NationalMirror Joining the big league Udeme Akpan July 8, 2013 Lagos State is on the verge of joining the league of oil producing states in the country, a development which experts say would not only raise the state’s revenues, and employment, but also poses serious communal and environmental challenges As at the last count, Anambra State was the newest addition to the elite club of Nigeria’s oil producing states through the Anambra Basin which recorded a major oil discovery in 2012, thus making it the second Basin to start oil and gas production in the country. In August last year, the Federal Government declared Anambra State the 10th oil producing state in the country during the inauguration of Orient Petroleum’s Anambra River Production Facility in Aguleri- Out. As things stand now, Anambra may not be the last as Lagos; the nation’s commercial capital, is on the verge of becoming a major oil and gas bearing state. Afren Plc and its partners, Lekoil Limited and Optimum Petroleum reported signifi cant oil discovery offshore Dahomey Basin in Lagos. The discovered light oil accumulation was based on the results of drilling and wire line logs from a high impact Ogo-1 well, located on the Oil Prospecting Licence, OPL 310 offshore Nigeria. Afren is optimistic that the discovery is likely to be higher than its initial 78 million barrels of oil equivalent (mmboe) target, which encourages search to further high potential zones. Business Courage fi ndings showed that the Department of Petroleum Resources (DPR), the industry regulator has already delved into the matter to validate the development. Afren stated that: “The Ogo-1 well has been drilled to a total measured depth of 10,518 ft (10,402 ft true vertical depth subsea), and has encountered a gross hydrocarbon section of 524 ft, with 216 ft of net stacked pay. The well was targeting 78 mmboe of gross P50 prospective resources, but based on evidence to date; targeted resources are likely to be signifi cantly in excess of previous estimates. Further evaluation using wireline log analysis is currently underway prior to extending the well to a total measured depth of 11,800 ft (11,684 ft vertical depth subsea) to target further high potential zones. It stated that “The Ogo-1 discovery, testing a four-way dip-closed structure in the Turonian, Cenomanian, and Albian sandstone reservoirs, confi rms the extension of the same Cretaceous sandstones that have yielded other signifi cant discoveries along the West African Transform Margin, WATM. The fi rm explained that: “Following the completion of drilling operations at Ogo-1, the Partners intend to drill a planned side-track, Ogo-1 ST, which will test a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources. It also stated that: “The discovery of oil in the Ogo-1 well opens up a new oil basin in an under-explored region and represents a possible extension of the West African Transform Margin. Based on evidence to date, targeted resources are likely to be signifi cantly in excess of previous estimates, with some high-potential zones still to be drilled. We look forward to working with our Partners to realise the full potential of Ogo and our additional prospects on the license. The Ogo-1 exploration success follows a series of recent discoveries, Okoro Field Extension, Ebok North Fault Block and Okwok in Nigeria and Simrit-2 and Simrit-3 on the Ain Sifni Block in the Kurdistan region of Iraq.” Clearly, the new fi nd will delight Lagosians and other Nigerians, not only because of the present development but partly because another group, Yinka Folawiyo Petroleum and Chevron already plan to start production from the Aje gas and condensate fi eld, located at Oil Mining Lease 113, about 43 kilometres offshore Lagos. The fi eld is expected to reach a peak production of between 50,000 to 80,000 barrels of oil equivalent a day. The water depth in the region is 3,000 feet. Major shareholders especially Yinka Folawiyo Petroleum are said to be working to realise the plan. The OML was formerly known as Oil Operating Licence 309 and which was awarded to Yinka Folawoyo in 1991 as part of government measures to increase the involvement of indigenous fi rms in the industry. The licence was converted to OML 113 in 1998 for a period of 20 years. It is expected to yield about 60.2 million standard cubic feet of gas a day; 1,729 barrels of condensate a day; and 2,389 barrels of oil a day. Available data have it that the fi rst quarter of 2008, another appraisal well known as Aje- 4 was drilled by the Transocean Deepwater Pathfi nder drill-ship to carry out a complete appraisal of the fi eld. Drilling of the Aje-4 well established that the fi eld contains a laterally extensive reservoir structure. The fi eld was declared a commercial prospect in February 2009. Its appraisal was based on 915km of 2D seismic data, 700km2 of 3D seismic data and an electromagnetic survey, which some operators still use for drilling in the industry. Expectedly, the beginning of commercial oil and gas production and export in Lagos is expected to boost the nation’s production capacity presently estimated at over 2.5 million barrels per day, bpd. National President of the Oil and Gas Service Providers Association of Nigeria, OGSPAN, Colman Obasi in a telephone