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Natural Gas Production in East Africa: An Inevitable Resource Curse

East African nations such as Mozambique, Uganda, Tanzania, and Kenya are experiencing a boom in oil and natural gas production that is increasingly exported by Western production companies to meet growing global demand. While these activities may appear to be an economic boon to these countries, the problem is that they could potentially cause natural gas to be a “ resource curse ” for these developing nations. A resource curse, or a “paradox of plenty,” can occur when the extraction of natural resources like fossil fuels and minerals in resource-rich countries contributes to slower economic growth than countries that are less abundant in these same natural resources. This effect could be mitigated if the government takes proactive steps to grow the rest of the economy, facilitate skills transfer, and combat corruption. Several economic mechanisms contribute to the resource curse. The import of foreign currency needed for foreign firms to […]

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Tullow Oil to Settle Uganda Tax Dispute for $250 Million

Tullow Oil Plc settled a capital gains tax dispute with the government of Uganda after agreeing to pay $250 million related to a 2012 deal with Total SA and Cnooc Ltd. The company paid $142 million at the time and will pay the remaining $108 million in three equal installments, it said Monday in a statement. The first $36 million portion has already been paid with remainder due in 2016 and 2017, it said. Significant output of oil in Uganda, first discovered there in 2006, has been restrained by delays including wrangling between the East African country and companies about how much crude to process locally or export through a pipeline. Uganda has an estimated 3.5 billion barrels of crude, according to the Energy Ministry, with Tullow, Total and Cnooc planning to tap the Lake Albert fields. “In recent months, the government of Uganda has proposed welcome and necessary […]

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SOCO Oil Company Paid Large Sums to Officer in Congo, Activists Say

Photo Virunga National Park, the oldest in Africa, has been the center of an intense conflict between the forces of economic development and environmental conservation. Credit Uriel Sinai for The New York Times NAIROBI, Kenya — When a British oil company began prospecting for oil in Africa’s oldest national park , drawing worldwide concern and inspiring an Oscar-nominated documentary last year, the company was adamant in denying any wrongdoing. Though soldiers in the Democratic Republic of Congo may have engaged in a campaign of intimidation and coercion against nearby residents who are opposed to drilling in the park, the company said it could not be held responsible for their actions. “We can’t tell the army to go and kiss off,” Roger Cagle, the deputy chief executive director of the oil company, SOCO International, told The Telegraph newspaper in Britain. He said that the soldiers had been assigned by the […]

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Report: South Sudan’s fate hinges on oil

Durability of Salva Kiir, president of South Sudan, may be closely linked to oil production in the war-torn country. File Photo by John Angelillo/UPI JUBA, South Sudan, May 26 (UPI) — The political unity holding South Sudan together may hinge on battles over oil-producing regions along the country’s northern border, an analyst said. When it gained independence from Sudan in 2011, the landlocked country gained control over much of the oil-producing regions, but Sudan maintained its grip on export infrastructure. Conflict erupted in South Sudan in 2013 when Salva Kiir, the country’s president, accused former Vice President Riek Machar of staging a coup. Rebel forces two years on are waging battle for control over Paloch near the Sudanese border, the only part of South Sudan still producing oil. "Oil is South Sudan’s bread and butter," Luke Patey, a researcher at the Danish Institute for International Studies in Copenhagen, told […]

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South Sudan Repels Rebels’ Oil-Field Attack

ENLARGE File pictures showing South Sudan President Salva Kiir, left, and the leader of South Sudan’s largest rebel group and former Vice-President Riek Machar. Photo: Agence France-Presse/Getty Images KAMPALA, Uganda—South Sudan’s army has repelled a rebel attack on oil fields in Upper Nile state, allowing the country’s only functional crude oil facility to remain open, officials said Thursday. After capturing the Upper Nile state capital Malakal over the weekend, several thousand rebels loyal to former Vice President Riek Machar pushed toward the oil fields. But government troops backed by helicopter gunships, tanks and armored cars successfully defended one of the country’s major economic assets. “The rebels have been defeated” said military spokesman Col. Philip Aguer. “Oil fields are fully under our control”. By Wednesday evening both sides had lost dozens of fighters, but government troops beat back the rebel assault, the army and witnesses said. The rebel assault was […]

