MARKET REPORT: Nigeria Commences Local LPG Distribution


The Minister of State for Petroleum Resources, H.E. Timipre Sylva announced that the Federal Government will commence the opening of micro gas distribution channels across all local councils in the federation. This was done at the launch of the Nigerian Women for Liquified Petroleum Gas (LPG). The Minister noted that LPG will be used as a clean alternative to firewood, which is largely utilized for cooking in rural parts of the country. Minister Sylva stated that the LPG project aims to empower rural women as they use a cleaner energy source for cooking, with 99 million women across households in all local councils being targeted over the next three years. The project will cut across 120 political units and 800 political wards across the 774 Local Government Areas in the federation. 

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari received high praise in the U.S. 2020 Country Report on Human Rights Practices in Nigeria. Kyari received a commendation for releasing the NNPC’s audited 2018 financial statement for the first time in 43 years. NNPC released the audited 2018 financial statement in June 2020, the first of its kind since its inception in 1977, publishing audited accounts of 20 of its subsidiaries and business divisions in the process.  

The report praised the launch of the Financial Transparency Policy and Portal, as it aims to increase transparency and government accountability of funds transferred. It further noted that the Nigerian Extractive Industries Transparency Initiative, as well as other anti-corruption watchdog groups praised the administration for implementing a procedure to have better access to government spending data.  


Australia’s FAR Limited received a takeover offer from a private investment fund, Remus Horizons. In December 2020, FAR Limited received the conditional non-binding indicative proposal from Remus Horizons to engage in further discussions and further investigations to evaluate its capacity to make an offer or announce an intention to make an offer to acquire 100% of the shares of FAR at 2.1c cash per share.  

The proposed takeover is conditional only on shareholders rejecting the sale of FAR’s interest in the Rufisque, Sangomar, and Sangomar Deep (RSSD) offshore area in Senegal, containing the Sangomar offshore oil field, and also on the FAR Directors confirming that there is no intention to dispose of this interest before the closing of the takeover offer. FAR Board recognizes that its shareholders are likely to want an opportunity to consider the implications of this before voting on the sale resolution. The Board intends to address this development, including whether shareholders would seek more time to consider its implications.  

In its letter, Remus said that its offer presented a clear alternative for FAR shareholders to the proposed sale of FAR’s entire interest in the Production Sharing Contract for the RSSD offshore Senegal and the Sangomar to Woodside.  

Gabon Maersk Offshore Drilling has been awarded a one-well contract from PC Gabon Upstream S.A. (PCGUSA), a subsidiary of Petronas, for the provision of a deep-water drillship. The 7th generation drillship, Maersk Viking, will be employed to drill an ultra-deep-water exploration well at approximately 2,100 m water depth in Block F13 offshore Gabon. Maersk’s one-well contract with PCGUSA is expected to start in Q3 2021 with an estimated duration of 60 days. The firm contract value is approximately $24 million, including mobilization and demobilization fees.  


On April 15, crude oil prices edged higher trading near one-month highs on increasing optimism for demand growth as the global economy recovers. The U.S. West Texas Intermediate crude futures traded 0.1% higher at $63.19 a barrel, while Brent crude futures rose 0.1% to $66.65 at 10:10 AM ET (15:10 GMT).  

The U.S. Energy Information Administration’s weekly report for April 14 showed a draw of 5.889 million barrels in the week ending April 9, against analysts’ forecast of a 2.889-million-barrel draw. The International Energy Agency’s monthly report predicted that global oil demand and supply is set to be rebalanced in the second half of 2021, scraping back the demand lost in 2020 due to COVID-19.  

The Organization of the Petroleum Exporting Countries and allies (OPEC+) also raised its forecast for global oil demand in 2021 earlier in the week. OPEC+ expects demand to rise by 70,000 bpd from March’s forecast and global demand to rise by 5.95 million bpd in 2021. However, Iran is seeking to revive a 2015 nuclear deal and have U.S. sanctions removed to lift crude exports. Iran and global powers have resumed talks to rescue the deal which sought to make it harder for Iran to develop an atomic bomb in exchange for sanctions lifts. The success of these talks remains very much in the balance, particularly after Tehran on Tuesday announced its decision to enrich uranium at 60% purity, a big step closer to the 90% that is weapons-grade material. 

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