Page 5 - AfrOil Week 34 2019

AfrOil COMMENTARY AfrOil
( e other group is Greater Pioneer Oper-  ating Co., or GPOC, which was founded by Chinese, Malaysian and Indian investors.) As a result, it is already in a position to make use of existing production and transport infrastruc- ture. is includes the landlocked country’s only oil export pipeline, which runs through neigh- bouring Sudan and terminates at a port on the
Red Sea coast.
On this front, Block 3 is likely to bene t from
the involvement of China National Petroleum Corp. (CNPC), which serves as operator of both DPOC and GPOC. e state-owned Chinese company has continued to work closely with the government of Sudan since 2011 and remains one of the largest investors in that country.
New possibilities
Even so, the small eld may help Juba forge its own path towards development that is not com- pletely dependent on foreign consortia led by Chinese investors.
Chuang expressed excitement about the discovery, which is the rst of its kind to have been made in South Sudan since 2011. He said it indicated that additional finds were likely, noting that South Sudanese geologists hoped to come across more oil in the Melut Basin and other parts of the country. “As of now, we are very excited ... [Within] some few weeks, explo- ration will be taken as a priority. We are going tomovealloverSouthSudan,”hewasquotedas saying by Reuters.
e oil minister also reported that the site would be connected to the nearby Paloch block, which is being developed by DPOC. He did not comment further, but South Sudan’s Information Minister Makuei Lueth said these links would play a crucial role in preparations for launching development work at the smaller eld.
“ is is a new discovery, and hence people will have to do so many things in order to get
production,” he said. “[ e new deposit] needs a pipeline to connect it to the main pipe.”
Forging a path
e information minister’s statements indicate that Juba expects oil from the smaller eld to be loaded into the existing export pipeline that passes through Sudan on its way to the Red Sea coast.
But if the oil minister’s predictions of addi- tional discoveries in Greater Upper Nile are cor- rect, they could lend momentum to the South Sudanese government’s plans for opening up a new oil export route – especially if the national oil company (NOC) Nilepet starts working with new partners. On the one hand, new elds could turn out more oil than the pipeline to Sudan could handle.
And on the other hand, new investors might not share CNPC’s interest in existing infrastruc- ture. ey might prefer instead to back plans for exporting crude by pipeline via another neigh- bouring country such as Kenya.
If they do, South Sudan has a better chance of establishing itself as an oil producer in its own right, and not just as a spin-o from Sudan or a collection of assets controlled by CNPC. Even so, there is no guarantee that this scenario will come to fruition.
Doug Rycro , commercial director at energy advisory practice Gneiss Energy, told AfrOil: “Such hopes will have been dampened by the recent news that the developers of the Lamu Port-South Sudan-Ethiopia-Transport (LAPS- SET) Corridor are around $24bn short in fund- ing for the infrastructure project, which includes a pipeline that will export oil via Kenya’s Indian Ocean port at Lamu.”
He added: “With the timely completion of LAPSSET looking increasingly unlikely, if at all, Juba will need to nd alternative export options if it is to reach its targeted oil production level of 350,000-400,000 bpd.”. ™
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Add
itional discoveries in Greater Upper
Nile could lend momentum to the government’s plans for opening upanewoil export route
PERFORMANCE
Utilisation rate of Nigerian refineries drops to 5.55%
DATA released in May by the Nigerian National Petroleum Corp. (NNPC) show that the coun- try’s four state-owned re neries were operating at just 5.55% of their nameplate capacity.
NNPC’s four facilities have a combined nameplate capacity of 445,000 barrels per day (bpd). e Kaduna facility can process 110,000 bpd while Warri can handle 125,000 bpd, and the two Port Harcourt units, built roughly 25 years apart, have a joint total of 210,000 bpd.
However, the latest gures show that 5.55% was a six-month high. “ e lower operational performance recorded is attributed to the
ongoing revamping of the re neries, which is expected to further enhance capacity utilisation when completed,” NNPC said.
A er years of under-investment, the ageing facilities typically run at less than 10% of capac- ity. In a general update on operations, NNPC disclosed in January of this year that that full turnaround maintenance (TAM) at the plants had not been carried out for 42 years.
is has meant that imports will be needed to meet more than 80% of demand. According to NNPC, re ning capacity of 1.52mn bpd will be required to meet Nigerian demand by 2025.
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Week 34 27•August•2019 w w w . N E W S B A S E . c o m
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