Ghana: COVID-19: Commissioning Of 100-Bed Infectious Disease And Isolation Centre Rescheduled To June 30
The 100-Bed Infectious Disease and Isolation Centre project being undertaken by the Ghana COVID-19 Private Sector Fund, which was initially scheduled to be completed by the end of May, has been rescheduled due to some structural changes.
President of Ghana, H.E. Nana Akufo-Addo performed a virtual sod cutting ceremony for the U.S$3.5 million project on Friday, April 19, 2020.
The project was expected to be completed in six weeks.
However, a statement signed by Senyo Hosi, CEO of Chamber of Bulk Oil Distributors (CBOD) and Managing Trustee of the Ghana Covid-19 Fund, explained that the project has received recommendations from the Ghana Medical Association to improve the facility’s delivery status in the face of the Covid-19 pandemic and beyond, hence, the changes in the completion date.
The statement mentioned the incorporation of a level 2.5 scalable to a three biomedical laboratory in consultation with officials from the Noguchi Memorial Institute of Research.
The centre will have a total insulation for energy efficiency since the facility would be required to be climatically controlled throughout its use.
Again, it will have an application of ultra-violet radiation treatment of air entering and exiting the facility.
This is to ensure no contaminated air exits the facility.
Senyo Hosi stated that these additions are very critical to the output of the facility, noting that the inclusion of these improvements and notifications led to the need for more work and “has required us to revise our completion and commissioning date to June 30, 2020.”
He expressed appreciation to donors for their contribution towards the fund and urged those who have not yet contributed to do so.
“We call on all to join the campaign and donate any amount towards the completion of the project. Simply dial *718*25*219# and follow the prompts,” he encouraged the general public.
Source:www.energynewsafrica.com
Nigeria: FG Pushes Conclusion Of Electricity Deal With Siemens
The federal government (FG) of Nigeria has directed several ministries to conclude the engagement with Siemens to commence the pre-engineering and concessionary financing aspects of the Presidential Power Initiative (PPI).
President Muhammadu Buhari has been informed on the commencement of the next phase of the deal with Siemens to upgrade the nation’s dilapidated power infrastructure.
The presidency instructed the Ministry of Power, the Ministry of Finance, Budget and National Planning, as well as the Bureau of Public Enterprise, to speed up the process with the German engineering firm.
“Our goal is simply to deliver electricity to Nigerian businesses and homes. Our intention is to ensure that our cooperation is structured under a government-to-government framework. No middlemen will be involved so that we can achieve value for money for Nigerians,” Buhari said.
An agreement had been signed in July 2019 to rehabilitate and then expand the country’s electricity grid, which experiences regular power outages. Nigeria has more than 13,000MW of installed electricity generation capacity but only 7,500MW is available and less than 4,000MW is dispatched to the grid each day. The partnership with Siemens will modernise the existing network before enlarging it until the country can produce and distribute 25,000MW. The project will be financed by concessionary loans covered by Euler Hermes Group SAS, a large provider of credit insurance, the statement said. The government will “on-lend” the funding to the shareholders of Nigeria’s power distribution companies and Siemens will have sole responsibility for selecting its contractors, the Presidency stated. According to the government, all discos have, directly, and through BPE, been diligently carried along over the last 15 months to understand in detail the challenges in the electricity systems, adding that the president has approved the release of funding for the first part of phase 1 of PPI to kick-off the pre-engineering and concession financing workstreams. The president noted that to ensure fairness and transparency of the intervention, he has also directed that the International Finance Corporation (IFC) should be engaged to assist in developing the commercial structure of the intervention, as well as in undertaking an independent company valuation of the discos.President @MBuhari has directed the Ministries of @PowerMinNigeria and @FinMinNigeria, and the Bureau of Public Enterprise (BPE) to conclude the engagement with Siemens AG to commence the pre-engineering & concessionary financing aspects of the Presidential Power Initiative.
— Presidency Nigeria (@NGRPresident) May 27, 2020
Ghana: Minister Charges Oil Companies To Sit Up To Curb Spread Of COVID-19
Ghana’s minister in- charge of the Western Region, Kwabena Okyere Darko Mensah, has charged oil and gas companies to sit-up to avert further spread of COVID-19 at Ghana’s Jubilee Field.
The Minister’s call follows the outbreak of Coronavirus at the country’s Jubilee Oil Field where 57 petroleum workers have tested positive for the contagious disease.
Speaking to journalists, Mr. Darko Mensah also charged the country’s upstream regulator, Petroleum Commission, to quickly ensure that oil and gas companies adhere to the COVID-19 protocols.
