A surge in domestic oil output and a jump in trading income cushioned Norway’s state-controlled Equinor against collapsing commodity prices in Q2, the company said July 24, as it plunged to a loss and warned of more volatility ahead.

Equinor’s Norwegian oil output increased 33% on the year in the second-quarter to 637,000 b/d on the back of the Johan Sverdrup field, which came on stream last October, and despite a national curb on oil production imposed in June to help support international markets, its quarterly results showed. Johan Sverdrup achieved its first-phase output “plateau” of 470,000 b/d in April, with a further phase due on stream in 2022.

The increased Norwegian output more than offset the 8% drop in Equinor’s overseas oil output to 407,000 b/d, that reflected a maintenance shutdown at the Peregrino heavy oil field offshore Brazil and production curbs in OPEC countries.

Equinor has positions in OPEC members Algeria and Nigeria, while Norway imposed its own 250,000 b/d cut in crude output in June, easing to 134,000 b/d for the rest of the year.

Equinor also recorded an outstanding contribution from oil trading, with adjusted earnings from its “marketing, midstream & processing division” almost six times higher than the year ago at $1.16 billion.

“The marketing, midstream and processing segment delivered a record-high result… particularly from crude oil and liquids trading, where values were extracted from a market in contango and ability to utilise the asset portfolio,” Equinor said.

According to Equinor, there was no change to its overall strategy in response to the crisis in markets, but gave no indication of full-year output volumes, having abandoned previous guidance of a 7% increase in oil and gas output. It raised slightly its estimate for maintenance impacts on this year’s production to 30,000 boe/d across the portfolio.

It stuck, however, with its previous longer-term guidance on both production and spending, saying its overall production would increase by 3% annually on average in 2019-2026 and it expected capital expenditure of $8.5 billion this year, down from $10 billion last year, followed by a return to $10 billion next year, and average capex of $12 billion in 2022-23.

“We expect market volatility to continue going forward. The long-term market implications from COVID-19, with possible lower demand and reduced investments in the industry, remain uncertain,” CEO Eldar Saetre said.

“However, Equinor’s strategic direction remains firm and we are committed to develop Equinor as a broad energy company to create value in a low-carbon future.”

Equinor’s overall oil and gas output increased 3% on the year to 1.90 million b/d of oil equivalent, measured on an entitlement basis that includes the impact of overseas production sharing contracts.

The company’s gas production fell 8% to 854 million boe/d, partly due to it intentionally withholding output on expectation of price recovery.

The company made a loss of $251 million, compared with a $1.5 billion profit a year earlier, while its net debt ratio jumped to nearly 34%, up from 25% a year earlier.

Source: Platts 

Mozambique’s National Hydrocarbon Company (ENH) has been forced by the raging COVID-19 pandemic to interrupt the exploratory opening of wells in the country’s Buzi district, in the central province of Sofala, a report at the weekend by All Africa said. The search for hydrocarbons in the Buzi district resumed early this year after initial attempts in the 1960s.

The operators in Buzi are ENH and Buzi Hydrocarbons PTE Ltd, a subsidiary of the Indonesian company Energi Mega Persada. An exploratory well, known as BS-2, was drilled in Buzi in May.

The All Africa report said the spread of COVID-19 has led ENH and its Indonesian partner to inform the regulator, the National Petroleum Institute (INP) that it is interrupting operations.

“This is a complex activity, undertaken by a considerable number of workers, including expatriates. Since it is obligatory to comply with the procedures laid down by the government concerning people and goods entering and leaving Mozambican territory, the companies could not proceed with the due rotation of staff,” a note on the INP website was quoted.

So, operations at BS2 have been cut back to maintaining the drilling platform. The well has already reached the depth of 836 metres (out of a planned 1,548 metres). It is the second well drilled recently in Buzi.

The first, BS1, is about a kilometre away and reached a depth of 1,567 metres on 10 March. During the drilling the occurrence of natural gas was noted, but tests will be required to determine whether this is a commercially viable discovery. Each of the two Buzi wells is budgeted at 15.2 million US dollars.

