UK: Almost Half Of Consumers Owed £1.7 Billion By Energy Suppliers
About 13 million households in the United Kingdom (UK) are owed a total of £1.7 billion ($2.1 billion) by their energy suppliers — up 13.5% (£230 million) compared to last year, according to new research comparison and switching site Uswitch.com.
Consumers who pay for their energy by direct debit can often find themselves in credit with their supplier as their monthly payments don’t exactly match their gas and electricity usage.
Their direct debit amounts stay the same every month, but their energy usage changes depending on the time of year. This means that consumers should be in credit with their supplier following the summer months, and in debt to their provider in the depths of winter.
But coming out of winter this year, almost half of all UK households (46%) are due a refund from the energy provider, with the average amount worth £136 — up £10 on last year. In addition, one in ten energy bill-payers (10%) are owed a rebate of more than £200. One in five consumers (19%) say the amount they are in credit with their energy supplier has grown since last year.
Some energy providers do not automatically issue refunds to customers whose accounts are in credit, meaning any money owed to consumers can go unclaimed for months. Almost six in ten (57%) report that their energy supplier has never automatically credited their account.
Many consumers need more information about how to reclaim their money, as almost half of people (46%) are not aware how to. One in ten households (10%) didn’t know whether they were in credit or debt.
At the other end of the scale, 3.9 million households (14%) are in debt to their provider at the end of winter, a total of £548 million for the UK — and an average of £142 each — up £20 (16%) on last year. More than a quarter (27%) say that their debt is higher than it was last year, and nearly one in ten (9%) have moved from being in credit last year to owing their supplier this year.
Concerns over growing debt led some households to take measures to reduce their energy use over the winter period. Steps taken by people include turning down the thermostat (30%), only using the heating on certain days (24%) and turning down each radiator individually (23%).
During the coronavirus lockdown, Uswitch.com is advising consumers to think about whether they want to reclaim their credit, or use it as a buffer to help pay for the extra gas and electricity they will use while spending so much extra time at home. In addition, vulnerable customers can get support from their energy provider.
The vast majority of suppliers either refund automatically or allow you to fill in a form online. If consumers want to reclaim credit, it’s recommended that they do this via suppliers’ websites rather than calling wherever possible, as suppliers’ contact centres are extremely busy supporting more vulnerable customers.
Sarah Broomfield, energy expert at Uswitch.com commented, “Energy firms owe £1.7 billion to families across the UK. At a time when many people are finding their finances squeezed as well as using extra gas and electricity because they have to stay at home, this will be welcome news for anyone sitting on unclaimed credit from their energy supplier.
“More than a fifth of households say that the amount of credit or debt they’re in has increased in the last year, and we hope that providers will act quickly to make sure that direct debit payments accurately reflect energy use.”
Ghana: GOIL Reduces Fuel Prices Marginally
Ghana’s indigenous Oil Marketing Company, GOIL Company Limited has reduced the prices of fuel at the pump in the second pricing window.
The price of super XP RON 95 and Diesel which was sold at GHC 4.32 per litre will now be sold GHC 4.21 per litre effective Thursday, April 16, 2020.
The reduction follows the fall in crude oil prices on the international market.
As at about 7am Thursday, WTI was trading at US$ 19:91 per barrel while Brent was selling at US$ 27.46.
Ghana: Free Electricity Will Worsen Power Sector Challenges-ACEP
The Africa Centre for Energy Policy (ACEP), an energy think tank in the Republic of Ghana is convinced that President Akufo-Addo’s decision to subsidize electricity tariff could worsen the challenges facing the West African nation’s power sector.
According to ACEP, although the move is “well-intentioned to support Ghanaians, particularly the poor and vulnerable”, it argued that it could “endanger the sustainability of the power sector.”
The energy think tank argued that further pointed out that the tariff is highly regressive and poorly redistributes national resources in favour of the rich.
“The challenge Ghana has had with electricity subsidy for the vulnerable in society is poor targeting. A large proportion of households described by the president as ‘the poorest of the poor’ do not benefit from lower lifeline tariffs because many of them live in compound houses.”
“These people consume higher than the base unit of 50kwh a month, rendering the poor unable to enjoy the lifeline tariff. Rather, consumers who are able to procure separate meters and stay within the 50kw consumption band, typically not the poor, benefit from the lifeline tariff,” ACEP argued in a statement copied to energynewsafrica.com.
President Akufo-Addo announced last week that government will fully bear the cost of electricity for all lifeline consumers in the country for April, May and June 2020 as the part of measures introduced by government to mitigate the impact of the novel coronavirus disease on Ghanaians.
He added that commercial consumers will also enjoy a 50 percent reduction in the cost of electricity for the same period.
