Tuesday, August 28, 2012

Agriterra's oil interests in Ethiopia may hold 2.7 bln barrels gross - Proactiveinvestors (NA)


Agriterra's oil interests in Ethiopia may hold 2.7 bln barrels gross

3:49 am by Philip Whiterow
Agriterra's oil interests in Ethiopia may hold  2.7 bln barrels gross
Africa-focused agriculture firm Agriterra’s (LON:AGTA) legacy oil interests in Ethiopia may hold up to 2.7 bln barrels, according to the latest assessment.
Partner Africa Oil said the figure was a best case, gross unrisked estimate derived from an independent review of the South Omo block in Ethiopia.
Agriterra has a 20 per cent stake in South Omo with Africa Oil owning 30 per cent and Tullow Oil (LON:TLW) 50 per cent. 
Sabisa-1, the first well planned for the South Omo Block, is now targeted to be drilled by the end of 2012, following Tullow's rig contract negotiations in Ethiopia, which are nearing conclusion, Agriterra added. 
South Omo is situated within the Tertiary age East African Rift just north of Lake Turkana, one of the last great rift basins to be explored in East Africa, said the company.  
Tullow has already made a discovery on Block 10BB in Kenya, which is located within the same petroleum system as South Omo.  
Seismic and gravity data from Africa Oil show robust leads and prospects throughout the South Omo Project area, Agriterra said.
Chief executive Andrew Groves added the results combined with successful drilling in the same petroleum system confirmed the high prospectivity of the concession.
He added he was also “extremely excited about the prospect of the first well being drilled by the end of the year“.
He added that with the agricultural and ranching businesses going from strength to strength there is the potential for a “great value uplift” at Agriterra.

