Egina departs to oilfield but concerns are not over

The $3.3 billion floating production storage offloading (FPSO) vessel for the Egina deepwater oilfield departed for the oilfield on August 26 raising hopes that production will soon commence but this hardly signals that concerns over the project are over.

Already, the Egina project has broken new records. Located some 130 kilometers off the coast of Nigeria at water depths of more than 1,500 meters, the Egina oil field is one of the most ambitious ultra-deep offshore projects. It is billed as a project that will accelerate the pace of Nigeria’s industrial fabric and the transfer of technology. When it comes on stream it will produce 200,000 barrels of oil per day, which represents 10 percent of Nigeria’s total oil production.

The detailed engineering of the project’s topsides was executed in-country after it arrived from South Korea by Samsung with a consortium of Nigerian engineering companies, a boost to Nigeria’s local content development. Egina is an ultra-deep offshore project which requires specific expertise given the difficult conditions caused by high pressure and low temperatures in the area.

Nigeria’s production is billed to reach about 2million barrels per day (bpd) when the Egina production comes on stream. But in an oil environment where OPEC seems interested in placing a cap on member nations oil production, current dislocations in global supply expected with US sanctions on Iran and Venezuela’s crises may help the project’s production find new markets.

The crude grade that will be produced from the Egina project will also struggle for market share in an oil market where new crude grades are entering the market and refiners are increasing blending different crude grades to make up for a shortfall in the supply of a particular crude grade. The anticipated sanctions on Iran’s production by the US for example has seen Saudi Arabia and Russia rush to the market to produce a similar crude grade that will be out from Iran.

Discovered in 2003, the Egina field is located at water depths of between 1,400 and 1,700 meters, 200 kilometers offshore from Port Harcourt. It is located in Oil Mining Lease (OML) 130. It is controlled by Total Upstream Nigeria (24percent) in partnership with CNOOC (45 percent), Sapetro (15 percent) and Petrobras (16 percent).

The project is based on a subsea production system connected to a FPSO (floating production, storage and offloading vessel) designed to hold 2.3 million barrels of oil. Weighing close to 220,000 metric tons and measuring 330 meters long by 60 meters wide, the Egina FPSO is the largest ever built by Total. The FPSO will be connected to 44 subsea wells, 1,600 meters deep and is expected to produce 200,000 barrels of oil per day.

Considering that the project has suffered some delays including a rift with the Nigerian Ports Authority, the concern is immediately taking the FPSO to task to begin production. Projects in Nigeria are often bogged down by unnecessary delays arising from bureaucracies especially from government and regulators and there are finer points to sort out including finding market for the new crude that will be produced.

ISAAC ANYAOGU