Ghana: Energy Ministry Pushes Target For Universal Electricity Access From 2020 To 2025
Ghana’s Ministry of Energy has reviewed its target of ensuring universal electricity coverage from 2020 to 2025.
According to the Ministry, it has become necessary even as it implements new measures to enhance energy efficiency in the country, as well as address the remaining challenges in ensuring energy supply to some rural parts of the country.
In 1989, the West Africa country set out a 30 year National Electrification Scheme to achieve universal access to reliable electricity supply between 1990 -2020.
The baseline, at the time, showed a National Electricity Access of about 25% with only 5% rural penetration.
To support this agenda, Parliament passed the Renewable Energy Act, providing the legal and regulatory framework necessary for enhancing and expanding the country’s renewable energy sector.
As at the end of 2018, national electricity access reached 84.32%.
This comprised 93% urban and 71% rural coverage.
Speaking at the 5th Mini Grid Action Learning Event and Summit, Deputy Minister for Energy, Dr. Amin Adam said the Ministry of Energy will use mini-grids and stand-alone projects to ensure national access to energy by 2025.
“Our target for universal access was 2020 but because of the difficulty in reaching out to some of our communities through the national grid we have had to revise the target to 2015 so that we can adopt measures as well as raise the financing necessary to be able to reach out to these communities”.
He added that the Ministry will acquire fifty-five new grids next year to be deployed across various islands and lakeside communities in the country at a cost of US$230 million.
“We are ready for the full implementation of 55 new mini-grids for islands and lakeside communities in the Sene East, Krachi East and West Pru, Nkwanta North and South, Gonja Central, East and West and Krachi Nchumuru Districts of Ghana from next year, under a US$230 million Investment Plan for the Scaling-Up Renewable Energy Programme,” he said.
Source: citinewsroom.com
Egyptian Red Sea License Round Closes 1st August 2019
The Egyptian Ministry of Petroleum and Mineral Resources is offering 10 exploration blocks in the underexplored Egyptian Red Sea in close proximity to well established hydrocarbon production.
The closing date for the submission of bids is 1st August 2019 at 12pm Cairo time (more info).
TGS data available for the license round consists:
- 10,318 km Red Sea ’18 (RS18) 2D long-offset broadband seismic, PSTM/PSDM (view map)
- >16,500 km 2D calibrated vintage seismic
- 3,650 km2 of reprocessed 3D
- 12 calibrated wells with legacy data (11 with logs)
- Interpretation of vintage data and literature pack (including gravity, magnetics, seep, geological reports, and more)
- Intergrated interpretation products of the RS18 seismic, gravity and magnetic data
Peruvian Gov’t Approves Tullow’s Entry In Two Offshore Licenses
The Government of Peru has approved Tullow Oil’s entry into the country’s two offshore licenses, Z-38 and Z-64. Tullow and Karoon plan to drill an exploration well in license Z-38 in early 2020.
Tullow Oil in January 2018 agreed terms to add six new licenses covering 28,000sq km offshore Peru to its portfolio. Tullow agreed with PeruPetro to acquire a 100% stake in Blocks Z-64, Z-65, Z-66, Z-67 & Z-68.
Tullow also agreed to acquire a 35% interest in the offshore exploration Block Z-38 in the Tumbes Basin off Peru through a farm-down from Karoon Gas Australia.
However, in May 2018, the Supreme Decrees, authorizing PeruPetro, the state regulator, to execute license contracts for these blocks, were revoked by the Peruvian Government.
Since the revocation, Tullow has formally expressed its continued interest in the licenses. The company continued working closely with PeruPetro towards execution of these licenses.
Come May 2019 and Karoon’s farm-out of a 35% interest in Block Z-38 was completed, according to a statement by Karoon.
Under the agreement, Tullow will fund a 43.75% of the cost of the first exploration well, capped at $27.5 million (at 100%), beyond which Tullow will pay its 35% share of the total well cost. In addition, Tullow will pay $2 million and a share of Block costs incurred on and from January 9, 2018 at completion, with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to PeruPetro.
In an operational update on Wednesday Tullow said that the government had now approved its entry into licenses Z-38 and Z-64. Work continues to secure other licenses.
Tullow also added that an exploration well is being planned for drilling in the Karoon-operated Z-38 license in early 2020.
Karoon has already started tendering for a drilling rig, which will drill the Marina-1 well offshore Peru. The Marina prospect has a best case gross prospective contingent resource of 256 mmbbls at 100% interest.
Block Z-38 lies 10 kilometers offshore from the coast of northern Peru, 56 kilometers west of the city of Tumbes and 39 kilometers west of Caleta Cruz. The block is in water depths ranging from 300 meters along its eastern boundary to over 3,000 meters in the west and covers an area of 4,875 square kilometers.
In addition, Tullow has said that, following interpretation of 3D seismic acquired over Block C-18 in Mauritania, it has decided not to proceed into the next exploration phase and has withdrawn from the license.
TechnipFMC Pays $301.3M To Settle Brazil Bribery Case
Oilfield services company TechnipFMC has agreed to pay $301.3 million to the U.S. and Brazilian authorities to resolve anti-corruption investigations in Brazil and relating to the intermediary, Unaoil for bribery paid to Brazilian officials in exchange for contracts.
TechnipFMC has agreed to resolutions with the U.S. Department of Justice (DOJ), the U.S. Securities and Exchange Commission (SEC) Staff and the Brazilian authorities (the Federal Prosecution Service (MPF), the Comptroller General of Brazil (CGU), and the Attorney General of Brazil (AGU)).
As part of this resolution, TechnipFMC entered into a three-year Deferred Prosecution Agreement (DPA) with the DOJ related to charges of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) related to conduct in Brazil and with Unaoil.
In addition, Technip USA, Inc., a U.S. subsidiary, pled guilty to one count of conspiracy to violate the FCPA related to conduct in Brazil. The Company will also provide the DOJ reports on its anti-corruption program during the term of the DPA.
