NIGERIA
The Federal Government has intensified efforts to ensure that Nigeria achieves self-sufficiency in the domestic production and utilization of its gas resources by the first quarter of 2021, according to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari. Alhaji Kyari explained that Nigeria’s aggressive development of its gas resources will begin to pay-off soon. Consumers of the liquefied petroleum gas (LPG) would have more domestic supply as the Nigeria Liquefied Natural Gas (NLNG) Limited has started the supply of 450,000 metric tons (MT) in 2021.
In 2007, the total consumption of LPG in Nigeria was about 50,000MT, but today, it is about one million metric tons and NLNG’s contribution is 350,000MT which will increase to 450,000MT. The NNPC is seeking a $1 billion oil prepayment deal to revamp its Port Harcourt Refinery. The Minister of State for Petroleum Resources H.E. Timipre Sylva, said that the refinery rehabilitation exercise across the country was in its final stages and had in December 2020 opened bids for Engineering, Procurement, and Construction (EPC) contracts for the rehabilitation. Upon completion, repayment will be through crude and products delivery from the refinery over seven years. The African Export-Import Bank is said to be leading the financing.
Also read: Market Report: Nigeria rolls out National Gas Expansion Program
SENEGAL
SOFEC Inc announced that the first steel was cut for the turret mooring system for the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) Joint Venture Floating Production Storage and Offloading (FPSO) External Turret Mooring System Project destined for the Sangomar Field Development, located offshore Senegal. MODEC, SOFEC’s parent company will supply the FPSO under an FPSO Purchase Contract with Woodside Energy (Senegal) B.V., Operator of the RSSD Joint Venture. The FPSO will be deployed approximately 100 kilometers south of Dakar, Senegal, and will be Senegal’s first offshore oil development. The FPSO is scheduled for delivery to support first oil production in 2023 and will be moored in approximately 780 meters water depth. SOFEC is responsible for all EPC activities related to the External Turret Mooring System and its ancillary components. SOFEC will assist in turret integration and associated offshore hook-up and commissioning activities planned for 2023.
GABON
Total revealed that its 58% owned affiliate Total Gabon has signed an agreement with Perenco to divest its interests in several assets for up to $350 million. The deal includes stakes in seven mature non-operated offshore fields, including the operatorship of the Cap Lopez oil terminal. The price to be paid by Perenco for the assets will be between $290 million and $350 million, depending on future Brent oil prices.
The transaction remains subject to approval by the Gabonese authorities. Total revealed that production divested by Total Gabon as part of the deal amounted to approximately 8,000 barrels of oil per day (bpd) in 2019. Total has been operating in Gabon for more than 90 years and is a major player in the country’s upstream and downstream businesses.
GLOBAL
On December 7, 2020 crude oil prices rose as a bigger-than-expected drop in U.S. crude stockpiles and Saudi Arabia’s pledge to cut output overshadowed a rampant virus and violent protests in Washington. The U.S. West Texas Intermediate crude futures were up 0.7% at $50.98, while Brent crude futures were up 0.4% at $54.65 at 11:25 AM ET (16:25 GMT), closing in on an 11-month high.
The U.S. Energy Information Administration’s weekly report for January 6, 2021 showed a draw of 8,010 million barrels for the week ending January 1, 2021 against analysts’ forecast of a 2,133-million-barrel draw and the 6,065-million-barrel draw for the previous week.
Oil prices have been supported by a pledge by Saudi Arabia, the world’s biggest oil exporter, to voluntarily cut output by an additional 1 million barrels per day (bpd) in February and March. Analysts noted that this step would be enough to put the physical market back into deficit in the first quarter of 2021 when many had started to expect surpluses due to a fresh shortfall in demand arising from COVID-19-stricken economies in Europe and elsewhere.
Russian Deputy Prime Minister Alexander Novak said volatility in the oil market in 2021 will decrease and oil demand will grow by 3-5 million bpd. However, it will not reach the pre-crisis level, which was higher by 6-7 million bpd against 2020 levels. Meanwhile, the emergence of new strains of coronavirus is a factor of uncertainty for the oil market, since it is not yet clear how the situation will develop. Market volatility has slowed down, but production recovery will take some time, Novak added. Earlier, the OPEC+ countries agreed on the oil cuts parameters in February and March, which will amount to 7.125 million bpd. Now the countries of the alliance are cutting production by 7.2 million bpd against the base level. This increase in production will be offset by proportional and voluntary production cuts by Saudi Arabia.
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.
