VenturesNow

Demand for Namibian assets surges following more oil discoveries

Published

3 months ago

August 28, 2024

Interest in Namibian assets has surged since more crude oil reserves were discovered there; as a result, an index fund that tracks local government bonds is about to see its largest annual increase ever.

On both the Namibian Stock Exchange and in South Africa, there is an exchange-traded fund that tracks local government bonds. Its value has gone up over 20% in U.S. dollars since Galp, based in Portugal, found out in April that the Mopane field could hold at least 10 billion barrels of oil.

There have been at least 12 other big oil companies interested since then.

With a return of almost 12% in U.S. dollars, the fund is on track for its best year ever. An ETF that follows the closely watched JPMorgan developing markets bonds index has gained 3.6% so far this year.

Since the finding, yields on local sovereign bonds have dropped even more. Since April, yields on bonds due in 2037 have dropped about 150 basis points, and yields on papers due in 2050 have dropped around 200 basis points.

“Most of the bonds issued are held by Namibian pension funds, but we are seeing some foreign buying now. We have seen massive yield compression … since the oil discoveries were first announced,” said Rowland Brown, co-founder of Cirrus Capital based in Windhoek.

Brown also said that Namibian government bonds were still settled on paper, so foreign investors were looking to the ETF to get more invested in the resource-rich country.

Major international energy companies are interested in the southwest African country because of several big finds along its coast in the past few years, even though the country hasn’t produced any oil or gas yet. Topaz Energy and Shell say they plan to start producing in 2029 or 2030.

The local stock market index has grown by more than 19% so far this year in U.S. dollars, while MSCI’s index of developing markets stocks has only grown by 7.5%.

The Namibian dollar has gotten stronger against the US dollar by 4.5% this year, ending a four-year losing run. Since December 2019, LSEG data shows that total central bank reserves have gone up by nearly $1 billion.

People will be interested in any changes to Namibia’s economic policy after the end-of-the-year presidential election. This is because the country has a lot of economic promise after finding oil.

VenturesNow

Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.

VenturesNow

Dangote refinery begins petroleum sales to West Africa

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

In an indication to traders that the activities of its mega-refinery might soon disrupt regional fuel markets, Nigeria’s private Dangote Petroleum Refinery has started exporting refined petroleum products to neighbouring West African nations.

According to a Bloomberg story on Tuesday, a tanker had transported a consignment of petrol from the Dangote Petroleum Refinery to seas off the coast of Togo, a nearby West African nation. The article cited data from Vortexa, Kpler, Precise Intelligence, a port report, and a ship-tracking tool.

According to the source, a CL Jane Austen recently departed west after loading over 300,000 barrels from Dangote.

Recall that Mustapha Abdul-Hamid, the chairman of the Ghana National Petroleum Authority, stated last month that the nation is thinking of purchasing petroleum products from the Dangote refinery in order to reduce the approximately $400 million it spends each month on more costly exports from Europe.

Speaking at the OTL Africa Downstream Oil Conference in Lagos, the chairman of NPA, Ghana, said that by eliminating freight expenses, buying from Nigeria instead of Europe will lower the cost of other products and services.

“If the refinery reaches 650,000bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid said.

Two weeks ago, it was announced that the refinery would start exporting fuel to Namibia, Angola, and South Africa. Four more African nations—Niger Republic, Chad, Burkina Faso, and Central Africa Republic—had also begun talks with the refinery, it was said.

According to a very reliable source who spoke directly to one of our reporters, the management of the refinery with a capacity of 650,000 barrels per day was in the advanced stages of negotiations with the nations to begin lifting petroleum.

“I can confirm to you that talks are actually at the advanced stage with Ghana, Angola, Namibia, and South Africa, while the initial discussion is coming up with Niger, Chad, Burkina Faso, and the Central African Republic,” the source said.

The petroleum product shipment is currently floating off the coast of Lome, which is a well-liked location for ship-to-ship transfers, according to the source.

Furthermore, the final destination of the cargo of the CL Jane Austen is uncertain.

Despite being off Togo, the region is frequently utilised for ship-to-ship transfers, thus the gasoline may eventually be transported elsewhere.

“While the shipment is tiny in the context of the global gasoline market, it signals the ramp-up of Dangote’s production and the potential to export significant volumes of gasoline beyond Nigeria, which could upend regional markets.”

Last month, the refinery sent its first shipment of petrol by sea to Lagos, a neighbouring commercial centre.

Under the regulatory statute, the Federal Government last month terminated the state-owned oil company’s monopoly on purchasing gasoline from the plant for domestic use, but it has permitted the ongoing importation of fuel from the US and Europe.