P&E Afr 1

www.ngpowerenergyafrica.com • Q2 2010

WINDS OF CHANGEWhy wind power makes sense, even in equatorial regions

WELL GROUNDEDShell’s Babs Omotowa keeps the interests of local communities at heart

Why the sands of the Sahara could challenge the dominance of oil and gas in Africa’s energy industry

LIGHTING AFRICA HEALTH AND SAFETY INTERNAL MARKETS ENHANCED OIL RECOVERY

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As our demand for power continues to soar, it becomes increasingly hard to ignore the fact that we need more renewable sources of

energy. Wind, sun, hydro, biofuels – all are being eagerly exploited for their energy po-tential. Solar in particular, has been the focus of much hopeful speculation as to its ability to meet our future power needs.

One group of international companies thinks it has found the ideal solar solution in the Sahara desert. Th e Desertec Industrial Initiative GmbH was launched in July 2009 by the Desertec Foundation and reinsurance company Munich Re, with consortium mem-bers including Deutsche Bank and Siemens. Th e initiative aims to create the conditions for an accelerated implementation of the De-sertec concept in Europe, the Middle East and North Africa.

According to the Foundation, the earth’s deserts are capable of supplying enough solar energy to meet humanity’s power needs for many years to come. It envisions a series of concentrating solar thermal power plants spread across the Sahara, using high voltage direct current transmission to bring power to MENA, and beyond, into Europe. In this way, the deserts would enable a secure, suffi cient aff ordable, clean and inexhaustible energy delivery for a future world that needs to sup-port 10 billion people.

Th ere are drawbacks, including the rela-tively high cost of raw materials, the need to raise $US 555 billion to fund the initial stages of the project, and a lingering fear among local communities that this might be just an-other example of economic plundering by the former colonial powers.

Despite these hurdles, any project that promises to reduce our dependence on fossil fuels is worth keeping an eye on. For now, though, Africa is also helping to provide

FROM THE EDITOR

Under the desert sun

the traditional sources of fuel that still play an important role in the energy mix. In this issue of Power & Energy, we talk to Shell’s Babs Omotowa about balancing the needs of a large multinational with those of the Afri-can communities in which it operates; Bob Lambert examines the need to diversify GB Petroleum’s portfolio in Tunisia and Moroc-co; and PETROCI’s Allangba Faustin looks at exploration and discovery in Cote d’lvoire.

With Desertec solar plants set to spring up across the continent, and both local and international companies continuing to pursue other sources of power, it seems that Africa is quite literally a hotspot that may hold the key to meeting our escalating demand for energy.

Marie Shields, Editor

Could the solution to our energy woes lie in the shifting sands of the Sahara?

5

“Getting the infrastructure developed to be able to bring domestic gas and power to the people is the key thing for us in Africa” Babs Omotowa, Regional Vice President, Shell (Page 36)

“We’d like to drill in Kenya in early 2011, and then we have about eight wells to drill in other areas by the middle of 2012” Jeff Hume, CEO, Black Marlin Energy (Page 62)

“Within six hours, deserts receive more energy from the sun than humankind consumes in a year” Gerhard Knies, Co-Founder, Desertec Foundation (Page 30)

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Let there be lightHow two ambitious projects arebringing new hope to Africanhouseholds

30

36

Time to shineThe renewable energyinitiative that could changethe face of North Africa

Staying true to your rootsBabs Omotowa balances Shell’s interestswith those of local communities

86

42

Small fish, big pondHow small exploration companiesare thriving in the shadows of theirlarger counterparts

CONTENTS7

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50 Taking risksHamed Ibrahim looks at how medium-sizedcompanies are coping with the explorationrace

54 Up to go downstreamAlastair Baumann unveils NAMCOR’s plansto secure downstream recognition

58 Combining forcesHow major companies are combining to takeon bigger projects, according to OladipoFaseemo

62 Small is beautifulJeff Hume outlines the positives of being asmaller operator in the exploration business

69 Help from homeJacob Saa Sandikie opens up on the intentionsof the National Oil Company of Liberia

72 Exploration in peaceWilliam Ngeleja lifts the lid on Tanzania’splans for the future of exploration

78

54

62

Cosmo Moyo

Small is beautifulUp to go downstream

CONTENTS9

INDUSTRY INSIGHTS

40 Tim Wells, SPX Dielectric56 Adriaan Combrink, CK Aerial Surveys

46 Jim Tait, FMC Technologies78 Cosmo Moyo, Dynamic SecurityTechnology Ltd90 Idika David, Skylit Tech Ltd100 Derek Nwafor, Solidlight Ltd

EXECUTIVE INTERVIEWS

ASK THE EXPERTS

74 Philip Schalekamp, Trial Surveys Ltd82 Richard Norsworthy, PolyguardProducts98 Markus Pam, Pamtronics Nigeria Ltd120 David Omaghomi, HSEManagement Ltd

DIAMOND SPONSOR


114 Pure and simpleDenmark’s Ambassador to South Africapromotes the deployment of low-emissiontechnologies in Africa

58Combining forces

Global focus

76 Duct talesAdam Wynne Hughes details the achievementsand priorities of The International Pipeline andOffshore Contractors Association

80 The whole hogLloyd Pirtle celebrates 20 years of the PiggingProducts & Services Association

92 Saving up the sunThe challenges facing the development of solarenergy

102 Fair weather aheadWhy the forecast for wind energy is extremelygood

110 Tapping into logisticsAllangba Faustin deconstructs the logisticalworld of power generation

102

Fair weather ahead

118 In safe handsYassin Darwish looks at health and safety inthe oil and gas industry

Tim Wells

40

122 Summits124 Global focus126 On the shelf128 Photo finish

IN THE BACK

CONTENTS10


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Find Out MoreContact NGO&G +44 (0)2920 729 308

www.ngoafricasummit.com

The NGO&G Summit is a three-day critical information gathering of the most infl uential and important executives from the oil and gas industry.

The NGO&G Summit 2010

La Palm Royal Beach Hotel, Accra, Ghana

28-30th September 2010

A Proven FormatThis inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning.

“NGO&G Africa Summit give very high quality of networking and interactions between different governments and IOCs that will help both parties to get closer and work in team spirit for a better future.” Yassin Darwish, Dana Gas Egypt

A Controlled, Professional and Focused EnvironmentThe NGO&G Summit is an opportunity to debate, benchmark and learn from other industry leaders. It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

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In early January 2009, a bright red par-cel attached to a small parachute glidedgently toward the deck of a Saudi su-pertanker 500 miles off the Kenyancoast. Onboard the 330-metre longSirius Star was a 23-man crew, a gang ofarmed Somali pirates and two millionbarrels of oil – a quarter of SaudiArabia’s daily output. Inside the pack-age was believed to be $3 million inhigh denomination bills – paid by oilgiant Saudi Aramco to release the su-pertanker, owned by its shipping arm,and bring an end to a terrifying two-month ordeal for the hostages.

The hijacking of the Sirius Star wasthe bandits’ biggest booty to date, andhas fueled fears that other tankers couldbe snared by pirates in the future.Indeed, most attacks are directed at

UPFRONT14

OIL, TOIL

AND TROUBLE

Piracy is back.And with oilsupertankersseen as a prizecatch for new-agepirates, can theindustry ward offpotential attacksor is it merely asitting duck?

By Julian Rogers

merchant ships connected in some wayto the oil industry. The lion’s share haveoccurred in the Gulf of Aden off theSomali coast – one of the world’smost important shipping lanes with20,000 vessels passing through an-nually. Kenya’s foreign ministerclaimed that up until November2008 the pirates had received overUS$150 million, which is beingploughed back into purchasingfaster boats and increased hardware.

“The big ransom paymentshave fuelled attacks – there isn’t anyreal doubt about that,” suggestsRoger Middleton, Consultant forthe Africa Programme at ChathamHouse, formerly the Royal Instituteof International Affairs. “As ran-soms go up it becomes a more at-

tractive business for people, but it isa very difficult position for ship ownersto be in because no-one wants to be thefirst not to pay a ransom and jeopardisethe safety of their crew.”

Nick Davis, a former British armypilot and Chairman of the MerchantMaritime Warfare Centre (MMWC) –a not-for-profit organisation address-ing ship security – is also of the opinionthat payoffs are spiralling out of control.“The pirates keep pushing for as muchas they can get,” he says. “The industry,the insurance companies and the nego-tiation teams are letting the ransoms getout of hand, which is making the situa-tion worse because the bigger the ran-soms, the more people want to getinvolved. There is no shortage of man-power for the pirates to send out and

UPFRONT P&E AFRICA_25 June 13/04/2010 08:49 Page 14

there will never be enough warshipsto effectively prevent them.”

According to the InternationalChamber of Commerce’sInternational Maritime Bureau(IMB), the number of attacks so farthis year off Somalia has far sur-passed 2008’s total. Last year wit-nessed 111 incidents, with 42vessels hijacked. But by mid-May ofthis year 29 successful hijackingswere recorded from 114 attemptedattacks. And while a total of 815crew members were taken hostagein 2008, this figure stood at 478 bythe middle of May. “These guyshave found a business model thatmakes a lot more money than theirtraditional fishing industry,” saysJeroen Meijer, a security consultantfor threat and safety advisorsControl Risks. “Keepingthat business model intact is crucial, sothey constantlyadapt their modusoperandi. We sawthem operating inthe Gulf of Aden, offthe coast of Mogadishu[Somalia’s capital] and wehave seen them going into the RedSea and Omani waters. So they areconstantly adapting where they op-erate to minimise the threat to theiroperations.”

A knock-on effect of the pira-cy has been a sharp rise in shippingcosts, with many firms choosing toavoid the Suez Canal and navigatetheir vessels thousands of miles fur-ther via South Africa’s Cape ofGood Hope. On top of this, insur-ance costs have soared by as muchas 100 percent. And while there aremore than a dozen naval forces, aspart of a multinational coalition of-fensive, flexing their military mus-cle and patrolling the Gulf of Adenin a bid to thwart the pirates, thisasymmetrical warfare has justforced the pirates to scour for vic-

tims in less policed waters, namelythe western Indian Ocean.

Davis says the crews who windup getting hijacked invariably havelittle or no understanding of thethreats and have been given notraining in how to defend their ves-sel. He is also concerned that shipowners are deploying a mishmashof anti-piracy measures instead ofadopting a standardised approach.“We have such a divide across theworld,” he notes. “For instance, theAmericans are putting armedguards on everything, which is notvery helpful and will lead to all sortsof problems because the ultimateauthority on that ship should be themaster. He is still liable, irrespectiveof who pulled the trigger and Iknow a lot of masters who are very

uncomfortable with thearms issue and civilian

guards.”So can piracy

be stopped on land?Experts are in

agreement that thefailed state of Somalia

is a perfect breedingground for piracy, while a lack

of law means the pirates can hijackvessels with impunity. Piracy firstbecame a problem in the region atthe outbreak of Somalia’s civil warin the early 1990s when the govern-ment was overthrown, and a con-tinuing lawless atmosphere in thecountry has magnified the prob-lem. “Somalia is a completely failedstate with no political structure tospeak of and no law enforcementcapability so these gangs operatewith total impunity,” says Meijer.“Those who live on the coast see thewealth of the world sailing by every-day; in an extremely benign mar-itime environment where you canoperate a small boat for very littlecost, it’s too tempting to find aKalashnikov and an RPG and hi-jack the riches on your doorstep.”

UPFRONT15

Libyan Oil Minister Shukri Ghanem speaks during an interviewwith Agence France-Presse in Tripoli on April 9, 2010. Ghanem saidhis country has allocated “US15 billion dollars for upgrading its oilsector” to increase Libya’s production capacity which is currentlyclose to two million barrels per day.

An aerial view of Imboulou hydropower plant under construction inCongo. Built for a total cost of US$300 million, the plant will provide600GWh of energy every year once completed.

NEWS IN PICTURES

Nigerian youths protest on March 16, 2010 in Abuja against the stateof the nation, lack of security and electricity as well as for electoralreform. The electoral agency said on March 16 that the date ofNigeria's presidential and legislative elections next year woulddepend on the outcome of internationally demanded reforms of thevoting system.

Crew memberstaken hostage

in 2008

815


UPFRONT16

BP Group CEO Tony Hayward examinesthe importance of a diversified energy mixto ensuring the world’s energy security.

futureDiversifying

for the

Energy security remains at the top of the global political andeconomic agenda. It was a key concern during the big swingsin energy markets of the past two years and a little over amonth ago it was at the heart of the debate in Copenhagen.The need to balance energy security, jobs and economic de-

velopment while addressing the problem of climate change all con-tributed to the challenge politicians faced in Copenhagen. And thatchallenge means that energy security will dominate politics and pol-icy for the next 12 months and considerably beyond.

So what delivers energy security? I believe the key factors arediversity, competition and efficiency: accessing the widest range ofenergy sources – through diversity; bringing out the best ways offinding, producing and distributing energy through competition;and making the most of each unit of energy – through efficiency.

There is actually nothing new about these factors. But we mustnot underestimate their significance. Reliable and affordable sup-plies of hydrocarbon energy were taken for granted through muchof the 20th century and laid the foundation for the world’s extraor-dinary economic progress. When concerns arose, it tended to be at

times of war or turbulence, notably in the Middle East, or, closer tohome, with industrial action.

What’s different now is that energy security has becomea defining issue for the 21st century, as one element in a

complex energy challenge with strategic, eco-


UPFRONT17

nomic and environmental dimensions. To meet this challenge, I believe weneed to apply some basic business principles. We must be clear about wherewe are and where we want to go – the starting point and the destination. Weneed a clear regulatory framework to enable business to invest with confi-dence to build such a future. And we need to set out practical pathways to-wards the destination.

A diverse energy mixLet me look first at the journey that lies ahead. BP’s projections suggest

we’ll need around 45 percent more energy in 2030 than we consume today– and double what we consume today by 2050. That’s going to require in-vestment of more than US$1 trillion a year – every year.

How do we meet that demand sustainably? Certainly there will need tobe changes in the energy mix. We need more low-carbon energy. And weneed to use energy more efficiently. But the main point is that there is nomagic solution, and we will need a wide mix of energy types in 20 years time.The share of renewable energy will certainly increase,but we have to be realistic about its contribution. Asof today, all of the world's wind, solar, wave, tide andgeothermal energy accounts for around one percentof total consumption. Given the practical challengesof scaling up such technologies, the InternationalEnergy Agency can’t see them accounting for muchmore than five percent of consumption in 2030, evenwith aggressive policy support.

Undoubtedly nuclear energy and biofuels willplay a part, and by 2030 carbon capture technologycould be deployed at scale. But there will still be amajor role for hydrocarbons. Indeed the IEA analy-sis indicates that even in a low carbon scenario pred-icated on keeping the atmospheric concentration of CO2 to less than450ppm, hydrocarbons will remain dominant.

The good news is that we have enough reserves of oil and natural gas tolast for decades, and reserve estimates are rising as we develop ways of un-locking both conventional and unconventional resources. Our analysis in-dicates that the world has sufficient proved reserves for over 40 years of oiland 60 years of gas at today’s consumption rates.

The energy of the future will be more than oil. But oil will still be a majorpart of it. The critical point is that it will be a diverse mix. In BP our own port-folio reflects this diversity. For example to date, in our low carbon energybusiness we have invested over $4 billion and are continuing to invest morethan $1bn a year. In another we are planning to invest in Canadian heavy oil– a relatively carbon intensive activity, but one that has a major role in pro-viding access to secure energy for North America. We believe both will bepart of a broad and sustainable mix that embraces oil, gas, coal and renew-ables, producing and using them all with innovation and efficiency.

Security architectureBuilding such a future demands action both from businesses and poli-

cymakers. Business can provide the building blocks and tools – but we needto work within the architecture provided by governments. There are twoways in which the current energy security architecture can be strengthened.

First, with continuing pressure on supply, it’s important to develop en-ergy resources as efficiently as possible – I believe that means opening themup to competition. Restrictions on market forces are key when it comes tounlocking the resources we need.

So competition has a big role to play. Opening access to a range of po-tential operators encourages the most efficient solutions, and often involvespartnerships that provide new combinations of skills. Iraq is a very good ex-ample. BP is teaming up there with CNPC of China and Iraq’s South OilCompany to drive a major investment programme that will nearly tripleproduction from the super-giant Rumaila field..

The second area where policy is critical is the question of climatechange. It is, of course, central to sustainable energy security that we find aclear way forward on this issue. BP has been calling for action for at least 12years – preferably via creating a price for carbon through market mecha-nisms. Again this is because we believe competition will encourage the mostefficient ways of cutting emissions.

Those aren’t just words. At BP we factor a carboncost into both our investment choices and the engi-neering design of new projects. This is our way of en-suring that our investments are competitive not only intoday’s world but in a future where carbon has a morerobust price.

My third reason for not joining the post-Copenhagen detractors is this: I have a feeling it maymark the emergence of greater realism in the climatedebate. There is a dawning realisation that we can’t af-ford to be paralysed by the absence of agreed targets for2030 or 2050. Individual governments need to act re-gardless of whether there is a global treaty.

The crux of the matter is this. If policymakers en-courage investment – whether in low-carbon energy or fossil fuels – then in-vestment will flow – but if it doesn’t then the risk is that spare capacity willdwindle and we will return to the price volatility we saw in 2008.

The complexity and scale of the task make it especially important thatthose involved try wherever possible to respect three principles: First, effi-ciency - the best way to more secure energy is saving energy. Governmentsshould seek the most efficient approaches that impose the lowest overallcosts on society.

Second, diversity – there is no one, silver-bullet solution or technologythat will deliver a secure energy future. A diverse mix of resources and tech-nologies will be needed. Third, competition – efficient markets and marketmechanisms will provide the most effective way to produce and distributeenergy and to induce change.

The consequences of failure would be serious. Without a credible andenduring framework, it will be impossible for industry to invest at the scalenecessary to maintain and enhance our energy supply. As well as ensuringthat we don't leave future generations with the prospect of rising sea levels,we need to ensure that we keep the lights on in the next decade. If we canmeet both these challenges, as I believe we can, then we will truly have de-livered energy security. n

“The energy of thefuture will be morethan oil. But oil willstill be a major part

of it. The criticalpoint is that it willbe a diverse mix”

Excerpted from a speech given to the London Business School in February 2010. © BP Group.


UPFRONT18

GROWING GHANA

Thanks to investments in the na-tion’s oil industry, Ghana’s economyis expected to grow between four andfive percent, that’s according to an an-nouncement by the InternationalMonetary Fund (IMF). Peter Allum,the IMF's mission chief to the WestAfrican country, said: “The IMF esti-mates that the economy expanded bythree to five percent in 2009, notwith-standing the global financial crisis, ascocoa and gold exports remainedstrong. This is down from 7.3 percentin 2008, a year of highly expansionaryfiscal policies that destabilised theeconomy.” Business Week reportsthat Ghana will become an oil ex-porter in the fourth quarter when theoffshore Jubilee field is expected tostart production. Jubilee has potentialresources of 1.8 billion barrels, ac-cording to London-based Tullow OilPlc, its operator. Initial production isestimated at 120,000 barrels a day.

MANAGE YOUR ENERGY

Google, Hewlett-Packard, GeneralElectric and 44 other companies andorganisations are putting pressure onPresident Obama to grant people thepower to “monitor and manage theirenergy consumption”, underlininghow important smart grid technologyis considered to be. In September lastyear, IDC Energy Insights conductedan assessment of the utilities that wereleading the pack towards smart gridand smart meter deployment. SempraEnergy, Austin Energy, EdisonInternational, Oncor, PG&ECorporation and CenterPoint Energy,all of whom are based in eitherCalifornia or Texas, topped the list ofutilities out in front. On top of this,National Grid, the nation’s second-largest utility, has applied to the USDepartment of Energy for US$200 mil-lion in stimulus funding to develop an‘end-to-end’ smart grid deploymentthat will include approximately 200,000customers in New York, Massachusettsand Rhode Island.

COMPLETELY RENEWABLE

According to a new study by interna-tional consulting firm PricewaterhouseCoopers, Europe and North Africacould consume 100 percent of their en-ergy from renewable sources by the year2050, but this all hinges on the forma-tion of a single European energymarket that can combine with a sim-ilar universal, standards-based ener-gy market in North Africa. Updatingthe regional power system to a sharedsystem based on 100 percent renew-able energy will serve to achieve twomajor goals for both Europe and NorthAfrica – energy security and the decar-bonisation of power generation tech-nology. Getting all our power fromclean technology would also put to restconcerns over current energy suppliesand contribute to reducing ‘energypoverty’ in parts of eastern Europe andNorth Africa.


19

SOLAR WATER

Saudi Arabia has partnered with ITgiant IBM to build a solar powered de-salination power plant in a bid to cutenergy costs. The plant will be built inthe north eastern city of Al Khafji byIBM in partnership with the KingAbdulaziz City for Science andTechnology. It will be powered byultra-high concentrator photovoltaic(UHCPV) technology and the plan isfor it to provide 30,000 cubic metresof water per day for over 100,000people. Currently, thermal technolo-gy and reverse osmosis are the mostcommonly used desalination meth-ods used in Saudi Arabia. Dr Turki AlSaud, Vice President for research in-stitutes at KACST, told ArabianBusiness.com: “Saudi Arabia is thelargest producer of desalinated waterin the world and we continue to in-vest in new ways of making access tofresh water more affordable.”

A GROWING CAPACITY

A report by the American WindEnergy Association (AWEA) has re-vealed that the US wind energy sectoremploys 85,000 people. The reportclaims that the wind energy industryin the US is continuing to expand,having installed 10 GW of additionalwind generating capacity last year –the largest growth in capacity to date.Denise Bode of AWEA, said: “Jobs,business opportunities, clean air, en-ergy security – wind power is deliver-ing today on all those fronts forAmericans. Our annual report docu-ments an industry hard at work andon the verge of explosive growth if theright policies are put in place.”

The AWEA advocates the cre-ation of a national Renewable EnergyStandard to provide long-term securi-ty for companies planning to invest inthe sector.

GREENER JOBS

Ontario, Canada is investing C$9billion in the country’s renewable en-ergy sector. Around 20,000 jobs willbe created when the governmentsigns 184 contracts for renewable en-ergy projects. The initiative is thelargest of its kind in Canadian histo-ry to date and will increase energy ca-pacity in Ontario by 2.5 GW. It waslaunched as part of the government’sOpen Ontario Plan, which aims toprovide a stable price for clean, re-newable energy so developers will in-vest and create 50,000 jobs. PremierDalton McGuinty, said: “We havepractical, aggressive policies to securegreen energy generation, researchand manufacturing, which will creategood jobs in a growing industry.”

UPFRONT


UPFRONT20

Epoxy grouts are well known in the manyindustrial plants in the USA, Japan, South EastAsia and several countries in Europe. Thepower industry is a steady customer, as are theoil and gas industries, petrochemical plants,steel rolling mills, and so on. However, thereare still industries that have not heard theword. Machines are machines aremachines, and their problemscan be easily seen, regardlessof the industry.

A recently complet-ed series of contracts fora large sugar mill in WestAfrica highlighted the situ-ation. The first contract con-cerned an 8.0 MW steam turbinegenerator that had experienced bad vibra-tion problems, particularly in the gear-box. While this problem was beingaddressed in January 2009, a number ofother potential and actual problemsaround the factory were identified.

The customer had no knowledge ofepoxy grouts as a specific material, andwas surprised to hear that many of hismisalignment and vibration problemsstemmed directly from the failure of

cheap cement grouts originally used to in-stall the equipment. Three more visits inJuly, September and October resulted inrepairs being effected to 10 further itemsof machinery. The cane shredder was re-grouted, and a new electric motor drive

installed, aligned and grouted. Sixsugar mill gearbox beams were

aligned and grouted as re-quired.

A six MW steam tur-bine generator was re-aligned, and the

reconditioned gearboxgrouted in place. An ID fan

in the boiler plant, which hadbeen vibrating badly, was repaired by

extensive rebuilding and re-grouting ofthe foundation. The plant was then readyto start the new cane-crushing season onschedule in mid-November. AlphatecEngineering supplies materials and instal-lation services to all types of industrythroughout Europe, North and WestAfrica, and the Middle East.

See website www.alphatec-engineering.com for more details.

EPOXY GROUT HELPS SUGAR MILL GET BACK IN ACTION

The Michigan Economic DevelopmentCorporation (MEDC) was left rather red-facedlast month as it was revealed that they had grant-ed a US$9.1 million state tax break to the creatorof a renewable energy company, RASCO, afterclaims that he would send renewable energyequipment to Africa – only to find out that hewas sentenced to serve time in prison for embez-zlement and bank fraud charges.

Richard Short claimed his company wouldhire 765 people within five years to convert aformer Flint chassis plant to build and ship re-newable energy and sanitation equipment toAfrican villages – a welcome development forMichigan as it was one of the hardest hit statesin the US after the economic storm. Greg Main,MEDC President and CEO, said: “Needless tosay we are embarrassed. We work hard to grow,expand and attract business in Michigan andare proud of our achievements. We are takingthe necessary steps to ensure situations such asthis do not happen in the future.”

A STEP TOO FAR

The first contract

concerned an 8.0 MW steam

turbine generatorthat had

experienced bad vibration

problems

Wood energy constitutes

of household energy use in Nigeria

90%Source: allAfrica.com


Multi-GRAMMY winning performers Melissa Etheridge and Rob Thomasare getting ready to run the biggest races of their lives in a bid to help raisemoney for the largest global water initiative in history – the Dow Live EarthRun. A series of six kilometre runs, based on the average distance many

women and children walk every day to get water, will culminatewith water education lessons and live music perfor-

mances from the pair. Funds raised from the 100events across the world will benefit Global

Water Challenge, a coalition of non-profit or-ganisations working to bring clean, safedrinking water to millions of people.

RUNNING FOR WATER

influence their parents to take up en-vironmentally friendly options whilecarrying out their activities. This is

particularly important becausethe children need to take

part in actually secur-ing a safe planetand guaranteeingthe futurethat belongs

to them.As part of

the activities tomark the day, the chil-

dren were schooled on thefunctioning of climate friendlyapparatus like the solar cookerand the small biogas unitamongst others. Plays explain-ing the interaction of animalswith their environment, games andlearning material were also used toillustrate the important role chil-dren can play in combating climatechange.

Speaking to Eden on the side-lines of the workshop, the SES andDGFK officials stated that the aim ofthe two institutions is to build ca-pacities of people including children

Egypt aims to generate

of its power from windturbines by 2020

12%

Primary school pupils in the NorthWest Region have been actively en-gaged in actions that will eventuallylead to the reversal of the chang-ing climate that is ad-versely affecting theRegion. The actionis a joint initiativeof the Centre ForAppropriateTechnology(CAT-Cameroon), aBamenda-based NGOin partnership with SeniorExpert Service (SeS), Bonn, Germanyand the Society for the advancementof Culture (DGFK), Berlin Germany.

Launching the campaigndubbed “mind building and technol-ogy” in Bamenda on Friday 12th2010, the representatives of SES andDGFK, Nobert Pintsch, RenatePerner and Lutz Fluugge as well as theCoordinator of CAT-Cameroon,Victor Njini, explained that the initia-tive is aimed at building the minds ofchildren towards climate by educatingthem soon on some of the minor ac-tivities that affect the climate. By doingthis it is hoped that they will in turn

UPFRONT21

NORTH WEST CHILDREN JOIN FIGHT AGAINST CLIMATE CHANGE BY AMINATEH NKEMNGU

in learning how the use of sometechnology can be better than theothers. For the past nine years, theycontinued, SES and DGFK havebeen working with CAT to makeappropriate technology availableto people in the North West as ameans of discouraging the use offuel wood and the practice of other

activities that exacerbate climatechange.

During these nine years,technology such as indirect solaragricultural driers, small biogasunits, cooler water heaters, solar

cookers and solar oven windmillsamongst others have been success-fully produced by CAT and are al-ready in use. One of the strategies isto bring children in to begin learn-ing these activities that are aimed atcombating climate change.

The children were drawn fromprimary schools within the Bamendamunicipality.

Childrenare

the futureof climate

change

Source: Egyptian Wind Energy Association


Clean energy Unreliability

Lower electricity putput

Expensive construction process

Costly to surrounding wildlife

Noise pollution

Less space is needed

Renewable energy

Generate energy in remote locations

Wind Power provides

1.5% of total electricity

consumed

The US accounts for

32%of new installed

wind capacity in 2008

Advantages Disadvantages

Obtaining energy from the wind emits zero emissons into theatmosphere, providing a clean alternative to fossil fuels, which contribute significantly to dangerously high levels of atmosphericCO2.

Wind turbines take up much less space than what is requiredfor a single power station, and the surroundingland can continue to be used for otherpurposes including agriculture.

Unlike fossil fuels, the wind will not run out, and can provide theplanet with a limitless supply of “free” power.

In remote mountainous or countryside regions, utilising windpower can provide a much cheaper and convenient source of energy.

The main issue concerned with power from the wind, is that of its unrealiability. Wind strength cannot be controlled and in some

areas it is just not a viable source of power.

Wind power generates significantly less electricity than its fossilfuel equivalent, meaning more turbines are required to

generate the same amount of power. Wind turbines are alsohighly inefficient in terms of output capacity.

Wind turbines are costly to build with one turbine costingup to $1million per MW of nameplate capacity

installed.

With demand for renewable and cleaner energy sourcesgrowing it is likely that the need for land for windfarms will

increase, which will potentially damage a high percentage of local wildlife in the process. It is also estimated that each wind

turbine kills over 4 birds a year.

The noise produced from a singular wind turbine is similar tothat of a small jet engine and can be a cause of major concern

for those living near a windfarm.

Do the advantages outweighthe disadvantages?

19971998199920002001200220032004200520062007200820092010

200,000 150,000 100,000 50,000 0

World Total Installed Capacity (MW)

CurrentWorldwide capacity121,188MW

In-shore farms couldproduce up to

40x the world’s total electricity

Sources: Clean Energy Ideas and AWEA

UPFRONT22

UPFRONT22

WIND POWER: ADVANTAGES AND DISADVANTAGES


UPFRONT23

THESE 10 DISASTERS ALONE, TOTAL MORE THAN

3.8 MILLION TONNES OF OIL

GULF WAR OIL SPILL

1,500,000TONNES

IXTOC

480,000TONNES

ATLANTIC EMPRESS

287,000TONNES

FERGANA VALLEY

285,000TONNES

NOWRUZ FIELD

260,000TONNES

ABT SUMMER

260,000TONNES

AMOCO CADIZ

227,000TONNES

MT HAVEN

144,000TONNES

ODYSSEY

132,000TONNES

CASTILLO DE BELIVER

252,000TONNES

THE BIGGEST OIL SPILLS

Over 21,000 of the 11 million gallons of crudeoil that gushed from the stranded tanker ExxonValdez on the night of 23 March 1989 remain offthe coast of Alaska, a new study has discovered.Traces of the oil have been detected as far as724km away from the spill-site in PrinceWilliam Sound, and the toxic film that coatsAlaska’s shores remains a danger to wildlife, en-tire eco-systems and the lives of local people.

