Category Archives: Oil

World’s leading oil conference reveals African future

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From: News Release – African Press Organization (APO)

19th Africa Oil Week held from October 29th until November 2nd in Cape Town

CAPE-TOWN, South-Africa, September 18, 2012/ — With over 900 delegates from 75 countries and 85 presentations from leading speakers – representing super-majors, independents, national oil companies, governments, licensing agencies and banks – the 19th Africa Oil Week shall host the world’s leading deal-making and senior-level networking oil/gas industry in Africa, thus retaining its reputation as one of the top world-class conferences on the global calendar.

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http://appablog.wordpress.com/2012/09/18/worlds-leading-oil-conference-reveals-african-future/

Saudi Arabia’s Energy Policy

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From: Yona Maro

The oil market has long been dominated by the Kingdom of Saudi Arabia because of its ability to produce and export large quantities of crude oil, a valuable globally traded commodity. Saudi Arabia’s role is further enhanced by its ability to maintain a surplus capacity that can act as a strategic cushion during times of market tightness, allowing production to be expanded in relatively short order. For that reason the kingdom has been crucial to the stability of the oil markets.

http://csis.org/files/publication/120831_Akhonbay_SaudiArabiaEnergy_Web.pdf

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Karibu Jukwaa la www.mwanabidii.com
Pata nafasi mpya za Kazi www.kazibongo.blogspot.com
Blogu ya Habari na Picha www.patahabari.blogspot.com

Powerful Tanzania is threatening the tiny neighboring Malai with military action over the disputed oil and gas exploration in Lake Nyasa which is shared by the two nations

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News Analysis By Leo Odera Omolo

Reports emerging from both Dar E Salaam and Lilongwe says Malawi which is currently locked up in serious dispute with the neighboring Tanzania over the oil and gas exploration in Lake Nyansa has now withdrawn aero planes that were making aerial mapping of Lake Nyasa which is also known as lake Malawi, after Tanzania warned the exercise was in a violation of its territorial waters.

Tension has been building up in recent weeks over Malawian oil exploration in the lake, which is shared by the two countries as well as ferries and tourist boats ”intruding into Tanzanian waters.”

Malawi claims the entire lake as its own, but Tanzania insists the border between the two countries runs through the middle of the lake.

The matter has remained unresolved since the two neighboring nations gained political independence in early 1950s.

Local but impeccable sources from KASUMBU IN Kyela district – a bust dusty town which is located on the border has revealed in a telephone interview that the planes are no longer flying in the area.

‘Life here continues to be normal; all the talks about tension with Malawi emanates from Dar Es Salaam”, said one villager who is a resident in Lusungo who requested for his anonymity.

However, villagers’ of the Malawi side of the border are reported to have fled and abandoned their homes, fearing that war could break out at any time.

MeanwhileTanzania’s Minister for Foreign Affairs Benard Membe recently told hushed parliamentary session in the Central Tanzanian City of Dodoma that Malawi must cease oil and gas exploration on the disputed lake. All diplomatic channels could be exhausted in order to resolve the simmering border conflict, he said.

However, the former Tanzania’s Prime Minister Edward Lowassa who is now the chairman of his country’s Parliamentary committee on defense, security and foreign affairs was last week quoted by he local media as saying that Tanzania was ready to go to war if need be.

“We know the cost of war, because of our experience in Uganda. We urge the government, a the Foreign Affairs Minister said in parliament, that let’s exhaust all the diplomatic channels, but we are ready to defend our sovereignty at any cost”, said Lowassa.

Lowassa as speaking to newsmen after a briefing by senior Tanzania People Defense Forces officers who told his committee that the army is prepared for a military confrontation, should diplomacy fail.

“We are satisfied with progress being made by the government o the diplomatic front, but military preparations must also be made to make sure all options are available when it comes to making the final decision,’ the former Prime Minister said

Earlier Malawi had vowed to continue with oil and gas exploration in the lake, defiantly dismissing the demand by Tanzania to halt prospecting.

“We categorically put it to them that, said far as we are concerned, the entire lake belongs to Malawi,” Patrick Kalambe the Principal Secretary in Malawi’ Ministry 0f Foreign Affairs said I a recent statement. He said the saw no reason to stop the oil exploration project,”

A week ago Minister Membe said “exploration activities I the northeast part of the lake should be shelved to pave the way for dialogue to resolve the crisis.”

Malawi’s oil exploration affects villages in Kyela district that depend on fishing and farming along the eastern shore.

Lake Nyasa is the home to a variety or ornament fish, which are exported to Europe.

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Tanzania to launch exploration of oil in Lake Tanganyika

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TANZANIA TO START OIL AND GAS EXPLORATION IN LAKE TANGANYIKA AND ALSO TO BUILD A MULTIMILLION DOLLARS BUSINESS CENTER AROUND KILIMANJARO AIRPORT

Reports Leo Odera Omolo

Information emerging out of Dr Es Salaam says Tanzania now envisages three multimillion dollars ambitious development program which include the launching of oil exploration in Lake Tanganyika.

Dar seeks to join other East African Community partners nations like Kenya and Uganda, which of late have join the ranks of oil producing African nations.

Tanzania also plans to construct a city around its Kilimanjaro International Airport {KIA} to tap into tourism and business opportunities.

The government, says the report, has secured at least USD300 million to develop a state of the art commercial hub at Dar Es Salaam Port.

It has revealed that an Australian firm Beach Energy Limited has commenced 2D seismic acquisition over its Lake Tanganyika South concession in Tanzania.

The acquisition is being undertaken by Fugro Oceanseismica, and is expected to take approximately two months to acquire and seven months to process and interpret.

“Currently Beach Petroleum [Tanzania limited} has spent approximately USD 11million on its exploration efforts in Tanzania and by the end of 2012 it will be close to USD 18 million,” says Danny Burns, the company’s manager international and new ventures.

The ferry MV Mwongozo was upgraded into a seismic acquisition vessel with the necessary equipment with the on board to check the quality of the 2D seismic data after it is acquired.
Beach Energy through its contractor Fugro Oceansismica Oceansis mica SPA, has a lease agreemen with the owners of the ferry, MSCI, and has already spent more than USD one million refurbishing the vessel.

Burns was also quoted in the local media a saying that Lake Tanganyika is frontier oil and gas exploration area where little data had been collected before Beach Energy commenced exploring in 2010.

It has also been reported that Tanzania has secured at least UYSD 300 million {Tshs471.6 billion} to develop a sate of the art commercial hub at Dar E Salaam port.

The project is funded by Mara Group, a 15 year old Pan-African multi-sector business conglomerate with operations covering Information Technology, Business Process Outsourcing real estate development asset management infrastructure hospitality packaging and media. The group has a presence in 18 African countries and employs more than 4,000 people in its establishment.

The Chief Executive Officer of the Mara Group Mr Ashish Thakkar was quote last week as having said that the project will include the largest retail mall in East Africa, two internationally branded hotels, a modern convention center and a medical tourism hospital.\ The CEO said the facilities will include a modern business park, residential compound, police station and 500 residential units for the policemen.

The project consists of internationally branded hotels one five star and the other three star, and a huge convention centre,” he said adding that there will also be office blocks and service apartments.

According to the CEO Tanzania has a huge gap in the market for high quality integrated mixed use real estate developments?

The project located in Dar es Salaam will offer Tanzanians a modern environment to “live work and play”,and change the face of the City.

The contract for the construction project was signed by the Permanent secretary in the Ministry of Home Affairs Mbarak Abduwakil, Inspector General of police Said Ally Mwema and the directors of Mara Group Thakkar and Prashant Manek in Oystrabay suburb.

On the envisaged plan to construct a city around its Kilimanjaro International Airport,Tanzania ants to tap into tourism and business opportunities.

Kilimanjaro Airport Development Company {KADCO} is developing a five-year master plan to transform KIA into a modern tourist and duty-free shopping city.

The chairman of the KADCO board of directors Hassan Kibelloh said experts from the company are working on the plan, which will be ready in a few weeks to create a city that can compete with UAE’s Dubai.

He added that apart from the 41-year old air terminal, the KIA area, which lies at the meeting point of the Northern Zone regions of Arusha, Kilimanjaro and Manyara, is a wide stretch of unoccupied land.

“The location is to become a ‘city” at the center of Moshi and Arusha, where prospective investors will establish massive shopping centers, high class tourist hotels, duty free ports,

Export Processing Zones, educational institutions, custom bounded warehouses, curio shops, golf courses and large game ranch,” he said.

“We are now inviting potential investors to establish major ventures in the locality, all roads and international air routes will be leading to Kia, said the board acting managing director Bakari Mrusuri I a recent interview

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THE COMMENCING OF COMMERCIAL OIL PRODUCTION IN WESTERN UGANDA COULD SPARK OFF VIOLENT PROTESTS AS TRADITIONAL LEADERS AND CULTURAL INSTITUTIONS LAY DEMANDS FOR THEIR SHARES OF OIL REVENUES.

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Reports Leo Odera Omolo

Tension is building up following growing agitation for direct sharing in oil revenue by communities in Western Uganda oil wells regions are reportedly is casting a pall over the future prospects of the country’s political stability as it moves to the commencing of commercial oil production.

The traditional leaders of Bunyoro, the areas where the bulk of the oil reserves lies underneath, led the charge in late May his year, when they stormed parliament in the capital, Kampala demanding a 12.5 per cent royalty on oil revenue.