According to the U.S. Department of Justice, the charges arose out of two independent bribery schemes: a scheme by Technip to pay bribes to Brazilian officials and a scheme by FMC to pay bribes to officials in Iraq. Technip and FMC merged into TechnipFMC in January 2017. In 2010, Technip entered into a $240 million resolution with the Department of Justice over bribes paid in Nigeria.
Bribery paid to Brazilian officials in exchange for Petrobras contract
According to admissions and court documents, the DOJ statement on Tuesday reveals, in at least 2003 and continuing until at least 2013, “Technip conspired with others, including Singapore-based Keppel Offshore & Marine Ltd. (KOM) and their former consultant, to violate the FCPA by making more than $69 million in corrupt payments and “commission payments” to the consultant, companies associated with the consultant and others, who passed along portions of these payments as bribes to Brazilian government officials who were employees at the Brazilian state-owned oil company, Petrobras, in order to secure improper business advantages and obtaining and retaining business with Petrobras for Technip, Technip USA and Joint Venture.
In addition, the DOJ said, Technip made more than $6 million in corrupt payments to the Workers’ Party in Brazil and Workers’ party officials in furtherance of the bribery scheme.
Also, according to the DOJ, beginning by at least 2008 and continuing until at least 2013, FMC conspired to violate the FCPA by paying bribes to at least seven government officials in Iraq, including officials at the Ministry of Oil, the South Oil Company and the Missan Oil Company, through a Monaco-based intermediary company in order to win secure improper business advantages and to influence those foreign officials to obtain and retain business for FMC Technologies in Iraq.
TechnipFMC has agreed to pay a total of $301.3 million to these authorities to resolve investigations into by former employees’ conduct dating back over a decade ago, TechnipFMC said on Tuesday.
“TechnipFMC fully cooperated with these authorities, and this is the first simultaneous resolution to include all U.S. and Brazilian authorities. TechnipFMC will not be required to have a monitor and will, instead, provide reports on its anti-corruption program to the Brazilian and U.S. authorities for two and three years, respectively,” TechnipFMC said.
U.S. Attorney Donoghue said: “Today’s resolutions are the result of a continuing multinational effort to hold accountable corporations and individuals who seek to win business through corrupt payments to foreign officials, and who attempt to use the U.S. financial system to carry out those crimes. We will continue to prioritize identifying and bringing to justice those who would corrupt the legitimate functions of government for personal financial gain.”
DOJ Assistant Director Johnson said: “In attempting to cheat the system, Technip violated the FCPA. Through the collaboration and dedicated efforts of the FBI and our foreign partners, Technip is being held accountable for perpetrating illegal schemes and justice is served.”
Former employees to blame
Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated: “Today we announce the resolution of these investigations. This conduct dating back over a decade ago, taken by former employees, does not reflect the core values of our Company today. We are committed to doing business the right way, and that means operating with integrity everywhere.
“Our strong compliance program supports this commitment, and we will continue to enhance our program to ensure that our employees have the practical tools and resources to do business the right way. We will remain focused on rewarding the trust that our clients have put in TechnipFMC by delivering industry-leading innovation, superior client service, and exceptional project execution.”
In Brazil, TechnipFMC subsidiaries Technip Brasil – Engenharia, Instalações E Apoio Marítimo Ltda. and Flexibrás Tubos Flexíveis Ltda. entered into leniency agreements with both the MPF and the CGU/AGU related to conduct in Brazil dating back over a decade ago. The Company has committed, as part of those agreements, to make certain enhancements to their compliance programs in Brazil during a two-year self-reporting period, which aligns with its commitment to cooperation and transparency with the compliance community in Brazil and globally, TechnipFMC said.
Additionally, TechnipFMC has reached an agreement in principle with the SEC Staff, subject to final SEC approval, the oilfield services provider said.
TechnipFMC has also said it been cooperating with an investigation by the French Parquet National Financier (PNF) related to historical projects in Equatorial Guinea and Ghana.
“To date, this investigation has not reached resolution. TechnipFMC remains committed to finding a resolution with the PNF and will maintain a $70 million provision related to this investigation,” Technip said.
Fine reduced due to full cooperation
The U.S. Department of Justice said on Tuesday that in the resolutions with the DOJ, TechnipFMC received credit “for its substantial cooperation with the Department’s investigation and for taking extensive remedial measures.”
“For example, the company separated from or took disciplinary action against former and current employees in relation to the misconduct described in the statement of facts to which it admitted as part of the resolution; made changes to its business operations in Brazil to no longer participate in the type of work where the misconduct at issue arose; required that certain employees and third parties undergo additional compliance training; and made specific enhancements to the company’s internal controls and compliance program,” DOJ said.
It added: “Accordingly, the criminal fine reflects a 25 percent reduction off the applicable U.S. Sentencing Guidelines fine for the company’s full cooperation and remediation
Source: Offshoreenergytoday.com
Asantehene Urges Ghanaians To Support GOIL
Otumfuo Osei Tutu II, the Asante King of the West African country,Ghana, has called on Ghanaians to continue to patronize GOIL fuels, and products for the loyal service the company has rendered to the nation.
“GOIL is for all of us Ghanaians and we must help for the company to flourish, and any work belonging to us Ghanaians we should make it successful because same Ghanaians are employed to work for such a company. Also the profits remains in the country,” he admonished.
The Otumfuo made this statement at the official opening of an ultra-modern office complex in Kumasi.
The modern 75-capacity office has cash booths, a fire-fighting arena fitted with modern equipment and other ancillary facilities, will serve the middle belt and upper middles belt zones of the company’s operations.
The Asante King, lauded the achievements of GOIL to stay atop the oil marketing business despite stiff competition from international companies.
He praised GOIL particularly for salvaging the unregulated surge in oil prices by creating a benchmark pricing here in Ghana.
