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Tag: output

  • Refineries: NNPC eyes 445,000 bpd output by 2019

    Refineries: NNPC eyes 445,000 bpd output by 2019

    The Nigerian National Petroleum Corporation (NNPC) will not renege on its plans to return the four state-owned refineries – Port Harcourt 1&2, Warri and Kaduna – to their installed capacity of 445,000 barrels per day (bpd) by 2019, its Group Public Affairs Manager, Ndu Ughamadu, has said.

    According to him, the NNPC inaugurated nine committees on the rehabilitation of refineries last September to achieve the goal.

    The committees, he said,  include rehabilitation; stakeholder management; financing; legal and procurement.

    Others are pipeline, crude oil supply, security, staffing and succession planning.

    According to him, the committees are made up of pragmatic and result-driven persons, adding that they have promised to provide  workable solutions to the problems of the refineries.

    Ndu Ugbamadu said: ‘’While the committee on rehabilitation is headed by NNPC’s Group Managing Director Dr Maikanti Baru, the committee on stakeholders management is being headed by the Chief Operating Officer, Refineries and Petrochemicals, Engineer Aniboh Kragha. The committee on stakeholders’ management deals with issues bordering on the communities, where the refineries are located.”

    He added:‘’The leaders and members of these committees have taken it upon themselves the duty to investigate, analyse and proffer solution to the numerous problems facing the refineries. They hold meeting everyday, including Sundays. As I’m talking,  this Sunday afternoon, the heads of the committees and their members are holding meetings in order to make good of their promise of returning the refineries to optimal capacity, within a timeline of two years ( 2017-2019) given them by the Federal Government.”

    He said the NNPC has mandated the committees to do a thorough job of revving the refineries.

    Ughamadu said the process of returning the refineries to good condition is a long one, stressing that the committees in realisation of this fact, are taking their time to do a good job.

    The committees, Ughamadu said, are expected to submit reports of their activities to the NNPC’s GMD, Dr Baru, for their next line of action.

    He said the NNPC is not thinking of penalising any of the committees as they have agreed to do their best on making the refineries work well.

    The country, he said,  would not have any need of sapping crude for fuel by 2019, hence the directive to the committees to return the refineries to their nameplate capacities of 445,000 barrels per day.

    It would be recalled that the Federal Government had sunk billions of naira into turnaround maintenance of the refineries  without tangible results.

    The NNPC, in a recent document, said the four refineries have gulped up to $1.746 billion or N264 billion, when using a 16-year average dollar/naira exchange rate of N150.99 per dollar.

    The $1.746 billion turnaround maintenance investments were different from the $308 million reportedly spent for the same purpose by the military governments of late General Sani Abacha ($216 million) and General Abdusalami Abubakar (rtd) ($92 million).

    To avert waste of funds, the NNPC set up committees to provide modalities on how to make the refineries work. Prior to this, the NNPC unveiled a 2019 target to end the swap of 330,000 barrels daily through Direct Sale Direct Purchase (DSDP) arrangement, a new version of crude-for-product swap.

  • McGrath: ExxonMobil adds 600,000bpd to Nigeria’s output

    McGrath: ExxonMobil adds 600,000bpd to Nigeria’s output

    •Local contractors access over $113m from Scheme

    The Chairman/Managing Director, ExxonMobil Nigeria Unlimited, Mr. Paul McGrath, has reiterated commitment to local content development, saying the firm contributes 600,000 barrels per day (bpd) of oil to Nigeria’s daily output that currently hovers around 2.2 million bpd.

    McGrath gave the assurance during a spotlight session at the 7th Practical Nigerian Content Conference organised by the Nigerian Content Development and Monitoring Board (NCDMB) in Uyo, Akwa-Ibom State, adding that the firm was passionate about local content development.

    He said: “I am very passionate about local content development in Nigeria and standing here before you today is an example of local content. Local content development is so important to me and also ExxonMobil and we are concerned about deepening Nigerian content in our industry.

    “ExxonMobil gives first consideration to local companies in Nigeria. We have been at the forefront of local content development in Nigeria. Nigeria local content is a moral obligation and is good for business because in Nigeria we have highly and semiskilled workforce, which we give total support to all categories.

