Uganda Gov’t Frustrating Tullow Oil’s Attempt To Sell Stake
Endless negotiations with the Ugandan government are holding up Tullow Oil’s attempts to sell a 21.75% stake in its Ugandan holdings.
In a Bloomberg report Paul McDade, Tullow CEO, said efforts to offload the stake to its fellow partner in Uganda, Total, continue to stall with government persistently failing to give the deal a go-ahead.
“What we put together we thought was in the best interest of all parties, including the government of Uganda. We feel somewhat frustrated [two and half years] later that the efforts on that farm-down structure have been unsuccessful in completing,” he said, noting that they were now looking for alternative ways to get the deal done.
“What we are doing is gently standing back and looking at: Are there other ways to structure the deal? It’s really just about not continuing just to try and push the same thing,” McDade told Bloomberg.
While Tullow may be frustrated, other reports have the Energy Minister, Irene Muloni, wondering at the frustration.
Muloni told the Daily Monitor that the government was not aware of any frustration, wondering who Tullow had complained to. “Be fair. Tullow complained to who? To you?” she quizzed in a brief phone interview, noting she would give a full response after understanding the contents of the alleged frustration.
The Ugandan cabinet, in February, okayed the sale to Total E&P. And near the close of 2018 Muloni told the Daily Monitor, government had endorsed Tullow’s desire to sell its assets to Total E&P subject to the payment of $167 million (about Shs614b) in capital gains tax.
“On November 21, 2018 I gave conditional consent for this transaction, subject to payment of the tax obligations as assessed by Uganda Revenue Authority (URA),” she said at a briefing about the status of Uganda’s oil sector. “In principle, we do not have any problem with the arrangement: how they clear up the $167 million is something they will have to arrange with URA,” she said.
McDade, in the Bloomberg interview, did say that the current negotiations for the sale were focused on taxes related to the transaction, claiming that whereas Tullow had agreed to the principle terms for its portion of the levies earlier this year, the deal is yet to be finalized.
EU Sanctions Turkey For Drilling Offshore Cyprus
The European Union is set to sanction Turkey over ‘illegal’ drilling activities in the Eastern Mediterranean offshore Cyprus. The EU will, among other sanctions, stop high-level dialogues with Turkey and will reduce pre-accession assistance to Turkey for 2020.
First, Reuters last week reported it had seen documents showing that the EU was preparing to sanction Turkey for the deployment of two drillships in waters claimed by Cyprus.
Then, the confirmation of the reports came on Monday, with the European Foreign Affairs Council issuing a statement where it said it “deplores that, despite the European Union’s repeated calls to cease its illegal activities in the Eastern Mediterranean, Turkey continued its drilling operations west of Cyprus and launched a second drilling operation northeast of Cyprus within Cypriot territorial waters.”
It would be recalled that following the recent deployment of the Fatih drillship west of Cyprus, Turkish TPAO last week deployed the Yavuz drillship to east of Cyprus, claiming its drilling operations are legitimate as its drillships have been deployed in areas granted to Turkey by the Turkish Republic of Northern Cyprus – a self-declared state on Cyprus, recognized only by Turkey.
The European Council said Monday that in light of Turkey’s “continued and new illegal drilling activities,” the council would suspend negotiations on the comprehensive air transport agreement, and won’t hold the Association Council and further meetings of the EU-Turkey high-level dialogues for the time being.
The council also endorsed the European Commission’s proposal to reduce the pre-accession assistance to Turkey for 2020, which according to Euronews, amounts to €145.8 million.
The European Foreign Affairs Council also invited the European Investment Bank to review its lending activities in Turkey, notably with regard to sovereign-backed lending.
“The Council remains seized of the matter and, in accordance with the European Council conclusions of 20 June, invites the High Representative and the Commission to continue work on options for targeted measures in light of Turkey’s continued drilling activities in the Eastern Mediterranean. The Council will closely monitor developments and will revert to this issue as appropriate,” the Council said.
