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Russia’s Lukoil Finds A New Home In Senegal

Kester Kenn Klomegah

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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.

Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

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Africa

Why Young African Scholars Must Engage the Law and Politics of Africa through New Perspectives

Olalekan Moyosore Lalude

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The Year of Africa was a powerful phase, a transitional moment that saw Africa in liberated black and white images. In one, a woman wearing sunglasses and sitting astride a motorcycle scooter communicated freedom and a promise of a bold future.In another, a smiling, young woman in a polka dot dress wore Independence in a sash, followed by a happy crowd. In yet another, a grinning man borne on the shoulders of two other men in a throbbing crowd, carried a placard that read: COMPLETE INDEPENDENCE 1961. It was the year that saw seventeen African states begin a journey of black statehood. Those images were metaphors of liberty in a continent that had been kept away from deciding the course of its own destiny. 1960 was a beginning and the end of the African struggle.

It was the beginning of the African struggle because Africans in the independent states were transitioning from struggling against colonialism to contending against the political realities of their post-independent states. And it was the end, because those Africans didn’t have to contend against colonialism any more. In the true picture of things, it was a transition from the political control of people who sought the wealth of the continent to a struggle with murderous regimes, and the sad realization of the true damage that colonialism had wreaked in the political arrangement of the people.In Nigeria, it was the beginning of the weaponization of ethnicity and of resentful distrust in state politics.

Africa in the 1960s was a dramatic spectacle of violence, new beginnings and the creation of histories that has informed the present. Independence movements aspired towards liberated African states. The consciousness of colonial restraints inspired actions that marked the trajectory of the continent’s destiny. The political history of Africa’s becoming is a timeline of seesaw moments. Dictators have risen and have fallen in the hubris of forgetfulness thatthe powers that saw to their rise could see to their fall. The legal systems, processes, institutions and the politics of Africa were forged in the turbulence of African history.

Today it is easy to say that Africa has made progress in its strides towards social and political evolution, but the past is a mirror of solutions to present problems. This is why it has become imperative for newer approaches to emerge in the study of law and politics in the context of Africa. Founded in 2020 by me, the Carnelian Journal of Law and Politics is Africa’s response to the need for new insights on law and politics in the African context. This new journal gives young African researchers the opportunity to contribute top quality perspectives to the discourse on the law and politics of Africa. This is important as newer voices are needed to give an inter-generational balance to the debate on African law and politics. And this is why the journal has emerged to bridge the scholarly gap.

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A Tale of Two Sudans

Simon Wolfe

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For the first time in decades, Sudan is on a path to peace and democracy, turning the fall of a dictatorial regime into a reckoning with entrenched societal fissures and the overhaul of the institutions that reinforced them. On the other hand, South Sudan and its unity government, once a darling of western governments and NGOs as a model for religious freedom and democratic potential, continues to struggle to build peace and stability in the absence of any consolidated, legitimate institutions of authority.

It may be time to re-examine what we think we know about the war that split them apart.

Sudan: A Case for Cautious Optimism

Since the 2019 protests and coup that ended the repressive 30-year reign of dictator Omar al-Bashir, Sudan’s transitional government is slowly working to undo decades of damage and emerge from isolation.

In recent weeks, Sudan has signed successive peace deals with rebel forces addressing grievances that have long inhibited a permanent resolution to the conflict. The agreements separate religion from the state and establish a commission for religious freedom mandated to protect the country’s Christian minority. They also grant autonomy to the contested regions of Blue Nile and South Kordofan and set Darfur on a path to reunification under its own governor. An August 31 agreement on Darfur also covers power sharing, security, transitional justice, land ownership and the return of internally displaced persons and refugees.

In addition to completing the peace processes mandated in Sudan’s interim constitution, Sudan has also taken steps to reset relations internationally. Though the transitional government has limited power in this area, indications are encouraging for the potential normalisation of Sudan’s relationship with Israel – which would, in turn, support Sudan’s case for removal from the United States’ list of state sponsors of terrorism.

Positive as the outlook appears to be, Sudan has a long, difficult road to recovery ahead. The transitional government has 26 months left to lay the groundwork for a civilian, democratically elected government to take over. In addition to the colossal challenge of rebuilding institutions nearly from scratch, the pandemic and the global commodity market collapse have generated urgent economic woes.

Moreover, anyone with experience on the ground in Sudan will warn against misplaced confidence at this early stage. Connection with the international community – and international markets – has long served as an incentive to end the conflict, but even the most promising of peace agreements has failed to produce sufficient stability for sustained development.

