Monday, September 30, 2013

Can TOR still be the catalyst?

 
 

Ghana’s first and only crude oil refinery was commissioned 50 years ago today, September 28, 2013, and remains one of the country’s most valuable national assets; though it has not actualized Ghana’s first President’s vision of becoming the base for the petrochemical industry.
 
Ghana became one of the countries with a crude oil refinery and the sixth largest in Africa in the 60s. Crude oil, according to Dr Kwame Nkrumah, ‘is the life blood of industry,” and that informed his initiative to set up Ghana’s only oil refinery to propel his dream of championing national development through industrialisation.
 
The refinery was known as the Ghanaian-Italian Petroleum Limited (GHAIP), and solely owned and managed by the Italian group ENI, until 1977, when the Government of Ghana bought all the shares and became the sole shareholder of GHAIP. The refinery was a simple hydro skimming plant with a capacity of 1.25 million metric tonnes. The refinery was a tolling refinery, refining crude oil on behalf of the major oil marketing companies including TOTAL and BP for a fee.
 
Dr Nkrumah during the inauguration of the £8.5 million refinery on September 28, 1963, said it was the government’s intention that “the refinery becomes the vital foundation for the establishment of other industries in Ghana”.
 
The refinery has gone through different phases since its inauguration; with GHAIP being renamed Tema Oil Refinery (TOR) Limited in 1990. Though, a limited liability company, owned by the State, TOR has never been allowed to operate and function as such. True to Nkrumah’s words, “Government had the final say in determining the prices of the oil products refined”.
 
This concept has prevailed to date.  As a result of underpricing (subsidies) which was not paid on time over the years, sales revenues were not sufficient to pay for Letters of Credit established for crude oil imports and the shortfall had to be funded by the Ghana Commercial Bank through overdraft facilities. The overdraft attracted penal interest charges which accumulated into what is now referred to as the TOR DEBT.

Just like numerous industries set up by Dr Nkrumah, most of which are defunct, TOR faces operational and technical challenges. These have impacted on the availability, reliability, efficiency and profitability of the company.
 
TOR’s challenges
 
TOR’s challenges broadly include the unavailability of working capital to procure crude oil consistently, plant and operational inefficiencies and the nature of the old business model. Therefore, the once vibrant refinery has been in the news for the wrong reasons: “TOR on the verge of collapse,” “TOR in tatters,” “Help Save TOR,” and TOR on road to recovery”, among a host of others.
 
The frequent shutdown of the Crude Distillation Unit (CDU) and the Residual Fluid Catalytic Cracker (RFCC) unit no longer comes as a surprise to many Ghanaians. There have been instances where workers have agitated due to the non-functioning of the processing plants or unavailability of crude oil for weeks and sometimes months.
 
The fluctuating crude oil prices on the world market put pressure on the profit margin of refineries worldwide, including TOR. Due to the lack of working capital, TOR is unable to plan its procurement of crude oil, and as a result tend to rely on the spot market with its attendant risks and challenges to profitability.
 
The problems arising out of debt in the books of TOR in addition to the high interest rates charged by financial institutions cannot be over-emphasised.
 
What seems to have added to the woes of TOR is the poaching of its skilled personnel by refineries in the Middle East, especially in Qatar and Oman, which have become fertile grounds for TOR staff who are being offered lucrative remuneration packages. Despite these challenges, there appears to be some light at the end of the tunnel for TOR.
 
TOR today
 
As a result of the many challenges aforementioned, the management of TOR initiated a Plant Stabilisation and Profitability Enhancement Programme (PSPEP) to turn around the fortunes of the refinery.
 
TOR required $67.7 million for this programme based on recommendations by various consultants to fix the processing plants to ensure continuous processing, availability, reliability and profitability.
 
The government released $30 million out of the $67.7 million in December, 2012, for the initiatives. The procurement of items is at various stages, while the refinery awaits the balance of $37.7 million to complete the identified projects to ensure the refinery’s operations are efficient and reliable.
 
Under the PSPEP, operational losses, which is one of the bane of the refinery, are being addressed with the installation of Automatic Tank Gauging System (ATGS) and Flow Meters on out and inward bound pipelines to reduce human intervention and ensure accountability of products.
 
The refinery’s three operational boilers,  which depended mainly on fuel oil which is so expensive and adds to operational cost, have been commissioned to use flue gas which otherwise would have been flared.
 
Another initiative geared towards making the refinery more profitable is the off-gas compressor which has also been fixed and is awaiting commissioning.  This facility will compress off gases generated from the processing units and channel them to be used as fuel for the boilers and furnaces.
Aside these laudable actions, the company is also focusing on its human resource retention by training and re-training staff.
 
As part of measures to reduce the risk of non-settlement of credit, TOR has changed its old business model of selling on credit to the Oil Marketing Companies (OMCs). Currently, TOR sells its finished petroleum products to the Bulk Distribution Companies (BDCs) who post unconfirmed Letters of Credit to reduce the risk of non-payment.
 
Quality Petroleum Products
 
With a workforce of more than 700, TOR is noted for its quality specifications in Aviation Turbine Kerosene (ATK) which meets international specifications.
 
The airlines would have had to refuel from their countries of origin adding to high cost of operation.  ATK from the refinery has been used to refuel presidential jets including Airforce One on three occasions when Presidents Clinton, Bush Jnr and Barack Obama visited Ghana.
 
The refinery has, therefore, replicated this stringent process on other product lines including petrol and gas oil.
 
What TOR can be
 
Fortunately, the country joined the league of oil producing countries in June, 2007, when oil was discovered in commercial quantities and it will be befitting to fulfil Dr Nkrumah’s charge to GHAIP in 1963 when he directed the company to “purchase and refine the crude oil” in the event Ghana strikes crude oil.
 
Successive presidents have had to move from one country to the other virtually on “their knees pleading for crude oil” to be supplied to TOR. Ghana does not have an excuse to go begging for crude oil when crude oil is being shipped from Ghana to buyers abroad.
 
The refinery brings “value addition” to the crude oil found in Ghana in addition to the many wells which are yet to be explored and discovered. The benefits to the economy, industries and employment generation is obvious. Ghana cannot reach the threshold of development if it continues to spend billions of dollars to import finished oil products, rice, cooking oil, chicken, toothpick, tomato puree and many others to the detriment of local industries. TOR must, accordingly, position itself to be able to purchase Ghana’s crude to feed its plants.
 
