ExxonMobil has announced a final investment decision (FID) on a $1 billion infill drilling project at the Usan deepwater oil field in offshore block OML 138. The project marks the company's first drilling campaign at the field in a decade and is intended to revitalize production. The Usan field is located in the eastern Niger Delta, approximately 43.5 miles offshore.
Jagir Baxi, managing director of ExxonMobil's affiliate companies in Nigeria, announced the decision at the 25th Nigeria Oil and Gas Energy Week Conference in Abuja on 8 July, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The investment aims to boost Usan's production by 40,000 B/D.
Esso Exploration and Production operates OML 138 under a production-sharing contract (PSC) with the Nigerian National Petroleum Company Ltd. Its co-venture partners in the block are Chevron, TotalEnergies, and Nexen, a wholly owned subsidiary of CNOOC.
First production is expected to flow within 18 months after seismic data identifies the drilling targets, NUPRC noted. Since coming on stream in 2012, about 34 subsea production and injection wells from eight subsea manifolds have been developed, according to analytics firm Wood Mackenzie.
During the conference, NUPRC also presented petroleum prospecting licenses (PPL) to bid winners from Nigeria's 2022/2023 Mini Bid Round and the 2024 Licensing Round. Companies receiving licenses included Broron Energy (PPL 2009); Petroli Energy Marketing and Supply (PPL 269); Sahara Deepwater Resources (PPLs 270 and 271), and Tulcan Energy E&P Co. (PPL 2008).
The awards represented what the NUPRC referred to as "another significant milestone in Nigeria's continuing efforts to deepen investments in the upstream petroleum sector, accelerate exploration, expand the nation's hydrocarbon reserves, and create long-term value for the Nigerian economy."
Nigeria plans to raise crude oil production above 2 million B/D with new investments after having introduced fiscal incentives and regulatory reforms under the country's Petroleum Investment Act, which has sought to restore investor confidence in the sector.
ExxonMobil's Big Plans
In April, ExxonMobil briefed the NUPRC on plans to for several multibillion-dollar deepwater projects. In making the presentation, Hunter Farris, the company's senior vice president for deepwater, praised Nigeria's improved investment climate which had led ExxonMobil to "renew our vows to Nigeria," according to a NUPRC report on its website.
Outlined projects included:
- Life-extension works on the Erha floating production, storage, and offloading (FPSO) unit in the Erha oil field in Gulf of Guinea (OML 133). ExxonMobil operates the project through its Esso subsidiary, with partners Shell and NNPC under a PSC that has been extended to 2042.
- The $7 billion to $8 billion Owowo project, which is estimated to contain about 1 billion bbl of developed resources, is progressing and could reach "FID as early as next year," Farris said.
- The Bosi oil and gas field adjacent to Erha could attract up to $16 billion, if ExxonMobil chooses to develop a proposed new FPSO and pipeline.
ExxonMobil is "getting back in business (in Nigeria), and we're serious about what we're doing" in targeting Nigeria's deepwater resources for development, Farris told the NUPRC.
Oritsemeyiwa Eyesan, the chief executive of NUPRC, said, "To hear that FIDs are likely next year is very exciting and rest assured we are willing to support you."