Market Report: NNPC to Supply Retailing Stations with CNG
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In a bid to encourage the use of compressed natural gas (CNG) to power automobiles, nationwide retailing stations operated by the Nigerian National Petroleum Corporation (NNPC) will be adequately supplied with CNG by December 2020. Alhaji Mele Kyari, Group Managing Director of NNPC stated – while delivering a message of goodwill at the 2020 South East Gas Utilization Forum in Owerri, Imo State – that the alternative is seen as a viable option when compared to gasoline and the NNPC plans to make this available to the public by December 2020. The NNPC has engaged petroleum products marketers on the sale of liquefied petroleum gas and CNG for fueling power generating plants and vehicles respectively.
The NNPC also announced that the Asa North-Ohaji South gas project, one of the largest Greenfield gas condensate development projects ever undertaken in Nigeria, is expected to produce 600 million standard cubic feet of gas per day; the equivalent of approximately 2.4 gigawatts of electricity, in its effort to ramp up gas-to-industries and gas-to-power in the country.
Kyari also commended the imminent completion of the landmark Obiafu-Obrikom-Oben ‘OB3’ gas pipeline, which would help commercialize over 2 billion cubic feet of gas per day and generate billions in revenue as well as create thousands of employment opportunities for Nigerians.
At the 2020/2021 Crude oil tender prequalification bid opening ceremony, Kyari said that no fewer than 339 companies are bidding for the 2020/21 sales and purchase of the Nigerian crude oil grades. He said that the event marked another transparent process for the corporation and despite the challenges posed by COVID-19, the NNPC had modified the bidding process by leveraging on technology to progress the cycle of crude oil bidding.
Tullow Ghana Limited, a subsidiary of London’s Tullow Oil Plc, the operator of the Jubilee and Tweneboa, Enyenra, and Ntomme (TEN) fields, achieved a significant milestone of 300 million barrels of oil production from the Jubilee field. With the support of the government, the Jubilee Field went from discovery to first oil in just 40 months. Tullow and its partners have invested $10.8 billion from 2007 to 2019 in the Jubilee Field and continue to invest in Ghana’s hydrocarbon resources. In the first half of 2020, Jubilee production averaged 84,700 barrels of oil per day (bpd), and TEN productions averaged 50,900 bpd with facility uptime on both floating production storage and offloading units in excess of 95%.
On 15 October, oil prices edged higher extending their 2% gains from the previous session, after data showed U.S. crude stockpiles fell last week, while the Organization of the Petroleum Exporting Countries and its allies (OPEC+) were seen complying with their pact to curb output in September. The U.S. West Texas Intermediate crude futures increased by 0.2%, to $41.12 a barrel at 04:30 GMT, while Brent crude futures rose by 0.2% to $43.39 a barrel. The U.S. Energy Information Administration’s weekly report for 14 October showed that crude oil inventories declined by 3.8 million barrels in the week ending 9 October, against analysts’ expectation for a decline of 2.8 million barrels.
Oil prices climbed for a third day despite a resurgence in COVID-19 infections across Europe likely denting fuel demand. New cases have hit around 100,000 daily compared with more than 51,000 in the United States. Hurricane Delta forced production shutdowns along the Gulf Coast last week. Analysts said the crude stock drawdowns appear exaggerated by precautionary reactions related to the Hurricane Delta shutdown. Although it seems the number could have been higher based on Wednesday’s data from the American Petroleum Institute and whispered numbers going around the market. Also, OPEC had a 102% compliance with their agreement to cut oil supply in September ahead of a meeting of the OPEC+ technical committee.
OPEC+ is due to taper production cuts by 2 million bpd, from its current 7.7 million bpd since January. OPEC’s Secretary-General, H.E. Mohammed Barkindo said when OPEC+ holds its ministerial meetings on 30 November and 1 December, the stock of the whole year will be obtained and analyzed to inform any decision to stay the course or amend its policy.