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Angola’s Oil and Gas Industry Continues to Provide Huge Opportunities for Investors, Despite Energy Transition – Verner Ayukegba

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Angola oil - Investors King

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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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RES4Africa, Enel Green Power and the European Investment Bank Encourage African Youth to Find Green Energy Solutions to Community Challenges

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European Investment Bank - Investors King

The second Micro-Grid Academy Young Talent of the Year Award today acknowledged energy innovation from across Africa that can accelerate the green transition and improve economic opportunities.

Backed by the RES4Africa Foundation, Enel Green Power and the European Investment Bank the yearly competition encourages young energy entrepreneurs from across the continent to develop projects that expand enegy access, enable greater use of renewable eneryg and accelerate sustainability.

Young finalists from across West, East and Southern Africa presented their innovative ideas to expert judges from the RES4Africa Foundation, Enel Green Power and the European Investment Bank.

The 2021 edition of the Micro-Grid Academy Young Talent of the Year Award has arrived to its final steps. Today, the eight young African innovators selected as finalists out of nearly 50 applicants presented to the international public their disruptive projects for the first time. The presentation took place during the event Public Competition for the MGA Young Talent of the Year 2021 finalists, and represents a preparatory step for the announcement of the three winners, that will be held the 28th of September in the framework of the Precop26.

The three entities strongly believe that renewables and innovation will be the response to the climate changes and energy deficit that Africa faces. In this deeply needed path towards its just energy transition, the continent can and must rely on one of its most precious resources : its youth. With this joint initiative, RES4Africa, Enel Green Power and the European Investment Bank put together their efforts to support those young people from all Africa countries who are committed and motivate to create a real change in their communities.

These are the finalists identified by the selection committee, who publicly presented their project ideas and among which there are the three future winners:

• Adekoyejo Ifeoluwapo Kuye, 26 years old from Nigeria, introduced a project focused on a sustainable cold chain for food;

• Alex Makalliwa, 31 from Kenya, presented his initiative of electrical tricycles for heavy loads in Nairobi;

• Benson Kibiti, 34 also from Kenya, performed an overview on an PV-powered trolley for heating up food and providing power;

• Lucas Filipe Tamele Junior, 24 from Mozambique, focused on waste management, biofertilizers and biogas;

• Matjaka Ketsi from Lesotho is 28, and presented an initiative aiming at building solar-powered Learning Centres for rural communities;

• Shedrack Charles Mkwepu is instead 26 and comes from Tanzania: he designed a system that allows farmers to control irrigation and other soil parametres from a mobile phone;

• Carol Ofafa, 32 from Kenya, proposed the installation of a PV system for health facilities;

• Kumbuso Joshua Nyoni, 34 from Zambia, envision an integrated Water-Food-Energy model for PV power and a water pumping system.

The webinar benefitted from the presence of Salvatore Bernabei, President of RES4Africa and Head of Enel Global Power Generation, as well as of Maria Shaw Barragan, Director of Lending in Africa, Caribbean, Pacific, Asia and Latin America, European Investment Bank. They introduced the objectives of the MGA Young Talent of the Year Award, while reflecting upon youth’s impact on the just energy transition.

Moreover, after the finalists’ presentation, a final feedback was provided, with closing remarks, by Roberto Vigotti, Secretary General at RES4Africa Foundation, Carmelo Cocuzza, Head of Corporates Unit, European Investment Bank, and Silvia Piana, Head of Regulatory Affairs Africa, Asia and Australia Area at Enel Green Power.

“The ability to generate innovation will be a fundamental driver to pave the way for a transformation that goes well beyond the dynamic of the Energy sector” commented Salvatore Bernabei “We are here give voice and visibility to young talents, innovators, entrepreneurs promoting the best innovative ideas to stimulate socio-economic progress from within and free the creativity of the younger generations in designing the Africa of tomorrow”.

Increasing energy access and enabling more sustainable energy use is crucial to unlock opportunities for communities across Africa. The finalists in this year’s Micro-Grid Academy Young Talent Awards all demonstrate inspirational and innovative thinking that combined world-class energy expertise with unparalleled understanding of local energy needs and all deserve to win. The European Investment Bank is pleased to join RES4Africa and Enel Green Power to support talented young innovators and encourage them to become green energy leaders of the future.” said Maria Shaw-Barragan, European Investment Bank Director for Global Partners.

RES4Africa Foundation (Renewable Energy Solutions for Africa) envisions the sustainable transformation of Africa’s electricity systems to ensure reliable and affordable electricity access for all, enabling the continent to achieve its full, resilient, inclusive and sustainable development. The Foundation’s mission is to create favourable conditions for scaling up investments in clean energy technologies to accelerate the continent’s just energy transition and transformation.

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Nigeria Records N53.3B Loss To Gas Flaring In Two Months

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International Oil Companies (IOC) and their local counterparts flared a total of 33.04 billion standard cubic feet of natural gas resulting in a major estimated loss of N53.26 billion to the country in the first two months of this year.

In its latest monthly report, the Nigerian National Petroleum Corporation (NNPC) said the oil firms flared a total of 17.53 billion scf of gas in January, compared to 15.51 billion scf in February, according to data obtained from the Nigerian National Petroleum Corporation.

With the price of natural gas put at $3.93 per 1,000scf as of Wednesday, the 33.04 billion scf flared translates to an estimated loss of $129.85 million or N53.26 billion (using the official exchange rate of N410.13/dollar).

The NNPC report, said out of the 206.05 billion scf produced in February, a total of 133.06 billion scf was commercialised, consisting of 40.15 billion scf and 92.91 billion scf for the domestic and export market respectively.

