BY MICHAEL EBO
Out of the 29 marginal fields awarded by the Federal Government since 2003, Bayelsa Oil, Eurafric Limited, Network Exploration and Production Limited and nine others are yet to commence crude oil and production.
According to data obtained from Africa Oil and Gas Report for November and December 2013, their inability to commence production is due to a number of different factors, ranging from fraud allegations, funding challenges to distraction. Giving a breakdown of development in the sector, the report stated that Bayelsa Oil’s inability to commence production is connected to the fact that its new Managing Director, James Agbeyi, is conducting an audit of previous spend and services rendered with regards to this field. Accoring to the report, Agbeyi’s suspicion is that previous management of Bayelsa Oil was a front to loot the Bayelsa state treasury, a development which has inhibited Century E&P, which farmed in with 35 per cent equity interest and 80 per cent working interest, from going forward with re-entry plans. Movido and Goland Petroleum, operators of the Ekeh and Oriri fields respectively, are battling with funding challenges, as the report disclosed that Movido’s challenges is due to the fact that the company is considering an $80 million (N12.8 billion) injection of funds by an American company and is in talks with First City Monument Bank Plc, FCMB, for guarantee. The report noted that the funds is expected to be able to pay for construction of a seven-kilometer pipeline to Chevron’s Middleton facility and drilling and completion of two more wells. It noted that current equity holders in the company include Movido, with 60 per cent, DWC Supplies and an Irish firm, adding that Century Energy has had a look in, but the deal fell through. On the other hand, the report stated that Goland Petroleum and its technical partner, Nestoil ran out of money after spending over $40Millon on a new well, while the dysfunctional rig broke down several times in the course of three months. “The well did get to 12,000 feet, but the pipe got stuck at 6,000feet as it was running out of hole,” the report noted. In the case of Eurafric, operator of the Dawes Island field, the report said the company has not been able to pay attention to the field development. According to the report, of recent, the company has been distracted by another project; the need to raise funds for the purchase of the government stake in the Sapele Power Generation Plant. The report further stated that Network E&P and Oando Energy Resources, its technical and financing partner have accessed a loan facility of $100 million (N16 billion) from Diamond Bank, for the final leg of development of the Qua Iboe field. Oando got 70 per cent of the loan while Network got 30 per cent. The report further noted that the partners have drilled two wells and will construct an early production facility, and export the crude through ExxonMobil’s Qua Iboe Terminal. Continuing, the report said, “Universal is embarking on the construction of Early Production Facility. The partners expect 2,000 barrels of oil per day from five of the nine wells on the field. Crude will be exported through ExxonMobil’s Qua Iboe Terminal (QIT) Production Facility. “This project has dragged largely as a result of change in design of the entire production system. “Seven Energy, the 62 per cent owner of Universal Energy (holder of the field), had anticipated production by 4th Quarter of 2011. Sipec is the technical partner. “Green Energy, a new Nigerian E&P company awarded the Otakikpo field in 2011, is evaluating bids from companies wishing to farm in to 40 per cent of the asset, and become the Technical and financing partner in the field development. First E&P and Vertex are some of the bidders. “In the case of Frontier Oil, gas has started flowing from the Uquo field into the Ibom Power Plant. The delivery is made possible by the completion of repairs on the 120MW Frame 9, the largest turbine in the station.