Fate Of Russia's Impact In Africa Reliant On Continent's Ability To Make Better Deals

Russia's return to Africa has been the subject of wide media coverage, governmental concerns and civil society reactions in recent weeks, especially as Sochi gears up to host the first ever Russia-Africa Summit next week.

Most commentators have come from Europe and North America to voice concerns over Russia's dodgy arm deals in Africa, political meddling with unstable African regimes, and its overall challenging of the status quo on the continent. The problem is, when these comments are not outright hypocritical, they are missing a key point: competition is good for business, which is just what Africa needs right now.

First, Russia's presence in the continent cannot be summarized into sensationalism. It is complex and needs to be put back into context. Its modern relations with African governments and institutions started building up in post-independence Africa, time when the Soviet Union offered key diplomatic and military support to young African nations in need of it.

This assistance was multi-form and much needed for countries seeking fast development following harsh independence wars and conflicts. "The Soviet Union provided significant economic assistance, including infrastructure, agricultural development, security cooperation, and health sector cooperation," wrote Paul Stronski of the Carnegie's Russia and Eurasia Program this week.

Consequently, Putin's vision for Africa is resuming and building up on a cooperation that started in the second half of the 20th century and was only put on hold by the collapse of the Soviet Union in 1991.

In short, while arriving late to the party, Russia is no stranger to the African playground. Beyond military cooperation, its state-owned natural resources companies have already made inroads into the continent and could be a game-changer for many African countries in need of investment and electricity.

Key Russia energy companies such as Gazprom, Lukoil, Rostec and Rosatom are already present in Algeria, Angola, Egypt, Nigeria, Cameroon, Equatorial Guinea or Uganda, while mining and minerals ones such as Nordgold or Rusal are developing world-class mines in Guinea and Zimbabwe.

On a global stage, Russia's involvement in OPEC has also sent strong signals that it is committed to market stability and global energy cooperation, which ultimately benefit African producers.

"Russia's influence is increasing through strategic investments in natural resources, and such investments are welcomed by African governments and companies. They bring in key Russian capital and know-how to the continent which is seeking to diversify its investors basket and attract much needed investment into its energy industry," said Nj Ayuk, Executive Chairman at the African Energy Chamber and CEO of the Centurion Law Group.

"The African Energy Chamber is supporting such efforts and has seen a definite uptick in Russian companies' interests for the continent. We predict a lot of deals to be signed during and after the Sochi Summit for Russian energy companies to develop African resources and do business in Africa. This will be especially beneficial as Africa develops gas-based economies," he added.

Amongst the most recent agreements are for instance the MoU between Atlas Oranto Petroleum and Rosneft in 2018, under which the pan-African E&P company agreed to explore the joint-development of its assets across Africa with the Russian state-owned giant. Another one is the signing of several agreements between Russia and Mozambique this summer, involving again state-owned Rosneft but also Nordgold. In Central Africa, Gazprom is also lifting gas from Cameroon's the FLNG Hilli Episeyo, the world's first converted FLNG vessel.

As such investments and activity picks up, the real game changer will be Africa's ability to make deals that work for its people and its economies. Deal-making is what will shape the future of Russia-Africa relations and will tell whether Russia's renewed influence in the continent is good or bad for its people. Rightly so, the ability and capacity of African governments to make better deals with investors is becoming central to the global business narrative on Africa.

In his much anticipated book coming up this month and already best-seller on Amazon, "Billions At Play: The Future of African Energy and Doing Deals", Nj Ayuk dedicates an entire chapter to the critical art of deal-making. "For Africa to truly realize all of the benefits oil and gas operations have to offer, we need to see good deal-making across the board," he writes. "Clearly, good deal-making has far-reaching implications for African people, communities and business."

Contracts negotiations is in fact the key element missing from the current debate on Russia's increasing influence in Africa. There is no doubt Africa is welcoming Russia's interest for doing business on the continent, not only because it comes without the conditionality of actors such as the IMF and the World Bank, but also because Africa needs critical energy investment and a giant oil producer like Russia has good technology and know-how to export.

The only thing is, sub-Saharan Africa has seen several regulatory developments in the near future, with a particular focus on local content regulations across energy markets. Jobs creation, domestic capacity building and the growth of a strong base of local energy companies is high up on the African agenda. If African governments are able to negotiate contracts that deliver on these expectations and Russian companies are committed to see the continent grow, then the future is bright for Russia in Africa.

At the end of the day, it is all about how African governments and institutions will negotiate future contracts with Russian companies. As Nj Ayuk writes in Billions At Play, "governments must give investors a chance to generate income from the resources they are interested in and recoup their investments. At the same time, governments need to look at creating value for their country and its people. It's a balancing act. It's challenging, but it's doable."

Whether Sochi will result in that balancing act remains to be seen, but the challenge is given and Africa is up for it.

Fate Of Russia's Impact In Africa Reliant On Continent's Ability To Make Better Deals

Russia's return to Africa has been the subject of wide media coverage, governmental concerns and civil society reactions in recent weeks, especially as Sochi gears up to host the first ever Russia-Africa Summit next week.

