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Tuesday, 2 October 2012

The East Africa Oil and Gas Summit 13-14 November, Nairobi


East African Ministers confirm attendance at Oil and Gas Summit in Nairobi.

Hon Prof Sospeter Muhongo, Minister of Energy & Minerals, Tanzania; Hon. Stephen Dhieu Dau, Minister for Petroleum, Energy and Mining, South Sudan and Hon. Kiraitu Murungi, Minister for Energy, Kenya have all confirmed their attendance at the EAOG Summit 13-14 November at the Intercontinental Hotel Nairobi. They are leading delegations from their respective countries where they are looking forward to meet the international oil & gas business community and all those interested in investing in the region.

As the Ministers’ initiative for the East Africa region, the EAOG Summit is the most senior annual event in the East Africa oil and gas calendar for 2012. With a planned opening by Prime Minister Raila Odinga, and President Mwai Kibaki and expected attendance by all the Energy Ministers from across Kenya, Tanzania, Mozambique, Uganda, South Sudan, Rwanda & Burundi, the EAOG Summit is the major annual international hub for the oil and gas industry across East Africa.

Check out the clip below.

''The EAOG Summit is the first in what will become a pivotal annual event of great investor and stakeholder interest. We invite both the regional and international oil and gas communities to join us in Nairobi, 12th to 14th November. I ask you to join me in wholeheartedly supporting this event''
Hon. Kiraitu Murungi, Minister for Energy Kenya

Visit the website www.eaogs.com for further details




Monday, 1 October 2012

Territorial disputes in Eastern Africa: The Mineral factor


Territorial boundaries have always been an emotive issue in Africa and have been one of the contributing factors to civil strife on the continent. Most of this strife has been internal owing to the fact that ethnic groups were mixed up during the partitioning of the continent as the imperial powers scramble for Africa in the late 1800s/ early 1900s. The situation was further exacerbated because some communities that were traditional enemies were colonized together due to their proximity and ruled together via a divide and rule philosophy.

These rivalries have continued to play out themselves in Africa’s fluid geopolitical scene over the last 50 years when African countries first obtained independence.  This situation has sometimes lead to civil strife and bitterly contested elections where ethno centric political parties that win have ruled with impunity over their rivals.

Sovereign boundaries currently add a dynamism to the current mineral and energy rush in Eastern Africa as once peaceful neighbours scramble to maximize the mineral wealth deposits under their soil. Since oil and gas reservoirs know no boundaries and interpretations of where borders pass is at the discretion of current leaders, this are bound to raise tensions and could lead to cross border tensions and even conflict in the future.

Recently there have been either border tensions or disputes in all but two countries in the eastern Africa region. These two countries being Ethiopia and Mozambique.

Currently Sudan and South Sudan are embroiled in a dispute over their common border, a region that is rich in oil reserves and was one of the reasons why their civil war dragged on for a very long time. Recently this dispute has led to hostilities that culminated in a shut down in the flow of oil from the region leading to economic hardships in both countries. When South Sudan split from their unhappy union, it went with three quarters of their oil reserves. The border dispute though ethnic and religious in dimension is fueled by the desire of both countries to lay their hands on the oil deposit in the disputed border region especially the Abiyei State. This state and the neighbouring ones that straddle both countries have an ethnic mix of communities that swear allegiance to the rival governments. In the past week the President of both countries have signed an agreement to resume oil production and created a buffer zone between them without comprehensively solving the border issues.

We have also seen an emerging border dispute between Kenya and South Sudan over a barren piece of land in the North West of Kenya/ south east of South Sudan, the Illemi triangle. As The Sudan civil war dragged on for decades before the two countries split up August 2011. The Illemi triangle dispute was tucked away as Kenya worked to mediate an end to the conflict. Now that South Sudan is independent and oil deposits have recently been discovered in the Turkana County (the region of Kenya where the Illemi triangle lies). There are bound to be issues over this region. It has been reported that South Sudan has forwarded the matter to the United Nations for arbitration, even though their government openly denies this. The story of the Ilemi triangle is chronicled in at article The Ilemi Triangle: A Forgotten Conflict by Charles Haskins (http://shalomconflictcenter.org/images/THE_ILEMI_TRIANGLE.pdf)


The Illemi Triangle: Source: Wikipedia

In July of 2012 the Kenyan government completed the allocated all its offshore hydrocarbons exploration blocks available. This prompted the then Somalia Transitional Government (STG) to protest because some of the off shore blocks that were allocated are in disputed territorial waters between Kenya and Somalia. According to the Kenyan Government the convention of boundaries in international water is due east from the point of the on land boundary; this is the agreed convention that governs the offshore boundaries on the eastern Africa coast. However, the STG claims that the border should be perpendicular to the coastline therefore precipitating the dispute. However this dispute can be easily resolved through the UN Convention on the Law of the Sea that is the basis of the international maritime boundary dispute resolutions.
The discovery of oil on the Lake Albert, Uganda, a lake in the Great Rift Valley system that acts a border between Uganda and the DR Congo led to a short term period of skirmishes between the two countries over the issue of the exact location of beacons that demarcate the lake’s boundaries. Both countries henceforth agreed to seat down and come up with an amicable solution to this dispute.

The Lake Albert oil discovery has prompted a rush for exploration in other Great Rift Valley lakes such as Lake Malawi that acts as the boundary between Tanzania and Malawi.  Both countries cannot agree on the exact location of the boundary between both states. The issue is currently a highly contested topic between the governments of both countries.



