Libya’s Energy Future: Industry and Political risk outlook was launched at a Chatham House seminar in London on 20 July.
Based on African Energy’s unparalleled track record in following Libya’s energy story and careful, originally sourced reporting from Libya and global markets, this updated and enlarged special report analyses the major issues and the financial and political trends influencing development of Libya's energy industries. Read more
A detailed guide to electrification in Africa
A 400-page study published in Paris by Karthala, L’Electricité au Coeur des Défis Africains (available in French only) includes an overview of the continental electricity supply industry and examples of generation, transmission and distribution projects. A chapter on decentralised rural electrification is followed by another on the establishment of decentralised services companies.
The book draws on articles and materials from a number of experts and sources, including African Energy.
Order a copy now, priced €36 / £30 plus postage and packing. Email: nick@africa-energy.com
AfricaHardball is an executive dialogue that brings together policy-makers, industry leaders and analysts to discuss the key political issues affecting the African energy industry in frank and open terms.
The last AfricaHardball roundtable was held on 29 June, prior to the start of EnergyNet Ltd’s annual Africa Energy Forum (AEF), in Basel. Read more
Analysis of the big issues affecting the continent and its energy industries
The subject headings below will take you to a selection of headlines and links from the African Energy archives. The listed topics are regularly updated with links to new developments and analysis.
Kenya: Lake Turkana Wind Power close possible by year-end
Financial close for the Lake Turkana Wind Power (LTWP) project in northern Kenya – expected to be Africa’s biggest wind farm – is possible by year-end, with a dozen multilateral, development finance institution and commercial financiers expressing interest in backing the 300MW scheme. Developer Aldwych International has taken a 51% stake in the LTWP project company, alongside South Africa’s Industrial Development Corporation (IDC) with 19%, and the eight original Dutch/local investors holding 30% (AE 180/13). Issue 188, 11 June 2010.more
Special report: After false dawns, biofuels investors see grounds for renewed optimism
After a difficult period of collapsing financing and often disappointing results, African biofuels investors believe markets are set to improve so they can launch new export and domestic fuel and power projects, write François Misser and Jon Marks Issue 184, 16 April 2010.more
Morocco leads North Africa in encouraging renewables
Renewables projects are attracting strong interest from financiers, with Morocco offering particularly strong incentives for investors, writes John Hamilton Issue 184, 16 April 2010.more
Morocco crafts a high-level strategy to push large-scale solar development
The Desertec Industrial Initiative (DII) to export solar power from North Africa to Europe continues to exercise considerable media and industry interest, promising clean energy from a network of solar generators based in the desert lands south of the Mediterranean. Issue 184, 16 April 2010.more
Copenhagen’s legacy may be more coherent policies and project funds
World leaders failed to secure a binding global treaty on reducing carbon emissions at the UN Climate Change Conference in Copenhagen – not least due to opposition from a radical group including Venezuela and Sudan, as well as differences between global giants led by the United States and China. Leaders did secure a deal to limit temperature rises to 2ºC but without specifying the global emissions cuts needed to meet that target. Neither did the Copenhagen conference secure precise financial commitments despite its approval of face-saving plans for funding the climate change agenda. Over the next month, countries are expected to submit their pledges for cutting emissions, but the proposals already announced are not sufficient to meet the 2ºC target. Issue 178, 12 January 2010.more
So much demand for projects, but Africa’s CDM potential is still woefully underexploited
African governments are united in calling for a better deal from the new global round of climate talks in Copenhagen. Underpinning their arguments is evidence that Africa remains poorly served by the United Nations’ carbon trading scheme. Leaders are fearful that the continent could fall even further behind other regions after the talks unless the donor community shows greater flexibility and mobilises resources to push the climate change/renewables agenda, writes Kevin Godier Issue 176, 11 December 2009.more
