The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $51.66 per barrel, WTI at $48.49 per barrel and natural gas at $3.01 per million BTU (beginning of day 14 August 2017). Here are AOP’s top five stories from the last seven days.
Uganda Selects Western Consortium to Build Refinery
The Ugandan government has selected the Albertine Graben Refinery Consortium — made up of General Electric Co., Yaatra Ventures LLC, Intracontinental Asset Holdings Ltd. and Saipem SpA — to build and operate the country’s first refinery.
The selection comes amid controversy, however, with a Chinese-backed consortium alleging in a formal complaint to the government that they were the best bidder and hinting at possible corruption in the deal. The Chinese consortium was made up of Guangzhou DongSong Energy Group Ltd, Guangdong Silk Road Fund, China Africa Fund for Industrial Cooperation, China Petroleum Engineering and Construction Corporation and the East Design Institute, according to The Observer.
The dispute could slow down progress on the $4 billion refinery project, slated to refine 60,000 barrels of oil per day from the Lake Albert Development in the Hoima region.
Cairn Energy Sees Exploration Success Offshore Senegal
UK-based Cairn Energy drilled another successful exploration well, with the SNE North-1 well hitting oil and gas in the primary objective and oil in the secondary objective, in a separate accumulation to the SNE field, according to a company press release.
“The well result has positive implications for further hydrocarbon potential to the north of the structural trend containing the SNE field and SNE North-1 discovery well, as well as for broader exploration potential in the permit,” the press release noted.
The well was drilled to a depth of 2,837 meters using the Stena DrillMax ship.
Tullow Oil Explores Zambia
UK-based Tullow Oil began exploring for oil and gas in Zambia last week. The southern African country does not produce oil or have any recent discoveries under its belt, though it is the continent’s No. 2 copper producer, according to Reuters.
Tullow Oil is exploring in the northern and Luapula provinces in an exploration plan that could take between two and 10 years; a development timetable, if oil is found, of 3 to 10 years and production schedule of 20-50 years.
“With Tullow’s exploration credentials, I can confidently say that if there is any oil to be found in this area of Zambia, Tullow will find it,” said Tullow Executive Vice President Ian Cloke
Dangote-Black Rhino to Build Solar Plant in Nigeria
Nigeria-based Dangote Industries Limited and investment firm The Black Rhino Group signed a Memorandum of Understanding last week to build a 100-megawatt solar plant in northern Nigeria, in the city of Kano, according to Business Daily.
Development of the $150 million, state-of-the-art power generation facility could start before the end of the year, if plans progress according to schedule.
AfDB Retains ‘AAA’ Rating
Despite the economic turmult felt across the African continent in recent years, Fitch Ratings has confirmed that the African Development Bank — a key lender in energy and infrastructure projects in Africa — has maintained a ‘AAA’ bond rating and has a stable outlook, according to a press release.
However, the ratings agency also cautioned AfDB on a high rate of lending.
“AfDB’s capitalisation is strong, but declining, as a result of the rapid growth in lending,” the press release said. “The bank’s equity-to-asset ratio decreased to 23% in 2016 from 27% in 2015, and based on the current trend, is projected to decline further in the coming years, although AfDB is still receiving annual installments from its 2010 capital increase. “