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Uganda: Sanctions-Hit Russian Group Wins U.S. $4 Billion Uganda Oil Refinery Deal

Uganda has rewarded a $4bn oil refinery deal to a subsidiary of Russia’s Rostec, whose CEO has been subject to US sanctions. Uganda and RT Global Resources will now negotiate the terms of a joint venture to engineer and finance the $2.5bn refinery plus a product pipeline and associated infrastructure. The decision to award the contract cements growing ties between Moscow, and the country, which increasingly characterises the west as a neo-colonial aggressor. The CEO, Sergei Chemezov, is a former KGB officer and close ally of President Vladimir Putin. The US blocked his assets and prohibited companies from dealing with him since April 2014 in response to Russia’s military involvement in the conflict in eastern Ukraine. The EU followed suit in September. Although Uganda is under no legal compulsion to comply with the sanctions, the decision will further threaten its international standing. Uganda’s global standing was knocked last year […]

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Uganda: Why Govt Picked Russian Firm for Oil Refinery

Photo: Amnesty International (file photo). Government yesterday picked a Russian-led international consortium led by RT Global Resources as the preferred bidder for the construction of the country’s oil refinery. The other company which lost out, SK Engineering and Construction Co. Ltd from the Republic of South Korea, was retained as the alternative preferred bidder. RT Global Resources is a subsidiary of Rostec, a Russian arms manufacturer. Members of the consortium include; VTB, Capital Plc, a subsidiary of VTB, the second largest Russian state-owned bank, Telconet Capital Ltd Partnership, Tatneft JSC and GS Engineering Construction Corporation (South Korea). While members of the SK Engineering and Construction-led consortium include: SK KDB Global Investment Partnership, a private equity fund, China State Construction Engineering Corporation Ltd, Haldor Topsoe A/S and Mastro Oil and Gas Solutions (MOGAS). The selection of a preferred bidder for the refinery follows the submission of final offers from the […]

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South Sudan to Cancel Presidential Election Amid Civil War

(Bloomberg) — South Sudan’s government plans to cancel presidential elections scheduled for June 30 and extend its own term by two years amid efforts to end the conflict in the oil-producing country. “In our quest for peace, the cabinet has decided to call off the elections and extend the lifespan of the elected positions so that we give peace a chance,” Information Minister Michael Makuei Lueth told reporters today in the capital, Juba. The main opposition party welcomed the move. President Salva Kiir and the legislature’s tenures will be extended until July 9, 2017, Lueth said. Lawmakers will vote next week on a constitutional amendment for the government to continue without elections, he said in a phone interview. South Sudan has been engulfed by conflict since December 2013, when a power struggle within the ruling party turned violent. After Kiir arrested rivals for allegedly plotting a coup and ethnic […]

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Somali Petroleum Minister Sees Start of Oil, Gas Output by 2020

(Bloomberg) — Somalia may start producing oil and gas by 2020 after exploration work showed the potential for “huge” deposits of the resources in the Horn of Africa country, outgoing Petroleum Minister Da’ud Mohamed Omar said. “We expect that Somalia will produce oil and gas in 2020 and the nation will reap enormous benefits such as alleviating the poverty and leading the country into prosperity,” Omar told reporters Wednesday in the capital, Mogadishu. He didn’t identify which oil companies are carrying out exploration work in the country. Somalia is considering its first bidding round for oil blocks since 2009 as increasing stability begins to attract more foreign investors. African Union-backed government forces have regained control of about 70 percent of the country that had fallen under the control of al-Shabaab, the al-Qaeda-linked militant group seeking to create an Islamic state in Somalia. The government is in talks with companies […]

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East African Countries Could Lose Out On Low Oil Prices

Nairobi — East African countries are unlikely to significantly benefit from falling global oil prices due to inadequate storage facilities, a new research paper released by Deloitte East Africa indicates. "East African countries’ failure to set up sufficient oil storage facilities will mean that the region could miss out on a chance to accumulate cheap stockpiles as is the trend abroad," the research note argues. Over the past few months, global oil prices have more than halved, to stand at just below $50 (Sh 4,568) a barrel for the first time since May 2009. Across East Africa, motorists have however complained that the drop in pump prices is not commensurate with the movements in crude oil prices. "The plunge in prices of oil has rekindled the debate whether lower prices are cascading down to drivers such as the cost of electricity (generated from fossil fuels) and if travellers are […]

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South Sudan’s Warring Factions Sign Peace Deal