Most commentators have come from Europe and North America to voice concerns over Russia's dodgy arm deals in Africa, political meddling with unstable African regimes, and its overall challenging of the status quo on the continent. The problem is, when these comments are not outright hypocritical, they are missing a key point: competition is good for business, which is just what Africa needs right now.

First, Russia's presence in the continent cannot be summarized into sensationalism. It is complex and needs to be put back into context. Its modern relations with African governments and institutions started building up in post-independence Africa, time when the Soviet Union offered key diplomatic and military support to young African nations in need of it.

This assistance was multi-form and much needed for countries seeking fast development following harsh independence wars and conflicts. "The Soviet Union provided significant economic assistance, including infrastructure, agricultural development, security cooperation, and health sector cooperation," wrote Paul Stronski of the Carnegie's Russia and Eurasia Program this week.

Consequently, Putin's vision for Africa is resuming and building up on a cooperation that started in the second half of the 20th century and was only put on hold by the collapse of the Soviet Union in 1991.

In short, while arriving late to the party, Russia is no stranger to the African playground. Beyond military cooperation, its state-owned natural resources companies have already made inroads into the continent and could be a game-changer for many African countries in need of investment and electricity.

Key Russia energy companies such as Gazprom, Lukoil, Rostec and Rosatom are already present in Algeria, Angola, Egypt, Nigeria, Cameroon, Equatorial Guinea or Uganda, while mining and minerals ones such as Nordgold or Rusal are developing world-class mines in Guinea and Zimbabwe.

On a global stage, Russia's involvement in OPEC has also sent strong signals that it is committed to market stability and global energy cooperation, which ultimately benefit African producers.

"Russia's influence is increasing through strategic investments in natural resources, and such investments are welcomed by African governments and companies. They bring in key Russian capital and know-how to the continent which is seeking to diversify its investors basket and attract much needed investment into its energy industry," said Nj Ayuk, Executive Chairman at the African Energy Chamber and CEO of the Centurion Law Group.

"The African Energy Chamber is supporting such efforts and has seen a definite uptick in Russian companies' interests for the continent. We predict a lot of deals to be signed during and after the Sochi Summit for Russian energy companies to develop African resources and do business in Africa. This will be especially beneficial as Africa develops gas-based economies," he added.

Amongst the most recent agreements are for instance the MoU between Atlas Oranto Petroleum and Rosneft in 2018, under which the pan-African E&P company agreed to explore the joint-development of its assets across Africa with the Russian state-owned giant. Another one is the signing of several agreements between Russia and Mozambique this summer, involving again state-owned Rosneft but also Nordgold. In Central Africa, Gazprom is also lifting gas from Cameroon's the FLNG Hilli Episeyo, the world's first converted FLNG vessel.

As such investments and activity picks up, the real game changer will be Africa's ability to make deals that work for its people and its economies. Deal-making is what will shape the future of Russia-Africa relations and will tell whether Russia's renewed influence in the continent is good or bad for its people. Rightly so, the ability and capacity of African governments to make better deals with investors is becoming central to the global business narrative on Africa.

In his much anticipated book coming up this month and already best-seller on Amazon, "Billions At Play: The Future of African Energy and Doing Deals", Nj Ayuk dedicates an entire chapter to the critical art of deal-making. "For Africa to truly realize all of the benefits oil and gas operations have to offer, we need to see good deal-making across the board," he writes. "Clearly, good deal-making has far-reaching implications for African people, communities and business."

Contracts negotiations is in fact the key element missing from the current debate on Russia's increasing influence in Africa. There is no doubt Africa is welcoming Russia's interest for doing business on the continent, not only because it comes without the conditionality of actors such as the IMF and the World Bank, but also because Africa needs critical energy investment and a giant oil producer like Russia has good technology and know-how to export.

The only thing is, sub-Saharan Africa has seen several regulatory developments in the near future, with a particular focus on local content regulations across energy markets. Jobs creation, domestic capacity building and the growth of a strong base of local energy companies is high up on the African agenda. If African governments are able to negotiate contracts that deliver on these expectations and Russian companies are committed to see the continent grow, then the future is bright for Russia in Africa.

At the end of the day, it is all about how African governments and institutions will negotiate future contracts with Russian companies. As Nj Ayuk writes in Billions At Play, "governments must give investors a chance to generate income from the resources they are interested in and recoup their investments. At the same time, governments need to look at creating value for their country and its people. It's a balancing act. It's challenging, but it's doable."

Whether Sochi will result in that balancing act remains to be seen, but the challenge is given and Africa is up for it.

The Unrealized Oil Promise of the Democratic Republic of Congo

By NJ Ayuk

It is no secret that the DRC's mining industry is of vital importance in answering the country's and the world's mineral needs. Today, copper, cobalt and other byproducts represent the backbone of the DRC's economic structure at about 85% of its exports.

That has been the case for many years, through several regimes, with little change. Besides metals, diamonds and oil represent the remaining of all that the DRC sends abroad, the vast majority of its outbound trade balance being composed of raw unprocessed goods.

Standing in the 12th position amongst African oil producers, the DRC's petroleum industry is miniscule at best, producing an average of 25 thousand barrels of crude oil per day off its coastal ageing fields. But that seems rather odd.

