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Tag: Deepwater

  • Deepwater operations fetch Nigeria $180b

    Nigeria has earned more than $180 billion from deepwater operations, the Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, said yesterday.

    Baru, who spoke through the Corporation’s Chief Operating Officer (COO), Upstream, Mr. Musa Rabiu, at the ongoing Offshore Technology Conference in Houston, Texas, United States (U.S.), said the deepwater province holds a great future for Nigeria.

    In his paper entitled:  “Deepwater operations in Nigeria: The journey so far”, he said: “Discovered deepwater assets in Nigeria hold approximately 13 billion barrels of oil, out of which about two billion has been produced. There is a huge volume yet untapped and opportunity abounds.

    “Also, the industry has committed capital in excess of $65 billion and generated revenue exceeding $180 billion, thereby, creating value for all stakeholders. There are more barrels of oil to be recovered. Therefore, more opportunities are waiting.”

    Read also: ‘Kachikwu, Baru have transformed oil sector’

    Quoting the Department of Petroleum Resources (DPR), the NNPC GMD said: “There are 87 deepwater blocks in the country, out of which only seven are producing and additional six at different stages of development.

    “It is important to note that there are more than half of the blocks in deepwater Nigeria are still open. This shows there is a huge potential yet to be unlocked.”

    According to him, Nigeria remains an active play relative to other regions in terms of deepwater development.

    The industry, he noted, started with the deployment of latest technology a stride it has continued to maintain.  Out of the 15 floating production, storage and offloading (FPSO) in Nigeria, seven have been deployed for deepwater operations.

    With Nigeria ranking next to Angola within the African deepwater operations in terms of FPSO deployment, the NNPC boss said: “I expect an upward trend in activities within the deepwater Nigeria and continued deployment of leading technology.”

    On the impact of deepwater operations in terms of capacity and local content development, Baru said: “We have utilised each deepwater project as an avenue to upscale our human capital acquiring unique skills in different areas not limited to engineering design, project management, welding and diving.

    “Also, the local content contribution or share of services in deepwater has continued to grow. We have improved from the sub one per cent level to an aggregate contribution of over 25 per cent from engineering man-hours of less than 20,000 to over 1.1 million in recent Egina project. With the Nigerian content, tonnage has grown by 600 per cent from the first deepwater project till date.

    “Deepwater projects benefited the wider Nigerian economy by boosting demand for a range of goods and services including offshore vessels and platforms, materials, floating hotels, helicopters and manpower, creating jobs and providing a range of training and maintenance services to the industry locally. Services in areas such as manpower supply, logistics, and vessel supply, chemical supplies have more or less been domesticated.

    “Recent further demonstration of this was the in-country topside integration on the Egina FPSO project. This achieves the dual goal of both industrialisation and manpower development through job creation and skill acquisition.

    “The gains enumerated in terms of production and reserve growth, revenue and value creation, manpower and technology development needs to be sustained. I must reiterate that sustaining the gains means all hands must be on deck. We must leverage the expected growth in deepwater for national development. We expect within the next 10 years that production from Nigeria deepwater would double.”

  • Baru praises Shell on deepwater operation

    The Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Dr. Maikanti Baru, has praised Shell Nigeria Exploration and Production Company (SNEPCo), the deepwater arm of Shell Companies in Nigeria, for pioneering the deepwater sector of the Nigerian oil and gas industry.

    NNPC is the senior partner of Shell Joint Ventures in Nigeria and represents the Federal Government in other operations, including deepwater.

    Baru described SNEPCo as a clear leader in deepwater whose performance is exemplary. “SNEPCo is a trail blazer. They set the pace with the Bonga floating production, storage and offloading (FPSO), being the first deep water exploration business in Nigeria,” Baru said while recieving ‘In pursuit of Excellence’, a SNEPCo publication, detailing the company’s entry into the offshore exploration in the Gulf of Guinea and how the venture has brought so much benefit to Nigeria. It also entails the development Nigerians’ local capacity and the growth of support industry, among others.

