From Stranded Marginal Fields to (Integrated) Medium Sized Assets: Contributions of Indigenous Independents to the Changing E&P Landscape of Nigeria's Petroleum Industry
For over 60 years the Nigerian E&P landscape has been dominated by International Oil Companies (IOCs') but the landscape has evolved and progressed. Indigenous Nigerian E&P Companies, each in little strides are bringing noticeable irreversible positive contributions to Nigeria's Petroleum Industry. The Government and the industry endeavor to comprehend and prepare for this change as a model for the future. With most of the nearly 37 Billion Barrels and 180 TCF of oil and gas reserves previously in the books of the original IOCs, the “new” IOCs' or Independent Petroleum Producers Group (IPPG) continue to book reserves which put them today as holders of nearly a third of such total Nigerian Reserves volume. From the first of its type - commercially negotiated “Farm Out Agreement”, between Chevron Nigeria Ltd (on behalf of itself and its NNPC JV Partner) and a hitherto unknown Nigerian Independent – NIGER Delta Petroleum Resources Ltd in 2002, through a government driven Marginal Fields Bidding and Award Program which added another string of Nigerian Indigenous Independents into the landscape. Since then, Nigeria has witnessed the transformation of these Independent producers into mid sized operating companies, with their production operations dotting the Niger Delta. Today, as a group, and with over $10bln expended by the Independents, have transformed themselves into medium sized Independents. The Ogbele Marginal Field represents the icon of such transformational process. Under a commercially negotiated Farm Out Agreement (FOA), the field with a reported STOIIP of 5MM bls of oil, was handed over by Chevron to Niger Delta Petroleum Resources Limited in a landmark event in 2002. The field was brought back into production in August 2005 and today, remains a reference model integrated producing asset. With cumulative production of over 11.2 MM bbls and 40 Bscf of gas delivered to-date into the Bonny NLNG, and a small 1000 bopd Mini Refinery, the field with a P2 reserves of nearly 90 MM BOE, remains a model of how Indigenous Independents continue to add value, increase reserves and are changing the way field developments are pursued. With innovative technological dexterity, financial frugality and a touch of Nigerian ingenuity, the model offers the opportunity of a new pan African E&P approach towards regional exploration and development of stranded assets.
AAPG Datapages/Search and Discovery Article #90291 ©2017 AAPG Annual Convention and Exhibition, Houston, Texas, April 2-5, 2017