Oil and gas to offer new investment opportunities

18th November 2008By Karen Remo-Listana www.business24-7.ae

Foreign direct investment (FDI) in regional energy companies is still limited but further opportunities could emerge with potential future oil and gas listings and changes to capital market legislation, says a Morgan Stanley report released yesterday. The study, called "Middle East: Short Gas, Long Demand - A New Role for IOCs", says the extent and range of exposure to oil and gas in the region is set to increase. The study adds that moves such as the proposed part-listing of the Total/Aramco Jubail refinery may eventually open up new opportunities. Saudi Aramco and Total have formed a joint venture to build a 400,000-barrel-per-day (bpd) grassroots refinery in Jubail, due to start operating in 2013. The intention is for 25 per cent of the refinery to be listed on the local exchange at some stage. Prior to the regional market correction there were plans to privatise and list the Kuwait Foreign Petroleum Exploration Company (Kufpec) - the international E and P arm of KPC - on the Kuwaiti stock market as part of the government's privatisation programme. This is now on hold, given current market volatility, but should plans be revived it would present investors with an opportunity to gain exposure to Kufpec's upstream oil and gas operations, says Morgan Stanley. Recent changes to capital markets legislation are intended to encourage foreign investment in the region. In August, the Saudi Capital Markets Authority approved the use of swap agreements between non-resident foreign investors and authorised persons to allow international investors to buy Saudi stocks through intermediaries, while local investors retain legal ownership of the shares. "As countries such as the UAE and Qatar continue to establish themselves as significant international financial centres, the need to attract foreign investment is likely to continue, and foreign ownership limits may be reviewed," adds the report. According to Morgan Stanley's estimates, the oil and gas sector accounts for 84 per cent of government revenues in Saudi Arabia and just under 80 per cent in Kuwait and the UAE. However, availability and access to listed oil and gas equities in the region is extremely limited as most companies are state-owned. Those energy stocks that are listed typically have limited liquidity and foreign ownership restrictions, with the result that less than one per cent of the region's total market cap of $800bn (Dh2.9 trillion) - $3bn - is theoretically available to international investors. "When screening for oil and gas opportunities in the Middle East, investors should therefore also consider ancillary sectors that are heavily exposed to oil and gas and which currently carry higher weightings in regional indices. "Petrochemicals and power generation are two key sectors in this respect." Since a sharp correction in 2006 regional equity markets have generated only modest returns after seeing much lower levels of speculative activity. Until recently the consensus view was that the large budget surpluses and petrodollars generated by higher crude prices would insulate regional equity markets from the liquidity concerns elsewhere in the world. However, as market conditions have deteriorated, negative sentiment has weighed on shares and GCC markets are down more than 40 per cent since July. The recent sharp falls in equity prices, on the other hand, may also present attractive opportunities to state finance-backed investment vehicles like Taqa, Mubadala and Kufpec. "Strategic investments remain a priority, which may influence required returns and possibly mean that diversified exploration and production; and energy portfolios are more attractive than a high quality single asset," the report adds. Similarly, there are also limited opportunities for the international oil companies (IOCs) in conventional oil but the exploration and production operations which are becoming ever more complex - such as offshore, deepwater, high temperature high pressure, heavy oil, tight/sour gas operations - would provide more opportunities for the oil majors. "It is obvious that, for long-term growth, the IOCs need to establish more material positions in regions like the Middle East. What is less obvious - and what surprised us during our trip to the region - is the growing recognition there is a meaningful role for the majors and service companies to play in the region." While the national oil companies (NOCs) have decades of experience in developing their countries' reservoirs and have built strong relationships with buyers in established export markets, the IOCs can bring cutting-edge technology, human capital, access to emerging and newly developing export markets, sharing some of the project risk and the project management. However, there will be a shift in the agreements. Morgan Stanley says existing contracts will be renegotiated and reserves are unlikely to be booked as IOCs adopt a service-oriented model. Negotiations between NOCs and IOCs are likely to be more centred on cash flows rather than ownership or shares of physical barrels. From the 1940s until recently the IOCs have been driven largely by a philosophy of finding and then developing oil and gas, at first in the resource-holding nations, and then, after the creation of Opec, in other areas of the world. As reserve gathering was the mission the reserve levels of the majors came to be seen as the measure of their success, and finding and development costs the measure of efficiency. In a more evolved world of energy Morgan Stanley expects a more service-oriented model - the development and marketing of hydrocarbons on behalf of resource-holding nations. "As service providers, oil companies may well not 'book' reserves, and in many cases there may be no need to 'find' them. Relationships and behaviour could therefore change very dramatically over the next 10 years." The renegotiation of BP's contracts with Abu Dhabi for the Adco onshore and Adma offshore concessions, which are due to expire in 2014 and 2018 respectively, will be something of a watershed. These concessions were initially awarded as far back as 1939 for Adco, which contains some of Abu Dhabi's largest oilfields, including Bab and Bu Hasa, and 1958 for Adma, which contains the large offshore Zakum field. Production from these concessions is significant for BP, with net production of 130,000 barrels of oil equivalent per day (boepd) from Adco and 80,000 boepd from Adma. "We understand BP is currently renegotiating these fixed margin contracts. We suspect it is unlikely that BP will benefit from reserve booking but that there will a proxy economic benefit reflected on its books." According to the Baker Institute for Public Policy, the hydrocarbon power has now shifted to the NOCs. The seven major Western oil companies currently have only 10 per cent of the world's oil and gas resource base. About 77 per cent of the world proven oil reserves (1,148 billion barrels) are owned and controlled by NOCs and that is without equity participation by big international oil companies. The remaining 13 per cent of the reserves are the subject of joint exploitation by IOCs and NOCs. Moreover, 14 NOCs or newly privatised NOCs comprise the world's top 20 oil producers in terms of reserves, production and sales volumes. Five of those are from the exporting countries of the Middle East and North Africa.
Price correlation
Investment in oil and gas is likely to go ahead despite lower oil prices and the global economic downturn, says Morgan Stanley. "Some of the more significant strategic investment projects will be funded directly from government treasuries, and are thus not constrained by domestic or international banking liquidity concerns," the report says. "Ongoing investment projects were undertaken when crude prices were at much lower levels, and indeed, with current prices still above break-even budget levels for the majority of Middle East oil and gas producers, it is unlikely that we see any significant slowdown in investment spending in the region." Some projects, however, may go through a re-evaluation phase to reassess the impact of current market conditions.

Vietnam oil company on a roll

15th April 2008 www.worldtribune.com

PetroVietnam found oil in the Bir Seba field, located in the Saharan Touggourt area, after 63 drilling days. Industry sources said this was the shortest drilling period ever recorded. PetroVietnam has also signed a contract with Kuwait and Japan for a $2.5 billion oil refinery and petrochemical complex. The Vietnamese company was also preparing for oil and gas exploration projects in Iran and Tunisia. The sources estimated that the Algerian oil field would produce more than 5,000 barrels a day. They said full production could begin in 2009.

