The countrys first presidential election since its civil war was scheduled for October 2005, and delayed six times. Finally in 2010 the longawaited democratic vote became a reality. Gbagbo faced 13 challengers with the most popular opposition candidate being from the pro-rebel north, Alassane Ouattara. The UN deployed 9,000 peacekeepers, and in the month prior to elections Gbagbo passed the final 5.7 million person voter roll with the government handing out millions of identity cards. It was said that an estimated $400 million was spent on the stateof-the-art biometric IDs with some observers saying that it was the most expensive election in the world. The November 28 election saw Ouattara win the popular vote for president, but Gbagbo refused to recognize the results. It wasnt until Ouattara loyalists backed by French and UN troops forced Gbagbo from power on April 11 this year, that Gbabgo was removed, ending a four-month power struggle that resulted in thousands of deaths. However, fighting has continued between Ouattaras supporters trying to overtake forces in pro-Gbagbo areas of the capital Abidjan and other areas in the Yopougon district. The new president promised to launch a South African-style truth and reconciliation process with some of Gbagbos supporters disarming. Ouattara launched a criminal probe against the ousted leader, his wife, and 100 other close associates alleging human rights abuses, including the attacks led by Gbagbos security forces on opposition protestors after the election. Ouattara assured that a new unity government, including members of Gbagbos party, would be formed by the end of May with hopes of restoring full security to the country by June. However, the new president also faces human rights allegations with Human Rights Watch releasing a report on April 9 that said Ouattaras loyalists killed hundreds of civilians, raped over 20 Gbagbo supporters, and burned at least 10 villages. Ouattaras envoy to the UN rejected the allegations, but the president said that justice must be applied across the board for all those guilty of atrocities. The bloody political crisis has left the worlds top cocoa producers economy paralyzed. Although the West African country is an oil producer, the economy remains tied to its agricultural sector which is responsible for 24% of its GDP, according to the US State Department. Its major crops beside cocoa include coffee, timber, rubber, corn, rice, and tropical foods. Petroleum was discovered in 1977 and production began in 1980. The exports of crude oil and refined oil products totaled $2.97 billion in 2008. Cote dIvoires export numbers totaled about $10.9 billion in 2008. Most of the countrys exports hit its top trading partners including Germany, Nigeria, the Netherlands, France, and the US. For its import market, Nigeria, France, and China make up the bulk supplying items like fuel, consumer goods, and capital goods. However, because of the most recent instability within the country, the economy came to a halt with exports frozen briefly in late-January. The quality of living had seen a sharp decline in the 1980s and 1990s as a result of an increase in the population and an economic decline. A majority of residents depend on small landholder cash crop production with between 60% and 70% of Ivoirians working in agriculture. Abidjan was formerly West Africas economic capital, and it is attempting to achieve an economic rebound. The end of April saw a large number of international companies resume operations signaling a quicker recovery after more than a decade of conflict. Local and international financiers have restarted trade, to an extent, with authorities reporting that all banks within the country had reopened. The most significant sign is the African Development Bank (AfDB)discussing its move back into the country after leaving its Abidjan headquarters in 2003. The AfDB said in a statement that relocating its temporary headquarters from Tunis back to Abidjan was possible with recent positive developments, which it felt would in due course lead to improved security, permitting AfDB to return to its headquarters. While markets are temporarily on the uptick, the countrys economic stability hinging on the governments ability to provide consistency and security.

Cote dIvoire Upstream

Despite a civil war that erupted in 1999, Cote dIvoire saw its petroleum industry take off in 2001. Six years later, oil exports came in with 28% of the governments export revenues, edging out the countrys traditional export commodities of cocoa and coffee. And in May 2006, the West African nation announced its endorsement of the Extractive Industries Transparency Initiative (EITI) which gave it two years to become compliant with the organizations criteria which was seen as a way to further boost foreign investment in the hydrocarbon sector. On July 1, 2010, the EITI board agreed to grant Cote dIvoire a deadline extension to November 12, 2010 to complete validation. The country submitted its final Validation Report on November 11, 2011.

O&G Beginnings
Cote dIvoires proven recoverable oil reserves have been estimated at 250 million barrels according to the CIA World Factbook as of

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January 1, 2010. The country also has recoverable gas reserves of about 1.1 Tcf. The countrys oil resources were discovered in the 1970s with US-based international oil companies (IOCs) like Exxon and Phillips jumping in to secure licenses to develop several Ivorian fields. This resulted in a production increase that enabled Cote dIvoire to nearly meet domestic oil demand; however, these companies terminated their operations as a result of rising production costs and unprofitable profit sharing agreements; paving the way for the entrance of a host of independent firms. The countrys status as an oil producer advanced with the technologies of the day; prior to the mid-1990s the economic viability of Cote dIvoires reserves was not thought significant, but that changed when technologies in extraction advanced. However, by that time the majority of larger oil companies had pulled out of the country paving the way for the entrance of independent oil and gas firms. Today the countrys production is due in fact to a few well placed independent firms. Shortly after the Ivorian oil boom, the country established a state-run oil and gas firm, the Societe National dOperations Petrolieres de la Cote dIvoire (Petroci), to oversee operations in 1975. In 1998 the government restructured Petroci by dividing it into four entities which included Petroci Holding which was state-owned and responsible for the states portfolio management in the oil sector and the three subsidiaries: Petroci Exploration-Production (upstream hydrocarbon activities), Petroci-Gaz (natural gas), and Petroci Industries-Services (miscellaneous related services). However, the restructuring was unsuccessful resulting in another shuffle in 2000 that more closely resembled Petrocis original setup. Petrocis role now includes the development and maintenance of the main database on the countrys oil assets and the assumption of minority participation (generally between 5% and 15%) in offshore operations with international companies.

Viking Moorings
Addressing Cote dIvoires Mooring Challenges
African operators today are facing significant challenges and pressures in their mooring operations as they look to maximize the use of semisubmersible drilling rigs in exploratory drilling activities and ensure the greatest possible returns from their target fields. Such challenges include the increased focus in Africa on deepwater discoveries often in hostile and remote operating conditions and the sometimes variable water depths rigs must operate in, the complexity of todays subsea production systems that mooring providers must work around, and the all important need to manage costs. There is a need for mooring providers to move rigs as quickly and seamlessly as possible while, at the same time, ensuring that the integrity of assets and safety arent compromised. Against this context, pre-set mooring installations have become increasingly popular in African mooring operations. Establishing the mooring infrastructure in advance of the rigs arrival ensures greater precision and control over the positioning of the mooring solutions around existing infrastructure and improved safety as mooring solutions can be put in place months in advance. The result is a more strategic and flexible approach to supporting offshore installations and the maximizing of the use and value of the rigs.

E&P Today

Before being ousted, Laurent Gbagbos administration had an ambitious target to more than double crude production to 200,000 barrels per day (bpd). Although offshore resources are typically more costly to develop compared to onshore resources, Cote dIvoire is a special case. Offshore oil fields limit IOC exposure to political volatility and the civil war that exploded in 1999 did not have an effect on the countrys oil production. With recent oil discoveries along the Gulf of Guinea, including Ghanas Jubilee field, IOCs are landing in droves to reevaluate West Africas potential, Cote dIvoire included. Ghanaian Jubilee field operator Tullow Oil plc came full throttle into the Ivoirian scene with its midOctober 2009 announcement that its findings on the South Grand Lahou-1 wildcat well offshore Cote dIvoire would provide valuable proprietary insights into the ongoing prioritization of the numerous Jubilee-type prospects in the Equatorial Atlantic inventory. Tullows exploration director Angus McCoss said: The South Grand Lahou-1 wildcat follows a remarkable opening run of 10 successful exploratory wells in our Equatorial Atlantic licenses. This well found the reservoirs to be water-bearing at this location, but provides critical knowledge to guide the forward program which targets a number of Jubilee-like prospects in this exciting play fairway.

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Viking Moorings, a provider of total mooring solutions to the offshore oil and gas industry, recently installed a pre-laid mooring solution for Noble Drillings Homer Ferrington semi-submersible drilling rig which was to be moored at the Baobab oil field, off the Ivory Coast. The Baobab field, operated by Canadian Natural Resources (CNR), began production in late 2005 with initial production averaging 48,000 bpd. These production rates later declined, however, due to sand control problems. Part of the brief of the Homer Ferrington rig was to repair a number of these wells affected by sand.

Source: Prosafe Production

FPSO Espoir Ivorien

For the site in question, there were two separate drilling locations 1,000 meters apart which would have required two completely separate mooring systems if CNR was to adopt a conventional mooring strategy. Other challenges included significant differences in water depths between the shallowest and deepest anchors (600 meters), positive and negative seabed slopes, and an uneven depth in soft soil at each anchor location. This had led to previous problems in deploying conventional drag embedment mooring systems, resulting in considerable rig downtime. Viking developed a pre-set mooring solution so that the rig could skid between the two drill centers. A taut leg mooring system, using much shorter synthetic fiber ropes and with a more compact footprint than the more common catenary mooring systems, was deployed. Allowing both drill centers to be accessed from a single mooring pattern led to significantly reduced rig move time and improved mooring system performance with less riser downtime, less interruption to the drilling, and the optimization of drilling services using batch drilling. With careful management of the riser (due to the depth variations between drill centers), it was also possible to skid the rig with the blowout preventer (BOP) deployed. The mooring solution also only required Vertical Load Anchors (VLA) to be deployed once with no delays encountered and a reduction in Anchor Handling Tugs (AHT) investment. With the Homer Ferrington rig available for a fixed 365-day period, the operators original plan was to repair five wells which were failing due to sand production. With the time efficiencies made by employing a pre-lay mooring strategy, the operator was able to deliver four entirely new wells. The project was regarded as very successful with cost savings estimated by CNR to be in the region of $75 million.

