Tanzania: BG exit rumours resurface

The near-perennial rumours that BG may sell its 60% stake share in Tanzania’s Offshore Block 3 have resurfaced this week. The Sunday Times reports that BG is quietly searching for a buyer and a sale is likely, echoing rumours that have been circulating for some months. 

BG operates and holds 60% stakes in Blocks 1, 3 and 4 with Ophir holding the remaining 40% in each. The Tanzania fields are incredibly large, but their size is equalled by the cost of bringing the fields to production. Tens of billions of dollars will need to be invested, partly because the country is bereft of even the most basic infrastructure, including a port, roads, and power that would be required for a gas liquefaction plant.

This comes at a time when BG is looking to downsize its global empire, which includes the North Sea, Brazil, East Africa and Australia, following a series of profit warnings that led to the resignation of its chief executive, Chris Finlayson.

Although it is currently understood that BG is looking to sell its entire 60% stake in Tanzania’s Block 3 exploration area, BG also owns 60% of Blocks 1 and 4. This means that BG has the option of selling a minority stake, bringing in cash, reducing its share of future spending, while enabling it to keep operational control of the development.

One industry source has told Menas Associates that ExxonMobil, which is the minority partner in Block 2, may also consider buying out its partner Statoil. A pull out by BG would affect the management of the proposed LNG project because the project manager is currently a BG position based in the UK. This would be mitigated by ExxonMobil’s presence in the project already. However, no move is likely until there is agreement on outstanding issues, including gas pricing, domestic market obligations and the finalisation of the project site.

For more news and expert analysis about East Africa, please see East Africa Politics & Security.

© 2014 Menas Associates

Caspian: Bishkek looks to duty-free Kazakh oil

On 25 July, the Kyrgyz and Kazakh authorities conducted a new round of consultations in Bishkek about Kyrgyzstan’s forthcoming membership in the Eurasian Economic Union of Kazakhstan, Russia and Belarus. The meeting’s agenda covered agriculture, water resource management, the joint control of the border and energy trade. The Kyrgyz delegation was headed by economy minister Temir Sariev while Kazakhstan was represented by Deputy Prime Minister Bakytzhan Sagintayev.

As the two states’ media reported, the key result of last month’s consultations has been Kazakhstan’s promise to consider the possibility of duty-free exports of oil products to its southern neighbour, at the level of 100,000 tons in 2014 and a further 300,000 tons in 2015. Astana has also pledged to examine the Kyrgyz government’s request for a “special customs regime”, to be applied to certain categories of goods that Bishkek considers “strategic” for the domestic market, by the end of August.

This positive demonstration of neighbourly relations comes at a time when Kyrgyzstan is taking pains to resolve a major customs dispute with Kazakhstan. As we reported in our previous issue of Caspian Focus, some 480 road tankers full of Russian fuel have been blocked at the Kazakh-Kyrgyz border since April because of the lack of necessary paperwork. Kazakhstan’s customs officials have repeatedly insisted that the fuel was seized from “smugglers”. In fact, the tankers were shipped to Kyrgyzstan by Russia’s Rosneft whose CEO, Igor Sechin, recently wrote to Kazakhstan’s prime minister Karim Massimov with a plea for help.

While the merchandise has not yet been cleared, despite the direct involvement of Sechin who famously belongs to Vladimir Putin’s inner circle, fuel prices in Kyrgyzstan continue to rise incrementally. This is largely due to seasonal shifts in supply and demand, as well as June’s fire at the Achinsk oil refinery owned by Rosneft in Russia’s Krasnoyarsk region. 

In the present conditions, the seized Russian fuel would be more than welcome in the Kyrgyz market to ease the speculative pressure. As for Rosneft, it will have to pay hefty demurrage charges until the cisterns are allowed to cross the border.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2014 Menas Associates

Mozambican parliament approves new Hydrocarbon Law

Mozambique’s long awaited petroleum law has been approved by the parliament with substantial amendments by MPs who argued that the changes will strengthen the role of the Mozambican state in oil and gas exploration and production.

The bill, which will come into effect by the end of the year, was approved with votes from Frelimo and MDM. Renamo voted against the bill on the grounds the High Authority of the Extractive Industry – the body that oversees oil and gas operations - must be composed by elected members from all political parties.

The most important point in the new law is perhaps the fact that the state, through the National Hydrocarbon Company (ENH), controls the production, transport, marketing and transformation of all LNG and their derivatives.

It also states that the government must create the conditions for the involvement of Mozambican business people in the oil and gas industry. This is in response to local businesses who have been demanding a better share in the oil and gas business.

The sector is currently dominated by giant multinationals such as Anadarko and ENI and their own international service suppliers. It is very unlikely that any local company will venture into bidding for concessions of oil and gas exploration areas because they neither have the necessary expertise, nor the funds. They have, however, asked the government to introduce a special regiment that forces multinationals to contract local companies for service and products supply.

For a comprehensive analysis of Mozambique’s petroleum law, the Renamo amnesty deal - otherwise unavailable in the international press - and the political, business and security issues affecting Mozambique, please see our latest issue of Mozambique Politics and Security.

© 2014 Menas Associates

Kazakhstan: Kashagan restart unlikely until 2016

Kazakhstan’s new deputy energy minister, Uzakbay Karabalin, has told the media that the restart of commercial production at Kashagan is planned for 2016. In his view, this optimistic scenario foresees the re-launch of oil production in the first half of the year. 

However, he warned that should the North Caspian Operating Company (NCOC) consortium fail to repair the damaged pipes by the end of next year, the re-launch should not be expected before the latter half of 2016. The Kazakh authorities had previously speculated that Kashagan’s oil could come online as early as the end of 2015.

Karabalin continued that, were it to be delayed, the NCOC will be fined US$30million for each half-year. The company is also expected to cover the costs related to the repair of the oil and gas pipelines between the island’s deposits and the mainland, and the commissioning of associated infrastructure. Earlier in July, Karabalin was quoted as saying that the specific technological conditions of Kashagan were the main cause of the current production disruption. 

“In our sector of the Caspian Sea, ice is very movable… We know that many world-class oil companies work close to the Polar circle but they have a major warm current near there, the Gulfstream. They have no such ice as here. Moreover, Kashagan’s situation is complicated by high concentrations of sour gas and high reservoir pressures. As you can see, all these difficulties are inherent in one project”, elaborated the former oil and gas minister.

Karabalin also highlighted serious environmental risks that need to be taken into account by the NCOC: “One should remember that Kashagan is located within a protected area where there are over 75% of Kazakhstan’s sturgeons. Swimming birds build their nests in the vicinity of the oilfield. Thus, under the existing law, oil companies that participate in the project can work on it only after the birth of chicks. On the other hand, they cannot physically work beyond the formation of an ice cover. This said, we have serious schedule constraints in a single place”, he added.

The Kazakh authorities’ headache at Kashagan adds to the growing fears about the country’s macroeconomic stability. According to the official data, Kazakhstan’s GDP grew by 3.9% in January-June 2014, down from 5.1% last year. The IMF estimates that its economic growth would accelerate in the second half of the year to reach 4.8% at year end. 

