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Egypt cancels tender to rent third LNG regasification terminal

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CAIRO (Reuters) – Egypt has cancelled its tender to rent a third natural gas import (LNG) regasification terminal as it is no longer needed, Oil Minister Tarek El Molla told Reuters on Tuesday.

“The tender to rent a third regasification terminal was cancelled due to a lack of need for it and until we reassess the gas production capacity of Egypt and the consumption levels over the next few years,” he said.

Once a net energy exporter, Egypt began importing liquefied natural gas (LNG) last year and has leased two floating and storage regasification units (FSRU) already to help avert power shortages caused by falling energy production and rising consumption.

 

(Reporting by Ehab Farouk; writing by Asma Alsharif; editing by Louise Heavens)

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South Africa needs to fix politics to grow economy-Treasury official

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JOHANNESBURG (Reuters) – South Africa needs to fix its politics in order to grow its economy, as credit rating agencies have emphasised, Treasury director-general Lungisa Fuzile said on Monday.

S&P Global Ratings downgraded South Africa’s local debt by one notch to BBB on Dec. 2 but kept its sovereign credit rating unchanged at BBB- with a negative outlook, warning that political tensions could hamper efforts to boost GDP.

Fitch and Moody’s also warned that political turmoil could derail economic growth when they affirmed their own investment grade ratings.

 

(Reporting by Olivia Kumwenda-Mtambo; Writing by Stella Mapenzauswa; Editing by Andrew Roche)

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Uganda starts up first solar power plant in bid to tap renewables

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KAMPALA (Reuters) – Uganda on Monday started up its first grid-connected, 10 megawatt solar power plant as the east African country moves to tap its renewable energy resources and expand its electricity generation capacity.

Funded by Norway, Germany, UK and the European Union, the $19 million plant was developed by Access Power and Eren Re, two energy sector investors based in Dubai and France respectively.

Uganda, a prospective crude oil producer of some 34 million people, generates about 850 megawatts of electricity, mostly from hydro power dams.

Officials have said they want to increase that capacity to 1,500 megawatts by 2018 and are seeking foreign investors to develop the country’s non-traditional energy sources such as solar and geothermal.

The plant, a vast field of some 32,600 photovoltaic panels, is located in Soroti in northeastern Uganda and the electricity generated will help power at least 40,000 homes.

Last week Uganda signed a 90 million-euro ($95.55 million)loan deal with German development bank KfW and French government finance agency AFD to build a 45 megawatt (MW) power plant in the country’s west.

 

 

 

($1 = 0.9419 euros)

 

(Reporting by Elias Biryabarema; editing by Louise Heavens)

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IMF advises Zambia to delay re-financing $2.8 billion of Eurobonds

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LUSAKA (Reuters) – Zambia should delay its planned re-financing of $2.8 billion worth of Eurobonds until financing conditions ease, an International Monetary Fund representative said on Monday.

“We would caution the government not to tap into the international markets at this time,” the IMF’s resident representative, Alfredo Baldini, told reporters during the release of an IMF report on growth in sub-Saharan Africa.

The Eurobonds were issued from 2012 to 2015, and the Zambian government planned to re-finance them with longer-dated bonds at a lower cost, Finance Minister Felix Mutati said on Dec 7.

“The financing conditions are pretty tight right now, and it will be very expensive,” Baldini said on Monday.

In fact, the bonds would only fall due in 2022, 2024 and 2025, so the government didn’t need to rush into re-financing them, Baldini said.

The Zambian government has relied on external financing as its spending rose over the past few years while revenue remained almost the same, which has put pressure on its exchange rate, Baldini said.

Mutati said last week the equivalent of 19 percent of Zambia’s gross domestic product was being used to service debt and the government wanted to reduce that to about 15 percent.

Zambia issued a $750 million Eurobond in 2012, followed by a $1 billion issue in 2014 and another worth $1.25 billion last year, mainly for infrastructure projects.

