All posts tagged feature


Stéphane Michel is TOTAL’s New President Gas, Renewables & Power (GRP)

TOTAL has appointed Stéphane Michel as its President Gas, Renewables & Power (GRP) and a Total Executive Committee member, a position previously held by Philippe Sauquet, who has exercised his retirement rights.

Mr. Michel, a former Energy Advisor to a former French Finance Minister, resumed work on March 1, 2021.

Prior to the promotion, he was Senior Vice President Middle East & North Africa, Exploration & Production. Laurent Vivier succeeded him in that position in January 2021.

“The Gas, Renewables & Power segment has a key role to play in the growth, value creation and transformation of TOTAL into a broad energy company. We are very pleased to welcome Stéphane Michel to the Executive Committee,” commented Patrick Pouyanné, the company’s Chairman & CEO. “

TOTAL’s Executive Committee now consists of:

  • Patrick Pouyanné, Chief Executive Officer
  • Arnaud Breuillac, President, Exploration & Production
  • Helle Kristoffersen, President Strategy-Innovation
  • Stéphane Michel, President, Gas, Renewables & Power
  • Bernard Pinatel, President, Refining & Chemicals
  • Jean-Pierre Sbraire, Chief Financial Officer
  • Namita Shah, President, People & Social Responsibility
  • Alexis Vovk, President, Marketing & Services

 

Before Stéphane Michel became TOTAL’s SVP Middle East & North Africa, Exploration & Production in January 2014, he was the Managing Director of TOTAL E&P Qatar (2012-2014) and TOTAL E&P Libya (2011). He joined the Group in 2005, working for Downstream Asia, based in Singapore.

Stéphane Michel was born in 1973 and is a graduate of École Polytechnique (1994) and École des Mines de Paris (1997). He served as Energy Advisor to the French Finance Minister (2002-2004).

 


Shell Sells off Egyptian Assets to Cheiron, Cairn

Shell has signed an agreement to sell its entire stakes in 13 onshore concessions, in Egypt’s Western Desert, as well as a 50% stake in Badr El-Din Petroleum Co. (Bapetco), all in Egypt. The deal is expected to complete in the second half of the year. It will have an effective date of January 1, 2020.

The assets are being sold to Cheiron Petroleum Corporation and Cairn for a consideration of $646Million, with additional contingent payments of up to $280Million depending on oil price and exploration success.

The deal covers 40% interest in Alam El Shawish and 52% interest in North East Abu Gharadig. The 100% owned onshore exploration assets are South East Horus, West El Fayum, and South Abu Sennan a 100% stake in the Obaiyed, North Umbaraka, Badr el Din (BED) fields, Sitra, North Alam El Shawish, and North Matruh.

Cheiron purchases half of these Shell’s stakes in the 13 concessions. The remaining half will be purchased by Cheiron’s strategic partner, Cairn Energy plc, a new entrant into the Egyptian upstream sector.

Cheiron will operate the production and development concessions in the asset portfolio, whereas Cairnwill operate three of the exploration licenses. The field activities will continue to be managed by the Bapetco Joint Operating Company.

The consideration will be subject to customary working capital adjustments for the period between the effective date of the transaction (1 January 2020) and the completion date.

The acquisition will add Proven plus Probable reserves of 226MMBOE and production of approximately 80KBOEPD (as at 31 December 2020).

Funding for the acquisition will be provided by a strong syndicate of nine International European, Middle Eastern and African Banks and Lenders, and advisory support has been provided to the partnership by Rothschild & Co and Gaffney Cline & Associates. It’s a reserve-based lending (RBL) facility of up to $350mn and a joint junior debt facility of $100mn. Existing cash on balance sheet will also be contributed.

The asset sale is subject to Government and Partner approvals and is expected to complete in the second half of 2021.

 

 


In Angola, Sun Africa Constructs Seven Solar Projects Totaling 370MW

Sun Africa and M Couto Alves, part of the EPC conglomerate, on behalf of Angola’s Ministry of Energy and Water, are developing seven solar power projects in Angola.

