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Shell Sets New Record on Nigerian Content with Local Refurbishment of Subsea Tree

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Shell Nigeria Exploration and Production Company (SNEPCo) achieved significant savings in the cost of subsea equipment through an initiative which has seen the refurbishment of five Subsea Trees in-country led by Nigerian engineers, thus setting a new record in the federal government’s local content policy in the oil and gas industry.

The Nigerian Oil and Gas Industry Content Development Act of 2010 seeks to domesticate a large chunk of oil and gas industry jobs within Nigeria to build local capacity and capability, curb capital flight and boost the country’s economy.

A Subsea Tree is an arrangement of valves and other components installed at the wellhead to control and monitor crude oil and gas production and injection flow.

SNEPCo embarked on a Tree Refurbishment initiative in 2013 to ensure timely delivery of the equipment at lower cost for the Bonga Phase 2 project, which comprises drilling and hook-up of in-field wells within Bonga.

The Managing Director of SNEPCo, Mr. Bayo Ojulari said in a statement at the weekend that apart from saving costs, his company embarked on the local refurbishment to help local engineers to acquire skills

“Beyond cost consideration, we were also looking to indigenise the know-how so that Nigerian engineers can acquire the necessary skills. We are pleased with this success story. The first Subsea Tree under the programme was installed on schedule in May 2015. This was the first of its kind re-using a Subsea Tree fully stripped down and refurbished locally in Nigeria, with all of its original functionality restored,” said Ojulari.

SNEPCo saves about $6 million for every refurbished Subsea Tree, and this is delivered within 15 months as against 36 months for newly manufactured ones.

SNEPCo’s Engineering Manager in charge of Subsea and Pipelines, Mr. ‘Debo Oladunjoye, who led the refurbishment team described the scope of work to entail “the retrieval of Subsea Trees for disassembly, repair and rebuild following procedures developed by the Original Equipment Manufacturer (OEM) to international standards and codes”.

“The work is done at the OEM/SNEPCo logistics base at Onne in Rivers State with Nigerian engineers and technicians playing key roles. The expenditure on this work in Nigeria aligns with the cost of similar Subsea Tree refurbishment in Europe. We are currently refurbishing three Subsea Trees,” Oladunoye added.

SNEPCo helped to create the first generation of Nigerian deep water professionals through the Bonga project which started production in 2005, as Nigeria’s first deep water oil and gas production project in more than 1,000 metres of water.

To sustain production and keep the Bonga Floating Production Storage Offloading (FPSO) vessel full, additional in-field wells have been delivered as part of the Bonga Phases 2, 3 and Bonga North West projects, all producing through the Bonga FPSO.

SNEPCo operates Bonga field on behalf of the Nigerian National Petroleum Corporation (NNPC) in partnership with Esso Exploration and Production (Deepwater Ltd)–Exxon, Total E&P Nigeria Ltd – Total and Nigerian Agip Exploration Ltd – ENI.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

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Gold

Gold Gained Ahead of Joe Biden Inauguration 2021

Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.

The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.

According to Michael McCarthy, the Chief Market Strategies, CMC Markets, the surged in gold price is a result of the projected drop in dollar value or uncertainty.

He said, “The key factor appears to be the (U.S.) currency.”

As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.

Also, the effectiveness of the vaccines can not be ascertained until wider rollout.

Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.

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Crude Oil

Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

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Crude Oil Holds Steady Above $55 Per Barrel on Tuesday

Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.

Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.

While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.

On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”

“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.

Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.

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Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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