interview stressed that the oil fi nd will certainly boost foreign exchange generation to all stakeholders, including the oil companies, Federal Government and Lagos State Government. “The development will also create new contract opportunities to oil services companies and several direct and indirect employment opportunities as well as provision of basic utilities to communities,” he said. The Duke Energy Distinguished Professor of Environmental Engineering and Science, University of North Carolina, Charlotte, USA; member, Education Caucus, United Nations Commission on Sustainable Development; and Chairman, Implementation Committee of the African Science Plans, the International Council of Science (ICSU), Prof. Hilary Inyang however warned that stakeholders should be proactive about possible environmental problems that could arise. He stated that everywhere in the world, oil operations come with some environmental hazards, especially gas fl aring and oil spillage.” He also said that the creation of wealth through oil and gas production and export would also lead to relative increase in crime rate as fraudsters may be attracted to create new criminal ways and means of benefi ting from the oil wealth. He added that these and other concerns should be properly identifi ed and planned for in advance in order to create a conducive socio-political environment for operators to carry out their businesses while delivering dividends to stakeholders, including the government. Incidentally, the Lagos State which has functional institutions, especially Ministry of Energy and Mineral Resources and Lagos State Environmental Protection Agency seems ready to compliment the efforts of federal institutions established to perform these and related functions. Instructively, for the past 52 years, the Niger Delta was the only region accounting for almost all the nation’s oil and gas output. The region which included states such as Akwa Ibom, Cross River, Rivers, Bayelsa, Delta, Edo and Ondo attracted the curiosity of many International Oil Companies, IOCs, culminating in the beginning of oil and gas exploration much earlier than any other part of the nation. The discovery of commercial oil and gas, especially in the 1950s and 1960s encouraged the IOCs, including Shell D’Arcy, forerunners of the present Shell Petroleum Development Company, SPDC, Mobil, and Texaco increase their campaigns in the region. Secondly, signifi cant investments were made over the years, especially after the formation of the Nigerian National Oil Corporation, NNOC, the forerunner of the present Nigerian National Petroleum Corporation; NNPC was formed to represent the Federal Government interest in the industry. Through the Joint Ventures and other arrangements, the government has over the years made signifi cant funds available for investment. As the gains of oil trickle in, the government did not limit itself to the Niger Delta, as concerted efforts were made to explore and produce crude oil and natural gas in other basins, especially Benue Trough, involving States such as Bauchi, Benue, Gombe, Kogi, Nasarawa, Plateau and Taraba States, among others. A source in the Ministry of Petroleum Resources who preferred not to be named stated that the government was encouraged by preliminary indications which showed that oil and gas discoveries could be made, particularly as the area extends to other producing nations in the Gulf of Guinea. The Head of the research team at the Benue Trough, Professor Agbaji Ogezi who made a presentation in Jos recently disclosed that the research showed similarities to some parts of the Niger Delta where oil and gas have been found in commercial quantities. Ogezi stated that: “A comprehensive review of the literature, results of preliminary on-going integrated remote sensing, geological and exploration studies and comparison with other related basins within the WCARS (West and Central Africa Rift System) suggest that the Benue Trough may be a favourably area for oil and gas, as well as for stratabound and structurally-controlled mineral deposits. With respect to petroleum, there are good prospects, especially in the formations which are thicker and structurally and stratigraphically- related to the Niger Delta as well as to the Chad/ Borno, Niger, Sudan and Cameroun basins within the same trend.” Despite this and other predictions as well as huge investments, commercial oil was not made. But the government and some oil fi rms have not given up. For instance, President Goodluck Jonathan while presenting the 2013 budget proposal to the National Assembly stated that: “On Frontier Exploration, the Government’s drive to build up the nation’s oil reserves through exploration of new frontiers for oil and gas production is beginning to yield results with news of the discovery of crude oil in some inland sedimentary basins in the country. These include the Chad Basin, Benue Trough, Yola Basin and Anambra Basin amongst others. We are determined to further develop on these fi ndings and expand the scope of such explorations. To support this, we have raised the provision for frontier exploration services from N12 billion in 2012 to N16 billion in 2013.”
Posted on: Mon, 08 Jul 2013 07:30:02 +0000
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