Thursday, November 29, 2012
Wednesday, November 28, 2012
NDC collapses TOR in oil rich Ghana
nformation reaching the New Statesman indicates that Ghana’s only oil refinery, The Tema Oil Refinery (TOR), has virtually collapsed under the tenure of the ruling National Democratic Congress administration.
Since NDC government took over the reins of government in 2009, TOR has been virtually dormant except in 2010 when the company operated continuously on the back of regular crude oil supplied by the Ghana National Petroleum Company under a 1-year ‘processing’ or ‘tolling’agreement. However, since then, TOR’s plants have been operating at less than 30% of capacity in 2009, 2011 and 2012.
TOR’s virtual collapse has resulted in continuous year after year financial losses, massive brain drain of technical staff coupled with low morale and motivation among current TOR staff and management.
The New Statesman can confirm that the NDC government has pursued policies designed to ‘kill’ TOR – by promoting over 12 new private fuel importers, while denying tor the working capital it needs.
At the same time, the NDC government has refused outright to supply jubilee crude oil to TOR, with the baseless excuse that jubilee crude is not suitable for TOR. Meanwhile TOR’s assay tests have confirmed that TOR can easily handle and refine jubilee crude.
In this edition, the New Statesman will assess TOR’s current situation and the NDC’s failed promises regarding the revival of TOR.
TOR’s current situation
TOR is still buried under massive debt to the tune of some US$350 million and is unable to operate. The company owes this amount to twenty (20) creditors including: Banks (Ghana Commercial Bank and Barclays); Oil suppliers (Vitol, Glencore, Sahara, VRA, GNPC, NNPC); Utility companies (Electricity Company of Ghana & Ghana Water Company Limited); Contractors (GLOTEC, TSAKOS); Tax agencies (SSNIT and IRS); and other companies (Insurance and TOR provident fund)
Expensive spare parts ordered and delivered to the Tema ports since 2009 have not been cleared and have been left to the mercy of the weather.
Technical personnel with years of experience, who are critical to the operations of the refinery, have also left for Qatar, Cameroon, Equitorial Guinea, Dubai and Abu Dhabi. The New Statesman can confirm that over 20 key engineers and technicians left TOR since 2011. It is being reported that TOR’s board and management have now resorted to offering“bribes” to some key staff not to decamp to the Middle East refineries.
As though this was not enough, the government-to-government (g-to-g) crude oil agreement whereby the Nigerian National Petroleum Corporation (NNPC) supplies crude oil to TOR under concessionary terms has been in limbo since beginning 2011, as is the agreement with Equitorial guinea.
TOR has not issued audited accounts since 2008. Without proper financial accounts and a clear turnaround plan, TOR’s bankers are unable to provide working capital for tor’s sustained operations.
These problems have reduced TOR to a fuel storage depot where private importers store their fuel in return for a modest fee. These storage fees have become TOR’s only stable source of cash. As a result TOR is unable to meet salaries and other statutory payments, including payments to SSNIT, IRS and staff provident funds.
NDC government’s failed promises to TOR
The Mills/Mahama/Amissah Arthur government have not given adequate financial support to TOR. In 2010, the Ministry of Finance and Economic Planning paid a total of GH¢1.4 billion to Ghana Commercial Bank on TOR’s behalf. This was only a part of TOR’s debt, leaving a balance of about GH¢400 million payable to other creditors.
Beyond the payments to Ghana Commercial Bank, the NDC government has only given promises to TOR, but has not provided any additional funds.
In August 2011, then vice President John Mahama announced that the government of Ghana would provide $56 million to TOR immediately for retooling to improve its efficiency and performance.
In addition, the Minister of Finance, Dr. Kwabena Duffour, stated at the same meeting, that the TOR debt recovery levy had accumulated GH¢270 million as of August, 2011 which would be used as collateral to raise $200 million working capital for TOR.
As at today, 9th November 2012, the NDC government has failed to keep any of the above promises. Instead of taking bold and speedy actions to save tor, the NDC government continues to ‘dilly dally’, by launching endless consulting studies to find out how to save TOR.
