The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $55.77 per barrel, WTI at $53.15 per barrel and natural gas at $3.05 per million BTU (beginning of day 10 February 2017). Here are AOP’s top five stories from the last seven days.
Tanzania launches power master plan
Tanzania’s energy ministry launched a Power System Master Plan this week, which estimated the capital investment required for the power sector from 2016 to 2040 to be $46.2 billion, according to ESI Africa.
The plan states that 70 percent of capital spending will be financed by debt. The other 30 percent is expected to come from the government. Generation accounts for about 80 percent of that cost, while transmission and substations account for the other 20 percent.
Tanzania is aiming to increase its power generation capacity to 10,000 MW in the next ten years, compared to its current capacity of 1,500 MW. The master plan cites the country’s gas and coal resources as main sources for power generation.
Eni Angola project launches
Production has started at Eni’s East Hub Development Project offshore Angola five months ahead of schedule, according to a report from Rigzone. The Cabaca South East field brings Eni’s total number of producing fields in the complex to five, and two more are expected to enter production before the end of 2018. Cabaca South East boosts the total production of Block 15/06 to 150,000 barrels per day.
Somalia elects president, seeks oil and gas investors
Somalia has been embroiled in conflict since the 1980s, and the violence and lack of stability has thus far kept oil and gas activities at bay, despite indications of reserves. With the election of former Prime Minister Mohamed Abdullahi Mohamed as president, that could be changing.
Mohamed will take the helm after winning the election from a highly-secured airport hanger. He won through a system of regional clans and subclans electing 329 members of parliament, with those members voting for the president. It was deemed too dangerous to hold direct elections.
Mohamed, a dual U.S. citizen, is the most popular leader in decades, and is expected to bring unity to the ethnically divided country and fight corruption. Somalia is actively seeking oil and gas investors and hopes that oil and gas output may begin by 2020, according to Bloomberg. Exploration work has shown potential for large offshore deposits.
Consortium to develop solar in Nigeria
A consortium of Oriental Renewable Solutions and GreenWish Partners plans to develop a 50 MW solar power plant in Jigawa, a state in northern Nigeria. In a statement the partners noted they have formed a 50-50 equity partnership, according to ESI Africa. Oriental has signed a 20-year Power Purcahse Agreement with the Nigerian Bulk Electricity Trader. The plant is expected to be completed between 18 and 24 months after financial close.
EIA predicts decline in demand, increase in US production
In a double whammy for global oil, the U.S. Energy Information Administration has upped its forecast for the production of US crude, and is also predicting decreased demand for oil this year. The agency forecasts US crude production will average 9 million barrels per day in 2017 and 9.5 million barrels per day in 2018, up from 8.9 million barrels per day in 2016. The agency expects global demand to decrease by 10,000 barrels per day to 1.62 million barrels.
Despite the news — and last week’s news that U.S. oil inventories increased by 13.8 million barrels — OilPrice.com reports optimism in the markets, with Wall Street pouring money into oil and gas companies and oil prices trading up on Wednesday and Thursday, as traders pinned hopes on a drawdown in gasoline stocks.