Category: Energy

Africa- Policy Reform and Revitalization: The Key to Expanding South Africa’s Natural Gas Infrastructure (By NJ Ayuk)
South Africa is in many ways one of the most modern countries in Africa, particularly with respect to electricity access. Yet while its numbers compare favorably with most other African nations (as of 2021, 89.3% of the population had reliable access to electricity, making it the fifth-highest ranking in the continent according to the World Bank), it still shares some of the same core problems as the others: an unreliable energy supply facing a rapidly growing population, an expanding economy, and increasing urbanization.

With climate change looming large over any debate about energy, the pressure is on from more economically developed nations for Africa to bypass older energy technologies and jump straight to renewables. As wonderful as that may sound in theory, the key to supplying a growing nation is stability, and the key to stability is diversity.

For South Africa, whose current power generation structure is dominated by coal, that means including natural gas — which Africa has in almost as much abundance as sun and wind — to help steady the supply of energy while renewable technology continues to mature.

Diversifying the energy supply is not as simple as opening the door and putting out the welcome mat, however. For energy suppliers to thrive in a new market, they need to see stability as well — stability of policy and infrastructure. Companies don’t like doing business where the rules are Byzantine, and their physical needs are difficult or impossible to supply.

To support the expansion of its natural gas infrastructure and ensure a more prosperous future, there are several policy initiatives that South Africa should embrace.

Physical Needs

The most obvious place to start is expanding the existing gas networks to support wider distribution.

Current supply is highly localized in just three areas around Gauteng, Mpumalanga, and KwaZulu-Natal. Adequate storage facilities are sorely lacking outside of these zones and need to be built before pipeline networks can be installed to distribute the gas.

Plans are currently underway to develop such facilities in Coega, Richards Bay, Saldanha Bay, and just across the border in Maputo, Mozambique. This is a good start, but more will be needed to facilitate prompt additional power generation when a renewables-based grid needs assistance. Terminals and regasification plants for liquefied natural gas (LNG) would also enhance the country’s import capacity.
Public-private partnerships with corporations such as ExxonMobil and Royal Vopak, along with international collaborations among governments, could help accelerate these developments.

South Africa also needs to do more to access and utilize its own native supply of natural gas in areas like Mossel Bay, the Orange River Basin, and the shale formations of the Karoo Basin. Seismic surveys and exploratory drilling are needed to more accurately characterize the resources available and optimize the location of gas processing and transport infrastructure. Energy independence is an important factor in long-term stability, as evidenced in Europe when Russian gas imports were abruptly cut off.

The country could also benefit from converting old, mothballed coal-fired power plants to use natural gas instead. This could save time and money by requiring fewer new builds, and also recover jobs that were lost when these facilities were decommissioned. Although some coal plants can be converted to diesel, LNG is a more environmentally friendly option that more efficiently supports combined-cycle and open-cycle gas turbine plants.

Policy Needs

As is so often the case, much of what stands in the way of progress comes down to policy and paperwork. It’s all well and good to say we need more exploration, but unclear permitting and consulting processes, lengthy appeals timelines that exceed regulatory allowances, and limited permit validity periods for reconnaissance activities are highly discouraging to potential investors and developers, who need assurance that they aren’t throwing their time and money into a bottomless pit.

Instead, development partners need clear, stable, and supportive regulations to ensure legal certainty for projects. Policy implementation and permitting must be transparent and provide a clear framework for discussion and decision-making when considering risks, mitigations, and economic development goals.

A policy brief published by Eye for Business and commissioned by The EnerGeo Alliance in May 2024 offered a number of suggested policy reforms aimed at streamlining energy development in South Africa. The EnerGeo Alliance is a global trade alliance for the energy geoscience industry, representing geoscience companies, innovators, and energy developers. Steps recommended by the brief include well-thought-out reforms that could quickly spur much-needed investment in the country:
- Implementing clear and stable policies that support the development and integration of natural gas within the energy sector.
- Addressing policy gaps regarding new gas sources and creating incentives for investment in gas infrastructure.
- Streamlining geoscience survey permitting and consultation processes to provide critical data for identifying and developing domestic natural gas resources.
- Providing certainty for project proponents who have received relevant exploration rights and environmental authorizations.
- Considering standardized and coordinated assessment of environmental impacts and consultations to provide greater confidence for all stakeholders and reduce redundant assessments and consultations.
- Initiating regular licensing rounds for offshore exploration activities to provide opportunities for investment and enhance competition.
- Extending the validity of reconnaissance rights to offer project proponents more flexibility in seismic data acquisition, even when weather and environmental sensitivities cause slowdowns.
- Prioritizing the construction of LNG terminals and other necessary infrastructure to support natural gas import, storage, and transportation.
- Establishing a clear timeline detailing how natural gas can add value in the immediate future, well before renewables become available.
- Establishing stringent safety standards and regular maintenance schedules for gas infrastructure to mitigate risks and ensure long-term operational integrity.
To expand on that last item, while it is important for economic development to provide a supportive environment for investors, any wise society must also take steps to protect itself from being taken advantage of due to lax or nonexistent regulation that can result in compromises to oil and gas infrastructure. A stable supply of energy can only occur when safety and security regulations are respected and consistently enforced.

With national energy demand expected to triple by 2040, South Africa must plan wisely to expand and stabilize its energy supply, both imported and domestic, while respecting well-founded concerns about future climate change. Natural gas is the most reliable, efficient, abundant, and lowest-carbon fuel available to bridge the gap to a fully renewable future. If we are to utilize it responsibly, we must first provide a sound, sensible, and transparent policy foundation to smooth the road for all who wish to see South Africa prosper in the decades to come.