Friday, August 24, 2012

Daily Maverick - The legacy of Meles Zenawi: What might have been



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Never during the post-independence era, aside perhaps for Thabo Mbeki, had Africa seen a leader with the intellectual force and economic vision of Ethiopia’s Meles Zenawi. His model of development through state-driven infrastructure spend made his country the fastest-growing non-oil economy on the continent, and he was a master at playing the West off against China. Sadly, his autocratic tendencies will forever taint his legacy. Can Africa learn from his passing and get the balance right? 
In February this year, a few days after I’d written a news article for this website under the header “The AU summit: A rare ring of truth”, Janice Winter, a journalist with an Oxford degree in international development, decided to set me straight by penning a rebuttal entitled “Meles Zenawi: Where the truth lies”. Foolishly, I fired back the same week with a rebuttal to her rebuttal, cleverly (or so I thought) calling it “The Ethiopia of Ms Winter’s discontent”.
Now that Meles has passed—he died on Monday in a Brussels hospital at the age of 57—it’s only right that I come clean. And my confession is this: while I was aware back then that in highlighting the Ethiopian prime minister’s positive attributes I’d be under-emphasising his dark side, I had just returned from a trip to the country during which I’d conducted interviews and research on his economic policies (for a forthcoming book on China’s influence in Africa), and my impressions had been such that I considered the angle justified in a column of necessarily compromised length.
Beyond that, I felt my decision was buttressed by Joseph Stiglitz’s much-cited 2007 op-ed in the New York Times, wherein the Nobel-winning economist had applauded Ethiopia’s annual growth rate of 10%, attributing the remarkable incline to Meles alone. Although Stiglitz did refer in his piece to the “controversial” elections of 2005, conceding that Meles had jailed opposition members and journalists who’d demonstrated against the government, he went on to note that shortly after the incident 30 opposition members had been given amnesty and released.
Stiglitz also wrote the following: “Meles’s overthrow of Mengistu not only ended the Red Terror, but also centuries of domination by the Amharas. Power was devolved toward the regions, and a most unusual constitutional provision, giving regions rights to withdraw, ensured that the centre would not abuse its powers.”
Of course, as the weeks of follow-up research would show me, it had always been highly unlikely that this constitutional provision would be tested via a referendum—and indeed, not only did Meles die without putting the clause into practice, he routinely and defiantly abused the powers of “the centre”.
During his lifetime, in his speeches and papers, Meles may have praised the tenets of democracy and inclusive governance—he may have even called his economic model “democratic developmentalism”—but it was obvious from his actions that the man was not a democrat. Undeniably, his standard response to journalists who were critical of his regime was to imprison them, and his economy, although it had been somewhat liberalised, was anything but open. After all, to do big business in Meles’s Ethiopia, connections to his office were crucial, and foreign investors were shut out of most key sectors, including banking.
The most damning stain on Meles’s legacy, however, will remain the extent of his crackdown on those election demonstrations in 2005—a crackdown that Siglitz neglected to fully acknowledge in his New York Times piece. To be clear about the scale of it: at least 193 people were killed, thousands were arrested, and scores of opposition activists and journalists were detained without trial on spurious charges of treason.
As the editorial board of the Washington Post observed after the prime minister’s death this week: “Mr. Meles’s desire to protect his political ‘system’ grew more and more repressive. Under the guise of national security, the parliament passed legislation between 2007 and 2009 to stifle dissent. According to Amnesty International, an anti-terrorism law ‘effectively criminalises freedom of expression.’ The State Department’s 2011 human rights report notes that the government arrested more than 100 people between March and September, including opposition political figures, activists, journalists, and bloggers.”
So, as a journalist who’s supposed to believe in media freedom—and who knew, prior to visiting Ethiopia, that Meles had more journalists in prison than any African head of state—what was it that impressed me about the prime minister? How could I, according to Ms Winter and a number of incensed Ethiopian journalists-in-exile, have gotten him so wrong?
On one level, it has to be reiterated that Meles, despite his authoritarian bent, did do much good for his country. His intellectual force was legendary, and, according to the writer and Africanist Alex de Waal (currently executive director of the World Peace Foundation) and the Ethiopian diplomat Abdul Mohammed (chief of staff for the African Union High Level Implementation Panel on Sudan), in his very first press conference as prime minister he declared that he would consider his government a success if Ethiopians were able to eat three meals a day.
“All his national policies were framed around the conquest of poverty,” the duo wrote on Wednesday. “Unconvinced by the prescriptions of the IMF and the World Bank, he held back on accepting international loans until his conditions were met...  Throughout the next two decades, he was uniquely ready to engage in sustained debate with policy makers, diplomats and scholars from around the world.”
It was this commitment to the vision of Ethiopian and African development, a vision manifest in his 10% growth rate (as ratified by the IMF itself), that I witnessed first-hand during Meles’s speech at the inauguration of the new African Union headquarters in January. What intrigued me most were his scathing references, throughout the speech, to The Economist magazine. Known to be high on his reading list—Meles had both an MBA and a master’s degree in economics—he blamed the magazine for espousing the same market fundamentalist principles that had once crippled the economies of Africa.
