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Market Report: Nigeria to Announce Marginal Fields Bid Round Results

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The Department of Petroleum Resources (DPR) is due to announce the results of the Marginal Fields bid round, pending the approval of the Minister of Petroleum, H.E. Chief Timipre Sylva. The DPR has concluded the bid analysis and forwarded the results to H.E. Sylva. Fifty-two marginal oil fields were featured in the three and a half month-long bid round exercise, which concluded in September 2020. For the past two months, Nigeria has experienced
a rise in oil production, as the official rig count, increased from eight in August to 10 in September, also up from six in July, according to data received from the Organization of Petroleum Exporting Countries

Meanwhile, amid panic over the availability of Premium Motor Spirit, Alhaji Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation, has assured motorists that there is more than
two billion liters of petrol in stock in depots around the country, which can last for over 60 days.

Svenska Petroleum Exploration has secured approval via Presidential Decree to extend the terms of two licenses offshore Guinea-Bissau. The current exploration period for the Sinapa and Esperanca licenses will expire on October 2, 2023. Operations, including preparation for drilling the Atum-1X prospect, have been suspended due to COVID-19. Svenska and partner FAR are working on measures to protect themselves against further cost exposures given the current situation. In its latest results statement, FAR added that it was continuing with Full Waveform Inversion processing of 600km2 of 3D seismic survey acquired early this year in Block A5 offshore The Gambia.

Processing will likely be expanded to include the remaining 3D seismic datasets over A2 and A5 to deliver single, merged 3D seismic data across the blocks. In turn, this should improve geological interpretation and prospect selection. Planning continues for the Bambo-1 well, designed to test multiple stacked objectives including the Bambo 390, Soloo 410 and Soloo 440. FAR and its partner will monitor COVID-19 development with a view to reactivating their well execution project that was halted earlier this year. The environmental and social impact assessment for drilling has progressed with the completion of the public consultation process.

On Thursday, October 29, oil prices tumbled for a second straight day hitting a near five-month low, as the market reeled from fears of another global ramp-up in COVID-19 cases, and a surprisingly large weekly build in U.S. crude stockpiles.

The U.S. West Texas Intermediate tumbled to a session low of $34.93 per barrel, a bottom not seen since mid-June, before settling at $36.17. Meanwhile, Brent crude futures sunk to a near five-month low of $37.26 before pulling back to finish the session at $37.65. The U.S. Energy Information Administration’s weekly report showed a rise of 4.3 million barrels for the week ending October 23, against expectations of an increase of 1.23 million barrels. Oil markets took a blow in overnight trading, as France and Germany announced major COVID-19 restrictions in their countries.

COVID-19 case numbers are spiraling upwards in both Europe and the U.S., with further European clampdowns on social activities expected. The news pulled prices down over five percent on fears of an even more protracted economic slump than previously expected. Since May, OPEC+ has succeeded in keeping crude prices above or near $40 per barrel with production cuts. OPEC+ has signaled a willingness to act, if necessary, and while a two million barrel production increase in January is now surely off the cards, more may be needed if prices continue to plunge.

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Sihle Qekeleshe is a Web Editor at Energy Capital & Power. She has experience as a Copywriter and Editor in various industries.