Page 10 - AfrOil Week 04 2020

AfrOil POLICY AfrOil
SENEGAL
AUSTRALIA’S FAR revealed last week that it had signed a memorandum of understanding (MoU) with Glencore on the marketing of oil from the Sangomar block offshore Senegal.
In a statement, the company explained that the binding MoU provided for the UK-Swiss commodity trader to take delivery of and mar- ket 100% of its share of production from the block once commercial development began. The arrangement will benefit FAR by allowing the company to access Glencore’s extensive marketing and off-take resources, as well as its expertise in the global oil trade, it said.
It added that Glencore was a good partner for the project because it had accumulated exten- sive experience in the area of establishing mar- kets for new grades of crude and thus would be able to maximise the value of future production from Sangomar. The launch of the block will mark Senegal’s debut as an oil-producing state.
FAR went on to say that the MoU envi- sioned the signing of a marketing agreement that would remain in effect for seven years after the start of oil production at Sangomar and that would cover at least 20mn barrels of crude. This deal would remain in effect as long as Glencore continued to provide the Australian firm with credits, it said.
Earlier this month, FAR saidit had secured final approval for an underwritten $300mn loan facility from BNP Bank Paribas (France), Macquarie Bank (Australia) and Glencore. Each of the three will make about $100mn available to the Australian operator. The credit will help cover FAR’s share of investment in the project.
FAR is a non-operating partner in Sangomar and has a 15% stake in the block. The remain- ing equity is divided between Woodside Petro- leum (Australia), the operator, with 35%; Cairn Energy (Australia) with 40%, and PetroSen, the national oil company (NOC) of Senegal, with 10%.
Meanwhile, new oil and gas production sites in countries such as Mozambique, Ghana, Senegal and Tanzania all aim to divert fossil fuels to the domestic market to feed a new generation of fos- sil fuel power plants.
The UK’s development finance institutions (DFIs) already have considerable exposure to renewables across Africa. CDC Group will invest $3.5bn between 2018 and 2022 in Africa, and in 2019 pledged $300mn to support private investment in Africa’s “challenging” transmis- sion, distribution and off-grid sectors by launch- ing its new investment vehicle Gridworks.
The group has also provided support to private utilities such as Globeleq, Umeme (Uganda) and Eneo (Cameroon) to develop low-carbon generation.
Other projects include the GBP15.5mn
($20.2mn), UK-based Africa Clean Energy Technical Assistance Facility (ACE-TAF), which was launched in Nigeria in 2019 and aims to catalyse solar markets across Africa.
The UK’s DFID currently supports 136 development projects across Africa in all areas from health to civil society to the environment, with a budget of GBP412mn ($537mn).
In practice, very little of the UK’s develop- ment money has been used to support coal pro- jects overseas in recent years. DFID said it had not supported coal-fired power plants abroad since 2012, although it did support decommis- sioning coal projects. Claire O’Neill, the UK’s former clean growth minister and now COP26 president, told Parliament in 2019 that the UK’s export finance agency had “not funded any new coal-fired power plants overseas since 2002.” ™
PROJECTS & COMPANIES
FAR, Glencore sign MoU on marketing of Sangomar production
The Sangomar block encompasses the FAN and SNE discoveries (Image: FAR)
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w w w. N E W S B A S E . c o m Week 04 29•January•2020