feature - Africa’s premier report on the oil, gas and energy landscape. - Page 94

All posts tagged feature


Africa Oil Week: “Unrivalled Opportunities in the E&P Sector”

Africa Oil Week is the voice of E&P – the global platform for stimulating deals and transactions across the African Upstream. The event is now entering its 27th year, where we bring together governments, national and international oil companies, independents, investors, the G&G community and service providers.

AOW prides itself on offering unrivalled opportunities that drive investment and deal-making across the continent, thus shaping the future of Africa. What sets us apart from the competitors is the seniority of delegates. In 2019 we welcomed 26 global ministers, 400+ C-level delegates, as well as hundreds of SVPs and VPs of Africa, Exploration, New Ventures and more.

The Africa Oil Week conference provides 4 days of pioneering insights, from ministerial panels to strategic outlooks and sessions designed to drive investment into the African upstream. At the heart of the event is the exhibition, where companies from across the sector can showcase their offering.

Join us for this year’s event in Dubai (United Arab Emirates) at the Madinat Jumeirah 8-11 November 2021. Where you can expect extensive and varied networking opportunities, CPD certified content streams and an event full of business opportunities.

 

Register today!.

 


Lekela Begins Connecting 250MW Wind Farm to Egypt’s National Grid

Lekela Power has started connecting the first phase of the 250MW West Bakr wind farm to Egypt’s national grid.

20 wind turbines will be connected in this phase of the project, a joint venture between the British investment fund Actis and Mainstream Renewable Power, located 30 km from the town of Ras Ghareb in the Gulf of Suez.

The remaining 76 turbines will be delivered before the end of 2021 by Siemens Gamesa Renewable Energy, which has secured the contract to build the farm from its owner Lekela,

West Bakr Wind Farm is a Build, Own and Operate (BOO) concession, one of the first projects entirely funded by the private sector in Egypt’s Renewable Energy plan, which seeks to reach around 4,500MW capacity by 2023.

The facility’s output will be fed into the Egyptian Electricity Transmission Company (EETC) grid under a power purchase agreement (PPA), over a 20-year period. “West Bakr will be able to power 350,000 Egyptian homes while avoiding the emission of 550,000 tonnes of CO2 equivalent per year”. according to Lekela.

“The West Bakr wind farm will increase Egypt’s wind power capacity by 18%”, the company claims.

Lekela, based in Amsterdam, is owned by Acts and it is one of the busiest Independent Power Producers operating in Africa. It developed Taiba N’Diaye, the 158MW Wind Farm in Senegal; delivered the 140MW Loeriesfontein 2 in the Hantam Municipality in South Africa’s Northern Cape and commissioned the 80MW Noupoort Wind Farm as well as the Khobab Wind Farm in the same country.

 


Mozambique Claims Major Victory Over Insurgents Stalling Gas Project

By Toyin Akinosho

…But Mocímboa da Praia has changed hands more than once…

Mozambican authorities are claiming to have “conquered” a key stronghold of Al Shabab, the Islamic insurgent group whose activities have forced a hold up of Africa’s largest single gas project.

The Portuguese news agency, LUSA, citing several Mozambican official sources but not naming any, reports that a joint operation by Mozambican and Rwandan forces resulted in the occupation of the main positions of armed groups around the town of Mocímboa da Praia, the insurgents’ “headquarters”, located in the province of Cabo Delgado, in the north of the country.

“The joint force occupied the positions of the insurgents in Awasse and Diaca, in Mocímboa da Praia, having seized various war material from the rebels and killed several members of the armed groups”, LUSA reports, citing “sources, linked to the Ministry of Defence of Mozambique”.

LUSA reports that “after the joint force operations, Bernardino Rafael, General Commander of the Police of the Republic of Mozambique, visited the locality of Awasse, where he assured that the intention is to remain in the occupied points”.

Islamic insurgents have killed hundreds of people and turned thousands to refugees in  towns and villages located in the Cabo Delgado province and close to the Afungi Peninsula, where the TOTALEnergies operated 13 Million Metric Tonnes Per Annum Liquefied Natural Gas project is sited.

In late March 2021, the insurgents made their most sweeping attack on the neighbouring  Palma town, just when TOTALEnergies’ workers returned to site in Afungi to continue construction.

