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Qatar considers joining Exxon’s Mozambique gas move

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By Ron Bousso and Tom Finn

LONDON/DOHA (Reuters) – Qatar Petroleum is interested in the Mozambique gas business of Italian energy group Eni and could opt to join Exxon Mobil in buying a multibillion-dollar stake, sources familiar with the matter said.

State-controlled Eni is looking to reduce a 50 percent stake in its giant Mozambique gas acreage as part of plans to sell 5 billion euros of assets over the next two years. Last month sources told Reuters Exxon had reached a deal that could give it an operating stake in the onshore liquefied natural gas (LNG) export plant, while leaving Eni in control of the Area 4 gas fields feeding it. Qatar Petroleum is in talks with Exxon and Eni on some kind of involvement in Mozambique which could involve a joint investment with the U.S. major, one senior QP source said, adding the deal was not a classic joint venture structure. A second Doha-based source, who declined to be named as not authorized to speak publicly, said Qatar Petroleum had been looking at Eni’s Area 4 field as well as adjoining acreage of Anadarko Petroleum Corp but added the focus was on Eni. “The expectation is that Qatar Petroleum and Exxon will go in on this together,” the source said, adding a Qatar Petroleum delegation planned to visit Mozambique before the year end. The sources cautioned no decision had as yet been taken by the Qatari company. Qatar Petroleum did not respond to requests for comment and Exxon and Eni declined to comment. Saad al-Kaabi, Qatar Petroleum CEO, recently confirmed the group was looking at assets in Africa.

Located in Mozambique’s Rovuma Basin, Eni’s Area 4 is one of the biggest discoveries of recent times, holding about 85 trillion cubic feet of gas. Eni CEO Claudio Descalzi, who has spoken of selling a stake of up to 25 percent, said earlier this month a detailed agreement had been reached with a partner. In 2013 Eni sold 20 percent of Area 4 to China’s CNPC for $4.2 billion but since then oil and gas prices have dropped by more than half. A banker with knowledge of the matter said a 25 percent stake in the field could be worth in the region of 2 billion euros.

Exxon and QP are already close business partners in Qatar, where Exxon’s technical know-how helped the tiny Gulf state to develop its gas resources and become the world’s biggest as well as lowest-cost LNG producer.

Since then, both companies have jointly moved to exploit international LNG growth opportunities, including plans to build the Golden Pass liquefaction plant in the United States and bidding for exploration acreage in Cyprus.

A moratorium on new Qatari gas production since 2005 has hobbled domestic expansion opportunities at a time of intense competition for global LNG market share as new producers such as Australia challenge Qatar’s dominance. “The (Mozambique) gas will go east and so having Qatar on board with all its experience makes a lot of sense,” a banker with knowledge of the matter said.

 

(Writing by Stephen Jewkes, additional reporting by Oleg Vukmanovic in Milan, editing by William Hardy)

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IMF weighs lifting freeze on Guinea-Bissau funding

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By Joe Bavier

ABIDJAN (Reuters) – The International Monetary Fund could lift a suspension on payments aimed at helping Guinea-Bissau emerge from years of political turmoil following an evaluation mission this week, the institution’s country representative said on Monday.

The IMF agreed a programme with Guinea-Bissau last year after 2014 elections drew a line under a coup two years earlier – one of a succession that have spawned chronic instability and helped make the West African country a haven for South American cocaine traffickers.

Disbursements were suspended in June, however, after the government took on 34 billion CFA francs ($58.3 million) in bad loans from two private banks. Donors followed suit and suspended budget support for 2016 equal to around 2.1 percent of GDP.

IMF representative Oscar Melhado told Reuters by email that the Fund welcomed a government decision to cancel the bailouts, whose value amounted to around 5.5 percent of GDP.

“The only remaining obstacle is the refusal of the banks to accept the bad portfolio back into their books,” he said.