Angola has not given up plans to launch the licensing round put on hold since 2008 as first elections, then the global economic crisis, delayed plans to offer open acreage to investors. Vice minister for oil Anibal Octavio da Silva told the G8 Africa Business Forum organised by the Commonwealth Business Council that the government had been planning to launch the round this year but it was now more likely to go ahead next year. Issue 189, 25 June 2010.more
EQUATORIAL GUINEA
GEPetrol signs PSCs with Gazprom Neft, Vanco
State oil company GEPetrol has signed three production-sharing contracts with Gazprom Neft and Vanco Corisco Deep. GEPetrol signed with Vanco for the 5,460km2 Block K offshore Corisco Bay. Issue 190, 9 July 2010.more
Canadian newcomer signs exploration deal
Vancouver-based Sillenger Exploration Corporation says it has been contracted by the government to carry out an airborne geophysical survey. Issue 188, 11 June 2010.more
GHANA
New field for Tullow partnership
Tullow Oil and its partners have discovered a new light oil field with the Owo exploration well on the Deepwater Tano Block. Issue 192, 6 August 2010.more
Ghana deal in balance as government stays firm on Kosmos sale
Ghana says it has secured sufficient funds to buy Kosmos Energy’s stake in the Jubilee field for itself, which would enable it to sell the stake on to the bidder of its choice, write Thalia Griffiths and Kevin Godier Issue 191, 23 July 2010.more
Petrel bargains hard in Ghana as antidote to Iraq frustrations
Independent oil explorer Petrel Resources is diversifying out of Iraq and into Ghana, where it expects ratification of an exploration block in the Tano Basin within months, writes John Hamilton Issue 190, 9 July 2010.more
Ghana’s politicians can’t see beyond Kosmos, but oil start beckons
A solution to the controversy over the sale of Texas-based Kosmos Energy’s stake in the Jubilee field is said to be in sight, having obsessed the Ghanaian political classes for months already. President John Evans Atta Mills’ National Democratic Congress (NDC) government is well aware of the negative publicity generated in the United States by its move to stop ExxonMobil buying into the field. Issue 189, 25 June 2010.more
Appraisal success in south-east Jubilee
Tullow Oil and its partners have completed the appraisal of the area south-east of the Jubilee field, with the successful Mahogany-5 well. The well penetrated a total net oil pay of 23 metres in sandstone reservoirs over a gross interval of 51 metres. Issue 188, 11 June 2010.more
Libya’s NOC confirms capacity ramp-up has been restrained by Opec-inspired budget cuts
Opec production restrictions will continue to curb international companies’ ability to produce oil in Libya, further slowing the advance of development projects, writes John Hamilton Issue 189, 25 June 2010.more
NOC’s Gazprom talks continue
As it awaits final approval of its deal to buy into Eni’s Elephant field, Gazprom has continued its long-running negotiations with NOC over further co-operation (AE 184/20). Issue 189, 25 June 2010.more
NOC announces six discoveries
National Oil Corporation has announced six oil discoveries in the past month (AE 186/17). Issue 187, 28 May 2010. more
Mauritania players to dig deeper in new oil search
Drilling planned for this year could revive Mauritania’s fortunes by testing deeper targets, writes Thalia Griffiths. Issue 188, 11 June 2010.more
TANZANIA
Tanzania emerges as a diversified gas play
With Songas planning a major expansion of its domestic gas-to-power operation, BG assessing the potential of its Ophir farm-in and several other deals in the works, Tanzania’s gas industry is becoming an emerging force in East Africa. Critical questions now revolve around the extent of upstream reserves and the ability of regulatory structures and other local issues to support a bigger industry, writes Jon Marks Issue 190 - 9 July 2010. more
UGANDA
Tullow completes purchase, drills appraisal
Tullow Oil has completed the $1.35bn purchase of a 50% interest in blocks 1 and 3A from Heritage Oil & Gas, though the issue of Heritage’s tax bill has not been settled. Issue 192, 6 August 2010.more
Government approves Heritage sale to Tullow
The government has given conditional approval for the sale of Heritage Oil Corporation’s assets to Tullow Oil, paving the way for development of the Albertine Graben’s oil resources, while Tullow Uganda has also received approval for its subsequent farm-down of 33% stakes to CNOOC and Total. Issue 190, 9 July 2010.more
