Investors Earn First Income From Lagos Oil Sale

lekkiLagos State governor, Mr. Akinwunmi Ambode
  • Investors Earn First Income From Lagos Oil Sale

Following the sale of the first oil production from Aje field, partners in the Oil Mining Lease 113 offshore Lagos, where the field is located, have earned their first income.

A top official of one of the partners disclosed this in a telephone interview with our correspondent on Wednesday, saying the second sale would be done before the end of the year.

The Aje field, which was discovered 25 years ago, achieved its first oil five months ago.

A London-based energy firm, MX Oil, one of the partners, on Wednesday, said it had received $1.2m from the sale of the first oil production.

The AIM-quoted oil and gas investing company said in an update on its website that the money was received by the PR Oil and Gas Limited, the holder of its investment in the OML 113.

Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm and operator of the OML 113, had on May 3 announced the commencement of crude oil production on the field.

Other partners are New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, Pan Petroleum (Panoro Energy) Aje Limited and PR Oil & Gas Nigeria Limited.

Panoro Energy, an independent exploration and production company with assets in Nigeria and Gabon, had in July said several international oil companies and trading houses had expressed interest in purchasing the crude produced from the Aje field.

The company, in its half year and second quarter report 2016 released in August, said the Nigerian regulators had approved the production and export sale from Aje.

It had said the first cargo of Aje crude should be lifted in September and Glencore Energy UK Limited was selected for its offtake.

Panoro said the average gross daily production at Aje, calculated from the first oil in May until mid-August, had been 5,500 barrels, which included the entire testing, commissioning, and approval period completed in mid-July.

The Chief Executive Officer, MX Oil, Stefan Olivier, on Wednesday, said, “We are very pleased to announce that the first oil production from the Aje field has been sold and that we have now received our first income from our investment in the OML 113.”

The Chief Executive Officer, Panoro Energy, John Hamilton, who described the achievement of oil production at Aje as a milestone for the company, said the sale of the first cargo of oil during September represented the start of positive cash inflows from the Aje project.

Aje is an offshore field located in the OML 113 in the western part of Nigeria in the Dahomey Basin. The field is situated in water depths ranging from 100 to 1,000 metres and is about 24 kilometres from the coast. It contains hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir.

The joint venture partners had in October 2014 taken the final investment decision to develop the first phase of the field.

They submitted the Field Development Plan to the Department of Petroleum Resources in January 2014 and it was approved in March, with the first oil expected late in 2015.

Yinka Folawiyo Petroleum was granted the Oil Prospecting Licence 309 in June 1991 as a sole risk contract under the Federal Government’s Indigenous Allocation Programme, which was put in place to encourage the development of a locally-owned and operated Nigerian upstream oil industry.

The company said, following the acquisition of 2D seismic data in 1994/95, and the drilling of the Aje-1 well in 1996, the field was discovered, adding that a second well, Aje-2, was drilled in 1997.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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