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PetroNor and the government of Gambia have settled arbitration relating to the offshore A1 and A4 licenses. Under the terms of the agreement, PetroNor will regain the A4 license and has signed a 30-year lease under new-terms. The company will also drop any claims related to the A1 license, which has subsequently been awarded to a major oil company. The license terms are based on Gambia’s new Petroleum, Exploration and Production License Agreement model.
In 2015, ERC Equipoise estimated prospective oil resources across the two Gambian licenses at 3,079 million barrels.
Nigerian President, H.E. Muhammadu Buhari, signed the long-awaited oil reform Bill that will be formally presented to the Nigerian Senate this week. The Petroleum Industry Bill, which has not been updated since the 1960s proposes changes to oil taxes, terms and revenue-sharing within Nigeria.
Reforms and regulatory certainty have become more pressing with low oil prices. In August, the Ministry of Petroleum forwarded a draft version of the Bill, a product of months of consultation between Nigerian officials, oil and gas companies and other industry stakeholders to the presidency.
Alhaji Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation, addressed the House of Representatives Committee on Petroleum Resources on September 23, 2020, and stated that the absence of a stable fiscal environment for the petroleum industry is limiting growth in the upstream sector. He added that the persistent delay of the legislation has led to foreign investors fast losing interest to invest in the country. The absence of a petroleum industry law does little to guarantee the investment environment and has led to divestment from the country in the recent past.
Ivorian operator Foxtrot International has awarded a three-well offshore drilling contract to Malaysian oilfield solutions provider Sapura Drilling for further development of the Marlin gas field. The contract covers a semi tender-assist drilling rig service for three wells, with an option for one more well. Foxtrot operates Block CI-27; the license holds four gas fields tied back to two offshore platforms.
In the first half of 2020, sales averaged 162.7 million cubic feet of gas per day, with 1,739 barrels per day (bpd) of oil and condensate. The government struck a new deal with the CI-27 partners in February 2020 and increased the price of gas to $6 per million British Thermal Units and extended the license for ten years, to August 2034. In exchange, the companies were
committed to spending $100 million on new processing facilities and pipelines to supply power plants. They also agreed to drill three new wells at an estimated cost of $215 million. RAK Petroleum, which owns a 33,33% indirect stake in Foxtrot, said capital investments should be funded from operating revenue. Foxtrot also has a 24% stake in an exploration license for Block CI-12.
On September 24, 2020, crude oil prices edged lower as a bounce in U.S. stock markets proved short-lived, while another disappointing set of weekly jobless claims data reinforced concerns about the outlook for demand. The U. S. West Texas Intermediate crude futures were down 0.2% at $39.86 a barrel, while Brent futures contract was down 0.4% at $41.59 a barrel at 10:40 AM ET (14:40 GMT). The U.S. Energy Information Administration’s weekly report for September 23, showed a draw of 1.639 million barrels for the week ending on September 18, against analysts forecast of a 2.325 million-barrel-draw.
Oil prices remain vulnerable even though they settled as the week progressed. The clamor from the Federal Reserve for more U.S. fiscal stimulus undermines the global recovery case. Also, the gradual restart of exports from Libya has impacted oil prices. Oversupply from Libyan oil coming onto the market poses a concern for oil prices, even though it is uncertain as to when Libya’s National Oil Company (NOC) will bring its supply onstream.
Export terminals are starting to operate again after a lengthy shutdown due to the civil unrest. Libya’s NOC stated that its two biggest terminal – Ras Lanuf and Es Sider will remain closed, but other terminals with a capacity of 420,000 bpd had reopened. The NOC is looking to bring output to 260.000 bpd this week. The increase in supplies risks delaying the decline in world
stockpiles that the Organization of the Petroleum Exporting Countries and allies had counted on when they agreed last week to keep over 7.7 million bpd of output shut-in through the rest of 2020.
In Europe, fears of what appears to be a second wave of COVID-19 beginning in some countries raised further demand concerns. The jitters over demand and economic outlook due to the COVID-19 resurgence have spurred a rally in the Dollar as investors turned to safer assets, adding pressure on oil prices. A stronger Dollar makes oil priced in the U.S. greenback less attractive to global buyers.