Energy

Trident Energy’s ongoing offshore campaign in Equatorial Guinea continues to progress with the successful installation this month of a new gas lift distribution unit (GLDU) at Ceiba. This notably follows the successful completion on the field of a deep offshore hot tapping operation in April this year, and the start of a three-well drilling campaign last June. The installation of a new GLDU was necessary in order to replace the existing one where gas leaks were detected on the seabed four years ago when Trident Energy and Kosmos Energy acquired The Ceiba & Okume complex on Block G from Hess. Ceiba and Okume are two of the Gulf of Guinea’s most attractive brownfield assets. Earlier this year, Panoro Energy completed its acquisition of Tullow Oil EG, securing in the process a 14.25% non-operated working interest in Block G.   Ceiba relied on 16 production wells and 10 water injectors as of 2020 and its contract expires in 2029. On the other side, Okume relies on 32 production wells and 12 water injectors and its contract expires in 2034. Source: Kosmos Energy The 2021 drilling campaign focused on three new wells: Elon-C, Elon-A and Elon-D. Moving forward, production over 2023-25 could then be further increased if driven by facility upgrades, well workovers, perforation of behind pipe zones and infill drilling. Full details on the Ceiba & Okume Fields Development (Block G) are available in the “Projects” section within your Hawilti+ research terminal.

Earlier this month, the shareholders of Kipeto Energy Plc arranged a $10m pioneering loan agreement with The Nature Conservancy (TNC) to finance human-wildlife initiatives around Kenya’s second biggest wind farm. The 100 MW Kipeto wind energy facility started commercial operations earlier this year and is developed by BTE Renewables, an Actis company, along with its local partner Craftskills Wind Energy International. The arrangement of this new loan is a first for Africa’s wind power industry and will see the implementation of several conservation initiatives, further demonstrating new models of funding for the sector. The funding will notably support the project’s biodiversity action plan (BAP) that seeks to improve the livelihoods of the Kajiado communities by creating jobs and building improved predator-proof animal enclosures for local farmers. “BTE and TNC designed the investment via a $10 million fixed-rate mezzanine loan to the project, alongside a commitment by the project to provide annual funding for critical conservation initiatives throughout the life of the wind power project,” BTE Renewables said in a statement. Full details on the Kipeto Wind Farm are available in the “Projects” section within your Hawilti+ research terminal.

Sonangol, Total Eren, and Greentech – Angola Environment Technology Ltd (Greentech) have announced that they executed last week the Shareholders Agreement establishing their partnership on the 35 MWp Quilemba Solar project in Angola. According to the agreement, Sonangol will be acquiring a 30% interest in Quilemba Solar Lda, while Total Eren and Greentech will own 51% and 19% respectively. The plant will be constructed in Lubango, capital of Angola’s Huíla Province. It has been in the making since late 2020, when Total Eren and Greentech signed a Memorandum of Understanding (MoU) with the Angolan Ministry of Energy and Water (MINEA) for the its construction and operation. Quilemba Solar is one of many utility-scale solar projects currently being developed in Angola, in line with the country’s vision to commission up to 500 MW of renewable energy capacity between 2022 and 2025. Italian major Eni is also involved in the development of a 50 MW solar PV plant in the country at the Bibala Municipality in the Namibe Province under a joint-venture with Sonangol called Solenova. Earlier this year, the consortium of Sun Africa, MCA Solar Angola and Hitachi ABB Power Grids also broke ground on 370 MW of solar PV projects in the country. These are split across seven different facilities now under-construction, including the 188.88 MWdc Biopioa solar plant and the 96.70 MWdc Benguela solar plant. Last month, Sun Africa took its commitment to Angola a step further with the signing of a memorandum of understanding for the development of Africa’s largest mini-grid and rural electrification project at a cost of $1.5bn. Full details on Sun Africa, Total Eren and Solenova’s solar projects in Angola are available in the “Projects” section within your Hawilti+ research terminal.

Kosmos Energy has just announced the close of a transaction by which it has acquired an additional 18% in the Jubilee Field and an additional 11% in the TEN Fields in Ghana from Occidental Petroleum (OXY) for a price of $550m. Both assets were previously chased by TotalEnergies as part of its broader acquisition of Anadarko Petroleum’s assets in Africa. However, the French major and OXY had mutually agreed in May 2020 to execute a waiver of the obligation to purchase and sell them, so that OXY could begin marketing their sale to other third parties. Both fields are served by a different floating, production, storage and offloading (FPSO) vessel and are operated by Tullow Oil. Jubilee achieved first oil in 2020 and produced an average of 71,000 barrels of oil per day (bopd) in Q2 2021 with production currently increasing as a result of an ongoing drilling campaign. TEN achieved first oil in 2016 and produced an average of 37,000 bopd in H1 2021. Source: PIAC Kosmos Energy is familiar with both assets and has been present in the licences since the exploratory phase several years ago. Subject to pre-empty rights, the transaction could increase the company’s interests in Jubilee to 42.1% and in TEN to 28.1%. Both projects have significant remaining potential and form the core of Tullow Oil’s growth and cash generation strategy this decade. “The acquired assets are expected to generate about $1bn of free cash flow by the end of 2026 at $65/bbl Brent,” Kosmos Energy said in a statement. The American independent also expects payback in less than three years if oil prices remain at an average of $65/bbl or above. By simplifying the partnerships that run both fields, maintaining the pace of investments to develop additional reserves is also expected to be easier. A key focus will notably be on additional gas monetization from both fields in order to support Ghana’s gas-to-power industry. Full details on both the Jubilee and TEN Fields Development are available in the “Projects” section within your Hawilti+ research terminal.

