The Liberia Petroleum Regulatory Authority has announced the launch of its next offshore licensing round, expected to commence in April 2020.
Nine blocks will be on offer in the Harper basin, one of the last unexplored and undrilled regions offshore West Africa.
Geophysical company TGS holds a range of multi-client data across this acreage to support the licensing round, including 5,272 kilometers of 2D and 6,276 square kilometers of 3D seismic, gravity and magnetic data.
Syn-rift structural traps can be identified over much of the area, which offer multi-level prospectivity, with direct analogues to producing fields in neighboring basins.
Modelling predicts the source rock maturity and expulsion post-dates the main tectonism in the basin, and seal presence is evident in West African Transform Margin analogues.
Also, Cretaceous slope and basin floor fan systems demonstrating high amplitude character have been identified, some of which cover over 300 square kilometers. Volumetric assessment of these features suggests field sizes over a billion barrels of oil in place could be present.
“This is a watershed moment for the country and the Authority is excited to reach an agreement with all parties including TGS and NOCAL in promoting Liberia’s offshore acreage and attracting the needed investment in Liberia towards support for the Pro-Poor Agenda for Prosperity and Development (PAPD) under the aegis and leadership of President Dr. George Manneh Weah,” Archie N. Donmo, director general at LPRA commented.
A formal announcement on the actual licensing date in 2020 will be made by His Excellency, Dr. Weah, based on the recommendation from the Authority (LPRA), working in concert with NOCAL and TGS.
Source: www.energynewsafrica.com
Norwegian offshore engineering and services provider Aker Solutions has secured a contract to provide subsea control systems to Beach Energy’s Otway project phase 4 and 5, offshore Victoria, Australia.
The order includes seven sets of Vectus subsea control modules (SCMs) which will be backward compatible to the existing topside MCS and EPU, along with associated stab plates and testing equipment. Aker Solutions’ Vectus SCMs will be integrated with subsea trees in the Otway field, Aker Solutions said.
The deliveries will be from Aker Solutions’ facilities in Reading, United Kingdom; Port Klang, Malaysia; and Curitiba, Brazil.
Greg Ross, Country Manager of Australia at Aker Solutions, said: “It is our first partnership with Beach Energy in Australia and we look forward to more opportunities in future collaborations.”
The Otway project consists of Geographe and Thylacine offshore gas fields that tie back to a not normally manned platform in 100 meters water depth and processed 80 kilometers onshore at the Otway Gas Plant near Port Campbell, Victoria, Australia.
The deliveries of the control systems will start in the first quarter of this year. The companies are not disclosing the value of the contract.
Source: www.energynewsafrica.com
The Managing Director of Ghana’s strategic oil company, Bulk Oil Storage and Transportation (BOST) Company Limited, Edwin A. Provencal says he is optimistic the company will experience a financial turnaround this year and beyond and thus start paying dividend to government in the future.
The strategic national oil company in the West African nation has been making operational losses amount since 2013, but Edwin Provencal, who was appointed barely four months ago, believes the era where the company recorded operational losses are over.
“Hopefully, 2019 will be the last year we will make a loss. We have been making losses all the past years. This year, we will break even and subsequent years we will start paying dividend to the government,” Mr Provencal opined.
Speaking at a media engagement recently, Mr Provencal noted that within the few months he took over as Managing Director of BOST, he and his team have instituted cost cutting measures in place to reduce expenditure in order to ensure that BOST runs efficiently.
He mentioned that foreign travel for training of BOST technical staff have been cancelled, saying training will be procured locally from TOR and where possible from other West African countries.
He added the new management had also made it a plan not to engage in any trading that would, in the end, result in losses.
He claimed these new initiatives have already started yielding some positive results.
“Since we came, every trade we have done has yielded profit because the process we have put in place which was supported by the board is the fact that every parcel or cargo should have a business case and that business case, should be a net positive. If it’s not positive, we will not trade. We’re not going to trade on the margin…we don’t want to make losses. Even though forex can erode so much that you can make some losses but apart from unanticipated forex losses, I don’t think we will be trading at a loss.”
Established in 1993 as a strategic stock keeping company, BOST has a 361-km pipeline infrastructure along the eastern and northern corridors of Ghana, four barges, a tugboat and fifty-one petroleum storage tanks totalling 425,000 square metres.
