The Nation Newspaper

Tag: oil production

  • Uganda to start oil production by early 2018

    Uganda is confident it will get crude out of the ground by early 2018 and start feeding it into a proposed refinery as it seeks to become a regional energy hub, government officials said.

    The government and Russia-based RT Global Resources have started negotiations about the start of construction of the $2.5 billion refinery, energy and minerals minister Irene Muloni told Platts.

    “The negotiations have started in Kampala city to conclude the project agreements to the satisfaction of both parties and Kenya has already acquired a 2.5 per cent stake in Uganda’s refinery,” Okello Oryem, minister of state for international affairs, said separately.

    Last month, RT Global Resources won Uganda’s contract to build and manage a 60,000 b/d refinery in Hoima district.

    Regional states in the East African Community asked Uganda last week to expedite formation of a national oil company and refining subsidiary as prerequisites for a special purpose vehicle to implement the refinery project.

    Although analysts have cast doubt on the viability of Uganda’s refinery project, Muloni said it remains viable and she expects global crude prices to rebound by the time production starts.

    She said oil production licenses for Tullow Oil and Total would be issued in a few weeks to allow the two companies to prepare wells.

    “We are very close to grant Tullow Oil and Total production licenses since we have OK’ed most of their field plans – in a month’s time, we could give them,” Muloni said.

     

  • ‘Rise in oil production ’ll increase govt’s revenue’

    The rise in crude oil production from 1.87 million barrels per day, in March to 1.98 million barrels per day last July should be sustained and increased to improve government’s earnings, stakeholders have said.

    Industry stakeholders including the President, International Association of Energy Economics (IAEC), Nigerian Chapter, Prof. Adeola Akinnisiju, and the President, Liquefied Petroleum Gas Association of Nigeria(LPGAN), Dapo Adesina, spoke on the issue.

    They said the country has braced all odds to increase its crude oil production, the highest since March, noting that oil theft, spills, pipeline vandalism and other activities are slowing the industry’s growth.

    Akinnisiju said Nigeria would achieve its 2.5 million barrels per day target once it is able to sustain the trend. He said the government’s earnings and the economy would improve as crude production increases.

    Government’s ability to curb criminal activities in the Niger Delta, he said, means more production and revenue for the government.

    He said the industry’s crisis has resulted in an increase in cost of production, reduction of revenues and abandonment of projects.

    He said: “I foresee a revamp of government’s revenue, resumption of activities in projects that were abandoned due to funds, and remarkable improvement in the economy if the crude oil production continues to rise. However, government must help in stopping activities that have marred oil exploration and production to achieve this goal.”

    Adesina said optimising indigenous cap abilities in areas such as drilling and floating production, storage and offloading (FSPO) fabrication and assembly must be taken into consideration if Nigeria wants to increase its crude oil production.

    “From the beginning to the end, it takes almost five years to discover oil sites, drill and carry out exploration activities. We need to start discovering more oil wells and develop them for growth. Even, if our production is three or four million barrels per day, if we do not have plans to expand our production, the figures would dwindle with time,” he added.

    He noted that the divestment in some oil blocks by the International Oil Companies (IOCs) has given indigenous operators the opportunity to explore areas that were hitherto the preserve of foreign-owned companies.

    ‘’This is the time for local operators to double their efforts and improve crude oil production,” he added.

  • Shell cites insecurity for loss in earnings, production

    Shell cites insecurity for loss in earnings, production

    Oil giant Shell Petroleum Development Company (SPDC) has explained that it suffered a loss last year because of insecurity in the Nigeria Delta.

    In its 2013 report, the Royal Dutch firm claimed that its upstream earnings and oil production as well as liquefied natural gas (LNG) equity sales volumes dropped following the worsening operating environment in Nigeria. It said production dropped in 2013 to 3,199,000 barrels equivalent per day (boe/d) from 3,262,000 (boe/d) in 2012.

