Total and South Atlantic award contracts for Akpo field development

May 10, 2005 02:00 AM

French oil firm Total and indigenous company South Atlantic Petroleum, have awarded four major contracts worth $ 1.9 bn (N 252.7 bn) for the development of the Akpo deep offshore field as Nigeria inches toward meeting the 40 bn barrels of reserves target.
The Organisation of Petroleum Exporting Countries (OPEC) also said its members including Nigeria, should for now ignore the production quota system and produce to their limits, in a bid to meet global the oil demand.

Project partners in the Akpo Deep Offshore Project awarded a contract for the construction of the Floating, Production, Storage and Offloading (FPSO) vessel for oil produced from the field to the consortium comprising French firm, Technip and South Korea's Hyundai Heavy industries (HHI).
The turnkey contract was awarded at the cost of $ 1.079 bn. Technip leads the consortium and will be in charge of the overall project management as well as undertake the engineering phase while HHI will fabricate and integrate both the FPSOhull and the topsides.

The partners also awarded contract for the provision of Umbilical, flow lines and Risers and subsea well heads (major equipment used in transporting crude oil from beneath the waters to the FPSO), worth $ 800 mm. While Italian firm Saipem will handle provision of the Umbilical, flow lines and Risers, French firm Cameron bagged the subsea well head contract.
US oil services firm Schlumberger has been contracted to provide completion facilities and materials to produce the oil.

The Akpo field lies in Oil Mining Lease (OML) 130, formerly OPL 246, and is owned jointly by South Atlantic Petroleum whose chairman is former Defence Minister General Theophilus Danjuma (rtd.), Total and Petrobras of Brazil with the Nigerian National Petroleum Corporation (NNPC) as the concessionaire.
South Atlantic, which only recently won an oil block in Benin Republic, owns 60 % shares while Total is the operator of the field with 26 % equity. Petrobras has a 16 % participation.

A senior NNPC official who confirmed the contract awards told that the corporation gave the final approval for the awards of the contract after it was satisfied with the local content in the overall execution of the project.
"The NNPC endorsed the project after making sure that the contracts met the emphasis on local content," said the official. It was gathered that key engineering and fabrication of various components and structures of the FPSO topsides will be carried out in Nigeria.

The Akpo field is estimated to hold over 600 mm barrels of oil, 80 % of which is condensates (hydrocarbons that are in gaseous form while underground but turns liquids when on the surface). It is projected to be on stream by year 2008 with production rate of 70,000 bpd at inception and with peak production rising to 225,000 bpd.
Total has been pressurising the Federal Government to have output from the field treated solely as condensate, which will then mean that it will not be counted as part of Nigeria's OPEC quota. But OPEC president Sheikh Ahmed Fahed al-Sabah Quotas, said that the group's quota system had become irrelevant for now in view of the pressure on it to raise production and meet the growing global demand for crude.

Al-Sabah said the 10 member-countries bounded by OPEC's production quota system will continue producing flat-out until June.
He put OPEC output at 29.7 mm bpd, compared to the group's ceiling of 27 mm bpd, with Saudi Arabia, the group's biggest producer, running at about 10 mm bpd compared to its quota of 8.937 mm bpd.

Source: This Day
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