Core Investors to be sold maximum of 60% of Nigerian power firms

Nigeria’s National Council on Privatisation (NCP) which is oversees the privatisation process in the country has approved that 60% of the shares of the proposed power firms to be privatised be sold to core investors.

 This is to allow state governments to participate in the bidding consortia seeking to buy the Power firms. The NCP has also set the upper limit on the overall federal and state government shares to 49%. Nonetheless, the NCP approved the Federal and State Governments would not play any role in the management of the privatised successor companies.

It was also endorsed that the workers’ allotment would not exceed a maximum of 2% of the overall shares or 10% of the Federal Government shares in each distribution company; whichever is lower.

NCP also approved that shareholders’ agreements will be signed between the Governments and core investors in each distribution company that will explicitly provide for automatic dilution of any Government shareholding where there is a failure to meet payment deadlines.

It also approved that the states may provide counter-guarantees to the distribution companies to cover shortfalls in payments due from the distribution companies for energy supplied to customers within the territorial boundaries of the respective States.

The NCP, which is chaired by Nigeria’s  Vice President Namadi Sambo, also approved that State Governments through reaching an agreement with the relevant distribution company should be allowed to increase access to electricity to their citizens.

 In accordance with the Independent Electricity Distribution Network (IEDN) regulation to be enacted by the Nigerian Electricity Regulatory Commission (NERC), a State that desires to build independent electricity distribution networks within areas of its State not currently served within each distribution franchise area could do so. This would be subject to such a State being licensed to do so by NERC without unnecessary delay.

The National Council on Privatisation (NCP) has approved that State Governments should have the ability to provide for increased access to electricity to their citizens by reaching an agreement with the relevant distribution company whereby the state will make a contribution to the capital expenditure required to rehabilitate and/or expand the network within that state.

This capital contribution will be secured and repaid on terms agreed with the distribution company. The assets thus acquired will become the property of the distribution company but will be wholly utilised within and for the benefit of the citizens of the relevant state. Furthermore, the state will receive compensation within the ambit of the extant tariff methodology. Excess capital costs, if any, will be borne by the State Government. Any investment by the state will not attract any interest payments by the distribution companies.

 NCP also endorsed that the percentage of equity that State Governments hold in a distribution company will be determined through independent valuation of actual investments by the respective states in the distribution network. The valuation will be determined by an independent agency jointly appointed by the State Governments and the Nigerian Electricity Regulatory Commission (NERC.)

Given the economic un-viability of re-delineating the distribution companies along state boundaries, the NCP approved that the present privatisation framework of eleven distribution companies created from the unbundling of the Power Holding Company of Nigeria (PHCN) should be maintained.

Dragon Oil no longer acquiring Bowleven

Edinburgh, UK based Bowleven , a West Africa focused oil and gas group has confirmed that they are  no longer in talks with Turkmenistan-focused, Dubai based Dragon Oil.

Kenvin Hart-CEO Bowleven

Dragon oil released a statement last week confirming that they are no longer talking leaving the way open for others interested in Bowleven's exploration assets offshore Cameroon.

"The board of Dragon Oil announces that it is no longer exploring an offer for all of the issued and to be issued share capital of Bowleven," Dragon said in a short statement on Tuesday according to a Reuters report.

Bowleven also issued a similar statement on Tuesday stating that it “notes the announcement made by Dragon Oil today and confirms that no detailed discussions were held with Dragon Oil and that no due diligence information was provided by Bowleven to Dragon Oil”

 Bowleven has traded on AIM since December 2004. It holds equity interests in offshore and onshore exploration acreage in Cameroon and Gabon according to information obtained on the company’s website.

Bowleven holds a 75 percent equity interest in the Etinde Permit, being three shallow-water blocks offshore Cameroon, West Africa: namely blocks MLHP-5, MLHP-6 and MLHP-7.

 The Etinde Permit covers approximately 2,316 km² of exploration acreage located across the Rio del Rey and Douala Basins. As well as contingent resources on blocks MLHP-7 and MLHP-5, the acreage has very attractive exploration potential.

Bowleven also holds a 100 percent equity interest in the Bomono Permit, onshore Cameroon, comprising approximately 2,328 km2 in the Douala Basin. Both Permits are operated by Bowleven through its wholly owned subsidiary EurOil Limited.

Also through its subsidiary FirstAfrica Oil Limited, Bowleven holds a 100 percent equity interest in the EOV Permit, offshore Gabon. Bowleven has reached an agreement in principle with a third party for the sale of the group company which holds the EOV Permit.

