Tuesday 30 April 2013

Economy to gain N281billion from indigenous vessel charter operation


Published: 

Ernest Nwpa
 The Nigerian economy would save about N280.8billion (about $1.8billion) from the operations of indigenous vessels contracted to International Oil Companies (IOCs) operating in the country by June 2012, says the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa.
According to Mr. Nwapa, about 40 vessels owned by Nigerians are to replace those contracted by foreign-owned vessels in line with the marine vessels and rig ownership strategies adopted by the Board pursuant to the provisions of the Nigerian Content development law in the oil and gas industry.
The Executive Secretary announced that the IOCs have since given their commitments to replace foreign vessels in their operations in line with the Board’s definition under Category 2 vessels, which include anchor handling tugs (AHT), dynamic positioning platform supply vessels (DP PSV) and line handling tugs (LHT).
Similarly, vessels under Category 1 include crew supply vessels, mooring launch vessels, shallow draft vessels, fast supply/intervention vessels and security vessels.
Already, he said almost all the vessels working under Category 1 in the industry are not only owned by Nigerians, but  are being manufactured locally, while a consortium of investors are finalizing plans to commence the manufacturing of 40 new meter vessels in Nigerdock Snake Island facility from 2013.
“Before the enactment of the Nigerian Content Act, foreign-owned vessels and rig operators dominated the oil and gas sector, resulting in about $3billion capital flight,” Mr. Nwapa said. “Today, the situation is changing. From our calculation, in 2012, we will be retaining over $1.8billion just by ensuring that these vessels are owned by Nigerians. In the past, they were getting spot contracts. But nobody can invest without a long term contract.”
He described the local content policy as a tool that would stimulate industrialization of the country, create productive employment and bring back the jobs to Nigerians, pointing out that by mere establishment of pipe mills, dockyards and other facilities as well as patronizing them, indigenes of oil bearing communities would be integrated into the industry.
Mr. Nwapa explained that the promotion of equipment components manufacturing was top on the priority list of the board, considering the potentials to employ significant population of the people, adding that the Board would always insist that the capacities of Nigerian yards and facilities be exhausted before contracts are taken abroad.
The executive secretary, who maintained that patronizing Nigerian facilities would help attract foreign investors and create practical learning opportunities for students, commended the plan by Nigeria Liquefied and Natural Gas (NLNG) to set up a dry docking facility in-country to service the company’s 24 tankers managed by BGT.
He clarified that efforts to increase Nigeria’s participation in the industry was not intended to drive out foreigners from the economy as the high tech areas are still open for foreign and indigenous players, adding that all IOCs in Nigeria had placed jobs with SCC Pipe Mill in Abuja, while the NNPC is in the process of doing so, to help keep the job of its employees.
“There is need to set up more pipe mills in the country to ensure successful execution of the Gas Master Plan and replacement of old pipes, expected to utilize over 2,500 kilometers of pipes in the next five years,” he said. “Apart from the proposal by a company to build a mill in Calabar and the Yulong Pipe Mill to be sited in Yenagoa, there is also a need to site a mill in the northern part of the country for use in the Gas Master Plan project.”

