Market Report: BW Energy Brings the Gamba Well DTM-7H Online in the Tortue Development

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GABON

BW Energy has brought online the Gamba well DTM-7H as part of the Tortue Phase 2 field development in Gabon. The final well, DTM-6H, in the Dentale formation, is scheduled to come onstream soon. Current production before the two new production wells is around 11,500 barrels of oil per day (bpd). The Tortue development consists of six production wells tied back to the FPSO BW Adolo. The Tortue Phase 2 development consists of four production wells tied back to the FPSO. In 2020, the company brought online the DTM-4H Gamba and DTM- 5H wells, but the completion of the DTM-6H and DTM-7H wells was suspended due to the COVID-19 pandemic.

BW Energy further said that the overall production cost included approximately $1.5 million of costs related to the continued handling of the COVID-19 pandemic through the period. BW energy also reported that third-quarter revenue should reflect about 195,000 barrels of quarterly Domestic Market Obligation deliveries with an under-lift position of around 203,000 barrels at the end of the period. BW Energy had a cash balance of $170 million on September 30, 2021, compared to $216 million on June 30, 2021. The company said the decrease was mainly due to investment activities related to Tortue Phase 2, progress on the Hibiscus/Ruche project, and completing the exploration drilling campaign in Dussafu.

NIGERIA

The Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, has announced that the Department of Petroleum Resources and the Petroleum Pricing Regulatory Agency, as well as the Petroleum Equalization Fund, will be replaced with the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority. This in line with the implementation of the Petroleum Industry Act signed into law by President Muhammadu Buhari.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Mele Kyari has engaged critical stakeholders to find lasting solutions to the road network challenges faced in the country. Alhaji Kyari noted that the stakeholder involvement was in line with the Corporation’s effort in sustaining the current smooth supply and distribution of petroleum products nationwide. Kyari noted that the stakeholders have agreed on a framework that would enable NNPC’s intervention in critical road rehabilitation through the Federal Government Tax Credit Scheme, pledging to support the PTD and NARTO in carrying out quick intervention fixes on some strategic bad spots identified to enable unhindered movements of trucks for transportation of petroleum products nationwide.

The GAMBIA

PetroNor received an extension from the Government of The Gambia to progress its ongoing discussions over its A4 offshore license with potential partners. The Gambian government granted PetroNor a one-year extension to the Longstop date of the A4 offshore license until October 18, 2022. In 2020, the company announced a settlement agreement with The Gambia resulting in the reinstatement of the A4 license to PetroNor, which was granted for one year, ending September 18, 2021. PetroNor has said that the A4 license is located within the same proven play trend as Senegal and Woodside’s Sangomar field, “a play which is expected to extend southward into The Gambia.” Back in 2015, PetroNor added that independent petroleum consultant ERC Equipoise had prepared an updated assessment of prospective oil resources attributable to the company’s Gambian license. The assessment in conjunction with the management update estimated the net un-risked mean prospective oil resources of A4 at approximately 2 billion barrels of oil.

GLOBAL

On October 21, crude oil prices fell from their recent highs amid signs that countries are getting to grips with the shortages that have sent alternative fuel prices skyrocketing in recent weeks. The U.S. West Texas Intermediate crude futures settled down 92 cents at $82.50 per barrel, while Brent crude futures settled down $1.21 at $84.61. The U.S. Energy Information Administration’s weekly report for October 20 showed that crude oil inventories rose by 431,000 barrels in the week ending October 15 against analysts’ forecasts of a 1.857-million-barrel build, while a 6.088-million-barrel build was reported in the previous week.

Oil came under pressure from a drop in coal and natural gas prices. In China, coal fell 11%, extending losses this week since Beijing signaled it might intervene to cool the market. Still, some analysts called for oil to rally further as Organization of the Petroleum Exporting Countries and allies (OPEC+) is likely to stick to its plan for gradual output increases while demand might reach pre-pandemic levels. Oil prices were also down as China, India and others as consumers fought back against high energy prices that could ruin their economies with runaway inflation.

Earlier in October, OPEC+ said it will not add more than the 400,000 bpd increase it had committed to previously, despite a global supply squeeze that has sent prices to seven-year highs. However, the tightening supply has meant an increase in prices, with OPEC sticking to its planned slow increase in supply. Oil refiners are increasing output to meet demand increases across Asia, Europe, and the U.S., but plant maintenance and high natural gas prices will likely constrain supply in the fourth quarter of 2021.

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