French major TOTAL has suspended the development of the Preowei field, a deepwater hydrocarbon pool located north of the Egina field in Oil Mining Lease (OML) 130, off Nigeria.
The company has also suspended its planned Ocean Bottom Node (OBN) seismic survey on both Preowei and Egina fields, and it has informed the Geophysical company contracted to do the job.
TOTAL cites three reasons: the COVID-19 pandemic, the new fiscal regime in the Nigerian Oil and Gas sector and the dip in oil prices, as constituting a perfect storm of sorts to push such a development project to the back burner at this time.
A subsea tank with over 150Million barrels of oil and gas equivalent, Preowei was discovered in 2003. The field development plan calls for a subsea tie back to the Egina field FPSO. Final Investment Decision was scheduled for 4th Quarter 2020. At peak, Preowei is expected to output 50,000Barrels of Oil Per Day.
TOTAL has reported, in operational updates, that it was reviewing all ongoing projects “in order to allocate scarce resources where they will be most beneficial to investors”.
The company is currently discussing the suspension of the Preowei development with the contractors who are handling the Front-End Engineering Design (FEED).
This move by TOTAL is at odds with the claim by Timipre Sylva, Nigeria’s Minister of State for Petroleum, that the OPEC+ agreement to reduce crude oil production would encourage “the go ahead of projects in the country”.
Mr. Sylva said in a release last weekend: ”All planned industry development projects would progress as they would be delivered after the termination of the 9th OPEC/Non-OPEC Ministerial Meeting Agreement on adjustments in April 2020”.