    SNEPCo Managing Director, Bayo Ojulari, who presented the 90-page book to NNPC leadership in Abuja, said the company was mindful of its pioneering role in deep-water exploration in Nigeria and would want others to learn from Shell group technical expertise to make Nigeria a leading oil and gas producing country.

    “We have documented lots of our efforts, which opened up Nigeria’s deep water and have contributed largely to the country’s oil revenue,” said Ojulari, who restated SNEPCo’s continued commitment to positive impact on Nigeria’s economy and the socio-economic welfare of the people through sustained social investments in education, health and sports.

    The company, with over 95 percent Nigerians as members of  staff, has helped to create the first generation of Nigerian deep-water oil and gas engineers and recently celebrated the 800-million-barrel mark in 13 years of operations.

    In recognition of its pioneering initiatives in Nigeria, SNEPCo was in early 2018 honoured as the best Nigerian oil and gas company in technology and innovation at the maiden edition of the Nigerian International Petroleum Summit (NIPS) held in Abuja for pioneering in-country Subsea Tree Refurbishment, a remarkable feat in local capacity potential, which resulted in significant savings. This was the first time in the Nigerian oil and gas industry that a Subsea Tree was fully stripped down and refurbished locally with all its original functionality restored.

    The FPSO vessel’s capacity was upgraded in recent years, allowing SNEPCo to expand the field with further drilling of wells in Bonga Phases 2 and 3 and through a subsea tie-back that unlocked the nearby Bonga North West field.

    SNEPCo is the operator of oil mining lease (OML) 118 under a production sharing contract with NNPC. The co-venture partners in OML 118 are Total E & P Nigerian Limited, Nigerian Agip Exploration Limited and Esso Exploration and Production Nigeria (Deepwater) Limited.

  • ‘Deepwater projects contribute $90b revenue’

    • Total’s Egina FPSO begins journey to Lagos

    Deepwater projects in Nigeria’s oil and gas industry have contributed about $90 billion revenue to the Federal Government as at end of 2016, Managing Director, Total Exploration and Production Nigeria Limited, Nicholas Terraz, has said.

    Terraz said this while discussing the success story of the Egina project at the 55th Business Anniversary event of the Oil Producers Trade Section (OPTS), an arm of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos. Egina project, which currently is Nigeria’s deepest offshore oil field, is being operated by Total and expected to begin production in 2018.

    Terraz said the deepwater projects include Agip’s Abo; Shell’s Bonga; ExxonMobil’s Erha; Chevron’s Agbami, and Total’s Akpo and Usan offshore fields, pointing out  that about $60 billion investments have gone into these assets.

    The Total chief said 560,000 man hours of human capacity development and training have been achieved across Egina contracts, while 60,000 tonnes of equipment was fabricated in Nigeria.

    Over 10 Nigerian companies, including Ladol; Nigerdock; Dormanlong; EWT and Aveon, among others, carried out different contracts, especially for the floating production, storage and offloading (FPSO) vessel.

    The project has created 24 million direct man-hours in Nigeria, which constitutes 77 per cent of total workload performed on Egina project. The percentage is a remarkable increase from other man-hours carried out on other oil fields development operated by Total. For example, the total man-hour percentage on Akpo field project, whose development began in 2005, was 44 per cent and that of Usan project of 2008 was 60 per cent.

    Also the Egina FPSO vessel has left Geoje in South Korea to Nigeria. It sailed off the Samsung fabrication yard on  October 31. Although the vessel started its long journey to Nigeria after several months behind the original scheduled date, it is exciting news to stakeholders in Nigeria’s oil and gas industry.

    It is expected that the journey will take 90 days to arrive at the yard of the Lagos Deep Offshore Logistics (LADOL) in Lagos, which may be January or early February 2018.

