Ghana: Red Flags Over Jubilee Oil Wells

Ghana oil blocks map



 

http://allafrica.com/stories/201309110303.html?viewall=1

 

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.

‘Demand for Nigerian crude to fall as OPEC spare capacity surges on shale’

Nigeria

 

http://businessdayonline.com/2013/05/demand-for-nigerian-crude-to-fall-as-opec-spare-capacity-surges-on-shale/

 

The demand for Nigerian crude is set to fall as OPEC’s spare crude oil production capacity is expected to surge 25 percent in the next two years due to U.S. shale output which will crimp demand for the group’s supplies, the International Energy Agency (IEA) said.

 

The Organisation of Petroleum Exporting Countries (OPEC) is forecast to increase its implied spare output capacity to a peak at 7.18 million barrels a day in 2015 versus 5.76 million this year, the IEA said in its medium-term oil market report.

 

The figure is calculated by subtracting the anticipated demand for OPEC crude from the group’s total production capacity.

 

The organisation’s 12 members are “facing headwinds from the shale oil and gas boom in North America,” which may supplant some OPEC supplies, the IEA said.

 

Oil exports account for 70 percent of Federal Government’s revenue and 95 percent of foreign exchange earnings for Nigeria, leaving the country vulnerable to external shocks.

 

Nigerian crude oil exports to the US could fall by over a quarter this year, from 800,000bpd in 2012 to as low as 580,000bpd in 2013, according to Rolake Akinkugbe, head of energy research at Ecobank.

 

Having accounted for 12 percent of US crude imports in 2011, Nigeria’s share fell to 6 percent in 2012.

 

The shale revolution comes at a time when OPEC nations may struggle to increase production because of maturing fields and security issues, the IEA said.

 

“Escalating security risks, political instability and unattractive fiscal regimes in a number of OPEC member countries are expected to take a toll on OPEC production capacity growth,” the IEA said.

 

Nigeria will ship no cargoes of Bonny Light crude in June, leaving a gap in its loading plans that will reduce the country’s exports to the lowest in three years, Bloomberg reported last week.

 

Nigeria will export 61 cargoes in June totaling 54.7 million barrels, or 1.82 million a day, according to loading plans obtained by Bloomberg News.

 

That compares with 76 shipments, or 2.1 million barrels a day, scheduled to be exported next month and is the lowest since March 2010, when daily exports were 1.81 million barrels, data compiled by Bloomberg show.

 

The uncertainty caused by the Petroleum Industry Bill (PIB), currently before the nations parliament has been blamed for the fall off in investment needed to boost production in Nigeria.

 

Analysts estimate investment of at least $28 billion has been lost or deferred since 2010 as a result, with the beneficiaries being other producers in the sub-region such as Angola and Ghana.

 

The 200-plus page PIB plans to partly privatise and list the state oil firm, Nigerian National Petroleum Corporation (NNPC), tax oil company profits at up to 50 percent for deep offshore, and give the oil minister supervisory powers over all institutions in the industry.

 

The bill, however, fails to address most of the necessary reforms needed in the sector and may already be outdated as it fails to come to terms with the current happenings in the industry such as the US shale gas revolutions, an industry stakeholder tells BusinessDay.

 

“Mozambique has discovered more gas reserves in the past 4 years than we have in Nigeria for the past 50 years. The US is poised to export crude oil and gas, meanwhile the real reforms in the PIB in terms of the fiscal regime, governance and gas issues have either been killed or excised from the bill in its current form,” the stakeholder said.

 

Adding to the problems of the oil sector in the country is theft and pipeline vandalism which cost the Nigerian oil industry $7 billion in 2012, according to the IEA.

 

PATRICK ATUANYA

Never forget! Never forget! Never forget! God Bless America!

https://www.youtube.com/watch?v=wNNTcHq5Tzk

Reports warn of trouble signs in Ghana's new oil sector.

 

http://www.foxnews.com/world/2013/08/20/reports-warn-trouble-signs-in-ghana-new-oil-sector/

 

ACCRA (AFP) –  Ghana looked to defy the trends which have plagued other west African oil producers, replacing graft and waste with prudent spending, but two years after production began there is reason to worry, new reports said.

 

The country's nascent energy sector may yet transform its economy and has thus far been unmarred by the sort of rampant corruption and mismanagement typical of Nigeria, Africa's largest producer, whose vast oil wealth has been squandered for decades.

 

But plans to carefully spend oil revenue on infrastructure, debt payments and agricultural development have not been well executed so far, according to a new study from the Accra-based Africa Centre for Energy Policy.

 

"I think on the quiet we are really moving towards the way Nigeria has really spent its oil revenues. And if it goes unchecked, that is where we are going," said Benjamin Boakye, a co-author of the report.

