Saudi Arabia - joining the dots

A series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy

AIM - Assets In Market

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Iran negotiations - is the end nigh?

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Yemen: The Islamic Chessboard?

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Acquisition Criteria

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Valuation Series

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Showing posts with label Sub-Saharan Africa. Show all posts
Showing posts with label Sub-Saharan Africa. Show all posts

Tuesday 14 April 2015

Victoria Oil & Gas: Cameroon's emerging integrated utility




Victoria Oil & Gas is an AIM listed E&P with a 60% WI in the Logbaba field, Cameroon and an associated infrastructure network that supplies gas to the local market. The company acquired its interest in the Logbaba field in 2008 and drilled its first appraisal well (La-105) on the block in 2009, the first onshore well since the 1950s. First production commenced in 2012 with the roll-out of a distribution pipeline network in 2013 Victoria Oil & Gas is now transitioning away from a pure-play E&P to an integrated energy supplier in Cameroon. The next stage of the company’s strategy is to grow its gas-to-power business which supplies gas for power generation by industrial customers and also to the gas grid which feeds into regional power plants. The company also has a 100% WI in the West Medvezhye field in Russia with 2C resources of c.14.4mmboe; this asset is non-core and the company continues to seek options around a partial or full exit.

The Logbaba gas field is located in the Douala Basin, in the eastern suburb of Douala, Cameroon’s largest city. Victoria Oil & Gas has a 60% WI with the remaining 40% held by Grynberg Petroleum. Gross 2P reserves are estimated at 210bcf of gas plus 3.4mmbbl of condensates. Seismic data suggests there may be a larger reservoir c.4km north of Logbaba that could provide future upside. Production is currently from two wells La-105 and -106 which were drilled between 2009 and 2010, and is tied back to 40mmcf/d gas processing facilities that include a gas and condensate separator. These facilities are currently c.20% utilised. The gas is supplied through the company’s pipeline network to customers in the nearby Magzi industrial area and condensates are trucked to other parts of the country.


Victoria Oil & Gas operates its utility business in Cameroon through a wholly owned subsidiary, Gaz du Cameroun (“GDC”), which supplies gas and condensates to the local market. GDC commenced construction of a gas pipeline network in 2013 in Douala to enable the supply of gas to the region’s industrial customers. In 2014, GDC extended the pipeline across the Wouri River, opening up a new market; the pipeline network now extends over 25km. Gas is supplied for industrial processes and power generation. Gas for thermal use is sold at $16/mmbtu for the first 5 years of a 20 year supply contract with the price renegotiated at the end of the 5th year. Gas for power generation is sold at c.$12/mmbtu under a 10 year take-or-pay contract. In December 2014, GDC agreed the initial supply of gas to the domestic grid for power generation at $9/mmbtu. The company is currently evaluating the feasibility of supplying compressed natural gas which would allow the sale of gas outside of Douala by road; this could remove the capital requirements of establishing a pipeline distribution network.

Saturday 6 December 2014

Sub-Saharan Africa - newsflow update



Gabon Deepwater - Leopard discovery

  • Leopard-1 was drilled on licence BCD10
  • Shell 75%*, CNOOC 25%
  • Encountered substantial gas column with 200m net gas pay
  • Further appraisal required
  • FLNG? 3-4 tcf may be required, although economics of sales into Europe are marginal
  • Government is also keen to grow domestic gas market

Congo Offshore - Eni/NewAge - follow up discovery in Marine XII
  • Minsala Marine discovery
  • Estimated 1bnboe in place, of which 80% oil
  • In same shallow water block as the Litchendjili and Nene Marine fields, both of which are currently undergoing development

Angola - first discovery in Kwanza Basin
  • Pre-salt offshore Kwanza Basin - oil discovery made by Repsol
  • Will evaluate commerciality of the Locosso oil field
  • Located in Block 22, immediately to south of Cobalt's Block 21 which contains the play opening Cameia field
  • Given remote location and water depth, Wood Mackenzie estimates will require 300mmbbl to be commercial on standalone basis

Liberia, Cote d'Ivoire - Anadarko's non-commercial wells

Nigeria - NNPC pre-empts sale of OML25
  • NNPC has pre-empted on the sale of OML25
  • Post transaction, NNPC will own 100% and likely transfer the interest to NPDC
  • NPDC's portfolio is already overstretched and future investment will be heavily constrained
  • The winning bidder of the Shell, Eni, Total process was Crestar Integrated Natural Resources Limited
  • It is believed that the pre-emption, a decision made by the Minster of Energy, is due to Crestar's Chairman being  Osten Olorunsola
    • The Minister of Energy had fired Osten Olorunsola as Director of Petroleum Resources in June 2013
  • http://africaoilgasreport.com/2014/11/farm-in-farm-out/nnpc-in-desperate-search-for-funds-to-pay-for-oml-25/
South Sudan - fighting likely to intensify around fields
  • Government and rebels now re-arming following end of rainy season
  • Sudan is providing South Sudanese Machar-led rebels with weapons and intelligence
  • Rebels likely to set-up bases where they can attack oil fields
  • Local self defence militia are guarding fields bolstered by Chinese peacekeepers
    • Should prevent rebels gaining control of fields, but fighting likely to intensify
East African export pipeline
  • World bank has pledged USD600mm funding towards Ugandan/Kenyan export pipeline
  • Total cost estimated to be >USD4bn
  • Project still remains in early stages - commercial structure, construction, ownership and operations all yet to be determined
  • FEED contracts expected to be awarded end of 2014