On Thursday 15th August, Nigerian National Petroleum Corporation (NNPC) disclosed that strategic partnerships and new investments in the upstream petroleum sector are essential to actualizing the growth of the nation’s crude oil reserves.
NNPC stated that the partnership would also help to achieve the 3 million barrels per day (bpd) oil production target by 2023, adding that there is a need to improve the nation’s revenue profile through new investments in the petroleum sector.
Alhaji Mele Kyari, the Group Managing Director of the NNPC in a meeting with the Executive Vice President of the China National Offshore Oil Corporation (CNOOC), Mr. Lu Yan Ji commended CNOOC for its plan to expand its investment in the Nigerian Petroleum Industry and assured it of the corporation’s support.
Mr. Lu said Nigeria was one of his company’s largest investment outlay standing at about $16 billion. CNOOC currently produces 800,000 bpd worldwide with a target of 1.2 million bpd.
Australia-based Woodside Energy announced it has awarded Halliburton nine conditional contracts for drilling and completion services for Senegal’s first deep-water offshore oil development. The SNE Field Development Phase one drilling campaign, which is due to start in late 2020 or early 2021, is for drilling and completing 18 wells with up to eight optional wells over an estimated three to four-year term.
The Phase 1 development concept for the SNE field is a standalone Floating Production, Storage and Offloading unit (FPSO) with subsea infrastructure. It will be designed to allow subsequent SNE development phases, including options for potential gas export to shore and also for future subsea tiebacks from other reservoirs and fields.
First oil production is targeted in 2022. In December 2018, Woodside awarded the subsea Front-End Engineering and Design (FEED) contract for SNE Phase 1 to the Subsea Integration Alliance, a partnership of OneSubsea, Schlumberger and Subsea 7.
In February 2019, Woodside awarded Modec the FEED contract for the FPSO, due to be the first production facility offshore Senegal. The FPSO will be designed to have plant capacity for 90,000 bpd oil,100 mmcf/d gas, 95,000 water production and be capable of storing 1.5 million barrels.
The FEED contract is intended to morph into an Engineering, Procurement and Construction (EPC) contract and lease, subject to a Final Investment Decision (FID) on the project expected this year. The SNE field is located within the Sangomar Deep Offshore permit area, approximately 100 kilometers south of Dakar, Senegal.
Two subsequent phases will target a further 250 million barrels via 32 to 34 additional wells. Phases 2 and 3 are anticipated to begin two to four years after Phase 1. Halliburton said it plans to begin initial engineering work in Perth, Australia, later this year, and then will transfer the work to Dakar, Senegal in 2020.
Woodside is the operator of SNE and has a 35 percent interest. Its partners in the field are Cairn (40 percent), FAR (15 percent) and Petrosen (10 percent).
On Thursday August 15, oil prices tumbled further in early trading in the U.S., after a brief stabilization overnight crumbled under a new wave of recession fears.
The U.S. West Texas Intermediate fell $0.67 to $54.55 a barrel at 8:45 AM ET (12:45 GMT), while Brent was down $1.09 to $58.39 a barrel. The U.S. Energy Information Administration (EIA) report for Wednesday 14th August showed a rise in crude oil inventories by 1.6 million barrels in the week ending August 9, confounding market expectations for a 2.8 million-barrel draw.
Oil prices also took a hit following weak industrial production, retail sales data in China and an inverted U.S. Treasury yield curve that sparked recession fears. Fears of a global recession, with all of its attendant effects on oil demand, surged again overnight as Beijing signaled it will retaliate against the U.S’s latest initiative to impose tariffs effectively on all U.S. imports from China.
With demand weakening, concerns that the market will slide into another glut are growing. In other news, reports suggested that Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), continued to pump above its agreed output ceiling in July, producing an average of 4.85 million bpd.
The figures come only days after the International Energy Agency revised down its forecasts for demand growth for 2019 and 2020.