CMS Energy - Your Business in Africa

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We recently held our "Your Business in Africa" seminar at our London office.

The presenters spoke of their experiences of the trend for increasing investment in the energy sector in Africa, the challenges faced by the sector currently, and challenges for the future, and also about where they saw Africa placed in 10 years time, against other oil & gas provinces.

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CMS Energy - Your Business in Africa

  1. 1. Africa: the Investment Case for Oil & Gas Presenter: James Spinney, Director of Corporate Finance
  2. 2. Introduction to Strand Hanson Independent, entirely management owned corporate finance advisory firm Traditional merchant banking model allows investment to be made from our own balance sheet Award winning M&A adviser, having been involved in transactions with an aggregate value of £6.0 billion in recent years Leading nominated adviser on the AIM Market in the fields of oil & gas and metals & mining and also the market leader in advising African businesses Regulated to act as: Sponsor to the Official List; Nominated adviser to the AIM Market; Takeover panel approved adviser; and Corporate adviser to the ISDX Growth Market Cross-border specialists with an office in South Africa and a global network of advisers and consultants
  3. 3. Overview of Strand Hanson Africa ¾ Regional office established, in November 2008, in Cape Town, South Africa ƒ ƒ ¾ Under the leadership of a senior Strand Hanson Director Team now comprises both South African and UK nationals Enables Strand Hanson to: ƒ ƒ Expedite due diligence processes on African assets ƒ Source both transaction opportunities for listed clients (particularly in the Oil & Gas, Mining and Natural Resource sectors) and alternate pools of capital for both listed and private clients ƒ Develop key relationships with local market participants ƒ Advise on cross-border transactions both intra-Africa and between Africa and other regions, particularly Asia ƒ Identify early stage investing opportunities for direct investment by Strand Hanson’s merchant banking operations ƒ ¾ Service clients with assets across Africa through direct communication with, and ready access to, key executives Gain exposure to fast-growing African economies South Africa office is now a key hub for Strand Hanson’s full range of services
  4. 4. Advantages of doing business in Africa Common languages Similar timezones Shared legal principles Vast natural resources Changing governmental attitudes to external investment The need for sophisticated financial and technical expertise Making indigenisation work
  5. 5. Challenges to doing business in Africa Disputes over title Lack of formalised agreements Retrospective application of new laws Lack of political accountability Less developed regulatory frameworks Indigenisation Poor infrastructure
  6. 6. Oil and Gas in Africa – AIM Listed Companies AIM oil and gas companies by market capitalisation, total: c. £1bn OTHER £97m SIRIUS PETROLEUM £28m TOWER RESOURCES £34m BOWLEVEN £167m WENTWORTH RESOURCES £37m CHARIOT OIL & GAS £39m ELAND OIL & GAS £150m MADAGASCAR OIL £54m STERLING ENERGY £75m FALCON OIL & GAS £102m LEKOIL £92m Source: London Stock Exchange TRINITY EXPLORATION & PRODUCTION £96m
  7. 7. Oil and Gas in Africa - Production & Reserves Production Reserves 14,000 6,000 4% 4,000 2% 2,000 0 0% 1980 1985 1990 1995 2000 2005 2010 2015 Production - mboe/d Source: BP World Energy Review 2013 % of global production Reserves 6% 8,000 % of global production 8% 10,000 10% 200 10% 12,000 Production 250 8% 150 6% 100 4% 50 2% 0 0% 1980 1985 1990 1995 2000 2005 2010 2015 Reserves - bnboe % of global reserves % of global reserves 12% 16,000
  8. 8. studies: Case studies Lekoil Limited Deal type: AIM IPO of Lekoil Limited (“Lekoil” or the “Company”), co-terminous with the completion of a significant acquisition Deal size: Total fundraise of US$50 million resulting in a market capitalisation of approximately US$110 million on admission to AIM In early 2013, Strand Hanson was engaged by Lekoil, the oil & gas company established to acquire assets in subSaharan Africa and in particular Nigeria, to advise on the acquisition