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Map for large E.I.A. image
Smoke from giant gas flares hovers above Ebocha-Egbema.
Rigzone Reporter Friday, April 27, 2007
Nigeria is the largest oil producer in Africa and the eleventh largest in the world, producing about 2.4 MMb/d. Recently, Nigeria has seen significant discoveries made as well as projects come online.
Total, one of West Africa’s largest players, began developing the offshore Akpo Field on the Oil Mining License (OML) 130 in May 2005. Discovered in 2000, the Akpo gas and condensate field will come onstream in late 2008. Akpo is in 1,100 – 1,700 m of water.
The field development plan calls for 22 producing wells, 20 water injection wells, and 2 gas injection wells tied back to an FPSO with a storage capacity of 2 MMbbl. Peak production is expected to reach 225,000 boe/d, of which nearly 80% is condensate. The condensate will be exported via a buoy 2 km from the FPSO, while the gas will be piped 150 km to the Amenam/Kpono platforms, from where it will be sent to the Bonny liquefaction plant.
Total holds a 24% interest in the OML 130, alongside NNPC, Petrobras, and Sapetro.
In July 2005, Shell made two discoveries in “Big Cat” prospects. The Transocean drillship Deepwater Pathfinder drilled blocks OPL 322 and OPL 245, both in frontier areas. Shell Nigeria Exploration Properties Alpha Ltd. drilled Bobo -1X in OPL 322 to 5,173 m TD in 2,479 m of water, the second deepest well in offshore Nigeria. Drilling was completed on July 16, 2005, and found over 140 m of hydrocarbon bearing sands. Deepwater Pathfinder also drilled the Etan -1X well in block OPL 245 to 4,574 m TD in 1,720 m of water. The well logged 120 m of hydrocarbon bearing sands. Drilling was completed on Feb. 20, 2005. OPL 245 is 100% held by Shell Nigeria Ultra Deep Ltd.
Recent deepwater success off Nigeria has fueled the countries E&P efforts.
Nigeria also is the home to Royal Dutch Shell’s Bonga deepwater field, which came onstream in late 2005. Producing 225,000 b/d and 150 MMscf/d, Bonga was the first Nigerian deepwater field to come onstream.
Deepwater activities accelerated in February 2006 with Peak Petroleum and Equator Exploration’s confirmed gas discovery on the B-DX1 well (Bilabri) in the OML 122 license area. OML 122 is in 40-300 m of water, east of Shell’s Bonga Field on OML 118.
In October 2006, Equator Exploration drilled the Bilabri D2 well to a deviated depth of 2,912 m (2,578 m TVD). The well was logged successfully, but as it encountered the C1 sands 48 m shallower than expected, it was unable to test for oil in the C1 objective. However, the well encountered approximately an 8 m column of oil in the C2 sands of the reservoir. The C2 oil is of excellent quality with a 39° API. The existence of this oil column is significant in that it was not anticipated to encounter oil-bearing portions of the C2 sands at this location. The well was subsequently sidetracked for geological reasons to a deviated depth of 3,220 m (2,386 m TVD). Operations were ceased after the bottomhole drilling assembly became stuck and could not be recovered. The well was suspended for future sidetracking and completion as a C2 production well for the Bilabri development.
In November, the Bulford Dolphin drilled appraisal well Bilabri D3 to 2,555 m. The well was logged successfully over the C1 and C2 sands. All logging runs are complete, and it has been determined that the primary objective C1 sands are gas bearing. The open-hole section of the well will be suspended and abandoned. The results of the Bilabri D3 well do not affect the base case development scheme for the Bilabri Field. The field development plan calls for three subsea wells to be produced through an FPSO. First oil production is expected in the first half of 2007.
In May 2006, Peak Petroleum and Equator Exploration made another natural gas discovery in the exploratory Owanare-1 well on OML 122. Owanare-1, the second well drilled on OML 122, is in 137 m of water. The well encountered high pressures and temperatures at 4,100 m, making it necessary to suspend the well for later possible production.
ExxonMobil announced the start up of Erha on OPL 209 off Nigeria in April 2006. ExxonMobil subsidiary Esso Exploration and Production Nigeria Ltd. (EEPNL’s) project is 96 km off Nigeria in 1,188 m of water. The development includes Erha and Erha North, a satellite development.
Saipem’s Scarabeo 7 semisubmersible is working at the Erha North Field and Noble’s Homer Ferrington semisubmersible is on the Erha Field. An FPSO handles production from subsea wells that are still being drilled, but does not have drilling capability. About 190,000 b/d is produced from both fields.
EEPNL is the operator of the Erha and Erha North developments and has a 56.25% participating interest in the Block 209 contract area. Shell Nigeria Exploration and Production Co. holds the remaining 43.75%.