Ghana: Make Ghana National Gas Company A Subsidiary Of GNPC – ACEP Tells Gov’t“It is very important that the oil and gas industry in the Western Region which Ghana depends on is protected from any adverse effects of COVID-19. This is very important because when they go off the light also goes off. We wouldn’t get gas to power and fuel our vehicles and industries. So I believe that the oil companies are international companies who understand health and safety and therefore it is important and incumbent on them to make sure that they do the right thing. The Petroleum Commission that works closely with them should always be on the lookout to make sure that they practice the proper health and safety so that it doesn’t affect the Western Region and Ghana. Oil and gas companies need to sit-up, really sit-up.” Mr. Okyere Darko-Mensah also added that what is happening at the Jubilee Field may be as a result of somebody lowering the protocols and cautioned against that. “I know that immediately COVID-19 came, a lot of them were implementing the protocols. Even before you board the FPSO or even before you get onto the helicopter, you are quarantined for 14 days. But I believe that along the line, someone felt that it was too safe to be quarantined, that’s why we could see some of the infections. Currently, we know that we have 57 in the Petroleum sector. They have all been isolated now and we are hoping that those on board will appreciate the reason why they need to follow the protocols.” The Regional Minister also cautioned residents to adhere to the established social distancing protocols to aid what the health directorate is doing to curtail further spread of the virus in the region. “I know that immediately COVID-19 came, a lot of them were implementing the protocols. Even before you board the FPSO or even before you get onto the helicopter, you are quarantined for 14 days. But I believe that along the line, someone felt that it was too safe to be quarantined, that’s why we could see some of the infections. Currently, we know that we have 57 in the Petroleum sector. They have all been isolated now and we are hoping that those on board will appreciate the reason why they need to follow the protocols.” The Regional Minister also cautioned residents to adhere to the established social distancing protocols to aid what the health directorate is doing to curtail further spread of the virus in the region. Ghana’s Coronavirus case count has hit 8,070 with 2,841 recoveries and 36 deaths. Source: www.energynewsafrica.com
Ghana: Owusu Bempah Writes: ACEP Must Come Again
I’m puzzled by the attempt by Africa Centre for Energy Policy (ACEP) to reduce the operations of Ghana National Gas Company limited to a subsidiary of Ghana National Petroleum Company (GNPC).
ACEP after rejecting an endorsement of the GNGC to the Office of the President recommending the company to perform the role as the national gas aggregator, in a statement issued on 23 May 2020, urged government to make the Ghana National Gas Company, GNGC, a subsidiary of the Ghana National Petroleum Corporation, GNPC, as a response to the execution of the Gas Master Plan.
Not only is the ACEP statement attacking the decision by the presidency on the institutional alignment in the Gas sector farcical, but it also brings to the fore the mischief and disingenuous outrage that has characterized the operations of some of these industry players.
When you read the header and indeed parts of the presentation, it seems like ACEP is arguing for restoration of GNPC’s role as the Gas Aggregator, but eventually concludes with a recommendation that GNGC should be made a subsidiary of GNPC. They rely on the Gas Master Plan and GNPC’s “Balance Sheet” to support their recommendation.
Well, before the folks at ACEP prance around with their hideously ignorant and misinformed indicators, let’s get a few pesky facts out of the way:
1. The assertion by ACEP that GNPC can use their Balance Sheet to Finance GNGC’s Projects is not a sufficient reason for making GNGC a subsidiary of GNPC because it is the government of Ghana that affords both agencies the security for any financial transaction in the sector.
2. The Gas Master Plans (GMPs) are meant to address two issues: Design Optimization and Operational Optimization. The current Gas Master Plan addresses only the former. Ghana Gas Team and their counterparts from Trinidad and Tobago have addressed the latter. Furthermore, a GMP is also a working document, which requires regular update.
3. None of the supply and demand data in the GMP are applicable. The infrastructure plan is also obsolete, and needs revision. However, some of the recommendations and procedures are still worth considering. It will also require an expanded scope to include operational optimization”.
4. Ghana Gas’ core business has three key components – Daily operations, which takes about 80% of the life-cycle time, periodic Maintenance which takes about 10% of the time and occasional expansion which takes the remaining 10% of the life cycle time. So Ghana Gas’ key job description is to deliver gas for power generation for Ghanaians, through reliable and uninterrupted operations. Not necessarily expansion projects.
5. Ghana’s Gas industry still riddled with legacy that; and Ghana Gas is owed the most by sister agencies. This is a very unusual circumstance by any standard. ACEP should be providing ideas to address this recurring legacy problem in the sector, instead of espousing short sighted band-aid solutions.
6. It is important not to base lasting policy decisions, including Institutional Arrangements, just on ability to Finance new facilities or expansion of existing ones or someone’s Balance Sheet as suggested by ACEP.
