A Review of the Nigerian Energy Industry

Usan, Agbami share from Chevron’s $35.8bn upstream spend

AgbamiChuks Isiwu

30 December 2013, Sweetcrude, Lagos – Nigeria’s Usan and Agbami are part of global projects expected to draw from Chevron Corporation’s $35.8 billion upstream spending this year.

The US super major has lined up the multi-billion dollar spending in 2014 for top capital projects in Nigeria, Angola, the Republic of Congo, United States, United Kingdom, Canada, Australia, Argentina and Kazakhstan.

In Nigeria, the company plans a further development of the giant deepwater Usan and Agbami fields, which form part of strategic projects Chevron has been pursuing towards realising their production potentials and raising its profile in Nigeria.

The Usan field in OPL 222 is located approximately 62 miles (100 kilometres) off the coast of the Niger Delta in water depths of about 2,400 feet (750 metres). First oil from the field in 2012 boosted Nigeria’s daily oil production by 80,000 barrels per day.

Chevron Petroleum Nigeria Limited controls 30 per cent stake in the project, while Total E&P Nigeria Limited is the operator on behalf of the Nigerian National Petroleum Corporation, NNPC, with 20 per cent stake, while Esso E&P Nigeria Limited holds 30 per cent and Nexen Petroleum Nigeria Limited, 20 per cent as partners.

The Agbami field was discovered in late 1998, becoming the the second major deepwater oil find off Nigeria’s Niger Delta, after Shell’s Bonga field. Located 220 miles south-east of Lagos, it was initially Nigeria’s largest deepwater development, gulping $3.5bn.

It is not clear how much of the Chevron capital project spending that would be going to Usan and Agbami, but injection of fresh funds in their further development would help raise production potentials for not only Chevron but also for operator, Total and other partners, including the NNPC, which maintains considerable stake in both fields.

Specifically, Chevron is positioning the Nigerian fields as part of its target to raise production to 3.3 million barrels of oil equivalent per day, boe/d, in 2017, up from the current 2.6 million boe/d.

Outside Nigeria but still in Africa, the US oil giant plans to spend part of the projected funds for the year on two other crucial projects – the Mafumeira Sul field in Angola and Moho Nord in the Republic of Congo.

The $35.8 billion, which Usan, Agbami and others will share from, is part of the $39.8 billion capital and exploratory budget earmarked by Chevron for 2014. This is about $2 billion less than the $42 billion the company splashed in 2013.

“Our focus is on developing resource projects that grow shareholder value,” Mr. George Kirkland, vice chairman of Chevron, said in his comments on the company’s budget for the year.

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