Monday, August 13, 2012

New drilling planned in Ethiopian concession - African Business Review

Tullow Oil Plc has signed an agreement with Ethiopian authorities to begin drilling operations in the South Omo Valley next January

 Sunset on the rift Valley

By Sheree Hanna..
Global oil and gas exploration company Tullow Oil Plc is to start drilling on the Ethiopian concession it has in South Omo Valley, Southern Regional State next January.
London-based Tullow has concession rights in 23 countries including three African counties, Ghana, Kenya and Uganda.  Drilling in the two neighbouring African countries has resulted in success with 1.1 billion barrels of oil discovered in Kenya in January.
Tullow has signed an agreement with Ethiopia’s Ministry of Mines for exploration f the South Omo Block through the Canada-based Africa Oil Plc.
It has already carried out scientific surveys on the Southern Omo bloc and is in the process of finalising its seismic data of the area sub-contracted to the Chinese BGP Geo Service Plc.

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While carrying out these tests, Tullow Oil Plc told Ethiopian officials of an oil reserve which is projected be much larger than either Kenya or Uganda and are confident there will be a discovery of oil within a year.
Sinkinesh Ejegu, Mininster of Mines (MoM) said: “We cross our fingers and pray for better results.”
It will be the first drillings in the Southern Omo Valley which is located on the Great Rift Valley of East Africa and is an area of interest for tourists because of its diversity of language and culture.
The Omo River runs through the valley before it joins Lake Turkana and the federal government is building one of the largest dams in the country with a power generation capacity of 1870mw.
Last month, Tullow reported an excellent first half citing increased production, sustained high commodity prices and the profit on the Uganda farm-down for its good results. Profit before tax rose by 48 percent.
Chief executive Aidan Heavey said: “Our exploration-led growth strategy continues to yield an exceptional success ratio and Tullow has, with the discovery of oil onshore Kenya, opened up a fourth new basin within five years.”
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Monday, August 6, 2012

If Meles goes too… The reported ill health of Ethiopia’s big man is jangling-The Economist the nerves

The reported ill health of Ethiopia’s big man is jangling the nerves

MELES ZENAWI, Ethiopia’s usually dynamic prime minister, has not been seen in public since mid-June. Regularly invited to grand gatherings such as those of the G8 and G20, he has often been deemed “the voice of Africa”. But he was notably absent earlier this month from a summit of the African Union in his own capital, Addis Ababa. His government added to the uncertainty by first denying that he was critically ill in a hospital in Belgium, then announcing that he was away on sick leave. When a weekly newspaper was about to publish an article on his health, the authorities stopped the presses.
What if Mr Meles goes for good? After 21 years at the helm, his sudden incapacity has forced the succession issue trickily into the open. For the moment it is not even clear whether his deputy, Hailemariam Desalegn, who is also foreign minister, is temporarily in charge. A former defence minister, Seeye Abraha, now a critic, says that Mr Meles, his college classmate, has created a system that is dangerously reliant on him. “He will be leaving very big boots that cannot be filled by anyone else.”
A graduate of Britain’s Open University, Mr Meles has been known for his wide reading, relatively austere habits, and the success of his development policy. Under his remit Ethiopia, one of the world’s poorest countries, has become a donor darling. Nearly $4 billion of aid pours in every year—most of it to good effect.
But he has also been criticised for the increasing harshness of his politics and for his vaunted experiment in “authoritarian development”. His government has accepted foreign aid, but he has ignored pleas to respect democracy and human rights, citing China as his model. Mr Meles has gambled that donors are keener to see good results from their money than to require proof of democratic behaviour. And the West has been grateful for Ethiopia’s service as a regional policeman in a turbulent neighbourhood. Mr Meles has let the Americans fire drones from Ethiopia. He has also sent his own troops into Sudan and against jihadists in Somalia.
Mr Meles’s economic record is hard to match. Ethiopia claims to have been growing by an average of 11% a year since 2004. Some World Bankers say those figures may be optimistic, but only slightly. A string of huge dams are being built to boost hydroelectric power fivefold by 2015. That should generate electricity for vast new farms spread over 3m hectares of arable land granted to foreign and local firms.
Environmentalists, however, say that the dams will make lakes in Kenya run dry. And human-rights groups say local people will be forcibly resettled. Mr Meles dismisses such complaints out of hand. Dissident or investigative journalists have been jailed or driven into exile. In July a prominent online journalist, Eskinder Nega, was sentenced to 18 years in prison.
Moreover, rapid economic growth has come at a price. The cost of living has soared. Inflation at one point last year was running at over 40% a year, though it has since come down. Food prices have quadrupled in the past 12 months. Graduates are finding it harder to get jobs. Wages lag far behind inflation. Some senior civil servants earn as little as $250 a month.
On paper, Mr Meles’s ruling Ethiopian People’s Revolutionary Democratic Front should weather a transition. It has all but one of the seats in Ethiopia’s parliament after sweeping the 2010 elections, officially with 99.6% of the vote. At the previous poll in 2005 the opposition took the capital and claimed to have won nationwide. The crackdown that followed left at least 200 people dead, 30,000 arrested, and opposition leaders in the dock for treason.
Since then the ruling party has expanded its membership from 300,000 to more than 4m out of a population of about 85m. With 85% of Ethiopians living in the countryside, everything from jobs and food aid to seeds and school places is in the party’s gift. State and party have been conflated.
Meanwhile Mr Meles, at 57, has promoted younger people, such as Mr Hailemariam, a water engineer with a degree from Finland. But power has still rested with a clutch of Mr Meles’s comrades from his home area of Tigray in northern Ethiopia, many of them once members of a Marxist-Leninist group that used to admire Albania’s long-serving Communist leader, the late Enver Hoxha. This hard core, including the army’s chief of staff, General Samora Younis, retains a “paranoid and secretive leadership style”, according to a former American ambassador to Ethiopia, David Shinn. Were Mr Meles to leave in a hurry, relations between the young modernisers and the powerful old guard might fray.
If the constitution was respected, parliament would pick a successor, probably Mr Hailemariam, whose southern origins might appease those who think Tigrayans have too much power. Officials say that Mr Meles had anyway intended to step down in 2015. Yet he was expected to remain in charge behind the scenes. In ruling circles the uncertainty is causing jitters.s'