While Cote dIvoire could be riding on Ghanas Jubilee coattails, the two countries have encountered disputes over Ghanas maritime boundary including Ghanas Dzata-1 drilled by Vanco Energy and Lukoil. Cote dIvoire claims that part of Ghanas maritime area is under Ivorian rule as the Gulf of Guinea border has never been formally demarcated although neighbors had respected a median line, according to Ghanas Lands and Natural Resources minister Collins Dauda on an independent radio station Citi FM. Both countries have submitted proposals on their sea boundary to the UN, which would be called upon to mediate if talks break down. The countrys main producer, Canadian Natural Resources (CNR), operator of the Espoir and Baobab, saw production slow a bit over 2010. The company said that its Q2 2010 production was impacted by a shut down planned at Espoir for installation of facilities upgrades. While the shut down impacted production totals for Q2 the completion of upgrades resulted in increased volumes for CNR. Production in the following quarter was within the companys issued guidance of 32,000 bpd to 35,000 bpd. And only 80 km west of the Jubilee offshore discovery is Block CI-202 which saw Rialto Energy Ltd. entering into a Heads of Agreement to acquire a 75% interest in C+L Natural Resources, Cote dIvoires offshore fields the holder of an 85% participating interest in Block CI-202. Rialto recently acquired the remaining 25% stake in C+L Resources, solidifying its position on the block even further. The block is a highly prospective petroleum exploration license that contains multiple pre-existing un-appraised oil and gas discoveries. While the company was anxious to get started with its exploration program on the block, the countrys civil strife put things on hold just a bit; however, Rialto did not remain idle during the downtime. During

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Source: Rialto Energy

African Focus
the period the company was able to further enhance its technical understanding of the acreage and to evaluate various drilling and development scenarios. The company said that this has resulted in manageable delays in respect of the implementation of the work program of approximately 3-4 months, with drilling now planned for Q2 2012. Rialto said that the mapping of drilling candidates in the Gazelle and Hippo areas is well advanced. In addition, ongoing subsurface work has allowed the identification of further substantial exploration upside. It is anticipated that the CI-202 Field Development Plan (FDP) will be ready for submission to authorities the early part of Q3. US independent Vanco Energy and Russian firm Lukoil are investing a substantial amount on their assets in Cote dIvoire. Over June-September 2009, Vanco Cte d'Ivoire Ltd. as operator, together with Lukoil and state oil company Vanco Energys assets in Cote dIvoire Petroci Holding, completed the acquisition of more than 2,000 sq km of 3D seismic data in Blocks CI-401 and CI-101 Currently, the location of the first exploration well in Block CI-101 is being defined, with the well planned to be drilled in 2011. The pair have already drilled in Cote dIvoire with some success. Drilling began on Block CI-401 with the Orca-1X-bis well being completed in H1 2010. The well penetrated the targeted objectives and discovered thin sandstone reservoirs. The well was drilled to a total depth of 4,015 meters below sea level in a water depth of 1,868 meters using the Deepwater Pathfinder was used in the drilling of the Orca-1X-bis Deepwater Pathfinder. Afren also contributes to the countrys production totals and saw production rates of about 5,088 boepd from Block CI-11. The company conducted a wireline workover program during the year to remove wellbore wax build up and obtain down hole pressure data. Afren is also the sole owner of the Lion Gas Plant, which processes gas from the CI-11 and adjacent CI-26 and CI-40 blocks operated by the previously mentioned CNR. NGL production at the plant in 2010 was 721 boepd. Not to be left behind, Total signed an agreement with Yams Petroleum to acquire a 60% interest in the CI-100 offshore license, allowing the French major to become the project operator. The block covers almost 2,000 sq km in water depths ranging from 1,500 to 3,100 meters. An initial 3D seismic survey was already carried out by Yams Petroleum. Exploration work will include a new 1,000 sq km 3D seismic survey, which will complete coverage of the block and drilling of the first well is expected in 2012. Marc Blaizot, senior vice president, said: This is a promising area whose geological objectives are similar to that of major discoveries that have been made in neighboring Ghana.

Source: Vanco Energy

Disruptions

While many companies see great hydrocarbon potential in the country, some have been forced to stop operations after continued fighting following presidential elections. US independent Anadarko Petroleum Corp. declared a force majeure in Cote dIvoire. With interest in two blocks off the coast the CI-105 where it is operator with a 55% stake, and the CI-103 block where it holds a 40% stake the company said that it was uncertain when it would resume operations. However, Anadarko was not the only company to shut-in operations with Vanco Energy and Lukoil Overseas concessions also grinding to a halt. The companies declared a force majeure in April in accordance with the provisions of the PSCs for Blocks CI-101 andCI-401. Vanco said that the partners were determined to resume active work on the blocks as soon as it was feasible and once the situation in Cote dIvoire stabilized.

Source: ERHC

Outlook

With structural similarities to its neighbors Jubilee Field, Cote dIvoires basins have been viewed as a promising option for future oil and gas discoveries. The gas reserves discovered in the 1980s have started to be developed and utilized, with the main producing fields being Panthere, Kudu, Eland, Ibex, Gazelle, and Foxtrot. The country was poised to become a regional hydrocarbon exporter at an earlier stage, however the overall instability within its borders (currently and in the past) left its position as a regional supplier in limbo.

Cote dIvoire Downstream

Although the country is a modest oil producer, Cote dIvoire is an important regional refiner, or it would be if it could keep its one refinery supplied with enough feedstock, and see the lifting of sanctions imposed by Western governments following the outbreak of violence due to election results last year. The nations one refinery, the Societe Ivoirienne de Raffinage (SIR), is located at Abidjan and has an adjacent bitumen plant. The 80,000 bpd refinery processes oil production from the Lion and Panthere fields. It also receives crude oil from other countries in the West Africa region and then exports products back to those neighboring countries. The state owns 47.3% of SIR with other partners including Burkina Faso, Total, Shell, ExxonMobil, and Chevron. Exports are sent to Mali, Burkina Faso, Niger, and Chad and other fuel depots are located at Bouake and Yamoussoukro. In February the refinery began facing problems, operating at minimum capacity, struggling to secure crude oil due to sanctions imposed following incumbent president Laurent Gbagbos refusal to step down from power after losing the countrys presidential election. Continued fighting has placed persistent strains on the countrys refining capacity and Petroleum Africa.com reported on March 31 that the countrys only refinery may have to close completely. News sources quoted SIR managing director Joel Dervain as saying, By mid-April if we have no crude, the whole refinery will be shut down. He continued, We have no financial means to purchase the crude oil because all the assets were frozen. We have been under sanctions. We have filed legal proceedings. We are waiting for the results. At the end of March, the plant was operating at a rate of 25,000 to 30,000 bpd and was fast running out of crude. At the time of press, no further updates were given on the SIR situation, but on April 5 the African Unions chairperson of the Commission on the Situation in Cote dIvoire Jean Ping instructed the Ministry of Energy and Mines to reactivate the SIR refinery for the supply of butane gas and fuel. The Commission also asked that sanctions be lifted while France and the European Union have agreed to provide a line of credit for 400 million and 200 million, respectively. Other projects possibly in the works include a second refinery dubbed the Cote dIvoire Peace Refinery. The project has been in the works for awhile and could potentially process 100,000 bpd of West African crude oil. Petroci Holding and Houston-based WCW International Holding Co. agreed to jointly develop the $2.8 billion project. The companies debuted a new website in June 2008 to promote the second refinery, but no information has been posted on the website since then. In August 2009, Petroleum Africa reported that the refinery was already in jeopardy before breaking ground with sources claiming the government continuously stalled on crucial financial decisions. While Peace Refinerys site claims that it would be the largest and most technologically advanced refinery operating in the region once it goes online in 2012, the progress of the project remains a mystery.

Power and Alternatives

The Commission also directed the nation to promptly repair water and electricity networks. The majority of Cote dIvoires electricity is generated through natural gas-powered stations with hydropower accounting for 20% of its energy generation. The International Energy Association said that more than half of the countrys domestic energy needs are met through the use of combustible renewables and waste. The resources from the Foxtrot offshore gas field, as well as the Panthere gas and condensate field are used for local power generation with the excess being sold to neighboring Ghana. The use of gas-fired electricity plants turned the country into a regional exporter of electricity and the former Gbagbo-led government made rural electrification a main priority. The governments ambitious plan was to connect 200 rural districts to the national grid every year as less than 15% of the population residing in rural areas had access to electricity compared with 77% in urban areas. Cote dIvoires electricity supply is a monopoly dominated by Compagnie Ivoirienne dElectricite and renewable energy is not promoted as widely as conventional forms of power generation. A report released by Renewable Energy in Developing Countries (RECIPES) said that in 1979, the gross theoretical hydropower potential in the West African country was estimated at 46,000 GW per year while the economically feasible potential was 12,400 GW. However, of a total 973 MW of power plant capacity in existence, only 614 MW of hydropower is in operation. Yet Cote dIvoire was making a push for privatization of the energy and water sectors with an increased emphasis on thermal production. Waste-to-energy projects are cropping up in sub-Saharan Africa like that started by Abidjan-based company Biokala. The firm established partnerships with agro-industrial groups in Africa in hopes of becoming the largest continental green electricity producer. ecosur Afrique is helping to coordinate the CDM process and to structure the carbon credits forward sale. The project involves the installation of a 60-MW biomass power plant that will have a forward sale of 2.1 million CERs over the next seven years. Biokala plans to use 400,000 tons of byproducts recovered through logging campaigns of oil palm plantations meaning trunks and leaves from pruning. This will fuel the power plant with 60 MW of installed power capacity, and the electricity generated will be exported to the national grid. The annual greenhouse gas emissions reductions are estimated at 300,000 tons of carbon dioxide equivalent.

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African Focus
By Jennifer Nickle, Deputy Editor LeAnne Graves, Associate Editor

TUNISIA
Politics and Economy

unisia has been long considered an important location as it is home of the ancient city of Carthage. It was a pivotal player in the Mediterranean that had many historical figures including the Romans, Arabs, and Ottoman Turks using it as a vital shipping route because of its strategic location in North Africa. Following suit, a rivalry was created between Italy and France during the 1800s for the territory with France edging out its neighbor, making Tunisia a protectorate in 1881. After years of struggling for independence following World War I, Tunisia was granted independence in 1956. The countrys first president Habib Bourguiba led negotiations with France, dominating Tunisian politics for over three decades. Bourguiba was ousted in a bloodless coup in 1980 by Zine el Abidine Ben Ali, although doctors declared Bourguiba unfit to govern because of senility. Ben Ali was born in 1936 in Hammam Sousse and was Tunisias ambassador in Warsaw in 1980. He became prime minister in October 1987 before being sworn in as president. Ben Ali maintained control by changing the constitution twice which allowed him to remain in office for up to five terms. The constitution changed in July 2008 to lower the voting age to 18 and permitted the head of any political party to submit their candidacy for president. The president, from the ruling Constitutional Democratic Rally (RCD), was set to retire in 2004, but changes to the constitution allowed him to run for two more terms. Although the October 2009 elections had Ben Ali winning by an overwhelming majority, the country, previously viewed as stable, began seeing civil disturbances in December 2010. Street protests erupted in January over high unemployment rates, corruption, and poverty spawned by a university graduate turned fruit and vegetable vendor that set himself on fire. Food prices began to soar which led to the outbreak of riots and hundreds of deaths. Ben Ali dismissed the government and the same day fled to Saudi Arabia with Tunisia declaring a state of emergency on January 14. Exiled Ben Alis prime minister Mohammed Ghannouchi formed a unity government which included some opposition figures, but angered protestors and some of his new cabinet after picking several members from Ben Alis troop. Ghannouchi resigned and the North African country swore in its interim president Fouad Mebazza, former head of the lower house of Parliament. Mebazaa has said that the interim government would

manage the transition to democracy until a representative council is elected to rewrite the constitution. Presidential elections were scheduled to be held in July but have since been postponed until mid-October. The UN has said that some 300 people died in the Tunisian uprising with 700 injured between December 17 and January 14. The country remains in limbo today. Protests continue, many Tunisians are fleeing to Europe, and the country is struggling to handle Libyan evacuees. Over the past few months several hundred thousand Libyans have crossed over into Tunisia to escape fighting between Muammar Qaddafis regime and opposition forces. And while unrest is still present, risk mitigation firm AKE Ltd. said that the country continues to present a good opportunity for businesses wise enough to assess the situation properly. Tunisias real GDP growth rate began stabilizing after the global economic crisis saw it decrease to 0.3% in 2009 compared to the almost 5% in 2008. However, 2010 levels reached 3.4%, showing positive signs of recovery. The North African countrys economy is diverse with importance lying in its agricultural, mining, tourism, and manufacturing sectors. Over