“It is expected that, as soon as the state of emergency is lifted, and the conditions for movement are normalised, the BS1 and BS2 wells will be completed and duly tested to verify the flow and amount of natural gas”, the INP further stated.

All Africa said a concession agreement was signed with Buzi Hydrocarbons in 2010, envisaging the drilling of two wells in the second and third periods of exploration. The first research period was devoted to analysing seismic data, some of which dated back to the initial exploration attempts of the 1960s. 300 kilometres of pre-existing 2D seismic data was reprocessed, and 1,650 kilometres of data was reinterpreted. Buzi Hydrocarbons acquired, processed and interpreted 600 kilometres of new seismic 2D data.

By Chibisi Ohakah, Abuja

The PGS Nigeria MultiClient data library has said that it is providing excellent 2D and 3D seismic coverage on the recently announced blocks in the 2020 Marginal Fields Bid Round by the oil and gas authorities in Nigeria.

MegaSurveys are merged final-stack 2D and 3D datasets, which enable evaluation of basins in a regional context, including visualization of different plays and hydrocarbon migration pathways on a large scale. They act as a mechanism for exploration analog-building and opportunity identification.

Nigerian government through its Department of Petroleum Resources (DPR), recently launched its 2020 licensing round, inviting mostly local investors to participate. A total of 57 (fifty-seven) marginal fields are on offer, including a number in shallow-water terrains.

PGS MultiClient said in a statement last weekend hinted that data is available for evaluation of the blocks. “The PGS Nigeria MegaSurvey complements offshore blocks of the 2020 marginal fields bid round, offering prospective block licensees the opportunity to integrate 3D seismic data with available horizon interpretation into block evaluations to gain an understanding of prospective in key areas offshore,” the company said.

“PGS is delighted to offer this superbly located 3D data to support the Nigerian marginal fields round, and enable participating companies to gain a competitive advantage in their geological understanding’, says PGS new ventures manager, Joshua May.

The PGS MultiClient library provides widespread data coverage over the inboard extensional province of the Niger Delta’s structural zones. Regional data gives a detailed overview of complex tectonics related to the Akata Shale Formation movement and diapirism.
The shallow-water blocks of the 2020 Marginal Fields Bid Round cover two main structural provinces directly linked to the gravity-driven movement of the Akata Shale Formation. The blocks proximal to the coast are situated in the extensional province, whilst the outboard blocks transition into the diapir province. Both provinces are dominated by complex structures that generate excellent trapping potential. The largest accumulations are found in roll-over anticlines in the foot-walls of growth faults, but hydrocarbons may also be found in fault closures and subtle stratigraphic traps.

To arrange a data show of PGS Nigeria MultiClient data, please contact [email protected].

By Chibisi Ohakah, Abuja

A new report from the Oxford Institute for Energy Studies (OIES), has stated that the margin for exporting oil products remain negative, and could remain so for the duration of 2020, even with glut in the Liquefied Natural Gas (LNG) sector.

Observers say that Nigeria may take advantage of the low prices to increase supply for power generation, as calls for local consumption of gas intensifies, especially for gas-to-power.

According to the report, the LNG glut is hurting both buyers and sellers. This means that an average U.S. LNG cargo would not cover its short-run marginal cash costs delivering to Europe or Asia at current prices,” the Oxford Institute for Energy Studies (OIES) said.

Meanwhile, analysis of S&P Global Platts Analytics data has shown that exports of LNG from West Africa’s four producers have revealed some resilience, despite economic turmoil triggered by the coronavirus pandemic.

Total LNG exports from the four exporting countries in the region – Nigeria, Angola, Equatorial Guinea, and Cameroon so far this year are broadly in line with volumes supplied in the corresponding period last year, the data show.

That is despite sharp falls in LNG utilization rates in other parts of the world, particularly in the US, while spot-exposed Egypt has halted LNG exports altogether. Nigeria is exposed to the spot market with around 50 per cent of its LNG exports last year sold on a spot or short-term basis, according to industry group GIIGNL.