First, citing the infamous “Hopeless Continent” cover line that ran in The Economist in 2000, Meles attributed the lost decades of the late twentieth century to failed African leaderships and the misdirected interventionist measures of the West. “We were given medicines,” he said, “that were worse than the disease.” Then, building up to the “Africa Rising” theme that ran in the magazine in 2011, he spoke of an unprecedented investment surge and “access to new powers of finance and growth.”
As was typical of Meles, the speech was profound and engaging, a rousing monologue peppered with his trademark dry wit, and its message was as strong as it was unambiguous: Africa, for the first time in almost 50 years, was beginning to make its own decisions.
But given the presence behind him on the stage of China’s senior political adviser Jia Qinglin—and taking into account the $200 million Chinese donation that had just paid for these new AU headquarters—there was an even more significant cover line to mark the hypothesis, and it was by a quirk of fate the one that appeared in The Economist of that very week. “The rise of state capitalism,” the magazine declared, from the front page of its 21 January 2012 edition.
The corresponding text, which argued that China no longer viewed state-directed companies as a means to the end of liberal capitalism but rather as an end in themselves, noted that a growing number of developing nations were beginning to agree with the policymakers in Beijing. What the report didn’t note was that Ethiopia, with an economy growing even faster than China’s, had long been one of them.
In February 2012, the opening of a $600-million cement factory underlined in a profound way Meles’s partiality to the Chinese model of growth through infrastructural spend. Located 70 km northwest of Addis Ababa, the factory has a yearly capacity of 2.5 million metric tons and is funded by, amongst others, Saudi Arabian/Ethiopian billionaire Sheikh Mohammed al-Amoudi, the European Investment Bank, the African Development Bank, the Development Bank of Ethiopia, and the International Finance Corporation. Built by China National Building Materials Co., the project is an archetypal Meles initiative—a meeting of West and East in a context that is distinctly African.
And this brings up the second reason that I couldn’t help but admire the man. Often referred to as Africa’s wiliest head of state, Meles became an adept at playing the West off against China. The former needed him as a stabilising force in a region routinely rendered volatile by Somalia and Sudan, and the latter saw in him a likeminded “strong man”—a supreme leader of an effective one-party state (in the 2010 elections, Meles’s party, the EPRDF, took 99.6% of the vote)—with whom they could do some very good business.
The $4 billion that Meles received in development aid each year was a direct result of this political nous, and was linked, many said, to his country being constantly named as the fastest-growing non-oil economy on the continent. Question was, did his brand of donor-driven industrial development translate into disposable income for ordinary Ethiopians?
With a population of 85 million and a projected national income of $38.5 billion, Ethiopia is still one of the poorest countries in the world. Rampant inflation was always going to be the principal side-effect of Meles’s infrastructure projects—it had been running for a while at around 50%, although in March 2012 dropped to a nine-month low of 32.5%. In Addis Ababa, while the populace can now commute on highways built by Chinese contractors with Chinese loans, the bulk still live in tin shantytowns, and the cost of living leaves little prospect for upward mobility.
Perhaps understandably, Ethiopia’s many political exiles cited such statistics to pop the myth of Meles’s genius. And yet, within the country, there existed a genuine respect for the leader—if not exactly “love”. On Tuesday, I was moved by a posting on Facebook of a young man named Hallelujah Lulie, who, when I spoke to him in his office at the Institute for Security Studies in Addis, had been eloquent and forthright on the subject of Meles’s autocratic methods.
“Meles is no more,” wrote Hallelujah, “but the radical transformation he made to the state, citizenship and polity will continue to define the political and public life of the nation for decades to come. He was a visionary and competent leader who stood up against injustice as a young man, unfortunately his democracy and justice project failed. He and his government made some stubborn decisions with lasting consequences. Meles was no democrat, but he surely raised the bar for the top post. Though imposed, the economic vision he had for the nation changed the country and has [the] power to transform the nation. I can’t hide my sadness and shock.”
A photograph a few lines above the post showed Meles in deep conversation, in the main hall of the new AU headquarters in January, with none other than Thabo Mbeki. Hallelujah’s caption? “This was the last time I saw Meles, conversing with his dear friend of [the] same calibre…”
Another case, unfortunately, of what might have been. DM
Read more:
  • “On the Ground: Joseph Stiglitz in Ethiopia,” in the NYT
  • “The unfulfilled promise of Meles Zenawi,” in the Washington Post
  • “Meles Zenawi and Ethiopia’s Grand Experiment,” in the New York Times
  •  KEVIN BLOOM

Kevin Bloom has written for a wide array of South African and international publications, including Granta, the UK Times and the Guardian, and is an Honorary Writing Fellow at the University of Iowa, having completed the fall residency of the International Writing Program in 2011. Kevin’s first book, Ways of Staying, won the 2010 South African Literary Award for literary journalism, and was shortlisted for the Alan Paton Award. He is currently working on a book about a changing Africa.



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