On Wednesday 28th February, Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) said that the company is investing in renewable energy to accelerate Nigeria’s industrial development. Baru said that the NNPC had set up a Renewable Energy Division not only to develop solar and other renewable energy sources but also develop biofuels from agricultural produce. Baru said “It will also contribute significantly to power generation, producing a high volume of animal feed, starch, and other by-products. The biofuels will be blended to our refineries petroleum products, which will significantly reduce imports of petroleum products into the country”.
Baru disclosed that the NNPC will resume its search for crude oil in the Lake Chad Basin in Borno State. Baru pointed out that the NNPC has been working tirelessly on the Lake Chad Basin and that the NNPC was poised to provide the enabling environment for the nation to optimise its commercial, industrial and agricultural potential to attain a competitive edge in these sectors. Baru said the NNPC had taken steps to ensure that the challenges witnessed recently in the distribution of petroleum products are being mitigated. Some of the steps taken, include the full deployment and activation of a 24 hour real-time fuel war room for the effective monitoring of fuel supply and distribution dynamics across the country; sustenance of 24 hour loading and sales operations in all depots and mega stations; and collaborating and sharing information with the oil industry regulators and other agencies in the Ministry of Petroleum Resources.
Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources disclosed during the Nigeria International Petroleum Summit (NIPS) that Nigeria could take to new measures to ensure it stays within the production limits agreement between OPEC and non-OPEC member countries led by Russia, to rebalance the oil market. Kachikwu noted that the measures would be adopted in the wake of new oil volumes coming from AGIP/SNEPCo Zabazaba and Total’s Egina oil field later in 2018. Volumes from both fields could shoot Nigeria’s output far above the 1.8 million barrels a day production cap expected by OPEC. Kachikwu explained that to maintain the production cap, Nigeria will emphasise on granting market access first to oil volumes that are produced cheaply from her fields – preferably within $15 per barrel production cost. Kachikwu also stated that in the event of the production cap extending further to maybe five years, Nigeria would also emphasise on in-country processing and refining of her oil into finished products and the export of very limited output.
FAR Ltd has signed a farm-out agreement with a subsidiary of Petronas for a 40% interest in each of The Gambia’s blocks A2 and A5. Petronas will fund 80% of the total well costs of the Samo-1 exploration well up to a maximum total cost of $45 million. Petronas will also fund FAR’s share of non-well costs up to a maximum amount of $1.5 million. FAR will retain a 40% interest in each of the A2 and A5 licenses and will remain operator through the exploration phase. Samo-1 is expected to be drilled in late 2018 and will be the first exploration well offshore The Gambia since 1979. Cath Norman, FAR Managing Director said: “This farm-out deal with Petronas is further recognition of the value of our Gambian licenses and FAR’s status as a partner of choice in the Mauritania-Senegal-Guinea- Bissau-Conakry Basin”. Norman added success in this well would be of significant value to our shareholders and truly transformational for the people of The Gambia.
On Thursday 1st March, oil prices continued to trade at multi-week lows, as investors remained cautious due to sustained U.S. dollar strength and increase in U.S. stockpiles. The U.S. West Texas Intermediate Crude Oil WTI Futures April contract was down $1.23 at $60.42 a barrel at 10:25 a.m. ET (14:25 GMT), the ICE Futures Exchange in London Brent oil for April delivery was down $1.27 at $63.41 a barrel. The U.S Energy Information Administration weekly report for Wednesday 28th February showed a rise in crude oil inventories by 3.019 million barrels in the week ending February 23, whereas analysts expected a gain of 2.4 million barrels. The report also showed that gasoline inventories rose by 2.483 million barrels, confounding expectations for a decline of 190,000 barrels.
Oil prices were also under pressure as expectations for more aggressive rate hikes by the Federal Reserve pushed the U.S. dollar higher. Fears that rising U.S. output could dampen global efforts to rid the market of excess supplies have recently systematically limited oil prices’ gains. OPEC and non-OPEC members led by Russia agreed in December 2017 to extend oil output cuts until the end of 2018.