The refinery could be the foundation for any petrochemical venture Ghana intends to embark on. Dr Nkrumah once stated, ‘The refinery should become a vital part for the establishment of other industries to contribute to national development’.
 
While TOR positions itself to expand and improve its infrastructure to ensure reliability of petroleum products on the Ghanaian market and beyond, it should also consider entering into strategic partnership with investors. It would also not be a bad idea for it to float shares on the Ghana Stock Exchange (GSE).
 
TOR is a viable company that should be supported to play its strategic role to enhance the country’s development. The government must assist TOR to be independent. Subsidising petroleum products is not the solution to the country’s oil industry and other areas begging for assistance.
 
The several millions of cedis used in subsidising fuel products, which from experience hardly reach the intended vulnerable group, can be channelled into the provision of quality health care, education and other social amenities for the benefit of millions of Ghanaians whose needs are increasing daily.
Via: DailyGraphic

Thursday, September 26, 2013

Ghana president names new head of state oil company

Alexander Mould
 
 
Ghana's president, John Dramani Mahama, has named finance and energy specialist Alexander Mould as head of the state-run Ghana National Petroleum Corporation (GNPC), an official said on Thursday.
 
The appointment of Mould, who was director of downstream regulator National Petroleum Authority, takes immediate effect, Energy Ministry spokesman Edward Bawa said.
 
Mould replaces Nana Asafu-Adjaye, who served for five years as managing director of the GNPC, which holds a 13.6 percent stake in the West African nation's flagship Jubilee offshore field. No reasons were given for Asafu-Adjaye's departure.
 
Ghana became an oil producer in December 2010 with reserves at the Jubilee field estimated at up to 1 billion barrels. It expects full-year 2013 production of 95,000 barrels per day.
 
Tullow Oil, Kosmos Energy and Anadarko Petroleum are some of the other partners at the Jubilee field.
 
Between 1985 and 1994 Mould was an adviser at the GNPC in charge of marketing. He had previously worked at Standard Chartered Bank and Union Bank of Switzerland in New York.

GOIL Is Largest Indigenous Ghanaian Oil Marketing Company

Patrick Akorli
Patrick Akorli

http://www.spyghana.com/goil-is-largest-indigenous-ghanaian-oil-marketing-company/

Ghana Oil Company Limited (GOIL), the largest indigenous Ghanaian oil marketing company, has demonstrated that homegrown companies could succeed in healthy business environment even with the presence of multinationals.
 
Patrick Akorli, GOIL Managing Director, in an interview with Ghana News Agency (GNA) at the weekend, noted that despite stiff competition in the downstream oil industry, GOIL was able to stand firm because of internal reforms and key partnerships lined up to position the company to deliver.
He said the company’s performance last year had been acknowledged by the Chartered Institute of Marketing, Ghana (CIMG) and adjudged accordingly as the Petroleum Company of the year, 2012.
He said indigenous companies have the capacity and capabilities to move beyond the breakeven point, adding, “We are proud to have contributed GH¢72.979 million to government of Ghana, which is the majority shareholder of the company.
 
“GOIL’s performance in terms of growth in volumes of sales went above its average growth rate of five per cent. From one per cent growth in 2011 sales volumes increased by 11 per cent in 2012.”
A citation, which accompanied the award, read: “Your rebranding in the year under consideration has given GOIL a new image in the oil industry with a new logo, visual outlook and image backed by positive attitude towards work.
 
“You have enjoyed massive support from customers culminating in an increased patronage of your brand, with overall result of six per cent growth over the past year of five per cent.
 
“Your community support programmes continue to positively effect and transform lives of beneficiary communities and your clients take due cognizance and highly rank you on that.
“These sterling performances have not gone unnoticed and thus the CIMG confers on Ghana Oil Company Limited (GOIL), Petroleum Company of the year 2012”.
 
Mr. Akorli said the rebranding of the company was paying off currently, stressing that the retooling of GOIL’s retail outlets which is the most critical of our operations and the retraining of service station attendants had been key in making GOIL the preferred choice of the motoring public.
“GOIL’s vision to be a world-class provider of goods and services is on course and the motoring public will always remember that GOIL is Good Energy,” he stated.
 
He said GOIL’s profit after tax last year grew by 19 per cent with earnings per share improving by 18 per cent.
 
Mr Akorli dedicated the award to GOIL’s Board of Directors, staff, shareholders and retailers for their sense of duty and commitment to the goals of the company.

He noted that GOIL’s plan to be the oil marketing company of choice in the country was on course and the future definitely looked brighter.
 
Source-GNA

Wednesday, September 25, 2013

Bids on Chevron's Nigeria oil blocks due next week: sources


Nigerian Oil Blocks
 

 
U.S.-based Chevron Corp (CVX.N) will receive bids on September 30 from prospective buyers of three oil blocks in the Niger Delta, with several local Nigerian firms in the running, industry sources told Reuters on Tuesday.
 
Oil industry sources estimate the mean value of the three blocks combined at $500 million to $600 million and anticipate winning bids will be around those levels.
 
Chevron said in June it would be selling its 40 percent interest in five onshore blocks, joining Royal Dutch Shell (RDSa.L), Italy's Eni (ENI.MI) and France's Total (TOTF.PA) in selling stakes in Niger Delta assets.
 
U.S. firm ConocoPhillips (COP.N) is also selling its Nigerian assets to Oando Energy (OANDO.LG) for $1.79 billion.
 
Chevron wants to sell OML 52, 53 and 55 to one buyer and suitors will have to pay 15 percent of bids on September 30, three sources close to the deals told Reuters. The firm will sell two other blocks, OML 82 and OML 85, in a separate bidding process.
 
The U.S. firm did not respond to a request for comment.
 
The three blocks have total oil reserves of around 134 million barrels and 5 trillion cubic feet of gas, two sources said. One company was willing to bid $1.7 billion for the assets but it was unlikely it was a credible buyer, the sources said.
 
Consortium bidders were more likely to be able to raise the financing necessary, sources said, and as with recent sales of Shell oil blocks, Nigerian firms, many in partnership with foreign companies, are likely to win most bids.
 
Nigeria's South Atlantic Petroleum (SAPETRO), which already has joint ventures with Total and China's CNOOC, is expected to bid, as is First Hydrocarbon Nigeria, the local-arm of London-listed Afren (AFRE.L), two sources involved in the deals said.
 
