Ghana: Energy Security Policy In The Offing-Dr Amin Adam
Deputy Minister for Energy in-charge of Petroleum in the Republic of Ghana, Dr. Mohammed Amin Adam, says the Ministry is working with the country’s National Security Secretariat to implement an Energy Security Policy, aimed at protecting critical infrastructure and the sustainability of the petroleum industry.
He said, “As we make efforts at digitization, so do we become vulnerable to cybercrime and other threats to petroleum infrastructure.
“Government expects that industry players especially the private sector and consumers, will cooperate with us as we roll out various measures to implement this very important policy,” Dr Amin said.
It would be recalled that some suspected arsonist hacked down Ghana Grid Company’s (GRIDCo) transmission tower in Tema early this year.
Few weeks after that incident, a gas pipeline belonging to private firm, Cirrus Oil Services in Tema power enclave, was also torched.
These incidents clearly showed that the country’s petroleum infrastructure and other critical installations are exposed to threats, hence the need for Energy Security Policy to address the threats.
Addressing industry players at the Ghana International Petroleum Conference in Accra, organised by the National Petroleum Authority, in partnership with Chamber of Bulk Oil Distributors and Association of Oil Marketing Companies, Dr Amin Adam noted that the petroleum industry is now exposed to significant risks and danger of disruption, particularly the physical infrastructure on which the industry is built.
“The industry is associated with inefficiencies, leading to various forms of rent seeking, higher cost of operations and, consequently, poor service delivery.
“We must, therefore, take advantage of the global revolution to restructure operations of the industry, reduce cost and ensure competitive pricing of petroleum,” he stressed.
Touching on the distribution of premix fuel, Dr Amin said “we are, currently, exploring new digital pathways for addressing issues of diversion of heavily subsidized premix fuel.”
He, therefore, charged the National Petroleum Authority to develop and implement a digitization plan in the petroleum value chain across the country.
LPG Cylinder Recirculation Pilot Programme Begins In October
Ghana’s Vice President, Dr Mahamudu Bawumia, says significant progress has been made towards the pilot implementation of the Cylinder Recirculation Model under the National Liquefied Petroleum Gas (LPG) Promotion Policy.
He said the Policy sought to ensure that LPG consumers have access to safe, efficient, affordable and environmentally-friendly LPG for commercial, industrial and domestic use by 2030.
The National Petroleum Authority (NPA) says the Ghana Cylinder Manufacturing Company is producing 37,000 cylinders needed for the pilot project in October this year, in Obuasi in the Ashanti Region and Kwaebibirim in the Denkyemboa District of the Eastern Region.
Dr Bawumia assured of government’s commitment to continue implementing policies and programmes to protect the safety and interests of Ghanaians.
Vice President Bawumia announced this at the opening of the third edition of the Ghana International Petroleum Conference (GhipCon) in Accra on Wednesday, held on the theme,” Regional Collaboration: A Catalyst for Transformation”.
The conference was organised by the Ministry of Energy and National Petroleum Authority in collaboration with the Chamber of Bulk Oil Distributors, which attracted petroleum experts, policy-makers, business men and women and captains of industry in the sub-region.
It is designed to actively bring to the fore the operating industry’s perspectives and guidance on issues of governmental and regulatory policy as well as best practices for the advancement of the petroleum downstream sector across the West African sub-region.
It will also afford stakeholders in the petroleum downstream industry in West African sub-region, to harmonise their policies and explore opportunities to allow the industry to respond to global development and trends consistent with member countries’ interests and aid in their economic transformation.
Some topics outlined for discussion include; Unlocking West Africa’s Deregulatory Inertia, Making West Africa’s Refineries Work, Ghana’s Cylinder Recirculation Model, Harmonising Sub-regional Petroleum Products Specifications and Challenges of Regional Distribution of Petroleum Products.
The Vice President said government was in the process of ensuring institutional and regulatory re-alignment of the midstream gas sub-sector to bring clarity and a degree of certainty to players in the industry.
In that regard, he said, the Energy Minister would soon finalise re-alignment and commence legislative consolidation of the Gas Master Plan into a Gas Act, which was an important requirement for development of Ghana into a petrochemical hub in the West African sub-region.
He said the proposed Gas Act would provide an enabling environment and appropriate incentives for investors and assured of government’s resolve to make the security of gas supply as feedstock for petrochemical plans a priority.
He said procurement of natural gas from domestic sources had been secured under regulation governing domestic supply obligation of upstream gas producers.
Ghana Loses $200m In The Petroleum Sector To Illicit Activities – NPA Boss
The Republic of Ghana is said to be losing 200 million dollars of tax revenue to smuggling of petroleum products and other nefarious activities in the petroleum sector every year.