Thursday, August 2, 2012

Ethiopia May Run Gas Fields Amid Dispute With China’s PetroTrans - Businessweek

Ethiopia’s government may develop gas fields in its eastern Somali region itself or with a partner while a contractual dispute with a Chinese oil and gas company is resolved, Mines Minister Sinknesh Ejigu said.
Five production-sharing agreements signed on July 22, 2011, with PetroTrans Co. for 10 blocks in the Ogaden area of the region, which include the Calub and Hilala fields with natural gas resources estimated at 4 trillion cubic feet, were canceled on July 1, Sinknesh said on July 31.
“The Ethiopian government is responsible for developing this,” she told reporters in the capital, Addis Ababa. “We can develop this. Let them go to arbitration and if we want -- we have the finance and the technical capability -- we can do it.” The government will also consider joint ventures and other options, she said.
Landlocked Ethiopia, Africa’s second-most populous nation, produces no oil or gas and is partly reliant on coffee and other agricultural exports for annual foreign-exchange earnings of around $3 billion. SouthWest Energy, based in the capital, said it hopes to strike crude in the Ogaden next year.
The exploration and development contracts with Hong Kong- based PetroTrans, which the government hoped would bring financing of as much as $5 billion, were revoked after repeated warnings about a lack of investment and activity, Sinknesh said.
“We were flexible because we thought this was a big company,” she said. “They were talking too much, they were saying they have money, but it was not found to be so.”

’No Breach’

In its termination notice, the ministry said PetroTrans failed to arrange a loan to be repaid from future revenue, the company said yesterday in an e-mailed statement attributed to its lawyer, Philip Hirschler.
“PetroTrans rejects the notice as invalid and denies that it is in breach of” agreements, Hirschler said. “PetroTrans has made considerable investments in connection with the petroleum production-sharing agreements, remains committed to this project and will continue to seek to resolve its differences with the Government of Ethiopia amicably.”
The concessions, including gas reserves discovered in the 1970s, were relinquished by Malaysia’s state-owned Petronas Nasional Bhd in October 2010.
PetroTrans fulfilled its obligations by analyzing data and signing contracts for surveying and drilling, and will take the dispute to arbitration in Geneva unless the decision is reversed, the company said in a July 12 letter to the ministry obtained by Bloomberg News. It has the right to sue any company that takes control of the blocks until settlement, according to the letter.

Sinopec, CNPC

The company said it approached state-owned China National Petroleum Corp. and China Petrochemical Corp. about working together in Ethiopia. It also “significantly advanced negotiations” for the construction of a pipeline to Djibouti and natural gas processing facilities at the neighboring country’s port, it said.
Lenders refused to fund the project citing “security concerns and sovereign financial credibility issues,” PetroTrans said in the document that was sent to the ministry.
The Ogaden National Liberation Front has fought a low-level insurgency in the area since 1984 seeking greater autonomy. In April 2007, the banned group attacked a site operated by China’s Zhongyuan Petroleum Exploration Bureau, killing nine Chinese workers and 65 Ethiopians.
The letter is “not relevant to the point of termination,” Sinknesh said in a phone interview today.
To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net
To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

Wednesday, July 4, 2012

Nicholas Kristof: Africa on the rise : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis


MASERU, Lesotho — Generations of Americans have learned to pity Africa. It's mainly seen as a quagmire of famine and genocide, a destination only for a sybaritic safari or a masochistic aid mission.