“I will applaud GOIL because they have been able to compete with international market, and have sustained prices for us Ghanaians. The reason am here is because some years back if I could recall the prices of fuel was not stable and the other oil marketing companies in Ghana were quoting higher prices, only GOIL was the company that was able to stabilize the prices of fuel in Ghana for us Ghanaians to make purchase of fuel.”
Otumfuo Osei Tutu entreated Ghanaians, should support other local companies like GOIL and initiatives that would sustain the country’s economy.
He also encouraged GOIL Company Ltd, as the premier indigenous oil marketing company, to continue to create jobs for the large chunk of the Ghanaian youth.
“I would like to thank the management of GOIL to continue with the good job, and create more opportunity for the youth to get jobs to do.”
The Acting Managing Director of GOIL, Kwame Osei-Prempeh, who has taken over from Patrick Akorli, on the side lines of the ceremony, updated the public that GOIL is expanding their services beyond oil marketing, which includes a soon to start bitumen depot, as well as an LPG recirculation plant and also GOIL would undertake upstream oil exploration in collaboration with ExxonMobil.
“In some few weeks from now, we are going to cut the tape for the construction of a new bitumen depot in Tema. And we are starting an LPG re-circulation plant in Tema and Kumasi, which is starting the end of this month. And we are moving upstream with ExxonMobil,” he updated.
Source: EOP
TGS Vice President Hopes Oil Producing Countries Can Set Clear Timelines For Licensing Bid Rounds
Vice President of the world’s leading seismic company, TGS, in charge of Africa, Mediterranean & Middle East Regions, Mr Will Bradbury, is hoping oil producing countries that are planning to launch licensing bid round for their oil blocks can set clear timelines in order to attract investors.
He believes that if timelines are clearly stated with specifics as to how oil companies can acquire acreages, it will help prospective companies, which intend to bid for oil block, to decide and plan ahead.
Mr Bradbury further stated that “this will also help to reduce the risk associated with oil exploration”.
He gave the advice in an exclusive interview with energynewsafrica.com via telephone on a wide range of issues regarding the upstream industry.
.
Decline in data investments
Records available indicate that investments in seismic data declined from $8.86billion in 2013 to $3.8billion in 2017, representing about 60% decrease in seismic investments globally.
Speaking to the issue, Mr Bradbury said the decline can certainly be attributed to the fall in oil price within that period.
“The oil price dropped drastically and that had an impact on investment. What we saw is that there was cut in exploration budget by most oil companies,” he explained.
He was, however, optimistic that investment in seismic data would pick up going forward, given the current trend.
This, in his estimation, is as a result of upcoming licensing bid round in some oil producing countries.
Projects
Currently, TGS has acquired 3D seismic data and multi-beam which cover Senegal, Gambia and Guinea.
TGS is also reprocessing some existing data for Ghana, Nigeria, Togo and Benin.
Asked which area he expects oil growth to come, he mentioned West Africa and Latin America.
Will Bradbury, who said the oil and gas sector in Africa has a bright future, noted that Africa is in competition with South America and underscored the need for African countries to do things that would entice investors.
Regulatory regime
Touching on the regulatory environment in Africa, Mr Bradbury said there has been transparency, honesty and openness in all conversations and discussions.
“We try and do open conversation. We have good discussions,” he said.
TGS is also reprocessing some existing data for Ghana, Nigeria, Togo and Benin.
Asked which area he expects oil growth to come, he mentioned West Africa and Latin America.
Will Bradbury, who said the oil and gas sector in Africa has a bright future, noted that Africa is in competition with South America and underscored the need for African countries to do things that would entice investors.
Regulatory regime
Touching on the regulatory environment in Africa, Mr Bradbury said there has been transparency, honesty and openness in all conversations and discussions.
“We try and do open conversation. We have good discussions,” he said. ExxonMobil To Sell Rest Of Norwegian Assets
US oil major ExxonMobil is reportedly looking to sell all off its assets in Norway. The move has the potential to be Norway’s biggest sale since 2006, according to energy intelligence group Wood Mackenzie.
Reuters reported on Saturday, June 22 that ExxonMobil was considering selling all of the stakes it holds in oil and gas fields off the Norwegian coast, including stakes in Equinor-operated Snorre and Shell-operated Ormen Lange fields.
ExxonMobil sold its operated assets in Norway to HitecVision- backed Point Resources back in 2017, which later went on to merge with Eni Norge, creating Var Energi
ExxonMobil continues to hold ownership interests in over 20 producing oil and gas fields operated by others. In 2017 the company’s net production from these fields was around 170,000 o.e. barrels per day.
According to Reuters, ExxonMobil is now looking to get rid of its non-operated assets in the country.
Speaking after reports that ExxonMobil is preparing to put its Norwegian upstream portfolio up for sale, Neivan Boroujerdi, principal analyst, Europe upstream, at Wood Mackenzie, said: “The move doesn’t come as a surprise. We recently highlighted Norway amongst a $48 billion pool of assets from which we think ExxonMobil could meet its recently announced $15 billion divestment target.”
He added: “The sale has the potential to be the Norway’s biggest since Statoil’s merger with Norsk Hydro announced in 2006.
“While Norway is no longer core to the overall business, ExxonMobil’s position is substantial enough to receive an attractive exit price, particularly as Norway remains one of the premium M&A markets in the world.
“It’s a highly cash generative business with low operating costs, producing 150,000 barrels of oil equivalent per day. The portfolio is predominantly operated by Equinor, which has laid out its own plans for increased oil recovery in the coming years – so it will come with future investment opportunities.
“In terms of buyers, the new wave of North Sea independents are likely to be the front runners. Although the oil-heavy portfolio could deter some buyers looking to appease the investor community before an IPO in the coming years.”
Source: offshoreenergytoday.com
Senegal President’s Brother Resigns Over Offshore Gas Deal Corruption Claims
The brother of the President of the West African country, Senegal, has reportedly resigned from his government position following allegations that he was paid bribes related to a 2014 award of offshore blocks.