However, ACEP believes the move could hurt the country’s power sector.
The energy think tank thus urged government to scrap to the 50% reduction in electricity tariffs for commercial consumers but said government could maintain free electricity for lifeline consumers.
“Make lifeline consumption free for everyone. This ensures that at least everybody has the option to enjoy electricity for the most essential purposes. Any consumption above lifeline should be paid for by the consumer. The burden on government for this approach will be GHS92 million a month, significantly lower than the GHS1 billion under the proposed policy. This generates a saving of GHS2.1 billion which can be used for other interventions to mitigate the impact of COVID-19,” ACEP added.
Statement-on-Electricity-Subsidy
Source:www.energynewsafrica.com
Ghana: Oil Marketing Companies Donate PPE To 37 Military Hospital, Give GHS100,000 To National COVID-19 Trust Fund
The Association of Oil Marketing Companies in the Republic of Ghana has presented Personal Protective Equipment (PPE) to the 37 Military Hospital to enable doctors and nurses attend to coronavirus patients.
The PPE, valued at GHS111, 650 include protective goggle, surgical mask, theatre boots, pulse oximeter, suction pump, nasal oxygen cannula, disposable gown and head cover.
The Association, led by its Chairman Mr Johnny Blagogee and the Industry Coordinator, Mr Kwaku Agyemang-Duah, made the presentation on behalf of the Association on Wednesday, April 15, 2020.
Making the presentation, Mr Johnny Blagogee noted that frontline health officers are, sometimes, unwilling to attend to COVIS-19 patients if they are not protected because of the danger of contracting the virus.
This, he explained, is the reason the association found it necessary to support the hospital since the staff are key as far as treating COVID-19 patients are concerned.
According to him, the PPE were specific to the needs of the hospital and urged the beneficiaries to do their best to help combat the virus.
Mr Blagogee, who expressed concern about the low recovery rate of COVID-19 patients, said it his prayer that the current trend would change.
The Commander of the 37 Military Hospital Brig. General Nii Adza Obodai who received the items on behalf of the hospital praised the Association for the gesture and promised to ensure that the items are put to good use.
In a related development, the Association also donated GHS100,000 into the Ghana National COVID-19 Trust Fund.
The COVID-19 Trust Fund was created by the government of Ghana to mobilise resources to tackle the spread of the dreaded virus.
The Chairperson of the National COVID-19 Trust Fund, Justice Sophia Akufo, who received the donation on behalf of the Trustees, expressed the gratitude of the Trust Fund for the gesture.
Justice Sophia Akufo pledged that every penny of the money would be put into the fight against the COVID-19.
“We want to assure you that every penny is going to go into the fight against the spread of the Coronavirus,” she assured her guests.
Source:www.energynewsafrica.com
According to him, the PPE were specific to the needs of the hospital and urged the beneficiaries to do their best to help combat the virus.
Mr Blagogee, who expressed concern about the low recovery rate of COVID-19 patients, said it his prayer that the current trend would change.
The Commander of the 37 Military Hospital Brig. General Nii Adza Obodai who received the items on behalf of the hospital praised the Association for the gesture and promised to ensure that the items are put to good use.
In a related development, the Association also donated GHS100,000 into the Ghana National COVID-19 Trust Fund.
The COVID-19 Trust Fund was created by the government of Ghana to mobilise resources to tackle the spread of the dreaded virus.
The Chairperson of the National COVID-19 Trust Fund, Justice Sophia Akufo, who received the donation on behalf of the Trustees, expressed the gratitude of the Trust Fund for the gesture.
Justice Sophia Akufo pledged that every penny of the money would be put into the fight against the COVID-19.
“We want to assure you that every penny is going to go into the fight against the spread of the Coronavirus,” she assured her guests.
Source:www.energynewsafrica.com Petrobras To Shut Down 62 Offshore Platforms In Brazil
Brazilian oil and gas major, Petrobras has decided to halt operations at 62 platforms located offshore Brazil due to the effects of the coronavirus and the low oil price. Employees will be transferred to other units.
In an update on Wednesday, Petrobras said it would shut down 62 platforms in shallow water fields in the Campos, Sergipe, Potiguar, and Ceará basins.
These measures are part of Petrobras plan communicated to the market on 26 March and is part of a series of actions to preserve jobs and the company’s sustainability in what is the worst crisis in the oil industry in a hundred years.
According to Petrobras, these platforms do not have the economic conditions to operate with low oil prices and are active in sales processes. Also, the shutdown of these units corresponds to Petrobras’ plan to reduce its production.