Monday, November 26, 2012
Just Explain It: What is the Strategic Petroleum Reserve?
http://finance.yahoo.com/blogs/just-explain-it/just-explain-strategic-petroleum-160032124.html
Eliminating America's dependency on foreign oil has been a policy goal for at least the last two U.S. Presidents. According to the International Energy Agency, by 2020, the U.S. will overtake Saudi Arabia as the world's number one oil producer.
However, there's still some work to do. The United States Energy Information Administration reported that 45% of the petroleum consumed by the U.S. in 2011 was from foreign countries. Even though the country is well on its way to becoming self reliant, there's always a chance we could hit a major bump in the road. The good thing is we have protection. It's called the Strategic Petroleum Reserve or S.P.R.
So here's how the S.P.R. works:
The reserve was created after the 1973 energy crisis when an Arab oil embargo halted exports to the United States. As a result, fuel shortages caused disruptions in the U.S. economy.
The reserves are located underground in four man-made salt domes in Texas and Louisiana. All four locations combined hold a total of 727 million barrels of oil. The inventory is currently at 695 million barrels. That's around 80 days of import protection. It's the largest emergency oil supply in the world -- it's worth about $63 billion.
Only the President has the ability to tap the reserves in case of severe energy supply interruption. It's happened three times. Twice within the last decade. In 2005, President Bush ordered the emergency sale of 11 million barrels when Hurricane Katrina shutdown 25 percent of domestic production. In 2011, President Obama ordered the release of 30 million barrels to help offset disruptions caused by political upheaval in the Middle East.
Following the release order, the reserve issues a notice of sale to solicit competitive offers. In the most recent sale involving the Obama administration, the offers resulted in contracts with 15 companies for delivery of 30.6 million barrels of oil. To put that in context, last year the U.S. consumed almost seven billion barrels of oil — that's 19 million per day -- or about 22% of the world's consumption.
Related Link: Using the Strategic Petroleum Reserve Like a Spigot
The release in 2011 had little effect on the price of gas at the pump. Consumers paid about 2% less for a week before the prices began to climb again.
Related link: Just Explain It: Why Social Security is Running Out of Money
Did you learn something? Do you have a topic you'd like explained? Give us your feedback in the comments below or on Twitter using #justexplainit.
Sunday, November 25, 2012
Natural gas drillers target US truck, bus market
Associated Press/Gene J. Puskar - In this Nov. 19, 2012 photo, Waste Management driver Alan Sadler fills his truck with CNG gas at the company's filling station in Washington, Pa. Years from now, motorists
SCRANTON, Pa. (AP) — If the trash truck or bus rolling down your street seems a little quieter these days, you're not imagining things. It's probably running on natural gas.
Surging gas production has led the drilling industry to seek out new markets for its product, and energy companies, increasingly, are setting their sights on the transportation sector.
Touting natural gas as a cheaper, cleaner-burning alternative to gasoline and diesel, drillers, public utilities and government officials are trying to boost demand for natural gas buses, taxis, shuttles, delivery trucks and heavy-duty work vehicles of all sorts, while simultaneously encouraging development of the fueling infrastructure that will be needed to keep them running.
The economics are compelling. Natural gas costs about $1.50 to $2 per gallon equivalent less than gasoline and diesel. That can add up to tens of thousands of dollars in savings for vehicles that guzzle the most fuel.
Fleet managers are taking notice. Companies as diverse as AT&T, Waste Management and UPS are converting all or parts of their fleets to natural gas, as are transit agencies, municipalities and state governments.
"Now that you can save a dollar or two dollars a gallon, there's huge interest in the market, especially in those fleets that use a lot of fuel," said Richard Kolodziej, president of the trade group Natural Gas Vehicles for America.
Waste Management, the nation's largest trash hauler, has committed to replacing 80 percent of its fleet with trucks powered by natural gas. Rich Mogan, the company's district manager in southwestern Pennsylvania, said about half of his fleet of 100 trucks now run on the cheaper fuel. They are quieter and less expensive to maintain, he said, and "we are looking at a 50 percent reduction in our (fuel) cost."
Driller EQT Corp. opened its own natural gas filling station outside Pittsburgh in summer 2011, using it to refuel its trucks while also making it available to the public. It's now doing about 1,000 fill-ups a month — and only half involve EQT vehicles. Other users include City of Pittsburgh trash trucks, shuttles run by the University of Pittsburgh Medical Center, a taxi service and a handful of consumers.
