Search results

Sonatrach director-general Abdelmoumen Ould Kaddour regularly tours the hydrocarbons giant’s sprawling empire, rallying workers and telling journalists about Algeria’s return to producing oil and gas on a global scale, after years of corruption scandals and management inertia. On his 8 February visit to Hassi R’Mel, he announced that Sonatrach would invest $56bn in 2018-22. In an interview, he referred to discussions with Total on an unspecified $5bn project. After a long period of tensions with the French major, this is likely to be a major new petrochemicals project, giving further substance to claims Algeria is back as a force in the industry.

Production cuts by a majority of Organisation of the Petroleum Exporting Countries (Opec) producers, working in coordination with non-Opec exporters led by Russia, have helped to raise oil prices from their 2014-16 lows; the strategy seems likely to maintain crude benchmarks at around $50 for some time. While second-guessing the oil price is a hazardous business, African Energy’s soundings of major international oil companies (IOCs) suggest this represents a ‘new normal’ for the industry, as factored into corporations’ base case scenario-planning.

Is anyone listening to National Oil Corporation (NOC) chairman Mustafa Sanalla? He has issued repeated appeals to the international community to change its approach to the crisis in Libya to help his institution to better carry out its functions and to protect the interests of the Libyan people.At Chatham House in January, he described NOC as “the best guarantee that Libya will remain as a unitary state” and called for the international community to support its independence.

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.

Spectrum has begun the first of three multi-client 3D seismic acquisition programmes offshore Gabon in preparation for future licensing rounds. On 31 December, Spectrum started acquisition of the 10,000km2 Gryphon 3D survey in southern Gabon. Spectrum said the survey had attracted strong industry funding and was expected to be completed in early Q3 2017. A further 5,000km2 3D survey over open acreage in northern Gabon, and an additional 3,000km2 3D survey offshore central Gabon will start in Q1 and Q2 respectively. Gravity and magnetic data will also be acquired.

Headlines in mid-October suggested renewed vibrancy in the Nigerian hydrocarbons industry under President Muhammadu Buhari, talking of mega-deals involving ExxonMobil and Indian investment, and plans for exploration in the north-east (see Upstream) and to raise domestic refining capacity to 650,000 b/d (from 445,000 b/d). But the divestment to the local Nipco Investments of ExxonMobil’s 60% stake in Mobil Oil Nigeria leaves Total as the sole major still operating in the downstream; the Indian deal, if it can be delivered, seems a desperate effort to raise cash. International oil companies (IOCs) continue to downsize, amid a damaging escalation of Niger Delta violence.

With sky-high prices apparently a thing of the past, the outlook is gloomy for liquefied natural gas (LNG) exporters, even in the most lucrative markets, such as Japan. With a predicted supply glut running into the next decade and price pressures accentuated by the fast-emerging spot market (for more on this see African Energy’s sister publication Gulf States News http://www.gsn-online.com/amid-shifting-global-gas-supply-gulf-states-emerge-as-their-own-best-market) only a few major projects are still expected to go ahead worldwide. In Africa, these include Eni’s Zohr field in Egypt and developments in Mozambique’s Rovuma Basin (as well as its smaller, more southerly fields supplying South Africa).

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).

A commercial agreement on the joint exploitation of hydrocarbons between Angolan national oil company Sonangol and its Congolese equivalent, Cohydro, has sparked controversy in Kinshasa. Key provisions within the agreement remain unclear, and there are fears the deal will reduce Democratic Republic of Congo’s access to potential offshore reserves. The Angolan and Congolese authorities first agreed to look for ways to jointly explore for oil and gas in the Zone d’Intérêt Commun, a 10km offshore corridor covering Angolan blocks 1, 14, 15 and 31, in 2007. But given DRC’s limited access to the sea, and Angola’s determination to maximise its own access to potential oil fields, the stakes have been high and progress has been commensurately slow.

Judging by the headlines, 2014 has been a significant year for improving electricity supply in sub-Saharan Africa (SSA), where only 290m of the 915m population has access and the total number without grid connections is still rising, according to the International Energy Agency. Several independent power projects (IPPs) have reached financial close, including Ghana’s long-awaited Cenpower deal; others are almost there – most notably Nigeria’s template-setting Azura-Edo IPP, whose impending completion was a focus for participants at the 24-25 November Africa Investment Exchange: Energy (AIX) meeting in London. Multilaterals and governments report progress in efforts to develop ‘transformational’ schemes including Grand Inga and strategic transmission projects.

Veteran Resistência Nacional Moçambicana (Renamo) leader Afonso Dhlakama’s surprise return to the bush in October 2012 was an unsettling reminder of the fragility of post-conflict Mozambique, as guerrilla roadblocks returned and coal exports were halted in the central region. Renamo’s rebellion was triggered by demands for a greater share of state jobs and resources. A peace agreement signed on 24 August 2014 promised jobs, above all in the army and police, and set a platform for campaigning to start for general elections on 15 October.

Plans by Kosmos Energy and partner Cairn Energy to drill a well next year in a Moroccan-licensed block in the Western Sahara continue to provoke intense interest among oil companies excited by the disputed territory’s offshore potential, as well as political debate among the traditional protagonists. The territory is Moroccan-controlled, but officially under United Nations mandate, and debate centres on a legal opinion issued by UN general counsel Hans Corell in 2002, which stated that exploration and extraction of mineral resources in Western Sahara would be illegal “only if conducted in disregard of the needs and interests of the people of that territory”. This has allowed Morocco’s Office Cherifien des Phosphates to maintain output from its Phosboucraa subsidiary, which is a major employer in the region. However, the Corell judgment – which one official told African Energy, “we’ve all been re-reading recently” – has been generally interpreted as excluding new E&P work.

The conflict over the former Spanish Sahara is all too often forgotten. But there is a growing feeling in policy circles – shared by companies eager to exploit the territory’s hydrocarbons and mineral potential – that the Western Sahara standoff is overdue a promotion up the international policy agenda. Crisis in the Sahel, where French and African Union forces have confronted jihadist radicals in Mali, has added to pressures to revisit the intractable conflict, more than 40 years since the Polisario Front liberation movement was formed, 38 years since Morocco’s late King Hassan II organised his ‘Green March’ into the territory, and 22 years since a United Nations-sponsored ceasefire was declared.

Egypt could have a future as a Mediterranean gas exporter. Rising debts owed by Egyptian General Petroleum Corporation (EGPC) and other post-revolution problems weigh on international oil companies, but IOCs and industry analysts are optimistic about the prospects for further hydrocarbons discoveries in the Nile Delta, Western Desert and other regions, reflected in the latest EGPC licensing round bidding.

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.