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UK-based developer Globeleq announced this month that it has acquired a 74% stake in Nigerian commercial and industrial (C&I) power company CPGNL. CGPNL was owned by Clean Energy Group, which will retain 26% of the company, and used equipment supplied by Cummins. The company will be rebranded as Globeleq Power Solutions Nigeria Ltd (GPSN). GPSN has a portfolio of 12 operating gas power plants with combined capacity of 58MW in the south of the country.

Nigeria
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The government’s latest Integrated Resource Plan, issued in early January, provided further details of South Africa’s plans for 7.2GW of new gas-to-power capacity to replace ageing coal-fired units. LNG is central to making that happen and a contract to develop an import terminal in Richards Bay has been awarded to the Netherlands’ Vopak.

South Africa
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Prospects are improving for the introduction of carbon capture and storage into gas production projects as the Egyptian authorities have shifted to a more positive stance on CCS technology, encouraged by their financial backers in the Gulf.

Egypt
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SDX Energy has spudded the Beni Malek-2 (BMK-2) well in the Rharb Basin. The London AIM-listed company has reported an ‘immediate and increasing’ local demand for its gas in Morocco.

Morocco
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The Western Sahara government in exile achieved a diplomatic success in early May when a cargo of phosphate rock destined for New Zealand was intercepted and detained in South Africa. Polisario claimed Moroccan parastatal Office Cherifien des Phosphates (OCP) had produced the phosphate from its mines in the disputed territory. OCP at first tried to suppress the news in Morocco, where the territory is viewed as part of the kingdom.

Morocco
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South Africa’s latest debt downgrades add to the challenges facing the LNG-to-power procurement programme. The programme is technically difficult, with major questions about how to structure it, particularly given the government’s reluctance to accept a dollar element within the power tariff. The reduced capacity of gas set out in the 2019 Integrated Resource Plan had already made securing an affordable tariff difficult and increased cost of debt will exacerbate the issue. Meanwhile, Eskom’s weakness as an offtaker and the challenge of securing credit enhancement or guarantees for large projects make reform of the utility still more urgent.

South Africa
Issue 391 - 03 May 2019

Oxy counterbid for Anadarko

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US independent Occidental Petroleum has tabled a rival bid for Anadarko Petroleum, valuing the company at $57bn. While the focus of attention is still Anadarko’s US Permian shale assets, Oxy’s $76/share cash and shares bid is significantly higher than Chevron’s $65/share offer. Anadarko rejected an earlier approach from Occidental in early April, opting to accept Chevron’s lower bid. In its Q1 results, Anadarko said it was still on track for a final investment decision on the Mozambique liquefied natural gas project in H1 this year.

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The faster-than-expected decline of gas output in 2015, highlighted by petroleum minister Tarek El-Molla in a recent speech, may be a misleading indicator of where Egypt’s energy sector is heading. The low level of production today and the minister’s muted expectations for production in 2019 have provoked widely varying assessments of whether the country can ever attain self-sufficiency, let alone start exporting again. In the long term, there is a chance that fresh reserves may be found in the prospective but unexplored parts of the deep-water Nile Delta – a western segment of which may be offered in a licensing round by Egyptian Natural Gas Holding Company (Egas) this year.

Egypt
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In a move hailed by one oil industry executive as a “major milestone”, Petroleum Agency South Africa (Pasa) has begun processing shale gas applications received before the government imposed a licensing moratorium in February 2011. The applications relate to Chevron and Falcon Oil and Gas’ joint venture, Shell South Africa Upstream, and Challenger Energy’s Bundu Oil and Gas Exploration. A moratorium on hydraulic fracturing (fracking) remains in place, however, and processing the applications could take up to eight months. The regulations governing the shale industry have still to be published, despite the gazetting of technical regulations in October 2013.

South Africa
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As hydrocarbons prices have pushed upwards after their slump, a degree of future planning has returned to the global gas market. New liquefied natural gas (LNG) export projects are in prospect, led by Australia and the United States, but with a few schemes in Africa. In Mozambique’s Rovuma Basin, a final investment decision (FID) on Coral LNG, led by Eni and ExxonMobil, is expected by end-2017, for exports to Asia from the early/mid-2020s. As the industry builds up, Mozambique expects a big domestic dividend, with the Rovuma Basin also supplying domestic gas-to-power (GTP) projects.

Mozambique
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As Tunisia’s new administration beds in, Entreprise Tunisienne d’Activités Pétrolières (Etap) is looking beyond its traditional status as an under-resourced department of government to take a more hands-on role in oil and gas development, underpinned by revisions to the hydrocarbons code that are calculated to stimulate an upsurge in foreign investment. The revised law is scheduled for National Assembly approval later this year, and officials are confident the amendments will pass following two years of work to overcome resistance from parliament and civil society activists.

Tunisia
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Zarara Oil & Gas has invited proposals by 23 December from US consultants to develop a feasibility study to evaluate the technical, financial and environmental aspects of the Lamu gas-to-power project. The wholly owned subsidiary of Midway Resources International holds a 75% working interest in onshore natural gas blocks L4 and L13 in Lamu County and plans to develop gas production and treatment facilities to generate electricity.

Kenya
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Oil minister Irene Muloni has said she expects the government to intervene to resolve a tax dispute that has prevented Tullow Oil selling part of its stakes in three Lake Albert licences. Speaking at a thinly attended London roadshow to promote Uganda’s second licensing round, she said it had not been possible to resolve the issue before the sale and purchase agreement (SPA) expired in late August. Total announced the expiry of the SPA on 29 August, saying the parties had been unable to reach agreement on the tax terms.

Uganda
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Kosmos Energy has taken three blocks offshore Equatorial Guinea and a stake in the Ceiba and Okume fields, marking a return for the team that discovered the fields nearly 20 years ago. Kosmos is acquiring Block EG-21, Block S and Block W and the production assets as part of a 50-50 joint venture company with Trident Energy, a new exploration and production company founded by former members of Perenco senior management and backed by Warburg Pincus.

Equatorial Guinea
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Emerging Capital Partners-backed Eranove and the Ministry of Mines and Energy on 23 October signed a concession agreement for the 65MW Kékéli combined-cycle gas turbine plant, to be located in Lomé port. The concession agreement is for the design, financing, construction, commissioning, operation and maintenance of the plant.The government launched a request for proposals in January, with Eranove, Turkey’s Aksa Enerji Uretim and Italian company Ascot all involved.

Togo