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NIGERIA
On Thursday 28th March, Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) disclosed that natural gas is a critical resource that would play a leading role towards economic growth and development of Africa.
Dr. Baru revealed that 93 percent of current natural gas production in Africa is being produced by Members of the Gas Exporting Countries Forum, thereby making it imperative that efforts be intensified for incontinent conversion that will ensure value addition to natural gas for economic growth and development of the continent.
Dr. Baru further spoke on some critical gas development projects in Nigeria including, the Nigeria Liquefied Natural Gas Limited (NLNG) Train 7 project, the Gas Flare Commercialization Project and the Deep-water Non-Associated Gas Development Projects, which he described as “big bang” initiatives being aggressively pursued to usher in new developments for Nigeria’s gas sector and expand the nation’s economy. He further stressed that the projects are also capable of unlocking new vistas for the country’s gas resources for the economic growth and development of the nation.
At the signing ceremony of the Nigeria Liquefied Natural Gas Limited (NLNG) Train 7, Nigerian Content Plan, Dr. Baru explained that the signing ceremony was important as one of the major processes to bring the Train 7 project on board.
He noted that the project had a lot of potentials beneficial the nation, but called on the Nigerian Content Development and Monitoring Board (NCDMB) to ensure that Train 8 and any other LNG projects in the future should be designed to accommodate more local content in the fabrication of facilities.
Speaking on the corporation’s interest in signing the agreement, he said that the Train 7 project was in line with NNPC’s vision of prioritizing the use of natural gas and expressed the corporation’s commitment to support any project that would encourage production and utilization of natural gas for the benefit of the nation. Dr. Baru stated that NNPC’s 49 percent share in the NLNG meant more dividend to the corporation, even as he advised NCDB to make room for more Nigerian Content in subsequent LNG projects.
GHANA
On Thursday 28th March, Aker Energy stated that it had submitted to Ghana a $4.4 billion plan for developing the Deepwater Tano/Cape Three Points (DWT/CTP) block offshore Ghana.
The block’s Pecan field, located about 115KM off the West African country in ultra-deep waters ranging from 2,400 to 2,700 meters, is estimated to hold 334 million barrels of oil, with estimated plateau production of 110,000 barrels per day (bpd) over 25 years.
Aker’s Pecan plan calls for a Floating Production, Storage and Offloading Vessel (FPSO) as a centre for processing and exporting of crude oil, with a Subsea Production System (SPS).
The field development will comprise of up to 26 subsea wells, including 14 advanced, horizontal oil producers and 12 injectors with alternating water and gas injection (WAG), and the use of multiphase pumps as artificial lift, to maximize oil production.
The operator is evaluating offers from leasing contractors to supply a conversion hull FPSO and has reportedly received offers from Modec, SBM, Yinson and Bumi Armada. The Plan for development and operations (PDO) was submitted to Ghanaian authorities and upon approval, the partners will work toward a final investment decision (FID). It’s estimated that first oil from the Pecan field will come in 2022.
Pecan, the largest of several discoveries in the area, could be tied to subsequent developments later on. The Pecan field area holds an additional 110-210 million barrels of oil equivalent (MMBOE) of discovered contingent resources (2C).
There is potential for total resources in the area to increase to between 600-1,000 MMBOE, provided successful appraisal drilling activities. Currently, data analysis and appraisal drilling are ongoing at Pecan South and Pecan South East. The DWT/CTP block is operated by Aker Energy with a 50 percent interest, and its partners Lukoil (38 percent), the Ghana National Petroleum Corporation (GNPC) (10 percent) and Fueltrade (2 percent).
GLOBAL
On Thursday 28th March, oil prices were down extending losses into a second consecutive session following a surprise rise in U.S. crude inventories. The U.S. West Texas Intermediate crude futures declined 78 cents to $58.64 a barrel at 8:00 AM ET (12:00 GMT), while Brent oil slumped 71 cents at $66.56 a barrel.
The U.S. Energy Information Administration (EIA) weekly report for Wednesday 27th March showed a rise in crude oil inventories by 2.8 million barrels in the week ending March 22, compared to forecasts for a stockpile draw of 1.1 million barrels. The data disappointed oil bulls counting on a third-straight week of draws after a total inventory slide of nearly 14 million barrels in the two previous weeks.
Oil prices were supported by OPEC and its allies like Russia to reduce output. Plummeting Venezuelan output due to U.S. sanctions and power cuts also provided support. Venezuela’s main oil export port of Jose and four crude upgraders needed to convert Venezuela’s heavy oil into exportable grades have been halted.
U.S. sanctions have also hit Iranian crude exports. In early May, analysts expect the United States to extend some sanction waivers on Iranian oil but might reduce the number of countries receiving them. The 180-day exemptions were granted in November 2018 to eight countries – China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea.