    At LADOL facility, the six modules constructed by TechnipFMC, which are presently at the LADOL yard, will together with some other modules coming from Korea, be integrated into the FPSO at LADOL yard, a process that will take about six months to complete. That is the key local content part of the FPSO integration.

    The FPSO will then leave LADOL yard in Lagos to Egina location, off southeastern Nigeria, where the risers, offloading Buoy and other subsea cables will then be hooked up to the FPSO before Egina first oil in November 2018 will be achieved.

    Egina field is a deepwater acreage located in oil mining lease (OML) 130. It will commence production in 2018, and it will, at peak production, be giving an output of 200,000 barrels per day of crude oil.

    The Egina oil field is located in 150km off the coast of Nigeria. The field is being developed by Total Upstream Nigeria (24 per cent) in partnership with CNOOC (45 per cent), Sapetro (15 pre cent) and Petrobras (16 per cent).

  • Agip to begin work on $13.5b Zabazaba deepwater project

    Agip to begin work on $13.5b Zabazaba deepwater project

    • Firm calls for tenders

    The Nigerian Agip Exploration Limited (NAE) is to begin work on its Zabazaba deepwater project estimated to cost $13.5 billion.

    The firm will this month begin to receive commercial proposals for the various activities lined up for the development of the field.

    The request follows the conclusion of the technical evaluation for the main packages of the project by the Nigerian Content Development and Monitoring Board (NCDMB) and NAE, with the aim to maximize local content. The packages include the floating, production, storage and offloading (FPSO) units, subsea, installation and rigs.

    According to NCDMB’s Executive Secretary, Simbi Wabote, the Board fast-tracked its evaluations and approvals on the Zabazaba project with a view to increase Nigeria’s crude oil production and create opportunities for the growth and development of Nigerian Content.

    Wabote noted that the conclusion of the technical evaluation has paved the way for NAE to proceed with its plans to receive and evaluate the commercial bids, conclude negotiations and award contracts in the second quarter of 2017, adding that with the call for tender and consequent commencement of work on the deepwater facility, a fresh wave of work activities is set to begin in the Nigerian Content sector.

    He commended the NAE for working harmoniously with the Board, adding that the company took all Nigerian Content requirements on board.

    The NCDMB Chief stated that the NAE plans to achieve first oil in 2020, hence it is determined to achieve the final investment decision (FID) in the second quarter of 2017 and start execution of the project in the third quarter.

    To bring the project to fruition, Wabote, urged contractors to submit reasonable commercial bids, bearing in mind the prevailing price of crude oil and the fact that Zabazaba is the only major project that has reached execution stage at the moment. The deep water project was introduced a few years ago, but later suspended after cost projections and other push backs made it unviable.

    He praised NAE for its determination to pursue the project despite the challenges in the market and charged all stakeholders to support fast-tracking the execution.

    NAE Vice Chairman, Mr. Massimo Insulla, had at a  meeting with Wabote underscored the importance of Zabazaba project to Nigeria, all Joint Venture (JV) partners and stakeholders in terms of revenue for the government and job creation. It will also grow small and medium enterprises, expand existing facilities and develop the skills set of the work force.

    Insulla praised the NCDMB and THE NAE teams for concluding the technical evaluation at a speed that was unprecedented in the industry. He also advised other approving entities to adopt the NCDMB’s model while executing their evaluations of tenders and other processes.

    Zabazaba and Etan fields are located in oil prospecting licence OPL (245) on the southern edge of the Niger Delta in water depths of 1,700 to 2,000 metres. The oil block holds oil and gas reserves of about 560 million barrels of oil equivalent. “Agip is developing the block in partnership with Shell Nigeria Exploration Company (SNEPCo). The Etan field will follow three years later and tied back to the Zabazaba FPSO from where the produced hydrocarbons will be processed and exported,” Agip said.

  • NCDMB benchmarks deepwater projects on Total, LADOL record

    NCDMB benchmarks deepwater projects on Total, LADOL record

    The Nigerian Content Development and Monitoring Board, (NCDMB), has directed international oil companies (IOCs) and promoters of new deepwater projects in Nigeria to exceed the benchmark attained by Total Exploration and Production Nigeria Limited.

