Page 11 - AfrOil Week 18 2020

AfrOil POLICY AfrOil
 Abuja sees the $30 gure as “realistic because there are predictions that oil price would rebound,” one source remarked. “ ere is no need to start tinkering with the budget bench- mark price of $30 because it’s a sustainable parameter,” he added.
The Nigerian government had originally set a benchmark of $57 per barrel for the 2020 budget, and this appeared to be a reasonable g- ure in late 2019, when Brent prices topped $60. But it brought the target down to $30 per barrel in late March, as the spread of the coronavirus (COVID-19) pandemic pulled oil prices down into the $25-30 range.
Crude markets have fallen even further since then, owing to a combination of falling energy demand and rising oil supplies. The Punch’s source said, though, that Abuja had already
Ethiopia commissions gas-processing study
taken the appropriate course. e government has conducted a careful review of the budget and is con dent that it is not making a mistake, he declared.
He continued: “ e proposed 2020 budget will clearly be a ected by the oil price decline in the form of lower oil revenue. But the exec- utive has made [the] necessary adjustments, including the reduction in [the] oil price budget benchmark from $57 per barrel to $30 per bar- rel.” Nigeria’s federal government now expects to collect NGN2.38tn ($6.1bn) worth of oil rev- enue in 2020, down from the original forecast amount of up to NGN2.63tn ($6.7bn), he added.
Abuja had originally anticipated budget rev- enues to reach NGN8.41tn ($21.5bn) this year. In late March, though, it brought the target g- ure down to NGN5.08tn ($13bn). ™
ETHIOPIA
THE Ethiopian Petroleum Ministry has com- missioned a study from US-based rm Green- Comm Technologies into how Ethiopia’s gas resources can be used to produce various fuels.
An agreement was signed by the ministry and GreenComm covering a year-long study. Speci cally, the study will evaluate the devel- opment of a gas processing plant. South Korea’s Hyundai Engineering and Construction is collaborating in the project, according to the ministry.
e cost of the plant is initially assessed at $3.6bn. e study will weigh up the feasibility of using gas resources at six sites. ese include the Calub and Hilala elds in the Ogaden Basin in Ethiopia’s Somali region, which Chinese rm POLY-GCL Petroleum is currently developing.
Gas could be supplied to the plant and then processed to produce lique ed petroleum gas (LPG), jet fuel and petrochemicals, the minis- try said.
Ethiopia is estimated to have roughly 25bn cubic metres in proven gas reserves. e coun- try found extensive gas deposits in its eastern Ogaden Basin in the 1970s, but has been unable to monetise them owing to decades of war and political upheaval. Finding a route to market for the resources was also an issue.
POLY-GCL signed production-sharing deals to exploit the Calub and Hilala elds in 2013. e Chinese rm nished appraisal wells at the sites in 2016, and the following year signed a memorandum with neighbouring Djibouti on building a pipeline to pump Ethiopia’s gas to the small Horn of Africa nation. It also planned to build a liquefaction terminal at Damerjog, near
Djibouti’s border with Somalia. e project was valued at $4bn.
Djibouti and Ethiopia then signed an inter- governmental agreement on the pipeline in February last year. At the time, POLY-GCL was expected to launch production at Calub and Hilali in 2020, several years behind schedule.
POLY-GCL is a joint venture between state- owned China POLY Group and privately owned Hong Kong-based Golden Concord Group. ™
POLY-GCL is developing the Calub and Hilala gas elds (Image: POLY-GCL)
Week 18 06•May•2020 w w w . N E W S B A S E . c o m P11