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10 developments that will shape Africa’s energy sector in 2019
After a year of rebound and recovery, Africa’s old and new hydrocarbons markets have an opportunity to further entrench the continent’s position as the world’s hottest oil and gas frontier in 2019. However, the new year also brings a new set of dynamics and challenges set to influence the future of the industry, from presidential elections to megaprojects developments, amidst intensifying international competition.
New African frontiers opening up
Independents are leading the way in exploring and opening up new frontiers across Africa. This year will be key for the advancement of new exploration and production development projects from West to East Africa. Developments to watch notably include Senegal’s SNE field development, where FEED works are ongoing and a final investment decision (FID) is expected by Woodside Energy and Cairn Energy this year; Niger’s Amdigh oilfield development, where Savannah Petroleum’s $5m early production scheme is set to start anytime soon; and the opening up of Kenya’s South Lokichar Basin by Tullow Oil, where FID is also expected before year end amidst rising tensions with the Turkana local community.
A year to confirm Africa as a global exploration hotspot
Ongoing bidding rounds in key existing and new African hydrocarbons markets will tell if Africa further confirms its position as the world’s new exploration hotspot and manages to attract necessary investment in its oil and gas acreages.
Amongst well-established African producers, OPEC members Gabon and Congo-Brazzaville each have ongoing bidding rounds. Gabon’s 12thshallow and deep-water licensing round is set to close in April 2019 and Congo-Brazzaville’s License round phase II in June 2019. With both countries struggling to implement their new Hydrocarbons Codes, the success of these rounds will tell if investors have been convinced by policy reforms developed over the past two years.
Two bigger African producers and also OPEC members, Nigeria and Angola, are set to launch landmark and out-of-the-ordinary bidding rounds this year. Nigeria will auction its gas flare sites under the Nigerian Gas Flare Commercialisation Programme, likely to happen after the February general election, and Angola will hold its Marginal Fields Bidding Round, result of a new May 2018 policy enacted by President Lourenço, and to be launched at the Africa Oil & Power conference in Luanda in June 2019. With the Nigerian Petroleum Industry Bill yet to be signed and the ink still fresh on Angola’s new policy regime, both rounds will also be key in assessing investors’ interest for both countries’ business environments.
Also attracting interest is the newest and arguably one of the upcoming entrants – Ghana – holding its 1st formal licensing round set to close in May 2019 which has reportedly got the attention of 16 oil companies, including majors ExxonMobil, BP, Total and ENI. As a hopeful new East African offshore frontier, Madagascar is also putting 44 concessions on offer until May 2019, none of which has ever been tendered or explored before. For a country without any major oil discovery to date, the ongoing license round is a wager test.
Africa’s struggling FLNG industry
After the start of commercial operations at Golar LNG’s Hilli Episeyo FLNG vessel in Cameroon in June 2018, hopes were high that Equatorial Guinea would soon move forward with its own Fortuna FLNG project, set to be Africa’s first deep-water FLNG development. While Fortuna was to be game changing for the gas industry of Equatorial Guinea and the rest of the continent, the development of the $2bn project has stalled due to a lack of financing. And the clock has been ticking since. The lack of progress on this plan has been so slow that operator Ophir Energy has been denied the extension of its license to operate block R (as of January this year), which contains the giant Fortuna gas discovery. While Equatorial Guinea’s FLNG aspirations look more uncertain than ever, 2019 will tell if the country can find the right partners to put the project back on Africa’s FLNG map.
Meanwhile, new entrants in Africa’s hydrocarbons stage are making remarkable advances towards the development of their own FLNG industry. On December 21st last year, BP finally announced its FID for phase 1 of the cross-border Greater Tortue Ahmeyim development between Senegal and Mauritania, which involves the installation of a 2.5MTPA FLNG facility. It became the third African FLNG project to reach FID after Cameroon’s 2.4MTPA Hilli Episeyo and Mozambique’s 3.4MTPA Coral South FLNG.
Mega projects on the move
Africa’s come back on the global oil and gas map is not only due to the vast natural resources found in its soil and waters, but also to the continent being home to mega energy projects set to transform the future of the industry.
On the upstream side, the recent inter-governmental cooperation agreement between Senegal and Mauritania, and BP’s FID on its cross-border Greater Tortue Ahmeyim development, bodes well for the future of West Africa’s hydrocarbons industry. The project aims at extracting the 15Tcf of gas estimated to be held in the Tortue gas field, located at a depth of 2,850 metres. However, the ability of both Senegal and Mauritania to work out their differences to ensure a more sustainable development of their offshore reserves and facilities around the MSGBC Basin is a factor to watch out for.