    Lagos Deep Offshore Logistics Base (LADOL), is fabricating and integrating part of Total Egina field’s floating production, storage and offloading (FPSO)  vessel at its yard in Lagos.

    The Executive Secretary, NCDMB, Simbi Wabote, who spoke in Lagos after inspecting facilities of Samsung Heavy Industries (SHI), the main contractor for the Engineering, Procurement, Construction and Installation (EPCI) of the FPSO scope on the Egina project at LADOL base, said IOCs and promoters of new deepwater projects in Nigeria should deliver Nigerian Content milestones that would exceed in-country integration of FPSO platforms. This is because Total Nigeria’s Egina deepwater project, which will be integrated at the LADOL Free Trade Zone, has become the benchmark for Nigerian Content on deepwater projects, hence forthcoming projects have to break new records, he added.

    He said in-country integration of the FPSO and fabrication of six modules of the vessel created, 5000 direct jobs and 5000 indirect jobs. Increased domiciliation of future FPSO projects through the fabrication of more modules would create additional jobs, estimated to reach 30,000, he added.

    According to Wabote, the Board would not rest on its oars with regard to the implementation of the Nigerian Content Act, adding that “new projects must look at doing FPSO integration and more; we must add something to our achievements.”

    Six modules of the Egina FPSO were fabricated in-country across some yards, whereas 12 modules were welded at Samsung’s base, Geoje, South Korea. He stated that “for next FPSO, more modules must be fabricated locally.”

    Wabote expressed satisfaction with level of investment and the utilisation of local workforce at the LADOL base, describing the project as an example of possibilities, and assured that the Board will continue to work with industry stakeholders to develop new projects and domicile more work in-country.

    The Chief Operating Officer, SHI Nigeria, Mr. Frank Ejizu, explained that the Quay side was ready to receive the FPSO, noting that the tracks have been certified. On the workforce, Ejizu stated that 364 Nigerian welders have been qualified and awarded international certifications with which they can work anywhere in the world.

    The NCDMB chief also visited the facilities of Dover Engineering, JC International and Thompson and Grace Limited, all located at Port Harcourt, Rivers State. He explained that his visits to oil and gas facilities across the country were aimed at assessing capacities and confirming that Nigerian companies have firm footing in their  areas of operation.

    According to Wabote, information and observations gathered from the visits will be used during tenders and in planning for capacity development. He also promised to enlighten IOCs and project promoters on existing in-country capacities and ensure their utilisation during projects.

    At Dover Engineering, Wabote noted that experts in offshore designs, FSPO designs and detailed engineering were in high demand and engineering companies must develop strategies to retain them so their competences will not be lost. He praised the company for forming a consortium with other engineering firms to deliver major projects, charging other service companies to emulate the model.

  • ‘Poor fiscal regimes disincentive to deepwater gas production ’

    Poor fiscal terms are hindering deepwater blocks owned by international oil companies (IOCs) from optimising gas production, the Chief Operating officer, First Exploration and Production Company Limited, Dr Saka Matemilola, has said.

    According to him, the gas terms are more favourable to those producing onshore than those in the deepwater where oil firms, such as Shell, ExxonMobil, and Chevron, operate.

    He said IOCs moved to deepwater offshore because they thought it would be more profitable to do so, adding that  the IOCs were not finding things easy.

    Matemilola said the issue was making stakeholders in the value chain to ask for more government participation in the sector.

    He said: “For some time, the industry has been clamouring for the provision of better gas terms, especially in the deepwater to ease the burdens of operation on the oil majors.

    “Beyond the issue of provision of better gas terms, is the issue of economics, which stakeholders including the government, must take into consideration to achieve the desired results in the sector.”

