Page 10 - AfrOil Week 18 2022

AfrOil INVESTMENT AfrOil

After viewing documents relating to the agree- for comment. But the arrangement indicates
ment, Bloomberg reported that Trafigura was that the unpaid debts that were incurred by the
set to gain control over some of the revenues to Reserve Bank of Zimbabwe would be trans-
be generated by nickel and gold exports of state- ferred to the Finance Ministry, which controls
owned Kuvimba Mining House. Kuvimba.
The latter is an asset reportedly linked to The deal, drawn up by the London branch
local businessman Kudakwashe Tagwirei, who of law firm Reed Smith LLP, says: “Kuvimba
was recently sanctioned by the US and UK for would pay Trafigura $6mn a month and retain
alleged corruption. 40% of payments to Freda Rebecca and Shamva
The news agency said that Trafigura con- gold mines, as well as the nickel mines owned
firmed the deal and added that it ended a pre- by Bindura Nickel Corp., in so-called collection
vious fuel-trading business relationship it had accounts. Freda Rebecca, Shamva and Bindura
with Tagwirei in 2019, well before the business- Nickel are subsidiaries of Kuvimba. Trafigura
man was sanctioned. would also have the right to approve buyers of
“Trafigura Zimbabwe has provided credit the metal selected by Bindura and would have
on petroleum product deliveries into Zimba- right of first refusal on the metal. It would also
bwe and is scheduled to receive payments,” the have the right to buy the gold produced by Freda
trader said. “Trafigura operates a robust com- Rebecca and Shamva.”
pliance programme, aligned with international The payments, says the pact, will not be sub-
standards. In accordance with this programme, ject to tax and documents will not be submitted
Kuvimba has undergone and satisfied our strict to any authority in Zimbabwe. It has sections
KYC requirements.” It was referring to know- that bar all parties involved from entering into
your-customer (KYC) policies meant to pre- “any transactions with any person which is a
vent engagement with people involved in money sanctioned person.”
laundering or other financial crimes. Trafigura defended the use of such language,
Neither Tagwirei, Kuvimba nor the minis- saying it was “common and prudent business
ters responded to the news agency’s requests practice” in commercial arrangements. ™

PERFORMANCE
OPEC+ unlikely to alter its course

GLOBAL FEW surprises are expected when the OPEC+ to 11.5mn bpd each, with the UAE’s rising by
group meets later this week to decide on June 332,000 bpd to 3.5mn bpd as Iraq and Kuwait
production targets as oil output struggles to also receive uplifts of 150,000 bpd each, taking
keep pace with quotas and prices remain favour- their baselines to 4.803mn bpd and 2.959mn
able for producers. bpd respectively.
Surveys suggest that OPEC production rose However, with conflict in Ukraine raising
by just 40,000 barrels per day in April, despite concerns about Russian exports and uncertainty
the group’s targets providing for an increase about Kazakh flows owing to maintenance at
of 254,000 bpd. With this in mind, it appears loading facilities, the group largely ignored the
highly unlikely that the wider group will come potential combined hike of 1.6mn bpd, adding
near the 432,000 bpd hike targeted for May. just 32,000 bpd to the now-customary increase.
Given the consensus on this figure, and the Those fears persist while force majeure in
group’s enduring propensity for conservativism, Libya has reduced output in the restive North
a similar target uptick is anticipated for June African country.
quotas. Brent crude prices sat in a range of $98- While there are also concerns about Chinese
108 per barrel during April, continuing to buoy demand owing to lockdowns as the country
the coffers of exporters, with Saudi Arabia and struggles to achieve its “zero-COVID” target,
Iraq providing particularly upbeat economic stability has been the name of the game for
updates. OPEC and its partners. They appear set to keep
Last month’s meeting was notable by the a steady course. ™
almost complete glossing over of a July 2021
agreement to heighten significantly the baseline
reference levels for the top OPEC+ producers
from May 2022. In August, the group began a
string of consecutive 400,000 bpd per month
increases, altering this approach for the first
time in April.
The July deal had provided the baselines for
Saudi and Russia to increase by 500,000 bpd

P10 www. NEWSBASE .com Week 18 04•May•2022