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Zenith Energy Ltd (LON:ZEN) (Zenith) is an oil and gas production company incorporated in Canada and dual-listed in London and Toronto. Zenith’s strategy of investing in low costs producing assets with relatively material upside potential, culminated in the recent award of a PSA in Azerbaijan for the redevelopment of mature onshore assets with potentially material remaining oil resources. Meanwhile, Zenith Energy Ltd (LON:ZEN) has continued to pursue a measured development strategy in Italy, centred around monetisation of gas resources. We estimate a potential upside of up to 41p (C$0.66) per share, based on third-party reserves assessment and recognising the risks and challenges facing Zenith Energy Ltd (LON:ZEN) in Azerbaijan. We believe that Zenith’s strategy to own its rigs is a critical risk-mitigating factor for the project, whilst management’s ownership of c. 20% of the equity provides perfect alignment of interests with shareholders.
On 16/3/16, Zenith entered into a Rehabilitation, Exploration, Development and Production Sharing Agreement (REDPSA) with the State Oil Company of Azerbaijan Republic (SOCAR) and SOCAR Oil Affiliate (SOA). Following Cabinet of Ministers’ approval (25/4/16) and Parliament ratification into law (14/6/16), the official handover of the assets to Aran Oil, a newly incorporated operating joint venture between Zenith (80%) and SOA (20%), was completed on 11/8/16. The REDPSA has now the dignity of an Ordinary law in the Civil Code of the Republic of Azerbaijan, and consequently cannot be cancelled or rescinded unless for reasons of extreme gravity.
The REDPSA area (Muradkhanli Contract Area) has a duration of 25 years, with a possible additional 5-year extension to be approved by SOCAR, and covers some 642km2 in the lower Kura Basin some 300km West of Baku, the capital city. The Contract Area covers the largest onshore oil fields discovered in Azerbaijan, Muradkhanli, Jafarli and Zardab, which have been producing since the 1970s (Figure 1).
Collectively the Muradkhnali, Jafarli and Zardab fields form the largest onshore oilfield of Azerbaijan. Muradkhanli was discovered in 1971 in an unconventional Upper Cretaceous volcanic reservoir and brought on production in 1972. Oil was then discovered in 1973, in Eocene carbonates with interbedded sands, on the flanks of the structure. These reservoirs have produced to date 16MMbbl and 1.6MMbbl respectively of 27o API oil (Figure 2).
Jafarli, located to the SE, was discovered and brought on production in 1984. The Eocene reservoir has produced to date 1.73MMbbl. Zardab, located to the NW, was discovered and placed on production in 1981 from the younger Oligo/Miocene Maykop Fm; however, it only had minimal production to date due to wellbore and sand control problems, as well as extreme pressure.
Production has been continuous since the 1970s, peaking at ca. 15,000 bbl/d in 1979 and declining subsequently as a result of mechanical failures and lack of sufficient investment, due to Azerbaijan's post-independence national energy strategy focused on offshore oil production. At the time of acquisition by Zenith, oil production from Muradkhanli and Jafarli stood at 295 bbl/d from 64 active wells and it currently averages approximately 350 bbl/d.
Zenith believes that this lack of maintenance and gradual dilapidation of field equipment is the principal cause of the decline in oil production and that these fields are far from reaching a stage of natural depletion, as demonstrated by the fact that the majority of wells produce without any artificial lifting but only for the natural pressure in the structure. This was confirmed by the recent Competent Person’s Report (CPR) which assessed 2P reserves of 33.4 MMbbl of oil net to Zenith (31/3/17), excluding the reserves impact of a potential, yet not certain, 5-years extension.
The REDPSA conditions state that Aran must achieve a production increase of 1.5 times from the 2015 average of 310 bbl/d within two years from the effective date of the 11/8/16, hence by 11/8/18. The quantum of improvement being a condition of the REDPSA, failure to deliver would invalidate it, under the licence terms. However, judging by current progress, this condition seems already within reach one year in advance.
In the period 2017-2020, Zenith plans to workover a total of 44 existing wells which are currently inactive or producing at rates of below 5 bbl/d to bring rates up to 10-15 bbl/d using improved technology, non-damaging fluids and optimised treatments, according to the following schedule: 10 wells (2017), 11 wells (2018), 15 wells (2019) and 8 wells (2020).
