Search results

The governments of Tanzania and Uganda, the Tanzania Petroleum Development Corporation (TPDC) and Total E&P Uganda signed a memorandum of understanding (MoU) on 12 October creating a working framework for the potential development of a crude export pipeline from Hoima to Tanga port.

An Italian court will try six defendants in December on charges related to Saipem’s payment of €198m in bribes to secure approximately €8bn worth of contacts in Algeria. The most significant among the accused is the alleged go-between in the affair, Farid Bedjaoui, for whom Interpol has issued a red notice saying that he is wanted for “criminal associations leading to corruption”. He will be tried in absentia with two other Algerians. Three Italian senior Saipem executives will be in the dock, but the company’s country manager at the time will not, as he has struck a deal with prosecutors.

Japan’s Hitachi Ltd on 28 September agreed to pay $19m to settle charges by the US Securities and Exchange Commission (SEC) that it violated the Foreign Corrupt Practices Act (FCPA) by inaccurately recording improper payments to South Africa’s ruling African National Congress (ANC) in relation to the award of the combined $5.6bn boiler contracts for the 4,764MW Medupi and 4,800MW Kusile coal power plants.The revelations included in the SEC complaint have led to calls for legal action to be taken against South African group of companies Chancellor House and the ANC, as well as increased scrutiny of the controversial nuclear tender and Chancellor House’s involvement in the upcoming coal baseload independent power producer (IPP) procurement programme.

Kinross Gold Corporation has said it is under investigation by the US Securities and Exchange Commission (SEC) and Department of Justice (DoJ) over its West Africa mining operations. The company said it had received SEC and DoJ subpoenas related to possible internal control deficiencies and improper payments to government officials.Toronto-based Kinross, which has mining operations in Mauritania and Ghana, said it first learned of the allegations in 2013 and launched an internal investigation. It subsequently received subpoenas from the SEC in March and December 2014, and July 2015, and from the DoJ in December 2014.

The Brazzaville government is flagging the launch of a major licensing round in Cape Town next month, despite the lower oil price, but parliament still needs to approve a new hydrocarbons code. The new code, which updates the existing 1994 law, was approved by the cabinet in March. Based on a model production-sharing contract, it stipulates that state oil company Société Nationale des Pétroles du Congo (SNPC) is the holder of the mining title in each case, with the right to bring in local and international partners.

Norway’s Spectrum ASA has announced an agreement to acquire 28,000km of long offset 2D seismic data offshore southern Somalia. Spectrum’s survey will cover areas licensed to Pecten, a joint venture of Shell and ExxonMobil, which have been under force majeure since 1992. It will also manage and market 20,000km of 2D data gathered and processed by Soma Oil & Gas in 2014, which it says the survey is designed to complement. Soma – a UK company chaired by former Conservative party leader Lord (Michael) Howard – is giving the results of its survey to the federal government in return for the right to pre-emptively choose 12 blocks.

The Egyptian government implemented encouraging energy sector reforms over the summer months including a further round of tariff increases and an electricity law setting out the first steps in the unbundling of the sector. Egypt’s reliance on gas-fired power generation as a short-term way of closing the gap between supply and demand looked foolhardy and expensive in June when this policy seemed destined to commit the country to much higher levels of imports.

A major gas find by Italian major Eni in the Egyptian deep offshore could have profound consequences for a number of industries. Rising demand for gas-fired electricity in the last decade has all but submerged Egypt’s gas export ambitions, with imports of liquefied natural gas (LNG) from Qatar, Russia and other suppliers expected to meet shortfalls in domestic fuel supply for years to come. According to a range of industry sources who spoke to African Energy, so substantial is the Zohr field – initially estimated at 30tcf – that not only could imports become unnecessary, but export LNG projects could eventually come back on the agenda.

South Sudan’s oil income has been slashed by lower output, falling global prices, and an increasing production share taken by the government’s upstream joint venture partners. The treasury has fallen behind with payments due to Sudan for the use of its export infrastructure and is paying its debt by diverting greater quantities of oil to its neighbour. In 20 months the conflict has claimed tens of thousands of lives, displaced 4.6m people, and reduced oil production by up to a third and the burden of the war effort is exerting further pressure on the treasury, which is consistently overspending its military budget.

For the first time in many years, the hard pressed Algerian government is considering an increase in electric power tariffs – a policy certain to meet intense opposition at a politically sensitive time. At the same time, the national gas and power utility Sonelgaz intends to raise investment finance through a domestic bond and is also contemplating an internal restructuring programme. Speaking at Sonelgaz’s general meeting in Algiers on 28 September, the company’s long-standing president director-general Noureddine Bouterfa told the assembled directors, managers and employee representatives that they needed to work with the state to implement gradual prices rises that “will not bring social cohesion into question”.

South African Development Community (SADC) energy ministers met in Johannesburg on 24 July to express concern at the region’s estimated 8,247MW generation shortfall, while noting that 1,999MW had been brought on line in 2014 from new plants or rehabilitation.Of the 2014 additions, 150MW was commissioned in Angola, 150MW in Mozambique, 1,654MW in South Africa and 245MW in Zambia. Some 83% of new capacity was from renewable sources, predominantly in South Africa.

With revenue heavily dependent on oil receipts, the collapse in crude prices has left public sector finances in dire straits, reigniting talk of removing fuel subsidies. However, after weeks of silence, the government has deferred a decision, saying it will handle the issue with care. Buhari was quoted by spokesman Garba Shehu as saying: “When you touch the price of petroleum products, that has the effect of triggering price rises on transportation, food and rent.”

The UK’s Serious Fraud Office said on 31 July that it had opened an investigation into Soma Oil & Gas in relation to allegations of corruption in Somalia. The investigation follows a report by the United Nations Somalia and Eritrea Monitoring Group to the Security Council which said that Soma had been making regular payments to the Ministry of Petroleum and Mineral Resources since mid-2014, some to senior civil servants who were instrumental in securing the company’s initial contract and negotiating subsequent agreements. Soma said it was confident that there was no basis to the allegations and it was co-operating fully with the SFO.

President Muhammadu Buhari has been preoccupied with fighting Boko Haram. In line with his inaugural pledge to reform the armed forces, the chiefs of the army, air force and navy were sacked on 13 July. A seven-month offensive by the militaries of Nigeria, Niger, Cameroon and Chad has notched up a number of successes against the Islamist insurgent group, marked by the retaking of significant amounts of territory and increasing speculation surrounding the fate of Boko Haram leader Abubakar Shekau, who has not been heard from since March.

Electricity generation across Nigeria reached 4GW in July, the Presidential Task Force on Power has announced. This is a step forward for Nigeria’s chronically underperforming industry, but shows that output remains way off peak demand of 14GW. Similarly, the transmission network’s capacity reached a new peak of 4.6GW as of 30 July, but this was not enough to fight off fierce criticism of Transmission Company of Nigeria (TCN).TCN is run under management contract by Canada’s Manitoba Hydro International (MHI).