Chief Executive Officer of the country’s National Petroleum Authority Alhassan Tampuli who described these nefarious activities as “lucrative”, mentioned Takoradi port, Tema main Port, Prampram, Aflao and the eastern coastline as the unapproved offshore routes for the smuggling.
“These nefarious activities of the petroleum service providers and some that are not even service providers, led to the country losing colossal 200 million dollars per annum of tax revenue,” he said.
Speaking at this year’s Ghana international petroleum conference in Accra Wednesday, he said these activities are also causing the country to lose about 12 million dollars from the unified petroleum price fund annually.
Mr Tampuli indicated that some elements in the petroleum industry have made it their business to engage in nefarious activities which eventually leaves the country poorer.
He expressed concerns about smuggling of subsidized products such as premix, marine gas and gasoline, as well as what he termed fraudulent freight claims from some transporters and siphoning of LPG from bulk vehicles into surface tanks.
The Chief Executive revealed poor quality products from some neighbouring countries are smuggled by road through unapproved entry points between Ghana and Togo and eventually end up at private tank yards, mining companies and other retail outlets.
Again, he said some players have been dumping gas oil declared for sale to foreign vessels at local filling stations while some of them have been engaging in under-declaration and non-declaration of products lifted at various depots.
“Over 300,000 metric tonnes of actual annual consumption was unreported [last year]” he said.
On the back of these, he said the GNPC has in collaboration with the Ghana Revenue Authority, the Ghana Navy and the security agencies rolled out measures to tackle the problem head-on to save the nation from the loses.
“I believe it is time for petroleum players in the sub-region to engage in a dialogue and the issues that confront us and find common unique solutions for the advancement of our respective countries.
Ghana: Distribution Of Premix Fuel Will Soon Be Digitized- Bawumia
Vice President of the Republic of Ghana, His Excellency Dr Mahamudu Bawumia, has served notice that the digitization agenda of the government will soon be extended to the distribution of premix fuel in order to increase efficiency of its delivery to fishermen.
According to Vice President of the West African country, introducing digital technologies in premix distribution will ensure that fisherfolk, for whom the product is subsidized and provided for, actually get it.
Vice President Bawumia stated this when he delivered a Keynote Address at the 3rd Ghana International Petroleum Conference (GhipCon) in Accra, capital of Ghana, on Wednesday 10th July, 2019.
“We have to increasingly leverage on the digital technologies that are available to increase efficiency in the downstream petroleum sector. One of the areas that we have been discussing and have taken a decision on is for example the distribution of premix fuel in Ghana amongst the fishermen,” Vice President Bawumia said.
“This is an area that has really been a challenging one because there are subsidies to premix fuel, and whenever there are subsidies, the distribution of the product tends to create economic rents, and when it creates these rents all sorts of people come in the middle and the fishermen, for whom this is designed, ultimately don’t even get the product because the products are smuggled and sold to other people who may not even be fishermen at higher prices.
“So we’ve been looking at this issue and we’ve decided that the best way to deal with this is to digitise the process so that we can be able to direct the subsidy to each boat that is registered. We’ve registered all the boats and we will implement a digitization process in the distribution of premix in Ghana soon, and we hope to extend it also to fertilizer in the next year as well. Digitization will also end the politicization of premix distribution,” he added.
Vice President Bawumia assured stakeholders in the petroleum downstream industry that government will create an enabling environment for downstream business to thrive competitively, efficiently and with the highest of safety standards.
“Government, through the Ministry of Energy is in the process of ensuring institutional and regulatory re-alignment of the midstream gas subsector to bring clarity and a degree of certainty to players within that subsector. The Minister for Energy would soon conclude the process of realignment and commence the process of legislative consolidation of the Gas Master Plan into a Gas Act. The proposed Gas Act will provide an enabling environment and appropriate incentives for investors.”
This year’s conference, organized by the National Petroleum Authority in partnership with Association of Oil Marketing Companies and Chamber of Bulk Oil Distributors(CBOD), is under the theme “Regional Collaboration; A Catalyst for Transformation”, and being attended by stakeholders in the petroleum sector in the West Africa sub-region.
Ghana:Petroleum Sector Witnesses Growth In Indigenous Companies-Peter Amewu
Ghana’s Minister for Energy, John-Peter Amewu, has noted that the Petroleum Division of the West African country’s energy sector has seen increased growth of local firms from 2012.
He said by the end of 2016, 776 companies had registered with 480 being local companies, providing either direct or indirect services, ranging from catering services, logistics supplies to fabrication and waste management services.
He said the desire of government to develop indigenous capacity in the energy sector was to achieve about 51 per cent equity participation in wholesale supply and distribution in the electricity supply industry (ESI) in Ghana, with 60 per cent local content; and also develop capacity in the manufacturing industry for electrical cable, conductors and accessories, among others.
The Minister said this in a speech read on his behalf by his Deputy William Owuraku Aidoo at the opening of the 2nd Ghana Energy Summit organized by the Ministry of Energy, in partnership with the Business and Financial Times in Accra.
