Zambia and Angola sign $2.5bn Oil deal
THE ZAMBIA Development Agency (ZDA) and an international corporation of Angola on Friday signed a US$2.5 billion memorandum of understanding (MoU) which will see the construction of a petroleum pipeline to run from Lobito in Angola to Lusaka.?
The corporation, Basali Ba Liseli Resources Limited (BBLR) and ZDA, confirmed that the project that would see a reduction in the pump prices of petroleum products, would commence early next year and be completed in 2016.?
According to the MoU, the project would apart from helping to reduce fuel prices in Zambia, also create about 6, 000 jobs in both countries.?
The project would be called Angola-Zambia Refined Petroleum Multi-Product (AZOP) would cover 1, 400kilometres from the Port City of Lobito, to Lusaka in Zambia.?AZOP Pipeline system would not involve middlemen but designed to deliver finished products including petrol, low sulphur diesel, Jet fuel and Liquefied Petroleum Gas (LPG) for Zambia, and Katanga Province in Congo DR.?
Speaking in Lusaka during the signing ceremony, BBLR executive director Wamulume Kalabo said the AZOP Pipeline would be conducted through a Build Operate and Own, Transfer (BOOT) basis under the Public-Private Partnership (PPP) initiatives.?
He said BBLR was currently evaluating bids received from shortlisted first-class pipeline design and engineering companies who responded to requests for proposals and a technical committee would be appointed by end of this month.?
Mr Kalabo said the project would provide logistical efficiencies in the delivery of petroleum, ready for end user consumption by drastically reducing on middlemen and other logistical requirements?through directly connecting the Government buying agencies in Zambia and other agencies to the producer.?
“We have no doubt the AZOP Pipeline system will reduce the relative pump pricing in Zambia and the regional target market, while further enhancing the quality of life by agitating for migration from the use of charcoal to the use of LPG, in most domestic homes,” he said.
?He said BBLR would work with competent authorities in Angola and Zambia with the core objective of constructing a refined petroleum multi-product pipeline to produce a minimum of 200,000 barrels per day of which Zambia would be benefitting 80,000 barrels per day.
He said in that regard, BBLR was in advanced negotiations with the Development Bank of Southern Africa (DBSA) with a view of anchoring the financing for the AZOP project.?
He said BBLR had received letters of expressions of interest from various financing institutions, potential technical partners and equity partners that would provide resources with BBLR on AZOP.?And Ministry of Commerce Trade and Industry Permanent Secretary Stephen Mwansa said the Government would fully support the project to materialise and create jobs for citizens.
?Mr Mwansa said the Government was working towards creating a robust economy and the coming of AZOP would help improve the economy through provision of easily accessed petroleum in the nation.?
He said energy was an important sector as it was a lifeline to driving the national economy and that the Government was confident the project would be completed as planned.?
ZDA acting director Glyne Michelo said the project was in tandem with ZDA’s mandate of fostering economic development and growth which was to promote and facilitate investments.?
He said Zambia had a high degree of investment security because of unparalleled political stability that was strife-free without ethnic divisions and a democratic rule that respected diversity of constitutionality.?
Mr Michelo said the obligation of ZDA in facilitating BBLR/AZOP would among other goals provide relevant information necessary to enable it to determine and evaluate feasibility of the project.?
[Times of Zambia]
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Good development, we applaud the initiative. keep it up!
Seems like a viable project.
It doesn’t read like an economically viable project.For $2.5b one would expect a major oil find or even high volume fuel use in zambia to make it worthwhile.Zambia doesn’t use enough fuel to lower prices enough and at the same time pay for the cost of this pipeline.
Good project. Please check these details or don include inaccurate info. For example the distance from Lobito to Lusaka is 400 km, may be 4000 km….
it says 1, 400km…see the ending from the previous line
Reads.*1,400km* and not 400 can never be 4000km.. Just correcting.
Goodmorning country men and women..this is a very good project whch can aid Zambia in many ways apart from economic. BUT my concern is that WHY not establish this project in kabwe or Kapiri Mposhi a central place and revive the economy of central province whch has bn a ghost provice 4a couple of years now.
