UAE-based independent power producer (IPP) AMEA Power has signed the concession agreement and power purchase agreement (PPA) for the construction of a 100 MWp solar photovoltaic plant in Tunisia.
The plant will be located in the governorate of Kairouan in the center of the country.
“This is a great step for Tunisia and AMEA Power. As part of the government’s Vision 2030 for new energies, Tunisia aims to increase the share of renewable energy in its energy mix to 30% by 2030, which corresponds to an additional installed capacity of about 4 GW,” says Hussain Al Nowais, President of AMEA Power.
The future solar photovoltaic power plant in Kairouan will have a capacity of 100 MWp, or an expected annual output of 223,171 MWh.
The IPP estimates that its clean energy plant will allow Tunisia to avoid 113,525 metric tons of CO2 emissions on an annual basis. In keeping with the spirit of this type of public-private partnership (PPP) project, the electricity produced will be sold to the Société tunisienne d’électricité et du gaz (STEG).
AMEA Power was awarded the concession under an international bidding program launched by the Tunisian Ministry of Industry and SMEs (small and medium-sized enterprises) in 2018. IPP responded to the tender in a consortium with Chinese company Xinjiang New Energy. The two partners plan to start work in late 2022.
This project will support the energy transition desired by the Tunisian authorities. Tunis has also recently committed to implementing a policy aimed at reducing its dependence on gas for electricity production, in a global context marked by rising prices for this fossil fuel. The Tunisian government wants to carry out administrative reforms to develop an installed solar capacity of 3.8 GW by 2030
Criminal activities by some residents of Tamale in the Northern Region of Ghana is making the Northern Electricity Distribution Company (NEDCo) lose GH¢8.5 million every month.
The power distribution company, which supplies electricity to Tamale, Techiman, Wa, Bolgatanga and Sunyani, has been losing 45 per cent of power supplied in the Tamale Metropolis through power theft, popularly known as illegal connection by the residents.
“Look, we’re losing GH¢8.5 million in Tamale alone every month. We provide services in Bolgatanga, Wa, Techiman, etc but none of these is happening in the other locations,” Mr William Kwame Asare, Chairman of Senior Staff Association of NEDCo, said in a telephone interview with energynewsafrica.com.
The staff of NEDCo and VRA are currently on strike over attacks on them by some residents who have been engaging in power theft in Tamale.
Mr Asare told energynewsafrica.com that residents of Tamale are always ready to welcome the staff of NEDCo to their homes to attend to faults and other electrical problems but said anytime the staff went into the town to undertake revenue mobilization exercise, they were beaten and assaulted.
He recounted that on Tuesday, March 8, 2022, a group of staff including casuals, went out on a disconnection exercise at Koblimagua, a suburb of Tamale, and one casual staff, Mr Leban Bani Issah, was attacked with cutlasses as well as machetes and was nearly killed by some residents after disconnecting a house for power theft.
He said the staff sustained cutlass wounds and bled profusely as a result of the assault.
According to him, the victim is currently on admission but is responding to treatment.
He continued that Edmond Dakura, a staff with the Loss Control Unit, was assaulted and his mobile phone was seized while on a routine monitoring exercise at Gambini, a suburb of Tamale.
This, Mr Asare explained, occurred while the victim was disconnecting a customer for an illegal connection.
He further recounted that the Loss Control team was attacked at Gbolo Kpatsi, a suburb of Tamale when they attempted to disconnect a customer who had reconnected himself after being disconnected for an illegal connection.
“The staff had to run and to also save the vehicle from being vandalized,” he narrated.
Then on February 22, 2022, Abdul Washie, a staff with the Electrical Maintenance team, was attacked and assaulted by a mob at Gbolo Kpatsi while carrying out troubleshooting to repair a fault.
He said these attacks and many other intolerant actions of the residents have made their routine exercise very risky and would, therefore, not go out to risk their lives.
In a statement, the Management of NEDCo described the actions of the Tamale residents as regrettable and called on the public to support to fight the canker.
Source: https://energynewsafrica.com
Kenya Power has reported an Sh3.82 billion ($33,450,087.47) profit after tax for the half-year to December 31, as the company cements its way back into profitability.
This is compared to Sh138 million ($1,208,406.30) posted in a similar period in 2020.
Profit before tax for the period under review was Sh5.66 billion, compared to Sh332 ($2,907,180.38) million realised in a similar period the previous year.
Management has attributed the stellar performance to an increase in sales, enhanced system efficiency and lower operating costs.
Electricity sales recorded a 366GWh increase to 4,562GWh, an 8.7 per cent growth compared to a similar period in 2020.
“This was driven by an increase in customer connectivity, as well as improved supply quality and reliability due to enhanced preventive maintenance works, network refurbishment, and accelerated faulty meter replacements,” management said in a press statement.
