The Time Has Come For American Super Dividends Through Pro-Growth Angolan Investments
On the 16th of October, the U.S. – Angola Chamber of Commerce, in partnership with the Embassy of Angola in the United States and the Angola Representation at the World Bank Group, will host the first Angola Economic Forum (AEF), just before the 2019 Annual World Bank – IMF meeting.
The Africa Energy Chamber (https://EnergyChamber.org/) endorses this event and encourages US based investors to take a new look at Angola in light of recent improvements made in Angola’s business operating environment.
The timing and the theme of the event, “Unlocking Angola’s Growth Opportunities”, couldn’t be more appropriate. After nearly two years of deep institutional, legal and fiscal reforms, the Angolan business landscape is almost hard to recognize for anyone familiar with the business environment in the country over the last decade. The government of President João Lourenço has kept its promise to overhaul the country’s financial system, deconstruct chronically established rent-sinking structures and, above all, take direct aim at reorganizing the country’s economic backbone, its oil and gas industry.
From the onset of his ascension to power, President Joao Lourenco sought to make changes in key institutions like the National Oil Company Sonangol and the Oil ministry, favoring tried and proven professionals to political appointees as has often been the case in the past.
At the same time, the government took the landmark decision of stripping Sonangol from its regulatory role, putting an end to decades of conflicts of interest that stifled decision making and investment in the key oil and gas sector. Sonangol is no longer responsible for awarding oil exploration and production licenses to companies to which, it is technically a competitor. That is now the responsibility of the newly-created National Petroleum, Gas and Biofuels Agency (ANPG), an independent institution that, since 2018, manages the country’s oil and gas licensing procedures.
The Petroleum Agency is guided by a new oil and gas framework that has been in place over the past two years, a new natural gas specific legal framework, the first in the country’s history, was also drafted to provide clarity and give license-holders the right to explore these resources for their own benefit and that of the country. A new fiscal framework was drafted and implemented to make the industry more competitive and attractive to foreign investors and, more specifically, a comprehensive master-plan was drawn for the country’s extensive network of marginal fields, with which the government hopes to address dwindling production rates while it waits for renewed investment in exploration to pay off.
The energy sector is second to none on Lourenço’s agenda. The Minister Dimantino Azevedo has made it a priority to listen and be proactive to the industry concerns and create an enabling environment to execute Lourenço’s agenda. Opportunities to invest span from exploration in new blocks on offer to mid-stream refinery and downstream distribution expansion projects. Plans have been drawn to boost the country’s LNG production, and extensive works for new refinery capacity are well underway to rid the country of its dependency on fuel imports and permit Angola to become the refining hub for the subregion. A plan for monetizing Angola’s natural gas reserves and using them for power generation and industrial expansion has also been devised.
Beyond the paperwork, the regulatory institutions have been thinned, made more efficient and goal-oriented, while licensing procedures have been streamlined and are now much easier and quicker to navigate. Good governance and efficiency are driving the development of a conducive and enabling business environment. It’s a welcome all out house-cleaning that was long overdue.
So now, the time has come to address investors and partners, and open the doors for new mutually beneficial relations to be born.
Perhaps no action speaks louder in this sense than the Marginal Fields Bid Round that the Petroleum Agency and the Ministry of Mineral Resources and Petroleum is launching on the 3rd of October 2019. 10 fields will be put on offer in 2019, block 10 of the Benguela basin and blocks 11, 12, 13, 27, 28, 29, 41, 42 and 43 in the Namibe basin. The ongoing roadshow by the Petroleum Agency that had stopovers in Houston, Dubai and London was very widely attended, an indication of the interest that Angola’s oil and gas sector continues to foster with investors.
The fiscal and contractual incentives inscribed in the new fiscal and legal frameworks overseeing these fields have turned what used to be uneconomic prospects, into extremely enticing opportunities for capable oil and gas players. This is a landmark moment, as the last time an international public tender was held for oil licenses in Angola was back in 2011. The ANPG plans to hold a new tender every year in the run up to 2025. 55 licenses have been earmarked for bid rounds during this period, with estimated reserves in the billions.
The official announcement for the tender was made in early September 2019, in Luanda. Unsurprisingly, the second stop on the map of roadshows the ministry has prepared took place in Houston, Texas, on the 10th of September. It is no secret that the Angolan government has sustained a decades-long relationship with many of the US’s biggest oil players. Today, Chevron, ExxonMobil, Baker Hughes or Halliburton are dominant names in the market, alongside a few of their European counterparts.
The oil companies in particular, as describe in NJ Ayuk’s “Billions at Play: The Future of African Energy and Doing Deals,” which is currently available for order on Amazon, was a fundamental partner of the Angolan government in sustaining and developing the country’s oil industry through a civil war and many different crisis.