With a new record-high oil revenue in Q3 2021, Angola has collected over Kz 4.2 tn in oil revenue this year so far, data compiled by Hawilti from the country’s Ministry of Finance shows. This is already higher than its oil revenue target of Kz 4.059 tn set within its 2021 budget. “In the first nine months of 2021, Angola had already collected more revenue from oil than it did in twelve months in 2019 and 2020,” said Mickael Vogel, Head of Research at Hawilti. Angola is known for being conservative and realistic in its budget estimates and had set its oil price reference for the year at $39/bbl. In comparison, the Girassol Blend started the year at $55.84/bbl on average in January and stood at over $74/bbl on average in September, according to OPEC data. This explains why despite decreasing output, Angola has posted a strong performance in oil revenue collection this year. Source: Ministry of Finance The country’s total ordinary petroleum receipts comprise of the IRP (petroleum income tax), the IPP (tax on petroleum production), the ITP (tax on petroleum transactions) and additional concessionaire’s revenue. Angola’s ability to meet its oil revenue target notably contrasts with that of Nigeria. Just last week, President Buhari declared that the Federal Government of Nigeria’s share of oil revenue was 51% below target as of July 2021 due to disappointing production levels. However, and despite strong oil revenue collection, Angola’s oil sector continues to underperform due to lack of investments in the past decade. Oil production in 2021 was initially budgeted at an average of 1,220,400 bopd before it was revised down in the middle of the year to 1,193,420 bopd.

Nigerian energy infrastructure conglomerate, Sahara Group, has announced an investment of $1bn into Africa’s liquefied petroleum gas (LPG) value chain during the African Refiners and Distribution Association (ARDA) conference 2021 in South Africa this week. “Sahara, through its subsidiary, WAGL Energy Limited is already working towards investing $1 billion to ramp up its LPG fleet and terminal infrastructure over the next five years. In addition to the vessel fleet, Sahara is in the process of building over 120,000 metric tonnes of LPG storage in eleven countries,” he said. In October 2020, Sahara and Côte d’Ivoire’s national oil company PETROCI notably broke ground on a new 12,000 MT LPG storage terminal on the outskirts of Abidjan. The company has also earmarked additional such projects in Nigeria, Senegal, Ghana, Tanzania and Zambia while considering additional investment elsewhere on the continent.

Fugro has been awarded a monitoring contract by Saipem that will see it deploying its InclinoCam® vision technology for the Greater Tortue-Ahmeyim gas project offshore Senegal and Mauritania. The project involves the development of 15 trillion cubic feet (Tcf) of gas discovered on the maritime border between Senegal and Mauritania via a 2.45 million tonnes per annum (mtpa) floating LNG (FLNG) unit in Phase 1 where first gas is expected in Q3 2023. Fugro will start executing its contract with Saipem from December this year and will install more than 190 piles over 6 months from a jack-up barge. “Fugro’s rapid precise positioning will provide actionable Geo-data on the monopile inclination to accelerate the project schedule and a touchless solution that is much safer than conventional monitoring,” the company said in a statement today. Full details on the Greater Tortue Ahmeyim (GTA) LNG project are available in the “Projects” section within your Hawilti+ research terminal.

BW Energy has been provisionally awarded two offshore exploration blocks in Gabon as part of the country’s 12th Offshore Licensing Round. The company will be operator of blocks G12-13 and H12-13 with a 37.5% interest along with VAALCO Energy (37.5%) and Panoro Energy (25%). “The PSCs will have an exploration period totaling eight years which may be extended by a further two years. The partners have committed to drilling exploration wells on the blocks during the exploration period and intend to carry out a 3D seismic acquisition campaign on both blocks,” BW Energy said in a statement this morning. The selection of both blocks is not random for the three companies who already have a strong footprint in the Gulf of Guinea. Both PSCs are adjacent to BW Energy’s Dussafu Marin permit (operator, 73.5%) where production is expected to average 12,800 barrels of oil per day (bopd) this year and where BW Energy is planning two exploration wells per year for the coming five years. They are also adjacent to VAALCO Energy’s Etame Marin PSC (operator, 63.6%) where production averages 20,000 bopd. VAALCO is currently preparing a drilling campaign at Etame for which it has contracted an affiliate of Borr Drilling to drill at least two development wells and two appraisal wellbores with options to drill additional wells. Finally, Panoro Energy has been increasing its presence in the region: the company is already a non-operating partner on Dussafu Marin in Gabon where it acquired an additional 10% earlier this year along with a 14.25% in Block G in Equatorial Guinea where Trident Energy operates the Okume and Ceiba complex. Full details on the Dussafu Marin and Etame developments in Gabon and on Block G (Okume & Ceiba) in Equatorial Guinea are available in the “Projects” section within your Hawilti+ research terminal.

