WAPCO Highlights Major Feats In Fulfilment Of Being Reliable Partner In Meeting Energy Needs In Ghana, Togo And Benin
The West African Gas Pipeline Company Limited (WAPCo), owner and operator of the West African Gas Pipeline (WAGP), has highlighted three major achievements attained in 2020 that has resulted in improved reliability of the gas supply through the pipeline and brought great benefits to customers especially in Ghana.
These events have placed WAPCo in an excellent position to fulfill the company’s mission to transport natural gas from producers in Nigeria and Ghana to consumers in Benin, Togo, and Ghana in a safe and reliable manner.
Completion of Takoradi to Tema Interconnection Project added Ghana gas supply to the network of gas sources.
In collaboration with the government of Ghana and other partners, the Takoradi to Tema Interconnection Project (TTIP) was successfully completed in July 2020.
Following the completion of TTIP, WAPCo averaged in the second half of 2020 over 83,000 MMBtu/day of natural gas transportation from the Western Region of Ghana to the Tema enclave to feed power plants to generate power.
With the successful completion of the interconnection project, WAPCo now has reverse flow capability and transports gas from the Western Region of Ghana, from Ghanaian sources while maintaining its original transportation of gas from sources in Nigeria, thereby increasing the volume available for its gas off takers.
As part of the interconnection project, WAPCo’s Tema Regulating and Metering Station (R&MS) expanded its delivery capacity in 2020 to 235 MMscfd from a previous capacity of 140MMscfd.
In addition, WAPCo’s Takoradi R&MS had a new process area added in 2019 with 225 MMscfd gas receipt capacity.
In January 2021, WAPCo’s Tema R&MS set a new monthly average gas delivery record of over 159 MMscfd and a new record one day peak of over 176 MMscfd with gas supplies from both Ghana and Nigeria.
Successful inspection of offshore section of WAGP
WAPCo successfully completed cleaning and inspecting its 569 km offshore pipeline stretching from Nigeria to Takoradi in Ghana.
This periodic internal inspection of the pipeline, a regulatory requirement and in compliance with WAPCo’s Pipeline Integrity Management System, provides critical information to verify the integrity of our system for continuing safe and reliable service.
A collaborative effort of key stakeholders across Nigeria, Ghana, Togo and Benin allowed this effort to be completed safely and ahead of schedule.
Significant improvement in reliable gas supply from Nigeria to the WAGP
WAPCo’s key business partner, the Nigerian Gas Company Limited (NGC), accomplished a great success, which has boosted WAPCo’s reliability efforts.
Through a number of efforts, NGC was able to mitigate issues on their Escravos to Lagos Pipeline System (ELPS) allowing them to lift on 1st November 2020 the prolonged force majeure on the ELPS, which had been affecting gas supply to the WAGP from the east.
Due to the lifting of the force majeure, WAGP is in a better position to transport record volumes of gas to customers.
With the improvement in gas supply from Nigeria, the completion of TTIP in Ghana and the growing demand for use of gas in power supply in Ghana, Togo and Benin, the WAGP was able to set a new record on monthly average gas deliveries to customers across the pipeline of over 178 MMscfd in January 2021.
Achieved eight million workforce hours without a recordable incident
WAPCo is also pleased to announce that in keeping with its previous safety records, all these laudable accomplishments were achieved without a recordable incident.
WAPCo’s continued focus on Operational Excellence and a strong safety culture allowed it to achieve zero recordable incidents for the past 6 years and 8 million workforce hours without a recordable incident, helping to protect our workforce and the communities we operate in.
WAPCo is engaged in continuous improvement to ensure reliability and safe operations and is embarking on a number of reliability, efficiency and improvement programs to further position the WAGP to remain relevant to the needs of its customers.
WAGP Background
The WAGP was developed to contribute to the accelerated economic growth of the West African sub-region and currently provides vital infrastructure linking four cities, in Togo (Lome), Benin (Cotonou) and Ghana (Tema & Takoradi), to natural gas supply sources that provide natural gas for the needed power generation required to complement other energy generation sources.
This year, 2021, marks ten years’ of WAPCo commencing commercial operations.