 

(Reporting by Chris Mfula, editing by Larry King)

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Oil prices soar on global producer deal to cut crude output

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By Henning Gloystein

SINGAPORE (Reuters) – Oil prices shot to their highest levels since mid-2015 on Monday after OPEC and other producers reached their first deal since 2001 to jointly reduce output in order to rein in oversupply and prop up markets.

Brent crude, the international benchmark for oil prices, soared to $57.89 per barrel in overnight trading between Sunday and Monday, the highest level since July 2015.

U.S. West Texas Intermediate (WTI) crude also hit a July 2015 high of $54.51 a barrel.

Brent and WTI eased to $56.83 and $54.07 respectively by 0629 GMT, but were both still up over 4 percent from their last settlements.

With the deal signed after almost a year of arguing within the Organization of the Petroleum Exporting Countries and mistrust in the willingness of non-OPEC Russia to participate, focus is switching to compliance of the agreement.

“We believe that the obser vation of the OPEC-11 and non-OPEC 11 production cuts is required to sustainably support… oil prices to our 1H17 WTI price forecast of $55 a barrel,” Goldman Sachs said.

“This forecast reflects an effective 1.0 million barrels per day (bpd) cut vs. the 1.6 million bpd announced cut and greater compliance to the announced cuts is therefore an upside risk to our forecasts.”

AB Bernstein said the agreed deal “amounts to an aggregate supply cut of 1.76 million barrels per day (bpd) from 24 countries which currently produce 52.6 million bpd, or 54 percent of world oil supply.”

Bernstein said that “some of the non-OPEC supply cuts will come from natural decline, but most will come from self-imposed cuts.”

Saudi Aramco has told U.S. and European customers it will reduce oil deliveries from January.

“The kingdom is targeting excess inventories, the lion’s share of which sit in the United States,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore. “Lower Saudi exports to the U.S. could also make the export arbitrage uneconomic.”

OPEC plans to slash output by 1.2 million bpd from Jan. 1, with top exporter Saudi Arabia cutting around 486,000 bpd in a bid to end overproduction that has dogged markets for two years.

On Saturday, producers from outside OPEC agreed to reduce output by 558,000 bpd, short of the target of 600,000 bpd but still the largest contribution by non-OPEC ever.

“Non-OPEC participation should add to bullish sentiment,” Morgan Stanley said.

From outside OPEC, Russia said it would gradually cut 300,000 bpd.

“Once cuts are implemented at the start of 2017, oil markets will shift from surplus into deficit. Given the cuts in production announced by OPEC, we expect that markets will move into a 0.8 million bpd deficit in 1H17,” AB Bernstein said.

Still, some analysts expect producers, drawn by higher oil prices, to increase output again.

“While better compliance than we expect would initially lead to higher prices – with full compliance worth an additional $6 per barrel to our price forecast – we expect that a greater producer response, especially in the U.S., would eventually bring prices back to $55,” Goldman Sachs said.

 

(Additional reporting by Florence Tan and Keith Wallis; Editing by Richard Pullin)

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South Africa’s Sibanye pays $2.2 bln for Stillwater in U.S. move

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By TJ Strydom

JOHANNESBURG (Reuters) – South Africa’s Sibanye Gold took a major step outside its home market on Friday with a $2.2 billion deal to buy Stillwater Mining, the only U.S. miner of platinum and palladium.

If it goes through, the cash takeover will increase South Africa’s grip over global platinum and palladium supply and underline chief executive Neal Froneman’s determination to branch out of gold mining and South Africa.

However, the price Sibanye is offering to increase its own share of supplies of the precious metals is larger than its market value and the move triggered a sharp fall in its stock.

Sibanye said it would buy Stillwater, which operates in Montana and is the largest primary producer of platinum group metals (PMGs) outside South Africa and Russia, with a loan that it will re-finance with debt plus a rights issue of at least $750 million.

Froneman wants to cut the bullion miner’s dependence on gold and platinum in South Africa, where a volatile currency, labour strikes and strict government rules have weighed on Sibanye’s share price.

The deal, the second-biggest South African outbound M&A transaction so far this year, will make Sibanye the world’s third largest palladium producer and fourth largest platinum group metals miner, Froneman said.

