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BAA’s New Office

We would like to take this opportunity to thank you for your continued support over the years.

Please note that we have moved office from the Stables Office Block on Karen road, to the main house at Marula Manor on Marula Lane.

We look forward to welcoming you to our new office!

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Closing of Office for Festive Season

We would like to take this opportunity to thank you all for your continued support throughout 2014.

Please note that the office will remained closed as from Friday 19th December 2014 and will open on Monday 5th January 2015. 

Happy holidays!

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Somalia invites energy companies to explore for oil

The price of oil may have fallen off a cliff recently, but that has not deterred energy giants like Exxon Mobil, Royal Dutch Shell, BP and Chevron from reactivating plans to drill in Somalia.

The Horn of Africa country could be the next focus for the energy industry, as the government claims the nation will be producing oil within six years.

London-based Soma Oil and Gas, which is backed by Russian billionaire Alexander Djaparidze, has completed an onshore and offshore seismic survey and it is encouraged by the results. Details are expected to be published by the end of the year.

Security remains a concern for foreign investors, but Somalia says with the help of troops from the African Union, it is making progress against the Islamist insurgents al-Shabab.

Nevertheless attacks continue in the region, with ones in the capital, Mogadishu, the south-central town of Baidoa and north-eastern Kenya, near the Somali border, in the last week alone.

Soma Oil and Gas chief executive Bob Sheppard, told the BBC the company’s seismic survey covered thousands of kilometres without any security worries.

“We’re able to do that with zero security incidents. What we’ve been able to demonstrate is that you can conduct offshore operations safely and securely,” he said.

A seismic survey involves firing an audio signal underground and analysing the sound waves that bounce back, which can indicate if there are deposits of oil or gas.

Territorial dispute

The government in Mogadishu will reward Soma for carrying out the seismic survey with licences to explore for oil.

“The government have recognised they need to stimulate exploration. They need to stimulate the creation of a hydrocarbon regime because they are in a prospective area,” says Mr Sheppard.

He notes that the region’s geology looks positive. “The analogous area would be the north-west coast of Madagascar, which has oil, because back in Triassic time (205 to 248 million years ago) they were joined. So we think the same hydrocarbon environment may exist,” he said.

“We’re hopeful about oil.”

Another thing that could disrupt development of Somalia’s oil and gas is a territorial dispute with Kenya over the offshore border between the two nations.

Talks between Nairobi and Mogadishu have failed to resolve the dispute and tensions increased after Kenya issued exploration licences to drill in the region.

Somalia has filed a case with the UN’s International Court of Arbitration.

Petroleum and Mineral Resources Minister Daud Mohamed Omar is confident Somalia will win its case.

“We do not believe that it is a disputed area. We believe it’s the property of the Somali nation,” he said.

“As we have hired maritime lawyers, we have hopes that the outcome would be a mutual understanding between the two countries or we will have to wait for the ruling of the court,” he said.

Another complication for the government in Mogadishu lies in the fact that the autonomous regions of Puntland and Somaliland have also issued exploration licences.

‘Hottest opportunity’

East Africa is the new frontier for the world’s energy industry, as reserves of gas are being developed off the coast of Mozambique, Tanzania is exploring offshore and oil has been discovered in Kenya and Uganda.

“East Africa is regarded within the oil and gas industry as having huge untapped potential,” says Steve Robertson, a director with the energy analysis group Douglas Westwood.

“It has been regarded in recent years as one of the hottest opportunities available to both independent and larger international oil companies,” he told the BBC.

Abdulkadir Abiikar Hussein, the director of oil and gas exploration at the Ministry of Petroleum and Mineral Resources in Mogadishu, is confident Somalia can attract the world’s big oil companies to start drilling.

“Comparing to what we have seen in the region. From Mozambique through Tanzania, Kenya, that has proved there are gas resources.” And the bulk of the Indian Ocean is with Somalia so that’s why there is a rush to Somalia these days,” he said.

