Angola’s Oil and Gas Industry Continues to Provide Huge Opportunities for Investors, Despite Energy Transition – Verner Ayukegba
Over the past three decades, Angola has proven to be a tier one destination for major oil and gas producers. It is for that reason, that the country is host to all major International Oil Companies. As the world continues to debate what energy transition means and what the implications would be, Angola, like many other major oil producers will have to reaccess their oil and gas industry and ist potential to continue being a leading destination for energy investments. Offshore exploration, especially during the boom years of 2002 to 2008, led to oil production in Angola reaching close to 2 million barrels per day, providing Angola with much needed resources for its post-conflict reconstruction.
In light of the ongoing push towards decarbonization, a commitment by many countries, especially western industrialised nations, International energy companies and organisations towards achieving net zero emissions between 2030 and 2050, many have asked if Angola will keepits place as a choice destination for international energy companies.
In order to answer the above question on Angola’s investment attractiveness postively, the government, under the leadership of HE President João Lourenço initiated the National Development Plan 2018-2022 and the revised Hydrocarbon Exploration Strategy 2020-2025 – authorised by Presidential Decree 282/20. This seeks to intensify, research and geologically evaluate concessions and free areas of sedimentary basins for exploration in Angola.
In response to the growing chorus around energy transition, and how this will affect the oil and gas industry in Angola, the Ministry of Mineral Resources and Petroleum, headed by HE Diamantino Pedro Azevedo and other major stakeholders in Angola like the National Oil, Gas and Biofuel’s Agency (ANPG) and SONANGOL are all actively exploring ways of adapting their operations to reflect the new normal. Efforts are being made to encourage more efficient operations that will lead to a reduction in the carbon footprint of operators, lead to less waste, and also increase the commercial use of associated gas. The latter, is likely to increase significantly in importance as a major transition fuel over the next 20-30 years.
Natural gas acts as a key intermediary in the energy transition, releasing fewer emissions than coal and petroleum products, while being able to reliably supply energy to enable production at scale and offset the inherent intermittence of energies. renewables. The Ministry of Mineral Resources and Petroleum is currently leading an ambitious effort to monetize gas reserves by attracting investments into downstream infrastructure and gas-fired power generation projects. The establishment of the New Gas Consortium that represents Angola’s first major natural gas partnership, brings together Eni, BP, Chevron, Total and state-owned Sonangol. Through better use of this resource, natural gas will play a pivotal role not only in supporting Angola’s effort to increase access to electricity, but also in accelerating industrialization and the transition to cleaner energy sources.
It is the government’s hope, that this is only a first step to many more partnerships and a petrochemical industry. Commercialisation of gas can also lead to the establishment of a petrochemical industry that can produce fertilizer to boost agriculture in Angola and regionally. The government has already signalled that it is ready to grant attractive special concessions to major investors in refining and petrochemicals by granting a Gemcorp-Sonaref led consortium lucrative tax concessions to build the 60,000 barrel per day Cabinda refinery. The call for other investors to follow is loud and clear.
In the upstream space, a licensing round in line with Presidential Decree 52/19, which foresees yearly bid rounds until 2025 is ongoing. Angola’s regulator, the ANPG, is intent on attracting interest far beyond the traditional players in Angola’s oil and gas sector. Special attention has been given to attract mid-sized explorers to Angola’s basins that have proven prolific in recent years and provided returns for companies far beyond industry averages in other locations. Six licenses onshore Kwanza Basin and three licenses onshore Lower Congo Basin are currently on offer for this round.
Specifically, the construction of a US$2 billion gas processing plant in Soyo, led by the NGC, will produce refined gas in liquid form that will be directed for export to foreign markets and to the combined cycle power plant of the Soyo, producing energy for the national grid. Meanwhile, Angola’s LNG plant was the first to develop domestic natural gas resources and is one of the largest single investments in the Angolan oil and gas industry. Unlike most installations that use non-associated gas, this plant uses associated gas as a primary power source, thus contributing more significantly to the elimination of gas flaring, to the reduction of greenhouse gas emissions and to the promotion of environmental management. Both installations constitute a critical step on Angola’s path towards the sustainable and efficient use of its natural resources.