But Nigeria’s LNG exports in 2020 have stayed strong despite weaker demand and low prices, with some 11Bcm exported in the first five months of the year. Although some cargoes had taken longer to reach their destinations, while other loaded ones have been idling at sea in recent weeks, exports continue out of the country’s only LNG plant, the 22million mt/year Nigeria LNG facility.

“With supply to the Nigeria LNG facility being associated with gas, LNG exports are to a degree driven by domestic oil production, which Platts Analytics estimates fell by around 5% over the first five months of the year,” Platts Analytics’ LNG analyst, Luke Cottell, said.

“This meant we saw little change in LNG exports year-on-year, although a record volume of Nigerian LNG on the water in late May, was indicative of the difficulties such cargoes faced in finding a home amid record low prices in both Asia and Europe,” Cottell said.

During a webinar in June, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, said a shortage of gas had made it difficult for the country to make use of its installed capacity.

As of January 2020, Nigeria’s gas reserves stood at 203.16 trillion ft3, representing a marginal increase of 1.16 trillion ft3 from the 202 trillion ft3 recorded in 2019. In the coming months, Nigeria’s oil output may fall as it moves to fully comply with its OPEC+ production quota. As a result, Cottell said LNG exports are likely to be curtailed in tandem.

Gas analyst at the International Energy Agency (IEA), Jean-Baptiste Dubreuil, in early June, said LNG trading overall remained high despite the pandemic and an expected four per cent dip in total global gas demand in 2020.

He said that while pipeline gas exports from North Africa had been hit by the slowdown in demand; LNG exports had been fairly resilient. The worldwide glut has funnelled more natural gas into storage around the world. With storage elevated in Europe, the market signalled that supply cuts were necessary. The U.S., which has the most flexible contracting terms (which the industry sold as a feature), is shouldering the burden of rebalancing.

U.S. LNG exporters have seen dozens of cancelled cargoes because of the glut, although for companies like Cheniere Energy, their finances are somewhat protected because buyers still have to pay fees even if they cancel the cargoes.

The markets are pricing in an improvement in 2021, which is based on “either a very significant surge in Asian gas demand in 2021 or another round of LNG shut-ins to support the gas price,” OIES said. The report forecasts margins remaining below levels that might signal new investment in new capacity through the end of 2023.

“It is therefore clearly relevant to ask whether we should expect to see any new U.S. LNG investment decisions being taken in the foreseeable future, especially with buyers not rushing to sign new long-term contracts,” OIES wrote. The pandemic-related downturn is hollowing out investment in both oil and gas. The number of projects receiving final investment decisions is expected to fall by 75 per cent this year, according to Rystad Energy.

The total amount of money funnelled into new projects will drop to just $47 billion, a very low number that is actually inflated by a set of projects in Norway and Russia. In 2019, the amount of money invested in new oil and gas projects reached $197 billion.

By Chibisi Ohakah, Abuja

Nigeria lost N281 billion  ($779.9 million,) in six months, as oil and gas companies operating in the country flared 222.8 billion standard cubic feet (bscf) of gas from January to June 2020, data obtained yesterday from the Nigeria’s federal government’s gas flare tracker said.

In the gas flare tracker published by the National Oil Spill Detection and Response Agency (NOSDRA), majority of the flares were from onshore oil and gas sites, which accounted for 60.95% of total gas flared, while offshore sites accounted for 39.05% of the total.

According to the report, 135.8 billion standard cubic feet of gas was flared on the onshore sites in the six months period, while 87 billion standard cubic feet of gas was flared offshore.

In addition to the N281 billion loss, the report said the fine accruable to the country from the flaring of 222.8 billion SCF of gas stood at N160.45 billion, an equivalent of $445.7 million. 
Furthermore, the report further stated that the volume of gas flared in the six-month period is an equivalent of 11.8 million tonnes of carbon dioxide (CO2) emissions, and is capable of generating 22,300 Gigawatts-Hour (GWH) of electricity.

