Market report: New Group Managing Director for NNPC

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NIGERIA

On Monday 9th July, Alhaji Mele Kolo Kyari, the new Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) assumed office setting targets that included fixing all the country’s refineries before 2023.

Alhaji Kyari said the corporation under his watch would focus on delivering the expectations of every Nigerian in terms of availability of petroleum products, also promising to run the national oil firm in the most transparent and corrupt-free manner. Alhaji Kyari said having the four refineries functional by 2023 combined with the Dangote refinery running as well as other refining initiatives will enable Nigeria to become a net exporter of petroleum products.

MAURITANIA/SENEGAL

Kosmos Energy announced that the Greater Tortue Ahmeyim-1 well (GTA-1), drilled on the eastern anticline within the unit development area of Greater Tortue, has encountered approximately 30 meters of net gas pay in high-quality Albian reservoir. The Greater Tortue Ahmeyim LNG project is on track to deliver first gas in the first half of 2022, and the well (which has been designed as a future producer) will be used to further optimize the development drilling plans for the BP-operated project.

Commenting on the results of the GTA-1 well, Chairman and Chief Executive Officer Andrew G. Inglis said: “The GTA-1 well confirms our expectation that the gas resource at Greater Tortue Ahmeyim will continue to grow over time and could lead to further expansion of this world-scale 10 MTPA LNG project.

In addition, Kosmos’ process to sell down its interest to 10 percent has received considerable interest from the industry, with initial bids expected over the summer, and transaction conclusion anticipated by year-end.” Located offshore Senegal the GTA-1 well was drilled in approximately 2,500 meters of water, approximately 10 kilometers inboard of the Guembeul-1A and Tortue-1 wells, to a total depth of 4,884 meters.

The Ensco DS-12 rig, working on behalf of the operator BP, will now drill the Yakaar-2 appraisal well in Senegal, which is expected to spud in the coming weeks, before drilling the Orca-1 exploration well in Mauritania, which is expected to spud late in the third quarter. The partners on the cross-border Greater Tortue Ahmeyim project, located offshore Mauritania and Senegal, include SMPHM, Petrosen, BP, and Kosmos.

GLOBAL

On Thursday 11th July, oil prices held at a seven-week high as storm worries in the Gulf of Mexico and heightened tensions in the Middle East outweighed OPEC’s forecast for a large crude surplus in 2020 as U.S. shale production continues to surge.

The U.S. West Texas Intermediate crude futures gained 16 cents at $60.59 a barrel at 7:40 AM ET (11:40 GMT), while Brent crude futures traded up 18 cents at $67.19. The US Energy Information Administration (EIA) in its weekly report stated that US crude inventories fell by 9.5 million barrels in the week ending to July 5th, significantly more than the 3.1-million-barrel decline analysts had expected.
Oil prices were supported by preparations to evacuate fifteen production platforms and four rigs in the north-central Gulf of Mexico as a result of weather forecasts for a tropical storm.

Also, in OPEC’s latest monthly report released Thursday 11th July, forecast for global oil demand is expected to rise by 1.14 million barrels per day (bpd) by 2020, matching the projection for 2019; but it raised its forecast for non-OPEC supply growth to accelerate from 2.05 million bpd to 2.44 million bpd in 2020. “U.S. tight crude production is anticipated to continue to grow as new pipelines will allow more Permian crude to flow to the U.S. Gulf coast export hub.

More than 2.5 million bpd of new pipeline capacity in the Permian is expected to become operational by July 2020,” the report said, casting light on escalating output in U.S. shale production. Also supporting prices, Iran reportedly attempted to seize a British oil tanker in the Persian Gulf and tensions have been high in the Middle East after attacks on tankers and the downing of a U.S. drone by Iran last month.