Somalia Keen To showcase Untapped Oil Potential

Following the signing of a new Petroleum Law and Revenue Sharing Agreement in May of this year, as well as the unveiling of its first ever offshore licensing round (15 blocks covering 75,000 sq. km), the Horn of Africa nation is keen to show the world that it is open for business.

The law breathes new life into a dormant Somali oil and gas sector – several concessions were awarded to the majors in the late 1980s, but Civil War erupting in the country led to a force majeure declaration. Since the government collapse in 1993, insecurity and lack of infrastructure have largely rendered the region a no-go for western companies, leaving local warlords and militias to claw out territories.

Almost 30 years later, Somalia is ready to shake-off past woes and attract global participation. This effort is being spearheaded by Minister of Petroleum and Mineral Resources, Abdirashid Mohamed Ahmed, who recently commented, “this year is a landmark in the development of Somalia’s natural resources…the Ministry has worked successfully with the federal member states to create an equitable and transparent framework to develop natural resources for the greater good of Somalia”.

As part of its efforts, Somalia is expected to honour most legacy contracts. An agreement has already been reached with Shell and ExxonMobil to settle rental fee payments for offshore blocks (part of a dormant joint venture). However, it does not seem that either company is rushing back into the country, with Shell stating that “the payment does not affect force majeure status, which remains in place”.

Despite this, Mr Ahmed has reason to hope that investment will begin to flow into Somalia. Seismic surveys conducted by British companies Soma Oil & Gas and Spectrum Geo suggest the country has promising offshore oil reserves of up to 100 billion barrels. What’s more, recent oil finds in Uganda and huge gas discoveries offshore Tanzania and Mozambique mean that oil companies have flocked to East Africa in recent years – Somalia could well become a beneficiary of this trend.

Mr Ahmed is attending Africa Oil Week 2019 in Cape Town this November. He will use this opportunity to lay out the future vision and objectives of the Somali national oil and gas sector in front of financiers and operators.

The summit’s Director of Government Relations, Paul Sinclair, commented, “we are working closely with the Minister to ensure that the global private sector benefits from exclusive opportunities going live in a Somali National Showcase at Africa Oil Week”.

Noble Energy Makes New Equatorial Guinea Petroleum Discovery

Noble Energy makes oil discovery in Block I, located in Equatorial Guinea's offshore sector; The well was drilled to a total depth of 4,417 meters and is expected to produce first oil in October 2019; As a champion of oil and gas development in Africa, Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima will lead the conversation on the future of natural gas on the continent at the Africa Oil & Power event in Cape Town on October 9-11 2019.

Equatorial Guinea's Ministry of Mines and Hydrocarbons (MMH) is pleased to announce that U.S. oil and gas company Noble Energy has made a discovery in offshore Block I.

The Aseng 6P well was drilled to a total depth of 4,417 meters. Noble is currently in the process of completing the 400-meter horizontal section of the well and, using existing Aseng field infrastructure, is expected to produce oil from October 2019.

"We are excited to announce this discovery which could not have come at a more opportune time. We have been dedicated to developing our resources to build a better economy and create opportunities for our people and, it seems we are gaining momentum," said Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima.

He added that: "It's always been our firm belief that our country is relatively underexplored. When companies drill offshore Equatorial Guinea, their likelihood for a discovery is real. Noble Energy and partners are longtime friends of Equatorial Guinea and it is only fitting that we should build on our oil and gas development efforts with them right by our side. This is great news for our economy, jobs creation and local content development."

The Aseng field consists of five subsea wells connected to a FPSO vessel. With a 40 percent interest, Noble Energy is operator. Other partners include Atlas Petroleum (29 percent), Glencore Exploration (25 percent) and Gunvor (6 percent).

This year, Equatorial Guinea kicked off its endeavor to become Africa's premier gas hub with the signing of definitive agreements with the Alen field partners and Punta Europa Plant owners to monetize gas from the Noble Energy-operated Alen field – a project known as the Gas Megahub.

As the country develops its gas resources, Minister Obiang Lima said earlier this year that it was also targeting a final agreement on its 2007 joint deal with Cameroon to develop gas condensate discoveries Yoyo and Yolanda on their maritime border.

Minister Obiang Lima alongside Antonio Oburu, General Director of Equatorial Guinea's national oil company GEPetrol, will lead a delegation of companies active in Equatorial Guinea to the Africa Oil & Power Conference and Exhibition in Cape Town, South Africa on October 9-11 2019. Joining the minister will be BANGE, Centurion Law Group, Noble Energy, Marathon Oil, Golden Swan, Baker Hughes, Kosmos Energy, Trident Energy, Tullow Oil, Elite Construcciones, Schlumberger, NAHSCO, Hexagon and NALCO Champion.

