- Oil price slumps to $57 as US, China trade tensions deepen
Ejiofor Alike with agency reports
Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mr. Mele Kyari, Wednesday disclosed that the corporation, Shell, Total and Eni, who are investors in the NLNG Limited, will in October sign the FID on the Train-7 expansion project.
NNPC represents Nigeria’s interest in the 22 metric tonnes per annum (mtpa) NLNG with 49 per cent equity shares, while Shell has 25.6 per cent, Total – 15 per cent and Eni – 10.4 per cent.
NLNG had explained then that it would shop for $12 billion for the entire expansion drive which include the development of new gas fields for feedstock to the new train expected to raise NLNG’s capacity by 35 per cent, and to 30mtpa.
However, a statement from the NNPC, disclosed that Kyari said the FID will happen in October. He urged the management of the NLNG to ensure the October 2019 FID target was met, and also go beyond the Train-7 expansion.
According to the statement signed by NNPC’s Group General Manager Public Affairs, Mr. Ndu Ughamadu, the NLNG management team was led by its Managing Director, Mr. Tony Attah, on a visit to Mele Kyari who reportedly told them to consider the October Train-7 FID on the project as a done deal.
He noted that the focus should be on, “what else can we do beyond Train-7 to expand NLNG operations.”
Kyari, assured of the unflinching commitment of the federal government and the NNPC management in the future expansion drive of NLNG, saying all obstacles that could impede the actualisation of the Train-7 FID project should be promptly identified and removed ahead of the October 2019 timeline.
Attah, in his presentation, reportedly applauded the historic role of the NNPC in the successful midwife of NLNG, 30 years ago, through sheer vision and sense of purpose.
He said the company would be relying on the usual invaluable support from the corporation to achieve the successful execution of the Train-7 FID project and lots more, and announced that the project would generate a projected 12,000 jobs with massive spine-offs on Nigeria’s economy.
Oil Price Slumps to $57 as US, China Trade Tensions Deepen
Meanwhile, crude oil prices fell further yesterday, extending recent heavy losses as deepening trade tensions between United States and China weighed on the outlook for the global economy and energy demand.
The global benchmark, Brent crude was down $1.04, or 1.75 per cent, at $57.90 a barrel, setting a fresh seven-month low.
United States West Texas Intermediate (WTI) crude futures were down $1.17, or 2.18 per cent, at $52.46.
Both prices have lost more than 20 per cent since hitting their 2019 peak in April.
Brent has plunged more than 10 per cent over the past week after US President Donald Trump said he would slap a 10 per cent tariff on a further $300 billion in Chinese imports.
Trump had vowed to impose new tariffs on Chinese imports and China made further moves against US agricultural cargoes.
The United States had also responded to a decline in China’s Yuan on Monday by branding the country a currency manipulator, pushing China to accuse the US of causing chaos in financial markets.
Trump on Tuesday dismissed fears that the trade row with China could be drawn out further.
But Reuters reported that his comments failed to prevent shares in Asia from falling for an eighth straight session while London’s FTSE 100 gained 0.4 per cent.
However, the demand for safe-haven assets such as government debt underscored lingering anxiety over recession risks.
Also tensions in the Middle East remain high after Iran seized a number of tankers in recent weeks in the Strait of Hormuz, a major chokepoint for oil shipments.
Saudi Energy Minister Khalid al-Falih and US Energy Secretary Rick Perry on Tuesday expressed mutual concern over threats targeting freedom of maritime traffic in the Gulf.
Iran had threatened to block all energy exports out of the Strait of Hormuz, through which a fifth of global oil traffic passes, if it was unable to sell oil as promised by a 2015 nuclear deal in exchange for curbing uranium enrichment.
Britain had on Monday joined the US in a maritime security mission in the Gulf to protect merchant vessels after Iran seized a British-flagged vessel.
Elsewhere, data indicating a larger-than-expected drop in US crude stocks offered some support to oil prices after several weeks of large draws on inventories.
Official data from the government’s Energy Information Administration (EIA) was due yesterday.
The EIA on Tuesday lowered its domestic oil growth forecasts for the year after Hurricane Barry disrupted Gulf of Mexico output in July.
Production is set to rise by 1.28 million barrels per day to 12.27 million bpd this year.