Hitachi ABB Power Grids will supply the main electrical infrastructure to connect the project to the country’s transmission network.

The initiative is being financed under the Swedish Export Credit System (the Swedish Export Credit Corporation and Swedish Export Credit Agency), which aims to raise investment in Swedish sustainable technology globally

The initial stage of the project will include the construction of a

  • 188 MW solar power plant in Biopio in Benguela Province.

“This is one of the largest and most significant photovoltaic projects delivered,” says Niklas Persson, the managing director of Hitachi ABB Power Grids’ Grid Integration business unit. “We are contributing pioneering technology to enable MCA to integrate more renewables and electrify rural areas, while maintaining a stable network. Our role is to develop the project from idea to energisation – ultimately shaping a reliable and sustainable energy future for Angola.”

Six other solar power plants will follow, including

  • 7MW plant in Benguela in Benguela province,
  • 01MW plant in Saurimo, Luanda Sul, another
  • 91MW solar facility in Luena, Moxico,
  • 65MW solar plant, in Cuito, Bié,
  • 99MW plant in Bailundo, Huambo province, to electrify homes in the southern African country.
  • 20MW plant in Lucapa, Lunda Norte

Hitachi ABB Power Grids’ scope of work will include the design, main power equipment supplies, testing and commissioning of the project. It is based on an in-depth grid impact study into the customer’s unique requirements to determine in advance the best way to achieve the integration of the Angolan government’s renewable energy programme.

Financing and development partners include ING Bank, SEK, EKN, DBSA and KSURE, and the Swedish and US governments.

Angola is Africa’s seventh largest nation, with approximately 30-million inhabitants and a rapidly growing economy.

The project supports the UN’s Sustainable Development Goal 7 – ensuring that all people have access to affordable, reliable, sustainable and modern energy for all. The initiative will also help to increase the share of renewable energy in the global energy mix.

 


Kenyans Entitled to “Reverse Subsidy” on Petroleum Products

Diesel and gasoline prices have risen sharply in Kenya’s filling stations for the month of March 2021, despite the country having saved money to mitigate the spike in the cost of crude oil.

The Kenyan government increased the levy on petroleum products as pump prices dropped last year. The Petroleum Development Levy jumped from $.04 (Sh5.40) a litre in July from $.003 (Sh0.40), representing a 1,250% hike.

But the country’s plan to “pay back” in form of lower product prices, once crude oil prices reach $50 per barrel, has been scuttled by a lack of legislation.

The government collected over $91Million in the course of the levying over the last seven months.

But now that crude oil prices have soared way above $50, even breaching $70, a legal hitch is holding up the implementation of the fuel subsidy for which the levy was imposed.

Instead of product prices to remain flat, or even drop, despite the robust rise in crude oil prices, diesel prices in Nairobi rose by $.05 (Sh5.51) a litre to $0.92 (Sh101.91)—the highest since February 2020. Gasoline prices rose $.07 (Sh8.09) to $1.05 (Sh115.18) per litre, the highest mark since July 2019, putting pressure on transport costs and inflation.

The subsidy was excluded in the determination of gasoline and diesel prices for the month of March 2021, announced by Energy and Petroleum Regulatory Authority (EPRA) in late February after a monthly review based on the average price of crude oil in February.

Kenyans were not expected to bear costs of diesel prices above $50 a barrel because they had saved for the high cost in form of the levy.

The country’s motorists were to start enjoying a form of “reversed subsidy”, but EPRA says that “ the regulations to manage the subsidy were not yet in place”, so the agency simply raised pump prices based on the February 2021 crude oil average cost of $55.27.

Respite is expected to come in April. “The regulations to operationalise the levy are being developed in order to set up structures on how the fund will be managed,” EPRA says in a statement.

Kenyans use diesel extensively as transport fuel and for power generation.

The Attorney General’s office is expected to approve new regulations to use the fund accrued from the levy to rein in prices of petroleum products.