 Cash-rich, Dubai-headquartered Dragon, which is 52 percent-owned by Dubai's Emirates National Oil Company is dual-listed in Dublin. 

South Africa’s FirstRand Bank to set up Investment Bank in Nigeria, eyes acquisitions in Ghana

South Africa’s FirstRand Bank says it is planning to set up an Investment Bank in Nigeria.  This will be built from scratch, the bank’s chief executive told Reuters after reporting a 26 per cent rise in first-half profit.

Sizwe Nxasana-CE FirstRand Bank

The bank said that it would keep pursuing expansion in other African countries such as Nigeria and Ghana.

FirstRand which already has operations in seven African countries, said it aimed to also buy a smaller retail and commercial bank in Nigeria.

"If we do acquisitions, they will typically be small to medium size," Chief Executive Sizwe Nxasana told Reuters

"We wouldn't want to spend more than, I would say, 10 percent of our capital on new acquisitions or new opportunities."

The bank ended talks to buy a stake in Nigeria's Sterling Bank last year after failing to agree on price.

FirstRand Sizwe Nxasana speaks to CNBC Africa on the bank's last full year result.

S&P say corporate governance and regulatory oversight remain key risks for Nigerian banks

In a report published today, Standard & Poor's Ratings Services examines the progress of Nigeria’s banking reforms and concludes that the sector needs a longer regulatory track record before it stops considering corporate governance and regulatory oversight to be among its key risks.

Sanusi Lamido Sanusi-Governor, Central Bank of Nigeria.

The rating firm however admits that after more than two years of central bank support, Nigeria's commercial banks are again engaging with the domestic economy with fewer, but larger, banks with better corporate governance and regulatory oversight.   

“The industry and its regulation have improved significantly” says S&P

But fewer, larger institutions have emerged following a succession of mergers triggered by the sharp rise in NPLs.

“In our opinion, risk management, particularly in higher-risk lending such as foreign currency loans and retail and access to low-cost funding will be the key differentiators affecting banks' performance going forward”

S&P states that the long-term success for Nigerian banks will chiefly depend on enhancing their risk management, improving their governance, diversifying their loan portfolios, and securing their funding profiles.

In 2009, eight of the Nigeria's 24 banks had to be rescued after weak risk management and corporate governance lapses caused nonperforming loans (NPLs) to rise to more than a third of total loans across the banking system.

The Central Bank of Nigeria (CBN) had responded strongly, removing executive teams from failed banks, fully guaranteeing the interbank market, and setting up the Asset Management Company of Nigeria to purchase a large proportion of nonperforming loans from Nigerian banks.

It also set up sizable intervention funds to support credits to the real economy. Finally, it is facilitating a series of mergers between failed banks and their stronger competitors. AMCON recently announced plans to sell off three banks Nationalized in 2011 within the next 18 months. 

Watch Sanusi Lamido Sanusi speak on Nigerian Banks in August 2009, a few days after sacking five managing directors of weak banks.

Ghana Cedi face risk of further weakening in 2012

…economic growth estimated to slow to 8.5% from 14.1%

The Ghanaian Cedi is expected to weaken further in 2012.  Analysts at Renaissance Capital expect increase in election spending to lead to a weaker Ghana Cedi in 2012. In an analyst note sent to the media, including this blog, the Russian based investment firm declares that “In three of the five democratic elections held since the end of military rule in 1992, the budget deficit widened significantly in an election year. There is thus a risk of strong monetary growth in 2012, which would be negative for the cedi.”

Ghana's President-John Atta Mills

The cedi depreciated 10% against the dollar in 2011. The depreciation in the Cedi led to a negative growth in manufacturing in 2011 by 7.9%   compared with growth of 4.1% in the previous year. Also the trade sector, another key sector in Ghana’s economy contracted by 1.1% within the same period compared to a strong growth of 14.1% in 2010. Both sectors are highly dependent on imported input and the drop in the Cedi resulted in an increase in the cost of imported inputs and tradable consumer goods.

The risk is that if the Cedi weakens further in 2012 activity in manufacturing and trade could remain sluggish in 2012 putting pressure on inflation and job growth. It could also make imported consumption goods more attractive for Ghanaians. Consumption goods currently make up 19 per cent of Ghanaian imports. The manufacturing and Trade sectors make up 12.4 per cent of Ghana’s gross domestic product (GDP).

