Market Report: Tower Resources Poised to Drill 35-Million-Barrel Appraisal Well in Cameroon

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The weekly market report is provided by Gladius Commodities of Lagos, Nigeria. 

Cameroon

An appraisal-cum-exploration well, with a potential resources base of 35 million barrels of oil, is scheduled for drilling this year at Njonji, Cameroon by junior oil producer Tower Resources. The announcement came following Tower Resources’ receipt of a medium-term loan from the Banque Gabonaise et Française Internationale (BGFI), Central Africa’s biggest banking group.

Tower Resources and the BGFI reached an agreement for a medium-term loan of $7.1 million intended for the partial financing for the company’s Njom-3 oil well. The loan will cover approximately 40% of the anticipated total costs of $18 million, with Tower Resources expected to cover the remaining cost.

Drilling activities are expected by Q3 following the conclusion of negotiations between the Tower Resources and the BGFI.

Nigeria

Group Managing Director (GMD) for the Nigerian National Petroleum Corporation (NNPC), Alhaji Kyari, discussed potential investments in the Nigerian oil and gas industry for Spanish and Nigerian business executives while in Madrid, Spain last week.

Kyari noted that Spain remains a crucial and strategic partner for the Nigerian oil and gas market, with 26% of all liquefied natural gas produced in Nigeria exported to the European country. Kyari noted his awareness of the energy transition and its effect on the industry while reiterating that net-zero commitments for 2050-2060 refer specifically to cleaner hydrocarbons as opposed to zero hydrocarbons.

To achieve the production of cleaner energy sources, Kyari indicated that Nigeria is in its “Decade of Gas”, demonstrating the country’s commitment to the energy transition. Kyari further stated that the “Decade of Gas” will show investors that Nigeria’s oil and gas sector will continue to be a safe and profitable investment destination now, and in the future.

Global

Oil prices fell approximately 3% on Thursday, 29 June, with OPEC+ confirming it would only increase its previously announced output in August despite the low global supply of oil. The U.S. West Texas Intermediate crude fixtures fell $4.02, or 3.7% to settle at $105.76 per barrel, while the Brent Future settled down $1.69, or 1.5% to settle at $110.05.

OPEC+ has previously considered increasing output by 648,000 barrels of oil per day in July and August, but following 2 days of discussions, the group decided to stick with its current plan to increase output only for August.

Crude oil experienced a steep reaction following U.S. President Joe Biden’s remarks during the NATO summit in Madrid on 30 June, that he will ask U.S. allies in the Persian Gulf region to boost oil production during his trip to Saudi Arabia on 16 July. The President indicated that his request will be brought to the Gulf Cooperation Council forum, a six-member intergovernmental gathering of oil-rich countries along the Persian Gulf.

Download the full report here.

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