Afren declined to comment and SAPETRO did not respond to a request for comment.
LOCAL BIDDERS
 
Since 2010 Nigeria has had a policy of encouraging more direct ownership of its oil and gas by Nigerians, either through the state oil company or local private firms. That has raised concerns among foreign oil majors they may lose smaller assets if they do not sell now, industry experts say.
 
Worries over oil theft, fraught relations with communities living around oil fields and uncertainty over a stalled bill to overhaul fiscal terms has also encouraged majors to sell down.
 
Many Nigerian firms are backed by powerful political or business figures. The chairman of SAPETRO is General T.Y. Danjuma, a former minister of defense and chief of army staff.
 
SEPLAT, which is partly owned by French oil explorer Maurel & Prom (MAUP.PA) and Swiss-based commodity trader Mercuria, is expected to submit a bid, the sources said. SEPLAT did not respond to request for comment.
 
Indigenous Nigerian companies who already manage marginal fields in the delta, including Brittania-U, Vertex, Sogenal and Seven Energy have shown interest in the blocks, they said.
 
Chevron owns a 40 percent stake in 13 onshore blocks with Nigeria's state oil firm NNPC and also has deep offshore assets. Its 2012 net daily production in Nigeria averaged 238,000 barrels of crude oil and 165 million cubic feet of natural gas.
 
Nigeria's NNPC, which owns the remaining 60 percent of the blocks Chevron is selling, has warned prospective buyers that although the U.S. firm currently operates production of the blocks, it has the right to hand over the handling of drilling to its subsidiary NPDC.
 
Not having operatorship poses significant risks for would be investors in the fields, not least that NPDC is short on finance and expertise. It has usually had to call in a third-party to operate the blocks, pushing up costs.
 
Africa's biggest oil producer usually pumps 2 million to 2.5 million barrels per day of oil, most of which is exported.
 
Despite the sales of smaller onshore assets, oil majors like Shell, Exxon Mobil (XOM.N) and Chevron remain keen on expanding offshore Nigeria and want to keep hold of the biggest fields onshore, major pipelines and export terminals.
 
(Additional reporting by Sarah Young in London; editing by Tim Cocks and Keiron Henderson)

Tuesday, September 24, 2013

Piracy in West Africa



http://www.petroleumafrica.com/piracy-in-west-africa/

IMB Director Pottengal Mukundan and USCG’s Robert Gauvin on Piracy in West Africa

Special to Piracy Daily

Maritime piracy remains a significant problem around the world, threatening the lives of seamen while carrying a price tag of about $7 billion a year.  That sum includes both monies lost and stolen, and that spent on international security efforts that have proven to be necessary to withstand, where possible, the challenge created by these maritime marauders. Today, West African piracy seems to be eclipsing that off the coast to Somalia, although the threat in the Gulf of Aden remains real. Amidst this rise in piracy and armed robbery—31 incidents as of early August, including four hijackings— the International Maritime Bureau, or IMB, underscores the surge in kidnappings at sea, with a wide range of types of vessels being targeted.

On September 17th, International Maritime Bureau Director Pottengal Mukundan and Robert Gauvin, executive director of piracy policy at the U.S. Coast Guard, held forth in Episode No. 6 of the Piracy Daily / Maritime TV series on piracy mitigation strategies, the interview with Captain Mukundan coming first and done by Skype. Joining them in the discussion were Dr. John A.C. Cartner, the author of two invaluable works of reference, the International Law of the Shipmaster, and Defending Against Pirates, the International Law of Small Arms, Armed Guards, and Privateers, and Captain William H. Watson, the President and COO of Advanfort International, a world leader among private maritime security companies.

Click here to see the Maritime TV video

Together, the panelists literally “cover the waterfront,” and beyond, on key issues involving the uniqueness of the threat by West African pirates; the possible use of lessons learned elsewhere; the institutional challenges still faced in the region; the role that can and should be played by Private Maritime Security Companies, and other critical questions and possibilities created by a dangerous phenomenon that maritime owners, operators, and crews are all seeking to better understand as they guard against being the next victims.

READ MORE AT: http://www.piracydaily.com/interview-imb-director-pottengal-mukundan-robert-gauvin-u-s-coast-guard-director-piracy-policy/

Monday, September 23, 2013

Ghana’s natural gas pipeline has seen a delay in start up and is now not expected to begin flowing until April 2014. The project was supposed to begin pumping this year but was delayed until January.

 
 
Ghana’s natural gas pipeline has seen a delay in start up and is now not expected to begin flowing until April 2014. The project was supposed to begin pumping this year but was delayed until January.
 
Funding and other issues have kept the undersea pipeline, which runs from the offshore Jubilee field to a thermal plant near the port city of Takoradi, from keeping to schedule.
 
The latest delay can be attributed to the cargo vessel carrying the equipment for the gas rig sinking at sea.
 
“By the end of Q1 the facility should be ready. Within Q2 we should be producing gas,” Deputy Energy Minister John Jinapor told Reuters.

Friday, September 20, 2013

VLCCs - rates remain below opex

 
 
There was a certain amount of hope at the beginning of this week that perhaps, with a bit of effort, VLCC owners might be able to pull together and push rates out of the doldrums and eventually into meagre profit.
Alas, the independent owner’s worst enemy, the oil company relet, did their best to scupper their chances, reported Braemar Seascope.
 
The hope started when Exxon paid a premium WS34 for an AG/Singapore 270,000 tonne cargo but it turned out there was a complicated loading arrangement. However, this did give owners signs for encouragement.
 
A couple of China bound cargoes then entered the market and while those independents were pushing for WS35, oil company controlled tonnage fixed at WS33.75, then WS34.
 
An AG/Thailand fixture was done off market at WS35 but this seems to be as high as things will go, since the sheer availability of tonnage will always be the deciding factor no matter how severe the cargo congestion situation becomes.
 
A hollow victory for owners moving rates up from WS33 to WS35 level for AG/East  270,000 tonne cargoes over the week but in terms of earnings, we are still below operating costs, Braemar said.
AG/West was not so busy although Statoil fixed WS22 via Suez and WS23 via Cape of Good Hope for 280,000 tonne cargoes, which was slightly under last done levels.
 
West Africa was quieter for Chinese destined cargoes; however, the freight rates have remained steady despite slight firming in the Arabian Gulf.
 