    “When we talk about practical Nigeria content and implementation of local content, ExxonMobil has been at the vanguard.”

    McGrath said the company was one of the country’s highest producers of crude oil, accounting for almost 600,000 barrels per day of crude, condensate and natural gas liquids from its Qua Iboe terminal in Akwa Ibom State.

    He said ExxonMobil had been in Nigeria for over 40 years with track records and operates a world class facility in the country and also looks forward to boost its crude oil production.

    The ExxonMobil Nigeria boss said the company was committed to growing its production in Nigeria safely and with much integrity, adding that the company had made tremendous impact on the nation’s economy in the past 54 years of operation and would continue to invest for many more years to come.

    He said the company had invested massively in human development, which was very significant in bringing about competition for national growth. According to him, the company has invested massively on host community and other communities outside its operations.

    He added that ExxonMobil had also invested on community development in area of education and infrastructure development, while ensuring sustainability on the long time benefit. “ExxonMobil has helped to facilitate access to funding to numbers of local companies in Nigeria and there are number of Nigeria banks that work with us.

    “Over 113 million dollars has been accessed so far out of 975 million dollars available under the ExxonMobil Nigeria Contractor Finance Scheme (EMNCFS), in partnership with some  Nigerian banks. Also, that offers competitive financing options to local company’s business partners in Nigeria.

    “The EMNCFS is targeted at Nigerian vendors seeking access to better funding options to fulfill ExxonMobil awarded contracts and procurement orders. Loan processing times will also be significantly reduced due to upfront definition of eligibility criteria by the banks because if the funding was not available to Nigerian contractor they will not be in business,’’ McGrath added.

    He said over 700 graduates had benefited from the company’s skilled training, which majority of them has been employed by various oil and gas companies in Nigeria, adding that the company had a world class technical training centre in Akwa-Ibom which was established in 1995, which conforms to international best practice standard.

    He stated that the company has also developed potentials in world class engineering, adding that it has partnered with local engineering companies in Nigeria like Delta Afrik to develop and nurture quality engineering work.

    He said the ExxonMobil is also geared towards ensuring the developing sustainable plans with local companies in Nigeria, adding that quality engineering in Nigeria had increased by 90 per cent in the last four years.

  • ‘Attaining 2.5mbpd output futile without oil exploration’

    The efforts to attain 2.5 million barrels per day (mbpd) in crude oil production by the Federal Government will be unrealistic if aggressive exploration is not encouraged.

    This was the view of experts during a panel session at the 55th Business Anniversary of the Oil Producers Trade Section (OPTS), an arm of the Lagos Chamber of Commerce and Industry (LCCI), in Lagos.

    Industry operators, including the  Chairman/CEO, Waltersmith Petroman Oil Limited, Abdulrazaq Isa; Managing Director, Financial Derivatives Company Limited, Bismark J. Rewane; Lead Consultant to Senate Committee on Petroleum Industry Bill (PIB) and former Director, Department of Petroleum Resources, Austin Olorunshola; Boston Consulting Group Miguel Pita, and Leader, McKinsey Oil and Gas Practice, Europe, Middle East and Africa, and Chairman, Energy Insights and McKinsey Energy Think-Tank, OccoRoelofsen, among other members of the OPTS, spoke at the  event.

    The panel session entitled: “Competitive fiscals: Challenges, solutions and way forward”, examined how the Nigerian oil and gas space would be able to attract the quantum of investments that will drive government’s aspirations in oil reserves and production growth targets, especially in the face of the growing competition for capital from existing and emerging oil producing African countries.

    They noted that there are very competitive fiscals from other African countries and capital moves to an environment where they are welcome. Therefore, Nigeria should not foot-drag in its determination to maximise value from its hydrocarbon deposits.

    They said if there is no dependable plan to replace used reserves, even with the attainment of 2.5 million barrel daily, the production will drop abysmally with time because it is not sustainable.

    According to them, some new oil firms do not have exploration departments as required, such companies are only interested in production. “The Department of Petroleum Resources (DPR) is giving licences for petroleum refining, this is good but where is the oil? For instance, if Dangote Refinery takes 650,000 what else remains? It is important that government encourages exploration with competitive fiscals to enable oil companies take risk in oil search,”they said.

