Page 12 - MEOG Week 22

MEOG n r G MEOG
Some momentum, but overall restraint
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CRUDE prices have remained relatively stable over the past week, with both Brent and West Texas Intermediate (WTI) staying above $30 per barrel, and Brent even edging closer to $40 per barrel. however, this relative stability comes as a result of extensive cuts to supply, and all eyes will be on this week’s OPEC+ meeting, where the group will consider extending its cuts into July or August.
In the meantime, there is still plenty of news of weak demand, earnings losses and various players scaling back activity in response to mar- ket conditions. Some signs of forward momen- tum are emerging, but such steps are being taken with caution.
african countries moving ahead
Two African countries have taken a step this week towards launching long-delayed invest- ment initiatives.
In Nigeria, the Department of Petroleum Resources (DPR) has launched a new licensing round for marginal fields after a delay of more than10years.Theauctionswillcover57fieldsin the onshore, swamp and shallow-water offshore zones, and they will be open to both domestic and foreign investors. The DPR hopes to wrap up the bidding process before the end of the year.
In Uganda, Tullow Oil (UK/Ireland) has taken another step towards finalising the sale of its stakes in several blocks near Lake Albert
to Total (France). The company reported last week that China National Offshore Oil Corp. (CNOOC), the other shareholder in the blocks, has decided against exercising its right to buy half of the stakes in question on the same terms as Total. This decision clears the way for Tullow to concentrate on finalising a binding tax agree- ment with Ugandan authorities.
In other news, Algeria’s national oil company (NOC) Sonatrach has become the majority shareholder in the Medgaz pipeline via a trans- action that allowed it to acquire 8.0% of equity from Spain’s CEPSA. Ownership of the pipeline is now divided between Sonatrach, with 51%, and Naturgy (Spain), with 49%. The parties hope to expand the system’s capacity by nearly a quar- ter to 10.2 bcm per year in 2021.
Meanwhile, Nigerian National Petroleum Corp. (NNPC) is talking about bringing its pro- duction costs down to $10 per barrel on average by 2021. Mele Kyari, NNPC’s group managing director, noted that costs were running as high as $35.97 per barrel at some fields.
Ifyou’dliketoreadmoreaboutthekeyevents shaping Africa’s oil and gas sector, then please click here for NewsBase’s AfrOil Monitor.
spot prices spiral in asia
The global oversupply of LNG and the destruc- tion of Asian demand amid the coronavirus (COVID-19) pandemic have sent spot prices
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w w w . N E W S B A S E . c o m Week 22 03•May•2020