Republic Of Congo Scores Meaningful Implementation Of EITI Standards

The Republic of Congo has made meaningful progress in implementing the EITI Standard, with significant improvements in transparency of state-owned enterprises, oil sales and license information. Validation, the EITI’s quality assurance process, found that the Republic of Congo’s performance in implementing EITI Requirements has improved markedly since the country’s first Validation in 2018.

Spurred both by a new International Monetary Fund programme in 2019 and by EITI implementation, the Republic of Congo has published data for the first time on its national oil company. Information now entering the public domain includes oil sales by the state and international oil companies and the management of oil revenues not transferred to the Treasury. Publication of this data, previously considered sensitive, has led to more open public debate.   

“We welcome the Republic of Congo’s efforts to expand extractive industry disclosures beyond minimum requirements to areas of high public interest, including oil sales, production costs and the national oil company’s financial statements,” said EITI Board Chair Helen Clark. “The challenge is for all stakeholders to sustain progress and ensure that the EITI is contributing to evidence-based public debate.”

Consolidating oil sector transparency

The past two years have seen a series of firsts in the Republic of Congo’s disclosures on the upstream oil and gas sector. Building on the disclosure of oil and gas contracts, the Republic of Congo launched a publicly-accessible oil and gas cadastre system in 2018. The 2016 and 2017 EITI Reports break down data on oil and gas production, production costs and oil sales to an unprecedented level of detail, including information on individual oil fields. SYSCORE, a new online reporting system under development, will bring timelier disclosures of extractive company payments to government. This new transparency provides a strong basis for greater public use of extractive data, including in areas such as open financial modelling and revenue forecasting.

“The government’s oil sector reforms in the past two years have led to unprecedented transparency in the governance of the country’s extractive industries,” said EITI Congo Permanent Secretary Michel Okoko. “EITI implementation is a governmental priority and our core strategy is to regularly improve all governance policies.”

Strengthening oil revenue traceability

New disclosures have extended to the national oil company, the Société nationale des pétroles du Congo (SNPC), a central player representing the state in the oil and gas sector. In the past two years, the Ministry of Finance and Budget published SNPC’s audited financial statements for 2012-2018 for the first time, although consolidated financial statements for the SNPC Group have yet to be disclosed. Combined with the Republic of Congo’s EITI reporting, these documents have opened up the management of the state’s oil revenues and highlighted the deductions made to fulfil state commitments.

Since mid-2018, the government has gradually reflected these various deductions from state oil revenues in its fiscal reporting. Successive fiscal reports for 2018 and 2019 present the value of deductions from state oil revenues, while the national budget reflects related expenditures in the government budgets for 2019 and 2020.

Key to improving the accountability of these deductions, the government has pledged to disclose more information on the agreements underpinning the various deductions, including the framework agreement with the Chinese government on the reimbursement of infrastructure projects and pre-financing agreements with commodity traders.

Opening space for debate

Accounting for a third of government revenues and 80% of exports in 2017, the extractive industries are of national importance in the Republic of Congo. Public debate around the management of the forestry, mining, oil and gas sectors is crucial for improving the accountability of public finance management. The EITI Board’s decision on the Republic of Congo’s second Validation acknowledged improvements related to freedom of expression on oil and gas issues previously considered too sensitive for public debate. While more work is needed to address remaining administrative bottlenecks related to civil society’s engagement in the EITI, the emergence of robust debate on the basis of EITI findings and recommendations is a welcome development.

The Republic of Congo will have 18 months to address nine gaps in its implementation of the EITI Standard before its third Validation.

Local Content To Fire Up Africa's Economic Recovery

The African Energy Chamber held its first meeting with its Local Content Committee recently, placing local content development at the core of its activities. 

With several established markets like Nigeria or Angola and frontier energy markets such as Senegal or Uganda, the oil sector supports several of Africa's economies. As a result, the African local content has become a key priority for government, regulators and industry stakeholders.