Distributed by APO Group on behalf of African Energy Chamber.
SOURCE
African Energy Chamber
July 4, 2024
Republic of Congo Hydrocarbons Minister to Discuss Gas Monetization at Angola Oil & Gas (AOG) 2024

LUANDA, Angola, July 4, 2024/ — Bruno Jean-Richard Itoua, Minister of Hydrocarbons of the Republic of Congo (ROC), has joined the Angola Oil & Gas (AOG) conference as a speaker. During the conference – scheduled for October 2-3 in Luanda – Minister Itoua will provide insight into emerging opportunities in oil exploration, gas monetization and LNG development, as well as potential areas for collaboration between the two countries.

Both ROC and Angola have set bold production targets, aiming to increase oil output to 500,000 barrels per day (bpd) and 1.1 million bpd, respectively. Both countries’ favorable investment climates have sparked the interest of a strong slate of E&P firms, with AOG 2024 set to not only support national oil and gas objectives, but also offer a platform for engagement in emerging cross-border projects.

AOG is the largest oil and gas event in Angola. Taking place with the full support of the Ministry of Mineral Resources, Oil and Gas; national oil company Sonangol; the National Oil, Gas and Biofuels Agency; the African Energy Chamber; and the Petroleum Derivatives Regulatory Institute, the event is a platform to sign deals and advance Angola’s oil and gas industry. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

To support oil production, ROC is promoting investment in frontier exploration alongside incremental production from existing assets. The Central African country – with 1.8 billion barrels of proven oil reserves – has several upstream campaigns underway that aim to unlock new discoveries.

Independent energy company Perenco, for example, completed 3D seismic surveys at the Tchibouela II, Tchendo II, Marine XXVIII and Emeraude permits in November 2023. Energy major TotalEnergies has announced plans to invest $600 million to drive exploration and production activities in the country, specifically through the development of the Moho Nord field.

The field currently accounts for nearly half of total Congolese oil production, producing an estimated 140,000 bpd. The investment will support drilling operations in line with national targets to bolster output.

Meanwhile, ROC is committed to monetizing its gas resources through both associated and non-associated projects. The country reached a milestone in March 2024 with the delivery of its first LNG cargo to Italy from the Congo LNG development.

As the country’s inaugural LNG facility, the project employed a fast-tracked approach whereby LNG was produced just 12 months after FID. By 2025, the Congo LNG project is expected to produce 2.4 million tons per annum, with ROC joining the likes of Angola as a major African LNG exporter.

Further supporting its gas monetization drive, ROC is making progress with the development of the Bango Kayo project. Set to reach peak oil production of 50,000 bpd, project developer Wing Wah is deploying an integrated approach to expand the project through multiple phases.

The project will begin monetizing previously-flared gas to support the country’s industrial sector, serving as a model for other African oil producers including Angola, which is striving to maximize production from mature assets.

Minister Itoua’s participation at AOG 2024 not only speaks to the caliber of the event as the premier oil and gas conference in Angola, but creates new opportunities for bilateral collaboration in the fields of LNG production and oilfield development.

Angola and ROC – both offering promising opportunities in offshore exploration and tie-ins to existing onshore infrastructure – represent highly attractive hydrocarbons markets, with the AOG 2024 conference set to connect global investors with prospective opportunities.

Minister Itoua will be joined by Maixent Raoul Ominga, Managing Director of the Congo’s national oil company Société Nationale des Pétroles du Congo at AOG 2024. For more information, visit www.AngolaOilAndGas.com.

Distributed by APO Group on behalf of Energy Capital & Power.

SOURCE
Energy Capital & Power

July 4, 2024
Africa and the Energy Transition: The Nuances, Challenges and Prospects(By Mohammed A.Abu)

Introduction

The issue of global warming exacerbated by climate change impact drives the global call for transitioning from fossil fuels energy sources to renewables.

The Agreement of the 28th UN Climate Change Conference (COPs 28) held last year in the Dubai Emirate of the United Arab Emirates(UAE) recommended “transitioning away from fossil fuels” that is, gradual rather that immediate phase out as was expected by some parties.

Whereas some countries mostly from the global North relatively are transition ready, others with particular reference to oil and gas resources rich African countries and others in the Global South aren’t yet.

For transition ready countries an immediate phase out of fossil fuels wouldn’t have been an issue but on the flip side of it, for the less transition ready countries, they surely would have had serious issues with any such decision.

Thus, the gradual phase out recommendation guided by the fact that countries had different development need situations was a mature way of handling the issue.

The Context: Fossils Versus Renewables Debate

Fossil Fuels

Fossil fuels are said to include coal, petroleum, natural gas, oil shales, bitumen, tar sands, and heavy oils are said to contain carbon and were formed as a result of geologic processes acting on the remains of organic matter produced by photosynthesis, a process that began in the Archean Eon (4.0 billion to 2.5 billion years ago)

Burning of the various types of fossil fuels experts say emit carbon dioxide (CO2) and other harmful air pollutants. Among the various forms of fossil fuels coal, oil, and natural gas are said to be the major offenders.

According to industry experts, amongst the three, coal is generally considered to be the most harmful to the environment.

Reasons:

Greenhouse Gas Emission: Coal combustion is said to release the highest levels of carbon dioxide (CO2) per unit of energy produced compared to oil and natural gas. CO2 is a major greenhouse gas that contributes to global warming and climate change experts argue.

Air Pollution: Burning coal also releases various air pollutants such as sulfur dioxide, nitrogen oxides, and particulate matter.More CO2 in our atmosphere causes less sunlight to escape back into space, causing the planet to warm.

The Liquefied Natural Gas(LNG) Exception

Even though LNG is classified under fossil fuels, but experts say, releases 45-50% less CO2 than coal, 30% less CO2 than fuel oil, dramatically reduces nitrogen oxide emissions, does not emit soot, dust or fumes, and produces insignificant amounts of sulfur dioxide, mercury, and other particulates compared to other fuels.

