The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $46.04 per barrel, WTI at $44.91 per barrel and natural gas at $2.70 per million BTU (end of day, November 17, 2016). Here are AOP’s top five stories from the last seven days.
Africa Oil to begin drilling in Kenya in December
Africa Oil Corp. and its partners, including Tullow Oil and Maersk, plan to drill up to eight exploration and appraisal wells in Kenya as part of an effort to improve financing prospects for field development and the construction of an export pipeline, according to a Reuters report. The pipeline project was originally planned to connect Ugandan oil fields and the Kenya South Lokichar Basin with the Indian Ocean coast, until Uganda decided to build its own pipeline via Tanzania. Now, the group is more dependent on their own resources to develop and finance the pipeline, and have announced the drilling program to firm up oil discoveries, said Africa Oil Chief Executive Keith Hill. The basin in northern Kenya is estimated to hold 766 million barrels of recoverable oil.
Standard Chartered backs power projects in East and Southern Africa
Standard Chartered has issued a $50 million loan to the Eastern and Southern African Trade and Development Bank (PTA Bank) to finance power projects as part of the Power Africa initiative launched by US President Barack Obama. The United States Agency for International Development (USAID) is acting as the loan guarantor, while Standard Chartered is the sole lender, coordinator and mandated lead arranger, according to GTR Review. While the beneficiaries of the deal have not been announced, PTA Bank is to funnel funding to power generation and energy access projects in East and Southern Africa over eight years.
Statoil: FID on Tanzania LNG still five years off
It will be at least five years before Statoil makes a final investment decision on the planned $30 billion Tanzania LNG plant, said Statoil’s Tanzania country manager, Oystein Michelsen, to Reuters. After FID, it would take another five years to build the plant, he said, adding that outstanding issues include a stable framework from the government, and clarity over local ownership requirements in some contracts. The project involves BG Group – recently acquired by Royal Dutch Shell – and Statoil, ExxonMobil, Ophir Energy and the state oil and gas company Tanzania Petroleum Development Corporation.
UK: East Africa holds opportunities
The UK is well-placed to help East Africa develop its gas resources, said British High Commissioner Nic Hailey at the 4th East Africa Oil and Gas Summit this week in Nairobi, according to Rigzone. Hailey cited British experience in the North Sea and the number of UK companies involved in designing, financing and implementing oil and gas projects across the world, as well as the number of British companies and organizations already working in East Africa, such as Tullow Oil. “Major gas reserves in Tanzania and Mozambique. Substantial deposits of crude oil in Uganda and Kenya. The opportunities are huge. Now is the time to look to the hard lessons learned elsewhere and ensure the benefits are widely felt,” Hailey said.
Eskom CEO resigns, faces charges after corruption allegations
Eskom, the South African state electricity company, is embroiled in scandal as allegations of corruption circulate since the publication of the ‘State of Capture’ report by the Public Protector two weeks ago. Brian Molege, CEO of Eskom, resigned last week week and board member Mark Pamensky announced his resignation this week. The Democratic Alliance (an opposition political party) announced Thursday it would lay criminal charges against Molege. The report raises questions over coal deals between Eskom and the Gupta family, which has close ties with President Jacob Zuma. The president denies wrongdoing, though the report calls for a judicial inquiry into the allegations of corruption in the government.
Photo credit: Joseph Kariuki