Zenith intends to drill 5 new wells in 2019 and 10 new wells each year until 2033, when the new drilling programme will be completed, i.e. a total of 145 new wells out of which 58 will be horizontal wells in the Mid-Eocene. As a result, Zenith expects to reach peak production level of 13,693 bbl/d in 2033 (Figure 3).
An upgrade to the facilities and gathering system is expected to take place in 2019 to accommodate increasing production rates. Production will decline to the end of the contract in 2041 after development drilling has been completed.
In the Zardab field, in addition to the marginal producing wells, five non-producing wells completed in the Oligo/Miocene Maykop Fm are expected to be worked-over in 2019 and to be returned to production after wellbore and sand production problems have been resolved. Depending on the results of this program, the Zardab field may be more fully developed, potentially including the deeper Upper Cretaceous, but such potential upside has not been evaluated in the CPR.
Total gross capex for the redevelopment programme is estimated at $748M, including $20M for 3D seismic surveys to be acquired in 20202024 to optimise drilling locations.
Field rehabilitation activities will focus on three areas with the goal of achieving 1,000 bbl/d by 31/3/18 and 2,500 bbl/d before major infill drilling is undertaken. These include a systematic electrical submersible pump (ESP) upgrade programme; high impact well workovers in the Zardab field; and the identification and perforation of new productive zones in wells with significant unexploited potential.
1. ESP upgrade programme
Obsolete and unreliable ESPs for 11 wells will be replaced, in addition to similar interventions for wells M-45 and M-195, aiming at a total increase of 219 bbl/d over existing production across these 11 wells. New ESPs will be procured from Baker Hughes and Schlumberger, enabling a comparative assessment of their respective advantages and mitigating the risk of delays in their production and transportation. The Company will employ its upgraded A-80 workover rig to perform these operations, in addition to a similar-sized workover rig operated by an experienced local service company. It is anticipated that the programme will continue until the end of November 2017. Once completed, the total number of new ESPs installed across the field will be 13, including the new ESPs installed at wells M-45 and M-195.
2. Zardab high-impact field rehabilitation
Zardab is the least developed oilfield in the Contract Area, with no significant well interventions taking place in the past 20 years. Rehabilitation activities will focus on two wells: Z-28 and Z-21, with a potential third intervention at Z-4 only to occur in case of success at either Z-28 or Z-21. These three wells each produced in excess of 500 bbl/d for a very short period of time before becoming plugged-up with sand and ceasing production.
Historically, well Z-28 experienced significant flow rates at high pressure and analysis identified tubing damage requiring the pull-out and clean-out down to the liner top at 3692m. A Chinese-manufactured truck-mounted ZJ30 workover and drilling rig, with a lifting power of 180 tonnes, has been rented from an experienced local drilling company and will be fitted with the necessary well control equipment and fishing tools.
The workover is scheduled to begin in late September 2017, after necessary civil engineering work has been completed, and will last approximately one month. The rig will then move to Z-21 for a similar intervention and, if successful, a workover of Z-4 will follow thereafter.
3. Identification and perforation of new productive zones
Perforation of newly identified productive zones with strong production potential will be carried out on three underexploited wells in the period until 31/3/18.
Zenith initiated the workover programme in early 2017 using a refurbished company-owned workover rig, manned with company staff, and contracted another workover rig from a highly experienced local drilling company. Zenith's strategic preference to use its own staff and resources wherever possible, thereby ensuring better operational oversight and effective cost management, resulted in the purchase of various oil services equipment from Chinese manufacturer Kerui Petroleum, secured with a 15% deposit and a US$1.7M vendor financing facility. The use of debt, in this case supplier credit from a leading Chinese equipment manufacturer, is Zenith's preferred form of funding and avoids unnecessary equity dilution.
Management stresses that ownership of its own equipment is a critical success factor for Zenith, significantly reducing operational expenditures. The company is planning to acquire imminently a 2000HP drilling rig and a 750HP 140-tonne workover rig. The arrival of the rigs will have a transformational impact on Zenith’s operational capabilities in Azerbaijan by enabling the Company to drill new well systematically, beginning in 2019.
The new, latest generation 140-tonne 750 HP workover rig in the process of being purchased will be the Company’s second rig and is much larger than the Company’s existing and recently upgraded 80-tonne workover rig. It is important to note that the new rig will also be capable of performing sidetracks, and carrying out well completion in newly drilled wells once the Company's drilling programme commences.
