Gas distribution network in Maputo almost complete

Mozambique Oil & Gas: Gas distribution network in Maputo almost complete

Posted by Mozambique Resources Post on March 11, 2015

Posted in: Mozambique Oil and Gas Industry. Tagged: ENH, KOGAS, Maputo Gas Network. Leave a comment

Gas distribution network in Maputo

The construction of a gas distribution network in Maputo and Marracuene, southern Mozambique, is almost finished, the consortium of national oil company ENH and Kogas said Tuesday in Maputo. “Thirteen kilometres of the gas pipeline have already been built, corresponding to a degree of implementation of 89 percent and the remaining work will be completed this month, if no unforeseen technical or weather situations occur,” the consortium said in a statement.

The work, which began in December 2014, is included in the second phase of the Maputo and Marracuene gas distribution project and is intended to install a 14.6 km pipeline from Zimpeto, outside the Mozambican capital, to the village of Marracuene.

In the first phase, the consortium, owned by Mozambican company ENH and South Korea’s Kogas, built a 62-kilometre network, a project estimated to cost more than 35 million euros, which is already in operation.

In 2009, the Mozambican government awarded a concession to ENH to sell and distribute gas in the city of Maputo and district of Marracuene and the Mozambican state invited the Kogas to form the consortium responsible for the project, which was eventually funded by South Korea. (macauhub/MZ)

Analysts call for investigation into charges ENI and Guebuza

ON DW Africa: Analysts call for investigation into charges ENI and Guebuza

Posted by Mozambique Resources Post on March 17, 2015

Posted in: Mozambique Oil and Gas Industry. Tagged: Bribe, Corruption, Eni, rovuma basin. Leave a comment

The Deepwater Millennium drillship works on an Anadarko Petroleum Corp. project in the Rovuma Basin off the coast of Mozambique.

A suspected case of corruption and influence peddling involving the Italian oil giant ENI and the former Mozambican President Armando Guebuza is shaking Maputo. It is expected that the PGR open an investigation to ascertain the veracity of the case as reported by DW Africa.

Since February that Mozambican publications Canalmoz and Savana are reporting on the case, using as source the newspaper “Il Fatto Quotidiano”. According to the Italian daily, former President Armando Guebuza have offered to ENI oil company, a tax exemption on the sale of their shares to the China National Petroleum Corporation (CNPC) in exchange for unspecified favors. The deal will not have been treated directly with the Mozambican state, through the Mozambique Tax Authority, as is supposed, but with the former head of state.

The revelations came as a result of an investigation into international corruption against Paolo Scaroni, former manager of the Italian oil company, carried out by Milan prosecutors. According to telephone recordings in the power of Italian PGR, Guebuza has yet offered a heavenly land in Bilene, in southern Mozambique, “with the possibility of a DUAT (Right to Use and Land Utilization) valid for 40 years.”

Eyes are now turned to the Prosecutor General’s Office (PGR) in Mozambique. Ericino of Salema, a lawyer and journalist, author of the article on the subject in Savan weekly, says there is sufficient evidence to the PGR starts investigating the case. “The company, the former head of state himself and, to some extent, the Tax Authority will have something to say.”

Clarification is in everyone’s interest
The journalist also said that, under the United Nations Convention against Corruption, ratified by Mozambique in 2006, it is possible that the Offices of the two countries to work together to clarify the deal – the Mozambican counterpart express interest.

“If requested, the Attorney General’s Milan Republic has a duty to provide all relevant information,” says Ericino of Salema.
“The former head of state, like any citizen, enjoys the presumption of innocence. But because it was the highest magistrate of the nation, is in our interest as Mozambicans, and also of his interest, to clarify what is said. ”

Will the Prosecutor investigate this case?
Borges Nhamire, a researcher at the Center for Public Integrity (CIP), points out that so far there is no solid data confirming the involvement of Guebuza in this case. However, we need to investigate.

DW Africa tried to contact the Mozambican Attorney, unsuccessfully, to know whether to open an investigation.
Nhamire says you can not stand idly by waiting for the PGR investigate accusations.

“In all major cases involving influential people in politics and economics, the prosecution has not brought the expected results.” Nhamire gives the example of “case involving the citizen Momade Bachir Sulemane, who was charged from the outside to be involved in drug trafficking. The Attorney investigated but the results are not very convincing.”

