02 Oct

Kenya: U.S.$10 Million Equipment for Early Oil Plan on Its Way

Kenya: Tullow Oil has contracted Dubai-based Almansoori Petroleum Company to supply an Early Product Facility (EPF) at a cost of $10 million, to help it extract crude in South Lokichar in Kenya’s north, even as uncertainty surrounds the Early Oil Pilot Scheme.

The deal with the Dubai company was signed early this year as part of the wider processes in the run up to early production, which has run into trouble after the government shelved it citing logistical challenges.

But Tullow had already secured the government’s approval to bring the Early Product Facility and have it installed. The Ministry of Energy gave the green light for its procurement.

Tullow Oil says that it has invested $1.5 billion in Kenya since it started exploration activities in 2010, including $213.5 million this year. Of this, $100 million is being spent on preparing the oilfields to start production and exporting of crude oil.

The EPF, which is a temporary equipment and being ordered on a rental basis, will enable Tullow Oil connect all the 40 wells it has dug and thus achieve the targets of extracting 2,000 barrels of crude every day when the EOPS begins.

The oil firm says the equipment is on its way and is expected to be installed in November, after Tullow secures all the necessary approvals from government agencies like the Energy Regulatory Commission, the National Environment Management Authority and the Kenya National Highways Authority.

“We have decided to rent a temporary facility for pumping the crude for transportation to Mombasa before a permanent production facility can be installed to facilitate full-scale production when the pipeline is ready,” said Tullow Oil communications manager Timothy Tororey.

Impediments

He said that Tullow expects the EOPS to kick off at some point despite, a campaign by some oil marketing executives and civil society groups, who say the scheme is a loss-making venture, especially considering the current crude oil prices averaging $55 per barrel on the international market.

Read more: Kenya: U.S.$10 Million Equipment for Early Oil Plan on Its Way

 

 

15 Sep

Uganda: Govt Issues Oil Exploration License to Australians Armour Energy

Uganda has handed over the oil exploration license in the Kanywataba block in the Albertine area to an Australian company – Armour Energy Limited.

Speaking at a press conference at the Ministry of Energy offices in Kampala Thursday morning, Energy Minister Irene Muloni said the issuance of the license to Armour Energy Limited brings in a new player in Uganda’s oil and gas sector.

“This is in response to our objective as a ministry of ensuring that the country’s resource base which currently stands at 6.5 Billion barrels oil in place is expanded by further exploration efforts,” Muloni said.

She said that the key elements of the Kanywataba block deal, done in accordance with Section 58 of the Petroleum (Exploration, Development and Production) Act, 2013, includes an exploration license with an acreage of 344 square kilometer for four years split into two periods of two years each.

The other part of the deal is a minimum work programme which includes acquisition of seismic data and drilling of at least one well, an advisory committee chaired by the Petroleum Authority of Uganda, and consisting of representatives from government and the licensee to review and approve all annual exploration work programmes, budgets and production forecasts.

The other elements include payment of royalty based on the gross total daily production in barrels of oil per day – the rate of royalty ranges from 8.5% to 21% and the cost recovery limit for petroleum has been set at 65%.

Payment of a signature bonus, research and training fees, and annual acreage rental fees for the first exploration period amounting to $316,000 have been paid to the Uganda Petroleum Fund. Performances (Bank) guarantee amounting to 50% of the minimum exploration expenditure for the first exploration period is ($990,000).

“Due diligence was carried out; it required someone who is serious and determined,” Muloni said in support of handing over the license to Armour Energy Limited.

Read more: Uganda: Govt Issues Oil Exploration License to Australians Armour Energy

15 Sep

Uganda: Dar, Kampala Oil, Gas Firms Join Forces

The Association of Tanzania Oil and Gas Service Providers (ATOGS) and their Ugandan counterparts Association of Uganda Oil and Gas Service Providers (AUGOS) have signed an agreement that will see the two working together in the Hoima-Tanga pipeline project.

Speaking at the signing ceremony yesterday, ATOGS cofounder and Vice- Chairman Mr Abdulsamad Abdulrahim said the signing ceremony marks the be ginning of collaboration between the two in a journey to grow the economies of Tanzania and Uganda.

