Shell Completes $1.7B Sale of Nigerian Assets

The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell plc (Shell), has completed the assignment of its interest in oil mining lease (OML) 29 and the Nembe Creek Trunk Line (OML29 and NCTL) and related facilities in the Eastern Niger Delta. Its interests in OML29 and the Nembe Creek Trunk Line were assigned to Aiteo Eastern E&P Company Limited. Total cash proceeds for Shell amount to some $1.7 billion. This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business. 

Here's How $20 Oil Could Become a Reality If Storage Runs Out

Though I find this piece kind of shabby I decided to post it because its a well written angle.

(source: bloomberg.com)

There's the makings of a crisis swirling in America's oil-storage tanks, and the next few months will determine whether it's a minor annoyance, or a major blow, to U.S. oil.

The basic problem is that too much oil is being pumped, and not enough is being used up. America is running out of places to store all of the excess crude. That’s a problem, and it could send prices plummeting -- some say to $20 a barrel or even lower. (For context: Last summer it was more than $100, and today it's less than $50.)

Nigeria could plunge into a fuel crisis soon

Yes we all look forward to the weekend presidential elections in Nigeria and our hopes stand in it's achievable credibility (yes, it's possible). Most times the common man on the street is the least involved and most affected as per effects by governmental policies but hopefully that will change soon. 

One major populace dependent commodity is petrol. We need it in our cars, bikes, generators, etc. It moves a large part of the small-medium scale enterprises and in a country such as Nigeria it can bring productivity to a stand still if not readily available.

What I'm about to share is a perspective to a possible (serious) fuel crisis in Nigeria come the second quarter of this year.

Talisman Sinopec Energy UK Appointment Bill Dunnett as it's new Managing Director

News out today is that effective from April 7, the Board of Directors of Talisman Sinopec Energy UK will formally recognize by appointment Bill Dunnett as Managing Director. Mr. Dunnett will succeed Paul Warwick who will return to his role as Executive Vice President Talisman Energy Inc. following completion of Bill's transition by mid-May.

Bill is a chartered engineer with more than 30 years’ experience in the international oil and gas industry. He graduated in 1984 with a First in Engineering before joining Mobil North Sea as a petroleum engineer. The majority of his career has been focused on the North Sea, particularly major projects and the operation of mature-asset portfolios. While working offshore in the Beryl Field, he implemented the findings of the Cullen Report which has driven his career-long passion for safe and high-integrity operations.

U.S. Refiners Turn to Tanker Trucks to Avoid 'Dumbbell' Crudes

In a pressing quest to secure the best possible crude, U.S. refiners are increasingly going straight to the source.

Firms such as Marathon Petroleum Corp and Delek U.S. Holdings are buying up tanker trucks and extending local pipeline networks in order to get more oil directly from the wellhead, seeking to cut back on blended crude cocktails they say can leave a foul aftertaste.

While the business of hauling crude from individual oil wells to bulk storage depots or pipeline hubs has become a lucrative niche in recent years thanks to the shale oil revolution, refiners are getting into the "first mile" game for a different reason: taking control of their supply chains to secure a more predictable, consistent stream of crude.

Angola's Saturno oil output restarted over the weekend

Angola's Saturno oil output restarted over the weekend, one week after a power loss at an offshore facility forced it to shut down, traders said on Monday. 

Field operator BP had no immediate comment, but traders said the force majeure on exports of Saturno grade crude oil is still in place. The FPSO PSVM operated by BP consists of the Plutao, Saturno, Venus and Marte fields. 

BP itself said last week that it expected the force majeure to last roughly eight days from when it was declared on March 16. No loading programme for Saturno crude in May had been issued yet because of the force majeure.

Saudi’s Naimi Optimistic on Oil With Output Close to Record High

Saudi Arabia’s Oil Minister Ali al-Naimi is “optimistic” about the oil market and the world’s biggest exporter is pumping about 10 million barrels of crude a day, close to the record amount produced in 2013.

Saudi Arabia is able to meet demand from any customer, al-Naimi said at a conference in Riyadh, Saudi Arabia, on Sunday. While global demand for oil is improving, there isn’t enough need to raise the nation’s production capacity beyond its current level of 12.5 million barrels a day, he said.

