May 30, 2024

Nigeria ricochets Up Production Capacity

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Ilenre Irele

Nigerian National Petroleum Co. Ltd. (NNPC) has put onstream Oil Mining Lease (OML) 13 in Akwa Ibom State, the third oil project to have been started up in Nigeria in weeks.

OML 13 began production at a rate of 6,000 barrels of oil per day (bopd), expected to ramp up to 40,000 bopd before the end of May, the national oil and gas company stated in a press release. This is a project of NNPC upstream subsidiary NNPC Exploration and Production Ltd. and Sterling Oil Exploration & Energy Production Co. Ltd. subsidiary Natural Oilfield Services Ltd.

“[T]he first oil from OML 13 holds some significance as it contributes to the country’s efforts to increase its oil production capacity, which is crucial for meeting domestic energy needs and driving economic growth”, NNPC said.

Located onshore oil-rich Niger Delta, OML 13 spans 1,987 square kilometers (767.2 square miles), according to information from the Nigeria Upstream Petroleum Regulatory Commission.

NNPC and its partners recently put online the Madu field and returned the Awoba field into production, adding a combined 32,000 bpd to the West African country’s output capacity. Both are also in the Niger Delta.

Madu is expected to average 20,000 bpd, NNPC said in a news release April 19, 2024. It is part of Oil Mining Lease (OML) 85, an area in shallow waters off Bayelsa State operated by FIRST Exploration & Petroleum Development Co. Ltd. (FIRST E&P).

“Madu Oil Field has significant oil, gas, and condensate resources in multiple-stacked reservoirs”, FIRST E&P said in a separate announcement. It sits 23 kilometers northwest of the Anyala field under OML 83, which is also held by the NNPC-FIRST E&P joint venture. FIRST E&P operates both licenses with a 40 percent working stake.

FIRST E&P expects Madu and Anyala to ramp up to a combined 60,000 bpd. The two fields are estimated to hold 581 million stock tank barrels of oil and 1.11 trillion cubic feet of gas, according to information from the operator’s website.

Meanwhile, Awoba restarted production at an initial rate of 8,000 bpd, NNPC said in a media release Apil 23. Production is expected to scale up to as much as 12,000 bpd within a few weeks.

“Besides the recent start of production at the Madu Field by the NNPC Ltd/First E&P JV, the company has achieved the restart of production at OMLs 29 and OML 18 in late 2023 which have steadily contributed an average of 60,000bpd to the nation’s production output since their restart”, NNPC said announcing the Awoba restart.

Awoba, operated by Newcross Exploration & Production Ltd. through OML 24, shut down February 2022 “due to evacuation issues and crude oil theft”, while its last supply to the Bonny oil and gas terminal was in 2021, NNPC recalled. The OML 24 area is in the mangrove swamp south of Rivers State’s Port Harcourt, where a refinery processes oil from the terminal.

Awoba is expected to “significantly boost gas supply to the power sector and other gas-based industries”, NNPC said.

Oil supply to the Port Harcourt refinery recently resumed, when Shell Petroleum Development Company of Nigeria Ltd. delivered 475,000 barrels, as announced by the Shell PLC subsidiary February 12, 2024.

“The crude supply resumed early in the year after a prolonged outage of over five years, during which time the refinery underwent rehabilitation and integrity activities on its supply pipeline from the terminal”, Shell said at the time.

The refinery has a total crude distillation capacity of 210,000 bpd at two plants, according to online information from the Bureau of Public Enterprises in Abuja.

The new startups are a welcome development amid reports of panic buying for petrol in Nigeria. Last week NNPC assured it had enough stocks of premium motor spirit (PMS) for over 30 days with more than 1.5 billion liters.

“In filling stations monitored across several states, including Lagos and the FCT [Federal Capital Territory], the queues have since thinned out, a development that will keep improving daily in other states”, NNPC said in a statement May 7.

“The NNPC Ltd is also collaborating with relevant downstream agencies, such as the Nigeran Midstream & Downstream Petroleum Regulatory Authority, labor unions in the sector and security operatives to address hoarding and other unwholesome practices”, NNPC added.

Additional report from @rigzone.com

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