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‘Fossil Fuels Account for Over 80% of Global Energy Use’, -EI Review of Energy Statistics

By Ogo-Oluwa Aiyefele, in London

Growth economies struggle to curb fossil fuel growth, but renewables accelerate in China .

As a share of the overall energy mix, global fossil fuel consumption was at 81.5% in 2023, marginally down from 82% in 2022.

This is one of the key highlights of the latest report of the Energy Institute (EI); its annual Statistical Review of World Energy (formerly bp annual statistical review of world energy), released on June 17, 2024.

The perception here is at odds with the highlights of the International Energy Agency (IEA) report on the current crude oil market, released in the week of June 10, 2024, which stated that “world oil demand growth continues to slow, with 2024 gains now seen at 960,000Barrels of Oil Per Day, some 100 ,000BOPD below May 2024 forecast”.

IEA explained that “weak OECD (mainly Europe) deliveries pushed global demand into a narrow y-o-y contraction in March 2024. Subpar growth of 1Million BOPD in 2025 is held back by a muted economy and accelerating clean energy technology deployment”.

The EI Review agrees with this to some extent. It alerts that “dependence on fossil fuels in major advanced economies is likely to have peaked: In Europe fossil fuels fell to below 70% of primary energy for the first time since the industrial revolution, driven by demand reduction and renewable energy growth. In the United Sates, consumption of fossil fuels fell to 80% of total primary energy consumed”.

But the EI report also says that “global primary energy consumption overall was at a record absolute high, up 2% on the previous year to 620 Exajoules (EJ)”.

Indeed, EI submits that “global fossil fuel consumption reached a record high, up 1.5% to 505 EJ (driven by coal up 1.6%, oil up 2% to above 100Million barrels for first time, while gas was flat). As a share of the overall mix, they were at 81.5%, marginally down from 82% in 2023.

“Emissions from energy increased by 2%, exceeding 40 gigatonnes of CO2 for the first time”.

While IEA appears to be fixated on advanced economies, the EI report notes: “Growth economies struggle to curb fossil fuel growth, but renewables accelerate in China .

“In India fossil fuel consumption was up 8%, accounting for almost all demand growth, and stood at 89% share of overall consumption. For the first time, more coal was used in India than Europe and North America combined”.

What is clear is that the IEA is monitoring and reporting its own interpretation of the energy demand and supply trends today, while the EI report will collect all data today and release 2024 trends in 2025.

The EI Statistical review says that “in Africa primary energy consumption fell in 2023 by 0.5%. Fossil fuels accounted for 90% of overall energy consumption, with renewables (excluding hydro) at only 6% of electricity.

“And China’s full return post-COVID saw fossil fuel use increase to a new high, up 6%, but as a share of primary energy it has been in decline since 2011, down to 81.6% in 2023. China added 55% of all renewable generation additions in 2023, i.e. more than the rest of the world combined. It also overtook Europe on an energy per capita basis for the first time”.


American Contractor Builds a Facility Centre in New Hot Spot Cote D’Ivoire

Baker Hughes has commissioned a  facility in Cote D’Ivoire, a new exploration hot spot in West Africa.

The shop will primarily support the company’s subsea production system contract on the Baleine field, which includes three horizontal subsea wellheads in the project’s Phase 1, growing to eight (8) horizontal subsea wellheads in the project’s Phase 2 and projected up to 15 on Baleine Phase 3. The subsea production system contract is worth over $2Billion value of work.

The shop will also cater for all the other services that Baker Hughes hopes to win in Cote D’Ivoire’s, including Directional Drilling,  Logging While Drilling LWD, Completions and other related services.

Cote D’Ivoire was a minor player in the upstream oil and gas industry until September 2021, when ENI, the Italian giant, made a discovery in Baleine-1 in the Tano Basin and announced that the potential of the find could be “preliminarily estimated at between 1.5 and 2.0Billion barrels of oil in place and between 1.8 and 2.4Trillion cubic feet (TCF) of associated gas”.

10 months later, in July 2022, ENI made a second discovery which extended the hydrocarbon fill in Baleine structure. The company declared that the new find meant an increase by around 25% of the volumes of hydrocarbons in place in the play, “now estimated at 2.5Billion barrels of oil and 3.3Trillion cubic feet (TCF) of associated gas”.  The Baleine East-1 discovery is located in block CI-802, adjacent to the one (CI-101) in which the first discovery was made.

In March 2024, the Italian explorer announced yet another discovery in another block (CI-205) farther west. The Calao accumulation of light oil, gas, and condensates in various intervals of Cenomanian age is stored in water depths of around 2,200 metres. “Preliminary assessments indicate potential resources ranging between 1 and 1.5Billion barrels of oil equivalent”.

