The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $52.42 per barrel, WTI at $49.55 per barrel and natural gas at $2.86 per million BTU (beginning of day 31 July 2017). Here are AOP’s top five stories from the last seven days.
Wood Mac: Upstream FID on Track to Double in 2017
Final Investment Decisions are set to double from 2016, according to a new report by Wood Mackenzie, “A Big Year for FIDs: 2017 Marks a Turning Point.”
The report expects 25 upstream projects to reach FID this year, compared to just 12 in 2016. This year has already seen major projects, including Mozambique’s Coral FLNG, reach FID. In fact, at total of 15 projects reached project sanctions in the first half of the year — totaling 8 billion barrels of oil equivalent in reserves. In contrast, the 12 projects approved in 2016 equaled just 8.8 billion boe of reserves.
Oil Could Boost Uganda Economy
The International Monetary Fund predicts that Uganda’s oil reserves could account for 4 percent of its overall economy if the resources are developed and managed well, according to an IMF blog post written by IMF Mission Chief for Uganda Axel Schimmelpfennig.
“In our estimates the revenues could range on an annual basis from about 0.5 percent GDP initially to about 4 percent at peak production,” said Schimmelpfennig. “The challenge that many oil producers face is to manage this well.”
Production is expected to start in 2020, after years of delays. Oil was initially discovered at Lake Albert in 2006, with estimated reserves of 6.5 billion barrels of oil. A lack of infrastructure, such as pipelines, has been a key factor in delaying production.
Boko Haram Attacks Oil Team, Kills 48
Boko Haram attacked an oil exploration team in Nigeria last week, reportedly killing at least 48 people, including workers from the state-owned oil firm, Nigerian National Petroleum Corp, according to Bloomberg.
NNPC has been working to boost exploration outside the Niger Delta region. The team, comprised of 18 soldiers, 15 local vigilantes, five geologists from the University of Maiduguri, four drivers from NNPC and six other people, was exploring in the Lake Chad basin.
South Sudan Cracks Down on Illegal Fuel
South Sudan President Salva Kiir is fighting back against the illicit fuel trade, which his administration claims is driving up fuel prices and causing a fuel crisis in Africa’s youngest country.
The state has ordered Nilepet, the state-owned oil company, to stop issuing individual licenses to fuel tankers, according to The East African. The country is also creating a task force to crackdown on the fuel dealers to stabilize prices. The regulated price for one liter of petrol is $0.18, but fuel costs $7.2 on the black market.
Halliburton Pays $29.2 million to Resolve Angola Corruption Case
U.S.-based Halliburton settled a corruption case with the US Securities and Exchange Commission over claims that the company violated an anti-corruption law in connection to payments made to an Angolan company.
Halliburton agreed to pay $29.2 million, which includes the $14 million Halliburton reportedly profited from in the corruption case, plus a $14 million penalty and $1.2 million in interest, according to the Financial Times. Additionally, Halliburton agreed to hire an independent compliance contractor to monitor its procedures in Africa.