South Sudan: A Grim Reality

If Sudan calls for cautious optimism, South Sudan demands a reckoning with the failure of the international response.

When South Sudan seceded in 2011, observers were optimistic. Those in the international community – both in the omnipresent NGO sector as well as foreign governments (principally the United States) believed that the oppressed Christian South would finally be free from its Islamic subjugators in the North, and the resolution of this religious divide would finally bring peace to the region. Instead, two years after independence, a brutal civil war broke out between President Salva Kiir Mayardit and former First Vice President Riek Machar, displacing significant numbers of people and leaving large swathes of the country reliant on humanitarian aid. Best estimates of numbers killed are upwards of 400,000, which at times has rivaled the war in Syria that received far greater attention.’

So, what happened? How did the Cinderella story of South Sudan’s independence become a nightmare?

The Sudanese People’s Liberation Movement/Army (SPLM/A), the rebels turned political party who governed the country at independence, were ill-prepared to fulfil the functions of a state, despite the heavy investment and optimism afforded them by their international supporters leading up to 2011. Well before South Sudan split from the north, NGOs and aid groups had provided the overwhelming majority of state services, often with incorrect or incomplete knowledge of where resources were going. Some organisations even unwittingly provided direct financial to support to militias or funded ‘dialogues’ that served primarily as brand rehabilitation for war lords looking to take advantage of a sprawling and largely unregulated aid industry.

Arguably the international humanitarian response formed the economic, social and political foundations for the South Sudanese state that emerged in 2011. The sad irony is that these foundations have been purged by years of corruption and mismanagement since.

This dynamic followed South Sudan beyond independence, creating a cycle of escalating violence enabled by a steady flow in billions of dollars of humanitarian aid. The assumption that the Southern forces represented a unified Christian bloc fighting for religious freedom and human rights was convenient for warlords seeking resources and legitimacy and appealing to the international NGO and donor community – especially to faith-based aid efforts – but it has proved to be devastating for the millions affected by the ongoing conflict.

Ultimately, because the 2005 peace process took the Southern rebel forces’ branding at face value – with the support of the aid industry – it failed to confront the fragmentation and factionalism that had destroyed South Sudan and anticipate that these fissures would continue and undermine state-building efforts today. Though a tragedy for the South Sudanese, lessons from the failure of peacebuilding efforts in South Sudan may prove valuable to its northern neighbour – and Sudan’s transitional government appears to be learning already.

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Russia Readies for Challenges and Opportunities in Africa

Kester Kenn Klomegah

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Within the framework of the joint declaration adopted at the historic Russia-Africa Summit, the Ministry of Foreign Affairs of the Russian Federation has established a Secretariat of the Russia-Africa Partnership Forum. The Secretariat of the Russia-Africa Partnership Forum has also moved to create an Association of Economic Cooperation with African States (AECAS).

The Secretariat of the Russia-Africa Partnership Forum primary task is to coordinate efforts for promoting cooperation between Russian and African integration associations, ensure political and diplomatic support for projects in Africa carried out with Russia’s leading state-run and private companies’ involvement, and for other aspects of preparations for Russia-Africa summits.   

The Association of Economic Cooperation with African States was established as a non-profit organization on 12 April 2020 in accordance with a directive of the President of the Russian Federation Vladimir Putin dated 21 March 2020 with the assistance of the Russian Ministry of Foreign Affairs.  

On September 9, the Roscongress Foundation and the Association of Economic Cooperation with African States (AECAS) held a ceremony in Moscow to sign a cooperation agreement as part of a presentation of the Secretariat of the Russia-Africa Partnership Forum. The agreement was signed by Roscongress Foundation CEO and Chairman of the Board, Head of the Russia—Africa Partnership Forum Coordinating Council Alexander Stuglev and the Head of AECAS Alexander Saltanov.

The speeches delivered at the meeting provided detailed information on the current and prospects of cooperation, and development of relations between the Russian Federation and African countries in the context of the results of the Sochi Summit. The discussions offered an insight into the main areas of activity of the Secretariat and the Association, their tasks to expand and strengthen Russian-African ties in within the framework of the dialogue mechanism of the Russia-Africa Partnership Forum. 

“The Russia-Africa agenda has taken on special relevance today: the first Russia-Africa Summit and Economic Forum demonstrated the true potential of strategic relations between our countries. We are ready to make efforts and, jointly with the Association, help to create a favourable business climate, while serving as a bridge between Russian and African businesses and providing both sides with high-quality conditions for collaboration,” Stuglev said at the signing ceremony.

