Nigeria: Proposed Free Electricity Supply Is Not Feasible-Power Minister
The Federal Government’s decision to allow Nigerians to enjoy two-month of free electricity supply is unlikely to materialise due to the structure of the electricity supply industry in the country, the Minister of Power Saleh Mamman has said.
Sunday Oduntan the executive director in charge of research and advocacy for the Association of Nigerian Electricity Distributors, made the announcement in early April, stating that the move was meant to reduce the impacts of COVID-19 on Nigerians.
However, THISDAY reported that Minister of Power Saleh Mamman, in a BBC Hausa interview doubted the possibility of executing the proposal, which is estimated to cost the federal government between N100 billion ($257 million) and N120 billion ($308 million) for the two months.
The minister highlighted that the power supply chain is not owned by the federal government only.
He added that if the National Assembly insists on pressing ahead with the plan, its members should come up with fresh ideas on its implementation.
Mamman explained that if the plan is implemented, the federal government will end up paying for the electricity consumed by the rich to the detriment of the extremely poor, adding that over 80 million Nigerians do not have access to on-grid electricity.
“This free electricity bill will be paid with taxpayers’ money and you want to serve the interest of the privileged Nigerians, then the less privileged and the vulnerable what are you going to do for them?
“Every month what we pay as electricity bill, I mean what the distribution companies are paying with the little support from government is a little above N50 billion ($128 million) monthly,” he said.
When asked to comment on the matter, Transmission Company of Nigeria’s General Manager Ndidi Mba, told THISDAY that: “The minister speaks for us. We are a government entity.
“The minister’s office is the policy making arm; so we can’t speak against the minister. The minister and the federal government take the decision and whenever they take that decision, it then cascades, and then it is discussed.”
Source:www.energynewsafrica.com
Ghana: Consumers Start Enjoying Free Electricity Today
Consumers of electricity in the Republic of Ghana have started enjoying the free electricity promised by the President H.E. Nana Addo Dankwa Akufo-Addo.
The GHS1.04 billion electricity relief, which covers the months of April, May and June, is part of measures being introduced by the Akufo-Addo- administration to cushion Ghanaians due to the impact of the Coronavirus pandemic.
The government is bearing the full cost of electricity for lifeline consumers while commercial consumers will enjoy 50 percent payment for the three months.
Some customers who shared their prepaid receipt on social media praised the President for keeping to his promise.
In a video posted on Facebook by a lady known as Lucy Oforiwaah Effah, she is heard loudly saying: “This is a testimony from grandma…so I bought a prepaid GHS30 because I was moving to a different place I needed to top up so I wouldn’t go off today or tomorrow …I saw Covid-19 government relief of GHS120 so my balance is GHS 143.48. God bless you Nana Akufo-Addo… There is no deceit. This is the evidence. It is clear.”
Meanwhile, The Electricity Company of Ghana (ECG) is reminding its prepaid customers to either swipe or insert their cards into their meters before visiting vending points or ECG offices to purchase credit.
The ECG, in a statement, said the directive is to enable it “gather accurate consumption data to ensure a smooth implementation of the Government of Ghana (GoG) COVID-19 Electricity Relief.”
It further advised customers to contact its district offices or call centres to resolve any challenges with regards to the GoG COVID-19 electricity relief.
A copy of prepaid receipt a customer shared on social media
Source: www.energynewsafrica.com
Source: www.energynewsafrica.com Ghana: Fuel Prices To Lose Stability In May-IES
The Institute for Energy Security (IES), an energy think tank in the Republic of Ghana, is predicting that fuel prices on the local market will lose stability in the first pricing window.
The prices of gasoil and gasoline at the pump currently is around GHS4.20 per litre.
However, IES believes that the sharp fall in crude oil prices on the international market and the depreciation of the cedi will cause fuel prices to lose stability.
“Going by the 13.05% reduction in price of Crude oil, combined with the 20.96% and 18.45% considerable fall in the prices of Gasoil and Gasoline respectively on the international market; the Institute for Energy Security (IES) foresees prices of fuel on the local market losing stability in the first Pricing-window of May, 2020.
“The expected fall in prices of fuels at the pump, takes into account the local currency’s marginal depreciation against the U.S. Dollar,” IES said in a statement copied to energynewsafrica.com.
LOCAL FUEL PRICES TO LOSE STABILITY, TO TILT DOWN
REVIEW OF APRIL 2020 SECOND PRICING-WINDOW
Local Fuel Market Performance
Prices at the pump maintained some level of stability as only few but major Oil Marketing Companies (OMCs) including Goil, Total Ghana, Puma and Petrosol shaved-off few Pesewas during the Pricing-window under review as projected by the Institute for Energy Security (IES). Goil, Petrosol, Puma and Total Ghana trimmed their prices to sell at an average price of Gh¢4.18 for Gasoil and Gasoline. However, the period saw most OMCs maintaining their prices at the pump to produce a national average price of Gh¢4.12 for Gasoline and Gh¢4.14 Gasoil.