Turkey: We will continue drilling
Turkey’s ministry of foreign affairs said the measures by the EU will not in any way affect its drilling activities. Turkey also accused the EU of bias and of having no regard to Turkish Cypriots.
The Turkish foreign ministry said “The conclusions adopted by the EU Foreign Affairs Council yesterday (15 July) will in no way affect Turkey’s determination to continue its hydrocarbon activities in the Eastern Mediterranean. These conclusions demonstrate how prejudiced and biased the EU is with regard to Cyprus as they make no reference to the Turkish Cypriots, who have equal rights over the natural resources of the Island, in total disregard of their existence in Cyprus.”
“As we have repeatedly emphasized in the past, our hydrocarbon activities in the Eastern Mediterranean have two dimensions: the protection of our rights on our continental shelf, and the protection of the equal rights of the Turkish Cypriots, who are co-owners of the Island, over the hydrocarbon resources of the Island.”
“Our country will continue to protect both its own rights and the rights of Turkish Cypriots with determination, and will further boost its activities to this end. The EU, [which] has not kept its promises to the Turkish Cypriots since 26 April 2004, has no word to say to us in this regard.”
Source: Offshoreenergytoday.com
Ghana’s Petroleum Hub Project: Restructure, Recaptalize, And Revamp TOR To Play A Central Role
Its weaknesses are well documented, ranging from distress financial position, low refining and utilization capacity, weak governance structure, poor maintenance culture, to production and storage losses.
But little attention has been given to its strengths and opportunities. It takes only those who have ever ventured closer, to see the brighter side of the 45,000 barrels per stream day (bpsd) state-owned facility which is situated 24 kilometers East of Accra.
Fortunate, am I to come close to the Technicians and Engineers of this facility who would always make it count when they are most needed. The capability and sense of ownership of the ordinary worker of the facility is not comparable; making them the employee of choice for the refineries in the Gulf and Asia.
Beyond the human asset, the Tema Oil Refinery (TOR) can boost of huge storage capacity of approximately 1 million metric tonnes for both crude oil and finished petroleum products, and well inter-connected multi-product pipelines of varied sizes. The refinery also owns a Jetty, a Single Point Mooring (SPM) facility, and a Conventional Buoy Mooring (CBM) system for both crude and finished petroleum products vessels. And aside its large capacity of land, the facility is very much close to markets (local and domestic).
However, the under-utilization of these assets have become a major setback for the entity. For instance, the stock tank turn is less than 1 percent; 20 percent minimum measure of fair utilization. Both the Crude Distillation Unit (CDU) and the Residual Fluid Catalytic Cracker (RFCC) rarely run continuously, with the CDU unable to run at optimum capacity on most occasion.
In spite of the challenges, industry players and analysts have described TOR as a necessary center of the success of Ghana’s proposed petroleum hub, as a result of its base assets that can easily be developed into a viable refinery. They argue that if the country could optimize the use of TOR’s existing assets, investors would appreciate the value proposition from Ghana as a petroleum hub.
Having identified capital, good governance and management structure as some of the necessary factors needed to make the state-managed facility viable, industry players are asking government to take all useful assets of the refinery as an equity contribution to enter into a strategic relationship with private technical and financial institutions to recapitalize and revamp the facility, if it has to play the central role in the creation of the petroleum hub.
Restructure
At the just ended 2019 Ghana Energy Summit organized by the Business and Financial Times (B&FT), panelists who led the discussion on the topic “Ghana’s Petroleum Hub Project: The Dream, Opportunities, How to Get There”, concluded that the private sector must play a key role in the idea’s formulation, implementation, and the management of the hub, appealing to politicians to stay out and focus on setting policy and regulatory guidelines. And in contributing to the discussion as a panel, Mr. Isaac Osei, the boss of TOR, conceded that the business of government is to create the enabling environment needed for the private sector to thrive, instead of seeking to manage enterprises.
The assertion of the panelists was largely influenced by the huge capital and technological requirement for the success of the project which involves refineries, power plants, petro-chemical plants, light industry, storage and transmission utilities, waste and water treatment facilities, and business and residential centers et cetera.
