Indications emerged on Friday that Shell
Nigeria Exploration and Production Company Limited will spend $12.35bn
(about N1.96tn) on the planned drilling of 19 new oil wells as part of
the expansion of Bonga deep water oil field.
A deep water oil well project, it was learnt, would cost $150m (N23.7bn), with further appraisal cost put at $500m (N79bn).
Bonga was Nigeria’s first deep water oil
discovery in 2005 and has the capacity to produce more than 250,000
barrels of oil a day and 150 million cubic feet of gas a day. At the end
of 2012, Bonga had produced about 450 million barrels of oil.
The Commercial Integration and Business
Value Manager, Shell Nigeria, Taaj Shobayo, also confirmed that
about $650m (N102.8bn) was required for each deep water exploration and
production.
Shobayo, who spoke at a recent training
organised for energy journalists by the oil major, described deep water
exploration as an expensive and risky endeavour.
He said, “Deep water exploration and production is expensive, complex
and risky with long cycle times. Current offshore projects take 10 years
to 20 years from licence award to production. A typical well in a deep
water cost about $150m (N23.7bn) and you will be spending another $500m
(N23.7bn) for further appraisal.”
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