The African Development Bank’s Board of Directors has approved a grant to the government of Sudan to accelerate the adoption of solar-powered irrigation pumps in the country’s West Kordofan and North Kordofan states.
The project will enable farmers’ adoption of renewable energy technology through the installation of 1,170 photovoltaic (PV) irrigation pumps, the establishment of maintenance and repair workshops for the pumps, and the supply of equipment for a pump testing laboratory to provide certification and training.
Agriculture is an important economic sector in Sudan. In 2016, nearly 40% of the country’s GDP came from farming. For the sector, and for the wider economy, the project offers significant and numerous knock-on benefits.
As a result of the expected phasing out of diesel-fueled pumps, participating farmers will realise cost savings from no longer needing to purchase diesel, which is scarce in rural areas. Productivity also would increase: diesel generators require time consuming maintenance and repair.
Pollution and greenhouse gas emissions from agriculture, the country’s largest contributor, would fall.
Mr. Paul Baldeh, the Bank’s Director for Power Systems Development, noted that “by extending farmers a grant covering 75% of installation costs, the government, with Bank support, will overcome the most significant hurdle of adopting clean PV technology: high upfront costs.”
The remaining 25% will be payable in installments over three years. He added that the project will conduct a ground water survey and sustainability assessment that will inform the development of subsequent projects in Sudan.
The project meets the Sudanese government’s renewable energy and poverty reduction objectives as well as the Bank’s High Five and Energy Sector Policy. Moreover, the project has strong potential to be replicated and scaled up in other parts of the country.
Ghana’s former president, John Dramani Mahama believes a single Chief Executive Officer should manage the West African nation’s only refinery, TOR, and the strategic oil company, BOST.
The two oil companies were managed by Mr Kwame Awuah Darko during the tenure of Mr John Dramani Mahama.
The former political leader, who is seeking a come back on the ticket of the National Democratic Congress (NDC), said he would reverse the current situation where two persons are managing the companies if he is given the nod in Ghana’s upcoming general elections slated for December 7, 2020.
He attributed Ghana’s struggles with petroleum pricing to “a lot of inefficiencies in the distribution chain of petroleum products.
“Due to the improved efficiency between the two of them [BOST and TOR] in handling petroleum products, we were able to keep petroleum products at a much lower price than they would have been if we had left it the way it was. And so when I come as president again, I am going to appoint one chief executive to be in charge of both BOST and TOR and we will rebuild BOST’s capacity as a state-owned enterprise,” he promised.
Again, Mr Mahama said the NDC plans to, once again, turn around the fortunes of BOST and return it to its glorious days.
“We took BOST from the worst-performing state-owned enterprise and by the time we left office, BOST was the best-performing state-owned enterprise.
“We will rebuild BOST again to claim its glory and we will let it work together with the Tema Oil Refinery so that we can ensure that efficiency of distribution in the system will bring down prices and inure to the benefit our people.”
The Chamber of Petroleum Consumers (COPEC-GH), a petroleum consumer advocacy group in the Republic of Ghana, has joined calls for greater safety of all motorists, as well as other road users to observe road safety regulations in order to avert any unfortunate road accidents during the yuletide.
Arguably, road traffic fatalities and their accompanying wreckages are becoming a growing public health concern nationwide.
Records show that, the first half of 2019 recorded 6,844 road crashes which have resulted in some 1,252 fatalities. These figures are, indeed, devastating, unfortunate and alarming.
“The safety of public transport operators, private drivers and the general public with respect to the safe use of our roads is an issue of concern to us during this Christmas season. It is evident that transportation activities will be on the rise during this festive season as individuals are expected to travel across the length and breadth of the country to celebrate with family and loved ones,” COPEC noted in a statement copied to energynewsafrica.com.
COPEC entreated motorists and pedestrians to observe every necessary road safety regulation for the avoidance of road traffic fatalities.
COPEC is of the firm belief that state agencies including the Police MTTD, the National Road Safety Commission and other relevant state institutions engaged in road safety management would intensify awareness creation and preventive efforts towards reducing the risk of road accidents and unexpected carnages during this season.
The statement called on the general public to adhere to safety measures such as maintenance of their vehicles, observing appropriate speed limits, obeying road signs and avoidance of driving under duress/stress, alcoholic influences and/or other hard drug substances.
COPEC used the opportunity to wish drivers, pedestrians, business entities and the general public a Merry Christmas and an incident-free festive celebration.
As part of its programme of activities for the 2019 Christmas season, Karpowership Ghana, one of the independent power producers in the Republic of Ghana has extended its benevolence to New Horizon Special School in Accra, capital of the West African nation.
