Page 17 - AfrOil Week 14 2020

AfrOil
NEWS IN BRIEF
AfrOil
Brian Larkin, CEO of United Oil and Gas, said: “I am delighted that production in Egypt contin- ues to rise, helping to compensate for the lower oil prices. Since the effective date of the acquisi- tion, gross production at Abu Sennan has now more than doubled to circa 8,400 boepd which, thanks to low operating costs, remains profita- ble at today’s oil prices. The completion of the gas pipeline at Al Jahraa was achieved at low cost and based on current projections, will pay for itself within months. The associated reduction in flaring has also improved the environmental performance of the licence. We are currently drilling the El-Salmiya 5 infill well and we look forward to updating our shareholders on pro- gress shortly.
United Oil & Gas, April 02 2020
LEKOIL details cost
reduction measures and
confirmation of
optimum payment
LEKOIL, the oil and gas exploration and produc- tion company with a focus on Nigeria and West Africa, provides the following corporate update.
Cost reduction measures: With the current significant drop in oil prices from recent lev- els, the Board has approved the immediate and accelerated implementation of the Company’s general and administrative (G&A) cost reduc- tion measures. These measures are targeting an annual reduction of US$8.0mn or at least 40% in G&A costs, which is inclusive of a reduction in staff numbers. The Company has commenced the immediate execution of these measures which will be completed within the next four to six weeks. Production from Otakikpo for the
rest of this year will be unaffected by these cost reduction measures.
Payment for OPL 310 Confirmed: Further to the announcement made on March 25, 2020, the Company has received confirmation that the payment of US$2.0mn to Optimum Petroleum Development Co., the Operator of the OPL 310 License, to cover the portion of sunk costs and consent fees due on March 20, 2020, has been completed.
Lekan Akinyanmi, LEKOIL’s CEO, com- mented: “We have kept our commitments on our world-class asset, O P L 310, despite the det- rimental effects of the COVID-19 pandemic on the global economy and the subsequent fall in oil price. With the implementation of our cost reduction measures, we believe we are in a good position to navigate this challenging period.” LEKOIL, April 02 2020
POLICY
African Energy Chamber
urges OPEC to reach a deal
on ending oil price war
OPEC and OPEC-plus are set to meet in Vienna on Thursday, April 9, to try to reach a deal on ending the current oil price war. Since OPEC failed to reach a deal on maintaining production cuts last March, major oil producers have been ramping up production to maintain and increase their market share. Increased supply came on top of a demand shock due to the COVID-19 pandemic, and sent oil prices at a historic low averaging $20.
Ahead of the meeting, the African Energy Chamber urges OPEC and OPEC-plus to work
together and find a deal to restore market sta- bility. The situation in Africa’s oil economies is dire, and the continent needs a deal to ensure the continuity and survival of its industry.
Following the crash in oil prices, key projects awaiting FID such as ExxonMobil’s Rovuma LNG have been delayed. Other projects already on the move, such as Senegal’s Greater Tortue/ Ahmeyim, are seeing an extension of their time- line to provide for capex cuts.
More importantly, several drilling contracts have been terminated or cancelled, or simply won’t be happening. This is the case across the continent, especially for much-awaited drilling operations like in The Gambia or Angola. On top of that, thousands of jobs could be lost in the African energy sector if the situation was to linger.
African Energy Chamber, April 07 2020
South Sudan holds talks
with OPEC to find solutions
on oil price war
While oil prices rebounded last week on hopes of successful negotiations between Saudi Arabia and Russia, they went back down again today following the negotiations’ delay. Oil prices cur- rently average $25-30 a barrel, maintaining their historic low and hurting producers around the world.
Recently appointed Minister of Petroleum of South Sudan Puot Kang had talks over the phone with Mohammed Sanusi Barkindo, Secretary General of OPEC, today, to try to find an exit out of the current crisis. Puot Kang also pledged to join the OPEC negotiations on Thursday, April 9, with the hope of reaching a favorable agreement that will stabilise the market and bring benefit to South Sudan and its producing companies.
South Sudan has been part of the OPEC Declaration of Co-operation and OPEC-plus for years and a consistent supporter of OPEC’s measures to prevent volatility and maintain market stability. Because 98% of the economy of South Sudan depends on oil production and revenue, the country is one of the hardest hit by the current crisis and prices war.
“South Sudan believes that market volatility is negative for every player in the market and hurts out ability to attract new foreign investment, diversify our economy and promote peace,” stated Puot Kang. “South Sudan is focused on boosting exploration and opening up new oil and gas fields, and the current scenario hampers our growth targets significantly,” he added.
Puot Kang notably expressed South Sudan’s willingness to work with OPEC and OPEC-plus to end the price war in any way possible.
African Energy Chamber, April 06 2020
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