Energy matters

One of the reasons for Africa’s current geo-strategic relevance, is beyond any doubt energy: to mention just one factor, a great number of unexploited or barely exploited hydrocarbon deposits, both onshore and offshore, are located in the continent.

Russia, at first sight, should have little or no interest in these resources, being self-sufficient from that point of view and also a net exporter of both oil and natural gas. Nevertheless, Moscow has shown interest for extraction and production projects in Africa, a move that should not be underestimated by those willing to grasp the full extent of Moscow’s strategy in the continent.

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Take for instance the 2006 deal between Russia’s natural gas corporation Gazprom (the world’s largest company in the sector) and its Algerian counterpart, Sonatrach: the two firms agreed to cooperate in the exploration, extraction, and production of liquefied natural gas from Africa’s second largest reserves. Some seven years later, in February 2013, Gazprom and Lukoil were also invited to tender for the joint development of 30 fields that cover one fifth of Africa’s largest country. Both agreements are aimed to strengthen a partnership that would control almost 40% of the gas supply to Europe. So by building closer links with Algeria, Putin can make Europe increasingly dependent on Russia both for energy in general, and gas in particular: a weapon which he has already resorted to several times throughout his years in power.

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In the latest years, Russia has gone even further in its attempts to control a large chunk of Africa’s hydrocarbons, turning its attention to the southern hemisphere and in particular to two former Portuguese colonies. Gazprom has established a presence in Angola, while in Mozambique Rosneft has signed an agreement for the exploitation, with the state-controlled hydrocarbon company Enh (Empresa nacional de hidrocarbonetos), which enabled the Eurasian giant to set foot in the region. Gas, however, has to be liquefied before being transported to its destination, and oil has to be refined. Many African countries which have discovered large deposits on their territories are now trying to build plants for these purposes. So, the experience Russian companies gained over the years is another asset that Moscow can use to gain influence in Africa.

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Some of the biggest deals Russia struck in the last years in Africa, in fact, involve oil refining. The most recent example dates back to last February, when the Ugandan government awarded RT Global resources, a subsidiary of the largest Russian state holding company, Rostec, a contract to build the country’s first oil refinery. Cost estimates for the project are as high as $4 billion and Russia has obtained a 60% stake in the plant, which will have a key role in the exploitation of the oil deposits recently discovered on the border between Uganda and DRC. Also Kenya and Rwanda have agreed to buy stakes in the project, which will have an initial capacity of 30,000 barrels per day, to be doubled once the plant becomes fully operational.

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When coming to energy production there is another sector in which Russia has a decades-long experience: building and managing nuclear power plants. This might soon prove to be a lucrative business also in Africa, literally from the Cape to Cairo. In September 2014, the state atomic energy corporation Rosatom announced that it had secured a deal to provide South Africa with up to eight nuclear reactors, in the framework of the country’s most recent energy plan. In a few days’ time reality would prove to be much different: the supposed $50 billion deal drew criticism not only from environmental groups but also from investigative journalists. The latter questioned the alleged role played by president Jacob Zuma in the negotiations and then in pushing Energy minister, Tina Joemat-Petterson, to accept the conditions imposed by the Russians. Even if in response to such accusations, the government made clear that Russia was not the only competitor for the project, Rosatom still appears as one of the strongest.

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On the other hand, in February 2015, the Egyptian president himself, Abdel Fattah al-Sisi, announced that Cairo and Moscow would cooperate to build the first nuclear power plant in the northern African country, which at that moment Putin was visiting in his official capacity. According to the memorandum of understanding signed on that occasion, the power plant will be built in the northern city of El-Dabaa, on the Mediterranean coast, west of the port city of Alexandria, where a research reactor has stood for years. Sergei Kiriyenko, the head of Rosatom, gave further details about the project. According to him the plant will have four reactors, each of which will produce 1,200 megawatts.

Davide Maggiore


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