First Otakikpo oil cargo lifted from Ailsa Craig FSO

FSO Ailsa Craig; Image source: CMI Offshore

First crude oil cargo produced from the Otakikpo marginal field has been lifted from the FSO Ailsa Craig by Shell Western Supply and Trading Limited, a subsidiary of Royal Dutch Shell.

Otakikpo is situated in Nigeria’s coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta.

The field is operated by the Nigerian oil and gas company Green Energy International with a 60 percent interest while Lekoil holds the remaining 40 percent as a technical and financial partner.

Lekoil said on Wednesday that 120,000 barrels of gross production had been lifted. Under the terms of the crude sales agreement with Shell Trading signed in March, the company is due to receive its payment for this crude within the next month.

According to the oil company, the current production at Otakikpo is approximately 5,000 bopd. With the beginning of regular liftings, Lekoil is focused on ramping up to production of 10,000 bopd, expected to happen by year-end.

Lekoil added that key components to achieving this Phase 1 milestone involved completing the expansion of onsite storage capacity and utilizing a higher capacity shuttle tanker.

Non-operational days from the minor reconfiguration and optimization of offshore infrastructure has led to average production of approximately 3,000 bopd from the four production strings across both wells (Otakikpo-002 and -003) since the start of commercial production, announced in February 2017.

Lekan Akinyanmi, Lekoil’s CEO, said: “Selling our first oil marks the commencement of cash flow from Otakikpo. Dollar receipts will increase as we further ramp up production to our Phase 1 target of 10,000 bopd and will contribute to funding Phase 2 expansion.

“The production and now offtake and export sale from the FSO Ailsa Craig is the culmination of our team’s hard work over the last two years to bring Otakikpo into revenue generating production.”

To clarify, Otakikpo Field Development Plan consists of two phases. Phase 1 comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an early production facility of 10,000 bopd capacity and export via shuttle tanker.

On the other hand, Phase 2 covers the subsequent incremental development of the rest of the field with a new central processing facility and new wells expected.

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