Ghana’s strategic oil company, Bulk Oil Storage and Transportation Company Limited (BOST), has initiated strategic steps to expand its market share to make the company more efficient, and one of such moves is a proposed establishment of a depot at Takoradi to serve that enclave.
The West African nation’s strategic oil company has depots at Accra Plains, Kumasi, Buipe, Bolgatanga, Akosombo and Mami Water with total capacity of 425,600m3.
As part of BOST’s expansion drive, it has acquired a 185-acre land at Pumpini near Takoradi in the Western Region for the establishment of storage infrastructure.
“The Western Region storage facility will have spaces for 90,000 m3 gasoline, 60,000 m3 gasoil and 20,000mt LPG. The actual construction of the proposed facility is expected to commence in 2020. The completion of the facility will give the company enough visibility to serve the market and compete favourably in that part of the country,” Edwin A. Provencal, Managing Director of BOST, said in a story published by Business & Financial Times(B&FT).
He noted that actualization of the Western Region depot, coupled with other strategic plans such as enhancement of products’ transportation will help BOST capture about 50% of the market share in the medium term. Currently, BOST controls about 23% of the market; even though it has 35% storage capacity of national stock.
According to B&FT, Mr. Provencal who was speaking at a sensitization workshop for members of the Institute of Financial and Economic Journalists (IFEJ) held at Dodowa in the Greater Accra Region, said the move form part of efforts to turn the company around in order to make it a profitable enterprise in the petroleum supply chain.
He also stated that the company plans to rollout many infrastructure expansion to ensure operational efficiency, especially inter-depot connecting pipelines, such as a proposed pipeline between Akosombo and Kumasi. This, he said, will reduce the quantum of products transportation by Bulk Road Vehicles (BRVs) also known as road tankers.
“BRVs transportation is highly risky and also puts excessive pressure on the road.”
The BOST MD continued that the company was working assiduously to activate export trade with landlocked countries including Burkina Faso, Mali and Niger to generate more revenue.
“We have had levels of discussions with our business partners to supply them petroleum products through the Bolgatanga depot. There’s going to be construction of a 200km pipeline from Bolgatanga to Bingo in Burkina Faso to facilitate the export business”, he said.
Mr. Provencal however stated that for the above-mentioned strategies to come to fruition, much will depend on how quick BOST can raise substantial money to execute those projects, indicating that the company requires about US$150 million, of which US$64 million will be used to improve infrastructure such as storage facilities and pipelines.
The Nigerian National Petroleum Corporation (NNPC) has challenged shareholders of the Nigeria Liquefied Natural Gas (NLNG) to work very quickly towards expanding the production capacity of the company beyond Train 7 to take advantage of developments in the global LNG market.
The Group Managing Director of NNPC, Mallam Mele Kyari, gave the charge in Abuja, during the signing ceremony of a $2.5bn pre-payment agreement between NNPC and NLNG for Upstream gas development projects to supply gas to NLNG Trains 1 – 6.
Speaking on the significance of the agreement, the GMD said it would help to resolve the issues around gas supply to Trains 1 – 6, stressing that there was need to fast-track action on the process of bringing more trains on stream.
“Here at NNPC, we are thinking beyond Train 7; if your ambition is Train 7”, Kyari challenged the shareholders.
He noted that though NLNG has been a huge success as a company, it must go beyond its current achievements and initiate other viable projects capable of generating better return on investment.
“Actually, our thinking should be on what else we can do or what other projects we can work on as quickly as possible to take advantage of the enormous potential in-country. There is also the need for us to take advantage of what is happening in the global market and do things very differently. There are opportunities there and our company must move into those locations and we must move fast,” he declared.
The NNPC helmsman said the pre-payment gas supply agreement was a milestone which aligned with the Federal Government’s aspirations of monetizing the nation’s enormous gas resources, protecting the Federation’s investment in the NLNG, ensuring full capacity utilization (22mtpa LNG and 5mtpa NGLs) of Trains 1-6 plants, generating employment, and providing new vistas of growth opportunities in the nation’s LNG sector.
Earlier in his address, the Managing Director of NLNG, Engr. Tony Attah, noted that the signing of the gas supply pre-payment agreement was a significant step towards ensuring the company’s business sustainability and competitiveness.
He called for support to ensure that the Final Investment Decision on the Train 7 Project is taken this year without fail, adding that the project was no longer an ambitious one in the light of developments in the global LNG market.
Highpoint of the occasion was the signing of the gas supply pre-payment agreement which was witnessed by the Country Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor, and representatives of Total, Eni/NAOC, amongst others.
The Group Managing of the Nigeria’s National Petroleum Corporation, Mallam Mele Kyari, has given assurance that the selection of insurer for the NNPC’s assets in the 2020/2021 would be transparent, just as is the practice in other areas of the corporation’s operation nationwide.