The IMF had argued the bailouts benefited the wealthiest citizens and foreign investors. Authorities had said they were needed to shield the private sector from bankruptcy.

Monday was a public holiday and the banks, Banco da Africa Ocidental and Banco da União, were not available for comment.

Melhado said the government should also commit to implementing prudent macroeconomic policies and key structural reforms during the visit due to begin on Tuesday, which constitutes the first and second reviews of the IMF programme.

Disbursements worth 4.1 billion CFA could still be made this year if the reviews are approved by the IMF’s board in December.

Total donor contributions, including direct budget support and financing for targeted sectors and projects, typically make up around 80 percent of Guinea-Bissau’s budget. After the IMF freeze, Finance Minister Henrique Horta described the economic situation, including a budget deficit amounting to about 3.5 percent of GDP, as “catastrophic”.

The government of Guinea, which is helping to mediate in its smaller Portuguese-speaking neighbour, said earlier this month that Guinea-Bissau would not be able to pay the salaries of civil servants and the security forces from October.

“We hope that donors will resume support following the IMF. It would depend on each donor’s policy,” Melhado said.

The IMF visit comes days after an agreement to form a new government, ending a year-long political crisis that has paralysed state institutions.

($1 = 582.9600 CFA francs)

 

(Reporting by Joe Bavier; Editing by Mark Trevelyan)

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Eastern Libyan commander’s forces seize two key oil ports

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By Ayman al-Warfalli

BENGHAZI, Libya (Reuters) – Forces loyal to eastern Libyan commander Khalifa Haftar on Sunday seized at least two key oil ports from a rival force loyal to the U.N.-backed government, risking a new conflict over the OPEC nation’s resources.

Ahmed al-Masmari, a spokesman for Haftar’s self-styled Libyan National Army (LNA), said LNA fighters seized control of Es Sider, Ras Lanuf and Brega, but still faced resistance at the port of Zueitina and around the nearby town of Ajdabiya.

The attacks on Libya’s major oil ports by Haftar, who opposes the U.N.-backed Government of National Accord (GNA), pushes the North African state towards a broader battle over its oil resources and disrupts attempts to restart production.

Armed conflict, political disputes and militant attacks have reduced Libya’s oil production to about 200,000 barrels per day (bpd) from 1.6 million bpd it was producing before an uprising and fall of Muammar Gaddafi in 2011.

Haftar, a former army general who has been a divisive figure in Libya since Gaddafi was toppled, has resisted attempts to integrate him into a unified armed forces and overcome divisions between the east and west regions.

Many in western Libya and Tripoli criticize Haftar as a former Gaddafi ally bent on establishing a military dictatorship, but he has become a political figurehead for many in the east who feel abandoned by the capital.

The state-run National Oil Corporation confirmed Ras Lanuf and Es Sider were under full control of Haftar forces while Zueitina was still held by loyalist forces.

 

EXPORT QUESTIONS

The attacks complicate Western attempts to bring together Libya’s rival armed factions under the GNA and stabilise a country where chaos allowed Islamist militants and migrant smugglers to operate across swathes of territory.

Control by Haftar’s brigades will also raise questions for the market about the legality of crude exports by a force opposed to the internationally recognized government in Tripoli.

A government and parliament based in the east still resist the GNA’s authority in Tripoli and they have in the past threatened to try to sell crude themselves.

The ports targeted by the LNA were previously under the control of the Petrol Facilities Guard (PFG), which struck a deal with the GNA in July to end its blockade of Ras Lanuf, Es Sider and Zueitina.

A port engineer confirmed that Haftar’s forces had entered Ras Lanuf and Es Sider, Libya’s largest, and said a tank at Es Sider had been set alight in the clashes. The NOC said the blaze was in a small fuel tank for power generation.

The LNA’s claims of control could not immediately be verified and Ali al-Hassi, a PFG spokesman, said fighting was continuing at Ras Lanuf.

In recent weeks, as the PFG struck its deal with the GNA to try to restart exports, the LNA mobilised in the area leading to fears of a struggle for control.

