Canadian Overseas Petroleum Limited Widens African Oil Search Through Shoreline Energy Joint Venture

By Martin Clark
In a move that broadens its African exposure widely, Canadian Overseas Petroleum Limited (COPL) has unveiled details of its pairing with indigenous firm, Shoreline Energy.

COPL, which is listed in London and in Toronto, is keen to diversify and balance its portfolio with new upstream exploration projects and development opportunities.The company already holds a slice of Liberian offshore block LB-13 in Liberia, where it partners ExxonMobil.

That’s a high potential project, for sure, although work has been held up in recent times because of the Ebola virus that has swept parts of West Africa. The new Shoreline partnership provides a welcome distraction, although COPL boss Arthur Millholland did highlight a recent improvement to conditions in Liberia.

He told investors last week that work to restart operations is now at an early stage even though travel advisory notices remain in place. The company’s latest partner, Shoreline, is a conglomerate with interests spanning oil, gas and power generation, as well as other industry sectors, right across sub-Saharan Africa.

Its natural resources unit owns a slice of the producing Nigerian block OML 30 and the strategic Trans-Forcados oil export pipeline.The new pairing certainly hasn’t wasted any time getting going, setting up a new Bermuda-registered entity, Shorecan, that’s owned equally by both sides.

It’s been busy building a portfolio of assets with a number of confirmed projects in Tanzania and Namibia.In Tanzania, Shorecan has an option to acquire a 60 per cent operating interest in two offshore blocks, known as the Latham Licence Area (5,056 sq km) and the Kimbiji Licence Area (4,298 sq km), which extend from the shore to offshore depths of up to 1,000 metres.

It is currently evaluating historic 2D seismic of the area before taking the next step.In Namibia, the new partnership has taken an 80 per cent interest in three deepwater blocks (1708, 1808, and 1709), all situated north of the Walvis ridge on the Namibian/Angolan border.

Pre-existing interests are being kept separate though with Shoreline holding on to its OML 30 project and COPL retaining its interest in Liberian block LB-13. Both fall outside the scope of the joint venture.

But there could be a lot more to come from this dynamic new partnership in the coming months with further opportunities in Nigeria, Ghana, and Mozambique under evaluation. On the money side, ShoreCan doesn’t envisage any short-term requirement for material capital expenditure on any of these assets.

It says its primary short-term focus is to add “cash generative assets”, which could well mean ‘watch this space’ for news coming out of Nigeria, a place where there are plenty of production and near-term development opportunities ripe for investment.

Millholland believes the tie-up with Shoreline allows it to offer exposure to a greater spread of high impact assets, while minimising risk and capital requirements for shareholders.

He highlighted Shoreline’s “strong regional presence” and “excellent track record of successfully developing assets” as key differentiators. Shoreline boss Kola Karim cited COPL’s technical expertise as it sought to grow its African own profile, including venturing out into the deep-water space.

“Our objective is to grow our oil and gas interests in the region beyond our current production base in Nigeria,” he said in a COPL statement last week.