Total banks on $3.3bn Egina to boost production by 7% in 2018
Total plc released its second quarter interim results yesterday, listing its Nigerian oil field Egina as one of the key projects that will help it achieve a 7 percent rise in revenues this year.
“The upstream is well positioned to take advantage of the increase in oil prices thanks to production growth which should be above seven percent in 2018. It will benefit in the coming months from the start-ups of Kaombo, Tempa Rossa,Ichtys and Egina, which are all strong cash flow generators..,.” Total stated in a press release announcing its second quarter interim results.
The Kaombo North project is located in Angola, Egina is in Nigeria, while the Ichthys LNG is located in Australia and Tempa Rossa is in Italy.
In the result announced Total said its adjusted net profit for the second quarter soared 44 percent to $3.6 billion, beating analysts’ estimates of $3.4 billion.
Oil production rose by 8.7 percent to 2.717 million barrels of oil equivalent per day, driven by the early completion the Maersk Oil deal, and the ramp-up of several projects including Yamal LNG in Russia and Moho Nord in Congo.
It said cost savings measures were on track to surpass the $4 billion target for the year and reach $4.2 billion over the 2014-2018 period.
“Oil prices continued to increase, averaging $74 per barrel in the second quarter, supported by inventory reductions and geopolitical tensions,” Total’s Chief Executive Patrick Pouyanne said in a statement.
The company said it would continue to implement programmes to improve operational efficiency and reduce its breakeven so as to remain profitable, whatever the market context.
Egina is a flagship project of Total Nigeria Plc with a capacity to produce 200,000 barrels of crude oil per day. It is located about 130 km off the country’s coast at estimated water depths of more than 1,500 m. Total Nigeria says “the Egina oil field is one of our most ambitious ultra-deep offshore projects.”
Drilling for the project started in December 2014 and when completed, will have 57 subsea wells connected to an FPSO (floating production, storage and offloading vessel) designed to hold 2.3 million barrels of oil.
The FPSO, which arrived in Nigeria from South Korea in January has been undergoing a detailed engineering of its topside at LADOL by Samsung and a consortium of Nigerian engineering companies. The FPSO was billed to sail to the Egina field this week, which is located at OML 130.
Ahmadu-Kida Musa, deputy managing director for Deep Water at Total Exploration and Production Nigeria, disclosed this at the 2018 edition of the Nigeria Oil and Gas Conference and Exhibition (NOG) that Egina will achieve 77 percent of local content by the time it gets to production stage.
He also said “In addition to the oil, the Egina field will produce gas. Associated gas will be partly re-injected into the reservoir to maintain reservoir pressure, and partly channelled to supply the domestic gas market.”
Even though the FPSO has a daily production capacity of 200,000, initial production will be 100,000 barrels per day with peak production expected to be reached by 2020. Egina is expected to start full production in the fourth quarter of this year, though no specific date has been set.
The country’s current production capacity ranges between 1.7 million barrels per day to 2.0 million barrels per day often disrupted by vandalism of oil assets and the resultant shut in of production. The disruption on oil flow from Nigeria’s fields has tended to make buyers wary in demanding for the country’s crude oil. Expectations are high that Egina, because of its deep offshore location, will help create some level of certainty around the country’s oil flows.