“They want to intimidate us”, President Filipe Nyusi, Moazmbique’s head of state and government said a in a speech two weeks after the incident, declaring war. “Following the attack on the town of Palma, the situation in Cabo Delgado has received a lot of national and international attention. All of this attention is legitimate,” the President said. “This town and the adjacent Afungi peninsula are close to the natural gas deposits. It is in this region where the foundations for the exploitation of this resource so important to our economy are being laid”.

General Rafael told the media:“The tendency is to improve even more in those points where the Defence and Security Forces, together with the Rwandan forces, are conquering”. He said that “the terrorists vandalised several infrastructure Bernardino Rafael told the media, with an emphasis on the electricity grid”.

The coastal town of Mocímboa da Praia, located 70 kilometres south of the gas project site, had been invaded and occupied for a day by insurgents on March 23 2020, and was the theatre of clashes between Mozambican troops and the Jihadists several times over and over up until December 2020, when the insurgents firmly held it, only to be repulsed again by government forces.

But the offensive from the state is different this time, aided, as it is, by the battle hardened, thousand strong Rwandan soldiers and police officers, fighting since the beginning of July 2021. The East African warriors, who are fighting under the auspices of a bilateral agreement between the Maputo and the Kigali, are expected to be soon joined by troops  from the Southern African Development Community (SADC), consisting of contingents from South Africa, Namibia, Botswana, Angola and Malawi, under a mandate from a “joint force on alert” approved on June 23, at an extraordinary summit of the organization in Maputo.

 


ENEL Commissions 140MW Wind Power Farm in South Africa

Italian independent power producer (IPP) ENEL Green Power, has started commercial operation of a 140MW (at peak) wind energy farm in Kouga, in South Africa’s Eastern Cape province. 

Christened ‘The Oyster Bay wind farm’, it was awarded as a concession under the 4th phase of tenders of the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP)

ENEL Green Power, a subsidiary of the ENEL group, launched construction work on the facility in 2019, after the signing of a 20-year power purchase agreement (PPA) with state-owned Eskom.

ENEL Green Power says it has invested €180Million in the construction of the facility, capable of producing 568 GWh of electricity per year “while avoiding emissions into the atmosphere of 590,000 tons of CO2 equivalent over the same period”. William Price, the company’s CEO in Soth Arica, says it is “ the ninth such clean energy facility commissioned by Enel in South Africa.

The other facilities are located in Nojoli (88 MW), Gibson Bay (111 MW) and Nxuba (140 MW) in the Eastern Cape, Upington (10 MW) and Adams (82.5 MW) in the Western Cape, Paleisheuwel (82.5 MW) in the Western Cape, Pulida (82.5 MW) in the Free State, and Tom Burke (66 MW) in Limpopo. These solar and wind power plants inject 800 MW into the Eskom grid”.


ENI Remains Africa’s Largest Hydrocarbon Producer

With a boost in its crude oil production in Libya and ramp up of natural gas output in Egypt, ENI has consolidated its position as the highest producer of hydrocarbons (oil and gas) in Africa.

The Italian player averaged a net output of 908,000Barrels of Oil Equivalent Per Day(908KBOEPD) in the seven countries in which it holds producing positions on the continent, in 2020.

Its closest competitor was …Click here to read full article


In Search of the (Last) Silver Lining

By Gerard Kreeft

Rystad Energy has recently published two findings which cannot be reassuring to the oil and gas sector: firstly, it estimates that global total recoverable oil reserves have fallen approximately 10% in 2021- 1,725Billion barrels in 2021 compared to 1,903Billion in 2020. 

Secondly, Rystad estimates that the downturn, combined with the COVID-19 pandemic has cost the sector some $285Billionin upstream investments for 2020 and 2021. Pre-pandemic spending in 2019 was approximately $530Billion. In 2020 spending was reduced to  $382Billion and in 2021 is expected to be $390Billion.

Andrew Latham, Vice President Energy Research, Wood Mackenzie, has offered deepwater players a somewhat more cautious, but reassuring message. In a July study entitled ‘Deepwater’s Growing EUR Advantage’, Latham explainshow deepwater upstream growth is expected to rise from 10Million Barrels Oil Equivalent Per Day (MMMBOEPD) in 2021 (6% global supply) to over 17MMMBOEPD by2030(10%).