Libya’s National Oil Corporation has been removing oil stored at Zueitina because of fears it could be lost during any clashes.

Ras Lanuf and Es Sider were badly damaged earlier this year in attacks by Islamic State militants based in Sirte, where they are currently on the verge of defeat by forces aligned with the GNA backed by U.S. air strikes.

 

(Additional reporting by Ahmad Ghaddar in London; Writing by Aidan Lewis; Editing by Patrick Markey and Raissa Kasolowsky)

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Algerian energy minister sees consensus on need to steady oil price – APS

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By Lamine Chikhi

ALGIERS (Reuters) – Algeria’s energy minister has said there is a consensus among OPEC and non-OPEC members about the need to stabilise the oil market to support prices, state news agency APS reported on Saturday.

Noureddine Bouterfa was speaking after meeting his Saudi counterpart Khalid al-Falih and OPEC Secretary-General Mohammed Barkindo in Paris late on Friday.

Bouterfa has travelled to Qatar, Iran and Russia this week to push for the oil price to be stabilised between $50 and $60, and said he was “confident” about the outcome of an OPEC meeting to be held in Algiers on Sept. 26-28.

Bouterfa said Algeria would submit a proposal to steady prices at the meeting. “Our discussions with our partners show that there is a consensus around the necessity of stabilising the market. That is already something positive,” Bouterfa said.

“We are in contact with the members and the secretary-general of OPEC and that is part of this work of achieving a consensus and I am optimistic.”

“There is support from Saudi Arabia, Qatar, Iran, Venezuela, Kuwait, and from non-OPEC countries, notably Russia.”

Barkindo told APS, in remarks published later, that OPEC was not seeking a definite price range for oil but rather “sustainable stability” for the market.

Asked after the Friday meeting what reasonable price OPEC was targeting, he said: “This is not what we are seeking at the moment.”

Algeria is hosting a meeting of the International Energy Forum alongside the OPEC meeting later this month, and Bouterfa said he had discussed both sessions with Falih and Barkindo in Paris.

Algeria is among the oil producers to have taken a heavy hit from the halving of oil prices over the past two years.

Moves towards clinching a global deal on stabilising crude output come five months after talks for such a deal failed when Saudi Arabia insisted Iran join the pact.

Tehran says it supports any measures to stabilise the market, but has stopped short of indicating whether it would join a global deal before its production reaches 4 million barrels per day, the level at which it says it was pumping before the imposition of Western sanctions in 2012.

 

(Additional reporting by Hamid Ould Ahmed; writing by Aidan Lewis; Editing by Kevin Liffey)

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South Africa’s rand tumbles from two-week peak as uncertainty saps momentum

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JOHANNESBURG (Reuters) – South Africa’s rand extended losses against the dollar to more than 1 percent on Friday, weighed down in part by fears over an ongoing investigation into Finance Minister Pravin Gordhan which exacerbated the impact of a decline in global risk appetite.

Stocks were up slightly, buoyed by resource firms Anglo American and BHP Billiton. The JSE’s benchmark Top-40 index was up 0.4 percent by 1110 GMT.

At 1110 GMT the rand had weakened 1.22 percent to 14.3180 per dollar, its weakest in three sessions.

The unit had touched its firmest in two weeks on Thursday before it began backtracking as doubts over Gordhan’s tenure and uncertainty in global markets over the path of interests rates in the United States and Europe stalled the currency’s progress.

Gordhan, at two separate events on Thursday, questioned the motive of a police investigation into his role in setting up a surveillance unit at the tax service.

“It seems like the rand is rebalancing after over-extending in the previous sessions and traders are waiting for some definitive direction,” said head of foreign exchange at Capilis Asset Management Giacomo Bonavera.

“Around 14.20 or 14.30 might be nice place for it to settle in the medium term. But any bad news from the political side would weaken the currency.”

