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Developing African Petroleum Value Chains

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Petrol Importation - investorsking.com

Despite the global shift towards cleaner sources of fuel, the African continent – representing the highest number of people without access to energy globally – still requires fossil fuel development, if it is to meet its developmental goals. Accordingly, oil and gas-producing nations across the continent are ramping up efforts to develop a sustainable, viable and high reward petroleum sector in Africa.

Speaking at an African energy producers’ forum at African Energy Week (AEW) 2021, African oil and gas ministers provided insight into Africa’s oil potential, strategies to expand the energy value chain and opportunities for regional and international cooperation.

Opening the African energy producers’ talk, Irene Etiobhio, Senior Petroleum Industry Analyst at the Organization of Petroleum Exporting Countries (OPEC), emphasized the role of oil in Africa’s energy future. Presenting OPEC’s World Oil Outlook 2021, launched earlier this year, Etiobhio offered key insights into both Africa’s and the world’s oil outlook.

“The OPEC outlook provides an in-depth view and analysis of global oil issues. It is important to restate that the outlook is not about projections, but should be viewed as a helpful and insightful guide. Our data is based on key assumptions,” stated Etiobhio.

Alongside the presentation, African energy ministers elaborated on the role of oil in Africa. Panel participants included H.E Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea and Hon. Dr. Mohammed Amin Adam, Deputy Minister of Energy of Ghana.

Africa’s oil and gas industry is facing a dual challenge: to satisfy growing demand for petroleum products and to outpace the deployment of alternative, non-fossil sources of energy. Taking these two challenges into consideration, the panel participants provided insight into how the sector, and oil and gas companies in particular, plan to increase production while decarbonizing industry activities.

“Oil will play a significant role in the African energy mix and will take the highest share over all forms in the future mix. However, with the demand of over 600 million without access to electricity, Africa must do this in a modern way. We must not solve one problem while creating another. Africa needs to also take care of the environment,” continued Etiobhio. “We must have a clear mandate and one voice on how we are going to meet our emissions targets. China has said that by 2060, it will achieve carbon neutrality. Europe has set its target for 2025. Africa needs to do this, as well.”

Many African countries are looking to significantly enhance production, and are therefore looking to attract investment, as well capacity enhancement, across the entire energy sector value chain. During the panel, speakers discussed how Africa can fast-track the creation of an investor friendly environment, while still increasing local capacity.

“At this stage in Africa, we have come to the realization that someone has to be responsible, and for the first time, we have to take responsibility for the sector,” stated H.E. Minister Lima. “When the lockdown started, flights and movements stopped, and many expats could not fly or work. Could we actually continue operations with just national companies? The answer was yes, and for five months, Equatorial Guinea was operating almost 90% domestically. Our installations were operated by our own people, and so it was thanks to COVID-19 that we realized this.”

“Ghanaians took over the Liquefied Natural Gas processing facility. We have built reasonable local capacity to operate this facility. I am so hopeful that there is potential for Africa to develop, but we have to start doing it. If we make the effort to develop our capacity, then we will be able to do that,” added H.E. Deputy Minister Dr Adam.

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Energy

AfDB Boosts Africa’s Renewable Energy With $20m

AfDB approved an equity investment of $20m in Evolution Fund III

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Board of Directors of African Development Bank Group (AfDB), on Thursday 17th of November, 2022, approved an equity investment of $20m in Evolution Fund III, a pan-African clean and sustainable energy private equity fund set aside in mobilising about $400m into renewable energy and resource-efficiency assets across sub-Saharan Africa over a 10-year period.

Inspired Evolution Investment Management, the fund manager has more than 15 years experience, with a track record of deploying more than $310m in renewable energy projects in African countries.

The fund manager, through its predecessor funds, has delivered 21 renewable energy projects with a total generation capacity of 2 GW.

The project, tagged “EVIII” aims to broaden geographic and technology scope to incorporate North Africa, and several SSA countries, as well as decentralise energy business models as the key climate mitigation and energy transition.

AfDB’s support is expected to contribute to an additional 2,162MW of installed renewable power generation capacity, 1.8m tons of CO2 emission savings, and a green and sustainable growth across Africa by creating 2,480 full-time jobs, consolidating on the track records of Evolution Funds I and II, which had generated around 1,309 jobs, boasting 22 per cent women engagement.

The Vice President, African Development Bank’s Power, Energy, Climate Change and Green Growth Complex, Kevin Kariuki, assured “The Bank is committed to boosting its portfolio of renewable energy projects and encouraging private investment in renewable and efficient energy solutions.”

