LEKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces that the Otakikpo Joint Venture, has executed definitive agreements for the next phase of the Otakikpo marginal field development aimed at increase production to approximately 10,000 bopd from the current gross rates of 5,755 barrels per day.
Further to the execution of a non-binding Memorandum of Understanding (MoU) , 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.
The upstream drilling programme consists of a phased drilling of up to seven new wells in Otakikpo. The drilling of the first two wells is expected to increase gross production to approximately 10,000 bopd from the current gross rates of 5,755 bopd.
“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,” Lekan Akinyanmi, CEO of LEKOIL noted.
“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’s capex estimates are a reduction on previous estimates of $170 million ($68 million net to LEKOIL Oil and Gas Investments Limited) 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 cashflow from existing production,” Mr Akinyanmi said.
The Otakikpo JV entered into an infrastructure sharing and utilization agreement in respect of the production from the Otakikpo marginal field with Integrated Hydrocarbon Infrastructure Limited, a special purpose company incorporated and owned by Green Energy International Limited to build, own, operate and maintain the shared infrastructure facilities (the “ISUA”).
Pursuant to the ISUA, Integrated Hydrocarbon Infrastructure Limited is expected to assume the role of facility operator (from its parent, Green Energy International Limited) and will 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.