Sahara in Extended Well Test to First Oil In 2015

Indigenous energy group, Sahara Energy, is carrying out an extended production test on the Oki field in Oil Prospecting Lease (OPL) 274 in Niger Delta.

The test according to a Africa Oil + Gas Report is preparatory to first oil from the field in the first half of 2015.

The company successfully drilled two appraisal/development wells and an exploration well between September 2013 and August 2014, with the first appraisal/development well logging 64metres net pay in 12 sands and flowing 3,129 barrels of oil per day ( BPD) in several zones.

The second appraisal/development well encountered 91 metres net in 19 reservoirs and tested at 2,397 BPD. Sahara did not disclose the number of sands that were tested.

The exploration well found 30 metres net oil sands in four levels and flowed 1,600 BPD. The company reported that seven new pays showed up in the two appraisals.

Oki field straddles NPDC operated Oziengbe South Field in Oil Mining Lease (OML) 111, and there is unitization agreement between the two companies.

Under the terms of unitization, Sahara will produce into the NPDC operated flowstation on the Oziengbe South Field. The unitized field is named Oki-Oziengbe South. Sahara installed four flowlines to the flowstation.

The company forecasts initial production of 4,000 BPD from Oki-Oziengbe South-4, which is the first of the two appraisal/development wells.

“This will double to 8,000 BPD in 2015, once Oki-Oziengbe South-5 is completed”, according to Curtis Cohen, Chief Operating Officer, Sahara Group, Upstream.

Existing facility at the Oziengbe field constrain production delivery, he told the Lagos Oil Club on September 30, 2014. The company looks forward to new Flowstation and plant capacity expansion to grow production.

Afren installs Platform Jacket for CFBx

Afren plc weekend declared that it is installing the platform jacket for the Ebok Central Fault Block Extension (CFBx).

West African Venture, also called Waventure, a subsidiary of Sea Trucks Group, also announced that Afren awarded it the installation contract for a 60-km pipeline, PLEM, flexible riser and spool pieces, as well as transportation and installation of jackets, piles, bridges, and topsides.

The installation of the decks and bridge will complete in early January 2015 once the wellhead jacket at Okwok has been installed; following which Afren and its partner Oriental Energy Resources will commence the hook up and commissioning of the CFBx platform.

The work program at the CFBx is to include up to nine new wells to be drilled and brought on-stream by the end of 2015 targeting both producing and undeveloped reservoirs. 

Elsewhere at the North Fault Block (NFB), the partners continue to make good progress and are targeting completion of the third new producer by mid-December 2014.  The forward program at the NFB will incorporate up to an additional five wells by year-end 2015.

The partners also began drilling on the Ameena East prospect. The well is being drilled with the Shelf Adriatic I drilling rig. 

The Ameena East prospect will be targeting 65 million barrels of gross unrisked resources in zones of prospectivity in the Biafra intervals that are productive north of the acreage, with secondary objectives in the Qua Iboe reservoirs equivalent to those at the Ebok and Okwok fields.  The drilling campaign at Ameena East is expected to be completed in December.

Drilling at the Ebok Deep exploration tail targeting 50 million barrels of gross unrisked resources in the deeper Qua Iboe and Biafra reservoirs is expected to commence in Q4 2014 following the completion of the third new producer at the NFB.

Interim Chief Executive of Afren, Toby Hayward, commented: “With incremental new production to be brought on stream from both the CFB and NFB platforms, as well as from the Okoro FFD, Okwok, OML 26 and OML 113 developments, Afren is expecting to deliver strong production and cash flow growth in 2015 and beyond.  We are pleased to have commenced our drilling campaign at the Ameena East prospect and are excited about the potential there and at Ebok Deep.”

Waventure announced that Afren awarded it the installation contract for a 60-km pipeline, PLEM, flexible riser and spool pieces, as well as transportation and installation of jackets, piles, bridges, and topsides.

A number of the company’s marine support vessels and barges will be deployed for the project, including two of its DP3 pipelay construction vessels.

Offshore Activities are expected to start in Q1 2015.

