China signs US$ 1.7 billion dollar deal with Tanzania

Tanzania has signed contracts worth US$1.7 billion dollars with Chinese companies to construct power plants and housing units in east Africa’s second-largest economy. The new investment deals mark China's growing economic presence in Tanzania, which has made big discoveries of natural gas off its southern coast.

“The government has today signed seven agreements with six Chinese companies worth US$ 1.7 billion, which will be invested in power plants and construction of residential and commercial housing projects,” the Tanzanian prime minister’s office said.

The deals include a US$ 692.7 million contract awarded to Tebian Electric Apparatus Stock Co Ltd, China’s largest manufacturer of high-voltage transformers, for the construction of a 400 kV power transmission line.

Baobab explores Mozambique energy options

UK miner Baobab Resources says it will jointly commission, with Mozambique’s publicly owned electricity company, EDM, a detailed study for the power needs of its pig-iron project in the western province of Tete.

The memorandum of understanding follows the Mozambican government's unconditional approval of Baobab's environmental impact scoping report.
Baobab is examining a range of scenarios that could see Mozambique host the largest pig-iron operation in the world.

It is planning to produce low impurity pig-iron using ore from its Tenge/Ruoni deposit in Tete and locally mined thermal coal. It is currently focusing on the feasibility of building a facility to produce two million tonnes of pig iron per year.

Tanzania opens bids for gas exploration

Tanzania has invited bids for eight blocks and said late in October it would take a stake of up to 75% in each of the new production-sharing contracts. The country is a hotspot for natural gas exploration.

“The production-sharing formula will either be 35% to investors and 65% to the government or 25% to them and 75% to us,” Tanzanian President Jakaya Kikwete said.

Tanzania, which has made big discoveries of natural gas off its southern coast, is offering seven deep-sea offshore blocks and one block in Lake Tanganyika.

Kikwete said the government would consider selling stakes held by the state-run Tanzania Petroleum Development Corporation in production-sharing agreements to Tanzanians through initial public offerings.

Officials said the state-run development corporation will apply the rule on stakes during the development phase in oil and gas projects and will not participate during exploration.
Tanzania has so far signed 25 production-sharing agreements with about 17 international energy companies, including Royal Dutch Shell and Exxon Mobil.

Ethiopia to get $4 billion investment for leap into geothermal power

Ethiopia has signed a preliminary agreement with a U.S.-Icelandic firm for a US$4 billion private sector investment intended to tap its vast geothermal power resources and help it become a major exporter of energy for East Africa.

Reykjavik Geothermal, whose Icelandic geothermal expertise is backed by U.S. investors, signed a deal with Ethiopia on Wednesday to construct a 1,000 MW geothermal power plant, Africa's largest, in the volcanically active Rift Valley.

When complete, the project will be Ethiopia's biggest foreign direct investment, run by its first privately owned utility. In an economy traditionally dominated by state spending, the government has suggested that the nascent sector could be a model for increased private investment.

"This is an epic moment for all of us ... bringing Ethiopia to the forefront of geothermal development," said Reykjavik Geothermal CEO Gudmundur Thoroddsson, who signed the deal with Mihret Debebe, his counterpart at the state-run Ethiopian Electric Power Corporation (EEPCO), in Addis Ababa.

Ethiopia currently suffers frequent blackouts because of a lack of power. But it is due to boost its generating capacity from 2,000 MW to 10,000 MW within the next three years, much of it coming from the 6,000 MW Grand Renaissance Dam under construction on the Nile.

Experts put its hydropower potential at around 45,000 MW and its geothermal potential at 5,000 MW, but Reykjavik says the accessible geothermal resources could be nearer 15,000 MW.

"For 50 years, everyone has known that there was potential, but the initial risk and initial cost of developing geothermal is high," said Reykjavik Geothermal managing director Thorleifur Finsson.

"After we managed to develop many sites in Asia and America, eyes have been opened that there is a possibility and ... today's technology has minimized that financial risk," he said. "There is huge potential."

PRIVATE FINANCE

Power will be extracted from under the volcanic Corbetti Caldera crater by pumping water to a depth of more than 1,000 meters to be superheated in geological strata where the temperature is around 350 degrees Celsius (660 Fahrenheit).

Finsson said it was envisaged that the first 500 MW of power from the Corbetti Caldera would come onstream in 2018, and the second 500 MW by 2021, but that finance had so far only been committed for a first phase of exploration drilling.

Depending on the results of this, he said he expected "financial close at around end of December 2014 or beginning of 2015". He said the power purchase agreement was expected to commit EEPCO to buy the station's output for 25 years.

Ethiopia, Africa's second most populous country, has also been one of the continent's fastest growing economies, with 9.7 percent growth in fiscal 2012/13.

However, much of this is the result of heavy public infrastructure spending; the International Monetary Fund has said balance of payments pressures and the difficulties faced by the private sector - whose share of Ethiopia's GDP is the sixth lowest in the world - raise doubts about its growth model.

At the unveiling of the geothermal project in New York last month, Prime Minister Hailemariam Desalegn, in office for just over a year, suggested this might have to change if Ethiopia was to meet its expanding power generation ambitions.