Crucially, the arrival of this new rig will also do away with the present need to rent larger rigs for the workover of technically demanding wells such as Z-28 in the Zardab field. This will lower costs and enhance Zenith’s operational independence, enabling the Company to not be affected by potential inefficiencies or unavailability of equipmentfrom third parties.
Zenith has added equipment and strengthened its operational team by targeted and carefully considered investments to ensure a progressive increase in production without the dangers presented by imprudent expenditure. Management believes Zenith is gradually reaping the rewards of its approach.
It plans to complete the pump replacements at four wells (e.g. M-70 and M-48 in Muradkhanli, C-34 in Jafarli). In the meantime, Zenith successfully introduced advanced ESP technology in the boreholes (M-45) after workover, and successfully added a coil tubing unit (CTU, in M-66).
Although the use of a CTU offers a number of advantages over a conventional workover rig, in terms of the speed and operational flexibility it can offer, certain interventions can only be performed by a workover rig, such as running and pulling artificial lift equipment in a well.
1. Well M-45, from 1.5 to 49 bbl/d
Drilled in 1980 and placed on production in July 1981 at rates of 74-86 bbl/d, M-45 produced ca. 352,700 barrels of oil from 1981 to 2017 and declined to an average rate of 14 bbl/d from 2014 to 2017, decreasing to ca. 1.5 bbl/d in early 2017 due to tubing problems. Recompletion involved retrieving the old tubing as well as re-perforation, acid stimulation and hydraulic fracturing of the Cretaceous producing interval; as a result, production was restored to 46 bbl/d. However, predicted production on this well showed that rates of 150 bbl/d should be achievable by taking full advantage of the advanced ESP technology recently installed, which enables the monitoring of flow rates and temperature as well as input reservoir pressure and electrical parameters to optimise production.
This is the first ESP of this sophistication to be installed in the Contract Area and Zenith identified a further 11 wells where installation of such ESPs could lead to a significant increase in production. The new ESPs, designed in accordance with the specifications of each well, have been ordered from Schlumberger and Baker Hughes. Zenith expects ESP replacement across these 11 wells to generate a total increase of 219 bbl/d over existing production, and is also evaluating other wells across the Contract Area where ESP installation/replacement could significantly increase production.
2. Well M-66, from nil to 50bbl/d
Shut-in since 1999 and producing up to 284 bbl/d after completion, the well was returned to production at a rate of 15 bbl/d after being cleaned-out with a CTU using nitrogen. The clean-out exposed a yet-unperforated pay zone and after completion of an additional 6m of perforations production was increased to 50 bbl/d.
The use of a CTU has exposed productive zones that have not produced for many years and Zenith is reviewing many Soviet era logs, which form the majority of the available well data, in order to identify new, untouched areas of the wellbore reservoir. Zenith has identified an additional 5 wells that hold high potential for such production maximization.
The use of the CTU is expected to play a particularly important role in the rehabilitation of wells in the Zardab field, many of which are plugged with sand from the reservoir. Three wells in particular, one of which will initially be chosen for a workover in 2017, produced in excess of 500 bbl/d for a short time before they became plugged-up with sand.
3. Well C-26, from nil to 70bbl/d
The perforation of a new, previously unexploited, production zone in well C-26, a non-producing well in the Jafarli field, was undertaken following the identification of 10m of unexploited pay zone at depths of 3618-3628m in the Middle Eocene, and resulted in production flows of 70 bbl/d. This operation is part of the Company's strategy to identify and perforate new productive zones in a number of underperforming wells with significant untapped production potential.
4. Well M-195, work-in-progress
The presence of 8m of permeable hydrocarbon pay confirmed by recent logs, and supported by historical production rates, justified the decision to sidetrack the well after initial workover plans could not be completed. Initial flow rate of 149 bbl/d from the sidetrack did not resume after pulling out the drill string and a CTU intervention is required to circulate the mud out of the open hole and remove the mud cake from the borehole walls. The delivery of a custom-built ESP from Schlumberger is expected in late October 2017 due to delays incurred in the procurement process, representing a 3-month delay vs. initial expectation of mid-July.