This, combined with a 2.33 per cent improvement in system efficiency, which stood at 77.13 per cent as of December 31, 2021, led to a 12.9 per cent increase in electricity revenue which grew to Sh69.447 billion.
Operating costs decreased from Sh20.1 billion to Sh19 billion as a result of enhanced cost management and resource optimization initiatives that the company is implementing as part of its turnaround strategy, it said.
The electricity distributor bounced back to profitability last year after a series of losses.
It reported Sh1.5 billion in net earnings for the year ended June 30, compared to an Sh939 million loss last year.
In the half-year to December, non-fuel power purchase costs increased from Sh38.123 billion incurred in the previous period to Sh40.487 billion mainly due to additional unit purchases to support increased demand.
Similarly, fuel costs increased from Sh4.618 billion to Sh10.871 billion mainly due to a 314 GWh increase in units purchased from thermal plants to 709 GWh due to low hydrology resulting from delayed rains, and an upsurge in fuel prices.
Finance costs increased to Sh6.8 billion from Sh6.601 billion the previous period, mainly due to a rise in unrealised foreign exchange loss resulting from the depreciation of the Kenya shilling against major currencies.
Overdue customer debt, for the first time in five years, recorded a reduction of Sh900 million as a result of enhanced field presence, continued government intervention with state agencies, and increased customer engagements, it said.
“In the second half of the year, the business will primarily focus on domestic and SME customers who currently account for 67 per cent of the company’s outstanding debt,” management has affirmed.
It said the company continues to roll out a proactive strategy to enhance its cash position which is premised on the prioritisation of payments of outstanding obligations.
As a consequence, the company reduced trade and other payables by over Sh4 billion.
In addition, the business cleared overdrafts amounting to Sh3.6 billion.
Further to this, the company closed the first half of the financial year with a cash position of Sh8.347 billion which includes ring-fenced funds projects, receipts from the government for the Last Mile, and street lighting programmes, as well as funds for scheduled loan repayments.
“As Kenya Power marks a century of service to Kenyans, the Company is using this opportunity to take stock of the state of its business which is operating in a highly dynamic and complex environment, whilst laying the foundation for its future,” management said.
As a consequence, the business is at the height of concerted reforms aimed at enhancing its ability to deliver on its core mandate, by making it more efficient, agile and customer-led, it added.
Source: https://energynewsafrica.com
The staff of the Volta River Authority (VRA) and Northern Electricity Distribution Company (NEDCo) in Tamale in the Northern Region of Ghana have begun a strike action to demand better protection after complaints of attacks on them by residents who are engaging in power theft.
A communiqué issued to management and copied to the press read: “Residents in the Metropolis are bent on preventing VRA/NEDCo staff from doing any revenue mobilization activities.
“We, the staff of VRA/NEDCo, resolve that our lives are under persistent threats and attacks hence it’s not safe for us to go out there and perform our legitimate work.”
The staff only plan to resume work if “the perpetrators of all these attacks or assaults are identified, arrested and made to face the full rigours of the law.”
They also want “military assistance and round the clock protection provided for our staff and offices.”
It would be recalled that in September 2021, NEDCo withdrew some services following similar attacks and the vandalisation of their Tamale Area Office by some youth, leading to some parts of Tamale being without power for days.
The staff resumed full services after several engagements and assurances from local government and traditional authorities.
Checks by energynewsafrica.com have revealed that the Management of VRA and NEDCo have been meeting with workers and authorities in the area to resolve the issue.
Source: https://energynewsafrica.com
Nigeria’s power transmission company, TCN, has dismissed a report suggesting that it has reduced load allocation to various power distribution companies in the country, thereby, leading to load shedding experienced across the country.
According to TCN, the claim that it has reduced load to Discos is incorrect.
In a statement issued by Ndidi Mbah, General Manager in charge of Public Affairs, TCN explained that the current load shedding is a result of the shortfall in generation from the various power generation companies.
Absolving itself of blame, TCN said its role is to transmit the quantum of power generated by the Generation Companies (GenCos) through the national grid to distribution load centres nationwide based on an approved percentage (formula approved by NERC) of the total generation available per hour or on the day-ahead nomination.
“Presently, the cumulative generation nationwide is low and generation companies have attributed this to several factors including poor gas supply, fault in generating units of generating companies, scheduled and unscheduled maintenance, all of which have caused most power generating companies to limit their generation, and sometimes not generate at all,” TCN explained.
It added that “A summary of the power generating profiles in the last two months, for instance, clearly shows that fourteen (14) gas-powered generating stations were either not generating at all or had limited generation at various times within the period, further depleting the quantum of power generation available for transmission into the grid daily. Power generating stations in this category include; Omotosho units 5 & 6, Olorunsogo units 3, 4 & 6, Omoku units 3 & 6, Omotosho NIPP units 3 & 4, Delta units 15, 17, and 18, Afam VI units 11 & 12, Olorunsogo NIPP unit 3, Ihovbor NIPP unit 2, Sapele Steam unit 3, Sapele NIPP unit 1, Odukpani NIPP units 1 & 3, and Okpai units 11, 12 & 18.
