Sudan Energy Sector. Business France 12 th February 2019

Transcription

1 Sudan Energy Sector Business France 12 th February 2019

2 Oil & Gas

3 Oil & Gas; Post Secession BMI estimates proven Sudan 5 bln bbl of which ~25% is in RoS. It is believed that north-west and east Sudan have substantial reserves potential, especially in the Blue Nile basin and the Red Sea area. Exploration activity has intensified over the past few years to assess and commercialize un-accessed blocks. Offshore remains underexplored despite previous campaigns led by international oil companies (IOCs). In 2010 offshore exploration restarted, with CNPC and Petronas in the lead, targeting oil and gas prospects in the Red Sea Strengths Proven oil production and export capacity. Long-term partnerships with Asian national oil companies (NOCs) and interest from international oil companies (IOCs) Well-developed midstream oil infrastructure Strong refining capacity versus regional peers Opportunities Large parts of the country (including the offshore Red Sea) remain underexplored and could hold significant resources Interest from NOCs and smaller independents in Sudan's upstream is increasing 2015 % of World Export 4 3,5 3 2,5 2 1,5 1 0,5 0 3,5 1,9 1,8 1,7 0,8 0,8 Source: BMI Crude, NGPL & other liquids prod, 000b/d Dry natural gas production, bcm Dry natural gas consumption, bcm Refined products production, 000b/d Refined products consumption & ethanol, 000b/d Brent, USD/bbl

4 Oil & Gas; Post Secession Sudan and South Sudan export the Nile and Dar blends to Asian markets. All crude oil produced in South Sudan is exported via pipeline to Sudan for refining or export, because South Sudan has no refining capacity, and Sudan is the only country in the region with the refining infrastructure capable of processing these particular blends Crude oil production Crude oil exports Crude oil exports (2016)

5 Algeria Egypt Libya Morocco South Sudan Sudan Tunisia USD Million EURO Million FDI in Sudan EU FDI with Sudan Stocks: Outwards Stocks: Inwards FDI Sudan FDI in Sudan has reduced steadily recently, but remains relatively high compared to its peer group. Inflows equal 3.4% of GDP, the second highest FDI to GDP ratio after Djibouti s (11.4%). Investors mainly drawn to Sudan s extractive industries, with oil and mining attracting 74% of FDI between 2000 and Asian countries, namely China, Malaysia, and India, are the biggest investors in Sudan s oil sector, and account for more than 95% of FDI oil inflows.

6 Renewable Energy

7 Renewable energy: global market Global new investment in renewable energy developed vs. developing countries, $bln Global VC/PE new investment in renewable energy by sector, 2016 $bln Record installation of renewable power capacity worldwide in Wind, solar, biomass and waste-toenergy, geothermal, small hydro and marine sources between them added 138.5GW, up from 127.5GW in the previous year Solar investment was $ 114 billion (47%) and wind $ 112 billion (46%) Africa 2016 investment in renewable (power generation and transport/heat) was $ 5 bln (2%)

8 Renewable energy: Africa market Current energy needs are met through biomass and fossil fuel (5.8% of worlds total TPES or 32.4% of world s solid biofuel supply). Africa is home to the largest un-electrified population in the world, 600 mil people lack access and it is estimated to reach 700 mil by 2030 (UNEP,2015) Cumulative energy investment between would be US$1055 billion, of which US$486 billion for renewable energy (IRENA s RE:MAP2030 ) 60% of additional power generation required to achieve universal access to electricity will come from off-grid solution (IEA, UNDP, UNIDO 2010)

9 Renewable energy: Countries of focus IRENA has published a comprehensive report on Africa Clean Energy Corridor. The study sought to identify and value high quality wind, solar photovoltaic (PV) and concentrated solar power (CSP) in 21 countries. The aim is to support the prioritization of area for development and optimize their grid infrastructure and operations to be able to support high shares of renewable energy. Sudan and Ethiopia are benefiting of high quality resources across all categories. The location and potential of wind, solar photovoltaic, and concentrating solar power (CSP), in terawatt-hours, in southern and eastern Africa. Credit: Berkeley Lab

10 Renewable energy: Sudan market Total electricity generation in Sudan was 12.7 billion kilowatt-hours (kwh) in 2015, of which ~60% was generated by hydropower. The country is making efforts to further integrate other renewable energy resources, and aims to have 11% of electricity generation come from renewable energy by 2031, excluding hydro. Sudan also adopted a National Energy Efficiency Action Plan NEEAP in 2012 and has set cumulative energy efficiency targets of 11.8%, aiming at 32% by 2020.