Mr Hussein also insisted stability is returning to the once war-torn country.

“The Indian Ocean is safe enough these days. There was the problem of piracy and piracy has dwindled. In terms of al-Shabab and other problems, that is a continental problem, but not in the Indian Ocean, so as a priority the Indian Ocean has to be explored first,” he said.

“There is a tremendous improvement in security in Somalia at the moment,” he added.

New port

Companies like Royal Dutch Shell and Exxon Mobil are being encouraged to reactivate dormant contracts to explore for oil and gas. They withdrew from Somalia two decades ago after civil war broke out in 1991.

They may be encouraged by Somalia’s plans to develop the country’s infrastructure.

According to Mr Hussein, “there is an expansion going on to Mogadishu port and initially that will be adequate enough to receive the movements of rigs and things like that into Somalia.

“But there will be another project that will include building a new port to handle the massive equipment imported in by international oil companies,” he added.

Somalia is confident it will be producing oil within a few years, but given the planned development of oil and gas resources elsewhere in the region, notably Uganda and Kenya, the government in Mogadishu would do well to remember an old Somali proverb: “One cannot count on riches.”

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Online search portal connects youths to web-based jobs

Local online jobs search firm, Niko Job has cut a niche by connecting youths to web-based consultancy contracts.

The site links its users, mainly freelancers, to consultancy jobs such as web design, video or audio transcription, translation and writing or editing articles.

It claims to have registered more than 40,000 Kenyans seeking consultancy work mainly from the US.

The average earnings one can make in a month range between Sh10,800 ($120) to Sh270,000 ($3,000) depending on the nature of work undertaken.

Rockefeller Foundation has partnered with an entertainment firm, Homeboyz Foundation to launch the online portal.

The project is part of Rockefeller Foundation’s Digital Jobs Africa initiative targeting one million people in six African countries.

Under the partnership, Homeboyz Foundation has started digital campaigns targeting hundreds of thousands of young people in Kenya.

The campaigns, among other things, showcase testimonials of entrepreneurs who are earning an income from online work and are aimed at inspiring others to also take up such jobs.

Mamadou Biteye, managing director of the Rockefeller Foundation’s Africa Regional Office, said in an interview Tuesday that the initiative is different from what online job listings firms such as BrighterMonday offer in that the kind of jobs are mainly consultancy-based and mostly technical in nature.

“This project is aimed at ensuring that young people on the continent are aware of the opportunity presented by online work and develop the skills to successfully access online jobs for income generation, skills development and increased digital work experience,” Mr Biteye said.

The initiative has been made possible through a collaboration between Rockefeller Foundation and Elance-oDesk, an online firm that links freelancers with companies that have short-term consultancy jobs.

“This work can include any type of skill that can be done via a computer, such as web research, social marketing, programming, writing, translation and design,” Mr Biteye said.

The online work sector has experienced phenomenal growth over the past several years and by one estimate could reach $16 billion by 2020 and by another estimate expand to $46 billion.

Safaricom, Tusker rated top brands in East Africa

Telecommunications giant Safaricom and East African Breweries’ flagship beer Tusker have been rated as East Africa’s most valuable and most admired brands for 2014, respectively. This year’s Brand Africa survey that ranked the 100 most valuable and most admired brands in Africa rated pan-African telecommunication services company MTN as the most valuable as well as the most admired brand in Africa. The company is the only African brand valued at over a billion dollars at $5.4 billion (Sh486 billion) with the survey ranking Safaricom at $357 million (Sh32.13 billion). In terms of African countries brands, South Africa tops the list as the most valuable country in Africa while Nigeria is the most admired country in the continent. Kenya falls way below the ranks in terms of brand value but is in number four on the list of most admired nations in Africa after Nigeria, Ghana and South Africa with Tanzania being number five.