And last week another cultural institution in North Western Uganda joined the bandwagon. Although no figures are available to give an idea of exactly how much the Nebbi Cultural Institution would be expecting, experts say ,the development raises the prospect of possible wrangling as marginalized communities resource rich areas stand up for what they believe to be once in life time opportunity to improve their lot.

Fear persists, however, that these demands could take a direction of violent protest if a sense that they are not being adequately compensated for their land, employment or getting community development and broader social investments emerges.

“I communities begin demanding for higher percentage in shares, it will set a precedent where mineral sites may brig conflicts as they start fighting for their shares of royalties. Far from brining wealth and health, we may get ethnic politics,” said Ndebesa Mwbestya, a Makerere University don in the Department of History and Development studies.

Apparently the cultural institutions view their demands as a necessity for peaceful co-=existence with the oil companies operating in their localities. That is why mid June the Nebbi Cultural leader Rwoth Charles Umbidi spelt it out what hi flock expect from the oil companies- improved schools, hospitals and construction of cultural sites on top of jobs to appease the gods ‘ of our ancestors”. We do not want our gods to be annoyed with noise during exploration, so to appease them we must perform our rituals.” said Umbidi.

While it is a popular view that the communities hosting the mineral wealth got a share of revenues, Bunyoro’s demand is likely to escalate the tension between the Kingdom and the central government of President Yoweri Museveni, if government’s amendments to the Finance Bill is passed in its current form A district may, in consultation with the ministries responsible for culture and local governments, grant a share of the royalties due to the district, to a cultural or traditional institution, “reads the proposed law.

Ideally, this leaves the traditional leaders at the mercy of the local government which is expected to raise disagreements and political temperature.

Ends

Uganda has floated tender for consultancy to build 2 billion dollar oil refinery in Kabaale, Hoima district

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Writes Leo Odera Omolo

INFORMATION emerging from the Ugandan capital, Kampala reveals that the government has floated an international tender for consultancy service on the logistics for building a USD 2 billion oil refinery in Kabaale, Hoima district, some 420 kilometers South West of the capital, Kampala.

Officials at the state-owned Petroleum Exploration and Production {PEPD} at the Ministry of Energy confirmed this adding that they were also looking for a lead investor for the refinery, which will have an initial capacity of 60,000 barrels of crude oil per day.

“The search for the lead investor will start next month through international bidding, according Mr Ernest Kubondo, the Commissioner in-charge of PEPD, the planned refinery will be operated under a public private partnership.

The Ministry of Energy is soon acquiring some 29 square kilometers of land from local communities as part of the preparatory phase for the refinery.

The successful consultant will conduct a route survey from the Kenya’s coastal port City of Mombasa to Kabaale to Kasese limitations for transport and recommend specific location of the site for the refinery and its boundaries. advise on shipment expected during construction and overall operation of the refinery,’ said Kabambe Kaliisa, the Permanent Secretary at the Ministry of Energy.

The PS said the interested consultants are required to obtain bid documents after paying USD 40 {Ushs 100,000}and submit them by June 21,2012.

Notice of he best bidder will be issued and published on July 11 and contract awards by the end of July in an exercise to be carried out under the Public Procurement and Disposal of Public Assets Act of 2003.

Uganda consumes about 550,000 cubic meters of refined fuel annually,85 per cent of which is imported through Kenya and 15 per cent through Tanzania.

Local production of crude oil has not started,

Tullow Oil PLC a British oil exploration firm, jointly with Total of France and China National Offshore Oil Corporation are currently working on details of refining 200,000 barrels per day of crude oil from Lake Albert basin by 2015.

“The parties are currently discussing how the investment in the project to build a refinery near Lake Albert will be shared,” the report quoted Elly Karuhanga, the chairman of the Uganda Chambers of Mines and Petroleum.

Major production from the Lake Albert basin is expected approximately 36 months after Ugandan government approves a plan for the development.

“Options are being weighed to allow the sale of small volumes of crude oil from well testing to industry as well testing as some small scale power projects,” said George Casenove who is in charge of Tullow’s media relations.

Uganda’s nascent oil and gas industry provides opportunities for both local and international investors to make money following the free-market policy adopted in the early 1990s.

“There are opportunities in the entire value chain from exploration,”said Energy Minister Irene Mukoni.”

Ends

Tullow now extends its oil exploration to Western Kenya district of Nyakach near Lake Victoria

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Writes Leo Odera Omolo.

Encouraged and buoyed by its recent major discovery of massive oil deposits in the remotest Northern Kenyan district of Turkana, Tullow, the British oil exploration firm has now focused its attention to the Western Kenya region of Nyakach within the County of Kisumu in Nyanza Province.

Tullow is now set to begin a round of oil prospecting in Nyakach district following a visit to the region by its technicians.

The company team of experts were welcome to the area last week by he Nyakach District Commissioner Chaunga Mwachunga who was accompanied by the area MP Polyns Ochieng’ Daima.

In a joint address to members of the Hindu Council of Kenya said officials from Tullow have secured a certificate of exploration from the Ministry of Energy.

The MP said the Permanent Secretary in the Ministry o Energy had informed him of the potential for oil in the area and that he will take up the matter to Parliament to expedite the exploration.

He said the prospecting is part of the government efforts to explore mineral in the region, with Nyakach believed to have oil deposits.

Speaking in his office at Pap Onditi, the DC confirmed that he had received technical officers from Tullow who toured the area early last week with a promise to start putting up a drilling machine in the area b middle of June.

The government, He said, had already earmarked some regions for exploration of certain useful minerals and oil.”This region was marked and Tullow were awarded the certificate to carry out exploration activities for oil.

Tullow Oil general manager for Kenya Martin Mbogo confirmed that an advance team had visited the area to conduct a block assessment.”What we are doing is surveying the area and checking issues of infrastructure, security and community issues. We expect too start the prospecting around August,”Mbogo said.

The discovery of oil deposits in Nyakach could open up the area for development and raise the standard of living. The oil wells be the first to be sunk in the region, which is very close to Lake Victoria eastern shorelines.

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Multinational oil and gas exploration firms scramble for eight new offshore blocks in Kenya

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Writes Leo Odera Omolo

SEVERAL multinational oil exploration companies are expected to begin bidding for eight new offshore oil and gas exploration sites in Kenya I the coming weeks.

According to the reports appearing in the local media, this follows a move by the Ministry of Energy to publish an official gazette notice of eight new offshore sites.

While the government had indicated in March this year that it was marking out the eight blocks, delays in gazetting the sites meant the blocks could not be leased out.

The gazette notice brings the total number of exploration blocks in the country to a total of 46.Major natural gas finds in the past three years mainly in Tanzania and Mozambique have increased investors interest in Africa’s offshore blocks.

Meanwhile other report says that the Royal Dutch Shell has agreed to buy in cash-money, the exploration interests of London based Cove Energy Plc, East Africa for USD 1.8 billion.

The cash offer will enable Royal Dutch Shell to gain entry into the East African region, which is at the center of global interest due to the recent years.

“East Africa has seen a significant increase in exploration activity in recent years. Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell entry into Kenya and Mozambique.

Shell’s latest offer is subject to receiving written consent from Mozambique’s mineral resources Minister. The Anglo-Dutch firm has a 50 per cent interest in offshore exploration areas five and six with a depth of 3,000 meters in Tanzania.

In February, Thailand state-owned PTT topped Exploration and Production {PTTEP} topped off Shell’s initial offer to buy Cover Energy, sparking a takeover battle for the acquisition of the London Stock Exchange listed company.

PTTEP announced it would offer USD 1.77 billion for Cove, which was a premium of some USD 200 million, to counter Shell’s earlier offer of USD 1.57 billion.

Cove Energy Plc has a 8.5 interest in Mozambique’s Ruvuma offshore area one; and a 10 per cent stake in Ruvuma offshore.

In Kenya, Cove Energy Plc has a 10 per cent in offshore area 1.5,10 per cent in 17;25 per cent in 1.10A;;15 per cent in1.10B and a 10 per cent in 1.11A.

“Shell will make an excellent partner in the Ruvuma liquefied natural gas project given its extensive project given its extensive project development experience,” said Cove’s executive chairman Michael Elaha.

In the case of the new scrambles for the new offshore blocks in Kenya experts believe there is a high probability of a gas find in Kenya because its coastline shares the same geological formation with some geological formation with some of the exploration blocks found in Tanzania.

Increased activity in the oil and gas exploration business is expected to come as good news to Kenya as the country seeks to reduce its fuel imports.

The firms are expected to negotiate with the government for rights to explore acreage in water depths of between 3,000 and 4,000 meters.

Interest in Kenya’s exploration blocks has raised since UK firm Tullow Oil announced the country’s first oil discovery in Turkana in March this year. The announcement resulted in firms listed on the New York and London stock exchanges such as Premier Oil and Apache Oil staking a claim in Kenya’s exploration business such as Cove Origin Oil, and Pan-continental heightened their exploration work.

Total France is said to be negotiating with the government for Production Sharing Contract for one of the new blocks 1.22 Apache Corporation. Exxon Mobil and Anadarko Petroleum Corporation of the United States, Royal Dutch Shell, Statoil of Norway and Petronas of Brazil are among firms interested in exploring the new sites.

Kenya’s Petroleum Commissioner Martin Heya said discussions with prospecting firms seeking to be awarded new acreage will be on a first come first-serve basis.”We want to award acreage to firms that have technical muscle has seen smaller players like Cove, Origin Oil and Pan-continental either exit the scene or remain with monitoring interests through buyouts.

