THE opportunities for energy exploitation, and associated legal and regulatory work, range across the region: from relatively mature oil and gas production in Congo-Brazzaville, Gabon, and Ivory Coast, to those are under-developed markets, such as Madagascar, to those heavily dependent on imports, such as Guinea.
Away from oil and gas, the region possesses considerable potential for renewable energy, building on the expertise of those countries with experience in hydroelectric power, which acts as a mainstay for many: Gabon and Senegal both make extensive use of either; Guinea nicknamed 'the water tower' for the confluence of potential power sources remains notably under-resourced. Solar and wind power are also under investigation, with associated legal advice sought.
Infrastructure, however, and the proper legal and managerial structures that go with it remain the often missing component to underpin the successful development of energy projects in the region.
With Chinese and Indian demand (in part) fuelling the need to reinvigorate the region's under-performing power plants leading to powercuts, variable supply, and associated problems, as well as civil unrest invarious states, has caused legal and regulatory change in the countries in which we work.
Due diligence; financial difficulties and prerequisites; tight contractual drafting; an understanding of the political and regulatory context of negotiations; anticipating appropriate dispute resolution clauses, and an eye on anti-corruption risks are all constants, to manage risks.
The following is a snapshot of the various jurisdictions in Francophone Africa in which the firm operates.
As one of the largest producers in West Africa, whilst exports have boomed, production has declined, leading to new fields for development, and new licences awarded for exploration. Large reserves of natural gas have also proved beneficial, with a new gas plant opening at Pointe-Noire, which, together with the boost to hydroelectric power with the completion of the Imboulou Dam, has aided the country's supply difficulties. Both of these willassist the development of refinery capacity and other infrastructure opportunities are open. The country's laws on regulation and supply of electricity over ten years old remain stable; there is a greater focus on ADR for energy sector disputes.
Like its near neighbour, energy exports make up a significant proportion of the country's export revenues, and the licensing system established through Exploration and Production Contracts is well known to oil majors, where Total remains the biggest player. To combat falling reserves, new licences are being awarded by tender with 42 blocs being on offer. The country has revised its Hydrocarbon Code, with a new national oil company to manage the sector, and a review of the ESPC market is in place. The Code has made extensive changes to tax, royalties and increases local involvement in JV'son which advice should be sought.
Electricity run by a subsidiary of French company, Veolia, has seen many tensions arise over supply and the prospect of reregulation and transfer of the concession by the government at expiry in 2017 remains apossibility.
Guinea's energy market remains less exploited, given a lack of investment inthe country's energy network, which is needed to make it more attractive, especially through new infrastructure. With the national energy supplier insome financial difficulties, that investment need competes with existential realities; yet the real potential for hydroelectric power exists, up to potentially 20,000 gigawatts/per year. That has focused the mind of Guinea's government and its Chinese partners, and are cent USD 18m World Bank loan will supply some of those needs; joint Guinean-Chinese dam projects may supply the rest.