“Also, within the same period, Jebba Hydro and Shiroro Power Generating Stations were either out or had limited generation, causing additional loss of 232MW from the grid, while other power generating plants such as Omotosho units 3&4, Olorunsogo units 1, Delta units 10 &20, Afam VI unit 13, Ihovbor NIPP units 4, Geregu NIPP units 22&23 and Odukpani NIPP units 2, 4 & 5, have also been out either on fault or for scheduled maintenance, causing a further loss of about 3,180MW from the grid.”
TCN said a combination of the above scenarios has persisted and the total effect on the grid is a persistent low generation, which TCN Operators have had to strive to dispatch in a way that will not jeopardize the stability of the grid.
It noted that from the 1st to 4th of March, 2022, there was a gas generation shortfall due to water management in Shiroro and Jebba hydro with the loss of 307MW and 125MW respectively from both stations adding that within the same period, there were fault and technical problems in Egbin, causing 514MW shortfall and in Geregu causing 230MW shortfall, while reported fault at Alaoji NIPP reduced generation from the substation by 263MW.
“Gas constraint alone in Olorunsogo gas generating plant reduced generation from the station by 104MW, in the same vein, Omotosho gas lost 102MW and Sapele NIPP lost 263MW. In Omotosho NIPP, there was a generation shortfall of 233MW and in Omoku a shortfall of 112MW. Two units in Okapi have limited generation due to technical problems causing a 204MW drop in generation and Afam VI 511MW drop in generation.
“Gas constraint and fault in Olorunsogo NIPP reduced generation by 240MW, Geregu NIPP by 435MW, and Ihovbor by 142MW. Also, due to gas pipeline pigging, Odukpani NIPP was SHUT DOWN which caused a reduction of generation by 575MW.
“It is important to note that except cumulative power generation increases considerably for TCN to transmit to distribution companies nationwide, TCN will be left with no choice but to continue to load shed.”
TCN, however, assured that it would continue to work hard to ensure the efficient allocation of the total load generated by the power generating stations into the grid, bearing in mind the need to ensure that the national grid is stable despite the challenges posed by the insufficient load on the transmission grid.
Source: https://energynewsafrica.com
Tullow Oil plc has posted a gross profit of $634 million for the full year 2021, representing a jump of $231million from the gross profit of $403million it recorded in 2020.
The independent oil and gas exploration and production group per its full year results for the year ended 31 December 2021 released on Wednesday, March 9,2022, recorded revenue of $1.27billion and a loss after tax of $81 million primarily driven by exploration costs written off, impairments, restructuring costs and other provisions.
Capital and decommissioning expenditures for the full year amounted to $263 million and $69 million respectively.
The company’s underlying operating cash flow for the year amounted to $711 million while reporting a free cash flow of $245 million.
Tullow said its full year operating costs reduced to $269 million (2020: $332 million), driven by lower facilities operations and maintenance costs in Ghana, as well as asset disposals in Equatorial Guinea ($23 million).
Cash operating costs excluding COVID-19 operating procedures and shuttle tanker operations in Ghana, were $12.1/boe (2020: $11.8 /boe).
According to Tullow, its group working interest production averaged 59.2 kboepd, in line with guidance with notable production growth from Jubilee in Ghana and Simba in Gabon, but lower production than expected from TEN and Espoir.
“In Ghana, strong performance delivered across key operational areas of FPSO uptime, water injection and gas processing. Drilling recommenced in April, with four wells and a work over successfully completed, ahead of plan,’’ Tullow said.
Announcing the results, Tullow Oil Chief Executive, Mr. Rahul Dhir said “Following a transformational 2021, in which Tullow successfully refinanced its balance sheet, drilled highly productive wells in Ghana and demonstrated operational excellence and financial discipline across the Group, we are now concentrating on the successful delivery of our long-term business plan. This year will see a great deal of activity at our flagship Jubilee field with investment in new infrastructure and new wells to grow production in the near term and we are taking on the operation and maintenance of the FPSO.
“At TEN, we will drill two important, strategic wells that will help define our future plans for the fields and we will continue to build production in Gabon. I also expect us to make tangible progress towards our ambitious target of achieving Net Zero by 2030. With additional opportunities to deliver value across our portfolio, including gas commercialisation in Ghana, our revised Kenya development project and an exciting well in a proven play in Guyana, we are well-placed to deliver value from our assets and to grow our business.”
Source: https://energynewsafrica.com
Despite global capital expenditure having been on a downward spiral between 2014 and 2020 owing largely to COVID-19 pandemic spending trends and energy transition related divestment in Africa, the African Energy Chamber (AEC) project that capital expenditure within Africa’s oil and gas industry to increase in 2022 and beyond.
