As the Italian energy giant Eni’s Nené Marine field remains a very unique discovery of the decade having taken explorers 20 years of unsuccessful exploration, it leads potential to long-term involvement in Africa’s oil and gas
The discovery is one of the largest discoveries (1.2bn barrels of oil and 42.5 bcm gas) in the world in 2013. As well, it was a significant step in the pre-salt domain for Congo-Brazzaville (TOGY 2014).
“The start-up of the Nené Marine field, achieved eight months after obtaining the production permit, is a great result for Eni and reaffirms our strategy of rapidly exploiting exploration resources thanks to the company’s technical and planning capabilities, and combining exploration, operational and development efficiency,” said Claudio Descalzi, CEO of Eni.
Under exploration and production highlights for the second quarter and half-year 2019 results, Eni has signed agreements to divest to Qatar Petroleum. These include:
· A 13.75 per cent share in the exploration blocks L11A, L11B and L12, in deep offshore Kenya
· A 30 per cent interest in the Tarfaya exploration license, offshore Morocco, which includes 12 exploration blocks. At the closing date, Eni will retain a 45 per cent interest and the operatorship
· A 25.5 per cent interest in Block A5-A, offshore Mozambique, where Eni is retaining the operatorship with a 34 per cent interest
Though Eni, Total SA and Qatar Petroleum have formed a long-term joint venture in East Africa. By extension on the African continent, the policy regime (including tax and law) is set to determine their sustainability.
Kenya, for instance, has to woo Eni and its partners (Total SA and Qatar Petroleum) with an enabling environment including employing tax incentives. E&P facilities must be in place as well to enable the operators to save on costs during and after the exploration stage, which is one of Eni’s strategic exploration and production models.
Failure to provide an enabling and a viable environment, the partners may give priority to Block A5-A in Angoche basin -Mozambique which, as a country, has relatively considerable oil and gas E&P infrastructure as well as a signed FID in LNG that has seen other massive FDI related investments being channelled into the country.
There is nothing host governments dread to experience as block/well relinquishments; at least not on the first or second encounter with dry wells. Block Farm Down is a costly and cumbersome process (particularly in developing countries), especially where relinquishment has often been witnessed.
Other factors that lead to relinquishments include political instability, war, international trade sanctions, bankruptcy and unfavourable operating policies.
“We hope that the exploration efforts are successful and we look forward to collaborating with our valuable partners Eni and Total, and the government of Kenya in these blocks. I would like to take this opportunity to thank the Kenyan authorities and our partners for their ongoing and continued support,” Qatar Petroleum president and CEO Saad Sherida AlKaabi said.
Additionally, Qatar Petroleum aims to maintain the monetary lead and OPEC’s industry recognition in gas exportation to Europe and the rest of the world. In the first half of the year, Qatar was leading by having supplied 10 MT of LPG into EU markets. This continuous and strategic acquisition of international area prospects such as in Kenya, Egypt, Morocco and Mozambique is proof for long-term involvement in Africa.
Eni has picked well its partners and given both share the same oil and gas E&P strategies and models. More discoveries, with the magnitude of Nene Marine in Congo Brazzaville, are underway and this is likely to happen soon in East and Southern African countries such as Kenya and Mozambique.
– By John Chacha Jr, senior oil and energy consultant
