On Monday 19th February, Dr. Ibe Kachikwu, the Minister for Petroleum said Nigeria will grow local investments and shareholdings of its oil and gas industry from 10% to 50% within the next 10 years. Kachikwu also said multinational oil companies operating in Nigeria might be compelled by the Federal Government to build refinery facilities in Nigeria to ensure the country fully maximises its hydrocarbon resources and moves away from crude oil export. Kachikwu stated that the government is planning to put frameworks in place for the processing of a substantial amount of crude produced from its oil fields. Currently, the nation’s average refining capacity is about 14%, but this would be upgraded to between 90-95% in 10 months to meet rising demands. Kachikwu said from now on, the nation’s oil has to provide the resources to power the country, provide jobs for Nigerians and provide the operational environment transparent enough for others to take Nigeria seriously.
Dr. Maikanti Baru, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) has commended the progress of work at the Azikel Refinery in Bayelsa State. Baru stressed the need to encourage the company, pointing out that the 12,000 barrel stream per day hydro-skimming refinery will produce petrol, diesel, aviation fuel, LPG and heavy fuel oil. Baru pledged that NNPC will continue to support the project towards completion and lauded President Buhari for the policy towards improving production of refined petroleum products to ensure availability in all parts of the country. Baru emphasized that the Azikel refinery is well poised to meet the mandate of increased refining capacity, adding that Nigeria stands to benefit a lot from the initiative. Additionally, speaking at the opening ceremony of the Nigeria International Petroleum Summit, Baru also urged African countries to collaborate and increase trade with one another.
Aker Energy has signed an agreement to acquire Hess Corporation’s 50% participating interest in the Deepwater Tano Cape Three Points block (DWT/CTP) located off the coast of Ghana. The proposed transaction is valued at $100 million, concentrating on the Tano Basin and is in line with Aker Group’s and Ghana National Petroleum’s plan to build a significant E&P activity in the country. Aker said the proposed transaction, which is subject to approval from Ghanaian authorities, gives it a 50% stake in the ultra-deep-water Tano Cape Three Points block which holds an estimated 550 million barrels of oil equivalent and has the potential for a further 400 million barrels. Aker is expected to make a payment of $25 million once the transaction is complete and the balance of $75 million is required to be paid upon receipt of approval of the plan for development and operation on the DWT/CTP block. Øyvind Eriksen, Aker president and CEO said, “Ghana is still in the early days of developing its oil and gas resources, so for us, it means we can quickly build up there at a very exciting price”. Aker Energy plans to present a development plan for the block this year, with production from the West African country expected to start in 2021. Ghana is seeking to develop its oil and gas resources beyond its flagship Jubilee field.
On Thursday 22nd February, oil prices were higher after data showed a sizable decline in U.S. oil stockpiles. The U.S. West Texas Intermediate crude for April contract was up 37 cents at $62.08 a barrel at 11:03 a.m. ET (16:03 GMT), while the ICE Futures Exchange in London Brent oil for April delivery was up 30 cents at $61.98 a barrel. The U.S Energy Information Administration weekly report for Thursday 22nd February showed a fall in crude oil inventories by 1.6 million barrels in the week ending February 16, whereas analysts expected a gain of 1.8 million barrels. The report also showed that gasoline inventories increased by 0.3 million barrels, compared to expectations for a decline of 0.3 million barrels. For distillate inventories including diesel, the EIA reported a drop of 2.4 million barrels Usually, at this time of year, crude inventories rise as many refineries cut crude intake to conduct maintenance. However, a bottleneck in Canada’s pipeline system has reduced U.S. imports and pushed U.S. stocks lower. Nevertheless, analysts believe oil markets are still generally well supported due to rising demand for crude and production restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.