He states that almost half of oil and gas reserves being sanctioned for development over the next 5 years will come from the deepwater. Why? According to Woodmac, the outperformance is based on reservoir fundamentals. Deepwater reservoirs will produce substantially more oil and gas than shallow or onshore reservoirs. EUR(Estimated Ultimate Recovery) in deepwater averages 12MMBOEPD for oil wells and 43MMBOEPD for gas wells. Future deepwater oil fields will enjoy twice the average EUR of fields already onstream. Reflecting the industry’s recent successes in Guyana and Brazil’s Santos.  

Oil Wells

Brazil with 36Billion barrels of oil reserves has an average EUR of 14MMBOEPD per well. Brazil’s early deepwater developments took place in the post-salt plays of Campos Basin where heavier crudes and drilling technologies of the 1980s limited average EUR to 8MMBOEPD per well. Recent investments in pre-salt in the Santos Basin is 27MMBOEPDper well. 

Angola has 11Billion barrels of oil reserves, 1000 wells, and an average of 10MMBOEPD.

Nigeria has 7Billion barrels of oil reserves and an average EUR of 16MMBOEPD.

Guyana has 6Billion barrels of reserves and an average EUR of 24MMBOEPD.

Gas Wells

Gas basins are approximately half the size of oil basins. Woodmac anticipates the development of approximately 1000 deepwater gas wells, of which 700(64%) have already been developed. The average EUR is 43MMBOEPD. Mozambique’s Rovuma will have an average EUR of 93MMBOEPD.

Up to 2009, the average EUR was 31MMBOEPD. Now the average has jumped to 90MMBOEPD based on gas discoveries in the eastern Mediterranean, Mozambique, and Mauritania, and Senegal.

The Players & Assets

BP-ENI

EUR averages could also dramatically rise because of possible merger talks between BP and ENI regarding their Angolan assets Will this model become the standard for other African countries?

An Algerian variant is perhaps already in the making. Reuters reported that a potential deal would allow ENI to acquire BP’s 45.89% stake in the Amenas natural gas plant and a 33% stake in the Salah gas plant. ENI expects to transform Algeria into a hub with the acquisition of BP’s assets.

Egypt could prove to be more challenging for both companies to find a lasting solution either to work together or a possible takeover of assets. BP currently produces, with its partners, close to 60% of Egypt’s gas production through the joint ventures the Pharaonic Petroleum Company (PhPC) and Petrobel (IEOC JV) in the East Nile Delta as well as through BP’s operated West Nile Delta fields. 

Nonetheless, ENI claims to be Egypt’s largest oil and producer, and its huge Zohr gas field is viewed as an example of the company’s extensive assets in the country. Most recently ENI together with EEHC (Egyptian Electricity Holding Company) and EGAS (Egyptian Natural Gas Holding Company) has signed an agreement to assess the technical and commercial feasibility of producing hydrogen.

Talk of potentially moving in the direction of hydrogen development could well trigger further cooperation between BP and ENI.

TOTALEnergies

EUR averages have certainly caught the eye of TOTALEnergies who, with its deepwater track record in Angola Block 17, will certainly play a key role in developing new deepwater projects.

R The French major has two key assets in South Africa in which EUR will certainly play a key role:   Brulpadda Deepwater Project drilled to a final dep of more than 3,600 metres, and Luiperd, the second discovery in the Paddavissie Fairway in the southwest corner of the block.

In Africa, TOTALEnergies is the undisputed energy champion helping to leapfrog exploration and development hurdles ensuring that oil and gas projects are implemented, on time, and under budget.

