Upstreamonline.com reports that Lagos-based independent Amni International is set to increase oil production from its producing assets off Nigeria, and is also in the early stages of assessing solutions to exploit its gas resources in the Niger Delta.

In addition, the company aims to spud a wildcat late this year on its deep-water Central Tano block off Ghana.

Industry sources said Amni has secured a Shelf Drilling jack-up to drill three or four development wells on its assets in OMLs 112 and 117.

A senior company executive told Upstream that the aim is to boost Amni’s production from the current 15,000 barrels per day to about 18,000 bpd.

Amni operates the Okoro and Ima fields in the two licence areas.

The two fields produce via a combination of wellhead platforms, a floating storage and offloading vessel at Ima and a floating production, storage and offloading vessel at Okoro.

The new Okoro wells are expected to have horizontal sections to increase flow rates from existing reservoirs and some will also be drilled to test deeper horizons, said the source.

It is thought that Amni has chartered the Adriatic 1 jack-up for the drilling campaign, having also used the rig in 2016 for Okoro development drilling duties.

Shelf Drilling’s latest fleet report, dated 28 February, disclosed that Adriatic 1 completed a charter for Nigerian junior Conoil last month and was “expected to commence a contract” for (an unnamed customer) in April.

This contract is due to run until September 2018 with a one-well extension option.

Also in OML 112 and 117, Amni and French supermajor Total are evaluating various options to exploit 1.8 trillion cubic feet of gas.

Report courtesy of http://www.upstreamonline.com

Capital expenditure (capex) into oil and gas upstream in Nigeria will hit $25 billion in the next three years.A research body, Globaldata, revealed that the country would add at least $8.4 billion per year on 249 oil and gas fields from 2018 to 2020.

The Nigerian National Petroleum Corporation (NNPC), Royal Dutch Shell Plc and Eni SpA were expected to lead the investment.Already, industry players were hopeful that progress made with the signing of part of the Petroleum Industry Bill would unlock investment opportunities hovering around $250 billion.

NNPC would invest $5.3 billion into the country’s upstream projects by 2020, while Royal Dutch Shell Plc and Eni SpA would follow, with $4.7 billion and $2.8 billion respectively.

According to globaldata, ultra deep water projects will be responsible for over 28, representing $7.2 billion, shallow water projects will account for $6.7 billion or 26 per cent of the spending, while deepwater and onshore projects will necessitate $6.0 billion and $5.5 billion respectively in over the period.

Planned shallow water conventional oil field being operated by Nigerian Agip Exploration Ltd Zabazaba-Etan Project, was projected to lead the capital investment with $4.8 billion.

Similarly, a conventional oil field in the Niger Delta Basin operated by Esso Exploration and Production Nigeria Limited, Owowo West is expected to witness capital expenditure of over $1.8billion.

It put the average remaining capital expenditure per barrel of oil equivalent (boe) for Nigeria projects at $6.7. Ultra-deepwater projects have the highest remaining capex/boe at $11.20, followed by deepwater projects at $9.7. The shallow water and onshore projects have capex/boe at $7.0 and $3.3 respectively.

In a related development, research expert, Wood Mackenzie has said the cost reduction efforts by the industry have largely been successful, adding that the Final Investment Decisions (FIDs) for upstream projects are set to witness new low cost cycle.

According to the report, 2017 saw a significant recovery in upstream FIDs, with the number of project sanctions more than doubled compared to 2016.
“Cost reduction efforts by the industry have largely been successful. The primary focus has been to reduce project footprints through fewer wells, smaller facilities, and the greater use of subsea tie-backs and existing infrastructure. Lower costs, lower breakevens, higher prices and improved corporate finances all contributed to an upgrade in industry sentiment and more projects getting sanctioned in 2017,” the report said.

Principal analyst at Wood Mackenzie, Jessica Brewer, said: “We are seeing significantly smaller projects, alongside a greater appetite for brownfield and expansion projects, and more subsea tie-backs.

“Brownfield developments are popular in the current capital-constrained environment, with less spend and execution risk than a greenfield project, and a faster route to first production. Both investors and operators want to see faster cycle times and quicker returns on upstream projects.

“We should continue to see operators favouring a ‘leaner and meaner’ path in 2018. At the beginning of the year we selected 30 projects we thought were most likely to make FID, and they follow many of the trends we saw emerge in 2017. Average capex continues to fall – averaging only US$2.2 billion – while capex/boe is now only US$4.9/boe, versus US$11.3/boe back in 2011.”

Courtesy of guardian.ng

Nigeria’s Ministry of Petroleum has approved the recommendation by the Department of Petroleum Resources (DPR), to revoke three Oil Mining Leases (OMLs) operated by Shell Petroleum Development Company, a local arm of Shell, the Anglo Dutch major, Africa Oil and Gas report has reported.

The 17 acreages that Shell submitted for renewal purposes were: OMLs 11, 17, 20, 21, 22, 23, 25, 27, 28 31, 32, 33, 35, 36, 43, 45 and 46. The properties were due to expire in 2019.