He gave the assurance on Tuesday, November 12, 2019, at the NNPC Towers, Abuja, during the public bid opening exercise for companies that participated in the expression of interest as lead insurer for the corporation’s oil assets for 2020/2021.
“I am reassuring this country and the rest of our stakeholders that we are poised to make sure that this company acts and works transparently; we will remain accountable to our stakeholders. As a matter of duty for me and the management team, we will deliver on this”, Mallam Mele Kyari stated in a statement posted on the corporation’s website.
He advised the companies that participated in the bid to accept the results as only the best would emerge winner.
The Chief Financial Officer of the corporation, Mr. Umar Ajiya, said a key attribute of an organization like the NNPC was the protection of human assets, adding that the exercise was in pursuance of that objective.
He disclosed that a total of 42 companies submitted bids for the lead insurer contract, adding that each of the bids would be assessed on its own merit.
On hand to witness the bid opening process to ensure conformity with the public procurement law were representatives of the Bureau of Public Procurement (BPP), the Nigeria Extractive Industries Transparency Initiative (NEITI), National Insurance Commission, and civil society organisations.
Source:www.energynewsafrica.com
Ghana’s electricity distribution and retail company, Electricity Company of Ghana (ECG) has disconnected Sakumono Complex Two Primary School from the national grid due to poor electrical wiring of the school.
The school which was built some 25 years ago, is in dire of renovation, re-wiring and painting to make it befitting and convenient for teaching and learning.
The disconnection, the headmistress of the school, Madam Anne Rita Newton explained to energynewsafrica.com was done about three weeks ago thereby making visibility in the classrooms very poor.
Indeed, similar situations in other schools in the Sakumono Electoral Area have challenged Kwesi Poku Bosompem, Presiding Member of the Tema West Assembly, to lobby Africa Diamond Cable Company Limited for some retrofitting electrical lighting systems and cables.
Other schools the PM identified as having similar visibility challenges are Holy Child Nursery, Holy Child Primary and JHS and Sakumono Schools Complex ‘A’.
At a brief presentation to the schools at Holy Child Primary School, Kwesi Poku said he put in the request a fortnight ago and expressed his gratitude to African Diamond Cable Company Limited for supporting with the materials to solve the lighting problems in our schools.
The cost of the total equipment is GHc66,590 and to Kwesi Poku Bosompem, the gesture is so laudable and needs commendation.
“As a politician, my responsibility is to lobby for developments for my people and I’m glad my lobbying is yielding results,” he said.
On behalf of African Diamond Cable Company Limited and CEO, Victor Akowuah, Deputy Manager of the company said the company had done a similar gesture to Tema Technical Institute and looks forward to doing more of such corporate social responsibilities.
He said the company is determined to support education in Ghana, despite being in Ghana less than two years ago
“For us to do more of CSRs, we need Ghanaians to patronise our products which bare the name ‘Signal cable’ to increase our revenues for such gestures.
He said the company would donate a laptop to the best BECE candidate in the Sakumono Electoral Area in 2020, in addition to supplying some set of computers to the schools in the area.Source:www.energynewsafrica.com
The Executive Secretary for Ghana’s Public Utility and Regulatory Commission (PURC), Mami Dufie Ofori and CEO of hydro power generation company, Volta River Authority (VRA), Ing. Emmanuel Antwi-Darkwa, have been nominated for the 2019 Energy Personality of the year awards.
The ceremony, which comes off on Friday, November, 29, 2019, at the Labadi Beach Hotel in Accra, will be held under the theme: ‘Energy, the key to a sustainable economy for industrialisation’.
The duo were nominated alongside other distinguished energy personalities for the award.
Ing. Emmanuel Antwi-Darkwa, CEO of VRA
The VRA boss was, in addition, shortlisted for the best Energy Chief Executive Officer, CEO of the year.
Other personalities shortlisted for the award include Mr. Fred Oware, CEO of Bui Power Authority, Dr. Ben K.D Asante, CEO of Ghana National Gas Company, Mr. Gilbert K. Adarkwah, the advisor to Aker Energy CEO, Madam Salma Okonkwo of the UBI Group and Madam Efua Quansah, Country Director for PEG Ghana.
The Ghana Energy Awards has the objectives to, among other things, recognise the unique and tremendous efforts of distinguished personnel in Ghana’s energy sector.
The ceremony also affords the organisers the opportunity to bring industry stalwarts together on a single platform to network, share knowledge and tap on experiences and expertise of each other.
ADNOC LNG, a subsidiary of Abu Dhabi’s National Oil Company has announced that it has concluded supply agreements with subsidiaries of BP and TOTAL, effectively booking out the majority of its LNG production through Q1 2022.
The agreements were signed by officials from BP, TOTAL and ADNOG LNG – an Abu Dhabi National Oil Company (ADNOC) operating company.
