A Growing Force
Africa Oil Week speaks to Dr. Ainojie (Alex) Irune, COO, Oando Energy Resources.
With an already substantial portfolio Oando Energy Resources is well on its way to achieving it aims of becoming the region’s top indigenous oil and gas producer.
Oando Energy Resources (OER) was birthed from the desire to create Nigeria’s foremost indigenous exploration and production company. A major step towards this ambition was the acquisition of ConocoPhillips Nigeria in 2014, taking OER from a 5,000boepd to a 50,000boepd producer with 18.9mmboe to 230.6mmboe of 2P reserves thus, dramatically changing the earning capacity and balance sheet of the Company.
“Our target is to get our production up to about 75,000boepd within five years,” Dr. Ainojie (Alex) Irune, chief operating officer, OER says. “When you look at our production to reserve ratio it is evident that we have the headroom and can realistically achieve this number. With a current daily production of 43,000boepd, 470mmboe of reserves and infrastructure already in place, I believe we are well positioned to hit this target.
“In the short term, our target is to ensure that across the NAOC JV we are closer to 280,000boepd, potentially up to 100,000 barrels of oil alone before the end of the year and we are making concerted efforts to actualise this. In 2019 we are looking to increase our drilling fleet on OMLs 60 to 63, but most importantly ensuring that we put together an aggressive campaign that sees the same kind of increase that we’ve experienced in 2018, further enhancing our production numbers.”
On OML 56, OER are undertaking three key activities. The first, a well intervention to improve the flow of one of the wells, the second drilling to increase oil flow and lastly additional drilling and appraisal in the Northern part of that acreage to bring new reserves to book by 2019. “We are excited at the prospects these activities present,” Irune adds. “Having successfully come out of the oil price downturn we plan to grow our production via investment in targeted projects whilst maintaining fiscal prudence, to ensure we remain less sensitive to short-term price fluctuations.
“From a growth perspective we want to build capacity; drive production organically and inorganically through acquisitions or mergers to take us into operatorship status. For us creating a future where we have more control is our short-term desire and we have begun the journey towards achieving this.”
Irune professes himself excited by the opportunities that OER’s exploration assets present, although he admits they are varied in terms of opportunity size, they each uniquely stand out. OML 131 is an asset that is a 100% owned and operated by OER, who were the first indigenous company to be awarded and operating a deep-water field to maturation. OML 131 is a deepwater asset with a substantial discovery straddling two blocks. On one side is OML 135 operated by Shell Petroleum; known as the Bolia Chota unit area it has 240 million barrels of liquids and 1Tcf of gas and on the other side is OML 130 called the Preowe discovery which has about 300 million barrels of oil and houses the Egina FSPO, operated by Total.
“We have signed a unitisation agreement with Shell as we will both need to jointly develop this asset,” Irune continues. “OML 131 straddles a reservoir and we have discovered oil on our side; to the right side of 131 is a Shell block, our discovery straddles both hence the need for us to jointly develop. Since Shell are stronger in deepwater they will be the unit operator. The existing discovery is currently being assessed for a viable development concept, in addition there is a significant exploration upside with potential to straddle OML 130 operated by Total. We also have other discoveries to the North of the block whilst the North-East is still being assessed. A combination of these factors makes the development concept of this asset extremely attractive.”
OER also have EEZ blocks 5 and 12 located in the Exclusive Economic Zone (EEZ) which is offshore east of the islands of Sao Tome and Principe. “These assets represent an exciting high-impact opportunity within the West Africa Atlantic Margin and are surrounded by established petroleum systems with world-class discoveries,” Irune continues. “Both assets have shown promising patterns as evidenced in recently concluded processing data. I can’t talk about what the eventual outcome will be as we are yet to do so formally. On block 5, we have a very able partner, Kosmos Energy, a big and very successful driller. We see us moving towards a drilling type commitment in the first quarter of 2019 as the prospects on this block are very positive.”
There is also OML 145 which has an existing discovery of over 250mmboe making it a commercially viable asset. In light of the recovery in oil prices OER are currently re-evaluating development concepts. “ExxonMobil is the operator on this asset with a clear plan for how we want to develop and move things forward,” Irune concludes. “A lot of the work we will be doing on these offshore assets will be done in conjunction with able partners who are unafraid to take risks. The combination of knowledge, experience and cost commitment means that our exploration portfolio is one with strong prospects.”
Oando is a Platinum Sponsor of Africa Oil Week 2018, 5-9 November 2018.
Dr. Ainojie (Alex) Irune is speaking at this years conference, on ‘Private Sector: Creating equitable frameworks and high quality local supply chains’.
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