The theme was: ‘Harnessing Opportunities in Ghana’s Energy Sector-Making Local Participation a Practical Reality’.
The Summit, which opened on Tuesday in Accra, would provide an opportunity for the global energy industry, academics and students, interest groups, journalists, government officials and the public at large, to interact with one another in a non-partisan environment on significant regional, national and global energy issues.
The Energy Minister stated that the Procurement Plan, Technology Transfer Programme, Research and Development Programme, Employment and Training Schedule, Succession Plan and Allied Service Content of business entities in the ESI shall comply with the requirements of L.I 2354 and approved by the Commission.
He said to effectively achieve the above, a baseline study had been conducted on the ESI to measure the current state of local content and local participation in the sector.
Mr Amewu said a Universal Qualification System had been developed among others to facilitate registration by companies and also serve as an online database of companies.
He noted that, in spite of increased local participation in the sector, local companies were faced with numerous challenges, which ranged from lack of finance, human capacity development and technology, among others.
Mr Amewu said the limited capacities of local companies to deliver services required was due to the absence of infrastructure to support the development of the petroleum industry, which limited the volume of work to be carried out in the country.
“Ghana, therefore, needs her own unique strategy of technological progress, pursued with all seriousness if Ghanaians are to make any meaningful impact soon,” he added.
He suggested that investments made should lead to an increase in human capacity to promote skills training and retraining of staff.
Mr Isaac Osei, Managing Director of Tema Oil Refinery (TOR), urged government to create the enabling environment for private entities to thrive, since that was the only way to build a robust and vibrant petroleum industry.
He said government should strengthen and expand the capacity and infrastructure of TOR to be able to add value to crude oil mined from the upstream.
Mr Kwame Jantuah, Chief Executive Officer, African Energy Consortium, said if the country did not change its political setup, politics would continue to interfere in the private sector and hinder it from successfully achieving its goals.
He said the success of the hub was dependent on the stock of crude oil the nation had, and that, it was important for government to consider the onshore Voltaian basin to feed the local oil refineries.
Ghana Rewards Community Efforts To Reduce Carbon Emissions
Ghana has become the third country in Africa to sign a landmark agreement with the World Bank that rewards community efforts to reduce carbon emissions from deforestation and forest degradation.
Other countries that have signed the agreement include Mozambique and the Democratic Republic of Congo.
Ghana’s five-year Emission Reductions Payment Agreement (ERPA) with the Forest Carbon Partnership Facility (FCPF) Carbon Fund, which is administered by the World Bank, unlocks performance-based payments of up to $50 million for carbon emission reductions from the forest and land use sectors.
In Ghana, forest degradation and deforestation are driven primarily by cocoa farm expansion, coupled with logging and a recent increase in illegal mining.
Working in close partnership with the Forestry Commission, Cocoa Board, and private sector, Ghana’s programme with the FCPF Carbon Fund seeks to reduce carbon emissions through the promotion of climate-smart cocoa production.
“The programme’s two central goals – reducing carbon emissions in the forestry sector and producing truly sustainable, climate-smart cocoa beans – make it unique in Africa and the first of its kind in the cocoa and forest sectors worldwide,” Kwadwo Owusu Afriyie, Chief Executive of Ghana’s Forestry Commission said.
“This programme is helping to secure the future of Ghana’s forests while enhancing income and livelihood opportunities for farmers and forest-dependent communities,” Afriyie added.
In Ghana’s ERPA, the FCPF Carbon Fund commits to making initial results-based payments for reductions of 10 million tons of CO2 emissions (up to $50 million).
Ghana’s ERPA also specifies on carbon emission baselines, price per ton of avoided CO2 emissions, and a benefit-sharing mechanism that has been prepared based on extensive consultations with local stakeholders and civil society organisations throughout the country.
“It’s exciting to see the level of stakeholder engagement Ghana has been able to achieve with its emission reduction programme, particularly with the private sector. Some of the most important cocoa and chocolate companies in the world, including World Cocoa Foundation members such as Mondelēz International, Olam, Touton and others, as well as Ghana’s Cocoa Board have committed to participating in the programme,” says Pierre Frank Laporte, the World Bank country director for Ghana.
Source: Esi-Africa.com
Revealed: Generation Shortfall Causing Recent Power Outages In Ghana
It has emerged that deficit in power generation is the cause of recent power outages being experienced in some parts of Ghana.
Some residents in Ghana especially those in the capital, have been witnessing regular power cuts and have been wondering what could be the cause of the current situation.
However, credible information available to energynewsafrica.com indicates that most of the generation plants are producing below capacity because of non-availability of fuel to keep the power plants running.
The West African country has installed capacity of about 4750 MW, but currently peak demand is about 2,700 MW.
