Lagos Set To Join Oil Producing States As Production Begins This Year

With the award of a rig contract to

carry out the drilling and completion

programme for the Aje shallow-water

field offshore Lagos, the first oil

production is expected to begin in the

state by December this year.

The operator of the Oil Mining Lease

113 has, on behalf of the joint venture

partners, entered into a rig contract

with Saipem for the Scarabeo 3 drilling

rig to carry out the drilling and

completion programme for the Aje Field

Cenomanian oil development, Panoro

Energy said in a statement on Monday.

The joint venture partners led by Yinka

Folawiyo Petroleum Company Limited

(the operator) had in October last year

taken the final investment decision to

develop the first phase of the Aje field.

According to the statement, the

Scarabeo 3 rig is a semi-submersible rig

currently stationed offshore Lagos. The

rig will be moved 18 nautical miles to

the Aje drilling location and will be

used to carry out well operations for the

first phase of the Aje Cenomanian Oil

field development that includes two

subsea production wells.

It said the well operations would

comprise the completion of the existing

Aje-4 well as a production well, and the

drilling and completion of a new well,

Aje-5, which would be drilled to the

Aje-2 subsurface location.

The Aje-2 well is said to have

demonstrated high reservoir

productivity in a Cenomanian

production test conducted in 1997,

flowing approximately 3,700 barrels of

oil per day of 41˚API oil under

suboptimal well conditions.

Well operations are expected to

commence in early third quarter of 2015

and are likely to take approximately 90

days to complete, according to the

statement.

It stated that once well operations had

been completed, subsea equipment

would be installed and the wells would

be tied back to the Front Puffin

floating, production, storage and

offloading vessel, currently undergoing

refurbishment in Singapore.

The Chief Executive Officer, Panoro

Energy, Mr. John Hamilton, was quoted

in the statement as saying, “Panoro is

very pleased to be entering into the rig

contract for the drilling and completion

of the Aje development wells. We have

been able to achieve a lower rig rate

than was expected when the Final

Investment Decision was made in

October 2014.

“With well operations expected to

commence in the next few weeks, we

will continue moving towards our

incremental growth strategy of

converting Panoro’s discovered resource

base into commercial production and

generating positive cash flow in 2016.”

Aje is an offshore field located in the

western part of Nigeria in the Dahomey

Basin at the border with Benin

Republic, with the first oil targeted for

December 2015, the statement said.

The field is situated in water depths

ranging from 100 to 1,000 metres about

24 kilometres from the coast. The field

contains hydrocarbon resources in

sandstone reservoirs in three main

levels – a Turonian gas condensate

reservoir, a Cenomanian oil reservoir

and an Albian gas condensate reservoir.

Yinka Folawiyo Petroleum Company is

the operator, with 25 per cent interest

in the field. The partners are Vitol, First

Hydrocarbons Nigeria Limited, Energy

Equity Resources Limited, Panoro

Energy ASA and Jacka Resources

Limited.

The JV partners had in January 2014

submitted the Field Development Plan

for the Aje field to the Department of

Petroleum Resources. The FDP was

approved in March and is primarily

focused on the development of the

Cenomanian oil reservoir.