The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, has announced that it has provided USD40 million in financing to the Kingdom of Saudi Arabia’s first Independent Sewage Treatment Plant (ISTP) sponsored by the private sector – out of a total project finance facility worth USD160 million.
Financing for the facility was provided in collaboration with The National Commercial Bank (NCB) and Sumitomo Mitsui Banking Corporation Europe Limited (SMBC).
The total cost of the project stands at approximately USD245 million, and is in line with the Saudi Vision 2030 reform plan goal for the optimal use of water resources and to encourage private sector participation in economic development initiatives
Located in Dammam, the Dammam ISTP was awarded to a consortium which comprises Metito, Mowah Company CJSC, and Orascom Construction – who each own 40%, 40% and 20% respectively – by the Saudi Ministry of Environment, Water and Agriculture (MEWA) acting through the Saudi Water Partnership Company (SWPC).
The USD160 million financing facility, which has a tenor of 27 years, will be used for the overall development, engineering, construction, operation and maintenance of the Dammam ISTP.
Dr. Ahmed Ali Attiga, Chief Executive Officer of APICORP, said: “As a trusted financial partner to the region’s energy sector, we are pleased to play our part in supporting the first independent sewage treatment plant in Saudi Arabia. By utilizing world-class facilities and technologies, the project will upgrade the existing infrastructure and enable it to effectively recycle waste water. Partnerships between the private and public sectors in financing sustainable energy projects is key and remains a strategic focus for APICORP now more than ever. We are pleased to contribute to the Kingdom’s Vision 2030 through this initiative that enhance the sustainability of the Kingdom’s utilities network.”
On behalf of the Consortium, Rami Ghandour, Metito Managing Director, said: ‘While the world is navigating unprecedented and testing times due to the evolving COVID-19 pandemic, we are delighted to achieve a strategic milestone for the water and wastewater industry in the region with the successful financial closing of the Dammam ISTP. The financial structure for this pioneering project and the backup received from reputable local and international banks and financial institutions is a clear testament to its importance, impact and to the confidence of all stakeholders in its sustainable success.”
The construction of the ISTP has already begun, with commercial operations scheduled to begin in July 2022. The project has a design capacity of up to 350,000 cubic meters per day and an average daily flow treatment capacity of 200,000 cubic meters per day.
The Dammam ISTP will boast world-class and energy efficient facilities including inlet works, an inlet balancing tank, a treatment plant, pumping facilities, final effluent discharge and ISTP outfall pumping station, an electrical sub-station and connections as well as sludge treatment beneficial use facilities.
Source:www.energynewsafrica.com
Africa Oil & Power (AOP), the continent’s energy investment platform, has announced that it will host the first ever Mozambique Gas & Power Conference & Exhibition, on 8-9 March 2021, in Maputo.
It will be under the theme: “Leveraging LNG: Building A Prosperous Mozambique’.
The Mozambique Gas & Power 2021 will focus on investment, downstream diversification, local capacity building and SMEs, and empowering women through the global Equalby30 initiative, as well as how to mitigate the challenges ahead, as the nation aims to be one of the top ten LNG producers worldwide.
The event will be held in partnership with the African Energy Chamber and Attitude HR.
“At AOP we strive to tell the African energy story and attract investment into the energy sector. We have gathered industry leaders in African countries like South Sudan, Angola, South Africa and Equatorial Guinea, and in 2021 we will bring global investors and policymakers in oil and gas and power to Mozambique. This endeavor requires close cooperation and coordination among local businesses, national governments, financial institutions, international energy firms, international energy agencies and industrial players. It is imperative that this broad range of players find a reliable and frequent forum for meeting, discussing, innovating and closing deals,” James Chester, Acting CEO of AOP said.
Workshops, training and certification programs for local businesses and entrepreneurs will be a vital component of the event and will be held on March 10. AOP will work with all actors in the Mozambican gas and power sectors, across government and private sector, to define opportunities and help new and existing investors make headway in the market.
Find out more about Mozambique’s energy industry and about the event at www.AfricaOilandPower.com.
Source:www.energynewsafrica.com
Petrol and diesel prices have become more expensive for the common man with oil marketing companies raising pump prices by 60 paise per litre on Thursday.
The auto fuel prices have now risen five days in a row with petrol prices increasing by Rs 2.74 and diesel by Rs 2.83 per litre since Sunday. In three of the last five days, the prices have risen by a sharp 60 paise per litre while it increased by around 40 and 55 percent per litre on Tuesday and Wednesday.
