Connect with us

Africa

France and China in Africa

Giancarlo Elia Valori

Published

on

A geoeconomic and strategic clash between China and France is currently emerging across Africa, with France supporting the United States in a new bilateral relationship, and China changing its economic penetration into the Dark Continent- in a new relationship with the Russian Federation.

Let us look at the main data and statistics: this year the African Development Bank has forecast a 1.9% growth in Southern Africa; a 2.2% growth in Central Africa and even 3.4% in Eastern and Northern Africa.

However, the trend is towards a slowdown in economic growth across the world – a slowdown that will be ushered in by the reaching and exceeding of the 100 US dollar threshold of the oil barrel price.

In fact, if we analyse the data and statistical series, the recent great economic and financial crises have been triggered by a significant increase in the oil price – that the West is facing with increasing difficulty.

Reverting to the focus of our analysis, in East Africa growth will be even 5.7%, the current highest rate in the world, apart from some Asian countries.

Africa’s development, however, has two sides – the side of the GDP growth and the equally important one of the increase in the external debt of many African countries.

An African indebtedness that mainly concerns China.

Here two very severe cases can be seen: in fact, in January 2017, Mozambique declared it could not to repay its foreign debt, due to a hidden debt incurred by its companies to the tune of 1.8 billion euros.

Furthermore, in August 2017, Congo had to revaluate its debt to 120% of its GDP (it was previously 77%) for similar reasons.

Hidden indebtedness is currently one of Africa’s plagues. It is currently worth 34% of the total African GDP. It is a debt mainly denominated in foreign currencies, often run up by unsavory and deceptive bankers, including members of Italy’s and other regions’ organized crime. This obviously favours China’s purchase of African companies that now cost a handful of rice.

In Nigeria, currently 60% of State revenue is used for servicing the public debt, with evident and foreseeable internal turmoil in the near future, considering that the Nigerian government has no reserves for productive public spending and for the necessary poverty mitigation policies.

In Ghana, the government led by Nana Akufo-Addo, who has been in power since January 2017, has taken on the debt piled up by its predecessors, which today accounts for 80% of GDP.

Also Angola, the second sub-Saharan oil power, is debt-ridden and is reducing extraction activities.

In Angola the debt is supposed to account for 90% of GDP and it is rising quickly.

As previously mentioned, China already holds much of the African debt.

It owns 70% of Cameroon’s public debt. This holds true also for Kenya.

Moreover, international banks inform us of the fact that between 2010 and 2014 the appetite for Chinese credit has increased by 54% throughout Africa.

A figure never reached by any developed country in banking and economic development relations with Africa.

Until 2017, however, the average of the African public debt was 45% of GDP.

Currently, however, according to the African Development Bank, at least 11 out of the 35 low-income African countries are considered to be at very high over-indebtedness risk.

For years the low cost of raw materials has been the trigger of the crisis, which will certainly become very severe in the phase of the “debt peak” which, in the case of Africa, is expected to materialize in 2021.

At the same time, however, some African States have begun to lend money to some emerging African countries, obviously at a rate higher than the rate granted to them. Countries that had no access to international credit.

And with raw materials that have been on the wane for long time, as well as a growing cost of manpower and the increase in internal political instability, caused by the crisis in public spending for a minimum level of Welfare State.

A debt spiral that has already enabled as many as 32 African countries to accept the unfair conditions of the private Funds for debt recycling, which acquire the securities at derisory prices and then resell them at a higher price to good European and American clients.

In 1996, however, the Ivory Coast, Ghana, Cameroon, Gabon, Rwanda and Kenya accepted the PPTE program of the World Bank and the International Monetary Fund – the program for heavily indebted countries which imposed strict spending control on them so as to later enable them to return into the international credit mechanism.

The recipes are well-known: privatization, in the belief that the private sector is metaphysically better than the State one; heavy cuts in current spending, as well as reduction of spending on security and investments, including the productive ones.

As can be easily imagined, this has created a very profound crisis in the income of the poorest walks of society and has really annihilated the prospects for the young generations who, in fact, flee unreasonably towards the EU – or swell the ranks of the very strong exchange of manpower between the various African countries.