Tunisia awards oil search permits to Vietnam firms

21st February 2008 by Sonia Ounissi www.uk.reuters.com

Tunisia has awarded oil and gas exploration permits to a Vietnamese joint venture as part of a drive to lure more investment to its energy sector, Tunisian state news agency TAP reported on Tuesday. Petrovietnam Exploration and Production Corporation and Vietsovpetro will work in partnership with Tunisian state-owned Entreprise Tunisienne des Activites Petrolieres (ETAP). Under their production sharing accord, the partners will invest 16 million Tunisian dinars ($13 million) in the exploration operation, TAP said. The agreement covers a total area of 3,976 square km near the southern town of Gabes. Tunisia, which imports most of its oil needs, hopes new discoveries of oil and gas will boost domestic energy production. The government of the north African country aims to drill 15 new wells per year between 2007 and 2011, up from eight wells in the previous five years. Vietsovpetro is owned by Petrovietnam and Russia's Zarubezhneft.

Tunisia awards oil search permit to Primoil

18th January 2008 by Sonia Ounissi www.money.ninemsn.com

Tunisia, which is eager to attract more foreign investment into its energy sector, has granted an oil and gas exploration permit to Primoil, a government official said on Saturday. Primoil is a joint venture between France's Soprodis and Australia's Oil Search Ltd.. Under a 4-year production sharing accord, Primoil in partnership with la Societe Tunisienne des Activites Petrolieres (ETAP), will invest $5 million to drill one well, he said. The agreement covers an area of 2,836 square kilometres (1,772 sqaure miles) straddling the northwestern provinces of Kef and Jendouba.

India to develop oil in Syria

7th January 2008 www.earthtimes.org

NEW DELHI, Jan. 9 India says it is in search of a partner to jointly develop oil reserves in Syria. The issue could be discussed during the visit of Syrian Deputy Prime Minister Abdullah Dardari to India, the Petroleum and Natural Gas Ministry said Wednesday. "There is a possibility of the two countries entering into a partnership based on long-term strategic and economic considerations," said a ministry official. He said Syrian and Indian government-owned companies want to partner on long-term strategic and economic projects. Dardari is due in India Jan. 14-21. The aim of this exploration would be to assist Syria in becoming a strategic hub between Southern Europe and North Africa, and between Mediterranean and the Persian Gulf, and to develop north-south and east-west oil and natural gas transportation pipelines, the ministry official added.

Search for Oil wins Tunisia drill permit-officials

14th December 2007 www.reuters.com

TUNIS, Dec 9 (Reuters) - Tunisia awarded an oil and gas exploration permit to Australia's Oil Search Ltd (OSH.AX: Quote, Profile, Research), government officials said on Sunday. Under a 4-1/2 year licence, Oil Search, in partnership with Tunisian state oil firm Societe Tunisienne des Activites Petrolieres (ETAP), will invest $8 million to drill one well, they added. The exploration area of 4,852 sq km straddles the two northwestern provinces of Kef and Siliana. (Reporting by Tarek Amara; Editing by Paul Bolding)

Critical U.S. ally in a turbulent region

2nd November 2007 www.dallasnews.com

Consider a country where about half of the judges and a quarter of political representatives are women, a country with a thriving middle class and nearly universal literacy. Few Americans would think of Tunisia, the Arab and Muslim country wedged between Libya and Algeria on the North African coast. In a turbulent region, Tunisia has been called "the country that works" because of its expanding market-driven economy and progressive practice of Islam. Less known is Tunisia's role as an important ally of the U.S. in its efforts to stabilize the Middle East and fight terrorism, said Mohamed Nejib Hachana, the Tunisian ambassador to the U.S., during a visit this month to North Texas. In a region marked by deep antipathy to many U.S. policies, "you need some true friends," he said in talks with The Dallas Morning News and the World Affairs Council of Dallas/Fort Worth. "Tunisia is a bridge to Africa, the Mediterranean and the Arab world." "Tunisia is a very, very important strategic ally that stays under the radar on purpose," council President Jim Falk told an audience at the Park City Club. "The ambassador and his colleagues have helped the United States in so many quiet ways." Mr. Falk spent most of his teenage years living in Tunisia. North Texas is also home to author Frank Kryza, honorary consul of Tunisia, and Pioneer Natural Resources, the Las Colinas oil and gas company that is one of two Texas companies operating in Tunisia. The other is Anadarko Petroleum Corp. of Houston. Tunisia's first president, Habib Bourguiba, imposed a strongly secular society on the young nation, which has often followed a unique path. After gaining independence from France in 1956, Tunisia allied itself with the West when many of its neighbors were aligned with the Soviet Union. In 1965, when Tunisia pushed Arab nations to open talks with Israel, the Tunisian Embassy in Cairo was burned. Tunisia is lauded for having opened its economy to private investment and granted women nearly equal rights with men. "You cannot fly with one wing," Mr. Hachana said. "Our only wealth is our human resources. "Thanks to God Tunisia does not have large quantities of oil," he added, referring to the corruption and lopsided development often associated with oil wealth. But its authoritarian government has been slower to institute political changes. President Zine El Abidine Ben Ali legalized opposition parties after decades of one-party rule. But the constitution was rewritten in 2002 to clear the way for Mr. Ben Ali to begin his fourth five-year term in 2004. The Tunisian model of reform, where developing a prosperous middle class is considered a national priority, has been a balancing act between tradition and modernity, Mr. Hachana said. "Democracy is not an instant coffee," he said in an interview. "We must have human development along with political reforms. You cannot rush." Neighboring Algeria provided a cautionary example a decade-long civil war erupted there when the military canceled elections that fundamentalist Muslims were poised to win. Islamic extremism is "the new scourge all over the world" whose cause is "poverty, ignorance, the lack of emancipation of women, lack of political reforms and openness," Mr. Hachana said. "You cannot allow yourself to marginalize a portion of your population and allow them to despair." Tunisia outlawed polygamy in 1956, for which it faced harsh criticism from other Muslim nations. Today, religious political parties are banned, and government-trained women clerics are forbidden from wearing the veil. As in Egypt and other Arab and Muslim states, harsh tactics to control the threat of Islamic extremism have encouraged Islamic political activists. "Islam has a great place in Tunisian society ... but no one has the right to declare himself more pious, more Muslim," Mr. Hachana said. Despite its authoritarian government and reputation as a peaceful and modern country, Tunisia has not been immune to terrorism. A Tunisian follower of al-Qaeda bombed a synagogue in 2002, killing 19 people, most of them German tourists. This year, Tunisian authorities were involved in a shootout with Algerian militants plotting to attack the U.S. and British embassies. During his visit to Texas, Mr. Hachana lamented the dwindling of U.S. military aid to his country and called for deeper economic and educational ties. The U.S.-Tunisian alliance dates to 1799, when their first agreement on friendship and trade was signed, he noted. Tunisia's free trade agreement with the European Union rolls out in 2008, and the country is working to craft a similar pact with the United States. Mr. Hachana said he hopes to foster deeper understanding by developing Arabic language exchange programs with public universities in the Dallas area. During his visit, students in the international baccalaureate program at L.D. Bell High School in Hurst grilled him on human rights, desertification and other issues. Mr. Falk said he was hoping they would ask more about Tunisia's tourism industry, which counts among its treasures a desert setting used in Star Wars and the ancient synagogue on Djerba, the "Island of the Lotus Eaters," where Ulysses was reputedly delayed on his way to Troy.

