Biden Administration To Purchase More Oil For Spr
The Department of Energy’s Office of Petroleum Reserves has announced a solicitation for the purchase of up to 3 million barrels of crude oil for the nation’s Strategic Petroleum Reserves (SPR), the agency said in a Wednesday press release.
The solicitation is for as many as 3 million barrels of crude for delivery into the SPR in April 2024, and will go towards replenishing the nearly 300 million barrels of crude oil sold off during the current administration, ostensibly to lower retail gasoline prices for U.S. drivers.
After selling hundreds of millions of barrels of crude oil when prices were high, the Administration laid out a plan to replenish the nation’s oil stockpiles whenever crude oil prices fell below $79 per barrel.
Brent is currently trading under $78 per barrel, with WTI trading below $72.
“Today’s announcement avances the President’s commitment to safeguard and replenish this critical energy security asset.
This follows his historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses.
Analysis from the Department of the Treasury indicates that SPR releases last year, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon,” the press release said in part.
Bids for the solicitation will be due on January 10, 2024.
Today’s announcement is just the latest in a string of small purchases intended to replenish the SPR—so far, about 14 million barrels in total.
The DOE must be careful to initiate its buybacks slowly enough so as to not cause oil prices to spike.
Source: Oilprice.com
Africa’s Natural Gas Sector Is Building Momentum In 2024
The recently signed liquefied natural gas (LNG) development project in South Africa’s Mpumalanga province is a promising step on the long road to Africa’s just energy transition.
The project, being jointly developed by Kinetic Energy of Australia and the Industrial Corporation of South Africa (IDC), a national development finance institution, will capitalize on Kinetic Energy’s recent 3.1 billion cubic feet natural gas discovery in Amersfoort, Mpumalanga.
The project is expected to produce 50 megawatts (MW) of equivalent energy and eventually expand to 500 MW.
The project, which Kinetic Energy describes as South Africa’s largest onshore LNG project, exemplifies natural gas’ potential to grow the country’s economy and meet domestic energy needs.
This all comes about as South Africa works to expand its oil and gas operations in order to curb its reliance on coal and help pave the way to eventual decarbonization.
South Africa is not alone, either. As the African Energy Chamber (AEC) covers in our recently released “The State of African Energy 2024 OutlookReport,” natural gas production is on the rise both globally and in Africa.
Even more promising, our report notes that “upstream operators are now revising their strategies and aligning their future investments more in line with energy transition, and natural gas is being looked at as transition fuel.”
The African Energy Chamber will support the Invest in African Energy Conference in Paris this year organise by Energy Capital and Power.
African Energy Week will definitely be the home of Natural Gas investment in Africa.
Gas: A Logical Transition Fuel
I find it heartening that, despite calls by environmental organizations and wealthy countries to cease investment in African oil and gas projects, many of the companies actually operating in Africa appear to recognize natural gas’ value as a transition fuel.
Too long has the solution to the climate crisis been oversimplified: Decarbonization is not a goal that can be reached overnight nor without first building up the infrastructure required to support development of renewables.
Such a task is relatively simple for Western countries, which have spent centuries building their economies and infrastructure off the backs of fossil fuels.
The same cannot be said for African states, which have long lacked these same development opportunities and must now play catch-up at an accelerated pace.
Even worse, we are told to play this game of catch-up with our hands tied: to leave our natural resources in the ground while the developed nations of the world continue to exploit their natural non-renewable wealth.
We are expected to jump straight to building wind farms, solar farms, and hydroelectric dams while hundreds of millions of Africans are still living without access to electricity.
Where will the capital for such a miraculous development come from?
Who will build the foundational infrastructure needed to support it?
Developed nations are quick to promise, “We will!” but reticent to follow through on their promises.
What’s more, their foreign “aid” has frequently focused more on alleviating the symptoms of Africa’s economic and energy poverty rather than resolving the source.
With all this in mind, it is clear to me who must provide the lion’s share of capital and build the infrastructure: Africans ourselves.
And we cannot do that without tapping our own natural resources, natural gas being the most vital among them.
Its properties that burn cleaner than oil and coal, its abundance, its ease of storage and transport, and its applications in manufacturing and synthesis make natural gas the best option for Africans to establish energy security and achieve decarbonization.
Companies Leading the Way
So, again, it is encouraging to see that the AEC is not alone in our stance that natural gas production makes sense for Africa — and for energy companies.
More and more energy companies describe policies that call for pursuing energy transition measures for tomorrow while providing the natural gas to power the world today.
Look at French major TotalEnergies, which is responsible for much of the upstream activity in our continent.
Following the discovery of two huge gas fields in South Africa in 2019 and 2020, TotalEnergies is continuing its exploration and production efforts there, despite environmentalists’ efforts to block further activity.
TotalEnergies also is driving the Mozambique LNG project, considered one of Africa’s most important hydrocarbon developments.
Then there’s German independent, Wintershall Dea, which is increasing its participation in the Reggane Nord natural gas project in Algeria by 4.5%.
The company is acquiring interest from Italian utility company Edison in the project.
Wintershall Dea, which has a strong presence in North Africa, also announced first gas with its partners (Cheiron Energy, INA, and the Egyptian Gas Holding Company) at the East Damanhur block in the onshore Nile Delta earlier this fall.
I love what Wintershall Dea’s CEO and Chief Operating Officer Dawn Summers wrote about natural gas in a November opinion piece, released just before the 2023 United Nations Climate Change Conference (COP28).
