The Buzz: This Week in Africa
At the close of this week Brent Crude is trading at $55.37 per barrel, WTI at $52.84 per barrel and natural gas at $2.79 per million BTU (beginning of day 03 March 2017). Here are AOP’s top five stories from the last seven days.
Sasol strikes first oil in Mozambique
South Africa-based Sasol plans to produce oil in Mozambique in just two to three years, after making the country’s first oil discovery. The company announced this week that four of 12 planned wells had been drilled, according to CNBC Africa. Sasol already produces gas in Mozambique.
The country has become well-known in recent years for its massive gas discoveries. Until now, however, oil finds had eluded explorers for over a century. “We always expected to see both oil and gas. We have drilled four wells, two of them gas, two of them oil, all showing positive results. In one of the areas where we expected mostly gas we found gas and oil,” said Joint Chief Executive Stephen Cornell to CNBC Africa.
Nigeria plans $20 billion gas revolution
In an effort to make use of the country’s plentiful gas resources, Nigerian Vice-President (and this week acting President) Yemi Osinbajo has announced plans to build a $20 billion gas industrial park in the Niger Delta region.
The park, a public-private partnership, has been named the Gas Revolution Industrial Park (GRIP), according to ESI Africa. It is being planned by a consortium of South Korea’s GSE&C, The China Development Bank and Power China. The park will be in Ogidigben, Delta state, with fertilizer, methanol, petrochemicals, and aluminium plants located in a tax free zone, and will be able to access over 18 tcf of gas from the Odidi, Okan and Forcados fields.
Total sells Gabon assets
French-major Total has signed an agreement with Perenco to divest much of the company’s interests in Gabon and transfer operatorship of some mature assets for $350 million, according to Reuters.
The deal includes the sale of Total Participations Petrolières Gabon, a 100 percent-owned affiliate of Total that holds interests in 10 fields. It also includes the sale of Total Gabon’s stakes in five fields in the country and the Rabi-Coucal-Cap Lopez pipeline network. The deal is subject to approval by authorities.
As part of a larger $30 billion global divestment plan, Royal Dutch Shell is also seeking buyers for assets in Gabon.
Equatorial Guinea extends licensing round
Capitalizing on a recovering oil and gas sector in 2017 and increased investor interest in upstream exploration, Equatorial Guinea is extending the deadline for its EG Ronda to April 28, 2017.
The Ministry of Mines and Hydrocarbons announced the plan to give companies more time to participate in the round, and also said the winners of the round will be announced at Africa Oil & Power on June 5 in Cape Town.
“We can see that the industry as a whole is turning the corner and that the appetite for exploration is greater starting 2017 than it was last year,” said H.E. Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons. “There is more stability and predictability in the market right now, which we can see is increasing investor confidence.”
New Age plans FLNG in Congo Brazzaville
New Age’s planned floating LNG venture for offshore Congo-Brazzaville could reach the FEED stage by this summer, though FID is not anticipated until the end of 2017 at the earliest, according to LNG World Shipping. New Age has proposed a 1.2 mta FLNG project, with plans for the project to come online by 2022.
Small-scale FLNG projects are the most likely to go forward in this price environment, according to BMI. Other African FLNG projects moving forward include Cameroon’s FLNG, which is expected to come online this year; Equatorial Guinea’s Fortuna FLNG, which is expected to reach FID in 2017; and Mozambique’s Coral FLNG, which is also expected to reach FID this year.