    “Government should quicken the completion and implementation of its new reforms to bring in fresh investments into the oil and gas sector. The government should also apply simplicity, transparency and enforceability in the new reforms,” they added.

    OPTS Chairman and Shell Petroleum Development Company(SPDC) and Chairman, Shell Companies in Nigeria, Mr. Osagie Okunbor, said:”We are talking about sustainability and that is a key thing to worry about. The Federal Government through its Economic Recovery Growth Plan (ERGP) eyes 2.5 million barrels per day, which is about a billion barrels a year.

    “The nation’s legacy reserve base has not been increased in the last 20 years. With 30 billion barrels reserves base and one billion barrels per year depletion, in 30 years the reserves base will be zero. The broad policy is around a replacement ratio of one to one and I don’t see a billion barrels coming into the reserves every year from the reality on ground.

    “The reality is that OPTS consists a significant proportion of what our economy represents, therefore, anything  that  impacts the oil and gas industry will have tremendous effect on the livelihood and meaningfulness of life of the average Nigerian.”

    According to Rewane, the upstream oil and gas sector should be optimised on one hand and continue to significantly aid the development of the country. “So, how do we incentivise this sector to the level of optimisation? We need to correct some misperceptions. There is this rhetoric about diversification, which is misinterpreted to mean ‘kill oil.’

    “In spite of all that have been said, we have not done so well as a country, but because we are in an era of politics where political expediency overrides economic reality. Over dependence on oil in the last 20 year period, even though activities have been diversified, the dependence has actually become more concentrated. Let’s not deceive ourselves as a country, we need to nurture this particular asset, the investors in these assets.

    “Because of the natural state of attrition, the politicians and policy makers have no control over the market. We cannot control OPEC, the glut in the international market, the thing we can control are the incentives we can offer investors,”Rewane said.

  • Iran urges OPEC to act on Nigeria, Libya output

    Iran urges OPEC to act on Nigeria, Libya output

    The commitment of the Organisation of Petroleum Exporting Countries (OPEC) to cutting production to clear a global glut is working, but the group needs to address rising output from Libya and Nigeria, Iran’s Oil Minister Bijan Namdar Zanganeh has said.

    Compliance with the output cuts is “acceptable,” Zanganeh told reporters in Tehran. The Organisation of Petroleum Exporting Countries should focus on “the situation with Libya and Nigeria,” he said, referring to the two countries exempted from capping production due to their internal strife.

    “OPEC’s actions are working and compliance is acceptable overall, although there needs to be some change,” Zanganeh said, referring to OPEC members’ compliance with their pledges to pump less. “Changes are really related to Libya and Nigeria and the 100 percent compliance of everyone.” He didn’t elaborate.

    OPEC and other global producers including Russia agreed to maintain output cuts through March to end a price rout that has battered their economies since 2014. Iran was part of the deal reached last year, though it was given special permission to raise output by 90,000 barrels a day. Libya and Nigeria were not part of the deal and have since increased production, complicating the efforts of the suppliers to reduce the glut. Benchmark Brent crude has dropped by about half from its 2014 peak.

    OPEC backs any action to help stabilize the oil market, and if a meeting is needed for the group to decide whether to extend the cuts that expire in March, “we’ll arrange it,” Zanganeh said.

    Iran “will consider everything within the framework of our national interest and cooperation with OPEC,” he said when asked whether the country would adjust its output.

    Iraq supports OPEC’s efforts to pare oil output and clear a global glut even as the group’s second-biggest producer plans to expand its own capacity to pump more, Iraqi Oil Minister Jabbar al-Luaibi said Sunday at a news conference in Baghdad.

    The country’s plan to boost capacity to 5 million barrels a day by the end of the year won’t affect crude markets, he said. Iraq won’t export all of its additional output, he said. The nation pumped 4.49 million barrels a day in August, data compiled by Bloomberg show.

    “The oil market’s status is stable, and we don’t accept that any country exceed its share” under OPEC’s deal to cut production, he said. “We support OPEC’s position to stabilize markets.”

    Iraq is seeking to rebuild its energy industry after decades of conflict, and al-Luaibi sought to reassure oil markets a day before the country’s energy-rich, self-governing Kurdish area plans to vote on a referendum on independence. The central government opposes the vote, which many global powers say could create further instability in a region convulsed by war. The Kurds plan to include the disputed Kirkuk region, home to Iraq’s oldest producing oil fields, in the referendum.

    Oil should be left out of the political wrangling over control of Kirkuk, al-Luaibi said. Kurds, Arabs and Turkmens are all competing to control Kirkuk, making it a potential flashpoint for conflict. The Baghdad-run North Oil Co. is currently pumping 500,000 barrels a day in northern Iraq, he said.

    Iraq’s government is still in discussions with Royal Dutch Shell Plc, which quit Iraq’s southern Majnoon field and plans also to withdraw from the West Qurna-1 deposit, al-Luaibi said. It’s not talking with any other oil companies about replacing Shell, he said.

    “We have no problems in finding international companies” to replace the oil major, al-Luaibi said, adding that Iraqi staff are capable of taking over from Shell.

    Iraq will soon sign a deal with Iran to jointly invest in two oil fields, he said, without giving a date. It’s also in talks with Kuwait to jointly develop four fields and to ship surplus natural gas to Kuwait, he said.

  • Output cut to dominate OPEC, non-OPEC meeting

    Output cut to dominate OPEC, non-OPEC meeting

    Oil output cut will dominate discussions at the forthcoming meeting of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers meeting holding in Abu Dhabi next week, following increased violation of compliance with production quota by members.

    The meeting, which will hold between August 7 and 8,will involve  experts to discuss ways to firm up member commitments to uphold their quotas.The OPEC, non-OPEC coalition monitoring committeewill give report on level of compliance with production cuts pledged by members.

    The meeting, according to Platts, is expected to demand better compliance from defaulting members and to hand down warning to such violators and intending violators that the organisation would not tolerate any country that embarks on production overshoot.

    Platts said: “Although conformity with the production agreement remains strong at the aggregate level, some countries continue to lag, which is a concern we must address head on,” Saudi Energy Minister Khalid al-Falih said at a meeting of the monitoring committee in St Petersburg last week.

    Iraq, for example, averaged 69,000 barrels per day (bpd)above its quota from January through June, according to data from the S&P Global Platts OPEC survey, one of six secondary sources used by the coalition to monitor OPEC production. That is the largest amount by which any member of the bloc is exceeding its target.

    Iraqi minister Jabbar al-Luaibi will be meeting with Falih in the coming days, as well as with Iran oil minister Bijan Zanganeh, according to the Iraqi oil ministry.

    “Our friends had some viewpoints and gave some explanations,” Zanganeh was quoted by Iran’s Shana news service as saying.

    “They had justifications for their actions. We will continue talks with them.”

    Luaibi has insisted for months that the deal concerns exports, not production, contrary to the text of the agreement on OPEC’s website, and as the deal was being negotiated last fall, he complained that OPEC’s secondary sources were not accurately reflecting Iraq’s production levels.

    Other countries have likewise complained about secondary sources, but in almost every case, secondary source production estimates have been lower than what OPEC members have directly reported to the secretariat.

    For example, of the nine OPEC members that submitted June production figures to OPEC, six were estimated by secondary sources to have equal or lower production.Of the remaining three, the secondary source estimates for Qatar and Angola were only 10,000 bpd above their directly submitted figures, while Nigeria’s was 70,000 bpd above, though Nigeria is exempt from the deal.

    Overall, the monitoring committee pegged June compliance among the OPEC/non-OPEC producer coalition at 98 per cent.

    The International Energy Agency (IEA), an OPEC secondary source, had compliance among the 12 OPEC members with quotas under the deal at 78 per cent in June and 92 per cent for all of the year.

    Platts reports that it sees compliance much higher, with June coming in at 103 per cent and overall 2017 at 116 per cent.

    No matter the secondary source, however, Saudi Arabia’s over-compliance is what enables the entire coalition to achieve high compliance levels. The kingdom has cut 107,000 bpd more than its required level, according to Platts data, and Falih in St Petersburg said Saudi crude exports would be held to a six-year low in August.

