Agip $13.5B Zabazaba Deep Water Project. Nigeria Looks For Boost. Nigeria is set to boost her daily production of crude oil as the Nigerian Agip Exploration Limited (NAE) begins work on Zabazaba deep water project that is expected to gulp $13.5 billion. The oil giant will begin to receive commercial proposals for the project this month (April) according to the Executive Secretary of Nigerian Content Development Monitoring Board (NCDMB), Simbi Wabote.
NNPC, Shell and the Nigerian Agip Exploration Limited (NAE) will sign the Final Investment Decision (FID) for the $13.5 billion Zabazaba deepwater project located in Oil Prospecting Lease (OPL) 245 in the second quarter of this year.
This indication emerged as NAE begins this April to receive commercial proposals for the development of the multi-billion deepwater oil field, which was planned a few years ago, but later suspended after cost projections made the project unviable. The Zabazaba deepwater is a greenfield offshore licence block located in the controversial OPL 245 in the eastern portion of the Niger Delta with water depths ranging from 1,200 to 2,400 metres.
Agip and Shell Nigeria Exploration and Production Company (SNEPCo) signed the production sharing agreement at the ratio of 50:50, where NAE is the operator. NAE is developing the Zabazaba field which has proven reserves of 560 million barrels of oil, as a standalone development, while the Etan field, which is also in OPL 245, will be developed as a tie-back to Zabazaba. The controversial OPL 245, which has about 9 billion barrels of crude oil, is believed to be the largest oil block in Africa.
The request for commercial tenders from bidders followed the finalisation of the technical evaluation for the main packages of the project by the Nigerian Content Development and Monitoring Board (NCDMB) and NAE, with the aim to maximize local content. The packages included the Floating, Production, Storage and Offloading (FPSO) units, subsea, installation and rigs.
Simbi Wabote, explained that the board fast tracked its evaluations and approvals on the Zabazaba project to increase Nigeria’s crude oil production and create opportunities for the growth and development of Nigerian content.
To bring the project to fruition, Wabote admonished contractors to submit reasonable commercial bids, bearing in mind the prevailing price of crude oil and the fact that Zabazaba is the only major project that has reached execution stage at the moment. The deep-water project was introduced a few years ago, but later suspended after cost projections and other push backs made it unviable.
The Managing Director, Nigerian Agip Oil Company, Mr. Massimo Insulla, has said the Zabazaba and Etan deep water project on Oil Prospecting Licence 245 will generate $8bn for the Federal Government. It will also grow small and medium enterprises, expand existing facilities and develop the skills set of the work force.
He pledged the company’s commitment to develop the project in compliance with the Nigerian Content Act to create jobs for Nigerians, a statement from the Nigerian Content Development and Monitoring Board said.
Wabote also said that Nigerians need three million liquefied petroleum gas also, known as cooking gas cylinders, annually.He said the only LPG cylinder manufacturing company in the country located at Isheri in Ogun, has the capacity to produce only 400,000 cooking gas cylinders yearly.
He said this was far below what Nigerian homes required annually, adding that this had encouraged the in-flow of substandard and expired LPG cylinders into the country. Wabote said in order to stop this, the board had conceived what he called “the local manufacture of liquefied gas cylinders’ initiative.”
The Zabazaba Deepwater is a Greenfield offshore licence block located in OPL 245 in the eastern portion of the Niger Delta with water depths ranging from 1,200 to 2,400 meters. The Zabazaba project is expected to develop oil and gas reserves in the range of 560 million barrels of oil equivalent. According to NAE’s project plans, the Zabazaba field will be developed initially. The Etan field will follow three years later and tied back to the Zabazaba FPSO from where the produced hydrocarbons will be processed and exported.