Smallest Oil Rig Drop in Three Weeks Shows Retreat Easing

The biggest retreat from U.S. oil fields on record is showing signs of subsiding.

Oil explorers sidelined 41 drilling rigs this week, the smallest drop in three weeks and down from the average 59-rig decline in February. The count has fallen for 15 straight weeks to 825, reaching the lowest level in more than five years, Baker Hughes Inc. said on its website Friday.

The country has lost an unprecedented 750 oil rigs in the past 15 weeks as collapsing prices force drillers to let go of thousands of workers and retreat from shale formations. The slide in the rig count threatens to bring to a halt the oil production boom that turned the U.S. into the world’s largest fuel exporter.

“While we’re still going to see declines on a weekly basis, the retreat is definitely losing steam,” James Williams, president of energy consulting company WTRG Economics, said by phone on Friday from London, Arkansas. “We’re unlikely to see a 100-rig drop again. Eventually these declines will get smaller every week, if for no other reason than we have fewer rigs out there to stop drilling.”

Saudi Looking Beyond Oil Price Slump as Rig Count Spikes

As the global energy industry stares transfixed at a spectacular drop in U.S. rigs, Saudi Arabia is ramping up the number of machines drilling for oil and gas despite a sharp fall in the price of crude.

Industry sources and analysts say the OPEC kingpin is looking beyond the halving of global oil prices since June 2014 to a time when crude could again be in short supply.

Riyadh is therefore keen to preserve what is known as its spare capacity - the kingdom's unique ability to raise oil output quickly at any given moment.

But to achieve that, Saudi Arabia has to drill much more than in the past, after boosting output to record levels to compensate for global supply outages in the past four years.

"The Saudis are probably worried about everyone else reducing capex as a result of low oil prices and about non-OPEC output falling off a cliff at some point. We all know that supply disruptions are unpredictable but they are certain," said Gary Ross, executive chairman of New York oil consultancy PIRA.

"The increase in Saudi rig numbers is like a signal to the industry – let's be rational. We will need supply growth in the future."

Shell, Total, ENI Complete $1.1 billion Nigerian Oil Field Sale

Royal Dutch Shell said on Friday it had completed the sale of its 30 percent stake in a Nigerian oil field for $737 million as the Anglo-Dutch oil major nears the completion of a strategic asset review in the West African country.

Oil and Mining Lease (OML) 18 and "related facilities in the Eastern Niger Delta" were sold to Eroton Exploration & Production Company Limited.

Eroton is a a special purpose company owned directly or indirectly by a consortium. Eroton also acquired French oil major Total's 10 percent stake and Italy's Eni's 5 percent stake in OML 18, giving it a total 45 percent holding, Shell said in a statement. The remaining 55% is owned by the Nigerian National Petroleum Corporation, NNPC. The total purchase price for the interest was US$1.1 billion, not including acquisition costs. All approvals required for the completion of the acquisition of OML 18 have been received from the relevant authorities of the Federal Government of Nigeria.

Brent Oil Falls Towards $54 on OPEC Output, Iran

Brent crude oil fell towards $54 a barrel on Friday and was on track for its third straight weekly loss, hurt by oversupply worries after Kuwait said OPEC had no choice but to maintain output levels.

Brent for May delivery had fallen 33 cents to $54.10 by 0931 GMT. The contract is set to decline by more than 1 percent this week.

U.S. crude for April delivery slipped 21 cents to $43.75 a barrel, headed for its fifth weekly loss. The contract expires on Friday.

Nigerian Petroleum Minister denies the N1.329trn subsidy money given to NNPC from CBN

The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, has denied that Nigerian National Petroleum Corporation, NNPC, received N1.329 trillion as subsidy payments between 2009-2011 from the Central Bank of Nigeria, CBN, as alleged by the ad-hoc committee of the House of Representatives on Subsidy Regime.

The committee report had alleged that “NNPC directly deducted N408.255 billion, in addition to the payment of N81.648 billion by CBN, in 2009; N407.801 billion, in addition to the payment of N402.423 billion by CBN, in 2010; and N847.942 billion, in addition to the payment of N844.944 billion by CBN, for 2011, contrary to Section 162 of the 1999 Constitution, as amended.”

