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Three Months After Force Majeure, ExxonMobil Resumes Export

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Mobil Producing Nigeria Unlimited, a unit of ExxonMobil, will resume shipment of Qua Iboe crude, Nigeria’s largest grade of crude oil in October, three months after the company had declared force majeure on the exports of the grade.

This is coming as oil prices slumped three per cent Tuesday following another gloomy prediction by the International Energy Agency (IEA) on demand growth that suggested that oversupply in the oil market might persist for longer than anticipated.

ExxonMobil had declared the force majeure after it observed a leak caused by what it described as a “system anomaly” during a routine check of its loading facility on July 14, this year.

The cause of the leak was not clear, but the force majeure came just days after a militant group, the Niger Delta Avengers (NDA), claimed to have bombed the company’s 48-inch Qua Iboe crude oil export pipeline on July 11.
But 24 hours after the claim by the militants, the company’s spokesperson, Todd Spitler, debunked the claim, saying “there was no attack on our facilities.”

However, citing industry sources, Reuters reported that the company is offering an October-loading cargo of Qua Iboe crude oil, the first offer since the company declared the force majeure.

It was not clear if the pipeline had been repaired, or if the company expected it to be back on stream in time to load crude in October.

But the cargo is offered for October 8-16 loading at a premium of $1.80 per barrel to dated Brent.

A spokesman for Exxon said the force majeure remained in effect but did not give a timeframe on the resumption of operations.

While ExxonMobil said at the time it declared force majeure that the export terminal was operating, traders said the company did not release a revised loading schedule for the crude exports.

The last ship to load crude at the Qua Iboe terminal was the Ottoman Nobility on July 9.

One of the three other ships scheduled to load the crude had been near the terminal since July 12.

A vessel loads one million barrel of the grade every three to four days, and exports of 250,000 barrels per day aboard eight vessels were scheduled for July.

Before it declared a ceasefire recently, the Avengers had warned that if the company moved forward with repairs “something big…will happen,” and threatened to attack the company’s workers, instead of blowing up its facilities.

Shell-operated Forcados crude oil exports were halted since the Avengers attacked its subsea pipeline in February.

In a related development, oil prices fell tuesday on concerns over increased drilling in the United States and as investors took profits after oil prices rose close to one per cent in the previous session.

While the Brent crude was down $1, or 2 per cent, at $47.32 a barrel, the US West Texas Intermediate crude fell $1.25, or 2.7 per cent, to $45.04.

The IEA, energy adviser to over 26 industrialised countries, said a sharp slowdown in global oil demand growth, coupled with ballooning inventories and rising supply, means the crude market would be oversupplied at least through the first six months of 2017.

IEA’s gloomy forecast came a day after OPEC also predicted oversupply in the oil market in 2017.

IEA’s prediction contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.

The IEA’s latest comments follow a surprisingly OPEC’s bearish outlook published in the cartel’s monthly Oil Market Report (OMR) on Monday.

Oil traders were quoted as saying that the price falls were an indication that increasing oil drilling activity in the United States was still a concern.

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.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 

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Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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