A breakdown of the figure, stated that the 135.8 billion SCF of gas flared onshore, is valued at $475.5 million, an equivalent of N171.18 billion; would fetch a penalty of $271.7 million, an equivalent of N97.81 billion; translated to 7.2 million tonnes of CO2 emissions and capable of generating 13,600 GWH electricity.

On the other hand, the report stated that the 87 billion SCF of gas flared offshore between January and June 2020, cost the country a loss of N109.58billion or $304.4 million, in revenues; would lead to a penalty of N62.64 million or $174 million; CO2 emissions of 4.6 million tonnes and an equivalent of 8,700 GWH of electricity.

The NOSDRA report stated that that at the onshore sites, Delta State suffered the most from this unhealthy practice in the six-month period, as it accounted for 38.4% of total gas flared onshore and 23.4% of total gas flared offshore.

Specifically, it disclosed that 52.2 billion SCF of gas was flared by the oil and gas companies operating in Delta state, translating to CO2 emissions of 2.8 million tones and an equivalent of 5,200 GWH of electricity. The volume of gas flared in the state is valued at $182.6 million and would fetch the companies, penalties of $104.4 million.

The NOSDRA report stated, in addition, that Rivers State followed with 38.5 billion SCF of flared gas, valued at $134.9 million; Bayelsa recorded gas flare totaling 27.1 billion SCF valued at $94.7 billion; while 9.9 billion SCF of gas was flared in Edo state, valued at $34.5 million. Imo recorded 6.0 billion SCF of flared gas valued at $21.1 million.

Akwa Ibom 1.8 billion SCF, valued at $6.3 million; Abia 357.5 million SCF valued at $1.3 million and Anambra 23.2 million SCF valued at $0.08 million. In general, the report noted that at onshore sites, 23.66 billion SCF of gas, 17.51 billion SCF, 20.39 billion SCF, 23.67 billion SCF, 26.49 billion SCF and 24.12 billion SCF were flared in January, February, March, April, May and June 2020 respectively.

By Chibisi Ohakah, Abuja

The three-year-old company based in Ireland provides turnkey underwater data acquisition services with its growing fleet of innovative unmanned surface vessels (USVs) which deliver an unprecedented combination of safety, versatility, efficiency and productivity.

And, thanks to Torqeedo’s electric propulsion systems, they are also nearly 100% emission-free.

XOCEAN’s XO-450 USV is a custom-designed composite wave-piercing catamaran about the length of a typical automobile. The lightweight vessel is powered by a pair of Torqeedo Cruise 2.0 electric pod drives, with a Power 24-3500 lithium-ion battery and a lightweight micro-generator. Solar panels on deck provide efficient recharging during daylight hours. 

The two electric thrusters are controlled separately to adjust the speed on each side, steering the boat on the desired course.  A pair of Torqeedo Ultralight outboards at the bows enhance the vessel’s station keeping abilities when gathering data.

XOCEAN reports that the boat’s operating range is 1,500 nautical miles, providing up to 18 days of mission endurance running 24/7.   

The XO-450 USVs are designed to be easily and quickly deployed. When underway, the crewless vessels are controlled remotely by qualified pilots at XOCEAN’s operations centre, which also monitors battery status and quality of the data being collected. The onboard broadband satellite transceiver provides continuous over-the-horizon connectivity.

The extremely low noise signature of the Torqeedo electric drives was also an essential element in the success of the mission, which used an acoustic transceiver to retrieve data wirelessly through the water, according to XOCEAN.  

“Sustainability is a central value for us,” said XOCEAN CEO James Ives. “Our USVs have a negligible carbon footprint, only producing about one-thousandth of the emissions of a conventional survey vessel. We are also employing offsets for all carbon produced in the delivery of our projects resulting in fully carbon-neutral survey data for our customers.”  

“Unmanned survey vessels are a perfect application for our electric drives, providing clean, green and quiet solutions for a wide range of underwater missions,” said Dr Michael Rummel, managing director of Torqeedo. 

The company currently has eight of the XO-450 USVs in service with four more vessels under construction to be added to the fleet this year.  