Petrobras noted that, 80 per cent of these platforms are not manned, and employees who work on other units will not be dismissed because they will all be relocated to other Petrobras organizational units.
In case of interest, workers may join Petrobras’ recently announced Voluntary Severance Programs.
To face this unprecedented crisis that combines an abrupt fall in demand and oil prices, Petrobras also disbursed lines of credit, cut and postponed investments, and reduced operating expenses and personnel expenses.
Source:www.energynewsafrica.com
Ghana: VRA Donates GHS2million To National Covid-19 Trust Fund
Ghana’s largest power generation company, Volta River Authority (VRA), has sunk GHS 2 million into the National COVID-19 Trust Fund.
VRA is among both public and private sector institutions that has donated huge sums of money into the Fund to support the government efforts to combat the spread of the coronavirus in the West African nation.
The West African nation has recorded 636 cases since the outbreak of the novel Coronavirus with eight persons confirmed dead.
The COVID-19 Trust Fund was created by the government of Ghana to mobilise resources to tackle the spread of the dreaded virus.
VRA’s donation was presented by Board Chairman, Mr Kweku Andoh Awotwi, Chief Executive Officer Ing. Emmanuel Antwi-Darkwa, and National Executive Member of the VRA Senior Staff Association, Mr Martin Adjoe at a brief ceremony at the Jubilee House, Seat of Government on Wednesday, April 15, 2020.
The Chairperson of the National COVID-19 Trust Fund, Justice Sophia Akufo, who received the donation on behalf of the Trustees, expressed the gratitude of the Trust Fund for the gesture.
She said the gesture was a clear demonstration of citizenship.
Justice Sophia Akufo pledged that every penny of the money would be put into the fight against the COVID-19.
“We want to assure you that every penny is going to go into the fight against the spread of the Coronavirus,” she assured her guests.
Source: www.energynewsafrica.com
Ghana: Tema Oil Refinery MD Resigns Over Bribery Allegation
The embattled Managing Director of Ghana’s only refinery, Tema Oil Refinery (TOR) Mr. Asante K. Berko has resigned.
Mr. Asante Berko tendered in his resignation to the President, Nana Akufo-Addo, on Wednesday, April 15.
A statement from the presidency announcing the president’s acceptance of the resignation of Mr. Berko read:
“The president of the Republic, Nana Addo Dankwa Akufo-Addo has on Wednesday 15th April, 2020, received the resignation from office of Mr. Asante Berko as Managing Director of the Tema Oil Refinery (TOR). This was after he submitted his resignation letter dated, 15th April, 2020 to the president.”
“President Akufo-Addo has accepted Mr. Asante Berko’s resignation, and duly notified the Board of Directors of TOR of this development. The President wished him well in his future endeavours,” the statement concluded.
Mr Kweku Asante Berko has been charged by the Securities and Exchange Commission (SEC), of the United States of America for breaching the Foreign Corrupt Practices Act, FCPA.
Asante Berko, until his appointment as the Managing Director of TOR, was a banker at Goldman Sachs Group Inc.
According to reports from the US Regulators and information from a civil suit, he made arrangements for sums of money, amounting in millions of dollars as bribes to be paid to some Ghanaian government officials to help a client win a power-plant contract in Ghana.
The Securities and Exchange Commission alleges that Asante Berko, a former executive at Goldman’s London subsidiary, facilitated as much as $4.5 million in bribes to help a Turkish energy company win a contract to build a power plant. The SEC says the energy company, which wasn’t named, funneled money to an intermediary, which then paid bribes to Ghanaian government officials.
Mr. Berko also personally paid bribes totalling $66,000 to members of the Ghanaian parliament and other government officials, the SEC alleges. The said bribery transaction occurred within a period from 2015 to sometime in 2016.
An attorney for Mr. Asante Berko declined to comment on the lawsuit, which accuses Mr. Berko of violating the Foreign Corrupt Practices Act. That law bars individuals and companies from giving anything of value to overseas officials to win business.
The SEC said in a press release that Mr. Berko tried to hide the scheme from the bank, whose compliance officers questioned how the deal was put together. Goldman, which wasn’t named in the SEC’s lawsuit, terminated its involvement with the project after the energy company refused to explain the intermediary firm’s role, the SEC’s legal complaint says.
Ghana: GRIDCo Donates GH¢200,000 To Fight COVID-19
Ghana’s power transmission company, GRIDCo, has donated GH¢200,000 to the government’s instituted COVID-19 National Trust Fund.
The Fund was created by the government to mobilise resources to fight the spread of the coronavirus in the West African nation.
The West African nation has recorded 636 cases of COVID-19 with eight confirmed deaths.