Writing in Nature Geoscience, a team ofscientists found that oil just a few inches downwas dissipating up to 1000 times slower than oilon the surface.

Despite Valdez not being up there with thelargest oil spills of all time, it is one of the mosthigh-profile and considered one of the worst en-vironmental disasters of its kind, covering morethan 2000km of coastline and killing thousandsof seabirds, fish and other water-dwelling crea-tures. The economic impact was significant,heavily impacting the region’s fishing industryand costing millions of dollars in clean-up efforts.

Most clean-up operations in the area endedin 1992 with the remaining oil expected to dis-perse within just a few years. However, a recentstudy has discovered that oil is disappearing at arate of just four percent each year, far less thanpeople expected, and compounds environmen-tal concerns. “The damage that [the spill] creat-ed is something beyond anyone's imagination,”says Michel Boufadel, Temple University’s Civiland Environmental Engineering chair, who hasjust completed research on why the oil persists.

Oil naturally ‘disappears’ through twoprocesses. As the tide rises over an oil patch,the water sloughs off bits of oil, which thendisperse into the ocean as tiny, less harmfuldroplets that can biodegrade easily. Secondly,bio-degradation occurs when bacteria or othermicroorganisms break down the oil as part oftheir lifecycle. However, both these processesare slowed when oil is trapped among sandgrains beneath the surface.

In their paper, the team who conducted the

TRACES OF EXXON VALDEZ SPILL CAN STILL BE FOUND BY DAN JONES

new study observed that the upper layer tem-porarily stored the oil, while it slowly and con-tinuously filled the lower layer, “You have a highamount of oxygen in the seawater, so you wouldthink that the oxygen would diffuse in the beachand get down 2-4 inches (5-10cm) into the lowerlayer and get to the oil,” says Professor Boufadel.

“But the outward movement of [freshgroundwater] in the lower level is blocking theoxygen from spreading down into that lowerlevel.”

The Exxon Valdez oil spill• 10.8 million gallons were spilt• The oil eventually covered 1,300 sq miles of

ocean• Up to 250,000 sea birds, 2,800 otters, 300

seals, 247 bald eagles and 22 orcas werekilled

• A study in 2007 found that more than26,000 gallons of oil still remained in thesoil around the contaminated area

Since the 1940s there has been over 60major oil spills, spilling over 1.7 billiongallons of oil both in the sea and on land.the top 10 oil disasters alone have con-tributed over 1.1 billion gallons.

Source: offshore-environment.com

, wikipedia


UPFRONT24

TSMA is a company providing ed-ucation and training in the careerdevelopment of employees in theconstruction, mining and buildingindustries. It is currently only pro-viding these services within theboundaries of SouthAfrica but has thecapacity to extendits services to therest of Africa.

“TSMA’sfocus is on im-proving thescarce skills short-ages in these industries toenhance the career advancement ofemployees,” says TSMA’s ChiefOperational Officer, KobusBezuidenhout. “Also, of crucial im-portance to the company is the en-hancement of the socialintelligence of the communities inwhich mining, engineering and

building projects take place.” TSMA endeavours to

maintain the highestpossible standards of

professional educa-tion, training and

development ethics to encourageuniformity of practices and proce-dures and to foster public faith in theprofessionalism of services provided.

The company has the exper-tise and capacity to provide or fa-

cilitate a wide range ofon the job educa-

tion, training anddevelopment in-terventions andis able to pro-

vide these withinthe context of re-

lated disciplines.TSMA’s Department

of Engineering Surveying is agovernment accredited providerof the National Certificate inSurveying. The unit standardscovering the qualification areclustered together into twelveone-week modules at a rate ofone module (five days) permonth, which allows candidatesto return to the employer forthree weeks of every month thusmaintaining productivity.

Morocco has announced an envi-ronmental commitment that willpropel the North African countryinto playing a major role inthe renewable energy in-dustry worldwide. PrincessLalla Hansa of Morocco wasjoined by high-ranking USand Moroccanofficials in

Washington DC recently to unveilthe plans. Shortly after the an-nouncement, Morocco was highlypraised by members of the US

Environmental ProtectionAgency (EPA) and the Earth

Day Network for the positivemodel it was setting. Moroccowill debut its NationalCharter for theEnvironment andSustainable Development– the first of its kind seenin Africa – to mark

Earth Day.

THUMBS UP FOR MOROCCO

TSMA: TECHNOLOGY, SURVEY ANDMINING ACADEMY

module per month retains job

productivity

1

In this quarter of Oil & Gas MENA, NGP&E Africa’s sister publication focused thefuture of Bahrain’s energy sector. DR. ABDUL-HUSSAIN ALI MIRZA, Ministerfor Oil and Gas, explains what Bahrain is doing to progress the future of its ex-ploration and drilling arenas and how it is leading change in the Middle East.

To read this article and more, go to www.ngoilgasmena.com and click on thecurrent issue.

For further information, please contact:Kobus Bezuidenhout email: [email protected] or cell +27 79 515 7540


TSMA Ad REP.indd 1TSMA Ad REP.indd 1 1/4/10 11:47:081/4/10 11:47:08

54

87

109

6

UPFRONT26

Companies in this issue are indexed to the first page of the article in which each is mentioned.

AfriWEA 102

AGR Petroleum 66, 67

Alphetec Engineering 20, 53

Artescan Lda 8

AT&T IFC, 1

Beksolar Ventures 4

Black Marlin Energy 62

Blum Centre for Developing

Economies 86

BP Group 16

Centre for Appropriate

Technology 21, 97

Chart Energy 68

CK Aerial Surveys 56, 57

CLM Positioning Solutions, 61

ConocoPhillips 124

Cyveillance 2, 3

Danagas 118

Desertec Industrial Initiative, 30

Dielectric-Spx, 40, 41, IBC, OBC

Dynamic Security Technologies

13, 78, 79

EAX 62

EDF Energy Renewables, 102

Efteg 117

Embassy of Denmark,

Pretoria 114

European Wind Energy

Association 102

FMC Technologies 6, 46, 47

GB Petroleum 42

HSE Management Ltd 120, 121

Humboldt State University 86

Integrity Control Systems

PTY 81

International Energy Agency 86

International Finance

Corporation 86

IPLOCA 76

Lawrence Berkeley National

Laboratory 86

Lighting Africa 86

The Lumina Project 86

Masaood John Brown 27

NAMCOR 54

National Oil Company of

Liberia 69

Pamtronics Ltd 98, 99

PICO International Petroleum, 50

PETROCI 110, 111

Polyguard Products 82, 83

PPSA 80

RPS 71

Sami 84, 85

SE-Solar Co 89

Sensus 28, 29

Shell 36

Siemens 112, 113

Skylit Tech Ltd 11, 90, 91

Solar Electric Power

Association 92

Solidlight Ltd 100, 101

Subsea 7 48

Tanzanian Ministry for Energy

and Minerals, 72

Total 58

Trail Surveys 26, 74, 75

TSMA, 24, 25

UNESCO 86

Wind Solutions Ltd 109

World Bank 86

TOP 10...

COMPANY INDEX Q2 2010

Trail Surveys (Pty) Ltd, Engineering SurveyingSpecialists, is the holding company within the TrailSurveys Group. The company provides multidisci-plinary surveying services in the fields of civil engi-neering and construction, hydrographics, mining,cadastral and architectural.

Capacity differentiates Trail Surveys frommost of its counterparts. Multiple teams, led byprofessionally qualified and experienced survey-ors, provide an excellent back-up service, as wellas the assurance that project deadlines are nevercompromised.

The company specialises in large infrastruc-ture development projects and its capacity andexpertise is enhanced by its goal, which is to em-ploy the largest number of qualified and PLATOregistered surveyors in South Africa. PLATO, isthe statutory body for the profession of survey-ing in South Africa, thus clients are assured ofquality service and advanced expertise. Thecompany is also committed to skills develop-ment and is a fully registered and accredited BEEorganisation.

TRAIL SURVEYS

The phenomenal growth of Trail Surveys is anindication of the quality of its work and its excep-tional service to an ever-expanding client base.

The company has the capacity to undertakelarge projects with proven continuity. TrailSurveys has an extensive and diverse portfolio ofclients that range from various government de-partments, municipalities and consultants inSouth Africa to contractors and civil consultantsin other African countries.

A wide range of expertise includes providingconsulting and/or construction surveyors onsite, bulk water-pipelines, power lines,roads/streets, detailed contour surveys and map-ping (architectural and topographical), dam vol-umes/sedimentation, high-flow and low-flowcalibration surveys, detailed high-accuracy sur-veys of hydro-weirs and structures, high-accura-cy monitoring of structures (roads and dams)and cadastral verification. High accuracy volumecalculation and field surveying for the corporateopencast mining industry will be launched earlyin 2010.

Source: www.cia.gov

OIL PRODUCINGCOUNTRIES IN AFRICADone by country, then amount of oilproduced per day in barrels:

21

3

NIGERIA2,352,000

ALGERIA2,173,000

ANGOLA1,910,000

LIBYA1,845,000

EGYPT664,000

SUDAN466,100

EQUATORIALGUINEA368,500

DEMOCRATICREPUBLIC

OF CONGO261,000

GABON243,900

SOUTH AFRICA199,100


MJB.indd 1MJB.indd 1 1/4/10 11:00:341/4/10 11:00:34

SENSUS (DPS) AD:25 June 9/4/10 15:02 Page 1

SENSUS (DPS) AD:25 June 9/4/10 15:02 Page 2

Africa has suffered from poverty and a critically poorinfrastructure for longer than many of us would careto admit. Its constant portrayal in the media as astruggling continent battling against the current isunfortunately largely one of truth. As other less eco-nomically developed regions slowly begin to take thestrain and pull themselves upward, Africa, as a gen-

eralisation, seems to merely survive. There are many philanthropic organisations currently working to help

people in various parts of Africa build a more positive future. But for all thehard work and dedication that these large hearts pump into the cause, it justhasn’t been enough. Africans need something to offer the world that its for-mer exports couldn’t – and they may have just found it.

With the earth’s desert regions receiving more solar energy in six hoursthan humankind consumes in a year, Africa has the potential to offer its pop-

ulation – and the rest of the world – a big bite of the renewable energy applethat is solar power. More specifically, certain African countries have the priv-ilege of owning some of the world’s finest sun-harvesting land, affording themthe opportunity to invite organisations and investors onto the continent to doprecisely that: harvest the sun’s power to produce a renewable energy sourcethat can then be delivered around the world. The jaw-dropper? It would takeup less than one percent of the Saharan desert to do so.

The Desertec Industrial InitiativeGerhard Knies, co-founder of the Trans-Mediterranean Renewable

Energy Cooperation (TREC), helped set up the Desertec Industrial Initiative(Dii) in 2008 to realise the ‘Desertec concept’ of obtaining a sustainable sup-ply of electricity for Europe, the Middle East and North Africa up to the year2050. It consists of a consortium of 12 companies, headed up by Munich Reand incorporated under German law. The concept showed that a transition

COVER STORY

TIME TOSHINEAs the hunt for renewable energy sources heats up, an initiativethat could change the face of North Africa and the Middle Eastintroduces itself to the world. By Nick Pryke

COVER STORY v2_mar10 13/04/2010 09:31 Page 30

lation base. It aims to do so by also bringing into play all relevant social, po-litical, industrial and regulatory aspects pertaining to both the concept andthe continent alike. Not only will this bring Africa into the spotlight in termsof what it can do for renewable energy worldwide, but perhaps more impor-tantly, it will form bonds with multinational organisations who can hopeful-ly advise and aid Africa in setting itself up for the future.

Of the dozen multinational founding companies of the initiative – withtheir comprehensive technological prowess and dream portfolio – Siemensseems to have taken on a significant role in the context of planning, due main-ly to its expertise in long-distance power transportation.

Rene Umlauft, CEO of the Renewable Energy Division of Siemens AGEnergy Sector, highlighted just how much experience they have in this disci-pline: “What was only a vision 30 years ago is at most only a technologicalchallenge today; a challenge we can master. We can generate energy in thedesert. Today, we can transport power over the power-highways over longdistances with relatively low losses. We would not be Siemens if we couldn’tface such jobs and challenges – both economic and technological.

“We want to – and we will – make power from wind and the sun afford-able in the future. We are currently designing such a project in China, trans-porting power over 1400 km from a hydro-electric power plant to a large city,with only a few percent in power loss.”

Indeed, Siemens will have an important role to play, not only in export-ing power from North Africa to Europe, but also in linking up the relative in-dividual sites; while the ‘plant’ is referred to in the singular, it is in fact anetwork of smaller sites scattered across a plethora of North African coun-tries. It is here that the importance for integration and understanding at a na-tional government level will need to prevail.

Jamila Matar, a representative for the League of Arab States, spoke at a con-vention in Munich in July of last year: “The League of Arab States is very confi-dent that the Desertec initiative will certainly add to the previous contributionsin the field of promoting renewable energy, reducing carbon dioxide emissionsand reducing the gap between conventional resources of energy and renewableones.” Laila Georgy, representing the Ministry of Energy for Egypt, furtherbacked the initiative, stating: “Egypt enjoys the very high potential of renewableenergy sources, especially with wind and solar. We very much appreciate this ini-tiative and wish all the best of success and fruitful outcomes to all involved.”

ScepticismDespite such positive feedback, the involvement of a consortium of pow-

erful global companies leads to questions about whether they are using theinitiative for their own benefit rather than that of the Middle East and NorthAfrica region. But the Dii has remained as transparent as possible on the sub-ject, and admits that while the MENA region is currently being exploited forits oil and gas, solar energy is practically boundless and harnessing it will con-tribute to the technological development of the region.

The Dii makes it explicitly clear that it is left to the sovereignty of the pro-ducing countries as to whether they decide to use the clean energy to meettheir own demands first and finance this energy supply through the profitsthat they earn from selling or dispensing with the fuels that are thus saved, orsell the energy to Europe and wait until the relevant technology becomescheaper. In the light of the enormous potential that solar energy entails, itwould be relatively easy for the countries in question to take advantage of bothpossibilities at the same time.

to a competitive, secure and compatible supply is possible using renewableenergy sources and efficiency gains, with fossil fuels being used as a backupfor balancing power.

Paul van Son, CEO of Dii, describes their objectives: “Our aim is to pavethe way for large scale production of electricity from sun and wind in thedeserts. Of course, this shall be both for the benefit of the MENA countriesand Europe on the one hand and for our shareholders and partners on theother. Energy from the deserts is inspired by the Desertec concept. Our ini-tiative has emerged from the private sector that is determined to bring thisconcept into reality and to create new business chances.

“What we ultimately aim for are substantial, feasible investments in thisfield in order to contribute to security of energy supply, climate protectionand socio-economic development. We won’t do this alone, but instead willwork in close cooperation and partnership with the authorities, local com-munities, international industries and many other initiatives.”

According to GreenPeace, “If the solar industry continues to develop atits current rate, concentrated solar power (CSP) could meet up to seven per-cent of the world’s power needs by 2030 and one quarter by 2050.” The or-ganisation also claims that the solar power sector could step out of the shadowof other renewable technologies and establish itself in the sustainable powergeneration industry as one of the big players.

Talking to CNN, Knies couldn’t have agreed more: “We need a new, so-called ‘operating system’; a survival strategy for growing humanity on a finiteplanet. In a word: sustainability. Of course the earth can support 10 billion

people with food and shelter, but not with energy from fossil fuel sources.That is why we need the security of a complete transition to near-infinite andclean energy systems. The most powerful and fastest possibility lies in usingthe biggest, but least used, source of clean and unlimited energy on the earth.That is solar radiation and the deserts.

“I think it’s insane to organise collective suicide. The fossil fuel systemand our economy are doing that right now. We cannot survive in this way.My guess is that solar energy will be 40 to 70 percent of the total energy con-sumption, 30 to 60 years from now.” Knies also has an unequivocal belief inhis mission to help poorer countries, such as those in North Africa, by offer-ing them the chance to develop a new source of income by selling clean elec-tricity. “For Europe, this would be one of the cheapest sources of cleanelectricity. It’s a win-win situation between the two,” he said.

While this isn’t the first attempt at creating a large scale, commercial CSPplant – the first being opened in Seville, Spain, in 2007, followed by a more re-cent plant in Rwanda – the Dii proposes to serve a significantly larger popu-

32 www.ngpowerenergyafrica.com

“Of course the earth can support 10 billionpeople with food and shelter, but not withenergy from fossil fuel sources. That is why

we need the security of a complete transitionto near-infinite and clean energy systems”

Gerhard Knies


Conversely, others question the dangers of depending on economicallyunstable countries in MENA for such a large project, to which the Dii replies:“It is more likely that parties which are not mutually dependant would be-come involved in conflicts with one another than parties which are interde-pendent on one another. By 2050, the South Mediterranean region will haveroughly the same economic power and population as Europe and hence sim-ilar energy requirements.

“Isolating this region would be much more dangerous for Europe than ajoint effort towards a sustainable energy supply system. On a global scale,there will be a change of paradigm in terms of political security, which will re-place the conflicts increasing worldwide over limited resources with a jointinternational effort to harness renewable resources.”

Under the proposal, CSP systems, photovoltaics systems and wind parkswould be located on 6500 square miles of the Sahara Desert, surrounding theouter perimeter of the Saharan, with fewer sites located in the central Saharanlinking up to form the solar grid. However, taking into consideration thecheaper costs of wind power over those of solar, why isn’t wind energy beinggiven the spotlight?

Balancing out wind’s cost advantage is the disadvantage of control.Wind energy is not controllable according to demand, making it less valu-able than solar energy. In addition, wind energy potential is not nearly as

large as solar energy potential: its most common use is as a cheap source ofenergy for local energy requirements in MENA, and it can’t fulfil enoughof the potential for a site as large as Desertec is planning. Considering thesupposed ‘cheaper price’ of wind energy, the project would ironically be-come more expensive if it was to utilise wind plants as the high-voltage di-rect-current (HDVC) transmission lines being used would only run ataround 50 percent capacity.

The same can be said of photovoltaic energy as an exportable powersource: only 25 percent of the HDVC transmission capacity would be utilised.It then becomes clear that together with European domestic sources, solar-thermal power plants can deliver the controlled energy required as well as thebasic supply, thereby dramatically increasing the utilisation of the HDVCtransmission lines. The bottom line for Desertec: wind plants should be inte-grated as part of a larger solar-thermal plan if the renewable energy resourcesof the Saharan are to be fully tapped into.

And so it is. While wind energy sites would be inefficient on their own ina project of this magnitude, Dii also understands their importance in thegrand scheme of the concept, and areas along the Atlantic coast and the RedSea are perfect regions for wind plants to thrive. There is no bias based onsolar over wind however, rather the environment dictates the methods –something Dii is all too aware of.

www.ngpowerenergyafrica.com 33

Imag

e: T

REC

The Desertec industrial initiative supergrid proposal

Concentratingsolar power

Photovoltaics

Wind

Hydro

Biomass

Geothermal

CSP collector areasfor electricity

World 2005

EU-25 2005

MENA 2005

Trans-CSP mix EU MENA 2050


carbon dioxide reduction is the decisive factor; this is after all one of the mainreasons for finding and forging a future for renewable energy. In addition, theMENA region would also gain from the avoidance of further human and fi-nancial losses through environmental catastrophes that are triggered when fos-sil and atomic fuels continue to be combusted to harness energy.

These are merely two good reasons in a sea of advantages: Europe canoffer plenty to the MENA region in return for imported clean power. Perhapsone of the most important socio-economic factors is the development of aneconomy based on know-how and technology, thus allowing these countriesto overcome underdevelopment and poverty in the mid- to long-term.

So what about the rest of the world? What about Central and SouthernAfrica? How would the introduction of Desertec to the North affect theSouth? These are all questions being asked by locals and CEOs alike. And theanswer is simple: Desertec hopes to provide for all in the long term.Renewable sources of energy in general and solar-power plants in particularare just as suitable for the rest of Africa, which can also profit from the cost re-ductions in the North. The Desertec concept is also being promoted in China,Australia, America and India for the realisation of “clean power from deserts”.

But means are limited for the Dii, so in order to provide wherever possi-ble, it is building regional Desertec networks worldwide that can profit fromits know-how and research. Indeed, while the focus is currently on MENA,the Dii hopes that the future of renewable energy will be inspired by theDesertec concept on a global scale – a hope that will be one step closer whencontracts for the Desertec supergrid are signed in 2012. Sceptics and critics ofthe programme are sure to remain and battle the biggest initiative of its kind,but for North Africa it could very well be time to shine. n

Helping the peopleIf the logistical elements of the initiative are half the battle, then the socio-

economic elements certainly remain the other half. “Just think about the nu-merous investments and economic activities that will be triggered byDesertec,” asserts van Son. “The construction and maintenance of manypower plants, grids and related infrastructure will create jobs in the MENAregion and they will add to prosperity.

“This will bring new perspectives for many people. Our approach withDesertec will of course in the first place to offer access to clean energy. Alongwith the implementation, it will bring technology transfer.”

For some countries, this will lead to the reversal of capital flows in the en-ergy sector, which will afford them the opportunity to sell power and gener-ate income rather than having the need to buy coal, oil or gas. Other countrieswill no longer need to exploit their fossil resources, and thus create the optionof leaving these resources to future generations without loss of income. WhileAfrica is still long off the mark in this context, it is a hope of the Dii that atsome point in the future Africa will also be able to achieve a similar situation.

“By 2050, the demand for electricity and drinking water in the MENA re-gion is estimated to become as high as in Europe,” continues van Son. “Largeamounts of energy will be needed to meet this demand. Desertec will, thus,ensure a substantial part of this energy need and it will contribute to improvedliving conditions for many people.”

But the question still remains: does it make sense for Europe to be pro-moting the development and expansion of renewable energy sources in MENA?Ultimately it remains largely irrelevant whether the carbon dioxide emissionsarise or are avoided in Europe or the MENA region. In the end, the speed of the



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Omotowa ed_mar10 13/04/2010 08:48 Page 36

The Niger Delta is not any easy place for an internation-al oil company to operate. A continued campaign ofbomb attacks, kidnappings and illegal oil bunkeringwere most likely a factor in the recent decision by ShellPetroleum Development Company of Nigeria Limited,Total Exploration and Production Limited and NigeriaAgip Oil Company to jointly transfer a 45 percent stake

in three production licences and related equipment in the Delta to a consor-tium led by two Nigerian companies.

Shell, in particular, has had a rough time in Nigeria. A court case arisingfrom the execution of nine anti-oil campaigners in 1995 was settled out ofcourt by the company only last summer. Shell agreed a US$15.5 million set-tlement, but denied any wrongdoing and called the payment part of a “processof reconciliation”. The case, brought by relatives of the executed campaign-ers, alleged that the company was complicit in murder, torture and otherhuman rights abuses by Nigeria's former military government.

Some sources had reported an improving security situation in the wakeof Movement for the Emancipation of the Niger Delta’s (MEND’s) 2009ceasefire agreement with the federal government, but MEND recently sus-pended the ceasefire.

Given this troubled history and the current dangerous working environ-ment, working in health and safety for an oil company in Nigeria must bequite challenging, to say the least. To gain some firsthand perspective on theissues involved, Power & Energy travelled to January’s Next Generation Oil &Gas Africa summit in Nairobi, where we caught up with Shell’s Regional VicePresident of Health and Safety Infrastructure and Logistics, Babs Omotowa.

Omotowa, who is responsible for much of the company’s logistics activ-ities, including moving people and equipment to locations on land and off-shore, takes his responsibilities seriously. He points out that Shell has operatedin Nigeria for more than 50 years and during that time has built up a strongcommunity relations strategy, building schools and clinics, providing educa-tion as well as information on HIV programs and agriculture initiatives.

“Initially we were more about just building capacity into the communi-ty, but now we are looking at developing the communities to grow capacityso that they can provide support to the oil and gas industry, developing theirskill sets, making sure that they can form companies and provide services thatcan be useful for the oil industry,” explains Omotowa.

“We’re making good progress on that as well. We have a number of ex-cellent examples where we’ve been able to get communities to come togetherto replace traditional services that were provided by foreign companies andwe’ve been able to get local communities doing that. The big challenge in theDelta is that a combination of solutions is required. Community support pro-grams on their own alone are not enough; the big challenge is infrastructuredevelopment, and that’s a key area that we’ve been looking at, along with thegovernment. We contribute a significant amount of money, and spentUS$200 million dollars in the Delta in programs for the communities.”

Striking the right balance between international oil companies (IOCs)and government is key to ensuring long-term success in the region.Omotowa defines Shell’s current relationship with the Nigerian govern-ment as excellent, although he does compare it to that of husband and wife– not always easy, but one of longevity nonetheless. He gives the exampleof the visit of Peter Voser, Shell CEO, to Nigeria, and his meeting with thePresident, and how following successful interactions Shell remained a pre-ferred partner there.

“In the last few years we’ve been going through the reform the govern-ment is working on,” Omotowa says. “This is to put a new industry build forthe petroleum sector that is supposed to do a lot of things to create a nation-al company that would be quite competitive, which is a good thing. Part of itincludes looking at the involvement of the national oil companies in joint ven-tures, which has been a challenge for many years.

“These ventures are being looked at as opportunities, fiscally too, to bringtransparency, to bring in indigenous companies also, and to be able to growcapacity. We support those strongly; the challenge remains how to make surethat the bill is well balanced in a way that the investments can still continue toflow into Nigeria.


Power & Energy talks to Shell’s Babs Omotowa about the challenges ofworking for a huge international company while keeping the interests oflocal communities at heart.

Babs Omotowa is Shell’s Regional Vice President of Healthand Safety Infrastructure and Logistics.

“We think climate change will definethe future; the easy oils are gone,and there will be a lot more in thedifficult terrains”


veillance is one way the company is doing this, as well as looking at more cre-ative ways in which to involve the communities.

“We are confident that this two-pronged approach of working with thecommunities and the local government to secure those lines and giving themsome incentives to make sure they feel an ownership and a sense of belongingwill help solve that. As well, we are working with the government to make surethat for criminal element aspects those are dealt with by the police,” he says.

Regardless of location, there are issues that are facing almost every com-pany, including the global skills shortage, and Omotowa sees this in Nigeriaas both a challenge and an opportunity. The country is home to 350 millionpeople, allowing a lot of scope for developing local people into skilled work-ers. “We see the challenge in being able to attract good technical skills; we arevery focused on this area and we have a lot of things we are also doing in termsof intervention,” he explains.

“We have a learning village source in Nigeria where we take very goodgraduates out of the universities and put them through technical training be-fore we bring them into the organisation. That has helped to improve on theability of technical skills, which also made available for other companies; wedon’t just train them for ourselves, we train them for much more and improvethat across the country. “In terms of the impact of the political situation thebig issues regard the equality of the universities and how the technical cours-es in the universities continue to teach from the right equipment, the right lec-turers to be able to come out with higher quality graduates. That’s an area thatthe government continues to look at as well.”

The conversation turns to the topic on every industry executive’s lips: theexpected increase in world energy demand. According to the US Energy

“We’re working together on the environment especially,” he continues.“We want to see how to improve on a lot of the challenges we face. The envi-ronment side faces the challenges of flaring and oil spills.”

Clean up and recovery of spills is done quickly, as well as continuing towork on the challenges of flaring. Shell has recently put in facilities for more than60 percent of its flaring, and what is left is being worked on. Omotowa states thatfunding has been one of the biggest challenges: “The sort of money we’re look-ing at for the projects left in the region is about US$3 billion to US$4 billion.We’re working with the government to make sure we can get ourselves to thosefunds, and then to be able to get the access into the areas to be able to carry outthe projects, because access is another problem which we’re working on with thegovernment. There will be a new target date for flares, which we will also workon with the government on to make sure we can progress on that as well.”

Political instabilityIn order to overcome the challenges created by political instability in the

country, Shell is working closely alongside the government to create a tighterstructure of law and order. The government is installing a lot of policing andsecurity forces to guide and protect the lines. But, as Omotowa explains,“With 6000 kilometres of pipeline there’s a limit of how much policing youcan do.” This is the reasoning behind the company’s approach to integratingcommunities and local government. Community workers in teams of sur-


Above: a Shell-owned pumping site in the Niger Delta region ofNigeria. Left: a Shell-owned oil processing plant. Nigeria producesnearly two million barrels of oil a day, nearly 10 percent of theUnited States’ annual supply.


Information Administration, world marketed energy consumption is pro-jected to rise by 44 percent by 2030. Ensuring that demand is satisfied is thecrux of company strategies being formulated the world over. As the people ofChina, India and even Africa increase their quality of life, supply will struggleto keep up, especially when the easy onshore oil is gone. Many observers pre-dict an increased use of natural gas to pacify this demand.

“Climate change is the key that plays into the gas issue,” says Omotowa.“I believe this will become defining to us in the future and will really definewhat we use. Obviously, natural gas is the cleanest of the fossil fuels and thebeauty of it for us in Africa is that we haven’t even discovered all of the gas.Increasingly we’re starting to see more gas discoveries, huge ones.

“The challenge will obviously remain to balance the domestic gas re-quirements and the export opportunities. For many countries in Africa, theexport opportunities and liquified natural gas opportunities are key for therevenue of the nation. When you look at some of the oil producing countriesin Africa, oil represents more than 80 percent of their revenue. So you needto continue to grow that. But the key as well is to be able to have gas for do-mestic use, power generation, industrialisation and transportation.

“The key is knowing how to develop the right commercial framework, interms of pricing, in terms of agreements and in terms of securitisation thatwill enable investors to come and develop these huge reserves and be able toput in the infrastructures that are required. You do need quite a lot of infra-structure if you are doing LNG, and the key is getting this infrastructure de-veloped to be able to bring domestic gas and power to the people. That is thekey thing for us in Africa because power becomes a key lever for developingany economy. And the more we can get that working in African countries, themore we’ll start to see the industrialisation that we require.”

Alternative energyThe issue of climate change is top of mind in almost every industry, oil

and gas included, and the international community is carefully watching thedeveloping world to see how it is responding. Gas is the cleaner approach, andis incorporated into Shell’s sustainable strategy. Omotowa explains how thecompany has been focusing on alternative energies. “We’re probably the mostactive of the oil companies in terms of looking for renewable solutions,” hesays. “We have invested billions in R&D in terms of renewables and we havemade huge progress in quite a lot of them.”

He explains how the company has made huge progress in its gas opera-tions, specifically its gas-to-liquid projects, and regards itself to be leadingfrom the front. “It’s not unlikely that by 2025 we may be more of a gas com-pany than an oil company. We’ve continued to do quite a lot in areas such ashydrogen and we continue to look at interests in that area, as well as how tomake renewable energies such as solar and wind and how to make them com-mercially attractive.

