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Monday, 31 March 2014

Instability in Mozambique...Questions being asked?

Instability in parts of Mozambique is becoming an ever increasing concern to investors in that country's natural resource industry.

Though most of fighting may not be in the proximity of huge reserves of natural resources and other extractive industries it does pose risks.

Most of the risk would be in the disruption its causing or would cause to key supply chain routes, making key projects harder to implement. There is also the underlying risk of the situation exploding into a far much bigger conflict and spreading to a larger area.

The following is a summary of the latest occurrences of instability in that country;

1. Fighters of the main opposition party and former guerrilla movement National Resistance of Mozambique (Resistência Nacional de Moçambique: Renamo) on 16 March ambushed a unit of the national army (Forças Armadas de Defesa de Moçambique: FADM) in the hamlet of Inhamitanga, Inhaminga district, Sofala province. According to national media, more than 15 government soldiers were killed, with the rest retreating 'in disarray'.

2. Significance
While negotiations between the government and Renamo continue in the capital Maputo, the latter is keen to improve its position at the negotiating table by maintaining military pressure on the government.

3. While FADM has heavy artillery, Renamo has better knowledge of the terrain, making hit-and-run attacks with a swift retreat into the bush possible. In response, FADM is likely to mount an offensive against a nearby Renamo base in Dimba, 30 kilometres from Cheringoma. Although Renamo will chiefly target government troops, impending fighting increases the risks of damage, death, and injury to road cargo, mainly on the nearby secondary E213 between Inhamitanga and the Zambezi River, and on the primary north-south highway EN1 between the Inhamitanga turnoff and Caia.

We wait and see how the negotiations go on from here.

Sunday, 30 March 2014

Tullow strikes dry well in Turkana, Kenya

Britain’s Tullow Oil, Thursday said it had failed to find viable crude deposits at its eighth test on Emong-1 well, Turkana County.
The Emong-1 exploration well in Block 13T “encountered poorly developed oil-bearing reservoir sands,” Tullow said in a statement.
The well was drilled about four kilometres (2.5 miles) to the southeast of the Ngamia-1 discovery.
“The early exploration, appraisal and testing activities onshore Kenya are giving us significant technical and operational insight for further optimising and accelerating the development of the basin,” said Tullow in a statement. However, the company vowed to carry on with oil search operations in the area.
The firm expressed optimism of more discoveries in the expansive Turkana basin.
Kenya had no known commercial reserves of petroleum until March 2012 when Tullow Oil discovered crude in Ngamia-1 well at Lokichar in Turkana County.
By last month, Tullow had drilled seven more wells at Etuko-1, Twiga-1, Ekales-1, Paipai-1, Amosing-1, Agete-1 and Awoi-1. Six of the wells had oil.
The firm, together with its partner Africa Oil, has found enough oil in Kenya to make field development commercially viable. The companies expect to start production and possible sales as soon as 2016, marking the first oil exports from East Africa.
Tullow has since doubled its estimate of discoveries in the Lokichar basin to 600 million barrels. Focus is now turning on the development of infrastructure such as an evacuation pipeline and a refinery.
Kenya has recently become a hotbed of exploration, with neighbouring Tanzania and Uganda also striking commercially viable quantities of hydrocarbons.
Smaller players such as Cove, Origin Oil, Pancontinental and Lion Energy, who had dominated Kenya’s prospecting scene for years, have been quietly exiting in recognition of the change in the balance of power in favour of big players like France’s Total and US majors Anadarko and Apache.
Tullow has operations at five on-shore blocks in Kenya including 10A, 10BA, 10BB, 13T, 12A and 12B and off-shore block L8 where American exploration firm Apache Corporation is searching for oil.
Analysts said Tullow’s exploration successes in northern Kenya have raised the country’s profile as a viable frontier market investment destination.

Wednesday, 26 March 2014

Envirofit launches revolutionary institutional cooking stoves.