ENLARGE South Sudan’s President Salva Kiir, left, exchanges documents with rebel leader Riek Machar, right, in Arusha, Tanzania, as Tanzania’s President Jakaya Kikwete looks on. Photo: Agence France-Presse/Getty Images KAMPALA Uganda—Warring factions in South Sudan have signed an agreement to reconcile the ruling Sudan People’s Liberation Movement party, officials said on Thursday, in the latest effort to resolve the conflict that has ravaged the oil-rich nation for more than a year. Under the deal, signed in the northern Tanzanian city of Arusha, the parties agreed to “reunify and reconcile” the three factions within the party, the Finland-based conflict-resolution group Crisis Management Initiative said in a statement. President Salva Kiir, signed the deal with his former deputy Riek Machar —now a rebel leader—and Deng Alor Kuol, the representative of former political detainees who were arrested shortly after the outbreak of the violence in December 2013. The deal outlines the road […]

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South Sudan Signs Agreement With China’s CNPC to Boost Oil Production

ENLARGE Internally displaced South Sudanese receive cooking oil and food aid from the World Food Program in Bor, Jonglei state, on Dec. 10. The war-ravaged nation on Monday signed an agreement with China National Petroleum Co. in a bid to bolster oil production in the country. Reuters KAMPALA Uganda—South Sudan has signed an agreement with China National Petroleum Co., or CNPC, to boost oil production in at least three blocks, officials said Monday as the war-ravaged nation attempts to heal its battered oil industry. CNPC said in a statement that it would use heavy oil recovery technologies in ”stabilizing and increasing crude output” in the three blocks in the oil-rich but restive nation. The deal highlights how quickly China wants to restore South Sudan’s oil production which has slumped by a third since the outbreak of the conflict late last year, posing a threat to a vital source of […]

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South Sudan Hires Ex-Blackwater Chief to Restore War-Hit Oil

The former head of U.S. security company Blackwater USA, Erik Prince, was hired by South Sudan to help repair damaged oil facilities and boost output cut by a year of civil war. Prince’s Frontier Services Group Ltd. (500) , a Hong Kong-listed logistics and transportation company, is being paid 18.7 million euros ($23.3 million) by South Sudan’s Ministry of Petroleum to transport supplies to and perform maintenance on the production facilities at the oil fields , Chief Executive Officer Gregg Smith said by phone from New York yesterday. About 30 employees including pilots, engineers and logistics technicians have been using helicopters and airplanes to reach South Sudan’s oil fields since September, Smith said. “This is not supporting the army,” Smith said. “The contract is clearly with the Ministry of Petroleum and Mining to support the oil field services and to make sure the production of oil keeps flowing.” South […]

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Report: East Africa new energy ‘hot spot’

East Africa emerging as "hot spot" for energy activity, analysis from IHS finds. (UPI/A.J. Sisco) LAS VEGAS, Nov. 7 (UPI) — East Africa is the new "hot spot" for the energy market, with natural gas positioning the region as the new premier player, analysis from IHS finds. Analysis released from Nevada finds East Africa is expected to add another 1 million barrels per day in production by 2025, led by Mozambique and Tanzania. More recently, the region is home to more than 25 percent of the natural gas discoveries made worldwide between 2010-13. "East Africa is the new hot spot," Stanislas Drochon, director Africa oil and gas at IHS Energy, said in a Thursday statement. Drochon said the region is going through a transformative phase and could emerge as a crucial player in the global energy sector, though a lack of infrastructure and a weak regulatory framework could drag […]

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China reviewing oil relationships with Sudan, South Sudan, researcher says

WASHINGTON, DC, Oct. 21 10/21/2014 By Nick Snow OGJ Washington Editor The Chinese government and China National Petroleum Corp. are reviewing their relationships with Sudan and South Sudan following years of growth that changed both sides, a researcher said at Johns Hopkins University’s School for Advanced International Studies . “Sudan was a launching pad for CNPC to become a global corporation through financial and resource benefits,” said Luke Patey, a senior researcher at the Danish Institute for International Studies and author of “ The New Kings of Crude: China, Oil, and Civil War in Sudan and South Sudan .” “For much of the 2000s, CNPC took 40% of its oil from Sudan through subsidiaries as well as through the main subsidiary,” Patey said during an Oct. 20 event hosted by the SAIS China-Africa Research Initiative. “Things started to go bad for CNPC when the two Sudans signed a comprehensive […]

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