The resignation follows an investigation by BBC, according to which Aliou Sall, brother of President Macky Sall, was involved in suspicious, corruption-like dealings, with a company owned by Romanian businessman Frank Timis, and related to a suspicious award of gas-rich offshore blocks to Timis’ company.
According to BBC, Frank Timis in 2012 established Petro-Tim, a company which was awarded exploration rights in two large offshore concessions “even though it had no track record in the industry,” beating larger and experienced oil companies to the acreage.
Per the BBC investigation, Aliou Sall – the president’s brother – was employed by a Frank Timis-related company, where he was paid $25,000 a month over a five-year period, getting in total $1.5 million. Aliou was reportedly paid for consultancy services in a field in which he had no prior experience, which was reportedly linked to offshore blocks awarded.
Furthermore, BBC has discovered that Frank Timis made a $250,000 payment to Agritrans Sarl, a company owned by the Senegal president’s brother Aliou Sall.
After gas was found in the offshore acreage in 2016, BP then in April 2017 bought 30 percent stake in the blocks from Frank Timis’ firm for $250 million, but that, the documentary says, is just the start, as “the real cash comes from the royalties.”
According to BBC, BP has agreed to pay between $9.27 billion and $12.56 billion dollars to Timis Corporation over the next 40 years, despite having knowledge that Frank Timis might have paid bribes to the president’s brother, and despite the possibility that the offshore blocks were awarded through corruption.
Global Witness put the alleged figures into context. It said earlier this month: “Senegal’s budget last year was $6.3 billion, and about 40% of the population lives on less than $2 a day.”
In its documentary, BBC said: Our evidence suggests that the people of Senegal have been cheated out of billions of dollars. It’s Frank Timis who is getting that money, and it’s BP who has helped him to cash in.
BBC has said that both BP and Frank Timis have denied any wrongdoing.
Aliou Sall has described the reported $250,000 payment as imaginary, denying he has ever received it. According to reports of his resignation from Deposits and Consignments Fund Senegal on Tuesday, he said the allegations against him were untrue and said that there was a campaign against him with the aim to dehumanize him.
Source: Offshoreenergytoday.com
Ghana: Electricity Consumers Would Have Paid More Than 11.17% Increment But For Review Of Generation Cost-PURC Boss
The Executive Secretary of Ghana’s Public Utilities Regulatory Commission (PURC), Mami Dufie Ofori, has stated that consumers would have paid more than the 11.17% tariff increase had government not reviewed cost of power generation.
Additionally, some efforts by power companies to introduce efficiency in their services also influenced the decision of the Commission to set the tariff at 11.17%.
“The figures they brought (government) was factored into our decision. If we had gone by the last year’s figure, then, the tariff would have gone higher than what we announced,” she said.
The PURC, last week, announced that effective July 1, 2019, electricity tariff in the country would increase by 11.17%.
According to the PURC, the decision was taken after careful consideration of proposals by the various stakeholders in the power sector.
The increment has, however, not gone down well with a section of the public, with some Ghanaians describing the increment as insensitive.
Addressing the media on Monday, 24th June, 2019, Mami Dufie Ofori highlighted on key indicators the Commission looked at before increasing the electricity tariff.
“In arriving at this decision, the PURC took into consideration several issues, and key amongst them are the ECG/PSP Process, Projected Inflation Rate, Ghana Cedi/US Dollar Exchange Rate, Prudent Cost of Operation of Utility Companies, Projected Electricity & Water Demand for the 2019-2020 tariff period,” she listed.
She explained that the key objective of the tariff review was to sustain the financial viability of utility service providers, as well as ensuring delivery of quality service to consumers.
“The key assumptions underpinning the determination and approval of the tariffs for the regulated market are as follows: Electricity, 2019-2020 Electricity Supply Plans, Generation Mix of 23% Hydro and 77% Thermal, Ghana Cedi-US Dollar Exchange Rate of GHS5.05/USD 1.00, Projected Inflation Rate of 8%, Projected Fuel Prices, Expected Increase in Electricity Demand, Transmission System Losses of 4.1%, Expected Increase in Volume of Electricity to be Transmitted of 8.6%, Base Distribution Aggregate Technical & Commercial Loss Ratio of 22.6%, Provision for Uncollectible Revenue of 2%, Water, Electricity Cost, Cost of Chemicals, Ghana Cedi-US Dollar Exchange Rate,” she explained.
“The Commission will continue to monitor the impact of this policy change on the utilities and customers,” she assured consumers.
The 2019-2020 Major Tariff Review Decision is the outcome of prudent cost review and effective monitoring undertaken by the Commission.
It is, therefore, expected that the utilities would be able to cover their Administrative, Operations and Maintenance Costs, resulting in the provision of quality utility services for consumers.
The Commission reiterated its unwavering commitment to ensuring the sustainability and growth of quality electricity and water service provision for socio-economic development.
Details of the approved electricity and water tariffs effective July 1, 2019, and the rationale for the tariff decisions would be published on the Commission’s website.
Africa Oil & Power To Honour Senegal President As ‘Africa Oil Man of the Year’
President of the Republic of Senegal, H.E. Macky Sall, will be bestowed with the prestigious ‘Africa Oil Man of the Year’ award during the Africa Oil & Power conference, to be hosted from October 9 to 11, 2019, in Cape Town, South Africa.
The President will be presented the award during the conference, in which he will also present the keynote address.
Senegal is a global hotspot for oil and gas discoveries—well-known as the place in Africa to make major oil and gas finds, due in large part to a decade’s long campaign by Sall to improve transparency, create an attractive investment environment and spark new growth.
“As African countries across the continent aim to spur growth and diversify economically, Senegal is a prime example of a country making energy work—creating an enabling environment for business to succeed, attracting huge international investments, while providing for a strong local capacity and downstream investment options,” said Guillaume Doane, CEO of Africa Oil & Power.