While it has not been without challenges, these were to be expected of a project as complex as the WAGP.
WAPCo has been flexible over these 10 years and together with its shareholders have adapted the pipeline to the growing and changing needs of its stakeholder countries.
With a decade of commercial operations and a strong start in 2021, WAPCo is in a much-improved position to deliver needed energy supplies to customers into the next decade thanks to the dedication of the OneWAPCo workforce and the support of key stakeholders on the WAGP project.
Ghana: Gas Sub-Sector Becoming A Fiscal Burden To The Country: IES Study
The Institute for Energy Security’s (IES’) study of the petroleum industry reveals that the natural gas sub-sector is rapidly becoming a fiscal burden to the country due poor energy strategies, and delays in building the necessary and relevant infrastructure to off-take the processed domestic gas.
Government’s poor handling of the gas sub-sector is greatly contributing to the rising energy sector debt, while threatening the sustainability of the entire energy industry. Moreover, increasing debts in the energy sector is placing an additional fiscal challenge on the Ghanaian economy.
While records from the Public Interest and Accountability Committee (PIAC), the Ministry of Finance (MoF), and the Petroleum Commission (PC) shows that country’s petroleum industry continued to attract investments into exploration and producing fields, leading to increases in natural gas production volumes; the bottlenecks created in off-take of same, is leading to cost to the country.
In 2020, gas production from the Jubilee, the Tweneboah-Enyera-Ntomme (TEN) and the Sankofa-Gye-Nyame (SGN) fields increased significantly by approximately 60 percent over the volume produced for 2019, the highest recorded since 2010, according to data from the Petroleum Commission. The cumulative raw gas production (associated and non-associated gas) for first half (H1) of 2020 stood at 116,373.39 million standard cubic (MMscf), and expected to reach close to 240,000 MMscf at end 2020.
PIAC’s report indicate that raw gas exported to Ghana National Gas Company (GNGC) from the three producing fields (SGN) fields during the period was 41,314 MMscf, partly due to a 60.5 percent increase in gas production over H1 2019. Ironically, the exported gas represented just 35.5 percent of produced gas compared to reinjected gas of 59,101 MMscf, constituting 50.8 percent of produced gas. The total gas flared during the first half of 2020 was also recorded as 9,600 MMscf, representing 8.2 percent of total gas produced.
This shows re-injected and flared gas as constituting a significant portion of the total gas produced from the three fields. It is therefore clear that the country has failed to make optimal use of its natural gas resource, hence the excess. In 2019 for instance, it is on record that the volume of gas utilized by power generators and industries was just 82,125 MMscf (225 MMscf/d), compared to 169,509 MMscf of associated and non-associated gas produced in 2019.
Until the issue with excess natural gas is addressed, the GNPC would continue to be financially exposed due to the take-or-play clauses in gas contracts. In 2019, the GNPC had to pay a whopping US$168 million for gas unutilized. The attending revenue losses being borne by the GNPC will negatively affect its goal of becoming a stand-alone operator.
Government must as a matter of urgency, stimulate relevant gas infrastructural projects to resolve the issue of unutilized domestic natural gas. Beyond the use of natural gas by power generators, the commodity must be made more accessible to industries by building relevant infrastructure. There must be a radical shift of government’s priorities in the gas sub-sector, going back to the fundamental analysis of the strategic issues to address the demand-supply imbalances.
To the extent that the sector is fast becoming a fiscal risk that places Ghana at a further fiscal disadvantage, a policy shift is crucial.
Source: www.energynewsafrica.com
Nigeria: We’re Working To Ensure Reliable Electricity-Minister Mamman
Nigeria’s Power Minister, Sale Mamman, has assured Nigerians of the commitment of the Ministry of Power in providing reliable electricity.
The West African nation has been having challenges with its power sector, leading to numerous cuts in electricity supply.
With an estimated population of 201 million in 2019, 47 percent of Nigerians did not have access to grid electricity and those who did, faced regular power cuts.
In addition, the economic cost of power shortages in Nigeria is estimated at around $28 billion; equivalent to two percent of its Gross Domestic Product (GDP), according to the World Bank report in 2020.
