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Ugandan Businessmen Call For Local Content

Ugandan private sector interest group, the Association for Uganda Oil and Gas Service Providers(AUOGS), has called on government to include opportunities for local firms in the Petroleum Bills tabled before Parliament.

The country’s legislative arm is debating two bills – Upstream (Exploration, Development and Production Bill 2012) and Mid-stream (Refining, Gas Processing and Conversion Transportation and Storage Bill 2012). The Upstream bill instructs Exploration and Production companies as well as their agents to give preference to goods and services produced or available in Uganda unless they are more expensive or of inferior quantity and quality to those that can be imported. The AUOGS however argues that the provision could be interpreted to the disadvantage of indigenous companies. “Who determines whether the services by local firms do not meet the international specifications?” the lobby group contends. “There should be an independent body to scrutinize whether dealers meet the required standards.”

The AUOGS asks the Natural Resources Committee  of the Parliament-which  has been gathering views from the public to include enough clarity in the law to ensure that local firms benefit from local content opportunities set aside for them.

“Government needs to be clear what a Ugandan company is”, AUOGS Chairperson Bob Kabonro told the committee, “is it one registered in Uganda or one owned entirely by indigenous Ugandans?”  He declared that “there has been lack of enabling laws on the provision of goods and services”.

Emmanuel Baluyi, the lobby group’s lead counsel, requested that laws should give preference to indigenous contractors, encourage joint ventures between indigenous companies and foreign companies and ensure uniform financial and legal accounting standards for ll international oil companies that operate in Uganda.


South Africa Warms Up To Gas

First it was the National Planning Commission report. Then came the Cabinet’s lifting of moratorium.

Overnight, the mainstream thinking of the South African political and business elite has changed from “gas-is-not-on-the cards” to “its -okay-to-include-gas-in-the mix”.

The South African National Planning Commission’s revised plan, released in August 2012, repeated its cautionary note on the cost of nuclear power, the country’s preferred alternative to fossil fuels, and suggested a diverse mix of energy sources. The Commission said: “If gas reserves are proven, and environmental concerns alleviated, then development of these resources and gas-to-power projects should be fast-tracked.”

Several days after the Planning Commission’s report was aired all over the media, the government lifted a year- long moratorium on Shale Gas Exploration.

And then, the South African media went agog with discussions about the imperative of gas in the country’s energy mix.

South Africa’s energy policy has not always viewed natural gas, the world’s least polluting fossil fuel, as an important resource for its planned, massive increase in electricity supply capacity.

The Integrated Resource Plan (IRP) for the country, published as a government gazette in May 2011, envisages an addition of 42, 600MW of new build electricity generation capacity between 2010 and 2030, to all existing and committed power plants. The plan assumes a nuclear fleet of 9,600MW; 6,300MW of coal; 17,800 MW of renewable;  and 8,900 MW of other generation sources, which includes only 2, 400MW of close cycle gas turbine generated power.

The installed open cycle gas turbines currently generate 1,316MW, or a mere 4% of the country’s nameplate capacity. Two of these four gas plants-the 588MW Ankerlig plant and the 438MW Gourikwa plant- were commissioned only in the last six years. Before they were built, the country was generating just 342MW (171MW each) from two plants: Acacia and Port Rex. South Africa’s power utility Eskom currently supplies 45% of Africa’s power and 95% of its own country’s electricity, mostly from coal-fired plants. There’s limited space for more private sector generation in the medium to the long term.

We have argued, in this magazine, that even the 2,400MW of gas fired electricity in the IRP, a 20 year resource plan envisaging a build of  42, 600MW, is a mere after thought. The national conversation around energy issues in South Africa has involved every conceivable energy source but natural gas. The roll out for installation of renewable energy plants has kicked in; there’s a vibrant discussion of the possibility of scaling up nuclear power generation in the country, even if there are more skeptics than optimists; and the place of coal in the country’s energy future is assured.

