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Presentation Sub Saharan Africa (March 2012) (00167794)


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High level presentaton with recent developments in oil and ags developments in sub-saharan Africa

High level presentaton with recent developments in oil and ags developments in sub-saharan Africa

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  • 1. SUB-SAHARAN AFRICA (SSA):Recent Developments in Oil & Gas Presented at Thurgood Marshall School of Law, Energy Symposium March 29, 2012 Elvis Angyiembe Burleson LLP 713.358.1761 700 Milam Street, Suite 1100 Houston, Texas 77002 © 2012. Burleson LLP
  • 2. The Burleson Difference Burleson is the Largest Law Firm in the Country Devoted Entirely to the Energy IndustryOur Clients Include:- Exploration and production companies- Drilling and oilfield service companies- Midstream companies- Energy debt and equity providers- Investment banks- Commercial banks- Private equity funds 2 2 © 2012. Burleson LLP
  • 3. Burleson By The Numbers More than 120 attorneys licensed in 21 states, including all key producing areas in the U.S. 33 lawyers with in-house counsel experience, including several former General Counsels 28 former landmen 9 attorneys with direct experience working in regulatory agencies 7 former prosecutors 4 locations: Houston, San Antonio, Pittsburgh, and Denver 1 focus 1 industry One Law Firm. 3 3 © 2012. Burleson LLP
  • 4. Burleson Covers all Major Shale Plays Pittsburgh Office 31 Attorneys Denver Office 23 Attorneys Houston Office 42 Attorneys San Antonio Office 25 Attorneys Headquarters Other Offices Our attorneys are licensed in 21 states, including core shale states (California, Colorado, Louisiana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, West Virginia and Wyoming) 4 © 2012. Burleson LLP
  • 5. Representative Clients OILFIELD & INDUSTRIAL SERVICES EXPLORATION & PRODUCTION COMPANIES / MIDSTREAMBG US Production Company El Paso E&P Company ACTHERM Holdings, a.s.Cabot Oil & Gas Corporation GeoResources, Inc. Air LiquideCarrizo Oil & Gas, Inc. Penn Virginia Oil & Gas Corp. Artificial Lift CompanyChallenger Minerals Inc. Range Resources Basintek LLC (Basin Capital)Chesapeake Energy Corp. Rex Energy Corporation Castor Petroleum Ltd.Chief Oil & Gas LLC Snyder Associated Companies Cudd Energy ServicesCommon Resources II Southwestern Energy Company Digital Relay GeologixConocoPhillips Talisman Energy USA Inc. DXP f/k/a Southern Engine & Pump CompanyConstellation Energy Partners LLC Tradition Resources LLC Eagle Rock EnergyD.H. Arrington Oil & Gas XTO Energy Express Energy ServicesDevon Energy Production Co. LP Frac Tech Services LLCEast Resources, Inc. (Shell) GHX Industrial LLC Gulf Offshore Logistics ENERGY LENDING Keystone Engineering Petrochem CarlessBank of America, N.A. LaSalle Bank National Association (BOA) Particle Drilling TechnologiesCapitol One Bank Scotia Waterous (USA) Inc. PII Pipeline Solutions (GE)Comerica Bank Wells Fargo Bank, N.A. Pipeline Controls Plains All American Pipeline LP PSI Midstream PRIVATE EQUITY / INVESTMENT BANKING Seastream JV – SURF Solution Tejas EngineeringGuggenheim Partners EnerVest Operating LLC Tesco CorporationCapStreet Group LLC Eschelon Energy Partners LP Torqued-Up Energy ServicesCadent Energy Partners LLC Houston Energy Advisors LLC Upstream Energy ServicesMadison Williams and Company Vetco (GE) Wellstream International Limited © 2012. Burleson 5 © 2012. Burleson LLP LLP
  • 6. Caveat• The Statements and Opinions set forth herein are those of the author and not those of Burleson LLP or any other entity• This presentation focuses on broad generalizations and is aimed at giving the audience a very high level introduction into recent developments in oil and gas in SSA 6 © 2012. Burleson LLP
  • 7. Road Map• Africa’s role in Global Oil and Gas• SSA Major Players; Mid-tiers oil countries; New Players• East Africa joins the party• Acquisitions• Interesting cases• Challenges• What future holds 7 © 2012. Burleson LLP
  • 8. 8 © 2012. Burleson LLP
  • 9. Africa’s Role in Global Oil & Gas• Africa has roughly 10% of world proven oil reserves• Africa’s proven reserve rose from 53.3 billion barrels (bbl) in 1980 to 127.7 bbl in 2009• Of all new sources of oil, 1/3 are in SSA• Frequent oil discoveries have led to “second scramble for Africa.”• By 2015, 25% of North American Oil will be from SSA 9 © 2012. Burleson LLP