Tullow forges ahead in Uganda, continues Transform Margin work
Tullow Oil has been appraising the Kasamene field on Uganda’s Block 2 ahead of first oil planned in Q4 2011. Tullow exploration manager Robin Sutherland told Global Pacific & Partners’ African Petroleum Forum in London on 13 April that, despite the logistical problems, Tullow was keen to bring a rig in to drill in Lake Albert, and would bring in the parts to build an offshore jack-up once all the necessary agreements were in place. Issue 185, 30 April 2010. more
As big guns pile into East Africa’s offshore, Aminex hopes for its own gas hub
Plans for a big East African regional pipeline may take some time to get off the ground, but Tanzania pioneer Aminex is hopeful it can develop significant reserves of gas with a relatively simple infrastructure Issue 191, 23 July 2010.more
New partners and practices as pace picks up in East Africa exploration
As the rate of new discoveries in West Africa slows, the pace is picking up in East Africa, where hopes are high that Uganda’s remarkable success can be replicated elsewhere. Issue 187, 28 May 2010.more
REGIONAL - WEST
West coast upstream update: Côte d’Ivoire, Liberia and Sierra Leone – new activity on Transform Margin
Discoveries in Ghana and Sierra Leone have sparked interest in the Africa Transform Margin play’s potential all along the Gulf of Guinea coast. The pace of exploration is picking up and the authorities are getting tough on dormant acreage Issue 181, 26 February 2010.more
Good geology masks grim politics as West Africa looks to new oil play
The excitement over West Africa’s Transform Margin reflects the play’s potential to deliver oil finds in countries that have hitherto been of marginal interest at best (AE 174/1). But the region’s continuing political instability, underlined by the attempted assassination of Guinea’s erratic military leader, Captain Moussa Dadis Camara, suggests the story may not have a happy ending. Even Ghana, a watchword for stability in an often volatile region, is increasingly polarised as politicians manoeuvre for their share of oil wealth, and ask uncomfortable questions about Jubilee field partner Kosmos Energy’s relationships with local power brokers. Issue 176, 11 December 2009.more
AccuGas transaction kicks off Nigerian gas financing, bankers see more such deals to come
A big new loan for a Nigerian gas project underlines growing interest from private investors in the country’s potential, writes Kevin Godier Issue 191, 23 July 2010.more
Financiers report ‘flight to quality’ as Nigeria’s top banks emerge from crisis
Having undertaken Africa’s biggest-ever banking sector bailout last year, Nigeria is clawing its way back to a more respectable profile in trade and project finance circles, according to market players who talked to Kevin Godier Issue 186, 14 May 2010.more
EGYPT
AfDB provides B-loan as ERC financing nears close
The African Development Bank is extending its first B-loan facility as part of the $2.35bn project financing package for Egyptian Refining Company (ERC), which remains on schedule for mid-year closure (AE 185/21). Issue 188, 11 June 2010.more
Major deals tap $4bn for Egypt’s hydrocarbons sector
The Egyptian Refining Company and General Petroleum Corporation projects indicate a revival in global financing markets which will help downstream expansion, writes Kevin Godier Issue 185, 30 April 2010.more
REGIONAL
AFC eyes wider energy sector portfolio
The project pipeline at regional investment bank Africa Finance Corporation is growing steadily, especially in its home Nigerian market Issue 186, 14 May 2010.more
Constraints on international borrowing make bankers think harder about local currency options
Recourse to domestic financing alleviates pressure on project developers and their bankers, reducing the need for expensive hedge and guarantee facilities, and providing new capital flows. The potentials for using local currency are evolving as the global financial crisis forces a rethink of strategies for launching power and other projects, bankers told Kevin Godier Issue 183, 26 March 2010.more
Bankers predict upturn in oil lending
Oil sector financiers are anticipating another busy year, led by the need for new money in the hydrocarbons sectors in East and West Africa, writes Kevin Godier
For bankers, 2010 kicked off in some style, with Tullow Oil mobilising a syndicated loan from its key relationship banks to cover its $1.5bn pre-emption purchase of Heritage Oil Corporation’s Uganda stake, and then placing new shares to raise £925m ($1.4bn) that will ensure it can maintain a $500m/yr exploration programme and accelerate development of existing resources in Ghana and Uganda. Issue 181, 26 February 2010.more
