Market Report: NNPC to provide support to the agriculture industry
The Nigerian National Petroleum Corporation (NNPC) said that it would support the ongoing initiative by the Federal Government to diversify the nation’s economy through agriculture by providing support for the attainment of a mutually beneficial relationship between agriculture and other industries.
Speaking at the NNPC Special Day at the 40th Kaduna International Trade Fair, the Group Managing Director, Dr. Maikanti Baru, said the NNPC would continue to provide the enablers for the actualization of Nigeria’s massive agricultural potential, in line with the aspirations of President Muhammadu Buhari.
Dr. Baru listed some of the achievements of the NNPC, including the provision of gas to power industries as captured in the 614km Ajaokuta-Abuja-Kaduna-Kano Pipeline (AKK) Project, which is conceived as an integral part of the Trans Nigeria Gas Project.
He said on completion, the AKK would deliver gas to the Abuja, Kaduna and Kano Power Plants to power factories in the North and the National Grid. He added that in order to bridge the medium-term domestic gas supply deficit by 2020, seven Critical Gas Development Projects (7CGDPs) had also been identified.
The desired outcome of this initiative would boost domestic gas supply from about 1.5bscf/d to 5bscf/d with a corresponding 500 percent increase in power generation to buoy capacity utilization of industries. Dr. Baru remarked that the 7CGDPs were at different stages of development with Assa North-Ohaji South (ANOH) project ahead of others. He stated that the Front End Engineering Design (FEED) for facilities and pipelines for ANOH had been completed with the Final Investment Decision (FID) for the project taken in December 2018. Dr. Baru explained that NNPC had executed Memorandum of Understanding for the development of fuel-ethanol processing plants with several State Governments in the Country, among which are Kogi, Yobe and Ondo.
The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, has challenged exploration and production companies in Nigeria to strive to raise daily crude oil production to seven million barrels per day (bpd) from 2.1 million bpd currently produced. Dr. Kachikwu urged all stakeholders in the petroleum industry to put all-hands- on-deck to actualize this aspiration. He encouraged Nigerian operators to move into other African countries and use Nigeria’s 60 years’ experience in the sector to lead the operations of their fields. On government’s support for modular refineries as a strategy for ending crude oil theft, vandalism and environmental degradation, Dr. Kachikwu said the Ministry of Petroleum would develop a policy that would encourage persons living in oil producing communities to form cooperatives, with which they can set up and own modular refineries.
On April 9, BP awarded KBR UK, the British arm of Houston engineering and construction company, the Pre-FEED Services contract for Phases 2 and 3 of BP’s Greater Tortue Ahmeyim project, offshore Senegal and Mauritania. The Phases 2 and 3 entail the further development of the Tortue field beyond Phase 1 of the development located in the C-8 block off the shore of Mauritania and the Saint-Louis Profond block offshore Senegal. Known in the oil and natural gas industry as a Pre-FEED contract, KBR will design offshore platforms and underwater pipelines to expand natural gas production that will be delivered to an offshore liquefied natural gas plant that BP plans to develop nearby. KBR said that the two phases of the Greater Tortue Ahmeyim project would significantly expand capacity to deliver additional gas from an ultra-deep-water subsea system, tied back to mid-water gas processing platforms. The gas will then be transferred to pre-treatment and offshore LNG facilities located at the established Phase 1 hub.
On April 11, oil prices traded lower pulling back from five-month highs, as the International Energy Agency’s (IEA) monthly report shifted attention from recent supply-side issues to the uncertainty surrounding demand. The U.S. West Texas Intermediate crude futures fell 7 cents at $63.87 a barrel at 10:59 AM ET (14:59 GMT), while Brent crude futures traded down 40 cents at $71.33. The U.S. Energy Information Administration weekly report for Wednesday, April 10 showed a rise in crude inventories by 7.03 million barrels in the week ending April 5, compared with forecasts for a stockpile draw of 2.3 million barrels.
The IEA also in its report recognized that a surge in production seen in the second half of 2018 had finally turned around thanks to OPEC- led production curbs and U.S. sanctions on Iran and Venezuela. The cuts in output have served to tighten markets, sending West Texas Intermediate up around 40 percent to date. The IEA highlighted that demand was a very important piece of the puzzle for oil market rebalancing, but uncertainty over the global economy was too intense to allow for a change to its forecasts. In its report, the IEA stated, “As far as 2019 is concerned, amongs the analyst community there is an extraordinarily wide divergence of view as to how strong growth will be. We maintain our forecast of 1.4 million barrels per day, but accept that there are mixed signals about the health of the global economy, and differing views about the likely level of oil prices.”