Esso followed up the Erha Project with an oil discovery in OPL 214 in May 2006.
The Uge-1 discovery well on OPL 214 was drilled in 1,263 m of water to 5,130 m TD and encountered more than 100 m of oil. The Uge structure is 145 km south-southeast of the Erha deepwater development. Studies and data analyses are under way to fully evaluate the discovery and development options for Uge. Transocean’s drillship, Deepwater Pathfinder, drilled the well. Esso is the operator of OPL 214 with a 20% working interest. Other working-interest owners are Chevron Nigeria Deepwater B Ltd. 20%, Phillips Deepwater Exploration (Nigeria) Ltd. (a subsidiary of ConocoPhillips) 20%, Oxy Nigeria Exploration & Production Ltd. (a subsidiary of Occidental Petroleum Corp.) 20%, Nigerian Petroleum Development Co. 15%, Sasol Exploration and Production Nigeria Ltd. 5%, and Nigerian National Petroleum Corp. (NNPC) is the concessionaire. Uge-1 represents the first discovery on the license.
In August 2006, Total subsidiary Elf Petroleum Nigeria Ltd. drilled two appraisal wells in the Usan Field in deepwater OPL 222. The Usan Field, which was discovered in 2002, is in 800 m of water. In 2004, a western Usan extension was confirmed by the drilling of Usan 5 and 6. Last year, Usan 7 and 8 confirmed an eastern extension of the Usan Field. Both wells were drilled using Transocean’s M G Hulme, Jr. semi. The field development plan includes 35 subsea wells connected to a 2 MMbbl capacity FPSO by subsea lines and risers. The processing capacity is around 150,000 b/d. First oil is planned by 2010. NNPC is concessionaire for OPL 222 under a Production Sharing Contract operated by Elf Petroleum Nigeria Ltd. 20% in partnership with Chevron Petroleum Nigeria Ltd. 30%, Esso Exploration and Production Nigeria (Offshore East) Ltd. 30%, and Nexen Petroleum Nigeria Ltd. 20%.
Due to come onstream in 2008 with 250,000 b/d, ChevronTexaco’s Agbami Field is one of the largest in deepwater West Africa. The Agbami-2 appraisal well confirmed that the Agbami structure is a giant discovery with potential recoverable reserves in excess of 1 Bbbl. The structure spans an area of 45,000 acres and extends from Block 216 into Block 217 offshore Nigeria in approximately 1,463 m of water. The initial well, Agbami-1, encountered 128 m of oil pay in multiple zones. Agbami-2 encountered 163 m of pay in five separate oil-bearing zones, one of which flowed at a maximum rate of 10,000 b/d with a wellhead pressure of 2,200 psi. ChevronTexaco and partners are developing the Agbami Field using subsea wells tied back to an FPSO and a dry tree unit with drilling capabilities located in about 1,341 m of water. Production will flow from the dry tree unit to the FPSO for processing. The operator expects 37 wells will be necessary to fully exploit the field.
Further offshore exploration is
assured as Nigeria offers 60 crude oil
blocks in the next bidding round this year.
Natural Gas reserves in Nigeria
are, in energy terms , at least twice that of crude oil reserves,
natural gas being in the region of 124 trillion cubic feet (TCF). At
present utilisation levels, this will last for over 100 years. Natural
Gas is a naturally occurring gaseous mixture of hydrocarbon gases found
in underground reservoir. It consists mainly of methane (70% - 95%).
With small percentages of ethane, propane, butane, pentane and other
heavier hydrocarbons with some impurities such as water vapour,
sulphides, carbon dioxide, etc. The ethane, propane, butane, pentane
etc, hydrocarbon components of natural gas are collectively called
natural gas liquids (NGLs). These NGLs are found in larger quantities
in associated gas streams than in non-associated gas streams.
Natural gas is a versatile and
environmentally preferred fuel as it produces no soot or ash, nor
pollutants and as such has a major role to play in alleviating air
pollution problems. It is also cheaper than most competing fuels and
has become a major source of energy for both commercial and industrial
consumers as well as a chemical feedstock for numerous processes.
Investment Opportunities in The
Natural Gas Sector There is a host of investment
opportunities in the Natural Gas industry;
Production of Natural Gas Interested entrepreneurs can
apply to the Ministry of Petroleum Resources for appropriate licenses,
to prospect for and produce oil and gas. Attractive fiscal regimes to
ensure profitability of this aspect of the gas industry as recently
approved by government include, but not limited to the reduction in
petroleum profit tax from 85% to 65.75%.