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Uganda: Refinery Will Take Five Years to Complete

Repairs to the railway network operated by RVR in Kenya and Tanzania. Transport infrastructure remains a challenge as Uganda readies itself for oil production. Uganda’s planned crude oil refinery will take five years to complete, a representative of the firm that won the bid to build the multi-billion 60,000 barrels per day facility has revealed. Andrey Kozenyashev, the Regional Representative of RT Global Resources in East Africa told an industry meeting convened by the Uganda Chamber of Mines and Petroleum in Kampala yesterday that the company anticipates to complete the project in 2020 at the earliest. "After signing the agreement, it will take one and a half years to do the designs and then three years for construction of the facility," Kozenyashev said. The RT-Global Resources-led consortium beat off a challenge from another consortium led by South Korea’s SK Group to win the $2.5 billion project that will involve […]

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Uganda not yet ready for oil prime time

Bank of Uganda says oil prices are too low to realize nation’s full oil potential and production targets. Photo courtesy Tullow Oil KAMPALA, Uganda, April 22 (UPI) — A weakened crude oil market means investments might not materialize in time to finance Uganda’s fledgling oil sector, the Bank of Uganda said. The Bank of Uganda said in a monetary policy report for April there are lingering questions over the nation’s oil development given the low price of oil and the investments needed to exploit the type of crude oil found in the country. "Whereas oil production had been projected to start in 2018, this date could now be pushed out even further, given that the profitability of oil investments could remain depressed in the foreseeable future," the report said. Crude oil prices are trading at around 40 percent below their June 2014 highs, forcing energy companies to spend less […]

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Statoil finds more gas offshore Tanzania

Norway’s Statoil announced new gas discovery offshore Tanzania. The company said it will catch its breath now to peruse next steps. File Photo by UPI/Shutterstock/James Jones Jr. STAVANGER, Norway, March 30 (UPI) — Tanzania may be ripe for future offshore natural gas development, though time is needed for appraisal after the latest find, Norway’s Statoil said Monday. Statoil announced the discovery of roughly 1 trillion and 1.8 trillion cubic feet of natural gas in the Mdalasini-1 well off the Tanzanian coast. Marking the end of the first phase of operations there, the company said its eight discoveries to date combine for approximately 22 trillion cubic feet of gas reserves. Nick Maden, a regional vice president for the company, said in a statement the company views Tanzania as a high prospect gas opportunity, "but there will be a pause in the drilling to evaluate the next steps and to mature […]

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Egypt, Ethiopia and Sudan Sign Nile Dam Declaration

ENLARGE Egyptian President Abdel Fattah Al Sisi, right, next to his Sudanese counterpart Omar Bashir during a welcoming ceremony in the Sudanese capital Khartoum on Monday. Photo: Agence France-Presse/Getty Images Egypt, Sudan and Ethiopia took a step Monday to defuse tensions around Ethiopia’s construction of a massive dam on the Blue Nile, which has threatened to upset the geopolitical balance in the region over how to share water from the River Nile. Egyptian President Abdel Fattah Al Sisi, Sudanese President Omar al-Bashir and Ethiopian Prime Minister Halemariam Desalegn signed a declaration in Sudan’s capital Khartoum, pledging to better share the Nile’s waters, an Egyptian presidency official familiar with the matter said. Ethiopia has said the project is necessary to produce much-needed electricity, but the building of the dam has been controversial, with some scientists predicting it could disrupt the flow of the river into Egypt, where it provides much […]

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On the River Nile, a Move to Avert a Conflict Over Water

