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No Palliative for the Nigerian Oil Industry, Sylva Says, “But the Coming PIB Will Help..”

By Bunmi Aduloju

The Nigerian government is not in the best place to support the country’s oil industry, notably the upstream sector, with any form of palliatives, to cushion the effect of the pandemic.

“As a government we are not also in the best frame and shape at this point”, Timipre Sylva, the country’s Minister of State for Petroleum, has said. “Our earnings are heading south as a result of COVID-19”, Sylva said at a discourse with the Nigerian Association of Petroleum Explorationists (NAPE). “So, we are not in the best position right now to support in more positive terms”, he explained.

Nigerian upstream operators, especially the homegrown independents who produce over 25% of the country’s entire output, have lamented that they were continuing to face royalty and other taxes, a crippling debt overhang and a disproportionate burden of the cost of insecurity in the Niger Delta, despite dwindling revenues.

Sylva said that “the easier way to support is to make sure that the fiscal terms, the framework around your operational environment is actually eased off so that, at least, you can operate better. And unfortunately, these are not things that we can do for most of the time”.

“But, I think”, he explained, “the most important support for the industry I believe, will come from the Petroleum Industry Bill (PIB, the reform legislation currently on its way to parliament), “because the PIB is taking everything holistically into consideration to ensure that at least, operators will have the best terms available”.

In a short speech prefacing the dialogue, Sylva had revealed that royalties for onshore and shallow water assets (in which most Nigerian independents participate) would be reduced “in the new law”. He had also noted that the law would “establish a gas base price that is higher than current levels for producers and this base price will increase over time. This price level should be sufficiently attractive to increase gas production significantly since this gas price will be comparable with gas prices in other emerging economies with considerable gas production”.

Sylva offered that the PIB would be very competitive. “We are looking at the global environment. It is a very competitive environment now in the oil and gas sector. I will want to ensure that Nigeria continues to be one of the destinations of choice and that is why we ensure that the PIB is least as easy on the industry as much as possible.

 


Cameroon Exported 6Billion Cubic Feet of LNG in Five Months

Cameroon shipped 158,000Tons of liquefied natural gas in the first five months of 2020, according to the National Hydrocarbons Corporation Société Nationale des Hydrocarbures (SNH) du Cameroun.

Converted to standard cubic feet, the volume is 6.1Billion cubic feet of gas, or 6.2Trillon British Thermal Units (BTU).

The molecules were exported in seven cargoes to markets in Asia, notably India, China, and Taiwan, an SNH report indicated.

Since 2018, Cameroon has been producing LNG from the Sanaga South field, northwest of the coastal town of Kribi in the northern part of the Douala basin.

The gas is liquefied in a floating facility, Hilli Episeyo, located off Kribi. The capacity is 1.2Million tonnes per year.

Small as it is, Hilli Episeyo Floating LNG project is the first floating natural gas liquefaction plant in the world to be built as a result of the conversion of an LNG carrier.

The project is operated by Perenco, the French-British independent, with the state hydrocarbon company as partner. The sole offtaker is Gazprom Marketing & Trading, a unit of Russian energy giant Gazprom.

Output increased in 2019 compared with 2018. In 2019 Cameroon shipped 19 loads of LNG (7 more than in 2018) to Asia.

 

 


Mozambique: Shared Value, Local Partnerships and The Future of Work

By Mario Fernades, Deloitte

Two LNG projects are currently under construction in Mozambique.

Several others are imminent.

The proposed ‘LNG System’ in the country will effectively be rolled out in four stages.

The Coral FLNG, operated by ENI, sanctioned in 2017, will produce about 3.4Million tonnes per annum by 2024.

The TOTAL operated Mozambique LNG in Area 1, sanctioned mid-2019, will be producing 12.8MMTPA  by 2026.

Final Investment Decisions FID has been delayed for the ExxonMobil led Area 4, but the project is aiming to produce about 15.2Million tonnes per annum.

The projects for Phase 2 trains have not yet been decided, but the operators are starting to think about them and they could potentially add another 30Million tonnes per annum, with FID probably around about 2024. So, of what is potentially on the cards and being planned is about 31Million tonnes per annum. This is enormous. This could make Mozambique the fourth largest in the world. Qatar which is the largest, is producing about 77Million tonnes per annum and it took them 14 years and it brought tremendous economic benefits for the country. The EPC contractors for Area 1 are largely led by Saipem, Chiyoda and McDermott.  Area 4 EPCs include TechniqFMC, JGC and Fluor.