Kenya’s Ministry of Energy in December 2011asked the Director of Survey to expedite the survey work of new offshore areas to facilitate the publication of sites and award acreage to prospecting firms.

Total wants the 1.22 acreage to increase its presence in Kenya. Last year, the firm announced its acquisition of 40 per cent interest in areas 1.5, L.7,1.11A, 111B and 1.22 subject to approval by Kenya authorities.

Ends

Tanzania MPs are seeking the authority of the House Speaker to probe financial scam at the power supplying firm

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Writes Leo Odera Omolo

Reports emerging from Dar Es Salaam says Tanzanian MPs are up in arms and seeking the mandate of the House Speaker to allow the House Committee on Energy and Minerals the authority to launch a full scale investigations into the alleged fraud and bribery involving the purchase of fuel for an independent power generating firm.

Sources alleged that millions of dollars paid to purchase fuel for the Independent Power Tanzania Limited {IPTL plant, which is located in Dar E Salaam could have been swindled,

Legislator Zito Kabwe the chairman of the Public Corporation Accounts Committee was quoted by the local media as saying that legislators want the committee to probe several oil supplying firms and government officials over the deal that forensic expert say could see the government losing more than USD 54 million for fuel that was never supplied to the plant.

According to Kabwe, there was allegations of fraud and corruption among officials of the Ministry of Energy and Mines.

The legislator said that there were also doubts regarding whether the tender procedure was followed according to the Public Procurement Act of 2004

The government in November2010 used the emergency tender system to allow two oil-supplying firms, Oryx Oil and Total, to import fuel for the generation of the IPTL plant, which is located on the outskirt of Dar Es Salaam.

The government was spending approximately Tshs 15 billion {USD 10 million} every month from November 2010 to February 2011 for the purchase of fuel meant for IPTL operations.

January Makamba, chairman of the Energy and Minerals Committee of Parliament who is an MP fro the ruling CCM party, said the committee is still waiting to hear from the Speaker. He said the committee would not be able to start investigations without the authorization of the House Speaker.

“There have been complaints concerning the tender, leading to suspicions of corruption among officials at the Ministry of Energy and Mineral, but we cant start investigation right now; as a procedure, we need to have permission fro the Speaker,” he added.

The government estimates that at least USD 54 million meant for the purchase of heavy fuel oil for IPTL may have been stolen.

The private firm’s multimillion-dollar 100MW power supplying contact with the Tanzania Electricity Supply Company, Tanesco, has dogged by controversy throughout.

A new audit report details wasteful procedures and overvaluation of supplies of heavy fuel from a local oil firm.

The Energy and Mineral Minister William Ngeleja said in parliament last that the government spent Tshs 46 billion {USD 28.7 million}to purchase oil for IPTL plant from November 2010 to February 2011.

The power crisis currently facing the country has compelled Tanesco to pay Tshs 19.2 billion {USD 12 million} to IPTL every month for production o 60mw instead of the initial production of 100mw.

In 1995,Tanesco signed agreement with IPTL, a joint venture between a Malaysian firm, Mechmar Corporation, and a local investor, VIP Engineering and Marketing Company Ltd for the purchase of 100mw of power from diesel generators for 20 years.

VIP Engineering owns 30 per cent equity while Mechmar Corporation of Malaysia owns 70 per cent.

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Facts You Must Know About Nigeria Fuel Subsidy

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From: Yona Maro

Pastor ‘Tunde Bakare delivered this expose on Fuel Subsidy at The Latter Rain Assembly a few hours ago. Please read, digest, and share with as many people as you can. ENOUGH IS ENOUGH!!!

1) DEFINITION

To subsidise is to sell a product below the cost of production. Since the federal government has been secretive about the state of our refineries and their production capacity, we will focus on importation rather than production. So, in essence, within the Nigerian Fuel Subsidy context, to subsidise is to sell petrol below the cost of importation.

2) THE UNSUBSTANTIATED CLAIMS OF THE FEDERAL GOVERNMENT

The Nigerian government claims that Nigerians consume 34 million litres of petrol per day. The government has also said publicly that N141 per litre is the unsubsidised pump price of petrol imported into Nigeria. (N131.70 kobo being the landing price and N9.30 kobo being profit.)

3) ANNUAL COST OF IMPORTATION

Daily Fuel Consumption: 34 million litres

Cost at Pump: N141.00

No. of days in a regular year: 365 days

Total cost of all petrol imported yearly into Nigeria:

Litres Naira Days

34m x 141 x 365

= N1.75 trillion

4) COST BORNE BY THE CONSUMERS

Nigerians have been paying N65 per litre for fuel, haven’t we? Therefore, cost borne by the consumers =

Litres Naira Days

34m x 65 x 365

= N807 billion

5) COST OF SUBSIDY BORNE BY THE GOVERNMENT

In 2011 alone, government claimed to have spent N1.3 trillion by October – the bill for the full year, assuming a constant rate of consumption is N1.56 trillion.

Consequently, the true cost of subsidy borne by the government is:

Total cost of importation minus total borne by consumers, i.e. N1.75 trillion minus N807 billion = N943 billion.

Unexplainable difference: N617 billion

The federal government of Nigeria cannot explain the difference between the amount actually disbursed for subsidy and the cost borne by Nigerians (N1.56 trillion minus N943 billion = N617 billion).

6) BOGUS CLAIM BY THE GOVERNMENT

A government official has claimed that the shortfall of N617 billion is what goes to subsidising our neighbours through smuggling. This is pathetic. But let us assume (assumption being the lowest level of knowledge) that the government is unable to protect our borders and checkmate the brisk smuggling going on. Even then, the figures still don’t add up. This is because even if 50% of the petrol consumed in each of our neighbouring countries is illegally exported from Nigeria, the figures are still inaccurate. Why?

WORLD BANK’S FIGURES: POPULATIONS OF WEST AFRICAN COUNTRIES

NIGERIA: 158.4 million

BENIN: 8.8 million

TOGO: 6 million

CAMEROUN: 19.2 million

NIGER: 15.5 million

CHAD: 11.2 million

GHANA: 24.4 million

The total population of all our six (6) neighbours is 85.5 million.

Let’s do some more arithmetic:

a) Rate of Petrol Consumption in Nigeria: Total consumed divided by total population:

34 million litres divided by 158.8 million people = 0.21 litres per person per day.

b) Rate of Petrol Consumption in all our 6 neighbouring countries, assumed to be the same as Nigeria:

0.2 litres x 85.5 million people = 18.35 million litres per day

Now, if we assume that 50% of the petrol consumed in all the six neighbouring countries comes from Nigeria, this value come to 9.18 million litres per day.

7) PATHETIC ABSURDITY

There are two illogicalities flowing from this smuggling saga.

a) If 9.18 million litres of petrol is truly smuggled out of our borders per day, then ours is the most porous nation in the word. This is why: The biggest fuel tankers in Nigeria have a capacity of about 36,000 litres. To smuggle 9.18 million litres of fuel, you need 254 trucks. What our government is telling us is that 254 huge tankers pass through our borders every day and they cannot do anything about it. This is not just acute incompetence, but also a serious security challenge. For if the government cannot stop 254 tanker trailers from crossing the border daily, how can they stop importation of weapons or even invasion by a foreign country?

b) 2nd illogicality:

Even if we believe the government and assume that about 9.18 million litres is actually taken to our neighbours by way of smuggling every day, and all this is subsidised by the Nigerian government, the figures being touted as subsidy still don’t add up. This is why:

Difference between pump price before and after subsidy removal =

N141.00 – N65.00 = N76.00

Total spent on subsidizing petrol to our neighbours annually =

N76.00 x 9.18 million litres x 365 days = N255 billion

If you take the N255 billion away from the N617 billion shortfall that the government cannot explain, there is still a shortfall of N362 billion. The government still needs to tell us what/who is eating up this N362 billion ($2.26 billion USD).

ILLOGICAL ASSUMPTIONS

i) We have assumed that there are no working refineries in Nigeria and so no local petrol production whatsoever – yet, there is, even if the refineries are working below capacity.

ii) Nigeria actually consumes 34 million litres of petrol per day. Most experts disagree and give a figure between 20 and 25 million litres per day. Yet there is still an unexplainable shortfall even if we use the exaggerated figure of the government.

iii) Ghana, Togo, Benin, Cameroun, Niger, and Chad all consume the same rate as Nigeria and get 50% of their petrol illegally from Nigeria through smuggling.

These figures simply show the incompetence and insincerity of our government officials. This is pure banditry.

9) FACT 9: The simplest part of the fuel subsidy arithmetic will reveal one startling fact: That the government does not need to subsidise our petrol at all if we reject corruption and sleaze as a way of life. Check this out:

a) NNPC crude oil allocation for local consumption = 400,000 barrels per day (from a total of 2.450 million barrels per day).

b) If our refineries work at just 30%, 280,000 barrels can be sold on the international market, leaving the rest for local production.

c) Money accruing to the federal government through NNPC on the sale, using $80/bbl – a conservative figure as against the current price of $100/bbl – would be $22.4m per day. Annually this translates to $8.176bn or N1.3 trillion.

d) The government does not need to subsidise our petrol imports – at least not from the Federation Account. The same crude that should have been refined by NNPC is simply sold on the international market (since our refineries barely work) and the money is used to buy petrol. The 400,000 barrels per day given to NNPC for local consumption can either be refined by NNPC or sold to pay for imports. This absurdity called subsidy should be funded with this money, not the regular FGN budget.

If the FGN uses it regular budget for subsidising petrol, then what happens to the crude oil given to NNPC for local refining that gets sold on the international market?

