Shell and ChevronTexaco hand over oil fields to NPDC

Jan 11, 2005 01:00 AM

Shell Petroleum Development Company (SPDC) and ChevronTexaco have handed over the operation of some of the Joint Venture (JV) oil fields to the Nigerian Petroleum Development Company (NPDC) following an understanding reached in that regard between the two oil companies and the Nigerian National Petroleum Corporation (NNPC) last year.
The oil fields, according to NPDC, include ChevronTexaco's Aroh, Yorla and Oghareki oil fields which are said to have an estimated total oil reserve of over 100 mm barrels as well as Shell's oil fields at Egbema East and West, Utapate, Oki and Ekweife, all in Imo State, also estimated to have a total reserve of over 500 mm barrels.

The decision to hand over the operatorship of these oil fields to NPDC, was said to be part of efforts of the Federal Government to boost indigenous capacity development in the oil and gas industry. A recent report by NPDC explained that Chevron has already transferred the fields to the nation's exploration and production company while arrangements have been concluded for the transfer of Shell's fields as well.
To ensure that maximum value is derived from this arrangement, NNPC has created a new division in NPDC to oversee activities in these fields that were handed over by Shell and Chevron. Already, Dr Olufunmilayo Coker who was appointed the Executive Director of the New JV Division, has visited the facilities and had talks with the managements of Shell and Chevron on how best to optimise value from the fields cost-efficiently.

NNPC has also begun to deploy staff from the various arms of the corporation to the new JV division. In addition, besides the earlier Committee on Transfer of Operatorship and Capacity Building, set up by NNPC and chaired by Dr Edmund Ayoola, the Group Executive Director, Exploration and Production of NNPC, another sub-committee was set up as legal force to the transfer arrangement.
The legal sub-committee is being overseen by the National Petroleum Investment Management Services (NAPIMS) and has representatives of NPDC, Shell and Chevron as members. The sub-committee was saddled with responsibility to draft and develop a legal framework which will guide the transfer and operatorship of the fields from Shell and Chevron to NPDC, taking into consideration provisions of the nation's oil and gas joint operating agreement (JOA). The committee it was gathered, has concluded the assignment.

Furthermore, in preparation for the task ahead, NPDC has started putting in place measures that will ensure improved skill and performance of its staff as well as the acquisition of facilities that will enhance technical work. On completion of the handover of the fields, NPDC will take over the day-to-day technical management of the fields and other relevant documents concerning the fields. However, some staff of Chevron will be working with them to build up their (NPDC) skills in field development plan, among others.
Meanwhile, some of the fields are already producing. The Egbema East has eight wells out of whichthree are producing at an average of 5,000 bpd. The Egbema West has 19 wells while six are producing at an average of 5,900 bpd. The development plan of Utapate is still ongoing while Aroh field has some drilled but abandoned wells. The Yorla oil field situated in Ogoniland is said to have been shut-in since the past 10 years as a result of community crises.

It would be recalled that the Federal Government, as part of efforts to position NNPC as an efficient national oil company just as its counterpart in Brazil, Norway and Malaysia, decided that it took over operatorship of some JV oil fields.
The decision taken early last year, it was gathered, has started yielding fruits as NPDC has begun to improve the skills and performances of its personnel. The oil reserve level is said to have also begun to increase as well as production which currently is above 63,000 bpd.

Source: Vanguard
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