Industry Power
April 11, 2022 No Comments

How Nigeria can tap $53trillion global ESG fund for oil projects

Projected to hit $53 trillion by 2025, the global Environmental Social and Governance (ESG) assets can provide leeway for most oil and gas projects in Nigeria, especially the private and public sector, to address inherent hindrances.

Across the world, investors are now shifting attention to ESG, applying the non-financial factors as part of the key analysis process to identify material risks and growth opportunities.

At a time when funding for fossil fuel investments is being withdrawn, most analysts see priority for ESG as an escape path to financing projects in the sector.

A report published by Bloomberg had noted that global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.

Just last month, the International Energy Agency (IEA) had called for an end to fossil fuel investment as part of an attempt to ensure net-zero ambition becomes a reality by 2050. Although stakeholders in the oil and gas sector have criticised the call, it, however, sent a negative signal to the industry, which has already witnessed about a five per cent reduction in investment due to the Covid-19 pandemic.

Nigeria, with elusive governance, regulatory and fiscal outlook has over $160 billion projects yet to see Final Investment Decisions in the upstream segment.

Across Africa, the African Refiner and Distributor Association (ARDA) puts needed funds for refinery upgrade alone at $15.7 billion while an additional $7.5 billion investment, inclusive of debt, equity, and grants, will be required to build clean cooking stoves and downstream infrastructure that are going to support the attainment of the UN Sustainable Development Goals (SDGs).

Business Development experts for Vitol Services Ltd, Richard Egan, and Guillaume Quigiver, noted that ESG creates a new opportunity for African countries to generate carbon credits.

According to them, Africa has the lowest cost of generating carbon credits in the world and as such, a case should be made for a framework whereby African carbon emissions submissions are accepted in the global marketplace, stressing “ESG brings new potential revenue streams that can be incorporated into a financing package.”

Financial experts have also stated that ESG considerations are currently driving shifts in lending policies for various financial institutions and under what terms they are willing to lend, adding that while several key financial institutions like the World Bank and several Export Credit Agencies (ECAs) have pledged to end support for fossil fuel projects, Asian ECAs and some European ECAs have not made any such policy proclamations.

With the Petroleum Industry Bill (PIB) already being prepared in anticipation of presidential assent as stakeholders are divided over proper consideration for ESG, energy economist, Prof. Wunmi Iledare insisted that ESG must be on the radar of the industry as an important determinant for future investment flow.

Iledare said: “The oil and gas industry in Nigeria is not anti-environmental optimisation,” adding that the Society of Petroleum Engineers makes conscious efforts to produce oil and gas in a safe and environmentally secure manner.

According to him, for years, Health, Safety, Environment, and sustainability is a recognized discipline in the Petroleum Engineering profession.

Industry expert, Henry Adigun equally told The Guardian that although ESG is not at its best in the PIB, there are conscious efforts in the country to prioritise ESG.

He noted that the country is making efforts to attract green bonds, adding that the focus on gas would be an elixir towards ESG investment.

Industry Power
April 11, 2022 No Comments

Offshore Exploration: The Future of Guinea Bissau’s Energy Sector

The underlying offshore exploration potential of Guinea-Bissau has long been recognized given the country’s functional hydrocarbon system, good potential reserves, and several drillable prospects in a vast shallow water shelf setting.

According to the country’s national oil company Petroguin, Guinea-Bissau authorized international businesses to begin prospecting for hydrocarbons in 11 offshore blocks where oil is likely to exist since October last year. In light of this, Energy Capital & Power will host MSGBC Oil, Gas & Power 2021, which will create a national platform for constructive dialogue on natural resource management, investment and initiatives for enhancing the productivity and sustainability of the current power matrix.

Offshore exploration might be the future of the energy sector in Guinea Bissau, with various projects underway to expand the country’s oil and gas sector.

Onshore Blocks 4 and 5

Onshore blocks 4 and 5 are licensed to the Equatorial Guinean corporation Ada Business GE Lta. Petroguin announced that it had signed a contract of association and participation with Ada Business GE Lta last September for “exploration, and exploitation of oil resources in blocks 4 and 5 on the mainland” of Guinea-Bissau.