The Lake Victoria, though not a Great Rift Valley lake is the largest lake in the region and the source of the River Nile, has also elicited a dispute between Kenya and Uganda. The dispute is over a barren rock island, the size of a football pitch that acts as a base for fishermen from both countries. Though the island was calibrated to be within the Kenyan border, as per the maps at the independence of both countries. The Ugandan government has laid a claim to it. The waters around the island are known to be rich in fish but the unconfirmed story is that the land under its waters could contain oil or gas deposits.

Though the issues of disputed boundaries and borders is not unique to Eastern Africa, as is the case of the territorial disputes in the South China Sea or The Falkland Islands pitting The UK against Argentina. The disputes in the region are bound to be explosive owing to the recent discovery of hydrocarbons in the vicinity. In most cases there are no clear agreements defining the boundaries nor clear legal frameworks and policies that govern the exploitation of the mineral wealth in cases where mineral deposits straddle boundaries.

The countries in East Africa should come together and draw up a common convention to arbitrate against these potential conflicts that are bound to slow their economic drive on the eve of their hydrocarbon bonanza. 

Friday, 14 September 2012

The East Africa Oil and Gas Summit 12-14 November, Nairobi

The East Africa Oil and Gas Summit comes to Nairobi from the 12 - 14th of November 2012.

With all the latest happenings in the oil & gas sector within the region of East Africa, this is a premium event worth attending.

The East Africa Oil and Gas Summit is the government led event for the whole East African region. Hon. Kiraitu Murungi, Minister for Energy, Kenya will host the opening ceremony and welcome delegations from throughout the East Africa region including Tanzania, South Sudan, Uganda, Mozambique, Burundi, Rwanda and Kenya.


The organizers announce the latest confirmation that Hon. Stephen Dhieu Dau, Minister for Petroleum, Energy & Mining will lead the delegation from South Sudan and Hon. Prof Sospeter Muhongo, Minister for Energy and Minerials will lead the delegation from Tanzania. While  NOC Kenya and Simba Energy have become the latest confirmed sponsors.

If you wish to attend please go onto the website and register.

For more details check out: http://www.eaogs.com

Monday, 10 September 2012

Pancontinental strikes natural gas off Kenya's Lamu coast in the Mbawa well.

Pancontinental Oil & Gas an Australian prospecting company announced today it has struck natural gas off Kenya's Lamu coast in sands of the Mbawa well (L8).

The discovery contains 52 net metres (~170ft) of natural gas pay. Signaling that Kenya has joined the ranks of potential natural gas producers. The announcement also recommends continued drilling to a deeper target with potential of a larger discovery.

Kenya now joins Tanzania and Mozambique on the east coast of Africa as a potential natural gas producer.

According to a Kenyan local Daily, The Business Daily, yesterday, Pancontinental had halted trading of its shares, pending an announcement expected today. This has now come to pass.

Pancontinental, which has been drilling the Mbawa deep-water well (L8) within a joint venture with Apache Corporation of the US as the well operator, said it had requested a halt in the trading of its shares at the Australian Securities Exchange (ASX) ahead of this announcement.

According to a notice by the ASX, the halting was done on Thursday, September 6, and is scheduled to end any time from today.

The Kenya L8 Mbawa Joint Venture consortium consists of-

Apache Corporation (Operator) 50%
Origin Energy Limited 20%
Pancontinental Oil & Gas NL 15%*
Tullow Kenya B.V. 15%

*Pancontinental’s 15% interest is “free-carried” through Mbawa drilling by Tullow Oil plc up to a
“cap” of US$ 9 million (as reduced by other exploration expenditure). After the first earning phase Tullow has an option to earn a further 5% by providing funding on Pancontinental’s behalf to a cap of US$ 6 million in any second well.

Just as I predicted in my previous postings there is more to come from the off shore basin of the Eastern African coast. 

Saturday, 1 September 2012

The Geothermal Development Company (GDC) is looking for Consultants for Menengai Geothermal Development Project 1


The Geothermal Development Company (GDC) is looking for consultants to provide management & supervisory services listed below. The consultancy is funded by a loan from the African Development Bank (AfDB) and the process of prequalifying follows AfDB rules and regulations.

The Services included under this project are:

1.     Drilling Rigs Inspection
2.     Supervision of Drilling Operations
3.     Management and Supervision of works during construction of steam gathering system
4.     Management and Supervision of works during power plant construction (both Modular and Conventional Power Plants)
5.     Assist in the procurement of contractors for steam gathering system and power plant operators
6.     Project Management ; and
7.     Knowledge Transfer and Training of GDC’s staff.

In a previous blog I had blogged about GDC seeking funding for this project. GDC has now got part of the funding to build its capacity ahead of investment for this project. The project is estimated will produce upto 400MW of electricity.

Deadline for submission of the EOI is 25th September 2012

For more details check out their website at: http://www.gdc.co.ke/images/Tenders/management_supervision.pdf

Also:

The Geothermal Development Company (GDC) is also looking for consultants to provide Transaction Advisory services listed below. The consultancy is funded by a loan from the African Development Bank (AfDB) and the process of prequalifying follows AfDB rules and regulations.

The Services included under this project are:

1.     Carrying out initial technical, financial and legal due are deemed necessary for successful completion of the transactions;
2.     Transaction structuring including Investment Options, analysis and evaluation;
3.     Providing Investment risk management advisory; 
4.     Investor engagement which includes; • Independent Power Producers (IPP) Procurement assistance; and
5.     Assistance with negotiations and IPP agreement management plan
6.      Capacity transfer during the engagement period


Deadline for submission of the EOI is 25th September 2012

For more details check out their website at: