The Buzz: This Week in Africa

At the close of this week Brent Crude is trading at $50.84 per barrel, WTI at $47.86 per barrel and natural gas at $3.36 per million BTU (beginning of day 12 May 2017). Here are AOP’s top five stories from the last seven days.

Ophir to borrow $1.2 billion for Fortuna FLNG

Equatorial Guinea’s Fortuna FLNG project has passed another hurdle this week, with Ophir Energy announcing plans to borrow $1.2 billion to finance the project from Chinese banks, according to Reuters.

The news comes just after Ophir and the project partners signed an umbrella agreement to finalize participation. A final investment decision is expected by mid-2017. Ophir CEO Nick Cooper said the shift to Chinese banks was because of an unwillingness by Western institutions to finance projects in Africa.

First-gas on Africa’s first deepwater FLNG project is expected by 2020.

Eni to reach FID on Coral FLNG

Mozambique’s Coral FLNG is also expected to reach final investment decision this year, with China National Petroleum Company, one of the partners in the project, planning to back the investment plan, according to Reuters.

CNPC had previously not announced support of the deal, but sources report approval of the investment decision is “imminent” after CNPC agreed to back the scheme. A report by Wood Mackenzie listed the two projects — Coral FLNG and Fortuna FLNG —  as the only large-scale FLNG projects likely to reach FID this year.

BP makes major gas find offshore Senegal

A new gas discovery in offshore Senegal by BP and its joint venture partner Kosmos Energy confirm the region’s potential as a LNG hub, according to BP.

The Yakaar-1 exploration well was drilled to a depth of 4,700 meteres in 2,550 meters of water and favorable results, according to a company news release.

“Yakaar-1 follows the earlier exploration success that led to the Tortue discovery and further confirms our belief that offshore Senegal and Mauritania is a world-class hydrocarbon basin,” said Bernard Looney, BP Upstream chief executive officer.  “This discovery marks an important further step in building BP’s new business in Mauritania and Senegal. We look forward to results from the additional exploration wells planned for 2017.”

Eni plans new Nigeria refinery

Italy-based ENI announced plans this week to build a crude refinery in Nigeria, a crucial step to ending Nigeria’s dependence on imported refined petroleum products.

Despite holding the top spot as Africa’s largest oil and gas producer, Nigeria still imports most of its petroleum products due to the country’s lack of refining capacity. The Eni refinery is expected to have a capacity of 150,000 barrels per day, according to The Economic Times, and a memorandum of understanding is being prepared.

OPEC to extend oil cuts

Members of the Organization of Petroleum Exporting Countries as well as non-OPEC member countries have agreed to extend the oil cuts that were agreed on in December 2016, according to Bloomberg.

The cuts, which total a commitment to shed 1.8 million barrels of oil per day from the market, will be extended for an additional six-month period. Originally, the production cuts were just planned for the first half of 2017. To continue efforts to stabilize the markets, they are being extended.