Month: April 2011

BP to invest $200 million in South African infrastructure

BP plans to make a substaintial investment in South Africa.

The African unit of oil major BP plans to invest $200 million in energy infrastructure in South Africa over the next two years and the amount could rise, the head of the unit said on Wednesday.

Sipho Maseko said the money would be spent on infrastructure such as tanks, pipes, storage and import facilities.

The company is willing to increase its investment further because it considers South Africa a key growth market, but needed a clearer regulatory framework to be assured a fair return on its investment.

“One foot is on the accelerator and one foot is on the breaks because we just don’t know,” Maseko said.

“The more certain and predictable the regulatory framework becomes, the more likely the amount will increase.”

Maseko said the government was making progress in that direction, and he expected that “in the next few months” the industry would be given more clarity.

He welcomed the government’s draft on clean fuel specifications released on Tuesday, which gave crude oil refineries in the country until 2017 to upgrade their plants.

“From the bits that I’ve seen, it’s sound, because it allows us to introduce clean fuels early so that we can keep pace with international trends, and it facilitates a phasing in of capital investment,” he said.

“Refineries will be given time to comply. So we just need to understand how that investment is going to be renumerated.”

BP and Royal Dutch Shell jointly operate Sapref, South Africa’s biggest refinery, which produces 180,000 barrels a day.

Maseko said BP also plans to invest $20 million per year in Mozambique over the next five years.

The company said last year it would sell its marketing businesses in Namibia, Malawi, Tanzania, Zambia and Botswana, saying Mozambique and South Africa offered better synergies with its supply portfolio.

South Africa has emerged as a major economic player not in just Africa but in the world as well.  This is more proof of South Africa’s growing importance in business-investment opportunities for foreign companies and brands.

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Turkey seeks to increase presence in Africa

Turkey's total trade with African countries is growing rapidly, says Turkish State Minister Zafer Çağlayan

Turkey has embarked on a plan to increase its presence and interaction with Africa.

Turkish State Minister Zafer Çağlayan has urged Turkish businesspeople to consider Ethiopia as a gateway to African countries as well as called on Ethiopian businesspeople to use Turkey as a base to open up to markets in Europe and Asia.

Speaking at the opening of the Turkey-Ethiopia Trade and Investment Forum in Addis Ababa, Çağlayan said: “We have come here with a loan agreement in hand. The Turkish Eximbank will sign a $100 million loan agreement to support Turkish businesspeople investing in Ethiopia.”

Çağlayan said his visit aimed at developing relations further between Turkey and Ethiopia as well as boosting trade volume and encouraging Turkish and Ethiopian businesspeople to work together in third countries.

“Total trade of Turkey with whole African continent was $5 billion in 2003. This figure amounted to $17 billion in the past 7 years. Turkey’s exports to Africa increased to between $9 billion and $10 billion in the recent years,” he said.

“Turkey’s AYKA company in Ethiopia has the biggest textile factory in Africa,” he said.

The Turkish minister said Turkey’s prospective investments in Ethiopia would amount to some $1.4 billion, employing nearly 30,000 Ethiopian people.

According to the foreign trade minister, Turkey’s exports to Ethiopia are around $170 million annually, while it imports up to $45 million. “The African country’s total imports are $7 billion per year. If we show more of an effort, Turkey’s exports to Ethiopia will easily reach into the billions,” Çağlayan said.

Turkey has one of the fastest growing economies in the Middle East and is looking to expand business and investment ties to new regions other than Asia and the Middle East. This also highlights a growing importance of Turkey trying to spread its reach and influence which falls in line with Turkey’s current leadership whom are interested in raising Turkey’s global stature.

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Latin American leaders try to bolster African ties

With more south-south interaction and alliances, Latin America is taking more interest in Its African relations.  The leaders of Latin American nations are working on improving and growing better ties with Africa.

Latin America and Africa must defy the flow of global commerce by trading and forming closer ties, former Brazilian President Luiz Inácio Lula da Silva told African leaders Monday at the World Social Forum in Dakar, Senegal.

It’s a message the center-left leader has delivered before on the 12 tours of Africa he took during his eight years in office, which just ended with the close of 2010.

