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NIGERIA

The Group Managing Director of the Nigerian National Petroleum Company (NNPC), Alhaji Mele Kyari attended the launch of the World Bank Nigeria Development Update November 2021 edition with the theme ‘Time for Business Unusual’ in Abuja. Alhaji Kyari hinted that a litre of fuel could sell between $0,78 (N320) and $0,83 (N340) in 2022 as subsidy removal is set to be achieved next year. He noted that there will be no provision for subsidy legally after the passing of the Petroleum Industry Act and therefore engage in a process that will ensure that the removal of subsidy is done most subtly and easily.

The Minister of Finance, Budget and National Planning, H.E. Zainab Shamsuna Ahmed also further corroborated that the Federal Government would remove the fuel subsidy in the coming year and replace them with $12,16 (N5000) a month voucher for transportation to between 20 million and 40 million of the poorest Nigerians. The Minister said the subsidy regime in the (oil) sector remains unsustainable and economically disingenuous.

The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva will visit the Bayelsa community affected by a recent oil spill caused by a blown wellhead in the Santa Barbara South field and assess the degree of the havoc caused by the incident. Minister Sylva disclosed this while speaking to correspondents after meeting with the President of Nigeria, H.E. Muhammadu Buhari. The spillage in OML 29, jointly owned by Aiteo Eastern Exploration and Production Company and NNPC had caught the attention of the President and had given an order to the ministry to ascertain the level of damage done at the site and begin to assess how to reduce the level of environmental degradation issues. The Minister will report back to the President after his visit.

GHANA

Oil and gas companies Tullow Oil and PetroSA have decided to pre-empt the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields offshore Ghana to Kosmos Energy. In October, Kosmos said it had acquired an additional 18.0% interest in the Jubilee field and an additional 11.0% interest in the TEN field in Ghana from Occidental Petroleum (“OXY”) $550 million, increasing its interest in Jubilee to 42.1% and in TEN to 28.1%. The transaction was subject to a 30-day pre-emption period, which, if fully exercised, could reduce Kosmos’ ultimate interest in Jubilee by 3.8% to 38.3% and in TEN by 8.3% to 19.8%.

Kosmos said it had been notified by Tullow Oil plc and PetroSA that they intended to exercise their pre-emption rights concerning the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields in Ghana to Kosmos. Kosmos said: “The exercise of pre-emption rights is subject to finalizing definitive agreements with Kosmos/Anadarko WCTP Company and requires approval from GNPC and the Ghanaian Ministry of Energy,” In a separate statement, Tullow said that post-completion, it is anticipated that Tullow’s equity interests would increase to 38.9% in the Jubilee field and to 54.8% in the TEN field.

GLOBAL

On November 25, crude oil prices edged lower in depressed trade as the market used the U.S. Thanksgiving Day holiday to take a breather ahead of next week’s key Organization of Petroleum Exporting Countries and allies (OPEC+) meeting. The U.S. West Texas Intermediate crude futures were down 0.7% at $77.86 a barrel, while Brent crude futures were down 0.6% at $81.79 a barrel at 5:10 AM ET (10:10 GMT). The U.S. Energy Information Administration’s weekly report for November 24 showed an increase in crude oil inventories by 1.0 million barrels for the week ending November 19.

The OPEC+ group is due to meet on December 2, under pressure to respond to a coordinated signal from the world’s biggest buyers that prices are too high. So far, the group has not indicated any shift in its output policy. OPEC had already warned of the global market tipping back into surplus in early 2022 and noted on Thursday that the planned release of strategic reserves by the U.S. and others would equate to a global supply increase of around 1 million barrels per day (bpd). OPEC+ has pledged to restore the output it cut at the start of the pandemic in monthly increments of 400,000 bpd. In recent months, it has struggled to meet that commitment due to production difficulties in members such as Nigeria and Angola. Some now see that pledge as subject to review. The U.S. intends to hold regular auctions of barrels from its Strategic Petroleum Reserve between January and April 2022.