While there is not much talk about this particular fact, when we think of it, it is somewhat perplexing that the DRC, which is bordered by so many oil producers and has territorial waters in the prolific Gulf of Guinea, has never really developed an oil industry or even seemed to be interested in developing one, despite its prospective reserves. With a population of around 80 million people, of which around 75%, most statistics indicate, live in extreme poverty, the DRC is today amongst the five poorest countries in the world. 

One would expect that the country's leaders would strongly push for the exploration of the country's natural resources to produce wealth and provide for better living conditions for its citizens. Yet, the DRC's oil and gas reserves remain largely unexplored, while most studies estimate that there could be around 20 billion barrels of undiscovered oil in the country's basins, both onshore and offshore.

That is a tremendous amount of oil which, if confirmed, would place the DRC as the second biggest petroleum holder in Sub-Saharan Africa, behind only Nigeria, and far outdoing Angola's reserves of 9 billion barrels of oil.

This is not the Africa we want, and this is not the DRC that we want.

First of all, keeping certain communities in poverty to retain power is a complete mistake. Power stability comes from generalized improvement of life conditions. If the country is wealthier and is capable of improving the lives of those that live in it, the more stable it will be and the more capable it will become of sustaining and giving continuity to that development.

Further, as I have extensively defended over the years, the sanctity of contracts is of paramount importance to attract investment and partnerships into any country. What company would want to invest in a country where a contract can be signed and then cancelled a few months later without further explanation or justification?

And it is not just a matter of reputation, but of direct financial burden, lest not forget that just in March this year, an international court ordered the Democratic Republic of Congo to pay South African DIG Oil Ltd USD$617 million for failing to honour two oil contracts.

That is 1.6% of the country's 2017 GDP. How can any leader possibly justify such a loss to its economy. Not to, again, mention the enormous economic potential that could come from actually letting those contracts take shape and allow companies to explore the country's oil regions.

Stability depends on investment, cooperation and development. To attract investment, conditions need to be created for the business environment to be enabling for industry development. Disrespecting contracts does not achieve that. Nor does keeping people from producing wealth.

Just in May, French super-major Total abandoned its exploration license in the DRC. Bloomberg's article on the matter was titled "Congo's Lone Oil Giant Quits Search, Partner Says". That's right, it was the last major oil and gas company to abandon the DRC's oil plays. Others had been there over the years, Shell and Texaco for instance.

About 10 years ago, Tullow Oil and partners tried to acquire a license for exploration, signed a contract, paid the bonuses, and saw the contract then cancelled and the same block then sold to yet another company just a few months later. Nothing has been done in the acreage since.

This is the absolute opposite of what must be done.

Oil and gas production can bring enormous wealth to the country and its people, not to mention the ability the country's gas reserves could have to produce electricity to power homes and industry.

Since January 2019, the DRC is led by a new government. It now has the opportunity to change the status quo of the DRC within the global oil industry and to promote investment. The country's oil and gas laws are fairly well developed and the potential for discoveries is huge; the problem is reputation.

If the country's leaders can reassure international investors that their contracts will be respected and if investments can be facilitated and transactions made transparent, there is little limit to how quickly the country's industry could grow and how much its people could benefit. Better living conditions across the country would ease ethnic and social tensions and provide the basis for a level of socio-economic development that the country has never seen before.

If the dependency on the volatile prices of mineral commodities continues, as well as the uneven distribution of wealth, and if the generalized situation of extreme poverty is sustained amongst the population, instability, rather than stability, will be the end result.

Further, the DRC has the opportunity to seek the help and support of international institutions and partners in developing its oil industry, such as the World Bank, the IMF or the Norwegian government, which have vast experience in helping other African oil producers. They can also seek closer proximity with the US, where most of the major companies with the capability, technology and capital to help develop their industry reside. 

The US government also has an interest in promoting these developments in the DRC, as maintaining stability in the sub-continent and the Central African region is of particular strategic importance for US interests. 

It is astonishing to me that the leaders in Kinshasa are not willing to look from their windows just across the Congo river to Brazzaville and want to emulate the steps taken by their neighbour, the Republic of Congo, currently the third biggest oil producer in Sub-Saharan Africa.

Finally, good signs are coming from the current administration. In April, at the latest Africa Petroleum Producers Association's Conference in Malabo, Equatorial Guinea, the DRC's oil minister announced the country would put 38 blocks on offer for bidding and negotiation, located in three different basins. This is an important step in order to call out investor attention to the country, and I applaud the initiative.

Hopefully the regime change, the country's adherence to the EITI, and the new block offer will help bring investment, but more will have to be done to reassure investors that entering this market will be a profitable and safe bet, and that their interests and rights are protected by the law.

I hope to see these developments happening soon and to be a witness to the fulfillment of the DRC's oil industry's full potential.

NJ Ayuk is the CEO of Centurion Law Group, a pan-African law Conglomerate and the current Executive Chairman of the African Energy Chamber (EnergyChamber.org), the voice of the African Oil and Gas industry. He is the author is the upcoming book "Billions at Play: The Future of African Energy and Doing Deals".