 


Cote D’Ivoire’s Return to the Oil Patch, and Other Opportunities

Dear Subscriber,
The Vol. 25, No. 5 (MAY 2024) edition of Africa Oil+Gas Report

is themed:
NEW TECHNOLOGIES UPDATE

 Below is the link to your copy:

https://africaoilgasreport.com/wp-content/uploads/2024/06/AOGR, Volume-25-No-5-May-2024

Some of the highlights:

KICKSTARTER

COVER STORY

 OILPATCH SAHARA

IN THE NEWS

WHO IS BUYING/SELLING?

SPREADSHEETS

MAPS

Plus, the regular features; Nigerian Independents Output, Concession Status, Angolan Production by Companies, Petroleum Rights, etc.
Contacts: +2348028354297, +2348124374087, +2348038882629, +2348036525979


Sudan’s Civil War Finally Takes a Toll on South Sudanese Crude Output

By Macson Obojemuinmoin

Oil flows from South Sudan have finally been disrupted by the civil war ravaging Sudan, to the north of the border.

It has taken over 12 months, but it has finally happened. Until February 2024, despite the intense war in Sudan, noting had happened to the infrastructure which evacuated South Sudan’s over 150,000 Barrels Per Day of crude oil output.

Until then, liftings from the Bashayer terminal averaged ~ 152,000BOPD, which was around 22% higher than the 2022 average of 117,000BOPD, several reports say, some of them quoting Kpler, the intelligence firm.

But South Sudan’s output has been looking for the floor since early February 2024, when Sudan’s rival forces inflicted significant infrastructure damage across their country, including the main refinery and key export pipeline as well as water treatment plants and power stations

South Sudanese output crashed to 86,000BOPD in March 2024.

Sudan itself has turned to diesel imports since mid-March 2024, taking at least two cargoes from Russia.

Now that its evacuation route has been badly impacted, it will take a while for South Sudan to improve its crude oil production.

Peace talks between the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF), who have been fighting since April 15 2023, are suspended. Their beef stems from disagreements over the country’s transitional future. Various peace efforts led by the regional bloc, the Intergovernmental Authority on Development (IGAD), on the one hand, and the US and Saudi Arabia on the other, have largely failed to secure even a ceasefire.

Sudan’s Ministry of Energy and Petroleum, which operates under the de-facto government led by the SAF’s general Burhan, recently declared force majeure on crude oil exports, citing a “major rupture” in the export pipeline that links South Sudan’s ‘Dar Blend’ oilfields on Blocks 3 & 7 with the Bashayer-2 Marine Terminal at Port Sudan.

Located 70 kilometres north of Khartoum, the al-Jaili refinery is the only route for South Sudan’s oil exports to the global market through the Bashayer terminal on the Red Sea.

 

 


What is Technology Telling Us/Our Latest Issue

Some are cheering: Drill Beby Drill!!!

Others lament the burning planet.

Some are angling for gas monetization; others want to replace “expensive” natural gas with solar and wind power.

Others insist on large, onshore LNG plants; others prefer nimble Floating LNG facility.

The market will lean towards efficiency and affordable pricing, So, once in a while we should look at what is the technology trends, especially in the energy transition. The longevity of the hydrocarbon industry has been determined by technological innovations. Part of our remit, as the primer on oil and gas on the African continent, is to provide as much technical intelligence as we identify market opportunity.

We keep our doors wide open to publishing technical articles by the large tribe of oil service firms whose strides in innovations help this industry along. Technology adaptation will keep determining how profitably companies navigate the constructs of the oil patch.

This edition is one of the infrequent ones we devote, if only tangentially, to the subject.

Read your copy here

The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since November 2001, AOGR is a monthly, hardcopy publication delivered to subscribers around the world. Its website remains www.africaoilgasreport.com and the contact email address is info@africaoilgasreport.com.

Contact telephone numbers in our West African regional headquarters in Lagos are

2348130733523, 2347062420127, 2348034449079, 2348036525979, 2348023902519,

2348038882629.


American Contractors Rush to Build Drilling Fluids Factories in Namibia’s Key Port

American oil service companies Baker Hughes and Halliburton have announced separate plans for construction of a new liquid mud plant each in Namibia’s Port of Walvis Bay.

A drilling mud or drilling fluid is a heavy, viscous fluid mixture that is used in oil and gas drilling operations to ferry rock cuttings to the surface and also to lubricate and cool the drill bit. By hydrostatic pressure, the drilling fluid helps prevent the collapse of unstable strata into the borehole and the intrusion of water from water-bearing strata that may be encountered.

