8 February 2013

Nigeria: Exxonmobil Awards Subsea Seven Contract for Deepwater Field

Nigeria's oil and gas industry is set to witness another landmark development especially in the area of development of deepwater oil fields as Esso Exploration and Production Nigeria Limited (EEPNL), a subsidiary of ExxonMobil has awarded contract for the Erha North field.

The award of the contract is coming exactly seven years after the company commenced production in its Erha field, the company's first deepwater oil field in Nigeria.

In 2006, the company started production from the world-class Erha deepwater development in Oil Mining Licence (OML) 133, about 97 kilometres offshore Nigeria in 1,200 metres of water.

The Erha and Erha North have a total crude oil production capacity of over 200,000 barrels per day.

The award of the contract was an indication that the oil major and the Nigerian National Petroleum Corporation (NNPC) have reached an agreement on the cost of the project.

Erha North is one of the several oil and gas projects, which have been stalled for several years due to the inability of the NNPC and the International Oil Companies (IOCs) to reach an agreement on their costs estimated at over $30 billion.

Some of the other projects include Bonga South West, Bonga North East and Bonga North (Aparo), which are being proposed by Shell Nigeria Exploration and Production Company (SNEPCo), under a Production Sharing Contract (PSC) arrangement with the NNPC and Egina deepwater project, sponsored by the French oil giant, Total.

Confirming the new contract, which will be executed in water depths of between 1,000metres and 1,200metres, Luxembourg-based Subsea 7 SA said in a statement yesterday that the Erha North contract was awarded to a consortium of West African Ventures Limited and Subsea 7's Nigerian subsidiary.

"Subsea 7's scope of work includes the engineering, procurement, fabrication and installation of 25 kilometres of flowlines, 15 kilometres of umbilicals, and 17 rigid jumpers. The scope also includes modifications to the FPSO in order to integrate it with the new subsea facilities," the statement said.

The statement further stated that the project would maximise the use of local personnel and resources in Nigeria, adding that significant parts of the design would be executed in Nigeria, while all subsea structures would also be fabricated in the country.

However, the statement did not disclose the value of the contract.

"Engineering will commence immediately with offshore installation scheduled to commence in early 2015, using the Seven Borealis and the Seven Pacific," the statement added.

Subsea 7 is a seabed-to-surface engineering, construction and services contractor to the offshore oil and gas industry worldwide.

The Erha and Erha North project consists of 32 subsea wells tied back to a Floating Production, Storage, and Offloading vessel (FPSO).

The project also uses a Catenary Anchor Leg Mooring (CALM) buoy, which is reputed as one of the largest in the world, for docking of crude oil carrier and transfer of product.

EEPNL and its co-venturer, Shell Nigeria Exploration and Production Company Limited (SNEPCO), had in May 1993 acquired the rights to explore offshore Oil Prospecting Lease (OPL) 209.

The field was converted to OML 133 in March 2006 after it came on stream, with the NNPC as the concessionaire.

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