The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $63.22 per barrel, WTI at $57.73 per barrel and natural gas at $3.10 per million BTU (beginning of day 04 December 2017). Here are AOP’s top five stories from the last seven days.
Nigeria, Libya Join OPEC-led Oil Production Cuts
The Organization of the Petroleum Exporting Countries (OPEC) and key non-member countries, including Russia, agreed on a deal last week to extend oil production cuts through 2018. For the first time since the deal was initially approved in December 2016, Nigeria and Libya will be expected to adhere to the cuts. The countries had been exempted because of internal violence and political strife that had impacted oil production, but the countries have since seen a return to stability and a return to higher oil production.
This week, however, oil dropped below $58 per barrel with concerns that the deal will drive growth in the United States’ shale industry.
Kenya Offers Investors Cheap Electricity
Kenya is offering investors cheap electricity to industries near power generation plants. Kenya, which already has one of the highest power generation rates in Sub-Saharan Africa, is aiming to reduce the costs of power but cutting the costs of transmission by up to 60 percent, according to Business Daily.
Manufacturers who build in key areas, such as in Olkaria, known for its geothermal power capacity, will be rewarded with reduced tariffs.
“Industries should put up commercial or economic zones (near electricity generation zones) so that when power is generated, it is immediately given to these industries without additional costs that come with transmission and distribution,” said Ken Tarus, Managing Director of Kenya Power.
The country also recently announced tariff cuts of up to one-third for companies and manufacturers that operate at night, when demand is lower.
Tullow Oil Refinances Debt
Africa-focused Tullow Oil inked a $2.5 billion deal to refinance its debt through reserves based lending, after the resolution of the border dispute between Ghana and the Ivory coast landed in the company’s favor, according to the Irish Times.
The company is now free of material near-term debt maturities and “will enter 2018 in a strong financial position,” according to Tullow Oil’s Chief Financial Officer Les Wood.
ExxonMobil Eyes Mauritania
ExxonMobil is reportedly set to sign a deal with Mauritania to explore for oil and gas, according to a Reuters report. Mauritania’s Oil, Energy and Mines Director General Moustapha Bechir said the government and the oil major have agreed on terms for three blocks, though ExxonMobil has yet to sign the deal.
ExxonMobil has not commented.
Ethiopia Continues Mega Hydro Project, Despite Egypt Warning
Ethiopia is moving ahead with the Grand Ethiopian Renaissance Dam project, despite a warning issued by Egypt’s president, Abdel-Fattah el-Sissi last week on concerns that the Nile River-based dam will impact Egypt’s water supplies.
El-Sissi said “water is a matter of life or death” and “no one can touch Egypt’s share of water,” according to ESI Africa.
The dam is 60 percent complete, but activists are worried it will impact Egypt’s long-term water supply.