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Nigeria
On Tuesday 29th August, the Nigerian National Petroleum Corporation (NNPC) and Total Exploration and Production Nigeria Limited (TEPNG) Joint Venture signed a 20-year Gas Sale Aggregation Agreement (GSAA) with the Gas Aggregation Company of Nigeria and Greenville Oil and Gas to construct the first domestic Liquefied Natural Gas (LNG) plant in Nigeria. The mini LNG project will be built in phases and will create a virtual gas pipeline to supply natural gas to regions without physical pipelines. The project is expected to take up to 74 metric million standard cubic feet per day (mmscf/d) of gas from Oil Mining License (OML) 58 in Obite in Rivers State to Grenville’s plant in Rumuji in Rivers State for liquefaction and distribution to end users across Nigeria using trucks powered by LNG.
The agreement was signed by the Minister of State for Petroleum Resources, Dr Ibe Kachikwu who said that shifting the focus f rom oil to gas, as mandated by President Muhammadu Buhari, was yielding results. Kachikwu also said the first phase will increase production from 2200 standard cubic feet (scf) of gas to 5,000 scf; and the GSAA in its first and second phase will yield an investment of 500 million dollars and 350 million dollars respectively. The NNPC also made known its plans to cut down crude trade allocation to third-party traders who export on its behalf by 80% from 2018. Duke Oil Company (NNPC’s Trading subsidiary) would therefore market Nigerian crude in the international market leaving the remaining 20% for third-party traders (usually, the corporation uses tenured oil lifting contracts with third-party traders to sell volumes of Nigeria’s share of oil produced in its Joint Ventures and Production Sharing Contracts with International Oil Companies operating in the country).
The Group Managing Director of the NNPC, Dr Maikanti Baru, has urged members of the Independent Petroleum Producers Group (IPPG) to participate in the forthcoming bid round for 30 marginal oil fields soon to be flagged off by the Federal Government. Baru advised the IPPG members to take advantage of the low crude oil price regime to develop their capacity and acquire technology, by working together with the Department of Petroleum Resources to ensure that they meet the conditions that would be required from bidders. Baru also tasked the IPPG members to ramp up their collective production from 10% of national production to 50% over the next 10 years to increase the footprint of indigenous companies in the upstream sub-sector. The IPPG was formed a year ago with the mandate to promote and advance the collective interests of its members in a coordinated manner as a unified advocacy platform towards Federal Government policies in the upstream sub-sector of the oil and gas industry.
Ghana and the Ivory Coast
The International Tribunal on the Law of the Sea (ITLOS) prepares to deliver its judgment on the disputed oil-rich oceanic boundary case between Ghana and Ivory Coast. The ITLOS decision is expected in September 2017, with the possibility of Ghana’s oil reserves increasing in the event that the verdict goes in its favour. This is due to the fact that the country’s largest oil and gas discovery by HESS Petroleum is located in this area. According to Ghana’s legal team, Cote d’Ivoire’s arguments lacked merit, as they have no evidence to back claims that Ghana had moved into Cote d’Ivoire’s maritime space. Ghana’s Attorney-General and Minister of Justice, Ms Gloria Afua Akuffo, officially ended Ghana’s oral arguments at the tribunal with a call on ITLOS to reject Cote d’Ivoire’s claims that Ghana had moved into its maritime boundary. Ms Gloria Afua Akuffo implored the Special Chamber to declare that Ghana and Cote d’Ivoire mutually recognized, agreed and applied an equidistance-based maritime boundary in the territorial sea, Exclusive Economic Zone (EEZ) and continental shelf within 200 miles. Akuffo said the duty of the Special Chamber was to bring finality to the dispute with what she termed as a “most valued neighbour and establish certainty of legal rights and entitlements of the parties’ fortune in the conduct of their affairs in the future.” According to Akuffo, it would “be most unfortunate, should a contrary outcome, characterized by renewed and disruptive disputation between our two states and extending to third parties, be triggered by the decision of this Special Chamber.”
Global
On Thursday 31st August, oil prices bounced off a five-week low as markets continued to weigh the impact of tropical storm Harvey on supply and demand. The U.S. West Texas Intermediate crude for October contract was up 38 cents at $46.34 a barrel at 9:00 AM ET (13:00 GMT), while the ICE Futures Exchange in London Brent oil for October delivery gained 53 cents at $51.25 a barrel. The U.S. Energy Information Administration (EIA) weekly report for Wednesday 30th August showed a fall in crude oil inventories by 5.4 million barrels in the week ending August 25. This is the ninth weekly decline in a row. Oil prices have been under pressure as tropical storm Harvey battered the U.S. Gulf Coast, ripping through Texas and Louisiana at the heart of the U.S. petroleum industry. Texas is home to 5.6 million barrels of refining capacity per day, and Louisiana has 3.3 million barrels. Over 2 million barrels per day (bpd) of refining capacity were estimated to be offline as a result of the storm.