Renewables

The various renewable forms of energy said to be environmentally friendly, include, solar, wind, geothermal, hydropower, ocean energy and bioenergy. Solar energy is the most abundant of all energy resources and can even be harnessed in cloudy weather.

Disadvantages

Experts on the other hand also contend, even though renewable energy production is relatively environmental friendly than its fossil energy counterpart, but there is no doubt that, there are also a number obstacle to its production with the major ones being the following:

1.Renewable energy sources are natural forces that are strongly dependent on the weather conditions and are therefore not available round the clock. Thus under bad weather conditions renewable technologies such as solar cells will be of less use. For example, if it rains PV panels can’t generate electricity so one has to fall back on traditional power sources.

2.Low efficiency of renewable energy technologies is another issue. Each type experts contend, requires a specific technology so that we can convert it into electricity.

3.The efficiency of energy conversion devices they contend, is very important when prioritizing energy sources. Unfortunately, they contend, the efficiency of renewable technologies is not high compared with traditional energy conversion devices.

Solar panel efficiency that are available in the market experts contend,is between 15-20 percent. On the other hand, traditional technologies that use coal or natural gas can reach efficiency level of up to 40 and 60 percent respectively.

4.Harnessing of renewable energy requires a lot of space for solar and wind farms that could compete with land for other important purposes as compared to traditional power stations that don’t need a lot of space.

The forgoing obstacles and challenges associated with renewable energy production notwithstanding, the general consensus still favours transitioning from the environmentally harmful fossil fuels derived energy to renewables.

Renewable energy alternative is still very crucial if global warming and climate change impact is to be confronted head on in other to save the planet and humanity.is the general position worldwide.

A Dicey Situation for Africa

The South Africa based Africa Energy Chamber, the voice of the continent’s energy industry responded strongly to environmental organizations that were clamoring for Africa to abruptly halt fossil fuels production and further exploration.

The Contentious Issues

The chamber noted that even though no one is denying the importance and benefits of energy from renewables, but Africa, at this material moment, cannot also afford to leave her rich oil and gas resources buried in the ground for the sake of fast tracking transition from fossil fuels energy sources to renewables.

The Chamber cited Africa’s abysmally low energy generation capacity(4 percent of global total) making the continent the most energy poor in the world. At present, 600 million people, or 43% of the total population, lack access to electricity, most of them in sub-Saharan Africa. (IEA, Africa Energy Outlook 2022 Report).

The chamber therefore argued that, the continent still needed to exploit her rich oil and gas reserves in order to generate domestic wealth and capital and with particular reference to Liquefied Natural Gas(LNG).

Another dimension of the transition injustice argument is that some of the transition ready advanced world countries are major beneficiaries of exploitation of Africa’s oil and gas resources through colonization thereby, amassing financial wealth from Africa which they used for the industrial development of their countries back home.

Stampeding Africa now into the adoption of an immediate transition from fossil fuels exploitation to renewable energy amidst her sordid energy poverty situation, would be tantamount to grievous transition injustice.

Decades long unfulfilled financial pledges made by the Global North towards funding climate change impact mitigation and adaptation measures in the Global South with particular reference to Africa, which was given prominence during COPs 28, further makes a more compelling case for the African Energy Chamber’s position.

Prospects for Renewable Energy in Africa

With about 60 percent share of global total arable land, abundant sunshine, biomass, among others, bolstered by her ground water rich aquifers, Africa no doubt has abundant resources for renewable energy production.

What would be most crucial is,putting in place national renewable energy production policy frameworks, underpinned by,Master and Strategic Actions Plans, easy accessibility to capital at affordable cost, for investments in renewable energy projects in both the African public and private sectors.

Leveraging research driven technological solutions to the obstacles and challenges confronting renewable energy production, Africa could be an important player in the global renewable energy production industry moving on.

Africa’s Renewable Energy Production Snapshot

Within the past decade courtesy former US President Obama’s 2013 USD7bn “Power Africa” promise, a number of major solar and wind energy projects have since been executed in Ghana, Cameroon, Burkina Faso, Kenya and South Africa (The Africa Report, July 2023)

On the back of that comes the joint African Development Bank’s(AfDB) and World Bank Africa Renewable Energy Fund facility announced recently, and, “The Energy for Growth in Africa Initiative” unveiled during the 2024 G7 Leaders Meeting in Italy.

The initiative has the commitment of Canada, Japan, US, UK, EU, France, Germany, Italy, Republic of Congo, Ivory Coast and a number of African countries.

“We will work to accelerate investments in clean energy sources to ensure an inclusive transition which supports energy security recognizing that a substantial portion of people in Africa still lack reliable access to electricity and clean cooking” said the parties in a joint statement.

The Africa Energy Chamber the voice of the continent’s energy industry also recently announced hosting a reception on July 11,in London intended to woe global investors to Africa with lucrative energy projects.

The Renewable Energy Storage Conundrum

Even though general consensus favours renewable energy aside the number of obstacles to renewable energy production stated earlier, another major issue is, the lapse of produced renewable energy storage through batteries which experts say leads to the loss of substantial amount of energy. This raises sustainability concerns.

Pumped Storage Hydropower Technology to the Rescue

According to Regenbiomass,Inc.,one of the leading energy research and production companies in the US,the Pumped Storage Hydropower Technology is the alternative solution to storage through battery problem.

How it Works

Dr. Phil Cruver, CEO of Regenbiomass, Inc., notes, “pumped storage hydroelectricity is an effective means of storing renewable energy. When the wind blows and the sun shines, water is pumped from a lower elevation reservoir into a higher elevation reservoir and when there is no sun or wind, the water is released for driving a turbine producing electric power”.

“Energy is stored in the form of gravitation potential from the weight of the water pumped to an above ground reservoir and when there is no sun or wind, the water is released back into the aquifer reversing the operation of the motor pump to generate electricity as a turbine generator.

