Market Report: Aker Energy reviews drilling campaign offshore Ghana
On Thursday 2nd May, the Nigerian National Petroleum Corporation (NNPC) announced that 132 firms had submitted bids for the 2019 crude oil-for-product swap programme, called the Direct Sale of crude oil and Direct Purchase of petroleum products scheme (DSDP). Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC.
The corporation said it had saved $2.2bn through the scheme since its inception. NNPC also announced the inauguration of the Asa North/Ohaji South Gas Processing Company, a partnership between the NNPC and Seplat Petroleum Development, adding that the company would deliver 300 million standard cubic feet of gas per day to the domestic market. At the bid opening ceremony for the 2019 DSDP in Abuja, the Group Managing Director, NNPC, Dr. Maikanti Baru said, “The third public bid opening ceremony for the DSDP tenders is fully in line and in demonstration of President Muhammadu Buhari’s transparency and anti-corruption initiatives, which the NNPC has imbibed and championed relentlessly. The DSDP scheme was introduced in 2016 with efficient and cost-effective systems and processes to plug the value-eroding loopholes of the January 2015 OPA (Offshore Processing Agreement) contracts.”
Dr. Baru emphasised that the corporation was fully committed to the initiative and would do everything possible to keep it ongoing and ensure smooth delivery of the project.
Dr. Baru at the Argus West Africa LPG conference in Abuja assured that Nigeria’s Liquefied Petroleum Gas (LPG) production will increase to about 5million tons per annum from the current 3million tons upon the completion of the ongoing projects.
He said the corporation was currently implementing some key initiatives aimed at consolidating and expanding its footprint across the LPG business value chain. Dr. Baru expressed concern that stakeholders were still not forthcoming with solutions to unlock the economic potentials of the LPG sector. He called on other investors to invest in the sector as the corporation was committed to the accelerated development of the domestic gas market.
Aker Energy Ghana Ltd., the operator of the Deepwater Tano Cape Three Points (DWT/CTP) block, announced that it has concluded its appraisal drilling campaign offshore Ghana.
Aker Energy is currently working on a revised Plan for Development and Operations (PDO), following scheduled feedback from Ghanaian authorities. Once the PDO has been agreed with the authorities, Aker Energy estimates that first oil from the Pecan field could be produced 35 months after the Final Investment Decision (FID).
Reserves, to be developed in the first phase, are estimated at 334 million barrels of oil equivalent (MMBOE). Discovered contingent resources, to be developed in subsequent phases, are estimated at 110-210 MMBOE, resulting in a combined volume base of approximately 450–550 MMBOE.
Aker Energy believes that the total resource potential in the area is still within the range of 600-1000 MMBOE. Aker Energy Ghana Limited is the operator under the DWT/CTP Petroleum Agreement with a 50 percent participating interest. Its partners are Lukoil Overseas Ghana Tano Limited (38 percent), the Ghana National Petroleum Corporation (GNPC) (10 percent) and Fueltrade Limited (2 percent).
On Thursday 2nd May, oil prices were weighed down after data showed that U.S. output rose to a record, leading to a surge in inventory levels. The U.S. West Texas Intermediate crude prices were down 1.4 percent to trade at $62.7 at 08:04 AM ET (12:04 GMT), while Brent crude futures shed 1.3 percent to $71.22. The U.S. Energy Information Administration weekly report for Wednesday 1st May showed a rise in crude stockpiles by 9.9 million barrels for the week ending April 26, hitting the highest level since Sept. 2017.
Oil prices continued to be underpinned by the political crisis in Venezuela, tighter U.S. sanctions against Iran that allow no more exemptions from May and as the OPEC continued supply cuts.
Oman’s energy minister Mohammed bin Hamad al-Rumhy said OPEC’s goal to extend the production cuts when the group and its allies meet in June. Despite the desire of many OPEC members to continue supply cuts, OPEC may eventually be forced into action to meet demand in a market that has seen prices rise more than 30 percent this year. Russia has sent signals about potentially increasing output.