Issues around the perceptions and understanding of local content dynamics were major topics of discussion. Key points put forward included the need for African governments and companies to develop better implementation of local content policies and come up with new approaches putting entrepreneurship and capacity building as priorities.

From financing African starts ups, SMEs and companies to promoting an enabling business environment, it was agreed that African governments and regulators need to rise up to the task and provide for better conditions and environments for African entrepreneurs to thrive.

Established African energy markets such as Congo Brazzaville, Equatorial Guinea or Gabon are still missing a pool of strong local companies across the value-chain, and especially in upstream. Despite producing oil and gas for decades, their environment has remained until now unfavorable to the nurturing of entrepreneurs in oil & gas, especially because of a lack of domestic financing.

The regionalization of the African content was identified as a key trend for the short and medium-term. With the roll out of the African Continental Free Trade Area (AfCTFA) and upcoming first oil and gas in many African markets, the potential to have local content move away from a pure international-local perspective is real.

This is especially an opportunity for local companies within established markets, be it Nigerian companies regionalizing the oil & gas content or South African and Kenyan companies regionalizing content within the renewable energy space. African companies have the means and opportunities to create regional ventures and partnerships taking the African content development to a new level, and must be seizing them.

Finally, inclusion in the workforce is set to become a major focus for the Chamber and its Committee, especially when it comes to promoting youth and women inclusion in the extractive industries. A sustainable African energy industry will only be as strong as it is inclusive, and better mechanisms and policies need to be put in place to ensure African women and youth can build successful careers in the sector.

In that regard, upcoming producers such as Senegal, Mozambique or Uganda have a unique opportunity to truly innovate as they develop their own approach to capacity building and local content development.

As the COVID-19 pandemic further increases the need for localizing value chains in Africa, local content development is set to become even more important for all industry stakeholders. Its success will ultimately depend on the nurturing of capable and patient African entrepreneurs able to raise capital and engage regionally with the right partners to build successful ventures. In such a journey, cooperation with international companies, but especially amongst African entities, will be crucial.

Kariya Energy Set To Acquire Oil And Gas Assets In Various African Jurisdictions

Kariya Energy has announced that it will enter into various definitive agreement to acquire upstream and midstream oil and gas assets in African countries.

Kariya Energy's technical and financial strength puts it in a position to bring Canadian and American ingenuity into the growing oil and natural gas market in Africa.

Kariya Energy and its management team's engagements and experience with various deep and shallow water projects in Mozambique, Nigeria, Senegal, Congo DRC, Congo Republic and Gabon makes these countries great investment possibilities.

After spending 16 months reviewing data from various IOC's, Kariya Energy will be pursuing acquisitions of various exploration and development plays either through Farm-in deals or operatorship through risk service contracts, or direct negotiations with sovereign governments.

Kariya Energy will continue with its current and ongoing support by providing technical, financial, and operational support for oil and gas companies currently operating in Nigeria, Congo and Gabon.

Kariya Energy's strategy has focused on the innovation and evaluation of new opportunities for resource extraction with great technology that has produced results.

Kariya Energy will pursue profitable small-scale LNG projects across Africa, a niche that its leadership has been skilful in building and making it profitable and scalable, boasting significant potential across the African market.

With its technology, Kariya can turn around African small-scale LNG and work with partners in addressing off-grid power generation for industrial and residential needs in remote locations and deal with issues around energy poverty.

DR Congo Expresses Strong Political Will For Gas Monetization Projects

Surrounded by major African oil & gas producers Republic of Congo and Angola, the Democratic Republic of Congo (DRC) has so far remained relatively absent of Africa’s league of hydrocarbons producers. In 2019, only French independent Perenco produced from the DRC, at an average rate of 25,000 boepd from 11 onshore fields.

In this context, the administration of President Félix Antoine Tshisekedi has made energy security and investment its top priority, seeking to get massive hydropower projects off the ground but also to diversify the country’s energy basket and create jobs in the process.