In Mozambique, the credibility of the justice organs is very low. It is considered inefficient and partial. Its leaders are appointed by the President.

Therefore, in the case involving Armando Guebuza and ENI, once again, the CIP researcher does not expect “compelling results for Mozambicans.” Borges Nhamiri believes that “civil society should carry out its parallel investigation.”

Attorney General appointed by former president
The current Attorney General’s Office, Beatriz Muchili, was appointed by President Armando Guebuza. This can not influence the opening of an investigation into former President?

“This point is central,” says the lawyer and journalist Ericino of Salema. “When we are appointed to a function of these, there are some political trust involved. Nothing can move without the Attorney General’s Office authorizes the Central Office for Combating Corruption to proceed with any investigation. But I hope that her performance may be professional, in the interests of the Mozambican state.”

According to the Mozambican press, the state will have lost $ 900 million in the transaction between ENI and the Chinese company CNPC. The total value of the transaction was 4.2 billion USD. The State should have embedded 1.3 billion, but only got 400 million.(DW)

El gran desafío de Mozambique

La inestabilidad política amenaza el futuro petrolero del país africano

FERNANDO BARCIELA 29 MAR 2015 - 00:00 CET

La Baixa, mercado municipal de Maputo (Mozambique). / GUIZIOU FRANCK

Dicen los que van a Maputo, la capital de Mozambique, que la ciudad está que no se la reconoce. Donde hace 10 años solo había calles destrozadas, edificios despintados y tiendas cerradas, se multiplican los hoteles de lujo, los edificios corporativos, las urbanizaciones exclusivas, los restaurantes gourmet y tiendas como las de Hugo Boss. El país vive en un estado de euforia, generado por las enormes posibilidades que se le están abriendo con el descubrimiento de enormes yacimientos de gas y crudo, que empezarán a exportarse ya en 2019.

Tan fuertes son las expectativas que el presidente del luso BCP Millennium Bank, dueño del mayor banco de Mozambique, dijo hace días que "las posibilidades son infinitas". Así que, si bien sigue siendo uno de los países más pobres del mundo, Mozambique tiene todas las cartas en la mano para dejar de serlo dentro de poco: el único problema es que, para culminar esa migración hacía la prosperidad, tendrá que mantener la estabilidad política de la que ha hecho gala en los últimos 20 años, y que empezó a resquebrajarse en 2013.

De momento los expertos ven al país como uno de los mayores casos de éxito de África. Incluso antes de que emergieran todos esos manás de gas y petróleo, ha estado creciendo en torno a tasas del 8% en lo que va de siglo. Entre 2006 y 2013 dobló el tamaño de su economía, desde los 7.096 a los 15.630 millones de dólares, igual que su renta per cápita, que pasó de los 670 a los 1.100 dólares. Para 2015 se prevé que el PIB crezca un 7,5%. Parte de ese dinamismo se debe a la subida de las exportaciones de carbón (es uno de los grandes productores del mundo), a la construcción y a los proyectos de infraestructuras en marcha.

MÁS INFORMACIÓN

• El Frelimo gana en Mozambique
• La comunidad internacional, preocupada por la tensión en Mozambique
• Mozambique, salud y revolución
• Mozambique ofrece a España alianzas empresariales con el petróleo y el gas

Pese al crecimiento, el país sigue siendo pobre y apenas ha cambiado su configuración social y económica. El principio de abundancia que se nota en Maputo está totalmente ausente en las zonas rurales, donde sigue viviendo la mayor parte de la población, normalmente en un régimen de subsistencia. El país sigue a la cola del Índice de Desarrollo Humano de la ONU, asolado por catástrofes que no tendrían tanto impacto de contar con los equipamientos necesarios, como las inundaciones del año pasado, que desplazaron a miles de personas, o la epidemia de cólera que afecta a 5.000 personas. Además, el modelo de desarrollo centrado en los minerales y los hidrocarburos no ha tenido impacto sobre la población, ya que genera muy escaso empleo. Para remediarlo, el Gobierno quiere promover industrias intensivas y modernizar la agricultura, que sigue empleando al 70% de los mozambiqueños. Para eso necesita mejorar el sistema educativo con el fin de salvar la notoria falta de preparación de la mayoría de los ciudadanos.

