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Total’s South Africa gas discovery first step towards exploiting the country’s full hydrocarbons potential

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SA Energy Minister Jeff Radebe. Image: African Energy Chamber

The discovery, which will help open a new hydrocarbons province in South Africa, could prove the presence of billions of barrels of oil equivalent in South African waters

JOHANNESBURG, South Africa, February 7, 2019/ — Gas discovery in the offshore Outeniqua Basin speaks to South Africa’s hidden oil & gas potential; gives an opportunity for a meaningful dialogue on attractive legislation and local content development.

The African Energy Chamber (AEC) (EnergyChamber.org) welcomes the recent gas condensate discovery by Total in Block 11B/12B, 175km off the southern coast of South Africa. This is a great first step for the country which still relies on imports of oil and gas despite the great reserves believed to be in its soil and waters.

The discovery, which will help open a new hydrocarbons province in South Africa, could prove the presence of billions of barrels of oil equivalent in South African waters, which will undoubtedly change the course of the country’s economy and help reduce dependency on imports.

“The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” declared NJ Ayuk, Executive Chairman at the Chamber.

“We believe South Africa holds the potential for many more such discoveries, and the time has come to have a meaningful conversation on local content development so the development of the industry benefits all South African workers and contractors across the value-chain and creates jobs for the communities.”

The gas discovery is a timely one as the South African government is currently working on a new legislation separating oil and gas from traditional minerals, and has released last year a new Integrated Resource Plan (IRP 2018) which ambitions to install an additional 8,100MW of gas-to-power capacity in South Africa by 2030.

It further echoes increased engagement of the South African government with the African and global oil industry. Since being appointed Energy Minister in 2018, Jeff Radebe has been leading a strong South African outreach to oil markets in Africa like Nigeria, Equatorial Guinea, Angola, South Sudan, many middle eastern producers and attending meetings of the Organization of Petroleum Exporting Countries (OPEC) in Vienna and seeking deals for state-owned South African companies such as the Central Energy Fund and PetroSA.

“Oil companies want to see leadership and sound governance wherever they invest,” added NJ Ayuk. “With South Africa demonstrating a commitment to reforms and the creation of an enabling environment for business, the oil industry is confident that the country can attract the investment needed.”

Distributed by APO Group on behalf of African Energy Chamber.

Oil and Gas

Egypt to establish $43B oil production, refining projects in Assiut

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CAIRO – 17 July 2019: Investments of the to be established projects in field of oil production and refining in Assiut governorate are estimated at LE 43 billion, according to official sources in the petroleum and mineral resources sector.

The sources clarified to Egypt Today that these investments include the implementation of a unit for the production of high-octane gasoline and a complex for the production of gasoline and diesel.

The Ministry of Petroleum is working on the implementation of new projects in the field of refining and manufacturing in Upper Egypt as fast as possible to meet its needs of petroleum products, they added.

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In March, Petroleum Minister Tarek el-Molla said that his ministry is working on a strategy to upgrade the petrochemical industry and complete the expansion plans, which target implementing four new projects in the coming years at a total investment of $1.5 billion.

Molla announced earlier that Egypt aims at attracting investments of $10 billion in the petroleum sector during the current year.

Previously, an official source at the Petroleum Authority said that the volume of joint foreign investments that were pumped during 2018 in the petroleum sector recorded $5.7 billion.

The source clarified that $3.2 billion were invested in operations to explore oil and gas, in addition to developing fields, adding that the operating cost reached $1.6 billion.

Additional reporting Marwa al-Ghoul 

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Oil and Gas

SPDC JV Infrastructure Spend In Rivers State Hits N17 BILLION

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The funding, since the GMoU concept took off in 2006, has enabled the 19 clusters in Rivers State to embark on projects covering health, education, water and power supply improvement, sanitation and infrastructure development. Under the terms of the GMoU, SPDC and its joint venture partners provide secure five-year funding for communities to implement development projects of their choice, which are managed by Cluster Development Boards under the guidance of mentoring NGOs. Currently there are 39 active GMoU clusters in Rivers, Delta, Bayelsa and Abia States and since inception in 2006 a total of $239 million (N44.36 billion) has been disbursed to these clusters to fund development projects.

“The success of the GMoU initiative has proved what could be achieved when government, international oil companies, communities and NGOs worked together for the common good.,” said SPDC’s General Manager, External Relations, Igo Weli at a presentation of the 2019 edition of the Shell in Nigeria Briefing Notes to journalists in Port Harcourt on Friday.

Shell in Nigeria Briefing Notes is an annual publication detailing the activities of the business interests of the global energy giant in Nigeria covering SPDC, Shell Nigeria Exploration and Production Company, and Shell Nigeria Gas.

On another level of social investment in Rivers State, Weli listed the Community Health Insurance Scheme (CHIS), which was established in 2010 in partnership with the Rivers State Government, as an SPDC JV flagship project that delivers affordable integrated health care to beneficiaries. Clients in the scheme pay N10,000 per annum which covers about 95% of the people’s primary and secondary health care needs including child birth, seizure disorders, diabetic and ophthalmic care at the Obio Cottage Hospital. “10 other hospitals in Rivers State also enjoyed ‘robust health intervention scheme by SPDC JV.”

In education, he cited the establishment of the first centre of excellence in Marine Engineering and Offshore Technology at Rivers State University in Port Harcourt established in 2017 which runs an 18-month Master’s and Diploma programmes in Marine Engineering, Naval Architecture as well as Offshore and Subsea Engineering. This, he said, was in addition to the many SPDC JV scholarship schemes which date back to the 1950s.

In enterprise development, SPDC JV has trained more than 460 young men and women from Rivers State under the Shell LiveWIRE programme between 2013 to 2018. The Shell LiveWIRE programme was introduced in 2003 to help young entrepreneurs to convert their bright ideas into sustainable businesses, creating wider employment and income opportunities for communities. LiveWIRE was extended to Ogoniland in 2014, with the objective of raising living standards and reducing crude oil theft through the promotion of sustainable alternative livelihoods.

Supporting Ogoni youths in sustainable alternative livelihoods is in line with one of the recommendations of the 2011 United Nations Environmental Programme (UNEP) Report for the restoration of the Ogoni environment. In 2018, 100 Ogoni youths from communities near the Trans Nigeria Pipeline participated in training with 80 top performing trainees receiving business start-up funding totalling more than $90,000 (N27.27 million). To date, the LiveWIRE programme has trained 7,072 Niger Delta youths in enterprise development and provided business start-up grants to 3,817.

To mark Nigeria’s centenary anniversary, SPDC and its JV parties donated a modern public library to the Port Harcourt Literary Society in November 2016. Equipped with books, internet access and reliable power supply, the library to which SPDC contributed around $5 million (N1.58 billion), has continued to deliver significant benefits to many residents of Port Harcourt.

On the general development of the Niger Delta, Weli noted that between inception of the Niger Delta Development Commission in 2002 and the end of 2018, Shell companies alone contributed N375.16 billion to the commission for the purpose of facilitating the rapid, even and sustainable development of the Niger Delta region into an area that is economically prosperous, socially stable, ecologically regenerative and politically peaceful.

He said, “We’re proud of our extensive social investment footprints in Rivers State, which in some cases even stretch beyond the SPDC joint venture. He noted that the responsibility for the development of communities, societies or states resides primarily with government and community stakeholders themselves. “It stands to reason therefore that abdicating that responsibility for development to the private sector either fully or substantially is, in my assessment, one of the key issues militating against sustainable development not just of Rivers State but of the Niger Delta.”

SPDC

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Oil and Gas

Sahara Group Canvasses Intra-Africa Solution For Petroleum Sector Challenges

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Malabo, Equatorial Guinea: April 5, 2019 – Executive Director, Sahara Group, Wale Ajibade, has said collaboration between financial institutions, development agencies, trading companies, National Oil Companies and other stakeholders in Africa would enhance the contribution of intra-Africa led solutions to addressing the sector’s trade and project finance challenges on the continent.

This was Ajibade’s submission as he gave a key note address on Challenges of Financing and Investing in the African Oil Industry at the ongoing African Petroleum Producers Organization (APPO) CAPE VII Congress and Exhibition in Malabo, Equatorial Guinea.

“Our collective mandate and deliverable should be to prioritize African solutions for African challenges. Our businesses should be given viable incentives to enable them participate specifically in this industry; our Development and Commercial Banks should have a marked incentive, or lower funding rates, for African Companies participating in this space. We must place the utmost value on capacity building and skilled knowledge transfer and training,” he told delegates at the conference.

Oil ministers, top-level executives and the continent’s opinion leaders at the conference reinforced the importance of cooperation among African countries as the most sustainable avenue to achieve shared ‘Prosperity in the African Petroleum Industry’.

Pearl Uzokwe (third from right) photographed with delegates at APPO 2019
Pearl Uzokwe, Director, Governance and Sustainability, Sahara Group (third from right) photographed with delegates at APPO 2019

“We need to see more collaboration between African Oil producers in the future as intra African trade can be as large as international trade. We must promote intra-regional trade and encourage government to government contracts underlined by the private sector. This is a cause Sahara Group is passionate about and we will continue to lead the narrative.”

Ajibade said the prospects for large-scale projects on the continent had set the tone for increased funding requirement, most of which would be in the area of trade and project financing. “Final Investment Decisions (FIDs) in Southern/ East Africa of approximately US$ billion 70-80 are expected over the next few years. Overall, key projects in Africa are expected to contribute a further 1.1 million barrels of oil equivalent per day and around 9.4 billion cubic feet per day to global production by 2025. Planned and on-going refinery developments in Uganda and Nigeria as well as terminal storage facilities and domestic gas infrastructure will create significant financing and investment requirements for the African oil and gas sector in the near term.”

He explained that challenges for trade and project finance transactions include government subsidies on oil products, significant currency fluctuations, limited local banking capacity, letters of indemnity (LOIs), banking compliance procedures, political influence, high lending cost and uncertain government regulation. “In recent years, a number of previously active European commercial banks have either reduced their investments in Sub-Saharan Africa, or have pulled out of the region altogether and at the same time; the participation of African commercial banks in trade finance has shown signs of decreasing. It is a sad reality that less than 10% of these products are financed using local financial institutions in the various African countries.”

Ajibade said the continent can address these challenges through government-government collaboration, ensuring steady regulatory policies, boosting local banking capacity and promoting stronger partnerships between development banks and the private sector.

“We need a collective and deliberate change in mentality that will drive government policies, Industrial and Development Banks policies, Commercial Banks initiatives and most importantly, the businesses and companies operating with the African Oil and Gas space. There should be deliberate policies by the government and the Central Banks to facilitate trading across Africa through hedging tools for foreign currency, lower cost of funds, and mechanisms to issue LOIs, among others,” he added.

– Sahara Group

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