 


Nigerian Marginal Fields Bid Round: Third Letter Out, Signature Bonus Called

 

By the Editorial Board of Africa Oil+Gas Report

The country’s least transparent bid round in 20 years inches towards some closure

The Department of Petroleum Resources (DPR), Nigeria’s regulatory agency for the hydrocarbon industry, has distributed the third letter in the series of correspondences it has been sending to, apparently, the 161 companies selected as winners of interests in the 57 marginal fields on offer in the country’s second marginal field bid round.

The third letter specifies the percentage awarded to the recipient and the signature bonus expected of it by government. The letters were emailed on March 2, 2021 and the authorities expect the signature bonus to be paid in 45 days, and it could be paid in either the local currency Naira or in US Dollars.

The total signature bonus per field ranges from $5Million to $20Million, but since no single field is assigned to a single company, the signature bonus demanded from each company correlates with the percentage interest in the field offered to the company. If the entire signature bonus charged to Field A is $5Million, a company assigned 20% equity in that field is asked to pay a signature bonus of $1Million.

Names of those who have been granted the awards remain largely in the realm of speculation, as the authorities have not published the list. This latest correspondence to awardees still doesn’t specify who your partners are and doesn’t tell who operates the field, but the partners on each field are expected to jointly create a Special Purpose Vehicle to operate the asset.

The lack of knowledge of who your partners are raises the risk involved in the funding of the signature bonus. So does the instruction to awardees attached to every field to create a Special Purpose Vehicle (SPV) to act as operator.

Africa Oil+Gas Report learns that winners of this round include at least three marginal field operating companies. There are also at least three companies, run by members of PETAN, the umbrella grouping of oilfield engineering contractors. Other companies that have reportedly received letters include those promoted by retired technical staff of some of the oil majors operating in Nigeria.   But there is a lot of talk about wheeling and dealing in Abuja and names of companies that have been awarded fields who didn’t even apply. The only way to dissuade anyone from believing false conspiracy theories is to know who got what at every stage of the process.

The first of the three letters emailed to “winners” indicated that the addressee was qualified for a certain field. The second letter then merely asked the awardee to specify which currency they want to pay the signature bonus in. This third letter, then, which specifies the percentage that the awardee has on the field and requests for payment of signature bonus by a certain date, is the first firm commitment the authorities are making to an awardee. But questions around who other partners are and who to operate the field indicate that there will either be a fourth letter, or the DPR will publish a list on which the fields, the awardees to each field, the signature bonus and the operator will be. It’s quite exhausting.

The ongoing bid round has been the least open of all the non-discretionary awards organized by the Nigerian authorities since the country’s first competitive lease sale was announced in 2000. Prior to 2000, the year after Nigeria’s return to democratic governance, the country’s sole process of granting awards of acreages was discretionary. The 2003/2004 Marginal field bid round was a high-water mark in the annals of licencing rounds in Nigeria. 120 companies were shortlisted from a bidders’ list of less than 200 companies that applied for 24 fields, with their names all published. For each of the 24 fields, five companies were then asked to appear before a jury, and give technical and financial presentations on their proposed paths to first oil. The jurors at those presentations included DPR representative, who chaired the jury; a ranking technical staff of the IOC on which the marginal field lies (who is the farmor) and a representative from the NNPC. What that jury composition suggested was that the key stakeholders on a marginal field were all involved in determining who was going to develop it. The signature bonus was a flat $150,000. Companies were granted fields on the basis of convincing the jury with technical and financing argument on field development. In spite of all that rigour, 11 fields still did not achieve production 16 years after the farm out agreements were signed. Compared with the 2003/2004 process, the current round is a long walk in the dark.

Nigerian bid rounds have deteriorated in the quality of transparency since the 2003/2004 marginal field bid round, but the ongoing round surpasses all in its high level of opacity.


Angola to Announce EPC Contractor for Soyo Refinery Next Week

The Angolan Ministry of Mineral Resources and Petroleum (MIREMPET) will, on March 15, 2021, announce the winner of the tender to build the 100,000BOPD refinery in Soyo, in Zaire Province the north easternmost part of the country.

At the start of final evaluation, there were nine proposals from groups that included Atis Nebest-Angola, SDRC, Jiangsu Sinochem Construction Co., Tobaka Investment Group, Satarem, Gemcorp Capital,  China Petroleum Pipeline (CPP) Engineering Firm, Quanten Consortium, as well as a joint proposal submitted by CME, Aida and VSF.

 

One of them has since dropped out, which means that eight companies and consortia had their proposals evaluated by PwC, the government’s due diligence consultant, as of December 29, 2020.

But MIREMPET postponed the announcement, for the second time in January 2021, in order that the best ranked competitors could renew their investment financing guarantees, “through renowned financial institutions, as well as re-affirmation of the corporate structures involved”, the ministry says in a statement.

The Soyo refinery is one of three refinery projects under development by the Angolan government. One is to expand the capacity of the Luanda refinery, another is the two-phase construction of a new 60,000BOPD refinery at Cabinda, which is underway.

 

 


 Somoil Recruits Corrosion Engineers

Somoil, SA – Angolan Private Company in the Oil & Gas Sector, as Operator and within its activities in Luanda, seeks to recruit and Inspection-Corrosion Engineer

The applicant must hold a degree in engineering, preferably for Materials Control Engineering or Mechanical Engineering  or equivalent.

S/he should have a strong knowledge and practical experience on the mechanisms of corrosion and cracks and:

  • Experienced in Materials and Corrosion Engineering and Welding QA/QC who support the integrity of the assets in the oil and gas facilities.

Candidates must send their applications to the e-mail: recrutamento@somoil.co.ao, with the following documents attached: CV and Copy of ID, until March 16th, 2021.

Fuller details of other requirements are available in this link.

 

 

 

 

 


Angola Says Data Checks for Bid Round Is Free

Angola’s National Agency of Petroleum, Gas and Biofuels says it has made available for free consultation the data packages related to the concessions that will be put out to tender starting in April.

“However, the geophysical data (seismic and magnetometric) do not integrate any of these packages, being obligatory to pay a fee for their acquisition”.

According to ANPG, the available packages contain the compilation of existing data, duly selected, related to the concessions to tender. The aim is to assist potential interested parties in the evaluation they are going to carry out and support them in decision making.

The agency, however stresses that companies will still have to buy the data if they want to interprete.

“The geophysical data (seismic and magnetometric) do not include any of these packages, being obligatory to pay a fee for their acquisition”.

For this tender, which started in late 2020, two data packages were prepared, taking into account the two terrestrial basins to be tendered – the Lower Congo and the Kwanza.

The Lower Congo Terrestrial Basin Data Package , relating to three blocks (CON 1, 5 and 6) consists of geological information on the 24 wells of the three blocks to bid and the remaining 33 wells of the adjacent blocks, as well as 14 reports studies that detail the stratigraphy, structural component and prospective; accessibility study (Atlas); georeferenced information (maps); and legal / legal information.

The Kwanza Land Basin Data Package , relating to six blocks (KON5, 6, 8, 9, 17 and 20) is also composed of geological information (reports and diagrams) from 47 wells, 36 of which belong to the blocks to be bid and 11 wells belonging to the neighboring blocks; 13 reports of abandonment of the main producing fields in the basin; seismic data (vintage seismic); accessibility study (atlas); georeferenced information (maps); and legal / legal information.

For both packages, ANPG stresses that geophysical data (seismic and magnetometric) are not part of these packages, so interested parties should purchase them from their partners Delta Development Management (Lower Congo) and GEOTEC and ION / GXT (Kwanza ).

