The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $56.30 per barrel, WTI at $53.89 per barrel and natural gas at $3.35 per million BTU (beginning of day January 27, 2017). Here are AOP’s top five stories from the last seven days.
Equatorial Guinea wants to join OPEC
As Africa’s third largest oil producer, Equatorial Guinea has an important role to play in the mission of The Organization of the Petroleum Exporting Countries (OPEC) to provide petroleum to global markets and keep prices stable in the future, says Equatorial Guinea’s Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima.
The minister announced this week Equatorial Guinea is submitting its application to join OPEC, and, in an interview with Africa Oil and Power, highlighted the benefits the small West African country can bring to the table. Equatorial Guinea’s production figures are on par with Gabon’s, which rejoined OPEC in July 2016.
Nigerian lawsuits against Shell cannot be heard in London
In a blow to Nigerians affected by oil pollution, a British high court ruled this week that Nigerian communities impacted by oil spills cannot sue for the damages in the UK, according to The Guardian.
Shell has denied liability for the spill, and also argues the case should be heard in Nigerian courts. The communities, which argue the case will not be fairly tried in Nigeria, sought to have their claims filed in the UK, which would set a larger precedent for UK-based corporations to be sued on home turf for their actions abroad.
The lawyers representing the Nigerian communities — 2,000 families in the Bille kingdom and about 40,000 people from the Ogale community — said they will appeal the ruling.
US shale casts shadow over OPEC deal
Trading in oil and gas was “extremely slow” Friday morning, according to a Reuters report. Traders argued that increasing U.S. production and U.S. producers hedging via futures was offsetting the efforts by the Organization of the Petroleum Exporting Countries (OPEC) and 11 non-OPEC members to slash production, said Jeffrey Halley, a senior market analyst at OANDA, told Reuters.
As the oil price slowly rebounds— coming up from a low of $28 per barrel at the start of 2016 — US shale production is quickly making a comeback, with production rising by half a million barrels per day since mid-2016, coming to 8.96 million bpd.
In a forecast by Barclays Bank, prices for Brent and WTI crude are not expected to rise above $55 per barrel for the first quarter of 2017.
Libya aims for 1.25 million bpd production in 2017
Libya is aiming to increase production from its current 650,000 barrels per day to 1.25 million barrels per day in 2017, said the National Oil Corporation chairman Mustafa Sanalla in an interview with Upstream. A larger target of reaching 1.6 million bpd, the production output under Muammar Gaddafi, will not be achieved until 2022.
The goal is steep, as the country’s production shrank to less than 300,000 bpd in 2016. Libya, an OPEC member, was exempt from recent production cuts by the bloc because of the country’s continued struggle to boost production after years of internal conflict.
Nigeria seizes Shell, Eni block
In an anti-corruption case, A Nigerian court has issued orders for the temporary forfeiture of assets and transfer of operations of oil prospecting license (OPL) 245, owned by majors Shell and Eni, to the Nigerian government, according to Reuters.
The move is part of a corruption investigation into how Shell, Eni and the other partners acquired OPL 245 in 2011, with concerns over “acts of conspiracy, bribery, official corruption and money laundering,” according to the court papers. The block could hold up to 9.23 billion barrels of oil.