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THE ADDAX & ORYX GROUP Using Gas for Africa’s Energy Future Thierry Genthialon Chief Operating Officer of ORYX Oil & Gas 11th African Oil and Gas, Trade.

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Presentation on theme: "THE ADDAX & ORYX GROUP Using Gas for Africa’s Energy Future Thierry Genthialon Chief Operating Officer of ORYX Oil & Gas 11th African Oil and Gas, Trade."— Presentation transcript:

1 THE ADDAX & ORYX GROUP Using Gas for Africa’s Energy Future Thierry Genthialon Chief Operating Officer of ORYX Oil & Gas 11th African Oil and Gas, Trade and Finance Conference & Exhibition May 2007, Kenyatta International Conference Centre, Nairobi, Kenya NOT AN OFFICIAL UNCTAD RECORD

2 Table 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

3 1. Addax & Oryx Group Profile An integrated petroleum and mining company - A fast-growing group

4 1.1 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

5 2. Downstream Division: ORYX Oil & 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

6 2.1 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

7 2.2 ORYX Oil & Gas Presence in Africa Network of 10 service stations HC depot 10’000 m3 Gas terminal 2’000 m3 Gas filling center Lubricant blending plant Bunkering terminal

8  Using local competencies  Subsidiarity principle  Tailored marketing responses  Appropriate standards 2.3 ORYX Oil & Gas Specific Approach  Synergies with AOG Trading arm

9 3. 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

10 3.1 World Energy Consumption World Energy consumption is projected to increase by 71% from 2003 to The most rapid growth in energy demand is projected for nations outside the Organization for Economic Cooperation and Development (non-OECD nations). International Energy Outlook 2006, Energy Information Administration

11 3.2 Africa’s Energy Consumption by Fuel International Energy Outlook 2006, Energy Information Administration

12 3.3 Demographic Data and Estimates © 2006 World Population Data Sheet, Population Reference Bureau

13 3.4 Evolution of Gross Domestic Product © International Energy Outlook 2006, Report #: DOE/EIA-0484(2006)

14 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

15 4.1 What is LPG ?  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

16 4.3 Incremental LP Gas Supply & Demand Growth Sousce: Purvin & Gertz’ presentation World LP Gas Forum Chicago, October 18, 2006

17 5. Using LP Gas for Africa’s Energy Future 5.1 Benefits of LPG 5.2 LPG: tailored for Africa 5.3 Structural Barriers to LPG Development 5.4 Making it work

18 5.1 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

19  “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: “Tailored” for Africa

20 5.3 Structural Barriers to LPG Development  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)

21  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 Development

22 5.4 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

23 5.4 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

24  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 work

25 Conclusion 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.

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