Speaking at a seminar organised by the Joint Negotiation Council (JNC), a chapter of the Ministry of Power, Sale Mamman, who was represented by the Acting Permanent Secretary, Ministry of Power, Mr Otun Emmanuel assured Nigerians that the Federal Government is working to resolve the power challenges in the country.
He assured the staff of the Ministry of his unwavering support on matters of welfare.
He urged the union leaders to engage meaningfully with the Ministry in order to foster the relationship between management and staff.
The Chairman of the JNC, Comrade Bala Mohammed stated that the meeting was held to strengthen the relationship between the management and staff of the Ministry. He appealed to the staff to be dedicated in their duties.
“I wish to appeal to the staff to be dedicated to their duties at all times. Let me also use today’s auspicious occasion to urge you all to pay attention to all aspects of the tasks required to move the Ministry forward and, most especially, to deliver its mandate to Nigerians,“ he said.
Source:www.energynewsafrica.com
Senegal: President Sall Calls For National Oil And Gas Reform
Senegalese President Macky Sall has called for a transformation of organization, management, execution and evaluation processes within the domestic oil and gas sector, as the country prepares to enter oil and gas operations from 2023.
The President made his announcement during a virtual conference held with the Council of Ministers last Wednesday.
President Sall advocated for the enhanced management of oil and gas resources, supported by a new roadmap that accelerates reforms and ensures adequate supervision of projects by the relevant ministers and parastatals.
To this end, President Sall implored Minister of Petroleum and Energy Aissatou Sophie Gladima to work towards revolutionizing information reporting systems within the hydrocarbon sector and implementing a cohesive communication strategy on oil and gas management.
President Sall further urged national oil company PETROSEN to finalize Production Sharing Contracts and Association Agreements with operators, with a view to driving inclusion of the private sector and indigenous industries.
President Sall also requested that the Ministry of Finance and Budget finalize the bill on revenue sharing related to oil and gas development before the end of March 2021.
He urged government to support the establishment of the National Institute of Oil and Gas, as well as formalize regulation related to education and training in the sector, in a bid to develop human capital and facilitate knowledge, skills and technology transfer.
Africa Oil & Power will unite leaders from Senegal, Gambia, Guinea-Bissau, Guinea, Mauritania and the wider West Africa region with global energy dealmakers, for the first-ever MSGBC Oil, Gas & Power 2021 conference and exhibition on October 26-27 in Dakar, Senegal.
Source: www.energynewsafrica.com
Gambia: President Barrow Commissions 20MW Brikama Power Plant
Gambian President Adama Barrow has commissioned a newly installed 20MW power plant in Brikama, West Coast Region to boost power supply in the West African nation.
The project was jointly funded by the government of The Gambia and its development partner, the Islamic Development Bank (IsDB) at a cost of $28.4M.
It was executed by STX Heavy Industries of South Korea.
Speaking at the commissioning ceremony over the weekend, President Barrow said: “The occasion adds to the ample evidence of my government’s commitment to our 2021 Energy Roadmap and National Development Plan. The addition of twenty (20) Mega Watts to our electricity generation capacity will significantly address the country’s power capacity gaps and serve as a catalyst to achieve and maintain regular electricity supply for the entire Gambian nation.”
This Power Plant project, he added, resulted from the government’s belief that energy is a key driver of economic development. Thus, it has to serve a leverage to raise living standards and reduce poverty in the country.
According to him, the project stands out as another means of accelerating the country’s key infrastructure investments to empower Gambian citizens through access to essential services.
“It is only through such huge development strides that we can attain and sustain the level of economic growth we desire. The rapid increase in the generation capacity of NAWEC and the expansion of its service within the past four years has been quite tactical. We are convinced it takes such innovative strategies to rekindle hopes and uplift the living standards of our people.”
The increasing demand for power, arising from the expansion of economic activities in the country, Barrow said, also makes it compelling for government to redouble efforts in the energy sector.
“The strategy is to gradually replace the old generator sets with reliable ones and maintain a single national grid.”
“Besides providing sustainable energy for all, it is equally necessary to work towards cost-reflective electricity tariffs in a systematic manner and within the right regulatory framework. We remain committed to the socio-economic development objectives as outlined in our National Development Plan (NDP), the AU 2063 Agenda and the AU/EU partnership for Green Transition and Energy Access. Accordingly, the energy sector has a critical role to play for the realisation of these development mileposts.”
“To this end, the Ministry of Petroleum and Energy is establishing an Energy Platform to exploit sustainable energy solutions in order to propel agricultural development, facilitate trade and promote digital inclusion, among other objectives. We are also working with our development partners to mitigate the effects of climate change, increase our renewable energy uptake and improve energy efficiency in our homes, institutions and businesses.”
“Let me stress that my government will keep up the momentum of infrastructure development countrywide. To stir economic growth, we need good roads, bridges, schools and hospitals among others. All these developments require regular and reliable electricity supply. Therefore, this occasion marks a key milestone for the nation in the long quest for steady power supply.”
“Alongside increasing the generation capacity of electricity are other projects to step up access, and expand the transmission and distribution network within a reinforced and reliable system. These measures will improve supply, increase customer connections and support investments.”
Source:www.energynewsafrica.com
The increasing demand for power, arising from the expansion of economic activities in the country, Barrow said, also makes it compelling for government to redouble efforts in the energy sector.
“The strategy is to gradually replace the old generator sets with reliable ones and maintain a single national grid.”
“Besides providing sustainable energy for all, it is equally necessary to work towards cost-reflective electricity tariffs in a systematic manner and within the right regulatory framework. We remain committed to the socio-economic development objectives as outlined in our National Development Plan (NDP), the AU 2063 Agenda and the AU/EU partnership for Green Transition and Energy Access. Accordingly, the energy sector has a critical role to play for the realisation of these development mileposts.”
“To this end, the Ministry of Petroleum and Energy is establishing an Energy Platform to exploit sustainable energy solutions in order to propel agricultural development, facilitate trade and promote digital inclusion, among other objectives. We are also working with our development partners to mitigate the effects of climate change, increase our renewable energy uptake and improve energy efficiency in our homes, institutions and businesses.”
“Let me stress that my government will keep up the momentum of infrastructure development countrywide. To stir economic growth, we need good roads, bridges, schools and hospitals among others. All these developments require regular and reliable electricity supply. Therefore, this occasion marks a key milestone for the nation in the long quest for steady power supply.”
“Alongside increasing the generation capacity of electricity are other projects to step up access, and expand the transmission and distribution network within a reinforced and reliable system. These measures will improve supply, increase customer connections and support investments.”
Source:www.energynewsafrica.com
Iraq Walks Away From $2B Upfront Oil Deal With China
Iraq has decided against signing an oil-supply deal with a Chinese state company that would’ve seen the cash-strapped Arab nation get about $2 billion upfront, according to its oil minister.
Baghdad opted not to go ahead with the contract after oil prices rose in recent months, Ihsan Abdul Jabbar said in an interview with BBC Arabic.
Iraq, whose economy is reeling after last year’s crash in crude prices, in November asked oil traders to bid for a five-year supply deal. Baghdad proposed delivering 4 million barrels a month, or about 130,000 barrels a day, with the buyer paying upfront for one year of supply.
China’s Zhenhua Oil Co., a subsidiary of defense contractor Norinco, won the bid, Bloomberg reported in December.
Prepayment deals are rare in the oil world and this was meant to improve Iraq’s financial situation. While the government is still struggling, its position has improved because oil prices have soared 62% since the start of November to around $63 a barrel, largely thanks to the roll-out of coronavirus vaccines.
OPEC’s second-biggest producer had wanted as much liquidity as possible in January and February this year and was concerned that oil prices wouldn’t exceed $40 a barrel, Jabbar said in the interview.
After prices stabilized, “we decided to freeze this attempt or option and we didn’t activate it,” BBC Arabic cited him as saying.
In an interview with the Iraq Oil Report earlier this month, Finance Minister Ali Allawi said pre-payment oil deals were problematic because they required a sovereign guarantee.
Source: worldoil.com
Ghana: CalBank, EU Set Up Green Energy Financing Scheme
CalBank Ghana, one of the indigenous banks in the Republic of Ghana, in partnership with the European Union (EU), has set a Green Energy Financing scheme with a seed capital running into several millions of dollars to support corporate bodies, Small and Medium Scale Enterprises (SMEs) and individuals who want to invest in green energy.
The scheme supports Renewable Energy Projects and Energy Efficiency Projects which lead to 20 percent energy savings and initiatives aimed at sustainable use of natural resources.
According to the bank, these projects must be implemented in Ghana before it could qualify for support.
Speaking during a virtual stakeholder dialogue on the best options in providing financial support for renewable energy investment and adoption by SMEs in the country, organised by ACEP, in partnership with the German Development Cooperation (GIZ), Abraham Dsane of the Corporate Relations Department of CalBank, mentioned that for corporate customers, a maximum of $8 million has been set aside, while that for SME customers and individuals have been pegged at $2 million and $50,000.
He noted that there exists many funding opportunities for businesses to tap into if they want to go green.
Among the funding options available to businesses, he said there is a US$11.4 million Africa Climate Change Fund and Africa Green Fund administered by the African Development Bank and the Sustainable Use of Natural Resources and Energy Fund which, he said US$20 million has been made available to CalBank for onward lending to companies and individuals that want to invest in renewable energy.
Others include the Nordic Development Fund, the Global Environment Facility of which the country has received over US$100 million, and the Green Climate Fund, among others.
“Renewable energy is important in our world today because of the advantages it comes with, so financial institutions in the country are increasingly committing more resources and efforts to support businesses and individuals that want to invest in renewables,” he added.
Themed ‘Financing options for renewable energy adoption by SMEs in Ghana’, the stakeholder dialogue formed part of efforts to enhance affordable renewable energy through interventions that will explore opportunities for renewable energy adoption by SMEs.
Source:www.energynewsafrica.com
Ghana: I’ll Work Towards Universal Access To Electricity-Napo
Ghana’s Minister-designate for Energy, Dr Matthew Opoku Prempeh, has pledged his commitment towards achieving 100 percent electricity access in the West African nation in the second term of the Akufo-Addo-administration.
“As a Minister for Energy, I will work towards affordable universal power for all Ghanaians,” Dr. Opoku Prempeh who is popularly known as Napo said while answering questions on his commitment to ensuring that Ghana achieves universal access to electricity during his vetting in Parliament recently.
In 2016, Ghana’s national electricity access was about 83.24 percent and moved to 83.62 percent in 2018.
As at last year, Ghana’s electricity access had increased to 85 percent.
Ghana Struggling To Grow Electricity Access: IES AnalysisHowever, the level of increment, according to the Minority Leader of the Parliament of Ghana, Haruna Iddrisu, is not encouraging and wanted the Minister- designate to do something to improve it if he were approved. President Akufo-Addo, in his inaugural speech on January 7, 2021, intimated that the remaining population would be connected to electricity in his second term to ensure economic growth. “The remaining fifteen percent of our communities without electricity would be covered by the end of my second term,” he assured Ghanaians. Source:www.energynewsafrica.com
Nigeria: Court Blocks Shell’s Bank Accounts Over Oil Pipeline Dispute
A Nigerian court has restricted Royal Dutch Shell Plc’s access to its bank accounts in the West African country amid a legal dispute with a local oil producer over a pipeline deal six years ago.
Aiteo Eastern E&P Co. Ltd. is demanding billions of dollars in damages, claiming Shell misrepresented the condition of the pipeline and under-counted the volume of crude one of its facilities received from the Nigerian firm, according to court documents seen by Bloomberg.
Shell said Aiteo’s lawsuit is baseless and it is working to overturn the freezing order.
The dispute is just one among a growing list of legal entanglements related to Shell’s business in Africa’s largest crude producer. Since the start of the year, a Dutch court has ordered the company to pay compensation for oil spills in two villages more than a decade ago, and the U.K. Supreme Court allowed 40,000 fishermen and farmers to sue Shell in England.
