South Africa’s utility company, Eskom has warned the public to cut electricity usage urgently as it lost four large units to unplanned breakdowns and another two units – which were scheduled to return to service – remain offline.
A statement issued by the company explained that the breakdowns were at Kendal, Majuba and Lethabo, while the delays were at Duvha and Tutuka.
It added that one more unit was taken offline at Kendal due to “technical difficulties” and to address emissions.
Eskom has 31 000 MW available in total to meet demand on Tuesday night, according to the utility.
“While we expect some units to return to service soon, this situation may persist until the weekend. We urge the public to reduce consumption by switching off non-essential appliances in order to maintain the integrity of the system,” Eskom said.
The statement comes on the back of blackouts hitting Johannesburg due to increased demand and a spike in illegal connections.
Eskom has avoided load shedding during the coronavirus lockdown due to reduced usage, but, with the start of winter, it want consumers to cut electricity usage as it battles to meet demand.
Ghana’s power transmission company, GRIDCo, has appointed Ms. Florence Nuamah Agyei as the new Director for Human Resources and Services, with effect from June 15.
She takes over from Wing Commander Samuel J. A. Allotey, who is proceeding on retirement at the end of June, after nine (9) years of dedicated service to the company.
Ms Florence has over 25 years’ experience in Human Resources Management and Organisational Development; having served in leadership capacities across several continents.
She was a former Director at the Data Protection Commission, where she consulted on HR, Finance and Administration for the World Bank.
Prior to that, she worked as Head of People and Organisational Development (OD) at College of Policing, England and Wales as well as in a number of senior HR and OD roles in the United Kingdom.
She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD).
She also holds MSc. Degree in HRM from Anglia Ruskin Business School (UK), LL.M from the University of Surrey (UK), a Postgraduate Diploma from the Institute of Leadership and Management (ILM) and is also a member of the British Psychological Society (BPS).
She also has a University Diploma in Data Processing from the Kwame Nkrumah University of Science and Technology (KNUST).
Key among her responsibilities will be to develop a strategy that transforms and elevates the Ghana Grid Company into an excellent organisation and a great place to work.
She is also expected to implement a framework that benefits employees whilst enhancing the organisation’s performance and capability.
Commenting on the appointment, Chief Executive Officer of GRIDCo Ing. Jonathan Amoako-Baah said: “We are happy to welcome Florence as a new member of the Management Team at GRIDCo. We look forward to tapping into her expertise in People Management, Organisational development and Growth, to transform the company. She is joining at an exciting time for the energy sector across the sub-region and her experience and knowledge will prove very crucial in repositioning the company to access the new opportunities in the industry.”
On her part, Ms Florence Nuamah Agyei said: “I am thrilled to join such a progressive organisation with leadership capabilities across West Africa. I look forward to leading the company into the next phase of its People development. Together with the amazing staff at the company, we can only aspire to greater heights.”
Source:www.energynewsafrica.com
As African oil and gas countries struggle with Covid-19’s devastating impact on demand, two international groups seem to be celebrating it.
Earlier this month, the Organisation for Economic Co-operation and Development (OECD) and the International Energy Agency (IEA) described the low oil prices caused by the pandemic as a “golden opportunity” for governments to phase-out fossil fuel support and usher in an era of renewable energy sources.
“Subsidising fossil fuels is an inefficient use of public money and serves to worsen greenhouse emissions and air pollution,” OECD Secretary-General Angel Gurría said in a joint OECD-IEA statement. “While our foremost concern today must be to support economies and societies through the Covid-19 crisis, we should seize this opportunity to reform subsidies and use public funds in a way that best benefits people and the planet.”
I would argue that the OECD and IEA do not necessarily know what is best for the people who live on this planet. Pressuring governments to stop supporting fossil fuels certainly would not be good for the African oil and gas companies or entrepreneurs striving to build a better future. And it could be downright harmful to communities looking at gas-to-power initiatives to bring them reliable electricity.
Too often, the discussion about climate change — and the call to leave fossil fuels in the ground— is largely a western narrative. It does not factor in the needs of low-income Africans who could reap the many benefits of a strategic approach to oil and gas operations in Africa: reduced energy poverty, job creation, and entrepreneurship opportunities, to name a few.
