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Operator-Friendly Policies Have Positioned Senegal and Mauritania Natural Gas Industries for Success (By NJ Ayuk)

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2 years ago

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Natural Gas

Senegal and Mauritania are rising fast in the world of natural gas — and this trajectory owes much to their cooperation with each other as well as to the enabling environment they have created for IOCs

JOHANNESBURG, South Africa, June 28, 2022/APO Group/ — 

By NJ Ayuk, Executive Chairman, African Energy Chamber (www.EnergyChamber.org)

After Mauritania and Senegal signed the inter-governmental cooperation agreement in 2018 that allowed partners Kosmos Energy, BP, and their partners to proceed with the deepwater Tortue natural field project in the Ahmeyim basin, Kosmos Chairman and CEO Andrew Inglis praised both countries’ leaders. It was their ability to cut through red tape, pursue mutually beneficial solutions, and think in the long term, he said, that would enable Mauritania and Senegal to reap the vast rewards of hydrocarbon province, which is expected to deliver approximately 2.5 mmtpa of natural gas in its initial phase.

“Kosmos congratulates Mauritania, Senegal, and their respective ministries and national oil companies for working together so effectively to reach an agreement that enables their shared gas resources to be developed quickly and efficiently for the benefit of both countries,” Inglis said.

Since then, the project has been moving forward, and Phase 1, a floating liquified natural gas vessel (FLNG), is expected to start operations this year. Other natural gas projects are on the horizon for Senegal and Mauritania as well.  BP and Kosmos plan to launch another large project in the ultra-deepwater Yakaar-Teranga gas field offshore Senegal, which holds 2,739 bcf of natural gas reserves. The Senegalese Ministry of Petroleum and Energies said a final investment decision will be made by the end of the year, and first production will take place in 2024. And in Mauritania, BP has begun studies on its BirAllah offshore gas discovery.

Despite a global pandemic, increasing Western hostility toward hydrocarbons, and a USD33 billion decline in capital expenditure in African projects, Senegal and Mauritania are rising fast in the world of natural gas — and this trajectory owes much to their cooperation with each other as well as to the enabling environment they have created for international oil companies (IOCs). In fact, in 2018, Senegal joined the list of the top five most reforming countries in sub-Saharan Africa, meaning they’ve made considerable strides to improve the business climate and increase their attractiveness to investors. Not to be outdone, Mauritania comes in at number 10 on the list of top reformers worldwide. 

Savvy Fiscal Regimes

Among the reforms, Senegal and Mauritania have tackled major threats to foreign investment, including high taxes and cost recovery limits.

Both nations have a unique opportunity to shape these policies in a way that continues to embrace IOCs, keep industries competitive, and continue down a path of energy independence

Unlike Nigeria, whose unclear fiscal policies often constrain its huge reserves’ profitability, the two Sub-Saharan nations have created fairly reasonable policies for projects such as Tortue, Bir Allah, Orca, Cayar, and Yakaar-Teranga. As the African Energy Chamber’s soon-to-be-released Petroleum Laws – Benchmarking Report for Senegal and Mauritania discusses in detail, Senegal offers the largest natural gas reserves for the most reasonable fiscal policies.

Even at first glance, Senegal and Mauritania have offered investor-friendly incentives for recent projects. Tax rates are low, there are no royalties, and the Profit Oil Government Share — that is, the amount of production, after deducting production allocated to costs and expenses, that will be divided between the participating parties and the host government under the production sharing contract — is capped at 42% for Tortue and 58% for Yakaar-Teranga. Equally important, their cost recovery limits make it clear that Senegal and Mauritania want warm relations with IOCs for the long haul, not just the initial stages of foreign investment. With a cost recovery limit of up to 75%, they remove many of the anxieties and uncertainties inherent in foreign investment. Contrast that with the cost recovery limit in Egypt’s giant offshore gas field in Egypt, which declines to 20% 11 years after start-up.

In short, Mauritania and Senegal have some of the most operator-friendly fiscal policies on the continent, and that is bound to attract additional investment. Only Mozambique, South Africa, and Ghana offer better terms currently, but this contrast in no way undermines Senegal’s and Mauritania’s path to success. With other advantages such as more peaceful locations and larger, recently discovered reserves, they’re only beginning to realize their full potential.