“In today’s technology, it’s still a lot more expensive to get electricity fromthese sources. We’ve seen the growth of renewables and we’re confident thatthey will continue to grow over time. A lot of this still depends on the gov-ernments, because it comes down legislation, and you need quite a lot of sup-port to research in these sorts of areas, and you need to know what fiscalregimes government put on some of these alternative sources.”

Omotowa depicts Shell’s strategy as comprising three hard truths: thefirst being supply and demand, with the other two looking into possible sce-narios in the future, one being called scramble, the other blueprint. “In the

scramble scenario, which is where countries are looking for energy sourcesbecause they require them to develop, we believe you might see countries evengo as far as going for coal, which is the dirtiest energy. But in the blueprint sce-nario, you have much more government involvement looking at how to createthe environment for CO2 friendly sources, and you see more renewables possi-bly more carbon capture, carbon storage and all those other things.

“At the recent Copenhagen climate change conference, quite a lot was ex-pected. I’m not sure we saw as much as we thought should have come from there,and I think the government and the culture define how to move forward. Thatis where the difference will be made on alternative energies,” explains Omotowa.

The Nigerian government has shown its support for renewable energies.The Minister of Environment attended the Copenhagen summit, along withother senior officials, and the country’s national oil company has a whole de-partment dedicated to green energy. Looking at its agricultural potential, Nigeriapresents itself very much as a green country. However, Omotowa remains du-bious not on the government’s commitment, but on how fast they will move onthis strategy.

A further challenges to the oil and gas industry in Africa, for both IOCsand NOCs, is the emergence of China as a player on the African stage. Forboth, this means greater competition, but is it a serious threat? Omotowamaintains that it is not.

“We are very clear in Shell that we provide a superior value added for gov-ernments in Africa. We’ve been here for quite some time, we’ve provided sig-nificant revenue for countries where we have been. We have broughttechnologies into areas that I think are superior to what the Chinese can bring.We pride ourselves on being a leader in technology, particularly when you go tothe difficult, unconventional, deep offshore. We also bring a lot in what we doon local content development. We’ve brought a lot of industries into the regionand we’ll do more of that. And when you think of local people development aswell, we’ve been quite superior in that.

“There is a short/long term situation here. The Chinese obviously haven’tinvested anything significant in Africa for a long time. So it’s easy to come andmake promises and try to entice nations, but we do not believe this is sustainablecompetition, irrespective of the amount of money they are promising. Until yousee that on the ground, they’re still just promises. I also worry about companiescoming in and promising to build infrastructure and power stations, to build somany things that are government areas, then I worry that their intention is to tryto replace government in some shape or form.”

The entrance of China, the need to begin producing energy from renewablesources and the rising global energy demand are applying pressure to an indus-try already laden with the burden of security issues and offshore challenges. AsOmotowa says, it would be unsurprising if in 20 years time Shell no longer ex-plored oil but converted its strategy to 100 percent gas production.

“The future in oil is gone. We need to move more and more to deeper off-shore, which requires a lot of technology and the investment costs are quite sig-nificant. Unconventionals would also be an area that we’ll start to look at moreand more, so the future will be about getting the more difficult oil out using tech-nology to increase the recovery from existing fields that we have. We think thosewill be key to the future.

“We believe the CO2 issue will also be very key and topical into the futureand we are confident that that’s an area we are already making huge progresswith our technology. We think climate change will define the future; the easy oilsare gone, and there will be a lot more in the difficult terrains,” he concludes. n




INDUSTRYINSIGHT

Telecom industry leaders estimate that 2.4 billion inhabitants of planet earth do not have access to wireless communications. Energy industry experts estimate that 1.5

billion people do not have access to electricity. An over-whelming majority of these people inhabit the rural areas of developing economies. Th ey are clearly at a disadvantage as the twenty-fi rst century unfolds – both personally, in terms of their own lives and aspirations and nationally, as it hinders the economic development of their countries.

SPX Wireless has developed a new, ground-break-ing antenna technology that increases reach and cover-age by up to ten times compared to current antennas, thereby signifi cantly reducing OPEX. Th is disruptive innovation enables telecom network operators to deploy services to ‘greenfi eld’ areas rapidly and profi tably. Re-cently completed fi eld-testing in India brings the new antenna system closer to worldwide launch in other parts of Asia, Africa and the rest of the world.

However, more than half the areas that could ben-efi t from wireless communication will be prevented from taking advantage of this new low-cost form of communication because they are off the electric grid. To that end, SPX Wireless is currently exploring alter-native energy sources to power the antennas reliably and inexpensively.

Th is is a very good example of SPX’s approach to innovation. Although, or perhaps because, the com-pany is made up of a multitude of individual businesses organised into customer-facing affi nity clusters, it has both the necessary awareness of the need for integrat-ing technologies and the ability to explore integration opportunities across its own business units. In general, only the fi rst condition is necessary; the second may be acquired outside the core organisation if it doesn’t already exist within the organisation.

Th e need for integrated technological solutions should not prevent companies from seeking to innovate in their fi eld, regardless of how narrow that fi eld may be. We must remember that integration benefi ts all the eventual partners – those who seek to complement their own solution by turning it into a viable market-ing opportunity as well as those who can contribute the ‘missing part’. Aft er all, the latter stand to benefi t

A technological approach to innovationTim Wells offers an insight into the integrated technological approach to innovation.

greatly from the additional revenue that will be coming their way.

Partnering can be as benefi cial in the product devel-opment stage as in the marketing (nowadays referred to as ‘go-to-market’) stage. Th e only diff erence is that the latter is more common than the former. SPX is taking the approach that the quest for good solutions drives the entire system of innovation. Th erefore, one should start from the end-point and ask: ‘What is the best solution going to look like?’ If the company does not have all the technical capabilities required for fashioning the best

possible solution, it should seriously entertain joining forces with those who have those capabilities.

In our case, a good solution was not simply an an-tenna that covers a wide area but, rather a high-coverage antenna that can serve all the members of the intended market regardless of whether they live on- or off -grid. Compound requirement inevitably focused attention on alternative energy as a prerequisite for a successful product for off -grid customers and for the network op-erators who would bring wireless service to them. Th e African market is one of the primary areas of the world where the integrated solution of wireless service pow-ered by alternative energy is going to make its mark.

Tim Wells has extensive global leadership experience. He has led organisations at GE and is leading SPX’s efforts in the wireless telecom industry. He has focused on uncovering innovative ideas, shaping them into viable products and launching them successfully in the global market. Wells holds degrees in Finance and Marketing from Boston University.

“Th e need for integrated technological solutions should not prevent companies from seeking to innovate in their fi eld, regardless of how narrow that fi eld may be”

Dielectric.indd 40Dielectric.indd 40 13/4/10 09:05:3013/4/10 09:05:30

DIELECTRIC AD.indd 1DIELECTRIC AD.indd 1 1/4/10 10:46:211/4/10 10:46:21


SMALL FISH,

BIG POND

EXPLORATION

Lambert.indd 42Lambert.indd 42 13/4/10 09:08:5713/4/10 09:08:57


The discipline of oil and gas exploration is innately driven by money; entry costs into countries need to be paid; resources, equipment and employees need to be taken care of; and of course there are profi t margins that need to be hit. But perhaps the most surprising context money currently takes in the realm of explo-ration is in the relationships held between small and larger com-panies. As Managing Director of GB Petroleum, Robert Lambert

not only appreciates this dynamic, he understands it.Formed in the second half of 2005, GB Petroleum functions as a relatively small

exploration-oriented company with the help of Lambert and a number of his former Conoco colleagues. Having raised the necessary funds, the group started acquiring expiration licenses with a view at one time of seeking a market listing or merger with a larger company once they had established themselves. However, things turned out to be much more diffi cult than they had originally planned.

“Th e credit crunch hit our long-term planning quite hard because our business model depends on regular injections of investment in equity capital, which eff ectively disappeared for two years. Fortunately, we managed to do a deal with a small private fund who acquired us in October of last year and we’ve been recapitalising and restruc-turing the company since that time with a view to getting back on track and grow-ing as much as we can and making some acquisitions again. We’re emerging from the fi nancial crisis that’s affl icted every small company and we have more confi dence now in the future.”

Lambert’s main task is to balance GB Petroleum’s portfolio, which is extremely orientated towards exploration. Currently, they hold nothing close to production, al-though Lambert is quick to highlight an interesting gas prospect with hopes for drill-ing later this year that could be on stream within 18 months. “Th at’s not on a short enough time horizon for us,” asserts Lambert. “We would like to have something a bit more immediate. We’re evaluating a number of production opportunities in our focus area, which happen to be Africa and Europe. Our current assets are in North Africa – where we operate both in Tunisia and Morocco – and non-operated interests in Poland and the UK.

With major exploration players outsourcing to small companies, Robert

Lambert discusses what the future holds for GB Petroleum.

ti l



the resources you have. Th at’s quite a challenge, but managing the foreign operations in remote areas is very similar to running a small company.

“A major multinational is composed of perhaps 20, 30, 40 diff erent small businesses aggregating into a multinational. Part of that sets you up quite nicely experience wise – and of course you get to travel the world and experience diff erent cultures and business environments – so you learn a lot about the business that way.”

Yet from Lambert’s statements, and given the continuing economic crisis, the question still remains: Why North Africa? Surely, with the var-

ious levels of instability that come with the territory – not to mention the heightened levels of risk for smaller companies – taking

the safe option would be a priority? Well, as it turns out, it’s completely the opposite.

“We’re based in London; we’re a very small team so to avoid what we would call resource stretch we focused on opportunities within a short fl ying time of London. We also wanted to focus on areas that we had prior ex-

perience in – that was very important. In addition to that, areas where you can access exploration acreage at low cost,

because being a small company you can’t pay large bonuses to governments and you can’t pay high entry costs. You have to negoti-

ate your way into some licenses.“Low entry costs and barriers are important considerations, but

proven geological producing areas were also a key. Hence, looking at the UK, Poland and Tunisia, we built a portfolio that had a balance of oil and gas, onshore and off shore. We realised we probably needed a little bit more romance in our portfolio with a higher potential – although that

Economics will drive

technology

“We have a little bit of a geographic spread. Th at was done deliber-ately for portfolio diversifi cation – to spread our technical, commercial and political risk – but only from an exploration point of view. Having established what we would call a ‘footprint’ in each of these countries, it would be benefi cial if we could build within each country and add some more interests. Th at’s where we’re primarily focusing our acquisi-tion targets.

“Central and Eastern Europe and North Africa would be our fi rst choice; we’re looking elsewhere in Africa too. My own personal experi-ence has been eff ective all over the world, perhaps with the exception of South America. Th ere’s nothing stopping us looking anywhere, but the commercial or technical reality is that if we’re London based, there is a certain amount of work that a small team can do, so we tend to look close to home if we can.”

Having previously worked for major multinational upstream, downstream companies, Lambert’s experi-ences have certainly moved him to opposing ends of the spectrum now that he’s with GB Petroleum. However, despite the change of scenery, Lambert maintains that there are still interesting similarities between the two confl icting environments.

“Most of my career was spent internationally with Conoco in various parts of the world: Indonesia, Egypt, Baku Lagos; each branch operates almost like a stand-alone business. You get used to levels of responsibility and managing your assets in remote environments, almost independent of the head offi ce. Th e major diff er-ence, of course, is that when you’re with a major multinational, once your budgets are set the money is guaranteed, whereas with a small company that’s just not the case. You have to fund all your activities fully each year and you can’t aff ord cost or resource overruns; you have to manage with



“When government takes are very high and oil prices are lingering in the US$50 to US$80 range, you can see very quickly that it’s not the oil companies that are making a lot of money; there is an enormous leakage of value in the energy chain. But sooner or later that will catch up. When-ever supply gets out of balance with demand, then economics steps in to restore it – although it does lead to short-term imbalances. Long term, of course, it has to be a better solution, but technology will defi nitely come to the rescue of the energy crisis as and when it happens.”

On the topic of long-term planning, Lambert has bright hopes for building a successful and independent oil and gas producing company, although it remains unclear whether or not it will eventually be listed

on a major stock market or traded into a larger venture. However, in order for this to become a reality, Lambert is all too aware of the need to acquire some producing assets and generate an early cash fl ow for the company so they can break the dependence on external fi nancing; he also hopes to use a fi stful of luck through their exploration programme in order to grow organically as well as by acquisition.

“It’s not a unique story by any means. A lot of small companies go that route and some are successful, some are not. You only have to look at the general examples of Tullow and Kern to see the successful ones. What’s less known are the unsuccessful ones. For every success-

ful story there are hundreds of failures. Th en there’s the middle ground where you’re partially successful and you’re absorbed into a bigger entity; I see that as probably a more likely future for the oil industry. Consolidation always happens when the majors run out of reserves and they buy their reserves elsewhere – the independents usually provide that target. Th is then spins off more new startups that start the whole process again.

“It’s a continuous cycle of business renewal, but it’s always been that way. When you look back over history it’s always happened; not just in the oil industry but in any industrial sector. I don’t see the current en-vironment being any diff erent. We like to think it’s because we’re creat-ing our own future, but I think if you step back and just look at what’s happened, there’s a clear path that does emerge, and it’s all driven by economics. Economics will drive the technology.”

In recent times, the joke seems to be that the outsourcing of services in any industry is becoming the norm. Well, this isn’t too far off the truth when it comes to looking at the way major companies seem to be ‘out-sourcing’ their exploration to the smaller man – such as GB Petroleum – as they take risks in areas that the majors just won’t. It’s only when those resources are found that the majors will step back in. Th e bottom line: without the smaller companies, the sort of reserves that we continue to fi nd would most probably still be hidden away.

Robert Lambert is Managing Director of GB Petroleum, as well as one of the company’s founders. He holds a BSc and a MBA, both from Aberdeen University. Lambert has worked for nearly 40 years in the international petroleum E&P industry, primarily with ConocoPhillips, from which he retired in 2003.GB Petroleum was established in 2005 by a group of former ConocoPhillips executives. Since then, the company has grown steadily and it was recently acquired and recapitalised by Nimbus Oil and Gas Group Ltd.

comes with a higher risk – hence we went to Morocco.”Indeed, while Morocco doesn’t have a lot of oil and gas proven to

date, the potential is defi nitely there. Its technical parallels with the rest of West Africa, the other side of the Atlantic and off shore Canada have all proved geologically similar, forcing the conclusion that Mo-rocco could provide some very good petroleum potential. Th e risk is, of course, far higher – but so too are the rewards. For all the countries mentioned by Lambert, the fi scal terms certainly shine; low costs, solid potential and a good proximity to London work wonders for GB Pe-troleum when combined with the relationships that have already been established throughout years of working in the industry. Yet, given all these factors, the continuing international focus on climate change has undoubtedly had an eff ect on strategy.

“Being a small team,” continues Lambert, “we tend to operate from the head offi ce as much as we can. Not necessarily as a result of environmental concern, but cost concern if nothing else, we limit travel and make use of teleconferencing wherever we can. But, it has had a spin-off benefi t for minimising our own impact. I’ve had very good training through my career with Conoco in being very environmen-tally aware and looking at sustainability too, so that is factored into everything we do anyway. But being a very early exploration company, we’re fairly prudent in what we do.

“In operational terms, we do insist that our contractors pay proper regard to those issues. I don’t think anyone could ignore it these days as climate change is demonstrably happening. One could argue what the causes are, but there’s no doubt that things are changing and it’s only prudent to take appropriate action.

“Traditionally, supply has always met its demand; it’s just a question of economics. However, oil and gas is a fossil fuel and there is a physical limit. Every time we think we’ve reached it something happens to make us change that view. We’re accessing oil and gas reserves in areas that we never dreamt of even 10 years ago. New plays are emerging everywhere. Deep gas is clearly a fuel for the future. It’s a question of economics.”

Gas could play a larger part in the world than it does even today, but with producer prices for gas being quite low in comparison to oil, the focus should still remain on the oil front. Lambert goes one further to say that we should be more careful about how we produce oil because it has certain uses that cannot be replaced by other means. Conversely, gas is abundant and can be easily substituted into oil burning economies if the fi nancial incentive is there.

“Sadly, that has not proven to be the case in many parts of the world,” admits Lambert. “I think the developed part of the world is catching on very quickly with the emergence of LNG and the energy hungry coun-tries. I’m more concerned about the countries that produce oil and gas and seem not to develop their own internal energy markets to the fullest extent. Again, it all boils down to economics at the end of the day. No oil company or contractor is going to work at a loss. Some of these resources are enormously expensive to develop.

“When you’re with a major multinational,

once your budgets are set the money is guaranteed,

whereas with a small company that’s just not

the case”



Th ere will be an increasing need for subsea process-ing in deepwater off shore Africa due to a predominance of shallow, low pressure reservoirs with long water column and high gas to oil ratios that creates lift , fl ow assurance and hydrate problems.

Are there other areas that FMC is working on to pro-vide increased oil recovery?JT. Investment costs for a subsea well are actually lower than for a platform well. However, intervention costs for subsea wells are extremely high compared to the plat-form equivalent. Th is is due to the high cost associated with mobilising a rig to perform the subsea intervention. Platform wells in contrast can be readily re-entered at a comparatively low cost.

If the reservoir requires a lot of maintenance and the well needs to be re-entered many times aft er it has started to produce, then the platform well becomes cost eff ective. In addition, the low cost of entry to the plat-form well enables the operator to perform operations that increase the reservoir recovery factor. Th e fact that well interventions are more costly on a subsea well than on the platform well leads to fewer interventions that historically lead to a lower overall recovery rate from a subsea development.

FMC has developed technology that signifi cantly reduces the intervention cost for subsea wells. Riser-less well intervention from a low cost monohull vessel is the solution developed. FMC has been operational with this type of system together with Island Off shore since 2004. By 2009, FMC were operational simultaneously with three such vessels in the North Sea where there is a high critical mass of subsea wells and an ageing well population. Th e application for Africa is evident with a high installed well count already in Angola followed by Nigeria and Equatorial Guinea.

Th e barriers to having all off shore developments comprised of only subsea wells are being removed by the use of low cost and effi cient well intervention systems and subsea processing. Th e day we can develop off shore fi elds without the use of manned platforms, we can sig-nifi cantly lower the operational cost of a fi eld. Th is is the next major step. Improved technology is not simply for use on new ‘green’ fi elds but may also be put to use to maximise potential of existing brown fi eld developments – there is no easier hydrocarbon to fi nd than in an exist-ing reservoir. Cost eff ective extraction of that resource is key to ‘Enhanced Oil Recovery’.

THE UNDERWATER ARENA OF SUBSEAJim Tait of FMC Technologies delves into the underwater arena of subsea technology.

When did FMC enter the subsea arena?Jim Tait. FMC Technologies’ history began in 1967, when they sold and delivered their fi rst subsea tree, which op-erated at a depth of 20 metres in the waters of the Gulf of Mexico. Since that fi rst well, FMC has constructed and installed around 1300 trees on some 260 projects worldwide through six major manufacturing facilities in Houston, Brazil, Scotland, Norway, Singapore and Malaysia. FMC Technologies now off ers a wide range of vertical and horizontal subsea tree solutions able to operate in pressures up to 15,000 psi and water depths of 10,000 ft .

How is the subsea market changing?JT. Th e subsea production business is constantly evolv-ing. We continue to move technology forward in order to unlock hydrocarbon resources that were previously inaccessible or non-commercial. Most notably, the drive in recent years has been to complete projects in deeper water, permit production from higher pressure and tem-perature reservoirs, increase our distance from subsea development to host facilities and provide additional data from subsea equipment to optimise reservoir output and implement planned maintenance programmes. In addition, we aim to consistently improve the reliability and availability of subsea equipment while reducing in-stalled costs.

Signifi cant investment has been made in the devel-opment of subsea boosting and separation systems with FMC providing six complete systems in the four major deepwater basins. Technologies vary from relatively simple seafl oor boosting to gas, oil, water and sand sepa-ration. Boosting and separation technologies have now been retrofi tted to brown fi eld as well as incorporated in green fi eld developments.

Th e technology permits production from reservoirs with low fl owing pressures and or heavy oil. Separation of the oil or the water from the process stream reduces hydrate risk and optimises fl ow assurance with the over-all net eff ect of improving reservoir recovery effi ciency.

Using this technology, fl uids can be processed on the seafl oor and transported to the host facility before fi nal separation takes place – a two step process. Th e next evolution is to achieve both fi rst stage and second stage separation on the seabed. Th is would allow export quality fl uid to be produced from a subsea fi eld and fa-cilitate delivery of hydrocarbons from subsea direct to the market.

EXECUTIVEINTERVIEW

Jim Tait is Sales and Marketing Manager for FMC Technologies, Africa and Caspian.

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Company – an affi liate company for AMOCO, which later became BP – Ibrahim then moved on to Halliburton for eight years before joining PIP in 2006.

“I was very lucky to have all these years of experience in diff erent tasks and diff erent re-sponsibilities and diff erent jobs,” asserts Ibra-him. “It gives me a wider vision as to what’s going on in the industry specifi cally, but also as a whole.”

Th is ‘wider vision’ has served both Ibrahim and PIP well; they currently hold non-operating equity shares in an off shore concession with Energy OS, which is cur-rently being operated by the General Petro-

leum Company, and another equity share in an unclassifi ed fi eld in the Egyptian western desert. In addition, acquiring the company of Shell, Total and British Gas has undoubtedly allowed PIP to adopt and customise the high levels of operational and managerial stan-dards inherited from these big players.

“Th e point is when you become a major company, or a big company, your overheads become a little extreme. And operating a small company on low production or low profi t assets is not an economically correct decision. Plus, acquirement was in a period when oil was not that high in price; it was almost US$10 to US$12 maximum. Th at was


The competitive world of oil ex-ploration is pitted with – and thrives on – risk. Smaller com-panies fi nd themselves taking on bigger projects with the

hope of accruing greater profi ts, while larger companies oft en have to forgo exploration plans due to ridiculously expensive licensing costs, putting them at a defi cit if the explora-tion is found to be unattractive. However, if the metaphorical porridge is too hot for small companies, and too cold for large ones, then perhaps it’s ‘just right’ for those in between.

Hamed Ibrahim, Exploration Manager for Egyptian based company Pico International Petroleum (PIP), is responsible for all drill-ing and development activities and acquiring assets for such a company. Having gained years of invaluable experience working for larger companies such as the Gulf of Suez Petroleum

EXPLORATION

With the exploration race picking up speed, Hamed

Ibrahim offers an insight into how medium-sized companies are coping with the competition.

TAKING RISKS

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under the ground because nobody knows what is under their ground 100 percent.

“Defi nitely there is a percentage of risk and a percentage of chance to be successful if somebody was not. It’s not because we are more clever than them or not – it’s because we are more patient and precise in this fi eld. Th is is what happened in 1996 and 1997; we’re now in 2010 and we still have a lot of oil to produce. Almost 33 million barrels of oil under the ground that still needs production.

“It was a very successful transaction and we have Anadarko at Barton with us in this acquisition. We have escaped a South Korean company and we are now the operator; even the operation in this fi eld is very unique. It’s oper-ated through what we call the FB. All the fa-cilities are in the sea itself – you work the entire operation from this fl oating ship, with all the tanks and storage tanks in the same FB.”

Ensuring changeIndeed, PIP’s transactions don’t seem to be

stopping any time soon. Flicking through the pages of the past, PIP was involved in a similar transaction in 2007 with a governmental asset in a fi eld called Diasu. Discovered by Conoco 30 years ago, it was handed over to the Egyp-tian General Petroleum Coalition (EGPC) who formed a third party company to operate the fi eld. For a period of time post-EGPC, the fi eld found itself in decline in terms of investment to upgrade the productivity of the facility. Th at was until PIP entered a bidding war with over 30 companies and fi nally won the fi eld.

“But the best part of it was what happened aft erwards because we took this fi eld when it was producing almost 6500 barrels of oil. Aft er two years, the daily fi eld production average is almost 11,000 barrels of oil per day. Fortu-nately, we haven’t spent had to spend too much money upgrading the facilities and drilling wells; we’ve drilled almost 13 wells since we acquired the fi eld and there’s a lot more to go. Th ere’s an exploration activity and a good ex-ploration programme set up to explore some new areas, so we hope it has potential.”

And having undertaken seismic surveying for almost 120 square kilometres in an area where no seismic was acquired before, PIP obvi-ously believes in this potential. Having already chalked out prospective areas, the prediction is that the fi rst well in the fi eld will be drilled

sometime this year. However, Ibrahim consid-ers this move to be one of a more dominant medium-sized company, as opposed to a small company taking advantage of its situation.

“We cannot consider ourselves a small company; we consider ourselves a medium size company because right now we are producing around 30,000 barrels of oil. So it’s not a small company anymore. But we have an easier way of motion. Our decision-making is much faster; we have fl exibility in negotiation, fl exibility in moving faster and easier than the major com-panies. Plus, we have the ambition and motiva-tion to go. We would like to establish a bigger company in the Egyptian market as we plan to go outside Egypt. We’ve tried several times in the last three to four years but so far have been unsuccessful. We will keep trying until we fi nd something outside the Egyptian market.”

Without hesitation it is easy to conclude that PIP’s intentions also serve to include evolving into an international company. Aft er all, 10 to 15 years as an oil company is nothing big. “If you look back at the major companies in the world, they started like us,” asserts Ibrahim. “Th ey started as small, independent companies before they grew, integrated and merged into far bigger ones. Th at is what makes the majors the majors right now. On your own, it would take far longer to become established as a major company in the oil industry.”

Part of understanding how to become a major company is understanding the process-es on both a macro and micro level and using your assumption on that to push the envelope

in the mid 1990s. With the low price of oil plus the high cost of operation, companies at that time would have liked to get rid of what we refer to as loser assets.

“And Pico, because it was a small company, the overheads aren’t so bad. Plus, we have ex-perience in the Egyptian oil and gas industry so we can utilise this asset in a better economic way. We acquire those assets without incur-ring too much of an expense and try to make them successful; working out how to utilise them in a better way. And that is what hap-pened. Mainly in the oil industry there is no need for succession, no end for discovery, no end for suprises. You have to depend on what is

Hamed Ibrahim is General Manager for Exploration and Deputy Business Development Manager for Pico International Petroleum.



rate of discovery and production will defi nitely increase because demand is so high. Right now the daily production is around 85 million bar-rels of oil per day.”

In the context of Africa, Ibrahim believes that safety and stability issues, particularly those of a political nature, will be the biggest challenges facing companies in fi nding oil. Compounding this sentiment is the notion of incentive: “What encourages a company to go is part of the dilemma. If you don’t have a good incentive to go and work in the jungle, in an area where you cannot be 100 percent safe, it’s a little bit risky. You can see what’s happening to Shell in Nigeria and others in Angola. All these countries should be, if there is no political stability and some sort of calm-ness in the environment there, accelerating exploration as there is never as much as we would like there to be.”

However, the recent downturn in fi nancial markets has aff ected PIP’s plans to increase its exploration activities and built a far tougher funding environment – especially in the past 15 months. With the slowness of the economy being what it is, Ibrahim admits that PIP has had to depend on existing funds and products to survive. Yet ironically during this period, PIP has witnessed an increased productivity index in their fi eld; Ibrahim now believes that they can fi nd solid funding support off the back of this within the next few months.

“We hope it will happen and that will give us the leverage to start our exploration activity easier than before. It will give us the confi dence to move forward with more speed to discover more oil and gas. Right now we have the regional countries in the Middle East; Syria, Oman, Yemen, Algeria and Indonesia are in the ‘near future target’. We’ve visited Indonesia several times looking for acquisi-tion, but it’s not yet matured. Regardless, we hope we can do something in the near future in these areas.”

What remains for PIP is still left to be dis-covered, but the future certainly looks positive for the evolving company. Perhaps they have managed to fi nd their niche within the realm of exploration, or maybe it has something to do with their size; but what it essentially boils down to is their ability to assess, interpret and take risks. It is here that they will create poten-tial and ultimately fi nd success.

year in terms of energy demand. Th is forces the question: can the industry keep up with such rising demand? According to Ibrahim, there could be trouble.

Faster supply“With the way we are going, it looks like

a no. What we are doing right now in terms of research and development is making things extremely slow. We should be moving faster. Companies should spend money to increase research and development, improve their re-covery and fi nd new ways to discover better, new oil.

“Th e major fi elds have already been dis-covered, so what we’re looking for is a medium to small sized fi eld. If we can enhance the economy, the economic factor and the eco-nomic element within the industry, we will never continue at the same rate as we did in the 1970s and 1980s.

“We should also concentrate in areas where there’s little to no exploration. For in-stance, there’s a very virgin area for explora-tion in Africa; we should be concentrating in those types of country because I believe there is still plenty of oil under the ground. But the

of your company. Currently, enhanced oil re-covery seems to be the fl avour of the month. “Th e way of application is not yet that heavy,” claims Ibrahim. “It should be much heavier than what’s happening right now. Artifi cial lift ing, water injection, chemicals, immersible chemicals, steam injection; all of these tech-niques should be heavily applied.

“Right now, all that we produce amounts to no more than 25 percent of what we dis-cover, so we still have 75 percent under the ground. If we can increase our recovery factor by 10 to 15 percent, it means we will add almost 30 percent to what we already pro-duce – and that is what we need. Right now, the energy itself has become very effi cient and essential for the development, especially for the development company.”

Nowhere is this truer than in the Middle East and North Africa, where countries are starving for energy. And it is for precisely this reason that oil becomes stable at about US$70 per barrel. Compare that to a maximum of US$15 in the mid 1990s and it is clear to see that demand has heavily increased at a consid-erable pace. In fact, reports suggest that there will be a two to three percent increase every


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that, in partnership with their downstream department, they hope will be the beginnings of something exciting.

“Th e Kudu Gas Field has been in existence for the last 20 years. It was discovered by Shell and it’s a 1.4 TCF fi eld, most probably with some upside potential. Th at gas fi eld is 54 percent owned by NAMCOR, with partners including Tullow Oil amongst others. In terms of the Kudu Gas Field, it’s of strategic importance in Namibia because it’s earmarked for a gas to power project. So, the sooner we get that out of the ground and off the ground, the better for Namibia and for the Southern African region as a whole because, as you may or may not be aware, there’s a power crisis looming in the next couple of years.”

With this power crisis obviously coming from the world’s energy demand rising, there are debates across both lines as to whether future supplies will be able to keep up with such demand. Some are pure cynics, others daydreamers. But for Baumann, and others just like him, there is real hope for the future.

UP TO GO DOWNSTREAM

EXPLORATION

Alastair Baumann unveils future plans for NAMCOR and ideas to secure downstream recognition.

