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Indian Firm Reportedly Offers 2bn Dollars for Nigerian Oil Block

Posted on: Thursday, 8 December 2005, 12:00 CST

Excerpt from report by Mike Oduniyi entitled "Indian firm offers 2bn dollars for oil block published by Nigerian newspaper This Day website on 8 December

India's Oil and Natural Gas Corporation (ONGC), has offered to pay 2bn dollars (260bn Naira) to acquire the 45 per cent shares of South Atlantic Petroleum, owned by former defence minister, Gen (Rtd) Theophilus Danjuma, in Akpo deep offshore oil field, as investors from the Asian country press ahead for an in-road into the Nigerian petroleum sector.

The ONGC said yesterday that it won the bid for the acquisition of South Atlantic Petroleum's stake in the Akpo field, which the Nigerian indigenous company put up for sale last October. The Indian firm said it was now awaiting approval for the transfer of the shares from the Ministry of Petroleum Resources.

The Akpo oil field located in Oil Mining Lease (OML) 130, is said to hold 700 million barrels of crude oil reserves and gas reserves of about 2.5 trillion cubic feet. The field along with Shell's Bonga, ExxonMobil's Erha and Chevron's Agbami oil fields, will contribute to the significant increase in Nigeria's oil production capacity.

South Atlantic Petrol had opened negotiations in London with prospective bidders, which included China National Petroleum Corporation (CNPC). ONGC however, said it won the bids and that it was expecting "a decision shortly." The equity in the Akpo field it added, will be managed by its overseas arm, Videsh, which already owns 25 per cent in two Nigerian deepwater oil blocks, OPLs 321 and 323.

ONGC's Indian fields are said to be on the decline and it is searching the globe for oil and gas to supply India's booming economy. [Passage omitted]

Discovered in 2000, the Akpo field is scheduled to commence production in the last quarter of 2008 and is expected to quickly reach peak production of 225,000 barrels of oil per day (bpd) of which nearly 80 per cent will be condensate.

Last August, Total awarded a 1.08bn dollar contract to Technip of France and South Korea's Hyundai Heavy Industries to build the floating, production, storage and offloading (FPSO) vessel for the field, while Italian oilfield services giant Saipem got an 850m dollar contract covering the umbilical, riser and flowline (URF) package.

The field development plan calls for 22 producing wells, 20 water injection wells and two gas injection wells, tied back to a floating production, storage and offloading (FPSO) vessel with a storage capacity of 2 million barrels. Its condensate output will be exported via a buoy located 2 kilometres from the FPSO, while the gas will be piped 150 kilometres to the Amenam/Kpono platforms, from where it will be sent to the Bonny LNG plant.

Other stakeholders in the field are French firm Total, which holds 24 per cent interest, the Nigerian National Petroleum Corporation (NNPC), 50 per cent equity and Brazil's Petrobras.

Source: BBC Monitoring Africa

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