WTI $68.52 +63c, Brent $73.44 +38c, Diff -$4.92 -25c, NG $2.73 +1c
A slightly better day yesterday as better than expected Chinese demand numbers and a withering attack by the IMF on Venezuela (economy contracting by 18% this year and 1 million % inflation) steered the market up modestly.
After the close the API stats were pretty positive, crude drew 3.2m barrels with the scribblers looking for 2.3m, but even better gasoline drew 4.9m b’s and distillates an unexpected 1.3m draw. As always we await confirmation from the EIA tonight.
A most important MOU was signed yesterday between Niger and Nigeria in relation to development of the Agadem Rift Basin and its exports of crude oil. Oil Ministers from both countries signed the Memorandum watched on by their Presidents and of course representatives of both CNPC and SAVP. The deal envisages a pipeline from the ARB to a refinery at Katsima State in Northern Nigeria which will provide ‘one of the potential routes’ to market for discoveries so far and in the future.
For SAVP this is all excellent news, indeed as CEO Andrew Knott said ‘it compliments plans to initiate an early production system for the R3 East area of the ARB and hope that it will enable early monetisation of our recent discoveries’.
This deal should be considered a massive boost for SAVP in a number of ways, firstly it provides the answer to the first of two major export solutions and make no mistake, CNPC can and will deliver this project. Secondly it ticks all the boxes with regard to stranded hydrocarbons, there can be little, if any doubt that these significant discoveries will now come to market and in a short period of time. Finally, it answers the doubters big time in terms of Savannah’s ability to firstly find and then sell substantial amounts of oil, these early finds only scratch the surface of the opportunities in Niger.
Andrew Knott’s vision that I first saw on the wall of his office many years ago is is fast becoming a reality, the fact that the shares actually fell following this news is to be frank, ludicrous they offer an exceptional opportunity that should not be missed.
Reabold has announced that AFE’s have been signed for both the Wick well in the Inner Moray Firth and the Colter well in the Weald Basin. Wick is scheduled to spud in September and Colter, already much delayed, in the 4th quarter. As co-CEO Sachin Oza commented, these are two ‘potentially transformational wells within the next few months’ and fellow co-CEO Stephen Williams told me last week that these are two of six wells that RBD are expecting to drill by the year end. If some of these don’t come in and amply reward shareholders I will be astonished…
It was very pleasing, if years too late, that Cuadrilla yesterday was awarded consent to frac the first of two horizontal wells at Preston New Road. Whilst this is ironically still early days, (I seem to have been watching the Bowland shale for half of my life), it does at least put a marker down for the industry and is great news at a time when the UK and indeed the whole of Europe (note Germany/Russia pipeline deal) is becoming ever more dependent on imported gas.
The UK onshore industry has waited a long time to prove that it can safely and securely operate in sensitive areas and this will provide positive momentum as they move forward into appraisal/flow rates to prove the broader concept. It is just a shame that it has taken so long get to this stage and it is now crucial that this and future Governments maintain this appropriately positive stance, even now it will still take a long time to deliver but it is better than nothing.
With another round of County Championship matches on the go Yorkshire easily beat Lancashire in the Roses match whilst up at Trent Bridge Surrey beat Notts by an innings and 183 runs…
And I’ve been watching with continued bemusement the football transfer market in recent years but 50 MILLION quid for Richarlison by the Toffees is surely total madness…..?