In a recent deployment, a XOCEAN XO-450 USV completed a pioneering live seabed-to-shore data harvesting mission from an array of Sonardyne pressure monitoring transponders at the Ormen Lange natural gas field off the coast of Norway. The 30 sensors measure and record pressure, temperature and inclination data at the seafloor at 800-1,100 meters depth.

The USV transited more than 160 nautical miles from Kristiansund out to the Ormen Lange field, spent 12 hours on station retrieving data from the sensors using an acoustic array and completed the return trip to Kristiansund in a total of just over three days.

Stakeholders in the Nigerian oil and gas sector have called for an efficient and attractive fiscal policy in the oil and gas sector to help drive investment and infrastructure development in the country.

This was disclosed during a virtual workshop on Leveraging Fiscal Regulations to Attract Investments in the Petroleum sector, on Thursday.The Chairman, Energy Institute Nigeria, Mr Osten Olorunsola, said that the oil and gas sector in Nigeria needed a lot of investment to meet with the current global challenges.

He stated that globally, the industry had witnessed a decline in product demand and a low price regime, adding that only low-cost molecules would be able to make it in the market.

Olorunsola said that the sector in Nigeria needed to transform to meet with the current trend as the sector was not buoyant as perceived by many.

He noted that the Nigerian government needs to define what energy transformation meant to it and focus to ensure that it delivered on policies that would develop the sector. “We need steady revenue, growth in all spheres of the sector, and value-oriented leaders.

“We need to speed up with legislation to ensure that oil in the ground does not remain there and also create an enabling environment for business to thrive. All these will give rise to sustained investment,’’ he said

Olorunsola further said that fair sharing remained the bone of contention in designing fiscal policy.

He advised that the new policy must ensure that change of government would not affect the sector, and must be simple, transparent, socially inclusive, and flexible.

“Beyond competitiveness, we must aim at fiscal profitability. Investment in the sector will be enhanced with good fiscal regulations. We need more transformation in fiscal policy to achieve the desired result,’’ he added.

In her remarks, Mrs Audrey Joe-Ezigbo, President, Nigerian Gas Association (NGA), said that Nigeria needs to move as a nation that could generate foreign exchange and create employment.

She said that a lot needs to be done to attract investors in the sector adding that Nigeria could take a cue from what Egypt had done in the past five years to develop its oil and gas sector.

The NGA president said that while Nigeria oil and gas sector contributed 9.14 percent to GDP, other oil nations like Angola and Kuwait contributed 50 and 40 percent respectively to their nation’s GDP.

“Like Nigeria, Egypt has 61 Trillion Cubic Feet (TCF) of gas and 42TCF of gas yet to be discovered. This is small compared to what we have here in Nigeria.

“They started importing gas when they saw that domestic production was no longer meeting domestic demand.

“Egypt with good policy recognized this and unlocked their economy and had significant discovery and today, they are self-sufficient,’’ she said

She noted that fiscal policy was significant to investors, adding that the NGA believed that natural gas could help bring about a lot of changes in the industry.

Joe-Ezigbo noted there was a need to look at types of resources in the country in creating the fiscal policy and ensure a stand-alone policy for gas.

She advised that the government should also create a landscape that incentivizes gas, look at bottlenecks is contracting among others.

“It is imperative to pass fiscal policy, for upstream, downstream, and midstream with a gas having a stand-alone policy.

“The policy must address the dearth of capital and investment and must-see gas as an economic enabler that should not be over-taxed,’’ the NGA president added.

Also speaking, Mr Joe Nwakwe, Chairman, Society of Petroleum Engineers, Nigeria Council, said that the government must know that oil and gas also belonged to the next generation and hence good policy was imperative.

He said that the new fiscal policy must capture that to be realistic, adding that issues of the Host Community must be critically looked into to ensure the safety of workers.

“Fiscal policy must strengthen the licensing of operations and ensure a peaceful production environment.

“The host communities must also be happy with the business happening in their area,’’ the SPE chairman said.

(NAN)

The Department of Petroleum Resources (DPR) has appealed to the Kogi State Government to provide suitable location in Lokoja for sellers of cooking gas.