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2014 Menas Associates

Libya: Oil exports resume from Ras Lanuf and Es-Sider

Oil exports finally resumed this week from the eastern port of Ras Lanuf following one year of closure. On 12 August, a 670,000 barrel cargo left the port for Italy. The shipment was chartered by Austria’s OMV who told a press conference this week that the cargo was on its way to Trieste to supply its refinery in Burghausen.

OMV also announced that output at its Libya operations was rising with a third quarter average of around 12,000 b/d. Although this is still some way off the much higher levels that the company was producing before the revolution, it is still a positive step given the challenges of the past year.

In other good news, the NOC spokesman, Mohamed Al-Harari, announced on 17 August that the port of Es-Sider was also set to resume exports. Al-Harari told the media that a tanker was due to arrive at the port and that it would be loading a cargo comprising 600,000 barrels of oil “within the coming days”.

Although both ports were handed over to the government in early July, following the implementation of the April 2014 deal agreed between the head of the politburo of the Cyrenaican Transitional Council Ibrahim Jedhran and the acting government, it has taken until now for Libya to find buyers.

Given Libya’s deteriorating security situation, few buyers were willing to take on the additional risk. However, the NOC reportedly dropped prices in order to attract buyers and to offset the risk and this strategy appears to have worked. This is good news for Libya and its energy sector, which has been hit with crisis after crisis over this past year.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2014 Menas Associates

Developments in US$1.2 billion Chad-CNPC arbitration court hearing

The China National Petroleum Corporation (CNPC) has denied breaking environmental rules in Chad’s oil sector and demanded the Chadian government drops its US$1.2 billion claim at an arbitration court in Paris.

The dispute began in July 2013 after Chad said it discovered large quantities of crude had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocks since 2009.

The CNPC was forced to suspend operations in Chad this May after refusing to pay the US$1.2 billion fine for "unacceptable practices" which led to "noxious spills" around drilling sites.

Secretary-general of the Chadian government, Abdoulaye Sabre Fadoul, at a news conference at the beginning of August, stated that "Amicable negotiations are no longer possible. All efforts have been in vain… That is why we have decided to take a complaint to the arbitration tribunal in Paris, as agreed under the terms of our contract with CNPC." 

As well as taking the case to the International Arbitration Chamber of Paris, the minister said the government had lodged a complaint against CNPC at a court in N'Djamena for ‘environmental destruction and endangering lives’ and had cancelled five exploration licences held by CNPC.

A spokesman for the Chinese oil company could not be reached for a response to the minister’s statement. Speaking this week at the arbitration hearing, however, a CNPC spokesperson said that the leaked oil consisted of a "small amount" and its own analysis had not shown penetration into the ground water.

The firm added that it was hoping for the "cancellation of this decision and an ongoing effort to resolve this negotiation amicably," adding that the government has declined to provide the firm with a breakdown of damage to justify the large claim.

Chad, which began exploiting its oil deposits in 2003, has a history of difficult relations with Chinese companies operating on its soil.  In March, Chadians working for Great Wall Drilling Corporation and China National Logging Corporation went on strike to denounce their working conditions and demand salary increases.

For more news and expert analysis about the Sahara region, please see Sahara Focus.

© 2014 Menas Associates

Egypt to reveal new "vision" for Ethiopia's Grand Renaissance Dam project at tripartite talks on 24 August

Tripartite discussions between Egypt, Ethiopia and Sudan over the future of Ethiopia’s planned Grand Renaissance Dam project are due to be held in Khartoum on 24 August.

The project has been a source of concern for the Egyptian government since May 2013, when images of the dam’s construction stirred public anxiety about the possible effect on Egypt’s potable water supply.

Ethiopia, however, maintains that Egypt’s water share will not be negatively affected by the successful completion of the project, set to be Africa’s largest hydroelectric dam.

In what has been viewed as a demanding and interfering move within Ethiopia, Egypt’s Irrigation Minister, Hossam El-Moghazi, told Mehwar TV that Egypt has a new “vision” regarding Ethiopia’s planned Grand Renaissance Dam project, which it hopes to reach terms on at the 24 August talks in the Sudanese capital.

In a telephone interview, El-Moghazi said the Egyptian delegation will head to Khartoum for two days of discussions on the Grand Renaissance Dam project, regional water security and defense.

“Egypt has a new vision, that will not affect Egypt’s water share, and we are expecting that the other party responds to it,” said El-Moghazi.

The talks are expected to develop the seven main points that Egypt’s President, Abdel-Fattah El-Sisi, and Ethiopian Prime Minister, Hailemariam Desalegn, previously discussed during a meeting in late June – among them fostering dialogue and cooperation between the two countries as well as regional projects to meet the growing demand for water. 

Resuming the work of the tripartite technical committee and respecting international legal principles were also among the points on which both sides had reached common ground. The committee's discussions were originally halted last December when Sudanese President, Omar Al-Bashir, announced his support for the dam during a meeting with Ethiopian Prime Minister, Hailemariam Desalegn.

Meanwhile, El-Moghazi said that Egyptian satellite images have revealed that construction has not yet begun on the part of the dam which will reserve the Nile’s water. Regardless, Egypt has demanded that Ethiopia submits the dam’s construction plans for assessment by international experts, prompting anger from within Ethiopia at Egypt’s perceived interference in Ethiopian domestic affairs.

Ethiopian Irrigation Minister, Alamayo Tegno, responded that his country was already committed to the recommendations of an international committee of experts and stressed that Egypt’s water share would not be negatively affected by the completion of the Grand Renaissance Dam.

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates

Oil production at Iraqi Kurdistan's largest-producing oilfield is set to rise to as much as 140,000 b/d by the end of the month

Oil production at Iraqi Kurdistan's largest-producing field is set to rise to as much as 140,000 b/d by the end of August despite the Islamic State’s advances into the region, the General Manager of Taq Taq Operating Company (TTOPCO), Onder Tekeli, said on 15 August.

Taq Taq Oil Field is jointly owned by the KRG (20%) and TTOPCO (80%) which is a joint venture between the Anglo-Turkish Genel Energy (55%) and Sinopec’s Addax Petroleum (45%) subsidiary. Tekeli stated "We have a target to ramp up production towards 140,000 b/d and I believe we would achieve this by the end of the month."

Radical Sunni militants of the Islamic State last week advanced to within a half hour's drive of Erbil, the capital of Iraq's Kurdish region and a hub for IOCs, before U.S. military air strikes thwarted their advance.

Several IOCs, including ExxonMobil and Chevron, operating in the previously stable Kurdish controlled region have evacuated all non-essential staff while other smaller producers, such as Afren and Taqa, have suspended operations, as reported here on 11 August.

In spite of KRG-based IOCs seeing their shares fluctuate, in a manner reflecting the Kurdish forces as they retreat and regain ground, there has been little impact on the overall oil output of the region. According to company estimates, production has only been cut by 5,000 b/d, although fighting between Kurdish Peshmerga forces and Islamic State fighters in the environs of Erbil have kept firms and investors on edge.

Currently unaffected by the Islamic State’s advances, however, Tekeli insists that morale at the Taq Taq oil field, 40km (25 miles) southeast of Erbil, remains high: "The worries started about the IS (Islamic State) fighters when they attacked the Makhmour camp. But we have not stopped working and our local staffers have expressed their commitment to us.”  Makhmour to the southwest of Erbil was the closes the fighting got to the capital last week.