The rand slipped nearly 10 percent in the wake of police unit the Hawks issuing Finance Minister Gordhan with a summons on Aug. 23 to answer questions about a spy unit in the revenue service during his time as commissioner.

Opposition parties have called the investigation a witch-hunt and a veiled attack on the independence of the treasury.

Government bonds were also weaker, with the yield on the 2026 benchmark issue climbing 14 basis points to 8.74 percent.

A decision on Thursday by the European Central Bank to keep interest rates at record lows received a mixed reaction from emerging markets.

Appetite globally for the high-yielding assets waned as the length that rates would remain low in Europe and in the United States remained uncertain.

 

(Reporting by Mfuneko Toyana and TJ Strydom; Editing by Robin Pomeroy)

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Nigeria postpones elections in Edo state over security threats

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ABUJA (Reuters) – Nigeria’s Independent National Electoral Commission (INEC) has postponed elections in the southern state of Edo to Sept. 28 from Sept. 10 because of security threats, a government official said on Thursday.

Soyebi Solomon, the national commissioner in charge of voters, education and publicity, said after a meeting with police and security agents that a delay “is necessary in view of threats of terrorists activities in Edo State and other states of the federation during the election.”

The decision highlights another security hotspot in Nigeria, which is fighting Islamist militants of Boko Haram in the north and militants in the oil-producing Delta region in the south.

 

(Reporting By Libby George; editing by Grant McCool)

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Africa’s growth story : Positive changes and a bright future

Comments (0) Africa, Economy

Africa is one of the fastest growing economic regions on the planet. Some say that the continent is spurring toward modernization and prosperity. Other commentators have pointed out that Africa has experienced strong periods of growth in the past that haven’t sustained long enough to affect major change on the continent.

Can Africa keep on growing?

In the 1970s, Africa saw a period of intense growth. At the time optimists were enthusiastic that Africa was emerging from the shadows, and that a future of accelerating prosperity awaited. This was not to be the case. Africa’s 70s boom was largely driven by peaking global commodity prices; when the bubble burst, Africa’s prospects deflated.

Pessimists suggested that a similar fate loomed ahead when global commodity prices inevitably declined. This dreary prediction would likely have become reality if Africa’s economic landscape was the same as in the past. Fortunately, it is not. New factors are at play and there are promising indicators that the region’s growth potential is more robust than in times gone by.

Africa’s changing relationship with resources

It would be disingenuous to suggest that natural resources aren’t still an important component to Africa’s growth. Oil exporting nations such as Nigeria and Angola have suffered in the wake of the recent global slump in oil prices, while countries such as South Africa and the Democratic Republic of the Congo are ailing from the downturn in demand for minerals. The end of the global commodities super-cycle has certainly hurt many nations in the region.

However, Africa still posted 3.0% growth for 2015-16, and is expected to bounce back to 4% in 2017 and increase from there. Considering the state of the global economy, the results could have been far more severe.

The blow has been softened by the changed dynamic of Africa’s relationship with commodities. Firstly, the emergence of powerful Asian and Middle Eastern economies has provided African nations with new outlets for their resources. Today, Africa trades as much with Asia as it does with its traditional partner, Europe.

With hungry new markets competing for commodities, African exporters have been able to negotiate themselves better deals and secure more value from their assets. Collaborative framework agreements have been struck with new partners, often seeing African resource rights exchanged for substantial infrastructure and technology packages.

Perhaps more importantly, on the whole Africa is becoming less dependent on resources. According to a report by the global management consultancy McKinsey & Company, natural resources accounted for only 32% of the continent’s GDP growth from the year 2000 through to 2008. Africa is finally cultivating a key ingredient to sustained economic success: diversity.