The fixing dates are now for the last week of October and being fixed at WS35 West Africa/China for 260,000 tonne cargoes.
 
Very little has been fixed to the west and the poor Suezmax market has meant that the economics just don't stack up. So far for the month, Braemar counted 11 VLCC fixtures and 14 Suezmax fixtures from the area, making a total of 42 mill barrel stems lifted.
 
Indian charterers were quiet out of West Africa this week. This lack of activity contributed to low volumes seen out of West Africa this month and was also due to annual maintenance of refineries. Braemar expected that Indian charterers will have at least a couple of stems in the last week of October.
 
“We are assessing West Africa/west coast India at $3.15 mill lumpsum and West Africa/east coast India at $3.4 mill,” Braemar said.
 
Very limited action was seen from Continental Europe. However, it is understood a number of Handymax and Panamax vessels have been fixed with fuel oil into the Skaw area. So perhaps a VLCC size stem fixed Continent/Singapore might be seen.
 
Charterers have started searching for early October lifting dates for Caribbean/Far East and freight rates of $3.35 mill-$3.4 mill lumpsum are being reported.
 
The 30-day availability index shows 56 VLCCs arriving at Fujairah of which six are over 15 years old, compared with last week’s count of 70, thus in theory there are 30% less ships on this list compared to a similar stage last week.
 
Certainly, the large volume of cargoes fixed at the end of last month will have contributed to the reduction of available tonnage and these volumes need to be maintained to start any feasible recover in the VLCC spot market, Braemar concluded.

Thursday, September 19, 2013

Nigerian Oil Companies Boost Production as Majors Retreat

Nigerian Oil Blocks Map
 
 
By Elisha Bala-Gbogbo
 
Nigerian-owned oil companies are boosting their share of the country’s output by taking up fields in restive areas as international energy companies retreat, Ecobank Research said.
 
For more than five decades, Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), Total SA (FP) and Eni SpA (ENI) pumped about 97 percent of Nigeria’s output, according to figures provided by state-owned Nigerian National Petroleum Corp. That fell to 90 percent in 2006 and is set to shrink further to about 60 percent in five years “if the current divestment trend continues,” Rolake Akinkugbe, a London-based energy analyst for Ecobank Research, said in an e-mailed response to questions.
 
Shell and Chevron are selling assets that can produce 300,000 barrels a day from nine onshore and shallow-water oil leases. Stakes in 13 other fields were sold jointly by Shell, Total and Eni since 2010, with most of them bought by smaller Nigerian companies including Seplat Petroleum Development Co., First Hydrocarbon Ltd. and Neconde Energy Ltd.
 
As international energy companies led by Shell and Chevron give up onshore and shallow water fields plagued by persistent unrest, violence and crude theft in the oil-rich Niger River delta, smaller Nigerian companies are taking over, expanding their output capacity.

Operational Difficulties

“These divestments represent the single largest opportunity for indigenous Nigerian firms with the requisite expertise, partnerships and capital to ascend into the league of major upstream players,” Akinkugbe said. If they overcome the operational difficulties they “will become increasingly instrumental” to Nigeria meeting its output target of 3 million barrels a day by 2020, she said.
Local companies are probably “better off dealing with some of the security challenges in the Niger delta than the foreign companies,” Bismarck Rewane, chief executive officer of Lagos-based Financial Derivatives Co., a business advisory group, said in a phone interview. It’s easier for them to communicate with the communities and win their sympathy , he said.
 
Nigeria, OPEC’s seventh-largest producer, pumped more than 2 million barrels of crude a day last month, according to data compiled by Bloomberg. The West African nation has Africa’s biggest crude reserves after Libya, more than 36 billion barrels. Crude prices rose 0.8 percent to $106.24 a barrel as of 3:46 p.m. in London.

Shallow Waters

Armed attacks led by the Movement for the Emancipation of the Niger Delta, fighting for the region’s control of oil resources, cut Nigeria’s oil output by 28 percent, mainly from the delta’s swamps and shallow waters, from 2006 to 2009, according to figures complied by Bloomberg. Though the violence subsided after thousands of fighters accepted a government amnesty offer in 2009 and disarmed, a surge in oil theft in recent years by gangs tapping crude from pipelines pushed output down to four-year lows earlier this year.
 
A proposed law to reform the way the oil and gas industry is regulated and funded has been delayed in parliament for five years, with international energy companies saying its fiscal terms, including taxes and royalties, would make offshore exploration unprofitable. The bill also proposes terms to boost the participation of Nigerian companies in the industry.
 
If passed, the law could be a “real catalyst for boosting local production, with attractive economics for small and marginal fields which many local companies operate,” Akinkugbe said.

Capital Efficiency

Eleven local companies including Seplat, South Atlantic Petroleum Ltd., Seven Energy Ltd., First Hydrocarbon and Sahara Energy Field Ltd. have been short-listed to buy the Chevron fields on sale, Lagos-based Africa Oil+Gas Report reported on Aug. 29. Nigerian energy company Oando Plc (OANDO), which signed a deal last year to acquire the oil assets of ConocoPhillips (COP) in the country, said on Sept. 16 it will also take up the Houston-based company’s stake in the proposed Brass LNG plant in the Niger delta for $105 million.
 
Chevron is offering all of its 40 percent stake in each field and aims to complete the transactions before the end of this year, Jim Craig, a Houston-based spokesman, said in an e-mail, without giving details. For Chevron it’s a chance to “enhance capital efficiency” and for the prospective buyers an “opportunity to grow their own assets,” he said.
 
To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net
 
To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

Wednesday, September 18, 2013

Second tanker to ship shale oil

 
 
By Eric Anderson
 
Albany
 
A second tanker is expected to join the Afrodite, a Bahamian-flagged vessel, in carrying shale crude oil from the Port of Albany to the Irving Oil Co. refinery in St. John, New Brunswick, in coming weeks.
 
Albany Port General Manager Richard Hendrick said the additional ship would mean an oil tanker would depart from Albany every four days. The two tankers will load up at the Buckeye Partners terminal.
 
The growing business in shale crude from North Dakota's Bakken oil field has boosted employment at Buckeye and at another terminal at the port operated by Global Partners. Global has used barges to ship oil to refineries along the East Coast from its Albany facilities.
 
Hendrick estimated as many as 50 people are employed at the two terminals, a figure that's tripled since they began handling the Bakken crude.
 