EQT wasn't sure how the station would be received.
"We didn't have commitments at all beyond our own vehicles. It was really a guess of what we think we could do," said David Ross, an EQT vice president focused on market development. "We had people who, at the beginning, said, 'No, we're not interested.' Today they actually own a vehicle that's natural gas. I think having the physical asset sitting there has helped it become real for people."
Natural gas vehicles aren't new. But the drilling boom — spurred by new technology that unlocked vast reserves of natural gas in deep rock formations like the Marcellus Shale underneath parts of New York, Pennsylvania, West Virginia and Ohio — created a gas glut that depressed prices. That, in turn, has made natural gas more attractive as a transportation fuel.
Partly because of a lack of fueling infrastructure, gas isn't expected to grab significant market share from petroleum anytime soon. Only a tenth of 1 percent of the natural gas consumed in the Unites States last year was used as vehicle fuel, according to the U.S. Department of Energy. Of more than 250 million vehicles on the road today, perhaps 125,000 are powered by natural gas.
But energy companies see potential.
Chesapeake Energy Corp., the nation's No. 2 producer, has been especially aggressive about targeting transportation. The Oklahoma City-based driller invested $150 million in Clean Energy, a company backed by Texas investor T. Boone Pickens that's building a nationwide network of liquefied natural gas refueling stations for long-haul truckers. Chesapeake also teamed up with General Electric on "CNG In A Box," a compressed natural gas fueling system for retailers; announced a partnership with GE and Whirlpool to develop a $500 appliance that would allow consumers to refuel their natural gas-powered cars at home; and has been working with 3M to design less expensive tanks.
"It's simply a matter of time before the U.S. meaningfully shifts from transportation systems built around consuming high-priced oil to consuming low-priced domestic natural gas," Chesapeake CEO Aubrey McClendon wrote to investors this year.
States are also promoting natural gas as a transportation fuel. Nearly two dozen state governments have formed a consortium to add natural gas-powered vehicles to their fleets, an effort launched by the governors of Oklahoma and Colorado that attracted more than 100 bids from dealerships last month.
Separately, the Pennsylvania Department of Environmental Protection is dangling $20 million worth of incentives to goose the market for medium- and heavy-duty natural gas vehicles. The three-year program, which launches Dec. 1 and is funded by a state fee on drillers, aims at putting 600 to 700 new natural gas-powered trucks and buses on the road in its first year.
State officials also hope to use the grant program to spur a network of new filling stations. Pennsylvania has only 14 publicly available stations, and more places to fill up could help stoke consumer demand.
"The big prize here is to get consumers purchasing vehicles that run off natural gas," said Geoff Bristow of the Pennsylvania DEP.
Industry officials, though, acknowledge that's a long way off.
Conventional gasoline engines are becoming more efficient, and consumers might balk at spending more on a natural gas-powered car. Plus, the United States has less than 600 natural gas filling stations available to the public, compared with 160,000 gas stations.
The only factory-made, natural gas-powered passenger car available to U.S. consumers is the Honda Civic Natural Gas. While Honda expects sales to top 2,000 this year, that's a fraction of the number of gasoline-powered Civics it moves in a single month.
Analyst Mike Omotoso of research firm LMC Automotive sees natural gas as a niche transportation fuel.
"There is very little interest in natural gas for cars," Omotoso said. "People looking for alternatives are looking at hybrids and electric vehicles."
For now, the gas industry is concentrating on heavy trucks and buses, vehicles that ply a regular route and return to the same base to fill up.
But both Kolodziej and Norman Herrera, Chesapeake's director of market development, see a future where natural gas-powered cars and SUVs are commonplace and "you have a market like transit and trash, where all the pieces are in place and all the bottlenecks have been resolved," Herrera said.
