The Nigerian National Petroleum Company (NNPC) Limited and TotalEnergies, the French energy conglomerate, have announced a joint investment of $550 million, marking a significant milestone in Nigeria’s quest for increased domestic gas supply and economic growth.
NNPC and TotalEnergies, operator of OML 58 onshore licence in Nigeria, in Abuja yesterday, finally signed the Final Investment Decision (FID) signalling the commencement of the development of the Ubeta gas field.
The project, which is expected to yield 10,000 barrels per day (bpd) of associated liquids, aims to unlock 350 million standard cubic feet per day (MMScf/D) of gas reserves. The Ubeta gas will feed the Nigeria LNG (NLNG) liquefaction plant in Bonny, further enhancing the country’s gas supply.
The milestone is in line with President Bola Ahmed Tinubu’s Presidential Executive Order on Oil & Gas Reforms aimed largely at improving the investment climate and positioning Nigeria as the preferred investment destination for the Oil & Gas sector in Africa.
TotalEnergies is the operator of OML 58 onshore licence in Nigeria with a 40 per cent interest, together with the Nigerian National Petroleum Corporation Ltd (NNPCL, 60 per cent).
At the well-attended signing ceremony held at the NNPC Towers, in Abuja on Thursday, the group chief executive officer, NNPC Limited, Mele Kyari, while appreciating the support from stakeholders, highlighted the continuous support of President Bola Tinubu’s administration in facilitating a conducive operational environment as a major enabler in achieving this success.
“We appreciate Mr. President for supporting us with the appropriate fiscal environment. The Presidential Executive Order is instrumental to us getting to this significant milestone and we are now seeing the impact of the policy,” Kyari added.
In his remarks, the senior vice President Africa, Exploration & Production, TotalEnergies, Mike Sangster, said “Ubeta is the latest in a series of projects developed by TotalEnergies in Nigeria, most recently Ikike and Akpo West. I am pleased that we can launch this new gas project which has been made possible by the government’s recent incentives for non-associated gas developments. Ubeta fits perfectly with our strategy of developing low-cost and low-emission projects, and will contribute to the Nigerian economy through higher NLNG exports”.
Earlier in his remarks, the minister of state for Petroleum Resources (Oil), Sen. Heineken Lokpobiri said President Bola Ahmed Tinubu has significantly rekindled investor confidence in the Oil and Gas Industry, assuring Nigerians that more investments are on the way.
Also speaking, the minister of state for Petroleum Resources (Gas), Ekperikpe Ekpo said the project is a testament to the effectiveness of government’s policies aimed at creating a conducive environment for investment in the gas sector.
In her remarks, special adviser on Energy to the President, Olu Verheijen, described the FID signing as a relaunch of the country’s oil and gas sector after many years.
She noted that 76 per cent of Nigeria’s gas reserves remains undeveloped of which non-associated gas is 50 per cent.
This situation required urgency to enable the country to close the huge gap between potential and reality.
“We recognised the urgency of closing the gap between our enormous potential as a gas giant and current reality.
According to her, President Bola Tinubu has been proactive and very focused in his efforts to address the issues in the oil and gas sector.
“He engaged all operators in the sector including NNPC and TotalEnergies very early in his administration. You talked, we listened, sometimes argued but we reflected.
“We quickly responded with data driven policies in the form of presidential directives that aimed to reclaim Nigeria’s position as a top destination for returns on investment and ease of doing business.
“The presidential directives and fiscal incentives for non-associated gas in particular aims to unlock these reserves by offering production tax credits and allowances that improves the attractiveness of investing in gas projects such as Ubeta,’ she said,
The Ubeta field discovered in 1964, North-West of Port Harcourt in the eastern part of the Niger Delta will, once on stream, produce about 350MMScf/day of gas and 10,000 BBLS/day of associated liquids, tapping into the vast gas reserves and contributing towards securing gas supply to the Nigeria Liquefied Natural Gas (NLNG).
Located in OML58, the Ubeta gas condensate field will be developed with a new 6-well cluster connected to the existing Obite facilities through an 11km buried pipeline. Production start-up is expected in 2027, with a plateau of 300 million cubic feet per day (about 70,000barrels of oil equivalent per day including condensates). Gas from Ubeta will be supplied to NLNG, a liquefaction plant located in Bonny Island with an on-going capacity expansion from 22 to 30 Mtpa, in which NNPC Limited holds a 49 per cent interest.
Ubeta is a low-emission and low-cost development, leveraging on the OML 58 existing gas processing facilities.
The carbon intensity of the project will be further reduced through a 5 MW solar plant currently under construction at the Obite site and the electrification of the drilling rig. TotalEnergies is working closely with NNPC Limited to enhance local content, with more than 90 per cent of man hours which will be worked locally.
The Ubeta FID justifies the effort invested by NNPC Limited, with unyielding Executive support, into tackling the underlying reasons that have plagued the attractiveness of the Nigerian oil and gas industry to foreign investors in recent years.
The Ubeta project has a robust Nigerian Content plan and is poised to stimulate economic activities, create job opportunities, and create significant value for stakeholders.