In a sharp contrast to 10 years ago when Nigerian private sector companies were responsible for just 6 percent of daily production despite owning over 30 percent of licences, indigenous private sector players have started to develop the technical expertise and financial resources to manage their own assets, something that has had a positive impact on Nigeria’s cumulative production numbers and the oil and gas sector’s contribution to the national economy.
One such indigenous player is Oriental Energy Resources (Oriental), a privately-held oil and gas exploration and production company founded in 1990, which has built a proudly indigenous oil company interested and proactively invested in developing technical and education capacity across Nigeria, especially in the Niger Delta, and now holds 60 percent participatory interest as owner and operator for the Okwok, Ebok and OML115 assets. The company had previously been in a joint venture with the now defunct Afren PLC (Afren), a firm that went into administration on July 30, 2015, 11 years after it was founded and 10 years after it was initially listed on AIM – London’s junior stock market.
Following the dissolution of its former JV partner, Oriental has worked swiftly to preserve the integrity of the assets jointly under development and production, investing capital in ensuring operational continuity and assuming direct responsibility for 100 ex-Afren employees, thereby limiting the impact on safe operations and ensuring that production and development work continued as scheduled and to the highest operational and safety standards. It is this quick and proactive action that ensured that operations and production were not negatively affected, leading to the stabilisation of production at the Ebok field, one of the assets in which Oriental holds a 60 percent equity stake.
The Ebok Field (Ebok) was an undeveloped oil field located in OML 67, 50km offshore in 135ft of water in Nigeria’s prolific south-eastern producing area and was awarded to Oriental Energy Resources in May 2007 by the ExxonMobil/Nigerian National Petroleum Corporation (NNPC) Joint Venture. Oriental has significantly increased the production of the Ebok Field, year on year. The field, which is now at approximately 23,000bpd, accounts for about one-third of the Nigerian Marginal Field crude oil production.
With crude oil quality characterized as medium-heavy and unique amongst the Nigerian crude grades, Oriental has set the pace for heavy oil development in Nigeria. Globally, heavy oil presents opportunities that could be commercially viable but are often rejected due to the inherent production challenges, especially in offshore environments. With over 20 Electrical Submersible Pump (ESP) installations till date, OERL has been able to forge through heavy oil-related challenges of flow assurance, oil-water separation, heat and power requirements to position itself as the largest ESP operator offshore Nigeria and fifth offshore Africa.
Oriental’s successful management and operation of the Ebok Field demonstrates clear capability to assume both financial and technical leadership for the ongoing and safe production operations at Ebok, a testament to the increasing strength and growth of Nigerian indigenous oil and gas players.
We are encouraged by the growth in indigenous participation in the oil industry and celebrate success stories like Oriental Energy Resources. Indigenous companies have a vested interest in growing local technical capacity and make sustainable investments which in turn will play a role in establishing a sustainable basis for the long-term growth of the Nigerian economy.
As more and more indigenous firms become more financially and technically capable, the need for Nigeria’s production profile to create shared value in a consistent and sustainable way and to reflect our national interest is further emphasised. This will only be possible if indigenous players are able to operate within an enabling environment where they can thrive and contribute to the economy.
Business Day