MARKET REPORT: Oil and Gas Sector Sees Uptick
At the Future Investment Initiative held in Saudi Arabia, Nigerian President, H.E. Muhammadu Buhari said the Nigerian National Petroleum Corporation (NNPC) and Saudi Aramco will collaborate in revamping refineries. President Buhari met with Yasir Al-Rumayyan, chairman of Aramco and Saudi Arabia’s Public Investment Fund to discuss areas of cooperation.
He has directed the Minister of State, Petroleum Resources, H.E. Timipre Sylva; the Minister of Industry, Trade and Investment, H.E. Niyi Adebayo and the Group Managing Director, NNPC, Mele Kyari, to work with the Saudis and expedite the modalities for investments and collaborations in Nigeria’s oil and gas sectors. He also noted that NNPC would soon embark on a diagnostic assessment of refineries, pipelines, depots and other infrastructure across the country to ascertain the level of collaboration with Saudi Aramco.
Meanwhile, NNPC says its data-focused program “Operation White” is helping Nigeria with budgeting and planning, as it provides accurate analytical data that shows the exact energy needs of the country. At the touring of the expo section of the Oil Trading and Logistics Africa in Lagos, Bala Wunti, Managing Director for Petroleum Products Marketing Company, said the Ministry of Petroleum remained committed to ensuring energy security for Nigerians and their business and in ensuring that the country meets her 40-billion-barrel oil reserve by 2025.
Eland oil and gas and its joint-venture subsidiary, Elcrest Exploration and Production Nigeria, suspended well operations at Gbetiokun-4 production well due to technical problems (drilling component failure). The firm suspended operations while awaiting delivery of equipment from outside Nigeria. The rig-team will suspend the Gbetiokun-4 well to make it safe and move to an adjacent slot to commence operations on the next planned development well, Gbetiokun-5.
Kosmos Energy and its partners have discovered gas in the Orca 1 well offshore Mauritania with enough resources to support a world-scale LNG project. Orca-1, in the BirAllah development, encountered 36 meters of net gas pay near the Marsouin 1 well, where Kosmos and its partners first found gas in 2015.
The discovery has raised the stakes for a comprehensive LNG and gas development in the region, after a recent string of discoveries in the deep-water basin offshore Mauritania and Senegal. In total, Kosmos believes that Orca-1 and the original Marsouin-1 discovery well have de-risked up to 50 trillion cubic feet (tcf) of gas. Kosmos said it will extend the timeline of its Mauritania/Senegal sell-down process into 2020, due to the scale and materiality of the Orca-1 discovery, giving potential bidders more time to analyze the new data. Kosmos’s partners in the BirAllah gas hub include oil major BP and the state-owned Société Mauritanienne des Hydrocarbures et de Patrimoine Minier.
On Thursday 31st October, oil prices fell pressured by a U.S. inventory build and fresh uncertainty around a potential trade deal between the United States and China, which weighed on the demand outlook. The U.S. West Texas Intermediate crude futures were down 58 cents at $54.47 at 08:59 AM ET (12:59 GMT), while Brent crude futures were down 58 cents at $59.66 a barrel.
The U.S. Energy Information Administration in its weekly report for Wednesday 30th October showed a rise in crude inventories by 5.7 million barrels in the week ending October 25, compared with analyst expectations for an increase of 494,000 barrels.
The prolonged trade war between the U.S. and China has been weighing on the oil demand outlook. Hopes for a breakthrough were dashed due to the cancellation of the summit to be attended by the U.S. and Chinese Presidents after a protest in host nation Chile. Chinese officials expressed their doubts about reaching a comprehensive long-term trade deal with the U.S. Overnight.