“The disclosure of these packages, in a free session – which can be done in person or online – contributes to making the bidding process more transparent, allowing interested parties to know the data available before they acquire them for more accurate and accurate study and analysis “

– ANPG

Interested companies should contact the National Oil, Gas and Biofuels Agency through its website ( www.anpg.co.ao ), e-mail or even by letter, requesting an appointment for a data consultation session. These sessions will be free and can be virtual or in person, depending on the possibilities of the interested parties, but always carried out according to the rules in force in the context of the pandemic still in force.

 


How TOTAL Is Enhancing the Energy Transition in Africa

By Gerard Kreeft

French oil and gas giant TOTAL  continues to attract attention  in how its core business model is changing the industry: providing a blueprint how to transition an oil company to an energy company and at the same time guaranting financial success to its shareholders. The repercussions will be certainly  felt in Africa, where TOTAL’s future growth is expected. Now the company produces approximately 1/3 of its oil and gas production (approx 900 000Barrels of Oil Equivalent per Day (BOEPD)) on the continent and by 2030 is expected to grow by one-third.

Important is to note how TOTAL will grow. Patrick Pouyanné, TOTAL’s chairman and chief executive, now says that by 2030 the company “will grow by one-third, roughly from 3Million BOEPD) to 4Million BOEPD, half from LNG, half from electricity, mainly from renewables.” This, according to IEEFA (Institute Energy Economics & Financial Analysis), is the first time that any major energy company has translated its renewable energy portolio into barrels of oil equivalent. So, at the same time that the company has slashed “proved” oil and gas from its books, it has added renewable power as a new form of reserves.

Adding Reserves

In the summer of 2020 Total announced  a $7Billion impairment charge for two Canadian oil sands projects. This might have seemed like an innocuous move, merely an acknowledgement that the projects hadn’t worked out as planned.

Yet it opened a Pandora’s box that could change the way the industry thinks about its core business model—and point the way towards a new path to financial success in the energy sector. While it wrote off some weak assets, it did something else: TOTAL began to sketch a blueprint for how to transition an oil company into an energy company.

Each of the oil and gas majors spilled red ink last year, and most took significant write-downs. But TOTAL’s tar sands impairments were different. The company wrote off “proved reserves,” or oil and gas that the company had previously deemed all-but-certain to be produced. Proved reserves long stood as the Holy-of-Holies for the oil industry’s finances—the key indicator of whether a company was prepared for the future. For decades, investors equated proved reserves with wealth and a harbinger of long-term profits.

Because reserves were so important, the Reserve Replacement Ratio, or RRR—the share of a company’s production that it replaced each year with new reserves—became a bellwether for oil company performance. The RRR metric was adopted by both the Society of Petroleum Engineers and the U.S. Securities and Exchange Commission. An annual RRR of 100% became the norm. But TOTAL’s write-off showed that even “proved” reserves are no sure thing, and that adding reserves doesn’t necessarily mean adding value. The implications are devastating, upending the oil industry’s entire reserve classification system, as well as decades of financial analysis.

How did TOTAL reach the conclusion that “proved” reserves had no economic value? Simply put, reserves are only reserves if they’re profitable. The prices paid by customers must exceed the cost of production. Given current forecasts that prices would remain lower for longer, TOTAL’s financial team decided those resources could never be developed at a profit.

TOTAL’s strategy is based on the  Sustainable Development Scenario(SDS) for medium/long term,  developed by the International Energy Agency (IEA). Taking the “Well Below 2 Degrees Centigrade” SDS scenario on board, TOTAL has in essence taken on a new energy  classification system. By embracing this strategy TOTAL is the only major to have seen the direct benefit of using the Paris Climate Agreement to  expand its renewable energy base.

On the renewables front, TOTAL has confirmed that it will have a 35 gigawatt (GW) capacity by 2025, and hopes to add 10GW per year after 2025. That could mean an additional 250GW by 2050.

A key to TOTAL’s success is its willingness to devote capital to projects at an early stage. Its renewable investments include:

  • 50% portfolio of installed solar activities from Adani Green Energy Ltd., India;
  • 51% Seagreen Offshore Wind project in the United Kingdom;
  • Major positions in floating wind farm projects in South Korea and France.

