Market Report: Total SA pulls out of Democratic Republic of Congo
On Tuesday 28th May, the Nigerian National Petroleum Corporation (NNPC) said the selection process for off-takers for the sales and purchase of Natural Gas Liquids (NGLs) resources will be transparent. About 223 companies both indigenous and international firms applied to bid for 2019-2021 sale and purchase contracts to off-take NGLs.
The Group Managing Director, Dr Maikanti Baru, gave the assurance at the 2019 Natural Gas Liquids Bid opening saying “As a corporation, our current pursuit is to continuously grow our domestic gas supply and utilisation while maximizing value from our unutilised condensate and natural gas liquid resources.
Our strategic focus in the coming months is to expand domestic Liquefied Natural Gas (LPG) supply from our established local sources while also encouraging investments in storage, marketing and distribution infrastructure.
Through a transparent competitive bidding and evaluation process, we intend to enlist companies with proven investments in Gas utilization, storage, distribution and marketing infrastructure.” Dr Baru noted that this is the beginning of another landmark event in the bid to maximize the value of the nation’s NGL resources for the benefit of Nigerians and other stakeholders. Dr Baru said the only way to boost consumption is to first make the product available.
Therefore, the corporation is not only focused on lifting and sending it out but also determined on maximizing value in-country and growing the LPG market to the level it deserves.
Dr Baru also vowed to sustain transparency in all processes, and select the best off-takers through a robust mix of big international players with strong Nigerian gas sector-focused companies to ensure supply reliability and local capacity development. Dr Baru noted that there is a need to stimulate investments in gas storage, marketing and distribution.
THE DEMOCRATIC REPUBLIC OF CONGO
Total SA, the only oil major exploring for crude in the Democratic Republic of Congo, indicated it’s pulling out of a block in the central African nation. Total has been searching for oil in Block 3 in eastern Congo since March 2011.
Its license for the field, near the border with Uganda, initially expired in January 2016 and has been extended several times. Efora Energy Ltd., Divine Inspiration Group Ltd. and the Congolese government are partners in the block.
The area may contain as much as 1.2 billion recoverable barrels of oil, according to Efora’s estimates. However, Total has indicated that it will no longer continue as part of the consortium to further explore the concession. Efora said in a statement announcing the license that expired in January has been extended until July.
Interim Congolese Hydrocarbons Minister John Kwet’s chief of staff, Tony Chermani, said that Total hasn’t officially notified the government of any decision to withdraw from the block, but confirmed the extension of the permit. Efora and its remaining partners plan to use the extension of the license period to carry out a review of the technical data to determine the area that will be the subject of the renewal of the license in July 2019.
Total has a controlling stake in another, more advanced oil-exploration project on the Ugandan side of the Congolese border, in partnership with China’s CNOOC Ltd. and London-based Tullow Oil Plc. Uganda plans to start exporting crude in 2022
On Thursday 30th May, oil prices tumbled 4 percent after the U.S. government’s weekly dataset showed a smaller-than-expected crude drawdown as America’s peak summer driving season got underway.
The U.S. Crude Oil WTI Futures rose 0.6% to $59.16 at 12:24 AM ET (04:24 GMT), while Brent futures gained 0.3 percent to trade at $68.05. The U.S. Energy Information Administration in its weekly report showed a fall in crude inventories by 0.28 million barrels in the week ending May 24, compared to forecasts for a stockpile draw of 0.86 million barrels, after a build of 4.74 million barrels in the previous week. Oil has been under pressure as trade tensions between the U.S. and China escalate.
The ongoing conflict between the world’s two largest economies runs the risk of derailing global growth, implying a negative impact on demand for crude. Contrasting a slowdown in demand, supply is tightening thanks to the OPEC-led production cuts, U.S. sanctions on Iran and Venezuela.
Many analysts also expect OPEC-led supply cuts to be extended until the end of 2019 as the group wants to prevent oil prices from falling back to levels seen in late 2018 when Brent slumped to $50 per barrel. Since OPEC and its allies started withholding supply in January, oil prices have risen by about 30 percent.