The minister argued that this claim is “totally baseless, false and without foundation.”

Nigerian Petroleum Minister sues media houses over missing NNPC oil funds

The Nigerian Minister of Petroleum Resources, Diezani Alison-Madueke, has sued 11 organizations and individuals over the missing $20billion oil funds.

The funds were reported missing from the coffers of theNigerian National Petroleum Corporation (NNPC), by formerCentral Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi.

Mrs Alison-Madueke has filed a suit before the Federal High Court in Abuja to restrain members of the media from linking her with the missing money.

The defendants in the case are the All Progressives Congress (APC), Vanguard Media Limited and its editor, Mideno Bayagbon, Leadership Newspapers Group Limited and its editor Ekele Peter Agbo, Premium Times Services Limited and its editor in chief, Dapo Olorunyomi, and Vintage Press Limited and its editor, Lekan Otufodunrin.

Alison-Madueke Pledges aggressive implementation of Gas-to-Power Initiatives As NPDC/Seplat JV Invest $200m on Azura-Edo IPP Gas Infrastructure

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke has committed to an aggressive and robust implementation of the various initiatives designed to accelerate the provision of adequate gas supply for power generation in line with the Federal Government’s aspiration for the power sector.

The Minister who recently announced the N213bn inter-agency initiative to facilitate the liquidation of legacy gas debts in the power sector stated that the Nigerian National Petroleum Corporation alongside its Joint Venture Partners are determined to surpass its mandate of providing the required fuel gas as well as gas infrastructure for the smooth operation of power plants in the country.

Minister: Low Prices Will Hamper Nigeria's Bid To Boost Output

Consistently low oil prices will hamper Nigeria's bid to boost output to 4 million barrels per day (bpd), Oil Minister Diezani Alison-Madueke was quoted as saying on Tuesday at an oil and gas conference in the capital Abuja. "Flexibility in capex and funding in general will be further constrained in the year 2015," the minister said in a speech read out by Joseph Dawha, group managing director of the Nigerian National Petroleum Corp. 

Africa's biggest oil producer has been hit hard by global oil prices that have around halved since June, because it accounts for up to 80 percent of government revenues and about 95 percent of foreign reserves. "Consistently depressed oil prices will limit the industry's scope to manoeuvre, start-up key projects and revitalise marginal field production thus hampering the set target of 4 million bpd," the minister said. "The industry must challenge itself to raise funding in order to meet these targets." 

Scotland eyes East Africa O&G Opportunities

With some of the largest offshore gas fields in the world, no local supply chain and an immediate and significant demand for skilled workers, East Africa creates significant opportunities for Scotland’s oil and gas sector.

Twelve Scottish organisations – from business and academia – with an interest in the oil and gas sector, are heading to Mozambique and Tanzania on March 18, to break into this exciting new pioneering market.

Organised by Scottish Development International (SDI), the international arm of Scottish Enterprise, and supported by UK Trade and Investment (UKTI) and Aberdeen City Council, the mission responds to a visit two years ago to Aberdeen by the then President of Mozambique, Guebuza, asking for Scotland’s support.

Leading the mission, SDI’s regional manager in Africa, Gary Soper said: “It’s a real endorsement of Scotland’s global reputation for skills, experience and training when the President of Mozambique asks for our support to help grow their oil and gas industry.

“East Africa is a pioneering market, and with 150 trillion cubic feet of gas discovered off the East Africa Coast in deepwater, Scotland’s unrivalled deepwater subsea delivery and offshore experience makes us the perfect partner to help bring it into production.”

Marginal Field Operators In Nigeria (1)

Good day everyone, hope the week is taking a superb run towards the weekend (which we all care about). Well today we going to look at some marginal fields operated on in Nigeria and give some details into their activities and stakes. 