# the cost will not be borne by the Zambian govt alone. Lets think about the future, this project is viable and will serve Zambias best interest in the future
This are PF ideas of the drawing board. This is what we all want. We shall have so many people employed. I am sure such line will pass through Western province. Why cant we reduce the construction cost by having the facility up to Kaoma or Mumbwa. Do not congest Lusaka. Surely Angola will provide stead flow of Oil. In the same vein let us look at construction of a steel manufacturing plant in Northwestern province where we have a lot of iron deposits. If we produce our own steel it will be cheaper and construction of building would be far cheaper. Well, the Angola pipeline is a noble cause thanks to ‘King Cobra’. I know the man has original ideas. PF rule will bring real development, just as a continuation of where KK left. KK was more original than Chiluba, Mwanawasa, & Banda.
He said Zambia had a high degree of investment security because of unparalleled political stability that was strife-free without ethnic divisions and a democratic rule that respected diversity of constitutionality.?
the statement is corner stone for us to move forward as a nation, especially for long term projects like this one. But how true is this statement under this PF govt when all they see is regionalism and the others are not good enough.
I concur with Floyd (No. 6) on location of new oil terminal. I keep saying that we are still in the colonial york; always belittling ourselves. Surely why bring the line to Lusaka and not Mumbwa or indeed Kaoma as Floyd suggests? We should be looking beyond our noses, lets create a new TOWN by decongesting Lusaka for God’s sake. We could put up this Oi terminal anywhere between Western and/or Central Province where we can put up new infructure with mordern facilities like Airports/Universities/Hospitals/Housing estates etc, etc. This is how other countries would do it and create lots of employment opportunities for our young pipo. Lusaka is not a good place anymore because it lacks certain social infructure and is built on a lime stone. We should learn to consult and not just dream!
Ba Mbuzi it’s 1, 400km from Lobito to Lusaka; check the lines properly.
People do not check lines properly,yes indeed its 1500km.
1400km
From past experience I have now started to critically analyse all deals that government enters into. This Angolan Corporation Basali Ba Liseli Reources Limited has a Lozi name and Lozi Executive director. Is it really Angolan? How long is the period before transfer of ownership? What is meant by removing middlemen. How different will this be with current design. Because the only difference I can see is that it will be finished product and not crude. There will still be fees for transportation through the pipeline, offloading at the port and probably storage at the port.
@ Floyd< you are wrong to say the project is PF's. This project has been around for 2 years now. It is a private company trying to do this and they have had difficulties getting financing for the project. I give credit to PF for supporting them to access finance if that is what they are doing. MMD gave them support for the projects and these guys have been taken around to try and find partners which they haven't been successful.
Please , if we don't know let avoid giving credit, just applaud the effort.
Lets give credit where its due. All these roads projects lets give LPM posthumus Merits and Distinctions. During the campaings Sata talked about accessing oil from Angola. Im sure thats why he had to send KK to appologies first before enticing them ,Angolans, to make such a move. Which two years are you talking about. Lets just give Michael a part on the back.
Better trade with neighboring nation than with Iranians through middlemen who have plundered Zambia. Kudos His Excellency Michael Sata.
Good Project. I wish it started this year. go for it.
Lekeni Sata ateke ba Swaini imwe!
#11 what are you trying to say, just because the corporation has a LOZI NAME does not mean the project or the intentions are not good. I see you want to start malasambwa. Let people who want to see their country move forward do something, stop bringing people down. Zwafa malete ahao, ukanyela
ONE OF THE GREATEST MOVES!!!!
FUEL IS WHAT MAKES LIFE EXPENSIVE SO THIS IS A MEASURE BEING TAKEN TO ALLEVIATE POVERTY.
Good project but can be done at least cost.why run the pipeline from angola to lusaka.why cant they put the refinery in western province.
So this pipe will pass through mwinlunga, solwezi, chingola, kitwe, Ndola, kapiri mponsh, Kabwe, landless corner,chisamba, until LSK.
To me this sounds like a political talk. Let’s wait and see
I will only believe this when construction is completed. What happened to Phesto Musonda’s US$ 600 Refinery and pipe line from Angola that we heard so much about?. I fear this could just be another pipe dream!!
Ok iti s a great idea but i do agree why should everything be Lusaka? Kuli ko na development bank of southern Africa??? OOhhh? As zedians we are have learned to be wary of institutions that we are not to familiar with. Fingers crossed.
