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Are Oil Prices About To Turn Lower?

Are Oil Prices About To Turn Lower?

As too many bearish factors…

Exxon Signs Deal For Equatorial Guinea Offshore Block

Offshore

OPEC’s newest member, Equatorial Guinea, has signed a production-sharing contract with ExxonMobil for offshore block EG-11, Equatorial Guinea’s oil minister Gabriel Mbaga Obiang Lima said on Monday.

The new contract was signed through direct negotiation, and was not part of the EG Ronda 2016 licensing round, Equatorial Guinea said in the announcement at the Africa Oil & Power 2017 conference in Cape Town.

“This new PSC gives ExxonMobil, already a lead producer in Equatorial Guinea, a stronger position in the country and is a vote of confidence in Equatorial Guinea’s potential for future large discoveries and upstream developments,” Equatorial Guinea said.

The winning bids of the Ronda 2016 licensing round are scheduled to be announced later on Monday at the Cape Town conference.

The production-sharing contract with Exxon is for a block next to the Zafiro field, operated by the U.S. oil supermajor.

Exxon has a 71-percent interest in the Zafiro field, whose net production averaged 31,000 bpd in 2016, the U.S. group said in its 2016 financial and operating review. In addition, Exxon holds an 80-percent interest in Block EG-06, on which nearly 600 square miles of 3D seismic data were acquired in 2015. Technical evaluation is under way, Exxon said.

Equatorial Guinea, Sub-Saharan Africa’s third-largest oil and gas producer, joined OPEC less than two weeks ago at the Vienna summit on which the cartel decided to extend the current production cuts into March 2018.

Related: Has Permian Productivity Peaked?

“Equatorial Guinea’s share of production cuts over the last six months is 12,000 barrels per day,” its oil ministry said, announcing that the country was joining OPEC.

The country pumped an average 289,000 bpd in 2015, with reserves estimated in the same year at more than 1.1 billion barrels of crude. It is a relatively new addition to the global oil industry, with the first oil struck in 1996.

According to its oil ministry, Equatorial Guinea will start work on two main projects this year: Fortuna FLNG, Africa’s first floating LNG plant; and the Bioko Oil Terminal, the biggest crude oil and petroleum products storage facility in West and Central Africa.

By Tsvetana Paraskova for Oilprice.com

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