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SENEGAL
Lukoil, Russia’s largest oil company has moved to Senegal. Quite recently, Lukoil publicly declared that it finally agreed with Cairn Energy PLC to acquire a 40% interest in the Rufisque, Sangomar and Sangomar Deep (RSSD) project in Senegal for $300 million in cash. The agreement provides for a potential bonus payment to Cairn Energy of up to $100 million after the commencement of production. The transaction is subject to customary conditions, including approval by the Government. The blocks on the project cover 2,212 km2, located on the Deepwater shelf 80 km from the shore with a sea depth of 800-2,175 meters. The blocks include two discovered fields: Sangomar and FAN. Early 2020, the Sangomar field Final Investment Decision was accepted, and development began. The recoverable hydrocarbon reserves estimate of the Sangomar field total approximately 500 million. It is to be launched in 2023, with a designed production level of 5 million tons of crude oil per year. The RSSD project is currently implemented under a Production Sharing Agreement. Woodside is the project’s operator with a 35% stake, FAR (15%) and state-owned company Petrosen (10%). Lukoil’s portfolio is quite extensive, present in 32 countries worldwide and conducting geological explorations in Africa.
NIGERIA
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari attended the ground-breaking inauguration ceremony of the 50 megawatts Maiduguri & Environs Emergency Power Project project in Borno State. Maiduguri has been without power since January due to the increased activities of insurgents. A presidential directive to provide emergency electricity intervention was issued to combat supply disruptions in the city and its environs. In August 2021, the NNPC signed a contract with China Machinery and Engineering Corporation and General Electric to deliver the power project. Alhaji Kyari said NNPC is committed to the delivery of this project within schedule.
The Corporate Affairs Commission has completed the Incorporation of Nigerian National Petroleum Company Limited under section 53(1) provision of the Petroleum Industry Act, 2021 signed into law by the President of Nigeria H.E. Muhammadu Buhari on August 16 2021. The Registrar General of the Corporate Affairs Commission, Garba Abubakar revealed this during the Quarterly meeting of Heads of Agencies in the Federal Ministry of Industry Trade and Investment. Abubakar stated that registration was completed the same day after fulfilling all requirements necessary to incorporate NNPC Limited.
GLOBAL
On September 29, oil futures changed a little as reports that China prepares to buy more oil and other energy supplies to meet growing demand offset price pressure from an unexpected rise in U.S. crude inventories and a strong dollar. Oil prices gained almost 10%, with even producers in the Organization of the Petroleum Exporting Countries and allies (OPEC+) presumably encouraged enough to consider a higher output in coming months than they initially planned. The U.S. West Texas Intermediate (WTI) settled September’s last trading day at $75.03 per barrel, up 20 cents, while Brent crude futures finished at $78.52 per barrel, down 12 cents.
The U.S. Energy Information Administration’s weekly report for September 28, showed a build of 4.578 million barrels in the week ending Sep. 24, against analysts’ forecasts for a draw of 1.652 million barrels. The build comes as U.S. production returned to its levels pre-Hurricane Ida, which hit the Gulf of Mexico area in late August 2021, with output rising to 11.1 million barrels per day (bpd) last week.
Crude oil is still heading for a healthy monthly gain amid expectations that the market will remain in a supply deficit for some time. Global oil supply expects to be 1.2 million bpd below demand in October, and 900,000 bpd lower the following month, according to an OPEC secretariat document being reviewed by the group’s Joint Technical Committee. OPEC+ may maintain a deal that adds 400,000 bpd to its output for November at its next meeting on October 4. In the Asia Pacific, a growing power crisis and housing market concerns in China continue to worry investors. According to analysts, any economic fallout in the world’s biggest crude importer will impact fuel demand.
