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Acquisition Approval Delays: The Wrong Look for Nigeria (By NJ Ayuk)

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NJ Ayuk

There is a crying need for a new level of efficiency, timeliness, and openness in the approval process to give a fair shake to domestic energy players

CAPE TOWN, South Africa, July 30, 2024/APO Group/ — 

By NJ Ayuk, Executive Chairman, African Energy Chamber (https://EnergyChamber.org).

The Nigerian government needs to step up its game regarding approvals for indigenous companies acquiring in-country foreign energy assets.

The negative consequences of approval delays, ranging from many months to two-plus years, include forfeited revenue from lost royalties and taxes, production shortfalls, investor discouragement, and safety issues that arise while maintenance is put on hold.

The government approval process has stymied several of these potential deals over the past couple of years. These puzzling delays raise questions about why they are happening, as well as how serious officials are about increasing energy production to help Nigeria’s economy and its people.

There is a crying need for a new level of efficiency, timeliness, and openness in the approval process to give a fair shake to domestic energy players. Without it, the country’s economy and its citizens have the most to lose. The government can and must do better than this to keep its oil industry competitive, profitable, and safe.

Chappal Energies: Unlocking Latent Resources

In July 2024 TotalEnergies EP Nigeria sold to Chappal Energies its 10% interest in the SPDC JV licenses in Nigeria for 860 million USD. These assets produce a lot of beautiful low carbon from gas from OML 23, OML 28 and OML 77.

In late 2023, Norway’s state-owned Equinor agreed to sell its Nigerian business, Nigeria Energy Company (ENEC), to Nigerian homegrown firm, Chappal Energies. The sale includes the unitized 20.21% interest Chevron operates in the country’s deepwater Agbami oil field, which has produced over 1 billion barrels of oil for Equinor since 1992.

Equinor has said it expects Chappal Energies will continue development of its long-held assets in Nigeria, to the betterment of the country’s economy. Chappal is optimistic, too, with its managing director, Ufoma Immanuel, expecting positive effects on both the environment and the community.

Chappal has just the sort of attitude and drive Nigeria needs in its indigenous petroleum businesses, having stated that it is intent on “unlocking latent value in Nigeria’s and Africa’s oil and gas resources.”

The sale can only close after specified conditions and all regulatory and contractual approvals are finished. These are still pending.

Oando: Doubling its State Partnership Stake

In the early fall of 2023, in line with the Eni 2023-2026 Plan, Italian supermajor Eni agreed to sell Nigerian Agip Oil Company Ltd (NAOC) to Oando, a Nigerian stock exchange-listed provider of energy solutions.

Eni’s plan includes an effort to divest itself of resources that offer value and opportunity to other owners.

NAOC concentrates on producing onshore Nigerian oil and gas and on generating power. Its Nigerian holdings include interests in four onshore blocks, two power plants, and two onshore exploration leases. Besides these assets in the Niger River Delta, the deal includes an interest in the Brass River oil terminal.

Overall, the agreement means that Oando can double its interest in NAOC JV, the partnership it has with the state, to 40%, and increase its reserves to over 1 billion barrels of oil equivalent (boe).

Oando’s CEO, Wale Tinubu, sees the purchase as being “in alignment” with his company’s strategy of “acquiring, enhancing, appraising, and efficiently developing reserves.”

Closing the sale depends on authorization of all the relevant local and regulatory authorities — a process that is still ongoing nearly a year after the agreement was reached. There has been some talk of a approvals set to happen soon.

Renaissance: Making a Large Onshore Investment

In January 2024, Shell agreed to sell Shell Petroleum Development Co. of Nigeria Limited (SPDC), its Nigerian onshore subsidiary, to Renaissance, an association made up of five Nigerian exploration and production companies (ND Western Limited, Aradel Holdings Plc, FIRST Exploration and Petroleum Development Company Limited, and The Waltersmith Group) plus an international energy group (Petrolin Limited). The firms agreed to a sales price of USD 1.3 billion.

The government can and must do better than this to keep its oil industry competitive, profitable, and safe

All of SPDC’s operating capabilities and staff are to be maintained in the transaction, including technical expertise, management systems, and processes.

