The joint venture partners in Otakikpo marginal field have executed definitive agreements for the next phase of its development, with a plan to drill seven new wells.
Lekoil, an oil and gas exploration and production company with a focus on Nigeria and West Africa, disclosed this on Monday in a statement entitled ‘LEKOIL inks Infrastructure agreements for Otakikpo development’.
Otakikpo Joint Venture is made of Green Energy International, the operator of the Otakikpo marginal field, and the technical partner, Lekoil Oil and Gas Investments.
“Further to the execution of a non-binding Memorandum of Understanding, the Otakikpo JV has executed binding definitive agreements with Schlumberger which covers the comprehensive infrastructure sharing and field management services for the planned upstream drilling programme,” Lekoil said in the statement.
It said the upstream drilling programme consisted of a phased drilling of up to seven new wells in Otakikpo.
According to the statement, the drilling of the first two wells is expected to increase gross production to approximately 10,000 barrels of oil per day from the current gross rates of 5,755 bopd.
The Chief Executive Officer, Lekoil, Lekan Akinyanmi, said, “We continue to make progress towards our shared ambitions to drill additional wells and unlock further value for all stakeholders from Otakikpo.
“We are pleased with the Joint Venture’s relationship with Schlumberger, a world class project execution partner, as we are committed to advancing this exciting and transformative project that is aimed at increasing the value and cash generation abilities of the field.”
According to him, as a result of the lower oil price environment and a change of project scope by the Otakikpo JV and other project stakeholders, the project capital expenditure estimates are a reduction on previous estimates of $170m as announced on 1 July 2019.
“Lekoil expects to potentially raise, according to its participating interest, its own portion of the required funding from a combination of offtake financing from a subsidiary of a major international oil company and cash flow from existing production,” Akinyanmi added.
The statement said the Otakikpo JV entered into an infrastructure sharing and utilisation agreement in respect of the production from the Otakikpo marginal field with Integrated Hydrocarbon Infrastructure Limited.
Integrated Hydrocarbon Infrastructure is a special purpose company incorporated and owned by Green Energy International Limited to build, own, operate and maintain the shared infrastructure facilities, according to the statement.
It said pursuant to the ISUA, Integrated Hydrocarbon Infrastructure Limited would assume the role of facility operator (from its parent, Green Energy International Limited).
It will also build, own, operate and maintain certain flow stations, pipeline facilities and terminal facilities to be used for the evacuation of crude oil produced from the Otakikpo marginal field, the statement added.