Sources in oil marketing companies said that price rise could continue for another week or 10 days as global crude prices are firming up with a pick up in demand following opening up of economies across the globe post Covid-19 related lockdown. Even global crude prices are on the rise and its prices have more than doubled from April levels at over $40 a barrel level.
The increase in retail prices on Thursday has been made under the dynamic pricing system for daily revision of fuel prices which OMCs resumed after over 83 days break during the lockdown period.
In the national capital, the retail price of both petrol and diesel had increased by 60 paise per litre to Rs 74 and Rs 72.22 per litre respectively on Thursday.
In other cities, the increase could vary depending on the tax structure on products.
IANS had published earlier that daily price revision may begin in June and retail prices of petrol and diesel could go up to Rs 5 a litre in phases.
Prices of transportation fuel were last revised under the dynamic pricing policy on March 16 and there were few instances of price hike only when the respective state governments hiked VAT or cess. In a bid to increase revenues during the nationwide lockdown, several state governments raised taxes imposed on transportation fuel.
Already, the gap between cost and sale price of petrol and diesel for OMCs has reached around Rs 5-6 per litre. If this has to be covered over a period of time, given there is no further increase in global prices, auto fuel prices may be increased by 40-60 paise per day for a couple of weeks to cover the losses.
The increase in retail price under daily price revision would largely depend on prevailing oil prices and global oil market at the time.
However, lockdown has also curved demand for auto fuel. This could maintain some check on prices.
Raising retail prices became important for OMCs now as the recent steep excise duty hike without resultant increase in petrol and diesel prices, had substantially brought down its marketing margins from record high level of Rs 12-18 per litre.
If it is unable to raise prices when the global crude prices are rising, it would start incurring losses that will get steeper.
By: Opeoluwa Dapo-Thomas
On Tuesday, oil prices continued dropping as investors and traders weighed oversupply prospects, dollar strengthening, and refining margins. Brent crude traded down to $39.92 a barrel, while West Texas Intermediate (WTI) fell to $37.06 during the trading sessions.
What are the issues?
Oversupply Concerns
Earlier this week, Saudi Arabia decided to end additional output cuts this month, which consequently means that in the coming months, an increase in supply in the market would be inevitable. The end of additional output cuts seems to be subscribed by other Gulf producers as they were also keen on ending further cuts.
If the OPEC+ party was successful, the after party was not. The press conference was not bullish, as the outcome of the meeting, the measures to ensure compliance for members cheating on their quotas sounded weak. The impression that suppliers would self-inspect themselves is the monitoring equivalent of students invigilating themselves during examinations, without any external supervision. Given the mechanical strains in shutting off production and revenue targets by member countries, there would surely be some malpractice. However, Iraq has shown signs of ethical conduct by asking Asian refiners to forgo shipments of its Basrah crude.
Also, the market assessed the tone of the Saudi and Russian Ministers when asked about production policies for August, earlier in the week. Novak, the Russian Energy Minister, claimed that it was too early to say what would happen in August, while Saudi’s Energy Minister also said that it was premature to discuss August’s policies. Bear traders considered that and believed there were no assurances for reducing the supply, which would affect the rallying of prices in the short term.
UBS Commodity analyst, Giovanni Staunovo stated that, “A slightly stronger U.S. dollar is weighed on crude prices with the prospect of higher production from Saudi Arabia, Kuwait, UAE and Oman in July which would not help prices.”
These events colliding with the impending return of Libyan oil and unrestricted oil production from U.S. and Canada raise an oversupply concern.
Strong Dollar
Historically, there is an inverse relationship between the price of the U.S. dollar and the price of oil. The reason for this is that when the dollar is strong, fewer dollars are available to purchase oil (remember oil is priced in dollars). With this explanation, a comeback for the greenback after weekly declines has resulted to the increase in its purchasing power. However, traders are expecting the dollar to take a hit, with the “potential FED stimulus” approaching.
Refining Margins
Two months ago, there were problems with storage capacity in the oil market. Now, another two-word phrase has been injected to give the bears momentum—refining margins. Defined by Mckinsey, ‘It is an industrial measure of the value contribution of the refinery per unit of input.’ This problem formed a part of Goldman Sachs’s outlook for Brent crude in the short term. The investment bank believes that prices would pull back to $35 because of the collapse in refinery margins and the incoming oil production from the U.S. and Libya.
The bank also said, “the collapse in refining margins to unprecedented lows is reflective of both over-valued crude prices as well as a more moderate demand recovery, two pillars of our short-term bearish view.”