AGC Shallow Block

The Agence de Gestion et de Coopération entre Le Sénégal et La Guinée Bissau (AGC) Shallow is only 100 km from Bissau and has sea depths ranging from 25m to 100m, with known oil between 50m to 70m. There are a total of 14 wells, however, only one has been drilled after the acquisition of 3D seismic data. The first 3D data was acquired in 1982 and re-shot in 2003. The most recent acquisition of 3D was in 2012.

Early wells in shallow reservoirs atop the salt-induced Flore Dome and Gea Dome have yielded significant amounts of oil. The AGC Authority is looking for offers of a future work program from interested parties who have reviewed all past data and can demonstrate competence to operate abroad. The AGC Authority will send additional information to interested parties explaining the block and its potential, as well as specifics on the awarding process.

The database, which includes both legacy data from past operators and more recent studies on shallow oil and reservoirs, has been given to Marine Geological and Geophysical Servicesto administer and license. The new data was used to conduct a study of existing wells and reprocessed seismic packages, which was then linked to potential commercial development options.

The Sinapa and Esperanca permits

The contiguous Sinapa and Esperanca licenses are located offshore Guinea-Bissau in the Casamance salt sub-basin. Australian independent FAR Limited owns a non-operating interest in these two licences, which are divided into three blocks (2, 4A, and 5A) and encompass almost 5,000 km2. Over 70% of the land is above a water column of less than 100 meters, with a maximum water depth of 1,500 meters to the west.

The Sinapa permit hosts the Sinapa oil discovery – a shallow water salt-related feature with contingent resources of ~13.4 mmbbls of recoverable light oil. The geotechnical assessment of this original discovery by FAR revealed additional possibilities around the salt diapir. These additional resources support a potential recoverable resource of over 72 mmbbls.

In 2017, a complete prospectivity evaluation of the blocks revealed an attractive shelf-edge geological setting along the western parts of the licences – a proven play fairway in Senegal. Two prospects, Atum and Anchova, have been prioritized for further exploration.

In order to meet the remaining commitments on the licenses, the Joint Venturers, Far Limited, Svenska Petroleum, and Petroguin agreed to ask for an additional three-year extension to the current exploration phase, with the backing of the National Oil Company of Guinea-Bissau, Petroguin.

Blocks 2 and 4A & 5A offshore

According to  independent Norwegian oil and gas exploration company PetroNor E&P, a full-cycle Africa-focused independent oil and gas exploration and production business, drilling for Blocks 2 and 4A & 5A offshore Guinea Bissau under the Sinapa and Esperança Licences will take place between the end of this 2021 and next year.

The Norwegian entreprise made the statement while providing an update on its acquisition transaction of SPE Guinea Bissau AB, a wholly-owned subsidiary of Svenska Petroleum Exploration AB, Sweden, and the Operator of Block 2 of the Sinapa Licence, and Blocks 4A & 5A of the Esperança Licence.

PetroNor also has operational interests in the Rufisque Offshore Profond and the Senegal Offshore Sud Profond licenses in Senegal.

Offshore Guinea-Bissau is due to see some potentially transformative exploration drilling in the new future, and this drilling can have a great role in reshaping the energy sector in the West African country.

Industry
April 11, 2022 No Comments

Experts kick as PIB restricts petroleum product import to refinery owners

Discordant voices yesterday hit harder in the nation’s oil and gas industry following indications that the National Assembly will, today, harmonise the Petroleum Industry Bill (PIB) ahead of a possible passage latest on Wednesday before the two chambers proceed on recess come Thursday.

Although the progress was expected to excite industry players and stakeholders, prevailing loopholes and new clauses allegedly framed into the bill continue to set fear in the minds of stakeholders, a development, which may erode projected benefits in the nation’s most critical economic sector.

The Senate and the House of Representatives last Thursday set up conference committees to harmonize both versions of the PIB. The committees are expected to meet today while the harmonized version is also expected to be passed by both chambers before the lawmakers proceed on their yearly break.

This development is coming 50 years after Nigeria joined the Organisation of the Petroleum Exporting Countries (OPEC), raising concerns about the country’s fiscal environment.

Nigeria is consistently regarded as one of the most admired and respected members of the OPEC family, particularly in the realm of consensus-building, but its capacity to take advantage of rise in oil prices remains undermined by subsidy and local production challenges.

