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Lagos Oilfield Reserves Rise, Investors Eye Gas Project

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Crude oil
  • Lagos Oilfield Reserves Rise, Investors Eye Gas Project

Investors in Aje oilfield, offshore Lagos, have announced a significant increase in its reserves as well as a confirmation of the viability of the Aje gas development.

Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm, is the operator of the Oil Mining Lease 113, where the field is located. Other partners are Pan Petroleum Aje Limited (a subsidiary of Panoro Energy), New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field).

London-based MX Oil said in a new update that there had been significant developments in the Aje project over the past two years that had had a material impact on the project’s reserves and resource position.

It said since the last Competent Persons Report in July 2014, three new Cenomanian penetrations had been drilled (Aje-5, Aje-5ST1 and Aje-5ST2), with production coming on-stream from the Cenomanian reservoir in May 2016 and from the Turonian oil rim in May 2017.

“A field development plan for the Turonian Aje gas project was submitted to the Nigerian government for consideration in 2017. The FDP comprises four to five production wells in the Turonian, tied back to existing and new infrastructure,” the company said.

According to the updated CPR provided by the AGR TRACS International Limited, an independent reserves auditor, the gross proved reserves at Aje increased to 78.2 million barrels of oil equivalent from 11.7 million boe in 2014; proved and probable reserves rose to 127.1 million boe from 23.4 million boe in 2014, and proved, probable and possible reserves stood at 215 million boe.

MX Oil said, “The level of reserves has increased significantly since the 2014 CPR. These estimates of reserves have been derived based on an oil price assumption of $60/bbl flat real terms and a gas price assumption of $4/Mscf flat real terms.

“The AGR TRACS has also certified gross 1C Unrisked Contingent Resources of four million boe, 2C UCR of nine million boe and 3C UCR of 17.5 million boe.”

The company said the recent performance of the Aje-5ST2 well completed on the Turonian oil rim had encouraged the Aje partnership to consider a more extensive development of the oil rim.

It said since the Aje Gas FDP was completed and submitted ahead of the well coming on line, the AGR TRACS had only been able to recognise contingent resources associated with four horizontal wells proposed as a Phase 2 development in that plan.

The partner said, “The encouraging production performance for the Aje-5ST2 well so far provides a strong incentive for further studies to better understand how the oil rim can be optimally developed.

“These results confirm the commercial quantity of the Aje gas development, highlight the need for a revision to the development plan once the oil rim studies are completed and will underpin a final investment decision on the development of the Turonian reserves in the future.”

The media reported in March that the JV partners had resolved the legal dispute in relation to drilling of new development wells out of court.

Panoro Energy, an independent exploration and production company based in London, announced in December 2016, seven months after the field started producing, that it was in disagreement with its JV partners over cash call and intended to initiate arbitration and legal proceedings to protect its interests.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Vice President, Yemi Osinbajo Seeks Collaboration With Vietnam on Agriculture and Technology

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Nigeria’s Vice President, Prof Yemi Osinbajo has sought collaboration with Vietnam in the areas of agriculture and technology. The vice president spoke in Vietnam at a bilateral meeting on Monday. 

During the meeting with his Vietnamese counterpart, Võ Thị Ánh Xuân, Osinbajo acknowledged both countries’ market potentials in the digital economy, telecommunications, and agriculture. 

Speaking at the Presidential Palace in Hanoi, Vice President Yemi Osinbajo noted that telecommunication penetration in Nigeria is one of the deepest in any developing country, stating that about 120 million Nigerians now use one telecom service or the other.

Calling for collaboration on digital economy, Osinbajo said “We have close to 120 million of our citizens who have put to use telecom equipment or devices. And also, broadband connectivity is vastly improved. We hope that by 2025, we will have broadband connectivity for all of our over 200 million people”. 

On the call for collaboration in the area of agriculture, the vice president noted that cashew production is an important area in which both counties can partner. 

He said ” Given the food crisis that the world faces today, and is likely to continue facing even in the coming years, I like to say that the way forward is for our countries to collaborate. For instance, establishing cashew processing plants in Nigeria”. 

Investors King understands that Vietnam is the world’s second-largest cashew processor with an annual processing capacity of 1.2 million tons representing up to 40 percent of the world’s total capacity. 