Regrettably, available figures show a generation deficit of more than 600 megawatts, forcing distributors to ration power in parts of Accra where demand is the highest.
Karpower, which has a capacity of 450 MW, is producing 16MW, Aksa, with a capacity of 360 MW, is producing 45MW and AMERI, with a capacity of 250MW, is currently producing 195.32MW .
The Akosombo Hydro Dam is also said to be running just two of its six turbines at 500MW, about half its total capacity of 1020MW.
The Bui Hydro Dam is also currently producing 3.2MW out of its 400MW capacity.
It will be recalled that six Independent Power Producers (IPPs) issued threats that they would be compelled to shut down their plants within seven days, if huge sums of monies owed them by PDS and ECG were not paid.
In a statement, the IPPs said the lack of funds was making it difficult for them to procure fuel to keep their plants running.
Sources within the IPPs have confirmed the shortfall in power generation to energynewsafrica.com.
Our checks indicate that GNPC, which issues guarantee that allows Litasco to procure fuel for onward supply to Karpower, has been unable to do so this time around because GNPC does not have the funds to provide the guarantee.
Saudi Aramco To Splash $18 Billion On Marjan, Berri Offshore Fields
Saudi oil giant Saudi Aramco has said it has awarded $18 billion worth of contracts for the engineering, procurement, and construction to boost production from the Marjan and Berri offshore fields.
Saudi Aramco said that fifty percent of the contracts “are being awarded to Saudi Arabian companies, increasing the share of locally sourced materials.”
The $18 billion amount is spread across 34 contracts, however, Saudi Aramco did not provide the identity of the contractors winning the contracts in its statement issued on Tuesday.
The company shared a photo with a press release which showed the names of Saipem, Subsea 7, Hyundai, McDermott, and others in the background.
More on the specific awards is expected to be known in the coming days.
Overall, Saudi Aramco plans to boost production capacity by 550,000 barrels per day of Arabian Crude Oil and 2.5 BSCFD of gas from Marjan and Berri offshore oilfields.
“These two programs will significantly enhance Saudi Aramco’s oil production and gas processing capabilities, both strengthening our position as the leading integrated energy supplier and meeting growing long-term demand for petroleum,” said Amin H. Nasser, president and CEO of Saudi Aramco.
“These investments will support our continued focus on employing best-in-class technologies, well completion, and reservoir management practices. It will enable Saudi Aramco to further reduce the carbon intensity of our crude oils, supporting our strategy of reducing emissions while providing energy to those who need it.”
According to Saudi Aramco, more than 90 companies and institutions were invited to bid on the packages, and 16 Saudi and international companies were chosen in the fields of engineering, supply and construction.
The projects are expected to create thousands of direct and indirect jobs, supporting Saudi Aramco’s efforts to localize and create new job opportunities, Saudi Aramco said.
The Marjan program is an integrated development project for oil, associated gas, non-associated gas and cap gas from the Marjan offshore field. This development program includes a new offshore gas oil separation plant, and 24 offshore oil, gas and water injection platforms.
Saudi Aramco also plans to expand its Tanajib onshore oil facilities and construct a new gas plant, to include gas treatment and processing, NGL recovery and fractionation, and gas compression facilities. A cogeneration facility will be developed, in addition to a water desalination facility and new transfer pipelines.
The offshore oilfield development project aims to increase the Marjan Field production by 300 MBCD of Arabian Medium Crude Oil, process 2.5 BSCFD of gas, and produce an additional 360 MBCD of C2+NGL.
Berri plan
As for the Berri program, Saudi Aramco plans to add 250,000 barrels of Arabian Light Crude per day from the offshore oilfield.
The planned facilities will, upon completion, include a new gas oil separation plant in Abu Ali Island to process 500,000 barrels of Arabian Light Crude Oil per day, and additional gas processing facilities at the Khursaniyah gas plant to process 40,000 barrels of associated hydrocarbon condensate.
The program includes a new water injection facility, two drilling islands, 11 oil and water offshore platforms and 9 onshore oil production and water supply drill sites, Saudi Aramco said.
Source: offshoreenergytoday.com
Ghana Energy Summit Opens In Accra (Photos)
The Deputy Minister of Energy in-charge of Power in the Republic of Ghana, Hon. William Owuraku Aidoo on Tuesday opened the 2nd Ghana Energy Summit at the plush Kempinski Hotel in Accra, Capital of Ghana.
The Summit, which is under the theme: “Harnessing opportunities in Ghana’s Energy Sector-Making Local Participation A Practical Reality” brought together industry players.
Below are some of the exclusive photos captured by energynewsafrica.com’s reporter, who covered the event.
National Energy Services Reunited Corp. Announces Multiple Contract Awards In Bahrain
The National Energy Services Reunited Corp, a national, industry-leading provider of integrated energy services in the Middle East and North Africa and Asia Pacific regions, has announced multiple awards of contracts for well intervention services by Tatweer Petroleum-Bahrain Field Development Company W.L.L.
