Shell to construct N1.9tr storage facility in Nigeria

Royal Dutch Oil-giant, Shell Petroleum Development Company, has revealed its intention to construct a Floating Production Storage and Offloading (FPSO) facility in Nigeria.

Estimated at N1.9 trillion, the facility is to be situated in a water depth of over 1,000 metres, at Bonga South-West in the Niger Delta.

At an Offshore Technology Conference in Houston, Texas, Shell’s General Manager, Deepwater, Mr. Jerry Jackson, disclosed that bid for the construction of the facility has been opened and Final Investments Decision were expected before December 2014.

Bonga is located in oil prospecting licence 212, and Shell Nigeria Exploration and Production Company (SNEPCO) operates the field on behalf of the NNPC, under a production sharing contract, in partnership with Esso (20 per cent), Agip (12.5 per cent) and Elf (12.5 per cent).

Jackson said that the project, spanning OMLs 118, 132 and 140, is already underway with significant Nigerian content levels.

“The tender process for the single-point moored facility, which would be the world’s largest FPSO unit, is still currently out to tender with bidders, including Samsung and Hyundai,” he said.

Mr. Chike Onyejekwe, the managing director of SNEPCO, said Shell recorded tremendous success in its Bonga Deep Water oil field, noting that it had exported about 450 million barrels of crude, as at December 2012.

“The cost of the Bonga field development, including the cost of the Floating Production Storage Offshore vessel built in 2004, came to $3.6bn (N569bn),” said Onyejekwe.

“Despite the fact that the drilling of the 19 oil wells will amount to $12.35bn (N1.96tn), the Bonga extension project may gulp around $33bn (N5.2tn).”

Mr. Stefan Vas de Wael, the commercial manager of SNEPCO, disclosed that the development of deep water assets in Nigeria’s oil and gas sector could contribute $3bn (N474bn) to the country’s economy, and as well generate about 200,000 jobs annually.

He said the undeveloped deep-water assets could add over 600,000 barrels per day of oil, which would amount to doubling the current deep water liquids from deep water fields in the country.

The manager said over $5 billion (N790bn) would be required annually to develop and produce five million barrels of oil per day, and this would bring about a growth in the GDP of the country.