Speaking at the event, the Vietnamese Vice President commended Nigeria’s leadership role in the ECOWAS sub-region and Africa generally, especially in the peaceful resolution of disputes. 

She also commended Nigeria’s handling of the Covid 19 pandemic while reposing confidence in Nigeria’s ability to resolve challenges confronting the African continent and the West African region in particular. 

Conclusively, she added that her country would continue to work with Africa to meet its aspirations in agriculture, clean energy and digital penetration.

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Economy

Togo, Benin, and Niger Republic Owe Nigeria N4.1 Trillion in Electricity Debts

Nigeria currently supplies electricity to the Republic of Benin, Togo, and Niger through the Nigeria Bulk Electricity Trading, NBET Plc

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Electricity - Investors King

The House of Representatives on Public Account has disclosed that Nigeria’s neighbouring countries, Togo, Benin, and Niger Republic owe the country about N4.1 trillion in electricity bills.

The revelation was contained in a letter sent by the committee to the Managing Director of Nigeria Bulk Electricity Trading, NBET Plc, Dr. Nnaemeka Eweluka.

According to the letter which was signed by the Chairman of the Committee, Hon. Oluwole Oke, the Managing Director of NBET is expected to appear alongside Dr. Marilyn Amobi, who served as MD/CEO from 2016 to 2020. 

The house committee has accused the former MD, Amobi of non-rendition of the Audited Accounts for the years 2014, 2015, 2016, 2017, 2018, and 2019.

Investors King understands that Nigeria currently supplies electricity to the Republic of Benin, Togo, and Niger through the Nigeria Bulk Electricity Trading, NBET Plc. About 6 percent of the electricity generated in the country is sold to the neighboring countries. 

Meanwhile, according to the managing director of NBET, the federal government is working on structures that will enhance power distribution in the country, stating that most of the power-generating companies are currently located in the southern part of the country. 

“Most of the power generation companies are located within the south-south and south-west largely because of gas with one in the south-east, of course, we have the hydros in Niger state,” he said.

The MD added that Nigeria could generate up to a capacity of about 14,000 megawatts. He however noted that the distribution capacity is only between 4,000 to 5,000 megawatts per day.

Eweluka nonetheless sounded a note of hope, making references to the intervention projects that are currently ongoing such as the partnership with Simens.

“To address this gap between what is available and what the system can currently carry; there are a number of intervention projects that the government is currently pursuing, that include the presidential power initiatives in partnership with Siemens,” he concluded.

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Economy

No Plan to Increase Fuel Price; Says FG

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NNPC - Investors King

The Federal Government has stated that it has no plan to increase fuel price during the yuletide period.

This assurance is coming amid the nationwide fuel scarcity which has pushed the price of petrol above N250 in many retail stations.

Investors King learnt that fuel is being held for N250 per litre in Abuja and several other cities across the country while black marketers are charging between N400 and N450 per litre.

The scarcity and the high price of fuel are however becoming unbearable for many Nigerians, especially those who have reasons to embark on business travel for the December festivals.

According to the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, most of the association members, who owned the bulk of the filling stations across the country, were now subjected to purchasing PMS at about N220/litre, which was why many outlets currently dispensed at about N250/litre and above.

He noted that the cost of the commodity has been on the rise due to its unavailability and other concerns in the sector. 

He added that the price of fuel could be sold from N350/litre to N400/litre before the end of the year. 

Meanwhile, a number of senior officials at the NNPC had stated that the subsidy was becoming too burdensome on the national oil company, as this was another reason for the scarcity of PMS.

According to a source who is familiar with the development as reported by Punch News, “How can we continue to import 60 million litres of petrol daily and keep subsidising it, while millions of litres are either diverted or cannot be accounted for? The burden is too much, as you rightly captured in that story”. 

Investors King understands that NNPC is the sole importer of petroleum into the country and it pays billions of naira every month to subsidise the product to N147 per litre. 

Reuters News reported that in August 2022, NNPC paid more than $1 billion as fuel subsidy while the federal government earmarked N3.6 trillion as fuel subsidy in the 2023 budget proposal. 

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