Market Report: Ghana to award nine new upstream oil blocks

The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Download the full report here. Learn more about Gladius Commodities at www.gladiuscommodities.com.

NIGERIA

The Nigerian National Petroleum Corporation (NNPC) announced that it is fine-tuning strategies to enhance its position as a fully integrated energy company, ready to prosper in the face of the development dynamics of the global oil and gas industry. Dr. Maikanti Baru, the Group Managing Director (GMD) of the NNPC disclosed this at the NNPC first quarter 2018 top management Steering Committee (SteerCo) meeting held at the NNPC Towers in Abuja. Speaking at the meeting, Mr. Henry Ikem Obih, the Chief Operating Officer, Downstream, said a lot of work has been done towards getting the NNPC on the same pedestal with its peers, and commended the commitment and resolve of the GMD to investing in NNPC’s downstream supply and distribution assets. Obih stated that the NNPC’s focus in the downstream sub-sector revolved around imbibing excellent culture, implementing best practices, focusing on cost reduction and improving efficiency.

Shell Petroleum Development Company of Nigeria Limited (SPDC) shut down production following the discovery of 4 leaks on its Trans-Ramos Pipeline in Delta State. The pipeline supplies crude oil to the Forcados export terminal and has a capacity of around 100,000 barrels per day (bpd). The cause of the leaks is yet to be determined and the SPDC is working on further site preparation and mobilization of specialized equipment to the swamps for safe excavation of the pipeline for inspection. There are concerns that following disruptions of the oil flows on the pipeline feeding the Trans-Forcados terminal in Nigeria, the facility faces more than two weeks of delays of oil cargo loadings, as no official June or July loading schedules have been released yet. Prior to the declaration of force majeure on Bonny Light exports, the nation’s crude shipments were already witnessing delays following a leak on the 200,000 to 240,000 bpd Trans-Forcados pipeline that shut down earlier this month, effectively cutting deliveries of Forcados crude, one of the nation’s largest crude grades. Baru has appealed to oil pipeline hackers to desist from such nefarious act, which according to him is not only harmful to the environment but also hazardous to the pipeline vandals and the economy.

GHANA

On Thursday May, 31 Paul McDade, Chief Executive Officer of Tullow Oil announced that Tullow is interested in new oil blocks off Ghana’s coast as part of the British explorer’s plans to consolidate its operations in the West African nation. Tullow is leading two operations offshore Ghana, including the country’s flagship 100,000 bpd Jubilee field, which began commercial production in late 2010. Ghana’s energy ministry announced it would award nine new upstream oil blocks for commercial exploration off its coast. Tullow has given up plans to reduce its stake in its Tweneboa, Enyenra, Ntomme (TEN) field, which came on stream two years ago, because the need for raising capital from the sale no longer exists.

Russia’s Rosneft has signed a preliminary 12-year liquefied natural gas (LNG) supply deal with Ghana National Petroleum Corp (GNPC). This move will see the delivery of natural gas to Ghana’s Tema port, thus meeting the energy demand of the West African nation. The agreement, which is subject to approval by the boards of directors of both parties, includes the supply of 1.7 million metric tonne per annum or 250 million standard cubic foot per day. The agreement was signed during the XXII St Petersburg International Economic Forum. Rosneft and GNPC also signed a framework cooperation agreement that envisages a joint study of high-priority directions of mutually beneficial cooperation in the development of West Africa’s oil and gas fields, oil and oil product supplies.

GLOBAL

On Thursday May, 31 oil prices settled more than 2 percent lower despite a massive draw in U.S. crude supplies as domestic output continued to expand. The US West Texas Intermediate crude futures was down 24 cents at $67.97 a barrel at 3:20 AM ET (07:20 GMT), while Brent crude futures fell by 49 cents at $77.33 a barrel.

The U.S Energy Information Administration weekly report for Thursday May, 31 showed a fall in crude oil inventories by 3.620 million barrels in the week ending May, 25 confounding expectations for a draw of 0.4 million barrels.

Oil prices in recent sessions had declined due to concerns that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members led by Russia would decide to lift output to help make up for any lost production from Venezuela and Iran. OPEC and some non-OPEC major oil producers are scheduled to meet in Vienna on June 22. OPEC in its most recent report stated that the production-cut agreement and falling output in Venezuela had helped slash excess global oil supplies to just above the five-year average.