Oando oil production hits 50,000 bpd

… As it completes acquisition of ConocoPhillips

Oando oil production

Sebastine OBASI
Federal Government’s quest for strong indigenous participation in the nation’s oil and gas sector has received a boost as Oando Energy Resources, OER, production capacity has reached 50,000 barrels per day, bpd.

The development follows Oando’s completion of the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips at the sum of $1.5 billion.

The Chief Executive Officer of OER, Mr. Pade Durotoye, who announced the new achievement, said the acquisition shows the company’s new growth strategy.

“The acquisition speaks of our inorganic growth strategy of acquiring choice assets with good production rates, a large 2P reserve base and 2C resource potential, for future development.

“Oando Energy Resources as a consolidated entity now has working interests and investments in 16 licenses and produces circa ~ 45,000 – 50,000 boepd, with 2P reserves of 230mmboe and 2C resources of 536.8mmboe. Our team is well positioned to develop these assets and unlock value for our shareholders,” he said.

According to him, the transaction was made possible due to the support from the shareholders, the Federal Government of Nigeria, NNPC and the international and local financial institutions that assisted with the necessary debt funding.

“We are committed to playing our role as a leader in this industry and look forward to transactions of this nature that promote Nigerian grown companies to prominent position,” he said.

The acquisition means that OER will now take over the onshore business of Phillips Oil Company Limited (POCNL), which holds a 20 percent non-operating interest on oil mining leases, OMLs, 60, 61, 62 and 63, as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited, (NAOC) joint venture. The other stakeholders are Nigerian National Petroleum Corporation with a 50 percent interest and NAOC (20 percent and operator)

In the offshore, OER has now taken over Conoco Exploration and Production Nigeria Limited (CEPNL), which holds a 95 percent operating interest in OML 131 located 70 kilometre offshore in water depths of 500 metres to 1,200 metres.

It has also acquired Phillips Deepwater Exploration Nigeria Limited (PDENL), which holds a 20 percent non-operating interest in oil prospecting license, OPL, 214, located 110 km offshore in water depths of 800m to 1,800m. The other stakeholders are ExxonMobil (20 percent and operator), Chevron (20 percent), Svenska (20 percent), NNPC (15 percent) and Sasol (5 percent).

In June 2014, the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, approved the conversion of OPL 214 to oil mining lease, OML 145 for an initial period of 20 years.

The total reserves and resources associated with the transaction are proved plus probable reserves of 211.6 million barrels of oil equivalent, best estimate contingent resources of 498.6 MBOE and unrisked best prospective resources of 656.9 MBOE.

With the transaction, Oando has acquired the 20 percent working interest of NAOC JV, which includes 40 discovered oil and gas fields, of which 24 are currently producing, 40 identified prospects and leads, 12 production stations, 1,490 kilometre of pipelines, three gas processing plants, Brass River Oil Terminal, Kwale-Okpai 480 MW combined cycle gas-fired power plant (Kwale-Okpai IPP) and associated infrastructure.

“This transaction represents a transformational leap forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high quality growth in reserves and production.

“Our management team is familiar with these assets and possess the managerial experience and technical expertise necessary to unlock their value for our shareholders,” said Durotoye.

- See more at: http://www.vanguardngr.com/2014/08/oando-oil-production-hits-50000-bpd/#sthash.9krX6iBX.dpuf