“At first glance, it would seem that the gas and oil industry is merely part of the climate problem — but it will also be part of the solution,” Summers wrote.
“If gas were used instead of coal, CO2 emissions would immediately go down — by almost half.
Already today, we are decreasing the environmental impact of our activities worldwide by drastically reducing our methane emissions.
In addition, with technologies such as CO2 storage and H2 production, we are helping other sectors to decarbonise, and we aim to harness our expertise to ensure that the future energy system is more sustainable.
In short, the oil and gas industry can, must and will be part of the solution to the climate problem.”
Well said! Africa’s gas industry is part of the solution as well.
And, as our report notes, the forecast for continued natural gas projects in our continent is looking good.
Africa’s Tremendous Natural Gas Potential
Our report finds that Africa continues to hold immense natural gas potential and is positioned to not only increase its outputs but also capitalize on the underserved LNG market and meet Europe’s ongoing demand.
Our estimates show an increase from Africa’s 2023 natural gas output of about 265 billion cubic meters (bcm) to over 280 bcm by 2025.
North Africa currently drives the majority of the continent’s output, although its production is expected to remain flat throughout the rest of the 2020s.
Production ramp-up is expected through the second half of this decade as Mozambique increases its LNG output.
As new-gas start-ups across the rest of the continent come online, this trend in increased output will become further pronounced.
Nigeria and Algeria, meanwhile, are expected to drive an increased focus on LNG exports, with additional flows coming from Egypt, Equatorial Guinea, Mozambique, and waters off Senegal- Mauritania.
Africa’s natural gas sector stands poised to prepare the entire continent for eventual decarbonization, as do many of the companies operating here.
The goal of a continent fueled by renewable power cannot be achieved, however, unless the developed world also recognizes this and allows African states to transition on their own schedule, not one imposed on it by others.
Source: https://energynewsafrica.com
Nigeria: Why Nigeria Has Budgeted N344 Billion For Power Sector In 2024
Nigeria has budgeted N344.10 billion (equivalent US$388,967,371.05) in 2024 to transform the country’s power sector to ensure regular power supply and also increase electricity access to unserved citizens.
Out of the budgeted amount, N336.88 billion will go into capital expenditure while the remaining N7.22 billion will go into recurrent expenditure.
The country hopes to introduce about 100 new power projects and continue with the 391 ongoing projects.
Africa’s largest economy has been struggling to keep the power sector running to keep the lights on.
With over 210 million people, it is sad to note that more than half of Nigerians do not have access to electricity supply from the national grid.
Nigeria has an energy generation capacity of about 13,000MW.
However, the country has been producing less power despite the high demand for power by industries and households.
The country’s current generation is around 4,000MW.
Nigerians have been unhappy about the situation and hope for a turnaround of the situation.
Speaking to Tunji Bolaji, Spokesperson for Chief Adebayo Adelabu, Minister for Power, he said President Bola Tinubu’s administration believes that one of the ways to further galvanise the economy is the provision of regular power supply to households and businesses in the country.
He said the current administration sees it as shameful that a country of over 200 million people is only transmitting and distributing about 4,000MW.
He said it is in line with the above that the Federal Government, through the Ministry of Power, is focusing on grid and off-grid power accessibility.
According to him, “Having mini-grids across communities in the country to serve the people like we recently had in Toro Community, Nasarawa State, where a hybrid-mini-grid was built to serve about 180,000 people in that community, is the focus of the current administration.
“We are also looking at building such mini-grids across some of our university communities, teaching hospitals and some underserved communities. Then, we are looking at renewable energy power generation across our zones. For our coastal areas, we are looking at wind energy, for our northern zones, we are looking at solar energy while in parts of the southwest and north-central where we have rivers, efforts would be on generating hydropower of about 500 kilowatts to five megawatts.
“When one takes the totality of all these, it would look as if we are starting from scratch.
“But for economic growth and industrial development, this is necessary,” he concluded.
Meanwhile, taking to X, formerly Twitter, after President Bola Ahmed Tinubu’s New Year message, Minister Adebayo Adelabu noted that the Ministry of Power and its agencies worked tirelessly to keep the lights on during the festive season.
“Our focus is now on taking decisive action to address critical challenges in the electricity sector.
“The initial three months involved diagnosis, stakeholder consultation, and strategy formulation. With a well-documented implementation plan in place, it’s now time to take decisive action targeted at enhancing distribution and transmission infrastructures,” he said.
Liquidity Challenge
According to him, the lack of liquidity remains a significant challenge in the electricity market saying, “We’re reviewing the implementation process of a cost-reflective tariff, while ensuring continued government subsidy for vulnerable members of society.”
Minister Adebayo also said closing the meter gap is imperative, and initiatives like the World Bank programmes and the Presidential Metering Initiatives would gain momentum in 2024.
He said his Ministry would intervene in distribution infrastructure, supplying transformers to communities without burdening citizens financially.
He added that rural electrification is also a priority, saying the Ministry would be focusing on solar-powered mini/micro-grids and street lights.
Transmission Infrastructure
On improving transmission infrastructure, the Minister said, “We’ve reactivated the Presidential Power Initiative (Siemens Project) to strengthen the national grid adding that Eastern and Western super grid projects will also be implemented to increase electricity supply to demand centers.”
Minister Adebayo Adelabu also disclosed that the Transmission Company of Nigeria would be reconstituted in the short term, separating Transmission services from System/Market operations.
In the medium to long term, regional grids would be established for effective management.
Power Theft And Vandalism
The Minister said tackling power theft and vandalism is paramount.
