Page 6 - FSUOGM Week 43 2019

FSUOGM COMMENTARY FSUOGM
Moscow’s new African initiatives
Russian companies and African states signed a number of new memoranda last week in Sochi
AFRICA
WHAT:
The first Russia-Africa Summit took place last week.
WHY:
Talks on oil and gas investment opportunities led to the signing of multiple MoUs at the gathering.
WHAT NEXT:
These developments are encouraging but do not necessarily portend a huge influx of Russian investment in Africa projects.
THE Kremlin’s first Russia-Africa Summit, which took place in the Black Sea resort of Sochi last week, appears to have been a success. It was attended by government officials and business- men from more than 50 African countries and was described by Russian President Vladimir Putin as the start of a new phase in relations between the Kremlin and Africa.
With respect to oil and gas, the two-day gath- ering facilitated meetings between Russian and African delegates and led to the signing of multi- ple documents that called for Russian companies to participate in African projects. This essay will examine some of those deals and discussions.
Equatorial Guinea
One of the African countries that attracted the attention of Russian companies last week was Equatorial Guinea, which possesses both crude oil and natural gas reserves.
During the summit, Gabriel Mbaga Obiang Lima, the African state’s Minister of Mines and Hydrocarbons, signed two documents with Russian firms on October 23. As of press time, neither the Equatoguinean government nor the Russian companies had revealed many details of these deals.
The African Energy Chamber has reported, though, that one of the documents was a memo- randum of understanding (MoU) with Rosgeo, Russia’s state geological concern. In a statement, the chamber said that the document provided for the parties to work together “mainly in airborne geophysical operations, 2D and 3D regional seismic survey in transit and deepwater offshore zones, but also in the processing and interpreting of seismic data (including gravity and magnetic survey, electrochemical and geochemical stud- ies), engineering studies and other works.”
Meanwhile, the organisation also reported that Obiang Lima had signed an MoU with Lukoil, Russia’s largest privately owned oil operator. This document lays the groundwork for the Russian firm’s participation in explo- ration and development work in Equatorial Guinea, it said.
Ghana and Congo
Lukoil also displayed interest in other African countries during the summit. Its CEO, Vagit Alekperov, told journalists at the event that his company was eyeing opportunities in Ghana and the Republic of Congo (Brazzaville).
“We are holding rather active negotiations with the government of Ghana jointly with [the Norwegian company] Aker on a deepwater block,” he said. “I hope that we will hold several joint negotiations, including a meeting with Ghana’s authorities here.” He did not identify the block under discussion but said Lukoil hoped to wrap up negotiations on the project by the end of 2019.
Alekperov also expressed interest in expand- ing the Russian company’s operations in the Republic of Congo but did not say whether the parties were discussing any new initiatives. But he did state that Lukoil was enthusiastic about its participation in the Marine XII offshore scheme. (Italy’s Eni is serving as operator of this project, in which Lukoil acquired a 25% stake in September.)
“We also wish to expand our presence there jointly with Eni,” the Lukoil chief said. Work is already underway at the Marine XII block, he added.
Nigeria
Russian delegates also held extensive discussions with representatives of Nigeria’s government and its national oil company (NOC) on October 23.
According to statements from both sides, the talks covered plans to revive Nigaz, a joint venture (JV) formed by Nigerian National Petro- leum Corp. (NNPC) and Russia’s state-con- trolled gas monopoly Gazprom. Russian and Nigerian officials pointed out that Nigaz could help Nigeria utilise its massive gas resources and build new gas infrastructure.
Meanwhile, NNPC conferred with Lukoil about several initiatives, including the explora- tion of deepwater fields and the formation of a JV to rehabilitate the former’s ageing refineries, which have a combined throughput capacity of
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w w w . N E W S B A S E . c o m Week 43 30•October•2019