Equatorial Guinea Says It Held Talks With Trafigura for $2 Billion in Oil Financing
Equatorial Guinea says it held talks with Trafigura Group for the possibility of $2 billion in financing from the commodity trader to support development of the nation’s hydrocarbon sector.
Trafigura last week “proposed a loan” during talks with government officials including Vice President Teodoro Nguema Obiang Mangue, according to a July 31 statement from the government.
Trafigura declined to comment on Tuesday. The press office of the vice president referred to the government statement and otherwise declined to comment. Equatorial Guinea’s minister of mines and hydrocarbons, Antonio Oburu Ondo, didn’t immediately answer a call and email seeking comment.
A deal may not come to fruition, and the terms of any potential agreement aren’t yet clear.
However, the discussions highlight how cash and revenue-strapped African nations are turning to traders for funding to boost producing assets and energy supplies. Gunvor Group recently financed Gabon’s deal to buy crude producer Assala Energy for about $800 million, while Vitol is becoming the sole supplier of oil products to Uganda.
In Equatorial Guinea, state-owned oil and gas company GEPetrol recently took full control of the Zafiro oil field after the departure of energy major Exxon Mobil Corp. The nation is a member of the Organization of the Petroleum Exporting Countries.
Its oil boom enriched the ruling elite, including President Teodoro Obiang Nguema Mbasogo, the vice president’s father, who seized power in 1979. He established political ties with the US and gave the country one of the highest rates of gross domestic product per capita in Africa. Yet after decades of oil production, Equatorial Guinea has some of the continent’s worst social indicators and a poor human rights record.
Exxon said earlier this year that it would transfer investments in the country to the government after a decision to leave that was consistent with its long-term strategy. GEPEtrol contracted Petrofac in April to support its operations.
The vice president has recommended that the government and the commodities trader move toward a memorandum of understanding, according to the statement.