Marginal fields are oil and gas reserves usually too small for production to be economically viable for large oil companies. They are usually awarded to indigenous companies to explore considering the size of the reserves.Marginal fields contribute about 3% of the countries current production and have had a rough development road mostly due to hard financing and economies of scale as regards project value and extended life. As towards the end of last year marginal fields have averaged at 55,000 bpd and efforts are being made to make this figure higher. A bigger challenge lies in the inability on infrastructure deficits at or around the fields, lack of industry experience, the high cost of money and low depth of money supply in Nigeria, Poor oil metering tools, insecurity and also operational challenges has inhibited the prospects of marginal fields.

Lets look at some of these marginal fields below

Eland on track to drill more wells offshore Nigeria

Nigeria-focused junior producer Eland Oil & Gas reported Wednesday that it remains on track to start development drilling on its Opuama field during the third quarter of this year. The Opuama field is currently producing 3,100 barrels of oil per day, including 1,395 bopd that goes to Eland's joint venture company Elcrest Exploration and Production Nigeria. 

In 3Q 2015, Eland plans to start a drilling programme that will consist of seven wells. The firm said that these wells are "commercially robust" at an oil price of $50 per barrel. Eland CEO George Maxwell commented in a company statement: "We are incredibly pleased that we have begun this year so strongly, with very high consistency of production from Opuama. Our operational focus has given us this success and provides a consistent revenue stream and the basis for the company to deliver its 2015 work program. "We do however continue with our cost reduction program to reduce operating expenses as far as possible and maximize the return on our capex investment. 

"The planned work program, with the mixture of re-entry and new development wells, will result in 2015 being a transformational year for Eland with material increases in production and revenues." Eland also said it had a cash balance of $8.2 million as at March 1 and is expected to receive a further $2.4 million before the end of March for settlement of oil cargoes.

Africa's Oil 'Sweet Spots' Still Viable After Price Rout

African oil explorers will keep drilling in select locations such as onshore east Africa and less complex projects off the West African coast even with oil at $60 a barrel, executives and analysts told Reuters. 

But they warned that African governments with reserves in less attractive locations should revise terms now or forfeit the investment, leaving the oil and gas underground. "There are still some exciting areas in Africa like east Africa and in particular the onshore areas," said Aidan Heavey, CEO of one of Africa's biggest explorers Tullow Oil, referring to drilling projects in Kenya and Uganda. "This is certainly not the end of African oil - far from it." 

Oil Prices Stabilizing, Will Continue to Firm Up: Saudi Adviser

Oil prices have started to stabilize around $60 a barrel in past weeks and will continue to firm up, while crude demand will grow stronger, an adviser to Saudi Arabia's oil minister said on Sunday.

The comments by Saudi oil adviser Ibrahim al-Muhanna suggested that the top oil exporter sees no need to reverse its policy of allowing the market to correct itself without cutting output, despite the steep price drop since June last year.

Kuwait's OPEC governor said last week that OPEC was likely to extend its current production policy at the June meeting, in the first public comment on what will be a crucial decision determining the direction of global oil prices in the second half of this year.

It is still too early to say if OPEC will keep its output ceiling unchanged when the group meets in June, Muhanna said, but he added that he was optimistic about crude oil demand growth and expected future supply to stay "healthy".

"Look Abroad", Kemp advises Britain's North Sea Oil and Gas Firms

The North Sea has already produced 42 billion barrels of oil and gas, but could have as much as 24 billion barrels left, according to FT columnist Nick Butler (“Don’t abandon the North Sea” Feb 22).

For North Sea operators and their supporters, the remaining reserves provide a compelling economic reason to keep producing to avoid leaving value locked in the ground.

The reserves represent tens of billions of dollars in profits, wages and tax revenues that would be lost if the North Sea fields are abandoned prematurely.

North Sea reserves have a strong political dimension because most operators and service companies are based in Scotland, where separatist sentiment remains strong despite the rejection of independence in last year’s referendum.

The economic reality is more complicated. The notional value of the oil and gas that would remain locked in the ground is not a convincing reason why it should be developed. In a market-based economy, resources are developed only if they can be extracted profitably.

And there are many instances where resources have been left in the ground or abandoned because it was no longer possible to exploit them profitably.

Oh Look: Offshore Workers 'Getting Heavier'

Offshore workers are now almost a fifth heavier than in the mid-1980s, a study into their changing shape has found.