Decklar Resources has announced it has entered into a non-binding letter of intent to purchase all of the issued and outstanding shares of Wesfield Exploration and Production. Westfield E&P is the Nigerian entity that holds a Risk Finance and Technical Services Agreement (RFTSA) with Erebiina Energy Resources, the recent winner of the Emohua Marginal Field (OML 22) during Nigeria’s 2020/2021 Marginal Fields Bid Round. Erebiina is operating the Emohua field with a 60% interest. “Emohua has a considerable infrastructure advantage with existing oil and gas export pipelines in close proximity. This will allow Decklar to use an Early Production Facility (EPF) after the Emohua-1 re-entry well as part of a fast-track development plan to realize near-term cash flow,” the company said in a statement. Decklar has been increasing its footprint across Nigerian marginal fields over the past two years. In 2019, its Nigerian subsidiary Decklar Petroleum entered into a Risk Service Agreement (RSA) with Millenium Oil and Gas Co. to provide technical, financial and operational support needed to develop the Oza Marginal Field on OML 11. Drilling is ongoing there, with the Oza-1 well expected to be put back on production before the end of the year. In July 2021, Decklar continued its acquisition spree by completing a Share Purchase Agreement (SPA) to acquire Purion Energy, the Nigerian entity that holds a RFTSA with Prime Exploration & Production in respect of the Asaramatoru Marginal Field (OML 11). Decklar has so far focused on drill-ready assets located in close proximity to existing and operational oil and gas evacuation infrastructure. “The M&A deals space in Nigeria is very hot at the moment especially onshore and in shallow waters,” said Mickael Vogel, Head of Research at Hawilti. “Investors are especially looking at the market’s brownfield opportunities which offer tremendous upside potential and the ability to cash in very quickly. While everyone is focusing on transactions involving IOCs’ divestments, other juniors and independents are quickly moving to get a foothold over smaller assets that can be put on production within 12 months or less.” Details on the development of the Oza and Asaramatoru Marginal Fields are available in the “Projects” section within your Hawilti+ research terminal.

by Hage G. Geingob, President of Namibia, Office of the President of Namibia for the World Economic Forum Namibia launched its Second Harambee Prosperity Plan (HPPII) in March 2021. The country is on course to develop a green and blue economy as articulated under the economic advancement pillar of the plan. By electrifying key parts of its economy, the Namibian government will spur unprecedented economic activity and growth for citizens. In March 2021, as I launched Namibia’s Second Harambee Prosperity Plan (HPPII), I reflected on the need to emphasize the importance of multilateralism in our efforts to foster an enduring economic recovery. Namibia’s policy on international relations and cooperation is anchored in multilateralism because our very independence was a product of international solidarity. We are a nation that was midwifed by the United Nations. It is for this reason that as we crafted our green economic recovery plan; we knew that it had to build a more sustainable future for our children and their children. Namibia is a small, open economy that is impacted by independent intervening variables, including climate change and its disruptive consequences. Our economy is heavily reliant on the agricultural sector, which employs more than 20% of our labor force. Namibia experiences recurrent droughts, the most recent of which have been recorded as the worst in history. These droughts can be linked to climate change, which according to the 2021 Intergovernmental Panel on Climate Change (IPCC) report, is unequivocally a man-made phenomenon. Therefore, Namibians must play a role in crafting climate-change solutions, not just for the sake of our citizens, but indeed for the global community at large. Accordingly, Namibia is poised to tackle climate change, by establishing a green economy that will drive our economic recovery as envisioned for African countries by African Heads of State during the launch of the African Union Continental Green Recovery Action Plan. In this context, we have ambitious plans to develop green and blue economies as articulated under the economic advancement pillar of our HPPII. The feasibility of these plans is underscored by the abundant availability of sunlight throughout the year and proximity to billions of cubic meters of seawater and vast marine resources in the Atlantic Ocean. We have the potential to capture around 10 hours of strong sunlight per day for 300 days per year. As a result, Namibia has some of the highest solar irradiance potential of any country in Africa, which is sufficient to provide power for our people and our neighbours. It is with this potential in mind that we have entered into a partnership with the Government of Botswana and the United States – under the auspices of USAID’s Power Africa – which culminated in the signing of a Memorandum of Intent in April 2021. With support from the global community, we intend to utilize the abundance of sunlight to produce solar power for our own benefit and for our neighbours. The generation of solar power will complement Namibia’s available green energy portfolio, such as hydro-electricity, which already constitutes more than two-thirds of our installed power capacity. Electrifying key parts of our economy and of our neighbours will spur unprecedented economic activity and growth for Namibia and Southern Africa. A Green Hydrogen Economy It is well known that clean electricity is not available in sufficient quantities to adequately supply global demand. This challenge was underlined in the Net Zero by 2050 report published by the International Energy Association (IEA), which noted that hard-to-abate sectors – like cement, steel and chemicals, road trucking, container shipping, and aviation – will need green hydrogen if the world is to remain on course to achieve climate neutrality by 2050. Namibia is better-positioned resource-wise, as well as having the political will to answer that clarion call. To produce green hydrogen competitively a country would need world-class transmission infrastructure, international port facilities, world-class wind and solar resources, access to sustainable sources of clean water (without displacing existing consumers), lots of land and a conducive legislative environment. These are all ingredients that Namibia has. Already, our country is home to the largest desalination plant in Southern Africa, meaning that the conditions for producing abundant clean water in a desert country are conducive. Once Namibia has successfully incubated the green hydrogen economy, it will enable the country to become a supplier of energy, rather than an importer. Judging from the scale of the initial proposals submitted to Namibia by interested investors, these renewable projects, relative to the size of Namibia’s economy, will be greatly transformative to the Namibian economy. Currently, at its peak, the economy consumes about 640 megawatts of power per annum whereas the proposals presented to government entail investments that could produce 10 times that amount of peak generation capacity in the next 10 years. But Namibians will not have to wait until 2030 to start enjoying the benefits of our green revolution because construction of the pilot plants will begin within the next 12 months. A New Frontier The required infrastructure for power trading already exists. About 40% of Namibia’s power currently comes from South Africa and is primarily driven by coal-fired power plants. We imagine a reality where Namibia exports clean energy to South Africa thereby assisting the Southern African region to decarbonize. Namibia also boasts world-class port infrastructure in the cities of Luderitz to the south, and Walvis Bay to the east. Renewable electricity, and green hydrogen and its derivatives, provide Namibia with a real opportunity to attract meaningful foreign direct investment, create well-paying jobs, further diversify its export basket, and improve its terms of trade. Therefore, the development of a green and blue economy, as well as a green hydrogen industry, are some of the cornerstones of the HPPII. As Namibia embarks on this new frontier, it is imperative that its vision of shared prosperity on the national, regional and global levels is realized. Meaning that we do not neglect those without access to political and economic power today nor exclude those who currently rely on carbon fuels. COVID-19 has already widened the existing chasm of inequality, a scourge Namibia is all too familiar with.

