Petroleum Africa
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Friday, March 27, 2015
The past six months or so has not only seen a drop in crude prices, but a drop in financial results also. This is the time of year that companies are turning in their year-end results and for most, these results are much different than in the previous year.
Nigerian indigenous firm Seplat Petroleum Development Co.’s financial results saw a downturn not different than other firm’s although the company said despite this it made good progress toward its long-term strategic goals.
Commenting on the company’s results, Austin Avuru, Seplat’s CEO, said: “We have materially grown our reserves base, delivered full year average daily production in line with guidance and exceeded peak rate objectives.” These operational results are particularly positive based on the fact that the company saw extended downtime on third party export infrastructure in 2014.
Avuru went on to say that the company’s expansion plans for its gas business gathered pace and the new Oben gas processing plant will allow it to increase supply to the domestic market. “Looking ahead, in 2015 we will take a prudent approach and seek to align spend with cash flow, allocate our capital selectively and prioritize the investments that offer the highest returns. We will capitalize on opportunities to re-base our cost structure and maintain a robust capital structure, positioning Seplat well to benefit from any future recovery of the sector,” Avuru stated.
The company made moves since the start of 2015 to expand its assets, gaining a 40% working interest in OML 53 and an effective 22.5% working interest in OML 55 in February. These assets will, in the future, add materially to the company’s production base and provide options for further development.
OML 53 contains the Jisike oil field, located in the northwestern area of the block. At this time the Jisike is the only producing field on OML 53, and had a gross production of 2,000 bpd at the time of acquisition. Existing infrastructure at Jisike comprises flow-lines, phase one separation facilities and a flow station with a design capacity of 12,000 bpd and 8 Mmscf/d. The block also contains the large undeveloped Ohaji South gas and condensate field, the development of which will be coordinated with the SPDC-operated Assa North field on adjacent OML 21, together referred to as the ANOS project. The expectation is that future gas production from the ANOS project will supply the domestic market, for which significant work on commercialization terms and development concepts have been undertaken.
Seplat said that OML 53 also contains a shallow oil development potential at Ohaji South that could be pursued as a separate standalone project in the near term. Prior to initiating development of the ANOS project, Seplat expects to focus efforts on increasing oil production at the Jisike field and development of the shallow oil reservoirs in Ohaji South. The company estimates net recoverable hydrocarbon volumes attributable to its 40% working interest to be approximately 51 million barrels of oil and condensate and 611 Bcf of gas Pursuant to the Joint Operating Model approved by the the Ministry of Petroleum Seplat has been designated operator of OML 53. Seplat’s partner on the block is NNPC (60%).
OML 55 contains five producing fields (Robertkiri, Inda, Belema North, Idama and Jokka). Gross production at the time of acquisition was approximately 8,000 bpd, 1,800 bpd net to Seplat on a working interest basi). The majority of production on the block is from the Robertkiri, Idama, and Inda fields. The Robertkiri field is located in swamp at a water depth of five metres and has a production platform and utility platform installed. Production capacity at the Robertkiri facilities is 20,000 bpd and 10 Mmscf/d. Production facilities at the Idama field comprise a jack-up mobile offshore production unit (MOPU) and riser platform that have a capacity of 30,000 bpd of total fluids and 34 MMscfd. The Jokka field is produced through a manifold tied-back to the Idama facilities. Production facilities at the Inda field comprise a MOPU with a capacity of 30,000 bpd of total liquids and 34 Mmscf/d. Seplat said overall, the infrastructure on OML 55 comprises four flow-stations, a network of flow-lines and two eight-inch pipelines that connect to third party operated infrastructure. The Belema field is unitized with OML 25 and is produced via a flow-station on that block.
In addition to the oil potential on the block there is also an opportunity to develop the significant gas resources that have also been identified. The company estimates net recoverable hydrocarbon volumes attributable to its 22.50% effective working interest to be approximately 20 million barrels of oil and condensate and 156 Bcf of gas. Pursuant to the Joint Operating Model approved by the Honorable Nigerian Minister of Petroleum Resources, Seplat has been designated operator of OML 55. Seplat’s partners on the block are NNPC (60%) and Belemaoil (17.5%).
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