A team at Aberdeen's Robert Gordon University spent two years assessing measurements of hundreds of workers.

Twenty-six measurements were compared with figures from 30 years ago. The average weight now of men offshore is about 14st 3.5lbs, a 19% increase.

It has been done to help inform the future design of offshore installations and safety kit.

Well-equipped gyms found on most platforms were thought to have played a big part in the weight increase.

The U.S. Has Too Much Oil and Nowhere to Put It

Seven months ago the giant tanks in Cushing, Okla., the largest crude oil storage hub in North America, were three-quarters empty. After spending the last few years brimming with light, sweet crude unlocked by the shale drilling revolution, the tanks held just less than 18 million barrels by late July, down from a high of 52 million in early 2013. New pipelines to refineries along the Gulf Coast had drained Cushing of more than 30 million barrels in less than a year.

As quickly as it emptied out, Cushing has filled back up again. Since October, the amount of oil stored there has almost tripled, to more than 51 million barrels. As oil prices have crashed, from more than $100 a barrel last summer to below $50 now, big trading companies are storing their crude in hopes of selling it for higher prices down the road. With U.S. production continuing to expand, that’s led to the fastest increase in U.S. oil inventories on record. For most of this year, the U.S. has added almost 1 million barrels a day to its stash of crude supplies. As of March 11, nationwide stocks were at 449 million barrels, by far the most ever.

PetroAfrique presents 'Company Profile Of The Day'

Good and interesting times we are having at the moment in the sector with a lot happening internationally while we more on the back-foot here at home. So I think to myself "why not start a profiling post series" and it did sink deep into my prefrontal cortex, birthing our new post series called the 'Company Profile Of The Day (CPOTD)".

The CPOTD is going to be a portal to indigenous players in the oil and gas sector ranging from upstream, mid-stream and downstream. It will be a one stop place to get to know better your indigenous players in the sector, their history, their management team, services, projects and assets.

I must confess that information about most of these companies are hard to find and as such if you have got better profiling than myself on any posted company don't hesitate to drop a comment and I will get back to you.

Remember charity begins at home so we kick off from Nigeria :)

Goldman Says $40 Oil Call May Be Too Low as Demand Surprises

Goldman Sachs Group Inc. said it didn’t expect oil demand to recover so quickly and its forecast for crude at $40 a barrel may be too low.

While the bank projects that oil will still reverse its recent advance, the failure of global inventories to increase amid weather-related disruptions and stronger-than-expected demand means there’s a risk prices will miss its target for the next two quarters, according to a report dated March 8. Morgan Stanley also said the oil market was “surprisingly healthy.”

Oil Drops Toward $59 on Dollar, Stock Builds

Brent crude oil fell toward $59 a barrel on Monday as the dollar strengthened and a supply glut pushed global oil inventories to record highs.

The dollar hit a more than 11-year high against a basket of currencies after data showed the U.S. unemployment rate in February fell to its lowest level since May 2008, making commodities priced in the greenback more expensive for holders of other currencies.

Oil inventories are rising across the world as production outstrips demand, offsetting geopolitical tensions in the Middle East and the risk of output cuts in Libya and Iraq.

Welcome to Fracklog, the New-Fangled Oil Storage System

Oil drillers expecting prices to rebound after the biggest drop in six years have come up with an alternative to storing their crude in tanks: They’re keeping it in the ground.

It’s a new twist on an old oil-trading technique, known as a contango storage play, in which a trader buys cheap crude in an oversupplied market and saves it to lock in profits at higher future prices. Drillers who have spent millions boring holes through petroleum-rich shale rock are just waiting for prices to go up before turning on the spigot.

$12 billion investment unveiled by BP for Egyptian Gas Fields

British energy giant BP unveiled plans Friday to invest a record $12 billion in Egyptian gas fields with Russian partner DEA in a "vote of confidence" for the troubled nation.

The investment -- equivalent to 11 billion euros -- will be on the West Nile Delta (WND), the company said in a statement, and comes despite concern over a surge in deadly militancy in Egypt.