“In the 29 African countries I visited as president, I’ve been struck by the vitality with which Africa is taking control of its destiny,” he said. “I have the conviction in my heart that in the world that is coming into being, Africa has more relevance than ever to developing nations.”

Since 2003, Brazil has doubled its Africa embassies and multiplied trade with the continent five-fold, making it “the tip of the spear in terms of Latin American engagement with Africa,” says Anne Frahauf, an Africa analyst with the Eurasia Group consulting firm in New York.

A new alignment?

The people of Latin America and Africa have shared cash crops, symmetrical coastlines, and mirror histories of European conquest followed by military rule. But they’ve shared little else in terms of 21st century trade or global diplomatic ties.

The economic and geopolitical interests of both continents have remained strictly parallel, formed along longitudinal lines that go directly north to the US and Europe, respectively. But as economies boom on both sides of the South Atlantic, analysts say new lines are being sketched between the two continents, particularly between the chunks that jut closer to each other: Brazil and West Africa.

Unite politically, urges Lula

Lula – as the charismatic former leader is known worldwide – urged African nations to unite politically, seek out new partners in the southern hemisphere, and distance themselves from former colonial powers in the north. The financial crisis of 2008, he said, has weakened the ability of the US or Europe to dictate economic policy to the world beneath its borders.

“Those who give us lessons on how to manage our own economies were not able to avoid the crisis that overtook their own countries and from there, all of humanity,” he said.

Yet if Lula’s remarks were meant to spark South-South solidarity, they seemed to fall flat when Senegalese President Abdoulaye Wade came with a few follow-up points.

Lula spoke of Third World solidarity, the end of neo-colonialism, and the evils perpetrated by the International Monetary Fund. President Wade gave a lecture about John Maynard Keynes and the “invisible hand” of free-enterprise economics. He asked the Brazilian activists in the audience, “Frankly, have you been able to cause any change on a global scale?”

Clash of styles, ideologies

Certainly, Latin American populism clashed in terms of fashion on Sunday, when Bolivian President Evo Morales came to Dakar for an outdoor speech.

The first indigenous president of Latin America wore his signature dressed-down collared shirt with pants and sneakers – more the outfit of a dad at a child’s birthday party than a visiting dignitary. His West African hosts wore suits.

But whatever their differences concerning how to remake the world into a more equitable place, analysts say leaders from the two realms recognize a natural starting point for economic cooperation: agriculture

“There is no sovereignty without food sovereignty,” Lula said in his Dakar speech, Monday, calling for a “green revolution” in Africa modeled off Brazil’s own gains in farming.

The continent’s savannah alone, only 10 percent of which is cultivated, could feed the entirety of Africa, Lula added – so long as it isn’t hoarded in giant agro-corporations in land grabs.

In his own speech, Morales, too, spoke of land grabs and the privatization of water. His speech – pitched to Africa’s rural people – urged the continent’s farmers and villagers to nationalize the soil and mines that should have made their nations wealthy.

Activists assembled for the World Social Forum – including Vietnamese protesters, American visitors, and a few Mayan women in trajes – cheered at the comments.

This is mainly being driven by economics.  As economies boom on both sides of the South Atlantic,  new lines are being sketched between Africa and Latin America.  Latin America approaches Africa as a friendly space for investment. For the Africans, investment from Latin America will not have the political charge as usually it would, especially in the past

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Africa, key to world’s energy problems?

Africa could hold the key to solving the world’s looming energy crisis but unlocking the continent’s vast potential will not be easy.

As supplies of oil and gas from traditional sources diminish, international energy companies are pushing into increasingly volatile and environmentally-sensitive territory in their scramble to meet demand. Among the most controversial projects on the starting blocks for 2011 are a proposed $17 billion development of the world’s third largest hydroelectric dam in the Amazon rainforest and the possibility of drilling in Alaska’s Arctic Refuge.

But it is in Africa that many believe the most potential lies for boosting energy supplies. Over the next two decades, 90% of new resource development in oil and gas will be in the developing world, and much of that in Africa. Industry experts are asking whether Africa’s transformation into an energy powerhouse could offer an answer to the energy conundrum – both as an oil producer and a testing ground for large-scale clean energy. But potential investors need also to be aware of the risks.

