Market Report: Trident Energy to drill three wells in Block G in Equatorial Guinea in 2021
The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. The full report is here.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari stated that the federal government has intensified efforts to ensure self-sufficiency in the domestic production and utilization of its gas resources by Q1 2021.
NNPC is focusing on third party financing of oil and gas development projects in the country and some projects critical to the delivery of gas hitherto delayed are now being completed.
Alhaji Kyari said the corporation and the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) together with other relevant government institutions need to work together to boost revenues and tackle challenges facing the nation’s oil and gas industry.
He noted that the recent successes recorded by NNPC were because of the trust and confidence reposed on the corporation’s current management by the federal government, stressing that the corporation hit 2.49 million barrels of crude oil per day (bpd) production level in April 2020, a feat which has not been achieved in the last 10 years.
Elias Mbam, the RMAFC chairman commended the Mele Kyari-led NNPC for its openness and sustained progress towards accountability and meeting its obligations to the federation, despite the challenges posed by the Covid-19 pandemic. He said both organizations need to share information, look at challenges and provide solutions that would enable the oil and gas sector to yield more revenue to the federation account.
Alhaji Kyari noted while giving assurances that by mid-February 2021 that there will be sufficient gas for domestic consumption with the completion of some gas infrastructure, living enough stock for buyers.
The Minister of State for Petroleum Resources, Chief Timipre Sylva said the Federal Government had declared Jan. 1, 2021, to Dec. 31, 2030, as “The Decade of Gas Development for Nigeria”. However, he acknowledged that Nigeria still had more work to do post-2020.
Chief Sylva said the development of Nigeria’s vast gas resources and strengthening the gas value chain is the Federal Government’s national priority as encapsulated in the National Gas Policy of 2017. He stated that the government had demonstrated its commitment towards the objective through policies and projects like the National Gas Expansion Programme, Autogas policy, and the construction of the 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline.
Additionally, Chief Sylva said that the Petroleum Industry Bill (PIB) might be passed into law by the first quarter of 2021 and N500 billion earmarked for subsidy in the 2020 budget had been saved. He added that subsidy cuts would save N1 trillion annually which would fund critical aspects of the economy. The Minister said this would help to stimulate economic growth, further improve Nigeria’s energy mix, drive investments, and provide jobs in the country.
[Also Read] Equatorial Guinea To Increase Oil Output In 2020
The Ministry of Mines and Hydrocarbons announced it will see three exploration wells drilled in Trident Energy-operated Block G in 2021, along with refurbishment and well intervention works across other assets. Trident Energy will drill three wells in Block G starting in April 2021.
Each well will take 33 days to complete. Block G located 15 km offshore Equatorial Guinea, is home to the Ceiba and Okume fields and is set to yield new development opportunities following the company’s acquisition of 4D seismic in the first quarter of 2020.
Noble Energy will conduct refurbishment work on its Aseng Floating Production Storage and Offloading (FPSO) unit for 10 days, to maintain safety, reliability, and productivity of the infrastructure, as well as comply with regulations of the ABS (leading U.S. offshore classification society). Intervention works will also be carried out in wells 5P and WI-1.
Meanwhile, maintenance works will be conducted on the Zafiro, Jade and Serpentina infrastructures, with execution planning activities carried out ahead of well repairs on the Jade Platform by 2022, along with optimization of production and management of inactive wells. Serving as the country’s most prolific asset, the ExxonMobil-operated Zafiro field was producing 90,000 bpd (pre-COVID-19) via the Jade fixed production and drilling platform and Serpentina FPSO.
As of October 2020, total crude oil production in the country stands at 35.15 million barrels, translating to an average daily production of 115,250 bpd. Total condensate production amounts to 9.48 million barrels, translating to an average daily production of 31,079 bpd.
The Ministry has set its sights on boosting hydrocarbon output by facilitating the influx of foreign capital and enabling operators to carry out capital-intensive E&P activities in 2021.
On Thursday 31st December, crude futures traded modestly lower with crude set to end 2020 down by more than 20% in a year that saw demand slammed by the COVID-19 pandemic which restricted travel and business and consumer activity.
The U.S. West Texas Intermediate (WTI) crude futures down 21 cents to $48.19 a barrel, while Brent crude futures fell 22 cents to $51.41 a barrel. The U.S. Energy Information Administration (EIA) weekly report for Wednesday 30th December showed a draw of 6.065 million barrels in supplies for the week ending December 25, against analysts’ forecast for a bigger draw of 2.583-million-barrels and the 562,000-barrel draw seen during the previous week. The EIA data follows Tuesday’s crude oil supply data from the American Petroleum Institute, which showed a draw of 4.785 million barrels.
The COVID-19 pandemic and the ensuing strict lockdowns saw around a fifth of global crude oil markets’ value wiped out in 2020 and a shock maiden venture into negative territory for WTI futures in April, as fuel demand tanked.
However, unprecedented stimulus measures from governments globally have helped prices rebound from these lows, with both Brent and WTI futures more than doubling from the decade-lows seen in Q1 2020.
A bright spot for investors ahead of the turning of the year was better-than-expected U.S. crude oil supply data. However, immediate fuel demand concerns over the spread of the new B177 strain of the COVID-19 virus and the ensuing lockdowns put a damper on investor sentiment.
The Organization of the Petroleum Exporting Countries and allies (OPEC+) will ring in the new year with a series of meetings to discuss easing current production cuts. OPEC+’s Joint Technical Committee and the Joint Ministerial Monitoring Committee will meet on Jan. 3 and 4 respectively, with the 13th OPEC and non-OPEC Ministerial Meeting scheduled for Jan. 4. Current production cuts are set to ease by 500,000 bpd in January.