GE Completes Songas Ubungo Power Plant Turbine Upgrade

GE and Songas Tuesday announced they have successfully completed upgrades to the entire GE fleet of three LM6000PA and one LM6000PC gas turbines at the Songas Ubungo Power Plant in Dar es Salaam, Tanzania.

These technology upgrades will increase the power plant's efficiency and reliability, enabling Songas to maintain the plant in the most economical way possible.

"We are very pleased with GE's execution because it was completed safely and ahead of schedule, with great commitment and consistency across the four LM6000 units," said Nigel Whittaker, managing director, Songas Ltd.

"The successful completion of this project not only improves Songas' performance levels, but through the additional reliable supply of electricity, continues to contribute to the economic development of the country, making a significant difference in the lives of Tanzanians."  

GE's upgrade of the four LM6000PA gas turbines to LM6000PC significantly improves the current LM6000 fleet.

GE's SPRINT (SPRayINTercooling) technology, installed on two of the four units, increases gas turbine performance, improves power flexibility, enhances the combustion system, improves fuel efficiency, extends maintenance intervals for the combustor, hot section and major overhaul and lowers maintenance costs.

"Over the past 15 years, Songas and GE have collaborated on the Ubungo power plant, and we're excited to help enhance operations, increase capacity, and deliver the principles of safety first, quality foremost and operational excellence," said Elisee Sezan, CEO for GE's Gas Power business in sub – Saharan Africa.

"Our goal is to bring long-term value to our customers and their power plants, like Songas, to maintain it in the most efficient way possible and, ultimately, contribute to Tanzania's economic and social development."

The Ubungo power plant provides more than 20 percent of the grid-connected power in Tanzania. It includes four GE LM6000 gas turbines, which have been operational since 2004. In 2017, GE signed a multiyear agreement to upgrade gas turbines at the Songas Ubungo power plant in Tanzania. 

GE's LM6000-PF dual fuel gas turbines power the 150-MW Kinyerezi power plant, which also has a multiyear agreement with GE for the long-term, reliable operation of its power plant.

Last year, GE achieved its 100th power plant installation in sub-Saharan Africa and has an installed base of over 300 turbines in up to 22 countries in the region.

Petroleum Ministers To Discuss Future Of Gas Devt In Africa

Equatorial Guinea’s Minister of Mines and Hydrocarbons H.E Gabriel Obiang Lima will speak at Africa Oil & Power 2019.

A champion of the gas industry and African energy investment, Minister Obiang Lima this year led the Year of Energy initiative, in which Equatorial Guinea launched major domestic and pan-African natural gas projects.

The Minister, alongside Antonio Oburu, General Director of Equatorial Guinea’s national oil company GEPetrol, will lead a delegation of African petroleum ministers at the fourth annual Africa Oil & Power (AOP) Conference and Exhibition in Cape Town, South Africa at the CTICC1 on October 9-11.

The Ministry of Mines and Hydrocarbons and GEPetrol will be accompanied by a large delegation of companies active in Equatorial Guinea, including BANGE, Centurion Law Group, Noble Energy, Marathon Oil, Golden Swan, Baker Hughes, Kosmos Energy, Trident Energy, Tullow Oil, Elite Construcciones, Schlumberger, NAHSCO, Hexagon and NALCO Champion.

Welcoming the delegation and speaking to Minister Obiang Lima’s support of the Africa Oil & Power theme for 2019 #MakeEnergyWork, Africa Oil & Power CEO Guillaume Doane said: “Equatorial Guinea is a leader in Africa in strengthening and growing the energy value chain through gas monetization and trade.

Today it is championing gas cooperation between African countries and launching exciting initiatives that will revolutionize the African gas sector. AOP is proud to be a part of this important story and to promote Equatorial Guinea’s projects at AOP 2019.”

This year, through the Year of Energy initiative in collaboration with Africa Oil & Power, Minister Obiang Lima has campaigned to promote gas developments on the continent as a driver of economic growth.

Equatorial Guinea has made significant steps toward its goal of becoming a regional energy hub, with advancements including the launch of the 2019 oil, gas and mining licensing round offering up 24 offshore and two onshore blocks; the signing of definitive agreements for the monetization of gas from the Equatorial Guinea’s Alen unit in the Gas Megahub project; and – in a first for the region - the inauguration of an LNG storage and regasification plant in the mainland region of Equatorial Guinea as part of the LNG2Africa project.

