Energy
Oil prices crash
… OPEC raises production target from July
Crude oil prices fell yesterday after the decision by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members to raise crude supplies to about one million barrels by starting from July 1.
The move was aimed at compensating producers for production loss at a time of rising global consumption.
What this means is that any country with spare capacity will be able to boost production.
Nigeria was originally exempted from the initial output capping due to the volatility in the Niger-Delta, which brought the country’s crude oil down to less than one million barrel per day.
OPEC and non-OPEC removed about 1.8 million (bpd) from the market to boost crude oil prices.
Though crude oil prices witnessed a little increase on Friday while the OPEC meeting was going on, but international benchmark for oil prices – Brent crude crashed from $75.32 a barrel to $74.44 per barrel.
But West Texas Intermediate (WTI) went down by 0.3 per cent to settle at $68.40 a barrel.
Nigeria’s Bonny Light crude oil also increased from $73.04 a barrel to $74.60 per barrel during the trading hours on Monday.
OPEC ministers at the 4th OPEC and non-OPEC Ministerial Meeting held in Vienna, Austria at the weekend, decided that countries will strive to adhere to the overall conformity level, voluntarily adjusted to 100 per cent, as of 1 July 2018 for the remaining duration of the ‘Declaration of Cooperation’ (DOC) and for the JMMC to monitor the overall conformity level and report back to the OPEC and non-OPEC Ministerial Meeting.
Commenting on the crude oil market, the Executive Chairman, Arrowville Energy Limited, Abiola Sowole, said that crude oil prices are determined by supply and demand.
According to her, if there is any unplanned disruption in the supply chain, due to geo-politics or other factors, the price will rise rapidly. “Nobody can tell how sustainable high prices are. There are several forecasts, however, of continuous rise in prices.
“One prediction is that they will rise to $75 a barrel this year, reaching $80-$85 next year and hitting $100 or higher by 2020, if the International Monetary Fund’s projection of a growing robust economy materializes and if there is a fast-growing global demand for oil. Another prediction is that oil prices will jump to $140 a barrel, due to U.S. sanctions against Iran and Venezuela, unless OPEC and Russia agree to reverse the oil production cuts they agreed to in 2016,” she added.
Speaking on the decision by OPEC, the United Arab Emirates (UAE) Minister of Energy and Industry, Suhail Mohamed Al Mazrouei, stated: “As we all know, in an increasingly interdependent world, with the oil industry a central element of this, the challenges we face can be complex. They need to be monitored on a regular basis, so that swift and informed decisions can be taken.
“It once again reinforces the importance of working in unison. It is vital that our hard-earned improvements are not compromised or lost.
“We need to keep in mind that it took all of us together to bring the oil market out of the wilderness, and we need to take these lessons into the future.”
He noted that the market has also continued to see the firm and unwavering resolve from OPEC and non-OPEC participants in the ‘Declaration of Cooperation’.
This, he said, is reflected in the unprecedented overall conformity levels that member countries have seen from participating countries.
OPEC Secretary General, Mohammad Sanusi Barkindo, said ‘Declaration of Cooperation’ literally rescued the oil industry from its worst ever downturn and now constitutes a fundamental and essential feature of the ‘new world of energy’.
According to him, over the last 18 months, this cooperation has helped return more balance to the oil market, more optimism to the industry and has had a positive impact on the global economy and trade worldwide.
He noted that it has enabled industry investment to gradually pick up, albeit not yet to pre-2014/15 levels, and has resulted in many jobs returning and unemployment easing.
Barkindo said that the importance of the Declaration has also received backing from other producers, as well as from consuming nations.
The Organisation has ably demonstrated its credentials as a body committed to international cooperation, working with other producers, honouring its commitments and promoting mutual respect among all nations.
He stated: “The Declaration underscores what can be accomplished through a constructive, continuous and fully committed approach to helping achieve a sustainable oil market stability.
“However, we appreciate that our work never stops! We are fully committed to sustaining balance and stability in the market, in the interests of both producers and consumers.
“In the coming months, we will look to institutionalise this long-term framework for continuity with an all-inclusive and broad-based participation, to look at some of the industry’s pertinent challenges, as well as the opportunities.”
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Energy
AVEVA is providing data management support for renewable natural gas projects
Reporter: Godwin Ezeh
Key Highlights
● AVEVA’s industrial information infrastructure has been selected by Archaea Energy to provide key data management support
● AVEVA’s industrial software to optimize performance across Archaea’s RNG plants
AVEVA, a global leader in industrial software driving digital transformation and sustainability, has been selected by Archaea Energy, the largest renewable natural gas (RNG) producer in the US, to build a comprehensive operations data management infrastructure.
Using AVEVA’s software, Archaea Energy can collect, enrich and visualize its real-time operations data, enabling performance analysis across its growing network of plants.
Using AVEVA PI Data Infrastructure, a hybrid solution with cloud data services, the plants will be able to share data to highlight operational opportunities and optimize efficiency.
Caspar Herzberg, CEO, AVEVA, stated,
“Through this collaboration and the use of AVEVA PI Data Infrastructure, Archaea’s growing network of plants will have streamlined operations with accurate performance analysis throughout the expansion. AVEVA’s CONNECT software platform leverages industrial intelligence from a central location, making it easier to deploy additional digital solutions in the future.”
“As the largest RNG producer in the United States, we are dedicated to delivering reliable, clean energy,” said Starlee Sykes, chief executive officer of Archaea Energy. “This relationship will allow us to optimize operations and offer detailed performance analysis as we continue to expand across the country.”
…OML 13 Asset Eyes 80,000 bpd by End of 2025
In a major boost for Nigeria’s crude oil production, revenue generation and economic growth efforts, the NNPC Ltd has officially unveiled its latest crude oil grade, the Utapate crude oil blend, before the international crude oil market.
