Oilfield services major Baker Hughes has booked $170 million loss in the third quarter of 2020, against $57 million profit same time last year.
The bottom line took a hit due to revenue drop, asset impairments, restructuring and separation related charges.
This was also the company’s third straight loss. Revenue for the quarter was approximately $5 billion, down 14 per cent from Q3 2019.
This was due to lower volume across the Oilfield Services and Digital Solutions segments. Sequentially, revenue was up some 7 per cent.
Operating loss for the third quarter of 2020 was $49 million. Operating loss decreased $3 million sequentially and increased $346 million year-over-year. Total segment operating income was $349 million for Q3 2020, down 34 per cent year-over-year.
Adjusted operating income for the third quarter was up 124 per cent sequentially. However, adjusted operating income was down 45 per cent year-over-year driven by lower margins in the Oilfield Services, and Digital Solutions segments, partially offset by volume in Turbo Machinery & Process Solutions, and margin expansion in Oilfield Equipment.
Baker Hughes recognised adjustments totaling $283 million before tax, mainly related to asset impairments, restructuring and separation related charges.
Depreciation and amortization for the third quarter of 2020 was $315 million.
Corporate costs were $115 million in the third quarter of 2020, down 2% sequentially and up 5% year-over-year.
Orders for the quarter were $5.1 billion, up 4 per cent sequentially and down 34 per cent year-over-year.
Year-over-year, the decline in orders was a result of lower order intake across all segments. Year-over-year equipment orders were down 40 per cent and service orders were down 28 per cent.
Lorenzo Simonelli, BH chairman and CEO, said: “Despite the uncertain macro environment, we are executing on the framework we laid out earlier this year. We are on track to hit our goals of right-sizing the business, generating free cash flow, and achieving $700 million in annualized cost savings by year end.
“As we move forward, we are intensely focused on improving the margin and return profile of Baker Hughes despite the near-term macro volatility, while at the same time executing on our long-term strategy to evolve our portfolio along with the energy landscape. Baker Hughes remains committed to leading the energy transition and becoming a key enabler to decarbonizing oil and gas and other industries.”
Source:www.energynewsafrica.com
The Managing Director of Ghana’s Bulk Oil Storage and Transportation Company (BOST), Edwin A. Provencal says his outfit is on course in its quest to revamping the company’s pipeline infrastructure which had been offline for several years.
According to him, rehabilitation works on the Buipe-Bolga pipeline had been completed and brought online while works on Akosombo pipelines had progressed steadily.
BOST has three pipeline systems.
The first is an 18-inch multi-product pipeline used to transfer refined products (gasoline and gasoil) from ocean vessels into the Accra Plains Depot located in the South-Eastern part of Ghana.
The two other pipelines, being the 6-inch 93km Tema-Akosombo Pipeline (TAPP) System and the 8-inch 268km Buipe and Bolgatanga Pipeline (B2P3) System, are used for primary transportation to move products to BOST inland depots.
Speaking in an interview with Accra- based Asaase Radio and monitored by energynewsafrica.com, Edwin Provencal said he was hopeful that, by November this year, the pipeline would be on stream.
He noted that 60 percent of the company’s marine assets, which were in deplorable state, had also been revived.
He asserted that when the current management took office, BOST’s debt portfolio was over US$624 million.
As of now, he explained that they have been able to pay about 97 percent of the amount, while the remaining three percent had been paid through ESLA Bond.
“Can you imagine what this nation could have used $624 million for,” he rhetorised.
According to him, the company’s financial health status was so bad that he and his team had to be strategic in dealing with most of the wrongs.
He said BOST owed most banks as well as the Ghana Revenue Authority since 2014, stressing that, that action made banks to treat the company as a plague.
Sadly, Provencal said the company failed to audit its accounts since 2015 and this put pressure on his management to ensure it was done to make it financially, operationally and managerially feasible.
He said as of now, audit report of the 2015, 2016, and 2018 is almost done, while that of 2019 is almost completed.
This, he opined, now puts BOST in a better position to do more businesses with all financial institutions and investors because of its prospects now.
Operationally, he noted that the company was not at full capacity, since most of their assets were not functional at all or were working partially.
Out of the 51storage tanks it has,15 were offline.
The BOST MD further itemised many other assets of the company left to wallow lazily at the expense of ordinary Ghanaians in Bolga since 2016 and many others across the nation.