“With incremental new production to be brought on stream from both the CFB and NFB platforms, as well as from the Okoro FFD, Okwok, OML 26 and OML 113 developments, Afren is expecting to deliver strong production and cash flow growth in 2015 and beyond,” said Toby Hayward, Afren interim chief executive.

“We are pleased to have commenced our drilling campaign at the Ameena East prospect and are excited about the potential there and at Ebok Deep.”

 

NDPR to spend $135 M On Omerelu Development

Niger Delta Petroleum Resources will spend $135 million, or 54% of the first tranche of equity it is seeking, to develop the Omerelu field, in Oil Mining Lease (OML 53) in the eastern Niger Delta basin.

The bill is for new wells, new flow station and a mini gas plant that will ensure the company flares no gas at first oil, according Africa Oil and Gas Report.

A key challenge for the field is flow assurance; the oil is heavy and will need gas lift solution.

“Unlike Ogbele, we cannot do ‘poor boy’ type or one step at a time Field Development Plan for Omerelu”, says Layiwola Fatona, CEO of NDPR.  Ogbele is the company’s first field, which has been in production since 2005, with current output at 3,500 BPD.

The challenges of getting Ogbele into production presented a tough learning process for NDPR.

Money for the Omerelu project will be taken from the first tranche of the $450 Million equity capital that NDPR is in the process of raising.

That first tranche is $250Million. At its last Annual General Meeting, in mid-September 2014, the NDPR board received shareholders’ approval “to raise additional capital of up to $450,000,000, whether locally or internationally, thgrough any funding method that the directors may adopt, including a public offer or special placing of shares, subject to the approval of the appropriate regulatory authorities.”

NDPR executed a farm in agreement with American major Chevron earlier this year after a drawn out process which began when Chevron farmed out Ogbele field to NDPR in 2000. At the time, the two companies agreed that NDPR would have the right of first refusal to farm in to Omerelu.

The field, for now, has an estimated thirteen million barrels of oil (13MM Bbls STB (P50)) and ultimate gas recoverable of eight billion cubic feet   (8 Bscf) of gas, “which will significantly augment NDPR’s booked reserves and future (short to medium term) production output, according to NDPR.

 

Conoil’s Production Plunges to 9,000 BPD

Indigenous independent exploration and production company, Consolidated Oil and Gas Company Limited also called Conoil Producing might be facing acute revenue downside as its production falls at a time of low oil prices.

According to Oil + Gas Reports, Conoil has had its dipped to 9,000 barrels of oil per day (bpd), from close to 11,000 BPD in the early to middle of the year.

Conoil is said to be struggling with optimum output in two different production hubs with 1,000 bpd on the western flank of the Niger Delta and 8,000 bpd in its Otuo South field, at the mouth of the continent’s most prolific basin.

These figures are instructive. Conoil was the first real Nigerian operator of a hydrocarbon acreage, winning its first license as one of the several local firms granted discretionary awards in 1991, during “The Indigenous Thrust”.

The company made history when it claimed to have made a discovery in that asset (now Oil Mining Lease (OML) 103) in Christmas of 1993.At the height of its powers, Conoil produced over 35,000 bpd between 2005 and 2006.Production could readily have been more.

“Our overall potential hydrocarbon resources of over 1.0 Billion Barrels of Oil and 7.0 Trillion Cubic Feet of Gas, helps position us in Africa as the flagship of the independent oil and gas companies”, the company claims on its website.

Conoil is the operator of six blocks in the Niger Delta. Its asset include OML 290, which it describes as its latest (PSC agreement was signed in October 2008); OML 59,for which it signed a technical operator agreement with Continental Oil and Gas Limited (CONOG) in 1998, to provide 100% funding and technical service agreement to operate; OML 136; Oil Prospecting Lease (OPL) 2007; OPL 257 as well as Block 4in the Joint Development Zone (JDZ), in which it is 25% equity holder.

This is the lowest equity Conoil holds in any asset. It doesn’t like having minority positions. Conoil has, however, largely left these assets to lie fallow for most of the past 10 years.

Although TOTAL farmed in for a 40% participating interest in OPL 257 andOML 136 on 17th October, 2006 and 17th May, 2007 respectively, Conoil has had challenges implementing a work programme with its more deep pocketed partner, especially in the Egina South prospect in OPL 257, which could be readily tied to the Egina field, currently in development.

In the last two years, however, Conoil has been more aggressive working on the upside potentials of OPL 290, OML 2007 and OML 59. It has made deeper pool discoveries in OML 59 and proved up new oil in OML 2007 and OPL 290, which, experts say, could push production to 60,000 BPD by 2018, if corporate governance issues don’t stand in the way.

 

Umugini Pipeline buoys Production From Oando’s Ebendo Field

 

 

 

 Exploration and production division of Oando Plc, Oando Energy Resources (OER), has announced completion of the 51km Umugini pipeline located in Niger Delta.

The Umugini pipeline is a common access production flow facility that is conceived to relieve a group of indigenous players of accounting disputes with Nigeria Agip Oil Company (NAOC) whose export pipeline is hitherto used for production evacuation from a number of clustered marginal oilfields in the area.

The pipeline which has flow capacity for 45,000 barrels of oil per day (bbls/d) now provides Oando an alternative evacuation route for crude oil produced from the Ebendo Field through the Trans Forcados export pipeline, ensuring maximized production flow from and enhanced revenue. 

Oando stated that oil production capacity within OML 56 has grown to 7,140 barrels of oil equivalent per day (boepd) gross for OER and Energia Limited, following the successful drilling of Ebendo wells 5, 6, and 7 over the last year.

Energia Limited is the operator of the asset.

However, export had been restricted to 3,093  bpd via the Agip operated Kwale-Brass NAOC/JV infrastructure, in which OER currently has a 20% interest through the recent $1.5Bn acquisition of ConocoPhillips Nigerian Oil & Gas Business.

Since the production of first oil in 2009, OER, in conjunction with Energia, has spurred the growth of the Ebendo field by 400% from 1,600  bpd to 8,050  bpd in 2014 with 4 additional wells.

The completion and commencement of operations on the Umugini pipeline ensures the Ebendo field can now produce at an increased capacity of 11,250  bpd via the 12” evacuation route to NPDC/Shell’s Eriemu station to the Focados terminal.

“This complements the existing 2,500  bpd evacuation via the cluster GGF and Agip Kwale station to the Brass terminal,” the company stated.

Commenting, Pade Durotoye, CEO Oando Energy Resources said: “We are extremely delighted with the achievement of this key milestone. The completion of the Umugini pipeline will enable us fully maximise the value of our investments to date on the asset, and provides the latitude for further profitable development of prospects and resources identified in Ebendo.”

Ebendo is located onshore, in the central Niger Delta, approximately 100 km north-west of Port Harcourt and covers an area of 65 km2 (16,062 acres). The License includes two fields, Ebendo and the Obodeti field. Oando Energy Resources holds a 42.75% working interest in the field. 

With Phase 3 development expected to commence in Q1 2015, the completed Umugini pipeline effectively doubles the throughput from Ebendo field by 3,727, and as crude oil prices fall, there is an added incentive for producers to drive production volumes to sustain revenue from sales.

 Previously firms like OER, as well as Mart Resources and its partners on the Umusadege Field had to rely on the Agip operated Kwale-Brass infrastructure to get their production to the export pipeline. Over the past couple of years the Agip pipeline has seen some shut-ins for repairs which constrained production for some of the operators in the Niger Delta.

 

 

 

 

Shell Targets $15 b From 2015 Nigerian divestments

Indications are positive that Shell will progress with divestment of brownfield assets in Nigeria next year, heightening the uncertainty in the company’s asset shed out in the country which investors have criticized as unpredictable.

According to Royal Dutch Shell, 2015 will see the company divesting its 30 percent stake and partners’ additional 15 percent interest in unspecified number of operated joint venture assets.

According to a statement from the company, the planned divestment will translate to $15 billion of liquid cash for the Royal Dutch Shell in 2015 as it tries to boost cash flow.

Shell’s Upstream Director, Andrew Brown, stated that the oil company was adopting the divestment programme as part of its global strategy to raise operations funds in the face of global oil market adversity which has seen crude prices slumping from over $100 per barrel to about $62 per barrel.

The UNION reports that global oil prices have dropped by around 30 percent over the past four months, putting heavy pressure on the balance sheets of oil companies already struggling to cut spending.

“We do have a continuous need to recycle our portfolio. $15 billion is still only a few percent of our total assets and we haven’t got any plans to refresh that target,” Brown told reporters.

Mr. Brown’s statement came as Shell Petroleum Development Company of Nigeria (SPDC), a subsidiary of Royal Dutch Shell, declared completion of the assignment of its 30% interest in Oil Mining Lease 24 (OML24) and related facilities in the Eastern Niger Delta to Newcross Exploration and Production.

Total E&P Nigeria Limited (10%) and Nigerian Agip Oil Company Limited (5%) have also assigned their interests in the lease, ultimately giving Newcross a 45% interest.

Total cash proceeds for Shell amount to some $600 million.

OML24 covers an area of some 430 sq km and includes the Awoba, Awoba Northwest and Ekulama fields and related facilities.

The divested infrastructure includes three oil flow-stations and three gas processing plants, in addition to various oil and gas pipelines.

The divested fields produced on average around 13,000 boed during the first half of 2014.

NLNG Rallies Investors for Badagry Dockyard

Nigeria LNG (NLNG) Limited has reached out to the investment community—representatives of banks and other financial institutions— promoting the potential for a new dockyard in the country.

The dockyard, for location in Badagry, follows the conclusion of feasibility studies by Royal Haskoning DHV, an independent, international engineering and project management consultancy headquartered in the Netherlands.

Spokesman for the company, Dr. Kudo Eresia-Eke, stated that feasibility studies for citing the dry-dock were carried out on seven places—Badagry, Lekki FTZ, Ladol Island, Ogogoro Island, Olokola FTZ, Onne, Bonny— before consultants identified Badagry as the best-in-class location for the dockyard.

The studies come as one of the benefits of NLNG’s $1.6 billion contract with shipbuilders, Samsung Heavy Industries and Hyundai Heavy Industries, for the building of six new vessels.

NLNG, leveraging on the agreement with the ship manufacturers, secured a number of lucrative opportunities beneficial to the Nigerian economy including the training of about 600 young Nigerians in various aspects of ship-building, procurement of goods from Nigerian companies and the feasibility studies for building a dockyard.

 “This dry-dock, when completed, holds huge potential for the investment community. Our LNG vessels and very large crude carriers (VLCC) of other companies in the oil and gas, and marine industries, which are currently maintained overseas, resulting in millions of dollars being spent overseas, will soon be maintained in-country with tangible value-adds for the Nigerian economy,” said Babs Omotowa, NLNG’s managing director and chief executive officer at the investment forum held at the proposed site for the dockyard in Badagry.

Observers of Nigeria’s maritime sector have long lamented the absence of an operational dockyard to cater for very large crude carriers (VLCCs) and liquefied natural gas (LNG) carriers as existing dockyards can only handle smaller vessels.

Lack of such a facility has meant that owners of large vessels in Nigeria and some add, the West African region, have had to pay large sums of money todocking facilitieslocated mainly in Asia, Europe and the Americas that can accommodate such large vessels.

The dry-dockis also planned to be operated and managed according to international standards, and when operational,willgenerate revenue and add jobs to the economy.

“I can confidently tell you that if we have a dockyard here, Nigeria LNG with its current 13 vessels in our fleet will be one of your patrons. When our company receives its six additional vessels from Samsung Heavy Industries and Hyundai Heavy Industries, those vessels will also be maintained here. I have no doubt the other players in Nigeria’s oil and gas industry will also be looking to service and maintain their vessels at this ship yard once it becomes operational,” said Capt. Temi Okesanjo, Nigeria LNG’s General Manager, Shipping Division speaking to investors at forum to discuss the potential of the proposed dockyard.

 

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%),  Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).