“Gas has the potential to transform the African energy industry. In Equatorial Guinea, we have made the decision to focus our efforts on gas developments as part of the government’s priority in developing a regional Gas Megahub. We want to lead by example and showcase the opportunities the monetization of gas resources can create for our economy,” said Minister Obiang Lima.

He added: “Our objective is clear. We want to build infrastructure, promote intra-African cooperation, develop a sustainable economy and improve our local content and, with gas, all of this is achievable in the near future.”

As part of the 2019 Year of Energy, Equatorial Guinea kicked off the year as host of the APPO Cape VII Congress and Exhibition - the first of a series of events to be hosted in Malabo during the year. Upcoming events include the Oil & Gas Meeting Day and the 5th GECF Summit of Heads of State and Government and 2nd International Gas Seminar.

African Liquefied Natural Gas To Attract $103bn In 2019

Africa is an exciting frontier in the global natural gas sector. The continent holds 7.1 percent of proven global gas reserves and is expected to contribute nearly 10 percent of global production growth through to 2024.

On the demand side, Africa's large, urbanized and industrialized societies of the future will require reliable and sustainable power generation.

With greenfield investments in Nigeria, Egypt, Mozambique and elsewhere reaching nearly $103 billion this year, it is clear that liquefaction is viewed as the most profitable strategy for realizing Africa's gas potential.

Record investments on the supply side

Nigeria accounts for over 50 percent of current LNG production capacity on the continent. With October 2019 seeing a final investment decision on the $12 billion expansion of the country's liquefaction plant at Bonny Island in Rivers State.

The Train 7 expansion project would increase Nigerian LNG production capacity by 35 percent, from 22 million tons per annum to 30 million. Current indications point to a positive verdict.

The twenty-year-old facility is owned and operated by a consortium which includes NNPC, Shell, Total and Eni.

In North Africa, Egypt has successfully re-established itself as an important investment destination following the downturn in the gas sector in 2014.

In the first half of 2019, the behemoth Zohr offshore gas field produced 11.3 billion cubic meters - 3.6 times more than it did in 1H2018. The success is set to continue with reports earlier this year of a new Eni discovery in the Nour North Sinai Concession.

Evaluation is ongoing but there are hopes that the new field could rival the Zohr, which would open significant opportunities for investment in new liquification plants.

In February, the Egyptian Natural Gas Holding Corporation awarded five new gas exploration concessions to Shell, ExxonMobil, Petronas, DEA and Eni in which it expects to see 20 wells drilled.

In June, Anadarko gave its final approval for a $20 billion gas liquefaction and export terminal in Mozambique. The Area 1 project is the single largest LNG project ever approved in Africa.

And, it could be closely followed by Exxon's $14.7 billion Area 4 development – FID is expected before the end of the year.

Political stability and access to East Asian markets could see Mozambique become a major global gas market over the next decade.

Investors are also paying attention to smaller projects in countries like Mauritania, Senegal and Cameroon.

Operators have been successfully able to deploy floating liquefied natural gas (FLNG) technology to realise the value of smaller assets in these markets and this could be a continuing trend in 2020 and beyond.

Eni and partners are considering a $7 billion FLNG for the Coral South field in Mozambique.

South Africa's LNG diversification play

In terms of African demand for LNG, South Africa – the most industrialized economy on the continent – could be an influential market.

Heavy coal consumption and unreliable power generation make natural gas an attractive solution to diversify its power generation base. In 2020, Transnet – a state-owned freight logistics firm – will launch a tender for the development of an LNG import terminal at Richards Bay Port.

The World Bank's International Finance Corporation has committed $2 million to fund the project planning.

These and other recent developments reflect a growing and diverse African LNG sector. From top-tier greenfield developments to faster-to-market, agile FLNG operations; massive new discoveries to expanding existing liquefication infrastructure.

It is an exciting time to be involved, as demonstrated by the high-profile speakers taking part in this year's Gas Exporting Countries' Forum, be hosted by Equatorial Guinea in Malabo.

German Expertise Behind West Africa's First LNG Regasification Plant

German companies ESC Engineers and Noordtec worked closely with Equatoguinean contractor Elite Construcciones on the design, development and construction of the Akonikien LNG project in Equatorial Guinea.

The 14,000 cubic metres storage and regasification plant was inaugurated this week by H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, and is the first such facility in West Africa.

The project is part of Equatorial Guinea's LNG2AFRICA initiative that seeks to develop small-scale LNG projects to supply African gas to African countries and regions with limited infrastructure. The Akonikien plant will be receiving LNG and distribute it to various industries on the mainland, such as power and cement.