10) TACTICAL BLUNDER

The federal government is making the deregulation issue a revenue problem. Nigerians are not against deregulation. We have seen deregulation in the telecom sector and Nigerians are better for it, as even the poor have access to telephones now right before the eyes of those who think it is not for them. What is happening presently is not deregulation but an all-time high fuel pump increase, unprecedented in the history of our nation by a government that has gone broke due to excessive and reckless spending largely on themselves. If the excesses of all the three tiers of government are seriously curbed, that would free enough money for infrastructural development without unduly punishing the poor citizens of this country.

Let me just cite, in closing, the example of National Assembly excesses and misplaced spending as contained in the 2012 budget proposal:

1.Number of Senators 109
2.Number of Members of the House of Representatives 360
3.Total Number of Legislators 469
4.2012 Budget Proposal for the National Assembly N150 billion
5.Average Cost of Maintaining Each Member N320 million
6.Average Cost of Maintaining Each Member in USD $2.1 million/year

Time has come for the citizens of this country to hold the government accountable and demand the prosecution of those bleeding our nation to death. Until this government downsizes, cuts down its profligacy and leads by example in modesty and moderation, the poor people of this country will not and must not subsidise the excesses of the oil sector fat cats and the immorality precipitate fiscal scandal of the self-centred and indulgent lifestyles of those in government.

Here is a hidden treasure of wisdom for those in power while there is still time to make amends:

PROVERBS 21:6&7

“Getting treasures by a lying tongue is the fleeting fantasy of those who seek death. The violence of the wicked will destroy them because they refuse to do just.”

A word of counsel for those who voted for such soulishly indulgent leadership:

“Never trust a man who once had no shoes, or you may end up losing your legs.”

This is the conclusion of the matter on subsidy removal:

i) “If a ruler pays attention to lies, all his servants become wicked.” (Proverbs 29:12)

ii) “The Righteous God wisely considers the house of the wicked, overthrowing the wicked for their wickedness. Whoever shuts his ears to the cry of the poor will also cry himself and will not be heard.” (Proverbs 21:12&13)

Thanks for your attention. God bless you all.

Pastor ‘Tunde Bakare

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Tembelea www.mwanabidii.com Kwa mijadala Moto Moto

Kujiondoa Tuma Email kwenda

Saudi Arabia in the New Middle East

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from Yona Maro

The United States’ relationship with Saudi Arabia has been one of the cornerstones of U.S. policy in the Middle East for decades. Despite their substantial differences in history, culture, and governance, the two countries have generally agreed on important political and economic issues and have often relied on each other to secure mutual aims. The 1990-91 Gulf War is perhaps the most obvious example, but their ongoing cooperation on maintaining regional stability, moderating the global oil market, and pursuing terrorists should not be downplayed.
http://i.cfr.org/content/publications/attachments/Saudi_Arabia_CSR63.pdf

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Kuchangia Wahanga wa Mvua DSM +255786 806028 Kwa Airtel Money na +255767806028 kwa Mpesa

Sudan: Khartoum Suspends Southern Oil Exports

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from Judy Miriga

Folks,

Al-Bashir is playing riddle mischief with peoples lives, he fakes war to South Sudan with the help of Museveni, this is crimes against humanity…….it is unacceptable and this must stop immediately. It is because he wants full control of Oil and Gas on his terms. People of the world must stand together to help South Sudan stability against invasion of Al-Bashir through the help of Al-shabaab.

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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Sudan: Obama Renews Sanctions Against Khartoum
2 November 2010

document

President Barack Obama has renewed sanctions agains the Sudanese government in Khartoum.

The following is the text of a letter he sent to the Speaker of the U.S. House of Representatives and the President of the U.S. Senate, announcing his decision:

November 1, 2010
Dear Madam Speaker: (Dear Mr. President:)

Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date.

In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice stating that the Sudan emergency is to continue in effect beyond November 3, 2010.

http://www.un.org/

The UN provides water to the displaced in south Darfur. Sanctions against Sudan have been renewed, apparently as part of efforts to stop the violence in Darfur.

The crisis constituted by the actions and policies of the Government of Sudan that led to the declaration of a national emergency in Executive Order 13067 of November 3, 1997, and the expansion of that emergency in Executive Order 13400 of April 26, 2006, and with respect to which additional steps were taken in Executive Order 13412 of October 13, 2006, has not been resolved.

These actions and policies are hostile to U.S. interests and pose a continuing unusual and extraordinary threat to the national security and foreign policy of the United States. Therefore, I have determined that it is necessary to continue the national emergency declared with respect to Sudan and maintain in force sanctions against Sudan to respond to this threat.

Sincerely,
BARACK OBAMA

Sudan: Bashir Urges Army to Crush All Rebellions
26 November 2011

Khartoum — The Sudanese president Omer Hassan al-Bashir has called on the armed forces to finish cleaning up all rebel pockets across the country particularly in Darfur, South Kordofan and Blue Nile.

Speaking before the National Congress Party (NCP) general conference Bashir said that rebellions broke out in these areas driven by mercenaries and foreign agents who put the country in crisis.

Sudan is battling forces from the Sudan People’s Liberation Movement North (SPLM-N) in Blue Nile and South Kordofan, in conflicts that erupted this year.

Daily Nation

The SPLM-N used to be the northern sector of the South Sudan dominant party when the country was united.

Bashir again reiterated that Sudan will adopt Islamic Shari’a law but emphasized that this is not about penal code but establishing a “Quaranic society”.

The Sudanese leader said that the entire world is undergoing changes and that people everywhere and not just in Sudan are looking for freedom.

“We want to free the will of the people from subordination and oppression….humanity needs [Prophet] Mohammad’s guidance,” Bashir said.

Sudan: Khartoum Suspends Southern Oil Exports
28 November 2011

Khartoum — Sudan suspended South Sudanese oil exports through its territory owing to dispute over transfer fees, the former’s oil minister Ali Ahmad Osman announced on Monday.

Osman said that the exports had been halted since November 17. “The South Sudanese government has not paid $US727 mn, the pending amount since October,” Osman said.

He added that Sudan will not allow any oil or petroleum to pass through unless they abided by the written agreement between the two states.

Sudan: UN – 60,000 Displaced in Blue Nile
25 November 2011

Damazin — The number of people fleeing from Sudan’s southern Blue Nile state has reached 60,000 people, a report issued by the United Nations Office of Humanitarian Affairs (UNOHA) said on Friday.

The displacement comes as result of constant fighting between the Sudanese armed forces and the opposition Sudan People’s Liberation Army (SPLA) in the state since September 1, 2011.

According to the report, the continued confrontations are still forcing civilians to flee and exposing them to serious damage. The latest air strikes launched by the Sudanese Air Force (SAF) on November 12 have left several dead and many wounded.

The UN High Commissioner for Refugees (UNHCR) said last week that about 1, 200 people had fled Blue Nile state to South Sudan’s Upper Nile state.

Uganda: Museveni’s Oil Secrets Finally Coming Out ……Mmmmh…!!!

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from Judy Miriga

He he heeee…..!!!

What became of Kenya’s Oil and Gas with Triton saga?

They better not touch Willy Mutunga and Nyachae………!!!

It is getting juicy…….Cheers ….!!!

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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Uganda: Museveni’s Oil Secrets Finally Coming Out
Andrea Bohnstedt
22 October 2011

Stick a hot-pink little umbrella in your drink, lean back and enjoy the show! That’s at least what I felt when I followed the discussions in Uganda’s parliament about the production-sharing agreements (PSA) with the oil firms.

President Museveni’s government has always kept the PSAs carefully guarded. The people can’t, mustn’t know what’s going on with this national resource. Security reasons, of course – ‘It’s like a war’ â-‘ and really, no need to worry your pretty little heads anyway. It’s best left in the hands of the president and his men who will know what to do with all that oil. And the president’s son and his men were guarding it, so really, what’s the worry?

This threw up a bit of an issue when the Ugandan government got into a fight with Heritage Oil over whether the company was liable to pay capital gains tax on the sale of its assets to Tullow Oil. Heritage said ‘Oh no we aren’t!’, GoU said ‘Oh yes you are!’ – and for any outsider, it was difficult to assess because, well, the PSAs were secret.

But things got properly interesting when Uganda’s MPs – pretty much across party lines – decided to ask their speaker to recall parliament to discuss the oil agreements and the overall oil sector, and then also insisted on seeing the PSAs. Parliament was eventually recalled, the request to see the PSAs was also eventually granted. But the restrictions placed on their access were ridiculous: No copies, no note taking, no taking away the documents, no talking about them. Not exactly conducive to analyzing very technical agreements.

And then it got more interesting – and murky: President Museveni was properly outraged that anyone – as suggested in a Wikileaks cable – should think that he’d take bribes. Yes, I laughed, too. But in this specific case, he might actually have had a point: If ENI indeed did pay him, they didn’t get very much in return. So far, at least.

An MP then accused Tullow Oil of bribing various government officials, which Tullow also emphatically denied. The Ugandan Independent just published an interesting back story on Wednesday, describing how they had received documents showing bribes paid by Tullow to Foreign Minister Kutesa and then Energy Minister Hilary Onek. They tried several avenues of investigating the truth of these accusations, but could not find sufficient evidence.

Parliament resolved to investigate Prime Minister Amama Mbabazi, Foreign Minister Sam Kutesa and Internal Affairs Minister (and former Energy Minister) Onek. More aggravation for Kutesa -Museveni’s son’s father in law – who had already been taken to court alongside government chief whip John Nasasira and Minister of State for Labour Mwesigwa Rukutana for their alleged embezzlement of funds for the 2007 Commonwealth Heads of Government Meeting (CHOGM).