AfricaWindAfrica already accounts for 10% of the world’s oil supplies but a second generation of oil production has emerged in the last three years, most recently off Ghana’s coast. This has been spurred in part by rapid advances in drilling technology which have prized open new reserves. “Everyone knew the Guinea basin was a very rich deposit for hydrocarbons, but until recently all the attention focused on a small group of countries that were seen as worthwhile investments,” says Philippe de Pontet, an analyst at political risk consultant Eurasia Group. ” [But today] even countries that were totally off the radar are getting a fresh look.”

Compared to Middle East crude, African oil has many advantages. It is light and low in sulfur – a quality highly prized by refiners – it is located primarily offshore and favorable production sharing agreements are readily available. “With the decline in production [of this kind of oil] in Europe, there should be a constant demand for crude from Africa in the future,” says Olivier Jakob, an analyst at Petromatrix. While some of the biggest finds have been in Uganda and Ghana, Sebastian Spio-Garbrah, founder of risk consultant Da Mina Advisors, says that exploration off the shore of Kenya and in Tanzania and South Sudan is the most crucial for the Asian market, due to lower shipping costs. “There you have the real prospect that exploration . . . could rise dramatically.” However, concerns remain over the environmental impact of so many large-scale energy projects in developing countries. “There’s certainly more talk of environmental protection,” says Julian Lee, an analyst at the Center for Global Energy Studies. “It’s not clear whether this will translate into regulation on the ground, but it will become much more important. Companies have fewer places to hide these days and are closely scrutinized by NGOs, if not governments. There’s certainly a general movement not to repeat the experience in Nigeria.” Mr. Lee refers to insensitive oil exploration in Nigeria’s primary producing region, the Niger Delta, over the last five decades. Multinational oil companies have caused many forms of oil-generated pollution and some environmental groups estimate the region now experiences the equivalent of the Exxon Valdez oil spill every year.

AfricaGhana

Ghana’s President John Atta Mills turns on the valve to allow the first barrel of oil to flow from the country’s newly opened Jubilee offshore oil field in December.

Regulation is no silver bullet in Africa, but it is hoped it could help pen a new chapter for African oil. According to Mr. de Pontet, the Gulf of Mexico Spill acted as a wake-up call for governments in relation to the tourism, fishing and farming industries. “Even in Angola the [government] is looking to enforce tougher regulations for offshore drilling. The BP spill gave additional momentum,” he says.

Not only is Africa rich in natural gas and oil, but the continent also has plenty of sunshine, strong winds, countless powerful river systems and hydroelectric dams.

Africa’s electricity supply continues to depend heavily on carbon-based energy sources, but an increasing number of governments are looking at the potential of wind turbines, solar panels and other forms of cleaner energy. Opportunity for development in renewable energy in Africa is huge, with the potential to draw in foreign investment as well as funding from the World Bank’s Clean Technology Fund to spearhead a green revolution. Energy experts believe renewable technologies could even allow poor communities without electricity to leapfrog the West’s high-carbon technology, in the same way mobile phones jumped over landline technology in many developing African countries. At the end of 2008, Africa’s installed wind power capacity was just 593 megawatts, but by the end of last year it was just under one gigawatt. (1000 megawatts). In South Africa and Kenya, with wind potential of up to 60,000 megawatts and 30,000 megawatts respectively, local projects are expected to boom. The carbon credit market may also prove a strong incentive for investment in other types of renewable energy. Kenya was the first African nation to build significant geothermal energy sources and is quickly expanding its supply, which now account for 10% to 15% of its energy mix. It plans to develop 10,000 megawatts from geothermal steam sources by 2030, shifting the East African nation’s electricity load from weather-dependent hydropower sources to renewable geothermal. It is also hoped that as technology improves and costs fall, solar power will also enter the African renewable energy mix.

Solar Sahara
A German-led consortium has already publicized plans to develop a €400 billion solar park in the Sahara Desert, a massive natural storehouse of solar energy. The Sahara Forest Project proposes building concentrated solar power plants which use mirrors to focus light on water pipes or boilers, generating superheated steam to operate conventional steam turbines.
AfricaSahara


The €400 billion plan to power Europe using thermo-solar cells in the Sahara desert takes shape. Critics have questioned the project’s viability and expense.