Major Economic Forum Will Be Held in Tunis

3rd October 2007 www.allafrica.com

A major economic forum dubbed the "Tunisia Economic Forum" will take place north of Tunis on November 9-10, 2007 . The event which is part of the activities scheduled for the 20 th anniversary of the November 7, 1987 , Change, will be held under the patronage of President Ben Ali. The forum which will bring together senior Tunisian, Arab and international officials, business and investment leaders, heads of banks and corporations, economists and other experts is organized by Al Iktisad Wal- Aamal group, the Tunisian Foreign Investment Promotion Agency (FIPA) , the Financial Market Council in Tunisia and the Tunisian Union for industry, commerce and handicrafts (UTICA). It aims not only at analyzing new developments in Tunisia's rapidly modernizing economy in light of the country's 11 th development plan, but also at attracting investment opportunities including those related to the major infrastructure projects and mega projects launched by the Tunisian government at a time when the country is in the final phase of full accession to the European Partnership Agreement.

Mena region faces higher petrochem costs despite cheap feedstock

25th September 2007 www.gulf-times.comBy Santhosh V. Perumal

The petrochemicals sector in the Middle East and North Africa (Mena) is likely to witness higher engineering, procurement and construction (EPC) costs, according to National Bank of Kuwait. Despite abundant availability of cheap feedstock and growing demand that attracted new petrochemical capacity to the East, the rising costs would force project developers to increasingly tap primary equity and debt markets for their capital requirements, NBK said in a latest report GCC: Petrochemicals'. Moreover, the Mena petrochemical sector risks capacity overbuilding and product imbalances. The rising EPC costs are forcing Mena petrochemical players to revisit their growth plans, as estimated project cost was escalating and the projected completion time was being extended, it said. The EPC costs, which include factor inputs, contractors' margins and systematic pricing of project risk by the contractor, make up as much as 70% of the total project cost. It is unlikely that EPC costs will come down anytime soon. As the industry goes through rapid expansion and aggressive economic growth in most parts of the world, prices of construction materials soar, NBK said. Stressing that it is increasingly getting expensive to add new capacity going forward, the bank quoted Apicorp (Arab Petroleum Investments Corporation) research that projected a 52% increase in capital spending between 2007 and 2011 without any increase in number of projects undertaken. Apicorp estimated that $395bn will be invested in the Mena energy sector between 2007 and 2011. Of this, over $80bn will be invested in the petrochemical and fertiliser sectors, while another $93bn will be invested in the integrated refinery-petrochemical sector. Apicorp further estimated that over 70% of the capital investment in the Mena petrochemical and fertiliser sector will be raised through the debt route. This would require $11bn in new debt every year in the 2007-2011, which is much higher than the $7.5bn raised in 2006, the NBK report said. According to Apicorp, prices of world metals and minerals, as measured by the World Bank, have increased at an annualised rate of 52% since January 2003 and the contractors' margins that had shrunk to 2%-5% range during 1990 to 2002 have increased significantly to around 9%-12%. As the risk of finishing a project within a specified cost and time frame has gone up, contractors are becoming more risk averse and included the increased risk in their costs, it said. As EPC costs and capital needed to bring new capacity soared, the bank said it expected to see more activity in the primary and debt markets. The report, however, has cautioned that the petrochemical industry is cyclical and in the event of a global slowdown, new capacities expected to come online in the near future might depress utilisation rates and profitability of petrochemical plants. The Mena petrochemical product portfolio was heavily skewed toward natural gas based products, the report said, adding that countries such as Qatar and Egypt have less ability to diversify away from natural gas based products because their hydrocarbon reserves were more gas rich than oil rich. The report said present construction activity suggests that over the coming five years, the Mena region will account for 31%, 60% and 76% of expected new capacity additions of benzene, ethylene and methanol respectively. The bulk of the new ethylene capacity is expected to come online in 2008 and there is a risk that demand from emerging economies may not catch up with supply, the report said. Observing that natural gas in the Middle East is priced at less than one-fifth the price in the US, NBK said the Middle East's competitive feedstock advantage and close proximity to consumers in countries like China and India have placed it in an enviable position. On the product imbalance, the report said despite its vast hydrocarbon reserves, Mena's petrochemical industry focused more on using natural gas methane, ethane and propane rather than refining by-product, naphtha. The reason behind the dependence on gas feedstock are abundance of flared gas from oil wells combined with efforts from upstream oil producers and the relatively small refining capacity in the Middle East and Africa, it added. On capacity overbuilding in the Mena region, the report said it is being triggered by both macroeconomic and microeconomic factors. Among the macroeconomic factors were the huge budget surpluses from rising crude oil sales and available for allocation to the oil and gas industry, including the petrochemical industry. The microeconomic factors included increased profitability of petrochemical investments fueled by a strong demand for the petrochemical products.

Tunisia's August inflation rises to 3.2 pct

13th September 2007 www.africa.reuters.com

TUNIS (Reuters) - Tunisia's consumer price inflation rose 3.2 percent year-on-year in August from 2.7 percent in July on the back of a 4.3 percent rise in transport costs, official data showed on Friday. The International Monetary Fund said the country's inflation outlook is positive and the average annual rate should be around 3 percent despite of an increase in oil products prices. The government has an inflation target of 3.5 percent for the whole year of 2007 against 4.5 percent in 2006.

World Bank grows MENA region support programmes in 2006-2007

6th September 2007 www.bi-me.com

During fiscal year 2007 (1 July 2006-30 June 2007), the World Bank Group announced it committed US$2.6 billion in loans, credits, grants, and guarantees to governments and the private sector in countries across the Middle East and North Africa (MENA) region. The recipients are using these funds in more than 40 projects/programmes designed to enhance the business and investment environment and to empower the poor. In middle income countries across the region, the World Bank Group focused its technical and financial assistance on promoting private sector development while enhancing women's economic opportunities, strengthening governance and institutions and supporting the management of new infrastructure projects. In Lebanon, Iraq, West Bank and Gaza, the World Bank Group's strategy is to address priority needs of vulnerable communities and those at risk while contributing to solid foundations for government and market institutions. During Fiscal Year 2007, the World Bank Group provided technical and financial support to reforms in the Middle East and North Africa Region. said Daniela Gressani, World Bank Vice President for the Middle East and North Africa Region. The pace of reforms needs to be maintained in order to achieve a broader impact across all segments of societies in the region. Removing barriers to private sector involvement and improving governance are critical to accelerate job creation and to ensure greater opportunities for the growing youth population in the MENA region", she added. All four institutions comprising the World Bank Group contributed to this effort: the International Bank for Reconstruction and Development (IBRD), which provides project financing, risk management products, and other financial services to middle income countries in the region; the International Development Association (IDA), which currently provides interest-free loans and grants to low income countries in MNA namely to Yemen and Djibouti; the International Finance Corporation (IFC), which has expanded its portfolio to include equity investments, loans, guarantees and advisory services to private-sector business; and the Bank Group's political risk insurance agency, the Multilateral Investment Guarantee Investment Agency (MIGA) with active projects in a number of countries. The past year witnessed unprecedented regional growth, with real GDP rising at an average of 6.3%. This is the strongest showing in more than ten years, despite the difficult conditions in Iraq, Lebanon and West Bank and Gaza. The World Bank portfolio is designed to support ongoing reforms in the financial, education and water sectors, improvements of the business climate, infrastructure management, governance and support to sustainable environmental practices. During the 2007 fiscal year, IBRD and IDA loans, credits and grants commitments totaled US$1.14 billion with investments in infrastructure projects reaching US$575. IDA commitments to Yemen alone reached US$400 million mainly to stimulate non-oil growth, enhance human development outcomes, improve fiscal sustainability, and to address the sustainability challenges of using scarce natural resources. IFC's annual investments in the MENA region fiscal year 2007 reached US$1.2 billion. To support private sector-led growth in the region, IFC pursued new investment opportunities and expanded its advisory services to improve the business-enabling environment. IFC's investments and advisory services support job creation while demonstrating the opportunities that the private sector can provide. The IFC has increased its presence in MENA to address financing gaps in the region's markets including companies' access to finance and private sector involvement in infrastructure. During the past year, the IFC priorities included reducing the constraints on private sector activities in conflict-effected and frontier countries.Through the Lebanon Reconstruction Programme, for example, some 3000 local companies received new loans. IFC is showing that improvements in the region's post conflict countries and other difficult markets can have a significant development impact. This can be done commercially and prudently, in collaboration with like-minded partners, said Michael Essex, IFC Director for the Middle East and North Africa. The region's future growth and its capacity to create meaningful jobs for young people depend on a sustained commitment to improving the business climate and opening sectors to private sector investment, he added. During 2006/2007, the Multilateral Investment Guarantee Agency (MIGA) provided technical assistance for three projects in the MENA region, in addition to co-sponsoring an intra-regional investment summit. The event, held jointly with the Islamic Corporation for the Insurance of Investments and Export Credit and the Dubai International Financial Centre, brought together investors and financiers from across the region. As of 30 June 2007, MIGA's gross guarantee exposure in the region stood at US$285 million, 5.4% of the agency's outstanding portfolio. Guarantees issued by MIGA in the region since 1993 total US$0.5 billion, covering investments in the general banking, manufacturing, sanitation services, sewerage systems, oil and gas, telecommunications, and tourism sectors in ten countries across MENA, helping to promote inward foreign direct investment. This fiscal year marked an important MIGA first in the area of Islamic financing. During financial year 2007, the board approved support for our first Sharia-compliant deal, which we expect to sign sometime this Autumn, said Yukiko Omura, Executive Vice President of MIGA. With the region seeking to raise business standards and increase technical know-how through inward investment we hope this is just the first of many such transactions.

