JUBA, South Sudan, March 6, 2017/APO/ --
EPSA contract signed today in Juba for South Sudan acreage.
Oranto Petroleum is the 90% shareholder and operator of large Block B3, plans to invest $500 million for exploration and development.
Government looks to new entrants to boost oil production.
Oranto Petroleum will invest $500 million to develop South Sudan’s Block B3, launching a comprehensive exploration campaign starting immediately. The Ministry of Petroleum and Oranto Petroleum Company, South Sudan signed the exploration and production sharing agreement for the block today in Juba.
The B3 area covers 25,150 square kilometers. Some aeromagnetic and seismic data have been acquired for the area but no wells have been drilled. The block is highly prospective, with productive parts of the Muglad Basin to the northwest and estimated reserves in place of more than 3 billion barrels of oil. The block is categorized as low risk, high reward. Under the EPSA, Oranto will be the technical operator and 90% shareholder of the block, with Nilepet holding a 10% stake.
South Sudan is an established, world-class petroleum producing region, whose territory includes a large part of the Cretaceous rift basin system that has proved petroliferous
“We believe the petroleum resources of Block B3 are vast. To reach our target of more than double current oil production, we need committed new entrants like Oranto,” said Minister of Petroleum Ezekiel Lol Gatkuoth. “The government is working hard to reinvigorate the petroleum industry in South Sudan by creating an enabling environment for International oil and gas companies to invest and operate. It is up to the oil companies to come in, explore and produce.”
“It’s an honor to formalize our entry into South Sudan with this EPSA,” said Prince Arthur Eze, Founder and Chairman of Oranto Petroleum. “Our company is at the vanguard of African firms exploring and developing African assets. This is the beginning of a long-term collaboration with Nilepet, the people of South Sudan and our partners to bring to light the immense potential of Block B3. Oranto is committed to an aggressive exploration work program that will benefit all stakeholders.”
The 120,000-square kilometer Block B was split by the government into the B1, B2 and B3 blocks in 2012. In Block B3 Oranto will work alongside the B1 and B2 partners, which include Total. During the first three-year exploration period Oranto will complete a further airborne geophysical survey; acquire and process 2D seismic; and assess existing data held by the government and former operators. The EPSA contract was facilitated by pan-African law firm Centurion Law Group. South Sudan is an established, world-class petroleum producing region, whose territory includes a large part of the Cretaceous rift basin system that has proved petroliferous in Chad and Niger as well as Sudan.
Atlas Petroleum International and Oranto Petroleum, the sister companies of the Atlas Oranto Group, own and operate 20 oil and gas acreages in 10 African countries: Benin, Côte d’Ivoire, Equatorial Guinea, Ghana, Liberia, Namibia, Nigeria, São Tomé and Príncipe, Senegal and South Sudan. Founded in Nigeria in 1991, the group is Africa’s largest indigenous explorer by acreage. Learn more at http://Atlas-Oranto.com.
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Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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Global liquid fuels
Electricity, coal, renewables, and emissions
2018 was a year that started with crude prices at US$62/b and ended at US$46/b. In between those two points, prices had gently risen up to peak of US$80/b as the oil world worried about the impact of new American sanctions on Iran in September before crashing down in the last two months on a rising tide of American production. What did that mean for the financial health of the industry over the last quarter and last year?
Nothing negative, it appears. With the last of the financial results from supermajors released, the world’s largest oil firms reported strong profits for Q418 and blockbuster profits for the full year 2018. Despite the blip in prices, the efforts of the supermajors – along with the rest of the industry – to keep costs in check after being burnt by the 2015 crash has paid off.
ExxonMobil, for example, may have missed analyst expectations for 4Q18 revenue at US$71.9 billion, but reported a better-than-expected net profit of US$6 billion. The latter was down 28% y-o-y, but the Q417 figure included a one-off benefit related to then-implemented US tax reform. Full year net profit was even better – up 5.7% to US$20.8 billion as upstream production rose to 4.01 mmboe/d – allowing ExxonMobil to come close to reclaiming its title of the world’s most profitable oil company.
But for now, that title is still held by Shell, which managed to eclipse ExxonMobil with full year net profits of US$21.4 billion. That’s the best annual results for the Anglo-Dutch firm since 2014; product of the deep and painful cost-cutting measures implemented after. Shell’s gamble in purchasing the BG Group for US$53 billion – which sparked a spat of asset sales to pare down debt – has paid off, with contributions from LNG trading named as a strong contributor to financial performance. Shell’s upstream output for 2018 came in at 3.78 mmb/d and the company is also looking to follow in the footsteps of ExxonMobil, Chevron and BP in the Permian, where it admits its footprint is currently ‘a bit small’.
Shell’s fellow British firm BP also reported its highest profits since 2014, doubling its net profits for the full year 2018 on a 65% jump in 4Q18 profits. It completes a long recovery for the firm, which has struggled since the Deepwater Horizon disaster in 2010, allowing it to focus on the future – specifically US shale through the recent US$10.5 billion purchase of BHP’s Permian assets. Chevron, too, is focusing on onshore shale, as surging Permian output drove full year net profit up by 60.8% and 4Q18 net profit up by 19.9%. Chevron is also increasingly focusing on vertical integration again – to capture the full value of surging Texas crude by expanding its refining facilities in Texas, just as ExxonMobil is doing in Beaumont. French major Total’s figures may have been less impressive in percentage terms – but that it is coming from a higher 2017 base, when it outperformed its bigger supermajor cousins.
So, despite the year ending with crude prices in the doldrums, 2018 seems to be proof of Big Oil’s ability to better weather price downturns after years of discipline. Some of the control is loosening – major upstream investments have either been sanctioned or planned since 2018 – but there is still enough restraint left over to keep the oil industry in the black when trends turn sour.
Supermajor Net Profits for 4Q18 and 2018
- 4Q18 – Net profit US$6 billion (-28%);
- 2018 – Net profit US$20.8 (+5.7%)
- 4Q18 – Net profit US$5.69 billion (+32.3%);
- 2018 – Net profit US$21.4 billion (+36%)
- 4Q18 – Net profit US$3.73 billion (+19.9%);
- 2018 – Net profit US$14.8 billion (+60.8%)
- 4Q18 – Net profit US$3.48 billion (+65%);
- 2018 - Net profit US$12.7 billion (+105%)
- 4Q18 – Net profit US$3.88 billion (+16%);
- 2018 - Net profit US$13.6 billion (+28%)