Namibia is the flavour of the month in the search for new, large scale hydrocarbon resources in Africa, attracting the biggest oil majors who are committing hundreds of millions of dollars to wildcat exploration drilling in the Orange Basin, in the country’s ultradeep waters.

The drilling fluids in use by the operators, Galp, Shell and TOTAL, are imported into Namibia from neighbouring Angola.

Baker Hughes says that apart from its liquid mud plant, it will install a separate assembly, maintenance and repair base at Walvis Bay to cater to booming offshore exploration activities.

While Baker Hughes has named September 2024 as the date for commencement of its mud plant, Halliburton says that environmental clearance process towards its construction of its “liquid mud treatment and completion fluid plant (LMTP)” has been initiated; it plans to invest $10.5Million) in Walvis Bay for the project.

Halliburton says that its plant will be located at Berth 8 in the Port of Walvis Bay, “identified by NamPort as the best location due to its proximity to the pier for shipping materials, ingredients and final products to and from the facility”.

But Walvis Bay is not the Namibian government’s primary choice of a key logistics base for oil and gas activity.

It is the Lüderitz Bay, the country’s easternmost bay, whose surrounding area was made into a trading station by German trader Adolf Lüderitz in 1893. Mr.  Lüderitz concluded treaties with the neighbouring chiefs, who ceded large tracts of country to him and other newcomers.. Namibia’s port authority, Namport is scouting for its own $64.5Million part of the finance for a Public Private partnership construction of an extension of the quay wall of the Port of Lüderitz Bay by at least 300metres, to accommodate more platform support vessels. The total cost is estimated at around $137Million

 


Nigeria: The 11 Year Window/Our Latest Issue

Time is still running out for Nigeria to take the full advantage of its hydrocarbon deposits, which it had largely exported in the raw for over 60 years.

Bola Tinubu’s one year old administration has been running with it; engaging, enunciating reform policies at a rate not seen in the last eight years, but there is the weight of history to deal with and Nigeria does happen, even to the best laid out intentions.

We are far from where we were when we published the first of this annual monitoring edition in 2023; the first products from the gigantic Dangote Refinery (650,000Balrrels Per Stream Day) have rolled out and there is a clear line of sight to ample domestic manufacture of gasoline by a private sector player.

But the fact doesn’t change that there is just about 11 years to the beginning of the end of the fossil fuel era.

Nigeria still desperately needs to convert its vast gas resources into products that enrich the economy; the state hydrocarbon company remains a chokehold to development;one crucial grid length, natural gas pipeline, which should enable evacuation to power plants and industries, has been under construction for close to 15 years. A second one, for which installation started three years ago, is facing severe headwinds.

The electricity supply system remains inchoate. Generation is a superbly weak part of the chain.

As oil majors leave the country’s onshore and shallow water assets, Nigerian independents are coming in. With very few exceptions, the overall performance of the Independents is poor and is a large reason for the continuing low crude oil output.

Bola Ahmed Tinubu has done more than a bit. The issue is that there is so far, still far. We revisit the agenda we set for him in the April 2023 issue.

Read your copy here.

The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. Published by the Festac News Press Limited since November 2001, it is a paid subscription based monthly, hardcopy and pdf publication delivered around the world. Website is www.africaoilgasreport.com. Contact email address is info@africaoilgasreport.com. Contact telephone numbers in our West African regional headquarters in Lagos are +2348130733523, +2347062420127, +234803652979, +2348023902519.

Editor

 

 


Italy’s Largest Oil & Gas Contractor Gets the Most of the French Major’s New Angolan Project

Italian engineering firm, Saipem, says it has clinched three new contracts awarded by TOTALEnergies E&P Angola Block 20 for the 70,000Barrels of Oil Per Day (peak) Kaminho project for an overall amount of $3.7Billion

TOTAL itself, in announcing the Final Investment Decision for the Angolan deepwater facility, cost the project at $6Billion.

In effect, Saipem has been awarded contracts worth 62% of the full project cost.

“The first contract refers to the Engineering, Procurement, Construction, Transportation and Commissioning of the Kaminho Floating Production Storage and Offloading (FPSO) vessel”, Saipem announced. “The second contract entails the Operation and Maintenance (O&M) of the same vessel FPSO for a firm period of 12 years with a potential 8-year extension, leveraging on the expertise acquired from three other FPSOs currently operating in Angola”, the company explained.

“The third contract involves the Engineering, Procurement, Supply, Construction, Installation, Pre-Commissioning and Assistance for the commissioning and start-up of a Subsea, Umbilicals, Risers and Flowlines (SURF) package which includes approximately 30 km of 8” and 10″ subsea flowlines and risers, and umbilicals”.

