Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) announced that the corporation and the Nigerian Content Development and Monitoring Board (NCDMB) have committed to growing Local Content in the Oil and Gas Industry. Both entities intend to grow the Local content of the industry from the current 40 percent to 70 percent by 2027, as part of strategies to sustain economic development in the country. The strategy for implementing the NCDMB Local Content development includes closing human capacity gaps, skills acquisition and assets ownership by indigenous companies. Dr. Baru listed the achievements recorded in the development of Local Content to include ramping up pipe mills from 100,000 metric tonnes per annum (MT/annum) to 420,000 MT/annum, and the engagement of indigenous service companies and contractors to carry out NPDC’s operations and maintenance activities. Dr. Baru said NNPC is actively collaborating with NCDMB to drive indigenous participation through the engagement of community resources, human resources and capital in the execution of Joint Venture projects and maintenance activities. Local companies are now active participants in the bidding process for the crude oil term contracts and the Direct Sale of Crude Oil and Direct Purchase of Petroleum Products contract. Dr. Baru also stated that in order to directly intervene in local participation, NNPC established the NNPC Oil Field Services Limited (NOFS) to create sufficient capacity for direct involvement in the provision of high-end value-added services to the industry.
Dr. Ibe Kachikwu, the Minister of State for Petroleum stated that Nigeria has agreed to cut 40,000 barrels out of her 1.7 million barrels per day (bpd) crude oil production. This decision was taken after two days of negotiations in Vienna, Austria, by member countries of the Organisation of Petroleum Exporting Countries (OPEC) and their non-OPEC allies led by the Russian Federation, as part of a collective agreement to cut their outputs by 1.2 million bpd. The details of the agreement after the meeting showed that OPEC countries would take out 800,000 bpd from the market, non-OPEC members would have to take out the balance of 400,000 with Russia contributing as much as 230,000bpd. Iran, Venezuela and Libya were however granted exemptions from the cuts because they either suffered sanctions or production disruptions.
On Wednesday, French oil and gas giant Total SA announced it has secured new exploration and production (E&P) contracts for two offshore blocks in Mauritania. The company signed an agreement with the Ministry of Petroleum, Energy and Mines of Mauritania for Blocks C15 and C31 deep offshore Mauritania. The blocks cover a total area of 14,175km2 and will strengthen Total’s position in the country. Total will operate these two blocks with a 90% interest. The remaining 10% stake will be held by the Société Mauritanienne des Hydrocarbures et de Patrimoine Minier. Total E&P president Arnaud Breuillac stated: “This agreement contributes to the implementation of Total’s strategy that aims to explore basins in proven yet underexplored petroleum systems. The addition of these new blocks to our existing positions demonstrates our commitment to the development of the Mauritanian oil sector and will enhance Total’s presence in West Africa, one of the Group’s core exploration areas.
” Total already owns participation interest and operatorship in Blocks C7, C9 and C18 in the Mauritanian basin, which stretches from Mauritania to Senegal, Ivory Coast and Nigeria, as well as comprises half of the company’s acreage in Africa. The company is planning to drill a well on Block C9 next year.
On Thursday, oil prices gained after the Energy Information Administration (EIA) reported a drop in U.S. crude stockpiles. The U.S. West Texas Intermediate (WTI) Futures for January delivery gained 19 cents at $51.34 a barrel at 10:45 AM ET (15:45 GMT), while Brent crude futures for February delivery traded up 16 cents to $60.31. The US EIA report for Wednesday 13th December showed a fall in crude inventories by 1.2 million barrels in the week ending December 7. However, the decline was less than expected, as markets previously forecasted a decrease of 3 million barrels.
Crude oil prices have also been supported by OPEC-led supply curbs announced after the two-day meeting in Vienna. OPEC announced a deal to cut their combined supplies by 1.2 million bpd over the next six months to clear a global oil glut and pull prices higher. OPEC said 2019 demand for its crude would fall to 31.44 million bpd; 100,000 bpd less than predicted last month and 1.53 million less than it currently produces. With less than three weeks to the end of 2018, WTI remains down about 15 percent on the year and some 32 percent lower from four-year highs of nearly $77 per barrel hit in early October. Brent is down about 10 percent on the year and some 31 percent lower from four-year highs of nearly $87 per barrel hit two months ago.