G7 Mulls Options To Restrict Russian Oil Profits
The Group of Seven (G7) wealthy nations are looking at blocking the transportation of Russian oil among other options to deprive Moscow of bumper revenues amid its invasion of Ukraine, unless it heeds a price cap.
In a statement released by Britain, G7 foreign ministers said they were considering “a comprehensive prohibition of all services that enable transportation of Russian seaborne crude oil and petroleum products globally, unless the oil is purchased at or below a price to be agreed in consultation with international partners.”
“In considering this and other options, we will also consider mitigation mechanisms alongside our restrictive measures to ensure the most vulnerable and impacted countries maintain access to energy markets including from Russia.”
The G7 is made up of Britain, Canada, France, Germany, Italy, Japan, and the United States.
Many countries have imposed sanctions on Russia following its invasion of Ukraine, which Moscow calls a “special military operation”, but key oil consumers China and India have stepped up imports of discounted Russian barrels to record levels.
Despite Russia’s oil exports hitting their lowest levels since last August, its export revenue in June increased by $700 million month on month due to higher prices, 40% above last year’s average, the International Energy Agency said last month.
Western leaders have proposed addressing that through an oil price cap to limit how much refiners and traders can pay for Russian crude – a move Moscow says it will not abide by and can thwart by shipping oil to states not obeying the price ceiling.
U.S. Treasury Secretary Janet Yellen pitched the idea of the price cap to Asian leaders on a foreign tour last month and told Reuters she had held “encouraging” talks with India.
Some traders and oil market analysts have expressed doubts a price cap would work as Russia has found ways to ship its oil to Asia without the use of Western ship insurance. Moscow could also stop exports of some oil altogether, leading to a further spike in energy prices
G7 members have scrambled to find ways to plug energy shortages and tackle soaring prices while sticking to their climate commitments amid the tensions with Russia.
“As we phase out Russian energy from our domestic markets, we will seek to develop solutions that reduce Russian revenues from hydrocarbons, support stability in global energy markets, and minimise negative economic impacts”, the G7 statement said.
Source: Reuters
Senegal Faces Key Technology Decisions In Its Search For The Optimal Gas-To-Power Strategy (Opinion)
By: Joonatan Huhdanmäki
On the back of its recent and substantial oil and gas discoveries, Senegal is now preparing to ensure that its vast natural gas resources will help meet future electricity demand and put an end to the excessive electricity prices undermining its economy.
Senegal’s domestic gas reserves will be mainly used to produce electricity. Authorities expect that domestic gas infrastructure projects will come online between 2025 and 2026, provided there is no delay. The monetization of these significant energy resources is at the basis of the government’s new gas-to-power ambitions.
In this context, the global technology group Wärtsilä conducted in-depth studies that analyse the economic impact of the various gas-to-power strategies available to Senegal. Two very different technologies are competing to meet the country’s gas-to-power ambitions: Combined-cycle gas turbines (CCGT) and Gas engines (ICE).
These studies have revealed very significant system cost differences between the two main gas-to-power technologies the country is currently considering. Contrary to prevailing beliefs, gas engines are in fact much better suited than combined cycle gas turbines to harness power from Senegal’s new gas resources cost-effectively, the study reveals. Total cost differences between the two technologies could reach as much as $480 million until 2035 depending on scenarios.
Two Competing And Very Different Technologies
The state-of-the-art energy mix models developed by Wärtsilä, which builds customised energy scenarios to identify the cost optimal way to deliver new generation capacity for a specific country, shows that ICE and CCGT technologies present significant cost differences for the gas-to-power new build program running to 2035.
Although these two technologies are equally proven and reliable, they are very different in terms of the profiles in which they can operate. CCGT is a technology that has been developed for the interconnected European electricity markets, where it can function at 90% load factor at all times. On the other hand, flexible ICE technology can operate efficiently in all operating profiles, and seamlessly adapt itself to any other generation technologies that will make up the country’s energy mix.
In particular our study reveals that when operating in an electricity network of limited size such as Senegal’s 1GW national grid, relying on CCGTs to significantly expand the network capacity would be extremely costly in all possible scenarios.
Cost differences between the technologies are explained by a number of factors. First of all, hot climates negatively impact the output of gas turbines more than it does that of gas engines.
Secondly, thanks to Senegal’s anticipated access to cheap domestic gas, the operating costs become less impactful than the investment costs. In other words, because low gas prices decrease operating costs, it is financially sound for the country to rely on ICE power plants, which are less expensive to build.
Technology Modularity Also Plays A Key Role.
Senegal is expected to require an extra 60-80 MW of generation capacity each year to be able to meet the increasing demand. This is much lower than the capacity of typical CCGTs plants which averages 300-400 MW that must be built in one go, leading to unnecessary expenditure. Engine power plants, on the other hand, are modular, which means they can be built exactly as and when the country needs them, and further extended when required.