Describing Renaissance as “an experienced, ambitious Nigerian-led consortium,” Shell says the sale is part of its plan to concentrate its own Nigerian investment in deepwater and integrated gas.

With the bulk of Nigeria’s liquefied natural gas (LNG) feed gas coming from SPDC, it is important that Shell has agreed to play a supportive role after the sale so that all goes smoothly.

The sale cannot close until approvals from Nigeria’s federal government and other conditions are met.

Seplat: Securing a Long-Awaited Approval

There is, fortunately, one slow-moving approval story that has recently been resolved. On June 14, 2024, Arise News reported that NNPC has withdrawn its court case objecting to the ExxonMobil/Seplat deal, clearing a path for ExxonMobil to sell its entire interest in Mobil Producing Nigeria Unlimited to Seplat Energy.

Nigerian President Bola Tinubu had met with Liam Mallon, head of ExxonMobil, and members of the Ministers of Petroleum two months earlier, asking that officials remove barriers to approval.

The USD 1.28 billion deal was first greenlighted over two years ago by the parties, but politics and legalities hindered the sale from closing. The deal will turn over the U.S. company’s shallow-water OMLs 67, 68, 70, and 104 to Seplat and allow it to benefit from stakes in the Bonny River and Qua Iboe terminals and natural gas liquids recovery plants.

All of ExxonMobil’s offshore shallow-water operations are included in the agreement — the effect of which is to create a major independent Nigerian energy company. The upshot is that the sale is a very significant opportunity for the country to increase its daily crude production by 700,000 or more barrels.

The approvals process became gridlocked just months after the agreement was made when the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) cited an “overriding national interest,” and state-owned NNPC sued ExxonMobil.

Earlier this year, NUPRC tried to hasten regulatory approval for the sale, when NUPRC’s chief executive, Gbenga Komolafe, revisited a list of conditions that must be met for divestment.

Komolafe invited the parties involved to a May meeting and stated that, hinging on the results of the meeting, approval might be given within two weeks.

A signed settlement agreement resulted, with Komolafe, emphasizing the issues of decommissioning, host community development, and environmental remediation.

The terms of the agreement include increasing NNPC’s interest in the four OMLs from 60% to 70%, decreasing Seplat’s interest from 40% to 30%, while Seplat will gain a 10% interest in UTM Offshore’s floating LNG project.

Komalfe stated his unwillingness that Nigeria carry financial burdens resulting from divesting entities continuing to operate assets in the country.

Other issues that have been raised are:  

  • While waiting on approvals, divestors naturally don’t want to further invest further in these assets.
  • Production can decline while approvals are stalled.

Tinubu has asked ExxonMobil for suggestions on improving Nigeria’s oil and gas investment environment.

Step Up Approvals, for Nigeria’s Sake

President Tinubu’s efforts to bring together various parties around the ideas of stability, transparency, and an even playing field hold much promise for the role of Nigerian oil companies in increasing domestic production.

Delays in approvals for these companies’ acquisitions cripple the ability of these Nigerian companies to benefit their country. And that, after all, should be a goal that government regulators and homegrown petroleum firms share.

Distributed by APO Group on behalf of African Energy Chamber.

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RIOT Network and MediaTek collaboration expands digital access in South Africa through innovative, community-driven Wi-Fi solutions

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RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities

JOHANNESBURG, South Africa, November 22, 2024/APO Group/ — 

MediaTek (www.MediaTek.com), a global fabless semiconductor company powering nearly 2 billion connected devices a year, and RIOT Network (https://RIOT.Network), a community mobile broadband provider in South Africa, have announced the successful integration of Mediatek’s Filogic 830 (https://apo-opa.co/3CIbkNl) chipset into RIOT’s second-generation CROWDNet Core Nodes.

The successful deployment of the CROWDNet nodes has enabled RIOT Network to achieve its aim of offering uncapped internet at an affordable price of R99 per month, and to do so profitably. To date, RIOT Network, in partnership with Sonke Telecommunications, has leveraged the nodes to connect more than 800 households and 5000 users in Olievenhoutbosch to uncapped Wi-Fi services.

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities. Its CROWDNet Nodes, enable an innovative model for deploying user-operated network infrastructure. Community members serve as operators of some of the core network devices to earn a share of the fee from neighbours who use the service.