The agreement will see Tanzanian and Ugandan service providers in the oil and gas industry do joint biddings for tenders in different areas of the pipeline project, including transportation of materials.

Uganda’s AUGOS Chief Executive Officer (CEO), Mr Emmanuel Mugarura encouraged Tanzania service providers in the industry to be strong, work together and uphold standards that are required in the industry.

Mr Mugarura said it is only through hard work that the service providers from Tanzania and Uganda can achieve the required standards in the industry.

“It’s through standards that you can stand up and talk…stand up and compete, join tenders and stand up against Chinese, Europeans and Americans who have been in the game longer and they have money. The advantage we have is that we are East African,” Mr Mugarura explained.

ATOGS was formed as a result of AUGOS, after service providers visited Uganda and saw the need to establish an association that brings together local business service providers. One of ATOGS objectives is promoting local content in the oil and gas industry through supporting job and business opportunities for nationals and local businesses in the country.

Earlier, while speaking with ATOGS members, Senior VicePresident (Business Development) of Prezioso Linjebygg Company, Jean -Louis Chassagne said the company has vast experience in executing such major oil and gas projects.

Prezioso Linjebygg is among seven companies bidding for tenders in the execution of Hoima -Tanga Oil Pipeline project.

Read more: Uganda: Dar, Kampala Oil, Gas Firms Join Forces

11 Sep

Nigeria and South Africa emerge from recession

Two of the largest economies in Africa are growing again after recessions.

Nigeria’s GDP expanded by 0.55% in the second quarter of 2017 year-on-year, according to the National Bureau of Statistics, ending five consecutive quarters of contraction. Quarter-on-quarter growth for the same period was 3.23%.
The South African economy grew by 2.5% quarter-on quarter for the three months to June 30 after two quarters of decline, according to official statistics.
Historic decline
Growth in Nigeria marks the end of its worst recession in 25 years.
Africa’s leading oil producer has been hard hit by falling prices for the commodity, which accounts for the majority of its export revenue.
But the oil sector has recovered slightly in the last quarter, with growth of 1.6% year-on-year.
Nigerian agriculture, which contributes around 23% of GDP, has also rebounded with growth of 3% over the same period.
Agriculture boom
South Africa’s recovery from a shorter recession has been supported by growth across a range of industries.
The agriculture sector expanded by 33.6% quarter-on-quarter, boosted by strong harvests of crops such as maize and wheat.
The finance industry also performed well with growth of 3.5%, and the mining industry expanded by 3.9%, supported by increased production of coal and gold.
But despite these positive indicators, Statistics South Africa warned that the recovery remains fragile as “longer-term indicators show subdued growth.”
[Via CNN]
06 Sep

Whatever happened to East Africa’s oil boom?

Politics has been central to the progress, or lack thereof, in developing East Africa’s oil. And it will continue to be.

It was not long ago that East Africa was the shining frontier of the continent’s oil scene. Uganda sparked the rush in 2006 after wildcatters ventured deep inland and made Africa’s largest onshore discoveries in decades. And Kenya’s north­western Turkana region continued the run with new oilfields found in 2012.

With crude prices averag­ing almost $112 per barrel at that time, it was hoped these fresh discoveries could be linked up with a new regional pipeline network stretching from South Sudan to the coast. It was believed that oil could economically transform the East African region.

Yet a decade on, little progress has been made on the pipeline, while Uganda and Ken­ya’s oil remains trapped far from interna­tional markets.

Security risks have hindered developments, while the steep drop in crude prices from late-2014 has slowed things down. However, politics – both domestic and regional – have also been central to the delays.

Read More: Africa Arguments

 

22 Aug

Nigeria: State Positioned for International Oil, Gas Dominance Despite Challenges

international oil

By embracing a digital revolution in its oil and gas facilities, Nigeria could propel itself from the shadows of persistent underperformance to become a global energy powerhouse. This will be a catalyst for industrialisation and growth in many other economic sectors too.