The fi eld of oil exploration has become a metaphori-cal battleground, not necessarily for land or sites as you might imagine, but for the future. Compa-nies that invest in their exploration now are doing so to lay new foundations for better, more effi cient projects for forthcoming years. Alastair Bau-mann, Asset Manager for NAMCOR, is fi ghting

this battle on all fronts for the national petroleum corporation in India.While they are not currently in production, NAMCOR’s plans have

led them to a producing fi eld in the Kudu Gas Field in Southern Namibia

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age facility which we built ourselves in the northern part of Namibia and that’s pretty much our strategy – to tackle the downstream demand by these strategic storage facilities in strategic places. I think next will be the coastal harbour town of Walvis Bay. Th at’s where we’ll put up our next storage facility.”

Th e idea of strategic planning for the downstream sector is indeed a relatively risky move considering all the unpredictable factors that are included in economically developing countries. But for NAMCOR and Alastair Baumann, it is a risk well worth taking in order to secure their future and hopefully grow within the business that we know as exploration.

Alastair Baumann is Asset Manager for NAMCOR. He received a BSc (Hons) in Geology from the University of the Western Cape.

“We’re certainly hoping supply will keep up with demand, yeah. And once we start producing we’ll manage to see if we can get some upside potential out of it. Apart from that, we just made a recent discovery in the North of Namibia, so hopefully that will supplement it as well. It’s gas, but just not confi rmed. Th ere’s some fl uids or liquids with it, but it’s a couple of TCF potentially.”

“Namibia’s got quite a good relationship with the large operators, for example Shell. Our regime – our fi scal and legal regime – is quite favourable for operators. We’ve got quite a politically stable coun-try, so relationships are pretty favourable between ourselves and the larger operators.”

Low riskIndeed, Namibia is defi nitely a lower risk for NAMCOR as opposed

to countries such as Nigeria, and especially when it comes to the attrac-tion of the open licensing system. “In a nutshell,” explains Baumann, “it’s on a fi rst come, fi rst serve basis. Interested companies or parties would come to the Ministry aft er having had a look at potential open acreage. Th ey got to the Ministry; the Ministry would refer them to NAMCOR where they have a look at certain data. Th ey’d then buy a couple of seis-mic lines, look at the data and see if they’re interested in that.

“Th en the Ministry of Mines and Energy, through the government of Namibia, negotiates a model petroleum agreement where it discusses things like royalties, the license terms and programmes. Namibia has a royalty regime; we don’t have any signature bonuses or anything like that. So, once the model petroleum agreement is fi nalised through negotiating between the two parties. At the moment, NAMCOR is not entrenched in law that the national oil company must participate in any license. It is, however, advisable because we make life much easier with our technical expertise and knowledge of the country.”

Th is knowledge of the country has led others, 14 to be exact, to drill exploration wells off shore. However, Baumann predicts that the future will see the introduction of more projects, both on and off shore.

“Well, there’s certainly been a paradigm shift on thinking on Na-mibia’s explorability. Now we see a lot more happening because of our cooperation with the Brazilians. In Brazil there’s been a couple of mas-sive discoveries. Th ere’s a lot of geological similarity between Namibia and Brazil because we basically share the same margins. So, there’s a lot more interest in Namibia and we really see more happening in the next couple of years in terms of exploration and drilling of more wells.

“However, the biggest challenge will be cost. Namibia thus far has not been an exploration destination, so logistics to and from Namibia are costly. Th e last well we drilled in the off shore in about 700 metres of water depth was over about US$100 million. Th at’s a bit of a risk for us, but I’m sure we’ll manage it in the future.”

Managing the future is certainly core to NAMCOR’s success; their downstream operations will need to become a defi ning force in expand-ing the company. Currently, NAMCOR imports 50 percent of the coun-try’s few demands. It’s strategy, according to Baumann, is to now become a major player in the downstream industry.

“Th ere are other big players like Shell and Total; we don’t want to take them out. Instead, our strategy is to try and get as many storage facilities as possible in the inland of Namibia. We’ve just opened a stor-

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Amodern LiDAR-based Aerial Survey (LBAS)offers a surveying and planning solution to themining, energy and civil engineering markets,which older surveying techniques could not.

Light Detection and Ranging (LiDAR) is an airborne sur-veying technique that combines the trajectory of the aircraft(from differential GPS), orientation of the aircraft (from aninertial measurement unit) and laser ranging to survey theearth’s surface accurately in high resolution.

Aerial surveys have always been able to cover largerareas in a shorter period, compared to conventional groundsurveying, while also offering imagery to visualise the surveysites. Furthermore, very little ground access was required,which is a positive from a security point-of-view.

However, conventional aerial surveys – for examplestereo photogrammetry – had some major shortcomings.Firstly, digital terrain models (DTMs) provided could not beaccurate in vegetated areas, since the stereo-derived DTMswould only give the heights of the top of the vegetation.Secondly, some ground access was required to do so-calledpre-marking, whereby a white cross is built on the ground toserve as a known point. And thirdly, turnaround on the de-livery of survey products was slow and expensive because ofall the manual labour involved.

The advent of LBAS solved many of these problems.Firstly, the high-power short-pulse laser used will penetratevegetation and also ensure returns off dark surfaces such astarred roads or coal stockpiles. Furthermore, multiple re-turns are recorded for each pulse, so that the coordinates ofthe ground and vegetation are recorded, thus providing avery accurate DTM. Secondly, the ortho-rectified aerial pho-tos from LBAS are produced through direct geo-referencingwhereby pixels are projected onto the DTM, while the indi-rect methods of photogrammetry required pre-marked sur-vey beacons. Using LBAS, site access is only required forquality assurance purposes, but can strictly be conductedwithout any site access. Thirdly, with the automated systemsused turnaround time has greatly been reduced and this al-lows for rapid calculation of volumes, contours, vectorisationof buildings, et cetera.

Modern LBAS systems improved significantly on olderLiDAR systems. The modern surveying systems, such asthose used by CK Aerial Surveys, has laser pulses in the air 51percent of the time, while the other 49 percent is spent turn-ing the mirror to direct the laser pulses. The three engineer-ing limitations that prevent these systems from surveying any

quicker are the speed of light, the speed at which the mirrorcan be turned side-to-side without introducing any signifi-cant deformation, and the recording rate of data. Currently,systems can transmit up to 200,000 pulses and record up to800,000 returns per second.

One of the major benefits of the improved ranging rateis lower cost to the client. Various steps can now be taken toreduce the cost of conducting the surveys, for example flyinglower and using a wider field-of-view, thus covering a largerarea to better resolution and accuracy than possible beforeand doing so in a shorter period. CK Aerial Surveys exploitsthis property by operating mostly from a helicopter platformand thereby further negating the need to operate from air-fields and reducing aircraft turn-around time at the end offlight lines by 75 percent.

Earth’s atmosphere causes dispersion of laser pulses asthey travel to the ground, hence another advantage of mod-ern helicopter-mounted systems is the smaller laser footprinton the ground, typically eight to 12 cm diameter, which of-fers better resolution and accuracy of the ground points thanthe 20 cm diameter from systems based in fixed-wing air-craft. With the smaller footprint, one is able to also surveyfeatures such as earth wires on power transmission lines.

Typical modern LBAS data sets contain five to 10 pointssurveyed per square metre, to accuracies of five to eight cm.The high-resolution photography combined herewith, yieldsortho-rectified aerial photos with seven to 10 cm pixel sizes.These data sets have a myriad of uses in mining, energy andcivil engineering, including volume calculations of stockpilesand pits, DTMs, contouring, audits, hydrology, flood pre-dictions, detection of sinkholes, three-dimensional mappingof power lines relative to the ground and other features, andenvironmental impact assessments. n


INDUSTRYINSIGHT

Modern LiDAR-based aerial surveysAdriaan Combrink explains the techniques and processes of modern LiDAR-based aerial surveys.

Adriaan Combrink holds a PhD in Geomatics from the University ofCape Town and an MSc in Physics from Potchefstroom University. Hespent six years as a full-time researcher at the HartRAO SpaceGeodesy Programme and has been heading up the GeospatialOperations at CK Aerial Surveys since 2008.

“Typical modern LBAS data setscontain five to 10 points surveyedper square metre, to accuracies of

five to eight cm”

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EXPLORATION

COMBINING FORCES

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The arena of oil and gas exploration remains one of the few sectors in which competitors double up as allies; in order to make the big profi ts, big risks need to be spread across partnerships and alliances that not only combat the logistical and economic risks of drilling, but also the socio-political risks of the relevant coun-

tries being explored. While this may be a blessing for smaller companies – in terms of obtaining more lucrative, outsourced work – for the bigger companies it can mean a complete shift in direction.

For Oladipo Faseemo, Fields GSR Manager at Total E&P Nigeria, this fl ickering dynamic between competitor and ally is a balance of fi -nesse. Not only does he need to factor in Total’s interests into an explora-tion project or fi eld, but he also needs to assess whether or not the risk is substantial enough to encourage competitors into partnership.

“Our major task is to make reservoir studies towards the develop-ment of oil and gas fi elds,” explains Faseemo. “How do we best develop these fi elds, how many wells do you need and then be able to forecast that the well can last the rate you produce it are all questions that need to be answered. First, we need to quantify how much of the resources we have in the subsurface; this is done throughout the life of the fi eld.

“Right now I’m in charge of four developed fi elds in off shore Nigeria. Th ese are fi elds that have been in production for 16 years. I have a team of six engineers, geologists and geophysicists whose main task is to ensure the continuity of production from these fi elds and to optimise the oil and gas recovery from the developed fi elds. Even though we’re producing declining oil production rates, we still hope to have the fi elds in produc-tion for at least the next 20 years.”

Production declineTh e task ahead for Faseemo and his team is to ascertain how to

arrest this decline in oil production. At the initial stages of produc-tion, Total was seeing high rates of oil being produced – but this soon slowed to a plateau. More specifi cally, this meant a slow decline from about 70,000 barrels of oil per day to where they stand today, at about 20,000 barrels per day. Without the introduction of new ideas, new wells, or even completing existing wells to sustain productivity for a longer period of time, Faseemo and his team will continue to witness this decline. Fortunately for Total, Faseemo has a track record of suc-cessfully deterring production decline.

“Currently, we’re midway between the onshore and the deep off -shore, which is a relatively new frontier; it’s more complex and more expensive. In the conventional off shore you have production platforms that were built during the construction phase that allow you access to oil well slots. In turn, these let you carry out measurements in your wells to

With bigger risks and greater profi ts going hand in hand in the exploration industry, Oladipo Faseemo of Total E&P Nigeria explains how major companies are combining to take on bigger projects and reap the benefi ts.

see the zones that have been bypassed by the existing wells, which we call infi eld wells within the reservoir, to be drilled from your platform so that you can increase production within a short period of time. “Sometimes you also have nearby exploration with the knowledge that you have the region to say, ‘Okay, now I have a better understanding of this environ-ment, maybe I should just go a few kilometres away from my existing installation and I will fi nd something interesting’. We’ve recently had some successes for new fi elds, but I’m in the process of doing a study for development that will also be tied back to existing installations.

“To the south of the four fi elds that are developed and have been producing since 1993, there’s a new fi eld that was discovered some time ago but had previously not been economically viable. We then did some reprocessing of seismic data that showed some other interesting zones that were not previously available. Th e well was drilled about seven years ago and that changed the picture of the fi eld. At the end of last year we got the approval to go ahead with the fi eld development plan, so that will take us to the stage of fi nal decision where you discover the partners because usually these fi elds are very capital intensive.”

Forming bondsAnd it is for this exact reason that companies enter partnerships

with their competitors; either partners are imposed on them by the government of the country where the work is taking place, or by discus-sions with other major oil companies. Regardless, once this investment is made, it allows for a little more breathing space in which basic engineer-ing plans can start to emerge

“We look to start producing these other fi elds in the next fi ve years,” asserts Faseemo. “Of course, you have to construct a new plat-form through which the wells will be drilled and then we’re going to produce true fl otation production units. It actually involves fl oating a ship that stores and processes your oil before it’s transported to the hub of production off shore.”

As if that wasn’t a feat in itself, Faseemo’s work with hydrocarbon has also provided the opening for a new fi eld in 2009, boosting Total’s international hydrocarbon profi le dramatically. “I don’t work directly on the fi eld, so we have a diff erent subsurface team of reservoir engineers, geologists and geophysicists that will take care of things. Of course, the idea is to exploit oil in an economic manner and to make money for the company and for the country where we operate. It’s the same principle.

“With Nigeria being the most important subsidiary of the Total Group worldwide, and containing our fl oating production storage ship – which is the lightest that has ever been built – projects are bound to come along that will challenge that record. But still, it has been a great success and we have our other deep-water projects coming up for Total in Nigeria as well.”

Despite their good fortune, both Faseemo and Total have had their work cut out dealing with the sensitive political situation in Nigeria. For-tunately, Total has been very successful in dealing with, and navigating through, all of the turbulent security situations encountered so far. “One of the reasons why we are so successful is that we respect the political situation of the country; we work well with our host community by car-rying out sustainable development projects.

“We have a few sites onshore where Total has literally taken up re-



produce more than 40 percent of the oil you’ve discovered. With improv-ing technology and what we call enhanced oil recovery, you need to be able to develop new technology to improve on the recovery of the already developed fi elds. It’s a huge potential, even if you only manage to imple-ment it for one of your developments, as then you can start to put in

place polymer and surfactant injections. We have already begun incorporating them into develop-ment designs. Th is is the future and I think that there’s a lot of room for improvement.

Th e other issue Faseemo highlights as a bone of contention is what to do with the existing fi elds already in play? It’s fi ne to fi nd new fi elds and talk about bid developments, but you can’t merely dis-card the old and move on to the new. “Big projects, big profi ts, but big problems,” as Faseemo says. “If one well has a problem it’s probably equivalent to all the production from my four fi elds, for exam-ple, from one fi eld. If there’s a problem with a well in the big projects then it has a big impact on the company. But for the conventional off shore fi elds

that I manage, we look for piecemeal increasing oil production.“It has to be a balance, just like anything in life. While it’s good for

big projects, don’t forget your small fi elds as well. We have that spread in Nigeria for Total that that has really paid off , and continues to do so.”

“Before now, people were not venturing to deep waters because I would say horizontal wells were not commonly drilled before. But now you don’t only talk about horizontal wells in deep waters, you talk of multilaterals where for a single you can drill diff erent branches of the single well, thereby improving the production and productivity by tap-ping into diff erent reservoir zones. Th is kind of advancement in drilling technology has helped to improve the stakes because you wouldn’t want to put a subsea well just to tap a single zone like we were doing before.

“Onshore, you can put several wells, but with off shore you are re-stricted. You only have your platform if it’s unconventional or you need to drill extended wells, which was not possible some years back. Apart from that, there’s also advancement in enhanced oil recovery techniques. For more and more companies this means trying out new things in order to have a real case study to refer to – giving them more confi dence to go aft er what they want. If you’re successful with those techniques it’s always benefi cial in the long run to improve your recovery eff orts.”

Indeed, part of the reason for the success of many international oil companies lies in their ability to not just take risks, but to take the right risks. Faseemo cites a relatively new company whose strategy was to go aft er and buy existing fi elds where production was assured. For a new company still in its setup period, the courage and economic power doesn’t exist to take on bigger risks, so it usually falls on the multination-als who are well grounded and diversifi ed geographically in the grand scheme of things. Ultimately, they have the fi nancial backing to take risks; the higher the risk, generally the higher the rewards. As Faseemo simply put it: “It’s just the way it is.”

Oladipo Faseemo is currently as Fields GSR Manager for Total E&P Nigeria. He formerly held the positions of Senior Reservior Engineer at Total E&P and Reservior Engineer at Elf Petroleum. Faseemo studied at Ecole du Petrole et des Moteurs and the University of Lagos and obtained degrees from both.

sponsibility to ensure that the economy of the new data environment is improved tremendously. In return we are seen in a positive light by the locals. Th at’s one approach that’s really worked for us. Another is that we have ‘proven technologies’ that are not only respected by the local com-munity but also by the government, the National Oil Companies and the Director of Petroleum Resources, who oversees the petroleum industry in Nigeria as a whole.”

Indeed, it would seem that Total is in the good books of all and sundry, which has paid off in a very positive way – with a bit of luck thrown in for good measure, of course. However, this is not always the case for Total; its pipelines can provide a few challenges at times, especially when you consider the fact that it ties into some of the surface pipelines used by bigger companies.

“Total has been in the country for a long time,” reminds Faseemo. “And then we have also have ten percent of Shell in Nigeria. So whatever aff ects Shell, aff ects Total in a way. We also have deep off shore and conventional off shore interests, so by and large things have been going quite positively. Th ere’s a strong focus in the country at the moment to improve on the political situation and things have really calmed down quite a lot these past months. Th ere’s a willingness on the part of the government to positively engage the host communities and whoever had previous agitations. All of these things are being brought on board and addressed in a very positive way, which is good for the economic environment as a whole.”

Future demandYet even with this positive movement for Nigeria and its host commu-

nities, the inevitable negative comes from one of worldwide prominence: the increasing energy demand. “I don’t have the exact fi gures,” admits Faseemo, “but I know the energy demand of the world keeps growing and the supply is not growing as much as the demand, as it already is today. Of course, new frontiers are being opened. Before now, nobody even thought of going into deep waters; it’s always been very expensive and nobody expected the kind of huge successes that we’ve had in past years in deep waters.

“As long as the demand is there and the price is right, I think that will push the big multinationals to take more risks. If you’re successful then you’ll have your payout in no time, so the increasing demand and envi-ronment we work in will continue to push the majors – especially with the fact that you don’t go it alone, you always go into partnership or spread your risk. Th e frontiers will continue to go deeper into unconventional hydrocarbon resources, which are quite expensive to develop now.”

In light of this, Faseemo has ensured that he has a plan for the future of Total in Nigeria; they already have big projects lined up with the inten-tion of tripling production in the next nine to 10 years, and hope to see various larger projects coming on stream from now until 2015. While it’s clearly a continuous process, Faseemo makes no qualms about their future being assured through a daily improvement on Total’s recovery.

“Just to give you an idea, taking oil for example, which is more eco-nomic to develop. When you develop an oil fi eld, you don’t expect to

“With improving technology and what we call enhanced oil recovery, you need to

be able to develop new technology to improve on the recovery of the

already developed fi elds”


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EXPLORATION

Black Marlin Energy’s Jeff Hume discusses the positives of being a smaller oil company in the exploration business.

beautifulSmall is

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Th ey were disappointing results, and that’s only fi ve years ago. Here we’re talking about production of more than a billion barrels of oil. Th at’s the kind of thing we’re looking for.

In addition to these, small companies oft en face a multitude of other challenges – one of which is data and data management. “Th e govern-ment typically over 20-30 years collected information from oil compa-nies, but to a large extent didn’t really understand it. Now, that’s being unfair on some governments who have got excellent technical depart-ments that have reviewed the data, and that’s certainly more true now. But oft en the data was boxed up and sent to the companies and they just put it in an archive.

“Tying some of that data together, understanding it, being able to reprocess it, even being able to recover it in some of the exploration areas – particularly in East Africa – is very diffi cult and very time consuming. Oft en you’re on quite tight timeframes to be able to explore an area.

“Let’s say you have a three year exploration period. Well, if is takes you 18 months to fi nd, recover and reprocess the data, that’s a big chunk out of that period. In the context of data management it would be ideal if the government could just give you a digital fi le and say ‘there’s all the data’. Th e problem with that is that digitised rubbish is still rubbish. You need to understand the providence of the data and how it got into that digital database before you can really use it. Although you’re not doing new work, there’s a lot of detective work that needs to be done before you can say, ‘Yes, okay. We can rely on that information.’”

Exacerbating the issue is the problem of political challenges. Tax issues, tax treaties and product-sharing contracts going back to 1999 with exemptions and tax reliefs have all caused problems, specifi cally with customs laws and the tax unifi cation in East Africa. Suddenly in 2004 another set of decisions were made, but nobody went back to ques-tion the fact that the exemption was already in the agreement.

“One of the sensitivities is really understanding the structure of the agreement. IHS has been talking about that a lot recently. Is it robust and does it fi t with current conditions? You really need to fi nd out sooner rather than later.”

Th is notion of ‘sooner rather than later’ certainly plays eff ectively in relation to geophysical technology and how it can improve explora-tion risk rates and reduce costs. Having spent a good deal of his career involved in planning and executing 3D and 4D surveys for production, Hume is more than aware of the need to keep costs down.

“Unless you’re in deep marine conditions it really isn’t economic to do 3D surveys. We’re in the situation in East Africa, which is again where our focus is, where almost no 3D surveys have been done. One or two big marine surveys have been done, but very little in the way of land treaty or transition zone treaty because they’re so expensive.

High cost“Th e technology we tend to use is 2D seismic technology tied to any

other method that we can use to de-risk it. For example, if we had four structures on a block that were of similar size and had a similar look and feel and looked prospective – but on one of them we had a geochemical anomaly that suggested that there were hydrocarbons – that would be an interesting de-risking tool. GNT was here this week with that type of technology. We do look at integrating these exploration technologies

The arena of gas and oil exploration is pebbled with data, research and analytics that precede and oft en dictate the introduction of drilling. Combine that with political sensitivity and geographical restrictions that seem to cause more problems than they currently solve, and it’s clear the industry is being battered by

decisions that will aff ect its future. Jeff Hume, COO and founder of Black Marlin Energy, fl ips the lid on what’s being done by smaller oil compa-nies to thrive in such an environment.

Having recently stepped down as President and CEO of the company, Hume has employed a former Africa Oil employee with a knowledge in public markets to step up and guide the company through its reverse take over and listing on the Toronto Stock Exchange.

“We’ve been operating in East Africa since late 2004 gathering data, and then really started doing things in 2006,” he says. “Th e fi rst operation we had was here in Kenya. We explored in Tanzania and drilled two wells with partners there. Th e second well was a gas discovery on the southern end of Songo Songo Island – close to the gas fi eld – which proved a little diffi cult to monetise because there’s so much gas there and so little capac-ity in the current pipeline.”

With acreage positions spanning Ehtiopia, Southern Ethiopia and Kenya, Black Marlin Energy also has a few exciting blocks near Mom-basa, which are both onshore and off shore, that are about to be exposed to seismic data shoots. Th e hope is, given that Mombasa Island is in ex-tremely shallow water, that something will be found and be available to take to market very quickly.

“Th e other two areas we’re in are Madagascar and the Seychelles. We have a 75 percent working interest in the largest acreage in the Seychelles, which we’re very excited about. We’ve shot a lot of seismic data over the last four years there and we’re homing on a few areas that we like; we hope to get some big partners in the next six or eight months.

“We’re at the pure exploration end at this stage and so we’re look-ing to develop drilling prospects and either drill them ourselves or bring in partners. Tanzania obviously has gas; there’s likely to be gas because there’s so much gas that has been found there. We’re chasing oil in other areas: Seychelles and Madagascar are probably oil. Coastal Kenya could be gas, could be oil.

The exploration game“With regard to the cleaner fuel issues, it’s really rather down the

road. We’re unlikely to develop production. We might get into the de-velopment stage, but in terms of actually producing it, we’ll probably sell that off and then go back to more exploration because small companies explore. Big companies don’t explore any more.”

Th e idea of small companies taking on the exploration side of things seems to ring true throughout the industry. For starters, small companies can undertake exploration with far less expenditure, and oft en in places that larger companies can’t get to without putting in large amounts of money. Th e model really becomes the exploration of new areas; ironically the higher price of oil has opened up areas that were inaccessible before.

“For example,” continues Hume, “fi ve years ago I was at a conference listening to Andrew Tullow. Tullow and Heritage had just drilled two wells; one was a water well and the other one was full of carbon dioxide.

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has been acquired before, and we want to try it as close to the coast as we can because in our block, close to Mombasa, even 50 BCF of gas is a commercial fi nd as long as we can access it from land. If you go in 1000 metres of water it’s got to be two TCF of gas. Th ere’s a big diff erence.”

And the diff erence will get bigger in all relative terms as the world energy demand increases. As this is undoubtedly the case, the next worry for small companies will be the ability to supply the demand in the coming years. According to Hume, the answer to that question will come down to the usual – money.

“Th e price will go up with time, and as it goes up more resources will become available. Madagascar currently produces no oil at all, but there are at least 25 billion barrels of oil in Madagascar at the surface, and it’s easy to get at. But it needs to be a sustained oil price, probably above US$65-US$70 per barrel for a long period of time to make it economic. Th ere is shale gas in the US that was considered to be a minor resource 15-20 years ago, but now it’s a huge multi-TCF of shale gas. Th ere are lots of places to go provided that there is a sustained price that you can get the investment back on.

“I think we can manage a higher price of oil and I think OPEC are doing a cleverer job of managing the price than they did in the 1980s. I believe that the money and resources will be there as more uncon-ventional resources come into play. But you need that sustained price over time.”

Future visionOn the topic of exploration activities, Hume seems to have a solid

grasp on his vision for the future direction of Black Marlin Energy. “We’re going to continue in the exploration game and we’ve certainly got a good reputation here in East Africa. We’re looking at a couple of other areas around the world where we can bring our business model into play. I still think there’s something left in the business model of having a ser-vice arm that can actually perform unconventional types of service. Th e kind of work that we’re doing around Mombasa right now doesn’t exist, so we created it to do our own work.

“Th at innovative approach to data acquisition to help us in getting to the front end of exploration deals is something we’ll probably continue. But should we have a major success – for example, a really big fi nd in Madagascar – we may drill in Madagascar this year for example, and that would change the profi le of the company completely. It really does depend on how we develop, but we have a pretty aggressive strategy over the next two years. We hope to be drilling this year, but Madagascar is a little politically sensitive, so we’ve got to be careful there. But hopefully we’ll still be able to carry out our plans.

“We’d like to drill in Kenya, certainly in early 2011, and then we have up to about eight wells to drill between say the middle of this year and the middle of 2012. Quite a lot of activity in diff erent countries – that’s our main focus. Whether we develop the company and grow it organically, or we get to be an interesting takeover target at some stage, the future will decide.”

Jeff Hume is Chief Operating Offi cer and founder of Black Marlin Energy. Hume holds a BSc (Hons) degree in Exploration Science from University of Nottingham, UK and has over 30 years of experience in the areas of geophysical and survey services and consulting to the oil and gas, hydrographic surveying, geodetic surveying and geotechnical industries.

and other things to de-risk the drilling, which can be very expensive. Whereas a well in Canada might cost US$1 million, here it’s US$15 mil-lion to do the same thing.

“Th e key part about geophysical technology is being fi t for pur-pose. We’re looking for big structures in regional lines that are as much as three kilometres apart. In a 3D survey your subsurface lines are 25 metres apart, so it’s a huge diff erence. Accuracy of positioning is not as critical for the type of work that we do. We’re working in Ethiopia at the moment where there is a security issue that the Ethiopian government are handling very well for us, but nevertheless we cut back our exposure by doing essentially real-time navigation like you would on a boat. We’ve applied it to land data, so we don’t have teams of surveyors wandering around days in advance putting little fl ags in the ground.”

Indeed, the application of geophysical technology has its merits and Black Marlin Energy has recently proved this in its acquirement of data

in Tanzania. “Having done quite a lot of research on this,” asserts Hume, “normally longer is better in terms of geophysical cables, but when you have to get up little creeks it’s impossible to use a six kilometre cable. Th e alternative is to go to a transition zone crew and lay something on the bottom, which is very expensive and slow, or see what you can manage in terms of the off set.

“We’ve recently acquired over 350 kilometres of new data for a client and a partner in Tanzania where no seismic data had ever been shot before; very shallow water, very successfully with some very good look-ing data. We’re about to apply the same technique – short off set, towed cable, here in Kenya. We’re in the point of acquiring data where no data

“Small companies explore. Big companies don’t explore any more”

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Although neighbouring countries have already proven substantial off shore oil reserves, the waters off the coast of Liberia are yet to provide in this oil rich region of West Africa. And yet, surely something must be found along the 359 mile Liberian Atlantic coastline as it opens up

into the oil-laden Gulf of Guinea. To ensure something is, the National Oil Company of Liberia concerns itself with all things oil to make this hope a reality. Jacob Saa Sandikie, Vice President for Technical Services, is helping lead the charge in this new voyage for Liberia’s oil pockets.

“Basically,” explains Sandikie, “the National Oil Company of Liberia is a 100 percent government owned corporation responsible for explor-ing oil and making everything possible for oil companies to come, con-duct and provide the licenses for oil exploration. It also provides all the necessary permits that the investor will need to conduct oil exploration in Liberia. On a personal level, I’m also responsible for negotiations for the oil company.

“For instance, we have had two bid rounds. We conduct bid rounds by chairing – I should say co-chair because the proper chairman of the Petroleum Technical Committee is the President of the National Oil Company or his designee. Most of the time he designates me to chair the committee, which is responsible for conducting the negotiation and bid round and evaluating the bids. Th en, once all negotiations are cleared, the agreement is submitted to management who will then send it to the board for approval.

“Once the board of Directors have approved, the agreement is signed. Th e Liberia agreement is signed by the ministers of Lands, Mines and Energy, the President of the National Oil Company, the National Invest-

HELP FROM HOMEJacob Saa Sandikie explains the intentions and hopes of the National Oil Company of Liberia.

ment Commission, the Ministry of Finance and it’s attended by the Minis-ter of Justice. Once this has passed, the process goes on to the offi ce of the President who then approves the agreement and sends it for ratifi cation to the legislature. Aft er that, the agreement becomes binding and in eff ect.”

Final biddingTo date, the National Oil Company of Liberia has conducted 12 of

these agreements that are all currently in eff ect, with fi ve remaining agreement ‘blocks’ available to future interests. In addition, they have recently extended the deadline for a further round of bidding aft er some of the companies requested more time to bid – a promising sign.

“By February we’re going to have a ceremony to open all the bids that are coming and then the committee will get to work again to evaluate the bids. Th en those that win the bid will be called in for negotiations with the government. Th is committee is responsible for reviewing the wet pro-gramme of the oil company, reviewing the budget, approving them, and then whatever problems arise that can be quickly resolved between parties can be handled through this committee for the operations to go on.”

EXPLORATION

“Th e National Oil Company asks for contributions from other companies to train younger Liberians in various

aspects of the oil industry”

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Combined with this idea is the recent board approved budget to provide scholarships for young people to train abroad, be it for a degree or industry qualifi cations. Th ey even have the components in place to undertake skills training – making the students a valuable asset to companies and the country alike once they are fully equipped with the skill set.

Th is intention is certainly pushing the attitudes and motivation of Liberia forward, but what does the future hold for the country? Well, Sandikie keeps his prospects for the future simple: “Th e most im-portant thing is to discover the oil and have it pumped out of the ground. We are optimistic that it shouldn’t take more than two or three years. If that happens, and oil revenue comes in, of course that changes the entire picture for Liberia in terms of development, employment, infrastructure and so on.

