Home Latest Insights | News NNPC-TotalEnergies JV Commits $550 Million to A New Oil and Gas Development Project

NNPC-TotalEnergies JV Commits $550 Million to A New Oil and Gas Development Project

NNPC-TotalEnergies JV Commits $550 Million to A New Oil and Gas Development Project

In a pivotal move to revitalize Nigeria’s oil and gas industry, the NNPC-TotalEnergies joint venture has announced a substantial $550 million Final Investment Decision (FID) for the Ubeta Field Development Project.

This decision is a direct response to President Bola Ahmed Tinubu’s Presidential Executive Order on Oil & Gas Reforms, which aims to enhance the investment climate and establish Nigeria as a top destination for oil and gas investments in Africa.

The Ubeta field, discovered in 1964 and located northwest of Port Harcourt in the eastern Niger Delta, is poised to play a crucial role in Nigeria’s energy landscape. Once operational, the field is expected to produce around 350 million standard cubic feet per day (MMScf/day) of gas and 10,000 barrels per day (BBLS/day) of associated liquids.

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This development will significantly bolster gas supplies to Nigeria Liquefied Natural Gas (NLNG) Limited, addressing a vital need as LNG production has recently declined, contributing to rising cooking gas prices in the country.

The announcement came during a high-profile signing ceremony at the NNPC Towers. Mallam Mele Kyari, Group Chief Executive Officer of NNPC Limited, emphasized the importance of the government’s support in reaching this milestone. He credited President Tinubu’s administration with creating a favorable operational environment through targeted fiscal policies.

“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 stated.

Mike Sangster, Senior Vice President for Africa, Exploration & Production at TotalEnergies, highlighted the strategic significance of the Ubeta project.

“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,” Sangster said.

The project is said to align with the government’s broader vision to enhance investor confidence in the oil and gas sector. Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri, underscored this point, noting that the President’s policies have rekindled investor interest.

Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo added that the project exemplifies the effectiveness of government policies in creating a conducive environment for gas sector investments.

Located in Oil Mining Lease (OML) 58, the Ubeta gas condensate field will feature a new 6-well cluster connected to existing facilities at Obite via an 11km buried pipeline. Production is expected to commence in 2027, reaching a peak output of 300 million cubic feet per day, equivalent to about 70,000 barrels of oil equivalent per day, including condensates. Gas from Ubeta will be directed to the NLNG plant on Bonny Island, which is currently expanding its capacity from 22 to 30 million tonnes per annum (Mtpa).

The project is designed to be both low-cost and low-emission, utilizing existing gas processing infrastructure. Its carbon footprint will be further minimized through a 5 MW solar plant under construction at the Obite site and the electrification of the drilling rig. TotalEnergies is also committed to maximizing local content, ensuring over 90% of manhours are worked locally.

The development of the Ubeta field is expected to have a long-term positive impact on the domestic gas supply in Nigeria. With LNG production having seen recent declines, causing cooking gas prices to soar, the Ubeta project promises to stabilize and potentially reduce gas prices, making it more affordable for everyday Nigerians.

Additionally, the Ubeta FID is said to be a testament to the relentless efforts by NNPC Limited, supported by comprehensive executive backing, to resolve challenges that have historically deterred foreign investment in Nigeria’s oil and gas sector. The project is expected to stimulate economic activities, create numerous job opportunities, and provide significant value for stakeholders across the board.

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