Ironically, a policy that would jeopardize Africans’ ability to realize those benefits is being recommended at the same time protesters across America are calling for equity in some of the same areas. Although police violence against people of colour is at the centre of the protests — a response to the horrific death of a black man, George Floyd, after a white police officer knelt on his neck for nearly nine minutes — the protests also point to social and economic disparities between the races in America.
While I do not want to exploit the death of George Floyd, I do see parallels between the racial disparities in America and the struggles of Africans whose lives could be improved through oil and gas. I always see a common pattern of ignoring black and African voices.
Too often in America, the value of black lives were not given proper consideration until George Floyd’s death forced the topic to the forefront and rightly so. And on the global stage, OECD and IEA are dismissing the voices of many Africans who want and need the continent’s oil and gas industry to thrive. I would advise these organizations not to ignore the needs of poor people in African countries.
As it stands, African energy entrepreneurs, the African energy sector, and Africans who care about energy poverty are basically saying, “I can’t breathe.” It is time to get the knees off their necks.
The Dangers of Energy Poverty
Consider the impact of energy poverty. Approximately 840 million Africans, mostly in sub-Saharan countries, have no access to electricity. Hundreds of millions have unreliable or limited power at best. Even during “normal times,” energy poverty is dangerous. The household air pollution created by burning biomass, including wood and animal waste, to cook and heat homes has been blamed for as many as 4 million deaths per year. How will this play out during the pandemic? For women forced to leave their homes to obtain and prepare food, sheltering in place is nearly impossible. What about those who need to be hospitalized? Only 28 percent of sub-Saharan Africa’s health care facilities have reliable power. Physicians and nurses cannot even count on the lights being on, let alone the ability to treat patients with equipment that requires electricity — or store blood, medications, or vaccines. All of this puts African lives at risk.
That is what makes gas-to-power initiatives so critically important: It only makes sense for African countries to use their vast natural gas reserves for power generation. Moreover, we are already making progress on that front. Today, about 13 African countries use natural gas produced domestically or brought in from other African countries, and there is every reason to believe this trend will grow.
In Cameroon, for example, Victoria Oil and Gas PLC already provides domestic gas for power generation, and its subsidiary, Gaz du Cameroun (GDC), has agreed to provide the government gas for a new power station with the potential to accommodate growing demand.
And in Mozambique, the Temane power plant, also known as Mozambique Gas-to-Power, is being developed now, and plans are underway to develop a second plant. Both will rely on Mozambique’s Rovuma basis for feedstock.
I have heard calls, including some from the OECD, for the development of sustainable energy solutions to meet Africa’s power needs. Great — let us go for it. I’m all for renewable energy solutions, but Africans should not be forced to make either-or-decisions in this area. Energy poverty is a serious concern, and it is wrong to make it more difficult for African countries to use a readily available natural resource to address it.
Investment — Not Aid
One of the benefits of oil and gas operations in Africa is they provide opportunities for both indigenous companies and for foreign ones. And as foreign companies comply with local content laws, they invest in the communities where they work. Africa needs those investments, particularly training and education programs that empower people to make better lives for themselves.
I want to be clear: Africa does not need social programs, even educational programs, that come in the form of aid packages. What’s more, offering Africa aid packages to compensate for a halt or slow-down of oil and gas operations will not do Africans any good. I tried to make that point recently during a friendly debate with Prof. Patrick Bond, a very bright man and a distinguished professor at the University of the Western Cape School of Government. He argued that Africa should keep all of its petroleum resources in the ground to minimize greenhouse gas emissions and prevent further climate change. Developed nations, the professor continued, should compensate Africa for that sacrifice, and Africa could use that money to develop other opportunities. No. This is not the time for Africa to be calling for more aid. Africa has been receiving aid for nearly six decades, and what good has it done? We still don’t have enough jobs.
Investment creates opportunities, meaning Africans aren’t receiving, they’re doing. They’re learning, working, building, growing, deciding. We, as Africans, must be responsible. Our young people should be empowered to build an Africa we all can be proud of. Relying on the same old policies of the past, relying on aid, simply isn’t going to get us there. The truth is, no matter how you feel about the American Shale Revolution, Africans can learn from it.
One of the reasons it succeeded is because you had small businesses willing to take a chance on new technology.
