Craig Eisele on …..

December 9, 2007

Libya Opens Natural Gas Exploration to Foreign Firms.

Gazprom, Shell, Sonatrach and Polski win first gas contracts in Libya

Libya on Sunday awarded four potentially lucrative gas exploration contracts to fuel giants Shell, Gazprom, Sonatrach and Polski, the first ever given to foreign firms as relations warm between Tripoli and the West.

The biggest award went to Algerian firm Sonatrach in association with Oil India and Indian Oil, which was given four blocks covering 6,934 square kilometres (2,677 square miles).

Russian giant Gazprom was awarded three exploration blocs with a total area of 3,936 square kilometres in the southern Ghadames basin.

Gazprom beat off competition from Gaz de France, Inpex of Japan, Russian rival Lukoil, Britain’s BG and Polski, agreeing to cede 90 percent of its eventual production to Libya’s state-owned National Oil Corporation (NOC).

Anglo-Dutch company Shell was handed a two-block contract to explore a 1,790 square kilometre area in the northern Sirte basin and Polish firm Polski was also awarded a two-block area in the southern Murzak basin.

Shell was awarded its exploration rights following a bid of 93 million dollars and 85 percent of its eventual production.

Sonatrach outbid Gaz de France, BG, Polski and Germany’s RWE and proposed 87 percent of its production go to the NOC.

A total of 35 companies had been pre-selected to bid for the dozen contracts awarded Sunday to explore 41 gas blocks in the Mediterranean, the Sirte basin in the north-central area of the country, Cyrenaica further east and Murzek and Ghadames in the south.

The blocks cover a total of 72,500 square kilometres (almost 28,000 square miles), an area the size of Scotland.

It was the first time Libya invited tenders for natural gas exploration.

Regarding eight as yet unattributed blocks, National Oil Company president Shukri Ghanem said the NOC “will decide next week if it will award licences or if it will keep them for a second invitation to tender.”

With the end of UN sanctions after Libyan leader Moamer Kadhafi’s dramatic decision in December 2003 to abandon weapons of mass destruction programmes, oil and gas exploration has picked up at a frenetic pace.

OPEC member Libya is the African continent’s second largest oil producer at 1.7 million barrels per day. It also has natural gas reserves estimated at 1,314 billion cubic metres (46,403 billion cubic feet).

Among the notable losers on Sunday was French company Gaz de France, which imports large quantities of Libyan natural gas.

Earlier, a company official said it was keen to “get a foothold” in exploration in the country.

“Libya interests us the most and we wish to work there,” head of exploration and production at Gaz de France Renato Gurrero-Serreau told AFP.

Kadhafi, whose country spent years in diplomatic isolation for its alleged support of terrorists, begins a high-profile visit to France on Monday during which he will hold talks with President Nicolas Sarkozy in Paris.

November 18, 2007

Russia’s Gazprom Eyes Region’s Energy Assets

Gazprom Eyes Region’s Energy Assets
Vanguard (Lagos)

2 November 2007
Posted to the web 5 November 2007
Russia’s Gazprom wants to pursue acquisitions in Africa and will focus on partnerships with state-run enterprises and other firms, an official with the gas export monopoly said on Thursday.

“Africa is definitely on Gazprom’s international expansion path,” said Christophe Gerard, a business development executive in Gazprom’s Netherlands unit. “We are ready to acquire assets.” “We have the money to do it,” he told the Africa Upstream 2007 oil conference.

Russia, which had strong economic ties with Angola, Mozambique and other client states during the Cold War, is keen to rekindle relationships in Africa and not fall behind China, India and others in the race for the continent’s resources.

Gazprom already has a relationship with Angolan state-run oil firm Sonangol and is looking for similar parterships in the oil-rich Gulf of Guinea, a region shared by Nigeria, Cameroon and several other African nations.

July 24, 2007

The Russians are Coming to Africa: Has the Time Finally Come for Continent to Get Protective Over Resources

Time Has Come for Continent to Get Protective Over Resources

The Nation (Nairobi)
23 July 2007
Posted to the web 23 July 2007

By Chege Mbitiru
A Russian politician recently lost patience with his country’s major companies. He urged them to get voracious overseas. Africa featured in the destinations he offered. Like the Chinese, the the Russkies are coming and the Africans aren’t bargaining hard enough.

Mr Yuri Trutnev heads the natural resources ministry. Apparently, he also wields political muscle. Already some people consider him a possible successor of President Vladimir Putin.

Media reports say Mr Trutnev held an open ministerial meeting eleven days ago. Representatives of major energy and mining companies attended. Trutnev told them the government would “back all Russian projects abroad.” Additionally, “for those projects to be realised, Russia must act” on the governmental level.

The money people appreciated Mr Trutnev’s assurance. For examples: Zinaida Zhukova of Norilsk Nickel, a metals behemoth, said: “State support would help reduce the risks.” That equals “Mess with us, and face the Kremlin,” a veiled blackmail. Valery Rusakov of oil giant Rosneft noted obtaining licenses “is very hard to resolve at the company level.” Translation: Marshal diplomatic artilleries.

Russia, unlike the US, doesn’t prosecute its investors who offer bribes overseas. That’s not saying US investors don’t use “kosher” styles to meander through the palm-greasing routes. Anyway, palm greasing is as Russian as is African.

Mr Anatoly Makarov, Russia’s ambassador to South Africa, last month described, in Business Day, President Vladimir Putin’s visit there last September as “the official return of Russia to Africa.”

Unlike other European nations, Russia didn’t bother much with Africa during the continent’s colonial scramble. It possessed expansive territory, all the way to Alaska, which it sold to the US for peanuts.

Communist Russia saw emerging independent African states as allies in undermining capitalist imperialism. That explains the Soviet Union’s generosity to liberation movements and African rebels who sought to topple “imperialist stooges.” That remained so until the communist bubble bust 16 years ago and Russia retreated. By then machetes rivalled AK47s in abundance. In all fairness, the Soviet Union left good legacies, but white elephants overshadow them.

Russia’s transition to capitalism and absorption of the system’s filth is notable. Last year, its Gross Domestic Product grew by about 6.7 per cent, very different from the mid-1990s when the Bear merely whimpered.

It’s illustrative that Putin chose South Africa, an economic powerhouse of all capitalist faces, as his first continental destination. He didn’t offer to construct dams, peoples’ and convention halls, sports complexes or dual carriage highways from airports to state houses.

Putin was after what South Africa, and other African countries-especially in Sub-Sahara-possess aplenty and Russia needs, raw materials. Of course, Russia isn’t starved of natural resources. But then, why exhaust its own when it can find them elsewhere and certainly more cheaply? That’s capitalist system’s modus operandi.

Consequently, Russia will go after minerals-already the appetite for uranium is shameless-and such other goodies like oil. The list is endless. Usual platitudes like cooperation and mutual respect will abundantly crop up.

Russia isn’t an exception. Trutnev actually told the companies to catch up. Former colonial powers, the US, China and the-ever-polite Japanese and Indians are, like gigantic backhoes scooping whatever they can from Africa.

Time has come for African nations, especially in Sub-Sahara, to urgently get more protective of their resources and press for higher bargains. This is not singly, as Equatorial Guinea and Chad-rewriting oil laws-are doing, but in concert while maintaining national identities.

Grandiosities like the United States of Africa, a desirable future political luxury Libyan leader Muammar Gaddafi champions, aren’t necessary. Discreet consultations, especially within regional groupings, will do. A hackneyed saying still counts: If we don’t hang together, we’ll hang separately.

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