“We are pleased to see NESR expanding and we look forward to their successful activities in the Kingdom of Bahrain,” Mr. James Kenneth Eastlack, CEO of Tatweer Petroleum said in a statement copied to energynewsafrica.com.
”We are pleased to establish a strong presence in the Kingdom of Bahrain which we will be achieved with solid investment, as well as recruiting and developing the talented national workforce,” he added.
“NESR is steadfast in its commitment to be a partner and key enabler in the Kingdom of Bahrain’s extensive upstream growth plans,” Sherif Foda, Chairman of the Board and CEO of NESR, indicated.
“The E&P Industry has a long history in Bahrain as this is where the first well was drilled in the region, and with the new discovery in Khalij Al-Bahrain Basin, the E&P industry in Bahrain is poised to take a big leap forward under the guidance of H.E. Shaikh Mohammad bin Khalif Al Khalifa, Minister of Oil.”
Mr. Foda added: “As has been aptly stated by H.E. Minister of Oil, this high-quality tight oil and gas reservoir will require a newer approach and will need higher intensity and more complex services. This in turn provides opportunities to enterprising service providers like NESR who can bring all the required technology and best practices to help economically access these reservoirs.
“I would also like to take this opportunity to thank Tatweer Petroleum and H.E. Shaikh Mohammed bin Khalifa Al Khalifa, Minister of Oil, for their trust in NESR and allowing us to contribute towards the nation’s Economic Vision 2030.”
South Africa To Discuss New Power Supply Deal With Zimbabwe
The Zimbabwean Energy and Power Development Minister, Fortune Chasi, will soon lead a delegation to South Africa to finalize a new power supply deal to ease electricity woes in the country.
Since May, Zimbabwe has been facing challenges with power generation from the Kariba dam due to falling water levels.
As such, the country has had to boost imports from South Africa, which have been curtailed due to unreliable payment.
To this end, over the weekend, Zimbabwe’s President, Emmerson Mnangagwa, engaged in talks with his South African counterpart, President Cyril Ramaphosa, to find solutions to the country’s power problems.
Mnangagwa said: “With President Ramaphosa we met and we were sharing challenges we are facing and, in particular, energy shortages. We exchanged views on how we can deal with that issue. Of course, our ZESA owes Eskom quite a lot of money and they have been able to pay $10 million last week to reduce that debt.
“This enables them to have discussions and I think our Minister of Energy [Fortune Chasi] will go to South Africa … to discuss some new arrangements.”
Source: Esi-Africa.com
Mnangagwa said: “With President Ramaphosa we met and we were sharing challenges we are facing and, in particular, energy shortages. We exchanged views on how we can deal with that issue. Of course, our ZESA owes Eskom quite a lot of money and they have been able to pay $10 million last week to reduce that debt.
“This enables them to have discussions and I think our Minister of Energy [Fortune Chasi] will go to South Africa … to discuss some new arrangements.”
Source: Esi-Africa.com
Cyprus Cries Foul As Turkey Deploys Second Drillship
Turkey’s second drillship has in the past few days entered the contested waters offshore Cyprus and is, according to reports, preparing to start drilling.
The government of Cyprus has condemned the move, accusing Turkey of violating Cyprus’ sovereign rights.
The Yavuz drillship, owned by Turkish national oil company TPAO is currently located in waters to the east of Cyprus, around 11 nautical miles (~20 km) to the closest mainland point.
Turkey has previously dismissed Cyprus’ and EU’s calls to show restraint when it comes to drilling in the contested waters, claiming its drillships were to drill in areas where the Turkish Republic of Northern Cyprus had granted licenses to TPAO in 2011.
Turkish Republic of Northern Cyprus is a self-declared state run by Turkish Cypriots and recognized only by Turkey.
While Cyprus is accusing TNRC and Turkey of violating its sovereign rights, TNRC and Turkey have accused Cyprus of unilaterally conducting oil and gas explorations without taking into considerations interests of the Turkish Cypriots, with Turkey saying it “would continue to protect the continental shelf rights of the Turkish Cypriots.” According to Turkish media reports, the Yavuz is expected to start drilling within days.
Responding to the Yavuz drillship deployment this, the government of Cyprus on Monday said:” The Government of the Republic of Cyprus strongly condemns Turkey’s new attempt, close to the Karpasia peninsula, within the Territorial Sea of the Republic.”
The Cypriot government said: “This second planned drilling, within two months from the commencement of the ongoing illegal drilling operations in the western part of Cyprus’ EEZ, constitutes an escalation of Turkey’s continued violations of the sovereign rights of the Republic of Cyprus under the UN Convention on the Law of the Sea as well as customary International Law and constitutes a serious violation of the sovereignty of the Republic of Cyprus.”