of an ultimate 30 per cent. economic interest in OPL310, offshore Nigeria from Afren PLC and simultaneous admission to trading on AIM. OPL310 is an early stage Nigerian oil & gas asset, located in the Dahomey-Benin Basin, with significant potential. Admission to trading on AIM occurred in mid-May 2013. Strand Hanson acted as nominated and financial adviser to Lekoil and worked alongside Mirabaud Securities LLP and Revere Securities Corp., the company’s Broker and US placing Agent, to co-ordinate the largest H1 2013 AIM IPO, overcoming the challenges faced by a multi-jurisdictional transaction and significantly raising the profile of AIM in one of Africa’s rapidly growing and resource rich economies. Following the announcement of positive drilling results on OPL310, and the intention to acquire a 6.502 per cent. participating interest in the adjacent block OML113, Lekoil successfully raised a further US$20 million in July 2013 to progress its drilling programme. Despite the complex jurisdictional issues, the listing was completed on an accelerated basis in order to secure the acquisition prior to the commencement of drilling on OPL310.
  9. 9. studies Case studies: Sirius Petroleum PLC Deal type: Introduction to Sirius Petroleum PLC (“Sirius” or the “Company”) of a prepayment facility and exclusivity off-take agreement with Glencore Energy (UK) Limited (“Glencore”) Deal size: $65 million Sirius has an interest in a previously producing OPL, shallow off-shore Nigeria, in addition to options to acquire interests in two further OMLs. The Company planned to undertake work to recommence production of its existing asset and exercise the options that it has. In May 2013, Sirius entered into an agreement to funding from Glencore, such that it could achieve its short term objectives and further, to guarantee a market for the oil it produces in the future.
  10. 10. Strand Hanson: African experience Strand Hanson has extensive experience in Africa, with clients and Investments across the continent, as set out below: Investments Experience Tunisia Algeria Egypt Mali Chad Mauritania Mauritania Ethiopia Ethiopia Liberia Ghana Ghana Nigeria Tanzania Cameroon Benin Nigeria Tanzania Cameroon Zambia Zambia Gabon Madagascar Namibia Madagascar Namibia Mozambique Botswana Mozambique Botswana South Africa Zimbabwe South Africa