The legal precedents could result in the company facing more cases related to Nigeria in its home country.
A federal court in Lagos, Nigeria’s commercial hub, on Feb. 15 retained an injunction issued late last month directing Shell not to withdraw funds held at 20 banks “without first preserving or ring-fencing” almost $2.8 billion. The judge, Oluremi Oguntoyinbo, has adjourned proceedings until Feb. 24.
Aiteo’s allegations relate to its $2.4 billion purchase in 2015 of a 45% interest in an oil block and pipeline from a trio of multinational companies: Shell, Total SE and Eni SpA. Nigeria’s state-owned energy company owns the rest.
The African company secured a loan of almost $1.5 billion from local and international banks to fund its entrance into the oil exploration and production business, according to a lawsuit the company filed against four Shell units and the parent company on Jan. 15. Aiteo is controlled by prominent Nigerian businessman Benedict Peters.
Aiteo alleged in the lawsuit that “fraudulent misrepresentations” made by Shell’s local unit, the former operator of the assets, before the sale mean it is “practically impossible” for the company to “meet its repayment obligations to its financiers.” The company claims the pipeline, the Nembe Creek Trunk Line, or NCTL, was in a more degraded state and more prone to crude theft than Shell advertised.
Subsequent to the transaction, Aiteo also alleges that Shell understated the volume of crude delivered to its Bonny oil and gas export terminal through the NCTL by Aiteo and other local producers. The company is demanding that Shell refund it with 16 million barrels of oil or $1.3 billion.
The full penalty sought in Aiteo’s lawsuit is for more than $9 billion, including $5 billion in general damages, $799 million to cover the purchase of the NCTL and $933 million to reimburse pipeline repairs.
Shell “is working to secure an expeditious discharge of the freezing injunction which we believe was obtained by Aiteo without any valid basis,” a spokesman for the company’s Nigerian unit, SPDC, said by email.
Aiteo’s allegation of “crude theft/diversion” related to the Bonny terminal is “factually incorrect,” Shell said.
Rather, it is a “distinct issue” concerning a directive given by Nigeria’s Ministry of Petroleum Resources to SPDC, as operator of the facility, saying that the company should reallocate oil between producers that inject into another pipeline and those that use the NCTL.
Shell plans to refund 2.1 million barrels from producers, including SPDC and Total, that pump crude into the Trans Niger Pipeline to firms that use the NCTL, according to a letter the company sent the petroleum resources ministry on Feb. 8. The allotment to Aiteo will be 1 million barrels, with the largest share taken from a joint venture headed by SPDC.
The readjustment, which relates to calculations made at the Bonny terminal between June 2016 and June 2017, is part of “normal industry practice,” Shell said.
Ghana: We’ll Resist Any Attempt To Increase Fuel Prices – Minority
Minority Parliamentarians in the Republic of Ghana have accused the Akufo-Addo government of being insensitive to the plight of suffering Ghanaians with the recent increases in the prices of petroleum products.
According to the Minority, the increase in the price of fuel is an indication of the government’s poor management of the energy sector.
Prices of fuel at various pumps across the country have witnessed an increment in the first pricing window of February.
The national average price of fuel per litre at the moment is pegged at GH¢5.03.
Minority spokesperson on energy who is also the Member of Parliament (MP) for Yapei-Kusawgu, John Jinapor said they will resist any attempt by government to further increase fuel prices.
He further added the Minority will not tolerate any such increments.
The Yapei-Kusawgu thus insisted the Akufo-Addo presidency is out of ideas in raising revenue to manage the sector.
“The recent increase has only resulted in worsening off the living conditions of the already improvised Ghanaians under the Akufo-Addo presidency. It this appear that things are taking for the worse as international rating agencies have begun sounding the alarm bells on Ghana’s huge and unsustainable debt levels.”
“One cannot account but come to the conclusion that the Akufo-Addo government has ran out of ideas, hence, their decision to resort to such rampage petroleum increase. Notice is hereby served and the Minority and the people of Ghana for that matter will not tolerate any further increment that will only exacerbate the suffering of the Ghanaian. The government must think outside the box and be innovative than these measures,” he said.