The drilling operations off the west coast the government is referring to is being carried out by TPAO’s Fatih drillship, some 72.2 kilometers off the Cyprus west coast.
“Turkey continues to blatantly violate international law, both conventional as well as customary, flagrantly disregarding the European Union’s and the international community’s calls to cease its illegal activities and respect the sovereign rights of the Republic of Cyprus to explore and exploit its natural resources within its maritime zones. Instead of engaging in dialogue, as the international community calls her to do, Turkey deliberately avoids doing so, in order to create new fait accomplis,” official Cyprus said.
Turkey has previously said its actions in the Eastern Mediterranean region were based on its legitimate rights stemming from international law.
“As we previously stressed on many occasions, having the longest coastal line in the region, we will protect our own rights and interests within our continental shelf, as well as those of the Turkish Cypriots around the Cyprus Island,” Turkey’s Ministry of Foreign Affairs said in May.
Cyprus’ government addressed these claims in a statement on Monday too.
It said: “It is indeed paradoxical that, while Turkey does not recognize the Republic of Cyprus, a member state of the United Nations and the European Union, that has concluded international agreements with its neighbors, it attempts to invoke international law claiming at the same time to act upon the “licensing” of an illegal occupying regime. It is underlined, herewith, that drilling operations that are purportedly conducted on behalf of “TRNC” are illegal and null and void, as it is also the case for the secessionist entity in the occupied part of Cyprus, as provided for in the relevant resolutions of the UN Security Council [541 (1983) and 550 (1984)].”
“Ankara ought to realize that the only way to deal with the problems she herself creates, is through an intensive and decisive dialogue that will lead us to a solution on the basis of the relevant UN Resolutions and the principles upon which the European Union is founded. A solution that will, amongst others, address the challenges we currently face as a result of the unacceptable military occupation by Turkey.”
“The Republic of Cyprus is determined to continue to defend its legal rights to the benefit of all its legal citizens, intensifying its efforts at a legal, political and diplomatic level, using all means at its disposal, especially in the framework of the European Union. To this effect, we recall the decisions of the Council of the European Union, and in particular the Conclusions of the European Council of 20th June 2019, condemning Turkey’s illegal actions in the Eastern Mediterranean and underlining the direct and serious impact that these actions have on the whole spectrum of the EU-Turkey relations, and to which the Union will respond with appropriate measures,” the government of Cyprus said.
Source: Offshoreenergytoday.com
Cyprus’ government addressed these claims in a statement on Monday too.
It said: “It is indeed paradoxical that, while Turkey does not recognize the Republic of Cyprus, a member state of the United Nations and the European Union, that has concluded international agreements with its neighbors, it attempts to invoke international law claiming at the same time to act upon the “licensing” of an illegal occupying regime. It is underlined, herewith, that drilling operations that are purportedly conducted on behalf of “TRNC” are illegal and null and void, as it is also the case for the secessionist entity in the occupied part of Cyprus, as provided for in the relevant resolutions of the UN Security Council [541 (1983) and 550 (1984)].”
“Ankara ought to realize that the only way to deal with the problems she herself creates, is through an intensive and decisive dialogue that will lead us to a solution on the basis of the relevant UN Resolutions and the principles upon which the European Union is founded. A solution that will, amongst others, address the challenges we currently face as a result of the unacceptable military occupation by Turkey.”
“The Republic of Cyprus is determined to continue to defend its legal rights to the benefit of all its legal citizens, intensifying its efforts at a legal, political and diplomatic level, using all means at its disposal, especially in the framework of the European Union. To this effect, we recall the decisions of the Council of the European Union, and in particular the Conclusions of the European Council of 20th June 2019, condemning Turkey’s illegal actions in the Eastern Mediterranean and underlining the direct and serious impact that these actions have on the whole spectrum of the EU-Turkey relations, and to which the Union will respond with appropriate measures,” the government of Cyprus said.
Source: Offshoreenergytoday.com
What Next For Government As Dumsor Clock Ticks?
In 1984, Ghana was confronted with its first electricity crisis as a result of a severe drought of the lake, very much attributable to climate between 1982 and 1984. It was reported that the total inflow into the dam between 1982 and 1984 was less than 15% of the expected total, and that triggered power rationing and a reduction of electricity supply to neighboring countries, including Togo and Benin. Yet another prolonged power outages emerged in 1998, largely as a result of low rainfalls and inflows to the Volta Lake. Even though the demand for electricity had falling slightly from 5110 GWh in 1991 to 4965 GWh by 1998, the electricity supply deficit was significant enough to introduce the second round of power rationing.
