The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $57.80 per barrel, WTI at $52.12 per barrel and natural gas at $2.99 per million BTU (beginning of day 23 October 2017). Here are AOP’s top five stories from the last seven days.
Tanzania LNG Dreams Appear Stalled
Despite signing a draft agreement earlier this year to kick start Tanzania’s $30 billion LNG facility, a final investment decision faces continued delays as the government and investors negotiate the legal terms, according to the Tanzania Daily News.
The Government of Tanzania passed new legislation over the summer that allows the government to force mining and oil and gas companies to renegotiate existing contracts. The new law is reportedly stalling the viability of the $30 billion deal. Statoil, Royal Dutch Shell, Exxon Mobil and Ophir Energy plan to build an onshore LNG terminal to commercialize sizable offshore gas discoveries. Statoil Legal Officer, Edward Kateka, reported to the Daily News that the negotiations center around the new legislation.
African Petroleum Fights for Gambian Acreage
In an escalating row over African Petroleum’s acreage offshore The Gambia, the Oslo-based oil and gas explorer has requested arbitration from the International Centre for the Settlement of Investment Disputes, according to Offshore Magazine.
The Gambia has claimed that African Petroleum no longer has interests in Blocks A1 and A4, after failing to comply with contract commitments. The government included Blocks A1 and A6 in an open bidding round announced earlier this year.
“Despite the formal commencement of this process, we reiterate that we remain wholly open to engaging in constructive dialogue with the Gambian authorities with a view to establishing a satisfactory solution that is in the interest of all parties,” said African Petroleum CEO Jens Pace.
Angola’s Sonangol Cuts Debt
Isabel Dos Santos, chair of Sanongol, announced last week that Sonangol has successfully cut debt in a continuing campaign to stabilize the national oil company’s position, according to Reuters.
Dos Santos reported the company had slashed $3 billion in debts, and said newly-elected president João Lourenço is on board with continuing efforts to reduce debt. The state firm is heavily indebted to Chinese banks, but the exact figure is unknown. Some estimates indicate the debts owed to Chinese entities is $25 billion.
Kosmos Energy To Sign PSCs with Equatorial Guinea
The Ministry of Mines and Hydrocarbons of Equatorial Guinea and Kosmos Energy have signed Memorandums of Understanding outlining Production Sharing Contracts for Blocks EG-21, S and W offshore Rio Muni, Kosmos’ first PSCs in the country, according to a news release.
The PSCs for the blocks are based on Equatorial Guinea’s model PSC, and stipulate minimum work programs that comprise a first exploratory period of three years, which include acquiring seismic data; a second exploratory period of two years, which includes drilling an exploratory well; and the possibility of two one-year extensions, which include requirements to conduct seismic interpretation and drill another exploration well, respectively.
Nigeria Considers Reviewing NNPC Appointments
President Muhammadu Buhari is considering reviewing top appointments at the Nigerian National Petroleum Corporation, after allegations of violations of due process in the handling of $25 billion in oil contracts was called to attention by the Minister of Petroleum, Dr. Ibe Kachikwu, according to This Day.
A senate ad hoc committee investigating the allegations is also focusing on alleged preferential treatment of Duke Oil, a subsidiary of NNPC, despite being incapable of fulfilling the contracts in question.