Half of the world’s population uses biomass in its various forms, be it charcoal or firewood for daily cook. Cook stoves using biomass and to some extent kerosene are major indoor polluters in Africa and around the emerging world, affecting mainly women and children who use them on a daily basis. Pollution is in the form of pungent smells and toxic soot which affects respiratory systems of the people confined in their vicinity. In addition blurred vision is also caused by the emitted smoke and the resulting teary eyes, raising the danger of fire accidents.

Over four million people worldwide die annually from the effects of indoor pollution caused by cook stoves, mainly through lung diseases such as asthma, bronchitis and lung cancer.

Innovative market based solutions such as efficient cook stoves that reduce emissions and use less fuel that in turn produce less smoke are the solution.

In Africa cook stoves are by far the biggest residential energy business because over 60% of the population uses either biomass or kerosene cook stoves. This is mainly as a result of low national electricity household penetration especially in rural areas which averages between 10 -30% in sub-Saharan Africa excluding South Africa. Even when there is electricity or other cleaner ways of cooking such as LPG gas, it tends to be too expensive for the average household to sustainably use it.

In addition institutions such as schools, colleges or universities use large scale cooking stoves to cook food for their members and staff, further, raising the importance of biomass cook stoves.

Envirofit ( an American firm specializing in developing scalable and sustainable market based clean cook stoves produces well engineered products that use 60% less biomass fuel and produce 90% less emissions. With most products having 10 year performance warranties and are geared towards the emerging markets.

Envirofit was formed in 2003 as a spinoff company out of Colorado State University’s Engines and Energy Conversion Laboratory to develop well-engineered technology solutions to solve global energy and health challenges. Envirofit began by producing and selling direct injection retrofit kits for two-stroke motorcycle engines in the Philippines - a project that won the Rolex Award for Enterprise in 2008.

In 2007, Envirofit turned its attention to clean cookstoves, partnering with Shell Foundation’s Breathing Space Program to prove the market for the development of a scalable clean cookstove solution. Developing their first commercial clean cookstove model, Envirofit began its pilot program in India in 2008. After an exponential increase in sales in the first two years Envirofit began to scale the model in 2010. To meet the demands of consumers in different markets, Envirofit combined the global knowledge of cooking cultures from field-based research with innovative clean cooking technologies to design new products using advanced computational tools, rigorous performance testing. In 2009 Envirofit won Time Magazine’s Heroes of the Environment Award followed by the Economist’s Energy and the Environment Innovators of the Year in 2013.

On 21st March 2014, in Nairobi, Kenya, Envirofit launched the EFI- 100L Institutional cooking stove catering for orphanages, schools, and community centres.

Features of this stove include:

  1. Pot Volume: 100 Litres
  2. Time to Boil: Under 80 minutes
  3. Thermal Efficiency: 50%
  4. Firepower: 30kW
  5. Lifespan: 5 year minimum
  6. Easy to maintain with cleanable chimney
  7. Portable, stable and safe

This stove combines all of Envirofit’s industry-leading household cookstove technologies into a highly-efficient institutional-sized cookstove. This model includes a 100Litre pot, however, this design can be scaled to incorporate larger pot sizes to customize to local specifications. The Institutional cookstove is designed to meet all proposed ‘tier 4’ indoor emissions, efficiency, and safety ISO-IWA standards for cookstoves delivering unmatched efficiency and emissions reductions.

For interest in these product and other products contact:
Institutional Sales Professionals
Envirofit International
+254 705 186471
+254 720 929361

Or contact the blogger for further information.

