The Buzz: This Week in Africa

At the close of this week Brent Crude is trading at $47.17 per barrel, WTI at $44.64 per barrel and natural gas at $3.06 per million BTU (09:00 SAST, 16 June 2017). Here are AOP’s top five stories from the last seven days.

Oranto Petroleum to Sign Uganda PSCs

Oranto Petroleum is set to sign petroleum agreements in another East African nation this year, with two production sharing contracts with Uganda about to be inked. The company will begin exploration work on two blocks near the southern part of Lake Albert. The contracts were expected to be signed on 15 June, 2017, but the ceremony will be rescheduled, according to a report from the Uganda Radio Network.

Oranto bid in Uganda’s first competitive licensing round in 2016, and won the deal for the Ngassa Shallow Play and the Ngassa Deep Play. The Nigeria-based independent signed an exploration production sharing agreement with South Sudan earlier this year and its sister company, Atlas Petroleum, was one of the companies to advance to negotiations in Equatorial Guinea’s EG Ronda 2016, with winners announced June 5.

After the 2006 discovery of crude oil in Lake Albert, oil reserves are estimated to be 6.5 billion barrels.

Ghana’s Sankofa Project Ahead of Schedule

Commercial oil and gas production at the landmark Sankofa project in offshore Ghana will commence in July, three months early, according to Reuters.

Eni’s Sankofa project is expected to produce 45,000 barrels per day from Sankofa field, and is part of the larger Offshore Cape Three Points project that is expected to produce 180 million standard cubic feet of gas per day from the Gye Nyame field. The project should double the country’s domestic gas supply, and will be vital for supply of fuel to Ghanaian gas-to-power projects.

Erin Energy to Spud Nigerian Wells

Houston-based Erin Energy could drill three wells offshore Nigeria after securing the Pacific Bora drillship in a contract that is set to start in mid-July, according to Upstream Online.

The company, in efforts to more than double its production, is focusing on its Oyo field, and the first well to be drilled is likely to be the Oyo-9 development well.

Nigeria, Libya Pump More Oil, Push Up OPEC Production

Nigeria and Libya — both exempt from the OPEC deal to cut oil production because of steep declines in each country’s production capacity — are rapidly recovering oil production capacity and are pushing OPEC production higher.

Nigeria, which saw production decline to just over 1 million barrels per day in 2016 because of militancy in the Niger Delta, regained its top spot at as Africa’s largest oil and gas producer and exporter this year, and expects to produce 2.2 million barrels per day by the end of June. Similarly, Libya has made great strides in increasing production, reaching 830,000 bpd and targeting 1 million bpd by the end of July. The increased OPEC production, combined with increased production of US shale, deflated oil prices this week.

OPEC and non-OPEC members who agreed to the cuts in December 2016 also agreed in May to extend the lower production goals into 2018. OPEC oil production rose by 336,100 barrels per day to in May.

Power Moves Underground in Kenya

Kenya Power has committed $123 million to laying underground power transmission cables in the country’s major cities of Nairobi, Kisumu and Mombasa, ESI Africa reported.

Kenya Power, which operates most of the country’s electricity transmission and distribution, said the investment accomplishes several objectives, including providing an alternative transmission network and protecting the network from above-ground disruptions from wind and tree damage, etc. Additionally, fiber optic cables will also be laid alongside the underground cables.