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NIGERIA
Mining Company, Metallon, has sold its 15.1% stake in Lekoil, driving the share price of the Nigerian oil company up near 30%. Lekoil reported the sale in a filing while having a dispute with its major subsidiary, Lekoil Nigeria. Furthermore, Lekoil Nigeria has refused to continue funding Lekoil Cayman with cash from its Otakikpo asset. Lekoil Limited intends to raise a Convertible Facility Agreement worth £200,000 to fund its legal battle against Lekoil Nigeria.
President H.E. Muhammadu Buhari announced that the Nigerian National Petroleum Corporation (NNPC) made a profit of $697 million (N287 billion) in 2020 for the first time in its 44-year history. The President noted that the NNPC’s losses were reduced from $1.9 billion (N803 billion) in 2018 to $4.1 million (N1.7 billion) in 2019 respectively. The NNPC noted that cost-cutting measures by about 30% over the last two years contributed to the profit records maintained in the past financial year. The Group Managing Director of NNPC, Alhaji Mele Kyari, mentioned that NNPC had adopted drastic changes in its business practices before now. The Minister of State, Petroleum, H.E. Chief Timipre Sylva, also noted that efforts of the Corporation to adopt and embrace transparency and accountability had started paying off.
COTE D’IVOIRE
Italian oil company Eni announced a major oil discovery in block CI-101 offshore Ivory Coast. The discovery well has been drilled on the Baleine prospect using the Saipem 10,000 drillship. The Baleine-1x discovered light oil (40° API) in two different stratigraphic levels. Eni said it would carry out an evaluation program to assess the significant upside potential of the overall structure that extends into block CI-802, also operated by Eni.
The well was drilled about 60 km off the coast, in about 1,200m, and reached a total depth of 3,445m in 30 days. The potential of the discovery can be preliminarily estimated at between 1.5 and 2.0 billion barrels of oil in place and between 1.8 and 2.4 trillion cubic feet of associated gas. According to Eni, the lower Cenomanian / Albian level shows discrete to good reservoir characteristics and has been successfully tested to production.
Eni and its partner, Petroci Holding will also start studies for a fast-track development of the Baleine discovery. Baleine-1x is the first exploration well drilled by Eni in the Ivory Coast. Besides block CI-101, Eni owns a participating interest in the other four blocks in the Ivorian deep water: CI-205, CI-501, CI-504, and CI-802, all with the same partner Petroci Holding.
GABON
VAALCO Energy said that its partners in the Etame field offshore Gabon had approved the plan to charter a floating storage and offloading unit (FSO) to replace the floating production storage and offloading unit (FPSO) currently deployed at the Etame field. By deploying the FSO at the field, VAALCO said it would significantly reduce storage and offloading costs by almost 50%, increase effective capacity for storage by over 50%, and extend the field’s life, resulting in a corresponding increase in recovery and reserves at Etame.
The FSO is expected in place and operating in September 2022 before the current FPSO contract expires. BW Offshore’s Petroleo Nautipa FPSO is in use for oil production at the Etame field offshore Gabon. VAALCO signed a contract with Borr Jack-Up XIV Inc., an affiliate of Borr Limited, to drill two development wells and two appraisal wellbores with options to drill additional wells at the Etame field to boost production.
The contract provides, among other things, that the drilling rig can be on location as early as December of 2021, with the exact timing dependent on other commitments related to the rig. The company expects the cost of the 2021/2022 drilling campaign at Etame to be between $115.0 million and $125.0 million gross, or $73.0 million and $79.0 million, net to VAALCO’s 63.6% participating interest.
GLOBAL
On September 2, oil prices pushed higher boosted by solid employment data, a sharp drop in U.S. crude stocks and the confidence among a group of top producers that demand would grow. The U.S. West Texas Intermediate crude futures were up 1.3% at $69.47 a barrel, while Brent crude futures were up 1.2% at $72.44 a barrel at 9:10 AM ET (13:10 GMT). The U.S. Energy Information Administration’s weekly report for Wednesday showed a drop in crude inventories by 7.2 million barrels in the week ending August 27.
Many refiners remained offline because of hurricane Ida earlier in the week, with an estimated 1.7 million barrels a day (bpd) of the region’s oil production still offline, according to the U.S. regulator. Damaged heliports and fuel depots are hindering crews’ ability to return to offshore platforms, while continuous power outages in Louisiana are slowing down refinery re-openings and impacting fuel demand. Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, agreed on September 1 to press ahead with their plan to add 400,000 bpd to the market in October, as widely expected. The group also raised its demand forecast for 2022, indicating that the members believe that fundamentals remain strong even while acknowledging that there is still plenty of uncertainty related to the COVID-19 pandemic, and the highly transmissible delta.
