- Jan 03, 2019
- This Day
Efforts by the federal government to boost Nigeria’s oil production has received a boost as French oil major, Total, and global shipbuilding giant, Samsung Heavy Industries (SHI), Wednesday confirmed that crude oil production has started in the 200,000 barrels per day-capacity Egina deepwater oilfield.
Total has also stated that start-up was achieved in Egina project close to 10 per cent below the initial budget, which represents more than $1 billion savings in capital expenditure (CAPEX), due in particular to excellent drilling performance where the drilling time per well has been reduced by 30 per cent.
President of Exploration and Production in Total Group, Arnaud Breuillac, said in a statement issued from Paris, France, yesterday that the oil giant started up production on December 29, 2018 from the Egina field, located in around 1,600 metres of water depths, 150 kilometres off the coast of Nigeria.
Also in a separate statement, Samsung Heavy Industries Nigeria (SHIN), said the Egina Floating Production Storage Offloading unit (FPSO), one of the world’s largest FPSOs, which was built by the Korean firm for Total, achieved First Oil after the company had successfully completed the mooring, hook-up and the required offshore commissioning of the floating vessel.
Breuillac acknowledged that the Egina FPSO is indeed the largest FPSO that Total Group has ever built worldwide, pointing out that at peak production, the oilfield will produce 200,000 barrels of oil per day, which represents about 10 per cent of Nigeria’s daily production.
“Total is proud to deliver a project of this size under the initial budget and to contribute to the development of Nigeria’s oil and gas sector by generating employment as well as building industrial capability. Egina will significantly boost the Total Group’s production and cash flow from 2019 onwards, and benefit from our strong cost reduction efforts in Nigeria where we have reduced our operating costs by 40 per cent over the last four years,” Breuillac explained.
“Furthermore, some upside potential nearby remains to be developed and we are studying in particular Preowei discovery tie-back to the Egina FPSO,” Breuillac added.
Celebrating the Egina milestones, Samsung Heavy Industries Nigeria Limited stated that Egina FPSO had arrived at its offshore location on August 29, 2018 from the fabrication and integration yard in Lagos.
According to SHIN, it was at the offshore location that the company completed the remaining commissioning work and prepared the FPSO for oil production.
“SHIN has worked towards and successfully achieved this challenging goal of achieving First Oil in 2018, as agreed by all parties. SHIN also completed the FPSO mooring well in advance – on September 17, 2018 against target date of September 23, 2018, riser hook-up activities and required offshore commissioning, putting an exemplary effort in achieving First Oil in 2018,” the statement added.
SHIN added that it successfully completed the FPSO work in SHI-MCI yard and continued its work offshore under strict Nigerian local content regulations with similar safety and quality standards applicable in the company’s Geoje shipyard in Korea.
“This volume of onshore and offshore work had never been accomplished in Nigeria before now. With all these accomplished, the high-risk portion of the Egina project has now been completed. This achievement have been followed by very good response from Nigerian authorities, international clients and earned major headlines in the press. This leads SHI to gain competitive edge in future offshore project orders in West Africa, of course including Nigeria,” the company added.
The FPSO is currently installed on Egina offshore field, located 150 kilometres off the coast of Nigeria. The mega facility is 330 metres in length, 61metres in breadth, and 34metres in height.
The facility boasts 200,000 barrels of production per day at the peak and 2.3million barrels storage capacity with topsides weighing 60,000 tonnes.
The new-build FPSO contract was a turn-key project in which SHI covered the entire engineering, design, procurement, construction, transportation and commissioning.
“We are very proud to announce the successful achievement of first oil in 2018, which is adding another feather in our cap, subsequent to our completion of the first ever Nigerian Onshore Integration works for EGINA FPSO with thorough preparation in compliance with Nigeria local content laws.”
“Samsung is confident of successfully completing the remaining offshore commissioning works and handover of Egina FPSO to our client Total, along with its partners – NNPC, CNOOC, SAPETRO and PETROBRAS on schedule, through close co-operation and support from all relevant Nigerian Government Agencies including NNPC, National Petroleum Investment Management Services (NAPIMS), Nigerian Content Development and Monitoring Board (NCDMB), Nigerian Ports Authority (NPA), Nigerian Export Processing Zone Authority (NEPZA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Immigration Service (NIS), and the Department of Petroleum Resources (DPR), with the highest levels of safety and quality control.”
Egina Project Saves $1bn Below Initial Budget
Meanwhile, Total has also stated that the startup was achieved in Egina project close to 10 per cent below the initial budget, which represents more than $1 billion savings in capital expenditure (CAPEX), due in particular to excellent drilling performance where the drilling time per well has been reduced by 30 per cent.
According to the company, the project has also involved a record level of local contractors, as six of the 18 modules on the FPSO were built and integrated locally, and 77 per cent of hours spent on the project were worked locally.
Egina field will push Nigeria’s oil production, including condensates above 2 million barrels per day.
Initially discovered in 2003, the Egina field is the second development in production on the Oil Mining Lease (OML) 130 following the Akpo field, which started-up in 2009.
The Preowei field is another large discovery made on this prolific block for which an investment decision is scheduled for 2019.
Total Upstream Nigeria Limited operates OML 130 with a 24 per cent interest, in partnership with NNPC, South Atlantic Petroleum – SAPETRO (15 per cent), CNOOC E&P Nigeria Limited, a wholly owned subsidiary of CNOOC Limited (45 per cent) and Petrobras Oil and Gas BV (16 per cent).
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