Seplat buys stakes onshore and offshore Nigerian blocks

Nigeria seplatNigerian indigenous oil and gas company Seplat has announced that it has completed the acquisition of a 40 per cent working interest in OML 53 and a 22.5 per cent working interest in OML 55 in the West African country

Nigerian National Petroleum Corporation (NNPC) holds the remaining 60 percent interest in both the OMLs.

The upfront acquisition cost to Seplat for OML 53, after adjustments, was US$254.6mn of which US$69mn had previously been paid as a deposit in 2013 and US$185.6mn paid at completion.

The Nigerian company has estimated net recoverable hydrocarbon volumes attributable to its 40 per cent working interest to be approximately 51mn barrels of oil and condensate and 17.3bn cu/m of gas. Seplat has been designated as operator of OML 53.

Seplat CEO Austin Avuru said, “In particular, this transaction fits neatly with our strategy of securing, commercialising and monetising natural gas in the Niger Delta with a view to supplying the rapidly growing and evolving domestic market. In addition to the large scale discovered, but undeveloped gas and condensate resources that are yet to be fully classified through detailed technical work, there are near term opportunities to increase and optimise oil production significantly above current levels.

“We very much look forward to working with NNPC and leveraging our technical and commercial expertise as Operator to realize the full potential of this high grade acreage.”

OML 53 covers an area of 1,585 sq km and is located onshore in the north eastern Niger Delta. The Jisike oil field, located in the north western area of the block, is currently the only producing field on OML 53. Current gross production from Jisike is approximately 2,000 bpd. Existing infrastructure on OML 53 at Jisike comprises flow-lines, phase one separation facilities and a flow station with a design capacity of 12,000 bpd and 226,534 standard cu/m per day.

The block also contains the large undeveloped Ohaji South gas and condensate field, the development of which would be coordinated with the SPDC operated Assa North field on adjacent OML 21, together referred to as the ANOS project. According to Seplat, the expectation was that future gas production from the ANOS project is expected to supply the domestic market, for which significant work on commercialisation terms and development concepts has been undertaken, and that produced condensate would be available for sale into the global market.

There was also shallow oil development potential at Ohaji South that could be pursued as a separate, standalone project in the near term, the company noted. Prior to initiating development of the ANOS project, Seplat expected to focus efforts on increasing oil production at the Jisike field and development of the shallow oil reservoirs in Ohaji South.

Meanwhile, the cost for Seplat to acquire its 22.5 per cent effective working interest in OML 55 was US$132.2mn. The company estimated net recoverable hydrocarbon volumes attributable to its effective working interest to be approximately 20mn barrels of oil and condensate and 4.41bn cu/m of gas. Current gross production at OML 55 is approximately 8,000 bpd.

Avuru added, “The addition of OML 55 to our portfolio, together with the separately announced acquisition of OML 53, expands our footprint in the Niger Delta to six blocks and further cements our position as a leading indigenous independent E&P in Nigeria. OML 55 provides us with a number of attractive opportunities to boost oil and gas output, and is consistent with our strategy of prioritising those that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow water offshore areas of Nigeria.”

OML 55 covers an area of 840 sq km and is located in the swamp to shallow water offshore areas in the south eastern Niger Delta. The block contains five producing fields — Robertkiri, Inda, Belema North, Idama and Jokka. The majority of production on the block is from the Robertkiri, Idama and Inda fields.

The Robertkiri field is located in swamp at a water depth of five metres and has a production platform and utility platform installed. Production capacity at the Robertkiri facilities is 20,000 bpd and 283,168 cu/m of gas per day.

All produced liquids from OML 55 are delivered via third party infrastructure to the Bonny terminal for processing and shipping. In addition to the oil potential on the block, there is also an opportunity to develop the significant gas resources that have also been identified, Seplat revealed.

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