Friday, November 23, 2012
TANKEROperator news
Maersk quits handysize gas carrier sector
(Nov 23 2012)
- Maersk Tankers has sold all 11 vessels in its Handygas segment to Navigator Gas. >>more
Iranian oil still flowing freely
(Nov 23 2012)
- Iran’s October crude production increased, as has the country’s exports, according to data released by the IEA. >>moreOutstanding loans- new method of financing needed
(Nov 23 2012)
- The price of secondhand tankers has been relatively stable, despite the pressure tanker markets have been under for the majority of the year, a leading consultancy said. >>moreTORM's annual losses will increase due to restructuring
(Nov 23 2012)
- TORM has upped its forecasted loss before tax considerably for this year. >>moreNAT buoys up finances- looks to reduce vessel opex
(Nov 23 2012)
- Nordic American Tankers’ (NAT) financial position has been strengthened by the establishment of a non-amortising credit facility that extends to the autumn of 2017. >>moreDiversified fleet helps Marenave achieve a net profit
(Nov 23 2012)
- Marenave Schiffahrts has reported a consolidated net profit of €5.8 mill for the first nine months of this year. >>moreOdfjell in new bonds issues
(Nov 23 2012)
- Odfjell has put together a NOK200 mill three-year and a NOK500 mill six-year senior unsecured bond isssue. >>moreTEN reduces losses- confident going forward
(Nov 23 2012)
- Tsakos Energy Navigation (TEN) reported revenues, net of voyage expenses and commissions, of $202.4 mill in the first nine months of this year. >>moreEitzen gains a reprieve
(Nov 23 2012)
- Eitzen Chemical reported EBITDA of $6.2 mill for the third quarter of 2012, compared to $10.3 mill in the previous quarter. >>moreRecord keeping and assessment vital in STS ops
(Nov 23 2012)
- STS operations have been safe over the past few years, illustrated by the fact that there were only isolated incidents recorded, compared to the number of operations conducted on an annual basis. >>moreHighly efficient MR delivered to LR class
(Nov 23 2012)
- South Korea’s Hyundai Mipo Dockyard (HMD) has delivered 'King Gregory', a 52,000-dwt tanker, to Consolidated Marine Management (CMM), the shipping branch of the Latsis Group. >>moreBV's tanker success
(Nov 23 2012)
- Bureau Veritas’ classed tanker fleet stands at 1,064 vessels of 16.6 mill gt, as at 20th November, the class society said. >>moreGas monitoring system for tankers
(Nov 23 2012)
- Martek Marine has unveiled Marine Tankscape, a new gas monitoring system for tankers and reefer vessels. >>moreNovenco snapped up by Wilhelmsen
(Nov 23 2012)
- Wilhelmsen Technical Solutions (WTS) has acquired Novenco Fire Fighting (NFF). >>moreWarsash and WrightWay gain HELM accreditation
(Nov 23 2012)
- Warsash Maritime Academy (WMA) claimed to be the first training provider in the UK to gain full MCA approval for its Human Element, Leadership and Management course at the Operational Level (HELM). >>moreOW Bunker opnes up in GoM
(Nov 23 2012)
- OW Bunker has positioned a new bunker tanker in the Gulf of Mexico. >>moreLeading senior management changes
(Nov 23 2012)
- There have been several senior management changes announced in the past couple of weeks. >>moreRussian LNGC takes shape- Kozmino expands
(Nov 23 2012)
- On 4th November, a keel laying ceremony took place at the STX Offshore & Shipbuilding to mark the start of the building on the LNGC ‘Velikiy Novgorod’. >>moreTimecharter rates holding
(Nov 23 2012)
- There were several charters and sales reported during the past few weeks. >>moreFairwell 'German Tanker King'
(Nov 23 2012)
- It is with deep regret that we have report the passing of Jurgen Salamon, managing partner of the Dr Peters group and Germany’s leading tanker financier, at the age of 65. >>more
Thursday, November 22, 2012
4 Chinese oil workers freed by Colombian rebels
By | Associated Press –
The FARC has been fighting successive Colombian governments for a half century and has used kidnapping for political leverage and as a financing source, at one point holding three U.S. military contractors as well as several dozen prominent Colombian politicians.
The country chief of the International Committee of the Red Cross, Jordi Raich, told reporters the four were freed by a small group of unarmed men in civilian clothing. He said the freed oil workers all appeared in good health though one appeared to have difficulty walking and would surely be given a medical checkup.
Images of them taken by a local TV network showed the men, bearded and with long hair, wearing hats in San Vicente early Thursday. One was in a wheelchair
Employed by the British company Emerald Energy, which is part of the China-based Sinochem Group, they were seized June 8, 2011, while engaged in oil exploration work.
The men's driver, who was released with their vehicle, said they were taken by at least seven FARC rebels.