On the brighter side of the company, he mentioned that soon, they would be receiving products from Takoradi, which would dramatically improve the import cover from the current figure of two to about four weeks.
“Can you believe that since 2008, we bought some pipelines and they’ve been stuck in the US? By December, it will have arrived in Ghana. We have some debts on it and we have paid them,” he explained.
Source:www.energynewsafrica.com
The United States and Poland closed a nuclear power deal potentially worth $18 billion as the Central European country seeks to reduce its reliance on coal and Russian natural gas.
While the deal is not yet final, there is a pretty good chance that Warsaw will pick the U.S. over its main competitors on the international nuclear energy scene, namely China and Russia.
“We are hopeful that the ultimate decisions that are made by Poland over a period of time will result in them choosing U.S. technology,” Energy Secretary Dan Brouillette told reporters as quoted by Reuters.
Poland wants to build six nuclear reactors to supplement its gas imports. Currently, it imports a lot of gas from Russia, but given the less than friendly bilateral relations, it wants to cut these off, and soon, by 2022, Reuters notes. Instead, it would import pipeline gas by Norway and liquefied natural gas from, among others, the United States.
Yet Poland also relies heavily on coal-fired power plants, and this goes counter to the EU’s ambitions for a net-zero economy in 2050. The only way to reduce or even eliminate its coal use is to replace that cheap energy with another comparable generational capacity.
The agreement closed this week stipulates that over the next 18 months, the parties will develop a program for the construction of the reactors and how they will be financed. Per plans, the first reactors should come online in 2033. The whole program could end up costing Warsaw some $40 billion, of which at least $18 billion would go towards acquiring U.S. nuclear technology, according to a U.S. government official.
Poland’s government to build between 6 and 9 GW of nuclear capacity by 2040, but it will also invest in renewable energy, planning between 8 and 11 GW in offshore wind power capacity.
Source: oilprice.com
Labour & Gov’t have adopted these Resolutions of the Adhoc Technical Committee chaired by the Honorable Minister of State, Labour
One of the key germane issues that affect Electric Power Consumers directly has to do with the resolution to deploy a batch of 1million Meters of the 6millino Meters President Buhari announced on the eve of the implementation of the contentious Service Reflective Tariff by the Electricity Distribution Companies in September 2020.
Quoting the Adhoc Committee report, “Acceleration of the National Mass Metering Program(NMMP): For the Distribution of the first one million meters, the Ministry of Power is to liaise with CBN, NERC and NEMSA to start work by 12th October, 2020 to accelerate the rollout of Meters with a target of December 2020. The Meeting agreed that it will work towards bridging the Metering Gap. The Federal Government committed to provide 6million meters; NERC is expected to compel the Discos to metering needs of the Customers”
Next point is: “Local Procurement for Meters for NMMP: Organized Labour to work with Government to improve and ramp up local production capacity”
As noble as these intentions might appear, it clearly also spells doom for close observers and analysts of the power sector.
For one, this is not the first time the Federal Government would promise heaven and earth to ensure Meters are deployed for Electricity Consumers.
Prof. Chinedu Nebo, a former minister of power, at a town hall meeting in January 2015 announced an approved funding for one million prepaid meters to be distributed to consumers through the 11 Distribution companies (Discos) to curtail the ravaging effects of estimated billing.
“The president (Goodluck Jonathan) is going to launch it very shortly and has provided the funding to give over one million meters to Nigerians to reduce the gap and then allow the Discos to face a time when they will make sure that all Nigerians are eventually metered,” Nebo had said.( https://dailytrust.com/wither-fgs-1m-electricity-meters-project)
Apart from that pronouncement, nothing was ever heard of this initiative again, which also incidentally coincided with a time when increase in tariff was also on the front burner.
We have once again come full cycle to the point where the Federal Government, in trying to placate Nigerians and encourage Consumers that they meant well, has chosen the pain point-Metering, to promise Nigerians of another one million meters.
The Adhoc Committee, while at best is advisory, has also set an open ended December 2020 as target date, whether December 1st,, or December 31st 2020, it is not stated.
Taking December 31st 2020 as target has only given the Nigeria Electricity Supply Industry exactly 10weeks for ONE MILLION Meters to be deployed.
Other questions that has been left open ended includes the source of these Meters, names of Companies, whether local or foreign, that will be engaged, IF these Meters are readily available in Nigeria or will be imported, the source of finance for the acquisition (the VAT or World Bank Loan) and installation of the Meters, or even the Framework for which this NMMP would be deployed to Nigerian homes.
It is interesting that since President Buhari made the announcement in late August 2020, nothing concrete has been set up until the October 11th Recommendation by the adhoc committee on tariff review.
Far and beyond the issue of tariff, it has been stated severally that there are more important issues to be tackled before tariff can make any meaning to the power sector.
For Nigeria, and the Power Sector, to make progress,
i. Every Nigerians MUST HAVE equal access to quality electricity
ii. Every Nigerian must have means of measuring their consumption
iii. Every Consumer would then prove responsible to pay for what they consume. With Meters, Nigerians would be able to determine how much electricity they want to consume, especially when they do not have an option of utility service providers
iv. It is when the above issues is tackled that Consumer apathy can be resolved.
To reiterate, all private investors will continue to take advantage of all possible loopholes in the regulation and administration. This is where the Nigeria Electricity Regulatory Commission has failed in stamping their authority, and their power.
With the Regulators having several opportunities to address the agitation of Consumers, and failing at this, the intervention of the Federal Government should be highly appreciated, but it should be done in such a way not to totally emasculate the Nigeria Electricity Regulatory Commission.
Adetayo Adegbemle is a public opinion commentator/analyst, researcher, and the convener of PowerUpNigeria, an Electric Power Consumer Right Advocacy Group (Twitter:@PowerUpNg, Email: [email protected])
Ghana’s petroleum downstream regulator, National Petroleum Authority (NPA), has rejected assertions by members of the Ghana National Petroleum Tanker Drivers’ Union that the Authority has not been helpful in addressing their grievances.
According to the NPA, it has been responsive as far as addressing the complainant’s grievances are concerned contrary to their claims.
At a press conference on Monday addressed by George Nyaunu, National Chairman of the Ghana National Petroleum Tanker Drivers, he accused the NPA and its CEO, Hassan Tampuli, of treating them unfairly and demanded his dismissal.
He blamed the NPA for failing to address harassment of drivers at check points by Western and Central Regional police officers, closing down of 86 gas filling outlets which have legal licences to operate, non-compliance of transit losses and refusal of the depot operators to abide by the 20 degrees Celsius loading temperatures, non-compliance of 2017 Memorandum of Understanding signed by stakeholders on drivers and mates condition of service, as well as the NPA’s inability to ensure that drivers get their portion of the benefit of Covid-19 fund to essential or frontline workers.
However, a statement issued by the NPA and copied to energynewsafrica.com dismissed the five claims by the drivers.
The authority provided evidence of steps it has taken to address their grievances.
The NPA indicated that though it does not want to engage its stakeholders in the downstream industry in a banter of words, it believes the appropriate media should be used by the drivers to seek redress.
The NPA, however, invited the union for a meeting to deliberate on the concerns raised.
Below are NPA’s Response To The Drivers Claims:
1. Request to approve 86 Gas Filling Stations
It would be recalled that following the Atomic Junction gas explosion on 7th October, 2017, Cabinet issued a directive on 12th October 2017, banning the issuance of construction permits for new petroleum products retail stations with immediate effect. However, in January 2018 the NPA was directed by the Ministry of Energy after consultations with Cabinet to use its legal mandate to resume the processing of applications for Oil Marketing Companies that met the required conditions including the siting guidelines for white products (petrol, diesel and kerosene) retail stations.
It is worthy to note that this directive excluded processing of applications for LPG filling plants. Subsequently, the NPA in a meeting with the Ministry of Energy in June 2018, was directed to process applications of OMCs/LPGMCs that had lawfully constructed their refilling plants prior to Cabinet’s directive issued on 12th October, 2017. To date, fifty-two (52) applications from the LPG Marketing Companies have since been processed to test run or operate their facilities. The ban on the grant of construction permits for new LPG refilling plants is however still in force.
The LPG Marketers Association in a letter dated 25th June, 2020 appealed to the NPA to grant them approval to complete the construction and operate their LPG refilling plants which were in various stages of development. Subsequently, a meeting was held on 24th July, 2020, between the NPA and stakeholders including the Union. A review of the documentation provided on 86 sites submitted indicated that only 11 of them had been granted construction permits prior to the directive in 2017.