The numbers at play are significant. The model shows that if Senegal chooses to favour CCGT plants at the expense of ICE-gas, it will lead to as much as 240 million dollars of extra cost for the system by 2035. The cost difference between the technologies can even increase to 350 million USD in favor of ICE technology if Senegal also chooses to build new renewable energy capacity within the next decade.
Risk-Managing Potential Gas Infrastructure Delays
The development of gas infrastructure is a complex and lengthy endeavour. Program delays are not uncommon, causing gas supply disruptions that will have a huge financial impact on the operation of CCGT plants.
Nigeria knows something about that. Only last year, significant gas supply issues have caused shutdowns at some of the country’s largest gas turbine power plants. Because Gas turbines operate on a continuous combustion process, they require a constant supply of gas and a stable dispatched load to generate consistent power output. If the supply is disrupted, shutdowns occur, putting a great strain on the overall system. ICE-Gas plants on the other hand, are designed to adjust their operational profile over time and increase system flexibility. Because of their flexible operating profile, they were able to maintain a much higher level of availability
The study took a deep dive to analyse the financial impact of 2 years delay in the gas infrastructure program. It demonstrates that if the country decides to invest into gas engines, the cost of gas delay would be 550 million dollars, whereas a system dominated by CCGTs would lead to a staggering 770 million dollars in extra cost.
Whichever way you look at it, new ICE-Gas generation capacity will minimize the total cost of electricity in Senegal in all possible scenarios. If Senegal is to meet electricity demand growth in a cost-optimal way, at least 300 MW of new ICE-Gas capacity will be required by 2026.
The Writer is a Senior Analyst for Energy, Wärtsilä
Ghana: Cabinet Likely To Lift Ban On 61 LPG Projects This Week-Energy Minister
Ghana’s Minister for Energy, Dr Matthew Opoku Prempeh, has hinted that Cabinet is likely to lift the ban placed on some 61 LPG projects which were under various stages of construction and or completion this week to their owners.
According to the Minister, the Energy Ministry sent a Memo on 29th July, 2022 to Cabinet for consideration on those projects, adding that the Cabinet is meeting tomorrow (Wednesday) to discuss several issues.
He said he was hopeful there would be good news after the cabinet meeting tomorrow.
“I’m sure government will take a second look at the issue. What NPA has proposed to the government is that the 61 LPG stations should be used as cylinder exchange points for the LPG Cylinder Recirculation Model Programme. This is good and I’m sure when Cabinet meets tomorrow, they will decide on it,” Dr. Matthew Opoku Prempeh said while addressing some issues in the energy sector on Accra-based Asempa FM.
The Minister’s assurances come on the back of a sit-down strike by the Ghana Tanker Drivers Union on Monday.
The tanker drivers claim that the continuous ban on the 61 LPG projects was affecting the investments of the operators.
They further claim that their employers were failing to increase their salaries because they have invested heavily in those projects, thereby, limiting their cash flow.
Source: https://energynewsafrica.com
Ghana: LPG Marketers Shut Down Retail Outlets Due To Tanker Drivers’ Strike
Liquefied Petroleum Gas (LPG) retail outlets in the country have been shut down by operators following a sit-down strike by gas tanker drivers in the West African nation.
When the energynewsafrica.com team visited some of the LPG outlets in Tema, in the Greater Accra Region, the stations were closed with ‘No Gas’ signage placed at the entrance to notify their customers.
“We are just pleading with them that whatever their problem is, they should resolve it so that they can start producing, so we can get some (LPG) to do our household chores,” one of the consumers said.
“I use gas for my business. Without it, it would be hard. I have to resort to charcoal until they resume work,” another complained.
Addressing a press conference in Tema on Monday, Chairman of the Ghana Petroleum Tanker Drivers Union, George T. Nyaunu, raised concerns about the ban on the LPG projects under various stages of construction and sanctions against transporters by the National Petroleum Authority (NPA) over claims that tanker drivers have been tampering with their cargo tracking seal.
He noted that the ban is affecting the investments by the LPG operators.
“Most of them had borrowed to invest in the construction of these stations before 2017. These investments by indigenous Ghanaian investors amount to not less than $10 million or approximately GH¢85 million. But with the imposition of the ban, these investments have been abandoned and are wasting away at various sites across the country for the past five years.
“Most of these investments were done with loans contracted from banks in the country. This has put these investors under undue pressure from the banks to repay the loans at very high-interest rates, to the extent that some of our employers are being pursued through the courts and their assets being confiscated to defray these loans,” he explained.
Meanwhile, the Executive Secretary of Chamber of Petroleum Consumers (COPEC), Duncan Amoah, reacting to the issues, called on the government to resolve the issues as soon as possible to avert LPG shortages.
“The ban, we understand, has led to about 11% reduction in volumes for the operators over the past one year instead of a projected 15% increase year on year.
