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Earth Finds

Vivo Energy, Engen Agree On Pending $203.9m Takeover

Vivo Energy Tuesday announced it had reached an agreement with Engen Holdings (Pty) for a possible takeover.  The agreement paves way to restructure the acquisition of Engen International Holdings (Mauritius) Limited (“EIHL”) by Vivo Energy’s subsidiary, Vivo Energy Investments B.V.

The restructured transaction is now unconditional, aside from customary closing conditions including material adverse change clauses. All required regulatory and competition authorities’ approvals have been received for the transfer of Engen’s international operations in nine Sub Saharan countries.

The restructure allows for completion of the transaction, first announced on 4 December 2017, to proceed in respect of all countries other than the Democratic Republic of Congo.  Completion has been scheduled for 1 March 2019.

The restructured transaction will add operations in eight new countries and over 225 Engen-branded service stations to Vivo Energy’s network, taking its total presence to over 2,000 service stations, across 23 African markets.

The new markets for Vivo Energy are Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe. Engen’s Kenya operations (where Vivo Energy already operates) is the ninth country included in the transaction.

As per the agreement on 4 December 2017 and as a result of the restructure of the transaction, consideration in respect of the transfer of EIHL is US$203.9 million, comprising an issue by Vivo Energy of 63.2 million new shares valued at Vivo Energy’s IPO Offer Price of 165 pence per share and US$62.1 million in cash, resulting in EHL holding a circa 5.0% shareholding in Vivo Energy.

The cash element of the consideration will be funded by a draw down on Vivo Energy’s multi-currency facility, established in May 2018.

At this stage Engen continues its discussions with the Government of the Democratic Republic of Congo regarding the transfer of the subsidiary holding Engen’s DRC-related interests.  Vivo Energy continues to evaluate the potential acquisition and negotiations with Engen are ongoing.

For the year ended 31 December 2017, unaudited management adjusted EBITDA for the nine entities that will transfer on 1 March 2019 was approximately US$33 million, of which US$26 million is attributable, with attributable net cash on hand of approximately US$48 million.  

Vivo Energy’s belief in the potential of the businesses being transferred on 1 March 2019, and the objective to achieve double digit volume and EBITDA growth rates over the medium term, set out as part of the IPO prospectus, remains unchanged.  

Vivo Energy will provide updated guidance for the nine Engen countries to the market, reflecting the changes to the transaction, with the 2018 full year results announcement in March 2019, following completion of the transaction.

Engen Holdings (Pty) Limited retains its interest in Engen Petroleum Limited (its South Africa business and refinery) and Engen’s businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of the transaction.

Mozambique Stakeholders To Meet At Maputo Gas Summit

With LNG market dynamics set to change from fears of oversupply to buoyant demand coming from China and rest of Asia, investors have confidently been backing more LNG projects in countries which are emerging as new gas players – among them Mozambique.

The country has seen the only LNG FID reached in 2017 from the ENI's Coral floating LNG facility off the coast of Mozambique with shareholder ExxonMobil. Separately, Anadarko - Mozambique LNG onshore facility is not far behind with their FID expected for the first half of 2019.

The CWC Group in partnership with ENH, Mozambique's national hydrocarbons agency, have been driving forwards the gas and LNG industry by hosting the official gas and LNG summit in the country.

Now in its 5th edition, the Mozambique Gas Summit & Exhibition with the support of MIREME and INP will take place in Maputo, Mozambique, from 31 October – 2 November 2018. This edition aims to highlight the bright prospects and promote successful collaborations between international and local companies.

Presenting to the attendees, first hand, will be the very parties involved in the creation of the gas projects like H.E. Ernesto Max Tonela, Minister of Mineral Resources & Energy, Republic of Mozambique, H.E. Júlio Parruque, Governor of Province Cabo Delgado, Republic of Mozambique, Steve Wilson, Vice President & Country Manager, Anadarko, Carlos Zacarias, President and INP Omar Mithá, Chairman & CEO, ENH.

This year's programme has been built to address the requirements for the next stages of development post FID, including National Content regulations, Corporate Social Responsibility and technology efficiencies.

Others are positioning Mozambique as a Regional Gas Hub, Financing for the gas and LNG projects, Gas Monetisation, New gas markets for Mozambique and

Powering Mozambique's Industrialization

The event is organised with support from industry stakeholders Anadarko, Mozambique LNG, ExxonMobil, Subsea 7, Enmar, Baker Hughes a GE Company, TechnipFMC, Sasol, Poten & Partners, Wartsila and G4S.

In addition to the three days of discussions, questions and answers sessions and keynotes, the Summit will also feature the anticipated '2nd Outstanding Women's Forum' and the 2nd edition of the 'Mozambique Gas and LNG Awards'.

  • Published in Africa
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GE Launches World's First 6B Repowering Gas Turbine Solution

GE's Power Services business is celebrating the 40th anniversary of its 6B gas turbine fleet by launching the world's first 6B repowering solution. 

GE also announced it has signed its first agreement for the solution with a global chemical company to repower three 6B gas turbines and save significant amounts of fuel each year at its site in Asia.

