Integrated oil and gas company
) expanded its operation in Nigeria. TOTAL's subsidiary - Total
Upstream Nigeria Limited ("TUPNI") - received the necessary
approvals from Nigerian National Petroleum Corporation ("NNPC)
for the development of the offshore Egina field.
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TOTAL has been exploring Nigerian oil reserves for the last five
decades. The development of the Egina field will involve the
drilling of 44 wells connected to a 330 meter-long floating
production, storage and offloading vessel with a storage capacity
of 2.3 million barrels. First oil production is expected at 2017
end, with production reaching 200,000 barrels of oil per day.
This field, discovered a decade earlier, is located in water
depths of around 5,249 feet (1,600 meters), 124.74 miles (200
kilometers) offshore Port Harcourt and 12.42 miles (20
kilometers) southwest of the Akpo field, located on the same
The Egina field is the second development in the OML 130 license.
Previously the company developed Akpo in the same license. Akpo
started commercial operation in 2009. TOTAL will have a 24%
interest in the Egina field. Other partners are NNPC, South
Atlantic Petroleum of Nigeria (SAPETRO),
CNOOC Limited of China
) of Brazil.
TOTAL produces oil and natural gas from its assets located
worldwide. However, the majority of the volume comes from its
exposure in Africa. In first quarter 2013, TOTAL produced 2,323
thousand barrels of oil equivalents per day (kboe/d) out of which
692 kboe/d or 29.8% of the total production came in from African
Despite the exploration opportunities in Nigeria, its political
condition is a cause of concern for overseas oil and gas
operators like TOTAL. In the first quarter 2013, TOTAL's oil and
gas production declined 2.5% year over year due to the UK
accident and political uncertainty and security issues in
In Nov 2012, TOTAL sold an offshore oil field near Nigeria for
$2.5 billion to the Chinese state-run firm Sinopec Corp.
The asset sale will provide funds for its future projects.
The security uncertainty might have played a role in the
decision making. Having said that, we believe TOTAL's decision to
expand operations in Nigeria speaks highly of the huge reserve
potential of offshore Nigeria.
In addition to TOTAL, which currently has a Zacks Rank #3 (Hold),
other oil and gas giants like
) have also ventured into Nigeria lured by an abundance of oil
and gas resources.