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Washington DC 22 June 2006

Sixth GGFR Steering Committee Meeting. Washington DC 22 June 2006. Agenda. Overview Phase I (2003-2006) Phase II (2007-2009). Overview GGFR Mission and Partners. GGFR Mission: Working towards a world free of flares GGFR Partners: Partner Countries Partner Companies Donors

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Washington DC 22 June 2006

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  1. Sixth GGFR Steering Committee Meeting Washington DC 22 June 2006

  2. Agenda • Overview • Phase I (2003-2006) • Phase II (2007-2009)

  3. OverviewGGFR Mission and Partners • GGFR Mission: Working towards a world free of flares • GGFR Partners: • Partner Countries • Partner Companies • Donors • GGFR Core Team

  4. OverviewPhase I Strategy • Worked with willing partner countries and companies • Seized opportunities • Developed innovative tools and methodologies – created the building blocks for a solid foundation

  5. OverviewPhase I Accomplishments • Significant representation of world gas flaring in the Partnership • Global deliverables • Global standard for flaring and venting • Regulatory best practices • Gas flaring data tool • Carbon credit financing • In-Country public-private partnerships • 17 demonstration projects • Associated gas recovery plans • Country implementation plans

  6. From Global to Country focus 2003 Standards Regulations Flaring and Venting Phase I Reduction Activities Commercialization Carbon Credits 2006 Country Deliverables and Demo projects Focus on major flaring countries 2007 Phase II and in-country deliverables Sustainable Gas Flaring Reduction 2010

  7. OverviewPhase II Mandate • International support • G8 Gleneagles endorsement • GGFR Partnership actions • Option Paper, Sept. 2005 • Steering Committee meeting, Nov. 2005 • Workshop, March 2006 • Steering Committee Meeting, June 2006 • Objective: Trust Fund Agreements in place by Nov., 2006

  8. OverviewPhase II Strategy (2007-2009) • Identify and prioritize high-impact countries and companies • Accelerate sustainability strategies in existing partner countries and global deliverables / activities (hand-off, mainstream, exit) • Measure tangible results • Publicize successes

  9. Phase I:In Depth Review- Key Success Factors- Flaring Data Update- Stakeholder Engagement Process (Standard)- Demonstration Projects

  10. Phase I: Key Success Factors

  11. Coverage of world flaring: 2004 Achievement 23% Non-Partners GGFR Partners Countries 52% Partners through OPEC 25% (Data as reported to GGFR)

  12. Endorsement of the Stakeholder Engagement Process (“Standard”) Achievement Partner country endorsement Partner company endorsement Endorsed 33% Not yet 11% Not yet 67% Endorsed 89%

  13. Country Implementation Plans Associated Gas Implementation Plans Achievement As known to Core Team CIPs Received AGRPs 0% Received 0% Still awaited 100% Still awaited 100%

  14. Demonstration Projects Achievement Demo Project coverage Countries without Total of 17 projects 33% Countries with 67%

  15. Phase I: Key Success Factors Discussion/Actions • Overall achievement 2. Comments and agreement on the achieved results

  16. Phase IFlaring Data Update

  17. Phase I Flaring Data UpdateFlare and Vent Volumes Actions: 1. By end-September, Partners should provide 2005 actual flaring data, with an update for 2006 and 2008 and the projection for 2009. 2. Agree whether the aggregated flaring data (2004, 2006 & 2008) can be made available to the public through the two GGFR web-sites.

  18. Phase IStakeholder Engagement Process (Standard)

  19. Phase I: Stakeholder Engagement Process (Standard) Action items from 21 June Workshop Associated Gas Recovery Plans • The Core Team will request, by end-June, Partner Companies to provide project-related gas flaring reduction volumes for 2003-2006. Data to be provided by end-September • Summary AGRPs, including forecasts of project-related gas reduction volumes, should be sent to GGFR before end-2006

  20. Phase I: Stakeholder Engagement Process (Standard) Action items from 21 June Workshop Country Implementation Plans • The Core Team will request, by end-June, Partner Countries to provide project-related gas flaring reduction Volumes for 2003-2006. Data requested to be provided by end-September • GGFR will be pleased to facilitate, at Partner Country’s request, development of CIPs through workshops involving government, Operators and other stakeholders