Unrealized Oil Promise Of Democratic Republic Of Congo

By NJ Ayuk

It is no secret that the DRC's mining industry is of vital importance in answering the country's and the world's mineral needs. Today, copper, cobalt and other byproducts represent the backbone of the DRC's economic structure at about 85% of its exports.

That has been the case for many years, through several regimes, with little change. Besides metals, diamonds and oil represent the remaining of all that the DRC sends abroad, the vast majority of its outbound trade balance being composed of raw unprocessed goods.

Standing in the 12th position amongst African oil producers, the DRC's petroleum industry is miniscule at best, producing an average of 25 thousand barrels of crude oil per day off its coastal ageing fields. But that seems rather odd.

While there is not much talk about this particular fact, when we think of it, it is somewhat perplexing that the DRC, which is bordered by so many oil producers and has territorial waters in the prolific Gulf of Guinea, has never really developed an oil industry or even seemed to be interested in developing one, despite its prospective reserves.

With a population of around 80 million people, of which around 75%, most statistics indicate, live in extreme poverty, the DRC is today amongst the five poorest countries in the world. 

One would expect that the country's leaders would strongly push for the exploration of the country's natural resources to produce wealth and provide for better living conditions for its citizens.

Yet, the DRC's oil and gas reserves remain largely unexplored, while most studies estimate that there could be around 20 billion barrels of undiscovered oil in the country's basins, both onshore and offshore.

That is a tremendous amount of oil which, if confirmed, would place the DRC as the second biggest petroleum holder in Sub-Saharan Africa, behind only Nigeria, and far outdoing Angola's reserves of 9 billion barrels of oil.

This is not the Africa we want, and this is not the DRC that we want.

First of all, keeping certain communities in poverty to retain power is a complete mistake. Power stability comes from generalized improvement of life conditions. If the country is wealthier and is capable of improving the lives of those that live in it, the more stable it will be and the more capable it will become of sustaining and giving continuity to that development.

Further, as I have extensively defended over the years, the sanctity of contracts is of paramount importance to attract investment and partnerships into any country. What company would want to invest in a country where a contract can be signed and then cancelled a few months later without further explanation or justification?

And it is not just a matter of reputation, but of direct financial burden, lest not forget that just in March this year, an international court ordered the Democratic Republic of Congo to pay South African DIG Oil Ltd USD$617 million for failing to honour two oil contracts.

That is 1.6% of the country's 2017 GDP. How can any leader possibly justify such a loss to its economy. Not to, again, mention the enormous economic potential that could come from actually letting those contracts take shape and allow companies to explore the country's oil regions.

Stability depends on investment, cooperation and development. To attract investment, conditions need to be created for the business environment to be enabling for industry development. Disrespecting contracts does not achieve that. Nor does keeping people from producing wealth.

Just in May, French super-major Total abandoned its exploration license in the DRC. Bloomberg's article on the matter was titled "Congo's Lone Oil Giant Quits Search, Partner Says". That's right, it was the last major oil and gas company to abandon the DRC's oil plays. Others had been there over the years, Shell and Texaco for instance.

About 10 years ago, Tullow Oil and partners tried to acquire a license for exploration, signed a contract, paid the bonuses, and saw the contract then cancelled and the same block then sold to yet another company just a few months later. Nothing has been done in the acreage since.

This is the absolute opposite of what must be done.

Oil and gas production can bring enormous wealth to the country and its people, not to mention the ability the country's gas reserves could have to produce electricity to power homes and industry.

Since January 2019, the DRC is led by a new government. It now has the opportunity to change the status quo of the DRC within the global oil industry and to promote investment. The country's oil and gas laws are fairly well developed and the potential for discoveries is huge; the problem is reputation.

If the country's leaders can reassure international investors that their contracts will be respected and if investments can be facilitated and transactions made transparent, there is little limit to how quickly the country's industry could grow and how much its people could benefit. Better living conditions across the country would ease ethnic and social tensions and provide the basis for a level of socio-economic development that the country has never seen before.

If the dependency on the volatile prices of mineral commodities continues, as well as the uneven distribution of wealth, and if the generalized situation of extreme poverty is sustained amongst the population, instability, rather than stability, will be the end result.

Further, the DRC has the opportunity to seek the help and support of international institutions and partners in developing its oil industry, such as the World Bank, the IMF or the Norwegian government, which have vast experience in helping other African oil producers. They can also seek closer proximity with the US, where most of the major companies with the capability, technology and capital to help develop their industry reside. 

The US government also has an interest in promoting these developments in the DRC, as maintaining stability in the sub-continent and the Central African region is of particular strategic importance for US interests. 

It is astonishing to me that the leaders in Kinshasa are not willing to look from their windows just across the Congo river to Brazzaville and want to emulate the steps taken by their neighbour, the Republic of Congo, currently the third biggest oil producer in Sub-Saharan Africa.

Finally, good signs are coming from the current administration. In April, at the latest Africa Petroleum Producers Association's Conference in Malabo, Equatorial Guinea, the DRC's oil minister announced the country would put 38 blocks on offer for bidding and negotiation, located in three different basins.