In repositioning the Tema Oil Refinery to not only be part, but to play a central role in the petroleum hub dream, it has become imperative for the government being the sole shareholder, to open its doors to private international and local investors to change the ownership structure of the facility.
Government must be willing to forego its shares or take a minority stake in the business, and allow a strategic investor to introduce the kind of economics and technologies the business require. Restructuring TOR would provide the broad framework for the remedy to the numerous challenges facing the facility.
Today, if the policy on TOR is reviewed and is privatized, the composition of the Board of Directors and management will reflect this new structure and will be incentivized to act in the best interest of the organization with little or no government interference. It would be able to not only attract funding, but also the competent hands required to run the facility as a business concern.
Recapitalize
Aside requiring competent leadership to make it viable, the business of oil refining require huge capital outlay to improve efficiency, meet higher quality fuel standards and environmental legislation. Successive governments have clearly shown the lack of financial, technical, and management capacity in this regard.
TOR has been plagued with funding challenges, in spite of debt recovery levy Acts instituted in the past and the current cash collected through the Energy Sector Levy Act (ESLA) to offset its indebtedness. And just like the many other state-owned enterprises (SOEs) in Ghana’s energy sector, TOR has been made bankrupt from subsidies (and non-payment of these subsidies) and political interference; a problem that is practically government manufactured.
It still remain unclear how much debt sits in the books of TOR and what the debt is made up of. A complete audit of TOR’s financial position is necessary to ascertain its indebtedness, and to commence the processes of recapitalization.
Recapitalization remains the prime motive for proposing a change in the management and control of the refinery. To provide the free cash flow from the private sector to service the debts and provide working capital to relieve it from its financial distress which is frustrating smooth operations.
For instance, the process of installing the brand new 120 tonne per hour steam boiler that TOR took delivery of in October 2018 to replace the old and obsolete one which has proven to be unreliable has stalled, for reason of inadequate funds. Also, the refinery have not been able to restore the furnace that exploded in January 2017 as a result of illiquidity, forcing the refinery’s production capacity to drop from 45,000 bpsd to a paltry 28,000 bpsd. Again, the company’s plan to build a Greenfield facility to refine 100,000 bpsd, as against its current capacity of 45,000 barrels, remains on the drawing board since it was first announced in October 2017, while it struggles to source for funds to upgrade the existing facility from 45,000 bpsd to 60,000 barrels. But the topmost of its financial challenges is the inability to raise letters of credit (LoC) to procure crude to ensure uninterrupted running of the facility.
In view of these, capital injection from the private sector into the operation, expansion, and rehabilitation of the existing infrastructure is critical if the new TOR would have to play a central role in the petroleum hub.
Revamp
The world over, profitable refineries rely on operational efficiency to gain competitive edge since they have little or no control over the price of their input or their output. Therefore constant innovation, upgrading and optimization of plants remains a priority if they have to produce more outputs from fewer inputs.
Revamping/rehabilitation and expanding the existing Tema Oil Refinery is therefore a non-negotiable call if it has to proceed on the path of sustainability. The country must rely on its petroleum hub agenda to revamp the existing TOR facility to make it more efficient whilst it makes plans to construct new refineries to meet local demand, as well as targeting the countries without refineries in the sub-region.
There must therefore be a change in the technology or processes used in the existing facility to allow low-cost slate to be processed, increase the current throughput, achieve economies of scale and increase overall profitability.
For instance, TOR have had the intention to automate the loading gantry at its premises to reduce the human intervention as a way of reducing, if not to eliminate the losses at the gantry. The idea of rehabilitating/revamping the storage and product transmission facilities to create more storage room, move product efficiently and safely, and reduce product losses, remain part of TOR’s plan. And the restoration of the exploded furnace and/or an installation of an additional furnace is also imperative to increase the number of barrels to produce per day.
Even now with the Sulphur standards of 50 parts per million (ppm) that have been implemented to reduce Sulphur emissions by Diesel vehicles, TOR cannot refine to that standard and therefore they need to retool the plant to make it compliant with the new regulations and laws. In brief, the revamping idea is necessary today to revitalize TOR’s operational capacity through the upgrade and modernization of various parts of the refinery. It is therefore the most appropriate time for government to review its policy on TOR and cede the management and control of the facility to private and competent hands which has capacity to provide the right economics and technology for the business, if it has to be profitable and sustainable.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security (IES) © 2019
The writer has over 22 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.
Ghana: We’ll Sanction Utility Service Providers Short Changing Consumers-PURC
The Volta Regional Manager of Ghana’s Public Utilities Regulatory Commission (PURC), Philip Agbezudor, has assured aggrieved utility consumers in the region not to hesitate to bring their concerns before the commission for redress.
He said instead of taking the laws into their own hands, they should have faith in the PURC and report their grievances to the PURC which has a regional office in Ho, the regional capital.
He said his outfit would take the grievances of consumers very seriously. Besides, it would conduct the necessary investigations and would not hesitate to apply the necessary sanctions on anyone or service provider found culpable.
Mr. Agbezudor made the observation during an interaction with the Muslim Community in Ho. He said the PURC which is constitutionally mandated to oversee the provision and delivery of quality utility service to Ghanaians would do all in its power to ensure that the consumer and the utility providers have a mutually beneficial relationship.
He observed that it was impossible for the society to exist without problems and misunderstanding. “But as a nation governed by laws, there are established bodies that we should seek redress from in times of grief or when we feel shortchanged…” he added.
He further explained that since the PURC as a regulator was more of a liaison between the public on one hand and the utility service providers on the other just as service providers will be dealt with when wrong, consumers will also be dealt with when they engage in any illegal activity.
Reacting to a question of high bills, improper disconnection and gross unprofessional conduct by staff and workers of both Power Producing Services (PDS) and the Ghana Water Company (GWCL), the regional manager said they were matters the commission took seriously and would always take steps to investigate and sanction where necessary.
Mr. Agbezudor advised consumers to observe basic energy and water conservation tips to deal with the issue of high bills and also desist from all forms of illegality while they report people whom they suspect were engaged in illegality.
Ghana: Police Hunt For Shell Filling Station Robbers
Police in Ghana’s industrial city, Tema, are on a manhunt for three suspected armed robbers who stormed a Shell Filling Station at the Tema Motorway Roundabout on Sunday, July 14, 2019, where they allegedly made away with valuables, including money.
The suspected robbers allegedly arrived at the filling station at about 11.50am, onboard a black Toyota Corolla saloon car with registration number GG 991-18.
They reportedly held seven workers and two customers hostage at gunpoint and robbed them of their valuables.
“Police investigations revealed that items stolen included an Apple MacBook Pro laptop, a Dell laptop, one Motorola Z2 mobile phone and an MTN router.
“The rest are GHc3,000 worth of MTN recharge cards, a system unit and an unspecified amount of money,” a statement signed by DSP Joseph Benefo Darkwah, PRO of Tema Regional Police Command, said.
However, nobody was injured during the robbery.
Personnel from the Tema Regional Police Command have visited the crime scene and have in their custody, the CCTV footages which are currently being examined.
“The police are working assiduously to make sure the perpetrators of this crime are brought to book. We are appealing to the general public that anyone with relevant information that will help crack this case should not hesitate to contact the nearest police station or contact police on the following numbers: 18555..MTN Toll Free, 0542719083-MTN and 0571017996 AirtelTigo,” he statement concluded.
Seabed Geosolutions Gets Ocean Bottom Node Job In West Africa
Seabed Geosolutions, a joint venture between Fugro and CGG, has been awarded a 4D ocean bottom node (OBN) monitor survey in West Africa from an unnamed major oil company.
The project, for which the data is expected to be acquired over a two-month period during the third quarter of 2019, will cover 151 square kilometers in water depths up to 600 meters, Fugro said on Monday.
The ocean bottom nodes will be deployed by remotely operated vehicles.
“We are excited to secure another survey for this repeat customer, creating a better understanding of the development of their reservoir. It will secure backlog continuity for our CASE Abyss crew and the Hugin Explorer vessel,” Stephan Midenet, CEO of Seabed Geosolutions, commented.
