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Promoting sustainable investment in oil & gas

Africa's oil & gas industry needs policies that effectively attract sustainable investment. (Image source: Adobe Stock)

Interest in Africa’s upstream oil and gas sector continues to grow, with the proviso that effective governance, transparent policies and favourable fiscal terms are developed in-country

To foster a sustainable investment environment, African governments must strike a delicate balance between attracting foreign capital and ensuring that investments serve the broader interests of their populations.

For Africa to realise its vast potential in the oil and gas sector, good governance is essential. Governments must establish transparent policies that instill confidence in investors. A commitment to political stability and robust regulatory frameworks not only attracts foreign direct investment (FDI) but also fosters an environment where businesses can thrive.

Key to this approach is the development of favourable fiscal terms that align with the interests of both the state and investors. By offering competitive tax regimes and incentives, governments can entice investors while ensuring that local communities benefit from the wealth generated by natural resources. This alignment is crucial in the context of the United Nations Sustainable Development Goals (SDGs), particularly SDG 7, which emphasises the need for access to affordable and sustainable energy for all.

A panel discussion I hosted during Africa Energy Week underscored the need for policies that effectively attract sustainable investment. African nations, rich in oil and gas reserves, face the challenge of translating these resources into tangible benefits for their populations. Investments should not only generate financial returns but also contribute to socio-economic development.

To achieve this, countries must develop comprehensive strategies that encourage local refining and the establishment of a robust petrochemicals industry. This minimises the export of crude oil and maximises the value retained within the continent, creating jobs and stimulating economic growth. Such a multifaceted approach not only enhances the value extracted from the continent's natural resources but also has far-reaching socio-economic benefits.

For instance, exporting crude oil in its raw form means losing a significant portion of its potential economic value. By investing in local refining capabilities, countries can process crude oil into finished products – such as gasoline, diesel, and various petrochemicals – before they are exported. This transformation allows nations to capture more value from their natural resources and reduce dependency on foreign refined products.

This is the first of a two-part article written by Taona Kokera, director - head of infrastructure finance advisory at Forvis Mazars in South Africa

Namibia's Upstream Petroleum Unit gets new adviser

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McLeod will also be the deputy director of the unit. (Image source: Adobe Stock)

Chevron Namibia's former subsidiary staffer, Carlo McLeod, has been appointed the special adviser to the Upstream Petroleum Unit, a new initiative by the Government to advance the country's globally attractive oil and gas sector

He will also be the deputy director of the unit, which is being supervised by Kornelia Shilunga, former Member of Parliament and ex-Deputy Minister of Mines and Energy.

The Namibian President Netumbo Nandi-Ndaitwah has been implementing administrative upgrades for better regulation and hold over international-scale hydrocarbon projects that have seen a marked rise in the country.

McLeod's administrative as well as industrial expertise gives him an edge in streamlining public and private coordination in Namibia's oil and gas sector, a significant requirement given the growing interests from oil majors. Previously, he has been a practitioner in petroleum law, serving eight years as Deputy Director of petroleum affairs at the Ministry of Mines and Energy. This was followed by his brief stint in Chevron Namibia as deputy general manager. He has also actively addressed the issues of fuel smuggling in the country.

The newly formed Upstream Petroleum Unit has been set in line with the Government's plans to effectively commercialise Namibia's oil and gas resources, and leverage them for local upliftment.

Wartsila to deploy power generation equipment for Nigerian plant

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The equipment will enhance the availability and reliability of power supply. (Image source: Wartsila)

Technology group Wartsila has concluded an engineering, procurement, and construction (EPC), along with a five-year-long operation and maintenance (O&M) agreement with Elektron Energy-affiliate Victoria Island Power Ltd for the installation of a power generation equipment for a new 30 MW power plant being set up on Victoria Island in Lagos

The equipment will enhance the availability and reliability of power supply from the natural gas-run power plant.

“Elektron has conceptualised, developed, and funded the IPP and has secured the implementation by engaging Wartsila to assume single point responsibility for the major construction and operational aspects related to the eventual power generation facility. This pioneering project relies on reciprocating internal combustion engine (RICE) technology that has the efficiency and flexibility to deliver clean and reliable electricity to our customers,” said Deen Solebo, co-CEO and CFO at Elektron Energy.

“ Wartsila’s core competence in the engine power plant and services aspects represents a unique combination of a global company with a local presence that provides developers and financiers the comfort to invest and gives end-customers the confidence to sign up for PPA’s with medium to long-term tenures. The Wartsila solution is extensively adopted by industrial, utility and IPP customers worldwide and the excellent credentials and track record have been recognised as a great value proposition by lenders, insurance companies, and multi-lateral funding institutions,” said Marc Thiriet, energy business director, Africa at Wartsila Energy.

“Elektron is especially grateful to the invaluable contributions of its institutional investors and funding partners who have made this project possible including ARM Harith Infrastructure Fund LP, Nigerian Sovereign Investment Authority, InfraCredit, Bank of Industry, FBN Quest, and Stanbic Infrastructure Partners,” Deen added.

The facility will comprise three Wartsila 34SG gas engine-generator sets with related auxiliaries and is configured to accommodate an extension with one additional engine-generator set at a later stage. The Wärtsilä modular power plant design concept enables this in a cost-effective manner with minimal disruption to ongoing operations.

BW Energy Gabon to maintain FPSO Adolo

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The handover will enable BW Energy Gabon to optimise field performance. (Image source: Adobe Stock)

BW Energy Gabon SA has taken over the operation and maintenance work of the FPSO BW Adolo from the principal companies, BW Offshore and BW Energy

An amended charter now includes a mutual put-and-call option on the FPSO for US$100mn, exercisable in 2028.

“Transferring daily operational control of BW Adolo to BW Energy Gabon is a natural step given their growing presence in Gabon and potential to capture efficiencies across the local organisation,” said Marco Beenen, the CEO of BW Offshore. “The seamless execution reflects the commitment of both teams to safeguard personnel, the environment, and asset integrity.”

“Assuming full O&M responsibility will allow BW Energy Gabon to optimise field performance and capture additional synergies across the Dussafu hub. We thank BW Offshore for its exemplary stewardship of the vessel and its continued support during the transition phase,” said Carl K Arnet, the CEO of BW Energy.

The FPSO unit is currently deployed on the Dussafu Marin licence offshore Gabon, where it has produced since first oil in 2018.

SNPC solidifies hold on Congo permits

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Congo Council of Ministers approve hydrocarbons laws. (Image source: Adobe Stock)

Congo's national oil company, Societe Nationale des Petroles du Congo (SNPC), gains a solid ground as two significant laws supporting the country's hydrocarbons industry receive approval of the Council of Ministers

The first law now recognises SNPC as the owner of the new Likouala II exploration permit, following Perenco and Congorep's (a joint venture between Perenco and SNPC) handover of shares. With the new structure, Perenco's shares stand at 64.5%, Congorep at 20.5%, and SNPC at 15%.

The second law allows the Ikalou II permit that comes from the Ikalou Sud concession. With this permit that is valid for 20 years, SNPC retains a 15% stake following Perenco's 85%.