Schlumberger to Invest $700mn in Niger Delta Project
US oil services firm Schlumberger has agreed to invest $700mn in a phased Nigeria oil and gas development offshore the Niger Delta.
State-run Nigerian National Petroleum Corporation (NNPC), Nigerian independent First Exploration & Production and Schlumberger signed the tripartite agreement for development of the Anyala and Madu fields under OML 83 and OML 85, offshore Nigeria.
Under its agreement with both firms, Schlumberger will invest up to $700mn to develop the fields, which hold 800 billion ft3 gas and 193mn barrels of crude oil. First E&P holds a 40% interest in the licenses and is the operator of the asset, while NNPC holds the remaining 60%.
NNPC in a statement said that by early 2019 it expects daily production to be about 50,000 b/d and 120mn ft3/d. It expects Schlumberger would also provide other oilfield services to the Joint Venture on a limited exclusive basis. Schlumberger added that the project will be developed with an existing floating production storage and offloading (FPSO) vessel.
The tripartite agreement is subject to a final investment decision on the project, due to be taken by December 2017. Schlumberger noted the planned investment in the project would be phased over several years, is based on a guaranteed project return, and includes a payment assurance bank facility.
NNPC group managing director Maikanti Baru welcomed the agreement as a step forward for the Nigerian oil and gas sector.
He said the innovative approach to funding Joint Venture operations, despite the challenging economic environment, was novel and wholly aligned with the government's aspiration to increase crude oil and gas production, reserves growth and monetisation of the nation's enormous gas resources.
The Nigerian Television Authority also reported that Baru was hopeful that the increase in gas production will ultimately upgrade Nigeria's gas to power capacity, as there will be more gas to supply existing power plants, thereby eliminating power cuts, a problem the country has battled with for years.
NNPC previously worked with Schlumberger in its quest to find commercial upstream deposits in the Chad basin and other inland areas, though this has not yet culminated in any development announcements.
Omono Okonkwo