Opportunities for Local Investors and Their Partners-, TOTAL for Area 1 is targeting to spend about $2.5Billion for Mozambican registered or owned companies. It allows for foreign investors who want to come into the country and invest with local players or establish operations in the country. Area 1 project has already spent about $850Million over the last five years. What’s important are the priority industries that investors could look forward to considering.

Some of the lower values but highly mature markets where you’ll see some of the local players in Mozambique get involved because it doesn’t have a lot of technical complexities are areas like food and water supply, accounting services and general consulting. Where we believe this need to evolve to and it’s the opportunities for foreign direct investments, is higher value and more mature investments including Civil construction services, transport and logistics, mechanical and electrical instrumentation, IT Systems, Pipes, Vessels, Metallurgy and welding activities. This is where the real value is going to be developed over the next few years and represents significant investment opportunities. Given the low maturity of some of the industries in the country, you’d probably see in the future, a lot of collaboration between the government, operators in EPCs, local companies, the business associations in Mozambique, as well as any foreign investors who are interested in investing in some of these value chains. Key value chains and opportunities like civil construction, are not well understood and there will be a need to identify the gaps and opportunities for business out there, both local and foreign. Another thing is what is being done currently by these big operators and the EPC’s to close the gap on the skills and the local business in Mozambique. There are plans to establish the Enterprise Development Centres (EDCs) where the objective is to build capabilities, expose these local companies to international OEMs and expertise promote collaboration and certification which is a big requirement from a lot of these big capital projects, that these companies have the right levels of certification in order to provide services. Critical to sustaining the value and the expectation that everyone has of these projects, is to drive the concept of shared value. This is building on lessons from the past in the country. The concept of “Shared value” is how can both shareholders who looking for a financial return on their investments, government stakeholders are looking for a return in the country and citizens who live in the remote areas of where this gas was found or in the country itself, achieve the kind of benefits that they’re looking for. It is complex to match and balance these expectations. Very often we tend to see that companies tend to do the “pickbox compliance” approach but we believe you have to go beyond some of these. It’s important that these companies, governments and so forth create a platform in which collaboration can happen. The government creates the right policy around employment and procurement to ensure that companies are incentivized to invest in local procurement and so forth.

From the operators’ perspectives and the companies building the infrastructure, it’s important to be top of mind to be relevant to these communities and to really develop processes to effectively measure the social returns that these stakeholders are looking for. It is easy to measure the financial return, but quite another thing to measure the social economic return in a holistic manner.

The Future of Work -Challenges like COVID-19 are really disrupting the way projects are executed, and are forcing companies to plan on how they would operate in this new normal. Companies need to rethink how work would change in this new normal. For example, how do you enable effective remote supervision? It’s one thing to work in a desktop type job, it’s quite another to build the infrastructure of the magnitude that we’re talking. The same restrictions that we’re all facing in challenges like COVID-19 are also being felt in large projects like this. How do you define new roles and responsibilities for the workforce that is there? Probably you don’t need to have as many people on site and you have to adopt concepts of social distancing, how do you redefine these roles? What tools and technologies will you need to enable this kind of new reality of the future of work? Companies will have to decide what tools and policies, what labour policies will be put in place in order to enable these future work teams? Lastly, I want to talk with you about innovation. We think that digital is going to be a key enabler here. Concepts that we all thought were very futuristic are now a reality and being thought through as real tools to ensure that the project continues to be delivered on budget and as scheduled. Another thing we’re trying to see as well is a lot of these safety analytics and how persons are wearing safety gear, helmets and video imaging which detects if a person is wearing protective gear or not, and then take corrective action. Another big innovation area that we’re starting to see is around “Sentiment Analysis”, which is all about how to use technology to collect and measure the pulse of your workforce of your communities that are impacted by the project and quickly identify and innovate with them to understand what their needs are so that you can quickly adapt your actions to that. Sentiment Analysis is all about measuring the pulse of your stakeholders.