  11. 11. Strand Hanson Limited is authorised and regulated by the Financial Conduct Authority. Strand Hanson Limited Registered in England. Company no. 2780169 Registered office 26 Mount Row, London, W1K 3SQ Strand Hanson Limited 26 Mount Row London W1K 3SQ Tel: 020 7409 3494 Fax: 020 7409 1761 Mail: mail@strandhanson.co.uk
  12. 12. dŚĞ ŶĞƌŐLJ Θ EĂƚƵƌĂů ZĞƐŽƵƌĐĞƐ ^ĞĐƚŽƌ ŝŶ ĨƌŝĐĂ džĂŵŝŶŝŶŐ Kŝů Θ 'ĂƐ ĂŶĚ ŶĞƌŐLJ /ŶǀĞƐƚŵĞŶƚƐ ŵLJŶ DƵƐƐĂ͕ ^ĞŶŝŽƌ WĂƌƚŶĞƌ ŶũĂƌǁĂůůĂ Θ ŚĂŶŶĂ ϯ KĐƚŽďĞƌ ϮϬϭϯ
  13. 13. Kŝů Θ 'ĂƐ /ŶƚƌŽĚƵĐƚŝŽŶ ͻ ^ŝŐŶŝĨŝĐĂŶƚ KƉƉŽƌƚƵŶŝƚŝĞƐ ŝŶ ĞŶLJĂ ĨŽƌ W ĐŽŵƉĂŶŝĞƐ͗ Ž ϰϲ ŽĨ ϰϴ ĞdžŝƐƚŝŶŐ ďůŽĐŬƐ ĂůƌĞĂĚLJ ůŝĐĞŶƐĞĚ ͻ dǁŽ ƌĞŵĂŝŶŝŶŐ ŽĨĨƐŚŽƌĞ ďůŽĐŬƐ ĂƌĞ ƵůƚƌĂ ĚĞĞƉǁĂƚĞƌ ;ǁĂƚĞƌ ĚĞƉƚŚƐ ĨƌŽŵ Ϯ͘ϱ ʹ ϰ͘ϱ ŬŵͿ ͻ DK ŚĂƐ ŝŶĚŝĐĂƚĞĚ ƚŚĂƚ ŶŽ ĨƌĞƐŚ ďůŽĐŬƐ ǁŝůů ďĞ ĐƌĞĂƚĞĚ ŽŶ ŶĞǁ ĂĐƌĞĂŐĞ Ž dƵůůŽǁ ŝƐ ĐƵƌƌĞŶƚůLJ ĚƌŝůůŝŶŐ ǁĞůůƐ ŝŶ EŽƌƚŚĞƌŶ ĞŶLJĂ ;dƵƌŬĂŶĂ ĂƌĞĂͿ ͻ ĞĐůĂƌĞĚ ĐŽŵŵĞƌĐŝĂů ǀŝĂďŝůŝƚLJ ŝŶ ŽŶĞ ďůŽĐŬ Ž ƉĂĐŚĞ Θ ŶĂĚĂƌŬŽ ͻ ƌŝůůŝŶŐ ǁĞůůƐ ŽĨĨƐŚŽƌĞ ;ŵŝdžĞĚ ƌĞƐƵůƚƐ ƚŽ ĚĂƚĞͿ
  14. 14. Kŝů Θ 'ĂƐ ZĞĐĞŶƚ ĞǀĞůŽƉŵĞŶƚƐ ͻ hƐĞ ŝƚ Žƌ ůŽƐĞ ŝƚ Ž DŝŶŝƐƚƌLJ ŽĨ ŶĞƌŐLJ ;DŽͿ ĂŐŐƌĞƐƐŝǀĞůLJ ƌĞǀŝĞǁŝŶŐ ĞdžŝƐƚŝŶŐ W^Ɛ ͻ ǀĂůƵĂƚŝŶŐ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƌĞŐĂƌĚ ƚŽ ǁŽƌŬ Θ ĞdžƉĞŶĚŝƚƵƌĞ ĐŽŵŵŝƚŵĞŶƚƐ ͻ džƚĞŶƐŝŽŶƐ ŽĨ ƚŝŵĞ ƚŽ W^Ɛ ŽŶůLJ ŐƌĂŶƚĞĚ ŝŶ ĞdžĐĞƉƚŝŽŶĂů ĐŝƌĐƵŵƐƚĂŶĐĞƐ ͻ ,ĞĂǀLJ ĨŝŶĂŶĐŝĂů ƉĞŶĂůƚŝĞƐ ĂƌĞ ďĞŝŶŐ ůĞǀŝĞĚ ĨŽƌ ĚĞůĂLJƐ Ž EŽŶͲƉĞƌĨŽƌŵŝŶŐ W^Ɛ ǁŝůů ďĞ ƚĞƌŵŝŶĂƚĞĚ Žƌ ĐŽŶƚƌĂĐƚĞĚ ĂƌĞĂƐ ǁŝůů ďĞ ƌĞĚƵĐĞĚ Ž hŶĚĞƌ ƚŚĞ ƚĞƌŵƐ ŽĨ ƚŚĞ W^͕ ƐŝŐŶŝĨŝĐĂŶƚ ĂƌĞĂƐ ǁŝůů ďĞ ƌĞůŝŶƋƵŝƐŚĞĚ ďLJ ƚŚĞ ĞdžŝƐƚŝŶŐ ŽƉĞƌĂƚŽƌƐ Ž ^ŝŐŶŝĨŝĐĂŶƚ ŽƉƉŽƌƚƵŶŝƚŝĞƐ ĨŽƌ ŶĞǁ ƉůĂLJĞƌƐ Ž DŽ ŚĂƐ ŝŶĚŝĐĂƚĞĚ ƚŚĂƚ ŝƚƐ ƉƌĞĨĞƌĞŶĐĞ ŝƐ ƚŽ ŝƐƐƵĞ ƚŚĞƐĞ ďůŽĐŬƐ ƚŽ ŶĞǁ ƉůĂLJĞƌƐ ǁŝƚŚ ƐŝŐŶŝĨŝĐĂŶƚ ĨŝŶĂŶĐŝĂů ĂŶĚ ƚĞĐŚŶŝĐĂů ĐĂƉĂďŝůŝƚŝĞƐ ͻ EĞǁ ĞŐŝƐůĂƚŝŽŶ Ž ŽŶƐƚŝƚƵƚŝŽŶ͕ ŶĞƌŐLJ ŝůů ĂŶĚ ĚƌĂĨƚ EĂƚŝŽŶĂů ŶĞƌŐLJ WŽůŝĐLJ ;EWͿ Ž EĞǁ ĚƌĂĨƚ ŵŽĚĞů W^ ƚŽ ŐĂƐ ƌĞŐƵůĂƚŝŽŶƐ
  15. 15. ŽŶĐĞƌŶƐ ZĞůĂƚŝŶŐ ƚŽ ƚŚĞ EĞǁ ĞŐŝƐůĂƚŝŽŶ