Not all sectors of the Ghanaian economy suffered a decline in 2012. Besides the oil sector, which was the fastest growing in 2011, the fastest growing non-oil sectors were business services and construction in 2011. Non-oil growth in 2011 was driven by crop production (including cocoa), construction, transport and storage, and business services.  The growth of the construction, transport and storage sector and the business services sectors is said to be driven by the growth in Ghana’s new oil sector.

The weakening of the Ghana Cedi will however be prevented if the Ghanaian government is able to stick to its plans to cut domestic borrowing by 30% in 2012 to GHS1.67bn ($0.97bn). If is this is achieved, the expectation is a softer growth in money supply in 2012 which will be good for a stronger or stable cedi in 2012.

Ghana’s economic growth is predicted to slow to 8.5% in 2012, compared to an estimated growth rate of 14.1% 2011. Excluding the mining and quarrying sector, which other than being dominated by oil production includes gold mining, the economy grew 7.2% in 2011.

The upside however is that oil production has not yet peaked according to analysts.  Oil production is only likely to peak at 120,000 b/d in 2013, analysts expect that the mining and quarrying sector’s momentum will continue in 2012, although at a slower pace than in 2011. Growth in the non-oil sector is expected to be driven by construction activity, business services and the transport and storage sector. 

EasyJet founder plans low cost West African airline-defenceWeb

The founder of low cost carrier EasyJet, Stelios Haji-Ioannou, is planning to invest US$500 million in a low cost airline headquartered in Ghana’s capital Accra.

“We could link Ghana to 10 or 15 different countries in West Africa,” said Ed Winter, former chief operating officer of EasyJet and a member of the management team of Stelios.

During an interview in Accra on Monday, he told Bloomberg that the team is there to conduct studies into launching the new airline, which would be called Fastjet. “We are looking at 15 aircraft with an investment value of US$500 million.”

Fastjet would fly around five million passengers a year in the West African region.

Stelios will soon announce the results of a feasibility study being done for Rubicon, a cash shell which raised 9 million pounds in December to fund the launch of Fastjet. The Financial Times reports that the study is expected to recommend that the new airline link around six West African countries to Accra.

If Fastjet works out, it will eventually be expanded across the region to become the first pan-African low cost carrier, based on Easyjet’s model, sources close to the study said.

Geoffrey White, CEO of Lonrho Plc, which operates the East African low cost airline Fly540 and which has a 12.7% stake in Rubicon, said he is looking to potentially partner with Stelios in its African operations.

“There’s a very serious plan to make Rubicon into a very serious low-cost carrier,” said David Lenigas, a Rubicon board member and chairman of Lonrho.

“One of the attractions is that West Africa is very poorly served other than with national carriers that don’t have the proper models to do regional low-cost service,” said White.

In December, Rubicon received exclusive branding rights for Fastjet from EasyGroup for 12 months in exchange for a payment of 480 000 pounds, a 5 per cent stake in the company and further royalty fees, the Financial Times reports.

Recently there has been enormous investment in West African airlines. The region has some of the world’s fastest growing economies – the International Monetary Fund projects that Ghana's economy will grow 13.5% this year. The International Civil Aviation Organization expects Africans to fly 8% more miles in 2012 and 8.3 % more in 2012, making the continent earth's fastest-growing for air travel behind Asia and the Middle East. And according to Airline Business magazine, 74% of intra-African routes have no more than one daily flight while around half of African city pairs are underserved.
For more on this story visit:
http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=23857:easyjet-founder-plans-low-cost-west-african-airline&catid=35:Aerospace&Itemid=107

West Africa's Iron Ore deposits attract foreign investment from mining majors-Bloomberg

Sierra Leoneans hadn’t seen a functioning locomotive engine in 30 years until African Minerals Ltd. rebuilt the rail network to export iron ore in November, almost a decade after civil war ended.

An iron-ore boom in West Africa, which may have deposits to rival Australia’s ore-rich Pilbara region, is motivating African Minerals, as well as miners Rio Tinto Plc and ArcelorMittal, to spend $25 billion on 3,170 miles of new and rebuilt railways and 11 new ports in West Africa, according to JPMorgan Chase & Co.

African Minerals is already benefiting, with its stock gaining 25 percent this year. More is to come: Nations including Guinea, Sierra Leone, Liberia and Republic of Congo may supply 250 million tons, or 9 percent of global iron ore output, by 2020, according to mining researcher Raw Materials Group.

“The standout development is African Minerals,” according to Matt Fernley, an analyst at GMP Securities Ltd. in London who said the stock is his “top pick in the sector. If you’re in Africa in iron ore, you want a world-class deposit and you want control over your own infrastructure. They have both.”

