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

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
eangyiembe@burlesonllp.com
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 Industry
Our 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
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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.
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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)
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5. Representative Clients
OILFIELD & INDUSTRIAL SERVICES
EXPLORATION & PRODUCTION COMPANIES / MIDSTREAM
BG US Production Company El Paso E&P Company ACTHERM Holdings, a.s.
Cabot Oil & Gas Corporation GeoResources, Inc. Air Liquide
Carrizo Oil & Gas, Inc. Penn Virginia Oil & Gas Corp. Artificial Lift Company
Challenger 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 Services
Common Resources II Southwestern Energy Company Digital Relay Geologix
ConocoPhillips Talisman Energy USA Inc. DXP f/k/a Southern Engine & Pump Company
Constellation Energy Partners LLC Tradition Resources LLC Eagle Rock Energy
D.H. Arrington Oil & Gas XTO Energy Express Energy Services
Devon Energy Production Co. LP Frac Tech Services LLC
East Resources, Inc. (Shell) GHX Industrial LLC
Gulf Offshore Logistics
ENERGY LENDING Keystone Engineering
Petrochem Carless
Bank of America, N.A. LaSalle Bank National Association (BOA) Particle Drilling Technologies
Capitol 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 Engineering
Guggenheim Partners EnerVest Operating LLC Tesco Corporation
CapStreet Group LLC Eschelon Energy Partners LP Torqued-Up Energy Services
Cadent Energy Partners LLC Houston Energy Advisors LLC Upstream Energy Services
Madison 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 & Gas
OPEC 2010-2011 Annual Statistical Bulletin
10 © 2012. Burleson LLP

11. Africa’s Role in Global Oil & Gas
OPEC 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 You
Questions?
38 © 2012. Burleson LLP

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