OML-11 is the only producing asset in Abia State from Imo River, Isimiri and Oza fields. The rest of fields classified as partially appraised are all capped at their wellheads with no further development activities since their discoveries.
Given its long production history, technically, OML-11 is now a matured oil block, with most of the wells now shut in for various reasons ranging from high bottom sediments and water, HBSW, reservoir pressure depletion, or other downhole mechanical problems, plus the fact that the block has suffered series of pipeline and facilities vandalization. Also, since the operatorship of the block was transferred from SPDC to NEPL (ex-NPDC) in 2019, to avert the perennial communal conflicts and incessant crude theft, and pipeline vandalization, no significant production optimization work has been done to resuscitate these wells.
Though a matured asset, OML-11 still has reasonable recoverable reserves that can be brought on production, and if the State would want to push for more production from this asset, it can through its private strategic investment partners engage NEPL to negotiate a Finance/Technical Service Agreement, (FTSA) for OML-11, to provide the required field development funding and technical team to resuscitate the assets.
Ofcourse the assets to consider will be Imo River, and Isimiri fields, since Obigbo North wells 1, 3 and 47 are being operated by Heirs Energies under its OML-17. It can also engage Millenium to look at how to optimize the production of Oza fields with its strategic investment partners.
Well, without doubt, such rejuvenation programmes will require heavy capital investment, and unless production from Imo River, Isimiri, and Oza fields are improved, Abia State production quota, and hence its derivation revenue from OML-11 will continue to decline. The alternative, and which may be of a medium- and long-term benefit will be to aggressively pursue to development of those assets, such as Ohuru, Uzuaku, Ngboko, Obeaja and Obuzo, that are located 100% within Abia State
In terms of wells distribution, only 3 wells – 1, 3, and 47 in Obigbo North fall within OML-11, while more than 95% of the wells fall within Rivers State; about 44% of Imo River wells, 25% of Isimiri, and 100% of Oza wells are located within Abia State.
Oil and Gas Production data.
According to NUPRC, the country produced an average of 1,322,208 bopd in February 2024, which was lower than the average production of 1,426,574 bopd recorded in January 2024. As of January 2020, Nigerian average crude oil production stood at 1,779,007 bopd, but later dropped sharply to 1,457,385 bopd in May 2020, and has remained fairly at this level since then. (Oil Production Status Report – Nigerian Upstream Petroleum Regulatory Commission (nuprc.gov.ng): https://www.nuprc.gov.ng/oil-production-status-report/)
NUPRC further reported that production was extracted from 246 producing fields, 2,777 producing strings, 188 production stations/platforms, four gas terminals, five land terminals, 11 FSOs (Floating Storage and Offloading Units), 18 FPSOs (Floating Production Storage and Offloading). (https://punchng.com/oil-producing-fields-rise-to-246-says-fg/). Based on NUPRC earlier report, Nigeria crude oil production (https://www.nuprc.gov.ng/oil-production-status-report/), was extracted from a total of 323 developed fields located in both onshore, swamp and offshore terrains, connected to 265 production processing (flow) stations that stabilize the oil and gas before they are transported for export via 31 export terminals. The onshore processing infrastructures are linked to 8 crude oil/condensates and NGLs export terminals through pipelines that span 5,284 km. The Federal Government through its agencies, NUPRC, and NNPC-L in collaboration with the operating companies are pushing to restore full production of the 323 developed fields to increase the country’s production potential and to also meet its OPEC quota and Budget targets.
OPEC Quota for Nigeria for 2024 is 1.5 million barrels of oil per day, while 2024 budget production benchmark is 1.78 million barrels per day. NUPRC, the upstream oil regulator projects an annual oil and condensates production target of 2.6 million barrels per day (bpd) by 2026 by reviving dormant wells and pushing for more onshore production as it aggressively tackles security and crude theft in the region.
The producing fields in Abia State are Imo River, Isimiri, North and Oza, all in OML-11 as shown in Appendix 4, and Table 6. This concession has been on production since 1960 and has thus recovered significant portion of its total recoverable reserves, with a projection of attaining its economic limit by 2046. The field attained its peak production in 1976, and currently accounts for approximately 2% of the national daily production output, as most of the reservoirs are now at their latter phase with increasing water production (High Bottom Sediments & Water, HBSW).
Besides being a matured asset, OML-11 was also bedeviled with environmental and host communities’ challenges with high rate of crude oil theft, which has forced SPDC to frequently shut down the asset. And to guarantee steady oil and gas production of the asset, the Federal Government under President Buhari eventually assigned the operatorship of OML11 to NNPC E&P Limited effective May 1, 2019, while the License remains with SPDC and its Joint Venture Partners. Table 6 shows the estimated production rates of the wells that are currently on production in Abia State, with a combined production of 7,747 bopd.
Brief on Oza Field Production
OZA field is a 20 square kilometer concession carved out of OML 11 in 2003 as a marginal field and was awarded to Millenium Oil and Gas Company Limited during the country’s maiden bidding round exercise. Available records indicate that Oza field achieved its first oil in 2017 with the support of Hardy Oil and Emerald as partners. Initial tests from two wells, Oza well-2 and 4 with indicated production of some 2,500 bopd. Records indicate that the field production was intermittent with high water production leading to shut down in October 2018. Production was resuscitated in 2022 through the intervention of a Canada-based Decklar Resources under a Risk Service Agreement (RSA) that fast-tracked the initial development on the Oza Field in Oza-1 well in 2021. The field reopened with an initial output of 900 from Oza-1 and additional production of some 400 bopd from minor repairs in Oza-4 well, making total field production to some 1300 bopd. Production has since declined to about 650 bopd only from wells 1 & 4. Available records show that Oza field produced and sold 56,000 bbls of crude to Edo Refinery and Petrochemical Company, ERPC between 2022 and 2024, and another 7,500 bbls to Du Port Modular Refinery company. The company also injected another 53,000 bbls into the Trans Niger Pipeline, TNP to the Bonny Export Terminal to be sold to Shell Western Supply and Trading Limited (“Shell”), while it trucked 8000 bbls of crude to Umugini Pipeline Infrastructure Limited (“UPIL”) and held in storage at the Forcados export terminal tank farm lifted and sold. In total, Oza has transported a cumulative crude volume of 124,500 bbls to date since resumption of production in 2022. Oza field is also in dire need of capital injection to develop reserves.
| ISIM001L PRODUCING 1275 x ISIM002L PRODUCING 552 x ISIM002S PRODUCING 725 x Total 2552 2552 OZA 1 PRODUCING 250 x OZA 4 PRODUCING 400 x Total 650 650 Total Estimated Production (Abia) 7,747 bopd |
Table 6: Estimated production rates of wells currently on production in Abia State
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