Through the Africa Infrastructure Fund, A.P. Moller Capital has just acquired a 44% stake in Cabeólica S.A., which runs four wind farms on the islands of Santiago (9.35MW), São Vicente (5.95MW), Sal (7.65 MW) and Boa Vista (2.55 MW) in Cabo Verde. The stake was acquired from the Africa Finance Corporation (AFC), who has been part of the project since 2020. The AFC will continue to hold a 50% stake in Cabeólica, alongside the Government of Cape Verde and its national utility Electra, who together own the remaining 6% stake. The Cabeólica wind farms were sub-Saharan Africa’s first wind power public-private partnership (PPP) project upon their commissioning in 2011. Back then, Cabo Verde’s electricity generation relied heavily on imported diesel, which came at significant financial and environmental costs. Consequently, the development of 25.5 MW of wind power generation capacity not only helped the archipelago reach its renewable energy targets, but also decrease its national electricity bill. The PPP took shape in the late 2000s with an agreement between InfraCo Africa, Cabo Verde’s Ministry of Tourism, Industry and Energy, and Electra SARL, the local electricity concessionary company. The partnership welcomed the Africa Finance Corporation (AFC) and the Finnish Fund for Industrial Cooperation as strategic partners and majority investors in Cabeólica S.A. in 2010, and reached financial close the same year. It resulted in the development of four different windfarms for a total installed capacity of 25.5MW. 30 Vestas model V52-850kW wind turbines were installed, along with four substations and 33.5km of power cables. The onshore wind farms represent Cabo Verde’s first independent power producer (IPP) project and have all been successfully operating since 2012. Cabeólica was recognised by the United Nations Framework Convention on Climate Change (UNFCCC) as a Clean Development Mechanism (CDM) project in 2013. A.P. Moller Capital has been increasing its investment across sub-Saharan Africa’s power industry this year. In April, it notably acquired Iberafrica Power from Naturgy and took control of its 52.5 MW thermal power plant in Kenya. A month later, it established a new joint-venture with Reunert called Lumika Renewables to develop of portfolio of cost efficient renewable energy solutions across the continent.   Details on the Cabeólica Wind Farms are available in the “Projects” section within your Hawilti+ research terminal.

A groundbreaking ceremony was held over the weekend for the 50 MW Maiduguri & Environs Emergency Power Project (MEPP), in presence of Borno State Governor, Prof. Babagana Umara Zulum and the NNPC Group Managing Director Mallam Mele Kyari. The contract for the project had been signed last month with the China Machinery and Engineering Corporation (CMEC) and GE, acting respectively as EPC contractor and supplier of the plant’s gas turbines.

