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Market Report: NNPC Seeks To Advance The Delivery Of Gas To Nigeria’s Domestic Market


The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Learn more about Gladius Commodities at


The Nigeria National Petroleum Corporation (NNPC) and its partners have embarked on several strategic projects to deepen the delivery of gas to the domestic market as well as elevate the build-up of greater potentials for export. According to NNPC Group Managing Director, Alhaji Kyari, although technology and innovation were facilitating a new global energy order aimed at decarbonizing the world and safeguarding the climate, sources such as solar and wind are largely influenced by seasons and are non-transportable to demand centres where they are in short supply. He further stated that natural gas would still be used as a transition fuel to play a key role in the clean energy drive and would provide significant portions of the global energy mix and guaranteed feedstock to gas-based industries. He noted that the completion of the Escravos-Lagos Pipeline system Phase 2, commissioning of the NPDC Oredo Gas Handling facility and the SEEPCO Gas Processing plant are in line with gas revolution in Nigeria.

Further weighing in on the subject, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said Nigeria will continue to rely on natural gas as a transition fuel for key power generation while pursuing renewables for off-grid power. He stated that the challenges in the sector were well understood and expects that the Petroleum Industry Bill will act as a solution in transitioning towards a gas economy. He further stated that he expected the Bill to be passed in April, if things going according to plan. 


Tullow Oil announced it completed the sale of its assets in Equatorial Guinea to Panoro Energy upon receiving a payment of $88.8 million. This transaction also includes contingent cash payments of up to $16 million linked to asset performance and oil price. The closing of this transaction follows the satisfaction of all completion conditions, including the approval from the government of Equatorial Guinea, Tullow and Panoro shareholders and other customary third-party approvals. Although Tullow will continue to have a financial link to the assets in the Ceiba and Okume fields, the closing of this transaction marks Tullow’s exit from its licences in Equatorial Guinea after 18 years. On receipt of funds, Tullow has net debt of c. $2.3 billion and liquidity headroom of c. $1 billion. The sale of the Dussafu Asset in Gabon to Panoro is expected to conclude in the second quarter of 2021. A further $5 million consideration is due to be paid to Tullow after both transactions with Panoro have completed.


On Thursday, 1 April, oil was recouping some of its overnight losses as expectations that the Organization of the Petroleum Exporting Countries and allies (OPEC+) will continue to restrain output. The U.S. West Texas Intermediate (WTI) crude futures settled up $2.29 at $61.45, while Brent crude futures settled up $1.32 at $64.86 per barrel. The U.S. Energy Information Administration (EIA) weekly report for Wednesday, 31 March reported a draw of 876,00 barrels in the week ending March 26, against analysts’ forecasts of a 107,000-barrel build, while a 1.912-million-barrel build was reported for the previous week. 

Members of OPEC+ in a virtual meeting agreed to raise output by 350,000 barrels per day (bpd) in May and June and 400,000 bpd in July. Saudi Arabia was initially reported to be considering another 250,000 bpd cut in May, and 250,000 bpd in June, to provide continued support to the market. However, that idea was terminated after reaching a consensus with the other producers that an output hike may be necessary, especially if demand for crude spiked in the coming months. Since OPEC+ production cuts began one year ago, Saudi Arabia has single-handedly led the reductions, allowing U.S. crude producers (non-members) to grow their oil exports. After weeks of remaining trapped at around 2.5 million bpd, U.S. crude exports jumped the previous week to 3.2 million bpd and production also rose to 11.1 million barrels daily. This suggests that American energy firms were responding positively to crude prices trading at $60 per barrel or more. The rise in U.S. crude production has been in tandem with the increase in the US oil rig count, as drillers put more rigs to work to extract additional supply. 


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