Angola, like many other African countries and other stakeholders globally, continues to believe, that there is a role for hydrocarbons in the age of energy transition. It is unreasonable, for western based organisations and governments, who have benefited tremendously from hydrocarbons, to demand of Angola and the rest of Africa that they immediately end the exploration and production of Hydrocarbons for the purpose of the word achieving its emission targets. Africa, with 16.72% of the world’s population, is responsible, according to the UN accounts for less than 3% of global carbon dioxide emissions from energy and industrial sources, compared to 15% for the USA, 16% for Europe and 28% for China. Furthermore, global demand for hydrocarbons is likely to be significant for at least another half a century even as it is expected to decline, according to numerous studies. Furthermore, many African countries like Angola depend significantly on revenue from hydrocarbons for the financing of education, healthcare and job creation. It is therefore unreasonable, to demand a speedy end of such a vital industry.
Natural Gas consumption and production in the USA has increased by close to 100% between 1990 and 2020. This has led to significant reductions in emissions in America, as many coal plants got replaced with gas. Gas has been good for America. It is also good for Africa and Angola. We must therefore support Angola in its quest to develop its gas resources, both for export and industrial use.
It is however important to note, that the Angolan government is committed to promoting renewables. As such, increasing amounts of the government’s expenditure towards expanding access to power are being committed to solar projects, in addition to incentivising public private partnerships in the sector. Italian oil company Eni, in partnership with Sonangol, is leading the construction of a 50 MW solar power plant in Namibe province, which is expected to start operations in 2022. Angola offers investors a unique opportunity to introduce capital, technology and best practices to meet the country’s growing energy demand as well as its development goals.
Angola’s vast opportunities in the development of natural gas and other energy sources will be on display during the upcoming Angola Oil & Gas 2021 Conference and Exhibition, September 9-10, in Luanda, developed in partnership with the Ministry of Mineral Resources and Petroleum. This unique event encompasses a dynamic campaign to promote the energy sector – led by the continent’s leading energy investment platform Energy Capital & Power, formerly Africa Oil & Power – which includes an investment report and documentary Africa Energy Series : Angola 2021, and a series of international representations designed to place Angola at the center of the attention of investors around the world.
Oando Clean Energy Partners with Lagos State to Launch Electric Mass Transit Buses
Oando Clean Energy Limited has partnered with the Lagos State Government to launch electric mass transit buses in the city. The partnership aims to provide sustainable transportation options for commuters and reduce carbon emissions in the city.
The electric buses, produced in partnership with Yutong Bus Co Limited, are equipped with air conditioning and Wi-Fi for passenger comfort. Oando Clean Energy has also provided charging stations and spare parts to ensure the effective operation of the buses.
The partnership was formalized through a Memorandum of Understanding (MoU) signed between Oando Clean Energy and the Lagos Metropolitan Area Transport Authority (LAMATA). LAMATA is responsible for planning, implementing, regulating, and franchising sustainable integrated public transport in Lagos.
According to the MoU, the electric buses will be deployed as part of a larger Electric Vehicle (EV) Infrastructure Ecosystem that includes charging stations and other supporting infrastructure. This initiative is aimed at attaining a sustainable road transport system in Lagos State and bridging the gap in the current mass transit bus system for the increasing number of Lagos commuters.
Oando Clean Energy’s strategic vision is to decarbonize the transport system in Nigeria and strengthen the socio-economic impact of transportation within the country. The company aims to transition the current combustion mass transit buses to electric over the next seven years, starting in Lagos State and eventually across the country.
The launch of the electric buses in Lagos State is aligned with the Nigeria Energy Transition Plan (NETP) and supports the Government’s roadmap for EV implementation across Nigeria. The partnership also aims to boost local capacity in the medium term through the construction of EV assembly plants.
Apart from reducing carbon emissions and providing sustainable transportation options, the initiative is expected to lead to improved air quality, enhanced public health, and the employment of at least 3,000 new drivers and an additional 2,000 workers to support bus maintenance, depot management, etc. The initiative is also expected to result in estimated economic cost savings of US$2.6bn (3.6% of Lagos’s GDP).
The launch of the electric mass transit buses is a significant step towards achieving a sustainable transport system in Lagos State and Nigeria as a whole. It is expected to serve as a model for other African countries seeking to transition to sustainable transportation systems.
AKK Gas Pipeline: NNPC Ltd Invests Over $1bn in One of Nigeria’s Largest Projects
The Nigerian National Petroleum Company Limited (NNPC Ltd) has invested over $1 billion in the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project. This project is one of the largest projects undertaken by NNPC Ltd in recent years.
The AKK gas pipeline project is a 614-kilometer pipeline that will transport natural gas from Ajaokuta in Kogi State to Kaduna and Kano states.