Seabed Geosolutions collects geophysical data on the seabed through an array of imaging technologies for oil and gas companies, focused on the development and production phases of their fields.
South Africa: Eskom’s Group Treasurer Resigns
A Treasurer for South Africa’s utility company, Eskom Group, Andre Pillay, has tendered his resignation and will leave the company at the end of August 2019.
Pillay’s resignation marks yet another exit of a senior executive as the utility struggles with a financial and operational crisis.
Eskom Group CEO Phakamani Hadebe said he will leave his post at the end of July due to health concerns related to the high-stress job.
Pillay has been with Eskom since 2011 when he was appointed Senior Manager for Funding Execution in the Eskom Treasury department. He was subsequently promoted to General Manager (Group Treasurer) in September 2016.
“Andre’s contribution to the successful execution of the Eskom Treasury mandate has been immeasurable and we appreciate the role that he played in ensuring that Eskom’s funding plans were successfully executed year after year,” Eskom said in statement issued on Monday.
“We are cognisant of how critical the Group Treasurer role is for Eskom and have requested that Andre remain in the position for the next two months to ensure a seamless transition and business continuity through the handover process. Andre’s replacement will be announced in due course. We believe that Treasury operations will continue with ease with the support of the current Treasury leadership,” Calib Cassim, Eskom’s Chief Financial Officer added.
Eskom thanked Andre for his passionate dedication and contribution towards managing the Group’s liquidity through some of the most challenging times for the company and wished him the best in his future endeavours.
UK Aid: Largest Single Direct Climate Investment In Africa
A UK aid package to tackle climate change across Africa has been announced by the International Development Secretary, Rory Stewart, during a two-day visit to Kenya.
The support would help sub-Saharan African countries build resilience to climate change and develop low carbon economies.
Increasing temperatures and extreme weather across the continent are having a profound impact on the lives and livelihoods of communities.
During his visit, the Secretary of State saw first-hand what happens if humans do not protect the planet, including damaged natural flood defences; arid, drought-stricken land; and wildlife, the environment and jobs put at risk.
He highlighted how tackling climate change is a global problem, and taking on an issue which affects all humanity will also ultimately benefit the UK.
Over the next five years, the new £250 million UK aid package would ensure UK expertise and experience can help developing countries become more climate resilient and move away from fossil fuels onto cleaner energy sources.
Working in partnership with African governments, organizations and communities, this funding would be the Department for International Development’s (DFID’s) largest single direct climate investment ever in the continent.
“We are facing a global climate emergency. Polluted air, rising sea levels and increasing temperatures are felt by everyone in the world.
“We must all play our part to protect the environment, wildlife, vulnerable families and communities – and this includes investing in renewable energy.
“I am today announcing DFID’s biggest ever single direct aid investment in climate and the environment across Africa. This builds on my ambition to double DFID’s efforts on this issue globally. Tackling climate change is of direct benefit to everyone living on this planet, including of course in the UK,” Mr Stewart said.
Impacts of climate change
African nations are responsible for just 2 to 3% of global emissions, but the continent is set to be the worst affected by the devastating impacts of climate change. Kenya is getting warmer and its rainfall becoming more uncertain.
In the coastal town of Lamu, in southern Kenya, the International Development Secretary heard on Thursday (July 11) about the importance of mangrove conservation. These trees act as a vital natural flood defence protecting communities from storms.
However, they are among the world’s most threatened vegetation and nearly 40% of Lamu’s mangroves have already been destroyed.
The International Development Secretary also visited the UNESCO World Heritage site Lamu Old Town where he heard how UK aid will support the sustainable development of the town. While there he announced an additional £10 million towards DFID’s Sustainable Urban Economic Development programme to support urban economic growth in Kenya, which is resilient to climate-related shocks and disasters.
On Friday (July 12), the International Development Secretary met with communities in northern Kenya whose lives have been hit by drought.