Ozan Guler, production superintendent, stated that in order to increase Taq Taq oil field production beyond 140,000 bpd TTOPCO will set up three well-site production facilities to boost output: "We already have the potential to boost production up to 140,000 b/dd in our wells ... We will be setting up these new facilities whose start-up period is about 10 days."

Genel Energy, which operates the Taq Taq and Tawke oilfields in Kurdistan, has said it has evacuated non-core personnel from fields that are not producing oil. Last week it said that production was still ongoing at the two fields and it was averaging a combined 230,000 b/d.

Genel's shares fell by almost a quarter in early August as Islamic State forces advanced towards Erbil, but have since rebounded by around 12%.

At the end of trading, 15 August, they were up almost 2% at £824 (US$1,378.10). Although the rebound has slowed, Genel's shares are currently up 0.5% at £829.50 (US$1386.97).

(£1 = US$1.67).

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

Egypt: El-Sisi Announces New Mega-Project on the Suez Canal

President Abdel Fattah El-Sisi announced, 5 August, a new plan to build additional channels on the Suez Canal which would deepen and widen the current passageway and construct new channels to speed up traffic, with an aim to greatly expand traffic along the trade route.

Admiral Mohab Mamish, the Chairman of the Suez Canal Authority (SCA), has said that the new channel would take five years to be completed, although the President has subsequently said that he would like to see the project completed in just one year. 

An official with the SCA estimated that revenues from the expansion would reach US$13.5 billion by 2023, more than doubling its current revenues. We have not been able to determine how accurate these forecasts are, however, and remain sceptical about the merits of the new plan which will just cut waiting times to use the Canal and speed up transit. We are also unsure if this project, once complete, will attract additional ships to transit through it.

In the local media, the announcement has been hailed as the country’s new mega-project, and serves as a further indication of the scale of the new President’s ambitions, as well as tapping into the vein of nationalism. El-Sisi made clear that the army would take the lead and that any private partners (he mentioned that up to 20 firms could eventually be involved) would work under its supervision. 

Work has already begun, with no public discussion of the merits of this investment and we have been told informally that the thousands of vehicles working on the project will use significant supplies of fuel, which remains in tight supply in the market at times. The President noted that shares would be offered to finance this project at different prices, although the financial regulator noted that the differential pricing of shares is illegal. It still remains uncertain how this project will be financed and, if shares are sold to finance it, what the shareholder would then be entitled to in the future.

At an expected cost of US$4 billion, we believe the economy would be improved more efficiently by investing in the modernisation of Egypt’s railway system, adding to the main cities’ mass public transport systems, and power stations (given the continuing power cuts, which are now running at up to five times a day in some areas), as well as spending on road building, water and electricity distribution in poor areas.

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates

Libya: House of Representatives begins it work

The newly elected House of Representatives pressed ahead as planned and held its opening session on 4 August in Tobruk. Around 158 members of the 188 representatives who have been elected to the house so far attended the session with most of them from the liberal and federalist currents.

The Islamists’ efforts to hold the handover of power in Tripoli, rather than in the east, were a complete failure and, predictably, led to the session being boycotted by the Misratans and the Islamists, who insisted that it was unconstitutional. Even their attempts to hold a parallel meeting in the capital proved disastrous and their number was so small that no-one turned up.

Meanwhile, members of the outgoing GNC made an appeal to the Supreme Constitutional Court to rule on whether the sessions in Tobruk are legal because they should have been held in Benghazi. However, no decision will be forthcoming any time soon because the court is on holiday until September.

Despite the fuss they are making, however, the Islamists have been completely outmanoeuvred by their liberal rivals. On top of the fact that such a large number of MPs attended, the first session of the new ruling body was given international recognition through the attendance of representatives of Arab and other foreign governments, as well as from the Arab League, the Organisation of Islamic Conference (OIC) and the Africa Union (AU). Further legitimacy was afforded to the house when representatives from Morocco, Algeria, Tunisia, Libya, Egypt and the US - who held a meeting in Washington this week on the margins of the US-Africa Summit - gave their backing to the House of Representatives.

It, therefore, seems that Libya and the rest of the world is accepting the new house as a fait accompli despite the Islamists and Abu Sahmaine’s objections. This has left the Islamists in an extremely weak position and means that their winning the battle on the ground is more important than ever. As such, Libya might well end up having a political arena dominated by the liberals while the ground itself is in the hands of the Islamists.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2014 Menas Associates

Mozambique: Amnesty allows Renamo leader, Alphonso Dhlaklama, to stand in upcoming presidential elections

Mozambique's parliament has approved an amnesty law that will allow Afonso Dhlaklama, leader of the opposition Renamo party, to leave his hideaway in the bush, sign a peace accord with President Armando Guebuza and run in a 15 October election, lawmakers have said.

The law, approved late on 12 August, also applies to Dhlakama's supporters, who have clashed with the army since 2012. The violence raised fears for stability in the southern African nation, which is hoping to attract foreign investment to develop its substantial coal and offshore gas deposits.

The amnesty is part of a peace deal between Renamo and the ruling Frelimo party, adversaries in Mozambique’s 1975-1992 civil war, and means Dhlakama will not face prosecution or arrest for the attacks carried out by his followers over the last year.

The constitution bars the incumbent Guebuza from running for a third term meaning the former Defence Minister, Filipe Nyusi, will run as the Frelimo candidate. Dhlaklama is now expected to travel to the capital Maputo to sign a formal peace accord with Guebuza ahead of the 15 October election, in which he has registered as Renamo's presidential candidate.

For further information please see next week’s issue of Mozambique Politics & Security, which will provide background and analysis about the amnesty deal, otherwise unavailable in the international press.

Iraq: Talisman Energy Preparing Its Iraqi Kurdistan Assets For Sale

Talisman Energy, Canada's fifth largest independent oil and gas producer, said on 12 August that it still plans to sell all or a portion of its exploration properties in Iraq's Kurdistan region despite conflict in the area.

Brent Anderson, a spokesman for Calgary-based Talisman, said to Reuters that the company expects to begin the sale process in the coming few weeks and that an adviser has been selected to handle the marketing of the properties. He declined, however, to say who had been chosen to oversee the process. The company could sell all or part of its oilfields in the region depending on the amount of interest in the sale.

"We had anticipated going to the marketplace in the third quarter and this process has just started," Anderson said. "We have an adviser selected and we plan to go into the market with that adviser over the next couple of months."

The company is starting its sales process as 200,000 civilians, according to an UN Assistance Mission for Iraq (UNAMI) estimate, have been driven from their homes in the region in the last 48 hours and the United States carries out air strikes against the Sunni militants of the Islamic State, who have captured a third of the country.

Talisman has an interest in two oil blocks in Iraq's Kurdistan region: The Kurdamir block, which it shares with WesternZagros Resources Ltd, and its wholly controlled Topkhana property, where it has just completed the drilling of a promising well. It is now assessing the results of that drilling and has yet to release its findings.

Anderson said the company's properties have not been affected by the conflict in the region; nonetheless Talisman last week evacuated most of its non-essential personnel from the area.

Talisman, recently seen as a target of a potential takeover by Spain's Repsol SA, has long said it would like to sell all or part of its Kurdistan operations. However, the timing of the sale, coming during the fighting in the region, may deter some potential buyers.