Iron ore exports from African Minerals’ Tonkolili and London Mining Plc’s Marampa mines are set to boost Sierra Leone’s economy by 51 percent this year, the fastest projected pace of any nation in the world, according to the International Monetary Fund. Guernsey, U.K.-based African Minerals is spending $1.2 billion on rails and ports and developing a mine in the first phase of its Tonkolili project.

In Guinea, where two coups have ousted presidents since the mid-1980s, Rio Tinto is spending $1 billion on the first phase of its Simandou project, which is estimated to produce 95 million tons of ore by 2015. London-based Rio plans to invest more than $10 billion on an iron-ore mine, 650 kilometers of industrial railway, 21 kilometers of tunnels and a new deep- water port south of the capital, Conakry.

For more on this story go to: 

http://www.businessweek.com/news/2012-02-22/west-africa-rails-rebuilt-with-iron-ore-boom-s-proceeds-freight.html

West Africa fast becoming the World's Golden Belt, Reports Miningweekly

JOHANNESBURG (miningweekly.com) – West Africa has the potential to become one of the top five gold-producing regions in the world, according to Wood Mackenzie mining industry analyst Jonathan Leng.

 Numerous new gold-mining projects are being developed in West Africa, particularly in Ghana, Burkina Faso, Mali, Mauritania, Liberia and Sierra Leone, but none of them are big enough to threaten the top gold producer, China, he adds.

 “The recent boom in the industry is the result of two main factors: first, the strong rise in gold prices to their current high levels, which stimulated exploration and development of projects and made the reward for mining in one of the world’s more risky areas appear worthwhile, and, second, the ongoing success of mining projects in established mining countries in the region over the past few decades, which has instilled confidence in miners and explorers in less well-developed, higher-risk countries such as Côte d’Ivoire.”

 West Africa has experienced significant growth in gold production over the last two decades to 6.7-million ounces in 2010, accounting for nearly 8% of the global supply. Continued growth is forecast at about 11-million ounces by 2015.

 Global senior producers account for more than half of the region’s mine supply and are likely to maintain current levels with significant investments in expansion and development projects. West Africa is viewed as attractive for investment, suggesting potential for corporate activity, states a report from financial services provider BMO Capital Markets.

 Gold exploration company ASX-listed Middle Island Resources MD Rick Yeates states that the gold ‘boom’ is not an overnight phenomenon, but rather a result of a combination of factors including extraordinary gold prospectivity, the reform of mining laws in many jurisdictions, improving sovereign risk profiles and the persistence of companies in establishing the region’s credentials.

 Further, Australia-based Viking Ashanti MD Peter McMickan notes that there has been heightened interest in gold mining in West Africa for some time.

“A healthy mix of major multinational miners, midsize producers and junior explorers, predominantly from the US, Canada, South Africa and Australia, has been active in the region,” says McMickan.

He states that a significant driver for the renewed interest has been the changed view of risk and reward in the region. Companies have now demonstrated that it is viable to do business in the region and the opportunities for the discovery and development of major gold deposits are considered good.

For more read at : http://www.miningweekly.com/article/west-africa-has-potential-for-top-five-gold-spot-2012-02-24

Central Bank of Nigeria insist on banks divesting from subsidiaries by May 2012-The Nation Newspaper

The Central Bank of Nigeria (CBN) will not extend the May 14 deadline set for banks to divest from non-banking operations, its spokesman,Mohammed Abdullahi, has said.

He said the deadline remains sacrosanct in view of the apex-bank’s reform initiatives. He further said the apex bank has no plans to change the deadline because efforts have been channelled to ensure the success of the initiatives.

"The deadline for the divestment has not changed. It remains May 14, 2012, but until the CBN makes a pronouncement to that effect. The issue of granting extension does not arise for now since the deadline is still far. We are not thinking about that now. May be when the time comes, we would know what to do. When we get to the bridge, we know how to cross it," he stressed.

He, however, acknowledged that the CBN gave an extension to a bank, which he failed to disclose its identity.

"We only gave an extension to a bank I will not mention its name. The reason is because the bank has changed the holding company position, " he added.

Source: http://www.thenationonlineng.net/2011/index.php/business/37734-cbn%3A-deadline-on-banks%E2%80%99-divestments-remains-sacrosanct.html 

Fitch keeps Ecobank Transnational on watch negative over Oceanic Bank acquisition-Reuters

Fitch Ratings has maintained Togo-domiciled Ecobank Transnational Inc.
 (ETI)'s 'B-' Long-term Issuer Default Rating (IDR), 'B' Short- term IDR
and 'b-' Viability Rating (VR) on Rating Watch Negative (RWN). 
 
