July 21, 2024

Edo state govt., Decklar sign sale agreement for supply of 150,000 barrels of crude oil to Edo modular refinery

Oredola Adeola

The management of the Edo Refinery and Petrochemical Company Limited (ERPC) and Decklar Resources Inc, in collaboration with its co-venturer Millenium Oil & Gas Company Limited (“Millenium”)- operator of Oil Mining Lease (OML) 11 – have entered into a new sale and purchase agreement for the supply of 150,000 barrels of crude oil to the Edo modular refinery.

Crusoe Osagie, Special Assistant on Media Projects to the Edo State Government, revealed this in a statement released on Sunday.

According to Osagie, the crude would be sourced from the Oza Oil Field, which is operated by Decklar Resources Inc and Millenium Oil and Gas Company Limited.

EnergyDay gathered that the Edo Modular refinery is a 6,000bpd capacity plant, located in Ologbo, Ikpoba, Okha Local Government Area of Edo state, managed and owned by the Edo State Government.

The modular refinery commenced production in January 2023 with its first supply of 10,000 barrels of crude feedstock.

According to the statement, the refinery is being expanded to 21,000bpd. The Government added that the facility with its feedstock can produce 500,000 litres of diesel, 300,000 litres of Naphtha, and 200,000 litres of low-pour fuel oil, the statement said.

Sanmi Famuyide, Chief Executive Officer of Decklar Resources Inc., , in the statement confirming the agreement, said that Decklar and Millenium are at an advanced stage of executing a new 150,000 bbls crude oil sale and purchase agreement with ERPC, which is expected to include terms for invoicing and payment after the delivery of each cargo of 10,000 bbls of crude oil.

He said, “We are very pleased that payments for the sale of crude oil from the Oza field continue to be received. Deliveries to ERPC in Edo State are ongoing on a consistent basis, and the anticipated doubling of the contracted truck fleet is expected to enable the company and our co-venturer Millenium to increase the volume and consistency of deliveries of oil to market.

“Total deliveries of approximately 17,000 bbls have been completed to date, with invoices issued for 15,000 bbls. Payment for the first 5,000 bbls invoice has been received, and payment for the subsequent invoices is expected in the next week under the terms of 30,000 bbls sales agreement.

“Additional deliveries are anticipated to continue on an ongoing basis. The current total available fleet of 20 contracted trucks is expected to consistently deliver approximately 5,000 bbls per week.

“With the execution of the additional 150,000 bbls sale and purchase agreement with ERPC and the execution of the new DMCL agreement, Decklar and Millenium plan to secure additional trucks and permits to service the increased sales volumes and allow for the Oza Oil Field to be produced at full capacity from the Oza-1 and Oza-4 wells, ” Famuyide said.

EnergyDay further gathered that Decklar and Millenium have also entered into a new sale and purchase agreement with Duport Midstream Company Limited (“DMCL”) to deliver an initial 5,000 bbls to the Duport refinery in Edo State, Nigeria, followed by a minimum of 2,500 bbls per month thereafter.

The Oza Field is an onshore conventional oil field, on dry terrain, in the northwestern part of Oil Mining Lease (OML) 11, approximately 30 kilometres southwest of Port Harcourt which is part of the Abia State in Nigeria.

The field was formerly operated by Shell Petroleum Development Company of Nigeria Ltd. (“Shell”), the local subsidiary of Royal Dutch Shell plc.

The 20 square kilometres concession was carved out of OML 11 in 2003 as part of the Government’s Marginal Field Development Program and was awarded to Millenium Oil and Gas Company Limited (“Millenium”) having won the bid during the 2003 Marginal Fields Licensing Round.

Decklar Resources is developing the field through a Risk Service Agreement (RSA) with Millenium.

The Oza Field is surrounded by producing fields operated by Shell, including Isirmi, Obeakpu, Afam, Obigbo and Umuosi.