  21. Phase I: Stakeholder Engagement Process (Standard) Comments from 21 June Workshop GGFR Data Tool • Tool was very well received and considered fit-for-purpose • It was agreed not to aim for high frequency/high detail reporting during early stages of tool implementation • DOE requested to include non-Partner countries in roll out to maximize coverage • Cameroon requested possibility for higher frequency of reporting and data transfer from company databases be considered in next tool enhancement • Norway suggested that all reporting should be done through the Data Tool

  22. Phase IDemonstration Projects Update (Commercial)

  23. Feasibility studies Project identification workshops Stakeholder facilitation Ohanet-Algeria / LPG- Indonesia Río del Rey-Cameroon / Sedigi-Chad Gulf of Guinea / Zafiro-EG / Ofon-Nigeria Phase I: Demonstration Projects Update (Commercial) Approach Projects

  24. Phase I Demonstration ProjectsGulf of Guinea:A two phase approach Stage I (2004/2005): In country studies and facilitation 1- Cameroon: • Very disperse sources and few markets (38 fields – 1.6 BCM flaring) • Study carried out identifying attractive option for Domestic: Conversion to gas (power plant and refinery) plus additional Power • Workshops organized in 2004 and 2005 • No real follow up after the study.

  25. Phase I Demonstration ProjectsGulf of Guinea:A two phase approach Stage I (2004/2005): In country studies and facilitation 2- Equatorial Guinea • Challenge: Relatively few fields, few markets (EG NLG and locally) • Collaborative effort needed between IOCs and government: Creation of a GGFR EG Steering Committee • Flaring reduction options identified based on expanded project boundaries • Joint Feasibility Study carried out by two operators • No agreement reached on investment needed and gas available

  26. Phase I Demonstration ProjectsGulf of Guinea:A two phase approach Stage 2 (end 2005/2007): Regional facilitation Nigeria/Cameroon/Equatorial Guinea • Regional feasibility Study presented on Nov. 17, 2005 in London As a result, two MOUs have been signed between the countries • Feb. 2006: Between Nigeria and EG • March 2006 : Between Cameroon and EG • Stakeholders to solicit GGFR facilitation if and when needed

  27. Phase I: Commercial Project Status Action: • Ensure local engagement towards successful project implementation • Leverage World Bank Group’s unique position and resources to facilitate and provide financing • Agree on specific next steps in: • Gulf of Guinea • Algeria • Nigeria

  28. Phase IDemonstration Projects Update (Carbon Credit)

  29. Gas to power Gas to pipeline Gas to reinjection Gas to LNG Gas to LPG Russian JI (Russia) Afam (Nigeria) TFT (Algeria) Kwale (Nigeria) OB/OB (Nigeria) LNG (Angola) LPG (Indonesia) Phase I: Demonstration Projects Update (Carbon Credit) Projects Methodology

  30. Phase ICDM/JI Project Status Action: Provide data and resources to finalize PDD’s and methodologies (OB/OB, LNG, TFT, AFAM) Sponsors submit draft methodologies for approval (Shell, Chevron, ENI, and Sonatrach) Increase participation and institutional capacity from Designated National Authorities (Angola, Algeria, Kazakhstan, Libya, Nigeria, and Russia)

  31. Phase I Work Program, Budget and FinancingGGFR Total Expenditures for 2003-2006: US$ 8 million

  32. Phase IWork Program, Budget and Financing of which Country Deliverables US$ 3.8 million Total Expenditures 2003 – 2006 US$ 8 million

  33. Phase II Engage GGFR PartnersFocus on high-impact countriesDefine KPI’s to measure results

  34. Phase II Strategy (2007-2009) • Identify and prioritize high-impact countries and companies • Engage Partners more • Accelerate sustainability strategies in existing partner countries and global deliverables / activities (hand-off, mainstream, exit) • Measure tangible results • Publicize successes

  35. Phase II Country Selection “Long-list” of potential client countries for extension period: The Gulf of Guinea : Cameroon, Equatorial Guinea,Nigeria CIS : Russia, Kazakhstan, Azerbaijan Middle East : Libya, Qatar, UAE, Saudi Arabia, Iraq Latin America : Brazil, Mexico, Venezuela Asia : Indonesia

