TRANSCORP signs PSC with Nigeria for onshore oil block

oilfield nigeria-lindseygee flickrAccording to SacOil, the block holds 100mn barrels of oil equivalent gross contingent resources. (Image source: Lindsey Gee/Flickr)Transnational Corporation of Nigeria (TRANSCORP) has signed a production sharing contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) for oil block OPL281

TRANSCORP had, in 2006, won the OPL281 field in a mini bid round organised by the Ministry of Petroleum Resources, paying US$35mn to the government, Ventures Africa reported.

OPL 281 is an onshore block covering an area of 138 sq km and is located in the western delta region of Nigeria, 25km away from Forcados Crude Export Terminal.

According to the company, the deal will enable TRANSCORP to continue its drilling plans on the block in order to supply gas to its planned energy city located in the state of Delta, which includes fertiliser and petrochemical plants and its 1,000MW capacity TRANSCORP Ughelli power plant, it added.

Obinna Ufudo, CEO of TRANSCORP, said, “The first phase of the company’s transformation is to grow the business lines including oil and gas, which is solely based on the prolific OPL281.

“Our oil and gas business will witness a speedy take-off as we expect to finalise negotiations of the PSC of OPL281 with the department of petroleum resources.”

The company, according to Ufudo, will focus on concluding the rehabilitation of some turbines it has identified as important to improving generating output at its Ughelli plant to 700MW.

The new deal is expected to boost the company’s profit and further diversify income streams, which is expected to translate to higher dividend for shareholders.

The other project owners are SacOil of South Africa and UK’s Energy Equity Resources (EER), who hold 20 per cent stake each in the block. OPL281 is also believed to contain about 30 trillion cubic metres of gas.

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