1. Define the goal
“There’s not much opportunity at a law firm to see … the outcomes of your influence, and I wanted that,” says Tina Antony, general counsel and vice president of legal for Caracal Energy, a Canadian international oil-exploration and oil-development company active in the Republic of Chad.
Antony certainly got what she wanted: after practicing at various law firms for 18 years, much of that time as a partner, she joined fledgling Caracal in December 2012. Her starting position there was a new one in a new department, but she adjusted to it and today has skilled contract specialists in Calgary and N’djamena reporting to her, and she also directs a number of external advisors on three continents.
She considers herself lucky to work with an incredible group of people. “I’m fortunate to have this opportunity in a developing country, on a new and massive project, under a new production-sharing regime,” she says.
2. Accept the challenge
“Chad is a true frontier, and that presents a huge opportunity but also a huge challenge and responsibility,” Antony says. The landlocked country of approximately 10.8 million people in central Africa is one of the poorest in the world, most of its inhabitants subsiding as herders and farmers. There is so little infrastructure, in fact, that, to date, Caracal has spent approximately $1 billion of its own money in budgeted expenditures there. But there is renewed hope for change thanks to the oil industry, which has superseded cotton as the country’s largest export.
3. Understand the target region’s history
Chad began efforts to develop its oil resources in 1969, and in 1988 an agreement granted a consortium of petroleum companies 30 years to develop the oil fields at Doba in the southern part of the country. Construction began in 2000, and oil production began in late 2003. By the end of 2010, Chad had exported 376 million barrels of crude to various world markets, and its average daily production that year was 122,500 barrels.
In 2011, Caracal signed three production-sharing contracts with Chad. The contracts specify how the country’s hydrocarbons can be explored for and extracted and exactly how the oil will be shared between Caracal, the government of Chad, and their partners.
How Are You Growing?
“Lawyers often have a narrow view of the world, but I try to be more expansive by keeping a strategic view of how to execute on a project. And that’s what helps the company grow.” —Tina Antony, General Counsel & VP of Legal
4. Negotiate the terms
At the time it entered the country, Caracal was the first independent, third-party oil company working in Chad under the new production-sharing contract regime, so it had to work closely with a number of parties. The existing consortium had already built a pipeline to carry oil across Chad and through Cameroon to a marine shipping terminal 11 kilometres off the coast, near Kribi, and Caracal had to commence production within a short time frame and connect to that pipeline. It also had to build out an entire oil-extraction infrastructure, and that involved additional contracts with the government of Chad and with the numerous contractors needed to build roads and drill wells, most of whom had not worked in the country.
The infrastructure build-out took a lot of money, requiring Antony to oversee the company’s listing on the London Stock Exchange and a $200 million offering. Additionally, after Caracal began production and had processed its first 560,000 barrels in 2013, she handled two mergers: the first was with Transglobe Energy Corporation, and the second was with Glencore International just a few weeks later. “While we had just announced a merger with Transglobe Energy Corporation to expand into Egypt, Glencore International made a better offer,” Antony says. “This is a fast-paced game; the things we are achieving are world-class.”
5. Reap the rewards
Today, the company has 13 wells in Chad, and in 2013 its average gross field production was 11,799 barrels per day. But that’s only a drop in the bucket, considering that the company has 47.4 million barrels of proven oil reserves in total (a number that increases to 388.6 million barrels if you count probable and possible reserves, called 2P and 3P in industry jargon).
In April 2014, Glencore Xstrata PLC, a global commodities, trading, and mining group, agreed to buy Caracal in a joint venture for about $1.8 billion in cash. Though the deal is dependent both on two-thirds of Caracal’s shareholders voting in favour of the acquisition and on approval from Canadian regulators, it represents the significant value Caracal has generated for its shareholders since its inception. “I’ve been fortunate to have been a part of something that’s this new and so great,” Antony says.