Since the outbreak of the pandemic in the country, and subsequent creation of the COVID-19 Trust Fund, several companies-both in the private and public sectors-have been donating their widow’s mite to help slow the spread of the dread virus.
At a ceremony at the Jubilee House, the seat of government on Tuesday, April 14, 2020, the Ghana Grid Company, led by its Board Chairman, Ambassador Kabral Blay-Amihere, and Chief
Executive, Jonathan Amoako-Baah, donated a cash of Two Hundred Thousand Ghana Cedis (GHS200,000) to the Chairperson of the Fund, Justice Sophia Akuffo.
Addressing the media afterwards, Ambassador Kabral Blay-Amihere said:
“This is our widow’s mite in response to the call by the President. We appreciate
the initiative and we hope that our contribution will be crucial in helping the Fund achieve its objective. We all know that these are difficult times and I want to urge us all to rally behind the government and help the effort to fight this pandemic.”
Receiving the donation, Justice Sophia Akuffo thanked the company and assured that the proceeds would be used to support the needy and vulnerable in society.
The Fund was established by the President last month to receive public donations to help improve the lives of the underprivileged in the country who would be hard-hit by the COVID-19 pandemic.
The Secretary of the Senior Staff Association of GRIDCo, Sarah Dodoo, and Union Chairman, Francis Adjartey, were also present.
Source:www.energynewsafrica.com
APICORP 2019 Financial Results Demonstrate Strong Growth Momentum With Net Income Of USD 112 Million
The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, has disclosed its financial results for the year ended 2019.
Building on record performance in 2018, APICORP posted strong results including a 17% Y-O-Y increase in net recurring income to USD112 million up from USD96 million (excluding non-recurring items) at year end 2018.
APICORP’s strong profitability in 2019 was driven by Corporate Banking and Treasury, whose gross income increased 32% and 24% Y-O-Y to reach USD201 million and USD80 million, respectively.
The Corporation’s balance sheet growth remained strong and resilient in 2019, with a 5.7% increase from USD6.95 billion to USD7.35 billion from the previous year. Notably, leverage (debt-to-equity ratio) remained in check reaching 2.13 in December 2019 compared to 2.07 in the same period last year, and capital adequacy improved slightly from 29.34% in 2018 to 29.6% in 2019.
In October 2019, APICORP’s overall credit rating was upgraded by Moody’s to ‘Aa2’ with a stable outlook from ‘Aa3’. The achievement was due in large part to the steady improvement in APICORP’s liquidity and funding profile, high quality assets, strong asset performance, and moderate leverage, amongst other factors. This makes APICORP the only financial institution in the MENA region with a ‘Aa2’ rating.
Commenting on APICORP’s results, Dr. Aabed bin Abdulla Al-Saadoun, Chairman of the Board of Directors said: “As the world enters an unprecedented period of economic uncertainty, I am reassured by the fact that we have closed out the past year on a strong note. Our business lines exhibited exceptional resilience on the back of challenging market conditions presented by both geopolitical, financial and industry developments in 2019. The increase in net recurring income by 17% and Moody’s credit rating upgrade are both significant milestones that stand as a testament to APICORP’s solid fundamentals. This gives us the confidence to continue to support to the Arab world’s energy sector during a time when sustainable, impact-driven projects have never been more needed.”
Dr. Ahmed Ali Attiga, Chief Executive Officer of APICORP, said: “We are extremely proud of another successful year for APICORP as we continue to navigate a rapidly evolving energy landscape. Our balance sheet growth to USD7.35 billion in 2019 paves the way for APICORP to continue an upwards trajectory, notwithstanding the limitations that the current coronavirus crisis poses upon all sectors of the global economy. However, I believe that the work that we have put into diversifying our portfolio in terms of sectors and geography as well as our broad investor base, coupled with our strong financial position, will serve us well in the coming years and allow us to address the current challenges.”
“When the world eventually begins to recover from the dual impact of the coronavirus pandemic and oil price fluctuations, we will most likely see changes in the region,” added Dr. Attiga. “As a trusted financial partner to the regional energy sector, we are well positioned to support sustainable investments, and entities, that can accelerate both economic recovery and the low-carbon transition. Going forward, we believe that there will be a greater role for multilaterals like APICORP, serving in a countercyclical capacity to reinvigorate the economies of the region. For this, we remain committed to playing a strong developmental role, particularly through leveraging on our partnerships in the industry.”
A New 5-Year Corporate Strategy
In 2019, APICORP finalized its 2020-2024 corporate strategy to align with the evolving energy landscape. The strategy is underpinned by a more integrated and agile model, with sustainability embedded in all aspects of operations. The corporate strategy for the next five years places APICORP at the center of comprehensive offering to a diverse set of clients enabled by partnerships and innovation to better serve the MENA region’s petroleum industries and energy sector.
