THE MONTH IN BRIEF: The OPEC deal that wasn't a deal, Libya nearly has a deal and Nigeria still has a deal (maybe)
| Published date | 01 October 2016 |
| DOI | http://doi.org/10.1111/oet.12428 |
| Date | 01 October 2016 |
THE MONTH IN BRIEF
is section summarizes downstream developments of the previous month. Exploration & Production are covered in
“Upstream Review.”
The OPEC deal that wasn’t a deal, Libya nearly has a deal and Nigeria still
has a deal (maybe)
An informal gathering of OPEC’s ministers, who hap-
pened to be attending a conference described as an
“International Energy Forum” in Algiers between
September 26 and 28, apparently agree d to reduce
theirproductiontosomewherebetween32.5and
33.0 mn bpd. Bas ed on their production in August, as
estimatedbytheOPECSecretariat,thatwouldamount
to a cut of 0.2-0.7 mnbpd. Any decision on how to allo-
cate the reductions among the individual members was
le to be decided at the ministerial meeting scheduled
for November 30 in Vienna. e cuts are also appar-
ently dependent on there being reductions in output
by an unspecied g roup of countries outsid e OPEC,
one of whose members is likely to be Russia. e whole
deal-making process confused the oil market, as Brent
futures rst rose, to close out the day on September 28
$2.72/bbl up on the previous day, with a further rise
the following day, before falling on the 30th as doubts
about the entire scheme began to emerge before an
outburst of renewed condence drove them back up
again.
Adealofadierentsort,thatis,onedesignedto
increase production, was announced in Libya, when the
National Oil Corp oration (NOC) said that three export
terminals at Ras Lanuf, al-Sidra, and Zueitina would
resume operations following an agreement to allow them
to reopen with reb el groups that had prevented access to
them. Within a few days, one armed group had tried to
retake the terminals. e attack failed and at the end of
September, the NOC ann ounced that Libya’s oil produc-
tion had risen by more than 100,000-485,000 bpd. e
security situation remains precarious, however, and the
NOC warned that Libya’s export revenues were too low
to nance the rehabilit ation of either the upst ream or
downstream industries in Libya.
A cease-re in the Niger Delta region by the Niger
Delta Avengers (NDA) collapsed in late September
aer the NDA claimed the Nigerian government had
failed to begin peace talks with the group. Plans to
resume exports of Forcados and Qua Iboe crude were
nevertheless reported to be going ahead aer earlier
sabotage to pipelines was repaired, allowing exports of
over 500,000 bpd to resume. A further plan emerged
toincreaseexportsofBonnyLightbyapproximately
100,000 bpd following repairs to infrastructure there.
ese have all been put in jeopardy by the ending of the
cease-reandtheresumptionofattacksbytheNDA,
which blames the government and the oil companies
for the widespread poverty and pollution in the Delta
region.
A deal between Iraq’s State Oil Marketing Organi-
zation (SOMO) and the Kurdistan Regional Govern-
ment (KRG) over the allocation of oil revenues a llowed
SOMO to export its rst cargo of crude oil from the
Turkish port of Ceyhan in 13 months. e Iraqi gov-
ernment said it was studying the idea of building a
new export pipeline that would avoid territory con-
trolled by the KRG. e Turkish government sacked
more than 500 employees of its Energy Ministry, alleg-
ingthattheyhadsupportedJuly’sfailedmilitarycoup
d’état. Saudi Arabia and Bahrain agreed to double the
capacity of the 230,000 bpd pipeline that supplies Ara-
bian Light crude to Bahrain’s 270,000bpd renery at
Sitrah. Work was halted on a pipeline being built to
transport shal e oil from North Dakota to Illinois foll ow-
ing violent clashes involving native Americans protest-
ing against its being built across their land. Russia sus-
pended exports of diesel to Ukraine in an argument
over Ukraine’s alleged use of the fuel for military pur-
poses.
Total halved the capacity of its 220,000 bpd North
Killingholme renery in eastern England. Shell agreed
the sale of its 70,000 bpd Frederica renery, mark-
ing its exit from the downstream sector in Denmark.
Yemen’s 150,000bpd Aden renery reopened following
theretakingbySaudi-backedforcesoftheal-Shihr
import terminal that supplies the renery with crude.
Iraq invited private companies to invest in and build
four new reneries with a combined capacity of about
470,000 bpd.
© 2016 John Wiley& Sons Ltd
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