Image: Riviera Maritime Media
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Noble Energy EG Ltd. announced first gas flow from the safe and successful execution of the Alen Gas Monetization Project. The project consists of a 70 km pipeline with a capacity of 950 million cubic feet of natural gas equivalent per day that allows gas from the Alen field – located in the Douala Basin offshore Equatorial Guinea – to be processed through onshore existing facilities, maximizing the development of current and future regional gas resources.
The Alen Gas Monetization Project is a key step forward for the country’s envisioned Equatorial Guinea Gas Mega Hub, which seeks to utilize existing infrastructure and support a thriving world-class gas industry within Equatorial Guinea. This project facilitates the transport of gas from offshore production infrastructure to existing onshore facilities at Punta Europa (the Alba Plant and the Equatorial Guinea LNG Plant), where it will be processed and converted into LNG. The project allows for future discovered resources to be processed in the country, supports jobs and economic growth, and further solidifies the country’s position as a key player in Africa’s oil and gas industry.
The Nigerian National Petroleum Corporation (NNPC) stated that it will continue to focus on condensates, which are excluded from the production curtailment to curb the crude oil supply glut and boost the government’s revenue. Alhaji Mele Kyari, the Group Managing Director of the corporation stated that the cuts had negatively affected the government’s revenue with the country’s production dipping by 313,000 barrels per day (bpd) since January 2021.
However, Kyari admitted that the reduction in output was in the best interest of the oil market. The country has been pumping 1.516 million barrels instead of its reference 1.829 million bpd, far lower than the target of 3 million bpd set by the NNPC. By focusing on condensates, the country is filling the production gap and boosting its revenue as cuts remain in effect for at least the next month. The Minister of State for Petroleum Resources, H.E. Timipre Sylva, said Nigeria should take the leading role in Africa as gas becomes the dominant fuel for generating power in the continent. To do this, the Federal Government – under the leadership of President Muhammadu Buhari – is implementing initiatives to foster productivity and attract investments in the gas value chain.
Some initiatives include the Federal Government through the Ministry of Petroleum Resources and the Nigeria Liquefied Natural Gas (NLNG) Limited collaborating to produce the blueprint for the actualization of Nigeria’s industrialization and transformation through the ‘Decade of Gas Initiative.’ Furthermore, the NLNG is sponsoring the 2021 Nigeria International Petroleum Summit’s pre-conference, hosted in Abuja on March 29, where President Buhari will lead top oil and gas stakeholders in attendance to brainstorm and flag off the ‘Decade of Gas’ project. This would allow the country to be positioned for sustainable growth a globally reduced reliance on crude oil and an increase on gas.
On March 4, crude oil prices increased amid growing optimism that top producers will react with caution as they discuss the potential to raise output. The U.S. West Texas Intermediate crude futures traded 1.8% higher at $62.38 a barrel, while Brent crude futures rose 1.8% to $65.25 at 9:15 AM ET (14:15 GMT). The U.S. Energy Information Administration’s weekly report for March 3 showed a massive build-up of 21.563 million barrels for the week ending February 26, against analysts’ forecast of a 928,000-barrel draw, while a 1.285-million-barrel build was reported during the previous week.
The Organization of Petroleum Exporting Countries, including Russia and other oil producers (OPEC+), have agreed to extend oil cuts by one month into April, giving small exemptions to Russia and Kazakhstan after deciding that demand recovery from the COVID-19 pandemic was still fragile despite a recent oil price rally.
Before the meeting, the general expectation was that the four-month rally in the oil futures price from below $40 a barrel to currently above $60 would prompt these producers, desperate for additional revenue, to increase their agreed output, possibly by as much as 1.5 million bpd. However, ahead of the meeting, Saudi Arabia Energy Minister H.E. Prince Abdulaziz was quoted saying that the oil market has “improved” but urged caution, and stated that the group “must keep some of its powder dry.” Similarly, Russia’s Deputy Prime Minister Alexander Novak said the oil market has not yet fully recovered even though we are “in much better shape” with a lot of uncertainties remaining. These relatively cautious statements have led traders to take a positive view on additional supply.