OML 42 Asset Overview

OML 42 Asset Overview

Shell’s divestment assets (OMLs 4, 38 & 41, OML 26, OML 30, OML 34, OML 40 and OML 42) are all located in the Niger Delta which is Nigeria’s most prolific and important hydrocarbon basin. OML 42 is located onshore West Delta with an area of 814 km2. OML 42 has 7 fields which have produced hydrocarbons and 5 undeveloped discoveries.

OML 42 commenced initial production in 1969 at the Egwa field with a peak gross production rate of about 250,000 boepd in 1974. Over the last 20 years normalised production has been 100-150,000 boepd. Production is primarily oil. The block however was shut in 2006 due to security issues in the area. In February 2011, Batan and Ajuju fields were rehabilitated and re-opened by Shell (SPDC) before the divestment of 45% of its interest to Neconde, while the 55% interest belonging to the Nigerian National Petroleum Corporation, NNPC, was assigned to NPDC, its E&P subsidiary . Effective December 2011, Neconde acquired 45% of the block, and in February 2012, the NPDC was named the Operator by the Federal Government of Nigeria.

Batan field reached a production peak of 13,000 bopd in 2012 after it was reopened.  Current production is circa 11,000 bopd from 12 strings.  In early 2012, Neconde and NPDC agreed a work program to rehabilitate the remaining shut-in fields, namely, Odidi, Jones Creek and Egwa and reopen about 80 existing wells to production.  In October 2013, rehabilitation works started in Odidi field culminating in the re-opening of the field in October 2014.  Odidi is currently producing at 21,000 bopd from 19 strings.  Similarly, rehabilitation works started in the Jones Creek field in July 2014 and it is expected to complete in August 2015.  Jones Creek is estimated to produce 30,000 bopd when reopened and fully ramped up in 2015.  Egwa is planned for rehabilitation from late 2015 towards a mid-2016 reopening at 20,000 bopd.  Beyond the re-opening of existing wells, additional drilling activities and workovers are planned in the 2016-2018 period to further increase production to an estimated peak of 135,000 bopd in late 2018.  

Beyond primary development, there are further development opportunities in water injection and enhanced oil recovery to further increase production and reserves.  In addition, there are 33 exploration opportunities in the fields that were previously identified by Shell. In May 2015, Neconde became the operator of the asset, for an initial period of ten years,  following the approval of the Federal Government of Nigeria.

Besides oil, OML-42 contains up to 6 TCF of gas resources that is planned to be developed in the next 4-5 years towards delivering up to 500 mmscfd to the local gas market. The gas development will also monetise a significant amount of condensate resources.  Currently the Neconde/NPDC joint venture is currently rehabilitating the Odidi gas central processing facility to bring the first tranche of 40 mmscfd associated gas to the local market by end of 2015.