“With utility load balancing of renewable solar and wind energy development projected to skyrocket in the coming years, aquifer pumped storage presents a clean, sustainable, and scalable solution for the energy storage conundrum faced by the renewable energy industry.” intimated Dr.Cruver.

It’s Benefits Over Battery Storage Technology

According to Dr. Phil Cruver, the technology has many benefits over battery storage which is typically limited to about 2-4 hours for backup power with limited lifetime due to number of charging cycles which are exceeded in about 3 years. Moreover, lithium batteries are subject to material and mineral shortages and disposal problems

A couple of US government incentives he says, has spurred research interest in the technology across the country.

The company takes cognizance of the important role ground water aquifers rich areas in US and other parts of the world including Africa, could play in ensuring sustainability in renewable energy production and storage. . .

Regenbiomass in its research endeavours has successfully piloted intercropping of Paulownia and Avocado trees in marginalised lands in desert areas in the US.It is a changer that promises to have both agriculture as well as, carbon sequestration benefits for addressing climate change impact.

Pumped Storage Hydropower Technology in other Parts of the World

Across the world, interest in pumped storage hydropower is also booming. In 2022, Switzerland completed an installation with the same energy storage capacity as 400,000 car batteries. Spain, Bulgaria, and Finland have all launched similar projects in the last few months alone.

“Pumped storage hydropower is a mature technology”, says Professor Sebastian Sterl of the Free University of Brussels in Belgium, where he specializes in hydropower. “We know how much it costs and produces. There’s also very little loss of energy.”

The Pumped Storage Hydropower Technology is a must for Africa.Fortunately Northern and Sahel Africa regions according to Regenbiomass,have some of the world’s largest aquifers that could be leveraged for storage of renewable energy as an alternative to batteries.

July 2, 2024

Local Content in Oil & Gas: A Catalyst for Shared Growth in Namibia

JOHANNESBURG, South Africa, July 2, 2024/ — In the oil and gas industry, local content refers to the development of local industries, workforce and resources to support the operations of international oil companies (IOC) within a country. For Namibia, fostering ‘Namibian Content’ can significantly enhance economic growth, social development and technological advancement.

Leveraging Local Content to Drive Economic Growth

Local content policies can be a catalyst for economic growth by ensuring that a significant portion of the industry’s value chain is retained within the country. By promoting the use of local goods, services and labor, these policies can create a myriad of job opportunities for Namibians. This not only fosters employment but also stimulates the development of ancillary industries, such as manufacturing, logistics and services, which support the oil and gas sector.

Local content also contributes to the diversification of Namibia’s economy. By developing industries related to the oil and gas sector, the country can reduce its reliance on oil revenues and build a more resilient economy.

Additionally, local content promotes the development of skills and the transfer of knowledge to the local workforce. By involving Namibians in various aspects of the oil and gas industry, from exploration to production, they gain valuable expertise and experience.

Such policies also promote increased local participation and ownership in the oil and gas industry, while driving various social development through mandated investments in community infrastructure, education, healthcare and other social programs, thereby improving the quality of life for Namibians. Meanwhile, local content policies can also spur technological advancement and innovation.

When local firms are part of the industry’s supply chain, they are often required to meet international standards, which drives them to improve their technologies and processes. This can lead to a broader technological base in Namibia, benefiting other sectors of the economy as well.

Successfully Implementing Local Content

Successfully implementing local content policies requires various proactive measures. These include capacity building and investing in developing a skilled local workforce and capable local companies; streamlining regulatory processes to enhance compliance and boost investor confidence; and addressing bureaucratic challenges to ensure smoother operations for both international and local companies.

Additionally, providing financial incentives and investment opportunities that empower local firms; adapting to market dynamics to encourage local companies to embrace the global nature of the oil and gas industry; and ensuring high quality and standards across the market.

Continuous improvement and training programs can also help local products and services achieve the high standards required, boosting their reputation and competitiveness on the global stage. By concentrating on these key areas, local content policies can be successfully implemented, leading to sustainable growth, innovation and a thriving local industry.

Lessons Learnt from Global Partners

Lessons learnt from resource-rich nations across the world can strengthen Namibia’s local content implementation. Norway, for example, provides a prime example of how local content can lead to substantial skills development. The country’s local content regulations required IOCs to partner with Norwegian firms and train local employees.

As a result, Norway developed a highly skilled workforce and a robust oil services industry, which now competes globally. The country has consistently maintained a high employment rate within the oil and gas sector, with approximately 250,000 jobs supported by the industry.

In Angola, local content regulations have contributed to social development through initiatives like the Angolanization policy, which prioritizes hiring and training local citizens. The oil companies operating in Angola are required to invest in community projects, leading to improved healthcare facilities, schools and infrastructure in oil- producing regions.

For example, investments in the health sector have led to the construction of over 100 health centers in the country. In Brazil, the implementation of local content requirements led to the growth of the domestic shipbuilding industry, creating over 30,000 jobs and reducing the country’s dependency on foreign vessels.

Similarly, in Ghana, local content policies in the oil sector have resulted in increased employment, with over 7,000 direct jobs created since the inception of the policies, and the establishment of new businesses to service the industry.

Additionally, Nigeria’s local content law has significantly increased local participation in the oil and gas industry. The Nigerian Content Development and Monitoring Board (NCDMB) has overseen the growth of indigenous oil companies and service providers, ensuring that a significant portion of the industry’s value is retained within Nigeria. The NCDMB’s efforts have resulted in an increase in local participation from 5% to over 30% in the past decade.

Meanwhile, Malaysia’s approach to local content has facilitated economic diversification. The country’s Petronas-led initiatives ensured that local companies were integrated into the oil and gas supply chain, leading to the growth of Malaysia’s engineering and construction sectors. Today, these sectors contribute significantly to the national economy, with the oil and gas industry supporting over 200,000 jobs.

Qatar has also implemented local content policies to ensure that its citizens benefit from the country’s substantial oil and gas wealth. The country’s Qatarization policy aims to increase the number of Qatari nationals employed in the energy sector to 50%.

The United Arab Emirates (UAE) has also seen success with its local content initiatives. The In-Country Value (ICV) program, launched by Abu Dhabi National Oil Company, aims to support local businesses and create jobs for UAE nationals. The ICV program has driven over $20 billion back into the UAE economy and created thousands of jobs for Emiratis.

As such, the benefits of local content in Namibia’s oil and gas sector are manifold. By focusing on economic growth, skills development, economic diversification, increased local participation, social development and technological advancement, Namibia can ensure that its oil and gas resources are a blessing for its population of three million.

Distributed by APO Group on behalf of African Energy Chamber.

SOURCE
African Energy Chamber

July 2, 2024

Strait of Malacca becomes oil market’s largest transport artery

The transit of oil and petroleum products through the Strait of Malacca, which is located between the Malay Peninsula and the Indonesian island of Sumatra and connects the Indian and Pacific oceans, rose by 800,000 barrels per day (bpd) in 2023, reaching 23.7 million bpd.

According to the U.S. Energy Information Administration (EIA), the Strait of Malacca has surpassed the Strait of Hormuz in terms of transit volume of raw materials, as the amount of oil and petroleum products transported via the Strait of Hormuz last year totalled 20.9 million bpd

The other 40% comes from four groups of suppliers: Russian producers who transport oil and petroleum products to the east (exports from ports in the European part of the Russian Federation) and to the west (supplies from Sakhalin); the United States, which increased its total exports of oil and petroleum products by almost 20% (from 8.6 million bpd to 10.2 million bpd) in 2021–2023; African countries, which have been reducing their transit volumes through the Strait of Malacca in recent years due to lower production in Angola and Nigeria; and Malaysia and Indonesia, regional oil producers (with a total output of 1.2 million bpd in 2023), which use the Strait of Malacca not only for exports, but also for domestic shipping.

The transit of oil and petroleum products through the Strait of Hormuz dropped by 200,000 bpd (to 20.9 million bpd) in 2023. In addition to the OPEC+ deal, under which Saudi Arabia reduced its oil and gas condensate production by 800,000 bpd (to 11.4 million bpd) in 2023, this was caused by the use of transportation infrastructure bypassing the Strait of Hormuz.

For instance, the UAE has an oil pipeline with a capacity of 1.5 million bpd, through which oil is transported to the port of Fujairah, a major regional hub for oil and petroleum products located on the coast of the Gulf of Oman. Meanwhile, Saudi Arabia uses the East-West oil pipeline designed to transport oil to the coast of the Red Sea.

There wasn’t enough time for the Red Sea conflict to seriously affect transit volumes last year: the volume of oil and petroleum transportation through the Bab el-Mandeb Strait adjacent to the Red Sea has gone from 5.4 million bpd in 2021 to 7.5 million bpd in 2022 to 8.6 million bpd in 2023.

As a result, the year 2023 saw the Red Sea become the third-largest transport artery in the oil market, ahead of the Cape of Good Hope (6.0 million bpd), the Danish Straits (4.9 million bpd), the Panama Canal (2.1 million bpd) and Turkey’s Dardanelles (3.4 million bpd).

However, this list is going to change in 2024 due to the aforementioned conflict in the Red Sea. For instance, according to the IMF and Oxford University, the number of tankers with oil, petroleum products and liquefied natural gas (LNG) using the transit route across the Red Sea has fallen by nearly 60%, from 835 in April 2023 to a mere 342 in April 2024.

SOURCE

THE GLOBAL ENERGY ASSOCIATION

PHOTO: GEA/ICS-SHIPPING

June 29, 2024
Bringing Finance to African Energy Projects: AEC to Host Energy Players in Europe’s Financial Capital

Global investment in upstream oil and gas is set to reach $570 billion in 2024, showing a 7% rise compared to 2023 expenditure. Of this, 33% is expected to be directed towards frontier fields, presenting a strategic opportunity for undeveloped oil and gas markets in Africa.

With lack of investment representing one of the biggest challenges to project development across the continent, the African Energy Chamber (AEC) will host a networking reception on July 11 in London – Europe’s financial capital.

Taking place at the Four Seasons Hotel London at Park Lane from 17:00 to 21:00, the reception bridges the gap between European financiers and African energy projects, promoting synergies, deals and future collaborations.

Despite holding some of the largest untapped oil and gas resources worldwide, Africa is faced with an energy crisis, with 600 million people currently living without access to electricity and 900 million people without access to clean cooking solutions.

The African Development Bank estimates that to address this crisis, the continent requires between $40 billion and $70 billion in annual investment.

Presently, Africa receives on average $35 billion in global financing for fossil fuels and clean energy projects, with merely 5% of global energy investment directed towards the continent.This showcases a clear investment gap and a strategic opportunity for European funders and project developers.

With over 125 billion barrels of proven crude oil, 620 trillion cubic feet of natural gas and abundant opportunities in solar, wind and geothermal, Africa continues to attract investment from some of the world’s biggest players.

The continent’s greenfield upstream spending, for example, is projected to reach $37 billion by 2025 and $50 billion by 2050, with companies eager to unlock the full potential of undeveloped oil and gas. Specifically, a strong slate of London-based oil and gas firms are driving a wave of project developments across the continent.

These include energy major bp, who is developing Senegal and Mauritania’s inaugural LNG project – the Greater Tortue Ahmeyim (GTA) facility – and Mozambique’s Coral Sul FLNG project. GTA is on track for first production in 2024 while bp delivered first gas from Coral Sul in 2022, marking the first LNG cargo for the country.