They worked hard, and in the end, they boosted production. America became the largest crude oil producer in the world. Those companies made something extraordinary happen, and so can African businesses. We need more entrepreneurs willing to seize opportunities and, in some cases, make mistakes. That’s how we grow and learn. We need government leaders to do their part by creating a welcoming environment for foreign investors and establishing local content policies that result in opportunities for business partnerships, quality jobs, and learning opportunities for Africans.
Africa is capable of building a better future, of ending energy poverty, strengthening our economy, and improving the lives of everyday Africans. If we are smart about it, and we work together with purpose, our oil and gas resources can help us get there. Moreover, that is why this is a horrible time for OECD, IEA, or any other outside organizations, to interfere with our natural resources.
Don’t Stand in Our Way
I understand and respect the OECD and IEA’s commitment to preventing climate change. However, when you describe the chance to harm a major African economic sector as a great opportunity, there’s something wrong.
When you put independent African oil and gas companies at risk, you’re saying your objectives are more important than African livelihoods and aspirations.
American institutions are coming under fire for failing to recognize that Black Lives Matter and to work alongside African-American communities to create positive change. I encourage the OECD and IEA to take a different approach.
This is an opportunity for all of us to join forces, to take a team approach to growing Africa’s energy sector, and to do it without dismissing Africa’s right to capitalize on its own natural resources.
NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.
A former Managing Director of Ghana’s strategic oil company, Bulk Oil Storage and Transportation (BOST) Company Limited, George Mensah Okley, is reported dead.
It is not clear what caused his death, but sources say the late George Mensah Okley has not been well for a while.
President Nana Akufo-Addo appointed the late George Mensah Okley to replace Alfred Obeng Boateng as the Managing Director of BOST.
Prior to his appointment George Okley was the director in charge of Upstream at Ghana’s Ministry of Energy.
He, however, he resigned in August 2019, after reports surfaced on the issue of contracts at BOST and some serious other challenges he was having with some key staff at BOST, making his work difficult.
Mr. Mensah Okley had over a decade of experience in the country’s upstream sector.
He played a key role in Ghana’s Petroleum Policy Development and Implementation.
This is how former Minister of Energy Boakye Agyarko reacted upon hearing the passing on of George Mensah Okley
He held a Bachelor of Science Degree in Chemical Engineering from the Kwame Nkrumah University of Science and Technology (KNUST).
He also had a Master’s Degree in Reservoir Evaluation and Management from the Heriot-Watt University, Edinburg, Scotland, with focus on oil field operation, reservoir engineering, reservoir concepts, reservoir sedimentology, formation evaluation, well testing and production, reservoir simulation, rock mechanics with geophysics and modeling.
In 2014, Mr. Mensah Okley undertook a professional course in petroleum engineering at the Imperial College, London. He previously served as a Research Scientific Officer at the Ghana Atomic Energy Commission from 2005 to 2007 and served as petroleum engineer at the Ministry of Energy from 2008 to 2012.
From 2013 to 2017, he was the acting Head of Upstream of the Petroleum Division of the Ministry of Energy, and has equally been involved in monitoring of the implementation of the Offshore Cape Three Points (OCTP). He was a member of the team that developed regulations for the sector.
Source:www.energynewsafrica.com
An audit report by Ghana’s Auditor General has revealed that about sixteen oil companies operating in the West African nation’s upstream sector have failed to honour their payment obligations, thus, denying the state revenue.
The 2018 Petroleum Funds Report mentioned Tullow, Petrogulf Limited, Hess Ghana Exploration Limited, Kosmos Energy, Oil Field Energy Ltd, Britain-U Ghana Ltd, Springfield Exploration and Production Limited and Swiss African Oil Company Ltd.
The rest are AMNI Petroleum Dev. Co. Limited, GNPC Operating Services (GOSCO), Medea Development International Limited, PETRICA AS, Blue Star Exploration Ghana Limited and Erin Energy.
According to the report, these entities have failed to honour their payments obligations into the Petroleum Holding Fund as stipulated by Section 3(2) of the Petroleum Revenue Management Act 2011 (Act 815).
Per the law, surface rentals are to be paid by the 15th day of each month.