    According to OPEC, the monitoring committee said the meeting will be co-chaired by technical representatives from Kuwait and Russia and also attended by officials from Saudi Arabia. Venezuela, Algeria and Oman, the other members of the OPEC/non-OPEC monitoring committee will not be attending.

    “This is a technical meeting being held to better understand the difficulties and obstacles faced by some OPEC and non-OPEC participating countries and to assess how conformity levels can be improved with the goal of achieving a faster rebalanced global oil market, for the benefit of producers and consumers alike,” the committee said.

    The production cut deal, which went into force January 1, calls on OPEC and 10 major non-OPEC producers to cut a combined 1.8 million bpd.The coalition on May 25 agreed to extend the deal past its June expiry through March, next year.

  • Excess crude supply may affect Nigeria’s output

    Excess crude supply may affect Nigeria’s output

    Nigeria’s oil production and 2017 budget implementation could be hampered by the lull in global oil market, as crude price  droped to around $40 per barrel. Global benchmark crude, Brent, has remained below $47 per barrel this week, while OPEC daily basket price stood at $43.14 a barrel on Wednesday.

    Nigerian crude grades are under pressure with several unsold cargoes yearning for buyers. To underscore the market oversupply, traders said currently there were as many as 30 cargoes available for June and July loadings, in addition to the newly released August loading programmes, which are about 67 cargoes. If the remains low for a long a time, it will certainly hamper effective implementation of this year’s budget, which is hinged on oil benchmark of $44.5 per barrel.

    Furthermore, traders said Nigeria’s largest crude Qua Iboe was valued at less than dated Brent plus 40 cents from Wednesday, the weakest price assessment since late 2015, Reuters reported. Supply is plentiful, Nigerian exports are set to reach a 17-month high in August, and traders said there are 20 cargoes for loading in July and another 10 for June loading still available, the report added.

    Records showed that Brent price was $46.91 per barrel on Monday, on Tuesday it dropped to $46.02 and to $44.82 on Wednesday but yesterday it went up $45.14 per barrel after slumping to 10-month lows on concerns of a glut in the market. However, concerns about the outlook remain and they weighed on a number of oil stocks across the world.

    The global oversupply theme has been driving the market lower, despite the OPEC and non-OPEC supply cut to boost price. OPEC and non-OPEC countries had agreement to curb supply by 1.8 million bpd by a further nine months after its recent meeting in Vienna but rising supply in the U.S., Nigeria and Libya, in addition to signs of demand decline in Asia, which is the biggest oil-consuming region in the world, have been weighing on crude prices.

  • Oil prices dip on rising output

    Oil prices dip on rising output

    Oil prices fell to a three-week low yesterday on news that Libyan output was recovering from an oilfield technical issue. This fuelled concerns that the Organisation of Petroleum Exporting Countries (OPEC)-led output cuts to reduce global inventories were being undermined by producers outside the deal.

    Benchmark Brent oil was down $1.63, or 3.1 per cent, at $50.21 a barrel after earlier touching $50.12 a barrel, the weakest since May 10. U.S. light crude traded at $48.31, down $1.35, or 2.7 per cent.

    Both contracts were on track for their third straight monthly loss.

    “Unless some bullish news stops this, prices will fall further in particular now with Brent trading below the post-OPEC low and approaching $50 a barrel,” said Carsten Fritsch, commodity analyst at Commerzbank.

    OPEC and other producers, including Russia, agreed last week to extend a deal to cut production by about 1.8 million barrels per day (bpd) until the end of March 2018.

    “Traders covered short positions ahead of OPEC and some of these have now been re-established,” said Ole Hansen, head of commodities strategy at Saxo Bank.

    OPEC members Libya and Nigeria are exempt from the cuts, while U.S. shale oil producers are not part of the agreement and have been ramping up production.

    Libya’s oil production has risen to 827,000 bpd, climbing above a three-year peak of 800,000 bpd reached earlier in May, the National Oil Corporation said, after a technical issue that hitSharara oilfield was resolved.