Additionally, energy major Shell is making strides towards opening up the Orange Basin in Namibia. The company’s Graff-1 discovery in 2022 was play-opening and Shell has made an additional five discoveries since then. The company is investing 25% of its deepwater exploration budget in the country this year.

Additionally, independent hydrocarbon producer Perenco inaugurated the $50 million Batanga LPG plant in 2023 and is developing the $1 billion Cap Lopez LNG terminal in Gabon.

The company is also investing in shallow-water and marginal assets across the continent, acquiring Eni’s core assets in the Republic of the Congo in June 2023 for $300 million.

Oil and gas company Tullow Oil anticipated commercial oil production in Kenya in 2028 while transitional energy company Chariot oil and gas recently signed a gas commercialization agreement with Vivo Energy in Morocco.

These developments – all led by London-based companies – represent just some of the many underway across the continent.

The AEC Reception builds on these deals to promote new investment in African energy. Taking place in London – both Europe’s financial capital and its biggest stock market – the reception is all about connecting companies to opportunities.

The total value of companies listed on the London Stock Market reached $2.18 trillion in June 2024, highlighting a commercial and strategic opportunity for the reception and African energy projects.

The AEC London Reception takes place ahead of the continent’s largest energy event, the African Energy Week (AEW): Invest in African Energy conference, scheduled for November 4-8 in Cape Town.

Under a mandate to make energy poverty history by 2030, the event unites global investors and technology providers with African energy projects, with discussions tailored around unlocking high returns and generating mutually beneficial opportunities.

Participants at the AEC’s London Reception have the chance to gain exclusive insight into AEW: Invest in African Energy 2024 while engaging with a suite of African stakeholders

This year’s AEW: Invest in African Energy will host the African Energy Finance Summit – a platform that galvanizes financial support for African energy projects, while promoting deal-signing and partnerships.

Hosted in partnership with multilateral financial institution the African Export-Import Bank and global market intelligence firm S&P Global Commodity Insights, the summit brings capital to Africa with the aim of making energy poverty history by 2030.

Don’t miss the chance to be at the forefront of Africa’s energy transformation. Register for the AEC’s London Reception at https://energychamber.org/london-roadshow/ or contact register@aecweek.com.

“We are proud to offer the State of African Energy Outlook for download.The report emphasizes the pivotal role of knowledge and foresight in navigating the complex and dynamic energy landscape and equips stakeholders with the insights they need to make informed decisions in the year ahead.

As we venture into 2024 we are oon the brink of making substantial strides in overcoming energy poverty throughout Africa and moving towards a more sustainable energy future”-NJ Ayuk,Executive Chairman of the AEC.

SOURCE

AFRICA ENERGY CHAMBERS

June 26, 2024
A Model for African Producers: Wing Wah’s $2B Integrated Energy Project to Bolster Resource Monetization in the Republic of the Congo

JOHANNESBURG, South Africa, June 21, 2024/ — The Republic of the Congo has a goal of increasing hydrocarbon production to 500,000 barrels per day (bpd) and projects such as Wing Wah Oil Company’s Bango Kayo development will serve as catalysts for meeting this objective.

The project is a strong example for how integration and scalability can be utilized to not only monetize resources but maximize production beyond the lifecycle of initially-tied in blocks.

The African Energy Chamber (AEC) – the voice of the African energy sector – conducted a tour of Wing Wah’s project near Pointe Noire during a working visit to the country this week. A strong advocate for the development of oil and gas in Africa, the AEC believes that hydrocarbons are the solution for making energy poverty history by 2030.

Project’s such as Wing Wah’s in the Republic of the Congo are not only a testament to the role international partnerships play in developing African oil and gas resources but to the potential for large-scale, integrated developments across the continent. The Ministry of Hydrocarbons – led by Minister Bruno Jean-Richard Itoua – and the country’s NOC Société Nationale des Pétroles du Congo – led by Managing Director Maixent Raoul Ominga – have provided the much-needed support that companies such as Wing Wah need to develop innovative projects, and the AEC commends them for the progress made thus far.

Bango Kayo: An Innovative Oil & Gas Venture

The Bango Kayo conventional oilfield is a producing block operated by Wing Wah, which features 237 wells that have been drilled to date. Currently, the field is producing 45,000 bpd and is nearing its peak production of 50,000 bpd. In addition to oil production, Wing Wah is implementing a phased expansion and development approach to monetize previously-flared gas resources.

Over three phases, the project will progressively increase gas treatment and valorization capacity, producing LPG, butane and propane, primarily for the domestic market. Excess LPG will be exported regionally.

The project incorporates the development of three trains. The first has a capacity of one million cubic meters per day (mcm/d), while the second and third trains will have a capacity of two mcm/d each. The second and third trains are anticipated to come online by March 2025 and December 2025, respectively, and will bring the total capacity of the project to five mcm/b. In April 2024,

Wing Wah signed an amended production sharing contract with the government for the Bango Kayo block, signaling the start of the expansion of the project.

Integration: A Tool for Maximizing Efficiency and Scalability

Wing Wah’s project in the Republic of the Congo is underpinned by a focus on integration and scalability. The structure of the facilities has been planned in a way that prioritizes efficiency, reduces emissions and promotes scalability.

Specifically, the facility enables Wing Wah to tap into stranded gas that would have otherwise been flared, thereby providing opportunities for monetization and the utilization of gas across the oil production cycle. Unlike traditional LNG infrastructure which faces challenges as blocks mature and feedstock declines, the scalable design of Wing Wah’s project creates the opportunity to maximize production – both at existing blocks and new concessions.

Additionally, each unit at the facility has its own power generation solution which are scalable in increments of 2 MW. Currently, 20 MW is installed, with generators utilizing gas from associated blocks. As production increases, so can power generation, thereby ensuring scalability and durability.

Meanwhile, the water management system is also integrated into the project in a way that promotes environmentally-friendly operations. Water treatment is conducted on-site and distributed back into the ocean once treated.

