Mohammed Shosanya

Savannah Energy Plc, the British independent energy company focused,said it will pursue all of its legal rights against the decree issued by the President of the Republic of Chad dated 23 March 2023, nationalising Savannah Chad Inc’s,formerly Esso Exploration and Production Chad Inc upstream production assets in Chad.

Savannah Energy Chad Limited completed the acquisition of EEPCI on December 9,last year.

The company said in a statement that the actions of the Republic of Chad are in direct breach of the Conventions to which SCI and the Republic of Chad are, amongst others, party.

It added:”This Presidential Decree has been issued by the Republic of Chad, notwithstanding the fact that under SCI’s operatorship the historic production decline was immediately reversed, with daily production averaging 29,349 barrels per day since 9 December 2022, an increase of c.9% as against the equivalent period prior to Savannah taking control of SCI. Savannah had also initiated plans to significantly increase production further through an active investment programme”

According to Savannah Energy,the conventions are subject to the jurisdiction of an ICC tribunal, seated in Paris and the company intends to pursue all of its legal rights.

It reiterated its commitment to delivering projects that matter in Africa .

Musbau Babatunde

Stakeholders in the nation’s oil and gas sector have implored the Federal Government to address key challenges and outline strategies for a sustainable future in the petroleum downstream sector.

They spoke during a virtual online workshop with the theme “Deregulation of the Nigerian downstream sector: The day after,” organized by the Nigerian Petroleum Downstream Industry in collaboration with the African Refiners and Distributors Association (ARDA) held in Lagos.

The Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA), Farouk Ahmed,in his goodwill message,stated that the Authority shall allow free market pricing once the sector was fully deregulated.

The Executive Director, DSSRI NMDPRA, Ogbugo Ukoha and the Director, Policy Coordination, NPA Ghana were on hand to give insights on the role of the regulator in pricing, safe operation and enforcement in their presentations at the workshop whilst the Managing Director, CITAC Africa, Mr Gary Still touched on market liberalization or elimination of subsidies.

The Executive Secretary,ARDA, Anibor Kragha shed light on products specifications – ARDA roadmap, regional initiatives (AU / ECOWAS).
DAPPMAN, IPMAN, PETROAN, NARTO and MOMAN shared their perspectives on risk management, best practices, and market expectations.

Alhaji Lawal Yusuf Othman, National President of the Nigerian Association of Road Transport Owners (NARTO), in his presentation, warned that the full deregulation of the downstream sector and complete removal of petrol subsidy will introduce a mix of opportunities and challenges into the operating environment.

The Executive Secretary of DAPPMAN harped on sharing best practices. Mr. Gary Still, MD CITAC Africa, in his presentation explained that market liberalization means the removal of government subsidies and price controls on petroleum products, and allowing market forces to determine the price and supply of petroleum products.

National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, who was represented by Mr. Mike Osatuyi, IPMAN’s National Operations Controller, revealed that the marketers are in full support of the government’s plan to embark on full deregulation of the downstream sector.

He warned Nigerians to prepare to pay up to N750 for every litre of petrol after the full implementation of the subsidy removal, adding that the pump price is likely to drop to around N500 if the Government encourages the Central Bank of Nigeria (CBN) to provide forex to marketers at the official rate.

He also urged the government to channel savings from subsidy provisions to provide palliatives to the masses. He charged the government to be alert and sensitive to resentment from Nigerians.

Besides,industry stakeholders at the workshop advised the government to implement appropriate palliatives in the form of public transportation, freight of agricultural produce, ensure transparent and effective communication, improve access to foreign exchange, trade finance, guarantee strategic stock, and provide access to crude oil for refineries ahead of the plan to embark on the total removal of petrol subsidy.

The workshop offered the industry regulator and all players across the midstream and downstream value chain the opportunity to deliberate on measures that needed to be put in place ahead of the full implementation of the Petroleum Industry Act (PIA) in Nigeria.

Participants at the online session also focused on the need for operators in the industry to institutionalize the professionalization of the midstream and downstream petroleum sectors ahead of the take-off of full deregulation.

In the 3rd and final session Huub Stokman, MD NRL highlighted what needed to be in place for a successful transition while Olufisayo Duduyemi, 2nd Vice President-Elect, Nigerian Gas Association, spoke on the role of gas as a transition fuel.