It said this implied that 64.48 percent of the average daily gas produced was commercialised while the balance of 35.52 percent was re-injected, used as upstream fuel gas or flared.

The gas flare rate was 7.67 percent in February (i.e. 565.52 million standard cubic feet per day), compared to 7.73 percent in January (i.e. 554.01 million scfd).

In January, a total of 223.55 billion scf of natural gas was produced, translating to an average daily production of 7,220.22 million scfd.

Out of the total gas output in January, a total of 149.24 billion scf was commercialised, consisting of 44.29 billion scf and 104.95 billion scf for the domestic and export markets respectively.

This indicates that 67.15 percent of the daily gas output was commercialised while the balance of 32.85 percent was re-injected, used as upstream fuel, or flared, the NNPC said.

According to the revised payment regime for gas flaring, oil firms producing 10,000 barrels of oil or more per day will pay $2 per 1,000 standard cubic feet of gas, compared to N10 per 1,000 scf in the past.

Firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.

The penalties paid by oil and gas companies for flaring gas in the country will be invested to build midstream gas infrastructure in host communities, according to a new provision introduced into the Petroleum Industry Bill (PIB) by the National Assembly.

“Money received from gas flaring penalties by the commission (Nigerian Upstream Regulatory Commission) pursuant to this subsection, shall be transferred to the Midstream Gas Infrastructure Fund for investment in midstream gas infrastructure within the host communities of the settlor on which the penalties are levied,” the Senate and House of Representatives said in subsection (4) of section 104 of the bill.

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Scaling-up Off-grid Solar Across Africa – EIB and International Solar Alliance Study Identifies Solutions to Unlock Energy Access for 120 Million Households

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European Investment Bank - Investors King

The European Investment Bank and the International Solar Alliance today published a new study outlining solutions to overcome key affordability and investment challenges holding back off-grid solar investment across Africa.

“Increased use of off-grid solar technology across Africa is essential to harness clean and affordable energy and transform the lives of millions of people.  The new European Investment Bank and International Solar Alliance study published today combines experience and expertise from successful off-grid deployment to outline how investment can be unlocked to increase access to solar power.  The ground-breaking analysis demonstrates how closer cooperation between African, European and global partners can unlock investment and technical barriers that hold back sustainable development and the green transition.” said Ambroise Fayolle, European Investment Bank Vice President.

“The joint International Solar Alliance – European Investment Bank study outlines a pathway to unlock access to off-grid solar in Africa. This builds on proven success, expert insight and commercial experience to identify and overcome investment gaps and financial barriers holding back off-grid solar. The study details what can be done to increase access to clean energy to off-grid rural areas including refugee camps, urban areas and remote villages across Africa.”  said Dr Ajay Mathur, Director General of the International Solar Alliance.

Unblocking off-grid energy investment to enable a better future for millions

At present more than 120 million households across Africa lack access to reliable and affordable energy, with 60 million households expected to remain without electricity by 2030 unless urgent action is taken.

The new in-depth overview of recent private sector led deployment of small-scale solar energy systems across sub-Saharan Africa identifies five key challenges that can be addressed to unlock high-impact local energy investment essential for sustainable development and economic growth on the continent.

The study, based on detailed consultations in Uganda, Rwanda and Nigeria and analysis of off-grid markets across the region, provides recommendations for effective intervention to scale up off-grid solar deployment depending on specific local issues.

Sharing best-practice that allows investment and technical barriers holding back off-grid solar is key crucial to scale up off-grid solar, allow vulnerable and remote communities to access clean energy and deliver the sustainable development goal of universal access to reliable and affordable energy.

New study provide technical and business solutions to scale up off-grid solar across Africa

Commissioned by the European Investment Bank, in partnership with the International Solar Alliance, and compiled by development advisors Dalberg, the new study gathers local technical and financial experience and insight from successful deployment of off-grid solar investment in Africa.

This includes examining how off-grid solar investment has benefits refugee communities in Uganda and enabled cost-effective energy access in Nigerian cities.

Sharing best-practice with development finance partners

Investment challenges including affordability, working capital and exchange rate risks and political and economic stability holding back private sector investment in off-grid solar can be reduced through combining commercial financing and support form development finance partners.

The key recommendations of the study outline different models of intervention to overcome financing, technical and customer challenges to scale up off-grid solar deployment were highlighted ahead of final publication in specialist workshops attended by representatives of AfD, KfW, FMO and the European Commission.

Breaking down barriers to scaling up off-grid solar

The report published today examines off-grid solar investment across Africa and assesses how investment barriers including affordability, equipment supply, access to working capital, regulatory challenges, insurance and technical expertise influence and hinder deployment.

The analysis uses solutions developed in local case studies to suggest how examples such as aggregated purchase of solar home systems can reduce costs and rapidly enable low-income, urban and rural communities and refugees to access reliable energy through sustainable private sector led off-grid solar projects.

The study, based on the analysis by specialised development consulting firm Dalberg, was compiled following in-depth research on government policy, on discussions with energy, business and development finance stakeholders across Africa and stakeholder workshops in Nigeria, Uganda and Rwanda.

The European Investment Bank is supporting 8 off-grid solar projects across Sub-Saharan Africa.

Last year the EIB provided EUR 5 million for private and public investment across Africa and is supporting off-grid solar across Africa including projects in, Chad, Comores, Gambia, Kenya, Mozambique and Uganda.

Link to Commercial and Economic Feasibility Study for Enhancing Off-Grid Solar Inclusion in Sub-Saharan Africa report https://www.eib.org/attachments/press/eib-ogs-finance-report-14062021.pdf

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