ABIDJAN (Reuters) – Ivory Coast has awarded a project to upgrade its second port of San Pedro to global shipping giant Mediterranean Shipping Company (MSC) and the Bilal Group, a government spokesman said on Wednesday.

Speaking after a cabinet meeting in the commercial capital Abidjan, Bruno Kone said MSC would invest 122 billion CFA francs ($209.14 million) and the Bilal Group 186 billion CFA francs ($318.83 million) under the build-operate-transfer deal.

($1 = 583.3300 CFA francs)

(Reporting by Loucoumane Coulibaly; Editing by Joe Bavier and Emma Farge)

Read more

By Libby George

ABUJA (Reuters) – Nigeria will not increase its gasoline prices, President Muhammadu Buhari told his oil minister and state oil firm head, summoned to his villa last week, sources at the compound said.

Oil Minister Emmanuel Ibe Kachikwu, the head of state oil firm NNPC Maikanti Baru and the entire government have stepped up efforts to keep fuel flowing into Nigeria without repeating the price increase of May and risking civil unrest.

Shortly before the meeting former Nigerian National Petroleum Corporation (NNPC) bosses had said such an increase may be needed.

A steep devaluation of the naira currency has made sales of petrol at government capped prices unprofitable, marketers say. Months of unrest in the Delta region has also cut Nigeria’s oil output and left as little as half the crude available that it needs to swap for refined motor fuel from trading companies.

“Gasoline is the top priority” for NNPC, said one oil industry source who, like many in Abuja was meeting daily with officials in the oil company. The company, and government, the source said, “will do whatever they can” to stop shortages and keep prices stable.

In a statement last week, NNPC’s Petroleum Products Pricing Regulatory Agency, which oversees downstream regulations, said there was “no basis” for price increase fears, and assured the nation of “uninterrupted supply and distribution.”

TAKING TO THE STREETS

Nigeria has four oil refineries, but none of them have been able to run consistently enough to provide Africa’s most populous nation with enough gasoline and diesel – despite its historic position as Africa’s largest oil producer, pumping around two million barrels per day.

That is, before unrest cut output by around a third earlier this year.

Available, affordable gasoline is crucial to the government’s credibility. Shortages bring the nation to a halt, leading to days-long queues for fuel and power cuts at small businesses that rely on generators to withstand frequent power outages.

Nigerian unions have already threatened to take to the streets if prices rise further, as consumers face inflation that is at an 11-year high of 17 percent.

The Independent Petroleum Marketers Association of Nigeria, which represents small and medium fuel sellers, is, however, calling for higher prices. It argues that the current state cap of 145 naira per litre is far too low, given the devaluation.

The currency fell to 420 per dollar on the parallel market last month, compared with the rate of 285 that the government was using when it set the cap.

Gasoline is imported into Nigeria by NNPC and independent importers, with each usually providing half the total needed, but the government said it has been providing some 90 percent in recent months.

FOREX RESERVES SQUEEZED

NNPC, beset by dollar and oil shortages, is running a tender to buy gasoline over the next six months, as sources say it is concerned the current system of swapping crude and relying on other importers might not provide enough.

Militant attacks have hit pipelines and cut output by more than 700,000 barrels per day. As a result, NNPC has only around four crude oil cargoes per month this autumn to swap for gasoline, according to sources, compared with at least 10 cargoes during the spring months.

In its tender, NNPC asked for 90 days to repay in either cash or crude, which is as much as three times longer than the standard repayment window.

But the longer repayment, oil industry sources said, will both alarm some suppliers and could force NNPC to pay more.

“Companies will supply it – but they will submit terms where they think they can make money,” another oil company source said, adding it would be difficult for NNPC to get competitive prices.

The naira collapse, and lower oil exports, has cut significantly into Nigeria’s foreign exchange reserves, squeezing access to the U.S. dollars importers need.

But NNPC made sure gasoline importers were able to access dollars. Oil majors including Chevron, Exxon and Shell have to buy naira for local operations, a key channel through which dollars arrive. NNPC has funnelled around $500 million of this to gasoline importers over the past several months, sources said.

“If fuel marketers are unable to recover cost, they will simply stop importing,” regardless of whether they have dollars, said Alan Cameron, economist and director of Exotix.

Some are sceptical of NNPC’s ability to fill the gap, and warned that a failure could have serious consequences.

“The government is unlikely to remove the price cap introduced in May, meaning that the fuel shortages will continue throughout Q3, further hurting the already faltering economy,” said Malte Liewerscheidt senior analyst for Africa with UK-based risk advisory group Maplecroft.

(Additional reporting by Felix Onuah in Abuja and Ron Bousso in London. Editing by William Hardy)

Read more

ACCRA (Reuters) – Ghana’s budget deficit is expected to fall to 4.9 percent of GDP this year against an initial projection of 5.3 percent, President John Mahama said on Tuesday in a speech to present highlights of the ruling party’s manifesto ahead of an election in December.

Gross domestic product is expected to grow more than 8 percent next year, compared with a projected 4.1 percent this year, he said.

Positive economic news is crucial for Mahama’s hopes of winning a second and final four-year term in office, given that the economy slowed sharply in the years after he came to power in 2012.

The slowdown was caused by lower global prices for gold, oil and cocoa exported by Ghana and a fiscal crisis that forced the government last year to begin a three-year aid deal with the International Monetary Fund.

Mahama is expected to face a tight contest against Nana Akufo-Addo, leader of the New Patriotic Party, which ruled the country for eight years until it lost an election in 2008.

“Our opponents have been seeking to belittle our achievements, claiming that we have benefited from more resources than any other government in our country’s history,” Mahama said.

“It is much easier to deny that anything has happened than to say that there’s been progress but that they can do better,” Mahama said.

(Reporting by Matthew Mpoke Bigg; Editing by Grant McCool)

Read more

JOHANNESBURG (Reuters) – South Africa’s economy is not in “recession territory” and there is a more than 50 percent chance ratings agencies will not downgrade it to “junk” status this year, Finance Minister Pravin Gordhan said on Tuesday.

Treasury also plans to stick to its deficit and debt targets set-out in a budget delivered in February, Gordhan told business leaders in Johannesburg.

“We will retain and sustain our fiscal credibility notwithstanding lower growth, which will put pressure on the revenue and the expenditure side,” Gordhan said.

(Reporting by Mfuneko Toyana; Writing by Joe Brock; Editing by Ed Cropley)

Read more

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)

Read more

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)

Read more

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)

Read more