The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $51.38 per barrel, WTI at $50.43 per barrel and natural gas at $3.14 per million BTU (end of day, October 20, 2016). Here are AOP’s top five stories from the last seven days.
2017 oil prices are looking up, says World Bank
OPEC members agreed they may limit oil production in an effort to drive up prices, and the World Bank on Wednesday raised its 2016 price forecast from $53 per barrel to $55. Additionally, said the bank in its Commodity Market Outlooks report, energy prices are expected to jump 25 percent overall in the next year. Despite the forecast for potentially higher prices, the World Bank cautions that the October report does take into account OPEC’s tentative commitment to limit production. Such talks have thus far proved ineffective, especially as non-OPEC producers, such as US shale producers, are not bound to any agreement.
Nigeria battles to rebound
Nigeria is expecting to boost oil output by 22 percent by the end of the year, said Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu on October 17, 2016, in New Delhi. The news came as the Minister also announced Nigeria has a “cashflow problem” and that his country is likely to sign a $15 billion deal with India. The two countries have identified areas of interest for investment including exploration and production, refineries and fuel marketing. Even as Nigeria battles low prices, vandalism and terrorism, government officials and the private sector are working to boost oil production and attract investment into the burgeoning gas and power sectors.
Drilling campaign underway in Tanzania
Solo Oil announced Tuesday that site preparations for the Ntorya-2 appraisal well in Tanzania were completed, and that mobilization of the Caroil 2 rig has commenced. The well should spud in December 2016. Ntorya-2 follows the successful drilling of Ntorya-1 well, just 1.5 km away, which tested at 20.1 million scf gas per day and 139 barrels per day condensate. Aminex operates the Mtwara license, with a 75 percent stake, with Solo as a 25-percent interest holder. If all goes to plan, the partners will be able to apply for a production permit for the coastal license area.
ExxonMobil sells stake in Nigeria retail operation
ExxonMobil is eyeing a partial exit from Nigeria’s retail market and is attempting to sell a 60 percent share of its local fuel retail operation, Mobil Oil Nigeria, to Nipco Investments, pending the approval of the Nigerian Stock Exchange. Nigeria has seen major shakeups in the oil and gas industry this year. In April, the OPEC member was overtaken as Africa’s top oil producer by Angola. Ongoing attacks in the Niger Delta are forcing officials to be very cautious with new projects, and the destruction of pipelines and other infrastructure has resulted in revenue and production losses.
Madagascar hits pause on bidding round
Madagascar, which was planning to launch tenders for 40 offshore blocks next year, will wait until the oil and gas price environment is more stable before launching a bidding round, according to a statement by the Office of National Mines and Strategic Industries on October 13. The nation is poised for oil-driven growth, with the Tsimiroro field estimated to contain 1.7 billion barrels in reserves.