“H.E. Macky Sall is one of Africa’s top leaders, not just in oil and gas, but as an advocate for overall economic success. We are honored to present him this award,” a statement issued by Africa Oil & Power and copied to energynewsafrica.com said.
Sall first worked as the CEO of Petrosen from 2000–2001, before becoming the country’s Minister for Mines Energy and Hydraulics in 2001.
After a long political career in Senegal, Sall was elected president of Senegal in 2012, and pushed through a series of reforms to revive Senegal’s economy and attract international investors.
“In a continent where border disputes have held back the development of offshore resources, President Macky Sall insists on a more productive outcome. He worked with his counterpart of Mauritania, H.E. Mohamed Ould Abdel Aziz, to secure an agreement to jointly develop offshore resources for the mutual benefit of both countries,” said Jude Kearney, former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce, during the Clinton Administration and currently President of Kearney Africa Advisors.
This form of agreement represents the best practice for the development of cross-border resources, and in this particular case, is based on the landmark Frigg Agreement of 1976 between the UK and Norway.
That case showed that when leaders work together, resources can be developed peacefully to benefit the people of both nations.
“The agreement between Mauritania and Senegal paved the way for the development of the Tortue field through cross-border unitisation, with a 50%-50% initial split of costs, production and revenue, as well as a mechanism for future equity redeterminations based on field performance. It takes leadership, vision and foresight to get this done,” continued Kearney.
Today, Senegal has one of the fastest growing economies in the world, and is the fastest growing economy in West Africa.
Sall has closely guided the development of two multi-billion dollar oil projects off the coast of Senegal—the world-class SNE oilfield and the Greater Tortue/Ahmeyim gas project.
The Greater Tortue project reached FID in December of 2018, and has already awarded several initial contracts, including the EPCIC contract for the development of the needed FPSO to Technip for an estimated $500 million to $1billion.
The SNE oilfield is expected to reach FID this year and both projects are scheduled to start producing export revenues in the early 2020s.
To ensure the country’s new oil revenue would directly benefit the country, Sall advocated for a new hydrocarbons code, which was approved by the national assembly this year, and he also created the agency Cos-Petrogaz to oversee the oil and gas sector and issue licences.
Other reforms aimed at promoting transparency included limiting the presidential terms from seven years to five years, to be renewed once, and launching the Emerging Senegal Plan in 2014, which provides detailed planning for Senegal’s continued social and economic development.
The fourth annual Africa Oil & Power, to be held from October 9-11 in Cape Town, has a theme of ‘Make Energy Work’ that would focus on how oil, gas and power can generate greater opportunities for the people of African nations and stimulate sustainable economic growth.
Africa Oil & Power industry leaders would celebrate Sall’s notable achievements and spark conversations on Making Energy Work throughout the continent.
The last recipient of this award was OPEC Secretary General, H.E Mohammed Sanusi Barkindo.
H.E. Barkindo guided OPEC through one of its most turbulent periods, with a sustained oil price decline and a loss in global market share.
He is credited with restoring market stability on a global scale through the landmark deal between OPEC and non-OPEC members to cut oil production.
Qatar Out Of OPEC: Implications For Qatar, OPEC, And The Global Petroleum Market
Saad Sherida Al-Kaabi, Qatar’s Energy Minister
For some it is such a big news, but for others it is no news at all ― the decision by Qatar to pull out of the Organization of Oil Exporting Countries (OPEC) effective January 2019, after nearly six decades.
While many industry watchers links Qatar’s quitting decision to feud with the Saudi Arabia-led group, Doha is suggesting that it is technical and strategic rather than geopolitical. In communicating its decision to OPEC on 3rd December 2018, Qatar’s Energy Minister Saad Sherida Al-Kaabi said Doha’s decision is not borne out of the political and economic sanctions imposed on the country by Saudi Arabia, Egypt, Bahrain, and the United Arab Emirate (UAE) for allegedly sponsoring terrorism and fueling instability in the Gulf.
Al-Kaabi suggested that the decision to pull out was rather strategic in nature; to focus more on natural gas production and export activities to improve its global position as the leading natural gas producer. He stressed that achieving Qatar’s ambitious strategy will undoubtedly require efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading Liquefied Natural Gas (LNG) producer. The plan is to increase production by 43% to reach 110 million tons per year (mtpy) by 2024, by leveraging the existing massive, world-class infrastructure and valuable synergies available both inside and outside the State of Qatar.
However, doubts still remain that Qatar’s decision isn’t politically influenced, in the sense that it did not need to quit OPEC to achieve the stated goals as there are currently no OPEC restriction on gas production. Aside that, the costs of the cartel’s membership were not greatly burdensome for the Qatari government in any way.
OPEC’s Influence
Formed in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid, OPEC also sought to prevent its concessionaires; the world’s largest oil producers, refiners, and marketers (called the Seven Sisters at the time) from lowering the price of oil, which they had always specified, by gaining greater control over the prices of oil through the coordination of their production and export policies. And in the course of the 1970s OPEC members succeeded in securing complete sovereignty over their petroleum resources, with several of its members nationalizing their oil reserves and altering their contracts with major oil companies.
Saudi Arabia occupies the traditional role as the “swing producer” as a result of its spare capacity to stabilize oil markets, making it the de facto leader among the 14 member states ― Libya, Algeria, Nigeria, Ecuador, Gabon, the United Arab Emirate, Angola, Congo, Equatorial Guinea, Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Historically, the group accounted for more than 40% of the world’s crude oil production, and was credited for exporting nearly 60% of the total petroleum traded internationally. Consequently, OPEC’s huge spare capacity that could be easily adjusted to suit the condition in the global oil markets, coupled with its significantly low cost of production, allowed it to exert strong influence on crude oil prices on the international market.
One of the many notable occasions that OPEC had changed the direction of oil prices in its favour, is the Arab-Israeli War in 1973 – 1974, where OPEC’s Arab members imposed an embargo on the United States (U.S.) over its support of the Israeli military; shifting the oil market from a buyer’s to a seller’s market.
