On 28 August, The Nigerian National Petroleum Corporation (NNPC) announced it plans to establish two condensate refineries at Western Forcados Area and Assah North Ohaji South (ANOH) Area of Delta and Imo State respectively. The two refineries will have a total refining capacity of 200,000 barrels per day (bpd) and will assist to increase the nation’s revenue base and eliminate the importation of petroleum products. Dr. Maikanti Baru, the Group Managing Director of the NNPC made the disclosure at the bid opening for the provision of consultancy services to carry out a feasibility study for the refineries. According to Baru, the NNPC’s target is to ensure sufficient power and fuel availability to drive economic growth, adding that the bid opening was the first step to realizing the condensate refineries ambition.
Baru stated that the initiative complies with the overall objectives of the Federal Government to boost the nation’s economy to 7 percent of Gross Domestic Product by the end of 2020 through the Economic Recovery and Growth Plan. The projects are expected to increase the country’s energy security and boost the NNPC refining capacity from 445,000 bpd to 645,000 bpd.The $3.3 billion Floating Production Storage Offloading (FPSO) has sailed from Lagos to the 200,000 bpd Egina oilfield. The Egina FPSO was built by Samsung Heavy Industries of Korea (SHI) for Egina oilfield being developed at a cost of $16 billion by Total. With the successful completion of the fabrication and integration works in Lagos, the FPSO will arrive at the Egina oilfield located in Oil Mining Lease (OML) 130. The FPSO sailed away from the quayside at Samsung Yard in Geoje, South Korea on 31 October 2017, and arrived at the SHI-MCI FZE quayside in LADOL free zone in Lagos in January, where it was integrated locally by Samsung Heavy Industries Nigeria (SHIN) Limited. The fabrication and integration of the Egina FPSO in Nigeria was the first time such complex tasks were executed in Africa. The Egina field will add 200,000 bpd of crude oil to Nigeria’s daily output when it comes on stream, amounting to a 10 percent increase to Nigeria’s daily production at peak.
On 30 August, Golar LNG announced that Black & Veatch – a global engineering company specializing in infrastructure development has successfully completed its Guaranteed Performance Test aboard Golar LNG’s Hilli Episeyo with its patented PRICO technology. The Hilli Episeyo is the world’s first floating liquefied natural gas (FLNG) vessel developed as a conversion project from an LNG carrier. The vessel is moored off the coast of Cameroon and recently offloaded its sixth LNG cargo. Black & Veatch completed its Guaranteed Performance Test on 12 August for all four of the Hilli Episeyo’s PRICO liquefaction trains. Successful testing aboard Golar LNG’s Hilli Episeyo shows the ability to meet customer demand for continuous and efficient production. PRICO technology uses a single-mixed refrigerant loop for natural gas liquefaction – a process that provides several key benefits including requiring minimal equipment, scalability and a compact process footprint that makes it ideal for offshore liquefaction projects.
Norwegian oil firm Aker Energy announced it will delay submitting a plan for the development of its block off Ghana until early 2019 to allow time to complete appraisal drilling expected to start in October. Aker had initially intended to submit a development plan in the second half of 2018 but has since changed its mind. The company plans to make a final investment decision and to submit a field development plan to Ghanaian authorities in early 2019, with production starting in late-2021 or early 2022. The plan involves developing around 400 million barrels of oil by using an FPSO vessel. Aker Energy holds 50 percent stake in Ghana’s Deepwater Tano Cape Three Points (DWT/CTP) block, Lukoil has 38 percent, Ghana National Petroleum Corporation 10 percent and Fuel Trade 2 percent.
On 30 August, oil prices rose as traders speculated on further tightening of supply, as weekly U.S. inventory data showed diminishing inventories. The U.S. West Texas Intermediate crude futures gained 22 cents at $68.69 a barrel at 11:06 AM ET (15:06 GMT), while Brent crude futures rose 26 cents at $77.72. The U.S. Energy Information Administration (EIA) weekly report for 29 August showed a fall in crude inventories by 2.6 million barrels in the week ending 24 August, beating expectations for a draw of just 0.686 million barrels. The large draw in crude supplies comes as imports fell by about 0.657 million bpd, while exports rose by 0.624 million bpd.
Earlier in the week, OPEC and non-OPEC monitoring committee confirmed reports of delivering 109 percent of pledged oil supply curbs, when it had decided to reduce those levels to 100 percent near the end of June 2018. With recent indications, the monitoring committee further expressed its satisfaction that there was a good balance between supply and demand in the market, leading to speculation that the group may not need to further increase output. Meanwhile, traders also assessed the impact of the upcoming U.S. sanctions against Iran, which will start to kick in from November, while the expected disruptions to supply from Venezuela provided another bullish focus for market participants.