Thursday 21 February 2013

Jonathan Will Run For President in 2015, Says PDP



Any lingering cobwebs as to whether President Goodluck Jonathan will seek to keep his job in 2015 were dispelled today when the National Women’s Leader of the Peoples Democratic Party (PDP), Chief Kema Chikwe, asserted the President will return to office.
Chikwe, a former Minister, is a member of the National Working Committee (NWC) of the party, which has 12 members.
She was speaking in Abuja at the presentation of the “PDP Women-In-Power 2013 Calendar” in the presence of the First Lady, Patience Jonathan, who was seen nodding in agreement with Chikwe’s statement.
“We need to start moving fast to prepare women for future elections,” Chikwe said. “Until we elect 35 per cent or more of women in the legislature, the impact of our progress will not be complete.
She said that the next “dispensation,” will possibly attract PDP female governors and more deputy governors, but was far more eloquent on the nation’s top political position.
“We are even more confident that when President Goodluck Jonathan returns in 2015, women would be talking about 50 per cent and not 35 per cent,” she said. “As we give him unequivocal, undiluted, unresolved and unlimited support and as we march with him to 2015, PDP women will reach the promised land.”
In a speech dripping with sycophancy, she asked Mrs. Jonathan and the Secretary to the Government of the Federation, Mr. Anyim Pius Anyim, who represented the President at the occasion, “to convey our deep gratitude to the Father of the Day,” President Jonathan.
“Tell him that PDP women are chanting to Nigeria: ‘All we are saying, give us Goodluck.’”
Mrs. Jonathan took the opportunity to appeal to the Senate to pass the controversial N4bn budget proposal of the Minister of the Federal Capital Territory, Sen. Bala Mohammed, for the building of the controversial Africa First Ladies Mission building in Abuja. Protesting Nigerians have argued that the funds will be looted, rather than used for such a project, and that they would in any event prefer that such funds were deployed into education, health or infrastructure.
Mrs. Chikwe’s declaration concerning Jonathan’s 2015 political ambitions is in direct contradiction to what Mr. Jonathan himself said just 24 hours ago.
Speaking through a Special Senior Assistant, Mr. Doyin Okupe, the president said, “From time immemorial, for every major event or contest in the world, there is always a time and a season apportioned.
“We wish to state categorically that this is neither the time nor the season to begin electioneering campaign or related discourse for the 2015 presidential elections and so President Goodluck Jonathan will not jump the gun.”
He added that Mr. Jonathan would therefore “stoutly resist any disguised or open attempt to drag him into any debates, arguments or political discussions relating to a presidential election in 2015.”
A political observer who heard Chikwe’s statement today told SaharaReporters that the PDP reality is a case of the-more-you-look-the-less-you-see.
“Unless the PDP rigs the 2015 election, there is no way that Jonathan—on the basis of his performance so far–can win the presidential election,” he said.
“So anyone singing ‘Give Us Goodluck,’ if indeed anyone has thought of such a song, is someone that is really campaigning for the opposition, who should be applauding Mrs. Chikwe and the PDP chaos at this point.”

Saturday 16 February 2013

China Replaces United States as Nigeria’s Crude Oil Importer



14 Aug 2012
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Mr. Andrew Yakubu, GMD, NNPC
Ejiofor Alike
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr. Andrew Yakubu, has said China had become the alternative market for Nigeria’s crude oil, following dwindling imports by the United States, which was the major buyer of Nigeria’s crude oil.
Speaking at the sidelines of a recent oil and gas conference in Lagos, Yakubu stated that China was a very good market for any shortfall in the United States’ imports.
“The decision of the United States is not driven by the fact that they don’t want to buy our oil; they have other issues. The Shale gas has been discovered and it is a major source of energy. But of course, the good news is that there are other parts of the world that are interested. As you know, major demand growth is going to come from China and the east. So, that is a very good replacement of whatever shortfall we have with the United States,” he said.
Nigeria’s crude oil export to the United States, which was over one million barrels per day (bpd) in December 2009, had declined to 352,000bpd, representing a loss of about 70 per cent of the United States’ market.
Statistics indicate that Nigeria was the third-largest supplier of crude oil to the United States in 2010, with the US accounting for 43per cent of Nigeria’s exports.
in September 2011, Nigeria’s crude export to the United States dropped to 580, 000bpd, with the country assuming the sixth position, after Canada, Saudi Arabia, Mexico, Venezuela and Russia.
Nigeria’s crude export to the United States further dwindled to 352,000bpd as at February 2012.
Though refiners in Asia are said to be increasing crude oil imports, it is more difficult to ship crude oil from Nigeria to Asian countries than to the United States because of the long distances.
For instance, the distance from the Shell’s Bonny Export terminal in Rivers State, to Tianjin, China, is 12,172 miles, compared with 5,847 miles to New York Harbour in the United States.
With these long distances, Asian refiners are said to be demanding for discount to buy Nigeria’s crude.
Refiners that use Nigeria crude oil are also closing plants on the United States East Coast, the main destination for Nigerian exports, amid falling returns on investment.
Recent reports indicate that Sunoco stopped production at the 194,000-barrel per day Marcus Hook plant in Pennsylvania on December 2011.
ConocoPhillips stopped its 190,000-barrel per day Trainer, plant site on September 30, 2011 and the two facilities together accounted for half of East Coast crude oil processing capacity.
In recent years, China has demonstrated increasing appetite for Nigeria’s oil and gas resources.
Chinese National Offshore Oil Corporation (CNOOC), one of China's largest state-run oil and gas producers, had agreed to buy a 45per cent stake in the license covering the Oil Mining Lease (OML) 130 field, which is owned by South Atlantic Petroleum.
CNOOC has been scouting for overseas oil and gas assets to supply China’s growing domestic market,  as the country’s appetite for oil and gas is said to be second only to that of the United States.

Saturday 9 February 2013

NNPC commends Century Group on seamless operation of Mystrax FPSO



AN indigenous operator, Century Group received accolades from the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mr Austin Oniwon, on the seamless operations of the Mystrax FPSO owned by the Nigerian Petroleum Development Company (NPDC) situated at Okono Okpoho Field in Oil Mining Lease (OML) 119 offshore Nigeria.
“It has been a successful operation and a testament to the strength of what indigenous companies can do when given a chance,” he said.
Oniwon gave this commendation while declaring open the recently concluded Nigerian Oil and Gas conference in Abuja. The Business Development coordinator, Mr Kunle Ajayi, thanked Oniwon for giving Century Group the privilege after emerging the winner in an intensely competitive bid. Century Group, through its subsidiary, Century Energy Services Limited (CESL) O&M, emerged as the preferred contractor to provide O&M services for the companies.
The company has 99 per cent operational up-time and over 80 per cent machinery availability. The Mystrax is the third Floating, Production, Storage and Offloading (FPSO) to join the CESL O&M fleet. The company also provides O&M services for the Armada Perkasa and Armada Perdana FPSOs which service the Okoro Setu Field on OML 112 and OML 120/121 fields respectively.
Century Group is committed to creating 500,000 jobs within a decade. The company has grown to be the largest manager and operator of four FPSO vessels with over 15 Offshore Support Vessels (OSVs) in Nigeria and Sub-sahara Africa. The company has the financial competence, technical competence and international partnerships required to achieve rapid growth and to deliver on its vision of creating opportunities, solving problems and empowering people.

Monday 4 February 2013

The Coming Global Energy Order


Sam Nda-Isaiah's picture

There’s bad news. In less than seven years from now, the United States would have overtaken Saudi Arabia and Russia to become the world’s largest producer of oil and gas. And, 10 years hence, it could become completely oil independent. The implications for Nigeria are stark: The United States, which currently imports 42 per cent of its total oil needs, 9 per cent of it from Nigeria – which translates to a little less than half of Nigeria’s total oil export – would no longer have the need to do so. And if anyone thinks this should not be troubling because we can simply shift our oil supplies to other big consumers like China and Europe, then, that person is mistaken.
The reason why the United States would become oil and gas independent is because they have perfected the technology of hydraulic fracking, which can get oil and gas out of shale rock. The shale rocks have always had lots and lots of trapped oil and gas but getting them out had proved more expensive than simply importing them. But, today, with improved technology, hydraulic fracking and horizontal drilling have been combined to extract the trapped oil and gas at a much cheaper rate. And it will get even cheaper in the coming months as efforts are being intensified to make it so.
Unfortunately for oil-producing countries like Nigeria, these shale rocks also litter the landscapes of China, Germany, the United Kingdom, Mexico, Colombia, Indonesia, etc. The reserve in shale oil in China surpasses that of North America by 50 per cent; in fact, studies have shown that recoverable reserves of shale gas are present in almost all countries of the world. In other words, oil and gas may soon become as common as water.
For a country like Nigeria that depends on oil for 95 per cent of its foreign exchange needs and 65 per cent of its budget, this should be seen as a life and death matter. It should call for a proactive leadership on the part of our government.
Unfortunately, as in every other issue of statecraft, our leaders simply do not give a damn. The technology that would give the US this oil independence status – hydraulic fracking and horizontal drilling – will also be available to other large consumers like China, Germany and the United Kingdom.
President Barack Obama, who made oil independence a major plank of his 2008 presidential bid, appears to be succeeding. Between 2008 and 2011, the US crude oil production jumped by 14 per cent; natural gas was up by 10 per cent in the corresponding period. In 2012, the US domestic production went up a further 7 per cent, the largest jump since 1951. During Obama’s re-election campaign last year, he informed the American people that he had already cut oil imports by one million barrels daily. This is already showing in our crude oil transactions with them. The United States is the biggest importer of our crude oil and, already, this new trend is showing. American oil imports from Nigeria slumped in 2012 from 810,000 barrels per day to 361,000 barrels per day. But the reality is yet to dawn on our leaders. In 2013, this import will drop by a further 50 per cent and, by 2015, it may be 0 per cent import of Nigeria’s oil to the US.
But the good news is that Nigeria’s real wealth is in its human capital, huge arable land resources (which can turn Nigeria, as they did Brazil, into an agricultural superpower) and its huge untapped solid mineral reserves, which is found in all states. But converting this potential to real wealth is squarely a function of leadership, the quality of which we do not have at the moment.
Nigeria currently earns about $100 billion annually from oil but this is frittered away by our food import bill of about $20 billion, petroleum products import bill of about $29 billion and several other scandalous imports. This $20 billion annual food import is money that should be going to Nigerian farmers for food production, creating jobs and wealth if we were a more sensible nation. If our farmers got this $20 billion (N3.2 trillion) we send overseas annually to import milk, tomato paste, rice, wheat, salt, sugar, cookies, biscuits, cheese, jam, butter, etc, agriculture would change Nigeria forever.
We can produce all these food items in good quality in Nigeria if we were serious about it as a nation. And if we expended the current $29 billion (N4.6 trillion) we spend annually on importation of petroleum products into Nigeria in constructing several small to medium-size modular refineries, the type that are now commonplace all over the world, Nigeria would, by now, have become a net exporter of petroleum products like every other major oil producer in the world with which we started together. These are not fantasies. They already work in other countries with better leadership than ours.
Every other oil-producing country has envisaged the emerging global energy order and has been frantically diversifying its economy as a result. Brazil, the home of Petrobras, one of the world’s largest multinational oil companies, is also a major oil producer. It currently produces about 2.3 million barrels daily but it has diversified aggressively into agriculture. Every year, Brazil earns a cool $300 billion from agriculture. Nigeria, which produces slightly more oil than Brazil daily, now earns about $100 billion from oil annually and virtually nothing from agriculture.
Well, the hard truth is that by 2015 when the United States would have stopped importing oil from Nigeria altogether, 14 other African countries would have joined the ranks of oil producers to complicate the glut. If our leaders do not start giving a damn immediately, many governors may soon not be able to run their government houses. I know this flagrant fact may still not move our leaders to action.

Sunday 3 February 2013

Briton with Dodgy Past Acquires Nigeria’s Prolific Oil Blocks



11 Jan 2013
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 Minister of Petroleum, Dizeani Allison Madueke
Chika Amanze-Nwachuku and Ejiofor Alike with agency report
On November 9, 2012, Heritage announced the successful completion of the acquisition of a 45 per cent interest in Oil Mining Lease (OML) 30, with effect from November 1, 2012.
In August last year, the company announced its intention to sell part of a gas block and borrow money from Genel Energy Plc to raise $450 million, easing concerns about how it will fund oil field purchases in Nigeria.
The cash, the company said, would partly fund Heritage Oil's acquisition of a stake in Nigeria's OML 30 oil assets announced last month.
Heritage’s entry into the Nigerian oil and gas sector, according to a report in the London-based Financial Times (FT), is an unlikely alliance: a polo-loving local businessman and an oil company founded by a former supplier of mercenaries, with ties to coup plotters trying to overthrow African governments.
But it could provide the prototype for a new wave of companies hoping to take on the majors that have long dominated the Nigerian oil industry.
At least that is what investors in Heritage Oil are being asked to believe following a sale of assets in the Kurdistan region of northern Iraq to help finance a push into Nigeria’s troubled energy sector.
Heritage’s ambitions to transform itself into a significant producer in Nigeria, alongside local partner Shoreline Power, is based on its $850 million purchase of a cache of oil blocks in the conflict-scarred Niger Delta from Royal Dutch Shell, Total of France and Eni of Italy, which was completed in November.
The deal brings together Tony Buckingham, the founder, chief executive and leading shareholder of Heritage with Nigerian businessman Kola Karim.
Karim’s Shoreline Energy International conglomerate is partnering the FTSE 250 company to create an indigenous Nigerian company seeking to reverse the fortunes of Shell’s neglected OML 30.
Buckingham’s colourful history, which ranges from helping to supply mercenaries to fight insurgents as well his links to coup plotters trying to overthrow the government of oil-rich Equatorial Guinea, to creating fortunes for himself and investors through a range of oil and mining deals, is well known to London-based investors.
Less well known is western-educated Karim. His business interests have extended to co-ventures with companies such as Costain, the UK support services group, and Schlumberger, the US-based oil services company. Beyond his ambitions to build an indigenous group capable of becoming a significant upstream oil operator in Africa’s biggest energy industry, Karim is also patron of the Lagos Polo Club.
His group’s interests span construction, power generation, engineering and telecoms across sub-Saharan Africa. Shoreline is, however, less experienced in managing oil operations than some of the other Nigerian groups seeking to establish themselves as the government encourages indigenous participation in the industry.
Paul Atherton, chief financial officer at Heritage, said the new venture was expected to raise production from OML 30, located in the western delta near Warri, Delta State, from a current level of 35,000 barrels a day to 55,000 b/d in the short term by improving extraction techniques, FT reported.
But further investment could see the block, which will formally be operated by the state-controlled, crisis-prone Nigerian National Petroleum Corporation (NNPC), increase production to 150,000 b/d within three to four years, according to Atherton.
Previous attempts to reinvigorate production at OML 30, one of Nigeria’s most prolific blocks, have faltered. Production, which began in 1963, has declined sharply from a peak rate of 280,000 barrels attained in 1973.
Shell, which has long been Nigeria’s foremost foreign investor, is reorganising its interests in the country. The company has yielded handsome revenues there for decades, but it has also been implicated in environmental corruption scandals and became embroiled in the banditry that stalks the delta.
Shell sold stakes in three licences in the Niger Delta in 2010 to Seplat, which has since improved output at the fields. Shell went on to sell stakes in other licences to First Hydrocarbon Nigeria, an affiliate of London-listed Afren, and Neconde Energy, a local consortium.
Atherton argued that the security situation in the area is now stable, following an amnesty, which the government said brought more than 20,000 armed men from their bases in the Niger Delta’s creeks.
Production from OML 30 between 2006 and 2009 was severely hit by a combination of funding and security issues. Heritage said it would prevent interruptions in production by improving relations with the community and giving it a share of profits in exchange for helping to reduce vandalism.
International oil companies “have so many licences, they don’t have the capital and manpower to focus on all of their licences”, said Atherton.
With oil theft still rife in the Niger Delta and a contentious overhaul of industry legislation in the offing, some western groups are gradually selling down their Nigerian interests – particularly vulnerable onshore fields – to local operators, who in turn are forming alliances with less familiar western players or Asian groups.
Three weeks ago ConocoPhillips, the US oil group, announced it was selling its Nigerian businesses for a total of $1.79 billion to Lagos-based, Toronto-quoted Oando, one of the most ambitious local integrated energy groups. Oando will take on onshore and offshore interests delivering 43,000 barrels of oil a day.
But the challenge facing the new wave of indigenous companies, some backed by western groups, is to prove that they can turn round the long-term decline in output in Nigeria, one of the world’s largest oil producers.
Investors in Heritage will be hoping the polo-loving Karim and the swashbuckling Buckingham can succeed where others have failed.