Currently the most indebted countries in Africa are South Africa, Sudan, Egypt, Morocco, Tunisia, Angola, the Democratic Republic of Congo, the Ivory Coast, Nigeria and Kenya. Hence a continent already destroyed before being made sufficiently productive.

Ironically, many of these countries are also on the list of the richest nations in Africa: Egypt, South Africa and Nigeria–again in descending order.

France, however, has lost its traditional role as top investor in Africa.

Between 2015 and 2016, for example, China invested as many as 38.4 billion US dollars in the Dark Continent, while the second largest investor in Africa, namely the United Arab Emirates, reached 15 billion US dollars over the same period.

Italy, however, is the top investor among European countries, especially through ENI.

France ranks only sixth with 7.7 billion US dollars invested.

Meanwhile the Russian Federation is strengthening its traditional ties with Algeria and it is arranging a free trade area in the Maghreb region, with the Alawite Kingdom of Morocco at the core. It is also building nuclear power plants in Egypt and Southern Africa, with further exports of Russian grain to the poorest African countries.

Russia is also organizing peer cooperation projects in Equatorial Guinea, Burundi, Zambia, Uganda and Zimbabwe.

Areas that are less relevant to China or where there may be cooperation between China and Russia, with the latter interested in agriculture and oil and the former building infrastructure and operating on the market of the other raw materials.

China already owns 98% of the world’s coltan -i.e. the columbite-tantalite used for all commercial electronic devices – which can be found in the Central African Republic.

France’s exports to Africa, however, have almost halved in 2018 compared to 2000, falling from 11% to 5.5%.

In Senegal, French exports fell by 25% in 2017 – a loss that locally favoured Turkey, Spain and, above all, China.

Certainly the French-speaking Africa – linked to the CFA Franc – is a huge source of raw materials, with 14% of the world’s energy reserves and 22% of the world’s habitable areas.

Through the Africa using the CFA Franc, the French-speaking regions, which alone account for 4% of the world population, still account for 16% of world GDP and 20% of global trade in goods. France led by President Macron (but also France led by his more colourless predecessor Hollande) wants to create an autonomous common market – to be used also against an adverse EU – between the economy of the French Hexagon and the economies of the African French-speaking countries.

And this is precisely the point of geopolitical contrast with China.

China, however, still has many strings to its bow.

Last June, for example, Burkina Faso announced it had broken its relations with Taiwan to recognize only the People’s Republic of China.

The first step that China asks all its partners to take.

China also doubled US bilateral trade with Africa as early as 2013.

The beginning of the new relationship between China and Africa – after the “Three Worlds” Maoist theory in which, however, the People’s Republic of China became the leader of the Third World, after the two American and Soviet “imperialisms”-materialized after the Tiananmen Square protests and crisis in 1989, with a view to escaping the isolation imposed by the West (and by Russia which, at the time, had many problems to solve).

It should also be noted that many current African leaders have been educated in China.

Think of Joseph Kabila, the leader of the Democratic Republic of Congo, who studied at the National University of Defence in Beijing.

Or to Mulatu Teshoma, the President of Ethiopia, who studied philosophy and political economy with a PhD in international law at the Peking University, before continuing his studies at the Tufts University in the United States.

Or again to Emmerson Mnangagwa, the President of Zimbabwe, former student of the “School of Marxism” at the Peking University, who later spent a period of time in Nanjing studying combat training.

The current leader of Tanzania studied military engineering in China and then returned to the country in 1964.

Hence how is France responding to this? In July 2018 President Macron went to Nigeria -after having paid an official visit to Ghana – but he has the clear intention of gaining broad consensus not only in the old African French-speaking countries, but also in the English-speaking part of the Dark Continent.

The French President believes that also Africa is now “globalized” and hence he must go well beyond the old traditional perimeter of the so called Françafrique.

The concept underling the strategy of President Macron is no longer the traditional one of Françafrique, but rather that of AfricaFrance.

The offer made to the President of Rwanda, Paul Kagame, to become President of the International Organization of the Francophonie must be seen in this context.

