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The East African : December 16th 2013
46 The EastAfrican BUSINESS DECEMBER 14-20,2013 P≥emie≥ cedes 20pc stake in o≠sho≥e a≥ea BY KENNEDY SENELWA Special Correspondent LONDON STOCK Exchange quoted Premier Oil Plc has withdrawn its 20 per cent equity stake in Kenya’s offshore exploration area L10A. However, Premier will retain 25 per cent share in adjacent acreage L10B, where a decision to drill a well for oil and natural gas will be made by mid 2014. “While we remain commit- ted to exploration in Kenya, we continue to focus our resources on projects that meet our internal corporate investment metrics,” said Premier’s chief executive Simon Lockett. Premier’s previous joint ven- Tourists at Baobab Beach Resort in Mombasa on November 7. Tourism remains underdeveloped in the region. Picture: File A single tou≥ist visa is the best way to ≥ealise the ≥egion’s tou≥ism ambitions COMMENTARY PHYLLIS KANDIE “Our offering has been the same for too long — we need to put new merchandise on the shelf.” O ne sector that can drive East Africa towards our common aspirations and deliver respectable returns to all partner states is tourism. It is also the one sector where cooperation and partnership are perhaps easier than most. However, it is our ambition in exploiting a natural God-given resource that is still wanting. It’s time to change that. It is time to implement revolutionary ideas in the packaging and marketing of tourism products not just in Kenya but also across the East African Community. It is time to look at our wildlife safaris and the beaches as one major tourism product within the region; it is time we looked beyond individual states and envision a borderless, regional market, where Kenya, Uganda, Tanzania, Burundi and Rwanda see the entire region as their domestic tourism market and the world distinguishes it as one destination — where one can enjoy the adventure of wildlife safaris and exquisite beaches without too much bureaucracy and unnecessary laws and regulations. A single tourism visa will help us achieve this objective. I strongly believe this should be the perspective of tourism across the region. Kenya has already set out on this trajectory as stated in the national tourism master plan found in the Strategic Plan of the Ministry of East African Affairs, Tourism and Commerce. The plan seeks to diversify the product from the normal traditional offerings that have been the backbone of the sector to incorporate conference tourism through the setting up of three additional convention centres in Nairobi, Kisumu and Mombasa. This is a more functional aspect of the industry but a lucrative one nonetheless. Sadly, we have underdeveloped it to our own disadvantage. We are committed to changing this. Further, we seek to diversify our product to include cultural, medical and sports tourism. We also seek to develop niche products such as beach sports and water skiing. The reasoning behind this strategy is clear: Our offering has been the same for too long — we need to put new merchandise on the shelf; these genres are excellent platforms to deliver the diversity we seek. The same holds true for the entire region and the fruits of this diversity would treble in impact and size if we pursued this goal as a region. Beyond diversification, we in Kenya intend to pursue the investment in the industry necessary to increase our bed capacity by 30,000 beds. This is not all; in the next five years, we seek to double our income from the sector, which stands at $100 million. We also intend to push our arrivals to three million visitors per year in the same period. We shall achieve this by retaining our source markets and aggressively going after new and emerging markets such as Russia, China, Brazil and India. The takeaway here is that this capacity for growth cannot be just present in Kenya alone. If Kenya can set such goals, imagine the EAC acting, co-operating and partnering with each other fully in this sector. Like the case in Kenya, other partner states suffer from underdevelopment of capacity in the tourism industry. The opportunities for partnership have started to reveal themselves. For example, last week, Igad launched its Sustainable Tourism Master plan. Sustainability is an issue we must address for our major sectors, tourism included, depend on it. We must ensure our industry is respectful to the environment and that local communities who host industry establishments in their midst benefit from the sector. This is how we balance tourism, conservation and socio-economic develop- We shall retain our source markets, but still go after new and emerging markets such as Russia, China, Brazil and India.” ment. If we embrace this issue as a region, we strike the balance a lot sooner and a lot more decisively than we do individually. Kenya, Uganda and Rwanda are putting final touches to a single tourist visa and we hope that Tanzania and Burundi will sign on as well. The idea is to offer access to more attractions for less paperwork. Joint marketing is next on our list. We can package East Africa in a way that creates a new dimension in the global tourism industry. Given the scope of physical and cultural attractions we can create the most diverse and incomparable brochure, the kind that will take a continent or subcontinent to rival. We can dominate tourism in Africa and emerge as a dominant player without. Our co-operation and part- nership as a region falls short in ambition especially when measured against the promise. We can build a product so linked and liquid that a visitor can seamlessly move between nations and consume totally different experiences visually and culturally with just one stamp. We can do all these things if we buy the premise that for this specific industry, East Africa has a remarkable advantage as one market and one product. Tourism is not made in factories, we are a blessed region; we can parlay that into something bigger for all of us by all of us. Phyllis Kandie is Kenya’s Cabinet Secretary for East African Affairs, Tourism and Commerce ture partners led by BG Group can now increase their shareholding of acreage in L10A, where drilling of Sunbird-1 well for crude oil and natural gas will start in January 2014. Prior to the withdrawal, Pre- mier owned 20 per cent of acreage L10A, BG 40 per cent, PTT Exploration and Public Company Ltd — PTTEP — of Thailand 25 per cent and Pancontinental Oil & Gas NL of Australia 15 per cent. BG now has a 50 per cent stake in area L10A, PTTEP (31.25 per cent) and Pancontinental (18.75 per cent). In October, Premier signed an agreement for the acquisition of 55 per cent interest in onshore oil exploration area 2B in north eastern Kenya from Taipan Resources Inc of Canada. Premier will pay Lion Petro- leum Corporation, a whollyowned Kenyan-based subsidiary of Taipan, $1 million for expenses incurred in exploration work carried out in acreage 2B. Premier will also pay for Taipan’s share of expenses for drilling a well on pearl prospect and future costs up to a cap of $13.2 million, besides providing guarantees of $13 million as the deal is subject to regulatory and other approvals. BG Group is expected next year to drill in offshore area L10A and L10B to identify potential commercial reserves of oil and gas close to Mombasa town and adjacent to Kenya’s maritime border with Tanzania. Nairobi-based ESF Consult- ants and Citrus Partners LLP of London estimated the cost of the project at $160 million as revealed in the environmental and social impact assessment study prepared for BG. BG Group owns 45 per of acreage L10B, Premier has a 25 per stake, Pancontinental 15 per cent and PTTEP 15 per cent of equity that was acquired from Cove Energy Plc.
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