Market Report: Petronas signs deal for offshore Gabon



The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Download the full report here. Learn more about Gladius Commodities at www.gladiuscommodities.com.

NIGERIA

The Nigerian National Petroleum Corporation (NNPC) has rallied international oil companies (IOCs) for investment in the multibillion dollars Nigeria-Morocco Gas Pipeline (NMGP) project. The Group Managing Director of the Corporation, Alhaji Mele Kyari at a stakeholders’ meeting maintained that the project would open new vistas for Nigeria’s gas aspirations.

The meeting involved NNPC, the Morocco National Office for Hydrocarbons & Mines (ONHYM) and executives of IOCs operating in Nigeria was a sequel to high-level discussions on the Pipeline Cooperation Agreement (PCA) for the NMGP project signed between both countries.

The PCA will facilitate the establishment of a gas pipeline to supply the product from Nigeria to Morocco and the West African sub-region and further into Europe. At the moment, both countries are planning to extend the West African Gas Pipeline (WAGP) that has been pumping gas from Nigeria to Benin, Togo, and Ghana since 2010 to Morocco.

Alhaji Kyari described the project as strategic for the country which will provide more gas for domestic consumption, improve power supply and gas to industry, adding that the project would provide a market for Nigerian gas.

He informed the Management of the Nigerian Liquefied Natural Gas (NLNG) to consider the October Train-7 Final Investment Decision (FID) on the project as a done deal, and begin to focus on what else can be done beyond Train-7 to expand NLNG operations. 

The eight million-tons per annum (MTPA) Train-7 project is designed to expand the company’s production capacity from the current 22 MTPA to 30 MTPA.

Alhaji Kyari assured of the unflinching commitment of the federal government and the NNPC management in the future expansion drive of NLNG. 

He said all obstacles that could impede the actualization of the Train-7 FID project should be promptly identified and removed ahead of the October 2019 timeline.

GABON

Malaysia’s state-owned oil company, Petronas has signed an agreement with Gabon for two exploration permits after Gabon enacted a new oil law in July.

Petronas already has a presence in Gabon and is the first company to sign an exploration and production contract in the country in five years. The deal follows the enactment of a revised hydrocarbons code in July, made with the support of the International Monetary Fund (IMF).

Gabon recently put 35 oil blocks for sale and the country sees potential in offshore output, despite a slump in production. The deal with Petronas is for offshore blocks F12 and F13. Once developed, the blocks will have a production of 200,000 barrels per day (bpd).

GLOBAL

On Thursday, August 8, oil prices rebounded from seven-month lows as Saudi Arabia reportedly acted to halt a steep decline in prices. The West Texas Intermediate crude futures gained 89 cents at $51.98 a barrel at 7:24 AM ET (11:24 GMT), while Brent crude futures rose 63 cents to trade at $56.86.

The Energy Information Administration in its weekly report showed a rise in crude inventory by 2.39 million in the week ending August 2, compared to forecasts for a stockpile draw of 2.85 million barrels, after a decline of 8.5 million barrels in the previous week.

Oil prices were supported today by reports of possible producer actions to prop up oil markets. A report from Bloomberg said an unnamed official from Saudi Arabia said the world’s top exporter contacted other producers and is in talks to halt the slide in prices.

Elsewhere, Reuters reported that China continued to import oil from Iran in July, the second month since the U.S. tightened sanctions against the Islamic Republic.

It cited estimates from tanker-tracking analysts suggesting that imports could have averaged anywhere between 142,000 and 360,000 bpd. The recent decline in prices back to January lows also brought up the question of how the U.S. shale output could be affected.