Operations in Africa

Chad


Geomarket overview:
Chad has 1.5 billion bbl of proven reserves (commercially recoverable from known reservoirs) of crude oil in barrels (bbl) (source: CIA, January 2011). This represents a current value of $144 billion.


Our activities:
Stark with our partners have options to - and are in final stage negotiations to - take hold of several promising oil blocks (see illustrations and maps below).

 

Ghana


Geomarket overview:
Ghana has 660 million bbl of proven reserves (commercially recoverable from known reservoirs) of crude oil in barrels (bbl) (source: CIA, January 2011). This represents a current value of $63 billion. This value excludes natural gas and much extra potential offshore.


Our activities:
Stark has been active in Ghana since 2008. With our local and international partners, we have been exploring opportunities in offshore exploration and worked with the TOR refinery in Tema to improve productivity and reduce flaring of gas. We are currently evaluating onshore oil block options.

 

Kenya


Geomarket overview:
Kenya represents a new and exciting opportunity with the much of the proven reserves yet to be demonstrated.


Our activities:
We are currently evaluating various early stage opportunities.


Libya


Geomarket overview:
Oil reserves in Libya are the largest in Africa and the fifth largest in the world with 76.4 billion barrels with a value of $7.3 trillion as of 2010. Oil production was 3.1 million barrels per day as of 2010, giving Libya 77 years of reserves at current production rates if no new reserves were to be found.
Libya is considered a highly attractive oil area due to its low cost of oil production (as low as $1 per barrel at some fields), and its proximity to European markets.
Libya's challenge is maintaining production at mature fields, while finding and developing new oil fields. Most of Libya remains unexplored as a result of past sanctions, civil war and disagreements with foreign oil companies.
The majority (85%) of Libyan oil is exported to European markets. 11% or 403 million barrels of oil imports to the European Union (in 2010) came from Libya.
After 40 years of idiosyncratic dictatorship, Libya's six million people are hungry for everything from roads and hospitals to phones and fashion. The country has no railway and no public bus service. UK Trade and Investment estimates Libya will eventually spend more than 125 billion on reconstruction.

Our activities:
Stark is in ongoing negotiations with the Libyan government and the Transition Council to explore opportunities to contribute to the development of the country and obtain oil concessions to fund these efforts.

 

Liberia


Geomarket overview:
War-torn West African nation of Liberia is looking to oil as the catalyst for rebuilding after decades of civil war. Large deposits of oil are known to exist in the Gulf of Guinea along Africa's coast.

Nigeria was the first nation to cash in on the offshore riches, Ghana joined the club of oil exporting nations late last year. Now Liberia is hoping that the good fortune and oil reserves will continue to spread west. Exploration activities will begin in a few months. If the reserves pan out, Liberia could be producing oil by the end of the decade.

The danger of a "resource curse" striking Liberia, is a point worth taking a closer look at. The resource curse is a concept in international development coined to describe situations where impoverished nations suddenly discover a valuable natural resource, but instead of lifting the nation out of poverty, the country is gripped by corruption, crime, and political (occasionally actual) infighting, with the people in some cases winding up poorer than they were before the resource was found.

The resource curse has struck nations around the world, but the causes are often the same – poverty produces a poorly-educated population and civic institutions that barely work, if they function at all.

The country can't absorb the wealth suddenly flooding into it: institutions that barely worked before now have massive budgets to mismanage, politicians often become fixated on pet projects to build their legacy without concern over whether or not they help the nation (skimming a healthy amount off the top is also commonplace), and fights break out over control of the natural resources, sometimes rising to the level of insurgencies if not full-blown civil wars.

Foreign companies historically have taken advantage of unsophisticated local governments to sign deals that massively favor them while depriving the people of promised wealth.

Labor Minister Varbah Gayflor has warned that depending on how Liberia's recently discovered oil is managed, it could be a source of conflict in the country.
She sounded the warning on August 4, 2012, when she spoke at program organized by the National Oil Company of Liberia (NOCAL), marking the launch of the Nationwide Consultation on the country's Draft Petroleum Policy, at the Monrovia City Hall.
The Nationwide Consultation on the Draft Petroleum Policy is expected to be completed by the close of August 2012, with six teams from NOCAL spread across the length and breadth of the country to explain the nine thematic areas contained in the draft policy for the input of every citizen of Liberia.
The thematic areas contained in the Draft Petroleum Policy include: Resource ownership and maritime boundary, Legal framework and institutional oversight, and State participation and fiscal regime.
Others are: Revenue management and state-NOC financial and tax, Transparency and accountability and Arrangements, safety, health, environment and social impact. The rest are: Licensing and contracting, Work programs and operations and Local content.
Following the consultation, the six consultation teams of NOCAL will return to Monrovia with all the recorded discussions held with citizens, including the citizens' responses and inputs, which will be written into a report submitted to the Hydrocarbon Technical Committee (HTC).
The public hearing requested that efforts should be made to ensure that future oil revenue be directed into infrastructure development, particularly the construction of roads in their area, as well as the health sector.
The Liberian residents also called for training opportunities for Liberians, targeting youths from all the political subdivisions of Liberia. They recommended that the policy sets out punitive measures against public officials who mismanage future oil revenues.
Revenue from the oil sector, they also recommended, be directed into the health sector to improve the health care delivery system of the country. They also expressed concern about possible safety and environmental effects, and called for straight policies that would safeguard the environment and protect the country's marine sector.

Our activities
Stark is in exploratory discussions to sign a memorandum of understanding with NOCAL.


Mali


Geomarket overview:

Mali has exciting new oil discoveries.


Our activities:

Stark is well positioned to take advantage of the opportunities and negotiations are ongoing with our partners.