From the African autonomous culture – which, according to President Macron, must be revitalized – to the recovery of the French economy and companies in Africa: the French market in Africa fell from 11% in 2003 to 5% in 2017.

Meanwhile China rose from 3% in 2001 to the pan-African 18% in 2017.

Even Germany has currently overtaken France in foreign trade with Africa.

Certainly the French President also wants his country to remain the “policeman” of Africa – as during the Cold War –  but he plans to confine his fight “to terrorism”, or more precisely to the sword jihad, in the Sahel region, which is and will be the future core of the French military presence in Africa.

Furthermore, President Macron intends to deal with business, thus limiting the security role played by France in Africa France as much as possible.

This is also the meaning of the increasingly important role that will be given to the G5 Sahel,i.e. the Joint Force of the Group of Five for the Sahel including Mauritania, Mali, Burkina Faso, Niger and Chad.

In short, according to its best strategic analysts, France wants to prevent future geoeconomic battles by preserving its global strategic role. Hence it wants to protect its old African colonies from the predatory and harmful effects of globalization.

This means that France tends to produce a new African “common market” between its economy and the developing economies if its old Françafrique.

Hence the recent France-G5Sahel military operations must be seen in this context: Operation Barkhane, which began in 2014 with 3,000 French soldiers, in addition to those of the G5-Sahel, based in ‘Ndjamena, the capital of Chad, as well as the Operation Serval aimed at ousting Islamic militants from the North of Mali, and Operation Epervier, a French counter-terrorist action between Cameroon and Chad.

The other two French military operations, namely Sangaris and Licorne – the former in the Central African Republic, which ended in 2016, and the latter a peacekeeping action in the Ivory Coast, replaced in 2015 by the “French Forces in the Ivory Coast” -were a relative success, but with a progressive support from the US African Command.

However, what about the CFA Franc, which is now a controversial topic inside and outside Africa France?

For some African Heads of State and Government, who obviously do not want to give in to China or to other new players in Africa, the CFA Franc “is a sound currency” and “does good to the African people”, just to quote the explicit words of Ivorian President Alassane Ouattara.

President Macron stated that the CFA Franc is “a currency that works and needs to be modernized together”.

It should be recalled, however, that France intervened militarily in Africa as many as 42 times from 1968 to 2013.

France will never give up Africa, but it has not the liquidity to really do so. China, too, will certainly not give up Africa and will never intervene militarily, if not directly hit, while investing massively in the Dark Continent.

Hence how will the CFA Franc be reformed?

It is easy to predict: with an increase of its value as against the Euro and new internal regulations governing the relations between France and the other African partners.

The French game in Africa will work until the Chinese economy slows down and hence there will be less Chinese capital to invest in Africa.

China, however, is already a net importer of semi-finished goods, as well as clothes and basic products from countries such as Ethiopia, while many African countries keep on importing high-value-added goods and capital for basic industrialization from China.

In Africa, China tends to replicate the same development as its development of the early days of the “Four Modernizations” phase.

Therefore, the most likely solution in the near future will be a concentration of French power on the G5 Sahel, with a parallel reduced role of France in the Eastern region of the Dark Continent.

While China will keep on expanding its influence in Africa, from the South to sub-Saharan Central Africa, up to Egypt and the Northern Atlantic Coast of Africa.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Continue Reading
Comments

Africa

Paying Tribute to Mother Teresa of Somalia, Late Dr. Hawa Abdi

Ahmed Said

Published

on

image source: Vital Voices

I know this earthly life is temporary, but I felt great sorrow when I heard the passing of Dr. Hawa Abdi who died at age 73 in Somalia’s capital, Mogadishu.  Dr. Hawa Abdi helped the helpless, the ill, and the internally displaced women and children, and the weak in war-torn Somalia for decades. She studied medicine in Ukraine and In 1983, she opened a one-room clinic, on her family’s ancestral property, which over the years grew into a settlement which hosts tens of thousands of people, mainly women and children. The settlement in the Afgooye corridor, less than 15 miles from Mogadishu, includes a hospital, a school and a refugee camp.”