While some experts believe that OPEC is a cartel by reason of collusion, though it has not been equally effective at all times; others have however concluded that it is not a cartel, and that it has little, if any, influence over the amount of oil produced or its price. They emphasize the sovereignty of each member country, the inherent problems of coordinating price and production policies, and the tendency of countries to cheat on prior agreements.
Today, some experts are suggesting that the power of OPEC has waxed and waned since its creation in 1960 and is likely to continue to do so, so far as its share of world oil production declines, and the re-emergence of the U.S. as a top oil producer keeps flooding the oil market. However, the group’s recent collaboration with Russia where prices surged upward with the implementation of the production-cut policy, may be another signal of OPEC’s relevance.
Implications for Qatar’s Exit
Today, Qatar is out of OPEC because of the need for “technical and strategic” change, according to Doha. The country finds it sensible to concentrate on LNG which Qatar is better at producing, rather than being part of a group that only deals with oil.
Qatar also sees it as impractical to put efforts, time and resources in an organization that it plays a small role and have little say in what happens. This view was reinforced by UAE’s Minister of States twitter post that “the political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in the light of its political isolation”.
But whatever be the rationale, it is worth analyzing the implications of Qatar’s withdrawal from the body OPEC; for Qatar, OPEC, and the wider oil and gas market.
First, Qatar’s pronouncement to leave the group makes little difference on OPEC decisions, in mathematical or economic sense. Compared to Saudi Arabia that produces close to 11 million barrel of oil per day (bpd), Qatar’s oil production capacity is around 609,000 bpd, which makes Doha the 11th largest producer in the then group of 15 members. Analysts agree that Qatar’s production capacity which is less than 2% of the combined OPEC output, is insignificant to have any meaningful impact on the decision making process of the group. In any case, Qatar has no spare capacity given the maturity and small size of its oilfields, and that it was exporting less than its production quota at the time of exiting the group.
Second, as a long standing member of the cartel, Qatar’s decision to exit the group is a symbolic loss; to the extent that it exposes OPEC’s growing weaknesses, and how its influence on the global oil market is waning. It raises the possibility of the end of the cartel, as smaller members considers their position in the longer term, based on the feeling that they are increasingly marginalized when it comes to decision-making.
Lately, it has taken Russia and other non-OPEC countries for the cartel to remain relevant, as it has largely failed on its own to influence oil prices. And the mere fact that it has to rely on non-OPEC members like Russia and Azerbaijan to wipe some barrels off the market, suggest that the group is having difficulty maintaining its authority on the global oil market. Meanwhile, the U.S. has also emerged as a force to reckon with on the global market, further disrupting OPEC’s capability to unilaterally influence supply and prices.
Third, Qatar’s exit from the group could have implications for regional politics, and cost Qatar some political leverage. Although Doha denies that its decision is not linked to the political and economic embargo, some analysts sees it as a reflection of deepening regional division. Some industry watchers are warning that it could cost Qatar some geopolitical leverage as it pulls out of the group; arguing that having a seat and say at the table of OPEC ministers offer countries substantial powers on the global level.
Fourth, the exit of Qatar could be a signal to other member countries that they are better off without OPEC, given the unilateral decisions of Saudi Arabia in recent times. And if that should happen, it would have a huge impact on the oil market; leaving no control over supply as each country could produce as it pleases, especially members of OPEC from the Middle East. Keeping global supply high may be good for low oil prices, but could also deter further investment in the oil market.
Fifth, given that the Trump Administration has been pushing hard to keep oil supply high and prices low, for which it has been very vocal in its opposition to OPEC production quota, Qatar’s exit relieves it from this dispute. By distancing itself from the group, it protects the country and its U.S. investment if the U.S. Congress ever does pass the anti-OPEC legislation, which has reared its head again in recent times.
Lastly, with a current capacity of 77 million tonnes per year (mtpy), natural gas remains Qatar’s main economic engine; accounting for more than 70% of government’s total revenue, over 58% of gross domestic product (GDP), and some 85% of total export earnings. Therefore Doha’s decision to concentrate on its core business of producing and exporting more natural gas would not only enable it consolidate its position, using natural gas as an increasing global lever and placing the country beyond any of its LNG exporting rivals; but it would equally boost its economy by increasing export earnings. Also, as a driving force in the creation of Gas Exporting Countries Forum (GECF) in 2001 with secretariat in Doha, Qatar will have more prominent role on the gas side of petroleum as GECF evolves into a cartel.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as resource to many global energy research firms, including Argus Media.
Ghana: Close Down Recalcitrant Fuel Stations-COPEC
Duncan Amoah, Executive Secretary of COPEC
The Chamber of Petroleum Consumers (COPEC) in the West African country, Ghana, is calling for the closure of some outlets of the Oil Marketing Companies, which were indicted for under-delivering fuel to its consumers, but have failed to correct the anomaly.
According to COPEC, the recalcitrant fuel outlets should not be allowed to operate until they corrected the anomalies detected by the Ghana Standards Authority.
It would be recalled that the Ghana Standards Authority on 9th June, 2019, issued a report that some 10 fuel retail outlets were in the business of short-changing their customers.
The report mentioned Allied Service Station at Sakaman, Total Service Station at McCarthy Hills, Goodness Service Station at Amanfrom, Goil Service Station-Mile 11, Goil Service Station at Amanfrom, Shell Service Station at Motorway Extension, Shell Service Station Amanfrom, Frimps Oil Service Station at Amanfrom, Glory Oil Service Station at Spintex Road and Frimps Oil Service Station at Spintex Road.
However, addressing a news conference in Accra, Executive Secretary of COPEC Mr Duncan Amoah said their recent visit to the aforementioned fuel retail outlets after the GSA’s report, revealed that some of the stations have taken correctional steps to address the issues the Standards Authority raised while others had failed to comply.
