All posts tagged in the news

Mozambique Gets Funding For Power Project

Section: In the news · January 10, 2009 · 1 comment |

The World Bank has released $88Million to fund the construction of transmission lines to carry power from Mozambique’s Cahora Bassa Hydroelectric (HCB) dam to Malawi.

The power transmission line, to be erected as part of a Southern Africa Development Community (SADC) energy co-operation agreement, will have an average capacity rating of 300 megawatts (MW). The project is expected to get underway in 2009, following a public tender for the venture.

$43 million of the World Bank funding is to be used for projects in Mozambique and the remaining $45 million in Malawi. Mozambique will enlarge the Matambo substation (in Tete province) and build transmission lines to the Malawian frontier, from where Malawi’s utility will construct a line to the Phombeya region, site of a planned new substation being built as part of the same project.

The new infrastructure is expected to boost Mozambique’s position as one of the primary electricity exporters in the region at a time when the energy crisis demands increased cross-border cooperation to respond to potential negative impacts on development projects. Mozambique is aggressively investing in its power infrastructure to solve the regional power crunch, which had caused many mega-projects to grind to a halt.

The government has approved the construction of an $800 million power station in the northern province of Tete starting from 2009, to boost regional power supplies. Building another power station would increase Mozambique’s capacity to export electricity to other southern African countries, which have been affected by a power crisis.

HCB has exhausted the maximum capacity of 2,075 MW of power it could produce from its generators on the southern bank of the Cahora Bassa river.

HCB, which suffered decades of neglect and lack of investment, now provides 60% of its power to South Africa’s state utility Eskom and 35 percent to the Zimbabwe Electricity Supply Authority (ZESA).

Mozambique consumes the rest of the power. Only 15 percent of the country’s 20 million people have access to electricity.

Brazillian Discoveries Dominate Cape Town Meet

Section: In the news · January 10, 2009 · No comments |

By Tako Koning, Luanda, Angola

Some of the best attended presentations at the most recent international convention of geoscientists were those on the recent pre-salt oil and gas discoveries in Brazil.

With newly discovered fields such as the Tupis field having estimated reserves of eight billion barrels oil, many explorationists could not help but speculate on the importance of this play on the presalt basins which are on the conjugate margins along the coast of West Africa from Gabon down to Namibia.

This pre-salt play may be especially relevant to Angola where the pre-salt sag basin is both extensive and has barely been penetrated by the drill bit.

Approximately 1,700 registrants from all over the globe were present at the 2008 International Convention and Exhibition of the American Association of Petroleum Geologists (AAPG), held October 26-29 2008, in the beautiful South African city of Cape Town.

For anyone focused on Africa oil and gas exploration and production, Cape Town was the place to be.

The theme of this conference was “African Energy: Global Impact”. An extensive programme of oral and poster paper presentations were held based on the following themes:

Deepwater Reservoir Systems – A Global Perspective, “Global Advances in Geosciences Next Generation Tools and Techniques, The New Business of Energy; Global Coal, CBM, Gas Hydrates, C0₂, Remediation Gondwana and Pangean Petroleum Systems: Africa, Middle East, South Atlantic, Caspian, Mediterranean, Arctic and Asia-Pacific. A wide variety of pre-conference and post- conference geological field trips were held in the general Cape Town area as well as further away to the Karoo Basin of South Africa and the Zerrissene Turbidite System in southern Namibia. One of the outstanding opportunities at this particular conference was for geoscientists to be able to view approximately 450 meters of turbidite drill cores from South Africa and Angola. PetroSA provided representative cores of all sedimentary facies from the Bredasdorp Basin, offshore South Africa. TOTAL and Chevron were able to obtain Angola government approval as well as their partners’ approvals to show many meters of turbidite channels cores from deepwater Blocks 17 and 14.

The 2009 AAPG International Convention and Exhibition will be held in November in Rio de Janeiro. All indications are that an equally interesting and extensive array of presentations and field trips will be available to the attendees in Rio, 2009.

