Uganda Lifts Oil Reserves

UGANDA has revised upwards  to 6.5 billion barrels after an appraisal that also showed commercial deposits of natural gas, officials said.

The east African country discovered commercial hydrocarbon deposits in the Albertine rift basin that straddles its border with the Democratic Republic of Congo in 2006.

Production has been repeatedly delayed since then by contractual disagreements, tax disputes and infrastructure setbacks and is now expected from 2017.

In a speech seen by Reuters on Friday, Ernest Rubondo commissioner for the energy ministry's Petroleum Exploration and Production Department, said only 40 percent of the basin had been explored so far and that estimated recoverable oil stood at 1.4 billion barrels.

Production of the discovered oil could last 20 to 30 years, and even more oil could be found, Rubondo said.

"Since additional exploration and appraisal is expected ... this could lead to additional resources being discovered in the country, hence prolonging the production period," Rubondo said.

Rubondo said Uganda was preparing for "open competitive licensing rounds" for the remaining acreage in the basin, but did not yet have a time frame for the process.

Ugandan officials say they aim to get better terms from explorers in future oil deals now that the country's exploration risk has been diminished by the discovery of more commercially viable oil deposits.

In a separate statement, the energy ministry said on Friday that the country had some 500 billion cubic feet of natural gas.

Ugandan oil officials have long suspected the presence of gas traces, but on Friday they confirmed publicly for the first time the existence of commercial natural gas deposits.

East Africa has been a focus of hydrocarbon exploration after substantial crude oil deposits were found in Kenya, although commercial viability has yet to be established. Major gas reserves have been discovered in Tanzania and Mozambique.

London-listed Tullow Oil, France's Total SA and CNOOC of China, are exploring for oil in Uganda. Tullow has estimated Uganda could earn up to $50 billion from its oil reserves. 

America's scramble for Africa

"Engaging with Africa not as a choice, but as a necessity,"

 The Obama administration on Tuesday pushed for Congress to renew a 14-year-old trade program giving African countries duty-free access to U.S. markets, warning that allowing the program to expire would disrupt trade flows between the two regions.

U.S. Trade Representative Michael Froman said the African Growth Opportunity Act, or AGOA, which expires on Sept. 30 next year had both benefited African countries and supported 120,000 U.S. jobs.

Froman's remarks came just days before the White House is set to host 50 African leaders at a three-day U.S.-Africa summit aimed at strengthening relations. AGOA, which is at the heart of U.S.-Africa trade ties, will be a key issue.

Enacted in 2000, AGOA gives about 7,000 products from sub-Saharan African countries access to U.S. markets free of import duty. Nearly 40 African countries are eligible to take part.

"Given that Africa is home to the world's fastest growing middle class and six out of 10 of the fastest growing economies in 2014, it's easy to see why companies like General Electric Co, Caterpillar Inc and Procter & Gamble Co increasingly view engaging with Africa not as a choice, but as a necessity," Froman said.

The head of the House Ways and Means trade subcommittee, Devin Nunes, told reporters Congress could package AGOA renewal together with fast-track power for trade negotiations, or trade promotion authority (TPA), and other outstanding trade issues.

"We have so many of these trade issues that are basically standing behind TPA, we have got to get TPA first," he said.

Exports from sub-Saharan Africa to the United States under AGOA and other trade preferences totaled $26.8 billion in 2013, according to USTR data. Most of those exports were petroleum products; non-oil goods accounted for just $4.9 billion.

"That is still relatively modest and we want to see that grow," Froman said at an event sponsored by the Brookings Institution.

The trade program has been criticized for disproportionately benefiting certain industries and a handful of countries, including Nigeria, South Africa and Angola.

Some African leaders have also said their countries lack the skilled labor and infrastructure to take advantage of it. Several African countries, for instance, are plagued with poor roads and shortages of electricity, which leads to power rationing that interrupts manufacturing.

Froman said the Obama administration plans to address AGOA's shortcomings and expand access to the program while also holding eligible countries more accountable. His office wants Congress to renew the program in advance.

Lawmakers will likely demand overhauls to the program, including making it more 

reciprocal so the United States can enjoy open access to African markets.

"The specific parameters of AGOA, of course, are ultimately a prerogative of Congress, and we look forward to working with them to put in place a program that reflects the reality of Africa's rise," Froman said.

Reuters

Tullow to Conduct Extensive Appraisal Drilling and Testing for Oil Production in Kenya

British firm, Tullow Oil Plc, says it will conduct extensive appraisal drilling and testing throughout year 2014 and 2015.

The objective of the extensive appraisal drilling and testing is to finalize a commercial production development report.

This report is what the government of Kenya wants. Nairobi wants to start selling oil as early as 2016 or 2017 and Tullow Plc must provide a comprehensive development report.

Speaking in Nairobi, Robin Sutherland, Tullow Oil Plc exploration manager for Sub Saharan Africa said the company is expected to submit a field development plan to the government of Kenya in the fourth quarter of 2015.