Chart showing the operational cost and losses BOST made in the past
Sadly, 15 out of the 51 tanks have been decommissioned as a result of malfunctioning component while 86 km out of 361km of pipeline infrastructure is inactive. Additionally,
two out of the four barges have also been grounded.
Mr Provencal, who expressed serious concern about perceived corruption at BOST, which had triggered bad publicity for the company in the past, noted that BOST had not been able to attract international investors because of that as well as the US$60 million legacy debts sitting in the company’s accounting books.
He argued that if the legacy debts is taken care of, it will boost the credibility of BOST to go to attract investors.
To him, “once, the legacy debts are settled, we will be very attractive to investors and when BOST margin is increased, we will be able to maintain and build additional infrastructure and within two years, we will be making huge revenue for the country.”
He added as part of his activities to transform BOST, they need to build the infrastructure needed to transport not only gasoline and gasoil but also for the gas; thus, going forward, they may need investment for other types of infrastructure and network.
He reiterated that “we look forward to building the infrastructure needed to transport not only gasoline and gasoil but also for the gas; so, going forward, we may need investment for other types of infrastructure and the network.
“We want to help become cost-efficient and in order to become cost-efficient, we need to upgrade our network and we will need money to upgrade our network. These three things, once, we get done will put us on the path to be one of the best run depots or best-run petroleum storage and transmission infrastructure in West Africa.”
Source: www.energynewsafrica.com
The Electricity Company of Ghana (ECG) in the Ashanti Region has disconnected five tenants at the Kwadaso Estate from the national grid for illegally connecting power supply to their premises.
The culprits were caught red-handed and apprehended by Christina Jatoe-Kaleo, Ashanti West (SBU) Area Manager, and her team on Monday, 30th December, 2019, for meter bypassing.
In an interview, Christina told energynewsafrica.com that she acted on a tip-off from the Managing Director of Electricity Company of Ghana, Mr Kwame Agyeman-Budu, based on information he received on Saturday, 28th December, 2019.
She said her outfit visited the suspected houses, which had a salon and more than five tenants in different flats, where they saw the wires by-passed behind the meter board.
The tenants were, therefore, disconnected by the team and were asked to report to the office for further investigations into the matter.
Power theft is rampant in the West African nation with the Ashanti Region recording the highest in 2017.
To this end, the Electricity Company of Ghana has intensified its fight against illegal connections and other forms of electricity theft across its operational areas in a bid to reduce financial losses that arise from such power thefts.
Source:www.energynewsafrica.com
US integrated oil and gas firm, Chevron has reportedly pulled all its American oil workers out of Iraq.
This follows the killing of Iranian Quds Force leader Qassem Soleimani which has sparked tension between US and Iran.
Chevron operates in Iraq’s Kurdistan region, much to the irritation of the Iraqi government, and owns and operates a 50% operating stake in the Sarta production-sharing contract, and a 40% non-operating interest in the Qara Dagh production-sharing contract, according to the company’s website.
While American workers are being whisked out of the country, local Kurdistan workers will oversee Chevron’s Iraqi operations.
Chevron, America’s second largest oil company behind only Exxon, was blacklisted by Iraq in 2012 for sealing the oil deal with Kurdistan, a move that effectively banned Chevron from signing any oil agreements with the Iraqi government.
The Qara Dagh and Sarta blocks that Chevron purchased in part were disputed blocks. The blacklisting, however, have too few teeth to persuade Chevron to drop its Kurdish pursuits.
Chevron had already stopped its Kurdistan activities in October 2017 after an independence referendum created further tensions between the Kurdistan region and the central Iraqi government in Baghdad.
At the time, Iraqi government forces had seized all oilfields around Kirkuk, taking 350,000 bpd of oil production offline. The oilfields had been under Kurdish control since 2014. Chevron restarted its operations there months later.
According to oilprice.com, Chevron considered pulling its staff out of Iraq in May of 2019 after the US ordered the evacuation of all non-essential government employees out of Iraq due to security concerns, stating that US citizens in Iraq were, at the time, at a “high risk for violence and kidnapping”.
