NPDC Increases Production In OML 26 - Africa’s premier report on the oil, gas and energy landscape.

NPDC Increases Production In OML 26

Crude oil production has ramped back up in Nigerian state company NPDC operated Oil Mining Lease (OML) 26.
The production returned to 11,000BOPD, as of August 6, 2012. This is just about the volume that Shell was delivering on the same property as of the time it exited in early 2011. The acreage is one of the three recently given up by Shell and partners and acquired by Nigerian indigenous companies. NPDC holds 55% of the
equity and is operator.

This magazine reported a steep production decline, by 50%, to 5,500BOPD as of June 30, 2012. It also cited the inability of NPDC, since January 2012, to refurbish compressors which enable gas lift
operations on the Ogini field, the acreage’s main producing property, as a reason for the decline. The story was true, but there’s an update. The compressors have been refurbished and new ones supplied, so gas lifting operations have commenced. Officials at the Department of Petroleum Resoures, the country’s regulatory agency say that the decline was exacerbated by the closure of the Trans Forcados Pipeline, the export line, for 24 days, between February and March, 2012. Even so, the challenges of an inefficient state hydrocarbon company trying to be an operator continues to dog the operations: Local firm First Hydrocarbon Nigeria(FHN) Limited bought
over the 45% JV equity belonging to Shell, Agip and TOTAL in OML 26 in 2011, but NPDC, the government company insisted on pursuing ‘the rights of the first refusal’ clause contained in the Joint Operating  Agreement(JOA) between the NNPC and the divesting IOCs.

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