Qatar Out Of OPEC: Implications For Qatar, OPEC, And The Global Petroleum Market
Saad Sherida Al-Kaabi, Qatar’s Energy Minister
For some it is such a big news, but for others it is no news at all ― the decision by Qatar to pull out of the Organization of Oil Exporting Countries (OPEC) effective January 2019, after nearly six decades.
While many industry watchers links Qatar’s quitting decision to feud with the Saudi Arabia-led group, Doha is suggesting that it is technical and strategic rather than geopolitical. In communicating its decision to OPEC on 3rd December 2018, Qatar’s Energy Minister Saad Sherida Al-Kaabi said Doha’s decision is not borne out of the political and economic sanctions imposed on the country by Saudi Arabia, Egypt, Bahrain, and the United Arab Emirate (UAE) for allegedly sponsoring terrorism and fueling instability in the Gulf.
Al-Kaabi suggested that the decision to pull out was rather strategic in nature; to focus more on natural gas production and export activities to improve its global position as the leading natural gas producer. He stressed that achieving Qatar’s ambitious strategy will undoubtedly require efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading Liquefied Natural Gas (LNG) producer. The plan is to increase production by 43% to reach 110 million tons per year (mtpy) by 2024, by leveraging the existing massive, world-class infrastructure and valuable synergies available both inside and outside the State of Qatar.
However, doubts still remain that Qatar’s decision isn’t politically influenced, in the sense that it did not need to quit OPEC to achieve the stated goals as there are currently no OPEC restriction on gas production. Aside that, the costs of the cartel’s membership were not greatly burdensome for the Qatari government in any way.
OPEC’s Influence
Formed in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid, OPEC also sought to prevent its concessionaires; the world’s largest oil producers, refiners, and marketers (called the Seven Sisters at the time) from lowering the price of oil, which they had always specified, by gaining greater control over the prices of oil through the coordination of their production and export policies. And in the course of the 1970s OPEC members succeeded in securing complete sovereignty over their petroleum resources, with several of its members nationalizing their oil reserves and altering their contracts with major oil companies.
Saudi Arabia occupies the traditional role as the “swing producer” as a result of its spare capacity to stabilize oil markets, making it the de facto leader among the 14 member states ― Libya, Algeria, Nigeria, Ecuador, Gabon, the United Arab Emirate, Angola, Congo, Equatorial Guinea, Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Historically, the group accounted for more than 40% of the world’s crude oil production, and was credited for exporting nearly 60% of the total petroleum traded internationally. Consequently, OPEC’s huge spare capacity that could be easily adjusted to suit the condition in the global oil markets, coupled with its significantly low cost of production, allowed it to exert strong influence on crude oil prices on the international market.
One of the many notable occasions that OPEC had changed the direction of oil prices in its favour, is the Arab-Israeli War in 1973 – 1974, where OPEC’s Arab members imposed an embargo on the United States (U.S.) over its support of the Israeli military; shifting the oil market from a buyer’s to a seller’s market.
While some experts believe that OPEC is a cartel by reason of collusion, though it has not been equally effective at all times; others have however concluded that it is not a cartel, and that it has little, if any, influence over the amount of oil produced or its price. They emphasize the sovereignty of each member country, the inherent problems of coordinating price and production policies, and the tendency of countries to cheat on prior agreements.
Today, some experts are suggesting that the power of OPEC has waxed and waned since its creation in 1960 and is likely to continue to do so, so far as its share of world oil production declines, and the re-emergence of the U.S. as a top oil producer keeps flooding the oil market. However, the group’s recent collaboration with Russia where prices surged upward with the implementation of the production-cut policy, may be another signal of OPEC’s relevance.
Implications for Qatar’s Exit
Today, Qatar is out of OPEC because of the need for “technical and strategic” change, according to Doha. The country finds it sensible to concentrate on LNG which Qatar is better at producing, rather than being part of a group that only deals with oil.
Qatar also sees it as impractical to put efforts, time and resources in an organization that it plays a small role and have little say in what happens. This view was reinforced by UAE’s Minister of States twitter post that “the political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in the light of its political isolation”.
But whatever be the rationale, it is worth analyzing the implications of Qatar’s withdrawal from the body OPEC; for Qatar, OPEC, and the wider oil and gas market.
First, Qatar’s pronouncement to leave the group makes little difference on OPEC decisions, in mathematical or economic sense. Compared to Saudi Arabia that produces close to 11 million barrel of oil per day (bpd), Qatar’s oil production capacity is around 609,000 bpd, which makes Doha the 11th largest producer in the then group of 15 members. Analysts agree that Qatar’s production capacity which is less than 2% of the combined OPEC output, is insignificant to have any meaningful impact on the decision making process of the group. In any case, Qatar has no spare capacity given the maturity and small size of its oilfields, and that it was exporting less than its production quota at the time of exiting the group.
