Small Talk: Wentworth's East Africa connection
Recent oil activity in Uganda has spurred interest from investors
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Monday 31 October 2011
Wentworth Resources became the latest oil and gas business to list on London's junior market last week. The firm, which is focused on East Africa, made its debut on the Alternative Investment Market (AIM) on Tuesday, supplementing its listing on the Oslo exchange.
The executive chairman, Bob McBean, was keen on playing up the East Africa connection as the shares began trading. This is no surprise given the spurt of activity as oil companies of various stripes seek to gain entry – or extend their influence – into the relatively unexplored region. Recent oil activity in Uganda, along with gas discoveries offshore Mozambique and Tanzania have roused the interest of investors and analysts.
Wentworth's interests are spread across the region. The main asset is in the Mnazi Bay in Tanzania. That is supplemented by interests in the onshore and offshore Rovuma block in Mozambique. It also has a stake in the gas infrastructure and owns a regulated gas-fired power plant in Mnazi Bay.
"Wentworth is an established player in the region and benefits from having exceptional partners with proven track records," Mr McBean said. "Our acreage position is second to none, with production, proven discoveries and significant exploration upside."
The record thus far is certainly encouraging. To date, the company has drilled four wells in Mnazi Bay. Of those, one is currently producing, while "all four wells encountered hydrocarbons and are capable of producing", it said. Over in the Rovuma Bay, gas discoveries reported by the likes of BG and ENI point to the presence of potentially significant resources. Its interests in infrastructure, and the power plant mean Wentworth also draws revenues from natural gas and electricity sales, something which makes it stand out from the crowd of energy companies on Aim. It is also looking at other opportunities to expand such revenues, including a proposed natural gas pipeline from Mtwara in Mnazi Bay to the Tanzanian capital Dar es Salaam. Wentworth's house broker, FirstEnergy Capital, highlighted these plans in a circular last week.
"The company's geographic positioning within Tanzania and specifically Mnazi Bay offers exposure to a growing gas market," the FirstEnergy analysts said. "Although still at a nascent stage of negotiations, we see as positive a recent Chinese-led proposal to fund not only the construction of an east coast pipeline linking Mnazi Bay to the capital Dar es Salaam but also a recent proposal to build a 300 MW power facility."
Daniel Stewart heads into Middle East
The Aim-listed stock broking firm Daniel Stewart set the stage for a push into the Middle East last week by announcing a joint co-operation agreement, Clarkson Capital Markets, which is based in Dubai, the regional financial hub.
The two businesses have complimentary interests. Daniel Stewart is strong in shipping, which sits well with Clarkson's focus on maritime, oil services and natural resources. "Given the tough global economic conditions, we believe it is important not only to diversify our offering to our clients but also to enhance our geographic footprint," Daniel Stewart's chief executive, Peter Shea, said.
He added: "[Clarkson] is an established, experienced global player headquartered in Dubai... and this agreement gives us access to high quality research and investment banking capabilities in the transport, maritime and energy sectors."
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