Page 7 - AfrOil Week 37 2019
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AfrOil POLICY AfrOil
African operators should seek to drum up local and regional demand for fuel, she explained.
“Assuming the end goal is to achieve a bal- anced energy mix, a sustainable energy future for Africa has to involve the creation of local and regional markets in order for the conti- nent to weather global oil market changes,” she wrote.
Akinkugbe-Filani urged African producers to take advantage of rising natural gas produc- tion as they sought to open up new markets. “Natural gas production is likely to equal oil’s share of total energy produced in Africa by 2040 ... and its uptake will become necessary as the
global economy diversifies,” she said.
“It may be necessary to go as far as importing gas initially in the form of liquefied natural gas (LNG)tohelpcreatedemandonthecontinent,”
she added.
She acknowledged, though, that building up
demand for gas would not be an easy feat, espe- cially since it would require the establishment of new infrastructure networks.
Building a gas pipeline grid capable of serv- ing the entire continent might cost as much as $100bn, she stated. Nevertheless, she asserted, the investment will eventually pay for itself, as it will encourage economic development and industrialisation.
POLICY
Draft law says South Africa’s government can take a 10% stake in all new projects
SOUTH AFRICA
South Africa’s Department of Mineral Resources and Energy hopes to revive a pro- posal to award an equity stake in every new oil and gas project to the government at no cost.
Representatives of the department told leg- islators last week that they were drawing up a new law that would set a 10% stake aside for the state.
The draft legislation provides for the govern- ment to acquire this equity and retain the right to 10% of future production at no charge, said Ntokozo Ngcwabe, the department’s deputy director-general.
Ngcwabe stressed that the department had not yet finalised the proposed law. He stated, though, that the government intended to sub- mit the draft to Parliament in the fourth quarter of 2019.
The Department of Mineral Resources and Energy drew up a similar proposal several years ago, saying it hoped to ensure the South African government’s right to take a 20% stake in each project at no charge. But it suspended efforts to
secure approval for the initiative, which would also have given the state the right to acquire additional equity, in 2015. This development discouraged some investors – including Royal Dutch Shell (UK-Netherlands), which surren- dered its exploration licence for an offshore block in the Orange Basin in 2017.
Even so, other investors have persisted. For example, Total (France) revealed in February 2019 that it had discovered sizeable reserves of natural gas at Brulpadda, a field within the offshore Block 11B/12B. According to Patrick Pouyanne, the company’s CEO, the field could contain as much as 1bn barrels of oil equivalent (boe) in gas and condensate.
Total’s discovery inspired the Department of Mineral Resources and Energy to revisit its pre- vious efforts to reserve a stake in new projects for the government. This move seems timely, given that the French company’s success has spurred Shell to join Anadarko Petroleum (US) in the exploration of several licence areas near Block 11B/12B.
Impact Oil & Gas
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