It would be recalled that in July, 2024, NNPC Ltd and its partner, the Sterling Oil Exploration & Energy Production Company (SEEPCO) Ltd introduced the Utapate crude oil blend, following the lifting of first cargo of 950,000 barrels which headed for Spain.
During a ceremony held at the Argus European Crude Conference taking place in London, United Kingdom, on Wednesday, the Managing Director, NNPC E & P Limited (NEPL), Mr. Nicholas Foucart described the introduction of the Utapate crude oil blend into the market as a significant milestone for Nigeria’s crude oil export to the global energy market.
“Since we started producing the Utapate Field in May 2024, we have rapidly ramped up production to 40,000 barrels per day (bpd) with minimum downtime. So far, we have exported five cargoes, largely to Spain and the East Coast of the United States; while two more additional cargoes have been secured for November and December 2024, representing a significant boost to Nigeria’s crude oil export to the global market,” Foucart told a packed audience of European crude oil marketers.
He added that since its introduction into the global market, the Utapate crude oil blend has enjoyed a positive response from the international crude oil market, due to its highly attractive qualities.
Foucart said the Oil Mining Lease (OML) 13, fully operated by NEPL and Natural Oilfield Services Ltd (NOSL), a subsidiary of SEEPCO Ltd, boasts a huge reserves of 330million barrels of crude oil reserves, 45 million barrels of condensate and 3.5 tcf of gas.
“We have a number of ongoing projects to increase our production from the current 40,000bopd to 50,000bopd by January 2025 and 60,000bopd to 65,000bopd by June 2025. Essentially, we are targeting opportunities to increase production to 80,000bopd by the end of 2025,” Foucart added.
He said the Utapate crude oil terminal is sustainable, affordable and fully compliant with the rigorous environmental regulations and sustainability principles especially those aimed at reducing carbon emissions and other ecological effects.
Also speaking, the Managing Director of NNPC Trading Ltd (NTL), Mr. Lawal Sade said the pricing structure of the Utapate crude oil blend is similar to that of Amenam crude as it is a light sweet crude which is highly sought after by refiners across the world due to its low sulphur content, efficient yield of high-value products, API gravity and other similarities.
He said in bringing the new crude oil blend to the global market, NNPC Ltd wanted to optimise value for both its producers and counterparties across the globe.
He added to ensure predictability and sustainability of supply, the NNPC Trading intends to run a term contract on the Utapate crude oil blend cargoes, principally targeting off-takers from the European and the US East Coast refineries.
Produced from the Utapate field in OML 13 in Akwa Ibom State in Nigeria, the Utapate crude oil blend is similar to the Nembe crude oil grade. It has a low sulphur content of 0.0655% and low carbon footprint due to flare gas elimination, fitting perfectly into the required specification of major buyers in Europe.
The NNPC E&P Ltd and NOSL partnership is also committed to operating in a manner that is safe, environmentally responsible, and beneficial to the local communities.
The Utapate field development plan, executed between 2013-2019 and approved in October, included converting wells and facilities from swamp/marine to land-based operations.
The plan involved a multi-rig drilling campaign for 40 wells and the development of significant infrastructure such as production facilities, storage tank, a subsea pipeline and an offshore loading platform to facilitate crude oil evacuation and loading.
The entry of the Utapate crude oil blend into the market is coming barely a year after the NNPC Ltd announced the launch of Nembe crude oil, produced by the NNPC/Aiteo operated Oil Mining Lease (OML) 29 Joint Venture (JV).
This remarkable achievement signals the commitment of the NNPC Ltd to increasing Nigeria’s crude oil production and growing its reserves through the development of new assets.
Energy
NNPC Ltd Set to Supply 100mmscf/d Gas to Dangote Refinery
…10-year Deal to Boost Local Production, Revamp Industrial Growth, reports Ikenna Oluka
The NNPC Gas Marketing Limited (NGML), a subsidiary of the Nigerian National Petroleum Company (NNPC) Limited, has successfully executed a Gas Sale and Purchase Agreement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.
The agreement, signed by the Managing Director, NGML, Barr. Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote on Tuesday at the Corporate Head Office of Dangote in Falomo, Lagos State, outlines the supply of natural gas for power generation and feedstock at the Dangote Refinery, in Ibeju-Lekki, Lagos State.
This major milestone is in line with President Bola Ahmed Tinubu’s policy of utilizing Nigeria’s abundant gas resources towards revamping the nation’s industrial growth and kickstarting its economic prosperity.
This development, which sees a huge investment of this nature penned with zero capital expenditure (CAPEX) outlay, has been described by many as unprecedented in the history of NGML or any gas Local Distribution Company (LDC) in the country.
Under the terms of the agreement, NGML will supply 100 million standard cubic feet per day (MMSCF/D), 50MMSCF/D being firm supply and the rest 50MMSCF/D interruptible natural gas supply to the refinery for an initial period of 10 years, with options for renewal and growth.
This collaboration is a significant step toward ensuring the operational success of the Dangote Refinery and enhancing Nigeria’s domestic gas utilization.
NNPC Ltd, through NGML, its gas marketing subsidiary, continues to lead efforts in promoting the use of domestic gas to support industries and businesses nationwide.
The agreement represents a milestone for both NNPC Ltd and Dangote Refinery, aligning with their shared commitment to boosting local production and providing vital products for the benefit of all Nigerians.
It is also a further proof of NGML’s unwavering commitment to business excellence and fulfilling NNPC Ltd’s core mandate of ensuring Nigeria’s energy security through the execution of strategic gas projects across the country.
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