This kind of project is long over due. we talked about it years ago when we were discussing the Shangombo-Rivungu canal. Plans were underway to build a channel between Shangombo and Rivungu district in Angola and the project was to include the building of modern ports fully equiped with fuel terminals. so I would suggest govt revisits the Shangombo-Rivungu canal project, and let the oil refinery or terminal be built in Shangombo of the western province. This done will open up the poorest district of the western province to development and create employment not only for the poor people of shangombo and western province as a whole but the country at large. why build a pipeline all the way to lusaka from Lobito when Shangombo is the nearest and another similar project is already on
#16 Mushe. You derive pleasure in insulting someone even when you do not understand what they have written. I know english is not all our mother tongue but when you don’t understand a statement the best you can do is seek clarification than parade your ignorance and stupidity by insulting over something you don’t understand. My contention is over whether the company is really an Angolan or Zambian company. Since it has a lozi name and even lozi director my take is that it is a Zambian and not Angolan company as the article portrays it.
Good news.My only concern is the arrangement on ownership-they are saying Build,Operate,OWN & Transfer!What will be the rationale for Transfer when actualy they will OWN?I have alwasy known Build,Operate & Transfer.Maybe its not a big issue but I urge GRZ to make proper win-win deal.Thumbs up PF
Easy, dont get too excited!!
Recently some company announced they will build a new refinery in Ndola. Govt said they will support that.
Now another company say they will build a pipeline to bring in refined oil products. Again the govt says they will support that.
Do they really understand thse things. You cant have 3 companies: Indeni refinery 1, The New Refinery 2″ and AZOP pipeline all serving teh small Zambian economy.
In other words, some of these projects will not take off, despite their glitter. Govt needs to state their policy on the oil sector in Zambia. what exactly do they intend for Zambia?
Just start ice trucking and we will support you. Just remember to factor in the cost of producing ice. There is nothing wrong in having 10 refineries
By how much will fuel price be reduced. If the project deatils are available, the company should avail us the expected price instead of being hazy.
@ Ludanzi Dweller; the company is Zambian. don’t waste time with people that like insulting
It a wonderful ideal but build that project under what cost refined crude oil is highly inflammable we risk burning that kind of dear investment mostly from wild fire mainly comming from leakages caused by thugs who will be puncturing the pipeline to steal the fuel by draining. Its happening in west Africa.
:-?:-?this is not possible because there is no enough security personnel to guard the pipeline from angola to lusaka.most vandles will be rich and expect great explosions like those in nigeria caused by attempts to syphoon the products.
what they can do is pump crude oil and have another refinery in lusaka that is all.where are the so called technocrats to advise government on the issue of the vandalism.
Uli wamano
Kaoma or Mumbwa are the best places for the oil terminal. From there you can have a rail line constructed to join the main great north line. Additionally, a proper dual carriage road be constructed to the town that will have the terminal. This is a developmental spot indeed. PF, move on and quickly, please. I don’t care who first thought of it. He that does it will deserve the credit. Ideas are just ideas and can remain ideas. Implementation shall bring development. If you have ideas but you are stealing the funds needed to implement ideas then it is all useless. I like the Luanshya Teacher’s College (TVTC) motto: ‘Learning By Doing’.
1. OIL EXPLORATION IN NORTH WESTERN
2. CONSTRUCTION OF NEW PIPELINE FROM DAR ES LAAM TO TAZAMA AND CONSTRUCTION OF NEW OIL REFINERY NEAR INDENI
3. CONSTRUCTION OF PIPELINE FROM ANGOLA TO LUSAKA
WHICH ONE ARE WE GOING FOR? THIS TELLS ME THAT FINDING A SOLUTION TO FUEL IN ZAMBIA IS NOT EASY. I SUGGEST WE REHABILITATE TAZAMA PIPELINE AND UPGRADE INDENI OIL REFINERY. THIS IS MUCH EASIER.
cont… 1. If people can steal zesco cable conducting Electricity what about Petrol or diesel from the pipeline 2. If people can syphoon fuel from tankers in day light while the Truck is moving and the Driver is watching wat about from a pipeline which will pass through miles of solutary places? Its safe and less risky to construct a pipeline from any country from outside zambia which will transport crude oil and not finished products.
i sense corruption,when i remove santos 4rom power and become the president of angola am going to reverse this deal.
As far as security is concerned I would be interested to hear from anyone up here in the know if the use of satellite surveillance backed by a security support team with choppers is just my creative mind dreaming or whether today’s technology allows some kind of monitoring system. Those who steal need to transport and therefore have to move around. Perhaps there are those with thoughts of how to secure a precious pipeline and one would expect that the penalties of being caught should be the strongest of deterrents.