Talisman shares, however, were up nine Canadian cents to C$11.56 by early afternoon on the Toronto Stock Exchange. C$11.56 is equal to US$10.59 and £6.32.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

Iran ready to revive Nabucco pipeline project and supply gas to Europe

Iran’s Deputy Oil Minister for International Affairs has said that Iran is ready to supply Europe with gas via the previously aborted Nabucco pipeline, adding that two European countries have already shown interest.

Speaking to the Islamic Republic News Agency (IRNA) on 11 August, Deputy Oil Minister for International Affairs, Ali Majedi, said that, with its major gas fields, Iran could supply gas to Europe via Nabucco and that the abortive gas pipeline project was useless without Iran.

As the international community considers lifting the sanctions against Iran, corporations and governments are strategically positioning themselves to take advantage of Iranian trade possibilities. Delegations from two European countries have already visited Iran this summer to discuss possible routes for gas deliveries, Majedi revealed without naming the countries. He continued that different routes were possible, including supplies via Turkey, Iraq, Syria, Caucasia and the Black Sea, adding that he saw the Turkish route as the most viable option.

The deputy minister said gas from the Shah Deniz gas field in the Caspian Sea would not be solely sufficient for the pipeline, as production at Shah Deniz would not exceed eight billion cubic meters a year, while the designed capacity of the pipeline is at least 23 billion cubic meters, therefore necessitating the need for Iranian involvement. 

Nabucco is an abortive project of a 3,300-kilometer-long gas pipeline from Turkmenistan and Azerbaijan to Germany and Austria and on to the rest of the EU. The project was estimated at €7.9 billion, although in 2012 it was estimated that the project may cost less. OMV Gas GmbH (Austria), BOTAS (Turkey), Bulgargaz (Bulgaria) and Transgaz (Romania) were parts in the consortium for pipeline construction.

Work on the project began in 2002. Initially, plans were to launch the construction in 2011, finishing it by 2014, but the project was repeatedly postponed because of problems with possible gas suppliers. In 2011, it was reported that the launch date was shifted to late 2018. In June 2013, an announcement came that the project had been closed in favour of a more promising project - the Trans-Adriatic pipeline.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2014 Menas Associates

Tanzania: CHADEMA politician, Zitto Kabwe, to consider defecting to new party

Menas Associates understands that opposition politician Zitto Kabwe is considering announcing his defection from CHADEMA to a newly established party, the Alliance for Change and Transparency (ACT).

Kabwe – universally known as Zitto – has been a CHADEMA member since his teenage years. He has represented the Kigoma North constituency since 2005 and, at 29, is still the youngest MP ever to be elected in Tanzania. He made his name in 2007 with a call for an inquiry into the granting of a Special Mining Licence to Barrick Gold for the Buzwagi Gold Mine that year. Though the inquiry was never instituted, it led to a review of mining legislation that led to the Mining Act of 2010.

Since then, Kabwe impressed as the chairman of the Public Organisations Accounts Committee between 2010 and 2013, and thereafter with the Public Accounts Committee. In recent years his ambition has made him enemies within CHADEMA’s leadership. This culminated in him being removed from all party offices in November 2013. His legal challenge is still in the courts. 

A key issue for him now is the management of Kenya’s natural resources. Kabwe was instrumental in getting Statoil’s natural gas terms into national and international media after they were leaked. He was also instrumental in drawing attention to illicit financial flows out of Tanzania and tax avoidance schemes made through mispricing and the use of shell companies. He does, however, remain sympathetic towards investors and has maintained good relationships with major companies, including Barrick Gold and BG. 

If he does move to the ACT, he would be unable to run for the presidency as he is under 40 years of age. He has in the past stated that his current term would be his final one as an MP, although that may change now that he is considering joining the ACT. Whatever he decides, Kabwe’s commitment to the management of Kenya’s natural resources will ensure he remains a national figure to watch.

For more news and expert analysis about the political, security, and business issues affecting East Africa, please see our East Africa Politics & Security publication.

© 2014 Menas Associates

Dana Gas: Favourable ruling in Iran and Crescent Petroleum Tribunal

UAE-based energy firm Dana Gas has released a statement that an international tribunal has issued a favourable ruling in the dispute over a natural gas supply contract between Iran and Dana’s largest private shareholder, Crescent Petroleum.

The tribunal ruled that a 25-year contract for National Iranian Oil Co (NIOC) to supply gas to Crescent was valid and legally binding, and that NIOC had been obligated to deliver gas since December 2005, Dana said on 9 August.

NIOC and Crescent signed the 25-year contract in 2001, with the price tied to oil. Deliveries were delayed, however, as oil prices rose and some Iranian officials and politicians called for a revision to the gas pricing formula.

Crescent Petroleum initiated arbitration proceedings in July 2009; a three-person arbitration tribunal was formed under the terms of the 2001 contract.

According to Dana, NIOC first introduced gas into its transmission network and Dana’s UAE processing facilities for commissioning purposes in July 2010. The system had to be shut down again, however, when leaks were discovered in the transmission system.

Dana did not state when it expected gas supplies to start flowing again, but a source familiar with the matter said that supplies would not begin in the near term as subsidiary agreements needed to be reached and infrastructure work completed.

The contract provides for the UAE to import some 600 million cubic feet of Iranian gas per day, although the actual amount will depend on many factors and may only become clear in coming months. The UAE is eager to obtain additional natural gas supplies to support its rapid economic growth.

In the last few years, international financial sanctions imposed by the US and Europe over Tehran’s disputed nuclear programme have restricted trade between the UAE and Iran. Dana did not say whether the sanctions might complicate efforts to implement the gas supply contract.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2014 Menas Associates

Egypt: American energy worker killed in apparent carjacking near Cairo

An American employee of Texas-based energy company Apache Corp has been killed in an apparent carjacking in the western Egyptian desert, officials said on 10 August.

"The victim was a long-time employee who works with production operations and we are deeply saddened by his death," Apache spokesman Bill Mintz said. "Apache is working with authorities and a full investigation is underway."

Mintz stated that the attack occurred on Wednesday 6 August as the employee was driving in the desert between Qarun and Karama, southwest of Cairo, although the exact details of the attack are still uncertain.

It has been confirmed that the Apache employee died as the result of gunshot wounds. Egyptian security officials have, however, stated that the worker's body was found in a car on a road outside Cairo with another foreigner who had been working with the Egyptian government-owned company Qarun Petroleum. 

Mintz said he was receiving conflicting information about whether the Apache worker was alone or accompanied by someone else but confirmed that the Apache employee was the only victim who had been shot. It does, however, remain unclear as to whether or not this means the American was the only casualty.

Egyptian security officials, who asked for anonymity as they were not authorized to speak to the media, said that investigations were ongoing to determine who was responsible for the 6 August attack. 

The victim's name was not immediately released as family members were still being notified and the nationality of the alleged survivor has not been disclosed while investigations continue. 

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates

Iraq: IOCs in Kurdistan region see shares retreat as non-essential staff evacuated

The apparent stability and growing prosperity of Iraq’s more liberal and pro-business Kurdistan region has been undermined in recent weeks as Islamic State insurgents make significant advances into the Kurdish-controlled region. IOCs that were previously unaffected by the growing violence elsewhere in Iraq, are now seeing their share prices retreat in a manner reflecting those of the Kurdish forces.

