Addax Petroleum Completes FPSO Replacement Ahead of Schedule

Addax Petroleum has successfully replaced the floating production storage and offloading vessel ("FPSO") on the OML123 property offshore Nigeria, with an upgraded FPSO contracted from Fred Olsen Production AS and that production on OML123 has returned substantially to pre-replacement levels.

Commenting on the replacement of the OML123 FPSO, Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said, "I am delighted that the OML123 FPSO replacement was accomplished safely and well ahead of the scheduled change-out time. The success of this major marine project is due in no small part to the world class efforts of all concerned and to the excellent cooperation between Addax Petroleum, Fred Olsen and the Nigerian government agencies. We remain on track to achieve our 2006 production targets."

The replacement of the OML123 FPSO involved the shutdown of all production from OML123, the removal of the Knock Taggart FPSO, the installation of the Knock Adoon FPSO and the restart of OML123 production.

Production shutdown during the FPSO change-out was scheduled to last 10 days but production was restarted after 5 days and a further 3 days later OML123 was producing at substantially pre-shutdown levels:

  • OML123 production was shutdown and disconnection of the Knock Taggart started at 17:00hrs local time on September 24
  • production resumed at 17:15hrs local time on September 29 following installation of the Knock Adoon
  • since resumption OML123 production has been steadily ramped up and returned, on October 2, to substantially pre-shutdown levels.

The replacement of the OML123 FPSO was a major marine project that required, as planned and budgeted for by the Corporation, greater than 2 million man-hours. The complexity of the change-out operation itself required up to 16 marine support vessels and 3 onshore support bases coordinating the simultaneous shutdown of all associated production facilities on OML123. The change-out was achieved without any disruption to the Corporation's drilling activities in the area.

The Corporation maintains its 2006 production guidance that its Nigeria properties will produce an annual average of 85 mbbls/day and exit the year at approximately 100 mbbls/day. Addax Petroleum's 2006 oil production to the end of August by license area is summarized below.

    Production (mbbls/d)     Year to end
                                August       August        July      H1 2006
    OML123, offshore             51.2         51.7         51.2         51.2
    OPL90, offshore              28.1         38.7         33.2         25.4
    OML124, onshore               3.6          3.9          3.9          3.5
    Total                        83.0         94.3         88.3         80.1

OML123 is the Corporation's largest producing property and utilizes an FPSO to process, store and offload crude oil to ocean-going tankers. The replaced Knock Taggart FPSO was contracted from Fred Olsen and had been stationed on OML123 since 1998. The replacement Knock Adoon FPSO is also contracted from Fred Olsen for up to the next 16 years. The Knock Adoon is a new tanker conversion which was undertaken earlier this year at the Dubai Drydocks Shipyard. The Knock Adoon is designed to store a minimum of 1,700,000 barrels of crude oil compared to storage capacity of 1,000,000 barrels on the replaced Knock Taggart. The Knock Adoon FPSO also offers a processing capacity of 60 mbbls/day of crude oil and a total liquids (oil and water) processing capacity of 140 mbbls/day. Incorporated in this facilities upgrade and expansion is an off-loading buoy terminal to allow more efficient crude oil offloading and to accommodate larger tankers.