Beyond these two power crisis which was largely blamed on act of God, the country had to experience several periods of inadequate power supply, including the 2006 to 2007, and 2012 to 2016 power outages. The uniqueness of the 2012 to 2016 power crisis was the longest period the Ghanaian had to endure, with rotating Load Shedding timetable, which earned the name “Dumsor”. Up until the 2012 to 2016 power crisis, the major contributing factor to the persistent, irregular, and unpredictable electric power outage had largely been power generation shortfalls. But today, the narratives have changed tremendously.
Today, Ghana can boast of over 4,750 (megawatts) MW of installed generation capacity from largely hydro-electric and thermal sources. Net dependable capacity exceeds 4,320 MW, and the current Peak Demand rarely exceeds 2,700 MW. The country is also significantly endowed with natural gas to fuel the power plants which are largely dual-fuel-fired. And the Volta Lake is currently at a decent level of over 79 meters (79.754m at January 4th 2019) compared to the prior year level of 76 meters (76.557m at January 4th 2018).
In spite of these favourable conditions which are seen as recipe for aggressive and rapid industrialization, the country is still grappling with unreliable power supply. Since November 2018 till now, the country has been experiencing a recurring power outages.
The problems attributed to the recent inconsistent electricity supply are technical, commercial, regulatory, structural, planning, funding, political, and procurement related. However, the most predominant challenge to the provision of reliable electricity supply is the poor financial status of the power utilities which impacts on the ability to procure the required quantity of fuel for power plants in a timely manner, carry out maintenance services to ensure the availability of the required plant capacities, maintain and expand transmission and distribution infrastructure to ensure system efficiency et cetera.
It is the operating revenues, in the form of tariffs and service charges collected by the power utilities, and capital injection from the state as the sole shareholder of the state owned enterprises (SOEs) in the power sector that yields liquidity for the entire value chain (generation, transmission, and distribution).
However, the financial performance of the state owned utilities have been abysmal in recent times. At the end of 2018, all SOEs in the power sector reported losses, a clear sign of weak sector performance. The deteriorating financials of these entities makes it difficult for them to operate efficiently, and to guarantee reliable and consistent supply of electricity.
Finance Committee Warns
A report by the Finance Committee of Ghana’s Parliament that was discussed in early July 2019, warned that liquidity challenge in the power sector may spur the return of Dumsor.
According to the legislative committee, Ghana’s energy sector is currently overburdened with growing indebtedness as it battles with a debt portfolio of over US$4billion. In the report it is captured that State Owned Enterprises in the energy sector like Ghana Grid Company (GRIDCo), Power Distribution Services (ECG/PDS) and the Northern Distribution Company (NEDCo) have for the past two and half years all posted a revenue loss of GH¢118million, GH¢2billion and GH¢163.7million respectively. And that the situation is worsened by the government’s indebtedness to Karpower Plant to the tune of US$150million, ENI US$160million, NEDCo US$162million, Independent Power Producers (IPPs) US$1billion, GRIDCO US$171million and Ghana Gas Company US$735billion.
According to the report, the total amount accrued from levies collection for 2018, fell short by 9.2 percent over the projected figure of GH¢3.507 billion due to the significant (65.5 percent) fall in the targeted Price Stabilization and Recovery Levy (PSRL) amount, as well as the fall in the targeted amount set for the Public Lighting Levy (PLL) and National Electrification and Scheme Levy (NESL) by 45.76 percent and 43.69 percent respectively. However, the report concluded that the Energy Debt Recovery Levy (EDRL), Road Fund Levy (RFL), and Energy Fund Levy (EFL) all outperformed their targets by 7.9 percent, 0.72 percent and 7.29 percent respectively, at the end of 2018 based on account of 11.79 percent increase in petroleum products consumption volumes in 2018 compared with the same period in 2017.
The falls were attributed to the reduction in electricity tariffs, change in consumer attitude towards energy conservation, gradual shift towards the consumption of renewable energy such as solar and the lower than estimated recovery of electricity bills.
ESLA Accounts, according to the report, recorded a closing balance of GH¢615,417,858 at the end of 2018. During the period, a total amount of GH¢1,353.71million was transferred to ESLA Plc from ESLA Accounts. This amount, the report observed, excluded GH¢16.33million transferred in December, 2018 and received by ESLA in 2019. And that out of a total amount of GH¢1,353,706,144.00 received by ESLA Plc, an amount of GH¢1,104,334,498.02 was used to pay two coupons held by ESLA Bond holders in May and November, 2018. The balance of GH¢326,697,267.78 was transferred into a LOCKBOX Account.
According to the report, even though an amount of GH¢5,453.20 million out of the total proceeds realized from ESLA Plc Bond was applied to redeem part of the legacy debt of the Energy Sector, substantial portions of the debt still remain on the books of the State Owned Enterprises which continue to accumulate new debts.
IPP’s Threatens
Barely a week after the Finance Committee of Ghana’s Parliament warned that there could be Dumsor due to liquidity challenge in the power sector, six Independent Power Producers (IPPs) which currently supply about 1,500 MW of electricity have threatened to shut down their power plants if Power Distribution Services (PDS) Limited fails to settle debts amounting to over US$700 million within eight working days.