Within the period under review, Santol, Benab Oil, Nick Petroleum, Frimps, Champion and Cash Oil, joined Zen Petroleum as OMCs that sold the least-priced Gasoline and Gasoil on the local market relative to others in the industry as found by IES Market-scan
World Oil Market
Brent crude price remain largely around the $25 per barrel mark for the Pricing-window under assessment. Prices plummeted below $20 on April 21st, as the market reacted negatively towards an evaporating storage capacity as a result of cratering demand and unmanageable supply glut. Following this, Brent crude declined by 13.05% from $29.88 per barrel recorded at the end of the first Pricing-window of April to close at $25.98 per barrel on average terms at end of the second window.
S&P’s Platts benchmark for fuels shows average Gasoline price tumbled by 18.45% to close at $140.25 per metric tonne, from a previous average of $171.97 per metric tonne; while Gasoil declined by 20.96% to close trading at $185.75 per metric tonne, from a previous average of $235.00 per metric tonne.
Local Forex
Data collated by IES Economic Desk from the Foreign Exchange market shows the Cedi depreciated by 1.07% against the U.S. Dollar, trading at an average price of Gh¢5.69 to the U.S. Dollar over the period; a clear departure from the Gh¢5.63 recorded in the first Pricing-window of April, 2020.
PROJECTIONS FOR MAY 2020 FIRST PRICING-WINDOW
Going by the 13.05% reduction in price of Crude oil, combined with the 20.96% and 18.45% considerable fall in the prices of Gasoil and Gasoline respectively on the international market; the Institute for Energy Security (IES) foresees prices of fuel on the local market losing stability in the first Pricing-window of May, 2020. The expected fall in prices of fuels at the pump, takes into account the local currency’s marginal depreciation against the U.S. Dollar.
Signed:
Raymond Nuworkpor
Research & Policy Analyst
(0543887669)
Ghana: GHS 100B Stimulus Package Should Benefit OMCs Too-COPEC
The Chamber of Petroleum Consumers Ghana (COPEC) has advised the government of Ghana not to leave Oil Marketing Companies (OMCs) out of the stimulus packages to support the SMEs.
The President of the West African nation, H.E. Nana Akufo-Addo, recently announced GHc 100 billion stimulus package to cushion households and businesses because of the impact of the Coronavirus.
The amount is expected to be disbursed from May 1.
A statement issued by COPEC noted that the adverse effects of the Coronavirus on volumes and revenues have forced some OMCs to cut down on staff; others have refused to lay off.
COPEC called on the state to ensure the various oil and gas companies are not left out in the announced SME support as a lot are reeling heavily under the harsh effects of three weeks’ lockdown and subsequent low volumes and revenues which can increase job losses and redundancy within the country.
“We further call on the regulator of the downstream (NPA) to also work out a mechanism to ease down on the heavy licence renewal fees charged to these companies to enable them adjust to the vagaries of the Coronavirus outbreak on their businesses with the view to ensuring they keep fuel prices lower for Ghanaians without the tendency to increase or collect their full margins which can only lead to increases in pump prices.
“Finally, we will like to reiterate an earlier call on the Ghana Revenue Authority to give a moratorium for the next six months to oil companies instead of the current one spanning up to end of July, to file their returns later than the current 45 days since sales volumes across the board has reduced significantly, and any attempts to enforce the earlier 21 or 45-day collections could only mean going to the banks to borrow, which, eventually, places undue pressures on them to engage in all manner of games to survive.”
Source: www.energynewsafrica.com
Ghana: Francis Boateng Takes Over As New TOR MD
President of the Republic of Ghana, H.E Nana Akufo-Addo has appointed Mr. Francis Boateng as the new Managing Director of Tema Oil Refinery (TOR).
Mr. Boateng replaces the immediate past MD for TOR, Mr Asante K. Berko, who resigned from his position earlier this month.
According to sources, Mr Francis Boateng received his appointment letter today.
Francis Boateng will be expected to lead the company and help turn around the fortunes of the West African nation’s only refinery.
Prior to his appointment, Mr Francis Boateng was the General Manager for Commercial Operations at the Ghana National Gas Company.
Mr Boateng was previously engaged as a consultant, working in the capacity of Contracts and Fuel Manager during the project implementation phase of a 350MW Combined Cycle Power Plant for Cenpower Generation Company Limited (Cenpower), an Independent Power Producer (IPP) company in Ghana.