When Hawa Abdi was 11, her mother died due to childbirth complications, and because of the medical reason her mother lost her life, and owing to the fact that childbirth-related death was common (and still is) in sub-Saharan Africa for lack of maternity care, Hawa Abdi decided to become a doctor, especially a female gynecologist. And when the civil war broke out in Somalia in early 1990s, as many Somalis were getting displaced by the war, mainly in and around the capital, Mogadishu, more and more people, especially women and children, moved and took refuge in and around the compound of Dr. Hawa Abdi. She worked tirelessly to save lives and became a lifeline for tens of thousands of Somalis. She was not only helping the needy civilians, but the wounded of the countless warring sides in and around Mogadishu and elsewhere ended up over the years in her clinic and hospital to be treated impartially. Hawa Abdi was a selfless figure who helped her fellow countrymen and countrywomen without discriminating them based on their clan, the main malice that has been destroying Somalia for decades, the biggest factor that plunged the country into an endless civil strife.

At times, Hawa Abdi confronted the Al-Qaeda affiliated Al Shabab to save people in her camp, even when they threatened her. At certain times, some of the people in her camp fled for their lives, but she stayed in her camp no matter how dangerous it was to be fearless. That is how brave she was.

Hawa Abdi not only took risks herself, but she supported her daughters to become doctors so that they can help the needy people in their homeland, Somalia. When you look at the alternative, which is for them to live a peaceful life elsewhere, they prefer to stay in their country and help their people. This can teach the Somali people that these beautiful souls sacrificed so much by saving their fellow Somali citizens.

Hawa Abdi was a role model for millions of Somali girls and women. She braved great adversaries in life. She overcame countless challenges and showed all Somalis, even men, that one person can have a great positive impact on her country and people. She showed her African sisters and brothers, with resolve, mountains can be moved because we live in an inner-connected world where one person, one village, and one city can have a certain influence on the entire world. On the other hand, the world has become a global village, and I believe, compared to when Hawa Abdi started her venture decades ago, now we have more opportunities to do what Hawa Abdi did; the world is more connected than before, and information can be obtained faster and more efficiently. The power of the internet is amazing, and if one can have the access and ways to find and understand the right data, one can do wonderful things to change life for the better.

The news of Hawa Abdi’s death shook the Somali social media world. Many Somali social media users, including me, shared their sadness on the death of this giant woman. Rest in peace!

Continue Reading

Africa

Spilling Oil and Mosaic Racial Prejudices

Published

on

My heart is heavy with prayers on behalf of Mauritius  where I am blessed to be residing and working, as an oil spill catastrophe compounds the economic impacts of the COVID-19 pandemic in this idyllically beautiful though in so many ways fragile land.  Thanks with ultimate love to those in many places around the world who have texted and emailed your concerns to me  about Mauritius. Your prayers and positive thoughts are well needed and greatly appreciated. 

This tear jerking natural disaster gives us a reflection today exacerbated with  the horrible Beirut blast earlier this week and the deteriorating oil tanker in the Red Sea unattended as proxy war rages in Yemen  ; and  the profit motive  loosening of environmental protections in America,Brazil , and elsewhere in the established and emerging West. And it is impossible for us , none of us, to escape from the web of disastrous environmental   circumstances  engulfing all of us whether we believe in global warming or not-the coming further  biodiversity consequences of global warming adding rock salt to the wounds of and going beyond the present COVID 19 pandemic and its emerging mutations. 

Whether we live in the declining North and West or in  the emerging South and East in the world,  or on mainlands or on islands, the climatical catastrophes are  now causing us  all to be jolted rudely out of our beds of complacency.We  are being forced to  open our eyes without the  time to indulge in the luxurious privilege of rubbing them to get the  sleep out of our  dropping post-dreamland eyelids. 