Warren Patterson, head of commodities strategy at ING, signaled caution saying, “if we look at the rally we’ve seen in crude oil prices, it’s been amazing, but the big uncertainty is if you look at refinery margins, they are very weak across the board across all regions.”
Could this be a market correction, or is the market taking a breather after strong rallies in the previous weeks, or are oil prices over-valued? The following weeks would be crucial to know the answer to this question.
Dapo-Thomas Opeoluwa is a Global Markets analyst and an Energy trader. He is currently an MSc. Student in International Business, Banking and Finance at the University of Dundee and holds a B.Sc in Economics from Redeemers University. As an Oil Analyst at Nairametrics, he focuses mostly on the energy sector, fundamentals for oil prices and analysis behind every market move. Opeoluwa is also experienced in the areas of politics, business consultancy, and the financial marketplace. You may contact him via his email- [email protected]
The Nigerian Electricity Regulatory Commission (NERC) has expressed its intention to commence enforcement action against 7 electricity distribution companies (DisCos) over their failure to comply with the orders to cap estimated bills to customers.
This was disclosed by NERC in a tweet post on their official twitter handle on Tuesday, June 9, 2020.
“The Nigerian Electricity Regulatory Commission has issued notices of intention to commence enforcement action against seven electricity distribution companies over their failure to comply with the order 197/2020 on capping of unmetered R2 and C1 electricity customers,” NERC said.
NERC’s order 197/2020 places limits on estimated bills that the DisCos can charge the unmetered consumers of residential (R2) and commercial (C1)
The Nigerian Electricity Regulatory Commission has issued notices of intention to commence enforcement action against Seven electricity distribution companies over their failure to comply with the Order 197/2020 on capping of unmetered R2 and C1 electricity customers.
The Nigerian Electricity Regulatory Commission listed the electricity distribution companies involved to include those in Enugu, Eko, Benin, Ikeja, Kano, Kaduna, and Port Harcourt.
These distribution companies were given a timeframe of 14 days with effect from June 4, 2020, to explain why the regulatory commission should not sanction them over their alleged failure to comply with the order.
The NERC had in February issued order No/NERC/197/2020 on capping of estimated billings in the Nigerian Electricity Supply Industry, thereby placing a cap on estimated bills to unmetered customers.
This was to protect unmetered R2 (Residential single and 3 phase meters, who consume more than 50kwh per month) and C1 (Commercial single and 3 phase meters, small businesses) customers from estimated and arbitrary billing and hopefully hasten the process of metering.
Report reaching energynewsafrica.com indicates that a tanker yard at Kpone, near Tema in the Greater Accra of the Republic of Ghana, has been gutted by fire.
According to an eyewitness who confirmed the incident to energynewsafrica.com a couple of the tankers in the yard had been burnt.
Officially, it is not yet clear what sparked the fire though it is alleged that the fire occurred as a result of fuel discharge.
The eyewitness account indicated that fire personnel who were called to the scene are trying to bring the fire under control.
Fire fighters at the scene
The Tema Deputy Regional Fire Officer of the Ghana National Fire Service (GNFS) Divisional Officer Grade I Timothy Affum told energynewsafrica.com in a telephone conversation that his outfit received a call at 6:15pm on Tuesday, June 9, 2020 that there had been a fire outbreak at a tanker yard at Kpone Kokompe and they proceeded immediately to the scene.
According to him, his outfit deployed about four fire tenders to the scene and are currently trying to bring the fire under control.
Source:www,energynewsafrica.com
A former Minister for Energy and Petroleum under the erstwhile John Mahama administration in the Republic of Ghana, Emmanuel Armah Kofi Buah is accusing the Akufo-Addo administration for rolling back the gains made by the opposition National Democratic Congress (NDC) in the oil and gas sector while in government.
According to him, government has done very little to improve the industry as he says they only find luxury in blaming their current challenges.
“I think that this government has rolled back our progress for 10 years,” Mr. Armah Buah who is also the Member of Parliament for Ellembelle made the assertion in an interview with Joy News.
Mr Kofi Buah explained that the discrepancies in the implementation of the local content law and some regulatory mechanisms are some of the major areas where the Akufo-Addo-led administration is failing to effectively manage per his assessment.
“They’ve weakened the local content regime, they’ve weakened the regulatory institutions. In fact the national oil company (GNPC), today go and look at their focus.”