    It said: “Compared with 2012, upstream earnings excluding identified items reflected higher exploration expenses, increased operating expenses, higher depreciation as well as lower liquids and LNG realisations. Earnings were also impacted by the deteriorated operating environment in Nigeria and the impact of the weakening Australian dollar on a deferred tax liability. This was partly offset by the contribution of Pearl gas-to-liquid (GTL), and higher gas realisations in the Americas.

    “Global liquids realisations were six per cent lower than in 2012. In Canada, synthetic crude oil realisations were seven per cent higher than in 2012. Global natural gas realisations were six per cent higher than in 2012, with a 27 per cent increase in the Americas and a three per cent increase outside the Americas.”

    Thefirm added: “2013 production was 3,199,000 barrels of oil equivalent per day (boe/d) compared with 3,262,000 (boe/d) in 2012. Liquids production was down six per cent and natural gas production increased by two per cent compared with 2012. The deteriorated operating environment in Nigeria impacted production volumes by some 50 thousand boe/d compared with 2012.

    “Excluding the impact of divestments, production sharing contract (PSC) price effects and the deteriorated operating environment in Nigeria, production volumes in 2013 were in line with 2012. Production volumes were impacted by higher maintenance and asset replacement activities.

    “New field start-ups and the continuing ramp-up of existing fields, in particular Pearl GTL in Qatar, contributed some 170 thousand boe/d to production in 2013.

    “Equity LNG sales volumes of 19.64 million tonnes were three per cent lower than in 2012, mainly reflecting lower volumes from Nigeria LNG due to reduced feedgas supply as a result of the deteriorated operating environment in Nigeria. Excluding the impact of the challenging operating environment in Nigeria, equity LNG sales volumes were in line with 2012”

    According to the report, the full year upstream earnings excluding identified items were $15,117 million compared with $20,107 million in 2012 reflecting a decline of $4,990 million. Identified items were a net charge of $2,479 million, compared with a net gain of $2,137 million in 2012, it added.

    The report showed that upstream earnings excluding identified items were $2,477 million compared with $4,401 million a year ago. Identified items were a net charge of $631 million, compared with a net gain of $1,801 million in the fourth quarter 2012.

     

  • ‘Libya’s oil production will increase’

    ‘Libya’s oil production will increase’

    West Texas Intermediate crude fluctuated on speculation that Libyan production will increase while a report showed that United States’ service industries expanded at the fastest pace in five months in July.

    Crude swung between losses and gains as Libyan Oil Minister Abdulbari Al-Arusi said at a press conference in Tripoli that the country, holder of Africa’s largest crude reserves, should pump 800,000 barrels a day next month from a current 700,000. The Institute for Supply Management’s U.S. non-manufacturing index increased to 56 in July from 52.2 the prior month, a report from the Tempe, Arizona-based group showed today.

    “The Libyan oil minister’s statements about the rise in oil production promptly sent the market about $1 lower,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund that focuses on energy. “The market rebounded after the better-than-expected ISM number. Anything that points to a stronger U.S. economy is good for oil demand.”

    WTI crude for September delivery declined 10 cents to $106.84 a barrel at 12:40 p.m. on the New York Mercantile Exchange. Prices earlier climbed as much as 0.7 per cent and dropped 1.2 per cent. The volume of all futures traded was 36 per cent below the 100-day average.

    Brent oil for September settlement decreased 17 cents to $108.78 a barrel on the London-based ICE Futures Europe exchange. Volume was 19 per cent below the 100-day average. The European benchmark traded at a $1.94 premium to WTI, down from $2.01 on August 2.

    Libyan crude output tumbled 330,000 barrels to 800,000 barrels a day in July, a Bloomberg survey showed. It was the fourth straight decline and sent production to the lowest level since December 2011.

    “The fact that some Libyan production is coming back is reducing upward pressure on the market,” said Tom Finlon, director of Energy Analytics Group LLC in Jupiter, Florida.

    The North African country reopened an oil port closed by protests last week. All but one of Libya’s oil export harbors was shut last week because of a labor dispute. The Marsa el Hrega and Zawiya ports are operating while Es Sider, Ras Lanuf, Marsa Brega and Zueitina remain closed, Naji Mokhtar, head of the parliamentary energy committee, said August 3 in a telephone interview from Tripoli.