This is an important step in order to call out investor attention to the country, and I applaud the initiative. Hopefully the regime change, the country's adherence to the EITI, and the new block offer will help bring investment, but more will have to be done to reassure investors that entering this market will be a profitable and safe bet, and that their interests and rights are protected by the law.

I hope to see these developments happening soon and to be a witness to the fulfillment of the DRC's oil industry's full potential.

NJ Ayuk is the CEO of Centurion Law Group

Rajiv Ruparelia To Rotaractors: Start & Nurture Your Businesses Now

Uganda is a young nation with many opportunities that favour business and economic growth but young entrepreneurs must choose something they can nurture well and be remembered for it.

This advisory was made by Rajiv Ruparelia, the managing director of Ruparelia Group while speaking as a keynote speaker at the Rotaract Club of Kampala South weekly meeting that took place at Hotel Africana last week.

“You can either choose to be remembered for business, charity, entrepreneurship or social work,” Rajiv said in his speech adding that everybody will be remembered for something they did in their lifetime.

“If you want to do something start now, nurture it and take your time; teaching your self is a must because nobody will teach you. Work on it, one day you are going to be there,” Rajiv noted.

The young businessman who has slowly but steadily taken over the day to day running of the Ruparelia Group from his father Dr. Sudhir Ruparelia asked the young Rotarians to smell the opportunities and consider starting and building sustainable business enterprises.

The Rotaract Club of Kampala South meets every Thursday at Hotel Africana and last week’s meeting was held under the theme ‘building companies that last’.

The evening meeting was addressed by Rajiv Ruparelia, Prof. Maggie Kigozi, the Director of Crown Beverages and businessman Amos Wekesa, the CEO Great Lakes Safaris, as guest speakers.

The trio shared their experiences on how to start a business and how they have managed to thrive and build them to where they are.

Wekesa said that starting a business early helps build self-esteem and gives strength in scalability. He noted that people who are brave to begin early will never go astray in working and building successful businesses.

“I have run a company for the last 18 years, the things that people want to know are the things they do not want to hear. I started my business out of frustration, after being born from a poverty-stricken family.

Prof. Kigozi, in her remarks, told the Rotaractors to always start small and focus on growing their business.

“All the wealthy people in the city did not start big. If you listen to their stories you will be surprised how they started,”

She warned the youthful Rotaractors who crave for luxurious parties to stop and consider mobilizing money for starting businesses at an early age.

“Do not demand for parties from your families. Organize a family business instead,” Kigozi said.

How Infrastructure And Energy Are Key To DRC's New Economic Journey

By Koketso Lediga

The Democratic Republic of Congo (DRC), sub-Saharan Africa’s largest country, is known for being a tough place to do business but also one of unexploited economic potential.

Although the country has had a dark cloud looming over it for years, it recently held its first democratic transfer of power since it gained independence from Belgium in 1960. And like other African countries, the DRC is in pursuit of a stronger and thriving economy. The IMF has the country’s economy‘s growing at a rate of 4.3% in 2019; and nothing suggests that this will not improve in the future.

For the DRC, the pursuit for a thriving economy is well within reach given its endowment with vast natural resources that could enable it to be a contributor to Africa’s economic growth and global supply of raw materials such as copper. The DRC’s new government seems to be committed to exploiting these natural resources, as demonstrated through the several sector reforms that have already been implemented. The most impactful, both short and long term, being investment infrastructure development & renewable energy, amendments to mining and oil & gas legislation as well as its participation in the Extractive Industries Transparency Initiative.

In respect of infrastructure and energy, the DRC captured global attention with the world’s largest proposed hydropower scheme known as the Grand Inga project. A project that aimed to generate about 40,000 megawatts of power from water sourced at the mouth of the Congo River. This amount of energy can cater for a multitudinous size of the population in and beyond the borders of the DRC. Although this magnificent 6-phase project did not come to become reality, the country is fervently building synergies to improve its infrastructure and provide sustainable and stable energy supply for its citizens.

In May 2019, the DRC’s Ministry of Energy and Hydraulic Resources and the multinational clean energy company, Hanergy Thin Film Power Group signed a strategic partnership framework agreement for a 400MV solar power plant. The addition of 400MW onto the grid will go a long way with reducing the electricity scarcity that plagues parts of the country. The Ministry has communicated its commitment to meeting the country’s original target of 65% electrification by 2025. This of course will go a long way towards achieving the 2030 Sustainable Development Goals of universal access to electricity.

The DRC should be applauded for opting to sign a framework agreement which has the ability of creating an environment for parties to identify their common commercial goals. The benefits of framework agreements have been accepted by a number of seasoned lawyers. Duncan Wallace, a member of the UK bar, is of the view that framework agreements can be a commercial motivation for contractors to behave less opportunistically when additional projects, such as those that flow from traditional framework agreements, are on offer.

In July 2019, governments of the DRC, Burundi and Rwanda signed a project agreement for the construction of the Ruzizi III hydropower project. The proposed Build, Own, Operate, Transfer (BOOT) structure is beneficial to all countries as a large portion of the risk will sit with the concessionaire and minimizes the public cost and debt for infrastructure and energy development. Furthermore, this public-private partnership, if executed successfully, will undoubtedly improve the lives of millions in the three countries. 

