Oil and Gas News

Crude oil prices fell $4.52 overnight to $41.60 per barrel

A brief rally in crude oil prices cooled down with prices dropping sharply on the New York Mercantile Exchange Today.
Crude oil prices fell $4.52 overnight to $41.60 per barrel as a brief price run-up faded.

Saudi Arabia’s Al-Naimi says $75 a barrel would be the right price per barrel. Iran’s President Mahmoud Ahmadinejad said last year that $115/b represented good value for such a “strategic commodity” and the country’s Opec representative, Ali Khatibi, has talked of $70-100/b as a “minimum”. President Hugo Chávez of Venezuela considers $80-100/b to be reasonable. Iraq’s oil minister Hussein al-Shahristani likes the look of $80/b.

According to the Institute of International Finance, even if crude prices were to average $56/b in 2009, real GDP growth for the countries in the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – would fall from 5.7% in 2008 to 3.6% this year.

US oil and gas drilling expenditures soared to a record $226.4 billion in 2007, more than doubling the previous record of $109.8 billion a year earlier, the American Petroleum Institute said on Jan. 5. API said the Joint Association Survey of Drilling Costs for 2007, the latest year for which figures are available, showed that records also were set in average costs per well and per foot. Average costs per US oil well grew 82% to $4 million in 2007 from $2.2 million, while per foot costs climbed 78% year-to-year to an average of $717 from $412, according to API. It said that average costs per domestic natural gas well rose 105% to $3.9 million in 2007 from $1.9 million in 2006 as average costs per foot grew 74% year-to-year to $604 from $348. Total oil well expenditures jumped 94% to $72.3 billion in 2007 from $37.3 billion in 2006, while gas well expenditures grew by nearly 101% to $119.1 billion from $59.3 billion, API said.

Nigeria’s oil exports in Feb fall vs Dec after OPEC cut

Nigeria is expected to export 1.66 million barrels per day (bpd) of oil in February, steady from January and down 12 percent from December, following OPEC deals to cut output, traders said on Wednesday. February exports are mostly unchanged from the anticipated 1.65 million bpd in January, and down from 1.88 million bpd in December due to a combination of shipment delays, cancellations and OPEC supply curbs. The lower shipment schedule versus December from the major African oil exporter adds to signs that members of the Organization of the Petroleum Exporting Countries are following through on deals to bolster prices. At a meeting on December 17, OPEC set Nigeria a target to cut production by 320,000 bpd from September 2008 levels starting on January 1, implying a new output limit of 1.67 million bpd, as part of an OPEC accord to remove 2.2 million bpd from world markets.

That came on top of two OPEC agreements since September to lower output by 2 million bpd. State-run Nigerian National Petroleum Corp. had informed customers it would reduce exports following the earlier agreements. By cutting output, the 12 OPEC members were aiming to build a floor under prices that have dropped by $100 from a July record high above $147 a barrel. Delays and cancellations as a consequence of militant attacks in the Niger Delta, has reduced output in Nigeria by a fifth in the last three years. Italian oil and gas group Eni SpA said on Monday the closure of a pumping station in Nigeria following a spillage incident had reduced oil production by 12,000 bpd. Eni had declared force majeure on its Brass River oil production in December. In February, three full cargoes and two smaller shipments of Brass River are expected to be loaded, down by around 50,000 bpd from December. Nigeria’s benchmark Bonny Light crude oil has already been under force majeure indefinitely due to underproduction caused by sabotage attacks on oil pipelines run by Royal Dutch Shell. Traders said they expected three cargoes of Bonny Light to be loaded in February, while Nigeria’s other benchmark grade Qua Iboe is expected to ship nine cargoes, or around 305,000 bpd. On Wednesday, armed men attacked an oil platform belonging to ExxonMobil off the southern Nigerian state of Akwa Ibom, although traders said they did not expect the attack to affect the production of the Qua Iboe crude pumped at the site.

Oando Snags Interest in Akepo Field

Oando Exploration and Production Limited (OEPL), the upstream arm of Oando PLC, Nigeria’s leading integrated energy solutions provider, has announced the acquisition of 75% interest in Exiles Resources’ 40% working interest in the Akepo Field through the signing of a Financial and Technical Services Agreement on October 23, 2008. Under the terms of the Agreement that is structured in two stages, Oando will re-imburse Exile’s past expenses on the Akepo Field, and finance the development  of the project, in return for taking 75% of Exile’s current economic interest in the project. This will see Oando own 30% Equity stake in the entire project, subject to the approval of the relevant Authorities, and Sogenal Limited, the Operator. Tunde Ogunnaike, Chief Executive Officer, OEPL, commented, “We are excited about this acquisition as it is in line with our plans to boost our portfolio with near term oil and gas assets.

 
Explosion cuts Nigeria’s daily oil output by 12,000 barrels

An Eni SpA official says an explosion that damaged one of its pipelines in Nigeria’s restive south has trimmed the country’s daily oil output by 12,000 barrels. A spokeswoman for the Italian energy giant who spoke on condition of anonymity Monday in line with company policy said technical inspections are under way.

The official said Eni’s share of the lost output totaled 2,400 barrels per day. International energy companies generally operate in Nigeria under joint venture agreements with the government and other energy firms. It was not clear when production would resume. The pipeline was blown up with dynamite late Friday. Attacks on oil industry infrastructure in the past two years have slashed oil output by almost a quarter in Nigeria, Africa’s top crude producer.
 
Nigeria’s foreign reserves fall by 8.2%, oil output to drop to 1.58mbpd 
  
The nation’s foreign currency reserves fell 8.2 percent in December to $52.7 billion as global oil prices tumbled. According to the Central Bank of Nigeria (CBN) on its Web site,
reserves in the month to Dec. 29 dropped from $57.4 billion in November, Record oil prices have helped Africa’s biggest oil producer build the largest currency reserves in sub-Saharan Africa. But oil prices have since plummeted below the $45 benchmark for the 2009 federal budget. Foreign investors seeking safety amid the global credit crunch have withdrawn money from the country, leaving the central bank as “the only source” of foreign exchange, said Fola Fagbule, head of research at Afrinvest West Africa Ltd., a Lagos fund manager.

The naira currency has declined more than 14 per cent in the past month after the central bank cut the amount of dollars sold to local banks at its twice-a-week foreign currency auction.
 
Meanwhile, following the decision by the Organization of Petroleum Exporting Countries (OPEC) to cut production by an additional 2.2 million barrels per day, Nigeria will produce about 1.584 million barrels of crude oil per day by January 1, 2009, as against the 2.29 million barrels per day production estimated in the 2009 budget.

Nigeria, Africa’s most populous nation, has the continent’s biggest hydrocarbon reserves, with more than 30 billion barrels of crude oil and 187 trillion cubic feet of gas. The country is the fifth-largest source of U.S. oil imports.

According to local media reports, oil money accounts for more than 95 percent of Nigeria’s export gains and over 80 percent of the federal government revenues, contributing to approximately 30 percent of the Africa’s most populated country’s total GDP.

Tags: $41.60 per barrel, Crude Oil, hydrocarbon reserves, Nigeria’s export, overnight, prices fell $4.52