Indigenous brands
Overall, CocaCola was rated as the most admired brand in Africa toppling Nokia from the top slot followed by MTN, Samsung, Nokia, Toyota, Glo, Adidas, Tigo, LG and Nike. In terms of brand value, MTN topped the list followed by Woolworths, Shoprite, DStv, Spar, Castle, Pick N Pay, Safaricom, Tusker and Dangote. “We are humbled and don’t take this for granted, it took a lot of effort,” said MTN Business Managing Director Tom Omariba while receiving the two awards.” The survey showed that non-African brands continue to set the pace in the continent, commanding 77 of the 100 entries in the most admired brands and 99 of the most valuable brands. In terms of most valuable brands which are non-African, Apple tops the list followed by Samsung, Google, Microsoft, Toyota, Coco-Cola, BMW, Volkswagen and Mitsubishi. “As African economies grow and African become wealthier and grow their brand building capacity, the demand for indigenous brands or non-African brands that are built on African insights will prosper,” said Thebe Ikalafeng, the Brand Africa chairman and founder. “It’s an appetising opportunity for Made in Africa brands.”

President Uhuru Kenyatta to open investment forum

Kenya is set to host its first two-day investment conference in Nairobi this week as the State intensifies its efforts to woo foreign investors. About 2,000 potential investors from over 100 countries are expected to attend the event at the Kenyatta International Convention Centre on Wednesday and Thursday. The conference will be a platform from which to showcase Kenya’s investment opportunities and bring international, regional and national investors together to discuss and exchange ideas that will lead to increased private investments in the country. Tourism Cabinet Secretary Phyllis Kandie said the forum seeks to showcase existing investment and business opportunities with a focus on Vision 2030 flagship projects.

“It will provide a forum where, with the 47 counties, regional development authorities, ministry departments and other State agencies can showcase investment and business opportunities to investors from around the world,” Ms Kandie said. The forum will also discuss progress towards creating a conducive investment, business and regulatory environment in Kenya, and provide investors a platform for networking, considering and negotiating joint ventures. President Uhuru Kenyatta will open the event that has been organised by the Kenya Investment Authority in collaboration with the Ministry of Tourism and Kenya National Chamber of Commerce and Industry under the theme ‘Invest in Kenya, the Hub of East and Central Africa.’ Organisers say they forum will provide information for 2,000 potential investors, increased business links, increased uptake of public–private partnership projects and increased awareness of Kenya as a preferred investment destination in Africa.

New frontiers KenInvest chairperson Anne Muchoki, Vimal Shah (Kepsa chairman) and Kiprono Kittony (KNCC chairman) will address investors while Kandie, Industrialisation and Enterprise Cabinet Secretary Adan Mohamed, Attorney General Githu Muigai, Manu Chandaria (CEO Comcraft International) and J Ireland, chief executive officer of General Electric Africa, are listed as panellists. Council of Governors chairman Isaac Ruto will present a paper on counties as new investment frontiers. He will be assisted by Nairobi Governor Evans Kidero, Transition Authority chairman Kinuthia Wamwangi, Equity Bank Chief Operations Officer Julius Kipngetich and Brand Kenya CEO Mary Kimonye.

Chinese-backed group to set up flying school for East Africa

A Chinese government-backed investment firm has announced plans to set up an aviation training centre in Nairobi. Frontiers Services Group (FSG) East Africa says Kenyan private and commercial pilot licence holders have to go abroad for professional training, which is expensive and wasteful. Frontiers Services Group has announced it is in negotiations with Kenya Airports Authority (KAA) to set up a modern flying and aeronautics engineering training facility at the Moi International Airport in Mombasa. “Presently, professional Private Pilot Licence (PPL) and Commercial Pilot Licence (CPL) holders have to go oversees for training which is expensive. Frontiers Services Group plans to set up a world class flying school for East Africa based in Kenya,” CEO, Mr Peter Philips, said in an interview.