A total number of 6 out of the 11 had applied for authorization to operate their completed facilities but were yet to meet the NPA’s requirements. Additionally, 17 out of the 86 sites had been granted “No Objection” permits (prior to 2017) to enable the applicants obtain the statutory permits to apply for construction permits. An inspection of 55 out of the 86 sites so 3 far revealed that 34 sites had been developed and 21 sites undeveloped. Of the 34 developed sites, 23 did not have the NPA’s construction permit hence were constructed unlawfully. It is worth noting that 4 subsequent meetings have taken place with the Union. The last meeting scheduled to take place on the 14th of October, 2020 was called off due to the absence of the Gas Tanker Drivers Association.
2. Alleged Police harassments at check points
As part of our efforts to improve the distribution of petroleum products and data management, the NPA introduced the Enterprise Relational Database Management System (ERDMS), which generates fuel delivery forms that all drivers are required to be in possession of during the haulage of petroleum products from depots to final delivery points. It is the single most authentic form that confirms a product has been genuinely loaded from an authorized depot to a retail outlet. The Police as part of their duties to ensure law and order are at liberty to request for these forms from drivers. Any driver who is in possession of the form cannot be harassed by any police officer.
It is therefore surprising for the Union to accuse the NPA and for that matter Mr. Samuel Asare – Bediako of instructing the police to harass tanker drivers in transit. The Security and Intelligence Unit of the NPA upon receipt of intel on this alleged harassment engaged the concerned Regional Police Commanders on this matter.
The Gas Tanker Drivers have also been provided with telephone contacts to call in case they face any form of harassment from the police.
3. Non-compliance to Oil Loss Control manual
The NPA 6th November, 2019 issued a revised version of the Petroleum Products Loading, Transportation, Unloading and Loss Control Manual otherwise known as Oil 4 Loss Control Manual, which was developed with the active involvement of multi stakeholders. The manual provides the right procedures for determining losses and, transit losses are determined by the OMCs or BOST per the procedure established in the manual.
The same document also requires depots to correct the volume of petroleum product loaded at a reference temperature of 20 degrees Celsius. This required the use of specialized flow meters to achieve this. The manual also makes provision to conduct manual calculations using the appropriate conversion charts to arrive at the corrected volume for depots like BOST and TOR who do not have these specialized flowmeters. The blanket claim by the Tanker Drivers that these requirements are not being complied with by the depots and OMCs is not wholly factual. About 90% of the depots in the country are equipped with these specialized flow meters.
4. Tanker Drivers Remunerations
Following strike actions by the Tanker Drivers in 2017 and 2018 with respect to their remunerations, the NPA met with the Tanker Drivers, Tanker Owners and other key stakeholders to discuss measures aimed at addressing this concern. This resulted in the signing of a Memorandum of Understanding (MOU) initially on 4th September, 2017 between the Ghana National Petroleum Tanker Drivers Union (GNPTDU),Tanker Owners Union (TOU) and the National Petroleum Authority (NPA). Another MOU was signed on 25th September, 2018 between the General Transport, Petroleum and Chemical Workers Union (GTPCWU) of TUC, TOU, the Association of Oil Marketing Companies (AOMC), BOST and witnessed by the (NPA). As a follow to the meeting held on 24th September, 2018 a third MOU was signed by the GTPCWU, GNPTDU, TOU and witnessed by the NPA and AOMCs. The MOU among other things stipulated that, the GTPCWU would lead the GNPTDU in their discussions on remuneration and welfare issues with the 5 TOU.
The GNPTDU has not been cooperative with the mother Union, GTPCWU on this matter and has stalled the discussions. As a result of the standoff, the Authority wrote to the Minister for Employment and Labour Relations to intervene. The issue is currently before the Chief Labor Officer for a resolution.
5. COVID – 19 Fund
The NPA has no jurisdiction as to who in the Petroleum industry receives COVID19 funding. We believe that this is a matter the Union should take up with their employers which in this respect are the Tanker Owners.
Whilst it is not our intention to engage stakeholders in the downstream industry in a banter of words, we believe the appropriate media should be used to seek redress for whatever concerns they may have. Accordingly, the NPA wishes to extend an invitation to the Union and GTPCWU for a meeting to deliberate on the concerns raised by the Union.
Indian government has banned natural gas and coal-bed methane (CBM) producers from buying their own produce in the newly notified gas marketing freedom guidelines.
The government on October 15 notified the Natural Gas Marketing Reforms that give producers the freedom to discover the market price of gas through a standard e-bidding process.
The notification, which follows the Cabinet Committee on Economic Affairs approving gas reforms, also gives them the liberty to market or sell the gas produced to anyone including affiliates.
