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Geopolitics / Africa

  • Nigerian Company to Sue Total, Samsung

    An indigenous Nigerian oil company is suing major foreign players for allegedly plotting to exclude the local company from a $3.8 billion floating production vessel that was intended to be a local component of the project. Lagos Deep Offshore Logistics (LADOL) is taking Korea’s Samsung Heavy Industries, Total Upstream Nigeria Limited, the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Ministry of Petroleum Resources before a federal high court over the issue. LADOL accuses the parties of plotting to keep it from engaging in the local component of the $3.8 billion Egina Floating Production Storage Offshore (FPSO) vessel.…

  • Algeria: The Dynamic Threat

    Algeria is the largest and most powerful nation in the Sahara region, and the third-largest producer of natural gas in the world. Now officials at state-run Sonatrach are saying that oil and gas production should increase in the next five years, reversing a decline.As investors contemplate new ventures in Algeria, they must also consider the growing security threats spilling over its borders: threats that could make the January 2013 Amenas hostage crisis pale by comparison.Though Algeria has one of the largest and most powerful military forces in all of Africa, security forces are challenged now by the increasing momentum of…

  • Africa Energy Advisory

    In this week’s Africa energy advisory we look at some key regulatory changes that will affect oil and gas exploration and production in emerging gas venues Tanzania and Mozambique, and East African emerging oil giant Angola. Tanzania—Regulatory CautionInvestors and potential investors should be aware of the following regulatory developments in Tanzania’s gas industry as the country adapts to its new discoveries and attempts to handle gas differently than it handled mining—on trend with other African countries:•    We are concerned about the regulatory trends in emerging gas player Tanzania, where a political debate regarding the scale of involvement of local companies…

  • South Sudan not Ready for Oil Prime Time

    South Sudanese President Salva Kiir accused his former vice president of launching a coup earlier this week, sending the world's newest nation into political turmoil. Rocked by conflict last year over oil-rich areas along a shared border with Sudan, the latest troubles could undermine economic hopes for a troubled region. Former Vice President Riek Machar said recent political conflicts in Juba, the nation's capital, weren't the result of a coup but part of a "misunderstanding" between presidential guards. Machar was sidelined in a Cabinet shakeup earlier this year. Related article: Emerging Oil Giant Kenya Gets Major Infrastructure Boost from ChinaMore than 500…

  • Emerging Oil Giant Kenya Gets Major Infrastructure Boost from China

    Bottom Line: Rushing to get some massive infrastructure projects off the ground as oil discoveries move towards commercial production in Kenya, the Chinese launch a landmark multi-country railway project to compliment the port expansion at Mombasa. Recommendation: This massive rail project—funded by Chinese soft power—will dramatically increase Kenya’s trade prospects and secure its position as a regional hub and economic powerhouse. Investment will respond in kind. Analysis: The Chinese have officially begun construction on a $13.8-billion railway project that will connect the port of Mombasa, which is being expanded, and the capital city of Nairobi, and eventually possibly even link…

  • Weak Central African Republic Collapses

    Bottom Line: The situation on the ground in the Central African Republic (CAR) has deteriorated to the extent that we can talk about another failed African state, and the descent into chaos continues on the downward spiral as deadly clashes and massacres surge unabated.Recommendation: The situation began to spiral out of control in June, several months after the coup, and is now reaching a climax that will see either direct international intervention or another failed state in Africa. There can be no progress at this point without the creation of minimal security conditions which can only be accomplished by international…

  • Libyan Finances Squeezed as Protesters Continue To Plague Oil Industry

    Protests aimed at Libya’s oil sector have cost the country more than $7 billion since they began this past summer, according to statements by Oil Minister Abdelbari al-Arusi on Saturday. Production has fallen to between 225,000 and 250,000 barrels per day, down from 1.4 million barrels per day in July, with half going to feed the Zawiya refinery for domestic consumption. This leaves a mere 130,000 barrels per day for export, putting significant pressure on the country’s finances. The government is having trouble drafting its 2014 budget because of this unpredictability and the significant drop in oil revenue. Due to…

  • Critical New Year for Egypt

    Bottom Line: The completion of Egypt’s constitution and a planned referendum in early January will determine the security situation for 2014, and tensions will be acutely high for the next month and a half.Recommendation: We are raising the security risk ranking for Egypt through January due to an expected uptick in violence during the run-up to a referendum on the constitution, which will likely strengthen the role of the military and weaken Islamist freedoms drastically. While the trial of deposed president Mohammed Morsi and 14 others has been postponed until 8 January, this will not be enough to appease Islamist…

  • Smart Energy Investors Will Watch Ivorian, Ghanaian Border

    The government in Ivory Coast said it was ready to resolve maritime border disputes with Ghana, a move that could open the door to a West African offshore oil and gas bonanza. "Ivory Coast has set up a commission to work on the subject," Ivorian government spokesman Bruno Kone said. "[By] June 2014, our two countries, Ghana and Ivory Coast, will be able to find a definitive solution to this dispute." Ivory Coast experienced two civil wars since 2002. With national reconciliation within reach, however, the world's No. 1 cocoa producer saw its economy grow by nearly 10 percent last year. Now,…

  • Breathing Life into Egypt’s Dying Energy Sector

    When Egyptian strongman Hosni Mubarak was taken down in the 2011 revolution, the energy sector went with him. Since then, it has been a long stream of bad news for the sector and its foreign investors, most of whom had to withdraw non-essential personnel in the violent aftermath of the 2 July 2013 coup that overthrew yet another leader, the Muslim Brotherhood’s Mohamed Morsi.Now, with the energy sector pretty much out of control, domestic demand on the rise with shortfalls threatening further stability, foreign reserves plummeting and $6 billion in arrears owned to foreign investors, the interim military-backed government is…