Canadian Pacific Railway and CSX Transportation both deliver Bakken crude to the Port of Albany for transfer to ships or barges.
 
The Afrodite can carry 220,000 to 230,000 barrels of crude. It travels from Albany down the Hudson River and then up the Atlantic coast to St. John.
 
The two terminals together are able to handle 1.8 billion gallons, or nearly 66.7 million barrels, of oil a year, according to permits issued by the state Department of Environmental Conservation.

Ex-governor of Nigerian oil state hid assets in Oando -British prosecutor

James Ibori
 
 
* Ibori was jailed for 13 years after guilty pleas
* Prosecution seeks confiscation of assets worth millions
* Ibori hid some assets in oil firm Oando - prosecutor
* Oando says sold $2.7 million to Ibori without knowing
 
By Estelle Shirbon
 
LONDON, (Reuters) - Jailed former Nigerian oil state governor James Ibori hid some of his assets in the oil firm Oando and money passed from the company's accounts to Ibori's Swiss accounts, a British prosecutor told a court on Monday.
 
Ibori, who governed Delta State from 1999 to 2007 and influenced national politics, was jailed for 13 years in Britain after pleading guilty in February 2012 to 10 counts of fraud and money-laundering worth 50 million pounds ($79 million).
 
One of the biggest embezzlement cases seen in Britain, the successful prosecution of Ibori was also a rare example of a senior Nigerian politician being held to account for the corruption that blights Africa's most populous country.
 
A three-week confiscation hearing began at London's Southwark Crown Court on Monday during which prosecutors will present evidence of Ibori's assets and seek court orders to have them seized. Defence lawyers will dispute the prosecution case.
 
Prosecutor Sasha Wass told the court she would be presenting evidence that Ibori had "asserted ownership of a large part" of Oando, Nigeria's biggest home-grown oil firm which is listed in Lagos, Johannesburg and Toronto.
 
"The Crown will assert that Oando is a company where James Ibori has hidden assets," Wass said, giving no further details. She is expected to elaborate later in the proceedings.
 
Oando is not a party to the case, although British lawyer Andrew Baillie was in court representing the firm's interests.
 
A spokesman for Oando in Lagos said that in 2004, the company had sold $2.7 million of its foreign exchange earnings for naira in three transactions over about seven months with a company that had turned out to be controlled by Ibori. Oando did not know at the time that Ibori was behind the company, he said.
 
The spokesman also said that at present, Ibori had an "insignificant" shareholding in Oando.

$15 MILLION IN CASH
 
At the time of Ibori's sentencing in April 2012, Judge Anthony Pitts said the 50 million pounds that he had admitted to stealing may be a "ludicrously low" fraction of his total booty, which could be more than 200 million pounds.
 
The confiscation hearing will shed further light on the scale of Ibori's wealth and determine whether he emerges from jail impoverished or still in possession of a large enough fortune to regain a position of influence in Nigeria.
 
Wass said Nuhu Ribadu, a former head of Nigeria's anti-graft agency EFCC, would testify later in the hearing. He alleges that in 2007, Ibori tried to stop EFCC investigations into his affairs by offering Ribadu a bribe of $15 million in cash.
 
Ibori, who is at Long Lartin maximum security prison in central England, could be released as early as 2016 because he spent two years in custody before his sentencing and because he will be eligible for parole halfway through his prison term.
 
He was not in court on Monday and his lawyer Ivan Krolick said Ibori did not wish to attend the confiscation hearing although he would come to court to give evidence if necessary.
 
In May, the Court of Appeal had rejected Ibori's appeal against the length of his sentence.
 
During his sentencing hearing, the court heard Ibori had acquired six foreign properties worth 6.9 million pounds, a fleet of luxury cars including a Bentley and a Maybach 62, and that he had tried to buy a $20-million private jet. His three daughters were attending a private school in rural England.
 
British authorities hope Ibori's case may stop corrupt Nigerian politicians looking to Britain, Nigeria's former colonial ruler, as a place to spend money on houses, luxury goods or private education for their children.

Tema Oil Refinery of Ghana Sees 33% Capacity Expansion by 2015

 
 
Tema Oil Refinery Ltd., Ghana’s sole crude processor, expects to boost capacity by 33 percent in two years after signing a contract to replace old equipment.
 
“We will be installing a new furnace valued at $7 million and do some retrofitting of various parts of the plant within 18 months,” Managing Director Ato Ampiah said on Sept. 13 in an interview in the port city of Tema, 30 kilometers (19 miles) east of the capital, Accra. “This will increase our production capacity to 60,000 barrels-a-day from the current 45,000.”
 
The company’s refinery has struggled because of a lack of credit and faulty equipment since 2009, even as growth in West Africa’s second-biggest economy increased demand for fuel. The plant was repeatedly forced to shut, including an eight-month period that only ended in March after the government provided the state-owned plant with $30 million for repairs.
 
It now operates at 60 percent capacity, Ampiah said. The government has yet to pay the second tranche of a $67 million injection needed to retool operations and boost efficiency. “We have made some progress in accessing the remaining funds to continue with the repairs and retooling program,” Ampiah said.
 
Ghana’s gasoline demand rose 43 percent to 993,000 metric tons in the three years to December 2012 and diesel gained 34 percent to 1.3 million tons, the National Petroleum Authority said. Most of the country’s fuel needs are met with imports.
 
To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net
 
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Tuesday, September 17, 2013

Angola rivals Nigeria for top spot in African oil exports

 
 
By Emma Farge and Simon Falush
 
GENEVA/LONDON (Reuters) - Angola's oil exports will rise to around 1.74 million barrels per day (bpd) in November, a shipping list showed on Tuesday, leaving supplies virtually level with top African producer and fellow-OPEC member Nigeria.
 
Nigeria is normally the continent's top exporter but a series of theft-related supply disruptions on key grades such as Bonny Light and Brass River have depressed flows onto international markets in recent months.
 
In October, Nigeria is due to ship around 1.79 million bpd of oil, a shipping list showed, down from an average of over 2 million bpd last year, according to Reuters data.
 
The drop amounts to a potential $700 million in lost monthly earnings versus the 2012 average, based on current Brent prices.
 
In contrast, Angolan oil exports were up in October versus September when planned exports were 1.70 million bpd after repairs at the Saturno platform operated by BP.
 
The oil major lifted a force majeure on this grade earlier this month and the October shipping list showed it would load five cargoes compared to four in September.
 