New business, new Africa

Across the continent, new sectors are rapidly emerging. Telecommunications and financial services are two standout examples. Renewable energy projects are flourishing and show significant potential for future growth. Similarly, agriculture is booming and holds major potential for the future given Africa’s abundance of under-utilized arable land. The emergence of middle class consumers has given rise to a vibrant retail sector that promises to expand cyclically, as ever more citizens acquire access to disposable capital. Other industries such as manufacturing, infrastructure and construction have also been strong performers.

These flourishing sectors owe much to Africa’s improved political climate. Firstly, while some individual nations are still beleaguered by wars and terrorism, on the whole Africa is more peaceful today than in past decades. This has created the stability and climate needed for new businesses to grow.

Fiscal politics have also drastically improved across many parts of Africa. While the measures utilized vary from nation to nation, many successful policies have seen widespread adoption across the continent. Such actions include large-scale privatization of state-owned services, efforts to decrease inflation and stabilize currencies, tackling foreign debt and budget deficits, new trade agreements, and the implementation of stronger legal frameworks. These measures have laid the foundations for modern, investor friendly economies that have allowed the aforementioned sectors to immerge.

Africa averaged a mere 0.9 % growth for the first half of the 1990s. Yet this year, in the wake of the commodities downturn, and the sluggish global recovery from the financial crisis, Africa posted 3% growth, a 15 year low from which it will soon recover. Ultimately, the outlook is extremely promising. Buoyed by better governance, diversification and more globalized economies, it appears that Africa has cast off its shackles to commodities and has arrived at sustainable long term growth.

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Wizzit: The mobile application servicing South Africa’s underprivileged

Comments (0) Africa, Business, Economy

wizzit-4-2011-3-1

Turning 12 this year, Wizzit is an established name in South Africa. It connects a generation of ‘unbanked’ people with safe, reliable access to financial services including debit transactions, transfers and online banking. Similar models such as M-Pesa in Kenya have since appeared on the scene, challenging Wizzit’s industry dominance.

Removing the need to travel long distances to visit a branch has drawn a whole new demographic into banking. Where cash transactions dominated in the past, South Africa’s urban poor are slowly coming around to the benefits of using financial services to receive salary, transfer money and pay for products.

Wizzit’s beginnings, financial services for those left behind

Wizzit was established in 2004 by South African banker, Brian Richardson. He noticed a niche in the market; the opportunity to provide mobile banking services to those who couldn’t obtain traditional bank accounts due to geographical locations and economic constraints. He explains: “Of the 7 billion people on the planet, half, or 3.5 billion people, have no bank account.”

Servicing this untapped market became a priority for Richardson. Not only did he recognize a major business opportunity, but the chance to offer a service that would bring major social benefits. Since its inception Wizzit has spread to Zambia, Namibia, Rwanda and Botswana in Africa and Romania and Honduras globally, proving that a lack of access to secure, convenient and affordable banking is an international problem.

An industry first, now many have followed

Wizzit was a true pioneer in early 2000s. Its success sparked major change, prompting traditional banks to take note and develop their own mobile application models to connect with this market. In just over 10 years, Wizzit has provided over 7 million people with affordable and easy mobile banking in 13 different countries. It has also played a part in decreasing the alarming number of ‘unbanked’ South Africans from 42% in 2004 to 23.5% in 2016.

With affordability a high priority, Wizzit couldn’t compete with the big-budget advertising that the major banks used to attract new customers. They developed an ingenious way of marketing their business while simultaneously helping to address unemployment problems in South Africa: WIZZkids. These were typically young, low-income individuals who live in the communities from which they recruit their customers. They acted as salesmen for the company, signing up friends and neighbors to their bank accounts and financial services. A caveat, they have to be currently unemployed to become a WIZZkid, helping some of the most disadvantaged people and communities out of debilitating poverty cycles.

Next for Wizzit, global expansion

Wizzit has recently expanded into micro-loans for individuals and small businesses and has plans to continue both its African and global expansion. Egypt, Myanmar, Mexico and Colombia are next. According to CEO Brian Richardson, they haven’t even needed to advertise in these countries, partner organizations have reached out to them. Hopefully these countries will benefit as South Africa has, bringing banking to those who would otherwise be excluded.

