Nigeria to Boost Output by 1.5mn BPD by 2007
NNPC: Oil exports from Bonga to fetch $41bn revenue
By Patricia Ubaka with agency reports, 06.06.2006
Minister of State for Petroleum Resources, Dr. Edmund Daukoru has said Nigeria will increase its oil output by 1.5 million barrels per day by next year, contributing to Organisation of Petroleum Exporting Countries' (OPEC's) spare capacity.
The country and its co-partners in the Bonga oil block will also earn estimated revenue of $41 billion (N5.25 trillion) from export of crude oil over the next 20 years life span of the deep offshore field, the Nigerian National Petroleum Corporation (NNPC) disclosed.
Daukoru who is also OPEC's president made the comments after meeting South Korean President Roh Moo-hyun yesterday.
Over the past year Nigeria, according to him, Nigeria has begun pumping oil, Shell's 225,000 bpd Bonga field and ExxonMobil's 150,000 bpd field, with more developments led by Total and Chevron expected to follow over the next two years.
The offshore fields have typically been immune to the kind of militant attacks that have shut in 550,000 bpd of onshore production in the Niger Delta, a quarter of Nigeria's total.
But an unprecedented raid on a rig 40 miles offshore Friday had heightened fears about the safety of more remote facilities when gunmen kidnapped eight foreign workers, who were freed Sunday, in that attack.
OPEC members agreed on Thursday to leave oil output unchanged near its full capacity, news that failed to soothe oil markets as United States crude traded up $1.10 at $73.43 a barrel yesterday, a figure which is within $2 of a record high.
A greater volume of spare capacity could help OPEC stem an over three-year oil price rally, fuelled in part by fears that producers and refiners would be unable to compensate supplies in the case of any sudden, unexpected outages.
Meanwhile, the country and its co-partners in the Bonga oil block will earn estimated revenue of $41 billion (N5.25 trillion) from export of crude oil over the next 20 years life span of the deep offshore field.
Also, the Nigerian National Petroleum Corporation (NNPC) has set for itself, a crude oil production target of 3.0 million barrels per day (bpd) for this year from both joint venture operations and output from fields operated under the production sharing contract (PSC).
The General Manager, PSC/FES of the National Petroleum Investment Mana-gement Services (NAPIMS), Mr. Abiye Membere, disclosed at a Petroleum Roundtable talks in Lagos that oil exports from the Bonga deepwater field would fetch $2 billion annually at average oil price of $60 per barrel and a production rate of 225,000 bpd.
Bonga field, operated by Shell Nigeria Exploration and Production Company (SNEPCO), went into production in November, 2005 and recorded its first shipment of crude last January.
According to the estimates from NAPIMS (the NNPC subsidiaries overseeing Federal Government's investments in oil operations), Shell may be able to recoup the $3.6 billion spent in bringing the field up to production within the next two years, thereby paving way for the Nigerian government to begin to have a share from the profit generated from oil exports from the field.
"Economic impact from the Bonga field include increase revenue from oil and gas production, increase in oil and gas production, increase in Nigeria content, infrastructure and human resources development," said Membere.
The NAPIMS chief said that the Bonga field holds a total recoverable reserves of 1 billion, with 18 wells drilled under the first phase of the field development programme. Another 16 wells, he said, would be drilled in the second phase of the programme, which will commence in the third quarter of 2006.
"The estimated Bonga main development cost is below $6 per barrel," said Membere.
Shell holds 55 percent in the field. Other partners in the field are ExxonMobil, 20 per cent, Agip ad Elf, 12.5 per cent, with the NNPC being the concession owner.
The Bonga field is among the 11 major oil discoveries achieved in the deepwater region between 1996 and 2004, which added more than 7 billion barrels of oil and condensate to the Nigeria's reserve base and about 27 trillion cubic feet of gas.
However, the NNPC has set the target of attaining and sustaining oil production level of 3 million bpd in 2006. Current production level has remained at 2.4 million bpd.
The Managing Director of Nigerian Petroleum Development Company (NPDC), Mr. Smart Fadayomi, who made this known also at the Petroleum Roundtable, said that in line with this production target, the NPDC, which is the upstream arm of the NNPC, has been mandated to raise its production level from 64,000 bpd to 150,000 bpd by 2008.
The company also has the objective to grow its oil reserves base from 350 million barrels to 550 million barrels during the same period, which according to Fadayomi, is line with the overall national objectives of achieving 40 billion barrels of crude reserves by 2010.
AI