Conclusions 1. EUR in Africa is not for the faint-of-heart, but a domain already long carved out by TOTALEnergies and ENI, Africa’s two dominant deepwater players. 2. A key theme in pursuing EUR goals for TOTALEnergies is not whether the oil and gas reserves are ‘probable’, reflecting any notion that the SPE Petroleum  Classification is still in place. No the key driver for TOTALEnergies is simply the economics of deciding whether EUR projects are up to investment grade and can compete with green projects.3. Any notion that the oil majors will use their EUR profits generated in Africa to create green projects in Africa is pure sentimentality. As Africa Oil+Gas Report has reported in the past, the oil majors have used profits generated in Africa to help finance their global green energy projects elsewhere around the globe.4. If EUR projects are to be developed, they must be fast-tracked, otherwise, there is little chance they will see first oil. Take the Lake Albert development project, recently signed in the spring of 2021, which encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline (EACOP) in Uganda and Tanzania. To reach a signing ceremony for the project has taken some 15 years. In the present low-carbon environment, the dithering of long-drawn-out development plans, will for whatever reason, not be tolerated.  5. No doubt the BP-ENI joint venture in Angola will ensure that this model will be duplicated or expanded throughout the continent. Certainly, it will shore up deepwater exploration and development plans. 6. Participation of new entrants- independents seeking new opportunities or savy investors-will likely also be part of the mix.7. Perhaps EUR could become the driving force to enable the deepwater market to become an even more lucrative niche market. Perhaps not entirely in vogue given the low-carbon surroundings.8. Yet the final warning comes from Institute for Energy Economics and Financial Analysis (IEEFA)’s July report: In financial year (FY) 2020, the clean energy sector received record investment commitments totaling $501Billion – 9% more than the previous year. The renewable energy segment led with $303Billion in 2020, which is 60% of total investment committed into the overall low carbon energy transition sector.9. EUR-driven projects will have to compete with renewables investments.

Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was the 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 and contributes to the Institute of Energy Economics and Financial Analysis(IEEFA).


Ethiopia Completes Second Filling of Massive Hydropower Dam

Ethiopia finished the second phase of filling the reservoir of the Grand Ethiopian Renaissance Dam (GERD) reservoir on July 16, 2021, the country’s water minister has said.

Seleshi Bekele adds that “extreme rainfall this season in the Nile Basin” has aided a rapid filling of the dam.

GERD is Africa’s largest hydropower project, with a 6,000MW capacity.

Ethiopia’s first phase filling of the dam was in July 2020, during which 4.9Billion cubic metres of water was collected. The second phase was expected to be much higher, raising the volume to 18.4Billion cubic metres of water, though Mr. Bekele hasn’t announced the figures in the latest filling. The 74Billion cubic metre-capacity dam is expected to take five to seven years to fill.

An influential, strident critic of the project is Egypt, which considers GERD as a significant threat to its water supply. Egypt lies downstream of the Nile and has called on international organizations, including the United Nations, to stop Ethiopia from filling the dam while the three countries most affected: Egypt, Sudan, and Ethiopia, agree on how to fill it. Egypt’s President, Abdel Fattah El Sisi, has frequently declared that his country’s national security is a red line and stressed the need to reach a binding agreement on the filling and operation of the dam.

Egypt and Sudan had hoped to persuade global powers to take a more aggressive position towards Ethiopia and pressure it to return to the negotiating table with different mediators, but the United Nations Security Council declined to condemn Ethiopia’s decision to unilaterally fill the dam and called on all three countries to continue the current African Union-led process.


Egypt Increases Pump Prices of Gasoline

Subsidy-minded Egyptian government has increased pump prices of petroleum products for the second consecutive quarter.

 The government raised fuel prices by up to 3.8%, in response to rising international oil prices. This means that motorists will now pay an extra 0.25 Egyptian Pound (EGP) per litre for 95, 92 and 80 octane gasoline during 3Q 2021.

Fuel prices have now risen 5.9-8% so far this year after the fuel pricing committee effected the first increase at the beginning of the second quarter of 2021.

Diesel and mazut prices remain unchanged.

Gasoline prices, from July 23, 2021:

• 95-octane has moved up 2.9% from EGP 8.75 to EGP 9 per litre.

• 92-octane has moved up 3.2%, from EGP 7.75 to EGP 8.

• 80-octane has moved up 3.8%, from EGP 6.50, to EGP 6.75.

Prices of mazut fuel oil for use in factories will remain at EGP 3.9k per tonne, while diesel prices are still EGP 6.75 per litre.

These prices will remain fixed until through 3Q 2021 and will be reviewed again by the fuel pricing committee at the beginning of 4Q in October.

Crude oil prices have been on a run, increasing by close to 45% in 2021, as the global economy recovers.


NDWestern Has Vacancies for 24 Roles

The Nigerian independent, NDWestern, is looking to fill 24 vacancies, 11 of them clearly in engineering roles. It has put out an advertisement for these roles and it expects applications to have been submitted by July 31, 2021.

Jobs available range from Chief Technical Officer through Regulatory & Compliance Manager to Senior Reservoir Engineer.

