The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $52.22 per barrel, WTI at $49.32 per barrel and natural gas at $2.80 per million BTU (beginning of day 07 August 2017). Here are AOP’s top five stories from the last seven days.
NNPC Signs Financing Deals with Chevron, Shell
The Nigeria National Petroleum Corporation (NNPC) signed deals valued at at least $780 million with the local subsidiaries of Chevron and Shell last week in an effort to boost exploration and production and reduce gas flaring, according to the Daily Trust.
NNPC signed an alternative financing deal for the Sonam Project, a joint venture project between Chevron and NNPC that should deliver 215 million cubic feet of natural gas per day to the domestic market. Production is expected to come online this year, and the project will produce a total of 30,000 barrels of liquids per day.
NNPC also signed an alternative financing deal for the Santolina Project with Shell Nigeria to accelerate development of upstream production over 158 different development activities.
Construction Starts on Uganda-Tanzania Crude Pipeline
The Presidents of Tanzania and Uganda, President John Magufuli and President Yoweri Museveni, kicked off construction of the 1,445-kilomter crude pipeline by laying the foundation station in the port city of Tanga, Tanzania over the weekend, according to The East African.
The pipeline should be complete by 2020, and is a vital step in Uganda’s efforts to monetize its vast oil resources. The landlocked country first discovered oil reserves at Lake Albert in 2006, but has been unable to develop the resources. The $3.55 billion pipeline will transport crude from Kabaale, Uganda to Tanga Port, and is expected to move 216,000 barrels of oil per day.
West African Gas Pipeline to Extend to Cote d’Ivoire
The West African Gas Pipeline (WAGP), which current runs from Nigeria through Benin and Togo to Ghana, will be extended to Cote d’Ivoire, the Nigeria National Petroleum Corporation announced last week, according to Vangaurd.
The extension is meant to increase West African energy integration, and will expand much-needed gas infrastructure in the region. It also comes as Nigeria is boosting efforts to monetize its vast gas resources.
Dangote Industries Sees Opportunity in Oil Refining
The Group Executive Director of Dangote Industries, Devakumar Edwin, announced in an interview with African Business Magazine the conglomerate’s intention to invest in oil refining and processing.
“Another logic of our strategy is to go into businesses where there is a demand-supply gap. Following on from the construction and food production, our focus is on oil and gas. There is a huge demand for gas, diesel, kerosene, aviation fuel and the rest,” said Edwin in the interview.
“By refining oil locally, we not only satisfy the needs of the country by closing the demand supply gap, but we also make the economy stronger and more stable by reducing the need for foreign exchange,” he added.
Uganda Aims to be Leading Power Producer in Great Lakes Region
Uganda plans to use a competitive tariff system and “operational and investment efficiency” to attract investors to the country’s power sector, said Dr. Eng Harrison E. Mutikanga, CEO of the Uganda Electricity Generation Company (UEGCL), to ESI Africa.
Taking advantage of its membership in the Eastern Africa Power Pool and the regional demand for power generation, Uganda Electricity Generation Company aims to become the leading power producer for the Great Lakes Region. Another key strategy will be attracting concessional financing for new projects.