A force majeure temporarily relieves a company from its contractual duties due to events beyond its control.
 
Still, Angolan exports are falling short of a target of 2 million bpd set for 2013. Oil Minister Jose Botelho de Vasconcelos said in December that was unlikely and he has since been quoted as saying it may take place in 2014 or 2015.
 
Nigeria has not yet released a figure for November exports although these may improve following Eni's lifting of its Brass force majeure on September 2.
 
Shipping lists are provisional and can be revised closer to the loading date for exports.

Monday, September 16, 2013

 
 
By Lin Noueihed

* Brent, WTI crude fall by more than a dollar

* U.S., Russia back UN programme to destroy Syria's chemical weapons

* Coming up: U.S. industrial output at 1315 GMT

LONDON, (Reuters) - Global oil prices fell to a five-week low below $109 a barrel on Monday after the United States agreed to call off military action against Syria, easing supply concerns.

Benchmark front-month Brent futures touched a six-month high of $117.34 a barrel in late August amid worries that a possible U.S. military strike against Syria would disrupt Middle East oil supplies already hit by outages in Libya and Iraq.

But prices began to drop after Russia offered to help put Syria's chemical weapons under international control.

On Saturday, U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed to back a nine-month U.N. programme to destroy Syrian President Bashar al-Assad's chemical arsenal.


Brent crude for delivery in November dropped by $2.71 to trade around $108.99 at 0907 GMT, after hitting $108.73, its weakest level since Aug. 12.

The October contract expired on Friday, settling at $112.78.

U.S. oil for October delivery was trading down 82 cents a barrel at $107.39 at 0854 GMT after hitting a low of $106.48 earlier in the session.

"On the one hand you have a postponement of a military strike that alleviates geopolitical tensions and effects a downward force on oil. On the other hand, oil is supported as a risky asset class by the withdrawal of Larry Summers who was seen as the hawkish candidate," said Harry Tchillinguirian, oil analyst at BNP Paribas.

The decline in oil prices came despite weakness in the dollar, which typically makes dollar-denominated assets cheaper for holders of other currencies.

The dollar fell to a near four-week low against a basket of major currencies as investors bet that the U.S. Federal Reserve would take longer to end its stimulus programme after Summers, a former treasury secretary, withdrew from consideration to succeed Fed Chairman Ben Bernanke.

Tchillinguirian said uncertainty over who would succeed Bernanke and the direction of U.S. monetary policy would likely boost demand for risky assets such as dollar-denominated oiland put a floor under oil price declines for now.

The Federal Open Market Committee is meeting for two days from Tuesday with expectations high that policymakers will decide to reduce the monthly $85-billion bond purchases as they begin to end the era of cheap money that has boosted fund flows into commodities.

Credit Suisse said in a note it expects the Fed to pare down the monthly bond purchases by around $20 billion.

"A series of recent economic data improvements points in this direction and the weaker-than-expected August labour market report is unlikely to keep the Fed from proceeding with slowly winding down its asset purchases," the investment bank said.

(Additional reporting by Manolo Serapio Jr in Singapore; editing by Jason Neely)

Friday, September 13, 2013

Africa's richest man signs loan to build Nigeria's largest oil refinery, fertilizer complex




Africa's richest man says his company has received a $3.3 billion loan to build Nigeria's biggest oil refinery and petrochemical and fertilizer complex.

Aliko Dangote, president of Dangote Group, said the project, expected to be completed in 2016, will lower Africa's dependence on the international market. Nigeria is Africa's biggest oil producer but has to import most of its fuel as it lacks refining capacity. He spoke Wednesday at the signing of the loan from 12 Nigerian and international banks.

Dangote Group says it is still seeking an additional $2.5 billion in development funds to augment the $3.5 billion of its own equity put into the $9 billion project.

The refinery will be built in Nigeria's southwest.

Nigeria is a top supplier of crude to the United States.

Read more: http://www.foxnews.com/world/2013/09/05/africa-richest-man-signs-loan-to-build-nigeria-largest-oil-refinery-fertilizer/#ixzz2emQRU6Dh

Platts Survey: OPEC Pumps 30.28 Million Barrels of Crude Oil Per Day in August

 
 
LONDON, Sept. 10, 2013 /PRNewswire/ -- Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) was 30.28 million barrels per day (b/d) in August, down 60,000 b/d from July, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
 
OPEC crude output fell again in August as oil worker strikes and protests drove Libyan production below the 300,000-b/d level towards the end of the month. Overall, Libyan production was down 440,000 b/d from July to 560,000 b/d in August. Higher output from OPEC kingpin Saudi Arabia and Iraq was not enough to offset the Libyan production loss.
 
"The plunge in Libyan production draws attention to OPEC and what it can – and can't – deliver, and this report clearly shows where the problem areas are," said John Kingston, Platts global director of news. "Apart from sanctions-strapped Iran and Libya itself, a number of other OPEC countries are facing production challenges. This concentrates focus on Saudi Arabia, which the Platts survey estimates to have pumped 10 million b/d in August, and begs the question: will Riyadh be able and willing to maintain or exceed this level if the world needs more oil?"
 
Saudi Arabia boosted output by 220,000 b/d to 10 million b/d in August from 9.78 million b/d in July, while Iraqi output recovered by 170,000 b/d to 3.15 million b/d from 2.98 million b/d in July. There were also smaller increases from Ecuador, Iran, Kuwait and the United Arab Emirates.
 
Nouri Berruien, head of Libya's National Oil Corporation, told Platts on September 5 that output had averaged 560,000 b/d in August and had steadied at around 240,000 b/d in early September.
 
Protests by security guards have caused the closure of the Libyan ports of Marsa el-Hariga, Zueitina, Ras Lanuf and Es Sider, the crude pipeline linking the El Sharara and Elephant fields with the northern export terminal at Zawiya and the 10,000 b/d Brega refinery.
 
Benchmark Brent crude oil prices climbed above $117 per barrel in late August in response to the slump in Libyan production and amid expectations of military strikes on Syria.
 
The collapse of Libyan production and exports during the 2011 civil war eventually saw the
International Energy Agency (IEA) order oil to be released from emergency stockpiles, but the IEA has downplayed the likelihood of any similar move this time around.
 
A spokesman for the agency said on August 30 that the agency was concerned about the "harmful effects of high oil prices on the global economic recovery," was monitoring the market and stood ready to respond in the event of a major supply disruption.
 