Digitalisation in the energy sector involves the better use of data to manage and control multiple operations. It drives efficiencies in energy management and automation systems. Importantly, workers in a digital industrial environment enjoy a massive increase in skills and productivity.

Digital development is not confined to new oil and gas facilities. Existing oil and gas infrastructure, from pipeline to refinery, can easily be upgraded to digital automation. This means that Nigeria’s ageing oil refineries in Port Harcourt, Warri, and Kaduna can be optimised with digitalisation.

These facilities were built as early as 1978 but could be made far more efficient and productive, thereby significantly reducing Nigeria’s dependency on imported petroleum products. The benefits of this investment would be measured in billions of dollars.

Effective integration of digital technologies could reduce capital expenditure in the oil and gas sector by up to 20 per cent, cut upstream operating costs by up to five per cent and downstream costs by up to 2.5 per cent.

Nigeria’s best approach will be a combination of local skills and knowledge, and the expertise and experience of a proven international partner able to deliver digital technologies and automation, together with traditional instrumentation and controls, across the entire energy value chain. This further supports backward integration of skills and technical competence in Nigeria’s limited skilled workforce.

A recent PricewaterhouseCoopers (PwC) report suggests that by end-2019 Nigeria could assume the status of the largest producer of refined petroleum products in Africa. The projection sees Nigerian exports exceed 300,000 bpd by 2019 – up 350 per cent from 2016 production of 65,000 bpd.

In this scenario, Nigeria becomes an international trading hub similar to Australia, Russia, Europe, and the U.S. Gulf Coast, while the entire West Africa region becomes energy self-sufficient by 2019, thus eliminating the need to source refined oil products from the U.S. and Europe.

Despite dwindling crude oil sales to the West, West African demand for Nigeria’s crude oil is set to rise dramatically. The region annually consumes 22 billion litres of petrol, and Nigeria’s domestic market accounts for 17 billion of those litres, yet the country still imports around 80 per cent of this energy.

With 37.2 billion barrels of proven oil reserves, Nigeria could easily meet this demand locally through modernisation and continued exploration. The country’s refining capabilities are currently underperforming and notoriously inefficient, due to lack of maintenance and underinvestment in technology.

Nigeria also struggles with ongoing vandalism of its oil and gas infrastructure. Pipeline insecurity has a devastating effect on oil production, with a staggering financial impact. Technology is a significant part of the solution to this challenge, as it enables real-time monitoring of infrastructure and quicker incident responses.

Port Harcourt refinery, for example, has capacity for 150,000 bpd of oil production but has been running at just 10 per cent capacity for the past three years. This is mainly due to its reliance on 1980s technology now regarded as obsolete in the global oil and gas sector.

The consequence is lack of preventative and reactive maintenance, inaccurate forecasts and allocations, and soaring energy costs. To boost productivity and returns, Nigeria’s energy operators should rapidly adopt and integrate digital technology that improves efficiencies and up skills staff.

Instead of being a threat to the workforce, digital technology redefines the role of the worker, and it has the potential to bridge the blue and white-collar worker, to create what is termed the ‘grey-collar’ worker. Humans and machines are therefore not competing for jobs, but working together to create a new type of talent, which is a vital component to sustained sector growth and maturity.

In the near future, Nigeria’s oil and gas operations will have real-time access to data at the click of a button, from any location on earth. This essentially connects a team of global experts collaborating in real-time to drive improvements in exploration and extraction, health & safety, pipeline security, distribution, refining and transportation of the finished products.

And with a potential $300billion added to the African economy by 2026 through the adoption of digitalisation, Africa’s largest economy will receive a significant portion of that figure to advance its burgeoning oil and gas market.

This in turn addresses the triple threat of unemployment, inequality and poverty – paving the way for a society where business success leads to socio-economic advancement, such as new business development and job creation, and essential new infrastructure projects that include schools, hospitals, transportation networks and housing.

To make this a reality, the Federal Government of Nigeria should include a robust digitalisation policy and supporting legislation in connection to its Economic and Recovery Growth Plan 2017-2020 (ERGP), which sets out the medium-term structural reforms to restore economic growth, invest in people and build a globally competitive economy.