Some analysts highlighted the risks as the platinum market sinks into oversupply.

But while demand from the diesel car sector for platinum, which is used in catalytic converters, is under pressure because of air pollution concerns, palladium used in hybrid petrol cars could see higher consumption and the market is in deficit. [nL8N1DC53O]

Palladium reached its most expensive versus platinum since early 2002 last month as the U.S. election result sparked a surge in cyclical assets.

“It’s a tier one asset in palladium in the United States,” a source close to the deal said. “Normally in the U.S., there would be a 30-40 percent premium. This is around 20 percent.”

Sibanye said it would pay $18.00 per share in cash for Stillwater, a 23 percent premium over Thursday’s closing price, which it was initially financing through a $2.675 billion loan arranged by HSBC and Citigroup.

“These are some of the lowest cost ounces in the world,” said Froneman, referring to Stillwater’s operations.

SHARES UNDER PRESSURE

Sibanye’s shares dropped 18 percent to an 11-month low, but recovered slightly to close 15.3 percent weaker at 24.01 rand, their biggest daily percentage drop on record.

By 1512 GMT, shares in Stillwater had surged 18.5 percent to $17.41, a touch below the offer price.

Froneman said Sibanye’s share price was too low, even though it paid “industry-leading dividends” and this was partly because it was “not as geographically diverse” as some competitors.

Sibanye did not detail any regulatory hurdles, saying only the deal – which is backed by Stillwater’s board – was conditional on the required authorisations.

It said it needed deal approval from its own and Stillwater’s shareholders, although it already has the support of 29 percent of its own investors.

Sibanye was spun off from Gold Fields in 2013. It bought Aquarius Platinum and Anglo American Platinum’s Rustenburg mines last year. [nL8N12612R]

($1 = 13.6755 rand)

(Additional reporting Tiisetso Motsoeneng in Johannesburg, Barbara Lewis and Jan Harvey in London; Editing by James Macharia, Alexander Smith and Mark Potter)

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In fossil rarity, tumor found in 255-million-year-old beast

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By Will Dunham

WASHINGTON (Reuters) – Scientists examining the jawbone of a saber-toothed, mammal-like beast that prowled Tanzania 255 million years ago have come across a remarkable fossil rarity: one of the oldest-known tumors.

University of Washington researchers on Thursday described a benign tumor composed of miniature tooth-like structures they found embedded next to the root of the creature’s enlarged canine tooth while studying an unrelated aspect of the jaw.

The animal was a member of an extinct group of four-legged carnivores called gorgonopsians that mixed mammal-like and reptile-like traits. They reached up to 10 feet (3 metres) long and appeared early in the evolutionary lineage that led to mammals. The jawbone came from one of the smaller gorgonopsian species.

Gorgonopsians were among the top predators of their time, thriving from about 270 million to 252 million years ago when they were wiped out during Earth’s worst mass extinction at the end of the Permian Period. Their demise came roughly 20 million years before the first dinosaurs.

When the researchers sliced into the mandible fossil from Tanzania’s Ruhuhu Valley, they found a benign dental tumor called a compound odontoma that grows within the gums or other jaw soft tissues. When people get one, surgery is sometimes used to remove it.

“There was no indication that there was a tumor in this jaw. It looked normal before we cut it open. It was pure luck that we found the tumor,” University of Washington paleobiologist Megan Whitney said.

Until now, this type of tumor was known only in mammals, including some Ice Age fossils tens of thousands of years old. The new discovery shows such a tumor existed in mammal ancestors that lived tens of millions of years before the first mammals appeared.

Tumors, malignant and benign, typically involve soft tissue, and rarely fossilize.

“Ancient tumors generally need to affect hard parts such as bones and teeth in order to be preserved in the fossil record,” University of Washington paleobiologist Christian Sidor added.

This tumor included hard enamel and dentin.

Few tumor fossils are older. A 300-million-year-old fish was found with a tumor and a 350-million-year-old armored fish has an apparent tumor that some dispute.