TotalEnergies has delayed the commissioning and first gas at its $20bn Mozambique LNG project from 2024 to 2026 following the declaration of Force Majeure earlier this year. The 12.88 million tonnes per annum (mtpa) onshore terminal reached FID in 2019 and was under-construction when the Islamist insurgency in Cabo Delgado in the north of Mozambique forced TotalEnergies to shut down activity. This leaves the southern African country with only one LNG terminal to be commissioned in the first half of this decade, Eni’s Coral South FLNG. The project relies on a floating LNG (FLNG) vessel and is unaffected by instability and insurgency around the city of Palma. The 3.4 mtpa FLNG unit is expected to start producing gas in 2022 with a final investment decision (FID) on phase 2 expected before 2030. Meanwhile, there is still no visibility on the future of the 15.2 mtpa Rovuma LNG onshore terminal where FID was expected to be taken by ExxonMobil and Eni in 2020 but was also delayed following changing market dynamics and the Covid-19 pandemic. Mozambique entered the current decade with firm ambitions to become a major LNG exporter by 2025. The country was expected to reach a double-digit growth of 11.1% in 2024 and 2025 following the commissioning of Mozambique LNG. Such revisions will now have to be revised downward. Details on the Coral South FLNG, Mozambique LNG and Rovuma LNG projects are available in the “Projects” section within your Hawilti+ research terminal.

Earlier today, Chariot signed a memorandum of understanding (MoU) with the Mauritanian Ministry of Petroleum, Mines & Energy to progress Project Nour, a potential green hydrogen development of up to 10 GW. Under the MoU, Project Nour has been given exclusivity over 14,400km2 of onshore and offshore area where pre-feasibility and feasibility studies will be conducted to generate solar and wind power used in electrolysis to split water and produce green hydrogen and oxygen. This deviates from the traditional splitting method that uses natural gas. “Benefiting from Mauritania’s world class solar and wind resources, Project Nour has the potential to allow Mauritania to produce the cheapest green hydrogen in Africa and to become one of the world’s main producers and exporters of green hydrogen and its derivative products, close to potential large European markets,” Chariot said in a statement today.

During its 342nd period meeting under the chairmanship of H.E. Dr. Muhammad Al Jasser on Sunday, the Islamic Development Bank has approved $20.15 million for a rural electrification project based on mini solar power plants in Togo. In addition, the IsDB announced that its Lives and Livelihoods Fund provided $10.85m to improve the level of human development in Togo by delivering sustainable supply of electricity to the rural population of Togo. It benefits 372 schools, 22, 092 families, and 102 health centers. The Jeddah-based institution is a traditional partner of Togo’s electrification agenda. It has notably already released $49m in the form of loans to support projects in the north of the country, including the extension of the 161 kV high voltage network of the CEB from Dapaong to Mango.

Earlier this year, the consortium of Sun Africa, MCA Solar Angola and Hitachi ABB Power Grids broke ground on 370 MW of solar PV projects in Angola. These are split across seven different facilities now under-construction, including the 188.88 MWdc Biopioa solar plant and the 96.70 MWdc Benguela solar plant. These are developed under a $650m integrated solar project that sees Sun Africa acting as developer while the MCA Group is the EPC contractor and Hitachi ABB Power Grids the original equipment manufacturer. The scheme benefits from a €560m export credit from Sweden and is also financed by K-Sure of South Korea and the Development Bank of Southern Africa (DBSA). The facilities will be mostly supplied by Swedish contractors, from substations to steel frameworks, with Hitachi ABB Power Grids in Sweden delivering 50% of the Swedish scope of work. The rest will come from NEXTracker’s facility in Fremont (California) and Sun Africa’s facility in Miami (Florida). But Sun Africa took its commitment to Angola a step further this week with the signing of a memorandum of understanding for the development of Africa’s largest mini-grid and rural electrification project at a cost of $1.5bn. The MoU was signed between Angolan Minister of Energy and Water João Baptista Borges during a roundtable organized by the US Chamber of Commerce, in the presence of Angolan President João Lourenço. The project targets increased electrification rates in the provinces of Namibe, Cuando Cubango, Huila and Cunene via the development of mini-grid solar systems and the construction of new substations. The U.S. Exim Bank is expected to provide the bulk of financing. According to the International Energy Agency, less than half of Angola’s population had access to electricity in 2019. While the country has so far mostly relied on hydropower and thermal sources of energy, it also has a high solar resource potential, and its average annual global radiation is estimated at between 1370 and 2100 kWh/m2/year. With this resource, Angolan authorities believe they could install a solar power generation capacity of 55,000 MW. Details on the Benguela and Biopio solar PV facilities are available in the “Projects” section within your Hawilti+ research terminal.