7. The 4 year-old GMP is hardly fit for purpose and requires an update and therefore cannot be used as bases for such recommendation by ACEP.
In essence, I will urge ACEP to consider checking the recommendations of the Gas Master Plan (2016) again. A gas masterplan is essentially a composite document which provides a roadmap for achieving the most cost-effective solution for infrastructure design (Design Optimization) based on gas supply and demand forecasts; and minimization of operating cost for operational planning (Operational Optimization).
Ghana: BOST Margin Increased From Ghp 3 To Ghp 6 Effective June 1
Ghana’s petroleum downstream regulator, the National Petroleum Authority (NPA) has directed Oil Marketing Companies to increase the Bulk Oil Storage and Transportation (BOST) Company Margin on petroleum products from 3 pesewas to 6 pesewas
According to a Memo signed by the Chief Executive Officer of the NPA, Hassan Tampuli, the directive is in line with a decision taken by Cabinet and Communicated to the National Petroleum Authority.
“We write to inform you of a review of the BOST Margin in the Price Build Up (PBU) of Petroleum products effective June 1, 2020. This is in line with a decision taken by Cabinet and communicated to the National Petroleum Authority (NPA) by the Ministry of Energy,” the Memo said.
It said all the various petroleum products from Petrol to Kore Mines are expected to apply the new levy of 6 pesewas.
It would be recalled that the National Petroleum Authority in December 2019, directed Oil Marketing Companies to increase the BOST Margin from 3 pesewas to 6 pesewas.
The increment was however resisted by some civil society groups led by Chamber of Petroleum Consumers.
This forced the government to reverse the decision.
However, following a recent tour of BOST Depots by officials of some civil society groups including COPEC, IES, ACEP and IMANI they all agreed to the need to increase the Margin to enable the company rehabilitate its critical infrastructure which had been in deplorable state for years.
Source:www.energynewsafrica.com
Source:www.energynewsafrica.com
Ghana: MiDA To Construct US$1.5 Million Testing Lab For GSA
The Millennium Development Authority (MiDA) has announced that it is funding the construction of an Air Conditioner Test Containment Building and Testing Laboratory for the Ghana Standard Authority (GSA) at the cost of U.S$1.5 million.
The project, which will be sited at the premises of the GSA’s head office in Accra, capital of Ghana, will take off on June 1. It is being funded by Millennium Challenge Corporation, an Agency of the United States Government.
Upon completion, the facility will support the Government of Ghana’s efforts towards implementing a national programme that will enforce performance labelling of ductless RAC systems.
It will also ensure that appliances meet a Minimum Efficiency Performance Standard (MEPS) and contribute to the efficient use of electricity.
The test laboratory would be equipped with a Balanced Ambient Room Calorimeter (BARC) Test Chamber for evaluation of the capacity and performance of Room Ambient Calorimeters (RACs), in accordance with the ISO 5151 Standards.
MiDA is also collaborating with the GSA on the development of Standards and Labels for 20 energy consuming electronic appliances.
A statement from the Communication and Outreach Unit of MiDA said in line with the project implementation process, a Kick-off Meeting was held at the GSA’s head office in Accra on Friday May 29, 2020.
It said the project’s stakeholders at the meeting indicated their readiness to ensure the completion of the project within the planned time schedule.
The meeting was also to certify that the stakeholders understood their roles and were aligned on the project’s objectives, expected deliverables and the working environment.
Present at the Kick-off Meeting were senior officials of the GSA led by Professor Alex Dodoo, Director General, officials of MiDA, led by Ing. William Amuna, Technical Controller, representatives of SMEC PTY, the Project’s Supervising Engineers and Messrs. GHS Housing limited, who has been contracted to construct the AC Test Laboratory.
Source:www.energynewsafrica.com
Ghana: 57 Jubilee Oil Field Workers Test Positive For COVID-19
About fifty seven workers at the Jubilee Oil Field being operated by Tullow Ghana Ltd. in the Western Region of the Republic of Ghana have tested positive for Coronavirus.
This follows a contract tracing exercise after two subcontractors working with Tullow Ghana tested positive for the disease.
Tullow Ghana confirmed the latest development in a press statement.
Earlier, the Western Regional Director of Health, Dr. Jacob Mahama had said about 50 of the workers who were screened had tested positive and were asymptomatic.
Dr. Mahama added that the infected persons, likely to be working on the Kwame Nkrumah FPSO and MV Lancelot, are being isolated in Accra and Takoradi.
Tullow Ghana Ltd on Tuesday, May 26 confirmed two cases of coronavirus involving its subcontractors.
The company then initiated a general screening as a result.