“We’ve informed the NSA of recorded cases, emphasising the need for joint efforts to protect our assets. This national responsibility requires collective action to eliminate setbacks,” he said
“As we embark on this transformative journey to bolster Nigeria’s electricity sector, we appreciate the collective effort of all stakeholders. Our commitment is unwavering, and we’re dedicated to overcoming challenges to ensure a reliable and sustainable power supply. The path ahead requires collaboration, and we urge citizens, Discos, State Electricity Boards, and private entities to join hands in achieving our shared goal. Together, we can create a resilient power infrastructure that propels economic growth and improves the lives of all Nigerians,” he stated.
Source: https://energynewsafrica.com
Ukraine’s Strategic Gas Storage Capacity Eases Europe’s Winter Worries
European companies have been relying more on Ukrainian storage to hold natural gas and withdraw it from there once winter heating demand rose.
Firms based in Europe have been withdrawing larger volumes of gas from Ukraine in recent weeks, per data from Argus Media reported by the Financial Times on Tuesday.
Larger volumes of natural gas stored in Ukraine have helped European natural gas storage levels to keep between 85% and 90% so far this winter, analysts say.
“Ukraine is playing a key role for central and eastern Europe’s security of gas supply this winter,” Natasha Fielding, Argus Media’s head of European gas pricing, told FT.
European demand has been subdued in recent months due to slowing economic activity, but Europe still needs a lot of natural gas for space heating and power generation.
The EU reached its target to fill sites to 90% of capacity months ahead of the deadline on November 1, and hit full storage levels ahead of winter season proper.
So, energy firms have been storing growing volumes of natural gas in Ukraine’s storage facilities as the EU’s sites were nearing capacity.
Despite risks of potential hits due to the war, traders have started to store natural gas at storage sites in Ukraine, taking advantage of the lower costs and high available storage capacity. The commodity can be bought anywhere and sent to Ukraine via reverse flows in pipelines from Hungary, Slovakia, and Poland.
With the EU storage nearly full, Ukraine’s available capacity could help the bloc ease gas supply concerns ahead of the winter, Brussels-based think tank Bruegel said in an analysis in July.
In October, Ukraine’s Prime Minister Denys Shmyhal said that the country was ready to allow non-resident traders to use up to half of its natural gas storage capacity.
Ukraine has 30 billion cubic meters (bcm) of underground storage capacity. As much as 12 to 15 bcm of this capacity could be allowed to be used by foreign traders to store gas, according to the prime minister.
Source: Oilprice.com
Ghana: NPA Turns Away Vessel Carrying 31,100 Tonnes Of Gasoline With High Level Of Manganese
Ghana’s petroleum downstream regulator, the National Petroleum Authority (NPA), turned away an oil vessel named GH-Austin, which was carrying 31.1 tonnes of gasoline laden with a high level of manganese from discharging and selling the product on the Ghanaian market.
It is not known where the gasoline was imported from but the regulator, at a media briefing in Accra, said it asked the importer to go and sell the product elsewhere since the manganese level was very high.
The action of the regulator was borne out of the recent concerns by some vehicle owners that they were frequently changing their car spark plugs due to what they suspect to be low-quality fuel being sold by some filling stations, especially in the capital, Accra.
Speaking to a section of journalists in Accra, the Chief Executive of NPA, Dr Mustapha Abdul-Hamid, said his outfit, in collaboration with the Ghana Standards Authority (GSA), reviewed the national standards which reduced the maximum allowable manganese level in regular gasoline from 18 milligrams per litre to six milligrams per litre and premium gasoline grade from 18 milligrams to two milligrams per litre.
Dr Mustapha Abdul-Hamid stated categorically that any imported products that failed to meet the revised standard would not be allowed into the country.
Source: https://energynewsafrica.com
Equatorial Guinea Reaffirms Commitment To OPEC, Urges Others To Join The Cartel
Equatorial Guinea has reaffirmed its commitment and cooperation to the ideals and objectives of the Organization of the Petroleum Exporting Countries (OPEC) and has called on other oil-producing nations to join the group to fight for common interest amidst the threat posed by energy transition.
Equatorial Guinea joined OPEC in 2017 and its Minister for Mines and Hydrocarbons, H.E. Antonio Oburu Ondo, is the current President of OPEC.
Last week, Africa’s second-largest oil producer and OPEC member, Angola, announced its decision to withdraw from the cartel by January 1, 2024, claiming that the group is not serving the interest of Angola.
There have been mixed reactions following Angola’s decision to withdraw from the group.
Speaking few days after the news broke about Angola’s decision to withdraw from OPEC, the President of OPEC and Equatorial Guinean Minister for Mines and Hydrocarbons, H.E. Antonio Oburu Ondo, noted that the challenge of the energy transition requires a strong organisation such as OPEC/OPEC+ that promotes a pragmatic balance about the debate and proposal of solutions that take into account the condition of producers (and their peoples) with less advanced economies and less diversified production structures.
“This pragmatic balance, which implies international acknowledgment of all positioning and interests involved concerning the energy transition, can only be achieved through the existence of structures or organizations willing to depolarize the structure of advantages in the current energy transition scenario.
“The Republic of Equatorial Guinea not only believes in the role of OPEC/OPEC+ in this regard but will continue to be an important force for the continuity of such a role of OPEC/OPEC+.
“To attain better stages in terms of influence, development and economic certainty, the Republic of Equatorial Guinea invites eligible countries to be part of the vision of this great organization,” he said.