In yet another decision supporting the development of the DRC’s hydrocarbons industry, President Félix Antoine Tshisekedi requested its Minister of Hydrocarbons, Hydraulic Resources and Power and its Minister of Finance to fast-track legal processes and permits pertaining to the valorization of the natural gas produced onshore by Perenco. The decision was taken at the latest Council of Ministers last week in Kinshasa.

The move is expected to result in the monetization of natural gas through power generation, especially to address the DRC’s energy deficit and provide stable supply of power to its booming mining industry.

“We are extremely optimistic about the future of oil & gas in the DRC given current political support for the industry. While market-driven policies are needed to ensure investments in gas monetization, an enabling environment is key to unleashing the massive potential of the DRC and the energy industry is open to supporting the DRC,” stated NJ Ayuk, Executive Chairman at the African Energy Chamber.

“The DRC also offers 100GW of hydropower potential, and its upcoming hydroelectric stations are expected to require billions of dollars. It is a chance for investor and local players to participate and support the ambitious growth plans of President Felix Tshisekedi fighting energy poverty and boosting energy for industrial development that will create jobs and transform the economy with a post covid-19 recovery strategy,” concluded Ayuk.

The African Energy Chamber is encouraged by the governments decision as we believe locally available natural gas offers the perfect opportunity to build power capacity in the short-term and ensure a stable and cheaper power to DRC’s industries and mining companies.

Chevron's E. Guinea, Cameroon Entry Could Be Turning Point for Central Africa's Gas Industry

The recently-announced acquisition of Noble Energy by Chevron for $13bn gives the American major entry into Equatorial Guinea's oil & gas sector, where Noble Energy has interests in the Alba Field (33% non-operated WI and 32% revenue interest), Block O (Alen Field 51% operated WI and 45% revenue interest) and Block I (Aseng Field, 40% operated WI and 38% revenue interest).

These assets in Equatorial Guinea represent 94 million barrels of oil equivalent of proved developed reserves and 38 million barrels of oil equivalent of proved undeveloped reserves. In addition, Noble Energy was also the operator Block YoYo in Cameroon and of the deepwater Block Doujou Dak (60% WI) in Gabon, where it was in the process of evaluating recently acquired 3D seismic data.

The acquisition has raised several concerns and questions, mostly because these assets are currently subject the CEMAC region's most ambitious gas development project. While the Alba Field has been feeding gas into Equatorial Guinea's Punta Europa complex for decades, including the EG LNG Plant, the AMPCO methanol plant and the Alba LPG plant, its declining reserves have led to the development of the Alen and Aseng fields as alternative sources of gas. In 2019, Noble Energy was at the heart of a groundbreaking agreement to launch the Alen Monetization Project, expected to ensure continued and stable gas supply to Equatorial Guinea's LNG and downstream revenue-generating infrastructure.

The project is still on track for delivery in 2021 and is the first step of the development of a much broader offshore gas mega-hub in the Gulf of Guinea. This regional gas hub would ultimately include the development of the Yolanda and YoYo discoveries located in Equatorial Guinea's Block I and Cameroon's YoYo Block, both operated by Noble.

The scheme is one of the most ambitious cross-border gas venture in Africa, and Noble's acquisition by Chevron has the industry worried about the future of the project under new operatorship. However, the African Energy Chamber believes that the entry of Chevron as operator for the offshore gas mega-hub could be transformational for the future of gas in Central Africa, especially at a time when Equatorial Guinea, Cameroon, Gabon and Congo are all multiplying efforts to monetize their domestic gas reserves.

Chevron is indeed a true gas player in the African market. In Nigeria, it has been leading natural gas commercialization efforts for decades through its Escravos projects targeting the monetization of 18Tcf of gas. These have resulted in the Escravos Gas-to-Liquids facility and the Escravos Gas Plant, both cornerstones of Nigeria's gas development strategy.

In Angola's Block 0 and Block 14, Chevron has demonstrated a remarkable ability to invest in cutting flaring and monetizing gas. In block 0, it still operates what is the world's largest LPG FPSO vessel, turning previously flared gas into cleaner fuels for Africans and the for the world.