Largest Wind Farm in Africa finally set for construction in June 2014 - Kenya

Construction of the delayed Lake Turkana Wind Power Project will begin in June 2014 after Monday’s signing of a financial package worth Sh76 billion(US$883m) provided by a number of multi-lateral lenders.
The wind farm, which is to be the largest on the continent, will have a capacity of 300MW and is expected to help plug a power supply shortfall and offer cheaper electricity.
The wind farm had been due to start generating power in June 2011 but the project has faced financing difficulties after the World Bank pulled out of the project.
On Monday 24th March, 11 financiers including the Africa Development Bank (AfDB), Standard Bank, PTA Bank, European Investment Bank and East Africa Development Bank signed the financing pact for the Sh76 billion(US$883m) plant that will see its shareholders inject Sh15 billion(US$174m)
“The project is expected to be fully operational in a period of 32 months from the time we are issued with a notice to proceed. That should be in June this year,” LTWP chairman Carlo Van Wageningen said while closing the financing deal in Nairobi.
“We will generate the first 100MW in the next 27 months, then about another five months or so to get the full 300MW.”
Kenya Power, the country’s sole power distributor, will pay a tariff of 7.52 euro cents (Sh9) per kilowatt hour, which is lower than the Sh16 consumers are paying on increased use of the fuel driven generators to feed the national grid.
The 300MW wind plant, which will sit on 4, 000 acres, will produce about a fifth of Kenya’s current installed power capacity of 1,664MW.
Mr Wageningen said the project would save Kenya US$150 million (Sh12.9 billion) per year in foreign currency and fuel adjust costs that reflect on electricity bills mainly due to increased use of thermal power.
Kenya is also set to earn Sh481million (€4 million) annually from trading in carbon credits that will come from the environment-friendly project that will lower carbon emissions in the race to tackle global warming.
The  Africa Development Bank (AfDB) was the lead arranger for the financing package that saw the European Investment Bank commit Sh23 billion or slightly over a third of the loan value. The Africa Development Bank also provided guarantees to the financiers after the World Bank exit.
The Bretton Woods institutions expressed concerns over construction of the 428-kilometre transmission lines and the power purchase agreement with Kenya Power that it feared would be unfair to consumers as they would have been forced to pay for the excess power.
Energy Principal secretary Joseph Njoroge directed Kenya Electricity Company (Ketraco) to beat the 2016 deadline in laying the 428 kilometre transmission line that will connect the wind farm to the main sub-station in Narok and eventually to the national grid.
Kenya plans to quadruple its power output in the next five years with the aim of unleashing faster economic growth, eyeing an additional 5,000MW of power supply.
It plans liquefied natural gas (LNG), new wind plants and coal-fired power stations, while also tapping vast steam reserves to boost geothermal production to wean the country off unreliable rain-fed hydro-electric dams and expensive diesel generators.
Power costs for industry, which the private sector says leaves it struggling against global rivals, would fall by nearly half by 2017, according to government projections.
By Neville Otuki

Friday, 14 March 2014

AfDB seeks investment in Kenya's upstream oil sector

African Development Bank (AfDB) is eyeing opportunities in Kenya’s oil sector as the country edges towards exploitation of petroleum reserves discovered in the Turkana basin.

Regional director for eastern Africa Gabriel Negatu Thursday said that the lender was keen on upcoming grand projects such as the building of new refinery and fuel pipeline under the Lamu Port and Lamu-South Sudan Ethiopia Transport Corridor (Lapsset) project.
“We are very much interested in the oil industry and we shall have discussions on what role we can play to support the projects,” he told journalists in Nairobi.
Kenya did not have known commercial reserves of petroleum until March 2012 when Britain’s Tullow Oil discovered oil in Ngamia-1 well at Lokichar in Turkana County.
By last month, Tullow had drilled seven more exploration wells at Etuko-1, Twiga-1, Ekales-1, Paipai-1, Amosing-1, Agete-1, Awoi-1. Six of them had oil.
Tullow has since doubled its estimate of discoveries to 600 million barrels in the Lokichar basin, following its latest discovery. The focus now turns to development of infrastructure such as an evacuation pipeline and a refinery.
Kenya is keen on developing the oil in Turkana under the Lapsset project entails building of a new seaport at Manda as well as standard gauge railway lines from Lamu to South Sudan with branches to Nairobi and Ethiopia from a hub in Isiolo.
“We hope to participate in the projects through the private sector either as financiers or lead arrangers for funding,” Mr Negatu said.
The Lapsset project will also involve the construction of a highway from Lamu to Isiolo with an extension to Nadapal/Nakodok in South Sudan and another link to Addis Ababa through Moyale.
The government further plans to include an oil refinery in the project even though there have been debates whether to build it in Lamu or Isiolo, which lies near the oil fields near Turkana.
Under Lapsset it was proposed that a refinery be built in Lamu so that even if South Sudan failed to use the pipeline and Kenya failed to find oil, Kenya would still import crude and have it refined in Lamu, a consultant involved in the project recently said on condition of anonymity.
By Allan Odhiambo

