Market Report: NNPC to increase consumption of LPG
The Nigerian National Petroleum Corporation (NNPC) has expressed commitment to exponentially grow the local consumption of the Liquefied Petroleum Gas (LPG) popularly known as cooking gas, with improved supply program for the domestic market. Dr. Maikanti Baru, Group Managing Director of the NNPC stated that the corporation is determined to invest in making LPG available to Nigerians to discourage the current trend of using firewood and other unsafe means for cooking.
Dr. Baru listed some of the projects aimed at deepening LPG consumption in the country to include expansion of the NNPC LPG storage facility in Apapa from 4,000 metric tons to 8,000 metric tons; construction of pipelines to deliver LPG to plants in the hinterland and development of coastal supply facilities.
NNPC’s ongoing drive to increase Nigeria’s crude oil reserve was taken up a notch with the unveiling of multi-billion dollar investment opportunities in the nation’s deep offshore frontier. This was announced at the 10th World Energy Capital Assembly in London, United Kingdom.
Dr. Baru said: “globally Nigeria has the highest untapped deepwater resource of about 10 billion barrels of oil equivalent, in addition to other vast opportunities in the oil and gas value chain.” He further stated that Nigeria has the largest and one of the most vibrant economies in Africa with lots of potential, specifically in the gas, refining and infrastructure space. Dr. Baru explained that NNPC has a clear strategy for harnessing these potentials through collaboration and building robust partnerships as entrenched in the Corporation’s 12 Business Focus Areas being aggressively driven by the Leadership of the Corporation.
On Sunday, BW Offshore announced that its first cargo of oil was successfully offloaded from the BW Adolo FPSO located offshore Gabon. A total of 550,000 barrels of oil were transferred from the FPSO to a tanker which will transport the crude oil to a refinery. The BW Adolo FPSO is installed on the Tortue field, one of five proven discoveries in the Dussafu license.
The FPSO unit was prepared for deployment at Tortue by a Keppel shipyard in Singapore and officially named FPSO BW Adolo in early April 2018. It arrived in Gabon in late July and hook up of mooring systems and installation of risers and umbilicals were completed in September. After completing the hookup and installation, the BW Adolo achieved first oil from the Tortue field on September 16 this year.
The Dussafu license is operated by BW Energy Gabon (BWEG), which holds a 91.667 percent interest, while Panoro holds an 8.333 percent interest as a partner. BW Energy is a subsidiary of BW Offshore. The BW Adolo is a converted VLCC with an oil storage capacity of up to 1,350,000 barrels and a production capacity of up to 40,000 barrels oil per day (bpd). The vessel has undergone an increased life extension scope enabling an extended production profile on the back of positive reserve developments. BW in late November sanctioned the second phase of its Tortue development. The second phase entails drilling of four additional horizontal development wells, tied back to the FPSO with a budget of $275 million.
On Thursday, oil prices fell as energy traders weighed prospects for coordinated production cuts as a closely watched meeting of Organization of Petroleum Exporting Countries (OPEC) and its allies got underway in Vienna.
The U.S. West Texas Intermediate (WTI) futures were down $2.03 at $50.88 a barrel, while Brent Futures were down $2.40 at $59.15 a barrel. The U. S. Energy Information Energy report on Thursday showed a fall in U.S. crude inventories by 7.3 million barrel for the week ending November 30, confounding expectations for a drop of fewer than 1 million barrels.
Oil ministers from OPEC, Russia and other major producing countries met in Vienna on Thursday a meeting, which will continue through to Friday. During the meeting, OPEC will review its current production agreement.
OPEC officials have been making increasingly frequent public statements that OPEC and its partners would start withholding crude in 2019 to tighten supply and prop up prices. OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million bpd.
Qatar announced it will quit OPEC to focus on its gas potential. Doha is one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter with annual production of 77 million tonnes per year, based on its huge reserves in the Gulf. The Minister of State for Energy Affairs Saad al-Kaabi said: “We are not saying we are going to get out of the oil business…but Doha would focus on its gas potential because it was not practical to put efforts and resources and time in an organization that we are a very small player in and I don’t have a say in what happens.”
Qatar is attending the OPEC meeting in Vienna and will abide by its commitments. Qatar has been a member of OPEC for 57 years with oil output of just 600,000 bpd compared with Saudi Arabia’s 11 million bpd.