According to the organization’s Q1 2022 report, The State of African Energy, capital expenditure within Africa’s oil and gas sector will reach $30 billion in 2022 after a decline from $60 billion in 2014 to $22.5 billion in 2020.
This provides an opportunity for both mature and emerging hydrocarbon producers to establish investor-friendly regimes to attract capital and accelerate project development continent-wide.
At the current expected project sanctioning levels, upstream spending towards 2025 is expected to see an increase. Deferred projects and the projects originally slated for investments from 2022 onwards will together have the potential to contribute to a significant growth potential. Should the projects materialize, the potential expenditure may increase to almost US$49 billion by 2024.
Investments related to onshore projects represent the single greatest category with investments reaching over US$68 billion during the 2022 – 2025 period. Big investments are also expected in Uganda and Kenya related to the greenfield onshore development of Lokichar basin.
This greenfield development may be one of, if not the last, big conventional onshore project in the world. Subsea tiebacks will take the second spot in 2022 – 2025 cumulative spending and are likely to be more and more common as it makes commercial sense to piggyback smaller hydrocarbon accumulations on existing infrastructure.
This category also includes the offshore related part of Liquefied Natural Gas (LNG) developments which further boosts this category in light of the mega-projects expected in Mozambique.
Years 2020 and 2021 showed that the African oil and gas industry was one of the hardest hit in the aftermath spurred by the COVID-19 outbreak. The initial after-effects of the demand vacuum and price crash caused by the pandemic led to production sanctions imposed on the African OPEC member nations. The initial reaction from the operators included delays to the projects with high breakeven prices, reduction of capital and operating expenditure, and cashflow neutral forecast at lower oil price curves. However, as the region saw a few project sanctions, 2022 – 2025 forecast now shows a relatively increased spending. To be noted, Q4-2020 versus Q4-2021 capital expenditure comparison showed a contraction of about US$33.5 billion during the same period.
“Africa’s oil and gas industry is set to see an influx in investment in 2022. Despite COVID-19 pandemic and energy-transition-related financial restrictions in 2020 and 2021, the sector will see an uplift in 2022, with capital expenditure expected to increase to $30 billion this year. This marks a critical opportunity for African producers to ramp up production, spur exploration and get sizeable projects off the ground,” stated Sergio Pugliese, President for Angola at the African Energy Chamber
Meanwhile, a number of upcoming major projects in Africa are driving the majority of the greenfield expenditure in the short term. The majority of the volumes are to be sanctioned and developed are natural gas with projects like the Area 1 LNG project in Mozambique and the Greater Tortue Ahemyim Floating LNG project offshore Senegal-Mauritania leading the list. Other projects include the TotalEnergies-led Tilenga project in Uganda; the Sonatrach-led AT (Isarene) project in Angola; the TotalEnergies-led Cameia-Golfinho project in Angola; and the Eni-led Quiluma/Maboqueiro project in Angola.
Despite the anticipated increase in capital expenditure within Africa’s oil and gas industry in 2022, the continent’s full energy potential is yet to be exploited. In this regard, and with an objective to ensure the continent is well-positioned to develop all of its resources, the AEC’s annual conference, African Energy Week (AEW) 2022 – taking place from 18 to 21 October in Cape Town – represents the most suitable platform for discussions on Africa’s energy future. Through collaborative panel discussions and industry-advancing investor summits, AEW 2022 will host conversations on how African hydrocarbon producing countries can boost investment to unlock the continent’s full oil and gas energy potential.
Source: https://energynewsafrica.com
Italian energy group Eni has suspended the purchase of oil from Russia following its invasion of Ukraine and is watching developments closely with regards to gas procurement.
“Eni has suspended the stipulation of new contracts related to the procurement of oil and oil products from Russia,” the company said in emailed comments on Wednesday.
Western sanctions imposed after the invasion of Ukraine have already cut off Russia from international trade and financial markets. Until this week its energy exports were exempted from the sanctions regime.
But on Tuesday U.S. President Joe Biden announced a broad ban on oil and other energy imports from Russia which is the world’s biggest exporter of oil and natural gas.
Eni, which had already frozen joint ventures with Russian oil group Rosneft following sanctions imposed in 2014, also has long-term take-or-pay gas contracts with Gazprom .
Earlier on Wednesday, when asked what it would do with these contracts if sanctions on Russia’s energy sector tightened, it said it would fully “honour every decision taken by the European and Italian institutions”.
This week European Union leaders are set to try and phase out the EU’s dependency on Russian energy sources, including Russian gas which accounts for 45% of the bloc’s import requirement.
Eni, in which the biggest shareholder is the Italian state, bought 22.5 billion cubic metres (bcm) of Russian gas in 2020 out of a total of around 62 bcm.