Genel Energy, one of the IOC’s reaping the benefit of the export pipeline to Ceyhan in Turkey, has seen its shares shed 17% since the start of the month. London-listed Gulf Keystone Petroleum put out a statement on 7 August confirming that its production and trucking operations at its giant Shaikan field “remain safe and secure”, but this did little to prevent its shares falling by more than 11%. Norway’s DNO - , which has exploration, development and production interests in Kurdistan - was also hit, with its shares sliding 9.5%.

Following the lead of Chevron, ExxonMobil, Afren and Taqa, these companies, as well as Hess and its partner Petroceltic, have suspended operations in the  Kurdistan region and started to evacuate non-essential staff amid spreading violence in the region.

Last week Kurdish forces lost several  towns to Islamic State displacing 150,000 people largely from the Yazidi religious minority to according to a UN estimate. 

Considered to be ‘devil worshippers’ by the Islamic State, the Yazidis pray five times a day to the Malek Taus, the Peacock Angel also known as Shaytoun in the Kurdish language. Unfortunately, Shaytoun also means ‘devil’ in Arabic. The Islamic State has been accused of issuing an ultimatum to the Yazidi community to convert to Islam or face death, and reports from refugees state that these threats have been enacted through beheadings. 

The Kurdistan Regional Government has sent its Peshmerga forces to tackle the threat and the US has started air strikes, however, resulting in the recapture of two towns from Sunni militants on 10 August, one of the first victories for a military force that until now has been in retreat.

In a statement released 11 August, Petroceltic said “In conjunction with Hess Middle East New Ventures, our partner and the operator of our exploration activities in the Kurdistan Region of Iraq, we have been closely monitoring recent events in the region. While these developments have not directly impacted our exploration activities to date, in line with other operators in the region, it has been decided, as a precautionary measure, to temporarily secure and suspend operations (including the drilling of Shireen-1 exploration well in the Dinarta licence) and to evacuate non-essential personnel”.

Hess operates Iraqi Kurdistan's Dinarta and Shakrok fields, in which Petroceltic and the Kurdistan Regional Government have stakes of 16% and 20% respectively. The partners started drilling their first well, Shireen-1, on the Dinarta block in June and had expected exploration work to last five months. However, they decided to plug and abandon the Shakrok-1 well after disappointing exploration results.

Oryx Petroleum announced on 8 August that it had implemented a number of precautionary measures to protect its employees from the security developments in the region.  In the western portion of the Hawler license area the drilling operations at the Ain Al Safra and Banan sites have been temporarily suspended, both sites secured, and non-essential personnel relocated to Erbil given the proximity of such locations to recently reported hostilities in northern Iraq. 

In the central portion of the Hawler license area, drilling operations and facilities construction at the Demir Dagh field remain secure and operational but continue at reduced levels primarily due to the departure of certain third-party service company personnel from the site. Production from the Demir Dagh field has also been shut-in. 

The situation is moving fast in Iraq and with no sign of any easy solution to the advance of the Islamic State, which now controls parts of Syria and Iraq, including key oilfields that are funding the militants, investors should stay wary.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

Chad to take CNPC to Paris arbitration court

Chad is reportedly making preparations to take China National Petroleum Corporation (CNPC) to an arbitration court in Paris after compensation talks stalled. Chad has levied a claim for US$1.2 billion in compensation from the Chinese state-owned company for breaking the country’s environmental rules, according to reports.

Chad's oil minister, Djerassem Le Bemadjiel, told a news conference on Saturday that the move was "to avoid further environmental degradation, not to make place for other companies".

The dispute began in July 2013 after Chad said it discovered large quantities of crude had been dumped into pits dug in the Koudalwa region, where CNPC has held licenses to several oil blocks since 2009.

The CNPC was forced to suspend operations in Chad this May after refusing to pay the US$1.2 billion fine for "unacceptable practices" which led to "noxious spills" around drilling sites.

Secretary-general of the Chadian government, Abdoulaye Sabre Fadoul, at a news conference last week, stated that "Amicable negotiations are no longer possible. All efforts have been in vain… That is why we have decided to take a complaint to the arbitration tribunal in Paris, as agreed under the terms of our contract with CNPC."

As well as taking the case to the International Arbitration Chamber of Paris, the minister said the government had lodged a complaint against CNPC at a court in N'Djamena for ‘environmental destruction and endangering lives’ and had cancelled five exploration licences held by CNPC.

A spokesman for the Chinese oil company could not immediately be reached for comment.

Chad, which began exploiting its oil deposits in 2003, has a history of difficult relations with Chinese companies operating on its soil.  In March, Chadians working for Great Wall Drilling Corporation and China National Logging Corporation went on strike to denounce their working conditions and demand salary increases.

For more news and expert analysis about the Sahara region, please see Sahara Focus.

© 2014 Menas Associates

South-East Asia: Washington hopes ASEAN Regional Forum can lower tensions in the South China Sea

In a meeting with Southeast Asian nations this weekend, U.S. Secretary of State John Kerry will press for a voluntary freeze on actions aggravating territorial disputes in the South China Sea, in spite of Beijing's rejection of the idea.

A priority for Kerry at the ASEAN Regional Forum (ARF) would be to lower tensions in the South China Sea while accelerating efforts by ASEAN and China to agree on a code of conduct. China and four members of the ten-nation Association of Southeast Asian Nations (ASEAN) have rival claims to the South China Sea, through which about US$5 trillion of maritime trade passes annually.

Speaking to Reuters on 4 August, Daniel Russel, the State Department's senior diplomat for the East Asia region, said "The regional economy is too important and too fragile for any country or any claimant to use the threat of military force or paramilitary force in retaliation, for intimidation, or as a coercive effort."

In a news briefing, he continued there was room for rival claimants "to take some voluntary steps, and to identify actions they find troubling if not provocative on the part of other claimants, and to offer, if everyone will agree, to renounce those kinds of actions." Such steps could include abiding by an existing agreement not to seize unoccupied land features, or more significantly, a moratorium in land reclamation efforts.

China, which will also participate in the ARF meeting, rejected the idea of a freeze, however, saying it could build what it wanted on its South China Sea islands. China claims 90% of the sea, which is believed to contain oil and gas deposits and has rich fishery resources. 

Yi Xianliang, deputy head of the Chinese Foreign Ministry's Boundary and Ocean Affairs Departments, said that if the United States had such a proposal, he had not seen it and that in any case the South China Sea was an issue for countries directly involved.

The Philippines has also stated its intentions to propose a freeze at the ARF meeting, as well as the implementation of a code of conduct and arbitration to settle disputes. In July, Manila called for a meeting of the four ASEAN claimants - itself, Brunei, Malaysia and Vietnam - ahead of August’s ARF to hammer out a common stand in dealings with China. 

China has been increasingly assertive in pressing its territorial claims and Washington fears misunderstandings could inadvertently lead to open conflict. China's recent withdrawal of an oil rig from waters also contested by Vietnam, reported in Menas Borders on 16/07/2014, had removed a serious irritant but China’s neighbours have been left with serious questions about China's long-term strategy.