However, he added, "the current situation does not call for an IEA response."
 
On September 9, Qatari oil minister Mohammad Bin Saleh al-Sada told reporters during a visit to Tokyo that OPEC was monitoring the Libyan situation closely but that there was no wider shortage of crude. Indeed, he said, the market appeared to be in a "healthy situation."
 
OPEC production had been above 31 million b/d for most of 2012, climbing as high as 31.75 million b/d in May last year, according to the Platts survey. It dipped to 30.65 million b/d in December and, apart from the occasional upward blip, has been falling since then.
 
OPEC, which is scheduled to meet next on December 4 in Vienna, has an official output ceiling of 30 million b/d but no formal individual country quotas.
 
For production numbers by country, click here. You may be prompted for a cost-free one-time-only log-in registration. An OPEC guide may be found at this link.
 
Platts OPEC and oil experts are available for media interviews; please consult Platts Media Center to schedule an interview. For other oil, energy and related information, visit www.platts.com.
 
About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets. A division of McGraw Hill Financial (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.
 
About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.
 
CONTACT
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SOURCE Platts

Thursday, September 12, 2013

Train from July crash in Canada carried mislabeled crude oil

Lac Megantic
Officials were surprised by the explosions because they were unaware that such volatile, unconventional crude was being carried by the train.

 

Fran├žois Laplante-Delagrave/AFP/Getty Images
 
The oil carried by a freight train that derailed and exploded in Quebec this year has been mislabeled and was more dangerous than previously known, Canadian officials said Wednesday, raising questions about the safety of increasing rail transport of crude oil products from shale and tar sands oil in the U.S. and Canada.
 
Forty-seven people were killed in the July disaster when the unattended train rolled away and derailed in the town of Lac-Megantic, near the Maine border. Several of the oil cars exploded, destroying the downtown area.
 
The train's shipment of North Dakota oil was mislabeled as a "Group 3" flammable liquid, when it should have been given a more explosive "Group 2" classification, the Canadian transportation safety board's chief investigator, Donald Ross, said.
 
Safety regulations for the transport of crude oil differ depending upon the type of oil and its flashpoint -- the lowest temperature at which it will ignite. Officials initially said they were surprised by the disaster because they thought the oil being transported was unlikely to ignite.
 
The announcement follows a report on the environmental effects of the disaster released last month by Quebec group La Societe pour Vaincre la Pollution (SVP), which showed extremely elevated levels of toxic chemicals and carcinogens in the area around the crash site. It also showed significant amounts of oil sludge at the bottom of nearby Chaudiere River and the lake the town is named after.
 
“These events are a wake-up call in the entire issue of our reliance on toxic fossil fuels,” SVP co-President Daniel Green said. “There is a human and environmental cost of extracting, transporting, refining and using them.”
 
Green told Al Jazeera that if routine sampling of the oil had been carried out, they would have known that this crude was much more explosive and ignitable than regular crude oil. "If people did their jobs, this would have been prevented," he said.
 
Green added that the mislabeled cargo could have resulted in more deaths and injuries, because first responders based their evacuation decisions on the type of oil involved.
 
A statement from the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration said shippers and rail carriers found to be out of compliance with hazardous materials regulations could be fined or placed out of service.
 
Green said tanker cars are designed depending on what is being transported in them. Extremely volatile propane would be transported in a tanker car that is specifically designed to withstand derailment and high temperatures.
 
U.S. inspection teams have been conducting spot safety checks of rail shipments of crude from the booming Bakken oil region since the disaster. The Bakken region underlies portions of Montana and North Dakota in the U.S., and Saskatchewan and Manitoba in Canada, and is where the unconventional crude that exploded in Lac Megantic originated.

Environmental risks

Green said that compounds from the oil can seep into the foundations of buildings in the contaminated area and begin evaporating -- and the vapor alone can pose a risk to human health.
 
Green said SVP found Benzopyrene, a carcinogen which can cause lung cancer if inhaled, in extremely high levels at the crash site. Benzene, another harmful pollutant found there, is associated with childhood leukemia.
 
SVP’s study, released on August 14, based on samples and tests on plants, water and soil extracted from the area, found extremely high levels of many types of chemicals. The study states that carcinogens, arsenic and oils were found at thousands of times the allowed maximum. 
The NGO said that unless the pollutants are contained in the next three months, annual ice break up and seasonal flooding will relocate toxins downstream – which could contaminate the river, drinking water and agricultural land.
 
Green said SVP filed a Freedom of Information Act request to get the measurements the government took from the area, but the government did not release information dealing with the concentration of toxins close to where the explosions occurred.
 
“They may be trying to avoid a panic, but these people have lived through hell and nothing will panic them now,” Green said. “There cannot be worse news than losing someone … and Lac Megantic is a small community, almost everyone knew someone who died in the disaster.”
 
The disaster raised questions about the increasing transport of oil by rail in the U.S. and Canada.
Much of that increase is from oil produced in the Bakken region. The train that crashed was carrying oil from North Dakota to a refinery in New Brunswick, Canada.
 
The train was operated by a U.S. company, the Montreal, Main and Atlantic Railway, but safety investigator Ross said New Brunswick's Irving Oil co. is responsible for the labels because it imported the goods.
In the first half of this year, U.S. railroads moved 178,000 carloads of crude oil. That's double the number during the same period last year and 33 times more than during the same period in 2009. The Railway Association of Canada estimates that as many as 140,000 carloads of crude oil will be shipped on Canada's tracks this year, up from 500 carloads in 2009.
 
With Al Jazeera and the AFP. With additional reporting by Renee Lewis.

Jubilee partners halt oil production

FPSO Kwame Nkrumah
 
 
The Jubilee partners have announced a planned halt of oil production offshore for 21 days. The suspension of production is to make way for routine maintenance of the Floating Production, Storage and Offloading (FPSO) platform, the FPSO Kwame Nkrumah.
 
The facility, currently moored at the Jubilee Oil Field in a water depth of 1,100 metres, has been in service for three years and has so far produced 77 million barrels of oil as of the close of production activities offshore yesterday. The planned shutdown is slated for Friday, September 20, 2013.
 
The General Manager of Tullow Ghana, lead operator of the Jubilee Field, Mr Charles Darku, said, “We embark on this exercise as part of our culture of adhering to world-class standards of operational performance management to ensure that the vessel operates at its optimal level and over its projected life span.” He said the Jubilee partners were committed to adopting proactive preventive measures, rather than reactive, whereby the operator had to carry out any maintenance when there was a defect or breakdown.
 
