The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $50.88 per barrel, WTI at $48.05 per barrel and natural gas at $3.04 per million BTU (beginning of day 24 March 2017). Here are AOP’s top five stories from the last seven days.
Shell sells Gabon assets to private equity group
Royal Dutch Shell has reached an agreement with Assala Energy — a company set up by Carlyle group — to sell its onshore production assets in Gabon for $1 billion. Under the agreement, Assala will pay Shell $587 million and assume $285 million in debt, according to the Financial Times. Further payments will depend on commodity prices and production performance.
The deal is part of a larger divestment strategy by Royal Dutch Shell to reduce its debt after its acquisition of BG Group. Assala Energy was created by Carlyle Group, an American multinational private equity, to invest in Sub Saharan African.
CNOOC wants Tullow Oil’s Uganda shares
CNOOC has officially announced its interest in Tullow Oil’s stake in Lake Albert, after the British firm announced its intention to sell two-thirds of its shares in the country to Total for $900 million.
Exercising its preemption rights under the joint operating agreements between Tullow Oil, Total and CNOOC, CNOOC hopes to acquire 50 percent of the shares being transferred to Total under the same terms and conditions, according to a company statement. Before the announcement of the farm-down, each company — Tullow Oil, Total and CNOOC— held 33.33 percent interest in blocks 1, 1A, 2 and 3A in Uganda. The initial farm-down agreement, however, had Tullow transferring 21.57 percent of its shares in each block to Total.
Equatorial Guinea, South Sudan to cooperate on oil
The governments of Equatorial Guinea and South Sudan signed a bilateral agreement this week to cooperate on oil and gas activities, especially in exchanging information on the development of local content and gas monetization initiatives. The agreement will also see Equatorial Guinea hosting training for petroleum workers from South Sudan.
The deal was signed in Juba by Equatorial Guinea’s Minister of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang Lima and South Sudan’s Minister of Petroleum H.E. Ezekiel Lol Gatkuoth.
Algeria aims to boost crude production by 14 percent
Algeria’s state-run oil company Sonatrach plans to invest $50 billion — including $9 billion in new exploration activities — to boost oil production by 14 percent, according to Bloomberg. Sonatrach Group will search for new oil and gas opportunities between now and 2021, and plans to drill an average of 100 wells per year.
The company hopes to reverse a trend of declining oil output. Monthly output has averaged 1.04 million barrels per day this year, compared 1.15 million barrels per day in 2015.
China’s Sinopec invests $1 billion in South Africa assets
China Petroleum & Chemical Corporation (Sinopec) plans to buy Chevron Corp’s 75 percent stake in South African assets for $1 billion. The deal includes Chevron’s interest in a 100,000 barrel-per-day oil refinery, a lubricants plant and 820 petrol stations, according to Reuters. It also includes Chevron’s subsidiary in Botswana. The remaining shares will stay in the hands of local shareholders.