    “Some Libyan barrels are back on board and it looks like there is more to come,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.

    The Organisation of Petroleum Exporting Countries (OPEC) member has lost an estimated 4.5 million barrels of crude and 190,000 barrels of condensate shipments, Goldman Sachs analysts including Jeffrey Currie said in a research note dated August 2.

  • ‘Oil production in Nigeria costs 40% more’

    ‘Oil production in Nigeria costs 40% more’

    The Chief Executive of Seplat Petroleum Development Company Limited, Austin Avuru, an indigenous independent oil production and exploration company, has lamented the high cost of oil production and exploration in Nigeria. He said it costs 40 per cent more to produce than in other countries.

    Avuru, who spoke during the Petroleum Technology Association of Nigeria’s investment forum at the on-going Offshore Technology Conference in Houston, Texas, said high production cost is a serious disincentive to indigenous marginal operators.

    During the panel session, which focused on the Petroleum Industry Bill (PIB) and its challenges, he noted that the majority of the stakeholders had focused on fiscal terms of the bill, while neglecting the high cost of exploring and producing oil in the country.

    He said: “Today, the cost of oil exploration and production in the country is 40 per cent higher that what it should be. We want a PIB that will address this issue.”

  • Ghana’s oil production exceeds 105,000 bpd

    Oil production from Ghana’s Jubilee Oil Field is now in excess of 105,000 barrels per day (bpd), one of the partners, Kosmos Energy, has announced.

    According to Daily Graphic reports, the lead operator on the Jubilee Field, Tullow Oil, in a report last week, said production had reached 90,000 bpd because the much anticipated Jubilee Phase 1A project had finally come on stream.

    It said production on the Phase 1A was now at a rate of 16,500 bpd boosting total output on the field to 90,000 bpd.

    In its update on the company’s global operations, Kosmos Energy said production was in excess of 105,000 bpd.

    The two figures from Kosmos Energy and Tullow Oil are indicative that production levels on the field seem to have improved again.

    When Ghana begun the commercial production of oil in December 2010, it was expected to produce 120,000 bpd but that could not materialize as a result of some technical challenges in the oil-producing wells.

  • NPDC’s oil production hits 130,000 bpd

    NPDC’s oil production hits 130,000 bpd

    Crude oil production by the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of the Nigerian National Petroleum Corporation (NNPC) has hit 130,000 barrels per day (bpd).

    The Group Managing Director of NNPC, Mr Andy Yakubu, disclosed this through the Managing Director of the National Engineering and Technical Company Limited (NETCO), a subsidiary of NNPC, Mr.IshakuAbdullahi, at the just-concluded Lagos International Trade Fair.

    He identified sustained amnesty programme of the Federal Government and the re-entry into the abandoned fields and facilities by the company as a major factor responsible for the improvement in the production.

    He said: “With the return of peace in the oil-producing Niger Delta due to the amnesty programme, the NPDC re-entered abandoned oil fields and resumed production. This has positively impacted on the NPDC’s growth aspiration with current crude oil production now averaging about 130,000barrels per day.”

    Yakubu said abandoned assets of the NNPC/Shell Joint Venture had also been reactivated and production ramped up on the divested Shell’s assets. He noted that the NNPC was also implementing a robust programme aimed at drastically reducing the development costs of both joint venture and Production Sharing Contract (PSC) projects in order to increase government’s take from oil revenues.

    He said the corporation had acquired three-Dimensional Seismic data gathering equipment as part of efforts of the Federal Government to increase the country’s crude oil reserves through increased exploration in the Inland Basins, especially in the Chad Basin.

    The NPDC has its head office in Benin in Edo State and base offices in Port Harcourt and Warri. It was established in 1988 as a wholly owned subsidiary of the NNPC. Its operations are concentrated mainly in the Niger Delta and span five States – Imo, Edo, Delta, Bayelsa and Rivers.