US set to resume crude purchases for SPR

Spanish Market: Crude oil
07/05/24

The US is set to resume crude purchases for the US Strategic Petroleum Reserve (SPR), after calling off a planned 3mn bl refill last month following a rise in crude prices.

The US Department of Energy (DOE) today said it plans to purchase up to 3.3mn bl of sour crude for delivery in October to the SPR's Big Hill storage site in Texas. The solicitation sets a maximum price of $79.99/bl for the offers, a slight increase from the $79/bl ceiling it used in the recent monthly purchases.

The agency last month called off two pending solicitations that sought to buy 1.5mn bl/month for delivery to the SPR's Bayou Choctaw site in August and September, citing higher crude prices. The most recent SPR refill, nearly 2.8mn bl of sour crude for delivery in September, cost an average of $81.34/bl.

DOE says it has has already purchased a total of 32.3mn bl at an average price of $76.98/bl, well below the average $95/bl it received from the sale of 180mn bl of crude from the SPR to respond to market turbulence after Russia invaded Ukraine in 2022.

Energy secretary Jennifer Granholm told lawmakers last week that two out of four SPR sites were undergoing maintenance and would not be able to accept SPR deliveries until the end of the year. "We want to continue to fill it, and we will," Grahnolm said.

The SPR held 367.2mn bl as of 3 May.

By Haik Gugarats

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19/12/24

Viewpoint: Nigeria Dangote to affect WAF crude in 2025

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US Army Corps proposes new Illinois River lock

18/12/24

US Army Corps proposes new Illinois River lock

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US funding bill to allow year-round E15 sales

18/12/24

US funding bill to allow year-round E15 sales

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Argentina touts quarterly economic growth

17/12/24

Argentina touts quarterly economic growth

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Shell takes FID on Nigeria’s Bonga North oil project

16/12/24

Shell takes FID on Nigeria’s Bonga North oil project

Lagos, 16 December (Argus) — Shell has taken a final investment decision (FID) on Nigeria's Bonga North field, aiming for first oil from the deepwater project by 2030. The firm expects crude production from Bonga North to peak at 110,000 b/d but it has not given a timeframe. Bonga North — which currently has estimated recoverable resources of over 300mn bl of oil equivalent (boe) — will involve drilling up to 16 wells and will be tied back to the existing 225,000 b/d Bonga floating production, storage and offloading (FPSO) facility. The FPSO already handles output from the Bonga Main and Bonga North West fields, which started up in 2005 and 2014, respectively. Crude production from the FPSO averaged 120,000 b/d in January-November, with output in November rising by 9pc on the month to 135,000 b/d, according to Nigeria's upstream regulator NUPRC. Shell said modifications to the FPSO will be required to accommodate Bonga North, but a source told Argus today that these will largely be limited to the facility's topsides. The company previously told Argus that a separate and more thoroughgoing FPSO life-extension programme, which "will run well into 2029", had been put in place because the facility was originally designed to operate only until 2025. Shell's Nigerian offshore subsidiary operates the Bonga North project with a 55pc stake under a production-sharing contract with state-owned NNPC. ExxonMobil, TotalEnergies and Italy's Eni are the other project partners with 20pc 12.5pc and 12.5pc stakes, respectively. The Bonga fields are located in Nigeria's OML 118 licence at water depths exceeding 1,000m. In addition to Bonga Main, Bonga North West and Bonga North, the block also holds the undeveloped Bonga South West oil field, which NNPC said will be developed in three phases. Bonga South West will have its own separate FPSO and produce 150,000 b/d at peak between 2027 and 2031, NNPC said. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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