CEO and director Arthur S Millholland talked to Kestell Duxbury at Oil Review Africa in an exclusive interview to discuss the recent acquistion and future projects
On 14 September 2016, Canadian Overseas Petroleum Limited (COPL) announced it 50 per cent owned affiliate, Shoreline Canadian Overseas Petroleum Limited (ShoreCan), completed the acquisition of 80 per cent of the share capital of Essar Exploration and Production Limited Nigeria. Essar Nigeria's sole asset is a 100 per cent interest and operatorship of OPL226 located 50km offshore in central area of the Niger Delta.
After briefly explaining the new acquisition, Arthur Millholland (AM) took some questions from Kestell Duxbury (KD).
KD: How is COPL coping with doing business in the low oil price environment?
AM: Just fine. Everything is relative. In 2005, when the oil price was US$50, everyone was walking around thinking that they were geniuses! The financial press do not appreciate that when the oil price goes up, the costs go up as well. Often, services took a large piece of this increase. But then, costs go back down when the oil price falls.
KD: Senegal is tipped to be the next big hydrocarbons market. Is COPL confident about success there?
AM: I don't know why. There has been interesting discoveries in the north. I have no idea what is worth but I don't think it is a lot. I see Mozambique acquiring the investments in the region before Senegal. There has also been an interesting discovery on the border of Gambia but I do see the prospects of being much different.
KD: Are there any comments that you would like to make on COPL's other operations in Africa?
AM: Well first, we are very excited with our joint venture with Exxon Mobil in Liberia. The deep water well is very large. The well is expected to start late 2016 to early 2017, and will be around 8000ft. The second thing is OPL226. It is a very signifcant resource depsite the oil discovery being unappraised. It is set to be near term production in a very large oil field. That region has proven oil finds.
Equitorial Guinea's EG18's conclusion should be in the near term. But we have a criteria, and if a field or area doesn't match that criteria, we have no problem walking away, but Africa is the last frontier.
KD: What are the challenges and advantages of operating in the African market?
AM: The challenges are the transactions take time. They have a traditional process of governmental appraisal. We know that they will get approved, it just takes time. We have to factor that in.
The second challenge is the perception of the market at home. We have had nothing but good experiences in Nigeria but the people at home only have an experience of people trying to get your bank account details. You shouldn't let a few bad apples spoil the bushel. You can't judge a country with a 177m population like that. We do have a certain amount of empathy with the Nigeria people as Canadians. Probably because we weren't a colonial power.