On Tuesday July, 17 Shell Petroleum Development Company of Nigeria Limited (SPDC) lifted the force majeure on Bonny Light exports, one of the country’s major sources of oil revenue. Mr. Bamidele Odugbesan, the company spokesperson said the force majeure on Bonny Light exports has been lifted following the repair and re-opening of the Nembe Creek Trunkline by the operator – Aiteo Eastern Exploration and Production Company Limited. Bonny Light with a production capacity of 200,000 to 250,000 barrels per day (bpd) is one of Nigeria’s main exports grades and is very popular globally with refiners. The 2 month force majeure on exports has benefited the pricing of other key Nigerian grades such as Forcados and Qua Iboe.
The Management of China National Offshore Oil Corporation (CNOOC) expressed its interest in investing an additional $3 billion to its existing stakes in offshore operations in the Nigerian oil and gas industry. Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) stated that the corporation is open to new investment with CNOOC to foster meaningful and mutually beneficial relations. CNOOC had previously invested over $14 billion in its Nigerian operations. Yuan Guangyu, Chief Executive Officer of CNOOC, described its investment in Nigeria as the most strategic and important overseas business undertaking. Guangyu called on the NNPC management to seek common grounds of beneficial interest with CNOOC for enhanced productivity as Nigeria remains the largest investment destination for CNOOC.
Italian oil services group, Saipem, alongside Japan’s Chiyoda Corp and Korea’s Daewoo E&C have been awarded a new Joint Venture (JV) contract related to a Liquefied Natural Gas (LNG) project in Nigeria. Saipem will lead the JV and the contract is for the front-end engineering design (FEED) and preparation of an engineering, procurement and construction (EPC) proposal for the NLNG Train 7 project, meant to expand an existing LNG plant operated by Nigeria LNG Limited.
Ghana has mapped out 9 oil blocks in its offshore western Basin, 6 of which will be allocated in the next 12 to 18 months. For the first time, allocation of oil block will be through open public competitive tender and the historic licencing sale will involve only three blocks. The government wants to allocate two blocks through direct negotiations and reserve one for the state hydrocarbon company – Ghana National Petroleum Corporation to explore in partnership with its chosen strategic partner with the view to developing its technical capacity and becoming an Operator. Ghana is proposing the bid round for the last quarter of 2018.
Mr. Boakye Agyarko, the Minister of Energy said “the remaining three that will not be allocated this year will form the basis of our second bidding round next year. We are determined to identify further prospects in the eastern, central and the onshore Voltain Basins to increase the number of blocks available for allocation”. Agyarko said preparations for allocating more oil blocks in accordance with the Petroleum Exploration and Production Act (Act 919) is currently in motion.
On Thursday July, 19 oil prices settled higher after data from the Energy Information Administration (EIA) showed an unexpected build in U.S. crude stockpiles amid a surge in imports. The U.S. West Texas Intermediate crude futures for September delivery fell 0.12 percent at $67.67 a barrel at 12:22 AM ET (04:22 GMT), while Brent Oil Futures for September delivery also dropped 0.21 percent at $72.75 a barrel. The U.S. EIA weekly report for Wednesday July, 18 showed a rise in crude oil inventories by 5.836 million barrels in the week ending July, 13 compared to expectations for a draw of 3.622 million barrels. The unexpected build in crude supplies came as imports rose by 1.635 million bpd and output rose to a record 11 million bpd.
Crude prices were also supported by indications from a Saudi Arabian official showing a slight change in the country’s exports despite a large increase in production. Saudi Arabia’s OPEC Governor, Adeeb Al-Aama said that the kingdom expects crude exports to fall by about 100,000 bpd in August as it limits excess production. Investors have scaled back expectations for a global oil supply shortage in recent weeks as Libya resumed exports and the U.S. softened its stance on Iranian crude buyers. Steven Mnuchin, the US Treasury Secretary said Washington might grant waivers to Iran oil purchases. Mnuchin suggested that he would meet with counterparts on the sidelines of a G20 finance ministers’ meeting in Buenos Aires through July 22 were Iran sanctions will most likely be discussed.