Nigeria has 37.2 billion barrels (5.91×109 m3) of proven oil reserves and it is the largest oil producer in Africa and the 11th largest in the world, averaging 2.4 million barrels per day. If no new discoveries are found, the reserves may last for about 45 years.
However, stakeholders have been calling on the Federal Government to boost efforts being taken to make new discoveries in order to increase oil reserves.
Recently, the Federal Government, through the Ministry of Petroleum Resources and Department of Petroleum Resources (DPR), announced the commencement of new bid rounds for the marginal fields that have been dormant for decades.
Marginal fields are oil fields that are producing far below their full potentials due to obsolescence and they have been abandoned by the oil majors.
The bid rounds are targeted at indigenous operators who will explore the fields and ultimately boost the reserves for the country.
Moreover, acquisition of an oil field previously owned by ConocoPhillips Nigeria by Oando Energy Resources (OER) is another landmark step at improving oil reserves in the country. When OER won the battle for the acquisition of ConocoPhillips’
Nigerian assets in a deal worth $1.79billion, some stakeholders saw it as unproductive and too expensive project for an indigenous firm like Oando. The deal is the biggest acquisition by an indigenous company in the history of Nigeria’s oil and gas industry.
The deal comprises of indirect acquisition of all shares of Phillips Oil Company Nigeria Limited, Phillips Deepwater Exploration Nigeria Limited and Conoco Exploration & Production Nigeria Limited by Oando.
Pursuant to an amendment agreement, Oando Energy Resources said it had agreed with ConocoPhillips for the extension of date for the completion of the acquisition of Nigerian assets to January 31, 2014 as against November 30, 2013.
Commenting on the benefit of the project, The Group Chief Executive Officer, Oando Plc, Mr Wale Tinubu, said the transaction is expected to position OER as a leading, indigenous independent Exploration and Production (E&P) player in Nigeria.
“Upon closing, we expect that this will be a transformational transaction for OER with the opportunity to execute its strategy and materially increase its production and reserves base. In our view, the combination of the right timing, right assets and the right company can lead to significant value creation in the Gulf of Guinea. We expect that the closing of this transaction will position OER as a leading, indigenous independent E&P player in Nigeria,” he said.
Also, Chief Executive Officer of Oando Energy Resources, Mr Pade Durotoye, who believed the project is a step in the right direction said, “This potential transaction represents a transformational step forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high quality growth in reserves and production. Our management team is familiar with the assets contained in this proposed transaction and, we believe, possesses the regional experience and technical expertise necessary to capture and unlock their future value for our shareholders.”
Presently, OER produces about 4500 barrels per day, but after the taking over of these assets in January 31, 2014, production per day by Oando is expected to become about 60000 barrels per day.
The onshore business to be acquired by Oando includes Phillips Oil Company Nigeria Limited (POCNL), which holds a 20 per cent non-operating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) Joint Venture (NAOC JV). Nigerian National Petroleum Corporation (NNPC) holds a 60 per cent interest in the joint venture, while NAOC, which operates the assets, holds 20 per cent.
The second onshore business is Phillips Brass Limited (PBL), which holds a 17 per cent shareholding interest in Brass LNG Limited, which is developing the Brass LNG project. Brass LNG is a Greenfield project to develop a two-train of 10 million tonnes per year Liquefied Natural Gas (LNG) facility in Bayelsa State. The other partners are NNPC, 49 per cent; Eni, 17 per cent and Total, 17 per cent.
ConocoPhillips’ offshore business to be acquired by OER includes Conoco Exploration and Production Nigeria Limited (CEPNL).
The company holds a 95 per cent operating interest in OML 131, with other partners as Medal Oil, 5 per cent; and Phillips Deepwater Exploration Nigeria Limited (PDENL), which holds a 20 per cent non-operating interest in OPL 214.
The other partners include ExxonMobil which is the operator with a 20 per cent stake; Chevron, 20 per cent; Svenska, 20 per cent and the Nigerian Petroleum Development Company, 15 per cent, as well as and Sasol, 5per cent.
The combined reserves from these assets are put at 213million barrels with daily production of 43000 barrels per day. This is expected to increase reserves to about 37.5 billion barrels.
– Tunde Dodondawa, Nigerian Tribune