Mr Smith said FSG is in discussions with KAA for leasing of space at the Moi International Airport, Mombasa, suitable for construction of a hangar for aircraft maintenance. “We are also exploring potential and cost of acquiring land from KAA suitable for commercial development of five additional hangars, potential for development of a free-zone port (an EPZ) immediately adjacent to the Southern Border of KAA Mombasa International Airport,” Mr Philips said. The firm plans to invest an initial $150 million (Sh13 billion) in air logistics business targeting oil and mining companies in the East Africa region and the Horn of Africa, the UN agencies and VIP transport among others. Blackwater “FSG’s vision is to invest and grow with the increasing number of multinational businesses moving into East Africa. Future expansion plans include to become Pan-Africa Air ambulance provider, VIP transport, corporate jets, air drops for equipment and materials for governments, extractive mining companies, UN humanitarian services among others,” he said. The firm has set up shop in Nairobi, by acquiring two Kenyan aviation firms – Kijipwa Aviation Ltd and Phoenix Aviation.

“FSG learnt from Kenya Private Sector Alliance (KEPSA) that it was difficult to attract and retain Kenya certified aeronautical engineers. For this reason Kijipwa and Phoenix became attractive due to their already established commercial and technical capabilities,” Mr Philips says. “Kijipwa was attractive due to the reputation of the founder, Mr Alan Herd, who is a leader in Kenya’s aircraft maintenance for decades, while Phoenix is recognised by UN as a leader in Air Ambulance business on the continent,” Mr Philips added. FSG has been keen to emphasis its focus is freight and logistics, an under developed segment of air transport in the region, not passenger transport. Although the firm would contribute to manpower development by setting up flying and aeronautical engineering facilities for the region in Nairobi, its association with former American private war contractor in Iraq and Afghanistan, Mr Eric Prince (chairman), has generated considerable attention.

Mr Prince was founder and the most famous face of Blackwater, a private security services contractor for US government, whose activities in Iraq and Afghanistan were heavily criticised over human rights excesses. He has since left Blackwater in 2010.

World Bank arm to give Sh54 billion for regional oil pipeline

A World Bank arm has pledged Sh54 billion ($600 million) to fund an oil pipeline linking upstream operations of Kenya, Uganda and South Sudan.

The funding by the International Finance Corporation (IFC), the private sector lending and investment arm of the World Bank, is part of a Sh160 billion ($1.8 billion) loan for projects in the Horn of Africa.

“IFC investments under the new Horn Initiative will include a regional pipeline linking Uganda and Kenya, greater investments in agribusiness expansion in storage, processing and seeds,” said a statement by the bank.

The World Bank president Jim Yong Kim and UN secretary-general Ban Ki-Moon are set to visit Kenya Wednesday.

The financing targets 1,300 kilometres but the whole pipeline project is estimated to cost $5 billion to complete.

From Eldoret to Kampala, a distance of about 350 kilometres, the pipeline is expected to cost not less than Sh27 billion, according to one estimate. The current pipeline in Kenya reaches Eldoret.

The proposed project also involves the section between Kampala and Kigali, a length of 434 kilometres, that is not under the $600 million financing.

The tender for the pipeline was advertised last month by the three governments. It called for a contractor with both local and international experience.

The contract for the successful bidder will involve the procurement, construction, testing and commissioning of the pipeline.

The venture is expected to be completed in three years and will serve several countries including DR Congo, Burundi and South Sudan.

The funds made available by the IFC are also intended to support renewable energy projects such as wind energy and access to markets.

Besides the pipeline, the World Bank is also providing technical assistance on a project to manage petroleum business and proceeds once actual extraction begins.

The Kenya Petroleum Technical Assistance Project is intended to strengthen the capacity of the government to manage the petroleum sector and resulting wealth for sustainable development.

The project has several components, the first being reforms and capacity building to enable the State manage oil to international standards.

