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Egina FPSO’ll sustain Nigeria’s deepwater oil exploration initiative- Senate committee

…as NNPC, Total to produce oil from Egina field at $20 per barrel

UGO AMADI, Business Editor
Nigerians foreign exchange earnings are likely to improve drastically when Egina the largest investment project currently on-going in the oil and gas sector in Nigeria is fully completed in Q4 – 2018 within the initial budget of 16 Billion USD.

Egina floating production storage offloading, FPSO a flagship project for Total, and it is above all a Nigerian project arrived at the Ladol Island fabrication complex, offshore Lagos,The Nigerian National Petroleum Corporation, NNPC, Total Upstream Nigeria Limited, TUPNI and her partners are exited at the berthing of the Floating, Production, Storage and Offloading unit (FPSO) to the shores of Nigeria from South Korea which started its journey to Nigeria since October 31, 2017.

The FPSO which is 330-metres long berthed at the newly built (under the Egina project) 500-metre FPSO integration quayside at the SHI-MCI Yard, Ladol island, Lagos where the integration of locally fabricated modules – a first for Nigeria and in fact Africa- will take place over the next few months.The Egina field was discovered by TUPNI in 2003 within the Oil Mining Licence 130 (OML130), some 200 kilometres south of Port Harcourt, Nigeria. The field is being developed by TUPNI in partnership with NNPC, CNOOC, SAPETRO and PETROBRAS. It will add 200,000 barrels per day to Nigeria’s oil production (approximately 10% of the country’s total oil production).

The arrival of the FPSO in Lagos for integration of the 6 topside modules at the SHI-MCI Yard before its final sail-away to the Egina field is a game changer as far as the execution of deep offshore oil & gas projects in the country is concerned.In the course of the project several technological feats have been recorded by the various entities involved in the project, some of which include:
The drilling rig, West Jupiter set two consecutive world records for the number of drilling days expended on drilling Egina wells. First when well B-W25 was drilled in 22.7 days and then when well B-W09 was drilled in 20.9 days.The UFR contractor, Saipem, successfully completed the installation of the first Production riser SHR COR 01 on 7th December 2017. This was the heaviest riser ever installed by Saipem in the company’s history.

The most significant difference between Egina and the other deep offshore projects by Total in Nigeria is the level of local content on the project. Being the first project to be launched after the enactment of the Nigerian Oil & Gas Industry Content Development Act in 2010, the Egina project has by far the highest level of Nigerian content of any project in Nigeria. While there has been a steady increase in the tonnage of project material fabricated in-country and the man-hours expended in-country from each project to the next, the most significant difference has been the integration of the six locally fabricated FPSO topside modules in-country. This is a first for the country and the African continent.

The Egina project is therefore a testimony to the fact that large deepwater projects can be developed with a very high level of in-country activities, thus fulfilling the aspirations and objectives of the Federal Government of Nigeria in terms of employment generation, capacity building and industrial capability development.The Managing Director of TUPNI, Mr. Nicolas Terraz, stated in his presentation that upon its commencement of production later in 2018, the Egina project will contribute about 10 per cent of Nigeria’s total oil production.According to Terraz, the project had obeyed all of the federal government’s Local Content dictates and employed about 3,000 local workforce in the last five years of its implementation, in addition to fabricating 60,000 tons of its equipment in-country.

“The Egina project, located in OML 130, is the largest oil and gas development currently ongoing in Nigeria. The field is being developed by TUPNI in partnership with NNPC, CNOOC, SAPETRO and PETROBRAS. Operated by TUPNI, the project was launched in 2013 and is expected to start producing in the fourth quarter of 2018.“It will add 200,000 barrels per day to Nigeria’s oil production, or approximately 10 per cent of the country’s total oil production,” said Terraz. “As operator of the Egina project, TUPNI fully identifies with the government’s aspirations for Nigerian Content and has been working closely with the Nigerian Content Development Monitoring Board (NCDMB) and NNPC to maximise Nigerian Content on the project.”He stated that TUPNI in response to the committee’s letter, provided a detailed submission to it with regards to its request.

Listing the local content milestones recorded by the project, Terraz, said: “Employment: the project represents a workload of 24 million man-hours worked in Nigeria, or 77 per cent of total project workload, equivalent to a workforce of 3,000 persons on average during five years. Fabrication: 60,000 tons of equipment is being fabricated in Nigeria for the project. Infrastructure: several large-scale industrial facilities were developed in Nigeria for the project, including Africa’s first FPSO integration quay, and several existing fabrication yards were upgraded for the project. Capacity development: over 560,000 man-hours of human capacity development training is being performed across Egina contracts.”

However,the cost of producing a barrel of crude oil from the Egina oil field by the Nigerian National Petroleum Corporation (NNPC) and Total Upstream Nigeria Limited (TUPNI) has been put at $20 per barrel.The Group Operating Officer (COO) Upstream of the NNPC, Mr. Rabiu Bello, disclosed this recently in his presentation at the public hearing organised by the Senate Ad-hoc committee investigating the local content elements of the 200,000 barrels capacity Egina Floating Production Storage and Offloading (FPSO) platform, in Abuja. Bello, stated that estimates made by the parties indicated that at most, it will cost operators of the field $20 to produce a barrel of oil from it, noting that this was economical and profitable.He explained that so far, only about $10 billion had been expended on the project, with no variations requested by TUPNI.

Total E&P Nigeria Limited an affiliate of TOTAL S.A, has operated in the upstream sector of the Nigerian hydrocarbon industry for over 50 years and has added about 3 billion barrels of oil to Nigeria’s production from 1966 to 2016.Incorporated in Nigeria in 1962, TEPNG has maintained strong and steadfast partnerships with the Nigerian Government, the Nigerian National Petroleum Corporation (NNPC) and several indigenous companies, in developing the country’s hydrocarbon industry.

TEPNG operates and holds a 40% interest in the NNPC/TEPNG Joint Venture, producing oil and natural gas from several onshore and shallow water concessions. Another Total affiliate, Total Upstream Nigeria Limited (TUPNI), operates the Akpo field in OML 130 deepwater lease and is currently developing the Egina field, expected to come on stream in 2018 with a capacity of 200,000 barrels per day.In addition, TEPNG has non-operated interests in the SPDC-operated joint venture (10%), the Bonga field (12.5%) and the Usan field (20%). Total also has a 15% interest in Nigeria LNG, which operates six LNG liquefaction trains on Bonny Island.

TEPNG is committed to working closely with its host communities and is supporting many projects in the field of health, education, infrastructure and economic development, through its sustainable development and community relations programmes. TEPNG delivers world class energy solutions, adds economic value to the country, and promotes best practices in safety and environmental protection, business ethics and corporate social responsibility.With a diverse work force of several nationalities and cultures working together, TEPNG is proud of its contributions to the socio-economic development of Nigeria.

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