Saudi Aramco Restarts Oil Pipeline After Drone Attack
Saudi Aramco restarted pumping oil on Wednesday through the pipeline which was hit by drone attacks on Tuesday, Arab media report.
Two pumping stations along Aramco’s East-West oil pipeline in Saudi Arabia were attacked by explosive-laden drones in the early morning local time on Tuesday, the official Saudi Press Agency (SPA) reported yesterday, citing Saudi Energy Minister Khalid al-Falih, who described the attack as one of “terrorism and sabotage.”
The drones laden with explosives targeted the pump stations on the pipeline which carries oil from eastern Saudi Arabia to the Yanbu port.
Saudi Aramco issued a statement on Tuesday, saying that the sabotage caused minor damage and a fire at one of the pumping stations.
Aramco temporarily shut down the pipeline yesterday as a precautionary measure and noted that no injuries or fatalities were reported.
The company’s oil and gas supplies haven’t been impacted as a result of the incident either, it said.
“Mr. Al-Falih confirmed that the Kingdom of Saudi Arabia condemns this cowardly attack, emphasizing that this act of terrorism and sabotage in addition to recent acts in the Arabian Gulf do not only target the Kingdom but also the security of world oil supplies and the global economy.
These attacks prove again that it is important for us to face terrorist entities, including the Houthi militias in Yemen that are backed by Iran,” the official Saudi agency said on Tuesday.
This statement came out hours after Houthi-owned TV Almasirah reported that “7 Drones have targeted vital Saudi facilities.”
Reports of the drone attack on Saudi Aramco’s oil infrastructure came a day after Saudi Arabia said that two of its oil tankers were attacked by saboteurs near the United Arab Emirates (UAE), while the UAE said that a total four vessels were attacked off its coast at the port of Fujairah.
The heightened security concerns and the potential threat to global oil supplies in the Middle East lifted oil prices on Monday and early Tuesday, outweighing concerns about an escalating U.S.-China trade war and slowing global economic growth. A large crude build reported by API later on Tuesday, however, weighed down on oil prices, which were still down just before the EIA’s inventory report release on Wednesday.
Source: Oilprice.com
SA: Solar Process Heat Plant To Save Energy Costs For Wits University Residences
A solar initiative titled Southern African Solar Thermal Training and Demonstration Initiative (SOLTRAIN) was officially launched in Johannesburg on Wednesday.
These SOLTRAIN projects, a district heating plant for Wits University residences and a solar process heat plant for the Klein Karoo International (KKI) tannery, is expected to save millions in energy costs over the lifetime of the plants.
SOLTRAIN in South Africa is managed by the Centre for Renewable and Sustainable Energy Studies at Stellenbosch University, and the South African National Energy Development Institute (SANEDI), in partnership with AEE-Institute for Sustainable Technologies (AEE INTEC) from Austria.
SOLTRAIN – is a regional initiative on capacity building and demonstration of solar thermal systems in the SADC region.
It is funded by the Austrian Development Agency and co-funded by the OPEC Fund for International Development.
The launch follows the fourth SOLTRAIN Conference, held on 14 May 2019 in South Africa, for all SADC project partners and opened for free attendance to the solar sector.
Cedi Appreciation To Hold Fuel Cost Same
Press Release by Institute of Energy Security (IES)
REVIEW OF MAY 2019 FIRST PRICING-WINDOW
Local Fuel Market Performance
Prices of petroleum products did not experience any movements within the first pricing-window of May 2019. The window saw Oil Marketing Companies (OMCs) selling Gasoline and Gasoil at an average price of Ghc5.24 and Ghc5.22 respectively. It must be noted that whereas prices remained largely unchanged across board, some OMCs, such as Frimps Oil reviewed their prices downwards to compete for larger market share. As a result, Frimps Oil, Benab Oil and Pacific Oil sell the least-priced fuel on the market relative to other OMCs per IES Market-Scan. They are followed by Star Oil and SO Energy.
World Oil Market
Geopolitical developments around the world continue to weigh on the oil market putting traders in readiness for any eventuality, including but not limited to Iran’s possible withdrawal from the 2015 Nuclear deal, Venezuela’s U.S sanction effects, and the final outcome of the back-and-forth U.S-China trade talks. Iran says its nuclear compliance is contingent on 1.5 mb/d oil exports, which U.S hopes to cut down to zero. Iran told EU diplomats that it needs to export as much as 1.5 mb/d in order for it to stay in the 2015 nuclear deal, while U.S warns “there will be consequences” should Iran resume nuclear activities. On the trade talks, U.S and China have imposed over 260 billion worth of tariffs on each other’s goods and services as outcome of talks remains unpredictable. In the midst of these developments, the oil market, to the surprise of Analysts, saw average Brent Crude fall marginally from $72.1 per barrel $71.38 per barrel representing a percentage drop of 0.94%. On the contrary, Standard and Poor’s Global Platts benchmark for finished product showed both Gasoline and Gasoil prices went up marginally by 1.24% and 0.09% respectively. Gasoline closed trading at $718.189 per metric ton, from its previous price of $709.42 per metric ton. Gasoil also saw a slight increment from $636.39 per metric ton to $636.97 per metric ton.
Local Forex
IES data collected and analyzed indicates the Cedi appreciated against the Dollar ($) within the window under review. The dollar currently trades at Ghc5.15 as against Ghc5.21 in the previous window implying a 1.15% appreciation. This will be about the third consecutive window of strength for the local currency against the U.S Dollar.
IES PROJECTIONS FOR MAY 2019 SECOND PRICING-WINDOW
Fuel prices at the pump for May 2019 second Pricing-window is not expected to change due largely to the nearly consistent strength the local currency has shown thus far. The Cedi’s appreciation against the U.S Dollar could render the marginal increment in prices of finished products on the international market negligible to be passed on to the final consumer. Whereas Gasoline went up 1.24% and Gasoil shot up 0.09%, the market could play out favourably for consumers because of the gain of 1.15% the Cedi recorded against the U.S Dollar. It is important to note that while IES anticipates prices to remain unchanged due to the above, it is possible for some OMCs to reduce their prices in order to maintain or expand their market share in line with market realities as Frimps Oil did in the last window.
Signed: MIKDAD MOHAMMED
Research Analyst, IES ([email protected])
PDS Cautions Public Against Loose Conductors
As the rains set in, the Power Distribution Services (PDS) has cautioned the public to stay away from fallen or loose electrical conductors.
According to PDS, such fallen electrical conductors may be live and, therefore, could endanger one’s life.
PDS gave the warning in a release issued to alert consumers of the possibility of some areas experiencing power outages because of rainstorm.
Experts Mull Over Eskom’s Future As South Africa Awaits IRPl
Whilst South Africans may still be relatively in the dark over the release date of the updated Integrated Resource Plan (IRP) outlining the country’s future energy plans, experts on Tuesday agreed the future of energy in South Africa will be very different.
Energy experts Ted Blom and Dr Grové Steyn, who serves on the Presidential Task Team on Eskom, partook in a panel discussion at the African Utility Week and POWERGEN Africa conference and exhibition in Cape Town covering issues relating to the future of Eskom, the planned unbundling of the utility and energy in a future with climate change.
Blom did not mince words. “Eskom’s governance has collapsed. We don’t know who is running Eskom because it certainly does not look like it is the board. All it can be is a third force,” he said.
“We simply do not know who is held responsible because it is not maintained properly and not run properly. So, in terms of Eskom of the future – it’s already dead in the morgue. All we are throwing money at is for more people to be corrupt,” he added.
Blom also called Eskom’s debt burden a “fallacy”. “They want you (taxpayers) to pay this debt but 75% of that debt is not due and that is why I have called for a forensic investigation.”
Blom said corruption and mismanagement is well entrenched in Eskom. According to him South Africans are made to believe the money (debt) is due to Eskom but more than three quarter of this monies are due to corruption and mismanagement.
He noted the Medupi Power plant as example. In 2008 the quote for building Medupi was R33 billion, he said.
“A year ago, I went back to Eskom to verify that amount and today Medupi is running at R170 billion for a half-finished project. If that is not corruption and mismanagement, then I don’t know what is and I don’t understand why we have to pay for that,” Blom stated.
Eskom in debt trap
But for Steyn the debt trap is very real. “Eskom is indeed in a debt trap. It is now being bailed out by government almost on a monthly basis and even the R23 billion allocated in the budget is not going to be enough to fill the gap and get Eskom out of the debt trap.
“So, it is quite serious, and it means we will have to start thinking outside the box and find a range of solutions to help ensure – given Eskom’s systemic role in the economy – we do not end up in a situation where we have a full on default on debt.”
Steyn also remarked on Eskom’s relevance in the future where the energy space is more competitive.
“[The] Eskom of large-scale coal-fired power stations is not the future anymore,” he said.
Steyn said as the technological economic paradigm changes, the cheapest power does not necessarily come from large coal-faced power plants but from smaller scale renewable projects.
“If Eskom is not going to be the only party generating power (in the future), what will Eskom look like? That is an important question we do not have an answer for,” he stated.
Steyn alluded to an Eskom with a changed business model. “Around the world traditional large-scale utilities have been successful in changing their business models and becoming players in the renewable energy space but that is a radical change that will require drastic changes in Eskom. The parts of Eskom that runs the grid and the distribution business, will of course continue to exist and will be very important for our future.”
Delays with the IRP
Blom in an earlier interview also took aim at the delays with the IRP which is supposed to give clearer direction on the country’s energy plans.
He labelled it a disaster. “There is too much political meddling and the plan has been rewritten and rewritten. I understand the labour sector is not happy and that is mainly because government is not transparent in how it is going about the IRP.”
Blom said the IRP should be a basic exercise and be redone annually with no big surprises. “It’s a disgusting disaster. Our future relies on it. We need certainty and transparency and not attempts to hide behind the IRP to play to secret agendas of third forces. That is not acceptable,” he said.
The African Utility Week and POWERGEN Africa conference and exhibition ends Thursday.
World Bank Bans Chinese Firm For Falsifying Power Contract In Ghana, Burkina Faso
The World Bank has imposed a 15-month ban on a Chinese company, Sieyuan Electric Co. Ltd after it emerged that the company falsified its contract in a Bank-funded in 2018.
The sanction, which was announced Tuesday, May 14, is in connection with fraudulent practices under the Inter-Zonal Transmission Hub Project, which was part of the Western Africa Power Pool (WAPP) Programme.
The Shanghai-based Sieyuan Electric Co., Ltd, (Sieyuan), specialises in research and development relating to electricity power technology.
What does this debarment mean?
The debarment makes Sieyuan and its affiliates ineligible to participate in World Bank-financed projects.
It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices, the World Bank explained in a statement.
The $111 million projects, which closed in 2018, was partly funded by a financing agreement with Ghana and was designed to improve the security and reduce the cost of the electricity supply to Burkina Faso while also increasing Ghana’s capacity to export electricity.
It was part of a program designed to establish a power-pooling mechanism to increase the affordability and reliability of electricity for citizens of the Economic Community of West African States (ECOWAS).
What did Sieyuan do?
According to the facts of the case, Seiyuan falsified its past contract experience to meet the requirements of a contract under the project, which is a fraudulent practice.
The settlement agreement provides for a reduced period of sanction in light of the company’s cooperation and voluntary remedial actions.
As a condition for release from sanction under the terms of the settlement agreement, the company commits to continue to fully cooperate with the World Bank Group Integrity Vice President.
The debarment of Sieyuan qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.
West Africa Power Pool
The development objective of the West Africa Power Pool (WAPP) program project is to establish a well-functioning, cooperative, power pooling mechanism for West Africa, as a means to increase access of the citizens of Economic Community of West African States (ECOWAS) to stable and reliable electricity at affordable costs.
There are five components to the project. The first component of the project is transmission line between Bolgatanga, Ghana, and Ouagadougou, Burkina Faso. The second component of the project is the reinforcement of transmission grid in Ghana.
The third component of the project is the electrification of rural localities along the right of way in Burkina Faso. The fourth component of the project is supervision/owner’s engineer.
The fifth component of the project is capacity building and institutional support to Ghana Grid Company (GRIDCo) and SONABEL for project implementation.
Source: myjoyonline.com
Iranian Official: Europe Can Still Buy Iran’s Oil
European firms can still buy oil from Iran as some companies don’t have interests in the United States and aren’t concerned about the U.S. sanctions on Tehran, former Iranian foreign minister Kamal Kharrazi, who is now the head of Iran’s Strategic Council on Foreign Relations, told French daily Le Monde in an interview this week.
The European companies that stopped importing Iranian oil after the U.S. re-imposed the sanctions in November seem to have decided to halt Iranian oil intake due to political reasons, according to an English translation of the Le Monde interview in Iranian outlet Mehr news agency.
“Italy and Greece stopped their purchases, while the US had granted them some waivers. This shows that those countries have made a political decision,” Kharrazi said, as carried by Mehr.
European companies, however, are wary of secondary U.S. sanctions if they trade with Iran, especially in oil, as the U.S. is seeking to bring Iranian oil exports down to zero and ended all sanction waivers it had initially extended for six months.
Last week, Iran said that it was suspending some of its commitments under the nuclear deal and threatened to resume enriching uranium to a higher level if the remaining signatories to the deal—the EU, Russia, and China—don’t fulfill within 60 days their commitments to Iran, including protecting Iranian oil trade from U.S. sanctions.
The EU and the foreign ministers of the UK, France, and Germany, responded on the day after the Iranian ultimatum that “We reject any ultimatums and we will assess Iran’s compliance on the basis of Iran’s performance regarding its nuclear-related commitments under the JCPoA and the NPT (Treaty on the Non-Proliferation of Nuclear Weapons).”
Yet, the ministers and the EU High Representative said in their statement that “We are determined to continue pursuing efforts to enable the continuation of legitimate trade with Iran, including through the operationalization of the special purpose vehicle ‘INSTEX’”—the special purpose payment vehicle that the EU set up earlier this year.
Source: Oilprice.com
One Worker Dies After Saipem Pipe-layer Blast In Caspian Sea
One worker has died following last week’s fire on the Saipem-owned pipe-laying vessel which, at the time of the incident, was operating in the Caspian Sea offshore Azerbaijan.
In a statement on Tuesday, a spokesperson for Saipem said that “one person who has been in most critical condition has passed away in the hospital of France this morning.”
The spokesperson added that no other injured worker is in life-threatening condition.
It would be recalled that Saipem’s Israfil Huseynov vessel caught fire last Wednesday, May 8, while it was working on pipelaying at the Shah Deniz II project.
The incident was related to maintenance operations on an item of equipment during pipe-laying activities.
As a result of the explosion, 14 people were injured, all employees of the Saipem Group.
Seven of the fourteen injured workers were placed in intensive care.
According to information provided by Saipem, all injured personnel was transferred on May 11 to the specialized hospitals of Turkey, Italy, France, and the UK.
Three other less injured persons – who were able to travel independently – have also reached their home countries.
The Israfil Huseynov is a pipe-laying barge owned by Caspian Marine Services. The vessel was built in 1988 in Mantyluoto, Finland.
Source: offshoreenergytoday.com
Ghana To Sell Gas To Ivory Coast
Ghana is considering entering into gas sale agreement with its West African neighbour, Ivory Coast.
In view of this, the Ministry of Energy would, in the coming days, despatch a delegation to Ivory Coast to hold discussions with the Ivorian authorities on the issue.
Minister for Energy John-Peter Amewu gave the hint when he addressed Ghanaians in Houston, Texas, USA, during a Town Hall Meeting.
The Minister used the occasion to explain to Ghanaians in Houston the state of the country’s energy sector before the current administration took over, and how it has managed to stabilise the power situation.
Sources at the Ghana National Gas Company (Ghana Gas) told energynewsafrica.com that the company is in the process of constructing 50km gas pipeline from Atuabo Gas Processing Plant, which is east of the Ivory Coast border for gas supply to Ivory Coast.
Sources at Ghana Gas said the country is expected to export between 50-100mmsfd of gas to Ghana’s West African Francophone neighbour.
Ghana Gas is currently operating at full capacity, after it upgraded its Takoradi Regulating and Metering Station to 405mmscf.
Aker Energy Holds Career Fair In Houston, USA
Aker Energy, a Norwegian oil firm which is operating in the West African nation, Ghana, held a Career Fair on the sidelines of the just ended Offshore Technology Conference (OTC) in Houston, Texas, USA.
The Fair was attended by Ghanaian students in Houston, who are pursuing engineering courses as well as some members of the Ghanaian Delegation to the OTC.
The objective of the Career Fair was for Aker Energy to walk the participants through what Aker Energy has been doing and the opportunities available for indigenous Ghanaians.
In a welcome address, Mrs Bernice Sam, who is the External Affairs Manager at Aker Energy, said the company is committed to building expertise and competencies in Ghana by doing several things.
She highlighted some of the initiatives Aker Energy had undertaken since it started operations in February 2018.
“First, we are integrating the ideals of the local content laws in our operations through initiating measures that widen the pool of suppliers to include indigenous companies.
“Second, we have a partnership with the Ghana National Petroleum Commission to engage ‘Secondees’ in our offices in Ghana and Norway as part of the exchange of knowledge and technology. Third, we have national service personnel who support the different units in the Ghana office.
Lastly, we have recently initiated an internship programme for graduates of universities in Ghana.”
According to her, Aker Energy believes in expanding its human resource to attract the best in the industry.
“It is, therefore, appropriate that we share our vision with a larger audience such as represented here this evening, with the expectation that experts in the diaspora and Ghanaians at this fair will find Aker Energy attractive to want to join our team,” she said.
The Finance Manager, Emmanuel Armah, and and Mrs Efua Nkrukah, the Human Resource and Administrative Manager at Aker Energy, also took their turn to address the participants and answered questions from them.
Fuel Tanker Crashes Motor Rider To Death In Tema
The deceased
Report reaching energynewsafrica.com has it that a fuel tanker has crashed a motor rider to death at the traffic intersection near the Tema Oil Refinery (TOR).
An eyewitness, who gave his name as Edward, told this portal that the incident happened at about 10:30am Tuesday morning.
According to him, the driver of the fuel tanker, after crashing the motor rider, sped off but was pursued by some people around the area, who later apprehended him and confiscated the vehicle.
The deceased, whose name is not yet known, is still lying in the area, as the police are yet to arrive at the scene to convey the body to the morgue.
Meanwhile, the driver is still in the grips of the citizens who arrested him.
ENI Makes Light Oil Discovery Offshore Angola
Italian oil company,ENI, has made a new light oil discovery in Block 15/06, in Angola’s deep offshore.
The well was drilled on the Ndungu exploration prospect.
According to ENI’s statement on Tuesday, the new discovery is estimated to contain up to 250 million barrels of light oil in place, with further upside.
The Ndungu-1 NFW well is located a few kilometers from ENI’s West Hub facilities, and has been drilled by the Poseidon drillship in a water depth of 1076 meters and reached a total depth of 4050 meters.
The Poseidon drillship was previously owned by Ocean Rig until the driller was acquired by Transocean in December 2018. The drillship started working for Eni in Angola in November last year following a drilling campaign in Namibia where it had drilled for Chariot and Tullow. Eni hired the Poseidon for a firm four-well program.
Eni said that the Ndungu-1 NFW proved a single oil column of about 65 meters with 45 meters of net pay of high quality oil (35° API) contained in Oligocene sandstones with excellent petrophysical properties. The result of the intensive data collection indicates a production capacity in excess of 10,000 barrels of oil per day.
Ndungu is the first significant oil discovery in Angola inside an already existing Development Area. It certifies the concrete validity of the recent legislation, promoted through the Presidential Legislative Decree No. 5/18 of 18 May 2018, which defines a favorable legal framework on additional exploration activities within existing Development Areas.
Being located about 2 km from the Mpungi field, the new discovery can be fast-tracked to production due to the proximity to the subsea production system. Production will be routed to the N’goma FPSO, therefore extending the West Hub’s production plateau, Eni explained.
Ndungu is the fourth discovery of commercial nature since the Block 15/06 Joint Venture re-launched its exploration campaign in mid-2018. It follows the discoveries of Kalimba, Afoxé and Agogo; the four discoveries altogether already estimated to contain up to 1.4 Billion barrels of light oil in place. The appraisal phase of these discoveries will target their additional upside.
To remind, ENI announced “a major oil discovery” in Block 15/06, in the Agogo exploration prospect, in Angola’s deep water in March 2019.
ENI said that these important discoveries further demonstrate the upside potential of the block and the effectiveness of the proprietary technologies that ENI used and will use to explore Block 15/06.
The Block 15/06 Joint Venture, composed by ENI (operator, 36.8421%), Sonangol P&P (36.8421%) and SSI Fifteen Limited (26.3158%), will work to fast track its development.
Source: Offshoreenergytoday.com
Oil Tanker Collision In Houston Causes Leak, Closes Critical Port
A collision between an oil tanker and a tug boat in the Houston Ship Channel on Friday caused a capsizing and an oil derivative leak.
The tug boat, according to reports, was moving two barges, one of which capsized as a result of the collision.
The two vessels were carrying a combined 25,000 tons of reformate. This is a by-product of oil refining that is used in the production of gasoline.
According to the most recent report from the Houston Chronicle, some 9,000 barrels of reformate was spilled in the waterway and cleanup is continuing.
According to estimates made by port officials, the cleanup and the removal of the fuel from the barges’ tankers will take around two days.
So far, the oil spill response crews have deployed 3,800 feet of boom around the barges and another 12,000 feet of boom in surrounding areas to protect the ecosystem while the cleanup continues.
The Houston Ship Channel was closed after the collision but was reopened on Sunday after an official from the Texas General Land Office’s oil spill prevention program said the water was not dangerous for humans even though there had been several reports about dead animals in the vicinity.
The cause of the collision is yet to be established but whatever it is, the cost for Houston Port will be high. The port is one of the busiest in the United States and every hour it remains closed carries a hefty price tag.
The Houston Chronicle reports the accident will be investigated by the National Transportation Safety Board and that it will be the fifth accident the NTSB will investigate in the Houston Ship Channel in five years.
One of these, in 2014, resulted in a spill of 168,000 gallons of bunkering fuel and the other, a year later, led to a spill of 88,000 gallons of a gasoline additive. Both accidents followed tanker collisions.
Source: Oilprice.com
Lekoil Withdraws Legal Action In Nigeria Over Offshore Block
Nigerian oil company Lekoil will drop legal action against the Nigerian oil ministry in relation to its acquisition of a stake in an offshore block from Afren.
As previously reported, Lekoil, which holds an unconditional 17.14 percent interest in the OPL 310 located in shallow water offshore Lagos, in 2016 bought an additional 22.86 percent interest, from Afren Oil & Gas.
The company, however, has not been able to formally complete the acquisition, as it has not received a response from the Ministry of Petroleum Resources, despite seeking one in 2016.
In March 2016, Lekoil was notified by the Ministry of Petroleum Resources that the necessary due diligence exercise would be conducted that month. The due diligence exercise did not take place and had not been rescheduled by the Department of Petroleum Resources since then.
This led Lekoil to go to court to speed up the process and preserve its license rights.
Lekoil then went to court in 2019. The court in March 2019 ruled that Lekoil’s acquisition of OPL 310 stake had been “inchoate based on the fact that Consent is pending,” meaning that the 22.86 percent participating interest in OPL 310 is still held by Afren until ministerial consent is granted.
Lekoil at the time said it believed it had strong grounds to appeal against this judgment by the Federal High Court; and intended to file a notice of appeal, and a stay of execution of this judgment with the court.
Legal action dropped
Lekoil said on Tuesday that it had received a letter from the Ministry of Petroleum Resources relating to an application for an extension (re-award) to the OPL 310 license.
According to Lekoil, the Letter notes that the OPL 310 license expired on February 10, 2019, “and ownership of OPL 310 has accordingly reverted to the Government in line with Petroleum Act.”
The letter further sets out, Lekoil says, that the re-award will not be considered by the Honourable Minister of Petroleum Resources until such point as the suit filed by Lekoil against the minister is withdrawn by Lekoil and other parties to the action.
Furthermore, the letter says that failure by Lekoil and others to withdraw the suit within thirty (30) days of the Letter – which was dated 8 May 2019, but received by Lekoil on 13 May 2019 – forecloses any consideration of re-award to Optimum Petroleum Development Limited, Lekoil and their affiliates or subsidiaries.
“The company has decided to withdraw legal action. The company will also continue engagements with the regulator and Optimum Petroleum Development Company Limited, the operator of OPL 310, to conclude agreements and resolve all outstanding issues. Further updates will be provided as and when necessary,” Lekoil said.