Cenpower’s project is noted as being the first private sector Greenfield project financed IPP in Ghana and the first thermal IPP in Ghana, funded by 6 commercial banks and 6 Development Finance Institutions with a 15 year debt tenor.
Mr Boating’s role was primarily a commercial/technical one, requiring strong interfaces with the Legal, Finance and Technical disciplines as well as Project Sponsors and Lenders.
His responsibilities required leadership of an effective Contracts and Fuel team and encompassed the negotiation and management of Fuel (LCO and Diesel) Supply Agreement, Gas Supply Agreement, Power Purchase Agreement and EPC Contract among others.
Prior to Joining Cenpower and while working on Ghana’s Gas Commercialisation Project at the Ghana National Petroleum Corporation (GNPC), Mr Boateng was selected in 2011 to be part of an eight-member Project Implementation Unit (PIU), tasked to set up the Ghana National Gas Company and develop its groundbreaking Western Corridor Gas Infrastructure Development Project. Mr Boateng served in the capacity of Project Controls Manager for two years as a key member of the PIU team during both the project development and implementation phases.
In recognition of his commercial/technical knowledge and acumen, Mr Boateng was subsequently offered and accepted the role of Commercial Manager responsible for the gas purchase, sales, marketing and distribution on the project, where he managed the initial effort to negotiate critical agreements for the procurement of up to 150 MMscf/d of wet natural gas from the Jubilee field, for processing and subsequent sale of treated products including lean gas for power generation and industrial feedstock and Natural Gas Liquids (NGLs) such as Liquefied Petroleum Gas (LPG) to local bulk distributors for onward sale and Condensate.
Mr Boateng has over 20 years project-related work experience including extensive international experience in the petroleum and power industries working on projects located in countries such as Saudi Arabia, Abu Dhabi, Nigeria, United Kingdom and Ghana. He has worked for and on behalf of world renowned organisations such as Kellogg Brown and Root, Fluor Ltd, Shell and Chevron. Projects executed have included those with a total installation costs in excess of twelve (12) billion United States dollars.
Mr Boateng is an old student of St. Augustine’s College in Cape Coast. He holds a BEng (Hons) Degree for Manufacturing Systems Engineering from Kingston University in the United Kingdom and an MBA from Henley Business School in the United Kingdom.
Source: www.energynewsafrica.com
Ghana: COVID-19: Vivo Energy Launches Retailer Sustainability Programme
Vivo Energy Ghana, the Shell licensee, in partnership with its retailers has launched a novel sustainable initiative dubbed the ‘Retailer Sustainability Programme’ to implement human-centred projects in communities where it operates; with a focus on COVID-19 prevention.
The Retailer Sustainability Programme forms part of Vivo Energy Ghana’s comprehensive programme on COVID-19 prevention being rolled-out to complement the government’s efforts in combating the virus from Ghana and ensuring the decentralization of support to local communities.
The Managing Director of Vivo Energy Ghana, Mr. Ben Hassan Ouattara, commenting on the programme said as a corporate organisation, it has been following the development of the pandemic in the country and the socio-economic impact of the life-threatening coronavirus on families, communities, businesses and the nation in general.
“It is for this reason that we partnered with our Shell retailers to reach out to communities to help fight the virus. The programme has led to the implementation of several COVID-19 prevention initiatives in various regions across the country and I want to express my profound gratitude to our distinguished retailers for responding positively to our call”, he said.
Since the launch of the programme, various government institutions have benefitted from the programme. They include the National Commission for Civic Education and Effiankwanta Regional Hospital in the Western Regional, Tamale Teaching Hospital in the Upper East Region, Kenyasi Health Centre and Ahinsan Camp Prison in the Ashanti Region.
Some interventions include the donation of PPEs such as gloves, nose masks, goggles, coveralls, hand washing facilities, hand sanitizers, detergents, thermometers and the construction of water tanks for underserved communities to encourage regular hand washing.
The Coordinator of the Northern Sector Shell retailers, Mr. Frederick Fredua Anto, expressed his appreciation to Vivo Energy Ghana for the partnership with its retailers to ensure that COVID-19 prevention interventions are not only centralised in the cities but trickle down to various communities in the regions.
“Beyond selling quality Shell fuels and lubricants, we have the nation and our customers at heart. We are in difficult times and as business partners it gives us a great sense of fulfilment to have been able to offer a helping hand to the government in the prevention of this life-threatening virus.
Since the outbreak of the coronavirus in Ghana, Vivo Energy Ghana has embarked on several projects on COVID-19 prevention. These include the donation of PPE to the National COVID Case Management Team, funding of an e-learning application for students at home and donation of hand sanitizers and liquid soaps to some major bus terminals and retail stations for distribution to drivers and customers respectively.
