On Monday, June, 12 the Federal Government highlighted the challenges of funding and financing significant investments in the oil and gas industry in Nigeria, as well as Africa. The Vice President, Yemi Osinbajo, speaking at the opening ceremony of the Extraordinary Session of the Council of Ministers of African Petroleum Producers Organisation (APPO) in Abuja, called for increased synergy and cooperation among oil-producing countries in Africa as this is critical to tackling the funding challenges that have hindered the growth and development of the continent’s petroleum industry.
Dr. Ibe Kachikwu, Minister of State for Petroleum Resources, who emerged the new President of APPO, noted at the event that there are new oil and gas discoveries across the African continent, while massive exploration was currently ongoing. He lamented that finding the necessary funds to finance these ventures has been very difficult, as investors are increasingly finding it hard to invest in crude oil and gas exploration in Africa.
He stated that, “The only way growth would happen in this sector in the whole of Africa is through an inter-dependence approach. All of us must be able to hold hands and find a way of supporting one another, in terms of the research; in terms of the internal investments potentials and capabilities, and help to drive the process. We are therefore, having to merge and juxtapose the rising profile of African oil production with the level of response that is required for purpose of integration, to enable us achieve the objectives that we have.”
On Tuesday June, 12 Nigerian President Muhammadu Buhari and NNPC Group Managing Director, Dr. Maikanti Baru met with King Mohammed VI of Morocco for the signing of a Memorandum of Understanding (MoU) to facilitate the establishment of a gas pipeline between both countries. This gas pipeline will supply gas between Nigeria and Morocco, by extension the West African sub-region also. President Buhari signed three agreements; Nigeria-Morocco Gas Pipeline Project, Vocational Training in Agriculture and building of a chemical plant in Nigeria, including a regional gas pipeline that will see Nigeria providing gas to the West Africa sub-region, Morocco, and Europe. Both countries are planning to extend the pipeline that has pumped gas from Nigeria to Benin, Togo and Ghana since 2010 to Morocco.
The pipeline will be built in phases and will span across 5,660 kilometres (3,500 miles). It will also respond to the growing needs of the transit countries and Europe over the next 25 years. Morocco’s National Office of Hydrocarbons and Mines and the Nigerian National Petroleum Corporation said: “For economic, political, legal and security reasons, the choice was made on a combined onshore and offshore route”. The Nigeria-Morocco Gas Pipeline would reduce gas flaring in Nigeria and encourage diversification of energy resources in the country. It would further encourage utilisation of gas in the sub-region for cooking and discourage desertification.
On Wednesday, June 12, the Ministry of Hydrocarbons of the Republic of Congo announced the promotion of the Congo-Brazzaville License Round (Phase 2 2018/19) at Africa Oil Week scheduled for November 5th to 9th, 2018. Congo Minister of Hydrocarbons, Jean- Marc ThystèreTchicaya stated that the timetable for the License Round Phase 2 would see the opening of the call for tender in September 2018, followed by a major promotion campaign in Cape Town at the Africa Oil Week.
This is Congo’s first licensing round since oil prices rebounded significantly in 2017 after plummeting in 2014 due to global oversupply. Interest in the tender will act as a bellwether for the country’s oil reserves and production now that higher prices have made drilling more viable.
The closing date for receipt of tender offers in Brazzaville will be June 30th 2019. It follows a previous round in 2016, in which 30 international companies registered to participate. The auction will involve around 15 offshore and onshore blocks in the Cuvette Basin.
On Thursday June, 14 oil prices were lower amid worry over the potential of increased supply from OPEC. The US West Texas Intermediate (WTI) crude futures decreased by 0.18% to $66.52 a barrel at 11:03 AM ET (15:03 GMT), while Brent crude futures fell by 0.81% to $76.12 a barrel. The U.S Energy Information Administration weekly report for Wednesday 13th June showed a fall in crude oil inventories by 4.143 million barrels in the week ending June 8, well above expectations for a draw of 1.440 million barrels.
Prices were held back despite falling inventories, as rising U.S. crude output worried traders. U.S. crude output has risen 30% in the last two years to 10.9 million barrels per day (bpd). The price of oil has been stuck between the rise in U.S. shale and OPEC’s falling production levels. The total production of OPEC countries rose by 35,000 barrels per day in May to 31.87 million bpd, according to its monthly report. OPEC has been cutting crude output by 1.8 million bpd to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018. OPEC and non- OPEC members including Russia are set to meet in Vienna on June 22, where they are expected to decide whether or not to increase supply by one million barrels per day, as OPEC faces losses from Venezuela and Iran.