Ethiopia’s plans to build Africa’s largest hydroelectric dam on the Nile have sparked tensions with Egypt, which depends on the river to irrigate its arid land. But after years of tensions, an international agreement to share the Nile’s waters may be in sight. For thousands of years, Egyptians have depended on the waters of the Nile flowing out of the Ethiopian highlands and central Africa. It is the world’s longest river, passing through 11 countries, but without its waters the most downstream of those nations, Egypt, is a barren desert. So when, in 2011, Ethiopia began to build a giant hydroelectric dam across the river’s largest tributary, the Blue Nile, it looked like Egypt might carry out its long-standing threat to go to war to protect its lifeline. But last weekend, all appeared to change. Ministers from Egypt, Ethiopia, and Sudan agreed on the basis for a deal for […]

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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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South Sudan’s Nov Dar Blend crude oil exports to fall 8.6% on month: sources

Home | News & Analysis | Latest News Headlines | South Sudan’s Nov Dar Blend crude oil exports to fall 8.6% on month: sources Singapore (Platts)–20Oct2014/538 am EDT/938 GMT An estimated 4.2 million barrels or 140,000 b/d of South Sudan’s Dar Blend crude oil is expected to be exported in November, down 8.7% from 4.6 million barrels due to be exported in October, trade sources said Monday. A total of five cargoes — two of 600,000 barrels and three of 1 million barrels — are scheduled for lifting in November, the sources said. Dar Blend is a heavy, acidic crude produced at the Block 3 and Block 7 oil fields in South Sudan’s Upper Nile State. Malaysia’s Petronas, which holds a 40% interest in Dar Petroleum Operating Company, on Monday issued a tender offering 1 million barrels of Dar Blend crude for loading over November 25-26. The tender will […]

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Egypt: Ethiopian Water Minister Hails Egypt Decision to Resume Dam Talks

Ethiopian Water and Energy Minister Alemayehu Tegenu hailed Egypt’s decision to resume the three-way dialogue with Sudan and Ethiopia on the Renaissance Dam last August. He also applauded the positive atmosphere which prevailed in the two meetings, which were held in Khartoum in August and Addis Ababa in September. In statements on the sidelines of the second round of the tripartite national committee of the Ethiopian Renaissance Dam, currently in session in Cairo, Tegenu said that the outcome of the two studies recommended by the international experts committee should be based on authenticated and variable information and data in order to come up with unbiased recommendations and results. The project has been a source of concern for the Egyptian government since May 2013, when images of the dam’s construction stirred public anxiety about the possible effect on Egypt’s water supply from the Nile River. However, Ethiopia maintains that Egypt’s […]

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Statoil finds more gas offshore Tanzania

Statoil announced gas find in Tanzania, one of East Africa’s emerging producers. UPI/Maryam Rahmanian STAVANGER, Norway, Oct. 14 (UPI) — A new natural gas discovery offshore Tanzania puts the total amount of reserves there at 21 trillion cubic feet, Norwegian energy company Statoil said Tuesday. Statoil and its joint venture partner, Exxon Mobil, announced the discovery of about 1.2 trillion cubic feet of natural gas in place at the Giligiliani-1 exploration well offshore Tanzania. The new discovery pushes the total of in-place gas reserves above the 20 trillion cubic feet mark. Nick Maden, regional exploration director for Statoil, said the discovery opens up additional drilling opportunities off the Tanzanian coast. In June, Statoil unveiled a discovery of about 3 trillion cubic feet of natural gas off the coast of Tanzania in the Piri prospect. With the latest find, the Norwegian company said it would move its Discoverer Americas drill […]

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Kenya: The Next Big Oil Exporter

Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 and discovery after discovery has made this the hottest and fastest-paced hydrocarbon scene on the continent. When it comes to new oil and gas frontiers, today it’s all about Africa. And more specifically, it’s all about the eastern coast, with Kenya the clear darling–not just because it’s outpacing neighboring Uganda by leaps and bounds, but also because despite some political instability hiccups and the threat of militant al-Shabaab, it’s still one of the safest venues in the region. Six of the last 10 biggest finds have been in Africa, where—all told–there are some 130 billion barrels of crude oil waiting to be tapped by more than 500 companies, according to a recent report by PriceWaterhouseCoopers. Topping this list are Kenya’s Anza […]