Last week it said it would sell its stake in the Blue Stream pipeline carrying Russian gas to Turkey co-owned with Russian gas giant Gazprom
Italy, which uses gas to generate some 40% of electricity, imports more than 90% of its gas needs, with Russian piped flows accounting for around 40%.
Since Russia invaded Ukraine, Italy has ramped up efforts to secure alternative gas sources in producer countries like Algeria, Qatar and Azerbaijan.
Eni, which has extensive gas resources in Africa, has strategic long-term gas contracts with Algerian state energy giant Sonatrach.
Source: Reuters
“Ghana should have been raking in more revenues from the soaring crude oil prices on the international market had the leadership been proactive by ensuring that there is increasing exploratory activities at the country’s offshore oil fields,” the Executive Director of the Institute for Energy Policies Research (INSTEPR) Kwadwo Nsafoah Opoku says.
Crude oil prices have been soaring on the international market following the Russian invasion of Ukraine.
As of about 6am Thursday, International Benchmark-Brent was trading at US$ 112.6 per barrel.
Mr Kwadwo Opoku believes Ghana would have profited from the windfall from the rising oil prices since the government pegged the country’s oil price at US$62 per barrel in the 2022 budget.
In a press statement, Mr Kwadwo Opoku said Ghana, for the past eight years, has not done any exploration activity in the upstream to increase oil production, noting that production at the three oil-producing fields keeps declining.
Checks by energynewsafrica.com indicate that Ghana’s production has dwindled from 200,000 bbl to 153,000 bbl.
Kwadwo Nsafoah Opoku,Executive Director for INSTEPR
Quoting a report by the Public Interest and Accountability Committee (PIAC), which suggested that Ghana produced a total of 27,767,859.00 barrels of crude oil for the first half of 2021 from the Jubilee, TEN and SGN, representing an 18.9 per cent reduction from the first half of 2020, Mr Kwadwo Opoku said the situation has not improved in 2022.
Mr Kwadwo Opoku noted that from 2013 till date, 10 companies signed Petroleum Agreement with Ghana but only Springfield E&P has undertaken exploration activities leading to unitisation talks with Eni.
“It is beyond comprehension that Petroleum Agreements which were for seven years have not been abrogated with no work done for over eight years. Most of these 10 companies have not fulfilled their minimum work obligations under the Petroleum Agreement,” he stated.
Touching on the maiden licensing bid round, Mr Kwadwo Opoku said ENI/Vitol and First E&P were the winners for this bidding process but four years on, the government has not completed negotiation with the companies for work to begin.
“The decline in production and no upstream exploration activities means that Ghana is deprived of the needed revenue that we would have otherwise received from high international crude prices. Imagine our daily production was over 300,000 barrels per day…Ghana would have done more lifting resulting in more money for all facets of the economy, even to local government common fund which gets 5% of ABFA (Annual Budget Funding Amount). It is interesting to note that the decline in production is also affecting GNPC’s financial position since they are receiving less money year on year.
“The Upstream and Midstream are in a mess and INSTEPR does not see any policy direction to correct the situation.”
Touching on the Voltaian Basin project, Mr Kwadwo Opoku expressed shock at why it has taken GNPC more than years to complete a 2D seismic survey of the area.
“The sad part of the Voltaian Basin story is, the current Petroleum Act does not make provisions for onshore exploration.”
M.r Kwadwo Opoku, who cautioned that Ghana at this rate will catch the Dutch Diseases sooner than later, called on the government to urgently start a stakeholder’s consultation to find solutions to these tough times ahead.
Source: https://energynewsafrica.com
South Africa’s renewable energy industry has received an R600 million boost from foreign funders.
The Norwegian Investment Fund, Norfund and UK development finance institution CDC Group last Thursday signed a memorandum of understanding with broad-based black economic empowerment investment company H1 Capital to fund 2.4 GW of new wind and solar projects.
The projects form part of bid window five of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The projects will generate 6400 GWh per year.
H1 Capital is an investment and development company which has funded several renewable energy projects in South Africa. It has a 49% stake in three solar hybrid storage projects that were announced as preferred bidders in the Risk Mitigation Independent Power Producer Procurement Programme – Kenhardt 1, 2 and 3.
The projects are to be developed by Norwegian firm Scatec and will be based in the Northern Cape.
Under bid window, five of the REIPPPP H1 is co-invested in 21 projects under four sponsors – namely Scatec, Redrocket, EDF and Globeleq Mainstream.
The funding to H1 entails R360 million from Norfund and R240 million from CDC Group.
The investment supports pledges Norway and the UK made at COP26 at Glasgow last year to scale up climate finance to Africa.
At COP26, Norway announced a new Climate Investment Fund, to be managed by Norfund.
This deal is the first investment under the new fund.