So here's another way to think of Africa: an economic dynamo. Is it time to prepare for the African tiger economy? Six of the world's 10 fastest-growing economies between 2001 and 2010 were in Africa, according to The Economist. The International Monetary Fund says that between 2011 and 2015, African countries will account for seven of the top 10 spots.
Africa isn't just a place for safaris or humanitarian aid. It's also a place to make money. Global companies are expanding in Africa; vast deposits of oil, gas and minerals are being discovered; and Goldman Sachs recently issued a report, "Africa's Turn," comparing business opportunities in Africa with those in China in the early 1990s.
I'm writing this column in Lesotho, a mountainous kingdom (it was snowing the day I arrived!) in southern Africa, on my annual win-a-trip journey. The winner this year, Jordan Schermerhorn, an engineering student at Rice University, and I visited garment factories that make clothing for U.S. stores. This country is Africa's biggest apparel exporter to America.
One set of factories we visited, belonging to the Nien Hsing Textile Co., a giant Taiwanese corporation, employs 10,000 people in Lesotho, making this its biggest operation in the world. Workers turn out blue jeans for Levi's and other U.S. companies, and Alan Han, a senior company official, said quality is comparable to that of factories in Asia.
While America may largely misperceive Africa as a disaster zone, China does get the promise on the continent. Everywhere you turn in Africa these days there are Chinese businesspeople seeking to invest in raw materials and agriculture. But U.S. businesses seem to be only beginning to wake up to the economic potential here.
Why does that matter? Because trade often benefits a country more than aid. I'm a strong supporter of foreign aid, but economic growth and jobs are ultimately the most sustainable way to raise living standards.
The U.S. Congress has badly bungled the picture this year by delaying renewal of a provision of the Africa Growth and Opportunity Act, or AGOA. This promotes trade by providing duty-free access to the U.S. market. It's one of the best aid programs you've never heard of — except that it isn't an aid program but an initiative to help Africa lift itself up and create jobs through exports.
Some 300,000 jobs in Africa have been created because of AGOA, according to the Brookings Institution, but, in the last few months, countless Africans have been laid off because of the delay in renewal. U.S. importers don't want to place orders unless they are sure that the provision will be renewed and the clothing can enter duty-free. In Lesotho alone, about 5,000 garment workers have lost their jobs because of this maddening congressional delay.
Granted, African countries themselves have botched trade because of corruption, onerous rules and uncompetitive minimum wages. The minimum wage for garment workers is about $37 per month in Bangladesh, compared with about $120 in Lesotho.
Or consider infuriating red tape. In Swaziland, it takes 12 procedures and 56 days to start a company, according to the World Bank's superb "Doing Business" report for 2012. In Niger, it takes 326 days to build a warehouse. In Senegal, it takes 43 procedures and more than two years to enforce a legal claim.
Some of the otherwise most impressive countries in Africa, like Rwanda, also undermine themselves with their political repression. Ethiopia's dictator, Meles Zenawi, is doing an excellent job of raising health and living standards, but he also presides over a security service that kills and rapes with impunity — and imprisons journalists who report on abuses. Last week, a sham trial in Ethiopia found one such brave journalist, Eskinder Nega, guilty of terrorism.
All in all, though, Africa is becoming more democratic, more technocratic and more market-friendly. Yet Americans are largely oblivious to the idea of Africa as a success story.
One of the problems with journalism is that we focus on disasters. We cover planes that crash, not those that take off. In Africa, that means we cover famine in Somalia and genocide in Sudan, terrorism in Nigeria and warlords in Congo. Those are important stories — deserving more attention, not less — but they can also leave a casual reader convinced that all of Africa is lurching between genocide and famine.
So that's why I decided to start this win-a-trip journey in a delightful country like Lesotho that just had a democratic change of power. Its streets are safe, and it is working on becoming one of the first countries in the world with an electric grid 100 percent reliant on renewable energy.
It's a symbol of an Africa that is rising.
Nicholas Kristof is a columnist for The New York Times.

Sunday, June 17, 2012

Australia based BHP Silent on Ethiopian Project

By Robb M. Stewart

BHP Billiton is staying tightlipped on speculation it has decided to exit from a potash development in Ethiopia, even as the mining behemoth is expected to seek approval from its board later this year for the massive Jansen project in Canada.

Joel Jackson, an analyst at BMO Capital Markets, said that according to local sources BHP is believed to have decided to withdraw from the potash project in the African country. The company is reportedly closing down the camp at the site and is in the process of auctioning off equipment, Mr. Jackson said in a research report.
The Melbourne-based company said it isn’t its policy to comment on the specifics of its exploration programs.