In addition to the developments in respect of renewable energy, the country has made stride in the infrastructure sector,  with the new 34-km road which directly links the Kamoa-Kakula copper project, a mining project in the DRC and the Kolwezi airport in Zambia. The completed project will enable the unrestricted flow of trade between the two countries as it will be used to bring in mining equipment & construction materials as well as to transport copper concentrates. Given the African Union’s launch of the “operational phase” of the African Continental Free Trade Area, the economic benefits of this  corridor are endless.

Although the DRC occupies the 184th place (of 190) in the World Bank’s Doing Business 2019 report, the country has made strides in achieving political stability and improve its governance to pave way for economic growth and energy and infrastructure development. And as a result, creating a conducive environment for foreign direct investment.

Koketso Lediga, Managing Director, Infra-Afrika Advisory

In Central Africa, A Revolutionary Driller Is Teaching Us A Lesson About Oil

By Mickael Vogel

Chad’s rigs count has been surprisingly high for a year now, in a country that produces only about 100,000 bopd. With seven rigs deployed on its territory since September 2018 accoridng to Baker Hughes GE, Chad counts more rigs than most African petroleum provinces.

It is more than Angola, sub-Saharan Africa’s second largest producer of oil. It is almost more than Congo, sub-Saharan Africa’s third largest producer. The list continues: it is more than Gabon, Cameroon, or even Equatorial Guinea.

The reason: Chad is drilling. In efforts to expand exploration and boost domestic production, the land-locked Central African nation is proving that focusing on basics is a recipe for success. Drilling efforts have translated in increased production and oil revenues, despite several industry setbacks.

The recovery of Chad’s economy and petroleum sector after the recent plunge in oil prices has indeed not been a smooth journey to say the least. Chad has Africa’s 10th largest proven oil reserves but its output has been slipping in recent years due to maturing fields and disruptions caused by the conflict with Boko Haram in the southwest.

Lower commodity prices added another layer of complexity to an already very intricate situation, and put the economy in jeopardy. Hopes brought by the renegotiation of the country’s debt with Glencore and the rebound in oil prices were short lived.

In 2019, both ExxonMobil, which produces a fourth of the country’s oil and Glencore, which represents about 9% of Chad’s production, announced their intention to sell their assets in the country.

But as two of its biggest operators prepared their exit, Chad welcomed new ones and did not loose focus on bringing out what former minister Me Béchir Madit had then called a “second golden age of oil between the end of 2019 and 2025.”

To ensure the growth of its industry, Chad launched the construction of the mini Rig-Rig refinery in 2017 to address crying domestic shortage of petroleum products, granted several new fields to the CNPCIC in the Bongor Basin, welcomed new operator United Hydrocarbons, and renegotiated its debt with commodity trading giant Glencore in 2018.

As oil prices started rebounding, good news came along. Taiwan’s Overseas Petroleum and Investment Corporation completed its exploitation platform and connection pipeline to the Komé centre, while Petrochad developed its Krim-Krim wells.

The Société des Hydrocarbures du Tchad (SHT), the country’s national oil company, also made progress on the development of its Sedigui field by signing a contract with a Sino-British consortium for the construction of a gas pipeline, gas treatment facility and gas terminal in Djarmaya.

In two months alone, between July 2018 and September 2018, rigs deployed in Chad went up from only one to seven, according to Baker Hughes GE. That’s a considerable jump in such a short time, while most of its neighbours were still dealing with a drilling syndrome.

For a year now, Chad has had more rigs deployed on its territory than most other African markets, revealing sustained drilling activity which has now translated in numbers. As drilling activity picked up, production increased, and so did revenues.

According to the latest reports of the Ministry of Finance and Budget, Chad’s oil production and oil revenues have witnessed considerable increase in 2019 so far. In the first quarter, oil revenues increased by over 64% compared to the same period last year, led by an increase in production by over 18%, most of it due to the CNPCIC, and thanks to a better foreign exchange rate.

The second quarter confirmed the trend. During this period, oil revenues increased by another 38.6% while oil production increased by 23%, again led by the CNPCIC which has witnessed a growth of production by over 45% this year so far.

Between January 2019 and June 2019, Chad produced 22,791,749 barrels. On a daily basis, that’s an average of 126,000 bopd, a very healthy figure for a state whose revenues come at 70% from oil exports.

Improved situation in Chad explains why the acquisition of ExxonMobil’s 40% stake in the Doba Basin has become a source of intense bidding and negotiations. It also explains why the country’s economic forecast are bright.

In 2019, the IMG predicts Chad’s economy to grow by 4.5%, well above the world’s average of 3.3%. When many African oil nations struggle with a slow recovery, Chad reminds us that a successful energy strategy is a no brainer, and drilling must be a part of it.

Mickael Vogel,

Director of Strategy, African Energy Chamber

Time To Make Energy Work For Africa

By Prince Arthur Eze

It is long past time that we made energy work for Africa. It is past time that Africa's natural resources benefited Africans; that every African had access to electricity; and that the wealth created by oil and gas would lead to the sustainable development of African economies.