Company has long-term game plan for North Africa

30th August 2007 www.canada.com

SNC-Lavalin Group Inc. said yesterday oil-rich Libya's $4-billion (U.S.) plan to modernize its airports is just the tip of a massive infrastructure development program that will last many years and transform most of North Africa. Canada's biggest engineering and construction group has won a $576-million contract to completely rebuild Benina Airport in Benghazi, Libya's second-biggest city. The job of modernizing the larger Tripoli Airport went to an international consortium. "We've been active in Libya doing power, water transportation and other infrastructure work for more than 20 years and persistence is paying off," said Riadh Ben Aissa, SNC-Lavalin's executive vice-president for worldwide construction."We've been operating in Algeria for 30 years or more and North Africa and the Middle East are regions we know very well," he said. "We follow closely their long-term economic development plans. Even if the price of oil does decline, the countries of those regions have the financial muscle to carry through with plans." Both Libya and Algeria have immense oil and gas reserves. North American and European oil companies are jostling for exploration rights in Libya, following the Gadhafi regime's rapprochement with the West. "We're focused on the Great Man Made River water transportation project bringing fresh water from the South to the populous North and other basic infrastructure, but gas-fired power stations and desalination plants will be needed," Aissa said. Exploiting the oil and gas reserves will take some time, but when the big construction projects do shape up, SNC-Lavalin will be ready, he added.

Circle begins drilling at Zita well in Tunisia

23rd August 2007 www.smallcapnews.co.uk

Circle Oil, the international oil and gas exploration and development company, has commenced drilling operations on the Zita Prospect in the Ras Mamour Permit, southern Tunisia. The project is being undertaken in partnership with Exxoil Tunisie Ltd. The well is targeting the two main reservoir types in the area which include the fractured dolomites of the Cenomanian Zebbag formation, which form the main reservoir of the nearby Ezzaouia oilfield and the Upper Jurassic sands levels of the M'rabtine formation which are also productive in the Ezzaouia field. David Hough, Circle's chief executive, said: Today marks the start of an 18 month series of field based operations for Circle in North Africa and the Middle East. Over the next few months, we plan to drill three wells in Tunisia and begin 3D seismic studies on our Moroccan Rharb Basin licence. In addition, a very busy work schedule is currently being prepared for Tunisia, Morocco and Oman for 2008 which will drive the next phase of Circle's evolution and progression towards becoming a balanced exploration and production company.

Economic Union Heading South

20th August 2007By Ron Fraser www.thetrumpet.com

Observers of the movement of capital investment into Africa have largely been concentrating on the extent to which China has penetrated the continent over the past 15 years. Chinese investment in Africa has grown massively over this period. Sino-African trade grew by 700 percent during the 1990s. Trade between China and Africa doubled from 2002 to 2003. In 2004, direct foreign investment by China in Africa represented $900 million of the continent's $15 billion total. Trade between the two again almost doubled during 2005. Increased Chinese imports of oil from African nations, in particular Sudan, accounted for most of this growth. All this activity has led to China becoming Africa's third-most important trading partner, behind the United States and France and ahead of Britain. Yet China's massive investment in Africa has left it with a problem: how to secure those African assets given that continent's volatile and extremely vulnerable political environment. The answer could be in the offing. All of this massive investment by China in Africa has spurred into action other contenders for Africa's raw materials wealth, not the least being the European Union's leading nations, France and Germany. Each is currently locked with the other in a tussle for the extension of its individual hegemony within this greatly underdeveloped continent, in particular for the territory that each once ruled before decolonization took effect. Indeed, in a race not unlike that of colonial days, Africa, it seems, is once again up for grabs. Last week, market monitor RiskCenter.com reported (August 15): With energy security one of the most pressing concerns for the European Union, particularly given the periodic gas disputes Russia continues to have with its neighbors, such as Ukraine and Belarus, the European Commission and many of its member states are increasingly looking towards North Africa. The region has for many years been a significant contributor to European gas supplies, but recent deals and current market noises point to this contribution witnessing sizeable growth. For the EU, North Africa will be a key component of its energy future. The Chinese have been intent on buying favor with African nations by direct investment in infrastructure roads, rail, electricity distribution, port development, etc. to aid in their procurement and shipment of raw materials, especially much-needed oil and gas. By contrast, Germany's heightened involvement is coming significantly from a different quarter: that of military involvement. China certainly has the cash for capital investment, but the German-led EU has the edge when it comes to the regional proximity of its military forces to secure Africa's raw materials and China's African assets. It also has the benefit of lingering attachments and interests within much of Africa as a result of its colonial history within that continent. Both entities, the German-dominated EU and China, have a huge thirst for energy-based resources. There may yet be a deal done between the two that will eventually block out the U.S. and Britain from access to Africa's much-needed energy wealth. Reporting on August 10, the excellent German intelligence source German-Foreign-Policy.com observed: Following the UN's decision to deploy troops to Sudan [where China has heavily invested], warmongers in Berlin are pushing for German participation. German foreign policy specialists from the opposition, as well as from circles close to the ruling cdu party, are calling for Germany showing a presence in the Western Sudanese province of Darfur, at least with military observers or high-ranking officers. Typically, Germany is seeking to further its penetration into Africa initially under the umbrella of its allies, in particular the U.S. In the volatile, oil-rich region of Sudan, the same source reports that It is, above all, Washington and Berlin who are pushing for a UN-mandated intervention in Darfur and seeking to militarily roll back the influence of the Sudanese central government. Regional secession is not being ruled out. This is classic German foreign policy. The same strategy worked brilliantly in the Balkan Peninsula, where Germany motivated an illegal war fought largely by its allies, the U.S. and Britain, and gained for the European Union (aka Germany) the land hinge between East and Western Europe. Having then ensured the involvement of the German Navy running security for the EU in the Mediterranean, the German-led EU took over Malta, which Italian Prime Minister (then EU commissioner) Romano Prodi described as the EU's stepping stone to Africa. Now the battle is joined for the further spread south of the EU behemoth. But it is not only the U.S. that is being played for a patsy to secure German interests in Africa. The German government is currying the favor of African allies in support of its plans for Germany's dominance of the raw materials (in particular oil and gas) and cheap labor, which are the continent's greatest economic assets. Ghana and Nigeria are playing decisive roles with their participation in the Sudan deployment and are receiving millions in German financial aid, for the maintenance of their troops. Further militarization of the African continent is a direct consequence (ibid.; emphasis mine).

