The Buzz: This Week in Africa
At the beginning of the week, Brent Crude is trading at $68.14, WTI at $63.43 and natural gas at 2.68 per million BTU (at 11:07, 3 April 2018, South Africa). Here are AOP’s top five stories from the last seven days.
Oil Prices Continue to Fall Amid U.S./ China Dispute
Oil prices continue to fall this week as a result of the ongoing trade dispute between the U.S. and China.
The trade dispute between the two countries began after U.S. President Donald Trump signed a memorandum that would impose billions of dollars in levies on imports from China.
The tension between the economies has since intensified, with China increasing its tariffs up to 25 percent on 128 U.S. products.
As a result, oil prices dropped with Brent Crude trading at $68.14, having started the week last week at $70.34. Western Texas Intermediate is at $63.43 having traded at $65.61 last Monday.
Eskom Can Now Sign 27 Renewable Energy Contracts
South Africa’s national utility Eskom will be able to sign 27 renewable energy independent power project contracts following a High Court ruling last week. The Gauteng High Court in Pretoria struck down an application by the National Union of Metalworkers of South Africa and Transform RSA to halt the process of signing the agreements.
On March 12, the night before the set date to sign the power purchase agreements on the 27 renewable energy projects, the unions had obtained an interdict from the High Court to stop from the process from taking place.
The obtaining of the urgent interdict came after the Minister of Energy, Jeff Radebe’s announcement that the PPA’s would be signed despite the two-year delay imposed by power utility, Eskom.
The Minister of Energy welcomed the ruling that would allow the projects to proceed.
$1bn Renewable Energy Facility for sub-Saharan Africa
The African Trade Insurance (ATI) and European Investment Bank (EIB) have launched a $1 billion renewable energy facility for sub-Saharan Africa.
Supported by the government of Germany and the EU, the facility was launched at the Berne Union Spring hosted by ATI and supported by the Kenyan government.
Under the Sustainable Energy for All initiative, the investment project will improve energy access, reduce costs and enhance the deployment of renewable energy. Furthermore, the development of these projects will not only benefit consumers, but will also serve as reassurance of the growth the African energy sector to potential investors.
More Oil Potential in Offshore Senegal
Australian oil and gas exploration company, FAR Ltd and its partners have completed a geotechnical study of their assets in offshore Senegal including the SNE discovery, which is expected to reach FID in 2019.
The study revealed a further 198 million barrels in the area, and with a successful 11 wells drilled to date. The revision of the undrilled prospects revealed the potential for more discoveries in offshore Senegal.
The SNE and the FAN-1 wells were the first to be drilled in deep water offshore Senegal and have since resulted in the area attracting investment interest.
$48.04 billion for Nigerian Oil and Gas Projects
In its latest report, data and analysis company, GlobalData projected that Nigeria accounts for $48.04 billion of total capital expenditure (CAPEX) in upcoming African projects from 2018 to 2025.
According to the report, Nigeria has 24 announced and planned oil projects that will occur over the next few years. Among these fields are the ultra-deepwater Zabazaba-Etan, the deepwater Bonga North and the deepwater Bonga Sputhwest/Aparo.
The GlobalData report also showed 93 upcoming oil and gas projects in Africa that will require $413 billion in CAPEX to produce over 13.416 MMbbl of crude oil and 184 tcf of gas.