Expect that TOTAL will also expand its renewable portfolio in Africa in the coming months.

Renewables in Africa

This could prove to be a double-edged sword for TOTAL and Africa: stimulating new renewable energy and oil and gas projects- if they have a high return on investment. TOTAL’s lead in taking on board renewables as part of its reserve count, will surely set a precedent for other renewable projects in Africa, helping the continent move forward with the Energy Transition.  Projects  not meeting this investment grade will not be treated so kindly.

Yet the increased speed of the Energy Transition is not necessarily good news for Africa. The greening of Europe, for example, could in the short and medium term have a boomerang affect in Africa. The major oil companies including Shell, TOTAL, BP and Equinor could in fact reduce oil and  gas activities in Africa.

Are  Africa’s oil and gas assets competitive and worthy of development if compared to other global projects? Why? Simply because the oil and gas majors are choosing  low carbon prospects and natural gas projects on a massive scale,  leaving many potential prospects in doubt. A prime example is TOTAL’s mega-large LNG project in Mozambique is expected to cost at least $20 Billion and produce up to 13Million tonnes of LNG per annum.

Energy scenarios released by both BP and TOTAL are predicting a sharp decrease of oil production, adding to the view that exploration budgets of the majors will not be a priority item. Instead as TOTAL has explained, low cost, high value projects are the goal: Squeezing more value out of its various African assets, especially in Nigeria and Angola to ensure a prolonged life cycle.

The Norwegian energy research  company Rystad, reminded the investment community, in September 2020, that the oil and gas majors are actively pruning their oil and gas assets, stating: “The world’s largest oil and gas firms could sell or swap oil and gas assets of more than $100Billion in order to adjust and transform to cleaner sources of energy”.

The Rystad Energy Study covers a wide geographical spread  and includes  ExxonMobil, BP, Shell, TOTAL, ENI, Chevron, ConocoPhillips, and Equinor. The eight companies may need to divest combined resources of up to 68BillionBOE, with an estimated value of $111Billion and spending commitments in 2021 totalling $20Billion.

The key criteria for determining whether a major oil company would benefit from staying in a country are the company’s cash flow over the next five years, the potential growth in its current portfolio, and its presence in key E&P growth countries towards 2030. Based on this, Rystad claims that majors may seek to exit about 203 varied country positions and, as a result, reduce their number of country positions from 293 to 90.

How will renewables and  oil and gas prospects in Africa be judged? Do the various state oil companies have the management skills to properly assess their energy transition scenarios?  Do they have highly qualified, independent consulting companies providing them with advice ?

Many of Africa’s new fledging  state oil companies, have been proxies to the international oil majors. In the process, they haven’t developed technical knowledge, capability and expertise to manage and implement oil and gas projects. Being hostage to the whims of the oil majors is no formula to ensure that a country’s oil and gas assets are to be developed. Certainly not, when the window of opportunity to develop oil and gas assets  could be closing within the next 20-25 years.

There is the stern warning and key conclusions coming from a recent report authored by  David Manley and Patrick R.D. Heller for the Natural Resource Governance Institute:

  1. “If national oil companies follow their current course, they will invest more than $400Billion in costly oil and gas projects that will only break even if humanity exceeds its emissions targets and allows the global temperature to rise more than 2 o
  2. “Either the world does what’s necessary to limit global warming, or national oil companies can profit from these investments. Both are not possible.
  3. Investments by State oil companies could pay off, or they could pave the way for economic crises across the emerging and developing world, and necessitate future bailouts that cost the public. Some oil-dependent governments in Africa, Latin America and Eurasia are making particularly risky bets with public money.
  4. Many national oil companies have incentives to continue spending big on new oil and gas projects. As a result, company officials might not, on their own, change course to account for the energy transition away from fossil fuels toward green energy, nor make investment decisions that serve the interests of citizens.
  5. Governments—through finance and planning ministries, presidential offices and public accountability bodies—must act to promote a more sustainable economic path.
  6. Governments should understand the extent of national oil companies’ exposure to decline in oil and gas prices;
  7. Revisit rules on cash flows into and out of state-owned companies.
  8. Require or incentivize lower-risk investment decisions .
  9. Benchmark and measure national oil company performance, improve corporate governance, and report consistently to citizens.”