With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity

CROWDNet powered by MediaTek Filogic 830 brings affordable, last-kilometre broadband to communities where it is not commercially viable to deploy towers or fibre. The MediaTek Filogic 830 is a high-performance SoC for routers, repeaters, access points and mesh networking devices. The SoC enables device makers to build-in powerful applications based on an energy-efficient, Wi-Fi 6-ready platform.

“The Mediatek’s Filogic 830 chipset delivers a unique balance of high performance and cost-efficiency, allowing us to keep operational costs low while maximising network reliability and speed,” said Jarryd Bekker, CEO at RIOT Network. “This combination of affordability and sustainable business growth is pivotal to our vision of expanding digital access in underserved communities. Our work in Olievenhoutbosch near Centurion demonstrates the power of reliable, affordable internet, creating new opportunities for economic and social engagement.”

“With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity,” said Rami Osman (https://apo-opa.co/4ghZBUn), Director for Business Development, MediaTek Middle East and Africa. “We look forward to supporting RIOT in building a future where high-quality internet is accessible and impactful for all.”

Distributed by APO Group on behalf of MediaTek Inc

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African Energy Chamber (AEC) Endorses Inaugural Congo Energy & Investment Forum, Catalyzing Growth in the Republic of Congo’s Energy Sector

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African Energy Chamber

The African Energy Chamber proudly supports the inaugural Congo Energy & Investment Forum, scheduled for March 25-26, 2025 in Brazzaville

BRAZZAVILLE, Republic of the Congo, November 21, 2024/APO Group/ — 

The African Energy Chamber (AEC), as the voice of Africa’s energy sector, proudly supports the inaugural Congo Energy & Investment Forum (CEIF), set to take place in Brazzaville on March 25-26, 2025. Unveiled during African Energy Week: Invest in African Energies in Cape Town by the Republic of Congo’s Ministry of Hydrocarbons, this milestone event signals the nation’s commitment to strengthening its role as a key energy player on the continent, while showcasing a range of investment opportunities. 

Under the leadership of Hydrocarbons Minister Bruno Jean-Richard Itoua, the Republic of Congo has emerged as sub-Saharan Africa’s fourth-largest oil producer, with anticipated production of 280,000 barrels per day (BPD) by the end of 2024 and ambitions to reach 500,000 BPD within three to five years. Building on this momentum, the CEIF will highlight innovative projects and foster strategic partnerships that enhance investment, drive economic growth and position the Congo as a leader in Africa’s energy expansion.

Meanwhile, Société Nationale des Pétroles du Congo (SNPC), led by CEO Maixent Raoul Ominga, is spearheading the Congo’s energy growth. SNPC holds a majority stake in the Mengo Kundji Bindi II permit, with 2.5 billion barrels of estimated oil potential. The company is developing the site through 13 wells, 3D seismic data acquisition, and the construction of six production platforms. 

We are honored to secure the Chamber’s endorsement for this pivotal forum

With the Chamber’s official support, the CEIF is set to attract government leaders, C-suite executives from major IOCs and energy experts, who will offer critical insights into Congo’s oil, gas and energy sector developments. The country is overhauling its gas sector to unlock 10 trillion cubic feet of resources through a comprehensive Gas Master Plan and new Gas Code that introduces favorable fiscal terms and enables small-scale project development, as well as large-scale, integrated gas megaprojects like Eni’s Congo LNG and Wing Wah’s Bango Kayo. 

“The Congo Energy & Investment Forum marks a major milestone for the country, amplifying its strategic energy initiatives and showing industry stakeholders that it is serious about advancing its energy sector. We look forward to supporting this forum, which promises to connect investors, drive impactful partnerships and elevate the Congo’s position within Africa’s energy sector,” says NJ Ayuk, Executive Chairman of the AEC.  

“We are honored to secure the Chamber’s endorsement for this pivotal forum, which, through its vast network and influence, will help attract key stakeholders and decision-makers to the event. Together, we aim to highlight the immense potential of the Congo’s energy sector, foster strategic partnerships and drive transformative investments that contribute to sustainable growth across the industry,” notes James Chester, CEO of Energy Capital & Power, organizers of the CEIF.   

