Shell opens bids for $12 bn storage facility

Shell opens bids for $12 bn storage facility

Wednesday, May 7, 2014 2:53 pm

The Shell Petroleum Development Company has opened bids for the construction of its $12 billion (N1.9 trillion) Floating Production Storage and Offloading (FPSO) facility in Nigeria.

The News Agency of Nigeria (NAN) reports that the facility, also known as Bonga South-West, lies 120km southwest of the Niger Delta, in a water depth of over 1,000 metres.

Shell’s General Manager, Deepwater, Mr Jerry Jackson, who made the announcement on Wednesday at the 2014 Offshore Technology Conference in Houston, Texas, said that the Final Investments Decision on the field was expected before December, 2014.

Bonga is located in oil prospecting licence 212 and Shell Nigeria Exploration and Production Company (SNEPCO) operates the field on behalf of the NNPC, under a production sharing contract, in partnership with Esso (20 per cent), Agip (12.5 per cent) and Elf (12.5 per cent).

A shell vessel

A shell vessel

Jackson said that the project, spanning OMLs 118, 132 and 140, was underway with significant Nigerian content levels.

“The tender process for the single-point moored facility which would be the world’s largest FPSO unit, is still currently out to tender with bidders, including Samsung and Hyundai.”

The Managing Director of SNEPCO, Mr Chike Onyejekwe, said also that Shell had recorded tremendous success in its Bonga Deep Water oil field, noting that as at December 2012, it had exported about 450 million barrels of crude.

“The cost of the Bonga field development, including the cost of the Floating Production Storage Offshore vessel built in 2004, came to $3.6bn (N569bn)

“Despite the fact that the drilling of the 19 oil wells will amount to $12.35bn (N1.96tn), the Bonga extension project, may gulp around $33bn (N5.2tn),” he stated.

The Commercial Manager of SNEPCO, Mr Stefan Vas de Wael, said the development of deep water assets in Nigeria’s oil and gas sector could contribute $3bn (N474bn) to the country’s economy and generate about 200,000 jobs annually.

Vas de Wael said the undeveloped deep-water assets could add over 600,000 barrels per day of oil, which would amount to doubling the current deep water liquids from deep water fields in the country.

He said that over $5 billion (N790bn) would be required annually to develop and produce five million barrels of oil per day.

“If all the deep water assets in Nigeria are developed, they could generate 200,000 plus jobs, $3bn in GDP and 600, 000 barrels of oil per day.

“Developing 200,000 jobs is equivalent to growing the oil and gas industry by 30 per cent. $3bn GDP will amount to an additional 15 per net of projected GDP growth rate.

“The 600,000 barrels per day will amount to doubling current deep water liquids production,” he added. (NAN)

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