What more will it take for we human beings to realize and act constructively about the sobering fact that physical environments and the non-human lives within  them  and what we human beings do to them have real consequences at all times.We can never afford to waste one minute ignoring anything or being careless when it comes to our environments and to non-human living animals and plants. No matter where we are or stand in any society especially one which claims to be  a democracy ,we can never afford be sleep at the wheel.We must always be alert and be proactive and preventive rather than passive and indifferent since that which is a tranquil paradise environment or a scenic port or luscious green forests or beautiful spacious plains and even impoverished and wealthy rural and urban living spaces can  in the blink of an eye go up in explosive environmental and life taking smoke or toxic spill. 

It is one thing when such environmental and life taking destructions occur beyond our human control such as an earthquake or cyclone or hurricane or volcanic eruption so long as preparations by governments and communities are made so when some mass destructive catastrophe does occur everyone no matter their wealth or poverty and cultural background are all taken care of the same quality of life way.It is the most tragic mass catastrophe which occurs when it is due to governments and communities having the ability to develop natural disaster preparation capacity though don’t bother to do so or ignore the warnings of citizens and noncitizens since  for demographic reasons they do not have the respect of the powerful to be listened to and heard for urgent action.Thus when the  natural disaster comes  those in government, private sector, and civil society power are caught flatfooted and the entire society comes to suffer in one way or another. We all become victims of our own negligence within not outside our control.

In the midst of  and in the aftermath of any natural disaster be it beyond or within human control there invariably is raised in these global social media days the human rights concern  of  the uneven ways the mass catastrophe affects the quality of life of impacted populations.  This is especially the case for the quality of life of mass natural disaster effects on  historically excluded and marginalized populations. In Mauritius it is the issue of African Kreoles; that is, those Mauritians with African descent  heritage who acknowledge their heritage though realizing  there are many Mauritians of Indian, English, and French descent with African heritage though not acknowledged let alone in more cases than a few, even known.

Yesterday evening one event I attended in the nearby Town of Rose Hill, not cancelled due to the impending oil spill disaster, was the first ever public conversation in Mauritius about racial prejudice in this  otherwise island paradise. Though there was the predicted attempt by some speakers to dilute the issue by speaking about other kinds of  non-racial social prejudices ,the focus  appropriately always came back to systemic and structural  anti-Afro- Kreol prejudice in this land  most apparent in the public and in the corporate private sectors and in interracial  dating, marriage, and family formations  in relation to Afro-Kreols . Paradoxically people here in Mauritius are so closely knitted and friendly though can be   so deeply historically divided in their racial prejudices ( Though treated kindly as a brother in most private and public places I have been in Mauritius, I have not been totally  immuned from anti-Black racism  before  or/and after I have opened my American sounding mouth.For instance , consider the Indian doctor seeing me for the first time asking me if the “Professor ” before my name was my actual title or a nickname– well we know Black people,  especially older or younger men ,no matter their nationality are not well educated and love nicknames like Prof and Doc, right?🤭😊).

Most of the speakers tried to link their concerns about historical  and contemporary anti-Afro-Kreol racial prejudice to the  globalizing  U.S.George Floyd and Black Lives Matter protest movements supplemented with American peace songs.Just as much there could have been needed attention given to how the oil spill disaster is a tragic reminder of the historic Afro-Kreol fishing industry and how much it has been excluded from  especially  corporate domestic and global trading markets and  trends towards importing fish from other countries than from their own largely Black fishermen.

But it was a good start especially with so many young people present..the future of this nation with such potential to become incredibly great. Have to start somewhere in discussing publicly such a  delicate paradoxical blemish in a society with aspirations to be a big league nation in a world where any form of racial prejudice will ultimately impede the dreams of lofty national ambitions.

 In moving forward from last night’s first public try to have a conversation about anti-Afro-Kreol racial prejudice and as the gallant efforts to contain the drifting oil continue, there is the chronic need of a more comprehensive national restorative justice initiative involving government and local community leaders developing platforms to have difficult  transparent  conversations to address the deep  societal ugliness captured in what  an Afro-Kreol sage told me soon after my arrival: as one Mauritius poet said: Mauritiuians grow two things: pineapples and prejudices.