 

After 22 years of unbroken democracy amid revenue losses estimated at about $200 billion, the National Assembly had two weeks ago, passed the bill amid rancor and stern opposition from various sections of the country and the industry.

While a 30 per cent revenue allocation to development of frontier inland basin mainly in the North as well as dismal allocation to host communities fuel opposition, concerns over possible ban or duopoly in the downstream sector and a 10 per cent management fee, issues of Production Sharing Contract (PSC) as well as Joint Venture obligations have set the industry apart.

Also, Senate’s decision to award just three per cent to oil-bearing communities may not be the only controversial clause in the PIB, as a closer check has shown that the upper chamber provided that petroleum products can only be imported by refinery owners in Nigeria. While the bill expectedly removed price controls on petroleum products, the Senate version of the bill has a clause that constrains market competition by restricting the importation of products to only players with local refining capacity.

The government had been waiting for the Bill to ease the burden of petrol subsidy, but the decision by the Senate to impose restrictions on what is supposed to be a deregulated downstream sector is raising eyebrows among experts, who are calling for the provisions to be expunged. With the new scenario, it may become illegal for most marketers to import petroleum products, including already deregulated products, especially PMS, diesel, aviation fuel, lubricants and base oil unless they have licence for a refinery.

Stated in Section 317(8) of the Senate version of the bill, “The Authority shall apply the Backward Integration Policy in the downstream petroleum sector to encourage investment in local refining. To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. Import volume to be allocated between participants based on their respective production in the preceding quarter.

“Such import to be done under NNPC Limited Direct Sale/Direct Purchase (DSDP) scheme. To safeguard the health of Nigerians, imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February 2020 on adoption of the Afri-Fuels Roadmap.”

Some industry stakeholders, who spoke with The Guardian noted that the development, though encourages local development, may force existing players out of the market leaving a monopolistic market for the national oil company and big refiners.

Speaking on the condition of anonymity, a respected industry player said unless the clause is removed, there may not be a level playing field in the industry. “As price control is being removed, supply must be competitive, inclusive, transparent and seen to encourage efficiency,” he stated.

Former President of the Society of Petroleum Engineers Nigerian Council, Joseph Nwakwue, expressed concern that the provisions would create a duopoly in a price deregulated environment, thereby, destroying the Nigerian downstream industry.

According to him, “in the near term, only NNPC and Dangote will have domestic refining capacity for PMS for instance, so they will be the only importers. This takes the industry back and could not have been the intention of the Bill.

“Moving from a state-owned monopoly in a price regulated market to a duopoly in a price deregulated market is not what Nigeria needs now as it takes the industry backward and exposes Nigerians to exploitation and further hardship. This, in my humble view, is not reformatory.”

He pointed out that “rather than seek to protect refiners, we should seek to protect consumers by liberalising and expanding petroleum product supply sources. That is the only way prices will be ‘market-determined’ and consumers made to pay fair value for the products they buy. The viability of local refining is not determined or enhanced by locking out competition, it is rather achieved through price deregulation, which has been done in Section 205. This clause gives statutory unfair advantage to private players rather than through market competition,” he added.

Professor of Law and Director, Institute for Oil, Gas, Energy, Environment and Sustainable Development (OGEES Institute), Afe Babalola University, Damilola  Olawuyi, said matters of environmental justice could be threatened if the Bill is passed.

According to him, rotational fund may not grant environmental justice in pollution-impacted communities, stressing that unless there is anticipatory approach that integrates human rights impacts assessment into the project approval processes, so as to ensure that petroleum operations do not adversely impact the social, economic and political rights of local communities, projected objective may remain elusive.

“I would, therefore, like to see the introduction of a detailed business and human rights regulation under the new law, which will clearly and comprehensively spell out what responsible business enterprises should do to anticipate, mitigate and redress human rights and environmental harm in their operations,” Olawuyi said.

He also faulted the establishment of “too many institutions as contemplated under the bill,” noting that it could result in procedural challenges and red-tape in decision-making processes.

Renowned scholar and a Professor of Energy Economics, Wunmi Iledare, told The Guardian that the capacity in the Ministry of Petroleum under the Bill may not support the functions of the Office of the Minister, adding that the ministry needs a reconfiguration, restructuring and rebounding to support the PIB demand for policy sustainability beyond a one term Minister in office.