CDC Group – which will soon be named British International Investment – has funded multiple projects in South Africa in the past, having invested over $367 million (~R5.6 billion) in the country. These investments include an equity stake and loan provided to Trans-Africa Concessions to finance a 440km motorway between Witbank and Maputo.
Other renewable energy investments in the country involve backing for independent power producer Globeleq’s six wind and six solar power projects and the Redstone concentrated solar power plant.
The investment in H1 marks the CDC Group’s first broad-based black economic empowerment deal.
Thithi Kuhlase-Maseko, head of CDC Group’s SA office, said that the deal helps achieve their aims to promote sustainability and inclusiveness. “This investment marks another key step toward fulfilling our pledge to devote greater capital to fund clean infrastructure and support South Africa on its path towards just energy prospects.”
At the signing ceremony Norway’s Minister of International Development, Anne Beathe Tvinnereim, noted that the deal would support access to clean energy, facilitate the reduction of fossil fuels and support job creation. The pipeline of projects would help avoid carbon emissions of 6.2 million tons – which is 12.5% of Norwegian emissions, said Tvinnereim.
“We are in this together. We need to think globally, and we need to pull together, and we need action now,” she added. Tvinnereim expressed optimism that this would be the first of many more mutually beneficial partnerships contributing to a just transition in SA.
Commenting on the significance of the deal, H1 CEO Rayburn Hendricks said that the projects are capital intensive. Capital is scarce, and to achieve the country’s objectives for clean energy, “long-term patient capital” is needed.
While R600 million has been pledged, the total exposure to rollout projects is “multiples” of that figure. However, he explained that the R600 million forms an “equity layer” that is often harder to raise from the market than debt. The funding secures H1’s financial commitment to the projects it is invested in.
“From H1 we are ready to do the job that is expected of us. This is something we worked on for a very long time… we are able to perform our obligations.”
Hendricks is hopeful the partnership with Norfund and CDC Group can be replicated with other projects and players in Sub-Saharan Africa.
Both CDC Group and Norfund affirmed commitments to supporting private sector energy developments.
As the prices of crude oil keep soaring on the international market, Dr Babajide Agunbiade, a fellow of the Nigerian Society of Engineers and Director at National Oilwell Varco, has shared his perspective on the current situation on what it means to consumers and oil-producing nations.
Introduction
Oil tops over $100 per barrel, the highest seen in more than seven years following the 2014 recession, Russia – Saudi Oil war, and Covid-19 pandemic, among others. Higher projections are anticipated due to the ongoing Russia-Ukraine tension, which has already further driven up international crude oil prices. The invasion of Ukraine has heralded concerns about global energy supplies at a time when global economic recovery is still fragile, and inflation is surging.
https://www.purc.com.gh/
The gradual recovery from the two-year Covid-19 pandemic hit and high oil prices will likely translate into higher pump prices which inadvertently will have an enormous economic impact on economies dependent on imported oil. However, the impact of higher oil prices on economic growth in OPEC countries would depend on various factors, mainly how the unexpected gain in revenues is managed.
2. Global Oil Price Increase and Its Implication
Oil prices remain an important determinant of Nigeria’s economic performance as it has a significant effect on Nigerian foreign exchange earnings. It is the basis upon which government budgeting, revenue distribution, and capital allocations are determined (Musa et al., 2019). Hence, an increase in oil prices leads to an increase in foreign exchange earnings. Conversely, a decline in oil price leads to shortened revenues in dollars, causing exchange rate volatility, and rightly so as Nigeria’s economy is monolithic with crude oil as the major source of foreign exchange earnings.
Thus the cascading effect of an increase in oil prices cut across the entire economic ecosystem and food chains, as highlighted in this article.
2.1 Operators and Servicing Companies
This price increase provides additional incentive to produce more oil so as to maximize profits and plug shortages, which will increase investments in the exploration and production of Oil and Gas. This bears good news for EPCI contractors and other Servicing Companies who can profit from the increased investment with proper positioning. Key services that are expected to get more jobs to include Maintenance and Repairs to improve efficiency and output on already existing facilities, Retrofits, and Upgrades which will be focused on increasing the capacity of facilities as well as well-drilling and appraisals.
2.2 Jobs and Workforce Retention
The oil price crash of 2020 triggered layoffs and an increase in unemployment. With the new $100 per barrel outlook, capital projects which has been suspended over the last 2 years are coming back alive, and increased employment in the Oil and associated Industry is envisaged.
2.3 Government Budgets
Higher oil prices will favor oil-producing countries such as Nigeria and Ghana as they have higher revenues and can utilize the additional income to increase national reserves as well as budgetary spending. These funds can be used to finance investments in critical sectors of the national economy such as healthcare and education, as well as for infrastructure projects such as roads, rail lines, and ports to facilitate trade. Investment in infrastructure will improve quality of life, create jobs and opportunities, and help build more robust economies. This will also reduce the burden associated with borrowing and financing loans and can help strengthen the national currency in the foreign exchange market.
