Nigeria Aims for 2 mbpd Crude Production by 2024 with Pipeline Security Efforts

Key Takeaways:

• Brent and WTI crude prices dropped by 0.9%, reflecting weak demand and a stronger US dollar.
• Nigeria’s crude production reached 1.8 mbpd, with goals to achieve 2 mbpd by December 2024, supported by enhanced pipeline security.
• Suriname’s petroleum potential advances with a major investment in offshore Block 58, raising hopes for an economic boom akin to Guyana.
• Oil markets face bearish trends due to surplus forecasts, weak demand from China, and a stronger US dollar.

Petroleum Price: Crude Oil Prices Decline Amid Weak Market Sentiment

• Brent crude futures were down 65 cents, or 0.9%, at $71.91 a barrel by 0450 GMT. U.S. West Texas Intermediate crude futures were down 62 cents, or 0.9%, at $68.08. MCX crude oil prices opened at 5768 with a fall of 0.48%.

Petroleum Demand and Supply: Nigeria Targets 2 mbpd Oil Production by December 2024

• The Nigerian National Petroleum Company Limited (NNPCL) management reported that Nigeria’s crude oil production has increased to 1.8 mbpd, while gas production has risen to 7.4 billion standard cubic feet per day.

• This development was commended by the Chairman of Tantita Security Services Nigeria Limited (TSSNL), Chief Government Ekpemupolo, popularly known as Tompolo.

• In a communique released through his Special Adviser for Media and Public Communication, Paul Bebenimibo, Tompolo hailed the NNPCL and other stakeholders involved in achieving this milestone, including security agencies and Tantita Security Services Nigeria Limited, which is responsible for the pipeline protection contract awarded by the Federal Government to combat oil theft in the Niger Delta.

• He emphasized that Tantita is dedicated to achieving the target of 2 mbpd by December 2024, as instructed by President Bola Tinubu.

Petroleum News: China’s Declining Oil Demand Fuels Bearish Market Outlook

• There is rising speculation the tiny South American country of Suriname will emerge as the next Guyana. After years of speculation surrounding the former Dutch colony's petroleum potential, with discoveries in neighboring offshore Guyana pointing to the deeply impoverished country possessing billions of barrels of crude, the first oil recently took a big step closer.

• The joint partners in Suriname's offshore Block 58, TotalEnergies and APA Corporation which both hold a 50% working interest, finally committed to a multi-billion investment to develop the petroleum acreage.

• This Paramaribo hopes will spark an epic economic boom, on the scale being enjoyed by neighboring Guyana, which will lift Suriname and its 623,000 inhabitants out of poverty.

• It has been a rocky road for Suriname since the first world-class oil discovery was announced in offshore Block 58 at the beginning of January 2020. This discovery, along with four more world-class discoveries, buoyed speculation that Block 58 encompasses the same petroleum fairway passing through the prolific Stabroek Block in offshore Guyana, where Exxon has found over 11 billion barrels of crude oil.

• Despite those incredibly positive developments Suriname's oil boom almost ended before it began. By 2022, there was growing concern over reservoir quality, the rising volume of dry holes drilled and the high gas-to-oil ratio of some oil discoveries.

• That saw TotalEnergies, the operator of Block 58, delay making a multi-billion-dollar final investment decision until those issues were resolved. This delayed the first oil for Suriname, which had originally been slated for 2025, raising fears the former Dutch colony will miss the boat when it comes to enjoying a vast economic windfall from its petroleum resources.

Expert Opinion: Global Oil Surplus Forecasts Weigh on 2024 Price Trends

• It is expected that oil markets will face a surplus of over 1.0 million barrels per day next year due to declining demand, particularly centered in China. China’s oil consumption is believed to have peaked, with refinery demand in October falling by 4.6% year-on-year, marking the seventh consecutive month of declines.
• The post-election enthusiasm in markets has faded, demand concerns have resurfaced, and a stronger US dollar has also weighed on prices. Downwardly revised forecasts for 2024 further add to bearish market pressures.