July 16, 2024

OML 133: ExxonMobil, NNPC Ltd to unlock 165 million barrels from Erha Field  


Olubunmi Martins

The Nigerian National Petroleum Company(NNPC) Limited has expressed confidence in the potential of Erha Field in OML 133 to boost Nigeria’s net crude oil production.

Mr. Bala Wunti, Group General Manager of the National Petroleum Investment Service (NAPIMS) expressed this optimism in his evaluation of the asset following the review of the country’s Production Sharing Contract Agreements (PSC) between the NNPC and its Joint Venture Partners.

EnergyDay gathered that the Erha North Phase 2 project has been on a slow pace for about  seven(7) years, due to issues associated with country’s fiscal policies, which has now been resolved through the take off of the Petroleum Industry Act(PIA).

ExxonMobil at the initial commencement of field development said that the asset is estimated to develop an additional 165 million barrels from the currently producing Erha North field.

The multinational further stressed that it will create additional shareholder value by optimizing existing infrastructure, which reduces capital spending requirements and improves capital efficiency.

EnergyDay’s check showed that the project was supported by strong performance from Nigerian contractors, which accounted for more than $2 billion of project investment for goods and services, including subsea equipment, facilities, and offshore installations.

ExxonMobil in the statement said, “These contracts are bringing direct and indirect benefits to the Nigerian economy through project spending and employment, consistent with project objectives,”

“Expansion work on the asset will increase production by 65,000 barrels of oil per day. This puts total Erha North field production at approximately 90,000 barrels per day.

The Erha North field was discovered in 2004, and initial production began in 2006. Shell Nigeria Exploration and Production Company owns the remaining 43.75 percent.

Esso Exploration and Production Company Limited is a subsidiary of the ExxonMobil Group in Nigeria.

On a field visit to OML 133, Wunti , whose office is responsible for investment decisions and management of joint venture assets for the country, said that the NNPC is more committed to collaborating with its partners and taking advantage of the Petroleum Industry Act.

He said,  “We have reassured the company (Esso Exploration ) of our commitment to collaborate and take advantage of the PIA and the re-negotiated PSC to grow reserves, production, and profitability for all the stakeholders and partners.

“We have reassured the company (Esso Exploration) of our commitment to collaborate and take advantage of the PIA and the re-negotiated PSC to grow reserves, production, and profitability for all the stakeholders.

Mr. Bala further added that his visit was in line with NNPC Ltd’s drive for collaboration to create, capture, and deliver value, which is driven by our Group CEO, NNPC Ltd., Mallam Mele Kyari.

EnergyDay checks revealed a steady decline in ExxonMobil’s production profile in the country prior to the passage of the Petroleum Industry Act, with the company’s further resolution to divest from a total of 18 onshore assets while retaining its deep offshore operations.

Official facts from the Nigeria Upstream Petroleum Regulatory Commission(NUPRC) showed the OML 133, steadily declined in crude production from its 60 million barrels of production output in 2010 to 53 million barrels in the following year.

The well further dropped to 45 million , 37 million, and 33 million barrels in subsequent consecutive years.

However, the asset ramped up production to 45 million barrels in 2017 and remained slightly on course until the passage of the Petroleum Industry Act in August 2021.

The new fiscal regime , according to Bala Wunti, should see the asset climbing its production to attain 90,000 barrels a day as originally projected.

EnergyDay checks further revealed that the Erha brand of crude oil is the largest supplier of crude oil from Nigeria to the African market.

ExxonMobil, in official statements , disclosed that the Erha field development will provide considerable value-chain business opportunities to the Nigerian economy, together with other stakeholders.

The Nigerian government has shifted its focus to the deep offshore terrain to ramp up the country’s oil production to regain economic stability. The gradual but steady erosion of confidence in onshore field operations, deeply undermined by incidences of oil theft and pipeline vandalism, has brought the country to the brink of crisis.

It is expected that Deep Offshore assets, encouraged by the new fiscal arrangements, will boost oil production by an additional one million barrels a day, according to Gbenga Komolafe, helmsman of the country’s petroleum regulatory agency, the Nigeria Upstream Petroleum Commission.