2.4 Inflation and Manufacturing
The current global energy mix depends on oil and gas, which supplies about 60% of global energy consumption required for manufacturing, transportation, and various other key sectors. The effects of shortages and increased prices present new difficulties for various industries that will seek to remain profitable and increase prices. The effects on the Nigerian economy, which relies solely on imports for the supply of petroleum products despite being an oil-producing country, will be damning as this reliance on imports can drive inflation figures higher and further weaken her economy and the buying power of the citizenry.
2.5 Ordinary Citizens, Households, and Small Businesses
Sub Saharan’s power sector is significantly underperforming. This has necessitated the dependence of ordinary citizens, households, and businesses that need electricity on PMS or AGO to power their homes and business. For decades, in Nigeria, trillions of naira have been spent on the subsidy of petroleum products, and the apparent will of the present administration to stem the continuous theft of government funds through subsidy has been defeated by widespread agitations from labour and many civil society organizations who dread the consequence of a free market where the prices of these petroleum products will rise with oil prices, and personal expenses will skyrocket and lead to further hardship for the common man. But in actuality, now happens to be the best time for the subsidy removal to maximize the gains of the additional income and not lose this to the payment of subsidies which in practice benefits few elite Nigerians who smuggle these products through porous borders to neighboring African countries for personal gain.
Reference
Analysis of the Impact of High Oil Prices on the Global Economy International Energy Agency. (2004). [online] Available at: https://allafrica.com/…/00010270….
2. Musa, K.S., Maijama’a, R., Shaibu, H.U. and Muhammad, A. (2019). Crude Oil Price and Exchange Rate on Economic Growth: ARDL Approach. OALib, 06(12), pp.1–5.
3. https://economictimes.indiatimes.com/…/89814131.cms…
About the author
Dr. Babajide Agunbiade is one of the world’s leading offshore production experts; he’s an investor, businessman and director for Houston-based National Oilwell Varco, the largest oilfield equipment manufacturing company in the world. In that role, he has completed over 2 billion USD worth of offshore production projects in the Gulf of Mexico and Sub-Saharan Africa. He is a fellow of the Nigerian Society Of Engineers, Fellow of Institute Of Industrial and Systems Engineers as well as being a fellow of the Society Of Underwater Technologies.
Source: https://energynewsafrica.com
The Chief Executive Officer (CEO) of Ghana’s petroleum downstream regulator, NPA, Dr. Mustapha Abdul-Hamid, has invited oil investors in the United Arab Emirates (UAE) to take advantage of the country’s favourable petroleum market environment and come to invest in its petroleum infrastructures.
He mentioned that there is an opportunity for investment in oil jetties, pipeline and distribution infrastructures, refineries and gas processing plants, storage and loading gantries as areas for grab by investors.
Dr. Abdul-Hamid said this at the just ended Energy Investment Forum organised by the Ministry of Energy on the sidelines of EXPO 2020 in Dubai, UAE.
He said the establishment of NPA has led to the removal of restrictions on the establishment and operations of facilities, and the importation of crude oil and petroleum products.
He stated that it has also created a reliable legislative and regulatory regime that has delivered for the country a downstream industry, whose contribution to the economy has grown more than four-fold, with private players–both local and international–forming a major part of the industry.
Touching on why Ghana should be the preferred destination for their investment, Dr. Hamid said: “Our unique geographical position along the coast of West Africa, democratic stability and security require that we provide leadership in building an integrated infrastructure to serve the sub-regional petroleum industry.”
Mr Charles Owusu, the Chief Executive of Petroleum Hub Development Corporation, on his part, said the Government of Ghana would provide both economic and regulatory incentives such as corporate tax exemptions and waivers to investors.
“These waivers will cover import duties and taxes and levies on machinery and equipment,” he added.
He also stated that Ghana is ready to reduce the corporate tax rate from 35 per cent to 15 per cent after a 10-year tax holiday for petroleum sector investors.
Source: https://energynewsafrica.com
The United States has confirmed that it is in talks with European allies to potentially sanction Russian crude oil in response to Moscow’s ongoing aggression in Ukraine, sending oil prices briefly above $130.
US Secretary of State Antony Blinken noted on Sunday during the NBC talk show Meet the Press on Sunday, “We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course at the same time maintaining a steady global supply of oil.”
The latest considerations follow a stream of sanctions that have already had a significant impact on the Russian economy but have not yet been able to halt Putin’s advance into Ukraine.
European Commission President Ursula von Der Leyen has yet not fully supported the idea as of yet, though she has expressed that one of their primary goals in the sanctions that have been levied thus far is to cut Putin’s funding streams.