However, the Auditor General observed that, regardless of stringent efforts to have especially Oil Field Energy Ltd, Britain-U Ghana Ltd, and Swiss African Oil Company Ltd to pay their obligations to the state, they have failed.
The report noted that the Ghana Revenue Authority (GRA) was collaborating with the Petroluem Commission to ensure they comply or face the necessary sanctions.
With reference to interest/penalty on late payment, it said section 93(5f) of the Petroluem Exploration and Production) Act 2016(919) compels the culprit to pay additional five percent of annual fee for each day of the first 30 days after the annual fee becomes due, in addition to the outstanding annual fee and after the 30-day period.
Regarding the unpaid surface rental fees, the report stated that the Ghana Revenue Authority has been informed of the situation and the Bank of Ghana was waiting its response.
The report said as of December 31, 2018, a total of US$ 310.34 million was outstanding to be paid into the Petroleum Holding Fund.
It stated that out of the total amount owed, US$308.77 million, an amount due for the Ghana Gas Company Limited for gas sold to them by the Ghana National Petroluem Corporation (GNPC) and US$1.57 million surface rental fees were unpaid by the various entities.
“The estimated amount of penalties based on section 3(4) of Act 815 is US$10.79 billion. There is loss of income which would have been earned if the funds had been paid on time and invested,” the report said.
With respect to Gosco/Heritage Exploration and Production Ghana Ltd, the report said the company has not paid their surface rental fees for East Keta Ultra Deepwater Block
for 2017-2018 assessments.
It has informed the GRA of a force majeure event that happened in December 2016 when the Togolese Navy interdicted and ordered the subcontractor engaged by the operator on behalf of the contractor parties to cease operations within the contract area.
Meanwhile, a source at Kosmos Energy has told this portal that Tullow is the entity responsible for the payment of the surface rentals.
“We handed over the operator-ship of the West Cape Three Points to Tullow couple of years ago. Kosmos does not operate anything in Ghana,” the source said.
The Auditor-General (A-G) has submitted a report on the Management of Petroleum Funds for 1st January 2018 to 31 December 2018 to Parliament.
A statement signed by Mrs Ama Awoe-Bosumafi Assistant Director of Public Relations Unit on behalf of the Director General, said the audit was carried out in accordance with Article 187(2) of the Constitution of Ghana, Section 16 of the Audit Service Act 2()00, (Act 584), and Section 45 of the Petroleum Revenue Management Act 2011, (Act 815).
“The A-G used methodologies that are in line with internationally accepted standards to conduct the audit,” it said.
“The A-G hereby notifies the public that in line with Section 23 of Act 584, a copy of the report is available at for free download”.
Click on the file below for the full reportPetroleum-Fund-2018
OPEC’s Joint Ministerial Monitoring Committee (JMMC) has made assurances of achieving 100 per cent conformity in oil production cuts from all participating countries during the next three months.
The 19th JMMC meeting was held via videoconference. Saudi Arabia’s Minister of Energy Abdul Aziz Bin Salman and the Minister of Energy of the Russian Federation Alexander Novak chaired the videoconference.
The Committee reviewed the monthly report prepared by OPEC’s Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021.
The JMMC reiterated the critical role that the ‘Declaration of Cooperation’ (DoC) continues to play in supporting oil market stability and economic recovery, in the face of the COVID- 19 pandemic shock and the subsequent severe global economic downturn.
It is worth reminding that all participating countries agreed to adjust downwards overall crude oil production in April this year.
During the 179th meeting of OPEC and the 11th OPEC and non-OPEC Ministerial meeting this month these cuts were extended for another month.
Apart from the extension, member countries agreed to a concept of compensation by those countries who were unable to reach full conformity.
The countries, which were unable to achieve these cuts in May and June, would adjust its numbers during July, August, and September, in addition to their already agreed production adjustment for such months.
OPEC stated that the overall conformity for May 2020 was 87 per cent.
It also observed individual country conformity levels and reiterated the critical importance that all countries achieve their 100 per cent level, and make up for any monthly shortfalls in July, August, and September.
The OPEC committee welcomed the expressed commitments from those countries below the 100 per cent May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September.
Iraq and Kazakhstan already submitted their compensation schedules. The Committee agreed to give other underperforming participants, which have not yet submitted final plans, until 22 June 2020 to submit their schedules for compensation to the OPEC Secretariat.
The Committee stressed that the attainment of 100 per cent conformity from all participating countries is “vital for the ongoing and timely rebalancing efforts and helping deliver a sustainable oil market stability”.
It is worth noting that Saudi Arabia, the UAE, Kuwait, and Oman made voluntary contributions totalling 1.2 million barrels per day in June 2020.
OPEC said that the next JTC and the JMMC meetings were scheduled for 14 July and 15 July, respectively.
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria, (PENGASSAN) have threatened to embark on a three-day strike beginning Wednesday, June 24, 2020 over alleged forceful enrolment of members into the Integrated Payroll and Personnel Information System, (IPPIS).
According to the Vanguard, the oil workers have hinted of shutting down all oil installations across the West African nation.
Sources say NUPENG and PENGASSAN had written to the Minister of State for Petroleum Resources, Labour, and Employment, protesting the decision of the Federal Government to stop the payment of salaries of oil workers in government parastatals, who are yet to be roll unto the IPPIS platform as at Thursday, June 18.
An official of PENGASSAN lamented that the oil workers’ unions had been meeting with the management of IPPIS over the matter for a long time without any headway, insisting that oil workers in the public sector have rejected IPPIS.
According to him, “we have intimated Minister of Labour and Employment as well as Minister of State for Petroleum Resources.
“The ball is in the court of the Federal Government to apprehend the matter before it degenerates. Even up till last Friday, we still wrote letters to the government on the need to address the matter. “We have already asked our members to be ready for any eventuality. So, between Monday and the close of work on Tuesday, if nothing concrete comes from the Federal Government, we will have no option than to direct our members to proceed on three days warning strike from Wednesday, June 24.”
The letter to the Minister of State for Petroleum Resources, dated June 19, 2020, was entitled: ‘Re: Enrolment of Federal Ministries, Departments and Agencies into the Integrated Payroll and Personnel Information System, IPPIS, reminder.
The letter of threat to strike over IPPIS, signed by General Secretary of PENGASSAN, Lumumba Okungbowa and General Secretary of NUPENG, Olawale Afolabi, called on the minister, Chief Timipre Sylva, to intervene in the matter and prevail on the Accountant-General of the Federation to desist from forcefully enrolling its members.
“We are in receipt of a copy of a directive from the office of the Accountant-General of the Federation, directing the Federal Ministries, Departments and Agencies to register their staff on the Integrated Payroll and Personnel Information System, IPPIS, platform on or before Thursday, June 18; threatening further release of Personnel Cost if the directive is ignored.
“Please be informed that the Association/Union apprehension about the IPPIS platform stems from the fact that it discountenances the peculiarities of the oil and gas industry with regards to Collective Bargaining Agreement, CBA, and approved pay structure between Union and Federal Government though the Salaries, Wages, Income Commission. “Recall that through a committee set by the Ministry of Labour and Employment, we have been meeting with the IPPIS to consider its peculiarities in coming unto the IPPIS platform, instead of a blanket implementation.
“These talks have not been concluded and we called for a resumption of talks in order to resolve the issues raised and, where required, provide additional information to the IPPIS,” then added their threat to strike over IPPIS,” the letter stated.
Source:www.energynewsafrica.com
The management of Ibadan Electricity Company Plc (IBEDC) in the Republic of Nigeria has expressed concern over what it described as “incessant cases” of vandalism of electrical installations across its network.
A statement issued by the company and signed by the Chief Operating Officer, Mr John Ayodele, said the activities of vandals have plunged lots of households, businesses, and communities into darkness while costing the company revenue losses worth millions of naira.
The company noted that the alleged vandals mostly target transformers and Up-riser cables worth millions of naira.
“From January to April 2020, more than 38 Transformers have been vandalized amounting to 1154.9 Mwh undelivered energy.
“For instance, in the Olulana community under Ijeun business hub, the 300KVA Transformer has been vandalized several times, also in Ogun state, Victory 500KVA Transformer in Mowe community was vandalized on different occasions. The Transformers at Iragbbiji and Orororowu communities under the Ikirun business hub in Osun State were dismantled by vandals, leaving the people in total darkness for months,”the company said.