“In general, the location of our exploration programs will change over time as opportunities emerge and as exploration programs are completed or transitioned to another business within BHP Billiton,” spokeswoman Kelly Quirke said."

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Wednesday, June 13, 2012

Foreign Aid in the Horn of Africa Faces Austerity Ax -Ben Barber:

When very bright foreign aid experts on health, agriculture, logistics and education gathered at the 7th Aid and International Development Forum in Washington to talk about humanitarian aid in war, drought, earthquake and famine, they learned that we are in an age of austerity.
The global financial crisis has made foreign aid a target for budget cutters who often hear from voters "keep our aid money at home."
To get more bang for less buck, aid agencies such as the U.S. Agency for International Development (USAID) are cutting the number of costly Western aid workers sent overseas and instead hiring locals at a tenth the cost.
"Austerity will become an increasingly common part of our vocabulary as we talk about financing for development and humanitarian relief," said Patrick Fine, a senior U.S. aid official with the Millennium Challenge Corporation, in the keynote address to the June 6-7 forum.
"Iraq and Afghanistan that created billions of dollars worth of work for development and humanitarian aid organizations are winding down. I don't think we'll see anything like that again."
Fine served as USAID mission director in Afghanistan in 2004 when billions were spent on schools, midwives, agriculture, roads and clinics. He warned that by 2015, one third of U.S. foreign aid -- which stood at $27 billion this year -- will be delivered through developing country governments and aid workers.
"As a result, expect the environment to become even more competitive," Fine told the aid workers at the forum. "If you are looking for areas where you can make a contribution, come up with new cost-effective and workable approaches for monitoring work and evaluating impact."
Fine's warning underscored that deep cuts in jobs are coming.
Foreign aid from the U.S. and other donors reached an incredible peak in the past few years of $130 billion a year. That money employs millions of people from Western and from developing nations to deliver relief, save lives and improve living standards for hundreds of millions. But now the humanitarian industry is at a crossroads.
The impending aid cut was one of three powerful facts that leaped out of many hours I spent sitting on panels June 6 and 7 in Washington, and from chatting with providers of bullet proof jeeps, medical kits, efficient stoves, water purification systems and emergency tents and generators:
  • Despite knowing in 2010 that a famine was coming, the world wasted six months before shipping food to the Horn of Africa, letting perhaps 50,000 people die.
  • For the first time in history, more people now die of chronic diseases -- caused by obesity, smoking, alcohol and sedentary occupations -- than from infections and trauma. Prevention now can save more lives than medical treatment.
  • Although millions of dedicated aid workers live with the dust and danger of Sudan, Somalia and Afghanistan, the financial crisis is forcing aid mangers to cut back on costly Western aid teams and instead hire local people, train them and hope all goes well.
At one point it occurred to me that the three or four hundred experts and suppliers of tents and generators at the forum probably have saved hundreds of millions of lives over the years. No wonder so many young people today are taking courses in international development or interning and seeking jobs in the field -- they see greater satisfaction in helping others rather than amassing wealth.
Dr. Adam Koons, who has been delivering aid for decades for the U.S. Agency for International Development and other agencies, said aid workers feared being accused of "crying wolf" in 2010, when drought and famine was first predicted in Horn of Africa countries: Somalia, Ethiopia, Kenya, Djibouti and Uganda.
"We knew in 2010 and acted in 2011," said Koons, who now works with International Relief and Development (IRD), one the largest non-governmental organizations delivering American aid overseas.

"We were plagued by the CNN effect" he said, meaning that only when CNN broadcasts starving children does the U.S. government and other donors decide to send emergency aid.
"Lesson one is you can't wait for the media to get there because then it is too late," he said.
On a global health panel, I sat next to silver-haired Cecil Wilson, president of the American Medical Association and soon to serve as president of the World Medical Association, representing nine million doctors in more than 100 countries.
"Chronic illness is now the leading cause of death in rich and poor countries," said Dr. Wilson. Cancer, heart disease, diabetes, obesity, sedentary lifestyles and the aging population have replaced infection and trauma as leading causes of death, he said.
He predicted a sea change in medical investment, training and direction as the world medical profession focuses on prevention and promoting healthy lifestyles.
The aid industry includes great diversity, Fine said, such as "those whose primary motivation is to serve humanity and those focused on serving their shareholders; researchers and practitioners; young people moved by compassion and the desire to do good in the world and those who are driven by wanderlust and a desire for adventure."
"The evidence shows that critics who say money spent on development is money down a rat hole are dead wrong," Fine said. "We have seen momentous progress, both for nation states and individuals, in terms of more income, better health and increased opportunities."