Nigeria: Atiku Backs Privatisation Of Refineries, Other Assets
Nigeria’s former Vice President Atiku Abubakar has backed the decision by the Federal Government to privatise some of its assets.
The assets include the country’s refineries, the International Conference Centre in Abuja, Yola Electricity Distribution Company, Zungeru Hydro Power, Tafawa Belewa Square, among others.
A total of N493.4bn is expected to be earned from the sale of the assets which were classified under energy assets, industries and communication department, as well as development institutions and natural resources.
In a statement titled ‘Privatisation of Refineries and Other Assets: Better Late Than Never,’ Atiku called for transparency in the process of privatising the assets.
He expressed delight that the privatisation of public assets which he once championed and was scorned for by the All Progressives Congress-led administration is now being embraced by the same administration.
He said, “For decades, I have championed the privatisation of our economy and full deregulation of our oil and gas sector, amongst other sectors, for greater service delivery and efficiency.
Mexican President Urges Population To Conserve Energy Amid Power Shortage
Mexico’s President Andres Manuel Lopez Obrador has urged people to reduce their power consumption amid a shortage caused by the Texas deep freeze that prompted the state to restrict natural gas imports to Mexico.
“I call on all Mexicans to help us by consuming less,” Lopez Obrador said as quoted by Reuters, advising Mexicans to turn off unnecessary lights during peak demand in the evenings, “To be totally sure that our electricity system is maintained and that we don’t suffer from blackouts.”
Texas Governor Greg Abbott earlier this week banned the exports of natural gas until normal production is restored, which he expects to happen by Sunday.
Texas’ natural gas production, normally accounting for about a quarter of the U.S. total, slumped by more than half during the freezing spell in the state, creating power shortages in the state. The shortages spilled over into Mexico soon enough, leaving several million people in the northern Mexican states without power.
Mexico is heavily reliant on natural gas imports from the United States for its electricity generation. Most of this gas comes from Texas, where this week production and processing equipment froze. As a result of the outages, Mexico might shed 1 percent of its GDP this year.
The country is now looking for ways to solve the export ban issue diplomatically but has signaled that it will not retaliate.
“I want to make this clear, there is no reprisal, this is a difficult circumstance for them, and they think that by closing, they protect Texas,” Lopez Obrador told the media.
Meanwhile, the situation in Texas and Oklahoma is still challenging. Power has been restored to millions of Texans, but access to clean water remains problematic, according to a CBS report. In one town, authorities have advised that water be used only to sustain life at this point.
Source: Oilprice.com
Britain’s Cairn Files Case In U.S. To Push India To Pay $1.2 Bln Award
Cairn Energy has filed a case in a U.S. district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India, a court document showed, ratcheting up pressure on the government to pay its dues.
In December, an arbitration body awarded the British firm damages of more than $1.2 billion plus interest and costs. The tribunal ruled India breached an investment treaty with Britain and said New Delhi was liable to pay.
Cairn asked the U.S. court to recognise and confirm the award, including payments due since 2014 and interest compounded semi-annually, according to the Feb. 12 filing seen by Reuters.
The case marked a first step in Cairn’s efforts towards recovering its dues, potentially by seizing Indian assets, if the government did not pay, a source with knowledge of the arbitration case told Reuters.
“If Cairn wins the case, it will be a step towards attaching and seizing Indian assets overseas, especially in the U.S.,” the source said.
Reuters reported last month that Cairn was identifying India’s overseas assets, including bank accounts and even Air India planes or Indian ships, that could be seized in the absence of a settlement.
Cairn declined to comment but pointed to a Feb. 9 Twitter post where it said Chief Executive Simon Thomson was looking forward to meeting India’s Finance Minister in Delhi next week.
“We would request, along with others, that the Indian government move swiftly to adhere to the award that has been given,” Thomson said in the video posted on Twitter by Cairn.
