Market Report: Nigeria, Russia discuss partnership with NNPC
Image: BP Global
On Tuesday, Russian Ambassador to Nigeria, His Excellency, Alexey Shebarshin and the Ambassador of the United Arab Emirates (UAE), His Excellency Obaid Mohammed Aitaffag visited Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
Both countries expressed their readiness to expand the scope of their partnership with the NNPC in the upstream, midstream, downstream and services sectors to further boost their various economies.
Shebarshin said the proposed synergy was for the betterment of the indigenous people of Russia and Nigeria. He added that the visit was to consolidate the collaboration and partnership with NNPC in ensuring the growth and development of the Nigerian oil and gas industry for collective interests.
Speaking in a similar vein during his courtesy call to Dr. Baru, UAE Ambassador Aitaffag, said his country would continue to partner with the NNPC in the development of the downstream and services sector of the petroleum sector.
The Nigerian Association of Petroleum Explorationists (NAPE) paid a courtesy visit to Dr. Baru who urged members of NAPE to deploy their wealth of knowledge and experience to find more crude oil to meet the 40 million barrels reserves target. Dr. Baru described the group as the foundation of the oil industry on account of the critical role its members play in the oil and gas value chain.
He urged the members of NAPE to go beyond convention and search deeper and wider to ensure the sustainability of the barrel by “finding more, producing more, and doubling production reserve ratios on a yearly basis”.
Dr. Baru said that NNPC was involved in extensive exploration work in the inland basins with a view to finding more oil to grow the nation’s crude oil reserves.
Similarly, Dr. Baru also challenged the Nigerian Society of Engineers (NSE) during a courtesy call to come up with technologies to help deepen the development of renewable energy in the country. Dr. Baru highlighted some of the corporation’s strides in the development of renewable energy across various states of the country using abundant natural resources like palm oil, cassava, and sugarcane. He stated that the projects would help create the much needed linkage between the energy and agricultural sectors and urged members of the NSE to come up with technologies and strategies to enhance the integration process for the growth of the economy, adding that NNPC was committed to producing clean hydrocarbons in an environmentally friendly manner for the benefits of all Nigerians.
On October 30, BP and its partner Kosmos Energy announced they were on track to take the Final Investment Decision (FID) for the West African Tortue liquid natural gas (LNG) project by the end of 2018. The project, based on an estimated 15 Trillion Cubic Feet (Tcf) of gas in an area straddling the Mauritania/Senegal maritime border, is expected to produce its first gas in 2022. New FIDs in the global LNG supply industry have been few and far between in recent years due to relatively low LNG prices and the slew of new projects starting up, but more investment decisions are expected as the LNG market looks likely to tighten from 2021.
BP CFO Brian Gilvary said: “The project entered the FEED phase in April 2018, and we are still targeting FID at the end of 2018 and first gas in 2022.”
In February, BP and US- based Kosmos moved a step closer to FID on Tortue LNG after the governments of Mauritania and Senegal signed an intergovernmental deal on the development. Gilvary said that in the first phase, Tortue LNG would have a capacity of 2.5 million metric tons (mt)/year before moving to peak production of 10 million mt/year.
Tortue LNG will add to the existing LNG export facilities in West Africa that include the six-train Nigeria LNG, Angola LNG and Equatorial Guinea LNG. A new floating LNG plant off Equatorial Guinea, the Ophir Energy-operated Fortuna LNG project has, however, stalled with time running out for the UK-based operator to reach FID before the company’s license expires at the end of 2018. More FIDs are expected globally after Shell and its partners earlier in October took FID on the two-train, 14 million mt/year LNG Canada project.
On November 1, oil prices fell amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.
The U.S. West Texas Intermediate crude oil futures for December delivery was down 48 cents at $64.83 a barrel at 7:30 AM ET, while Brent crude oil futures slumped $1.13 at $74.34 per barrel. The U.S. Energy Information Administration’s weekly report for Wednesday October 31, showed a rise in crude stockpiles by 3.2 million barrels in the week ending October 26.
A Reuters survey found the Organization of the Petroleum Exporting Countries (OPEC) boosted oil production in October to its highest since 2016, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to U.S. sanctions, set to start on Nov. 4. On Wednesday, U.S. President Donald Trump said in a presidential memorandum that he had determined there was sufficient supply of petroleum and petroleum products from nations other than Iran to permit a reduction in purchases from that country.
Elsewhere, China’s oil giant Sinopec is reportedly in talks with government authorities and Iranian suppliers concerning its purchases of Iranian oil, seeking to make special arrangements in the following weeks.