The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $55.24 per barrel, WTI at $49.54 per barrel and natural gas at $3.07 per million BTU (beginning of day 18 September 2017). Here are AOP’s top five stories from the last seven days.
Kenya Aims to Reduce Energy Loss
Kenya Power, which owns and operates most of the electricity transmission and distribution system in Kenya, is launching an effort with the International Finance Corporation (IFC), a department of the World Bank, to stem energy loss due to technical and commercials issues, according to ESI Africa.
Kenya Power claimed the energy losses in the 2016 financial year totaled 18.8 percent of the total, and 19.4 percent the previous year. The company is coordinating with the IFC’s Energy & Water Advisory department to identify solutions.
Nigeria Preps for Licensing Round
The Department of Petroleum Resources of Nigeria has announced the guidelines for the planned marginal oil field licensing round that will take place by the end of the year or in early 2018, according to This Day.
The bidding round is set to include 46 marginal oil fields, with a possibility of some fields being set aside for indigenous companies.
Armour Energy Snags Oil Exploration Contract in Uganda
Marking the first oil exploration contract signed from Uganda’s 2015 licensing round, Australia’s Armour Energy finalized a production sharing contract with Uganda for the Kanywataba block, according to Reuters.
The block, which lies in the Albertine rift basin, was previously explored by Total, CNOOC and Tullow Oil, but was handed back to the government in 2012 with no success. Oranto Petroleum, a Nigerian-based firm also announced as a winner during the licensing round, is expected to sign a contract in the coming weeks.
Nigeria Unlikely to Join OPEC Cuts Before 2018
Nigeria, which has been exempted from OPEC’s production cuts in the last two rounds, is unlikely to join the cuts anytime soon despite reports of increased production, according to the Premium Times.
The Organization of the Petroleum Exporting Countries initially exempted Nigeria and Libya because domestic instability had already greatly reduced each country’s oil output. Nigeria, however, has largely recovered in 2017. Still Oil Minister Emmanuel Ibe Kachikwu it is “very unlikely” Nigeria would join the cuts before they expire in March.
South Sudan Could End Oil Subsidies
Africa’s youngest country has been subsidizing the cost to buy fuel — which, in a country powered by generators, runs just about everything — and is projected to spend $183 million of its projected $820 million in oil revenue this year on the subsidies, according to Reuters.
But, as the country faces a budget deficit and reportedly hasn’t paid civil servants in months, the government is considering ending the subsidy. Parliament, which is concerned about backlash from the country’s poorest residents and civil unrest if the subsidies are scrapped, is considering the issue.