"What we need now is a pragmatic commonsense approach that welcomes credible investors and see gas taking the lead in economic development and industrialization, therefore the entry of Chevron is extremely welcomed and should be accepted by all stakeholders," said NJ Ayuk, Executive Chairman at the African Energy Chamber.

"Transaction and projects approvals should not be unnecessarily delayed, ensuring a quick and efficient takeover in the region so ongoing gas projects are not affected. This acquisition gives the region a very experienced and credible gas player with tried, true and tested solutions to support our gas ambitions. The Chamber believes that fast tracking approvals and driving commonsense measures around this deal will make the industry work," added Ayuk.

"From its Nigerian and Angolan presence, Chevron understands the issues and opportunities of developing African content. We expect its entry to be beneficial from a local content and capacity building perspective," said Leoncio Amada NZE, President for the CEMAC region at the African Energy Chamber.

"We hope that the authorities in Cameroon and Equatorial Guinea can do an efficient and fast track due diligence process, and ensure that Noble meets all its obligations to exit and create a seamless transition for Chevron. This is an opportunity for our public authorities to demonstrate their commitment to empowering investment and move away from an era of uncertainty to give confidence to future investors and stay competitive," concluded Amada NZE.

South Sudan Promotes Energy Investment, Economic Prosperity Showcase

South Sudan has set 2020 as a year of peace and growth, underlined by the formation of the unity government as well as its active oil and gas sector and sizeable exploration opportunities.

Before COVID-19 sent the global energy sector into turmoil, the swearing in of the new transitional government on February 22, 2020 sealed the 2018 peace deal and united South Sudan's opposition parties, leading the country to elections in three years. In the oil and gas sector, Hon. Puot Kang Chol was appointed as the new Petroleum Minister and a licensing round was about to be launched.

Although the pandemic has delayed these initiatives, South Sudan's commitment to energy prosperity has not weakened. A key part of this effort is the South Sudan Oil & Power (SSOP) Conference & Exhibition 2021, the country's official energy event, which will take place on June 29-30, 2021, following a rescheduling due to COVID-19.

SSOP's 2021 theme is #InCountryValue and the conference aims to highlight South Sudan's ambitious plan to implement a solid local content framework and to create an enabling environment for partnership and investment from international firms.

The conference will bring together top executives from the local as well as regional and international markets. As a proven oil producing region, the country aims to attract more foreign investment while building its local capabilities, thanks to regained peace and an improved business environment.

In previous years SSOP has welcomed ministerial and high level commercial missions, and official representation, from the US, Norway, Egypt, Sudan, Kenya, Ethiopia, Equatorial Guinea and South Africa.

In order to showcase its drive to increase oil production, electricity coverage and build local capacity, AOP and the African Energy Chamber are hosting a special webinar on July 27 under the theme Preserving Economic Progress in the Face of COVID-19.

Bringing together top executives from the country's energy and finance sectors, the webinar will touch on COVID-19's impact on South Sudan's exploration opportunities, including an upcoming licensing round to be launched in 2020. The resumption of production slowed by COVID-19, foreign investment, as well the long-term local capacity building and power projects will be key areas of discussion.

AfDB Joins $20bn Mozambique LNG Financing

The African Development Bank has concluded its bid to co-finance the construction of Mozambique's integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of $400 million for the transformational project.

The Mozambique LNG Area 1 Project, estimated to cost over $20 billion, is ranked Africa's single largest foreign direct investment to date. It comprises a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as Mozambique's national oil and gas company, ENH.

With the signing on 15 July, the Bank joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project. Financial close is expected later in 2020.

The project, which benefits from one of the world's largest natural gas reserves off the coast of northern Mozambique, will be the country's first liquefied natural gas development. It will initially consist of two LNG trains with a total capacity of around 13 million tons per annum.

As well as being transformational for the energy sector in Mozambique, the project is expected to have broader socio-economic benefits for the country.