The RWN reflects Fitch's view that there are still uncertainties about ETI's
capitalisation and asset quality after the acquisition in November 2011 of
Nigeria's Oceanic Bank International Plc (Oceanic). 
 
Oceanic was one of the banks in Nigeria that had to be supported in 2009 by the
central bank of Nigeria (CBN). Although significant efforts have been made since
2009 by the CBN and subsequently ETI to improve the bank's risk profile, there
are still uncertainties about Oceanic's asset quality and capitalisation that
have to be addressed by ETI. Nigeria is already ETI's largest market (27% of
ETI's total assets at end-Q311) and with Oceanic it may account for an estimated
44% of the group's total assets. 
 
The RWN is pending the completion of all transactions related to Oceanic's
acquisition announced in September 2011, the availability of robust information
on the merged Ecobank Nigeria and Oceanic entity and ETI's 2011 consolidated
audited financial statements. 

Source: http://af.reuters.com/article/togoNews/idAFWNA948420120206

Increased Foreign Investment will be “Good for Africa”- BBC Global Poll

Nearly two-thirds of those surveyed in a new 22-nation poll for BBC World Service think that the recent increase in overseas investment in Africa will prove to be a good thing for the continent, with African citizens among the most upbeat.

The findings of the poll, conducted by GlobeScan among 21,558 people, show that most respondents are relaxed about foreign companies purchasing long-term rights to African natural resources and land, with a majority rating such investments as either “very good” (19%) or “somewhat good” (44%) for Africa. Africans are among the most positive about this development, with Nigerians the most likely to rate it as a good thing for Africa (85%), a view shared by three in four Kenyans (75%) and Ghanaians (72%).

China, the source of much of the current foreign investment in Africa, is also positive about it, with nearly two-thirds of Chinese rating it as a good thing (64%) and only 18 per cent rating it as a bad thing. A much smaller proportion of Indians rates the wave of foreign investment in Africa as a good thing, however (47%).

Germany is the most doubtful, with over half of Germans (56%) reporting that the increase in overseas investment in Africa is a bad thing for the continent. Nearly half of French respondents (44%) feel the same.

The poll also asked respondents to indicate how optimistic they were that Africa would experience “major economic growth” over the next 20 years. It reveals that large majorities in the four African nations polled are either “very” or “somewhat” optimistic that this growth will take place. Eighty-five per cent feel this way in Egypt, 80 per cent in Nigeria, 75 per cent in Kenya, and 74 per cent in Ghana—higher proportions than in all other countries polled.

Globally, almost six in ten citizens (58%) are optimistic about Africa’s economic prospects, compared to 33 percent who are pessimistic. Citizens of developing nations in Asia and Latin America are among the most optimistic about Africa’s prospects, but optimists also outnumber pessimists in India (55% vs 26%), the USA (55% vs 42%), and China (50% vs 36%).

However, the poll also reveals that some of the industrialised nations that have been major aid donors to Africa over the years are among the most pessimistic that Africa’s economy will see a sustained improvement. Germans are again the most downbeat, with seven in ten (70%) pessimistic, compared to just 29 per cent who are optimistic. Pessimists also outnumber optimists in the UK (58% vs 38%) and France (56% vs 41%).

GlobeScan Chairman Doug Miller comments: “There is little evidence that the sovereignty concerns some policy experts have expressed over long-term Chinese investment in Africa have registered with average citizens. Most people around the world think recent foreign investment is good for Africa, and expect significant economic growth there over the next decade or two. Africans themselves are the most positive."

Nexen's West Africa field produces first oil-Reuters

Nexen Inc said oil production began at the Usan field in offshore West Africa.
Production from Usan, net to Nexen, is expected to be 14,000 to 28,000 barrels per day this year.
With storage capacity of up to two million barrels of oil, the Usan floating production, storage and offloading unit is one of the largest in the world, the company said.
The project -- located about 100 km southeast of the Nigerian coast -- is expected to deliver significant cash flow, Chief Executive Kevin Reinhart said, adding that the company will now look to ramp up production.
Nexen's partners for Usan are Total E&P Nigeria Ltd, Chevron Petroleum Nigeria Ltd and Esso E&P Nigeria (Offshore East) Ltd.
For more go to: http://af.reuters.com/article/nigeriaNews/idAFL4E8DO6F420120224