Following Cuica in July this year, Eni has now achieved first oil from Cabaça North on Block 15/06 offshore Angola. Both fields are tied back to the Olombendo FPSO commissioned back in 2017 to initially develop the Cabaça Southeast and Cabaça Central UM8 fields on the license’s East hub. While Cabaça North was always going to be part of the East hub’s second phase of development, several additional fields were discovered by Eni over the past three years and are now being successfully tied-back under the company’s “infrastructure-led” exploration strategy (ILX). Source: MinFin Angola Ndungu will be the next discovery to achieve first oil within the coming months but tied back to the N’Goma FPSO on the block’s West hub. Meanwhile, Cabaça North will help in maintain output from Block 15/06 where production averaged only 100,000 bopd in H1 2021 compared to a combined capacity of 180,000 bopd across both FPSO vessels. Block 15/06 remains a very lucrative asset for Eni and Sonangol with strong upside potential. As of December 2020, 142.2m barrels had been produced from the West Hub (N’Goma FPSO) with remaining reserves estimated at 174m barrels, while 85.7m barrels had been produced from the East Hub (Armada Olombendo FPSO) where remaining reserves were estimated at 159.8m barrels. As part of its ongoing Partial Divestment Process, Sonangol is currently negotiating the sale of up to 10% of its interest in Block 15/06. Angola is currently sub-Saharan Africa’s most dynamic deep-water subsea market with majors such as TotalEnergies, Eni and BP involved in several subsea tiebacks and infill projects to maintain and increase output from existing production hubs. The country continues to be faced with declining output despite recent increase in production in July and August. Angola has produced an average of 1.143m barrels of oil per day (bopd) between January and August this year according to the ANPG. Its OPEC quota for September is set at 1.348m bopd. Full details on Block 15/06 are available in the “Projects” section within your Hawilti+ research terminal. More information on the Angolan oil & gas market is also available in Hawilti’s latest H1 2021 report on Angola.

Yesterday, the Gabon Power Company (GPC) signed a landmark Concession Agreement with Wärtsilä for the development, supply, construction, operation and maintenance of a new 120 MW gas-to-power project in Owendo, next to the capital city of Libreville. Wärtsilä will jointly lead the project with the GPC, a subsidiary of Gabon’s sovereign wealth fund FGIS via a new joint-venture called Orinko S.A. Under the agreement signed yesterday, Wärtsilä will build the plant under a full Engineering, Procurement, and Construction (EPC) contract and will then operate and maintain it under a long-term 15-year Operation and Maintenance (O&M) agreement. The EPC contract and the O&M agreement will be signed in 2022 with Orinko S.A. When commissioned, the plant will supply electricity to Société d’Energie et d’Eau du Gabon (SEEG), the Gabonese utility, under a 15-year Power Purchase Agreement. Gabon is currently looking at monetizing its gas across several industries, including power generation. The country already runs several gas-to-power facilities, including the 128 MW Owendo plant, the 105 Port Gentil plant and the 75 MW Alenakiri plant. Most plants are supplied in domestic gas by Perenco. The independent delivers gas on land and at sea through a 450km network of high-pressure pipelines and currently ensure the transport and delivery of 50 MMscfd of gas to the power plants of Port-Gentil and Libreville. The new gas-to-power plant with Wärtsilä also falls within Gabon’s ambition to increase power generation capacity across the country. In July this year, the GPC and Meridiam had already successfully reached financial close for the 35 MW Kinguélé Aval hydropower plant.  

Yesterday, Sonangol has officially laid the foundation stone for its landmark Barra do Dande Ocean Terminal (Terminal Oceânico da Barra de Dande, TOBD) in the Bengo Province north of Luanda. The infrastructure project has been in the making since 2013 but delayed several times by years of recession since 2016. It represents a massive step forward for Angola’s downstream sector and aims at turning Barra do Dande into the country’s main platform for the receiving, storage and distribution of petroleum products. Its official launch follows the award of key contracts this month to its EPCC contractor, the Brazilian Odebrecht, along with the supervision contract to DAR Angola and the Environmental Impact Study to SOAPRO. The terminal will be developed in phases and at a cost of $500m (Kz. 317 bn), ultimately targeting the construction and installation of 29 storage tanks connected to maritime infrastructure such as breakwater, berths and unloading lines. Its phase 1 will include 16 tanks with a combined storage capacity of 582,000 m3 of petroleum derivatives including diesel (320,000 m3), gasoline (160,000 m3) and LPG (102,000 m3) reserved for the domestic market, and will support 3,500 jobs during its construction phase. It involves three different units: the first one covers the development of the 16 storage tanks while the second one involves the construction of a petroleum products and LPG pipeline and the third one the construction of two berths with a total capacity of 150,000 DWT. A second phase will add an additional 13 tanks to bring total storage capacity to 782,500 m3 and enable the export of surplus petroleum products. The project fully integrates with Angola’s vision to expand downstream infrastructure. The country is currently expanding its Luanda Refinery while building three new refining facilities with the private sector at Cabinda, Soyo and Lobito. Once commissioned, these will be producing a surplus of petroleum products that can be exported by pipeline or ship to regional and global markets. Upon completion of those brownfield and greenfield projects, Angola will have multiplied its refining capacity by x9 and will be one of sub-Saharan Africa’s biggest refining hubs.