Mario Fernades- Partner at Deloitte Consulting, based in Mozambique, heading up the practice there. Deloitte offers Consulting, Risk Advisory, Taxation, Audit & Assurance and Green Dot(Future of Energy and Goods). Fernades spoke at an Africa Oil Week produced webinar panel including Paul Eardley-Taylor, head of Oil and Gas Southern Africa, Standard Bank,and Trey (Lyman) Armstrong, MD, Project and Structured Finance, US EXIM Bank. It was moderated by Dexter Wang, Asia Market Engagement Partner at S&P Global Platts. This is an abridged version of the conversation, monitored in Lagos, Nigeria and transcribed by Foluso Ogunsan and Akpelu Paul Kelechi.

 


NDDC: Why President Buhari Must Urgently Intervene

By Ogaga Ifowodo

In quite belated response to the unconscionable exploitation of the oil wealth of the Niger Delta, the attendant destruction of its environment and traditional means of livelihood, as well as the rise in militant agitation for redress, the Federal (military) Government established, via Decree No. 23 of 1992, the Oil Mineral Producing Areas Development Commission (OMPADEC).

Its goal, broadly stated, was to rehabilitate and develop the oil mineral producing areas of the Niger Delta, tackle ecological problems associated with the exploration of oil minerals, liaise with the various oil companies on matters of pollution control and to carry out other duties necessary to those ends.

A mere eight years after, the Niger Delta Development Commission (NDDC) was established by Act No. 6 of the National Assembly. Its goals, needless to say, are similar to those specified in the OMPADEC decree, even if more widely enunciated and with a different organisational structure.

As with its predecessor, NDDC is a special category agency under the presidency and its mandate the “rapid and sustainable development” of the region to “one that is economically prosperous, socially stable, ecologically regenerative and politically peaceful.” This goal is not only beneficial to the Niger Delta but also to Nigeria as a whole, given that the Niger Delta is the economic heartbeat of the nation.

As elaborated under Section 7 of its enabling act, the mandate turns NDDC into a virtual regional government, with just one sub-section giving an idea of its magnitude:  “[To] conceive, plan and implement, in accordance with set rules and regulations, projects and programmes for the sustainable development of the Niger-Delta area in the field of transportation including roads, jetties and waterways, health, education, employment, industrialization, agriculture and fisheries, housing and urban development, water supply, electricity and telecommunications.” There are nine other functions specified, including the omnibus duty to “execute such other works and perform such other functions which in the opinion of the Commission, are required for the sustainable development of the Niger-Delta area and its peoples.”

My general activist commitment to human rights and development aside, it was the prospect of being in a position to make some direct contribution towards the realisation of this great goal that had me excited when the Minister of Transport, Hon Rotimi Amaechi, called mid-June 2016 to inform me that President Buhari had approved my nomination as the representative of Delta State on NDDC’s governing board. Two days before, I had booked a flight to London for the final interview to be country director of the world’s foremost international human rights organisation, Amnesty International. I was given the job on the spot, leaving me with the rather nice problem of occupying my thoughts with the job to take on my return flight. I had spent a full decade of my life working as a rights activist with the Civil Liberties Organisation, Nigeria’s premier non-governmental organisation, before proceeding to Cornell University for postgraduate studies in 2001. And after all the years of advocacy for rights, democracy and social justice dating to my undergraduate days as a student leader, I thought it was time to be more directly involved in bringing about the change I pined for. After all, we can’t always whine about poor governance due to a dearth of people genuinely committed to the public good while spurning every chance to serve. It was why, fresh on my return in 2014 from my teaching position at Texas State University, I dared to join a “bourgeois” political party for the first time and sought the ticket of the All Progressives Congress for the House of Representatives, my ambition thwarted at the primaries by a sore lack of you-know-what: money.

Despite the many structural, administrative and political interference problems noticeable at once, I threw myself at the job with gusto. I inspected minor and major projects but devoted most of my time to the latter. And discovered that many of the projects described as “ongoing” in the status report I got from the Delta office were virtually abandoned. Among them: Uzere-Patani Road with Bridges, awarded on 10 December 2004 at the cost of N3.03Billion; Gbaregolor-Gbekebor-Ogulaha Road (Phase 1) with Bridges (2009, N16.1Billion); Bomadi-Tuomo-Ojobo-Tamigbe Road with Bridges, Phase II (2009, N8.9Billion); Ugheye-Koko-Escravos Road, Phase II (2014, N14.8 Billion); Shore Protection at Koko (ca 2012, N3Billion); Ugborodo Shore Protection, Lots 1-9 (2014, N8.07Billion); Nigeria Army Jetty (Forward Operation Base) in Uvwie-Warri (2012, N4.7Billion); Ozoro Township Roads (2012, N2.4Billion); and 132 KV Transmission Line and 1 No. 30 MVA 132/33 KV Substation each at Ughelli and Ozoro (2011, N2.1 Billion). I focussed on this category of projects as those that truly seek to meet the Niger Delta’s crying infrastructural needs.