    Matemilola, also the Chairman, Society of Petroleum Engineers (SPE) Nigerian Council, urged the government and other stakeholders to adopt a private model when it comes to pricing and sale of gas.

    He said: “A willing buyer and a willing seller agreement must be in place to meet the needs of operators in the nation’s gas industry.”

    According to him, when a gas company is forced by the Federal Government to sell at a particular rate, the firm would not achieve its economic goal, noting that bigger and smaller companies are in the industry and that it would not augur well if all the firms were forced to buy gas at a uniform price.

    He urged the government to handle the agreement on associated gas with caution to avoid  crisis in the industry.

    According to him, the government is planning to jettison the agreement, advising that the government think about it well before taking decision on the issue.

    He said the government needed to consider a likely replacement for the agreement, which is being presented to the stakeholders for discussions.

    The government, he said, must think of the implications of jettisoning the agreement since it would not pay all the stakeholders.

    He added:“I understand that the Federal Government is saying that associated gas agreement would favour companies that have oil and gas but how about the companies that have only gas, which implies that they do not have oil to net off?”

  • Zenith Women’s basketball League: First Deepwater pips Immigration

    Zenith Women’s basketball League: First Deepwater pips Immigration

    The First Deepwater Basketball of Lagos continued their fine run as they humbled Nigeria Immigration, 65-39 for a record third straight victory at the ongoing Zenith Bank Women’s Basketball League.

    The match was played on June 11 at the Ilorin Township Stadium, Kwara. The match in Ilorin was still a phase two encounter, which was expected to produce the final eight teams to square out during the playoffs in Lagos.

    The Deepwater girls led by its captain, Blessing Emmanuel scored 18 points with five assists to help to give the former champions a 100 per cent record in Ilorin.

    Her teammate, Saidat Ali, had also added 10 points as she joins her captain, as the only Deepwater players to score the double digits that put them in a relatively safe position in the battle for the final eight.

    Following Deepwater’s footsteps, were the Delta Force of Asaba and the Adolescent Health and Information Project (AHIP) Basketball Team of Kano.

    The AHIP team put up impressive showing against tough fighting, Benue Princess Club by recording a narrow 48-46 escape from the Benue girls.

    The AHIP Queens, which managed just four wins in the first Phase in Abuja, held on to two point’s victory, following a second half fight back from the Benue Princess, which their three straight victories.

    Coach Wilson Idanwekhai of AHIP Queens said his girls could play better than they performed so far. “My target is the Lagos final eight showdowns.

    “I know my girls, if they are ready to play, they will surprise everybody. However, I am not satisfied at the officiating, but I am glad we have recorded three wins so far. “I hope with the four games, that we have won so far in phase one of the competition in Abuja, added to our most recent victories, we hope it will be sufficient to land us in Lagos,” Idanwekhai said. Other results decided on June 11 include, the Sunshine Angels of Akure, which defeated the Plateau Rocks, 27-25 to add to the woes of the Plateau side that was still searching for at least victory.

    Oluyole Babes of Ibadan defeated the Taraba Hurricanes 37-27, the weeping girls of Group A, while, the Delta Force recorded a 59-27 points victory over Nasarawa Amazons to make it their third victory in a row.

    The Customs of Lagos whitewashed GT2000 of Kaduna, 77-21 and FCT Angels spanked Zamfara Babes, 45-20.

  • Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    The Royal Dutch Shell’s global deepwater assets have been said to contain an estimated 675 billion barrels of recoverable oil.

    In its latest monthly publication, Shell World, published by Shell companies in Nigeria, the company quoted the International Energy Agency (IEA) as putting Shell’s global deepwater proven reserves at about 675 billion barrels. In the publication, Shell confirmed that it has enjoyed decades of successful projects and some landmark moments in 2014 in global deepwater.

    It stated that its Nigerian Bonga North West (BNW) Field, which achieved first oil in August, is part of Shell’s long-standing commitment to developing deepwater engineering skills in Nigeria, adding that the investments made by Shell Nigeria Exploration and Production Company (SNEPCo) and its other project partners in the Bonga North West project include upgrades of local contractors’ facilities and providing specialised training for Nigerians to work in the energy industry.

