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SENEGAL
Woodside, the operator of the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, which includes Société des Pétroles du Sénégal (PETROSEN), announced its plans to begin the drilling campaign for the Sangomar Field Development Phase 1, offshore Senegal. The wells are to be drilled by two drill ships, the Ocean BlackRhino and the Ocean BlackHawk. A fleet of three supply vessels and three helicopters will support the drill ships, transporting the materials, equipment and personnel needed for the campaign. The ships will operate out of the Senegal Supply Base, located at Mole 1 in the Port of Dakar.
Woodside’s participating interest in the RSSD joint venture is 82% for the Sangomar exploitation area (with PETROSEN’s participating interest 18%) and 90% for the remaining RSSD evaluation area (with PETROSEN’s participating interest 10%). The Sangomar Field Development Phase 1 will comprise a stand- alone Floating Production Storage and Offloading facility with a production capacity of approximately 100,000 bpd, 23 subsea wells and supporting subsea infrastructure. The joint venture is committed to developing the Sangomar field following international industry best practices and relevant government regulations.
NIGERIA
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari contributed towards the lead paper titled “Enhancing Effective Synergy Between Oil and Gas, Maritime Sectors for a Greater Value” at the 4th value chain yearly lecture and awards. Alhaji Kyari cited that present-day freight cost for oil shipment stands at about $5 billion, however with the increased activities in the oil and gas sector specifically in oil production this revenue could increase to $8 billion. To achieve this, he noted that the industries must look inwards and build capacity locally to strengthen the synergy between the maritime and oil and gas sectors. Alhaji Kyari said almost all oil production is offshore and over 70% of the total production is transported by ships. Hence, the potential to increase the annual freight cost to $8 billion is achievable.
The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, spoke at the “Nigeria/Organization of Petroleum Exporting Countries: 50 Years of Partnership ” press conference in Abuja, and gave a timeline of the possible ending of petrol subsidies in the country. Minister Sylva said once the President of Nigeria, H.E. Muhammadu Buhari, gives his assent on the Petroleum Industry Bill (PIB), the price of petrol in Nigeria will be fixed based on market forces. This is because there is no provision for subsidy in the PIB, while the PIB also states that petroleum products will be sold at market-determined prices. He noted that the refineries being rehabilitated would cushion the effect of subsidy removals. The minister also disclosed that Nigeria’s Organization of Petroleum Exporting Countries (OPEC) oil production quota is now 1.554 million barrels per day (bpd), excluding condensate oil. Minister Sylva said that Nigeria’s 50 years relationship with OPEC has benefited both parties immensely, adding that without the group the international oil market would have been in chaos.
GLOBAL
On July 15, crude oil prices slumped, weighed by the combination of a surprise rise in U.S. gasoline stocks and talk that OPEC+ is nearing a deal to increase supply onto the global market. The U.S. West Texas Intermediate crude futures traded 1.1% lower at $72.36 a barrel, while the Brent crude contract fell 1.2% to $73.84 at 9:45 AM ET (13:45 GMT).
The U.S. Energy Information Administration’s (EIA) weekly report for July 14 showed a seventh consecutive weekly draw in U.S. crude stockpiles of 7.897 million barrels for the week ending July 9, against analysts’ forecast for a draw of 4.359 million barrels.
Crude oil was already having a banner year amid a faster-than-expected recovery from the pandemic. Prices face pressure over worries over what OPEC+ will do for August production and the likely impact of the COVID Delta variant in the coming months on oil demand and a rebound in the dollar. Also adding to the market’s woes were reports suggesting Saudi Arabia and the United Arab Emirates appeared to be closing in on an agreement on August production. But the deal still needs to be ratified by the OPEC+ alliance.
The International Energy Agency warned that the market would tighten if OPEC did not add more barrels. However, investors remain concerned about the recent outbreaks of COVID- 19 involving the Delta variant in several countries and its impact on fuel demand. Also, OPEC published its first detailed assessment of 2022, in which it forecast that global oil demand will steadily recover and surpass pre-pandemic levels in the second half of 2022. However, it also pointed to a quiet period in the first quarter. OPEC estimated that global oil demand would reach 99.86 million bpd, up by 3.28 million bpd from this year, and just short of the 99.97 million bpd level in 2019. It also sees global oil demand exceeding the 100 million bpd mark in the second half of 2022.