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South Sudan: Fighting Threatens Oil Fields in Upper Nile

Fighting has erupted around Renk, a key border town in Upper Nile state. South Sudan says opposition forces supported by the Sudanese government are making a push towards oil fields further south. According to a source within the government, forces loyal to former Vice President Riak Machar launched attacks on government troops near Agon-Bar, northeast of Renk on September 18. The rebel attack initially forced government troops to withdraw from the area. The South Sudanese troops then counterattacked, forcing the rebels to withdraw toward the Sudanese border. Renk sits near several oil fields in Upper Nile state, the largest of which is Palouge. The state is responsible for around 80 percent of South Sudan’s oil production. Fighting has since spread to oilfields near Palouge, according to sources in the area. A Member of Parliament, who is from the region and asked for his name not to be used, accused […]

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Kenya Sees Oil Resources Almost Doubling With More Drilling

Kenya expects its estimate of oil resources to almost double to 1 billion barrels as well-drilling climbs and the government forges ahead with plans to build an export pipeline, an energy ministry official said. Tullow Oil Plc. (TLW) and its partner Africa Oil Corp. (AOI) have discovered an estimated 600 million barrels of oil in the South Lokichar Basin since announcing the country’s first crude find in March 2012. The discovery has spurred the East African nation to accelerate infrastructure-development plans, including construction of an oil pipeline that will link Uganda to a planned port in the Kenyan coastal town of Lamu. Initial data acquired from northern Kenya indicates the figure for estimated oil resources is set to rise with increased drilling, said Petroleum Commissioner Martin Heya. “Most licenses will move to the drilling stage next year because that is when their initial license period of two to three […]

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China Deploys Troops in South Sudan to Defend Oil Fields, Workers

United Nations peacekeepers secure a section of Juba airport in South Sudan on Aug. 12. China has deployed soldiers to South Sudan to protect Chinese workers. Agence France-Presse/Getty Images KAMPALA, Uganda—China began deploying 700 soldiers to a United Nations peacekeeping force in South Sudan to help guard the country’s embattled oil fields and protect Chinese workers and installations, a spokesman for the African nation’s president said Tuesday. The airlift of the Chinese infantry battalion to the South Sudanese states of Unity and Upper Nile, the site of the only operating oil fields still under the control of the central government in Juba, was expected to take several days, spokesman Ateny Wek Ateny said. While Beijing’s troops will operate under U.N. command, their posting to South Sudan marks a sharp escalation of China’s efforts to ensure the safety of its workers and assets in Africa and guarantee a steady flow […]

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Anadarko’s Mozambique Project Shows Appetite for Natural Gas

Anadarko has cleared this portion of forest near Mocimboa da Praia, Mozambique, as part of preparations for a new onshore drilling site. Mustafah Abdulaziz for The Wall Street Journal Few roads lead to this fishing village on the eastern shores of Africa. Drinking water and electricity are in short supply. Hazards include venomous snakes, malaria-bearing mosquitoes and gun-toting antigovernment rebels. But this is where Anadarko Petroleum wants to build one of the biggest projects ever attempted by a Western energy company. It has pledged to install acres of air-conditioned housing, an airstrip and a port—and to relocate almost 3,000 villagers currently living in mud huts. The search for oil has drawn companies to remote locations throughout the petroleum industry’s history. But Anadarko isn’t here for black gold. The American company is after something more abundant, albeit less lucrative: natural gas located about 30 miles offshore. There is more than […]

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Sudan and South Sudan

Map of key oil infrastructure in Sudan and South Sudan Since its independence in 1956 from joint British and Egyptian rule, Sudan has experienced several armed conflicts that have affected the country’s economic development, particularly its natural resources. The longest conflicts in the unified Sudan were the two civil wars fought between the Northern Sudanese government in Sudan (1955-1972) and the government in Southern Sudan (1983-2005). The second civil war ended with the signing of the Comprehensive Peace Agreement (CPA) that was in place from 2005 to 2011.The CPA set standards for sharing oil revenue (50:50 split) and a timetable toward a referendum on the South’s independence. A referendum took place in January 2011 in which the people of the South voted to secede from Sudan. In July 2011, Sudan became two countries: Sudan (Khartoum as the capital) and South Sudan (Juba as the capital). The border separating Sudan […]

