Equatorial Guinea and Swaziland in crude oil deal

Equatorial Guinea has agreed to supply Swaziland with crude oil in a recent deal between President Teodoro Obiang Nguema Mbasogo and King Mswati III of Swaziland

According to South Africa’s Business Report, the product will only reach the landlocked kingdom after transport and refinement into finished petroleum products in South Africa. Swaziland has no oil refineries. Obiang was in Swaziland for bilateral talks with the king, with the oil transaction being the focal point of discussions.

“This presents the first time that Swaziland has ever had such an agreement where we buy crude oil and refine it ourselves,” said Thembinkosi Mamba, the principal secretary for the Ministry of Natural Resources and Energy.

Mamba admitted to the Swaziland media that the absence of an oil refinery in the country meant that the crude had to be processed in South Africa. This would affect the end price of the finished product, he said.

“There are costs involved in the acquisition of the oil, like the cost of transporting it to South Africa where it will be refined, and the charges that we will have to pay for refining it in that country,” he said, without elaborating further.

Government subsidies have kept Swaziland’s petrol prices lower than in South Africa. This changed when the subsidies were scaled back last year in the wake of the government’s financial crisis that has seen Mswati soliciting financial aid from South Africa and abroad.

No details were available on the volume of crude oil to be sold to Swaziland by Equatorial Guinea or the price thereof, or over what period the agreement would last. Government sources refused to speculate on how Swaziland would pay for the oil.

From Equatorial Guinea the oil would be shipped to Cape Town or Durban for offloading and refinement, and then transported by road to Swaziland. The kingdom currently secures and purchases all of its petroleum products from South Africa.