Continuing, H.E Ondo said, “Market certainty is an essential factor about the ability to succeed in economic planning or to keep producing or to be disciplined with regards to production projects. The only important factor in achieving all of the above is the stability of markets. This is what OPEC/OPEC+ embodies and this is the position of the Republic of Equatorial Guinea.”
He added that the commitment to the common goals of OPEC/OPEC+ and the common responsibility of OPEC/OPEC+ to create certainty in the improvement of people’s living are values that are implemented only through collective effort.
“The Republic of Equatorial Guinea is not only re-affirming its commitment to OPEC Membership and the values and objectives of OPEC+ but there is a need for economic logic to assert ourselves for the promotion of these objectives, as attested within the organization through the fulfillment of our commitments,” H.E Ondo said.
Source: https://energynewsafrica.com
Ghana: GNPC Deputy CEO Woos Krobos Living Abroad To Support Home
The Deputy Chief Executive Officer in charge of Finance and Administration at the Ghana National Petroleum Corporation (GNPC), Benjamin Kwaku Acolatse Esq, has charged indigenes of Yilo Krobo in the Eastern Region, who are seeking greener pastures elsewhere, to look back and contribute their quota to improve social life and infrastructural development of their home.
According to him, the government alone cannot provide social amenities in the area, stressing that “as natives both home and away, we can contribute our quota to develop the Yilo State.”
Mr. Acolatse noted that some youth in the area who obtained good grades in junior and senior high schools and want to pursue higher education are still at home because of financial constraints, stating that “we can come together and support them.
“When you get to a certain level in life, you have to contribute to developing your country and where you were born. You noticed that there are youth who obtained 7As but are still at home because there is no one to support them to pursue higher education. We need to support them,” Mr Acolatse said when he addressed the people of Yilo Krobo during their 2nd Annual Yilo State Homecoming Summit organised by the Yilo Krobo Municipal Assembly.
“I am not saying don’t support the development of where you are living. What I’m saying is that whatever you are doing over there, channel some back home,” he advised.
The theme for the summit was: ‘Celebrating Our Modest Achievements’.
He stressed the need to set up an educational fund to support needy but brilliant students in the Yilo Krobo state.
As a native of the land, Mr. Acolatse called for unity among Krobos and other settlers in the area.
He encouraged Krobos not to shy away from properly identifying themselves as natives of Krobo land and projects the rich culture of the area wherever they find themselves.
In attendance at the summit were the Municipal Chief Executive Officer, Hon. Eric Tetteh, the Member of Parliament Hon. Albert Tetteh Nyakotey and the chiefs of Krobo lands
Source: https://energynewsafrica.com
Liberia: Fuel Tanker Explosion Kills More Than 40 People
More than 40 people have died after a tanker carrying gasoline (petrol) overturned and exploded in Totota, Bong County, in central Liberia, on Tuesday, December 26, 2023,
The incident occurred along a road in Totota, about 130km (80 miles) from the capital, Monrovia.
Liberia’s Chief Medical Officer, Francis Kateh who disclosed this on Wednesday to newsmen said it was difficult to determine the number of deaths but estimated the deaths to be about 40 people.
Dr. Kateh revealed that a pregnant woman was among the dead, adding that some of the bodies were burnt to ashes.
He told local broadcaster Super Bongese TV that more than 83 people have been admitted to the hospital after sustaining various degrees of injuries following the incident.
Patients with more serious injuries had been transferred to hospitals in Monrovia for treatment, Dr. Kateh added as carried by BBC.
Police had earlier put the death toll at 15 and said that at least 30 others were injured as locals gathered at the scene.
“There were lots of people that got burned,” said Prince B Mulbah, deputy inspector-general for the Liberia National Police.
The cause of the crash is not yet clear.
Eyewitnesses account suggests that the tanker burst into flames soon after people rushed to the site to scoop fuel from the tanker.
Video footage shows that a large number of people, including children, had gathered around the tanker after it overturned.
An eyewitness from Totota, Aaron Massaquoi, told AFP that “people climbed all on top of the truck taking the gas, while some of them had irons hitting the tanker for it to burst for them to get gas.
“People were all around the truck and the driver of the truck told them that the gas that was spilling they could take that … but some people were even using screwdrivers to pit holes on the tank”.
Some had buckets and jerrycans and others were on top of the tanker when it burst into flames.
Liberia’s President George Weah has expressed his condolences to the families of the dead, saying he found images of the tragedy “deeply disturbing”, his office said.
Mr Weah has given the health authorities his “full backing to beef up manpower and equipment where necessary in their frantic effort to save lives”, the statement adds
Source: https://energynewsafrica.com
Dr. Kateh revealed that a pregnant woman was among the dead, adding that some of the bodies were burnt to ashes.
He told local broadcaster Super Bongese TV that more than 83 people have been admitted to the hospital after sustaining various degrees of injuries following the incident.
Patients with more serious injuries had been transferred to hospitals in Monrovia for treatment, Dr. Kateh added as carried by BBC.
Police had earlier put the death toll at 15 and said that at least 30 others were injured as locals gathered at the scene.
“There were lots of people that got burned,” said Prince B Mulbah, deputy inspector-general for the Liberia National Police.
The cause of the crash is not yet clear.
Eyewitnesses account suggests that the tanker burst into flames soon after people rushed to the site to scoop fuel from the tanker.
Video footage shows that a large number of people, including children, had gathered around the tanker after it overturned.
An eyewitness from Totota, Aaron Massaquoi, told AFP that “people climbed all on top of the truck taking the gas, while some of them had irons hitting the tanker for it to burst for them to get gas.
