Petrogress, Inc. (PGAS) is Strengthening Port Operations in Cyprus

• MOU to undertake joint venture in Cyprus port operations


• Set to enter upstream business by operating oil platform


• Gaining eligibility to bid for Ghanaian government contracts

A recent announcement (http://dtn.fm/GtI6w), which also appeared in the Greek media, shows that Petrogress, Inc. (OTC: PGAS) is doubling down in Cyprus. Through subsidiary Petrogress Int’l, LLC (“PIL”), the company has entered into a Memorandum of Understanding (MOU) with EDT Agency Services, Ltd., under which the two companies intend to combine operations at the Port of Limassol. The collaboration also extends to future developments at Vassiliko Energy Port, where the Cyprus Port Authority has announced plans for the construction of a $300 million industrial and energy harbor. The MOU calls for a 50/50 partnership between EDT and PIL, operating under PIL’s PG Cypyard & Offshore Terminal Services unit. The joint venture will provide support services to supply vessels and offshore exploration and production platforms and will help PGAS serve the E&P needs of major international oil companies in the Cyprus Exclusive Economic Zone (EEZ). The partnership is expected to not only boost PGAS’s revenues, but the company’s profile in Limassol and Vassiliko.

EDT provides services to oil and gas exploration and production companies worldwide, and it operates its fleet of specialized support vessels from facilities in Cyprus and Egypt. In 2013, the company established facilities at Limassol to support Houston, Texas-based Noble Energy, Inc.’s Aphrodite and Leviathan Field operations in the Cyprus Exclusive Economic Zone. Its facilities now include a mud plant, heliport services and shore base support for vessels conducting survey, diving, salvage and ROV operations in the Cyprus EEZ and Eastern Mediterranean.

In addition to these developments, Petrogress, Inc. is expanding its footprint in the oil and gas business with ambitious plans in Ghana. Late last year, the company announced that it had acquired 90 percent of the shares of Petrogres Africa Co., Ltd. (“PAF”) through PIL (http://dtn.fm/uUf1y). The remaining 10 percent is privately held by Ghanaian investors. This acquisition creates a wealth of opportunity for PGAS, since, through PAF, the company will be eligible to bid on local Ghanaian government contracts. The PAF deal also goes some way toward turning Petrogress into a vertically integrated petroleum company. PGAS is already heavily involved in the midstream sector. The company, founded in 2009, transports petroleum products with a fleet of tankers based at the historic Port of Piraeus, Greece. It also internationally markets crude oil, distillates and refined products, and it operates service and shipping facilities at the Port of Limassol in Cyprus and the Port of Tema, Greater Accra, in Ghana.

PAF’s value stems from its ability, through Ghanaian government authority, to locally market oil products and conduct shipping business from the Port of Tema. Having access to port facilities in Tema will provide a service and operations hub for PGAS’s tankers currently involved in Nigerian oil trading and transport. The port will also serve as a secondary hub for repair, supply and transport ship operators servicing Ghana’s Tano Basin offshore oil fields in the Gulf of Guinea. Moreover, PAF expects to bid for operating contracts on the currently shut-in APG-1 production platform in the Saltpond Oil Field, which is located in shallow waters approximately eight miles offshore and 65 miles west of Accra. A shut-in platform is one whose output capacity has been set lower than is possible, perhaps for safety reasons.

The project is owned by the Ghana National Oil Company, which is expected to let out its operation by the end of 2017. Preliminary bid terms will require the successful applicant to make repairs on the production platform and work over the six existing wells to boost production from current levels of 300-500 barrels per day (bpd) and will also grant access for exploration and production (E&P) development on up to 10 additional offshore blocks. Current reserve estimates for Saltpond range down to 4.2 million barrels of oil and 20 billion cubic feet of gas recoverable. Unproven reserves on the studied portions of the additional blocks, however, are as high as 44 billion barrels of oil equivalent.

The APG-1 platform, nicknamed “Mr. Louie”, has an interesting history. Dating from the late 1950s, it became the first self-elevating drilling barge classed by the American Bureau of Shipping. It has been employed in the Gulf of Mexico and in the North Sea and has been in West Africa since the late 1970s. After drilling six appraisal wells at the Saltpond Oil Field in offshore Ghana, Mr. Louie was converted into an oil platform at Saltpond in 1978 and renamed, rather more impersonally, as APG-1.

PGAS is also actively seeking opportunities in operating and developing natural gas production and transmission facilities along with LNG processing in the U.S., as well as refinery operations in north and West Africa, and the transport and sales of LNG in Europe.

For more information, visit the company’s website at www.PetrogressInc.com

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