Interim President: Fouad Mebazaa (since January 15, 2011) Independence: March 20, 1956 Population: 10,629,186 GDP (purchasing power parity): $100.3 billion (2010 est.) Real GDP Growth Rate: 3.4% (2010 est.) Per Capita GDP: $9,500 (2010 est.) Oil Production: 91,380 bpd (2009 est.) Oil Consumption: 89,000 (2009 est.) Proven Oil Reserves: 425 million bbls (2010 est.) Natural Gas Production: 2.97 Bcm (2008 est.) Natural Gas Consumption: 4.22 Bcm (2008 est.) Natural Gas Exports: N/A Proven Natural Gas Reserves: 65.13 Bcm (2010 est.)
Source: CIA World Factbook April 26, 2011 and EIA July 14, 2010

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the past decade, the government has relaxed its grip and increased privatization. Tunisia was hurt during the economic crisis as its economy is heavily hinged on its largest export market, Europe. It was able to mitigate some risk from declining exports by focusing on its non-textile manufacturing sector and increasing its services sector. The manufacturing sector accounts for a great deal of the Tunisian economy covering various sectors like textiles, food processing, mechanical and electrical industries, construction materials, and chemicals. Yet the recent political crisis has impacted all of the North African countrys economic drivers. Tunisias central bank said on May 26 that while agriculture and manufacturing for export were showing signs of improvement, tourism, transportation, and its chemical sector were continuing to dip. One of the biggest determinants to its economy is tourism, expected to represent 8.9% of its GDP in 2011, and directly support 246,000 jobs, according

to the World Travel and Tourism Councils 2011 Tunisia report. The Council also expects the number of international visitors to reach almost 6.7 million in 2011.

COUNTRY FACTOID Important Tunisian tourist destinations include the historic site of Carthage and the many locations in the desert where the film Star Wars was shot.
Foreign direct investment will continue to play a large role, but fears over stability could deter companies. AKE said that international firms will need to stimulate the Tunisian job market saying that it will take more than a replacement of leaders to boost the economy. The companys senior risk consultant John Drake said, If foreign investors do not return soon, the new government will face the same problems as the old one.

Tunisia Upstream
Tunisia has one of the smallest production bases on the continent although its production totals belie the amount of activity in the country as its oil and gas industry happens to be one of the most bustling in Africa. The country sees companies exiting on a regular basis, with no negative impact on the industry as there are many more lined up to enter Tunisias petroleum scene to take their place. While not the power house producer that neighboring Algeria and Libya are, Tunisia still manages to draw the interest of exploration firms from far and wide. The country continually attracts interest from independent and major firms alike. Companies ranging from majors like British Gas (BG) and Italys ENI to smaller independent firms like Chinook Energy and Candax Energy. There are roughly just under 60 companies operating in the country; this number has remained just about the same over the past few years, although the line up of companies has changed. The countrys oil and gas industry is run by state-owned oil and gas company Entreprise Tunisienne dActivitis Ptrolires, or ETAP. The firms ability to promote its hydrocarbon potential with excellent results year after year, and attract new investment into its relatively small acreage area is highly laudable. The state-run firm actively participates in the development of many of the licenses as partner and/or operator, and as a result has enhanced its technical capabilities enabling it to be a competent technical partner inside or outside of the country. The company also assists the government with bid rounds and farm-in negotiations. Tunisias production, currently sitting at around 95,000 bpd, is produced from six main fields with the remaining production coming from 29 smaller concessions. The major producing fields are the El Borma, Ashtart, Ouedna, Adam, Didon, and Miskar; these fields contribute to over 75% of Tunisias production capacity. The country, besides being blessed with oil reserves, also has natural gas reserves and produces about 6 Mmcm/d, which comes mainly from the offshore Miskar gas field and other small fields, namely El Franig/Baguel/Tarfa gas fields and Oued Zar/Hammouda, Adam, El Borma, Djebel Grouz, and Sabria oil fields (associated gas). BG Group is the largest producer of natural gas in Tunisia, supplying approximately 50% of the domestic gas demand from the Miskar field. BGs net production in Tunisia during 2009 was 12.7 Mmboe. The company saw production of gas and condensate from the Miskar field and gas from Hasdrubal. BG drilled five successful wells as part of the Miskar infill drilling campaign between 2007 and 2009. The wells further extended the field production plateau and contributed to increased production levels over 2009. BG brought the Hasdrubal onstream in December 2009. The company saw its production increase over 2010 due to the ramping up of production from the Hasdrubal. In Q3 the company shut down the gas processing facility for design modifications; the facility had an anticipated restart date in H1 2011. BG also drilled the Miskar A19 development well over the past year. BG is operator and joint permit holder of the 1, 016 sq km Amilcar exploration permit, offshore Sfax in the Gulf of Gabs. In 2009, the company was granted a new extension to this permit, which now expires in December 2011. Pioneer Natural Resources drilled on the Cherouq and Anaquid blocks over the period with good success. The company drilled the El Badr-3 and the Cherouq-2 wells, located in the Cherouq Concession, and the Mona-1 well, located in the Anaguid Exploration Permit. The wells are expected to add an initial gross production rate of approximately 10,000 boepd from the Silurian sandstone intervals. The Mona well is a significant Silurian discovery in the Anaguid Permit and opens up a number of new exploration opportunities in this area. At the start of

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African Focus
2011 Pioneer announced that it had sold its Tunisian unit to Austrias OMV. The $866 million deal closed in mid-February. The acquisition of Pioneers assets in Tunisia added to OMVs portfolio in the country, but it was not the only achievement that the company saw. Four gas-condensate discoveries were made in the OMV-operated Nawara production concession in 2010. The four discoveries in 2010 bring OMVs success total up to nine consecutive hits. The company said that these successes are both commercially and strategically important as they increase the chance of making further commercially viable discoveries. Moreover, the drilling campaign proved-up enough resources to justify the start of the South Tunisian Gas Pipeline (STGP) project. While the company made new discoveries over the year it also saw its production decline to 6,500 boepd, mainly due to the natural decline in the mature Ashtart and TPS fields. PA Resources holds stakes in 10 licenses in Tunisia, including one of the countrys largest producing fields the Didon Field. Production from the offshore Didon Field, was temporarily interrupted due to the situation in Libya. The restart of production on the remote-controlled platform was delayed due to bad weather combined with flight restrictions in the area; however, it is now operating normally. The onshore Jenein Center license saw the Jenein Centre-1 exploration well drilled during PAs 2010 program. The well was suspended due to an unsuccessful completion attempt on the first formation tested. PA said that the well will be re-entered at a later date to complete the secondary target of the well the Ordovician formation. Chinook Energys subsidiary Storm Energy is the operator of the well with a 65% interest and PA Resources holds 35%. Candax Energy holds a few permits in Tunisia and is the operator of the Ezzaouia Field and the El Bibane. In April 2010 the company reported that its work-over intended to reconnect the parted tubing on the El Bibane 3 (EBB-3) well was completed. The work-over commenced on March 19 and the jack-up barge was released on April 2. After the completion the company turned its energies to Phase 2 of the EBB-3 and EBB-4 well interventions. Phase 2 will see a rig-based intervention that is expected to commence mid-year. Until the well interventions are undertaken, wells EBB-3 and EBB-4 will remain shut-in. On the Ezzaouia field the workover program began and included two sidetracks to existing, but non-producing wells, as well as contingent workovers on two further wells. Candaxs Robbana field is located in southern Tunisia on the island of DJerba. Following the identification of a three million barrel Contingent Resource by Ryder Scott and the confirmation by a reservoir study conducted by Petroleum Insights, Candax intends to resume production from the existing Robbana-1 well where pressure has built up during the 20-month shut-in. Candax will also drill a new producer well on Robbana during 2011. Candax believes there is substantial upside potential at Robbana and, concurrent to the new well Candax intends to implement a focused forward work program comprising 3D seismic and a pilot water injection well. ADX Energy, formerly AuDAX Resources, has acreage in Tunisia as well as acreage in the Sicily Channel between Tunisia and Italy. The company saw the Southern Cross rig arrive on site for drilling in mid-2010, with the spud of the Lambouka-1 well occurring shortly thereafter. Drilling hit a snag in August when bad weather prevented the installation of the Blow Out Preventer (BOP) on the well head located on the sea floor. The company experienced further difficulties when trying to latch the BOP onto the wellhead. Modifications of the BOP to wellhead connection were necessary. The BOP stack was subsequently reinstalled and successfully pressure tested. Although the company experienced a few snags along the way, the well was declared a discovery in September. ADX followed the Lambouka-1 with the issuance of a drilling tender for a well on the Chorbane Permit. Once the rig was selected the company made plans to drill the Sidi Dhaher-1 but the poor security situation in the country at the time led to a Chorbane exploration asset drilling delay. In mid May drilling had still not taken place though the Tunisian authorities told the company that the drilling of the Sidi Dhaher well is a priority and the required level of government authority supervision to ensure safe mobilization and efficient drilling operations would be provided. The government also granted ADX an extension on the current exploration period for the Chorbane Permit. The permit was extended for one year taking ADXs exploration period into July 2012. Winstar Resources has a number of operated concessions in Tunisia. The Chouech Essaida, where it holds a 100% operated interest, produces at a rate of about 1,400 boepd from seven producing wells. The company drilled the Chouech Essaida 8S (CS No. 8S) and after 42 hours the well flowed at a stable rate of 1,625 bpd of oil (2,200 boepd of total hydrocarbons) commingled from two zones in the Triassic reservoir. In November the company reported that the testing of the next well, the CS #13 well, was unsuccessful in establishing production and the well has been suspended. Testing on the Chouech Essaida Silurian #1 well began earlier this year. The company tested five intervals within the Tannezuft and Acacus Silurian formations The company said testing demonstrated that commercial quantities of crude oil, condensate, and natural gas are possible within Silurian age sandstones on the Chouech Essaida and Ech Chouech Concessions. The well tested at a combined rate from all five intervals of 3,379 boepd. Storm Ventures (a Chinook Energy subsidiary), Cooper Energy, and RAK Petroleum saw resources on the Hammamet Offshore License increase 37% over the past year. The increase came following the interpretation of the high resolution 3D. Cooper said that the increase in resources confirmed the attractiveness of undertaking further appraisal work on the oil field. The resources on the field increased even further earlier this year following additional specialized processing on the Hammamet 3D seismic dataset, further examination of the petrophysical log data, and a detailed review of the Hammamet West-2 production well tests. The base case Hammamet West Oil Field contingent resource estimate for the Abiod Formation reservoir has grown from 57 to 101 million barrels of oil (P50 proved oil-down-to scenario).