Mr Darku said a critical aspect was the building of a robust industry which could be counted among the best in the world. Asked if it would not affect the target operation to rake in revenue for the partners and the state, he said the planned shutdown had been factored into the plan and forecast of production for the year.
 
“This is necessary for safety reasons and it is normal practice in these circumstances,” he said. Mr Darku said the maintenance activity would include vessel inspection and cleaning and replacement of safety critical equipment.
 
He said the move was in line with its obligations for external class certification and adherence to global maintenance and integrity standards used throughout the oil and gas industry.
 
The partners said there would also be a team which would be moving personnel between Takoradi and the location of the FPSO Kwame Nkrumah to undertake the different aspects of the maintenance works.
 
He said the partners were undertaking the maintenance exercise with support services from a variety of upstream oil and gas service providers. The FPSO has the capacity to process 120,000 barrels of oil per day and has a storage capacity of 1.6 million barrels, with an associated gas production capacity of 160 million standard cubic feet a day.
 
Source: Daily Graphic - See more at: http://www.ghanabusinessnews.com/2013/09/11/jubilee-partners-halt-oil-production/#sthash.QPL2cOsR.dpufhttp://www.ghanabusinessnews.com/2013/09/11/jubilee-partners-halt-oil-production/

Ghana earns $1.4 billion in oil revenue.

 
 
 
Ghana earned $1.4 billion from the commercial production and export of oil from 2011 to June 2013, the Minister of Energy and Petroleum, Mr Emmanuel Armah Kofi Buah, has said.

He said 77 million barrels of oil had been produced as of September 10, out of which about 13 million barrels, representing Ghana’s share, went to the Ghana National Petroleum Corporation (GNPC).

The government invested the revenue in infrastructural development and other agreed purposes.

Speaking at a stakeholders’ forum on energy and petroleum revenue management in Takoradi yesterday, Mr Buah said the country earned $444.12 million in 2011, $541.07 million in 2012, while $422.76 million had been accrued as of the end of June 2013.

He said the Jubilee partners commenced the commercial production of oil in November 2010, producing 25,000 barrels per day, which increased to 80,000 barrels per day in October 2011.

The minister said while the partners expected production to increase further, the oil field rather experienced production decline from 80,000 barrels per day in November 2011 to 63,000 barrels per day in July 2013.

Mr Buah said the GNPC and the Jubilee partners had successfully carried out remedial works which had arrested the premature production decline and had since increased production to 110,000 barrels a day.

"This improvement is as a result of a successful acid stimulation operation performed on five of the nine Jubilee production wells,” he explained.

The country’s oil output was set to further increase with the recent signing of a plan of development for the Tweneboah, Enyenra and Ntomme (TEN) project and ongoing negotiations for the finalisation and signing of a plan for the development of the Sankofa oil and gas fields.

Investor interest soars

Mr Buah said the reduction of risk associated with oil production had resulted in an upsurge in investor interest in the country.

He said apart from 23 new oil discoveries, there were eight pending petroleum agreements, two of which were currently before the Cabinet, for oil exploration.
 

Ghana: Red Flags Over Jubilee Oil Wells

Ghana oil blocks map

 
 
Concerns over the safety of Ghana's oil production wells and their ability to further hold the gas component of the find has come up for discussion as the Ghana Gas Company faces possible further delays in getting a plant ready to process the associated gas.
 
But the Ghana Gas company is optimistic it can still make the January 2014 time line for the delivery of gas from the jubilee fields, despite the various setbacks which had led to several postponement of the completion date.
 
Chief Executive Officer of the Ghana Gas Company, Dr. Sipa Yankee told The Chronicle that engineers working on the $750 million gas processing plant are looking at various options at meeting a December /January completion timeline, but noted that they are careful not to rush into anything that would endanger the future life of the project. "The safety of the Gas infrastructure and personnel are very important," he stressed.
 
Meanwhile, the jubilee partners have hinted at work on an alternative plan to save the wells from collapse due to the inability of the Ghana Company's inability to process the associated gas from the oil find and to uphold Ghana's no gas flaring policy.
 
In its July 3, 2013, Commercial operational update, Tullow Ghana, hinted of plans to construct additional storage facilities for the gas component of the oil production.
 
"By the end of the third quarter of 2013, work on a gas handling constraint on the FPSO is expected to be completed and Jubilee production is forecasted to increase to over 120,000 bopd.
 
"A gas injection well is also expected to be drilled and completed by the fourth quarter for additional reservoir pressure support and gas disposal in advance of the start up of the gas export facilities next year", Tullow noted.
 
The Atuabo Gas project in the Western Region suffered its latest setback when of a container carrying a consignment of materials for the project, including 34 fabricated plates valued at $2.6 million for the liquefied petroleum gas (LPG) storage tank were damaged when the Chinese vessel Senghuang Song, on which it was being transported, was involved in an accident as a result of bad weather.
 
Against this background, many have predicted that the Ghana Gas Company was most likely to shift its completion date to the later part of 2014 while others have been trying to quantify the loses the country is likely to incur should the project delay further.
 
The Volta River Authority, the main power generator spends at least $3million a day on light crude oil and has been billed to be a major benefactor of gas from the Ghana gas company, when Gas from the Jubilee field comes on stream.
 
The Jubilee gas is expected to half the fuel cost of VRA and enable it save at least $1.5 million which would have otherwise been used to purchase light crude. The further delays in the gas project will also mean that the Gas Company would be losing out on revenue.
 
The Volta River Authority told The Chronicle that the delay in getting the gas from the Jubilee field on stream would have no direct impact on their operations.
 
Head of Corporate Communications at the Volta River Authority (VRA) Samuel Kwesi Fletcher told The Chronicle that currently the VRA has made its own arrangements, for without immediate plans for the gas from the Ghana Gas Company until their Commercial Operating date is announced.
Dr. Sipa Yankey, however, explains that the damage to the equipments for the project does not strictly come at any additional cost to the government of Ghana, as Sinopec, the Chinese firm building the plant had all the materials insured.
 
"The only cost is the delay ... . loss of saving to VRA for the three months that we will not be producing and it will be a Loss of revenue to the gas company as well," Dr. Sipa Yankey noted.