The Group Managing Director of the NNPC, Alhaji Mele Kyari, has made assurances on the availability of an adequate supply of petrol during the festive period. He stated that there is enough petrol available in the country for the Christmas and New Year period. Furthermore, the Petroleum Product Pricing Regulatory Agency (PPPRA) declared that the country has 47 days sufficiency of petrol.
The agency stated that the average petrol inland stock between 23rd and 29th of November 2019 stood at about 1.14 billion litres whole marine stock was at about1.54 billion litres. The total stock available amounts to 2.68 billion litres, which the agency stated would be enough for the festive season ahead.
The Minister of State for petroleum Mr. Timipre Silva has stated that the country has kept to its quota as agreed with the Organization of the Petroleum Exporting Countries (OPEC). This comes after compliance improved in October, where production stood at 1.8 million barrels per day (bpd) and 100% compliance in November, compared to 1.96 million bpd produced in June when production from the Egina field ramped up production.
OPEC in the summer reset the country’s quota to 1.77 million bpd up from 1.69 million bpd earlier in the year. Global demand for both light and heavy crude grades from Nigeria have also increased, supported by robust gasoline cracks and price increases in competing grades. Demand for low-sulphur fuels are also expected to rise due to the International Maritime Organisations Fuel Sulphur Regulation coming into effect in January 2020. Bonga and Egina had their prices reach record highs this year as refiners demand more low-sulphur fuels.
Australian oil and gas explorer FAR Ltd said it has submitted the final field development and exploitation plan for the Sangomar oil field to the Senegalese government. Sangomar is expected to yield its first oil in 2023. The oil field, formerly known as SNE, which is 15% owned by FAR and operated by Australia’s Woodside Petroleum (35% interest), is positioned to be Senegal’s first offshore oil development field. Other Sangomar Field Development Joint Venture (JV) members include Cairn Energy subsidiary Capricorn Senegal Limited (40%), and the Senegal national oil company Petrosen (10%).
Woodside also stated the JV participants are expected to make their respective final investment decisions on Sangomar later in December. This is subject to the grant of an exploitation authorization from the government and relevant JV approvals. Under Phase 1 of the Sangomar Field Development, the JV would deploy a stand-alone Floating Production Storage and Offloading (FPSO) facility linked to 23 subsea wells and supporting subsea infrastructure.
Woodside stated that Phase 1 of the development will target an estimated 230 million barrels of oil, adding the FPSO will likely be able to produce approximately 100,000 bpd. However, financing for the project has stalled amid an arbitration in which FAR has challenged Woodside’s acquisition of a 35% interest in the project in 2016. The arbitration is due to be resolved by the end of 2019.
On Thursday 5th December, oil prices rose ahead of OPEC meeting where members are expected to agree on deeper output cuts aimed at supporting markets, while a sharp drop in U.S. oil inventories also underpinned prices. The U.S. West Texas Intermediate (WTI) crude futures were up 19 cents at $58.61 a barrel, while Brent crude futures were up 52 cents at $63.52 a barrel at 7:41 AM ET (12:41 GMT). The U.S. Energy Information Administration in its weekly report showed a fall in crude inventories by 4.9 million barrels in the week ending November 29, compared with analysts’ expectations for a drop of 1.73 million barrels.
OPEC’s ministers at the meeting in Vienna agreed to one of their deepest output cuts for this decade, though they were still debating how long the curbs should last. The cuts would likely only last through the first quarter of 2020, a much shorter timeframe than suggested by some OPEC ministers, who have called for extending cuts until June or December 2020. OPEC’s effort to deepen cuts has also been driven by Saudi Arabia, which needs higher oil prices to support its budget revenue and provide a favourable backdrop to the pending Initial Public Offering (IPO) of state-owned oil giant Saudi Aramco.
Russian Energy Minister Alexander Novak said a panel of key energy ministers had recommended that OPEC and its allies, also known as OPEC+ group deepens existing supply curbs of 1.2 million bpd by another 500,000 bpd. The cut of 1.7 million bpd would amount to 1.7% of global supply. OPEC and its allies will be meeting on Friday 6th Dec. to continue further talks. OPEC could, in theory, decide to approve a longer time-frame than OPEC+.