African mega gas projects are not the sole property of the continent’s West coast, with Mozambique moving forward with two landmark projects putting the Southern African nation on the global LNG map. Following the launch of the Coral South FLNG project by ENI in June 2017, a FID is now expected in the coming months for the Anardarko-led Mozambique LNG project, an onshore LNG development initially consisting of two LNG trains totaling 12.88MTPA to export the gas extracted from the offshore Area 1, estimated to contain a whooping 75Tcf.
Sub-Saharan Africa’s biggest petroleum producers, Nigeria, is also moving forward with massive oil development projects in 2019. Last year already saw the launch of Total’s $3.3bn Egina FPSO in Nigeria, where production officially started in the first days of 2019 and is set to peak at 200,000 bopd. FID is now expected on Shell’s Bonga Southwest offshore field in Nigeria early this year, a multi billion-dollars development whose production is expected to reach 180,000 bopd.
International contenders and pretenders
As Africa strengthens its position at the centre of global transformations, it is increasingly becoming the playground for international actors willing to benefit from the continent’s vast resources.
While China has asserted its position of a contender in the continent, will new continental dynamics lead the Asian giant to change its investment strategy or portfolio? With Russia’s intentions on the continent becoming clearer and clearer, will the first Russia-Africa Summit this year translate into more concrete Russian deals across the continent? At the same time, will the US’ “Prosper Africa” initiative launched in December 2018 be able to counter both rising international competition and declining US influence on the continent?
A complex energy diplomacy dilemma for OPEC in Africa
With a majority of its members made up of African nations since the joining of the Republic of Congo in June 2018, OPEC’s evolving relationship with the continent as it strives to manage the global supply glut will be requiring skillful diplomatic ingenuity.
On one side, Africa’s biggest producers and OPEC members Algeria, Libya, Nigeria, Angola and Congo-Brazzaville, are striving to boost their domestic output, which makes it harder and harder for the Organisation to negotiate its production cuts.
On the other side, the continent is also home to a flurry of upcoming petroleum producers like Senegal, Kenya or Uganda, or old players making a comeback like South Sudan, some of them part of OPEC’s Declaration of Cooperation, whose upcoming or increasing output adds another layer of complexity to the formulation of OPEC’s global oil prices management strategy.
An increasing African output from OPEC and non-OPEC member countries only complicates OPEC’s maneuver capabilities and increases its dilemma of both providing a stable pricing environment conducive to investments, while avoiding a worsening of the supply glut that would push prices further down.
Africa’s biggest petroleum producers casts their ballots
Amongst the series of elections happening in the continent this year, from Senegal to Mozambique, none will be more important for the African oil sector than that of Nigeria this February. The Nigerian presidential election is set to shape the future of the industry, not only because Nigeria is Africa’s biggest oil & gas producer, but because what happens in Nigeria impacts the rest of the subcontinent one way or the other. While both Muhammadu Buhari, seeking re-election, and his ally turned rival Atiku Abubakar have committed to the signing of the Nigerian Petroleum Industry Bill, the ability of the future President to get his office in order and get the bill passed quickly will heavily influence investments within Nigeria’s hydrocarbons sector for years to come.
North, Algeria and Libya are also entering an election year, with the 2019 Libyan general election set for the first half of the year, and Algeria’s for April. Both countries are on a transformation path. Libyan authorities plan to more than double the country’s output to 2.1 million bopd by 2021, providing politics doesn’t tamper hydrocarbons governance and the work of the National Oil Company. With Muammar Gaddafi’s son Saif al-Islam Gaddafi set to stand for election and the country still divided between West and East, maintaining the stability required by investors will prove challenging.
In Algeria, where a wave of reform is shaking the entire hydrocarbons sector, elections are expected to maintain a relative status-quo, at least politically speaking. The country’s national oil company, Sonatrach, has launched an ambitious transformation strategy that will see it investing $56bn over the next four years and internationalizing its operations across major global energy markets. 2019 could even see the state-owned giant and Africa’s biggest company further expand south of the Sahara.
Angola’s steady road to reforms
Since taking office in the summer of 2017, Angolan President João Lourenço has been implementing a bullish reformist agenda which is drastically transforming the governance of the country’s oil & gas sector. Angola is reforming fast, but will market forces allow changes to happen at that pace and yield the results that the government is looking for?
While international investors seem to think so, with Total and BP signing major agreements to boost their Angolan operations over the past few months, 2019 will tell if the international oil industry is being convinced of Angola’s return as a competitive African frontier or not.
To showcase the work being done by Sonangol and the Angolan government to generate more investment in the country’s oil & gas industry, Angola is backing up an international conference being organized by Africa Oil & Power in Luanda on June 4-6, 2019, where it will be launching the Angolan Marginal Field Bidding Round. This will be the first official investment roadshow organized in Angola under the current administration, and one that is set to unveil a new set of reforms and investment commitments.