Certainly, much needs to be done to make these dreams a reality, and the continent's top leaders in the energy industry will gather in Cape Town on October 9-11 in Africa Oil & Power 2019 to drive the conversation forward and #MakeEnergyWork.

Thankfully, success stories and opportunities abound.

The incredible story of Senegal, for example, stands as a roadmap on creating a transparent government; building the needed infrastructure to support future development; creating an attractive regulatory framework to bring in much-needed FID and new investment; and for using the oil and gas sector to spur new growth.

The country, led by H.E. Macky Sall, the President of the Republic of Senegal, has seen tremendous growth in the last decade, consistently ranking in the top ten fastest-growing economies in the world. Government reforms, led by Sall, have improved Senegal's image both domestically and abroad, encouraging a string of new investment in oil and gas, electricity, roads, fisheries and tourism.

The outlook for the country's oil and gas sector, led by Sall, is bullish, with two of the world's most-watched projects -- SNE oilfield and the Great Tortue/Ahmeyim gas project -- moving forward. Both are expected to start producing export revenues in the early 2020s.

H.E. Sall, winner of the prestigious "Africa Oil Man of the Year" award during the 2019 Africa Oil & Power conference, has certainly provided Africans with a strong example of leadership and cooperation. We are honored to recognize and support H.E. Sall's achievements and continued efforts at Africa Oil & Power.

At Atlas-Oranto, we are proud to be leading pioneers in the sustainable development of Africa's energy sector, ensuring growth in countries like South Sudan, where we are honored to operate Block B3; in Equatorial Guinea where we operate Block I and in Nigeria, where we operate OML109.

In total, Atlas-Oranto is active in 11 countries in Africa and we are committed to working with the governments and communities of these countries to ensure our operations meet the highest standards of energy development. In Equatorial Guinea, for example, we are currently investing $350 million into the country's gas monetization and backfill project.

At Atlas-Oranto -- Africa's largest privately-held, Africa-focused exploration and production group -- we have faith in Africans, and we invest heavily in frontier markets so that the continent as a whole can continue to grow.

We know first-hand what it takes to get new investments off the ground and how to grow small-to-medium enterprises. It takes boots on the ground, as well as understanding and coordination with our brothers and sisters around the world.

Indeed, with new investment opportunities on the horizon and a new drive to cooperate across borders, now is the time to spur this sustainable growth in Africa with energy as the catalyst.

At Africa Oil & Power 2019, many of these opportunities will be featured, including the ongoing licensing rounds in Equatorial Guinea and Angola; the launch of South Sudan licensing round; and more.

For three days, over 1,200 of Africa's foremost thought leaders, industry experts, private sector executives and government officials will gather together to discuss the incredible role of technology in Africa's energy sector; the rise of renewables; the incredible upstream opportunities from South Africa to Senegal and the need for cooperation.

Energy: Democratisation Of Innovation And What It Means For Africa

By Sabine Dall’Omo

Without technological constraints, more people from across Africa are free to innovate and create on the global stage; democratisation of energy is necessary to enable Africans to move into the digital age.

The term ‘Democratisation of Technology’ has become synonymous with the digital age. In a nutshell, it means that access to advanced technology is no longer the domain of a privileged few, but that more and more people are benefitting from access to smart technologies which is rapidly levelling the playing field of global innovation.

One of the deciding factors in who has access to this technology, is the distribution of energy. In order to ensure the equality of technology we first need to solve the problem of unreliable energy.

The concept that energy must come from one central source is inefficient and outdated. By decentralising energy and allowing people to generate and use energy as needed, you’re allowing people to take charge of their own prosperity.

In a continent like Africa, with the incredible opportunity for solar and wind generated energy, keeping energy centralised severely hampers the potential for economic growth.

Microgrids are an effective way to quickly and effectively diversify a centralised energy grid. By employing microgrids you not only take the strain off the central grid and lower your carbon footprint, you also create economic opportunities where people can sell off excess energy produced.

The Brooklyn Microgrid project is an excellent example of how clean energy can be turned into thriving micro-economies. In this case, LO3 Energy, a company based in New York US, working alongside Siemens have installed a solar-powered microgrid.

In addition to generating clean energy for its own use, the company also installed a blockchain enabled transactive energy platform. This means any unused energy can be sold, generating a new revenue stream.

The same system could be put in place in certain parts of Africa. A shop or building even in remote parts of the country, for example, could install a microgrid and sell off excess energy to surrounding businesses.

You could take it one step further and create a transparent energy retail environment where a resident in another part of the country, could choose to top-up their electricity directly from a microgrid supplier based elsewhere.

By diversifying energy through microgrid technology, we can very quickly create new income streams in disadvantaged areas while at the same time growing and stabilising access to energy. This, in turn, will kickstart real democratisation of energy. 

Our Siemens office in Midrand is equipped with a microgrid and now uses 50% less power off the central grid. The office has gone more than a year with uninterrupted power and has saved about 2 460 tons of CO2 since the system was opened (174 000 kWh per month).