It added that the vandals also recently carted away cables of a 330KVA and 500KVA transformers at Surulere and Kuponniyi substations at Oyo State. This is as he urged community leaders, youth associations, and security agencies to work with the distribution company in the protection of electrical installations within their communities.
The company called on vigilante groups and any other patriotic members of the communities with useful information to report cases or culprits of vandalism promptly, adding that the company will continue to collaborate with security agencies to track the vandals and prosecute them.
It warned that anyone caught would be made to face prosecution, adding that it would no longer be business as usual for the vandals.
According to the company, the vandals risk being electrocuted and cautioned that offenders and collaborators in the crime when apprehended would be liable for up to life jail term.
Source: www.energynewsafrica.com
Africa Oil & Power and the African Energy Chamber, have hosted webinar under the theme: ‘Closing Deals: Advancing FID During COVID-19 to explore the future of deal-making and African energy financing in the short- and long-term, following the unprecedented impact of COVID-19 on the sector.
As operators continue to face uncertainty and a low-price oil environment, a range of survival strategies have been employed in the short term, including halting non-essential activities; adopting furlough or layoff strategies; slowing output; refining sales and purchase agreements and utilizing financial hedging instruments to market crude.
In the long term, however, COVID-19 will necessitate a reassessment of project development plans, many of which carry operating costs incompatible with a $40-barrel price.
“We are in unchartered waters. The IMF is estimating a 3% reduction in global GDP for 2020. The effect is almost triple to that of the 2008 financial crisis,” Marcia Ashong, Founder and Executive Director of TheBoardroom Africa and Brace Energy said.
“Africa remains largely a commodity-based economy, and raw materials make up one-third of the continent’s export income. The road to recovery will be extremely slow and arduous. The full effect of COVID-19 on our economies is not fully recognized yet. From the oil and gas perspective, it has derailed major projects. For example, the Aker decision in Ghana [to postpone FID] will postpone further work on its Pecan discovery,” she added.
While the financial viability of oil exploration and production projects has been called into question against a low barrel price, natural gas monetization projects appear to tell another story. In February, Total announced that its Mozambique LNG project is still on track to come online before 2025.
“There has definitely been a difference between oil and gas globally. In oil, COVID-19 has impacted mobility, and demand dropped as low as 72 million barrels in April,” Paul Eardly-Taylor, Oil & Gas Coverage, Southern Africa, Standard Bank said.
“Bizarrely, in the world of liquefied natural gas (LNG), things have been a bit different. As of last week’s IA report, LNG demand was up 8.5% year-on-year globally. That is feeding through to Africa. For an African project [Total’s Mozambique LNG] to raise $15 billion in debt financing in the middle of COVID-19 is an astonishing achievement. With no material second wave occurring and from an energy perspective, the world could be right side by the end of the year. Hopefully 2021 will be Africa’s 2020.”
In terms of FIDs on the continent, only a few definitive delays have been encountered. In Mozambique, ExxonMobil has indefinitely delayed FID on its natural gas project in the Rovuma basin. In Uganda, FID taken by Total for the Tilenga project has been postponed until 2022, while initially planned for the end of 2019.
“We are seeing that if your project is squarely in the energy transition, at worst, it will be delayed by a year or so,” Eardley-Taylor said. “Mozambique is case-in-point. ExxonMobil is even expected to go ahead next year once it has secured a cheaper EPC price. Of the projects that are traditionally funded in Africa and are in the headlights of the energy transition, to what extent can they be achievable and fundable? In Uganda, there has been a strong alignment between stakeholders and lead sponsor Total. There is every expectation that even an onshore oil project with a long ride to the coast may take FID in the coming months or year.”
The lending behaviour of financial institutions will also be impacted by the environmental dynamics of projects, with access to attractive funding terms and project development support then further driving the shift to renewable energy investments.
“The African Development Bank is keen to put money toward renewable energy. Climate change has come into play as constraining financial capabilities of oil and gas companies,”Arron Singhe, Chief Oil Sector at the African Natural Resources Centre, African Development Bank said.