“The Bill seems to have settled for two regulatory institutions and I like the fact that some coordination among the institutions are envisaged, but I do not see where it is mandated. A mandatory coordination section may be appropriate. I also think the Board of the Authority, geo-political fulfillment beyond qualifications seems like jobs for the ‘boys,’” Iledare said.

Regarding administration, he noted that the size of oil blocks, especially onshore block area of 350 square km is about 18 times the 5,800 acre-size in the US GOM and shallow water is about 45 times higher, while the deep water block is about 60 times.

“The expected voluntary conversion clause impact has been significantly reduced with events prior to the passage of the bill. The rush of the so many uninformed renewals, renders the PIB less impacting on old leases. The renewal of terms as this passage was on course remains shocking,” Iledare said.

He also kicked against loopholes in JV funding, stressing that government should have used reform to exit the programme. Iledare said: “There is too much government involvement more than 60 years after oil was first discovered. The issues are beyond governance, regulatory, and administration control.”

Another energy expert, Ademola Adigun, pointed out that governments all over the world “do not create and encourage monopolies or duopolies and that is why anti-trust laws are enacted and enforced to protect industries and consumers. Nigeria should not be doing the reverse. A case can always be made about protectionist policies for nascent or pioneer industries, but this is not the case with a long-established, once-thriving Nigerian downstream sector.

“This clause needs to be expunged from the PIB. The downstream regulator – Authority should be left to develop regulations that are fair, inclusive and transparent for petroleum product importation that ensures open and diverse market supply and hence competition, only then would the objectives of the bill be achieved.”

Industry Manufacturing
April 11, 2022 No Comments

Fuel queues in Nigeria after dirty petrol quarantined

Nigeria, Africa’s top oil producer, is experiencing an acute shortage of fuel, which is causing huge disruption across the country.

People are waiting at petrol stations for several hours, some into the night trying to get fuel.

The longest queues have been in cities like the capital, Abuja, and the commercial hub of Lagos, at those petrol stations that actually have some fuel in stock.

In some places, prices have increased by up to four times on the black market.

It is not new for the country to run short of fuel as its oil refineries are not working to capacity.

This means Nigeria exports its crude oil and then imports refined products for local consumption.

Controversy over the government’s plan to scrap subsidies on petroleum products has reportedly also caused bottlenecks in supplies.

Nigeria’s state-owned oil company says the current shortages are because measures were taken to quarantine millions of litres of adulterated fuel already on the market.

The methanol-blended petrol was imported earlier this month, with many Nigerians reporting mechanical damage to their vehicles after using it.

The Nigerian National Petroleum Corporation now says it plans to deliver 2.3 billion litres of petrol – and that its depots and retail outlets will start round-the-clock operations in an attempt to address the frustrating long queues.

Industry Manufacturing
April 11, 2022 No Comments

How Nigeria Can Become A Leading Oil and Gas Supplier To The European Market

Apart from retaining its position amongst the leading oil and gas producers in Africa in 2022, Nigeria, with over 37 billion barrels of crude oil reserves, has the potential to improve its energy exports to Europe and help address anticipated crude oil and natural gas shortages.  With the European Union planning to ban crude oil imports from Russia by increasing trade with other non-Russian economies and the Russian government promising to cut gas supplies if sanctions from western countries continue, potential supply disruptions to Europe are anticipated. Accordingly, the west African country is expected to ramp up production in 2022 and retain its position as Africa’s largest crude oil producer, a development that will enable Nigeria to increase its energy capacity available for exports.

 

Nigeria’s annual crude oil production is expected to increase to 1.46 million bpd in 2022,  following low production levels in 2021 that were driven by the COVID-19 pandemic. This will provide an opportunity for Nigeria to increase its exports to Europe, become a global energy hub and to fully make use of its hydrocarbon resources for economic growth. Nigeria heavily relies on its offshore projects to sustain crude oil production and supply, with 65% of the country’s total production in 2022 anticipated to come from such projects. However, this will change with Nigeria’s crude oil production anticipated to decline in 2023 onwards due to decreases in production in legacy fields. Nigeria will have to wait for deep water projects to come online to improve its production capacity, according to the African Energy Chamber’s (AEC) Q1 2022 Outlook.

