I P W EEK
output,mostly to Asia. Dividing it between the North and South of the country has become a highly politicised and sensitive topic,Tesfay explained. In terms of the country’s oil infra-
structure,most oil development is in the South,but, unlike the North, it lacks the capacity to refine and export it. ‘This means that the South will have to “play nice” with the North,in order to benefit from continued export rev- enues for the oil,’ she noted. The North has been trying to develop blocks in northern territories,but this is unlikely to develop into anything significant. It is therefore expected that there is likely to be some kind of arrangement in order to divide the oil wealth,but it is unlikely to be a 50/50 split. Measures will have to be put in place in the North,in order to kerb the impact of losing this vast amount of oil. These measures have already been hit with popular resistance,suggesting the North may have issues of political insta- bility going forward. Tesfay then explained that,in Uganda,
the main issue affecting the oil sector is the planned Petroleum Revenue Management Bill. The Bill has received conditional approval but has yet to be passed. The current draft has been highly criticised by domestic and interna- tional bodies for its non- competitive licensing and contract divi- sions and its weak positions on transparency and access to information. This is because it would centralise the oil sector and lead to the creation of a national oil company,a Petroleum Authority and a PetroleumMinistry,and be controlled by the President’s Cabinet. There is likely to be a decision to decen- tralise the Bill and decrease transparency within it,she noted. Despite the fact that there has been resistance against the Bill in Uganda,it is likely that other legislation is going to push for greater fiscal accountability responsibility in its revenue shares. This would reduce the risk of indiscriminate taxation for com- panies operating in Uganda,specifically energy companies trying to enter into E&P development in the country. In Nigeria,elections are due to be
held this month. The People’s Democratic Party (PDP) has dominated the political arena in Nigeria since 1999. Nigerian President Goodluck Jonathan is unlikely to be seriously contested in his Presidency,because the PDP has a nationwide support base,Tesfay explained. In terms of risks for the energy sector,it is important to look at activity in the Delta,she noted. Criminal activity in the Delta goes with an ebb and flow,and in election season it usu- ally ebbs,because there is a pre-occupation of militants focusing on
30 3
Round-up
HE Gabriel M Obiang Lima, Minister Delegate of Mines, Industry and Energy for the Republic of Equatorial Guinea on day two of IP Week 2011
onshore rather than offshore. The trend is that around election time, politicians and key political actors will recruit amongst these groups in order to intimidate rivals,she said. There is likely to be a spike in the post-election period,this is important in terms of oil production. However,the lull of mili- tant activity is likely to be disrupted going forward as the militants feel their federal amnesty has not been met.
Equatorial Guinea HE Gabriel M Obiang Lima,Minister Delegate of Mines,Industry and Energy for the Republic of Equatorial Guinea, spoke about energy developments in his country. There are already three producing fields,with total oil produc- tion of 450,000 b/d in Equatorial Guinea. New developments,including the Aseng field,operated by Noble Energy in block I,will include five subsea wells flowing to an FPSO,with first production expected in 2012,and adding 50,000 b/d of oil. Over the life of the project,the company expects to recover gross hydrocarbon reserves of approximately 100–120mn barrels. There is also an estimated 450–550bn cf of gas resources,which will be pro- duced as part of an integrated gas monetisation plan. Elsewehere,first oil from the Alen
field (Noble Energy,block O), is esti- mated to begin production by the end of 2013 at 40,000 b/d of condensate. Natural gas produced is expected to be up to 440mn cf/d. The Alen field has the possibility to connect to the Aseng FPSO for liquid export,Lima noted. The gas monetisation plan is a com- mitment by Equatorial Guinea to diversify the use of the country’s resources and boost economic develop- ment. The country’s first LNG train went online in 2007 at Punta Europe. A key
objective is to get LNG Train 2 underway,with start-up expected in 2016. Train capacity is expected to be 4.4mn t/y,which will come from blocks O,I and R. The current owners of Train 1,3G,will build, own and operate the gas transportation system and will own Train 2. The LNG produced by Train 2 will be sold into international markets following a tendering process. The government is also driving the
creation of petrochemicals and down- stream facilities. The 50,000-hectare site of Luba Freeport,an oil field logistics centre,has been built as a ‘deepwater gateway to West Africa’,providing ‘a strategic naturally sheltered environ- ment for the burgeoning oil and gas industries in the Gulf of Guinea,’ Lima explained. A new refinery is also planned,which will have a 20,000 b/d capacity and will produce gasoline, diesel,jet A-1,fuel oil, lubricants and asphalt. The primary purpose of the refinery will be to supply internal demand,with any excess product being available for export to the local regional markets. A bulk storage ter- minal is also planned for construction, with a capacity of 2.5mn cm,which will be used for distributing crude oil and petroleum products in Equatorial Guinea as well as to other countries on the western African coast.
Strategies for downstream
success Following the IP WeekLunch (see Petroleum Review, March 2011) – at which Ian Taylor,President and Chief Executive of Vitol Group,outlined how the energy market was responding to ‘challenging circumstances’ – Tuesday’s afternoon session on the refining sector was held in partnership with Wood Mackenzie. Chaired by Alan Gelder, Head of Global Downstream Oil
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