The Buzz: This Week in Africa

At the close of this week Brent Crude is trading at $51.75 per barrel, WTI at $49.11 per barrel and natural gas at $3.20 per million BTU (beginning of day 26 May 2017). Here are AOP’s top five stories from the last seven days.

Uganda, Tanzania sign oil pipeline agreement

Uganda and Tanzania have finalized an agreement to build the East African Crude Oil Pipeline, with Ugandan President Yoweri Museveni and Tanzanian President John Pombe Magufuli Museveni singing the agreement on Sunday, according to The Monitor.

The agreement, vital to Uganda commercializing its massive oil discoveries at Lake Albert, comes a year after the Government of Uganda switched the pipeline route from Kenya’s Port Lamu to Tanzania’s Port Tanga.

The 1,402-kilometer pipeline will transport crude oil from Hoima to Tanga Port.

Equatorial Guinea Joins OPEC

Equatorial Guinea became the fourth Sub-Saharan country to join the Organization for Petroleum Exporting Countries this week, and is now the cartel’s fourteenth member.

H.E. Gabriel Mbaga Obiang Lima announced the country’s application to join OPEC in January Admittance to the cartel comes after Equatorial Guinea committed with 11 non-OPEC members in December to reduce oil output to stabilize the petroleum markets.

“Equatorial Guinea’s joining of OPEC is a triumph. This is a proud moment for us,” said H.E. the Minister at the meeting. “There has never been a more important time to stand together and it is our honour to stand with OPEC as a positive force in global energy. We will use this platform to advance the interests of all African oil and gas explorers and producers and all OPEC members.”

Also at the OPEC meeting in Vienna, the cartel agreed to extend oil supply cuts for another nine months into 2018 to end the supply glut that has dramatically lowered oil prices since 2014.

OPEC agrees to extend production cuts, oil prices trading higher 

On Thursday 25th of May, the European trading oil prices were higher for the fifth consecutive week. U.S. crude futures fell by 3.8% to $49.41 at 1:08PM ET (17:08GMT), while Brent oil sank 3.54% to $52.05.The U.S. Energy Information Administration report for Wednesday 24th May showed a weekly decline in crude oil inventories for the seventh time in a row by 4.4 million barrels in the week ending May 19, whereas market analysts expected a decline of 2.4 million barrels.

After a lengthy discussion in a meeting held On Thursday 25th of May by OPEC/non-OPEC members, including Russia in Vienna, they agreed to extend output-cuts for another nine months with the expected supply target being met at the end of 2017. OPEC president and Saudi Arabia’s energy minister Khalid Al-Falih said the 9 months extension was made simply to “avoid the typical seasonal stock build”. Thus far, the previous production-cut agreement had little impact on global inventory levels as a result of the constant rise in U.S shale oil output.

The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. See the full report here and learn more about Gladius Commodities at www.gladiuscommodities.com.

Nigeria Senate Passes Petroleum Industry Governance Bill

The Petroleum Industry Governance Bill, part of a larger reform of the Petroleum Industry Bill, passed through Nigeria’s Senate yesterday, but still has to clear the House of Representatives, according to Reuters.

The Petroleum Industry Bill (PIB) has been long-awaited by the Nigerian petroleum industry, since the reform was first introduced a decade ago. The governance bill addresses key issues like accountability and transparency. The PIB was broken up into several pieces in order to speed up the process.

Power Africa Launches SADC Electricity Access Project

Power Africa, the U.S. Agency for International Development’s initiative to support power projects in Africa, has launched a new five-year project to increase the supply and access to electricity in the Southern Africa Development Community, according to ESI Africa.

The project, Southern African Energy Program, brings together a consortium to improve access, including Deloitte, McKinsey, Another Option, CrossBoundary and Worley Parsons.

Since its launch in 2013, Power Africa has helped 62 power projects in Africa reach financial close for a total of 6,692 MW.

Nigeria expected to hit 2.2 million barrels per day in June

After briefly losing the top spot as Africa’s No. 1 oil and gas producer to Angola in 2016, Nigeria is now on track to reach 2.2 million barrels of oil per day by the end of June, according to Reuters.

The country’s oil output fell drastically in 2016 to just over 1 million barrels per day, due to attacks on oil installations in the Niger Delta region. The government has since made negotiations with the militancy and increased security in the region a top priority, and production has begun to increase.