North Africa Primed for Upstream and Downstream Growth

9th August 2007Sunil Nair www.prlog.org

With today's release of the "The North Africa Oil and Gas Report 2007-2011", Thom Payne, an energy analyst with business consultants Douglas-Westwood announced that Europe's appetite for hydrocarbons will drive exploration and refining in the neighbouring, energy-rich North African states. LNG and petrochemical refining in particular will see over $20 billion invested in them over the 2007-2011 period compared to the $6.5 billion spent in the past five years. The upstream industry will also see growth in the coming years, highlighted by the return of BP to Libya in a major exploration deal earlier this year, following the dropping of international sanctions against the North African state. The opening up of this vast country will see expenditure on seismic acquisition in Libya double over the forecast period. The report focuses on both the established North African producers of Algeria, Libya and Egypt as well as examining the potential for Tunisia, Morocco and Mauritania. Attention is given to oil & gas production figures, well numbers and market forecasts as well as looking at more substantive, background issues such as domestic energy policies and the role of international oil companies. Traditionally, North African production has focussed on onshore production from prolific natural gas producer Algeria and, fellow member of OPEC, Libya. However, advances in technology have opened up opportunities in other areas, most noticeably offshore Egypt where natural gas fields in the Nile Delta are driving growth in the North African subsea industry. In recent years, Mauritania too has benefited from technological advances marking the development of the deepwater Chinguetti field, as the nation's first steps towards a promising offshore future. In order to support this growing businesses, extensive infrastructure will be required and Douglas- Westwood expect capital expenditure in the North African midstream industry to be worth over $5.2 billion in 2010, twice the value of current levels. This growth will not only be driven by increased offshore production, but also by the development of major trunk lines crossing the Mediterranean, delivering Algerian gas to the economies of Italy and Spain. As long as energy demand in Western Europe continues to increase, the oil & gas industry will continue to look to North Africa and its ample reserves of both conventional oil and natural gas. New technologies have opened up further opportunities particularly in the field of LNG which has effectively opened up the massive gas markets of North America and East Asia and we would expect to see significant increases in exports to these regions from current suppliers Algeria and Egypt over the coming years.

Experts Highlight Role of Bio-Fuel in Achieving MDGs

2nd August 2007Dagnachew Teklu Addis Ababa www.allafrica.com

Africa must exploit its bio-fuel resources fully and effectively to defeat poverty and achieve the Millennium Development Goals (MDGs), a team of experts underscored at a regional forum on Tuesday. "Promotion of biofuels industry in developing countries has the capacity to propel such countries to achieve the MDGs through poverty reduction (especially job creation and economic enhancement), health impact and climate change," the team said in a report presented at a reginal forum of experts in the field of bio-fuel that kicked off at the AU confernce Hall. The forum is deliberating on the effective and enhanced utilization of biofuel to tackle poverty. The experts drawn from various African Universities indicated that Africa presents significantly higher biofuel potentials than Europe and even North America and can aid farmers in the continent to earn better income for their produce due to the expanded market of bio-fuel. According to the report,the majority of African countries that are oil importers can avoid their expenses on oil by utilizing their biofuel resources. Bio-fuels can reduce dependence on imported fossil fuels and increase energy security. There is a growing realization in the Africa that high dependency on imported fossil fuels is having a negative impact on the continent's economic development, the report said. According to available information, out of 47 of the world's poorest countries, 38 are net oil importers and the majority of them are from Africa. A total of 42 countries in Africa are net oil importers vulnerable to the adverse macro-economic (particularly balance of payments) of high oil prices. This is particularly true as economies of countries in Sub-Saharan Africa are oil-dependent, according to the report. Estimates show that recent changes in the price of oil caused, in some cases, losses as high as 3 % of GDP. According to the same report, bio-fuels use in Africa is expected to remain as very limited as it is now, reaching to 3.4 Mtoe by 2030. The report further recommended future policies of Africa to be designed to meet not only the domestic needs but also the growing international biofuels market. "The AU should be the coordinating body in implementing a common policy for biofuels in Afarica,"the report added. FAO estimates that there are 379 million hectares of potential arable land available, of which only 43 million are utilized for food production in the countries forming the 'Pan-African association of Non-Oil Producing Countries' alone and varied nature of the feedstock's available in Africa to produce biofuels.

Libya looms as key French trading partner

25th July 2007 www.turkishpress.com

With its vast oil and gas potential, Libya could become a key trading partner for France, analysts said Tuesday, after French efforts contributed to the release of five Bulgarian nurses held in Libya since 1999 on charges of having infected children with AIDS. President Nicolas Sarkozy made no secret of his ambitions during a news conference, hours after the five Bulgarian nurses -- and one Palestinian doctor -- were flown home to be reunited with their families and were pardoned by Bulgarian President Georgy Parvanov. "Obviously I hope that we will sign cooperation accords with Libya," Sarkozy said. "I do not see why France would be the only country not to sign this kind of accord," he said. France is today the sixth supplier for Libya, which has a population of six million people. But Paris remains a modest commercial partner, with Libya accounting for just 0.1 percent of French exports and 0.45 percent of imports. French imports from Libya in 2006 came to 1.9 billion euros (2.6 billion dollars), an increase of 19.4 percent year-on-year and almost entirely made up of oil products, while exports to Libya reached 433.6 million euros, up 43 percent). Imports from the European Union as a whole came to 25.76 billion euros and exports 3.66 billion. Relations between Libya and the Western powers have warmed dramatically since Libyan leader Moamer Kadhafi renounced terrorism and abandoned efforts to develop weapons of mass destruction in late 2003. That same year Libya also accepted responsibility for the bombing of a US Pan Am jet over Lockerbie, Scotland in 1988 that killed 270 people, and agreed to pay compensation to the families of victims. And in January 2004, Libya took another step toward mending relations with the West by signing a deal in Paris offering compensation for the bombing of a French airliner over the Sahara in 1989. In 2003 Kadhafi also turned the page on socialism, launching a programme to privatise 375 publically-owned companies, notably in the strategic energy sector. "In a context where Europe's energy dependence on Russia is a subject of concern, suppliers like Algeria and Libya become important," a banker specialised in north Africa told AFP. For Libya, Africa's third biggest producer of oil, is sitting on large untapped gas and mining resources, which have attracted the attentions of Western companies. A number of major oil companies that left the country during a decade-long embargo against Libya have returned, notably Britain's BP, which at the end of May signed a 900-million-dollar gas exploration accord with Tripoli. In early July Tripoli also launched a tender process for the exploration of 41 gas blocks, in which French oil giant Total, which has never left Libya, intends to take part. France in addition has ambitions in the nuclear sector, having in March 2006 signed an accord on civil nuclear research with Tripoli, paving the way to participation by French companies. French nuclear company Areva told AFP it had been approached with a view to building nuclear plants, but added that talks, which started last year, were at a preliminary stage. The French heavy engineering group Alstom, which makes high-speed trains and energy turbines, said meanwhile that any warming in Franco-Liyban ties would likely constitute a positive signal for its commercial development. "Libya has needs in the both the rail and energy sectors and any improvement in Franco-Libyan relations could be a positive signal for a new commercial venture for Alstom," an Alstom spokesman told AFP. In the banking sector French group BNP Paribas won a tender for the privatisation of 19 percent of the capital of the Sahara Bank at a cost of 145 million euros. And French aerospace group Dassault Aviation has a contract to modernise 12 Libyan Mirage F1 fighter jets. Libya has also shown its interest in the Rafale, the Dassault fighter that has not yet been sold outside France. But no concrete talks have been held to date, French sources said. Many other Libyan sectors have also been opened to privatisation, including agriculture, chemicals, metallurgy and telecommunications.