Though Mauritiuians are indeed nice and kind  in public and in their numerous festivals and religious celebrations, what is expressed way too often  behind closed doors and in private and public unspoken or spoken preferences in who gets what when it comes to power and privilege and to decent quality of life ( including recruitment invitations to faith communities) are totally different stories. The mosaic  spillings of racial prejudices in Mauritius hidden  and usually  when mentioned explained away under the guises of words like communalism and religion  or through mere pretending that such degradation while happening don’t happen,  is a slow cancer eating away at the soul of this  truly lovely nation which needs to be brought to the surface and made to cease.That is ,if the nation wants to become in substance, not just in global measures of development, a big League global democracy. The mosaic of racial prejudices against Afro-Kreols, African and Asian immigrants,Chinese,  Francos, British,Indians, Christians, Muslims,   and Hindus in Mauritius has  created and sustained   very much taken for granted divisions of marginality and exclusion in public and private spheres of Mauritius life which wastes human resources, and create social and emotional distance anxieties and fears and contributes tremendously to brain drain of the highly talented though with devalued demographics migrating elsewhere . Unless this mosaic of deeply rooted racial prejudices is thoroughly publicly addressed, acknowledged, and properly processed and resolved through authentic restorative justice public policy designs and effectively monitored in implemented in the midst of the bare wires of racial inequality being exposed in the midst of the COVID-19 pandemic and now oil spill crisis tainting tourist attracting beaches  with obvious racialized winners and losers who always win and lose here wasting human and material resources in so many ways in the process, what will Mauritius be say next year let alone say 10 years from now as a highly vulnerable island state with such high profile ambitions of being a big league African democracy in the world?

And of course from a global perspective, Mauritius ,in reflecting about this big intricate question, is a case study for the rest of the world as  most of us around the globe  are in the midst of environmental disasters with such dire consequences for most of us residing in such unequal societies.If it is not racial prejudice, it is prejudices premised on age, caste, culture, ethnicity, gender , language, nationality, religion ,socioeconomic status  or stateless status, which construct the false dehumanizing walls which keep us apart and degrade our views of others and of ourselves about human  capacities to contribute to the well being of the  societies we develop, sustain, and change. And then when natural disaster hits elites  in private and public sectors are either prepared to address the needs of the most privileged while  at best emergency crumbs are tossed to the least among us( e.g. the pathetic COVID 19 pandemic economic aid distributions with the predictable racial disparities, in the States though virtually all over the world).Or through ignoring what the usually ignored forewarn about possible future natural disaster  due to the color of their skin or ancestry or some other source of demographic degradation,   such as per chance  being Afro-Kreol fishing men and women expressing concern about the  tilting grounded ship …and now we see.

Every competent  voice in every society is needed and it endangers society when needed competent voices are categorically ignored and otherwise devalued. Otherwise we can venture into waters with oil slick streaks  and do so totally un- necessarily with long lasting if not permanent catastrophic consequences for all of us especially for the most vulnerable and underprivileged but for all of us.

Continue Reading

Africa

Russia’s Lukoil Finds A New Home In Senegal

Kester Kenn Klomegah

Published

on

Undoubtedly, a number of Russian companies have largely underperformed in Africa, which experts described as primarily due to multiple reasons. Most often, Russian investors strike important investment niches that still require long-term strategies and adequate country study. Grappling with reality, there are many investment challenges including official bureaucracy and technical hitches in Africa.

Lukoil, the largest Russia’s oil company, has had a long history, going forth and back with declaration of business intentions or mere interests in tapping into oil and gas resources in Africa. In the past, Lukoil have said in separate reports about its business deals in a number of African countries including Ghana, Cote d’Ivoire, Sierra Leone and Nigeria. These are coastal countries on the Gulf of Guinea (Atlantic Ocean) in West Africa.

Besides technical and geographical hitches, Lukoil noted explicitly in its official reports that “the African leadership and government policies always pose serious problems to operations in the region.” It said that the company has been ready to observe strictly all of its obligations as a foreign investor in Africa.

Lukoil has moved to Senegal. Predominantly rural and with limited natural resources, Senegal is classified as a heavily indebted poor country, with a relatively low Human Development Index. Most of the population is on the coast and works in agriculture or other food industries. Other major industries include mining, tourism and services.