  16. 16. Kŝů Θ 'ĂƐ ZĞĐĞŶƚ ĞǀĞůŽƉŵĞŶƚƐ ŽŶƚ͙ ͻ ZĞǀĞŶƵĞ ZĂŝƐŝŶŐ ʹ dĂƌŐĞƚŝŶŐ ĂƌŵͲŝŶƐͬĂƌŵͲŽƵƚƐ Ž EĞǁ ƐŽƵƌĐĞ ŽĨ ŝŶĐŽŵĞ ŝƐ ďƌŽƵŐŚƚ ƚŽ ƚĂdž͕ ŶĂŵĞůLJ ĂŶ ͞ĂŵŽƵŶƚ Žƌ ǀĂůƵĞ ŽĨ ƚŚĞ ĐŽŶƐŝĚĞƌĂƚŝŽŶ ĨƌŽŵ ƚŚĞ ƐĂůĞ ŽĨ ƉƌŽƉĞƌƚLJ Žƌ ƐŚĂƌĞƐ ŝŶ ƌĞƐƉĞĐƚ ŽĨ Žŝů ĐŽŵƉĂŶŝĞƐ͕ ŵŝŶŝŶŐ ĐŽŵƉĂŶŝĞƐ Žƌ ŵŝŶĞƌĂů ƉƌŽƐƉĞĐƚŝŶŐ ĐŽŵƉĂŶŝĞƐ͟ ǁŚŝĐŚ ŝŶĐůƵĚĞƐ ͞ƚŚĞ ĂƐƐŝŐŶŵĞŶƚ ŽĨ ƌŝŐŚƚƐ͕ ƐĂůĞ ŽĨ ĐŽŵƉĂŶŝĞƐ ĂŶĚ ďƵƐŝŶĞƐƐĞƐ͕ ĂŶĚ ƚĂŬĞŽǀĞƌƐ Žƌ ĂŶLJ ŽƚŚĞƌ ŶŽŶͲŝŶǀĞŶƚŽƌLJ ĂƐƐĞƚƐ͘͟ ;^ĞĐƚŝŽŶ ϯ;ϮͿ ŽĨ ƚŚĞ /d Ϳ͘ Ž tŝƚŚŚŽůĚŝŶŐ ƚĂdž͗ ͻ ϮϬй ŽĨ ŐƌŽƐƐ ĂŵŽƵŶƚ ŝĨ ŶŽŶͲƌĞƐŝĚĞŶƚ ͻ ϭϬй ŽĨ ŐƌŽƐƐ ĂŵŽƵŶƚ ŝĨ ƌĞƐŝĚĞŶƚ Ž /ƐƐƵĞƐ ͻ ,Žǁ ĚŽĞƐ ĨŽƌĞŝŐŶ ƉĂLJŽƌ ǁŝƚŚŚŽůĚ͍ ͻ dĂdž ƉĂLJĂďůĞ ŽŶ ŐƌŽƐƐ ĂŵŽƵŶƚ ŵĂLJ ĐŽǀĞƌ ƌĞŝŵďƵƌƐĞŵĞŶƚ ŽĨ ƉĂƐƚ ĐŽƐƚƐ͕ ƉĂLJŵĞŶƚ ŽĨ ĞdžŝƐƚŝŶŐ ĚĞďƚ͕ ĐĂƌƌŝĞĚ ŝŶƚĞƌĞƐƚ
  17. 17. KǀĞƌǀŝĞǁ ŽĨ ƵƌƌĞŶƚ ŶĞƌŐLJ ^ĞĐƚŽƌ ŝŶ ĞŶLJĂ ͻ /ŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚLJ ŽĨ ϭ͘ϰϴ 't͗ Ž ϱϳй ŚLJƌĚŽ Ž ϯϮй ƚŚĞƌŵĂů Ž ϭϭй ŐĞŽƚŚĞƌŵĂů ĂŶĚ ĞŵĞƌŐĞŶĐLJ ƚŚĞƌŵĂů ͻ ůĞĐƚƌŝĐŝƚLJ ĚĞŵĂŶĚ Ž ƵƌƌĞŶƚ͗ ϭ͘ϭϵϭ Dt Ž džƉĞĐƚĞĚ ŐƌŽǁƚŚ ͻ Ϯ͘ϱϬϬ Dt ;ϮϬϭϱͿ ͻ ϭϱ͘ϬϬϬ Dt ;ϮϬϯϬͿ
  18. 18. ƵƌƌĞŶƚ WŽǁĞƌ WƌŽũĞĐƚƐ ͻ ϯϬϬ Dt ǁŝŶĚ ĨĂƌŵ ŝŶ dƵƌŬĂŶĂ Ž ĞŝŶŐ ĚĞǀĞůŽƉĞĚ ďLJ ĂŬĞ dƵƌŬĂŶĂ tŝŶĚ WŽǁĞƌ ŝŵŝƚĞĚ ͻ ϴϯ Dt ,K ƉŽǁĞƌ ŐĞŶĞƌĂƚŝŽŶ ĨĂĐŝůŝƚLJ ŝŶ ƚŚŝ ZŝǀĞƌ Ž ĞŝŶŐ ĚĞǀĞůŽƉĞĚ ďLJ dƌŝƵŵƉŚ WŽǁĞƌ 'ĞŶĞƌĂƚŝŶŐ ŽŵƉĂŶLJ ŝŵŝƚĞĚ ͻ ϭϰϬ Dt ŐĞŽƚŚĞƌŵĂů ƉŽǁĞƌĞĚ ĨĂĐŝůŝƚLJ Ž ĞŝŶŐ ĚĞǀĞůŽƉĞĚ ďLJ ĨƌŝĐĂ 'ĞŽƚŚĞƌŵĂů /ŶƚĞƌŶĂƚŝŽŶĂů ;ĞŶLJĂͿ ŝŵŝƚĞĚ ͻ ϴϬ Dt ǁŽƌƚŚ ŽĨ ŵŝŶŝ ŚLJĚƌŽ ƉŽǁĞƌĞĚ ĨĂĐŝůŝƚŝĞƐ Ž ĞŝŶŐ ĚĞǀĞůŽƉĞĚ ďLJ ,LJĚĞů ŶŐŝŶĞĞƌŝŶŐ ĂŶĚ ŽŶƐƚƌƵĐƚŝŽŶ ŽŵƉĂŶLJ ŝŵŝƚĞĚ ͻ dŚƌĞĞ ϯϬ Dt ŐĞŽƚŚĞƌŵĂů ŵŽĚƵůĂƌ ƉŽǁĞƌ ƉůĂŶƚƐ ŝŶ DĞŶĞŐĂŝ Ž ĞŝŶŐ ĚĞǀĞůŽƉĞĚ ďLJ 'ĞŽƚŚĞƌŵĂů ĞǀĞůŽƉŵĞŶƚ ŽŵƉĂŶLJ
  19. 19. ƌĞĚŝƚ ŶŚĂŶĐĞŵĞŶƚ
  20. 20. dŚŝŶŐƐ ƚŽ ŽŶƐŝĚĞƌ tŚĞŶ ^ƚƌƵĐƚƵƌŝŶŐ ĞĂůƐ 3ROLWLFDO 5LVN /DFN RI ,QIUDVWUXFWXUH +LJKHU EDQNDELOLW WKUHVKROG %DQNDEOH 3URMHFW UHGLW (QKDQFHPHQW 5HJXODWRU 5LVNV
  21. 21. Kd^t E hZhE/ d,/KW/ Ez D t/ D hZ/d/h^ DK D/Yh E/'Z/ Zt E ^h E d E E/ h' E  D/ E /ZK/ ŶũĂƌǁĂůůĂ Θ ŚĂŶŶĂ E ,ŽƵƐĞ͕ ůĚĂŵĂ ZĂǀŝŶĞ 'ĂƌĚĞŶƐ͕ tĞƐƚůĂŶĚƐ WK Ždž ϮϬϬͲϬϬϲϬϲ͕ ^Ăƌŝƚ ĞŶƚƌĞ͕ EĂŝƌŽďŝ͕ ĞŶLJĂ ƉŽůůŽ ĞŶƚƌĞ͕ ϮŶĚ ůŽŽƌ͕ tŝŶŐ ͕ ZŝŶŐ ZŽĂĚ WĂƌŬůĂŶĚƐ͕ tĞƐƚůĂŶĚƐ WK Ždž ϮϬϬͲϬϬϲϬϲ͕ ^Ăƌŝƚ ĞŶƚƌĞ͕ EĂŝƌŽďŝ͕ ĞŶLJĂ DKD ^ ŶũĂƌǁĂůůĂ Θ ŚĂŶŶĂ ^ ,ŽƵƐĞ͕ ĞĚĂŶ ŝŵĂƚŚŝ ǀĞŶƵĞ WK Ždž ϴϯϭϱϲ ʹ ϴϬϭϬϬ͕ DŽŵďĂƐĂ͕ ĞŶLJĂ d нϮϱϰ ϰϭ ϮϮϮϱϬϵϬͬϲ нϮϱϰ ϰϭ ϮϮϮϰϵϵϲ ŵďĂΛĂĨƌŝĐĂůĞŐĂůŶĞƚǁŽƌŬ͘ĐŽŵ d нϮϱϰ ;ϬͿ ϮϬ ϯϲϰ ϬϬϬϬ͕ н Ϯϱϰ ;ϬͿ ϳϬϯ ϬϯϮ ϬϬϬ нϮϱϰ ;ϬͿ ϮϬ ϯϲϰ ϬϮϬϭ ŶďŝΛĂĨƌŝĐĂůĞŐĂůŶĞƚ͘ĐŽŵ /HJDO 1RWLFH WKHVH PDWHULDOV DUH IRU WUDLQLQJ SXUSRVHV RQO DQG GR QRW FRQVWLWXWH OHJDO RU RWKHU SURIHVVLRQDO DGYLFH