Mele Kyari, the Group Chief Executive Officer of NNPC Ltd, announced that the project has not stopped for a single day since its commencement, despite the lack of third-party financing.
He added that NNPC Ltd has continued to fund the project, and the company has so far spent over $1.1 billion on the project from its cash flow.
Kyari stated that the AKK gas pipeline project is one of the most massive projects undertaken by NNPC Ltd, and it is of immense value to the country and the socio-economic growth of Nigeria.
He assured the Nigerian public that NNPC Ltd would deliver the project as planned. According to him, the project will create employment opportunities and boost the economy of Nigeria.
Kyari disclosed that NNPC Ltd currently owes no single dollar to its contractors, and the company has paid all their invoices.
He said that there are over 30 sites that are active today in the AKK gas pipeline project, and NNPC Ltd is optimistic that it will deliver the project.
The Vice President of Nigeria, Prof. Yemi Osinbajo, said that the AKK gas pipeline project was 43% completed last week. Osinbajo spoke through the Secretary to the Government of the Federation at a function in Abuja, where he reiterated that the project was a major project of the regime of President Muhammadu Buhari.
President Buhari inaugurated the AKK gas pipeline project in July 2020. During the inauguration, it was announced that the Bank of China and Sinosure, a Chinese export and credit insurance corporation, were to fund the $2.8 billion facility. However, NNPC Ltd has continued to fund the project without third-party financing.
Unauthorized Meter Use by Electricity Consumers Causing IBEDC an Average Loss of N130 Million Monthly
Unauthorized meter use by some electricity consumers in Ibadan is causing the Ibadan Electricity Distribution Company (IBEDC) an average loss of N130 million monthly.
This was disclosed by the commission after it lamented that illegal meters of about 15,000 existing in its network across the state have caused heavy revenue loss.
Investors King understands that these unauthorized meters used by some residents of the state are reported to consume energy, meanwhile, the IBEDC does not generate any revenue from it.
Commenting on the issue, the IBEDC regional head for Osun. Engr. Oluwatoyin Akinyosoye while speaking at a town hall stakeholder meeting in Osogbo, stated that in a bid to curb this menace, the company has stopped the installation of the illegal meters which use cards to load electricity since 2013.
In his words,
“To us as a company, this is a huge loss in our revenue because these illicit meters consume energy on our network, but the revenue is not coming to us. If we can curb these illicit meters, we know that we can plunge back the revenue to our purse to serve our customers better. These illicit meters were gotten through the backdoor, unknown to us till now. Most of these meters are the ones that you have to use a card for before you can load.
“As a company, we stop the installation of these types of meters since 2013. So, any other one installed between 2013 till now are illicit meters”.
Mr. Akinyosoye further urged those still using the unauthorized meter to report at the company’s office to address the issue, warning that those who fail to do so, would have their supply disconnected and be prosecuted.
It is however interesting to note that the Ibadan Electricity Distribution Company (IBEDC) is the largest electricity distribution company in Nigeria. Since it began operations in 2013, it has delivered electricity to millions of Nigerians across several states which include Oyo, Ogun, Osun, Kwara, and parts of Niger, Ekiti, and Kogi.
FBN Holdings to Pay N17.947 Billion in Dividends to Shareholders for 2022 FY
Wema Bank Plc Announces Dividend Declaration and Director Appointments at 2022 AGM
Unity Bank Grows Gross Earnings to N57Billion in 2022FY, Builds Momentum as Profit Grows by 21% in Q1/2023
Cryptocurrency4 weeks ago
Binance Resumes Bitcoin Withdrawals After Pause, Cites Congestion of Network
Technology4 weeks ago
Apple And Google Collaborate to Stop Unwanted Tracking of People by Bluetooth Devices
Appointments4 days ago
Wema Bank Plc. Appoints Dr. (Mrs.) Oluwayemisi Olorunshola as Board Chairman
Telecommunications4 weeks ago
Airtel Africa plc’s Customer Base Grows to 140 Million, Fueled by Mobile Data and Mobile Money Services
Fintech4 weeks ago
WhatsApp Users in Singapore Can Now Pay Local Businesses Through Chat
Finance6 days ago
Zenith Bank Maintains Position as Best Corporate Governance Financial Services’ in Africa for the Fourth Consecutive Time
Banking Sector2 weeks ago
Zenith Bank Executive Director Acquires 4.04 Million Shares, Reinforces Confidence in Bank’s Growth
Cryptocurrency4 weeks ago
Pepecoin Traders Remain Bullish Despite Recent Price Correction; Whales Continue to Accumulate