He explained that the NDC’s focus was to take the GNPC to a stage where the company can self-sufficiently discover oil and operate without any international middlemen. This vision, Mr Buah laments, has not materialised due to lack of investment in the sector by government since assumption of office.
“It was realized that this industry is a private-sector driven one. The only way you can compete is to make sure that you’re operating like the private sector. But all these reporting requirements and bureaucracies in government did not allow the GNPC to operate well. So we decided to create another arm of GNPC that is solely private-sector driven. That’s ExplorCo.”
This company [ExplorCo] was supposed to “help GNPC get to that destination and compete,” a vision which the Former Energy and Petroleum Minster says government has made a mess of.
“When a government comes and says we don’t need ExplorCo, throw it away. And takes the 24 per cent we gave to ExploreCo and gives it to the foreigner, we are not making progress,” he revealed.
He chastised the government for blaming the NDC for most of its energy sector challenges adding that “I don’t blame him [Deputy Energy Minister Mohamed Amin Adam] because he has the luxury of saying anything he says because he was not part of the team, led by former President Mahama who never slept and brought Ghana into the gas era.”
Source:www.energynewsafrica.com
The Bulk Oil Storage and Transportation (BOST) Company Ltd has rubbished claims by Ghana’s largest opposition party, National Democratic Congress (NDC) that the governing New Patriotic Party (NPP) failed to act when the issue of contaminated fuel occurred at BOST in 2017.
At a press conference addressed by the National Communications Officer of the NDC, Sammy Gyamfi accused the Akufo-Addo-led governing NPP of sweeping the issue under the carpet for reasons known to them.
“Today, we know that the committee tasked to investigate the Movenpina-Zup Oil contaminated fuel saga, has found that the transaction was criminal and that, the proceeds from same has not been paid into the state coffers till date. Indeed, the committee’s report indicates that Movenpina has not paid BOST for the 471,000 litres sold through Zup Oil Limited. The committee also found out that thousands of litres of fuel which was lodged in the tanks of the NPA could not be accounted for.
“President Akufo Addo’s handling of the “BOSTGATE” corruption scandal smacks of grand collusion and cover up of epic proportions. The fact that till date no one is standing prosecution for this pungent corruption scandal which has caused the nation huge financial losses, bears Akufo-Addo out as the biggest enabler and promoter of corruption,” he said.
However, in its response to the allegations, BOST said it has an evidence to suggest the government acted.
According to BOST, the National Security and BNI, as well as the Ministry of Energy, set up committees and investigated the allegations and reported their findings.
“The Minister for Energy also constituted a committee made up of representatives from the National Security and the National Petroluem Authority (NPA) to investigate the allegations and reported their findings to the Minister,” the statement said.
It noted that BOST further constituted a committee which was made up of key industrial players to investigate the fuel contamination, and the committee also submitted its findings to the company.
BOST also refuted claims by the NDC that the company sold five million litres of contaminated products to unlicensed companies, explaining that it was 471,000 litres which was sold. According to the company, the remaining product was sent to Tema Oil Refinery for correction.
BOST explained that the then MD of the company relied on the established practice for the disposal of the contaminated product.
“Prior to 2017, a total of 38 companies including the local union of BOST, were allowed to buy contaminated products from BOST. It is on record that these companies were not licensed for that purpose,” the company said.
BOST provided the list to back its claims.
Paa Kwasi Anamua Sakyi (Nana Amoasi VII), IES
Globally, access to substantial quantity and quality energy infrastructures have been found as essential to rapid and sustainable socio-economic development.
According to the International Energy Agency (IEA), modern energy services, particularly, electricity and gas have an effect on productivity, health, education, safe water, and communication services. Ahali (2015) finds the extensive use of electric powered machinery as playing major roles in both industrial and household production.
Indeed without electricity, economic transformation through improved productivity in manufacturing and services, technological innovations, and promotion of value-addition in resource-based economies would not be possible.
Insufficient supply of energy will limit socio-economic activities, restrict economic growth, negatively impact living standards, and aggravate poverty and inequality, and also hampers government revenues (Ahali 2015; Oseni 2012; IEA 2014).
It goes to suggest that the need for electricity is critical, as it is a catalyst for sustainable economic development. That it is impossible for a country to develop and sustain beyond subsistence means without having access to electricity for the greater portion of its society. Economic sectors such as agriculture, transportation, mining, services, and industries cannot do without electricity, as it presents itself as a vital commodity.
In spite of its vital role, a billion people mostly concentrated in Sub-Saharan Africa and Asia still live their daily lives without electricity, and hundreds of millions more live with unreliable or expensive power (IEA 2019; Mobisol 2018).