"Signing the Mozambique LNG Area 1 agreement heralds a new age of industrialization for Mozambique," said Abdu Mukhtar, the Director of the Bank's Industrial & Trade Development Department. He noted that gas purchasers, such as fertilizer plants, had the potential for improving regional and global competitiveness.

The project comprises both onshore and offshore components, which will be funded by a combination of equity, pre-completion cashflows and over $14 billion in senior debt facilities. The senior debt consists of a mix of Export Credit Agency (ECA) direct loans, commercial bank loans and the facility from the Bank, the only multilateral development institution involved in the project's first phase.

Wale Shonibare, the Bank's Director for Energy Financial Solutions, Policy and Regulation, said the project would create a new energy model in Mozambique and help to electrify Southern Africa." Through the availability of domestic gas, the project stands to facilitate the development of gas-fired electricity in Mozambique. This will play a key role in providing reliable and affordable energy for the country and the wider region," said Shonibare.

The Bank played a crucial role in requiring compliance with strict environmental and social standards, in addition to working on SME and gender-development in Mozambique and promoting adherence to international best practices. The Bank's involvement is consistent with its country strategy in Mozambique, which aims to leverage natural resource development and investment in sustainable infrastructure.

Overall, the project will improve livelihoods, spur economic growth and boost universal electricity access, in line with one of the Bank's High 5 strategic priorities, Light Up and Power Africa, Bank officials said.

The Bank's Acting General Counsel, Souley Amadou, commented: "This is a first in class transaction that sets a new standard for mega-projects on the African continent. The collaboration and unity of purpose between the sponsors, Government of Mozambique, the financing parties and advisors were truly remarkable."

Natural Gas To Change Africa, Says African Energy Chamber Committee

In continuation of recent announcements on the African Energy Chamber's Advisory Board (2020 – 2021), the Chamber is delighted to announce the nominations on its Natural Gas Committee.

The committee will be instrumental in advising the Chamber on several projects and initiatives to boost investments into gas infrastructure across the continent, and develop gas awareness campaigns to drive up demand and consumption. The Natural Gas Committee of the Chamber's Advisory Board is made up of:

Nosizwe Nokwe-Macamo, Executive Chairman & Founder, Raise Africa Investments

Jorg Kohnert, Managing Director, Jagal Energy

Eric Williams, President, Royal Triangle Energy Solutions

Ann Norman, General Manager – Africa, Pioneer Energy

Pierre Raillard, Head of Business Development, Orca Exploration

Jeff Goodrich, former CEO, OneLNG and former COO, Perenco

Committee members gather decades of experience in the public and private sector all across Africa, and share a common belief in the power of natural gas to propel Africa's economic development.

From Senegal to South Africa, natural gas is taking an increasingly important place within the continent's energy mix. Africa is home to the world's largest recent gas discoveries, especially in Senegal and Mozambique, and governments across the continent are increasingly recognizing the benefits of using African gas to drive economic growth.

However, most of Africa's gas had remained undeveloped or exported, and its potential to generate local value has remained underexploited. The African Energy Chamber is on a mission to support and expand several gas monetization and valorization initiatives such as: increasing the use of CNG in transport, expanding PNG networks for households and industries, developing small-scale LNG infrastructure, supporting deals on gas-to-power, petrochemicals and fertilizers, and improving access to data on gas supply and demand in the continent.

"Natural gas has been good as an export commodity for African economies such as Nigeria or Equatorial Guinea. But good is not enough anymore as we recover from the most severe industry and economic crisis in recent history. The Covid-19 pandemic has highlighted the massive potential of natural gas to support Africa's energy transition, create jobs and generate business opportunities for African equipment and services providers.

The African Energy Chamber has put the development of strong African gas markets to the forefront of its priorities and we are honoured to be supported in this mission by such esteemed committee members," declared Nj Ayuk, Executive Chairman at the African Energy Chamber.