In line with the company’s Health, Safety, Security and Environment (HSSE) intervention processes, it has also equipped its Shell service stations with hand sanitizers and other cleaning solutions as a precautionary measure. The company has also introduced other electronic payment options like mobile money at some of its service stations to reduce the handling of cash.
“It is for this reason that we partnered with our Shell retailers to reach out to communities to help fight the virus. The programme has led to the implementation of several COVID-19 prevention initiatives in various regions across the country and I want to express my profound gratitude to our distinguished retailers for responding positively to our call”, he said.
Since the launch of the programme, various government institutions have benefitted from the programme. They include the National Commission for Civic Education and Effiankwanta Regional Hospital in the Western Regional, Tamale Teaching Hospital in the Upper East Region, Kenyasi Health Centre and Ahinsan Camp Prison in the Ashanti Region.
Some interventions include the donation of PPEs such as gloves, nose masks, goggles, coveralls, hand washing facilities, hand sanitizers, detergents, thermometers and the construction of water tanks for underserved communities to encourage regular hand washing.
The Coordinator of the Northern Sector Shell retailers, Mr. Frederick Fredua Anto, expressed his appreciation to Vivo Energy Ghana for the partnership with its retailers to ensure that COVID-19 prevention interventions are not only centralised in the cities but trickle down to various communities in the regions.
“Beyond selling quality Shell fuels and lubricants, we have the nation and our customers at heart. We are in difficult times and as business partners it gives us a great sense of fulfilment to have been able to offer a helping hand to the government in the prevention of this life-threatening virus.
Since the outbreak of the coronavirus in Ghana, Vivo Energy Ghana has embarked on several projects on COVID-19 prevention. These include the donation of PPE to the National COVID Case Management Team, funding of an e-learning application for students at home and donation of hand sanitizers and liquid soaps to some major bus terminals and retail stations for distribution to drivers and customers respectively.
In line with the company’s Health, Safety, Security and Environment (HSSE) intervention processes, it has also equipped its Shell service stations with hand sanitizers and other cleaning solutions as a precautionary measure. The company has also introduced other electronic payment options like mobile money at some of its service stations to reduce the handling of cash.
East Africa’s Oil Industry: A New Story In The Making (Article)
The recent acquisition by Total of Tullow Oil’s entire interests in the Lake Albert Development Project in Uganda, including the East African Crude Oil Pipeline, marks the beginning of a new chapter for East Africa’s energy industry. To dissect the deal and discuss its wider implications for the region, the African Energy Chamber organised a webinar with leading regional industry experts, held under the Chatham House Rule.
Featuring key officials and representatives from Stanbic Bank, Standard Bank, Shell, Baker Hughes and the Kenya National Oil Company, the webinar was hosted by Eng. Elizabeth Rogo, Founder & CEO of TSAVO Oilfield Services and President of East Africa at the African Energy Chamber.
Good or bad deal?
Under the agreement announced last week, the overall consideration paid by Total to Tullow will be $575m, with an initial cash payment of $500m at closing and $75m when the partners take the Final Investment Decision (FID) to launch the project. Under the terms of the deal, Total will acquire all of Tullow’s existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP) System. The Lake Albert project, also called the Tilenga Project, has a production capacity of up to 230,000 bopd, which would propel Uganda in the top 5 of sub-Saharan Africa’s oil producers. In addition, the proposed 60,000 bopd refinery and some of the overarching issues were mentioned.
The deal is a win-win for all stakeholders involved. First, for Total, who ends up acquiring Tullow Oil’s entire interests in the Lake Albert development project for less than $2/barrel. Then, for Tullow Oil, whose debt is rising and who is looking at raising $1bn by selling some of its key assets. The company’s shares rose on the announcement of the deal. Finally, it is a win for Uganda’s oil industry and local jobs. After years of deliberations and debate, the closing of the sale allows the country and oil companies to move the conversation towards FID and practical project’s development. It also sends strong signals to the rest of the region, and Kenya in particular, to do everything possible to unlock their own oil & gas potential.
While visibility on the FID’s timeline remains unclear, the project is very competitive even in a depressed low oil prices environment. The cost per barrel of the integrated Lake Albert Development Project is indeed estimated at around $50. This is explained in part because the country’s hydrocarbons are within shallow deposits which are less drilling intensive and do not need as much casing, tubing and completion work. While Total is following a global trend of drastically cutting expenses in light of the COVID-19 pandemic and the collapse of oil demand and oil prices, the project’s economics make it one of the most likely to get FID in the near future.
A key unanswered question for now is whether CNOOC will exercise its pre-emption rights under the joint operating agreements it has with Tullow Oil and Total as a joint venture partner, like it did in the failed 2019 sale. A scenario under which the Chinese major does exercise once again its pre-emption rights is very likely, and will in fine depend on China’s overall strategy for the wider East Africa region.
