The Buzz: This Week in Africa
At the beginning of this week Brent Crude is trading at $69.60 per barrel, WTI at $65.43 and natural gas at $3.45 per million BTU (at 17:30 29 January 2018 in South Africa). Here are AOP’s top five stories from the last seven days.
Nigeria Investigates Brass LNG for Corruption
The Nigerian Senate has launched an investigation against the Nigerian National Petroleum Corporation’s Brass LNG project, which has been in the planning stages for over ten years. The project raised suspicion after some of its partners withdrew. The Nigerian Senate will investigate questions of misuse of government funds. Senate documents show that $648 million was deposited into the Brass LNG bank account in 2016. The current balance is $137 million.
The Senate voted on Wednesday to conduct the investigation, according to a Reuters report. Brass LNG was incorporated in 2003 with a 49 percent interest held by NNPC and Conoco Phillips, Eni and Chevron holding 17 percent each. Chevron and Conoco Phillips dropped out of the project and Total reportedly took an unknown stake in the project in 2008.
Total Commits to Kenya Pipeline, Buys Maersk Oil Assets
The Kenyan government has announced that Total will farm into Kenyan exploration and production blocks through a purchase of Maersk Oil’s shares in blocks 10BA, 10BB and 13T. The office of President Uhuru Kenyatta also said that the French super-major supported a pipeline from Lokichar in the north-west of Kenya to the Indian Ocean coast at Lamu, according to Reuters.
Total has an acreage position in neighbouring Uganda and has already committed to a Uganda-Tanzania pipeline to evacuate oil from its Lake Albert project. In buying Maersk Oil’s interests and partnering with Tullow Oil and Africa Oil on the three blocks, Total gains access to Kenya’s 750 million barrels of recoverable reserves.
Production is expected to begin in 2021. The new pipeline is estimated to cost $2.1 billion.
SDX Strikes Gas in Morocco
SDX Energy Inc. has made a gas discovery in its ONZ-7 development well in the Sebou permit in Morocco.
The well was drilled to a depth of 1,167 meters and encountered five meters of net conventional natural gas pay in the Hoot formation. SDX used its own high-resolution 3D seismic data. ONZ-7 is one of nine wells planned by SDX, and the fourth out of five drilled so far to make a discovery.
London AIM-listed SDX entered Morocco in January 2017 after acquiring the assets of Circle Oil.
NNPC Ordered to Clear Fuel Queues
The Nigerian Senate has issued an ultimatum to the Nigerian National Petroleum Corporation (NNPC) to clear the queues at filling stations within seven days.
After meeting with Senator Karibu Marafa, Senator for Zamfara Central, the NNPC said the reason for the queues was the supply gap and high smuggling rates across the border. Senator Marafa and the committee urged the Nigerian Customs Service to be wary of the smuggling of petroleum at Nigerian borders and directed the Department of Petroleum Resources to increase price control and monitoring efforts to manage the escalating issue.
IFC Finances Gas Power Station in Mozambique
The International Finance Corporation (IFC) announced last week that it is providing the final tranche of financing for a 175 MW gas-fired power station in Mozambique, the Central Térmica de Ressano Garcia (CTRG).
The CTRG was commissioned in 2015 and is the country’s first gas power plant to reach commercial operation. It provides power to Mozambique’s national power utility EDM under a 20-year purchase agreement. It is owned by EDM and Sasol, which provided bridge financing.
IFC provided a $55-million loan, which was augmented by an additional $42 million syndicated loan from the Emerging Africa Infrastructure Fund and FMO. This represented the conclusion of project financing for the CTRG.