The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $55.90 per barrel, WTI at $52.94 per barrel and natural gas at $3.42 per million BTU (beginning of day January 13, 2017). Here are AOP’s top five stories from the last seven days.
New Ghana government nominates energy minister
Ghana’s new president is wasting no time in setting up his government. Sworn into office on Jan. 07, President Nana Akufo-Addo nominated 13 ministers on Wednesday, though they still need to be confirmed by parliament. Akufo-Addo also announced his plans to combine the ministries of petroleum and power, naming former investment banker Boakye Agyarko to lead the merged ministry.
Agyarko, a former vice president of the Bank of New York and a policy advisor for the president’s New Patriotic Party in 2016, has already stated his intention to end power outages in Ghana within the year.
Gabon oil minister jailed, replaced
Gabon’s former oil minister, sacked on Tuesday, was jailed Thursday night and was being held in a Libreville prison, according to news reports Friday morning. In a cabinet reshuffle announced Tuesday, Pascal Houangni Ambourouet replaced the jailed former minister, Etienne Dieudonne Ngoubou, as head of the Ministry of Mines, Petroleum and Hydrocarbons.
Ngoubou was arrested after an interrogation on Wednesday as part of inquiry into the management of oil funds, according to New Vision.
The arrest is part of an anti-graft crackdown and comes just days after a former economy minister and adviser to the president, Magloire Ngambia, was jailed pending trial for corruption.
Gabonese daily paper l’Union said, “No one is untouchable any longer in our country.”
Total expands stake in Uganda project
Total has taken over as the operator of the Lake Albert Development Project, buying up most of Tullow Oil’s stake in the Uganda project for $900 million, according to Reuters. The development is expected to produce around 230,000 barrels per day by the end of 2020. Total’s expanded stake, which includes $200 million in cash and $700 million to be used for future development, will bring fresh life to the project.
The deal raised cash-strapped Tullow Oil’s share values to their highest in 18 months and gives Total fresh reserves for development. Tullow has previously estimated development of the project at $5.2 billion.
Nigeria retakes top production slot in Africa
In new production reports released by OPEC, Nigeria has reclaimed its position as the top oil producer in Africa, after losing the title in early 2016 to Angola. Militancy attacks in the Niger Delta dragged Nigeria’s production down by about 700,000 barrels per day, dropping output to 1.677 million barrels per day against Angola’s 1.782 million barrels per day in mid 2016, according to a report by Hellenic Shipping News.
But the OPEC numbers released show that crude oil production rose slightly above Angola at the end of 2016, with Nigeria producing 1.782 million barrels of oil against Angola’s 1.688 million barrels by the end of the year. Angola is still expected to cut its production by about 78,000 barrels per day, while Nigeria is exempt from the OPEC-deal to cut production because of the militant attacks.
Oil strikes in West Africa
Nigeria and Gabon both felt the impact of oil strikes this week, as the Nigerian labor union threatened a three-day strike at Chevron and ExxonMobil fuel depots over layoffs of workers; and Shell workers in Gabon began an “unlimited” strike on Thursday, demanding job security for workers as Shell plans to sell its Gabon assets, according to various news reports.
The Nigerian strike was short-lived, with brief action conducted by workers at the Oleh crude oil flow station in the Niger Delta oil hub, saying they haven’t been paid. The three-day strike planned by the Nigeria Union of Petroleum and Natural Gas Workers, however, was suspended the day it commenced as the union and the government entered talks. The labor union criticizes the oil companies for sacking workers because of the price pressures on the industry.
In Gabon, the strike is ongoing, with workers demanding that all Shell Gabon employees be shifted to whichever company buys Shell’s assets as part of the sale agreement.