Wednesday, 12 March 2014

25 Great Kenyan Blogs You Should Follow - We are one of them

travelstartblog a blog associated with travelstartkenya (Africa's leading and fastest growing online travel agency - has chosen this site as one of the 25 greatest blogs in Kenya. 

See link below for details:

Sasol eyeing Mozambique's gas prospects

Sasol, the South African Energy and chemicals group says the gas discoveries in the north of Mozambique are large enough to support significant additional “gas monetisation” options over-and-above the liquefied natural gas (LNG) opportunities currently being considered.

There have been significant gas discoveries in the Rovuma basin, offshore northern Mozambique, where it is estimated that there is more than 65-trillion cubic feet of recoverable natural gas, and plans are being advanced for the commercial development of LNG.

The Group executive for South African energy Bernard Klingenberg said the group was monitoring a potential role for its proprietary gas-to-liquids (GTL) technology in the Southern African country, where it already had an operating presence in the gas sector.

“We are actively engaging with role-players both in southern and northern Mozambique and will, where appropriate, try to participate in the opportunities that then unfold,” Klingenberg outlined.
There was also potential for additional gas-to-power opportunities besides the 140MW projects already under construction at Ressano Garcia.

In an earlier presentation, Sasol CEO David Constable emphasised the group’s established position in the Mozambique gas market, highlighting its role in developing the Temane and Pande gasfields and the associated processing and transportation infrastructure.

With its partners, it had invested US$3-billion in southern Mozambique, including in the construction of a pipeline to Secunda. “Sasol’s cumulative direct contribution to the Mozambican government from 2004 to 2014 was more than US$600-million,” Constable noted.

He also stressed that it had continued growth ambitions for the country, where it was investing in further exploration and development.
“We have formulated a portfolio of downstream gas commercialisation options to match our resource estimate. These options include power generation, chemicals and piped gas, which are all aligned with government drivers specified in the draft Mozambique gas master plan.”

By Terence Creamer

Australian oil explorer sells stake in Kenyan block for US$36.6

Australian explorer Swala Energy has sold a 25 per cent interest in its oil block located in Kenya's Nyanza province  for $36.6 million (Sh3.16 billion) to an undisclosed investor in a farm out transaction.
The company sold the stake in Block 12B to an international oil and gas company to raise money for funding seismic surveys and drilling of two oil wells on the block.
“This will allow the company to focus its energies and resources on existing operated assets and the continued growth of the company’s portfolio,” said Swala chief executive David Ridge.
The sale will see Swala’s interest in the block reduce to 25 per cent. UK’s Tullow Oil holds the other 50 per cent interest in the block.
Mr Ridge said the farm-out was the most cost-effective and least dilutive way to strengthen the company’s balance sheet since the new investors will pay for all past costs, seismic surveys, drilling of two wells and other costs in future.
The explorer did not indicate the value of past costs but put the value of expected work to be at Sh1.53 billion or US$17.7 million. Analysts, however, say the deal is a bargain for Swala.
“On a per kilometre square basis, this deal represents the best farm-out achieved onshore East Africa and is strong testament to the prospectivity of the play in which Tullow and Africa Oil have recently made five discoveries from five wells nearby,” said a note on Swala by Argonaut Research.
Simba Energy of Canada sold 40 per cent of its tertiary rift block for Sh746 million in February to an undisclosed investor.
EHRC Energy, a Texas-based firm, said it had sold a 55 per cent stake to Spain-based CEPSA in a deal that will see it get an initial US$2 million (Sh174 million), with more cash expected through financing of drilling of wells.
Swala said the new investor would release funds for drilling if ongoing seismic surveys show that Block 12B had strong prospects.
Data from seismic survey, which will show the best spots for drilling, is expected to be out by end September.
The deal will be completed after approval from the government when the identity of the new investor will be revealed. Swala also operates in Tanzania.
By John Gachiri