Corporate Banking
APICORP’s Corporate Banking assets increased by 5% Y-o-Y to reach USD3.69 billion, all while diversifying the portfolio exposure, geographically and sectorally, as well as maintaining a high quality loanbook. Moreover, Corporate Banking booked USD1.4 billion in commitments, thereby sustaining the profitability prospects of APICORP not only in 2019, but also future years. In terms of income, Corporate Banking had a record year, reaching USD121 million in income net of Libor and impairments compared with USD90 million in 2018. Fee income continued to show promise, even in a competitive landscape, where it increased 23% Y-o-Y. Notably, the Gross NPL Ratio remained very low at 0.38% due to strong relationships with APICORP’s partners and support from Member Countries.
APICORP continued to evolve its offerings with more focus on private sector-led projects, primarily in the utility sector and trade finance, to complement its strength in government-sponsored projects.
In line with its commitment to apply ESG principles to all project financing, APICORP continued its increased focus on environmentally-friendly projects where its presence in the renewables sector was reinforced by its support to several bidders on renewable PPPs in the region as well as a rooftop PV project and a commitment to a Saudi private sector company expanding into a wind farm overseas with private sector partners.
Investments
APICORP continued its prudent strategy of investing alongside like-minded investment partners in quality businesses with strong management teams and solid growth potential, with a focus on making investments in Member Countries and the broader MENA region, as well as diversifying into opportunities outside the region that offer exceptional profitability prospects and value-addition to the energy sector. The foundation of APICORP’s investment approach is adopting a long-term perspective in the extraction of value from its investee companies.
In 2019, APICORP made its first direct equity investment in Kuwait in a leading oil and gas services and facilities management company with a global footprint. It also invested in a specialized wellbore services platform in the UK that serves the oilfield services market. At year end, the total equity portfolio under management stood in excess of USD1 billion across 19 direct and 3 indirect investments. For 2020, APICORP is committed to playing a strong developmental role by way of partnering with key players in the regional and global energy sector, especially in light of the uncertainties created by the coronavirus pandemic.
Treasury & Capital Markets
APICORP’s Treasury and Capital Markets continued to strengthen the Corporation’s liquidity profile by working to ensure the maintenance of high liquidity ratios, coupled with the rebalancing of the treasury portfolio towards high-grade fixed income securities. This, in addition to the improved geographical and sectoral diversification in the treasury portfolio as well as to a healthy maturity mismatch position, were fundamental in guaranteeing the soundness and resilience of APICORP’s financial standing.
On the liability side, despite market volatility, APICORP reiterated its commitment towards sustainable growth by way of a concerted effort to prioritize the diversification of APICORP’s funding base. This resulted in successfully expanding the investor profile to include players outside the GCC. In particular, APICORP’s debt capital market issuances saw an increase of investors from Asia and the US. This was manifested by way of eight transactions over the course of the year, including two Formosa Bonds worth USD300 million and USD325 million issued in March and November, respectively, along with several bilateral transactions with European and Asian financial institutions.
While these are unprecedented times due to the impact of the novel coronavirus on all sectors and future petroleum and energy projects, APICORP remains committed to supporting the development and sustainability of its member countries and the wider MENA region amidst the ever-evolving energy landscape.
Ghana: TOR MD Refutes Bribery Allegation, Hints Of Contesting SEC Charges In US
The Managing Director of Tema Oil Refinery in the Republic of Ghana, Asante K. Berko has refuted bribery allegations levelled against him by the US Securities and Exchange Commission.
According to him, it is never true that he bribed former officials of the erstwhile administration for his client to get a power project contract while he worked for US based Goldman Sachs.
“I state categorically that I have not paid any bribes to government officials, Members of Parliament nor any officials of Parliament. I have had no contact with Members of Parliament nor officials of Parliament, regarding the approval of this transaction.
“The SEC’s proceedings have come as a complete surprise to me as the SEC in May 2017, interviewed me extensively. This was my only interaction with the SEC. I gave the SEC full and frank disclosure of my involvement in this transaction, as well as all payments I have received and the dates on which the payments were received. I have since not received any communication from the SEC until this week when my lawyer in the US was served with the civil proceedings and at which same time the news of the proceedings against me broke,” Mr Asante Berko said in a press release to respond to the allegation against him.
According to him, he intends to contest the proceedings to clear his good name stressing that he had already asked his lawyers to file his response to the allegations.
Mr Asante Berko is being charged by U.S. Securities and Exchange Commission for “orchestrating a bribery scheme” and arranging at least $2.5 million in bribes to be paid to Ghana government officials and also bribing Members of Parliament.
