The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $55.84 per barrel, WTI at $53.50 per barrel and natural gas at $2.85 per million BTU (beginning of day 17 February 2017). Here are AOP’s top five stories from the last seven days.
Kenya’s $2.1-billion power plan
Kenya’s Rural Electrification Authority announced this week plans to funnel $2.1 billion over five years into developing the country’s supply network, according to ESI Africa. The money is specifically targeted at developing infrastructure to connect public facilities such as schools, health centers, trading centers, police posts and water projects to the grid, as well as churches, mosques, factories and processing plants. The plan is to use renewable power to provide electricity in rural areas.
Uganda pushes first oil by 2020
The Uganda energy minister has given a deadline of December 31 to finalize FID on proposed investments by Total, Tullow Oil and CNOOC, according to The Monitor. The push is an effort to reach first oil by 2020, but with cuts in investment for oil and gas projects, there is some concern that the country will meet this goal. Tullow discovered large oil reserves at Lake Albert in 2006 and the country initially delayed development until regulatory frameworks were established. Delays continued after the drop in oil and gas prices, with Tullow recently farming-down its interest in the project.
Discoveries at lowest level in 60 years
Oil and gas finds dropped to a 60-year low in 2016 because of companies putting an abrupt halt to exploration activities in reaction to low oil and gas prices, according to the Financial Times.
Discoveries were averaging 400-500 per year up to 2013, according to IHS Markit data, but the low oil prices brought worldwide discoveries to just 174 in 2016. Exploration is expected to increase, albeit not by very much, in 2017.
Joint exploration could prevent tensions
The four countries that share the Lake Tanganyika basin hope to hash out an agreement for joint exploration for oil and gas, according to The Citizen. The countries — the Democratic Republic of Congo, Tanzania, Zambia and Burundi — will meet next week in the DRC to develop a plan to execute exploration. The new push is due to an oil discovery in Lake Kivu, located ust north of the area under discussion.
World’s biggest oil trader eyes Africa expansion
Vitol is keen to expand its business in Africa, especially after its involvement in Ghana’s $7 billion Cape Three Points project, according to the Financial Times. The trader’s head of Asia, Kho Hui Meng, told the newspaper that the lack of refining capacity as compared to the high demand for petroleum products in Africa created an opportunity. And Vitol is in the position to expand, as one of the few winners from the oil and gas industry’s oil price crash. In fact, 2015 was one of the company’s most profitable years on record, with a net income of $1.6 billion, as it took advantage of low prices with arbitrage and storage opportunities.