“We are currently inundated with calls from obviously stranded consumers who depend on these outlets seeking answers which we don’t have,” the statement pointed out.
Source: https://energynewsafrica.com
Ghana: Diesel, Petrol Prices Drop By Almost 40 Pesewas
Major Oil Marketing Companies in the Republic of Ghana have reduced the prices of fuel at the pump following a drop in crude oil prices.
As of Monday morning, leading oil marketing companies namely GOIL, Shell and TotalEnergies have all adjusted their prices downward.
GOIL reduced its pump price for diesel from Gh¢13.63 per litre to Gh¢13.26, representing 37 pesewas while Super (petrol) price witnessed a reduction of 35 pesewas from Gh¢11:30 per litre to Gh¢10:95 per litre.
Shell and TotalEnergies also reduced their pump prices by over 30 pesewas.
A litre of petrol and diesel are now sold at Gh¢10.95 and Gh¢13.30 respectively at the retail outlets of both shell and TotalEnergies.
Likely, some of the smaller OMCs will also adjust their pump prices by a small margin since they have always been selling below the prices sold by the major players.
As of 12:45 GMT on Tuesday, WTI was trading at $94.54 per barrel while benchmark crude Brent was trading at $100.5.
Source: https://energynewsafrica.com
Shell and TotalEnergies also reduced their pump prices by over 30 pesewas.
A litre of petrol and diesel are now sold at Gh¢10.95 and Gh¢13.30 respectively at the retail outlets of both shell and TotalEnergies.
Likely, some of the smaller OMCs will also adjust their pump prices by a small margin since they have always been selling below the prices sold by the major players.
As of 12:45 GMT on Tuesday, WTI was trading at $94.54 per barrel while benchmark crude Brent was trading at $100.5.
Source: https://energynewsafrica.com Ghana: ECG Customers Face Utilities Court Over Illegal Connection
A Ghanaian court responsible for the prosecution of those engaged in power theft will start prosecuting hundreds of ECG customers who tamper with their meters and consume power illegally.
This was disclosed by the Managing Director of the Electricity Company of Ghana (ECG), Samuel Mahama.
“The power court, which is also called the utility court, is ready and will start active prosecution of cases,” Mr Mahama said.
The power distribution company will, from Monday, also commence meter auditing after giving customers more than a one-month moratorium to report any fault to ECG.
Speaking at a press briefing last week, the Managing Director of ECG, Samuel Mahama said the company would deploy a team of task force and police personnel to homes to audit all meters and ensure all faulty, tampered meters and illegal connections are fished out of the system.
Thus, he warned that anyone caught during the process would be prosecuted by the utility court for stealing.
“Anybody and I repeat, anybody caught stealing power will be charged with stealing and will be made to pay a hefty fine or a prison sentence,” he warned.
Source: https://energynewsafrica.com
Zambia: Ghana’s NPA, Zambian Petroleum Downstream Regulator Deepen Ties To Fight Fuel Adulteration
Ghana’s petroleum downstream regulator, NPA, continues to strengthen its ties with the Zambian counterpart, Energy Regulatory Board (ERB).
Officials of the two regulatory bodies have been visiting each other to understudy to improve their regulatory mandate.
As part of an effort to strengthen the bond, the Chief Executive Officer of Ghana’s National Petroleum Authority (NPA), Dr Mustapha Abdul-Hamid, embarked on a working visit to the Zambian Energy Regulatory Board (ERB).
Dr Abdul-Hamid, accompanied by Ghana’s High Commissioner in Zambia, Her Excellency Iddrisu Khadija, together with some NPA board and management members, visited the ERB head office in Lusaka.
The tour is premised on major successes achieved by the fuel marking programme in both countries and shared lessons on the implementation of the fuel marking programme with the view of improving current operations.
Briefing the media on what necessitated the visit, the NPA boss said before the Zambian regulatory body began its implementation of the fuel marking programme in 2017, they sent a seven-member team to understudy Ghana’s model of the petroleum product marking scheme in 2015.
He said the Zambian team was taken through the programme set-up, staffing, contractor & subcontractor payments, margins, benefits, challenges and legislation, among others.
Dr Abdul-Hamid said ERB sent another two-group delegation in 2018 comprising key fuel marking operational staff, senior management and board to interact with NPA to gain further insights on the rollout and implementation of both the marking and monitoring activities of the Ghana fuel marking programme.
Dr Abdul-Hamid was elated to know that since the successful launch and rollout of the fuel marking in Zambia, the programme has chalked major success.
He mentioned product quality compliance rate at the retail outlet has increased to over 96 per cent and illegal fuel vendors have been successfully prosecuted and convicted.
Despite Ghana’s major successes in the fuel marking programme, the NPA Chief Executive said: “We still want to learn from the Zambian programme to help us improve on our operations in the field of fuel marking and regulation, as well as foster a healthy collaboration in the area of fuel integrity monitoring between our institutions.”
