Market Report: VAALCO Starts Production at the Avouma 3H-ST Well Offshore Gabon

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The weekly market report is provided by Gladius Commodities of Lagos, Nigeria. Learn more about Gladius Commodities at www.gladiuscommodities.com.
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GABON

VAALCO Energy announced it had started production from the Avouma 3H-ST development well drilled from the Avouma platform in the Etame field, offshore Gabon. The initial flow rate of the well was approximately 3,100 gross barrels of oil per day (bpd), which was above VAALCO’s internal expectations. This side-track well targeted existing high-quality Gamba hydrocarbons at the top of a structure that has not previously been produced by prior wells. It is the second successful well of VAALCO’s 2021/2022 drilling campaign. VAALCO confirmed the well extension of the Avouma reservoir is forecasted to increase the overall recovery from the field, potentially allowing for additional wells at Avouma. Drilling has now started on the next well in the drilling program, the ETBSM 1HB-ST development well, and on the Avouma platform.

NIGERIA

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari was awarded the Leadership CEO of the Year (2021) award for his strategic intervention in turning the NNPC into a profit-making company and driving the gas revolution and other initiatives over the past year. Kyari attributed the award to the teamwork of the management and staff of the company, noting that the recognition would not have been possible without the collective efforts of all NNPC staff. He expressed that the corporation would continue to execute its goals critically to support the economy by ensuring that energy is available to all Nigerians affordably and sustainably. Kyari further stated that his plan for NNPC is to operate the corporation as a multi-trillion-naira company, the most capitalized in the country, and having the highest assets of any company in Africa.

The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, has commended the Interim Administrator of the Presidential Amnesty Programme on delivering the amnesty mandate in the Niger Delta, addressing the regional concerns. H.E. Minister Sylva lauded the Train, Employ and Mentor initiative, a scheme which trains and rewards ex- agitators to re-position them for the future. He stated that this training and employment scheme would go a long way to increase peace in the region and reduce the incidents of vandalism of pipelines and infrastructure, which in turn is beneficial for the entire country. Furthermore, the minister called for collective efforts to fight against all forms of attack on the Niger Delta, particularly the destruction of the environment.

GLOBAL

On April 26, crude oil prices shot higher as the German government reportedly dropped its opposition to an embargo on Russian oil, paving the way for a complete EU boycott of liquid fuels out of Russia. The U.S. West Texas Intermediate crude futures were up 1.4% at $103.48 a barrel, while Brent crude futures were up 1.3% at $106.30 a barrel at 10:45 AM ET (14:45 GMT). The U.S. Energy Information Administration’s weekly report showed that crude oil inventories increased by 0.7 million barrels for the week ending April 22.

A slowdown in global growth owing to higher commodity prices and an escalation in the Russia-Ukraine conflict could further exacerbate oil demand fears. The German and Polish governments struck an agreement to supply refineries in eastern Germany at least partly with oil imported from Poland’s terminal at Gdansk on the Baltic. The oil can then be fed via a branch pipeline into the Druzhba pipeline that serves as the principal artery for Russian oil to central Europe. Germany had depended on Russia for about one-third of its oil. Additionally, the Organization of the Petroleum Exporting Countries and allies led by Russia, is likely to stick to its existing deal of 400,000 bpd and may agree on another small output increase for June at the meeting scheduled for May 5, even as Russia expects its output to shrink further. Major consumers, led by the U.S., have been pressing the group to boost output at a faster pace.

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