American oil big, ExxonMobil has indicated its plan, in collaboration with its three way partnership companions, to quickly declare readiness to proceed with the Closing Funding Selections (FIDs) on some main deep-water tasks in Nigeria cumulatively valued at roughly $10 billion.
The funding would begin with the infill drilling marketing campaign on the present producing Usan deep-water asset estimated at over $1 billion, of which Exxon has already made a 30 per cent dedication and goals to declare its funding readiness in a matter of months.
With a few investments and tasks lined up, the corporate has additionally set an bold goal of rising its complete oil production in Nigeria from the present 100, 000 barrels per day (bpd) to 250,000bpd within the subsequent 5 years.
Chairman and Managing Director of ExxonMobil Affiliate in Nigeria, Mr. Jagir Baxi, disclosed the plans throughout an interview with THISDAY, in Lagos, in the back of the latest celebration of 20 years anniversary of uninterrupted oil production on the Erha oil producing asset by Esso Exploration and Production Nigerian Restricted (EEPNL), Exxon’s affiliate and working agency in Nigeria.
As reported by THISDAY, ExxonMobil had in September 2024 throughout a gathering between its executives and Vice President Kashim Shettima in New York introduced its resolution to take a position $10 billion in deep-water oil tasks in Nigeria, anticipating to unlock at the least 180,000 barrels per day (bpd).
Central to that funding is the Owowo deep-water asset, which holds between 500 million and one billion oil reserve, and whose growth requires a tie-back to the corporate’s close by Usan Floating Production, Storage and Offloading (FPSO) facility.
ExxonMobil holds 27 per cent curiosity within the Owowo asset and is the operator, whereas Joint Enterprise Companions embrace Chevron Nigeria Restricted (27 per cent), TotalEnergies E&P Nigeria Restricted (18 per cent), Nexen Petroleum Deepwater Nigeria Restricted (18 per cent), and the Nigerian Nationwide Petroleum Firm Restricted (NNPC) (10 per cent).
Giving the most recent details about the deliberate investments, ExxonMobil’s Chairman in Nigeria, Baxi, mentioned the corporate was embarking on infill drilling marketing campaign on the Usan area with the intention to get better extra useful resource in it as proven by seismic consequence.
Although a part of the unique Usan reservoir, Baxi defined that the challenge would require new infrastructure, model new wells, new subsea connections, and leveraged the Usan FPSO functionality and capability that exists as we speak.
He said, “Again to the remark I made about seismic consequence, it turned clear that there’s useful resource, it’s materials, it’s worthwhile, it may be produced with relative pace, totally different from a brand-new greenfield FID.
“We do plan to declare the funding prepared in a short time.”
Baxi mentioned the corporate had been working with all of the stakeholders, together with NNPC Ltd, because the concessionaire, their companions in OML 138, the regulators – Nigerian Content material Improvement and Monitoring Board (NCDMB) and Nigerian Upstream Petroleum Regulatory Fee (NUPRC) – to attain all of the related necessities wanted to take the FID.
He disclosed that the funding for the Usan infill drilling programme was value about $1 billion and ExxonMobil had already made 30 per cent dedication from that within the early works.
Baxi mentioned, “And we’re closing in on the purpose the place all of the necessary execution enablers might be clear and in place, and supply us the idea to declare that funding as able to go. So, we’re excited that it’s near the purpose you made. It’s going to present new production from deep-water within the close to time period.
“Inside months of the marketing campaign beginning, we’ll be capable to produce from this funding. The funding runs by means of nearly all subsequent yr as a complete marketing campaign. It’s value about one billion {dollars} in complete, and we now have already dedicated round 30 per cent of that within the early works, the early long-lead tools and within the foundational contracts.
“That’s in regards to the time a typical giant funding would attain FID readiness. So, we’ll cross that gate or that milestone very quickly.”
For Owowo, a significant deep-water asset awaiting FID, Baxi mentioned the full funding required for its growth was between $7 billion and $8 billion.
“It’s best to take into consideration Owowo on the seven to eight-billion-dollar vary plus,” he mentioned.
Baxi described Owowo because the tip of the spear and “the one which we’re additionally maturing quickly behind Usan infill because the lead funding”.
Explaining the dimensions of the Owowo asset, he mentioned in a full growth case, it will be 20 to 40 wells, greater than the Erha and Bonga tiebacks, that are within the 10 to fifteen wells vary, respectively.
