Lekoil, an oil and gas exploration and development company based in Nigeria and West Africa, announced that its joint venture (JV) with investment firm Green Energy International Limited has signed a Memorandum of Understanding (MOU) for the development of the Otakikpo project in Nigeria
The company stated that the JV has signed the MOU with Schlumberger and a subsidiary of a major international oil company which has been operating in Nigeria for more than half a century.
The MOU covers a comprehensive programme for sharing and drilling infrastructure around a group of marginal field assets in OML 11.
The phased development plan of the project consists of drilling up to five new wells in Otakikpo, expanding processing infrastructure to comprise an onshore terminal to be located outside the Otakikpo field operations area, construction of an export pipeline connecting the onshore terminal to an offshore buoy to handle Otakikpo and other fields in OML11.
Project management and associated asset management costs provided by Schlumberger will be shared between the JV and the operators and owners of other marginal fields participating in the project.
The company said capital expenditure to be incurred by the JV is expected to be approximately US$170mn covering new wells and processing infrastructure, of which Lekoil is expected to fund US$68mn.
The JV will also enter into an exclusive offtake agreement with the major oil company for the sale of crude produced pursuant to this project. Schlumberger will act as technical and project execution partner to provide oilfield services and project management services to assist in ramping up production and long-term field management.
Lekan Akinyanmi, CEO of Lekoil, commented, “This MOU is a significant milestone for Lekoil and the Otakikpo JV. It secures the necessary funding, subject to the various conditions being satisfied, to drill additional wells and unlock further value at Otakikpo.”
“We are pleased to be working with Schlumberger and other members of the consortium. We look forward to the transformation of operations infrastructure and an opportunity to earning revenue along the value chain,” he concluded.