Canadian miner gets license to mine Gold in Burkina Faso-Reuters

Canadian miner High River Gold Mines Ltd said it received a 20-year mining license in Burkina Faso to explore and construct a gold mine at its Bissa gold project in West Africa.
The company, which has properties located mainly in Russia and Burkina Faso in Africa, said the license could be renewed.
The gold miner, which owns a 90 percent stake in the Bissa project, said it expects mine construction to start before the end of the year.
Shares of the Ontario-based company closed at C$1.17 on Thursday on the Toronto Stock Exchange

Source: http://af.reuters.com/article/burkinaFasoNews/idAFL3E7I41CT20110704

Niger says Imouraren uranium mine on track for 2014-Reuters

Areva's Imouraren uranium mining project in Niger will likely start production in 2014 after delays caused by kidnappings of foreign workers in the country's north, mines minister Omar Hamidou Tchiana said on Tuesday.
Tchiana added that a deal reached with partners last week raising the country's extraction price of uranium to 73,000 CFA francs ($150) per kilogram from 70,000 CFA/kg would provide a boost to the West African state's economy.
To read more click:
http://af.reuters.com/article/nigerNews/idAFL5E8DL7PD20120221

New Crude Oil find off the coasts of Liberia and Sierra Leone-Reuters

Energy companies African Petroleum Corp and Anadarko said they struck oil off the coasts of Liberia and Sierra Leone, raising hopes for an energy bonanza in the war-scarred West African states.
African Petroleum said on Tuesday its Narina-1 well struck 105 feet of net oil pay at its offshore Liberia LB-09 block, adding an extensive exploration and appraisal programme was planned to see if the reservoir was commercially viable.
"Narina-1 has identified a potentially large accumulation of light good quality oil at the Turonian level as well as excellent quality oil in the Albian," Chief Executive Karl Thompson said in a statement.
Liberia's top oil official said the discovery was "good news for Liberia" but warned against unrealistic expectations.
"We urge everyone to be very patient," Liberia National Oil company CEO Randolph McClain said on local radio. "It will take time to fully appraise this discovery and years, between five to seven years, before a drop of oil is produced from the well."
Anadarko Petroleum Corp also said on Tuesday that one of its deepwater exploration wells located offshore Sierra Leone encountered 98 net feet of hydrocarbons.
Oil exploration off the coast of West Africa has surged since 2007 when Tullow Oil found the Jubilee field, one of the continent's biggest recent finds. The field came on line in late 2010, driving double-digit economic growth in Ghana.
"What you've had since then was an increasing number of finds showing that there are oil systems in the region. Announcements like this will only raise the excitement," said John Marks, director of consultancy Africa Energy.
Both Liberia and Sierra Leone have been eager to develop their mining and energy industries after years of civil war hindered investment and left infrastructure in ruins.
"It means a lot for the economy of Sierra Leone, it means a lot for our revenue generation drive," said Richard Konteh, Sierra Leone's minister of trade and industry.

RESOURCE CURSE
Countries along West Africa's Gulf of Guinea already produce more than 3 million barrels of oil per day, most of it from OPEC member Nigeria, and Washington estimates the region will supply about a quarter of U.S. oil imports by 2015.
Positive drilling results along the coast have raised hopes among ordinary people in Sierra Leone and Liberia that joining the club of oil exporters will help them, but they have also triggered fear of corruption and instability that has hit other resource-dependent countries like Nigeria.
"We want to see what the government will do, so it will benefit the average Sierra Leonean," said Samuel Issa Kamara, a 29-year-old shop worker in Freetown. "The oil is a natural gift from God, so every Sierra Leonean should benefit from it."
The oil find could also raise the stakes in Sierra Leone's presidential election, due in November, a spokesman for President Ernest Bai Koroma said. Koroma is seeking a new term in the polls.
"It may increase the tenacity with which the parties will fight the election," spokesman Unisa Sesay told Reuters.
Anadarko said the Jupiter-1 well offshore Sierra Leone was drilled to a total depth of about 21,212 feet in water depths of about 7,215 feet in the Sierra Leone/Liberia Basin. It said additional evaluation of the area was likely.
Anadarko operates the block with a 55 percent working interest. Co-owners in the block include Repsol Exploracion Sierra Leone S.L and Tullow Sierra Leone B.V.
Australia-listed African Petroleum Corp owns 100 percent of Liberia blocks LB-09 and LB-08.