  • 10. Africa’s Role in Global Oil & GasOPEC 2010-2011 Annual Statistical Bulletin 10 © 2012. Burleson LLP
  • 11. Africa’s Role in Global Oil & GasOPEC 2010-2011 Annual Statistical Bulletin 11 © 2012. Burleson LLP
  • 12. Where Does African Oil Go? (2005)• Today, Africa accounts for a quarter of European imports and 20% of U.S. and Chinese imports of oil. Oil & Gas, Atlas on Regional Integration in West Africa: Economy Series, OECD (April 2007) 12 © 2012. Burleson LLP
  • 13. Where Does African Gas Go? (2005)Oil & Gas, Atlas on Regional Integration in West Africa: Economy Series, OECD (April 2007) 13 © 2012. Burleson LLP
  • 14. SSA Major Players: Nigeria• Nigeria has proven oil reserves of 37.2 bbl, as well as 187 trillion cubic feet (tcf) of gas• Current daily oil production is over 2.5 million barrels per day (bpd)• Oil & Gas exports account for more than 95% of export earning and over 80% of federal government budget 14 © 2012. Burleson LLP
  • 15. SSA Major Players: Angola• Angola has proven oil reserves of 9.5 bbl to 13.5 bbl and 25 tcf of gas reserves• In 2011, produced 1.9 million bpd of Export of crude accounted for 50% of GDP and 95% of exports; 72% of government revenues• Second largest source of oil for China providing 790 million barrels after Saudi Arabia (890 million barrels)• 400 million barrels of Angolan crude goes to the U.S. 15 © 2012. Burleson LLP
  • 16. SSA Major Players: Equatorial Guinea• EG has proven gas reserves of 1.1 bbl and 4.4 tcf of gas reserves; 304.4 thousand bpd in 2010• Zafiro field is largest oil producer with about 280,000 bbl/d as of 2008• Second largest producer is Ceiba, which contains roughly 300 million barrels• Marathon and the state national gas company teamed up and build a $1.5 billion LNG plant in 2007• The companies plan to build LNG trains 2 and 3 16 © 2012. Burleson LLP
  • 17. Mid-Tier Players•Congo Republic……………………….305.5 thousand bpd•Gabon………………………………………..246 thousand bpd•Chad…………………………………….130 thousand bpd•Cameroon………………………………….60.4 thousand bpd•Ivory Coast……………………………….40.6 thousand bpd 17 © 2012. Burleson LLP
  • 18. New Kid on the Block: Ghana•Began producing in 2010 and is expected to raise production from 120,000 bpd to 250,000 bpd; 74.3 tbpd in 2011•Joins mid-tier producers like Cameroon and Congo Brazzaville•Main field is the Jubilee discovered by Tullow and is said to contain about 2 bbl; recently Enyenra find in Owo-1 well•Main players are Tullow, Anadarko, and Kosmos. 18 © 2012. Burleson LLP
  • 19. New Players: Niger•Current daily production of 20,000 bbl/d•Niger is landlocked, so it is currently negotiating with Chad and Cameroon to use Cameroon-Chad Pipeline•Chinese National Petroleum Company (CNPC) is major operator•IMF approves $121 million to help oil and resources reform 19 © 2012. Burleson LLP
  • 20. New Players: Liberia & Sierra Leone•African Petroleum and Anadarko made potentially commercial discoveries in Liberia and Sierra Leone•These New Players have to build Oil & Gas sector to avoid resource curse 20 © 2012. Burleson LLP
  • 21. New Players: South vs. North Sudan•South Sudan gained independence July 9, 2011•Roughly 115,000 bpd has to pass through pipeline in North Sudan•North wants South to pay transit fee of $32 per barrel; going international rate is $1 per barrel•Lots of violence in border region; George Clooney arrested in DC to bring issue to limelight 21 © 2012. Burleson LLP
  • 22. New Players: South vs. North Sudan Build pipeline through Ethiopia or Kenya 22 © 2012. Burleson LLP
  • 23. New Frontiers: East meets West Gas Bonanza •According to BP, SSA has 41 tcf of gas reserves at the end of 2010 •ENI SpA and Anadarko announced major gas discoveries offshore Mozambique; circa 22 tcf. of reserves •Total planning to drill offshore and onshore Kenya, Mozambique, and Uganda by end of 2012 23 © 2012. Burleson LLP
  • 24. New Frontiers: East meets West Gas Bonanza •Exxon Mobil and Statoil find an estimated 5 tcf in Mafia Deep basin in Tanzania •Anadarko planning to build LNG plant export terminal in Mozambique worth $1.8 billion •International Oil Companies (IOCs) expected to invest $50 billion in Mozambique alone 24 © 2012. Burleson LLP
  • 25. New Frontiers: East meets West Gas Bonanza•Kenya closer to dishing out exploration licenses; Total focusing on Lamu Basin; about 17 blocks available•Sudan launched bidding for 6 blocks: current production is 115 bpd.•This is where the action is; all major IOCs trying to get a slice 25 © 2012. Burleson LLP
  • 26. New Frontiers: Shale Gas; Oil Sands•Currently focused in South Africa•There is evidence of coaled methane deposits in W. Africa•ENI planned 2012 projects in Republic of Congo is clearest sign of unconventional projects; deal is for $3 billion•Estimated at between 500 million and 2.5 bbl of recoverable oil sands in the DRC 26 © 2012. Burleson LLP
  • 27. Acquisitions Battle for Cove Energy•Shell submitted £1 billion ($1.6 billion) bid for Cove Energy•Thailand’s PTTEP submitted£1.2 billion bid for Cove Energy•India’s Oil and Natural gas Corp. also submitted a £1.25 billion bid 27 © 2012. Burleson LLP
  • 28. Acquisitions•BP possible tie-up with Ophir Energy which has made discovery in Tanzania•Total considering making an offer to buy Wessex Exploration: involved in French Guiana, Mozambique, and Madagascar•Tullow considering making a bid for Bowleven for £1.80 per share 28 © 2012. Burleson LLP
  • 29. Cases•Kiobel v. Royal Dutch Petroleum Co. Issue: Can Corporations be sued under the Alien Tort Statute?•Suit is for$1 billion. U.S. Supreme Court to weigh in soon•Two fresh suits: $767 million for 2009 oil spill in Niger delta•Suit filed in UK for unknown amount on behalf of bodo community 29 © 2012. Burleson LLP
  • 30. Cases•Shell proposed to sell $1 billion of its Ugandan assets•Employees argue the proposed sale is illegal; case heard March 16, 2012 30 © 2012. Burleson LLP
  • 31. Cases•Dr. John Abebe: “Mr. Statoil”•Suing for 1.5% net profit from all Statoil’s Oil and Gas assets 31 © 2012. Burleson LLP
  • 32. Challenges• Fuel Subsidies costing governments a lot of money• Nigeria spending close to $8 billion a year•IMF advising countries to stop subsidies•Recent riots in Nigeria to protest removal of fuel subsidies 32 © 2012. Burleson LLP
  • 33. Challenges•Insecurity: Shell director says Shell losing appetite for Nigerian exploration over attacks on pipeline•Piracy in 2011: 21 attacks on ships off Benin coast; 14 attacks off Nigeria, 7 off Togo, 2 off Ghana, 1 off Ivory Coast•Piracy costing $2 billion a year (Susan Rice, US Ambassador)•Corruption: FCPA and UK Anti-Bribery Act 33 © 2012. Burleson LLP
  • 34. Money vs. Security•Nigeria best place in the world for expats: Some oil managers earn £290,000 ($465,305)•Other hot spots include: Ghana (35% premium) Uganda (30% premium)•These jobs usually require a lot of industry experience 34 © 2012. Burleson LLP
  • 35. What the Future Holds•Africa is likely to be an untapped resource for oil & gas companies•As energy consumption grows, so will global dependence on African oil & gas•African countries are ramping up production to meet these needs 35 © 2012. Burleson LLP
  • 36. What the Future Holds•Political unrest is a problem in the area; threats of nationalization•Major oil & gas discoveries, increased proved reserve amounts for the area•Major producers in Africa are passing laws to incentivize foreign investment in oil & gas 36 © 2012. Burleson LLP
  • 37. What the Future Holds• “Africa is the great frontier for the future.” Dr. Duncan Clarke, chairperson and CEO of Global Pacific & Partners• “Africa could be on the brink of an economic takeoff, much like China was 30 years ago and India was 20 years ago.” The World Bank• “The best time to plant a tree is 20 years ago. The second best time is now.” African Proverb 37 © 2012. Burleson LLP
  • 38. Thank YouQuestions? 38 © 2012. Burleson LLP
  • 39. Houston San Antonio Pittsburgh DenverHouston Pennzoil Place Weston Center Southpointe Center Wells Fargo Center700 Milam, Suite 1100 112 East Pecan 501 Corporate Drive 1700 Lincoln StreetHouston, TX 77002 Suite 700 Suite 105 Suite 3950T: 713.358.1700 San Antonio, TX 78205 Canonsburg, PA 15317 Denver, CO 80203Toll-Free: 866.652.1717 T: 210.820.2600 T: 724.746.6644 T: 303.801.3200F: 713.358.1717 F: 210.820.2626 F: 724.746.6645 F: 303.801.3201 39 © 2012. Burleson LLP