However, the producer or any member of its gas field consortium cannot bid and buy the fuel, the notified guidelines said.
“Sale to affiliates will be allowed if affiliates participate in the open competitive process,” it said. “However, the contractor or its constituents shall not be eligible to participate in the bidding process.”
“Seller and buyer will not be the same entity,” it added.
This, the notification said, not just applies to conventional natural gas but also to CBM.
In 2017, Reliance Industries had bid and bought all the gas it was producing from its Sohagpur East and Sohagpur West CBM blocks in Madhya Pradesh. The company used the gas at its petrochemical plants in Patalganga and Nagothane in Maharashtra, and Vadodara and Jamnagar in Gujarat.
Reliance had outbid gas utility GAIL India Ltd for gas from Sohagpur till March 2021. State-owned GAIL had criticized the move saying Reliance had a 14 per cent tax advantage in the bid as stock transfer within the company is not subject to VAT.
The Oil Ministry had subsequently sought an explanation from Reliance which reasoned the sale to the CBM contract providing marketing freedom and the gas being sold through “an open and transparent bidding process through a reputed independent third party in compliance with provisions of the CBM contract and policy.”
To put the ambiguity to rest, the October 15 notification said with the new change “the April 11, 2017 notification on Early Monetization of CBM, regarding the process of the sale, will stand amended.”
The new guideline provides for the contractor selling the natural gas through e-bidding.
“The contractor shall get the bids invited through an electronic bidding portal to discover market price by following a transparent and competitive bidding process notified by the government,” it said.
The bidding will be conducted through an independent agency from a panel maintained by the Directorate General of Hydrocarbons (DGH).
DGH is currently in the process of empanelling such agencies.
“Marketing freedom is granted for natural gas produced from Field Development Plans
(FDPs) which were approved before February 28, 2019 pertaining to Production Sharing Contracts (PSCs), where Contractor has pricing freedom but market freedom is restricted,” the notification said.
The market price of such gas shall be discovered through e-bidding, it said.
“This policy will not apply to those contracts/PSCs where the contractor is required to get the formula or basis of sale approved from the Government or the contractor is required to sell the gas as per the specific conditions of the contract,” it said.
This essentially meant the gas produced by state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) from fields given to them on a nomination basis would continue to be governed by government-dictated price, which currently is USD 1.79 per million British thermal unit.
Also, fields like Ravva in the KG Basis which are governed by a formula in the contract would be out of this policy’s purview.
Petroleum Tanker Drivers in the Republic of Ghana have given a 48-hour ultimatum to President Nana Akufo-Addo to relieve the Chief Executive Officer of the National Petroleum Authority (NPA), Hassan Tampuli, of his post.
According to the National Union of the Tanker Drivers, the head of the downstream regulator has failed to address some grievances which continue to affect their operations.
Addressing a press conference in Tema on Monday, October 19, 2020, National Chairman of the Ghana National Petroleum Tanker Drivers’ Union, George T. Nyaunu chronicled a number of grievances which the NPA has failed to address.
He mentioned the harassment of drivers at check points by Western and Central Regional police officers, closing down of 86 gas filling outlets which have legal licences to operate, non-compliance of transit losses and refusal of the depot operators to abide by the 20 degree Celsius loading temperatures, non-compliance of 2017 Memorandum of Understanding signed by stakeholders on drivers and mates condition of service, as well as the NPA’s inability to ensure that drivers get their portion of the benefit of Covid-19 fund to essential or front line workers.
Mr. Nyaunu accused Mr. Tampuli of treating drivers unfairly by not making sure that drivers get a fair playing field as stakeholders in the downstream sector.
“Mr. Tampuli has not been helpful. Maybe, the position is bigger than him. Police officers have been beating and slapping drivers. We have complained to NPA. Meetings have been held on the issue yet the situation is the same,” he told energynewsafrica.com.
According to Mr Nyaunu, if President Akufo-Addo fails to act by sacking the NPA CEO or get their issues resolved, they would have no other option than embark on nationwide strike action.
“We are hoping for a favourable response from the President and NPA following which we will shall advise ourselves on our next line of action,” he stated.
Energynewsafrica.com could not reach the CEO of NPA on the telephone, however, Head of Corporate Communications of NPA, Anny Osabutey indicated that the Authority was preparing an official response to the claims made by the Petroleum Tanker Drivers’ Union.