Second, as a long standing member of the cartel, Qatar’s decision to exit the group is a symbolic loss; to the extent that it exposes OPEC’s growing weaknesses, and how its influence on the global oil market is waning. It raises the possibility of the end of the cartel, as smaller members considers their position in the longer term, based on the feeling that they are increasingly marginalized when it comes to decision-making.
Lately, it has taken Russia and other non-OPEC countries for the cartel to remain relevant, as it has largely failed on its own to influence oil prices. And the mere fact that it has to rely on non-OPEC members like Russia and Azerbaijan to wipe some barrels off the market, suggest that the group is having difficulty maintaining its authority on the global oil market. Meanwhile, the U.S. has also emerged as a force to reckon with on the global market, further disrupting OPEC’s capability to unilaterally influence supply and prices.
Third, Qatar’s exit from the group could have implications for regional politics, and cost Qatar some political leverage. Although Doha denies that its decision is not linked to the political and economic embargo, some analysts sees it as a reflection of deepening regional division. Some industry watchers are warning that it could cost Qatar some geopolitical leverage as it pulls out of the group; arguing that having a seat and say at the table of OPEC ministers offer countries substantial powers on the global level.
Fourth, the exit of Qatar could be a signal to other member countries that they are better off without OPEC, given the unilateral decisions of Saudi Arabia in recent times. And if that should happen, it would have a huge impact on the oil market; leaving no control over supply as each country could produce as it pleases, especially members of OPEC from the Middle East. Keeping global supply high may be good for low oil prices, but could also deter further investment in the oil market.
Fifth, given that the Trump Administration has been pushing hard to keep oil supply high and prices low, for which it has been very vocal in its opposition to OPEC production quota, Qatar’s exit relieves it from this dispute. By distancing itself from the group, it protects the country and its U.S. investment if the U.S. Congress ever does pass the anti-OPEC legislation, which has reared its head again in recent times.
Lastly, with a current capacity of 77 million tonnes per year (mtpy), natural gas remains Qatar’s main economic engine; accounting for more than 70% of government’s total revenue, over 58% of gross domestic product (GDP), and some 85% of total export earnings. Therefore Doha’s decision to concentrate on its core business of producing and exporting more natural gas would not only enable it consolidate its position, using natural gas as an increasing global lever and placing the country beyond any of its LNG exporting rivals; but it would equally boost its economy by increasing export earnings. Also, as a driving force in the creation of Gas Exporting Countries Forum (GECF) in 2001 with secretariat in Doha, Qatar will have more prominent role on the gas side of petroleum as GECF evolves into a cartel.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security ©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 resource to many global energy research firms, including Argus Media.
Ghana: Close Down Recalcitrant Fuel Stations-COPEC
Duncan Amoah, Executive Secretary of COPEC
The Chamber of Petroleum Consumers (COPEC) in the West African country, Ghana, is calling for the closure of some outlets of the Oil Marketing Companies, which were indicted for under-delivering fuel to its consumers, but have failed to correct the anomaly.
According to COPEC, the recalcitrant fuel outlets should not be allowed to operate until they corrected the anomalies detected by the Ghana Standards Authority.
It would be recalled that the Ghana Standards Authority on 9th June, 2019, issued a report that some 10 fuel retail outlets were in the business of short-changing their customers.
The report mentioned Allied Service Station at Sakaman, Total Service Station at McCarthy Hills, Goodness Service Station at Amanfrom, Goil Service Station-Mile 11, Goil Service Station at Amanfrom, Shell Service Station at Motorway Extension, Shell Service Station Amanfrom, Frimps Oil Service Station at Amanfrom, Glory Oil Service Station at Spintex Road and Frimps Oil Service Station at Spintex Road.
However, addressing a news conference in Accra, Executive Secretary of COPEC Mr Duncan Amoah said their recent visit to the aforementioned fuel retail outlets after the GSA’s report, revealed that some of the stations have taken correctional steps to address the issues the Standards Authority raised while others had failed to comply.
The Goodness Service Station at Amanfrom, he noted, seemed to have changed nothing as far as the availability of the mandatory 10 litre can for customers is concerned.
The Shell Service Station at Amanfrom, similarly, was found in a ‘disappointing’ state.
Aside the unavailability of the 10 litre can, the general sanitary conditions were nothing to boast of and it had no functioning fire extinguishers at the time of visiting, they stated.
“Our roving team, together with the media, visited the Goodness Service
Station at Amanfrom, following the publication of the GSA inspections, but sadly, nothing seems to have changed with this particular station.
“The mandatory 10 litre can which should be available upon demand by the customer was not available and, thus, difficult to ascertain if any corrective measure had been put in place to protect the consumer”, he noted.
About the Shell Service Station at Amanfrom, he said, “is perhaps, the most disappointing of all the visits from the GSA inspections and indictment. This said station, for the record, looks nothing like the regular Shell Stations or outlets and must immediately be closed down, as general sanitary conditions in and around the station were pretty poor and shambolic; no 10 litre can on demand, fire extinguisher clearly empty and lying in a bucket of refuse at the forecourt.”
COPEC, per its findings, therefore, called for the immediate shutdown of both stations as their operations posed more harm to consumers than good.
“We recommend the owners or operators of this particular station (Goodness Service Station) to immediately halt selling to the public, or shutdown this particular outlet and ensure the right things are done to forstall any further shortchanging of the unsuspecting public as duly captured by the GSA,” COPEC said.
They further asked “managers of the Shell brand to immediately dissociate from the said station as it only poses a disgrace to the brand.”
They also cautioned the general consuming public to also boycott this station till effective maintenance and repair works were done.
On Frimps Oil Service at Amanfrom, COPEC said “generally, the station was well kept but clearly under dispensing. As well, all four pumps we randomly sampled gave lower volumes with the 10 litre can, but this lower volume is compensated by the said outlet also being the lowest price service station such that if one added the savings made from buying from the said station, the new volumes now exceed those of the others on the market.”
Compensation
Mr Duncan Amoah said his outfit intends to push for approximate and adequate compensation for all customers of the above mentioned stations.
According to him, the modalities of this compensation would be jointly determined by the affected stations and key stakeholders, stressing that failure do so would compel the affected persons to seek legal redress at the law courts.
He argued that it would be fair if the customers were compensated.
Call To Report Wrongdoers
Duncan Amoah advised the public to volunteer any useful information on any negative or bad practices from any service station across the country, in order to curtail this negative trade that has bedeviled some operators in the petroleum downstream sub-sector.
“We further assure the general public of a continuous unannounced spot visits to all the various stations across the country, and will not hesitate to draw the attention of regulators and the public to any such stations that will be subsequently found to be selling fuel without the mandatory dispute resolution device or the 10 litre can boldly be displayed at the forecourt.”
Ghana: Hold Tariff Hikes For 3 Months – Chamber Of Commerce Appeals
The Ghana Chamber of Commerce in the West African country, Ghana, has appealed to the Public Utilities Regulatory Commission (PURC) to suspend the immediate implementation of the upward review of tariff hikes in the country.
The utilities regulator on Friday, approved 11.17% increment in electriciry tariff, effective July 1,2019.
Speaking to Accra based Starr FM, the Chief Executive of the Chamber of Commerce Mark Aboagye said the time between the upward review of tariffs and implementation is too short for industry to adjust.
“The increment has shaken the foundation of most businesses. I think the PURC should gives businesses not less than 3 months to adjust. There are some companies that pay about Ghc 1 million per month as electricity bill. Some even pay more. I think the PURC is not being fair to businesses. 9 days is not enough time to adjust,” he bemoaned.
The PURC has however explained the review was done taking into considerations the various factors prevailing in the economy currently.
“For the tariff review, the exchange rate that we use is 5.05 and you know that this is the kind of exchange rate that we have on the market. The rate of inflation has gone up. The price build up for electricity tariff, you have the forex component and the cedi component.
“For the forex component, you need to adjust when the exchange rate is low otherwise there will be under recovery…so if you look at these two that alone is enough to justify the increase that has just been announced…also the fact that tariff were reduced didn’t mean that tariff were never going to be increased again,” Chairman of the technical committee of the PURC, Ishmael Agyekumhene said.
Source: Starrfm.com.gh
Article: Boosting Energy Access, Security In West Africa Through Regional Cooperation
Paa Kwasi Anamua Sakyi, Executive Director for Institute for Energy Security(IES)
The developed part of the globe have found reliable and affordable energy as an enabler to goods and services that has enriched and extended lives. And for developing countries, the need for consistent supply of affordable energy is more vital to modernizing agriculture, increasing trade, empowering women, saving lives, improving transportation, expanding industries, and powering communications; serving as building blocks for escaping poverty and enriching lives.
However, access to energy in developing countries especially in sub-Saharan Africa (SSA) remains disappointingly low. According to the International Energy Agency (IEA, 2017) 590 million people, representing roughly 57% of the population, remain without access in SSA; making it the largest concentration of people in the world without electricity access as efforts have often struggled to keep pace with population growth. And over 80% of those without electricity live in rural areas, where the electrification rate is less than 25%, compared with 71% in urban areas.
In 2016, only eight countries were listed as having an access rate above 80% – Gabon, Mauritius, Reunion, Seychelles, Swaziland, South Africa, Cape Verde and Ghana; while most countries had a rate below 50% and some had a rate of below 25%.
Of those without access to electric energy in sub-Saharan Africa, West Africa is reported to accounts for 30%. Putting the average access rate across West Africa at 52%, with Ghana being one of the most successful countries in the sub-region in expanding access.
Energy access is defined by the IEA as “a household having reliable and affordable access to both clean cooking facilities like liquefied petroleum gas (LPG), and to electricity; which is enough to supply a basic bundle of energy services initially, and then an increasing level of electricity over time to reach the regional average. The body sees it as the “golden thread” that knits together economic growth, human development and environmental sustainability.
Access to modern energy has been described severally as the missing Millennium Development Goal (MDG), as energy services can contribute to a large extent to the attainment of all Sustainable Development Goals (SDGs). The lack of access to modern energy (part of SDG 7) is seen as an impediment to a country seeking to tackle the numerous challenges that it is confronted with, such as food production and security (SDG 2), poverty (SDG 1), delivering quality education (SDG 4), adaptation and mitigation of climate change (SDG 11), and gender inequality (SDG 5).
From Access to Security
Providing energy access to the growing sub-Saharan Africa population, however, is not enough to ensure economic and social development; especially at such a time of global market uncertainty. Countries must therefore advance from energy access to energy security which is described as a vital condition in which an energy system can function optimally and sustainably; free from risks and threat.
Energy security may be defined differently by many authors from contextual views, but the varied definitions are however based on the premises of sufficient and reliable supply of energy at affordable prices in centralized energy supply systems. It must therefore be a non-negotiable pursuit for any country or a region, due to the key role of energy in the functioning of the modern society.
Energy security is among the priority targets for industrialized states, and for countries that hope to advance development. And that serious economies are putting energy security at the forefront of thinking, given the considerations about climate change, energy market volatility, geopolitical influences, and energy price deregulation. The step is an attempt to escape energy poverty which takes different forms, including a lack of access to modern energy services, a lack of reliability when services do exist and concerns about the affordability of access.
Regional Cooperation
The concept of regional cooperation have been embraced by a large section of states in Africa and the world over as Regional Economic Communities (RECs) with diverse scope and membership. It is expected to serve as catalyst for amplifying regional cooperation and policy coordination in vital areas specific to the member states through a collective action.
The advantage derived from regional economic integration are several, with the most riveting being the need to create partnerships that would enable the countries involved the chance to compete remarkably on the international market.
Taking into consideration the splinter and undiversified nature of most African economies combined with their small size, regional collaborations are crucial to reposition African economies in participating actively on a world scale, giving them more appreciable leverage to bargain effectively for market access and to reduce the effects of marginalization and unfair competition.
Beyond the expanded market, regional integration results in increased continental trades, strengthened security and conflict resolution within the region, and the free movement of people across the region. And while reducing the demand for third-party international imports, regional integration potentially attracts significant Foreign Direct Investment (FDI) from both within the region and from abroad, due to the enlarged market and product rationalization.
Sub-regional Power Market
In the context of Africa, one of the reasons for which the many regional economic communities have largely failed to be effective, is as a result of the resources similarities which makes it difficult for the member States to trade effectively.
However when it comes to electric energy, while West Africa is grappling with similar and multiple challenges; it is endowed with varied energy resources. And so, the countries in the sub-region have a range of energy opportunities to collaborate on to deepen its access to energy and ensure energy security. The economically sound allocation of its energy resources is likely to be more efficiently accessed and distributed using regionally integrated energy planning and trading.
Power pooling is becoming a normal trend in developing regions, with the creation of efficient sub-regional power markets expected to achieve economies of scale while ensuring that demand-supply complementarities are not laid waste.
Examples of power pooling in Africa includes the Eastern Africa Power Pool, and the Southern Africa Power Pool made up of Zambia-Tanzania-Kenya interconnection. But these co-operations has traditionally been on bilateral and cross-border trades.
West Africa is also seeking a shift in trading terms with the formation of the West Africa Power Pool (WAPP), aimed at integrating the operations of national power systems into a unified regional electricity market. The intention is to assure a stable and reliable electricity supply at a competitive rate; and through long-term energy sector cooperation, unimpeded energy transit and increasing cross-border electricity trade.
The creation of the regional power market may come in the form of inter-country cooperation on building energy infrastructure, conducting joint prospecting for reserves, power trade, and technology development et cetera.
The inter-country trade and exchange of electric power makes both economic and logistic sense as it may be more favorable for the border regions of one country to source for power from a power station close by in a neighboring country than a far off station within the country’s boundary. More so, electricity cannot be stored, hence supply and demand need to be efficiently managed.
Key Benefits
Two vital benefits that could be derived from the regional power market are the prospects of effectively utilizing inequitably distributed fuel resources, and scaling the funding gap.
Internalizing Fuels: By internalizing the fueling of power plants in West Africa, the sub-region can achieve higher ranking of price steadiness, and mitigate the risk that comes with depending on external sources.
While hydro, oil and natural gas has been the leading fuels for power plants in the region; uranium, coal, cobalt, and the likes are becoming indispensable to countries that are working towards their primary energy supplies.
Aside crude oil and natural gas, West Africa boosts of vast deposit of coal and uranium in the region. And since thermal power plants are challenged with the problem of insufficient gas supply and expensive crude oil, just as hydropower plants are confronted with low water levels; West Africa could therefore commit to harnessing a large part of its electricity generation from coal and uranium as basic fuels on a regional scale, applying technologies to manage any harmful environmental effect that may be associated with their use.
Scaling the Funding Obstacle: Apart from mitigating against power shocks and relieve shortages, the regional approach of grid connection affords the opportunity to some countries that on their own cannot attract private funding in the electricity market, and benefit from projects implemented on regional scale.
Presently, few financial instruments exist, particularly in sub-Saharan African countries; to improve the limited access, high operational cost, and poor service quality of energy. And the existing bilateral and multilateral funding channels for energy infrastructure are in short supply. Consequently, nearly all African countries are earnestly requesting for private sector funding for power projects. However, it is increasingly becoming difficult to access the needed investments due to political risk, microeconomic instability, poor governance structures, and institutional weakness in the developing economies.
Cooperating on regional basis in energy infrastructure projects to pool power, offers one sure way of scaling some of the challenges associated with attracting private sector funding to improve on energy access and energy security.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas M anagement, 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.
Mozambique Secures $420m Grants For Transmission Upgrades
The World Bank Group has approved $420 million in grants to strengthen Mozambique’s energy transmission system.
The grants will be issued through private sector investments to modernize the country’s energy transmission capacity for domestic and regional markets.
The grants will also help expand the country’s energy generation capacity.
Furthermore, the project is to be co-funded by a $24 million grant from a Norwegian Trust Fund.
Mozambique will use the grants to finance its Temane Regional Electricity Project (TREP), which includes the construction of a 563km high-voltage line between Maputo and Vilanculos/Temane.
A 400MW combined cycle gas-to-power generation plant at Temane will also be constructed.
The project will enable private investment of around $750 million for generation.
“In addition to enhancing the transmission and generation capacities, the TREP will finance technical studies in support of regional power integration and renewable technologies in power system planning and operation. It will also support studies on power sector investment plans, including Mozambique’s role in regional trading”, indicates Zayra Romo, the project’s senior energy specialist and task team leader.
“It is also fundamental to developing the Mozambican domestic power system, expanding energy access, and ensuring the secure, affordable, and sustainable power supply that is one of the key drivers of Mozambique’s economic and social development”, said Mark R. Lundell, the World Bank Country Director for Mozambique.
“The Temane project is key to increasing opportunities for power trade among SAPP countries. Despite the abundance of energy resources in the subregion, lack of cross-border interconnections remains a major constraint. The full integration of SAPP countries’ power systems and more power trade could bring savings of $42 billion in investment and operating costs till 2040. The Bank is committed to helping southern Africa realize these potential savings”, said Deborah Wetzel, the World Bank Director for Regional Integration for Africa, the Middle East and Northern Africa.
Ghana: Tariff Increment Will Help Us To Complete Our Stalled Projects-GRIDCo CEO
Jonathan Amoako- Baah, CEO of GRIDCo
The Chief Executive Officer of the Ghana Grid Company (GRIDCo), a power transmission company in the West African country, has explained that the 11.17% increment in electricity tariff will enable them to raise some revenue to continue their projects which were stalled because of lack of funds.
Mr Jonathan Amoako-Baah said the lack of funds has stalled most of their project.
The utilities regulator, Public Utilities Regulatory Commission (PURC), announced 11.17% increment in electricity tariff on Friday.
The decision followed extensive stakeholders consultations with proposals from Electricity Company of Ghana(ECG), Ghana Grid Company(GRIDCo), Northern Electricity Distribution Company (NEDCo), Power Distribution Services (PDS) Ghana Limited, Volta River Authority (VRA) and Enclave Power Company.
Speaking in an interview with energynewsafrica.com via telephone, Mr Amoako Baah, who welcomed the increment, however, said they had expected more, but explained that they would accept the 11.17% for the time being.
“We will console ourselves with it,” he said.
In his view, he noted that increasing utility tariffs was not what they were mostly concerned about, but rather the ability for consumers.
Touching on how the increment could help, he said the increment would bring them relief, for they would be able to continue the 330kV transmission line from Kumasi to Kintampo, which has stalled because of lack of funds.
He added that it would help them to work on the 161 kV transmission line from the Volta Substation in Tema to Achimota so that transmission losses occurring on that line would be reduced.
“We will also be able to strengthen our transmission lines in the Western Region, especially the transmission line from Tarkwa to Prestea.
Ghana: EU Supports Energy Commission With €30million To Implement Energy Efficiency Programme.
The European Union (EU), through Agence Francaise De Development (AfD), has made available 30 million Euros to the Energy Commission for the implementation of energy efficiency and renewable energy projects under Sustainable Use of Natural Resources and Energy Finance Programme (SUNREF) in the West African country, Ghana.
The funds would be lodged with some selected Ghanaian financial institutions which would, then, provide green credit loans to industries to enable them finance their small and medium scale renewable energy and energy efficiency projects.
The SUNREF Ghana programme, which emanated from the conclusion of a feasibility study financed by AFD, which highlighted the urgent need for investments in renewable energy and energy efficiency, is expected to promote the development of a low carbon economy by financing the development of renewable energy and energy efficiency solutions.
At a brief signing ceremony at the Energy Commission’s head office in Accra on Friday, the French Ambassador to Ghana, Her Excellency Mrs Anne Sophie Ave, and the EU Ambassador to Ghana, H.E Mrs Diana Acconcia, highlighted the main features of the SUNREF programme.
The programme focuses on three pillars namely credit lines financed by AFD of up to 30 million with local banks, a technical assistance facility with support from the European Union-Africa Infrastructure Trust Fund (EU-AITF) of 2 million and investment grant scheme of 2.4 million to provide additional incentives to green investments.
This intervention from AFD forms part of an integral part of the mandate of the Energy Commission in the promotion and development of renewable energy and energy efficiency initiatives in the country.
Additionally, SUNREF would offer a platform, under the TAF, to build the capacity of Energy Commission, key stakeholders and partner banks of advanced technologies and method, allowing them to offer better advice and products to their customers.
The outcome of these projects would immensely contribute to reduction in energy consumption by up to 7GWh yearly, and increase the shares of RE in the overall energy mix, and, consequently contribute to reduction of carbon dioxide emissions.
Zimbabwe: Gov’t To Pay South Africa’s Eskom US$10m In Bid To Ease Power Shortage
Zimbabwean government has disclosed that it will this week pay US$10m to South Africa’s power utility Eskom as part of plans to unlock at least 400MW to ease power shortages in the country.
The southern African country, which according to power utility Zesa was producing 1200MW as of Sunday, needs at least 1700MW per day to meet demand. Over the years it has relied on Eskom and Mozambique’s HCB for additional power.
However, a combined debt of US$83m to the two entities had meant limited supply of just 50MW from each.
Speaking during an informal briefing on Sunday, Zimbabwean Finance Minister Mthuli Ncube told journalists that “we will be paying Eskom US$10m this coming week.”
He said this (payment to Eskom), as well as negotiations government had had with the Mozambican government last week, will ease load shedding which had gone up to stage 2, or 19 hours without power.
Meanwhile more and more Zimbabwean companies are turning to off grid power supplies with solar being the preferred alternative.
Crocodile breeder Padenga Holdings is close to self sufficiency and has put up solar plants producing 1MW.
Telecomms giant Econet Wireless in April commissioned a 466KW solar power plant at its Willowvale industrial complex in Harare, the largest commercial and industrial carport and roof mount installation of its kind to be deployed in the country.
Old Mutual is also working on plans to install solar panels on the rooftop all its buildings with several having gone through the process.
Platinum miner, Zimplats also said it is conducting feasibility studies to put up a solar plant that will cater for its energy needs.
A technical partner has already been engaged to conduct a feasibility study for a solar farm believed to be able to provide 160MW.
Mozambique To Keep TechnipFMC Busy
Anadarko Petroleum’s Mozambique Golfinho/Atun development is going to keep TechnipFMC very busy. The company has been awarded a number of subsea contracts by Anadarko Mozambique Area 1.
TechnipFMC was awarded a major EPCI contract for the subsea hardware system through its wholly owned UAE incorporated subsidiary, Technip Middle East FZCO.
TechnipFMC will execute the offshore installation scope with its consortium partner Van Oord, through their wholly owned UAE incorporated subsidiary, Van Oord Gulf FZE, and in cooperation with strategic major subcontractor, Allseas.
In addition, it was awarded separate contracts under its wholly owned US incorporated subsidiary FMCTI (FMC Technologies Inc.), to provide subsea hardware in support of well construction and the EPCI scope.
Arnaud Pieton, President Subsea at TechnipFMC, stated “We are extremely pleased to have been selected for the majority of the Mozambique LNG subsea scope. TechnipFMC will execute its scope utilizing our integrated model (iEPCI TM ) and will highlight our industry leading subsea capabilities to help maximize Anadarko’s overall project value. This award is a testament of our 25-year partnership with Anadarko and will further expand our presence in Mozambique.”
Further to these awards, TechnipFMC and Allseas have entered into a Strategic Collaboration Agreement aimed at jointly pursuing specific deepwater projects where the assets, products and capabilities of both companies are complementary. This Strategic Collaboration will give both companies an enhanced access to world-class opportunities. It will allow our clients to benefit from the unique joint capabilities and integrated delivery assurance of TechnipFMC and Allseas on their most ambitious projects, such as Golfinho.
In support of these awards, TechnipFMC is increasing its footprint in Mozambique and opened a new office in Maputo, Mozambique, in February 2019. Through extensive cooperation agreements with local universities such as UEM and Uni Lurio, TechnipFMC will offer unique training opportunities to young Mozambican engineers that will continue building on our local expertise.
Source: petroleumafrica.com
Nigeria: Oil Flows Hit 2.32 Million BPD
Melo Kolo Kyari is the newly appointed Nigeria National Petroleum Corporation (NNPC) GMD,
Nigeria’s daily oil production has hit 2.32 million bpd, the country’s National Petroleum Company has revealed.
The former Group Managing Director of NNPC, Maikanti Baru, revealed this recently to a delegation of the Nigerian Union of Journalists (NUJ) in Abuja.
“Since we came in July 2016, we are focused on increasing production of oil and gas and condensates. At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on averaging last year, about 2.1 million barrels. As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million bpd,” he said.
According to Baru, the stability and ability to push production has come as a consequence of several factors, both internally and externally.
Baru was relieved of his post last Thursday.
Nigeria: Buhari Sacks Baru, Appoints Kyari As New NNPC GMD
New NNPC GMD, Mele Kolo Kyari.
Nigerian President Muhammadu Buhari has appointed Mele Kolo Kyari as the new Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC).
The leader of the most populous West Africa country also appointed seven Chief Operating Officers alongside Kyari. The newly appointed officers are to work with current officeholders till July 7, 2019, for a smooth transition to take place.
This was disclosed in a statement signed on Thursday by the NNPC Group General Manager, Group Public Affairs, Ndu Ughamadu.
“President Buhari has directed that the New GMD and the newly appointed COOs work with the current occupiers of the various offices till 7th July 2019 towards a smooth transition on 8th July 2019 when their appointments would take effect to ensure a smooth transition.
“However, the appointment of Farouk Garba Said (North West), who is replacing a retiring Chief Operating Officer, is effective from 28th June 2019,” the statement read in part.
The newly appointed Chief Operating Officers are:
- Roland Onoriode Ewubare (S/South) – COO Upstream
- Mustapha Yinusa Yakubu (N/ Central) – COO Refining & Petrochemicals
- Yusuf Usman (N/East) – COO, Gas & Power
- Lawrencia Nwadiabuwa Ndupu (S/East), COO Ventures
- Umar Isa Ajiya (N/West) – Chief Financial Officer
- Adeyemi Adetunji (S/West) – COO, Downstream and
- Farouk Garba Said (N/West) – COO, Corporate Services.
Centurion Law Group Acquires German Energy Group
Centurion Law Group, a leading pan-African legal and energy advisory group has acquired Africa Counsel GMBH, an Africa-focused energy firm specializing in acquisitions, divestitures for German companies in the energy sector.
The group announced this in a statement they issued on Friday, 21 June, 2019, and copied to energynewsafrica.com on its behalf by APO Group.
“Acquiring Africa Counsel complements our Energy activities in Europe and sets us on a path of doing great deals for clients expanding into the African energy space,” said NJ Ayuk, CEO of Centurion Law Group.
“Africa Counsel’s core team of skilled specialists is supported by a wide network of independent subject-matter experts, whom we believe will help in safeguarding the investments of many German companies in Africa”, he added.
Centurion recently announced it will be pursuing a public listing this year with one of Europe’s leading stock exchange.
The group provides outsourced legal representation and covers a full suite of practice areas for its clients, including arbitration and commercial litigation, corporate law, tax and anti-corruption advisory and contract negotiation.
Aker BP Cleared To Use Rigs On Two North Sea Projects
Norwegian E&P player Aker BP has received consents from the Petroleum Safety Authority (PSA) for the use of the Deepsea Stavanger and Maersk Invincible rigs for exploration drilling in the North Sea and development of Valhall Flank West, respectively.
The first consent is for the exploration drilling of the Liatårnet well, designated 25/2-20. It is located in the Aker BP-operated production license 442 in the North Sea.
The well will be drilled at a water depth of 110 meters in the so-called Noaka area. Noaka stands for “North of Alvheim, Krafla, and Askja,” a collection of discoveries east of Frigg in the central North Sea.
The PSA said on Friday that the drilling was scheduled to begin on June 26 and expected to last at least 12 days.
It will be drilled by the Deepsea Stavanger drilling rig after completing the drilling of wildcat well 15/6-16 S for Aker BP in production license 777.
According to the safety watchdog, the well will be drilled by the Deepsea Stavanger mobile drilling rig. The Deepsea Stavanger is a semi-submersible drilling rig of the GVA 7500 type, owned and operated by Odfjell Drilling.
It is worth reminding that the Norwegian Petroleum Directorate already granted a drilling permit for this well on Monday, June 17.
The second consent relates to the use of the Maersk Invincible jack-up drilling rig on the Valhall field and applies to the drilling of production wells on the Valhall Flank West development.
Valhall is a field in the southern part of the Norwegian sector in the North Sea. It was discovered in 1975, and the initial plan for development and operation (PDO) was approved in 1977, and production started in 1982.
A PDO for Valhall Flank West was approved in 2018. Valhall Flank West will be developed from a new Normally Unmanned Installation, tied back to the Valhall field center for processing and export.
The platform will be remotely operated from the Valhall field center. First oil is expected in the fourth quarter of 2019.
Source: Offshoreenergytoday.com
Senegal’s President Launches Investigation On Oil Corruption Claims
His Excellency Macky Sall, President of Senegal
An inquiry into how Senegal’s energy contracts were allocated has been launched by the country’s Ministry of Justice. The inquiry follows a report by the BBC alleging that the president’s brother was implicated in a suspicious energy deal linked to gas fields off the country’s coast.
President Macky Sall has said that he’s keen for the truth to be ‘re-established’ suggesting that the reports are an attempt to ‘destabilize’ the country and oust the incumbent government.
The allegations have energized Sall’s administration, especially as the president originally came to power vowing to root out corruption. With the scandal landing so close to home, it will be a watershed moment for the Senegalese government’s efforts to boost the powers of the judiciary.
The accusations of corruption date back to the early 2010s, when a company with no track record in the industry was awarded a license to explore two blocks by then-president Abdoulaye Wade. The decision sparked protests, prompting newly elected president Macky Sall to approve an urgent investigation.
However, cancelling the contract would have been illegal and could have seen Senegal dragged before international tribunals. As a result, the contract was subsequently ratified, and the exploration rights passed to the Timis Corporation operated by Frank Timis, who has been in the spotlight in the mining industry for his business practices.
BBC Panorama and Africa Eye are claiming to have evidence showing that Aliou Sall was employed by the Timis Corp. from 2012 and that he received a ‘secret bonus’ of £250,000 via his company, Agritrans, in 2014. Aliou Sall has denied receiving any such payment and has labelled the BBC’s report ‘totally false’.
The BBC investigation also showed that a schedule of ‘royalty payments’ worth between $9 billion and $12 billion is due to be funneled to the Timis Corp. over the next four decades, which brought BP into the investigative mix.
Geraud Moussarie, head of BP in Senegal, has downplayed the reported royalty figure as ‘so fake and exaggerated that it is complete fantasy’ and has dismissed the suggestion that Senegal is being cheated out of its revenues. Experts have also agreed with this statement, arguing that it’s unlikely for oil companies to pay royalties to other companies.
President Sall’s anti-corruption record so far has been promising with a substantial amount of progress being made in the years since he first came into office.
Since Sall came into office the country was featured this year by Transparency International as among the top improvers. Overall, the country has jumped 27 slots in the global ranking, to 67th in 2018 from 94th in 2012, the year Sall was elected.