Authorities identified the freed men as Tang Guofu, 28, Zhao Hongwei, 36, Jian Mingfu, 46, and Jiang Shan, 24. They said Jiang was the translator.
The men were flown to Bogota on a plane chartered by the Chinese Embassy. Ambassador Wang said they would fly home to China on Friday.
Wang has said the embassy had never received any proof-of-life evidence for the four men and that neither their relatives nor the company had contact with them.
The FARC said in early September, when it and the government announced the beginning of formal peace talks, that it no longer held any kidnap victims.
Yet the citizen's group Pais Libre, which tracks kidnap victims, claims the rebels have kidnapped at least a dozen people this year and that dozens more abducted in previous years remain unaccounted for.
Associated Press/Chinese Embassy in Colombia - This photo released by China's embassy in Colombia shows China's ambassador to Colombia Wang Xiaoyuan, second from right, shaking hands with an unidentified Chinese
BOGOTA, Colombia (AP) — Four Chinese oil workers have been freed in the same southern jungles where the country's largest rebel group kidnapped them 17 months ago, police said Thursday. China's ambassador said that no ransom was ever sought for the men.
The four Chinese nationals, three contractors and a translator, were the only foreigners known to still be held by the Revolutionary Armed Forces of Colombia, or FARC.
Their release around midnight Wednesday to the International Red Cross comes three days after the FARC and Colombia's government began peace talks in Cuba that were partially conditioned on the rebels halting extortive kidnapping. It led Colombia's defense minister to call them "mendacious and traitorous" Thursday for having claimed in September to no longer hold kidnap victims.
The rebels announced in February that they were halting all kidnapping and they insist they hold no more captives, neither "political prisoners" nor "economic" hostages.The FARC has been fighting successive Colombian governments for a half century and has used kidnapping for political leverage and as a financing source, at one point holding three U.S. military contractors as well as several dozen prominent Colombian politicians.
Asked whether a ransom was paid for the men's release, Chinese Ambassador Wang Xiaoyuan told reporters in Bogota that "a ransom was not even demanded." He said no one ever claimed responsibility for the kidnapping.
He did not explain how the men's release was accomplished.
Colombian officials said they had no doubt the FARC was behind the kidnapping and said the handover was arranged by the Chinese Embassy and the International Red Cross
State police chief Col. Carlos Vargas said the four were released in good shape in a rural area of San Vicente del Caguan, a FARC bastion.The country chief of the International Committee of the Red Cross, Jordi Raich, told reporters the four were freed by a small group of unarmed men in civilian clothing. He said the freed oil workers all appeared in good health though one appeared to have difficulty walking and would surely be given a medical checkup.
Images of them taken by a local TV network showed the men, bearded and with long hair, wearing hats in San Vicente early Thursday. One was in a wheelchair
Employed by the British company Emerald Energy, which is part of the China-based Sinochem Group, they were seized June 8, 2011, while engaged in oil exploration work.
The men's driver, who was released with their vehicle, said they were taken by at least seven FARC rebels.
Authorities identified the freed men as Tang Guofu, 28, Zhao Hongwei, 36, Jian Mingfu, 46, and Jiang Shan, 24. They said Jiang was the translator.
The men were flown to Bogota on a plane chartered by the Chinese Embassy. Ambassador Wang said they would fly home to China on Friday.
Wang has said the embassy had never received any proof-of-life evidence for the four men and that neither their relatives nor the company had contact with them.
The FARC said in early September, when it and the government announced the beginning of formal peace talks, that it no longer held any kidnap victims.
Yet the citizen's group Pais Libre, which tracks kidnap victims, claims the rebels have kidnapped at least a dozen people this year and that dozens more abducted in previous years remain unaccounted for.
Defense Minister Juan Carlos Pinzon took the opportunity to accuse the FARC of being "a mendacious and traitorous organization" that "lies to the country and the international community.
"We have already become accustomed to hearing a lie every time they pick up a microphone," he told a gathering Thursday at a police operations center in Tolima state, according to the ministry's website.
Pinzon used equally harsh rhetoric Monday in reacting to the FARC's announcement of a unilateral two-month cease-fire that began the following day.
___
Associated Press writers Vivian Sequera in Bogota and Frank Bajak in Lima, Peru, contributed to this report.
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