 

Of the $287 million (214 million euros) in oil revenue Ghana devoted to public spending in 2012, 18 percent went to non-productive administrative departments like the office of the president, the report said.

 

Meanwhile, key infrastructure projects have been short-changed, with upgrades to roads and bridges unfinished because the state failed to fully fund them, according to the think tank.

 

Boakye said by thinly spreading oil revenue over a number of projects which cannot be completed within a reasonable period of time the government is not giving people value for money.

 

Ghanaian officials did not respond to requests for comment.

 

The think tank's criticism comes amid gloomy economic news for the nation of some 25 million people, also a major producer of cocoa and gold.

 

Its currency, the cedi, has plummeted against the dollar, and while the economy grew by 7.9 percent last year, spending has been tightened after costly presidential polls last year and worse-than-anticipated oil production.

 

When production began at the offshore Jubilee field in December 2010, it was expected to generate up to $1.0 billion in government revenue per year, but yielded just $444 million in 2011 and $541 million in 2012.

 

Technical problems were said to have caused the shortfalls.

 

Another report from Ghana's Civil Society Platform on Oil and Gas said the government had not amended its tax code to cover capital asset trades in the energy sector, meaning the country has lost out on $67 million in potential revenue.

 

-- Ghana's problems not endemic mismanagement or corruption --

 

These are small sums, especially compared to the example set by west African giant Nigeria, which loses roughly $6 billion each year to oil theft and pipeline sabotage, nearly 11 times Ghana's total oil income.

 

Ghana has been producing about 110,000 barrels per day in recent months, whereas Nigeria, the world's eighth largest producer, is churning out an estimated 2 million barrels daily.

 

But the losses could pile up if Ghana does not swiftly close loopholes in its tax code and, according to the Civil Society Platform, the lacklustre management displayed so far is cause for concern.

 

"The companies themselves aren't doing anything illegal, they're just exploiting a lacuna in the law," said Steve Manteaw, chairman of the Civil Society Platform.

 

"You can't blame them, they're not philanthropists, they're in business to make money," he added.

 

The deals in question saw Ghana's EO Group sell assets to Anglo-Irish Tullow Oil, which has a majority stake in the Jubilee field. In the other deal, US-based Sabre Oil sold its stake in Tullow to South Africa's PetroSA.

 

Some experts said it was far too soon to sound an alarm or force regional comparisons to Nigeria or even Equatorial Guinea, where the proceeds from large offshore reserves have been concentrated in the hands of the ruling family.

 

And Ghana still stands apart from those two larger producers by having a transparent revenue

 

management law that allows outside groups, including civil society, to closely track all oil spending.

 

Christoph Wille, an analyst at London-based Control Risks, told AFP by email that despite some trouble spots Ghana still deserves praise for its energy sector management, even if some improvements are needed.

 

"In contrast to Nigeria, I do not think that lost revenues from the oil sector highlight an endemic problem of mismanagement or corruption," he said.

 

The problems so far, he said, are in fact "a by-product of an emerging economy trying to swiftly capitalise on the benefits of a nascent, but fast advancing resource sector."

 

With a little more "institutional maturity" Ghana's performance will improve, he added.

Read more: http://www.foxnews.com/world/2013/08/20/reports-warn-trouble-signs-in-ghana-new-oil-sector/#ixzz2eVH6R9Db

Achieving Better Liquid Measurement Accuracy Using a Slightly Different Perspective

 

http://www.petroleumafrica.com/achieving-better-liquid-measurement-accuracy-using-a-slightly-different-perspective/

 

Custody Transfer Measurement in the oil and gas business has been described many ways. It has been called “accuracy in measurement” that both the buyers and sellers can agree upon, or “The best that can be achieved to meet the contract conditions.” But I like to call it “The Search for the Truth.”

 

Ever since petroleum has been bought and sold, people have searched for better ways to measure on the fly with better accuracies. A big advancement was the pipe prover.

 

Continue …

Achieving Better Liquid Measurement Accuracy Using a Slightly Different Perspective

China buys into giant Kazakh oilfield for $5 billion

An aerial view shows artificial islands on Kashagan offshore oil field in the Caspian sea, western Kazakhstan, April 7, 2013. Picture taken April 7, 2013. REUTERS/Anatoly Ustinenko

http://finance.yahoo.com/news/kazakhs-sell-china-8-33-062222904.html

By Mariya Gordeyeva

ASTANA (Reuters) - Chinese President Xi Jinping struck a deal with Kazakhstan on Saturday giving China a stake in its giant Kashagan oil project, a highlight of his tour of Central Asia to secure hydrocarbons for the world's largest energy consumer.

The $5 billion (3 billion pounds) deal further increases China's rising clout in post-Soviet Central Asia, once Russia's imperial backyard, and blocks an attempt by global rival India to get a stake in the oilfield, the world's largest oil discovery in five decades.