 

“Nigeria needs to ramp up crude oil production on existing discoveries that have not yet materialised to be able to sustain a secure supply in future to meet local, regional and international demand. Lifting of force majeure at the Brass terminal, Bonny NLNG and Okpai Power Plant comes at the right time. We have to continue paying attention on vandalism, sabotage and theft in oilfields. The close collaboration between the government and Industry could not be more important now” stated NJ Ayuk, Executive Chairman of AEC.

 

Meanwhile, on the gas front, Nigeria’s massive production capacity in 2022 will place the country among the top three producers in Africa and a potential supplier to meet demand in Europe. Nigeria has an estimated gas reserve of 209 trillion cubic feet and will produce 1,780 billion cubic feet in 2022, up from 1,450 billion feet in 2021. Existing producing projects and the projects currently under development in Nigeria are expected to ensure a resilient supply through 2025. With this portfolio, Nigeria has an advantage for Europe to look up to the west African country as a potential supplier.

 

In addition, the multi-billion 4,128km Trans-Saharan Natural Gas Pipeline being built by the governments of Nigeria, Niger and Algeria will enable the integration of Trans-Mediterranean, Maghreb-Europe, Medgaz, and Galsi Pipelines for Europe to leverage west and north Africa’s oil and gas resources to meet demand. Once completed, the pipeline will transport 30 billion cubic metres of natural gas per year and Nigeria, as a leading producer in Africa, can produce a significant share of that capacity.

 

“Nigeria is rich in oil and gas resources but still does not have adequate infrastructure such as a functioning refinery. In order to utilize its oil and gas resources effectively, Nigeria needs to build more infrastructure locally to process its energy. To be able to build the infrastructure needed, there is a need for direct involvement from a combination of the private and public sector partners,” stated Hendrick Malan, the CEO of energy market research firm, Frost & Sullivan, in an exclusive interview with the AEC.

 

Additionally, Nigeria’s current natural gas producing fields are expected to see a steep decline as we approach mid-2020s, a worrying situation that can reduce the country’s production capacity. Majors including ExxonMobil, Shell and TotalEnergies, who have been top producers of oil and gas in Nigeria, are expected to diversify their portfolios from 2022 onwards and exit the market, a move that might negatively affect production and reduce the ability of the West African country to expand its energy exports to Europe. ExxonMobil has already signed a $1.2 billion deal with local firm Seplat Energy to handover four oil mining licenses and natural gas recovery plants. Factors such as vandalism of infrastructure, a continued lack of investment in new exploration activities and political instability/civil unrest in oil and gas rich regions of Nigeria also continue to disrupt the country’s ability to optimize oil and gas production and increase exports.

 

Regulatory reforms and market improvement

 

The recent enactment of the Petroleum Industry Act (PIA) is a game changer for Nigeria’s oil and gas market with the regulation anticipated to increase the entrance of international majors and investors. The PIA is expected to provide clarity to market players on issues around taxation, investment and licensing, that have previously slowed down projects’ deployment. The law will boost investment in oil and gas upstream activities to improve exploration, production, infrastructure development and the country’s energy portfolio.

 

Despite efforts the Nigerian government has implemented to improve its oil and gas market, the country’s hydrocarbon energy resources remain untapped. Nigeria has not been able to fully leverage its oil and gas reserves to meet local demand and to increase exports. Today, 50% of the Nigerian population is living in energy poverty. AEC’s upcoming annual conference, African Energy Week (AEW) which will take place October 18-21, 2022, in Cape Town, will discuss policy, investment and infrastructure requirements for Nigeria to boost its energy production to meet local demand whilst expanding its energy exports to Europe.

 

With Europe seeking alternative supply chains to reduce reliance on Russian gas, Nigeria could provide a significant share of the capacity the bloc needs. The European Commission, governments, energy companies and financial institutions can help Nigeria with the funding and technical expertise required to speed up the development of infrastructure for increased production and energy transportation. AEW 2022 will hosts discussions around future Nigeria-Europe partnerships on oil and gas trading.