The state Controller of DPR, Mr Idris Mohammed, who made the appeal on Thursday in Lokoja, said this became necessary to check indiscriminate establishment of cooking gas sale outlets in the city.

Mohammed, who spoke after leading a surveillance team of the organisation on an inspection tour of some gas sale outlets, condemned the idea of establishing such businesses in residential areas and other unsuitable locations.

According to him, the establishment of gas outlets in residential areas where people live and operate their businesses is unacceptable as it is against the law.

“Here, the owner sell gas from cylinder to cylinder which poses serious danger to the environment and the people living in this area.

“You can see how they transfer gas from cylinder to cylinder and if there is any little spark or heat the cylinder will ignite fire and explode.

“In as much as government is campaigning for the use of gas for cooking to discourage deforestation, we will not compromise standards,” he explained.

He advised those who were operating illegally to stop or face prosecution.

“We are advising operators to come to the DPR office for advice because if you have licence we will tell you how to go about the business in a lawful way that will not have negative effect on the people and the environment,” he said.

While commenting on the seven outlets sealed by the surveillance team, Mohammed said that the outlets were not registered with DPR.

“The owners did not register with DPR because they know we cannot approve such illegal operation,” he stated.

The Controller called on consumers to stop patronising illegal gas sale outlets, advising consumers to always refill their cylinders at standard gas stations.

Orient Energy Review with NAN Report

Nigeria’s state oil company and its joint venture partners have spent $360 million on cleaning up the Niger Delta oil heartland in the past two years, the Nigerian National Petroleum Corporation (NNPC) said on Monday, but locals said little work had been done.

Nigeria is Africa’s biggest crude oil exporter. Oil sales account for around 90% of its foreign currency earnings but oil spills in the southern Niger Delta region have caused pollution and angered locals.

Royal Dutch Shell Plc was forced out of Ogoniland in 1993 by campaigners led by activist Ken Saro-Wiwa, after they said the oil company had destroyed their fishing environment. Saro-Wiwa was later hanged by the military government, prompting international outrage.

A 2011 United Nations report warned of catastrophic pollution in soil and water in Ogoniland. It said Shell and Nigeria’s government needed to address the problems.

In 2015 Shell accepted responsibility for operational faults that caused two spills in 2008.

Shell paid a settlement of 55 million pounds to villagers and since then has said it has taken steps to improve the situation in the area, including training youths to start up businesses and funding community patrols to reduce pollution by vandals stealing oil.

Reuters

Chevron Corporation has entered into a definitive agreement with Noble Energy to acquire all of the outstanding shares of Noble Energy in an all-stock transaction valued at $5 billion, or $10.38 per share.

Based on Chevron’s closing price on July 17, 2020, and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total enterprise value, including debt, of the transaction is $13 billion.

The acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio. Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean. Noble Energy also enhances Chevron’s leading U.S. unconventional position with de-risked acreage in the DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.

“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow. These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline. We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organizations.”

“This combination is expected to unlock value for shareholders, generating anticipated annual run-rate cost synergies of approximately $300 million before tax, and it is expected to be accretive to free cash flow, earnings, and book returns one year after close,” Wirth concluded.

“The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns,” said David Stover, Noble Energy’s Chairman and CEO. “Over the last few years, we have made significant progress executing our strategic objectives, including driving capital efficiency gains onshore, advancing our offshore conventional gas developments and significantly reducing our cost structure. As we looked to build on this positive momentum, the Noble Energy Board of Directors and management team conducted a thorough process and concluded that this transaction is the best way to maximize value for all Noble Energy shareholders. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits that this combination will deliver.”

Transaction Benefits

1. Low Cost Acquisition of Proved Reserves and Attractive Undeveloped Resource.

Based on Noble Energy’s proved reserves at year-end 2019, this will add approximately 18 percent to Chevron’s year-end 2019 proved oil and gas reserves at an average acquisition cost of less than $5/boe, and almost 7 billion barrels of risked resource for less than $1.50/boe.