All three have ‘stepped aside to clear their name’, to use a time-honoured Kenyan phrase. And in contrast to fellow accused, former Vice President Gilbert Bukenya, they were not locked up, but let out on bail. Mbabazi and Onek are still clinging on by the seat of their pants: Onek says that he will resign ‘when the parliamentary probe begins’, but may well be forced out by a censure motion.

There are many interesting issues in this whole debate: In contrast to e.g. debates over car loans, MPs appeared less motivated by their own interests and, across party lines, actually pushed a sensible agenda that is of interest to all citizens. This is no doubt an encouraging development, and I wonder if they can keep this momentum.

I doubt that Museveni can afford to sacrifice Kutesa, one of his key backers, and in the past, dragging high-ranking government members to court has hardly ever resulted in any credible prosecutions (undoubtedly a bit of a déjà vu for Kenyans). But there is certainly a whole lot of pressure on the president’s entourage at the same time that support from his own party appears to be falling: NRM MPs joined opposition MPs in pushing for more transparency in the oil sector, and Museveni must be busy pondering how he can bring those unruly NRM kids back in line.

For Uganda’s nascent oil sector, this latest development has been more than overdue: MPs want the legal and regulatory framework for the oil sector completed before any further decisions are made. This is something that Uganda’s government had long, long dragged its feet on, despite a great many offers of support.

For Tullow, trailblazers in development of the country’s oil sector, the news are not so good: at the very least, they face further delays in concluding the farm in of CNOOC and Total, partners that the exploration company needs to bring in both finances and technical expertise on oil production.

Government needs to authorise this deal, but Museveni refused to agree to the stabilisation clause that would protect them from legal and tax changes – a standard agreement without which it is impossible to borrow against assets and, therefore, invest. And this happened even before parliament got involved. They will certainly hope that Uganda doesn’t renege on its contracts with them on a wider scale. And the beginning of oil production will be pushed back yet again.

The writer is an independent country risk analyst and publishes the online business magazine, www.ratio-magazine.com.

Kenya: “Sonko storms KPC offices over Sinai fire tragedy”

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From: Tebiti Oisaboke

Strong man Sonko bin Mbuvi is on the headlines once again. This time clad in an all time boxing and fireman’s gear ready for Kenya’s highest boxing belt. He stormed into the KPL’s offices demanding explanations about the reckless accident which has claimed 100+ lives. My heart and feelings goes to the families, relatives and friends of those who lost loved ones. Arap Sonko should have done the same with teacher’s union when they demanded the recruitment of an additional staff members. Sonko, you are a national leader and not just an MP for Makadara.

TOI

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Sonko storms KPC offices over Sinai fire tragedy
http://www.ntv.co.ke

Three members of parliament and their supporters stormed the Kenya pipeline headquarters demanding an explanation on the fire tragedy that left a trail of destruction in the Sinai slum. The group led by Makadara Member of Parliament Gideon Mbuvi alias Mike Sonko and his Embakasi counterpart Ferdinand Waititu roughed up security officers at the entrance before forcing its way to the lift. The group was however unable to speak to the company management. The MPs are demanding full compensation for the victims and their families.

Uganda: Tullow Oil has announced more discovery of oil and gas in Uganda’s Lake Albert basin

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Reports Leo Odera Omolo

NEWS emerging from Kampala says that the London-based Tullow Oil has announced its discovery of two more oil wells in Western Uganda.

The Irish company says it has encountered oil line with pre-drilling expectations in Albertine basin.

The oil prospecting company said it had discovered hydrocarbon {oil and gas} bearing reservoirs in Jobi-East 1 and Mpyo-3 well sunk in exploration area EA-1 seismic in the Lake Albert Rift basin.

A gross one billion barrels of oil has been discovered to date in Uganda’s Albertine Rift. With many prospect still to be drilled, Tullow Oil Plc believes the basin has an additional 1.5 billion barrels of oil yet to be found.

“Jobi-East-I and Mpyo 3B well results mark an excellent start to the next phase of exploration and appraisal campaign in the basin to determine the total oil resource base, says Angus McCross, the Tullow’s exploration director.

The logging and sampling operations confirmed the presence of oil in two high quality reservoir zones. In addition, gas has also been logged and sampled with sands.

Tullow Oil has interest in EA-1 as well as exploration area 2 and 3A in Uganda. This firm gained a foothold in the landlocked country through the acquisition of Energy Africa in2004 and Hardman Resources in 2007.

“We look forward to more exciting wells as we endeavor to determine the total oil resources base, which will underpin the basin-wide development preparation in progress,” adds McCross.

At the same time Tullow CEO Aidan Heavy was also quoted as saying that plans to accelerate production stage of highly successful Uganda blocks are underway.

In the neighboring Kenya meanwhile, a Canadian oil exploration firm, Vanoil Energy, will spend USD 4.6 million on acquisition of seismic data in Block 3B in Northern Kenya in preparation for drilling of oil and gas wells.

The Canadian firm has contracted the Bureau of Geophysical Prospecting {BCP] to carry out the seismic survey to map out potential drilling sites.

Completion of the data acquisition is expected by the end of September 2011. Dal Brynalsen the Vanoil CEO said the objective of the 2011 seismic program me is to delineate more leads in Block 3B and upgrade three known leads to possible drillable target.”We are very pleasant to have executed a second agreement and look forward to engaging such a high quality organization to implement our seismic plans,” he said.

Evaluation is going on for 2010 seismic program which cost over USD 5 million Vanoil has executed another contract with BGP for USD 3.5 million involving acquisition of 373 kilometer data.

Additional costs will be incurred on technical equipment audit, quality assurance control, data reprocessing, interpretation and integration with other geophysical or geological data.

A crew is being mobilized to commence field operations as a sensitization grass roots resident in the area is ongoing.

Ends

EAC has ok-ed the construction of a new natural gas pipeline from Dar to Mombasa

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Reports Leo Odera Omolo

INFORMATION emerging from the EAC secretariat in Arusha says the EAC has agreed on the construction of the Dar Es Salaam-Tanga-Mombasa natural gas pipeline.

The pipeline will potentially reduce the cost of energy in the region as more opportunities for natural gas open up.

The Community’s Arusha based secretariat approved a feasibility study conducted by COWI consultancy firm from Denmark. The pipeline is expected to carry natural gas from the Songo Songo Island from the Mnazi Bay gas fields in Southern Tanzania near the border with the neighboring Mozambique.

Recent discoveries of natural gas off the coast of Tanzania have taken the East African nation’s total reserves 7.5 trillion cubic feet, sufficient to allow exports to the region.

African Development Bank under the New Partnership for African Development- Infrastructure Project Preparatory Facility is facilitating the construction of the pipeline with a grant of USD561,700 for the project.

Based on demand for gas the pipeline has been estimated to be a 24 –inch line from Ubungoin Dar Es Salaam to the Kenyan coastal port City of Mombasa.

There will be a metering/regulating station at Tanga and Arusha branch and another at the end of the line at Mombasa.

The pipeline is expected to significantly contribute to diversification of energy sources within the region thereby enhancing security of energy supply.

“Diversification will mitigate the challenges arising from reliance on a limited type of energy sources in the region”, the Permanent Secretary in the Kenyan Ministry of Energy, Patrick Nyoike said, adding that the pipeline will also contribute to the reduction of energy costs and shield power generation from variability of weather and international crude oil prices. The PS said the pipeline project will also support cement manufacturing in Tanga as well as supply power for tourism and industrial activities.

Demand for power is surging in Tanzania and the country is expected to save millions of dollars over the next 20 years using natural gas instead of oil imports.

Ends

Kenya: Sh14.6m budget trail unveiled

1 Reply

from Judy Miriga

from Judy Miriga

Folks,

The reality of the matter concerning Oil Industry Company enterprising is that, it has a history of closely association networking…..of Multibillion dollar oil operators….

All over the world, they ran their Government crazy through their demands of enjoying in the Government Subsidies, paying no taxes, but despite the huge sale of oil all over the world, they argue that the reason Oil Manufacturers are not paying any Revenue Taxes is because they create employment opportunities to employ more workers, that they need motivational booster from the Government so they can do oil exploration and be able to produce more oil in the market and so the cost of doing business is flexible for investors.

All these statements are not true and cannot be justified……These are the under-table behind the scene MoUs that are not of Public Interest but a Rip-Off…..with Fake rising costs in Fuel makes it a double profit to the Oil Industry CEOs and their Companies.

In most case scenario in the world and specifically Kenya’s situation, the investors pay off to grease pockets of negotiating politicians hand-outs to remove Policy Regulatory measures with lifting of other social welfare requirements, so the Oil Manufactures would have a free enterprising business away from taking responsibilities from environmental, Health Hazards and avoid commitments to meeting public mandate in Local Partnership engagement of Social community programs ………and instead, the Oil Industry Management heavily and corruptly pay off funds to politicians on monthly or yearly basis to campaign or lobby for their special interests.

This shows how much Tax Revenue is not collected from the Inventors’ to be posted into the Government Finance Account to benefit Public Mandate, Social Welfare Community’s Program Agenda.

Consequently, Oil Industry Investors Industrial sector is not dependent on any Legal Policy Regulatory system, but enjoys huge capital sums of money from overburdening Tax Payers money from Free Tax levy subsidy, but receives free collateral Government Bonuses and Loans without interest charged.