Now, Angola is again offering skillful American players of all sizes the opportunity to participate in mutually-beneficial partnerships that will contribute to the healthy and sustainable development of this world-class oil play.
After a successful roadshow in Houston, investors now have the opportunity to further understand the major opportunities available in the Angolan market by attending the Angola Economic Forum. This will be the first in a series of annual events designed to showcase the economic opportunities available in the Angolan market and build bridges with competent and capable partners. The one-day forum will focus on Angola’s economic outlook, its financial systems and, notably, on the recently-implemented reform efforts and the opportunities for private capital investments available today.
There has never been a better time to understand this market, so full of growth potential, at a moment when opportunities are being built on principles of transparency, profitability and long-term partnerships. Perhaps the most exciting oil play in Africa is at the verge of a new era, and American players should keep their eyes and ears open if they don’t want to miss out on the game.
By Sergio Pugliese, Angolan President of the African Energy Chamber and Verner Ayukegba, Senior Vice President of the African Energy Chamber
Ghana: Notorious Cartel Stealing Petroleum Revenue – Senyo Hosi Claims
Chief Executive of the Chamber of Bulk Oil Distributors (CBOD) in the Republic of Ghana, Senyo Hosi, has said an influential cartel of industry players are stealing Ghana’s petroleum revenues.
Mr Hosi’s comment come on the back of revelations in CBOD’s 2018 Industry Report showing that, some one billion litres of the refined commodity could not be accounted for between 2015 and 2017.
Speaking on an Accra based Joy FM, Mr Hosi said traceable data from official sources show that this loss of litres translates to almost GH¢1.4 billion.
He said the persons behind this systematic theft of the petroleum revenue are part of a ruthless cartel who are able to recruit even very powerful public and private officials.
“It’s a cartel of industry players and may include politicians, the BDCs [Bulk Distribution Companies] and OMCs [Oil Marketing Companies]…it involves a lot of people; possibly officials also from the regulator [National Petroleum Authority],” he said.
This cartel, whose members he has refused to identify, presents a major threat to the country’s petroleum revenue.
According to Mr Hosi, this GH¢1.4 billion loss (the estimated cost of the one billion litres that cannot be accounted for) occurred through petroleum tax revenue evasion.
The latest report by the CBOD also noted that for the period 2015 to 2018, total taxes evaded based on official unaccounted stocks stood at GH¢1.3 billion while total under-reported taxes based on official accounted sale volume after adjustments for exemptions stands at GH¢1.2 billion.
However, an additional GH¢238.96 million was also stolen through the evasion of regulatory margins.
“This implies that the country has lost a total of GH¢2.6 billion in taxes for the period. Combined with the evaded regulatory margin of GH¢231.53 million, a total GH¢2.790.59 million has been lost to the nation in taxes and regulatory margins for the period 2015 to 2018,” the report recounted Ghana’s revenue loss.
Although the petroleum tax revenue increased on the back of reduced illegal trades which reflected in an increase in official volumes, under-reporting of taxes on official sales by GH¢433.75 million in 2018 after adjusting for tax exemptions and waivers was not eliminated.
Sonatrach Plans To Partner With ExxonMobil
Algeria’s state-owned oil and gas firm, Sonatrach, says it has held meetings with US supermajor ExxonMobil to discuss possible partnerships.
Sonatrach offered no further details on the meetings that were held on September 25 and 26.
The news follows reports from Sonatrach that it had been holding talks with Chevron in early September.
Sonatrach is looking to boost output to increase revenues after a decline in oil prices hit its budget hard.
In a statement the state-run firm said it had been holding talks with ExxonMobil earlier in the year but reported in March that talks with the US supermajor on developing a gas field had stalled
Ecuador Plans To Quit OPEC In January 2020
Ecuador has hinted of plans to leave the Organization of Petroleum Exporting Countries in January 2020. For OPEC, the departure matters more in symbolism than barrels — Ecuador is one of its smallest producers, but stated clearly it wants to leave the group to boost oil revenues at a moment when the whole cartel is suffering from low prices. It also comes less than a year after Qatar announced it would leave, saying it wanted to focus on natural gas production.
“Ecuador is being honest about not being able to subject itself to further cuts,” said Schreiner Parker, vice president for Latin America at consultant Rystad Energy. The departure comes amid efforts by Ecuadorian President Lenin Moreno to reverse economic policies imposed by his predecessor. “Moreno wants to pursue his own policies, and is more market-friendly than people originally thought, ” Parker said.
Ecuador has been in breach of its promised production limits every month this year. In 2017, Ecuador said it wasn’t going to abide by the quotas, prompting a phone call from Saudi Arabia’s then-energy minister, Khalid al-Falih. In February, Ecuador’s Resources Minister Carlos Perez said again that the nation would produce more than its limit.
