The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Download the full report here and learn more about Gladius Commodities at www.gladiuscommodities.com.
Nigeria
The Nigerian National Petroleum Corporation (NNPC) on Monday 26th of June stated that the French government is interested in investing in the Nigerian Oil and Gas industry, as Nigeria still remains her first African economic trading partner. The French government has set aside a one billion Euro investment fund for this purpose. This was confirmed in a visit by the Group General Manager, Group Public Affairs Division of the NNPC, Mr Ndu Ughamadu and his delegates to the French Ambassador to Nigeria, His Excellency, Denys Gauer in his office in Abuja. Gauer stated that the fund was aimed at encouraging French investors to invest in the Nigerian Oil and Gas sector. Despite concerns regarding the unclear fiscal policies in the Nigerian Oil and Gas sector, some French investors currently have embarked on the development of wind and solar energy in Katsina State.
Nigeria’s oil reserves have been estimated to dry up in the next 25 to 30 years at most. This statement was made by the President Muhammadu Buhari through the Minister of State for Petroleum Resources, Dr Ibe Kachikwu on Wednesday 28th June at the 5th Triennial Delegates Conference of the Petroleum & Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja. The President said the new focus for the government must be on gas which is estimated to last for over 60 years. He also squashed the speculation of the sales and concessions of the nation’s refineries affirming that there are no such plan, rather approved input of financing mechanism to aid in the upgrade and development of the refineries. Kachikwu said the financing mechanisms for the refineries would pass through the Board of the NNPC in a competitive and transparent manner.
Ghana
On Wednesday 28th of June, Tullow Oil PLC announced a 12 week shut down of the Float Production Storage and Offloading (FPSO) vessel in the Jubilee oil fields in Ghana’s Western Region to occur the later parts of 2017. Tullow also disclosed that the Tweneboa Enyenra and Ntomme (TEN) field would also be shut down for 10 days later this year. Tullow’s half year update stated that “the Interim Spread Mooring of the Jubilee FPSO was successfully completed in February and the vessel is now anchored to the seabed with the turret bearing locked and the vessel held on a constant heading”. So therefore, the Ghanaian Government and its Joint Venture Partners have agreed to a five and eight week shut down of the vessel later in the year so as to stabilize the turret bearing. However, ongoing work (the installation of deep-water offloading system and planning for the rotation of the vessel to its optimum heading) expected to be performed in two stages in 2018 and 2019 would further reduce the shutdown duration. The total shutdown duration is not expected to exceed 12 weeks for offloading system installation, stabilization and rotation.
Global
On Thursday 29th of June, oil prices grew for the sixth day in a row after the biggest weekly fall in U.S domestic crude production according to the U.S. government data. The U.S. West Texas Intermediate crude July contract was up 32 cents at $45.06 a barrel, while the ICE Futures Exchange in London Brent oil for August delivery tacked on 33 cents to $47.64 a barrel at 08:32 GMT. The U.S. Energy Information Administration (EIA) weekly report for Wednesday 28th June showed a fall in crude oil production by 100,000 barrels a day to 9.25 million barrels a day in the week ending June 23, the biggest decline in weekly output since July 2016. Oil prices have been under pressure in recent weeks due to the steady increase in U.S. shale output despite production cuts by OPEC and non-OPEC members. Last month, OPEC/non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018. Thus far, the production cut agreement has had little impact on global inventory levels as U.S. shale output and supply from producers that are exempt from the OPEC deal (Libya and Nigeria) continues to increase. OPEC delegates are not in a haste to make further oil outputs cuts nor end some countries’ exemptions, but will discuss feasible steps to support the market at a meeting in Russia scheduled for July.