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Tanzania positioned as LNG hub, BG Group says

BG Group said a test from an appraisal well at the Mzia discovery off the coast of Tanzania yielded a sustained gas flow rate of 101 million cubic feet per day. A similar well last year flowed at 57 million cubic feet per day. BG Group Chief Operating Officer Sami Iskandre said the results are a "critical factor as we progress design of the upstream production facilities and infrastructure" tied to liquefied natural gas development. Last year, energy consultant group Wood Mackenzie published a report saying Tanzania was a part of a growing number of emerging producers in East Africa. The report said output from Tanzania could help regional production increase from the current rate of 500,000 barrels of oil equivalent per day to 1.5 million barrels of oil equivalent. BG Group said test results from offshore developments "provided further support for a hub development to supply a potential […]

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Surge in Investment Recharges India’s Sputtering Power Sector

ByKenan Machado A pedestrian walked past a pole hosting mangled electricity wires at a slum in New Delhi in 2009. Agence France-Presse/Getty Images MUMBAI—Investors are ploughing money into India’s energy sector again, betting that there are brighter days ahead as the country’s new government clears the path for power producers and distributors. India’s utilities and energy companies—which have struggled for years with high government restrictions and low returns—have attracted a total of $2.61 billion in investment so far this year, according to data from Dealogic. The last time the sector attracted so much money was before the global financial crisis, when $2.67 billion was invested over the same period in 2006. “People expect the economy to grow,” said Tan Cheng Guan, an executive vice president at Singapore utilities company Sembcorp Industries Ltd. which invested $204 million this year, buying stakes in two Indian power plants . India needs its power […]

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Exxon Ends Oil Search With Total in South Sudan as War Rages

Exxon Mobil Corp. (XOM) , the U.S.’s largest oil company, ended exploration plans with Total SA (FP) in South Sudan, Total and the government said, a sign of faltering investor confidence in the African nation as a civil war enters its eighth month. Exxon in April didn’t renew an agreement with Total to negotiate for joint-exploration over parts of a 120,000 square-kilometer (46,300 square-mile) concession in Jonglei state, Total spokeswoman Anastasia Zhivulina said in an Aug. 12 e-mailed response to questions. Total is still bidding to explore in partnership with Kuwait’s state-owned Kuwait Foreign Exploration Petroleum Co. she said. Exxon spokesman Patrick McGinn said by e-mail that the company doesn’t comment on specific ventures. “Losing the American oil company’s interest is definitely a blow for the future prospects of South Sudan ’s oil industry,” Luke Patey, a researcher on the country’s industry at the Danish Institute for International Studies, […]

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Tanzania’s Natural Gas Outlook is Promising, Says IMF

A BG survey vessel gathering data off the coast of Tanzania. CGG Tanzania has a good chance of becoming a major producer and exporter of natural gas over the next decade, said the International Monetary Fund. Significant offshore discoveries have been made over the last two-to-three years and further exploration is underway, the fund said in its recent country report for Tanzania. “Although gas resources haven’t yet been declared commercially viable, estimates of discoveries indicate recoverable offshore gas resources of at least 24 trillion-26 trillion cubic feet, potentially sufficient for a four-train Liquid Natural Gas plant (possibly as a common facility for several upstream gas fields),” it said. “A final investment decision is expected at the earliest in 2016 or 2017.” Total investment during the development phase could amount to $20 billion-$40 billion, depending on the scale of the project. This would be the largest investment ever […]

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India's Oil and Gas Jewel Needs Polish