For more information about China’s claim to the South China Sea please see our Border Focus: South China Sea briefing.

Kenya: President Kenyatta to impose capital-gains and windfall tax legislation within months

Kenyan President, Uhuru Kenyatta, stated in a 2 August interview that Kenya will impose capital-gains and windfall taxes on oil, gas and mining companies within months to ensure the East African nation maximizes benefits from its mineral resources.

Enacting the laws this year will be a positive signal to investors that Kenya is keen on creating necessary conditions for the industry. “This is something that we are very clear about,” Kenyatta said from Nairobi’s State House, “We want to ensure that we as a country also are able to benefit from both the windfall and capital-gains tax.” 

Recently oil reserves have been found in northern Kenya, while gas exploration continues and the nation’s potential for gold production is being studied. 

Kenya hopes the new legislation will prevent similar situations to Tullow’s experience in Uganda, where the company is appealing against the state revenue authority’s demand that it pay capital-gains tax of about US$473 million following its sale of assets in Uganda. 

For an in-depth analysis of this issue and how it will affect the exploration companies operating in the country please see our upcoming issue of East Africa Politics & Security.

© 2014 Menas Associates

Mozambique: 300 members of the opposition MDM party have defected in Nampula Province

At least 300 members of the opposition MDM party have defected in Nampula Province because of an alleged lack of transparency in selecting candidates for MP.

Senior MDM member Jose Manuel de Sousa has, however, dismissed the move, saying that the defectors were driven by self-promotion rather than political motives. He also accused the ruling Frelimo party of orchestrating the move to undermine the MDM’s ambitions in the general elections.

The most senior defector is Juma Molide, who had been the co-ordinator of the MDM election office and played a pivotal role in the MDM's victory in Nampula Province’s mayoral elections last year. He told Mozambique Politics & Security that he was disappointed to find that he was twenty-third on the list of MDM candidates for Nampula Province which, because of its large population, is the electoral swing province with a total of 49 parliamentary seats being contested.

For Molide to find his way in to parliament, the MDM opposition party would have to win about 50% of the Nampula seats. When asked to react to Molide's grievance, de Sousa said that by insisting on a higher place on the list, Molide was implicitly anticipating that the MDM could not win the general elections.

For more news and expert analysis about Mozambique, please see Mozambique Politics & Security.

© 2014 Menas Associates

Caspian Region: Assaubayev family acquisition sees Max Petroleum shares soar

Max Petroleum’s shares have soared in value since the 4 August announcement that the influential Assaubayev family is taking a majority stake in the company. It is hoped that the placing will raise £37 million and enable the continued development of the Sagiz West field.

AGR Holdings, an Assaubayev held company, is investing £37 million of new funds via a share subscription, which will give it a 51% majority ownership of Max Petroleum. The new shares are priced at 1.64p each, a 37% premium to Friday’s closing price, and it has been reported that Aidar Assaubayev and Kanat Assaubayev will join the Max Petroleum board.

For an in-depth analysis of this issue, its ramifications for the region, and a feature on the Assaubayev family, please refer to this month’s upcoming issue of Caspian Focus.

Cameroon: Boko Haram abducts wife of President Paul Biya's security icon

Sunday 27 July was a prodigious day in Cameroon after Boko Haram’s unprecedented and deadly attack upon the homes of two key Cameroonian politicians in the country’s Far-North Region. 

Besides partially exposing the country’s security weakness, the attack was also a pertinent reminder to the authorities in Yaoundé that Boko Haram is becoming increasingly ambitious, organised, and deadly. Ultimately, the attack that left 18 dead and saw a further 17 kidnapped, including the wife of Cameroon’s Vice Prime Minister, was an ominous warning to President Paul Biya’s government that it is in a battle against a tenacious enemy that is willing and able to use alternative tactics to strike Cameroon’s most senior politicians.

The attack took place in Kolofata, in the Far-North Region of Cameroon, home to the country’s Vice Prime Minister, Amadou Ali, and a prominent Muslim leader and critic of Boko Haram, Seini Boukar Lamine, who is also the town’s mayor. Eyewitnesses stated that the attackers arrived in a convoy of eight 4x4 pickups vehicles and several motorbikes. The militants precisely targeted the two politicians’ residences, firing a rocket-propelled grenade into Amadou Ali’s home before leaving with his wife as their prisoner. 

The attacks came on the fifth day of a running gun battle between Boko Haram and Cameroon soldiers in the north of the country. Cameroon has deployed more than a thousand soldiers along its border to help combat the Nigerian armed group, which last week launched a massive assault on the north-east Nigerian town of Damboa near the Cameroonian border, displacing more than 15,000 people. The group gained international notoriety after kidnapping more than 270 schoolgirls in northern Nigeria in April, but has been active in the country for more than 12 years.

There were very specific reasons for the attack and the kidnapping in Cameroon. For further detailed analysis on why Boko Haram targeted Amadou Ali - and on his pivotal role in Cameroon’s current and future political and security hierarchy – see Cameroon Politics & Security – 30.07.14  

Tanzania: 7 July Grenade attack in Arusha linked to a feud within the gemstone industry

Menas Associates has learned from one of our sources in Arusha that the 7 July attack on the Verma Restaurant at Arusha’s Gymkhana Club may have been related to a feud within the Tanzanite gemstone industry.

When the initial blast occurred, local news sources sought to identify this attack and an attack on 3 July attack - when an improvised bomb was hurled into the home of a leading Muslim cleric which wounded two people - as part of a series of bombings using home-made explosives. 

The 7 July attack, however, is now thought to be an isolated incident because both the explosives and method used are incongruous with the other attacks. Eyewitnesses confirmed that the attack was conducted by two unknown assailants who threw a canister through the Verna Restaurant’s window as they drove past on a motorcycle. Police officer Issaya Mngulu told the AFP news agency that "We do not know who the attackers are, but we do not suspect any involvement with al-Shabab."

It is now understood that the attack deliberately targeted a group of gemstone dealers including a staff member of Tanzanite One, which is the country’s largest Tanzanite mining company. Following the attack, we have learnt that one of the company’s sales agents has resigned citing threats to her personal security. 

Tanzanite One is understood to have been producing very little since the buy-in by Tanzania’s State Mining Company (STAMICO). Under the conditions of the buy-in, STAMICO promised to address the long-running issue of underground security. These issues have, however, not been tackled and armed clashes with small scale private-sector miners operating in neighbouring concessions have become a regular occurrence.

For more news and expert analysis about East Africa, please see East Africa Politics & Security.

© 2014 Menas Associates

Algeria: Sonatrach's latest scandal

On 30 July we reported that Sonatrach’s CEO, Abdelhamid Zerguine, had been sacked and replaced by Said Sahnoun, the former Vice President for Production. Sahnoun will be Sonatrach’s ninth CEO since President Abdelaziz Bouteflika first took office in 1999 and the fifth in the last four years.

Although no reasons have been given for this surprise move, which adds to the reputation of Sonatrach’s management instability, it had been hypothesised that the open conflict between Zerguine and Energy Minister, Youcef Yousfi, over divergent visions for the exploitation of shale gas and the marketing strategy for natural gas in Europe was the primary cause. 