The ERB is a statutory body charged with the responsibility of regulating the energy sector in Zambia. The ERB is generally responsible for ensuring that energy enterprises earn a reasonable rate of return on their investments and that consumers are given quality products and services.
Source: https://energynewsafrica.com
Dr Abdul-Hamid was elated to know that since the successful launch and rollout of the fuel marking in Zambia, the programme has chalked major success.
He mentioned product quality compliance rate at the retail outlet has increased to over 96 per cent and illegal fuel vendors have been successfully prosecuted and convicted.
Despite Ghana’s major successes in the fuel marking programme, the NPA Chief Executive said: “We still want to learn from the Zambian programme to help us improve on our operations in the field of fuel marking and regulation, as well as foster a healthy collaboration in the area of fuel integrity monitoring between our institutions.”
The ERB is a statutory body charged with the responsibility of regulating the energy sector in Zambia. The ERB is generally responsible for ensuring that energy enterprises earn a reasonable rate of return on their investments and that consumers are given quality products and services.
Source: https://energynewsafrica.com Nigeria: Gov’t To Take Delivery Of Transformers Procured From Siemens In September
Nigeria is expected to take delivery of some power transformers ordered by the Federal Government under President Muhammadu Buhari’s Presidential Power Initiative (PPI) from Italy in September 2022.
The transformers, procured through energy firm Siemens, have successfully passed the factory acceptance test in Trento, Italy.
A statement from the office of the Minister for Power, Engr Abubakar D. Aliyu, said the first batch of the transformers is expected to arrive in Nigeria in September 2022.
The Managing Director of Federal Government of Nigeria Power Company (FGN-Power), Mr Kenny Anuwe, who led a delegation which had engineers from Transmission Company of Nigeria (TCN), witnessed the factory acceptance test conducted on 28th July 2022 in Trento, Italy.
The Minister for Power had led a delegation to Germany in April when he paid visits to Siemens Energy factories in Berlin and Frankfurt, where he held meetings with the senior leadership of Siemens Energy on the need to fast-track the delivery of the early orders that would start the transformation of Nigeria’s electricity.
Commenting on the latest feat on the PPI, Engr Aliyu said: “The successful factory acceptance test shows Nigeria’s engagement with Siemens Energy is on track. It also shows the Federal Government’s commitment to addressing Nigeria’s electricity challenges.”
In December 2021, the Minister for Finance, Zainab Ahmed, and the Minister for Power, Engr Abubakar D. Aliyu, secured the approval of the Federal Executive Council of €63 million (Euro) for the procurement of equipment to boost power supply under the Presidential Power Initiative (PPI)—whose first phase would provide 10 mobile power substations and 10 transformers.
In 2018, President Buhari initiated the PPI that would enable Siemens Energy to upgrade Nigeria’s electricity systems.
Source: https://energynewsafrica.com
Ghana: Frustrated Tanker Drivers Declare Nationwide Strike On August 1
Petroleum tanker drivers’ unions in the Republic of Ghana have declared a sit-down strike from Monday, 1st August 2022 to protest poor working conditions and some decisions by the regulator, NPA, which are affecting them.
The tanker drivers’ unions, comprising Gas Tanker Drivers Union, Ghana National Petroleum Tanker Drivers Union, GOIL Tanker Drivers Union and those who transport premix and aviation pointed out that the regulator has fixed two seals namely biometric and cargo tracking seals on each tanker truck.
While the biometric seal determines the number of products in the tanker, the cargo seal enables the regulator, NPA, to monitor the movement of the tanker.
Speaking to energynewsafrica.com, Chairman of the Ghana Petroleum Tanker Drivers Union, George T. Nyaunu, noted that the National Petroleum Authority (NPA) has been sanctioning his members over claims that they have been tampering with the cargo seal.
He said the sanctions the NPA applies range from a one-month suspension from loading and charging transporters for the alleged tampering with the seal.
He said the drivers cannot be bearing the consequences of acts they have not committed, hence, their resolve to embark on a sit-down strike on Monday.
Speaking to energynewsafrica.com on the same issue, the Chairman of Bulk Tanker Drivers Union, Clement Ampadu, blamed the NPA, Ministry of Energy and Transport Ministry for the plight of tanker drivers in the country.
He said it appears both the Energy and Transport Ministries are not interested in helping tanker drivers to resolve their grievances.
Regarding the alleged tampering with the cargo seal, Mr Ampadu said he wrote a letter and personally delivered it to the Ministry of Transport and shared it with the Minister on WhatsApp.
He said for more than one month, he had not received any response from the sector Minister.
