Nigeria's Seven 'Scouting Niger Acreage'
UK-listed explorer Savannah Petroleum said July 13 that it is talks to sell its West Africa assets to Nigerian producer Seven Energy, having entered into a binding exclusivity agreement in relation to the potential sale of its oil and gas assets in the region.
Seven Energy describes itself as a "leading Nigerian integrated gas company" and is among the country's largest privately-owned upstream firms.
Savannah, according to its website, has two such main assets: the R1/R2 and R3/R4 PSC areas of the Agadem rift basin in landlocked southeast Niger, the country to the north of Nigeria.
The blocks cover 13,655km2, or half the ”original” Agadem permit mandatorily relinquished by Chinese state CNPC in mid-2013. Savannah says that CNPC made 93 finds in 2008-14 on that original permit from 124 exploration wells (75% success rate), unlocking a 2P reserve base of 975mn barrels.
Nigeria state NNPC in the past has worked with US oil services giant Schlumberger to evaluate the exploration of such petroleum basins to the north of Nigeria. But even if found, such resources are costly to monetise, owing to their remoteness from world markets and lack of pipelines. Terror group Isis has also been active in Niger, Chad and northern Nigeria.
The focus of the NNPC-Schlumberger relationship though switched last month, when Schlumberger said it would invest up to $700mn in a phased development of Niger Delta oilfields, offshore southern Nigeria, alongside NNPC and local privately-owned First Petroleum.
Update as of September 1: Savannah Petroleum said Sept.1 that discussions around the proposed transaction with Seven Energy are continuing, and that Savannah shares remain suspended from trading on London's AIM and will remain so until either the publication of an admission document setting out terms of any transaction or until confirmation is given that these discussions have ceased. It added that all equipment and a security team are at a base camp in Niger, ready for its three well drilling campaign in the Agadem basin, and that it will "commence drilling its Bushiya exploration well once the company's shares are readmitted to trading."
Mark Smedley