“We are very hopeful and the government is giving a lot of attention to the oil programme right now by way of supporting the work and

making sure that investors come in and they give them all the necessary courtesies and legal instruments that they need to do their work.”

And it seems to be a case of ‘so far so good’. Sandikie is currently fortunate enough to be witnessing a spectrum of companies ranging from Australia, China, Spain, America and the UK, not to forget close links with a Nigerian company. With all the provisions in place, Liberia is trickling its way towards having its oil doors opened to the world. All it needs now is someone to open them.

Jacob Saa Sandikie has served as National Oil Company of Liberia’s Vice President for Technical Services since November 2003. He was previously Assistant Minister for Energy, and Head of the Department of Energy, Ministry of Lands Mines and Energy (MLM&E). He is an Energy Specialist with a Master of Energy Resources degree (MER) from the University of Pittsburgh, US.

At the moment, the National Oil Company is witnessing solid levels of potential in the context of discovery, with interpretation work com-mencing aft er a 3D seismic reading earlier in the year. If hopes are to be believed, Sandikie thinks that by the end of the year they will be able to defi ne a drillable structure.

“Anadarko have a new platinum tip technology they want to try in Liberia. Th ey’ve done the 3D and then brought in another vessel recently to go over the area. I can’t describe exactly what it was, but we believe this will be able to pinpoint the area more successfully. Th at’s why they’re taking their own time to make sure that there are no mistakes; if they decide to drill then we should think there’s something there because they use every available means to search before they go ahead.”

A helping handHowever, keeping the costs down will become pivotal in both at-

tracting new investors and exploration companies, but also in con-tinuing to work within unconventional resources. “At the moment,” continues Sandikie, “we have been able to help the oil company with the permits. For instance, the maritime bureau was asking for rates that were equivalent to the commercial vessels. Merchant vessels coming in to do seismic were being charged ‘per year’ even though they weren’t there for the whole year.

“Th e service vessels coming in for two, three, even fi ve months have to pay again for the whole year if they come back in January because they have crossed over the year. We were able to negotiate with the maritime bureau to look at it, but in the end it’s actually a cost recoverable expense. Th e more wages we charge, the more we’ll have to eventually reduce the revenue that will come to Liberia. Instead, why don’t we eliminate the permit requirements for seismic vessels, or at least reduce them to the minimum.

“We were able to come down to a very, very reasonable amount and reduce the costs in that area. We’re doing a lot of things like that. Also, when we review the budget with the company in the work programme, we normally discuss these things to make sure that the budgets are passed within the reasonable amounts that are cost eff ec-tive for the programme.

“Incidentally, we are at the initial stages in our oil programme doing oil exploration with seismic acquisition interpretation. At this par-ticular stage there is not much activity underground when it comes to direct contact with the population. We don’t have any problems with that, but nevertheless we have been able to negotiate with oil companies to advance some money on an annual basis for some shale work for their contributions.”

In addition, the National Oil Company also asks for contributions from other companies in order to train younger Liberians in various as-pects of the oil industry; not only will this aff ord a level of privileged edu-cation, but more importantly it will provide a greater workforce should oil be found in Liberia. So far, a large majority of the companies have been generous enough to aff ord reasonable amounts into the scheme on an annual basis.

“We are at the initial stages in our oil

programme doing oil exploration with seismic acquisition

interpretation”

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Experience“I currently hold the post of Minister for Energy and Minerals;

before then I served as Deputy Minister for a year,” explains Ngeleja. “My background comes from the private sector where I started work-ing with PricewaterhouseCoopers immediately aft er my graduation in 1994. When they merged in 1997 I became a permanent member of staff . It wasn’t until July of 2005 that I crossed over to politics and was elected by my party in the intra-election to contest for the general elec-tion. I won the seat and became a member of parliament.”

It goes without saying then that Ngeleja is certainly an asset to the Tanzanian Ministry; his experiences in the private sector have undoubt-edly served him well in times of confrontation and decision-making. A prime example: Th e recent revoke of the tender for the purchase of two generators located on Dar es Salaam and Mwanza by the government.

Without the generators, the 160 megawatts needed to run the national grid will need to be accounted for elsewhere.

“We said there were some procedural inconsisten-cies that we discovered in due cause of the process,” admits Ngeleja. “Th at’s why we decided to revoke the tender, but then so too had the same companies which had managed to reach the fi nal stage of evaluation. Th ey’re not open tender for the international, so there’s not going to be an international race for the ones who had not bid and for those who had not participated during the fi rst tendering process. We’re just exposing this document for the ones that had been shortlisted and that had confi ded for fi nal evaluation.

To ensure that the recent power shortages attrib-uted to Tanzania Limited’s overcharging of electricity are avoided in the future, Ngeleja asserts that steps are being taken to learn from the mistake, including many by the government. “One of them,” explains Ngeleja, “is the purchase of generators to generate 160 megawatts to make sure that we address the shortage that addresses the country now. Th e other thing is that our coalmine is expected to generate power of up to 200 megawatts; it is almost online because we’ve secured the credit and we have secured the facility from the Chinese government to fund the project, which is about US$400 million. Th e project will start soon and is expected to take roughly 20 to 24 months. Th at will help us address that.

EXPLORATION

The southern nations of Africa have been in a perpetual strug-gle for years. Political instability, severe levels of poverty and a lack of suffi cient infrastructure have all played their part in keeping this struggle alive. In order to redress the bal-

ance, a signifi cant input into the development process of the continent, through an establishment of a reliable and effi cient energy system needs to emerge – and quickly. For Tanzania, however, this ideological dream could become a reality in the very near future.

To ensure it does, William Ngeleja, Minister for Energy and Miner-als in Tanzania, is drawing upon all his experience in the private sector to work towards a better future for Tanzania, through the exploitation of both their energy and mineral sectors. In doing so, Ngeleja hopes that it will reignite the stagnant socio-economic state of the nation and attract the attention of potential private investors.

As the southern nations of Africa continue to struggle for energy, Tanzania fi nds itself promoting peace in an attempt to attract further exploration and future investment.

William Ngeleja, Minister for Energy and Minerals for Tanzania, opens the lid on Tanzania’s plans for the future.

Exploration in peace

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“Th e other thing that the government is trying hard to improve at the moment is the infrastructure that is in existence today, because one of the reasons we fed that shortage was due to poor infrastructure. Once it is improved, we believe that the loss that is experienced now will be reduced. Another eff ort that we are involved in is working hand in hand with the relevant provisional parties to start using gas. Once we start doing this, it will help us to reduce the current costs that we are incur-ring. Th e ultimate objective is to purchase this through government institutions or through the government itself, because in terms of the law, the government can be a procuring entity. We are looking at all of those options.”

Indeed, with gas being a far cleaner fuel, there is a sense of unavoid-able pressure from the international stage to be more carbon friendly. Ngeleja admits the presence of this pressure, but makes it clear that they are also looking at the justifi able aspects of the situation; how they would go about it and how it would be managed are all questions that need to be answered. Ngeleja fi rmly believes that it’s the government’s intention to be self-suffi cient and to have reliable and secure power in the country. One such potential step forward lies in the new mining act. However, the potential to change taxation rates both within and outside the industry could have a knock on eff ect for the Tanzanian government.

“Well, the new mining act will not aff ect the taxation in the existing mining industry. Th e new mining act is in-tended to address all the weaknesses and the shortcomings that we have identifi ed over time due to the implementa-tion of the 1997 mining policy and the 1998 mining law. What we are saying is intended to address all those shortcomings and weaknesses that we have identifi ed. In order to make this new mining act eff ective, we’ll have to synchronise with the other existing laws which operate hand in hand with the mining legislation.

“Th ere are quite a number of laws that also need to be amended with a view for addressing the weakness-es and shortcomings that we have identifi ed over time. It’s not something that is going to negatively impact because we consider it. Th e whole process has been engaging all these

players. In December we ran a two day workshop that we had invited all the players, especially mining companies, large and small, to participate in the process.

“We wanted to be all inclusive and not leave anyone who isn’t en-gaged in the process, because at the end of the day the ownership of that law would be for all of us and not zoned by the government. We don’t want to leave a chance for complaining later that we weren’t thoroughly engaged or consulted, so it’s going to be a good thing because it impacts all of the parties.”

Selling safetyAnother factor that has already made an impact on Tanzania is the

public optimism of Ngeleja in discovering oil within the region, and how such discoveries have already started to benefi t the country. “I’ve said on a number of occasions,” affi rms Ngeleja, “that we are very optimistic because we look at the number of the larger companies that have come to Tanzania to do exploration for oil and gas and the infl ux is very positive. Today, we’ve got more than 13 companies that are doing exploration for oil and gas in the country; we have production and sharing contracts with a number of them – more than 20. And this year is going to be even more promising because now drilling has started one of the companies, Tullow, has started drilling.

“Th ey are drilling because they have established; they’ve got the motivation to get to that level of drilling. We are very optimistic for the simple reason that we look at the number of companies that have come to explore in Tanzania. One thing that I can assure them of is that Tanzania is a proper and conducive-based nation for investment. Th is is a

democratic country, but looking at the geographic location of Tanzania you fi nd that Tanzania is a risker area for investment because whoever invests in us – be it mining, in oil and gas, in other sectors – will be investing in our six landlocked countries that border Tanzania.

“Also, peace is one of the essential ingredients for investment, and Tanzania is a peaceful country. Actually, in most cases it’s referred to as the most peaceful country on the African continent. We believe that these fac-tors make Tanzania very competitive in terms of investment and explora-tion. But also the law; Tanzania respects rules of law. Th e process of how we conduct business in Tanzania is very diplomatic and the government has been trying hard to make sure to improve the legal framework, but also the

policies of the country and the institution.”Th is sentiment of improving Tanzania’s

legal framework remains core to progress-ing the country in terms of its exploration and

attracting further investors. In addition, pro-moting Tanzania as a peaceful country will speak

volumes to such potential. But in order for it to be fully realised, it is consistency that will ultimately

need to prevail. Th en, and only then, can Tanzania prove itself as a pioneer in peaceful exploration for the southern

nations of Africa.

“One thing that I can assure them of is that Tanzania is a proper

and conducive-based nation for investment"

William Ngeleja graduated with a degree in Law from Dar es Salaam University in 1994 before going on to work as an Advocate for PricewaterhouseCoopers up until 2000. Currently, Ngeleja holds the position of Minister for Energy and Minerals for Tanzania.

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portunity to demonstrate the capacity of local companies to deliver successfully on mega projects. “Trail Surveys has extensive physical and site management survey experience and the capacity, infrastructure and expertise to tackle a project of this magnitude,” says Trail Survey’s CEO Philip Schalekamp.

Medupi’s civil works component includes the construction of all the concrete foundations and structures, the building work and the construc-tion of all auxiliary works – the water treatment plant, auxiliary boilers,

coolers and substations. It also includes backfi ll, road construction and earthworks.

South Africa and Eskom face continual problems with the skills crisis. “Local people are receiving train-ing as part of the contractual agreements for the civil components of the Medupi projects,” says Schalekamp. “Trail Surveys are also providing onsite training in survey skills. We recognise that there is a major survey skills defi ciency in South Africa with a resultant severe impact on our industry, especially on productivity, ac-curacy, quality and safety issues.”

A company within the Trail group of companies, the Technology Surveying and Mining Academy (TSMA) is a CETA-accredited training service pro-vider to the construction industry. TSMA is accredited to present the South African Qualifi cation Authority’s (SAQA) registered National Certifi cate in Surveying (NQF 4). TSMA has rapidly established a reputation for excellence in the fi eld of surveying training and recently signed a three-year national contract with ESKOM to provide training and skills development in the fi eld of Geomatics.

Th e construction of the Medupi power station is already having a signifi cant eff ect on the lives and the economy of the small community of Lephalale (formerly Ellisras). Th ere are currently approximately 8500 workers on site and this number is expected to peak at 10,000. Lepha-lale’s gross domestic product (GDP) is expected to increase by about 95 percent a year as a result of the power station construction activities, with about 40 percent of the project cost spent locally.

SURVEYING PROJECTS AND DATA MANAGEMENT AT MEDUPI

Trial Surveys’ Philip Schalekamp explains the intentions behind South Africa’s Medupi power plant.

Trail Surveys (Pty) Ltd, engineering survey specialists in partnership with Panel B Consultants JV (comprising of Arcus Gibb, SSI and Knight Piesold), are currently responsible for the consulting surveying at Eskom’s Medupi power plant project, Lephalale, in South Africa’s

Limpopo Province.Th e need for Eskom to provide reliable and suffi cient electricity

is critical for industrial and sustainable development in South Africa. Eskom is the world’s eleventh-largest power utility in terms of generating capacity. Th e company generates and distributes approximately 95 percent of South Africa’s electricity and supplies 60 percent of the total electricity consumed on the African continent.

Th e Eskom Medupi Power Station project (Medupi) is one of several projects aimed at solving the current energy crisis in South Africa. Eskom has several power diversifi cation options but they are insuffi cient to meet the forecast demand for electric-ity over the next 20 years – coal fi red options are still required for expansion during this period.

Medupi, due for completion in 2017 with the fi rst unit scheduled to be commissioned in early 2012, will be a six-pack dry cooled coal-fi red generating plant, comprising some 4 700 MW of installed capacity. It will utilise high-tech supercritical boilers, which will operate at higher temperatures and pressures than older boilers, giving greater effi ciency and conse-quently better use of natural resources.

Trail Surveys, a Pretoria based company with a southern, northern and eastern African footprint, provides a multidisciplinary surveying service in the fi elds of civil engineering, civil construction, hydrography, mining, cadastral and architecture. Th e company has a diverse and extensive client base that includes various government departments, municipalities and consul-tants in Southern Africa and contractors and civil consultants in other African countries.

Projects such as Medupi off er South African companies the op-

ASK THEEXPERT

Philip Schalekamp is the CEO and founding member of Trail Surveys (Pty) Ltd. His vision and tenacity have taken his company forward in terms of its substantial expertise and capacity. Schalekamp is also an executive director of the geomatics training academy TSMA (Pty) Ltd. He holds a National Diploma in Surveying and is registered with the South African Council for Professional and Technical Surveyors and the South African Geomatics Institute.

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TSMA Ad Next to Artical.indd 1TSMA Ad Next to Artical.indd 1 1/4/10 11:38:021/4/10 11:38:02

The business challenges involved in the execution of mammothpipeline projects worldwide are numerous and complex. In thiscomplicated world, relationships are all-important – amongclients, contractors, sub-contractors, suppliers, and of course, gov-

ernments and local communities impacted by pipeline construction.The International Pipeline and Offshore Contractors Association (IPLO-

CA) exists to support and foster these relationships, provide a forum for shar-ing ideas and to engage all members of the pipeline supply chain whilepromoting the highest standards in the pipeline industry and maximising useof new technologies.

Headquartered in Geneva, IPLOCA currently boasts 106 corporatemembers – key international pipeline and offshore contracting companies aswell as their subcontractors – and 115 associate members who represent themanufacturers and suppliers of vital products, equipment and services to thepipeline industry. It also has four academic members.

The association membership is truly global, composed of companies inAlgeria, Argentina, Australia, Austria, Belarus, Belgium, Brazil, Bulgaria,Canada, China, Denmark, Egypt, France, Germany, Greece, Hungary, India,Iran, Italy, Japan, Kazakhstan, Korea, Lebanon, Malaysia, Mexico,Netherlands, Poland, Romania, Russia, Saudi Arabia, Singapore Spain,Sweden, Switzerland, Syria, Turkey, UAE, UK and USA.

DUCTtales


Adam Wynne Hughes details the achievements and priorities of the InternationalPipeline and Offshore Contractors Association (IPLOCA).

2010: KEY PRIORITIES

Value to members and recognition of IPLOCA by key oil andgas stakeholders

Health, safety and environment: To promote the commoninterest of members and foster a high level safety cultureacross the industry

New technologies: To stimulate industry-wide technology,processes, and contractual relationships for pipeline projects

One-on-one engagement of members around the worldthrough increased number of local and regional meetings inlocal languages

Increased involvement with training and professionalorganisations to facilitate and publicise careers in pipelineconstruction

PIPELINES

IPLOCA_mar10 13/04/2010 09:34 Page 76

Pipeline innovationPipe laying methodology has changed little in the last 40 years, despite

technological advancements in almost every other field, but members of theassociation are working together to seek opportunities for improvement thatwill benefit the entire industry.

To this end, a First Edition of Onshore Pipelines: The Road to Successmade its debut in September 2009 at the association’s 43rd AnnualConvention in San Francisco, the result of a multi-company collaborationunder the IPLOCA umbrella. Some 45 companies participated, includingBredero Shaw, Caterpillar, CCC Group, Entrepose, Fluor, Gulf InterstateEngineering, Heerema, Land & Marine, Rosen, Saipem, Serimax, Spiecapag,Tekfen, Technip, NACAP, Volvo, Willbros, BP, Chevron, ENI, Petrobras andothers.

Around 100 individuals attended meetings and workshops and con-tributed their time and expertise to the production of this document, whichdescribes state-of-the-art project development and proposes new executionpractices and equipment for onshore pipeline projects.

The 372-page document, now available online at the IPLOCA website,presents in considerable detail onshore pipeline construction phases fromfront end loading through contract development, analysis and managementof risks, to project execution.

A two-day meeting in March 2010 in Geneva addressed development ofthe Second Edition of Onshore Pipelines: The Road to Success.

Advances in pipeline technology are actively encouraged by the associa-tion, not only via the Novel Construction Initiative but also under the moregeneral umbrella of New Technologies. To this end an award, sponsored byBP, is given every other year at the IPLOCA Annual Convention

Safety firstHealth, Safety and Environmental Management are of paramount im-

portance to IPLOCA members. Each year the individual member companiesprovide their Health and Safety statistics to the association and these are madeavailable in aggregate to the members who can monitor their progress in re-lation to the industry at large.

Environmental management – complicated because the physical cir-cumstances of projects vary so much – is similarly at the forefront in discus-sions and monitoring. Each year IPLOCA grants awards in Health and Safety(sponsored by Chevron) and every two years makes awards in EnvironmentalManagement (sponsored by Shell), also presented at the Annual Convention.Clearly, standardisation of process will make for better familiarity, greater ap-

plication and therefore better results all round, and IPLOCA is working to fa-cilitate this as part of its own agenda.

The human factorYet perhaps the most serious challenge for the pipeline construction in-

dustry remains the lack of manpower. IPLOCA, along with many industrymembers, is seeking solutions in this area and through the working of itsTraining Committee is embarking on specialist seminars, while polling itsmembers around the world for their needs and feedback.

Most recently, IPLOCA has organised a training seminar designedspecifically for pipeline managers on “Communication Skills in anIntercultural Environment”.

“The pipeline construction industry remains a great challenge,” saidIbrahim Zakem, Managing Director of Zakhem International ConstructionLimited in Kenya. “We must manage people involved at all levels on the job,and nurture good human relations with communities of different beliefs andcultures all along the pipeline route. Our pipeline engineers are always thereto foresee any problems and resolve them in a timely way through trainingprograms, fostering good relations with the people directly involved irre-spective of their ethnicity, creed or culture. We have appointed a team of ex-perts on a permanent basis to plan and resolve the problems that mayconfront us on ongoing or future pipeline projects.”

IPLOCA is proud to represent and serve its membership base worldwidefor the benefit of the industry at large. Dialogue and collaboration under theIPLOCA umbrella can do much to move the industry forward at a time of un-precedented demand for water, oil and gas. n


For more information visit www.iploca.com

IPLOCA: THE FACTSFounded: 1966 in Paris Member companies: 106Associate member companies: 115Countries represented: Algeria, Argentina, Australia,Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, China,Denmark, Egypt, France, Germany, Greece, Hungary, India,Iran, Italy, Japan, Kazakhstan, Korea, Lebanon, Malaysia,Mexico, Netherlands, Poland, Romania, Russia, Saudi Arabia,Singapore Spain, Sweden, Switzerland, Syria, Turkey, UAE,UK and USA

2009-2010 LeadershipPresident: Adam Wynne Hughes, Land & Marine ProjectEngineering, UKFirst Vice President: Karl Trauner, Habau, AustriaSecond Vice President: Osman Birgili, Tekfen Construction,TurkeyTreasurer: Phil Bond, Pipeline Induction Heat, UKImmediate Past President: Bruno de La Roussière,Entrepose, France

“We must manage people involved atall levels on the job, and nurture

good human relations withcommunities of different beliefs andcultures all along the pipeline route”

IPLOCA_mar10 13/04/2010 09:34 Page 77

Tell us about Dynamic Security TechnologiesLtd the company.Cosmo Moyo. Dynamic is a privately ownedTanzanian / South African company with a jointventure in Equatorial Guinea and a representa-tive in Nigeria. The company specialises in the in-stallation and services of electronic security andfire management products.

What are the products and services that thecompany specialises in?CM. Our core products are Access ControlSystems, automatic fire extinguishing systems,video surveillance and CCTV monitoring sys-tems. Access Control Systems are a wide and var-ied field but to simplify it we should answer twoquestions. Firstly we should ask what entranceneeds to be accessed, the answer to this will de-termine the barrier applicable to the solution e.g.gate, turnstile, traffic boom etc. Secondly, weshould ask what kind of technology will operatethe barrier? Is it the Biometric finger reader, a re-mote control, loop detection, proximity tag etc.

Dynamic has a variety of barriers such asmotorised automatic gates, traffic booms, turn-stiles and doors. These barriers may be operatedor controlled by biometric finger readers, prox-imity tags, remote controls or swipe cards de-pending on the requirements of the client.However it should be noted that the Biometric is gaining popularity becauseof its fraud proof characteristics. Furthermore these Access Control Systemsmay come as simple stand-alone systems or sophisticated IT intergrated sys-tems with time barring and entrance barring capabilities. These are solutionsto monitor who enters where and when and are a perfect tool for workersclocking in and out of work.

Coming to CCTV monitoring and video surveillance we also find thatthe situational requirements determine the solution. We have simple stand-alone systems for up-market residences, small shops etc and we also get ad-vanced internet protocol based systems with remote viewing, zoomingcapabilities and multiple monitoring points. Mines, airports, power genera-tion plants and large corporations are but some of the entities employing thesestate of the art video monitoring systems. Video monitoring has also been de-veloped as a fire smoke detector.

Our other major product is the automatic fire detection and extinguishsystems using anti-combustion gases. We install these in premises wherewater sprinklers can’t be used. These premises include computer server

rooms, power generation control rooms, tele-coms control rooms and dragline engines.

Please note that halogen gas has been out-lawed and replaced with FM200, which is envi-ronmental and human friendly.

Earlier you briefly touched on the videosmoke detectors, can you please tell us moreabout this product.CM. Well, the automatic fire extinguishing sys-tem is a good conventional product, at least in itsdetection aspects. But good is not good enoughin a world of excellence.

It should be noted that the ionisation detec-tion process takes a little longer and is hardly ap-plicable in very large warehouses let alone wideopen high risk areas. How do we monitor anddetect fire in petroleum depots, petrochemicalplants and lumber yards?

The video smoke detector turns to solve allthese challenges, by detecting fire at its very in-ception. It records the sequence of events so thatengineers may later study and prevent the causeof that fire in future. It also acts as a security cam-era. The video smoke detector is a must for allnew fire detection installations and a great com-pliment to be added on existing installations.

It looks like your organisation covers a sub-stantial area in the security and fire management industries. Can you tellus who your target markets are?CM. The African economic growth is fuelled by resources, telecoms, powergeneration, banking and oil and gas companies. It is natural for us to followdevelopments in these industries and claim our share of the action. Some ofour products such as the automatic remote controlled gates are targeted at ex-ecutive up market residences and embassies. Dynamic is also registered by theSouth African Police Service as its security service supplier and adviser.

What other peripheral products do you offer?CM. We sometimes get requests for full body scanners from airports andmines. I am glad to say we have proven products in this field. We also do elec-tric fencing and perimeter intrusion beam detectors. n

Security and fire management in Africa


Cosmo Moyo of Dynamic Security Technologies Ltd highlights the emergence ofthe electronic security and fire management industry in Africa.

EXECUTIVEINTERVIEW

Cosmo Moyo is Managing Director for Dynamic Security Technologies Limited. Moyo wentinto the Electronic Security business in 1995. Dynamic Security Technologies Ltd initiallyspecialised in automatic remote controlled gates and later diversified to include electronicand fire security systems. A former locomotive engineering technician, Moyo is studyingfor an MBA, and currently lives in Cape Town with his family.

“Coming to CCTV monitoringand video surveillance we also

find that the situationalrequirements determine

the solution”

DYNAMIC SECURITY_mar10 13/04/2010 09:33 Page 78

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Almost all of the bulk fluids used in themodern world are transported bypipeline. Crude oil, natural gas, refinedproducts, water and countless others. To

travel through a pipeline, fluids must be pumped.Pumping requires pressure to be exerted on the fluidand this pressure creates stress in the pipe wall. Stresscan cause failure – and failure of a pipeline could becatastrophic. Clearly, the integrity of any pipeline isof paramount importance.

Any vessel or structure subjected to stress mustbe regularly maintained and inspected. Aircraft, boil-ers, buildings – even regular servicing of an automo-bile are typical examples. But, unlike pipelines, all ofthese are easily accessible. Whether traversing land orsea, pipelines are buried, so the only way to ensuretheir integrity is from the inside. Obviously mainte-nance engineers or inspectors cannot be sent througha pipeline, so it is necessary to devise some other means of doing this. The an-swer is to use tools, which are known as pigs. Pigs can be used for cleaning andremoving unwanted gases or liquids – or more sophisticated ones for detect-ing damage, corrosion, movement of the pipe and other potentially seriousproblems.

Pigs travel through a pipeline driven by the product flow – they are in ef-fect free moving pistons. They can be subdivided into two broad categories:conventional pigs which are used to perform maintenance tasks such as clean-ing or drying, and in line inspection (ILI) tools that provide information aboutthe pipeline’s condition. Conventional pigs are usually very simple devices fit-ted with brushes and seals and are used on a routine basis. ILI tools are verydifferent. They carry sensors to detect and locate any problems as well as thebattery power and computer equipment to enable them to analyse and storeall the resulting data.

To get some idea of the degree of sophistication required for ILI tools,consider the inspection of a 36-inch (approximately 1000mm) diameter, 100-mile pipeline (i.e. a relatively short and not especially large pipeline). The ILItool, may travel at speeds of up to 16 kilometres per hour which means it mustinspect, analyse then store the data for 13 square metres of pipe wall every sec-ond for around 10 hours.

Pipeline pigging has been practised for well over 100 years, but aspipelines became longer and strategically more important, pigging had to betaken more seriously. Various ILI tools were made, but the real breakthroughsbegan with the advances in computer technology in the 1980s. During this pe-riod, there was a proliferation of different pigs and services offered whichmade it difficult for the pipeline owners and operators to know what wasavailable and to decide which, if any, was best for their particular circum-stances.

It became apparent that although it was important for operators to bemade aware of the pigging products and services available to them, it wasequally important for the suppliers to be made aware of the needs of the op-erators.

In 1989, Scientific Surveys Limited and Gulf Publishing Company heldthe first Pipeline Pigging Technology Conference in Houston, Texas. It wasrealised that, as most prospective members would be there anyway, theHouston Conference would be an ideal place to hold a meeting to discuss and

finalise the formation of a trade association. The aims and objectives had tobe established and prospective members had to be recruited. The pigging in-dustry was very keen to get together and before the second conference openedin Houston in 1990, there were 19 provisional members. After the necessarylegal formalities, the Pigging Products & Services Association or PPSA was fi-nally incorporated on May 1, 1990.

Since then, PPSA has been a remarkable success story. Membership hasrisen from 19 to 90 and now includes virtually every organisation in the worldthat is involved with this very specialised and important activity. n

The whole hog


Lloyd Pirtle celebrates 20 years of the Pigging Products & Services Association(PPSA) and reviews why its creation was so important.

PIPELINES

For more information visit www.ppsa-online.com

“Pipeline pigging has been practised forwell over 100 years, but as pipelines became

longer and strategically more important,pigging had to be taken more seriously”

PPSA_mar10 13/04/2010 09:36 Page 80

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The United States Department of Transportation(DOT) has called for the use of non-shieldingpipeline coatings on natural gas pipelines that meetthe new regulations for increasing Maximum

Allowable Operating Pressure (MAOP). When selecting apipeline coating, the ‘non-shielding’ characteristics may bemore important than other issues that are normally considered.

The Pipeline and Hazardous Materials SafetyAdministration is now responsible for implementing the reg-ulations for the US DOT. The Code of Federal Regulations,Title 49: Transportation, Part 192 – Transportation ofNatural and Other Gas by Pipeline, has recently added Part§ 192.112 which says:

“Additional design requirements for steel pipe using al-ternative maximum allowable operating pressure. For a newor existing pipeline segment to be eligible for operation at thealternative maximum allowable operating pressure (MAOP)calculated under § 192.620, a segment must meet the follow-ing additional design requirements. Records for alternativeMAOP must be maintained, for the useful life of the pipeline,demonstrating compliance with these requirements.”

Under this new section pipeline operators are allowedto raise the MAOP of certain natural gas pipelines if theymeet or exceed certain listed requirements. One of these re-quirements is part “(f) Coatings”.

The pipe must be protected against external corrosionby a non-shielding coating. Coating on pipes used for trench-less installation must be non-shielding and resist abrasionsand other damage possible during installation. These are sig-nificant statements that require those companies that wantto raise the MAOP of these pipelines for more through-putto meet or exceed these requirements.

‘Non-shielding’ in this context means if the coatingsystem adhesion fails and water penetrates between thepipe and the coating, corrosion on the pipe is significantlyreduced or eliminated because cathodic protection (CP)current is able to protect the pipeline in these disbondedareas. To adequately protect underground pipelines, acoating must conduct CP current when disbondment oc-curs. Today’s pipeline coatings are effective and provide adielectric shield to CP when properly adhered to the sur-face. The problems begin when the coating does not ad-here to the pipe surface.

Shielding on the other hand diverts CP current fromreaching the pipe surface allowing corrosion to occur. Whendisbondment or blistering occurs, most coating types divertcurrent from its intended path, therefore, CP current can notadequately protect the external surfaces of a pipe. The so-called “cathodic protection shielding effect” prevents ca-thodic protection current to flow to areas submitted tocorrosion risk under disbonded coatings.

Each coating manufacturer attempts to make coatingsthat will not fail. The problem is all pipeline coatings fail forone reason or another. Those that fail by disbonding are themost susceptible to CP shielding. Each type has particularproperties that allow it to be shielding or non-shielding to CPcurrent if disbondments occur.