Global Electricity Access
The International Energy Agency (IEA) reports that global efforts to deepen the access to electricity access across the globe are showing positive signs in all regions, and the pace of progress has accelerated over the past few years. That for the first time in 2016, the population not having access to electricity had fallen below the 1.1 billion mark.
In its latest report, the IEA suggests that the number of people without access to electricity has dropped from close to 1 billion in 2017 to 860 million; a record in recent years. Most of the progress made were in developing Asia, where 800 million people representing 80 percent of the total 860 million have gained access since 2010.
IEA’s latest analysis of Asia Energy Outlook 2019 revealed that close to 1 billion people have gained electricity access in developing Asia since 2000 with 94 percent of the region having access to electricity in 2018 compared with 67 percent in 2000. India accounts for nearly two-thirds of this progress as it continues to make unprecedented progress towards universal access.
The analysis of Africa Energy Outlook 2019 shows that in Africa the number of people gaining access to electricity doubled from 9 million a year between 2000 and 2013 to 20 million people between 2014 and 2018, outpacing population growth. As a result, the number of people without electricity access which peaked at 610 million in 2013, declined slowly to roughly 595 million in 2018. Much of this recent dynamism has been in East Africa, as Kenya, Ethiopia, and Tanzania accounted for more than 50 percent of those gaining access. The majority of the progress over the past decade in Africa has been made as a result of grid connections, but the rapid rise has been seen in access via solar home systems. Kenya, Tanzania and Ethiopia accounted for around 50 percent of the 5 million people gaining access through new solar home systems, according to IEA’s latest estimation in 2018.
In spite of the strides made, IEA suggests that sub-Saharan Africa’s electrification of 45 percent in 2018 remain very low compared to other parts of the world. The million people still without access to electricity there represents more than two-thirds of the global total. And about half of the sub-Saharan African population without electricity access can be found in Uganda, Nigeria, Democratic Republic of Congo, Tanzania, and Ethiopia.
Of those without access to electric energy in sub-Saharan Africa, West Africa is reported to accounts for 30 percent. Putting the average access rate across West Africa at 52 percent, with Ghana being one of the most successful countries in the sub-region in expanding access. Data from the IEA has it that in 2016 only 8 countries were listed as having an access rate above 80 percent – Gabon, Mauritius, Reunion, Seychelles, Swaziland, South Africa, Cape Verde and Ghana; while most countries had a rate below 50 percent and some had a rate of below 25 percent.
Electricity Access Rate in Ghana
Becoming fully aware of the key role of electricity to an economy, Ghana in 1989 devoted itself to a 30-year National Electrification Scheme (NES) to achieve universal access to reliable electricity supply by 2020. The objective according to Ahali (2016) was driven by growth in demographic requirements, increased urbanization with an ever increasing technological demand, and the aspiration to transform into a middle-income country.
31 years after the policy was instituted, there still exist a substantial deficit in electricity access in Ghana. Current electrification rate is about 85 percent, a bit far off the target, with no improvement in sight. The baseline at the time the policy was rolled showed national electricity access of about 25 percent, with only 5 percent rural penetration. Data from the Energy Commission of Ghana showed that at the end of 2000 electricity access rate stood at 45 percent, suggesting an annual growth rate of approximately 2 percent. The next decade ending 2010 revealed that the country had achieved an access rate of 67 percent; indicating an annual growth rate of 2.2 percent. Also the annual growth rate between the next 6 years that followed (2010 and 2016) as recorded by the Energy Commission was 2.7 percent. The trajectory therefore shows an incremental annual growth in electricity access.
Source: IES Construct, Data from the Energy Commission
However, over the last 3 years (between 2016 and 2019) the annual electricity access growth rate has seen a substantial decline, from 2.7 percent to a paltry 0.6 percent. As at the end of 2019 the country had obtained a national electricity access rate of 85 percent. If the country had maintained just the annual rate of roughly 2.7 percent, electricity access rate would have been somewhere around 92 percent today; comparable to other countries outside the sub-Saharan African and Asian band.
It is evidently clear that with the current growth rate it is practically impossible to achieve universal access by end 2020. And the admission of this fact is what has led the Government of Ghana revising its target, and seeking to develop new strategies to push the boundaries to achieve the goal of universal access by year 2025.
