The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari, during a facility tour of the Port Harcourt refinery, stated that NNPC will begin a full rehabilitation of the nation’s three refineries by January 2020.
The nation’s refineries are located in Port Harcourt, Warri and Kaduna and this move would help the corporation to refine crude oil at optimum capacity by 2022.
Alhaji Kyari said that the visit to the refinery was part of his determination and commitment to ensure that the nation’s refineries deliver real-time value and address the petroleum needs of Nigerians.
The GMD challenged the Port Harcourt refinery management to ensure that the nation’s indigenous engineers and other professionals working in the refinery were fully engaged to participate actively during the rehabilitation and own the process.
He said the involvement of the indigenous workers will build capacity, save cost and introduce an era of steady and uninterrupted production curve that will grow the oil and gas industry.
NNPC has signed a novation agreement with the Nigeria Agip Oil Company (NAOC) and Oando for the transfer of its stake in three oil blocks – Oil Mining Lease (OML) 61, 62 and 63 to its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
A novation agreement transfers the contractual obligations of one party to a third party or replaces a contractual obligation with another one. All parties involved in this type of contract must consent to the changes.
Alhaji Kyari added that part of the requirement for the agreement was to have the divestment authorized by the Minister of Petroleum Resources. Alhaji Kyari noted that the signing of the agreement was a clear sign to convince the partners that NPDC would deliver on its responsibilities.
NNPC has also signed an $875.75 million funding and technical services agreement and alternative financing deal for the OML 65 operated by the NPDC. The corporation signed the deal with CMES-OMS Petroleum Development Company (CPDC).
The Chief Financial Officer of the NNPC, Mr. Umar Ajiya, who signed for the corporation, explained that the package entails comprehensive financing solution that addresses the complex issues involved in growing NPDC’s production.
Mr. Ajiya said that it would help minimize its cost of capital and maximize its value preservation. On CPDC’s right to provide technical services, he listed the field of consideration in this regard to include: drilling and completion services; building capacity and technology transfer; generating employment opportunities for youths.
Mr. Ajiya noted that the expectation was that the collaboration between the NPDC and CPDC would translate in real terms to the efficient execution of the scope of activities for the optimal development of the OML 65 asset within cost and schedule while maximizing value to all the stakeholders. He informed that the project was expected to ramp up production at OML 65 from 900 barrels per day (bpd) to 60,000 bpd, with average production over field life at 40,000 bpd.
Kosmos Energy announced that the Yakaar-2 appraisal well offshore Senegal has confirmed a world-scale natural gas resource in the BP-led Yakaar-Teranga gas project. The Yakaar-2 appraisal well was drilled and has encountered approximately 30 meters of net gas pay in similar high-quality Cenomanian reservoir to the Yakaar-1 exploration well.
Yakaar-2 was drilled approximately 9 kilometers from Yakaar-1 and proved up the southern extension of the field. The results of the Yakaar-2 well underpin the view that the Yakaar -Teranga resource base is world-scale and has the potential to support a liquefied natural gas project that provides significant volumes of natural gas to both domestic and export markets. Partners in the Yakaar-Teranga gas project, located offshore Senegal, include PETROSEN, BP, and Kosmos.
Development of Yakaar-Teranga is expected in a phased approach with Phase 1 providing domestic gas and data to optimize the development of future phases. It will also support the country’s “Plan Emergent Senegal” launched by the President of Senegal in 2014.
On Thursday 26th September, oil prices fell as investors weighed Saudi Arabia’s recovery against the U.S.-China trade war. The U.S. West Texas Intermediate crude was down 50 cents at $55.99 per barrel at 12:55 PM ET (16:55 GMT), while Brent oil slid 23 cents to $62.16.
The U.S. Energy Information Administration (EIA) in its weekly report for Wednesday 25th September showed a rise in crude stockpiles by 2.4 million barrels in the week ending 20th September, against market expectations for a draw of 250,000 barrels.
It was the second-straight weekly crude build cited by the EIA after four-straight weeks of unseasonably heavy crude draws late into the summer that took 24 million barrels off stocks. Oil prices were under some pressure after data showed an unexpected rise in U.S. crude inventories.
Also, prices jumped as much as $8 a barrel, or nearly 15 percent, right after the attack on Saudi, which briefly disrupted about 5 percent of daily global crude production. However, Saudi Arabia said on Wednesday 25th September it now has a higher oil production capacity, at more than 11 million bpd.
Riyadh’s lightning pace in restoring production after the attack, ostensibly to safeguard the IPO prospects of its state oil company Aramco, has taken a toll on the risk pricing in oil. Crude prices retrenched within days nearly 8 percent of their initial gains and more than 4 percent in the past three days.