Scaling the technology to produce meaningful quantities of electricity is estimated to cost about $59 billion and to be operational by 2020. “Ultimately for Africa solar is the answer, although [costs mean] we may still be decades away,” says Hermann Oelsner, president of the African Wind Energy Association.

As with any investment in Africa, potential is never the problem. It is the time and cost of making such projects a reality that ultimately threatens even the most ambitious of investments.

Africa does hold great potential in energy especially in renewables like wind and solar. Various countries are trying to exploit the advantages that they have naturally. Namibia is going down the hydropower route and Egypt is building thermal power plants.  There is plenty that Africa can do to better the environment and help contribute to a better more sustainable future while at the same time benefiting economically. As the benefits both economically and environmentally become clear, expect an increase in interest and investment especially since Africa is the new frontier after years of rapid rise and investment in Asia.

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U.S. Senator John McCain arrives in Libya, meets opposition rebels

U.S. Senator John McCain surrounded opposition supporters during his visit in Benghazi, Libya.

U.S. Sen. John McCain, one of the strongest proponents in Congress of the American military intervention in Libya, called on Friday for increased international military support of the rebel fighters in Libya as he visited rebel grounds in Benghazi, a city that has been the opposition capital in the rebel-held eastern Libya.  He said the rebels needed weapons, training, battlefield intelligence and close air support.
Here is a report of Senator John McCain’s high profile visit to Libya.


This visit will no doubt add more momentum to opposition groups and the fact that they managed to get a high profile U.S. member of congress to visit will no doubt help them in their fight against Qaddafi’s forces.

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U.S. to send predator drones to Libya

Predator Drone

The Pentagon announced yesterday that the U.S. will begin deploying armed Predator drones against Muammar al-Qaddafi’s forces in order to break the stalemate in Libya.

Rebels have welcomed the news saying the weapons will help protect civilians.  The predators can remain in the sky virtually non-stop, firing missiles unseen, and with no crewmembers at risk.  This is great importance especially since the U.S. has ruled out sending in ground forces to the conflict and allowed NATO to take over command and implementation of defending-enforcing the no-fly-zone.

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U.S. to give $25 million to Libyan rebels in support

A Libyan rebel fighter smokes a cigarette next to a multiple rocket launcher in the back of a pickup truck, as the rebels prepare to make an advance, in the desert on the outskirts of Ajdabiya, Libya.

The U.S. dismissing concerns over possible links between Libyan rebels and al Qaeda, will give $25 million to Libyan opposition rebel groups in an effort to help combat and take on  Col. Gadhafi and his forces from power.

The US plans to send $25m worth of non-lethal equipment to the rebel opposition in eastern Libya, in a move likely to further entangle the west in the two-month-old civil war.

The proposal to send surplus Pentagon equipment, including vehicles, medical supplies, protective vests, binoculars and radios, follows Italy’s decision to join Britain and France in sending military advisers to the Libyan opposition and a French pledge to intensify air strikes.

A Libyan rebel fighter manning an anti-aircraft gun flashes the victory sign Wednesday as his vehicle advances towards the front line, on the outskirts of Ajdabiya, Libya.

The Libyan government has warned that such moves will further prolong the conflict and “encourage the other side to be more defiant”.

The US plan, which must be approved by President Barack Obama, is to send “non-lethal assistance” to the Transitional National Council in Benghazi, the de facto opposition government which has not been recognised by Washington. The dispatch of the surplus US stock does not need approval from Congress.

As Natoair strikes were reported to have hit Libyan government targets near Ajdabiya in the east, and south of Tripoli in the west, the French president, Nicolas Sarkozy, promised to escalate military action to protect civilians. He told opposition leader Mustafa Abdel-Jalil: “We will intensify the strikes. We will help you.”

Rebel fighters have repeatedly appealed to Nato and the international community to step up its bombardment of Libyan government forces and military targets. Nato insists its air strikes have been effective in reducing Gaddafi’s military capability, but the action has failed to help the rebels advance.

This is a continuation of more recognition by the opposition and rebel forces in Libya by the international community.

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