Tullow had earlier it had been following strict quarantine procedures for all personnel working offshore including two weeks of government-approved quarantine.
The Western Region currently has 395 known infections.
Ghana’s COVID-19 case count has risen to 7,616.
Tullow Covid-19 situation
Mozambique: Total Secures $15 billion Funding For LNG Project
French oil major Total has secured approximately $15 billion in financing for the Mozambique liquefied natural gas (LNG) project, which is estimated to be worth more than $20 billion.
Total, along with 20 lenders, have reached an agreement for the first phase of senior debt funding of $14.4 billion.
Total expects the financing to be closed in the third quarter of this year. The signing of the $15 billion financing deal was scheduled for June and involves banks including, the Standard Bank Group, Société Générale SA and Rand Merchant Bank.
The U.S. Export-Import Bank has approved the $4.7 billion loan to the project, and the Japan Bank for International Cooperation will provide $3 billion.
Total acquired Anadarko’s 26.5% interest in the LNG project in September last year for $3.9 billion. The project is expected to produce 12.9 million tons of LNG per annum, with first LNG expected to come on stream in 2024. Offshore Area 1 contains more than 60 trillion cubic feet (tcf) of gas resources, of which 18 tcf will be developed with the first two trains.
Approximately 90% of the LNG production from the project is already sold to Asian and European buyers. Other partners in the joint venture include the state-owned energy company ENH, Mitsui from Japan, PTT from Thailand and India’s ONGC Videsh, Bharat Petroleum Resources and Oil India.
Operations at the Mozambique LNG project have been suspended to contain the spread of COVID-19.
Source: Africa Oil & Power
Nigeria: Group Opposes Removal Of TCN MD
Nigerian Power Consumers Forum (NPCF) has faulted the removal of Mr Usman Gur Mohammed as the Managing Director of the Transmission Company of Nigeria (TCN).
According to the group, the action is likely to jeopadise the $1.661 billion multilateral agencies funded power projects in the country.
TCN is currently executing various projects across the country tending towards the expansion of the power transmission to 20,000 megawatts (MW).
The French Development Agency and European Union Grant was $500 million dollars, World Bank gave $486 million, AfDB gave $410 million, Japan International Corporation Agency (JICA) brought $238 million and a grant to deliver capacitor bank in Abuja, Nasarawa and Lagos; World Bank is bringing another $27 million for the North Core Project.
Ghana: VRA To Clear 400 Structures For Construction Of Pwalugu Multipurpose Dam To CommenceAll the projects totalling $1.661 billion except the North East Transmission Project which has been kept in abeyance until security improved are at various stages of implementation because TCN now has the best implementation structure that has strengthened the confidence of these foreign financial institutions. The group argued that the removal of Mohammed, defeats the objectives of due process in the Federal Government’s establishments and the overall objectives of power sector reform. General Secretary of the NPCF, Comrade Michael Okoh, said: “President Muhammadu Buhari needs to immediately direct a reversal of the action to save the power sector from the budding dictatorship. “TCN was already a crumbling block in 2016 despite federal government’s $32 million dollars Manitoba Hydro International Nigeria Limited (MHINL) management contract, which was never the real MHI of Canada, to reform TCN. “With UG Mohammed at the top of affairs, the public utility firm has been reformed within three years and had attracted $1.66 billion investments to expand TCN capacity to 20,000 megawatts (MW) by 2023 through the Transmission Rehabilitation and Expansion Programme (TREP),” he said.
Ghana: Expect Increment In Fuel Prices In June–IES To Consumers
Consumers of petroleum products in the Republic of Ghana should be prepared to pay more for the fuel at the pumps in the first pricing window in June, Institute for Energy Security (IES) has said.
The energy think tank said per its analysis, it expects the prices of fuel on the domestic market to go above April 2020 levels.
“Going by the 23.25 percent surge in price of Brent crude oil, in addition to the 41.80 percent and 22.68 percent significant rise in the prices of gasoline and gasoil respectively on the international market; the Institute for Energy Security (IES) foresees prices of fuel on the domestic market going up, and above April 2020 levels,” it said in a statement.
COVID-19: Africa Union Commission, IRENA Discuss Energy TransitionIt added, “The marginal depreciation of the local currency would also be another determinant for the Bulk Distribution Companies (BDCs) in selling to the OMCs, and that would definitely reflect at the pump.” A litre each of petrol and diesel is currently sold for GHc4.1.
Ghana: Two Tullow Ghana Workers Test Positive For Coronavirus
Two subcontractors working with Tullow Ghana, a subsidiary of London- based Tullow Oil Plc have contracted novel Coronavirus.