But midway into its tenure, our board was dissolved. The news awaited me on my return from commissioning Phase 1 of the last listed project, with rising hopes for Phase 2 in Ozoro which would ameliorate the power woes of my Isoko people. I chose to wear my disappointment as a badge of honour: “Well, sacked while on duty,” I said, vainly looking for a glimmer of light in the sudden gloom! Yet, until my stint on the board, no one could have persuaded me that NDDC was not a colossal waste. I had yet to see its impact in the lives of the harried citizens stuck in that sweltering swamp of anger from the utter despoliation of their land, air and water as the inhuman price of oil and gas extraction. The project inspection trips changed my mind. I could see now the immense potential of NDDC to transform the Niger Delta as envisaged. Why hadn’t the goal been achieved and, worse, why did it seem unachievable, twenty years after?

Of the many ills that bedevil NDDC, the frequent dissolution of its boards ranks among the most deleterious. All the powers of NDDC are vested in the board. Consequently, precipitate board dissolutions can only cause catastrophic lack of continuity in policy and internal oversight. In time, crippling bureaucracy replaced technocracy. A minor example: for over a year until our board was dissolved, and nearly twenty minutes after from one desk to another and yet another, the Delta office could not get approval for the replacement of broken-down furniture and equipment! The headquarters in Port Harcourt became the Abuja of the Delta: to get anything done, even as trifling as replenishing photocopying paper, you must trek to Port Harcourt. But perhaps even more devastating is political interference. The drama currently playing out before the eyes of the world, against the backdrop of the forensic audit ordered by President Buhari at the urging of the commission’s member state governors, gives an idea of the destabilising role of this problem.

During a pre-inauguration retreat, the last chairman, Senator Victor Ndoma-Egba, informed us that the only agenda President Buhari laid out for him was “to go and make friends in the Niger Delta.” On 7 February 2018, I had the honour and privilege of a private meeting with the president. I humbly suggested to him that he would need to do more to enable us make friends in the Delta. NDDC had to be restructured and refocussed on its mandate. He had to set clear timelines and benchmarks. And because the army of profiteers at the expense of the ordinary indigenes would be up in arms against a development-centred initiative, he would have to publicly give the board his backing and deflect their inevitable attacks. I didn’t elaborate further; the point was obvious. Any development agency worth the name must be insulated from partisan politics, the perils of electoral cycles and the attendant substitution and prioritisation of narrow interests. Lastly, there must be strict adherence to the enabling law in order to reduce the undue politicisation of appointments. Politics might never be completely avoided but that does not have to be the same thing as turning NDDC, any government agency, into a mere political patronage machine. After all, the benefits of development are not reserved for party members only.

Given the magnitude of the problems currently besetting NDDC, such that the actual work of developing the Niger Delta has practically ceased, only the President can break the impasse. If he wishes to make friends in the creeks now and beyond 2023, I would suggest the following as urgent steps that he must take. First, he should ensure that the forensic audit he has ordered is done by a reputable international accounting firm. The patriot in me would like a local company, but it would be distracted and unnecessarily impugned by the irredeemably tainted environment of allegations and counter-allegations by those at the heart of the problem. To adapt a legal maxim, probity must not only be served but be seen to have been served. Second, he should order a halt to any new regional or major projects in the next five years and cap quick impact or emergency projects to no more than ten percent of NDDC’s annual budget. In that period, all abandoned projects are to be completed. The only exception would be the Niger Delta Regional Power Pool and Business Parks whose goal is to deliver 7GW (seven gigawatts) of affordable energy across the region by harvesting its copious gas supplies (still sadly flared) for embedded power plants that would feed business parks in raw material enclaves. Any other exception would have to be projects with funding from donors or private sector partners requiring no more than token commitment guarantee payments. Such as the Niger Delta Digital e-Learning Initiative, including the retraining of teachers and upgrading of curricula across primary, secondary and tertiary educational institutions. Third, the President should ensure a restructuring of NDDC’s bloated balance sheet, estimated at over N2Trillion. As a first step to this goal, our board cancelled a tranche of projects at zero percent completion, thereby reducing the balance sheet by N200Billion. Fourth, urgent reform of NDDC’s governance system. The current administrative framework is so heavily bureaucratic and bound to the analog mode as to be a mighty clog in the wheel of development. In the view of Dr Joe Abah, former Director-General of the Bureau of Public Service Reforms, everything that can possibly be wrong in an institution is to be found in NDDC, to the point of it being almost unreformable. Lastly, NDDC must be returned to its core mandate. The Regional Development Master Plan should be updated to align it with the dizzying realities of the Information Technology Age and the brave new world dawning on us of a green and sustainable energy future beyond fossil fuels.