One of its key priorities is to ensure power and petroleum product efficiency, which can only be achieved through a digital transition in the oil and gas sector.

Oil and gas operators in Nigeria should be early adopters of technology, their employees should be proactively trained in the application of the new technology, and the industry should be supported by an original equipment manufacturer (OEM) with proven global experience across the entire upstream, mid-stream and downstream value chain.

Tifase is the Chief Executive Officer, Siemens Nigeria, and a key player in the country’s push for investment and growth in the oil and gas sector

Source from allAfrica

18 Aug

Quantum Global’s Africa Investment Index shows Ghana on the rebound

Ghana is the eighteenth-most attractive economy for investments flowing into the African continent, according to the latest Africa Investment Index (AII) compiled by Quantum Global’s independent research arm, Quantum Global Research Lab. In 2016, Ghana attracted a net foreign direct investment of US$3.5bn.

According to research by Quantum Global Research Lab (QGRL), Ghana’s economy has experienced strong and robust growth over the past decade, making its success a case worth emulating by its regional peers. Industry was the main driver of overall growth with an annual average growth of about 13%, followed by services with 8.4% and agriculture with about 8%. The strong growth record has fostered the country’s graduation to lower-middle-income status in 2010.

Commenting on the Ghanaian economy, Prof. Mthuli Ncube, head of Quantum Global Research Lab stated: “Ghana’s democratic attributes are as robust as its economic growth, and by improving policies and institutions, successive governments have been able to build an attractive business climate conducive to growth. These measures include reducing the number of days it takes to register a limited liability company and days spent on resolving commercial disputes in the courts. Furthermore, the election of a new government in 2016 has revitalised the drive for higher growth and infrastructure investment, all which augurs well for investment opportunities in the country.”

The research noted that whilst the economy continued to grow on a steady pace until 2013, the GDP growth slowed from 7% in 2013 to 3.6% in 2016 due to structural challenges – such as the on-going fiscal deficits pushing public debt to over 70% of GDP, trapping the country in a cycle of debt service and borrowing.

Furthermore, a three-year power crisis and power rationing slowed down the private sector’s productivity and competitiveness. In addition, the significant external sector deficit and low world prices for the country’s gold, cocoa and oil exports were a major factor behind the economic slowdown.

Read More: How We Made it In Africa

14 Aug

Nigeria: Prepare for Life After Oil, Govt Advises Amnesty Beneficiaries

oil

Port Harcourt — As the world marked the United Nations 2017 International Youth Day saturday, the federal government has warned youth in the country, especially beneficiaries of the amnesty programme in the Niger Delta region to prepare for life after oil.

Speaking at a forum to mark the event in Port Harcourt, the Presidential Adviser on the Amnesty Programme, Gen Paul Boro, called on the Niger Delta youths to prepare for life after oil by making use of the skills, knowledge and experience they gained while undergoing training.

The forum was put in place by a non-governmental organisation (NGO), Nevido Media in collaboration with the NOA with the support of the Nigerian Youth Council and other bodies.

Boro called for paradigm shift in thinking and focus among the youths and beneficiaries of the amnesty, saying, “since it has become clear that oil will not last forever, there is need to prepare the youths for the future.”

He noted that the federal amnesty programme had the mandate to train 30,000 youths, out of which it had already trained 16,000.

Represented by the Head, monitoring and evaluation in the federal amnesty, Mr. Bestman Probel, Boro explained that this was why “the youths have been drawn into training in agriculture and skills while an exit programme whereby the youths after training are mobilised to start practicing the trade they learnt”.

In his remarks the Rivers state Director of NOA, Mr. Oliver Wolugbom, expressed concern that Nigerian youths have abandoned the old cherished value system and taken to kidnapping, cultism, armed robbery, thuggery and other odious practices that debase humanity.