Natural Gas Distribution
Investors are encouraged to
wholly and independently own and operate natural gas distribution
systems. These companies would purchase gas from NGC at various City
Gates, and distribute the gas through pipelines for sale to individual
domestic and industrial consumers in a specific area. There would also
be opportunities to distribute gas as Compressed Natural Gas (CNG)
using tube trailers to transport it users
who may not be within easy reach or close enough to our existing gas
facilities.
CNG Automotive Applications
As the use of CNG as an
automotive fuel becomes commercialised, there will be opportunities to
invest in CNG filling stations. There will also be need for conversion
workshops to convert vehicles from petrol/diesel to CNG operations, and
for retail outlets to sell the CNG conversion kits.
Natural Gas Liquids
Natural Gas Liquids could be
recovered from gas streams, which are richer in heavier hydrocarbons
(ethane, propane, butane, pentane, etc.). These liquids have high
market values and find applications either in their raw form solvents,
feed stocks (for production of various chemicals) and liquid fuels or
fractionated into their components, viz Liquified Petroleum Gas (LPG),
Cooking Gas, natural gasoline, and various Special Boiling Point (SBP)
solvents. Opportunities abound for interested third parties or private
sector to invest in the establishment of NGLs extraction plants to
recover natural gas liquids from major supply schemes.
Natural Gas Fired Equipment
& Accessories
Natural gas is the cleanest,
most convenient form of fossil fuel, and it is also cheaper than its
competitors - fuel oil, diesel, and Liquefied Petroleum Gas (LPG). It
is, therefore the prime choice for industrial processes of heating and
drying, cooking, and baking of foods etc. This provides opportunities
to invest in the marketing and servicing of gas-fired heaters, dryers,
ovens, air-conditioners refrigerators and kilns etc, for a whole
variety of industries.
Downstream Investment
Natural gas is a favoured
feedstock for many chemical processes e.g. to make methanol, ammonia,
urea fertilizers, etc. The Nigerian Gas Company would want to encourage
entrepreneurs to invest in such project, for which NGC would assure
regular and interrupted supply of natural gas.
Typical Levels of Investment
In the natural gas industry, these range from the very large e.g. for
exploration and production facilities in the order of hundreds of
millions of dollars to quite modest amounts on the marketing side.Conclusion
It has been established, that
Nigeria is blessed with abundant reserves of natural gas. Prospects for
the growth of the gas industry are enormous when viewed from the
various industrial and commercial consumers that need to be served and
the potential local market available for chemicals derived from natural
gas, which are currently imported. The Federal Government through
Nigerian National Petroleum Company, NNPC and its subsidiary, NGC, is
committed to promoting and providing favourable economic environment to
allow private companies (Local & Foreign) to participate in
Nigeria's gas industry.
To recapitulate, the following investment opportunities are available and private companies are highly encouraged to invest in such ventures.
* Setting up of gas utility companies responsible for gas distribution from "City Gates" to ultimate industrial, commercial and domestic consumers in urban centers.
* Establishing of CNG plants, conversion workshops and filling stations to commercialise the use of CNG as automotive fuel.
* Establishment of small and large scale plants to manufacture chemicals using natural gas as feedstock. The plants can be totally owned by the interested private innovators and such companies will be free to market the products both locally and externally.
* Commercialisation of NGLs for export or local markets either in the bulk form or as LPG and natural gasoline fractions.
Options available here are for
the interested private parties to invest either solely or in
partnership with NGC
to set up the recovery plants and market the product locally or externally.
to set up the recovery plants and market the product locally or externally.
FOR FURTHER ENQUIRIES AND
INFORMATION, CONTACT:
1. Managing Director, 2. Manager, Commercial Department, Nigeria Gas Company Limited Nigeria Gas Company Limited
Odin Road, Ekpan, Odin Road, Ekpan, P.M.B 1288, Warri, P.M.B 1288, Warri,
Delta State, Delta State, Nigeria. Nigeria.
Tel: 053-252224 Tel: 053-252328 Fax: 053-252233
3. Head, Port-Harcourt Commercial Office, Nigeria Gas Company Limited,
49, Moscow Road, Port-Harcourt, P.M.B. 5342, Tel: 084-233909, 232349
4. Head, Abuja Commercial Office, Nigeria Gas Company Limited,
Plot 76, Yaoundé Street, Wuse, Zone 6 P.M.B. 398 Abuja – F.C.T.
Tel: 09-5230770, 5230385.
5. Head, Lagos Commercial Office, Nigeria Gas Company Limited,
13B, Oju-Olobun Close, Off Idejo Street, Off Adeola Odeku Street,
Victorial Island, Lagos. Tel: 01-2610637, 2610637, 2610639.
6. Head, Public Affairs Department, Nigeria Gas Company Limited,
Odin Road, Ekpan, P.M.B. 1288, Warri Delta State, Nigeria. Tel: 053-254262