This is not an exhaustive agenda of what must be done to salvage NDDC now. It is, I hope, a good starting point.

Ifowodo, a lawyer, writer, scholar and rights activist, was the Delta State representative on the board of NDDC from November 2016 to February 2019.


Egypt to Triple Natural Gas Stations, as it Converts 1.8Million Cars

The Egyptian government plans to triple the number of natural gas filling stations in the country from 190 to 556 in 2020.

It is part of the five-year national programme, announced earlier this year, to convert 1.8Million cars to run on both natural gas and gasoline.

Ultimately, President Abdel Fatah el-Sisi has said, Vehice licencing will be conditional on cars being equipped with natural gas engines.

Through the initiative, owners of vehicles over 20 years old will receive low interest loans through MSME Development Agency to purchase new dual-fueled vehicle. Owners of newer vehicles can access zero interest finance to outfit them with new engines.

A key player in the government’s implementation of this programme is the Egyptian International Gas Technology (Gastec), a joint stock company affiliated to the Egyptian Ministry of Petroleum, established on June 1996 pursuant to the Egyptian Investment Law # 8 of year 1997 on the Investment Guarantees and incentives with 60% participation of Egyptian companies and 40% of ENI International B.V.

Gastec runs 100 out of the 190 natural gas filling stations currently in the country. It plans to open 23 new natural gas filling stations and five integrated natural gas and gasoline stations in 2020.

Manufacturers in the country have shown interest in the scheme. Toyota agreed to manufacture 240,000 natural gas-powered minibuses. Volkswagen said it was keen to produce natural gas cars locally. 11 global auto companies were approached by The Arab Organisation for industrialization to partner on replacing diesel buses with natural gas-powered vehicles.

The national conversion project follows up on a 2009 scheme that sought to replace 70,000 old taxicabs with zero- interest loan new vehicles fitted with dual fuel engines

Although the programme fits into the standard Egyptian government’s effort to utilize natural gas in the country, officials say that this scheme is targeted at ameliorating the cost of living. Whereas a litter of 80-octane gasoline, (the cheapest) fetches $0.39, the same volume of natural gas can be purchased for $0.21, at any of Egypt’s filling stations.


Oil Majors in Retreat from Congo, Gabon

By Fred Akanni, Editor in Chef

French oil major TOTAL announced last week it had agreed to sell its stakes in seven oil fields in Gabon, around the time that news filtered in that ENI had proposed divesting stakes in its operated acreages in Congo Brazzaville.

TOTAL will soon announce sale of its stakes in Congo Brazzaville. It’s only a matter of time.

Considering that Shell sold its entire onshore assets in Gabon in 2017, these two announcements tell the story that the majors are winding down in these countries, where new hub size, short term-to-market discoveries have not been made for some time.

ENI’s decision to sell in Congo is surprising, giving the Italian explorer’s penchant for developing hydrocarbon tanks that other majors dismiss as marginal. Indeed, it was only late in 2019 that ENI completed phase 2A of the Néné Marine project by putting a total of 15 wells into production and approved the implementation of phase 2B.

TOTAL, effectively, is completing a second sell off in Gabon to Perenco, the unlisted French independent, in the space of three years.

The Paris based explorer divested its stake in five fields, representing 13,000Barrels of Oil PerDay, positions in exploratory tracts, as well as the Rabi-Coucal-Cap Lopez pipeline network, all to Perenco, for $350Million in 2017. Now it is selling again to the same company, including the operatorship in the Cap Lopez oil terminal. TOTAL is going to receive $290Million and $350Million for these assets, depending on future prices of the Brent crude.

TOTAL claims to “remain fully committed to Gabon through our operated production clusters at Anguille-Mandji and Torpille-Baudroie-Mérou, where we continue to maximize value for all stakeholders,” but that statement is for optics.