Kariuki added that “The Evolution Fund III is well placed to invest much-needed capital in long-term, low-carbon and climate-resilient development pathways towards achieving a just, net-zero future for African countries.”

He revealed the bank’s investment in Evolution Fund III aligns with its ‘High Five objectives,’ particularly, ‘Light Up and Power Africa’ under its New Deal on Energy for the African continent.

The Director, Energy Financial Solutions, Policy & Regulations of AfDB, Wale Shonibare, admonished “The bank’s support for a private equity fund focused on promoting renewable energy in Africa, will assist regional member countries to achieve their Nationally determined contributions and Paris Agreement obligations.”

The continental bank strives to support renewable energy projects, as the African Development Bank acted as the Mandated Lead Arranger (MLA) and Coordinating Bank for the ZAR 11.6 bn total investment, with a commitment of ZAR 2.306 billion to the transaction in South Africa’s largest solar power project which began implementation in February 2022.

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Nigeria Owns Africa’s Largest Gas Reserves – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria owns Africa’s largest proven gas reserves of over 208 trillion cubic feet, with most of it untapped or flared.

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Gas Exports Drop as Shell Declares Force Majeure

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria owns Africa’s largest proven gas reserves of over 208 trillion cubic feet, with most of it untapped or flared.

In a bid to access the gas resources at the country’s disposal, the federal government declared 2021 – 2030 as the DECADE OF GAS, a period for the country to switch from an oil exploration country to a gas-focused industrial development.

The Chief Executive Officer of the NUPRC, Mr. Gbenga Komolafe, said monetizing gas resources is a positive move towards achieving energy security which is in accordance with the ongoing global energy transition.

According to Ed Ubong, the Managing Director of Shell Nigeria Gas Limited and President of the Nigeria Gas Association, Nigeria has more than enough gas and it needs to be brought to the surface, to be monetized and consumed.

Similarly, Mr. Timipre Sylvia, the Minister of State for Petroleum Resources, said that the growth of Nigeria’s gas reserves was important to achieving the “Decade of Gas Development”.

Sylvia stated that the government has its part to play in energizing the gas sector if Nigeria was to compete with the rest of the global economy.

The federal government, in an attempt to monetize Nigeria’s abundant gas reserve, signed a Memorandum of Understanding with Morocco to construct a 5,600KM gas pipeline that would diversify the economy and also generate additional revenue for the country.

The main motivation behind the gas utilization projects embarked on by the federal government is the government’s goal of wealth creation and economic diversification. Gas seems to be the future for Nigeria as natural gas will be the main energy source in the transition from fossil fuels to green energies.

Natural gas has the potential to not only develop Nigeria’s economy but also improve the standard of living of the country’s citizen.

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FG Reveals Zungeru Hydroelectric Power Project Ready, to Become Functional Q1 2023

The federal government has revealed that the newly constructed $1.2 billion Zungeru Hydro Electric Power project located in Niger state will become operational in the first (Q1) 2023 after its inauguration.

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Hydro

The federal government has revealed that the newly constructed $1.2 billion Zungeru Hydro Electric Power project located in Niger state will become operational in the first (Q1) 2023 after its inauguration.

This was disclosed by the Minister of Power, Mr. Abubakar Aliyu, who inspected the extent of work done so far on the power plant.

According to the minister, each of the three turbines has already been installed and will be expected to generate 175 megawatts of electricity. He also noted that when the power plant becomes functional, it will generate 700 megawatts of electricity.

Commenting on the work done so far, the minister expressed satisfaction, stating that the contractors and workers have so far exhibited commitment. However, he stated that the project ought to have been functional already as the challenges of Covid-19 and insecurity hindered its early completion.

He further disclosed that the Zungeru Power Project is part of the federal government’s plans to improve electricity supply across Nigeria and to fulfill President Muhammadu Buhari’s commitment to vision 30:30:30.

Also commenting on the project is Secretary to the Government of Niger State (SSG), Ahmed Ibrahim Matane who accompanied the minister for inspection, said the state government has demonstrated “a high level of commitment to the implementation of the project because apart from electricity generation, it has abundant agricultural potential for the host communities to harness”.

Investors King understands that when the plant becomes functional, it will provide a huge respite both to the epileptic power sector and the struggling economy of the country.

Also, it is expected to provide direct and indirect employment opportunities to more than 2,000 people. 

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