  • OPEC members support output cut extension

    OPEC members support output cut extension

    Ecuador Oil Minister José Icaza Romero has said the Organisation of Petroleum Exporting Countries (OPEC) and other oil-producing countries would discuss a six or nine months extension to output cuts when the Organisation meets today.

    According to Reuters’ report, Icaza Romero told reporters that “Six and nine months are both proposals on the table. We will support the majority, probably the nine months.”

    Asked whether deeper cuts would be discussed, he said: “Not at this point, I don’t think so.”

    OPEC member countries meet today in Vienna, Austria to consider whether to prolong the deal reached in December in which OPEC and 11 non-members, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017.

    Also the United Arab Emirates supports extending oil output cuts for another term, the Energy Minister Suhail bin Mohammed al-Mazroui said, saying ahead of an OPEC meeting he was optimistic about meetings held between Saudi Arabia and Russia.

    “We are optimistic about the statements and the meetings held between the Saudi-Russian sides,” he stated, adding that the previous extension had helped to balance the market and maintain average prices.

    The UAE supports “the extension of the agreement for another term,” he said.

    Mexico also threw its weight behind extension of production cut. According to the Mexican deputy secretary for hydrocarbons, Aldo Flores-Quiroga, Mexico supports an extension of OPEC’s supply cuts as a way to stabilise oil markets and bring fresh investment into the country’s growing energy sector.

    Aldo Flores-Quiroga said he believed members of OPEC should and would continue plans to coordinate oil production cuts into at least 2018. He did not say whether he preferred a six- or nine-month extension, which OPEC members are debating.

    “Stable markets help provide a stable framework for investment, and that helps Mexico,” said Flores-Quiroga, who assumed his post last summer.

    Mexico, which is not in OPEC, has seen its oil industry atrophy in the past 50 years due to underinvestment and hostile regulation of foreign partners.

    Constitutional changes in 2013 have slowly begun to attract capital to the second-largest Latin American economy, but low oil prices have hindered Mexico City’s efforts.

  • Nigeria’s output to hit 2.1m bpd on Bonga

    Nigeria’s output to hit 2.1m bpd on Bonga

    Nigeria’s oil production is ramping up and will shortly reach its previous volume of 2.1 million barrels per day (bpd) before Shell’s deepwater facility, Bonga, was shut down for over a month for routine turn around maintenance (TAM), it was learnt.

    Shell’s Corporate Media Relations Manager Precious Okolobo confirmed that Bonga TAM has been completed and the facility has resumed operation.

    He said: “Shell Nigeria Exploration and Production Company Limited (SNEPCo) has completed the turnaround maintenance at Bonga, and resumed production at the offshore field. The activity commenced on March 4, 2017 and was completed on schedule, with the first well opened up on  April 8, 2017. Production is ramping up.

    “This is another milestone for the Bonga team,” said Bayo Ojulari, SNEPCo Managing Director. Having won the ‘Asset of the Year’ Award 2016 in the Shell Group, the Bonga team ably took up the challenge of achieving the three major components of the turnaround maintenance: statutory and regulatory safety checks, inspections, repairs and replacement of equipment and upgrades.”

    However, it was learnt that facility production is not at full capacity as it was before the TAM shut down. The output is being increased gradually as is the case after major turnaround maintenance.

    Also oil traders, according to Reuters, confirmed the development. The traders said they were still waiting for loading programmes from Bonga. “Nigerian cargoes for May loading are clearing and the market has found support on improved buying interest amid strong refinery margins, the traders said.

    “Nigeria’s Bonga oilfield resumed production after planned maintenance, but traders were still waiting for loading programmes. The bulk of the June loading schedule has been issued to the market, although programmes are yet to appear including Bonga, Erha and Yoho, the traders added.

    The 225,000 bpd Bonga field, operated by Shell Nigeria Exploration and Production Company Limited (SNEPCo), began producing in November 2005.

    “This is the fourth turnaround maintenance since Bonga began production,” said Bayo Ojulari, Managing Director SNEPCo when the shutdown of the facility was announced last month. “The exercise will help ensure sustained production and reduced unscheduled production deferments. For the Bonga team, this is another opportunity to excel, having won the ‘Asset of the Year’ Award 2016 in the Shell Group, followed by runners-up in Norway and Malaysia. We are pleased that the award recognised the continuing collaboration towards optimum production with a focus on safety, cost and Nigerian content development which will be invaluable in the maintenance work.”