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Source: ADX Energy

Bir Ben Tartar formations in the TT2, TT3, and TT4 wells, the completion of the better quality Upper Bir Ben Tartar in TT3, and an experimental completion in the Tannezuft shale in the TT3 well. According to the partners the results as a whole were encouraging and in line with expectations, but Chinook said that it clearly is at the very early stages of understanding the reservoir distribution, productive capability, and potential recoveries. On its Adam project the company continued to see oil production curtailed as gas oil ratios increased. The sanctioning of the STGP will aid the company in increasing oil production and the commencement of production of non-associated natural gas from the Acacus and the Ordovician. Chinook also participated in the drilling of an exploration well on the Bochra prospect on the Borj El Khadra block in March 2011, operated by OMV, which led to a discovery in the Acacus and Ordovician. The company said that it expects the operator to submit a concession application on a large portion of the permit before the end of 2011. The Tannezuft hot shale was cored in this well and a completion decision will be made following a full petrophysical and core evaluation. Chinook also plans to propose a workover of the Acacus and completion of the Ordovician zones for late-2011 or early-2012 at Jenein dependent on service rig availability. Petrofac, through its Energy Developments has a 45% operating interest in the Chergui field and the Chergui gas plant. The company tied a third production well into the plant in July 2010 and increased gas recovery. The development program for 2011 includes the commitment to drill two to three wells to increase reserves, and to explore the production of oil, as well as gas, from the field.

Source: Cooper Energy

Menzel Horr seismic acquisition

Cooper also holds the Bargou Permit, which is contiguous with the Hammamet, with a 100% interest. In April 2009 the company completed a 46 km seismic survey on the permit. The company farmed out 15% of its stake in the permit to Jacka Resources who will pay a proportion of back costs and proportionate costs for the drilling and testing of the planned Menzel Horr-1 and Hammamet West-3 wells. The total value of the transaction is estimated to be about $12 million. The partners spud the Menzel Horr-1 well in January. The well reached total depth in March, but was not a success and was subsequently plugged and abandoned. Cooper said that despite not encountering any hydrocarbons the geological data obtained in the well will be used to further develop the companys regional understanding of the distribution of potential reservoir formations. The Ksar Hadada Permit sees action from Petroceltic International, Independent Resources, and PetroAsian Energy Holdings Ltd. The partners drilled the Sidi Toui-4 well (ST-4) following seismic acquisition in late 2009. Drilling, using the CTF Rig 06, reached total depth 1,603 meters in October. The well was designed and successfully drilled as a deviated wellbore through the Upper Ordovician, penetrating 364 meters of the objective Bir Ben Tartar Formation. Unfortunately the well was not a success. While oil and gas shows were encountered in the Bir Ben Tartar reservoir unit, evaluation of the extensive logging suite acquired in the Ordovician section indicated that the oil saturation and reservoir fracturation was insufficient to justify fracture stimulation and testing of the well bore. The well was plugged and abandoned. Chinook Energy, through its indirect wholly-owned subsidiary, Storm Ventures International mentioned previously and partnered with Cygam Energy, completed drilling of the TT3 exploration well on the Sud Remada Permit in December. The well was drilled to a total depth of 1,555 meters with the primary target being the Ordovician Jeffara, and Bir Ben Tartar reservoirs. The drilling of the TT3 fulfilled all of the exploration requirements on the permit. The TT3 was followed by the TT4 development well. Cygam reported that the fracturing program on the TT wells was complete and the rig was in the process of equipping the wells for production which is expected to commence around midJune. The fracture program involved the fracture stimulation of the tight Ordovician reservoir in the Jeffara (Upper and Lower) and Lower

Chergui Gas Plant

Sonde Resources plans to spend time this year evaluating the commercial development potential of the feature associated with the Zarat-1 North appraisal well on the 7th of November Block, offshore Tunisia/Libya. The company announced the success of the well in January of this year. The Zarat-1 North encountered 240 net ft of pay in the Eocene El Gueria limestone. The well was cased to total depth and three production tests were performed with all three flowing at substantial quantities of gas and condensate. The company also plans on discussing unitization options with owners of an adjacent concession based on the results of the Zarat-1 North and evaluating the recoverable reserve scenarios, development options, and cost estimates for the fields development.

Petroleum Africa Magazine June 2011

Source: Petrofac

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Tunisia Downstream
Tunisias downstream sector is on par with its upstream sector, not large but not inconsequential. The country is a hub for its neighbors oil and gas exports to the European Union and other Western destinations. From gas processing facilities to pipelines to export terminals Tunisias downstream sector is not explosive but it is steady. The political upheaval that has been taking place since the beginning of the year has not upset gas sales or exports to date. According to Cygam Energy the trucking of production from Sud Remada and sales from the La Skira terminal have not been interrupted and are expected to continue unimpeded though the partners are monitoring the situation closely. Petrofac, discussed previously, produces gas that is sold to the national gas company, Societe Tunisienne de Lelectricite et du Gaz (STEG), under a gas pricing formula fixed by existing law. Its Chergui gas plant produced an average of 27.77 Mmscf/d of gas over 2010. In December 2010 the company recorded its highest rate since the start-up of the gas plant in June 2008. Unlike some others on the downstream end Petrofacs plant has seen some short unplanned shut-ins of production, but generally the plant operated normally. In June 2009 it was reported that Petrofac was considering constructing a refinery in Tunisia. The company would build and operate the Skhira oil refinery project. According to rough estimates investment costs could hit around $1 billion. Qatar Petroleum was involved in the potential project however it pulled out leaving Petrofac to carry on. Petrofac has launched fresh studies for an eventual partnership with Tunisia for the building of the Skhira oil refinery which should have a capacity of 120,000 bpd. If the project moves forward it will not be Petrofacs first downstream undertaking in Tunisia, the company was also involved in the Chergui gas plant. The plant takes gas from the Chergui field, of which Petrofac is the operator, and processes to be sold on the domestic market. BG plays a big role in Tunisias downstream sector as the countrys largest gas producer. Gas from the Miskar field is processed at the BG Group-operated Hannibal plant and sold into the Tunisian gas system. The company has a gas sales contract with STEG which gives it the right to supply up to 230 Mmscf/d from Miskar on a long-term basis. In addition to Hannibal the company has the Hasdrubal onshore gas processing facility and LPG production facility adjacent to the Hannibal plant. Gas from the Hasdrubal is also sold to STEG, while liquids and LPG are exported or sold on the local market. A LPG storage terminal has been constructed in Gabs to receive and export butane and propane. BG saw a bit of drama recently at its Hasdrubal plant as members of surrounding communities launched a sit-in at the plant. While at the time BG said that it might be forced to shut-in natural gas production the protestors were eventually removed, alleviating the need to do so. The sit-in took place after a disagreement between communities and BG officials over the execution of an agreement entered into by both sides providing for the employment of a number of citizens and the granting of micro-credits to create sources of income for others. Tunisias role as a transit point for neighboring Algerias production through the Transmed pipeline continues, although export flows slowed some this year. In mid-January it was reported that gas flows through the pipeline have nearly halved since the start of the year. Flows of Algerian gas via the Transmed pipeline have fell from around 3.3 Bcf/d in early January to just 1.8 Bcf/d. Pipeline Subsea portion of the Transmed Pipeline operator Snam Rete Gas said at the time that the pipeline was not having any technical problems and it was unclear why the drop had occurred. Despite the drop in flow there are plans in the works to expand capacity.

Power and Alternatives

The Societe DElectricite DEl Bibane (SEEB) Electric Generating Power Plant is a flagship, independent power producer (IPP) for Tunisia, as it utilizes gas that was previously being flared and is one of the first IPPs to provide a low cost source of electricity for the country. Candax shares a 50/50 ownership in the SEEB power facility with its partner Caterpillar Power Ventures Inc. The SEEB power plant is a 27 MW, single cycle operation located at the El Bibane central processing facility and the majority of its gas supply originates from the El Bibane field. SEEB utilizes up to 7 Mmcf/d of gas sourced from both the El Bibane and Ezzaouia oil fields, and supplies electricity to STEG. In December the European Investment Bank (EIB) reported that it would fund a power project in Tunisia. The EUs financing arm will provide a 194 million loan to Tunisia for an electricity project. The loan will be used to construct an electric generator with natural gas in Sousse City. The total project cost is estimated at 388 million. The EIB also has possible funding for the STEG GAZ III project under appraisal. The project forms part of STEGs long-term program for expanding the national gas transmission and distribution networks. The project focuses on the first phase of this program to be implemented over 2010-2014. It involves about 1,400 km of gas transmission pipelines and five new compressor stations, 28 MW in total, to be located mainly in Northern Tunisia. Despite being mostly reliant on its hydrocarbon sector, Tunisia is slowly integrating renewable energy into its power sector. The North African country is a part of the UN-backed Kyoto Protocol, but has no emission reduction targets currently in place. The governments attempts at

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Source: ENI

upscaling its renewable energy sector resulted in a financing mechanism, Fonds National de Matrise de lEnergie (National Energy Savings Fund), which was created in 2005 to encourage businesses to implement renewable energy. The country plans to continue innovative funding mechanisms in the field of energy efficiency with plans to launch a four-year energy-saving program to reduce energy demand by 20% by 2011. The National Energy Control Agency director general Ben Aissa Ayadi said that Tunisia planned to increase its renewable energy generation from 0.8% in 2009 to 4.3% by 2014. Tunisia is onboard the Desertec Industrial Initiative (DII) which aims to acquire solar power from the Sahara desert for transport to Europe and energy generation in North Africa. In April, the DII announced that it would open an office in Tunisia to increase its development plans in the region. CEO Paul van Son said, A close JV with the Tunisian government will play a decisive role towards the implementation of the Desertec vision.

And while the DII is in the pipeline, others have begun noticing Tunisias solar potential. The British Foreign Office minister for the MENA region, Alistair Burt, confirmed that the UK would invest in Tunisias solar sector. Italy had already struck a deal with Tunisia to establish a technological platform to spread renewable energy connecting the European electrical connection network through the underwater electric connection between Tunisia and Sicily. Japan has also taken an interest in Tunisia, helping to establish a solar power generation project that would host research by Japans New Energy and Industrial Technology Development Organization as well as operating as a power generation facility. The country has its own plans too; construction of its Zarzis Djerba Solar Eco-Village is near completion. The village is aimed at increasing employment, helping to meet renewable energy targets, and generate sustainable revenues via projects like organic farming and desalination.

