ERHC Energy Inc (ERHE)

[Spec29]

Nigeria's Oil & Gas Fields - Total's Operations.
APS Review Gas Market Trends - August 10, 2009


Print ShareThis Get the Mag Weekly Updates [-] Text Size [+]

Elf Petroleum Nigeria Ltd, part of Total, has seen its production capacity rise to 230,000 b/d - with the coming on stream of the Amanam-Kpono production system. Amenam-Kpono reached a plateau of 125,000 b/d in 2004; but only 82,000 b/d of the production stream is involved in the 60-40 JV between NNPC and Elf, while Amenam-Kpono is operated under a PSC. Elf should expand its capacity for the JV to more than 400,000 b/d by 2011/12, with most of Amenam-Kpono excluded. Amenam alone can produce up to 125,000 b/d (see below).

About 130,000 of Elf's capacity remains shut in due to the unrest in the Niger Delta, where it operates, so its actual output now is 100,000 b/d.

Obagi was Elf's first discovery in Nigeria in 1964. For many years it was its main field producing 60,000 b/d of the Bonny Medium type. But Obagi began to deplete in the early 1990s. Now Elf's fields lie onshore and offshore. Some old depleting fields have been replaced by offshore fields: Afia, on stream in March 1995; Odudu, on stream in June 1995; Ime, on stream in October 1995; Edikan, on stream in January 1996; and Ofon, a major field found in August 1995 in shallow waters near the company's Odudu offshore terminal and on stream in December 1997 with a capacity of 60,000 b/d which would eventually rise to 100,000 b/d.

Elf's crudes are blended into an Odudu grade similar to Bonny Light - the latter being produced by a Shell-led JV in which Total has 10% (see OMT). Total exports from the Odudu terminal, close to Mobil's Qua Iboe and Oso. Obite, a major gas field, has been developed at the cost of $500m and feeds the Shell-led Bonny LNG complex of NLNG. Total has a stake in the NLNG venture (see gmt7NigrGasExpAug17-09).

Total's Amenam field contains reserves of around 1 bn barrels of oil equivalent. Amenam/Kpono combines two connected offshore fields. Amenam, 125,000 b/d, is in Total's PSC Block OML99 in the south-eastern part of the Niger Delta 35 km off the coast. Kpono is in ExxonMobil's adjacent Block OML70. After a two-year dispute, in March 1998 Elf won the contest as the Nigerian regulators gave the French major the right to be the operator of Amenam/Kpono with a 31.2% stake. Now NNPC holds 60% in this and ExxonMobil only has 8.8%. Development of Amenam/Kpono has cost $1 bn. Its FPSO vessel serves Total's other fields and is linked to Odudu through a 30 km pipeline.

Completion of the second phase of Amenam/Kpono for delivery of gas to NLNG Trains 4 & 5 in 2006 was a priority for Elf. Among other projects is development of a deep-water field owned by Sapetro, a Nigerian company, for which Total is the technical operator under a service deal. Total is also upgrading its Obite-Rumuji gas pipeline.

In early 1999 Elf sold to Canadian Occidental, now Nexen, 20% in five Nigerian tracts, two deep-water blocks: OPLs222 and 223, and three onshore areas. Chevron and ExxonMobil are Total's other partners in these, with each holding 30%. In OPL222 Elf had in 1999 found Ukot under 1,800 feet of water.

Total on Aug. 1, 2005, said it had found more oil in the Usan field. Two appraisal wells, drilled at around 110 km offshore and in water depths of around 800 metres, helped confirm an eastern extension of Usan. In 2004, a western extension of Usan was confirmed by two other appraisals. The field was found in 2002. Total is developing the field with 35 subsea wells connected to a 2m-barrel floating storage tanker. The offshore facility will process around 150,000 b/d.

