Eni Prolongs BW Offshore FPSO’s Assignment Off Nigeria

Emmanuel Addeh in Abuja

Italian-headquartered oil and gas giant Eni has awarded another short-term contract extension to BW Offshore for one of its floating, production, storage, and offloading (FPSO) vessels, which is carrying out operations on a field located offshore Nigeria.

BW Offshore has inked a short-term extension for the FPSO Abo with Nigerian Agip Exploration, a subsidiary of Eni, enabling the FPSO to work on the Abo field until 31 August 2023, Offshore Energy reported.

 The previous contract extension expired on  August 14 2023. The FPSO owner is engaged in divestment dialogues for this FPSO, which were previously expected to close in 1H 2023, it said.

The OML 125 license entails three fields – Abo, Abo North and Okodo – eight producing wells, two water injectors, and two gas injectors. The wells are tied back to the FPSO Abo. Agip is the operator with 85 per cent working interest, while Oando Energy Resources holds the remaining 15 per cent.

Located some 40 kilometres off the Nigerian coast on the western edge of the Niger Delta, at a water depth of 550 to 1,100 metres, the Abo field covers an area of 1,983 km² (490,010 acres). It contains light sweet crude oil, typically 39° to 41° API, and natural gas.

The Abo FPSO comes with a storage capacity of 930,000 barrels of oil, an oil treatment capacity of up to 45,000 bpd, a water injection capacity of 30,000 bpd, and a gas compression capacity of 48,4 mmscfd. The FPSO has been working on the Abo field with Eni’s Agip since the start of production in 2003.

Standard Chartered: All-Time-High Demand Will Push Oil to $100

Emmanuel Addeh in Abuja

Brent crude could hit an intra-quarter high of $100 per barrel in Q4 according to Standard Chartered, Oilprice, has reported.

China worries aside, physical markets continue to show signs of strength, with Asian refineries expected to continue ramping up imports while crude inventories at the Cushing, Oklahoma, hub are expected to drop to their lowest level since April.

Supplies have become increasingly tight since late June as Saudi Arabia and Russia cut production. The latest energy report by the International Energy Agency (IEA) revealed that global oil demand grew by 3.26 million barrels per day in Q2, reaching an all-time high of 103 mb/d.

Commodity analysts at Standard Chartered buttressed that view saying their projections also imply large inventory draws peaking at 2.9 mb/d in August.

However, their timing for when demand will hit a new high is a couple of months later than the IEA’s. StanChart estimates that June demand was about 0.5 mb/d below August 2019’s all-time high, but expects the record will be exceeded in the current month.

 According to the analysts, highly effective producer output restraint, led by Saudi Arabia, will create the conditions for a price rally that will take Brent prices above this year’s high at $89.09/bbl onto their Q4-average forecast at $93/bbl, with a likely intra-quarter high above $100/bbl.

StanChart said the sharp tightening shown in most H2 balances is starting to spill-over into physical markets, and oil prices appear to be well supported to overcome the negative news coming from China.