Bloomberg News India’s government calls Oil & Natural Gas Corp. one of its "nine jewels," sparkling state-owned assets with brilliant potential. New Prime Minister Narendra Modi wants to sell part of these family jewels before he does anything to help realize that potential. The government, which owns more than two-thirds of ONGC, may float 5% of the shares sometime after October, according to officials this week. Last week’s Indian budget has aggressive targets for revenue, including for selling stakes in state firms that, in theory, investors would love to get a hold of. India’s largest energy producer by output is such a company, boasting low costs and low debt. Yet this crown jewel needs polish due to the country’s oil and gas subsidy programs, which saddles ONGC with huge costs. The […]

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India’s Oil and Gas Jewel Needs Polish

Bloomberg News India’s government calls Oil & Natural Gas Corp. one of its "nine jewels," sparkling state-owned assets with brilliant potential. New Prime Minister Narendra Modi wants to sell part of these family jewels before he does anything to help realize that potential. The government, which owns more than two-thirds of ONGC, may float 5% of the shares sometime after October, according to officials this week. Last week’s Indian budget has aggressive targets for revenue, including for selling stakes in state firms that, in theory, investors would love to get a hold of. India’s largest energy producer by output is such a company, boasting low costs and low debt. Yet this crown jewel needs polish due to the country’s oil and gas subsidy programs, which saddles ONGC with huge costs. The […]

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Statoil, ExxonMobil make another gas discovery offshore Tanzania

Statoil ASA and coventurer ExxonMobil Corp. have made what the companies are calling a “high-impact” gas discovery in the Piri prospect offshore Tanzania, marking the sixth discovery on Block 2 by the firms ( OGJ Online, Dec. 6, 2013 ). Piri-1, drilled by the Discoverer Americas drillship, is 2 km southwest of the Lavani-1 well in 2,360 m of water. Discoverer Americas is now drilling the Binzari prospect on Block 2. The discovery was made in the same Lower Cretaceous sandstones as the gas discovery in the Zafarani-1 well drilled in 2012 ( OGJ Online, Dec. 22, 2012 ). Statoil says discovery of an additional 2-3 tcf of gas in place in the Piri-1 well brings to 20 tcf the total of in-place volumes on the block. Additional prospectivity has been mapped and will be tested throughout this year and next, Statoil said, adding that the company expects […]

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Ukraine Suspects Terrorism in Pipeline Explosion

A major natural gas pipeline exploded in central Ukraine on Tuesday, a day after the Russian energy behemoth Gazprom said that it was cutting off supplies to Ukraine in a dispute over pricing, and officials immediately labeled it a possible act of sabotage. Utility officials said that natural gas deliveries were not interrupted and that supplies to Ukrainian customers and other European countries were flowing through alternative pipes. The blast occurred in a sparsely populated area of the Poltava region, which lies between Kiev, the capital, and the embattled regions of eastern Ukraine where a civil war is effectively underway between pro-Russian separatists and the Ukrainian military. Video from the scene showed a huge plume of fire shooting hundreds of feet into the sky. The explosion destroyed a section of the Urengoy-Pomary-Uzhgorod pipeline, which runs more than 1,800 miles from Russia’s Arctic north through Ukraine to the […]

Posted On : Published By : Tom Whipple
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East African Energy-Boom Investments Take Focus in Budgets

Kenya, Uganda and Tanzania plan to allocate money in their annual budgets to spur investment in infrastructure to exploit oil and natural gas from deposits that companies including Tullow Oil Plc (TLW) are developing. Ugandan and Kenyan oil discoveries, made in 2006 and 2012 respectively, and new gas finds off the coast of Tanzania that have boosted reserves to as much as 46 trillion cubic feet have seen East Africa become a frontier for petroleum exploration. The three countries, along with Rwanda, which are all members of the East African Community , will tomorrow present their budget statements for the financial year starting July 1. “If there is one thing most EAC partner states agree upon it’s infrastructural development,” Ahmed Salim, a senior associate based in Dubai for research consultancy Teneo Intelligence, said in an e-mailed response to questions. State spending will go toward “development of their respective extractive […]

Posted On : Published By : Tom Whipple
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South Sudan: Is South Sudan Falling Into Oil Resource Curse?

