The delay in the approval of the various segments of the Ofon Development Phase 2 has slowed down the capacity of Total Exploration and Production Nigeria, to push into the domestic market about 106 million standard cubic feet of gas per day.
The implication is that the current efforts at improving electricity supply to boost economic activities are being jeopardised, as the country is denied about 620 megawatts (MW) of electricity daily.
The project was supposed to have come on stream about two years ago, but could not, because of delays occasioned by the alleged incompetence of local contractors, as well as foot-dragging on the part of government.
It took four years for Total to secure another approval, after the first one which heralded the execution of the project, informed sources said. This is against the normal practice of one to two years interval for such a huge project, which is expected to add about 40,000 barrels per day to the nation’s national day crude oil production.
A Total official who spoke to BusinessDay said his company was more interested in the prospects ahead, than in dwelling upon the bumpy past and long delays.
Emmanuel Hyset, the project manager, said the management of the company was at the peak of mobilising personnel for the projects which are now expected to be completed in the third quarter of 2015.
Ofon 2, he said, would add about 40,000 barrels of oil per day to the country’s production and would form the hub of production for future development of Oil Mining Lease (OML) 102 such as Etisong, Uyai, Ofon S, and Ofon NE, bringing additional oil and gas resources in excess of 250 million barrels of oil equivalent.
The Ofon Field Development project phase 2, which was launched in 2007, was aimed at enhancing production from the mature Ofon field.
The additional reserves proven and probable to be developed during Ofon phase 2 are estimated at 350 barrels of oil equivalent.
The main goals of the projects are to stop gas flaring, monetise the gas by piping it to the Nigeria Liquefied Natural Gas (NLNG) company at Bonny via Amenam field, develop additional reserves while producing the remaining phase-1 reserves, and inject water to re-pressure the various reservoirs.
The issue of project contracting circle in Nigeria is a major problem which has bedevilled all the major projects in the Nigerian oil and gas sector. In some other countries such as Angola, project circle is relatively short when compared to situation in Nigeria.
The delay of the projects has led to high cost of the project with inflation having tremendous effect.
OLUSOLA BELLO
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