Total SA has started production at its Egina deep oil field, Oil Mining Lease (OML) 130 block in Nigeria, which has the capacity to produce 200,000 barrels of oil per day, a company statement said on Wednesday.
The project is expected to boost the French oil major’s oil production and cash flow henceforth as it pumps oil equal to about 10 percent of Nigeria’s current oil production.
Located some 130 kilometers off the coast of Nigeria at water depths of more than 1,500 meters, the Egina oil field, discovered in 2003, is one of Total’s most ambitious ultra-deep offshore projects. Indeed, it is one of the the company’s deepest offshore projects ever. The project is based on a subsea production system connected to a FPSO (floating production, storage and offloading vessel) designed to hold 2.3 million barrels of oil. The $3 billion FPSO integration and fabrication facility for Total was the subject of a legal tussle between Samsung Heavy Industries Ltd. and Lagos Deep Offshore Logistics Base (LADOL). But with that resolved and the project completed, Total was able to move the FPSO to site as scheduled and commence production. The FPSO is connected to more than 40 subsea wells with a depth of 1,600 meters. With Egina, Africa is host to one of the world’s largest oil and gas projects for the first time.
Stressing its strict adherence to Nigeria’s local content laws, Total stated that six of the eighteen modules on the FPSO were built and integrated locally, and 77 percent of hours spent on the project were worked locally.
“Startup has been achieved close to 10 percent below the initial budget, which represents more than 1 billion dollars of CAPEX savings, due in particular to excellent drilling performance where the drilling time per well has been reduced by 30 percent,” the French oil major stated.
“Total is proud to deliver a project of this size under the initial budget and to contribute to the development of Nigeria’s oil and gas sector by generating employment as well as building industrial capability,” stated Arnaud Breuillac, President Exploration & Production for Total.
“Furthermore, some upside potential nearby remains to be developed and we are studying in particular Preowei discovery tie-back to the Egina FPSO.”
The Preowei field is another discovery made on the OML 130 block following Akpo, which produces 150 barrels per day, and Egina. Total says an investment decision on Preowei is scheduled for 2019.
While at its peak, Egina will increase Nigeria’s oil production by 10 percent but as things stand, the country is unable to enjoy the additional output due to the deal by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut output in the early part of 2019. Per the deal, Nigeria will only be able to pump about 1.8 million barrels per day. However, post output cut deal, Nigeria will be able to conveniently produce 2.3 million barrels per day as contained in its 2019 draft budget.
Total Upstream Nigeria Limited operates the prolific OML 130 with a 24 percent interest, in partnership with Nigerian National Petroleum Corporation (NNPC), South Atlantic Petroleum – SAPETRO Ltd. (15 percent), CNOOC E&P Nigeria Limited, a wholly owned subsidiary of China National Offshore Oil Corporation (CNOOC Limited) with a 45 percent interest and Petrobras Oil and Gas BV (16 percent).