Kenya is ready to join the ranks of oil producing nations, with shipments slated to begin in 2016.
This means Kenya will become the first oil exporter in east Africa.
East Africa has been experiencing a buzz of exploration, particularly since Tullow Oil first discovered oil in Kenya last year.
There have also been discoveries in Uganda and significant gas finds in Tanzania and Mozambique.
Tullow plans to start pumping in Kenya as soon as next year, according to the chief operating officer Paul McDade.
"In Kenya, we [Tullow Oil] have significantly upgraded our resource estimates for the South Lokichar Basin following the highly successful flow testing of Ngamia and Twiga-South. Additionally in Kenya, Tullow has made a new discovery at Etuko-1," says Aidan Heavey, the chief executive of Tullow, in its trading statement and operational update in July.
Mr Heavey goes on to explain additional progress in east Africa.
"In Ghana, the government has approved the plan of development for the TEN project, our second offshore project in the country," he says.
"In Uganda, we have made substantial progress with our partners and the government and expect to sign a memorandum of understanding, which will outline the key principles for the future development of the Lake Albert Basin development.
"We also continue to have an industry-leading exploration and appraisal programme with results from key frontier wells in Kenya, Ethiopia, French Guiana, Norway and Mauritania all expected in the second half of the year," Mr Heavey adds.
Tullow estimates after three discoveries in Kenya's South Lokichar Basin it has found more than 300 million barrels of oil equivalent resources.
The Canadian explorer Africa Oil announced recently it had started drilling a new well in Kenya with Tullow. The company expected it would take about two months to drill and evaluate the content of Ekales-1, located within Kenya's Lokichar basin.
The well was started on July 22, and has a planned total depth of 2,500 metres.
Africa Oil and Tullow each hold a 50 per cent working interest in the prospect.
"The Ekales project is probably one of the lowest-risk prospects in our inventory," says Africa Oil's chief executive Keith Hill in a company-issued press release.
"The proximity and similarity to the existing Ngamia and Twiga discoveries give us a high degree of confidence that we will find oil and continue to build the discovered resources necessary for commercial volume threshold," Mr Hill says.
"The recently announced Etuko discovery on the flank of the Lokichar basin has opened a new play fairway and provided further confirmation of the world-class potential of the Lokichar Basin," Mr Hill adds.
The Etuko well in block 10BB has reached a total depth of 3,100 metres.
After 50 years of disappointments, developments in the Lokichar Basin have "been the key breakthrough", Oswald Clint, an analyst at Sanford C Bernstein & Co, commented last month.
"Of 30 wells between 1960 and 1992, prior to Tullow's entry, 13 were dry, 12 encountered non-commercial gas shows and five encountered signs of oil staining or oil shows."
business@thenational.ae
Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
First Person
Richard Flanagan
Chatto & Windus
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