There have been, and continue to be, many articles writ-ten concerning the problem with pipeline coatings thatshield CP. Though no coating system can be totally immuneto CP shielding, some have a proven track record of beingnon-shielding.

Disbonded coatings that shield CP have been and con-tinue to be a problem for the pipeline industry. The failuremode of the coating is critical. This is the reason for these USDOT regulations for the companies that want to increase theoperating pressure for certain natural gas pipelines. Ofcourse, there are other requirements that are not discussedin this paper that must be followed to meet this regulationchange.

Many in the pipeline industry recognise the importanceof using pipeline coatings with proven non-shielding char-acteristics. To minimise or eliminate the CP shielding issuesencountered in the past, more pipeline companies are usingand requiring these non-shielding pipeline coatings no mat-ter the MAOP. Does your company? n


New regulatory requirements forcoating systems

Richard Norsworthy examines the new US regulationsgoverning non-shielding coated systems.

ASK THEEXPERT

Richard Norsworthy haspublished numerous papers oncorrosion control, and authoredthe chapter on Coatings forUnderground or SubmersionService in Uhlig’s CorrosionHandbook. He is a NACEinstructor for courses in basiccorrosion, CP, and CoatingsUsed in Conjunction with CP. In1995 he started Lone StarCorrosion Services, whichbecame part of PolyguardProducts in 2007.

“Coating on pipes used fortrenchless installation must be

non-shielding and resistabrasions and other damagepossible during installation”

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SAMI (DPS) AD:25 June 9/4/10 14:59 Page 2


L I G H TEvery year, African households and small businesses spend upwards of US$17 billion on lighting, dominated by fuel-based sources such as kerosene; yet despite this huge expenditure, consumers receive little value in return. Two projects aim to change all this – Marie Shields fi nds out more.

LET THERE BE

SPECIAL FEATURE

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UNESCO estimates that 1.6 billion people, mainly in developing countries, have no access to elec-tricity. One in four people today obtain light with kerosene and other fuels, as well as candles and battery-powered torches. However, these sources are either polluting, ineffi cient, or both.

An examination of the ineffi ciencies of kerosene by the Lumina Project proves illuminating: users of kerosene lighting pay 150 times more per unit of useful energy services than those in electrifi ed homes with compact fl uorescent lamps (and 600 times more than for tradi-tional incandescent lamps). Th e Project estimates that, in aggregate, this fuel-based lighting costs the world’s poor US$38 billion each year, and results in about 190 megatons of CO2 emissions, the most important greenhouse gas.

Th e Lumina Project, founded by Dr. Evan Mills of California’s Law-rence Berkeley National Laboratory in the early 1990s, aims to cultivate technologies and markets for aff ordable low-carbon off -grid lighting in the developing world. Mills and his team began exploratory work on fu-el-based lighting in the early 1990s, In 2001 the Project received a small amount of funding from the International Energy Agency, allowing it to prepare an estimate of the global energy, cost and carbon burden of electric and off -grid lighting.

In addition to Mills, the project team includes 17 people from the Laboratory and Humboldt State University, and from Kenya. Mills and Humboldt’s Dr. Arne Jacobson serve as principal investigators at their respective institutions.

Th e Lumina Project’s fi rst mean-ingful funding came in 2007 from Th e Rosenfeld Fund of the Blum Center for Developing Economies at UC Berkeley, followed later that year by grant from the Global Roundtable on Climate Change to work at the Millennium Village in Sauri, in Western Kenya. Th is work enabled the establishment of a collaboration with Humboldt, through which the project team members were able to embark on in-depth lab work evaluating product quality, and spend more time in the fi eld understanding end-user needs and preferences.

Th e Project’s initial eff orts inspired the International Finance Cor-poration and the World Bank to create their own initiative, Lighting Africa, which aims to support the global lighting industry in develop-

ing aff ordable, clean and effi cient modern lighting and energy solutions specifi cally for Sub-Saharan Africans. According to the Lighting Africa’s website, it hopes to leverage global expenditures on fuel-based lighting to develop, accelerate and sustain the market for modern off -grid light-ing alternatives that off er African consumers considerably more value for their money.

Th e initiative aims to provide effi cient lighting technologies, such as those containing the latest LED, fl orescent, human-cranking and solar, so that consumers have access to energy sources that are clean, effi cient

and reliable, at price points that are comparable to typical expenditures for kerosene. A further aim is to create a level playing fi eld rather than picking winners or specifi c technologies to endorse, supporting all who are willing to commit to market development.

Th e initiative involves both interna-tional as well as country-based activities. In parallel to international activities that are designed to benefi t all of Africa, e.g. the web portal, international confer-ences and the product quality assurance programme, Lighting Africa is conduct-ing specifi c on-the-ground activities in several African countries.

In addition to the initial work con-ducted in the pilot countries of Ghana and Kenya, subsequent programme ac-tivities are currently being implemented in Ethiopia, Rwanda, Senegal, Tanzania and Zambia. Drawing from the lessons learned from Lighting Africa’s pilot phase, programme activities will be refi ned to maximise their eff ectiveness,

country operations will be expanded to other African countries, and the programme will create tools and methodologies that can be extrapolated across Africa (and potentially beyond) to foster the continued spawning of market formation over time.

• Global Environment Facility

• Energy Sector Management Assistance Program

• Public-Private Infrastructure Advisory Facility

• Renewable Energy and Energy Effi ciency

Partnership • Department for

International Development

• Asia Sustainable & Alternative Energy Program

• Good Energies, Inc.• Norway• Luxembourg• Netherlands

Lighting Africa currently has a budget of roughly US$12 million provided by a variety of partners, including:

“Th e Project estimates that, in aggregate, this fuel-based lighting costs the world’s poor US$38 billion each year, and results in about 190 megatons of CO2 emissions, the most important greenhouse gas"



However, lack of availability of the relevant technology could prove to be a hurdle. According to the Blum Center for Developing Economies, while some lighting manufacturers have been inspired by the eff orts of the two projects to enter the off -grid LED market, there are currently no commercially available off -grid lighting products that achieve a satisfac-tory balance between end-user cost and lighting product performance.

For this reason, Lumina project researchers are developing and implementing an international framework for quality assurance by the end of 2010. Th e Lumina team is also working to ensure there are at least fi ve high-quality, aff ordable off -grid lighting products available in Kenya and other African markets, with the hope that this will accelerate devel-opment of viable off -grid lighting products. Th e Project is also carrying out other activities analysing and documenting the health benefi ts of switching from kerosene lighting to LED-based off -grid lighting.

In another positive development, US Energy Secretary Steven Chu announced at the Copenhagen climate conference last December the

launch of a new initiative to promote clean energy technolo-gies in developing countries. Th e Renewables and Effi ciency Deployment Initiative (Climate REDI) will accelerate deploy-ment of renewable energy and energy effi ciency technologies in developing countries.

Climate REDI includes three new clean energy tech-nology programmes and the funding needed to launch a re-newable energy program under

the World Bank’s Strategic Climate Fund, including the Solar and LED Energy Access Program, which will accelerate deployment of aff ord-able solar home systems and LED lanterns to those without access to electricity. Th is programme is expected to yield immediate economic and public health benefi ts by providing households with low-cost and quality-assured alternatives to kerosene.

With this new programme coming on top of all the work currently being done by both the Lumina Project and Lighting Africa, it seems the future could fi nally be looking brighter for the millions of Africans currently living without access to aff ordable, non-polluting sources of power.

THE FOLLOWING TYPES OF SERVICES ARE CURRENTLY PROVIDED BY LIGHTING AFRICA:

Market information Lighting Africa is conducting research in order to share critical business intelligence with companies and organisations interested in entering the Africa off-grid lighting market. Such information includes data on consumer needs, lighting uses and preferences, current expenditures on off-grid lighting, potential distribution channels, prevailing policy and regulatory frameworks and sources of fi nance.

Quality assurance In close consultation with other stakeholders, Lighting Africa is developing a multi-pronged quality assurance program aimed at helping consumers make informed purchasing decisions while also aiding manufacturers in improving product quality to best meet consumer needs and expectations.

Business linkagesStrengthening ties between the global lighting industry and local service providers to design, develo, and deliver lighting products to off-grid communities in Africa. For example, Lighting Africa facilitates business linkages through its interactive business-to-business website, a social networking tool which convenes the industry around topical areas.

Consumer awarenessIn order to inform consumers about modern off-grid alternatives to fuel-based lighting such as kerosene lamps and empower them to make educated purchasing decisions, Lighting Africa is planning to conduct consumer awareness and information campaigns in a number of African countries.

Source: Evan Mills, International Association of Energy Effi cient Lighting and Lawrence Berkely National Laboratory

Blue: Annual global expenditures on electric lighting equalling US$185 billion

Orange: Annual global expenditures on fuel-based lighting equalling US$35

Fuel-based lighting accounts for 17 percent of the global lighting market, a demand of US$38 billion

US$35

US$185

BILLON

“Th ere are currently no commercially available off -grid lighting products that achieve a satisfactory balance between end-user cost and lighting product performance"


SE Solar.indd 1SE Solar.indd 1 1/4/10 11:24:581/4/10 11:24:58


Can you tell us about Skylit Ltd?Idika David. Skylit Tech. Co. Ltd. (STC) is an electrical engineering fi rm, incorporated in Nigeria in response to the growing challenges and needs of the industrial and power sectors of the Nigerian economy and the challenges of global climatic pollution. For over two decades, Nigeria has suff ered under a sporadic power supply, sub-standard electrical products and spares, coupled with the paucity of technical expertise.

However, a thorough assessment of the myriad problems of both the industrial and social infrastructure of the economy led to the birth of Skylit Tech. Ltd. Having grown core competencies and exper-tise in design, installation, operation and maintenance of all aspects of alternative Power Systems, Skylit is signifi cantly positioned to blaze the trail through innovative technology and services.

What are your areas of com-petence?ID. We have specialised skills in design, installation, opera-tion and maintenance of power and alternative power systems such as: electrical installa-tions; alternative electrical power systems including solar and wind systems and power turbines. We also deal in elec-trical power and back-up systems that stretch to UPS, inverters and DC systems.

What are the advantages of alternative power systems over fuel powered generators?ID. A wonderful benefi t of alternative power systems is that they are en-vironmentally friendly. Th ey do not produce gases or other by-products like other generators do, which poison the environment and anybody that happens to be nearby. Th ere are enough pollutants in today’s so-ciety, so choosing an alternative power system is an environmentally sound choice. Another benefi t is that alternative power is renewable, hence is harnessed free of charge and will not run out like other sources

such as diesel and coal. Alternative power systems are the best choice where there is no easy way to get electricity to a remote place. Another advantage is that they are noiseless and above all, alternative power systems are very cost eff ective.

Are you suggesting that alternative power systems are more cost effective than fuel powered generators?ID. On a long-term basis defi nitely yes, and on a short-term basis in most cases yes. Take for instance a medium sized organisation that

spends an average of four million naira on fuel a year, in thirty years, they would be spending a hundred and twenty million naira on fuel without factoring infl ation, now such an organisation could install a solar powered system which we guaranteed for a minimum of 30 years at a fraction of that price.

While on the short term, take for instance a Nigerian bank, with a network of about 200 branches that needs to power its security lights, se-curity gadgets, access systems and computer servers aft er closing hours (7pm to 6am). To do these they have to keep their fuel generators run-

ning through the night, and in keeping their fuel generators running through the night they use millions of naira in fuel. Adding this to the cost of the generators and the cost of maintaining the generators – but with a special alternative power system from Skylit Ltd and at a rate more aff ordable than fuel generators – such organisations can power their computer servers, security lights, security gadgets, access systems etc, all through the night all year round without any additional cost.

Idika David oversees affairs at Skylit Techniques Limited. David obtained a BSc in Engineering from Ahmadu Bello University, Zaria, with an MSc in Power. He has over 16 years’ experience in engineering designs, installations, operations and maintenance, and vast experience in rural and urban electrifi cation, industrial and manufacturing automations, power and alternative (renewable) power systems. He is a member of the Nigerian Society of Engineers (NSE), and a Chapter President of the Full Gospel Business Men’s Fellowship International (FGBMFI).

EXECUTIVEINTERVIEW

Riding the new power waveIdika David discusses the steps Nigeria is taking to hasten the introduction of

renewable energy.

SKYLIT’S VISIONTo carve a niche as a market leader in electrical technologies and power products that are environmentally friendly and cost effective.

OUR MISSIONTo become the preferred company for major electrical engineering solutions in Nigeria and the West African sub-regions.


Solar energy, in common with other renewable energy sourc-es, has been enjoying a surge in popular support, both here in the US and internationally. But questions remain, primar-ily around reliability and ease of transmission. Mike Taylor, Director of Research and Education for the Solar Electric Power Association, points out that solar energy is more com-

plicated than most people think. “Solar energy presents a little more complex picture than traditional

renewable or centralised generating sources,” he says. “Th ere’s a market for distributed solar as well as centralised solar. With centralised solar proj-ects, there are a large number of announcements out there, a few thousand megawatts; at that scale, these projects will be able to fi t into the existing transmission system.

“But as the industry scales up even further, we will start to see transmis-sion issues, similar to the wind industry, as being a limiting factor within the centralised project growth. Th ey may diversify away from corridors where wind energy is; solar and wind areas of development aren’t neces-sarily going to overlap, so they’ll potentially be separated from one another. Solar is not going to necessarily align with the existing wind projects.”

Taylor does concede that the general issue of transmission is simi-lar to that of the wind industry, with both sectors experiencing rapid growth. “Th ese solar projects need to fi nd ways and transmission paths to get into the grid and fi nd their way to load, and there are a number

of groups and studies out there that are working diligently on this. Th e problem for wind industry is here and now, whereas with the solar indus-try, the centralised projects are largely still in the announcement phase, so we haven’t run up against any practical, tangible limitations based on installed projects at this point.

“You can certainly forecast that that would happen, but I think we’re still a few years away from seeing that as being the driving force in the in-dustry. A lot of these announced projects have fi nancing and permits to get; they have a number of issues to work their way through.”

Taylor points out that by contrast, the other half of the solar industry, distributed solar, is a unique niche in which residential, commercial and utility projects are being done on a localised level. He explains that this is being accomplished, in some cases, through random disbursement, when a homeowner or commercial businesses decides to utilise solar. “A lot of the utility announcements have been for large aggregated projects that are individually one to two megawatts,” he adds. “Th ey sit well within the dis-tribution system, but they’re announcing them in chunks, anywhere from fi ve megawatts up to 500 megawatts.

“So you’re seeing these distributed projects being proposed and moving forward at a scale that matters. I call them ‘distributed power plants.’ Th e utility puts in one to two megawatt projects at 100 diff erent locations around their territory, so they can fi t within the urban grid on the distribu-tion system. Th ey can be strategically located so they’re not overburdening

SOLARENERGY

Power & Energy talks to Mike Taylor of the Solar Electric Power Association and the Solar Energy Industries Association’s Rhone Resch about the challenges facing solar as it begins to play an ever more prominent role in the renewable energy mix.

Saving up the sun

Mike Taylor

Name: Mike Taylor

Company: Solar Electric Power Association

Position: Director of Research and Education

“A lot of the utility announcements have

been for large aggregated projects that are

individually one to two megawatts”

PROFILE

Taylor/Resch.indd 92Taylor/Resch.indd 92 13/4/10 09:10:1613/4/10 09:10:16


“You have two factors that are reducing the risk of that variability. One is geography: you’ve got all of these solar systems spread out over a 50 to 100 mile area. Not all of them are going to be increasing in power at the same time, so you’ve got geographic risk mitigation. You could also see, as utilities move forward with smart grid initiatives, smart meter initiatives and a small amount of storage integrated into these systems, that it becomes a much more powerful way to deploy this distributed resource.

“It’s no longer about passively reacting to the sun and injecting the power into the grid, it could become a very usable and tangible resource that utilities can deploy. But that’s still in the near future, when these do need a small amount of storage. You do need smart grid capabilities and better communication capabilities. So that’s a near to medium-term ideal.

“On a centralised system side, you have to again bifurcate it by technology, whether it’s concentrating solar power and you’re using thermal storage, or whether it’s photovoltaics. At this point, there are no large-scale solar storage announcements for photovoltaics. Th ere are no ready solutions for having a large amount of storage for centralised pho-tovoltaic projects. Th ere are for projects having 100-megawatts of storage that can deploy for an hour or two hours, but for larger projects it’s not technically or economically feasible.”

Th e storage picture is looking better for thermal storage on the con-centrating solar power side. Taylor cites as an example of this projects in Spain that have integrated solar thermal storage, and research being done in the US, including the announcement for a project with fi xed hours of storage in Arizona called Solana, for which Arizona Public Service will be purchasing the power from Abengoa Solar.

Th ermal projects generally have slower ramp rates than PV and wind, as Taylor explains: “Th ey can adjust the fl ow rates of the fl uids inside and, even without storage, manage them in a way that’s a little more friendly to the grid. Th ere’s a better buff er in the way they oper-ate, because thermal fl uids have an inertia that you can manage. For example, if you know that you see clouds coming across the horizon, you can manage that.

one distribution time. We’re starting to see this model being explored, es-pecially by the California utilities, and Duke Energy in North Carolina and PSE&G in New Jersey are also stepping up with this model.”

According to Taylor, the growth of distributed solar changes the nature of the issues: instead of it being a transmission problem or a problem on the distribution line, those installing distributed solar must work with local city and building and permitting offi ces, signing leases with large big-box warehouses or big-box offi ce stores. He believes it is an innovative diversifi -cation that is unique to the solar industry.

Storage issuesOne of the major issues related to solar energy, and renewables in

general, is the question of storage. Taylor says that at the distribution level storage is not as critical because it is integrated into the system. It’s associ-ated with load in a lot of cases, and the relative amount of solar to the load is not so much that it causes huge problem. However, as penetration levels increase on any particular localised area, isolated issues do start to occur.

From an operational standpoint, Taylor says that having these indi-vidual solar systems with a small amount of storage – on the order of 15 minutes to an hour – could assist in the coordination of the variability that a utility might experience. “As we get higher and higher penetrations on the distribution level, a small amount of storage can go a long way to helping 75 percent of the problem.

History of SEPAThe Solar Electric Power Association is a non-profi t, business-to-business organisation that works primarily with electric utilities across the United States. Its aim is to bridge the gap between the solar industry and the electric utilities, helping to facilitate the use and integration of solar power.

The Association aims to help the electric utilities with their understanding of markets and technology and to help create dialogue between other electric utilities, so they can learn from each other, as well as with the solar industry. SEPA has more than 700 members, 110 of whom are electric utilities. Most of the major utilities across the United States are members of SEPA, and there are also a large number of solar industry members interested in learning about the utility market and utility issues so they can understand how we can facilitate the market through and with utilities, rather than against and opposed to facilities.



Long before the arrival of the American Recovery and Reinvestment Act, Rhone Resch and the Solar Energy Industries Association was working behind the scenes to highlight solar as a viable solution to America’s energy worries. With some of the world’s best solar, the US is well placed to create energy from the sun and

has the opportunity to leverage solar to play a pivotal role within the country’s energy mix.

However, Resch does admit that solar currently has some shortcom-ings. “Although solar isn’t more cost eff ective at the moment, it certainly has the potential to be much more cost eff ective than traditional sources of fossil fuels,” he says. “In large part it’s because you manufacture solar. You don’t mine it or drill for it, and because of that you’re able to scale up the manufacturing and drive down costs per unit; and as we do, so you will see the price of solar continue to go lower and lower while the traditional forms of energy continue to go higher.”

New jobsSolar’s emergence as a viable alternative energy source is already

beginning to show across the US. Attempting to kill two birds with one stone, President Obama’s tactic of deploying further jobs into the solar industry will hopefully meet the need of America’s rising unemploy-ment rate. Obama has pledged to invest US$150 billion into creating fi ve million new ‘green collar’ jobs – solar manufacturing and installa-tion forming an important part of that number.

Resch notes that those states that have been hardest hit by the recession – Ohio, Michigan, Indiana and Illinois – are those that are now creating and fi lling solar employment positions. Workers made unemployed in the automotive or other manufacturing sectors are now turning to solar; tradesmen are being employed to install solar.

“When you install solar you’re using the tradesmen, the backbone of our economy,” says Resch. “We’re re-employing those who have been

let go by industries that can no longer survive in the United States; and we’re giving new opportunities in an industry that is sustainable, that provides good quality jobs, and well-paying jobs for the future.”

Despite this, integrating solar as a vital part of the country’s energy mix is no easy task. In the second quarter of 2009, the SEIA spent US$54,000 lobbying the government on solar power, whereas Chevron spent US$6 million to further its own interests. Th e capital funds of fossil fuel corporations are much greater and have tradition-ally held the lobbying power in Congress. Key to overcoming this is presence, explains Resch. He notes that every quarter the association

“But pairing it with three to six hours of storage does allow you to deploy this resource in a way that can benefi t the utility grid and the project, in the sense that the better your project can perform and correlate with peak, providing a fi rm capacity backup, the better the economics of the project should be. You should be compensated for that benefi t you’re providing to the grid.”

Coming eventsAt the time of our interview, SEPA was busy with preparations for

the annual Solar Power International conference in Anaheim. Th e con-ference, organised jointly with the Solar Energy Industries Association, attracts more than 22,000 attendees from both electric utilities and the solar industry.

“It’s in the top two in the world, in terms of the size of the confer-ence,” Taylor says. “It’s an expo and a conference, with more than 45 ses-sions that attendees can go to. We also have a large exhibit hall that has more than 800 exhibitors and in a few hundred thousand square feet.

“Anyone who is anyone in solar in North America and the western hemisphere, and increasingly, internationally, comes to this event to understand and meet with electric utilities. Th at’s where SEPA’s niche is, in coordinating events and sessions and workshops for electric utilities – networking events so people can meet each other and get to know the solar industry. Th e solar industry is there. Th e fi nance people are there. Th e installers are there. Pretty much anyone who is into the solar market goes to this conference.

“Th ere are a lot of solar and renewable events occurring: they’ve in-creased precipitously in the last two years. Because our event is organised by the two solar non-profi ts in the United States, we like to think we’re neutral to the profi t motive. Revenues from this drive the work that SEIA and SEPA do to try to help feedback programmes for, in our case, utili-ties, and in SEIA’s case, for the solar industry. We’re taking the proceeds from this event and driving them back into the respective membership and industries to help facilitate the marketing even further.

“What always surprises me is that the conference holds 4000 or 5000 people. Th e other 15,000 to 20,000 people are coming to go to the expo and to network and to learn about technology and to have meetings with each other. Th ey’re not there to sit in conference rooms and watch pre-sentations. Th ey’re there to do business.”

Mike Taylor is Director of Research and Education for the Solar Electric Power Association.

Solar Power InternationalSolar Power International (SPI), previously called Solar Power Conference and Expo, was created in 2004 when the Solar Electric Power Association (SEPA) and the Solar Energy Industries Association (SEIA) joined together in partnership to create a business-to-business solar conference and expo.

With an industry growth rate of more than 40 percent per year, the two associations felt there was a need for a single event in which industry could come together with potential customers, policymakers, investors, and other parties necessary for continued rapid growth.

The event, held annually at the end of October, has grown from 1100 attendees to more than 22,500 in fi ve years.

Rhone Resch of the Solar Energy Industries Association explains how solar fi ts into the energy puzzle.

“We cannot wait 10 years before we start to address climate change”


is increasing its presence and educating Congress on the value of solar energy. “It’s important, not necessarily to just look at the numbers of dollars spent, but to look at some of the accomplishments that we’ve achieved over the last year and to see the return on the investment of those dollars.

“For example, in the bailout bill in Oc-tober of last year we got a long-term exten-sion and expansion of the tax credits for solar energy in the United States, and that’s a 30 percent tax credit for businesses. It was expanded to be a 30 percent tax credit for homeowners as well, which is an eight-year extension, so that’s a huge victory provid-ing stability for our industry to grow in the United States.”

He also points to the 19 provisions in the stimulus bill for solar energy companies, sig-nifi cantly more than the oil and gas industry. Th e SEIA has been very strategic in working with Congress to ensure its policies and in-centives are heard, and the market is likely to expand quickly. “What’s critical is that we’re getting the industry engaged and to appreci-ate the role that Washington can play in the energy sector,” says Resch.

“Th at means inviting their congress-men out to ribbon cuttings or openings of new factories. To invite senators to briefi ngs on energy. To visit them when they come to Washington and tell them about the new em-ployees that they’re hiring and the new tech-nologies that they’re developing. Combined,

Rhone Resch

Name: Rhone Resch

Company: Solar Energy Industries Association

Position: President and CEO

“A very clear price signal in the marketplace

will allow solar to compete more with

traditional fossil fuels”

PROFILE



what this creates is a grassroots capability that has the potential to be second to none, and the grassroots is absolutely critical if we are going to be successful in Washington.”

Since the American Recovery and Reinvestment Act was an-nounced, the DOE has systematically been providing awards and funding for solar, for R&D projects or university partnerships to ad-dresses the technology barriers that create the high cost of solar usage. Th e number of solar awardees for the funds is high, but Resch explains that the technologies aren’t commercial yet. “We certainly can expect the R&D investment to result in new products in the next several years,” he says.

He notes the success of the provisions of the stimulus bill for the solar industry, which are now starting to pay dividends, such as making the investment tax credit refundable. By turning it into a grant, applicants can now receive a check from the federal government for 30 percent of the cost of the system, rather than a 30 percent tax credit. As well as this, the stimulus bill also created an expanded loan guarantee programme and a new tax credit for manufacturing.

“All of these are critical to address some of the challenges we face in a reces-sion economy. Specifi cally, that those companies who used to invest in solar projects last year may not this year, because either they’re not loaning money on the debt fi nancing or they don’t have the tax equity on the tax side, and subsequently we found at this time last year that investment dollars were drying up for the solar industry. We were able to address both of those issues in the stimulus bill and we’re starting to see in the third quarter the demand for solar increase signifi cantly due to these new programmes,” he says.

Solar transmissionOne of the worries surrounding a big change in America’s fuel mix

is how the various types of renewable sources will fi t into the grid, given that the transmission structure was built for the traditionally dominant fossil fuel resources. Resch explains that solar fi ts in many ways; one being distributed generation capacity. “Solar generates electricity at the point of consumption. By putting solar on your roof, you’re putting a small power plant on your home or your business that will provide a substantial amount of its energy, so it relieves some of the stress on the grid because those electrons come from the solar panels on your roof rather than a power plant that may be 100 miles away.

“So greater use of distributed generation certainly helps to allevi-ate stress on the grid and cuts down on the need for major expansions. Th e second is that solar can be used by utilities to alleviate some of the hot spots: certain areas of the grid have more congestion than others. By putting solar on buildings strategically in those areas, again, you can alleviate that stress on the grid.

“Th e third is that you can build solar farms in the dessert or on landfi lls or on brown fi eld spaces or other areas and can directly con-nect to interstate transmission lines. Th ese solar farms could range from

fi ve megawatts to 500 megawatts, and depending on the transmission infrastructure you can connect some smaller projects to existing trans-mission lines that have the capacity to absorb more electrons. Now, you may not be able to build a 500 megawatt power plant on that line, but you certainly can build a 50 megawatt power plant on that line. You will see solar start to improve the effi ciency of transmission by making sure that the transmission lines are being as fully utilised as possible. “Finally, in the long run, we need to build new transmission in the United States. We have partnered with the American Wind Energy As-sociation and developed a study and recommendations called Green Power Super Highways. It outlines all of the recommendations that are necessary in order to build new transmission in this country. It takes more than 10 years to build a new transmission line, and we cannot wait 10 years before we start to generate electricity from solar farms in the southwest. We cannot wait 10 years before we start to address climate

change, so the siting and the fi nancing and the permitting of these new transmission lines is critical,” he says.

Resch believes that it won’t be long before solar reaches a par with traditional fossil fuels. Solar is already cost competi-tive in certain areas of the country and is a viable cost alternative for natural gas. Natural gas is used to generate peak elec-tricity, as well as base loads, and aligned with the time that solar can be maximised.

He notes that solar is displacing the most expensive electrons to con-sumers: “Peak prices in California vary depending where you are, but in PG&E they’re US$0.37 per kilowatt hour and in San Diego Gas and Electric in the south, they’re US$0.42 per kilowatt hour.

“Th ose are double the current price of electricity, and solar is the lowest cost option in those areas already. It is critical that state govern-ments create an accurate price signal for electricity that not all electrons are the same. Th at you can’t have the same rate 24 hours a day, seven days a week. Rather, when the utility is paying more for its electricity, consumers should pay more for their electricity. Th at becomes a very clear price signal in the marketplace that will allow solar to compete more with traditional fossil fuels.”

Public attitudes have long supported solar; promoting its benefi ts to the legislatures is the hard part. A recent poll conducted by Kelton Research on behalf of the SEIA showed that 92 percent of the American public want the US to use more solar energy. Support from solar tran-scends party lines and economic strata.

“People strongly support greater use of solar energy – there are not many things in the world that achieve a 92 percent public support rate. It’s putting us up in a category with puppy dogs and ice cream in terms of popularity and that is fantastic, but what we also need to do is to be smart about it and to make sure that it’s not just a technology that people like, but a technology that people start to utilise and that we get Congress and the state governments to support greater use of solar energy.”

Rhone Resch is the President and CEO of the Solar Energy Industries Association.

“A very clear price signal in the marketplace will allow solar to compete more with

traditional fossil fuels”


APPROPRIATE TECH.indd 1APPROPRIATE TECH.indd 1 1/4/10 10:28:301/4/10 10:28:30


Installation was completed between 2003 and 2004, and each is functional to date. Th is scheme has proven very eff ective in ensuring reliable power supply for the PC labs, which serve as internet cafes and computer training centres for the community around the schools aft er school hours.

Th e system powers the 20 PCs, a server, VSAT, a print-er, eight lights and four fans for the labs. Reports indicate that unlike the generator-powered centres, which worked for only a short time aft er installation due to the lack of a

sustained source of fueling or generator breakdown, the solar-powered centres continued working stress-free for years. Th is was the case even without any maintenance arrangement put in place, as it was not contained in the contract agreement.

In November 2002, 35 secondary schools and colleges were selected in the six geopolitical zones of Nigeria as the pilot phase for PC Labs for Schools (Diginet Centres), funded by the Education Trust Fund Nige-

ria in collaboration with SchoolNet Nigeria.Each site was provided with the DireqLearn thin

client solution, which included 20 network computers with a server, VSAT connectivity (KU Band), educational content – GCSE curriculum (UK), and technical training for 140 teachers.

One of the major challenges of the scheme was the lack of access to a stable power supply, as the grid supply is either not available at all or sporadic and as such not reliable. Fift een of the schools were selected to be powered by solar photovoltaic, while others were to be powered by generators.

