Market Report: Nigeria increases daily crude production

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NIGERIA

Dr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), disclosed that the nation had maintained a line of consistent year-on-year improvement in its daily crude oil production.

Nigeria’s daily crude oil production increased by about 2.09 million barrels in 2018, a 9 percent increase compared with the 2017 average daily production of 1.86 million barrels.

Dr. Baru stated the Nigerian Petroleum Development Company (NPDC), Nigerian Gas Company, Petroleum Products Marketing Company, Duke Oil, NIDAS and Integrated Data Services were among the companies that boosted the corporation’s performance in 2018.

He singled out NPDC, the corporation’s upstream company, as the major contributor to the industry’s success story in 2018, expressing enthusiasm on the 52 percent daily crude oil production growth by the company when compared with its 2017 performance.

Total S.A. reported that it has started production from the Deepwater Egina Field, located approximately 150 miles offshore Nigeria. According to Total, at plateau Egina will produce 200,000 barrels of oil per day (bpd), equivalent to approximately 10 percent of Nigeria’s production.

Total also stated that it achieved start-up at nearly 10% below the initial budget. It attributes the $1 billion-plus in capital expenditure savings primarily to excellent drilling performance that cut drilling time per well by 30 percent.

First discovered in 2003, Egina is the second development in production in the Oil
Mining Lease (OML) 130. Akpo, the first field developed in OML 130, began production in 2009. Total Upstream Nigeria Limited operates OML 130 and owns a 24 percent interest in the block in a partnership with NNPC.

Other stakeholders include South Atlantic Petroleum – SAPETRO Ltd. (15 percent), CNOOC E&P Nigeria Limited (45 percent) and Petrobras Oil and Gas BV (16 percent)

EQUATORIAL GUINEA

Ophir Energy announced that it is currently awaiting a response from the Equatorial Guinea Ministry of Mines and Hydrocarbons over a request for an extension of the Block R licence.

The licence covers the oil and gas company’s Fortuna floating natural gas development in the country and is due to expire at the end of 2018. Ophir expects to receive further communication from the Ministry in January 2019 concerning the block, and the company is
continuing to look for potential investors for the development.

GLOBAL

On Thursday, oil prices fell slightly amid volatile currency and stock markets, coupled with concerns that an economic slowdown in 2019 will curb fuel demand just as crude supplies are surging.

The U.S. West Texas Intermediate crude futures fell 44c at $44.97 a barrel by 11:11 AM ET (16:11 GMT), while Brent crude futures inched back one cent at $54.92, after having declined as far as $53.95.

The Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia, alongside other producers led by Russia, agreed in 2018 to rein in supplies starting from January 2019 after oil tumbled from above $86 on worries about surging output.

In physical oil markets, Riyadh is expected to cut February prices for heavier crude grades
sold to Asia by up to 50 cents a barrel due to weaker fuel oil margins.

More broadly, oil markets have been sliding, with rising production from top producers, the U.S. and Russia.

Supply from Iraq, the second biggest producer in OPEC, also climbed, with December exports at 3.73 million bpd versus 3.37 million bpd in November.