The European Commission President noted on CNN, “The goal is to isolate Russia and to make it impossible for Putin to finance his wars,” adding “For us, there is a strong strategy now to say we have to get rid of the dependency of fossil fuels from Russia.”
The move, if agreed upon, has long been considered the “nuclear option” as a ban on Russian oil could weigh on global supply in an already tight market.
Bank of America analysts noted that if Russia’s oil is cut off, the market could face a 5 million barrel shortfall which could push oil prices to $200 per barrel.
The situation is compacted by stalling talks with Iran over a potential new nuclear deal.
Amrita Sen, the co-founder of Energy Aspects, a think tank, explained, “Iran was the only real bearish factor hanging over the market but if now the Iranian deal gets delayed, we could get to tank bottoms a lot quicker especially if Russian barrels remain off the market for long.”
Source: Oilprice.com
The Abuja Electricity Distribution Company (AEDC), one of the power distribution companies in the Republic of Nigeria, has been sued at a Niger State High Court by residents of Suleja Local Government over poor electricity supply in the area despite paying a huge amount as monthly electricity bills.
The Plaintiff accused AEDC of rendering poor services which is making life unbearable in the area.
In an affidavit sworn by Musa Abdullahi Esq, one of the residents of Suleja Local Government, on behalf of the residents of Dawaki, Mata Akawu, Suleja Club, Maje, Kwamba, Bakasi, Gangare Kwata, Chaza, Emir Palace, Hassan Dalatu, Church Road, Rafin Sanyi, Paolosa and Kwankwashe, it said the above-mentioned residents have been enjoying only four hours of electricity in the morning and four hours in the evening totalling eight hours out of the 24 hours they are supposed to enjoy electricity.
According to the affidavit, what is more upsetting is the fact that consumers are, sometimes, asked to provide funds for the repair of AEDC’s damaged transformers and other equipment.
The Plaintiff posed six questions for the defendant to respond to and sought nine reliefs from the court.
Among the reliefs the plaintiff is seeking is a declaration that the defendant, having failed in their basic duty of provision of power supply safely and reliably, without any tangible justification, the plaintiff is entitled to damages and compensation because the charges/rates are under the guise of bills are imposed by the defendant on the Plaintiff which the plaintiff pays.
An order directing the Defendant to pay Plaintiff (1) general damages to the tune of two hundred million Naira only (N200,000,000), an equivalent of US$474,384.40 for the wrongful, unjustifiable and unwarranted power interruption or refusal of the defendant to supply adequate electricity to the Plaintiff which act of the defendant has caused untold hardship on the Plaintiff Or (ii) in an alternative an Order directing six months free bill period for the Plaintiff as compensation for the all the period of unjustified power interruption.
Additionally, the Plaintiff is seeking an Order directing Defendant to always notify Plaintiff of any prolonged power outage exceeding four hours on any of their entire social media platforms be it newspaper or electronic media.
The Defendant have 30days to respond to the suit. No date has been communicated for mention at the time of report.
Below are the reliefs being sought by the Plaintiff
Source: https://energynewsafrica.com
According to Tullow, its group working interest production averaged 59.2 kboepd, in line with guidance with notable production growth from Jubilee in Ghana and Simba in Gabon, but lower production than expected from TEN and Espoir.
“In Ghana, strong performance delivered across key operational areas of FPSO uptime, water injection and gas processing. Drilling recommenced in April, with four wells and a work over successfully completed, ahead of plan,’’ Tullow said.
Announcing the results, Tullow Oil Chief Executive, Mr. Rahul Dhir said “Following a transformational 2021, in which Tullow successfully refinanced its balance sheet, drilled highly productive wells in Ghana and demonstrated operational excellence and financial discipline across the Group, we are now concentrating on the successful delivery of our long-term business plan. This year will see a great deal of activity at our flagship Jubilee field with investment in new infrastructure and new wells to grow production in the near term and we are taking on the operation and maintenance of the FPSO.
“At TEN, we will drill two important, strategic wells that will help define our future plans for the fields and we will continue to build production in Gabon. I also expect us to make tangible progress towards our ambitious target of achieving Net Zero by 2030. With additional opportunities to deliver value across our portfolio, including gas commercialisation in Ghana, our revised Kenya development project and an exciting well in a proven play in Guyana, we are well-placed to deliver value from our assets and to grow our business.”
Source: https://energynewsafrica.com
Mr Charles Owusu, the Chief Executive of Petroleum Hub Development Corporation, on his part, said the Government of Ghana would provide both economic and regulatory incentives such as corporate tax exemptions and waivers to investors.
“These waivers will cover import duties and taxes and levies on machinery and equipment,” he added.
He also stated that Ghana is ready to reduce the corporate tax rate from 35 per cent to 15 per cent after a 10-year tax holiday for petroleum sector investors.
Source: https://energynewsafrica.com 
Source: https://energynewsafrica.com