“People were all around the truck and the driver of the truck told them that the gas that was spilling they could take that … but some people were even using screwdrivers to pit holes on the tank”.
Some had buckets and jerrycans and others were on top of the tanker when it burst into flames.
Liberia’s President George Weah has expressed his condolences to the families of the dead, saying he found images of the tragedy “deeply disturbing”, his office said.
Mr Weah has given the health authorities his “full backing to beef up manpower and equipment where necessary in their frantic effort to save lives”, the statement adds
Source: https://energynewsafrica.com Angola Officially Leaves OPEC On Jan 1, 2024
Angola has officially written to the Organisation of the Petroleum Exporting Countries (OPEC) to withdraw from the cartel effective January 1, 2024.
This was contained in a statement issued by the Ministry for Mineral Resources, Oil and Gas.
Africa’s second-largest oil producer announced its intention to withdraw from OPEC last Thursday, December 21, 2023, at a meeting of the Council of Ministers chaired by the Angolan President,João Lourenço without formal communication to the cartel.
When this portal contacted OPEC, the group said they did not receive any official communication from Angola, explaining that they only heard the news from some news outlets.
However, the Ministry of Minerals, Oil and Gas in a statement said communication was sent to the OPEC Secretary General, Haitham al-Ghais, to formalise Angola’s decision to stop being a member of the intergovernmental organisation.
“The Government of Angola announces its decision to withdraw from the Organisation of the Petroleum Exporting Countries, with effect from 1 January 2024, under the terms of Presidential Decree 233/23, of 21 December,” MIREMPT said in a statement.
The Angolan government thanked the Organisation for the support it had given to its member countries and wished it well in carrying out its work for the stability of the oil market.
Angola has been a member of the Organisation of the Petroleum Oil Exporting Countries for more than 16 years and has fully complied with all the obligations owed to the organisation, as well as sharing in the efforts that the signatory countries of the OPEC and Non-OPEC Declaration of Cooperation (OPEC+) have made to stabilize the international oil market.
Minister Diamantino Azevedo explained that the decision “was not taken unanimously and went against Angola’s position, so the Angolan government reiterated and maintained its proposal to produce 1.180 million barrels of crude oil per day by 2024.”
Source: https://energynewsafrica.com
Angola, DRC Sign Oil Exploration Sharing Contract
Angola and the Democratic Republic of Congo (DRC) have signed a contract to share oil production in Block 14/22, which is located in an Area of Mutual Interest (AMI).
The historic contract comes 20 years after negotiations between the two countries.
According to a report by Angolan News Agency, the deal was signed by Diamantino de Azevedo, Angola’s Minister for Mineral Resources, Oil and Gas, and Didier Ntubuanga, the DRC Minister for Hydrocarbons.
The AMI which was created in 2007 would be operated by the Cabinda Gulf Oil Company Limited (CABGOC), Chevron’s subsidiary in Angola, with a 31 per cent stake, while Azule Energy, a British oil company (BP), and the Italian oil company ENI (20%), in a joint venture, ETU Energias (20%), the Portuguese energy company (GALP) (9%), Sonangol (10%) and Sonahydroc SA (10%) are the consortiums for this offshore block.
According to Diamantino Azevedo, the agreement demonstrates the realisation of a negotiation process that had been going on for 20 years, with the commitment of the government authorities of both countries.
“It’s not important to look at what has gone less well over the years, but it is necessary to look at the present and the future that is expected to be good for the economy of Angola and the DRC, contributing to improving the quality of life of their respective populations,” he emphasised.
He added that the sharing of oil exploration between the two countries is an example to demonstrate that African governments can carry out joint projects and, consequently, contribute to the economic cohesion of the continent.
He, therefore, hoped that the respective governments and the companies involved would work together to take better advantage of the AMI and compensate for the efforts made so far by producing sustainable oil and gas based on reducing atmospheric gases.
Diamantino Azevedo said that the next step would be the research phase to assess the oil potential of the Area of Mutual Interest and proceed with the production process if there are positive indicators of mineral resources.
On his part, the DRC’s Minister for Hydrocarbons, Didier Ntubuanga, praised the efforts of the Heads of State of the two countries and the companies that have accepted the challenge of taking on the risk of investing in the AMI.
Source: https://energynewsafrica.com
Nigeria: Is Continuous Subsidy On Electricity Tariff Sustainable- Adegbemle Asks
Historically, Nigerian Government has been paying electricity subsidy to the Nigeria Electricity Supply Industry. This means that there is the Cost Reflective Tariff of supplying 1kWh (kilowatt hour), and the Allowed Tariff that consumers are “allowed” to pay. This variance, otherwise called “subsidy” has now turned into an elephant in the chinaware shop.
The subsidy is as a result of Government policy consideration on (a) Welfarism: To support social welfare of consumers who might not be able to pay the high True Cost of the service, (b) Economic Stability: Ensuring a stable and affordable energy supply is essential for economic development, and (c) Political: to mitigate possible social unrest and create political instability
Nigeria’s Federal Government, in 2020, with the introduction of Service Based Tariff, decided to phase out subsidy on Electricity tariff, because of the strain it was putting on Government finances, and inefficiencies it promoted in the energy sector.
You will recall that the Minister of Finance, Budgets and National Planning under President Muhammadu Buhari, Mrs. Zainab Ahmed, had said that the Federal Government had quietly removed all subsidies in the power sector with a plan to gradually end subsidies on petrol.