South Sudan’s march to peace
The major progression in South Sudan, and one on which the entire economy relies, is that of the peace accords. The Sudanese and South Sudanese authorities have time and again demonstrated their commitment to the peace process, which has remained peaceful for the most part. However, will peace deals translate into investment promises and money being invested into the South Sudanese economy this year? Some signals point to that direction, with South Africa’s Central Energy Fund committing $1bn to South Sudan late last year, but markets are still skeptics and observers will remain pragmatics and wait to see how the peaceful transition is managed and how oil production resumes before making any concrete moves.
A year to improve market access for East African producers
With Uganda set to join the club of African petroleum producers by the early 2020s, efforts are on the way to develop adequate infrastructure for the evacuation of oil that will be produced from the Lake Albert Basin. The project seemed to be positively moving forward when Uganda and Tanzania exchanged the inter-governmental agreement for the 1,443km East African Crude Oil Pipeline in May 2017. However, the partners in the pipeline’s construction, French major Total, China’s CNOOC and Tullow Oil, are yet to make a final investment decision on the project. Meanwhile, the Host Government Agreements are to be signed this January, but delays in concluding the pipeline’s financial deal have already pushed back Uganda’s oil production ambitions from 2020 to 2021. The pipeline is crucial for the further integration of the East African community and to set a positive record of joint planning, financing and implementation of landmark energy projects in the region.
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NAF Pharmacist Shines at 97th PSN Conference, Bags Three Prestigious Awards
Air Commodore David Olumuyiwa Babalola, a consultant clinical pharmacist in the Nigerian Air Force (NAF), has achieved an extraordinary milestone in Nigerian pharmacy practice, earning three prestigious honors at the 97th Annual National Conference of the Pharmaceutical Society of Nigeria (PSN).
Held from November 4 to 9, 2024, the conference celebrated Babalola’s exceptional contributions with the Biogenerics Integrity Award, the Pfizer Excellence Award, and the Fellowship of the Pharmaceutical Society of Nigeria (FPSN).
Babalola was recognized as the best overall public-sector hospital pharmacist in Nigeria, clinching the Biogenerics Integrity Award. This esteemed honor, accompanied by a ₦1,000,000 cash prize, celebrates excellence in patient care, career achievements, innovations, training, research, professional service, philanthropy, and leadership in public hospitals.
Adding to his accolades, he was one of four pharmacists nationwide to receive the Pfizer Excellence Award. This award highlights outstanding contributions to hospital and community pharmacy and includes a ₦250,000 cash prize, a commemorative plaque, and a certificate.
Representatives of Pfizer Nigeria presented the award during the conference’s grand closing banquet at Flairmore Event Centre, Uyo.
This achievement makes history as Babalola becomes the first pharmacist in the Nigerian Armed Forces to win a PSN-sponsored corporate award since its inception nearly two decades ago.
In his acceptance speech, Babalola expressed gratitude to Biogenerics Nigeria Ltd and Pfizer Nigeria for their sponsorship, which he said inspires excellence in hospital pharmacy practice.
He also acknowledged the Chief of the Air Staff, Air Marshal HB Abubakar, for fostering an enabling environment for pharmacists within the NAF and for approving the implementation of the Pharmacists Consultant Cadre in the force.
Babalola’s accolades were further crowned by his conferment with the Fellowship of the Pharmaceutical Society of Nigeria (FPSN), the highest honor awarded to pharmacists in the country. This recognition, reserved for individuals who have rendered exemplary and meritorious service, solidifies Babalola’s status as a trailblazer in the field.
As the first pharmacist in the Nigerian Air Force to attain the rank of air commodore, Babalola’s career is marked by groundbreaking achievements.
His latest recognitions underscore his relentless commitment to advancing pharmacy practice in Nigeria and inspiring a new generation of pharmacists.
The investiture ceremony for his FPSN honor is slated for early 2025, promising yet another celebration of his outstanding contributions to the pharmacy profession and the Nigerian Armed Forces.
News
NGO Launches Ibadan Food Bank Project to Combat Hunger Among Vulnerable Nigerians
The Founder and Executive Director of the Temmy Helping Hands and Youth Empowerment Foundation, Mrs. (Pastor) Elizabeth Bakare, on Saturday unveiled the Ibadan Food Bank Project during the foundation’s 2024 annual convention in Ibadan.
The initiative tagged “Let Nobody Go to Bed Hungry,” aims at tackling food insecurity and hunger among Nigeria’s most vulnerable populations”.
Mega Icon Magazine recalled that a recent survey by the National Bureau of Statistics (NBS) has highlighted the severe economic challenges faced by Nigerian households, revealing that two-third of the population struggle to afford healthy and nutritious meals.
The survey titled “Nigeria General Household Survey – Panel (GHS-Panel) Wave 5 (2023/2024)”, noted the worsening multidimensional poverty and the erosion of purchasing power due to the persistent rise in the cost of goods and services.
According to the report, approximately 63.8% of households have been forced to eat only a few kinds of food due to financial constraints. About 62.4% of respondents admitted worrying about food insufficiency, while 60.5% ate less than they thought they should.
“The situation has deteriorated significantly since the last survey, as the proportion of households expressing food insecurity concerns rose from 36.9% in the previous wave to 62.4% in the current one”, the report reads further.
Speaking at the unveiling in Ibadan, during the 2024 annual convention of the foundation, Mrs. Bakare described the alarming rise in hunger caused by the nation’s economic challenges, including the removal of fuel subsidies and the increasing exchange rate, which have led to soaring food prices.
She noted that these conditions have placed immense strain on widows, single parents, orphans, and other underprivileged groups, making it imperative to act swiftly.
The Ibadan Food Bank is set to provide food support to 2,500 individuals monthly, with plans to expand its reach to 30,000 beneficiaries annually by 2029 and 105,000 per annum by 2034.
The initiative incorporates several interventions, such as the free distribution of essential food items, a food subsidy programme offering discounted staples, and a mobile kitchen service providing one free meal daily.
Continuing, it includes outreach to prisons, orphanages, IDP camps, and leprosy centers, as well as educational meal subsidies for schools and centers for people with disabilities. The project also encourages self-reliance through a home farming initiative that offers seeds, tools, and training, and through food processing training to empower beneficiaries with sustainable livelihood skills.
Since its establishment in December 2023, Temmy Helping Hands has already made significant strides in alleviating hunger and poverty. Past achievements include food distributions during World Food Day celebrations and financial support for widows.
Bakare also announced an upcoming initiative, “Make This December One to Remember,” which will provide assistance to 500 vulnerable individuals during the festive season.
She called for partnerships to expand the scope and reach of the Ibadan Food Bank, urging individuals, organizations, and corporations to support the initiative through food donations, financial contributions, and volunteering.
Highlighting various ways to collaborate, she appealed for sponsorship of families or meals, establishment of endowment funds, employee volunteer programs, and media campaigns to raise awareness.
According to Bakare, such contributions would not only transform lives but also demonstrate a strong commitment to corporate social responsibility and sustainable development.
She thanked the awardees for their dedication to humanitarian service, urging everyone to join in the fight against hunger.
“Together, we can ensure that no one in Ibadan goes to bed hungry. Every act of kindness matters,” the Founder added.
The keynote address at the occasion was delivered by Dr. Ibraheem Okunlola Akinwale, an Assistant Director at the National Orientation Agency (NOA), who spoke on strategies for coping with the economic hardship in the country.
Speaking on behalf of other beneficiaries, Princess Oyedele Bolatito, from Oyo State WAZOBIA Widows commanded Temmy Helping Hands and Youth Empowerment Foundation for the laudable initiative, urging others to emulate such kind gesture.
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Two-Thirds of Nigerians Can’t Afford Healthy Meals — NBS
A recent survey by the National Bureau of Statistics (NBS) has highlighted the severe economic challenges faced by Nigerian households, revealing that two-thirds of the population struggle to afford healthy and nutritious meals. The survey, titled Nigeria General Household Survey – Panel (GHS-Panel) Wave 5 (2023/2024), underscores the worsening multidimensional poverty and the erosion of purchasing power due to the persistent rise in the cost of goods and services.
The report shows that approximately 63.8% of households have been forced to eat only a few kinds of food due to financial constraints. About 62.4% of respondents admitted worrying about food insufficiency, while 60.5% ate less than they thought they should. The situation has deteriorated significantly since the last survey, as the proportion of households expressing food insecurity concerns rose from 36.9% in the previous wave to 62.4% in the current one.
Power Outages and Access to Energy
The survey also sheds light on the nation’s energy crisis, revealing that Nigerian households experience an average of 6.7 power blackouts per week. While 82.2% of urban households have access to electricity, the figure drops to 40.4% in rural areas.
Cooking remains predominantly dependent on traditional methods, with 65% of households using three-stone stoves and 70.2% relying on firewood. However, the use of liquefied petroleum gas (LPG) is reportedly increasing.
Sanitation and Asset Ownership
In terms of sanitation, the report highlights that many households still lack basic toilet facilities, relying on bushes or streets for waste disposal. Access to clean drinking water is often through tube wells or boreholes, reflecting a lack of formal infrastructure in many areas.
On asset ownership, the survey indicates a decline since 2018/19. While two-thirds of households own mobile phones, only 21.3% have internet access. Housing ownership remains significant, with 70.4% of households owning their homes—80.1% in rural areas compared to 49.1% in urban centers.
The NBS report provides a stark reminder of the challenges many Nigerians face daily, from food insecurity and power outages to inadequate sanitation and declining asset ownership. It calls for urgent policy interventions to address these critical issues and improve the living standards of the population.
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