The companies includes, Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited – are members of the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB).
Even though these IPPs acknowledge the negative impact a shutdown of power plants will have, they claim they are left with no choice since they cannot continue to be saddled with huge debts, while they struggle to pay creditors, suppliers, and employees’ salaries.
According to the IPPs, as at the time the Electricity Company of Ghana (ECG) was taken over by PDS, they were owed over US$400 million. However the debt has shot to over US$700 million since the PDS took over, suggesting that the PDS has accumulated additional debt of over US$300 million, without a dime paid.
In a statement, the Chief Executive Officer (CEO) of CIPDIB, Mr Elikplim Kwabla Apetorgbor, urged the government, through the Ministry of Energy, to compel PDS to clear the accumulated invoices presented by the IPPs within eight working days, and pay interest on all overdue invoices which the IPPs could have profitably utilized. He charged the Millennium Development Authority (MiDA) to compel PDS to adhere to best business practices and respect the terms of the PPAs and ensure the nation derives the optimum benefit from the concession arrangement.
Mr Apetorgbor stated that following a successful concession, IPPs expected PDS to honour and abide by the terms of the Power Purchase Agreements (PPAs) inherited, particularly by avoiding the delay in paying for power purchases, with respect to the bargained credit days. He regretted that PDS appears to be reliving some of the very bad contractual and business practices that characterized the operations of ECG. He explained that energy can neither be stored nor destroyed, which presupposes that consumers are paying for the power consumed while PDS is accumulating the revenues.
Clock Ticks, What Next?
While the clock ticks, one is left to see how government would reacts to the threat issued by the IPPs to first, forestall any blackout.
It may also be in government’s own interest to investigate the circumstances that might have led to this unfortunate situation, and institute measures to avert the immediate consequences, for it definitely comes as a surprise to Ghanaians that since the takeover of ECG by the PDS four months ago, not a dime have been remitted to the IPPs.
May be, it is about time to take a cue from the Finance Committee of Parliament’s report which discloses that the growing debt portfolio in the energy sector is largely due to the non-adherence to the Energy Sector Levies Act, 2015 (Act 899) as amended in 2017 (Act 946).
Written by Paa Kwasi Anamua Sakyi, for the Institute for Energy Security (IES)
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.
Ghana: We Don’t Have Agreement With You, So Go To ECG For Your Monies Instead Not Us -PDS Directs Cash-Trapped IPPs
The Power Distribution Service (PDS) Ghana Limited has denied claims by the Independent Power Producers (IPPs) that the service owes them huge sums of money for power supplied.
According to PDS, it does not have any contractual agreement with IPPs, as far as power purchase issue is concerned and, therefore, expressed surprise over their claims.
The response from PDS follows threats by the Chamber of Independent Power Producers and Bulk consumers (CIPDIB) that they will plunge Ghana into darkness if some $600m debt owed its members is not paid in eight days.
Chief Executive of CIPDIB, Eliplim Kwabla Apetorgbor, said the decision to cut power supply to PDS has been necessitated by debts they have incurred in running their operations.
These operations, he said, include fueling and maintaining their plants and paying workers.
Eliplim Apetorgbor said the six IPPs had a ‘wonderful marriage’ with the Electricity Company of Ghana until PDS took over the work of ECG.
ECG was paying IPPs every week from earning made from consumers, butt that stopped when PDS took over in March 2019.
Attempt to retrieve these debts have been met with resistance from PDS. They have also failed to respond to their demand letters or invitations to a meeting to discuss outstanding payments.
The way out, Mr. Apetorgbor threatened, is to stop supplying their 1,500 megawatts of power to PDS, which constitutes more than 50 per cent of what is required to meet the demands of consumers.
However, speaking on Accra-based Oman FM, William Boateng, who is the Head of Communications at PDS, said his outfit rather has a contract with Electricity Company of Ghana, which is currently bulk power trader, adding that PDS has not reneged on it.
“We have honoured all our concessional obligations to ECG. ECG gives us bulk bills and we pay every week,” he pointed out.
Background
It will be recalled that Manila Electric Company (Meralco) officially took over running of ECG from March 1st this year, under a 20-year concession agreement.
The negotiated Transaction Agreements – namely the Lease and Assignment Agreement, Bulk Supply Agreement, and Government Support Agreement – to secure the proposed Private Sector Participation (PSP) in ECG were approved by Cabinet and ratified by Parliament.
The Concessionaire, according to the agreement, is expected to inject an amount of $580m into the distribution system during the agreement period’s first five years.
The Bulk Supply Agreement between ECG and the Concessionaire deals with the Concessionaire’s back-to-back purchase of the capacity and energy made available to ECG under the Power Purchase Agreements (PPAs).