This was necessitated by the fact that payment of Subsidy, both on petrol and electricity, had become an albatross on Government finances. Between 2015 and 2020, the shortfall in allowed tariff reportedly stood at about N2.4 trillion, averaging N200 billion yearly, and in 2022 alone, over N600bn has been paid in subsidies, and it has been estimated to skyrocket to at least N1trillion alone in 2024.
The question now is: with the present state of Government finances, is payment of subsidy on Electricity tariff sustainable?
In 2022, the Nigeria Electricity Regulatory Commission (NERC) rolled out the Multi Year Tariff Order that gradually phases out subsidy so that Nigerians can start paying Cost Reflective Tariff. For instance, in the MYTO 2022, the Cost Reflective Tariff, on the average, should be N68.42 per kilowatt hour (kWh), while the Allowed Tariff the DisCos were to charge was N59.89/kWh. With this, the Federal Government provided N8.53/kWh as subsidy. Between January and March 2023 alone (Q1, 2023), the total subsidy of N52.7bn was paid to the 11 Discos.
The rationale behind the MYTO 2022, as approved by the regulators was premised on the fact that DisCos that are in highly urban centres are allowed to charge tariffs that are near cost reflective due to evidence of high purchasing power and high consumption level in those areas, indicating that they are high-income consumers while Discos that are in areas with low income consumers are allowed to charge lower Allowed Tariff, therefore paying higher subsidy.
This makes the subsidy regime to impact more on low income bracket of consumers.
It means people living in places under Abuja Disco, Ikeja Disco and Eko Disco were paying tariff that is nearly Cost Reflective, while people living in places under Benin Disco, Yola and Ibadan Disco are paying much less
An example, as seen in the NERC Q1 Report shows that Eko Disco’s Cost Reflective Tariff was put at N62.04/kWh and the Allowed Tariff (AT) was N59.49/kWh, making the variance, or subsidy paid to Eko Disco just N2.55/kWh, totalling about N2.04bn. Similarly, for Abuja Disco, Cost Reflective Tariff was N65.67/kWh, and Allowed Tariff was N63.24/kWh, variance just being N2.43/kWh, again total of N2.15bn was paid in Subsidy to AEDC.
The reverse was the case in places like Yola, for instance, where Cost Reflective Tariff was N147.55/kWh and Allowed Tariff was N65.99/kWh, thus leaving the government to bear the burden of N81.56/kWh which amounted to N7.82bn.
In July 2023, the new Nigeria Federal Government which placed a Freeze on the Tariff Review, has greatly distorted the plan and skyrocketed the shortfall in the Electricity tariff shortfall, reversing the progress made in the MYTO 2022 to phase out the Subsidy in Electricity Tariff.
Interestingly, due to the changes in the Macro Economic indices(like Foreign Exchange, Inflation, the Unified Exchange Rate, the Cost of Electricity has also increased drastically, 80% of generation is gas-based and gas amounts to 30-40% of generation cost so the floating of the USD spiked cost of generation, the Naira-Dollar exchange rate rose from an average of N464.08/$ in Q1 to N798.40/$ in Q3 and the Nigerian inflation rate rose from 22% in Q1 to 24.10% in Q3, while the US inflation rate dropped from 5.58% to 3.20%.
The Weighted Average of Cost Reflective Tariff in Q3 of 2023 has therefore increased from N68.42 average to N111.12. This also means that the average subsidy has increased to about N51,23/kWh, totalling about N332.68bn in Q3 alone.
Another issue facing the Electricity market is the delay and bottlenecks associated with paying the electricity subsidy as well as the slow cycle of the electricity market.
The subsidy is funded from various pools such as the budget appropriation, FGN commitments domiciled at the Federal Ministry of finance, World Bank guarantees and loans, as well as CBN facilities.
Who are the beneficiaries of this subsidy?
The rate design provided that the subsidy paid by the government should have more benefit to the masses who are mostly low-income earners across the DisCos.
But, present data shows that Areas identified as high income areas are now benefitting more from the subsidy that other areas identified as low income consumers.
For instance, Government now has to pay N46.66/kWh in Subsidy to Abuja Disco, from the Q1 figures of N2.43/kWh, raising the subsidy figures to Abuja Disco to N43.26bn in Q3. This is a jump of 1,912% from N2.15bn in Q1 to N43.26bn in Q3, 2023. Similarly, Eko Disco that was N2.55/kWh in Q1 has seen a rise of 1, 676% in subsidy payment as at Q3, 2023.
Similar Data for Yola Disco shows only a 98% rise in Subsidy payment in Q3, 2023. For Yola Disco, Cost Reflective Tariff was N214.57/kWh but the Allowed Tariff remained at N65.99/kWh with government paying N148.58/kWh, amounting to N15.52bn in Q3 2023.
The data clearly shows that the high income consumers, or the Rich, are benefitting more from the subsidy than the low income consumers that the subsidy was designed for.
Data from National Bureau of Statistics, NBS, established that the rich/high income households have a higher electricity consumption pattern than their poor neighbors.
Further report from NERC also shows that the Subsidy payment for the poorest 20% in the Non-Maximum Demand Consumers, mainly residential, stands at measly N0.43bn, while the Richest 20% gulps N17.24bn in subsidy payment by Government in the Q1 2023.
The Middle income group also accounts for N3.36bn in Subsidy. By Q3, 2023, the Richest 20% accounts for N117.8bn, while the Poorest 20% benefitted only N2.97bn.