Koning, a former Exploration Director at Texaco and later Chevron, is a member of the editorial advisory board of Africa Oil+Gas Report.

Angola Takes Over OPEC

Section: In the news · January 10, 2009 · No comments |

Angola will lead the Oil Producing and Exporting Countries OPEC from the front in January 2009, as the southwest African country is elected president of the cartel for the next one year.

Angola joined the influential group, which produces close to 40% of the world’s total output of crude oil, two years ago. It is the second consecutive African country to be president of the organisation and the third, in the last four years. Algeria presided over the cartel throughout 2008. Nigeria was the president in 2006.

The day to day implementation of the group’s policy is overseen by the Secretary General, who is essentially a technocrat. This time, he is also an African. Abdalla Sam El Badri is a 68 year old Libyan accountant who started his career spending 12 years with with ExxonMobil between 1965 and 1977.

In effect, Africa has run OPEC for the period of the highest crude oil prices in history.

The presidency of OPEC is not exactly an executive job and decision making is essentially consultative.

Still, the Angolans sound like they are making it personal. “The price of oil has reached levels that OPEC members want to see improve during our presidency,” Botelho de Vasconcelos said in comments broadcast on Radio Nacional de Angola in late December 2008.”We will try to maintain that stance,” he said,

OPEC oil ministers agreed their deepest output cut ever in mid- December 2008 cutting 2,2-million barrels per day from markets in a race to balance supply with rapidly dwindling demand for fuel.

The aim was to build a floor under prices that have dropped more than $100 from a July 2008 peak above $147 a barrel, to levels where the economies of several OPEC members are hurting.

As a new member that joined OPEC in 2007, Angola is expected to use the 12-month rotating presidency as a platform to spread its regional influence and shed an image of a country ruined by corruption and war.

The government of Angola is relying on an oil price above $55 per barrel to carry out a record $42billion spending plan in 2009.

The country emerged from nearly three decades of civil war as one of the world’s fastest growing economies due to surging oil output. Angola, dependent on oil for 90 percent of its income, produces around 1.8Million barrels of oil per day.

United Bank of Africa analyst Richard Segal said Angola was in a good position to set an example to OPEC members, some of which find difficulty in adhering to the group’s output cut decisions, as it has the flexibility to constrain production.

“Angola’s production costs are relatively low, its economy is stabilised at a lower oil price and it has a lot more oil production per capita than most other OPEC countries,” he said, adding it could also mediate between some of OPEC’s members.

“OPEC is a complicated organization …and even within the countries there are conflicting views — so the best Angola can do is provide leadership and play the role of a mediator.”

To the west Angola has the Gulf of Guinea, where it rivals Nigeria as Africa’s top oil producer. It is among the main oil exporters to China and the sixth biggest to the United States.

“We intend to dignify our country during the presidency,” said Botelho de Vasconcelos. “The presidency of OPEC is a mandate with big visibility and with a great deal of thought and some discretion, we will do our best”.

Algeria’s Oil and Gas Income likely $76bn in 2008

Section: In the news · January 10, 2009 · No comments |

Algerian oil and gas revenue could reach a record high of $76billion in 2008, Energy and Mines Minister Chakib Khelil has been was quoted as saying. This compares favourably with $59billion in 2007. ‘The expected revenues of between $75billion and $76-billion are a record,” the official APS news agency quoted him as saying. Algeria’s state energy conglomerate Sonatrach earned $57billion in 2007 from producing and selling oil and gas, while the state earned a further $2billion from a windfall tax on the earnings of foreign energy firms operating in Algeria.

Khelil said in May 2008 that Sonatrach expected to earn about $81billion in 2008 if oil prices stayed high. Prices at the time were about $111 a barrel and have since collapsed to around $45.

British Petroleum, Amerada Hess, Statoil, Anadarko Petroleum Corp., Repsol and TOTALare the main foreign companies involved in exploration and production of hydrocarbons in Algeria.