Se prevé, sin embargo, que todo cambiará al final con la explotación de gas y el crudo, que ascenderá al país al club de los países emergentes y doblará su PIB en cuatro o cinco años para colocarse en 2025, según el Banco Mundial, en el grupo de los países de ingresos medios. Se espera que las reservas conocidas de gas, en la cuenca del Rovuma, en la frontera con Tanzania, conviertan a Mozambique en uno de los 10 primeros productores y tercer exportador mundial. La puesta en marcha de las tareas de exploración le exigirá al país africano la adecuación de sus infraestructuras, ahora casi inexistentes. Se calcula que Mozambique invertirá 40.000 millones de dólares en el próximo decenio para modernizar sus carreteras, puertos y aeropuertos.

Maputo anunció recientemente la pavimentación, en el marco de su plan 2015-2019, de unos 2.100 kilómetros de carreteras y la reparación de otros 2.800 kilómetros. El país está invirtiendo también en centrales eléctricas y redes de distribución de gas y electricidad, un total de 3.240 millones de dólares el año pasado. Está construyendo cinco nuevas presas hidroeléctricas y ampliando la gigantesca central de Cahora Bassa: un total de 3.600 megavatios (más que la potencia instalada actual) y una inversión de 7.000 millones de dólares. Esta apuesta era necesaria ya que en los últimos años el consumo de electricidad ha crecido a un ritmo del 80% anual. Además, el 70% de la electricidad producida en Cahora Bassa se exporta a Zambia y Sudáfrica.

Estos proyectos están provocando la llegada de ríos de dinero. En 2013 Mozambique (con 25 millones de habitantes) recibió 4.800 millones de dólares en inversión directa exterior, más que Nigeria (siete veces más poblada), que recibió 4.600 millones. La mayor parte de estos proyectos están siendo financiados por organismos internacionales o por empresas, en el caso de la exploración de materias primas o las infraestructuras. Un tercio del presupuesto público de Mozambique, según The Economist, es cubierto por organismos internacionales como el Banco Mundial, que aportará este año cerca de 200 millones de dólares para que el Gobierno de Filipe Niusi —en el poder desde 2014— pueda hacer frente a sus gastos.

Pero el mayor desafío que tiene que vencer el país es el de la estabilidad política. Durante 20 años, Mozambique se ha beneficiado de cierta armonía entre los dos principales partidos. Pese a que el Frelimo (en el poder) y la Renamo (en la oposición) se enfrascaron en una guerra civil de 15 años (1977-1992), han sido capaces de convivir tras la firma del acuerdo de paz en 1994, basado en un reparto en las tareas de Gobierno.

Pero la eclosión del gas y el crudo en la economía ha hecho que la Renamo sienta que ha sido marginada de los beneficios y amenace con un rebrote de la guerra civil. El país vive ahora en un cierto compás de espera. La Renamo quiere la autonomía de las provincias del norte (Manica, Sofala, Tete, Zambezia, Nampula y Niassa), donde están las reservas de gas y la mayor parte de su electorado.

La caída de los precios de los hidrocarburos no ayuda a la evolución de la situación política. Las firmas energéticas están más cautelosas con los nuevos proyectos y exigen mejores condiciones. Los dos últimos procesos de adjudicación no tuvieron éxito. Sin embargo, los que están en marcha siguen y producirán mucha riqueza. Nadie cree que la sangre vaya a llegar al río. La llegada de un tercer partido, MDM (Movimiento Democrático de Mozambique), dificultará la hegemonía del Frelimo y le obligará a buscar acuerdos. Los inversores siguen llegando.

New dams add 3,600 megawatts of power production in Mozambique

MARCH 25TH, 2015    HOME

Construction of five new hydroelectric dams in Mozambique and the expansion of the Cahora Bassa facility will increase the potential of the country’s energy production by around 3,600 megawatts, involving investments of over US$7 billion.

Power consumption in Mozambique is increasing by an average annual rate of 82 megawatts (about 14 percent), according to the Ministry of Planning and Development (MPD), and expansion of the energy sector is one of Mozambique’s greatest economic challenges, given the growing industrial requirements across the country.

It is in this context that in the Government 2015-20019 Five-Year Plan, which will be voted by the Mozambican parliament from the beginning of April, the government noted the priority of developing various power generation projects, some of which have already secured investors and funding.