Before his departure to New York for the U.N. General Assembly on Sunday, President Muhammadu Buhari, in his capacity as Minister of Petroleum Resources, has directed the incorporation of the Nigerian National Petroleum Company (NNPC) Limited. This is in consonance with Section 53(1) of Nigeria’s newly signed Petroleum Industry Act 2021, which requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of commencement of the Act in consultation with the Minister of Finance on the nominal shares of the company. As a result, NNPC’s current Group Managing Director, Mele Kolo Kyari, has been directed to take necessary steps to ensure that the incorporation of the NNPC Limited is consistent with the provisions of the PIA 2021. Under the power granted by Section 59(2) of the PIA 2021, President Buhari has also approved the appointment of the Board and Management of the NNPC Limited, with effect from the date of incorporation of the company. The Chairman of the Board will be Senator Ifeanyi Ararume, while Mele Kolo Kyari will be Chief Executive Officer (CEO) and Umar I. Ajiya will be Chief Financial Officer (CFO). Other Board Members appointed over the weekend are Dr. Tajudeen Umar (North East), Mrs. Lami O. Ahmed (North Central), Mallam Mohammed Lawal (North West), Senator Margaret Chuba Okadigbo (South East), Barrister Constance Harry Marshal (South South), and Chief Pius Akinyelure (South West).

Angola’s national oil company Sonangol has posted a net loss of Kz 2,383,978,740,444, or the equivalent of $4.1bn for 2020. The crash of oil prices last year along with Sonangol’s impairments were the major reasons behind losses last year. The company continues to be involved in a major restructuring and divestment effort in order to rationalize its operational footprint and prepare for an IPO before 2025. Earlier this year, Sonangol notably launched its Partial Divestment Process (“Processo de Alienação Parcial”) to generate cash for the state coffers by divesting stakes in some of Angola’s key producing offshore blocks along with producing licenses in shallow water and offshore exploration zones. Deals on offer include up to 8.28% in Block 18, up to 10% in Block 15/06 and Block 31, 15 to 20% in Block 3/05 and Block 4/05, 30 to 65% in Block 5/06 and 30 to 70% in Block 23 and Block 27. Supported by the recovery in oil prices, this divestment exercise has generated significant interest amongst E&P players: while proposals were to be submitted by August 6th, Sonangol had to extend the deadline to access the data room until August 20th and extended the submission deadline to September 20th.

Canadian junior African Oil Corp. has announced today a new production plateau of 120,000 barrels of oil per day (bopd) from Blocks 10BB and 13T onshore Kenya, up from the previous estimate of 100,000 bopd. Both licenses are located within the South Lokichar basin and are known as Project Oil Kenya, which Africa Oil Corp. intends to develop with its current partners TotalEnergies and Tullow Oil. The revised target notably follows changes in the project’s development concept in order to make it more commercially and environmentally viable.  The revised project has also reduced the overall unit cost from $31/bbl to $22/bbl, making the project more attractive in a lower oil prices environment. Africa Oil expects a gross oil recovery of 585m barrels over the life of the field following the audit of the resource position by Gaffney, Cline & Associates. Phase 1 would initially target the development of the Ngamia, Ekales, Amosing and Twiga (NEAT) fields. Future phases would eventually focus on additional exploration potential within the 10BB/13T licenses while bringing the 10BA license acreage into production. Compared to the previous field development plan, we have a more economically robust project, which I am confident is more attractive to potential new partners. Keith Hill, President & CEO, Africa Oil Corp. The new development concept notably entails a 130,000 bopd facility along with an increase of the pipeline size from 18’’ to 20’’. The three joint-venture partners still expect to submit a final field development plan (FDP) by the end of this year in order to secure a license extension. However, the taking of a final investment decision (FID) is unlikely until they have secured a new strategic partner, likely to take over Tullow Oil’s stake in the project. As it stands, the project is expected to require $3.4bn in investment, including $2bn for its upstream component and $1.4bn for the pipeline. Project Oil Kenya has in fact already produced 450,000 barrels via an early oil pilot scheme that was operational from June 2018 to June 2020. Oil was produced from the Amosing and Ngamia fields then trucked from Turkana to Mombasa. Full details on Project Oil Kenya are available in the “Projects” section within your Hawilti+ research terminal.