Stewart announced an extra £4 million UK aid commitment to help prevent malnutrition and the threat of starvation for those living off arid lands in Kenya.
The effects of a changing climate and damage to the environment can already be seen in the village of Loiyangalani, near Marsabit County.
Source: Esi-Africa.com
India: Total, EDF Renewables Sign Four PPAs
Total Eren and EDF Renewables have signed four 25-year long term Power Purchase Agreements (PPA), for four solar power projects totalling 716MWp of installed capacities in northern India.
These projects have been awarded to EDEN Renewables India, their solar photovoltaic equally owned joint venture in India.
With planned production of nearly 1,200GWh per year, these solar PV projects will generate the energy required to meet the annual electricity needs of 1.1 million Indian households, Total said in a company statement.
Construction is due to start by the end of this year and commissioning is expected towards the end of 2020.
Through their local presence and their team of experts based in Delhi, EDEN Renewables India and EDF Renewables and Total Eren already operate four solar power plants in India totalling 207MWp of installed capacity in the States of Rajasthan, Uttarakhand and Madhya Pradesh.
Fabienne Demol, the executive vice president and global head of business development for Total Eren, commented: “We are delighted to have signed these PPAs for our four solar power plants, which will contribute to meeting the energy needs of the population in Uttar Pradesh and Rajasthan and to the development of renewable energy projects locally.
“We are multiplying our Indian installed capacity by four! These signatures represent an important milestone in our development in this market, which still offers significant growth opportunities. I look forward to working on other renewable energy projects in India with our partner EDF Renewables, and through our joint subsidiary EDEN Renewables India, which plays a key role in achieving our local ambitions.”
Frédéric Belloy, the executive vice president for international operations at EDF Renewables, stated: “We are pleased to have signed these Power Purchase Agreements for the benefits of Rajasthan and Uttar Pradesh people, which will enable them to have access to clean electricity.
“These large-scale projects are a lever for local economic development, they enable us to strengthen our presence in India and consider new projects in this country which represents a strategic market for EDF Renewables. These landmarks projects fit perfectly with the EDF Group’s Cap 2030 strategy of doubling its renewable energy capacity in operation between 2015 and 2030 in France and worldwide.”
Source: Esi-Africa.com
Downstream Regulators In The Sub-region Must Collaborate To Stop Fuel Smuggling-Senyo Hosi
The Chief Executive Officer of Chamber of Bulk Oil Distributors (CBOD) in the Republic of Ghana, Senyo Hosi, has underscored the need for petroleum downstream regulators in the West African sub-region to collaborate and institute mechanisms to deal with fuel smuggling and other illicit activities in the downstream sector.
In his view, although Ghana’s National Petroleum Authority, headed by Alhassan Tampuli, in collaboration with other relevant stakeholders, is doing its best to address the issue, smugglers keep doing it because there is no common platform to allow each country to monitor to ascertain whether BRVs that are marked for export actually get to their destination with the same quantity or not.
Contributing to a panel discussion on the topic: ‘Illicit activities, fuel fraud and supply chain security in West African sub-region’, Mr Hosi shared his views on what the regulators in the sub-region can do to stem fuel fraud.
“We should be looking at how, for instance, if the thing is supposed to go to Mali, the Mali people should be able to see. You don’t need to remove the tracker out at the border. If we have a proper regional collaboration and, then, this becomes a standard or a harmonized exporting process across the region, anybody who wants to move a truck should be able to have that equipment that is traceable, trackable and is reachable with all the other things…the volume and pressure monitoring and all that across. If you want to be a BRV tracker, you should have that as part of the requirement.
“When you set off in Benin, anybody within the region, all the regulators, should be able to see, other than that, all you have to do is to pretend to have crossed and do au-turn. So, if we have to look at proper regional collaboration, we should deal with this problem,” he suggested.
Assistant Commissioner in-charge of Upstream Petroleum at the Customs Division of the Ghana Revenue Authority (GRA), Mr Benjamin Graham, noted that illegal fuel trade is denying the government of revenue, stressing that because each country is doing things differently, criminals are taking advantage of the situation.