Pipeline matters
The moving forward of the Lake Albert Development Project, and its export pipeline, is a major step forward de-risking other potential oil & gas projects in East Africa and making them attractive for investments and financing. Given the current industry dynamics and potential liquidity constraints, participants agreed that a scenario under which two regional pipelines would be laid was becoming more challenging. The size of Uganda and Kenya’s discovered reserves along with the capital and financial muscles of their operators will be factors weighing in which pipeline gets executed.
The EACOP was, however, a matter which participants thought could become contentious for the execution of the overall Lake Albert project, and the development of the region’s oil sector. Key questions remain to be answered, chief amongst them being Tanzania’s business environment and the country’s ability to provide policy certainty on the execution of such a major infrastructure venture. Whether Tanzania decides to stick to an enabling business environment and demonstrate its willingness to comprise with international investors after years of natural resources nationalism remains another unanswered question.
The way the execution of the pipeline evolves will determine a lot of East Africa’s oil industry future. While the original northern route through Kenya was deemed less favourable, a scenario under which Total would consider buying out Tullow Oil’s assets in Kenya, where several significant oil discoveries were made, could potentially re-roll the dice in the region.
Regional content, now
Finally, and more importantly, the expected first oil from Uganda in the coming years should urgently lead to local content preparations not on a national, but a regional level.
Between the two upstream projects of Tilenga (Total) and Kingfisher (CNOOC), the pipeline project and the Uganda oil refinery project, the scale of upcoming projects in Uganda and the neighbouring countries represents billions of dollars of opportunities for local companies. However, given the under-developed nature of the local hydrocarbons services industry in East Africa, only regional partnerships and joint-ventures can result in maximising such opportunities. As the conversation in Uganda moves towards employability within local communities and ensuring that Uganda’s oil benefits the development of a strong local sector, the region as a whole needs to come together to support regional ventures. Unless companies across East Africa come together and leverage on their respective expertise and experience to work together, there is a fear that upcoming oil and gas projects will ultimately go to foreign contractors and deprive local businesses from tremendous growth opportunities. In this regard, the development of an African regional content is one of the top 10 measures that form Africa’s Common-sense Energy Agenda, released by the African Energy Chamber earlier this week.
In this context, the need to invest in education, training and skills transfer is greater than ever. The success of the region’s oil sector will depend on all stakeholders coming together to bring the East African energy story to investors
Source: Africa Energy Chamber
Source: www.energynewsafrica.com
Ghana: COPEC Warns Of Fuel Shortages If GCNET/UNIPASS Issue Is Not Resolved Immediately
The Chamber of Petroleum Consumers-Ghana, a petroleum advocacy group in the Republic of Ghana, is urging the government to ensure speedy resolution of the ongoing challenges in respect of the migration of GCNet platform to UNIPASS to avoid fuel shortages in the country.
According to COPEC, Oil Marketing Companies (OMCs) and the Liquefied Petroleum Gas Marketing Companies (LPGMCs) that had orders for supply of fuel to various outlets could not load a single litre of fuel all day on Wednesday due to the discrepancies in the migration onto the new customs system (UNIPASS) at the depots.
“This situation, if left unresolved within the next 24 hours, could and will certainly lead to serious fuel shortages across the country,” a statement signed by Executive Secretary of COPEC, Duncan Amoah said.
The UNIPASS/ICUMS platform is a new port clearing system that processes documents and payments through one window: a departure from the previous system where valuation and classification and risk management and payment were handled by different entities.
Below is COPEC’s full statement
RESOLVE THE GCNET/UNIPASS ISSUE IMMEDIATELY TO CURTAIL ANY FUEL SHORTAGES ACROSS THE COUNTRY.
The ongoing challenges in respect of revenue settlement following from a decision to migrate onto a new platform ( UNIPASS ) from the existing GCNet platform is leading to a lot of challenges with petroleum liftings across depots in the country.
Oil Marketing Companies ( OMCs ) and the Liquified Petroleum Gas Marketing Companies ( LPGMCs ) that had orders for supply of fuel to various outlets could not load a single litre of fuel all day on Wednesday the 29th of April due to discrepancies in the migration onto the new customs system ( UNIPASS ) at the depots.
A communique issued earlier yesterday from the NPA indicating a swift response to resolve the issue to enable the liftings seemed not to have yielded as most Oil Marketing Companies and the LPGMCs had to make alternative arrangements to accommodate their drivers who had been dispatched to load products from the depots across the country.
This situation if left unresolved within the next 24 hours could and will certainly lead to serious fuel shortages across the country.
One would expect that the new system would have been rolled out gradually side by side with the old system in order to help in facilitating a gradual phasing out of the existing system ( GCNet ) but the seeming haste in abandoning the old system whiles the new system ( UNIPASS) is not fully ready and integrated is clearly leading to discrepancies being witnessed and we wish for a speedy resolution to forestall any possible shortages across the country.
