Refining crude at TOR won’t be profitable – GNPC

 Mr Alexander Mould

The Ghana National Petroleum Corporation (GNPC) says Tema Oil Refinery (TOR) in its currents state is not profitable.

It said unless the Tema Oil Refinery (TOR) is put into proper shape, it cannot be allowed to refine crude from the jubilee oil fields.

The GNPC also discounted reports that it is refusing to supply TOR with crude oil.

TOR, over the past few years has not been operating to its full capacity due to its huge indebtedness and other operational inefficiencies.

Workers of TOR have been asking the government to allow Ghana’s crude oil to be refined by them stating that refining the nation’s crude abroad is not cost effective.

The Africa Centre for Energy Policy (ACEP) has cautioned that TOR should only be allowed to refine crude oil if it will be cheaper.

Speaking on the Citi Breakfast Show, the Chief Executive Officer (CEO) of the GNPC, Alex Mould said the Corporation is not insisting on Ghana’s crude oil being refined at TOR because some fundamental problems at the refinery must be addressed.

He said the GNPC must be able to get value for money because “if you send it [crude oil] there, you have to be sure that the yields of the petroleum products you get; you should be able to sell it at the current prices at the pump so that you can get your money back.”

Mr. Mould acknowledged that TOR has faced a lot of neglect over the years which led to the shutdown.

The GNPC has between 18 to 20% of the total crude from the jubilee oil fields and it is mandated to sell the crude oil and pay the money within 60 days.

According to the GNPC CEO, if the crude oil is supplied to TOR, the refinery is expected to pay for the supplies and support it with financial guarantees.

He admitted that TOR is capable of refining crude oil but “a complete process audit of the refinery has to be done…to bring it into proper shape where it should be able to be profitable.”

Mr. Mould questioned how much the state would have to spend on TOR to enable it operate at full capacity.

“How much is it going to cost us to fix Tema Oil Refinery? Where are we going to get the money? Are we going to sue tax payer’s money, from the budget or are you going to leverage on the Tema Oil Refinery’s balance sheet?” he asked.

In his opinion, no bank in Ghana will be willing to leverage on the balance sheet of TOR because “there is a balance sheet problem.”

He further inquired whether the government will bring in a strategic investor to invest in TOR although such investors would demand total control over the refinery.

The GNPC boss was convinced that TOR’s shareholder [government] would have to make a choice.
“Every crude oil we will take to Tema Oil Refinery, there will be a loss and this loss is paid by the tax payer” he insisted, adding that, “refining at a loss is not a business proposition. It may be a political proposition but it is not a business proposition.”

By: Efua Idan Osam/citifmonline.com/Ghana

Crude oil prices rise amid air strikes in Iraq

US benchmark West Texas Intermediate for September deliver rose 32 cents to $97.97 while Brent crude for September gained 23 cents to $105.25 in mid-morning trade.

Read more at:
http://economictimes.indiatimes.com/articleshow/40039790.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

http://economictimes.indiatimes.com/markets/commodities/crude-oil-prices-rise-amid-air-strikes-in-iraq/articleshow/40039790.cms

 

SINGAPORE: Oil prices rose in Asia Monday as dealers monitor sustained US air strikes on extremist militants in Iraq who are threatening the crude-rich Kurdish region, analysts said.

US benchmark West Texas Intermediate for September delivery rose 25 cents to $97.90 while Brent crude for September gained six cents to $105.08 in afternoon trade.

Iraq's Kurdish peshmerga forces on Sunday reclaimed two towns from Islamic State fighters, buoyed by three days of US air strikes to stem the jihadist advance.

US President Barack Obama on Thursday ordered his country's warplanes back into Iraqi skies to prevent genocide by the jihadists against besieged religious minority groups and prevent an advance on the Kurdish capital Arbil where US personnel are stationed.

"Investors take comfort in the knowledge that insurgents will be contained in northern Iraq, away from the oil fields in Kurdistan," said Desmond Chua, market analyst at CMC Markets in Singapore.

The so-called Islamic State group controls large swathes of Iraq's north and west, and have declared a "caliphate" in those areas.

The sweeping offensive began on June 9, preventing Baghdad from exporting oil via a pipeline to Turkey and by road to Jordan.

Iraq's oil ministry on July 24 said crude exports totalled 2.42 million barrels per day in June, falling far short of a budgeted projection of 3.4 million bpd.