Source:Reuters-February 21, 2012

Mali's Telecom company to list shares on West African Exchange-Reuters

Shares in Mali telecoms company Sotelma will go on sale in April and start trading on the Abidjan-based West African regional bourse by the end of June, the head of the BRVM exchange said on Thursday.
Jean-Paul Gillet said Sotelma hoped to raise 100 billion CFA francs ($201.9 million) in the listing, which he said would involve 20 percent of the firm being sold to the public with another 9 percent reserved for staff.
Gillet said Sotelma was expected to list shares with a unit price of 10,000 CFA.
The operation is expected to create the bourse's third largest company by market capitalisation after Senegal's Sonatel and pan-African bank Ecobank Transnational Inc, he added.
Sotelma was one of four listings expected this year on an exchange that hosts nearly 40 companies, including some from Senegal, Guinea Bissau, Mali, Burkina Faso, Niger, Benin, Togo and Ivory Coast.
Source:Reuters February 24, 2012

Nigeria to represent privatisation bills for passage-Thisday reports

The Federal Government of Nigeria is putting finishing touches on all bills meant to refocus the privatisation process with a view to presenting them to the National Assembly for passage into law and implementation.

This was disclosed Thursday by Chairman of National Council on Privatisation, Vice-President Namadi Sambo.

This is as the Chairman of the House of Representatives Committee on Privatisation, Hon. Khadija Abba-Ibrahim, noted that Nigerian Telecommunications Limited. (NITEL) was having problems with being privatised, a situation made worse by the fact that it was owing a debt of N250 billion in addition to staff salaries while Aluminium Smelter Company of Nigeria (ALSCON) which had already been privatised is facing difficulties such as outstanding salary issues.

Sambo explained that the essence of getting the privatisation process right was to enable them meet the objectives of the privatisation policy which is aimed at creating wealth and jobs for Nigerians, and stressed the need for cooperation between the executive and the legislature.

He listed bills to be re-presented for passage into law as the Railway Bill meant to fast-track the development of the rail transport sector, the Power sector privatisation and that of NITEL.

Abba-Ibrahim stated that the committee had already concluded plans to embark on a phased oversight visit of Privatised Enterprises across the country starting from March 5.

She stated that they were eagerly waiting on the arrival of the proposed reform Bills which are critical to the Transformation Agenda, promising to give the bills accelerated consideration.

Abba Ibrahim pledged that they would however do all within their powers to solve the problems and ensure the desired results, adding that since the privatisation of the Ajaokuta Steel Company has been revoked, it will be put up for sale in their efforts to ensure that the country gets it right this time.

"In privatisation, it is a bit of give and take, government has to play its own role in making sure that the privatisation exercise in this country works, so we are there to ensure that government plays its role in making sure that the privatisation exercise is a success. So it is not as if the privatised companies are not doing their own part in trying to see this work. It is not an easy process, some of them have done very well, some of them have not done really well and some of them just need to heal or closed.

"Basically in the forefront of things we have NITEL, we are all worried about what is going to happen, it is indebted, I mean there is so much debt in NITEL, whoever is going to buy NITEL will have a lot to deal with. It is indebted to the tune of about N250 billion so I mean you are talking about a lot of money and there are a lot of salaries and wages that haven't been paid to staff.

"Also on ALSCON, Aluminium Smelter Company of Nigeria in Ikot Abasi, the same thing, there is a lot of staff liability to be taken care of and other aspects that either the government did not idea to or the privatised companies so there are so many things that need to be put together and we have agreed that from time to time we will liaise with the Executive arm, that is the NCP to see that it becomes a success", she said.

She said they have scheduled to tour privatised concerns as part of their oversight functions and would thereafter be well abreast of their current states and what to do to solve their problems for best results.

