Page 7 - AfrElec Week 01

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GAS-FIRED GENERATION AfrElec
was the world’s fifth largest LNG producer in 2018, down from fourth place in 2017, it explained.
Nigeria hopes to make further gains in the years ahead. Mele Kyari, NNPC’s group manag- ing director, said on December 27 that NLNG was set to expand further. Nigerian President Muhammadu Buhari has instructed the group to build another five production trains, bringing the total number up to 12, he said.
Doing so will create 10,000 new jobs in Nige- ria and generate an additional $20bn in net
budget revenues, Kyari said. Moreover, it will highlight the country’s strong interest in the development of the gas industry, he added.
“It also signifies that there is renewed confi- dence [among] international investors, particu- larly our partners which we have known for a long time, to still agree to put money back into this country,” he was quoted as saying by Reuters.
Equity in NLNG is divided between NNPC (49%), Shell (25.6%), France’s Total (15%) and Eni (10.4%). The consortium has been turning out LNG since 1999.™
POLICY
South Africa unveils draft version of petroleum law
SOUTH AFRICA
SOUTH Africa’s Department of Mineral Resources and Energy recently unveiled a proposed oil and gas law that would reserve a minority stake in exploration and development projects for the government.
In late December, the ministry said it had secured approval from the cabinet for the pub- lication of the Upstream Petroleum Resources Development Bill in the Government Gazette. The draft version of the law stipulates that the South African government will be entitled to a 20% carried stake in new hydrocarbon deals. It also provides for at least 10% of equity in each project to be reserved for black-owned companies.
The state’s carried interest “shall not be recov- erableatexplorationandappraisalstage,”thebill says. It also states: “The holder of a production right shall recover development and production costs from the proceeds generated from produc- tion operations as prescribed.”
The draft law also calls for the government to establish a special body known as the Petroleum Agency to oversee the oil and gas industry. Addi- tionally, it establishes a demarcation between legislation that governs the mining industry and legislation that governs the hydrocarbon sector.
The Ministry of Mineral Resources and Energy did not say how long it might take to secure Parliament’s approval for the oil and gas law. It did note, though, that interested parties would be able to submit comments on the draft until February 21.
“The publishing of the bill is a critical step in the regulatory process and provides an oppor- tunity for the investment community, as well as
all interested and affected parties, to share their inputs on the proposals by government,” the ministry said in a statement dated December 24.
It also expressed optimism about the poten- tial of the oil and gas industry to benefit the country, saying: “The proposed bill aims to strike a balance between the need to attract investment into this key sector of the economy, and ensuring the potential of the upstream petroleum indus- trybenefitsallSouthAfricans.”
In past years, South Africa has had some difficulty attracting partners for hydrocarbon projects, with some potential investors identify- ing legislative uncertainty as the reason for their reluctance to proceed. Since Total’s discovery of crude oil and gas condensate at the offshore Brulpadda field in February 2019, though, the government has been trying to speed up the process of setting up a legal framework for the i n d u s t r y. ™
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