Mr Graham, who described the situation as worrying, suggested that there should be a collaboration between customs at the sub-regional level.
“There should be customs to customs cooperation so that before any product leaves Nigeria or Togo, for instance, the information should be passed on to Customs. So, we expect that if you have lost 50 metric tonnes of diesel, it means that you’re going to account for the 50 metric tonnes. But if you go and account for 30 metric tonnes, it means that the 20 metric tonnes has been stolen for someone’s private gains. However, if information is sent to NPA, Customs or other relevant agency, then we can all monitor the vessel or BRV carrying the product,” suggested.
He further suggested the use of drones to monitor fuel pipelines to ward off criminals engaging in bunkering and siphoning of fuel in the sub-region.
Licensing Round: Ghana’s Energy Ministry Explains Why Most Oil companies Pulled Out
Ghana’s Ministry of Energy has blamed the lack of comprehensive data on Ghana’s oil blocks as well as the small size of the blocks as some of the reasons for the low interest in the maiden licensing bid rounds for the six oil blocks.
The government, through the Energy Ministry, in October 2018, earmarked six oil blocks for exploration and production.
Sixteen oil and gas firms were initially selected early this year to the final stage of the Oil Licensing Round.
Three of the oil blocks-two, three and four were to go through competitive bidding process, while two blocks-five and six were supposed to begin direct negotiations.
Block One was reserved for the Ghana National Petroleum Corporation (GNPC).
The bidding round attracted multinational oil companies such US oil and gas giant ExxonMobil, British Petroleum, China National Offshore Oil Corporation, Qatar Petroleum and Aker Energy.
The rest are Cairn Energy, Global Petroleum Group, First E&P, Sasol, Equinor and Harmony Oil and Gas Corporation, Tullow Ghana Limited, Total, ENI Ghana, Vitol and Kosmos Energy.
However, most of the major oil firms pulled out of the bidding process at the eleventh hour.
ENI and Vitol, as well as Tullow Ghana Limited, were the only companies that submitted bids for block three, with First E&P submitting bid for block two.
Explaining the issue, deputy Minister for Energy in-charge of Petroleum, Dr. Mohammed Amin Adam explained that the government has done its assessment on the responses it received from the companies and has taken steps to address them.
“Basically, two major issues emerged, the first one is that the data that we already have on those blocks was not comprehensive enough and therefore they didn’t have enough data to enable them to make commercial decisions so we have to improve on the quality of the data,” he stated.
According to him, the second issue that came up was the size of the acreage, which he said was too small for most of the companies compared to the offers they get from other oil-rich countries.
“For some of them, their exploratory strategies require them to operate in larger acreages and there are a number of countries that will give larger acreages to companies. If they compare what they get as per their strategies with what they were offered, our acreages or blocks were smaller in size and therefore it was inconsistent with their strategies”
The Deputy Minister stated further that his outfit will take a decision after discussions with stakeholders and consultants to decide whether to revise the size of the blocks for future bidding rounds to make Ghana’s upstream sector more competitive.
Ghana: Armed Men Rob Shell Filling Station At Tema Motorway Roundabout
Two armed robbers allegedly stormed a Shell filling station at Tema Motorway roundabout in the Republic of Ghana and made away with their sales and other valuables in what could be described as daylight robbery.
The incident was captured on the supermarket’s Closed Circuit Television (CCTV).
The two robbers were said to have dressed in a pair of jeans and shirt to match, entering the shop and holding the three female attendants on duty hostage at gunpoint.
Sources say the robbers arrived in a Toyota saloon car at about 11:51 am on Sunday, July 14, 2019 with a bag behind them, instructing the attendants to keep their mouth shut before marching them to the accounts office.
The footage which lasted 1:52 seconds also showed the robbers directing the attendants to lay down before demanding for money while they ransacked the cash boxes.
Electricity Producers Can’t Stop Production Over Gov’t Debt – Expert
Energy expert Kojo Poku says Independent Power Producers (IPPs) in the Republic of Ghana cannot halt production due to government’s indebtedness to them.