Source:www.energynewsafrica.com
Information available to energynewsafrica.com indicate that seven people have been arrested after taking part in a protest against the oil and gas industry by climbing on a Valaris-owned and Shell-chartered jack-up rig destined for the North Sea.
The seven activists from the environmental organization Extinction Rebellion reportedly occupied the Valaris JU-122 jack-up rig located in Dundee harbor.
The rig is currently contracted by Shell for operations in the North Sea.
The activists scaled the rig with an intention to stay up there for as long as possible to stop the rig leaving the harbor, and to halt the rig’s operations in the North Sea.
However, the environmental group in a tweet said that the activists had left the rig due to deteriorating weather conditions.
According to the BBC, the three female protesters that climbed the rig on Monday came down five hours later.
The BBC also said that a total of seven people had been arrested.
BBC also reported that seven people had been charged in connection with an “occupation” at a drilling rig at the Port of Dundee.
Three women, aged 25, 27, and 35, and four men aged 21, 23, 24, and 31 are expected to appear at Dundee Sheriff Court later, BBC said.
Despite the quick closure of the rig protest and the subsequent arrests, Extinction Rebellion said in a tweet that this was just the beginning.
Nigeria’s opposition party, Peoples Democratic Party (PDP), has kicked against a move by the country’s electricity regulatory commission to approve an increase in electricity tariff.
Media reports at the weekend suggested that electricity consumers in the most populous West African country would pay more tariff from April this year, based on a minor review of the Multi Year Tariff Order (MYTO) 2015 and the Minimum Remittance Order (MRO) for 2020 published by Nigerian Electricity Regulatory Commission (NERC).
NERC has the mandate to implement the Electric Power Sector Reform (EPSR) Act 2005, especially Section 32, which allows it to ensure prices charged by licencees (distribution companies) are fair to customers and sufficient to allow the licencees finance their activities and make reasonable profit for efficient operations.
According to the reports, NERC in August, last year, published a minor review of tariff order indicating that from 2020, consumers would pay a maximum N14 addition for every kilowatt-hour of energy, depending on their status and their distribution companies.
The tariff adjustment, energynewsafrica.com learnt, was to have been implemented from this month, but a new order announced the suspension of the implementation till April, stating that “the Federal Government’s updated Power Sector Recovery Programme (PSPRP) does not envisage an immediate increase in end-users’ tariffs until 1st April, 2020, and a transition to full cost reflectivity by end of 2021.”
Reacting to the planned electricity tariff increment, the PDP described the development as draconian and completely against the interest and well-being of Nigerians.
The party charged the Federal Government to immediately rescind what it called “the obnoxious and provocative policy and consult further with Nigerians before any such tariff hike.”
It also urged the National Assembly to rescue Nigerians from such a draconian policy by deploying its statutory legislative instruments to call the Federal Government to order in the interest of the nation.
The PDP, in a statement by its National Publicity Secretary, Kola Ologbondiyan described the alleged increase in electricity tariff as an attempt to worsen “the fleecing of Nigerians, who are already overburdened and groaning under the weight of high costs, economic repression and heavy taxes foisted by the insensitive APC administration.”
According to the opposition party, “It is lamentable that Nigerians, who are already suffering the devastating negative impact of the recent increase in the Value Added Tax (VAT) from five per cent to 7.5 by the APC administration, are now being further suppressed with increased electricity tariff.
“Our party holds that the increase in electricity tariff, under the prevailing harsh economic conditions, is injurious to the well-being of Nigerians as it will further stress the productive sector and lead to an upsurge in the cost of regular and essential goods and services, including food, medicine, housing, education and other critical needs.”
It declared that “the APC policy, if allowed, will worsen the suffering of Nigerians as it will put more stress on already overburdened families, cripple businesses, result in job losses and exacerbate the prevailing frightening unemployment rate under the Buhari administration.”
But the Coordinator of Electricity Consumer Advocacy Network, AbdulHakim Balogun said that the increase was expected as provision had been made for such under the law.
He, however, stated that the timing might not be appropriate, considering the state of the economy, increase in VAT and pressure on consumers’ disposable incomes.
The Director General of Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf said the power sector problem was multifaceted, adding that the approach to addressing it should be holistic, otherwise the consumers would be vulnerable.
