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Weekly UpdatesMobil Producing Nigeria Unlimited (MPN) has an output of 600,000 b/d of crude oil and 100,000 b/d of condensate. Its oil and condensate production capacity is 750,000 b/d. MPN has been investing $11bn in Nigeria's petroleum sector through 2011, with the hope of raising production to 1.2m b/d. This will include MPN's first JV stream in which NNPC hold 60%, with 40% held by Mobil, and streams from PSCs involving deep-water fields in partnership with other IOCs. In MPN's second JV, NNPC only holds 49%, and this produces gas liquids.
MPN's JV with NNPC operates more than 25 offshore fields in the Gulf of Guinea, including finds being developed. They are close to the waters of Equatorial Guinea, Cameroon and the islands of Sao Tome & Principe, with some fields found by Mobil and Elf having been the subject of disputes between Nigeria and these countries. MPN's conventional crude oils are blended into an export grade, Qua Iboe, 37? API with 0.1% S. The crude oils are produced mainly from fields of the Qua Iboe group.
MPN's JV oil operations comprise the Qua Iboe group and other fields, under a set of licences. Oso is under another JV with NNPC. Qua Iboe and Oso are part of the eastern Akwa Ibom state. Exports are done from a Qua Iboe terminal.
Acergy in May 2009 got a contract worth about $190m from MPN for the revamp of three wellhead platforms in water depths of up to 35 metres. The contract includes an option to be exercised by MPN for up to five further platforms. Engineering and offshore work began immediately, using the Acergy Orion.
Mobil came to Nigeria after independence in the early 1960s and took up several E&P licences offshore. Its main oil finds in 1966 were six fields: Ekpe, Asabo, Eku, Idoho, Inim and Utue. They were put into production two to three years later. In 1967 it found the Adua oilfield, which it developed, and the Oso gas/condensate field which it decided not to develop at the time because the incentives were not adequate. Oil discoveries were made in the subsequent decades and MPN developed most of them to replace older fields which were depleting.
The Qua Iboe group includes large structures, such as Edop which in the early 1980s was the biggest oil find in Nigeria. It has the biggest platform in the country. Edop has been re-developed and produces about 280,000 b/d, up from 50,000 b/d in mid-1995, with large reserves to feed this capacity. Ubit is the second largest, producing 100,000 b/d from 85,000 b/d in mid-1995. Isobo, nearby, came on stream in July 1995 at 30,000 b/d. Gas compression and reinjection facilities have been installed at Ekpe and Edop as part of an EOR programme.
Other fields found by MPN and developed include Inanga, Ufan, and Yoho. Yoho came on stream in December 2002 and its development cost $1.2 bn including a floating storage and offloading (FSO) vessel. Yoho produces over 100,000 b/d; its capacity in late 2005 reached 150,000 b/d. Yoho's recoverable oil was in late 2002 estimated at 400m barrels. Associated gas is being re-injected to maintain field pressure.
It was not until 1988 that MPN decided to develop Oso, on the basis of a 1986 MoU guaranteeing a minimum profit margin of $2/b, with condensates excluded from OPEC quotas. The World Bank and its IFC funded the Oso JV. About 89 km south-west of the Qua Iboe terminal and 67 km from the Bonny island gas processing system, Oso is a giant gas field with a sustainable condensate production capacity of 100,000 b/d.
Oso has had enough reserves to recover at least 500m barrels of condensate in a 20-year production period and to still have a large gas. From the remaining gas, MPN can recover liquids, including LPG. As the gas is forced to the surface, it cools and takes the form of condensate, having the qualities of an almost sulphur-free oil. Gas associated with condensates is then re-injected into Oso for an important NGL recovery system, Phase-II, which came on stream in November 1998.
Phase-I of Oso's development cost $900m. When the go-ahead was given, it was agreed its commercial production was to be for 20 years. It was estimated this would yield $12 bn to NNPC and MPN and that the partners should recoup their investment within two years of production (see background in Vol. 57, Gas Market Trends No. 6).
In 2006 MPN began a $1.3 bn East Area Additional Oil Recovery (AOR) project 28 km offshore. This involves reinjection of gas to mitigate normal field decline from East Area reservoirs and significantly increase ultimate oil recovery from OML67 and OML70. MPN expected the project will yield 530m gross barrels of additional oil reserves from the blocks and provide a peak volume of 120,000 b/d. The development was to further reduce gas flaring.
Major components of the AOR project include a gas compression complex plus seven associated platforms, including crew living quarters, and more than 161 km of new pipeline for gas gathering and distribution. The AOR project in 2006 was the third major facility start-up for ExxonMobil affiliates in Nigeria.
MPN operates Yoho, with output of 150,000 b/d. Online since February 2006, Yoho then contained about 440m barrels of recoverable oil. Yoho is being re-injected with 110 MCF/d of gas to maintain pressure. The $1.3 bn field is in the shallow waters of the eastern delta. Its facilities consist of a central production processing platform, 33 wells, a living quarters platform, and a floating, storage and offloading (FSO) vessel.
MPN has 51% in Oso's Phase-II for NGLs, with NNPC holding 49%. This has resulted from NNPC's failure to fund its share of costs and financiers' perception of high risk in Nigeria. MPN in 1996 raised $300m in US commercial bonds secured by future gas sales commitments. MPN has proposed that NNPC also reduce its stake in favour of the US major in its main JV, because of NNPC's cash-flow problems. But Abuja has turned it down.
Phase-II came on stream in November 1998 and cost $860m. Its 50,000 b/d of NGL output was reached in March 1999. NGL is stripped out of 600 MCF/d of gas coming in equal volumes from Oso and Usari field nearby. Dry gas is re-injected. The liquids, pumped to a fractionator on Bonny island via a 67 km pipeline, are separated into 27,000 b/d of propane, 14,000 b/d of butane and 9,000 b/d of pentane-plus. In Phase-II, 350m barrels of NGLs were to be extracted over 25 years without affecting Oso's condensate stream. The NGLs are mostly exported, with some sold locally.
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