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NNPCL Partners Gambia Petroleum Company For Expansion of Oil Production

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In a bid to boost oil production and expand its current output, the Nigerian National Petroleum Company Limited (NNPCL) has signed a Memorandum of Understanding with the Gambian National Petroleum Company (GNPC).

Investors King reports that the partnership between the two countries is targeted to drive massive growth in the industry and enlarge its crude oil market.

The Nigeria and Gambia Petroleum firms signed the agreement at the headquarters of NNPC Limited in Abuja. 

The NNPCL’s Executive Vice President, Business Services, Danladi Inuwa and GNPC’s  Managing Director, Baboucarr Njie, signed the MOU for their respective companies.

According to a tweet by the NNPCL, the new collaboration is aimed at expanding the nation’s oil sector beyond the shores of Nigeria.

NNPCL stated, “Areas of interest include new frontier exploration, crude oil market expansion opportunities and transfer of technology towards the quest for more energy security for both countries and the West African sub-region.”

Investors King had earlier reported that NNPCL is set to drill crude oil in Nasarawa state on March 21, 2023 as another measure to expand oil exploration.

According to the Group Chief Executive Officer, NNPC Ltd, Mele Kyari, oil exploration in Nasarawa began in 2010 which will be massively revamped having found crude oil in the state.

“We started exploration work in the areas that we will now focus on since late 2010. Exploration work is always a tedious activity, you gather data, interpret them, make sense out of it and ultimately you’ll decide to test the outcomes.

“We have established a petroleum environment technically, we have seen our data, many years of work, most of them done very recently. We have seen a great potential for finding hydrocarbons in Nasarawa State. To confirm this, we are going to start drilling on March 21, 2023, and we are very optimistic that it will be a successful exercise,” Kyari said.

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Crude Oil Dips Slightly on Friday Amid Demand Concerns

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On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.

Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.

Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.

The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.

This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.

Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.

Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.

While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.

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Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO

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The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.

Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.

Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.

He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.

Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.

The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.

Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.

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Oil Prices Rebound in Asian Markets Amid Red Sea Shipping Concerns

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Amid escalating attacks on shipping in the Red Sea and growing uncertainty regarding U.S. interest rate cuts, oil prices rebounded in Asian markets today.

Brent crude oil, against which Nigerian oil is priced, climbed by 24 cents to $82.58 a barrel while the U.S. West Texas Intermediate crude oil (WTI) rose by 21 cents to $77.25.

The rebound comes after both Brent and WTI contracts experienced a 1.5% and 1.4% decline, respectively, from their near three-week highs on Tuesday.

This decline occurred as the premium for prompt U.S. crude futures to the second-month contract widened to $1.71 a barrel, its widest level in approximately four months.

However, on Wednesday, the premiums slid to 4 cents a barrel.

Analysts suggest that oil futures have entered a relatively range-bound phase, with current prices reflecting a risk premium of $6-7 per barrel.

The situation could persist until the next significant development in the Gaza crisis, whether it involves a de-escalation through a ceasefire or a further intensification of the conflict.

Recent attacks on vessels in the Red Sea and Bab al-Mandab strait by Yemen’s Iran-aligned Houthis have heightened concerns over freight flows through these critical waterways.

Moreover, Washington’s veto of a draft UN Security Council resolution on the Israel-Hamas war has added to geopolitical tensions impacting oil markets.

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