The London-listed group holds a 65-percent stake in the project, while DEA owns the remaining 35 percent.

Oil down on dollar, rate hike fear; little impact from rig count drop

(source: Reuters)

Crude prices fell on Friday as a rallying dollar and fears of a rate hike due to strong U.S. jobs growth suppressed the market, diverting attention from a near four-year low in the number of rigs drilling for oil in the United States.

Worries about the security of Libyan and Iraq crude supplies, which had put a floor beneath the market in the earlier hours of trade, also took a backseat.

Brent Crude Future Prices Rise Above $61

Brent crude future prices rose above $61 a barrel on Thursday, as investors brushed aside bearish U.S. inventories data to focus on tensions in Iraq and Libya.

A deteriorating security situation led Libya's state oil company to declare force majeure on 11 of its oilfields on Wednesday.

In Iraq, Islamic State militants have set fire to oil wells in the Ajil field east of the city of Tikrit to try to hinder aerial attacks aimed at driving them from the oilfield, a witness and military source said.

Saudi Ups Official Oil Prices Amid Signs of Stronger Demand

Saudi Arabia raised the official selling prices (OSPs) for its oil deliveries to Asia and the United States on Tuesday, in the latest signal OPEC's largest exporter is seeing signs of stronger demand.

The Kingdom raised all U.S.-bound crude prices by $1 a barrel and hiked extra-light crude oil to Asia by $1.40 a barrel, in a vote of confidence oil demand is growing in two of its biggest markets following the price crash since June.

Cheap Oil Threatens Debt Squeeze for Smaller UK North Sea Producers

Small and mid-sized independent oil producers in the British North Sea could face a financing squeeze this year as banks cut lending linked to the value of oil reserves, following last year's oil price sell off.

Unlike the oil majors, which can slash headcount and delay projects, smaller firms tend to be reliant on few fields, and those that are mid-project have little choice but to continue with their capital expenditure.

"Where companies have committed to projects when the oil price was $100-plus and their capital budget was set in advance, there's not much they can do to defer expenditure," James Hosie, director, energy research at Barclays Capital, said. 

"Retaining access to debt headroom is critical to ensure they have the flexibility to weather the downturn."

But with oil prices tumbling from over $100 in June 2014 to around $60 today, banks are likely to reduce the amount of lending they are willing to make based on the valuation of reserves at the next round of assessments.
"There is a squeeze happening or going to happen," Brian Campbell, oil and gas capital projects director at PWC, said.
"If you've got a lot of reserve-based lending and a lot of debt, and you're already quite drawn on that, you're going to be in a world of pain," said Christopher Wheaton, manager of the Allianz Energy fund.

Islamist Militants Shell Two Libyan Oilfields, Port Pipeline Damaged

(source: Reuters)

Islamist militants shelled Libya's Bahi and Mabrouk oilfields on Monday, damaging a pipeline to the Es Sidra oil port, a spokesman for forces protecting energy infrastructure said. 


Militants claiming loyalty to Islamic State have been blamed for attacks last month on an oilfield and pipeline in Libya, where two rival governments are battling for control. "Large armed forces calling themselves Islamic State in Libya shelled Bahi and Mabrouk oilfields. Field offices are still on fire," spokesman Ali Hassi said. "The Islamist militants damaged the crude pipeline between the two oilfields and Es Sidra port." He said it was still difficult to assess damage and fighting was continuing. Hassi said oil security forces were also confronting militants at a third oilfield, al-Dahra. 

Maersk Voyager Drillship Hired for Ghana Exploration

(source: offshore energy today)

Maersk Drilling has been awarded a contract from eni Ghana Exploration and Production Ltd., an Eni subsidiary, for employment of the newbuild drillship Maersk Voyager.

Oil Drops Under $62 due to Strong Dollar and Libyan Output

Oil dropped more than 1 percent on Monday, with Brent slipping under $62 a barrel, depressed by a stronger dollar and a rise in Libyan crude output.

The dollar hit an 11-year high against a basket of currencies after a rate cut in China dented the Chinese yuan and also hit emerging Asian currencies.