5. Wells J-2 and Z-28, still pending
J-2 in Jafarli was drilled in 1984, placed on production in late 1985. It has produced ca. 111,000 barrels of oil from a younger reservoir of Eocene age. The workover will include the removal of 773m of stuck production tubing and fishing of metal debris from the hole. As mentioned above, Z-28 in Zardab requires removal and inspection of all production tubing. Worn sections of tubing will be replaced as necessary with the objective of returning the well to production.
The Azeri project is in start-up phase and cash consuming mode. According to the CPR, it is expected to become Free cashflow positive sometime between 2020 and 2021, when average yearly production increases from 2,500 bbl/d to 4,200 bbl/d (Figure 4).
Our analysis of the CPR’s cash flow projections suggests a maximum uncovered exposure of US$35M for Zenith, including the expected capex for workovers as well as for the new infill drilling programme starting in 2019 (Figure 5).
We note that the CPR assumes an oil price (WTI) of US$55 (2017) steadily rising up to US$85 (2023) with an 2% pa. inflation afterwards. We consider these assumptions as reasonable; however, they do not take into account a potentially lower price environment which could result in a potentially larger uncovered exposure.
To date, Zenith has managed to finance the initial workover programme using a mixture of equity and debt (vendor financing). We believe the use of its own equipment is a positive step towards reducing the total investment required to carry out the work programme. However, we believe that the quantum of investment estimated for the period 2018-2021 will require management to come up soon with a robust medium-term financing solution.
No doubt that further success in the redevelopment of the fields and raising production levels should provide comfort on reserves and cash flow estimates, opening additional and material financing avenues for Zenith.
The main risks are potential delays as when re-entering old wells, it is often impossible to predict the exact conditions of the casing and what kinds of metal debris may be found, especially when dealing with 'Soviet era' drilling and completion techniques. Delays would create volatility in the share price and could complicate the raising of new equity. It could also lower the credibility of the operational team making it more difficult to raise debt financing on competitive terms.
In terms of equity financing, following the recent issue of equity the Company has reached the threshold under the Prospectus Regulation to issue equity without the requirement for a prospectus, for the year 2017.
On 5 June 2013, Zenith Energy completed the acquisition of various interests in 13 Italian producing and exploration properties. The assets comprise six operated onshore gas production concessions, three non-operated onshore gas production concessions, an operated exploration permit, a non-operated exploration permit and two exploration permit applications.
On 1 October 2015, the Company acquired co-generation equipment and facilities from the owner of a plant that treats gas from the Masseria Vincelli 1 well in the Torrente Cigno concession in Italy. The acquisition has enabled the Company to produce electricity from the gas produced by the Masseria Vincelli 1 well which it sells directly into the national energy grid in Italy (Figure 6).
Overall, a Competent Person’s Report (31/8/16) estimated Zenith’s share of estimated total proved plus probable natural gas reserves at the Lucera, Misano Adriatico, San Mauro and Torrente Cigno concessions at 16.6 BCF with net condensate reserves of 0.1 MMbbl. Zenith also conducted in-depth geological, geophysical and engineering evaluations for some of the Group’s Italian properties not reported on in the CPR (the Torrente Vulgano, San Teodoro, Masseria Petrilli and Masseria Grottavecchia concessions) in order to identify and plan appropriate development activities at the relevant concessions.
In particular, Zenith has key development plans for the San Teodoro and Masseria Petrilli concessions, which are not currently in production and where projects are ongoing to enable drilling for gas at the “Macchia Nuova” structure. It is also intended that improvements of facilities at San Teodoro will be completed by the tie-in of new dehydration equipment. While the field has been capable of production, a lack of regional infrastructure limited additional expansion in the past. In December 2014, Zenith reached an agreement with a successful retail marketer of natural gas within Italy to handle production from this field, which is anticipated to restart production in June 2018.
Production from the existing wellbore is expected to start at 3,000 m3/day, i.e. 106 mscf/d or 18 boe/d, increasing Zenith’s current production in Italy by 25%, to over 100 boe/d. Costs of the refurbishment and commencing production at the concession are anticipated to be approximately €300,000 (GBP 256,050) and will be paid through an equipment leasing facility. The Company intends to allocate GBP £128,025 (€150,000) from the Net Proceeds towards the development plans at this concession.