As BP ponders Algerian assets, IOCs look for flexibility from the energy sector’s new top team
While Algiers tries to gain better control over Sonatrach’s operations, IOCs remain concerned that the authorities are prone to inflexibility and obsessed with outmoded concepts of national interest. It is in this complex operating environment that speculation is mounting that BP might sell its Algerian assets, write Jon Marks and John Hamilton Issue 192, 6 August 2010.more
After Khelil, Algeria has new minister and Sonatrach top team, but critical questions remain
Chakib Khelil has finally been removed to be replaced by an industry veteran whose economic outlook and political affiliations are subject to widely differing interpretations. The removal of Algeria’s longest-serving energy minister and President Bouteflika’s new appointments are unlikely to herald a return to the more liberal mood of mid-decade, write Jon Marks and John Hamilton Issue 188, 11 June 2010.more
Sonatrach gets new head, but IOC concerns remain
A conservative choice to lead the national oil company may send a defiant message to minister Khelil’s critics
Under-pressure energy and mines minister Chakib Khelil has appointed Nourredine Cherouati to head Sonatrach. The new president director-general replaces interim PDG Abdelhafid Feghouli, who was appointed in February. Khelil also confirmed the appointment of four vice presidents, who had been named as interims as a result of the Sonatrach corruption investigation (AE 185/3, 183/1, 180/3). Issue 186, 14 May 2010.more
Angola confronts arrears build-up in another bid to attract investment
Angola has taken measures to overcome payment arrears that have slowed down its ambitious reconstruction programme and put heavy burdens on several big contractors. More transparent, investor-friendly procedures are promised to attract investors to key sectors like electricity, but high transaction costs and burdensome bureaucracy remain a challenge, writes Jon Marks, recently in Luanda Issue 186, 14 May 2010.more
Reform entrenches Angolanisation, tightens president’s grip on power
The Angolan regime is celebrating a period of political change with constitutional amendments and personnel changes that are intended to allow the economy to grow while maintaining power in the hands of the small elite gathered around President José Eduardo dos Santos. The National Assembly has ratified a new constitution which is likely to see dos Santos remain in power for the next decade. Replacing the 1975 interim constitution, it stipulates that presidents will now be selected by parliament’s ruling party and limited to two five-year terms. The new limit will start from parliamentary elections due in 2012, which means dos Santos (born in August 1942) could remain in power until 2022. Issue 182, 12 March 2010.more
More controversy over DR Congo’s Lake Albert exploration partners
The mysterious companies allocated blocks on the Congolese side of Lake Albert may have links to South African business magnate Tokyo Sexwale as well as to President Jacob Zuma, adding to questions surrounding the deal Issue 192, 6 August 2010.more
Opaque deals and administrative bullying mark DRC’s flirtation with investment pariah status
A pattern is emerging in the way big resources contracts are being reallocated to unknown companies that the authorities say meet their criteria for fit and proper partners, and whose participation will help speed ‘post-conflict’ economic reconstruction. Politics and personal gain seem to be defining features of these deals, writes Jon Marks Issue 191, 23 July 2010.more
Tullow threatens to sue as Zuma’s boys move in
While President Joseph Kabila Kabange has secured his political life insurance by giving stakes in eastern Congo’s sought-after Albertine Graben blocks to companies connected to South African President Jacob Zuma’s family, it is not such good news for Tullow Oil, which signed a contract for the same Lake Albert blocks 1 and 2 in 2006. Issue 190, 9 July 2010.more
In the eye of the storm triggered by the Deepwater Horizon disaster, BP is looking to divest more assets, and remains under pressure from Congress and a range of lobby groups over its plans to start drilling in the Libyan offshore (AE 191/12). Issue 192, 6 August 2010.more
Libya charts new course for NOC to weather the coming storm
New management, new strategy and possible new institutions are shaking up Libya’s energy sector, but first it must get over the recent lack of commercial discoveries and a number of thorny political issues Issue 191, 23 July 2010.more
