ADM completes latest lifting in Nigeria after oil price recovery

The AIM-traded firm explained that, as a result of the market volatility caused by the Covid-19 pandemic, certain partners made the decision earlier in the year to defer oil sales and store production on the floating production, storage and offloading (FPSO) installation, which has up to 750,000 barrels of storage capacity.

As a result, the company and other partners chose not to participate in the 13th lifting in March, due to the prevailing oil price at the time.

That had allowed ADM to benefit from the recovery in oil prices during the intervening period, the board explained.

It said the lifting totalled 557,091 barrels with a net share of 33,056 barrels to ADM, which equated to it paying interest of about 6%.

The proceeds of the lifting would be applied against the project debt, “significantly reducing” the outstanding balance.

ADM said the nominated offtake partner for the lifting was Mercuria Energy Group, an integrated energy and commodity trading company.

“Faced with market volatility earlier this year, we chose to take advantage of the large storage capacity onboard the FPSO and to defer oil sales from Aje,” said chief executive officer Osamede Okhomina.

“It is therefore very pleasing to have now completed the 14th lifting at a significantly higher price than would have been possible earlier in the year.

“We expect to further benefit in the coming months from rising production at Aje in the second half of 2020, increasing our stake in the asset as we conclude the EER transaction, and a further improvement in the oil price forward curve.”

At 1532 BST, shares in ADM Energy were down 5.66% at 5p.