"German companies have once again demonstrated their ability to bring valuable technical expertise and technology to meet Africa's growing and complex energy needs," declared Sebastian Wagner, founder at the Germany-Africa Business Forum (GABF).

"More importantly, this project was realized in cooperation with German SMEs, showing the increasing number of private German companies able to work in collaboration with African entities on key energy project. Germany has developed a strong expertise in gas, power and renewables, which have all become central to the African energy agenda."

Last month and in order to support the growing energy cooperation between Germany and Africa, the GABF launched a multi-million Euro funding commitment to invest in German energy startups that focus on Africa.

The funding commitment, which pledges funds to German startups with exposure to African energy projects, is the first such intra-regional initiative. It goes in line with Germany's renewed focus on Africa, with the Federal Ministry for Economic Cooperation and Development (BMZ) providing new stimulus to cooperation with the continent through the Marshall Plan with Africa.

New CNPC Discovery Confirms South Sudan's Immense Oil Potential

In what has become a remarkable month for exploration in Africa, a CNPC-led consortium has made a 300 million barrels of recoverable oil discovery in South Sudan's northeastern Upper Nile state.

It is almost as much as the Oyo Discovery announced earlier this month in Congo.

The exploration well was drilled at a total depth of 1,320m near the Adar oilfield in Block 3, operated by the Dar Petroleum Operating Company (DOPC), which includes CNPC, Petronas, Nilepet, Sinopec and Tri-Ocean Energy.

"This is a remarkable achievement for the country," declared Nj Ayuk, Executive Chairman at the Chamber and CEO of the Centurion Law Group. "Since independence, South Sudan has worked tirelessly to bring back damaged fields to production, and especially encourage exploration.

Their efforts to maintain peace and stability and a safe environment for investors has paid off. We have always believed that stability goes hand in hand with economic prosperity. Such a large discovery confirms the huge potential of South Sudan in oil & gas just before the country launches a new licensing round in October."

South Sudan has signed earlier this year an exploration and production sharing agreement (EPSA) with South Africa's Strategic Fuel Fund for the highly prospective Block B2. The move was part of South Sudan's strategy to diversify its basket of investors and encourage further exploration.

While the country sits on over 3.5bn of proven oil reserves, the third largest in sub-Saharan Africa, 70% of its territory remains under-explored.

To boost exploration, South Sudan will be launching a new and much-awaited petroleum licensing round at the upcoming Africa Oil & Power conference in Cape Town on October 9th, 2019. 

African Energy Chamber To Discuss Energy Deals With Chinese Investors

To support growing energy cooperation and investment between China and Africa, the African Energy Chamber is organizing a working visit to Beijing next week.

Led by Executive Chairman Nj Ayuk, the delegation from the Chamber will be meeting with CEOs and Chairmen from China’s state-owned energy companies and the private sector, along with key industry associations in China.

The visit aims at further introducing the Chamber to the Chinese market following a series of roadshows organized in China by the Chamber over the past two years and increasing demand for investment information on Africa by Chinese investors.

“The investment appetite of Chinese companies for Africa is only getting stronger given current international trade and business dynamics,” said Mickael Vogel, Director of Strategy at the Chamber.

“We are receiving an increasing number of requests from Chinese companies to join the Chamber, especially to gain access to the latest investment opportunities in Africa, and to credible and reliable information on African energy markets.

Our visit will be consolidating several relationships we have developed over the past two years and will lead to discussion on major energy deals for Africa.”

Last year, Chinese President Xi Jinping pledged an additional $60bn for African development over the next three years during the Forum on China-Africa Cooperation.

Traditionally, a large majority of Chinese investments have been made in energy and transport, especially oil & gas, power, mining, railways and airport infrastructure.

As Chinese investment into Africa increases, the Chamber is assisting several Chinese companies in navigating Africa’s fast growing energy markets.

The move is part of the Chamber’s support to a large and expanding base of investors seeking to do business in Africa, mostly from China, Russia, India the Middle East and Turkey. 

Progress At Last For Kingdom Of Eswatini's Energy Mix Dream

By: Koketso Lediga

After a long wait, the Kingdom of Eswatini issued a request for the qualification and development of a 40MW solar PV plant to be developed via the First Tranche Procurement Programme and a 40MW biomass-to-energy plant to be developed via the Second Tranche Procurement Programme.