This is the case of the Lupata Hydroelectric Facility, in Tete province, with a potential to generate 416 megawatts, which will require an investment of about US$1.072 billion, implemented by a consortium of companies including Hydroparts Holding and Cazembe Holding, both registered in Mauritius, and state power company EdM and Sonipal of Mozambique.

Also in Tete province and along the Zambezi River, the Boroma Hydroelectric Dam will have an installed capacity of 210 megawatts, and will be carried out by Rutland Holding, of Mauritius, EdM and Sonigal, which will need to invest US$572.5 million in the project.

Added together, the two projects are likely to create more than 4,000 jobs, according to the Mozambique Centre for Investment Promotion, through which the investments were made in 2014.

The guidelines for government policy also give priority to starting construction of the Mphanda Nkuwa dam, about 70 kilometres northeast of the city of Tete and 61 kilometres southeast of the Cahora Bassa dam, a project with a generation potential of 1,500 megawatts, which has an estimated cost of US$4.2 billion.

Already awarded to Camargo Corrêa (40 percent), of Brazil, Insitec (40 percent) of Mozambique, and EdM (20 percent), the dam should be completed in 2017, according to the Integrated Programme of Investments of the MPD, revised in June 2014.

In this document, the MPD also outlined the construction of the Lúrio Hydroelectric Plant in Nampula, citing a generating capacity of 180 megawatts and an investment cost of about US$480 million, but for now, the project has no known investors .

The situation is similar with the Alto Malema Hydroelectric dam, also in Nampula province, with a potential to generate 60 megawatts, which is included in the five-year government programme.

The government has also noted the progress of the second phase of Cahora Bassa (HCB), the project also called Cahora Bassa Norte, construction of which will increase in the power generation capacity of the project by 1,250 megawatts, from 2,075 megawatts at the moment.

The project is estimated to cost about US$700 million, according to estimates from the MPD.

HCB’s shareholder structure includes the Mozambican state with a 92.5 percent stake, while Portuguese power grid company REN, which itself is 25 percent owned by the State Grid Corporation of China (SGCC), owns the remaining share of 7.5 percent.

Mozambique currently has a production capacity of about 2,300 megawatts of power an HCB is the facility that produces the largest amount of electricity in the country.

Much of the dam’s production (about 75 percent) is exported, particularly to Zimbabwe and South Africa, a country whose national power company Eskom, has an agreement with HCB for the annual purchase of 1,100 megawatts, valid until 2029. (macauhub/MZ)

Five countries most affected by the oil price crash

FROM OILPRICE.COM: Five countries most affected by the oil price crash

Posted by Mozambique Resources Post on March 13, 2015

Posted in: Mozambique Oil and Gas Industry. Tagged: Nigeria, oil price, Venezuela. Leave a comment

Globl Oil and Gas Industry

Since June 2014, global oil prices have dropped by more than 50%. The drop could strongly affect the economic and political stability of these five oil exporting countries.

Oil prices make winners and losers. In general, oil importers will gain from low prices, while most oil exporters will suffer. Still, there are differences. While the United States, Norway, and the Gulf States can protect themselves with diversified economies and high hard currency reserves, the oil shock could bring some countries to the verge of economic default and political crisis.

Venezuela

Venezuela entered the period of low oil prices with an already frail economy ruined by the more than a decade-long socialist regime of Hugo Chavez and his successor Eduardo Maduro. The oil price slump significantly worsened the country’s already failing economy.

More than 90 percent of Venezuela’s exports and hard currency reserves depend on oil, and with the price of oil 50 percent down, the country is close to a default.

Standard & Poor’s is the last in a line of rating agencies that downgraded Venezuela’s credit rating to junk status and the country’s currency is experiencing a constant devaluation trend. At the same time, the inflation is expected to rise to 200 percent this year and the economy to shrink by 7 percent.

Consequently, the Maduro government is forced to cut subsidies introduced by the Chavez regime, and to liberalize the economy in accordance with the global realities in the oil markets, which could not only cause strong economic shocks and public outcry, but also trigger a swift regime change.

Nigeria

Africa’s largest economy is under increased pressure after the sudden drop in oil prices in the last eight months. This is the second blow for one of the continent’s largest oil exporter’s after the shale boom virtually brought to a halt its oil exports to the United States.

The country’s budget breakeven price of oil for 2015 is $122, according to Deutsche Bank estimates. Moreover, oil exports constitute more than 70 percent of Nigeria’s budget income and 90 percent of its foreign exchange.