Kenya Power Appoints Eng. Elizabeth Rogo To Its Board

Eng. Elizabeth Rogo, Founder & CEO of TSAVO Oilfield Services and President for East Africa at the African Energy Chamber has been appointed Non-Executive Director on the Board of Kenya Power and Lighting Plc, Kenya's state utility company.

Kenya Power has been making steady progress towards providing safe, secure and reliable electricity to Kenyan households and industries for several years. The company is a key pillar of the country's Vision 2030, which aims to transform Kenya into a newly industrializing, middle-income nation. By handling most of Kenya's power transmission and distribution, Kenya Power is the most crucial fighter against energy poverty in the country.

"Elizabeth is solidly pro-energy for all and for economic expansion. Elizabeth understands that having sustainable power is key for creating jobs and spreading economic prosperity across Kenya. We have no doubt that she will bring the highest ethical standards to executing her job," stated NJ Ayuk, Executive Chairman at the African Energy Chamber.

"I am equally thankful to H.E. President Uhuru Kenyatta for his leadership in the energy industry, and to shareholders for appointing someone who has become a role model for many in our industry, especially for young women entrepreneurs. We sincerely congratulate her on this appointment," added Ayuk.

Eng. Elizabeth Rogo's appointment is yet another demonstration of her ability to build consensus around key energy issues in Kenya and East Africa.  Elizabeth is the Founder & Chief Executive Officer of TSAVO Oilfield Services, and has over 19 years of international experience in oil & gas engineering, operations, project management, consultancy and business development.

She has worked for the sector's most renowned global companies including BJ Services, Baker Hughes and Weatherford International in Canada, the USA, Europe and Africa.

Mozambique, African Energy Chamber Agree On Local Content Development

The African Energy Chamber and the Mozambican Oil & Gas Chamber (CPGM) have signed a cooperation agreement to support the development of local content in Mozambique and the attraction of investments into key segments of the country’s energy industry.

With multi-billion dollar LNG projects under-construction, including Coral South FLNG and Mozambique LNG, the country is on its way to become a global gas market and competitive African energy frontier. Ongoing developments, and potential future ones such as Rovuma LNG, have the potential to transform the Mozambican economy not only through the generation of revenues for the state, but also through the monetization of domestic gas across industries.

As it is the case with other upcoming African producers such as Senegal or Uganda, Mozambique has a unique opportunity to propel its economic growth via the sound development of its natural resources. However, such a journey will be successful only if beneficial to the local economy, local goods and services, and local jobs creation. Only by building domestic capacity, promoting an enabling environment for investors, and adopting best industry practices can Mozambique succeed in becoming the energy frontier the continent is hoping for.

In order to assist Mozambique’s nascent hydrocarbons industry to build capacity, develop sustainable business models and attract investment, the African Energy Chamber has signed a cooperation agreement with the newly-established Mozambican Oil & Gas Chamber. Both institutions have agreed to join their resources and efforts in order to support technology transfers, attract investments across the value-chain and promote joint-venture and partnerships between local companies and regional and international firms.

“Mozambique has already set an example of sound policy and governance, which is why key FIDs have been successfully taken and major infrastructure projects are currently under-construction. However, true sustainability will come from the local value generated by such developments.

The African Energy Chamber applauds the Government of Mozambique for taking all initiatives to build domestic capacity, and intends to work closely with the private sector via its partnership with the Mozambican Oil & Gas Chamber to offer all possible support to the development of the Mozambican gas industry,” declared Nj Ayuk, Executive Chairman at the African Energy Chamber.

“The Mozambican Oil & Gas Chamber is growing rapidly in order to represent Mozambique’s private sector and advocate for the sustainable development of our hydrocarbons reserves. We believe that partnerships and a strong public-private dialogue are what will make the development of our industry a successful one and create jobs for Mozambican women and men. We look forward to our cooperation with the African Energy Chamber and to leverage on their global network to promote Mozambique as an energy investment destination,” stated Florival Mucave, Chairman of the Mozambican Oil & Gas Chamber.

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