As the number-two producer in the OPEC cartel, Iraq's 11 per cent of proven world reserves plays a key role on world markets and prices after violence disrupted oil exports from Syria and Libya.

The dip in exports adds to the woes of Iraq, which is heavily dependent on oil revenues while spending more on military equipment to battle the Islamic State group.

Ebola virus warning given

 

http://www.tankeroperator.com/ViewNews.aspx?NewsID=5860

 

Three global shipping organisations have warned their members on the risks to ships’ crews whose vessels call in countries affected by the Ebola virus.

The International Chamber of Shipping (ICS), International Maritime Employers’ Council (IMEC), and the International Transport Workers’ Federation (ITF) urgently advise that on all such vessels:

 

1)  The Master should ensure that the crew are aware of the risks, how the virus can be spread and how to reduce the risk.

2)  The ISPS requirements on ensuring that unauthorised personnel do not board the vessel should be strictly enforced throughout the duration of the vessel being in port.

3)  The Master should give careful consideration to granting any shore leave whilst in impacted ports.

4)  The shipowner/operator should avoid making crew changes in the ports of an affected country.

5)  After departure, the crew should be aware of the symptoms and report any occurring symptoms immediately to the person in charge of medical care.

 

The advice is supplemented with information from the World Health Organisation on the virus (available here www.who.int/mediacentre/factsheets/fs103/en)

 

A spokesperson for the three organisations, said: “Everyone is deeply concerned for those suffering from the Ebola epidemic and supportive of a co-ordinated world response to help them. We particularly applaud all those medical staff who are risking their lives to help. In the meantime we want to make sure that those in the world shipping industry play our part in ensuring the safety of crews visiting the affected countries and minimising the risk of the virus spreading further.”

Drums of War Sound for OPEC

http://blogs.wsj.com/moneybeat/2014/08/06/drums-of-war-sound-for-opec/

By Liam Denning

 

Amid war and rumors of war, it seems odd that oil prices have dropped so far in August. That might be because another war could be brewing: within OPEC. Saudi Arabia on Wednesday released September official selling prices for its oil. It offered bigger discounts for Asian and U.S. buyers compared to August’s levels, while raising prices for Europe.

 

As energy economist Phil Verleger pointed out in a recent report, this could indicate a growing battle for market share. Rising U.S. shale oil output has caused American imports of oil from West Africa to plummet from an annualized average of two million barrels a day in late 2007 to about 300,000 barrels a day currently. That forces countries such as Nigeria to push their barrels towards other markets, such as Asia—putting them in direct competition with Saudi Arabia and other OPEC members in the Middle East.

 

By cutting Asian and U.S. prices while raising European prices, Riyadh may be sending a signal to Nigeria and others to target Europe but not price as aggressively in Asia. As OPEC’s biggest producer, Saudi Arabia can choose to accommodate competing barrels by cutting its own output—or price its own oil more competitively to defend its market share. That raises the risk of a price war in OPEC.

Ghana to get new US$600M oil refinery

http://www.citifmonline.com/2014/08/05/ghana-to-get-new-us600m-oil-refinery/

The ongoing Takoradi Port Expansion Project has already started attracting investments into the Port’s Oil & Gas enclave as the Ghana Ports & Harbors Authority(GPHA) works to position the Takoradi Port as a major maritime services support hub along the west coast of Africa.

COX OIL, a Texas based oil and gas company has announced plans to build a $600 million state of the art oil refinery plant at the Takoradi Port area. The project would come with the associated infrastructure required the West African sub-regional market.

Chris Wilmot, CEO of Takoradi Oil Refinery Company Limited, the project sponsors, and Brad Cox and Craig Sanders, Chairman and CEO respectively of COX OIL the investors, paid a working visit to the port on Tuesday July 29, 2014 and met with the Director General of the Ghana Ports & Harbors Authority and other stakeholders at the proposed project site.

According to the investors, Takoradi port was chosen as the site of their new refinery for obvious strategic reasons, chief among them is the existing infrastructure at the port and the ongoing expansion program that GPHA has embarked upon to improve the port.

