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Aker Energy is looking to sell part of its 50% participating interest in the Deepwater Tano Cape Three Points (DWT/CTP) block in Ghana, which includes the Pecan development project. After being hit by the COVID-19 pandemic, the Norwegian operator has struggled to come up with funding for the Pecan development.
Aker Energy’s interest to fast track the development of the project led to the Ghanaian Government’s amendment of Petroleum Agreements concerning the DWT/CTP and the South Deep Water Tano. The amendment significantly reduced the state’s share of the partnership and snuffed out the involvement of GNPC Explorco, a company that was set up to build the operating capacity of the state hydrocarbon company Ghana National Petroleum Corporation (GNPC).
Aker Energy as far back as February 2020 entered a Letter of Intent with Yinson Holdings Berhad to award a bareboat charter and an operations and maintenance contract for a Floating, Production, Storage and Offloading (FPSO) vessel at the Pecan field, following a competitive tender. The plan was that the contracts would have a firm duration of ten years followed by five-yearly extension options exercisable by Aker Energy as the operator on behalf of the license partners. Once developed and installed, the FPSO will be located over and connect to the state-of-the-art subsea production system located at approximately 2,400 meters below sea level. Aker Energy’s other partners in the DWT/CTP block are Lukoil (38%), Fueltrade (2%) and Ghana National Petroleum Corporation (10%).
The Nigerian National Petroleum Corporation (NNPC) has signed agreements with Shell Nigeria, Total Nigeria, ExxonMobil Nigeria, and Eni’s Nigerian Agip Oil Co. to renew OML 118 for an additional 20 years. Five agreements were signed between NNPC and its partners on OML 118, which houses the Bonga field, 120km southwest of the Niger Delta, in a water depth of more than 1,000m.
The Group Managing Director of the NNPC, Alhaji Mele Kyari chaired the signing ceremony and spoke of the benefits of signing the agreements, stating that over $10 billion of investments will be unlocked, with immediate income for the government in excess of $780 million, and an opportunity to resolve the long-standing dispute with contingent liabilities of $9 billion for all parties. Furthermore, Kyari said that the agreement settles the long-overdue dispute on the Production Sharing Contract (PSC) noting that the agreement starts with a new PSC with clearly aligned terms.
The Minister of State for Petroleum Resources, H.E. Timipre Sylva attended the formal opening of the Nigeria Liquified Natural Gas Limited (NLNG) headquarters in Port Harcourt, Rivers State. The Minister stated that the Federal Government would continue to improve its domestic gas expansion drive and the gas monetization initiatives to increase the government’s revenue from the commodity, with NLNG playing a major role. Minister Sylva also praised the company and noted that the model it operated was worthy of emulation, as it continued to deliver to all its stakeholders while showing transparency. He further hailed the company for having its headquarters located in the state where it operates, as they unveiled the Headquarters in Port Harcourt.
On May 27, crude oil prices fell after four days of gains, as traders fretted about the potential for a rise in Iranian supplies even after a bigger-than-expected draw in U.S. crude oil supplies. The U.S. West Texas Intermediate crude futures traded 0.2% lower at $66.09 a barrel, while Brent crude futures fell 0.4% to $68.47 at 9:10 AM ET. The U.S. Energy Information Administration’s weekly report showed a draw of 1.662 million barrels for the week ending May 21. There was also a 1.745-million-barrel draw in U.S. gasoline inventories, with U.S. fuel demand progressing towards a return to pre-COVID-19 consumption levels.
World powers continue to conduct talks in Vienna aimed at potentially reviving a nuclear agreement with Iran. A deal could pave way for the lifting of sanctions allowing Iran to export its oil reserves. The additional supply potentially around 1 million barrels per day will undoubtedly be a major issue for a June 1 meeting of the Organization of the Petroleum Exporting Countries and allies.
Meanwhile, the general tone surrounding the crude market remains positive as the global economy, and the U.S. in particular recovers from the pandemic. Physical demand has been improving in both Europe and the U.S. as a slowdown in new COVID cases has been pushing up mobility. The start of the summer driving season in the U.S. from next week could further support crude oil demand in the country. Even India, the world’s third-largest oil importer, has reported a marked slowdown in new cases over the past few weeks, which could help ease some of the mobility restrictions in June. One potential problem could come from the corporate sector. Royal Dutch Shell was ordered by a Dutch court to drastically deepen its planned greenhouse gas emission cuts, while both ExxonMobil and Chevron suffered shareholder rebellions over the oil giants not moving fast enough to diversify away from fossil fuels.