Source:www.energynewsafrica.com
The leader of Ghana’s largest opposition party, National Democratic Congress (NDC), John Dramani Mahama says the next NDC administration will establish a coal fired power plant at Ekumfi Otuam in the Central Region if he is elected as the next person on December 7, 2020, when Ghanaians go to the polls.
Ahead of that, both the incumbent President and the leader of the opposition party are traveling around the country to reach the electorate with their campaign messages.
Addressing a durbar of chiefs and people of Ekumfi Otuam on the second day of a four-day tour of the Central Region, Mr Mahama said the coal fired power plant which would have a generation capacity of 2,000 megawatt (MW), will augment the country’s hydro, thermal and solar sources of power generation significantly.
He said after a series of feasibility studies, Otuam, the hometown of the late President John Evans Atta Mills, has been identified as a potential site for the project.
“We identified a number of possible places where we can build this project. We started from the West down to the East, trying to get a possible location around the coast to put up the infrastructure.
“One of the potential sites is Otuam, the hometown of our late President Atta Mills,” Ghana News Agency quoted Mr Mahama as saying.
Coal-fired plants produce electricity by burning coal in a boiler to produce steam under great pressure. The energy produced from coal is cheaper, abundant and more affordable than that from other sources.
Source:www.energynewsafrica.com
Namibia is planning to build five photovoltaic solar power plants (25MWp) in the municipality of Windhoek.
This is part of the effort of the Namibian government to boost electricity supply in the area.
The solar project, which will be carried out under public-private partnerships (PPPs), is expected to cost N$420 million, i.e. nearly US$25.5 million.
The plants will be built on the southern borders of Cimbebasia, along the B1 road to Rehoboth.
Source: www.energynewsafrica.com
The Chief Executive Officer of J.K Horgle Transport and Company Ltd, a petroleum haulage transportation company in the Republic of Ghana, has been nominated for ‘Petroleum CEO of The Year Award’ at the Ghana Energy Awards scheduled for October 30, 2020.
The awards, scheduled to be held at the plush Movenpick Ambassador Hotel, in Accra, capital of Ghana, will have other CEOs of petroleum institutions such as CEO of GOIL, Kwame Osei Prempeh, CEO of Petrosol Michael Bozumbil, CEO of Chamber of Bulk Oil Distributors (CBOD) Senyo Hosi, CEO of Ghana Gas, Dr. Ben K.D Asante, and CEO of Rigworld Group, Kofi Amoa-Abban, battling for the same award.
It will be held under the theme: ‘Excelling In Crisis: The Energy Sector In A Covid-19 Era’.
Kwame Osei Prempeh, Managing Director and Group CEO of GOIL
Mr. J.K Horgle has been in the petroleum haulage transportation business for over 40 years.
Besides his company winning some awards, Mr. Horgle has personally won several industry awards both home and abroad.
In an interview with energynewsafrica.com recently, J.K Horgle said his company retained about 700 workers despite the outbreak of Covid-19 pandemic which affected business activities globally.
He indicated that his company decided to maintain all the staff for a good reason.
“On our side, we train our drivers and we spend huge sums of money in training them, especially female tanker drivers. We can’t give them all this training and ask them to go home. We will lose. People even try to poach our drivers because they are well trained,” he said.
Senyo Hosi, CEO of Chamber of Bulk Oil Distributors (CBOD)Dr. Ben K. D Asante, CEO Of Ghana National Gas Company, Republic of GhanaMichael Bozumbil, CEO of PetrosolSource:www.energynewsafrica.com
There is no doubt that Somalia has become a significantly more attractive prospect since the signing of the country’s Petroleum Law and Revenue Sharing Agreement earlier this year. With seven blocks on offer, the round, set to conclude in March 2021, presents Operators with the opportunity to enter one of the last truly frontier passive margins in the world.
At Africa Oil Week Virtual Conference, Mr. Ibrahim Ali Hussein outlined the role of the newly formed Somali Petroleum Authority, explaining how the independent body will work inclusively with States and the Federal Government to “apply the principles of openness, accountability, transparency and non-discrimination in procedures and systems”.
The SPA has since appointed six directors, each from a different state (Banadir Regional Authority, Hirshabelle State, Galmudug State, South West State, Jubaland State and Somaliland State). This is in line with the above-mentioned revenue sharing agreement, which divides any funds between the various parts of the country.