Our attention has further been drawn to the cutting of staff numbers by some of our Oil Companies due to the adverse effects of Coronavirus on volumes and revenues through a lot of others have refused to lay off.
In light of the above, we call on the State to ensure the various Oil and Gas Companies are not left out in the announced SME support as a lot are reeling heavily under the harsh effects of our 3 weeks lockdown and subsequent low volumes and revenues which can increase job losses and redundancy within the country.
We further call on the Regulator of the downstream ( NPA ) to also work out a mechanism to ease down on the heavy license renewal fees charged to these companies to enable them to adjust to the vagaries of the Coronavirus outbreak on their businesses with the view to ensuring they keep fuel prices lower for Ghanaians without the tendency to increase or collect their full margins which can only lead to increases in pump prices.
Finally, we will like to reiterate an earlier call on the Ghana Revenue Authority to give a moratorium for the next 6 months to Oil Companies instead of the current one spanning up to end of July to file their returns later than the current 45 days since sales volumes across the board has reduced significantly and any attempts to enforce the earlier 21 or 45-day collections could only mean going to the banks to borrow which eventually places undue pressures on them to engage in all manner of games to survive.
Signed
Duncan Amoah
Executive Secretary
COVID-19 Pandemic: Norway Cuts Oil Production By 250,000 BPD
The Norwegian Government has decided to make oil production cuts in an attempt to stabilise the oil market faster.
The Government said on Thursday that the coronavirus pandemic and the efforts to contain it in large parts of the world had a substantial impact on economic activity globally and oil demand as well.
The Norwegian authorities believe that oil production cuts will contribute to a faster stabilisation of the oil market compared to letting the rebalancing take place only through the market mechanism.
It is noteworthy that the International Energy Agency’s (IEA) latest estimate from mid-April suggests a fall in demand for oil of around 23 per cent or 23 mbpd in the second quarter.
This large and sudden fall in oil consumption represents an unprecedented event in the oil market. This, together with efforts to contain the pandemic has resulted in a large surplus of oil in the market and large quantities of oil in stock, with prices dropping about 70 per cent since the beginning of 2020.
In turn, many companies took measures to mitigate the effects of the oil price drop by slashing their capital expenditures for the year.
Norwegian Minister of Petroleum and Energy, Tina Bru, said: “Both producers and consumers benefit from a stable market. We have previously stated that we will consider a cut in Norwegian production if several big producing countries implement significant cuts. The decision by the Norwegian Government to reduce Norwegian oil production has been made on an independent basis and with Norwegian interests at heart”.
“We will cut Norwegian production by 250,000 barrels per day in June and by 134,000 barrels per day in the second half of 2020. In addition, the start-up of production of several fields will be delayed until 2021. Consequently, the total Norwegian production in December 2020 will be 300,000 barrels less per day than originally planned by the companies. The regulation will cease by the end of the year”, Bru added.
The basis for the regulation is a reference production of 1,859,000 barrels of oil per day. Thus, a cut of 250,000 barrels per day in June 2020 gives an upper limit for oil production on the Norwegian Continental Shelf of 1,609,000 barrels per day. A cut of 134,000 barrels per day in the second half of 2020 gives an upper limit for oil production on the Norwegian Continental Shelf in the same period of 1,725,000 barrels per day.
The cut will be distributed between individual fields and implemented by granting revised production permits to the relevant fields.
Companies that hold licenses in fields covered by the regulation will be affected through their ownership shares in the various fields. The effect for individual companies will thus depend on their ownership share in the various fields. The oil companies will be consulted before revised production permits are granted.
In turn, many companies took measures to mitigate the effects of the oil price drop by slashing their capital expenditures for the year.
Norwegian Minister of Petroleum and Energy, Tina Bru, said: “Both producers and consumers benefit from a stable market. We have previously stated that we will consider a cut in Norwegian production if several big producing countries implement significant cuts. The decision by the Norwegian Government to reduce Norwegian oil production has been made on an independent basis and with Norwegian interests at heart”.
“We will cut Norwegian production by 250,000 barrels per day in June and by 134,000 barrels per day in the second half of 2020. In addition, the start-up of production of several fields will be delayed until 2021. Consequently, the total Norwegian production in December 2020 will be 300,000 barrels less per day than originally planned by the companies. The regulation will cease by the end of the year”, Bru added.
The basis for the regulation is a reference production of 1,859,000 barrels of oil per day. Thus, a cut of 250,000 barrels per day in June 2020 gives an upper limit for oil production on the Norwegian Continental Shelf of 1,609,000 barrels per day. A cut of 134,000 barrels per day in the second half of 2020 gives an upper limit for oil production on the Norwegian Continental Shelf in the same period of 1,725,000 barrels per day.