As such, the facility provides a quintessence of oil and gas integration. The development approach features fast construction, fast commissioning and quick, efficient operations. Wing Wah are using state-of-the-art equipment and have an organized layout of the overall infrastructure and storage.

This is expected to boost efficiency at the project site while ensuring the project plays an instrumental role in processing oil and gas for the long-term.

Prioritizing Local Community Development

In addition to project efficiency, the Bango Kayo development has been constructed in a way that takes into account the needs of local communities. All of the processing facilities have on-site accommodation, with senior management on-call to ensure a constant review of work. Currently, 3,300 people are employed at the project, with 90% of the workforce Congolese.

Meanwhile, excess power generated at the project site can be distributed to local communities, providing a clean and reliable source of power. Water management also takes into account regional demand, with surrounding communities benefiting from a clean source. This structure not only brings tangible benefits to local communities but reducing emissions across the project’s operational cycle.

“Wing Wah’s integrated project in the Republic of the Congo is a model that can and must be replicated in other oil and gas producing nations in Africa. The project’s focus on scalability ensures production is not limited to specific blocks, but rather, infrastructure can be easily tied into new concessions as exploration ramps up across the country.

Through gas-fired power generation, innovative water management and a long-term approach to production, the project is poised to unlock a wealth of benefits for the country,” states NJ Ayuk, Executive Chairman of the AEC.

Distributed by APO Group on behalf of African Energy Chamber.

SOURCE
African Energy Chamber

June 22, 2024
Energy for Growth in Africa Initiative Unveiled

By.Mohammed A.Abu

The decades long delay in fulfilment of pledges made by the Global South towards climate change impact funding in the Global North hasn’t helped the course of the global transition from fossil fuels derived energy to renewable energy as global warming and climate change impact bites deeper.

Indeed, lack of external affordable funding for renewable energy projects in both the public and private sectors of countries in the Global South with particular reference to Africa, the world’s most energy poor continent, has since given rise to the legitimate issue of energy transition justice.

The energy for growth in Africa Initiative that was unveiled on the sidelines of the recently held G7 Leaders Summit could be a game changer if implemented to the full.

For the details regarding the initiative, read on

“We the representatives of Canada, the Republic of Congo, Côte d’Ivoire, Ethiopia, France, Germany, Italy, Japan, Kenya, Mozambique, Nigeria, South Africa, the United Kingdom, the United States of America, and the European Union, recognize that universal access to affordable clean energy is a key factor for sustainable, resilient and inclusive economic growth and social development, as proclaimed by the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.

“It also contributes to meeting the climate goals of the Paris Agreement and to keeping a temperature limit of 1.5C within reach. Africa’s significant but largely untapped clean energy potential needs massive investments.

“We will work to accelerate investments in clean energy sources to ensure an inclusive transition which supports energy security, recognizing that a substantial proportion of people in Africa still lack reliable access to electricity and clean cooking.

“To meet these objectives and the global efforts decided upon at the 5th session of the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA5), we look forward to the launch of the G7’s ‘Energy for Growth in Africa’ initiative and to contributing to its success.

“The initiative will help develop bankable clean energy projects, attract private capital through the catalytic use of public finance and technical assistance, encourage the flow of concessional finance, and overcome barriers to investments in clean energy across Africa.

“The initiative will engage with governments, the private sector, financial institutions, multilateral development banks, and community groups. It will partner with the United Nations Development Program and the International Energy Agency.

“It will also coordinate with existing programmes, to ensure complementarity and avoid duplications, and will operate in close coordination with the G7 Partnership for Global Infrastructure and Investment”,the joint statement concluded.

SOURCE

SDG KNOWLEDGE HUB

June 20, 2024
G7 Pledges to Accelerate SDGs, Transition from Fossil Fuels This Decade

The Group of 7 (G7) leaders from Canada, France, Germany, Italy, Japan, the UK, and the US, with the EU, have wrapped up a three-day summit, united in their “steadfast commitment” to implementing the 2030 Agenda for Sustainable Development. They pledged to redouble their efforts to accelerate progress towards the SDGs, including by transitioning away from fossil fuels in energy systems in this decade.

The G7 Leaders’ Summit took place in Apulia, Italy, from 13-15 June 2024.

The 36-page Apulia G7 Leaders’ Communiqué reiterates the Group’s “enduring unity and determination to meet global challenges… as the international community confronts multiple interconnected crises.” It reaffirms the leaders’ “shared belief in democratic principles and free societies, universal human rights, social progress, and respect for multilateralism and the rule of law.

” The document further signals the leaders’ intention to support more effective, inclusive, and equitable global governance and to safeguard international peace and security while upholding “the free and open rules-based international order.”

The leaders recognize that in the context of achieving the SDGs, “reducing poverty and tackling global challenges go hand in hand.” They indicate they are “doing [their] part” to make multilateral development banks (MDBs) better, bigger, and more effective, with the World Bank boosting its lending by USD 70 billion over the next ten years.

According to the communiqué, the leaders are taking steps to address the triple planetary crisis of climate change, pollution, and biodiversity loss, including by submitting ambitious nationally determined contributions (NDCs), aligned with the 1.5°C temperature goal. They pledge to “spearhead global efforts to preserve forests and oceans, and to end plastic pollution.”

With respect to energy, climate and environment, the communiqué states the G7 “will transition away from fossil fuels in energy systems in a just, orderly, and equitable manner, accelerating actions in this critical decade, to achieve net-zero by 2050 in keeping with the best available science.

” The leaders “will operationalize these commitments” through domestic policies and actions and through “intensive efforts to reduce demand for and use of fossil fuels.” They “reaffirm [their] commitment to eliminate inefficient fossil fuel subsidies by 2025 or sooner and will report in 2025 on progress made.”