The Company is also evaluating the possibility of drilling a deviated well into the crestal area of the Torrente Salsola structure at the Masseria Petrilli concession, where the Company has a 50% working interest, in order to unlock residual reserves. The plans at both concessions envisage a limited amount of capital expenditure in order to increase Zenith’s gas production in Italy and to achieve a good level of profitability. The Company has an ambitious programme to enhance the Italian daily gas production rate in the Puglia Region by 100% through a technical programme employing additional workovers.
In addition, submission of extensive environmental reports relating to the commencement of production of the Torrente Vulgano gas property has been completed and preliminary approval has been received. The Company is now looking to commence production at these wells following receipt of final approval. Production of natural gas from the Torrente Vulgano property is now expected to commence in the next three years.
Separately, the Company is planning to implement an innovative plan for the exploitation of the Traetta 1 well in the Masseria Grottavecchia concession (where the Company has a 20% working interest) through the sweetening of the produced gas so that it can be sold through the national pipeline grid. This development plan was recently submitted to the relevant ministry in Italy, for its review and approval. The Company estimates that approval should be received by April 2018.
We value Zenith at 41p (C$0.66) per share using a combination of sum-of-the-parts (SOTP) valuation (36p) and Enterprise Value (EV) multiple valuation (46p) based on a peer group comparison. This valuation represents a substantial upside versus current share price, an upside not without significant risks attached as highlighted at the end of this section.
For our SOTP valuation, we arrived at an EV by using the estimated NPV10 values provided in the CPR (31/8/16) for various reserves categories in Azerbaijan and Italy, and we adjusted these values for the chance of success (COS) attached to each reserves category.
The EV was then adjusted with Net Debt and Capitalised Corporate Costs to arrive at a Risked value. Our final Diluted risked value, on which our valuation is based, takes into account the dilution that could theoretically occur by closing the equity gap of US$35M we identified from our analysis of Free cash flows in the CPR, by raising equity at current share price (Figure 7).
For our EV multiple valuation, we selected a peer group of 16 oil and gas companies of similar size as Zenith in terms of either market capitalisation and/or 2P reserves. These companies are listed predominantly in London (12), with others listed in North America or Australia.
We observe that EV/2P values for the peer group are spread within a wide range of 0.2-9.6 US$/boe, which is not unusual given the inherent diversity of companieswithin the group, and we calculate a median value of 4.1 (Figure 8).
The low bound of the EV/2P multiple range (0.25) equates to a value for Zenith of about 5.7p, whilst Zenith’s current share price equates to an implied EV/2P multiple of 0.40.
We arrive at a valuation of 45p, based on the median value of the range which equates to a value of 91p and subsequently discounting it by 50% to account for the financing as well as execution risks inherent in Zenith, which might not be the case for some of the companies within the peer group.
Our value estimate of 41p (C$0.66) is based on the average of SOTP and multiple based valuations.
The risks attached to this valuation are the uncertainty regarding the reserves estimates, the ability of the operational and management team to deliver these reserves through increasing production, and finally the ability of management to raise the capital necessary to execute the work programme in a context of an uncertain and potentially weaker oil price environment.
Azerbaijan has been at the forefront of the petroleum industry since oil and gas production commenced along the Caspian Sea in 1846. The South Caspian Basin encompasses the southern extension of the Caspian Sea, including land areas in eastern Azerbaijan, western Turkmenistan, and northern Iran. The region is endowed with abundant petroleum resources, and oil and gas production has played an important commercial role in the region for more than 150 years, especially in Azerbaijan and to a lesser extent in Turkmenistan. Major oil reserves are concentrated in 2,500-3,500 m of shallow-marine, deltaic to lacustrine deposits of middle Pliocene age.
The Kura Basin, a western sub-basin of the South Caspian Basin, is a Cenozoic inter-montane basin located between the predominantly carbonate rocks of the Greater Caucasus Mountains to the north and the volcanic rocks of the Lesser Caucasus Mountains to the south. The Kura Basin was shaped by the collision, accretion and rotation that took place between broadly the Eastern European Platform and the Arabian Plate and merges into the South Caspian Basin to the East (Figure 9).
1. Lucera gas concession
Zenith owns a 13.6% interest in a licence covering ca. 38,514 acres in onshore Italy and producing gas at rates of 531 mscf/d. Gas resources are located in the Cenozoic/Upper Tertiary Pliocene sands of the Bradano Through, with gross proved developed producing gas reserves of 826 MMscf for the 2 producing wells and gross probable developed producing gas reserves of 197 MMscf for same 2 wells, assuming a lesser decline rate.
