Crude oil production from Aje field, offshore Lagos, fell to 890,203 barrels last year from 1.2 million barrels in 2018, one of the joint venture partners has said.
The field produced 912,870 barrels in 2017, down from 988,806 barrels in 2016, according to figures from the Department of Petroleum Resources.
Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm, is the operator of the Oil Mining Lease 113, where Aje oilfield is located.
Other partners are Pan Petroleum Aje Limited, New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited and ADM Energy.
First oil was achieved in the Aje field in May 2016, 20 years after it was discovered, making Lagos an oil-producing state.
London-based ADM Energy Plc, in its audited results for 2019, said the field continued to perform well, adding that oil was being produced at a stable rate from two wells (Aje-4 and Aje-5ST2).
“Two wells achieved a total produced volume of 890,203 barrels of oil in 2019,” it said, adding that the combined average production from the two wells was 2,967 barrels of oil per day, compared to 3,100bpd in 2018.
The firm said the reduction was caused by both routine maintenance work on the floating production storage and offloading facility and significant equipment upgrades on the gas lift modules in the second half of last year.
It said the JV partners successfully reduced operating costs to $25 per barrel in 2019.
ADM Energy said, “In the light of unprecedented macro conditions post period, the partners successfully reduced operational and maintenance costs by 35 per cent, and FPSO lease costs by 40 per cent.
“As a result, the breakeven cost of production decreased to $28 per barrel, while operations have continued largely uninterrupted.
“The directors anticipate a recovery in crude oil prices in Q3-Q4 2020 and production is therefore currently being stored on the FPSO, which has up to 755,808 barrels of storage capacity, in order to benefit from a positive forward curve in the oil price.”
According to the partner, a new Field Development Plan for the Turonian Aje gas project is in the initial planning stages with the JV partners.
“By drilling three wells in 2021, the partners intend to triple daily production of oil and gas liquids from 3,000 bpd to 9,000 bpd and thereafter develop the dry gas which could be supplied to the Lagos market and sold to the West Africa Gas Pipeline,” it said.
ADM Energy noted that in the fourth quarter of 2019, a Norway-based firm, PetroNor E&P Limited, acquired a 12.2 per cent revenue interest in OML 113 (subject to completion) and formed a special purpose vehicle with the operator, Yinka Folawiyo Petroleum, to focus on the revitalisation and further development of the Aje field.
The company said it had identified a number of investment opportunities, including assets from both oil majors’ divestment programmes and the Nigerian government’s marginal oil field round.
“COVID-19 has undoubtedly had a big impact on global markets, but as economies reopen around the world, we are beginning to see an upturn in oil prices from previous lows. Our strategy firmly remains to increase 2P reserves and production, ADM is well positioned to take advantage of the recovery,” the Chief Executive Officer, ADM Energy, Osamede Okhomina, said.