In his response to whether he had attempted to meet the Energy Minister in his office regarding their concerns, Mr Ampadu fumed: “As for Napo (about the Minister for Energy), I don’t want to hear his name in my ears. When they get the power, they think we’re fools. We have been to his office more than ten times to go and meet him but we have been unsuccessful. Anytime my secretary and I go there, the Minister’s secretary will tell us to book an appointment which we will do. We will leave and when we don’t hear from them, we will call and go there again. We have been going there more than ten times and they keep telling us to book appointments.
“So we’re going to park our trucks for the owners and the government agencies who don’t value drivers to go and load the products and transport them by themselves,” he said.
When contacted, the Communication Manager of NPA, Mohammed Abdul Kudus, said the issue of the strike had reached their attention and might respond on Monday.
Source: https://energynewsafrica.com
Ghana: Minority’s Claim BOST Head Office Project Cost Gh¢78Million Is Pure Lies- Says BOST
The Bulk Oil Storage and Transportation (BOST) Company Limited has described as false claims by the opposition Minority Members of Parliament that it has inflated the cost of the contract for its head office building project by 100 per cent.
According to BOST, the initial cost of the project, which started in 2016 under the tenure of Mr Kingsley Kwame Awuah Darko during the Mahama administration, was revalued from $39 million to $49.6 million in 2020 but not $78 million.
The Ranking Member of Mines and Energy, John Jinapor, at a news conference on Thursday, claimed BOST had bloated the cost of its head office building project by 100 per cent.
“We noted from recent developments based on documents available to us that the original contract, which was valued at $39,000,000.00 (Thirty-Nine Million Dollars), ballooned to a whopping $78,000,000.00 if the two-tower building is accounted for based on the current cost of the single unit valued at $39,000,000.00 (Thirty-Nine Million Dollars). This means the building has been inflated by 100% over the original contract,” he said.
However, explaining the circumstances leading to the revaluation of the cost of the project, BOST said when the current government took over office in 2017; there were allegations that the contract was bloated so the project was halted for value for money audit to be conducted.
In a statement issued Friday, BOST said the process was completed in August 2020 with a new value of $49.6 million, considering the time value of money amongst other technical considerations.
“In October 2020, the Board of Directors of BOST resolved that due to financial constraints BOST could not afford the twin-towers but rather proceed to negotiate with the contractor to procure a single block.
“The negotiated cost for the single block was $23.5 million (VAT Exclusive).
“In September 2021, we applied and received a no-objection from the Ministry of Finance to procure the funds from an identified bank.
“The 2020 Auditor General’s report on page 6, clause 13 flagged the Procurement Irregularity by the then management so that meant that this current management had to cure the breach on the original contract ($39 million twin-tower in 2015) before any new variation ($23.5 million single tower in 2020) could be submitted to the Public Procurement Authority (PPA) for approval.”
According to BOST, in May 2022, a letter from PPA with reference PPA/CEO/1079/05/22, following a request for ratification by BOST, the ORIGINAL $39 million contract for the twin-tower was finally ratified.
It further said in May 2022, a request was made to PPA to vary the original $39 million twin-tower contract to a $23.5 million single-tower, and it was granted and paved the way to execute an amendment to the original contract and it was done on the 31st of May 2022.
The company said full documentation and explanation on this project were given to the Parliamentary Select Committee on Mines and Energy as per their request on May 17, 2022, with ref: PS/ME/22/40 and “our response on May 27, 2022, with ref:BOST/SCR.40/PARL/OPRE/SF.1/36734.
“BOST is currently occupying rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of the rising cost of rent in the current premises. The tower blocks are not the same in terms of the facilities they harbour. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented to raise further income for BOST.
“The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous.
“These are the facts about the BOST Head Office building which started in 2016 and is yet to be occupied by the company.
“We, at this point, will urge the Minority to, at least, seek better understanding and clarification of issues before engaging the press because at some points in time, failure to do due diligence could result in embarrassment. It is the contract signed without resort to due process which by law was submitted for ratification by the PPA before any variation of the terms could be attempted by the current management.
“Money has time value and what costs $39 million in 2015 would most likely cost something higher six years later. These are fundamental principles of finance which cannot be overlooked.
“The current management of BOST has used the Procurement Law to correct the anomalies of the processes and through a transparent process decided to acquire half of the twin towers to house their operations.
“With an independent valuer involved, the figures arrived at were a true and fair reflection of the current pricing of the project and we are confident that the decision is in the best interest of the taxpayer.
“We, therefore, urge the public to ignore the ill-informed allegations of the Minority and be assured that BOST is safe and secure in the hands of the current management.
“The ever-loss-making BOST is set to announce a huge turnaround in the next couple of weeks due to the diligence and hard work of the current management. Our collective interest is secured, and we are working hard to ensure better days of fuel security in the country,” the statement concluded.
