Page 7 - LatAmOil Week 23 2020

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NRG: Shoots of recovery showing

After a week’s wrangling, OPEC+ has agreed to extend the production cuts agreed for May and June

COMMENTARY WELCOME to the fifth edition of NewsBase’s have the potential to raise Libyan output by as
Roundup Global (NRG), in which our team of much as 390,000 bpd. This would represent a
international editors provide you with a snap- nearly five-fold increase on the estimated May
shot of some of the key issues affecting their figure.
regional beats. Get the NRG Oil & Gas Editor’s In Kenya, Tullow Oil’s early oil production
Picks to your inbox every week for free. Just click scheme (EOPS) appears to have ground to a
here. halt. The company’s upstream operations in the
Following on from the mayhem of April and Lokichar Basin were already running behind
May reported in previous editions, the mid- schedule, owing to the coronavirus pandemic
term future may be a little clearer after the cru- and other factors. They will likely have to slow
cial OPEC+ meeting which agreed to extend oil down further as a result of the expiration of
production cuts up until the end of July. Tullow’s two-year trucking contract, which pro-
The ripples of quota limitations, reduced vided for crude to be transported to Mombasa
prices and the changing face of the coronavirus for export. In the meantime, Tullow still has
(COVID-19) can be seen in all of our monitors. 185,000 barrels of unexported crude in storage
The world as it was before February/March still at port facilities in Mombasa.
seems a long way off but political issues still raise
their head and will no doubt feature more in the If you’d like to read more about the key events shaping
months ahead. Africa’s oil and gas sector then please click here for
NewsBase’s AfrOil Monitor.
Production issues in Africa
Production issues have been in the spotlight in Asian variations
several African countries within the last week. The pandemic has weighed on each of Asia’s
Nigeria, for example, has come under pres- economies differently and as each country looks
sure to comply with the new production quotas to the future, different strategies are emerging.
approved by the OPEC+ group over the week- Chinese oil importers have seized on cheap oil
end. Officials in Abuja have pledged to do so and prices as economic activity slowly gains momen-
have agreed in principle that producers exceed- tum. Crude imports soared to a new record of
ing their limits ought to compensate the group’s 47.97mn tonnes (11.34mn bpd) in May, General
other members. The West African country Administration of Customs (GAC) data showed
reportedly extracted 1.61mn barrels per day of on June 7, easily outstripping the previous record
oil in May, above the target figure of 1.41mn bpd. of 11.18mn bpd set in November 2019. The May
Libya, by contrast, will not be affected by the figure takes daily import averages to 10.54mn
decision to extend cuts throughout July. Instead, bpd in the first five months; this compares with
it is working to bring production back up at the full-year average of 10.17mn bpd in 2019.
El-Feel, even as it makes another declaration of The rebound could continue, with commod-
force majeure at the Sharara field following an ity research firm Kpler telling Bloomberg that
attack by armed troops. Together, these two sites import levels could climb to 14mn bpd in June.

Week 23 11•June•2020 www. NEWSBASE .com P7