“We are expecting to submit our field development plans to the government in the fourth quarter of 2015,” Robin Sutherland told an oil and gas conference in Nairobi.

The appraisal drilling and testing will quantify the commercial viability thresholds; enable both the government and the investors to make projections.

Source:.intelligencebriefs.com/

  

Kenya's Airport financiers named

The prototype of the new terminal

Kenya’s government is in talks with four companies, including Standard Bank Group Ltd. (SBK), Africa’s biggest lender, about funding the construction of a $653 million Green field airport terminal, the Kenya Airports Authority said.

The state is in discussions with the African Development Bank, China Development Bank Corp. and Sunnyvale, California-based AAE Systems Inc. about funding 85 percent of the project cost, Managing Director Lucy Mbugua told reporters today in the capital, Nairobi. The first phase of construction of the new terminal in Nairobi will begin in July and is expected to end in 2017, she said.

“They have already given us their terms and we are in discussion,” Mbugua said.

Kenya is expanding its Jomo Kenyatta International Airport as it seeks to boost arrivals of tourists who are the second-biggest source of foreign-currency earnings in East Africa’s largest economy. The new terminal will have the capacity to handle 20 million passengers a year, compared with the 7 million that the existing terminal, built in 1978, can process.

From Bloomberg

Six DreamLiners for Kenya Airways this year

The Pride of Africa

Kenya Airways will take delivery of its first Boeing 787 on April 4, marking the first of six of the type to join its fleet in 2014.

Nairobi-based Kenya Airways said the new additions, which also include a 777-300ER slated for delivery in May, form a key part of its Project Mawingu 10-year growth strategy.

The aircraft will be used as part of a “deliberate effort” to step up Kenya Airways’ long-haul capacity, allowing the carrier to increase its number of direct flights, and add new destinations and frequencies.

“Routes to Paris, Amsterdam and Beijing are among the destinations earmarked for direct flights, as we continue exploring new markets that will be instrumental in helping us achieve our objective, to contribute toward the sustainable development of Africa,” Kenya Airways CEO Titus Naikuni said.

Kenya Airways also recently confirmed plans to launch new budget carrier Jambo Jet on April 1.

Kenya to call or EOI on crude pipelin

An oil Pipeline. Pipedream turns reality?

KENYA will soon float an EOI for the design and construction of a crude oil pipeline from Turkana to the proposed Port of Lamu. Although the ownership of the project is yet to be decided, the government appears to be thinking a PPP.

Available information seems to suggest that the government could be looking at a DBFO. The cabinet Secretary in charge of Energy in Kenya has indicated that the government will expect prospective investors to submit engineering, procurement and construction (EPC) models as well as their financing arrangements.

The US$3 billion pipeline was initially conceived to transport crude oil from South Sudan to the port of Lamu. That was before Kenya discovered oil in 2013. Now that Kenya has discovered commercial quantities, she is set take the lead in the development of the pipeline. South Sudan is stumbling from one crisis to the next which could slam the breaks on the country’s development agenda. South Sudan for all intends and purpose is going to be a passenger on the project.

Toyota Tshusho, the investment arm of Japan Toyota Motor Corporation had tendered a US$3 billion bid to build the Pipeline with an option to extend it to Uganda for a total cost of $5 billion.  It is not clear what become of that unsolicited bid. However, her preliminary designs for the project, with several components in addition to the pipeline including a 120,000bpd refinery at Lamu. That could stand her a good stead in future bids.

Kenya’s oil finds have reached commercial thresholds. Consequently, it was time the country started preparing infrastructure ahead of commercial production, hopefully in three years.

So far Kenya’s oil wealth is estimated at 600 million barrels out of seven wells. Exploration is still going on and more crude is likely to be discovered.

The plans by the ministry of Energy and Petroleum got a boost after Uganda signed a memorandum of understanding with Britain’s Tullow Oil, France’s Total and China’s CNOOC last week in a significant step towards launching oil production in the country. Uganda is also looking at exporting her crude oil through the LAPSSET corridor, that is the Lamu port.

A development plan prepared by the Energy ministry shows that production is likely to begin during the 2016/7 financial year.

The pipeline is on the Lamu port, South Sudan, Ethiopia transport corridor (LAPSSET). Consequently, it is expected to be extended to South Sudan, and Ethiopia. Although it is not clear the distance of pipeline in Kenya, the initial proposal placed the distance at 2000 km from Juba to Lamu.  

Tanzania’s US$30bn Power gap

03 February, 2014 06:28:00

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 Reports indicate that Tanzania's energy infrastructure will require a new investment of almost $3 billion annually for the period of 10 years to meet its power supply demand.

The figure was revealed during the Powering Africa Tanzania symposium, a gathering that brings together key public and private sector energy stakeholders.

The African Development Bank's Chief of Power Engineer, Dr Babu Ram, says Tanzania has a massive infrastructure gap and it’s getting worse every day.

Dr. Ram believes that spending at the increased level would absorb just over 20% of the country's GDP. On average, African countries are spending only 40% on infrastructure.

@AfricanBJournal