These Oil Industrial Investors get natural gas and petrol free from public resources, at which they make huge profits in Billions of Dollars, which in real case, they should not be taking ownership of Public National Resources without contributing to the Development Agenda of the Local Social Community program agenda and without opening for local community employment ……so to Balance……..in the Give and Take.

Cost of fuel, food and basic needs going up is part of the secondary corruption scandal in public rip-off……..This is a serious crime on the people public that must be clearly be condemned by all and the idea of Free enterprising must stop ….. Because, it is the “Intellectual Property Thieving” from Public Natural Resource Rights…..

A Government that practices good Democratic Governance will have its priorities right and the Potential Indicators for Regional development cannot fail to be noticed, the effect will fizzle down and the effects felt by the local Community grassroots through employment and the engagement and popular participation activities are noticed in the Community Social Welfare programs……. and as a matter of fact, the Case Scenario do provide a balance and therefore, poverty should not be an excuse….

Thanks,

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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National Oil to Open 22 Stations in Price Wars
Mwaniki Wahome
14 May 2011

Nairobi — With the oil shortages of two weeks ago fresh in the public minds, National Oil Corporation of Kenya (Nock) has started an ambitious expansion of its petrol stations to boost its market share.

Under the Kanga project, the government-owned oil company expects to open 22 new mini fuel stations across the country by December this year.

The first of the stations was opened on Wednesday last week at Nairobi’s Industrial area.
Chairman Peter Munga said the stations were part of a wider plan the company expects will help it lift its market share from seven per cent to 10 per cent by the beginning of next year.

Nock is the sixth largest in a market dominated by multinationals who take up 70 per cent. This has not enabled it to play its role of stabilising the country’s oil prices effectively.

The mini stations will each cost Sh30 million compared to over Sh90 million that it would take to put up a fully-fledged service station.

The stations will concentrate on the primary functions of refuelling and selling lubricants and cooking gas.

“The Kanga project is within the five year development plan by the firm to increase its presence in the country to be able to play its role of stabilising the oil prices,” said Nock managing director Sumayya Athmani.

Mr Munga said the plan involves spreading the branches across the counties as the decentralisation of government services envisaged in the new Constitution gathers steam.
“Nock underwent a period of stagnation until 2005. We have increased the service stations from six to 70 stations and increased our market share from one per cent to seven per cent in the last five years.

“The mini stations will be replicated along the highways and only have bigger stations with service bays at the counties,” said Mr Munga.

Fuel crisis

Nock’s role has increasingly come under focus in the last few weeks following a four-day fuel shortage that threatened to put the country on the verge of fuel crisis two weeks ago.
Mr Munga said the corporation will seek partnership with small investors close to the mini stations who will offer other vehicle-related services.

A fully-fledged service station has service bays, mini-supermarkets and restaurants which raises the cost of putting it up. Mr Munga said the new plan is based on the fact that most drivers wanted to refuel their vehicles.

Nock intends to increase its retail service stations to 165 by 2014. The company also intends to build an additional storage facility in Konza to store more fuel.

A floating jetty is also to be established so that larger vessels can offload oil in the high seas and which will also be connected to the mainland through a pipeline to increase offloading speed.

The company currently depends on other firms which limits the amount of fuel it can stock, rendering it irrelevant in influencing market prices, especially when crude prices are low.

A source familiar with the issue but who requested not to be named said Nock can effectively play its role by stocking fuel when international prices are low and release it to the market when they rise.

The government formed Nock in 1981 to control rising pump prices following the Iran-Iraq war which led to the global oil shock.

It was expected to supply 30 per cent of the country’s needs and hence influence pump prices. However, its limited retail presence prevented it from competing with multinationals.

Liberalisation of the petroleum industry in the 1990s opened the door to local independents but the pump prices have not gone down significantly due to the control of branded marketers.

Sh14.6m budget trail unveiled

Published on 12/05/2011

By Wahome Thuku

Former Education PS Karega Mutahi has confirmed that he approved expenditure of Sh14.6 million, part of which is now the subject of several corruption cases.

Prof Mutahi, now Environment PS, told a Nairobi court that he approved a budget of Sh14,608,800 to be used in sensitising teachers on double-shift programme initiated by the Education ministry.

Mutahi was testifying before Senior Principal Magistrate Lucy Nyambura against four senior education officers charged with conspiring to fraudulently acquire more than Sh5.3 million from the ministry.

The suspects are former acting Director of Education Concilia Ondiek, senior officers Christine Chacha, Thomas Omuga, Francis Owuor and Fred Ochanda.

Ms Ondiek and Ms Chacha face additional charges of fraudulently acquiring part of the money through using fake accounting documents and false accounting. The offences were allegedly committed in May and June 2009, at the ministry’s Jogoo House headquarters in Nairobi and in Nyanza Province.

Scandals

The five are among several senior education officers on trial in connection to various scandals in the ministry unearthed in the past three years.

There was a light moment in court when an accountant, Elius Macharia, narrated how he gave Sh3,334,000 in cash to Ms Chacha for the programme.

He said the money had come from the bank in new Sh1,000 notes wrapped in bundles of Sh1 million each. He handed the cash to her at the accounts office, the court heard.

Pressed by lawyers to explain how Chacha carried such a huge amount of cash, Macharia replied: “Once I gave her the money my work was over. She can explain how she carried it,” he said. The magistrate then asked, “Is a bundle of Sh1 million so large that one can not carry?” And defence lawyer Chacha Muita responded, “I have never seen it your honour.”

Macharia said the accused counted the Sh334,000 as the other bundles were intact. Asked if he was sure the money was Sh3 million, he said the accused would have complained if it was not. He, however, could not recall what time he gave her the money.

In his evidence, Prof Mutahi said he approved the Sh14.6 million budget on May 4, 2009. Ms Ondiek had prepared the memo accompanying the budget. The money was to be used for organising workshops for secondary school heads and teachers from selected areas held in May 2009.

The double-shift programme was targeting schools in poor urban areas. It was to initiate learning in morning and afternoon shifts. Several schools in Kisumu, Eldoret, Nairobi, Kericho, Mombasa and Nyeri had been identified for the programme.

Mutahi said he approved the budged after being assured that the money would go in the hands of senior officers who would be in charge of the programme.

“After approving the budget, a PS does not come into contact with the documents again. The respective directors and their staff handle the implementation and expenditures,” he told the court.

The PS said after an audit by internal auditors cases of authenticity of the accounting documents were raised. He said several officers were suspended and others cleared after repaying the money.

He said he referred the matter to the Kenya Anti-Corruption Commission.

Hearing continues on May 16.

GLOBAL DISRUPTIONS

As if domestic concerns were not enough, policymakers also see plenty of reason for worry when they look around the world.

Europe is mired in a debt crisis that has dragged on for over a year and shows signs of getting worse, with speculation rampant that Greece may have to restructure its debts.
Concerns about the ability of policymakers to get to grips with the crisis are likely to grow after the shock arrest of the IMF chief Dominique Strauss-Kahn in New York on the weekend.

Strauss-Kahn’s lawyer said he will plead not guilty to the sexual assault charges and the IMF said it remained operational. But a Greek official said there would now probably be a delay to a European Union/IMF bailout for Athens in which Strauss-Kahn was closely involved.

A crisis of leadership at the Fund would especially worry EU nations, given Strauss-Kahn’s central role in bailouts for Iceland, Hungary, Greece, Ireland and Portugal.
“The chances are the successor won’t be a European, and will want to rebalance the IMF’s priorities away from its massive commitment in Europe,” said Jean Pisani-Ferry, director of the Bruegel economic think-tank.

Euro zone finance ministers will debate Greece’s debt crisis on Monday this week. Before Strauss-Kahn’s arrest, German officials said no decision will be taken until a mission from the European Union, the European Central Bank and the IMF releases findings on the progress of Greece’s reform efforts.

Top officials in both Germany and Greece have adamantly dismissed the possibility that Greece would abandon the euro, despite rumblings among some analysts that such a move might actually help the beleaguered southern European state.

Eurozone inflation is expected to have risen 2.8 percent in the year to April, according to a report due on Monday that should keep pressure on the European Central Bank to continue a push toward higher interest rates that began last month.

In earthquake- and tsunami-stricken Japan, monetary authorities have already said the economy is probably in recession, depriving world growth of yet another key engine at a time when some fear a renewed global industrial slowdown.

China, for its part, is making a concerted effort to restrain inflation after years of super-charged economic growth, leaving investors on constant watch for the next possible tightening in the form of higher reserve requirements.

This combination of negative factors coming from so many corners of the world could begin to dent U.S. manufacturing, which had been a bright spot in the recovery thus far. Two surveys of regional factory activity from the Philadelphia and New York Federal Reserve banks are slated for this week.

Qatar
Al Khaleej Gas phase 2

The second phase of the Al Khaleej Gas Project started up in 2009. This project has the capacity to supply 1.25 billion cubic feet of gas per day to meet Qatar’s growing domestic demand, along with 100 thousand barrels of liquids per day. This is an expansion of Phase 1, which has operated since 2005, and brings the total Al Khaleej Gas Project supply capacity to 2 billion cubic feet per day.
Qatargas 2 Trains 4 and 5
Qatargas 2 Trains 4 and 5 (ExxonMobil interest, 30 percent and 18 percent, respectively) started up during 2009 and have a combined design capacity of 15.6 million tonnes of liquefied natural gas (LNG) per year. The trains also produce condensate, liquefied petroleum gas, helium, and sulfur. Deliveries from Qatargas 2 use a fleet of Q-Flex and Q-Max vessels, the world’s largest LNG carriers. Shipments are delivered primarily to the United Kingdom gas market through the South Hook LNG regasification terminal. Qatargas 2 is a joint development between ExxonMobil and Qatar Petroleum.
RasGas Train 6
RasGas Train 6 (ExxonMobil interest, 30 percent) also started up in 2009 and is owned by Ras Laffan Liquefied Natural Gas Company (3), a joint venture between Qatar Petroleum and ExxonMobil. The train has a design capacity of 7.8 million tonnes per year of LNG, and associated products include condensate, liquefied petroleum gas, helium, and sulfur. Train 6 markets include the United States, and deliveries to the Golden Pass LNG regasification terminal will commence in 2010.