Mr Hussein was joined by Dr Alessio Checconi, Senior Business Development Manager for Africa and the Middle East at TGS, who were a partner organisation for the session and are currently working closely with the SPA and Somali Ministry of Petroleum & Mineral Resources. Dr Checconi gave a below-ground overview of the seven blocks on offer, adding “If I were to pick just one block, I would look at the central and Southern blocks”.
Scot Fraser of Ventura International Energy, who joined the session to provide insight into fiscal benchmarking based on his proprietary research, added that “the more wells the better. The companies that are bidding need to be active in order for the industry to be sustainable. One well in a block will probably condemn the potential of the basin […] There are a variety of different plays and the blocks are large, so any campaign that allows you to mitigate some of those risks and separate the dependencies is clearly going to be to the advantage of announcing that first commercial opportunity.”
A primary concern when considering investment in a historically unstable region like Somalia is, of course, security. Phil McDonald, former Royal Marine Commando and current Regional Director for Africa at Castor Vali was on hand to offer a frank analysis of above-ground risk in the region. According to McDonald, though onshore risks from Al-Shabab and Islamic State remain significant, offshore pirate attacks have decreased exponentially, from a high of 160 reported attacks in 2011, to just one this year. McDonald commented “I have no evidence or reason to see a return to prominence [of piracy] or a spike as it was five years ago […] however the risk is still there and that illustrates the need for robust security mitigation measures”.
Overall, the “Somalia Licensing Round: Derisking Above Ground Factors” section at AOW Virtual shone the spotlight on a region that is not frequently discussed in terms of hydrocarbon investment, highlighting multiple areas of interest.
To learn more about insurgents, minefields and election standoffs in Somalia, a report created in collaboration between AOW and Castor Vali is available here: https://bit.ly/3lQwDyw.
To view the full recordings of sessions at AOW Virtual, go to www.Africa-OilWeek.com/Page/webinars. Content is CPD-certified, and completely free to access.
Source:www.energynewsafrica.com
The Chief Executive Officer of Ghana’s Petroleum Commission, Egbert Isaac Faibille, has implored upstream regulators in Africa to put in place measures that would ensure that citizens benefit from the oil and gas resources.
Speaking during a webinar to mark five years of Uganda’s oil and gas exploration on Thursday, Mr Faibille indicated that his outfit and Ugandan counterpart have a big responsibility to ensure that their citizens benefit from the oil and gas exploration.
“It is worthy to note that in not too distant past, many rich oil and gas countries were unable to utilise their resources to the benefit of their citizens,” he observed.
Speaking on the topic: ‘Enhancement of socioeconomic benefits for a new petroleum production country’, Mr Faibille was of the view that efficient regulations, enhanced revenue generation in the sector plus job creation for Ghanaians and Ugandans were crucial.
Additionally, he urged leveraging oil and gas resources to engender socio-economic growth for the two countries, as well as strict adherence to environmental best practices and good governance culture to be undertaken in the sector.
The Executive Director of the National Planning Authority of Uganda, Dr Joseph Muvawala said Uganda had put in place strong regulatory and implementation regimes to ensure efficient utilisation of oil and gas resources in the country.
“National participation is key in the supply of oil and gas services in the sector by Ugandans to achieve value creation and retention in the country. It was 28% in 2017 to 33% in 2018,” he said.
According to him, 72 percent was recorded in the value creation chain in 2019, out of which 81 percent Ugandans were employed in the oil and gas sector.
Dr Muvawala also assured of avowed commitment to further increase capacity for his people and utilise funds from the sector to better their living conditions.
Another good thing helping to ensure efficient operation in the oil and gas sector in Uganda, he identified was a strategic data management system called ‘The Crane data base’.
He added that it was over 20,000 gigabites of data and helps in monitoring on and off field exploration processes.
So far, he mentioned that $3.5 billion has been invested in the oil and gas sector and hoped that an estimated $15 billion would put in the area.
The Director General of Norwegian Petroleum Directorate, Ms Ingrid Solvberg said what had sustained the oil and gas sector of her country were strict adherence to administrative and regulative compliance over the years.
Speaking via a webinar under the theme: ‘Regulatory Excellence in the Oil and Gas sector’, she said: “In Norway, the Ministry concentrates on planning while the directorate concentrates on implementation and other functions to make the sector viable.”
According to her, Norway has a strict work cut-out for ministry responsible for the sector, which concentrates on efficient planning, while the directorate focuses on implementation and other auxiliary functions to make the oil and gas sector effective.