Ceasing The 2025 Opportunity
To be able to achieve a universal electricity access by the new set year 2025, Ghana may be required to work hard to grow the annual access rate by at least 3 percent, and in tandem with growth in demographic requirements, increased urbanization with an ever increasing technological demand, increase in economic growth, and increase in development and industrial activities; which are consistently placing a high demand for electricity in Ghana.
After continuously increasing power generation capacity from largely thermal sources, and increasing electricity access through grid expansions, it is now time for Ghana to be religious on its policy goal of 100 percent national electricity using renewable energy as a catalyst.
The Africa Centre for Energy Policy (ACEP), an energy think tank in the Republic of Ghana, West Africa, has led energy, governance and development experts to discuss the impact of coronavirus on Africa’s upstream oil and gas sector.
Leading the discussion, the executive director of ACEP, Benjamin Boakye observed that Africa was set to lose US$65 billion from the oil and gas sector this year alone as a result of the effect of the Covid-19.
According to him, the European Commission (EC) made this projection recently and underscored the need for Africa to swiftly move to find alternative financing for the continent’s development agenda.
Mr Boakye, who was speaking at a virtual conference hosted in Accra, noted that the COVID-19 has negatively affected revenue generation.
“We have to start a conversation about how the situation looks in the context of Africa particularly, revenue generation and debt financing and employment in the oil and gas sector,” he said.
Mr Boakye was of the view that the impact of Covid-19 could significantly reduce investment, estimated to be about 33 percent in Africa and subsequently affect the continent’s socioeconomic development.
He bemoaned that small and medium scale businesses in the oil and gas sector could suffer even more adversely.
Commenting on the Ghanaian perspective, Gyekye Tanoh, the Policy and Research Advocacy Coordinator at Hand and Brain Action Research Initiative, who moderated the conference, was of the view that Africa needed to think outside the box to ensure sustainable development of the continent.
“Is Africa learning or it is business as usual? If you have to spend monies and it is not there, what is the consequences of its implication on social investment if you have such a significant drop in revenue and the struggle for investment for the people’s interests, what do have to do?” he posed.
According to Mr Gyekye, structural frustration in the regime of international trade, financial and primary commodity value chain were issues the continent needed to deal with to survive the storms of any global crisis.
Touching on the Mozambique experience on the oil and gas governance culture, Prof. Adriano Alfredo Nuvunga, who is the Executive Director of the Centre for Democratic Development in his country, emphasised poor management and ill-developed infrastructure of the oil and gas sector as the main challenges in his country.
He admitted that, though the current government was improving, the pace was too slow to revolutionarise the sector soon.
Other speakers from Uganda, Kenya and participants across the globe contributed to making insightful suggestions to help Africa to come out with prudent and pragmatic measures to deal with the poor governance culture in the oil and gas sector so that the continent’s people could benefit in the area of local content development, social investment drives and other important human centred programmes to speedily drive development, even after the Covid-19.
Italian oil and gas major Eni has announced a restructuring of its business operations, with a strong focus on incorporating renewable energy and wide-spread energy efficiency, as well as decarbonisation efforts on an “irreversible path” to make the company “leaders in the energy transition”.
The two new business groups are Natural Resources and Energy Evolution.
Natural Resources, headed by current Chief Upstream Officer Alessandro Puliti, will focus on the company’s gas operations, the scaling up of energy efficiency efforts. Carbon capture and compensation projects are also planned.
The second new division, Energy Evolution, will be headed by current Chief Financial Officer (CFO) Massimo Mandazzi, and will focus on expanding Eni’s power renewable energy and biomethane generation efforts and coordinate the bio and circular evolution of Eni’s refining system and chemical business.
Overall, the business group will incorporate renewable energy and natural gas-powered generation, whilst greening its refining and chemicals businesses, Retail Gas&Power and mobility Marketing operations.
Planned projects include carbon capture, gas to power and gas to hydrogen projects will be examples, allowing to add value to gas resources and provide customers with entirely sustainable energy.
Further plans include greening the company’s consumer product line, with a focus on producing “greener” products.
The company also intends introducing a new function, Technology, R&D, and Digital, which will incorporate the company’s current ICT and Digital activities, and focus on research & development of new technologies and their fast implementation on an industrial scale.
Chief Executive Officer Claudio Descalzi said: “This new structure reflects Eni’s pivot to the energy transition. An irreversible path that will make us leaders in decarbonised energy products.
“To make the plan come true, and position us to accelerate its delivery, we are creating two new business groups in our company. They will have specific objectives, but they will also cooperate to deliver on the transition and to provide our customers with the widest range of sustainable products.
