Search results

There is a curious disconnection between Egypt’s dire political and financial straits and the relatively upbeat assessments from the international oil companies (IOCs) developing assets there. In spite of the continued closure of Eni and Union Fenosa’s Damietta LNG export terminal and the substantial debt owed by Egyptian General Petroleum Corporation (EGPC) to domestic gas producers, long-term prospects still appear to justify investments.

Despite governance shortfalls and a number of crises, President Filipe Nyusi’s government has reassured investors with its support for transformational LNG schemes, leading towards final investment decisions and financial close in the months to come. This is a major success for an African gas industry where smaller projects seem to be making more impact than the majority of big-ticket schemes. Mozambique’s progress reassured CbI Meetings’ 2-3 May Africa Investment Exchange: Gas event in London that the African industry can deliver world-scale projects.

Of all the assorted regional infrastructure projects jostling for supremacy in East Africa, the growing credibility of the Lamu Corridor project raises the possibility of a new East African power axis of Kenya and an emergent Ethiopia.

Announcing job losses and investment cutbacks, Big Oil’s flagship companies are emitting signals that should be heeded by those African oil-producing governments that are less inclined to believe the world is changing to their disadvantage. Dramatic announcements of changes of strategic direction by BP, Eni, Royal Dutch Shell and Total suggest most majors see their futures as diversified energy companies, rather than old-style IOCs.

The extent that markets have shifted since Russia’s invasion of Ukraine in February has been underlined by a surge of energy diplomacy in recent weeks. Complex security issues were integral to United States President Joe Biden’s mid-July fist bump with Saudi Crown Prince Mohammed Bin Salman Al-Saud, but an effort to reduce oil prices was the real agenda-setter.

The global LNG market has been undermined just when ExxonMobil was expected to reach a final investment decision on its 15.2m t/yr Rovuma LNG scheme – the biggest of three projects aiming to channel at least $50bn of foreign investment (and possibly much more) into Mozambique over the next decade.The gas boom was expected to drive spectacular levels of economic growth, but while Mozambican economic planners and their allies contemplate the LNG project’s start-up being delayed possibly until 2030, the government is confronted with a burgeoning Islamist insurgency and huge economic pressures.

The number of big multilateral financing facilities being put in place for electricity transmission and distribution (T&D) projects across Africa points to a recognition that, after decades when installing generation capacity was the central preoccupation of governments and donors, the infrastructure for delivering power to the people has often been ignored. Historically, large-scale T&D infrastructure has, of course, been put in place. But the momentum to modernise and expand grids has, in most jurisdictions, lagged in recent decades.

The International Monetary Fund (IMF)’s latest World Economic Outlook (WEO) Update, issued at the end of January, underlines China’s importance both globally and for an African continent where it has made considerable efforts to build political relations and infrastructure, in order to secure resources vital to its domestic growth.

For an industry in which the need for large-scale investments often means developments take years, if not decades, to come to fruition, things can move remarkably quickly in the world of natural gas exports.

African leaders, backed by key donors, earlier this year approved another initiative to increase electricity generation and access across the continent; and multilateral and government officials have since been working to put flesh on the bones of the Programme for Infrastructure Development in Africa (PIDA). Jointly developed by the African Union (AU), New Partnership for Africa’s Development (Nepad) and African Development Bank to map out an energy infrastructure development programme in the period to 2040, PIDA promises much – and its ambitious goals are to be welcomed. “The programme aims for achieving energy accessibility of all the African population of not less than 60% by 2040. This requires annual growth of the energy sector by 6.2% and an annual investment of $40.5bn,” a recent PIDA document says.

President Muhammadu Buhari finally responded to popular concerns over security by replacing his military top team on 26 January. With the economy hobbled by low oil prices and coronavirus, he has allowed a little more economic flexibility, although it remains to be seen whether his costly defence of the naira’s inflated value will be replaced by the foreign exchange market unification favoured by the International Monetary Fund and World Bank.

Less than a year from elections, numerous candidates are eyeing up the prize of taking over from President Muhammadu Buhari. 

The purchase of BG Group by Royal Dutch Shell confirmed predictionsthat the falling oil price would trigger a spate of mergers and acquisitions (M&A) activity in the upstream industry. It points to a need for even the biggest players to build scale in developing their natural gas trade; for Shell, BG’s assets in Australia and the Atlantic Basin (Brazil) will help to secure a dominant position in Asian and other key markets for liquefied natural gas (LNG).

The Ministry of Mineral Resources and Energy has awarded contracts for domestic gas development projects to three of the 14 companies who bid last year in a tender for projects to utilise gas from the Rovuma Basin development.Norway’s Yara International was granted an allocation of 80-90 mcf/d of gas to produce 1.2-1.3m t/yr of fertilisers and 30MW-50MW of power. Royal Dutch Shell subsidiary Shell Moçambique BV was granted 310-330mcf/d of gas to produce 38m b/d of liquid fuels (diesel, naphtha and kerosene) and 50MW-80MW of power.

The timing of the official commissioning of the 650,000 b/d Dangote Petroleum Refinery and Petrochemical Plant on 22 May said as much about local political sensitivities as it did about the facility’s undoubted importance for the Nigerian energy sector.