 

The African Petroleum Producers Organisation, a consortium of hydrocarbon producing countries, will rally its member countries including Africa’s top oil and gas producers Nigeria, Equatorial Guinea and Algeria to participate at AEW 2022 and discuss continental energy market trends, opportunities and the role its member states can play to ensure global energy security.

 

AEW 2022 will host panel discussions, round tables, presentations and high-level meetings about how Nigeria and APPO member states can improve exports to Europe whilst addressing energy poverty at continental level.

Distributed by APO Group on behalf of African Energy Chamber.

For sales related inquiries please contact sales@aecweek.com
For attendance related inquiries contact registration@aecweek.com
For speaker related inquiries contact speakers@aecweek.com
For media related inquiries contact media@aecweek.com.

AEW 2022 is the AEC’s annual conference, exhibition and networking event. AEW 2022 unites African energy stakeholders with investors and international partners to drive industry growth and development and promote Africa as the destination for energy investments.

Industry Manufacturing
April 11, 2022 No Comments

Nigeria can operate oil, gas sector without expatriates, says SPE

Society of Petroleum Engineers (SPE) has said exploration, production and other operations in the Nigerian oil and gas industry can now hold without support from expatriates.

Nigeria had granted 126,893 quota licences to expatriates, who operated with 14,690 companies. In the oil and gas sector, the figure has dropped steadily as efforts are being made towards ingenious participation in the oil and gas sector.

The Chairman of Society of Petroleum Engineers (SPE) Nigeria Council, Prof. Olalekan Olafuyi, noted that the impacts of Covid-19 pandemic showed that the country could solely handle its oil and gas sector and indeed drive the development of energy transition.

Speaking ahead of a yearly lecture of the society, Olafuyi stated that in the short term, Africa must maximize opportunities created by the availability of gas as a transition fuel at least in the next 30 years to create jobs and generate capital for the adoption of cleaner forms of energy.

In the long-term, he added that Africa’s energy should purely be renewables powered, driven by advancements in hydrogen energy technology, solar, battery storage, and wind power.

Olafuyi said COVID-19 had a positive side where the industry ran with a completely indigenous workforce; showcasing that Nigeria has developed the capacity to run the industry.

“The pandemic has shown that we have developed competence locally in terms of the workforce and vendors providing services. With proper legislative frameworks and implementation, homegrown innovations could foster effective energy transition at the lowest possible cost. This would strengthen our economy in the long run.

“Now, any investor would be confident that they could venture into business with locally available competencies without any need for expatriates who are relatively more expensive to maintain in terms of labour costs,” he stated.

Olufuyi, while speaking on the Petroleum Industry Act, noted that the PIA has re-established the confidence the industry has in the government for sustainable and competitive oil and gas industry as investment interest deepens with confidence.

Speaking further on cost-cutting options, SPE noted that cost-cutting in the form of layoffs should be avoided unless it is seen by all parties as the only solution, adding that there is need to continue to push ideas and opinions that drive best practices.

“We recently hosted a summit in Port Harcourt, attended by policymakers, power sector companies, regulators, etc. where a roadmap was drafted and presented to the government, in solving sector’s power challenges,” he said.

Advising the country to expand local capacity beyond oil and gas, Olafuyi said dependence on indigenous competence across sectors should be up to 80 per cent.

He noted that SPE, in the last 10 years, had witnessed significant increase in the number of its flagship events, stressing that while the society had two flagship events in 2012, today it has moved to five in addition to several activities.

Olafuyi said there is a need to develop the Nigerian National Petroleum Company into the likes of Saudi Aramco, especially with the models as defined by PIA, which is aimed at building a strong economy for Nigeria and Africa in a wider scope.

He said SPE’s Oloibiri lecture series and energy forum 2022 would focus on diverse conversations on investments in the oil and gas industry.

Olafuyi added, “To accelerate the energy transition, we believe in homegrown pragmatic solutions suited to our environment and our nation-building. We need to evolve considering our environment. Even though Nigeria and Africa are not the major contributors to CO2 emission we still act as though we were and hence advocate for cleaner forms of energy, to support the transition.”

“You can see this in the gains being recorded by the NLNG and the Federal Government declaring this decade as the decade of gas. SPE would always advocate best practices and not borrowed or copied practices to sound politically correct. We are apolitical but demonstrate strong commitments to our environment and sustainable development.”

