Talks on Zambia, Saudi Arabia oil deal nears completion

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Talks between the Zambian and Saudi Arabian government on the possibility of sealing an oil supply deal reached an advanced stage and the deal will soon be signed, the Times of Zambia reported Wednesday.

Ministry of Mines, Energy and Water Development Permanent Secretary Charity Mwansa said details of the agreement will be unveiled once the contract had been signed.

“I must say the negotiations on the fuel deal have greatly advanced and right now we are just about to sign a contract with Saudi Arabia. We are currently waiting for the contract which is expected in the country this week from Saudi Arabia,” she was quoted as saying by the paper.

The government, she said, was looking at a government-to- government deal that would enable it to get access cheap source of petroleum products.

The two governments started negotiations last year.

According to her, it was the government’s intention to lower the pump prices of fuel hence its decision to secure cheaper sources from countries like Saudi Arabia amidst reduced prices of oil on the global market.

The government was also looking at other factors such as insurance and transport in order to reduce the pump prices of fuel further, she added.

The Zambian government recently announced a reduction in fuel pump prices following the reduction of the price of the commodity on the international market which currently stands at 58 U.S. dollars per barrel.

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9 COMMENTS

  1. iyi e boom!
    this is what we have been crying for as fuel price has pushed the cost of living higher up.

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    • This should be a short term goal but we need to start working on a long term goal of acquiring oil from Angola before we start prospecting for our own locally.

      Angola is a strategic trading partner with the right balance of payment system in place both these countries can benefit tremendously. We need their cheap oil because their production costs are very low.

      Saudi Arabia’s production costs are higher than Angola’s and in the past their biggest client has been the US. Now that the US has cut down on importing due to hydro-fracking in North Dakota and West Texas, demand is low for the Saudis.

      They are simply looking for new markets since their number one importer (USA) have enough supplies. This is nothing to write home about, Angola is where it is at right now.

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    • A pipeline from Lubito into Ndola would make more sense … I am reliably informed that petrol is $0.75 per gallon in Angola. Pipeline costs including handling and other logistical costs of another $0.50 would mean our landing costs of $1.25 per gallon.

      Imagine the kind of savings this would bring, imagine the kind of leverage businesses would have given that energy costs are a huge part of service as well as product delivery.

      We need to focus on Angola not only for the long term but also in the short term. In fact, the reintroduction of Bengwela Railways would be another reason we should focus on that because rail transportation is even cheaper.

      For instance, one 33,000 gallon wagon costs us $0.05 per gallon from California to Tennessee same distance from Lubito to Ndola.

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    • Pipeline from Angola to Ndola? The reason we don’t buy from Angola is that their crude is much more difficult to refine….you need a new refinery all together or you have to procure finished products….let’s not just get carried away with excitement without thinking! !

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    • @1.1 YOU ARE VERY RIGHT. ANGOLAN OIL SHOULD EVEN BE CHEAPER THAN SAUDI OIL DUE TO A BIG DIFFERENCE IN HAULAGE DISTANCES. IN FACT ITS HIGH TIME AFRICA STARTED DOING BUSINESS AMONGST THEMSELVES. HOWEVER, ANGOLA IS EXPANDING AND IMPROVING ITS REFINERY BASE IN ORDER TO SATISFY DEMAND, ACCORDING TO PREVIOUS REPORTS IN MEDIA. ON PRINCIPLE THE DEAL BETWEEN GRZ AND ANGOLAN GOVT HAS BEEN NEGOTIATED AND ONLY AWAITING IMPLEMENTATION ONCE THE PROJECT IS COMPLETED. HOWEVER, THE DEAL WITH SAUDI ARABIA IS ALSO VERY IMPORTANT AND SHOULD BE QUICKLY CONCLUDED AND SIGNED.

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    • @jay whatever:

      You have no clue what you’re talking about, California crude is harder to refine than Angolan. The entire west coast of Africa produces “light” crude oil starting with Nigeria, Ghana, down to DRC, Angola and Namibia.

      Furthermore, Angola is in the process of building the largest refinery in Africa thus the pipeline line will only transport refined oil as the economies of scale would dictate that.

      Boy, every time this jay jay kid jumps up he shows more ignorance. Don’t jump on my case without facts kid, you’re not even in the energy business and you want to act like you know a thing or two.

      Go be a Jack of all trades elsewhere not on my parade because every you counter all my arguments you just prove that you’re a master of none to me.

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  2. This is wishful thinking on the part of the Zambain gvt. Past gvts have tried this approach without any success. Remember initially we were told that Gvt was talking to the Angolan gvt for cheap oil ? What happened to those talks ? The fact of the matter is that there is no such thing as ‘ Gvt to gvt deal’. Just as Zambian copper is NOT sold by the Gvt but on the international market so is oil. I have never heard of the Zambian gvt selling copper under a’ gvt to gvt ‘ deal ( except during the UNIP era when the mines were 100 gvt owned and the arrangement was to pay off some loans for cars to Japan). The Saudi Gvt does not necessarily own or produce oil…..it gets revenues from oil companies and ,at most shares in some production. This deal wont happen ba PS, stop lying.

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  3. Angola is just next door. African thinking at times leaves much to be desired. This is Sata’s plan though. Lungu should draft his while away to Angola.

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  4. Totally support BR Mumba views, makes a lot of economical sense to import from Angola than going afar. Less haulage costs, favourable proximity and if the costs are favourable then the local consumer will be the winner in having a buoyant economy in all aspects. @Jay jay, bakushuta!Mwilashuta sana BaMumba!

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