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NEMBE SPILL: AITEO Mobilizes To Clean Up SBAR SPILL, Collaborates With Renowned ‘BOOTS & COOTS, CNA

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• CEO, Benny Peters Assures Affected Communities of Speed, Ecosystem Protection.

Two weeks after a non-producing wellhead in the NembeLocal Government Area of Bayelsa State leaked and is still spewing its contents, the operators of the NNPC/Aiteo Joint Venture of Oil Mining Lease (OML) 29, Aiteo Eastern Exploration and Production Co. (AEEPCo), have announced several proactive measures to combat and contain the spill.

The wellhead, located in the Santa Barbara Southwest field in Nembe LGA, was, according to AITEO, predominantly dormant. The leak started on November 5. According to Ndiana Mathew, spokesperson for AITEO, said that upon noticing the leak, “Aiteo notified all relevant regulatory agencies and, thereafter, mobilised containment resources to limit the impact on the environment. As required, Aiteo promptly called for a Joint Inspection Visit (JIV). Due to the high-pressure effusion, the JIV team could not reach the location and that inspection was aborted.”

“Since then, Aiteo has activated an elaborate and extensive spillage containment response in the internationally prescribed manner. Though spills of this nature are not uncommon to the oil and gas industry, their resolution requires expert skill and equipment that is not routinely or readily available. The typical process is to first kill the well and stop the leak and then focus on the clean-up.”

Mathew said further that aside from the urgent possible technical responses to contain the leak, Aiteo has sought, become involved with and is now in active collaboration with Clean Nigeria Associates (CNA) which has since mobilised to site in addition to Aiteo internal resources to reinforce containment and recovery efforts. CNA is the oil and gas industry non-profit umbrella body with expertise and resources to contain spills of this nature. Because it was causing growing anxiety among the local communities that rely on the surrounding land and waterways, the area has been cordoned off and the CNA is mobilising additional resources to strengthen the containment effort.

It was gathered that a well-killing assessment site visit has been carried out to evaluate the assets and earmark the resources required to bring the effusion under control. The required apparatus including heavy-duty and specialist equipment are presently being mobilized, locally and internationally, on a fast-track basis, to bring the well under control. For this purpose, “Aiteo has on-boarded the involvement of the renowned Boots & Coots, arguably the leading well control company in the world, working with a local resource. Upon this intervention and conclusion, it is expected that the persistence of the leak alongside its functional consequences will be abated and significantly diminished,” Mathew stated.

Also, senior personnel of AITEO have visited the affected communities and made available, for the use of the communities, relief materials aimed at ameliorating the direct consequences of the incident. At Opu-Nembe Kingdom where the Aiteo delegation was received by the traditional ruler, His Royal Majesty, Dr Biobelemoye Josiah Ogbodo VIII, his council of chiefs and foremost indigenes and government officials, the King said, “We are happy that Aiteo has initiated this visit to support the community at this time and urge it to continue to work with us as partners in progress on its corporate goals in the community.”

Similarly, the Aiteo Group CEO, Mr Benedict Peters, has extended his assurances to the affected communities affirming, “We are doing everything in our power to contain this spill and ameliorate the situation as rapidly, safely and responsibly as possible. We have mobilized best-in-class resources and expertise to put this mishap behind us. Be rest assured of our resolve to limit the escape of oil and protect the ecosystem from its effects.”

In the statement signed by Mathew, the company averred that it remains committed to ensuring immediately that the circumstances are brought under better control and ascertaining the immediate and remote causes of the leak.

Furthermore, “It is important that we affirm our preliminary view based on our assessment of the proximate circumstances that it will be difficult to exclude deliberate tampering of the well by oil thieves attempting to siphon crude directly from the wellhead. In our view, sabotage remains the most imminent cause of this incident,” the company stated.

“Oil theft and asset vandalism continue to present the biggest challenge we face in the operations of oil and gas production in the Niger Delta area. It has continued to damage the production profile of oil producers in so many ways.

As we commend the relevant security agencies with whom we interface to combat this menace, we believe the need and capacity to provide significantly more remain overwhelmingly critical especially because there is so much more to be done to realign the architecture of the delivery infrastructure of oil and gas production in Nigeria in line with the current industry structure of multiple producers operating assets that were previously built and managed by one producer.”

The company reiterated that it feels deeply concerned about the incident and that the circumstances and fortunes of the immediate community remain its most anxious consideration, which it stated had assumed the highest priority alongside making safe the well and its immediate environs.

“It is our fervent desire that in the attainment of this intensely challenging objective, the interests of the proximate community continue to be safeguarded in every material respect by the collective efforts of our company and all the industry professionals whose involvement Aiteo has convoked,” the statement concluded.

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Global Oil Prices Appreciate to $77.85 After Saudi Announces Plan to Cut Production

Global oil prices appreciated on Monday morning following Saudi Arabia’s announcement that it will cut crude oil production by 1 million barrels per day (bpd) from the month of July to curb global economic headwinds weighing on the market.

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Global oil prices appreciated on Monday morning following Saudi Arabia’s announcement that it will cut crude oil production by 1 million barrels per day (bpd) from the month of July to curb global economic headwinds weighing on the market.