According to Emirates News Agency, the signing of the agreements was witnessed by Dr. Sultan Ahmed Al Jaber, Minister of State and ADNOC Group CEO; Bob Dudley, Group CEO of BP; and Patrick Pouyanné, Chairman and CEO of Total.
“With these new supply agreements, ADNOC LNG has shown that it can react quickly and decisively to changing market conditions while ensuring the security and quality of delivery,’’ Fatema Al Nuaimi, ADNOC LNG CEO said.
“With the support of our shareholders, we have maximised access to new markets with strong LNG growth potential.”
She added, “We have also successfully demonstrated our ability to shift from one customer to multiple customers while maintaining our plant’s high reliability and accepting ships from different customers at our jetty. We continue to deliver on time, with the right specification, quality and agreed amounts.”
Today’s agreements are milestones in ADNOC LNG’s successful transition to a multi-customer marketing strategy that began just eight months ago in April 2019. Since then, ADNOC has shifted from supplying 90 percent of its LNG molecules to a single utility customer in Japan, which remains an important customer for ADNOC LNG, to supplying 90 percent of its LNG molecules to a range of clients and receiving terminals in more than eight countries across southern and southeast Asia including India, China, South Korea and Taiwan.
“BP is delighted to have concluded this LNG supply agreement,” said Robert Lawson, COO Gas, Integrated Supply and Trading of BP. “ADNOC LNG is a longstanding supplier to BP’s integrated supply and trading business. We are very pleased to have secured this new multi-year supply agreement.”
For his part, Laurent Chevalier, Vice President Middle East, Gas, Renewables & Power of Total, commented, “The 2 year LNG Supply Agreement contributes to the growth and flexibility of Total’s LNG portfolio and strengthens our longstanding relationship with ADNOC LNG.”
According to industry analysts, LNG is the fastest-growing hydrocarbon with a growth rate close to 4 percent per annum. Global LNG demand is expected to exceed 600 million tonnes per annum by 2035, up from nearly 300 million tonnes per annum in 2017.
ADNOC LNG produces about 6 million tonnes per annum of LNG from its facilities on Das Island off the coast of Abu Dhabi and is one of the world’s most reliable producers of the supercooled, liquefied gas.
ADNOC was the first LNG exporter in the Middle East and has been a reliable supplier of gas to global markets for over 40 years. Abu Dhabi’s strategic geographical location gives ADNOC advantaged access to growth markets in the Middle East and Asia, which are expected to drive significant gas demand in the near and long-term future.
ADNOC LNG is majority-owned by ADNOC, which has a 70 percent share of the company. Additional shareholders are Mitsui & Co (15 percent), BP (10 percent), and TOTAL (5 percent).
The UAE Minister of State and group CEO of ADNOC, His Excellency Dr. Sultan Ahmed Al Jaber, has called on the oil and gas industry to modernize in response to disruptions on multiple levels and a fast-evolving energy landscape.
H.E. Dr. Al Jaber was speaking at the opening of the 35th edition of the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC) which was attended by His Highness Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs of the United Arab Emirates (UAE).
Delivering his keynote address, H.E. Dr. Al Jaber said the oil and gas industry is being disrupted by new technologies, new business models, new forms of energy and a new geopolitical order, with the rise of Asia.
“This era of disruption is just the beginning and will only gather pace over time. Yet, the oil and gas company of today can be a winner tomorrow, if it operates at a lower level of cost and a higher level of performance; if it brings digital into the core of its operations; if it embeds sustainability into its DNA; and if it rethinks how to leverage its partnerships, enable its people and re-center its customer relationships.”
“This is the mission we defined together last year as Oil and Gas 4.0,” H.E. Dr. Al Jaber said. “By doubling down on this mission-to-modernize, the industry will remain an essential pillar of the future diversified energy mix.
“Our industry is in the business of progress around the world. This week, we have an opportunity to stretch those frontiers even further. Working together through creative partnership, we will drive economic growth responsibly; we will stay at the cutting edge of innovation and we will continue to drive growth and prosperity,” Worldoil.com quoted H.E. Dr. Al Jaber as saying.
“The fact is by 2040, all the energy currently consumed in the United States, India, and Japan will be added to global energy demand. And in even the most fast-paced transition scenarios, oil and gas will provide the source for over half of it. These facts are undisputed and simply make a compelling business case to invest in the future of our industry.”
H.E. Dr. Al Jaber went on to explain how ADNOC, in response to the shift of economic power from West to East, is deepening its partnerships globally and pivoting towards Asia where energy demand is growing fastest.
He said ADNOC is on track to expand its oil production capacity to 4 million barrels per day (mmbpd) by the end of 2020 and is finding new reserves of natural gas as it gets closer to achieving gas self-sufficiency for the UAE.
