The cost of producing a barrel of crude oil from the Egina oil field by the Nigerian National Petroleum Corporation (NNPC) and Total Upstream Nigeria Limited (TUPNI) has been put at $20 per barrel.
The Group Operating Officer (COO) Upstream of the NNPC, Mr. Rabiu Bello, disclosed this recently in his presentation at the public hearing organised by the Senate Ad-hoc committee investigating the local content elements of the 200,000 barrels capacity Egina Floating Production Storage and Offloading (FPSO) platform, in Abuja.
Bello, stated that estimates made by the parties indicated that at most, it will cost operators of the field $20 to produce a barrel of oil from it, noting that this was economical and profitable.
He explained that so far, only about $10 billion had been expended on the project, with no variations requested by TUPNI.
Similarly, the Managing Director of TUPNI, Mr. Nicolas Terraz, stated in his presentation that upon its commencement of production later in 2018, the Egina project will contribute about 10 per cent of Nigeria’s total oil production.
According to Terraz, the project had obeyed all of the federal government’s Local Content dictates and employed about 3,000 local workforce in the last five years of its implementation, in addition to fabricating 60,000 tons of its equipment in-country.
“The Egina project, located in OML 130, is the largest oil and gas development currently ongoing in Nigeria. The field is being developed by TUPNI in partnership with NNPC, CNOOC, SAPETRO and PETROBRAS. Operated by TUPNI, the project was launched in 2013 and is expected to start producing in the fourth quarter of 2018.
“It will add 200,000 barrels per day to Nigeria’s oil production, or approximately 10 per cent of the country’s total oil production,” said Terraz.
He further stated: “Being the first major deep-water development project launched after the enactment of the Nigeria Oil and Gas Industry Content Development (NOGICD) Act, the Egina project has the highest level of local content of any such project so far.
“As operator of the Egina project, TUPNI fully identifies with the government’s aspirations for Nigerian Content and has been working closely with the Nigerian Content Development Monitoring Board (NCDMB) and NNPC to maximise Nigerian Content on the project.”
He stated that TUPNI in response to the committee’s letter, provided a detailed submission to it with regards to its request.
Listing the local content milestones recorded by the project, Terraz, said: “Employment: the project represents a workload of 24 million man-hours worked in Nigeria, or 77 per cent of total project workload, equivalent to a workforce of 3,000 persons on average during five years. Fabrication: 60,000 tons of equipment is being fabricated in Nigeria for the project. Infrastructure: several large-scale industrial facilities were developed in Nigeria for the project, including Africa’s first FPSO integration quay, and several existing fabrication yards were upgraded for the project. Capacity development: over 560,000 man-hours of human capacity development training is being performed across Egina contracts.”