Market Report: Libyan crude oil output exceeds 1 million bpd

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Nigeria

On 13 August the Nigerian National Petroleum Corporation (NNPC) and Seplat Petroleum Development Company signed five agreements to expedite the development of the Assa North and Ohaji South (ANOH) gas development scheme.

The project is aimed at delivering about 3.4 billion standard cubic feet of gas per day (scf/d) and is one of the 7 Critical Gas Development Projects which is expected to boost gas production, infrastructure development and to bridge the projected medium-term gas supply gap by 2020.
Dr. Maikanti Baru, the Group Managing Director of the NNPC explained that a special purpose vehicle known as ANOH Gas Processing Company (AGPC) was being promoted by the Corporation and Seplat to develop, build, operate and maintain the ANOH Gas Processing Plant, with an initial capacity of 300 million scf/d. Baru urged the AGPC to work hard and deliver the project on schedule, within budget and to specification, stressing that it was designed as world-class gas processing plant with the capacity to deliver between 3 to 3.4 billion scf/d.

On Tuesday, Baru disclosed that the NNPC plans to establish a 100,000 barrel per day (bpd) Brownfield refinery at its Port 
 Harcourt and Warri sites in collaboration with private sector investors. This plan is part of the refinery collocation initiative designed to boost local refining capacity to end the era of petroleum product importation. A group of investors has commenced the process of 
relocating a refinery once owned by BP from Turkey to Nigeria.

Senegal

On 13 August, Malaysian oil and gas company Petroliam Nasional (Petronas) said it had acquired a 30 percent stake in Senegal’s Rufisque Offshore Profond block, its first project in the West African nation. Petronas subsidiary, PC Senegal Ltd signed a farm-in agreement with Total E&P Senegal SAS, a subsidiary of Total, to acquire this block. The Rufisque Offshore Profond block is located next to recent oil and gas discoveries in the St Louis Profond, Cayar Profond and Rusfique Sangomar OffShore Deep blocks. It spans 10,357 km2 (3,999 sq. miles) and has a water depth of 100m to 3,000 m (328 to 9,842 ft).

Total will maintain operation of the block with a 60 percent ownership, while Societe Nationale des Petroles du Senegal (Petrosen) will hold the remaining 10 percent. Petronas said once the interpretation of three-dimensional seismic data is completed, with prospects identified and evaluated, exploration drilling activities will commence in the Rufisque Offshore Profond block in 2019.

Petronas said taking the stake is part of an upstream strategy “to grow its exploration portfolio in West Africa” where it presently operates an ultra-deepwater block off Gabon, with plans to extend exploration in the region.

Global

Oil traded slightly higher on 16 August , but concerns about waning demand kept a lid on gains. The U.S. West Texas 
Intermediate crude futures for September delivery gained 35 cents at $65.36 a barrel by 11:42 AM ET (15:42 GMT), while Brent crude 
 futures for October delivery rose 32 cents at $71.08. The U.S. Energy Information Administration weekly report showed a rise in crude inventories by 6.805 million barrels for the week ending August 10, confounding expectations for a draw of 2.449 million barrels. The report also showed a rise in imports by about 1.341 million bpd, while exports fell by 2.58 million bpd.

Crude has been under pressure as trade tensions have spurred worries of negative impact to the global economy, reducing demand for oil. According to Reuters, Chinese oil importers have not loaded crude oil from the U.S. since the start of August, compared with 300,000 bpd in June and July. Beijing said delegates will be sent for trade talks with the U.S. to attempt to alleviate tensions between the two countries.

Also, Libya’s crude oil production has exceeded 1 million bpd for the first time since June 2018, after port blockades and a kidnap incident triggered production outages 670,000 bpd before. OPEC monthly report for August intensified fears of slowing oil demand growth as the cartel forecast lower demand amid increased non-OPEC supply. Global oil demand growth for 2019 was lowered by 20,000 bpd to 1.4 million bpd, while non-OPEC oil supply for 2019 was revised up by 30,000 bpd to 2.13 million bpd.