The CPR estimates an NPV10 of US$125k, using a gas price of $3.91/mscf (87% of World Bank European posted gas price), Opex of $6000/well/month plus $1.86/mscf.
2. Misano Adriatico gas concession
Zenith owns a 100% interest in a licence which covers 18,610 acres and is due to expire in 2020 but with an extension expected to be granted based on remaining reserves. The only producing well Misano-2 is currently flowing 45 MMscf/d of gas. Gas resources are located in Pliocene sands, with gross proved developed of 112 MMscf for one producing well and gross probable developed of 61 MMscf using a lesser decline rate.
The CPR estimates an NPV10 of US$347k, using a gas price of $4.94/mscf (110% of World Bank European posted gas price), Opex of $1200/well/month plus $1/mscf.
3. San Mauro gas concession
Zenith owns a 18% interest a licence which covers 6,257 acres and is due to expire in 2020 but with an extension expected to be granted based on remaining reserves. Current gas production is 180 mscf/d. Gas resources are located in the Upper Pliocene, with gross proved producing gas reserves of 588 MMscf for the one producing well plus gross probable reserves of 391 MMscf using lesser decline for same well.
The CPR estimates an NPV10 of US$56k, using a gas price of $3.91/mscf (87% of World Bank European posted gas price), Opex of $5000/well/month plus $2.3/mscf.
4. Torente Cigno gas concession
Zenith owns a 45% interest in a licence which covers 38,163 acres and is due to expire in 2020 but with an extension expected to be granted based on remaining reserves. The Masseria Vincelli-1 well is currently producing 450 mscf/d into a 1.4 MWh electrical facility at a 6-year plateau. Gas resources are located in sub-cropping carbonates below a significant base Pliocene unconformity. Gross proved producing gas reserves are estimated at 1259 MMscf for the one producing well with 19 mbbl of condensates plus gross probable developed producing reserves of 1439 MMscf for same well and 22 mbbl condensatesusing an improved drainage area.
Some 13413 MMscf of gas and 202 mbbl condensates are estimated for a potential offset horizontal well (MV-2) to be drilled 2017, in order to maintain plateau production into the electrical facility. Zenith has a 100% working interest in the electrical generation facility which utilises gas from the concession. The partner’s gas is purchased at the gate of the facility.
The CPR estimates an NPV10 of US$1.2M, using a gas price of $1.45/mscf, with $0.66/mscf deduction for partner’s share of the gas, and condensates sold at $46.92/bbl, with partner’s share sold independently. Opex of $4700/well/month plus $0.36/mscf.
Zenith’s share of estimated total proved plus probable natural gas net reserves, relating to the Torrente Cigno, Misano Adriatico, Lucera and San Mauro concessions, were assessed at 16,594 MMscf and condensate net reserves were assessed at 109 MMbbl (CPR, 31/8/16).
Andrea Cattaneo (President & CEO, Executive Director)
Oil entrepreneur and government advisor with specific expertise in former Soviet Union Countries, Mr Cattaneo has an Energy resources and financial background, including 30 years of experience in in sovereign loans, capital markets, and oil trading between Western and emerging countries. His expertise extends also to structuring contracts on international markets and the oil industry. In 1986, he arranged the first convertible currency loan in the history of the Socialist Republic of Vietnam in the wake of the Vietnam War. Mr Cattaneo is a past member of the Business Advisory Council of the Greater Tumen Initiative, a UN Development Programme project that involved China, North Korea, South Korea, Mongolia and Russia. He is a partner of the Bolsa de Comercio de Buenos Aires (BCBA), or Buenos Aires Stock Exchange. In 2007, he organized the first worldwide exhibition of North Korean art in Genoa, Italy. Mr Cattaneo holds an undergraduate degree in Economics from the University of Genoa and a postgraduate degree in Taxation Law from the University of Bologna. He holds 2,647,485 common shares representing 2.13% of total shares in issue.
Dr. José Ramón López-Portillo (Non-Executive Chairman)
Dr. López-Portillo is former a former Mexican Ambassador to FAO (Food and Agricolutre Organisation) of the United Nations and a former Minister in the Mexican Federal Government. He then became Chairman of the FAO Council for two terms (10 years). He is also a leading researcher on energy security of Mexico and a Founder of the Centre for Mexican Studies at the University of Oxford. Dr. López-Portillo read economics at Universidad Anahuac and holds a doctorate in political science and international relations from the University of Oxford.
