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Zenith Energy wins bid round for Tilapia II offshore Congo

Zenith Energy the listed international oil & gas production company focused on pursuing African development opportunities, has announced that it has successfully received official confirmation from the Ministry of Hydrocarbons of the Republic of the Congo that its local subsidiary, Zenith Energy Congo SA (“Zenith Congo”), has been selected as the successful bidder for the award of a new 25-year licence to operate the Tilapia oilfield (“Tilapia II”).

As announced to the market on July 20, 2020, the Company had previously submitted a comprehensive commercial and technical offer (the “Offer”) for the award of Tilapia II.

In accordance with Congolese procedures for the award of new hydrocarbon licences, the award of Tilapia II is subject to completion of an inquiry of public utility (enquête d’utilité publique) (“IPU”) to be organised and performed by the Ministry of Hydrocarbons during the month of January 2021, as well as the subsequent potential finalisation and ratification of the Production Sharing Contract (“PSC”) for Tilapia II.

Under the envisaged terms of Tilapia II, Zenith Congo will operate Tilapia II in partnership with the National Oil Company, Société Nationale des Pétroles du Congo (“SNPC”).

The Company will make a further regulatory announcement once the IPU is concluded.  

 “Zenith’s selection by the Ministry of Hydrocarbons of the Republic of the Congo as the successful bidder for Tilapia II is an exceptional achievement and is the product, amongst other qualities, of our unwavering commitment and perseverance in pursuing our development strategy.

The Company is now positioned to benefit from a potentially transformational asset with highly prospective development and exploration potential in a prolific hydrocarbon basin where we shall be able to deploy our drilling equipment to perform operational activities in agreement with our local partners at a time of increasing recovery in oil prices.

Further, it is a matter of great satisfaction that the Company has been able to resoundingly vindicate its confidence in its ability to achieve its publicly announced objectives in the Republic of the Congo, specifically in relation to Tilapia II.

The Company can now look forward with well-grounded confidence to the journey ahead in the Republic of the Congo and the possible achievement of other publicly announced objectives, including the potential acquisition of additional oil production assets, as well as obtaining repayment of the approximately US$5.7 million owed to the Company by SNPC,” Andrea Cattaneo, Chief Executive Officer of Zenith, commented.

Zenith Asset Overview

Zenith views the Republic of the Congo as a highly prospective hydrocarbon province with a very supportive jurisdictional framework for junior, independent oil companies with ambitious development objectives.

In May 2020, Zenith completed the 100% acquisition of Anglo African Oil & Gas Congo S.A.U (AAOG Congo”) from AIM listed Anglo African Oil and Gas plc (“AAOG”).

AAOG Congo’s licence to operate the Tilapia oilfield (“Tilapia I”) expired on July 18, 2020, as publicly announced by Zenith Energy and previously announced by AAOG.  

On July 20, 2020, the Company announced that it had submitted a comprehensive technical and commercial offer to the Ministry of Hydrocarbons of the Republic of the Congo for the award of a new 25-year licence in relation to the Tilapia oilfield, to be named “Tilapia II”. 

AAOG Congo has total receivables of approximately US$5.7 million from Société Nationale des Pétroles du Congo (“SNPC”), the National Oil Company.

Production: Output is approximately 30 barrels of oil per day (39-41 API light sweet crude) from one near surface interval.

Licence Area Highlights

  • Located in the Lower Republic of the Congo Basin, West African Atlantic Margin, extending from Gabon down to Angola, a prolific hydrocarbon region.
  • 50 km square kilometres, mainly offshore (less than 10m depth) – drilled from onshore
  • In close proximity to oil storage /processing infrastructure located in the nearby town of Pointe-Noire.

REPUBLIC OF THE CONGO

The Republic of the Congo is one of Sub-Saharan Africa’s largest oil producing countries with approximately 1.6 billion barrels of proved crude oil reserves, 3.2 TCF of proved natural gas reserves, and a daily production of approximately 300,000 barrels of oil per day. It has an established history of prolific oil production operations, specifically by majors including ENI and Total who have been operating in-country since 1968.

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