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

Statoil signs Abai exploration deal

Norway's Statoil has signed a heads of agreement with Kazmunaigas (KMG) to explore for oil and gas at the Abai block in the north Caspian. Under the terms of the deal, the two companies will evaluate the potential of the acreage, which lies in water depths of 8–10 metres, and set up an operating company to oversee the project.

During the exploration phase, Statoil and KMG will conduct seismic surveys and data acquisition and drill one exploration well. On top of this, Statoil will help train local personnel and provide “financial and technical assistance” to KMG's plan to build, own and operate a jack-up drilling rig in the Caspian.

This is Statoil's second stab at Abai: in 2005, the company signed a memorandum of understanding with KMG to develop Abai and the adjacent Isatai block, with the eventual aim of concluding a production-sharing agreement.

But the agreement did not lead anywhere, much to Statoil's frustration. Since then, the Kazakhs have imposed a moratorium on the signing of new offshore PSAs, which is unlikely to be lifted any time soon. Statoil has not been active in Kazakhstan since selling its stake in the Kashagan project more than 10 years ago — in hindsight, a very shrewd move given the mounting problems at Kashagan.

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

© 2011 Menas Associates

Turkmenistan pushes Trans-Caspian Pipeline at environmental conference

Turkmenistan has made another step to promote a pipeline across the bed of the Caspian Sea, this time at an environmental conference in the capital Ashgabat on February 28th.

The event, entitled "Environmental Aspects of Trans-Caspian Pipelines" was apparently attended by 300 representatives from twenty countries. Concrete information, as usual in the reclusive state, is hard to come by but representatives of Chevron, Statoil, Dragon Oil, and OMV were all apparently present. Official Turkmen websites said that the conference was intended to increase the odds of a Trans-Caspian Pipeline (TCP), which would carry gas from Central Asia to Azerbaijan, stating that the event will assist in the “search for specific ways and solutions to this critical issue [ i.e. building a TCP] that will let us approach the common goal to turn the Caspian region into a region of peace and wellbeing.”


Russia and Iran staunchly oppose the construction of a TCP. Ostensibly their concerns are legal and environmental: that the status of the Caspian has not yet been settled between all five littoral states (particularly regarding whether the Caspian is a sea or a lake), and that – absent such a legal framework – any subsea hydrocarbon projects must be agreed upon by all five littorals. This is disingenuous, ignoring the extensive oil and gas extraction which all five states currently undertake near their coastlines and which is certainly capable of creating a Caspian-wide ecological disaster.

The real reason is political and commercial: neither Moscow nor Tehran want additional pipelines to emerge which could transport Central Asian energy to world markets without crossing Russian or Iranian territory. This position was reiterated by Russian President Dmitry Medvedev at a Caspian heads-of-state summit in Baku during November. However on that occasion President Berdimuhamedov offered a defiant note, insisting that only the two participating states – i.e. Turkmenistan and Azerbaijan – had to agree on a project. Azerbaijan has repeatedly agreed to the idea in principle, and reiterated that position at the environmental conference.

Having apparently addressed the legal challenges in Baku, the Turkmen leader has now sought to address the environmental challenges in Ashgabat. The vague statements that emerged from the conference emphasise the need for the highest environmental standards to be adhered to in any subsea engineering project, and that – thanks to the experience of international companies represented at the forum – these standards could certainly be applied in the Caspian. Interestingly, no Russian or Iranian companies were publicly stated as having attended the conference.

This implies that Turkmenistan is more serious about committing to a TCP than often assumed. Disputes with Azerbaijan over ownership of certain fields, Russo-Iranian opposition and China's efforts to secure Turkmen gas, not to mention Turkmenistan's opaque decision-making, were all seen as major obstacles. President Berdimuhamedov's increasingly proactive and independent foreign policy seems to be changing all that.

Sources: Turkmenistan.ru, News.az, Trend.az

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

Thirteen IOC's qualify to bid in Iraq's gas auction

Iraq has said that 13 international oil companies have qualified to bid in next week's gas filed auction for the Akkas field, in the western desert, the Mansuriyah field near the Iranian border in the Diyala province and Siba field near Basra. The three oil fields together have estimated reserves of around 11.23 trillion cf of gas.

"Thirteen companies will take part in the gas auction and no more firms will be allowed," said Head Iraq's Oil Ministry's Licensing and Contracting Office Abdul-Mahdy al-Ameedi.

The 13 companies that have qualified to bid include Edison, Eni, Total, Korean Gas Corporation (Kogas), Mitsubishi, TPAO, Itochu, KazMunaiGaz, TNK-BP, Statoil, India's Oil & Natural Gas Corporation (ONGC), Jogmec and Kuwait Energy.

Source: Upstream

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

Azerbaijan increases gas supplies to Turkey by 2 billion m³

The State Oil Company of the Azerbaijan Republic (SOCAR) has increased gas supplies to Turkey from 13-14 million m³ to 16 million m³ per day. The increase in supply is partly due to an explosion near a pipeline transporting gas from Iran to Turkey, which meant that Iranian gas supplies in to the country were suspended. According to Turkey’s Energy and Natural Resources Minister Taner Yildiz supplies will resume in approximately 7 days.

Azerbaijan supplies gas to Turkey under a contract on the Shah Deniz offshore gas field. The countract stipulates that Turkey has to receive 6.6 billion m³ of gas per year during the field's first stage. The field's total reserves are estimated at 1.2 trillion m³.

The contract to develop Shah Deniz was signed 4th June 1996, and includes the following participants BP (operator) with 25.5 per cent, Statoil 25.5 per cent, NICO 10 per cent, Total 10 per cent, LukAgip 10 per cent, TPAO 9 per cent and SOCAR with a 10 per cent share.

Source: Trend Azerbaijan

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

Azerbaijan to supply gas to Bulgaria

A Bulgarian-Azerbaijani committee met in Baku this week to discuss the development of a Black Sea route to export natural gas from Azerbaijan to Bulgaria. The project is expected to be completed before 2013, said Bulgaeria's Bulgartransgaz director Ivan Drenovichki.

The committee discussed the options for shipping compressed natural gas to Bulgaria with the participation of Bulgartransgaz, SOCAR and the Shah Deniz consortium represented by Statoil, BP and Total. It is expected that Bulgaria will export some of the gas onward to other European detonations.

Once the all the work is completed Bulgaria is expected to be receiving two billion m³ of natural gas a year, securing as much as 50 per cent of its natural gas consumption with supplies from Azerbaijan.

Source: News Azerbaijan

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

Statoil in talks about potential pipeline projects in Shah Deniz gas field

Statoil is to begin talks with prospective customers over the supply of around 10 billion m³ of gas per year, from the Shah Deniz gas field in Azerbaijan.

"We're planning bilateral negotiations with potential customers...," said a spokeswoman for Statoil, before adding that the customers include three "potential pipeline projects". She also denied claims that Shah Deniz 2 consortium is planning a tender process, as reported in the Turkish media.

A second development phase of the Shah Deniz gas field, located in the south Caspian Basin, plays an integral role in the European Union's plan to expand its gas supply away from Russia, and offers the best potential for an easy export to the 27-country bloc. The European Commission has been strongly pushing to build a pipeline to carry that gas through Turkey to its countries.

The second development stage of Shah Deniz is expected to reach output of 16 billion m³ a year from 2016 or possibly as early as 2014.

Source: The Wall Street Journal

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

© 2010 Menas Associates