Big oil-producing countries have faced a double-hit in recent months: the sudden drop in prices of oil and the economic impact of the global pandemic. In the case of Angola, which entered both crises with an already weakened economy, how are its prospects looking? The Africa Report speaks to Sergio Pugliese, the Executive President for the African Energy Chamber (AEC), to find out.
Company Profile: Afren
An African energy minnow is slowly building up regional assets
and expertise with the acquisition of an Ivorian producer, and has
ambitions in liquefied natural gas
Afren’s announcement that it has applied to list on the London Stock Exchange from 1 May after several successful years of trading on the Alternative Investment Market, marks another step in the Nigerian company’s expanding international outreach. The independent oil company was first established with the close involvement of Nigeria’s current oil minister Rilwanu Lukman, and it is increasingly influential in his home country, where it has shown progress in developing its Ebok and Okoro fields.
Afren’s net prospective resources, currently estimated at 440m barrels of oil, also encompass five other oil-rich countries in the Gulf of Guinea – Congo-Brazzaville, Côte d’Ivoire, Gabon, Ghana and São Tomé. One of the main sources of this expansion was Afren’s 2008 purchase of key African assets from Devon Energy, a US company that was selling off its African properties.
The jewel in the crown of the expansion was Devon’s business in Côte d’Ivoire, for which Afren paid $184m in September 2008. Although the price now seems very high, the transaction gave the company access to immediate oil and gas production equivalent to 20,000 barrels a day.
Afren’s CEO, Osman Shahenshah, said at the time: “Through a single action, and through our partnership with the national oil company of Côte d’Ivoire, Petroci, we have acquired a fully-functioning business in Côte d’Ivoire, with the combination of production, near-term development, appraisal and exploration upside, as well as midstream interests and a full workforce, which we will not look to further expand.” Last year, Afren also struck up a strategic partnership with Japan’s Sojitz Corporation, which envisaged up to $500m in financial support to fund joint acquisitions in Africa.
The company now plans to move into liquefied natural gas exports, via agreements in place with players including E.ON Ruhrgas and LNG shipper Teekay Corporation. The idea is to tap gas that is otherwise ‘stranded’ in Nigeria’s onshore Anambra basin. The company also has a memorandum of understanding with Electricité de France to examine “a gas aggregation joint venture across certain identified West African countries”, according to Shahenshah.
Afren has opted not to complete the acquisition of a working interest in all the Devon assets it was initially interested in, but remains “open-minded to anything in Africa”, says Shahenshah.