“We will continue to produce what we need,” Perez said at the time. “Do not forget that what is decided in OPEC is not mandatory.”
Ecuador has left before — it joined OPEC in 1973 and suspended its membership in 1992. Former President Rafael Correa restarted its membership in 2007. Other countries have left and returned, including Gabon and Indonesia.
The exit sends a message to the oil industry that Ecuador is open for business in a region where Venezuela is hobbled by sanctions and economic collapse, Mexico has halted any new bid rounds, and political uncertainty is restraining investments in Argentina. Removing the risk of future OPEC-related constraints on production will make it easier to attract drillers and get financing.
“It sends a signal that at the moment their interest is in bringing in a lot of investment, and it may open up new markets. You have to figure all that was part of the decision making,” John Padilla, managing director of IPD Latin America LLC. “Particularly given the vacuum created by the sanctions in Venezuela and the drop off in Mexican production, it’s an interesting marketing signal.”
Oil fell to the lowest in almost two months on Tuesday as the outlook for the global economy darkened, signaling that OPEC will need to cut production further if it wants to balance out the global market. The cartel will need to cut 3 million barrels a day by the end of 2020 to shore up prices, according to estimates from Rystad. OPEC output sank the most in 16 years last month after an attack on Saudi Arabia’s energy facilities. The group and its allies have committed to cutting supply by 1.2 million barrels a day to support prices.
OPEC didn’t immediately respond to a telephone call and email made after normal business hours.
Ecuador is currently developing a 1.6 Bbbl heavy crude oil field in part of the Yasuni National Park. Protests by indigenous and environmental organizations have stopped efforts to develop the oil industry in the southern half of its Amazon territories, which officials have pushed for opening to tenders as soon as 2020.
Perez, a career private sector oilman, has scrapped plans for a refinery project and reintroduced production-sharing agreements that helped to attract foreign oil investment until the prior president scrapped them. Correa raised taxes on the industry and seized assets, including from oil company Perenco SA, which won an arbitration case last month that will force Ecuador to pay close to $500 million.
“Ecuador didn’t fulfill quotas at 100%. Occasionally, the government used the argument of quotas to impose limits on private companies’ output,” said local oil analyst Fernando Santos, a former chief legal adviser to OPEC and Ecuadorian oil minister.
Ecuador’s reversal of Correa’s brand of 21st century socialism also includes a renewal of ties with the International Monetary Fund and other multilateral lenders, who have pledged to provide $10.2 billion in loans through 2021. The exit announcement came just before the president was due to unveil structural reforms to meet IMF program requirements.
Still, the news was a surprise to some.
“I had no idea this was coming,” said Santos, who only days ago had recommended Ecuador leave OPEC while sitting on a panel in Quito with Perez. “Major companies were always in fear of coming to Ecuador and having the OPEC quotas imposed on them.”
Rosneft Strikes Oil Off Sakhalin Island
Russian oil firm Rosneft has made an oil discovery offshore the Sakhalin Island in Russia’s Far East.
“As part of its exploration campaign, Rosneft Oil Company has successfully completed the drilling of the first prospecting and appraisal well at the Vostochno-Pribrezhny license block on the shelf of Sakhalin Island, resulting in the discovery of a new oil field,” Rosneft said.
The Vostochno-Pribrezhny license block is located in the Nabilsky Bay of the Sea of Okhotsk.
The well was drilled by Rosneft’s drilling contractor RN-Burenie, to the measured depth of 3,047 meters, and a set of geophysical studies in the open hole confirmed the oil saturation of productive formations.
“Preparations are now underway to test the well in casing. According to preliminary estimates, the reserves are up to 2 million tonnes of oil, which will be included in the State balance sheet in 2019,” Rosneft said.
“The first well drilled in the licensed area at the moment confirms the forecast made earlier by the Company’s geologists for the resource potential of the entire area of 11 million tonnes of oil equivalent,” Rosneft added.
Disaster: 15 Fuel Tankers Belonging To Goodness Energy Burnt To Ashes At Kpone(Photos)
A fuel tanker yard belonging to Goodness Energy, one of the Oil Marketing Companies in the Republic of Ghana was, on Wednesday, gutted by fire, burning about 15 tankers in the process and an office facility in the yard located in Kpone farm area.
The fire was believed to have started at about 8pm.
It is not yet clear what caused the inferno.
The situation drew scores of people living around the area to the scene to catch a glimpse of the unfortunate development.
When energynewsafrica.com‘s team got to the scene at about 10pm, fire fighters from the Ghana National Fire Service (GNFS) were tirelessly working to bring the fire under control.
About five fire tenders from the various fire stations were deployed to the area to fight the fire.