  22. 22. Angola Mozambique | Energy Market October 2013
  23. 23. Angola • Country Area: 1,246 thousand km2 • Estimated Population (2012) : 20 M • Country Risk: B
  24. 24. Angola 8,4% of ECONOMIC GROWTH IN 2012 ENERGY +23,9% ZĞĂů 'W ŐƌŽǁƚŚ ;йͿ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϰ ϮϬϭϱ 3,4 4,0 8,0 8,3 5,9 5,9
  25. 25. Angola at a glance Main Clients and Suppliers D /E /Ed^ ;ϮϬϭϮͿ й ŽǀĞƌ ƚŚĞ ƚŽƚĂů ,/E D /E ^hWW/Z^ ;ϮϬϭϮͿ ,/E й ŽǀĞƌ ƚŚĞ ƚŽƚĂů ϮϬ͕ϳй ϰϲ͕ϲй h^ 1E/ ,/E ͘d /W ^Khd, Z/ WKZdh' ϭϯ͕ϴй ϭϭ͕ϭй ϲ͕ϵй ϯ͕ϵй ϯ͕Ϯй WKZdh' h^ ^Khd, Z/ Z / Z E ϱ͕ϵй ϱ͕ϵй ϯ͕ϲй ϭϵ͕ϴй ϳ͕ϲй
  26. 26. Angola at a glance Main Products Export % Import % Fuels and mineral oils 97,4 Machines and mechanical equipment 13,6 Ships and Boats 1,4 Ships and Boats 8,3 Precious stones and precious metals 0,8 Machines and electric equipment 7,8 Machines and mechanical instruments 0,1 Cars and Parts 6,3 Iron and Steel 0,1 Iron and Steel Products 6,3
  27. 27. Highlights on Angola ƒ Ambitious reforms - improving governance and modern legal system ƒ Difficult business environment - lack and poor functioning of institutions, including the judiciary ƒ Still an important investment option for companies looking for new challenges and open to participating in the country development plan Key Sectors Agriculture Building Mining Industrial Activity Infrastructure Tourism
  28. 28. Angola – Energy Market - Background − Onshore drilling for oil began in 1915; − First commercial discovery in the Cuanza Basin in 1955; − Angola is now the second biggest oil producer in Sub-Saharan Africa; − The Angolan government, through the public concessionaire (Sonangol), has granted rights to conduct petroleum operations in relation to 33/34 blocks to companies including BP, Chevron, Eni, Exxon, Statoil and Total; − The country’s first LNG plant is already being developed near Soyo; − The downstream sector – refinery and distribution of the products derived from crude oil – remains underdeveloped; − Recent deals entered into in relation to the pre-salt blocks in the Kwanza Basin - hopes that the Angola pre-salt will bring exploration success to match that in Brazil;