Revised oil law enters legislative process
The much discussed rewriting of Libya’s ancient petroleum law has moved from the realm of discussion and speculation to reality with an official announcement of the procedure through which the legislation must now pass to enter statute. In early July, a special session of the General People’s Committee (GPC) discussed a proposed draft that could replace the current law, which was first written in 1955. Issue 191, 23 July 2010.more
New management at NOC
National Oil Corporation has a new management committee. The General People’s Committee (GPC – government) decided on 13 July to restructure the national company’s executive board, replacing three of its members with four newcomers, all but one of whom has virtually no public profile. Issue 191, 23 July 2010.more
Namibia draws firms into E&P, but questions remain over licensing and middlemen
After Namibia decided to abandon licensing rounds for direct negotiation, blocks were awarded to local players who sold them on to foreign companies. Local entrepreneurs such as Knowledge Katti have built up big businesses, but with the government threatening to investigate potential abuses of the system, the way licences are obtained is under new scrutiny. John Grobler in Windhoek and Eleanor Gillespie investigate Namibia’s licensing procedures and assess prospects for E&P in the next year Issue 192, 6 August 2010.more
Namibia exploration is back in contention
AIM darling Chariot Oil & Gas’ strong stock market performance and commitment to serious exploration in Namibia has refocused attention on a region that has lacked the big finds of West or East Africa. Issue 192, 6 August 2010.more
NIGERIA
Nigerians talk up sector reform with PIB expected ‘within weeks’
The controversial Petroleum Industry Bill (PIB), designed by the previous government to implement the largest energy sector shake-up in recent Nigerian history, will be passed into law by the end of August, according to petroleum minister Diezani Allison-Madueke. Issue 192, 6 August 2010.more
Government looking to pick ‘low-hanging fruit’ to raise power output and ensure Jonathan’s future
Accelerating Nigeria’s energy partnership with Germany might allow the Jonathan government to raise electricity output and revive industry. A big boost for the power sector would promote the new president’s claim to be a serious candidate for the 2011 elections, write Jon Marks and David Slater Issue 188, 11 June 2010.more
NNPC reform as elusive as ever as Jonathan lines up a 2011 presidential bid
Goodluck Jonathan and his allies have proved ruthless in their efforts to reshape the Nigerian energy industry, with the president firing the second NNPC head of his short tenure, while his crackdown on corruption is removing some powerful PDP figures opposing his bid for a second term Issue 187, 28 May 2010.more
The US Senate has passed a new bill on resource transparency that will require oil, gas and mining companies registered with the Securities and Exchange Commission (SEC) to publicly disclose their tax and revenue payments to governments around the world. Issue 191, 23 July 2010.more
Legal review aims at African model contract
A review of oil and gas contracts and legislation planned by the African Petroleum Producers Association (APPA) aims to simplify the negotiating process by drawing up a model contract based on international standards and best practice in Africa and worldwide (AE 184/26). Issue 186, 14 May 2010.more
Governance in the frame with EITI, new British bribery law
Efforts to improve the energy industry’s transparency are once again in the spotlight as the United Kingdom introduces an anti-bribery law and the Extractive Industries Transparency Initiative (EITI) struggles to keep its candidate countries in line. The EITI board’s decision to grant extensions to 16 of the 17 countries that had failed to complete validation by the 9 March deadline underlined the problems facing the initiative in trying to be flexible enough to keep everyone on board and tough enough to be credible (AE 182/3). Issue 185, 30 April 2010.more
Twenty countries fail to meet EITI validation deadline
Faced with the embarrassing fact that just two countries met the 9 March validation deadline, the Extractive Industries Transparency Initiative has delayed a decision on what it should do with the other candidates until next month’s board meeting in Berlin. Issue 182, 12 March 2010.more
HEPs, grid integration at the centre of Angola’s reconstruction plans
