The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $54.56 per barrel, WTI at $51.72 per barrel and natural gas at $3.30 per million BTU (beginning of day January 20, 2017). Here are AOP’s top five stories from the last seven days.
Kenya electrification campaign taking off
Kenya is surpassing expectations for electrification, with a new report showing the East African country is taking half the time it took the United States to achieve full power availability for its people.
The US took twenty years to connect rural areas to the national grid, while Kenya is on track to do that in just seven years, according to a report by Quartz Africa. In just two years, Kenya raised its electrification ration from 27 percent in 2013 to 55 percent in 2015, lighting up 1.3 million households in 2015 alone.
Kenya is aiming for 95 percent access by 2020, and is using all methods to get there, inviting the private sector to join the push and utilizing all available forms of energy, including gas, geothermal and wind power.
Rumored: Shell to sell Gabon assets to Carlyle Group
Reports on Royal Dutch Shell’s planned divestment of its onshore assets in Gabon indicate the oil major could sell its $700 million in assets to private equity fund Carlyle Group, according to Nasdaq. The sale is expected to be finalized this month. Reuters reports bidders also included European independent Perenco.
Shell is making global divestments of as much as $30 billion after acquiring BG Group in February. Nasdaq reports that Shell stock has outperformed others in the oil and gas industry, gaining 24.6 percent in a year-to-date report.
The company’s Gabon’s staff of 400 workers announced strikes last week, as they push to be retained by the buyer of the company’s assets.
Ghana’s Offshore Cape Three Points project gets another backer
Another financial backer is joining Ghana’s Offshore Cape Three Points Project, with Britain’s credit export agency, UK Export Finance, singing a direct loan deal on Monday to provide $310 million.
The $7.9 billion project being developed by Eni, Vitol Ghana Upstream and the Ghana National Petroleum Corporation will use offshore gas resources to feed power plants in Ghana. The loan from UK Export Finance will go to GE Oil & Gas to supply equipment. GE won the $850 million contract to supply the equipment for the Offshore Cape Three Points Project in 2015. The project is expected to peak at a daily production of 80,000 boepd in 2019, and ease pressures on Ghana’s power generation.
Tullow strikes again in Kenya
Tullow Oil made an oil discovery in northern Kenya in onshore Block 13T, according to a company press release. The Erut-1 well, drilled at a depth of 1,317 meters, discovered a gross oil interval of 55 meters with 25 meters of net oil pay at a depth of 700 meters.
Tullow is the operator of Block 13T and Block 10BB with a 50 percent stake, and is joined by partners Africa Oil Corp, with a 25 percent stake, and Maersk Oil, also with 25 percent. The results of the well have “de-risked” the unexplored northern area of Etom, which “will now be considered in the Partnership’s future exploration and appraisal drilling programme”.
Cairn Energy to focus on Senegal
UK-based Cairn Energy has earmarked the majority of a $125 million exploration and appraisal budget for operations in offshore Senegal, according to Upstream. Two wells are to be drilled in the SNE oil discovery, with the third phase of drilling beginning this month. The company has lined up the Stena DrillMax ship for the two wells. Cairn is also in the process of selecting additional exploration and appraisal wells at SNE.