South Africa Benefits from Oil Price Drop with Statoil’s Help

South Africa Benefits from Oil Price Drop with Statoil’s Help

South Africa’s trade deficit narrowed to $65m in September as lower oil prices curbed imports, according to the Pretoria-based South African Revenue Service, reported Bloomberg.

The trade gap had been declining since August, with weaker domestic fuel demand also making a contribution.

A declining trade deficit, which has halved from its 2014 figure, has also been buoying up the rand against the US dollar, after having slipped by 16% this year.

The South African government is also projecting that the shortfall on the current account will reach 4.1% of GDP this year. The deficit was 3.1% of GDP in the second quarter alone.

South African exports also rose during this period, in part because of coal, a key source of the country’s electricity generation.

Low oil prices, moreover, are not dissuading exploration activities in South Africa as Statoil has recently gained access to the Tugela South Exploration Right, said Reuters.

This covers an area of approximately 9,054 square kilometers and is located offshore, in eastern South Africa, in water depths up to 1,800 meters.

Statoil’s partners in the enterprise are ExxonMobil Exploration and Production South Africa Ltd., with Statoil acquiring a 35% interest in the ER 12/3/154 Tugela South Exploration Right.


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