Technology and Solutions

By Guy Brown Technical Correspondent

FRACKING FUTURE
There has been a dramatic increase in hydraulic fracturing in the United States in the last five years, brought on by high gas prices and enabled by rapid technological advances. This has in turn drawn the interest of countries around the world seeking to exploit the tremendous potential of shale formations.
ydraulic fracturing [fracking or fraccing] has been used for decades, but it has only come to the fore in the last five years due to the marriage of technological developments such as directional drilling and high gas prices. The surge has coincided with the enactment of the 2005 US Energy Policy Act, which exempted fracking wells from federal regulation under the Safe Drinking Act. Fracking is now used in 90% of natural gas wells in the United States. At a time when conventional oil and gas reserves are dwindling and energy demand is inexorably rising, fracking offers a solution by unlocking massive shale reserves. UK daily The Telegraph noted on May 6 that some supporters of fracking estimate the United States has natural gas deposits equivalent to two Saudi Arabias-worth of oil, which would be sufficient to supply the US with gas for heating, electricity generation, and car fuel for up to 100 years. Until recently, fracking was uneconomical due to high production costs and relatively low gas prices. While hydraulic fracturing has been around in the United States since 1947, drilling and fracturing a well is a costly, labor-intensive endeavor, said Robin Millican, policy associate at the Institute for Energy Research. With previous technology, it simply wasnt economical to use it on a scale that would have a significant impact on our [United States] domestic supply, even though we knew shale formations held abundant amounts of fossil fuels. However, the outlook completely changed when industry developed a method to combine hydraulic fracturing with directional drilling to access more area in the underground shale formations. Energy demand has spurred on innovation. With high gas prices and a lack of domestic supply in the United States there was a real impetus for a technological breakthrough, which Millican said occurred in the States. Before the oil spike in 2008, we had a natural gas price crisis. However, after industry started using the new fracturing method, the wellhead price of natural gas in 2008 dropped from nearly $8 per thousand cubic feet to $3.67 per thousand cubic feet. Making shale gas reserves recoverable will be enormously advantageous to the oil and gas industry, Millican continues. The largest known gas field in the US the Marcellus Shale is estimated to contain

The largest known gas field in the US the Marcellus Shale is estimated to contain $1 trillion in recoverable natural gas. This is only a tenth of the natural gas we think it contains. Globally, the potential is just as great. Robin Millican, policy associate at the Institute for Energy Research $1 trillion in recoverable natural gas. This is only a tenth of the natural gas we think it contains. Globally, the potential is just as great. Accordingly other energy hungry regions and countries eyeing lucrative gas export opportunities are looking to capitalize on fracking advances. As global energy consumption rises, countries will be looking more than ever to fulfill their need with domestic production hydraulic fracturing is one obvious outgrowth of that, said Millican.

Africa

Oil and gas producers in Africa are looking to exploit their own shale gas reserves. Africa fares very well in the game BPs Review of World Energy puts the continents current proven natural gas reserves at 521 trillion cubic feet (Tcf), said Millican. Reflecting these opportunities, on March 9 Algeria announced that it was looking to develop natural gas trapped in shale rock more than 3,280 ft below the surface. Algerian minister of Energy and Mines Youcef Yousfi told the CERAWeek conference in Houston that they estimate his countrys reserves as high as 1,000 Tcf. The preliminary results of our evaluation of shale gas potential indicate that the potential is at least comparable to the major plays known in the United States, he said. Pilot tests will start in 2012. Given the advanced technologies required, African nations are actively seeking international partners. We are already talking with some companies, Yousfi said. Further east, Weatherford is marketing its fracking services in Egypt, and in 2010 the company completed a hydraulic fracturing job in the country, in an area known for tight formations, low permeability, and relatively high fracture gradients, the company reported.

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While seeking to replicate the success of the United States in fracking shale formations, the continent will be keen to avoid environmental controversy that has bubbled up around the activity recently. South Africa is already experiencing a fracking backlash. [See Box 1]

Contentious Issue of Groundwater

Environmental concerns regarding hydraulic fracturing are being debated at the local and national levels in the United States, and South Africa. When talking about fossil fuels, even one as abundant and clean burning as natural gas, you are always going to have your share of naysayers that will do anything to stop our use of them, said Robin Millican, policy associate at the Institute for Energy Research. That said, much of it can be attributed to the fact that production has increased so dramatically and there has been a lot of press. Notably, the 2010 movie Gasland featured a man lighting his tap water on fire and claiming it was because of hydraulic fracturing nearby, never mind that the flammable gases lie in shale formations thousands of feet below the water table. Sensationalism works but in this case, is far from the truth. Nevertheless, the US Environmental Protection Agency (EPA) has launched a study looking into the effects of hydraulic fracturing on the water supply. The research will examine the full scope of the water pathway as it moves through the fracturing process, including water that is used for the construction of the wells, the fracturing mixture, and subsequent removal and disposal. The Scientific Advisory Board reviewed the study plan in early March, with research to be completed by the end of 2012. The EPAs Hydraulic Fracturing Report is expected to be completed in 2014. Despite the sensationalism, a few recent incidents are leading governments and regulatory bodies to more closely scrutinize hydraulic fracturing. In the United States in April, a spokesman for the Bradford County Emergency Management Agency in Pennsylvania said that Chesapeake Energy Corp. was trying to regain control of a natural-gas well in the vicinity, which was reportedly spilling chemically treated water into a creek. The spill happened at the same time fracking was taking place in a well near Leroy Township. News agencies reported Chesapeake as saying that the accident was caused by an equipment failure and that completion fluids were spilled. A spokeswoman for the Pennsylvania Department of Environmental Protection said the spill occurred while the well was undergoing fracking. Chesapeake said Boots & Coots International Well Control was mobilized to respond if necessary. From available information, it appears the spill resulted from a surface equipment failure, and not as a result of fracking. Justified or not, fracking is raising public concerns in Africa too. On April 21, South Africas cabinet endorsed the Department of Mineral Resources decision to declare a moratorium on natural-gas drilling in the Karoo basin region, halting plans by Royal Dutch Shell. Shell had applied for permission to drill about 24 wells in an area of about 90,000 sq km (34,749 square miles). The Karoo is an arid sheep and game farming region. Government spokesman Jimmy Manyi said the Department of Mineral Resources will lead an investigation into the implications of fracking. A Shell spokesperson responded that the company will support local research efforts into hydraulic fracturing as this will provide clarity and an improved understanding of the technology, and asserted its commitment to supporting the development of best-in-class regulatory standards for hydraulic fracturing in South Africa.

Technological Advances

Technology is playing a vital role in making the development of shale gas reserves possible. Ted Lafferty, Schlumbergers vice president of stimulation services, has said that advances in fracturing technology have contributed to making some of the key activity areas today viable that would not have been economically viable even 10 years ago. Millican singled out the coupling of hydraulic fracturing with directional drilling as the most important development. Now, six to eight horizontal wells drilled from only one well pad can produce the same volume as sixteen vertical wells, dramatically reducing the production costs for the operator. Operators can even go back to vertical wells that have already been drilled and played out and directionally drill, a re-use which has both economic and environmental benefits. New well stimulation methods have also come along as deeper and less conventional wells are drilled. Multi-stage fracturing and stimulation along horizontal wellbores has enabled operators to place fractures at specific places in the wellbore according to where production potential is the greatest, thereby increasing the cumulative production in a shorter time frame. This can be carried out in a day, as opposed to weeks as was previously the case. Another development has been the injection of high-pressure hydraulic fracturing fluids with propping agents like sand, glass beads, epoxy, or silica sand to expand fissures and keep them open, enabling the hydrocarbons to flow more freely.

Seismic Precision

Microseismic is also playing a part. It is being used to measure the orientation and size of a fracture with greater precision and in real time. The approximate geometry of the fracture can be inferred by mapping the location of small seismic events associated with it. In providing information about the changing stress of a reservoir, Schlumberger notes that it can enhance reservoir development. Schlumbergers StimMAP services for hydraulic fracture monitoring record microseismic activity in real time during the fracturing process. The software provides modeling, survey design, microseismic detection and location, uncertainty analysis, data integration, and visualization for interpretation. Computer imagery is used to monitor the activity in 3D space relative to the location of the fracturing treatment. Then the monitored activities are animated to show progressive fracture growth and the subsurface response to pumping variations. The StimMAP service uses Petrel seismic-to-simulation software to provide accurate characterization of the locations, geometry, and dimensions of a hydraulic fracture system. Advanced processing

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Technology and Solutions

techniques provide fracture characterization that enhances fracture models and reservoir characterization for production simulation.

Halliburton CleanSuite
Advances are also being made in the chemicals used in fracking, which may play an important role in allaying public and government concerns over the perceived environmental risk of the activity. Halliburton has come up with the CleanSuite production enhancement technologies CleanWave, CleanStream and CleanStim [See Box 2]. They help to clean-up and reuse fracture flow back and produced water. According to Halliburton, for every barrel of oil produced, approximately three barrels of water are produced. And, between 10% and 40% of the fluid volume used in fracturing operations flows back during the subsequent clean-up. The flow back and produced water may contain hydrocarbons, solids, bacteria, or heavy metals. Halliburton notes the challenge in managing and disposing of this produced water, and that cleaning and reusing it is preferable. Halliburton announced in May that the three CleanSuite technologies were used together for the first time by El Paso at a well in North Louisiana. Marc Edwards, Halliburton senior vice president, Completion and Production Division commented that in order for these [CleanSuite] technologies to be commercial and truly transform our industry, we need operators who are willing to take that first step and help prove these new technologies, and credited El Paso for taking that pioneering step. John Jensen, senior vice president, Operations, El Paso Exploration & Production, said the use of the CleanSuite system is consistent with our long-standing approach to conduct our hydraulic fracturing operations in an environmentally sensitive manner.

Improving Clean-Up

CleanSuite includes three production enhancement technologies: CleanWave, CleanStream and CleanStim CleanWave Water Treatment System Enables recycling of flow back and produced water at the wellsite. It features a mobile electrocoagulation component that uses electricity to treat flowback and produced water at rates of up to 26,000 bpd. CleanWave enables operators to generate water for reuse in fracturing fluids or reuse in other drilling and production processes. This minimizes fresh water consumption and the costs associated with procurement and disposal. The CleanWave system destabilizes and coagulates the suspended colloidal matter in water. When contaminated water passes through the electrocoagulation cells, the anodic process releases positively charged ions, which bind onto the negatively charged colloidal particles in water resulting in coagulation. At the same time: gas bubbles, produced at the cathode, attach to the coagulated matter causing it to float to the surface where it is removed by a surface skimmer. Heavier coagulants sink to the bottom, leaving clear water, suitable for use in drilling and production operations. CleanStim Hydraulic Fracturing Fluid System Uses a new fracturing fluid formulation made with ingredients sourced from the food industry. The CleanStim fluid system components include a gelling agent, crosslinker/buffer, breakers and a surfactant. Before use, the CleanStim formulation is mixed at the job site with the water provided by the operator. The CleanStim fluid system provides excellent performance in terms of pumpability, proppant transport and retained conductivity. Laboratory tests showed over 90% retained conductivity after 24 hr of flow. The system is applicable over a broad temperature range providing up to 30 minutes pumping time at 225F (107C). The CleanStim fluid system can be crosslinked and used for conventional gelled fracturing treatments. In addition, the components can be used to provide friction reduction for water frac treatments commonly used in shale reservoirs. CleanStream Traditional methods for treating bacteria in fresh water employ chemical biocides. These methods involve a greater degree of HSE risk with respect to spills and surface handling. CleanStream uses ultraviolet (UV) light to control bacteria. According to Halliburton, it reduces and in some cases eliminates the need for chemical biocides and helps to maintain frac fluid integrity and performance. It is similar to UV treatments used in hospitals, food processing and water treatment plants.