Our sources in Algeria indicate, however, that Zerguine was sacked because he resisted pressure from above to conduct corrupt under-the-counter deals of the kind that gave rise to the “Sonatrach scandal” in 2010.

The key name in this new scandal appears to be Ali Haddad, an extremely wealthy and powerful businessman who is a close friend and associate of the president’s brother, Saïd Bouteflika. Ali Haddad played a key role in financing and thereby ensuring Bouteflika’s re-election for a fourth term in April 2014.  

The price for his support now appears to be that his massive construction company, Groupe ETRHB, is given more Sonatrach contracts.

It is too early to know how foreign IOCs will react to this sudden development.  If it deters them from participating in the current licensing round and Algeria’s much-trumpeted unconventional oil and gas exploration and development, the cost and damage to Algeria will be no less great than the original 2010 scandal.

For a comprehensive analysis of this emerging scandal please refer to Algeria Politics & Security – 01.08.14

Iraq: Bitter-sweet developments for KRG as US Judge rules that US$100 million oil dispute should be settled in Iraq

On 29 July we reported that a US judge, in response to a lawsuit filed by the Baghdad government, had signed an order to seize the US$100 million crude oil cargo from the United Kalavrvta tanker anchored off the Texan coast. It now appears that there have been some bitter-sweet developments for the KRG.

While US Magistrate Nancy Johnson issued an order to seize the tanker’s cargo, she also told lawyers for Iraq that the dispute should be resolved through the Iraqi court system. As the tanker is anchored 60 miles offshore, 50 miles outside of federal jurisdiction, the cargo cannot be seized.

Although the inability to seize the tanker’s US$100 million cargo is an obvious plus for the KRG it has come at a heavy price. Prior to the seizure order the KRG had managed to keep the end-buyers of its oil anonymous. However, the main US customer for the cargo has now been named as Lyondell Basell, who has subsequently stated that it would not take it, or any subsequent shipments, until the matter had been resolved by Erbil and Baghdad.  

The filing in federal court, Houston, stated that Iraq's central government has asked Iraq's Federal Supreme Court to block the Kurdistan Regional Government from exporting any crude until its ownership can be determined. The central government contends that the oil is not the sole property of the Kurdistan region of Iraq but belongs to the country as a whole. The KRG, however, asserts that its independent oil sales are their efforts to recoup the funds allocated to it, which the Iraqi central government has failed to supply them with.

The latest legal challenge follows Iraq’s bringing of criminal charges against the Kurdistan government in May, alleging theft of oil revenues. However, Kurdistan has failed to appear in court to address the charges and this "failure to comply with the summonses has effectively blocked the Federal Supreme Court from hearing the merits of the case." Harold Watson, a Houston lawyer representing Kurdistan, did not have an immediate comment on the filing when contacted by Reuters.

The U.S. government has expressed fears that independent oil sales from Kurdistan could contribute to the breakup of Iraq as the government in Baghdad struggles to contain the ultra-hardline Islamic State, a group of Sunni Islamist insurgents who have captured vast areas of the country.

Washington has pressured companies and governments not to buy crude from the KRG, but it has stopped short of banning U.S. firms from buying it outright.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

Nigeria: President Jonathan sacks NNPC's GMD

On 1 August it was announced that President Goodluck Jonathan had dismissed both Nigerian National Petroleum Corporation’s (NNPC) Group Managing Director (GMD), Andrew Yakubu, and Hamidu Namtari, Managing Director of the NNPC’s upstream subsidiary, Nigerian Petroleum Development Company (NPDC).

The President’s special media and publicity adviser, Dr. Reuben Abati, released a statement naming Borno State’s Dr. Joseph Dawha as NNPC’s new GMD and Anambra State’s Anthony Ugonna Muoneke as NPDC’s new GMD. The statement continued that “All the appointments are with immediate effect,” but refused to comment on the reasons behind the dismissals. 

Reports in Nigeria, however, suggest that the dismissals are linked to the allegations by the Central Bank of Nigeria’s former governor, Lamido Sanusi, over the NNPC’s misuse of public funds and an upcoming PWC audit of NNPC finances and revenue losses. 

The statement continued that President Jonathan had approved a further shake-up of NNPC management with Ms. Aisha Mata Abdurrahman reassigned to the corporation’s Commercial and Investment GMD and Dr. Attahiru Yusuf’s appointment as its Business Development Group Executive Director.

This week’s issue of Nigeria Politics & Security and the August issue of Nigeria Focus will provide expert analysis about the changes and the reasons behind them.

Iraq: US court order halts US$100 million sale of Kurdish oil

There have been new developments in the tit-for-tat struggle between Baghdad and Erbil over independent oil sales oil sales by the KRG. The Kurds have suffered a fresh blow to their attempts to sell the oil that they have been exporting via Turkey. It has been reported that an US judge, in response to a lawsuit filed by the Baghdad government, has signed an order to seize the US$100 million crude oil cargo from a tanker anchored off the Texan coast.

It was reported at the end of July that the United Kalavrvta, which left the Turkish port of Ceyhan in June, had sailed to the US and was planning to discharge at the Texan port of Galveston. The tanker informed the authorities that it was intending to discharge its cargo at sea into smaller vessels that would then deliver the crude to the port. On 27 July the US Coast Guard in Houston inspected the Marshall Islands-flagged tanker and cleared it for unloading which seemingly opened the way for the delivery to take place.

However, in its filing in the US District Court for the Southern District of Texas, Iraq asked for an order allowing the cargo to be seized by the US Marshals Service, arguing that independent Kurdish oil sales amounted to “smuggling”. Court filings showed on 29 July that the order had been granted by Judge Nancy Johnson. 

AET Offshore Services, an intermediary hired to unload the tanker, had previously asked in a separate court filing on 28 July if Iraq’s claims were valid. It is still not known who has purchased the crude oil and the court filings took no steps towards remedying this, by refusing to name the end-buyer. Companies have so far proved reticent about purchasing crude exported to Turkey from the Kurdish region because Baghdad has threatened legal action against all buyers of non-approved oil exports.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

Libya: Kidnapped Maltese oil worker released unharmed

A Maltese oil worker abducted by a Libyan militia on 17 July was released unharmed yesterday. According to a report, 42 year old Martin Galea has already flown back to Malta after eleven days in captivity.

Prime Minister Joseph Muscat welcomed the retired armed forces captain on the tarmac at Malta airport and thanked the diplomatic service, the army and the Muslim community in Malta for helping secure his release.

Galea is an employee of Arab Geophysical Exploration Services and was abducted from the suburbs of Tripoli while he was being driven to work.

The Maltese government said that no ransom was paid for Galea's release and that it was too early to say who had abducted him or why. Given the increased spate of kidnappings by criminal gangs, however, the motivations are just as likely to have been financial rather than ideological.

Although he did not elaborate, Galea said the Maltese consul in Tripoli, Marisa Farrugia, had saved his life. A Maltese government official stated "We will fill in the blanks only after the Security Service has spoken to him. So far what we know for a fact is that he has been released and that was our priority.”

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2014 Menas Associates

Mozambique expanding electricity supply to meet the needs of a growing economy

Mozambique´s Energy Minister Salvador Namburete says that his government is implementing plans to expand electricity supply to meet the needs of a growing economy. According to the state-run Radio Mozambique, the minister made the announcement at his Ministry’s Coordinating Council in the Niassa Province’s northern provincial capital of Lichinga.