At the same time, the leaders reaffirm that the transition to a net-zero economy “should be inclusive and leave no one behind,” enhance social development and economic growth, maximize benefits for local economies, and address “negative social or economic impacts that may arise from climate action.”

Other commitments articulated in the leaders’ communiqué span the areas of sustainable development, food security, infrastructure, labor and employment, health, gender equality, inclusion and disability, and migration. Global economy and finance; trade; science, technology, and innovation (STI); artificial intelligence (AI); and cybersecurity are also among the issues addressed.

The communiqué further discusses fostering partnerships with African countries and regional issues, including in relation to Ukraine and Gaza. Other areas of focus include disarmament and non-proliferation, safeguarding democratic processes, and anti-corruption, as well as countering terrorism, violent extremism, and transnational organized crime.

The G7 leaders launched several initiatives, including the Apulia Food Systems Initiative (AFSI), the Energy for Growth in Africa initiative, the G7 Coalition to Prevent and Counter the Smuggling of Migrants, and the G7 Working Group on Transport Supply Chains.

Other announcements made include:

The leaders will unlock at least USD 20 billion over three years in investments to boost women’s empowerment.
The leaders intend to launch “an action plan on the use of AI in the world of work and develop a brand to support the implementation of the International Code of Conduct for Organizations Developing Advanced AI Systems,” welcoming the Italian Presidency’s decision to establish the AI Hub for Sustainable Development, in collaboration with the UN Development Programme (UNDP).

The leaders commit to establishing a G7 Working Group on Fusion Energy.

The G7 leaders were joined by the leaders from Algeria, Argentina, Brazil, India, Jordan, Kenya, Mauritania, Tunisia, Türkiye, and the United Arab Emirates (UAE). The President of the European Council and the President of the European Commission represented the EU. [G7 Italia 2024] [SDG Knowledge Hub Story on G7 Hiroshima 2023]

SOURCE

SDG KNOWLEDGE HUB

June 20, 2024
Following First Oil Production, Senegal’s Minister of Energy, Petroleum and Mining Joins African Energy Week (AEW) 2024

CAPE TOWN, South Africa, June 19, 2024/ — Senegal’s Minister of Energy, Petroleum and Mining Birame Soulèye Diop will participate at the African Energy Week (AEW): Invest in African Energy 2024 conference – Africa’s premier event for the energy sector taking place from 4–8 November in Cape Town.

Minister Diop is expected to unpack the critical role oil and gas plays across the MSGBC region, providing insight into project developments and future investment opportunities.

Minister Diop’s participation comes as the country celebrates a new milestone in its oil and gas industry, with global energy company Woodside Energy commencing oil production from the Sangomar Field Development – Senegal’s inaugural offshore oil project.

Representing a critical step towards bolstering energy security across the MSGBC region, the start of production is poised to usher in a new era of industrialization and economic growth in Senegal. During AEW: Invest in African Energy 2024, Minister Diop will provide insight into the milestone achieved as well as the nation’s upcoming oil and gas project agenda.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECweek.com for more information about this exciting event.

Senegal anticipates rapid economic growth in 2024 – potentially reaching 8.3% – driven by first gas production from the Greater Tortue Ahmeyim (GTA) LNG project and first oil production from the Sangomar Field Development.

The Sangomar project – featuring a stand-alone FPSO facility with a capacity of 100,000 barrels per day – is developed in partnership with Senegalese national oil company Petrosen and targets 230 million barrels of crude oil reserves.

The first phase involves 23 wells – including 11 production wells, 10 water injection wells and 2 gas injection wells. To date, 21 wells have been completed. This achievement not only enhances Senegal’s oil production capabilities but also signals the country’s emergence as a player in the global energy market.

Meanwhile, the GTA LNG project – located on the maritime border between Senegal and Mauritania – has recently achieved a major milestone with the arrival of the FPSO vessel. The vessel, manufactured in China, is now being moored offshore.

The GTA development will extract gas from deepwater reservoirs using a subsea system, producing around 2.3 million tons of LNG per year for domestic use and export. The FPSO will process over 500 million standard cubic feet of gas per day (MMscf/d). The project is on track for first production this year.

In conjunction with this, Senegal plans to build a new gas-to-power plant near Saint-Louis, with an initial capacity of 250 MW, expandable to 500 MW. This plant will be supplied with gas from the GTA field as Senegal transitions into a gas-producing nation by late 2024. A 400-km gas pipeline, managed by the state-owned Senegalese Gas Network, will connect GTA to Saint-Louis, Dakar and Mbour.

The first phase involves laying a 45-km offshore pipeline and a 40-km onshore segment to link the GTA development to the new gas-to-power plant. The pipeline is expected to be completed by late 2025, with the power plant starting operations in early 2026.

Meanwhile, energy major Kosmos Energy assumed operatorship of the Yakaar-Teranga gas development offshore Senegal in November 2023. The project – targeting 25 trillion cubic feet of gas – represents one of the largest gas discoveries globally, with phase one set to produce 550 MMscf/d. With gas produced for the domestic market, the project is expected to pave the way for increased industrialization and power generation in Senegal.

“Senegal’s achievements in its oil and gas sector – marked by the first oil from the Sangomar Field Development – are a testament to the country’s commitment to harnessing its natural resources for economic growth.

This milestone not only boosts Senegal’s economic prospects but also sets a precedent for the MSGBC region, showcasing its potential to become a major player in the global energy market,” states NJ Ayuk Executive Chairman of the African Energy Chamber.

During AEW: Invest in African Energy, Minister Diop will outline these significant developments and discuss future plans aimed at ensuring energy security and driving economic growth in Senegal. Additionally, he will highlight the regulatory frameworks that provide an enabling environment for such investments, further cementing Senegal’s position as a leading energy hub in the MSGBC region.

Distributed by APO Group on behalf of African Energy Chamber.

SOURCE
African Energy Chamber

June 19, 2024