  29. 29. Angola – The latest in the Energy Market OIL GAS − Sonangol recently announced that is expected later this year and during the year of 2014, the completion of an onshore licensing round for oil exploration blocks in Kwanza and Lower Congo Basins; − 10 new blocks will be tendered; − Specific legislation for such types of operations has been enacted; − Preferable treatment and great incentives for Angolan companies may be adopted – good opportunity for partnerships with local companies; − 2 million barrels of oil a day by 2015 are expected;
  30. 30. Angola – The latest in the Energy Market RENEWABLE ENERGY − 190 MW of small hydro capacity addition announced by the Angolan Government; − The hydrographic potential of Angola, together with the two Congos, represents more than half of the water resources of the African continent; − 30 million litres of ethanol per year capacity addition announced; − Eaglestone NV (financial services platform and an international private equity business) intends to invest as much as 40% of a planned 100-million Euro renewable energy fund in projects in Angola and Mozambique; − Angola may also develop wind and solar power within the next 5 years;
  31. 31. Mozambique • Country Area: 744,9 thoushand km2 • Estimated Population (2013) : 22,9 M • Country Risk: BB
  32. 32. Mozambique 7,3% of ECONOMIC GROWTH IN 2012 EXTRACTIVE INDUSTRY 35,2% ZĞĂů 'W ŐƌŽǁƚŚ ;йͿ ϮϬϭϬ ϮϬϭϭ ϮϬϭϮ ϮϬϭϯ ϮϬϭϰ ϮϬϭϱ 6,8 7,1 8,0 8,5 8,0 7,5
  33. 33. Mozambique at a glance Main Clients and Suppliers D /E /Ed^ ;ϮϬϭϮͿ й ŽǀĞƌ ƚŚĞ ƚŽƚĂů Ed,Z E^ ^Khd, Z/ hE/d /E'KD ϯϴ͕ϵй ϭϲ͕Ϯй ϱ͕ϱй ,/E ϰ͕ϳй D /E ^hWW/Z^ ;ϮϬϭϭͿ ^Khd, Z/ Ed,Z E^ h ,/E й ŽǀĞƌ ƚŚĞ ƚŽƚĂů ϯϯ͕ϲй ϭϬ͕ϳй ϲ͕ϰй ϱ͕ϵй /Z E D ^z ϰ͕Ϯй ϯ͕ϵй /E/ h^ ϰ͕ϴй ϰ͕ϲй
  34. 34. Mozambique in a glance Main Products Export % Import % Aluminium 45,1 Fuels and mineral oils 23,6 Fuels and mineral oils 16,3 Machinery and mechanical appliances 14,0 Fruit 7,1 Aluminium and aluminium products 11,0 Tobacco 5,0 Cars and Parts 10,2 Other ore 4,9 Cereals 4,9