“The tariff question is no doubt one of the problems. But what is NERC doing about the issues of the capacity of the Discos, estimated billing, technical and commercial losses, metering problem, quality and adequacy of investment by the discos, transmission, proposal on the decentralisation of the sector, promotion of off-grid solutions and incentives for renewable energy solutions? All of these need to be addressed in order to inspire the confidence of consumers.
“NERC should protect the interests of consumers, as well as those of the investors. There is also the social dimension of electricity provision to those at the bottom of the pyramid. It is also critical to disaggregate and interrogate the components of cost being claimed by the discos.
“Already, many small businesses have complained about prohibitive tariffs by discos following the last review. What is needed is a holistic reform rather than the simplistic solution of tariff review,” he stated.
But the regulatory agency, NERC, said it had not approved any tariff increase yet.
The General Manager, Public Affairs, Usman Arabi made the clarification in a statement issued on the agency’s website.
Arabi said: “The attention of the NERC has been drawn to the publication in several electronic and print media that end-user electricity tariffs have been increased following the approval of the minor review (2016 – 2018) of the 2015 Multi Year Tariff Order on August 21, 2019.
“We wish to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015.
“This is to account for changes in macro-economic indices for the years 2016, 2017 and 2018, thus, providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs.
“The commission, therefore, wishes to notify the general public that no tariff increase has been approved via the order.”
He said, however, NERC, in the discharge of its statutory responsibilities enshrined under the Electric Power Sector Reform Act, would continue to undertake periodic reviews of electricity tariffs in accordance with the prevailing tariff methodology.
According to him, in all instances of such reviews and rule making, the commission will widely consult with stakeholders and a final decision will be taken in due regard of all contributions.
Source: www.energynewsafrica.com
The Chamber of Petroleum Consumers (COPEC), a petroleum consumer advocacy group in the Republic of Ghana, has called on the government not to increase fuel prices.
The Chamber is of the view that any increase in petroleum prices will only add to the already hardships and sufferings of the individuals and entities in the country.
“The impending increases of almost 30 pesewas per litre, if left to impact on the pumps, will simply bring further hardships and increases in the cost of living nationwide.”
In a press statement issued in Accra and signed by the Chamber’s Executive Secretary, Duncan Amoah again called on the various Oil Marketing Companies not to hasten in increasing the petroleum prices as it goes into dialogue with the government to see how best to maintain the prices.
Mr Duncan posited that an immediate intervention by the National Petroleum Authority (NPA) by way of review in the price stabilisation and recovery level will most likely forestall this very harsh increases that Ghanaians are likely to be greeted with.
The statement added that their checks at the various OMCs indicate a necessity of a rather steep increase ranging between 18 to about 30 pesewas per litre from Saturday, 4th January if there’s no intervention from the NPA.
The expected sharp increases have largely been attributed to the fast depreciation of the cedi, coupled with a surge in International Market Prices (IMP) of both diesel and petrol respectively.
The expected fuel price increment is likely to compound the already high fuel prices facing the people that would likely move fuel prices from Ghc5.41 per litre or Ghc24.345 per gallon for most OMCs to above Ghc5.60 per litre or Ghc 25.245 per gallon for both products particularly diesel.
Source: www.energynewsafrica.com
As part of Equatorial Guinea’s Year of Investment Initiative which is centered on driving investment in Equatorial Guinea and Africa’s leading oil and gas producing economies, Minister for Mines and Hydrocarbons, H.E. Gabriel Mbaga Obiang Lima has announced his participation in this year’s Atlantic Council’s Global Energy Council in Abu Dhabi from January 10-12.
Hosted under the theme: ‘The Geopolitics of the Energy Transformation’, the forum is gathering hundreds of government and industry leaders to set the agenda for 2020 and beyond.
As part of the Abu Dhabi Sustainability Week, and in partnership with the Ministry of Energy and Industry of the UAE, the forum will focus on three key themes: the role of the oil and gas industry in the energy transition, financing the future of energy and interconnections in a new era of geopolitics.
“It is a pleasure to confirm my participation at the Atlantic Council’s Global Energy Council in Abu Dhabi on January 10-12,” declared H.E. Gabriel Mbaga Obiang Lima.
