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The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva announced that the Federal Government has decided for the immediate reduction in the domestic base price of natural gas to plant producers from $2.50 to $2.18 per standard cubic feet. This downward review in gas price pricing will lead to more electricity supply and save billions of Naira lost by power firms. Minister Sylva also stated that the decision was made following a mutual negotiation between the Government and the Nigeria Labor Congress and was in line with the currents commitment to actualize its gas revolution through the decade of gas.
The Group Managing Director of the Nigerian National Petroleum Corporation, Alhaji Mele Kyari, assured stakeholders about the timely delivery of the ongoing 614 kilometers (km) Ajaokuta-Kaduna-Kano (AKK) gas pipeline, while speaking at the Gas Sector Stakeholders’ Forum titled: “Optimizing the Economic Development Capacity of AKK Gas Pipeline Project”. Alhaji Kyari further stated that the project would revamp about 232 industries and develop three Independent Power Plants (IPP) in Abuja, Kaduna and Kano that would boost electricity supply and promote the growth of small and medium scale enterprises in Nigeria.
BW Energy has completed the final horizontal production well on the Dussafu Marin license in Gabon and is currently working to tie in two wells for the first oil production in early Q4 2021. BW Energy kicked off its 2021 Gabon drilling campaign with the spudding of the Hibiscus Extension well (DHIBM-2) on the Dussafu Marin Permit in April 2021. The well was drilled using the Borr Norve jack-up drilling rig. It was the first well in a three-well campaign planned on Dussafu during 2021, however, it did not encounter hydrocarbons in the target Gamba reservoir. Initial findings indicated that the Gamba was water-bearing rather than containing hydrocarbons.
Following the DHIBM-2 well, the Borr Norve jack-up continued drilling operations on the horizontal production well, DTM-7H, at the Tortue field. High-quality oil-bearing sands were encountered in line with the prognosis. The work will proceed with the completion and tie-in of the two wells (DTM-6H and DTM-7H), with the first oil expected in early Q4 2021. The Hibiscus North exploration well (DHBNM-1) was spudded earlier this week with drilling activities progressing as planned. The well has a geological analogue to the Ruche Field, where the Gamba structure is the primary target.
According to Panoro, BW Energy’s partner, the well is targeting gross 10-40 million barrels of oil recoverable (operator estimates) in the Gamba formation. It is located approximately 6km north-northeast of the Hibiscus discovery well DHIBM-1 in a water depth of 115 metres. BW also said that the gross production from the Tortue field averaged approximately 10,500 barrels of oil per day (bpd) in Q2 of 2021, amounting to a total gross production of 0.95 million barrels of oil for the period. The decrease in production compared to the Q1 of 2021 was mainly due to a planned maintenance shutdown. Current production is more than the Q2 average and is expected to rise once DTM-6H and -7H are online in early Q4.
On July 29, crude oil prices pushed higher, climbing to two-week highs amid signs of a U.S. economy continuing to recover while U.S. inventories fell once more. The U.S. West Texas Intermediate (WTI) crude futures traded 0.4% higher at $72.69 a barrel, while Brent crude futures rose 0.6% to $74.27 at 10:10 AM ET (14:10 GMT). The U.S. Energy Information Administration’s weekly report for July 28 showed a fall in crude oil inventories by over 4 million barrels in the week ending July 23.
Investors continue to worry as gasoline demand in the U.S. and Europe begins to plateau. Analysts note that globally, pre-pandemic demand levels may not be seen until beyond 2022 if COVID-19 infections and the slow pace of vaccinations further entrench structural changes in demand.
Royal Dutch Shell and TotalEnergies both announced plans to return significant returns to their shareholders, indicating confidence that they can maintain the current substantial profits while also suggesting that they will see little need to increase output in the coming months.
Meanwhile, the Wall Street Journal reported that the U.S. is planning a sanctions campaign against what they see as Iran’s improving capabilities for precision strikes using drones and guided missiles. Hence, suggesting getting Iran back into a nuclear deal, making the lifting of sanctions against Iranian crude exports difficult to achieve.