Energy is produced by private operators and sold to the Senelec Energy Corporation. According to a 2020 report by the International Energy Agency, Senegal had nearly 70% of the country connected to the national grid. Current government strategies for electrification include investments in off-grid solar and connection to the grid. Senegal has a population of approximately 15.9 million.

In spite of that, business is business. Quite recently, Lukoil, one of the largest Russia’s oil companies, publicly declared that it finally concluded an agreement with Cairn Energy PLC to acquire a 40% interest in RSSD (Rufisque, Sangomar and Sangomar Deep) project in the Republic of Senegal for $300 million in cash.

The agreement provides for potential bonus payment to Cairn Energy PLC of up to $100 million after the commencement of production. The transaction is subject to customary conditions, including the approval by the Government of the Republic of Senegal.

The blocks of the project covering 2,212 sq. km are located on the deepwater shelf of the Republic of Senegal 80 km from the shore with the sea depth of 800-2,175 meters. The blocks include two discovered fields: Sangomar and FAN.

The Final Investment Decision (FID) on the Sangomar field was taken early 2020 and the field development has begun. According to the Company’s estimates, the recoverable hydrocarbon reserves of the Sangomar field total approximately 500 million. The field is planned to be launched in 2023, with designed production level of 5 million tons of crude oil per year. 

The RSSD project is currently implemented under a production sharing agreement. Woodside is the project’s operator with 35% stake. Other participants are FAR (15%) and state-owned company Petrosen (10%).

“Entering the project with already explored reserves at early stage of their development is fully in line with our strategy and allows us reinforcing our presence in West Africa. Joining the project with qualified international partners will allow us to gain additional experience in development of offshore fields in the region,” said Vagit Alekperov, President of PJSC Lukoil.

Early this year, precisely on January 28, during his briefing with President Vladimir Putin on the 2019 performance and activities of the Lukoil holding, Vagit Alekperov noted the unique window of opportunity that opened up after the summit held with African countries late October 2019 in Sochi.

“In fact, we are beginning to work actively in West Africa: we have started working in three countries and another four have offered to launch joint work. This is unprecedented. This summit gave an impetus to Russian companies to work in one of the most promising markets: West Africa,” he told Putin in the Kremlin.

After Putin noted that it was surprising African colleagues had asked only for collaboration and nothing else, Alekperov reassured that “today, it is not just a declaration but these are real projects: in the Republic of the Congo, in Ghana, we are now looking at a number of other countries, and Cameroon.”

Its media release shows that Lukoil’s portfolio is quite extensive. It works in 32 countries worldwide, conduct geological exploration both in the West and in Africa. For now in Africa, it has one success story. For the past ten years, Lukoil company’s operations in the Republic of Ghana where it focuses on upstream exploration. The reserves evaluated on the blocks proves to be sufficient for their industrial development.

On the opposite side, Russian news agencies reported that Lukoil exited projects in Cote d’Ivoire, where it had led exploration in the deep offshore. The company confirmed the information about leaving the projects to TASS News Agency.

In August 2015, Lukoil also pulled out of the oil and gas exploration and drilling project that it began in Sierra Leone. According to Interfax, a local Russian News Agency, the company did not currently have any projects and has backed away due to poor exploration results in Sierra Leone.

It reported that drilling in West Africa, including Côte d’Ivoire and Sierra Leone, did not bring Lukoil the expected results, as preliminary technical results did not demonstrated commercial hydrocarbon reserves. According to official reports, Lukoil has been active in a number of countries with a high level of political and economic risks that could significantly complicate the work of the company in a particular region, and even lead to its termination.

Russia’s Lukoil is one of the world’s biggest vertically integrated companies for production of crude oil and gas, and their refining into petroleum products and petrochemicals. The company is a leader on Russian and international markets in its core business and its key mission is to harness natural energy resources for human benefit and supports long-term economic growth, social stability, prosperity and progress in the regions where it operates.

Continue Reading

Publications

Latest

Trending