These figures shows clearly that the Electricity Tariff Subsidy has been disproportionately benefitting the Rich Nigerian Consumers, while excluding the Poor ones the Subsidy itself was designed for and this is to the detriment of the poor whom the FGN is looking out for as they form a higher proportion of the Nigerian populace and electricity consumers.
And it is also detrimental to Government Finances. The federal government is urged to take a quick decision before the situation spirals out of control like the petrol subsidy.
N2trn subsidy paid since 2015, there has been negligible investment in the NESI by private sector (except Azura), which is a clear signal that the commercial viability of the sector has left a lot to be desired.
Electricity Subsidy is not sustainable, and we need to start thinking of where else the Subsidy we are paying in Electricity tariff can be better applied.
The rationale behind the MYTO 2022, as approved by the regulators was premised on the fact that DisCos that are in highly urban centres are allowed to charge tariffs that are near cost reflective due to evidence of high purchasing power and high consumption level in those areas, indicating that they are high-income consumers while Discos that are in areas with low income consumers are allowed to charge lower Allowed Tariff, therefore paying higher subsidy.
This makes the subsidy regime to impact more on low income bracket of consumers.
It means people living in places under Abuja Disco, Ikeja Disco and Eko Disco were paying tariff that is nearly Cost Reflective, while people living in places under Benin Disco, Yola and Ibadan Disco are paying much less
An example, as seen in the NERC Q1 Report shows that Eko Disco’s Cost Reflective Tariff was put at N62.04/kWh and the Allowed Tariff (AT) was N59.49/kWh, making the variance, or subsidy paid to Eko Disco just N2.55/kWh, totalling about N2.04bn. Similarly, for Abuja Disco, Cost Reflective Tariff was N65.67/kWh, and Allowed Tariff was N63.24/kWh, variance just being N2.43/kWh, again total of N2.15bn was paid in Subsidy to AEDC.
The reverse was the case in places like Yola, for instance, where Cost Reflective Tariff was N147.55/kWh and Allowed Tariff was N65.99/kWh, thus leaving the government to bear the burden of N81.56/kWh which amounted to N7.82bn.
In July 2023, the new Nigeria Federal Government which placed a Freeze on the Tariff Review, has greatly distorted the plan and skyrocketed the shortfall in the Electricity tariff shortfall, reversing the progress made in the MYTO 2022 to phase out the Subsidy in Electricity Tariff.
Interestingly, due to the changes in the Macro Economic indices(like Foreign Exchange, Inflation, the Unified Exchange Rate, the Cost of Electricity has also increased drastically, 80% of generation is gas-based and gas amounts to 30-40% of generation cost so the floating of the USD spiked cost of generation, the Naira-Dollar exchange rate rose from an average of N464.08/$ in Q1 to N798.40/$ in Q3 and the Nigerian inflation rate rose from 22% in Q1 to 24.10% in Q3, while the US inflation rate dropped from 5.58% to 3.20%.
The Weighted Average of Cost Reflective Tariff in Q3 of 2023 has therefore increased from N68.42 average to N111.12. This also means that the average subsidy has increased to about N51,23/kWh, totalling about N332.68bn in Q3 alone.
Another issue facing the Electricity market is the delay and bottlenecks associated with paying the electricity subsidy as well as the slow cycle of the electricity market.
The subsidy is funded from various pools such as the budget appropriation, FGN commitments domiciled at the Federal Ministry of finance, World Bank guarantees and loans, as well as CBN facilities.
Who are the beneficiaries of this subsidy?
The rate design provided that the subsidy paid by the government should have more benefit to the masses who are mostly low-income earners across the DisCos.
But, present data shows that Areas identified as high income areas are now benefitting more from the subsidy that other areas identified as low income consumers.
For instance, Government now has to pay N46.66/kWh in Subsidy to Abuja Disco, from the Q1 figures of N2.43/kWh, raising the subsidy figures to Abuja Disco to N43.26bn in Q3. This is a jump of 1,912% from N2.15bn in Q1 to N43.26bn in Q3, 2023. Similarly, Eko Disco that was N2.55/kWh in Q1 has seen a rise of 1, 676% in subsidy payment as at Q3, 2023.
Similar Data for Yola Disco shows only a 98% rise in Subsidy payment in Q3, 2023. For Yola Disco, Cost Reflective Tariff was N214.57/kWh but the Allowed Tariff remained at N65.99/kWh with government paying N148.58/kWh, amounting to N15.52bn in Q3 2023.
The data clearly shows that the high income consumers, or the Rich, are benefitting more from the subsidy than the low income consumers that the subsidy was designed for.
Data from National Bureau of Statistics, NBS, established that the rich/high income households have a higher electricity consumption pattern than their poor neighbors.
Further report from NERC also shows that the Subsidy payment for the poorest 20% in the Non-Maximum Demand Consumers, mainly residential, stands at measly N0.43bn, while the Richest 20% gulps N17.24bn in subsidy payment by Government in the Q1 2023.
The Middle income group also accounts for N3.36bn in Subsidy. By Q3, 2023, the Richest 20% accounts for N117.8bn, while the Poorest 20% benefitted only N2.97bn.
These figures shows clearly that the Electricity Tariff Subsidy has been disproportionately benefitting the Rich Nigerian Consumers, while excluding the Poor ones the Subsidy itself was designed for and this is to the detriment of the poor whom the FGN is looking out for as they form a higher proportion of the Nigerian populace and electricity consumers.
And it is also detrimental to Government Finances. The federal government is urged to take a quick decision before the situation spirals out of control like the petrol subsidy.