The recent announcements mark another example of GE's continued commitment to investing in its mature fleets to keep them competitive.

In Africa, GE has an installed base of 60 6B gas turbines at various locations with the most recent installation in Cabinda, Angola. The fleet is mainly used for power generation for grid supply as well as for large industrial uses like refineries.

"We're excited to mark our 40th anniversary of the 6B fleet and unveil our new repowering solution," said Scott Strazik, president & CEO of GE's Power Services business.

"This fleet is known for its dependability—a reputation earned with global fleet reliability of 98.4 percent, which is about 2 percent higher than the industry average and translates to approximately 17 more days of availability per year. At the same time, the 6B fleet has aged, and there's growing demand to improve performance. Today's announcement and our recent expansion of our Advanced Gas Path technology to the 6B fleet highlight our continuing investment in our mature fleets to help power producers and industrial operators remain competitive in today's very dynamic marketplace."

""As a company, we believe that more efficient power plants means more power available on the grid to respond to the growing energy needs of the African continent.

As a result, we are always focused on solving our customers' most complex problems with customized and innovative solutions that help optimize operational performance" said Elisee Sezan, General Manager, GE's Power Services business for Sub-Saharan Africa.

Part of GE's Fleet360* platform of total plant services solution, the new 6B Repowering Solution incorporates advanced F and H class technology to elevate the machine's performance to leading levels for its class.  

The repowering consists of a full "flange-to-flange" upgrade of all major components, including the combustion system, hot gas path and compressor, and it transforms the 6B unit into a GE 6F.01 gas turbine, which is also available as a new unit.

The new 6B Repowering upgrade, which fits into the existing 6B footprint, can advance performance in both gas turbine and combined-cycle operation.

It's capable of:

  • Increasing turbine output up to 35% simple-cycle / 25% combined-cycle
  • Improving efficiency up to 5% points in simple and combined-cycle operations
  • Achieving up to $3 million in fuel savings per unit annually
  • Achieving NOx emissions as low as 15 ppm.
  • Extending the hot gas path inspection interval to 32,000 hours (from 24,000 hours) and major inspection interval to 64,000 hours (from 48,000 hours)

Since its first installation in 1978 at Montana-Dakota Utilities' Glendive Power Plant in USA, GE's 6B fleet has accumulated more than 65 million operating hours. GE's fleet spans more than 1,150 6B turbines across all corners of the world, powering energy production facilities and industrial applications in segments such as petrochemical, oil and gas, exploration and cement production.

In 2009, GE launches the 6B Performance Improvement Package (PIP), featuring advances in materials, coatings, sealing and aerodynamics derived from its F-class technology to increase output and efficiency.

Today, PIP is installed on 200+ units, 5 of which are in Africa with 9 additional upgrades planned. It has also become the standard configuration for new 6B gas turbines.

  • Published in World
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Senegal Tells Global Oil Investors To Invest In Local Capacity Building

Senegal is determined to become the new frontrunner of Africa's local content development. This is the conclusion of a local content forum held in Dakar on Thursday, organized by Les Conférences du Quotidien and hosted by the African Energy Chamber and Centurion.

Presided by Prime Minister Mahammed Boun Abdallah Dionne, the forum highlighted the potential for Senegal to redefine African standards for domestic capacity building and governance in the continent's hydrocarbons sector.

"Local content is a necessity," declared the Senegalese Prime Minister during the event. "Encouraging the development of local SMEs throughout the value chain is of prime importance, as is the formation and training of Senegalese to boost national capacity and employability."

The history of Senegal's hydrocarbons sector is that of a toddler stepping into a giant's shoe. The discovered gas reserves in the Turtle field alone are such that they could propel Senegal into a major LNG hub for Africa and the rest of the world.

But for a country which has so far produced only limited gas quantity from onshore fields, taking such a big leap is not without its fears and challenges.

As Senegal expands its oil and gas exploration and development efforts, putting in place the right regulatory and governance frameworks will ensure the sustainability and social responsibility of its nascent hydrocarbons industry. The time to forge these is now, and a local content development framework must be the priority.

The development of robust and transparent regulations, which put local capacity building at the heart of policy-making, would provide Senegal with a very efficient framework to attract investments and boost local socio-economic development.

"By being the latest entrant into Africa's hydrocarbons history, Senegal has the opportunity to learn from the successes and failures of its neighbors," explained NJ Ayuk, executive chairman of the African Energy Chamber and CEO of Centurion.  

"Local content is not corporate social responsibility. While the government must create an enabling environment, it is up to Senegalese people and companies to seize the opportunities offered by the country's nascent oil & gas industry."

As it embarks on this journey, Senegal has assets and qualities to build on. It has lessons to draw from its neighbors and African peers, and very strong institutions that can increase the chances of avoiding inefficiencies and corruption witnessed in other African jurisdictions.

It is also a very stable country, whose economy has posted robust growth rates for years, and currently led by a President who understands the industry and is a former head of the country's national oil company.

If its economy remains diversified and its oil wealth is used to further develop social infrastructure and support other growing industries, Senegal stands a great chance to be one of Africa's best oil and gas economies.

  • Published in Africa
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