Future Fracking

High demand for domestic gas production in the United States creates a powerful driver for further technological development in hydraulic fracturing. Steven Ingram, Halliburton technology manager, speaking in May at the Energy Summit, an initiative by The Houston Club, said: How we frac today will look completely different in two years, giving the example of a 35% on location personnel reduction. Halliburton said they had an average of nine pump trucks at each fracking location in 2008, but by 2010/11 that had grown to 20 pump trucks. Service providers are making tremendous investments, Ingram said, with one Halliburton location alone having $85 million worth of equipment. Ingram added that operating with all this equipment and personnel is unsustainable. And in some drilling locations such as mountainous or environmentally sensitive areas it is simply impractical to have all this equipment, and rig up/rig down is too complex. We have to reinvent, says Ingram. What does this mean? Vertical storage with no tractors or trailers, and alternative options to driving high pressure injection as diesel is expensive. And in a patented advance, Halliburton is applying

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offshore rig technology to onshore truck technology for rig up/rig down. Ingram continued saying that the new footprint for a frac location will be reduced by 45% with increased profitability and sustainability. A new high tech plugin pump truck will Halliburtons new high tech plug-in pump truck reduce the number of trucks required back down to around eight. 40 of these new vehicles are available now, with four in the field today. The trucks can pump more in less time, but with a 50% reduced footprint. In a further advance that reduces environmental impact, sand storage devices will be powered by solar panels. Another area that technology is leading transformation is in downhole completions. Increased complexity has seen average well completion times increase from 25 hours 10 years ago to 94.2 hours today. Halliburton has said its new rapid fracturing REO system will drop that down to 36 hours. The REO system eliminates wireline intervention,

Source: Halliburton

and dramatically reduces water requirements. With technologies including Delta Stim initiator sleeves, Swellpacker, VersaFlex expandable hangar liner, activation fluid inserted into the annulus for swell system, and no intervention by coil or jointed tubing to perforate, completion cycle times will improve. Getting down to 30-40 hours is a tremendous step change, said Ingram. With around 3,200 to 3,600 wells in North America inventory waiting to be fractured, which are mostly shale/unconventional, Ingram said the industry is not keeping up with the demand for equipment. Ingram also said there is a need for better understanding of the complexity of hydraulic fracturing, which he said no model today can do. We need to better understand this as an industry, he said, adding that currently money is thrown away because of the lack of complex understanding. The acceleration and complexity of fracking activity looks set to demand further technological advances. Although Im not privy to what the industry has in the works for future technological developments, its reasonable to assume that well see improvements in how far we can drill horizontally, and with well stimulation technologies, said Millican. Companies are always experimenting with what additives work best within what types of formations. Well just have to wait and see.

Oil Security
By Mark Pabst Senior Correspondent

RAGE SUDANS TINDERBOX

Recent violence in the Abyei region, located on the border between north and South Sudan, has many observers worried that the area may provide the spark that sets off a wider conflict between the two countries. While the situation in Abyei is certainly serious, it may also help focus attention from the international community on the many things that still need to be done to ensure lasting security in the region.

ack in August 2009 the United States Institute of Peace (USIP) published a report called Scenarios for Sudan: Avoiding Political Violence through 2011. The report outlined several likely scenarios that could develop both prior to and immediately following the referendum on South Sudans independence and included steps that needed to be taken by the international community to avoid the worst scenarios. Chief among the USIPs concerns was the potential for the relationship between the two countries to devolve into a state of war. Of course USIP was not the only group to caution the international community about the potential for violence following the referendum, but it was among the most vocal in its insistence that the international community put pressure on both the Republic of Sudan in the north and South Sudan to deal with the many outstanding issues that could result in the breakdown of social order. Specifically, the report called on the international community to pressure both sides to stamp out militia activity along the north-south border, come to a real agreement over land tenure in the contentious regions of Southern Kordofan, Blue Nile, and Abyei, and work out specifics regarding control of Sudans oil resources. While some progress was made regarding all these issues, recent events suggest that tensions between north and south have reached a point where a single spark could reignite a wider war. The fighting in Abyei has reminded the world just how precarious Sudans north-south peace remains. While Abyei was supposed to vote in the referendum on South Sudans independence back in January, the poll was put on hold indefinitely because of a dispute over who was eligible to participate in the election. Since then violence flared sporadically in Abyei, but took a turn for the worse in late April when Sudanese president Omar al-Bashir threatened to withhold official recognition of the state of South Sudan if the south maintained its claim to Abyei. For its part, southern officials prepared a draft version of South Sudans interim constitution that explicitly claimed Abyei as part of its own. Both sides have allies in Abyei, with the Arab Misseriya nomads backed by the north and the Ngok Dinka casting their lot with the south. The two groups have clashed frequently in recent months, allegedly with

the support of their respective backers in Khartoum and Juba. The situation began looking better as recently as early May, when both sides inked a UN-brokered agreement to remove their forces from the troubled province. However, less than a week after the two sides reached the pact, UN peacekeepers patrolling the region came under attack. Although the identity of the attackers remains unclear, the incident immediately sparked further violence. While the Misseriya and Ngok Dinka engaged in firefights across the region, the northern and the southern armies exchanged artillery fire. Ultimately, the north came out ahead in the military engagement, with the UN confirming in late May that troops loyal to Khartoum were in control of Abyei town, located on the border between the north and the south. The violence also spurred a flurry of political activity. Juba announced that it saw the seizure of Abyei town as an act of war, and a southern minister in Khartoums national unity government resigned his post in protest over the norths war crimes in Abyei. The violence was also roundly criticized abroad; UK foreign secretary William Hague called for all unauthorized forces (to) be withdrawn from the entire area of Abyei in accordance with past agreements, a reference to the multiple agreements both sides have made in the past regarding security in Abyei. The unrest also prompted a stern warning from the United States, with Washington threatening to cancel billions of dollars of debt relief promised to Khartoum if the north does not remove its soldiers from the region. Perhaps more importantly the violence in Abyei threatens to hijack the removal of Sudan from Washingtons list of state sponsors of terrorism. The United States had long been expected to remove Sudan from the list and normalize relations with Khartoum if independence for the south went ahead without violence. The deterioration of the security situation in Abyei has certainly forced the international community into meaningful action. In addition to a strong condemnation of the violence by major players in the international community, the UN Security Council sent a delegation to the region in late May to help resolve the issue. However, while control of Abyei is an important source of tension between north and south, it is far from the only speed bump on the road to peace between the two sides.

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Even as tensions were ramping up over Abyei, elements in the souths ruling party, the SPLM, accused Khartoum of rigging the vote for governor of the oil rich Southern Kordofan state to elect Ahmed Haroun, an al-Bashir loyalist who has been indicted by the International Criminal Court for alleged war crimes committed in Darfur. However, not all of the recent instability in the region can be directly attributed to tensions between north and south. While the problems in Abyei have attracted most of the attention recently, violence between different ethnic groups in the south continues to claim lives and sow instability. According to the UN about 1,000 people have been killed in clashes between rebels or local armed groups and the southern army in the first four months of the year. Much of the violence has been driven by local militias operating within the souths borders, and several southern army officers have turned against the Juba government in recent months. While the south routinely blames Khartoum for fanning the flames of this instability, many security experts claim that ethnic violence in the south would exist without any action from the north. In fact, while the USIP report released back in 2009 warned about the potential for a shooting war between north and south, it also acknowledged that it would be equally plausible for South Sudan to devolve into violence without any prompting. Doubts about Jubas ability to build sufficient infrastructure and guarantee proper distribution of food, water, and power have some wondering whether the government

in the south can provide enough services to avoid widespread unrest. These doubts have been amplified by recent shortages of goods in the parts of the south that border north Sudan. Obviously all of these developments are extremely concerning for those who depend on Sudanese oil as a source of energy or a source of income. Widespread insecurity, either in the form of a north-south war or widespread lawlessness in the south have the potential to wreak havoc on oil production. Therefore, those with a vested interest in Sudanese oil are undoubtedly hoping that the UN and other major international players can bring an end to the current crisis in Abyei. However, since South Sudans problems run far deeper than Abyei, the real concern should be whether the situation in Abyei will force the international community to help address the multiple problems faced by both north and south. There are indications that some international players are beginning to recognize that the crisis in Abyei is simply the most urgent manifestation of a problem that has been allowed to fester in recent years. In his statement following the norths takeover of Abyei Hague not only urge(d) the parties to the Comprehensive Peace Agreement to respect their commitments under it, but also asked the two sides to negotiate a peaceful and durable resolution of all outstanding issues. The recognition that there are many outstanding issues is essential. The next step is for international players to force both sides to address these issues.

Book Review
Reviewed by Mark Pabst Senior Correspondent

DANCING IN THE GLORY OF MONSTERS

Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa By: Jason Stearns Public Affairs 2011
There is no Hitler, Mussolini or Stalin. Instead, it is a war of the ordinary person. Jason Stearns on the war in the Democratic Republic of Congo

he Democratic Republic of Congo (DRC) is often held up as an example of everything that is wrong with Africa. The heady days that immediately followed the end of colonialism rapidly devolved into political crisis and then dictatorship. Its own government enthusiastically offered the country up as a pawn in the Cold War. Gross economic mismanagement and a deeply entrenched culture of corruption enriched a few elites to the detriment of the average citizen. The DRC has also become another African archetype; the resource rich country that is unable to translate its natural resources into national prosperity. Blessed with deposits of copper, tin, cobalt, manganese, and other minerals, the country remains woefully underdeveloped, with an infrastructure in tatters and an abysmal security situation. Current estimates put the DRCs oil reserves at 180 million barrels and natural gas reserves at 991.1 million cubic meters, but fresh oil discoveries along the border in neighboring Uganda have many hopeful that the countrys reserves are actually much higher than currently estimated. Despite the excitement about the DRCs oil potential, the eastern part of the country remains wracked by violence, with the UN expressing its concern about ongoing insecurity in North Kivu as recently as May. Of course, much of the Democratic Republic of Congos plight, especially the ongoing violence in the east and its continuing lack of economic development, can only truly be explained in light of the devastating war that engulfed the country beginning in 1996 and spawned the violence that continues to simmer to this day. At its height nearly a decade ago, the war directly involved nine African countries and 25 distinct armed groups. By almost every measure the war was easily the largest conflict in modern African history. Now the DRC is poised to emerge from the conflicts aftermath, investors are looking

to cash in on its natural resources, and policy experts are trying to glean lessons from the war and its fallout. Fortunately for all these parties a steady stream of books about the DRC and the war have appeared recently. The latest of these books is Jason Stearns Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa. Stearns has followed the DRC both up close and from afar in various professional capacities, including as the coordinator of the United Nations Group of Experts on the Congo and as part of the International Crisis Group. Stearns, who is currently pursuing a PhD at Yale University, brings a studiousness and seriousness to his account of the conflict. This is especially refreshing, not because there are no good academic accounts of the war, but because many of the recent accounts have focused on the authors exploits in-country, exploits that invariably describe the savagery of the conflict, the backwardness of the country, and the suffering of the populace. Of course, to deny the brutality of the war or dismiss the suffering of the Congolese would be foolish, but many of the books that choose to make these things the central aspect of their narratives often reinforce the idea that the DRC is symbolic of the continents problems; that the DRC is somehow Africa to the extreme. By contrast, in Dancing in the Glory of Monsters Stearns largely leaves his own experiences out of the narrative and instead paints a complex but complete picture of a complicated war. There have certainly been some fine scholarly accounts of the Congolese War (Gerard Pruniers Africas World War: Congo, the Rwandan Genocide, and the Making of Continental Catastrophe,

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previously reviewed in this magazine, comes to mind). However, while Stearns account of the war is well researched and rich with details, it is set apart by his ability to profile both the major and minor actors in the war with a journalists flair. Yet he does not fall into the war correspondent clichs or lazy stereotypes that have characterized some of the reporting on the Congo. While popular accounts have described the war as some sort of irrational orgy of killing, Stearns probes for reasons behind the violence, and generally finds that some form of cold calculation lies behind many of the wars most horrific acts. Given the brutality that Stearns describes, it is difficult to believe that Dancing in the Glory of Monsters is not a story about good guys and bad guys. Certainly any narrative that describes a war in which some militiamen thought nothing of strangling hundreds of people to death on any given day should be a portrait of evil. Instead, the book is really an account of human frailty. He shows how universal human shortcomings like pride, greed, fear, and a desire for revenge all played a role in turning the Congo into Africas battleground. Stearns lays out a precise chronology of the war, and describes how the violence marched on due to the humanness (though not the humanity) of major political and military players.