Source: Thisday Newspaper-February 24, 2012

Chevron delays Nigeria Gas Plant-Reuters reports

Chevron Corp has pushed back the expansion of a natural gas processing plant in Nigeria, originally slated for this year, by another three years, according to its annual report, which also revealed it was exploring for shale gas in China,
Closer to home, the second-largest U.S. oil company also said its chemical joint venture with ConocoPhillips would seek to take advantage of North America's shale gas glut by doing a feasibility study on a potential ethylene cracker on the U.S. Gulf Coast.
As for Nigeria's Escravos Gas Plant Phase 3B, which is designed to gather 120 million cubic feet of natural gas per day from eight offshore fields and then compress and transport it to onshore facilities, it had already been delayed by a year.
Phase 3A will feed an $8.4 billion gas-to-liquids plant nearby when that starts up next year, having itself been delayed for three years and seen its estimated cost more than double.
Construction continued on Phase 3B last year, Chevron said, and the project is now expected to be completed in 2016. A California-based spokesman confirmed the new target date, but was not able to comment further on Thursday.
In China, the Chuandongbei natural gas project will now start up in 2013 instead of this year, but Chevron also said it signed a joint study agreement to explore for shale gas in the Qiannan Basin last April, and started seismic operations to evaluate it in July.
Chevron is already exploring shale resources in Argentina, where it expects to drill two exploratory wells this year in the Vaca Muerta formation, as well as in Poland and Romania.
In Romania, where Chevron has a license to explore 1.6 million acres (647,000 hectares), a multi-well program is set to begin in late 2012, and negotiations have been held on license agreements for three blocks comprising about 670,000 more acres.
Apart from Nigeria, Chevron has a busy 2012 planned for Africa, which accounts for more than one-sixth of its output.
Off Angola's coast, it expects a final investment decision (FID) next quarter on Mafumeira Sul - which should produce up to 110,000 barrels per day of crude - while later this year it will reach FID on its N'Dola field and drill two exploratory wells in the Lifua field after a successful appraisal well there last July.
In offshore Republic of Congo, early engineering work is going on in the Moho Nord project in the Moho-Bilondo Development Area, and that should reach FID next year, Chevron said in the annual report.
Back in Asia, off the southwest coast of Vietnam, FID should be reached this year on the Block B Gas Development, which is slated to reach maximum daily production of 490 million cubic feet of natural gas.

Source: Reuters, February 24, 2012

New Time lines for power sector bidders in Nigeria

Between September 25, 2012 and October 10, 2012, the Bureau of Public Enterprises (BPE) will open the financial bids of prospective investors for the privatisation of the successor companies created from the Power Holding Company of Nigeria (PHCN.)

According to the revised bid timeline issued to investors by the privatisation agency, the announcement of the preferred bidder for the 17 successor companies  by the National Council on Privatisation (NCP) will  be made on/or before October 23, 2012. 

Indeed, the Bureau will issue revised legal documents to the bidders on March 30, 2012 while April 20, 2012 is the deadline for receipt of comments by bidders on the legal documents.

The distribution/issuance of final bid documents is on May 11, 2012. The deadline for submission of technical and financial bids is July 31, 2012.

The revised transaction timeline reveals that the evaluation of the technical bids will take place between August 14 and 28, 2012. The NCP will approve the results of the technical evaluation on/or before September 11, 2012.

The deadline for the shortlisted bidders for generation companies to submit their letters of credit is September 18, 2012 while October 2, 2012 is for shortlisted bidders for distribution companies.

The NCP approval will pave way for the opening of financial bids of the shortlisted investors.

In a letter to the prospective investors, Mallam Ibrahim Babagana, the acting director (electric power) at the BPE, explained that the revision to the transaction timetable became imperative in order to address the concerns raised at the Transaction and Industry Review Conference which was held in Abuja on November 28 and 29, 2011.

Said he: “In view of the foregoing, we have been working diligently to create a bankable package of transaction and industry documents based on your feedback. Specifically, we have been working with other agencies such as the Federal Ministry of Power; Federal Ministry of Finance; Nigerian Electricity Regulatory Commission (NERC); Transmission Company of Nigeria(TCN); Gas Aggregation Company of Nigeria (GACN); Nigeria Gas Company (NGC); Nigerian Bulk Electricity Trading Company (NBET); and the World Bank to amend and harmonise the key industry documents, namely, MYTO (Multi-Year Tariff Order) 2, Transmission Use of System Agreement(TUoS), Connection/Interface Agreement (CIA),Gas Sale and Aggregation Agreement (GSAA), Gas Transportation Agreement (GTA), Power Purchase Agreement (PPA), and Vesting Contract.”

Potential bidders for the distribution companies are expected to be existing power distribution companies or core investor groups with power distribution companies as long-term technical partners.  Successful bidders will be responsible for operating the distribution companies, making the necessary investments to improve the distribution network and customer service in line with the objectives of the Federal Government of Nigeria set out in the National Electric Power Policy (NEPP.)

As for the generating companies, potential bidders/concessionaires, who should be existing local and/or international power generators or investors with power generators as long-term technical partners, will be responsible for operating the stations, improving the generation capacity and making the necessary investments in line with the objectives of the Federal Government of Nigeria set out in the NEPP. 

Source: Press Release from Nigeria's Bureau of Public Enterprises (BPE)