Gulf states working on US$6bil in Africa energy deals
Dubai: Middle East countries have shown interest in or completed deals for at least US$6bil of African energy assets in recent weeks, demonstrating a larger investment appetite on the continent by the region.
Abu Dhabi National Oil Co is among companies shortlisted to buy Shell Plc's downstream assets in South Africa valued at about US$1bil, people familiar with the deal said last month.
Adnoc and other companies in the United Arab Emirates have expressed interest across the breadth of Africa's energy sector in a matter of weeks.
Gulf states have ramped up investment in energy projects on the continent ranging from renewable plants to oil fields in recent years.
Bilateral trade between Africa and the United Arab Emirates increased 38% in the two years through 2023 to US$86bil , according to an African Export-Import Bank report.
The Gulf nations are diversifying their oil and gas industries by adding 'assets and investments in other jurisdictions that can help smooth out cyclical curves and localised market fluctuations', said Andrew Farrand, Middle East and North Africa director for Horizon Engage, a political risk consultancy.
'African countries offer great opportunities in this regard.'
Dubai-based Alpha MBM Investments LLC, a private investment office led by a member of the Dubai royal family, signed an agreement with Uganda to build a 60,000 barrel a day refinery and hold a 60% stake in the business, the nation's presidency said in a March 30 statement.
A deal for the US$4bil project follows a number of failed attempts to build a domestic refinery that will utilise crude discovered in landlocked fields.
Alpha MBM didn't respond to emails seeking comment.
Such arrangements offer a welcome change for governments to deal with partners who are already resource-rich, 'rather than primarily focusing on resource extraction to serve their home economies', Farrand said.
Kenya renewed a contract to buy fuel on credit for two more years from Adnoc, Saudi Aramco and Emirates National Oil Co that the country credits with helping to stabilise the currency.
Some of the imports are shipped on to markets in South Sudan, the Democratic Republic of Congo and Burundi. — Bloomberg
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