Savannah Petroleum, Niger Republic seal pact for West African operation
After acquiring some oil fields asset in Nigeria, United Kingdom-based oil and gas company, Savannah Petroleum, has signed a Memorandum of Understanding (MoU) with Niger Republic with the aim of expanding its operations in West Africa.
The MoU affirms both parties’ commitment to the realisation of a proposed Early Production Scheme (EPS) utilising crude oil resources associated with Savannah’s recent discoveries in the R3 portion of the R3/R4 production sharing contract area in the Agadem Rift Basin of South East Niger.
The MoU signing seems like a step in the right direction for the west Africa focused oil firm, who has been aiming to expand its operations in West Africa as its Nigeria assets produces around 20,000 barrels of oil equivalent mainly gas per day (boe/d) after it bought Seven Energy’s onshore fields last year, including proven and probable reserves of 92 million boe, a 200 million standard cubic feet per day gas plant and 260 km (160 miles) of pipelines.
Andrew Knott, CEO of Savannah Petroleum, said the signature of the MoU provides a clear pathway in relation to the company’s first objective and is a major milestone to its second objective.
“Our Niger project team is highly focused around the delivery of near – term production and cash flows from existing and future discoveries in the R3 area and also further material reserve through our on-going exploration and appraisal drilling program,” Knott, ceo of Savannah Petroleum.
Knott said the board believes that “vast majority” of the prospects had similar risk profiles to the ones the firm had already successfully drilled, and therefore it “looked forward with confidence” to the results of the wells still to come in the campaign.
The MoU affirms both parties’ commitment to the realisation of a proposed Early Production Scheme (EPS) utilizing crude oil resources associated with Savannah’s recent discoveries in the R3 portion of the R3/R4 production-sharing contract area in the Agadem Rift Basin (ARB) of South East Niger.
The MOU further binds both parties to work together towards the realization of the EPS and contains specific provisions relating to the actions each party undertakes to conduct as well as setting out the key timelines associated with the project.
The EPS is intended to be domestic focused, with oil produced from Savannah Niger’s R3 area discoveries expected to be sold at the Société de Raffinage de Zinder (SORAZ) refinery, which is connected to the ARB via the third party owned 463 km (287 miles) Agadem-Zinder crude oil transportation pipeline.
As part of the MOU, the Republic of Niger has confirmed its intention to facilitate the conclusion of a crude oil marketing agreement between Savannah Niger and SORAZ; facilitate the conclusion of an infrastructure access agreement between Savannah Niger and the owner of third party crude oil processing and transportation infrastructure—subject to confirmation of the compatibility of the proposed crude oil Savannah Niger intends to include in the EPS and those crude oils currently being processed and transported though this infrastructure.
While Savannah has undertaken to submit a pre-feasibility study to the Republic of Niger within 90 days of the signature of the MOU in relation to the discovered crude oil resources in the R3 area anticipated to be included in the EPS; submit an application to the Republic of Niger for the issuance of an exclusive exploitation authorisation within 90 days finalisation of commercial documentations between Savannah Niger, SORAZ and the third-party infrastructure owner.
Savannah intends to announce further details in relation to the EPS and the company’s planned well testing campaign in due cours