- 70,000 bpd production target hits the rocks
Pan Ocean Oil Corporation, an indigenous oil exploration and production firm, has begun to suffer hitches in production, as the revocation of Oil Mining Lease (OML) 98 began to take toll on 30,000 barrels daily output from the company.
The firm, which lost license due to non-payment of legacy debts, is, however, according to executive consultant for operations, Felix Amieyeofori, advancing funding for its $500 million underground pipeline.
Amieyeofori said in a report that Pan Ocean, which currently produces about 30,000 barrels of oil daily, saw its plan to reach 70,000 barrels in five years set back by government’s revocation of one of its oil-mining leases last week.
Though the company said that it was in discussions with government to resolve the issues that led to the revocation, it maintained that this would not affect the planned start of the new pipeline.
President Muhammadu Buhari had earlier executed the revocation of Pan Ocean’s mining lease through the Department of Petroleum Resources (DPR), in a public notice.
Specifically, DPR said the revocation was based on a presidential directive to “recover legacy debts” owed by the companies operating the licenses.
The revoked blocs, the oil sector regulator declared, included five Oil Mining Leases (OMLs) and one Oil Prospecting License (OPL) belonging to five companies.
Asides Pan Ocean Oil Corporation (OML 98); other firms affected are Allied Energy Resources Nigeria (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).
Pan Ocean, prior to this action by DPR, hopes to commence the production of oil and gas from OML 147 at Owa Aladima.
OML 147 is one of the North’s most developments in the Niger Delta, and also the first to be on production among the 2007 bid rounds.
“Pan Ocean Oil Corporation, is spending about $500 million for an underground pipeline with a capacity to dispatch 150,000 barrels of crude oil a day,” a report on the company’s activity read.
The idea is to avoid contact with oil thieves who siphon off an estimated 100,000 of crude a day.
The company disclosed that the new pipeline will be put into service in August.
According to Amieyeofori, the conduit connects the company’s Amukpe oil field to the Escravos oil-export terminal on the Atlantic coast.
“We adopted the horizontal-drilling technology to bury 20-inch thick pipes 40 meters to 45 meters below the surface,” Amieyeofori said, adding that such a pipeline would be extremely difficult to sabotage.
The Amukpe-Escravos line offers an alternative route to companies operating in the western delta currently using the Nembe Creek and the Trans Forcados pipelines that suffer frequent closures due to sabotage. They include Seplat Petroleum Development Co., Sahara Energy Group and Nigeria Petroleum Development Co., the exploration unit of the state oil company.
“We have a lot of companies queued for this line, by the numbers we see, we are going to run over capacity,” said Amieyeofori.
SOURCE: NewTelegraph
