Market Report: Nigeria Hunts for Oil in Sokoto Basin
On Wednesday 20th September, the Nigerian National Petroleum Corporation (NNPC) extended its search for crude oil to the Sokoto inland sedimentary basin. This was announced by the NNPC Group Managing Director, Dr. Maikanti Baru, after a visit in Abuja by delegates from Sokoto State led by the Governor, Aminu Tambuwal who appealed to Baru to commence oil and gas exploration to determine the volume and value of hydrocarbon deposits present in the Sokoto basin. Baru revealed that the NNPC had already procured aeromagnetic data on the Sokoto basin from the Nigerian Geophysical Survey and had awarded a contract for the mapping and procurement of apt samples to further the understanding of the area. Baru also added that the NNPC had contracted its subsidiary, Integrated Data Services Limited to carry out various geochemistry investigations to boost the gathering and integration of all relevant data ahead of the planned procurement of seismic 2D data position which will, in turn, determine various prospects. Tambuwal invited the NNPC to a conference in Sokoto to be held sometime in October 2017 that would thoroughly narrow down the search for oil in the Sokoto basin. Baru pledged to attend the conference and said the Corporation would use the platform to update and also share its knowledge of the basin with relevant stakeholders.
The Nigeria Liquefied Natural Gas Limited (NLNG) has signed an agreement with GE (General Electric) company, Baker Hughes (BHGE) for the provision of Asset Performance Management (APM) software and services for LNG trains and related Balance of Plant (BoP). APM is a GE enterprise software solution that leverages sensors, connectivity, data and analytics to improve the reliability and availability of customers’ assets, minimizing total cost of ownership. It also enables intelligent asset strategies to help optimize performance to make operations safer by helping to predict and prevent failures, thereby mitigating risk and increasing overall efficiency. BHGE was asked to develop a solution to enhance the performance of LNG trains at its gas liquefaction plant in Bonny Island, Nigeria. BHGE developed an outcome-based solution with a digital trip reduction program using the APM software and has committed to a reduction of 20 percent of trips on the LNG trains and related BoP within three years. This deal marks the fir st APM solution sold and executed both in the LNG market and in Sub-Saharan Africa by BHGE.
Equatorial Guinea’s Ministry of Mines and Hydrocarbons signed a Memorandum of Understanding (MOU) with the Burkina Faso Government to supply LNG and build critical infrastructure to import, store and transport gas. The three-year agreement compels both sides to negotiate and sign an LNG Sales and Purchase agreement and a Terminal Use Agreement that will be the basis for their first LNG exchange. The MOU also calls for Equatorial Guinea to explore and produce oil and gas in Burkina Faso.The Minister of Mines and Hydrocarbons of Equatorial Guinea, Mr. Gabriel Mbaga Obiang Lima, said “We are very pleased to strike this agreement and be given the opportunity to supply our African brothers in Burkina Faso with crucial gas resources. This collaboration with Burkina Faso, part of our LNG 2 Africa initiative, highlights the important responsibility of African countries to cooperate in the energy sector and build the necessary infrastructure to strengthen our economies.” As part of the agreement, both sides will commission a technical study, work together to construct a regasification and storage terminal in Burkina Faso and transport infrastructure, either by pipeline or LNG carrier.
On Thursday 21st September, oil prices dropped as traders finally reacted to the previous session’s downbeat U.S. stockpiles data and as investors cashed in on gains of more than 1%. The U.S. West Texas Intermediate crude for October contract was down 30 cents at $50.39 a barrel at 06:35 a.m. ET (10:35 GMT), while the ICE Futures Exchange in London Brent oil for November delivery gained 19 cents at $56.79 a barrel. The U.S. Energy Information Administration (EIA) weekly report for Wednesday 20th September showed a rise in crude oil inventories by 4.591 million barrels and gasoline stockpile fell by 2.125 million barrels in the week ending September 15. This was the third consecutive week crude inventories increased in the U.S., as heavy flooding due to storm Harvey knocked out nearly quarter of the nation’s refining capacity. Investors looked ahead to a meeting of oil producers that could extend production limits aimed at clearing a glut that has depressed the market for more than three years. Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers will meet in Vienna on Friday 22nd September to consider extending output cuts.