An impressive number of power schemes are planned to exploit the country’s huge hydroelectric capacity, but they need an integrated national grid to run through, writes Jon Marks, recently in Luanda Issue 187, 28 May 2010.more
Luanda commits to IPPs
Regular brownouts in Luanda and a more precarious position still in many provinces are driving the authorities towards an ambitious generation development programme (AE 181/9). This will include a greater effort to attract private investment to the sector, with officials in Luanda saying the eagerly anticipated revision of the 1996 General Law of Electricity is now going through the works to formalise the private sector’s involvement – although an exact timetable seems to remain elusive. According to senior Ministry of Energy official Kiala Pierre, this will open the way for the introduction of a new tariff regime that would benefit independent power producers and other operators. Issue 186, 14 May 2010.more
With progress on the rehabilitation of Inga’s existing hydropower units, Snel is looking to significantly raise its generation and transmission capacity, François Misser reports from Inga and Kinshasa Issue 186, 14 May 2010. more
Financing structure for Ruzizi III comes into view
The politically complex redevelopment of the Ruzizi River cascade’s power schemes seems finally to be taking shape, writes David Slater Issue 190, 9 July 2010.more
Mozambique power sector remains attractive to investors, but financings still some way off
Confirmed offtake with South African buyers and improved transmission infrastructure remain key requirements for financiers if they are to back the next set of big projects proposed by the Maputo government, writes Kevin Godier Issue 184, 16 April 2010.more
NIGERIA
Nigeria gets new supply ‘template’ as government sees way towards fuelling gas-to-power boom
Two new committees to spearhead and monitor reform and efforts to unify contracts reveal the president’s focus on achieving stable power supply Issue 189, 25 June 2010.more
Government looking to pick ‘low-hanging fruit’ to raise power output and ensure Jonathan’s future
Accelerating Nigeria’s energy partnership with Germany might allow the Jonathan government to raise electricity output and revive industry. A big boost for the power sector would promote the new president’s claim to be a serious candidate for the 2011 elections, write Jon Marks and David Slater Issue 188, 11 June 2010.more
REGIONAL
Cost-reflective tariffs: obvious incentive and thorny political problem
This is the season for developers, bankers, government and national company officials and other members of the power development community to reflect on another year of under-achievement when it comes to attracting private investment to the continent’s electricity supply industry. When practitioners took stock at the annual Africa Energy Forum (AEF) in Basel, they identified failures in the project finance model as one reason why so few projects reach start-up, (AE 191/24). Another critical issue revolves around African utilities’ struggle to introduce cost-reflective tariffs. In many cases utilities are crippled by their inability to work within payment regimes that come anywhere close to producing recognisable internal rates of return (IRRs). Issue 192, 6 August 2010.more
Failures suggest sub-Saharan ESI must look beyond project finance
There have been some positive signs for the sub-Saharan electricity supply industry. A few new developers have arrived on the scene, and some familiar faces, such as AES Corporation, are looking again for big deals, suggesting that more investment could be attracted to the sector. Issue 191, 23 July 2010. more
Lacking trust, Malawi pulls out of Moz link
A lack of trust between neighbours seems to have put in jeopardy what looked like a desirable cross-border transmission scheme in southern Africa, linking Malawi – which, with Tanzania, is the only Southern Africa Power Pool member not connected to its neighbours – to Mozambique. Issue 190, 9 July 2010.more
TUNISIA
Bid speculation mounts over Tunis IPP openings
Tunisia is reassuring investors that all is well with its IPP programme despite recent delays, but each of the projects has its own complications, writes Jon Marks in Tunis Issue 188, 11 June 2010.more
Tunis plays down delays to IPPs and other projects
Tunisia will deliver two of three power generation projects on schedule despite repeated delays to the bidding process, while a third, which will export electricity to Italy, has been held up by at least a year. Richard Nield reports on the projects roster and reasons for delays over the past year Issue 187, 28 May 2010.more
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