2. Strong Strategic Fit.

Noble Energy’s assets will enhance Chevron’s portfolio in:

U.S. onshore

(a) DJ Basin – New unconventional position with competitive returns that can be further developed leveraging Chevron’s proven factory-model approach.
(b) Permian Basin – Complementary acreage that enhances Chevron’s strong position in the Delaware Basin.
(c) Other – An integrated midstream business and an established position in the Eagle Ford.

International

(a) Israel – Large-scale, producing Eastern Mediterranean position that diversifies Chevron’s portfolio and is expected to generate strong returns and cash flow with low capital requirements.
(b) West Africa – Strong position in Equatorial Guinea with further growth opportunities.

3. Attractive Synergies

The transaction is expected to achieve run-rate operating and other cost synergies of $300 million before-tax within a year of closing.

4. Accretive to Return on Capital Employed, Free Cash Flow, and EPS

Chevron anticipates the transaction to be accretive to ROCE, free cash flow and earnings per share one year after closing, at $40 Brent.

The acquisition consideration is structured with 100 percent stock utilizing Chevron’s attractive equity currency while maintaining a strong balance sheet. In aggregate, upon closing of the transaction, Chevron will issue approximately 58 million shares of stock. Total enterprise value of $13 billion includes net debt and book value of non-controlling interest.

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in the fourth quarter of 2020. The acquisition is subject to Noble Energy shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.

The transaction price represents a premium of nearly 12% on a 10-day average based on closing stock prices on July 17, 2020. Following closing of the transaction, Noble Energy shareholders will own approximately 3% of the combined company.

Credit Suisse Securities (USA) LLC is acting as financial advisor to Chevron. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Chevron. J.P. Morgan Securities LLC is acting as financial advisor to Noble Energy. Vinson & Elkins LLP is acting as legal advisor to Noble Energy.

Orient Energy Review

Kenya has won an arbitration case over a withdrawn geothermal exploration licence before the International Centre for Settlement of Investment Disputes (ICSID), Kenyan attorney general Paul Kihara Kariuki said in a statement.

The case was filed by US-Canadian renewables developer WalAm Energy Inc in 2015, on claims that the republic of Kenya had unlawfully revoked its geothermal resources licence for the Suswa geothermal fields.

WalAm Energy sought to have the licence reinstated and asked for USD 339.6 million (EUR 296.6m) in compensation and interest for expropriation.

According to the attorney general, the licence was issued in 2007 and granted WalAm Energy exclusive rights to explore, drill, extract, produce and dispose geothermal steam and other geothermal resources in the Suswa area for 30 years.

In 2012, the Kenyan government revoked the licence after establishing that the developer had failed to perform its duties and did not have the capacity to carry out the required exploration and exploitation work, the statement reads.

On July 10, the ICSID tribunal decided to dismiss all of WalAm Energy’s claims. It ruled that the plaintiff is to cover all costs of the arbitration, including Kenya’s share, and 75% of the Kenyan government’s legal fees and expenses, which amount to around USD 4.49 million in total.

(USD 1.0 = EUR 0.87)

Total has announced its securement of $14.9 billion in senior debt financing for its landmark Mozambique LNG development, in spite of current disruptions to the oil and gas market.

With a total post-FID investment of $20 billion and $14.9 in project financing, Mozambique LNG represents the largest foreign direct investment in Africa to date. The project received direct and covered loans from eight export credit agencies, 19 commercial bank facilities and a $400 million loan from the African Development Bank.

“The signing of this large-scale project financing, less than one year after Total assumed the role of operator of Mozambique LNG, represents a significant achievement and a major milestone for the project,” said Jean-Pierre Sbraire, Chief Financial Officer of Total.

“It demonstrates the confidence placed by the financial institutions in the long-term future of LNG in Mozambique. This key milestone has been reached thanks to the dedication of the Mozambique authorities and the financial partners of the project.”

Serving as the first onshore LNG development in the country, Mozambique LNG involves the development of the Golfinho and Atum fields located in Offshore Area 1 concession and the construction of a two-train, 13.1 million-tpy liquefaction plant.

Financial close is expected by the end of September, with first fuel cargoes to be delivered in 2024.

AOP