The aggressive French player has the biggest, forward looking projects in Africa today.

It is constructing a $20Billion LNG facility in Mozambique, working on financial close for a $12Billion basinwide oil development in Uganda and appraising a large oil, gas and condensate find, a new heartland if you wish, in South Africa.

TOTAL’s portfolios in Angola and Nigeria, each delivers no less than 350,000Barres of Oil Equivalent a Day.

 

 


Rystad Predicts Massive Plunge in Libyan, Nigerian Reserves

By Ahmed Gafar, in Lagos

Rystad Energy is revisiting the concept of Peak Oil.

The Norwegian consultancy is arguing that the effects of COVID-19 will ultimately force significant reduction in appetite for frontier exploration.

The company has startling predictions for the growth or decline of crude oil reserves in African jurisdictions, especially the Top Four holders of crude.

Rystad says of Libya, where the warlord Khalifa Haftar has only just been stopped in his drive to take Tripoli: “With no imminent peace in sight, future production potential falls further by 4Billion barrels”.

About Nigeria, Rystad says: “after a decade-long debate on oil policy reforms, potential reserves are expected to fall further by 6Billion barrels”.

Rystad acknowledges positive news on oil policy reforms in Algeria, but in spite of that, it expresses the gloomy view that “shale exploration potential is expected to fall by 7Billion barrels of oil”.

For Angola, Rystad forecasts “less deepwater exploration as peak oil demand comes sooner due to COVID-19”.

But it does not say how much future reserves increase Angola will lose.

 

 


Aker Will Use Two FPSOs For the Pecan Project in Ghana

By Toyin Akinosho, in Lagos

The Norwegian independent, Aker Energy, says it has changed its development concept for the Pecan field in ultra-Deepwater offshore Ghana.

The company will be using two FPSOs to drain the 450Million barrel (probable) reserves.

While the original field development concept was based on a centralised Floating Producing Storage Offshore (FPSO) vessel, supporting the development of the entire Pecan field, as well as tie-ins of all other area resources, the focus has shifted toward a phased development approach.

“This approach will enable Aker Energy to commence with one FPSO for Pecan in the south and expand to a second FPSO in the north after a few years, with tie-ins of additional discovered resources. The first FPSO will be deployed at around 115 kilometres offshore Ghana over a subsea production system installed in ultra-deep waters in depths ranging from 2,400 to 2,700 metres”.. ”, Aker says in a widely distributed release.

There has always been the suggestion of phased development, but Aker never said anything publicly about two FPSOs.

The Pecan field was discovered by Hess Corp. in December 2012. The American independent sold its equity on the asset, along with operatorship, to Aker Energy in 2017. The Norwegian explorer immediately ran with the project, hoping to take the discovery to market by 2022.

Aker concluded an appraisal campaign, involving three wells, in mid-2019 and announced that “reserves, to be developed in the first phase, are estimated at 334Million barrels of oil. Discovered contingent resources, to be developed in subsequent phases, are estimated at 110-210MMBOE, resulting in a combined volume base of approximately 450–550MMBOE. These estimates exclude any additional volumes from Pecan South and Pecan South East, currently being assessed”. Aker further declared it had “identified further upsides in the area that we intend to mature as part of the area development”, adding that “the total resource potential in the area is within the range of 600-1000MMBOE.”

In March, however, the company announced that a final investment decision (FID) had been placed on hold, postponing the project.

Today, it said: “While no new date has been set for the FID, the company is working actively to confirm the feasibility of a phased Pecan field development by executing conceptual studies.

Aker says that the phased development of the Pecan field and the utilisation of a redeployed FPSO vessel will substantially reduce the CAPEX and, hence, reduce the breakeven cost. In addition, it will increase the possibility of reaching a commercially feasible project that will allow for an investment decision. Aker Energy and partners are currently assessing several FPSO candidates for redeployment, and the final selection will be based on technical capabilities and cost.

Aker Energy is the operator of the Deepwater Tano Cape Three Points (DWT/CTP) Petroleum Agreement, with a 50% participating interest in the DWT/CTP Petroleum Agreement. Its partners include the Russian explorer Lukoil (38%), the Ghana National Petroleum Corporation (GNPC) (10%) and the indigenous company Fueltrade Limited (2%).


Kenya To Restart Distributing Small LPG Cylinders to Poor Households

$28Million project had been stalled by a court case for two years.

After a two-year court case, in which it was accused of distributing substandard cylinders, the National Oil Corporation of Kenya (NOCK) will start the distribution of the six-kilogramme (6kg) Gas Yetu cylinders to poor households in the country.

East Africa’s largest economy wants to wean its poorest people from the use of dirty wood fuel. A total of 109,649 six-kilogramme cylinders, 329,422 burners and 329,260 grills have been lying in the corporation’s warehouses since the distribution was discontinued on court orders in 2018.

The government had allocated $28Million for purchase of the cylinders to be sold at a subsidised $19 rate with complete accessories under the Gas Yetu brand. It’s a steep discount from the market price of $47 for the 6kg gas cylinder with cooking accessories.

The operation was disrupted by the discovery that fraudulent contractors supplied 67,251 faulty gas cylinders. The discovery indicated that 40% of the cylinders supplied to NOCK were sub-standard, including having faulty valves that posed the danger of fire eruptions.

The court case, instituted by the Consumer Federation of Kenya (COFEK) was dropped after certain conditions were met including bringing on board the third party cylinder inspector. “The exercise by a third party cylinder inspector to independently test the cylinders and confirm the integrity and safety of the same ahead of distribution to Mwananchi starts on Monday, May 25, 2020,” Leparan Gideon Morintat told, NOCK’s chief executive officer told the Energy Committee of the Senate, the upper house of Kenya’s bicameral legislature.

 


Deadline for PIB is Challenged; First Drafts Unlikely in Cabinet Before Mid-June

There’s a chance that the first drafts of Nigeria’s Petroleum legislation will reach the Federal Executive Council (the country’s cabinet) by mid- June 2020, not before.

A three-month delay in producing the documents has pushed the envelope in getting this most crucial assignment delivered by the end of the year.

After they are approved by the 42-man FEC, the drafts will proceed to the National Assembly for deliberations that will shape them into acts of parliament, for the President to sign. It is unlikely that the bills: the Petroleum Industry Administratve Bill (PIAB), and the Petroleum Industry Fiscal Bill (PIFB), will get a first hearing at the bicameral house until July.

The original plan was that the Executive arm of government, coordinated by the state hydrocarbon company NNPC, would have pieced together the draft documents as early as late February or early March. But as the work dragged on, “it got truncated by the COVID -19 lockdown”, in the words of people who are familiar with the process, and only got significant traction in the last three weeks.

Considering the COVID-19 challenge, it’s not clear whether there will be public hearings at the Senate and the House of Representatives, as they work on the bills from late in the second half of the year.

But even if there are not, there has to be some time for inviting and accepting memoranda.

A comprehensive petroleum reform legislation, widely known as Petroleum Industry Bill (PIB), has been showing up on the legislative agenda of the Nigerian National Assembly since 2008. In terms of construction, the document from which the first iteration of the legislation was generated was produced in 2000, in the form of a report and policy document issued by the Oil and Gas Implementation Committee (“OGIC”) established by (then) President Olusegun Obasanjo. That report, approved by the Yaradua government, resulted in the Petroleum Industry Bill 2008 being forwarded to the 6th National Assembly.

“The PIB has been a long time coming and we think that when it comes out later this year, it will come out with a lot of sweetness”, Timipre Sylva, Minister of State for Petroleum Resources, said on the sidelines of the OPEC meeting on March 5, 2020. “We are very mindful of the fact that it’s a very competitive environment right now and we are taking that on board in the new law”.

But does this three-month (probably more) delay mean that the reform law is unlikely to become reality in 2020?

Some of the people close to the process are optimistic.

“With the Presidency now apparently convinced”, says a consultant who has been part of the executive-legislature interface in the last 12 years, “these bills can be passed in three months. Remember the DOIB (Deep Offshore and Inland Basins) review took only 26 days from start to finish”.

There is a lot riding on this law. Nigeria is expecting a rise in investor interest in the energy market once the law goes through. Sylva said: “We are expecting that everybody will be interested because Nigeria is not just a brownfield, it has a lot of greenfield opportunities,” he said. “We believe the investment world will be quite pleased when we do come out with the bid round.” The PIB will provide a more stable investment framework in the sector. “Things have remained quite stagnant and that’s why we believe that with this bill it will bring a lot of certainty to the investment framework and people will get interested and come,” he said.

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