As a result, the Nigerian naira has lost the fifth of its value against the US dollar since June 2014. In addition, security instability caused by the Boko Haram campaign in the predominantly Muslim-populated north of the country and the political turmoil ahead of the presidential elections exposebitter divisions along the ethnic and regional lines that could further destabilize the country.

Iraq

Iraq is particularly affected by the oil prices slump, as the country is struggling to bring its oil production to pre-war levels, rebuild the war-torn country and wage a new war against the Islamic State.

The country’s finances depend exclusively on oil exports, and oil price volatility strongly affects its economy. At the moment, Iraq is effectively increasing its oil production in order to offset the slump in oil prices.

The country’s oil production currently stands at around 4 million barrels per day, and is expected to rise by additional 550,000 barrels. However, despite the recent budget revision tailored to a $56 per barrel price, the fiscal deficit for 2015 is still forecast at $22 billion.

Following the improvement in relations between Baghdad and the Kurdish autonomous region, along with the improved situation since the removal of Prime Minister Nouri al-Maliki last August, the political and security situation has made a significant turn for the better in recent months.

Nonetheless, the fight against ISIS, which holds great swaths of Northern Iraq, and continuous friction between Iraq’s political factions is draining the country’s finances and threatening its political stability.

Russia

Russia is a politically stable country and the Putin regime enjoys unprecedented levels of public support. The country’s hard currency reserves are at high levels and the Russian oil industry is more resilient to oil prices volatility compared to its international peers. Thus, Russia will not see major political upheavals in the short term.

On the other hand, the oil shock and Western sanctions have hit the Russian economy and itsconsumers hard. The country’s economy has been under strong pressure since the introduction of sanctions almost a year ago, and the oil price drop only added to the pain, as the Russian 2015-2017 budget draft is based on the $100 per barrel price.

The inflation is currently at 17 percent, the rouble slumped by 44 percent in the past 12 months, and the economy is expected to shrink by 3 percent in 2015, according to an IMF forecast.

In the long run, with Russia expected to continue to wage war in Ukraine and consequently suffer from an additional set of Western sanctions, along with a prolonged period of low oil prices, both the economic and political situation in the country might deteriorate.

Iran

Iran has been a major victim of both the ban on oil exports imposed by the international community and the falling oil prices.

Years of international isolation have taken a toll on Iran’s economy, but the sudden drop in oil prices is threatening to plunge the country into a full-blown recession. This will have a direct impact on the general population, already impoverished by the years of sanctions, as well as on investment into Iran’s tarnished infrastructure.

Although it is unlikely that the low oil prices will affect the stability of the regime in Teheran, the current situation, in the midst of the nuclear programme negotiations, might stir the debate between liberals and conservatives within Iran’s leadership over the future course of the country and its relations with the international community.

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Anadarko Fails to Find Commercial Resources at Rovuma Basin´s Kifaru-1 Well

Mozambique Oil Industry: Anadarko Fails to Find Commercial Resources at Rovuma Basin´s Kifaru-1 Well

Posted by Mozambique Resources Post on February 26, 2015

Posted in: Mozambique Oil and Gas Industry. Tagged: Anadarko, Mozambique, oil, Rovuma, Wentworth Resources.Leave a comment

Anadarko in Mozambique

Canada’s Wentworth Resources Ltd., the Oslo Stock Exchange and AIM listed independent, East Africa-focused oil and gas company, provided Wednesday an update on the Kifaru-1 exploration well in the Rovuma Onshore Concession in northern Mozambique, further to the Company’s announcement Jan. 15 that drilling operations had begun.

The Kifaru-1 well was drilled to a final total depth of 10,170 feet (3,100 meters) in Eocene age rocks. The well encountered all targeted zones in the Miocene, Oligocene and Eocene formations but failed to find an economic reservoir and as a result the well has been plugged and abandoned.

With the drilling of Kifaru-1 to the final total depth, the consortium led by Anadarko has satisfied all of its drilling obligations under the terms of the Exploration and Production Concession Contract for the Onshore Rovuma Block in Northern Mozambique.

Geoff Bury, Managing Director, commented: “Whilst the results from this well did not meet our expectations, we are working with Anadarko and our partners to evaluate all data collected to determine the next steps in the exploration phase of the onshore Rovuma block.” (Source: Rigzone)