Surprisingly, the announcement was made public through the Eswatini Energy Regulatory Authority (ESERA) and not the Eswatini Electricity Company on the 7thof June 2019. The later is a state-owned utility previously known as Swaziland Electricity Company (SEC) and currently operates a number of hydropower plants with an estimated installed capacity of 60MW to date. Needless to say, the generated power levels are inadequate since it provides a mere 10% to the Kingdom's electricity demand.

The request for qualification comes delayed given that Eswatini has publicised its intent to have a 46MW solar PV power plant online since 2017. However, the decision is an important one for this developing country and it being it closer towards reducing the country's reliance on imported power from utilities such as EDM (Electricidade de Moçambique) and Eskom. 

This request could not have been issued at a better time taking into consideration the recent events in Mozambique and South Africa. The two utilities have an undisputed record that indicates their inability to provide steady or uninterrupted electricity for those within their borders.

Eswatini's decision to act on its past commitment to invest in renewable energy and expand the ratio of renewables in the country's electricity to 50% by no later than 2030 can only yield positive results for its population that amounts to roughly 1.42 million. It is beyond doubt that energy is the lifeblood of any economy as it is an input to practically every product or service produced across all sectors.

Research has proven that there is a direct correlation between energy/electricity and economic growth. I would unashamedly argue that it is both the bloodline and backbone of a country and a thriving economy. 

Given the long standing energy crisis in Eswatini, an unlimited natural resource such as solar is the most feasible backup to recover the lost economic opportunities for the country. Solar energy is available in abundance on a continent like Africa. It is still puzzling that most African countries have not exploited this resources.

Even more so puzzling for a country like Eswatini that has more than one successful hydro power plan. ESERA has taken a wise move to embrace solar power as a strategy to hedge against unreliable and instable electricity supply and prices.

A further benefit of a diversified power generation approach means that Eswatini can rely less on imported power while creating more jobs for locals for the construction and operation of the plant. Basically, Eswatini's decision will curb unemployment levels, improve productivity and improve the citizen's standard of living and increase the economy's GDP.

The project is set to be consigned by 2020 and one would hope that the procurement process is not granted further deferment. Additionally, and imperatively, an appropriate procurement strategy and contracting method is used, which encourages collaboration and cooperation between ESERA, the successful bidder, subcontractors, funders, operator and all consultants to ensure that the project is not riddled with cost and time overruns.

Following the development and publication MNRE's Energy Master Plan, the country should be more intentional in the future to encourage, support and implement public & private sector driven projects and increase local generation of renewable energy.

While the project is an answer as well as solution for the country's transient energy needs and the risk attached to the reliance on imported electricity, its long term strategy seeks to raise awareness for the evolution of home-grown renewable energy projects. Renewable energy will meet the country's environmental clean energy goals which will reinforce economic growth.

Since the current master plan expands over a period of 20 years, my hope is that the Eswatini government not only invites the private sector to contribute to the energy generation and distribution efforts but that it creates a conducive environment for participation. 

Koketso Lediga is the Managing Director & Lead Consultant, Infra-Afrika Advisory, Sandton

Angola's To Push For Angola's Gas Monetization At Gas Exporting Countries Forum

In a major development for the Gas Exporting Countries Forum (GECF), President João Lourenço of Angola will attend and address the fifth annual summit, hosted by Equatorial Guinea as part of its "Year of Energy."

Angola joined the GECF as an observing member in November 2018. President's Lourenço active participation in this year's summit reflects the growing importance of the natural gas sector to his administration's long-term plan to grow and diversify Africa's third largest economy.

Angola's oil sector has faced challenges in recent years. Production has fallen from a peak of 1.9m barrels per day in 2010 to just above 1.4m bopd. Furthermore, with limited refining capacity, Angola's large oil production has done little to power the economy's industrial sector, leading to fuel shortages like the one which hit Luanda recently.

Upon taking office in September 2017, President Lourenço's priorities were clear: reform oil and grow gas.

In May 2018, President Lourenço issued a presidential decree which included specific policies to attract new investment into the natural gas sector. This includes a five percent tax on gas production, compared to ten percent for oil; as well as a 15 percent income tax rate for non-associated gas (compared with a 25 percent rate for associated gas and oil). These attractive incentives, combined with a reformed licensing process and a renewed focus on reducing corruption, have put Angolan gas on the map.

There is presently just one operational gas facility in the country, located in Soyo, at the mouth of the Congo River. The Angola Liquefied Natural Gas (LNG) plant is a $12 billion joint venture between Sonangol, Chevron, BP, Eni and Total; it has the capacity to produce 5.2 million tons of LNG per annum, according to the company website [1]. But with proven natural gas reserves of 383 billion cubic meters, there is massive growth potential in this sector.

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