“The participation of Equatorial Guinea in this forum is strategic as it marks the kick off of our Year of Investment Initiative that will see our delegation promoting key investment opportunities and projects in Equatorial Guinea throughout the world this year.”
In 2020, Equatorial Guinea will be organising and participating in a series of high-level international roadshows in China, the UAE, the US and Africa, along with three national conferences in Malabo. More information on the year’s programme can be found at https://InvestInEG.com/.
Source: www.energynewsafrica.com
The Management of Bulk Oil Storage and Transportation (BOST) Company Limited has begun investigations into the fire outbreak at its Buipe tanker yard in the Savannah Region.
The inferno resulted in the destruction of four trucks; two of which were fully loaded with fuel.
The fire outbreak started late Friday evening and it took a combined force of depot technical staff and fire officers from the Damongo and Tamale Fire Stations to bring it under control at about 10pm.
In an official press statement signed by Marlick Adjei, Corporate Communication and External Affairs at BOST, it said the cause of the fire has not been detected yet, but said investigations have begun to ascertain the cause.
“We shall furnish the pubic with the details once the technical team completes the investigations.”
The statement revealed that the four Bulk Road Vehicles (BRVs), two of which were loaded with petroleum products, were considerably damaged.
The two trucks contained 36,000 liters of diesel (AGO) and 36,000 liters of petrol (PMS) respectively.
“At the current price of GHS5.41/liter, the value of the product lost is estimated at GHS194, 760.00,” the statement said.
It added that, though a sizable volume of products loaded for OMCs were destroyed in the incident, product supply in the northern regions and the general operations of BOST as a company would not be negatively affected.
“We wish to assure the general public that our strategic fuel stocks for the northern
regions and Ghana as a whole are intact,” it said.
Source: www.energynewsafrica.com
The Electricity Company of Ghana (ECG) in the Ashanti Region, Republic of Ghana, has locked up five big coldstores at Asafo Market, in Kumasi for engaging in illegal electricity connection.
The illegal act was detected during a night to dawn swoop by a combined team comprising police personnel and the Revenue Protection Unit of the ECG, Ashanti SBU, last night.
Illegal electricity connection is rampant in the West African country.
In 2017, Ashanti Region topped the regions where illegal connection was rampant.
ECG examined about 534,121 metres across its operational areas namely Ashanti, Western, Central, Eastern, Greater Accra and Volta Regions.
Per the regional distribution of illegal connections, Ashanti Region topped with a figure of 7,943, followed by Eastern Region with 3,377.
Tema recorded 2,487 while Accra West and Central Region recorded 1,874 and 1,134 respectively.
Accra East was on the sixth position with 860 while Volta and Western Regions followed with 754 and 455 in that order.
As a result of this, the Revenue Protection Unit of the ECG in these part of the ECG’s operational area intensified campaign to clampdown on those engaged in the unlawful act.
Ashanti Regional Manager for Public Relations and Communication, Erastus Baidoo, who confirmed the action in Kumasi to energynewsafrica.com, said the owners had been summoned to report to the Adum office of the Revenue Protection Unit today, Saturday, without fail.
He said his outfit would undertake assessment and reading of their system to find out how much of power the culprits had consumed and charged them accordingly.
He said, apart from charging them for the illegal power they had consumed, the culprits would also be made to pay penalty for their illegal act.
Mr Baidoo cautioned those who might have connected power illegally to disconnect it before they get arrested.
“Be honest and don’t cheat the system. We’re not sleeping. We’re awake so once you steal the power, we will, one day, get you and we will let you pay a heavy penalty for it,” he stated.
Source:www.energynewsafrica.com
The Liquefied Natural Gas (LNG) is fast gaining strength as alternative marine fuel, as a worldwide push is on to sharply reduce or eliminate harmful emissions from the burning of fossil fuels by ocean going ships.
Recent indications showed that more shipping lines are considering LNG, investing heavily in the full or partial technology that would aid its conversion.
The International Maritime Organization (IMO), a specialized agency of the United Nations and a kind of parliament composed of representatives from each country in the world, voted in April 2018 to effectively phase out sulfur emissions from shipping. The now-famous IMO 2020 resolution, which drops the allowable limit of sulfur in fuel to 0.5%, entered into force on January 1, 2020.
