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NIGERIA
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari, said at the inauguration of the Oredo Integrated Handling Facility in Edo state that the 200-million cubic litre capacity LPG facility will boost the establishment of small and medium sized enterprises (SMEs) through improved power supply to the immediate environment.
Alhaji Kyari stated that the gas plant will also provide social amenities to the immediate host community and enhance the quality of livelihood of the people. The facility is constructed on two plots – the Process/Cryogenic plant and the LPG/Propane Storage and Dispensing Plant. The facility is equipped with eight dispensing arms and storage capacities of 2,600 and 1,550 metric tons of LPG and propane, respectively.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, announced that the Brass Fertilizer project and the Atlantic Modular Refinery on Brass Island, Bayelsa state, would begin in 2021. The Federal Government project is expected to create 15,000 direct jobs with 500 prospective jobs created during operations.
Additionally, Chief Sylva said the refinery rehabilitation exercise across the country is in its final stages.
He said the Ministry of Petroleum Resources has completed the plant equipment inspection and integrity study conducted in December 2019 as part of phase one of the Port Harcourt refinery rehabilitation.
NNPC in December 2020 opened bids for the Engineering, Procurement and Construction (EPC) contracts for the refinery rehabilitation. Chief Sylva said the ministry unveiled the refinery rehabilitation roadmap aimed at boosting Nigeria’s local refining capacity. Under the roadmap, the existing refineries were to be rehabilitated, greenfield refineries developed, and modular refining co-located.
GABON
Vaalco Energy stated it is moving forward with its previously announced acquisition of Sasol’s working interest in the Etame Marin block, located offshore Gabon, as no other partner in the block exercised its pre-emptive right.
As a result, Vaalco will nearly double its total production and reserves. Vaalco will now move forward with acquiring Sasol’s entire working interest in the field. Before the closing of the acquisition, Vaalco’s working interest in Etame is 31.1% and its participating interest is 33.6%; Sasol’s working interest in Etame is 27.8% and its participating interest is 30%.
Furthermore, Vaalco also said in November it would acquire Sasol’s 40% non-operated participating interest in Block DE-8 offshore Gabon. Sasol’s participating interest in DE-8 is 40% and its working interest is subject to government rights for a 20% carried interest and 10% back-in interest.
Cary Bounds, Chief Executive Officer, commented, “Based on production performance in November, our production capacity, including volumes acquired from Sasol, would be over 9,000 barrels of oil per day and with the recent increase in oil pricing, this should significantly boost our free cash flow profile in 2021.”
SENEGAL
Woodside Energy announced the complete acquisition of Cairn Energy’s stake in Senegal’s Rufisque Offshore, Sangomar Offshore, and Sangomar Deep Offshore (RSSD) joint venture, developing the Sangomar offshore oil field.
As previously reported, Cairn had agreed to sell its whole stake in the Senegal offshore blocks to the Russian oil company, Lukoil. However, Woodside then exercised its first buy option as a partner in the offshore area, blocking out Lukoil.
Woodside’s purchase price for Cairn’s stake was $300-million plus a working capital adjustment of approximately $225 million, which included a reimbursement of Cairn’s development capital expenditure incurred since January 1, 2020.
Additional payments of up to $100 million are contingent on commodity prices and timing of first oil at the Sangomar oil field, development of which was sanctioned in January. Woodside CEO Peter Coleman said: “The development of Sangomar is being executed according to schedule. The Senegal team recently achieved another milestone, with the award of the contract for the operations and maintenance of the floating production storage and offloading vessel which is targeted for delivery and first oil production in 2023.”
Woodside’s participating interest in the RSSD joint venture has increased to approximately 68.33% for the Sangomar exploitation area and 75% for the remaining RSSD evaluation area. Woodside’s interest will further rise to 82% for the Sangomar exploitation area and 90% for the remaining RSSD evaluation area subject to completion of the FAR acquisition.
GLOBAL
On Thursday 24th December, crude oil prices edged down but were holding well above $50 per barrel in light holiday trade as a drop in U.S. stockpiles spurred demand hopes, while hints of an imminent Brexit deal underpinned investors’ risk appetite. The U.S. West Texas
Intermediate (WTI) crude was down 34 cents, or 0.7%, to $47.70, while Brent crude futures were down 30 cents, or 0.6%, to $50.90 a barrel at 11:00 GMT.
The U.S. Energy Information Administration (EIA) weekly report for Wednesday 23rd December showed a draw of 562,000 barrels in U.S. crude oil supply for the week ending December 18, against analysts’ forecast for a 3.186-million-barrel draw.
Oil was poised for its first weekly loss since October as the discovery of a potentially faster-spreading variant of Covid-19 in the U.K. raised the risk of more energy demand-sapping lockdowns. Oil prices also drew support from news that Britain and the European Union were on the cusp of striking a narrow trade deal, swerving away from a chaotic finale to the Brexit split.
Meanwhile, at least four pharmaceutical companies expect their COVID-19 vaccines to be effective against the new fast-spreading variant of the virus and conducting tests that should confirm in a few weeks. Still, some investors remain jittery about the recovery of oil demand due to the latest surge.