Brent crude hit a low of $61.70 a barrel and was at $61.90 by 6 a.m. ET, down 68 cents. Front-month Brent jumped 18 percent in February, the largest monthly rise since May 2009.

U.S. crude was down 55 cents to $49.21 a barrel.

Disruption to oil supplies from members of the Organization of the Petroleum Exporting Countries (OPEC) has helped support crude with lower output from Libya and Iraq in the first couple of months of this year.

But output from several OPEC countries may be recovering.

Libya's oil production has now recovered to more than 400,000 barrels per day (bpd), officials said.

"Libyan production is up and Iraqi exports are on the rise," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates, saying crude markets were likely to fall further.

Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, agreed, saying much of the recent strength in oil had been due to speculative buying.

"All in all the market is still over-supplied by a wide margin," Fritsch told Reuters Global Oil Forum. "We expect Brent to come under pressure again in Q2."

U.S. oil markets are particularly weak with a U.S. refinery strike denting demand for crude and domestic production still increasing, despite reports that the number of exploration rigs operating in North America is falling due to lower oil prices.

The number of oil rigs fell by 33 last week to 986, the smallest drop this year, a survey showed.

These diverging trends helped stretch the premium for Brent over U.S. crude to its widest since January 2014 on Friday at $13 a barrel.

Technical charts point to a further widening of the spread to $16.98 in the next three months, Reuters market analyst Wang Tao said.

Top 5 FPSO Systems in Operation within Nigeria

Written by Oby Amaliri and Ikechukwu Onyegiri; Edited by Ikechukwu Onyegiri

Subsea field layout schematic: FPSO system

FPSO (Floating, Production, Storage and Offloading) system is a converted or custom-built ship-shaped floater, used to process oil and gas and for temporary storage of the oil prior to transshipment. The FPSO is a floating vessel used by the offshore industry for the processing of hydrocarbons as well as the storage of oil. A FPSO vessel is designed to receive hydrocarbons produced from nearby platforms or subsea template, process them, and store oil until it can be offloaded onto a tanker or transported through a pipeline

It is one of the best devised systems to have developed in the oil exploration industry for the marine areas. They will sometimes have production facilities onboard, and are normally used in areas where a pipeline to transport oil to shore isn’t available. Typically a shuttle tanker will moor alongside the FPSO and offload the stored oil periodically.

Innovative technologies, coupled with developments of existing ones, have played a big part in maintaining this standing for so long. The system is foolproof, enables cost efficiency and thus becomes a very major asset when it comes to excavating for oil in the marine areas and provides vast benefits in the production of marginal fields.

Benefits

Technology advancements since the inception of FPSOs have seen the arrival of a host of features, from geostationary turrets to allow the vessel to turn and ride prevailing weather, to the wider inclusion of water or gas injection and gas-lifts.

Also, its simplicity as an offshore production facility, capable of accumulating and storing oil before periodically offloading it to tankers for transport to the mainland – gives it an obvious logistic and economic appeal. Not only does this directly permit the rationalization of shuttle tanker movements but, more fundamentally, it can also allow marginal oil fields, or those in deepwater areas at some physical distance from existing pipelines, to be developed.

The system enables cost efficiency and thus becomes a very major asset when it comes to excavating for oil in the marine areas: it does not require the laying of pipelines and can be moved to new locations.

Finally, FPSOs eliminate the need for costly and expensive underwater infrastructure, they are more environmentally friendly than rigs, and their abandonment costs are less than for fixed platforms.


Top 5 FPSO Systems operating within Nigeria

In Nigeria today, we have about sixteen FPSO systems operating in different fields. Some of these FPSO sytems are used to operate in the top five deep water fields. These five are selected as the deepest base on their recoverable reserves and storage capacity.

OPEC's February Oil Supply Hits Lowest Since June on Iraq-survey

(source: Reuters)

OPEC's oil supply has fallen this month as bad weather delayed exports from Iraq's southern ports, a Reuters survey found on Friday, slowing an expansion of supplies in the group's second-largest producer.

The survey also found slightly higher output in Saudi Arabia, a sign that the largest producer in the Organization of the Petroleum Exporting Countries is sticking to its strategy of focusing on market share rather than cutting output.