The cut will be distributed between individual fields and implemented by granting revised production permits to the relevant fields.
Companies that hold licenses in fields covered by the regulation will be affected through their ownership shares in the various fields. The effect for individual companies will thus depend on their ownership share in the various fields. The oil companies will be consulted before revised production permits are granted. Chinese Oil Giant CNOOC Cuts US Shale, Canada Oil Sands Output
China National Offshore Oil Corporation (CNOOC), a major oil operator with assets around the world, is reducing its 2020 production and spending guidance in light of the unprecedented market downturn, with U.S. shale and Canada’s oil sands the main targets of its cuts.
CNOOC announced on Wednesday that it would lower its planned capex and production guidance for 2020, as “proactive measures to face the challenges” of the turbulent oil market.
“The global oil and gas market was facing an unprecedented situation in the first quarter of 2020 as impacted by the COVID-19 pandemic and sharp drop of international oil prices. In response to an increasingly complex external environment, CNOOC Limited took proactive measures to face the challenges and strived to mitigate the impact. For the rest of the year, we will continue to implement more stringent cost controls, and further strengthen our cash flow management,” CEO Xu Keqiang said in a statement.
The Chinese company will mostly reduce spending in the U.S. shale patch and oil sands assets in Canada, where production is set to be kept at minimum levels, CNOOC’s chief financial officer Xie Weizhi said on a teleconference, as quoted by South China Morning Post.
Staff layoffs cannot be avoided, the manager said.
CNOOC is the latest giant oil firm opting to reduce spending in U.S. shale. The oil patch has already seen spending and production cuts from almost all companies, including supermajors Exxon and Chevron, as the industry has been rushing to cut budgets and exposure to the Permian.
According to CNOOC’s Xie, oil will trade in the $30-$40 per barrel range for most of this year.
In key operational statistics for Q1 2020, CNOOC said that its average realized oil price slumped by 19.3 percent on the year to US$49.03 per barrel, in line with the trend of international oil prices. Overall oil and gas sales fell by 5.5 percent annually, as the lower realized oil prices couldn’t offset higher production volumes.
CNOOC cut its annual net production target for 2020 from 520-530 million barrels of oil equivalent (boe) to 505-515 million boe. Total capital expenditure (capex) for 2020 was reduced from US$12 billion-US$13.4 billion (85-95 billion Chinese yuan) to US$10.6 billion-US$12 billion (75-85 billion yuan).
Shell Cuts Dividend For First Time Since World War II
Royal Dutch Shell has cut its dividend for the first time since World War Two following the collapse in global oil demand due to the coronavirus pandemic.
According to Reuters, the energy giant also suspended the next tranche of its share buyback programme.
The move came as it announced a 46% fall in first-quarter net income to $2.9bn (£2.3bn).
Chief Executive Officer for Shell, Ben van Beurden warned of “continued deterioration in the macroeconomic outlook”.
He said Shell was taking “further prudent steps to bolster our resilience” and “underpin the strength of our balance sheet”.
Shell is cutting its quarterly dividend by two-thirds, from 47 cents to 16 cents, starting in the first quarter of this year.
The company said it had also cut activity at its refining business by up to 40% in response to the sharp fall in demand for oil.
David Barclay, senior investment manager at Brewin Dolphin, said: “Royal Dutch Shell’s decision to cut its dividend for the first time since World War Two reflects the unprecedented economic impact of Covid-19.
“There was a great deal of speculation about what the energy company would do leading up to these results and the market was braced for bad news.
“On the face of it, the dividend cut and cancellation of share buybacks may be seen by some shareholders as a negative move in the short term.
However, looking further ahead it could well prove to be the right step, as Shell looks to strengthen its financial position and cut costs during a very difficult time.”
Ghana: Unemployed Man Before Court For Stealing 11 ECG Prepaid Meters
An unemployed man has been charged by a Circuit Court in Accra, capital of Ghana, West Africa, for allegedly stealing 11 prepaid meters valued at $2,600 belonging to power distribution company, ECG, at Nungua, a suburb of Accra.
The court presided over by Her Honour, Mrs. Afia Owusua Appiah charged the accused person with stealing contrary to section 124 of Act 29/60.
According to report filed by Kasapafmonline.com, the accused person, Edward Abeiku, who is a resident of Nungua, however pleaded not guilty to the charge of stealing pressed against him by the court.
The brief facts of the case as presented to the court by prosecutor Inspector Samuel Ahiabor were that, the complainant in the case is Mr Samuel Korley, the Nungua District Technical officer of ECG while the accused person, is unemployed and a resident of Nungua.