Click on the link below for PPA’s document
Approval to BoST for Variation (1)
Source: https://energynewsafrica.com
According to BOST, in May 2022, a letter from PPA with reference PPA/CEO/1079/05/22, following a request for ratification by BOST, the ORIGINAL $39 million contract for the twin-tower was finally ratified.
It further said in May 2022, a request was made to PPA to vary the original $39 million twin-tower contract to a $23.5 million single-tower, and it was granted and paved the way to execute an amendment to the original contract and it was done on the 31st of May 2022.
The company said full documentation and explanation on this project were given to the Parliamentary Select Committee on Mines and Energy as per their request on May 17, 2022, with ref: PS/ME/22/40 and “our response on May 27, 2022, with ref:BOST/SCR.40/PARL/OPRE/SF.1/36734.
“BOST is currently occupying rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of the rising cost of rent in the current premises. The tower blocks are not the same in terms of the facilities they harbour. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented to raise further income for BOST.
“The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous.
“These are the facts about the BOST Head Office building which started in 2016 and is yet to be occupied by the company.
“We, at this point, will urge the Minority to, at least, seek better understanding and clarification of issues before engaging the press because at some points in time, failure to do due diligence could result in embarrassment. It is the contract signed without resort to due process which by law was submitted for ratification by the PPA before any variation of the terms could be attempted by the current management.
“Money has time value and what costs $39 million in 2015 would most likely cost something higher six years later. These are fundamental principles of finance which cannot be overlooked.
“The current management of BOST has used the Procurement Law to correct the anomalies of the processes and through a transparent process decided to acquire half of the twin towers to house their operations.
“With an independent valuer involved, the figures arrived at were a true and fair reflection of the current pricing of the project and we are confident that the decision is in the best interest of the taxpayer.
“We, therefore, urge the public to ignore the ill-informed allegations of the Minority and be assured that BOST is safe and secure in the hands of the current management.
“The ever-loss-making BOST is set to announce a huge turnaround in the next couple of weeks due to the diligence and hard work of the current management. Our collective interest is secured, and we are working hard to ensure better days of fuel security in the country,” the statement concluded.
Click on the link below for PPA’s document
Approval to BoST for Variation (1)
Source: https://energynewsafrica.com
Ivory Coast: Eni Drills Baleine East 1X Well And Successfully Tests Block CI-802
Italian oil and gas giant, Eni, has successfully drilled the Baleine East 1X well, the first exploration well in block CI-802 and second discovery on the Baleine structure, offshore La Côte d’Ivoire.
The excellent results have allowed increasing by around 25 per cent in the volumes of hydrocarbons in place of the Baleine Field, which is now estimated at 2.5 billion barrels of oil and 3.3 trillion cubic feet (TCF) of associated gas.
Baleine East 1X was drilled in the CI-802 block, operated by Eni (90%), together with its partner Petroci Holding (10%), using the Saipem 12000 drilling ship.
The well reached its final depth of 3,165 m measured depth in a water depth of about 1,150m.
Baleine East 1X is located about 5km east of the Baleine 1X discovery well in the adjacent block CI-101 and represents the first commercial discovery in the CI-802 block, confirming the extension of the Baleine Field.
The well, following an intense data acquisition campaign, confirmed the presence of a continuous oil column of about 48m in reservoir rocks with good properties. From the vertical borehole, a horizontal drain of 850m in length was subsequently drilled into the reservoir to perform a production test that confirmed a potential of at least 12,000bbl/d of oil and 14Mscf/d of associated gas of production from the well Baleine East 1X.
The activities in the Baleine Field will continue with the drilling of a third well which will ensure, together with the other two already drilled, the accelerated start-up of production, confirming first oil in the first half of 2023-about a year and a half from Baleine 1X discovery well and reaffirming the effectiveness of Eni’s phased development model and fast track.
The results of the Baleine East 1X well and its production performances will allow the optimization of the further full field development phases.
In addition to CI-101 and CI-802 blocks on which the Baleine Field extends, Eni owns interests in five other blocks in the Ivorian deepwater: CI-205, CI-501, CI-504, CI-401 and CI-801, all with the same partner Petroci Holding.
Source: https://energynewsafrica.com
Nigeria: Disco Franchising As Panacea To Distribution Challenges In The Power Sector (Article)
By: Adetayo Adegbemle
While many power sector experts and commentators were complaining that the Electricity Distribution Franchise Licensees franchise areas are just too big for these Licensees to manage, maybe with the exceptions of Ikeja Electric and Eko Disco, it has also become incontrovertible that these licensees cannot meet up with basic obligations, namely reducing the aggregated technical, commercial and collection losses in the power sector.
This inability to dent the ATC&C Losses, which is the base standard for which performance can be easily determined in the power sector, can also be traced mainly to the inability of the core investors to bring the necessary sanitation into the operations of the Electricity Distribution Companies.