11 Sudan Power Transmission and Distribution Losses are very high Renewable energy: Sudan market

12 Renewable energy: Opportunities in Sudan Sudan has published a wind and solar atlas in March Based on this atlas, three areas have been identified with potential to host wind power projects: 1. Dongola Area in Northern Sudan 2. Jabel Marra mountains in Western Sudan and 3. The Red Sea area Land for large-scale wind/solar projects has not been allocated yet for private development. Access to funds is available under Paris Agreement Article 6 (Market Mechanism). Private sector could approach different kinds of funds (Loans, private equity or grants) to implement Renewable Energy projects if aligned with National Strategies (NAMAs) Potential areas for Wind projects

13 Renewable energy: Sudan Projects Pipeline Wind Projects Project: Nyala Wind Farm Capacity: 20 MW Developer: Public Project: Dongola Capacity: 100 MW Developer: Public Project: Red Sea wind farm Capacity: 180 MW Developer: Public Project: Khartoum Wind Farm Capacity: 20 MW Developer: Public Solar Projects Project: Khartoum PV plant Capacity: 10 MW Developer: Public Project: Nyala PV plant Capacity: 5 MW Developer: Public Project: Al Fashir PV plant Capacity: 3 MW Developer: Public Project: Al Geneina Capacity: 2 MW Developer: Public

14 Renewable energy: Sudan Pros and Cons Pros: Strategic projects, including electricity generation, are subject to custom duty exemptions on capital goods under the 2013 Investment Act (Articles 19, 20 and 21). In 2001, Sudan adopted a new electricity law that allows private sector power generation, but there are no IPPs to date. Cons No Renewable funds established in Sudan to date. No policy for providing financial guarantee to private investors to ensure payment under power purchase agreement (PPA). All current power producing companies are still stateowned. The Ministry of Water and Electricity is the main body responsible for regulating electricity generation, transmission, and distribution. Sudan s current legal framework does not allow private sector self generation to feed the grid.

15 Renewable energy: Independent Power Producers (IPP) Grid Access No priority access to renewable energy is granted by law. No grid code for renewable energy is developed. No detailed grid map for designated renewable energy sites. All Power Producers in Sudan are state-owned Supporting Policies Procurement and contracting law chapter 5, article 13.2 (2010) provides a legal basis for organizing a public competitive bidding process for private developers of RE projects. Currently, there are no tenders announced yet for private sector to participate in public competitive bidding process. No obligation to conclude long-term power purchase agreements with Renewable Energy producers. No Feed-in Tariffs. No net-metering policy for small-scale RE projects.

16 Renewable energy: Environmental Service Renewable Energy in Sudan should be looked at within the context of country efforts to combat climate change impacts. Sudan has recently ratified the Paris Agreement where one of main obligations is to implement RE projects under Mitigation, Adaptation and Technology Transfer Articles. Carbon Credits via CERs (Certified Emission Reductions) are in high demand and can be liquidated in international markets easily.

17 Renewable energy: Potential Funding Sources Green Climate Fund - Via Private Sector Facility (PSF) Global Environment Facility (GEF) - Recently established a window for private sector African Development Bank (AfDB) REDD+ - Recently adopted strategy in Sudan. Investment in Reducing Emissions from Deforestation & Forest Degradation The World Bank - via Ci-Dev; the World Bank established to implement Climate mitigation projects with private sector (resultsbased finance) Independent Investors

18 Sector SDG/KWH $ cent/kwh Industrial Cold stores and ice plants Commercial Schools, places of worship, student halls Private Hospitals & Universities Hotels Telecom, Embassies and NGOs Governmental Agricultural (small scale) Agricultural (large scale) Residential KWh KWh KWh KWh KWh >1,500 KWh Current Electricity Tariff New Tariff announced in December 2017 Government claims cost is SDG 1.60 per KWH ($ cent 3.40) Government target price for Renewables (PPA) is $ cent 4.00 per KWH

19 Renewable energy: off grid solutions Given the likely pace of grid extension efforts, 60% of additional power generation required to achieve universal access to electricity will come from off-grid solution (IEA, UNDP, UNIDO 2010) Off-grid industry could be as transformative for Africa as mobile phones. The industry has a long value chain that includes everything from financing to equipment manufacturing to distribution, as well as potential spin-off industries such as battery recycling. Stand alone and mini-grid solutions powered by renewable already provide electricity to more than 90 million people (BNEF and Global Lighting 2016)and meet a hierarchy of needs from basic lighting to productive users. Cost can be effective and can be installed in modular fashion, linked with grid extension plans. Innovation on the supply side, demand side and control side is taking place in the off-grid space. The real game-changer for mini-grids, in particular, will come not from generation technologies but from innovation in the enabling technologies converters, control systems and, most important, innovation on the demand side. System innovation, such as plug-and-play features and battery storage, will also be instrumental.