Inspector Ahiabor told the court that, the Kpeshie Divisional Police Command has been receiving rampant complaints of theft of ECG prepaid meters within Nungua and its environs.
The command, he said “has been informing the District Office of ECG about the occurrence and both offices have been on the lookout for the perpetrators of the crime.
He told the court that, “on April 22, 2020, the command received information from a witness Michael Afotey that the accused person and two others (yet to be arrested) have stolen some electricity meters and kept them in a room.
According to him, the “Police proceeded to the said location where the accused person was arrested with one of the stolen ECG prepaid meters in his hands.
“A search conducted in the room of his accomplice, Robert Annang Adu close to the scene of the arrest revealed four pieces of prepaid meters belonging to ECG.
“When the accused person’s room was subjected to a search, another three faced ECG prepaid meter was retrieved.”
The prosecutor told the court that, “the accused mentioned Robert Annang Adu and Abeiku as his accomplices.”
“Police investigation revealed that from January to early April the accused person and his accomplices have stolen several ECG prepaid meters officially assigned and installed for some applicants with Nungua township and re-assigned them to unsuspecting members of the community at the cost of GHc600 per meter.
According to him, the complainant, Mr Samuel Korley, identified the prepaid as properties of ECG which were among 60 pieces of meters reported stolen.
“During investigation, the accused further led police and officials of ECG through Nungua township and pointed out additional five pieces of ECG prepaid meters which were among numerous meters the group have stolen from victims and re-installed them for the unsuspecting customers.
“The meters were disconnected and removed. In all 11 pieces of stolen ECG prepaid meters were retrieved during investigation,” the prosecutor informed the court.
The accused person, he said, “was charged with the offence and put before the court while efforts are being made to arrest the two accomplices.
However, the court granted him bail in the sum of GHc60, 000.
In addition to the bail conditions, he is to provide three persons to stand as sureties, one of them the court said must be a public servant earning not less than GHc2, 500 per month.
The case has been adjourned to June 15, 2020.
Source: www.energynewsafrica.com
Maersk Drilling To Sack 300 Workers In North Sea
Denmark based-rig operator, Maersk Drilling says it is taking steps to reduce its offshore crew pool as it stacks North Sea rigs in light of the COVID-19 pandemic and crash in oil prices.
The company said that due the commercial outlook for offshore drilling it expects around 250 to 300 redundancies in the North Sea crew pool in Denmark, Norway and the UK.
It is currently in the process of initiating consultations with trade unions and employee representatives.
“Though it’s standard practice in our industry to adjust our workforce to activity levels, it never feels right to say goodbye to good colleagues, especially when so many have walked the extra mile to keep operations running in these very difficult circumstances.
However, it’s our responsibility to safeguard our business and we are now taking steps to maintain competitiveness in the challenging market environment,” CEO Jørn Madsen said.
Maersk Drilling said some tenders and projects are being delayed or cancelled.
On April 16, the company announced it received notice of early termination for two drilling contracts involving the semi-submersible Maersk Developer and jack-up rig Maersk Reacher.
However, due to early termination fees, the financial impact of the contract terminations on 2020 profitability is expected to be minimal, the company said.
Source:www.energynewsafrica.com
Tanzanian Healthcare Centres To Receive Free Electricity Services
JUMEME, a mini-grid operator, has launched a COVID-19 Relief Programme to support the Tanzanian healthcare centres in the fight against the COVID-19 pandemic.
With this programme, JUMEME will use its local solar-hybrid mini-grids to provide 10 healthcare facilities in the Lake Victoria Islands with free electricity services for the coming three months.
As free and reliable electricity supply will help keep operations run smoothly, it will also free up much needed financial resources to better prepare the local healthcare facilities to fight COVID-19.
In addition to its 12 solar-hybrid mini-grids already in operation in the Lake Victoria area, JUMEME is also finalizing the implementation of 11 mini-grids on the shores of Lake Tanganyika, in the Northwest of Tanzania, which will connect 10 more health centres once operating.
JUMEME intends to extend its relief program to this area to support their local health centres as soon as the new project is completed.
Dr. Kole, Chief Physician at the Bwisya Hospital said: ”We are grateful to JUMEME for the (electrification) services they offer to Bwisya Hospital for 24 hours a day without failure. We also appreciate the availability of electricity which enables us to conduct clinical procedures, surgery, and other essential health services to the people of Ukara island.’’
Health centres are common in Tanzania’s remote rural areas. Patients rely on these facilities to receive first aid and treatments for common infections, before being referred to larger, better equipped facilities if needed.
In JUMEME’s project areas, which were selected for their remote, off-grid location, only one healthcare facility can be deemed a hospital, which is located in Bwisya on the island Ukara.
These smaller facilities are especially vulnerable, as they receive less funding than larger hospitals.