Interestingly, the Nigeria Electricity Regulatory Commission, NERC, went round the country in 2016 town hall meetings preaching how the Distribution Company Sub-Franchising would be the next best thing after sliced bread, finally releasing the draft regulation in January 2018
In 2016, the promise of Disco Franchising was that “DISCO franchising operations, if well structured, should allow third party operators provide revenue collection and protection services, fault clearance, network operations and maintenance services, meter reading and inspection services and customer services to electricity customers on behalf of the DISCOs.”
Several models of Franchising were pitched to Nigerians, with the most interesting and attractive one giving the Sub-franchisee the ability to “generate power” or source for alternative power, or buy power directly from the national grid”. It was noted, though, that giving the Discos power and initiative to determine which areas or sub-franchise agreement to enter into has greatly limited the effectiveness of the Sub-franchise framework.
It was therefore a general belief that “Franchising Guidelines is laudable and the efficient and effective implementation of franchise arrangements should generally enable the Discos improve service delivery to end-user customers in franchised areas without compromising the obligations of the Discos to the market and the regulators.”
However, Six years later, with the Discos still faltering to meet up with demands of Nigerians, the implementation of the Disco Sub-Franchising, like the Meter Assets Regulation, has refused to bring the spark expected by Advocates and electricity supply industry watchers.
Reports has indicated that some Distribution companies have implemented what “suits their private agenda” in allowing third parties to collect revenues as sub-franchising, the rest of the Sub-franchise Framework has remain largely a tug of war between interested Nigerians, and the Distribution Companies.
Coincidentally, there are two unrelated events that has come together to ask for a shift in the way we do things, and demanded that this matter of Distribution sub-franchising be looked at again, this time seriously, that the initiative be taken away from the Distribution companies.
First event is the final financial meltdown of Core Investors and taking over of their shares by banks they are indebted to. Since December 2021 taking over of the 60percent shares of the Core Investors in Abuja Electricity Distribution Company by UBA, we have since seen similar capitulation of Benin, Kaduna, Kano Distribution Companies to Fidelity Bank, while the tussle for the life of Ibadan Electricity Distribution Company, IBEDC, between the core investors and Assets Management Company of Nigeria, AMCON is still ongoing. The Port Harcourt Electricity Distribution Company too has gone quietly into Administration.
The second interesting event was the announcement by the Nigeria Electricity Regulatory Commission has signed a commercial agreement with the Transmission Company of Nigeria (TCN), Generating Companies ((GENCOs) and the Distribution Companies (DISCOs) to rave-up electric power supply to 5000 MW starting from July 1st 2022.
While the Regulatory Commission has said the 5000MW target is in phases, and that the gas is yet to fully align with this objective, though they are working on, a major and critical aspect they should not overlook in this subtle and coded migration to proper market-based electricity market is the Distribution Sub-franchising.
The present structure for Distribution Franchise as we have it is not efficient and effective enough to move the market to a 50, 000MW in the next 10years.
This is the time to break the large unmanageable geometrical areas into better and efficiently managed areas.
The sub-franchising model is definitely the pathway to ensure that more Nigerians get involved and are able to bring their expertise unto the table, and definitely reduce the ATC&C Losses that has become an albatross for the electricity market.
The Regulatory Commission should also take a leaf from the performance scoresheets of the newly privatized Yola Electricity Distribution Company that has posted the Top 2 results in just six months of new management taking over.
Distribution Sub-Franchising is a sure bet way of introducing and injecting new bloods, funds, effectiveness into the electricity distribution channels. Less geographical coverage area also comes with the benefits of better and effective regulatory oversight, and the ease of “moving blocks” without having too much effect on the larger body.
Electricity Distribution Sub-franchising will definitely facilitate an improvement in the quality-of-service delivery to end-user customers and industries, and address the liquidity challenges in the NESI.
With this, we can finally enter a fully operational electricity market based on Contracts.
Adetayo Adegbemle is a public opinion commentator/analyst, researcher, and the convener of PowerUpNigeria, an Electric Power Consumer Right Advocacy Group, based in Lagos. (Twitter: @gbemle, @PowerUpNg)
Ghana: MP For Lower Manya Krobo Charged For Stealing Power
A Ghanaian legislator Ebenezer Okletey Terlarbi has been charged by the Electricity Company of Ghana (ECG) for engaging in illegal connections and consuming power freely.
Ebenezer Okletey Terlarbi, a Member of Parliament for Lower Manya Krobo, in the Eastern Region of Ghana, according to a letter sighted by energynewsafrica.com, has been charged for tampering or interfering with ECG’s meter and unauthorised service connection.
The power distribution company, weeks ago, started the installation of pre-payment meters in the Lower and Manya Krobo area as part of an effort to prevent the continuous accumulation of bills owed to the former by electricity consumers in the area.
ECG, according to our sources, replaced the MP’s postpaid meter last Saturday afternoon after the MP had allegedly granted ECG officials access to his premises to install the meters.
