Conoil Production Plunges to 9,000BOPD - Africa’s premier report on the oil, gas and energy landscape.

Conoil Production Plunges to 9,000BOPD

By Fred  Akanni,  Editor

Output has plummeted from 35,000BOPD in 2005

The Nigerian independent Conoil Producing has had its output down to 9,000 Barrels of Oil Per Day (BOPD), from close to 11,000BOPD in the early to middle of 2014. Conoil is struggling with optimum output in two different production hubs: 1,000 BOPD on the western flank of the Niger Delta and 8,000BOPD in its Otuo South field, at the mouth of the continent’s most prolific basin.

These figures are instructive. Conoil was the first real Nigerian operator of a Nigerian hydrocarbon acreage, winning its first license as one of the several local firms granted discretionary awards in 1991, during “The Indigenous Thrust”. The company made history when it claimed to have made a discovery in that asset (now Oil Mining Lease (OML) 103) in Christmas of 1993.At the height of its powers, Conoil produced over 35,000BOPD between 2005 and 2006.Production could readily have been more. “Our overall potential hydrocarbon resources of over 1.0 Billion Barrels of Oil and 7.0 Trillion Cubic Feet of Gas, helps position us in Africa as the flagship of the independent oil and gas companies”, the company claims on its website. Conoil is the operator of six blocks in the Niger Delta. Its asset include OML 290, which it describes as its latest (PSC agreement was signed in October 2008); OML 59,for which it signed a technical operator agreement with Continental Oil and Gas Limited (CONOG) in 1998, to provide 100% funding and technical service agreement to operate; OML 136; Oil Prospecting Lease (OPL) 2007; OPL 257 as well as Block 4in the Joint Development Zone (JDZ), in which it is 25% equity holder. This is the lowest equity Conoil holds in any asset. It doesn’t like having minority positions. Conoil has, however, largely left these assets to lie fallow for most of the past 10 years.

Although TOTAL farmed in for a 40% participating interest in OPL 257 andOML 136 on 17th October, 2006 and 17th May, 2007 respectively, Conoil has had challenges implementing a work programme with its more deep pocketed partner, especially in the Egina South prospect in OPL 257, which could be readily tied to the Egina field, currently in development.

In the last two years, however, Conoil has been more aggressive working on the upside potentials of OPL 290, OML 2007 and OML 59. It has made deeper pool discoveries in OML 59 and proved up new oil in OML 2007 and OPL 290, which, experts say, could push production to 60,000BOPD by 2018, if corporate governance issues don’t stand in the way.

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4 comments

  1. Suo dfav says:

    Please tell Mr Adenuga to allow good corporate governance; employ; respect and pay professionals very well; Conoil production will increase greatly.

    You dont run Oil business like the normal Nigerian business thats why NPDC/NNPC cant be among the top 5 NOC in the world.

  2. chy obet says:

    What a shame! A former colleague also told me of the plunge in output of Pan Ocean. One of the major problems of these independent Nigerian Operators is lack of understanding of the fundamentals of oil field best practices. That is what you get when you have geologists running the show and formulating field development plans. Go recruit sound Reservoir Engineers to shape your outlook and help turn around your fortunes.

  3. abiodun ola-samuels says:

    well, all i can say is allow good hands come into both organisations i think funding is a major problem with African oil companies. we need access to cheap funds with long payment plan for good time frame for research before final investment decision is taken

  4. Unfortunate that Conoil is declining. Funding is indeed a major issue for the Nigerian Oil and Gas industry. It is even more critical when you realize that the Finance Minister is more interested in the revenue that comes from oil and gas than the funding and financial efficiency in the industry. Contracts and payment patterns are haphazard. Velocity of funds cannot be measured in the industry so we have a huge giant on clay feet just about to crumble.. The Central Bank governor does not also seem to understand the oil and gas industry. As a matter of fact most of our bankers and so-called financial experts confound importation of petroleum products as oil and gas. The dilemma is that oil and gas is the most important thing in our economy and should require experts with knowledge of both the local and global oil and gas industry to manage Finance and Central Banking. The regulations they will put in place will constrain all the Conoil and Pan-ocean of Nigeria to run their companies efficiently or step-aside.
    I have continually found it difficult to understand why our money reserves (Excess Crude, “Foreign” Reserves) are managed by foreign banks who in turn lend our money to our banks who now lend to our businesses at a higher premium. You can imagine if the CBN committed $5 – 10 billion per annum to lend to Nigerian Oil and Gas Companies, how much wealth shall be generated. They can actually limit the amount for exploration to say $0.5 billion and the rest to development drilling, production, refining, pipelines and distribution, gas utilization and petrochemicals. The amount of jobs to be created would be enormous. This in a nutshell would be called development and energizing the economy. All the mimicking of the foreign developed economies and fighting to defend a Naira that is not supported by a robust producing economy is a waste of resources.

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