the addax & oryx group using gas for africa’s energy future thierry genthialon chief operating...
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THE ADDAX & ORYX GROUPTHE ADDAX & ORYX GROUP
Using Gas for Africa’s Energy Using Gas for Africa’s Energy FutureFuture
Thierry GenthialonThierry GenthialonChief Operating Officer of ORYX Oil & GasChief Operating Officer of ORYX Oil & Gas
11th African Oil and Gas, Trade and Finance Conference & Exhibition11th African Oil and Gas, Trade and Finance Conference & Exhibition22-25 May 2007, Kenyatta International Conference Centre, Nairobi, Kenya22-25 May 2007, Kenyatta International Conference Centre, Nairobi, Kenya
NOT AN OFFICIAL UNCTAD RECORD
Table of ContentTable of Content
1. Addax & Oryx Group (AOG)
2. Downstream division: Oryx Oil & Gas
3. Macro-economic Data / Status of Africa
4. Focus on LP Gas
5. Using LP Gas for Africa’s Energy Future
1. Addax & Oryx Group Profile1. Addax & Oryx Group ProfileAn integrated petroleum and mining company - A fast-growing group
1.1 Addax & Oryx Group Mission1.1 Addax & Oryx Group Mission
To be a major player in the oil & gas industry in selected areas where we have a competitive edge
To continuously improve our safety and environmental performance
To add value in the communities in which we operate
2. Downstream Division: ORYX Oil & 2. Downstream Division: ORYX Oil & Gas Gas
A dynamic policy of investments in assets and networks
An essential player in the establishment and expansion of
the Addax & Oryx Group in Africa
2.1 ORYX Oil & Gas Portfolio2.1 ORYX Oil & Gas Portfolio
Storage: 5 key terminals providing 24 hour service +300,000 m3 HC & + 6,500 m3 LPG in 2005 Dakar, Abidjan, Cotonou, Freetown, Dar Es Salaam
Distribution 5 LPG cylinder filling plants
(Abidjan, Cotonou, Dar Es Salaam + satellites) +600 LPG retail outlets +100 Service stations network
(Tanzania, Cameroon, Nigeria, Benin, Burkina Faso)
+500 industrial installations Lubricants and Specialties
ISO 9000 Blending Plant, Dar Es Salaam Lubes and Bitumen network in East & West Africa
2.2 ORYX Oil & Gas Presence in Africa2.2 ORYX Oil & Gas Presence in Africa
40 10
2
3
1
45512
36
45
5
4
Network of 10 service stations
HC depot 10’000 m3
Gas terminal 2’000 m3
Gas filling center
Lubricant blending plant
Bunkering terminal
10
2
10
2 3
2
Using local competencies
Subsidiarity principle
Tailored marketing responses
Appropriate standards
2.3 ORYX Oil & Gas Specific 2.3 ORYX Oil & Gas Specific ApproachApproach
Synergies with AOG Trading arm
3. Macro-economic Data / Status of Africa3. Macro-economic Data / Status of Africa
3.1 World Energy Consumption
3.2 Africa’s Energy Consumption
3.3 Demographic data & estimates
3.4 Evolution of Gross Domestic Product
3.1 World Energy Consumption3.1 World Energy Consumption
World Energy Consumption by country in 2005
Europe & Eurasia28%
South &Central America
5%
North America27%
Asia Pacific32%
Middle East5%
Africa3%
World Energy consumption is projected to increase by 71% from
2003 to 2030.
The most rapid growth in energy demand is projected for nations
outside the Organization for Economic Cooperation and
Development (non-OECD nations).
3.7
2.82.6
2.4
1.8
1.3
1
0.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
%
Non-OECD Asia Central & SouthAmerica
Africa Middle East Non-OECD Europe &Eurasia
North America Asia Europe
Average Annual Percent Change per Year 2003-2030 in World Marketed Energy Consumption by Country
International Energy Outlook 2006, Energy Information Administration
3.2 Africa’s Energy Consumption by 3.2 Africa’s Energy Consumption by FuelFuel
International Energy Outlook 2006, Energy Information Administration
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Qua
dril
lion
Btu
1990 2002 2003 2010 2015 2020 2025 2030
Africa's Total Energy Consumption by fuel reference case 1990-2030
Oil
Natural Gas
Coal
Nuclear
Other
3.3 Demographic Data and Estimates3.3 Demographic Data and EstimatesDemographic estimates
700
41387
7171355
4739
0
1000
2000
3000
4000
5000
Asia Africa Europe Latin America &Caribbean
NorthernAmerica
Oceania
Millio
nsPop mid-2006 Projected Pop mid-2025 Projected Pop mid-2050
Rate of Natural Demographic Increase %
1%
-0.10%
1.50%
0.60%
2.30%
1.20%
Asia Africa Europe LatinAmerica &Caribbean
NorthernAmerica
Oceania
Urban Population 2006
Africa37%
Northern America
79%
Oceania73%
Asia38%
Europe75%
Latin America & Caribbean
76%
© 2006 World Population Data Sheet, Population Reference Bureau
3.4 Evolution of Gross Domestic 3.4 Evolution of Gross Domestic Product Product
Gross Domestic Product (GDP) by Region Using Purchasing Power Parity Reference Case 1990-2030
0
10'000
20'000
30'000
40'000
50'000
60'000
70'000
Middle East Africa Central andSouth America
North America Asia Europe andEurasia
Billi
on 2
000
Dolla
rs1990
2002
2003
2010
2015
2020
2025
2030
GDP by Region Using PPP Reference Case 2010 in Billion 2000 Dollars
Africa3'073
Middle East
1'946
Europe and Eurasia
35'142
Central and South
America
4'136
Asia
19'639
North America
15'503
© International Energy Outlook 2006, Report #: DOE/EIA-0484(2006)
