Shell Nigeria Exploration and Production Company Limited (SNEPCo) has announced that the 2022 Turnaround Maintenance (TAM) of the Bonga floating production storage and offloading vessel (FPSO) has been completed.
The 225kbopd capacity FPSO was shut down on October 18, 2022 to carry out statutory inspections, recertifications and other critical asset integrity restoration activities.
The 2022 TAM which was originally planned for 30 days was completed in 22 days on November 9, 2022 thanks to excellent front-end planning and flawless execution.
Commissioning and start-up activities are in progress and will culminate in ramp up of oil and gas production in the coming days.
The Shell Nigeria Exploration and Production Company (SNEPCo), operator of the Bonga field, produces 12.5% of Nigeria’s oil production. This generates significant and stable revenue for the government through taxes, royalties and levies. In 2019,
SNEPCo continued to use its knowledge, experience and proven deep-water technologies to unlock new resources safely and efficiently. For example, the company used a specialised twin-deck drillship over the Bonga field to reduce the cost and time to complete a well-drilling operation. This involved a technique known as single trip completion, which combined fine instruments and careful planning. It was developed with Schlumberger and used for the first time anywhere in the world in Nigeria.
Bonga, Nigeria’s first deepwater oil field, currently has the capacity to produce 225,000 bpd of crude oil and 150 MMcf/d of gas which feeds the Nigeria Liquefied Natural Gas (NLNG) plant at Bonny.
Developing Bonga South-west was set to add around one billion barrels to Nigeria’s oil reserves, the report stated.
Shell had previously said it would develop the Bonga South-west project in three phases, with a total potential yield of 3.2 billion barrels.
Output from the field was one of the projects Nigeria was banking on to raise production to around three million bpd by 2023, NNPC officials said.
Nigeria, which produces high quality light sweet crude oil, has seen its production slump to multi-decade lows, due to alleged operational, technical and sabotage issues.
The country has the capacity to pump around 2.2 million bpd of crude and condensate, but in 2021 output languished near 1.55 million b/d.
Developing the Bonga Southwest would cost $10 billion, according to estimates by the NNPC, the concessionaire of the field.
The bulk of Bonga Southwest’s resources are located in OML 118, but it also extends into OMLs 132 and 140, operated by US major Chevron, where it is called Aparo. Other partners in the project are France’s TotalEnergies and Italy’s Eni
Shell has invested in businesses in Nigeria for more than 60 years and has interests in several companies that produce, distribute and export oil, gas, liquefied natural gas (LNG) and other energy products.
Three businesses are ultimately wholly owned by Shell plc and together are known as the Shell Companies in Nigeria (SCiN): The Shell Petroleum Development Company of Nigeria Limited (SPDC) has a 30% share in the SPDC joint venture (SPDC JV) which produces oil and gas in the Niger Delta.
The Shell Nigeria Exploration and Production Company Limited (SNEPCo) produces oil and gas in the deep waters of the Gulf of Guinea. Shell Nigeria Gas Limited (SNG) provides gas to industrial and commercial customers.
In addition, Shell Gas B.V. holds a 25.6% shareholding in Nigeria LNG Limited (NLNG) which produces and exports LNG to European and other markets. SPDC and SNEPCo also own All On Partnerships for Energy Access Limited (All On), a not-for-profit company limited by guarantee for the purpose of improving access to energy in Nigeria.
In 2021,Shell Companies in Nigeria spent $800 million on contracts to Nigerian-registered companies which is the same level as the 2020 spend.
$986 million in corporate taxes and royalties paid to the Federal Government of Nigeria (SPDC $424 million and SNEPCo $562 million), compared with $900 million in 2020.
The SPDC JV, SNEPCo and SNG spent $33.82 million in direct social investment, compared with $49.4 million in 2020. The decline is largely because in 2020, significant contributions were made to COVID-19-specific programmes supporting communities impacted by the onset of the pandemic.
The SPDC JV, in compliance with statutory requirements, paid $38.7 million in 2021 to the Niger Delta Development Commission (NDDC). SNEPCo and its co-ventures paid $23 million to the NDDC.
Combined production from SPDC and SNEPCo (Bonga) declined to 493,000 barrels of oil equivalent, compared with 614,000 barrels of oil equivalent in 2020. The decline was largely a result of divestment action and activity curtailment due to heightened security issues in the Niger Delta.
Shell Companies in Nigeria directly employed 2,500 people (of whom 97% were Nigerian nationals) with more than 8,500 contractors supporting operations.
In 2019, SNEPCo continued to take steps to add production in deep water. The company invited contractors to bid to develop the Bonga South West Aparo field. The project’s first phase will include developing around 20 deep-water wells and subsea infrastructure, and building a floating production, storage and offloading vessel.
Contribution to society
Shell Companies in Nigeria continue to support the development of local communities and companies as part of their contribution to the economy. These companies also work with others such as the government to run social investment programmes. In 2019, Shell-operated ventures contributed $40 million in social investment projects, mainly in enterprise support, education, health care and road safety.