Daily Independent SPDC invests $15b to develop Bonga SW, Erha projects By Anayo korie - Ag Energy Editor Shell Nigeria Exploration and Production Company has reinstated its determination to develop Bonga South West and the Erha Deepwater projects as part of the agenda to boost Nigeria’s crude reserve and daily oil which has dropped to 35 billion and 2.4 million from the initial levels of 37 billion and 2.5 million respectively. Vice-President, Nigeria & Gabon Shell Upstream International, Markus Droll, said the Bonga project is an expansion that will cost $12.35 billion to develop while another $3.5billion is to invested in the development Erha which is a joint venture project with ExxonMobil. Speaking at the just concluded Nigeria oil and gas held in Abuja, he however said the final investment decision (FID) on the Bonga South West would be taken by the end of 2014. Droll said: “We are an oil and gas business, and our foremost expertise is to develop and operate oil and gas fields. Our commitment is to continue to bring the best expertise and technology to Nigeria, so that an efficient industry can continue to flourish. “In deepwater, we are pushing forward to have the world-scale Bonga South West project FID ready by the end of 2014. We continue with a strong suite of infill drilling projects on the original Bonga FPSO, so that we can keep this facility full generating returns for partners and government alike,” he added. “Similarly, with our operator partner ExxonMobil, we are investing substantially in the further development of the important Erha field,” he said. The Erha North Phase II is expected to create $3.5 billion worth of investment in services and should begin production in 2015 with 50,000 b/d of crude output. Droll recalled that in “2013, production was badly affected by the direct impact of thieves placing illegal oil tapping connections on oil infrastructure.” He said the SPDC alone removed 300 vandalised points in 2013, which usually requires “production systems to be shut down, so that there is a compound effect between what is being stolen and what simply can’t be produced due to facility outages.” According to him, oil theft is a complex issue that will require sustained, multi-stakeholder measures on a number of fronts to arrest, and ultimately reverse it. “There is no doubt in my mind, if together as an industry and government we do not succeed in turning this problem around, then oil production in the Delta will remain well below its potential, and the environment will continue to suffer,” he said. Droll explained that security was a concern for many international oil firms on a daily basis, adding, “Over the years, the industry has learnt and adapted well to the threats; but it comes at a cost. It is hard to put an accurate figure to this issue.” Shell Nigeria began producing oil and gas from the Bonga field, Nigeria’s first deepwater oil discovery, located in the Oil Mining Lease 118, in 2005. Lying 120km offshore, the Bonga Floating Production Offshore vessel has the capacity to produce more than 250,000 barrels of oil a day and 150 million cubic feet of gas a day. The 225,000 barrels per day capacity Bonga South West offshore project, which is also located on OML118, was discovered in 2001 with first oil scheduled for 2020. Details of the projects prepared by the company show that the Bonga South West development plan will entail the construction of an FPSO vessel with a production capacity of 225,000 bpd, and two phases of drilling for a total of 44 wells – 22 producers and 22 water injectors. It will also require the deployment of a subsea production system with 85 kilometres of pipe-in-pipe, 65 kilometres of umbilical, three water injection lines and four production loops.
Posted on: Fri, 21 Mar 2014 10:24:46 +0000
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