..As Oil Prices Hit Over $50 Per Barrel
Yemisi Izuora
Prices of crude oil has hit $50 per barrel just as export from Nigeria increased with Lekoil showing some improvement in production.
LEKOIL, an oil and gas exploration, development and production company disclosed that the first crude cargo produced from the Otakikpo Marginal Field in OML 11 has been lifted from the FSO AilsaCraig by Shell Western Supply and Trading Limited, a subsidiary of Royal Dutch Shell.
According to the company, “120,000 barrels of gross production have been lifted. Under the terms of the Crude Sales Agreement with Shell Trading, the Company is due to receive its payment for this crude within the next month.
“Current production at Otakikpo is approximately 5,000 bopd. With the commencement of regular liftings, the Company is focused on ramping up to production of 10,000 bopd, now expected to be by year-end. Key components to achieve this Phase 1 milestone involve completing the expansion of onsite storage capacity – currently being undertaken with minimal capex required – and utilising a higher capacity shuttle tanker.
“Non-operational days from the minor reconfiguration and optimization of offshore infrastructure has led to average production of approximately 3,000bopd from the four production strings across both wells (Otakikpo-002 and -003)since the start of commercial production, announced on 20 February 2017.”
Lekan Akinyanmi, LEKOIL’s CEO, said: “Selling our first oil marks the commencement of cash flow from Otakikpo. Dollar receipts will increase as we further ramp up production to our Phase 1 target of 10,000 bopd and will contribute to funding Phase 2 expansion.”
“The production and now offtake and export sale from the FSO Ailsa Craig is the culmination of our team’s hard work over the last two years to bring Otakikpo into revenue generating production. I would again like to thank the entire team that has worked so hard on this project, our partner Green Energy, FSO owner and operator Amni, our contractors, our host communities and our government regulators for their continuing support,” he added.
Investigations showed that the rise in prices coincide with the making of additional export from Nigeria.
Nigeria’s Bonny Light and other crude oil grades have risen from $49 per barrel to over $50 per barrel in the global market following a significant drop in the inventories of United States.
A survey of the oil markets showed that the price of Brent, usually used to benchmark other crude oil grades rose from $46 to $50.42 per barrel.
It also showed that the prices of WTI and the Organisation of Petroleum Exporting Countries, OPEC Basket stood at $47.54 and $46.87 per barrel respectively.
According to OPEC, “The price of OPEC basket of thirteen crudes stood at $46.83 a barrel on Tuesday, compared with $46.87 the previous day, according to OPEC Secretariat calculations.
“The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela),” it stated
The American Petroleum Institute reported a fall in U.S. crude inventories by 5.8 million barrels last week, which was more than the 1.8 million-barrel slide analysts predicted.