By Tsvetana Paraskova
Just as the Organisation of Petroleum Exporting Countries (OPEC) and partners will have started the new round of production cuts to reduce oversupply, France’s Total is set to begin exports from the new ultra-deep Egina oil field offshore Nigeria in February 2019, at an initial rate of just over 100,000 bpd, Bloomberg reported on Thursday, quoting a copy of a loading program for the new grade it had seen.
The Egina oil field project is based on a subsea production system connected to a floating production, storage and offloading (FPSO) unit. The field’s production capacity is forecast at 200,000 bpd—around 10 per cent of Nigeria’s total oil production, the project operator Total says.
According to Bloomberg estimates, 200,000 bpd in exports will make Egina the fourth biggest Nigerian crude grade in terms of volumes.
The timing of the new field start-up coincides with the OPEC/non-OPEC production cuts, from which Nigeria wasn’t spared this time around. The report of start of exports also comes as oil prices continue to be depressed by market fears that the cuts may not be enough to erase the oversupply, especially if fears of slowing global economic growth materialize.
Following a wave of militant violence in 2016 and early 2017, Nigeria’s oil production started to recover in the latter half of 2017, when attacks on oil infrastructure subsided.
This year, after some hiccups and pipeline outages during the spring and early summer, Nigeria’s crude oil production has been on the rise since August, and production is set to further increase with the imminent start-up of Egina.
Despite some concerns over the stability of Nigeria’s oil operations ahead of the February elections, the country wasn’t exempted from the new OPEC+ production cut deal. Fellow African producer Libya, alongside Iran and Venezuela, were granted exemption from the cuts, but Nigeria wasn’t.
Nigerian Oil Minister Emmanuel Kachikwu, told THISDAY last week that the country hadn’t asked for an exemption, and that it could contribute with up to 40,000 bpd to the 800,000 bpd OPEC has pledged to cut from January. The 40,000-bpd figure is some 2.5 percent of Nigeria’s current crude oil production of 1.7 million bpd, the minister said.