ExxonMobil Corporation
(
XOM
), through its Nigerian affiliate − ExxonMobil subsidiary Esso
E&P Nigeria (Offshore East) Limited − experienced the first oil
from the Usan field off the coast of West Africa. This is expected
to boost Nigeria's daily oil production capacity by 180,000 barrels
at peak level. Nigeria is considered to be Organization of the
Petroleum Exporting Countries' (OPEC) fourth largest oil
producer.
The Usan project is a joint deepwater offshore development
venture in Nigeria aiming to develop the country's resources. The
oil field is expected to have a reserve potential of more than 500
million barrels of oil. The project will employ a floating
production, storage and offloading (FPSO) vessel with a storage
capacity of two million barrels of oil. The vessel is designed to
process 180,000 barrels per day and its size (320 meters long and
61 meters wide) makes it one of the biggest vessels of its kind in
the world.
Discovered in 2002, Usan lies in water depths ranging between
750 meter and 800 meter in Oil Mining Lease (OML) 138 and
approximately 62 miles (about 100 kilometers) off Nigeria's coast,
south east of Port Harcourt, Rivers State. French oil major,
Total SA
(
TOT
) enjoys the operatorship of the project with a 20% interest
through its subsidiary −Total E&P Nigeria Limited. Other
partners include the Nigerian subsidiaries of ExxonMobil with 30%
interest,
Chevron Corporation
(
CVX
) with 30% share and
Nexen Inc
. (
NXY
) with 20%.
ExxonMobil remains upbeat in both shallow water shelf as well as
deepwater acreage offshore Nigeria where it holds interest in seven
blocks. In the deepwater, the company also holds the operational
interest in Erha and Erha North fields and generates volumes from
the Bonga field. ExxonMobil's net production averaged 391 thousand
barrels per day in offshore Nigeria as of 2010.
The company boasts of diversified operations across the world
with several new projects coming online through 2013. While Exxon
functions in all corners of the globe, the main areas of focus, for
new volumes, in the coming years include the U.S., Canada,
Kazakhstan, Nigeria, Australia, Russia, Angola and Iraq. In the
exploration front, it includes unconventional natural gas across
North America as well as offshore regions, including the Gulf of
Mexico. Hence, we believe that the super major will retain its
leverage to higher oil prices going forward given its significant
share in the upstream business.
However, we remain skeptical following the company's
fourth-quarter 2011 production level, which declined almost 9% year
over year. Hence, we maintain our long-term Neutral recommendation
on the company. ExxonMobil holds a Zacks #3 Rank, which translates
into a short-term Hold rating.
CHEVRON CORP (
CVX
): Free Stock Analysis Report
NEXEN INC (
NXY
): Free Stock Analysis Report
TOTAL FINA SA (
TOT
): Free Stock Analysis Report
EXXON MOBIL CRP (
XOM
): Free Stock Analysis Report
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