Saipem says that the associated structures will be fabricated in Saipem’s local (Petromar) yard in Ambriz, a municipality in Bengo Province located 180 kilometres north of the capital Luanda

“For the offshore campaign, and specifically for the J-lay vessel, Saipem will deploy its FDS and will widely involve the local supply chain for logistics and fabrication activities”, the company notes.

.

 


Block 20: TOTAL Takes FINAL Decision on Angola’s “Symbolic” Pre-Salt Reservoirs

By Toyin Akinosho, Publisher

TOTALEnergiies, its partners and Angolan authorities, have announced the Final Investment Decision (FID) of the Kaminho deepwater project in the country’s deepwater Kwanza Basin.

The first large deepwater development in the Kwanza basin will develop the Cameia and Golfinho fields, located in 1,700 metre water-depth, 100 kilometres off the Angolan coastline.

Production start-up is expected in 2028, and although the peak output is a mere 70,000 barrels of oil per day, the Kaminho development is significant for the sheer difference in geological make up, compared with all the previous oil developments in deepwater West Africa.

It’s the first deepwater development targeting oil and gas reservoirs located below the salt layer (such accumulations are geologically termed ‘Pre-Salt’) in the region.

It is also the only development that has come to fruition, from the Angolan Kwanza Basin Pre-Salt drilling campaign of 2010-2014.

The idea of Pre-Salt Exploration in the Kwanza Basin came in the wake of the massive discoveries of hydrocarbon in Brazil’s deepwater Campos Basin, widely regarded as conjugate to Angola’s Kwanza Basin. But the Angolan twin has essentially shown signs of deformity, it could be argued.

Angolan officials often cite bid rounds as routes to increased output of hydrocarbons. Just like Egyptian officials, they open bid rounds again and again.

Between 2010 and 2015, over $9Billion was spent on exploration efforts in 11 acreages, by eight international companies chasing massive tanks of oil beneath the layer of salt in the ultradeepwater segment of the Kwanza basin.

The money covered licensing round payments in the 2010/2011 open acreage sale, predrilling and drilling expenses.

As of Christmas of 2015, twenty-one exploration wells had been drilled in the “Pre-Salt campaign” (in the Kwanza Basin, outside of the Congo Basin, where Angolan hydrocarbon is typically produced from). Nine of the wells were outright dry holes, six non-commercial, and five of them considered commercial finds, according to Sonangol, the state hydrocarbon company.

It was during this campaign that Cobalt International Energy, the now bankrupt American independent, encountered the reservoirs that have become the basis for the Kaminho development.

Over the years, the operatorship of Cameia and Golfinho discoveries have changed hands. In December 2018, TOTAL announced it had signed a sale and purchase agreement with Sonangol to acquire interests in Blocks 20/11 and 21/09, which housed the accumulations.

Today, partners for the Kaminho development include TOTALEnergies (40%), the Malaysian state hydrocarbon firm Petronas (40%) and Sonangol (20%).

The project comprises the conversion of a Very Large Crude Carrier (VLCC) to a Floating Production Storage and Offloading (FPSO) unit, which will be connected to a subsea production network. Designed to minimize greenhouse gas emissions and eliminate routine flaring, this FPSO is all-electric and associated gas will be fully reinjected into the reservoirs.

The Kaminho project will involve over 10Million man-hours in Angola, mainly with offshore operations and construction at local yards, TOTAL claims in the press release.


Briefcase Companies, Procurement Scams, Partly to Blame for Decline in Nigerian Crude Output – NNPCL Boss

By Lukman Abolade, Senior Correspondent

Mele Kolo Kyari, Group Chief Executive Officer of the NNPC Limited, the Nigerian state hydrocarbon company, has fingered security issues, ‘briefcase companies’ and the fiscal environment, as parts of a cohort of challenges responsible for the declining investment in Nigeria’s oil and gas sector.

“As we all know, the security challenges are real, it is not just about theft, it is about the availability of the infrastructure to deliver the volume to the market. No one is going to put money into oil production when he knows that the production will not get to the market”, Kyari told a Stakeholders’ Engagement with the National Association of Petroleum Explorationists (NAPE).

Calling out ‘bad actors’ among the ranks of Nigerian indigenous operating companies, as well as the contracting segment of the industry’s upstream class, Kyari said: “the reality is that people create companies, in all segments, around friendships around relationships, not around value and the ultimate impact is that this country is seen not just as a bad investment location, but as a war zone. War means many things: war can be economic war, it is not just gun. So that’s why the issue of contracting both within our own company NNPC and within our partner companies is important to us. The good intention our country has of having local content development is essential, which is to produce locally, build capacity and return value to our country. This is beautiful, but it doesn’t mean that the meaning of this is to enrich a few people. I don’t think so. The combination of those compromises along the value chain resulted in sending most of the critical contractors out of our country today. And the reason is not competition”.

