Nigeria Oil Output to Rise as Total's Egina Field Begins Production

SEATTLE (Oil Monster): Nigeria’s oil production is projected to increase by 200,000 barrels per day this year with the coming on stream of the Egina oil field but analysts have pointed out that the gains might be eroded by the OPEC oil production cut agreement that the country has been lumped into.

Oil giant Total officially announced yesterday in Paris that it started production on December 29, 2018 from the Egina field, located around 1,600 meters of water depths, 150 kilometers off the coast of Nigeria.

At plateau, the Egina field will produce 200,000 barrels of oil per day, which represents about 10 per cent of Nigeria’s production, the company said in a statement on its website.

“Total is proud to deliver a project of this size under the initial budget and to contribute to the development of Nigeria’s oil and gas sector by generating employment as well as building industrial capability,” the President, Exploration and Production of Total, Arnaud Breuillac ,said in the statement.

Discovered in 2003, Egina field is the second development in production on the Oil Mining Lease (OML) 130 following Akpo field, which started-up in 2009.

Total Upstream Nigeria Limited operates OML 130 with a 24% interest, in partnership with NNPC, and three other partners.

Minister of State for Petroleum Resources Dr. Ibe Kachikwu in a Bloomberg interview in December had said the coming on stream of Egina oil field would have no impact on Nigeria joining the OPEC production cut.

“The reality is that most of that is condensate. It is not pure crude. So, within the condensate philosophy we probably are still covered,” Kachikwu said.

Energy research analyst at Ecobank Jubril Kareem in a tweet, however, said “under OPEC’s 1.2 million production cut agreement, Nigeria is expected to keep oil production at 1.738m barrels/day (excluding other liquids).”

He said, the development will take Nigeria’s total liquid (crude oil, condensate etc) above 2.1m b/day in 2019.

“This is still below the proposed budget benchmark of 2.3mln b/d.”

However, while increasing demand remain a major boost for crude oil in 2019 (barring any further escalation in trade war), the level of expected additional supply is worrying.

Courtesy: www.dailytrust.com.ng