India: We’re Cautious On Privatising Bharat Petroleum Corp-Oil Minister“It is important for our shareholders who are global financial institutions and who want to see a positive investment climate in India. I am sure that in working together with the government we can swiftly draw this to conclusion and reassure those investors,” he said. India’s finance and external affairs ministries did not immediately respond to requests for comment. Cairn aims to enforce the award under international arbitration rules, commonly called the New York Convention, and recover losses caused by India’s “unfair and inequitable treatment of their investments”, the court filing showed. The company has registered its claim against India in the Netherlands and France, telling regulators in the two countries that they may receive court orders to seize of some Indian assets, and the firm was preparing to do the same in Canada and United States, Reuters reported last month. India lost another major international arbitration case last year against Vodafone over a $2 billion retrospective tax dispute. The government has challenged the arbitration verdict in the Vodafone case. It has yet to say how it will proceed in Cairn’s case where it has to make a significant payment.
State Companies Are Risking $400 Billion In Oil Projects Incompatible With Paris Climate Goals
One fifth of anticipated investments in the oil and gas sector by state-owned oil companies are economically unviable if global warming is to be kept within 2 degrees C, new research shows.
With the United States rejoining the global coalition to meet the objectives of the Paris climate agreement, oil producers face a moment of reckoning.
Research published by the Natural Resource Governance Institute (NRGI) has identified that state-owned national oil companies (NOCs)—many in developing countries—are on a trajectory to spend billions on oil and gas projects that will only break even if the world fails to meet the Paris goals.
While the climate approaches of multinational oil firms like BP and ExxonMobil are routinely scrutinized, this is the first report quantifying the incompatibility of NOCs’ investment plans with the Paris agreement.
NOCs produce half of the world’s oil and gas and are responsible for 40 percent of the capital invested in the industry worldwide.
Using market data, NRGI’s report, Risky Bet: National Oil Companies in the Energy Transition estimates that NOCs could invest about USD 1.9 trillion in the next ten years.
Of this, about one fifth, or $400 billion, would not result in a profit if the energy transition proceeds in line with current climate commitments. If widespread carbon capture and storage technologies are not deployed, this figure would climb even higher.
“A huge amount of state investments in oil projects will likely only yield returns if global oil consumption is so high that the world exceeds its carbon emission targets,” says Patrick Heller, an NRGI advisor and one of the report’s co-authors.
“This risky spending has major implications for the economic futures of national oil companies’ home countries. State-owned oil companies in developing and emerging countries including Algeria, Mexico and Nigeria might collectively invest more than $365 billion in such high-cost projects—expenditures that could instead help alleviate poverty or diversify their oil-dependent economies.”
As an example, the researchers highlight the Nigeria National Petroleum Corporation. Almost half of the Nigerian NOC’s upcoming oil project spending—an amount that exceeds the government’s expenditures on education and health care—may fail to break even if the world makes rapid progress toward climate goals.
Similarly, Colombia’s Ecopetrol could invest the equivalent of a fifth of its government’s total expenditures into oil and gas projects that will break even only if the world fails to meet its climate commitments.
“State oil companies’ expenditures are a highly uncertain gamble,” says David Manley, NRGI senior economic analyst and report co-author.
“They could pay off, or they could pave the way for economic crises across the emerging and developing world and necessitate future bailouts that cost the public dearly.”
The report notes that the governments of countries including Algeria, Angola and Azerbaijan are making particularly risky bets with public money.
“National oil companies will have a major influence on the success of the push for a managed decline in fossil fuel production worldwide,” says Heller.
“Authorities in many producing countries risk pushing ahead with new investment regardless of what is economically and ecologically feasible, and the outcomes could be dire. If international oil companies and private investors make good on their stated ambitions to move away from hydrocarbons, state actors may be even more tempted to step in and fill the gap in oil production.”
The Risky Bet report is accompanied by a briefing that details the specific challenges facing NOCs in the Middle East and North Africa (MENA).
Researchers found that while some MENA NOCs have access to large, cheaply developed reserves that will help them withstand a long-term decline, others face uncertainty in maintaining the production on which their economies have come to depend. The briefing suggests that NOCs and their governments across the region should adapt their strategies, become more efficient and accountable to citizens, and adopt fiscal practices that lead to economic resilience in a low-carbon future.
Source: wwwenergynewsafrica.com