Manufacturing
January 25, 2022 No Comments

Nigerian billionaire, Femi Otedola visits Dangote Petrochemical Plant

Nigerian billionaire, Femi Otedola paid a visit to the Dangote Petrochemical Plant located at Ibeju Lekki Lagos, Nigeria on Saturday 22nd January 2022.

The Nigerian billionaire and philanthropist visited the plant alongside the President of the African Development Bank, Mr Akinwumi Adesina and his wife Mrs Adesina.

He made this known through a post on his official Instagram handle, which shows pictures of himself, Aliko Dangote, Akinwumi Adeshina, and his wife at the $2 billion petrochemical plant on Saturday.

His post read, “yesterday I visited the 8th wonder of the world, The Dangote Petrochemical Plant, in the company of the African Development Group President, Mr Akinwumi Adesina and his Wife, Mrs Adesina🙏🏾 …F.Ote💲”

Meanwhile, the Nigerian billionaire recently pledged a sum of $250,000 to the Nigerian National football team, they are able to win the African Cup of Nation (AfCON).

About the Dangote Petrochemical plant

  • The Dangote Petrochemical Plant is housed in the Petrochemical complex which is also where Dangote Oil Refinery is located.
  • It covers a land area of approximately 2,635 hectares (six times the size of Victoria Island).
  • The plant was built to cater for the demands of the growing plastic processing downstream industries; not only in Africa, but also in other parts of the world and is expected to drive investment in the downstream industries massively, generating huge value addition in the country, generate employment, increase tax revenues, reduce foreign exchange outflow and increase the Gross Domestic Product (GDP) of the country.
  • The plant would produce 77 different polypropylene and it is expected that in the future, the petrochemical plant  would embark on the production of polyethylene products.

Source: Nariametrics

Power
January 25, 2022 No Comments

TotalEnergies recommits to clean energy, rebrands lubricants

TotalEnergies has reaffirmed its commitment to clean energy even as it rebrands its lubricants.

As a major player in lubricants globally, TotalEnergies designs and sells high-performance products for the automotive, industrial, and maritime sectors.

Speaking at the launch of the lubricant yesterday, Managing Director, TotalEnergies, Dr Seye Samba, said new colours, new labels and a more ergonomic design, are what consumers will find in the market.

Dr Samba said: “We are a leading global manufacturer and marketer of lubricants, with 42 production sites around the world. Here in Nigeria, we have our lubricant and bitumen blending plants in Lagos and Koko, Delta State.

“We have lubricant storage plants in all parts of the country as well as employees that are committed to providing energy that is more affordable, cleaner and more reliable as well as accessible to as many people as possible.”

In addition to new design, he said the lubricants division contributes to the company’s ambition to offer cleaner energy, adding that a reduction in the weight of cans will prevent the emission of 9,500 tons of CO2 equivalent each year owing to raw materials savings.

With these new cans, he said consumers can identify the product they need at a glance, due to the color coding.

“The colour codes show platinum for top-tier, silver for mid-tier and bronze for entry range products. Buyers can then zoom in on the product they need by checking the new label, which is much clearer and easier to read”, he added.

Power
January 25, 2022 No Comments

More FIDs in LNG projects amid rise in gas price

There are indications that about 79 million tonnes per annum (MMTPA) of additional Liquefied Natural Gas will see the final investment decision (FID) this year.

While Africa may not witness significant growth in LNG projects in the course of the year, projections by a global research body, Wood Mackenzie for the year 2022, noted that 33 MMTPA volume of FIDs is expected in North America, 16 MMTPA in Qatar, and 20 MMTPA in Russia.

Wood Mackenzie noted that LNG projects would continue seeing plenty of momentum as LNG prices are expected to be structurally higher and oil indexation on the rise.

The analyst expects 79 million tonnes per annum (MMTPA) of additional LNG to take the final investment decision (FID) over the next two years, including 33 MMTPA in North America, 16 MMTPA in Qatar, and 20 MMTPA in Russia.

According to the company’s projections, while oil indexation in long-term LNG contracts has been on a declining trend for the past 10 years, 2022 would be a turning point for LNG oil-indexed contracts, with the level of indexation firmly on the rise.