The notion of resource curse has engulfed African countries, which are rich in natural resources and heavily depend on revenues from these resources. The resource curse is characterized by poverty-stricken, corruption and violent. Relatively small group ( Elite ) captures vast wealth while leaving the entire society without basics need such as clean drinking water, electricity, shelter and consumption goods that define the absolute minimum resources necessary for long-term physical well-being. Political instability triggered the oil resource curse; the evident suggests that countries with bad institutions are likely to experience the natural resource curse. One of solution to get out from oil curse is to improve institutions, good governance, accountability and transparency. South Sudan can voluntarily signed up to the Extractive Industries Transparency Initiative (EITI) promoted by former British Prime Minister Tony Blair in 2002 that became an independent NGO in 2007. The main point of this is […]

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South Sudan: Government Admits Conflict Has Hampered Oil Production

Juba — South Sudan government admitted on Sunday that the ongoing conflict has affected the country’s oil production, with production now at just 165,000 barrels per day. Petroleum minister, Stephen Dhieu Dau, told Sudan Tribune that the country continues receiving revenues from oil produced in Upper Nile state, where production rate is reportedly on the decline since no additional explorations takes place in the area. "The oil production is continuing in Upper Nile. The current output is not bad, but there is a drop. At the moment the level of output stands at 165,000 barrel per day from 245,000 barrels per day before the current crisis erupted last year", said Dau. "This [oil] is produced in Paloch", added the petroleum minister. He commended government troops for providing protection and defense to the only remaining oil wells in the country, despite several attempts by rebels to control it. "There is […]

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Kenya: Oil Exploitation Contradicts Kenya's Climate Goals, Legislator Warns

Kenya is in the final stage of enacting a new climate change law, expected to be approved in the coming months. At the same time, the private sector is preparing to tap significant oil reserves in the north. Will the hunt for fossil fuels thwart Kenya’s efforts to go green and curb its carbon emissions? After a 2007 study forecast how climate change would impact Kenya, a National Climate Change Response Strategy was launched at the 2009 U.N. climate summit in Copenhagen. The government then developed a Climate Change Action Plan to implement the strategy, which was completed in March 2013. The action plan spells out how to tackle climate change at local, county and national levels. The next step is to enshrine that in law. "We realised we had collected enough information to start preparing climate change legislation, because it cuts across all sectors – hence the need […]

Posted On : Published By : Tom Whipple
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Kenya: Oil Exploitation Contradicts Kenya’s Climate Goals, Legislator Warns

Kenya is in the final stage of enacting a new climate change law, expected to be approved in the coming months. At the same time, the private sector is preparing to tap significant oil reserves in the north. Will the hunt for fossil fuels thwart Kenya’s efforts to go green and curb its carbon emissions? After a 2007 study forecast how climate change would impact Kenya, a National Climate Change Response Strategy was launched at the 2009 U.N. climate summit in Copenhagen. The government then developed a Climate Change Action Plan to implement the strategy, which was completed in March 2013. The action plan spells out how to tackle climate change at local, county and national levels. The next step is to enshrine that in law. "We realised we had collected enough information to start preparing climate change legislation, because it cuts across all sectors – hence the need […]

Posted On : Published By : Tom Whipple
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Food Crisis Worsens in South Sudan as Civil War Is Displacing Millions

At the beginning of the rainy season every year, Nyaaker Onwar, 34, would plant the sorghum and vegetables, while her husband and eldest son herded the cows and caught fish from the White Nile. They ate what they produced, and when the harvest was bountiful, they sold the rest in a nearby market town. In February, armed men looted their cows, burned their fishing boat and kidnapped some of their relatives. Ms. Onwar fled with her husband and seven children to this village through rain and deep mud. She has been here for weeks with thousands of people displaced by South Sudan’s civil war. When she arrived, she was hungry, with no money and few options. “We had to sell our clothes to buy food,” she said. Five months of war in South Sudan has led to the deaths of thousands and the displacement […]