The IMO also voted to reduce the total amount of greenhouse gas emissions by 40% by 2030 and by 50% by 2050 when compared with 2008 levels.
It vowed to pursue efforts to eliminate greenhouse gas emissions altogether as well. Experts have identified various ways to get to the IMO 2050 goal, such as adopting the use of biofuel (biogas or biodiesel), methanol, ammonia and hydrogen, among others.
But the use of LNG appears to be gaining momentum with more firms going for the clean fuel.
The French container shipping company CMA CGM had recently launched the first in a fleet of nine LNG-powered, ultra-large container ships, each of about 23,000-TEU (twenty-foot-equivalent-unit) capacity.
The vessels are about 400 meters (1,312 feet) long and 61 meters (200 feet) wide.
Also, Mitsui O.S.K. Lines announced that it is investigating how to create large hybrid LNG/battery commercial ships.
Such vessels, according to the firm, would use energy stored in batteries while they navigate in coastal and harbor waters. But it will take time to change over from the existing fleet Antony Linden, business development director SEA, Pacific and India for class society DNV GL said there are 110,000 vessels in the world fleet. That world fleet, he added, is “mostly powered by diesel; change will take a long time.”
Mitsubishi Shipbuilding Co., Ltd., a Group company of Mitsubishi Heavy Industries, Ltd. (MHI) based in Yokohama, has also concluded a contract with Mitsui O.S.K. Lines (MOL) to build two LNG-fueled ferries.
These vessels, according to Mitsubishi, would be built at the Shimonoseki Shipyard & Machinery Works, with successive completion and handover scheduled for the end of 2022 to early 2023.
In another development, the ABS-classed Saga Dawn, the world’s first LNG Carrier to be fitted with an innovative cargo containment system based on IMO requirements for independent type A tanks, has been delivered to Saga LNG Shipping.
LNG is basically a super-cool and pressurized form of the flammable compound gas, methane, which has one atom of carbon and four atoms of hydrogen.
The global LNG trade reached 316.5 million metric tonnes in 2018, up by 9.8% year-on-year when compared with 2017, according to the International Gas Unit World LNG Report 2019.
For decades, LNG carriers have been equipped with mechanisms that allow them to burn the boil-off gas in steam turbines. Later, dual fuel diesel-electric engines were deployed that could use both the boil-off gas and marine diesel oil and/or heavy fuel oil to generate power for propulsion.
However, some LNG tankers will re-liquefy the boil off gas and will return it to the cargo tanks.
Some other kinds of oceangoing craft are equipped to use LNG as a fuel, although they are represent tiny volumes compared with the LNG fleet. These include car and passenger ferries, general cargo ships, patrol vessels, ro-pax, ro-ro, and tugs.
Source: guardian.ng
By: NJ Ayuk
“The Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva has declared 2020 as the year of Gas for the Nation”, the news piece started. What amazing news! And certainly long overdue. As it seems, Nigerian officials have finally taken the cue. As I have said ever so often, more than an oil nation, Nigeria is a gas nation. It just doesn’t act like it.
Undoubtedly, natural gas has the enormous potential to diversify and grow the Nigerian economy, power its industries and homes, produce ever-so-lacking wealth, create jobs, develop associated industries in the petrochemical sector, raise people out of poverty, the list goes on.
Mr. Sylva’s demonstrated intent could perhaps become the most relevant political action anyone has taken in Nigeria in years and could change the country forever; and yet, the work ahead is so vast, we can only hope he has the strength to pull it off.
To be sure, naming 2020 the year of gas for Nigeria has a really nice ring to it, but marketing alone will not cut it. Concerted governmental action is essential if we are to see true growth in the liquefied petroleum gas (LPG) sector, and first of all, we need to see a conclusion to the long delayed Nigerian Gas Flare Commercialisation Programme. Sylva stated that this was his main priority, so let’s hope it happens soon.
Once the programme is cleared, oil producers will have a more conclusive alternative to flaring. They will be able to monetize a resource that has so far been wasted, but still that will not suffice.
The flaring issue in Nigeria is tremendous. Every year, 2 million tonnes of LPG are flared, instead of being used as a source of power or feedstock. That means millions of dollars literally going up in smoke. Nigeria’s zero-flaring programme has been on-going for years, and yet, the Nigerian National Petroleum Corporation (NNPC) has just released results that indicate that gas flaring has been consistently increasing over time. More specifically, “a total of 276.04 billion cubic feet (bcf) of natural gas was flared from Nigeria’s oil fields between September 2018 and September 2019”. Further, NNPC stated that “the volume of gas flared within this period was more than what was supplied to power generation companies for electricity production which was 275.31bcf”. This is taking place in a country where 45% of the population does not have access to electricity, besides the extremely detrimental effect that has on businesses ability to compete and the extraordinary environmental damage that represents.
Already, the federal government announced in August that it would not be able to fulfill its Zero Routine Flaring target by 2020 and is yet to provide a new deadline for this goal to be achieved.
The problem remains the same as ever. It is much, much cheaper for producers to flare up and pay the fines than do anything about it. This cannot continue to be. Stronger action is needed and it falls on Mr. Sylva’s leadership to see it done.
I don’t mean by this to point the finger at oil producers. Most would probably want to monetize that resource, and would if they could. But we lack legislation, infrastructure, pricing regulations, and actors ready to receive the feedstock. They can’t just pipe the gas somewhere and hope for the best. We need to focus on deepening domestic gas penetration and promote adoption amongst the population, foster the development of gas associated industries like ammonia and urea plants, use this resource for power generation, etc. Demand doesn’t grow out of nowhere.
For this to workout, everybody needs to work together. That means the ministry and the NNPC need to partner with the international oil companies, the indigenous oil companies as well as with the country’s financial institutions to create the solutions that can make this industry flourish. That is a tall job, but an essential one.
Of course, the news that the output of liquefied natural gas (LNG) coming from the Bonny LNG-plant is going to expand by 35% once the 7th LNG train is operational is fantastic. Nigeria will strengthen its position as one of the world’s biggest LNG exporters and that will bring considerable wealth for the country, but its people continue to be in the dark.
And LNG expansion projects are something IOCs are well prepared to do, but there are other important roles in boosting the gas industry that have to be taken by others.
I speak of course of marginal field development, a topic that is of fundamental importance to me and that I have extensively covered in my most recent book Billions at Play: The Future of African Oil and Doing Deals. Both for oil and gas, Nigeria’s marginal field development programme showed incredible promise when it was first launched in 2013. It gave opportunities to local companies to explore smaller discoveries that were uninteresting for the majors, which in turn allowed them to gain experience in leading exploration and production projects on their own. Further, it opened opportunities for domestic use of natural gas for power generation. That programme is now being copied by Angola, and yet, it has stalled in Nigeria.
Further, as I have extensively debated over the years, and most extensively in Billions at Play, we need to dramatically invest in Nigeria’s ability to negotiate and manage contracts. This applies both to the need to respect the sanctity of contracts, a fundamental part of giving international investors the confidence to trust that what they sign for will be respected, but also learning to choose who to sign contracts with. The current debacle with P&ID, an unknown little company that has managed to sue the Nigerian government for breach of contract in the English courts and is seeking USD$9.6 billion in compensation, is an incomprehensible situation that should never have taken place. We need to know who our partners are and who we should be signing contracts with, and then stick by them.
Only by combining the role of the majors, the indigenous companies, the necessary infrastructure development for gas transportation, bridging with the nation’s banks to help finance projects and by giving a clear legal framework to the sector, can we hope to succeed. I do not doubt that this is possible to accomplish in 2020 and the years to come, but coming from the experience of recent years, it does not seem probable, and no one pays the price for that more than everyday Nigerians that continue to fail to benefit from its country’s resources.
Action is necessary as a matter of urgency.
This week it was disclosed that international oil and gas companies were holding back an estimated USD$58.4 billion in investments in oil and gas projects in Nigeria because of regulatory uncertainty. Foreign Direct Investment in Nigeria was USD$1.9 billion in 2018. It’s not like we don’t need the money.
But how can we expect international oil companies to feel comfortable signing off on billions in investment if after 20-plus years of negotiations we still haven’t managed to settle on the Petroleum Industry Bill that will oversee the sector? Who can blame them for waiting to see what happens? They are waiting for us to figure out how we want to regulate the industry, and after 20 years, we still don’t seem to know. That has to change, and soon.