Enabling democratisation of technology

Through energy comes wider access to communication and the ability to participate in global conversations through online connectivity. This in turn nurtures creativity, innovation and economic growth.

Traditionally, the journey from ‘idea’ to ‘successful product or business’ is a complicated process involving business cases, pitches for funding to build a prototype, raising capital investment for production and testing, wading through patent approvals and trademark law.

While many of these steps are still crucial once you have a working prototype, the democratisation of technology makes it easier for inventors and entrepreneurs to develop their ideas.

SME’s are vital economic drivers and making it easier for them to compete will benefit the economy as a whole.

Digital twinning is one example that streamlines the production process. A digital twin is a virtual representation of a physical product or process, used to understand and predict the physical counterpart’s performance characteristics. Digital twins are used throughout the product lifecycle to simulate, predict, and optimise the product and production system before investing in physical prototypes and assets.

This means innovators can test their products in the virtual world and refine it before ever needing to raise money for testing.

Real-life testing is still vital with most products, but with digital twinning you can get your product as close to perfect in the virtual world in order to save time and costs when it comes to the final real-life test phase.

In many ways this agility levels the playing field giving small, developing companies (and countries) the same opportunities as their bigger and more established counterparts.

Siemens also offers this technology free to universities. Students have access to a free version of the same easy-to-use software suite used by professionals. In addition to free software, we provide tutorials, webinars, online courses and certification to help them develop their skills.

Breaking down barriers

Through access to technology anyone, anywhere, has the opportunity to create a thriving business or economy. Across Africa it can play a large role in the empowerment of women and youth development.

One example is our Siemens Fabric campaign, which was set on the global stage, but all the fabric produced for the initiative was made by a small female-owned business situated in Alexandra, Gauteng. Legae Larona Sewing Cooperative in Alex now forms part of the Siemens Enterprise Development programme.

This is where you start seeing the results of the democratisation of technology – when an innovator from a small community in a developing nation has the same access to opportunity as those operating from high-tech offices in the first world.

It’s not yet a perfect system, but through the clever use of technology we can exponentially increase access to opportunity.

Sabine Dall’Omo is the CEO of Siemens Southern and Eastern Africa

EACOP Land Acquisition: Little Was From Refinery & CPF Projects

By Sandra Atusinguza

By nature, the East African Crude Oil Pipeline project (EACOP) is of a Trans boundary nature with cross boarder social and environmental impacts between Uganda and Tanzania however a lot of internal (Uganda) issues and concerns about the project have observed during AFIEGO’s contestant engagements with the projects affected persons in the EACOP corridors in Kikuube, Hoima, Kakumiro, Mubende, Sembabule, Mityana and other districts.

The communities have fears that loss of property especially land where the projects affected persons practice farming may put them at a risk of hunger, as it has been the practice as oil companies and sub-contractors state they are complying with international best practices and standards by issuing cut-off dates on PAP’s and take a lengthy period to fully compensate them.

Difficulties in reading and understanding assessment forms compiled in english language along the EACOP corridors yet most PAP’s are illiterate, just as the custom in similar projects in particular the refinery project; communities have not been able to properly understand what their property is worth after assessments due to language barriers.

There is limited information about the EACOP project areas, the information gap on project impacts & its related aspects such as on land & compensation processes. Information shared is simply about the maps/GPS display dates and venues, amount of land required but not the project potential impacts on the environment, social-cultural, economic and others to be impacted.

PAPs mishandled during land acquisition for the pipeline for instance the subcontractors did not access and refused to compensate crops affected by surveys in first phase of the project while conducting feasibility studies. The land acquisition and compensation process is characterized by secrecy, PAPs are not provided with copies of compensation rates alongside the assessment forms.

The EACOP project PAP’s have on several occasions been ambushed by land acquisition and compensation sub-contractors companies (New Plan and ICS) on behalf of Total E&P to sign on assessment forms, yet a lot of missing items on GPS/strip maps during public displays had been observed.

I would recommend that prior notices and a member of the district land board (the secretary or district vauler) a community leader such as local council chairperson to move along with sub - contractors undertaking compensation for oil and gas projects in different areas whenever they are to move in to communities.

As more land for related oil and gas infrastructure is being acquired, developers and governments’ regulatory frameworks and policies such as the Land Acquisition and Resettlement Framework for oil and gas projects should be comprehensively implemented alongside other laws and regulations on compensation and land acquisition

Multiple re-displacements by similar oil and gas projects PAP’s in different communities should be addressed by prior planning, marking and gazzetting areas most likely to be affected by any development infrastructures by key stakeholders( M           EMD, MLHUD, NPA and many more) so that people are not relocated in such areas, a case in point is some households refinery PAP’ government relocated to Kyakaboga in Buseruka sub county and are currently re-affected by feeder pipelines from Buliisa to the Refinery.

Finally information about the EACOP must be made public, and in the languages the communities understand best, NEMA recently called for public comments on the same project by 30th August 2019 and plans for the EACOP public hearings are in the pipeline thus directly and indirectly communities ought to understand what to submit and comment.

 

AFIEGO Field coordinator

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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