A company statement which confirmed the Covid-19 case said the two were tested by the Ghana Health Service (GHS) after exhibiting some symptoms of the contagious disease.
“Tullow Ghana reports that on 21 May, two subcontractors working in the field displayed suspected COVID-19 symptoms and were medically evacuated to a government-approved quarantine facility and tested,” the statement said.
It added: “The Ghana Health Service (GHS) has confirmed initial test results as positive for the COVID-19 virus. The affected individuals are in good health but remain in isolation onshore and will continue to be monitored and tested.
Libya Loses Over $5 Billion Due To Oil Blockade“Following the positive test results, a team from GHS has commenced contact tracing and testing of personnel on the KNK FPSO and MV Lancelot, in line with established protocols”. Tullow assured all stakeholders that the health and safety of its staff, contractors, sub-contractors as well as host communities remain a priority. “Tullow has followed strict quarantine procedures for all personnel working offshore including two weeks of government-approved quarantine. We will be assessing further actions that may be available to reduce the risk of infection,” the statement explained. “Tullow Ghana reiterates its commitment to the WHO and GHS safety protocols and procedures to limit the risk of spreading Covid-19.” The oil company added that “oil and gas production on board the Jubilee FPSO is unaffected. Also, no cases of COVID-19 have been identified on the TEN FPSO.” Holding Statement-Covid-19_case__26_May (1)
Ghana: COVID-19: Maranatha Oil Services Donates GHC100,000 In Support Of Infectious Diseases Treatment Facility
Maranatha Oil Services Limited has made a donation of GHC100, 000 to support the construction of Ghana’s first infectious disease isolation and treatment facility.
The 100-bed facility which is under construction at the Ga East Municipal Hospital is the brain child of the Ghana Covid-19 Private Sector Fund in support of government’s efforts to contain the spread of the novel coronavirus in Ghana.
The West African nation has recorded 7,303 cases of Coronavirus with 2,402 recoveries with 34 deaths.
Board Chairman of Maranatha Oil Services Limited, MacBride Yoofi Hayford, says the donation was in recognition of the fact that the facility is a legacy project which will survive the Covid-19 pandemic and serve future generations.
“The moment we heard about this project, we knew that this is the project that we could [support] because we thought that it was a novel idea,” he said on a visit to the project site at the Ga East Hospital. “We thought that that is a project that we needed to be part of. The moment the idea came from management, the board straight away approved it.”
Mr. Hayford added: “Coming here, having seen what has been done we are really impressed and it tells us that the funds that we are giving will help complete the project and we will urge other private companies to also come on board and contribute their quota to the completion of the project.”
Managing Trustee for the Ghana Covid-19 Private Sector Fund, Senyo Hosi, received the donation from Maranatha Oil and assured that it will be put to good use for the benefit of all Ghanaians.
“On behalf of the Trustees of the Fund and all the hard-working volunteers and workers we have on site, I want to say a big thank you for this vote of confidence in this project and in our steering of affairs,” Mr. Hosi said. “We assure you these funds will be put to good use and will deliver on this mandate and task that we have set up for.”
When completed, the infectious disease treatment facility, located at the Ga East Hospital in Accra, will serve as a treatment centre for critically-ill Covid-19 patients. When the Covid-19 pandemic ends, it will be used to offer treatment for people afflicted by other infectious diseases.
The Ghana Covid-19 Private Sector Fund, which is sponsoring the project, hopes to construct similar facilities in Kumasi, Takoradi and Tamale.
Mr. Hayford added: “Coming here, having seen what has been done we are really impressed and it tells us that the funds that we are giving will help complete the project and we will urge other private companies to also come on board and contribute their quota to the completion of the project.”
Managing Trustee for the Ghana Covid-19 Private Sector Fund, Senyo Hosi, received the donation from Maranatha Oil and assured that it will be put to good use for the benefit of all Ghanaians.
“On behalf of the Trustees of the Fund and all the hard-working volunteers and workers we have on site, I want to say a big thank you for this vote of confidence in this project and in our steering of affairs,” Mr. Hosi said. “We assure you these funds will be put to good use and will deliver on this mandate and task that we have set up for.”
When completed, the infectious disease treatment facility, located at the Ga East Hospital in Accra, will serve as a treatment centre for critically-ill Covid-19 patients. When the Covid-19 pandemic ends, it will be used to offer treatment for people afflicted by other infectious diseases.
The Ghana Covid-19 Private Sector Fund, which is sponsoring the project, hopes to construct similar facilities in Kumasi, Takoradi and Tamale.
