NNPC, TotalEnergies to stake $550m on Ubeta field development

Sopuruchi Onwuka  

Parties in the operations of Oil Mining Lease (OML) 58 onshore Niger Delta have agreed to deploy additional half billion dollar investment in further development of the acreage area where two oilfields are already producing tirelessly for decades.

The Nigerian National Petroleum Company (NNPC) Limited reached a Final investment Decision (FID) Thursday to develop the Ubeta gas condensate field also hosted in the oil block.

TotalEnergies is operator of OML 58 with 40 percent interest, and the NNPC Limited holds the remaining 60 percent.

OML 58 contains two fields currently in production: Obagi oil field and Ibewa gas-condensate field. Gas production is processed in the Obite treatment center and supplied to both the Nigerian domestic gas market and to the Nigeria LNG (NLNG) liquefaction plant on Bonny Island which is undergoing capacity expansion to 30 million tonnes per annum (mtpa) from current 22 million mtpa. otalEnergies holds 15 percent interest in the NLNG.

Discovered in 1964, the Ubeta field which lies in onshore license OML 58 about 80 kilometers northwest of Port Harcourt in Rivers state would be one of the oldest fields in the indefatigable OML 58 which forms the onshore base for the NNPC/TotalEnergies oil and gas exploration and production joint venture.

 As the youngest field to be be developed in the block, Ubeta will come online with a new 6-well cluster connected to existing Obite infrastructure through an 11-km buried pipeline.

At commissioning, the field is expected to start pumping some 300 million standard cubic feet per day (MMcfd) of gas or about 70,000 barrels of oil equivalent per (boed) including 10,000 barrels of (bbl/d) of associated liquids by 2027. Output from Ubeta would contribute towards securing gas supply to the NLNG Limited.

Total stated that the development plan would involve cost and energy efficiency with a combination of green energy in meeting onsite electric power needs.

Total has boasted severally of leading use of green power sources in its operations in Nigeria; and it would now tap into a 5 Mw solar plant currently under construction at the Obite site and the electrification of the drilling rig in order to reduce the carbon intensity of the new development.

With the optimization of the already existing gas processing infrastructure in the proximate fields and use of solar power in the field, Ubeta development promises to be a low-emission and low-cost.

Chief Corporate Communications Officer of the NNPC Limited, Olufemi Soneye, stated that the new development would be a major step towards boosting Nigeria’s oil and gas production.

At the well-attended signing ceremony held at the NNPC Towers, the Group Chief Executive Officer, NNPC Limited, Mallam Mele Kyari, highlighted the continuous support of President Bola Tinubu’s administration in facilitating a conducive operational environment as a major enabler in achieving the FID.

The Oracle Today reports that the Ubeta development would be one of the rare investments of its size in the Nigerian petroleum industry in the past 20 year; only after the TotalEnergies’ Egina, Ikike and Porewei developments, the NLNG Train-7 and the Ajaokuta-Kaduna-Kano (AKK) pipeline projects.

 “We appreciate Mr. President for supporting us with the appropriate fiscal environment. The Presidential Executive Order is instrumental to us getting to this significant milestone and we are now seeing the impact of the policy,” Kyari added.

In his remarks, the Senior Vice President Africa, Exploration & Production, TotalEnergies, Mike Sangster, said “Ubeta is the latest in a series of projects developed by TotalEnergies in Nigeria, most recently Ikike and Akpo West. I am pleased that we can launch this new gas project which has been made possible by the Government’s recent incentives for non-associated gas developments.”

Mr Sangster added that “Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects, and will contribute to the Nigerian economy through higher NLNG exports”.

Earlier in his remarks, the Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri said President Bola Ahmed Tinubu has significantly rekindled investor confidence in the Oil and Gas Industry, assuring Nigerians that more investments are on the way.

Also speaking, the Minister of State for Petroleum Resources (Gas) , Rt. Hon. Ekperikpe Ekpo said the project is a testament to the effectiveness of Government’s policies aimed at creating a conducive environment for investment in the gas sector.

Located in OML58, the Ubeta gas condensate field will be developed with a new 6-well cluster connected to the existing Obite facilities through an 11km buried pipeline. Production start-up is expected in 2027, with a plateau of 300 million cubic feet per day (about 70,000barrels of oil equivalent per day including condensates). Gas from Ubeta will be supplied to NLNG, a liquefaction plant located in Bonny Island with an on-going capacity expansion from 22 to 30 Mtpa, in which NNPC Limited holds a 49 percent interest.

Ubeta is a low-emission and low-cost development, leveraging on OML58 existing gas processing facilities. The carbon intensity of the project will be further reduced through a 5 MW solar plant currently under construction at the Obite site and the electrification of the drilling rig. TotalEnergies is working closely with NNPC Limited to enhance local content, with more than 90 percent of manhours which will be worked locally.

The Ubeta FID justifies the effort invested by NNPC Limited, with unyielding Executive support, into tackling the underlying reasons that have plagued the attractiveness of the Nigerian oil and gas industry to foreign investors in recent years.

The Ubeta project has a robust Nigerian Content plan and is poised to stimulate economic activities, create job opportunities, and create significant value for stakeholders.