Reserves Meet Stability

Political stability is often an investment watchword — and it’s an advantage for both Senegal and Mauritania. While IOCs have often successfully persevered in unstable nations, investments inevitably suffer from political fallout.

In a study of contrasts, Mozambique discovered similar natural gas reserves (100 trillion cubic feet to Senegal’s 120 trillion) in 2010. But despite comparable foreign attention and investment – not to mention a four-year head start – Mozambique’s gas industry lags somewhat behind Senegal’s, due in no small part to ongoing regional violence. While France’s TotalEnergies announced its plans to return to Mozambique in 2022, it doesn’t anticipate production to begin until a full year after Tortue’s own target date – and even that ambition rests on the hope that Mozambique first enhances its security.

Such violence can even hurt nations with huge reserves and longstanding IOC relationships. Shell pulled out of Nigeria partly because of oil theft and pipeline sabotage, even though the nation enjoys twice the oil reserves of Senegal. After decades of tolerating such violent environments for the sake of rich resources, IOCs will inevitably look to Senegal’s potent combination of huge reserves and peaceful environment. Free of that added burden of local instability, foreign investment can only grow to new heights in this emerging nation.

Going Forward

Despite Western talk of renewables, the world can’t deny a continued need for oil and gas — a need only highlighted by uncertainty in the wake of the Ukraine conflict. By offering such a unique combination of political stability, reasonable fiscal policies, and large reserves, Senegal and Mauritania have laid the framework for a bright future in this industry.

Better yet, both nations acknowledge that they still have room to improve and truly expand on their potential. The African Energy Chamber hopes they will take the opportunity to systematically update and clarify their other policies, such as local content laws. While Senegal recently revised their policies, the enforcement mechanisms remain somewhat vague. Mauritania, for its part, has not revisited theirs in almost a decade. Both nations have a unique opportunity to shape these policies in a way that continues to embrace IOCs, keep their industries competitive, and continue down a path of energy independence.

Distributed by APO Group on behalf of African Energy Chamber.

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African Energy Week (AEW) 2024 to Navigate the Future of Oil & Gas Financing Amid Energy Transition

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14 hours ago

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September 9, 2024

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The African Energy Week: Invest in African Energy conference will gather industry leaders to explore oil and gas financing tools and strategies in the age of the energy transition

CAPE TOWN, South Africa, September 9, 2024/APO Group/ — 

As the global energy landscape shifts towards cleaner and more sustainable sources, Africa’s oil and gas sector faces challenges in securing financing for upstream projects. Nearly $3 billion was mobilized toward African energy projects in 2023 – with a significant portion directed towards natural gas – according to the African Development Bank (AfDB). As global markets evolve, African financing strategies must adapt to support both economic growth and long-term sustainability.

The Financing Upstream Oil & Gas in the Age of Transition session at African Energy Week (AEW): Invest in African Energy will explore how African oil and gas projects are securing financing in a rapidly changing landscape. The session will unpack evolving regulatory frameworks, innovative financing models and the balance between traditional fossil fuel and renewable energy investments. Moderated by Laura Sima, Director of S&P Global Commodity Insights, the panel will feature Trafigura Group Head of Upstream Finance Matthieu Milandri; Africa Finance Corporation Vice President Taiwo Okwor; and Project & Export Finance Africa Managing Director & Regional Head Fathima Hussain.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

To address shifting investment priorities, a dedicated Africa Energy Bank (AEB) has been launched by the African Petroleum Producers Organization and African Export-Import Bank. To be based in Abuja, the AEB aims to bridge Africa’s infrastructure funding gap and accelerate the development of energy projects across the continent. As a supranational institution, the AEB will provide critical funds for emerging oil and gas projects across Africa, supporting the sector amid the global energy transition, and is currently open for signature by prospective member states.