“The fight against climate change and promotion of sustainable development is recognised by governments, civil society, investors and business alike as priorities for global development. Only those who pursue these in an innovative way will create value in the long term.
“We want to be main actors in a Just Energy Transition, in which we believe, and is central to Eni’s transformation,” concludes Descalzi.
The new organisational structure will be implemented over the coming weeks.
Expectations that the oil market will swing into deficit in July prompted HSBC to revise up its oil price forecasts for this year, with the U.S. benchmark WTI Crude projected to average $34.60 a barrel.
The previous forecast by HSBC Global Research was $32.80 per barrel. The bank also increased its forecast for the average Brent Crude price in 2020 to $39 a barrel from $37 previously expected, due to the record production cuts that are set to flip the market into deficit next month.
“We see the market almost back in balance in June, and moving into deficit in July,” HSBC said on Monday.
The oil market is set for a deficit from August onwards, even after OPEC+ eases the current cuts, Rystad Energy analysts said on Friday. The market deficit coming this summer, however, doesn’t mean that there will be a global oil supply crunch, because inventories and floating storage have yet to begin depleting.
Despite the record cuts from the OPEC+ group and economics-driven production curtailments in North America, the trend in oil prices is still uncertain because the recovery path of global oil demand is still highly uncertain, according to the bank.
“We think this uncertainty is behind the latest push from OPEC+; its goal of eliminating the market surplus is in sight, but the precise timing is not yet clear,” HSBC Global Research said, as quoted by Reuters.
OPEC+ agreed on Saturday to extend the record productions cuts of 9.7 million bpd by one month through the end of July, contingent on all countries in the pact complying 100 percent with their quotas and compensating for lack of compliance by over-achieving in the cuts in July, August, and September.
Early on Monday, oil prices were down at 8:40 a.m. EDT, with WTI Crude trading at $39.15, down by 1.09 on the day, and Brent Crude down 0.35 percent at $42.17, as the OPEC+ extension was largely priced in in Friday’s market rally and as Libya confirmed the restart of its largest oilfield following six months of blockades.
Oil and gas firm, Equinor is launching its ambitions for reducing own emissions from ships, detailing how the company will help decarbonise shipping as the UN marks World Oceans Day.
Specifically, the company aims to halve maritime emissions in Norway by 2030 compared to 2005 emissions and halve global emissions by 2050 compared to 2008 emissions.
The ambitions for the maritime activity are said to be in line with the goals of the International Maritime Organization (IMO) for global shipping and the goals set by Norwegian authorities.
What is more, as a supplier to the maritime sector, Equinor wants to escalate its production and use of low-carbon fuels by 2030 and strongly increase production and use of zero-emission fuels by 2050.
As explained, Equinor’s maritime climate ambitions are embedded in the company’s climate roadmap launched on 6 February 2020. The climate roadmap aims to ensure “a competitive and resilient business model” fit for long-term value creation and in line with the Paris agreement.
The maritime sector represents 6 per cent of total greenhouse gas (GHG) emissions in Norway and 2–3 per cent of global emissions. Being both a producer and a supplier of fuel to the maritime sector, Equinor has extensive maritime activity around the world, including around 175 vessels on contract with the company at any time.
“As a producer and user of maritime fuel, Equinor has a good opportunity to help decarbonise shipping. From our position on the Norwegian continental shelf (NCS), we will develop new solutions contributing to substantial emission reductions together with the maritime industry in Norway and internationally,” Irene Rummelhoff, Equinor’s executive vice president for Marketing, Midstream and Processing (MMP), said.
Equinor said it has worked systematically on reducing its carbon intensity by developing new types of vessels and using alternative fuels in close collaboration with the industry.
“Equinor has been a pioneer in using liquefied natural gas (LNG) as a fuel, and during 2021 we will introduce large-scale use of liquefied petroleum gas (LPG) as a fuel,” according to the company.
Additionally, a new hybrid battery system has been introduced for seven supply vessels on the NCS, and the next
generation of dual-fuel vessels is being introduced to the fleet continuously.
The company has also, in collaboration with the maritime industry, started developing the world’s first supply vessel to run on zero-emission ammonia. Under the agreement signed with the shipowner Eidesvik Offshore, Viking Energy could become the first supply vessel in the world to run on ammonia for long distances, without any greenhouse gas emissions.
Equinor intends to continue supporting the development of low-carbon fuels for the industry.