  36. Phase II Country Selection Selection Process: • “Long List” proposed – March, 2006 • Select “Intermediate List”– June, 2006 - Based on Partner interest, ability and willingness to work with Core Team • Define “Short List”– October, 2006 • 5 Programs / ~10 target countries • Based on country assessments • Develop country-specific Strategies & Action Plans

  37. Goal Measure progress towards ultimate expected outcome (reduced flaring and venting) Approach Structured around 5 Focus Areas: Communication & Partner Coverage Stakeholder Engagement (Standard) Commercialization Carbon Credits Flaring Regulations and Policies Phase II Results Framework

  38. Phase II Results Framework Approach (cont.) • Regular exchange of Key Performance Indicators (KPI’s) by Partners and core team • GGFR Steering Committee to steward partnership using KPI’s • Use KPIs to define targets for exit or sustainability strategy in countries

  39. Phase II Results Framework Action: • Partners provide feedback on proposed KPI’s – June 22, 2006 • Provide input on KPI’s and targets – by Sept. 30, 2006 • Select critical KPI’s and agree on targets – October Workshop

  40. Communication Strategy

  41. Communication Strategy Baseline –Little visibility for GGFR • 89 news stories mentioning gas flaring in the headline (title): One mentions World Bank; none mention GGFR • 789 articles mention gas flaring in passing: Only 90 mention World Bank; only 11 mention GGFR • Tone of coverage from sample of articles shows 47% negative coverage, 33% balanced coverage, and 20% positive coverage. • 76% of coverage is devoted to Nigeria alone • 16% deals with Russia, Kazakhstan; Remaining 8% refers to other topics/countries

  42. Communication Strategy Core messages • The GGFR Partnership contributes specific solutions to overcome barriers • The success and viability of gas flaring reduction projects depend on having the right conditions and incentives • GGFR partners are working to limit the waste of a valuable clean energy resource and the emission of carbon dioxide • The GGFR Partnership’s achievements demonstrate that its efforts are relevant, viable and desirable

  43. Communication StrategyAction • Designate communications representatives to participate in • Communications Workshop (following October Strategy Workshop) • Define overall communications program • Propose communications budget

  44. Communication Strategy Flaring Best Practices Forum 2 ½ day Global Conference December 13-15, 2006 in Paris Objectives: • Bring together high level representatives from Governments/Companies to raise Gas Flaring awareness • Sharing of Best Practices, Success Stories • Raising Technology and Regulatory awareness • Demo project identification to fuel GGFR Phase II

  45. Communication Strategy Flaring Best Practices Forum Action: • Secure sponsorship by June 30, 2006 • Finalize participation and presentations (through Organizing Committee) by Sept. 30, 2006

  46. Sustainability (Exit) Strategy for Global Activities

  47. Sustainability (Exit) Strategy for Global Activities GGFR Global Activities: • Stakeholder Engagement Process (Standard) implementation • Maintain and implement data tool • Best Practice dissemination • Communication *Note: Exit strategies for individual countries will be determined in country planning phase, based on Results Framework and KPI’s

  48. Sustainability (Exit) Strategy for Global Activities How do we see the Partnership after 2009 when the extension period ends? Option A: Partnership ceases to exist - E.g., Core functions are outsourced to …? Option B: Partnership continues in a changed form - E.g., Core Team hosted outside World Bank? Action: Feedback to the core team by Sept. 30, 2006 for development of a Sustainability Strategy at the October workshop

  49. Phase II – Strategic Planning October, 2006 Strategic Workshop • Finalize Short List of countries • Define Work Program for selected countries • Finalize KPI’s and targets Communications Workshop • Define Communications Plan Action: • Define participation by Sept. 30, 2006

  50. Phase II Funding Options • Selective funding of Country/Regional Programs was not supported by the Steering Committee Nov 16 • WBG, OPEC, Donor Countries and Partner Companies contribute $350,000 each for 3 year period • Partner Countries contribute $100,000 each for 3 year period • Trust Fund Extension draft letter will be distributed

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