Consumers Must Brace For A Rough Ride As Oil Price Sets To Swing In Favour Of Producers (Article)
By: Nana Amoasi VII, IES
Crude oil prices have slumped in 2020, with global benchmark hitting a 21-year low below US$16 per barrel in April. On Monday April 20, West Texas Intermediate (WTI) crude price fell by more than US$50 per barrel to close the day’s trading at negative US$30-plus; first time oil price have turned negative.
The price slumps has taken place against price directions as forecasted by investment houses, oil majors, banks, research analysts and consultants. Key energy think-tanks, oil trading companies and financial services firms such as the US Energy Information Administration (EIA) and Fitch Solutions were convinced that Brent crude price could average US$61+ per barrel in 2020, seeing the year open with a price of roughly US$66.25 per barrel.
The spread of the coronavirus (COVID-19) emanating from China and spreading to other parts of the world significantly dented demand for crude and finished products, due to restrictions imposed. The price war Saudi Arabia and Russia that followed supply cut disagreement worsened the situation, resulting into pronounced build-up of oil stocks around the globe, and plunging prices deeper.
While the drop in prices favoured oil consumers (demand side), the development have overwhelmed the already troubled oil industry (supply side), and even oil producing countries, as they depend on oil revenue to support their national budgets.
Impacts On Supply Side
Low oil price environment impact massively on operating performance of upstream oil and gas companies, which typically reduces their ability to invest in additional capital investment, decreases the incentives for upstream investment spending, delaying or cancelling new projects, and cutting back on dividend payments et cetera (EIA 2015; Kaiser and Pulsipher 2006).
Since the coronavirus pandemic took hold and sent oil prices tumbling, oil companies have been slashing exploration and production budgets, cutting back on dividends and jobs by the hour; as many of their operations are unsustainable and deep in the red at US$30 per barrel for particularly WTI crude.
Oil majors such as ExxonMobil, Chevron, Shell and BP including many others were compelled to re-evaluate their capital expenditure (Capex) and operating expenditures (Opex), with multi-billion dollar projects likely to be in limbo. Apache Corporation, Devon Energy, and Murphy Oil have all announced slashing their 2020 capital investment plan by a massive 30 percent or more, amid the latest collapse in oil prices. Apache indicates that it would cut its budget by more than 37 percent from a US$1.6 billion-US$1.9 billion range, and slashed 90 percent of its dividend payment to investors, from 25 cents per share each quarter down to 2.5 cents per share. Murphy Oil Corporation, though is maintaining its commitment to dividend payment, announced slashing its capital expenditure plan for 2020 by 35 percent (S&P Global, 2020). Bloomberg reports that Occidental Petroleum have had to slashes its quarterly dividend to 11 cents a share from 79 cents, and rein in spending this year by about 32 percent to about US$3.6 billion.
Tens of thousands of oil workers including Texans are being laid off across the US, in places like the Permian Basin shale fields in west Texas as companies shut down their drilling rigs, according to Ryan Sitton, a state oil and gas regulator. Drilling service company Canary LLC has already cut 43 workers, with Recoil Oilfield Services laying off 50 workers after the water-transfer company lost all of its work with shale giant EOG Resources Inc. The biggest blow so far came from Halliburton, the world’s dominant fracking-services provider, which announced furloughing 3,500 workers at its Houston headquarters (Bloomberg, 2020). According to Rystad Energy, the shrinking workforce is the direct result of a torrent of cuts in capital spending from U.S. explorers, some US$12.6 billion so far.
Ghana has so far not been spared of the devastating impact of the low oil prices and supply chain disruptions, on oil producers. In April, Aker Energy and its partners announced postponing the development of the Pecan field in the Deep Water Tano Cape Three Points (DWT/CTP) lock offshore Ghana, as a result of disruptions caused by the coronavirus pandemic. Meanwhile, Tullow Oil is encountering similar challenges at its Jubilee and TEN fields.
Impact On Demand Side
On the demand side, it has been such a relief for fuel consumers, as the excess oil supply resulted in low oil and fuel prices on the international market; translating into low fuel prices at the pumps.
For instance, motorists in South Africa have enjoyed unprecedented fuel price savings, seeing huge decreases in fuel prices over the past few months, based on local and international factors. The international factors includes the fact that the country imports both crude and finished products based on international market prices, and the local determinants includes the Rand/US$ exchange rate exposure. The Rand have depreciated against the US Dollar over the period, however the huge decreases in the price of crude and petroleum products on the international market have translated into the huge savings for consumers.
In the United Kingdom (UK), data from the Department of Business, Energy and Industrial Strategy shows that petrol prices have hit a 4-year low, selling at £1.09 per liter, thanks to the impact of the coronavirus.