North Africa: World Bank Moves Into the Middle East

18th July 2007 Emad Mekay www.allafrica.com

The Middle East and North Africa region has become the fastest-growing area for investments from the World Bank's private sector arm, the International Finance Corporation (IFC), which surpassed one billion dollars for the first time last year, according to the Bank Information Centre, a Washington-based research group on international public lenders. The study, among the few examining the role of multilateral financial institutions in a region that has traditionally drawn attention for its political volatility, says that the IFC recorded 1.2 billion dollars in investments in the so-called MENA region last year -- its highest ever volume of new commitments and nearly double its 2005 investments. "In part, IFC's increased investment in MENA reflects global financing trends. The flood of petrodollars in the MENA region in recent years has spurred new investments and fueled a growing need for local banks, to soak-up and recycle the excess liquidity in the region," said Nikki Reisch and Amy Ekdawi of the Bank Information Centre, in an email exchange with IPS. Most of this money is going to open the region for financial markets services and insurance as well as traditional sectors such as oil, gas and infrastructure projects. More than 200 million dollars were approved for new insurance and financial services projects last year alone. IFC's investments often signify a greater international private flow of funds since the IFC works to facilitate private sector involvement in the region. It does so by advising governments on the implementation of investor-friendly economic changes, including the privatisation of state-owned banks and public utilities such as water and power. Its portfolio has also grown over the last three years, with investments of nearly 150 million dollars -- almost 17 percent of its regional portfolio -- in oil and gas companies, mostly in North Africa. In contrast, during 2002 and 2003, the IFC did not invest in any extractive industry projects the region. Egypt, the most populous Arab country, received most of the loans (283 million dollars) over the past five years, followed by Oman, Algeria and Iraq. The report's authors say that the IFC is also taking advantage of new investment opportunities created by accelerated trade liberalisation and privatisation reforms in the region, which are often tied to the World Bank and International Monetary Fund (IMF) programmes. "For example, the privatisation of various state-owned enterprises and services, particularly in the banking, electricity and telecommunications sectors, has presented IFC with various advisory assignments and investment projects," Reisch and Ekdawi told IPS. The MENA region is generally defined as most Arabic-speaking countries as well as Israel and Iran. "While the MENA region has always received only a small proportion of total IFI lending worldwide, its share of global public finance has grown considerably in recent years, in both relative and absolute terms," said the report. It says that the World Bank, the largest multilateral financial institution, alone increased its lending to the region threefold in the last five years. The region's share of World Bank financing rose from less than three percent of total new approvals in the 2002 fiscal year to over seven percent in 2006. Of all loans from multilateral financial institutions, including the African Development Bank, nearly a quarter again went to Egypt, which has implemented a rigorous World Bank-sponsored liberalisation programme. Lending to Iraq is also forecast to grow in coming years. The World Bank has approved emergency loans worth around 400 million dollars to the country through its Iraq Trust Fund, while the IFC has committed over 100 million dollars in private sector operations. The study notes that in 2001, the World Bank provided 507 million dollars to MENA -- only 2.9 percent of the total Bank lending that year. But in 2006, it gave out 1.7 billion dollars, more than half which went for finance and energy projects after several years of relatively minimal allocations to these sectors. Lending projects in the water and sanitation, health and agricultural sectors dropped off almost entirely, it says. Of the 83 projects approved in last year, 44 were project loans and 39 were for technical assistance. In the last five years, Egypt has borrowed more from the World Bank than any other country, receiving over 1.2 billion dollars, followed closely by Iran, which has received 1.1 billion dollars from the Bank over the same period. At of the end of 2006, Morocco, Egypt, Algeria and Tunisia -- all in North Africa -- were the largest cumulative borrowers in the region. The study found that the Bank went into the region with the same ideology it imposes elsewhere in developing nations. It says its focus has been on instituting "comprehensive structural reform" to facilitate greater liberalisation measures such as the elimination of trade barriers to open up the region to increased private investment and economic integration. The authors of the report cite many of the Bank's own studies, which have revealed that income inequality in MENA is on the rise, despite increased economic growth and investment. "The jury is still out about the significance of increased IFI investment in MENA for the region's people. The impacts of the influx of public financing on poverty, inequality, unemployment and the environment in MENA remain to be seen," the authors of the report said. "Investment is not an unambiguous good, as it is often portrayed to be, nor is investment itself tantamount to development".

Alcan, Cygam, Onex, Osprey, Progress: Canadian Equity Preview

18th July 2007 John Kipphoff www.bloomberg.com

The following is a list of companies whose shares may have unusual price changes in Canadian markets today. This preview includes news that broke after markets closed yesterday. Stock symbols are in parentheses after company names and prices are from the last close. The Standard and Poor's/TSX Composite Index gained 19.02, or 0.1 percent, to 14,079.41 in Toronto. The benchmark has gained 1.2 percent since June 29 may have the first weekly advance in three. Alcan Inc. (AL CN): Rio Tinto Group hired Credit Suisse Group and Deutsche Bank AG to explore opportunities in the mining sector, including a possible bid for Alcan, the Daily Telegraph said, citing people it didn't identify. Rio may have held talks with Alcan's management on a counter offer for the aluminum producer, which has rejected a $27.7 billion hostile bid from rival Alcoa Inc., the London-based newspaper said on its Web site, without citing anybody. Rio doesn't comment on rumor and speculation, said Ian Head, a Melbourne-based spokesman. Deutsche Bank won't comment, said Cathy Knezevic, a spokeswoman, from Sydney. Elizabeth Rudall, a Melbourne-based spokeswoman for Credit Suisse, couldn't immediately comment. Alcan shares gained C$1.01, or 1.1 percent, to C$89.82. Cygam Energy Inc. (CYG CN): The oil and natural-gas producer that searches for crude in Italy and other Mediterranean countries, won an exploration license in Tunisia. Cygam's Italian unit, Rigo Oil Co., signed an agreement today in Tunis with the Tunisian Energy Minister Afif Chelbi, Agence Tunis Afrique Presse said, citing the minister. Cygam added 5 cents, or 5.6 percent, to 95 cents. Osprey Media Income Fund (OSP-U CN): Quebecor Media Inc., a unit of Quebecor Inc. (QBR/B CN), increased its offer to buy Osprey Media to C$8.45 a share. This represents a 17 percent premium over Quebecor's previous C$7.25 bid and tops the C$8.25 competing offer last week by Black Press Ltd. Osprey rose 8 cents, 1 percent, to C$8.26 before trading was halted in Toronto. Quebecor shares fell 37 cents, o r 0.9 percent, to C$39.53. Pizza Pizza Royalty Income Fund (PZA-U CN): The pizza outlet chain said it raised C$23.8 million by selling to a group of brokerages including Canaccord Corp. 2.6 million subscription receipts at C$9.15 apiece. The proceeds will be used to buy the Flying Pizza 73 Inc. restaurants. Pizza Pizza was raised to ``buy'' from ``hold'' by analyst Chris Rankin at Canaccord Adams. Pizza Pizza units fell 15 cents, or 1.5 percent, to C$9.60. Onex Corp. (OCX CN): Canada's biggest buyout firm was raised to ``buy'' from ``neutral'' by UBS AG's Fadi Chamoun. The Toronto- based analyst removed a 20 percent discount to net asset value that he had been applying in valuing Onex, saying in a note that it had changed into a ``management fees company'' from a holding company. Chamoun raised his share-price forecast to C$50 from C$32. The shares fell 38 cents, or 1 percent, to C$37.35. Progress Energy Trust (PGX-U CN): The natural-gas and oil income fund was raised to ``sector outperform'' from ``sector perform'' at CIBC World Markets. The shares declined 21 cents, or 1.7 percent, to C$12.54.

Congo to audit oil sector, first time in 10 years

2nd July 2007 Joe Bavier www.africa.reuters.com

KINSHASA (Reuters) - Democratic Republic of Congo plans an audit of its oil sector to ensure the state is receiving a fair share of revenues, the first such review in at least a decade, the oil minister said on Monday. Lambert Mende, head of the newly-created oil ministry, said the review would look mainly at whether there should be a renegotiation of the money the country's sole production partner, Perenco, deducts from profits it shares with the government to cover production costs. Officials of Perenco, a UK-based independent exploration and production company, were not immediately available to comment. "The charges reduce the profit from oil of which the government receives a part ... If the charges are exaggerated, that cuts into the resources available to the state," he told Reuters in an interview in Kinshasa. Mende said Congo was negotiating with several independent auditing firms to evaluate both the declared charges and declared production figures. He said he hoped the process would begin in the coming months. Democratic Republic of Congo produces just 25,000 barrels per day, down from 30,000 barrels a few years ago. "We don't see much investment. And that worries us because it's because of insufficient investment that production is dropping," Mende said. "And at the same time, they are declaring investment charges. So we'd like to see things a bit more clearly." Congo's ministry of mines launched a similar review of existing mining concessions and partnership agreements last month, aimed at ensuring they are legal and fair. The World Bank and government officials also believe the majority of Congo's current 156 logging titles could be cancelled during an evaluation set for later this year. Many of the vast central African country's mining and natural resource deals were negotiated during a 1998-2003 civil war or during the three-year transitional period that followed. A new government installed after President Joseph Kabila won the cash-strapped country's first free democratic elections in four decades last year has been reviewing the deals to ensure they are in the country's best interests. "MAJOR POTENTIAL" During more than three decades of rule, Congo's former dictator Mobutu Sese Seko promoted then pillaged the country's vast mineral wealth but largely ignored the oil and gas sector. The oil ministry was created in February with the formation of the new government. Mende said he expects the sector will benefit from the same post-election boost in investor confidence that has led to a boom in industrial mining projects. "This is an oil country, not because of our current small production, but because there is major potential," he said. Congo is currently negotiating with neighbouring Angola to settle a dispute over maritime borders that could open up new, potentially lucrative offshore oil fields. Additional onshore reserves remain untapped and largely unexplored in Equateur province in the north as well as under Lake Albert and Lake Tanganyika along the eastern border. "Quite modestly, we expect nothing less than three billion barrels of reserves, and it's certainly more than that," Mende said.

British Gas to invest 1.25 billion dollars in Tunisia

21st June 2007 www.petroleumworld.com

The head of British Gas said Wednesday the company was going to invest some 1.25 billion dollars (1 billion euros) in two gas de posits in Tunisia. About half a billion would be used to develop the Miskar field and around 1.2 billion would be slated for the mining of the new Hasdrubal field, in partnership with Tunisia's state-owned oil company ETAP, according to the ETAP website. Construction at the new gas deposit has begun, both on- and off-shore, and production is set to start in 2009, Wilson said in a statement on the ETAP site. British Gas will become the leading producer of gas and liquid petroleum (GPL) in Tunisia, Wilson added.

Shell to form joint venture for investment abroad

12th June 2007 www.gulf-times.com

Qatar Petroleum International (QPI), the overseas investment arm of QP, will soon form a joint venture with Shell to invest in energy-related ventures outside Qatar. Speaking to Gulf Times here yesterday, HE the Second Deputy Premier and Minister of Energy and Industry, Abdullah bin Hamad al-Attiyah said QPI's remit would cover upstream oil and gas exploration to building refineries and petrochemical plants. We don't identify locations using a map. We go wherever there are opportunities. We are looking at various countries, al-Attiyah said. He said QP's partnership with Shell was significant because the latter had made huge investments in Qatar. It has invested billions of dollars on Pearl GTL, Qatar's second and the world's largest fully integrated gas-to-liquids plant. Shell has also invested in Qatargas 4. Shell has one of its largest investments now in Qatar,the Deputy Premier said. He said besides Shell, QPI had teamed up with Occidental Petroleum to set up an oil refinery in Panama. The $7bn oil refinery in the South American country would have a daily production capacity of 350,000barrels. QPI is also planning to set up an oil refinery in Tunisia following a feasibility study, he said. We are now the frontrunners for the refinery project at Tunisia,the Deputy Premier said. Al-Attiyah said QPI also planned to team up with other major international energy companies as it looked around for investment opportunities in various countries. We will announce them in due course,he said. QP has already made multi-billion-dollar investments abroad, teaming up with ExxonMobil and ConocoPhillips on the Golden Pass LNG terminal in the US and with ExxonMobil and Total on the South Hook Terminal near Wales in the United Kingdom. Both the terminals will be receiving gas from RasGas and Qatargas.

Fal Oil signs landmark USD 102 million loan

5th June 2007 www.ameinfo.com

The 15-year tem loan facility covers 80% of the cost of the two tankers and will provide Fal Oil with 3-years pre-delivery and 12-years post-delivery financing. Facility will benefit from a 95% comprehensive insurance from the Korean Export Insurance Corporation (KEIC). This is the first vessel financing insured by KEIC in UAE. It is also the first Export Credit Agency supported financing done by Fal Oil. The USD 102 million facility by Citi comes at the heels of a 6-year 39 million term loan facility arranged by the bank for Fal Oil in April towards the financing of two tankers. Mohammed Al-Shroogi, Citi's Managing Director for the Middle East and Chief Executive Officer for Citi in the UAE, said: 'Fal Oil is on an expansion path, and we would like to be part of its success. We are delighted to support its fleet acquisitions and look forward to arranging future facilities on its behalf.' 'This is FAL Oil's second facility arranged by Citi. Both facilities together, including this KEIC guaranteed financing, underscore FAL Oil's excellent credit standing and business feasibility,' said Mr. Majid Abdulla Al Sari, Director, FAL Oil Company Limited. 'Facility will go towards expanding our fleet in line with our growth plans.' FAL Oil specializes in bulk oil trade and in the purchase and sale of gas and fuel oils. Its product base comprises mainly of fuel oil, gas oil, naphtha, jet kerosene and other related petroleum products. It has a large fleet of owned vessels in addition to chartered vessels. Citi has been in the Arab World for nearly 50 years and continues to view the region as critical to its global franchise. It is currently present in ten Arab countries including Egypt, UAE, Lebanon, Jordan, Tunisia, Morocco, Algeria, Bahrain, Qatar and Kuwait. It also serves clients in non-presence countries, such as Yemen and Oman through Bahrain.