N2trn subsidy paid since 2015, there has been negligible investment in the NESI by private sector (except Azura), which is a clear signal that the commercial viability of the sector has left a lot to be desired.
Electricity Subsidy is not sustainable, and we need to start thinking of where else the Subsidy we are paying in Electricity tariff can be better applied.
Source: Adetayo Adegbemle
He is the convener and Executive Director of PowerUpNigeria, a Power Consumer Advocacy Group.
Uganda: Nigerian Independent Oranto Petroleum Gets Extension Of Exploration Licenses
Oranto Petroleum, a Nigerian independent energy company founded by Prince Arthur Eze has been granted a two-year exploration license extension to its Ngassa Deep and Ngassa Shallow exploration contract areas in Uganda.
This extension allows Oranto to drill an exploration well and an appraisal well, depending on the success of the exploration well.
In 2017, Oranto was granted two petroleum exploration licenses for the Ngassa Deep and Ngassa Shallow contract areas by the Ministry of Energy and Mineral Development in Uganda.
Oranto signed this current extension and committed to maximize the additional time granted and ensure a successful outcome.
Oranto’s chairman, Prince Arthur Eze, said: “We thank the Ugandan government under the leadership of President Yoweri Museveni, the Ministry and the people of Uganda. This extension is very important, as it will contribute towards increasing Uganda’s oil volumes. We appreciate the extension, and want to assure the Ministry that we will fulfill the work program as planned within the designated period.”
The Ngassa Block is located in the Hoima District and spans the Albertine Graben.
Oranto and its sister company Atlas Petroleum are Africa’s largest privately-held exploration and production group by acreage.
Source: https://energynewsafrica.com
Nigeria: IBEDC Urges Nigerians To Observe Safety During The Festive Season
The Management of Ibadan Electricity Distribution Company (IBEDC) Plc has urged Nigerians to be safety conscious as they commemorate the birth of Jesus Christ.
Engineer Kingsley Achife, the Managing Director and Chief Executive Officer of IBEDC, in a statement emphasized the values of unity and goodwill during Christmas, calling on IBEDC customers to join hands in fostering a secure and harmonious environment.
“IBEDC reiterates its commitment to providing seamless service during the holiday season. The technical team will be on standby to address any electrical faults promptly. The company’s customer care line (07001239999) will remain active for quick responses to complaints and reports.”
In light of the festive celebrations, Engr. Achife appealed to customers not to assault IBEDC staff.
He explained that the commitment and hard work of the staff are essential for delivering quality service, and any grievances should be communicated through appropriate channels rather than resorting to violence.
He highlighted that the festive seasons often see an increase in electrical hazards, and as such, he advised IBEDC customers to exercise caution and avoid unsafe practices such as unauthorized tampering with meters or attempting to bypass the electrical system.
“Christmas is a time for joy and reflection. Let us not compromise the safety of ourselves and others by engaging in activities that could lead to electrical hazards. I implore our esteemed customers to refrain from energy theft, as it not only endangers lives but also hampers our collective progress,” says Engr. Achife.
“We also encourage our customers to utilize IBEDC ‘s hassle-free payment channels, including iRecharge, Quickteller, Payarena, Jumia, Watu, Buypower, and ATMs, for convenient bill settlement and vending to enjoy uninterrupted supply during the holiday.”
IBEDC’s offices will also remain open during the holiday from 9 a.m. to 3 p.m. to serve customers efficiently.
Cameroon: AfDB Grants EUR 74 Million Loan For Electricity Sector Reforms To Facilitate Universal Access To Power
The Board of Directors of the African Development Bank Group has approved a loan of EUR 74.25 million to Cameroon to implement the first phase of the Electricity Sector Recovery Support Programme (PARSEC).
The programme will support the Cameroonian government to implement the reforms necessary in the energy sector in 2024 and 2025 so that, in the long term, the country can produce enough electricity to cover its national requirements of 5,000 megawatts and build a reserve to export energy to neighbouring countries, particularly Chad.
“This programme allows the African Development Bank to provide added value in its support for the recovery of the electricity sector in Cameroon. It also offers significant leverage effects through its connection to various recovery plans in the electricity sector. The various actions implemented in the context of high-level dialogue with the government are such that they will raise the Bank to the rank of a preferred partner to Cameroon,” said Serge N’Guessan, Director General for the Central Africa region and head of the African Development Bank’s Country Office in Cameroon.
Among other things, the reforms will enable Cameroon to reduce its commercial losses on electricity, improve revenue collection and deal more efficiently with energy flows in distribution, by migrating metering from a post-paid to a pre-paid mode and installing smart meters, including in public buildings.
The programme will also help to develop and implement an information-education-communication plan aimed at the population, to publicize the new type of metering and introduce customers to pre-payment.
The Bank’s support will build human resource capacity so that Cameroon has a critical mass of qualified personnel to work throughout the electricity sector value chain, from production to knowledge distribution, with the aim of facilitating faster responses to technological, organizational, environmental, climate-related and financial needs in the sector.
The programme will also contribute to the development of a low-cost, integrated master plan to build planning capacity in the electricity sector, covering the whole of the electricity value chain in Cameroon and taking gender concerns into account.
The whole of the Cameroonian population will benefit from the programme, based on an improvement in quality of life.
The programme will also benefit small and medium-sized enterprises (SME), which will see several constraints on the development of their activities, including the irregularity of the energy supply, removed.
This will improve the business environment, allowing the Cameroonian economy to attract more national, regional and foreign capital.
Source: https://energynewsafrica.com