Page 8 - AfrOil Week 04 2020

AfrOil INVESTMENT AfrOil
 It may now be looking to make even deeper cuts. Reuters’ sources reported that Tullow was now ready to unload its entire 50% stake in the Ken- yan blocks.
Doing so would help the UK-Irish firm streamline its portfolio in light of the challenges it has encountered offshore Ghana and Guyana, they commented.
As of press time, neither Total nor Tullow had commented on the news agencies’ reports. Likewise, Natixis has not confirmed the story, and Africa Oil, the Canadian company that owns the remaining 25% stake in the blocks, has also remained silent.
By contrast, Kenyan Petroleum Principal Secretary Andrew Kamau told Bloomberg by telephone he was aware of the companies’ plans for the three blocks. He also insisted that the plans for a joint sale were not expected to derail efforts to make a final investment deci- sion (FID) on the project before the end of 2020 and then begin regular commercial production in 2022.
Tullow said earlier this month in a trad- ing update released ahead of its report on
performance in 2019 that it still expected to meet these deadlines. It also conceded, though, that doing so would be “challenging.”
In the meantime, Tullow and its partners are also facing problems with their early oil pilot scheme (EOPS). This project envisions the start-up of small-scale production in the Lokichar Basin and the use of trucks to move crude from Turkana to the port of Mombasa for export.
In the trading update, Tullow explained it had halted work on EOPS because of “severe damage to roads caused by adverse weather in the fourth quarter of 2019.” It added: “Trucking remains on hold until all roads are repaired to a safe standard. Work continues with joint ven- ture partners and the government of Kenya to progress the development project.”
Tullow, Total and Africa Oil have also talked about building a pipeline to handle future pro- duction. Kamau told Bloomberg this week that he expected work on this project, which calls for building a link to carry up to 100,000 barrels per day (bpd) of oil from the Lokichar Basin to the port of Lamu, to proceed as planned.™
PERFORMANCE
Sudan reports motor fuel shortages
SUDAN
IN Sudan, at least four cities have experienced problems with fuel supplies since mid-January. According to Radio Dabanga, fuel retailers have had difficulty meeting demand in El Obeid, Khartoum, Nyala and Port Sudan.
In all four cities, filling stations have run short. As a result, motorists seeking to refill their tanks at authorised retail outlets have had to queue up and wait, and other drivers have had to navigate the resulting traffic jams.
Meanwhile, black-market prices for fuel have shot upwards. Drivers in Nyala told Dabanga Radio on January 21 that unlicensed sellers were charging SDP220 ($4.86) per gallon for gaso- line, almost five times the rate of SDP45 ($0.99) set for authorised retailers. They also said that black-market diesel was commanding a price of SDP125 ($2.76) per gallon, compared with the official price of SDP35 ($0.77).
The shortages have sparked street demon- strations in Khartoum and Port Sudan. They have also fuelled suspicion of state authorities, with some protesters casting blame on gov- ernment bureaucrats and allies of the previous regime led by Omar Bashir.
In Nyala, for example, local activists told Radio Dabanga that Sudanese security forces were responsible for the shortages. They claimed that state security personnel were distributing only 900 gallons (3,410 litres) of fuel per day to each filling station, or 60% of the total 1,500 gal- lons (5,700 litres) due.
For their part, activists in El Obeid claimed that government bureaucracies had orches- trated the supply crisis. After all, said one res- ident, “[they] own most of the city’s petrol stations.”
As of press time, it was not clear whether con- ditions had improved. On January 24, Sudan’s Finance Minister Ibrahim El Badawi indicated that the government hoped reforms would help settle the matter. In the second half of 2020, he said, Khartoum will launch a programme designed to eliminate fuel price subsidies. This will allow the government to save $400mn per year and use its resources to support citizens more effectively, he said.
Long lines are building up at filling stations in Sudan (Photo: Independent.ng)
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w w w. N E W S B A S E . c o m Week 04 29•January•2020