The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Learn more about Gladius Commodities at www.gladiuscommodities.com.
NIGERIA
The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva disclosed that the modular refinery program to boost local crude oil production is on course, with over 23 refineries undergoing rehabilitation. Some include Waltersmith Refining & Petrochemical Company Limited with 5,000 barrels per day (bpd), OPAC Refineries, Niger Delta Petroleum Resources (Train 3), Edo Refinery and Petrochemical Company Limited and Lowrie Refinery Limited. Minister Sylva said the Federal Government had licensed some modular refineries and some had already started operating effectively.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Alhaji Mele Kyari inaugurated the board of Greenfield Refinery Limited (NGRL), a subsidiary of NNPC, to oversee the establishment and operation of new refineries. Alhaji Kyari swore in the new board members charging them with bringing an end to the current challenges of petroleum products importation faced in the country. Kyari stated that NGRL represents an opportunity to end reliance on fuel importation. He urged the board and management team of the new company to set up a proper structure with the required skills, technology, and finance to drive the company’s operations, adding that he is optimistic that the company would be able to achieve its mandate.
GABON
BW Energy has discovered oil in the Hibiscus North exploration well (DHBNM-1) in the Dussafu Block, offshore Gabon. The well is located approximately 6 km north-northeast of the Hibiscus discovery well DHIBM-1 in approximately 115 meters of water depth. The estimated volume will be determined when drilling is completed. The well will be drilled to a planned total depth of circa 3500m.
BW Energy announced the spudding of the well on July 28, 2021. During the drilling operations at Hibiscus North, the Gamba (reservoir) was encountered at a depth of 2794 meters and encountered approximately 13.5m of the oil-bearing reservoir in the Upper Gamba sandstone. The Borr Norve Jack-up continues its drilling operations to intersect the secondary targets for the exploration well in the deeper Dentale Formation. After reaching total depth, logging operations and evaluation of the oil discovery will be carried out, followed by the drilling of a side-track to delineate the field.
Total Dussafu area output for 2021 is projected to be approximately 12,800 bpd gross, compared to 14,100 bpd on average in 2020. The Dussafu Block is 850 square km. BW Energy is the operator and holds 73.5% interest in the block, Panoro Energy (17.5%) and the Gabonese Oil Company (9%).
GLOBAL
On August 26, crude oil prices weakened, handing back some gains after a three-day rally, with fresh outbreaks of COVID-19 infections continuing to weigh on the overall market sentiment. The U.S. West Texas Intermediate crude futures were down 1.4% at $66.41 a barrel, while Brent crude futures were down 1% at $69.57 a barrel at 9:45 AM ET (13:45 GMT). The U.S. Energy Information Administration’s weekly report for August 25 showed a decrease in crude inventories for a third consecutive week by 3 million barrels for the week ending August 20. Thus, overall fuel demand increased the most since March 2020.
Oil prices are weighed down by broader weakness in equity markets and concerns over global COVID-19 outbreaks, especially the fast-spreading delta variant that continues to cloud the outlook for fuel demand and commodities in general. India, the third-largest oil consumer, has recorded a spike in demand for jet fuel as the country recovers from the COVID-19 wave.
Mexico restored some output after a fire disrupted supply. Production has commenced at an offshore platform in Mexican waters run by state-run oil company Petroleos Mexicanos after a deadly fire over the weekend halted drilling, cutting output by over 400,000 bpd. Meanwhile, energy companies are ready for the possibility of a severe storm hitting the U.S. Gulf Coast this weekend. Companies started evacuating their workers from Gulf of Mexico oil production platforms stopping production at their offshore platforms ahead of the hurricane. The Organization of the Petroleum Exporting Countries is scheduled to meets on September 1 to decide its policy amid calls from the U.S. to add more barrels to the market to help the global economic recovery.