African natural gas projects have been a leading destination for foreign investment, as gas is considered a cleaner alternative and even labeled as “green energy” in the EU. Projects like Senegal and Mauritania’s Greater Tortue Ahmeyim LNG – led by bp and Kosmos Energy – have secured $4.8 billion in investment from a mix of equity from the IOCs and debt financing supported by multilateral banks. Blended finance – combining both public and private sector capital – has emerged as a critical solution to mobilizing large-scale financing in Africa’s energy sector. The TotalEnergies-led Mozambique LNG project represents a total post-FID investment of $20 billion, of which $14.9 billion comes from senior debt financing including a blend of loans from export credit agencies, multilateral finance agencies like the International Finance Corporation and the AfDB, and commercial banks.

Significant capital is also flowing to high-potential hydrocarbon basins with strong exploration prospects. In Namibia, multinationals TotalEnergies and Shell are continuing to explore the deepwater Orange Basin, with TotalEnergies allocating 30% of its one-billion-dollar exploration budget to the country in 2024 alone. Namibia’s government has been active in courting global financiers, emphasizing the need for sustainable energy development alongside oil and gas exploration and production. In Angola, TotalEnergies, Petronas and state-owned Sonangol secured a $6-billion FID for the Kaminho deepwater project in Block 20 that will develop the Cameia and Golfinho ultra-deepwater fields. The project will employ an all-electric FPSO unit, designed to minimize greenhouse gas emissions and eliminate routine flaring. Independent upstream company Invictus Energy also recently secured $10 million from local institutional investors for its Cabora Bassa project in Zimbabwe to develop the country’s first major oil and gas field.

The upcoming finance session will also position public-private partnerships as a mechanism for financing large-scale energy infrastructure projects, as well as de-risking investments. The Republic of Congo has advanced the development of its Banga Kayo block through an amended PSC with China’s Wing Wah Oil Company, enabling the commercialization of the block’s gas resources. In Nigeria, the $2.6-billion Ajaokuta–Kaduna–Kano gas pipeline is being financed through both public and private funds, with the Nigerian National Petroleum Company as the main financier and international lenders including the Industrial and Commercial Bank of China and Bank of China involved. Nigeria’s Federal Government has provided a sovereign guarantee covering 85% of the project’s costs, securing crucial financing and building investor confidence.

Distributed by APO Group on behalf of African Energy Chamber.

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The Islamic Development Bank Institute (IsDBI) Completes Pilot Implementation of Islamic Finance Strategic Mapping Framework in Kazakhstan

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20 hours ago

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September 9, 2024

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This comprehensive assessment, conducted in collaboration with the Astana International Financial Centre (AIFC), aimed to identify key opportunities and challenges within the country’s Islamic finance sector

ASTANA, Kazakhstan, September 8, 2024/APO Group/ — 

The Islamic Development Bank Institute (IsDBI) (https://ISDBInstitute.org/) is pleased to announce the successful completion of its flagship Islamic Finance Strategic Mapping Framework (IF-MAP, formerly IF-CAF) (https://apo-opa.co/4cXPwti) pilot exercise in the Republic of Kazakhstan. This comprehensive assessment, conducted in collaboration with the Astana International Financial Centre (AIFC), aimed to identify key opportunities and challenges within the country’s Islamic finance sector.

The pilot initiative of IF-MAP was launched (https://apo-opa.co/3MyooGO) in June 2023, and involved extensive consultations with key stakeholders, including government agencies, financial institutions, and industry experts. The resulting tailored policy recommendations report, which outlines the sector’s progress and provides recommendations for future development, has been submitted to the AIFC.

AIFC’s commitment to promoting Islamic finance is evident through favorable conditions offered to Islamic financial companies to operate in both the retail and corporate sectors

As one of the key outcomes of the exercise, IsDBI and AIFC jointly developed the Kazakhstan Islamic Finance Country Report 2024 (https://apo-opa.co/3B4GwFv) which H.E. the Governor of AIFC, H.E. Mr. Renat Bekturov, launched on 6 September during the Astana Finance Days. The report highlights the immense potential of Islamic finance in supporting Kazakhstan’s economic growth and development.

In his welcome address, H.E. Mr. Renat Bekturov noted: “This report not only provides a comprehensive overview of the Islamic finance industry but also highlights our shared vision for the future.  AIFC’s commitment to promoting Islamic finance is evident through favorable conditions offered to Islamic financial companies to operate in both the retail and corporate sectors. The report is an invaluable guide for investors, policymakers, and stakeholders.”