Brent crude oil, against which Nigerian oil is priced, rose by $1.72, or 2.3%, to $77.85 a barrel by 10:48 am Nigerian time while the U.S. West Texas Intermediate crude also climbed by $1.72, or 2.4%, to $73.46.

Both crude oils gained more than 2% on Friday after the Saudi energy ministry announced that the top exporter would reduce output from 10 million bpd in July to 9 million bpd in May 2024. The biggest of such reduction in years.

The voluntary cut is on top of a broader deal by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia to limit supply into 2024 as the OPEC+ producer group seeks to boost flagging oil prices.

OPEC+ pumps about 40% of the world’s crude and has cut its output target by a total of 3.66 million bpd, amounting to 3.6% of global demand.

“Saudi remains keener than most other members in terms of ensuring oil prices above $80 per barrel, which is essential for balancing its own fiscal budget for the year,” said Suvro Sarkar, leader of the energy sector team at DBS Bank.

“Saudi will probably continue doing whatever it takes to keep oil prices elevated … and take calculated pre-emptive steps to ensure the macro concerns potentially affecting demand are negated.”

Consultancy Rystad Energy said the additional Saudi cut is likely to deepen the market deficit to more than 3 million bpd in July, which could push prices higher in the coming weeks.

Goldman Sachs analysts said the meeting was “moderately bullish” for oil markets and could boost December 2023 Brent prices by between $1 and $6 a barrel depending on how long Saudi Arabia maintains output at 9 million bpd over the next six months.

“The immediate market impact of this Saudi cut is likely lower, as drawing inventories takes time, and the market likely already put some meaningful probability on a cut today,” the bank’s analysts added.

Many of the OPEC+ reductions will have little real impact, however, as the lower targets for Russia, Nigeria and Angola bring them into line with their actual production levels.

In contrast, the United Arab Emirates (UAE) was allowed to raise output targets by 200,000 bpd to 3.22 million bpd to reflect its larger production capacity.

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Global Oil Prices Surge as US Lawmakers Suspend Debt Ceiling

Global oil prices appreciated on Friday after the United States lawmakers voted to have the country’s debt ceiling suspended for the next two years.

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Global oil prices appreciated on Friday after the United States lawmakers voted to have the country’s debt ceiling suspended for the next two years. On the final vote, 149 Republicans and 165 Democrats backed the measure, while 71 Republicans and 46 Democrats opposed it.

Brent crude oil, against which Nigerian oil is priced, rose by 77 cents, or 1% to $75.05 a barrel by 9 am while U.S. West Texas Intermediate crude (WTI) was up 69 cents, or 1%, at $70.79.

Markets were reassured by a bipartisan deal to suspend the limit on the U.S. government’s $31.4 billion debt ceiling, which staved off a sovereign default that would have rocked global financial markets.

Earlier signals of a potential pause in rate hikes by the Federal Reserve also provided support to oil prices, not least by weighing on the U.S. dollar , making oil cheaper for holders of other currencies.

Investor attention is now fixed on the June 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, collectively called OPEC+.

OPEC+ in April announced a surprise cut of 1.16 million barrels per day in April, but the gains from that move have since been retraced and prices are below pre-cut levels.

But signals on any fresh cut have been varied, with Reuters reporting and bank analysts indicating that further output cuts are unlikely.

On the demand side, the U.S. Institute for Supply Management (ISM) said its manufacturing PMI fell to 46.9 last month, the seventh-straight month that the PMI stayed below 50, indicating a contraction in activity.

Manufacturing data out of China painted a mixed picture. Thursday’s better-than-expected Caixin/S&P Global China manufacturing PMI contrasted with the previous day’s official government data that reported factory activity in May had contracted to the lowest level in five months.

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Weak Chinese Data Weighs on Oil Prices Today

Oil prices declined by 2% on Wednesday as weak Chinese data and a stronger United States dollar dragged on commodity prices.

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Oil prices declined by 2% on Wednesday as weak Chinese data and a stronger United States dollar dragged on commodity prices.

Brent crude oil, against which Nigerian oil is priced, dipped by $1.75, or 2.37%, to $71.96 a barrel at 3:46 pm while U.S. West Texas Intermediate crude (WTI) shed $1.90, or 2.74%, to $67.56.

The decline in prices was caused by weak Chinese manufacturing activity. The data released by the Chinese government showed that activity in the sector contracted faster than expected in May with the official manufacturing purchasing managers’ index declining from 49.2 posted in April to 48.8 in May, below the 49.4 predicted by economists.

Also, the strong U.S. dollar is another factor impacting the purchase of crude oil as buyers holding foreign currencies found it too expensive.

The U.S. dollar index, which measures the greenback against six major peers, saw support from cooling European inflation and progress on the U.S. debt ceiling standoff, which will advance to the House of Representatives for debate on Wednesday.

Market players are preparing for the upcoming June 4 meeting of OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia.

Mixed signals by major OPEC+ producers on whether or not the group will decide to further cut oil production have sparked recent volatility in oil prices.

Despite the latest pullback in prices, HSBC and analysts do not expect OPEC+ to announce further cuts in the upcoming meeting.

HSBC said on Wednesday that stronger oil demand from China and the West from the summer onwards will bring about a supply deficit in the second half of the year.

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