The payment was allegedly made to gain approval for a client’s power plant project from “2015 through at least 2016,” according to court documents from New York.
The government officials, along with the companies, are not named in the court documents.
The Securities and Exchange Commission said the former banker arranged the bribes for a Turkish energy company to funnel the money to a Ghana-based intermediary.
The local company then allegedly made the payments to government officials.
“From approximately 2015 through at least 2016 (the “relevant period”), while employed at the Subsidiary [Goldman Sachs Group Inc], Berko schemed to bribe various government officials in the Republic of Ghana (“Ghana”) so that a client of the Subsidiary, a Turkish Energy Company (the “Energy Company”), would win a contract (the “Power Purchase Agreement”) to build and operate an electrical power plant in Ghana and sell the power to the Ghanaian government (the “Power Plant Project” or “Project”).”
Mr. Berko is reported to have arranged for the Energy Company to funnel between $3 million to $4.5 million to a Ghana-based intermediary company “to bribe various government officials responsible for approving the Power Plant Project.”
The Energy Company is said to have transferred at least $2.5 million of the planned $3 million to $4.5 million to the Intermediary Company.
Click on the link below for the full statement
Statement Asante Berko 140420
Source: www.energynewsafrica.com
Global Wind Turbine Supply Chain To Hit $600bn
The global wind turbine supply chain is expected to generate up to $600 billion per annum between 2020 and 2028, according to a new study released by Wood Mackenzie.
Despite the COVID-19 pandemic which is pressing near-term hurdles for the wind energy industry, the market is expected to record 8% growth during the forecast period compared to 2019.
The study states that US PTC phase out post-2020 will spur demand for nearly 5000 wind towers in 2020, compelling turbine OEMs to increase tower imports into the US despite anti-dumping duties.
The more than 44GW of combined peak wind demand in the US and China in 2020 is expected to strain the wind turbine supply.
Wood Mackenzie says higher average turbine prices and a 20% growth in offshore demand reflect a 37% uptick in supply chain potential, representing a cumulative value of $222 billion by 2028. Strategic capital components, such as blades and towers, present a $25 billion cumulative opportunity by themselves.
Shashi Barla, a principal analyst with Wood Mackenzie, said: “A rush in installation activity has caused a shortage of blades and bearings. The coronavirus has jeopardised approximately 10-15% of production volumes in China, Spain and Italy. However, Chinese companies resumed production in early March, resulting in a downgrade of only 3GW for 2020 installations.
“Just over $6 billion worth of turbines and component supply production is already jeopardised in Q1 2020. The coronavirus impact could worsen this if facilities continue to face delays in resuming production.
“Turbine OEMs and suppliers can mitigate the impact by increasing manufacturing during the latter part of the year and relocating supply to other markets, such as India and Mexico.”
Barla added that the US Department of Commerce “slapped preliminary anti-dumping rates on these four countries in 2020, ranging from 5.04% to 65.96%, to create a level playing field for domestic tower suppliers”.
“A surge in demand will force turbine OEMs to continue imports into the US, incurring additional import duty costs between $60-90 million in 2020. Turbine OEMs will be forced to absorb the additional costs and renegotiate contracts with asset owners.”
Source:www.energynewsafrica.com
Gabon: Vaalco Releases Vantage Rig After Completing Gabon Operations
US-based oil and gas company, Vaalco Energy has completed well workover operations on the South East Etame 2H well, located offshore Gabon, and released the Vantage-owned jack-up drilling rig.
Vaalco said in an operational update on Monday that the workover on the well restored production to 2,400 BOPD, in line with the production level before when the electronic submersible pump (ESP) failed in early March 2020.
The company added that it released Vantage’s Topaz Driller jack-up on 9 April 2020, and does not currently expect to perform any additional workovers to better preserve cash flow in the current uncertain environment.
With the completion of the 2019/2020 drilling campaign and the successful South East Etame 2H workover, total company production is approximately 20,000 gross BOPD – 5,400 BOPD NRI to Vaalco.
During the first quarter of 2020, Vaalco brought two new wells online – the South East Etame 4P and South East Etame 4H, experienced normal operational downtime associated with simultaneous production, drilling, and completion operations.
The company also brought production back online as a result of performing two workovers. Production for the first quarter of 2020 was 18,298 gross BOPD or 4,944 BOPD NRI to Vaalco which was near the high end of first-quarter guidance of 5,000 BOPD NRI.
Vaalco also stated that it had two liftings during the first quarter of 2020, one in January and one in February, but the next lifting for 85,000 barrels of oil that was scheduled for March was delayed to 1 April due to poor weather conditions.