“Fossils allow us to understand the evolution of diseases in deep time and have the potential to provide clues as to the causes of diseases that afflict humans,” Whitney said.

The research appears in the Journal of the American Medical Association Oncology.

 

 

(Reporting by Will Dunham; Editing by Peter Cooney)

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Congo Republic oil output to reach 300,000 bpd in 2018 – oil minister

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BRAZZAVILLE (Reuters) – Congo Republic expects oil output to rise to some 300,000 barrels per day in 2018, up from around 250,000 bpd now, partly due to a new deep offshore field due to come online next year, the oil minister said on Thursday.

Moho Nord, the second project issued on the Moho Bilondo offshore licence, is due to begin producing oil in March or April next year, Jean-Marc Thystere-Tchicaya told a conference in the capital Brazzaville.

“From mid-2017 we can already count on an increase in production and then reach a peak in 2018 with 300,000 barrels per day,” he said. “We hope that the cost of a barrel of crude will stabilise on the market and allow us a good budget.”

Oil accounts for around 65 percent of the Central African nation’s GDP.

Moho Nord is expected to have production capacity of 140,000 bpd, according to operator Total, which holds a 53.5 percent stake in the project. Chevron owns 31.5 percent with the remaining 15 percent held by Congo’s state oil company SNPC.

Having reversed a decline in production, Congo is on track to leapfrog Equatorial Guinea to become sub-Saharan Africa’s third-largest crude producer next year.

 

(Reporting by Christian Elion; Writing by Joe Bavier; Editing by Alexandra Hudson)

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Egypt cbank governor says intervention in currency market is “history”

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CAIRO (Reuters) – Egyptian Central Bank Governor Tarek Amer has said nothing would prompt him to intervene to prop up the pound after floating the currency in a dramatic move last month, calling those policies “history”.

Egypt abandoned its peg of 8.8 Egyptian pounds to the U.S. dollar on Nov. 3, floating the currency in a bold move that has since seen it roughly halve in value.

The sharp depreciation led to market speculation that the central bank would intervene in order to strengthen the currency and boost liquidity on the interbank market.

“Intervene? No. Absolutely not. This is history. There will be no intervention. Everyone was talking about us pumping in $2 billion or $4 billion. That’s not it. That runs exactly contrary to the idea we were implementing,” Amer said in an interview published on Thursday by business newsletter Enterprise.

“The market thought we would still need to support the new FX regime. No. We want this newborn child to start standing on its own feet and supporting itself.”

Ditching its currency peg helped Egypt secure a $12 billion three-year loan from the International Monetary Fund to support an economic reform programme under which the government has introduced Value Added Tax, cut electricity subsidies and sharply raised import duties, all in the space of a few months.

But the measures — the steep depreciation in the pound in particular — have reduced imports and dramatically increased prices in the country of more than 90 million people.

The pound was trading around 18 to the dollar on Thursday.

Bankers said on the day of the flotation they expected the central bank to inject $4 billion into the currency markets to stabilise the pound and clear huge backlogs in dollar orders that had built up under the peg.

Egypt has struggled to revive its economy since the 2011 uprising scared off foreign investors and tourists, key sources of foreign currency.

The central bank drained its foreign reserves shoring up the pound before the float, forcing it to ration foreign currency supplies, prioritising companies importing essential goods like wheat or medicine.

Everyone else had to trade on a booming black market. Existing foreign investors could not repatriate profits and potential investors held back, expecting a devaluation.

Amer told Enterprise the float was already paying off.

“Now, the market is rewarding Egypt for the float… portfolio investors in the debt market came almost immediately,” Amer said. “The stock market is up 35 percent from 3 November.”

 

(Writing by Lin Noueihed; Editing by Raissa Kasolowsky)

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South Africa consumer confidence recovers but remains in negative territory

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JOHANNESBURG (Reuters) – South Africa’s consumer confidence recovered in the third quarter of the year but was still in negative territory, a survey showed on Thursday, indicating households remain concerned about the outlook for the economy.

The confidence index, sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research, recovered to -3 in the third quarter after registering -11 in the second quarter.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Ed Cropley)

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