On his part, Saltanov said “Russia’s interest in economic, scientific, and cultural cooperation with African countries is long-term, sustainable and importantly, has historical roots. For their part, African countries are interested in Russian investments, technologies, and opportunities for training skilled personnel. The Association’s current goal is to actively search for new growth points and build a structure to expand the scope of common interests and further cooperation with the African continent.”

Mikhail Bogdanov, Special Presidential Representative for the Middle East and Africa and Deputy Minister of Foreign Affairs of the Russian Federation, attended the event. Delivering the opening speech, he said that “The first Russia-Africa Summit, a truly historic event that took place in Sochi in October last year was a response to these changing global challenges. It convincingly illustrated that Russia and its friends in Africa see each other as important and promising partners.

He further explained: “To provide efficient functionality for this new dialogue mechanism the Secretariat of the Russia-Africa Partnership Forum has been created. This structure aims to coordinate the entire range of relations with the African countries. It will oversee the formation of interagency expert groups that will come up with tangible solutions to develop and enrich economic, research, and humanitarian cooperation with the preparation for new Summits in mind.”

Oleg Ozerov, Ambassador-at-Large and Head of the Secretariat of the Russia-Africa Partnership Forum, stressed that “The first Russia-Africa Summit and Economic Forum was a landmark event and achievement that made it possible to bring together all key politicians and business representatives from Russia and the African continent, establish contacts and agree on future cooperation areas. The second Russia-Africa event, in turn, will demonstrate the results of our efficient interaction, and, above all, economic results.” 

In May, Ozerov was appointed Ambassador-at-Large and Head of the Secretariat of the Russia-Africa Partnership Forum. The secretariat will prepare the second Russia-Africa Summit due in 2022 as per the agreements reached at the first ever Russia-Africa Summit held in Sochi. Biographical document made available says Ozerov is a diplomat with extensive experience at the Foreign Ministry, including with Arab and African countries.

As part of its preparation for the next Summit in 2022, the Secretariat of the Russia-Africa Partnership Forum has created three new Councils. (i) The Coordinating Council will be led by CEO and Chairman of the Roscongress Foundation Alexander Stuglev, (ii) The Research Council will be chaired by Irina Abramova, Director of the Institute for African Studies of the Russian Academy of Sciences and (iii) The Public Council will be headed by Yevgeny Primakov, Head of Rossotrudnichestvo.

These three councils will closely cooperate and hold regular meetings, under the control and with the participation of the Russian-Africa Partnership Forum Secretariat. Besides coordination, the Councils will deal with developing substantive conceptual offers for the development of economic, science-technical, humanitarian and other types of cooperation between Russia and the African states.

Russia has been looking for ways to continue building relations based not only on the nostalgic memories of shared past, that of the liberation of African states, but on new values as well: protection and reinforcement of the African states’ sovereignty, the idea of maintaining and strengthening peace, good neighbourliness and cooperation with Russia.

Further, Russia is interested in the exploration and development of mineral resources and energy. It has not significantly invested in needed infrastructure in the continent, while agriculture remains only as a promising area for cooperation. That compared to the golden days, Soviet specialists built major infrastructure facilities, including hydroelectric power plants, roads and industrial enterprises across Africa.

Now, Russian companies are ready to work with their African partners to upgrade transport infrastructure, develop telecommunications and digital technologies, provide information security, and offer the most advanced technologies and engineering solutions.

In 2018, Russia’s trade with African states grew more than 17 percent and exceeded $20 billion. During the Sochi summit, President Vladimir Putin said he would like to bring the trade figure to, at least, $40 billion in the next years. Experts, however, argue that with more than two decades of missed opportunities, Russia could significantly increase trade by improving its own export products and that means competing with other foreign players in Africa.

The first Russia-Africa Summit and Economic Forum was held in Sochi in October 2019 under the slogan – For Peace, Security, and Development. That event attracted over 6,000 participants, including representatives of all 54 African countries, 45 of which were represented by Heads of State and Governments.

The Summit culminated in the adoption of a final declaration that sets out the goals and objectives that have been endorsed for further development of Russia-Africa cooperation in different dimensions. It designated the Russia-Africa Partnership Forum as a new mechanism for dialogue in addition to summits in the Russia-Africa format once every three years. The second Russia-Africa Summit will be held in 2022.

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