As a result, the sales volumes for the quarter were down when compared to the fourth quarter of 2019, despite the higher production in the first quarter of 2020.
Cary Bounds, CEO of Vaalco, said: “We continue to execute operationally and have restored 2,400 gross BOPD of production with the successful workover of the South East Etame 2H well. We have now released the Vantage drilling rig after completing the successful 2019/2020 drilling campaign and executing two workovers that restored production from wells that were shut in due to ESP failures.
“We are proud of the highly successful and transformational drilling program that has added meaningful production and significantly reduced our operating costs per barrel. For the first quarter of 2020, production was 4,944 BOPD NRI, which is […] our highest production since Q4 2015.
“This gives us the confidence to reaffirm our full-year 2020 production guidance of 4,400 to 5,000 BOPD NRI. In addition, our strong production has helped to lower our operational breakeven cost of approximately $31.00 per barrel and, coupled with our current hedge portfolio, positions us well to navigate through the uncertain macro environment we face today.
“Thus far, Vaalco’s operations have not been disrupted by the global COVID-19 pandemic, and we have managed through the logistical challenges that we have faced since the outbreak”.
Source:www.energynewsafrica.com
OPEC+ Slashes Production, Saves Oil Industry From Collapse
In a watershed moment for the oil and gas industry, OPEC and its allies in the OPEC+ group finalized a deal on Easter Sunday that, in conjunction with efforts from the G20 and International Energy Agency, could see up to 20 million barrels of oil per day removed from a severely oversupplied oil market. The deal is set to boost the oil price and provide some much-needed stability for an industry in crisis.
Initially announced Thursday, the agreement was delayed as Mexico refused their share of production cuts. The original OPEC+ deal would have seen a cut of 10 million barrels of crude per day from an October 2018 baseline, for an initial two-month period. With OPEC+ letting Mexico off the hook, the official OPEC+ cut now stands at 9.7 million barrels, as Mexico agrees to cut 100,000 barrels per day instead of 400,000 barrels per day.
In reality, however, the OPEC+ deal will cut more than the quoted 9.7 million barrels, since current production levels are much higher than the October 2018 baselines used to calculate the production cuts. The deal sees Russia and Saudi Arabia absorbing the brunt of the cuts, each agreeing to cut their production down to 8.5 million barrels per day. Saudi Arabia’s production stood at 12.3 million barrels per day, and Russia was producing 11.29 million barrels of oil per day in March. Both countries, however, used 11 million barrels per day as their baseline in the deal.
“These production adjustments are historic. They are largest in volume and the longest in duration, as they are planned to last for two years. We are witnessing today the triumph of international cooperation and multilateralism which are the core of OPEC values,” Secretary General of OPEC H.E. Mohammed Barkindo. Barkindo also noted that the OPEC+ deal paves the way for further collaboration with the G20.
In a meeting on Friday, the G20 nations also agreed to take action to stabilize the market. The United States, for example, is set to use the Strategic Petroleum Reserve to store vast quantities of oil. Additionally, the US will see production cuts of at least 2 million barrels as the market responds to a lack of demand. The US has also reportedly offered to take on an additional cut of 300,000 barrels per day on Mexico’s behalf, although the details of how such a deal would play out have not been released.
The OPEC+ group is expected to request the G20 to cut over 3 million barrels per day of production. The G20 energy ministers agreed Friday to create a task force to monitor the situation and formulate strategies. The Texas Railroad Commission, the agency that regulates the state’s oil and gas industry, is also scheduled to meet on Tuesday to discuss regulating formal cuts, though the US has largely maintained that the free market will determine oil production cuts.
US President Donald Trump tweeted his support for the OPEC+ deal on Sunday.
“This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia,” he said.
Finally, in a reported, but not confirmed, side deal, Saudi Arabia, Kuwait and the United Arab Emirates could agree to reduce production by an additional 2 million barrels of oil per day.
OPEC has “Breathed Life” into Africa
The historic production cuts provide a much-needed financial boost to Africa’s oil and gas producers, including Nigeria, Angola, South Sudan, Sudan, Gabon, Congo-Brazzaville and Equatorial Guinea, as the sudden drop in oil and gas prices coincided with the COVID-19 health crisis and the economic repercussions of closing businesses and restricting movement to deal with the pandemic.
In a statement, Nigeria’s Minister of State for Petroleum Resources, Hon. Chief Timipre Marlin Sylva, said he expects the oil price to rebound by $15 per barrel in a short-term outlook.
“This also promises an appropriate balancing of Nigeria’s 2020 budget that has been rebased at $30 per barrel,” he said.