    Oil from the Bonga North West field, according to Shell, is transported by a new subsea flowline to the existing Bonga subsea infrastructure while additional equipment and control systems were installed and integrated with Bonga Main topsides.

    The publication noted that a significant part of the project was carried out by Nigerian companies including an indigenous contractor that fabricated and installed the BNW topsides equipment.

    Commenting on the BNW achievement, Shell’s Vice President Nigeria & Gabon, Markus Droll, said: “It is significant to note that the project leadership and majority of staff working on the BNW project are Nigerians – testament to the growth of deepwater engineering experience in SNEPCo. Above all, we are pleased that the project has so far been delivered without lost time injury (LTI) with SNEPCo and contractor staff working safely on various aspects of the project in about 10 different locations in the United States, Europe and Nigeria.

    “This programme – on top of the ongoing Phase 2 drilling and after the start-up of Bonga North-West barely two months ago – further underlines our commitment to Nigeria and leadership in deepwater production.”

    The Corporate Media Relations Manager, Precious Okolobo, also said that SNEPCo has announced plans to drill eight more wells in the Bonga field to help maximise deepwater production in Nigeria. This third phase of the Bonga Main development is expected to add about 40,000 barrels of oil equivalent per day through the existing Bonga floating production, storage and offloading (FPSO) facility.

    Okolobo stated that Phase 3 is an expansion of the existing Bonga Main development and will involve drilling four oil producing and four water injection wells. Drilling is expected to start in 2015. Output from the new wells will be transported through existing pipelines to the FPSO facility. The facility has the capacity to produce more than 200,000 barrels of oil and 150 million standard cubic feet of gas a day.

    The Phase 3 work will be executed by several contractors including Nigerian companies that have developed deepwater expertise through the provision of similar services for SNEPCo. The Bonga field, which began producing oil and gas in 2005, was Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 500 million barrels of oil to date.

    The Bonga project is operated by SNEPCo as contractor under a production sharing contract with the Nigerian National Petroleum Company, which holds the lease for OML 118, in which the Bonga field is located. SNEPCo holds a 55 per cent, Esso Exploration & Production Nigeria Limited 20 per cent, Total E&P Nigeria Limited 12.5 per cent and Nigerian Agip Exploration Limited 2.5 per cent.

  • Firms seek govt’s intervention in deepwater lease renewal

    Firms seek govt’s intervention in deepwater lease renewal

    International Oil Companies (IOCs) have called for a review of the 20-year grace for renewing deepwater acreage leases.

    The Vice President, Nigeria-Gabon Shell Upstream International, Markus Droll, said during the presentation of a paper at the just-concluded Nigerian Oil and Gas Conference in Abuja that the review had become imperative to ensure oilfirms’ survival.

    According to operators, it takes between 10 and 15 years to develop a deepwater acreage and about 15 years to recover costs of investment; therefore, to renew deepwater lease within 20 years, as stipulated by the guidelines, is not viable as operators of such fields are yet to recoup their investments.

    Droll, called on the government to revisit lease renewal periods of deep-water assets, adding that the deep-water acreage has a shorter window compared to the period in which it is developed into a more productive usage.

    He said: ‘’We see that there are many leases that will expire in a few years’ time. Given the number of time required for developing resources and then the time required for recovering costs, the industry often needs 10-15 years or more to make confident investment decisions, especially when we are talking about green-field type of developments. I do believe that the industry’s stakeholders, including companies and regulators need to work together productively to avoid this issue stifling investments into perfectly good projects.’’

    Droll also identified other challenges facing IOCs and local operators, including oil theft, security, funding, production leases and fiscal environment. He added that despite these challenges, Shell has contributed in various ways to advance the growth of the industry.

