Market Report: NNPC remains the leading supplier of gas
Dr. Maikanti Baru, the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) at the official opening of the 2019 Nigeria Oil and Gas conference in Abuja listed out over $8billion worth of deals currently being handled and pursued by the NNPC since the beginning of 2019.
He stated that NNPC was involved in financing deals and had signed Memorandum of Understanding (MoU) worth several billions of dollars among which included, NNPC/SPDC Santolina III Project, NNPC/MPN Satellite Field Development II Project, third-party financing for the NNPC/NAOC (Nigeria Agip Oil Company) Okpai II Independent Power Plant project, NNPC/TEPNG (Total Exploration and Production Nigeria) Ikike development project.
Dr. Baru said the corporation had successfully initiated the MoU framework agreement between NNPC and the Nigeria Liquified Natural Gas company for the provision of about $2.5 billion funding for NNPC’s portion of cash call payable on upstream gas supply projects for SPDC, TEPNG and NAOC JVs.
He added that NNPC had also initiated negotiations for the Financing and Technical Services Agreements for identified Nigeria Petroleum Development Company assets – OMLs 13, 65 and 111, third-party financing for the Ajaokuta-Kaduna-Kano Gas Pipeline Project, further exploratory activities and seismic data acquisition, processing, and interpretation to the drilling of the Kolmani River-2 well in the Benue Trough.
On the gas side, Dr. Baru said Nigeria had the 9th largest gas reserves in the world with gas reserves of 201 trillion cubic feet and upside potential of about of 600Tcf. He also disclosed that the NNPC remains the leading supplier of gas to the nation’s power sector and attributed the feat to the effective management strategy adopted by the current leadership of the corporation, adding that the NNPC was on the part of sustainable growth with a number of critical projects that would impact the industry value chain.
Dr.Baru expressed satisfaction at the level of achievements recorded through the 12 Business Focus Areas (BUFA), a strategy guide adopted by NNPC management under his watch, noting that the expected results of today’s effort would surpass current milestones.
Alhaji Mele Kyari, the incoming GMD of NNPC has hailed the leadership of the Organization of the Petroleum Exporting Countries (OPEC), for the nine-month extension in oil production cut under the “Declaration of Cooperation’’ which seeks to improve global oil market stability among OPEC members.
Oil industry under the cooperation, OPEC member and non-member nations accelerated the stabilization of global oil market through voluntary production adjustments which amounted to 1.8 million barrels per day (bpd).
Speaking at the OPEC meeting in Vienna, Kyari noted that pricing and volume of products remained key factors in ensuring sustainable revenue generation for Nigeria, further expressing the commitment of the NNPC in revamping refineries.
The Ghanaian government has awarded Eni and its partner Vitol rights to explore Block WB03 which is located in the medium deep waters of the prolific Tano Basin. The block is located about 50km south-east from the FPSO John Agyekum Kufuor (JAK) which is producing oil and gas from Sankofa Field at present.
This development will allow Eni to further consolidate its presence in Ghana. Eni will serve as the operator of the license with a 70 percent stake, while Vitol will own the remaining 30 percent stake. The joint venture will also include the Ghana National Petroleum Corporation (GNPC) and a locally registered company that will be identified at the time of finalizing the contract, which is subject to approval from the authorities.
The latest award comes as an outcome of Ghana’s first international competitive bid round. In this round, five Blocks have been put on offer in water depths ranging from 100m to 4,400m. Eni owns rights to the development areas of Sankofa and Gye Nyame and also to the exploration and production area of CTP-Block 4 in Ghana’s Tano Basin.
On Thursday 4th July, oil prices fell as demand worries continued to exert downward pressure on the sector. Trading was expected to be thin due to the Fourth of July holiday in the U.S.
West Texas Intermediate crude oil futures fell 33 cents to $57.01 at 7:28 AM ET (11:28 GMT), while Brent oil traded down 9 cents at $62.73.
The U.S. Energy Information Administration weekly report showed a fall in crude inventories by 1.1. million barrels in the week ending June 28, below expectations of a draw of about 2.96 million barrels, casting doubt on demand despite it being in the middle of the U.S. driving season.
Earlier this week, OPEC and its allies agreed to extend production cuts until March 2020. The news has had little impact on prices as markets fell this week amid fears of slowing oil-demand growth resulting from uncertainties surrounding the Sino-U.S. trade development.