According to an eyewitness who spoke to energynewsafrica.com, he was returning from work when he heard of an explosion and traced the smoke to the scene.
He said when arrived at the scene, he saw thick smoke coming out from the tanker yard.
He said when the fire started, there were a couple of drivers around, explaining that some managed to quickly drive their tankers out of the yard.
He commended the personnel of the Ghana National Fire Service for their efforts.
At the time energynewsafrica.com was leaving the fire scene at about 1am, personnel of the Ghana National Fire Service were still battling the fire.
Officials of Goodness Energy who were at the scene were tight-lipped and would not comment.
Source: www.energynewsafrica.com
Source: www.energynewsafrica.com Ghana: Gov’t Plans To Clear Outstanding Legacy Debts To BDCs By End Of 2019, After Paying US$929M
The Government of Ghana is planning to clear all the legacy debts owned the Bulk Oil Distribution Companies by the end of 2019.
So far, government has paid about US$929.58 million between 2011 and 2019.
Chief Executive Officer of Ghana’s National Petroleum Authority (NPA), Mr Alhassan Tampuli, who revealed this at the launching of the 2018 Industry Report prepared by the Chamber of Bulk Oil Distributors (CBOD), described the development as commendable.
“There was progress made on government’s legacy debt to BDCs with the payment of all outstanding principal sums (USD427.11mn) and the validation of the interest components.
This brings to total an amount of USD806.25mn in subsidies incurred by government through its subsidy policy between 2011 and 2015.
“A total of USD929.58mn has been paid between 2011 and September 2019 with a total of USD52.62mn outstanding and expected to be paid by end of 2019, ” Mr Alhassan Tampuli explained on Tuesday, during the launch of the 2018 Industry Report prepared by the Chamber of Bulk Oil Distributors (CBOD).
Growth
Touching on how the downstream subsector has performed over the past two years, Mr Alhassan Tampuli noted that the annual growth in consumption of petroleum products reduced by 9 percent in 2016, increased by 6 percent in 2017 and reached its highest so far in 2018. 2018 saw a 15 percent growth in consumption from 3.4 million Mt in 2017 to 3.9 million Mt in 2018.
This, he said, rode on the back of successes realised in the fight against the illicit petroleum trade, thereby increasing official demand for gasoline, gasoil and LPG.
“This volume of consumption is the highest observed to date and it bears eloquent testimony of significant occurrence of economic activities anchored on the enabling environment provided by the government through deliberate policy initiatives aimed at propelling the private sector growth, since petroleum drives economic activities. It is also a testament of significant successes in the NPA’s efforts towards curbing illicit fuel activities in the country,” he said.
Fuel Adulteration
On fuel adulteration, Mr Alhassan Tampuli said his outfit was aware that petroleum products that did not meet national specifications were not allowed entry into the market by the NPA.
However, he said as a result of smuggling and dumping of petroleum products meant for export onto the market in recent years, the petroleum product marking scheme recorded high failure rates in 2016 and 2017.
Specifically, the recorded failure rate among retail stations averaged 6.20 percent and 4.91 percent in 2016 and 2017 respectively.
“It is gratifying to note that, our stringent measures in tackling fuel smuggling among others, have been successful as failure rate declined to less than one percent in 2018.”
Source:www.energynewsafrica.com
Ghana: Chamber Of Bulk Oil Distributors Outdoors 2018 Industry Report
The Chief Director at Ghana’s Ministry of Energy Mr Lawrence Apaalse has launched the 2018 Industry Report which was prepared by the Chamber of Bulk Oil Distributors (CBOD).
Among the key issues highlighted in the report include fuel quality policy, license rationalization, health safety security and environment policy, Ghanaian content and Ghanaian participation policy.
The report also talks about steps taken by the National Petroleum Authority (NPA) to address fuel smuggling in the downstream petroleum sector.
On the issue of the Liquid Petroleum Gas (LPG) policy intervention, the report projects disruption in the gas market structure.
“The report anticipates the likelihood of an upward pressure on pre-tax prices of LPG and disruptions in the marketing and retailing structure of the LPG industry. It also projects significant disruptions in the retail market structure for LPG. The LPG Marketing Companies’ (LPGMCs) dominance of the market (62% share) is expected to be threatened by the more consumer-friendly Oil Marketing Companies (OMCs) (38% share), which are generally more accessible by virtue of their location, and significantly out-number the LPG outlets by a ratio of about 5:1.”
Again, the report also calls on LPGMCs to invest in consumer-friendly outlets which are likely to improve their businesses. “It may be necessary that LPGMCs swiftly invest in multiple consumer-friendly outlets, like self-service propane outlets in the US, which are operated at supermarkets, and develop a delivery-to-consumer option to stand a fighting chance of maintaining their market share.”
