NNPC, Schlumberger, First E And P Sign $700m Oil Production Agreement

NNPC, Schlumberger, First E And P Sign $700m Oil Production Agreement

The Nigerian National Petroleum Corporation, NNPC, Thursday, signed a $700 million agreement with First Exploration & Production and Schlumberger that would see Nigeria’s crude oil and gas reserves grow by 193 million barrels and 800 billion cubic feet respectively.

The agreement, the NNPC in a statement signed by its Group General Manager, Group, Public Affairs Division, Mr. Ndu Ughamadu, said is for the development of the Anyalu and Madu fields in the Niger Delta under Oil Mining Licence (OML) 83 and OML 85, offshore Nigeria.

The NNPC disclosed that OMLs 83 and 85 are in shallow waters 40 kilometres offshore in the Niger Delta. The NNPC holds 60 per cent interest in the licences, while its Joint Venture partner, First E&P, the operator of the JV, holds the remaining 40 percent interest.

Under the agreement, the NNPC said Schlumberger would provide the over $700 million development cost of the Anyala and Madu fields which would generate 193 million barrels of crude oil into the current reserves of 37.2 billion barrels and an additional 800 billion cubic feet of gas into the nation’s proven gas reserves which currently stand at 197 Trillion Cubic feet of gas.

In terms of daily production, the NNPC said the fields will yield 50,000 barrels of crude oil per day and 120 million standard cubic feet of gas per day by early 2019.

Apart from providing the funds, the NNPC stated that Schlumberger would also provide other oilfield services to the NNPC/First E&P Joint Venture (JV) on a limited exclusive basis.

In addition, the NNPC said 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.

Speaking at the signing ceremony, Group Managing Director of the NNPC, Dr. 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 Corporation 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.

Managing Director and CEO, First E&P, Ademola Adeyemi-Bero, who signed on behalf of First E&P, 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 subsector a credible alternative funding and technical partnership model for growing production and add reserves.

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