The danger of playing the tribal card is also a recurring theme. Not only did the attempted genocide of Tutsis in Rwanda play a major part in starting the Congolese War, but Congos longtime dictator Mobutu Sese Seko regularly used mistrust of foreigners like the Banyamulenge, a Congolese Tutsi community, to maintain his hold on power. In this climate of fear, the fear of the annihilation of ones entire ethnic group, can anyone wonder why certain actors fought so viciously in the war? So, in the end, if one chooses to see Congo as Africa at its most African, then Stearns makes a profound argument in his book that Africa is far more complicated, far more rational, and far more interesting than most people believe. As Stearns himself has recently pointed out, the host of books released about the war in the Congo coincide with a rediscovery of the country by the American and European public. Grassroots activists from soccer moms to college students have finally broken this apathy (about the Congo), he wrote recently in Foreign Policy Magazine. But now it is up to politicians and diplomats to turn awareness into intelligent policy. Books about the brutality of the war have already helped break the apathy about the Congo. Now books that go beyond sensationalism to look at the true reasons behind the war, books like Dancing in the Glory of Monsters, are necessary to tell us just how we might help fix the DRC.

New Products & Services

Emerson Launches New Wireless Downhole Tool

Emerson Process Management has launched the Roxar Downhole Wireless PT Sensor System Annulus B. The new instrument will measure online and in real-time previously inaccessible pressure and temperature information behind the casing in subsea production wells, providing operators with an important new tool for well integrity monitoring. The annulus of an oil well is the space between two concentric objects, such as between the wellbore and casing or between casing and tubing, where fluid can flow. In a completed well, there are normally at least two annuli. The A annulus is the space between the production tubing and the smallest casing string with the B annulus located between different casing strings. Cement seals behind the wellbore casing provide a barrier against the high pressures encountered deeper in the well. Poor or deteriorating cement sealing or casing collapse (the casing will heat up and thermally expand due to the production flow), however, can lead to a loss in casing integrity, allowing oil or gas to migrate vertically towards the surface along the outside of the casing. This can result in potentially hazardous situations, especially during workover operations, where uncontrolled gas may escape at the surface. In the worst case scenarios, a shallow gas blow out might evolve due to the failed barriers in the casing systems. With online pressure monitoring, the Roxar Downhole Wireless PT Sensor System Annulus B can provide positive confirmation of the pressure barriers integrity. The tool will also negate the sometimes excessive and expensive over dimensioning of casings that can take place to compensate for worst case scenarios and will also potentially provide operators with significant cost savings previously incurred in shutting in wells, due to their lack of ability to verify barrier integrity. The new wireless PT Sensor System and its permanent monitoring capabilities will give added certainty to the well integrity monitoring process as well as valuable input during well trouble-shooting. The Roxar Downhole Wireless PT Sensor System monitors the B Annulus pressure and temperature without any degradation to the original barrier

Roxar Downhole Wireless PT Sensor System

element consisting of the A casing system and can be retrofitted to the monitoring system design of current subsea systems. The system consists of an Integrated Downhole Network (IDN) system to carry signals from the wellbore to the customer monitoring system with a Downhole Network Controller Card (DHNC) placed in the subsea structure and connected to a electrical cable coupled to a tubing hanger penetrator and a series of up to 32 sensors distributed throughout the completion string. Other key components of the system include a wireless reader, a wireless PT Transponder and antennae to monitor activity in the B Annulus, and a transponder and reader carrier. The system has an accuracy of +- 2.5 psi - +- 0.18 F. The system is qualified to last for a minimum of 20 years at temperatures of up to 302 F and pressures up to 10,000 psi. The system is also based on an electronic wireless system, where the signals and power are transmitted wirelessly, ensuring a long life.

Atlas Copco Introduces New One-Piece Retrieval System

The new Secoroc one-piece retrieval system by Atlas Copco simplifies and improves on its predecessor by eliminating the retaining ring and dowel pin, resulting in a more robust system for the oil and gas market. Instead of a retaining ring and dowel pin, the new design is comprised of a dual four-lug system on the retrieval sleeve. These lugs correspond with grooves in the bit head. Once the lugs and grooves are in alignment, the sleeve is rotated to lock it into place. By simplifying the design and eliminating parts, there are fewer issues that can arise with it, making it a better system all the way around.

The system is available in Q6, Q8, T9 and Q12 shanks with two different retrieval sleeves to accommodate the QL/TD80 hammers or TD85/90 hammers. The bit number indicates which sleeve is packaged with the bit. Current QL and TD retrieval hammers or standard hammers can be Detailed view of the one-piece Secoroc Bit Retrieval System The retrieval system decreases the amount converted to use the new one-piece system of time spent tripping the hole should a bit shank, and in gas drilling time by simply changing the chuck body. All Atlas Copco shank sizes can is of the essence, said Mike Millsaps with Atlas Copco DTH equipment. now be equipped with this one-piece retrieval system.

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Subsea 7 Readies First Commercial Autonomous Inspection Vehicle (AIV)

Subsea 7 announced that it has completed the design and build of the first commercial Autonomous Inspection Vehicle (AIV), a technology which has the potential to revolutionize Life-of-Field projects. The company plans to develop a series of AIVs, initially capable of general visual inspection, through to fully capable work-class sized intervention vehicles. A combined project team comprising hardware developers and operational personnel from Subsea 7 and Seebyte, a Scottish based software developer for the autonomous robotics market, has been working together to deliver the first vehicle. The design and build of the vehicle is complete and successful progress through in-water trials and commissioning phase is underway. Following completion of extensive in-water testing and capability development, the first commercial AIV is expected to be available in late 2011. Through the development process, many technical challenges were overcome such as the shape of the vehicle changing from the original design concept due to the significant work done using the latest Computational Fluid Dynamics Modeling to optimize the vehicles shape with regard to stability and maneuverability, while conserving the onboard power resources. The vehicle is fully autonomous and can operate for a 24-hour period on a single charge of its lithium-ion batteries, which are housed in pressure vessels within the hull. These batteries have been specifically designed for the vehicle and provide a more cost-effective solution to pressure tolerant batteries, with a lower capital cost and much improved cycle lives. The sensor package has been developed to cover the requirements of general visual inspection; it comprises the latest sonar technology coupled with high quality video cameras and low power LED lighting. A significant software integration and development project has been running in parallel with the hardware development and this too has used the most advanced techniques to manage, debug and control the development.

Baker Hughes Introduces Next-Generation Reservoir Modeling Software

Baker Hughes introduced the next generation of its JewelSuite reservoir modeling software. JewelSuite 2011 is an integrated reservoir modeling tool that uses patented 3D gridding technology to build accurate reservoir models for fields with complex geology. The JewelSuite platform also provides connectivity between its generated models and reservoir simulators a capability designed to further improve overall simulation accuracy. JewelSuite 2011 includes several breakthrough technologies that extend the scope of the software and the associated subsurface 3D modeling workflows. These technologies include: a new approach to earth modeling collaboration; linked software platforms to enhance workflows; more powerful processing via multithreading and multicore functionality; and enhanced workflows for modeling unconventional reservoirs. New collaboration functionality built into JewelSuite 2011 allows team members to share pertinent information with or without a traditional hub-and-spoke database approach. Knowledge workers can be productive, regardless of location or connectivity to the Internet. New audit trail, object-tracking and baseline modeling functionality enables team members and management to track and control the quality of subsurface models; i.e, how they were built and the assumptions and decisions used in their construction. Multithreading and multicore functionality, along with workflow automation, allow users to make faster decisions with the advantage of modern multiple core processor architecture(s), which lets them process scenarios on two cores while simultaneously evaluating or building new, alternative scenarios on additional cores. Workflow automation allows customers to batch process property modeling, gridding steps or parameters with one click, saving time and reducing the potential for errors in evaluating structural and reservoir property uncertainties. JewelSuite 2011 also includes microseismic visualization capabilities, which, together with the program's ability to easily create different scenarios to test flow rates based on orientation of fractures and horizontal well placement, further improves the workflow for development of unconventional reservoirs. Through Baker Hughes participation in the Seismic to Simulation (STS) Alliance with Seismic Micro Technology (SMT) and Computer Modeling Group (CMG), JewelSuite users can complete workflows from seismic to reservoir modeling and flow simulation in a familiar, easy-to-use Microsoft Windows operating system environment. Direct communication among JewelSuite, SMT, and CMG software platforms supports read/write, versioning, and audit capabilities.

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Facts and Figures A F RI CA N RI G CO U N T

Rig Counts YTD Average Change
1 1 0 -1 0 -1 0 0 0 -1 -1 0 0 0 0 0 0 0 -1 0 -1 -4 -2 -2 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 -14 -13 -1 0 0 0 0 0 0 0 0 0 -1 -1 0 0 0 0 0 0 0 -1 0 -1 0 0 0 0 0 0 0 0 -4 -4 0 0 0 0 0 0 0 1 1 0 1 1 0 -23

Country
ALGERIA Land Offshore ANGOLA Land Offshore BENIN Land Offshore CAMEROON Land Offshore CENTRAL AFRICAN REPUBLIC Land Offshore CHAD Land Offshore CONGO Land Offshore EGYPT Land Offshore EQUATORIAL GUINEA Land Offshore ERITREA Land Offshore ETHIOPIA Land Offshore GABON Land Offshore GHANA Land Offshore GUINEA BISSAU Land Offshore IVORY COAST Land Offshore KENYA Land Offshore LIBYA Land Offshore MADAGASCAR Land Offshore MAURITANIA Land Offshore MOROCCO Land Offshore MOZAMBIQUE Land Offshore NAMIBIA Land Offshore NIGER Land Offshore NIGERIA Land Offshore SENEGAL Land Offshore SIERRA LEONE Land Offshore SOUTH AFRICA Offshore SUDAN Land Offshore TANZANIA Land Offshore TOGO Land Offshore TUNISIA Land Offshore UGANDA Land Offshore TOTAL AFRICA

Apr-2011
72 72 0 17 1 16 0 0 0 4 1 3 0 0 0 4 4 0 6 3 3 61 52 9 2 0 2 0 0 0 0 0 0 10 7 3 4 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 1 0 1 0 0 0 0 0 0 28 11 17 0 0 0 0 0 0 0 0 16 16 0 1 0 1 0 0 0 5 5 0 2 2 0 234