NJ Ayuk, Chairman of the African Energy Chamber, lauded the efforts of the OPEC+ deal, as a stable oil market will provide economic relief and save jobs throughout the continent.
“OPEC has hit a home run,” Ayuk said. “OPEC has breathed life and given hope to African nations, oil workers, investors and the African business community. We need to focus on exploration soon again. Now we have the ball; we need to run with it and start the process of bouncing back. We need to defend the African oil industry like a junkyard dog in the face of a hurricane.”
South Sudan, a member of the OPEC+ alliance, also welcomed the deal.
“South Sudan is East Africa’s only producing country. Our production was over 350,000 barrels per day before the civil war. At the present moment, we are producing about 185,000 barrels per day with a target on attracting more investment into the oilfields to get our nation to 300,000 barrels per day. The current price war and coronavirus has affected our economy,” the country’s Minister of Petroleum Hon. Puot Kang Chol said.
“We welcome all efforts to stabilize the oil market and South Sudan will continue to play its role. Our government will continue doing its utmost best in making the oil production and fighting the Coronavirus a priority and we will continue collaborating with all our partners,” he added.
OPEC+ Cuts Respond to Slashes in Demand
Each nation, aside from Saudi Arabia and Russia, which are both cutting substantially more, is expected to cut 23 percent of production from May to June. Iran, Libya and Venezuela are exempted from the production cuts, and Mexico is only cutting 100,000 barrels per day.
After this initial two-month period, overall production cuts will lower to 8 million barrels per day from July to December and then lower to 6 million barrels per day from January 2021 to April 2022. The OPEC+ group will meet in July to discuss further action, if needed.
With about 40 percent of the world’s population ordered to stay home to stem the spread of COVID-19, demand for oil and gas has decreased by about 30 percent, from over 100 million barrels per day to under 85 million barrels per day, according to the Energy Information Agency.
The International Energy Agency, which called for the G20 meeting of energy ministers on Friday, argued the market conditions were too much for OPEC+ alone to handle.
“The extreme volatility we are seeing in oil markets is detrimental to the global economy at a time when we can least afford it,” said Dr. Fatih Birol, Executive Director of the IEA.
“Today’s oil crisis is a systematic shock that threatens global economic and financial stability. It requires a global answer. That is why the G20 can be an indispensable forum for decisive leadership when it is urgently required,” he added.
Brent crude was averaging $55.70 per barrel in February, but, with an oil price war and the impacts of COVID-19, both Brent and WTI have reached their lowest level in years, with Brent hitting $22.76 per barrel in March, its lowest price since November 2002.
As demand for oil and the price of oil has declined, storage capacity is also reaching its limits. In just a few weeks, analysts predict oil production may be shut in due to a lack of global storage capacity.
Source: www. energynewsafrica.com
OPEC’s Historic Deal Is A Victory For African Oil Companies, Investors –African Energy Chamber
The African Energy Chamber has congratulated OPEC and OPEC+ Member countries on reaching a much-needed historic deal to cut production and maintain market stability.
After repeatedly calling and lobbying African producers to join OPEC in restoring market stability, the Chamber is particularly pleased to see the wide support for OPEC amongst all of African producing countries.
On Easter Sunday, OPEC and OPEC+ member countries finally decided to cut oil production by 9.7 million barrels a day starting on May 1st, 2020 and until June 30th, 2020. From July 1st, 2020, production cuts will be readjusted to 8 million barrels a day until the end of the year. Finally, OPEC and OPEC+ member countries have agreed on a production cut of 6 million barrels a day from January 1st, 2021 until the end of April 2022. The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and the Russian Federation, both with the same baseline level of 11 million bopd.
“The spirit of cooperation has triumphed and under the leadership of Africa’s own son, H.E. Mohammed Sanusi Barkindo, OPEC reaches yet another truly historic deal for our continent and for global energy markets,” NJ Ayuk, Executive Chairman at the African Energy Chamber said.
“This clearly shows that in times of critical need we can set aside our differences and unite behind historic deals that will make the difference at home for our companies and our employees. The Chamber will continue to put all its resources behind supporting this coordinated industry effort beyond 2022. Compliance is key, so let’s get to work,” added Mr Ayuk.
The decision is truly historic and builds upon the Declaration of Cooperation of 2016 and takes production cuts levels even higher. Over the years, it is the joint efforts of OPEC member countries along with their allies within OPEC+ that have resulted in building an industry coalition able to put the interests of the market first. African producers are playing a key part in this effort, bot via OPEC member countries Nigeria, Angola, Algeria, Libya, Gabon, Equatorial Guinea and Congo, but also thanks to the support of additional producers such as Egypt, South Sudan, Chad or Niger.
Source: www. energynewsafrica.com