Page 10 - AfrOil Week 05 2022

AfrOil PERFORMANCE AfrOil

It added that its own share of gross production before the end of the year.
had been around 830,000 barrels. Additionally, it reported that its cash balance
BW Offshore also carried out two cargo lift- stood at $150mn as of the end of the fourth quar-
ings between October and December. It sold ter, down from $170mn as of the end of the third
those cargos at an average price of $79 per barrel, quarter, largely as a consequence of investments
while production costs averaged $27 per barrel. related to the Hibiscus/Ruche project.
“The overall production cost includes approxi- Like Tortue, Hibiscus and Ruche are oilfields
mately $1.0mn of costs related to the continued within the Ruche EEA. In turn, the Ruche EEA
handling of the COVID-19 pandemic in the is associated with the Dussafu Marin permit,
period,” the statement noted. a larger licence area offshore Gabon. BW Off-
BW Offshore also said it had not received shore’s partners in the project are Panoro Energy
payment for the second cargo as of December (Norway) and the national oil company (NOC),
31, even though it had completed the lifting Gabon Oil. ™

OPEC+ makes quick decision, but

adding production will be harder

GLOBAL THE OPEC+ group this week agreed to ease using spare capacity to fill supply gaps left by
their collective production restraint by a fur- others failing to reach their targets, with Sau-
ther 400,000 barrels per day (bpd) in March in a di-based Jadwa Investment this week suggest-
meeting that lasted just 16 minutes. ing the Kingdom’s output could average 10.3mn
The 23 members’ rapid decision came as oil bpd in 2022.
prices rose beyond $90 per barrel on the back While it is likely that Middle Eastern nations
of geopolitical concerns in the Middle East could make short-term gains – Kuwait and Saudi
and Eastern Europe. Despite the move, supply Arabia are pressing ahead with field expansion
concerns are likely to linger, with a Bloomberg projects, both domestically and in their shared
survey suggesting that the 13 OPEC members Partitioned Neutral Zone (PNZ), while Iraq has
were only able to achieve a production increase already said it intends to export around 100,000
of 50,000 bpd in January, as output from Nigeria bpd more in February – OPEC will need to play
rose by 160,000 bpd during the month. How- a delicate balancing act between the market and
ever, the group actually ended up registering a its relations with Russia.
drop of 90,000 bpd following the shutdown of One of Platts’ sources said that this rela-
Libya’s Sharara oilfield. tionship could be strained if OPEC members
The wider OPEC+ group fared even worse, begin overproducing and claim Russia’s share of
underproducing by more than 820,000 bpd in the market. “I do not imagine that Russia will
January. accept the principle that countries which have
As smaller producers struggle to raise their additional spare capacity can increase their pro-
output, Middle Eastern countries may need duction when it cannot do so,” he said.
to ramp up disproportionately, with industry The group is unlikely to be rushed into any
estimates suggesting that 90% of the group’s knee-jerk moves, though, with JP Morgan’s
spare capacity is now held by Saudi Arabia and Christyan Malek telling the FT: “OPEC+ is not
the UAE. The pair have maximum production in any rush to raise production too quickly or to
capacities of 12mn bpd and 4mn bpd respec- backfill for members that might be struggling to
tively, though work is ongoing in both countries meet their targets, no matter the concerns over
to add another 1mn bpd each. Ukraine or the return of $90 oil. They have a
According to data compiled by IGM Energy, plan they want to stick to and don’t want to be
OPEC+’s top five producers in January were: seen to be pushed around.” ™
Russia (just over 10mn bpd); Saudi (just under
10mn bpd); Iraq (4.3mn bpd); the UAE (2.9mn
bpd) and Kuwait (2.6mn bpd).
With Middle East oil ministers and execu-
tives calling out IOCs for underinvestment in
new production globally, Goldman Sachs antic-
ipates an oil price above $100 per barrel in Q3,
noting that spare capacity could reach historic
lows of around 1.2mn bpd around that time.
S&P Global Platts quoted delegates as saying
that there had been no discussion on countries

P10 www. NEWSBASE .com Week 05 02•February•2022