NDWestern is a 10-year-old Nigerian-owned company that holds 45% in Oil Mining Lease (OML) 34 in the western Niger Delta. The acreage is operated through an Asset Management Team jointly run by both the Nigerian Petroleum Development Company NPDC and NDWestern.

The recruitment exercise is meant to boost personnel capacity to increase and improve the work programme on this asset, which produces roughly 22,000Barrels of Oil Per Day and 320Millionstandard cubic feet of gas per day. NDwestern and NPDC also want to build a 10,000BOPD modular refinery.

Fuller details of the recruitment are in this link


With a Surging Domestic Gas Market, Ghana Defies the Sceptics

With 2020 consumption in excess of 315Million standard cubic feet per day (320MMscf/d), Ghana’s domestic gas market is growing faster than was assumed by energy experts, (mostly non-Ghanaian), just three years ago.

In 2018, it wasn’t so clear if Ghana could absorb, by 2020, the entire peak gas supply (180MMscf/d) prognosed to come from the (then) newly commissioned Sankofa field, operated by ENI.

But 165MMscf/d of Sankofa field production is already accounted for in the 2020 consumption, with Nigerian gas (coming from the West Africa Gas Pipeline) delivering over 65MMsf/d, in 2020, a figure that is still short of the contracted 123MMscf/d but is at least growing. Gas from Tullow Oil operated Jubilee field and TEN clusters of fields accounted for the rest:  around 85MMscf/d.

Ghana’s gas consumption increased from 115MMsscf/d in 2017 to 315MMscf/d in 2020.

“Gas demand in Ghana will be driven by the rise in electricity generation”, says Mike Fulwood, a senior research fellow at the Oxford Institute for Energy Studies (OEIS). “Based on a 45% increase by 2026, this would see a rise in gas demand from the 2020 level” of around 310MMscf/d to some 455MMsf/d. Fullwood says that the power plants in the Takoradi area (in Ghana’s western region) operated at a higher utilization rate in 2020 than those in the Tema area (a port town close to Accra in the east), at around 52% to 41% – for those plants fully operational. “Some of the older plants in the Takoradi area have had operational issues but the newer ones, including the Karpowership, are operating at high utilization rates and are very much baseload plants. “Over time we assume that the utilization of the Takoradi plants rises to some 60% but that any new power generation capacity is added at Tema”, Mr. Fulwood reports.

Still, while Ghana’s gas consumption is expected to keep increasing as electricity production and consumption increases, Fulwood doesn’t see the economic value in the country’s plan to import Liquefied Natural Gas (LNG). The LNG Terminal facility, already sited at Tema, received its floating regasification unit (FRU), built by Jiangnan Shipbuilding, in January 2021. The LNG FRU is designed for a regasification capacity of around 1.7Million Tonnes Per Annum (1.7MMTPA)tpa and is contracted to operate for approximately 20 years. The FRU will work in conjunction with a dedicated storage vessel (FSU), which is the newbuild 180,000cubic metres Vasant 1, and arrived at Tema port on May 26, 2021, having delivered just one cargo from Darwin in Australia to Yung An in Taiwan in February. The Vasant 1 is on a charter until July 1, 2022, and will then be replaced with an alternative FSU.

Fulwood cautions: “Ghana’s desire to import LNG is very different from other countries who are recent new LNG importers such as Malta, Gibraltar, and Myanmar. All these countries have dedicated power plants linked to the LNG imports so LNG is baseload and the economics can make sense. For Ghana, it is more diversity of supply, which is not a bad thing but can be expensive. The Vasant 1 FSU is on a charter until July 2022, reportedly at a charter rate in the low $20,000 a day– significantly below current market levels, especially given it is a new-build vessel. It is understood the lower rate is linked to the vessel’s speed limitation of 12 knots, making it less attractive on the standard market. The FRU also has to be paid for or chartered and if that was at a similar rate then a total of $50,000 a day would amount to some $18Million/year. Around 6 cargoes/year are needed to get the cost/MMBTU down to $1, which is reasonably cost-effective. At 2 cargoes/year, the effective cost is over $3/MMBTU, which is starting to make LNG look very expensive, once the commodity cost of LNG is included – currently $9 or $10 – and whatever costs are charged for the upgraded port facilities and the pipeline connections to the power plants”.

© 2024 Festac News Press Ltd..