Namburete stated that demand for electricity in Mozambique grew at an annual rate of 13% between 2011 and 2013 compared to 10% per annum in the previous decade. Demand is particularly high in the northern provinces of Nampula, Cabo Delgado and Niassa, with growth rates of 20% annually, almost double the national average.

While the government’s electrification programme has extended the national grid to 121 of the country’s 128 districts, Mozambicans will have to wait until the end of 2014 for the remaining seven districts to be connected. Until then, however, patience will remain high as significant steps to redress the electricity supply failures have been made in the last decade.

Mozambique is a major regional producer of hydro-electric power, mainly from the 2,075 MW capacity Cahora Bassa dam but, in 2004, only 7% of the country’s population had access to electricity. Over the last decade, however, the government’s electrification programme has raised that figure to just over 40% in 2014.

For more news and expert analysis about Mozambique, please see Mozambique Politics & Security.

© 2014 Menas Associates

Algeria: Rumours of an army purge

There is both mystery and a lack of information surrounding the reported “retirement” of senior army officers. More than a month ago, it was reported that a list of 74 senior officers had been drawn up by army chief of staff and deputy defence minister, General Ahmed Gaïd Salah, to be considered for retirement by the High Council of Military Function (HCFM). We then heard that the list may have contained several hundred names and that the “Bouteflika camp”, which includes Gaïd Salah, was already in the throes of “removing” senior army officers who were known or suspected of being opposed to Bouteflika’s fourth mandate. We have since been hearing that this “purge” is being disproportionately weighted against the DRS.

According to our sources, it is because this year’s normal 5 July process of army retirements has turned into this sort of purge, that there has been so little public information on what is happening. Although our sources are adamant that such a purge is taking place, we are finding it impossible to get a firm confirmation of how it is being conducted and who has been removed.

It is obviously a sensitive and politically dangerous process and one that can only be accomplished successfully if it is kept as secret as possible. We are hearing, but cannot confirm, that several hundred officers have been fired or are perhaps still in the firing line, with the DRS being most targeted.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2014 Menas Associates

Nigeria: Rivers State's Governor Rotimi Amaechi faces impeachment threat after Adamawa State debacle

The 14 July impeachment and removal from office of Adamawa State’s governor Murtala Nyako, who is a prominent member of the opposition All Progressives’ Congress (APC), has descended into a debacle as credible reports suggest that he has fled to Europe via Ghana.

Although one of his assistants insists he is not running from the law - in this case the Economic and Financial Crimes Commission (EFCC) and a possible case for treason in relation to his statements on Boko Haram, - the EFCC's media and publicity head, Wilson Uwujaren, stated that in order to locate the elusive Nyako the commission is planning to declare him wanted.

These developments have fuelled suspicions that the ruling People’s Democratic Party (PDP) may next target Rivers State’s governor Rotimi Amaechi. The governor, who last year defected to the APC from the PDP, was detained while en route to campaign for Kayode Fayemi in the Ekiti State gubernatorial election in June.

The Rivers State APC chapter has released a statement lauding Amaechi’s qualifications while suggesting that he is among four additional APC governors “pencilled down by the Presidency” for impeachment, along with those from Borno, Edo and Nasarawa States. APC activists proclaim that they will not allow such “evil machinations” to succeed.

Amaechi issued a statement through his chief of staff, Chief Tony Okocha, that any impeachment plot against him would fail because all 25 former PDP Rivers State assembly members defected to the APC and just six remain loyal to the PDP.

In Adamawa State, the State House of Assembly, which stayed loyal to the PDP, was able to obtain the two-thirds majority in favour of for Nyako’s impeachment. A similar challenge against impeachment was issued in Edo State by Governor Adams Oshiomole who is another APC supporter.

For more detailed expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2014 Menas Associates

Algerian anger at Bastille Day celebration particpation

Further illustration of what many people now believe is part of the price Algeria is having to pay for France’s support for President Abdelaziz Bouteflika’s fourth mandate surrounded Algeria’s participation in the 14 July Bastille Day celebrations in Paris.

Those not versed in the often-unfathomable complexities of Franco-Algerian relations might have viewed France’s invitation to Algeria to participate in this year’s Bastille Day celebrations as a timely gesture towards improving relations between the two countries.

However, as news leaked out that Bouteflika had accepted the invitation and that three Algerian military officers and the Algerian flag might be present at the Champs-Élysées celebrations, there were expressions of anger from both France’s far right and almost the entire Algerian political spectrum.

At the heart of the anger in Algeria are the established position of almost all political leaders and, above all, the veterans of Algeria’s War of Independence that Algeria would never accept such an invitation until France, the former colonial power, apologies for the crimes it committed in Algeria.

After many days of debate within the local media, with almost total opposition to any participation, Bouteflika’s decision to send an envoy, in the person of Energy Minister Youcef Yousfi, has united, albeit perhaps temporarily, almost all political parties and strands against Bouteflika. Particularly dangerous for the presidential circle, however, is that many of Bouteflika’s supporters have now come out against him. With his popularity already at an all-time low, one can only wonder what threats or promises the Elysée may have made him.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2014 Menas Associates

Libya: In-fighting between Islamist militias in Derna

Besides the ongoing fighting in Tripoli and Benghazi another flashpoint has emerged in the eastern coastal town of Derna. Unlike the current conflict in Libya’s two largest cities the clashes in Derna are between rival militant Islamist groups rather than between mainstream Islamist and liberals. A major battle has developed between two main groups: the Abu Slim Martyrs Brigade and the Majlis Shura Shabab Al-Islam fi Derna (the Shura Council of the Youth of Islam in Derna) and its allies.

This battle is mainly one for control over the town but there are also distinct differences of ideological approach. The Abu Slim Martyrs Brigade was formed during the revolution and comprises mainly former members of the Libyan Islamic Fighting Group (LIFG). Its cadres were formed during the era when national militant movements emerged out of the Afghanistan war of the 1970s and returned home to challenge authoritarian regimes.

The Majlis Shura Shabab Al-Islam fi Derna is completely different. Formed very recently, its members are generally young and aspire to more transnational jihadist ideologies and movements. The group reportedly includes a number of young Libyans who returned from fighting in Syria, Mali and Algeria.

These militant groups have become increasingly embroiled in a tit-for-tat battle of killings and revenge killings that have seen some key commanders on both sides assassinated.

Meanwhile some of the groups that are affiliated with the Majlis Shura Shabab Al-Islam fi Derna are now declaring their allegiance to ISIS forces in Iraq and Syria. This includes the recently emerged Al-Bata’a Brigade and the Abu Mahjan Al-Ta’ifi Brigade, whose emir declared his support for Abu Bakr Al-Baghdadi, the head of ISIS, after he declared a caliphate in Iraq and Syria. As a symbol of this support a group of 50 mujahedeen, including fighters, doctors and oil engineers, was sent to Iraq to support the cause. The 50 also included a number of jihadists who are willing to sacrifice themselves as suicide bombers.

That these brigades and groups are allying themselves with ISIS is a worrying development which brings a whole new dimension to the militancy that has implanted itself in Derna and elsewhere in the country.

For further analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2014 Menas Associates