Sirius Petroleum, an African oil & gas production and development company, has provided a group operational and commercial update ahead of its annual general meeting
On 14 December 2022, the company announced the completion of the OML65 transaction under which it fulfilled all conditions precedent to drawing funds under the senior loan facility of up to US$200mn which was previously executed with Trafigura, including the approvals previously secured from Nigeria’s national oil company, NNPC regarding commencement of Phase 1 of the OML65 approved work programme (AWP).
The company’s senior loan facility, combined with subordinated loan facilities of US$15mn, with a range of international institutions, provides the funding required to undertake the anticipated OML65 AWP.
Governance and management
Sirius holds a 30% interest in the joint venture operating company, COPDC, and the process of integrating the management teams has commenced with Sirius appointees, Dami Onaiide and Bobo Kuti, appointed respectively as managing director and vice-chairman. Other Sirius appointees will be joining the management of COPDC in due course.
The conduct and execution of the OML65 FTSA is overseen by a management committee (ManCom), including four representatives from COPDC and four from Nigeria Exploration and Production Limited (NEPL), formerly NPDC. The ManCom is responsible for the high-level review of the financial, operational, environmental and sustainability performance of the OML65 FTSA as well as approval of budgets and work programmes.
Under the terms of the OML65 FTSA, the day-to-day management and administration of the FTSA is overseen by the OML65 joint project management team (JPMT) which consists of eight members: 4 from COPDC and 4 from NEPL. The COPDC operational team is led by Victor Ekong, who has over 25 years of senior management experience in upstream oil and gas with IOCs in Nigeria. He is supported by seasoned subsurface experts spanning geoscience and engineering, with significant operational experience in Nigeria, including with IOCs.
Abura Field - Phase 1 development programme
We are currently in the process of reviewing technical information related to historic production and well performance and studying the subsurface reservoir models and materials in preparation for the commencement of phase 1 of the AWP, which will focus on the further development of the producing Abura field.
The immediate subsurface plan is to review and update the existing static and dynamic models of the Abura field, incorporating the latest production and pressure history available. The updated history-match of the dynamic model will then be used to optimise the location of this year’s planned development wells. The data gathering requirements from these first wells will also be studied to ensure the necessary reservoir information is available in order to plan the future development of the shallower undeveloped reservoirs. The focus for the first two wells will be infill production from established reservoir horizons.
In-depth drilling well design will commence directly after the upcoming ManCom, after which a detailed basis of well design (BOD) will be produced, from which the long lead items, well heads, casing type and other equipment and materials will be identified and orders placed. Discussions are already ongoing with suppliers. This BOD will then be discussed and shared with the Baker Hughes OML65 technical team, allowing them to structure their operational personnel and ensure all equipment is ready to be deployed. Discussions are also ongoing regarding fit for purpose, drilling rig requirements, and three suppliers have been identified, with contract negotiations due to start within the next 28 days.
Proposed Angola acquisitions
In May 2022 the company announced its partnership with Somoil SA, the largest privately owned Angolan oil company. The Sirius-Somoil consortium signed sale and purchase agreements (SPA) with Sonangol, Angola’s state-owned oil company, to acquire participating interests of 8.28% and 10% respectively in the producing Angolan offshore blocks 18 and 31, and a 25% participating interest in the exploration block 27, for a total consideration of US$335.5mn.
Blocks 18 and 31 are currently achieving gross production of approximately 60,000 bopd each and are generating strong and stable cash flows, particularly in the current oil price environment. These are world class, supermajor operated assets with considerable medium-term development potential.
The economic effective date of the transaction is 22 April 2022 and final completion is expected to take place once customary conditions precedent have been satisfied and the consortium has received approval from the Angolan Ministry of Mineral Resources, Oil and Gas.
Proposed listing process
The company continues its work to prepare for a listing for its issued share capital on the LSEG's AIM market, and intends to undertake this once the proposed acquisition of the Angolan interests is completed.
Commenting, Bobo Kuti, CEO, Sirius Petroleum Plc, said, "In line with our group strategy, we are building a portfolio of world class producing and development assets, working in partnership with our excellent asset, funding and operational partners. We are establishing strong and long-lasting relationships with the national oil companies in Nigeria and Angola and have established a strong financial base from which to achieve our future growth plans."