The second component involves revenue and investment management, driven by the need to avoid possible wastage that may come with large amounts of oil.

The third component of the technical assistance project will enable the State integrate the petroleum sector in the broader economy.

African nations preparing to tap natural gas reserves

U.S. Treasury Secretary Jack Lew was in Tanzania for meetings with government officials and American businesses operating there, and while none of these events were open to the press, rest assured the East African nation’s new natural gas reserves will be a hot topic.

Lew talked about Tanzania’s plans to review all of the contracts that allow for oil and natural gas exploration and production. Energy and Minerals Minister Sospeter Muhongo says the government wants to set up a sovereign fund like Norway’s and ensure the country get its fair share of revenues. Statoil, Exxon Mobil and BG Group have found 50 trillion cubic feet of natural gas in Tanzanian waters.

Needless to say, the companies that made those discoveries – and their home governments – are concerned about any move to renegotiate terms. Tanzanian officials must also be careful if they want the $20 billion of investment needed to exploit the nation’s reserves. Tanzania was founded as a socialist government, and still tilts to the left, so this will be a defining moment in that nation’s history.

International oil companies have made major natural gas discoveries offshore from Kenya down to Mozambique.  There are also natural gas deposits off the coast of Somalia, but that nation is too unstable for exploration.

These discoveries could potentially transform the economies on the west side of the Indian Ocean. The International Energy Agency estimates Mozambique alone could see $115 billion of investment, and the Banco Nacional de Investimentos has set up a venture capital fund for local businesses.

Producers in Africa plan to liquefy the majority of the gas produced from these Indian Ocean wells for export, either through the Suez Canal to Europe or to South Asia. Either way, the production combined with exports from the United States will change the global natural gas market. What is unclear is whether the glut of LNG will drive prices lower, or if low prices will spur the adoption of natural gas as a transportation fuel.

Either way, it’s important to remember that the United States isn’t the only place in the world producing more natural gas.

Savannah Cement focusing on regional market

Local cement manufacturer Savannah Cement has confirmed ongoing plans to firmly cement the East African market as part of its regional integration support project.

The ongoing regional market development project by Savannah Cement is based on a commitment to pursue sales opportunities in all the East African countries by next year, the firm’s Managing Director Ronald Ndegwa, has said.

Speaking at the sidelines of the just concluded East Africa Business Summit in Kigali, Rwanda, Ndegwa assured the firms customers in Rwanda and Burundi that plans are an at advanced stage to appoint local dealers in the two countries to boost product availability.

Already, Savannah Cement, he said, is enjoying good market performance in the Kenya, Uganda, Tanzania and South Sudan markets. In Tanzania, the firm, he said has also expanded its market reach by retaining in country dealers in Arusha and Mwanza to cover the country’s inland cement demand.

“Savannah Cement’s overall corporate development is anchored on a regional market coverage strategy and we are glad that we have made good inroads in the respective East African markets,” Ndegwa said. “With our current installed production capacity of about 1.5 million Metric tonnes, we are well placed to meet regional demand,” he added.
The company, he disclosed is also considering doubling its current production capacity to meet demand for cement products including its recently formulated Hydraulic Road Binder (HRB) road building cement product.

To meet growing market demand for its products, Ndegwa disclosed that Savannah Cement, is lining up development projects valued at more than US$300million including an investment plan to establish a clinker manufacturing facility and commission its second grinding plant.

Already, Savannah Cement has invested more than US$100million to develop one of the most advanced and eco friendly cement manufacturing plants in sub-Sahara Africa.

The Savannah Cement products are uniquely formulated to meet all building needs. Carrying the ‘R’ quality classification, Savannah Cement products are specially formulated to provide Rapid strength development which ensures improved customer profitability through enhanced productivity and construction efficiency.

Savannah Cement products also provide enhanced strength at all ages assuring superior concrete performance as well as unmatched durability with great aesthetics.