The Goodness Service Station at Amanfrom, he noted, seemed to have changed nothing as far as the availability of the mandatory 10 litre can for customers is concerned.
The Shell Service Station at Amanfrom, similarly, was found in a ‘disappointing’ state.
Aside the unavailability of the 10 litre can, the general sanitary conditions were nothing to boast of and it had no functioning fire extinguishers at the time of visiting, they stated.
“Our roving team, together with the media, visited the Goodness Service
Station at Amanfrom, following the publication of the GSA inspections, but sadly, nothing seems to have changed with this particular station.
“The mandatory 10 litre can which should be available upon demand by the customer was not available and, thus, difficult to ascertain if any corrective measure had been put in place to protect the consumer”, he noted.
About the Shell Service Station at Amanfrom, he said, “is perhaps, the most disappointing of all the visits from the GSA inspections and indictment. This said station, for the record, looks nothing like the regular Shell Stations or outlets and must immediately be closed down, as general sanitary conditions in and around the station were pretty poor and shambolic; no 10 litre can on demand, fire extinguisher clearly empty and lying in a bucket of refuse at the forecourt.”
COPEC, per its findings, therefore, called for the immediate shutdown of both stations as their operations posed more harm to consumers than good.
“We recommend the owners or operators of this particular station (Goodness Service Station) to immediately halt selling to the public, or shutdown this particular outlet and ensure the right things are done to forstall any further shortchanging of the unsuspecting public as duly captured by the GSA,” COPEC said.
They further asked “managers of the Shell brand to immediately dissociate from the said station as it only poses a disgrace to the brand.”
They also cautioned the general consuming public to also boycott this station till effective maintenance and repair works were done.
On Frimps Oil Service at Amanfrom, COPEC said “generally, the station was well kept but clearly under dispensing. As well, all four pumps we randomly sampled gave lower volumes with the 10 litre can, but this lower volume is compensated by the said outlet also being the lowest price service station such that if one added the savings made from buying from the said station, the new volumes now exceed those of the others on the market.”
Compensation
Mr Duncan Amoah said his outfit intends to push for approximate and adequate compensation for all customers of the above mentioned stations.
According to him, the modalities of this compensation would be jointly determined by the affected stations and key stakeholders, stressing that failure do so would compel the affected persons to seek legal redress at the law courts.
He argued that it would be fair if the customers were compensated.
Call To Report Wrongdoers
Duncan Amoah advised the public to volunteer any useful information on any negative or bad practices from any service station across the country, in order to curtail this negative trade that has bedeviled some operators in the petroleum downstream sub-sector.
“We further assure the general public of a continuous unannounced spot visits to all the various stations across the country, and will not hesitate to draw the attention of regulators and the public to any such stations that will be subsequently found to be selling fuel without the mandatory dispute resolution device or the 10 litre can boldly be displayed at the forecourt.”
Ghana: Hold Tariff Hikes For 3 Months – Chamber Of Commerce Appeals
The Ghana Chamber of Commerce in the West African country, Ghana, has appealed to the Public Utilities Regulatory Commission (PURC) to suspend the immediate implementation of the upward review of tariff hikes in the country.
The utilities regulator on Friday, approved 11.17% increment in electriciry tariff, effective July 1,2019.
Speaking to Accra based Starr FM, the Chief Executive of the Chamber of Commerce Mark Aboagye said the time between the upward review of tariffs and implementation is too short for industry to adjust.
“The increment has shaken the foundation of most businesses. I think the PURC should gives businesses not less than 3 months to adjust. There are some companies that pay about Ghc 1 million per month as electricity bill. Some even pay more. I think the PURC is not being fair to businesses. 9 days is not enough time to adjust,” he bemoaned.
The PURC has however explained the review was done taking into considerations the various factors prevailing in the economy currently.
“For the tariff review, the exchange rate that we use is 5.05 and you know that this is the kind of exchange rate that we have on the market. The rate of inflation has gone up. The price build up for electricity tariff, you have the forex component and the cedi component.
“For the forex component, you need to adjust when the exchange rate is low otherwise there will be under recovery…so if you look at these two that alone is enough to justify the increase that has just been announced…also the fact that tariff were reduced didn’t mean that tariff were never going to be increased again,” Chairman of the technical committee of the PURC, Ishmael Agyekumhene said.
Source: Starrfm.com.gh
Article: Boosting Energy Access, Security In West Africa Through Regional Cooperation
Paa Kwasi Anamua Sakyi, Executive Director for Institute for Energy Security(IES)
The developed part of the globe have found reliable and affordable energy as an enabler to goods and services that has enriched and extended lives. And for developing countries, the need for consistent supply of affordable energy is more vital to modernizing agriculture, increasing trade, empowering women, saving lives, improving transportation, expanding industries, and powering communications; serving as building blocks for escaping poverty and enriching lives.
However, access to energy in developing countries especially in sub-Saharan Africa (SSA) remains disappointingly low. According to the International Energy Agency (IEA, 2017) 590 million people, representing roughly 57% of the population, remain without access in SSA; making it the largest concentration of people in the world without electricity access as efforts have often struggled to keep pace with population growth. And over 80% of those without electricity live in rural areas, where the electrification rate is less than 25%, compared with 71% in urban areas.
In 2016, only eight countries were listed as having an access rate above 80% – Gabon, Mauritius, Reunion, Seychelles, Swaziland, South Africa, Cape Verde and Ghana; while most countries had a rate below 50% and some had a rate of below 25%.
Of those without access to electric energy in sub-Saharan Africa, West Africa is reported to accounts for 30%. Putting the average access rate across West Africa at 52%, with Ghana being one of the most successful countries in the sub-region in expanding access.
Energy access is defined by the IEA as “a household having reliable and affordable access to both clean cooking facilities like liquefied petroleum gas (LPG), and to electricity; which is enough to supply a basic bundle of energy services initially, and then an increasing level of electricity over time to reach the regional average. The body sees it as the “golden thread” that knits together economic growth, human development and environmental sustainability.