4. Focus on LP Gas 4. Focus on LP Gas
4.1 What is LP Gas ?
4.2 World LP Gas Production & Consumption
4.3 Incremental LP Gas Supply & Demand Growth
4.4 LP Gas in Africa
4.1 What is LPG ?4.1 What is LPG ?
World Energy Consumption 2005
Other 35.60%
LPG3.10%
Oil36.40%
Natural gas23.50%
A mixture of gaseous hydrocarbons, very rich in energy content, easy to store in liquid form at low pressure (contrary to natural gas)
What is LPG ?
It originates from the refining process of crude oil or comes as associated gas in natural gas or crude oil wells
Why is it so little known ?
Table 1: the weight of LPG in world energy consumption in million Tonnes oil equivalent
4.34.3 Incremental LP Gas Supply & Demand Incremental LP Gas Supply & Demand GrowthGrowth
31.133.5
23.3
17.9
38.9
35.2
0
5
10
15
20
25
30
35
40
Mill
ion to
nnes
1995-2000 2000-2005 2005-2010
Worldwide
Supply
Demand
Sousce: Purvin & Gertz’ presentation World LP Gas Forum Chicago, October 18, 2006
6.8
1.7
3.5
1.7
6
2.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Mill
ion to
nnes
1995-2000 2000-2005 2005-2010
Africa
SupplyDemand
5. Using LP Gas for Africa’s Energy 5. Using LP Gas for Africa’s Energy Future Future
5.1 Benefits of LPG
5.2 LPG: tailored for Africa
5.3 Structural Barriers to LPG Development
5.4 Making it work
5.1 Benefits of LPG5.1 Benefits of LPG
Main benefits Portable and powerful:
high calorific value for the same volume
Practical:6kg cylinders for domestic use, right at the heart of the family
Economical:non-perishable, non-degradable
“Clean”: non-toxic
Environmentally-friendly• an alternative to wood• an efficient way of fighting• deforestation
“Democratic”• beneficial for areas with
weak energy infrastructure• labour intensive• making life easier for women
5.2 LPG: 5.2 LPG: “Tailored” for Africa“Tailored” for Africa
5.3 Structural Barriers to LPG 5.3 Structural Barriers to LPG DevelopmentDevelopment
Lack of supply and/or infrastructure terminals and
plants
Inadequate regulations Cylinder property
right Cylinder exchanges
and cross-filling practices
Lack of standards (cylinders, appliances and filling plants)
Limited access for poorer classes cost of cylinder and appliances
Inappropriate taxation
cost of gas itself
import taxes indirect LPG subsidies to “traditional
fuels” subsidies: a “curse in disguise”
Lack of awareness from government authorities from the public in general
5.3 Structural Barriers to LPG 5.3 Structural Barriers to LPG DevelopmentDevelopment
5.4 Making it work5.4 Making it work
Supply and infrastructure
Role of private sector
Support from international institutions
Full involvement of investors & distribution companies
Capital intensive industry Slow but steady returns Involvement in the whole supply chain Consumer education
Commitment from international institutions Financing collective infrastructures Support for micro-credits Exchange of good practices
5.4 Making it work5.4 Making it work
Regulations developing adequate framework using experience from
well established and structured market opting for a cylinder deposit system banning cross-filling establishing a licensing system
Access for poorer classes and implication of taxes developing an efficient network financing solutions such as micro-credit eliminate taxation of LPG and cylinders (import duties
and VAT) harmonizing the tax system (in case partial taxation is
maintained) Support from governments Stability of the political and legal systems Rules governing trade and investment Regulations concerning industry operating and
safety standards Involvement in fair tax / duty treatment
Awareness & Consumer’s Adherence Openness to change
education campaigns (schools, associations, role of village heads)
- safety- applications
advertising campaigns by marketers
5.4 Making it work5.4 Making it work
ConclusionConclusion
Access to modern energy is a pre-requisite to economic and social development.
L.P.G. = Long-term Progress Generator
Africa with its increasing production of LPG and weak infrastructure has a solution within easy reach.It is only by combining the efforts of all stakeholders (private sector, government bodies, international institutions and public in general) that we will be able to grasp this historic opportunity.