  35. 35. Highlights on Mozambique ƒ Ambitious reforms – tax, tourism, foreign trades seeking modernisation ƒ Difficult business environment - lack of qualified work force ƒ Still an important investment option for companies looking for new challenges and open to participate in the country development plan Key Sectors Energy and Mining Transports Industry Comunications Financial Tourism
  36. 36. Mozambique – Energy Market - Background − The first gas discoveries were made in the 1960s − Production began in 2004 − In last 10 years there has been an enormous growth of gas production − Often described as the next epicentre for global natural gas − Anadarko’s major gas development with a LNG liquefaction plant
  37. 37. Mozambique – Energy Market Update OIL GAS − Recent discoveries natural gas show that Mozambique could become one of the largest global exporters − Specific LNG legislation is being prepared − First natural gas production contracts executed in 2014. Production in 2018 − One of world’s largest unexploited inland coal fields – projected to be within the world’s top 10 producers by 2015 − Government recently announced the construction of two petroleum terminals in Palma and Tete to guarantee supply to coal and gas projects
  38. 38. Mozambique – The latest in the Energy Market RENEWABLE ENERGY − The first solar panel factory in the country (Beluluane Industrial Park Maputo) will start operating next month, annual production target of 5MW − Mozambique launched first wind power tender in 2012 − Government has been introducing incentives for investments in this sector − Potential for biofuels is still being explored
  39. 39. Angola Mozambique – Energy Market - Top Tips ᆦ W ZdEZ^,/W^ t/d, K h^/E^^^ KZ WKW ᆧ E' 'DEd t/d, K 'KsZEDEd ᆨ t sKW Es/ZKEDEd W E^ ᆩ WZK:d^ t/d, ᆪ /EdE^/s dZ /E/E' K K D EWKtZ Z Kh^ KE K :K Z d/KE
  40. 40. Contacts CMS RPA Rua Sousa Martins, 10 Patrick Dewerbe 1050-218 Lisbon, Portugal Telephone: + 351 21 095 81 00 patrick.dewerbe@cms-rpa.com Fax: + 351 21 095 81 55 www.cms-rpa.com

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