Commenting on the successful completion of the pilot exercise, Dr. Sami Al-Suwailem, Acting Director General of IsDBI, stated, “We are delighted to have collaborated with the AIFC on this important initiative. The Kazakhstan Islamic Finance Country Report offers a valuable analysis of the sector’s current state and future prospects. We believe that the report, together with the IF-MAP policy recommendations submitted to the AIFC, will be instrumental in guiding policymakers, investors, and financial institutions as they work to harness the full potential of Islamic finance in Kazakhstan.”

The IsDB Institute remains committed to supporting the growth and development of the Islamic finance industry worldwide. Through its research, training, and capacity-building programs, the Institute seeks to contribute to the creation of a more inclusive and sustainable financial system.

The Kazakhstan Islamic Finance Country Report 2024 is accessible on IsDBI website here: https://apo-opa.co/4ge7jQ1

Distributed by APO Group on behalf of Islamic Development Bank Institute (IsDBI).

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ST Telemedia Global Data Centres Reinforces Commitment to Digital India, Invests US$3.2 billion to add 550MW Data Centre Capacity

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20 hours ago

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September 9, 2024

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SINGAPORE – Media OutReach Newswire – 6 September 2024 – ST Telemedia Global Data Centres (STT GDC), one of the world’s fastest-growing data centre colocation services provider headquartered in Singapore, today announced a significant investment of US$3.2 billion (INR 26,000 crores) to expand its data centre capacity in India by a substantial 550MW, nearly tripling the company’s IT load capacity to meet the demands of India’s thriving digital economy, over the next 5-6 years.

This strategic investment reflects STT GDC’s confidence in India and the growth of its digital economy, as well as aligning with the burgeoning demand for digital infrastructure, driven by the surge in data consumption, cloud computing, digital transformation, and growing adoption of AI applications. This investment also further solidifies our market leadership in India, where we already command about 28% of market share by revenue.

STT GDC India is majority-owned by STT GDC in partnership with Tata Communications Ltd, which holds a minority stake in the company. STT GDC India’s portfolio consists of 28 data centres across 10 cities throughout India. Today, its data centre portfolio has a total combined capacity of over 318MW of IT load, with a well-diversified portfolio of about 1,000 enterprise customers that include many Fortune 500 companies. More recently, STT GDC India was recognised as a Great Place to Work for the fifth consecutive year, as well as one of the Best Places to Work in Asia.

“As we celebrate STT GDC’s 10th anniversary this year, embarking on this ambitious expansion is a sign of our confidence in Digital India and the future of one of STT GDC’s strategic and fastest growing markets globally. Prime Minister Modi’s vision for Digital India has paved the way for opportunity; today the India digital economy’s growth rate of almost three times overall GDP growth is putting the country on pace to achieve a US$1 trillion digital economy by 2027-20281. At STT GDC, we want to play an active role in co-investing and contributing to India’s long-term success by investing in the foundational digital infrastructure that will help further accelerate Digital India. We are excited about the opportunities ahead and are confident in our ability to contribute significantly to India’s digital transformation,” said Bruno Lopez, President and Group Chief Executive Officer, ST Telemedia Global Data Centres.

STT GDC, along with several other Singapore business leaders, participated in a Business Roundtable with Prime Minister Narendra Modi hosted by the Singapore Business Federation on 5 September 2024.

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1India digital economy: India to be $1 trillion digital economy by FY28: IT minister Rajeev Chandrasekhar – The Economic Times (indiatimes.com)

About ST Telemedia Global Data Centres
ST Telemedia Global Data Centres (STT GDC) is one of the fastest-growing data centre providers with a global platform serving as a cornerstone of the digital ecosystem that helps the world to connect. Powering a sustainable digital future, STT GDC operates across Singapore, the UK, Germany, India, Thailand, South Korea, Indonesia, Japan, the Philippines, Malaysia and Vietnam, providing businesses an exceptional foundation that is built for their growth anywhere. For more information, visit https://www.sttelemediagdc.com/.

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