ExxonMobil Reports Third Major Nigeria Startup for 2006

ExxonMobil said Wednesday that its affiliate, Mobil Producing Nigeria Unlimited (MPN), has started up the East Area Additional Oil Recovery project located approximately 17 miles (28 kilometers) offshore Nigeria. MPN (40 percent interest) is operator of the project with co-venture partner Nigerian National Petroleum Corp. (60 percent).

The project involves the reinjection of natural gas to mitigate normal field decline from East Area reservoirs and significantly increase ultimate oil recovery from Blocks OML 67 and OML 70. It is expected that the project will produce 530 million gross barrels of additional oil reserves from the blocks, and will provide a peak volume of 120,000 barrels a day of oil. The development also will further reduce routine flaring at the facilities to help meet the Nigerian government's and ExxonMobil's goals.

Major components of the Additional Oil Recovery (AOR) project include a gas compression complex plus seven associated platforms, including crew living quarters, and more than 100 miles (161 kilometers) of new pipeline for natural gas gathering and distribution. Total cost of the project is expected to be approximately $1.3 billion.

The AOR project is the third major facility startup for ExxonMobil affiliates in Nigeria this year. In February, MPN started production from the full-field facilities of the $1.3 billion Yoho project, with estimated recoverable resources of 440 million oil barrels. Yoho is currently producing about 160,000 barrels of oil a day, and injecting about 110 million cubic feet of natural gas daily. The facilities consist of a central production processing platform, 33 wells, living quarters platform, and a Floating, Storage and Offloading (FSO) vessel. The development is a joint venture between MPN (40 percent) and the Nigerian National Petroleum Corp., with 60 percent equity holding.

In March, the deepwater Erha field started production. Together with the Erha North satellite due on-stream in the third quarter of this year, the $3.5 billion Erha and Erha North developments will consist of 32 subsea wells tied to a Floating Production Storage and Offloading (FPSO) vessel. The combined Erha production is ramping up as expected for a total production output of 190,000 barrels a day. Associated natural gas production is expected to be about 300 million cubic feet a day, which will be reinjected for reservoir management.

Esso Exploration and Production Nigeria Limited (EEPNL), an ExxonMobil affiliate, is the operator of the Erha and Erha North developments. EEPNL has a 56.25-percent participating interest in the OML 133 production sharing contract area where Erha and Erha North are located, with Shell Nigeria Exploration and Production Co. holding the remaining 43.75 percent. Stuart McGill, senior vice president of Exxon Mobil Corp., said, "Liquids production that ExxonMobil affiliates either operate or participate in offshore Nigeria currently exceeds 1.1 million barrels per day. The Yoho, Erha, and AOR developments are important new supplies in helping our company meet growing global oil demand. All three projects started up on schedule and within facilities budgets, reflecting ExxonMobil's global project execution and management capabilities. These projects represent state-of-the-art technology application and underscore our continued commitment to supporting Nigeria in meeting its goals to promote national business development and capacity growth."

The Yoho, Erha, and AOR developments included contract awards to several Nigerian companies for in-country fabrication services, logistics support as well as training, development, and employment of Nigerians. Activities involved fabrication of a mooring buoy, subsea manifolds, drilling unit pilings, and modules for the Erha FPSO such as the flare tower, pipe racks and riser protection frames. The AOR project included more than 6,000 tons of steel fabricated in Nigeria as well as in-country application of coatings for all pipelines.

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