“COVID-19 is sending a significant message to the African oil and gas industry that the paradigm is changing. As an industry, we need to review the way in which we re-develop projects. When the fundamentals of a project are strong and the sponsors have the financial power and leverage from the market, the project has a higher chance of succeeding. It is very important for private investors to look at the environmental situation in the project. How much of your project is contributing to preserving the environment? Beyond COVID-19, this will influence the financial flow of the oil and gas industry in Africa.”
In terms of mergers and acquisitions driven by COVID-19 as companies attempt to consolidate assets, the trend is expected to defy that of previous financial downturns.
“From 2014 onward, we saw a scramble for assets,” Ashong said. “At that stage, company valuations were at their lowest. This time, the trend is the opposite. Companies that will most likely be acquired face several more challenges beyond just acquiring cheaper assets. They have put disposal plans in place to meet cost reduction targets. There are severe constraints on capital and dwindling cash reserves are being prioritized for divided payments. Acquisition targets are also not as attractive as we wished them to be.”
Going forward, there are various financial models that can be utilized to alleviate individual risk and reduce financial exposure of companies in the face of an uncertain operating environment.
“Angola is a strong example of this, as the country essentially moved down this route two to three years ago, explicitly with the marginal field terms and gas law,” Eardley-Taylor said. “Our general understanding is that on a case-by-case basis, individual concessions have been able to amend fiscal terms. For three different concessions, Angola did a ‘blend and extend.’ By getting a longer contractual term for the concession, a percentage of equity was then given to Sonangol that it previously didn’t have.”
Sasol, a South Africa-based integrated energy and chemical company has announced plans to look beyond the near-term measures and position its business for sustained profitability in a low oil price environment.
The Group’s new strategy is to focus on core portfolios of chemicals and energy.
This decision is part of Sasol’s response to address the impacts of the oil price volatility and the COVID-19 pandemic.
“A focused and robust review of the business, and the associated workforce structures, is underway and a detailed update will be provided to stakeholders alongside the full-year results,” the company said in a statement.
A key decision as a result of this includes the discontinuation of all oil growth activities in West Africa.
“The reset of the strategy necessitates a revised operating model, which is still under development and will be announced in the second quarter of the financial year 2021,” read part of the statement.
Sasol explained that revision of the Group’s strategy aims to have a greater focus on enhanced cash generation, value realisation for shareholders and business sustainability.
While the chemicals business will focus on its activities in speciality chemicals, where it has differentiated capabilities and strong market positions which can be expanded over time.
The energy business will comprise the Southern African value chain and associated assets and will pursue greenhouse gas emission reduction (GHG) through a focus on gas as a key feedstock and renewables as a secondary energy source.
This will be a key enabler to achieve the 2030 and longer-term aspirations to shift to a lower-carbon economy.
“The redesign of the organisation to enable our sustainability at lower oil prices will have an impact on our workforce structure. We have accordingly issued a notice to our representative trade unions in South Africa in terms of section 189 of the Labour Relations Act number 66 of 1995, inviting them to enter into consultation with Sasol. A similar process will be followed with the relevant recognised bodies in our other jurisdictions,” the statement concluded.
Source:www.energynewsafrica.com
Burkina Faso’s national energy supplier, SONABEL, has worked with MAN Energy Solutions to increase the country’s generation capacity by 55MW with the expansion of one of its power plants.
The power plant which is located in Kossodo – a suburb of the capital city, Ouagadougou will use three MAN 18V51/60TS engines to increase generation capacity by almost 20% in Burkina Faso.
The plant is owned by SONABEL, with local company Tecmon BF as the main contractor.
“At present, only 30% of Burkina Faso’s population has access to electrical energy. The government now wants to change this and is planning to significantly increase generation capacity in the next years. We are proud of our contribution to this through our new engines in Kossodo,” Waldemar Wiesner, head of Middle-East Africa for power plant sales at MAN Energy Solutions said.
The three engines incorporate two-stage turbocharging. Gensets of this design have both a low- and a high-pressure compressor, which operates in series to deliver an increase in power density and efficiency.
This simultaneously guarantees maximum fuel efficiency and a more compact system design.
Wiesner further commented: “… the high service quality that we have demonstrated over the years in maintaining various engines already in operation was decisive for winning this order.
“In addition, SONABEL has chosen an innovative engine setup for the power plant in Kossodo, making it, by far the most efficient power plant in the country and clearly meeting the emission guidelines of the World Bank.”
