Nigeria’s aspiration to rake in additional foreign exchange inflow has received a boost, with Chevron Nigeria Limited (CNL) announcing on Friday that it had discovered a 17,000 barrels per day new oil well in the Niger Delta.
Chevron disclosed that the oil asset, Meji NW-1 spud in Petroleum Mining Lease (PML) 49, is co-owned by state-owned Nigerian National Petroleum Company Limited (NNPC).
The US company, in a statement quoted by S&P Global Commodity Insights, described the find as a “near-field discovery,” noting that the block is located in the shallow offshore area of the Western Niger Delta.
The spud reached a depth of 8,983 feet and encountered 690 feet of hydrocarbons within Miocene sands, effectively extending the producing Meji field. The well operations were completed on October 2, Chevron said.
“This accomplishment is consistent with CNL’s intention to continue developing and growing its Nigerian resources, including the onshore and shallow water areas,” the company said in the statement.
“It also supports Chevron’s broader global exploration strategy to find new resources that extend the life of producing assets in existing operating areas and deliver production with shorter development cycle times,” it added.
Chevron operates PML 49 alongside NNPC in a joint venture. The US firm holds a 40 per cent stake in the block and NNPC owns the rest. It was previously known as OML 90 but was converted recently in line with the new Petroleum Industry Act of 2021.
According to data from S&P Global Commodity Insights, production from the Meji field peaked at 51,000 bpd in 2005, but has since fallen to some 17,000 boe/d, most of it crude oil.
Discoveries were first made on the license in 1965, with production starting four years later.
Chevron did not offer a timeline for production at Meji NW-1 or any detail on how much the asset could produce. The company declined to comment further.
Nevertheless, the find is a fillip for Nigeria and illustrates the contrast with Chevron’s peers, who are leaving the Niger Delta in their droves in favour of deep-water opportunities in Nigeria, less risky jurisdictions and frontiers like Namibia and Guyana.
Eni has already quit the Nigerian onshore and shallow water, selling its business to local energy firm, Oando.
Also, Shell has agreed to sell its onshore business to the Renaissance consortium of five mostly-local companies while ExxonMobil has signed a deal with Seplat and Equinor. In the same vein, TotalEnergies is selling assets to Nigeria-focused Chappal Energies.
On September 9, the NNPC said Chevron was targeting a “significant” production boost to 165,000 bpd from five of its key licenses by the end of 2024 after converting the blocks to meet the terms of the PIA.
In January the US oil giant acquired a stake in Oil Prospecting License 215 – an exploration block – in the offshore Niger Delta, S&P recalled.
Chevron is thought to be Nigeria’s third largest producer, with stakes in 62 assets according to Commodity Insights estimates, including the prolific 90,000 bpd Agbami field and Escravos oil projects.
Nigeria has been battling to stem the tide of International Oil Companies (IOCs) departures in recent months, having seen oil output fall from a peak of 2.45 million bpd in 2005 to 1.46 million bpd today, according to the Platts OPEC Survey from Commodity Insights.
This has been blamed on underinvestment, a dearth of exploration activity, field maturation and theft as well as sabotage of oil installations and pipelines.
Nigeria estimates that the country loses as much as between 300,000 bpd and 400,000 bpd to oil theft and production forgone due to incessant sabotage of oil assets.
Emmanuel Addeh, Sylvester Idowu and Peter Uzoho
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