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S.Africa’s manufacturing slows, mining falls as recession fears resurface

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JOHANNESBURG (Reuters) – Growth in South Africa’s two key sectors slowed on Thursday, with weak activity renewing fears South Africa may struggle to avoid recession and a downgrade of its debt to junk status by year’s end.

Manufacturing output braked to below 1 percent year-on-year while mining output contracted sharply, dousing optimism earlier in the week after second quarter gross domestic product bounced back from a contraction in the first quarter.

Manufacturing slowed to 0.4 percent year-on-year in July, well below expectations of 3 percent after rising by a revised 4.7 percent in June.

Mining output contracted by 5.4 percent in the month from a 3 percent contraction previously, data from Statistics South Africa showed, below expectations of a 1.4 percent contraction.

Production of electrical machinery shrank 13.7 percent, basic iron by 4.9 percent and vehicle production by 3.8 percent, all on a year-on-year basis.

“The first Q3 South African output data support our view that the rapid growth reported in Q2 is unlikely to be sustained,” Africa analyst at Capital Economics John Ashbourne said in a note.

Africa’s most industrial economy grew by a surprise 3.3 percent in Q2, data on Tuesday showed, but was only up 0.6 percent year-on-year, prompting analysts and the central bank governor to warn that growth remained insufficient.

Reserve Bank Governor Lesetja Kganyago said on Wednesday that current levels of growth were inadequate and needed to be closer to 6 percent. The Bank forecasts zero percent growth in 2016.

Ratings firms Fitch and S&P Global Ratings, which both rate South Africa’s debt one notch above junk status, have cited low growth as possible trigger for a downgrade in reviews in December.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia and Jon Boyle)

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FirstRand bank warns South Africa faces downgrade this year

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JOHANNESBURG (Reuters) – The chief executive of South African’s biggest lender by market value FirstRand Ltd said the chances of a sovereign downgrade for Africa’s most industrialised country this year had risen due to a stagnant economy and political uncertainty.

Johan Burger said on Thursday after reporting the bank’s annual results that a downgrade would negatively impact lending and lead to banks tightening credit extension. The central bank has forecast growth at zero percent this year.

FirstRand reported a 5 percent rise in full-year headline earnings per share (EPS), slower than the previous year which it blamed largely on a sluggish economy, sending its shares down nearly 3 percent in early trade.

“The probability has actually increased for a downgrade,” he told Reuters. “That would have a negative impact on lending.”

Burger said a downgrade could hurt clients’ ability to afford credit as the currency weakens and interest rates rise.

“Low growth combined with weaker balance sheets of some state-owned enterprises (SOEs) has added fiscal risk which is likely to result in a sovereign downgrade by the end of 2016,” FirstRand said in a statement.

Moody’s rates South Africa two notches above junk, while both S&P and Fitch left ratings at BBB- in June, one notch above junk, however both agencies warned about the weakness of growth and heightened political risks.

A police investigation into Finance Minister Pravin Gordhan over a surveillance unit set up years ago at the tax agency when he headed the department has rocked local markets and led to concerns that ratings agencies could downgrade the country in their reviews expected by December.

State-owned enterprises, such as national carrier South African Airlines and power utility Eskom have struggled financially and relied heavily on government guarantees.

FirstRand, which owns First National Bank and vehicle finance unit Wesbank, said headline EPS rose to 399.3 cents in the year to June 30 from 381.4 cents a year earlier.

Earnings were lifted by a 13 percent increase in net interest income and a 7 percent rise in non-interest revenue. Headline EPS is the main profit measure in South Africa; it strips out certain one-off items.

Shares in FirstRand fell 2.4 percent to 46 rand by 0837 GMT, compared to a 0.4 percent decline in the benchmark Top-40 index.

 

(Reporting by TJ Strydom; Editing by James Macharia)

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