Despite troubles, Africa beckons as oil frontier



The Layton Corp. expects to invest $1 billion in sub-Saharan Africa over the next few years.
“It’s really one of the last frontiers,” said Daniel Layton, whose energy investment firm is making its first move into Africa.
The attraction hasn’t changed since Anadarko Petroleum entered the continent 25 years ago: Energy companies follow oil and gas.
“In a resource- constrained world, finding large fields becomes more challenging,” said Anadarko spokesman John Christiansen. “We see a lot of opportunities (in Africa).”
But in a region with a history of corruption, violence and political conflict, balancing risk and reward requires research, money and patience.
“Turmoil with insurrection, terrorism, piracy – those things all have to be taken into account before companies go to work in Africa or any place overseas,” said Kerry Williams, an attorney with Chamberlain Hrdlicka who works with American companies operating in West Africa.
Some countries are safer than others; all say they want to curb corruption and violence.
“It’s still pretty risky,” Williams said. “As the countries start to develop oil wealth, it becomes imperative for the country to protect that wealth and the people developing that wealth, but it also … increases the turmoil and the acts that people will take to get a piece of the wealth.”
Pitfalls include the Foreign Corrupt Practices Act, which prohibits payments by U.S. business executives to foreign officials to secure contracts; rules requiring payment in local currency rather than dollars; unexpected tax implications; and rules on exporting equipment out of the United States, he said.
New competition
It’s hard to generalize about Africa because each country is different, said Bill Arnold, a professor of energy management at Rice University’s Jones Graduate School of Business. He formerly worked at Royal Dutch Shell as director of international government relations and senior counsel for the Middle East, Latin America and North Africa.
But Arnold said common themes include emerging competition from China and ongoing problems with corruption and security, including theft from pipelines in nations where oil production is long-established, especially Nigeria.
Terence McCulley, the U.S. ambassador to Nigeria, said during a recent trip to Houston that Nigeria’s newly elected government has promised to tackle corruption. But he said it remains a serious problem, as does violence in northern Nigeria and the Niger Delta.
“The oil curse meant that from the ’90s, Nigeria became a rogue economy,” McCulley said. “The revenue from oil – that was all people were interested in.”
The country has begun trying to diversify its economy and make it easier for citizens to see how oil money is spent, the ambassador said, but a 2011 effort to establish an independent regulatory agency to oversee the national oil company failed.
‘Rich become richer’
After decades as West Africa’s primary oil-producing nation, Nigeria suddenly has competition.
Ghana, Ivory Coast, Equatorial Guinea, Gabon, Sierra Leone and Angola are among the countries where companies are exploring or have reported discoveries of oil and natural gas. Huge deposits of natural gas have been discovered offshore in Mozambique, on the continent’s east coast.
“We are hopeful we can change things for the better,” said Mohammed Amin Adam, executive director of the Africa Centre for Energy Policy in Ghana.
Adam, in Houston recently to speak at the University of Houston Law Center, acknowledged that Africa long has been plagued by corruption, with billions of dollars in oil wealth siphoned from the continent while millions of people still live in poverty.
“The rich become richer and richer and richer,” Adam said.
Exploration companies generally contract with a national oil company, usually with additional partners.
“If you talk to the ordinary African on the street, they will tell you the governments are selling the oil for nothing,” Adam said. “They don’t believe the government is making the best deals.”