Kenya: Now Devani wants an out of court settlement

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Folks,

Oil Companies are the riches profit making businesses in the world.

Oil, Food and Transportation cost going up means, Tax Revenue Collection go to the rich…..

The Rich does not pay taxes, but the poor man and woman pay heavy taxes to make the Rich richer…

Obviously out of court by Devani demands, is another form of rip-off and put the burden of POOR on the head of the poor……The reason there is high cost of food and livelihood is unbearable…..

The two Principles i.e. PM Raila Odinga and Kibaki are both enjoying the Aroma in their beds of roses…..while the poor man and woman are paying for their lifestyle…..through taxes as a result of high cost of commodity sales

PM Raila and Kibaki are making life extremely difficult for the common poor people…….by making the cost of living too expensive…….an easy way for the poor to die too quickly.

If the two Principles are not able to make life affordable for the common poor, and if the two principles are not able to lead the way for the Legislatures to manage and balance Social Program for Community livelihood, pay workers fair dues and engage Ministerial Department to effectively distribute Revenue Collection fairly and stop corruption and impunity, why cant they vacate public office peacefully…..

How on earth does Yagnesh Devani with cartels get away from the strong arm of the law, when all facts are on the table……letting the poor pay for stolen wealth which was shared by the Politicians…….This is the most serious Crime of the Highest Order…….Against the Voiceless Poor..

It is time all Leaders MUST DECLARE THEIR ACQUIRED WEALTH BEFORE NEXT ELECTION……of 2012…….All Leaders found guilty must be charged…..Accordingly..

We are sick and tired of being sick and tired and of making the Richer get Richer….

It is time to make a Game Changer by engaging Reformists and Not Looters….

It is time Human Rights and Liberty must be valued, respected and honored…..and We must all stand together for Justice and demand rights for all in a Fair Game Strategy… in a Balanced Budget…..

Change is possible when the Coalition Government vacate office for Responsible leaders…

In case Kenya Court fail to deal with Devani case effectively according to the way it should, ICC Court must take up this matter to help the Public recover and not overburden the already living below poverty line…..the Kenyan majority poor.

Thanks,

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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Now Devani wants an out of court settlement
Written By: Dzuya Walter, Posted: Tue, May 03, 2011

Former Triton CEO Yagnesh Devani

Yagnesh Devani, the businessman at the heart of the multimillion shillings Triton Oil scandal now wants an out of court settlement.
According to his lawyer, Devani has already initiated talks with a local bank to sell off his assets to recover the amount he is alleged to have swindled the government.

The Devani case is perhaps one of the most sensational fraud cases after Goldenberg in the country’s recent history, a swindle that saw millions of shillings lost in shady oil deals.

The court was told that on April 6, a settlement between Devani and the complainant, The Kenya Commercial Bank was entered into but the details of the arrangement are yet to be made public.

The matter will be mentioned on May 27.

The Triton Oil scandal involved the unauthorized release of oil by the Kenya Pipeline Company (KPC) without informing financiers.

In 2008, Triton Oil Company was allowed by KPC to withdraw oil amounting to 7.6 billion shillings before the company eventually went under after withdrawing the oil and selling it.

Elsewhere, twenty suspected Mungiki adherents were on Tuesday arraigned before a Kerugoya court facing three separate charges related to the outlawed group’s activities.

The suspects who were arrested on Saturday along the banks of River Thiba in Kirinyaga South district as they allegedly took part in unlawful assembly, however, denied the charges and were released on 300,000 shillings bonds each with sureties of similar amounts.

The suspects also faced another count of engaging in organized criminal activities and being in possession of oathing articles.

And the hearing of a hate speech case against Wilfred Machage, Elgon MP Fred Kapondi and Christine Nyaguthie failed to kick off after the prosecution informed the court that it was not prepared for the hearing.
The matter was adjourned to 25 and 26 of this month.

Oil Firm Met All Tender Conditions, Court Told

Paul Ogemba
15 March 2011

Nairobi — The Energy ministry was not interested in the source of money used by an oil company to buy petroleum, a witness said on Tuesday.

The ministry awarded the tender to supply petroleum products to Triton Petroleum Company because it had the ability as presented in its bidding documents, Mr Joseph Wafula told the anti-corruption court.

He was testifying in a case in which businessman Yagnesh Devani, Mr Mahindra Pathak, Mr Julius Kilonzo, Mr Collin Otieno and Triton are accused of disposing of 13 million litres of diesel worth Sh32 million without the consent of Emirates National Oil Corporation on September 5, 2008.

By winning the tender, Triton Petroleum was supposed to supply other oil companies with petroleum products in November 2007 and March 2008.

“We formed a bidding committee consisting of Ministry of Energy officials and representatives from all oil companies. We gave the tender to Triton due to its lowest and satisfactory bid,” said Mr Wafula, an economist in the ministry.

The witness said the ministry did not know the owners of the oil firm and was not bothered about the source of its funding so long as it met its side of the bargain.

Triton, alongside former Kenya Pipeline Corporation employees Peter Mecha and Phanuel Silvano, are further accused of conspiring to defraud other petroleum companies by purporting that the company had diesel ready for sale at the Kipevu storage facility.

A legal officer at the corporation said Triton was to give KPC products which had been financed in return for storage and transportation.

Financial agreement

The officer, Mr Donald Kapten, told senior principal magistrate Lucy Nyambura that the corporation did not enter into any financial agreement with Triton.

“The corporation was not a party to any financial agreement and we were not concerned with the source the petroleum company was going to acquire the funding,” said Mr Kapten.
Another witness, Mr John Kimani, told the court that they were not aware if Triton was under any mortgage when it was awarded the oil supply tender.

“Once we are told who won the tender, we package the consignment without seeking the finer details of the company,” said Mr Kimani.

On Monday, Energy minister Kiraitu Murungi told the court that the oil products were released irregularly leading to the oil scandal in 2008.

The hearing of the case resumes on June 22 upto June 24.

Kenya: Kenya Commercial Bank Takes Pipeline Company to Court over Triton Scam

Saturday, 28 February 2009
Kenya Commercial Bank (KCB) has become the first bank to take state-owned Kenya Pipeline Company (KPC) to court, suing the company for the unauthorised release of oil worth USD13.9m in contravention of agreed contractual terms and practice. Other financiers are expected to follow suit. By Albert Muriuki.

Court Case

In papers filed in court on Tuesday, 24 February 2009, KCB explained how on 9 August 2007, it entered into a Structured Oil Import Finance Facility with Triton Petroleum Company for an upper limit of USD25m (KES2bn). The bank and Triton had agreed that any oil imported would only be released on the condition that Triton would enter into a financing agreement with KPC to ensure that KCB’s interest as a financier was secured, and that Triton would forward instructions to KPC, copied to the bank, requesting KPC to undertake to hold the product financed in trust for the bank in a prescribed format adopted by the bank.

KPC, according to the bank, was then to write back to KCB, with a copy to Triton, confirming that they would hold the oil on behalf of the bank until authorised by the bank to release the product via release orders signed by the bank’s authorised signatories and in the bank’s prescribed format. The bank would then pay off the invoice amount as per the arrangement with Triton and thereafter Triton would request KCB to authorise the release of the oil from KPC. KCB was to issue the release orders to KPC which in turn would authorise its respective officers to avail the products to Triton or its clients. “At all material times, KPC had entered into a collateral financing agreement with Triton and in accordance with the said contract, could only release any oil financed by any particular bank after it had been authorised to do so by the bank,” argues KCB in court papers.

KCB gives a detailed chronology of events from 20 November 2007 to 4 December 2008, when the stock summary showed that KPC was holding oil in trust for the bank amounting to USD14m. When Triton was placed in receivership on 19 December 2008, KCB sought reconfirmation of the quantity of oil stocks from KPC to enable the bank issue release orders to identified buyers. However, on 29 December 2008, KPC revealed that it was not holding any oil in respect of the KCB/Triton oil account.

“At no time did the bank issue any release order for the oil stock worth USD13,993,388.70 as set out in KPC’s statement sent on 4 December 2008. KPC in breach of its contractual and fiduciary duty to hold the oil products in trust for the bank has caused the unexplained release of various oil products over which the bank had financed or had a lien,” claims KCB in its court papers. KCB is now asking the court to order KPC make payments of USD14m together with interest at court rates from 4 December 2008 until full payment.

KPC is yet to reply to the allegations of KCB and has not yet filed any response in court. However, lawyers for KCB said they will wait the two weeks asked by KPC in court to allow a forensic report by PriceWaterhouseCoopers (PWC) to be completed.

Former KPC Managing Director George Okungu, who also faces five unrelated counts of abuse of office brought by the Kenya Anti Corruption Authority (KACC), together with Company Secretary, Mary Kiptui, will have to be brought to task since as recognised signatories of KPC, they were preview to the contract between KCB and KPC, and will have to explain the loss of the oil.

Fiscal and Political Implications

Although Energy Minister Kiraitu Murungi has ordered investigations into how oil went missing from the KPC’s Kipevu oil storage facility last Christmas, a court ruling in favour of KCB will mean that the parastatal will be open to similar suits from the other financiers Total Kenya and Shell Kenya have already moved to court: Total Kenya has asked the courts to compel KPC to release petroleum products held in trust on account of Triton worth KES360m. Shell Kenya has asked for the release of KES228m worth of petroleum products, and has requested restraining orders against KPC to prevent them from releasing another 4,725.173 cubic meters of Automotive Gas Oil (AGO) worth KES288m, pending the hearing and determination of the suit. Since KPC have already admitted that these stocks are no longer available, the company would have to purchase equivalent amounts, or offer to reimburse the companies.

Other financiers that are very likely to follow KCB’s move and sue KPC directly include British Glencore, which risks losing KES2.3bn, Fortis of France, KES906m, and Emirates National Oil Company, KES2.5bn.

Should KPC lose this and other suits, the parastatal’s financial position will come under intense pressure as all the financiers’ claims add up to a total of KES7bn at a conservative estimate. – and ultimately any losses to KPC will have to be covered by the tax payers.

On a political level, the suit is likely to give the Public Accounts Committee (PAC) chairman Bonny Khalwale more material to emphasise the direct impact of the oil scam on government finances. Khalwale had stated that he would prepare a censure motion against Murungi, similar to the failed motion against Agriculture Minister Willliam Ruto, although it is doubtful whether this will succeed: Murungi’s political career has not only survived his alleged involvement in the AngloLeasing procurement scam, but also stands to benefit from some political horsetrading: It has been argued that the refusal of PNU MPs to vote out Ruto is expected to be matched by ODM support to safeguard Kiraitu Murungi.

Extradition of Triton CEO?

Critics argue that the current scam was made possible by changes brought to KPC in July 2004 with the introduction of the collateral finance agreement, a device to help small and upcoming oil marketers to obtain credit financing from banks and international suppliers to finance oil imports. This allowed smaller operators like Triton – a company that was barely a decade old in Kenya and only had eleven outlets countrywide to compete with multinationals that had controlled the Kenyan petroleum market for many decades. Small companies were also allowed to import oil directly without having to go through the major players. Triton consistently won rights to import oil which they sold on to Kenyan marketers.

Although the alleged perpetrator of the scam, Triton Chief Executive Officer/Executive Chairman Yagnesh Devani, was being sought by the police, the state withdrew a criminal charge against him under unclear circumstances. Devani is said to be in India. As members of the Commonwealth, India and Kenya have extradition agreements amongst them, so the question arises why the government has not asked the Indian government to extradite Devani. Under the Extradition (Commonwealth Countries) Act, Kenya can request India to extradite Devani to Kenya to face the criminal charges against him.

UGANDA: MIXED FORTUNE BEFELL TULLOW OIL CAUSING ITS EXIT FROM DRC AND RETURN TO ARBITERS IN UGANDA DISPUTE OF MOU WITH GOVERNMENT.

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Writes Leo Odera Omolo

Tullow Oil plc is reportedly withdrawing from the Democratic Republic of Congo {DRC} and dropping a legal suit contesting ownership of two exploration blocks.

International news agencies recently reported its Chief Executive, Aidan Heavey, as having said in its London headquarters that the decision was made after it became clear the firm’s rights were not likely to be upheld as the government maintained it had the right to ignore or revoke earlier award to Tullow.

This happened in the same week that Tullow, after months of the discussions, signed a memorandum of understanding with Uganda, on the capital gains tax dispute to facilitate the development of oil fields..

The MOU which satisfies Uganda’s taxation concerns enable Tullow, China National Offshore Oil Corporation {NCOOC} and Total to proceed with basin-wide development with government with governments full support.

The MOU will result in the government granting Tullow’s request to purchase Heritage’s interests in the Lake Albert Basin as well as farm down interest to CNOOC and Total Uganda’s nascent industry.

It is expected to resolve the impasse created by heritage and Tullow tax situations, grant of extension in respect of Exploration Area 1 and parts of 3A in recognition of the time lost.

The MOU is conditional upon signing of sale and purchase agreements {SPAs} between Tullow, NCOOC and Total in 20 working days from March 15,2011.

In in DRC, in 2006, the DRC government awarded blocks 1 and 2 in the Albertine basin to Tullow with compatriot Heritage Oil as a joint venture partner without a presidential decree raising risk the acreage could be transferred to other prospectors.

In June 2010, DRC through presidential decree gave Blocks 1 and 2 to Caprikat Ltd and Forwhelp Ltd that are respectively registered in British Virgin Islands.

Tullow instituted legal action in the British Virgin Islands, but with limited success. The firm obtained an injunction preventing Caprikat and Forwhelp from carrying out any work pending legal determination of Tullow’s rights. Tullow also lodged a case against the DRC at the International Court of Arbitration in Paris.

“Given the expenses of further proceedings and the difficulty in enforcing any award against DRC even in the event of success, the board has taken the decision to discontinue the legal proceedings,” said Mr Heavey in the report.

He was further quoted as having said that Tullow plans, upon getting government approval, to accelerate production stage of successful Ugandan blocks where oil was discovered and the acreage lies across the Lake Albert water.

Tullow has had interests in the Lake Albert Rift basin in Uganda since 2004 when it acquired Energy Africa. Since then, Tullow has drilled approximately 40 wells with all but one encountering hydrocarbons.

Tullow expects the basin to be producing in excess of 200,000 barrels of oil per day {BOPD}. It wants to farm-down a one third interest to China Offshore Oil Corporation NCOOC} and Total to accelerate development.

Tullow, on January 17, 2010, exercised right to pre-empt Heritage’s sale of its interest in Uganda to a third party. Tullow acquired 50 percent interests in exploration areas {EA} 1 and 3A for USD 1.45 billion on July 26,2010.

About USD 1.05 billion was paid to Heritage, USD 121 million was deposited with the Uganda Revenue Authority {URA} and USD 283 million put into escrow awaiting resolving of capital gains tax between the government and heritage.

But last week reports emerging from Kampala says that with Uganda still reeling from a public purse emptied after spending 85 percent of the 2010 and 2012 budget in the first six months to December, it was emerging that the country may have entered into a window-dressing deal in which it could surrender its claim to the USD 283 million in taxes owed by Heritage Oil, further hurting the state’s revenues.

Information received from Kampala, says Uganda and Irish oil prospector Tullow are in for arbitration over a new tax dispute, just a week after they signed a memorandum of understanding that potentially unlocks the long the long delayed commercial development of Uganda’ oil fields.

A source has revealed that despite signing the MOU in which it committed to paying some USD 590 million in taxes, Tullow feels it has been over-assessed.

Although the MOU was scanty in detail, information made available by alternative sources indicates that the figure includes what Tullow will pay Uganda in settlement of USD 283 million owed by its erstwhile partner Heritage Oil as well as its own capital gains tax on the farm-down to Total and the NCOOC.

“When we signed the MOU, but made clear that we were not satisfied with the tax assessment. We all agreed to take our grievances to the Uganda Tax Tribunal and we shall respect the outcome”, said source at Tullow’s offices in Uganda.

However, officials at both the ministry of Energy and the Uganda Revenue Authority {URA}have not been forthcoming on the exact breakdown of what Tullow is paying.

According to independent sources, the USD 590 million announced by Energy Minister Hilary Onek is a compound figure that includes the USD 283 million outstanding from Heritage’s capital gains tax and the USD 307 million due on Tullow’s own sale of a 60 percent interest to CNOOC and Total. However, Tullow disputes this valuation and is only wiling to pay USD 469.million.

Apparently , the dispute stems from Tullow’s desire to have the 30 per ent advance that Heritage paid Uganda last year to unlock its sale to Tullow credited as part of its overall tax obligation.

The basis for computation of Tullow’s capital gains tax has been the subject of protracted negotiations, with the prospector trying to drag the baseline north by including what it has spent on the Ugandan program while government negotiators felt that the tax should be based on the difference between what Tullow paid Heritage and what it is getting from CNOOC and Total.

Based on earlier reports attributed to Tullow in the Irish press that suggested the company would earn USD 2.9 billion from the farm-down, Uganda, should have expected at least USD 465m million if Tullow were to inherit the USD 283 million owed by Heritage.

It is however, understood that Tullow could have earned much less than the reported figure because Total and CNOOC have raised questions over the actual value of oil reserves claimed by Tullow and the security of its rights given pending deadlines that it is not in position to meet. While a figure of one billion barrels in confirmed reserves and a prospective 1.5 billion in undiscovered reserves has been thrown about, in reality, well appraisals suggest only about 870 million barrels of oil on the upper side and 720 million on the lower end.

Well appraisal information, that this writer has seen, shows the Bufalo and Giraffe prospects contain 430 million barrels on the upper side and 380 million on the lower while the other large prospect, Kingfisher, can yield 200 million barrels at the maximum and 189 million on the lower estimate.

The Warthog, kasamene and Maputo wells are estimated to respectively contain 120 million,100 million and 20 million barrels of oil at most .With such numbers and a new round of licensing just around the corner, Tullow’s partners are apparently driving a hard bargain.

As Tullow’s Uganda woes appear to be finally on the path to resolution, the question that remains is the status of the USD 283 million in escrow and how Tullow will recover that money.

Ends