In a statement, CEO of COX Oil, Craig Sanders said “all the necessary ingredients for a win–win situation are here at the Takoradi port. You have an active operating port with ready and easy access to receive your feedstock and ship your products, the rail line and road networks terminates right at the port, the safety of our operations in a special designated zone is assured, the security of tenor of the land on which the refinery would be built is assured by our long term lease with GPHA, you are located in a modern and growing city that could support relatively good quality of life for families and businesses, you have abundant human capital that would provide experienced labor force. We couldn’t have asked for a more suitable location.”

The CEO of Takoradi Oil Refinery Company Limited, Chris Wilmot has assured partners of the project that they would employ the best practices to make the project extremely beneficial to Ghana’s economy.

“Texas is the world capital of the oil, gas and the energy sector and we want to replicate the efficiencies and best corporate practices of Texas right here in Ghana for the benefit of the Ghanaian economy and people of Ghana. This project seeks to enhance energy security for Ghana and the sub region.”

Project plan

The refinery will be built on approximately 100 acres of reclaimed land at the harbor in an area designated specifically as a Maritime Industrial Enclave.

As part of the ongoing Takoradi Port Expansion Project, the GPHA will reclaim more than 1,200 hectares of land and deepen the harbor basin to minus 20 meters to enable post PANAMAX ships to call at the port.

Other ports infrastructure and access roads to and from the port would also be improved to ease traffic congestion. The sea ports of Takoradi and Tema in Ghana are seen as growth poles and drivers of economic activities and national development.

According to the project sponsors and investors, the construction of the refinery is slated to kick off in the first quarter of 2015.

COX OIL projects that the Takoradi Oil Refinery Company Limited will start operations within 2 years after project commencement date.

Takoradi Oil Refinery Company Limited would have a production capacity of about 65000 barrels of oil per day.

By: Anim Kwaku Boadu/citifmonline.com/Ghana

Tullow Exiting Liberia and Sierra Leone

 

http://www.petroleumafrica.com/tullow-exiting-liberia-and-sierra-leone/

 

In its 2014 half-yearly results Tullow Oil revealed that it would be exiting two West African countries. Tullow said that after evaluating potential options in Liberia and Sierra Leone it “made the decision not to renew its license interests and will exit its position.”

 

The company’s interest in Block LB-15 offshore Liberia expired in June and its interest offshore Sierra Leone on Block SL-07B-11 will expire in August. The expiration of the two licenses, leaves Tullow without assets in the two countries.

 

Tullow gained its interest in Liberia through a farm-in agreement with Anadarko Petroleum, acquiring a 25% stake in three Liberian blocks; LB-15, LB-16, and LB-17. One well was drilled that proved to be non-commercial and after a review Tullow relinquished its interest in LB-16 and LB-17, leaving it with LB-15 which has now also been relinquished.

 

In Sierra Leone, again through a deal with Anadarko, Tullow picked up a 10% interest in SL-07B-11, the interest was subsequently increased to 20%. In September 2009, Tullow and its partners made a discovery at the Venus B-1, which was followed up with two further discoveries; the Mercury-1 and the Jupiter-1.

Battle in Benghazi—Libya Situation Grows Critical

 

http://www.petroleumafrica.com/battle-in-benghazi-libya-situation-grows-critical/

 

The situation in Libya has grown even more critical as militant fighters overran a Libyan special forces base in the eastern city of Benghazi.  A special forces officer told Reuters that the main camp had to be abandoned after coming under sustained attack from a coalition of Islamist fighters and former rebel militias in the city.

 

The battle at the special forces camp involved rockets and warplanes and left at least 30 people dead.

“We have withdrawn from the army base after heavy shelling,” Saiqa Special Forces officer Fadel Al-Hassi told Reuters.

 

Fighting in both Benghazi and Tripoli are reaching levels not seen since the civil war to oust Muammar Qaddafi.

 

Libya has been struggling for some form of normality since the end of the civil war but this recent violence has exceeded anything seen in the past couple of years, leading to a number of countries pulling their people out. The UN began pulling out people earlier this month and the US, whose embassy is near the site of the airport where some of the worst fighting has been taking place, evacuated its embassy staff in Tripoli on July 26. Diplomats from the embassy were driven over the border into Tunisia under heavy guard.

 

Turkey ordered its people home and in late-June requested its state-run oil firm TPAO pull its employees out of Libya. The UK and other European governments were also pulling their people out. Canada is temporarily pulling out its diplomats due to fears about their safety.