According to him, shutting down will mean terminating their agreement with government.
His argument followed a statement issued by the Chamber for Independent Power Producers, Distributors and Bulk Consumers in the West African country in which they gave government a 7-day ultimatum to settle its debts to power producers in the country.
They threatened to completely shut down should the Power Distribution Services fail to pay its estimated 300 million dollars to them.
But speaking on TV3’s The Key Points programme on Saturday, Mr Opoku said because the IPPs have a bond with government, they must adhere to it, stating the IPPs cannot just issue threats.
“…But what I’m trying to add to the matter is that if somebody goes out there and issues these things that in eight days we will pull the plug, it is not that easy, you cannot pull the plug, you cannot do that.
“To pull the plugs and shut your machines down, do you know what it means? Every IPP has a bond, that bond is given to you that in failure of government paying you, call on the bond.
“When you call on the bond, what it means is that you are shutting down and leaving the country and terminating your PPA, so if you come out with some of those things, you cannot threaten your employer,” he explained.
Mr. Poku also said the Chamber for Independent Power Producers, Distributors and Bulk Consumers does not have the power to represent any power producer in the country.
“Let’s address this chamber thing, they do not represent anyone, I put it on record, they don’t represent anyone. The gentleman works for Asogli, all the numbers he has, he called ECG pretending he was not from Asogli and they gave him the numbers.
“…When I get these things at six o’clock in the morning and I call the people involved, and everybody tells me Kojo, there has been no meeting, we have not told anybody to go and issue threats to government.”
Speaking on the issue of indebtedness, Mr. Poku said the PDS does not owe the IPPs any money.
“…From 1st March going forward, the Ministry of Finance, the government through the Ministry of Finance…all the debt that existed in the energy sector. So, PDS took a clean slate. There was no indebtedness,” he explained.
He noted that the figures put out by the Chamber for Independent Power Producers, Distributors and Bulk Consumers as money owed the IPPs is not accurate.
“The numbers are being brought about by somebody just bringing about numbers, it is definitely not true.”
Ghana: ECG, PDS Warn Public To Desist From Feasting On Rumours
The Electricity Company of Ghana (ECG) and Power Distribution Services have cautioned the public against feasting on rumours and what they described as ‘uncollaborated’ information from unauthorized quarters and using them to create an impression that there is confusion between them and independent power producers in the country.
The Chamber of Independent Power Producers, Bulk Distributors and Consumer (CIPDIB), last week, issued a threat that its members would be compelled to shut down their plants if ECG and PDS failed to settle their $700 indebtedness.
In a statement issued and signed by the Chief Executive Officer of CIPDIB, Elikplim Kwabla Apetorgbor, it urged the government, through the Ministry of Energy, to compel PDS and ECG to expressly pay all accumulated invoices to the IPPs within the next seven days.
The statement noted that payment for power supplied to ECG had not been forthcoming, following the transfer of distribution business of ECG to Power Distribution Services in March.
With the four-year power crisis which was witnessed between 2012 and 2016 still fresh on the minds of a section of Ghanaians, those who did not want to be served with another load shedding, waded into the issue and raised questions.
This apparently did not sit well with ECG and PDS, thus, prompting them to issue a joint statement about the issue.
In a statement jointly signed by the Managing Director of ECG, Ing. Samuel Boakye-Appiah, and CEO of PDS, Rev. Ing. William Hutton-Mensah, it said “We wish to urge the general public to exercise due care in taking onboard rumours and uncollaborated information especially from unauthorized quarters.
“Any electricity supply challenge of significance will be properly brought to the direct attention of the general public, and its attendant mitigation arrangements will also be properly spelt out,” the statement added.
The statement further noted that “ECG continues to play the role of Asset Owner and Holder of the Power Purchase Agreements (PPAs) and, thus, continues to be responsible for handling all matters relating to the supply and payment for power the IPPs.
“We wish to assure that general public that ECG and PDS and the IPPs are maintaining very good working relations during the transition period, and we’re working through various challenges which alter not uncommon in such transition arrangements,” the statement said.