Nigeria


Geomarket Overview:
Although Libya has more reserves, there were 37.2 billion barrels of proven oil reserves in Nigeria (as of 2011) worth $3.6 trillion, ranking the country as the largest oil producer in Africa and the 11th largest in the world.

The Nigerian government has projected crude oil production for 2012 at 2.4million barrels per day which are expected to increase to 2.6million barrels by 2015.
Pipeline vandalism, kidnappings, and militant takeover of oil facilities have reduced production, which could be increased to 3 million barrels per day in the absence of such problems. The Nigerian government hopes to increase oil production capacity. Nigeria is the world's eighth largest exporter of crude oil and sends 43% of its exports to the United States. Nigeria is heavily dependent on the oil sector, which accounts for 95% of its export revenues.
In terms of Prospective resources, Nigeria and São Tomé have an agreement in which the Joint Development Authority was created to explore and produce oil in the waters between Sao Tome and Nigeria. Nigeria and Sao Tome share this area, called the Joint Development Zone, or JDZ. This area could contain up to, or over, 14 billion barrels of oil.

Our Activities:
Stark are not looking for E&P in Nigeria, but are working with our trading partners to trade crude oil from the Nigerian National Petroleum Corporation (NNPC).


Niger Republic


Geomarket Overview:

Commercial oil production, slated to begin next month, will help boost economic growth in Niger to 8.5 percent next year, over double the 3.8 percent forecast for this year, the West African regional central bank BCEAO estimated.
Niger is due start supplying oil from domestic reserves to its new refinery in the eastern town of Zinder from Dec. 1 for refining at a rate of 20,000 barrels per day. Some 7,000 barrels of that is for local use with the rest due for export.
The West African nation, already one of the world's biggest suppliers of uranium, will start production at its estimated 650 million barrels reserves under a $5 billion deal with China's CNPC at the Agadem bloc.
The BCEAO said in a statement late on Friday that investment in public infrastructure and continued production from Niger's uranium mines, which supply France's nuclear energy sector, would be the two other main components of growth in 2012.
Separately, the European Union announced during a visit that it was granting Niger 42 million euros in financial support to help good governance and security in the country, which is in the Sahel-Saharan zone currently targeted by al Qaeda allies.

Our Activities:
Stark are in early stage exploratory discussions with Niger and CNPC.

 

Sudan


Geomarket overview:

Sudan's oil reserves are 5 billion barrels with a value of $48 billion.

The Melut Basin in the Sudan is one of the major sources of crude oil in Africa. The basin is located about 1,120 km south of Khartoum east of the Nile River. In 2007, the output from the basin was in excess of 500,000 Barrels of Crude Oil Per Day (BOPD) and has the potential to increase to 800,000 BOPD in the bear future.

The primary field in the Melut Basin is the Great Palogue Field which has estimated recoverable reserves of over 900 million barrels of good-quality light crude oil.

The Muglad Basin is the largest of the Central African rift Basins. It extends across an area of 120,000 km² and is up to 200 km wide and over 800 km long. Locally the basin contains up to 13 km of Cretaceous to Tertiary sediments. The two largest hydrocarbon accumulations, the Unity and Heglig fields, have combined recoverable reserves of 250-300 Millions of bbl.

Production of oil in the Muglad Basin started in June 1999. By the end of October 2004 the cumulative production from all fields was 461,000,000 BBLs. Eight fields are contributing to production, Heglug, Unity, Toma South, El Nar, El Toor, Bamboo, Munga, and Diffra. These fields have average flow rates of 325,000 BOPD.


Our activities:
Stark is in later stage negotiations to obtain an oil block.


South Sudan


Geomarket overview:

After South Sudan became an independent nation in July 2011, southern and northern negotiators were not immediately able to reach an agreement on how to split the revenue from the southern oilfields, which are estimated to hold 80% of the untapped oil deposits in Sudan.
The oil revenues, according to the Comprehensive Peace Agreement (CPA), were split equally. Since South Sudan relies on pipelines, refineries, and Port Sudan's facilities in Red Sea state in Sudan, the agreement stated that the government of Sudan in Khartoum would receive a 50% share of all oil revenues. This arrangement was maintained during the second period of autonomy from 2005 to 2011.
In the run up to independence, northern negotiators reportedly pressed for a deal maintaining the 50–50 split of oil revenues, while the South Sudanese were holding out for more favorable terms.
Oil revenues constitute more than 98% of the government of South Sudan's budget and this has amounted to more than $8 billion in revenue since the signing of the peace agreement. However, after independence, South Sudan objected to Sudan charging US$34 per barrel to transport oil through the pipeline to the oil terminal at Port Sudan. With production of around 30,000 barrels per day, this was costing over a million dollars per day. In January 2012, South Sudan finally suspended oil production, causing a dramatic reduction in revenue and food costs to rise.

Our activities:
Stark has a Canadian E&P partner and together we are aiming to obtain an oil block in South Sudan as soon as the security can be maintained.

 

Tanzania


Geomarket overview:

In the upstream oil industry, oil and gas exploration and production is being encouraged. Extensive gas fields have been identified off the coast at Songo Songo and Mnazi Bay and these are in the process of being developed.


Our activities:
Stark's affiliate signed an agreement with a London Stock Exchange listed company to assist with services relating to the oil and gas exploration in Tanzania.


ASIA: Papua New Guinea


Geomarket overview:
PNG has vast land and resources. Nevertheless, PNG's proven reserves are only 88 million bbl worth $8 billion, but it is still very early days for exploration.


Our activities:
Stark signed in 2009 an agreement for an oil block in PNG and are still prospecting there and planning for the aerial geological survey.

More information is available upon request.