The acreages revoked include OMLs 31, 33 and 36.

Licences for 13 of the remaining 14 leases were renewed but the DPR proposed that OML 11 be split into three because it is too large (2,800sq km). Those renewed have a new lease of life for another 20 years.

Shell will have a new OML 11, which is one of the three tracts carved out from the old OML 11, but it can apply for only one of the remaining two, according to ranking sources at the Ministry of Petroleum Resources in Abuja.

The old OML 11 was actually under a Shell divestment programme when the AngloDutch giant applied for its renewal; Shell is talking with Transcorp, a Nigerian company which is scouting for $1billion to pay for 45% of OMLs 11 &17. It is not clear how that transaction will work under the government’s “split it to three acreages” instruction.

Other interests, including a company named Robo Michael, claiming to be championing a community cause, have laid claim to those parts of the old OML 11 which lie in Ogoniland, a piece of territory where Shell had been refused access by the communities for upwards of 23 years. Bodo, Bodo West and Yorla fields, all in Ogoniland, are in the south of the old OML 11. It’s not clear where they would be, when the government concludes the split.

But a renewal of OML 11 licence, either in wholesale or in pieces, improves the investment climate around the asset.

Transcorp has struggled, without success, to raise money to purchase the 45% because of the nearness of the licence expiry date.

Courtesy of Africa Oil & Gas Report

Amni is planning with Joint Venture partner NAPIMS, the investment arm of the Nigerian NNPC, the  field development plan for the Tubu oil and gas field in shallow water southeast Niger Delta.

The undeveloped discovery is the main asset in the Oil Mining Lease OML 52 that Amni purchased from Chevron in 2013 who had previously performed a 7-well appraisal on the field. OML 52 is a shallow water block in the southeastern Niger Delta containing the Tubu oil and gas discovery. The block partially straddles Bonny Island where the Bonny oil terminal and NLNG are located. Tubu was appraised by ChevronTexaco in the 2000s,  together with  comprehensive geological studies and advanced development plans.

Amni plans to drill 8 new wells as part of field development.

The management of Nestoil, the oil service arm of the Obijackson Group, owned by Nigerian business mogul Dr. Ernest Azudialu, is to offload part of its shares in oil mining lease (OML) 42 in the Western Niger Delta, which is operated by Neconde Energy Limited, to pay its debts to banks.

According to Oil+Gas Report, Nestoil holds 80 per cent of Neconde and is the prime mover of its special purpose vehicle (SPV) creation, which took over Shell/Total/ENI’s 45 per cent stake in the acreage in 2012. The remaining 55 per cent is held by the Nigerian National Petroleum Corporation (NNPC) and managed by its exploration and production arm, Nigerian Petroleum Development Company (NPDC).

Explaining the reason for the planned sale of equity by Nestoil, the report noted that creating value from the asset has been an epic struggle. While Neconde paid $585 miliion to buy the 45 per cent, it has found it difficult to reach and maintain optimum output and price to pay back the debts and also fund the needed expansion.

The struggle first started with the NPDC, which was chosen as the operator of the OML 42 field on takeover from Shell and partners. NPDC’s alleged inefficiency and struggle for the operatorship of the asset kept production at a very suboptimal level of less than 20,000 barrel per day (bpd) for over three years.

Besides, within the same period of struggle for the operatorship of the field, crude oil price crashed and worsened a bad situation and the Niger Delta militants struck and bombed the crude evacuation pipeline of the field, the Forcados pipeline, forcing the terminal to shut down for 16 months between February 2016 and June 2017.

However, out of the $585 million paid for the asset, the consortium partners (Nestoil, Yinka Folawiyo and KOV) paid $435 million as equity and collectively raised $150 million as debt, but what’s not clear is how much of the $435 million equity was raised as debt by the members of the SPV.

Efforts made by The Nation for further clarifications from the Managing Director/Chief Executive Officer of Neconde Energy, Mr. Frank Edozie, did not yield any fruit as calls and short messages sent to him were not responded to.

But last year, Obijackson Group Chairman, Dr. Ernest Azudialu and Mr. Edozie, at a press briefing in Lagos, lamented the huge financial challenges facing Neconde Energy following the hiccups faced by the downturn in the global oil gas industry since 2014. The challenges, especially crash in price coupled with security issues in the Niger Delta and struggle for operatorship, which stalled production increase, made it difficult to operate profitably to pay the banks.

At a press briefing meant to alert the public of the plans by Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to picket Neconde Energy, following labour issues within the company, the management decried PENGASSAN’s action, considering the enormous challenges already facing the firm.

Azudialu said the Neconde employees, including those that had left the company, wanted transfer allowances for being transferred to Delta State where the oil field is located while the $558million borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its and another loan, which is almost the same amount used to repair the facilities and interests are only being serviced. Therefore, the employees, who want to leave the company should take the company’s existing severance package.

Debts: Nestoil to sell some shares in Neconde’s OML 42 asset

News Update

_________