Access to modern energy has been described severally as the missing Millennium Development Goal (MDG), as energy services can contribute to a large extent to the attainment of all Sustainable Development Goals (SDGs). The lack of access to modern energy (part of SDG 7) is seen as an impediment to a country seeking to tackle the numerous challenges that it is confronted with, such as food production and security (SDG 2), poverty (SDG 1), delivering quality education (SDG 4), adaptation and mitigation of climate change (SDG 11), and gender inequality (SDG 5).
From Access to Security
Providing energy access to the growing sub-Saharan Africa population, however, is not enough to ensure economic and social development; especially at such a time of global market uncertainty. Countries must therefore advance from energy access to energy security which is described as a vital condition in which an energy system can function optimally and sustainably; free from risks and threat.
Energy security may be defined differently by many authors from contextual views, but the varied definitions are however based on the premises of sufficient and reliable supply of energy at affordable prices in centralized energy supply systems. It must therefore be a non-negotiable pursuit for any country or a region, due to the key role of energy in the functioning of the modern society.
Energy security is among the priority targets for industrialized states, and for countries that hope to advance development. And that serious economies are putting energy security at the forefront of thinking, given the considerations about climate change, energy market volatility, geopolitical influences, and energy price deregulation. The step is an attempt to escape energy poverty which takes different forms, including a lack of access to modern energy services, a lack of reliability when services do exist and concerns about the affordability of access.
Regional Cooperation
The concept of regional cooperation have been embraced by a large section of states in Africa and the world over as Regional Economic Communities (RECs) with diverse scope and membership. It is expected to serve as catalyst for amplifying regional cooperation and policy coordination in vital areas specific to the member states through a collective action.
The advantage derived from regional economic integration are several, with the most riveting being the need to create partnerships that would enable the countries involved the chance to compete remarkably on the international market.
Taking into consideration the splinter and undiversified nature of most African economies combined with their small size, regional collaborations are crucial to reposition African economies in participating actively on a world scale, giving them more appreciable leverage to bargain effectively for market access and to reduce the effects of marginalization and unfair competition.
Beyond the expanded market, regional integration results in increased continental trades, strengthened security and conflict resolution within the region, and the free movement of people across the region. And while reducing the demand for third-party international imports, regional integration potentially attracts significant Foreign Direct Investment (FDI) from both within the region and from abroad, due to the enlarged market and product rationalization.
Sub-regional Power Market
In the context of Africa, one of the reasons for which the many regional economic communities have largely failed to be effective, is as a result of the resources similarities which makes it difficult for the member States to trade effectively.
However when it comes to electric energy, while West Africa is grappling with similar and multiple challenges; it is endowed with varied energy resources. And so, the countries in the sub-region have a range of energy opportunities to collaborate on to deepen its access to energy and ensure energy security. The economically sound allocation of its energy resources is likely to be more efficiently accessed and distributed using regionally integrated energy planning and trading.
Power pooling is becoming a normal trend in developing regions, with the creation of efficient sub-regional power markets expected to achieve economies of scale while ensuring that demand-supply complementarities are not laid waste.
Examples of power pooling in Africa includes the Eastern Africa Power Pool, and the Southern Africa Power Pool made up of Zambia-Tanzania-Kenya interconnection. But these co-operations has traditionally been on bilateral and cross-border trades.
West Africa is also seeking a shift in trading terms with the formation of the West Africa Power Pool (WAPP), aimed at integrating the operations of national power systems into a unified regional electricity market. The intention is to assure a stable and reliable electricity supply at a competitive rate; and through long-term energy sector cooperation, unimpeded energy transit and increasing cross-border electricity trade.
The creation of the regional power market may come in the form of inter-country cooperation on building energy infrastructure, conducting joint prospecting for reserves, power trade, and technology development et cetera.
The inter-country trade and exchange of electric power makes both economic and logistic sense as it may be more favorable for the border regions of one country to source for power from a power station close by in a neighboring country than a far off station within the country’s boundary. More so, electricity cannot be stored, hence supply and demand need to be efficiently managed.
Key Benefits
Two vital benefits that could be derived from the regional power market are the prospects of effectively utilizing inequitably distributed fuel resources, and scaling the funding gap.
Internalizing Fuels: By internalizing the fueling of power plants in West Africa, the sub-region can achieve higher ranking of price steadiness, and mitigate the risk that comes with depending on external sources.
While hydro, oil and natural gas has been the leading fuels for power plants in the region; uranium, coal, cobalt, and the likes are becoming indispensable to countries that are working towards their primary energy supplies.
Aside crude oil and natural gas, West Africa boosts of vast deposit of coal and uranium in the region. And since thermal power plants are challenged with the problem of insufficient gas supply and expensive crude oil, just as hydropower plants are confronted with low water levels; West Africa could therefore commit to harnessing a large part of its electricity generation from coal and uranium as basic fuels on a regional scale, applying technologies to manage any harmful environmental effect that may be associated with their use.
Scaling the Funding Obstacle: Apart from mitigating against power shocks and relieve shortages, the regional approach of grid connection affords the opportunity to some countries that on their own cannot attract private funding in the electricity market, and benefit from projects implemented on regional scale.
Presently, few financial instruments exist, particularly in sub-Saharan African countries; to improve the limited access, high operational cost, and poor service quality of energy. And the existing bilateral and multilateral funding channels for energy infrastructure are in short supply. Consequently, nearly all African countries are earnestly requesting for private sector funding for power projects. However, it is increasingly becoming difficult to access the needed investments due to political risk, microeconomic instability, poor governance structures, and institutional weakness in the developing economies.
Cooperating on regional basis in energy infrastructure projects to pool power, offers one sure way of scaling some of the challenges associated with attracting private sector funding to improve on energy access and energy security.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas M anagement, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.