Hector Igbikiowubo
27 November 2008
The $3.5 billion (about N405.9 billion) East Area Projects operated by Mobil Producing Nigeria, an ExxonMobil affiliate was officially commissioned Tuesday in Eket has increased crude oil output, increased oil reserve, monetized flared gas volumes and increase in Nigerian Content input.
Vanguard gathered that the volume of gas reduction achieved by the project is the equivalent of taking one million cars off the road.
Mobil Producing Nigeria (MPN) is the operator of the Nigeria National Petroleum Corporation/MPN Joint Venture.
Mr. John Chaplin, Chairman and Managing Director of MPN who incidentally has been promoted to the position of Vice President of the ExxonMobil Corporation and is expected to leave the country shortly explained that the East area Projects includes Additional Oil Recovery (AOR) and Natural Gas Liquids 11 (NGL11).
The major components of the AOR projects are a gas compression complex plus seven associated platforms, personnel living quarters and more than 100 miles of pipeline for natural gas gathering and distribution.
"We expect the project to produce 530 million gross barrels of additional oil reserves from blocs OML 67 and OML 70 and provide a peak volume of 120,000 barrels of oil per day," he disclosed. Chaplin also disclosed that considering OPEC cuts and corresponding cuts in Nigeria's output, the new addition takes MPN's production to about 800,000 barrels per day.
The NGL 11 includes the installation of an offshore gas-processing complex, more than 125 miles of new pipelines and the expansion of the joint venture's Bonny River terminal facilities.
"The new facilities can process up to 950 million cubic feet of natural gas a day, yielding up to 65,000 barrels per day of natural gas liquids," the MPN managing director pointed out.
He said Nigerian workers and local contractors were able to achieve an enviable safety feat of 12 million hours on the project.
Nigerian companies also provided in country fabrication, logistics support and other services as well as training and development of employees and contractors. "These companies were involved in construction of the Bonny River terminal expansion, installation of pipelines, fabrication and installation of components for the EAP offshore complex.
"A key component of the EAP national content strategy included the use of funding from Nigerian banks. Approximately $220 million of the total project financing of the NGL 11 development was completely arranged through Nigerian banks," Chaplin disclosed.
The NGL 11 project was actually financed by loans to the tune of $1.275 billion. The loans were supported by a $325 million guarantee from the Overseas Private Investment Corporation, an agency of the United States of America Chaplin described funding of the EAP as prime example in alternative funding arrangement and praise Bonny community which gave the JV the freedom to operate, adding that this is probably 'because they see us as a responsible corporate citizen'.
He pointed out that short term gas development would see the company supplying 100 million cubic feet of gas per annum to the Nigeria Liquefied Natural Gas plant in Bonny from next year for processing and subsequent supply to the domestic market.
"In the medium term, we are also working on 500Mw IPP to be located at the QIT at a cost of $500m. But there are issues of securitization and the fiscal arrangements yet to be worked out with government," he noted.
Also speaking, Alhaji Abubakar Lawal Yar'Adua, the Acting Group Managing Director of the NNPC was represented by Austin Oniwon, the Group General Manager in charge of Research and Development.
He explained that the EAP will progress the JV gas flare out efforts by eliminating approximately 200 million cubic feet of flared gas per day.
"This accomplishment is in line with the Federal government's objective of utilizing Nigeria's vast gas resources for economic development, emphasizes the NNPC's commitment to various gas projects and minimizes the environmental footprints of oil and gas operations in the country."
On the issue of securitization and providing the right fiscal regime for supply of gas to the domestic market as well as investment in power projects, contrary to claims of lack of commitment, Oniwon said the Corporation was working out modalities with its partners.
He also said it was not true that the current management of the Corporation has not made an effort to progress projects, adding that the industry was a continuum.
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