It noted that while Asian LNG spot prices are expected to average close to $15/mmbtu over the next five years, the current level of oil indexation (and oil prices) would result in a $7/mmbtu yearly average discount over spot LNG.

“Inevitably, demand for long-term contracts will increase, pushing oil indexation levels up,” WoodMac said.

According to the body, contracting requirements remain different across the next 10 years, adding that through to 2025, limited uncontracted supply availability is fuelling concerns regarding the security of supply, pushing oil-indexed levels up.

Beyond 2025, price upside would be kept in check by the increased availability of uncontracted supply from Qatar and Russia, uncertainties about long-term demand from legacy northeast Asia buyers, and competitive Henry Hub plus contracts, the body said.

Vice president at Wood Mackenzie, Valery Chow said: “2021 saw the return of contracting activity to its highest levels over the last five years. Asia accounted for 85% of global contracts signed, with China leading the pack.

“We expect LNG contracting activity to remain strong in 2022. Chinese buyers are again expected to lead the way and account for most of the new long-term contracts signed. On the other hand, we expect more muted activity from Japanese buyers. Despite high spot prices, long-term contracting for Japan is anticipated to continue softening in the face of energy transition uncertainties and greater confidence in the trading capabilities of the major buyers.

“Hybrid and Henry Hub-linked contracts are expected to remain in vogue in 2022 due to the price benefits of Henry Hub contracts and availability of new US supply. In contrast, we expect few long-term JKM-linked deals as buyers remain fearful of the associated price volatility.”

The body listed weather dynamics and the timing of Nord Stream 2 start-up as the key determinants of gas prices in 2022, noting that at current levels of Russian exports and considering normal weather conditions, European storage inventories would get below 15 billion cubic metres (bcm) by the end of March, a record low.

It stated further that prices would eventually come down as the winter is through, but requirements to refill storage facilities would be high, some 20-25 bcm more than last year.

Wood Mackenzie added that the commissioning of Nord Stream two might well be the only option to refill storage and avoid a repeat of last year’s winter crisis.

Vice president at the firm, Massimo Di Odoardo said: “But things could get a lot worse. A cold winter could add up to 10 bcm of additional gas demand, pushing storage inventories to zero before the end of March. And the commissioning of Nord Stream 2 could be stopped altogether if tensions between Russia and Ukraine escalate, as the German government has recently warned.

“Normal winter weather and visibility on Nord Stream 2 commissioning would push prices down, although demand for storage (and high carbon prices) will maintain prices above US$15 per metric million British thermal units (mmbtu). But a cold winter and continued uncertainty about commissioning of Nord Stream 2 could see prices doubling, again.”

Source: The Guardians 

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November 29, 2021 No Comments

Niger Delta minister says region contributes 80% of nation’s resources

Minister of State for Niger Delta Affairs, Sen. Omotayo Alasoadura, has said the region contributes over 80 per cent of the nation’s resources and about 95 per cent of foreign exchange earnings.

Alasoadura, who stated this yesterday in Texas, United States of America (USA) while speaking on investment opportunities in the Niger Delta Region, told the audience that over 95 per cent of oil and gas activities in Nigeria take place in the Niger Delta.

According to the minister, the region is home to three refineries, a liquefied natural gas plant, a petrochemical complex, a steel plant and an aluminium smelting company and a large fertiliser company.

“Furthermore, the region hosts a number of oil-servicing companies, in addition to the oil majors operating in the area and some local oil exploration companies. It also has an Export Processing Zone and an Oil and Gas Free Zone. He added.

Alasoadura further disclosed that the region warehouses massive oil and gas deposits with average productivity of about 2.5 million barrels per day, including condensates.

“Today, the total recoverable reserves of oil and gas are estimated at about 34.5 billion barrels and 93.8 trillion cubic meters, respectively, he added.

He said the aim of the summit is to forge international economic cooperation for investment in the Niger Delta, adding that the summit will help to build institutional exchanges and promote foreign direct investments.

According to him, it is also an opportunity for Nigeria to explore avenues for the diversification of the economy as well as the provision of an effective bilateral opportunity between the private and public sectors of both nations.

With the summit, the minister noted that the nation stands a chance to attract investors and investments from the USA into the economy.

Source: Guardian 

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