But no one was, really, discussing gas until recently. The IRP had extensive input from a wide range of stakeholders in the energy industry.

A key reason for the aversion to gas utilization in S.A’s energy mix is that while the country doesn’t have much gas reserves, it considers the cost of imported gas as rather too high.  Take this liner in the plan:  “The import coal and hydro options are preferred to local options, but imported gas is not preferred to local gas options”. So, even while South Africa has the opportunity to benefit from the recent natural gas finds offshore Mozambique, one of the  most significant hydrocarbon discoveries  on the planet in the last 10 years.

The current upbeat mood about gas in the South African national conversation is driven largely by the optimism that Shale gas exploration would unlock trillions of cubic feet of shale gas in the Karoo.

The discussion still has not accommodated nuanced reviews of the opportunities afforded by gas pools in neighbouring countries.


Mart Resources Reports Sharp Drop in Revenue

Mart Resources, the Canadian minnow with keen interest in Nigerian production, reported a sharp drop in second-quarter 2012 earnings “due in part to lower oil prices and waning oil production”, according to the Energy Press. Bloomberg, the financial news periodical, said the company’s revenue “fell the most in almost seven months”. But the board, chaired by Founder and CEO Wade Cherwayko, declared a quarterly dividend of $.05 per share, to be paid out to its shareholders by October 2, 2012. Mart, which is listed on the Toronto TSX Venture Exchange, posted $0.88 per cent drop in profits of $2.34 million or $.07 a share, in the context of a net income of $20.81 million, or $.06 per share. Mart’s earnings declined to $28.2 million, down 41 per cent from $47.9 million.

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El Merk On Course For 2012 Date

Algeria’s El Merk oil and gas project is on course for commissioning in the fourth quarter of 2012. The El Merk central processing facility will serve as a production hub for the region, processing hydrocarbons initially from Block 208, operated by the Sonatrach/Anadarko Association, and from the unitised EMK field located on a portion of both
Block 208 and the Sonatrach/ConocoPhillips operated Block 405a.
The project will be operated by Sonatrach and Anadarko on behalf of the El Merk partners: Sonatrach, Anadarko, Maersk Oil, Eni, ConocoPhillips and Talisman. Block 208 is located 90 km south of the Sonatrach/Anadarko-operated Hassi Berkine South (HBNS) facility.

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Naïve Students Transform To Global Players

As an AAPG Region, Africa has taken part in the Imperial Barrel Award Programme(IBA) since 2008. It is a global competition organized annually by the American Association of Petroleum Geologists (AAPG), among its Regions and Sections.
Post-graduate geosciences students from around the world are given real-life petroleum industry data which they have to study, interprete, package and present to industry experts as a new ventures project or opportunity. Students of an IBA team act as a New Ventures Group of an operating oil and gas company, assigned the task of making a detailed assessment of the petroleum potential of a newbusiness opportunity, in just eight weeks. They are expected to “think outside the box” and look at new exploration models based on the most recent published research and their given education.

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New Discovery May Lead To Fourth Field Development Offshore Ghana

Tullow Oil may have set off a chain of events for a fourth field development plan offshore Ghana.
The Wawa-1 discovery in the Deepwater Tano licence, announced on July 17, is located 10 kilometres north of the Enyenra-3A well, testing the previously undrilled, updip portion of the licence. More crucially, however, pressure data shows that it is a separate accumulation from TEN(Tweneboa, Enyenra and Ntomme), a cluster of fields whose development plan is on course for submission to the Ghanaian authorities.
Another such cluster of fields, the MTAB(Mahogany, Teak, Akasa and Banda) is in pre-development plan stage. These two developments, each of which is predicted to deliver at least 100,000Barrels of Oil Per Day at optimum when completed, are separate units from the Jubilee field, currently producing 70,000BOPD, and scheduled to be scaled up to 125,000BOPD by 2013.

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