Tunisia awards Qatar Petroleum $2.0 bln oil plant

29th May 2007 www.khaleejtimes.com

Tunisia's Energy Ministry granted the state-owned Qatar Petroleum company a $2.0 billion refinery deal, ministry and company officials said on Saturday. We are happy today to sign the agreement with Tunisia to construct a refinery whose capacity is about 150,000 barrels per day, Abdullah Hamad Attiyah, Qatar's vice prime minister and minister of Industry, said at the deal signing ceremony in Tunis. The Qatari company, in partnership with Britain's Petrofac PFC.L, was selected by the Tunisian ministry to build, own, manage and run the refinery for at least 30 years.

Syria and Tunisia to Enhance Cooperation

9th May 2007 www.sana.org

Minister of Petroleum and Mineral Resources Sufian al-Alaw discussed Thursday with Tunisian Minister of Industry and Energy Afef Chalabi cooperation between the two countries in the oil field. Mr. Alaw expressed hope to develop bilateral relations through exchanging expertise in the field of refining oil and marketing petroleum products in addition to utilize the Tunisian experience in exploring oil.

For his part, The Tunisian Minister expressed his country's desire to cooperate with Syria and offer expertise in all domains.

Both sides agreed to activate work to establish joint projects in the interest of both countries. Earlier, Minister of Industry Fouad Issa al-Juni conferred with Mr. Chalabi on prospects of cooperation in industry.

Dr. al-Juni described the Syrian- Tunisian relations as deep, indicating to the significance of exchanging expertise in the field of rehabilitation, training and industrial development. The Tunisian Minister expressed his country's readiness to cooperate with the Syrian ministry of industry in all domains, referring to the importance of establishing joint textile factories and fertilizers in Syria.

Tunisia: Oil and Gas

3rd May 2007 www.mbendi.co.za

Unlike its prolific oil producing neighbour, Algeria, Tunisia's upstream oil industry is modest. Tunisia had proven reserves of oil of 308 million barrels and a production rate of 81,000 bpd of oil and 1,000 bpd of condensate in 2000.

Intensive exploration has been carried out in Tunisia since the discovery of oil in neighbouring Algeria and in May 1964, Tunisia's first oil field, El Borma, was discovered in the southern region near its frontier with Algeria. Areas of hydrocarbon importance include the Gulf of Gabes and the Ghadames Basin in the southern part of the country. In addition, exploration onshore in central Tunisia has revealed potential oil and gas fields. These discoveries were made in the Paleozoic Ghadames basin and along the north and east end of the Central Tunisian Cretaceous carbonate platform. The size of the oil and gas reserves has yet to be reliably determined although the US Department of Energy quotes Tunisia as having over 300 million barrels in proven oil reserves with the estimated recoverable reserves being even higher than that.

Tunisia's main oil producing fields are El Borma, Ashtart and Sidi el Kilani while the principal gas fields are the El Borma field where associated gas is produced, and the offshore Miskar field. Tunisia produces heavy crude types, its best known being El Borma and Ashtart. Twenty-eight Tunisian and foreign companies are currently engaged in hydrocarbon operations. Foreign companies include Agip, Anadarko, EHT, British Gas, Centurion Oil, CMS Oil and Gas, Samedan Oil, Marathon Oil, Kuwait Foreign Petroleum Exploration Company (Kufpec), Total, Fina, Neste Oy, Nuevo Energy, Oranje Nassau, Union Texas Petroleum, Petro-Canada, Phillips Petroleum, Pluspetrol, EGEP and Walter Enserch. Tunisia has instituted strong economic policies which include trade agreements with the European Union and free-trade zone agreements with Libya and Morocco. Sound fiscal policies have resulted in Tunisia being listed as one of the African country with the soundest growth prospects. The new Hydrocarbons Code became effective on 20 February 2000 and applies to all future exploration and production contracts. The Law introduces some new incentives as Tunisia aims to further develop oil exports.

The Ministry of Industry regulates the oil industry in Tunisia. The state owned petroleum company is L'Enterprise Tunisienne d'Activites Petrolieres (ETAP) while the Societe Nationale de Distribution du Petrole (SNDP) is the national distribution and marketing company.

Tunisia: Oil and Gas

3rd May 2007 www.mbendi.co.za

Unlike its prolific oil producing neighbour, Algeria, Tunisia's upstream oil industry is modest. Tunisia had proven reserves of oil of 308 million barrels and a production rate of 81,000 bpd of oil and 1,000 bpd of condensate in 2000.

Intensive exploration has been carried out in Tunisia since the discovery of oil in neighbouring Algeria and in May 1964, Tunisia's first oil field, El Borma, was discovered in the southern region near its frontier with Algeria. Areas of hydrocarbon importance include the Gulf of Gabes and the Ghadames Basin in the southern part of the country. In addition, exploration onshore in central Tunisia has revealed potential oil and gas fields. These discoveries were made in the Paleozoic Ghadames basin and along the north and east end of the Central Tunisian Cretaceous carbonate platform. The size of the oil and gas reserves has yet to be reliably determined although the US Department of Energy quotes Tunisia as having over 300 million barrels in proven oil reserves with the estimated recoverable reserves being even higher than that.

Tunisia's main oil producing fields are El Borma, Ashtart and Sidi el Kilani while the principal gas fields are the El Borma field where associated gas is produced, and the offshore Miskar field. Tunisia produces heavy crude types, its best known being El Borma and Ashtart. Twenty-eight Tunisian and foreign companies are currently engaged in hydrocarbon operations. Foreign companies include Agip, Anadarko, EHT, British Gas, Centurion Oil, CMS Oil and Gas, Samedan Oil, Marathon Oil, Kuwait Foreign Petroleum Exploration Company (Kufpec), Total, Fina, Neste Oy, Nuevo Energy, Oranje Nassau, Union Texas Petroleum, Petro-Canada, Phillips Petroleum, Pluspetrol, EGEP and Walter Enserch. Tunisia has instituted strong economic policies which include trade agreements with the European Union and free-trade zone agreements with Libya and Morocco. Sound fiscal policies have resulted in Tunisia being listed as one of the African country with the soundest growth prospects. The new Hydrocarbons Code became effective on 20 February 2000 and applies to all future exploration and production contracts. The Law introduces some new incentives as Tunisia aims to further develop oil exports.

The Ministry of Industry regulates the oil industry in Tunisia. The state owned petroleum company is L'Enterprise Tunisienne d'Activites Petrolieres (ETAP) while the Societe Nationale de Distribution du Petrole (SNDP) is the national distribution and marketing company.