Luca Benedetto (CFO)
Mr Benedetto trained in Italy as a registered accountant with further education in IFRS accounting and consolidation at IPSOA Milan. He has more than 25 years of accounting, auditing and financial administration experience.
Luigi Regis Milano (Executive Director, MD Italian operations)
Mr Milano has a strong background in the field of petroleum chemistry. During the last 20 years, he has been the executive director of a large trading company, specialising in crude oil and petroleum products. He also has been the executive director of a large European refinery. Mr Milano has more than 35 years of oil industry experience, was a former Director of Autostrada dei Fiori S.p.A., a company listed on the Milan Stock Exchange. He is currently Director/owner of DP Lubrificanti S.r.l., a bio-diesel refinery based in Italy.
Dr. Dario Sodero (Non-Executive Director and Senior Geologist)
Dr Sodero is Zenith’s Senior Geologist due to his strong geological, exploration and technical expertise and holds a doctorate in Geological Sciences from the University of Turin, Italy. He is an experienced energy industry executive with 35 years of operational experience in North America, the Sub-Arctic, North Africa and the Middle East. Dr Sodero is a Director and Senior Vice-President of Rockbridge Resources Inc., a TSX Venture Exchange listed oil and natural gas company. He is a former director and executive of several other TSX and TSX-V listed oil exploration and production companies, and also a former Alpini Officer in the Italian Army.
Erik Sture Larre Jr (Non-Executive Director, Chairman Audit Committee)
Mr Larre is a Norwegian national with strong expertise in real estate, banking and financial matters in addition to involvement in the oil & gas industry. He has considerable business experience in Southern and Eastern Europe and the Middle East. He also served as Chairman of the Audit Committee of SpareBank 1 Nord-Norge and Deputy Chairman of the Bank. Mr Larre Holds a Master degree in Civil Engineering from the University of Milan, Italy.
Saadallah Al-Fathi (Non-Executive Director)
Mr Al-Fathi served as Head of the Energy Studies Department, Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria as well as OPEC Representative to the Executive Council of the World Energy Council and Member of its Studies and Developing Countries Committee. Following these high-profile institutional positions, he has served as an advisor to several government and private entities and has also established himself as an award-winning oil and gas industry researcher and columnist. Mr. Al-Fathi has authored a number of research papers on the oil & gas sector and was recently joint winner of the 2016 scientific research award of the Organization of the Arab Petroleum Exporting Countries.
Sergey Borovskiy (Non-Executive Director)
Mr Borovskiy has over 25 years of experience in business management in China and Hong Kong. He has lived and worked in China since 1991 and is fluent in Russian, English and Mandarin. Mr Borovskiy is CEO of Sanju Environmental Protection (Hong Kong) Limited, overseeing the international projects of controlling shareholder Sanju Group, a company specialised in energy purification and environmental protection technologies listed on the Shenzen Stock Exchange. He is CEO and Chairman of General Transactions Inc., an oil & gas consulting, engineering, trading, seismic research and exploration services company. He also serves as Chairman of the Board of Directors at Petro Chemical Solutions and South China Heavy Industries Group. Mr Borovskiy studied in both China and Russia and holds a degree in economics.
Michael Palmer (COO, Zenith Aran)
Mr Palmer is an American citizen and is based in Baku. He has 37 years of experience in the oil industry. He has worked in the United States, Gabon, Russia, Kazakhstan, Tajikistan, Azerbaijan, Ukraine, Belize, Hungary, Syria, Indonesia, and Guinea. His most important achievements include leading Karasu Operating Company in Azerbaijan. Under his management of this onshore field, operated in a Production Sharing Agreement with SOCAR, production increased from approximately 500 BOPD to 7500 BOPD. Following this success, he worked in Kazakhstan where he led Karazhanbasmunai and increased production from 4000 BOPD to over 50,000 BOPD before the company was sold to a Chinese international energy production company.
Zaur Hajizade (Deputy General Director, Zenith Aran)
Mr Hajizade is a geologist with 30 years of experience in oil and gas production in Azerbaijan, Libya and Colombia. He has held senior management positions at BP, ENI international, Equion Energia and joined Zenith in 2016 from SOCAR (State Oil Company of the Azerbaijan Republic).
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