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U.S. Imposes First Sanctions in South Sudan Conflict

In its first use of economic sanctions against combatants in the bloody fighting in South Sudan , the Obama administration on Tuesday ordered asset freezes and travel bans on two individuals, one on each side of the conflict. The sanctions, which were announced by Secretary of State John Kerry , were imposed under an executive order President Obama signed a month ago in response to the violence that has killed thousands and displaced more than a million people. The announcement came as President Salva Kiir of South Sudan and Riek Machar, the rebel leader, agreed to face-to-face talks in Ethiopia, which are tentatively scheduled to be held on Friday. One of the targets of the sanctions was Marial Chanuong, the commander of the government’s presidential guard force, who Mr. Kerry said led attacks against civilians in and around Juba, the South Sudan capital. The other was Peter […]

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South Sudanese Army Seizes Town Used as Base by Rebel Leader

South Sudanese government forces seized the stronghold of the country’s rebel leader and the capital of oil-rich Unity state from insurgents, drawing criticism from the U.S. for violating a January truce. Government forces yesterday retook Unity’s capital, Bentiu, and Nasir, the town in neighboring Upper Nile state used as a base by former Vice President Riek Machar, army spokesman Philip Aguer said by phone today from the national capital, Juba. Rebel spokesman Mabior Garang confirmed the army had recaptured the towns. “It’s not a fragile takeover,” Aguer said. Nasir is “very crucial because that was the headquarters of Riek Machar.” The government expects attacks on the oil-producing state to cease as a result, he said. Fighting erupted in the world’s newest nation on Dec. 15 with President Salva Kiir accusing Machar of leading a coup, a charge Machar denies. Violence has left thousands of people dead and forced more […]

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Cold economics may limit big LNG ambitions

Natural gas enthusiasts from Texas to Capitol Hill insist the world is clamoring to buy American supplies of the fuel and the only major obstacle is the federal government. But there’s an even bigger economic reality standing in the way: The facilities to super-chill gas for transport cost billions to build, and even with permits, few will ever make it past the drawing board. "It’s very easy for us in this country to blame everything on our regulators, but economics are the biggest driver here," said Joe Fagan, a partner at Day Pitney who advises clients on liquefied natural gas import and export matters. "Even […]

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S. Sudan Rebels Killed Hundreds on Ethnic Basis, UN Says

Rebels allied to former Vice President Riek Machar who seized the city of Bentiu last week killed hundreds of civilians seeking shelter there, after determining their ethnicity or nationality, the United Nations Mission in South Sudan said. “These atrocities must be fully investigated and the perpetrators and their commanders shall be held accountable,” Raisedon Zenenga, the officer in charge of the mission, said in a statement on its website late yesterday. Rebel forces said on April 15 that they had gained control of Bentiu, the capital of oil-rich Unity state, after clashes with government forces. The conflict in the world’s newest state, between factions loyal to President Salva Kiir and his former deputy Machar, erupted in December and has left thousands of people dead and driven a million from their homes, according to the UN. The UN mission said opposition forces entered a mosque in Bentiu where hundreds of […]

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South Sudan: Dozens dead as group opens fire in U.N. base

At least 58 people were killed Thursday when a group of armed civilians pretending to be peaceful protesters delivering a petition to the United Nations in South Sudan  forced their way into a U.N. base sheltering some 5,000 civilians and opened fire, the world body said. Among those killed in the attack on the base in Bor in northern Jonglei state were 46 internally displaced persons and 12 attackers, according to the U.N. Mission in South Sudan. No U.N. staff were killed, they said.  Another U.N. spokesperson said about 100 had been injured. Two U.N. peacekeepers were wounded repelling the armed intruders, the U.N. said. The United Nations has reinforced security at Bor, and South Sudan’s government has sent troops to secure the base. More than 1 million people have fled their homes since  fighting erupted in the world’s youngest country in December between troops backing President Salva Kiir and soldiers loyal to his sacked Vice President […]

Posted On : Published By : Tom Whipple