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Woodside Petroleum expects to increase its capital spending by one third to $4 billion in 2022, as it advances oil and gas growth projects in Western Australia and Senegal, as well as step up efforts to start producing hydrogen. After booking record quarterly sales revenue on soaring liquefied natural gas prices, CEO Meg O’Neill noted that the company was positioned for a big year aiming to seal a merger with the petroleum arm of BHP Group by June and progress the Scarborough gas field development and Pluto LNG plant expansion.
Woodside is also focused on its Sangomar oil project in Senegal, which is on track to start producing in 2023. Total investment spending in 2022 is expected to be between $3.8 billion and $4.2 billion, compared to $3 billion in 2021. Woodside estimated 2022 production would increase by about 4% to between 92 million barrels of oil equivalent (MMboe) and 98 MMboe.
The Group Managing Director of the Nigerian National Petroleum Company (NNPC), Alhaji Mele Kyari, said the Petroleum Industry Act (PIA) has allowed the organization to shed some of its high liabilities. Alhaji Kyari highlighted the significance of the PIA to the NNPC and the Nigerian economy while addressing staff of NNPC in a town hall meeting held at the NNPC Towers, Abuja. He stated that the new legislation will provide enormous opportunities for the company to earn more revenue for the country.
Kyari noted that the new legislation had raised shareholders’ expectations on the company and given NNPC room to make progress. He encouraged NNPC staff to ensure that the company becomes a commercially viable entity and a multi-billion-dollar entity that would continuously deliver value to its shareholders.
The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, after the official release of crude production outputs by the Organization of Petroleum Exporting Countries (OPEC), disclosed that Nigeria had an underperformance level of 78,000 barrels per day (bpd) in December 2021 and lost circa 2.418 million barrels of crude. However, crude oil prices have steadily increased, and Nigeria has recorded a trade surplus of $3.6 billion. H.E. Sylva noted that although the nation has struggled to increase its capacity to pump more oil, the full implementation of the PIA would provide a positive atmosphere to increase the production of hydrocarbons with much-needed investment.
On January 20, oil prices posted slim losses after several days of strength that pushed benchmarks to seven-year highs due to concerns about tight supply. The U.S. West Texas Intermediate crude futures for February delivery lost 6 cents to $86.90 a barrel on the last day of the contract’s life, while Brent crude futures settled down 6 cents to $88.38 a barrel.
The U.S. Energy Information Administration’s weekly report for January 19 showed that U.S. crude oil inventories increased by 0.5 million barrels from the week ending January 14, against analysts prediction of a 1.367-million-barrel draw, and a 1.077-million-barrel draw was recorded during the previous week. Shorter-term supply disruptions are also helping tighten markets. Brent futures rallied sharply after reports of a key oil pipeline running from Iraq to Turkey was knocked out by an explosion.
Tuesday’s explosion near the Kirkuk-Ceyhan pipeline in South-eastern Turkey halted the flow of crude. However, supply through the pipeline resumed a day later. Supply concerns elsewhere remain elevated, after Yemen’s Houthi group attacked the United Arab Emirates, OPEC’s third-largest producer, earlier in the week. Tensions between Russia and the U.S. over Ukraine also remain high, with a large Russian presence built up near the border with Ukraine. Concerns about a potential armed conflict and subsequent supply disruptions are also mounting. A broad recovery in fuel demand globally, combined with a tightening market, is also adding to oil’s woes. OPEC and allies are struggling to hit its monthly output increase target of 400,000 bpd. Some investors are also predicting that an oil rally may continue in the next few months, where prices could top the $100 mark.