Shell Nigeria commences production from Bonga Phase 3 project
Nigeria’s hope of increasing the volume of crude from offshore fields received a boost yesterday as Shell Nigeria Exploration and Production Company Ltd (SNEPCo) announced the start-up of production from the Bonga Phase 3 project.
Andrew Brown, Shell’s Upstream International Director, said: “This new start up is another important milestone for Bonga, adding valuable new production to this major facility.”
The startup production is coming barely three week s after Esso Exploration and Production Nigeria Limited, a subsidiary of ExxonMobil Corporation started oil production from Erha North Phase 2 project offshore Nigeria.
This is also coming on the heel of the Nigerian National Petroleum Corporation (NNPC) planned re-negotiation of the Production Sharing Contract (PSC) agreement it entered into with international oil companies (IOCs).
Industry analysts have said the development is good a omen for the oil and industry because of the stand-off between government and the IOCs, occasioned by the fiscal terms contained in the Petroleum Industry Bill (PIB). “This is a major achievement, given the fact that most international oil companies (IOCs)have consistently said they would not make any investment because of the differences with fiscal terms contained in the Petroleum Industry Bill (PIB) which they claim is anti-investment”, an indigenous oil operator said.
The production from the offshore fields would further increase the volume of crude oil production from the offshore which is one area where the highest volume of the country’s current production comes from, an industry operator told BusinessDay.
Currently, the production from the country’s offshore fields is about one million barrels per day.
Bonga Phase 3 is an expansion of the Bonga Main development, with peak production expected to be some 50,000 barrels of oil equivalent. This will be transported through existing pipelines to the Bonga floating production storage and offloading (FPSO) facility, which has the capacity to produce more than 200,000 barrels of oil and 150 million standard cubic feet of gas a day.
The Bonga field, which began producing oil and gas in 2005, is Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 600 million barrels of oil to date.
The Bonga project is operated by SNEPCo as contractor, under a production sharing contract with the Nigerian National Petroleum Company, which holds the lease for OML 118, in which the Bonga field is located. SNEPCo holds a 55% contractor interest in OML 118. The other co-venturers are Esso Exploration & Production Nigeria Ltd (20%), Total E&P Nigeria Ltd (12.5%) and Nigerian Agip Exploration Ltd (12.5%).