MALABO, Equatorial Guinea, August 6, 2020/ — The recently-announced acquisition of Noble Energy by Chevron for $13bn gives the American major an entry into Equatorial Guinea’s oil & gas sector, where Noble Energy has interests in the Alba Field (33% non-operated WI and 32% revenue interest), Block O (Alen Field 51% operated WI and 45% revenue interest) and Block I (Aseng Field, 40% operated WI and 38% revenue interest). These assets in Equatorial Guinea represent 94 million barrels of oil equivalent of proved developed reserves and 38 million barrels of oil equivalent of proved undeveloped reserves. In addition, Noble Energy was also the operator Block YoYo in Cameroon and of the deepwater Block Doujou Dak (60% WI) in Gabon, where it was in the process of evaluating recently acquired 3D seismic data.
The acquisition has raised several concerns and questions, mostly because these assets are currently subject the CEMAC region’s most ambitious gas development project. While the Alba Field has been feeding gas into Equatorial Guinea’s Punta Europa complex for decades, including the EG LNG Plant, the AMPCO methanol plant and the Alba LPG plant, its declining reserves have led to the development of the Alen and Aseng fields as alternative sources of gas. In 2019, Noble Energy was at the heart of a groundbreaking agreement to launch the Alen Monetization Project, expected to ensure continued and stable gas supply to Equatorial Guinea’s LNG and downstream revenue-generating infrastructure.
The project is still on track for delivery in 2021 and is the first step of the development of a much broader offshore gas mega-hub in the Gulf of Guinea. This regional gas hub would ultimately include the development of the Yolanda and YoYo discoveries located in Equatorial Guinea’s Block I and Cameroon’s YoYo Block, both operated by Noble.
The scheme is one of the most ambitious cross-border gas venture in Africa, and Noble’s acquisition by Chevron has the industry worried about the future of the project under new operatorship. However, the African Energy Chamber believes that the entry of Chevron as operator for the offshore gas mega-hub could be transformational for the future of gas in Central Africa, especially at a time when Equatorial Guinea, Cameroon, Gabon and Congo are all multiplying efforts to monetize their domestic gas reserves.
Chevron is indeed a true gas player in the African market. In Nigeria, it has been leading natural gas commercialization efforts for decades through its Escravos projects targeting the monetization of 18Tcf of gas. These have resulted in the Escravos Gas-to-Liquids facility and the Escravos Gas Plant, both cornerstones of Nigeria’s gas development strategy. In Angola’s Block 0 and Block 14, Chevron has demonstrated a remarkable ability to invest in cutting flaring and monetizing gas. In block 0, it still operates what is the world’s largest LPG FPSO vessel, turning previously flared gas into cleaner fuels for Africans and the for the world.
“What we need now is a pragmatic commonsense approach that welcomes credible investors and see gas taking the lead in economic development and industrialization, therefore the entry of Chevron is extremely welcomed and should be accepted by all stakeholders,” said NJ Ayuk, Executive Chairman at the African Energy Chamber. “Transaction and projects approvals should not be unnecessarily delayed, ensuring a quick and efficient takeover in the region so ongoing gas projects are not affected. This acquisition gives the region a very experienced and credible gas player with tried, true and tested solutions to support our gas ambitions. The Chamber believes that fast tracking approvals and driving commonsense measures around this deal will make the industry work,” added Ayuk.
“From its Nigerian and Angolan presence, Chevron understands the issues and opportunities of developing African content. We expect its entry to be beneficial from a local content and capacity building perspective,” said Leoncio Amada NZE, President for the CEMAC region at the African Energy Chamber. “We hope that the authorities in Cameroon and Equatorial Guinea can do an efficient and fast track due diligence process, and ensure that Noble meets all its obligations to exit and create a seamless transition for Chevron. This is an opportunity for our public authorities to demonstrate their commitment to empowering investment and move away from an era of uncertainty to give confidence to future investors and stay competitive,” concluded Amada NZE.