Market Report: NNPC aims to increase growing target of nation’s reserve
In a meeting with the Nigerian Association of Petroleum Explorationist (NAPE), the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari said significant progress is being made in the ongoing exploration of inland basins, with a realistic and achievable target of growing the nation’s reserve to 40 billion barrels by 2023. NNPC is revving up exploration activities in all the frontier basins to achieve the 3 million barrels per day (bpd) crude oil production target.
Alhaji Kyari said NNPC will invest more efforts and resources in the search for hydrocarbons in the frontier basins and the ultra-deep-water basin in the Niger Delta to grow the nation’s reserve base. He also assured that NNPC, with the collaboration of other arms of the Federal Government, would create a favorable fiscal landscape that would encourage the inflow of foreign direct investment into the nation’s oil and gas industry.
On the commercial level, Alhaji Kyari said they would continue to meet its cash-call obligations to its joint venture partners on a sustainable basis, to enable the international oil companies to go back to exploration.
Speaking at an event organized by the Pipelines Professionals Association of Nigeria (PLAN), Alhaji Kyari disclosed that a total of 45,347 pipeline breaks on its downstream pipeline network was recorded between 2001 and half year 2019.
He maintained that it was difficult for the oil and gas industry to deliver much value to the economy without effective and efficient pipeline operations. Alhaji Kyari said: “As a major player in the oil and gas industry, NNPC operates over 5,000 kilometers of pipelines traversing many communities to link terminals, three refineries and 20 depots for efficient transportation of crude oil and refined products.
Additionally, NNPC has over 1,700 kilometers of natural gas pipelines to supply gas to power plants and gas-based industries, including deliveries to trans-national reception points.” Adding that these huge pipeline assets have become difficult to operate efficiently as a result of incessant activities of vandals, he stated that NNPC was ready to collaborate with PLAN and all stakeholders to respond aggressively to incidences of pipeline vandalism in the country to mitigate them.
The U.S. hydrocarbon exploration firm, VAALCO Energy announced that it will begin its drilling campaign in September 2019 as Gabon is working to increase its crude oil production by 50% by 2020/2021. The start of the drilling campaign follows a successful full-field maintenance shut down at four of VAALCO’s platforms in the Etame Marin license, which has since returned to its pre-shutdown production levels.
As well as the extension of VAALCO’s lease contract for the Petroleo Nautipa Floating, Production, Storage and Offloading vessel (FPSO) to September 2021. The FPSO can process 25,000 bpd from the Etame, Ebouri, Avouma, South Tchibala, North Tchibala and South-east Etame fields. The five-well drilling campaign will begin with the Etame 9P appraisal well and follow with the 9H development well from the Etame platform.
VAALCO estimates a net drilling budget of $20 – $25 million IN 2019 and $5 million to $10 million in 2020. Furthermore, VAALCO said it believes that the two appraisal wells may confirm up to up to “five million net barrels of 2P oil reserves spread across six well locations targeted in future drilling campaigns.” As part of its plans, it also expects to deliver the Vantage International Topaz jack-up drilling rig in September.
On Thursday 5th September, crude oil prices rallied more than 2 percent on strong U.S. crude drawdown numbers and optimism over the impending restart of U.S.-China trade talks, before settling almost flat on profit-taking. The U.S. West Texas Intermediate crude futures settled up 4 cents at $56.30 per barrel, while Brent closed up 25 cents at $60.95 per barrel.
The U.S. Energy Information Administration (EIA) in its weekly report showed a fall in crude inventories by 4.8 million barrels for the week ending Aug 30th. This was almost double the 2.5 million draw predicted by analysts.
Oil prices soared more than 2 percent after the EIA report, but prices gradually pared those gains as scepticism crept back over the prospect of a nearing trade deal between the world’s two top economies despite another round of talks being scheduled for October.
The prolonged trade dispute has been a dampener on oil prices, but Brent is still up about 12 percent this year, helped by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia.
Nonetheless, both OPEC and Russia boosted production in August, according to a Reuters survey and Russian energy ministry figures. Also putting downward pressure on prices has been mounting evidence of slowing economic growth worldwide, which has prompted analysts to lower forecasts for oil demand growth.