Akpo, a big gas/condensate field in commercial production since early 2009, has a peak capacity target of 225,000 b/d. It is in OPL246, the most prospective deep-water block off West Africa, and has more than 1 bn barrels of recoverable condensate and 4 TCF of gas. Akpo is near the boundary of the Joint Development Zone (JDZ) set up by Nigeria and Sao Tome. It may extend into the JDZ. Its development has cost over $5 bn. Its partners in this are CNOOC, China's largest offshore oil firm (45%), the local firms Oando (30%) and South Atlantic Petroleum, NNPC and Petrobras (13%). Akpo's gas will be exported to Europe and the US in LNG form. South Atlantic is owned by Theophilus Danjuma, a former Nigerian defence minister (see background in gmt6NigrFieldsAug6-07).

Total in February 2009 began developing Usan, a major deep-water oilfield. Found in 2002, Usan is at a water depth of 2,461 ft in OML-138 about 100 km off the coast in the eastern delta. Its development includes a FPSO vessel with a storage capacity of 2m barrels. First production is expected in late 2011 with peak output of 180,000 b/d. The associated gas will be reinjected in the reservoir. The partners in his JV are Total (20%), Chevron (30%), ExxonMobil (30%) and Nexen (20%).

Total in October 2008 launched the onshore OML58 upgrade project, in which it holds 40% with NNPC having 60%. OML58 is in Rivers States, about 85 km north-west of Port Harcourt. Its Obite field and gas treatment plant has been on stream since December 1999. The upgrade is to raise its capacity from 10.6 MCM/d to 15.6 MCM/d and increase the field's oil and condensate output by around 15,000 b/d to 140,000 b/d from 2011. The project will comply with Abuja's "Flare Out" regulations, improve safety and extend the life of existing installations as well as enhancing oil recovery. It will develop more than 280m barrels of oil equivalent. Phase-II of the project is under evaluation in order to develop additional proved and probable reserves (about 230m boe) using these upgraded facilities. The objective of the project is to contribute to meet the growth of domestic demand for gas in Nigeria in line with Abuja's expectations, as well as to supply gas to NLNG. In line with Total's commitments, the upgrade project will contribute significantly to Nigeria's local content policy - over 90% of the total man hours worked on the project will be performed locally.

Total in December 2008 found 40? API oil in the south-eastern corner of OML102, offshore south-eastern Nigeria, about 15 km from the Ofon Field, in a water depth of 70 metres, where the French major holds 40% and NNPC has 60%. The Etisong-1 well was drilled to 2,207 metres and produced from turbiditic reservoirs more than 6,000 b/d during the test. That was the first step of an exploration and appraisal programme for 2009-10 to demonstrate the feasibility of a new development pole on OML102, combining the Etisong main discovery and surrounding structures.

Total on Nov.4, 2008, said it had signed an agreement with OMEL Energy Nigeria Limited (OENL) and OMEL Exploration and Production Nigeria Limited (OEPNL) to acquire interests of 25.67% in deep-water OPL285 and 14.5% in deep-water OPL 279. OENL remains the operator for OPL285 and OEPNL is the operator for OPL-279. The Nigerian company EMO Exploration and Production Limited is partner in both blocks.

Covering an area of around 1,170 sq km, OPL285 is about 80 km offshore near the Bonga field in water depths ranging from 400 to 900 metres. OPL279 is some 100 km offshore near the Erha and Bosi fields in water depths ranging from 800 to 1,800 metres, with the area being about 1,125 sq km. For each block, the first exploration period, which ends in 2012, includes acquisition and processing of 500 sq km of 3D seismic and the drilling of one exploration well. In the second five-year exploration period, which is optional, the work commitments will cover the acquisition of a further 500 sq km of 3D seismic and the drilling of two exploration and/or appraisal wells.

Total in March 2008 signed an agreement with Nigeria's Conoil Producing Ltd to farm into deep-water OPL257 with a 40% interest. Conoil remains the operator with 50%, and a local company holds the remaining 10%. Abuja has approved this. Covering an area of 372 sq km, OPL257 is some 150 km offshore, in water depths ranging from 1,600 to 1,800 metres. It lies south of OML130, where Total's Akpo and Egina fields are located, and north of the Joint Development Zone (JDZ) administered by Nigeria and Sao Tome & Principe. Total will be the technical adviser. Conoil began its activity in 1984 and currently operates six licences in the Niger Delta.



http://www.entrepreneur.com/tradejournals/article/205637136.html