Arguing that contractual issues and “paper companies” were huge challenges wrestling down investors‘ confidence in the country, Kyari, a trained geoscientist who is a card carrying member and Fellow of NAPE, lamented to the group of petroleum explorationists  and C-suite level executives of  oil majors, that by creating shell contracting firms, several companies focus on making the money from procurement than from production, shooting up the cost of production.

But Mr Kyari c kept going back to highlight the security issues along the crude oil pipeline right of way in the Niger Delta.

“Within the last two years, we removed over 5,800 illegal connections from our immediate frontline, we took down over 6,800 illegal refineries. We simply cannot get people to put money into it until we solve that problem,” he said.

Kyari added that the discussions on energy transition, late passage of the Petroleum Industry Act (PIA), poor infrastructure “and the discovery of oil in many places” also contributed to the decline in oil and gas investments in the country.

“Our country struggled to change its fiscal terms since the year 2000 until 2021, when the PIA came into being, it was already 21 years late. New troubles that were created by the energy transition conversation, banks stopped lending to oil and gas and many more things. And secondly, oil started appearing in unexpected places. And everybody decided to throttle down investment in Nigerian oil and gas,” Kyari noted.

Highlighting the enduring demand for oil and gas in the energy mix, Kyari said projections have suggested a continued need for up to 100Million barrels of oil equivalent by 2050. Against this backdrop, he stressed Nigeria’s strategic position in Sub-Saharan Africa, where a substantial portion of global growth is forecasted to occur, with Nigeria poised to play a central role.

While speaking on NNPCL’s effort to increase production and attract investment in the sector, Kyari disclosed that three substantive gas projects are set to take off in 2024.

He stated that NNPC in collaboration with its JV and PSC partners plan to drill up to 26 gas exploration and appraisal wells, over 16 gas development wells and 21 oil exploratory wells as well as come up with a rig-sharing program to reduce the cost of drilling and enhance collaboration among companies.

“We are going to come up with a rig-share programme so that even the rig owners can have an assurance when they come to this country, they don’t have to go away. So that the cost of drilling itself will go down, there’s a visibility about when this will end, you have the assurance that the rig can stay with you for three to five years. We’re going to check this and this industry will align it so that we have a line of sight around our commitments. So that those drilling activities can actually take place at a cost and invest of course, that is possible,” he noted.

During his welcome address, the NAPE President, Abiodun Ogunjobi, said the Stakeholders engagement was to address pressing issues in the oil and gas industry that demand urgent intervention, most especially the declining investment in the sector.

“To restore us to the Two Million plus-barrel per day production will require a deliberate investment in the exploration and production activities. Despite our projections over the years of 40Billion barrel reserves and 600Trillion cubic feet (Tcf) of gas, we have consistently remained at the threshold of 37Billion barrels of oil and 209Tcf of gas”, Ogunjobi said.

The NAPE president added that to tackle these challenges, there must be strong and intentional collaboration between the NNPCL and E&P players.

He also said there is a need to leverage technology and foster a skilled workforce that is crucial for the industry to deliver these objectives.

“For efficient gas production and utilisation, we will need to upgrade all our existing and add more infrastructure to our gas development system. The time to increase your oil and gas production is now and it requires an intentional workforce such that we can use the resources that we have and navigate our way through the transition phase to the new mega-change dynamics,” Ogunjobi noted.

Kyari was asked, in a post-address question-and-answer session, about the status of the NNPCL’s frontier basin drilling as well as update on the Ajaokuta-Kaduna-Kano (AKK) gas pipeline in the north of the country. A summary of his response:

“The Chad Basin, you know that we’ve been around there for over 40 years. Currently, we are drilling a well. I think it’s too early to speak about it due to some NDA issues. I don’t know if I can speak about it. But where we are today is better than what we ever did in 40 years. Now that is sufficient information. So, there is oil in the cretaceous, of course, you know, there are regulatory issues around making declarations but I can tell you with all confidence that there is sufficient oil even in the Chad basin,” he said.

On the AKK pipeline, Kyari said that over 75% has been completed and is expected to become functional by the end of 2024 or first quarter of 2025.

“I can also tell you today, we have almost done over 75% on the AKK line and our target is to complete it by the end of this year. At least introduce hydrocarbon into it, we may not complete some of the associated facility that we don’t need today,” he said.

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