20 Haggar Group & Energy

21 Roadmap 2025 Our Vision: To build Haggar into a trusted and successful African business Agriculture Develop trading platform to build export volumes in commodities that offer value add investment opportunities once economies of scale are reached Build integrated agricultural projects that capitalize on a broad value chain Energy Become an integrated service supplier to the oil & gas industry Providing clean, affordable energy through grid and off grid solutions Two Phases Year 1-3: Stabilize and Develop Year 4-8: Expand Stabilize & Develop Expand ICT Offer infrastructure for ICT solutions Expand into additional ICT services 2018 We will explore: 2025 Enabling Factor: Organizational Development We will strengthen our collaboration across the group and focus on scalable and sustainable business models. We will develop an organizational environment which fosters collaboration, provides capacity and key capabilities required, manages change and ensures accountability and social responsibility. Finance Services Health

22 Energy Energy Strategy Enable sustainable development across Africa by accelerating affordable access to conventional and renewable energy through innovative solutions. We will achieve this, by becoming an integrated service supplier for the oil & gas industry providing clean affordable energy through on grid and off grid solutions Project Pipeline Renewable Energy: Solar Renewable Energy: Wind Integrated Upstream Services Regional Expansion Oil & Gas Vertical Expansion A large scale, phased state wise solar power production to supply the agricultural, industrial and residential power requirements with potential future inclusion of battery storage. Produce affordable renewable energy as key to unlock Sudan s economic potential, focus on agriculture and industrial developments. The project is centered around creating a Renewable Energy Developer that is strategically positioned within proximity of international and regional players. The focus will be on Africa as an emerging power market that demonstrates the highest gap and urgent demand for electric power. DIOWS is strategically moving from being a single services provider to a multiple services provider. The Upstream Oilfield industry is moving toward integrated project management handled by service companies, evolution of the service sector is also characterized by integration of services, Companies strive to offer augmented integrated solutions. It has been driven by the customer s preference for single company and single contact solutions. Regional expansion will reduce the risk of business concentration in Sudan. Regional market entry can be archived by leveraging DIOWS track record in Sudan, as well as alliances with strategic partners, providing a fit for purpose solution for operating companies as with the case of ARAMCO in KSA and Nilepet in South Sudan. Developing Haggar Group within Oil & Gas value chain to move from upstream to mid and downstream markets creating a competitive edge amongst other players whilst hedging market dynamics.

23 Energy Energy Strategy Enable sustainable development across Africa by accelerating affordable access to conventional and renewable energy through innovative solutions. We will achieve this, by becoming an integrated service supplier for the oil & gas industry providing clean affordable energy through on grid and off grid solutions Oil & Gas At Dynamics today, we are only offering up stream services, which we recommend keeping and to compliment by investing in mid and downstream services. This will allow Dynamics to become an integrated service supplier for the oil industry. Horizontal expansion - Leveraging Haggar Group s network in Africa, expansion of Oilfield integrated services provision in should be considered as well as the gas projects in East Africa. High-volume work-over oilfield services in middle east can also become a good lead for business scalability. Vertical expansion - Further advancement within the O&G value chain should be considered as strategic move, and will give the Group a competitive edge. Technology expansion - The purpose of the digital oilfield is to maximize oilfield recovery, eliminate non-productive time, and increase profitability through the design and deployment of integrated workflows.

24 Energy Energy Strategy Enable sustainable development across Africa by accelerating affordable access to conventional and renewable energy through innovative solutions. We will achieve this, by becoming an integrated service supplier for the oil & gas industry providing clean affordable energy through on grid and off grid solutions Africa is the home of the largest unelectrified population in the world, 600 million people lack access and it is estimated to reach 700 million by 2030 with estimated cumulative energy investment between would be US$1055 billion, of which US$486 billion for renewable energy. Africa is endowed with the largest renewable energy potential. Renewables are now the first choice for expanding, upgrading and modernizing power systems around the world and are trending towards cost competitiveness with fossil fuels with evidence to support cost parity in certain asset classes. Economic development and the deployment of renewable technology in Africa are now synergistic because of this movement towards parity. Solar - Solar Power is abundant everywhere in Africa. The cost is half of what it used to be and estimated to drop by 60% in the next decade, with ongoing technologies, innovations and additional automation in production, cost will go down even further. Wind - Theoretical potential for wind in Africa exceeds demand by far and about 15% of the capacity is characterized by high quality resource. Off Grid decentralised solutions that may be further integrated into regional mini-grids or the main grid where technically feasible. At least 40% of Africa s future population is expected to live in rural areas in 2050 and will need access to modern energy services.

25 Haggar Group Dynamic International Oil Well Services DYNAMIC INTERNATIONAL OIL WELL SERVICES Founded in 2005, Dynamic International Oil Well Services has evolved into one of the leading oilfield service providers in its markets, offering multiple services & solutions. The company caters to the needs of the ever-demanding oil and gas exploration and production industry, helping to optimize drilling and production performance for clients in the field.

26 Thank You