"My vision is that over the next 30 years, we will need to harness as much as 80,000 MW of hydro, geothermal, wind and solar power, not just for Ethiopia, but for our neighboring countries as well ...

"We will need to partner with the private sector to bring in significant private investment going forward. From that perspective, this 1,000 MW project with RG is not that large - but it's a great start. What Africa needs now is not just aid, but trade and investment."

By Aaron Maasho

Additional reporting and editing by Kevin Liffey

Source: Thomson Reuters, 2013.

East Africa Oil & Gas Summit opens in Nairobi on October 29th as part of the Kenya@50 Celebrations

Advertiser's Blog

The 2^nd East Africa Oil and Gas Summit (EAOGS) which opens in Nairobi next week has officially been announced as part of the Kenya@50 Celebrations. The Summit which includes a strategic conference and exhibition is taking place on the 29^th and 30^th October at the Intercontinental, Nairobi.

‘’Following on from the huge success of the summit last year, we are very proud that the East Africa Oil & Gas Summit is officially part of the Kenya 50 Celebrations. As President Kenyatta unveils plans for country wide celebrations of Kenya’s 50 year anniversary of independence, we are honoured that the East Africa Oil & Gas Summit has been highlighted as a key event to launch the start of Kenya’s Celebrations’’ said Danny Grogan, Managing Director of the organising company; Global Event Partners (K) Ltd.

EAOGS is set to welcome 400 delegates from over 180 regional and international companies and the Summit features 18 headline sponsors, including Ernst & Young, Afren, NOC Kenya, Africa Oil, ABS, Barclays, CFC Stanbic Bank and Newport Africa.

Rosie Topp, Global Event Partners Ltd
rtopp@gep-events.com
UK Direct line: +44 20 3488 1193
UK Mobile: +44 7581 130130
UK Direct line: +44 20 3488 1193
UK Mobile: +44 7581 130130
---------------------------------------------------------------

EAOGS 2013 will bring together regional National Oil Companies, Ministries, IOC's, independent oil companies, service companies, legal advisors and investors to debate the oil and gas road map for the region. The Speaker line-up features Sumayya Atthmani, CEO, National Oil Corporation, Kenya; Henry Rotich, Mohamed Lino Benjamin, Director General of Petroleum, Ministry of Petroleum, Mining and Industry, South Sudan Cabinet Secretary for the National Treasury, Kenya Galib Virani, Director, Afren East Africa Exploration; Hassan Hassan, Managing Director, Operations,  Simba Energy; Silvester Kasuku, Director General/CEO, LAPSSET Corridor Development Authority. The speaker line up so far features 40 regional and international experts representing both government and private sector companies.

The Ministry of Energy and Petroleum in Kenya are looking forward to welcoming the international community to Nairobi to unite all the key players in the market and examine how to drive the oil and gas industry forward in Kenya and across East Africa. At  the recent EAOGS press launch The Principal Secretary at the Ministry of Energy and Petroleum, Kenya, Eng. Joseph Njoroje spoke about the necessity to build up Kenya’s infrastructure to ensure the successful development of the hydrocarbon industry for the benefit of all parties: ‘’We want to be a good example of the hydrocarbons in Kenya… The most important success factor of this industry is setting up of the infrastructure so that by the time you are extractive industry reaches its maturity stage, the infrastructure should be in place to avoid wastage and to avoid pilferage, to ensure the industry itself brings in the benefits to the investor, to the country and to the local community. ‘’ said the Principal Secretary.

He also spoke of his commitment to the EAOGS programme and the importance of knowledge transfer so Kenya is ready to develop the hydrocarbon sector: ‘’I have been assured by the team from Global Event Partners that this Summit is one of a difference. Global Event Partners are ready to engage the stakeholders including our Ministry so that they can identify the gaps in awareness and focus more in their summit in filling those gaps. ‘’

EAOGS 2013 will build on the success of the 2012 Summit which was co-hosted by the Ministry of Energy, Kenya and Global Event Partners (K) and was a resounding success welcoming 326 delegates from over 170 regional and international companies attended with delegates coming from 29 countries.

Danny Grogan, Managing Director of the organisers Global Event Partners (K) Ltd explained the success factor behind the EAOGS Summit ‘’EAOGS benefits from  the continued support and guidance from the Kenyan Ministry of Energy and Petroleum and the National Oil Company which positions EAOGS as the event of choice for all the leading industry companies. And Grogan concluded:  ‘’EAOGS looks set to break new ground and attract 400 domestic and international participants to Nairobi this October.’’

Press contact

Organisers:

EAOGS is organised by Global Event Partners (K) Ltd, a specialist international event organiser in the oil and gas, infrastructure and financial sectors. Our team at Global Event Partners has more than 40 years’ experience in organising leading industry conferences and exhibitions around the world.

Global Event Partners is affiliated to the dmg::events network. dmg::events are the organisers of world renowned oil and gas events including Gastech, ADIPEC, the Global Petroleum Show and the  World Heavy Oil Congress and are a subsidiary of the Daily Mail and General Trust plc, one of the largest media companies in the UK. www.gep-events.com