Nigeria has an estimated 200 trillion cubic feet of gas reserves. It is high-time to put them to use. With the right policies we could change the face of the country completely. We could give light to our people, we could power our industries, releasing them from the handicapping dependency on diesel generators that make it all but impossible for them to be competitive, we could relinquish ourselves from our dependency on imported fuel for power and heat, we could create new opportunities for job creation and industrial development, we could take millions of people out of poverty… Further, strong domestic gas and gas-based industries could help boost intra-African trade, create new synergies with our neighbours, boost integration of power generation networks, establish new partnerships, even contribute to peace.
What I am saying, I say as an African, and it applies to many countries across the continent. However, Nigeria is in a prime position to truly enact change and be a beacon to others by showing leadership and resolve. It is the continent’s biggest economy and has the continent’s biggest reserves of hydrocarbons, both oil and gas. NNPC already works with some of the best major IOCs and the country has Africa’s best and most developed indigenous exploration and production capabilities. Let’s give ourselves the opportunity to be better and to live better, by taking advantage of the resources we already possess.
Mr. Sylva is showing leadership and drive. So far, he has proven himself to be the leader that Nigeria needs to develop new LPG and LNG industries that will take the country to the next level of development, not only economically speaking, but socially, environmentally, humanly. So let’s hope he can pull through the great transformations that need to occur for 2020 to truly be Nigeria’s year of gas.
NJ Ayuk is the Executive Chairman of the African Energy Chamber and author of Amazon best-selling book, Billions at Play: The Future of African Energy and Doing Deals.
The tenth session of the Assembly will bring together Heads of State and Government, Ministers, Member delegations as well as heads of international and regional organisations, public and private entities and civil society representatives to contribute to the energy transformation dialogue.
One Ministerial Roundtable and two Ministerial Plenary sessions will take place, engaging Ministers and High-level participants on specific topics such as Decarbonisation – Green Hydrogen, Renewables Investment and Hydropower. A number of thematic meetings will be held over the course of the 10th session of the IRENA Assembly.
The main objectives include raising awareness of the importance of intensifying global efforts to deploy renewable energy, and to discuss their impact on the energy transformation and sustainable development, connecting policy makers, experts and innovators worldwide to learn from each other, and share best practice and experiences on issues of common interest.
The Assembly will also consider the conclusions of the Agency’s Council meetings and will provide guidance on specific administrative and institutional matters.
The Assembly will take place prior to Abu Dhabi Sustainability Week and the World Future Energy Summit, taking place from 13 to 16 January 2020, which will also feature a number of events hosted by IRENA.
For more information, kindly refer to the 10th Assembly Executive Overview.
Room A1Room A2Room B110:00 – 13:00
International Dialogue on Global Best Practices for Strategic Long-Term Energy Planning
IRENA HQ10:30 – 12:30
High-Level Meeting on Accelerating the Energy Transformation in Small Island Developing States
10:00 – 13:00
Legislators Forum: Engaging Communities in the Energy Transformation – Adoption of National Policies
10:00 – 11:15
Réunion de Concertation Francophone
13:00 – 14:30
Lunch
14:15 – 18:00
IRENA Youth Forum: The New Generation Of Decision Makers
Olive Garden Terrace, St. Regis Hotel14:30 – 18:00
Public-Private Dialogue
1) Adapting Market Design and Policies to Support the Integration of High-Shares of Variable Renewable Energy (VRE)
2) Scaling-up Private Sector Investment to Accelerate Africa’s Energy Transition
14:00 – 16:00
High-level Meeting on the Geopolitics of the Energy Transformation
16:30 – 18:00
Enhancing Dialogue among Countries with High Shares of Renewables in their Energy Systems
14:00 – 15:30
Renewable Energy in Cities
16:30 – 18:00
Launch of the Sustainable Energy Jobs Platform
19:30
High-level Dinner for Women in Renewable Energy (by invitation)
“We want to help become cost-efficient and in order to become cost-efficient, we need to upgrade our network and we will need money to upgrade our network. These three things, once, we get done will put us on the path to be one of the best run depots or best-run petroleum storage and transmission infrastructure in West Africa.”
Source: www.energynewsafrica.com