    The turnaround maintenance involves inspections, recertification, testing and repair of equipment as well as engineering upgrades with Nigerian companies and subsea professional playing key roles. A major focus is the Bonga floating, production, storage and offloading (FPSO) vessel, which is at the heart of Bonga operations. The Bonga FPSO has the capacity to produce 225,000 barrels of oil and 150 million standard cubic feet of gas per day, he stated.

  • Oil firm okays $4b to increase output

    Oil firm okays $4b to increase output

    Aiteo Eastern Exploration and Production Company (AEEPCo) Limited has set a medium term investment of $4 billion to increase oil and gas production, The Nation has learnt.

    Its Group Managing Director,  Chike Onyejekwe, who disclosed this, noted that the fund will be channeled to declining and brown fields to boost oil and gas outputs from the firm’s oil and gas fields.

    Onyejekwe said: “Aiteo is poised to grow oil production. We will arrest declining and brown fields. We will also focus on attaining a target of producing 300 million standard cubic feet of gas per day (mmscfd) by increasing associated gas (AG), develop non-associated gas (NAG) and diversify our market.

    “The $4 billion medium term investment will also be used for infrastructure asset integrity, reduce losses and create flexibility.”

    Onyejekwe said the firm was incorporated in 2014 to participate in the SPDC/Total/NAOC asset divestment in Eastern Niger Delta. It scaled the rigorous technical, financial, credit assessment and know your customer (KYC) by both the sellers and lenders syndicate. The firm syndicated medium term acquisition facility in two tranches – offshore and onshore, and was selected successful bidder for 45 per cent oil mining lease (OML) 29 and Nembe Creek Trunk line (NCTL), referred to as assets. It reached financial close in September 2014, he added.

    The onshore tranche, he noted, represented the single largest debt financing in local oil and gas sector by indigenous banks, which makes AEEPCo a strategically important borrower to the banking industry. He stated that the resource base of the firm include 2500 million barrels of oil and two trillion cubic feet of gas, six flow stations and six associated gas gathering facilities with a capacity of 50 mmscfd.

    The firm’s major fields include Nembe, S/Barbara, Okoroba, Oloibiri. Its 97km Nembe Creek Trunk Line has the capacity to evacuate 600million barrels per day and has six injectors.

    He said Aiteo operates in a highly challenging business environment with challenges of oil price collapse and debt  service. Other external and internal challenges, he said, include vandalism and theft, changing funding landscape, ageing assets, community management issues and facilities uptime.

    Onyejekwe said: “Our growth drivers remain strong: leadership, high commitment and motivation, technical and commercial excellence and superior asset base. In the next five years, our operations will continue to be guided by these qualities as we leverage our capabilities comparable to oil majors elsewhere in the world. Indeed, the future is Aiteo.”

    The Chief Executive Officer/Chairman, Aiteo Group, Benedict Peters also said the company grew production from 25,000 barrels per day (bpd) upon takeover of operations to a peak of 90,000 bpd in one year. He also highlighted several existing and developing projects that could potentially grow Aiteo’s asset production to over 150,000bpd and 200mmscf/d.

    Aiteo acquired OML 29 when Shell Petroleum Development Company (SPDC) fully exited the facility with Total and Nigerian Agip Oil Company (NAOC). At the time of the divestment, average production was 23,000bpd.

    Peter said: “Our outlook is bright with three producing oil fields and viable crude exports via Bonny terminal. We also have contingent resources to appraise and prospective ones to explore in the medium-to-long term, including full 3D coverage and 2P NNS reserves at 1.6 billion barrels. Put simply, we have a clear vision for the future with the experience and assets crucial to providing oil and gas consistently on a regional and global scale.

    “Aiteo’s ambitious five-year objectives include tackling the power challenges in Nigeria head-on through its legacy investments in the gas-to-power value chain.

    “This is a testament to our commitment to the transformation of the entire oil & gas value chain into a world-class landscape.”