Pamtronics Nigeria Ltd. was subcontracted to perform the installation of the solar power system for the 15 schools. Th e requirements for each site contained the following main components: solar modules (5170 peak watts), comprised of 94 pieces of 55 watts Iso-foton modules; inverters (6000 watts), two units of Mas-tervolt 300 watts; charge controllers (120 watts/24 volts, six pieces of 20 A Steca controllers); and batteries (4000 AH/12 volts), 20 pieces of 200 AH/12 volts (Fullriver).

Solar-powered PC labsMarkus Pam explains the benefi ts of using photovoltaic solar panels to power computer equipment in Nigerian schools.

The schools that had solar panels installed as part of the PC Labs for Schools project were:

Government Secondary School, Akim Qua, Calabar, Cross River StateGovernment Girls College Dala, Kano, Kano StateGovernment Technical College, KanoRumfa College, Kano Gboluji Grammar School, Ile Oloju, Ondo State Government Secondary School Gwale, Kano College of Arts and Islamic Studies, Minna, Niger State Loretto Special School, Adazi, Anambra State Government Science School, Akim, Calabar, Cross River State Government Science School, Biliri, Gombe State Government Technical College, Kumo, Gombe State Government Day Technical College, Gombe, Gombe State Government Science School, Gombe, Gombe State Government Girls Secondary School, Doma, Gombe State Government Secondary School Tarauni, Kano, Kano State

Markus Pam is Managing Director and CEO of Pamtronics Nigeria Ltd.

ASK THEEXPERT

“One of the major challenges of the scheme was the lack of access to a stable power supply”

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What are the challenges involved in providing al-ternative energy solutions to large scale and retail clients?Derek Nwafor. Th e greatest challenge to us on this cam-paign is a lack of awareness of these systems and the qual-ity assurance that comes with them. In our interactions with the public, we fi nd that once this is overcome, other issues are easily addressed. As in other countries, build-ing architecture and even ergonomics hardly take into consideration the possibility of clean energy systems, the failure of conventional systems or the rise in the cost of energy being experienced around the world today.

Consequently clients have to optimise all electrical devices and fi ttings to derive value from alternative energy systems. Un-informed fi nancial institutions also pose a challenge, as lenders in Africa are seemingly unaware of the viability of alternative energy as an investment and as such are unwilling to support such ventures. Th e recently revamped Nigerian pension system currently holds funds in excess of US$3 billion which can be invested in alternative energy projects across the country.

What is the government’s role in enhancing the pro-liferation of alternative energy systems in Nigeria?DN. Th e Nigerian government needs to provide more support for clean energy technology in the country. On the legal front, the laws guiding the generation of power by private entities needs to be amended to allow market forces to determine pricing and allow power stations to choose their clients. Current legislation states that a por-tion of each station’s output must be channelled directly into the national grid; this is paid for by the government at a rate fi xed by themselves.

Th e import tariff for alternative energy genera-tion systems should be suspended for at least 20 years. Subsidies and grants should be provided for various institutions (for example in health, agriculture, science and technology development and education) to support a transition to solar or wind energy. Th e government itself should broaden its deployment of sustainable systems beyond solar street-lights to creating sub-stations for localities. Also tax breaks can be given to companies that are engaged in generating alternative energy.

Start with the sunThe future of business in Africa belongs to companies who can adapt to the shifting economic landscape: nowhere is this more critical than in energy cost management. Alternative Energy provides a watershed that a growing number of companies are keying into. Derek Nwafor, CEO of Solidlight Limited, expands on the subject.

Derek Nwafor is CEO for Solidlight Limited, a leading alternative energy company in Lagos, Nigeria. A former Banker and Business Development Executive, Nwafor’s career has spanned the fi nancial services, logistics and corporate surrport services sector. An alumnus of the prestigious University of Ibadan, he has also taken management courses at the Lagos business school.

How can alternative energy help to jumpstart small and medium-sized enterprises in Nigeria?DN. Coming from successfully deploying Grid-tied in-verters with capacity totalling over 100kvA, we propose the development of mini and medium scale industrial parks for businesses preferably in light manufacturing, food processing and some service providers. Th ese parks will be powered with solar energy, providing clients electricity for 16 out of every 24 hours. We believe that with consistent, predictable and well-priced power, most start-up businesses in Nigeria can survive the crucial fi rst fi ve years of business.

What methods can be used to wean big business from the use of fossil fuels?DN. Th is can be achieved by the sensitisation of senior management, shareholders and business owners through such forums as their Annual General Meet-ings. Th e long-term value to be derived by deploying alternative energy systems outweighs the comforts of retaining antiquated practices, which cost several times more than sustainable energy systems over time.

Change in this vital area of any business has to be understood and driven from the top, and as men-tioned earlier, shareholders are the preferred audience as they stand to benefit from increased growth of their investments.

EXECUTIVEINTERVIEW

“Th e import tariff for alternative energy generation systems should be suspended for at least 20 years”

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Plug in to Predictable Power

Email: [email protected]: 234 1 891 2007 • 234 (0)806 406 8009 • 234 (0) 808 299 5701

Just as the sun rises to herald the start of each business day your energy source need not be any less abundant and dependable. Talk to us today and learn how organisations and communities are

making use of freely available energy. ...EVERYDAY

SolidLight.indd 1SolidLight.indd 1 9/4/10 10:33:049/4/10 10:33:04

WINDPOWER

Christian Egal, CEO of EDF Energy Renewables and Christian Kjaer of the European Wind Energy Association tell Huw Thomas that the forecast for wind energy is extremely good.


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ing. “One of the other challenges is the grid,” Egal continues. “How to connect it has to be a large scale approach rather than an individual ap-proach for a single wind farm. Maybe in the long-term perspective it will be a European approach because if we build a wind farm for the UK in the North Sea, it could also be connected to Sweden or Denmark. Maybe we’ll see in the next decades a power grid all over Europe, based on off -shore wind farms located all over the seas?” Th is vision of an integrated European power infrastructure is one that crops up regularly in talks with those in the industry. Given the speed and effi ciency that normally characterises major pan-European projects, you would be forgiven for thinking such a future remains a long way off . While Egal concedes that it remains a huge undertaking, his confi dence that it is achievable is in-fectious. As far as he is concerned, renewable energy, and specifi cally wind, is an idea whose time has come. “It’s very exciting,” he says. “Wind energy is the most dynamic industry all over the world, even in this very tricky period it is still growing.”

Counting the costWhile there is no argument that Europe desperately needs new

sources of power if it is to remain successful, critics of renewable energy contend that it is simply not cost eff ective without massive gov-ernment subsidies. So can renewables ever off er value for money?

“It’s a complex approach,” Egal admits. “Renewable energy all across the world is still supported by public subsidy. Th e schemes that the countries select are diff erent. Th e Renewables Obligation Certifi ca-tion (ROC) mechanism is specifi c in the UK, but in every country there are mechanisms that make renewable investment possible. Because of the current energy market there is no possibility to make a renewable asset profi table. We are not far away, not at all. For example, last year, when the market price was not particularly high, it was at the level where it was much higher than the cost of renewable energy. But to make the operators decide on the investment they need a certain level of visibility on the long-term. So all renewable energies are, lets say, incentivised by public schemes, which make the investment possible. Th e principle of renewable energy is that it starts from public, govern-ment willingness, worldwide European and country willingness to do it, and each country provides to the operators the appropriate scheme to make it happen. So is the mechanism proposed to the operator in the UK enough to be profi table? Yes. If it was no, there wouldn’t be any capacity, so it is profi table. Of course, there are some projects that are more profi table than others, and it’s down to a professional approach to make the diff erence.”

While this makes a certain amount of sense, it doesn’t answer the question of whether renewable energy will ever be able to stand on its own two feet. Th e current system allows the power companies to stay

When EDF Energy and EDF Energy Nouvelles announced their part-nership to form EDF Energy Renewables in June 2008 it un-derlined a growing consensus that the industry needs to get serious about developing alterna-

tive power sources. Furthermore, the new company’s establishment in the UK ref lects the country’s massive potential as a generator of wind energy. As an island nation, the surrounding seas offer access to one of the most abundant supplies of reliable wind anywhere in the world. When we meet up with CEO Christian Egal in EDF’s central London office, the UK’s suitability is something he is extremely keen to stress. “Renewable energy is growing everywhere in the world. But in this country the mix is different,” he says. “Wind energy has had huge growth for five years, but what is specific to the UK is that Great Britain is an island so we can take advantage of this location with all the renewable energy linked to the sea. Offshore wind is definitely the main renewables potential in the UK, as well as wave and tidal energies, which are very promising as well. But those are still at the latest development phase.”

Plans for UK wind energy can only be described as ambitious. Th ere is currently about 8GW of installed or planned capacity in place. Th e UK government’s strategic energy assessment recently reported that British seas could eventually supply a further 25GW of power, enough to serve the needs of all the country’s homes. But while there exist tremendous possibilities, actually realising them will require a great degree of eff ort. “It’s a huge challenge,” Egal agrees. “Nobody has ever built a wind farm 100 kilometres off the coast in the North Sea. It will be diffi cult but what is absolutely fantastic in this business is that everybody is very confi dent in the capability of the supply chain and the players to deliver.” Obviously, the costs associated with such a huge project present diffi culties of their own. Installing turbines that far off the coast, even in the comparatively shallow North Sea, is a far more logistically trying operation than sitting them onshore. Farm sites are picked for their exposure to wind, which means they must be built in oft en very diffi cult conditions. Building off -shore takes twice as long and costs twice as much as a similar project on land. But according to Egal, the UK Crown Estate’s plans are helping to mitigate this problem by targeting huge capacity. Th is encourages all the major players to get involved and creates signifi cant economies of scale. “If you were to put one turbine in the North Sea, it would never happen,” Egal says. “If you want to put 500 or 1000 wind turbines there, that is much more achievable.”

Building the wind farms is far from the only challenge. Getting the power they generate to where it is needed also requires some new think-

Christian Egal of EDF Energy Renewables looks at the sustainability of wind power in the UK.



technologies are improving every year,” Egal confi rms. “It is amazing because we now have some that are 160 metres in diameter that generate 6MW. If you look at a wind turbine only 20 years ago, they were only 15 or so metres in diameter and generated only 50KW. Who would’ve imagined 10 years ago that we could build and install some 6MW wind turbine? As an example, EDF Energy Nouvelles, part of EDF Energy Group, has stakes with other partners in a wind farm of 30MW capacity with just six wind turbines. It is based 30 kilometres off shore and each wind turbine has a rotor diameter of 126 metres.”

And the technology is still developing. Egal tells us about projects working towards turbines able to produce 10MW and turbines based on fl oating platforms that can exploit the wind in deep-sea locations. With the huge capacity of today’s turbines it is not technology that is holding the more widespread adoption of wind power back. Rather it is outside factors that limit its large-scale implementation. Th e aforementioned issues with the grid are a major stumbling block, the lack of high power transmission lines making it extremely diffi cult to get energy from the remote areas where it is generated to the urban centres where it is most needed. Additionally, the UK planning process can throw plenty of

obstacles in the path of speedy expansion. “To develop wind energy is really a very long-track with a lot of hurdles and

particularly in this country,” Egal confi rms. “Th e plan-ning system is very long-track, but I think it more or

less always happens. And if we have an ambitious target, within a certain amount of time, you have to take into account certain diffi culties. But I would rather have a slow planning process where you gen-

erally get permission rather than a quick one where you do not.”

On the whole though, Egal seems optimistic about the potential for wind and other renewable energy, both

in the UK and across the world. “When we look at the overall capacity we have 120,000MW installed all over the world,” he says. “Last year, for example, we installed more wind energy than gas or coal. Wind energy has developed more in European countries and the US than in developing countries, but if you look at the possibility of wind farms in China for example, there is no limit.”

Th at is not to say we should expect to see a major uptake of renew-able energy in the developing world all that soon. Egal sees it as a re-sponsibility of those in more affl uent nations to keep working on the problem until it can become aff ordable for everybody. “I think the fair approach has been taken by the European countries but renewables remain more expensive than coal, gas and so on,” he says. “European countries and the US are paying to make these technologies as prof-itable as the other technologies in the near future. Can we really ask the developing counties to pay for these technologies? I don’t think so, and I think we recognise that and that we have to pay this premium. Climate change, which is the basis of these developments, has given us huge responsibilities across Europe, so I think it is very fair approach for us to pay for the fi rst stages of the development and allow others to take advantage of these developments when it is more fi nancially viable. In terms of the possibility to implement wind energy in these countries, it could happen very quickly. It’s just about timing.”

in the black, but only on the back of government and consumer sup-port. Will renewable energy ever be able to compete on a level playing fi eld? “I would say yes,” replies Egal. “Th e ROC mechanism is providing some additional revenues to renewable energy up to a certain level of achievement. If the global target is reached, the ROC mechanism will stop. Currently the principle is the target is to achieve nine percent of power from renewables. Th e actual value is four percent. So the ROC mechanism is there to incentivise the utilities to deliver some renew-able energy up to certain level of achievement and when the end target is reached, the public support will stop. It’s logical.”

It is only natural that renewable energy is initially going to cost more than more traditional sources of power. While coal and gas have a massive installed base, wind and the like are eff ectively starting from scratch. If we are serious about our commitment to getting more and more of our energy from renewable sources, these short-term costs are something that we will just have to bear. In any case, as tradi-tional sources such as oil and gas start to dwindle and become harder to access, the market may make renewable energy considerably more competitive.

Unfortunately the current economic climate is particu-larly unfriendly. Sources of funding are tight and in many areas there seems little appetite for any investment that isn’t going to quickly bring big returns. Nonetheless, Egal is clear that EDF Energy Renewables remains on track to hit its targets. “It does have some impact, but more in the short-term,” he says. “We have to deliver a gigawatt by 2012, so we have to be very at-tentive to the whole capability to invest in this wind farm in this diffi cult period. If we speak about the next phase to deliver even by 2015 or 2020, it’s another story. Th at will require a huge amount of money, but we can hope that it will be aft er the crisis that we are facing now. I am not saying it will be easy, it will be billions and billions of euros to invest in these facilities. As you know EDF as a whole has some other projects as well, so it is challenging.”

Further alternativesTh ough EDF Energy Renewables’ principal focus is on wind power,

due to its comparative maturity and the UK’s geographical suitability, it is also exploring other potential avenues. “We are looking at wave and tidal technologies, which are not as mature as wind energy, even off shore.” Says Egal. “We rely on the R&D department within EDF, we are looking at wave technologies as well. We are very attentive and we are following feedback on this work. Our business is to invest in modern technologies with good profi tability, so it could happen in the next two or three years.” Solar power also remains in contention. Th ough the UK isn’t known for its warm weather, solar energy’s success in the not particularly sunny Germany demonstrates that, as technology improves and becomes less expensive, it does have a part to play in Europe’s re-newable future.

But from a UK perspective, it is wind that is going to provide the big gains. Wind is one of the most well-established renewable energy sources and has developed rapidly over the past few decades. “Wind

Each wind turbine has a

rotor diameter of 126 metres


With renewable energy targets needing to be hit by 2020, Christian Kjaer explains how the unlikely can become possible if the correct logic is applied. The European Union has set a binding target of 20

percent of its energy supply to come from wind and other renewable sources by 2020. In order to achieve this 20 percent energy target, more than one-third of the European electrical demand would have to come from renewables, with wind power expected to de-

liver 12-14 percent. So how realistic is this target? Well, Christian Kjaer, Chief Executive of the European Wind Energy Association (EWEA) believes that this is completely possible. “To reach the targets set out by the European union we would have to increase total wind power capacity in Europe by 9.5 gigawatts per year over the next 12 years. Given that we increased wind power capacity by 8.5 gigawatts last year, it’s not an ambitious aspiration,” he explains. It is quite clear that wind energy will take the lion’s share of the energy target that the European Union has set, but the target also calls for hydro resources and biomass to be fully util-ised. “I would say it’s certainly achievable to reach 20 percent renewables although whether we meet the projections for biomass remains to be seen. It’s all down to how eff ectively the members are going to implement renewables – that’s the big question mark,” adds Kjaer.




While it is widely believed that the development of wind energy across Europe is limited by existing power infrastructure, Kjaer be-lieves that this is not a hugely limiting factor in regard to the physical grid. “We do have some restrictions if we look at certain regions of Europe. Th ere are regions in Spain where you get 40-50 percent of the electricity coming from wind, so there are certainly limitations on how much you can expand there unless you do something with the internal infrastructure of the grid itself,” he explains.

ChallengesSo, challenges do remain in terms of how the grid is operated. Kjaer

believes that it is vital to start putting together plans that allow investors to invest in new infrastructure, as projects take an extended amount of time to get on track. “We certainly need to change operations and look at the way we operate our grid if we want to meet the 2020 renewable target. Th ere is no question that the biggest challenge over the next 10 years is grid infrastructure. Th e grid is already a limiting factor because of course we don’t have electricity infrastructure off shore. We need to start planning to prevent this becoming a challenge in the future,” says Kjaer. “In short there are limitations, certainly off shore with the lack of grid, but we need to stop and put in place measures that concentrate on companies investing and building in the sector. Th ere are some institutional problems with this, such as a lack of funding, but we simply haven’t invested enough in our infrastructure for decades now and that needs to change if we want to make a dramatic change in the way we get our energy in the future.”

While off shore wind is more expensive due to the sky-high costs of foundations and the grid that needs to be built off shore, it will always pro-vide a larger wind resource. Kjaer hopes that as more economies of scale are introduced to the system and wind turbines are mass-produced, off shore will be recognised for the stronger resource that it is. “Th e off shore market in Europe is more or less at the level that we were in 1992 and 1993 onshore, so we haven’t even come close to reaping the benefi ts and getting the cost reductions down in the same way as onshore in the last 20 years,” he says. “In order to do that we need economies of scale and that’s why it’s so impor-tant that you have some companies that are focusing very heavily on this, including in the UK, Germany and Norway, as well as France. But again off shore infrastructure is a much more imminent issue to solve compared to onshore because there aren’t any grids.”

Kjaer goes on to explain that the benefi t of improving off shore grids is that it is possible to build interconnections between countries that means it would be possible to improve the electricity and tracing of electricity over the borders of Europe, giving consumers the cheapest electricity possible. By planning infrastructure investment it will benefi t in terms of maximis-ing the exchange between various member states as well as putting the infrastructure where there are off shore wind resources or weight power resources and improve the functioning of the internal electricity market while meeting targets for renewables. “What we do in terms of off shore infrastructure is extremely important, and here we are in need of faster action than onshore in terms of new infrastructure. We need to fi gure out structures that allow us to make smart plans in how we build electricity infrastructure off shore at a bilateral or regional country level. It’s very much a similar challenge that we’re standing in front of as when we were build-ing the oil and gas infrastructure. We would like for that planning to be a

bit more international in nature, and a bit more co-ordinated among indi-vidual European countries than we saw with oil and gas because it makes sense in terms of electricity markets.”

Th ere is no doubt that grid infrastructure is going to be the most important issue to work on in the next decade, along with the develop-ment of the power market and a much higher degree of interconnection between the European member states. While it will be possible to learn something from the onshore infrastructure for increasing off shore wind farms particularly around grid development, Kjaer believes that from an infrastructure perspective we in Europe have never cared much about what happens on the other side of the border, which means it may well be harder to do so this time around. “Don’t repeat what we’ve done onshore because there needs to be co-operation in terms of infrastructure plan-

ning,” advises Kjaer. “Let’s not repeat the nationalistic approach that we have taken on for the last 100 years of onshore when we planned grids. Instead it’s even more important that we co-operate as the benefi ts of off shore are that much higher.”

Power generationAs Europe looks to expand both onshore and off shore wind genera-

tion capacity it becomes clear that wind alone cannot be responsible for all of our power generation because of the variable nature of wind power. So how exact a proportion of European energy can be realistically gener-ated by wind? Kjaer believes it depends on how big an integrated power system it is possible to construct, so the amount of wind energy put into the system at a European level depends on how integrated the European grid system turns out to be. Of course the bigger the geographical area, the more fi rm power is generated from wind energy so there is a huge benefi t in the geographical dispersion of wind energy. However, in order to get that geographical dispersion it means that the grid has to have the same sort of dimensions, which is why interconnections are so valuable because a more interconnected grid means that variability becomes irrelevant. “Th is is why we believe that the infrastructure is so important, and it’s not only about integrating wind energy but also about improving competition in the electricity market.”

Kjaer goes on to say that while no-one is suggesting that wind energy should provide 100 percent of all European Union power, if it was well integrated and utilised it could have a large segment of the electricity market. “If we used the enormous hydro resources that we have in Norway or Sweden for example, which complements wind energy extremely well, I have no doubt that we can have a system based on 100 percent renewable electricity, be it biomass, wind, large hydro,

“In short there are limitations, certainly off shore with the lack of grid, but we need to stop and put in place measures that concentrate on companies investing and building in the sector”



small hydro or geothermal, but it requires a complete change in our way of thinking about operating systems and requires that we start utilizing that.”

Indeed, Kjaer believes that there are no technical barriers to wind energy produc-ing 25-40 percent of Europe’s electricity. He highlights Denmark as having plans to use wind power alone to generate 50 percent of its electricity by 2020, and of course if that’s possible in a small geographical area like Denmark why shouldn’t it be possible Europe wide? “In reality there are no tech-nical barriers to having half of Europe’s electricity supplied by wind energy, but that will be beyond 2020, when we expect to be on target and see between 14 and 19 percent of our energy coming from here. By 2030 I see wind energy will provide at least a quar-ter of our electricity and I think there’s still quite a long way to go in terms of increasing wind energies,” explains Kjaer.

ProgressIn terms of moving forward, Kjaer

explains that the key projects currently un-derway in the European wind energy space are extremely interesting and that the sector is learning a great deal from these develop-ments. He also points to Eastern Europe as an interesting area, with Romania, Bulgaria and Poland in particular getting serious about renewable energy. “Th e speed at which the conditions have been put in place to attract investors in great,” says Kjaer. “It’s interesting to see how these countries have approached the whole debate about the renewables directive, putting in place measures in terms of grid access and payment frameworks.”

So how does Kjaer envisage the wind energy space progressing in the future as Europe reaches its 2020 deadline? “It’s a truly interesting time,” replies Kjaer, “because we have come from a past in which we actually didn’t need more new electricity generating capacity. We actually had excess capacity until a few years ago, which is no longer the case because we are shutting down old power plants and have to build new ones. What the European Commission is saying is that between now and 2020 we have to build approximately 350,000 megawatts of new elec-tricity generating capacity, which is equal to 50 percent of all capacity that’s currently running in the European Union.”

Kjaer explains that the interesting element over the next 12 years will be seeing where that capacity will come from – where wind will be in relation to its main competitors in terms of new electricity generat-ing capacity. “If we look at investments over the last 10 years, Europe

has really been investing in wind power and gas, and I think it will be really interesting to see how wind energy compares

in terms of cost with building a new gas fi red power plant,” he says. Kjaer sees three elements that are very much in wind energy’s

favour. Firstly that it is quicker to build a wind farm than a new coal or gas fi red power plant. Second is the fact that from 2013 coal and gas power plants will have to pay for every ton of CO2 that is emitted. And third is that with a coal or gas fi red plant it is vital to take into account future fuel prices in order to understand the cost of operations. “One of the main benefi ts of wind power is that the cost of carbon and fuel prices will be zero over the next 20 years of operation, whereas you can’t guarantee that for coal and gas fi red plants, you just don’t know what fuel and carbon prices will be.

“Th e competition over the next 12 years will be who gets to build those 350,000 megawatts that we need in the European Union and it will be between coal, gas and wind energy and with the current outlook for fuel prices, wind energy looks like an increasingly attractive investment.”

We increased wind power

capacity by 8.5 gigawatts last

year



In 2002, the continent of Africa received 148 MW of installed capacity for wind power generation – a mere 0.5 percent of the global total. Compare that with India, which in 2002 had a global market share of six percent, and it was clear to see that while

equatorial regions held an ability to successfully harness and utilise wind energy, for many that was far from the case. To redress the balance and fi ght Africa’s corner, the African Wind Energy Association (AfriWEA) was formed in the same year with the mission statement of encouraging manufacturers, developers, governments, renewable energy owners and individuals to promote and support wind energy development on the African continent.

The following November, it organised the second annual World Wind Energy Association conference in Cape Town, attended by over 1000 delegates from 50 different countries. Fast-forward to today, and its membership exceeds 90 people spanning 19 countries. It has evolved somewhat from its original inception, and now not only champions wind energy for Africa, but also provides a network through which support around the world can be given or obtained on wind energy matters. In addition, AfriWEA also hopes to facilitate consultation between all types of parties: the energy industry, local and national governments, academic institutions, not to mention the general public and other institutions concerned with the conservation of the environment.

Unfortunately, with funds being limited and current resources stretched, AfriWEA is limited to what it can do; still it shines bright with intentions for the future. Firstly, the organisation of local, national and international conferences, workshops and training courses will be an integral part of AfriWEA’s vision to spread valuable knowledge and experience throughout their membership and provide a more educated, coherent and united voice of support for wind energy. Perhaps more importantly

will be the task of changing people’s perceptions on wind turbines from a grass roots level; this means teaching for future generations as they will ultimately become their own wind harvesters. Highlighting the practical changes they can bring to their own communities has been, and will continue to remain, AfriWEA’s primary objective.

Acting as an advisory limb to the wind energy movement, AfriWEA also recognises the importance of delivering technology in an appropriate manner and provides equal support to large grid connected projects and smaller stand alone systems alike. This sentiment goes the distance to highlight the ease with which wind

energy could be harnessed on every level, whilst showing that AfriWEA is an association focused on wind energy integration for Africa, in Africa; of course, it hopes to introduce larger wind farms and projects from the international stage, but in order for this to become a reality, the smaller introductions need to be made fi rst.

After all, the introduction of wind energy to Africa will do far more than provide renewable energy for a continent that sorely needs it – it will also advance regional cooperation by

encouraging communication and collaboration between other African renewable energy committees. In doing so, the hope is to contribute to economic development, alleviate poverty, aid the protection of the environment and improve the quality of life for the people of Africa.

In this early phase, the Association is looking to increase membership so that it has a broader knowledge, experience and resource base. Membership is free in order to enable and encourage individuals to also obtain membership of their own national wind energy associations or the World Wind Energy Association. Becoming a member will bring you into a large network of experts in the fi eld from all across the continent and provide a forum through which ideas and experience can be exchanged. Only by creating, nurturing and implementing ideas from the ground up can the mission of AfriWEA be fully realised.

Catching the breeze

“Highlighting the practical changes they can bring to their own communities has been,

and will continue to remain, AfriWEA’s primary objective”

How AfriWEA is pioneering Africa’s wind energy movement to encourage renewable energy on the continent.


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The world of power generation thrives on the work of many through the inspiration of a few; evolving technology and updated methods have undoubtedly shrunk the distance between this dynamic in recent decades, yet it still re-mains true to its core. In order to achieve any substantial

gain, one must either carry the luckiest charm in the world – and still believe in faith – or work in harmony with diligence and risk in a fi eld that requires impeccable levels of experience and comprehension.

With 60 members of staff spanning fi ve departments, Allangba Faustin, Manager of Engineering and Production for PETROCI, is part of the latter. Overseeing all aspects of the company from drilling to reservoir, production and gas distribution engineering, Faustin takes an avid interest in everything PETROCI both upstream and down – including their marketing.

“Th is morning,” smiles Faustin, “I had a meeting with all fi ve of the departments to give them instruction and coordinate activity on the

platform and also on the gasoline units. Th ey’re the units that when we buy the natural gas, we take it through a system that extracts the heavy part of the gas, then we light that part before it is sent to the relevant industrial sites. Th is is what we do on a daily basis as the engineering and production managers at PETROCI.”

DiscoveryIn addition to the daily programme of checks and routines, PET-

ROCI have also undertaken vast levels of work with 3D reservoir model-ing, some of which has led to important commercial discoveries on the Ivory Coast.

“We make discoveries through seismic and various other techniques that can be used to have a prospect on another well that makes the dis-covery. We put all the data in our simulation model, which can help us set down a fi eld production plant. Th e model will tell us what we should drill at diff erent places and at which places we should drill to optimise

POWER GENERATION

With the industry of power generation being one of competition and logistics, Allangba

Faustin deconstructs his experiences within the fi eld and offers some advice on how to survive.

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our production. Th e model will also tell us the recovery factor, how much oil we can produce and for how long we can produce this oil. With the same model, we can display all the reservoir parameters such as fruit saturation, water saturation and the evolution of this kind of saturation during the lifetime of a fi eld. Based on this we can estimate the cost of a plant that we are going to put down to produce the fi eld.”

Essentially, the model details precisely which time the desired pro-duction will be delivered alongside how long the fi eld will be producing and how many wells need to be drilled in order to produce the fi eld. In addition, the necessary water quantities that need to be injected in order to support the reservoir pressure – and on the odd occasion how much gas is needed to perform a gas lift – are also registered by the model; while it is without doubt a model of com-plexity, it provides Faustin with all the infor-mation needed to optimise production. “Th is is how it works,” continues Faustin. “When I was just an engineer this is the work I was doing. Now I’m the manager I have staff doing this job every day at PETROCI for the company.

“Our biggest fi nding is a fi eld in CÔte d’lvoire that was made in 2001. Th ere’s water there ranging from 1500 metres to 2000 metres off shore. It is the biggest fi nding in deep water right now in the Ivory Coast and we have a reserve of around 200 million barrels of oil and about 150 TFC of recoverable and associated gas. Besides that, we also have a small discovery on the gas side in shallow water off shore.

“Th en we have our older fi elds like the Espoir fi eld that we have been producing for about seven years. Th is fi eld had been discovered by Feliz Petroleum back in the 1980s and had been produced for some time from 1982 to 1990. Since the oil price was declining, Feliz found that it was no longer economic and they abandoned the fi eld.

“In early 2000, Ranjha Oil came and took over the fi eld and started producing it with water injection and secondary recovery generators. Th is fi eld now produces at an extremely good rate with the water injec-tion; something around 20,000 barrels of oil per day and about 18 mil-lion cubic feet of natural gas is sold. What is good about natural gas in the Ivory Coast is that we don’t burn or fl are the gas. We sell all that we produce to the power plants.”

ChallengesDespite the seeming ease with which Faustin discusses the gas and

oil producing fi elds, there still remain many challenges in deep water production – specifi cally those of an engineering context. To begin with, a signifi cantly viable commercial discovery has to be made and approved before any sniff of a development plant can emerge. Using the Ivory Coast as an example, however, Faustin declares that while their com-mercial fi elds are not that big when compared to Ghana or Nigeria, they have set up a development plant that can be extremely economical, both in the building and running of the plant. What becomes clear is that materials and techniques that are not too expensive are pivotal in beating the challenges of production.