“In an intermediate phase, we will introduce batteries, hybrid solutions as well as LNG and LPG solutions. Our longer-term ambition is to develop value chains for zero-emission fuels to the maritime sector that will gradually replace low-carbon fuels,” Equinor further said.
“Equinor will play an important role in developing new zero-emission fuels for ships, such as hydrogen and ammonia, in combination with carbon capture and storage,” Rummelhoff continued.
“We can help establish new value chains in the sector, for example by pilot projects together with other players. We see this as an exciting business opportunity that fits the company’s strategy and technological advantages as well as Norway’s role as a laboratory for new maritime technology.”
Saudi Arabia made some of the biggest price increases for crude exports in at least two decades, doubling down on its strategy to bolster the oil market after OPEC+ producers extended historic output cuts.
The steepest jump will hit July exports to Asia, state producer Saudi Aramco’s largest regional market, according to a pricing list seen by Bloomberg.
Overall, the increases for Saudi crude erase almost all of the discounts the kingdom made during its brief price war with Russia.
The sharp price increases show that Saudi Arabia is using all the tools at its disposal to turn around the oil market after prices plunged into negative territory in April. As the price setter in the Middle East, the increases in its official prices may be followed by other producers.
Tighter crude supply is helping repair an oil market battered by the coronavirus. Unprecedented output cuts led by the Saudis and Russia boosted prices in May, and the OPEC+ group decided Saturday to extend those limits through July. Brent crude, down 36% this year, has clawed back some of its losses and ended trading on Friday at more than $40 a barrel.
But the profits that oil refiners make from processing crude into fuel are struggling to keep up with the rising market, and the sharp Saudi price hikes are likely to exacerbate that problem. Representatives for refineries from Europe and Asia expressed concern and said the pricing would crush margins.
Saudi Arabia unleashed a price war in March when it slashed official selling prices by the most in three decades. The kingdom took that drastic step after failing to reach an agreement with Russia to extend production cuts in the face of the pandemic’s destruction of oil demand.
After Tweets, phone calls and top-level consultations, OPEC+ returned to negotiations and hammered out the biggest output curbs in history, pledging to take nearly 10 million barrels a day off the market. U.S. production plunged by roughly 2 million barrels daily as low prices drove producers to shut wells.
OPEC+ chose on Saturday to renew production limits at almost the same level, instead of tapering them as planned at the end of June. Aramco, which typically announces pricing on the fifth day of each month, had delayed its July numbers until after OPEC+ members made their decision.
Saudi Arabia sells its crude at a differential to oil benchmarks, announcing every month the discount or premium it’s charging to global refiners. The so-called official selling prices help set the tone in the physical oil market, where actual barrels change hands.
With China’s demand for crude now rising, the Saudis are raising prices. The month-on-month increase in the official selling price for flagship Arab Light crude to Asia, which accounts for more than half of Saudi oil sales, is the largest in at least 20 years. Aramco raised Arab Light to Asia by $6.10 a barrel to a premium of 20 cents over the benchmark.
It raised July pricing for all grades to Asia by between $5.60 and $7.30 a barrel. That compares with an expected increase of about $4 a barrel, according to a Bloomberg survey of eight traders and refiners.
Buyers in the U.S., the Mediterranean region and Northwest Europe will also pay more for oil.
Source: IES Construct, Data from the Energy Commission
However, over the last 3 years (between 2016 and 2019) the annual electricity access growth rate has seen a substantial decline, from 2.7 percent to a paltry 0.6 percent. As at the end of 2019 the country had obtained a national electricity access rate of 85 percent. If the country had maintained just the annual rate of roughly 2.7 percent, electricity access rate would have been somewhere around 92 percent today; comparable to other countries outside the sub-Saharan African and Asian band.
It is evidently clear that with the current growth rate it is practically impossible to achieve universal access by end 2020. And the admission of this fact is what has led the Government of Ghana revising its target, and seeking to develop new strategies to push the boundaries to achieve the goal of universal access by year 2025.
Ceasing The 2025 Opportunity
To be able to achieve a universal electricity access by the new set year 2025, Ghana may be required to work hard to grow the annual access rate by at least 3 percent, and in tandem with growth in demographic requirements, increased urbanization with an ever increasing technological demand, increase in economic growth, and increase in development and industrial activities; which are consistently placing a high demand for electricity in Ghana.
After continuously increasing power generation capacity from largely thermal sources, and increasing electricity access through grid expansions, it is now time for Ghana to be religious on its policy goal of 100 percent national electricity using renewable energy as a catalyst.