The report also commends the government for the payment of legacy debts to the BDCs.
“There was progress made on government’s legacy debt to BDCs with the payment of all outstanding principal sums (US$427.11 million) and the validation of the interest components. This brings to total an amount of US$806.25 million in subsidies incurred by government through its subsidy policy between 2011 and 2015. A total of US$929.58 million has been paid between 2011 and September 2019, with a total of US$52.62 million outstanding and expected to be paid by year end 2019. The total haircut accepted by BDCs amounts to US$432 million.”
The African Center for Energy Policy (ACEP) contributed to the report
Ghana: GH¢2.7Billion Lost To Taxes, Margins In Petroleum Downstream Sector
Ghana lost GH¢2.7 billion in taxes and regulatory margins in the petroleum downstream sector from 2015 to 2018, the latest report on activities in the downstream petroleum sub-sector has indicated.
According to graphic.com.gh, the report which was prepared by the Ghana Chamber of Bulk Oil Distributors (CBOD), showed that the country lost GH¢2,559.08 million in taxes and evaded the regulatory margin of GH¢231.53 million within the three-year period.
“For the period 2015 to 2018, total taxes evaded based on official unaccounted stocks stand at GH¢1,390.73 million, while total under-reported taxes based on official unaccounted sale volume after adjustments for exemptions stand at GH¢1,168.33 million,” it added.
Illicit trade
Speaking at the launch of the 2018 Industry Report, Chief Executive Officer of the CBOD, Mr Senyo K. Hosi, said petroleum tax revenue increased on the back of reduced illegal trade, which reflected in an increase in official volumes, saying the under-reporting of taxes on official sales was GH¢433.75 million in 2018.
The report reviewed the policy, finance, market and infrastructure sectors and issues related to the period under review. It also shared an outlook and recommendations on the downstream market and its happenings.
Mr. Hosi said the fight against illicit trade in refined petroleum products was yielding results, leading to the country saving nearly GH¢1 billion, which would have otherwise been lost through smuggling.
He said about GH¢952 million was also saved from blocking the sale of illicit petroleum products in the country in 2018, a result of the interventions by the National Petroleum Authority (NPA) to curb illicit trade in petroleum products.
According to him, a reconciliation of the official national petroleum stocks movement data revealed that 54.36 million litres, 168.48 litres and 794.75 million litres could not be accounted for in 2015, 2016 and 2017, respectively.
“The associated petroleum tax revenue evasion to these stocks stands at GH¢1,438.75 million, while the associated evaded regulatory margins amount to GH¢238.96 million,” he added.
National consumption
On national consumption of petroleum products, Mr Hosi said it was about 3.88 million tonnes in 2018, 12.3 per cent higher than the 2017 consumption of 3.46mt.
A total of 3.73 million tonnes was consumed by the non-power sector, representing 83 per cent of gross consumption, while 738,076 million tonnes (17 per cent) was consumed by the power sector as fuel for power plants, crude for power and propane.
Out of the 165 registered oil marketing companies (OMCs) and LPG marketing companies (LPGMCs) in 2018, he said, 14 were active, 63 sold products above 10,000 million tonnes, while 88 sold volumes below 10,000 million tonnes.
Source:graphic.com.gh
Ghana: Bawumia Justifies 5.94 Percent Increment In Electricity Tariff
Ghana’s vice president, Dr. Mahamudu Bawumia, has rejected claims by the country’s opposition party that the Akufo-Addo Government is, contrary to its promise while in opposition, increasing electricity tariffs rather than reducing them.
Speaking at the launch of four initiatives by the Youth Employment Agency in the West Africa, Dr Bawumia insisted that available records do not support the claim by the opposition NDC, saying a comparative analysis of the records would clearly show which party has burdened Ghanaians with high electricity tariffs.
The Public Utilities Regulatory Commission (PURC) announced a 5.94 per cent increase in electricity tariffs on Monday 30th September, 2019, barely three months it announced 11.17 percent increment.
In a statement signed by the Executive Secretary, Mami Dufie Ofori and copied to energynewsafrica.com Monday, the PURC explained that the increase in tariffs was determined by the Automatic Adjustment Formula (AAF) which considers eight factors including Ghana cedi-US dollar exchange rate, inflation, price of crude oil and natural gas and fuel mix (Crude Oil, Natural Gas and Distillate Fuel).
Other factors are generation mix (Hydro and Thermal), power purchase cost, demand forecast and electricity cost (A major cost component in water production).
However, the opposition party claimed that Government had mismanaged the electricity sector, hence the “unprecedented” increase.
But the Vice President maintained that the Nana Akufo-Addo government had kept faith with Ghanaians and had for the first time in Ghana’s history, cumulatively reduced tariffs since assuming office on January 7, 2017.
“You would have heard that the PURC has increased electricity tariffs by 5.94 percent. It is very important for us to have some perspective on this, because electricity has a bearing on the cost of doing business and you have to be having your eye on it so that we don’t overburden businesses.
“What was the situation before we came into office? I’ll give you a background. In 2010 the average increase in electricity was 89 per cent; 2011 was 10 per cent; 2013 was 78 per cent; 2014 was 28.3 per cent; 2015 was 59.2 per cent. Between 2013 and 2016, just the last four years of the NDC government, the cumulative increase in electricity tariff was cumulatively 166 percent.
“It is against that background that we said ‘this is not good for job creation’. If you want to create jobs you have to reduce the burden of electricity tariffs on our people. And this is why when we came in – and it had never been done before – that we reduced electricity prices for businesses by 30 per cent and for households by 17.5 per cent; average of around 22 per cent in 2018.
“Notwithstanding that, earlier this year in July there was an increase in electricity prices of 11 per cent and yesterday of 5.6 per cent. When you take the total cumulative increase on average, between 2017 and today you have a cumulative decrease of about 5 per cent.
“The NDC in their last four years increased tariffs by 166 per cent; increase. We have come down since we’ve been in government by about 5 per cent. So it is still ‘boot-for-charlie wote’ when you come to electricity tariffs.”
Source:www.energynewsafrica.com
Ghana: War Against Fuel Smuggling Resulted In Saving Nearly GH¢1bn In 2018
Ghana’s fight against illicit trading of refined petroleum products has yielded results, with the latest report on the activities in the downstream petroleum subsector showing that the West African country saved nearly GH¢1 billion, which would have otherwise been lost through smuggling of the products.
The 2018 Industry Report which was prepared by the Chamber of Bulk Oil Distributors (CBOD) showed that GH¢952 million was saved from blocking the sale of illicit sale of petroleum products in the country in 2018.
This was a reversal from the losses made in the last three years – 2015 to 2017- through unaccounted stock and evasion of taxes.
The savings was as a result of interventions by the National Petroleum Authority (NPA) to curb the illicit trade of petroleum products and ensure that it was sold through official channels, the annual report of the Chamber of Bulk Oil Distributors (CBOD) has said.
“In 2018, no loss related to unaccounted stocks is estimated as it was revealed that 574.25 million litres more than the official stocks saleable in the country were sold. This indicates that smuggled stocks in the monitored depots must have been trapped as a result of the NPA’s regulatory interventions to curb the illicit trade of petroleum products and forced to be sold through official channels.
“This saved the nation GH¢797.49 million in taxes and GH¢154.93 million in regulatory margins yielding a total savings of GH¢952.42 million,”graphic.com.gh quoted the 2018 Industry Report as saying.
According to the report, the NPA, aided by elements of the central government made progress towards tackling the challenges of smuggling and tax evasion some of which were covered in the 2017 CBOD industry report.
“This was a welcome move in the industry and yielded tangible results even though there remains a lot to be done to bring sustainable finality to the illegal trade,” the report stated.
The report further explained the interventions by the NPA minimised the evasion of official channels of distributions and, hence, an increase in official volumes of the most tax-evaded products, AGO regular and PMS, which shot up by 17 per cent and 19 per cent respectively.
Losses
A reconciliation of official national stocks movement data revealed that 54.36mn litres, 168.48mn litres and 794.75 million litres could not be accounted for in 2015, 2016 and 2017 respectively.
Also, the associated petroleum tax revenue evasion to these stocks stood at GH¢1.4 billion while the associated evaded regulatory margins amounted to GH¢238.96 million.
For the period 2015 to 2018, total taxes evaded based on official unaccounted stocks stood at GH¢1.3 billion while total under-reported taxes based on official accounted sale volume after adjustments for exemptions stands at GH¢1.2 billion.
“This implies that the country has lost a total of GH¢2.6 billion in taxes for the period. Combined with the evaded regulatory margin of GH¢231.53 million, a total GH¢2.790.59 million has been lost to the nation in taxes and regulatory margins for the period 2015 to 2018,” it stated.
Although the petroleum tax revenue increased on the back of reduced illegal trades which reflected in an increase in official volumes, under reporting of taxes on official sales by GH¢433.75 million in 2018 after adjusting for tax exemptions and waivers was not eliminated.
Gross consumption
Ghana’s gross national consumption reached 4.46 million metric tonnes (mt) in 2018. A total of 3.73mn mt was consumed by the non-power sector representing 83 per cent of gross consumption while 738,076 mt (17%) was consumed by the power sector as fuel oil for power plants, crude for power and propane.
Petroleum products consumption in 2018 was about 3.88mn mt, 12.3 per cent higher than 2017 consumption of 3.46mn mt.
“This rode on the back of successes realised in the fight against the illicit petroleum trade, thereby increasing official demand for gasoline, gasoil and LPG. This volume of consumption is the highest observed to date,” it said.
Source:www.energynewsafrica.com
Equinor Awards ‘First Ever Service Contract For Subsea Drones In Oil & Gas’
Norway’s Equinor has awarded Italy’s Saipem a subsea service contract which entails using a wireless underwater intervention drone and an ROV on the Njord field located offshore Norway, Offshoreenergytoday. com has reported.
The contract will make Equinor the first user of technology expected to be completed in 2020, Equinor said on Wednesday
“This is a historic contract in the oil and gas industry. It is the first contract signed for the use of advanced wireless drone services. We are pleased to secure a contract that will bring subsea technology a big step forward. Equinor aims to help shape the development of this type of technology, which this contact underscores,” Anders Opedal, executive vice president, Technology, Projects & Drilling said
The services from Saipem Limited Norway Branch will be employed when the Njord field resumes production in 2020. Lasting for ten years, the contract has five two-year options for additional extension. The value of the fixed part of the contact is estimated at about EUR 40 million ($43.6M). The contact lays down requirements for permanent presence in Norway and Norwegian-speaking personnel.
The new technology employs an underwater intervention drone (Hydrone-R) and an all-electric work class ROV (Hydrone-W). The drone may be autonomous below Njord for months between scheduled maintenance, whereas Hydrone-W will be connected to the platform like a traditional ROV. Both are electric and can be operated without a surface vessel.
The use of this technology will therefore contribute to significant carbon reduction, according to Equinor. In addition, the response time will be reduced. Furthermore, the operations will not be dependent on weather conditions.
“It is very exciting to be a pioneer for this type of technology offshore. Enabling personnel to plan and perform operations from shore rather than being flown offshore, this path-breaking technology will also reduce costs,” Olav A. Godø, operations manager, Njord said.
Equinor’s proprietary docking station for data transmission and subsea induction charging will be installed below Njord and used by the underwater drone.
In a separate statement on Wednesday, Saipem said that the agreement with Equinor is the first ever worldwide service contract for subsea drones signed in the offshore oil & gas industry, thus making the Hydrone-based technology an unrivaled pioneer.
Hydrone-R operations will start from 1Q 2020, immediately following completion of the endurance tests currently underway, while Hydrone-W will be delivered in 2021.
Francesco Racheli, COO of Saipem’s E&C Offshore Division, said: “Today, we are making the history of subsea robotics: our visionary Hydrone program, launched back in 2015, has proven to perfectly match Equinor’s challenging requirements. Cooperation with one of the key players in the energy market by delivering our top-notch technology in the years to come is a very significant milestone for us.”
Putin May Meet With Exxon’s Chief Executive This Week
Russia’s President Vladimir Putin is likely to meet the Chief Executive of U.S. oil supermajor ExxonMobil, Darren Woods, on the sidelines of an energy conference in Moscow this week, Dmitry Peskov, a spokesman for the Kremlin, said on Tuesday.
According to the spokesman for the Russian president, the Kremlin hopes that Putin could discuss energy issues with Woods on the sidelines of the forum on Wednesday.
Woods, as well as BP’s Chief Executive Bob Dudley, are slated to speak at the ‘Russian energy week’ forum today (Wednesday) in a panel that will also include a speech from OPEC Secretary General Mohammad Barkindo.
Ministers from OPEC countries, including Saudi Arabia’s new energy minister Prince Abdulaziz bin Salman, will also take part in the conference.
Putin plans to meet with OPEC’s Barkindo to discuss the cooperation between Russia and OPEC, including the production cut deal that has been in place since the beginning of 2017, Kremlin’s Peskov said last week, as carried by Russian media.
The Russian president has also planned a short meeting with Exxon’s Woods to discuss prospects of potential projects with Exxon’s participation in Russia, local media reported on Friday.
Woods and BP’s Dudley will make the trip to Russia after the relations between the West and Moscow began to strain in 2014, when Russia annexed Crimea and incurred western sanctions on some of its oil companies and on buying western equipment for developing projects in the Arctic, for example.
Following the U.S. sanctions on Russia, Exxon withdrew from most of its joint oil and gas exploration activities with Russia’s state-controlled oil giant Rosneft, giving in to the pressure of U.S. and EU sanctions against Russia’s energy industry. The decision, Exxon said in 2018, was made in 2017, after Washington imposed additional sanctions on Russia for its alleged involvement in the 2016 presidential elections.
BP, for its part, owns 19.75 percent in Rosneft and nominates two representatives to Rosneft’s Board of Directors: CEO Dudley and Guillermo Quintero, former BP President for Latin America.
Source:www.energynewsafrica.com
Ghana: Electricity Coverage Reaches 85%
The Republic of Ghana has achieved about 85 percent electricity coverage, Chief Executive Officer (CEO) of Ghana’s power transmission company, GRIDCo, Ing. Jonathan Amoako-Baah has said.
Although the 85 percent coverage is below the actual target, he argued it is commendable.
Mr Amoako-Baah who is also the Chairman of the African Council of Power and Energy Society (PES) made this known at the opening ceremony of the 2019 AFRICON hosted by the Institute of Electrical and Electronics Engineers (IEEE), the world’s largest professional association dedicated to advancing engineering and technology for the benefit of humanity at the Ghana Institute of Management and Public Administration (GIMPA).
The Ghana section of IEEE is hosting this year’s 3-day conference on the theme: Powering Africa’s Sustainable Energy for All Agenda: The Role of ICT and Engineering.
He said: “In 1989 Ghana instituted a National Electrification Scheme (NES) with the aim of providing universal access by 2020. Currently Ghana’s electrification rate is about 85%, and although a bit far off the target, it is still commendable considering that we were way below the fiftieth percentile before the scheme began. The scheme has brought electricity to most citizenry and improved their socio-economic status.
“There is a close linkage between the realisation of a Wholesale Electricity Market in Ghana and rural electrification. This is because if Rural Electrification is well addressed governments will feel more comfortable approving the roll – out of the Wholesale Electricity Market.
“I believe that to make the Rural Electrification Scheme strong it has to be set – up into an agency to provide and operate in areas classified as vulnerable and rural. Rural electrification should be addressed separately, by providing sustainable electricity solutions that is subsidised for rural folks.
“The exploitation of this endeavour has other secondary benefits such as curbing rural-urban migration, enhancing supply security, providing local solutions and providing job opportunities.”
He added: “When I started my practice in 1985 the largest companies in the world were energy-based such as Exxon Mobil, General Electronic, Royal Dutch Shell, British Petroleum and Gazprom. However, in today’s world the top five (5) companies are Microsoft, Apple, Amazon, Google and Facebook which are all ICT-based. What does this tell us?
“This is not to say that the need for electricity has reduced or is diminishing, but rather more investment is going into ICT to help holistically address the challenges the world faces today.
“These include energy, food, water and shelter. You will find that in most of our workplaces ICT is increasingly being inculcated into our routine activities. Now let me ask, who in this room doesn’t use a computer in their daily work? or better still let me ask how many of you still use windows 98, vista or even windows 7?
“I bet most of you are using windows 10 now. As for the smart phones, tablets and the internet, the connectivity it has brought to the world cannot be over-estimated. We sit comfortably in our offices today and have conference calls across continents with applications like skype, slack and WhatsApp.
“The result is that discussions and solutions that could take days to reach are achieved in an hour. True Wealth as they say is in Innovation.”
Participants from over 16 countries – Finland, Sweden, Senegal, Slovakia Togo, United States, Germany, Ghana, Botswana, Ethiopia, Lesotho, Malaysia, Netherlands, Nigeria, Benin, and South Africa – are attending the conference.
For his part, the Managing Director of the Electricity Company of Ghana (ECG), Mr Samuel Boakye-Appiah, said private investors have an important role to play in the energy sector in Africa and around the world in order to help the government to constantly supply power for domestic and commercial use.
He said: “Over the past 50 years, ECG has provided quality, safe and reliable electricity distribution services to support the economic growth and development of Ghana. Currently, with over 85% electricity access rate in Ghana, ECG and her sister utilities Volta River Authority, GRIDCo and NEDCo can be proud of our collective achievements. Unfortunately, the same cannot be said of the electricity penetration rate in sub-Saharan Africa”.
“According to a recent Africa Energy Outlook report published by International Energy Agency, ‘More than 620 million people live without access to electricity in Africa and those who do have access to modern energy face very high prices for a supply that is both insufficient and unreliable’.
“The same report adds that, ‘Overall, the energy sector of sub-Saharan Africa is not yet able to meet the needs and aspirations of its citizens’.”
Mr Boakye-Appiah added: “Africa is rising, yes, but Africa can only rise higher and faster on the back of sustainable energy as succinctly and eloquently captured by the theme for this conference. For sustainability in the energy sector to be sustainable, it must satisfy the following components; political acceptability, economic development, social equity and environment protection and affordability.
“Ensuring sustainability in the energy value chain requires huge capital investments to drive scientific research and technological innovations. With most African governments confronted with competing demands, infrastructure projects and social intervention programmes, they are constrained. Therefore, the onus of providing the needed capital investments for the development of sustainable energy resources to power Africa’s development is in the hands of the private sector”, he noted.