by Grace C. WU, Smith Conservation Fellow, University of California Santa Barbara and Ranjit Deshmukh, Assistant Professor in the Environmental Studies, University of California Santa Barbara Seven years ago the Democratic Republic of Congo (DRC) proposed the Inga 3 – a 4.8GW hydropower project on the Congo River – with great fanfare. Third in a series of dams that would form the Grand Inga complex on the Congo river, the project was touted as a solution to southern Africa’s energy deficit woes and a way for the DRC to participate in regional economic development. Seven years later, development of Inga 3 has yet to begin. The project continues to be stymied by conflicts. For example, earlier this year, one of the partners, a Spanish company, pulled out of the consortium. But DRC president Félix Tshisekedi continues to push to revive the plans. According to South Africa’s Integrated Resource Plan (IRP 2019), the country plans to import at least 2.5GW of electric power from Inga 3 (or more than half of the original 4.8GW design), a commitment reiterated recently by South African president Cyril Ramaphosa. The largest remaining fractions of Inga 3’s electricity generation would be purchased by the mining industry in the DRC. Less than 10% of the electricity from Inga 3 is expected to supply the DRC’s residential electricity needs. Currently 90% of the population in the DRC lacks electricity access. Does Inga 3 make sense? We set out to answer this question in our research paper. We concluded that pursuing large hydropower dams in the DRC is financially risky for South Africa. We assessed the feasibility and cost-effectiveness of renewable energy alternatives to Inga 3 to serve the energy needs of both the host country, the DRC, and the main buyer, South Africa. Better alternatives The hydropower potential at the Grand Inga site on the Congo River, the largest remaining untapped hydropower potential in the world, has drawn the interest and attention of development banks and regional governments for the past several decades. But there’s been dramatic change in the energy sector in the past five years. In particular, the cost of alternative energy sources like wind and solar has changed the game for cost-competitive and sustainable energy generation that can be rapidly scaled up. There are more efficient ways to address severe energy deficits quickly and cost-efficiently. For example, wind projects take only one to three years to build and most solar photovoltaic projects take a year. Both incur lower costs than similar-sized hydropower projects, which take five to 10 years to build. The latest construction time estimate for the Inga 3 is eight years. Longer build times lead to greater costs due to interest on capital. And analysis of data from past large hydropower dams shows that these projects cost twice the amount they quoted before the start of the project. We found that, even without considering the large environmental and social impacts, the dam is an unsound investment based on plain economics. Options for South Africa In our study we compared alternative energy sources for South Africa, the largest potential buyer of Inga 3 electricity. We found that a mix of wind, solar photovoltaics, and some natural gas would be more cost-effective than Inga 3 to meet future demand. We reached this conclusion after examining the impact of several uncertain factors that could change overall costs. These included: Inga 3 performance, Inga 3 cost overruns, wind and solar performance, and the demand for electricity in the future. The only scenarios in which Inga 3 was more cost-effective were those that assumed significantly lower than average wind energy performance. In the case of the DRC, we found that wind and solar generated electricity would be cheaper than the World Bank-estimated price of electricity from Inga 3 for both retail customers in Kinshasa and mining customers in the Katanga province. These renewable energy technologies are more suitable for providing decentralised and off-grid access to electricity to DRC’s geographically dispersed population. The DRC has since proposed to more than double the initial capacity examined in our study. This would obviously change the economics described here, though President Tshisekedi has expressed preference for the original smaller 4.8GW proposal. Of course, economics should be only one of many factors to weigh when choosing energy technologies. Like many other mega hydropower projects, the Inga 3 has been fraught with potential severe social and environmental impacts. At least 35,000 people would be displaced by Inga 3 alone. The potential ecosystem impacts include the decline of fisheries upstream of the dam, threats to freshwater diversity and mangroves in the Congo delta, and reduced carbon sequestration through reduced organic sediment transport downstream to the ocean. Choosing a better course Time and resources wasted over the last decade entertaining a high-risk mega project that may not even be realised could have been fruitfully spent pursuing opportunities like wind and solar technologies that are cost-effective today. The DRC government and international financial institutions like the Africa Development Bank backing the Inga 3 can still change course to choose more sustainable and lower risk avenues to provide cost-effective access to energy and spur economic development. This article is republished from The Conversation under a Creative Commons License. Read the original article.

Globeleq has announced the completion of a ZAR 5.2 billion debt financing package for three of its renewable energy facilities in South Africa: the 138 MW Jeffreys Bay Wind Farm, and the 50 MW De Aar Solar and 50 MW Droogfontein Solar plants. The transaction falls under the Department of Mineral Resources and Energy’s (DMRE) Independent Power Producer Office (IPPO) Refinancing Protocol initiated in June 2020. The initiative works on a voluntary basis and targets IPPs from Bid Windows 1 to 3.5 of South Africa’s Renewable Energy Independent Power Procurement Programme (REIPPP). The initiative can include a wide range of options such as maintaining existing debt levels and structure but reducing margins; increasing existing debt levels; increasing debt tenor; converting Johannesburg Interbank Average Rate debt to Consumer Price Index debt; replacing reserve accounts with contingent facilities; replacing junior debt with senior debt introducing preference shares; and restructuring existing risk management strategy and hedging policies. Its end goal is to contribute to the lowering of the wholesale price of electricity. It had already resulting in South Africa’s largest infrastructure deal when the 50 MW Bokpoort CSP plant completed its refinancing in late 2020. The transaction had then created more favourable debt terms and effectively reduced the project’s cost of capital. Globeleq’s projects refinancing is the second transaction to be executed under the protocol. New financing structures effectively unlock reduced tariff to Eskom, which in turn directly impacts the cost of electricity for South African consumers. Globeleq’s refinancing operation, for which Absa acted as the mandated lead arranger and sole underwriter, will save ESKOM ZAR 1 billion in tariff reductions across the three assets over the remaining 12-year term of the power purchase agreements (PPAs). Details on REIPPP projects from Window 1 to 4 are available in the “Projects” section within your Hawilti+ research terminal.