However, a few days after the installation, the MP held a press conference and accused ECG of disrespecting his office by not informing him before going to his premises.
He argued that though he would not have resisted the exercise, notifying him of their coming would have fostered trust among both sides.
According to energynewsafrica.com‘s sources, ECG officials returned to the MP’s house on a routine check only to discover that the prepaid meters had been removed.
Surprisingly, the MP had illegally reconnected his house with power contrary to LI 165(1999) and LI 1702 (2002) which criminalise the act.
The letter stated that the MP is required to report to the ECG office within 72 hours of the issuance of the letter.
Per the reading on the MP’s postpaid meter, the MP consumed power to the tune of Gh¢5,510.31 from January 2022 to date.
Already, the MP is owing ECG an outstanding electricity bill to the tune of Gh¢30,209.42 between 2017 and 2021.
Attempts to reach the MP on his mobile phone and through text messages have proven futile.
Source: https://energynewsafrica.com
The letter stated that the MP is required to report to the ECG office within 72 hours of the issuance of the letter.
Per the reading on the MP’s postpaid meter, the MP consumed power to the tune of Gh¢5,510.31 from January 2022 to date.
Already, the MP is owing ECG an outstanding electricity bill to the tune of Gh¢30,209.42 between 2017 and 2021.
Attempts to reach the MP on his mobile phone and through text messages have proven futile.
Source: https://energynewsafrica.com Nigeria: Central Bank Of Nigeria Seeks Order To Freeze Accounts Of Ten Companies Over ‘Diversion Of Funds For Prepaid Meters’
Nigeria: Central Bank Of Nigeria Seeks Order To Freeze Accounts Of Ten Companies Over ‘Diversion Of Funds For Prepaid Meters’
The Central Bank of Nigeria (CBN) has filed a suit at a High Court in Lokoja in Kogi state to freeze 157 accounts of Meter Asset Providers (MAPs) for allegedly diverting funds meant for the procurement of prepaid meters.
According to a report by the Cable, the apex bank is seeking to restrict the account of 10 companies that received power sector intervention funds under the National Mass Metering Programme (NMMP) for 180 days pending the outcome of its investigation.
The companies identified by the CBN include Mojec Meter Asset Management Company Limited, Integrated Power Nigeria Limited, Holley Metering Limited, Protogy Global Services Limited and Turbo Energy Limited.
Others are G Unit Engineering Limited, Koby Global Engineering Services Limited, FLT Energy Systems Limited, Smart Meters Asset Provider Company Limited and Cresthill Engineering Limited.
“The Central Bank of Nigeria reviewed the activities of twelve (12) including the defendants herein Meter Asset Providers (MAPs) alleged to have diverted the Central Bank of Nigeria’s power sector intervention funds under the National Mass Metering Programme (NMMP),” the apex bank said.
“The review was aimed at ascertaining the flow of the funds made available to the MAPs, covering the period 1st January, 2020 to 15th March, 2022. The preliminary review revealed that the defendants diverted a substantial portion of the funds for other uses through related entities and individuals/companies connected to the electricity distribution companies (DisCos) and the defunct Power Holding Company of Nigeria (PHCN).
“The diversion of the power sector intervention funds under the National Mass Metering Programme (NMMP) provided by the applicant’s banks, has further occasioned grave instability in the power sector and sustained the estimated billing regime which the federal government is making frantic efforts to make a thing of the past.
“The diversion of the said funds through the bank accounts of the defendants has continually undermined the applicant’s bank intervention system of supporting various sectors of the Nigerian economy.
“The diversion of the said funds and sustained instability in the power sector is capable of causing significant economic and financial loss to investors, as well as the entire systems and the Nigerian economy in general, if not curtailed.”
On April 3, 2018, the Nigerian Electricity Regulatory Commission (NERC) introduced the MAP regulation to new investors to fast-track the rollout of meters through the engagement of third-party investors.
The DisCos were expected to engage the services of the MAPs within 120 days from the effective date to achieve a three-year metering target prescribed by NERC.
Despite the late start over lack of cooperation by DisCos as regards engaging licensed firms, the meter asset firms were issued permits to begin the rollout of new meters by May 1, 2019. To boost the new policy, the federal government provided a N37 billion grant for the supply of the meters.
In October 2020, the federal government flagged off the National Mass Metering Programme to close the metering gap in the NESI by December 2021.
Speaking a week after the launch of the programme, Engr. Sale Mamman, former minister of power, said there would be an installation of at least one million meters for electricity consumers through the mass metering programme by December 2020.
In June, the NERC said it will begin the second phase of the National Mass Metering Programme (NMMP) in August 2022.
The latest data from the 2021 third-quarter report of the NERC shows that of the 11,069,200 registered energy customers as of September 2021, only 4,753,027 (42.93%) have been metered.
Source: https://energynewsafrica.com