Prior Month
71 71 0 18 1 17 0 0 0 5 2 3 0 0 0 4 4 0 7 3 4 65 54 11 2 0 2 0 0 0 0 0 0 9 7 2 4 0 4 0 0 0 0 0 0 0 0 0 14 13 1 0 0 0 0 0 0 1 1 0 2 1 1 0 0 0 0 0 0 29 11 18 0 0 0 0 0 0 0 0 20 20 0 1 0 1 0 0 0 4 4 0 1 1 0 257

Through Apr-2011
71 71 0 18 2 17 0 0 0 3 1 2 0 0 0 4 4 0 8 4 4 66 56 11 2 0 2 0 0 0 0 0 0 10 7 3 3 0 3 0 0 0 0 0 0 0 0 0 31 30 1 0 0 0 1 0 1 1 1 0 2 1 1 0 0 0 0 0 0 29 11 18 0 0 0 0 0 0 0 0 17 17 0 1 0 1 0 0 0 5 5 0 1 1 0 273

Prior Year
67 67 0 20 2 17 0 0 0 2 1 1 0 0 0 4 4 0 13 9 4 66 52 15 6 0 6 0 0 0 1 1 0 10 8 2 3 0 3 0 0 0 1 0 1 0 0 0 52 50 2 0 0 0 0 0 0 1 1 0 1 0 1 0 0 0 0 0 0 24 13 11 0 0 0 0 0 0 0 0 22 22 1 2 2 0 0 0 0 7 4 3 1 1 0 298

Change from Prior Year (%)

6 6 0 -10 0 0 0 0 0 50 0 100 0 0 0 0 0 0 -38 -56 0 0 8 -27 -67 0 -67 0 0 0 -100 -100 0 0 -13 50 0 0 0 0 0 0 -100 0 -100 0 0 0 -40 -40 -50 0 0 0 100 0 100 0 0 0 100 100 0 0 0 0 0 0 0 21 -15 64 0 0 0 0 0 0 0 0 -23 -23 -100 -50 -100 100 0 0 0 -29 25 -100 0 0 0 -8

64

Petroleum Africa Magazine June 2011

Source: Schlumberger

WO RLD RI G CO U N T
Rig Counts YTD Average Change Through Apr-2011 Prior Year Change from Prior Year (%)

Region
Africa Asia Pacific Canada Europe
Source: Schlumberger

Apr-2011

Prior Month

234 391 189 169 626 471 1221 1925 5226

257 388 507 169 598 467 1170 1875 5431

-23 3 -318 0 28 4 51 50 -205

273 384 440 171 604 469 1185 1854 5380

298 368 335 166 563 367 1003 1525 4625

-8 4 31 3 7 28 18 22 16

Latin America Middle East Russia and Caspian US Global Total

MAY 2 OPEC Basket Brent Crude Nymex MAY 4 OPEC Basket Brent Crude Nymex MAY 6 OPEC Basket Brent Crude Nymex MAY 11 OPEC Basket Brent Crude Nymex MAY 16 OPEC Basket Brent Crude Nymex MAY 19 OPEC Basket Brent Crude Nymex MAY 24 OPEC Basket Brent Crude Nymex

$ 119.90 126.64 114.04 116.96 121.55 109.73

O I L P RI C ES
126.64 121.55
119.90
130 129 128 127 126 125 124 123 122 121 120 119 118 117 116 115 114 113 112 111 110 109 108 107 106 105 104 103 102 101 100 99 98 97 96 95

104.40 113.69 97.77 111.35 115.66 98.77 107.79 113.72 97.85

116.96

115.66 113.69
111.35 109.73 107.79 107.88 107.30 104.40

113.72 113.20

114.04 112.52

107.88 113.20 98.93

98.77 98.93 97.85

99.59

107.30 112.52 99.59

97.77

OPEC Basket

Brent Crude

Nymex

MAY 6 Henry Hub New York MAY 10 Henry Hub New York MAY 13 Henry Hub New York MAY 17 Henry Hub New York MAY 20 Henry Hub New York MAY 23 Henry Hub New York MAY 24 Henry Hub New York

$ 4.24 4.52 4.19 4.45

G A S P RI C ES
4.71 4.52 4.37 4.27 4.05 4.53 4.45 4.32 4.35 4.76

5.0

4.5

4.09 4.32 4.25 4.53 4.05 4.35 4.27 4.71 4.37 4.76

4.24

4.19 4.09

4.25

4.0

3.5

Henry Hub

New York

3.0
Petroleum Africa Magazine June 2011

65

Facts and Figures

Africa Production of Crude Oil
(including Lease Condensate, Thousand Barrels/Day)

OECD Production of Crude Oil

(including Lease Condensate, Thousand Barrels/Day)

2010
NOV Algeria Angola Cameroon Chad Congo (Brazzaville) Congo (Kinshasa) Cote dIvoire (IvoryCoast) Egypt Equatorial Guinea Gabon Ghana Libya Mauritania Morocco Nigeria
Source: EIA

2011
JAN
1728 1790 65 125 285 21 40 522 289 225 50 1650 8 0.5 2590 13 505 76 9982.5

2010
NOV Australia Canada Denmark Germany Germany (Offshore) Mexico Netherlands Netherlands (Offshore) Norway United Kingdom United Kingdom (Offshore)
Source: EIA

2011
JAN
341 2850.068 241 18 29 2584 12 10 1905 5 1295 5482.548 15045.82 273.204

DEC
1728 1790 70 125 290 21 43 525 282 225 20 1650 8 0.5 2490 13 505 76 9861.5

FEB
1731 1790 65 125 285 21 40 521 287 220 55 1340 8 0.5 2560 13 490 76 9627.5

DEC
371 2850.068 255 28 21 2574 12 11 1886 3 1205 5624 15171.08 331.012

FEB
333 2791.46 241 29 21 2556 12 10 1861 11 1074 5611.679 14818.34 267.201

1808 1790 70 125 290 21 43 525 284 225 6 1650 8 0.5 2510 13 505 76 9949.5

424 2933.364 258.49 27 20 2512 12 12 1868 11 1237 5594.733 15200.95 291.363

United States Total OECD All other OECD*

South Africa Sudan Tunisia Total Africa

*All other OECD countries with production include Austria, Chile, Czech Republic, France, Greece, Hungary, Italy, Japan, New Zealand, Poland, Slovakia, Spain, and Turkey

Production of Natural Gas Plant Liquids

(Thousand Barrels/Day)

OPEC Production of Crude Oil

(including Lease Condensate, Thousand Barrels/Day)

2010
NOV Algeria Angola Congo (Brazzaville) Egypt Equatorial Guinea Libya
Source: EIA

2011
JAN
350 53 7 145 24 140 5 4 728 8558.265

2010
NOV Ecuador Iran Iraq Kuwait Qatar Saudi Arabia United Arab Emirates
Source: EIA

2011
JAN
500.437 4076 2625 2350 1235 9140 2515 2240

DEC
350 53 7 145 24 140 5 4 728 8,587.79

FEB
350 53 6 143 24 135 5 4 720 8,425.68

DEC
499.333 4068 2525 2350 1235 8940 2415 2140

FEB
508.898 4084 2525 2350 1280 9140 2516 2240

350 53 7 145 24 140 5 4 728 8,634.07

509.96 4060 2375 2350 1235 8640 2415 2140

South Africa Tunisia Total Africa Total World

Venezuela Total OPEC Less African Members

23724.96 24172.333 246814.37 24643.898

Total OPEC With African Members 34937.651 35367.048 32439.44 32064.898

**For OPECs African members' individual production see Africa chart.

Conferences
June
7-8 7-9 7-9 13-14 13-14 13-15 15-16 15-16 15-17 17-17 20-24 21-23 28-Jul 1 11th World XTL Summit Petro.T.ex 2011 Nigeria Oil and Gas Technology (NOG Tech) 8th MidEast-North Africa Upstream 2011 Conference London, UK Johannesburg, South Africa Lagos, Nigeria Geneva, Switzerland Dubrovnik, Croatia Dubai, UAE Dubrovnik, Croatia Rotterdam, The Netherlands Lusaka, Zambia Dubrovnik, Croatia London, UK Abuja, Nigeria Beijing, China www.cwcxtl.com www.fairconsultants.com www.cwcnogtech.com www.petro21.com www.europetro.com www.infocusinternational.com www.europetro.com www.acius.net www.zimeczambia.com www.europetro.com www.terrapinn.com www.expowestafrica.com www.lngchina.org

Global Catalysts Technology Forum & Exhibition (Cat-Tech 2011) IFRS for Oil and Gas Industry Workshop International Bottom of the Barrel Technology Conference & Exhibition (BBTC 2011) LNG Value Chain 1st Zambian International Mining & Energy Conference & Exhibition (ZIMEC 2011) Green Refining & Petrochemicals Forum & Exhibition (Green Forum 2011) World National Oil Companies Congress 2011 Upstream & Downstream Oil and Gas Exhibition & Conference China International LNG Conference

July
19-22 Africa Mining Congress 2011 Johannesburg, South Africa www.terrapinn.com

August
11-12 17-18 Mining and Mineral Processing Optimization Nigeria Economic Forum 2011 Johannesburg, South Africa Johannesburg, South Africa www.salvoglobal.com www.petro21.com

September
6-8 19-20 20-21 20-23 20-23 Offshore Europe, Conference & Exhibition International Gas Technology Conference & Exhibition (IGTC 2011) 21st World Upstream 2011 Conference Africa Energy Week Gulf of Guinea Oil and Gas Conference (GOG14) Aberdeen, UK Moscow, Russia Geneva, Switzerland Accra, Ghana Accra, Ghana www.offshore-europe.co.uk www.europetro.com www.petro21.com www.cwcaew.com www.cwcaew.com

October
4-6 11-12 11-13 12-13 19-20 24-26 26-27 31 - Nov 4 1st Congo International Oil and Gas Conference (CIEHC) Offshore Energy 2011 Exhibition & Conference Chad International Oil, Mining and Energy Conference and Showcase/Exhibition (CIOME 2011) Africa Petroleum Storage and Transport Conference and Showcase/Exhibition (APESTRANS 2011) TMECE, Tanzanian Mining and Energy Conference & Exhibition Middle East Drilling Technology Conference & Exhibition 2nd German-African ICT Forum Africa Oil Week Brazzaville, Republic of Congo www.ciehc.com Amsterdam, Netherlands NDjamena, Chad NDjamena, Chad Arusha, Tanzania Muscat, Oman Nairobi, Kenya Cape Town, South Africa www.offshore-energy.biz www.ciome-chad.com www.cubicglobe.com www.tanzaniaminingenergy.com www.spe.org www.ict-conference.de www.petro21.com

18th

November
7-11 15th Africa OILGASMINE Trade and Finance, Conference & Exhibition Brazzaville, Republic of Congo www.ogtfafrica.com

December
4-8 20th World Petroleum Congress Doha, Qatar www.20wpc.com

Petroleum Africa Magazine June 2011

67

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COMING IN THE JULY ISSUE

African Retail Uganda & Cameroon Industry R&D Initiatives *African Shale Resources
68
Petroleum Africa Magazine June 2011

* While all the hype on shale may come from Russia and North America, Africa hosts significant shale resources of its own including the worlds #3 reserve holder.