“New discoveries this year include over 7 billion barrels in oil reserves, 58 trillion cubic feet of conventional gas, and significantly over 160 trillion cubic feet of unconventional gas. And, as a result, the UAE has moved up from 7th to 6th place in the ranking of the largest oil and gas reserves in the world,” he said.
Referring to an earlier announcement by the Intercontinental Exchange (ICE) that it will set up a new futures exchange, in Abu Dhabi, to host the world’s first futures contract based on ADNOC’s Murban crude oil, H.E. Dr. Al Jaber said ADNOC will join major international oil companies (IOCs) as founding partners of the new exchange known as ICE Futures Abu Dhabi (IFAD).
“Leveraging the UAE’s position at the pivot point of growth economies, IFAD will be home to the Murban Futures Contract. Crucially, this contract will replace retroactive pricing with forward pricing. It will allow buyers to hedge their risk in the open market. And it will help capture more value from every barrel we produce.
“This represents a historic milestone that offers our partners and customers significant benefits, and it places Abu Dhabi and the UAE at the geographic center of global crude trading,” H.E. Dr. Al Jaber said.
H.E. Dr. Al Jaber added ADNOC is also leveraging the UAE’s geography as the company expands its downstream operations and creates a world-scale refining and petrochemicals complex. He invited international partners and the UAE private sector to take advantage of ADNOC’s high-quality feedstock and seize this unique opportunity for growth as the company delivers its downstream expansion strategy.
As the oil and gas industry embraces an age of disruption, digitization is the next frontier to driving efficiencies, curbing costs and extracting the highest value from every molecule of hydrocarbon produced, H.E. Dr. Al Jaber said. “At ADNOC, Artificial Intelligence powers our Panorama Digital Command Center, enabling clearer, real-time, business-critical decision making. Advanced robotics are transforming our surface and subsurface operations. And predictive analytics is significantly minimizing our operational downtime and maximizing our savings.”
H.E. Dr. Al Jaber stressed technology is also key to unlocking one of the central challenges facing the oil and gas industry: how to deliver more energy with fewer emissions.
“At ADNOC, we are constantly innovating to remain among the least carbon-intensive producers in the world. We are expanding the Middle East’s first commercial-scale carbon capture utilization and storage facility to capture at least 4.3 million tonnes of CO2 annually by 2030. That equals the amount of CO2 captured annually by 5 million acres of trees or forest over twice the size of the UAE,” H.E. Dr. Al Jaber said.
“As we expand our operations, we are pioneering the use of optical drones to monitor fugitive emissions, helping us maintain our best-in-class methane intensity. These innovations will help us keep our longstanding commitment to protecting the environment and honor the legacy of our founding father, Sheikh Zayed, who embedded responsible production into our DNA.”
H.E. Dr. Al Jaber also said one of ADNOC’s most important tasks is attracting and developing the best talent. “At ADNOC, we are committed to creating an innovative, diverse workplace. A workplace that attracts STEM graduates and encourages creative, progressive thinking. And a workplace where women work alongside men in the field and in leadership roles.” Today, he added, 15 percent of ADNOC’s senior leadership are women and there are over 700 women working on-site across the company’s upstream and downstream operations.
“A diverse workforce is a key enabler of business success and ensures we are an industry of the future. Ultimately our ability to appeal to the next generation will be determined by how well we communicate why we exist. In other words, our defining purpose as an essential driver of economic development,” H.E. Dr. Al Jaber said.
Following H.E. Dr. Al Jaber’s speech, a special ministerial panel discussion took place with the participation of H.E. Suhail Al Mazrouie, Minister of Energy and Industry, UAE; H.E. Shri Dharmendra Pradhan, Minister of Petroleum and Natural Gas, Government of India; H.E. Mohammad Barkindo, Secretary-General of the Organization of Petroleum Exporting Countries (OPEC) and Dr. Condoleezza Rice, Former Secretary of States of the United States of America.
Hosting more than 50 ministers, CEOs and global oil and gas business leaders as speakers, ADIPEC has convened the companies, decision, and policymakers who shape the future of the oil and gas industry for four days of focused business, dialogue and knowledge-transfer that addresses today’s energy challenges and defines tomorrow’s hydrocarbon landscape.
Kenya Power has launched a live line maintenance service at a cost of $20m, aimed at maintaining the network while reducing scheduled outages.
The initiative is part of the wider Kenya Electricity Modernisation Programme funded by the World Bank with $257m.
The project also involves installation of supervisory control and data acquisition equipment at substations for real-time network monitoring.
Officials expect live maintenance of the power network to boost sales and avert businesses losses brought about by supply disruptions.
African Energy Issue 403, 7 November, 2019
The head of Energy Desk for Accra- based Oman FM, Michael Creg Afful, has been nominated for an award at the Ghana Energy Awards slated for Friday, 29 November, 2019.
Creg Afful, who is also the Publisher and Managing Editor of energynewsafrica.com, the first energy portal in the Republic of Ghana dedicated to the energy sector, has been nominated for the 2019 Best Energy Reporter of the year category.
He won the same award in 2018.
This year’s event, which will be held at the Labadi Beach Hotel, will see several industry players also receiving awards.
Creg Afful would be competing with Francisca Dickson Arhin of EIB Network, Jessica Acheampong of Daily Graphic and Kobina Amonoo of Angel TV.
The Ghana Energy Awards was instituted in 2017.
The Awards Scheme, endorsed by the Ministry of Energy and the World Energy Council Ghana, is to recognise stakeholders, organisations and institutions that contribute meaningfully toward the growth of the country’s energy sector while motivating industry operatives to attain global standards and excellence in their work.
It is organised by the Energy Media Group and CH-Business Consulting in partnership with the Energy Commission, Chamber of Bulk Oil Distributors (CBOD), Association of Oil Marketing Companies (AOMC) and the Chamber of Chamber of Petroleum Consumers (COPEC) Ghana.
The 35th edition of Abu Dhabi International Petroleum Exhibition and Conference, ADIPEC 2019 has been opened.
The four day exhibition is being held at the Abu Dhabi National Exhibition Centre from 11th to 14th November, with the participation of over 2,200 exhibitors.
ADIPEC’s exhibition halls will provide a showcase for 2,200 exhibiting companies exhibiting across 160,000 gross sqm of floorspace, including the waterfront Offshore and Marine Exhibition.
Demonstrating the event’s international reach, exhibitors will include 35 National Oil Companies, NOCs, and 16 International Oil Companies, IOCs, a combined 12 percent increase, along with 23 national pavilions.
In total, more than 10,400 delegates and 1,000 speakers are set to participate in more than 160 conference sessions. This includes 123 sessions in the technical conference programme, supporting working oil and gas professionals.
Organisers have seen a record number of 3,652 abstract submissions for the technical conference, which marks a 29 percent year-on-year growth.
His Highnesss Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs who opened the conference, said that the UAE, under the leadership of His Highness Sheikh Khalifa, has become a centre of global dialogue on developments and trends in the oil and gas sector, as well as of predicting the future of this important sector.
He added that ADIPEC, which witnesses considerable local and international participation can help create a prosperous future for the oil and gas industry and identify the best ways of adapting and dealing with the future of global energy.
Following the opening of ADIPEC, Sheikh Mansour toured the pavilions of participating countries and companies, including the stand of the Abu Dhabi National Oil Company, ADNOC, where he was received by Dr. Sultan bin Ahmad Sultan Al Jaber, Minister of State and ADNOC Group CEO.
During the visit, Sheikh Mansour was briefed about ADNOC’s strategy to implement the “Oil and Gas 4.0” concept, to cope with future developments and increase the UAE’s profitability and economic returns.
He was also briefed about ADNOC’s new business models, which are based on its strategic partnerships.
ABU DHABI, UNITED ARAB EMIRATES – November 11, 2019: The Honourable Condoleezza Rice Former US Secretary of State (C) speaks during the opening of Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), at the Abu Dhabi National Exhibition Centre. Seen with HE Suhail bin Mohamed Faraj Faris Al Mazrouei, UAE Minister of Energy (R) and John Defterios, CNNMoney Emerging Markets Editor (L). ( Hamad Al Kaabi / Ministry of Presidential Affairs ) —
He then learnt about the use of the latest technologies to enhance output and develop resources to add maximum value to the company’s business, through utilising Artificial Intelligence, big data and blockchain to increase operational efficiency and improve performance.
Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, said that the UAE is a leading player in the global energy sector, due to its role in finding solutions to the challenges of energy sustainability, diversifying sources and shaping a new energy landscape.
The UAE Energy Strategy 2050 aims to reduce carbon emissions from electricity production by 70 percent over the next three decades and generate 50 percent of the country’s energy through green sources, he said.
Pointing out that oil exploration and new hydrocarbon reserves enhance the UAE’s position as a reliable source of energy, he expressed his optimism for the global oil market.
A number of senior officials attended the event.
The Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, His Highness Sheikh Mohamed bin Zayed Al Nahyan, has received Patrick Pouyanné, CEO, Total, on the sidelines of the 4th Abu Dhabi CEO Roundtable, where 30 of the world’s leading oil and gas companies gathered to discuss key industry challenges and opportunities in today’s fast evolving global economy.
The fourth annual gathering of its kind in the Middle East was held on the eve of the Abu Dhabi Petroleum Exhibition and Conference, ADIPEC, the world’s premier oil and gas conference, taking place in the UAE’s capital, from 11th-14th November.
According to Emirates News Agency, His Highness Sheikh Mohamed bin Zayed discussed the prospects of joint cooperation between the French oil and gas companies and their Emirati counterpart across energy sectors.
Sheikh Mohamed and his French guest touched on the agenda of the three-day ADIPEC, which will get underway on Monday, 11 November. As a global platform for industry best-practice and innovation, ADIPEC will set the agenda for the future of the energy, oil and gas sector.
Dr. Sultan Al Jaber, Minister of State, and ADNOC Group CEO, and Mohammed Mubarak Al Mazrouei, Under-secretary of the Abu Dhabi Crown Prince’s Court.
Ghana’s energy sector (power and gas) is confronted with severe financial threats notwithstanding the energy sector levy (ESLA) introduced by the previous administration and bequeathed to the present Government. Indeed, the sector is currently experiencing an unprecedented financial crisis and according to the Energy Sector Recovery Plan (ESRP), as of January 2019, the net sector arrears stood at US$ 2.748 Billion. If nothing is done, electricity production will grind to a halt and deprive Ghanaians of a regular and adequate supply of power for domestic and commercial use.
Of this indebtedness, a whopping $851 million is owed to the private sector. Furthermore, the ESRP document emphasises that unless there is an intervention, an additional $1.268 Billion will be added to this deficit by close of 2019. It is projected that at this rate, by 2023, the net arrears will balloon to about $12.524 billion.
The purpose of this article, therefore, is not only to draw the attention of the government and other sector stakeholders to this imminent energy sector catastrophe but also to reveal that gas contracts signed by this government, refusal of MDAs to pay for the power they consume, government interference in the running of the PURC, EGG’s technical and commercial losses including the PDS saga and the delay in the completion of the Tema-Takoradi interconnection pipeline among others have together conspired to create this unprecedented financial fracture in the energy sector.
In addition, this article aims to prompt Government to outline viable strategies in the imminent 2020 budget in order to resolve the financial threats to Ghana’s energy sector instead of hoping to spin the problem away with capacity charges allegations.
Ministries, Departments and Agencies (MDAs) Indebtedness to ECG
Every year, the Electricity Company of Ghana loses revenue of over US$180 million because consumers fail or refuse to pay their liabilities. Eighty per cent (80%) of this amount, US$150 million, constitutes the indebtedness of MDAs to ECG due to both suppressed budgetary allocations and a blatant refusal by MDAs to pay for their energy cost. Over and above mismanagement of the ESLA funds and choking energy sector debts, the current government appears to have abandoned the laudable initiative of the Mahama government which ensured a continuous replacement of post-paid (credit) meters with pre-paid meters.
You may recall, the NDC government replaced both post-paid meters and in some cases prepaid meters with smart meters that provided customers confidence in the metering system. The, then, government also initiated the installation of smart boundary meters to equip district managers of power to take full responsibility and account for electricity supplied to their jurisdictions.
Edward Bawa, MP for Bongo ConstituencyThe Financial Loss of US$190 Million Due To The PDS Saga
The overall technical and commercial losses in the power sector as of 2018 was 23%. In monetary terms, it amounted to US$400 million annually. The altruistic quest to improve the technical and operational efficiency of ECG motivated the NDC administration to opt for the Millennium Challenge Corporation’s Compact II. As a result, the Government of the United States of America has, so far, injected about US$300 million into Ghana’s energy sector. But not anymore – because the additional US$190 million which was expected to address the technical challenges of ECG has been cancelled.
Unfortunately, this huge financial loss is due to the present Government’s handling of the compact and has caused the US Government to terminate the arrangement. A simple procurement process which transitioned ECG’s operational functions to PDS on March 1, 2019, was botched due to cronyism, nepotism and an unbridled quest for self-gain. The consequential loss was easily avoidable hence unforgivable.
Delays in Gas Infrastructure Completion
So far, avoidable delays in the construction of gas infrastructure have constrained and continue to impede gas offtake in Takoradi and Tema. The cost to Ghana is estimated at US$750 million (US$20-30 million every month since September 2017 when the project should have been completed as envisaged by the Mahama administration).
President Mahama recognised the need to implement the reverse flow project to interconnect the West Africa Gas Pipeline and the Ghana Gas Pipeline System in Takoradi. As earlier stated, the project was to be completed in September 2017. This innovation was envisaged to provide flexibility in the use of gas by thermal plants located in the eastern and western parts of Ghana with the ultimate view of ensuring regular supply of power to Ghanaians and industry even when gas supply from the West Africa Gas Pipeline fluctuates.
Unfortunately, the Akufo-Addo government has delayed this project under the guise of conducting a forensic audit. Three years on, no report has been produced on the so-called audit; yet there has been an expensive delay of the project. In addition to this, has been the twin delays: in relocating the Karpowership from Tema to the Sekondi Naval Base; and in upgrades at the Tema metering station.
These projects were aimed at allowing optimum utilization of gas produced from the Offshore Cape Three Point Sankofa fields and also to reduce payments for unutilized natural gas.
Excess Gas Supply
In 2019, gas demand was lower than the contracted supply. This was mainly due to avoidable infrastructure bottlenecks. This resulted in a gas supply revenue shortfall of about US$168 million. The state was obliged to pay for this under its obligations to Offshore Cape Three Points (OCTP) Sankofa agreement. In the midst of plenty gas, and curiously, the NPP government has gone to pursue other LNG contracts: the Takoradi (due in 2020) and the Tema (due in 2023) LNG projects.
According to the Energy Sector Recovery Plan, in 2020, excess gas supply will increase by an additional 250 mmcfd, carrying a take-or-pay obligation of $ 822 million annually at an assumed Brent Crude oil price of USD 66 per bbl. Furthermore, in 2022, excess gas supply will increase by a further 180 mmcfd, also increasing the take-or-pay obligation by another US$523 million annually at an assumed Brent Crude oil price of $ 66 per bbl.
Like capacity payments for excess power generation, the current PURC gas tariff methodology does not include take-or-pay commitments in the tariff, so costs are incurred without a source of revenue.
Questions to ask are, in the face of gas glut and no present national emergency because the Mahama administration fixed ‘dumsor’, why will the Akufo-Addo government go-ahead to contract new LNG projects on a take or pay basis? I call on Government to immediately terminate the two LNG projects and announce the same in the 2020 budget if Ghana is to avoid any unnecessary burdening of the sector with more crippling debts.
Excess Power Generation Capacity and Government’s Empty Spin
According to Government, in 2018 power generation capacity in Ghana was in excess and it led to an estimated US$320 million in capacity charges. Their spin is that the NDC procured too much generation capacity which resulted in increasing debts from “take or pay” contracts. Did I hear too much generation capacity? Too much generation capacity in an economy that should have been celebrating one factory in every district by now; if the government had been truthful and sincere about its One-District-One-Factory promise?
Indeed, government maintains that with new power plants coming on stream in 2019, the excess generation capacity will grow and increase the capacity charge costs to US$620 million annually. Government further contends that under the current PURC electricity tariff methodology, capacity charges for excess capacity in electricity are neither included in the tariff nor are financing costs for any shortfall.
But, what the Government has deliberately hidden from Ghanaians is that the NDC government entered into a number of Power Purchase agreements which were scheduled to come on-stream in a step-by-step manner at later dates, to address annual electricity demand increases, meet the existing suppressed demand, cater for the deficits that will be occasioned when emergency plants with shorter tenure are taken off-stream and replace obsolete plants like the TAPCo plant that are old enough to be decommissioned.
The government as part of its spinning machinery suggests that, the net dependable capacity as of December 2018 was 3,982 MW, which is expected to increase to approximately 4,650 MW by the end of 2019. At peak hours the demand for electricity is 2700MW.
Again what government is not telling Ghanaians is that for the system to run effectively at all times, best practice dictates that Ghana has a spinning reserve of 540MW. The spinning reserve is an ancillary service in any electricity market and provides the excess capacity to meet urgent and emergency requirements if called upon by the system operator.
Equally, Government’s spin doctors do not tell Ghanaians that we still have about 14% of Ghanaians who in this 21st century do not have access to electricity and must be hooked to the national grid in order to free them from poverty and enhance their chances of economic prosperity. I will not over-stretch VALCo’s need for 300MW to enable them to increase their operations to five potlines so as to create the needed jobs in the integrated aluminium downstream industry.
Beyond consumption within Ghana, under President John Dramani Mahama’s administration, the transmission line from Ghana to Burkina Faso was being upgraded from a 161kV to a 330kV. This was to enable Ghana export power to our northern neighbours. From the schedule, Ghana should have been exporting about 400MW of power to Burkina Faso and other Sahelian countries, by now.
Unfortunately, this project was suspended because Agence Française de Development (AFD), the financiers of the project, felt that the financial covenants that GRIDCo had entered into with them had all not been met because of the avoidable liquidity crisis GRIDCo is experiencing presently even though the ESLA funds continue to accrue to Government coffers.
I am informed AFD is currently requesting a government of Ghana guarantee before the resumption of disbursement of the remaining funds.
I, also, expect the Finance minister to outline concrete steps to enable GRIDCo to pursue this AFD project. The market within the sub-region is large and lucrative. Therefore, if managed well – as was done under the NDC administration which made the Volta River Authority exceed their revenue targets in 2018 mainly because of export of power – we can derive even greater profit from our neighbouring countries.
Conclusion
I have sought to draw attention to the unprecedented financial crisis in which the energy sector of Ghana has been plunged into by the Akufo-Addo administration notwithstanding the continuous presence of the ESLA funds. I have also shed light on how mismanagement of the MCC Compact II has caused a direct financial loss of US$190 million to the energy sector of Ghana through the nepotistic PDS scandal.
Furthermore, the refusal of MDAs to pay for power due to inadequate budgetary allocations coupled with needless and avoidable delays in the completion of the Tema-Takoradi interconnection pipeline and the AFD sponsored Ghana-Burkina Faso transmission lines to upgrade projects have also been shown to be contributory factors to the sector’s crisis.
From the foregoing, it is important that in the 2020 budget which essentially is going to be the last budget for this government, the Minister for Finance must, in addition to addressing these crippling debts, state clearly how he is going to: Help GRIDCo complete the 330Kv Transmission Line to Bolgatanga to enable, VRA and ECG export excess power to Burkina Faso and its environments; Ensure that Valco gets its full complement of power requirement at a tariff that makes them competitive to create jobs for Ghanaians;
Aggressively extend the national grid to 14% of Ghanaians who do not have access to power in the midst of excess capacity; Handle the LNG contracts that have been signed by the current government on a take or pay basis even in the face of gas glut; Ensure that government’s indebtedness to the Power SOEs are settled and new ones not occasioned; Help the Utility companies reduce their technical and commercial losses through the deployment of new and modern infrastructure; Fully complete the Takoradi-Tema Interconnection pipeline to evacuate stranded gas in the west to the eastern power enclave; and Complete the relocation of the Karpowership to Takoradi to make use of excess gas in the Aboadze enclave. Failure to adequately address these germane issues will spell doom not only for Ghanaians but also, for the next government of the NDC from 2021 and beyond, the time to take action is now.
Edward Abambire Bawa (MP)Bongo Constituency
The 25th annual Halliburton Charity Golf Tournament raised $4.5 million for over 100 nonprofit organizations in Houston and across the U.S, once again making it one of the largest non-PGA golf tournament fundraisers in the U.S.
This amount includes a $1.5 million matching contribution from Halliburton in recognition of Halliburton’s 100th anniversary, which the Company is celebrating this year.
The tournament raised more than $23 million over the past 25 years, and this year represents the highest annual amount since the tournament first teed-off.
More than 400 golfers participated in the fundraiser held at The Clubs of Kingwood, and over 140 organizations sponsored the event.
“We are grateful for our sponsors of all levels who made this event possible and whose generous contributions helped the tournament break another record. It is an honor to provide the funds to outstanding charities whose work makes a positive difference in the lives of thousands of individuals in dozens of communities every day,” Jeff Miller, Halliburton chairman, president and CEO said.
This year’s golf tournament participating charities are:
Astros Foundation
Be An Angel
Books Between Kids
Brighter Bites
Bucker Children and Family Services
Casa de Esperanza de los Niños, Inc.
Child Advocates
Communities In Schools of Houston, Inc.
Dress for Success Houston
Dynamo Charities
El Centro de Corazón
Freedom Service Dogs of America
Girls Incorporated of Houston
HAWC (Houston Area Women’s Center)
High Sky Children’s Ranch
Houston Food Bank
Houston Health Foundation
Houston Police Foundation
Impact a Hero
Inspiration Ranch
Interfaith Ministries for Greater Houston
Kids Meals, Inc.
Partners for Harris County Children, Inc.
Search Homeless Services
The ALS Association, Texas Chapter
The Council on Recovery
The Landing
The Montrose Center
The Village Learning and Achievement Center
Trees for Houston
YES Prep Public Schools, Inc.
To honor both the 25th anniversary of the tournament and as part of its 100th year, Halliburton will provide grants to 70 additional charities across the U.S, allowing the tournament to benefit 100 total nonprofit organizations.
Centrica and SWM have reportedly launched a sale process of the North Sea oil producer Spirit Energy.
Reuters on Monday cited a document sent to prospective buyers, according to which Centrica wants to sell its 69 percent ownership in Spirit Energy. Reuters also said that SWM would evaluate proposals for the remaining stake.
Spirit Energy was established in 2017, through a combination of Centrica’s E&P business with Bayerngas Norge. Centrica plc owns 69% of Spirit Energy, with Bayerngas Norge’s former shareholders, led by Stadtwerke München Group (SWM), holding 31%.
The company’s 2018 production was 46.8 million barrels oil equivalent (mmboe), proven and probable (2P) reserves of 270 mmboe, and contingent (2C) resources of 512 mmboe.
Per the company’s 2018 summary document, Spirit Energy had operated and non-operated interests across the UK, Norway, the Netherlands, and Denmark, with 33 producing fields and 148 exploration licenses.
Source:www.energynewsafrica.com
During the visit, Sheikh Mansour was briefed about ADNOC’s strategy to implement the “Oil and Gas 4.0” concept, to cope with future developments and increase the UAE’s profitability and economic returns.
He was also briefed about ADNOC’s new business models, which are based on its strategic partnerships.
