The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $54.09 per barrel, WTI at $51.20 per barrel and natural gas at $3.72 per million BTU (beginning of day, December 09, 2016). Here are AOP’s top five stories from the last seven days.
Nigeria, Morocco ink deal for Africa-Europe gas pipeline
Nigeria and Morocco agreed this week to jointly develop a natural gas pipeline from Africa to Europe, in a drive to boost production across West Africa and attract international investors. The 4,000 kilometer pipeline is planned to run along the West African coast from Nigeria to Morocco and will be developed by the countries’ sovereign wealth funds. The final route has yet to be decided. The agreement was signed during a visit by King Mohammed VI of Morocco to Nigeria. The Trans-African Pipeline is expected to improve energy access across West Africa, and address issues with development and exports to Europe, the two governments said.
Mozambique changes gas contracts, accelerates LNG development
In a bid to reach FID on multi-billion dollar gas projects planned in Mozambique, the country’s cabinet has approved changes to contracts with Anadarko and Eni, allowing the companies to sell the government’s share of LNG from the projects. The aim of the government forfeiting its rights to sell available gas and to the gas production tax, according to government spokeswoman Ana Coana, is to make the projects viable. The government will receive its share of gas in cash, rather than in kind.
In total, the project to develop gas reserves in two offshore blocks and process it at an onshore LNG plant is expected cost around $37 billion. In exchange for the deal, the companies commit to a joint-sale of LNG to offer better prices for the market, Coana said in a CNBC Africa report. Eni’s project is expected to reach FID this year, and Anadarko’s is expected to reach FID in 2017.
Oil flows at Otakikpo marginal field in Nigeria
Oil has flowed from the Otakikpo marginal field in Nigeria, announced Nigeria-based company Lekoil this week. Lekoil, the technical partner, along with block operator Green Energy International, will transport the oil to an export terminal upon completion of an offshore pipeline. The companies hope to produce 10,000 barrels of oil per day. Currently, the oil is being stored in onshore tanks. The offshore pipeline leading from the storage tanks to the tanker are 80 percent complete. Otakikpo was discovered in 1980 and lies approximately 60 kilometers south east of Port Harcourt in a coastal area.
Sinopec-Sonangol JV to be terminated in São Tomé
A Sinoangol and Sinopec concession agreement in São Tomé and Príncipe has been terminated by the country’s National Petroleum Agency (ANP) because of breaches and violations of the contract. Among the grievances listed by ANP was Sinoangol not providing the government with “information regarding the amount received from the transfer of 30 percent of participatory interest in block 2 that occurred on March 31, 2014,” said ANP Director Pontes. Neither Angola’s Sonangol nor China’s Sinopec have commented.
Egypt accepts six bids for oil and gas blocks
Egypt has accepted six bids on oil and gas blocks out of 11 blocks put up for bidding in May. The investment of the accepted bids from the internal tender totals $200 million, according to the Ministry of Petroleum. Royal Dutch Shell, BP, Apache Corp and Apex are among the successful companies. the ministry announced. The blocks are located in the Western Desert and the Gulf of Suez.