He testified before the U.S. Congress in favor of a provision in the Dodd-Frank financial regulation overhaul that requires publicly traded companies to disclose what they pay to harvest crude oil, natural gas and minerals in other countries.
A coalition of oil industry trade groups has sued in federal court to block Securities and Exchange Commission rules requiring companies to report payments exceeding $100,000, broken down by project.
Adam agreed that the rules could put U.S. companies at a disadvantage and might even diminish U.S. investment in Africa.
“We would not get the Western investment, the Western technology, which we need,” he said.
But in the long run, Adam said, the disclosures would help Africa. Some non-U.S. companies, including Canada’s Talisman Energy and Norway’s Statoil, already make similar disclosures, he noted.
Chinese investments
The major oil companies have been in Africa for decades, occasionally pulling back when violence in Libya, Nigeria or elsewhere became too dangerous, and independents have been there for almost as long.
The latest competition is coming from China.
Adam said Chinese investment in Africa totaled $150 billion in 2010, up from $5 billion in 1995.
Some African leaders prefer Chinese investors because they avoid lectures about human rights and other issues raised by American and European investors, he said.
But he said Western companies continue to have an advantage with technology and better adherence to environmental standards.
Robert Gerry, the CEO of Vaalco Energy, a Houston-based independent company operating in West Africa, agreed that Western technology dominates in Africa and elsewhere, despite the competition from China.
“There’s not a country I’m aware of that doesn’t look to the Western countries for their science,” Gerry said.
Vaalco signed its first contract in Gabon in 1995. It also operates in Angola and participates in an offshore project in Equatorial Guinea.
Working in Africa requires patience and risk analysis, Gerry said, but the potential rewards loom large.
“There’s been activity for many years in Africa, but it’s really the last (of the) remaining large potential basins in the world,” he said.
Operating costs are high, partly because of security needs.
Vaalco’s chief financial officer, Gregory Hullinger, said working in Africa also requires a larger inventory because it can be difficult to replace equipment.
“It’s frustrating for Westerners who can pick up the phone and get something done the day after tomorrow,” Gerry said. “It takes a long time over there. But eventually, if you’re persistent, you’ll accomplish something.”
Excitement contagious
Many African countries export crude oil and then import gasoline, heating oil and other refined petroleum products.
That’s what attracted the Layton Corp., which will invest in midstream and downstream projects, including a refinery project in West Africa.
Despite the risks, CEO Daniel Layton said the excitement is contagious.
“Your goal, for a company like ours, is to get in early on the infrastructure part of the play,” he said. “Think about being in Texas 70 or 80 years ago. The technology is more advanced, but it’s that same level of excitement.”
Parallels to Gulf
Anadarko, one of the largest independent exploration companies, operates around the world and holds interests in 40 million acres in a dozen African countries.
It was one of the first U.S. companies to enter Mozambique, in 2006, drawn by the region’s geologic resemblance to the deep-water Gulf of Mexico, said Christian­sen, the Anadarko spokesman.
The company and its partners have since reported major natural gas discoveries.
Anadarko also is involved in building a liquefied natural gas development onshore, with plans to begin exporting in 2018.
“We see countries that are achieving greater stability,” Christiansen said. “Mozambique is one of them. Ghana is another. There are lessons to be learned from what has not been done correctly historically, so there is the opportunity to learn but also to create a better future.”