Source:www.energynewsafrica.com
The Board of Directors of the African Development Bank (AfDB) has approved a €225 million ($253 million) loan to finance Egypt’s Electricity and Green Growth Support Programme (EGGSP).
The funding will help meet the government of Egypt’s financing requirements in the light of the COVID-19 pandemic and support a sound electricity infrastructure base, a key enabler for the private sector and for the country’s competitiveness.
The EGGSP reform programme seeks to promote a sustainable, competitive and diversified electricity sector that ensures secure supply and supports climate change mitigation and green growth.
“Accelerated deployment of the EGGSP reform programme is instrumental to meet energy needs, combat climate change and promote sustainable development in Egypt. This multi-partner programme provides a model for effective coordination among development partners as we continue to collaborate with all development partners to promote for a green recovery,” Minister for International Cooperation, Dr Rania Al Mashat said in released copied to energynewsafrica.com.
“The EGGSP aims to improve the security of energy supply by increasing the share of renewable energy and improving the financial sustainability of the electricity sector with a view to ensuring greater participation of the private sector in injecting more investments in renewable energy,” Dr. Mohamed Shaker, minister of electricity and renewable energy, noted.
Over the last few years, Egypt has implemented robust reforms aimed at correcting macroeconomic imbalances and improving the business environment and fostering inclusive growth. This progress, however, is threatened by the impact of COVID-19 on the different economic sectors, including the power sector, and on the vulnerable.
The bank’s Director General in charge of North Africa Region, Yacine Fal noted that although the pandemic has put extreme pressure on the economy and the social situation of Egypt, the economic reforms undertaken by the government of Egypt and the Central Bank of Egypt, over the past few years have helped to create greater resilience and also provided a buffer against shocks such as that of COVID-19 pandemic.
The financing provided under the EGGSP support will buttress measures being taken by the government of Egypt to combat the pandemic and to protect the most vulnerable during these difficult times.
It will also help stimulate new private investments in the electricity sector and increase the deployment of clean energy in line with Egypt’s targets for green growth.
The AfDB’s Country Manager for Egypt, Malinne Blomberg, highlighted that the newly approved programme is a continuation of the Bank’s partnership with the government of Egypt on the country’s reform agenda.
In addition to the partnership with the national authorities, the AfDB is collaborating with the French Development Agency and Japan International Cooperation Agency on the Programme.
Source: IES 2020
In spite of the relative price stability on the international market, the prices of Gasoline and Gasoil on the domestic market has seen a significant rise between quarter 1, 2017 and quarter 1, 2020. Both Gasoline and Gasoil prices recorded a surged in excess of 30 percent to sell at roughly Gh¢5.2 per liter at a point in time. The current national average price of GH¢4.38 per liter for both Gasoline and Gasoil have only been occasioned by the coronavirus pandemic which sent international oil and fuel prices plummeting. However, the gains consumers have so far enjoyed February may be eroded, as the prices on the international market have taken an upward journey since end May.
The current high prices paid by for consumers in the country can therefore be largely attributed to the fast depreciation of the Ghana Cedi against the US Dollar, which sold at roughly Gh¢4.3 in January 2017 but currently being traded at Gh¢5.7 plus; compelling importers and marketers of the fuels to pass on to consumers all the costs associated with bringing the products to the pump, including the foreign exchange exposure.
Also even though some taxes such as the Special Petroleum Tax (SPT) on fuels saw a downward review in 2017, there have been some upward review of taxes and levies such as the Road Fund Levy (RFL), the Energy Debt Recovery Levy (EDRL), and the Price Stabilization and Recovery Levy (PSRL) in August 2019; as well as the recent upward adjustment in the BOST Margin.
And so even though fuel prices is deregulated for market forces to dictate price, and to ensure full cost recovery, the government have the sole mandate to manage the forex risk, and the taxes/levies imposed on fuels. And so can partly be blamed for the higher prices we are seeing at the pump, since it could influence fuel prices positively and in favour of consumers by turning its attention to the taxes/levies, and also strengthen the local currency against major trading currencies.
Written by Paa Kwasi Anamua Sakyi (aka Nana Amoasi VII), Institute for Energy Security (IES) ©2019
Email: [email protected]
The writer has over 23 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst
