Nigerian National Petroleum Corporation, NNPC has signed a $700 million agreement with First Exploration & Production and Schlumberger for the development of two oil fields in the Niger Delta.
The NNPC, in a statement in Abuja, said the fields are the Anyalu and Madu fields under Oil Mining Licence, OML, 83 and OML 85, offshore Nigeria.
The NNPC said the agreement would help generate 193 million barrels of crude oil into Nigeria’s current reserves of 37.2 billion barrels and an additional 800 billion cubic feet of gas into the country’s proven gas reserves which currently stand at 197 trillion cubic feet of gas.
It added that in terms of daily production, the fields would yield 50, 000 barrels of crude oil per day and 120 million standard cubic feet of gas per day by early 2019.
The NNPC stated that under the agreement, Schlumberger would provide the funds to develop the fields put at over $700 million and would also provide other oilfield services to the NNPC/First E&P Joint Venture (JV) on a limited exclusive basis.
It added that a joint project team would be established to drive technology transfer whilst leveraging on the global technical expertise of Schlumberger and the extensive local knowledge of the JV partners
The NNPC disclosed that OMLs 83 and 85 are in shallow waters 40 kilometers offshore in the Niger Delta. The NNPC holds 60 per cent interest in the licences while, First E&P, the operator of the JV, holds the remaining 40 per cent interest.
Speaking at the signing ceremony, Group Managing Director of the NNPC, Mr. Maikanti Baru, said the innovative approach to funding JV operations in response to the challenging economic environment was novel and aligned wholly with the government’s aspiration to increase crude oil and gas production, reserves growth and monetization of the nation’s enormous gas resources.
He added that apart from serving as a test case for future funding mechanism, the approach adopted was in sync with the realisation of the corporation’s 12 Business Focus Areas (BUFA) which is to ramp up crude oil production and reserves growth, amongst others.
He said the projected increase in production of gas would come in handy as the NNPC strived to sustain the supply of gas to the existing power plants as well as the planned power projects billed to come on board within the period.
Also speaking, Managing Director and Chief Executive Officer, First E&P, Ademola Adeyemi-Bero, who signed on behalf of his company, remarked that the partnership between the NNPC/First E&P JV and Schlumberger would infuse a novel asset development model which combines First E&P’s local knowledge and market position as an indigenous operating company, with Schlumberger’s financing and broad technical capabilities.
He added that the joint project team would strengthen First E&P’s project delivery abilities and the model would offer the upstream sub-sector a credible alternative funding and technical partnership model for growing production and adding reserves.
On his own part, Patrick Schorn, Vice President, Schlumberger, who signed on behalf of Schlumberger traced the advent of the multi-national oil fields service company in Nigeria to the first commercial oil find in Oloibiri when Schlumberger played a role in Shell’s drilling effort.
He noted that the partnership with NNPC and First E&P would provide Schlumberger the opportunity to leverage on its reservoir knowledge, oilfield services and project management expertise to lower development costs and maximize value for the partners.
