Oxy in swoop for Anadarko; Says its bid superior to Chevron’s
The U.S. oil firm Occidental Petroleum has entered a race with Chevron to buy Anadarko Petroleum. Oxy on Wednesday said the 50-50 cash and stock transaction was valued at $57 billion.
The news follows last week’s Chevron’s bid to buy Anadarko, also in stock-cash combination, valued at $50 billion.
Occidental Petroleum on Wednesday said it had delivered a letter to the Board of Directors of Anadarko Petroleum Corporation “setting forth the terms of a superior proposal by Occidental to acquire Anadarko for $76.00 per share, in which Anadarko shareholders would receive $38.00 in cash and 0.6094 shares of Occidental common stock for each share of Anadarko common stock.”
“Occidental’s proposal represents a premium of approximately 20% to the value of Anadarko’s pending transaction as of April 23, 2019,” Oxy said.
“Occidental believes its proposal is superior both financially and strategically for Anadarko’s shareholders, creating a global energy leader with the scale and geographic diversification to drive growth and deliver compelling value and returns to the shareholders of both companies.”
“The combined company will be uniquely positioned to leverage Occidental’s demonstrated operational and technical expertise, producing greater anticipated synergies than Anadarko’s pending transaction. The 50-50 cash and stock transaction is valued at $57 billion, based on Occidental’s closing price on April 23, 2019, including the assumption of net debt and book value of non-controlling interest.”
As for the Chevron bid revealed on April 12, based on Chevron’s closing price on April 11, 2019, Anadarko shareholders would receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.
The Chevron-Anadarko transaction has been approved by the Boards of Directors of both companies and is subject to Anadarko shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.
Worth noting, Oxy has also revealed it has since March made three acquisition proposals to Anadarko, which, Oxy says, offered Anadarko’s “shareholders a significant immediate premium as well as participation in value creation post-closing.” (See full letter sent to Anadarko below.)
“We have been focused on Anadarko for several years because we have long believed that we are ideally positioned to generate compelling value from a combination with them.”
Vicki Hollub, President and Chief Executive Officer of Occidental: “Occidental is a leader in using technological innovation to create value, and we will deploy our expertise to enhance the performance and productivity of Anadarko’s assets not only in the Permian but globally.”
“Occidental and Anadarko have a highly complementary asset portfolio, providing us with a unique opportunity to realize significant operating, cost, and capital allocation synergies and achieve near-term cash flow accretion.”
The CEO added: “We have been focused on Anadarko for several years because we have long believed that we are ideally positioned to generate compelling value from a combination with them. We look forward to engaging immediately with Anadarko’s Board and stakeholders to deliver this superior transaction.”
Oxy says the proposed Anadarko transaction would boost its Occidental’s position as the largest producer in the Permian with 533 thousand Boe/d of production.
“Adding to Occidental’s existing, cash flow generating international and chemicals portfolio, Anadarko’s industry-leading DJ Basin operations combined with its cash flow generating assets in the Gulf of Mexico, Algeria and Ghana, provide complementary growth and enhanced stability. The combined company’s asset base is expected to supply low-cost development opportunities to fuel high return growth for years to come,” Oxy said.
Furthermore, Oxy says it has identified $3.5 billion in annual free cash flow improvements that are expected to be fully achieved by 2021, comprised of $2 billion in annual pre-tax run-rate cost synergies, and $1.5 billion of capital reduction, with the potential for further upside.
The annual capital reduction would be delivered in the first year and result in moderating near-term production growth from 10% to 5% on a combined basis, OXY said.
See below Oxy’s full Letter to Anadarko Board
“Dear Members of the Anadarko Board of Directors:
As you know Occidental has long admired Anadarko, and we believe that a combination of our two companies would create a global energy leader with a winning shareholder value proposition. Combining our highly complementary global asset portfolios would generate significant cost and capital synergies, attractive organic growth and a stable, sustainable and growing dividend. The resulting diverse but focused company will be a world leader in shale development and enhanced oil recovery.
Since late March, Occidental has made three acquisition proposals to Anadarko that offered your shareholders a significant immediate premium as well as participation in value creation post closing.
Each was significantly higher than the $65 per share transaction you announced on April 12. Our most recent proposal, conveyed in writing on the morning of April 11, followed by a merger agreement we were prepared to sign, was for $76 per share, comprised of 40% cash and 60% stock. We were surprised and disappointed that your Board did not engage with us on that proposal, or our proposal of April 8, even though both were significantly higher than the price you accepted from Chevron.
The transaction you announced with Chevron indicates that the Anadarko Board believes that $65 per share is a fair price for your shareholders. Occidental is hereby proposing to acquire Anadarko for $76 per share, comprised of $38 in cash and 0.6094 shares of Occidental common stock per Anadarko share.
Our proposal represents a premium of approximately 20% to the $63.46 per share value of Chevron’s offer as of yesterday’s close. The equity component also provides your shareholders an opportunity to continue to participate in the value creation of this exciting combination.
Our Board of Directors has unanimously approved our proposal, and we have executed financing commitments with BofA Merrill Lynch and Citi for the cash portion of our proposal. Our merger agreement will not contain any financing condition, and we do not anticipate any delay to completing the regulatory approval process. We would expect to seek the approval of the shareholders of both companies and close a transaction in the second half of 2019.
It is unfortunate that Anadarko agreed to pay a break up fee of $1 billion, representing approximately $2 per share, without even picking up the phone to speak to us after we made two proposals during the week of April 8 that were at a significantly higher value to the transaction you were apparently negotiating with Chevron.
“We noted to you on April 8 that our due diligence is complete. As you are aware, our financial advisors are BofA Merrill Lynch and Citi, and our legal advisors are Cravath, Swaine & Moore LLP, and we and they are available to discuss any aspect of our proposal. We and our advisors have reviewed your merger agreement with Chevron.
“We are separately sending to you and your legal advisors a form of merger agreement on that basis which we would be prepared to enter into, subject to our agreeing to the disclosure schedules to be attached, together with a copy of our financing commitment letter.
“We sincerely hope that you will act now to secure this compelling opportunity for your shareholders without further delay. Our proposal is superior for your shareholders, employees and other stakeholders, and we look forward to concluding the requisite formalities and executing an agreement expeditiously.”
Source: Offshoreenergytoday.com
Shell strikes oil at Blacktip prospect in Gulf of Mexico
Oil major Shell has made a significant oil discovery at the Blacktip prospect in the deep water U.S. Gulf of Mexico.
Shell said on Wednesday that evaluation is ongoing and appraisal planning is underway to further delineate the discovery and define development options.
“Blacktip is Shell’s second material discovery in the Perdido Corridor and is part of a continuing exploration strategy to add competitive deep water options to extend our heartlands,” said Andy Brown, Upstream Director for Royal Dutch Shell.
Blacktip is a Wilcox discovery in the Perdido thrust belt and was discovered in the Alaminos Canyon Block 380, approximately 30 miles from the Perdido platform and Whale discovery. The find presents the opportunity to augment existing production in the Perdido area where Shell’s Great White, Silvertip and Tobago fields are already producing.
Drilling at the initial Blacktip well is still underway and has to date encountered more than 400 feet net oil pay with good reservoir and fluid characteristics. The well is currently being deepened to further assess the structure’s potential.
Blacktip is operated by Shell (52.375%) and co-owned by Chevron (20%), Equinor (19.125%), and Repsol (8.5%).
This discovery in a Shell heartland adds to the company’s Paleogene exploration success in the Perdido area. Through exploration, Shell has added more than one billion barrels of oil equivalent in the last decade in the Gulf of Mexico. The company’s global deep-water production is on track to exceed 900,000 boe per day by 2020, from already discovered, established areas.
The Blacktip discovery is located approximately 250-miles (400-kilometers) south of Houston in approximately 6200-feet (1900-meters) of water.
In a separate statement on Wednesday, Equinor’s Bjørn Inge Braathen, senior vice president for exploration in North America, said: “We are very pleased with this discovery which confirms the potential in the deepwater Gulf of Mexico and underpins Equinor’s strategy to exploit prolific basins and deepen in core areas.”
Braathen added: “We await further results from the well and look forward to continue the collaboration with the operator and co-venturers to assess the full potential of the discovery and evaluate options for development.”
Equinor is planning to drill the Monument Paleogene prospect in the U.S. Gulf of Mexico in 2019.
Source: Offshoreenergytoday.com
Eni books higher profit, eyes production growth in 2019
Italian oil company Eni saw an increase in its first quarter 2019 net profit when compared to the last year’s performance. In 2019, Eni expects its production to grow fueled by ramp-up at new fields.
Eni’s adjusted operating profit in 1Q 2019 was €2.35 billion, slightly down from the profit of €2.38 billion in the corresponding period of 2018.
Eni’s net profit for the first quarter 2019 was €1.09 billion ($1.2 billion) compared to €946 million ($1.06 billion) in the same period in 2018, up by 15%.
The company’s adjusted net profit in the first quarter 2019 grew to €992 million from €978 million in the same period last year.
Hydrocarbon production of the first quarter 2019 was 1.83 million boe/d; down by 1.3% net of price and portfolio effects.
Eni said that this quarter-on-quarter change was affected by the termination of the Intisar production contract in Libya from the third quarter of 2018 and mature fields decline. These negative effects were almost completely offset by strong organic production increases due to the ramp-up of the Zohr field and of the projects started in 2018 (overall 200 kboe/d).
Commenting on the results, Claudio Descalzi, CEO of Eni, remarked: “I am very pleased of the excellent industrial and financial performance delivered by Eni in IQ 2019. Particularly, in light of a substantially unchanged market scenario, the E&P business has improved its operating profit by 25% compared to the first quarter of 2018, confirming our expectations of the business growing cash generation for the full year.”
The oil company expects its production growth rate in 2019 to be at 2.5% y-o-y, under a Brent price forecast of 62 $/bbl.
According to Eni, this growth will be fueled by continuing production ramp-up at fields started in 2018, increases at the Zohr and Kashagan fields, as well as the planned 2019 start-ups including the Area 1 oil project offshore Mexico, the Baltim SW in Egypt, the North Berkine in Algeria and Trestakk project in Norway.
A yearly contribution from start-ups and ramp-ups is expected to reach approximately 250 kboe/d. Production growth vs. 2018 will accelerate from the third quarter of 2019, after the maintenance activities concentrated in the second quarter of 2019, which includes Kashagan and Goliat fields.
Source: Offshoreenergytoday.com
Ghana, Burkina Faso, others to benefit from World Bank’s $200m funding to boost power supply
The Board of the World Bank Group has approved the Regional Off-Grid Electrification Project (ROGEP) for Ghana and 18 other countries to increase electricity access of households.
The project includes $150 million in the form of credit and grant from the International Development Association (IDA) and $74.7 million contingent recovery grant from the Clean Technology Fund to help the West African Development Bank and ECOWAS’ Center for Renewable Energy and Energy Efficiency expand off-grid access to electricity for populations in 19 countries in West Africa and the Sahel region.
The countries include Benin, Burkina Faso, Cape Verde, Cameroon, Central African Republic, Chad, Cote d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo.
The overall objective of ROGEP is to increase electricity access of households, businesses, and public institutions using modern stand-alone solar systems through a harmonized regional approach. The project is expected to benefit about 1.7 million people currently living without electricity connection or with unreliable supply, as well as businesses and public institutions who will use modern stand-alone solar systems to improve their living standards and economic activities.
“So far, only 3 percent of households in West Africa and the Sahel are served by stand-alone solar home systems, and 208 million people in the sub-region do not have access to electricity. The project seeks to assist regional policy makers to address barriers to create a regional market for stand-alone solar systems, which is essential to reduce energy poverty in the region, and entrepreneurs to take opportunities in this market through development of scalable business solutions,” said Rachid Benmessaoud, Coordinating Director for Regional Integration in West Africa.
“The new project will help adopt regional standards and regulations to establish a regional market with harmonized policies that will attract larger market players for the benefit of all participating countries.”
Although stand-alone solar systems have a large market potential in West Africa and the Sahel, investments in off-grid renewable energy have lagged behind in the sub-region. The new project maximizes finance for development by crowding in private investments to deploy innovative technologies. By developing a regional market, it will help better address the important growth in demand for reliable electricity and will help create jobs.
The new project is aligned with the World Bank Group’s twin goals of poverty reduction and shared prosperity and the Africa Climate Business Plan. Furthermore, it will implement a pilot to test business models to electrify schools and health clinics critical for the Human Capital Project in West Africa.
Thirteen Western Region towns to experience four days’ power outage
Residents of Shama Ituma, Daboase, Essaman, Supom Dunkwa, Sekyere Krobo, Aboso, Beposo, Anlo Beach,and other surrounding areas in the Western Region who want to enjoy electricity from the national grid should rather make alternative arrangements to have power supply between 8am and 4pm from Saturday, 27th April to Tuesday, 30th April, 2019.
This is because the Ghana Grid Company (GRIDCo) had requested the Power Distribution Services (PDS) to curtail power to the aforementioned towns to enable it continue with the construction of the Aboadze-Prestea-Kumasi 330kV Transmission Line.
Contained in a release, PDS expressed regret of any inconvenience that would arise as a result of the power outage.
Poor Electricity Supply Affecting Our Operations-GWCL Boss
Poor supply of electricity is seriously affecting the operations of the Ghana Water Company Limited (GWCL), the Managing Director of the company has said.
According to Dr. Clifford Abdallah Braimah, the situation might compel GWCL to cut off partnership with its power supply partners.
He said the company had sought to develop alternative sources of generating power to ensure stable supply of electricity to its water treatment plants across the country to ensure frequent distribution of water to consumers.
He said due to the poor supply of electricity from PDS, GRIDCo, Northern Electricity Distribution Company (NEDCo) amongst others, the company had commissioned feasibility study for the construction of Hydro Electric Power systems at Mampong, Weija, Barekese and the results were very positive.
Dr Braimah made this known on Tuesday when he visited one of the company’s water treatment plants at Dalun in the Kumbungu District in the northern region, as part of his visit to assess the activities of the company.
He said reports on the feasibility study would soon be sent to government for approval in order to kick start the Hydro Electric Power system projects.
Dr Braimah said the company would soon bring some technocrats from Czech Republic to assess and plant a horizontal turbine system in Dalun to help generate electricity to support GWCL activities in the northern region.
He said poor electricity supply from PDS had damaged some of the company’s machines at various water treatment plants citing the recent damage of some Auto-transfomers at Dalun, which interrupted regular water supply to consumers.
He said the water treatment plant at Dalun for over 16 hours on Monday had not been able to supply water to its customers due to lack of electricity which affected the company’s activities and its consumers greatly.
” NEDCo, the electricity supply line that is supposed to give us enough power, has connected a lot of communities to that line resulting in the low distribution of water to Tamale and its surroundings” he said.
Mr Braimah also expressed regret on the irresponsible sand winning activities carried out along the river beds of the White Volta at Nawuni, the company’s source of raw water intake for the Dalun water treatment plant, leading to its contamination.
He said these irresponsible activities would lead to higher cost in water treatment as well as increase in water tariffs and therefore called on the traditional authorities and stakeholders within the area to help stop the sand winning activities.
He advised consumers not to always be quick to blame GWCL whenever there was interruption in water supply since most times it’s not the company’s fault and assured that the company would continue to do its best to serve its customers.
Exxon Inks Large LNG Deal Despite China/US Trade Row
Exxon has inked a contract with Chinese Zhejiang Energy for the supply of 1 million tons of liquefied natural gas annually, the supermajor said, adding the Chinese company will build a new import terminal for the shipments.
Reuters reports that the terminal Zhejiang Energy will build will have a capacity to hold 3 million tons of LNG with a US$1.34 billion price tag. Sinopec, China’s largest refiner, will be partner of Zhejiang in the project.
The deal is significant first because it may go a certain way towards quenching concern that the trade dispute between Washington and Beijing would affect LNG trade just as China’s demand for the superchilled fuel is rising steadily.
However, as one analyst told Reuters, the deal is not part of the bilateral negotiations that have recently raised hopes that the trade war saga could end in a mutually beneficial deal.
“The gas supplies to the Zhejiang firm will come from Exxon’s portfolio production outside the U.S.,” Chen Zhu said, adding that the terminal will begin operations sometime in 2022 or 2023. The analyst noted that Exxon already has two LNG supply deals with Chinese companies, and not just any companies: the supermajor will supply LNG to Sinopec and CNPC.
Secondly, it is a long-term deal—20 years—which is even better news for other U.S. companies betting on LNG: long-term supply commitments are what they all need to secure the funding needed for the construction of the liquefaction facilities, which normally cost billions of dollars.
Exxon is one of the largest global players in liquefied natural gas, holding stakes in LNG projects that combined have a total capacity of some 65 million tons of the fuel annually. This includes the Papua New Guinea LNG project where Exxon is the majority partner and which specifically targets the Asian market—the driver of future global LNG demand.
Source: Oilprice.com
Putin Loses Popularity As He Raises Taxes And Rewards Oil Companies
Mock headstones for President Vladimir Putin are the latest signal that Russian citizens are unhappy with this year’s tax hikes, according to Meduza,, with Putin’s polling numbers taking a hit.
The tax hikes, however, are offset somewhat by Russia calling on its oil companies to hold fuel prices steady to insulate its people from the high price of fuels.
But in addition to the tax hikes, the government has also agreed to pay the oil companies back for doing so—compensating them for 60 percent of the difference between European fuel prices and Russian fuel prices.
Of course, lower fuel prices are usually welcomed by the masses, but to make this happen, Russia is unleashing $8 billion from its sovereign wealth fund and giving it to the oil companies—oil companies that have enjoyed a rather flush year. And it is this part of the arrangement that has stoked controversy in the country.
Russia’s sovereign wealth fund, which currently sits at almost $60 billion according to Reuters, was funded largely on the backs of these oil companies; a fiscal rule requires that Russian oil revenues stemming from anything above $40 per barrel be stashed in this wealth fund. But it was also designed to insulate the country from geopolitical turmoil and economically hard times that may arise in future years, for future generations.
The interesting turn of events that created the need to hold fuel prices steady stemmed largely from higher oil prices in the last year—higher oil prices that Russia is partially responsible for as it continues to cooperate with OPEC to curtail production.
The production cuts, however, did little to tarnish the bottom line of the Russian oil giants. Rosneft’s 2018 full year revenue was up 37 percent. Lukoil’s revenue was up over 35 percent.
Ghana: We need more indigenous companies participation in the Oil & Gas Industry – Ntow Danso
The Chief Executive Officer of Dansworld International Services Limited (DISL), an indigenous Ghanaian company, Bernard Ntow Danso has reiterated the call for more indigenous companies to participate in Ghana’s Oil and Gas Industry.
“The Oil and Gas industry needs more local participation in every aspect of it,” he stated.
He argued that the sector is making waves and it is time more indigenous Ghanaian companies enter the industry to ensure the oil money stays within the Ghanaian Economy to support Government’s grand agenda of promoting indigenous Ghanaian businesses.
To qualify as a Ghanaian/indigenous company, the company must have at least 51% of its equity owned by a Ghanaian with 80% executive and senior management positions and 100% non-management and other positions occupied by Ghanaians.
Mr. Ntow Danso made the call when his company received registration permit from the Petroleum Commission to undertake General Consultancy Services and Sanitation services within the petroleum sector.
The registration permit will enable Dansworld to undertake Environmental Management Services like cleaning services, fumigation, Hazardous & Non-Hazardous waste management, and landscaping & garden maintenance services in both the upstream and downstream petroleum sector.
The permit is in line with Ghana’s Petroleum (Local Content and Local Participation) REGULATIONS 2013, (L.I 2204) which allows Ghanaian/indigenous company, to have at least 51% of job opportunities in the oil and gas sector.
Pledging Dansworld’s commitment to quality services for customers in Ghana and beyond, he added that, “The Company has recently undertaken the requirements for ISO certification and should have the full certification by August 2019, as we seek to expand our quality services to other countries”.
DSIL is an Environmental Services Provider with a track record of excellence, having worked in various sectors of the Ghanaian economy and offers the best there is in general cleaning and waste management services across various districts of Ghana.
The company is geared up to contribute towards government’s overall agenda in the petroleum sector by providing excellent cleaning services.
Kenya: Tatu City development completes its first solar installation
As part of a 30MW strategy for Tatu City real estate developer Rendeavour has installed its first solar power plant in Kenya.
Tatu City is a 5,000-acre mixed-use development with homes, schools, offices, a shopping district, medical clinics, nature areas, a sport and entertainment complex, and a manufacturing area for more than 150,000 residents.
The city’s first solar power plant – installed on the roof of Dormans Coffee’s global headquarters at Tatu Industrial Park – provides 1MW of electricity.
Installation of the entire plant, including 15km of cables, took only six days to complete. The installation is in line with Rendeavour’s long-term commitment to environmental conservation through harnessing renewable energy sources.
According to the developer, schools and businesses are already open at Tatu City, and a range of houses are under construction to suit all incomes.
Located in Kiambu County, Tatu City represents a new way of living and thinking for all Kenyans, creating a unique live, work and play environment that is free from traffic congestion and long-distance commuting.
“Tatu City’s strategy is to install solar panels on all rooftops at the industrial park, the largest in East Africa,” said Nick Langford, Kenya Country Head for Rendeavour, Tatu City’s owner and developer.
“Solar power allows us to contribute to clean energy, which is one of the United Nations Sustainable Development Goals,” Langford said.
“The power produced from the solar panels will be distributed for use by homes and businesses within the city. We are proud of this milestone and pleased to know that residents will enjoy sustained power supply at very minimal costs.”
Tatu Industrial Park is zoned for light, non-polluting industries. Leading international, regional and local companies are positioning their business at Tatu City for growth in East Africa and beyond. They include Dormans Coffee, Kim-Fay, Unilever, Coopers K-Brands, Chandaria Industries, Freight Forwarder Kenya, Stecol, and Tianlong.
Backed by CDC Group and International Finance Corporation, Africa Logistics Properties at Tatu Industrial Park is the largest Grade A warehousing in Kenya. The development is expected to attract tens of thousands of day visitors.
Source: Esi-Africa.com
Ghana: Former Petroleum Commission Boss, Theophilus Ahwireng appointed MD of MODEC
A former Acting Chief Executive Officer for Petroleum Commission Mr Theophilus Ahwireng has been appointed as the new Managing Director of MODEC Production Services Ghana JV Limited (MPSG).
His appointment is effective today,April 23, 2019.
Theophilus Ahwireng is a seasoned technical and business leader with three decades of experience in the Upstream Oil and Gas industry as well as the extractive industry.
Until his recent appointment, Theophilus was Technical Advisor to the Ministry of Energy on issues relating to the Upstream Petroleum sub-sector under the Ghana Oil and Gas Inclusive Growth (GOGIG), a DFID funded programme.
Prior to that, he was the acting CEO of Petroleum Commission, Ghana between 2013 and 2017.
He also worked for Ghana National Petroleum Corporation (GNPC) in a variety of roles for over twenty years.
Theophilus Ahwireng was also the Leader of the Interim Management Committee credited with the successful turnaround of Prestea Sankofa Gold Limited into a profitable company between 2006 and 2008.
“Having a leader of Theophilus Ahwireng’s calibre will propel our business aspirations and we are very pleased to welcome him to the organisation,” said Koji Kawabe, Vice President of MPSG.
Commenting on his appointment Theophilus Ahwireng said, “MODEC is contributing effectively to Ghana’s petroleum production and power supply and its contribution is significant. As I join the company, I look forward to working with the team to deliver even better results for the company and all its stakeholders.”
About MODEC Production Services Ghana JV Limited
MODEC Production Services Ghana JV Limited is the operator of two FPSOs on behalf of Tullow Ghana Limited namely, FPSO Kwame Nkrumah for Jubilee fields and FPSO Prof. John Evans Atta Mills, for TEN fields.
The company is a subsidiary of MODEC Inc., a leading specialist and provider of competitive floating solutions for the offshore oil and gas industry such as Floating Production, Storage and Offloading (FPSO) vessels and Tension Leg Platforms (TLPs). MODEC also has an excellent track record of EPCI (Engineering, Procurement, Construction and Installation) as well as charter and operations projects.
NPA hints of amending Act to clampdown on petroleum smugglers
Ghana’s Petroleum Downstream Regulator,NPA, has hinted that it will seek for the amendment of the ACT establishing the Authority, in order to apply tougher sanctions on persons or individuals caught to be dealing in petroleum theft.
The NPA in February this year confiscated petroleum products smuggled into the country estimated to be about GHC1 million.
The regulator said a total number of 28BRV, 6 canoes, 4 mobile pumps and 5 outboard motors carrying 709,250 liters of illegally smuggled petroleum products with taxes and levies value of GHC1, 150,186 have been confiscated.
The arrest, made in collaboration with the security agencies, is part of ongoing plans by the NPA to deal with fraudsters in the industry.
Speaking at the OIL and FUEL Supply Chain Security Conference on how to prevent fuel fraud in London, Mr. Hassan Tampuli, who is the CEO of NPA, said after more than ten years of its establishment, it is only appropriate the law is reviewed to enable the NPA to apply heavy sanctions on those caught to be engaging in fuel smuggling activities.
But while the NPA awaits that to happen, Mr. Tampuli said his outfit will continue to deploy technology to help block smuggling channels, while other channels are explored to combat fuel theft.
“We intend going forward to use more technology like the use of flow meters at the depots and fuel receiving facilities,” he said, adding; “we insist that if they don’t get the flow meters at those facilities, we will procure for them and ensure that they are working.”
U.S. Won’t Release SPR Barrels To Calm Oil Markets
The United States will not be dipping into its Strategic Petroleum Reserves (SPR) to calm unsettled markets today, according to S&P Global Platts sources who were commenting about rising oil prices as WTI surpassed $65 per barrel in the late afternoon.
The US may, however, consider tapping into the SPR if oil prices are too high over the summer months, according to the same sources, although President Donald Trump confidently proclaimed on Monday that Saudi Arabia and other OPEC players have the ability to turn on the taps to make up for any oil supply shortfalls left by Iran now that waivers are behind us, marking the true beginning of the US sanctions on Iran.
WTI was trading up $1.62 (+2.53%) at 3:45pm EST, reaching $65.69. Brent was trading up $2.14 (+2.97%) at $74.11—the highest price in five months.
The purpose of the 700+million-barrel SPR is to insulate the United States in the event of a supply emergency, although the fact that it exists also sends the message to other oil producers that the United States has the ability to flood the market with oil should it choose to do so. It is the largest supply of emergency crude oil in the world, according to the energy.gov website.
The United States has tapped its SPR to weather global supply disruptions three times, although it has released barrels at other times as well as part of planned drawdowns. In August last year, the United States moved up a planned 2019 SPR release to soften the blow of US sanctions on Iran. The United States, however, granted eight purchases of Iranian oil waivers, sending the price of oil downward on the news.
Those waivers will officially end on May 1, the White House announced on Monday.
Source: Oilprice.com
Nuisance charges and fees suffocating OMCs-Agyemang- Duah
Mr Kwaku Agyemang- Duah, Chairman of AOMCs signing a Safety Declaration Form
The Association of Oil Marketing Companies (AOMCs) has expressed concern over the numerous operating charges and fees imposed on Oil Marketing Companies (OMCs) thereby suffocating the operators in the sector.
“These unprecedented charges, have the tendency of becoming a cost component, which would eventually increase the overhead cost of operation, hence the fuel price hikes in this era of already high cost of petroleum products,” the AOMC, stated in a statement signed by Mr Kwaku Agyemang-Duah, Industry Coordinator.
The statement addressed to some Metropolitan, Municipal and District Assemblies (MMDAs) and obtained by the Ghana News Agency said the OMCs were over burdened with the numerous charges and fees.
The AOMC Chief Executive Officer noted that the business signage fees, and other materials displayed at Filling Stations which were part of mandatory requirements for the granting and issuance of a permit to construct a Filling Station by the National Petroleum Authority attracted fees also from the MMDAs.
“These charges and fees being collected within the MMDAs jurisdiction appear to be duplicating the fees and other charges paid to statutory and regulatory bodies,” the AOMC reminded the MMDAs.
Some of the fees and charges suffocating the OMCs are; Environmental Protection Agency Processing and Permit Fees; MMDAs Business Operating Permit Fees; MMDAs Signage and Advert Fees; Fire Permit Fees; Ghana Standards Authority Verification Fees charged per each pump.
Other charges are; Vehicle Branding Fees; Ground Rent and Stool Lands Fees;; Royalty Fees; Ghana Music Association Fees; Business Operational Fees and Ghana Highway Authority entry and exit fees.
The OMCs also paid Ghana Revenue Authority, National Petroleum Authority, Factories Inspectorate and other mandatory taxes and levies.
Scores of OMC operators stated that these fees and charges were chargeable per each filling stations per year, “the net effect is too huge which accounts for the fuel prices hikes.
“Most institutions including; statutory bodies, MMDAs and private sector actors see the OMCs as financial reservoirs to siphon money from. We are into business, so we will invariable transfer the huge overhead cost to the consumer”.
The OMC Operators therefore appealed for a regulated mechanism to ensure that the MMDAs and other regulated authorities synchronised their charges and levies to eliminate double taxation.
The OMCs said those operating in traditional areas also paid additional dues and fees to the traditional rulers.