Mr. Taiwo Oyedele, the Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC), in his presentation, charged the government and the regulator to identify potential pitfalls that could trigger resentment from citizens before, during, and after the removal of the petrol subsidy.

According to him, deliberate public sensitization, industry engagement, and collaboration with civil society organizations are needed to aid public buy-in during the implementation of full deregulation by the government.

He said that in the course of implementing the policies, the government’s interpretation of its strategy must be issues-based and not confrontational.

Mrs. Morayo Adisa, Technical Consultant to the Executive Vice Chairman/CEO of the Federal Competition and Consumer Protection Commission (FCCPC), who represented Mr. Babatunde Irukera, EVC of FCCPC, in her presentation, emphasized the need for the industry regulator to establish quality and safety standards for petroleum products, including fuel quality standards, safety regulations for storage and transportation, and environmental regulations.

Francis Ogaree, ED, Hydrocarbon Processing Plants, Installations and Transportation Infrastructure, NMDPRA touched on the impact of local refineries post deregulation.

The Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Olumide Adeosun, who doubles as the facilitator, stated that the virtual workshop aimed at addressing key challenges and outlining strategies to ensure a sustainable future for the petroleum downstream sector.

He said that safeguarding consumer interest in a deregulated environment was also underscored.

The workshop provided data-driven insights into the sector’s growth potential.

Stakeholders emphasized the need for continuous industry engagement, collaboration, and public sensitization to aid public buy-in on new policies by the government.

Mohammed Shosanya

Africa could be a key supplier of green hydrogen to Europe, which is currently looking to diversify its energy mix following the reduction of Russian natural gas supplies, Rystad Energy,has said.

Over 52 green hydrogen projects have been announced in Africa, with production set to reach 7.2 million tonnes by the end of 2035, the Norway-based consultancy said in a report,adding that most of the planned projects will be producing ammonia as an end-product for export to Europe.

“The global green hydrogen economy is beginning to take shape, with Africa and Europe becoming a dynamo of production and use,” said Rajeev Pandey, clean tech analyst at Rystad Energy.

“Africa’s unparalleled mineral reserves are critical for electrolyser production and the region’s fantastic renewable potential combined with Europe’s prodigious production and import targets will not just alter energy flows, they will create them anew.”

Hydrogen is set to play a key role in the transition to a net-zero energy system and help to decarbonise sectors that are difficult to electrify such as heavy industry and long-haul transport.

Blue and grey hydrogen are produced from natural gas, while green hydrogen is produced using renewable energy.

Globally, the size of the hydrogen industry is expected to hit $183 billion this year, up from $129 billion in 2017, according to Fitch Solutions.

Africa’s overall electrolyser pipeline currently stands at 114 gigawatts, out of which more than half is linked to countries located in Sub-Saharan Africa, according to Rystad.

Sub-Saharan Africa holds a “highly strategic” position as South Africa sits on about 90 per cent of the world’s global platinum group metals reserves, which are critical for the production of electrolysers used to extract green hydrogen, Rystad said.

Investment will be the main obstacle in building these large-scale projects and related infrastructure, the consultancy said.

It said,only 13 megawatts out of the planned 114 gigawatts has reached a final investment decision to date.

But,European countries have been looking for partnerships in the continent, thanks to its abundant supply of land, low-cost workforce and renewable energy sources.

In December, RWE and Namibia’s Hyphen Hydrogen Energy signed an initial agreement that could help the German utility source up to 300,000 tonnes of green ammonia per year from the African country.

Germany, Europe’s largest economy, aims to import up to 70 per cent of its hydrogen to feed its domestic demand by 2030, with much being sourced from Africa.

Last year, Norad, the Norwegian Agency for Development Co-operation, said it would provide about $9 million in funding to Scatec, an Oslo-based renewable energy company, to develop green hydrogen projects in Africa.

“These initial moves are set to accelerate as Europe struggles with an ongoing energy crisis and seeks new partners,” said Rystad.

Last month, the EU launched the Green Deal Industrial Plan to boost the “competitiveness” of Europe’s net-zero industry and support the fast transition to climate neutrality.

The programme, which followed America’s Inflation Reduction Act, seeks to promote renewable energy and green hydrogen projects across Africa, with an eye on signing agreements to expand global and regional investments, Rystad said.