“Th e most recent challenge we had was solving how to get one of our more recent fi elds to produce. First, when we discovered the fi eld, we used what we call an expandable sand control system (ESS) to pre-vent sand entering the well. Unfortunately, aft er one year of production the system failed, putting us from 50,000 barrels per day to something around 16,000 barrels per day. We had to return to our studies, go back and re-drill part of the well with a brand new system. We did that and it seems to work right now, so we’ve gone back from 16,000 barrels per

day to around 26,000-27,000 barrels of oil per day.”

On the other end of the spectrum to the challenges facing producers such as Faus-tin is the technology that helps them on a daily basis. Specifi c to PETROCI is the use of geophysical technology and its ability to improve exploration risk rates and reduce costs within unconventional resources such as oil shale. Faustin details an example of an inversion technique of 3D seismic inter-pretation that an engineer used to identify a clear fl at spot in the natural gas side of the fi eld that worked to full eff ect. It is without doubt that the technology is helping on levels that no other solution can. But even

with this new-found helping hand, the world’s rising energy demand is stirring up uncertainties within the future of the industry with regards to supply being able to keep up with demand.

“We’ll be able to keep up with demand,” asserts Faustin, “but only for the next 20 to 50 years. However, I think that it will be diffi cult to keep up with the demand. Beyond that, we need to think about some new kind of energy. It may be cheap, it may be more expensive than oil energy, but we need to think about some kind of new energy. Th ere are so many of them. Right now people think oil is expensive – I don’t think so. All the alternative energy is more expensive than the oil. Using technology – for example to get something out of sugar cane or an agricultural product – is an energy that has some cost.

“For the near future we still have oil. We’re currently running some more discovery outlets deep off shore in places like Brazil and the Ivory Coast – specifi cally some speculative seismic in roughly 3000 metres to 4000 metres of water. We think that discovery can keep up with the demand for the next coming 20 to 50 years, but aft er that we need to have something else that will come up to face the demand of energy in the world.”

Whilst others may argue with the specifi cs, Faustin has certainly hit the metaphorical nail on the head. But until the time that a viable and infi nite alternative energy source is uncovered, it will remain in the hands of people like Allangba Faustin and companies such as PETROCI to continue tapping into our word’s resources and providing the people with what they need: energy.

Allangba Faustin is the Engineering and Production Manager of PETROCI. He graduated from the University of Tulsa, Oklahoma, with a degree in Petroleum Engineering in 1981. He then completed an MSc degree in Engineering Management from the same University in 1982. He started his petroleum engineering career at PETROCI, the Côte d’Ivoire national petroleum company, in March 1983.

“What is good about natural gas in the

Ivory Coast is that we don’t burn or fl are the

gas. We sell all that we produce to the

power plants”

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RENEWABLES

PURE AND

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On February 22, 2010, the Ambassador of Denmark, DanFrederikson, took the stand at the Africa Investor CEOForum on Infrastructure, Energy and CleanTechnology Projects and Awards ceremony in CapeTown, South Africa, and presented his opinions on thepotentials of low-emission technologies. Not only that,

but he outlined one, simple recommendation for Africa to promote the de-ployment of their existing low-emission technologies with advice from theCopenhagen Climate Change Conference.

“First of all, I wish to assure you that I am very pleased to be part of thispanel and to speak to this important audience about two issues that affect usall, namely energy and climate change,” began Frederiksen. He then went onto highlight the importance of the COP15 Climate Change Conference inCopenhagen in December of last year. “In Copenhagen, it is paramount thatthe world leaders come together and agree on an ambitious new agreement.”

“Denmark faced a severe energy crisis in the first part of the 1970s, whichmade us radically change our energy policies. It’s those two events – theCOP15 and Denmark’s energy experience during the last three decades – thatinform my speech.” Indeed, it was under the request of the organisers ofAfrica Investor that Frederiksen give one, simple recommendation for thecontinent to ensure the deployment of existing low-emission technologies.

“This has not been an easy task,” admits Frederiksen. “Coming up withonly one recommendation to a series of complex issues which are keeping heads

of states, science, industries and civil society very busy these years. Furthermore,this one recommendation would have to be suitable for the entire continent ofAfrica, with its 53 different countries and enormous diversity. Before I revealmy recommendation, I would like to take this opportunity to present some ofthe key aspects related to the issues of energy and climate change.

“First of all, why is the deployment of existing low-emission technologiesso important? Well, it can no longer be questioned that our almost uniformdependence on fossil fuel is the main culprit to climate change. The signs ofclimate change are everywhere around us – from melting glaciers to heavyfloods and hurricanes – and draught and fires as South Africa is experiencing.All scientific prognoses show that Africa is the continent that will be hit thehardest. In other words, the message from science is clear: We have to act nowand we have to act with ambition.

“Secondly, low-emission technologies assist in diversifying energy sup-ply, thereby providing a more stable and secure supply of energy for the ben-efit of our economies. Think back for a moment at the energy crisis in SouthAfrica early last year. Had South Africa had a couple of wind farms or otherrenewable sources, maintenance of coal fired power stations and wet coalwould not have been such a large problem. But by relying on coal for almostthe entire energy production, South Africa ended up losing almost two per-cent GDP growth in the first quarter of 2008.

At the COP15 in Copenhagen in December, representatives from coun-tries worldwide met to reach an agreement on ways to address the challenges

Dan Frederiksen presents his one, simple recommendation for Africa topromote the deployment of existing low-emission technologies.

SIMPLE


“In addition to this, open and guaranteed access to the grid whereTransmission System Operators – normally the old state monopolies – are re-quired to finance, construct, interconnect, and operate the transformer sta-tions and transmission and distribution infrastructure for renewable energytechnologies has been pivotal. Finally, a general carbon tax on all forms of en-ergy, adding additional income for renewable energy generators has produceda significant change.

“In other words, the ‘Danish Model’ is an example of the private and pub-lic sector working together, promoting change for the common good and inthe process not only producing green energy, but also making money for thestate coffers and empowering ordinary people while tearing down monopo-lies. How many more plus-words can you ask for?”

On the subject of plus-words, Frederiksen then returned to his brief onthe one recommendation to African countries. “Some of you may haveguessed it already. My one recommendation for Africa to promote deploy-ment of existing low-emission technologies is: Change the legislative frame-

work governing the energy sector. The key words are decentralisation anddiversification.

“Decentralisation of the production of energy, which will allowIndependent Power Producers – often owned by individuals or small coop-eratives – to become players at a level playing field with the old monopolies.Diversification implies promoting renewable sources such as solar and windenergy to be introduced. Thereby not only going green, but also providing forsupply security and having back-up systems when one source of energy sup-ply for one reason or the other is in trouble.

“However, for this to happen measures such as feed-in tariffs, access to thegrid and the introduction of a carbon tax on energy or another subsidisingmechanism in the transition phase are needed. It takes political will and deter-mination by all. Governments have to come to the party to secure legislativechanges, but businesses also have to contribute with know-how, project or-ganisation, willingness to finance in a non-mature marked et cetera. And or-dinary citizens have to pay the bills – as always – including a start-up premium.But once you get started the experience at hand shows that there is no trade offbetween growth and going green. You can do both at the same time.”

With the Desertec Concept entering the field of play in Africa, and re-newable energy conjuring up more interest year upon year, Frederiksen’s ad-vice is looking like it could one day become part of a bigger blueprint forAfrican renewable energy. The proof, as they say, is in the pudding. n

of climate change. Of interest to Denmark, and specifically to Frederiksen,was that more economically developed countries took a leading role in com-mitting to serious reductions in CO2 emissions. In addition, the agreement inCopenhagen also intended to enable emerging countries, such as those inAfrica, to both form a cleaner path towards prosperity and afford them anability to adapt to and mitigate the consequences of climate change. “The aimis to lay the foundation for a new beginning in Copenhagen; a new beginningtowards a low carbon economy,” as Frederiksen puts it.

“There is no doubt that finance is key in reaching an agreement.Denmark is already assisting poor countries to cope with climate change andwe are committed to do more. The Danish government has recently launchedthe recommendations of its ‘Africa Commission’ – and two of the five inter-national initiatives arising from this commission are: Access to sustainableenergy as well as commitment to African entrepreneurship and access to fi-nance for small and medium-sized enterprises. These areas are strongly in-terlinked.”

“I would now like to present to you the main features of the Danish en-ergy experience over the past three decades. Denmark has transformed frombeing 99 percent dependent on foreign energy sources such as imported oiland coal in 1970 to becoming a net exporter of natural gas, oil and electricitytoday. We have the largest portfolio of wind projects integrated into the powergrid. Now around 20 percent of Denmark’s electricity supply comes fromwind power.

“There is a commercial side to this story, as Danish companies are nowamong the leaders in the field of wind technology employing almost 30,000people. The wind industry takes home more than six and a half percent ofDenmark’s total export income. Similar to countries such as Germany, wehave also made significant gains in the field of energy efficiency. Consider this:Energy consumption in Denmark has grown only four percent from 1980 to2004, even though the economy grew more than 64 percent in fixed prices inthe same period of time. This is proving that green growth is possible.

“These accomplishments have not been obtained without major changesin the legislative framework, which, of course, have hurt some players andbenefited others. Some of the most important steps have been: Opening upthe market for Independent Power Producers (IPPs); 60 percent of all windenergy in Denmark is produced by windmills owned by individuals or smallcooperatives. Ownership is not by big multinationals, or by the state – but bypeople like you and I. Secondly, a feed-in tariff requiring utilities to buy allpower produced from renewable energy technologies at a rate equal to 70 to85 percent of the consumer retail price of electricity.


Dan Frederiksen is the Ambassador for Denmark in South Africa. He graduated with anMSc in Political Science in 1982 from the University of Aarhaus in Denmark.

“ ”“It takes political will and determination by all. Governments

and municipalities have to come to the party to securelegislative changes, but businesses also have to contribute withknow-how, project organisation, willingness to finance in anon-mature marked et cetera. And ordinary citizens have topay the bills – as always – including a start-up premium. Butonce you get started the experience at hand shows that there isno trade off between growth, creating jobs and going green.You can do all of that at the same time.”

“South Africa has started a national process ofgreening its coal based economy – which willopen the doors for wind farms and otherrenewable energy sources – and South Africaalso plays an important role globally to get alegally binding climate change frameworkagreed, which will give further impetus tolowering greenhouse gas emission and securinga green future for the next generations.”


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and fi ve NGOs running right now we are working on those issues. We feel we are improving and trying to make it safer for the corporations and also preserve the natural resources as much as we can. We have training for all issues relating to HSE in the oil and gas industry to raise standards for the workforce.

And what would you say are the main risks that oil and gas workers face today?YD. We have huge challenges in Egypt with our local workforce and also in the community because literacy in Egypt is not high. Th e ignorance to the safety, health and governmental issues is very high, while educa-

The oil and gas industry is perceived by some young people as a dangerous career choice. How have health and safety efforts and standards improved in recent years?

Yassin Darwish. In recent years we have set up a committee for the oil and gas operating companies in Egypt. We are trying hard to solve all the problems and trying also to improve the standards. Our main concern nowadays is with our local contractors in Egypt because they are not meeting any of the international standards. So we are working hard on this issue with cooperation, of course, from the government to have new legislations. Th rough these many committees and with the government

SAFETYFOCUS

The oil and gas industry faces mounting challenges when it comes to preventing accidents and injuries, as well as the impact of its operations on the environment. Julian Rogers catches up with Yassin Darwish, Danagas, Egypt HSE Manager, to get his take on standards.

IN SAFE HANDS

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tion on health and safety issues is not very eff ective. We can say that our workforce falls into two categories: they follow the rules while they are on the sites but when they go outside our worksites they are exposed to the community that is not following the rules. One of the many chal-lenges in Egypt in general is road safety, and according to the WHO we have one of the highest fatality rates in the world.

What’s the best approach to tackling HSE issues and complying with legislation?YD. Most of the oil and gas companies are following very fi rm procedures, but compared to the whole global community we are not so eff ective. However, the Egyptian government is very cooperative on these issues in trying to reduce incidents as much as possible. Also, in the tender pro-cess they look for HSE statistics and the history of the company. An IOC will normally have high HSE statistics but if they have environmental fi nes in other countries, for instance, they will face restrictions. We are working on these issues.

It is well documented that the oil and gas industry faces skills short-ages, with experienced personnel approaching retirement and graduates tending to pursue other careers. How is this affecting HSE efforts?YD. In HSE in Egypt it is not easy to fi nd high calibre and well-educated staff that have the right experience. However, this is not a just a prob-lem for Egypt – it is a worldwide concern. We try to improve this situ-ation through education. We now have some UK certifi cates and also American certifi cates we are trying to introduce in Egypt. Most of the workforce now gets education and we also try to help new generations so that old HSE managers are passing on their experience to tomorrow’s managers.

The MENA region can be a fairly inhospitable region with hot and dusty conditions to contend with, not to mention security and po-litical concerns. How does this affect work?

YD. If you take the IOC, they are working to their standard set of rules. Th en comes the diffi culty of understanding and implementing this in diff erent cultures. As I said earlier, there is ignorance in some countries – not just Africa but worldwide. If you are educated in HSE from your fi rst year with an oil and gas company you never achieve what an IOC wants, especially if you work in many countries. Of course, there is a standardised approach when it comes to the environment because there are conventions that we have adhere to. But how we implement those conventions and how we understand them, that is a challenge. I believe the NGOs have a much stronger understanding of this. Th ey have a lot of enforcers so are more eff ective than governments on these issues.

How does the approach of the IOCs differ to that of NOCs? YD. Standards are created by the companies and most of them want to work to the minimum standards in order to prevent incidents. Th ere are a lot of IOCs who are trying to continually improve the standards and, at the same time, carry out sustainability or corporate social responsibil-ity (CSR). Some companies are taking responsibility to try and improve awareness and understanding of the impact on the local communities. On the other hand, other companies with diff erent standards may be doing physical things like refurbishing a community facility. Th is means there is a large variance between standards of the oil companies.

Do you foresee any major changes in Egypt with HSE over the next few years and how will this impact on your operations? YD. I think Egypt is moving ahead right now in its eff ort to improve standards. You can see improvement because we are trying to communi-cate and interact more as IOCs when it comes to HSE. With these strong relationships we are approaching governments and NGOs because they are very willing to help. I believe that in fi ve years from now we will be very eff ective with this as an industry. Th ey, like us, are trying to protect the environment and our natural resources.

Has the global economic downturn affected HSE standards within the industry as a whole?YD. I don’t want to name companies, however most operate to the same international standards and if they violate these standards they may be fi ned, so they need to make sure they do the right thing. What we are trying to also do now in Egypt is standardise IOC standards according to the best that are out there. We are also negotiating so that we have government, not IOC, standards and this is enforced as the minimum HSE requirements. In Egypt it is not fi rm at the moment but we want to make it clear and not from the interpretation of any company. Th is will improve HSE standards in Egypt a lot.

“One of the many challenges in Egypt in general is road safety, and according to the WHO we have one of the highest fatality rates in the world”

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Environmental, fi nancial and regulatory impacts of waste generation, treatment and dis-posal are a major concern to oil and gas, power generation, construction and manufac-

turing industries. Implementing an enterprise wide ‘green’ project could be the way to increase bottom line whilst adding values.

Since the industrial age, waste generation and its impacts remain an inexorable outcome of operational activities; with the attendant implications like treatment and disposal costs, reputation management, liabilities and regula-tory issues that could arise from environmentally unfriendly practices.

Over the past decade, concepts that focus on environmental stewardship have gripped the collective intellect of humankind, challenged our capacity to be self-aware, and established a common global imperative to respond to critical issues that arise from world-wide climate change and natural resource conservation.

Yet, while most enterprises have already undertaken some form of ‘green’ initiative, very few have established an enterprise-level ‘green’ strategy that responds to the new global imper-ative. It is critical that they assess all initiatives and make targeted investments to ensure the

highest possible return without adding to the overall cost base.

But before decisions and investments are made, senior leadership must be able to clearly state the green agenda’s current status, the short- and long-term goals of the portfolio, and how the green strategy aligns with the business’ strategy.

Each company needs to chart its own course, because following an industry leader’s path is not a prudent decision in moving a green agenda forward. A key component in this process is an ‘honest broker’ that helps assess and understand where the organisation stands on the sustainability maturity pathway. Current priorities and applicable requirements will then dictate the appropriate steps toward implementing the green agenda.

To help proponents experience the immense benefi ts of environmental stewardship, HSE has developed numerous client specifi c environmen-tal improvement management projects that help you understand your current state of green value potentials, identify opportunities, as well as im-plementing and monitoring their compliance.

During the course of implementing your green programmes, several distinct and impor-tant functions that are not being performed well or at all may be identifi ed and addressed through specifi c environmental infrastructure enhance-

ments, or through investments in the capabili-ties of the organisation’s human or information management resources.

Conducting a purposeful knowledge or skill building initiative is oft en a critical activ-ity on the pathway to improved environmental and business performance, requiring timely and high quality information. Hence, informa-tion management analysis and improvement activities can play a pivotal role in helping your organisation to meet its environmental improvement goals and communicate its ac-complishments effi ciently, clearly and credibly to all interested stakeholders.

From experience, corporations that are en-vironmentally sound create additional value for stockholders through being less risky business entities and therefore, being accorded a lower cost of capital. Th is shows that fi rms that im-prove their environmental management system and their future environmental performance will be able to increase shareholder wealth.

With decades of experience, our solutions not only promote the development and dis-semination of standardised approaches to envi-ronmental management, they also embrace the concepts of sustainability and eco-effi ciency, in which industrial activities are critically exam-ined in terms of raw material, water, energy, and non-renewable resource use, as well as relative to more conventional aspects such as toxic pollut-ant emissions and waste generation.

Our fi ne blend of expertise and fl exibil-ity in managing a wide range of Environmental Health & Safety projects for multi-sector clients in African communities are cost eff ective, easy to implement and proven to boost your company’s values whilst improving profi t margins – the core concern for managers.

We would be glad to conduct a free assess-ment of your facility or operations and provide an easy to understand report.

David Omaghomi, HSE’s Senior Environmental Consultant, discusses how understanding the world of waste could have a signifi cant impact on your company.

David Omaghomi is a Senior Environmental Consultant with HSE Management Ltd and is currently the Environmental Co-ordinator for Sterling Oil Exploration & Energy Production Co. He has led several public and private projects that help impact communities and add profi ts and values to the clients.

- Policy- Planning Process- Resources & Implementation- Progress Measurement- Performance Results- Periodic Review & Reporting

- Unmanaged - Regulatory Compliance Reporting -Media Coverage

- Managed - Industry Codes of Conduct -Press Releases, Advertisements -Corporate Environmental Reports

- Business Risk- Financial Risk- Environmental Risk

- Cost of Equity Capital- Market Value of Equity- Credit Risk

EnvironmentalManagementSystem

EnvironmentalPerformance

EnvironmentalSignalling Firm Risk

Firm Value

Conceptional model linking corporate environmental management and performance with fi rm value

Safe greening: growing profi ts and values for your company

ASK THEEXPERT

HSE.indd 120HSE.indd 120 13/4/10 09:12:1913/4/10 09:12:19

BEING GREEN & SAFE TAKES THE RED OUT OF YOUR PROJECT FINANCES

Experience, People, Technology and Flexibility to do it right along your entire value chain, are the strengths that have enabled us to remain in the forefront of providing bespoke Environmental Health & Safety solutions for our people anywhere in Africa.

We provide a variety of on-site or technology based Health, Safety and Environmental products, manpower and services like training, risk assessments, audits and regulatory management so you can eliminate losses and concentrate on operational matters 24/7.

Contact us today for a FREE assessment of your facility/operations anywhere in Africa or visit www.hseafrica.com for a complete list of our products, trainings, products and enterprise wide solutions.

Improving your profi ts and values couldn’t be less costly.

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HSE MANAGEMENT2.indd 1HSE MANAGEMENT2.indd 1 9/4/10 10:16:019/4/10 10:16:01

SUMMITS122122

Upcoming oil and gas and utility summits by GDS International NG Oil&Gas Africa Summit 2010

GDS business executives select and invite more than 50 of the most senior exploration and production decision makers in the African Oil and Gas market. Our business analysts talk with invited executives to discover their most pressing E&P demands.

Th ese demands are matched with the leading solutions in the E&P market and only 25 appropriate companies are invited to participate. Each company engages in a minimum of 16 business meetings, two round table discussions, keynote speeches, fi ne dining and unlimited networking over the three-day event.

E&P delegates from the oil and gas industry and solution providers from the upstream technology sector, select in advance a series of one-to-one solution briefi ngs for the best possible itinerary.

Th ey also work with GDS senior editorial staff to pre-determine round table topics and participants to create relevant and thought provoking discussions.

NGO US Summit 2010The Four Seasons Resort & Club, Austin, Texas3rd - 5th November 2010

Th e prospects of limited growth in non-OPEC production, and the expected start of economic recovery later this year, which should increase oil consumption and the demand for OPEC oil, are the main factors supporting the upward price path. In other words, it appears that oil is recovering from the low points and we are beginning the long awaited upswing.

Th e Next Generation Oil&Gas US Summit 2010 provides an arena for senior level ex-ecutives to meet with their peers and discuss management objectives in a relaxed and vi-brant environment.www.ngosummit.com

Next Generation Utilities North America Summit 2010The Fairmont Turnberry Isle Resort, Miami, Florida9th - 11th November, 2010

In today’s troubled climate, the utilities sector is in the midst of unprecedented transformation. Several factors are driving fundamental change: liberalisation and increased competition, strategic mergers and acquisitions, regulatory pressure around climate change, systems reliability, convergence, electricity and renewable concerns.

Whilst there are a dozen sponsors in attendance at the summit, the programme is designed with the end user in mind. Th e delegate attendance is com-prised of the most well respected executives in the utilities industry and the meeting format is designed to surpass the traditional exchange of business cards and allow executives to have a good discussion on a personal level.

Events.indd 122Events.indd 122 13/4/10 09:01:3913/4/10 09:01:39

SUMMITS123

NG Oil&Gas Africa Summit 2010La Palm Royal Beach Hotel, Accra, Ghana28th - 30th September 2010

Th e Next Generation Oil&Gas Africa Summit 2010 will once again serve as an arena for senior level executives to engage in clear and focused dialogue with their peers and examine their management ob-jectives in a relaxed and vibrant environment.www.ngoafricasummit.com

NG Oil & Gas APAC Summit 2010The Four Seasons, Jakarta19th - 21st October 2010

Th e APAC regional governments’ contin-ued commitment to promote private-sector investment in order to meet worldwide energy demands promises massive rewards to a host of organisations, from National Oil Company subsidiaries, indigenous providers and inter-national oilfi eld service companies all of which are well-established within the region or are looking to target APAC for the very fi rst time.

Th e Next Generation Oil&Gas APAC Summit 2010 will bring together senior level executives in a unique networking opportu-nity that promotes industry in a relaxed en-vironment.www.ngosummitapac.com

Next Generation Utilities Europe Summit 2010InterContinental, Vienna5th - 7th October 2010

Th e European power sector is at a critical juncture. Th e European Union’s 20-20-20 policy targets are driving a revolu-tion in power technology and there are an abundance of old and polluting utilities that are in dire need of repair.

Th e Next Generation Utilities Europe Summit October 2010 will provide a number of diff erent networking channels to execute and promote business including a series of focused interactive workshops. Senior decision makers will engage in business meetings with solution providers who are specifi c to their business challenges and areas of future investment.

Events.indd 123Events.indd 123 13/4/10 09:01:3913/4/10 09:01:39

GLOBAL FOCUS124

crude production was rising then, thanks to the North Seaand Mexico. Now, it is falling. And unlike then, world de-mand now is primarily driven by the rising prosperity ofthe developing world’s 5.6 billion people. They outnum-ber the population of the OECD countries by nearly five toone, and the margin is growing.

So demand growth will inevitably resume, and re-newable energy cannot meet it alone. Unless our industryis ready, and governments have the right policies, supplycould fall short. This would damage the world economyand undermine living standards.

At ConocoPhillips, we are dealing with these chal-lenges today, while also anticipating tomorrow’s needs.We have adjusted our operating and capital programs tolive within our means; the best projects continue, whileothers have been deferred. We are working with suppliersto reduce costs. We are maintaining balance sheet strengthby managing our debt. And we are engaging in the publicdebate over climate change, energy security and taxation.

But despite these immediate steps, we are maintain-ing our long-term strategy. We are funding our commit-ments and preserving optionality. We continue spendingthrough the cycle in our resource-play drilling programs.And we are focusing on our core businesses, while contin-uing renewable energy R&D, but at a measured pace.

Obviously, there is much government must do. Firstis improving access. The world has ample oil and gas, andwe can produce it efficiently while protecting the environ-ment. We just need access. Second, government must stopviewing our industry as a cash cow. Some $12 trillion inglobal oil and gas investment is needed by 2030 to ensureadequate supply. These investments cannot occur if ourfunds are taxed away. Third, government must encouragedevelopment of all energy sources, and not pick ‘winning’technologies. The public, through the market, can deter-mine the best sources far more efficiently than govern-ment. And finally, government must coordinate itspolicies on energy and climate. Otherwise, policy conflictscould undermine both.

So there are solutions to our challenges, provided thatwe, and most importantly government, take the right steps. n

In discussing our upstream challenges, I’ll startwith the obvious – the world economic down-turn. It has caused the largest decline in energydemand in 25 years. Oil prices that took eightyears to reach $147 per barrel – after stagnatingfor two decades – lost more than two-thirds of

that value in eight months. Today, they are $70 – but maynot hold. Compounding this are government fiscal takes.A number of countries raised their takes during the boom,assuming that prices would remain high. Now, most havenot lowered them. Also, reserve replacement costs aremore than double their 2003 levels. They are not falling asfast as prices did.

All these factors challenge the economics of new in-vestments. Government seems to assume that we will in-vest anyway. But perhaps the screws have now beentightened too much. World upstream investments aredown by $100 billion this year, or 21 percent, according tothe IEA.

There are other challenges, like restricted access. Inmany resource-rich countries, the best (if not all) opportu-nities go to NOCs and IOCs are left out, despite their ex-pertise and access to capital and markets. There is alsoclimate change legislation pending in key countries. Thiscreates uncertainty over what the rules and costs will be.Investment flees uncertainty. We need the world to decidewhat it will or will not do. And finally, we face political hos-tility. Fossil fuels are unpopular because of their price volatil-ity and perceived carbon impact. So governments arepromoting renewable sources. At best, they are ignoring oiland gas policy – while overlooking how natural gas couldease the transition to a low-carbon economy. Since fossilfuels must provide 80 percent or more of world energy evenby 2030, this is like Nero fiddling while Rome burns.

These challenges and flawed policies have serious im-plications. They could lead to new energy price spikes oncethe world economy recovers.

Further, today’s energy downturn is not like the1980s. We are unlikely to have a long production surplusand weak oil prices this time. The drop in oil demand thenwas three times today’s decline. Conventional non-OPEC

Global upstream challengesIn a panel discussion on global upstream challenges at the Oil &Money Conference in London, ConocoPhillips CEO Jim Mulva

provided an IOC response to turbulent times and challenges.

CONOCO PHILLIPS ED P 124-125_13 July 13/04/2010 09:17 Page 124

GLOBAL FOCUS125

“These challenges and flawedpolicies have serious

implications. They could leadto new energy price spikes once

the world economy recovers”

CONOCO PHILLIPS ED P 124-125_13 July 13/04/2010 09:18 Page 125

IN REVIEW126

It’s Not as Bad as You ThinkWhy Capitalism Trumps Fear and the Economy Will Thrive, by Brian S. Wesbury

An upbeat antidote to the doom and gloom forecasts of the fi nancial future, Wesbury demonstrates that while the future may be hard to predict, it will ultimately be profi table over the long haul. Ranked as one of the top economic forecasters by the Wall Street Journal and USA Today, Wesbury shows how to prosper now and in the future with an analysis of tomorrow and a guide through yesterday.

P&E SAYS: In this easy-to-follow and engaging forecast of the future, Wesbury’s objectivity and op-timism provide welcome relief to the daily bad news stories that have dominated the news for so long.

The World is CurvedHidden Dangers to the Global Economy, by David M. Smick

A timely, controversial and engrossing examination of global fi nance and the crisis engulfi ng us all, Th e World is Curved highlights the next potential crisis points and the thicket of hidden problems facing the entire global economy. Picking up from where Th omas L. Friedman’s Th e World is Flat left off , Smick focuses on the globalization of fi nance and how today’s risky environment came about. He provides an insider’s perspective on the potential nightmare scenarios of the future.

P&E SAYS: A must-read for investors, business people and anyone interested in the fi nancial crisis. Smick provides a thoughtful insight and raises important issues that need to be fully debated. A great guide on how to survive in these turbulent times.

CrossroadsThe End of Wild Capitalism and the Future of Humanity, by Peter Nolan

Drawing on thinkers as diverse as Karl Marx, Adam Smith, Sigmund Freud, Charles Darwin and Confucius, Nolan analyzes the achievements and shortcomings of capitalist globalization over the past three decades. For Nolan the global fi nancial crisis marks the end of the era of ‘wild capitalism’ and what follows next is an open question as humanity stands at a crossroads – one path leads to cooperation, one to confl ict.

P&E SAYS: A dense, detailed and carefully constructed argument stating a case for a tripartite alli-ance between the US, China and the Muslim world. Nolan remains upbeat and places equal weight on mankind’s instinct for survival through cooperation as well as the equally inherent destructive competitiveness of globalization.

On the shelfTaking an in-depth look at the impact of the economy across all industries, P&E uncovers the best of this quarter’s business book releases.

Book reviews2.indd 126Book reviews2.indd 126 13/4/10 09:00:4313/4/10 09:00:43

From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Your World. COVERED

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Next Generation Power & EnergyA poll of 4000 utility executives posed the simple question: what keeps you up at night? The answers were costs, new technologies, ageing infrastructure, congested transmission and distribution, viable renewables and inadequate generation capacity.

Next Generation PharmaceuticalApproximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. It is committed to providing information for every step of the pharmaceutical development path.Available for: EU

Find out more: www.ngpharma.com

Business ManagementWhat business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets?Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision makers in government and private enterprise.Available for: US, EU, MENA

Find out more: www.bme.eu.com

Oil & GasCollaboration between Government and multinationals to ensure the energy supply is developing on two fronts. O&G is the defi nitive publication for stakeholders and service companies to read about the regional projects, technologies and strategies affecting their group.Available for: MENA, US, Russia

Find out more: www.ngoilgasmena.com

InfrastructureInfrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility.Available for: US, EU

Find out more: www.americainfra.com

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A southern Sudanese child walks near the town of Mayom in Unity state. Th e oil-rich but largely underveloped southern Sudanese region borders former civil war enemies in north Sudan and is suff ering from attacks blamed on northern nomadic Misseriya people.

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P&E Afr 1

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