Ms Solvberg urged African countries to work hard and eschew all acts that negate good corporate governance culture from the sector in order to reap effectively from the oil and gas resources.
Touching of how to prepare ahead of post oil and gas to benefit the African continent, the Norwegian Petroleum Director General advised that, strategic measures are taken swiftly to drift towards renewable energy resource in order to cushion the continents economy in future, just as her country is doing.
Commenting on steps to stem environmental problems from explorations from oil and gas, she said measures have been crafted to ensure societal safety and companies in the sector are mandated to operate efficiently to reduce C02 emissions during production.
Source:www.energynewsafrica.com
South Africa is considering the establishment of a new crude oil refinery to help stem the importation of petroleum products.
Minister for Mineral Resources and Energy, Gwede Matashe, who disclosed this, is of the view that the new oil refinery will help to revamp the country’s ailing economy.
“South Africa needs a new crude refinery. The scale of petroluem product export and the existing capacity in our refineries make it necessary,” he stressed.
South Africa has six oil refineries, and it is the 10th largest oil producer in Africa and 41st in the world.
The country spends huge sums of money to import crude oil and refined products.
Delivering a speech at the opening of Africa Oil Week 2020 Virtual Conference, he said: “The energy sector is a catalyst for economic growth, hence, the prioritisation of supply of affordable and reliable energy was crucial to fast-track development.”
Mr Matashe was of the view that since the groups’ meeting in 2019, South Africa has published the Petroluem Resources Development Bill seeking public comment, in order to finalise the Bill.
“An immediate positive result of separating oil and gas from the mining legislation by Total. The company has, again, this year, brought another oil and gas drilling rig for the liquified prospect in Block 11/12B off the Mossel Bay coast.
According to him, the drilling was expected to be from one hundred and eighty to three hundred (180 to 300 days, with an estimated local currency of one and half billion Rand (R1.5 billion) to benefit various local companies.
“We are obviously thrilled with the confidence shown by Total in our Government and our country and hope for even a bigger find of oil this time round,” he said.
The Government of Ghana has settled the prolonged inter utility legacy debt (worth USD$203M) component of the power sector debt within the energy sector accrued by the end of 2016 involving both state-owned corporations and Independent Power Producer, Sunon Asogli Power Ghana Ltd.
This settlement has led to the clearing of debts Sunon Asogli owed to gas suppliers, thereby, making the power producer’s credit status a bit better.
“The settlement of this debt has contributed to improving the credit rating of the various organisations within the energy sector seeking for credit facilities from both domestic and international banks. It has, further, reduced the indebtedness of government, Electricity Company of Ghana Limited (ECG), Volta River Authority (VRA), Ghana National Gas Company Limited (GNGC) and Sunon Asogli Power (Ghana) Limited, making their books much better than before,” Sunon Asogli said in a statement copied to energynewsafrica.com.
The debt affected the operational and financial performance of all parties involved within the power supply chain.
“It became very difficult for the private sector organisation to obtain financial support to sustain its business operation, commitment to future investments and also affected our shareholders confidence,” the statement said.
“We will continue to collaborate with all the parties within the energy sector and the
Government in sustaining and meeting the electric power demand in Ghana,” the statement concluded.
Meanwhile, the Chamber of Independent Power Producers, Bulk Consumers and Distributors (CIPDiB), which welcomed the development, encouraged the government to prioritise settling the outstanding debts to the IPPs to ensure continuous power supply.
According to a statement issued by CIPDiB and signed by its CEO, Elikplim Apetorgbor, the settlement of the $203 million debts have reduced the collective receivables in favour of the IPPs to about USD$1.2 billion.
Source:www.energynewsafrica.com
“Mr. Tampuli has not been helpful. Maybe, the position is bigger than him. Police officers have been beating and slapping drivers. We have complained to NPA. Meetings have been held on the issue yet the situation is the same,” he told energynewsafrica.com.
According to Mr Nyaunu, if President Akufo-Addo fails to act by sacking the NPA CEO or get their issues resolved, they would have no other option than embark on nationwide strike action.
“We are hoping for a favourable response from the President and NPA following which we will shall advise ourselves on our next line of action,” he stated.
Energynewsafrica.com could not reach the CEO of NPA on the telephone, however, Head of Corporate Communications of NPA, Anny Osabutey indicated that the Authority was preparing an official response to the claims made by the Petroleum Tanker Drivers’ Union.
Source:www.energynewsafrica.com
