Page 13 - AsianOil Week 26

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must support the project by developing a new 20 commercial banks are expected to take part.
domestic gas tariff regime that is agreeable to Meanwhile, fuel prices have spiked in Zim-
both producers and consumers. babwe, following the government’s removal of
Meanwhile, Botswana is dipping into its state a fixed exchange rate in place since March. US
fuel reserves and looking for new suppliers in dollar scarcity has exacerbated fuel shortages in
response to a slowdown in petroleum product Zimbabwe, which lacks any refining capacity of
deliveries from South Africa. The government has its own and therefore imports all of its gasoline,
been asked to help cover the cost of transportation, diesel and other petroleum products.
which are likely to rise if the country starts import-
ing fuel from Namibia and Mozambique. If you’d like to read more about the key events shaping
the downstream sector of Africa and the Middle East,
If you’d like to read more about the key events shaping then please click here for NewsBase’s DMEA Monitor.
Africa’s oil and gas sector then please click here for
NewsBase’s AfrOil Monitor. European asset sales at risk
The European refining sector has not had an easy
Downstream: UAE pipeline deal time over the years, amidst structural problems
At a time when investment in oil and gas is at with overcapacity and ever more efficient fuel
unprecedented lows, the UAE’s Abu Dhabi consumption.
National Oil Co. (ADNOC) raised $10.1bn from The coronavirus (COVID-19) crisis and the
the transfer of a near-half stake in its gas pipeline resulting collapse in fuel demand may prove to
business last week. be the final straw for Swiss-based Gunvor, which
The investors in question were the US enti- is considering the closure of its 107,500 barrel
ties Global Infrastructure Partners and Brook- per day (bpd) plant in the Belgian port of Ant-
field Asset Management, Singapore’s sovereign werp. Gunvor says it will take time for the supply
wealth fund GIC, Canada’s Ontario Teachers’ glut created by the pandemic to be soaked up,
Pension Plan Board, South Korea’s NH Invest- and in the meantime, its plant will continue to
ment & Securities and the Italian pipeline oper- generate negative cash flow. The company has
ator Snam. The deal is expected to be closed in stressed that the decision would not affect oper-
July. ations at its 88,000-bpd refinery in Rotterdam,
Rather than a simple sale and purchase trans- the Netherlands, or its 110,000-bpd plant in
action, ADNOC will lease out its ownership Ingolstadt, Germany.
interest in the assets for 20 years in exchange for Other refiners may consider similar options,
a volume-based tariff. This marks the latest in and for the long-term health of European refin-
a series of divestment deals by the national oil ing, reduced capacity may not be such a bad
producer, which needs funding to diversify its thing.
business and shore up its cash reserves during Meanwhile, Mediterranean-focused Ener-
the downturn. Last year, it also shed a 40% stake gean has secured a significant price cut in its deal
in its oil pipeline network to US investors Black- to acquire the upstream arm of Italy’s Edison.
rock and KKR for $4bn. It will pay only $284mn, instead of an original
In Mozambique, France’s Total and its part- price of $750mn. This is largely because Edison’s
ners at the 13mn tonne per year (tpy) Mozam- Algerian and Norwegian assets have been omit-
bique LNG export plant are inching towards ted from the transaction, although weaker mar-
closing a financing deal that will pave the way ket conditions also helped drive down the price.
for a final investment decision (FID). Around BP, meanwhile, has agreed to sell its $5bn

Week 26 02•July•2020 www. NEWSBASE .com P13