Tuesday, 11 March 2014

China plans airbase in Zimbabwe

China is planning to set up a modern high-tech military base in the diamond-rich Marange fields, says a German-based website, Telescope News.

The news of the agreement to set up the first Chinese military airbase in Africa comes amid increasing bilateral cooperation between Zimbabwe and China – notably in mining, agriculture and preferential trade. China is the only country exempted from the indigenisation laws which force all foreign investors to cede 51% of their shareholding to carefully selected indigenous Zimbabweans. The Marange story quoted unnamed military officials and a diplomat admitting knowledge of the plan to set up the base.

China is Zimbabwe’s biggest trading partner after South Africa and has strategic economic interests in many African countries to guarantee raw materials, job sources and markets for its large population.

The new Chinese Ambassador to Zimbabwe, Lin Lin, recently said trade between the two countries last year exceeded the US$1-billion. Yet Zimbabwe is only 26th on the list of China’s 58 biggest African trading partners.

France to pursue Africa Rare Earths

France has revealed plans to invest US$548-million dollars in establishing a new state-owned mining company called Compagnie National des Mines de France (CMF), with sub-Saharan Africa being looked at for significant investment.

CMF, another move by the government to revive the industry, marks the establishment of the European nation’s first new state-owned industrial enterprise in 20 years. The company will be built using the same model as Japan’s Oil, Gas and Metals National Corporation (JOGMEC) that was established a decade ago.

An annual budget of US$150-million dollars will be spread out over five to seven years while exploration and exploiting activities at the mine will focus on rare metals like lithium, germanium, tungsten, antimony and rare earths inside France and around the globe including former colonies in Africa, Central Asia and South America, French industry minister Arnaud Montebourg announced late in February.

“Francophone African countries, in particular, would like to work with us rather than do business with foreign multinationals;” Montebourg said for in an interview for French daily newspaper Le Parisien.

Monday, 10 March 2014

Ethiopia Strikes Oil

Ethiopia could be sitting on large energy reserves, says John Daly the chief analyst for

He said two explorers, British oil firm New Age (African Global Energy) and its Canadian oil firm partner Africa Oil, found an oil and gas flow at its Elkuran-3a appraisal well depth of 3 900 feet. The company began drilling the appraisal well in October 2013, with a targeted depth of 9 350 feet.

Daly said oil and gas flows are very common in that region, especially in the Elkuran and Hilala regions, but that more exploration work is needed.

Kenya Looks to Nuclear Energy

Kenya seems committed to generating at least 1 000 megawatts from nuclear within the next ten years. The country’s deputy president Wiliiam Ruto said recently that the country would develop a nuclear plant alongside other sources of energy such as geothermal, hydro, wind and solar. He said the government was committed to increase the capacity of electricity in the country to 5 000 megawatts in the next 40 months and expressed confidence that this will push the cost of production of energy down from 18 US cents to 10 US cents per unit.

“We want to grow the economy at double digits, deal with unemployment, under-employment by creating more job opportunities in the country,” Ruto said.

Explaining that Kenya has only been able to produce 1 600MW (megawatts) of electricity in the last 50 years, Ruto pledged that the government would triple the production, saying there was ready market for the increased energy in the standard railway and for all of those not yet connected to the national grid.