The company donated food items ranging from bags of rice, oil, tomatoes puree, toiletries, drinks, biscuits among others.
The donation, which is a part of the company’s corporate social responsibility activities, has become an annual tradition to support the less privileged during the Yuletide.
The Corporate Communications Specialist of Karpowership Ghana, Ms. Sandra Amarquaye explained that the purpose of the donation was to give back to society.
“For us at Karpowership we are filled with joy when we put smiles on the faces of these young ones especially around this time of the year to spread the good cheer. As we are all aware Christmas is season of giving and we hope these items donated will help bridge some needs of the children in this home”.
Ms Sandra Amarquaye added that the company’s passion is to impact lives in every area it can. ‘Our philosophy as a company is that we believe we live in one world therefore wherever we find ourselves we need to support the society.
‘We always want to impact lives and improve the well-being of the less-privileged in society through meaningful interventions such as this”
The Principal of the New Horizon Special School Mrs. Vanessa Adu-Akorsah expressed her gratitude to Karpowership and said the School was privileged to have Karpowership Ghana remember the children during this festive season.
“The children here would also have something to celebrate with during this season.
She also admonished parents and the general public to welcome and relate well with children with special needs rather than making unsavory comments about them as this negatively affects their self-worth and human dignity.
U.S. oil and gas producer Apache Corp said on Sunday it entered into a joint venture agreement with France’s Total S.A. to explore and develop an offshore block off Suriname.
Reuters reported that the deal gives Apache a cash injection for continued work in Suriname
Apache’s Suriname prospect, near the border with South America’s newest oil giant, Guyana, is a long-shot for the struggling U.S. oil and gas producer.
Earlier this month, Apache reported it had reached the target depth at its first and closely watched Suriname well. But the company said only that it would drill deeper, causing its shares to drop 17% over two days as investors took the news as a sign results would show the well had no commercial oil quantities.
Suriname draws attention because it just over the border from Exxon Mobil’s and Hess Corp.’s giant fields off the coast of Guyana.
Apache has largely pulled back internationally to focus on its much-hyped Alpine High field in a remote corner of the Permian Shale basin, the top U.S. shale formation.
However, Alpine High has been a disappointment, requiring enormous investment in pipeline infrastructure and delivering mostly natural gas at a time when prices are at a more than two-decade low.
Apache posted a $577 million loss in the first nine months this year compared with a $421 million profit in the same period a year earlier, as it pulled back at Alpine High due to low gas prices.
Under the deal, Apache and Total will each hold a 50% working interest in Block 58 in Suriname.
Apache said it will receive $5 billion of cash carry on its first $7.5 billion of appraisal and development capital along with other considerations, including reimbursement for 50% of its spending on block 58 so far.
Apache will operate the first three exploration wells in the block, including the Maka Central-1 well, and subsequently transfer operatorship to Total.
The Chief Executive Officer of Ghana’s power transmission company (GRIDCo), Ing. Jonathan Amoako-Baah has revealed that the company wants to be the best company in Africa.
Jonathan who assumed the reins of leadership in 2017 and together with a Board led by Ambassador Kabral Blay-Amihere, said he is focused on delivering value and projecting the image of the company as the backbone to power delivery in Ghana.
In an article written by the company and published on Ghanaweb.com, GRIDCo chronicled a number of incidents and achievements that occurred in 2019 as far as the company is concerned.
“A few topsy-turvy moments, like the recent staff unrest that has been resolved due to a great display of unity between the Management and the Staff groups. Then there were spots of outages as a result of power swings on the tie line between Ghana and Cote D’Ivoire in late November, which captured news headlines more for the immediate manner in which the engineers fixed the problem.”
As the major power transmission company in Ghana, GRIDCo’s responsibility is at the heart of the country’s power needs. What it does is integral to everyday life – by serving as the main referee in harnessing power from the Generating companies like VRA, Bui Power Authorities and the IPPs and passing it on to its Bulk Customers and Distribution companies such as Electricity Company of Ghana (ECG), Northern Electricity Company (NEDCo), VALCo and the Mines. It is an interesting power value chain that exists in the West African country but it is efficient and has for a very long time now not encountered major problems.
In April this year, the company won the Power Service Provider of the Year at the African Power, Energy and Water Industry Awards in Cape Town, South Africa. The award was a clear indication of the company’s continued dominance in the power sector in West Africa and its strides across the continent. At the recent Ghana Energy Awards 2019, the company came up for recognition in the power sector for Industry Leadership. These are two of the many accolades showered on the company in 2019 to highlight its efficiency. Jonathan is excited by them but is more focused on the prospects for the company in the coming year.
“Our business requires expediency; a unique sense of urgency and a determination to stay ahead of the game. We oversee a utility that is an integral part of everyday life and we need to be effective and proactive custodians”, he says with a look of determination in his eyes. Other projects were also undertaken which highlighted the operational excellence of the company in 2019, including a 225KV connection line that now supplies about 100MW of power to Burkina from Ghana; and the first-ever 161KV gas-insulated sub-station in Ghana.
In recent times GRIDCo has diversified its business portfolio by providing consultancy services to other energy players within the sub-region in order to generate additional revenue. Some of its recent customers include the transmission and distribution companies of Togo and Benin and the transmission company of Nigeria. GRIDCo has also offered services to several Grid participants in Ghana including Bridge Power, Enclave Power and Takoradi International Company Limited (TICO).
This complementary approach to its business is shaping up as the next frontier of growth and progress for the sub-regional power sector. The company is certain that these steps will make it very viable in the short to medium term while positioning it as a market leader.
Jonathan says, “our appreciation of the power of technology to enhance what we do is also crucial to our ability to compete at the high level on the continental, and even, global stage. In line with this, we have, over the last four (4) years, commercialized our telecommunication assets and now provide the most reliable form of fiber communication for telecommunication networks and IT support systems across the country. We will continue to use these approaches to hedge against reductions in our annual revenue, going forward.”
Technology continues to dictate the pace of growth in the sector. Complete digitization, a paperless structure and the adoption of machine learning are all features that will soon become mainstay in the industry. GRIDCo seems to be a step ahead in this regard. “Our business model is changing; we are going paperless and rolling out newly digitalized projects. We are building a resilience backbone that reduces power cuts, popularly known as “Dumsor” in Ghana.”
Looking ahead, Jonathan believes the sector has enormous potential to become a major revenue line for government.
“Our focus areas within the next 12 – 18 months are basically around the promotion of electricity integration on the Grid; and ensuring Financial and Technical Sustainability of the Business. I have no doubts in my mind that these attainable areas will inure to the benefit of our company. We are supporting Ghana to achieve Goal 7 of the Sustainable Development Goals – Affordable, Reliable and Sustainable Energy for all. These will surely set us apart from the competition.
The Institute of Energy Security (IES), an energy think tank in the Republic of Ghana is alleging that the Managing Director for Tema Oil Refinery (TOR), Isaac Osei, was compelled to resign following his refusal to approve a shady deal.
Energynewsafrica.com last Friday reported the resignation of the Managing Director of TOR, Mr Isaac Osei.
It was not clear why he decided to resign.
However, IES in a press release copied to energynewsafrica.com, stated that its investigations revealed Mr. Osei left his position after he refused to sign off on a deal to refine 11 million barrels of crude oil at a cost of US$1.5 instead of a market rate of US$4.5 per barrel.
According to the statement, should TOR agree to the terms that were being imposed on it, the refinery would not be able to recover its operational costs much less talk of making any gain on the transaction.
“It is this unfair and uneconomical agreement that some persons of interest were exerting pressure on Mr. Osei to sign-off, or resign instead. Had he agreed to this, the huge difference in the questionably discounted Tolling Agreement running into millions of dollars would have gone into private pockets as effortless profit.
To the public purse, however, this will be hard debts to be borne by the Ghanaian taxpayer without anyone being prosecuted for it. It would have simply been explained as usual as bad debts due to “management mistakes and wrong judgment,” the statement said.
Below is the full statement issued by IES
ANOTHER QUESTIONABLE SCHEME TO HURT THIS COUNTRY IN THE OFFING
The Institute for Energy Security (IES) wishes to first and foremost commend the outgoing Managing Director (MD) of the Tema Oil Refinery (TOR) for choosing a path of integrity (resignation) rather than to continue as MD and invariably become a party to a questionable scheme that would hurt this country, benefit few private individuals, and saddle TOR and Ghana with more debts.
Investigations by the IES indicates that the MD of TOR was forced to leave his post for refusing to sign-off a Tolling Agreement (TA) at a rate of US$1.5 per barrel for the utilization of both the Crude Distillation Unit (CDU) and the Residual Fluid Catalytic Cracker (RFCC); instead of an average rate of US$4.5 per barrel for an $11m barrel cargo to be refined.
Currently, TOR charges Vitol/WoodfieldsUS$2.5 per barrel for the utilization of only the CDU, without the use of the RFCC. Should TOR agree to sign for a Tolling Fee of US$1.5 per barrel, the entity would be unable to cover operational cost, let alone start and operate the plant; as TOR needs a minimum revenue of $US6 million on monthly basis to begin to recover, assuming no debt is paid.
It is this unfair and uneconomical agreement that some persons of interest were exerting pressure on Mr. Osei to sign-off, or resign instead. Had he agreed to this, the huge difference in the questionably discounted Tolling Agreement running into millions of dollars would have gone into private pockets as effortless profit.
To the public purse, however, this will be hard debts to be borne by the Ghanaian taxpayer without anyone being prosecuted for it. It would have simply been explained as usual as bad debts due to “management mistakes and wrong judgment.”
It would be recalled that IES in January 2018 called on the government to arrest the leadership crisis at TOR which subsequently led to a loss of over $24 million in just one transaction and bad judgment. Almost three years under his leadership the refinery still struggles to operate at full capacity, with low asset utilization.
While the IES has had issues with Isaac Osei’s leadership of TOR in the past and would have expected to see him sacked months ago, his recent resignation and the issues outlined above present him as a bold spirit in the fight against corruption, stealing, and patronage.
The Institute would do Ghana a great disservice if the issues surrounding Mr. Osei’s resignation are not publicly and clearly laid bare for the Ghanaian public to understand, and to be prepared to bear a potential loss of US$27.5 million to the state, if TOR subsequently agrees to process the 11 million barrels of crude on account of some greedy institution and personalities.
While the IES is fully aware that the government is taking drastic steps to appoint a “more cooperative” MD to take-over
Norwegian oil and gas company Equinor has exercised three new wells for Odfjell Drilling’s Deepsea Atlantic rig.
Furthermore, two additional wells are pending final approval by Equinor and its licensees, the rig owner said in a statement on Friday.
The wells have been exercised under the Continued Optionality mechanism in the contract entered into in May 2018, as part of the overall Master Frame Agreement.
The work will start after the completion of the current scope estimated to be in 2Q 2020.
The approximate contract value for the firm scope is $45 million, excluding any integrated services. In addition, a performance bonus will be applicable.
“The Continued Optionality mechanism in the contract serves to provide a framework for the parties to continue a long-term working relationship, and we believe that the extension is evidence of the importance of Deepsea Atlantic in Equinor’s drilling plans,” Simen Lieungh, CEO Odfjell Drilling said.
The Deepsea Atlantic is a sixth generation deepwater and harsh environment semi-submersible rig capable of operating at water depths of up to 3,000 meters.
This is the second contract extension for Odfjell Drilling this week. Namely, Aker BP earlier this week exercised the first one year option for the Deepsea Nordkapp semi-submersible drilling rig.
In addition, Odfjell Drilling was this week awarded a contract for platform drilling and maintenance and minor modifications for ConocoPhillips offshore Norway. The contract includes drilling operations, work-over campaigns, plug and abandonment activities, and all preventative and corrective maintenance of ConocoPhillips’ drilling facilities on three offshore platforms in the Greater Ekofisk Area.
The Editor of energynewsafrica.com, Michael Creg Afful, has received another award as the Best Energy reporter at the maiden awards ceremony organised by the Tema Chapter of the Ghana Journalists Association.
Creg Afful, a former head of Energy Desk at Madina-based Oman FM, was recognised for his insightful article about the ECG/PSP published in the Ghanaian Times early this year.
“For your entry published in the Ghanaian Times titled ‘ECG takes over…How did we get to Concession? The Awards Committee finds it a well-researched piece on how ECG was being managed leading to the attempt to give it out on concession and adjudged you the Best Energy reporter for the year,” a citation accompanying the award stated.
The ceremony, which was held at Tema Development Corporation (TDC) Limited, also saw some journalists from both public and private broadcasting and print media houses winning awards.
The theme for the maiden awards ceremony was: ‘Addressing the woes of industries; the role of stakeholders and the media’.
Chairman of the Tema Chapter of the GJA, Dominic Hlordzi, in a welcome address, stressed the importance of rewarding hard work and excellence in reporting.
“As we march towards the utopian goal of perfection, awarding good works is critical and, hence, this ceremony, and also to obey the command from the National GJA to the regions to organise the awards to recognise as many journalists as our financial strengths permit.
“Our works have engendered several policy initiatives and actions that culminated in the development of the area. We continue to do our best under difficult circumstances to report adequately on industrial and port related matters, as well as socio-economic and political issues confronting communities in Tema and its environs,” he noted.
Michael Creg Afful commended the executives of the Tema GJA for taking the bold step in spite of the challenges to organise the event to reward journalists in the region.
He congratulated all the award winners and advised them to strive to work harder in the coming year.
Below is the register of all awardees at the maiden event:
Elvis Washington Agyimanku, Citi FM/TV- Best Road Safety Reporter
Josephine Antwi Adjei, TV3- Best Fisheries Reporter
Elizabeth French, GTV- Best Health Reporter
Benjamin Glover, Daily Graphic- Best Water and Sanitation Reporter
Lily Ahulu Adjetey, Obonu FM- Best Environmental Reporter
Della Russel Ocloo, Daily Graphic- Best Maritime Reporter
Evelyn Arthur, B&FT- Best Business and Finance Reporter
Elvis Washington Agyimanku, Citi FM/TV-Best Labour and Industrial Reporter
Honorary Awards:
Rose Hayford Darko formerly of Graphic
Dorothy Asare-Kumah, formerly of Ghanaian Times now with the TDC Company Ltd
Felicia Yeboah, Formerly of GNA
Felicia McEwan-Anamoah, GBC
Richard Attenkah, formerly of the Chronicle Newspaper now News Editor, gameplan.com.gh
GPHA
TDC Company Ltd
As part of its corporate social responsibility to its operational area, Sunon Asogli Power (Ghana) Limited, an independent power producer in the Republic of Ghana, on Thursday, donated some items to St. Mary’s Primary & JHS at Kpone, near Tema, to promote education in the area.
The items included quantities of bags of cement, 90 variety of paints, four desktop computers and about 150 cement blocks.
Sunon Asogli, which was established in 2009, has installed capacity of 560 MW, but currently generates about 350MW of power.
The company, which is a subsidiary of Shenzhan Energy Group Limited, has supported its operational area in diverse ways with the latest being the St. Mary’s Primary & JHS school.
At a brief ceremony to present the items, which coincided with the ‘Our Day’ of the school, Chairman of Sunon Asogli Power (Ghana) Limited Mr Qun Yang, in a speech read for him by Mr Kojo Wang , deputy General Manager said the gesture was to motivate and reward the efforts of the proprietress and management of the school and to encourage them to do more for the kids.
He said management would not only give items to the school but invest in the future of the children.
“Children are the key to a successful future and it is very important they have a safe and comfortable space where they spend most of the early stages of their lives.
“Sunon Asogli Power has been in this community for over 10 years and we are committed to our corporate social responsibility,” he added.
According to him, the company has made it a point to collaborate and support individuals and institutions who are positively impacting lives within the community, stressing that it is for this reason “we are donating some items (paint, cement and other building materials) for the renovation of the classroom blocks and computers the children can use to improve their IT skills.”
Mr. Yang commended the efforts of the teachers and asked the children to take advantage of their time to study in order to secure a brighter future.
“You must learn to listen to your parents and teachers. You are the future leaders of this great country Ghana, and we believe in you. It is our prayer that you will grow to become good and responsible citizens in the society and the world at large,” he advised.
Municipal Chief Executive for Kpone-Katamanso, Solomon Appiah commended management of Sunon Asogli Power (Ghana) Limited for always responding to the needs of the people in the Kpone community and beyond.
He used the occasion to charge the children to eschew bad practices such as excessive play and disrespecting the elderly especially their parents, and instead focus on their education.
Proprietress of the school, Elizabeth A. Ako-Nai thanked the management of Asogli Power Ghana Limited for responding to her request.
The Managing Director of Ghana’s only refinery, TOR, Isaac Osei has resigned from the company.
Sources say Mr Isaac Osei tendered in his resignation letter to the Board at a meeting yesterday.
It is not clear why the former MP for Subin in the Ashanti Region resigned from his post.
TOR was recently in the news for positive reasons after Isaac Osei managed to enter into crude processing tolling arrangement with Woodfields Energy Resources which has kept the refinery running.
Mr Isaac Osei told staff of the refinery at an end of year party on Friday that he was departing from the company.
“This section is going to be my last time,” he said.
“I know that with unity, this company can move forward with the support of the new managing director, “he added.
Ghana National Oil Company (GNPC) is set to construct a 100-bed capacity hospital in three towns in the West African nation.
The three beneficiary towns, namely Walewale in the newly-created North-East, Tema in Greater Accra and Ellembelle in the Western Region.
Vice President of the West African nation, Dr Mahamudu Bawumia, according to information available to energynewsafrica.com, last Tuesday, cut the sod for the commencement of construction work for the Walewale health project.
The Executive Director for GNPC Foundation, Dr Dominic Eduah has told energynewsafrica.com that sod cutting ceremony would be done for the remaining two before the end of this year.
He explained that the national company cares about the health of Ghanaians, hence, its decision to prioritise the health of the people in the three towns.
Dr Eduah noted that because the GNPC places importance on the health of Ghanaians that is the reason it recently sponsored about 200 students to Cuba to undergo study and return to serve the health needs of Ghanaians.
When asked about the cooperation between the GNPC and the beneficiary towns, Dr Eduah noted that there is a stronger collaboration between them
By: Paa Kwasi Anamua Sakyi
A decade ago when Kosmos Energy discovered oil in commercial quantities west of Cape Three Points, offshore Republic of Ghana, Tullow Oil Plc became the Operator of the field (Jubilee field), and currently runs that alongside the Tweneboa-Enyenra-Ntomme (TEN) oil fields.
This is a company that started in a small town called Tullow, about 35 miles south of Dublin, Ireland in 1985, with 42 employees, a revenue of £1.7 million, and recording an operating profit of £250,000 in 1986.
Its first licensing agreement was signed in Senegal in 1986, with gas production and sales commencing in 1987. Between 1988 and 1999, Tullow acquired licenses in Europe, Asia and Africa to explore in the UK, Spain, Italy and South Yemen, Pakistan, Bangladesh, India, Côte d’Ivoire, Egypt and Romania — listing its shares on the London and Irish Stock Exchanges in the process.
In 2000, the Tullow Group bought producing gas fields and related infrastructure in the UK Southern North Sea from BP for £201 million; raising £42 million to help pay for the deal, and giving Tullow substantial production and cash flow for the first time to help it focus on offshore UK, West Africa and South Asia.
Between 2004 and 2007 Tullow took up a range of production and exploration assets in Uganda, Gabon, Equatorial Guinea, Suriname, Namibia, Mauritania and Congo Brazzaville, among others. In 2007, Tullow’s exploration success continued with its largest ever discovery which led directly to the development of the Jubilee field.
On the back of strong commodity prices and increased production following first oil at Jubilee, Tullow had a very strong year financially with an increase in profit after tax of 670 percent to US$689 million. Tullow also listed on the Ghana Stock Exchange (GSE) in July 2011, raising £46 million in the process. In 2012 the Group secured a US$3.5 billion debt refinancing towards the end of the year, and delivered US$2 billion of operating cash flow and established a flexible and strong balance sheet in 2013. Despite the lower price environment in 2014, Tullow maintained production at 73,400 barrels of oil equivalent per day (boepd), mitigating the impact of lower prices by prudent hedging strategy, which helped to underpin revenues of US$1,607 million.
The clear highlight of 2016 was delivering Ghana’s second major oil and gas development, the TEN fields, on time and on budget. Production from TEN, alongside Tullow’s other West African oil production, has begun the generation of positive free cash flow and enabled the business to begin the important process of deleveraging the Group’s balance sheet. This was achieved despite the technical issues Tullow dealt with on Jubilee.
In 2017, Paul McDade became Tullow’s new chief executive officer (CEO) as founder-CEO Aidan Heavey, stepped into the role of Chairman. Tullow moved into a much stronger financial position, generating US$543 million of free cash flow and reducing debt to US$3.5 billion. The group generated record production of 94,700 boepd, beating original guidance and boosted by strong performance at TEN and Jubilee.
Today, the Group has interests in 80 exploration and production licenses across 15 countries which are managed as three Business Teams: West Africa, East Africa and New Ventures. As at 2018, Tullow was operating in 18 countries, with 990 of employees, producing 90,000 boepd, and generating US$1.9 billion of sales revenue.
Changes
On Monday 9th December 2019 Tullow Oil Plc announced that CEO Paul McDade and Angus McCoss, Exploration Director, have resigned from the Board of Tullow by mutual agreement and with immediate effect. Tullow also pronounced the scrapping of its dividends and cutting its production outlook, as it continues to face issues at its main producing assets, the TEN and Jubilee fields in Ghana.
According to the Group, whilst financial performance has been solid, production performance has been significantly below expectations. And following a review of the production performance issues in 2019 and its implications for the longer-term outlook of the fields, 2020 Group production is forecast to average between 70,000 and 80,000 boepd; down from the 87,000 boepd expected for this year 2019, while the production for the following three years will hover around the bottom of that range.
Paa Kwasi Anamua Sakyi,Executive Director of IES
A number of factors have currently been identified as the cause to the reduction in production guidance. On the Jubilee field, these factors include significantly reduced offtake of gas by the Ghana National Gas Company (GNGC) which Tullow makes available at no cost, increased water cut on some wells, and lower facility uptime. At Enyenra (one of the TEN fields) mechanical issues on two new wells have limited the well stock available and there is faster than anticipated decline on this field.
Stock Dive
The cutting of its production outlook and the suspension of its dividend was according to Tullow intended to generate more cash to support future investment plans and current explorations. However this decision sent shares tumbling more than 62 percent, the biggest ever drop (since Tullow started trading some 30 years ago) after the forecast for 2020 production that analysts claim leaves dark clouds hanging over the company’s outlook.
It is the second plunge in less than a month for the shares, which dropped 27 percent on November 13th after the company said it was reassessing the commercial viability of discoveries in Guyana, South America. Cumulatively the stock has dropped more than 90 percent since 2012. And that Tullow Dollar notes due 2025 declined the most since they were issued in March 2018.
Aside Tullow’s unsuccessful forays into East Africa which is believed to be the main reason for the strain on Tullow Oil Plc’s fragile balance sheet, the nose dive in stocks can be attributed to the admission that a landmark oil find in Guyana was of questionable value. Samples collected so far revealed the oil present was “heavy” and “sour”, which renders it harder to transports and refine; causing investors to lose hope on Tullow.
The Chief Financial Officer (CFO) Les Wood of Tullow suggest that the group is in a ‘strong financial position” and that reducing its debt pile will continue to be a priority, though conceding that “in the short-term, the company will be going a little slower.” According to the company, the plan is to reduce capital expenditure, operating costs and corporate overheads. It sees the underlying free cash flow next year of at least US$150 million at US$60 per barrel after capital investment of about US$350 million.
In spite of the assurance given by the CFO, Tullow once a £14 billion company, saw its Net Asset Value (NAV) drop to a little over £560 million. When Tullow Oil Plc issued its initial public offering (IPO) less than 10 years ago, the value of its shares went north of US$20. Last Monday it fell below US$1.00, but has since bounced back up to US$1.50.
Possible Outcomes
According to Bloomberg intelligence, the surprise resignation of the CEO, the suspension of dividend, and the revision of production forecast cast a dark shadow over Tullow’s outlook, while the start of a strategic review increase the likelihood of an eventual sale of the company. The evidence is that Tullow is now a sitting duck — a takeover target. The speculation is that the oil exploration firm is open to receiving bids from potential buyers to help bail it out from the recent challenges, but Tullow has rejected the reports, insisting that there is nothing on the table. Meanwhile, the Executive Chairman of the company, Dorothy Thompson, had earlier hinted that Tullow is open to buyers and would consider any offer at the “proper value”.
The next challenge Tullow faces is a possible no-confidence vote from its partners, especially Kosmos Energy, which has always been very critical of Tullow’s Operator ability ever since the FPSO Turret debacle in early 2016. It appears these issues and challenges may not have been fully discussed and agreed with its partners, especially Kosmos, who should have released a statement as required by the US Securities and Exchange Commission (SEC) had they been aware.
According to a former Chief Executive of Ghana National Petroleum Corporation (GNPC) Alex Mould, Tullow’s transformation from an exploration to a mature producing company, will mean major restructuring and massive layoffs. Again, given Tullow Oil’s position as one of the foremost oil companies in the country, the change in leadership signals the dawn of a new beginning which could have a potential impact on jobs as the company, among other things, look to cost rationalization measures to remain profitable.
Ghana’s total petroleum revenues since the beginning of commercial production up to 2018 is in excess of US$4.9 billion, of which the contributions from the TEN and Jubilee fields, is in excess of US$4.5 billion. These revenues made up of Royalties, Surface Rentals, Carried and Participating Interest (CAPI), and Corporate Income Taxes (CIT) et cetera, remains an integral part of Ghana’s annual budget. The downgrading of Tullow’s production outlook would mean less of produced oil and invariably less oil revenue for the country, in this low oil price environment.
All is not gloomy, and there is always a possibility of a come-back.
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media and CNBC Africa.
The Board of Directors of the African Development Bank has approved a Partial Risk Guarantee (PRG) of $100 million to support the Sahofika hydro-power project in Madagascar.
The project, which will add 205MW of renewable energy generation capacity to the national grid, will benefit over 2 million people.
The Bank’s support will include risk mitigation to the project developers and the debt providers by supporting the payment obligations of JIRAMA, the state-owned off-taker.
The Sahofika hydro power project, located on the Onive River, 100km southeast of the capital Antananarivo, will involve the design, construction and operation of a 205 MW hydroelectric power plant, the construction of a 110 km transmission line to the site, and construction of camp facilities and 112 km of access roads.
Upon completion, the project will generate 1,570 GWh of renewable power annually. The project will enable Madagascar to displace up to 90% of thermal energy generation, to unlock its great hydro-power potential, and to expand its energy mix to more renewable sources. It will also contribute to the reduction of average end-user tariffs, and of greenhouse gas emissions amounting to 32,469 kt of CO2 over the 35-year concession period.
The Bank’s Acting Vice-President for Power, Energy, Climate Change & Green Growth, Wale Shonibare, said, “The Bank’s support to the national utility, JIRAMA, through the PRG provides much needed credit enhancement as JIRAMA continues to build its track-record as a bankable electricity off-taker that will in-turn mobilize investments into Madagascar’s energy sector. This will enable the country to achieve its strategic goals in terms of increased energy access, a more diversified energy mix and least cost generation”.
“The project, which supports Madagascar’s ongoing reforms in the energy sector, is expected to reduce the share of thermal power generation in the country’s energy mix and significantly reduce electricity tariffs. The displacement of thermal power generation will also enable JIRAMA to considerably reduce its fuel purchase and decrease subsidies from the government to sustain its operations,” Aida Ngom, the Bank’s acting Director for Energy Financial Solutions, Policy and Regulation also said in a statement copied to energynewsafrica.com
The Sahofika Project is aligned with the Bank’s High 5 Priority to “Light Up and Power Africa”, the Bank’s focus on energy access, and strengthening infrastructure for inclusive growth, as well as Madagascar’s Nationally Determined Contributions (NDCs) and the country’s Emergence Plan which prioritizes boosting the power sector and increasing electricity access.
The ceremony, which was held at Tema Development Corporation (TDC) Limited, also saw some journalists from both public and private broadcasting and print media houses winning awards.
The theme for the maiden awards ceremony was: ‘Addressing the woes of industries; the role of stakeholders and the media’.
Chairman of the Tema Chapter of the GJA, Dominic Hlordzi, in a welcome address, stressed the importance of rewarding hard work and excellence in reporting.
“As we march towards the utopian goal of perfection, awarding good works is critical and, hence, this ceremony, and also to obey the command from the National GJA to the regions to organise the awards to recognise as many journalists as our financial strengths permit.
“Our works have engendered several policy initiatives and actions that culminated in the development of the area. We continue to do our best under difficult circumstances to report adequately on industrial and port related matters, as well as socio-economic and political issues confronting communities in Tema and its environs,” he noted.
Michael Creg Afful commended the executives of the Tema GJA for taking the bold step in spite of the challenges to organise the event to reward journalists in the region.
He congratulated all the award winners and advised them to strive to work harder in the coming year.
Below is the register of all awardees at the maiden event:
Elvis Washington Agyimanku, Citi FM/TV- Best Road Safety Reporter
Josephine Antwi Adjei, TV3- Best Fisheries Reporter
Elizabeth French, GTV- Best Health Reporter
Benjamin Glover, Daily Graphic- Best Water and Sanitation Reporter
Lily Ahulu Adjetey, Obonu FM- Best Environmental Reporter
Della Russel Ocloo, Daily Graphic- Best Maritime Reporter
Evelyn Arthur, B&FT- Best Business and Finance Reporter
Elvis Washington Agyimanku, Citi FM/TV-Best Labour and Industrial Reporter
Honorary Awards:
Rose Hayford Darko formerly of Graphic
Dorothy Asare-Kumah, formerly of Ghanaian Times now with the TDC Company Ltd
Felicia Yeboah, Formerly of GNA
Felicia McEwan-Anamoah, GBC
Richard Attenkah, formerly of the Chronicle Newspaper now News Editor, gameplan.com.gh
GPHA
TDC Company Ltd
At a brief ceremony to present the items, which coincided with the ‘Our Day’ of the school, Chairman of Sunon Asogli Power (Ghana) Limited Mr Qun Yang, in a speech read for him by Mr Kojo Wang , deputy General Manager said the gesture was to motivate and reward the efforts of the proprietress and management of the school and to encourage them to do more for the kids.
He said management would not only give items to the school but invest in the future of the children.
“Children are the key to a successful future and it is very important they have a safe and comfortable space where they spend most of the early stages of their lives.
“Sunon Asogli Power has been in this community for over 10 years and we are committed to our corporate social responsibility,” he added.
According to him, the company has made it a point to collaborate and support individuals and institutions who are positively impacting lives within the community, stressing that it is for this reason “we are donating some items (paint, cement and other building materials) for the renovation of the classroom blocks and computers the children can use to improve their IT skills.”
Mr. Yang commended the efforts of the teachers and asked the children to take advantage of their time to study in order to secure a brighter future.
“You must learn to listen to your parents and teachers. You are the future leaders of this great country Ghana, and we believe in you. It is our prayer that you will grow to become good and responsible citizens in the society and the world at large,” he advised.
Municipal Chief Executive for Kpone-Katamanso, Solomon Appiah commended management of Sunon Asogli Power (Ghana) Limited for always responding to the needs of the people in the Kpone community and beyond.
He used the occasion to charge the children to eschew bad practices such as excessive play and disrespecting the elderly especially their parents, and instead focus on their education.
Proprietress of the school, Elizabeth A. Ako-Nai thanked the management of Asogli Power Ghana Limited for responding to her request.
