Efforts by the federal government to boost Nigeria’s oil production has received a boost as French oil major, Total, and global shipbuilding giant, Samsung Heavy Industries (SHI), Wednesday confirmed that crude oil production has started in the 200,000 barrels per day-capacity Egina deepwater oilfield.
Total has also stated that start-up was achieved in Egina project close to 10 per cent below the initial budget, which represents more than $1 billion savings in capital expenditure (CAPEX), due in particular to excellent drilling performance where the drilling time per well has been reduced by 30 per cent.
President of Exploration and Production in Total Group, Arnaud Breuillac, said in a statement issued from Paris, France, yesterday that the oil giant started up production on December 29, 2018 from the Egina field, located in around 1,600 metres of water depths, 150 kilometres off the coast of Nigeria.
Also in a separate statement, Samsung Heavy Industries Nigeria (SHIN), said the Egina Floating Production Storage Offloading unit (FPSO), one of the world’s largest FPSOs, which was built by the Korean firm for Total, achieved First Oil after the company had successfully completed the mooring, hook-up and the required offshore commissioning of the floating vessel.
Breuillac acknowledged that the Egina FPSO is indeed the largest FPSO that Total Group has ever built worldwide, pointing out that at peak production, the oilfield will produce 200,000 barrels of oil per day, which represents about 10 per cent of Nigeria’s daily production.
“Total is proud to deliver a project of this size under the initial budget and to contribute to the development of Nigeria’s oil and gas sector by generating employment as well as building industrial capability. Egina will significantly boost the Total Group’s production and cash flow from 2019 onwards, and benefit from our strong cost reduction efforts in Nigeria where we have reduced our operating costs by 40 per cent over the last four years,” Breuillac explained.
“Furthermore, some upside potential nearby remains to be developed and we are studying in particular Preowei discovery tie-back to the Egina FPSO,” Breuillac added.
Celebrating the Egina milestones, Samsung Heavy Industries Nigeria Limited stated that Egina FPSO had arrived at its offshore location on August 29, 2018 from the fabrication and integration yard in Lagos.
According to SHIN, it was at the offshore location that the company completed the remaining commissioning work and prepared the FPSO for oil production.
“SHIN has worked towards and successfully achieved this challenging goal of achieving First Oil in 2018, as agreed by all parties. SHIN also completed the FPSO mooring well in advance – on September 17, 2018 against target date of September 23, 2018, riser hook-up activities and required offshore commissioning, putting an exemplary effort in achieving First Oil in 2018,” the statement added.
SHIN added that it successfully completed the FPSO work in SHI-MCI yard and continued its work offshore under strict Nigerian local content regulations with similar safety and quality standards applicable in the company’s Geoje shipyard in Korea.
“This volume of onshore and offshore work had never been accomplished in Nigeria before now. With all these accomplished, the high-risk portion of the Egina project has now been completed. This achievement have been followed by very good response from Nigerian authorities, international clients and earned major headlines in the press. This leads SHI to gain competitive edge in future offshore project orders in West Africa, of course including Nigeria,” the company added.