Some key conclusions

  • Recently IRENA (International Renewable Energy Agency) and AfDB (African Development Bank) have jointly announced support of low carbon projects to enhance the energy transition. IRENA in its Global Renewable Outlook states the sub-Sahara Africa could generate as much as 67% of its power from indigenous and clean renewable sources by 2030. In the energy transition this would increase welfare and stimulate the creation of up to 2Million green jobs by 2050.
  • Certainly public-private partnerships should be part of this mix. Governments to ensure a broad basis of support and energy companies who have the know-how and project management skills. A key bonus for oil/energy companies is knowing that renewables can be added to the reserve count.
  • “TOTAL hasn’t abandoned oil and gas, and its hydrocarbon investments may prove problematic over the long term. But its renewable investments will add ballast to the company’s balance sheets, keeping it afloat as it carefully chooses investments, including oil and gas projects, with a high economic return.
  • Meanwhile, its competitors that stick to the old oil industry business model will have no choice but to continue to develop hydrocarbons—even if their “proved” reserves ultimately prove to be financial duds.”

Note: Portions of this article have  originally been published  on the site of IEEFA (Institute Energy Economics & Financial Analysis)https://ieefa.org/ieefa-is-oil-giant-total-an-emerging-leader-of-the-energy-transition-shows-how-to-pivot-from-an-oil-company-to-an-energy-company/

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise.  He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe.  Kreeft has Dutch and Canadian citizenship and resides in the Netherlands.  He writes on a regular basis for Africa Oil + Gas Report

 


Egypt Prepares Tender for Last Phase of Africa’s Largest Wind Power Project

Egypt’s New and Renewable Energy Authority is preparing to issue a tender for Build, Operate and Maintain the 120 MW capacity Jabal Al-Zeit 3 ​​wind power plant.

It is the third of the three wind power plants in the Jabal al-Zeit wind station, whose total planned capacity is stated to be 580MW, with a production rate of 2MW per turbine. The station is located on a 100-acre site in District 3 of Jabal el-Zeit, along the western side of the coastal road of Hurghada, in Egypt’s Red Sea Governorate.

The first project, Jabal Al-Zeit 1, with 250MW capacity, was commissioned in February 2020; it includes 120 turbines. The second, Jabal Al-Zeit 2, whose construction was only just completed, has 110 turbines. Contract for the operation and maintenance of that second wind farm has gone to Siemens Gamesa.

The third, while the third Jabal Al-Zeit 3 ​​wind power plant will work with 60 turbines and has 120MW capacity.

Three companies, including Siemens Gamesa, Vestas and Volatalia, have informally expressed interest to bid. But they have to wait for the tender to be launched in the second quarter of 2021.

The government’s plan is that, after construction and inauguration, the period of operation and maintenance of the plant will be between five and seven years, and the period can be extended for another year in agreement with the New and Renewable Energy Authority.

The New and Renewable Energy Authority had announced its intention to establish a subsidiary company to maintain and operate wind projects, but it changed the course after studying its feasibility.

The agency decided, instead, to launch tenders to select companies to undertake the operation and maintenance for a specific period, or for an investor to establish the company himself, owning it in full, and undertaking the maintenance of the authority’s stations through a contract between the two parties for a period of 5 to 10 years, provided that the investor gets the fees for operating and maintaining the stations. The Renewable Energy Authority owns two wind stations, the first in Zafarana with a capacity of 550MW, which includes about 700 turbines of different capacities, the second in Jabal Al-Zeit 1 with a capacity of 580MW.

 

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