In accordance with him, these tiebacks are a single kilometre away whereas Owowo is 30 plus kilometres away.
By way of properly counts, Baxi mentioned Owowo might be at the least twice as massive as Bonga North, one other giant deep-water oil asset being operated by Shell Nigeria Petroleum Firm Restricted (SNEPCo), which is at present underneath growth at an funding dimension of $5 billion.
The ExxonMobil chair defined, “Useful resource dimension, you’ll be able to characterise Owowo as at the least 50 per cent or extra, bigger than both the Erha North tieback or the Bonga North tieback to Bonga. It’s a very massive area, however its geography is unfold greater than Erha or Bonga as we speak are.
“So, these are a number of the traits of complexity that I’d share as ways in which we are able to describe and assist you to perceive the development of the investments thus far, the tiebacks which might be occurring.
“And so, I come again to Usan at one billion {dollars}. Bonga North at 5 billion {dollars}. We’re now within the eight plus vary as a measure of the complexity and step up. So, the sense of urgency of timing to announce, I share that with you and with the stakeholders.”
Though, he didn’t particularly say when the FID on the Owowo growth or Usan infill drilling programme will happen, Baxi mentioned the maturity of all of the considering that needed to happen previous to the declaration was in flight.
He said, “And what I hope we’ll be capable to be extra open about with stakeholders, such as you and others, is once we can level to the formative bulletins or formative agreements like lengthy lead procurement, like establishing shore base functionality to help that.
“These would be the seen early indicators earlier than FID, similar to we did with Usan area. So, there’s lots that happens as we speak which might be inside the stakeholder {groups} enabling the presidential inspiration. Every of these will attain a milestone that can underpin extra seen commitments.
“That’s the journey we’re on. So, once we make an FID announcement, we do it with the companions clearly aligned with us, the stakeholders clearly aligned. It’s a sign to go.
“We’re not curious about making an announcement that appears like we wish to go. That’s not the ExxonMobil manner. We wish certainty, we’ll work for certainty, and we’ll decide to what we are saying we’ll do as operator and transfer to it.
“That’s the status we wish to proceed to stay by. It’s readability of our intent, after which we’ll do what we are saying.”
In 5 years, Baxi mentioned ExxonMobil, by means of Esso, would be capable to hit complete production of 250,000bpd in Nigeria, up from the present 100,000bpd output, and likewise ship 100 million customary cubic toes per day in gasoline production.
He defined that each the infill drilling campaigns in Usan and Erha and the event of the larger Owowo area will unlock a mixed 160,000 barrels per day (bpd) in oil production and ship about 100mmscf/d.
He mentioned the brownfield Usan and Erha will unlock extra 40,000bpd and 20,000bpd, respectively, whereas the greenfield Owowo challenge will ship 100,000bpd of oil and 100mmscf/ of gasoline outputs.
Baxi mentioned, “So, to your query if we are able to see a way forward for 250,000 or 200,000 barrels, sure, it’s positively a chance as we put these funding items collectively.
“We’re motivated to try to do greater than that, really. I discussed Owowo challenge comes with an expectation of a gasoline pipeline that may unlock gasoline from Owowo and Usan to shore.
“So, 250,000 barrels liquids, we’d like to have the ability to get to 100 million cubic toes of gasoline per day additionally, from Owowo, underpinned by Owowo particularly. And so, the horizon has that type of chance. There may be gasoline there.”
He praised the present authorities for creating the enabling fiscal regime to incentivise new investments within the Nigerian oil and gasoline deep-water house.
Baxi mentioned ExxonMobil and the associate group had been working and impressed by the administration’s enabling bulletins by means of 2024.
Referring particularly to Presidential Govt Directives 40, 41, 42, Baxi mentioned they had been the incentives on nationwide content material and contracting.
He added that the journey for the reason that Area Improvement Plan (FDP) for Owowo was permitted had been to take every a type of intents and translate them to project-specific outcomes.
Baxi said, “You’ve heard me say this earlier than, I consider the project-specific enablers required to be outlined from these directives. So, for instance, nationwide content material directive interprets to an Owowo-specific nationwide content material technique.
“The contracting and environment friendly cycle time of contracting interprets to an Owowo contracting technique. And the motivation construction interprets to an Owowo incentive evaluation. That’s been the work since our divestment concluded.”
Peter Uzoho
Times Nigeria