“It is equally a source of concern that all the centrifugal forces such as separatist movements by ethnic bodies and their accompanying hate speeches are being bandied by the youths”, he said, adding that for peace to be built in the society, the youths must be properly positioned while the leadership re-strategise to plan

From allAfrica

09 Aug

Nigeria: NNPC, Others Unveil Strategies to Cope With Oil Price Volatility

oil

For the last 40 years, oil has been a volatile commodity that has had many peaks and troughs, and over the years, the petroleum industry has become much more sophisticated in how it handles the downturns.

Stakeholders at the just concluded Society of Petroleum Engineers (SPE) Nigeria International Conference & Exhibition, decried the low oil prices, and proffered strategies to cope with the bust in the oil industry.

Speaking at the conference, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, identified a number of strategies adopted by the Corporation to curtail the effects of low crude oil prices on the Nigerian economy.

They include renegotiation of the Joint Ventures (JVs) and Production Sharing Contracts (PSCs); promotion of synergy and collaboration among stakeholders thereby encouraging resource pooling, shortened contracting cycles

He said renegotiation of JVs and PSC contracts in line with the tumbling oil price has saved the Corporation billions of Dollars.

Presenting a paper tagged: “Riding the Waves of Boom and Bust: Common Objectives, Diverse Perspectives,” Baru said NNPC has resolved to develop its domestic refining capacity. This is to position it to take advantage of improved refining margins during the periods of low oil prices.

He said further: “NNPC’s strategic plan for gas is to deliver 5bscfd to the domestic market by 2020. To be clear, NNPC definitely doesn’t intend to lose focus on retaining and expanding Nigerian share of the global market.

“The recent drive by the Ministry of Petroleum Resources and NNPC to create an enabling environment for growth of the domestic gas market cannot be overemphasized. So far, over 1000km of major gas pipelines have been laid and commissioned, an additional 470km is currently in construction phase whilst a further 1400km is intended for construction before the end of 2017.

“Also, along with the development of physical infrastructure, commercial frameworks are being put in place to support the growth of the domestic gas market. Progress has also been made in the reduction of flared gas volumes from a peak of 2.5bscf/d a couple of years ago to about a current volume of 700MMscf/d.

“We envisage a near zero flare in the not too distant future as adequate infrastructure and frameworks are being put in place. Government’s intentions to develop this market will be made clear to the prospective investors.”

Also, President, Director General & Country Chair, Shell Gabon, Osa Igiehon, said winners in the current oil price environment will be those who can evolve and maintain structurally lower cost operations and projects.

Igiehon urged operators to evolve and maintain structurally lower cost operations and asset management; develop and invest in competitive capital investment and projects; and supply chain improvements and process de-complexification.

He added that there is also a need for government to develop policies, allow an operating environment and agreements to enable structurally lower costs, and also to increase in-country processing and value addition, while enhancing domestic energy security.

Welcoming the participants, the Chairman, SPE Nigeria Council, Saka Matemilola, said the conference is intended to disseminate information as regards the oil and gas sector, adding that the petroleum sector remained the main focus of the national economy.

He said the current challenges in the oil sector provided the necessary catalysts to provide opportunities for the country.

via allAfrica

09 May

Oil prices seem to be ignoring OPEC’s efforts to cut global supply

OPEC a non-member oil producers have announced plans to extend a global supply cut deal agreed in December until at least the end of 2017.

This comes after brent crude hit a six-month low of $46.64 last week amid a persistent glut driven by booming US shale oil production. Seeking to calm market Saudi energy minister Khalid al-Falih has said the coalition is ready to do “whatever it takes” to return stocks to levels five years ago.

The extension encapsulates the deal’s failure to meet is core objective of boosting depressed prices. Despite an initial uptick seeing Brent crude breach the mid-fifties in January they have remained volatile, and are now effectively back to where they were before the agreement.

All of this is bad news for big African producers like Nigeria and Angola, which have seen growth and investment hit hard and their reform efforts stifled by the commodities slump.

The International Energy Agency’s monthly outlook on oil demand is due on Tuesday. Oil exporters will be watching closely, hoping it could signal an end to the supply glut. Any reprieve looks likely to be temporary.

Read more: Oil prices seem to be ignoring OPEC’s efforts to cut global supply