    He said: “A difficult and growing problem is the issue of oil theft. 2013’s production was badly affected by the direct impact of thieves placing illegal oil tapping connections on oil infrastructure. In SPDC alone, we removed around 300 such connections during the year.

    “Security is a concern for many of us on a daily basis. Over the years, the industry has learned and adapted well to the threats, but it comes at a cost. It is hard to put an accurate figure on this issue, but clearly both development and then operating costs are substantially higher than in many other operating environments due to this issue.

    “On funding, our belief is that for Nigeria to fulfill its oil and gas potential, more funding is required by the industry than we have seen in recent years. We are in a high cost environment, and in order to collectively climb towards significantly higher production levels, we need to find better ways to fund development. Decline rates in the industry can be as high as 15-20 per cent, and you will appreciate to simply replace natural production decline rates requires much of the funding that is currently available.”

    On fiscal environment, he said it was important that fiscal environments are reviewed to maintain a fair investment climate for all stakeholders in the industry. “Fiscal stability and predictability are absolutely key in ensuring investors of all sizes can commit confidently, government revenues can be forecast reliably, and a capable service industry is maintained with steady workload. We cannot succeed on this; my fear is that we will not attract as much capital to Nigeria as we need,” he added.

  • ‘Deepwater can produce over 600,000 bpd’

    ‘Deepwater can produce over 600,000 bpd’

    • Shell spends $16.5b on social projects

     

    The deepwater province of the petroleum industry has the potential to produce additional 600,000 barrels of crude daily, create 200,000 jobs and add $3 billion to the Gross Domestic Product (GDP) yearly.

    The Commercial Manager, Shell Exploration and Production Company Limited (SNEPCo), Stefan Vos de Wael and SNEPCo’s Commercial Integration and Business Value Manager, Taaj Shobayo, said this at a workshop in Lagos.

    Nigeria’s total production is about 2.5 million barrels per day (bpd) and contribution from the deepwater assets to the volume is about 900,000 barrels.

    Besides, some of the deepwater assets, such as Shell’s Bonga and ExxonMobil’s Erha fields, have expansion potential where several wells will be drilled, which could produce several hundreds of thousands of barrels daily.

    Shell said the Bonga North West development will involve drilling additional 19 wells and with the inclusion of Bonga Southwest/Aparo, the company may require the acquisition of a separate floating production, storage and offloading (FPSO) vessel to produce the wells.

    Vos de Wael and Shobajo said Bonga produces over 200,000 bpd and has produced 450 million barrels since inception while Erha produces about 150,000 bpd and has produced 400 million barrels to date, and with the expansions and future discoveries, the deepwater terrain holds a great future for the country.

    They explained that in terms of job creation and local capacity growth, deepwater assets developments encourage the construction of in-country fabrication and construction yards and building of more FPSOs, therefore, the Federal Government shouldn’t bungle these opportunities with uneconomic policies.

    According to them, the deepwater operation is highly risky and expensive noting that exploration in the deepwater region costs about $150 million for appraisal and if the results are positive indicating commercial discovery, it costs between $5 andd $10 billion to carry out development and $300 million yearly to keep production running.

    However, because most of the assets in the deepwater are developed under the production sharing contract (PSC) arrangement, if the appraisal doesn’t confirm commercial discovery, funds spent on exploration and appraisal are lost.

    British Gas (BG), which is also a multinational firm, left Nigeria after it lost $500 million in futile exploration ventures. The officials said the pre-PIB fiscal regime, in which the government’s take is 75 per cent, encouraged the discoveries of the deepwater assets, adding that if the bill is passed the way it is, the government’s take post-PIB regime will be about 91 per cent, and that this will discourage investment.

    SNEPCo’s General Manager, Nigerian Content Development, Igo Weli, noted the contributions of Shell to local content development and social projects. He said the company has spent about $16.5 billion on social performance projects since 2005, which include the building and equipping of 28 ICT laboratories for secondary and tertiary institutions and that there are 54 ICT projects in the pipeline.