This premier forum provides a unique platform for connecting local and international investors with high-impact opportunities across a diversified range of energy projects, paving the way for collaborations that drive growth and transformation. The AEC’s endorsement underscores its commitment to fostering strategic partnerships, sustainable investment and regional cooperation, aligning with its broader mission to make energy poverty history across the continent by 2030.  

As the energy industry continues to serve as a critical pillar of the Congolese economy and a catalyst for sustainable development, the AEC remains dedicated to supporting initiatives like CEIF that foster progress, investment and partnerships across the African energy landscape. 

For more information, please visit www.CongoEnergyInvestment.com

Distributed by APO Group on behalf of Energy Capital & Power.

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Any Successful African Energy Policy at Conference of the Parties (COP) or Anywhere Must Have Oil and Gas at its Core (By NJ Ayuk)

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Conference of the Parties

Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels

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JOHANNESBURG, South Africa, November 21, 2024/APO Group/ — 

By NJ Ayuk, Executive Chairman of the African Energy Chamber (www.EnergyChamber.org).

I believe the ultimate responsibility for getting there is ours and no one else’s. Yes, we need partners to walk alongside us, but the success of our energy movement rests on African shoulders.

To begin with, I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals.

This will be particularly important in COP29 in Baku. It is imperative that African leaders present a unified voice and strategy for African energy transitions. We must make Africa’s unique needs and circumstances clear and explain the critical role that oil and gas will play in helping Africa achieve net-zero emissions in coming decades.

I would encourage African leaders to talk about the need for financing, as well, to make it possible for us to adopt renewable energy sources and set up the necessary infrastructure. Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels.

Africa’s governments have a role to play in a successful African energy movement as well.

Because Africa’s energy industry still can benefit greatly from the presence of international oil companies, our government leaders need to approve contracts with oil and gas companies promptly instead of allowing red tape to delay projects after discoveries are made.

And, they need to offer the kinds of fiscal policies that allow oil companies to operate profitably in Africa. In turn, that will help those companies generate revenue, create jobs and business opportunities, and foster capacity building.

I also would encourage governments and civil societies to reward companies that exemplify positive behavior. Let’s incentivize the kind of activities we want, from creating good jobs and training opportunities to sharing knowledge.

I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals

And there’s more.

We in Africa must work together to create more opportunities for women to build careers in the oil and gas industry at all levels. Our energy industry can’t reach its potential to do good when half of our population is left out. Our progress on behalf of women has not been great—We need to do better, and we need to act quickly.

How the world can support

Now, I mean it when I say Africans are responsible for building the future they want. But, I would love to see Western governments, businesses, financial institutions, and organizations support our efforts.

How? They can avoid demonizing the oil and gas industry. We see it constantly, in the media, in policy and investment decisions, and in calls for Africa to leave our fossil fuels in the ground. Actions like these, even as Western leaders have pushed OPEC to produce oil, are not fair, and they’re not helpful.

I also would respectfully ask financial institutions to resume financing for African oil and gas projects and stop attempting to block projects like the East African Crude Oil pipeline or Mozambique’s LNG projects.

Please understand that with the war in Ukraine, the energy crisis in Europe, and the energy poverty facing our continent, our countries, like many others, are simply choosing the paths they believe are most likely to help their people.

You know, people for years have accused me of loving oil and gas companies more than Africa. The opposite is true. In my frequent travels around the continent, I’ve observed far too many young people with little in the way of opportunities.

I know our young people have aspirations for a better future. I know they have big dreams. And, I know that future is nearly within their grasp.

A thriving, strategically managed energy industry can make it possible for many of these young people, whether it leads to good jobs or it fosters the kind of economic growth that creates jobs in other fields. Even if we only get the lights on in their communities, we’ll be giving our young people hope and improving their chances of realizing their goals.

This is what drives me, the idea that with our ongoing efforts and determination, our young people can realize meaningful opportunities. I encourage each of you to work with us at the African Energy Chamber, in a spirit of cooperation and mutual respect. Together, we can build the kind of African energy movement that our continent, our communities, and our young people need and deserve.

Distributed by APO Group on behalf of African Energy Chamber.

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