Also in Ghana, consumers have enjoyed some relatively low fuel prices since January 2020. Price of Petro (Gasoline) which stood at Gh¢5.36 (US$0.9) per liter in January 2020 is currently going for Gh¢4.01 per liter on average terms; suggesting roughly, a 25 percent drop in local Gasoline price since January.
Pendulum Set To Swing
The prices of physical crude cargoes are rallying hard across the world. On Wednesday May 20, international benchmark Brent surged to US$35.75 per barrel; the highest level since March when Saudi Arabia and Russia’s price war was launched. Brent crude traded on the intercontinental exchange (ICE) Futures Europe was reported on Thursday as nearly doubled over the past month, as it traded above US$36 per barrel, while America’s West Texas Intermediate (WTI) price has also soared.
Impacts On Supply Side
Low oil price environment impact massively on operating performance of upstream oil and gas companies, which typically reduces their ability to invest in additional capital investment, decreases the incentives for upstream investment spending, delaying or cancelling new projects, and cutting back on dividend payments et cetera (EIA 2015; Kaiser and Pulsipher 2006).
Since the coronavirus pandemic took hold and sent oil prices tumbling, oil companies have been slashing exploration and production budgets, cutting back on dividends and jobs by the hour; as many of their operations are unsustainable and deep in the red at US$30 per barrel for particularly WTI crude.
Oil majors such as ExxonMobil, Chevron, Shell and BP including many others were compelled to re-evaluate their capital expenditure (Capex) and operating expenditures (Opex), with multi-billion dollar projects likely to be in limbo. Apache Corporation, Devon Energy, and Murphy Oil have all announced slashing their 2020 capital investment plan by a massive 30 percent or more, amid the latest collapse in oil prices. Apache indicates that it would cut its budget by more than 37 percent from a US$1.6 billion-US$1.9 billion range, and slashed 90 percent of its dividend payment to investors, from 25 cents per share each quarter down to 2.5 cents per share. Murphy Oil Corporation, though is maintaining its commitment to dividend payment, announced slashing its capital expenditure plan for 2020 by 35 percent (S&P Global, 2020). Bloomberg reports that Occidental Petroleum have had to slashes its quarterly dividend to 11 cents a share from 79 cents, and rein in spending this year by about 32 percent to about US$3.6 billion.
Tens of thousands of oil workers including Texans are being laid off across the US, in places like the Permian Basin shale fields in west Texas as companies shut down their drilling rigs, according to Ryan Sitton, a state oil and gas regulator. Drilling service company Canary LLC has already cut 43 workers, with Recoil Oilfield Services laying off 50 workers after the water-transfer company lost all of its work with shale giant EOG Resources Inc. The biggest blow so far came from Halliburton, the world’s dominant fracking-services provider, which announced furloughing 3,500 workers at its Houston headquarters (Bloomberg, 2020). According to Rystad Energy, the shrinking workforce is the direct result of a torrent of cuts in capital spending from U.S. explorers, some US$12.6 billion so far.
Ghana has so far not been spared of the devastating impact of the low oil prices and supply chain disruptions, on oil producers. In April, Aker Energy and its partners announced postponing the development of the Pecan field in the Deep Water Tano Cape Three Points (DWT/CTP) lock offshore Ghana, as a result of disruptions caused by the coronavirus pandemic. Meanwhile, Tullow Oil is encountering similar challenges at its Jubilee and TEN fields.
Impact On Demand Side
On the demand side, it has been such a relief for fuel consumers, as the excess oil supply resulted in low oil and fuel prices on the international market; translating into low fuel prices at the pumps.
For instance, motorists in South Africa have enjoyed unprecedented fuel price savings, seeing huge decreases in fuel prices over the past few months, based on local and international factors. The international factors includes the fact that the country imports both crude and finished products based on international market prices, and the local determinants includes the Rand/US$ exchange rate exposure. The Rand have depreciated against the US Dollar over the period, however the huge decreases in the price of crude and petroleum products on the international market have translated into the huge savings for consumers.
In the United Kingdom (UK), data from the Department of Business, Energy and Industrial Strategy shows that petrol prices have hit a 4-year low, selling at £1.09 per liter, thanks to the impact of the coronavirus.
Also in Ghana, consumers have enjoyed some relatively low fuel prices since January 2020. Price of Petro (Gasoline) which stood at Gh¢5.36 (US$0.9) per liter in January 2020 is currently going for Gh¢4.01 per liter on average terms; suggesting roughly, a 25 percent drop in local Gasoline price since January.
Pendulum Set To Swing
The prices of physical crude cargoes are rallying hard across the world. On Wednesday May 20, international benchmark Brent surged to US$35.75 per barrel; the highest level since March when Saudi Arabia and Russia’s price war was launched. Brent crude traded on the intercontinental exchange (ICE) Futures Europe was reported on Thursday as nearly doubled over the past month, as it traded above US$36 per barrel, while America’s West Texas Intermediate (WTI) price has also soared.
Ghana: Make Ghana National Gas Company A Subsidiary Of GNPC – ACEP Tells Gov’tStandard and Poor’s Global Platts benchmark for fuels also shows average Gasoline and Gasoil prices has moved upward by roughly 55 and 33 percent respectively, since May 11 when the last Pricing-window closed in Ghana. On Monday May 18, Gasoline spot price closed at US$314 per metric tonne (US$37.6 per barrel) compared to the average price of US$203 per metric tonne (US$24.3 per barrel) recorded a week earlier. Gasoil has not been spared from the upward movements, as it closed trading on Monday at US$288 per metric tonne (US$38.6 per barrel). The jump in prices is a reflection of curtailment of production to a great degree as initiated by the Organization of the Petroleum Exporting Countries, Russia and other allies known as OPEC+, and hopes that the relaxation of lockdowns around the globe will boost the demand for oil and fuels like Gasoil, Gasoline, and Jet fuel. Reuters reports that so far in May OPEC+ has cut oil exports by close to 6 million barrels, and at that there are evidence of fuel use recovery. The International Energy Agency (IEA) reports that mobility still remains limited for many citizens, but businesses are starting to reopen gradually and people are returning to work, which will provide a boost to oil demand, albeit a modest one at first. It is unclear though, but if international prices continue the surge at the current rate to top US$35 per barrel, the pain of oil producers may start to ease. Higher oil prices would enable oil producers to cover their costs; increasing expected returns from future production, and increasing their ability to invest in additional capital investment. However, fuel consumers must brace for an upward and a possible turbulent drive in next few months, should the recovery from the damage to demand on the international oil and fuel market be much quicker. Already, there are indications that the surge in the price of crude oil and petroleum product on the international market would reflect at local pumps. In Belgium for instance, the Federal Public Economy Service (FPSE) announced on Monday May 18 an increase of 2.2 Cents to a maximum of €1.275 per liter for Euro 95 (E10) petrol, and 3.1 Cents upward adjustment for Euro 98 (E5) petrol to sell at a maximum price of €1.325 per liter. This basically means that it would cost more for motorists to fill their cars in the coming weeks. Also in South Africa, the Automobile Association expects a fairly large petrol price increase in the coming June. It expects the price of petrol to go up by 50 Cents per liter on Wednesday June 3. In Ghana, the benefits consumers have so far enjoyed at the local pumps may also begin to diminish. The national average price of Gh¢4.01 per litre for Gasoline (Petrol) may be the lowest to be recorded in 2020. Consumers must be prepared to buy same at roughly Gh¢5.0 per liter in the coming weeks, since oil marketing companies (OMCs) may adjust their pump prices to reflect changes on the international market. It is insightful for consumers to note that the low fuel prices currently displaced at the pumps is basically the result of the coronavirus depressing fuel demands, and has absolutely nothing to do with government interventions. Written by 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 in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media and CNBC Africa
Libya Loses Over $5 Billion Due To Oil Blockade
Libya’s crude oil exports have shrunk by 92 percent since the start of the oil blockade early this year.
The unfortunate situation has resulted in the North African country losing some $5 billion, a statement by the National Oil Company of Libya said.
A group of paramilitary formations affiliated with General Khalifa Haftar’s Libyan National Army occupied Libya’s oil export terminals in January along with pipelines and fields.
The blockade came amid continued fighting between the LNA, which is loyal to the eastern Libyan government and the forces loyal to the Government of National Accord, which is recognized by the United Nations.
Soon after the blockade, NOC declared force majeure on oil exports, with the company’s chairman Mustafa Sanalla warning that the blockade could end up costing Libya $55 million daily.
At the time, the losses in production were estimated at between 500,000 bpd and 800,000 bpd. As of late January, Libya’s oil production was around 300,000 bpd but Sanalla said it could go as low as 72,000 bpd. As of early April, production was down below 100,000 bpd. That’s down from over 1.2 million bpd before the blockade.
Fuel and other oil product output has meanwhile fallen to zero because refineries had to be shut down because of the blockade, too.
“The first quarter of 2020 was a huge decrease in revenues for Libya, as a direct result of the illegal blockade of numerous oil and gas facilities. This is only part of the picture, as the corrosion in pipes caused by still oil and salt water is resulting in physical damage that will cost millions to fix when the crisis is over,” Sanalla said.
“Libyan people across the whole country are the ones who will feel the cost of this illegal blockade. The low revenue will simply delay further any government investment in public services, the national economy, and the foundations of future prosperity for Libya,” he added.