NOT TO FAST – “Yaluma dismisses $2.5bn fuel deal
April 16, 2012 -
By JIMMY CHIBUYE
IN WHAT looks like a major protocol breach, it has been revealed that the US$2.5 billion agreement signed between the Zambia Development Agency (ZDA) and Basali Ba Liseli Resources of Angola for the construction of a petroleum pipeline is null and void.
Minister of Mines, Energy and Water Development Christopher Yaluma says his ministry is not aware of the deal.
The agreement, which was witnessed by Ministry of Commerce, Trade and Industry permanent secretary Stephen Mwansa and some diplomats from Namibia, Angola and Botswana, was signed by ZDA acting chief executive officer Glyne Michelo and Basali Ba Liseli Resources executive director Walumelo Kalabo”
Indeni s life span Shortened
I always wondered why this was not done in the past immediately after the end of that country’s civil war, I guess it was the poor relations between the two Govts. back then.
My other question is why use the pipeline to deliver finished products; why not just pump crude oil and process and produce the finished products ourselves, the only people who will be benefiting will be the Angolans.
Indeni won’t compete, it will go bankrupt. Who will buy fuel from them?
Alot of talk no substance…. i rest my case
The only solution to fuel in ZD is INDENI and TAZAMA. Check after 20 yrs you will find these companies alive.
I cannot comment, LT doesnt like me any more. Even though this is my specialisation. But in case they allow my comment: BOOT is another form of private finance aimed at filling the gap which gap government may not fill as quickly as private sector could. So its in the best interest of the company to be as transparent, corrupt free and efficient so they can recoup their investment as quickly as possible. As for government: the design, construction and operation needs to be well monitored because should they sign a concession; it might be that they are handed a project when its knackered; a bit like being given a used car after it has been used as s taxie in Lusaka for 15 years; principle would be fine, but the “health” of that car might be poor; hence costing a fortune to operate.
Those of you saying 3 refineries would be too much; well, think again. There is a ready market in the Congo, Malawi and Zambia; with increased competition pump prices would be maintained at a reasonable level. I agree with #29: Wamanao; it wold highly risky, extremely expensive to secure a line for “finished products” for over 1500km. Either the firm was misquoted. Northwestern /Western province would be the best location. Yes security and the like; but for the same of employment and the like; it would be better. Remember, the new copperbelt is right in the west of Zambia; near the Congo.
Solution2030
My comment is also pending approval by a site moderator….LT sort out your website!!
We need more of such….not useless policies on utujilijili and prostitutes!
Great idea, but not the finished product thing! The pipe line will be vulnerable to vandals. Finished product will also rob us of much needed jobs.
where have you been all this while..start as soon as possible..!
Firstly this was not done earlier because Angola on the side closest to us had land mines like masau trees in the eastern province. This is a great move, if you are opposing it you are not Zambian and a mere hater.
My view is that the Govt should invite the private sector (including Basali Ba Liseli) to invest in Indeni and Tazama. It will cost less than $2.5bn. I am led to understand that Angola has the crude oil but no refining capacity, in which case they will use this opportunity of a new market in Zambia to invest in additional refining capacity.Why not invest in improved refining capacity ourselves?
Have these guys done the feasibility studies. Would it not be batter to build a rail line. It would serve multiple purposes. To transport fuel people and export, import goods through Angola. Can we not invest 2.6 bill in bio fuel thus creating more jobs and setup a new agro industry in zed. Guess no one would think of this. But please! Please! At the very least don’t import the steel pipes get Zambia steel to suply most of the pipes don’t just import everything. We need to start keeping this money that we borrow within Zed. We should not continue to be a broken bucket.
GOOD IDEA.CAN ANY ONE TELL ME WHO IS FUNDING SUCH A HUGE PROJECT? AND HOW IS THE MONEY GOING TO BE RECOVERED?THE PART OF ANGOLA NEAR ZAMBIA IS RIDDLED WITH UNEXPLOIDED LANDMINE.IS THE COST OF DE-MINING TAKEN INTO CONSIDERATION.HOPE THE PROJECT COME TO FRUITATION.
What about first developing refineries to utilise the Coal Bed Methane in the Kariba , Luano and Luangwa Valleys and the Gas West of the Zambezi before embarking on imports
nkola nkala