Market Report: Equatorial Guinea to Start Work on Bioko Oil Terminal
Bioko Oil Terminal in Equatorial Guinea is expected to start work following the recent agreement signed between the Government of Equatorial Guinea and UAE-based Arabian Energy DMCC at the Equatorial Guinea-Saudi Arabia Economic Forum held in Jeddah. Both entities have agreed to work together on the development, implementation, construction and financing of the 500 million USD project. The Minister of Mines and Hydrocarbons of Equatorial Guinea, Gabriel Mbaga Obiang Lima said this storage facility is first of its kind in West Africa and aims to be the largest oil and petroleum products storage facility in the region. It is hoped that the facility would provide pivotal trading and services to Equatorial Guinea and improve the country’s economy. The terminal will serve as a centre for the distribution of petroleum products and crude oil to the West and Central African industry, attract investment, build local financial capacity and increase shipments to key export markets. The terminal, housing 22 storage tanks with total capacity of 1.2 million cubic meters will be built in two phases and operated on a “first come, first served” basis. Phase 1 will consist of refined production while Phase 2 capabilities will involve storing, handling and blending middle distillates and lights ends such as diesel, jet fuel, gasoline and naphtha, as well as crude oil.
Furthermore, Equatorial Guinea has been accepted as a new member of the Organisation of the Petroleum Exporting Countries (OPEC). Equatorial Guinea said in January, it was seeking to become OPEC’s 14th member and the 6th from Africa. An addition that would help raise the continent’s influence and profile in global oil production and pricing.
The Nigerian Senate has passed the long-awaited Petroleum Industry Governance Bill which promises broad reformations of the country’s oil and gas industry. The objective of the petroleum bill is to introduce modifications that would create transparency, therefore making the oil & gas sector more business-oriented and profit driven. If the bill is signed by the president, restructuring in some organisations such as the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR) will occur and new organisations like the National Oil Company (NOC) and the National Petroleum Assets Management Commission (NPAMC) will be created. The NOC will be an integrated oil and gas company operating as a fully commercial entity and will run like a private company, while the NPAMC will be a single petroleum regulatory commission responsible for the industry’s health and safety regulations and working together with the Ministry of Environment on environmental issues such as the Ogoni clean-up programme.
On Thursday 25th of May, the Minister of State for Petroleum Resources Dr. Ibe Kachikwu said by 2019, Nigeria should be self-sufficient in terms of crude oil refining and no longer dependent on shipping out crude for processing and importing refined products. Keeping in mind the fact that the Dangote 650,000 barrels per day capacity refinery is being built, the Minister envisages that this self-sufficiency would be attained and surpassed. Kachikwu also said that Nigeria will join other oil-producing countries in the oil production cap if production bounces back to acceptable levels after the nine months extension. Meanwhile infrastructural rehabilitation and revamping are ongoing to meet the said target.
On Thursday 25th of May, the European trading oil prices were higher for the fifth consecutive week. U.S. crude futures fell by 3.8% to $49.41 at 1:08PM ET (17:08GMT), while Brent oil sank 3.54% to $52.05.The U.S. Energy Information Administration report for Wednesday 24th May showed a weekly decline in crude oil inventories for the seventh time in a row by 4.4 million barrels in the week ending May 19, whereas market analysts expected a decline of 2.4 million barrels.
After a lengthy discussion in a meeting held On Thursday 25th of May by OPEC/non-OPEC members, including Russia in Vienna, they agreed to extend output-cuts for another nine months with the expected supply target being met at the end of 2017. OPEC president and Saudi Arabia’s energy minister Khalid Al-Falih said the 9 months extension was made simply to “avoid the typical seasonal stock build”. Thus far, the previous production-cut agreement had little impact on global inventory levels as a result of the constant rise in U.S shale oil output.