From: Biniam Tekle (biniamt@dehai.org)
Date: Fri Apr 30 2010 - 09:15:28 EDT
*http://centricenergy.com/images/uploads/african_energy_april_2010.pdf*
**
*Centric finds new prospects by moving eastwards, The Canadian juniorhas
ambitious plans to expand in sub-Saharan Africa,, where its Kenyablock award
has already generated more than the usual interest – AfricanEnergy – Apr 16,
2010
*- by Eleanor Gillespie -
“TSX Venture Exchange-listed Centric Energy´s move into Kenya, where ithas
signed a production-sharing contract (PSC) for Block 10BA, tookseveral
months of negotiations. Centric was introduced to Kenya by localcompany
Endeavour Resources, which has been paid $515,000 inreimbursement of its
sunk costs for technical studies of the block, andassigned a 5% interest in
the new Centric Energy (Kenya) Ltd subsidiary,which will hold the license.
Centric President and chief executive Alec Robinson told African Energythat
“Endeavour had put in a bid for the block in 2009 but was told theywere to
small”. Under the Block 10BA PSC, Centric is required to carryout a $3m,
three-year work programme and pay a $100,000 signing bonus tothe Kenyan
government. The PSC is split into a seven-year explorationterm, with three
periods, and a 25-year production term. In the firstexploration period,
Centric will reprocess and study existing data,carry out geophysical and
geological surveys and acquire new 2D seismic.The most recent seismic
acquired on Block 10BA dates from 1991.
In late March, regional daily The East African reported on a“Sensational
dispute” for control of the block between Centric andTullow. The paper said
Tullow had written to prime minister Raila Odingaprotesting that the
Ministry of Energy had bypassed its negotiationsand awarded the block to
Centric. The ministry then reportedly wrote toCentric asking it to allow
Tullow to farm in mutually acceptable terms.
Robinson told African Energy: “While we would typically have done somework
on the block and at the appropriate time looked for a farm-inpartner, this
has come sooner than expected.” He told Global Pacific& Partners´ Africa
Petroleum Forum in London on 13 April thatCentric was in discussions with
two potential partners and had recentlybeen approached by a third. Heritage
Oil Corporation, Centric´s Partnerin Mali, is also thought to be keen on
farming in.
*Eritrea play*
Picking up assets through direct negotiations seems to be key toCentric´s
success. Like many minnows, it is willing to take on assets inunderexplored
regions and is looking at political risky Eritrea, wherecompany officials
are due in Asmara in late April. Robinson said: “Wehave visited three times
in the past year after being introduced byCanadian mining company Sunridge
Gold (currently exploring for mineralsin Eritrea). They had been asked by
the Eritrean government to bring anoil company”.
Centric is looking at the offshore Dahlak Block, which Eritrea
madeavailiable with 11 other blocks several years ago (AE 136/14). “We
madethe applications but were told to bring in a bigger company
asoperator... We have a company that is very interested. The governmenthas
granted us exclusivity while the negotiations are conluded,” saidRobinson,
adding that 3D seismic was needed. Italy´s Agip conductedfield surveys and
drilled wells on the Dahlak archipelago in the 1930s.
Eritrea has not lacked foreign company interest, but few players staythe
distance. The country´s poor regional relations and tenserelationship with
Washington have put off many foreign players. In 2008,an
Eritrean/Chinese/Gulf joint venture signed for two offshore blocks,but while
Eritrean officials had hoped seismic would start beforeend-2008, they have
been disappointed (AE 148/15).
In late March, Ministry of Mines and Energy head of hydrocarbonexploration
Teklehaimanot Debretsion told African Energy: “I can onlyconfirm to you that
nothing has been done to explore the blocks sincethe signing of the
contract. We are also aware that some of the partnershave declined to
continue on the project.” Recent reports said thejoint venture´s Saudi
Arabian partner, an Al-Saud prince, had pulledout.
*Mali entry*
Centric has been around for several years. In January 2006, when it wasknown
as Calterra Freehold, the company entered into an agreement withan unrelated
party to acquire the shares of Mali-incorporated Mali OilDevelopment Sarl, a
wholly owned subsidiary of Australia´s Mali Oil PtyLtd, which held the
rights to blocks 7 and 11. Mali Oil had severalshareholders, including André
Vézina and Madani Diallo (both now CentricAdvisers), who got the assets
through direct negotiation, andAustralian company Transocean Securities, run
by James Henderson, whichwas key to finding the Canadian
investors<http://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=CTE&t=LIST&m=28148398&l=0&pd=0&r=0#>and
engineering a reversetakeover into a shell listed on the TSX Venture
exchange. Shortlyafterwards, Calterra changed its name to West Africa Energy
Inc, andlater to Centric Energy.
Robinson told African Energy: “Mali was high risk because it wasunexplored
but it was worth pursuing. We were fortunate to farm out tosuch a good
partner as Heritage. It is rank wildcat exploration but thelicense terms are
excellent and the people in Mali are good to workwith.” In Q1 08, the
company farmed out a 75% interest in blocks 7 and11, with Heritage agreeing
to finance the required work programmes forthe first exploration periods –
including the acquisition of 2D seismicand the drilling of one exploration
well. Work was previously done inthe 1970s: Murphy did seismic in 1974 and
Elf drilled a well in 1976.Centric did a high-resolution aeromagnetic survey
in early 2007, and itplans for 2010 include the acquisition and
interpretation of 354km of 2Dseismic in Block 11. The duo are also
considering seismic acquisition,which has been budgeted for, on Block 7,
which has more time on itslicense.
*Mali outlook*
While there was much excitement about Mali´s exploration
potentialmid-decade, few of the original players seem to have mooved on
toserious exploration and production programmes. However, Algeria´sSonatrach
International has conducted extensive seismic in the TaoudeniBasin to the
north, and Gulf-backed Afex Global began seismic on Block13 in late March,
which could potentially increase interest in Mali oncemore.
As well as Robinson, who had a long career with Amoco, Centric
officialsinclude chairman Darren Devine, who holds many board positions,
andAnthony Dutton, Simon Anderson and Nicholas Davidoff, who becamedirectors
in 2009. Davidoff works for Firebird Management, the largestshareholder in
Centric, with 20%.
Diallo has a long involvement in the regional minerals sector, whileVézina
is a French-Canadian who has also served as Mali´s commercialattaché to
Canada. Mali Oil general manager Hadi Ly´s other interestinclude a company
that a couple of years ago bid for a concession inNiger.”
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