…as SNEPCo invites bid for new FPSO in Bonga
The Shell Petroleum Development Company of Nigeria Limited (SPDC) and its joint venture partners signed a Final Investment Decision agreement for a 300 million cubic feet of gas on Wednesday in Abuja at a ceremony witnessed by the Managing Director of Total Exploration and Production Nigeria Limited, Mr. Nicholas Terraz and the Managing Director of Nigeria Agip Oil Company Limited, Mr. Lorenzo Fiorillo. SPDC had announced taking FID last December on the Assa North Gas Development Project which is one of the Seven Critical Gas Development Projects of the Federal Government.
The project, located in south-eastern Imo State, aims to position Nigeria as a regional hub for gas-based industries while complementing Federal Government’s aspiration for gas sufficiency for domestic consumption, power generation, and gas-based ammonia and urea fertilizers for farmers.
At peak production, the project is expected to produce 300 million standard cubic feet of gas per day and will be treated at SPDC JV’s Gas Processing Facility and distributed through the Obiafu-Obrikom-Oben pipeline network.
Speaking at the FID agreement-signing ceremony, Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru, described the project a major investment towards fulfilling the domestic gas aspiration of the Federal Government, adding that the corporation was excited at the progress with the project and would provide the needed support to ensure first gas production as soon as possible.
Baru, who was represented by NNPC Chief Operating Officer Upstream, Mallam Rabiu Bello, said, “The NNPC Project Management Board would work hard to ensure progress having provided the necessary approvals and enablers,” adding on successful completion, the project would translate into huge social-economic benefit to Nigerians.
Also speaking, Managing Director of SPDC and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, described the progress with the FID as good news for the SPDC JV and Nigeria for the accelerated growth of the domestic market and optimisation of SPDC’s onshore footprints.
Okunbor said, “The project is key to driving the Federal Government of Nigeria’s ambition of marching away from a mono-economy through diverse industrial growth. It is premier amongst the Seven Critical Gas Projects initiative led by the Ministry of Petroleum and the Nigerian National Petroleum Corporation (NNPC). Their integrated focus, support and drive were instrumental to this investment decision.
“SPDC JV would continue to explore other areas of support for the expansion of domestic gas supply and continue to make investments under the right conditions.”
SPDC had earlier signed a Global Memorandum of Understanding with the clusters of host communities of the Assa North project for community development projects in addition to some other community initiatives already executed by the company ahead of construction work.
SPDC is the operator of a Joint Venture involving NNPC, which holds 55%; Shell 30%; Total Exploration and Production Nigeria Limited (TEPNG)10%; and Nigeria Agip Oil Company Limited (NAOC) 5%.
Also, Shell Nigeria Exploration and Production Company (SNEPCo) has announced the release of Invitation to Tender (ITT) to contractors for the development of the Bonga South West Aparo (BSWA) oil field. The project’s initial phase includes a new Floating, Production, Storage and Offloading (FPSO) vessel, more than 20 deep-water wells and related subsea infrastructure. The field lies across Oil Mining Leases 118, 132 and 140, about 15km southwest of the existing Bonga Main FPSO.
The ITT is for engineering, procurement and construction contracts for the 150,000 barrels per day project in the Gulf of Guinea.
“This is a new vista for deep offshore oil and gas exploration in Nigeria based on a revised commercial framework embraced by government and the project investors,” SNEPCo’s Managing Director, Bayo Ojulari, saida day after the execution of the Heads of Terms by the Nigeria National Petroleum Corporation (NNPC), SNEPCo and its Unit partners, revising the terms of the OML 118 Production Sharing Contract.
Ojulari said, “SNEPCo has concluded OML 118 negotiations with the NNPC. We now have a clear commercial framework, supported by the government and project investors, toward a potential Bonga South West Aparo Final Investment Decision (FID).”
Ojulari described the conclusion of the commercial framework as a key milestone for the project and the development of Nigeria’s deep-water oil and gas industry. “The new framework marks the start of the second generation of deep-offshore exploration and development, not just for SNEPCo but for all players in Nigeria’s deep water. This is a model that we see being replicated in the industry to further unleash Nigeria’s potential in deep-water exploration.”
On the estimated project cost, SNEPCo’s General Manager for BSWA, Adam Bradley said, “The release of ITT will allow ourselves, government and investing parties to understand the actual costs for the initial phases which we expect will be very competitive.”
SNEPCo pioneered deep offshore exploration in Nigeria with the launch of its 225,000 barrels per day capacity Bonga FPSO in 2005, a development which increased Nigeria’s oil production by 10 percent at the time and stimulated the growth of relevant support industry. Drawing on Shell’s global deep-water expertise as well as its Nigerian engineers and technicians, SNEPCo has consistently delivered safe, world-class and economically viable projects that provide jobs and training for Nigerians, and opportunities for local contractors.
The company, with over 95 percent Nigerian staff, helped 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 operates 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