BP Orders FPSO from Jurong

Section: In the news · January 10, 2009 · No comments |

Jurong Shipyard has secured an approximately $132.75 million contract to convert the Very Large Crude Carrier (VLCC) tanker, the IVIV “PSVM” (ex Bourgogne), to a Floating Production Storage and Offloading (FPSO) vessel for MODEC.

This conversion contract involves the installation of an external turret mooring system and process facilities, which include gas turbine generators, oil separation, gas injection/gas lift and water injection system. Planned delivery to MODEC is 1Q 2011.

The FPSO is designed to operate for 20 years without dry-docking, and it will have a production capacity of 150,000 barrels of oil per day and a storage capacity of 1,600,000 barrels of oil.

The FPSO will be delivered to BP for deployment in the Plutao, Saturno, Venus and Marte (“PSVM”) Fields in Block 31 offshore Angola, located in water depths of between 1,500 and 2,500m.

This conversion contract is not expected to have any material impact on the net tangible assets and earnings per share of Sembcorp Marine for the year ending December 31, 2008.

Zambia Zooms In On $2.2bn Hydropower Plant

Section: In the news · January 9, 2009 · No comments |

Zambia has authorised private developers to start feasibility studies and construction of hydroelectric power stations totaling $2.2billion to overcome a crippling power deficit.

Power rationing by the state run utility Zesco Ltd., has forced copper mines, the country’s major sources of revenue, to scale down output.

Zambia would require a separate $1.1billion to raise power supply in rural areas to 51% from the current 3% by 2030. This translates into an annual expenditure of $50million between 2008 and 2030.

Zambia is developing a plan to streamline its generation and transmission of power, currently the sole responsibility of state power utility Zesco Ltd.

OPEC Shoots For $75 Oil

Section: In the news · January 9, 2009 · No comments |

OPEC oil ministers are hoping to push prices back towards the $75 level by removing a record two-million barrels per day from oil markets.

As the ministers convened in Oran, Algeria, in mid December 2008, oil was trading just above $44 a barrel.

The 12 members of the Organization of the Petroleum Exporting Countries were aiming to build a floor under prices that have dropped more than $100 from a July 2008 peak above $147 a barrel.

Saudi Arabia, the world’s biggest oil exporter, admitted, readily: “The cut may lead to higher prices or may not.”

The expected cut, the third in 2008, would bring a total reduction in OPEC supply to four-million barrels of oil per day (4MMBOPD), nearly a five percent cut in world oil supplies.

OPEC’s wish to encourage other producers to cut back was countered by Russia whose Deputy Prime Minister Igor Sechin said in a speech to OPEC that Moscow did not plan to join in coordinated output cuts and did not want to join the group.

“You must understand the purpose of the $75 price is for a much more noble cause,” the Saudi Oil Minister said. “You need every producer to produce and marginal producers cannot produce at $40 a barrel.”

“Therefore we believe that $75 is probably more conducive to marginal producers to continue so we don’t have a shortage in the market and we avoid the future skyrocketing of prices.”

The influential Saudi Oil Minister clearly outlined the kingdom’s route to lower production.

The country was pumping 8.2MM BOPD in mid-December 2008 against 9.7MMBOPD in August, 2008, four months earlier.

“The difference is 1.5MMBOPD, that is what we’ve done,” Naimi said.

Saudi Arabia’s implied output target is about 8.477MMBOPD under existing OPEC curbs.

To have a lasting price impact, any OPEC deal must to be strictly observed.

According to independent observers cited in OPEC’s monthly report, the group’s compliance in November to existing cuts was only just over 50%.

Analysts said deeper cuts would further test discipline in the group. That restraint would be needed to slim down growing world oil stocks.

A slump in consumption has lifted oil inventories in OECD industrialised nations to the equivalent of nearly 57 days of forward demand, a measure OPEC closely monitors. The industry norm for this time of year is about 52 days.

Mozambique Gets Funding For Power Project

Section: In the news · January 9, 2009 · No comments |

The World Bank has released $88Million to fund the construction of transmission lines to carry power from Mozambique’s Cahora Bassa Hydroelectric (HCB) dam to Malawi.

HCB has exhausted the maximum capacity of 2,075 MW of power it could produce from its generators on the southern bank of the Cahora Bassa river.

Mozambique consumes the rest of the power. Only 15 percent of the country’s 20 million people have access to electricity.

Morrocco Spends Pension On Carbon Trading

Section: In the news · January 9, 2009 · 1 comment |

Morocco’s state-run pension fund Caisee de Depot et de Gestion (CDG) has set up a carbon trading fund with capital of $35Million ( or MD300Milion). CDG will hold 50% of the capital of Fonds Capital Carbone Maroc (FCCM). The European Investment Bank will hold a 25% stake.

Caisse de Depots et Consignations, which heads up sustainable development in the country, will also hold 25%.

FCCM will promote and participate in projects connected with implementing the clean development mechanism of the Kyoto Protocol on climate change, which was agreed in 1997.

Under the mechanism, countries can trade their carbon credits on an international market.

The fund will also support developers by buying their carbon credits from them.

It will focus on projects in the renewable energy, energy efficiency, waste management and reforestation sectors.

Eskom Puts The Nuclear Option On Hold

Section: In the news · January 9, 2009 · No comments |

Africa’s large utility says that splitting the atom to generate electricity is far too expensive

Eskom, the South African power utility, has cancelled a $12 billion plan to build a nuclear plant as the credit freeze cuts financing.

Groups led by Areva, the world’s top supplier of nuclear reactors, and Toshiba’s Westinghouse Electric vied for the order. A global recession and an expected drop in energy demand is halting spending on projects from Canada to the Middle East and Africa.

“It’s too big, we can’t do it,” said Eskom spokesperson Fani Zulu. “The bidders were informed after we took the decision at a board meeting.”

Eskom is looking to borrow about $15 billion and is in talks with the World Bank for a loan of $5 billion. Its credit rating was cut by Moody’s Investors Services in 2008 after regulators allowed a 27 percent rise in electricity prices rather than 61 percent.

“We’re disappointed because we put a lot of work into the process, but we’re hopeful the South African government will remain committed to developing nuclear power,” said Jacques-Emmanuel Saulnier, a spokesperson for Areva in Paris, “If South Africa comes back to us, we’ll be there.”

The South African government immediately said it would still go ahead with installing Nuclear plants only that it would be at a slower pace and a scaled down version of what Eskom planned to do.

Eskom has not kept pace with local electricity demand and has restricted supply to firms including Anglo American and Xstrata.

The South African economy would probably grow at a slower pace than forecast by Eskom in the next five years, reducing power needs, said economist Jac Laubscher of Sanlam. “It’s not a train smash that they’ve cancelled the nuclear plan.” The global recession and rising interest rates have reduced government projections, with the economy now expected to expand three percent (3%) in 2009 and 4% in 2010.

The plan was also cancelled to ensure that Eskom’s ability to provide competitively priced energy was not jeopardised, the government said. South Africa had planned to generate 20 000 megawatts from nuclear reactors by 2025, more than 10 times the current output. Power demand has risen by 50% since 1994, while government indecision postponed Eskom’s expansion.

The reasons for the pause were specific to South Africa, and did not reflect the general state in the nuclear industry, as shown by efforts by utilities in the UK and the US to build nuclear power plants, Areva’s Saulnier said.

Areva proposed two 1,650MW reactors, while Westinghouse offered to build three 1,140MW reactors.

South African owned construction groups Aveng and Murray & Roberts formed part of the groups bidding for the contract.

Electricite de France, the world’s top operator of atomic reactors, has South Africa among its priorities for nuclear expansion.

Still the country as a while remained “committed to nuclear power” to lessen the nation’s carbon footprint, Portia Molefe, director-general of the department of public enterprises said.