"The two countries have agreed on China's shareholding in the development of the Kashagan deposit," Xi told a news briefing after talks with Kazakh President Nursultan Nazarbayev. "The two governments hail and support this agreement."

Oil and gas deals, including on building an oil refinery in Kazakhstan, are among 22 agreements worth some $30 billion reached during Xi's visit, Nazarbayev said.

Under the Kashagan deal, Kazakhstan will sell 8.33 percent of the offshore oilfield in the Caspian Sea to China for about $5 billion.

The sale and purchase agreement was signed by the heads of Kazakh state oil and gas company KazMunaiGas and China National Petroleum Corp (CNPC) in the presence of the two presidents.
"We suppose that the transaction will be closed by late September or late October," a Kazakh official told Reuters.

CNPC will also pay up to $3 billion to cover half of Kazakhstan's financing of the second phase of Kashagan's development, KazMunaiGas head Sauat Mynbayev told reporters. This phase is expected to start after 2020.

Another draft agreement, seen by Reuters, would guarantee loans from The China Development Bank and The Export-Import Bank of China - worth respectively $3 billion and $5 billion - to Kazakhstan's state holding firm Baiterek, which promotes innovation and industrial projects.

China is already involved in a number of oil projects in its vast resource-rich neighbour, which is five times the size of France but has a population of just 17 million.

This week, Xi visited Kazakhstan's neighbour Turkmenistan, which holds the world's fourth-largest natural gas reserves, and oversaw deals aiming to boost gas supplies and build a pipeline to China.
INDIA'S HOPES DASHED

The Kazakh deal comes after Astana decided in July to use its pre-emptive right to buy an 8.4-percent stake in Kashagan that U.S. oil major ConocoPhillips was selling for $5 billion.
Houston-based ConocoPhillips, whittling down its worldwide portfolio of assets, announced last year it had agreed to sell the stake to ONGC, the overseas arm of the Indian state-run company.
The sale to CNPC blocks India's plan to enter Kashagan.

Kazakhstan, home to 3 percent of the world's recoverable oil reserves, has moved in recent years to exert greater management control and secure bigger revenues from foreign-owned oil and gas projects.

KazMunaiGas entered the Kashagan consortium as a shareholder in 2005 and has since then doubled its stake to 16.81 percent.

Kashagan and neighbouring fields in the North Caspian hold estimated reserves of 35 billion barrels of oil, with between 9 billion and 13 billion barrels recoverable.

A multinational consortium developing the field has invested some $50 billion in about 13 years, making it the costliest oil project in the world.

Trial runs at the giant reservoir off western Kazakhstan are set to begin on Monday, and it may take between three weeks and a month before commericial production starts, Mynbayev said.

During Kashagan's development, production will be gradually increased to 370,000 barrels per day in the second stage from 180,000 bpd in the first stage in 2013-14, according to North Caspian Operating Company (NCOC), which is developing the field.

Italy's ENI, U.S. major ExxonMobil, Royal Dutch Shell and France's Total each hold 16.81 percent stakes in Kashagan. Japan's Inpex owns 7.56 percent.

(Additional reporting by Raushan Nurshayeva; Writing by Dmitry Solovyov; Editing by Andrew Roche)

Report: demand for jet kerosene on the rise

 

http://thefuelhandler.com/industry-news?item_id=6715

 

World refinery throughput is set to rise as the global demand for jet kerosene, along with petrol, diesel and gasoil products, ramps up during the third quarter of this year, according to the latest forecast from research and consulting firm GlobalData.

 

The new report states that jet kerosene will enjoy a 150,000 barrel per day quarter-on-quarter rise, while global refinery throughputs are expected to witness growth of 2.2 million barrels a day over Q2 2013 levels. This has been attributed to new atmospheric distillation capacity coming on stream in the Middle East, India and China. This increase will raise total global throughput to 77 million bpd – the highest level in at least five years.

 

Jeffrey Kerr, GlobalData's managing analyst for downstream oil and gas, says: 'Despite the positive outlook, these figures will be limited by various underlying economic issues, not least of all the European recession. The slowdown in Chinese demand and the rapid decline in Indian demand are also contributing factors. The US is the only country showing any signs of pushing through its economic woes.

 

Jet kerosene can expect to witness a drop of 55,000 bpd over the course of 2014, says Kerr, thanks to a decrease in air travel caused by the recession and the Chinese economic slowdown.

 

Kerr continues: 'The key for the global economy moving forward is which of these trends are the strongest: the US moving higher or the rest of the world moving lower, and currently it seems that the refined products markets are supporting the US position.'

 

 - See more at:

 

http://thefuelhandler.com/industry-news?item_id=6715#sthash.9ieqJWhH.dpuf